Adam Smith Awards ASIA 2021 submission form

Client details
 Full Name: Sugandha Singhal
 Job Title: Treasury Head - Global
 Company: SRF Limited
 City/Town: Gurgaon
 Country: India
 Email address: Sugandha.Singhal@srf.com
 Phone number: +91 9818664652

Highlight category / categories for your submission.

 Top Treasury Team

 Best Cash Management Solution
 Best Liquidity/Investing Solution
 Best WCM, AP/AR Solution
 First Class Relationship Management
 Best Card/e-Cash Solution
 Best Trade/Supply Chain Finance Solution
 Best Funding Solution
 Best ESG Solution
 Best Foreign Exchange Solution
 Best Risk Management Solution
 Harnessing the Power of Technology
 Best New Technology Solution
 Best Crisis Management Solution
 Best Cyber-Security Solution
 Best SME/MME Treasury Solution*
 Best in Class Treasury Solution in ASEAN
 Best in Class Treasury Solution in India
 Best in Class Treasury Solution in PRC
 Best Talent Management Solution
 Treasury Today Asia Woman of the Year – separate nomination form (see below)
 Corporate Treasurer of the Year – separate nomination form (see below)
 A Rising Star – separate nomination form (see below)
* If you ticked Best SME/MME Treasury Solution, please advise your company's annual sales turnover globally
and number of employees globally.

Highlight the geographic dimension(s) of your submission.

 Global
 Regional - Pan-European
 Regional – The Americas
 Regional - Asia Pacific
 Regional - Middle East/UAE
 Regional - Africa
 Single country
 Multi country, but not fully regional
If you highlighted the "Single country or Multi country, but not fully regional", please state the country / countries
in which the solution has been / is being implemented.

Questions
1. Briefly describe the solution and the problem(s), issue(s) and/or objective(s) that were addressed.

SRF Ltd is a multi-business entity with manufacturing plants in India, Hungary, South Africa and Thailand.
SRF’s business portfolio covers technical textiles business, chemical business, packaging films business &
other small business of coated fabrics and laminated fabrics. The Technical Textiles Business (TTB)
manufactures tyre cord fabric, industrial yarn, belting fabrics,. Chemicals Business (CB) manufactures

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 fluorine-based refrigerants, chloro-methanes & speciality chemicals and the Packaging Films Business
manufactures biaxially oriented polyester (BOPET) film and biaxially oriented polypropylene (BOPP) film.
SRF caters to both domestic and international markets across these businesses.

Objectives:

SRF has set itself on a path of rapid growth. Over the last 5 years SRF has invested close to $ 750 mn
across geographies and has witnessed topline increasing by 46% over FY 18 to $ 1.2 Bn in FY 21. Its rapid
growth along with geographical expansions required its treasury to be an enabler across business units and
across geographies. The treasury team at SRF works closely with business team to deliver on the following
key priorities:

- Working Capital Optimization

- Credit Risk Mitigation
- Reduction of DSO
- Increase DPO
- Increased Debt Capacity

Challenges:
The scale that SRF wanted to achieve with their global program was no easy task:
- Multiple business units that run as independent profit centers
- Varied credit profile across buyers and suppliers
- Varied payment terms across business units and buyers
- Programs requiring bilateral negotiations with customers and vendors to onboard them on various
programs
- Accounting and taxation impact of the programs were complex and different across geographies
requiredand required customizations as no single solution could be implemented
- Export / Import programs impacted the hedging strategy of the company

Citi solution:
SRF and the Citi teams worked together to co-create a strategic solution. The intent was to provide
maximum coverage across business units. Citi and SRF team did a 3 month long detailed data analysis
requiring data collation of past 3 years:
- Profiling and bucketing of various suppliers and customers based on identified parameters
- Identify strategic solutions for each category of suppliers and customers
- Shortlist and segment suppliers and customers that can be targeted
- Structure a customized solution for each segmentation for customers / Vendors highlighted
- Customization of programs in line with local tax regulations
- Structuring the program to meet the accounting requirements, data privacy rules etc.
- Bilateral discussion with relevant parties for onboarding them in the program

We identified the following segments and implemented the following solutions across business units:
Buyers:
- High credit rated customers: Insurance Backed Receivable Finance
- High credit rated customers with own supplier financing programs
- Low credit rated customers: Distribution Finance
- Customers providing letters of credits: Export LC discounting

Suppliers:
- Suppliers onboarded with Citi on supplier finance: Citi Supplier Finance Program
- Large value suppliers: Supplier finance Program / Usance Payable at Sight LCs depending on
supplier comfort
- Suppliers accepting letters of credit: Usance Payable at Sight LCs

Solution summary:
- Distribution finance: The revolutionary AR financing solution gave SRF the flexibility to cover a
substantial portion of its sales portfolio. The solution design required careful assessment of historical

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 performance of the selected portfolio. The portfolio due diligence was an import factor in determining the
risk participation % by SRF in the form of an First Loan Default Guarantee ({FLDG). The solution is
delivered via a digital platform.
- Insurance bank AR financing: The credit mitigating solution allowed SRF to target customers with
credit standing with insurance appetite. The solution design required working with SRF team to identify
coverable customers and explore maximum coverage through dialogues with insurance companies. The
solution is delivered via a digital platform.
- Export LC discounting: The solution involved identifying credit-worthy banks for Citi and working with
customers to restrict LC issuance with the selected banks. These LCs were then centrally discounted by
Citi.
- Usance Payable at Sight LCs: The multi-geography letter of credit backed financing solution allowed
SRF to manage DPOs without modifying existing payment terms with vendors. The solution generated
additional credit period for SRF by extending payment terms under the LC. The solutions is delivered via
a digital platform.
- Supplier Finance Program of Customers: Large customers of SRF has their own supplier finance
programs with multiple banks. All these banks were evaluated, and Citi were chosen by SRF as SRF’s
existing export discounting program were with Citi and having two programs offers flexibility, better rate
negotiation power to SRF in terms of choosing financing under their export discounting program or
customer’s supplier financing program.

- Supplier Finance: The multi-geography program for SRF has been implemented through careful
identification of suppliers, followed by an outreach done jointly by SRF and Citi. The solutions were
delivered digitally via Citi’s global supplier finance platform.

Internal Dashboard

MIS reports for various programs have been customized to enable creation of internal dashboards. The
benefits of these dashboards are as under:
 Increased visibility of various programs spread across geographies
 Ability to have location wise and business wise analytics
 Ability to take informed decision making
 Actual and predictive analysis on impact of these programs on balance sheet, interest rate etc
 Streamlining of operational and accounting process across geographies
 Robust communication to internal stakeholders

2. Briefly describe how best practice and/or innovation are being demonstrated.

Citi solution demonstrated the following key methodologies during solution design:
- Data-driven approach: Citi team did an analysis of the entire receivable and payable data for SRF
business units across geographies.
- Ecosystem focus: The solutions suite has been designed to enable SRF ecosystem to deliver at its best
by not force-fitting solutions but by careful design of each solution to fit the end needs of users.
- Co-creation: SRF and Citi demonstrated collaborative approach by working together to develop solution
parameters acceptable to SRF, Citi and SRF’s ecosystem partners.
- Focus on Analytics – The solutions designed MIS and other data that could be used by clients to
develop analytical insights into the entire program and supplier / customer behaviour.

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 - Compliance compatible – The solutions were designed to generate statements, MIS and other
documents that were required by the client to satisfy tax authorities and other regulators

3. Briefly define the qualitative and quantitative benefits your solution has delivered or you expect to be
delivered.

Key Qualitative Benefits for SRF

- Optimized working capital
- Off balance sheet financing leading to balance sheet strength Balance Sheet strength through
appropriate risk weighted programs
- Cheaper Additional source of funding at a competitive price
- Credit risk mitigation
- Debt covenant managemenimproved financial metricst

Key Qualitative Benefits for SRF’s customers

- Ability to work with extended credit terms
- No change in the payment mechanism for the customer

Key Qualitative Benefits for SRF’s suppliers

- Off balance sheet financing
- Credit Risk Mitigation
- Cheaper source of funding

Key Quantitative Benefits for SRF

- 40 days DSO reduction for customer under the program
- 34 days DPO increase
- Interest rate reduction 1.,50%
- Gross Debt reduction by 23%

4. Please list all the bank(s) and/or service provider(s) and/or consultant(s) that contributed to this solution?
Please identify all partners you wish to be recognised and contacted by us in the event that this nomination
is successful.

Citi

5. In no more than 200 words, define the most important and/or unique reason this solution should win the
award.

SRF is a multi-business entity growing at a rapid pace. It was essential for SRF to ensure that they have an
optimal working capital structure as they transition into a global conglomerate. The AP/AR solution suite
implemented by SRF and Citi not just focused on a single aspect of the business but encompassed the entire
SRF ecosystem. The solutions required alignment across various functions of the business namely treasury
team, business finance team, sourcing team, marketing teams, Taxation team, legal team, process optimization
team and accounting team
The solutioning phase required meticulous analysis of data, bilateral negotiations with parties, customization in
line with taxation and compliance boundaries, to perfect solution relevance and establish optimal implementation
methodology. The end result is a gamut of solutions, many of which hinged on digital transformation coupled with
strong analytical support to future-proof SRF in their journey ahead.
The solutions implemented will help SRF generate incremental efficiencies over the long term by being:
- Scalable across business units and vendor/customer segments
- Replicable across multiple geographies
- Optimal for DSO and DPO management
- Improves balance sheet enhancing ability to grab future oportunities

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 6. Do you have any additional comments?

“The solutions we structured and implemented with Citi were clearly best in class. Besides the clear
benefits that it brought to our business, the scalability of the digital solutions coupled with strong data
analytics now empowers SRF to be agile as we further grow our business in our vision to go global.”
Sugandha Singhal, Global Treasury Head - Global

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