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Symphony Ltd

BSE: 517385 | NSE: SYMPHONY ISIN: INE225D01027
Market Cap: [Rs.Cr.] 6,577.36 Face Value: [Rs.] 2
Industry: Domestic Appliances

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Director's Report
Directors' Report

Your Board of Directors present 27th Annual Report along with consolidated and standalone audited annual accounts for financial year ended June 30, 2014.

1] A) Highlights of Results ( hin Lac)




2014 2012-2013 2014 2012-2013
Revenue from Operations & Other Income 46,637 32,512 54,650 39,473
Profit before Financial Charges, 13,678 9,385 13,990 9,558
Depreciation & Taxation
Less: Financial Charges 5 32 5 32
Less: Depreciation & Amortisation Expenses 115 131 382 394
Profit before Tax 13,558 9,222 13,603 9,131
Less: Income Tax 3,662 2,522 3,676 2,522
Less: Deferred Tax Liability 9 (4) 8 151
Less: Provision for tax of earlier years - 436 (726) 436
Less: Loss from discontinuing operations - - 73 11
Profit after Taxation 9,887 6,268 10,572 6,011
Add: Balance as per last year Balance Sheet 12,908 10,300 13,573 11,222
Amount available for Appropriation 22,795 16,568 24,145 17,233
Transfer to General Reserve - 1,000 - 1,000
Proposed Dividend & Dividend Tax 5,320 2,660 5,320 2,660
Balance carried to Balance Sheet 17,475 12,908 18,825 13,573

B) Other Key Financials as on June 30, 2014 Consolidated Financial Results

Your Company with its subsidiaries have global presence and to view overall comprehensive performance of the Company, the Company has consolidated its accounts with the accounts of its subsidiaries in compliance with applicable accounting standard. The consolidated total revenue stood at RS54,650 lac which grew by 38% as compared to the consolidated total revenue of previous year. The profit after tax touched to RS10,572 lac as compared to RS6,011 lac in the previous year recording an increase of 76%.

The highlights of the key financials are as under:-

(Rs in lac except per share data)

Particulars Standalone Consolidated
Equity Share Capital 700 700
Net worth 23,274 27,578
Book Value Per Equity Share 67 79
Earning Per Share (EPS) 28.27 30.23
Investments / Corporate Funds 19,474 19,474
Contribution to Exchequer 11,857 13,560

2] Dividend

The Board has recommended final dividend of RS1 1 (550%) per equity share having face value of RS2 each for the financial year ended on June 30, 2014, payable subject to approval at ensuing annual general meeting. Your Board of Directors had declared maiden interim dividend of RS2 (100%) per equity share having face value of RS2 each. Thus aggregate dividend for the year ended on June 30, 2014 on approval at ensuing annual general meeting would be RS13 (650%) per share as against RS6.50 (325%) for the previous year.

The total payout including final dividend as above for the year 2013-14 (including dividend distribution tax) would be RS5,320 lac (previous year RS2,660 lac) translating into a dividend payout of 50% (previous year 44%) on consolidated net profit.

Dividend Policy

Symphony believes in maintaining a fair balance between dividend distribution and cash retention. Symphony has been conscious of the need to sustain stability in its dividend payout. Symphony has decided to have a dividend payout of atleast 50% of profits (including dividend distribution tax) subject to business contingency or unforeseen cash requirements. Cash retention is required for future growth, probable acquisitions and to meet any unforeseen contingency. The Company has also a recent practice of paying interim dividend.

3] Operations Review

Operating in policy log jam prevalent during the previous year and uncertain political environment resulted into absence of vibrant growth inducing policies placing nation's economic growth on the backburner. Regardless of adverse external environment coupled with rising cost, stubborn inflation and policy-jam, all business verticals of your Company recorded improved numbers. Your Company on standalone basis posted a gross turnover of RS45,124 lac in 2013-14, a growth of 46% over RS30,836 lac in 2012-13.

During the year under review, your Company continued to develop its nationwide presence by expanding network of its distributors, dealers in more and more towns throughout the country with suitable warehousing facilities in all strategic places in different regions of the country. Your Company continues to strengthen its operating structure of its marketing function to pierce into the immense latent regions within the country. Correspondingly, your Company is also intensifying 'After Sales Service', through service franchisees with 'nation wide Customer Care Number' to touch to core locations of the nation offering well-timed and resourceful after sales service.

Persistent innovative steps by your Company enabled it to offer extensive range of air coolers having varieties of features. Presently, your Company has 23 models of air coolers to outfit the necessities of variety of customers in different provinces of the nation.

To stimulate encouraging prospects, your Company initiated aggressive advertisement and promotional campaigns over print, electronic media and digital with expanded manpower. Your Company is optimistic to tap the enormous opportunity of rural and urban markets.

Air coolers - Domestic Operations During the year under review, your Company strengthened its leadership position in air cooler industry by consistent growth both in terms of sales volume and sales revenue.

Symphony continued its focus on new product development, strategic planning inter-alia consisting of superior quality, penetration in new markets, enlarging market network, prompt and efficient 'after sales service', promotion of brand image, which added momentum to its growth journey. Well planned and effective marketing strategies have made 'Symphony cooler' a much preferred choice in competitive environment. During the year 'BTL' (below the line) activities were successfully introduced by your Company as measure of brand promotion.

Your Company is constantly evaluating options to enhance its capacity at present locations and also by tying up with new original equipment manufacturers at strategic locations in order to keep pace with growing demand. Numerous Research & Development initiatives are undertaken by your Company for improved and new models with added features to meet individual choice of the customers at large. Symphony in the year 2013-14, launched 8 new models of 'air coolers with advanced features. To cater diverse needs for air coolers, your Company along with its subsidiaries offers entire range of air cooling solutions effectively for all classes of customers, manufactured either in house or out sourced.

During the year, your Company penetrated into new markets of North Eastern states of India with robust focus on evolving present markets with more branches and warehousing facilities. Your Company's focus on quality products with power saving technology has been vital strengths. The very allure of the Indian air cooler market is leading to steep competition among the prominent companies which have been encountered by your Company by tactical advertising and promotional drive to prevail upon the consumers by offering greater value for every rupee spent.

Your Company also predicts substantial potential in the country for the air coolers meant for central air cooling solutions, manufactured by its step down subsidiary company, Impco S. de R.L. de C.V., Mexico as its products are fairly well received in the domestic market.

Your Company is confident to continue its growth journey with extensive market network as well as enlargement of dealer network reinforced by competent strong marketing team of professionals in India and abroad.

Modern Trade

Again Symphony sustained its position at number one in modern trade business with amazing growth compared to last year and demonstrated to be a prominent air cooler brand in air cooler trade. The Company became more aggressive in top line products sales at stores, B2B business, e-commerce business, TV shopping business and regional retail sales business.

The modern trade channel continued to be a growth engine to the Company's business as it energies growth by healthier shopping experience and greater visibility in the markets. Your Company continued to widen its modern trade market network to penetrate with better space. Your Company now enjoys substantial portion of the sales through organised retail chain in the country. Your Company believes that the Modern trade is rising at a faster clip and is enthusiastic to exploit its potentiality.

Central Air Cooling Solutions

Central Air Cooling Solutions business of the Company though still in nascent stage had been able to strengthen its operations. The focus was to have adequate representation and therefore the required manpower structure has been employed. Subsequently, the aim is to create a base of dealer network across the country. The dealer network is increased by more than 75% indicating the confidence now the business drives amongst the trade.

Your Company has made some major breakthroughs in terms of entry into prestigious clientele covering various customer segments like auto industry, packaging, places of worship, FMCG, paint industry, logistics, sugar mills, hospitals, distilleries, railways, commercial applications etc. There were repeat orders from some customers which establish their trust in the Company and its products.

Your Company has made inroads with approvals from some key opinion makers like HVAC consultants and big HVAC contractors.

During the year under review, your Company witnessed many business developmental activities like advertisement in leading HVAC journals, newspapers, participation in selected exhibitions with excellent response. An innovative digital campaign was also initiated which was successful.

Air coolers - Overseas Business

Revenues from overseas business during the year under review crossed all previous peaks and touched to RS5,663 lac as against RS3,533 lac in 2012-13, an overall rise of 60%. Presently, your Company continues to export in about 60 countries and with vast opportunities yet to be accomplished.

In the year 2013-14, exports of your Company to European countries grew handsomely. However, external challenging conditions prevalent due to political turmoil and instability in key operational countries of Middle East and North African

Region led to demand contraction coupled with inflationary trend. Although, the business of your Company continued to sustain and the operating margins of exports improved fairly during the year reflecting the strength of the products and its brand in the overseas markets. External conditions are expected return to normalcy and your Company foresees to grow further

The Company continued its focus on strategic and select markets. Your Company has also organised warehouse facilities in Europe to boost presence in European countries. Your Company also continues its focus on exports primarily to MENA region, Latin America etc. Your Company continues to have numerous international quality certifications like GS, CE, SASO, NOM, KUCAS, etc. which contribute access to other countries as well.

SEZ Unit at Sachin, Surat in Gujarat

In the year 2013-14, the SEZ unit of the Company situated at Sachin, Surat, surpassed production of more than one lac air coolers of different models. This is the highest ever production in a single year since its inception. The SEZ unit enjoys number of benefits, both direct and indirect, including 100% exemption of export profits.

4] Overseas Operations - Impco S. de R. L. de C.V, Mexico

Impco S. de R. L. de C.V, (IMPCO), Mexico, step down subsidiary of the Company manufactures and markets a variety of coolers. For the period under review, Impco has shown improved efficiency and registered encouraging results. At Impco, improvement is an on-going exercise to exploit its large manufacturing capacity. Impco has adopted '5-S' system to enhance its operational processes and efficacy.

As a measure of tax reforms undertaken by Mexican government, IETU tax has been abolished w.e.f. January 01, 2014, consequently, the deferred tax liability amounting to RS727 lac, created in the books of accounts of Impco is no longer required and the same has been written back.

Impco serves markets in Mexico and USA and enjoys excellent business tie ups with many prominent modern retails chains like Wal-mart, Sears, Home Depot, Lowes, Famsa, and Costco. This complements the presence of your Company in the global arena.

In June 2014, the Perry Johnson Registrars, Inc, had conducted second ISO 9001:2008 surveillance audit at IMPCO, Mexico and Mr. Enrique Sepulveda, from the external agency informed that IMPCO's processes were in compliance with the Quality Management Systems.

5] Awards & Recognitions

Your Company's products and performance continues to be recognised and appreciated across the country and the globe as well. During the year, your Company has been recognised and bestowed with followings awards:

(i) 'Best Presented Annual Report in the Manufacturing Sector' by the South Asian Federation of Accountants for your Company's Annual Report of 2011-12 for its Transparency, Accountability and Governance.

(ii) 'Quality Mark 2014' award for Best Quality Organisation in the Home Appliances category by the Quality Mark Trust.

6] Management Discussion and Analysis Report

Pursuant to clause 49 of listing agreement, management discussion and analysis report for the year is annexed to this annual report.

7] Corporate Governance

Your Company has inculcated a strong culture of values, ethics and integrity and has always upheld an integrated way of thinking via obligation of action. The Company strives to be a sustainable and trusted organisation as it believes that sustained governance is the corner stone in building and upholding interactions with all its stake holders. The Company's relationship with its investors is a key component of Corporate Governance. An ongoing interaction with investors and communicating information about the Company in a consistent and credible way aids to establish a transparent relationship. It meticulously pursues a policy of 100% compliance with all statutory requirements and has a robust system to review them.

Your Directors consider in upholding the highest standards of accountability and keenly participate in overseeing risk and strategic management. The Board fully supports and endorses Corporate Governance practices in accordance with the provisions of Clause 49 of the listing agreement and the report on Corporate Governance and Management Discussion and Analysis, as required under clause 49 of the Listing Agreement is annexed.

The Chairman and Managing Director, Executive Director and Chief Financial Officer have certified to the Board regarding the financial statements and other matters as required in clause 49 of the Listing Agreement and the said certificate is contained in the Annual Report. A certificate from the auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is also annexed. All the Board members and senior management personnel have affirmed compliance with the Code of Conduct.

The Board has implemented a Code of Business Conduct and an "Ethics Code" aimed at members and senior management to inculcate business ethics in the Company in their dealings with employees and business associates.

8] Subsidiaries

Your Company continues to have two subsidiary companies and two step down subsidiary companies. Sylvan Holdings Pte. Ltd., Singapore, (Sylvan) and Symphony Air Coolers Inc. USA are two subsidiaries. Sylvan has a subsidiary company in a Mexico i.e. Impco S. de R. L. de C.V (IMPCO). Impco, in turn, has a subsidiary company in the USA, namely Symphony USA Inc., which markets a variety of coolers. Symphony Air Coolers Inc. USA is under process of its closure and its business is taken care of by Symphony USA Inc. There is no material change in the nature of business of subsidiaries.

Pursuant to provision of section 212(8) of the Companies Act, 1956, Ministry of Corporate Affairs vide its circular dated February 8, 2011 has granted general exemption from attaching the Balance Sheet, Profit & Loss Account and other documents of the subsidiary Companies with the Balance sheet of the Company. The Company will make available the Annual Accounts of the subsidiary companies and the related detailed information to any member of the Company, who may be interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept open for inspection at the Registered Office of the Company. The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies.

9] Consolidated Financial Statements

In accordance with the Accounting Standard AS-21 on Consolidated Financial Statements and Clause 32 of the Listing Agreement with the Stock Exchanges, the audited Consolidated Financial Statements are provided in the Annual Report 2013-14 for its subsidiary Companies, i.e. Sylvan

Holdings Pte. Ltd., Singapore, Symphony Air Coolers Inc., USA, Impco S. de R. L. de C.V, Mexico and Symphony USA Inc., USA.

10] Directors Responsibility Statement

Pursuant to sub-section (2AA) of Section 217 of the Companies Act, 1956, the directors of the Company hereby state and confirm that:

i. in preparation of the Annual Accounts for financial year 2013-14, applicable accounting standards have been followed and there has been no material departures;

ii. they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

iii. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. they have prepared the annual accounts on a going concern basis

11] Auditors

M/s. Shah & Dalal, Chartered Accountants, Ahmedabad, hold office as Auditor of the Company until the conclusion of the ensuing Annual General Meeting and the Board recommends their re-appointment till the conclusion of next Annual General Meeting.

The Company has received a consent letter along with certificates from Auditor under provisions of the Companies Act, 2013 to the effect that their reappointment, if made, would be within the prescribed limits and are not disqualified for re-appointment.

12] Cost Auditors

Pursuant to Cost Audit Branch Order dated November 6, 2012, issued by Ministry of Corporate Affairs, M/s. Dalwadi & Associates, Cost Accountants, were appointed as Cost Auditor for the financial year ended on June 30,2014 with approval of Central Government.

The cost compliance report for financial year 2012-13 was filed by the Company on December 24, 2013 within prescribed time limit. Further the cost audit report for the financial year ended June 30, 2014 will be filed within prescribed time period.

13] Corporate Social Responsibility:

Section 135 of the Companies Act, 2013 concerning Corporate Social Responsibility together with Rules thereunder and revised Schedule VII were notified on 27 February 2014 to come into effect from 01 April 2014.

Symphony welcomes the initiative taken by the MCA with an objective to embrace responsibility for the corporates actions and to motivate a positive effect through its activities on promoting education, environmental sustainability, rural development, communities and all other members of the public domain who may also be considered stakeholders.

Your Company, being covered under the provisions of the said Section, has constituted a Committee of Directors, titled "Corporate Social Responsibility Committee" comprising of the following 3 Directors as its members:

Mr. Achal Bakeri, Chairperson

Mr. Nrupesh Shah, Member

Mr. Himanshu Shah, Member (Independent Director)

The role of the Committee is to formulate and monitor the CSR Policy of the Company. The

Committee has formulated a CSR Policy, which has been approved by the board.

Since the said section has been enacted w.e.f. April 01, 2014, prescribed details as required under the said Section shall be presented to the members in the annual report for the year 2014-15.

14] Secretarial Audit Report

As a step towards good corporate governance practice, the Board of Directors of your Company appointed Mr. Ashwin Shah, practicing Company Secretary, to conduct Secretarial Audit. The Secretarial Audit Report for the accounting year ended June 30, 2014 is provided in the Annual Report.

The Secretarial Audit Report confirms that the Company has complied with all the applicable provisions of the Companies Act, 1956, Companies Act, 2013, Depositories Act, 1996, Listing Agreements with the Stock Exchanges, Securities Contracts (Regulation) Act, 1956 and various Regulations and Guidelines of SEBI as applicable to the Company, including the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992.

15] Directors

The Board of Directors at their meeting held on August 20, 2014 appointed Mr. Satyen Kothan and Ms. Jonaki Bakeri as Additional Directors and they shall hold office till the ensuing Annual General Meeting of the Company.

As per the provisions of section 149 and other applicable provisions of the Companies Act, 2013 and rules made thereunder and also as per Listing Agreement, the Board has appointed Mr. Satyen Kothari, Mr. Himanshu Shah and Mr. Dipak Palkar as non-executive independent directors for a period of consecutive five years and they shall not be liable to retire by rotation. The Board has appointed Ms. Jonaki Bakeri as a non-executive director liable to retire by rotation.

Mr. Nrupesh Shah, Director of the Company retires by rotation at the ensuing annual general meeting and being eligible, has offered himself for reappointment.

Brief profile of aforesaid directors, as required under clause 49 of the Listing Agreement, is annexed to the notice convening the 27th Annual General Meeting, which forms part of this Annual Report. Your directors recommend appointment of all above Directors.

16] Fixed Deposit

The Company has not accepted any public deposit during the year under review and no unclaimed deposits or interest was outstanding as of June 30, 2014.

17] Insurance

The insurable interests of the Company including factory building, plant & machinery, stocks, vehicles, and other insurable interests like loss of profits, directors & officers' liability etc. are adequately covered.

18] Disclosure

In line with the requirements of Listing Agreement with the Stock Exchanges and the Accounting Standards of the Institute of Chartered Accountants of India, your Company has made additional disclosures in Notes on Accounts for the year under review in respect of related party transaction, calculation of EPS and deferred tax liability.

19] Conservation of Energy Technology Absorption and Foreign Exchange Earnings and Outgo

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 relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo are given in Annexure attached hereto and forming part of the Directors' Report.

20] Particulars of Employees

In terms of the provisions of section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, names and other particulars of employees are set out in annexure to the Directors' Report. Having regard to the provisions of section 219(1)(b) (iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the registered office of the Company.

21] Acknowledgments

Your Directors wish to express their appreciation of the committed services by employees at all levels. Your Directors also wish to place on records their deep sense of appreciation for the valued support & co-operation by OEMs, distributors, dealers, service franchisees, suppliers, C&FAs, bankers and all other stakeholders of the Company and look forward to their continued association with the Company. The Company will make every effort to meet the aspirations of its Shareholders.

For and on behalf of the Board

Achal Bakeri
Place : Ahmedabad Chairman and
Date : August 20, 2014 Managing Director

Annexure to Directors' Report

Information as required under section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988 and forming part of the Directors' Report for the financial year ended on June 30, 2014.


1] Conservation Of Energy

Energy Conservation Measures Taken:

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

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

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

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

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

- Design of new moulding to

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:

Symphony House 3rd Flr FP-12,
TP-50 Bodakdev Off SG Highway,
Phone : Gujarat- / Gujarat-
Fax : Gujarat- / Gujarat-
E-mail : corporate@symphonylimited.com
Web : http://www.symphonylimited.com


Sharepro Services India Pvt Lt
Devnandan Mega Mall ,Office No 416-420 ,4th Floor Ashram Rd ,Ahmedabad-380006

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