the world’s top brands find a home with us...portfolio, or ‘songbook’ is one of great quality...

Sing

er (S

ri La

nka)

PLC

Ann

ual R

epor

t 201

1

I T ’ S T H E S I N G E R N O T T H E S O N G

Size_275mm X 430mm, Spine_Size_10mm, CMYK

The World’s Top Brands Find a Home with us

Singer has found a way to “encapsulate the world” – marketing the products of Philips; Kenwood; Asus; Black & Decker; Tefal; Moulinex; Rowenta; Krups; Prestige; Samsung; Singer; Sisil; Hitachi;

Whirlpool…among others, through their outlets

No one could have ‘orchestrated’ this journey better. One of the oldest and most successful brands in the world, Singer began life more than a century and a half ago…with a sewing machine. Today, we are a retailing and financing company, marketing a high-tech range of products…and state-of-the-art sewing machines too!

It’s the Singer not the Song…

A common interpretation of this phrase implies that

a song, as beautiful as it may be, is only as good as its rendition. The analogy

is apt and finds resonance with the Singer saga. In application of the analogy, the Singer

portfolio, or ‘songbook’ is one of great quality and

features their products as well as those of

many of the world’s top brands. It is the Singer

‘business-scape’ that delivers a

‘stunning performance’, doing justice to the excellence of these

products and placing them before a discerning public.

Just as a good singer does wonders for a good

song…so too does Singer Sri Lanka, in respect of a

blue chip portfolio.

Singer (Sri Lanka) PLCNo. 80

Nawam MawathaColombo 2

Sri Lankawww.singersl.com

Contents

Report concept, design and production by

Smart Media - The Annual Report Company

04Group at a Glance 04

Chairman’s Letter 062011 will be remembered as a year when consumer markets re-awakened to exponential growth and unsatiated demand from a previous slow growth era was fulfilled.

Group Chief Executive Officer’s Review 10Board of Directors 16Senior Management Team 20How We Did What We Did 26

…milestone achievements coincided with the advent of Singer Company’s 160th year of international operations and the 134th year of our existence in Sri Lanka.

63

27 135

The Way We Manage 96Protecting Ourselves 128Audit Committee Report 133Remuneration Committee Report 134Financial Reports 135

2011 Results in Perspective 42Graphical Review 52Embracing Posterity 54

This Annual Report is Carbon NeutralThis Singer (Sri Lanka) PLC Annual Report has been produced by Smart Media - The Annual Report Company whose greenhouse gas emissions resulting from the writing, designing, photography, production, project management, usage of paper and other raw materials, printing and transportation are offset using verified carbon offsets.

Our VisionTo be the foremost appliance retailer in

Asia Pacific.

Our MissionTo improve quality of life by providing comforts and

conveniences at fair prices.

Our ValuesConsumers

We live up to the expectations of a responsible organisation by contributing to the improvement in the quality of life of our

customers through outstanding products and services.

Employees We respect each other as individuals and encourage cross functional

teamwork while providing opportunities for career development.

Shareholders We provide a reasonable return while safeguarding their investment.

Suppliers We develop our suppliers to be partners in progress and

we share our growth with them.

Competitors We respect our competitors and recognise their contribution

to market value.

Community We conduct our business by conforming to the ethics of our country

and share the social responsibility of the less fortunate.

Environment We make every effort to ensure that the environment is protected

and conserved for future generations.

Our ObjectivesTo be the market leader in our Product and

Market Segment.

Provide our consumers with the Best Service & Shopping Experience in the Island.

Provide our Consumers with Products of Latest Technology.

Develop our Employees to achieve their real Potential.Provide our Shareholders with steady Asset Growth and Return on

Investment above our Industry Norm.

Grow our Revenue and Profits at a rate above the Industry Norm.

4 Singer (Sri Lanka) PLC Annual Report 2011

Financial Highlights

2011 2010 Increased/Rs. ’000 Rs. ’000 (Decreased) %

Revenue 22,010,767 16,028,534 37.3

Net Finance Cost 801,472 774,225 3.5

Share of loss of Equity Accounted Investees (Net of Income Tax) (639) (1,017) (37.1)

Profit before Tax 1,986,262 1,167,862 70.1

Profit for the Year 1,306,756 668,819 95.4

Stated Capital 626,048 626,048 –

Revenue Reserve 3,413,011 2,578,325 32.4

Revaluation Reserve 655,454 664,542 (1.4)

Non-Controlling Interest 257,669 224,234 14.9

Total Equity 4,996,590 4,103,897 21.8

Property, Plant & Equipment - Net 1,691,107 1,564,240 8.1

Investments 63,947 40,586 57.6

Net-Current Assets 1,084,621 1,846,308 (41.3)

Gross Dividends* 939,072 281,722 233.3

Dividend per Share - Rs.* 7.50 4.50 66.7

Dividend Payout Ratio - %* 80.75 66.54 21.4

Earnings per Share - Rs. 10.08 5.34 88.8

Price Earnings Ratio 13.16 18.28 (28.0)

Net Assets per Share - Rs. 37.85 30.99 22.1

Market Value per Share - 31st December - Rs. 132.70 195.00 N/A

Net Income to Net Turnover - % 5.94 4.17 42.4

Return on Average Net Assets/Equity - % 29.30 18.79 55.9

Debt Ratio - % 70.78 67.77 (4.4)

Gearing Ratio 0.22 0.31 (29.0)

Interest Cover 3.41 2.43 40.3

Dividend Cover 1.24 1.50 (17.3)

Current Ratio 1.11 1.28 (13.3)

Acid Ratio 0.77 0.95 (18.9)

* Includes authorised Final Dividends of the Company

01 Group at a Glance

Group Revenue Increased by Sales Stores To Government

37.3% 95.4% Rs. 1,671 million

Annual Report 2011 Singer (Sri Lanka) PLC 5

Hitting tHe HigH notes…Over the years, Singer helped more and more people ‘move up the scale’, bringing products of quality within the reach of countless thousands through a wide range of easy payment schemes.

Group Revenue

2010Rs. 16,029 million


Profit before Tax



Profit for the Year

2010Rs. 669 million


Singer Staff Sales Stores Customer Base

1,228 351 Over 2 million Households

02 Chairman’s Letter

Revealing tHe yeaR gone by and Reflecting on 2012



Dear Shareholders,2011 will be

remembered as a year when consumer markets re-awakened to exponential growth and unsatiated demand from a previous slow growth era was fulfilled. This year was marked by exceptionally high credit growth within the banking space, both in the investment and consumer sectors. Growing national prosperity was reflected in faster migration of consumers to middle and upper income groups and this was evidenced by the ‘socioeconomic categories of A & B class’ crossing the 10% to population threshold, a phenomena also experienced by some of our neighbouring countries. We witnessed growing sophistication in the national retail space where competition set up modern stores to catch up on Singer’s awesome distribution reach. This trend is

likely to be accentuated in the years ahead as the battle for market share is poised to liven up. This was a year like no other where consumer behaviour was uninhibited reflecting exceptional market growth in the consumer durables sector due to credit expansion and consumer prosperity.

10%‘socioeconomic categories of A & B class’ crossing the 10% to population threshold

Singer skillfully rode the crest of a wave and emerged triumphant, with the Company and Group both recording all time highs at top and bottom lines. Group revenue rose to Rs. 22 billion and Group net income to Rs. 1.3 billion. Investment in aggressive communication campaigns paid dividends while nationwide visibility and availability of goods and services was a ‘sine quo non’ for our success.

Core BusinessGrowth in white goods share, with support from ceaseless new product initiatives out of our affiliate Regnis (Lanka) PLC led to exciting gains. As per the current level of progression, we see this category crossing the Rs. 10 billion revenue mark in the near term. However our undoubted product champion was consumer electronics with a stupendous growth of 68.5%. Migration from conventional to LCD/LED TV models, a wide choice of brands, supported by fair pricing from a low tariff regime resulted in a truly remarkable rally. Current trend for replacement growth is expected to continue. It augurs well for the future that consumer sewing, from where this epic 160 year journey began, still retains buoyancy. The sewing machine has reinvented itself through several life cycles to remain within the grasp of consumer’s main hierarchical needs. As a corporate entity that provides a feminine touch in our offer we are proud to present an array of cooking products

which will satisfy the wants of any housewife. Our supply base originates from India, China, Turkey and Europe and out of this initiative has given birth to a concept of a modern ‘Singer Kitchen’. In ‘Communications’ the Singer laptop made steady progress under the tagline a ‘Laptop for Everybody’. There is plenty of head space for resulting growth which is aimed towards establishing communications as a major category.

Singer FinanceSinger Finance (Lanka) PLC, a 2004 incorporated 75% owned subsidiary has made steady progress since commencement. We have a growing deposit base and our asset book is composed mainly of consumer durables financing and vehicle leasing and financing. The Company reports one of the lowest non-performing loan ratios in the industry while our provisioning is more stringent than is required by governance rules. Its symbiotic relationship with the Parent Company strengthens our relationship with customers and the brand quality extension carries with it the undoubted trust of the iconic parent, which lead to steady sustainable future growth.

The EconomySri Lanka recorded a GDP growth of over 8% for the 2nd consecutive year, a first time in her post-independent history, moving our economy value closer to US$ 60 billion. Inflation was contained at mid single digits and a predictable interest regime prevailed. As markets became attractive import demand was fuelled, accompanied by rapid credit led import growth which caused stress in the balance of trade, followed by pressure on balance of payments equilibrium and money supply. Private inward remittances grew exponentially to an all time high of US$ 5.2 billion to somewhat mitigate the ill winds of the escalating trade deficit. These funds spun simultaneously to stimulate consumer markets, enriching the quality of life of the larger populace.

Chairman’s Letter


Across the globe, the European debt crisis caused a pall of gloom leading to stress amongst the Union countries. As about 50% of the total Balance Sheet of the global banking system is held by European banks, early correction of the Euro currency is a prerequisite for global stability. While in U.S.; despite recessionary conditions and disillusionment about politics being their primary concerns, the underlying optimism could pave the way for an early U.S. led global recovery. Emerging markets too are slowing down causing a pessimistic global GDP outlook of 2-3% for 2012. The Sri Lanka forecast remains in optimistic 7 to 8% arena and we have to watch closely as to how our economy will unfold amidst the turmoil of yet another possible global melt down. If Sri Lankans too could remain optimistic, we are in a position to shrug off the headwinds of a global slowdown and make good for the 3rd year in a row.

Non-Core BusinessIt gives me great personal satisfaction to see our furniture revenue finally cross the Rs. 1 billion mark. Furniture was strategically positioned as a non-core business with upward potential to support our three major core categories. Investment has slowed down in recent times. In the urbanised consumer markets of South East Asia, furniture offering is merging with home appliance products for stylising large to medium modern retail format. The resulting consumer basket is increasing. My prediction is that Sri Lanka too will follow suit within the next 5 years. With the muscle in our procession namely,

a. A sophisticated manufacturing base.

b. An established supply chain.

c. A network of mid-sized specialty stores.

d. Vast retailing experience.

e. Proven quality platform.

f. A new brand name growing in stature.We need to reinvest in furniture or else

let an opportunity slip by.

Chairman’s Letter

tHis was a yeaR like no otHeR…singeR skillfully Rode tHe cRest of a wave and emeRged tRiumpHant, witH tHe company and gRoup botH RecoRding all time HigHs at top and bottom lines


We need to prevent others from entering the prevailing void in the branded market to strengthen their competitiveness against us.

Transport category remains in jeopardy and will continue to be so until a quality supplier of motor cycles can be sourced from India.

Brands & Brand EquitySinger once again emerged the Most Popular Brand of the year for the 7th successive year in a SLIM/AC Nielsen sample of 2700 interviewed, representing every province in the island. Arguably this achievement is unparalleled in global branding history. While it portrays the strength of Singer brand across our nation, this also signifies potential for brand extension into hitherto unexplored sectors of the economy.

We purchased the Sisil brand, a heritage local market leader in white goods in 2001. Since that transfer, brand revenue grew from Rs. 440 million to Rs. 2.75 billion in 2011 despite resting in the shadow of the iconic Singer brand. In addition, a retail channel of 43 stores, supporting the powerful Singer Plus channel has emerged latterly represented by presence in urban and suburban cities. Usefulness of such supporting channels need not be underrated as these sustain our No. 1 market leadership position in the face of new competition who will envision the consumer durables space as easy take, in the absence of adequate presence, as new territorial markets open up in the face of spreading prosperity in the hinterland.

Multi brand offering has come to stay in Sri Lanka and we are fortunate that the Singer Group owns 3 brands, a position none of our competitors can boast of. (i.e. Singer, Sisil and Unic)

ShareholdersLong standing shareholders benefit from our consistent performance over the years. Company and Group have always delivered profits irrespective of business upswings and downturns while our revenue took just a one time dip during the unprecedented ‘recession’ of 2009.

Earnings per share has grown to Rs. 10.08 and price earnings multiple reported is Rs. 13.17, which is above the market average.

This is in the light of a subdivision of shares in the ratio of one is to one in 2011 which overnight doubled the issue of shares outstanding. Company has had a tradition of issuing Bonus and Scrip shares ever since becoming public listed in April 1982 enabling shareholders to share in this continuing prosperity.

Conclusion I take this opportunity of congratulating Asoka and the management on an outstanding year’s performance and also the staff for their ever abiding support. It needs the support of many hands to move an enterprise of this size, omnipresent in every nook and corner of our island home. To my fellow Directors, once again a word of thanks for their unstinted support, advice and encouragement and to you our shareholders for persisting to believe in us.

Yours sincerely,

Hemaka AmarasuriyaChairman

28th February 2012Colombo

Chairman’s Letter


03 Group Chief Executive Officer’s Review

winning consistently tHRougH cleaR and tHougHtful stRategy


Dear Shareholders,We are happy to inform that the revenue of Singer (Sri Lanka) PLC Group reached Rs. 22 billion while the Group Net Profit for the period grew by 95.4% in 2011.

The EnvironmentWe can describe the environment in 2011, as one which was very favourable for businesses and for growth. The economy had a GDP growth of around 8%. Consumer markets expanded in most parts of the country and especially in the North and the East. The country also experienced a low inflation. Although interest rates started climbing up in the second half, the rates were still at a low level considering our past experience.

The downside was the floods that ravaged the harvest in many parts of the country in the 1st quarter.

The Government Budget in November 2011, confirmed the strategies and policies of the previous Budget including the move to make Sri Lanka a hub for shopping.

The environment also was one that brought rapid changes, including the entry of new players to the market. While the changes disturb the existing status quo, they give us new opportunities and new threats. As mentioned last year, it is up to us to take advantage of the new opportunities and to ward off the new threats.

The Financial Results for the YearSinger (refer to Group and/or Company in this review) had a very good performance during the year 2011, growing on top of a very good year in 2010. While I would not go into details, as this is given in the Financial Review, it is important to list significant areas in this review.

The Group revenue passed the Rs. 22 billion mark, which was an increase of 37.3% while the Company revenue reached Rs. 20.9 billion, which is an increase of 38% over prior year. Since selling prices were lower, following the tariff reductions, our volume growth was more than the value growth.

The Group Profit before tax was just below Rs. 2 billion - at Rs. 1.986 billion it had a growth of 70%. The Company Profit before tax at Rs. 1.7 billion had a growth of 110%.

The Group Net Profit for the year at Rs. 1.3 billion represented a growth of 95.4% over the prior year. In the prior year the Group had a Rs. 150.5 million net gain on dilution, due to the initial public offering of shares of Singer Finance (Lanka) PLC. If we exclude this gain, the growth of Group Net Profit over the prior year is 152%. The Company Net Profit grew by 175% for the year 2011.

Celebration of 160 YearsDuring the year Singer Worldwide celebrated 160 years of its existence. This was a proud occasion for us. This was celebrated, giving first preference to religious ceremonies at our head office and at the branch level. We had a special promotion for our customers together with events and celebrations with customers. We also had a celebration with our staff, as well as a CSR programme for the community.

A key event was the Singer Lifestyle Exhibition, which showcased the vast array of our products and brands to the public, at the BMICH in Colombo. It was a grand success with tens of thousands of consumers packing the exhibition over the three days.

Products, Brands and SourcingIn an environment of customers changing their lifestyles and preferences, we positioned ourselves to be the preferred consumer durable retailer/wholesaler to meet the new lifestyles and the new needs.

For this purpose, we introduced many new models of Consumer Durables, including those with the latest technology.

Singer was in the forefront of converting the mass market to use LCD/LED televisions, to use washing machines and laptops in the home and to upgrade the lifestyle from normal sewing machines to portables, single door refrigerators to double doors, semi automatic washers to fully automatic washers, etc.

By using our strength and breath in sourcing of products, we were able to supply high quality products at very reasonable prices.

Singer strategically expanded its operations by penetrating key emerging markets, whilst consolidating its operations in the core market segments. We increased the intensity of our promotions and market penetration strategies in both urban and rural areas.

Group Chief Executive Officer’s Review


In addition to the market opportunities, building on the wide distribution network, expanding on the range of products and choice of brands, multi channel offering, continuous and uninterrupted supply chain, continuous production and supply from the Company’s and sister company factories and a well directed, aggressive sales force were the backbone of the notable revenue growth.

The Cricket World Cup enhanced the demand for televisions in the first quarter and this trend continued due to technological change from traditional CRT televisions to LCD, LED, Smart Television and 3D Televisions. The Company introduced a wide range of new technology LCD, LED, Smart Televisions and 3D Televisions at affordable prices to Sri Lankan consumers under different brands.

The advent of new products coupled with low selling prices made possible by reduction of duties and taxes resulted in growth of our volumes. The units sales of our Televisions increased by 56%, over prior year, while Refrigerators increased by 35% and Washing Machines increased by 36%. Other significant increases were on Audios (76%), Computers (49%), Air Conditioners (109%), DVD and Home Theaters (54%), Small Kitchen Appliances (62%), Fans (87%), Bicycles (85%), Vacuum Cleaners (353%), Irons (71%), Deep Freezers (77%), Microwave Ovens (170%) and Water Filters (66%). It is a notable fact that both our traditional product lines as well as new product lines grew over prior year, resulting in a balanced performance during the period under review.

Singer reintroduced retailing of mobile phones. New products introduced during the year were, Digital Cameras, Blu-ray Players, Water Purifiers, Air Coolers and Gas Cylinders.

Singer strengthened its offering of Brands by adding distributorships for Skyworth, Godrej, Dawlance and Symphony brands. Skyworth is one of the top three brands in China for televisions. Together with TCL, Singer is now the exclusive distributors for two of China’s top three television brands. Godrej is one of India’s leading refrigerator brands, while Dawlance is the leading refrigerator brand of Pakistan; Symphony is the leading brand for Air Coolers in India. Singer continues to be distributors for leading Japanese, Korean, American, European, Indian and Pakistani brands as well as being the owners of the Sri Lankan brands of Sisil and Unic apart from the very own Singer brand.

Channels and DistributionSinger has the strongest distribution network for consumer durables through its many channels. This continued to be strengthened.

Revenue growth in all channels was substantial and the growth was spread across all channels. In terms of sales growth on geographical basis, except the flood affected districts, all other areas had double digit sales growth compared to the prior year. The Company’s revenue growth in Colombo District was 55%. This is due to reduction of the grey market and the Company’s focus on latest technology products.

Singer Plus channel opened 10 new showrooms and Approved Dealer points, upgraded 2 Approved Dealer points to Singer Plus showrooms while SISIL channel opened 3 new showrooms and Mega

channel opened 1 showroom during the period under review. Of the total expansion of 14 showrooms, 5 were in the Northern and the Eastern Provinces. In addition, the Company renovated 31 showrooms providing highest merchandising standards which will be compatible with market developments in future as well.

The wholesale network too continues to be strengthened with new dealers joining our network and increased purchases by existing dealers.

Financial Services and CreditUnder Financial Services, customers can pay utility and credit card bills at Singer shops and also collect funds remitted through Western Union. Three new utility/insurance companies were added to our list during the year. Financial Services volumes increased by 20% during the year while the transactions grew by 5%.

The Company continued to offer a wide range of Easy Payment plans through its own, through Singer Finance, through other banks and finance companies and through credit cards. The percentage of sales through cash and credit cards increased during the year.

Human ResourcesThe Company places great emphasis on its Human Resources and more details are given in the Embracing Posterity. The Company had very good industrial relations during the year. The Company continued its activities and events for employees and their families and increased the training for its staff as well for our partners and their staff.



After Sales ServiceSinger continued to have the best After Sales Offering to the consumers in Sri Lanka. This will be strengthened with a new Regional Service Centre in Polonnaruwa.

ManufacturingThe manufacturing division of the Company consists of Agro and Furniture factories. The manufacturing division production increased by 14%. Eight new products were introduced to the market. A new finger jointing machine was introduced to enable finger jointing of boards to be done locally to save costs.

ERP SystemsThe completion of the ERP System took place in 2010 and in 2011; we were making improvements and enhancements to the system. The ERP System has been of immense help to facilitate growth, by giving up-to-date information to all levels of staff, so that corrective action can be taken without any delay.

In January 2012, we commenced customer receipts to be sent via SMS instead of printing receipts, thereby saving paper, ink and printers and speeding up the process. We are the first retailer in Sri Lanka to have receipts through SMS.

Singer Finance (Lanka) PLCThe Company’s subsidiary Singer Finance (Lanka) PLC continued to improve its business volumes. Its revenue increased by 27% while the net profit grew by 96%. The lending portfolio in December 2011 had a 48% growth over the prior year. The Company increased its public deposits by Rs. 1 billion during the year. Singer Finance (Lanka) PLC opened a branch in Ampara and added two other service outlets during the year.

CSRSinger believes that it is our duty to safeguard the environment and to carry out Social Responsibility Projects. The work done on these areas are described in pages 54 to 93 and reflect an increased level of activity in this area.

Conclusion I wish to place on record my appreciation of all our staff for their contribution and commitment without which it would have not been possible to achieve these results. There was exceptional contribution across all ranks and all divisions and departments in the Group.

I also thank the Chairman both for what he had done over the past years for the Company and the Group and for his continued guidance and support which helped us to achieve these results.

I also thank the Board of Directors of the Company, and the Chairman and Chief Executive Officer of Singer Asia for their valuable support and guidance in achieving these results.

I also thank all our shareholders for their continued trust in the Board of Directors and the Management of the Company.

Sincerely,

Asoka PierisGroup Chief Executive Officer

28th February 2012Colombo



The Tenor of our TechnologyJust as a good tenor has the ability to ‘emerge’ from the choir around him and bring a song close to the audience, so too, premium Singer technology, as embodied for example in our high quality range of LED and LCD Televisions, delivers top performance…and brings ‘the picture’ closer than ever to the audience.


01

02

05

10 11 12

06 07

04 Board of Directors


04

13 14

08 09

03


01. Hemaka Amarasuriya

ChairmanJoined the Board of Singer (Sri Lanka) PLC on 1st April, 1979. Appointed Deputy Managing Director on 24th August 1983, Country Manager Singer Singapore 2004, Managing Director on 1st January 1985, Chairman on 1st November 1986. Appointed as the Non-Executive Chairman on 1st July 2010.

Chairman and former Managing Director of Singer Industries (Ceylon) PLC, Regnis (Lanka) PLC, Regnis Appliances (Pvt) Ltd., Singer Finance (Lanka) PLC, Reality Lanka Ltd., and Chairman of National Development Bank PLC. Mr. Amarasuriya holds Directorships in NDB Capital Ltd., Bangladesh, Bata Shoe Company of Ceylon Ltd., Bata Exports (Pvt) Ltd., Equity Investments Lanka Ltd., TNL Radio Network (Pvt) Ltd., ACL Cables PLC, Tarmac Quarry Products (Private) Ltd., C.W. Mackie PLC, Micro Cars (Pvt) Ltd., Lanka Aluminium PLC, ACME Printing & Packaging PLC. He is a Vice-President of Retail Holdings Ltd., USA and former Senior Vice-President of Singer Asia Ltd.

Founder President of the Industrial Association of Sri Lanka. Currently, Chairman of Regional Industrial Service Committee (RISC), Southern Province. Former Chairman of Employers’ Federation of Ceylon. Served on the Presidential Task Force on Science & Technology, and on the Securities and Exchange Commission & Advisory Committee on Company Law at different times.

Fellow of The Institute of Chartered Accountants of Sri Lanka, Fellow of the Chartered Institute of Management Accountants - UK, Fellow of the Chartered Institute of Marketing UK, Diploma in Marketing Management & Strategy from New York University, USA.

02. Dr. Gamini C.B. Wijeyesinghe

DirectorJoined the Board of Singer (Sri Lanka) PLC, on 13th February 1995.

Director of Singer (Sri Lanka) PLC., Singer Industries (Ceylon) PLC., Regnis (Lanka) PLC, NDB Venture Investments (Pvt) Ltd., Ayojana Fund (Pvt) Ltd., Fintravels Ltd. and Ceylon Trading Co. Ltd.

Is a Fulbright Scholar - attended Ohio State University, USA, Graduate School of Management. A past president of The Institute of Chartered Accountants of Sri Lanka and the Organisation of Professional Association of Sri Lanka.

Former- Council Member of the Commonwealth Association of Corporate Governance, Member of the External Audit Committee of the International Monetary Fund, Member of the External Audit Committee of the Central Bank of Sri Lanka and precedent partner KPMG Ford, Rhodes, Thornton & Co. and member of the KPMG, Asia Pacific Board and FAPA (UK) (retired).

Is a Fellow of The Institute of Chartered Accountants of Sri Lanka and a Fellow of the Institute of Certified Management Accountants of Sri Lanka.

Has been conferred a Doctorate (Honoris Causa) by the Postgraduate Institute of Management affiliated to the University of Sri Jayawardenapura.

03. Dr. Saman Kelegama

DirectorJoined the Board of Singer (Sri Lanka) PLC as Director on 1st June 2006.

Director of Singer Finance (Lanka) PLC, Regnis (Lanka) PLC, S C Securities and Colombo Stock Exchange.

Executive Director, Institute of Policy Studies of Sri Lanka, Fellow, National Academy of Sciences in Sri Lanka, former President of Sri Lanka Economic Association and author of several publications on the economy of Sri Lanka.

D.Phil (Economics), Oxford University, UK.

04. Deshabandu Ajit Jayaratne

DirectorJoined the Board of Singer (Sri Lanka) PLC as Director on 1st June 2006.

Director of Singer Industries (Ceylon) PLC, ACL Cables PLC, Overseas Realty (Ceylon) Ltd., C.W. Mackie PLC, Colombo Fort Land & Building Company PLC, Colombo Fort Investment PLC, Colombo Investment Trust PLC, Colonial Motors PLC, York Arcade Holdings PLC and Mireka Capital Lanka Ltd.

Former Chairman of Colombo Stock Exchange and Ceylon Chamber of Commerce and Former High Commissioner of Sri Lanka to Singapore.

B.Sc. (Economics), University of Southampton, Fellow of The Institute of Chartered Accountants of Sri Lanka, Fellow of the Institute of Chartered Accountants of England & Wales.

05. Peter O’Donnell

DirectorJoined the Board of Singer (Sri Lanka) PLC on 1st October 2003.

Managing Director of UCL Asia Ltd., (Hong Kong), Director, Singer Asia Ltd., Singer Pakistan Ltd., Observer, Singer Thailand Public Company Ltd.

Mr. O’Donnell is an alumnus of both Harvard College and Harvard Business School.

06. John J. Hyun

Joined the Board of Singer (Sri Lanka) PLC on 10th June 2011.

Mr. Hyun is a Managing Director of UCL Asia, one of Hong Kong’s larger direct investment groups in terms of liquid capital.

Mr. Hyun began his career in finance more than 17 years ago as part of Bankers Trust’s Asia Private Equity investment team based in Hong Kong before relocating to Seoul to help establish its Mergers, Acquisitions & Advisory group. He returned to Hong Kong in 1999 with Investor Asia,

Board of Directors


the Asian operations of Investor AB, the Swedish industrial holding group controlled by the Wallenberg family. Mr. Hyun joined UCL in 2003.

Mr. Hyun is a Director of Direct Asia Insurance (Holdings) Pte Ltd., KCS Ltd., Singer Finance (Lanka) PLC and several non-profit organisations active in Asia. He is an alumnus of the University of Chicago.

07. Gavin J. Walker

DirectorJoined the Board of Singer (Sri Lanka) PLC, as Director on 1st November 2005.

Mr. Walker is the President and Chief Executive Officer of Singer Asia Ltd. and was appointed to this position in August 2005. Prior to joining the Company, Mr. Walker held offices as Managing Director and Chief Executive Officer of public quoted and private companies in the United Kingdom and South Africa. Mr. Walker, served as Chief Executive Officer of a multi-brand retailer of electrical appliances and furniture with operations in 16 African countries and Australia (including SINGER® brand electrical appliances under license). Mr. Walker serves on the Board of a number of Singer Asia Subsidiaries.

08. Asoka Pieris

Director/Group Chief Executive OfficerJoined the Board of Singer (Sri Lanka) PLC on 1st August 2004. Appointed as Managing Director and Group Chief Executive Officer on 1st July 2010.

Director and Group Chief Executive Officer of Singer Industries (Ceylon) PLC, Regnis (Lanka) PLC, Singer Finance (Lanka) PLC, Reality Lanka Ltd. and Regnis Appliances (Pvt) Ltd. Director of Btindia Ltd., Brand Trading (India) Private Ltd., Vice-President of Singer Asia Ltd. and Retail Holdings N.V.

Prior to the present appointment, Mr. Asoka Pieris was Chief Financial Officer of Singer Asia Ltd., and Controller of Retail Holdings N.V.

Associate Member of The Institute of Chartered Accountants of Sri Lanka. Fellow Member of the Chartered Institute of Management Accountants, UK.

09. V.G.K. Vidyaratne

Alternate DirectorJoined the Board of Singer (Sri Lanka) PLC on 1st August 2004.

Director of Regnis (Lanka) PLC, and Regnis Appliances (Pvt) Ltd., Reality Lanka Ltd., Alternate Director of Singer Industries (Ceylon) PLC and General Manager - Factories of the Singer Group, Sri Lanka and a Committee Member of the Industrial, Association of Sri Lanka.

Holds B.Sc. (Hons.) Degree in Production/Mechanical Engineering, University of Peradeniya. MBA from the University of Southern Queensland, Australia. A Chartered Engineer, Member of the Institute of Engineers, Sri Lanka.

10. Mahesh Wijewardene

Alternate DirectorJoined the Board of Singer (Sri Lanka) PLC on 1st June 2006.

Commercial Director of Singer (Sri Lanka) PLC and Member of the Singer Asia Sourcing Committee.

Chairman of the Ceylon Chamber of Commerce - Import Section. Past Chairman of the Sri Lanka-China Business Council. Serves in the Committee of the Ceylon Chamber of Commerce.

Holds a Masters in Business Administration from the University of Southern Queensland, Diploma in General Management.

11. Priyath Salgado

Alternate DirectorJoined the Board of Singer (Sri Lanka) PLC on 15th May 2008.

Finance Director of Singer (Sri Lanka) PLC and Director of Singer Finance (Lanka) PLC.

12. Nasser Majeed

Alternate DirectorJoined the Board of Singer (Sri Lanka) PLC on 14th February 2011.

Director Marketing of Singer (Sri Lanka) PLC and Director of Regnis Appliances (Pvt) Ltd.

13. Kumar Samarasinghe

Alternate DirectorJoined the Board of Singer (Sri Lanka) PLC on 14th February 2011.

Director of Sales and Sewing Marketing of Singer (Sri Lanka) PLC.

Holds a Diploma in Business Administration and Diploma in Marketing an MBA from University of London.

14. A.C.M. Irzan

Secretary to the Board since 15th May 2008.Alternate Director, Singer Industries (Ceylon) PLC, Group Factory Controller and Chief Financial Officer of Regnis (Lanka) PLC and Regnis Appliances (Pvt) Ltd.

Company Secretary of Singer Industries (Ceylon) PLC and Regnis (Lanka) PLC which are public quoted companies and Regnis Appliances (Pvt) Ltd.

A Fellow of the Chartered Institute of Management Accountants, UK and holds an MBA in Marketing from the University of Colombo, Sri Lanka.

Board of Directors

05 Senior Management Team

Shantha Wijeweera

Premalal De Silva

Ananda Manoratne

Shyam Ramanathan

Janaka Mendis

Kapila PereraRussel De La Motte

Ananda Weerasuriya


Sujeewa Perera

Chitral Perera

Lalith Yatiwella

Dhammika Wijesundera Chandana Samarasinghe

Neminda Karunaratne

Ajith Paranavitane

Mohamed Fairoz


Asantha Karunaratne

Thilan Rupasinghe

M. Mahesharatnam

Indika Gunathilake

Sajindra Perera

Priyanjith Meegoda

Vajira Tennekoon

Thulitha Mendis

Dhammika Guruge

Viresh Gomes

Ransiri Perera

Aruna Kolambage

Ruwan Singhabahu

Oscar Amarathunga

Nandana Wijesundera


we’Re ‘vocal’ about ouR RangeIn fact we’ll sing it from the rooftops every chance we get…our product diversity and range spans the scale, serving a wide cross section of customers across the length and breadth of the country.

• Air Conditioners • Audios (Portable/Hi-Fi) • Bicycles • CDMA Phone Connections • Chest Freezers • Computers • Cooker Hoods/Hobs • Dialog TV (Satellite TV Broadcasting) • Digital Cameras & Camcorders • DVDs/VCDs/VCRs • Electric Ovens • Fans • Fitness Equipment • Furniture • Gas Burners & Ovens • Generators • Home Theatre Systems • Industrial Sewing Machines • Irons • Kitchen Appliances • Microwave Ovens • Motor Bicycles • PEO TV (SLT PEO TV - IPTV Broadcasting) • Refrigerators • Security Systems • Sewing Machines • Televisions, LCD and LED • Two-wheel Tractors • Washing Machines • Water Pumps

Annual Report 2011 Singer (Sri Lanka) PLC 25 • Air Conditioners • Audios (Portable/Hi-Fi) • Bicycles • CDMA Phone Connections • Chest Freezers • Computers • Cooker Hoods/Hobs • Dialog TV (Satellite TV Broadcasting) • Digital Cameras & Camcorders • DVDs/VCDs/VCRs • Electric Ovens • Fans • Fitness Equipment • Furniture • Gas Burners & Ovens • Generators • Home Theatre Systems • Industrial Sewing Machines • Irons • Kitchen Appliances • Microwave Ovens • Motor Bicycles • PEO TV (SLT PEO TV - IPTV Broadcasting) • Refrigerators • Security Systems • Sewing Machines • Televisions, LCD and LED • Two-wheel Tractors • Washing Machines • Water Pumps


06 How We Did What We Did

2011 was a year of great achievements for us in terms of turnover and net profit and many other frontiers. It is a pleasing experience that these milestone achievements coincided with the advent of Singer Company’s 160th year of international operations and the 134th year of our existence in Sri Lanka.

Our top line reached Rs. 22 billion and we joined the elite group having touched Rs. 1.3 billion at the bottom. We pay our sincere tribute to every member of the Singer family, past and present, for their commitment, dedication and passion for excellence, which brought about this magnificent transformation of the Company. No less important is the loyalty of our extended family, our vast customer base, who have unwaveringly been with us through generations. All of them are remembered with gratitude at this time of joy. It is solely because of them that we continue to remain as the No. 1 marketer of consumer durables and for the 7th successive year the winner of the prestigious “People’s Brand of The Year” award.

In hindsight, we are very proud of what we are today, from what we were 134 years back. Singer a name, synonymous with sewing machines then, today boasts of a portfolio unmatched by any organisation in the country, with our footprint spanning the length and breadth of the island. We will not rest on our laurels, but as in the past, will be moving forward with determination, commitment and passion towards greater heights. As this review turns its pages, the saga of how we achieved what we did, during the year will unfold.

‘No resource is more powerful in an organisation than a high performance team. What great individuals cannot accomplish on their own can be achieved by a high performance team.’

- Phil Bryson


The Singer Fashion Academy actively promotes the art of sewing via a student population of 2,500

from all over the Country

How We Did What We Did


Year at a Glance Operating Highlights and Significant Events

• Renovated Sisil World Showroom in Katugastota

• Company executed a one for one subdivision of ordinary shares

April• Needle Art Exhibition -

‘Needle Wonder 2011’

• Renovated - Singer Plus Showroom in Thalawakelle

• Registered Office of the Company changed to No. 80, Nawam Mawatha, Colombo 02 with effect from 1st April 2011

• Management office of the Company relocated to No. 80, Nawam Mawatha, Colombo 02

May• Introduced Samsung Smart TVs to the market

• Renovated Singer Plus Showroom in Moratuwa

June• Renovated Singer Plus Showroom in Kohuwela and

Sisil World Showroom in Galle

July• Launched ASUS @ SINGER - Notebook and

Laptop Computers

• Service award ceremony - recognition of employees with a long service

• Launch of new range of Hitachi LED TVs and Home Appliances - ‘Tomorrow Together with Singer’

• Opened new Singer Plus Showroom in Agunakolapalassa

• Renovated Sisil World Showrooms in Kurunegala, Ja-ela and Singer Plus in Wattala

• Entered into a partnership agreement with Litro Gas to distribute Litro Gas Cylinders

August • Singer Fashion Show - Conducted by Singer

Fashion Academy

• 160 years celebration with religious ceremonies and special discount promotions on 16th August 2011

• Renovated Singer Plus Showrooms in Bandarawela, Ampara, Moneragala, Kurunegala and Dehiwala and Sisil World Showrooms in Thalawathugoda and Union Place

• Singer (Sri Lanka) PLC was listed among the Top Twenty of the ‘Most Respected Entities in Sri Lanka’ by LMD magazine and Singer was promoted 2 notches up from 21st place in 2010 to 19th in 2011

• Singer introduced new product segment ‘Air Cooler’ - under the brand name of ‘Symphony’ from Symphony Limited, India

January • Commenced sale of 'Skyworth'

branded televisions

• Commenced sale of Samsung Cameras - New product range to Singer

February• Opened new Singer Mega

Showroom - Singer Mega K Zone at Moratuwa

March• Opened New Singer Plus

Showroom in Maho and renovated three Singer Plus Showrooms in Welimada, Ward Place and Kaduwela



September• Dialog GSM and Dialog

Broadband bill payment and Janashakthi Insurance Premium Collection facilities came under ‘Singer Express Pay’ bill payment network

• Launched Singer Side by Side Refrigerators

• Renovated Singer Plus Showrooms in Matara, Tissamaharama, Milagiriya and Kirulapone

• Opened new Sisil World Showroom in Panadura

• Renovated Singer Homes Showroom in Negombo

October• Singer-Unilever partnership

agreement to launch ‘Pureit’ water purifier

• Inauguration ceremony of ‘Singer Sri Lanka Toastmasters Club’

• Opened new Singer Plus Showroom in Kilinochchi and Sisil World Showroom in Trincomalee

• Renovated Singer Plus Showrooms in Chilaw and Trincomalee

• Renovated Singer Homes Showroom in Ratnapura and renovated Singer Mega Showroom in Rajagiriya

November• Launched Singer ‘ALL IN ONE PC’,

the first ever to the Sri Lankan Personal Computer Market

• ‘Singer Lifestyle Fiesta’ at BMICH - First Consumer durables exhibition in Sri Lanka

• Three new Singer Plus Showrooms opened in Batticaloa, Rajagiriya and Baddegama

• Renovated Singer Plus Showrooms in Mawanella, Neluwa, Kaduruwela, Wennappuwa and Medawachchiya

December• Commenced ‘Godrej’ and ‘Dawlance’

refrigerators

‘Enriching the Lives of People We Touch’The very first showroom of the Singer Plus channel was opened in 1877 in the heart of Ceylon’s Capital, 26 years after Isaac Merit formed I.M. Singer & Company with New York Lawyer, Edward C. Clark, and 21 years after Clark introduced a Financial Product called Hire Purchase to the world. Back then we had only one product to sell, 'The Sewing Machine', and with so many advances in technology, products, changes in lifestyles we still do sell that same sewing machine, the product that has been the bread and butter of this Company over the test of time. We did however, evolve, understanding that to compete tomorrow we have to change today and kept introducing multi brands and products to our range.

Singer Plus is the hub of the wheel of channels that make-up Singer, by far the largest and widest reaching channel of the Organisation. If one is to develop an index of the performance of the consumer durable segment, the best place to get the relevant information would be Singer Plus. The channel has been through the independence struggle of this nation then a Southern uprising and a civil war that drove the fortunes of this country like a pendulum shifting back and forth, it has survived many economic downturns, many difficult and challenging situations uplifting the image and trust of the Singer Company, always leading from front.

Singer Plus shares a very close and emotional relationship with its customers, the reach of this channel is so huge that there are 281 locations spread in each and every province of Sri Lanka, and is present in every major town. The Branch Manager of a Singer Plus showroom is invariably a prominent and much respected figure in his city, town or village and plays a huge role in building brand equity and brand loyalty.

In the year under review, the Singer Plus channel carried out many direct Below the Line (BTL) programmes that took the brand closer to the consumer, reaching out into far away and laid back locations of the country, with the aim of beginning an early relationship with prospective customers. Singer Plus also spearheaded the 160 years celebration CSR project, assisting schools in need, to complete a project that would uplift the standards of the schoolchildren.

Singer Plus is set to move forward with expansion plans that would further consolidate its position as the market leader in the consumer durable segment safeguarding the attributes of the Singer brand and further strengthening its dominance.



Singer Life Style Exhibition at BMICH

To coincide with Singer Company’s 160th Anniversary of international operations, Singer (Sri Lanka) PLC with its business partners and other industry stakeholders organised a gala exhibition at BMICH from 18th to 20th November 2011. It was one of the best patronised exhibitions in recent times and given wide publicity in all media.

Our customers were able to view our latest products including:

Televisions, Refrigerators, Home Theater systems, DVD & Blu-ray players, Air Conditioners, Kitchen Appliances, Washers, Note Books, Digital Cameras, Mobile Phones etc, under world renowned top marques such as Singer, Philips, Whirlpool, TCL, Skyworth, Hitachi, Prestige, Kenwood, Tefal etc.

Our efforts were well-rewarded with wide accolades from all those who attended this exhibition.

Inspiration for Modern LivingSinger Mega and Singer Homes are the drivers of modern trade in the Singer Group. Be it that, you are planning of building a new house, planning to buy a new wardrobe for your beloved daughter or looking for a gift for your newly married son that would last for generations, Singer Mega or Singer Homes are no doubt the preferred destinations, we are open on days and at times convenient to our customer, and believe it, we deliver a quality product to your home the same day.

In the year 2011, modern trade in Sri Lanka grew to 16%, out of this, the contribution from the consumer durable sector is estimated to be less than 5%, in this very small market segment, the share of both Singer Mega and Homes is substantial. At Singer, we understand

that at the heart of the growth of modern retailing is the ‘consumer’. The Sri Lankan consumer has been influenced by modern lifestyles and hence now demands greater convenience, as global markets continue to evolve with the advent of new brands and expansion of existing brands, we understand the need for wider and more accessible showrooms, with ample parking and convenience. Although, majority of consumers patronising modern trade showrooms are upper income and upper middle-class income consumers, and more of them are brand conscious. We understand that, as the retail landscape and economy of Sri Lanka continues to reshape rapidly, the infusion to this elite segment too is expanding rapidly.

Singer Mega: ‘The big experience’ along with Singer Homes 'Inspiration for Modern Living' intends to introduce new products and develop new markets in the years ahead, whilst penetrating deeper in to the current market segments that we operate in. We differentiate with the range of products, convenience and superior service standards

In the year under review, we carried out many communications and promotional campaigns with the aim of building customer loyalty, these ranged from 160-year anniversary promotions, New Year and Christmas promotions, New Year and Christmas offer catalogue. National and regional events included ‘Punchi Avurudhu Ulela’, ‘Mega Kids Art Competition’, ‘Cookery demonstrations’, ‘Deepavali Celebrations and Christmas Parties’ conducted at each of our locations, the Art Competition culminated at the Art Gallery showcasing the arts submitted at each showroom.

Both Singer Mega and Singer Homes aim to consolidate their positions in the market by focusing on customer care, operational and product training which will enable our sales force to advice our customer better and more diligently in an era where, today’s technology is obsolete tomorrow.



Singer makes happy families



Sisil Grows FurtherThe name Sisil is synonymous with heritage, trust and longevity, a product handed over by one generation to another, by a grandmother to a mother and by a mother to her daughter. Safeguarding this thrust and quality is uppermost in the minds of all of us at Sisil World.

Sisil World grew its distribution network from 40 showrooms to 43 in the year 2011, with new branches being opened in Jaffna, Panadura and Trincomalee. The channel also renovated and relocated some branches to keep in line with the modern retailing concept and to be more convenient for consumers. Sisil World recorded the highest growth in Sales among retail channels of Singer Group recording a 60% growth over prior year indicating the deep trust and brand preference of Sisil’s loyal customers.

Sisil World has successfully differentiated from the rest with their product offering, promotions and customer service; in 2011 Sisil World introduced on board ‘Acer’. Our role is to increase the brand’s distinctiveness in customers’ minds, countering the commoditising pressure of competition.

Sisil World had 3 major campaigns in the year 2011 named ‘Six Sixes’, ‘Gift to Gift’ and ‘Those who desired the Best’ leveraging on the brand diversity and strength, focusing the right target groups. In reality, customers rarely buy a product or service because it offers something unique. Usually, they buy the brand they expect to meet their basic needs a bit better or more conveniently than the competition. What customers usually want is simply better, not more differentiated, products and services. A customer visiting Sisil World will not only have a differentiated product offering but simply a better shopping experience.

Sisil World has elaborative plans to be recognised as a green channel and has already made headway towards this by being the first to initiate biodegradable

It’s youthful technology



shopping bags in the Singer Group. Plans are drawn on a three part impetus with emphasis on lowering the impact on the environment by:

1. Gradually replacing the product range, with energy efficient and environmentally friendly products

2. Channel initiatives such as controlling temperature and use of degradable bags

3. E-waste collection

New Product IntroductionsSinger Re-Launches Hitachi The presence of the prestigious Hitachi brand enhanced Singer’s highly successful multi-brand, multi-product strategy over the years. This re-launch is a testament to the strong relationship the Tokyo-based consumer electronics manufacturer enjoys with Sri Lanka’s largest consumer durables retailer.

With a reputation for putting its customers first, Singer Sri Lanka brings trusted excellence in products and services to Sri Lankan customers through its widespread chain of retail stores. The retail chain has made Singer Sri Lanka synonymous with leading brands and excellent service.

Singer Sri Lanka has also traditionally displayed great sensitivity to its customers, adding products and services that meet their ever-evolving needs. This partnership has always displayed great synergy - the benefits of which have cascaded down to the end-customer. ‘We have no doubt that this will continue in the years to come.’

Hitachi is renowned for its range of home electronics products that range from refrigerators and washing machines to lifestyle items such as LED TVs. Hitachi customers can be assured of the highest quality white goods in the Sri Lankan market with the latest range of minus zero cooling panel refrigerators, nano titanium washing machines, fuzzy control multi-cookers and high-powered bag-less vacuum cleaners.

Televisions 2011 was an extremely good year for the category and the industry with the full year benefit of zero duty and VAT for all Flat Panel TVs below 32”. Demand was also driven by the Cricket World Cup, where the Company had to contend with the main competitor being an event sponsor. The Company was the first to introduce Full HD panels to the 24” LCD/LED panel category which was leveraged through effective advertising campaigns during the World Cup resulting in a sale of over 20,000 TVs in the month of March.

The category recorded a sale growth of 56% despite a drop in volume of CRT TVs.

The Company markets seven brands of televisions of which the biggest brand is SINGER, the others being Samsung, Hitachi, Philips, TCL, Skyworth and UNIC.

A core objective of Singer, a company with a Sri Lankan identity for 134 years, is to be the first to introduce the latest technology to the Sri Lankan market. With the added vision of leading the nation to a new era, we were the pioneers to introduce technologies such as LCD, LED, 3D LED, SMART TV and Blu-ray within the last couple of years.

Delivering full high-definition viewing experience to the customers with a Sri Lankan touch was the ultimate result of all these introductions. Thus in 2011, Singer Sri Lanka was proud to launch the first ever Blu-ray production which was the ‘Lak Roo Soba’ meaning ‘Beauty of Sri Lanka’. This was purely an in-house production by the Company’s very own experts.

Air ConditionersWe introduced 10 new SKU into this category under 03 brands.

Singer - introduced 60000 BTU Floor standing tower type AC and 60000 Ceiling mounted AC.

Samsung - introduced five SKUs and the main campaign was on Virus Doctor.

Samsung Virus Doctor ACs were implemented as an energy saving and health conscious AC.

Whirlpool was introduced with colour panels as a new brand and product.

WashersWe Introduced a Singer 7KG fully auto Washer and a Sisil Semi auto 6.5KG in year 2011. Further to that, we introduced a 9KG semi-auto to cater to the high end and the bigger families under the Whirlpool brand.

Whirlpool Washers were introduced as a new brand of Washers.

A special marketing campaign was launched in the beginning of the year and Singer Washers won a bronze award at the Effie AD award night. This was the first time Singer Sri Lanka has won an award at Effie for advertising.

Digital Media Products2011 was the first year of this new category. Category comprises of computers, cameras and mobile phones. Bringing all the above products under one category has given much needed attention for the new product lines. During the year under review the following new initiatives were taken by the Company to enhance this product range.

Singer All In One PCWe are proud to announce the launch of the Singer All In One PC, the latest trend in personal computers to enhance the life style of Sri Lankan consumers. In this technology, the system unit is integrated to the back panel of the display unit thereby saving space. Due to the absence of a separate system unit, there will be plenty of space saving and what you need is the All In One PC, a keyboard and a mouse. LCD Display and other energy efficient components inside the PC will help the All In One PC to consume 60% less power than a conventional computer.

This All In One PC is the ideal computing solution where space and style matters. All In One PC can be used in homes, schools, offices, computer institutions as well as in point of sales terminals at modern retail outlets. Due to its stylish and compact design this will be the ideal solution for most of our customer’s computing needs.



ASUS LaptopsSINGER launched three new ASUS ranges of notebook computers to complement its own Singer-branded laptops, giving customers even more choice.

The three new ranges include the ASUS-Lamborghini VX7, the ASUS gaming notebooks and the ASUS K Series, each of which is designed to appeal to specific segments of sophisticated computer users.

SAMSUNG Galaxy TabletSINGER introduced SAMSUNG Galaxy Tab mobile communication device to our Retail Channels with state-of-the-art technology offering a portable, rich multimedia experience on a 7-inch display. The GALAXY Tab 7.0 runs Google Android Honeycomb, enabling an easy and intuitive user experience while it delivers a smooth

and powerful performance powered by 1.2 GHz dual core processor. Web browsing is also enhanced in this device and super-fast HSPA mobile connectivity provides download speeds up to three times faster than a conventional mobile connection. This enables voice and video call support, with no need for a headset. GALAXY Tab 7.0 is an ideal device for those who need to stay productive and entertained while on the move.

SAMSUNG Digital CameraSINGER introduced to the market during the year, SAMSUNG digital camera secured a significant 15% market share.

SINGER expanded its new product line, Digital Media category, adding new models of SAMSUNG digital cameras through innovative product features to be upfront with ever-changing consumer needs in the country.

The SAMSUNG MultiView MV800 offers a 16.1 megapixel picture quality, a 5x optical zoom and 26mm wide-angle lens for capturing the perfect shot. It also features a 3.0” wide flip-out display, which enables you to tilt it up and down and frame each shot at any angle, and also a unique smart touch screen technology, for the professional user.

The SAMSUNG SH100, is another innovative design which has built-in Wi-Fi that delivers great shots that enables you to upload your pictures instantly to your social networking sites such as Facebook, Picasa or Photo Bucket, or email them to individual email addresses straight from the camera.



New Brand Introductions in 2011 Skyworth - TelevisionsSkyworth is one of the top three bands in China for television brands.

Godrej - RefrigeratorsGodrej is one of India's leading refrigerators brands.

Dawlance - RefrigeratorsDawlance is leading refrigerators brand in Pakistan.

Symphony - Air Coolers Symphony Cooler Fans will be supplied by Symphony India Ltd.

Symphony is Number One Air Cooler brand in India. Symphony Air Coolers are sold in 50 countries worldwide and has established itself as the World Leader in Evaporative Air Coolers.

KDK - Branded Fans KDK is one of the world Leaders in producing high-quality and high-performance ventilation products.

Outdoor Motion Detector for PowerMax + Security SystemSinger launched a new add-on to the PowerMax+ Security system from Visonic, the world’s #1 manufacturer of wireless security systems. The latest product, an outdoor motion detector expands the safety of users’ security zones by leveraging a number of unique innovations, such as the ability to detect suspicious human movement and adapt to extreme weather conditions.

PureitAccessibility to clean water is a right each and every human being is entitled to. At times where global warming has become a major issue, threatening the water resources and also harming the purity of existing drinking water channels, Singer identified the need to develop a product category that would enable our consumers to enjoy the right to clean drinking water. Singer provides the Unilever PUREIT water purifier at an affordable price, identifying the need for people with meager incomes also to poses a purifier; Singer introduced affordable hire purchase schemes for this super product.

Agricultural ImplementsTwo Wheel Tractors/Generators and Paddy Threshers The growth of ‘Farm Master’ tractors was steady in the year 2011. The sales were affected by adverse weather conditions of the first half of the year which hampered cultivation. However, the second season was good for tractor sales.

With the introduction of Singer Power generators, the Company has achieved a 24% volume growth in comparison to year 2010.

Water PumpsDomestic and Agro Water Pumps Total water pump unit sales grew by 22.7% in comparison to YTD 2010 and domestic water pump unit sales grew by 29%.

The sales growth was mainly achieved by high frequency media campaigns, distribution expansion, competitive pricing, attractive easy payment schemes and Government funding, and positive outlook of the agricultural sector.

The Company expanded its scope in the water pumps category in the year 2011 by introducing several new products. Singer bare shaft water pumps were introduced to the agricultural water pumps category, and the domestic water pumps category was further strengthened by quality improvements whilst maintaining competitive prices to offer the value proposition ‘affordable excellence’.

To increase the product range and strengthen the domestic water pumps category, the Company will introduce submersible pumps in the first half of the year 2012 and several new models for the existing range of water pumps.

Transportation ProductsMotor Cycles and Bicycles Transportation products had mixed fortunes in the year 2011. The Company markets motor bikes and bicycles in this category.

With the introduction of Lumala bicycles, the Company achieved a substantial revenue growth in the year 2011 in comparison to year 2010. This growth was experienced due to high concentration in the Northern and the Eastern Provinces. We expect this growth to continue in the future years too. The major contribution is from the models Lumala Ladies bicycles and Lumala Standard bicycles.

Motor cycles category performed below expectations due to the closure of Kinetec Factory in India and the resultant discontinuation of the brand. However, the Company is expecting to revive the motor cycle product category in 2012 by introducing Singer branded mopeds and scooters of 80cc, 100cc and 125cc, and 90cc super cubs. Arrangements in this regard have already been initiated.



New Customer Conveniences‘SINGER EXPRESS PAY’ Bill CollectionsAs the reigning “People’s Brand of the Year”, Singer has built its success on the strength of its relationships with Sri Lankan consumers. Singer is continually exploring ways of improving the lives of its customers, giving them an unbeatable array of products and services at a conveniently close location or at the ‘Door Step’. It has now leveraged the reach of this unrivalled retail network through its SINGER EXPRESS PAY service, which allows customers to make a wide range of Bill Payments, including Credit Card, Mobile Phone, Insurance, and Utility Bills, at any one of its 351 retail outlets.

Customers at any time can walk into a Singer Plus, Singer Mega, Sisil World or Singer Homes retail showroom or Singer Satellite Showroom anywhere in the country and make their bill payments quickly and conveniently. They can rely on the same superior standard of customer care and service that has won Singer its reputation for ‘Trusted Excellence’. With extended opening hours on week days and also on weekends, Singer retail outlets can provide its services to the customers, than the customer’s own bank or service provider’s operating hours. Month-by-month progress by SINGER EXPRESS PAY service is a testament to its overwhelming success, popularity and convenience.

Singer’s commitment to building customer relationships is mirrored in the partnerships it has developed with the companies and institutions involved in the SINGER EXPRESS PAY service. Many of Sri Lanka’s leading companies have signed up with Singer to give their customers an added dimension of professionalism and convenience.

These partners include financial services companies such as American Express, HSBC, Janashakthi Insurance, Singer Finance, Union Assurance and Western Union Money Transfer, national utilities companies such as the Ceylon Electricity Board and the National Water Supply and Drainage Board, and Telecommunications and media companies such as Airtel, Dialog, Etisalat, Lanka Bell, Sri Lanka Telecom and Mobitel. The SINGER EXPRESS PAY counter gives customers the flexibility to pay their Credit Card Bills, Leasing Instalments, Utility Bills, Post-Paid Mobile Bills & Mobile Re-Loads, as well as receive their Western Union Money Transfer Remittances.

These corporate partners are only one part of Singer’s association with some of the world’s best brands. SINGER EXPRESS PAY gives its customers the convenience, innovation, and service that they deserve.

ImprovementsDigital ammeters were fixed to the pumps assembly line in the Agro factory.

A separate dust collecting system for CNC machines in the furniture factory - Furniture factory operates centralised dust collecting system with 50hp motor. To expand the present system for new machines, it requires over 75hp motor, instead, we installed a separate dust collecting system with a 15hp motor where CNC machines are able to run independently. This has enabled us to reduce the electricity cost.

R&D department in the Furniture factory was renovated.



Singer Mega and Singer Homes are positioned to give the consumer a big experience



Singer Retail Academy

Singer being a multinational company with a 160 year history, our customers expect and deserve the best from us. In order to give them the best, continuous improvement and investment in our single most important asset - our people is essential. As a part of this commitment, the Singer Retail Academy (SRA) has implemented consistent human resource standards such as hiring, orientation, career planning and remuneration applicable across management staff to shop assistants.

One of the main aspects of SRA is the balance scorecard by which the performance of shops, districts and areas and will be evaluated, based on performance criteria such as sales, collections, merchandising, inventory, administration and profitability.

The balance scorecard is linked to the annual rewards scheme, enabling an evaluation criteria that takes into consideration a holistic view of important performance criteria of a retail sales manager/showroom. Also, this will assist the organisation to find gaps in training and conduct focused, specific training programmes. Further, this will serve as an overall performance monitoring dashboard for the field supervision staff where they can proactively work on.

As per the Singer SRA there are 20 training modules which we offer to different levels of field staff depending on their job scope. The concept of a training passport has been introduced to closely monitor the completion of the training modules required under the given job categories.

Once the required number of modules has been completed according to their job specification, a Singer Retail Academy Diploma will be awarded in order to recognise their competencies.

In order to expedite the knowledge transfer process, the HR division forwards a weekly theme to all locations covering various aspects such as operational matters, product information, motivational and inspirational materials which serve as a supporting tool for the morning meeting which will be conducted at every location each morning.

Singer Finance (Lanka) PLC

Singer Finance (Lanka) PLC is a 75% owned subsidiary of Singer (Sri Lanka) PLC and registered as a finance company with the Central Bank of Sri Lanka.

The principal business activities of SFLL are the acceptance of deposits from the general public and financing of Leasing and Hire Purchase facilities to the SME and other sectors in the country.

During the year, the Company disbursed Rs. 6.8 billion loans which helped to increase the capital formation of the nation and contributed in creating jobs, especially in the rural sector.

Singer Finance surpassed the revenue mark of Rs. 1 billion during the year which was a significant milestone.

Singer Finance recorded pre-tax profit of Rs. 284 million and an after tax profit of Rs. 176 million for the year 2011 which was an increase of 52% and 96% respectively. The Company’s deposit base was Rs. 2.7 billion which was an increase of 62% compared with last year.



The asset base of Singer Finance was Rs. 6 billion at the end of 2011, this was an increase of 41%. Main reason for growth of Balance Sheet was due to high growth in the lending portfolio which grew by 48% during the year.

The Company’s Capital Adequacy Ratio has increased to 18.75%, which is well over the minimum 10% ratio required by the Central Bank. The Company follows a strict provisioning policy for non-performing loans, far more stringent than the requirements stipulated by the Central Bank. The Company maintains probably the lowest NPL ratio in the industry which was 0.3% at the year end. This was the outcome of prudent credit policy and continuous follow-up and vigilant post-credit activities.

Over the past 8 years, Singer Finance (Lanka) PLC has engaged in the financing of all types of capital goods and agricultural equipment as well as products marketed by Singer (Sri Lanka) PLC. Today, the Company has eight fully-fledged branches and eight unique service centres located at the Singer Plus outlets in the North, North Central, Uva and Southern Provinces. These service centres are one way by which the Company reaches out, providing the highest quality of service to outstation and rural customers. Singer Finance is also involved in group sales to employees of various institutions, in both public and private sectors.

The Company’s eight branches and eight window operational units are linked to the Head Office through a state-of-the-art online system that delivers a hassle-free and efficient service to its loyal customers. The Company has also implemented a robust off-site Disaster Recovery System

that maintains mirror records of all database transactions, ensuring that customer information is always secure in case of an emergency. Singer Finance is committed to the highest standards of customer convenience and has partnered with Singer (Sri Lanka) PLC, the country’s largest retailer, to accept hire purchase and leasing rental payments at 351 of its showrooms. This facility is especially useful to outstation residents who have limited access to banks.

Fitch Ratings Lanka has reaffirmed Singer Finance (Lanka) PLC’s National long-term rating to ‘BBB+(lka)’ in December 2011, ‘The outlook is stable’. The Company’s staff strength has increased to 140 at the year end, and we believe in hiring and retaining quality human resources in order to provide an excellent service to our valuable customers and also to ensure that the Company grows on a solid platform of trusted excellence adding value to the enormous brand strength of ‘Singer’.

The Singer Fashion AcademyThe Academy concluded the year 2011, with a student population of over 4,500, from all over the country. The skills of our students were featured this year too at the annual fashion show which was patronised by more than 300 fashion enthusiasts; four main lines of clothes were featured at this event and won the admiration of all the participants. At this event, 110 of our students who successfully completed their Diplomas received certificates.

Continuing our efforts to contribute to our society, this year too, we undertook many projects focusing on underprivileged youth. 126 scholarships were awarded to underprivileged youth, two from each fashion academy to help them enrich their lives. Ten differently able youth with special needs were given a specialised course in sewing crafts.


In order to educate the public about The Singer Fashion Academy, more than 40 workshops were conducted free of charge all over the country, attracting students in numbers to our academies. Taking fashion outside of our classrooms, we conducted many projects with various NGOs spread throughout the country.

It is with great pride and gratitude to all our Academy staff and benefactors, that we confirm that our Academies have gained recognition and fame beyond the borders of Sri Lanka attracting many international students, who today, follow various courses in fashion designing.

A Voice - heArd Across the NAtioNEvery ‘note’ we sound in enterprise is carried far and wide across the

country via one of the widest distribution networks in Sri Lanka. There’s bound to be a Singer somewhere close.

Chilaw

Mannar

Anuradhapura

Jaffna

Ampara

Batticaloa

Kurunegala

Galle

Matara

Matale

BadullaNuwara Eliya

Moneragala

Gampaha

ColomboBattaramulla

Horana

MathugamaKalutara

Kegalle

Kiribathgoda

Ambalanthota

Hambanthota


Financial Review

Our Voyage to GloryIn this year when Singer celebrated its 160th Year of international operations, the Singer Group in Sri Lanka set in motion the circle of growth and reached many a milestone creating history in its illustrious voyage in the country. The underlying volume growth accelerated in 2011 to boost our revenue to Rs. 22 billion or 37% over prior year and highest ever in its history. We set out to reignite volume growth and grow ahead of our markets. In turn this helped us to achieve overall financial excellence with a robust performance, we moved in line with our consistent long-term model of top and bottom line growth, achieving another first by crossing the Rs. 1 billion mark at the bottom.

The journey towards achieving this monumental success is filled with many strategic and operational success stories. From a single brand and product company, the Company today boasts of the widest choice of products and brands available under a single canopy. Singer is unmatched in product options, quality, reach, availability, customer service, post sales care and multiple payment options. This is not our unilateral boast but

The following discussion and analysis should be read in concurrence with the Audited Consolidated Financial Statements of the Group and the Company for the year ended 31st December 2011. In this Report, ‘Group’ refers to Singer (Sri Lanka) PLC and its subsidiary company, Singer Finance (Lanka) PLC and affiliate company Reality (Lanka) Ltd. and ‘Company’ refers to Singer (Sri Lanka) PLC.

07 2011 Results in Perspective

what our customers say, when they said it loud and clear for the 7th consecutive year, that ‘Singer is the Brand of The Year’.

Revenue growth was derived singularly through organic growth and it should be noted that Singer Group recorded over 35% revenue growth for two consecutive years despite price reductions in line with market trends. Our volume growth in year 2011 was above 44%.

The phenomenal increase in revenue cascaded to bottom line of the Group delivering stakeholder expectations. Group net profit for the year was also the highest ever recorded, amounting to Rs. 1.3 billion, a growth of 95% over prior year. Being one of the oldest multinational organisations in the country, it was a very satisfying milestone to reach, Singer Group joining the elite Rs. 1 billion net income group. Aside from volume gains, key drivers of this performance were - relatively low interest rate regime, lower or zero tariffs for most consumer durable products, lower turnover related taxes and business oriented healthy income tax regime.

Rs. billion

22Volume growth accelerated in 2011 to

boost our revenue to Rs. 22 billion

Rs. billion

1.3Singer Group joined the elite Rs. 1 billion

net income group

2011 Results in Perspective


3.1% in year 2010 while economic growth of many emerging and developing economies slowed down by 0.9% from 7.3% in year 2010 to 6.4% in 2011.

During the second quarter of 2011, oil prices increased more than 25% above the former levels in January 2011. Overall, food prices remained high in real terms compared with averages over the past few decades.

In the year under review, Singer Group faced both positive and negative consequences due to global economic trends. Increase in oil and food prices

Since the beginning of the global crisis in 2007, each year seemed to be more challenging than the previous, this trend continued to year 2011. The global economy was in a turbulent phase, Global activity weakened and became inconsistent, business confidence fell sharply and downside risks are still growing. Japan was struck by the devastating Great East Japanese earthquake and the tsunami and political unrest swelled in some oil-producing countries.

Global GDP grew by 4% in year 2011 against 5% in year 2010. Economic growth of advanced economies further slowed down and reported 1.6% growth against

impacted the Sri Lankan economy negatively and resulted in our having to curtail product price increases, as consumer spending power was affected, however, this had a minimal impact on business growth in the year 2011. Negative growth of advanced economies had an opposite effect on us, as it resulted in stable exchange rates which reflected in price stability of our imported products during the year. Excess production in emerging economies, especially China, created opportunities to negotiate on prices and achieve sizeable supply chain cost reductions in year 2011.

Global Economic Reverberations

Sri Lankan Economic Landscapeaffected by floods in the Eastern province in the first quarter of the year.

The annual average inflation as measured by the Colombo Consumer Price Index (CCPI) (2006/7 = 100) had reached

6.7% in December 2011, from 5.9% in December 2010. It was commendable that annual average inflation steadied at mid-single digit level in two consecutive years. In addition to the above developments,

Conclusion of the conflict and stable political environment in the country radically improved the security situation, resulting in the nation being one of the safest destinations, boosting confidence among local and foreign investors. Especially tourism, agriculture, fisheries, financial services and construction industries took off with positive spillover effects on several other sectors of the economy. There were continuous favourable changes in the local economic landscape, macroeconomic factors such as lower interest rates, low inflation and relatively stable exchange rates were all positive contributors in 2011.

The GDP growth rate for year 2011 is estimated close to 8.3%. Sri Lanka reported over 8% GDP growth in two consecutive years. The Industrial sector is estimated to have shown a high growth of 10.1% followed by 8.6% for service sector and 2% for agricultural sector. Agriculture was partly

4%Global GDP grew by 4%

in year 2011

2011 Results in Perspective


Basis of Preparation and Comparative FiguresThe Group Financial Statements for 2011 include the Financial Statements of Singer (Sri Lanka) PLC and Singer Finance (Lanka) PLC together with the share of profit or loss of associates, calculated on the equity method. The Company Financial Statements represent the Financial Statements of Singer (Sri Lanka) PLC only.

Income Revenue Group revenue was Rs. 22 billion, which surpassed prior year’s by Rs. 6 billion (37.3%). Revenue of the Company for the year increased from Rs. 15.2 billion to Rs. 20.9 billion, an increase of Rs. 5.7 billion (37.9%).

The economy and the consumer durable markets continued to be buoyant and moved to an aggressive growth phase in year 2011. The market expansion was further bolstered by positive effects of the external environment and healthy economic climate at home as explained above. Singer Group celebrated its 160 Years of global presence in year 2011. Celebrations to mark this event were our main marketing theme during the year. Most marketing promotions and communications put behind our products revolved around this. In addition, Singer Group took an advancing approach to harvest market opportunities, a good mix of both above the line (ATL) and below the line (BTL) advertising campaigns were bridged into the marketing communications plan during the year. Company strategically expanded its operations by penetrating key emerging markets, whilst consolidating its operations in the core market segments. We increased the intensity of our promotions and market penetration strategies in suburban and rural areas, which was an enriching and fertile exercise. In addition to the market opportunities, building over the wide distribution network, expanding on the range of products and choice of brands, multi channel offering, continuous and

uninterrupted supply chain, continuous flow of production and supply from the Company’s and sister company factories and a well directed, aggressive sales force were the backbone of the notable performance by the Group.

The Cricket World Cup enhanced the demand for televisions in the first quarter and this trend continued due to technological change from traditional CRT televisions to LCD, LED, Smart television and 3D televisions. The Company introduced a wide range of new technology LCD, LED, Smart televisions and 3D televisions at affordable prices to

Sri Lankan Economy - How it Affected Singer GroupUndisputably foregoing developments in the Sri Lankan economy had an affirmative impact on Singer Operations. Conclusion of the three decade old conflict drastically improved the security situation across the country. This created access to pristine market segments, where there remained an unsatiated demand for basic household appliances. Singer Group grasped this hiatus and continued the development and expansion plans in both the Eastern and the Northern Provinces. Growth in GDP, relatively low inflation and increase in workers’ remittances had a favourable impact and increased consumer spending power which had a direct bearing on sales growth. Lowering or zero tariffs for most consumer durables and lower turnover related taxes and stable exch

the world’s top brands find a home with us...portfolio, or ‘songbook’ is one of great quality...

Documents