Jun 30, 2014
The 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 (Rs.in Lac)
Standalone Consolidated Particulars 2013-2014 2012-2013 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 Rs.54,650 lac which grew by 38% as compared to the consolidated total revenue of previous year. The profit after tax touched to Rs.10,572 lac as compared to Rs.6,011 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
The Board has recommended final dividend of Rs.11 (550%) per equity share having face value of Rs.2 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 Rs.2 (100%) per equity share having face value of Rs.2 each. Thus aggregate dividend for the year ended on June 30, 2014 on approval at ensuing annua general meeting would be Rs.13 (650%) per share as against Rs.6.50 (325%) for the previous year
The total payout including final dividend as above for the year 2013-14 (including dividend distribution tax) would be Rs.5,320 lac (previous year Rs.2,660 lac) translating into a dividend payout of 50% (previous year 44%) on consolidated net profit.
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 externa 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 Rs.45,124 lac in 2013-14, a growth of 46%overRs.30,836lacin 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 ndustry 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 mage, 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 sou reed
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 promotiona drive to prevail upon the consumers by offering greater value for every rupee spent
Your Company also predicts substantial potentia in the country for the air coolers meant for centra 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 confidentto 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
Again Symphony sustained its position at number one in modern trade business with amazing growth compared to lastyearand 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 retai 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 ike auto industry, packaging, places of worship, FMCG, paint industry, logistics, sugar mills, hospitals, distilleries, railways, commercia 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 con tractors
During the year under review, your Company witnessed many business developmental activities ike advertisement in leading HVAC journals, newspapers, participation in selected exhibitions with excellent response. An innovative digita 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 Rs.5,663 lac as against Rs.3,533 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 operationa countries of Middle East and North African
Region led to demand contraction coupled with nflationary 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. Externa 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 mpco 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
mpco, improvement is an on-going exercise to exploit its large manufacturing capacity. Impco has adopted ''5-S'' system to enhance its operationa processes and efficacy
Asa 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 Rs.727 lac, created in the books of accounts of Impco is no longer required and the same has been written back.
mpco 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, yourCompany 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 nvestors 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 financia 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.
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). mpco, 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 nformation 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 Financia 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 Financia 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: in preparation of the Annual Accounts for financial year 2013-14, applicable accounting standards have been followed and there has been no material departures;
i. 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;
i 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
M/s. Shah & Dalai, Chartered Accountants, Ah medabad, hold office as Auditor of the Company until the conclusion of the ensuing Annua General Meeting and the Board recommends their re-appointment till the conclusion of next Annua 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, rura development, communities and all other members of the public domain who may also be considered stakeholders
YourCompany, being covered underthe 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. Apri 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 Annua Report.
The Secretarial Audit Report confirms that the Company has complied with all the applicable provisionsofthe 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.
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 Annua 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 shal 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 genera 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 Annua General Meeting, which forms part of this Annua 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.
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
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
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
Place : Ahmedabad Chairman and
Date : August 20, 2014 Managing Director
Jun 30, 2013
To The Members of Symphony Limited
The behalf of the Board of Directors, I have great pleasure in presenting to you, the 26th Annual Report and Audited Accounts on standalone as well as consolidated basis for financial year ended on June 30, 2013.
1] A) Financial Results
(Rs.in Lacs) Standalone Consolidated Particulars 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 its global operations, we present hereunder the consolidated results of Symphony and its global subsidiaries in addition to the company''s financial performance from Indian operations on standalone basis. The company scaled new heights and benchmarks in terms of sales and profits for financial year ended on June 30, 2013. The company''s consolidated total revenue increased to Rs.39,473 Lacs from Rs.31,974 Lacs in the previous year, recording a robust growth of 23%. The consolidated profits after tax for the financial year under review increased to Rs.6,011 Lacs as against Rs.5,310 Lacs in the previous year registering a growth of 13%. During the year under review, the company recorded a robust growth of 17% in its consolidated net worth.
Management and Discussion Analysis forming part of this Annual Report provide detailed information and analysis of financial results for the year under review.
Your directors have pleasure to recommend a dividend of Rs.6.50 (325%) per Equity Share having 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/- per Equity 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 with shareholders'' 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 the company 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 and disturbances in many parts of the world. Despite such constraints and challenging environment, your company in the year 2012-13, recorded an encouraging performance regardless of the inflationary environment, increasingly competition and the challenging market environment. During the year under review notwithstanding the above your company outshined its past track record and achieved a robust performance both in terms of volume and sales revenue. There was stock out position for personal coolers in peak season. Your company has made it possible by effective initiatives which focused on consumers and development of market network with emphasis on innovation, greater efficacy and environment friendly products, while strengthening organisational leadership. Your company''s business continues to grow strongly in double digits. Your company continues its focus on cost control, inventory management and productivity enhancement to improve margins. Your company also endures to lay emphasis on cash generation driven by strong performance, focus on efficiencies, cost management and continued efficient collection system.
Your company along with its subsidiaries has been able to expand more capacities, register encouraging performance, expand into new geographies, strengthen its market network. Further, over the years, your company has consciously developed its intellectual property rights in form of trademarks, copy rights and designs etc. for different models of air coolers as well as of logo and corporate brand "Symphony". Today, your company enjoys large number of registrations in India as well as in several countries world over. Your company firmly believes that its trademarks and designs have considerable value and significance which greatly help in marketing its products. Brand "Symphony" today is the most trusted brand in air cooler industry in the country as well as in many parts of the world.
Your company sustained its focus to magnify its nationwide market network and at present it has 766 distributors and 16,400 dealers representing about 4,500 towns with adequate warehousing facilities in all strategic locations to cater to every nook and corner of the country. Your company strengthened its operating structure of marketing function to capture the vast dormant markets of the nation. On ÂAfter Sales Service'' front, your company has also enlarged its network of service franchisees with ÂNation Wide Customer Care Number'' to cover important towns all over the country for timely and resourceful after sales service. Your company managed investments prudently by deploying surplus funds after ensuring that such investments 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 extensive market network as well as enlargement of dealer network. During the financial year, your company strengthened its leadership position in air cooler industry by consistent growth in terms of sales volume. Your company achieved its goals by focusing on strategic initiatives which inter-alia comprise of engaging to promote own brand, innovation for growth, being effective and efficient and leading to win.
Well planned and successful marketing strategies have made Symphony coolers a much preferred choice in competitive environment. Customer focus, quality and power saving have been core strengths of the company.
To keep pace with growing demand for our products, the company is constantly exploring options for augmenting capacity at the existing locations and also by tying up with new original equipment manufacturers in strategic locations.
Year 2012-13 was marked by significant advance in our R & D initiatives in the products of the company, which added momentum to its growth journey. It has been constant endeavour of your company to instigate innovations so as to offer an extensive selection for different customers of air coolers in terms of different models and features to suit their individual requirement.
Your company during the year under review, introduced 6 new models of Âi'' series air coolers (intelligent coolers with features such as empty tank alarm, full remote function, memory restore function etc.). It also launched air coolers with Âdura pump technology'' having pump with long life to grab potentiality of the unexplored market. Your company together with its subsidiaries offers 87 models of air coolers 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 areas consumption has been phenomenal, with increasing demand for quality products. The very charm of the Indian consumer market is leading to steep competition among the key players which has been encountered by your company through strategic advertising and promotional drive to prevail upon the consumers by offering superior value for every rupee spent. Your company penetrated into new markets with firm focus on emerging markets which are currently outpacing growth in developed market reiterating our emphasis in these geographies. The organisation offer value added air cooler models to complement the evolving needs of global markets.
To meet need for expanding business, your company has strengthened its marketing team by employing competent team of marketing
professionals in India as well as in several countries of its operations.
With a view to fully leverage all these improvements and strategies, the advertising campaign in 2013 season was far more aggressive compared to the previous year. The aggressive advertisement campaign was formulated only after in-depth workshop to evaluate communication strategy to cultivate the air cooler market. Your company communicated India''s cooling needs are diverse and how Symphony air cooler meets all the needs. "Symphony cooler" is positioned as "India ka cooler, India ko rakhe cooler."
Symphony continued to become stronger in modern trade with remarkable growth over the previous year and also proved to be a leading air cooler brand in retail. The company became more aggressive in e-commerce resulting into growth through leading e-commerce sites.
The modern trade channel continued to be a growth engine to the company''s business as it drives growth by better shopping experience. Your company continued to broaden its market network to penetrate with greater space. Your company now enjoys significant portion of the organised retail chain in the country. Your company believes that the Modern 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 to strengthen the business. The company has developed in-house air cooling project design facilities with a dedicated resource. Another important step undertaken by your company is to create a productive base of dealer network across the country.
The overall business has shown remarkable growth during the year under review to the tune of 107% over business of industrial cooler of previous year. Also the company has strengthened its manpower across the country to capture the untapped market of Industrial Cooler business.
Your company has made some major breakthroughs in terms of entry into new customer segments like paint industry, logistics, moulding industry, auto Industry, carpet industry, religious sector, bakery, FMCG companies, food industry, educational institutes, auditorium, bottling plant, etc. Your company has also received repeat orders from some customers to whom industrial coolers were supplied earlier which establishes their trust in the company and its products.
Your company has also started a novel concept of air cooling the railway running rooms and waiting halls etc. Also, the company has made inroads with approvals from some key opinion makers like HVAC consultants and big HVAC Contractors.
The year under review also witnessed many business developmental activities like participation in many exhibitions, CII expos, Ishrae and Ashrae meets and advertisement in many HVAC journals and newspapers with overwhelming response. An innovative digital campaign was also initiated which was successful.
Air coolers - Overseas Operations The company continued its focus on exports in 2012-13. Presently, your company exports to 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 made to Impco from international sales, then there is robust increase of about 40% in sales value to rest of the world and price realization has gone up in excess of 6%. During the year, Symphony added some new countries like Ecuador, Bolivia, Armenia, Kazakhstan and Mauritius; recently Symphony has finalised a large distributor in Pakistan.
In export market, as a revised strategy the focus is on large markets. The strategy is to 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. It is also in process of establishing a branch in UAE. This will help substantially to increase sales in Middle East and North African countries. Your company also continues its focus on exports primarily to MENA, Latin America etc.
Symphony continues to have various international quality certifications like CE, SASO, ETL, NOM, KUCAS, GS certificate from Germany 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 as per the plan. This is mainly on account of delayed season, which affected entire air cooling industry including air conditioners, air coolers and fans. As a result of that even service centre sales got affected to some extent. Consequently, though overall overheads were almost the same as per the last year margins were under pressure and hence the performance. Impco has already identified the necessary strategy and steps to be taken to improve the performance, just to narrate some of them, lean manufacturing project has been under discussion and will be implemented during the next year. The project is being implemented 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 the year under review was quite encouraging. The SEZ unit entails various benefits, including 100% 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 consecutive second year, have been adjudged as the winner of an award under the category VII-Manufacturing Sector (Turnover less than Rs.500 Crores) of the "ICAI Awards for Excellence in Financial Reporting".
5] Corporate Governance
Your company strives to maintain high standards of Corporate Governance in all its interactions with stakeholders. The company continues its endeavour to be a sustainable and trusted organisation as sustained governance is the corner stone in building and maintaining relationships with all its stakeholders. The company''s relationship with its stakeholders is an important component of Corporate Governance. An ongoing interaction with investors and communicating information about the company in an unswerving and credible manner helps to establish a transparent relationship. It rigorously follows a policy of 100% compliance with all statutory requirements and has a healthy system to review them.
The CMD, Executive Director and Chief Financial Officer (CFO) 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 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 employees 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. Report on Corporate Governance forms an integral part of this Annual Report.
6] Trade Relations
Your directors wish to record appreciation of the continued unstinted support and co-operation from its retailers, stockists, suppliers of goods / services, clearing and forwarding agents and all others associated with the company. Your company will continue to 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 under clause 49 of the Listing Agreement with Stock Exchanges in India, is presented in separate section forming part of this Annual Report.
8] Human Resources:
The employee relations in the company continued to be cordial. Over the years, your company''s focus has increased towards human capital. Your company believes that the support of human capital is of utmost importance to sustain the market leadership in all products segments and also to capture markets. The company firmly believes that employees are the most vital assets and key differentiators of business success.
In order to enhance the efficiency and effectiveness, the company instituted several employees friendly policies and employees development programmes, across all levels, to enthuse a vibrant work culture and ensure that the workforce remains invigorated and motivated. Your company has also successfully migrated to an improved Performance Management System to identify the high performers and reward appropriately which has helped to achieve better employee engagement score. We are striving to build a performance driven culture and create an environment conducive for employee growth.
Pursuant to the provisions of the Companies Act, 1956 and Articles of Association of the company, Mr. Himanshu Shah, Director of the company retires by rotation at the ensuing Annual General Meeting, and being eligible, offers himself for re- appointment. Your directors recommend his re- appointment.
10] Fixed Deposit
During the year under review, the company has not accepted any fixed deposit from the public and as on June 30, 2013 the company does not hold any unclaimed deposits or interest thereon.
11] Branch at UAE
Symphony is in process of establishing a branch in U.A.E, which is an important hub for trading activities for MENA region - ÂMiddle East North Africa''. This region includes GCC countries (Gulf Cooperation Council), other Middle-eastern countries and North African countries. The whole of this region has vast and promising markets for air coolers. Your directors believe that on opening of this branch, the company foresees to expand its presence in this area.
The company during the year under review, has fully subscribed 37,00,000 equity shares each 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 out by the subsidiaries of the company, it has been decided to close down Symphony Air Coolers Inc., USA. The business of Symphony Air Coolers Inc. will be taken care by the Symphony USA Inc., subsidiary of the Impco S.DE. R.L.DE. C.V., Mexico, which is also a step down subsidiary of the company. Consolidation exercise and consequent reduction in the number of subsidiaries will help in enhancing operational flexibility, efficiencies and greater and optimal utilisation of resources and also lead to significant reduction in the multiplicity of legal and regulatory compliances.
Your company has two subsidiary companies (and two step down subsidiary companies) i.e Sylvan Holdings Pte. Ltd., Singapore, (Sylvan) and Symphony Air Coolers Inc. USA. Sylvan has a subsidiary company in Mexico i.e. Impco S.DE. R.L.DE. C.V. (Impco), which manufactures and markets a variety of industrial and small coolers. Impco, in turn, has a subsidiary 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 the subsidiaries.
Pursuant to the provision of Section 212 (8) of the Companies Act, 1956, the 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.
13] Consolidated Financial Statements
In accordance with the Accounting Standard 21 on Consolidated Financial Statements, the audited consolidated financial statements have been prepared and are provided in Annual Report 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 of Directors of the company hereby states and confirms that: i. in preparation of the Annual Accounts, applicable accounting standards have been followed and there has been no material departures; ii. such accounting policies have been selected and applied consistently, and judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at June 30, 2013 and of the profit of the company for that period; iii. proper and sufficient care has been taken 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; i v. the annual accounts have been prepared on a going concern basis.
Insurable interests of the company including
Factory Building, Plant & Machinery, Stocks, and Vehicles etc. are adequately insured.
In line with the requirements of Listing Agreements with Stock Exchanges and the applicable Accounting Standards, your company has made disclosures in Notes on Accounts for the year under review in respect of related party transactions, calculation of EPS and deferred tax liability.
17] Reduction in Contingent Liability
Your Directors are happy to inform that the disputed sales tax demand against the company 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. October 8, 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 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.
19] 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 others entitled thereto. Any member interested in obtaining such particulars may write to the 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 and endeavours to reach out to the underprivileged in and around the areas of its operations.
M/s. Shah & Dalal, Chartered Accountants, Ahmedabad, hold office as Auditor of the company until the conclusion of the ensuing 26 Annual General Meeting and the Board recommends their appointment till the conclusion of next Annual General Meeting.
The company has received a certificate from Auditor to the effect that their appointment, if made, would be within the prescribed limits under Section 224(1B) of the Act.
22] Cost Auditors
Pursuant to Cost Audit Branch Order dated November 6, 2012, issued by Ministry of Corporate Affairs, M/s. Dalwadi & Associates, Cost Accountants, have been appointed as Cost Auditors for the financial year ending June 30, 2014 with approval of Central Government.
The cost compliance report for financial year 2011- 12 was filed by the company on 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 your company appointed Mr. Ashwin Shah, practicing Company Secretary, to conduct Secretarial Audit. The Secretarial Audit Report for the financial year ended June 30, 2013 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, Depositories Act, 1996, Listing Agreements with 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.
Your Directors sincerely appreciate the high degree of professionalism, commitment and dedication displayed by employees at all levels.
Your Directors also gratefully acknowledge the support and co-operation extended to the company by the OEMs, distributors, dealers, service franchisees, suppliers, C&FAs, bankers and all other stakeholders of the company and look forward to their continued patronage. The Directors also wish to place on record their gratitude to the Members for their continued support and confidence.
For and on behalf of the Board
Place : Ahmedabad. Achal Bakeri
Date : October 29, 2013 Chairman & Managing Director
Jun 30, 2010
The Directors have pleasure in presenting herewith their Report together with the Audited Balance Sheet as at June 30, 2010 and Profit & Loss Account for the year ended June 30, 2010.
A) Financial results [Rs in Lacs]
Particulars Current accounting Previous accounting year year ended on June ended on June 30, 2009 30, 2010
Gross revenue 19,359 12,678
Profit before financial charges and depreciation 5,721 4,077
Less: Financial charges 57 16
Less: Depreciation 130 115
Profit before taxation and exceptional income 5,534 3,946
Exceptional income - 1,977
Profit before taxation & after exceptional items 5,534 5,923
Taxation & fringe benefit tax 1,865 1,532
Deferred tax liability (24) 66
Profit after taxation 3,693 4,325
Balance as per last year balance sheet 2,332 (1,411)
Amount available for appropriation 6,025 2,914
Transfer to General Reserve 500 500
Proposed dividend and dividend tax 204 82
Balance carried to balance sheet 5,321 2,332
B) Other key financials as on June 30, 2010
Equity share capital : Rs.700 lacs
Net worth : Rs.8,620 lacs
Book value per equity share : Rs.123
Earning per share (EPS) : Rs.53
Investments : Rs.5,349 lacs
Contribution to exchequer : Rs.4,554 lacs
Your Company is a debt free company with an opportunity to leverage the balance sheet for sustainable growth.
Your Directors are pleased to recommend a dividend of Rs.2.50 (25%) per equity share (last year Rs.1 (10%) per equity share) for the financial year ended June 30, 2010. The dividend payout ratio for the year under review, inclusive of corporate tax on dividend distribution, is at 5.52% compared to 1.89% for the previous year 2008-09.
3. General overview and review of operations
Emerging out of the economic turmoil witnessed in the recent past, the Indian Economy, particularly the industrial sector, reported a sustained resurgence in the year 2009-10, buoyed by enhanced consumer confidence, upturn in investment sentiments, increased exports in later part of the year and enhanced availability of institutional funds. Consumer demand remained buoyant during the year 2009-10, benefiting significantly from the roll out of the pay commission related benefits to central and state employees. The soaring growth of the capital goods sub-sector during the later part of the year under review is a pointer to the beginning of investment-led growth along-with consumption-led growth.
Although, the rising inflation and sharp currency fluctuations had negatively affected certain sectors of the Indian economy, on the whole the year 2009-10 saw the Indian economy emerging as one of the fastest growing economies in the world. The Reserve Bank of India (RBI) faces the challenge of having to balance its monetary policy in a way that inflation is contained without disrupting growth. The Government of India also faces another challenge as it withdraws the monetary stimuli that it had introduced earlier in the wake of economic slowdown in the recent past. Notwithstanding the challenges, Indias position as one of the fastest growing and promising markets is expected to remain in tact with domestic demand being sustained at high levels.
4. Review of operations
In a year which was beset with external challenges such as below average monsoons, drought in some parts of the country, rising inflation and sharp currency fluctuations, your company continued to report strong growth in its sales across geographical boundaries. In spite of sharp fluctuations in input costs and high overall inflation, the Company was able to manage costs well leading to a sizeable increase in operating margins during the year on all fronts, both in the domestic and international markets and improved performance in terms of various indicators such as sales turnover and profitability.
Viewed against the background of rising inflation and sharp currency fluctuation, which has adversely affected some Indian companies also, the performance of the Company represents a truly remarkable achievement. During the year under review, your Company recorded one of its highest revenue growths since its inception, recording robust volume-led growth through the introduction of new and improved models of air coolers and water heaters and also by penetrating into interior markets of the various states apart from major cities and capital towns. In spite of sharp fluctuations in input costs and overall inflationary pressures, the Company was able to manage cost well leading to a sizeable increase in operating margins during the year.
The year of 2009-10 was a landmark year for your company for its operating performance. In the year 2009-10, your Company scaled new heights and set several benchmarks in terms of sales, profits and net worth, among others. Your Company in the year of 2009-10, achieved a sales turnover of Rs.18,977 lacs representing a growth of 53% over the previous years sales of Rs.12,422 lacs. The Company recorded a note-worthy Profit Before Tax (before exceptional item) of Rs.5,534 lacs, an increase of 40%, as compared with previous year of Rs.3,946 lacs. The Company also recorded significant Profit After Tax of Rs.3,693 lacs, as compared with last year Rs.2,857 lacs [excluding exceptional income].
The thrust of your Companys efforts continues to be directed towards achieving better margins. This has been driven by several factors, including various value engineering initiatives, better product design, higher efficiency in supply chain management and higher off season sales during the year. The Company could achieve substantial reduction in operating cost through a number of initiatives such as global sourcing for critical capital items and components, including hard negotiation of prices with the suppliers and approving new supplier lines, thus ensuring cost efficiency and sustainability of the margins. Through all these activities the Company retained its focus on quality, manufacturing excellence, with rigour.
Your Company has been upgrading its existing equipment and infrastructure and employs state-of-the-art technology with the objective of achieving substantial improvements in productivity and efficiency. Your Company has continued to initiate a series of steps to rationalise the marketing network, optimise the product mix, and effect substantial cost reduction with a view to bringing in major increases in domestic and international sales. The Company renewed its thrust on enhanced after sales service by strengthening its network of authorised service providers in all metros and other major towns all over the country.
The international business too continues on its growth trajectory, and forayed into newer markets. The Company has now emerged as a strong multi-location transnational business with a presence across 54 countries and catering to the ever-changing needs and aspirations of the local populations in these markets.
In addition to steady growth in its existing business, Symphony is also focusing on synergistic growth and opening up of new vistas of opportunity for the Company. With the positive outlook for the economy, it is quite reasonable to set ambitious targets for the Company and your Directors are confident of achieving them.
Your Company is a pioneer in manufacturing of air coolers with plastic body and is now one of the largest suppliers of the air coolers in the domestic market with a wide range of products offering a variety of attractive features. Innovative models of air coolers with superior performance, design and features, designed to work under demanding operating conditions, have been launched in the market. Presently, the Company has 13 models of air coolers in various sizes tailored to the needs of a wide range of customers. A focal point for the Companys business is tapping the vast potential of the Indian rural markets. To implement this, changes have been made in the sales operating structure by penetrating into the rural areas of the Indian market.
Unlike the dry artificial air of an air conditioner, Symphony evaporative air coolers deliver cool and moist air. This technology being completely natural, there are no emissions of harmful CFCs. Symphony evaporative air coolers are packed with exclusive features and state- of-the-art design, coupled with dependability and consistent efficiency. Symphony air coolers are ideal for residences, shops, show rooms, offices and outdoor applications as well.
Symphony air coolers come with a distinctive power saver technology. This technology is the outcome of sophisticated R&D efforts using the latest engineering and computing techniques. This helps to make Symphony evaporative air coolers energy-efficient and economical.
Types of air coolers manufactured by Symphony are:
- Personal coolers
- Room coolers
- Desert coolers
- Tower coolers.
The Company meets the highest standards of excellence for air coolers. The Companys air coolers have been awarded the CE mark, which is European standard for safety. This helped the Company in introducing its air coolers in European countries like UK, Spain, among others. Most of the models of air coolers were also awarded the Saudi Arabian Standard Organisation (SASO) mark, which is required for selling our products in Saudi Arabia. Most of our models, including the Sumo, Jumbo, and Hi-cool also succeeded in getting the ETL mark, which is the highest standard of quality in the United States of America.
In view of overall growth of the Indian economy, and the prevalence of extended summers with higher temperatures, the demand for air coolers in the domestic market has been increasing year by year. The growth rate of coolers in the domestic market is impressive and is a pointer to the changing mindset of the domestic consumers to move towards the reliability and elegance of a branded cooler.
During the year under review, strategic initiatives have been taken to increase the number of our trade partners by appointing a new set of dealers. The Company has also strengthened its service infrastructure by appointing more franchisees. With these measures, the Company is confident of being able to meet a variety of customer needs under different geographical conditions.
The Company is operating with over 450 distributors and 6,500 dealers together with adequate service franchises through the country- wide network. With a promising market for its innovative products, your Company is confident of achieving a sizable growth in its operations.
The Company is also manufacturing instant and storage water heaters in various sizes. Symphony water heaters are available in different capacities under Sauna brand name. These are technically, feature- wise and aesthetically far superior water heaters and are well accepted in the market.
Sauna water heaters with double insulation technology have yielded good response and wide acceptance. Sauna water heaters have the distinction of being the first water heaters to get a 5 star rating from the Bureau of Energy Efficiency, Govt, of India. The sauna geysers are built with hi-density polyurethane foam with a second layer of special glass wool insulation that minimises heat loss and maximises energy saving.
The Company expects brighter scope for overseas market for these models of water heaters in the years to come, considering the potential features of the models.
Focus on exports
During the year under review, the exports revenues of the Company grew by 20% from Rs.2,589 lacs in 2009 to Rs.3,102 lacs in 2010. The Company foresees a promising future for the export sector in the years to come. It is noteworthy that the export performance of the Company has been achieved in the face of sluggish demand in overseas markets, and under conditions in which most Indian companies have remained stagnant or registered negative growth in exports.
Your Company has adequately strengthened its export team with a region-wise focus to capitalise on potential overseas opportunities. This will allow the Company to foray into new countries and to obviate the seasonality factor of the business. Your Company has exported to 54 countries. There are many more countries in which there is an excellent scope for promoting the sale of coolers, and efforts are being made to tap these new markets.
In addition, your Company is also persistently on the lookout for growth opportunities in various overseas markets through joint ventures and acquisitions. With these initiatives, the Company is certain of being able to leverage the growing overseas market as a commanding growth engine.
5. Change in the name of the Company "Symphony Limited"
In terms of the resolution approved at the last Annual General Meeting of the Company, your Company received the approval of the Central Government for the change in its name to "Symphony Limited" from its former name "Symphony Comfort Systems Limited". There is no change in the nature of the business of the company during the year.
6. Corporate Governance
Symphony is committed to good Corporate Governance and understands and respects its fiduciary role in the corporate world. The Board and its Committees have always endeavoured to pursue growth by adhering to highest standard of corporate governance. It has taken steps to strengthen the framework of Corporate Governance and Internal Audit system of the Company during the year. The Board and Audit Committee have been actively engaged in discussing reports of Internal Auditors and advising on monitoring the implementation of their recommendations.
The Board has implemented a Code of Business Conduct and an "Ethics Code" for its members and for members of Senior Management to inculcate business ethics in the Company in their dealings with employees and business associates,
A report on Corporate Governance and Management Discussion and Analysis, as required under clause 49 of the Listing Agreement is annexed.
The CEO and Chief Financial Officer (CFO) 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 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.
Pursuant to the provisions of the Companies Act, 1956 and Articles of Association of the Company, Dipak Palkar, Director of the Company retires by rotation at the ensuing Annual General Meeting, and being eligible, offers himself for re-appointment. Your Directors recommend their re-appointment.
8. Fixed Deposit
During the year under review, the Company did not accept any fixed deposit from the public and on June 30, 2010 the Company had no unclaimed deposit or interest thereon due to any depositor and out standing deposit is Nil.
9. information systems
In order to strengthen the internal control systems and improve the management information systems, in the year 2008-09, the Company installed SQL server based ERP which went live. The Board is pleased to state that now the application has been successfully implemented and the system has stabilised well. The Board places on record its deep sense of appreciation for the contribution made by the employees of the Company in rolling out the SQL server based ERP.
10. Segment-wise performance
The Company is engaged in the business of air coolers and water heaters, both of which are governed by the same set of risks and returns. In view of this, the entire business of the Company comes under one primary segment, namely that of "Appliances".
However, domestic sales and exports sales are two secondary geographical segments, and appropriate disclosures have been made in the Notes to the Accounts.
11. Consolidated financial statements
In compliance with the Accounting Standard 21 on Consolidated Financial Statements issued by the Institute of Chartered Accountants of India and Clause 32 of the Listing Agreement with the Stock Exchange, this Annual Report also includes Consolidated Financial Statements for the financial year 2009-10 for its subsidiary company i.e Symphony Air Coolers Inc.
During the year under review, Sylvan Holdings Pte. Ltd., Singapore ceased to be a subsidiary of the Company on account of equity holding of the Company being less than the statutory limit prescribed under the Companies Act, 1956.
12. Compliances of accounting stHcaa^cis
The Institute of Chartered Accountants of India (ICAI) has from time to time introduced many accounting standards for consistent application of accounting principles and transparent disclosures by corporate entities. Your Company opted for substantial compliance of all mandatory accounting standards, wherever applicable, except as stated by Auditors in their report, if any.
13. Directors Responsibility Statement
Pursuant to sub-section (2AA) of Section 217 of the Companies Act, 1956, the Board of Directors of the Company hereby state and confirm that:
(i) In the preparation of the Annual Accounts, the applicable accounting standards issued by The Institute of Chartered Accountants of India and requirements of the Companies Act,1956, were followed;
(ii) Such accounting policies were selected and applied consistently, and such judgments and estimates were made as were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company for the period ending on 30th June 2010 and of the profit of the Company for that period;
(iii) Proper and sufficient care was taken to maintain 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) The annual accounts were prepared on a going concern basis.
The insurable interests of the Company including factory building, plant & machinery, stocks, vehicles, and other insurable interests are adequately insured.
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 made additional disclosures in the Notes on Accounts for the year under review in respect of related party transaction, calculation of EPS and deferred tax liability.
16. Conservation of energy technology absorption and foreign exchange earnings and outgo
As required under Section 217(l)(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 the Annexure "A" attached hereto and forming part of the Directors Report.
17. Particulars of Employees
Pursuant to section 217(2A) of the Companies Act, 1956 and Rules made thereunder, a statement containing particulars of the Companys employees who were in receipt of the remuneration of not less than Rs.24,00,000 during the year ended June 30, 2010 or not less than Rs.2,00,000 per month during any part of the said year is given in the Annexure II to this Report.
M/s. Shah & Dalai, Chartered Accountants, Ahmedabad, hold office as Auditors of the Company until the conclusion of the ensuing 23rd Annual General Meeting and the Board recommends their re- appointment till the conclusion of the next Annual General Meeting.
The Company received a certificate from Auditors under Section 224(1) of the Companies Act, 1956 to the effect that their re- appointment, if made, would be within the prescribed limits under Section 224(lB)oftheAct.
Members are requested to consider their re-appointment as Auditors of the Company for the current year at a remuneration to be decided by the Board of Directors.
Your Directors gratefully acknowledge the contributions made by the employees towards the success of the company. Your Directors are also thankful to the distributors, dealers, suppliers, C&FAs, vendors, and other parties dealing with the company for their valued support and co-operation and look forward to their continued association with the Company.
The Company will make every effort to meet the aspirations of its shareholders and wish to thank them sincerely for their whole hearted co-operation and support at all times.
For and on behalf of the Board
Place: Ahmedabad Achal Bakeri
Date : October 29, 2010 Chairman and Managing Director