Symphony Ltd

BSE: 517385 | NSE: SYMPHONY | ISIN: INE225D01027 
Market Cap: [Rs.Cr.] 5,787.54 | Face Value: [Rs.] 2
Industry: Domestic Appliances

Director's Report
Directors' Report

To The Members, Symphony Limited

On behalf of the Board of Directors, I have great pleasure in presenting to you, the26th Annual Report and Audited Accounts on standalone as well as consolidated basis forfinancial year ended on June 30, 2013.

1] A) Financial Results

(Rs. in Lacs)

Particulars Standalone Consolidated
2012-2013 2011-2012 2012-2013 2011-2012
Revenue from Operations & Other Income 32,512 25,849 39,473 31,974
Profit before Financial Costs, Depreciation & Taxation 9,404 7,214 9,587 7,886
Less: Financial Costs 51 67 62 75
Less: Depreciation & Amortization Expenses 131 169 394 486
Profit before Tax 9,222 6,978 9,131 7,325
Less: Current Tax 2,522 1,957 2,522 1,957
Less: Deferred Tax (4) (13) 151 57
Less: Provision for tax of earlier years 436 - 436 -
Less: Loss from discontinuing operations - - 11 1
Profit after Taxation 6,268 5,034 6,011 5,310
Balance as per last year’s Balance Sheet 10,300 8,252 11,222 8,898
Amount available for Appropriation 16,568 13,286 17,233 14,208
Less: Transfer to General Reserve 1,000 750 1,000 750
Less: Proposed Dividend & Dividend Tax 2,660 2,236 2,660 2,236
Balance at the end of year 12,908 10,300 13,573 11,222

B) Other Key Financials as on June 30, 2013

Consolidated Financial Results

In order to provide a better understanding of performance of the company in view of itsglobal operations, we present hereunder the consolidated results of Symphony and itsglobal subsidiaries in addition to the company’s financial performance from Indianoperations on standalone basis. The company scaled new heights and benchmarks in terms ofsales and profits for financial year ended on June 30, 2013. The company’sconsolidated total revenue increased to Rs.39,473 Lacs from Rs.31,974 Lacs in the previousyear, recording a robust growth of 23%. The consolidated profits after tax for thefinancial year under review increased to Rs.6,011 Lacs as against Rs.5,310 Lacs in theprevious year registering a growth of 13%. During the year under review, the companyrecorded a robust growth of 17% in its consolidated net worth.

Key Financials

Particulars Standalone Consolidated
Equity Share Capital Rs. 700 Lacs Rs.700 Lacs
Net worth Rs. 18,707 Lacs Rs.22,221 Lacs
Book Value per Equity Share Rs.53 Rs.64
Earning Per Share (EPS) Rs.17.92 Rs.17.18
Investments/Corporate Funds Rs.13,911 Lacs Rs.13,911 Lacs
Contribution to exchequer Rs. 6,784 Lacs Rs.7,484 Lacs

Management and Discussion Analysis forming part of this Annual Report provide detailedinformation and analysis of financial results for the year under review.

2] Dividend

Your directors have pleasure to recommend a dividend of Rs.6.50 (325%) per Equity Sharehaving face value of Rs.2/- for the financial year ended June 30, 2013 [last year Rs.5.50(275%) per Equity Share having face value of Rs.2/-, which was comprised of Rs.3/- perEquity Share as normal dividend and Rs.2.50 as a Silver Jubilee Year Special Dividend.]

The dividend payout for the year under review has been formulated in accordance withshareholders’ aspirations and the company’s policy to pay sustainable dividend;linked to long term growth objective of the company to be met by internal cash accruals.The total pay out on account of dividend is Rs.2,660 Lacs, the highest ever pay out by thecompany since inception. This translates into a dividend pay out ratio of 42.44%(including dividend distribution tax) on standalone profit.

3] Performance Review

Year 2012-13 proved to be a challenging year amidst global economic uncertainties anddisturbances in many parts of the world. Despite such constraints and challengingenvironment, your company in the year 2012-13, recorded an encouraging performanceregardless of the inflationary environment, increasingly competition and the challengingmarket environment. During the year under review notwithstanding the above your companyoutshined its past track record and achieved a robust performance both in terms of volumeand sales revenue. There was stock out position for personal coolers in peak season. Yourcompany has made it possible by effective initiatives which focused on consumers anddevelopment of market network with emphasis on innovation, greater efficacy andenvironment friendly products, while strengthening organisational leadership. Yourcompany’s business continues to grow strongly in double digits. Your companycontinues its focus on cost control, inventory management and productivity enhancement toimprove margins. Your company also endures to lay emphasis on cash generation driven bystrong performance, focus on efficiencies, cost management and continued efficientcollection system.

Your company along with its subsidiaries has been able to expand more capacities,register encouraging performance, expand into new geographies, strengthen its marketnetwork. Further, over the years, your company has consciously developed its intellectualproperty rights in form of trademarks, copy rights and designs etc. for different modelsof air coolers as well as of logo and corporate brand "Symphony". Today, yourcompany enjoys large number of registrations in India as well as in several countriesworld over. Your company firmly believes that its trademarks and designs have considerablevalue and significance which greatly help in marketing its products. Brand"Symphony" today is the most trusted brand in air cooler industry in the countryas well as in many parts of the world. Your company sustained its focus to magnify itsnationwide market network and at present it has 766 distributors and 16,400 dealersrepresenting about 4,500 towns with adequate warehousing facilities in all strategiclocations to cater to every nook and corner of the country. Your company strengthened itsoperating structure of marketing function to capture the vast dormant markets of thenation. On ‘After Sales Service’ front, your company has also enlarged itsnetwork of service franchisees with ‘Nation Wide Customer Care Number’ to coverimportant towns all over the country for timely and resourceful after sales service. Yourcompany managed investments prudently by deploying surplus funds after ensuring that suchinvestments satisfy the company’s criteria of safety and security.

Air coolers - Domestic Operations

Business of the company continued its growth journey during the year with extensivemarket network as well as enlargement of dealer network. During the financial year, yourcompany strengthened its leadership position in air cooler industry by consistent growthin terms of sales volume. Your company achieved its goals by focusing on strategicinitiatives which inter-alia comprise of engaging to promote own brand, innovation forgrowth, being effective and efficient and leading to win.

Well planned and successful marketing strategies have made Symphony coolers a muchpreferred choice in competitive environment. Customer focus, quality and power saving havebeen core strengths of the company.

To keep pace with growing demand for our products, the company is constantly exploringoptions for augmenting capacity at the existing locations and also by tying up with neworiginal equipment manufacturers in strategic locations. Year 2012-13 was marked bysignificant advance in our R & D initiatives in the products of the company, whichadded momentum to its growth journey. It has been constant endeavour of your company toinstigate innovations so as to offer an extensive selection for different customers of aircoolers in terms of different models and features to suit their individual requirement.

Your company during the year under review, introduced 6 new models of ‘i’series air coolers (intelligent coolers with features such as empty tank alarm, fullremote function, memory restore function etc.). It also launched air coolers with‘dura pump technology’ having pump with long life to grab potentiality of theunexplored market. Your company together with its subsidiaries offers 87 models of aircoolers for almost all categories of customers to cater to their needs for air coolers,manufactured either in house or out sourced. A visible evolution in pattern of rural areasconsumption has been phenomenal, with increasing demand for quality products. The verycharm of the Indian consumer market is leading to steep competition among the key playerswhich has been encountered by your company through strategic advertising and promotionaldrive to prevail upon the consumers by offering superior value for every rupee spent. Yourcompany penetrated into new markets with firm focus on emerging markets which arecurrently outpacing growth in developed market reiterating our emphasis in thesegeographies. The organisation offer value added air cooler models to complement theevolving needs of global markets.

To meet need for expanding business, your company has strengthened its marketing teamby employing competent team of marketing professionals in India as well as in severalcountries of its operations.

With a view to fully leverage all these improvements and strategies, the advertisingcampaign in 2013 season was far more aggressive compared to the previous year. Theaggressive advertisement campaign was formulated only after in-depth workshop to evaluatecommunication strategy to cultivate the air cooler market. Your company communicatedIndia’s cooling needs are diverse and how Symphony air cooler meets all the needs."Symphony cooler" is positioned as "India ka cooler, India ko rakhecooler."

Modern Trade

Symphony continued to become stronger in modern trade with remarkable growth over theprevious year and also proved to be a leading air cooler brand in retail. The companybecame more aggressive in e-commerce resulting into growth through leading e-commercesites.

The modern trade channel continued to be a growth engine to the company’s businessas it drives growth by better shopping experience. Your company continued to broaden itsmarket network to penetrate with greater space. Your company now enjoys significantportion of the organised retail chain in the country. Your company believes that theModern trade is growing at a fast clip and is optimistic to exploit its potentiality.

Industrial Air Coolers

Industrial Cooler business of the company is in nascent stage and the focus has been tostrengthen the business. The company has developed in-house air cooling project designfacilities with a dedicated resource. Another important step undertaken by your company isto create a productive base of dealer network across the country.

The overall business has shown remarkable growth during the year under review to thetune of 107% over business of industrial cooler of previous year. Also the company hasstrengthened its manpower across the country to capture the untapped market of IndustrialCooler business.

Your company has made some major breakthroughs in terms of entry into new customersegments like paint industry, logistics, moulding industry, auto Industry, carpetindustry, religious sector, bakery, FMCG companies, food industry, educational institutes,auditorium, bottling plant, etc. Your company has also received repeat orders from somecustomers to whom industrial coolers were supplied earlier which establishes their trustin the company and its products.

Your company has also started a novel concept of air cooling the railway running roomsand waiting halls etc. Also, the company has made inroads with approvals from some keyopinion makers like HVAC consultants and big HVAC Contractors.

The year under review also witnessed many business developmental activities likeparticipation in many exhibitions, CII expos, Ishrae and Ashrae meets and advertisement inmany HVAC journals and newspapers with overwhelming response. An innovative digitalcampaign was also initiated which was successful.

Air coolers - Overseas Operations

The company continued its focus on exports in 2012-13. Presently, your company exportsto about 60 countries and there is a huge potential yet to be tapped. During the year,Symphony increased its spread in Latin America and Africa.

In the year 2012-13, the export revenues [including subsidiary viz. Impco S.DE. R.L.DE.C.V, Mexico (Impco)] were Rs.3,533 Lacs as compared to Rs.4,096 Lacs in the previous year.Though, there is a reduction in overall international sales, if we take out exports madeto Impco from international sales, then there is robust increase of about 40% in salesvalue to rest of the world and price realization has gone up in excess of 6%. During theyear, Symphony added some new countries like Ecuador, Bolivia, Armenia, Kazakhstan andMauritius; recently Symphony has finalised a large distributor in Pakistan.

In export market, as a revised strategy the focus is on large markets. The strategy isto focus on some of the large and important select markets and to work in a focused way.Symphony has also planned to have a warehouse in Europe to enhance penetration in EU. Itis also in process of establishing a branch in UAE. This will help substantially toincrease sales in Middle East and North African countries. Your company also continues itsfocus on exports primarily to MENA, Latin America etc. Symphony continues to have variousinternational quality certifications like CE, SASO, ETL, NOM, KUCAS, GS certificate fromGermany etc which give access to other countries as well..

Impco S.DE. R.L.DE. C.V, Mexico

Coming to operations of subsidiary of the company, viz. Impco S.DE. R.L.DE. C.V, Mexico(Impco), it has registered subdued performance during the year. Sales have not happened asper the plan. This is mainly on account of delayed season, which affected entire aircooling industry including air conditioners, air coolers and fans. As a result of thateven service centre sales got affected to some extent. Consequently, though overalloverheads were almost the same as per the last year margins were under pressure and hencethe performance. Impco has already identified the necessary strategy and steps to be takento improve the performance, just to narrate some of them, lean manufacturing project hasbeen under discussion and will be implemented during the next year. The project is beingimplemented basically to have improved control on costs, including manufacturing costs,inventory costs and also to further rationalise inventory level.

SEZ Unit at Sachin, near Surat in Gujarat

The performance of SEZ Unit of the company at Sachin, near Surat in Gujarat during theyear under review was quite encouraging. The SEZ unit entails various benefits, including100% income tax exemption on export profits from SEZ unit.

4] ICAI Award for Excellence in Financial Reporting:

Your company’s Annual Report and Accounts ended on 30th June 2011, for consecutivesecond year, have been adjudged as the winner of an award under the categoryVII-Manufacturing Sector (Turnover less than Rs.500 Crores) of the "ICAI Awards forExcellence in Financial Reporting".

5] Corporate Governance

Your company strives to maintain high standards of Corporate Governance in all itsinteractions with stakeholders. The company continues its endeavour to be a sustainableand trusted organisation as sustained governance is the corner stone in building andmaintaining relationships with all its stakeholders. The company’s relationship withits stakeholders is an important component of Corporate Governance. An ongoing interactionwith investors and communicating information about the company in an unswerving andcredible manner helps to establish a transparent relationship. It rigorously follows apolicy of 100% compliance with all statutory requirements and has a healthy system toreview them.

The CMD, Executive Director and Chief Financial Officer (CFO) have certified to theBoard regarding the financial statements and other matters as required in clause 49 of theListing Agreement and the said Certificate is contained in the report. A Certificate fromthe auditors of the company regarding compliance of conditions of Corporate Governance asstipulated under clause 49 of the Listing Agreement is also annexed. All the Board membersand senior management employees have affirmed compliance with the Code of Conduct. TheBoard has implemented a Code of Business Conduct and an "Ethics Code" aimed atmembers and senior management to inculcate business ethics in the company in theirdealings with employees and business associates. Report on Corporate Governance forms anintegral part of this Annual Report.

6] Trade Relations

Your directors wish to record appreciation of the continued unstinted support andco-operation from its retailers, stockists, suppliers of goods/services, clearing andforwarding agents and all others associated with the company. Your company will continueto build and maintain strong link with its business partners.

7] Management Discussion and Analysis Report

Management Discussion and Analysis Report for the year under review as stipulated underclause 49 of the Listing Agreement with Stock Exchanges in India, is presented in separatesection forming part of this Annual Report.

8] Human Resources:

The employee relations in the company continued to be cordial. Over the years, yourcompany’s focus has increased towards human capital. Your company believes that thesupport of human capital is of utmost importance to sustain the market leadership in allproducts segments and also to capture markets. The company firmly believes that employeesare the most vital assets and key differentiators of business success.

In order to enhance the efficiency and effectiveness, the company instituted severalemployees friendly policies and employees development programmes, across all levels, toenthuse a vibrant work culture and ensure that the workforce remains invigorated andmotivated. Your company has also successfully migrated to an improved PerformanceManagement System to identify the high performers and reward appropriately which hashelped to achieve better employee engagement score. We are striving to build a performancedriven culture and create an environment conducive for employee growth.

9] Directors

Pursuant to the provisions of the Companies Act, 1956 and Articles of Association ofthe company, Mr. Himanshu Shah, Director of the company retires by rotation at the ensuingAnnual General Meeting, and being eligible, offers himself for reappointment. Yourdirectors recommend his reappointment.

10] Fixed Deposit

During the year under review, the company has not accepted any fixed deposit from thepublic and as on June 30, 2013 the company does not hold any unclaimed deposits orinterest thereon.

11] Branch at UAE

Symphony is in process of establishing a branch in U.A.E, which is an important hub fortrading activities for MENA region - ‘Middle East North Africa’. This regionincludes GCC countries (Gulf Cooperation Council), other Middle-eastern countries andNorth African countries. The whole of this region has vast and promising markets for aircoolers. Your directors believe that on opening of this branch, the company foresees toexpand its presence in this area.

12] Subsidiaries

The company during the year under review, has fully subscribed 37,00,000 equity shareseach of US$ 1 (fully paid up) issued by its subsidiary i.e. Sylvan Holdings Pte. Ltd.,Singapore.

During the year under review, to realign and consolidate the business being carried outby the subsidiaries of the company, it has been decided to close down Symphony Air CoolersInc., USA. The business of Symphony Air Coolers Inc. will be taken care by the SymphonyUSA Inc., subsidiary of the Impco S.DE. R.L.DE. C.V., Mexico, which is also a step downsubsidiary of the company. Consolidation exercise and consequent reduction in the numberof subsidiaries will help in enhancing operational flexibility, efficiencies and greaterand optimal utilisation of resources and also lead to significant reduction in themultiplicity of legal and regulatory compliances.

Your company has two subsidiary companies (and two step down subsidiary companies) i.eSylvan Holdings Pte. Ltd., Singapore, (Sylvan) and Symphony Air Coolers Inc. USA. Sylvanhas a subsidiary company in Mexico i.e. Impco S.DE. R.L.DE. C.V. (Impco), whichmanufactures and markets a variety of industrial and small coolers. Impco, in turn, has asubsidiary company in USA, namely Symphony USA Inc., which markets a variety of coolers.

Except this, there is no material change in the nature of the business of thesubsidiaries.

Pursuant to the provision of Section 212 (8) of the Companies Act, 1956, the Ministryof Corporate Affairs vide its circular dated February 8, 2011 has granted generalexemption from attaching the Balance Sheet, Profit & Loss Account and other documentsof the subsidiary Companies with the Balance sheet of the company. The company will makeavailable the Annual Accounts of the subsidiary companies and the related detailedinformation to any member of the company, who may be interested in obtaining the same. Theannual accounts of the subsidiary companies will also be kept open for inspection at theRegistered Office of the company. The Consolidated Financial Statements presented by thecompany include the financial results of its subsidiary companies.

13] Consolidated Financial Statements

In accordance with the Accounting Standard 21 on Consolidated Financial Statements, theaudited consolidated financial statements have been prepared and are provided in AnnualReport pursuant to clause 32 of the Listing Agreement entered into with Stock Exchanges.

14] Director’s Responsibility Statement

Pursuant to sub-section (2AA) of Section 217 of the Companies Act, 1956, the Board ofDirectors of the company hereby states and confirms that: i. in preparation of the AnnualAccounts, applicable accounting standards have been followed and there has been nomaterial departures; ii. such accounting policies have been selected and appliedconsistently, and judgments and estimates made are reasonable and prudent so as to give atrue and fair view of the state of affairs of the company as at June 30, 2013 and of theprofit of the company for that period; iii. proper and sufficient care has been taken forthe maintenance of adequate accounting records in accordance with the provisions of theCompanies Act, 1956 for safeguarding the assets of the company and for preventing anddetecting fraud and other irregularities; iv. the annual accounts have been prepared on agoing concern basis.

15] Insurance

Insurable interests of the company including Factory Building, Plant & Machinery,Stocks, and Vehicles etc. are adequately insured.

16] Disclosure

In line with the requirements of Listing Agreements with Stock Exchanges and theapplicable Accounting Standards, your company has made disclosures in Notes on Accountsfor the year under review in respect of related party transactions, calculation of EPS anddeferred tax liability.

17] Reduction in Contingent Liability

Your Directors are happy to inform that the disputed sales tax demand against thecompany of Rs.4,425 lacs (out of total Rs.4,429.67 lacs) as stated at Notes to Accounts(28) b) has been favourably decided by the Gujarat VAT Tribunal vide its order dt. October8, 2013. The said contingent liability therefore ceases to exist w.e.f. October 8, 2013.

18] Conservation of Energy Technology Absorption and Foreign Exchange Earnings andOutgo

As required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies(Disclosure of Particulars in Report of Board of Directors) Rules, 1988, details relatingto Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgoare given in Annexure attached hereto and forming part of the Directors’ Report.

19] Particulars of Employees

In terms of the provisions of Section 217 (2A) of the Companies Act, 1956, read withthe Companies (Particulars of Employees) Rules, 1975 as amended, names and otherparticulars of employees are set out in annexure to the Directors’ Report. Havingregard to the provisions of Section 219(1)(b) (iv) of the said Act, the Annual Reportexcluding the aforesaid information is being sent to all the members of the company andothers entitled thereto. Any member interested in obtaining such particulars may write tothe company secretary at the registered office of the company.

20] Corporate Social Commitments

Your company is committed to play its role as an enlightened corporate citizen andendeavours to reach out to the underprivileged in and around the areas of its operations.

21] Auditors

M/s. Shah & Dalal, Chartered Accountants, Ahmedabad, hold office as Auditor of thecompany until the conclusion of the ensuing 26 Annual General Meeting and the Boardrecommends their appointment till the conclusion of next Annual General Meeting.

The company has received a certificate from Auditor to the effect that theirappointment, if made, would be within the prescribed limits under Section 224(1B) of theAct.

22] Cost Auditors

Pursuant to Cost Audit Branch Order dated November 6, 2012, issued by Ministry ofCorporate Affairs, M/s. Dalwadi & Associates, Cost Accountants, have been appointed asCost Auditors for the financial year ending June 30, 2014 with approval of CentralGovernment. The cost compliance report for financial year 2011-12 was filed by the companyon September 29, 2012. Further the cost audit report for the financial year ended June 30,2013 will be filed within prescribed time period.

23] Secretarial Audit Report

As a step towards good corporate governance practice, the Board of Directors of yourcompany appointed Mr. Ashwin Shah, practicing Company Secretary, to conduct SecretarialAudit. The Secretarial Audit Report for the financial year ended June 30, 2013 is providedin the Annual Report. The Secretarial Audit Report confirms that the company has compliedwith all the applicable provisions of the Companies Act, 1956, Depositories Act, 1996,Listing Agreements with Stock Exchanges, Securities Contracts (Regulation) Act, 1956 andvarious Regulations and Guidelines of SEBI as applicable to the company, including theSecurities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992.

24] Acknowledgement

Your Directors sincerely appreciate the high degree of professionalism, commitment anddedication displayed by employees at all levels.

Your Directors also gratefully acknowledge the support and co-operation extended to thecompany by the OEMs, distributors, dealers, service franchisees, suppliers, C&FAs,bankers and all other stakeholders of the company and look forward to their continuedpatronage. The Directors also wish to place on record their gratitude to the Members fortheir continued support and confidence.

For and on behalf of the Board
Place: Ahmedabad. Achal Bakeri
Date: October 29, 2013 Chairman & Managing Director


Information as required under section 217 (1) (e) of the Companies Act, 1956 read withthe Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988and forming part of the Directors’ Report for the financial year ended on June 30,2013.


1] Conservation Of Energy

Energy Conservation Measures Taken:

- Constant endeavor made to replace metallic components by global speciality plastics.

- Completely changed the electrical distribution system viz. L T Panels, cable routingetc.

- Replacement of ballasts (chokes) by more efficient one.

- Reduction of inwards and online inspection by bringing manufacturing procedures understatistical quality control [SQC].

- Avoidance of night shifts due to increased productivity during day shifts.

- Design of new moulding tools for higher productivity and thereby reduced processingpower requirement per piece.

- Redesigning the product and packaging dimensions to allow optimum quantity oftransportation per truck or container. This leads to lower fuel consumption per piece.

- Designing of Motor (Most critical part of coolers) to consume minimum power. PowerSaver Technology.

- Use of Dura pump technology which automatically senses its non usage and cuts off thepower supply to save power as well as the component.

2] Technology Absorption:

Efforts made in technology absorption Form B is Annexed

3] Foreign Exchange Earnings And Outgo:

(A) Activities relating to exports, initiatives taken to increase export

Futures & Options Quote
Future Data Not present
Key Information

Key Executives:

Achal Bakeri , Chairman & Managing Director

Nrupesh Shah , Executive Director

Dipak Palkar , Director

Himanshu Shah , Director

Company Head Office / Quarters:

Saumya Nr Bakeri Cirle,
Phone : Gujarat-91-079-26424430 / Gujarat-
Fax : Gujarat-91-079-26425930 / Gujarat-
E-mail :
Web :


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