You are here » Home » Companies » Company Overview » Symphony Ltd

Symphony Ltd.

BSE: 517385 Sector: Consumer
NSE: SYMPHONY ISIN Code: INE225D01027
BSE LIVE 15:40 | 18 Aug 1213.10 -30.05
(-2.42%)
OPEN

1240.00

HIGH

1241.55

LOW

1210.00

NSE 15:45 | 18 Aug 1218.25 -24.10
(-1.94%)
OPEN

1235.70

HIGH

1240.05

LOW

1215.00

OPEN 1240.00
PREVIOUS CLOSE 1243.15
VOLUME 2046
52-Week high 1571.45
52-Week low 1075.00
P/E 51.10
Mkt Cap.(Rs cr) 8,486
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1240.00
CLOSE 1243.15
VOLUME 2046
52-Week high 1571.45
52-Week low 1075.00
P/E 51.10
Mkt Cap.(Rs cr) 8,486
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Symphony Ltd. (SYMPHONY) - Director Report

Company director report

Your Directors are pleased to present the 29th Annual Report of the Companyfor the financial year ended on March 31 2016. Consequent to the change of financial yearfrom July-June to April-March the current financial year consists of 9 (Nine) months fromJuly 1 2015 to March 31 2016 and accordingly the current financial year figures are notcomparable with figures of corresponding previous financial year ended on June 30 2015.

1] a) Highlights of Results and state of company’s affairs

Particulars Standalone Consolidated
2015-16 2014-15 2015-16 2014-15
(9 Months) (9 Months)
Revenue from Operations & Other Income 43434 49264 46643 55957
Profit before Financial Charges Depreciation & Taxation Exceptional Items 17176 16444 15688 16595
Less: Financial Charges 8 57 20 58
Less: Depreciation & Amortisation Expenses 219 213 430 410
Profit before Tax & Exceptional Items 16949 16174 15238 16127
Add: Exceptional Items - - 1247 -
Profit Before Tax 16949 16174 16485 16127
Less: Current Tax 4589 4438 4589 4442
Less: Deferred Tax 64 133 63 133
Less: Provision of earlier years (4) (39) (4) (39)
Profit after Tax 12300 11642 11837 11591
Add: Balance as per last year Balance Sheet 23221 17475 24520 18825
Amount available for Appropriation 35521 29117 36357 30416
Adjustment relating to Fixed Assets - 7 - 7
Dividend and Dividend Tax (interim and proposed) 10525 5889 10525 5889
Balance carried to Balance Sheet 24996 23221 25832 24520

B) Key Financials as on March 31 2016

Consolidated Financial Statement

Your Company along with its subsidiaries has a global presence. In order to providean overall view of the comprehensive performance of the group the Company has preparedconsolidated accounts of the holding company and all its subsidiaries in accordance withthe accounting standards that are applicable. The consolidated revenue from operationsalong with other income stood at Rs 46643 lacs. The profit after tax was H11837 lacs.

The highlights of the key financials are as under: ( Rs in lacs except share data)
Particulars Standalone Consolidated
Equity Share Capital 700 700
Net worth 30795 31862
Book Value Per Equity Share 88 91
Earning Per Share (EPS) 35.17 33.84
Investments 18634 16229
Contribution to Exchequer 14013 14693

2] Dividend

During the period under review the Board of Directors has declared interim dividendtwice aggregating to H25/- (1250%) per share and bifurcation of the same is as under:

Date of Declaration Interim Dividend Amount per share (in Rs) % of Dividend
January 28 2016 5/- 250
March 10 2016 (including one-time special dividend of Rs 10/- per share) 20/- 1000

The total payout towards interim dividends for the financial year 2015-16 (includingdividend distribution tax) was H10525 lacs (previous year H5889 lacs) translating into adividend payout of 89% (previous year 51%) on consolidated net profit which was much morethan minimum dividend payout as mentioned in Dividend Policy of the Company.

Shareholders’ Reward Policy

Symphony believes in maintaining a fair balance over a long term period betweenpayout/reward to the shareholders and cash retention. The Company has been conscious ofthe need to maintain consistency in payout/ reward to the shareholders. The quantum andmanner of payout/reward to shareholders of the Company shall be recommended by the Boardof Directors of the Company.

Method of Payout/Rewards to the Shareholders 1.1 Dividend Distribution Policy

This policy is framed pursuant to Regulation

43A of the Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulation 2015. a) The Company will generally endeavour to distribute tothe shareholders up to 50% of its profit after tax (including dividend distribution taxand other taxes as applicable). b) In rare circumstance of any contingency acquisitionopportunities or other business opportunities or unforeseen circumstances payout toshareholders may be precluded at the discretion of the Board of Directors. c)Recommendation with regard to payout to shareholders shall be influenced by variousfactors including without limitation internal factors such as profits earned during thefiscal year liquidity position fund requirement for acquisitions reward to shareholdersby corporate actions (like buy back of shares) and external factors such as general marketconditions cost of raising funds from alternate sources applicable taxes including taxon dividend exemptions under tax laws available to various categories of investors andfuture expansion opportunities etc. d) The retained earnings of the Company shall beutilized for future growth and expansion of business probable acquisitions workingcapital and for meeting unforeseen contingencies. e) The Company has only one class ofshares viz. equity shares.

1.2 Interim Dividend

The Board of Directors may as and when consider it fit on the basis of performanceprofitability liquidity and on review of quarterly / half yearly / periodical financialstatements declare interim dividend to reward the shareholders.

1.3 Special Dividend

The Company may consider special dividend in exceptional circumstances in such eventthe limit as stated in clause 1(a) above may exceed.

2. Bonus Issue

As and when the company has large accumulated reserves represented by free reservessecurities premium surplus etc. which are felt more than the requirements of the Companythe Board may consider to utilise such balances towards issuance of bonus equity shares orany other security (ies) as may be permissible under the applicable provisions of theCompanies Act 2013 SEBI Act alongwith applicable regulations thereunder and any otherAct as may be applicable.

3. Buy Back

As and when the Company has large accumulate reserves represented by free reservessecurity premium surplus etc. which is also supported by sufficient liquidity in thecompany the Board of Directors may consider to carry out Buy Back of its equity shares inaccordance with the relevant applicable provisions of the Companies Act 2013 SEBI Actalongwith applicable regulations thereunder and any other Act as may be applicable.

4. Sub Division / Splitting of Shares

The Board of Directors may also consider to sub divide the equity shares in order toimprove the liquidity in the market and to make it more affordable to retail shareholdersthereby attracting better participation of retail shareholders in the equity shares of theCompany.

3] Material changes and commitment

a. Interim Dividend

The Board of Directors at its meeting held on July 26 2016 has declared a 1st interimdividend of H1.50 (75%) per equity share having face value of H2/- (Rupees Two) each forthe year 2016-17. The dividend payout to the shareholders will be H631.49 lacs includingdividend distribution tax. b. Issue of Bonus Shares

The Board of Directors at its meeting held on July 26 2016 has recommended a bonusissue of shares in the proportion of one fully paid up bonus equity share of H2/- each forevery one fully paid up equity share of H2/- each held as on record date to be determined.The said bonus shares shall be subject to approval of members at ensuing Annual GeneralMeeting.

Except the aforesaid there was no material change and commitment affecting thefinancial position which occurred between the financial year and to the date of thisreport.

4] Operations Review

During the period under review revenue from operations along with other income onstandalone basis stood at H43434 lacs. During the period 2015-16 your Company continuedto expand its domestic presence by widening its marketing network of distributors dealersand retail chain stores throughout the country with adequate warehousing infrastructure inall strategic locations in various parts of the country. Your Company has taken steps torevitalise the organisational structure of the marketing function to enable betterpenetration into the local market. Your Company has also initiated steps to strengthen itsafter sales service and increase its market penetration by appointing service franchiseesin new locations and introducing a single nationwide customer care number. This willenable prompt and efficient provision of after sales service particularly to strategiclocations in the country.

Your Company strengthened its leadership position in the air cooler industry through aconsistent focus on new product development and innovation making it possible to offer awide range of air coolers with a variety of new features. Ten new models of air coolerswith a host of innovative features were introduced during the period. The existing modelswere also given a complete facelift with regard to the looks features and packaging tomake them more contemporary and appealing to the consumer. As a result of these measuresyour Company now offers 44 models of air coolers to meet the requirements of a variety ofcustomers.

To stimulate demand your Company continues doing aggressive advertisement andpromotional campaigns over print electronic and digital media. Your Company’sR&D Department has come out with innovative products and technologies enabling it tooffer a complete range of air cooling solutions for all segments of customers.

During the period under review the Company launched the world’s first wallmounted air cooler named "CLOUD". The Company has also filed an application fora global patent for this unique product which comes with many new features such asmultistage air purification magic fill for automatic water refill intelligent fullremote control fully closable automatic louvers and empty water tank alarm. Your Companyhas also introduced i-PURE technology which incorporates a multi-stage air purificationsystem that comes with a set of filters that work together to keep air and waterpollutants away and deliver pure and cool air. i-PURE technology coolers are equipped withadvanced features high quality PM2.5 wash filter pads and other filters which removesmell dust and allergy particles.

Your Company is keenly aware of the important role played by its trade partners in theselling process and their contribution to its success. Accordingly the Company has takenseveral steps to expand the retail network with a view to penetrate the domestic marketfurther and to ensure easy availability of goods in the remotest corners of the country.During the period your Company has taken several measures to increase trade loyalty andstrengthen the relationships with distributors and retailers which have helped it inmaintaining and further strengthening the market share.

Modern Trade

During the period under review your Company continued to be aggressive in top lineproducts sales through large format stores retail chains e-commerce portals and TVshopping channels. Your Company could maintain its number one position in modern traderegistering a healthy growth. Your Company offered a distinct range of models for salethrough e-commerce in order to have a greater focus on this emerging sales channel andalso to avoid any kind of model conflict between traditional trade and e-commerce. YourCompany continued to widen its modern trade market network and ensured better shelf spacein the existing outlets. This has resulted in structured retail chains accounting for asignificant portion of the Company’s total sales. Your Company believes that theModern trade is increasing at a faster pace than ever before and is eager to exploit itspotential.

Central Air Cooling Solutions

The Central Air Cooling Solutions business has been further strengthened throughfocussed efforts increased manpower and improved nation-wide dealer network.

During the period your Company focussed on laying down detailed technical andoperating guidelines followed by a series of training programs. Your Company successfullytrained its dealer network on a pan India basis. The Company also bagged and executednumerous prestigious orders including those from Sanden ABB Havmor Honda Two WheelersVardhman Textiles Hero Cycles BHU and continued to develop its prominent clientelecovering different customer segments like banks auto industry packaging place ofworship FMCG warehouses hospitals distilleries and railways. Your Company continues tomake inroads into various segments with approvals from some key opinion makers like HVACconsultants and large MEP contractors. During the period under review your Companycontinued with many business development activities through advertisements in newspapersjournals TV channels and participation in exhibitions.

Your Company’s Packaged Air Coolers are compact easy-to-install and are meant formid-size spaces such as commercial industrial and residential areas. They have gainedmomentum and have been received very well in the market. The campaign has resulted inincreased awareness about Central Air Cooling Solutions. Your Company hopes to encash thebenefits of these steps in the years to come.

Air Coolers - Overseas Business

Revenues from overseas business during the year under review remained at Rs 46 crore.The economic crisis and currency devaluation in CIS countries had adversely affected theoverseas business during the period. During the period under review the Companysuccessfully penetrated into newer markets like Slovenia Cambodia Thailand Indonesiaand Kenya. Your Company registered good growth in its business in the markets of U.K.Mauritania Vietnam Spain and Sri Lanka and envisages more openings and opportunitiesthat are waiting to be tapped. Your Company continued its focus on strategic and selectmarkets including its focus on exports largely to the MENA region. Your Company continuesto have several international quality certifications like CE SASO NOM etc. which provideaccess to other countries as well.

SEZ Units

During the period under review the Company had operations in two Special Economic Zone(i) Kandla SEZ at Gandhidham Kutch Gujarat and (ii) Surat SEZ at Sachin Surat Gujarat.The operations at both SEZ units remain satisfactory. It may be noted that the SEZ unitsenjoy a number of direct and indirect tax benefits including benefits under new foreigntrade policy.

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

Impco S. de R. L. de C. V. Mexico (Subsidiary Company) manufactures and markets avariety of coolers. Since the period under review which ended on March 31 2016 is of 9months as against the previous year of 12 months which ended on June 30 2015 the figuresare not comparable. Since the main season in Mexico is April to July which is not part ofthe period under review the peak season performance of the subsidiary is not reflected inthe period under review and only lean season performance is reflected. As part of itsstrategy of introducing lean manufacturing operations IMPCO has sold a part of its Land& Building located on Carr. Miguel Aleman 6061 Col. America Guadalupe Nuevo Leonfor a consideration of Mexican Pesos 34 million (Equivalent to INR 13 crore. approx.) plusVAT. In the future other surplus real estate will also be monetized. This initiative willhelp IMPCO in following manner:

1. To retire its internal debt to parent company.

2. To improve its profitability by reduction in interest depreciation overhead andexposure to foreign exchange fluctuations.

5] Overseas acquisition in china

During the period under review your Company has successfully acquired 100% equityshare capital of Munters Keruilai Air Treatment Equipment (Guangdong) Co. Ltd. Chinafrom Munters AB according to Equity Transfer Agreement. This company has become a whollyowned subsidiary of your Company with effect from January 1 2016. Consequently theaccounts of the acquired company for the period of 3 months ended on March 31 2016 areincluded in the consolidated financial statement. The Company has already received thecertificate of approval for establishment of enterprises with foreign investment in thePeople’s Republic of China endorsing name of the Company as Investors from theconcern Chinese Authority. The name of said company was changed to Guangdong SymphonyKeruilai Air Coolers Co. Ltd. Your Company is in the process of reviewing and improvingthe performance of this company.

6] Awards

During the period under review your Company was bestowed with "BestSME-Overall" and "Best SME-Manufacturing" in 2015 edition of BusinessToday’s Best SME Awards in the Rs 250 crore and above turnover category. The Companywon the awards for its consistent outperformance and staying ahead of its competitors withits focused approach innovative products and dynamic business strategies.

7] Management discussion and analysis Report

Pursuant to Regulation 34 of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 (hereinafter referred as"Listing Regulations") Management Discussion and Analysis Report for thefinancial year ended on March 31 2016 is annexed to this annual report.

8] Corporate governance

Your Company has instilled a strong culture of values morals and integrity and hascontinuously sustained a cohesive way of thinking and commitment to action. The Companyendeavours to be a sustainable and reliable organisation as it trusts that unrelentinggovernance is the cornerstone in building and upholding relations with all itsstakeholders. The Company’s association with its investors is a key factor ofCorporate Governance. An enduring communication with investors and shared informationabout the Company in a regular and trustworthy manner supports the formation of atransparent relationship. It persues a policy of 100% compliance with all statutoryrequirements and has a strong system to evaluate them. Your Directors are committed toupholding the highest standards of answerability and intensely participate in overseeingrisk and strategic management. The Board completely supports and endorses CorporateGovernance practices in accordance with the provisions of clause 49 of the ListingAgreement and the Listing Regulations. The report on Corporate Governance is annexedherewith.

9] Subsidiaries

Your Company has four subsidiary companies (i) Sylvan Holdings Pte. Ltd. Singapore(ii) Guangdong Symphony Keruilai Air Coolers Co. Ltd. China (iii) Impco S. de R. L. deC.V Mexico. (iv) Symphony USA Inc. USA. There is no material change in the nature ofbusiness of subsidiaries.

In accordance with Section 129(3) of the Companies Act 2013 the Company has prepareda consolidated financial statement of the Company and its subsidiary companies whichforms part of the Annual Report. Pursuant to provisions of Section 129(3) of the CompaniesAct 2013 a statement containing salient features of the financial statement of theCompany’s subsidiaries in Form AOC-1 is annexed to the financial statement of theCompany. The statement also provides the details of performance and financial position ofthe subsidiaries of the Company.

The financial statement of the subsidiary companies and related information areavailable for inspection by the members at the Registered Office of the Company duringbusiness hours on all days except Sundays and public holidays upto the date of the AnnualGeneral Meeting as required under Section 136 of the Companies Act 2013. Any memberdesirous of obtaining a copy of the said financial statement may write to the CompanySecretary at the Registered Office of the Company. The financial statements including theconsolidated financial statement financial statement of subsidiaries and all otherdocuments required to be attached to this report have been uploaded on the website of theCompany (www.symphonylimited.com).

10] Auditors

Members of the Company at its 28th Annual General Meeting held on October 27 2015has approved appointment of M/s. Deloitte Haskins & Sells Chartered Accountants asan Auditor of the Company from the conclusion of the then ensuing annual general meetinguntil the conclusion of the thirty third annual general meeting of the Company subject toratification by the Members at every Annual General Meeting.

Pursuant to provisions of Section 139 of the Companies Act 2013 read with theCompanies (Audit and Auditors) Rules 2014 the Company shall ratify their appointmentevery year.

The Company has received a consent letter along with certificate from the Auditor underthe provisions of the Companies Act 2013 to the effect that their appointment if madewould be within the prescribed limits and are not disqualified for appointment and furtherthey are independent of management.

The Auditors’ report does not contain any qualification reservation or adverseremark and is self-explanatory and thus does not require any furtherclarifications/comments.

The Company takes on record the valuable services of M/s Shah and Dalal CharteredAccountants who were the statutory auditors of the Company since inception prior toappointment of M/s Deloitte Haskins & Sells as an auditor.

11] Cost auditors

During the period under review the Company was not required to appoint a cost auditor.

12] Corporate socialResponsibility

The annual report on Corporate Social Responsibility is enclosed as Annexure 1 pursuantto the Companies (Corporate Social Responsibility Policy) Rules 2014. The Policy isdisplayed on website of the Company.

13] Secretarial audit Report

As required under Section 204 of the Companies Act 2013 the Board of Directors ofyour Company had appointed Mr. Ashwin Shah Practicing Company Secretary to conductSecretarial Audit. The Secretarial Audit Report for the financial year ended on March 312016 is annexed to Board’s Report as Annexure 2. The Secretarial Auditors’report does not contain any qualification reservation or adverse remark and isself-explanatory and thus does not require any further clarifications/comments.

14] Directors and Key Managerial personnel

Mr. Nrupesh Shah Executive Director retires by rotation at the ensuing Annual GeneralMeeting and being eligible has offered himself for reappointment. Brief profile of Mr.Nrupesh Shah as required under Regulation 36(3) of the Listing Regulations is annexed tothe notice convening the 29th Annual General Meeting which forms part of thisAnnual Report. Your directors recommend his re-appointment.

Mr. Nrupesh Shah was re-appointed as an Executive Director for a period of five yearseffective November 1 2011 pursuant to which his present term will be expiring on October31 2016. The Board of Directors at its meeting held on July 26 2016 has re-appointed Mr.Nrupesh Shah as Whole Time Director designated as an Executive Director for a period offive years from November 1 2016 subject to approval of members.

During the period under review Mr. Himanshu Shah Independent Director has resignedw.e.f. November 30 2015. The Board appreciated his contributions during his tenure as anIndependent Director. Due to retirement Mr. Chandrakant Gandhi ceased to be CompanySecretary and Compliance Officer w.e.f. October 31 2015. The Board recognised his longterm services to the Company.

Mr. Manan Bhavsar was appointed as a Company Secretary and Compliance Officer w.e.f.November 1 2015. He had tendered his resignation and accordingly he was relieved fromthis position w.e.f. close of working hours on June 30 2016. Mr. Mayur Barvadiyahas been appointed as a Company Secretary and Compliance Officer w.e.f. July 26 2016.

15] Extract of annual Return

Pursuant to Section 3 (a) of Section 134 and Section 92(3) of the Companies Act 2013the extract of Annual Return in prescribed Form MGT – 9 is annexed herewith asAnnexure 3.

16] Directors’ Responsibility statement

Pursuant to Section 134(5) of the Companies Act 2013 the Directors of the Companyhereby state and confirm that:

(a) in the preparation of the annual accounts for the financial year ended on March 312016 the applicable accounting standards have been followed and there are no materialdepartures from the same;

(b) they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year and of the profitof the Company for that period;

(c) they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 read withRules made thereunder for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities;

(d) they have prepared the annual accounts on a going concern basis;

(e) they have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and were operating effectively;

(f) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.

17] Meetings of the Board

Four meetings of the Board of Directors of the Company were held during the periodunder review. The details of meeting of the Board are reported under Corporate GovernanceReport which is annexed to Board’s Report.

18] Declaration by independent directors

Mr. Dipak Palkar Mr. Satyen Kothari Mr. Naishadh Parikh and Mr. Darshan Patel beingindependent directors have submitted their declarations stating that they meet thecriteria of independence as specified under Section 149(6) of the Companies Act 2013 andunder the Listing Regulations.

19] Nomination & Remuneration policy

The Company has framed Nomination & Remuneration Policy for appointment ofdirectors and senior management personnel their remuneration and evaluation of directorsand Board. The details of the said policy are reported in the Corporate Governance Report.

20] Particulars of loans guarantees or investments

The liquidity position of your Company is fairly comfortable and therefore the surplusfunds were invested to generate returns. As required under Section 186(4) of the CompaniesAct 2013 the following are the full details of investments made or loans provided duringthe year under review:

Sr. No. Name of Entity Relation Aggregate amount of investments made / loan provided during the year (H In crore) Purpose for which loans proposed to be utilized
1 Munters Keruilai Air Treatment Equipment (Guangdong) Co Ltd. China* Subsidiary 1.55 -
2 8.46% Tax Free Bond of Rural Electrification Corporation Limited - 16.49 -
3 8.48% Tax Free Bond of Indian Railway Finance Corporation Limited - 5.51 -
4 8.33% Cumulative Redeemable Preference Shares of Tata Capital Limited - 5.03 -
5 7.28% NHAI Tax Free Bond - 10.00 -
6 16.46% Rated Listed Non-Convertible Redeemable Cumulative Preference Shares of Infrastructure Leasing & Financial Services Ltd. (NCRCPS 2015 Series-I) - 10.05 -
7 Mukand Limited - 10.00 General business purpose
8 Bombay Dyeing and Mfg. Co. Limited - 10.00 General business purpose
9 Hikal Limited - 5.00 General business purpose

Note: Inter corporate deposits provided under serial number 7 to 9 fully received backon respective due dates * now known as Guangdong Symphony Keruilai Air Coolers Co. Ltd.

21] Particulars of contracts or arrangements with related parties

The particulars of contracts or arrangements entered with related parties as perSection 188(1) of the Companies Act 2013 in prescribed Form AOC-2 are given in Annexure4 to the

Board’s Report.

22] Risk Management

The Company is aware of the risks associated with its business. It regularly analysesand takes corrective actions for managing / mitigating the same. The Company periodicallyreviews its process for identifying minimizing and mitigating risks. The Board ofDirectors of the Company have framed a risk management policy and same is being adhered bythe Company. There are no risks which in the opinion of the Board threaten the existenceof the Company. However some of the risks which may pose challenges are set out in theManagement Discussion and Analysis which forms part of this Report.

23] Annual performance evaluation

Pursuant to the provisions of the Companies Act 2013 the Board of Directors hascarried out annual performance evaluation of its own performance its committees and alldirectors of the Company. The Nomination and Remuneration Committee has also reviewed theperformance of Board and all directors of the Company as required under the Companies Act2013 and the Listing Regulations.

Criteria for evaluation of Board and Committee

These criteria broadly covers the composition & quality meeting proceduresstrategy management relations succession planning functions duties etc.

Criteria for evaluation of Directors

They broadly covers participation at meetings knowledge & skill personalattributes leadership & quality strategy formulation and execution planning &execution human resource management/relations product/ service knowledge and so on.

24] Audit committee

The Board of Directors has re-constituted the Audit Committee at its meeting held onOctober 23 2015. Subsequent to the reconstitution Committee comprises Mr. Dipak PalkarChairman Mr. Naishadh Parikh Mr. Darshan Patel and Ms. Jonaki Bakeri. As per Section177(8) of the Companies Act 2013 and Listing Regulations the Board has accepted all therecommendations of the Audit Committee during the financial year 2015-16.

25] Vigil Mechanism

The Company has established a vigil mechanism to provide adequate safeguard againstvictimization and to provide direct access to the Chairman of Audit Committee inappropriate cases. This mechanism is available on the website of the Company.

26] Details of significant and material orders passed by the regulators or courts ortribunals

During the period under review there was no significant and material order passed bythe regulators or courts or tribunals impacting the going concern status and theCompany’s operations in future.

27] Particulars of employees

Pursuant to Section 197(12) read with Rule 5 of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 information of directors/employees ofthe Company are set out as Annexure 5 to the Board’s Report.

28] Internal Financial controls and its adequacy

The Company has devised an internal control system across various functions and thesame is reviewed by the Statutory Auditor and Internal Auditor at regular intervals. Thereis a centralized ERP system with user rights given on "need-to-know" basis and"maker-checker" concept is incorporated in each transaction entered in thesystem. All payments are subject to pre-authorisation as well pre-audit. Further tostrengthen the systems and processes and looking to the global presence and growth theCompany has implemented SAP ERP system with the help of M/s KPIT a well known SAPimplementation partner. The project cost would be over H5 crore.

29] Disclosure under the sexual Harassment of Women at Workplace (preventionprohibition and Redressal) act 2013

Your Company has in place an Anti-Sexual Harassment Policy in line with therequirements of The Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013. An internal Complaints Committee has been set up to redresscomplaints regarding sexual harassment. All employees (permanent contractual temporarytrainees) are covered under this policy.

There were no complaints received during the period under review.

30] Deposit

The Company has not accepted any deposit during the year under review and no unclaimeddeposits or interest was outstanding as on March 31 2016.

31] Insurance

The insurable interests of the Company including building plant & machinerystocks vehicles and other insurable interests like loss of profits directors &officers’ liability etc. are adequately covered.

32] Sebi order against sharepro services (i) pvt. ltd.

The Securities and Exchange Board of India (SEBI) vide its order no. WTM / RKA / MIRSD2/ 41 / 2016 dated March 22 2016 has passed Ex Parte – Ad – Interim Orderagainst Sharepro Services (I) Pvt. Ltd. (Sharepro) and others in order to protect theinterest of investors and integrity of the securities market. SEBI has also directed allclient companies of Sharepro to conduct thorough audit of records and systems of Sharepro.The Company has after preliminary inquiry prima facie discovered certain irregularitiesw.r.t. share related operations at Sharepro. The Company has filed a complaint on March30 2016 with Ellisbridge Police Station Ahmedabad against Sharepro and others forfurther investigation in the matter. The Company had already terminated services ofSharepro.

As per the directions provided in the said order of SEBI the Company had appointedErnst & Young LLP as an Auditor to complete its audit within 3 months from the dateof the said order. Accordingly the Company has submitted the report of Ernst & YoungLLP to the SEBI. Further the Company will take appropriate action as per the SEBI order.

33] Change of Registrar and share transfer agent

In view of the SEBI order dated March 22 2016 the Company has appointed M/s. KarvyComputershare Pvt. Ltd. as the Registrar and Share Transfer Agent.

34] Conservation of energy technology absorption and Foreign exchange earnings andoutgo

As required under Section 134(3)(m) of the Companies Act 2013 read with the Companies(Accounts) Rules 2014 details relating to Conservation of Energy Technology Absorptionand Foreign Exchange Earnings and Outgo are given as Annexure 6.

35] Acknowledgments

Your Directors wish to express their appreciation of the committed services byemployees at all levels. Your Directors also wish to place on record their deep sense ofappreciation for the valued support & co-operation by OEMs distributors dealersservice franchisees suppliers C&FAs bankers and all other stakeholders of theCompany and look forward to their continued association with the Company. The Company willmake every effort to meet the aspirations of its Shareholders.

For and on behalf of the Board
Place : Ahmedabad Achal Bakeri
Date : July 26 2016 Chairman and
Managing Director
DIN - 00397573