Annual Report 2012 - SINGER SL Files · Audit Committee Report 138 Remuneration Committee Report...

Sing

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2012 Results in PerspectiveSinger Group sustained its growth momentum in year 2012

Page-44

THE SINGER STRENGTHS

Singer over the years...building unique strengths and presence in a highly

competitive environment.

Chairman’s letter... it is hoped that Sri Lanka will be able to stretch the post-war peace dividend and sustain prosperity for its people. Page-7

Encompassing the futureA Year of Great Achievement in Social Responsibility SpherePage-56

Group Chief Executive Officer’s ReviewWe continued to position ourselves to be the preferred consumer durableretailer...Page-8

The foremost Home Appliance Retailer in Sri Lanka, offering over 50 renowned brand choices to its consumers, with a loyal customer base spread across the country from North to South and East to West, catered to by a strong network of retail showrooms and dealers and backed by the strongest of after sales service…

The Singer StrengthsSinger’s proud legacy as a state of the art business entity was not built on chance. Rather, it owes much to the development of six key strengths - our Brand, Distribution network, Credit facilities, Service regime, People power and cutting edge Systems. In tandem, these strengths have created a forward momentum across the Company that in turn has stimulated stakeholder interest and ‘movement’ around Singer and its products and services. It’s an enviable portfolio of strengths we possess, which in turn has allowed us to reach and fulfil stakeholder expectations. This report celebrates these strengths as the force behind our enterprise and the wind beneath our achievements.

Singer (Sri Lanka) PLC Annual Report 20122

Contents4 Group at a Glance

5 Financial Highlights

7 Chairman’s Letter

8 Group Chief Executive Officer’s Review

12 Board of Directors

20 Saga of Our Unabated Journey

44 2012 Results in Perspective

54 Encompassing the Future

98 The Way We Manage

132 Protecting Ourselves

137 Audit Committee Report

138 Remuneration Committee Report

Financial Reports

141 Annual Report of the Board of Directors on the Affairs of the Company

146 Statement of Directors’ Responsibility

147 Independent Auditors’ Report

148 Statement of Comprehensive Income

149 Statement of Financial Position

150 Statement of Changes in Equity

152 Statement of Cash Flows

153 Notes to the Financial Statements

204 A Decade in Perspective

205 Share Information

208 Subsidiary/Associate Companies

209 Singer Distribution Network

210 Service Network and Fashion Academy

211 Glossary of Financial Terms

212 Notice of Annual General Meeting

Enclose Form of Proxy

Chairman’s Letter

Page 7

The market economy could not retain the buoyancy of the past two years when record growth rates of 8% were experienced. The markets grew on the back of a relaxed monetary policy when credit to the business sector grew by 34%.

Page 21

Page 31

Page 27 Page 28

Page 35 Page 54

Annual Report 2012 Singer (Sri Lanka) PLC 3

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 ValuesConsumersWe 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.

EmployeesWe respect each other as individuals and encourage cross functional teamwork while providing opportunities for career development.

ShareholdersWe provide a reasonable return while safeguarding their investment.

SuppliersWe develop our suppliers to be partners in progress and we share our growth with them.

CompetitorsWe respect our competitors and recognise their contribution to market value.

CommunityWe conduct our business by conforming to the ethics of our country and share the social responsibility of the less fortunate.

EnvironmentWe 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.

Page 8

We are happy to inform that the Revenue of Singer (Sri Lanka) PLC group reached Rs. 25 Billion.

Group Chief Executive Officer’s Review

Profit after Tax

Yet another year in joining Rs. Billionaire Club in bottom line

Rs. 1.2billion

6

On-line Users

> 450,000

This year we picked up a slew of prestigious accolades at the Best Corporate Citizen Awards held by the Ceylon Chamber of Commerce.

We do things right while doing the right thing…The Senior Management Team appears on the thematic pages.

Encompassing the Future

Page 54

Page 44

Group at a Glance

29 Extension and 50 modernisation of outlets

On Line and Mobile users

Over 450,000

Singer dots the map of Sri Lanka…and our footprint keeps growing day by day

Singer Staff

1,475

Jaffna

Mannar

ExtensionModernisation

Puttalam

Colombo

Kalutara

Matara

Hambanthota

Galle

Ampara

Batticaloa

Anuradhapura

Trincomalee

Vavuniya

Kilinochchi

Polonnaruwa

Kurunegala

Kegalle

Gampaha Nuwara Eliya

Matale

Kandy

Badulla

Monaragala

Ratnapura

Household Users

Over 3 million



Financial Highlights

2012 2011 Increased/Rs. ’000 Rs. ’000 (Decreased) %

Group Revenue - Net 25,372,963 22,031,653 15.2

Net Finance Cost 954,965 497,625 91.9

Share of profit/(loss) of Equity Accounted Investees (Net of Income Tax) 5,778 (639) 1004.4

Profit before Tax 1,746,225 1,990,012 (12.3)

Profit for the Year 1,193,437 1,308,831 (8.8)

Stated Capital 626,048 626,048 –

Revenue Reserve 3,778,757 3,421,739 10.4

Revaluation Reserve 773,312 655,454 18.0

Non-Controlling Interest 356,692 255,995 39.3

Total Equity 5,613,235 5,003,643 12.2

Property, Plant & Equipment - Net 2,151,208 1,691,107 27.2

Investments 69,725 63,947 9.0

Net-Current Assets 945,759 1,120,941 (15.6)

Gross Dividends* 751,258 939,072 (20.0)

Dividend per Share - Rs. 6.00 7.50 (20.0)

Dividend Payout Ratio - % 74.4 80.2 (7.2)

Earnings per Share - Rs. 9.09 10.11 (10.1)

Price Earnings Ratio - times 12.69 14.18 (10.5)

Net Assets per Share - Rs. 44.83 39.96 12.2

Market Value per Share - 31st December - Rs. 102.30 132.70 (22.9)

Net Income to Net Turnover - % 4.70 5.94 (20.9)

Return on Average Net Assets/Equity - % 22.48 28.73 (21.8)

Debt Ratio - % 73.80 71.33 3.5

Gearing Ratio 0.35 0.32 9.38

Interest Cover 2.83 5.00 (43.4)

Dividend Cover 1.51 1.35 11.9

Current Ratio 1.07 1.11 (3.2)

Acid Ratio 0.75 0.77 (2.6)

* Includes authorised Final Dividends of the Company.

Group Revenue

2011Rs. 22,032 million


Total Equity



Total Assets



…it is hoped that Sri Lanka will be able to

stretch the post-war peace dividend and

sustain prosperity for its people.



Chairman’s Letter

Dear Shareholders,

The market economy could not retain the buoyancy of the past two years when record growth rates of 8% were experienced. The markets grew on the back of a relaxed monetary policy when credit to the business sector grew by 34%. To regain macroeconomic stability, the Central Bank imposed a ceiling on lending by the banking sector to 18% of the previous outstanding. The vagaries of weather, first a drought followed by floods, devastated the rice harvest. These two factors were the prime underlying reasons for slower growth in 2012 at 6% (Estd). Singer performed creditably growing at 15% while slowing down in the 2nd half as markets fell on sluggish growth patterns.

Credit restrictions are now lifted and the weather patterns expected to be predictable, signaling a recovery for the life blood of the nation, the agricultural sector. Economy is expected to grow at a faster rate provided fiscal deficits and inflation can be reigned in. It is relevant that the successful completion of Sri Lanka’s stand-by agreement facility (SBA) with the International Monetary Fund (IMF) with an outlay of US$ 2.5 billion helped to re-build external reserves, maintain monetary stability and fortify the domestic financial system during a turbulent post-war period when the economy tended towards overheating. With macroeconomic fundamentals realised, it is hoped that Sri Lanka will be able to stretch the post-war peace dividend and sustain prosperity for its people.

Market Demographics Traditionally the Western province produced 50% of the national growth. Dominance of the Western province is diminishing and the contribution from other provinces to the GDP is on the rise. With Western province slipping to 45% Central, Southern and North Western provinces have edged upto double digits, while the North and the East are reawakening after a long hiatus. Though we are a far cry from an egalitarian society, poverty alleviation and inclusive growth have helped distribute wealth more evenly across the nation.

Singer has great depth in the outer provinces, where its historical presence among masses has left an indelible mark on the discerning customer vis-à-vis trust, endurance and deliverability. However, while Sri Lanka has seen a reduction of inequality at the aggregate level over recent times, more than 50% of national income is still derived by the richest 20% of households and a majority of those households sit in the Western province. The battle for market shares will continue to be fought in the opinion leading theatre of the Western province. Singer has responded by bifurcating this province into more sales zones, which should result in focus on new townships, gated communities and apartment lifestyles, respectively. With the burgeoning “Singer Mega” and “Singer Homes” coming of age, accompanied by the advent of the re-styled modern “Singer Plus” store format, we now portray the outlook of a modern retailer in the metros, attracting affluent consumers and young adults for greater share in urbanised markets.

Our Brands and ChannelsSinger is in an envious position of controlling many powerful world class brands. Are we returning to an age where Brand loyalty and equity will influence the purchasing decision as against lowest price or ‘loudest’ gadgetry? Another cyclical “shake out” of marginal brands is in the offing. Entry point brands need ridiculously low pricing or huge ‘marcom’ budgets to breakthrough and neither strategy is sustainable. Nature of the Sri Lankan market, its smallness and discerning character dissuades a new entry from a foray and established brand champions will ensure protecting of their shares. However, my comments are restricted to the consumer durables market, as each category has its own peculiar characteristic.

It’s taken a longtime for Singer’s internal management to accept the value of a multi channel retailing format. Advantages of multiple channels are many, the ability to encircle competition with a multitude of tactical ploys is synonymous. “Singer Plus” continues to strengthen with geographical expansion. “Singer Wholesale” ‘controls’ major dealers who are building their own regional network which is an emerging phenomena. While we can link onto their customer base, whether they will emerge as competitors to our traditional channels with similar brands is yet to be seen. The leveraging of the heritage “Sisil” brand, a white goods icon via the “Sisil” channel is an opportunity we will explore as plans to expand the channel depth in 2013 will provide more opportunities and be a perfect defense mechanism to new white good intrusions.

I believe that the multi-channel strategy that was conceptualized at the turn of this century to meet the emerging modern retail challenge will be vindicated in the next 3 year cycle.

Acknowledgement On behalf of the Board of Directors, I wish to congratulate the Chief Executive Officer, Management Team and Staff for another excellent year’s results. Due to the changing environment before us the management must be prepared to face greater challenges in sustaining growth rates in 2013. To my fellow colleagues on the Board of Directors it has been another stimulating year for all of us and I thank you once again for your valuable insights, guidance and support as you bring your varying skills from diverse fields onto the boardroom table and to you our shareholders as you continue to repose confidence in us.

Sincerely,

Hemaka AmarasuriyaChairman

28th February 2013Colombo

Chairman’s Letter



Dear Shareholders,

We are happy to inform that the Revenue of Singer (Sri Lanka) PLC group reached Rs. 25 Billion. However, the group Net Profit for the period decreased by 9% in 2012.

The EnvironmentThe year 2012 was a tough year for businesses as the economy and consumer sentiments were affected by the sharp devaluation and sharp increase in interest rates, electricity and fuel costs. In addition in the third quarter, the drought destroyed part of the harvest and resulted in power cuts and shortages of water for consumers in some districts while floods affected some districts in the final quarter.

It was commendable that the government budget in November 2012, re-confirmed the strategies and policies to make Sri Lanka a hub for shopping.

The environment continued to have rapid changes, including the entry of new players to the market and exit of others. The technological changes and the customer preferences too were rapid. As an example, during the year the LCD televisions became an obsolete product, being taken over by LED televisions. In 2011, in our mix of computers the percentage of laptops was 42%. In 2012, it was 56%.

Our Strategies and ObjectivesWe began the year with two main objectives - firstly the growth of revenue and net income and secondly, the continuation of improvements to our products, brands, channels and infrastructure. While we pursued these objectives during the whole year, from the middle of the first quarter, with changes in the business environment, we also pursued defensive measures such as focusing on collections and control of inventory, etc. All these are elaborated below.

The Financial Results for the yearWhile I would not go into details, as this is given in the Result in Perspective, it is important to list significant areas in this review.

Group Revenue was Rs. 25.4 billion which was an increase of 15% while the company revenue was Rs. 23.85 billion, which was an increase of 14% over the prior year. The revenue growth was on top of the growth level of 2011 and in a challenging year, we could be happy with this growth.

We had two challenges in improving our Profitability. First was the challenge in economic conditions. Second was that we had a big growth in profit in 2011 and to keep up to it.

The Group Profit before tax was Rs. 1.75 billion which was a decrease of 12%. The company profit before tax was Rs. 1.47 billion was a decrease of 16%.

The Group Net Profit for the year at Rs. 1.2 billion represented a decrease of 9% over the prior year. The Company is Net Profit at Rs. 1 billion was a decrease of 14%.

Although the profits decreased over 2011, we also need to view it in the context of the big increase in profits in 2011. If we compare the 2012 Group Net Profit After Tax, with 2010, it is 78% higher and the 2012 Company Net Profit After Tax compared with same in 2010 is 138% higher.

The Company adopted the Sri Lanka Accounting Standards (SLFRS/LKAS) in the current year and in accordance with the reporting format discloses the comprehensive income. The total Group comprehensive income for the year was Rs. 1,320 million compared with Rs. 1,308 million in the prior year, mainly due to revaluation of property plant & equipment.

Medium Term Prospects for Consumer Durable IndustryAlthough the immediate year was challenging the prospects are good for the industry in the medium term due to the following:

Firstly, as the economy grows and the standard of living improves, consumer durables tend to grow at a higher rate than other sectors of the market.

Secondly, the government has a plan to make Sri Lanka a Retail Hub, so that consumers from our neighbouring countries will come to Sri Lanka to shop for small consumer durable items, such as cameras, laptops, LED TV’s, etc.

Thirdly, rural electrification will enable more and more people to use consumer durables. Consumers, who did not have the opportunity of using a refrigerator or a television, will now get the opportunity of using same when these houses get electricity.

Fourthly, in the consumer durable industry, especially in electronics there is a rapid development by way of improved features and lower costs. The additional features and lower costs will attract more and more consumers to buy these products.

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

One of our thrust product sectors are the Digital media/Communication sector consisting of computers, phones, cameras, etc. This sector revenue grew by 30% in 2012. Singer has already established itself as a leading player in computers. Although computer unit sales decreased by 9% due to price hikes, in the 4th quarter imports to Sri Lanka, Singer branded computers was placed second. During the year, we have got the agencies for Samsung and Lenovo brands for laptops and these are expected to strengthen our product offering.

We re-introduced retailing of mobile phones, selling Samsung and Nokia in 2011. In 2012, we got the agencies for HTC and Huawei brands greatly strengthening our presence in the sector. Our mobile phone unit sales increased by 420%, while camera unit sales increased by 189%, both from small bases.

In an environment of customers changing

their lifestyles and preferences,

we continued to position ourselves to be the

preferred consumer durable retailer…

Annual Report 2012 Singer (Sri Lanka) PLC 9Group Chief Executive Officer’s Review


Another trust sector is Furniture and this sector revenue grew by 39% in 2012. This was due to increasing our distribution, introduction of new models including a Teak range of furniture and improvements to our manufacturing.

In other product sectors too, Singer introduced new product lines, new brands and new models.

The new products introduced in other sectors in 2012 included induction cookers and sprayers. The new product lines introduced in 2011 were consolidated and resulted in good growth in 2012. These included air coolers which grew by 373%, over prior year, blu-ray players which grew by 123%, gas cylinders which grew by 441%, water dispensers which grew by 90% and water purifiers which grew over 40 times.

The new brands introduced in other sectors included Godrej and Dawlance for refrigerators and Onida for televisions. In February 2013, the Group also introduced the Beko and Grundig brands from Europe. Beko is the third largest white goods brand in Europe.

The new models included high end televisions under Singer brand, such as Singer 3D televisions; the new GEO series of refrigerators under the Singer brand made by our associate company. The new refrigerator series uses the latest R600A gas which is the gas recommended now for refrigerators and has an enormous electricity saving. We are introducing it as Green advantage – advantageous for the consumer and the environment; Singer branded active speaker range and Singer branded motor cycles and Singer vacuum cleaners; we also introduced Sisil rice cookers, Sisil multi-cookers and Sisil fully automatic washing machines. These were in addition to periodic upgrades and replacements of existing models.

A key event started in 2011, the Singer Lifestyle Exhibition, which showcased the vast array of our products and brands to the public, was held once again at the BMICH in Colombo. It was a grand success once again with tens of thousands of consumers packing the exhibition over the three days.

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

We continued to have our dominant media presence and below the line activities and built 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 our Revenue growth in a challenging year.

Because of the devaluation of the Rupee, we had to increase prices. Although devaluation took place rapidly our price increases were spaced out and done in stages. The increase in prices had an impact on the unit sales and customer demand.In the case of white goods revenue increased by 19% with refrigerators, air conditioners and fan unit sales increasing by 9%, 15% and 28%, while washing machine units decreased by 6%.

In case of sewing, revenue increased by 11% although in terms of units there was a decrease of 1%.

In case of electronics, revenue decreased by 1%. LCD/LED television units increased by 22% while CRT television units decreased by 50%. As mentioned last year the Cricket world Cup boosted TV sales in 2011. DVD unit sales reduced by 24% as the new LCD/LED televisions have a USB port, which now enables consumers to use a USB instead of a DVD. Audio unit sales declined by 19%, while Home Theatre unit sales increased by 55%. Kitchen related products revenue increased by 14%. Significant unit sales growth was on Rice Cookers (27%) and Microwave Ovens (88%).

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

Revenue grew in all channels and was very strong in the Singer Mega, Singer Homes and Institutional Sales channels. Singer Plus channel opened 20 new outlets including Satellite showrooms, upgraded 10 Satellite showrooms to Singer Plus showrooms while Sisil World channel opened 6 new showrooms and Mega channel opened 1 new showroom and Singer Homes opened 2 new showrooms during the period under review. Of the total expansion of 29 new showrooms, 5 were in the North and East provinces. In addition, the company renovated 50 showrooms providing highest merchandising standards which will be compatible with market developments in the future as well.

The Wholesale network too continues to be strengthened with new dealers joining our network.

Some new channels were introduced in the current year. The most significant is the Digital Media channel. This works through distributors and reaches small outlets selling mobile phones and cameras. The other channels were the Central Air Conditioning channel and a channel to sell furniture to wholesale dealers.

Financial Services and CreditUnder Financial Services, customers can now pay utility, credit card bills and insurance premiums at Singer shops and also collect funds remitted through Western Union and upload funds for mobile cash. Four new utility/insurance / mobile cash companies were added to our list during the year. During the year, Financial Services volumes increased by 42%, while the number of transactions grew by 18%.

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.

As the economy tightened we increased our efforts on collections providing additional manpower support for collections and by increasing the use of our Call Centre. We had a tremendous boost to support our collections via SMS reminders as explained below. Due to all these efforts our collections remain at a very high level.



Human ResourcesThe company places great emphasis on its Human Resources and more details are given in the sustainability supplement. 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 staffs.

After Sales ServiceSinger continued to have the best After Sales Offering to the consumers in Sri Lanka. This was strengthened with a new Regional Service Centre in Polonnaruwa. An additional Regional Service Centre will be opened in Kuliyapitiya in 2013.

ManufacturingThe manufacturing division of the company consists of Agro and Furniture factories. The turnover of the manufacturing division increased by 21%. Production of domestic pumps increased by 20%, sofas by 22% and solid furniture by 66%. New products were introduced to the market including Teak range of furniture and modular high gloss pantry units and low cost wardrobes. The sofa production was changed from Batch to Line and the layout of the Agro factory was changed. A repair and service centre for furniture was set up in the factory.

ERP SystemsThe ERP system is now complete. We continue to make 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. This system was enhanced to send out reminders to customers via SMS on their installments due for payment and further enhanced to send marketing and promotional news via SMS to our customer data base. We are the first retailer in Sri Lanka to have receipts through SMS and among very few institutions able to communicate to their customer data base via SMS.

Our Director - Information & Technology was placed overall in charge of Information & Technology for Singer Asia. One of our Senior Managers also took up appointment at Singer Asia to pursue new business development. It is an honour for us and we wish them the very best in their new roles.

Singer Finance (Lanka) PLCThe company’s subsidiary Singer Finance (Lanka) PLC continued to improve its business volumes. Its revenue increased by 40% while the net profit grew by 43%. The lending portfolio in December 2012 had a 21% growth over the prior year. Singer Finance (Lanka) PLC opened a branch in Embilipitiya in 2012 and converted service outlets in Tissamaharama, Thambuttegama and Nikaweratiya to branches in early 2013. The company opened

a new service outlet in Giriulla in 2012. The company took over hire Purchase lending operations at some of the Singer Mega outlets and increased its focus on consumer durable group sales with a view to converge on the strengths of the parent company.

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 95 and Singer is very proud to have achieved the No. 2 position in the Best Corporate Citizen Award as well as being Sector Winner - Social: People and CSR as well as Category Winner - Community Relations and CSR.

VAT on Retail SectorIn the November 2012 budget, the government announced an extension of VAT to the Retail sector.

Although the legislation has not been enacted, the administrative notices mentioned that the input VAT as at 31st December 2012 will be disallowed. This goes against the very principle of value added tax and we urge the authorities to allow the deduction of input tax as at 31st December 2012 against output tax payable.

Further in order to have a level playing field the authorities should consider reducing the threshold level.

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 in challenging market conditions. There was exceptional contribution across all ranks and all divisions and departments in the Group.

I also thank the Chairman for his continued guidance, support and the encouragement in overcoming challenges.

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




Board of Directors


Joined 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., Chairman of National Development Bank PLC and NDB Capital Ltd., Bangladesh. Mr. Amarasuriya holds Directorates in Bata Shoe Company of Ceylon Ltd., Bata Exports (Pvt) Ltd., Equity Investments Lanka Ltd., TNL Radio Network (Pvt) Ltd., ACL Cables PLC, 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.

Dr. Gamini C.B. WijeyesingheDirector

Joined 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 (Pvt) 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 Sri Lanka, Member of the KPMG, Asia Pacific Board and FAPA (UK) (retired).

First President of the Charted Institute of Marketing UK - Sri Lanka region.

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.


Dr. Saman KelegamaDirector

Joined 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 and Member of the Management - Postgraduate Institute of Management (PIM).

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.

Deshabandu Ajit JayaratneDirector

Joined 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 Co. PLC, Colombo Fort Investment PLC, Colombo Fort Investment Trust PLC, Colonial Motors PLC, York Arcade Holdings PLC, Mireka Capital Land Ltd. and Kotagala Plantations PLC.

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 and Wales.

Is a Fellow of the Institute of Chartered Accountants of Sri Lanka and was admitted to its Hall of Fame and conferred the Lifetime Achievement Award in 2012 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.

Board of Directors


Gavin J. WalkerDirector

Joined 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.

John J. HyunDirector

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

Mr. Hyun is the 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, 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.

Peter O’DonnellDirector

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

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

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

Board of Directors


Asoka PierisDirector/Group Chief Executive Officer

Joined 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. Vice-President of Singer Asia Ltd. and Retail Holdings N.V.

Prior to the present appointment, Mr. Asoka Pieris worked in Hong Kong as 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.

V.G.K. VidyaratneAlternate Director

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

Director of Regnis (Lanka) PLC, Regnis Appliances (Pvt) Ltd., and 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.

Board of Directors


Nasser MajeedAlternate Director

Joined 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.

Priyath SalgadoAlternate Director

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

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

Mahesh WijewardeneAlternate Director

Joined 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.

Immediate past Chairman of the Ceylon Chamber of Commerce - Import Section. Past Chairman of the Sri Lanka-China Business Council.

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

Board of Directors


Kumar SamarasingheAlternate Director

Joined 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 and MBA from University of London.

A.C.M. IrzanSecretary 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


ThE BRand STREngTh aRE adding mORE and mORE…When a mega brand opens the door to a multi-brand marketing strategy...you get SINGER…one strong brand channelling products of the world’s top brands to the widest of customer bases.


Indika Gunathilake, Mohamed Fairoz, Dhammika Wijesundera, Dhammika Guruge, Vajira Tennekon, Asantha Karunaratne

(Left - Right)


Whenever…wherever…I can surf, tweet, tag my friends or simply skype with my laptop. It’s versatile, smart and convenient.

Saga of Our Unabated Journey

Another year rolled by on a very satisfactory note. Despite operating in a more stringent macroeconomic environment, both locally and globally, we are very pleased with our achievements which give us confidence to face the future filled with justifiable optimism.

There are good reasons for our optimism. Our dedicated, committed and well trained team with its ‘Never say die’ spirit and our loyal customers who have stood by us over the years, are at the forefront in this regard.

Our team is aptly described by Raymond Barry who said “The most prepared are the most dedicated”. About our loyal customer base, we are reminded of the famous saying “You don’t earn loyalty in a day. You earn loyalty day-by-day”. Being in possession of these two invaluable assets, contributed in no small measure to our performance in 2012.

Compared to prior year, we were operating under more difficult economic conditions. In this situation we demonstrated that ‘Loyalty’ is a reciprocal responsibility. We held our prices as low as possible, weathering most economic burdens. Our customers responded magnificently by buying more Singer quality products, thus boosting our revenue to an all time record of Rs. 25.4 billion.

With a long and proud history behind us, we will now guide you through our main operational activities during the year, which will provide an insight into what we have done to make your Company more stable and enable us to guide it towards sustainable growth in the years ahead.

When you have a dream you’ve got to grab it and never let go.Carol Burnett

Annual Report 2012 Singer (Sri Lanka) PLC 21Saga of Our Unabated Journey


Year at a GlanceOperating Highlights and Significant Events

FebruaryReopened newly renovated Singer Plus showrooms - Sooriyawewa, Wellawatta and Deniyaya

The Annual Marketing Convention 2012 was held on 15th February at the Waters Edge - Battaramulla.

First Sisil World Convention was held on 22nd February 2012 at the Waters Edge - Battaramulla.

MayUpgraded satellite shop in Kochchikade to a Singer Plus Showroom. Reopening of newly renovated Sisil showroom in Battaramulla.

The official launch of ‘ARTMATRIX’ brand Office Furniture.

AugustOpened the new showroom:Singer Plus - Point Pedro

Reopened following newly renovated showrooms:Singer Plus - Homagama, Ja-Ela, Dambulla, Kekirawa and WeliweriyaSinger Mega - Mount LaviniaSisil World - Borella

Singer Fashion Academy rewarded its best students through a grand awards ceremony on 23rd August 2012 at Bishop’s College Auditorium.

Singer wholesale channel celebrated its 25th anniversary on 24th August 2012.

JanuaryUpgraded two satellite shops as Singer Plus showrooms - Ganemulla and Bandaragama

Reopened newly renovated Singer Plus Showrooms - Yakkala, Medawachchiya and Matara B

AprilReopening of following newly renovated showrooms: Singer Plus - Nikaweratiya, Polgahawela and Anuradhapura C

The official launch of ‘DAWLANCE’ brand refrigerators.

JulyOpened the new showroom:Sisil World - Mathugama

Upgraded two satellite shops to Singer Plus - Medirigiriya and Buththala

Reopened following newly renovated showrooms:Singer Plus - Horowpathana, Tambuttegama and BibileSisil World - ThalawathugodaSinger Homes - Kotte

JuneOpened following new showrooms:Singer Plus - Kalmunai B and WakaraiSisil World - Narammala and Wattala

Reopening of newly renovated Singer Plus showroom in Dehiattakandiya.

The Official launch of HUAWEI Brand Smartphones, Tablets and Mobile Phones.

SeptemberThe satellite shops got upgraded as Singer Plus Showrooms - Padiyatalawa and Anamaduwa

Reopened following newly renovated showrooms:Singer Plus - Maharagama, Avissawella and Athurugiriya

Opened new regional service centre in Polonnaruwa

The official launch of ‘ONIDA’ brand LED TVs.

MarchOpened following new showrooms:Singer Plus - GothatuwaSisil World - KuliyapitiyaSinger Homes - Kadawatha

Upgraded two satellite shops as Singer Plus Showrooms - Rambukkana and Polonnaruwa

Re-opened following newly renovated showrooms.Singer Plus - Kirindiwela, Gampaha, Minuwangoda, Hikkaduwa, Galle A, Maradana and Peradeniya

Sisil World - Pelmedulla, Mahiyanganaya and Matale

The official launch of ‘GODREJ’ brand refrigerators.

Singer Annual Dealer Convention was held on 23rd March 2012 at Waters Edge - Battaramulla.



OctoberOpened the new showroom:Singer Plus - Valaichchenai

Reopened newly renovated showrooms: Singer Plus - PeliyagodaSisil World - Digana and Kadawatha

DecemberOpened the new showroom: Singer Homes - Godagama

Reopened following newly renovated Mega store and showrooms:Singer Mega - Duplication RoadSinger Plus - Kegalle, Negombo, KatubeddaAgalawatta, Kalutara A and Kalutara B

NovemberOpened new Mega Store:Singer Mega - Malabe

Opened the new showroomSisil World - Chilaw and Tissamaharama

Upgraded satellite shop as Singer Plus - Kataragama

Reopened following newly renovated showrooms: Singer Plus - Veyangoda and PanaduraSisil World - Gampaha and Kalutara

Held the “Singer Lifestyle Fiesta” consumer durable exhibition and fair for the second consecutive year.

More time in my hands…thanks to my Singer washing machine. It’s energy efficient and provides powerful cleaning with a gentle touch.

Our Brand PowerSinger has transformed in to a marketing powerhouse with a total of 46 product Brands and over 15 service Brands.

SINGER - Trusted excellence SINGER the corporate, retail and product brand has been chosen by the Sri Lanka consumers as their most popular brand (Peoples’ awards) time after time ever since SLIM and AC Nielsen researched brand popularity in Sri Lanka. SINGER has won this award in the overall category as well as the most popular consumer durable brand in year 2012. In addition to this the SINGER brand has been rated as one of the few AA+ brands in Sri Lanka and is valued at Rs. 4.9 billion by Brand Finance PLC.

Brand development has been the cornerstone of SINGER’s growth strategy in Sri Lanka from the late 1980’s. The equity built around the SINGER brand enabled the company to stretch the SINGER brand across many categories from the iconic sewing machine to high tech 3D LED Televisions, all-in-one computers, white goods, furniture, water pumps and bicycles. This was achieved through brand development of products, retail and corporate through ATL, BTL, sponsorships, CSR and 360 degree interaction with consumers day in day out.



This effort has paid off handsomely with the association of SINGER brand with Sri Lanka cricket, Schools rugby and the Bradby Shield the blue ribbon of rugby as well as the association of prominent brand ambassadors with SINGER like Sunil Perera , Bhathiya and Santhosh to name a few.

‘Trusted Excellence’ continues to be the brand promise evidenced by SINGER’s uncompromising commitment to provide an excellent pre and after sales service to the Sri Lankan consumers across the social spectrum.

SISIL - The Cooling SpecialistThe Sisil brand was the first refrigerator brand to be manufactured in Sri Lanka 50 years ago. Having purchased the brand in the year 2000 the company has leveraged the strength of the brand with a dominant share in refrigeration, kitchen appliances and a significant share of the washing machine category.

Sisil brand strength has also been leveraged by the Company in which the retail sphere with 49 SISIL WORLD showrooms Islandwide.

The SISIL Brand promise remains its iconic status as the pioneering heritage brand of home grown refrigerators.

SAMSUNG - Turn on TomorrowRecognised as one of the top brands in the world valued at over UDS 32.0 billion and growing 40% in 2012 is also the No. 1 in Smart phones and LED TV’s globally. SAMSUNG is truly a giant among global brands. With new products launched frequently SAMSUNG is rapidly gaining ground in Sri Lanka with high brand recognition in urban areas.

Naturally it is the fastest growing brand within the company’s stable of brands.

Whirlpool - The World’s Best HomemakerThe American brand which invented the washing machine is still recognised as the largest Appliance brand in the world and continues to be a big revenue contributor to the Company.

Hitachi - Inspire the NextHitachi brand is valued at over 16.0 billion USD and has grown in value by 13%. Hitachi the largest Electric company in Japan and among the top 100 companies in the world manufactures very high quality refrigerators with innovative technologies. The choice of discerning customers Hitachi is a big value contributor to the Mega channel.

TCL- The Creative LifeTCL is one of the fastest growing brands in China and is the 3rd largest TV manufacturer in the world. TCL brand has gained the trust of Sri Lankan customers.

Philips - Sense and SimplicityValued at over USD 6.0 billion and rated AA+ Philips remains the favorite of technology buffs having invented several core technologies in electronics. Philips audio products have been re launched in the second half with very promising results.

UNIC the brand was acquired in 2006 and is fast growing brand in audio visual categories.

The company boasts an extensive brand strength in the Kitchen appliances category with Kenwood, Prestige, Moulinex, Tefal, & Krups as well as Rowenta in Home and personal care.

With the companies vision to be the foremost retailer we partner with the strongest and brands like SONY, Quantum, Black & Decker, Yamaha and Lumala among others add muscle to the retail offering of SINGER.

The many accolades won by Singer Sri Lanka are proof of its dedication to giving customers the very best in products and services. For example, Singer Sri Lanka has once again been lauded as ‘Brand of the Year,’ and ‘Consumer Durable Brand of the Year’ at the SLIM Nielsen Peoples’ Awards.

This commitment to giving customers what they want is shared by Singer, which is able to offer Sri Lankans an unbeatable range of global brands, products and services. With over 381 retail outlets island- wide, the Company is able to reach millions of Sri Lankans.


‘Big Becomes Bigger’ - Singer Mega Grows FurtherIn keeping with our commitment to serve our customers better, we opened new Mega Show Rooms at Malabe and expanded and refurbished two existing showrooms at Duplication Road and Mount Lavinia.

Singer Mega Channel grew 29% over prior year with only one addition to the channel in November. Singer Mega Mount Lavinia and Duplication Road showrooms were recently refurbished and ceremoniously re-opened to give customers the biggest shopping experience ever. The newly renovated store features the widest range of world-class brands and the very latest products. The luxurious look and feel of the new store allows customers to shop in comfort and ease.


Hire purchase operation was successfully transferred to Singer Finance in six Singer Mega locations during the year 2012.

A new TV commercial was made for Singer Mega under the theme “The Biggest shopping experience ever”, adding a new signature tune to the brand. New retail KPIs were introduced to measure performance of the channel which were evaluated at monthly review meetings.

New promotions were carried out increasing shop traffic to the showrooms. E.g. Mega Hampers, super cruise, Kenyan safari and Disneyland promotion, Tour promotion to Hawaii and Hamper promotion in December 2012.

Singer Mega represents 14 showrooms in the main city of Colombo, Kandy and Gampaha districts.

We bring a brilliant home cinema experience to countless Sri Lankans everyday with our range of home theatre systems packed with innovative features and stylish designs.



Singer Mega recently opened a brand new Mega Store at Malabe.

Singer Homes opened new showroom at Godagama.

Singer Plus opened new showroom at Wellampitiya.

Appreciating the first customer of Singer Plus at Point Pedro.

Newly Renovated Singer Homes at Kotte.

Home Away From Home - Singer HOME News

Singer Homes represents 14 showrooms island wide giving customers a unique shopping experience as a wide range of sofas & living room suites, bedroom suites, dinning room suites, pantry cupboards, wardrobes, children’s furniture & many more products encouraging them to improve their lifestyles.

We greatly expect to enhance the life style of all our customers in selling SINGER furniture to them. Providing them with high quality products over our competition for a competitive price is our main scope in the year 2013.

In 2012, we recorded a significant growth of 23% over 2011.



Singer PlusSinger Plus is the hub of the wheel of channels that make-up Singer, by far the largest and widest reaching channel of the Company. If one is to develop an index of performance of the consumer durable segment, the best place to get the relevant information would be Singer Plus. Singer Plus shares a very close and emotional relationship with its customers, the reach of this channel is so huge that there are 304 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. Singer Plus channel opened 20 new showrooms including satellite shops, upgraded 10 satellite shops to Singer Plus showrooms and renovated 40 new existing showrooms. The Singer Plus channel carried out many 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 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.

Our range of dining room suites helps you to make that perfect dining room for eating and entertaining.



offers” for the T-20 world cup cricket season and ended the year with very successful consumer promotion called “Hondama deta Hondama Thegi”.

Sisil World partnered” Kedella - Living in Style” exhibitions in Colombo and Kandy with an idea of showcasing the newest product range to the discerning customers. On going product demonstrations, displays and many new additions to the channel were shown to the public through these events.

In year 2012 Sisil World held the first ever convention to recognise the high performers during the year.

New ProductsAudio/VideoIn the year 2012 the Company filled in the product gap in this product and introduced new, seven Audio models ranging from Android/I phone docking stations to DVD Hi fi systems under Philips Brand. Apart from this we also introduced three more models under SONY Brand to enhance the port folio.

Home theater is a another emerging category and the Company increased the offering from entry level speaker system to latest 3D Blu ray Home theaters. The range was increased to 8 models. We sell under Philips/Samsung/Singer Branded Home theaters.

Sisil World Grows In StrengthSisil World, taking forward the differentiation strategy consolidated their position in the market as consumer durable retailer providing world class brands in a very friendly shopping atmosphere. Brand Sisil added the local flavor to Sisil World expanded the product range by adding new Side by side refrigerators, range of rice cookers, multi cookers and water filters to give more choice to Sisil World consumers. Channel recorded a growth of 15% over the prior year. When considering the past three years Sisil World has recorded a threefold growth since 2010 to 2012.

Sisil World started the year with distribution strength of 43 showrooms and expanded their reach to 49 showrooms during the year. New showrooms were opened in Kuliyapitiya, Narammala, Wattala, Matugama, Tissamaharama and Chilaw. Many branches were refurbished to be in line with Sisil World’s modern retail strategy to give their valued customers a more convenient shopping experience.

Sisil World had four major campaigns in year 2012. Started the year with “ Sisil Wonders” targeting the Sinhalese new year season,” Gift to Gift” for the mid year, “Sisil World Power Play

Mixing work and pleasure…with our powerful mobile computing.



Singer is the market leader for DVD category. With the emergence of Blu ray disc the company took the initiative of introducing 5 models ranging from basic Blu ray player to 3D Blu ray players under brand name of Singer/Samsung/Philips. TelevisionsSinger Sri Lanka in partnership with Indian consumer durable giant Onida to provide the Sri Lankan market with 3D and SMART LED TVs.

Singer will exclusively distribute Onida’s world-class range of modern TVs through its island- wide retail network. Onida has often been voted as the top most trusted consumer durable brand in India.

Personal ComputersSinger Sri Lanka, a key player in the local PC market and a well-known name in household appliances, has taken the lead in introducing a series of touch enabled Windows 8 all in one (AIO) devices to Sri Lanka.

On the heels of the Windows 8 launch, Singer Sri Lanka PLC, a named account partner of Microsoft, unveiled four Windows 8 enabled devices, becoming the first to make Windows 8 enabled devices commercially available to Sri Lankan consumers as well as small and medium businesses (SMBs) across the country.

With this novel move, Sri Lankan consumers will be able to purchase the brand new Windows 8 enabled devices locally and share the unique and exciting experience of Microsoft’s Windows 8 operating system which is creating waves across the world.

Kitchen AppliancesThe Singer ECO Thermo Pot (Hot Cup) is the latest addition to the Singer Kitchen appliance range. The Eco Thermo Pot is a handy water boiler that delivers boiled water in less than a minute. This easy to use appliance saves energy and offers boiled water at the touch of a button.

“Not only is it fast, it’s considered more efficient than a standard kettle or hot water heater because it needs to be “on” only for the duration it takes to boil a cup of water. It is ideal for instant cups of tea and other hot beverages. Singer introduced Induction Cookers, this is a modern cooking utensil and which has 85% Energy efficient product addition to that we introduced:

Litro Gas Cylinders from our retail showrooms for convenience of customers who purchase Gas Cookers from us and package on easy payment scheme first time in Sri Lanka. This helped average income earners to purchase gas cylinders and gas cookers at the same time and improving their quality of living standards.

New Marketing Programs and InitiativesGPS Navigation SystemRecognised for introducing essential and superlative products to the local market, Singer will be the new marketer and distributor for the CityGuide GPS Navigation System in Sri Lanka, starting from November 2012.

The System was developed by Myriad Digital. The product will be available across the country in Singer Mega, Singer Plus and Sisil World stores for vehicle owners to experience the fantastic benefits and value of a GPS navigation system.

Singer Cooking Festival at Bandarawela & Ratnapura towns - We have introduced Culinary programmes for Singer Loyal Customers and public by using latest cooking appliances at selected major towns. These programmes were conducted by leading culinary experts in Sri Lanka. These programmes will continue in 2013 covering all major towns.

Singer products were introduced at three Cargills large format outlets.

Digital MediaDigital media was the youngest and most exciting category of the year. Which started only with singer branded computers, Asus computers, Samsung digital cameras and phones were at infant status.

During the year the Company decided to add more mussel to the business by way of adding new products, new brands, new categories and new distribution channels.

New Brands from Digital MediaDuring the month of June the Company added its new star Huawei brand which was the 6th largest smart phone brand of the world. During the third quarter Huawei smart phones that emerged as the world’s 3rd best smart phone manufacturer according to vendor and market data compiled by TomiAhonen Consulting Analysis.* Huawei smart phones took the world by storm this year with 16 million devices sold across the globe, sealing Huawei’s impressive position as the third best mobile device in 3Q12, internationally. Huawei has done well to manufacture its own processors while building some of the parts for the devices in-house. Both these aspects as well as widespread customer satisfaction have contributed to Huawei’s enviable success and the brand’s quick ascend from the eighth position in the world to becoming number three.

The Huawei range that is currently experiencing unprecedented success across the globe includes feature phones, smart phones powered with Android Operating system. The full range of Huawei phones are now available across Sri Lanka in over 381 showrooms of Singer Mega, Singer Plus and SISIL World stores



and more than 700 dealers island wide. Singer is extending a 2-year warranty to all Huawei smart phone buyers.

The most unique and technologically advanced features which modern mobile device users demand are available through the Huawei series. Huawei’s customer focused ethos has resulted in a device that is intelligible and uncomplicated. The sleek dimensions and designs of the phones also make the Huawei range a must-have accessory of the new generation.

With a Huawei phone there is an endless array of mobile applications on offer such as Facebook, Twitter, SMS, MMS, Email, Push Mail, IM and Radio, Document and Photo Viewer/ editor, making it a worthwhile investment.

HTCHTC was founded in 1997 by Cher Wang, H.T.Cho and Peter Chou. Initially a manufacturer of notebook computers, HTC began designing some of the world’s first touch and wireless hand-held devices in 1998. The Company has a rich heritage of many “firsts”, including creating the first Microsoft-powered smartphone and the first Microsoft 3G phone. Their first major product was made in year 2000 and was one of the world’s first touch screen smartphones.

In the 2011 Best Global Brands rankings released by Interbrand, HTC was listed at No. 98 and valued at $ 3.6 billion. Singer is the only agent in Sri Lanka to distribute HTC Brand mobile devices and customers can purchase international HTC branded mobile devices in any of Singer Mega, Singer Plus and Sisil Show rooms.

We provide a range of refrigerators with pull-drawers to keep you ultra-organised. They are stylish and packed with smart features.



TabletsIntroduced this new category during October 2012. From the beginning tablet was a success. This started with Samsung galaxy tab and went on to Huawei Media pads and it’s latest addition Huawei Media pad lite.

Digital Media ChannelTo take the products to mobile phone resellers, the Company developed a new channel called “Digital Media”. Channel works with 10 distributors and more than 700 retailers to sell Huawei phones and Samsung cameras

Customer Convenience and Financial Services

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 a Door Step Service. 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 Cards, Mobile Phones, Insurance and Utility Bills, at any of its 381 retail showrooms scattered islandwide.

Putting the world at your finger tips…stay connected and simplify your life with our latest range of smart phones.



Customers at any time can walk into a Singer Plus, Singer Mega, Sisil World or Singer Homes retail showrooms or any satellite shops anywhere in the country and make their bill payment 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. Due to the fact with extended timings on week-days and also on week-ends, Singer retail showrooms 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 HSBC, Singer Finance, American Express, Standard Chartered Bank, Union Assurance, Janashakthi Insurance Chartis Insurance.

Bringing a touch of class to your living room…we help you create that welcoming and comfortable ambiance to entertain your friends and family.



National Utilities companies such as the Ceylon Electricity Board and the National Water Supply and Drainage Board are on board. Among the Telecommunications and media companies Mobitel, Sri Lanka Telecom, Dialog, Etisalat, Lankabell and Airtel. On with the payment side Singer Express Pay is also continuing with a Foreign Remittance Money Transfer such as Western Union Money Transfer. For this service SINGER has tied up with NDB Bank who is acting as the Principal Agent. The Singer Express Pay counter gives customers the flexibility to pay their Credit Card Bills, Leasing Installments, Utility Bills, Post-Paid Mobilephone

Bills & Mobilephone Re-Loads, as well as receive their Western Union Money Transfer Remittances. The new partners that joined with Singer Express Pay for 2012 are Standard Chartered Bank, Suntel Re-load & Bills which is presently under Dialog, Dialog Broadband Network & Ezi Cash business, Janashakthi Insurance & Chartis Insurance.

Total number of transactions grew over prior year by 8% and total value of collections increased over 2011 by 42%.

We help you get the kitchen you’ve always dreamt of, with our sophisticated range of kitchen appliances.



Singer Finance (Lanka) PLC

Singer Finance (Lanka) PLC (SFLP) is a 80.4% owned subsidiary of Singer (Sri Lanka) PLC and registered as a finance company with the Central Bank of Sri Lanka. Principal business activities of SFLP 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. 6.5 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. 1.65 billion during the year which was a significant milestone. Singer Finance recorded pre-tax profit of Rs. 350.8 million and an after tax profit of Rs. 242.7 million for the year 2012 which was an increase of 16% and 43% respectively. The Company’s deposit base was Rs. 2.8 billion.

The asset base of Singer Finance was Rs. 7.4 billion at the end of 2012, this was an increase of 24% and the resilience the Company showed by increasing the leasing portfolio while maintaining a very low NPL ratio when the economy slowed down during the last three quarters of the year is commendable and reflects the high credit quality of its assets base. Main reason for growth in the Balance Sheet was due to high growth in the leasing portfolio which grew by 73% during the year. The Company’s Capital Adequacy Ratio has increased to 27.29%, which is well over the minimum 10% ratio required by the Central Bank.

The Company raised its Share Capital from Rs. 800 million to Rs. 1,445 million during the year through a fully subscribed Rights Issue of Rs. 645 million, thus making the Company one of the most liquid companies in the finance Industry.

The financials prepared and presented in this report are in accordance with Sri Lanka Accounting Standards (SLFRS/LKAS) which have materially converged with the International Financial Reporting Standards (IFRS). As this is the first time that the Company is publishing under the new IFRS guidelines, the previous year’s financials have been restated for comparative purposes. The report also covers the key policy changes as required for first-time adoption, thus becoming one of the first finance companies to prepare its financials under the new Sri Lanka Accounting Standards issued by CA Sri Lanka.

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 NP Ratio the industry which was 0. 61% at the year-end. This was the out come of prudent credit policy and continuous follow- up and vigilant post-credit activities over the past 9 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 ten fully-fledged branches and nine unique service centres located at 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 ten branches and nine window operational units are linked to the Head Office through a state-of-the-art online system that delivers hassle-free and an efficient service to its loyal customers.

The Company has also implemented a robust off-site Disaster Recovery System that maintains mirror records of all data base 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 381 of its showrooms. This facility is especially useful to outstation residents who have limited access to banks.

Fitch Ratings Lanka has re-affirmed Singer Finance (Lanka) PLC’s National long-term rating to ‘BBB+ (lka)’ in November 2012,‘The out look is stable’. The Company’s staff strength has increased to 191 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 rows on a solid platform of trusted excellence adding value to the enormous brand strength of ‘Singer’.

Singer Finance surpassed the revenue mark of Rs. 1.65 billion during the year which was a significant milestone.



Singer Retail AcademyAs Singer is a multinational company with more than 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 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 in 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 have 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.

We make relaxing more enjoyable. Our TVs are the perfect size delivering unbeatable detail, colour and contrast.



Advancements In Our IT Capability

Singer, being the largest home appliance and electronics Retailer in Sri Lanka with the widest network of 381 showrooms spread all over the country is now on a single system, IFS ERP solution, enabling the entire branch network to act as a Single business unit serving the nation with crystal clear visibility in all aspects of the business. For all key users, the system has provided a platform to spend more time being strategic as the mundane day-to-day operations have been made click-of-a- button. With the roll-out of the ERP solution to all 381 showrooms outlets the system stands tall as the largest web-based ERP ever deployed in Sri Lanka and the largest single IP/VPN network in Sri Lanka. It is a major mile-stone in the IT industry in Sri Lanka in terms of show-casing the capability and capacity of the IT industry as a whole by becoming the center of excellence for IT systems for large scale retail networks.

Bringing over 1000 users spread all over the country running hundreds of different synchronised ERP processes into such a large system was no-doubt a challenge which required hard work and dedication of all the Executive and staff members of Singer Sri Lanka .

The ERP solution proactively guides the entire business process to work cohesively and seamlessly bringing considerable savings in all aspects providing actionable on-line visibility to the entire business. It has enabled the entire branch network to function as one large virtual shop providing access to the entire product and services of the whole network accessible seamless from any branch. At any given moment of time, Singer head-office has the touch of a button visibility on every aspect of the business enabling cock-pit type of control on every branch in the island. There is seamless down-ward flow of products and services in the channels of branches and an efficient up-ward flow of cash and information between different control and operational

business units. We do continuous improvement on the ERP and the latest addition was the SMS module integrated to the ERP which enables us to send direct messages to the customer regarding Collections reminders, Promotions etc.

Having the right system in place provided the right strategic operational capability for Singer to expand their business over the coming years.

Our Distribution Centre

The state of the art Distribution center commissioned in 2004 is now equipped with modern equipment such as Dock Levelers and Lifting tables to increase the efficiency of loading and unloading operations.

Having installed a modern racking system in our main warehouse we are now planning to have a similar system to our part section initially covering the ground floor and to expand same to a mezzanine floor to increase the storage facilities to accommodate shipments of spare parts for new introduction of brands and models to provide a better service to our customers.

Distribution center management is very much concerned of the system & controls with the rapid growth of the company and the decision has been taken to further strengthening the system of CCTV cameras by adding 14 more cameras covering all loading points and key locations in addition to the 38 cameras installed at present in the premises of the distribution center.



The ISO 9001 - 2000 standard obtained in year 2005 for the activities of distribution of consumer durable products and spare parts receiving, inventory controls, issuing and transport processes have been re-certified as meeting the requirements of the ISO standard and been upgraded to ISO 9001 2008.

Distribution center is one of the key contributors to the Company’s Green initiative program and employees are actively

contributing towards collection of E waste from the Company collection centers, storing and handing them over to relevant authorities for disposal same.

Distribution center too actively participated for CSR projects initiated by the company in 2012.

Get a good night’s sleep with our range of bedroom furniture designed to bring comfort, space and elegance to the coziest room in the house.



Singer Life Style Exhibition

Singer (Sri Lanka) PLC with its business partners and other industry stakeholders organised a gala exhibition at BMICH from 16th to 18th November 2012. 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, Washing Machines, 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.

Ignite that creative passion in you with our reliable, versatile and easy to use sewing machines packed with a variety of options.


Annual Report 2012 Singer (Sri Lanka) PLC 39Saga of Our Unabated Journey


The Academies successfully conducted several Exhibitions & Sales and Fashion Shows where the students were given the an opportunity to showcase their talents.

Apart from meeting the student needs, the Academy plays a significant role in the promotion of the Singer Sewing Machines. At the Academy the students have the hands on experience of using the Singer Sewing Machines, thus opening the door to a sizeable market. In the Sewing Related business of the Company, a unit of importance is the Singer Fashion Academy

Sewing Projects The first project was conducted in June to September 2012, involved the participation of thirty (30) students. This programme was of three months duration and was funded by Child Fund Organisation, Talawakelle. This programme and the other was conducted by the sewing instructress, Nuwara Eliya, for the benefit of the plantation sector. A special syllabus was introduced which covered tailoring, patch work, painting and handicrafts etc.

The second project was funded by the Tea Field Organisation, Black Pool which was also for a period of three months involving twenty participants (20) and the course covered all aspects of tailoring.

On the request of the Basil Rajapaksha Foundation, we are conducting an ongoing project to help and increase the knowledge of the above students in sewing and also as an encouragement to start small scale businesses of their own. Those selected, were from different areas in the Gampaha electorate. This particular group (823) was divided into thirty-three, depending upon their location and slotted into sewing programmes which last for a period of four or five days per week. An initiative was taken to formulate a specific syllabus for them and the project is conducted free of charge. All necessary material is provided by the foundation.

The Singer Fashion Academy

The Singer Fashion Academy has successfully completed over 57 years. Commencing with a few Sewing Schools, the Department at 2012, has 65 Singer Fashion Academies spread throughout the country. An average of 3000 students per month, attend the Academies and are provided with various aspects of Sewing Skills. Over 20 Sewing Courses, including two Diploma and Certificate Courses are available to those intend to qualify professionally.

The Courses are designed to accommodate the enthusiasts, hobbyists and professionals seeking employment, self-employment or aspiring to proceed for higher studies in designing. The Courses are reviewed every year and are upgraded, and new courses introduced to satisfy the needs of the students.

The Singer Fashion Academy is now recognised by the Tertiary and Vocational Education Commission of the government.

Get the Green advantage…proudly made in Sri Lanka.



Singer Fashion Academy Instructresses’ Training WorkshopFour day workshop was held at Singer Sri Lanka Management Office and was conducted by Lyceum Academy for Teacher Education for two days. The main aim was to train them and as it consisted of learning principles, Understanding the learners needs, concept to be understood (Train the Trainer) and presentation activities.

The workshop was conducted by Professor Sarath Perera , Mr. W.K.G.Welivita and Mr. W.L.R.Gunawardene.

Annual Award Ceremony & Fashion Show 2012Our Annual Award Ceremony & Fashion Show was held on 23rd August 2012 at the Bishop’s college Auditorium with the participation of approximately five hundred, which included students, their parents, Singer staff, and guests.

Along with the Awarding of the Diplomas to the students who graduated in 2012, a fashion show was organised to display the talents & skills of our Instructresses and students. The Fashion Show included five segments viz . Kandyan outfit, Saree, Office wear. In addition a casual and beach wear for children was presented. All the out fits were stitched by Singer Fashion Academy Instructresses and their Students which were deemed extremely elegant by those present. The Chief guest at this function was Mr. Asoka Pieris who is the CEO of Singer (Sri Lanka) PLC. This also marked the first occasion where certificates were issued for those who completed the Basic course in Computer studies.

Singer Call Centre

We were the first consumer goods retailer in Sri Lanka to set up a call centre. Operating year round from 9 am to 6 pm, we record all telephone conversations in order to assure our customers of our accountability. Following table gives the volume of traffic attended to by our staff.

2012 2011

Call Volume

Inbound 96,578 93,360

Outbound 139,613 80,305

Total 236,191 173,665

Type of Outbound Calls

Welcome Calls 83,051 56,347

Arrears Follow Up 6,878 1,357

Others 49,684 22,601

Number of Staff 10 7

Average Number of Calls/Staff 28,343 24,232



ThE STREngTh Of PROducT PRESEncE iS invaluaBlESinger operates one of Sri Lanka’s widest multi-point distribution strategies that gets its products and services to more customers across the land than ever.


Ananda Manoratne, Russel De La Motte, Premalal De Silva, Chandana Samarasinghe, Ruwan Singhabahu, M. Mahesharatnam,

(Left - Right)


2012 Results in Perspective

Financial ReviewThe 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 2012. 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.

PreambleSinger Group sustained its growth momentum in year 2012 despite the fact that the economy and consumer sentiments were affected by the sharp devaluation of the Rupee and sharp increase in interest rates, electricity and fuel costs. These adversely impacted the consumer sentiments and the buying power of the consumers. In addition, the drought destroyed part of the harvest and also caused powercuts and shortages of water for consumers in some districts in the first half of the year, where Singer has a strong presence. Unexpected heavy rains and floods in the second half of the year further affected the consumers. However, Government’s commitment to sustaining a business oriented import duty structure, turnover related taxes and income tax policies had a favorable impact on the overall business performance.

Despite the adverse market environment described above, Group revenue for the year exceeded Rs. 25 billion mark for the first time to Rs. 25.4 billion, a 15% growth. Revenue growth was derived singularly through organic growth and it’s noteworthy that Singer Group recorded a Compound Annual Growth Rate of over 28% over the past three consecutive years.

Correspondingly, the bottom line of both Group and the Company too exceeded Rs. 1 billion mark for the second consecutive year. Group profit for the year is reported at Rs. 1.2 billion, less by 9% compared to 2011. However, including other comprehensive income, the Group reported a total comprehensive income of Rs. 1.3 billion for the year which is marginally above that of the prior year. In comparison the not so much conducive business environment that prevailed during the year, we consider it a reasonable return to the shareholders.

Global Economic Reverberations2012, the global economy was in a turbulent phase. Global business activity weakened and became inconsistent. Investor confidence fell sharply and downside risks are still growing.

As per the IMF - World Economic Outlook update in January 2013, Global GDP grew by 3.2% in year 2012 against 3.9% in year 2011. Economic growth of advanced economies further slowed down and reported 1.3% growth against 1.6% in year 2011 while economic growth of many emerging and developing economies too slowed down by 1.2% from 6.3% in year 2010 to 5.1% in 2012. Addition to that the European Sovereign debt crisis on Iran sanctions leading to persistently high petroleum prices adversely affected world economic growth in year 2012.

In the year under review, Singer Group faced negative consequences due to global economic trends. In line with global economic fluctuations, result of sanctions on Iran and subsequent corrections to the basic fundamental drivers in economy, exchange rate was devalued sharply and increase in interest rates, electricity and fuel adversely affected our business growth in the year 2012.

Sri Lankan Economic LandscapeSharp devaluation of the Rupee, increase in interest rates, electricity and fuel prices and the resulting increase in inflation of the country in the first half of the year adversely affected the economic growth in the first half of the year. Drought conditions that severely affected agriculture and hydro power generation and heavy rains in the last quarter that disrupted food supplies further slow downed economic growth momentum in year 2012.

The GDP growth rate for year 2012 is estimated to be around 6% compared to 8.3% in 2011. 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.

The annual average inflation as measured by the Colombo Consumers’ Price Index (CCPI) (2006/7 - 100) had reached 7.6% in December 2012, from 6.7% in December 2011.



Further, one year Treasury bill rate and the AWPR too moved up from 9.31% and 13.44% in December 2011 to 11.69% and 15.98% respectively in December 2012. Workers’ remittances are estimated to be around US$ 6 billion in 2012, up by 16.8% from previous year. The Government’s commitment on sustaining fiscal policy on imports duty, turnover related taxes and income tax rate in 2012 somewhat helped the economy.

Sri Lankan Economy - How it affected Singer GroupUndisputable foregoing developments in the Sri Lankan economy had an impact on Singer operations. Consumer sentiments were affected by the sharp devaluation and sharp increase in interest rates, electricity and fuel costs. These adversely impacted the consumer sentiments and the buying power of the consumers. in addition, the drought destroyed part of the harvest and resulted in power cuts and shortages of water for consumers in some districts in first half of the year and unexpected heavy rains and flood in latter part of the year further affected consumer purchasing power. All these facts had adverse impact to the top line and sharp increase in interest rates and increase in utility cost had adverse impact to the bottom line of the business. However, Government commitment on sustaining business oriented imports duty structure, turnover related taxes and income tax policies had favorable impact to overall business performances.

Basis of Preparation and Comparative FiguresThe Group Financial Statements for 2012 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’s Financial Statements represent the Financial Statements of Singer (Sri Lanka) PLC only.

The Institute of Chartered Accountants of Sri Lanka has issued a new version of Sri Lanka Accounting Standards - SLFRS and LKAS which are applicable for financial periods beginning on or after 1st January 2012. In line with this development, both Group and Company have adopted new Sri Lanka Accounting Standards - SLFRS and LKAS with effect from 1st January 2012. Group and Company Financial Statements for the period ended 31st December 2012 in this Annual Report is prepared and presented in accordance with SLFRS and LKAS and applicable Accounting Policies with effect from 1st January 2012 and exemption in first time adoption of SLFRS has been disclosed in page 161.

In preparing SLFRS/LKAS statement of financial position for previously reported financial periods, required adjustments have been made, in accordance with the respective SLFRS/LKASs. The effect of the transition to SLFRS/LKASs on the previously reported financial positions. Financial performances and cash flows of the Group and the Company is given in the Note 41 to the Financial Statements.

Income RevenueGroup revenue was Rs. 25.4 billion, which surpassed prior year’s by Rs. 3.3 billion or 15%. Revenue of the Company for the year increased from Rs. 20.9 billion to Rs. 23.9 billion, an increase of Rs. 2.9 billion or 14%. Revenue growth was as a result of volume growth in some product lines, new product introductions, opening of new stores in different geographical areas and also partly due to the gradual price increases to overcome the impact of rupee devaluation.

Negative sentiments were felt in the consumer durable markets as a result of the adverse conditions that prevailed which impacted the buying power of the consumer.

As the market leader in consumer durables, Singer Group has undertaken aggressive marketing and promotional campaigns to overcome negative market sentiments. Continuous marketing and communications programmes backed our products to build some vibrancy at grass root level. In addition, Singer Group took an aggressive approach to harvest market opportunities. A good mix of both above the line (ATL) and below the line (BTL) advertising campaigns were undertaken in terms of 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. In addition, expanding the wide distribution network, enhancing 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.



Revenue Analysis

AA

B B

CC

DD

EE

FF

G GH HI I

2011%

2011 2012

2012%

E ‐ Communication 6.1 6.9

Singer Finance (Lanka) PLC 4.9 6.0F ‐

D ‐ Kitchen Related Products 6.7 6.7

Furniture 4.7 5.7G ‐

C ‐ Sewing Related Products 10.9 10.5

Agro 3.4 3.4H ‐

B ‐ Consumer Electronics 27.6 23.8

Transportation 2.1 2.4I ‐

A ‐ White Goods 33.6 34.6

Direct Interest CostDirect interest cost of the Group increased from Rs. 280 million to Rs. 547.2 million in the previous year, an increase of 95.7%. Include in direct interest cost are interest cost for customer deposits and interest for bank loans at Singer Finance (Lanka) PLC. Customer deposits at Singer Finance (Lanka) PLC grew from Rs. 2.6 billion to Rs. 2.8 billion and Singer Finance (Lanka) PLC had to increase interest rate to Deposit holders after carefully considering and evaluating the market trends. Further to that bank borrowings increased over prior year to fund growth in higher purchase and lease receivable

Gross Profit Gross profit of the Group for the year under review was Rs. 8,705.3 million compared with Rs. 8,096.5 million in the previous year, an increase of 8%.

The Group’s gross margin percentage decreased from 36.7% to 34.3% over the prior year. The absolute gross profit of the Company is Rs. 7,729.7 million as against Rs. 7,288.9 million in the previous year, an increase of 6%. Gross margin percentage of the Company was 32.4 % (2012) vs 34.8 % (2011), a decrease of 2.4%. In absolute terms, gross margin of both Group and Company increased over prior year mainly due to growth in revenue.

Gross margin percentage of both Group and the Company decreased over prior year due to decrease in cash margin resulting from sharp devaluation of the rupee. Devaluation of the rupee adversely affected our import cost; however it was not viable to pass on the full impact to consumer and the Company absorbed part of the cost and sacrificed some product margin as a long-term strategy to improve our market share.

Other Income Other income of the Group increased from Rs. 134.7 million to Rs. 190.5 million, mainly due to increase in overdue interest, financial service income and miscellaneous income in subsidiary company. Included in other income are overdue interest charges of Rs. 68.5 million, income from financial services Rs. 59.2 million and Rs. 58.9 million of miscellaneous income, which includes insurance commission recorded by Singer Finance (Lanka) PLC.

At the Company level, other income increased from Rs. 167.2 million to Rs. 222 million by Rs. 54.8 million mainly due to increase in dividend income from subsidiary company, Singer Finance (Lanka) PLC. Included in other income are Rs. 57.6 million of dividend income received from Singer Finance (Lanka) PLC and Rs. 68.1 million of service fees received from Singer Finance (Lanka) PLC on administration services rendered in maintaining loan accounts. However, service fee and inter-company dividends are eliminated in the Consolidated Financial Statements of the Group.

Expenditure Selling and Administrative ExpensesSelling and administrative expenses of the Group increased over prior year by 7.9% from Rs. 5,490.4 million in 2011 to Rs. 5,922.8 million in 2012. Selling and administrative expenses of the Company increased over prior year by 6.7% from Rs. 5,037.1 million to Rs. 5,374.7 million.

Managing costs in a dynamic business environment is a tremendous exercise since management needs to maintain a balanced approach on operational efficiency as well as catering to the growth business prospects. Both Company and Group carefully managed costs which helped contain expense growth below the revenue growth. Period expenses such as rent, renovation cost and some components of staff cost increased due to expansion of operations. Expenses such as electricity, travelling expenses, some component of staff related expenses and fuel expenses increased due to inflationary pressures as explained above. Increases in some components of selling and administration expenses were partially due to increase in sales, specially selling commissions, collecting commissions, advertising and promotional expenses. These expenses are related to sales and have grown in line with sales growth. Impairment on trade and other receivables at Group and Company decreased over prior year by Rs. 26.8 million and Rs. 42.2 million, respectively.

Other Expenses Other expenses represent depreciation on Property, Plant & Equipment and amortisation of Intangible Assets. Other expenses of the Group increased by 16.5% over prior year from Rs. 196 million to Rs. 228.3 million. Company’s other expenses increased by 15.7% from Rs. 186.6 million to Rs. 215.9 million. The increase in depreciation expenditure was due to capital expenditure incurred in shop renovations and leasehold improvements.



Net Finance CostNet finance costs of the Group sharply increased from Rs. 497.6 million to Rs. 955 million, an increase of 92%. Similarly, Company’s net finance costs too increased from Rs. 458.4 million to Rs. 864.6 million, an increase of 88.6%. As a result of higher policy rates and the credit ceiling imposed by the Central Bank on financial institutions and lower levels of liquidity in the market led to higher interest rates; which increased Company’s effective interest rate from 11.3% in 2011 to 16.1% in 2012. Further to that Bank’s borrowings grew over prior year by Rs. 3 billion at Group and Rs. 3.1 billion at Company level vs prior year to fund business expansions and working capital growth, specially increase in trade receivables and inventories. All these factors increased net interest cost at both Group and Company level by 92% and 88.6% respectively.

Interest Cover (Times)

2008

2,008

2009 2010 2011 2012

2.83

5.00

2.51

1.221.16

Finance income of the Group too increased from Rs. 62 million to Rs. 99.1 million. At the Company level, finance income increased from Rs. 101.2 million to Rs. 189.4 million due to increase of interest income from Subsidiary Company Singer Finance (Lanka) PLC on its borrowings from the Parent Company, Singer (Sri Lanka) PLC. However, this income is offset in the Consolidated Financial Statements.

Share of profit / (Loss) of Equity-Accounted Investee (Net of Income Tax)The share of loss of Equity-Accounted Investees after tax is applicable only to Group results and share of profit for the period is Rs 5.8 million vs. loss of Rs. 0.6 million in 2011. Equity-accounted investments in the Group are limited to Reality Lanka Ltd.

Income Tax Expense Income tax expense of the Group was Rs. 552.8 million as against Rs. 681.2 million in 2011. Income tax expense for the Company declined from Rs. 573.5 million to Rs. 458.6 million. Current year income tax expense on ordinary activities of the Company declined from Rs. 573.5 million to Rs. 458.6 million due to the decrease in profit from ordinary business and prior year’s first quarter being taxed at 35%. Singer (Sri Lanka) PLC is liable for income tax at 28% on taxable profits from 1st April 2011.

Group effective tax rate for the year is 31.7% vs. 34.2% in 2011 while that for the Company was 31.2% vs. 32.9%. Including Value Added Tax on Financial Services, Group’s effective tax for the year is 33.5% vs. 36% whereas Company effective tax rate for the year is 32.6% vs. 34% in the last year. Effective tax rate decreased in both Group and Company due to reduction in corporate tax rate from 35% to 28% and some expenses now being made tax deductible whereas those were not so until 31st March 2011.

Profit for the YearThe Group recorded the net profit of Rs. 1,193.4 million after tax for the fiscal year 2012. This represents a decline of Rs. 115.4 million or 9% over last year mainly due to decline in profit from ordinary activities as a result of sharp increase in interest cost.

Singer (Sri Lanka) PLC’s net profit for the year was Rs. 1,008.9 million vs. Rs. 1,171.5 million reported in the previous year, a decrease of Rs. 162.6 million or 14%.

In the Group, profit attributable to equity holders was Rs. 1,137.7 million vs. Rs. 1,266.3 million in 2011. Profit attributable to non-controlling interest was Rs. 55.7 million vs. Rs. 42.5 million in 2011. Non-controlling interest pertains to Singer Finance (Lanka) PLC and is effective from 22nd December 2010 after allotment of IPO shares.



Other Comprehensive IncomeLand and Buildings of the Company were revalued during the financial year by Messrs Chulananda Wellappili, an Independent Valuer. The results of such revaluation were incorporated in these Financial Statements from its effective date 31st December 2012. Such assets were valued on an open market value for existing use basis. The surplus arising from the revaluation was transferred to a revaluation reserve and recorded as other comprehensive income in the financial statements. Other comprehensive income in year 2012 after tax was Rs. 126.9 million.

Total Comprehensive Income for the PeriodThe Group recorded a total comprehensive income of Rs. 1,320.4 million after tax for the year vs. Rs. 1,308.8 million which was above prior year by Rs. 11.6 million.

Singer (Sri Lanka) PLC total comprehensive income for the year was Rs. 1,135.9 million vs. Rs. 1,171.5 million reported in the previous year, a decrease of Rs. 35.6 million.

In the Group, total comprehensive income attributable to equity holders was Rs. 1,264.7 million vs. Rs. 1,266.3 million in 2011. Total comprehensive income attributable to non-controlling interest was Rs. 55.7 million vs Rs. 42.5 million in 2011.

Earnings Per ShareGroup Earnings per Share (EPS) in the period under review was Rs. 9.09 vs Rs. 10.11 in year 2011. Earnings per share of the Company were Rs. 8.06 vs. Rs. 9.36 in year 2011.

Price Earnings Ratio The price-to-earnings ratio of the Company as at 31st December 2012 was 12.69 times against 14.18 times as at 31st December 2011.

Price Earnings Ratio (times)

2008 2009 2010 2011 2012

12.6914.18

18.28

36.08

12.12

During the year under review, the Company’s share price ranged between Rs. 138.50 and Rs. 78, closing the year at Rs. 102.30. Respective figures for 2011 were Rs. 235, Rs. 92.10 and Rs. 132.70.

Dividend

Company paid a final dividend of Rs. 6.00 per share amounting to Rs. 751.2 million during the year in respect of the year ended 31st December 2011. Directors have approved a final dividend of Rs. 6.00 per share amounting to Rs. 751.2 million for the



year ended 31st December 2012. In accordance with LKAS 10 on ‘Events after the reporting period’ the proposed final dividend subsequent to the reporting date is not recognised as a liability in the Financial Statements as at 31st December 2012. The Company has access to necessary funds to finance the payment of the final dividend.

Solvency Section 56 of the Companies Act No. 07 of 2007, requires that a solvency test be carried out prior to the payment of dividends. The Board of Directors will obtain a Certificate of Solvency from the Auditors prior to the date of dispatch of the final dividend payment.

Return on Equity Return on Group equity for the year under review is 22.5% whilst in the previous year it was 28.7%. Return on equity of the Company was 22.1% compared to 29.3% in the previous year. Return on equity has been computed by comparing the profit for the year and average total equity as at reporting date.

Non-Current AssetsNon-current assets of the Group increased from Rs. 6,284.3 million in 2011 to Rs. 7,605.3 million in 2012, an increase of Rs. 1,321.0 million. Non-current assets of the Company increased from Rs. 3,627.9 million to Rs. 4,762.3 million, an increase of Rs. 1,134.4 million. Trade and other receivables increased by Rs. 826.7 million in the Group and Rs. 72.7 million in the Company. An increase in Property, Plant & Equipment by Rs. 460.1 million for the Group and Rs. 446.8 million for the Company was mainly due to revaluation of land and buildings and capital expenditure to improve leasehold premises, shop renovations and expansion. Land and buildings were revalued in the year 2012 by Mr. Chulananda Wellappili, an Independent Valuer. The result of the valuation was incorporated in the Financial Statements from its effective date which is 31st December 2012. The assets were valued on open market value for existing use basis. The surplus arising from the revaluation was transferred to revaluation reserve in year 2012 and next revaluation is due on 31st December 2014.

At the Company, non-current assets increased over prior year by another Rs. 582.2 million due to increase of investment in subsidiaries. Company invested Rs. 582.2 million on rights issue of the Subsidiary Company Singer Finance (Lanka) PLC in the year under review.

Current Assets Current assets of the Group increased from Rs. 11,164.9 million in 2011 to Rs. 13,814.3 million as at 31st December 2012, an increase of Rs. 2,649.1 million or 23.7%. Current assets of the Company too increased by Rs. 2,455.2 million from Rs. 9,174.1 million in 2011 to Rs. 11,629.2 million in 2012. The increase is attributable to higher trade and other receivables and inventories in both Group and Company commensurate with expansion of business. Trade and other receivables increased due to growth in the lease assets and hire-purchase receivables. Inventory increasing over prior year by Rs. 823.2 million due to growth in sales volume, expansion of new brands & models and expansion of shops in a growing economic environment.



Total Assets Total assets of the Group increased by 22.8% from Rs. 17,449.2 million to Rs. 21,419.2 million, an increase of Rs. 3,970 million compared to the figure as at 31st December 2011.

Total assets of the Company increased by Rs. 3,589.6 million, a percentage increase over the prior year of 28%.

Balance Sheet Structure (%)

2010 2011 20120

25

50

75

100

PPE

Investments

Inventories

Receivables

Cash and Others

Assets

Shareholders Funds

Long‐Term Borrowings

Short‐Term Borrowings

Trade Creditors

Other Liabilities

Liabilities

2010 2011 2012

Assets Liabilities

Total Equity Total Group equity including non-controlling interest increased by Rs. 609.6 million over 2011 to stand at Rs. 5,613.2 million as at 31st December 2012. The increase was due to increase in retained earnings and revaluation reserves. Total Company equity increased by Rs. 388.1 million over the previous year and is at Rs. 4,768.9 million due to same reason as stated above.

Non-Current Liabilities Non-current liabilities of the Group increased from Rs. 2,401.6 million to Rs. 2,937.8 million. Non-current liabilities of the Company increased from Rs. 1,535.2 million to Rs. 2,352.5 million. The increase was largely due to increase in interest-bearing loans and borrowings at both Group and Company. During the financial year Company redeemed Rs. 548 million of debentures and issued 3-year new debentures amounting to Rs. 1,400 million to finance expansion of business and Subsidiary Company, Singer Finance (Lanka) PLC borrowed Rs. 400 million of long-term loans to finance growing hire-purchase and lease receivables.

Current Liabilities Current liabilities of the Group increased from Rs. 10,043.9 million in 2011 to Rs. 12,868.2 million as at 31st December 2012, an increase of Rs. 2,824.3 million or 28.1%. At Company level, current liabilities increased by Rs. 2,384.1 (34.6%) million compared to 31st December 2011.

Current liabilities of the Group increased mainly due to increase of customers’ deposits at Singer Finance (Lanka) PLC by Rs. 361.8 million, loans and borrowings by Rs. 2,482.7 million and trade and other payable by Rs. 82 million. In the Company’s Financial Statements, increase in current liabilities was due to same reasons as explained above except the increase in customers’ deposits.



Operating Cash Flow Group gross operating cash flow before working capital changes, finance costs and tax was Rs. 3,882.7 million vs Rs. 3,626.7 million in 2011. Inventories increased by Rs. 850.2 million while trade debtors including hire purchase and lease receivables increased by Rs. 3,120.7 million. Trade and other payables decreased by Rs. 65 million and customer deposits increased by Rs. 201.5 million respectively.

Net operating cash outflow after finance costs and tax payments in the Group was Rs. 1,572.7 million. This decrease was mainly due to increase in inventories, trade receivables and income tax payments, but it was partly off-set by increase in operating profit and customer deposits.

Net operating cash outflow in the Company was Rs. 366.8 million, due to the same reasons reported in the Group except customer deposits.

Investment Cash Flow During the year under review, the Group made investments amounting to Rs. 481.1 million. This figure includes cash out flow to acquire Property, Plant & Equipment and intangible assets of Rs. 602.7 million and investment on marketable securities and bank deposits by Subsidiary Company, Singer Finance (Lanka) PLC of Rs. 79.3 million. Part of this cash outflow was off-set by cash inflow from interest received of Rs. 99 million, disposal of Property, Plant & Equipment of Rs. 20 million and Rs. 80 million of loan repayment by related companies.

During the year, the Company’s net cash outflow from investment activities was Rs. 1,834 million, due to acquisition of Property, Plant & Equipment and intangible assets of Rs. 564.7 million and Rs. 582.2 million of investment in Subsidiary Company, Singer Finance (Lanka) PLC and loans given to related parties specially to Singer Finance (Lanka) PLC of Rs. 952.5 million., but part of this cash outflow was off-set by cash inflow of interest received of Rs. 189.4 million and dividend received of Rs. 59 million.

Financing Cash Flow Net cash inflow from financing activities at Group level was Rs. 2,308.2 million due to net increase in interest-bearing loans and borrowings of Rs. 3,017.6 million. Part of this cash inflow (Rs. 746.5 million) was utilised for dividend payment during the year.

Net cash inflow from financing activities in the Company was Rs. 2,175.5 million, due to same reasons as explained above.

Cash and Cash Equivalents As at 31st December 2012, cash and cash equivalents of the Group improved from a negative balance of Rs. 302.6 million to a negative balance of Rs. 48.2 million. At the Company level, cash and cash equivalents decreased from a negative balance of Rs. 181.9 million to a negative balance of Rs. 207.3 million, mainly due to the net cash inflow from financing activities as explained above.

Accounting Policies Group and Company Financial Statements for the period ended 31st December 2012 in this Annual Report is prepared and presented in accordance with SLFRS and LKAS and applicable accounting policies with effect from 1st January 2012 and the requirements of the Colombo Stock Exchange and the Companies Act No. 07 of 2007 respectively.



ThE muSclE Of mOnEy managEmEnT Singer’s Financial Services’ proposition is a great strength to our already diverse portfolio. Making money work for people is what we are about.


Janaka Mendis, Hemantha Perera, Shantha Wijeweera, Viresh Gomes, Sajindra Perera

(Left - Right)



Chairman’s StatementAs the global community continues to fail in its endeavour to stabilise their respective economies, income disparity and social inequality is raising its head once again as in no other recent time. As a Corporate entity responsible for serving the community, community well-being becomes increasingly relevant at a time such as this.

I remember the following words from the school-room of my childhood:

“Little drops of water, little grains of sand, makes the mighty ocean and the blessed land.”

Our contribution towards society may not singly portray great value. As more and more corporates, realising the importance of sustaining an inclusive society, follow our leadership initiatives in strengthening down trodden citizens on the threshold of poverty to play an enabling role in society, our collective efforts will become increasingly relevant to build a sustainable society of the future.

Sustainability of the Corporate Sector depends on the well-being of civil society represented by our customers and business partners. Corporate Social Responsibility links on to sustainability and paves the way for a better tomorrow for all of us.

Sincerely,

Hemaka Amarasuriya Chairman


Redefining retail ambience…


Encompassing the Future Annual Report 2012 Singer (Sri Lanka) PLC 55

A Year of Great Achievement in Social Responsibility Sphere

Winning is not a sometime thing; it’s an all time thing. You don’t win once in a while, you don’t do things right once in a while, you do them right all the time. Winning is a habit.Vince Lombardi

This year we picked up a slew of prestigious accolades at the Best Corporate Citizen Awards held by the Ceylon Chamber of Commerce. In addition to being selected as the 1st Runner Up amongst Sri Lanka’s Top Ten Corporate Citizens, the Company also won first place in the majority of key judging categories, including the ‘Community Relations & CSR’ category and the ‘Customer & Supplier Relations’ category. Singer Sri Lanka was also awarded first place in the ‘Social: People & CSR’ sector.

A Company news release issued on this momentous occasion expressed our philosophy in this regard it said, “Singer Sri Lanka is woven into the very fabric of Sri Lankan society, touching millions of Sri Lankan lives daily. As a result, the Company takes a ‘big picture’ view of its responsibilities. Indeed, instead of investing resources in ad hoc or one-off projects, Singer Sri Lanka has always focused on maximising its positive impact by creating building blocks that can empower Sri Lanka’s sustainability. This holistic approach can be seen in the Company’s involvement in environmental sustainability, employee empowerment, customer and supplier engagement, support for the community, youth development, and corporate governance’’.

The price of success is hard work, dedication to the job at hand and the determination whether we win or lose, we have applied the best of ourselves to the task at hand. Success is half won when one gains the habit of setting goals and achieving them. Even the most tedious chore will become endurable as you go through each day convinced that every task, no matter how menial or boring, brings you closer to fulfilling your dreams.

Encompassing the Future Singer (Sri Lanka) PLC Annual Report 201256


Products and ServicesThe Company’s principal business activities are marketing domestic and industrial sewing machines, consumer electronics and electrical home appliances, furniture, agricultural equipment, personal computers and digital media product, media product, smart phone etc. The Company is also engaged in manufacture of furniture and agricultural equipment. Further, the Company provides hire-purchase and other financial services to customers. Outsourcing functions are limited to providing after sales services of its products and handled through a service franchise network, under the Company’s nine (9) Regional Service Centers strategically located in the key towns of the country. Principal activities of Subsidiary Company, Singer Finance (Lanka) PLC are acceptance of deposits from the general public and financing sale or purchase of any goods, articles, vehicles or other items either by letting on hire, hire purchase, leasing and other methods of financing.

The Company provides our customers a wide range of products that belongs to local and international brands. There brands and their respective logos can be found on page 21 in this Report.

Operational StructureThe Group consists of three companies and one separate manufacturing division: Singer (Sri Lanka) PLC, Singer Finance (Lanka) PLC (a 80.4% owned subsidiary), and Reality Lanka Ltd. - Associate Company and the Singer Manufacturing Factory, Piliyandala (which operates as a separate Division).

Location of Headquarters and Number of Countries ServedThe Company operates in Sri Lanka. The intermediate Parent Company operates in the Asian Region.



Legal Form and OwnershipDetailed corporate information of the Company including legal form and information on share ownership is given in the Inner Back Cover of this Report.

Our Presence and Changes to Size and Ownership StructureOur Frontiers Extend FurtherThe Group/Company serves all geographical regions of Sri Lanka. We further extended our frontiers in the island by opening 14 new showrooms and 15 satellite showrooms. New showrooms were opened in - Gothotuwa, Kuliyapitiya, Kadawatha, Kalmunai, Narammala, Mathugama, Wakare, Wattala, Point Pedro, Valaichchenai, Malabe, Thissamaharama, Godagama and Chilaw 15 satellite showrooms were opend in Abanpola, Bogawanthalawa, Diyathawa, Dompe, Haladamulla, Hatharaliyadda, Hemmatagama, Uragasmanhandiya, Karandeniya, Kodikamam, Meegahakiula, Muthur, Pinnaduwa,

Polpithigama and Udapusellawa. These additions brought the total number of showrooms operated by the Company at year end to 381. In addition, we have 704 indirect dealers, nine service centres and 129 service franchise agents in different parts of the country providing excellent after sales service to our customers. Further, the Company renovated 50 showrooms, upgrading merchandising standards in line with Singer’s global merchandising standards. Our Subsidiary Company, Singer Finance (Lanka) PLC opened a fully-fledged branch in Embilipitiya and two more window operational units in Vavuniya and Malabe, increasing its total presence to 19 locations.

The seventh consecutive year Singer was named as the “People’s Brand of the Year”.



Scale and ScopeWe had a total of 1,475 employees at year end 2012. Net sales for the year ended 31st December 2012 was Rs. 25.4 billion and profit after tax was Rs. 1.2 billion. Group comprehensive income for the year was Rs. 1.3 billion. Total equity attributable to Equity holders of the Group stood at Rs. 5.3 billion, Non-controlling interest stood at Rs. 0.4 billion and loan capital at Rs. 9 billion, as at 31st December 2012. Details of the Group’s sales, profits, comprehensive income, assets, debt and equity together with key performance ratios are given in the Financial Statements on pages 148 to 203 and Group at a Glance on page 4 of this Report.

How We Built a World Class CompanyThe only way to build a good company is one satisfied customer at a time. However, to build a great company, we must add one raving fan at a time. The difference is this...a satisfied customer will come back, but a raving fan not only comes back, but becomes part of your sales team. There’s a big difference!

The truth is, world class organisations know and apply certain practices that most companies do not. This is what differentiates them from the pack. This is what keeps them moving forward on the leading edge of innovation and change, forcing others

to catch up. They do things that exceed customer expectations. They solve problems before customers even know there is a problem. They fill latent needs before customers know they have a need. They offer value propositions that seem impossible, yet they deliver on their word. They understand that the customer is not always right, that the customer often does not know what they want until they see it. As Lee Iacocca put it many years ago, no one ever came to Chrysler and asked for a mini-van to be designed.

Super positive experiences with most businesses may be rare indeed, but they are a way of life for the companies that have it right. At Singer, Customer Service is not a department. It is an attitude. It is a culture. It is a collective way of seeing the world. ‘Wowing’ customers is not the exception. It is the rule. Exceeding expectations is not a surprise. It is planned and executed with diligence, ease and grace.

Awards, Achievements and HonoursWe Remain at the HelmPublic BrandFor the seventh consecutive year we have been ranked by Brand Finance Lanka as the Public Brand in Sri Lanka with an ‘AA+’ Brand Rating. Brand Finance Lanka is a subsidiary of Brand Finance UK, the world’s leading independent brand valuation and ratings agency. Based on extensive studies, including financial analysis and market research, this Brand Rating which is akin to a company’s credit rating takes into account factors such as brand management, brand presence, brand familiarity, functional performance, emotional connection, brand preference, growth and market share.

People’s Brand, Durable Brand of the Year and Youth Brand of the YearFor the seventh successive year, ‘Singer’ was named as the “People’s Brand of the Year”. This award was given based on island-wide research carried out by AG Nielsen and the Sri Lanka Institute of Marketing. The Company was also the winner of ‘Durable Brand of the Year’ for the most popular refrigerator, television and household appliances.

Most Respected Entities in Sri LankaCommissioned and conceptualised by LMD, the list of Most Respected Entities is based on surveys of business people by the Nielson Company. Once again we have made it to the Hall of Fame as one of the top twenty most respected business entities in Sri Lanka. Singer is the most respected organisation in the consumer goods category and second within the top twenty in analyses that included CSR, Quality Consciousness, Management Profile, Honesty, Innovation, Work Environment, Vision and Nation-Mindedness.



Best Corporate Citizen AwardsThis year Singer won an unprecedented number of awards at the ‘Best Corporate Citizen Awards’ held by the Ceylon Chamber of Commerce. The following are the honours conferred on Our Company:

1st Runner-Up amongst Sri Lanka’s Top Ten Corporate Citizens.

Winner in ‘Community Relations & CSR’ category

Winner in ‘Customer & Supplier Relations’ category

Winner in ‘Social, People & CSR’ sector.

Fitch Ratings Lanka Ltd.Fitch Ratings Lanka Ltd. has affirmed the national long-term rating as Singer (Sri Lanka) PLC senior unsecured Note of ‘A(lka)’ the outlook is stable. Fitch Ratings Lanka Ltd. has affirmed our Subsidiary Company Singer Finance (Lanka) PLC, national long-term rating ‘BBB(lka)’ the outlook is stable.

Annual Report Award

Our Year 2011 Annual Report was awarded Gold Award under Retail Categories by The Institute of Chartered Accountants of Sri Lanka. Annual Report 2011/12 of our Subsidiary Company, Singer Finance (Lanka) PLC was awarded certificate of appreciation in Finance Company category in same competition held by The Institute of Chartered Accountants of Sri Lanka. Year 2011 Annual Report has been adjudged Merit Certificate in the Best Presented Accounts Award under Manufacturing Sector which was conducted by the South Asian Federation of Accountants.

SINGER (SRI LANKA) PLC won the ‘GOLD AWARD’ in LACP VISION AWARDS 2011 under the Consumer Durable - Household Category. It is one of the prestigious global awards schemes for annual reports which is conducted by the LEAGUE OF AMERICAN COMMUNICATIONS PROFESSIONALS (LACP). Further to that our year 2011 Annual Report has been placed among the top 25 Sri Lankan Reports too, in this evaluation.

ISO CertificationSinger manufacturing facilities in Piliyandala, which manufacture solid, modular furniture and sofa as well as water pumps and paddy threshers, are ISO: 9001-2008 certified.

The Company’s Distribution Centre in Piliyandala has also been ISO:9001-2008 certified: a tribute to the centre’s quality management systems.

The Parameters of this ReportEncompassing the future covers the calendar year ended 31st December 2012. Our first report was published in the Annual Report for 2010 and we intend making this an annual occurrence. It would be our pleasure to comply with any clarification/query on this report. Should this necessity arise, please use any facility at your disposal and get in touch with:

Finance Division,Singer (Sri Lanka) PLC,No. 80, Nawam Mawatha,Colombo 2.

Report Boundary and ContentThis report is limited to the Company’s operations in Sri Lanka. The operations of the Company’s Subsidiary - Singer Finance (Lanka) PLC and Associate Company of Reality Lanka Ltd.

Data Measurement Techniques and Bases of CalculationFinancial data presented in this report have been extracted from Audited Financial Statements. Accounting policies used in preparation of the Financial Statements including the basis of preparation and significant assumptions are given on pages 153 to 163 Man hours in respect of training provided for the employees of the Company are computed based on



scheduled time for each training session. The scope, boundary or measurement methods used in the preparation of this report are the same as those used in the previous report issued in 2011. Information presented in this report in respect of prior periods have not been restated except the financial data. Financial data was restated in line with restated Financial Statement as a result of first time adaptation of new Sri Lankan Accounting Standards (SLFRS/LKAS).

Good GovernanceGovernance, Commitments and EngagementsSinger enshrines the highest ethical standards in the conduct of its business affairs. The Board of Directors are tasked with ensuring that the resultant regime of exemplary governance across all aspects of business, is in the best interests of stakeholders.

The Chairman of the Board of Directors functions in a non-executive capacity. This strengthens the independence of the Board, the Independent and Non-Executive Directors.

The Board comprises eight (8) Directors including the Chairman and the Chief Executive Officer.

We believe, given the size of our Company, the most effective way for shareholders to provide recommendations or direction is through General Meetings. Shareholders can also communicate in writing directly with our Compliance Officer or our Non-Executive Chairman.

Employees can communicate with the Board through their respective divisional heads. We hold monthly management review meetings and operations meetings, where all key, senior and relevant subject managers participate. We also encourage and foster a culture which enables all levels of employees to freely express their views and recommendations to all levels of management staff. The management staff have regular interactions with the Group CEO and other Directors. Management review meetings and operation meetings are held every month. Other employees communicate with the Board through their respective divisional heads.

The Executive Committee, which comprises all key managers and two senior managers, meets weekly to discuss and address current operational matters and issues of strategic nature. Meetings are held weekly to address these issues and take prompt action.

Performance-Based CompensationThe Board has established two Governance Committees.

Audit CommitteeThe Audit Committee is empowered to review and monitor the financial reporting process of Singer Group so as to provide additional assurance on the reliability of the Financial Statements through a process of independent and objective review.

As such, the Audit Committee acts as an effective forum in assisting the Board of Directors in discharging their responsibilities on ensuring the quality of financial reporting and related communication to the shareholders and the public.As at year-end, the Audit Committee comprised three Non-Executive Directors of the Board namely Dr. G.C.B. Wijeyesinghe, Deshabandu A.M. de S. Jayaratne and Dr. S. Kelagama, The Head of Risk Management, functions as the secretary to the Committee. The Financial Director/Compliance Officer, Audit Staff, Representatives of External Auditors and when necessary, the Chairman/the Group Chief Executive Officer and relevant operation Directors and Managers attend the meetings by invitation.

Remuneration CommitteeThe Remuneration Committee consists of the 3 Non-Executive Directors and the Non-Executive Chairman of the Singer Group. The Finance Director acts as the Secretary to the Committee. The Committee is Chaired by a Non-Executive Director. The Group Chief Executive Officer and the Finance Director assist the committee by providing the relevant information and participating in its analysis and deliberations. The scope of the committee is to ‘look into fees, remuneration and perquisites of Chairman, Group Chief Executive Officer, Independent Directors and the Executive Directors of the Board of the Company including Alternate Directors and approve recommendations made by the Group Chief Executive Officer and the Corporate Office of Singer Asia Ltd. Singer Asia Ltd., is the Intermediate Parent of the Company. The Committee also reviews the policies pertaining to the remuneration and perquisites of the Executives of the Company

Avoiding Conflicts of InterestAll our employees are bound by our written Code of Business Conduct which they sign to adopt as part of their written Contract of Employment. In order to refresh their sense of responsibilities and to avoid conflicts of interest and in order to ensure the adoption of revised Code, the Code of Business Conduct must be signed annually by each key and senior management employee. Our insistence on avoiding conflicts of interest is strengthened further by our Whistle-Blower Policy as well as the collective agreement we sign with the labour unions. Our Whistle-Blower Policy, introduced in 2009, enhanced transparency and promotes adherence to our Code of Ethics. It encourages any employee who suspects wrong doing at work, whether it is done by management, a peer or any other employee, to raise their concerns in this regard. Our collective agreements with our labour unions ensure that there is an equitable balance between the interests of Singer (Sri Lanka) PLC and our employees, reducing any possible temptations that may lead to a conflict of interest. It is also important to note that by providing for the welfare needs of our employees, we ensured that they are motivated and eager to abide by the Code of Business Conduct, thereby further reducing any potential conflicts of interest.



We believe that by promoting a sense of community and ownership amongst our employees, through the provisions of general compensation we are able to encourage our employees to promote good corporate governance.

Eligibility of Board MembersWhen appointing new members to our Board of Directors, we assess their qualifications and expertise to ensure that we are in accordance with the rules and regulations published by the Colombo Stock Exchange, the Code of Best Practice on Corporate Governance issued jointly by The Institute of Chartered Accountants of Sri Lanka and the Securities and Exchange Commission of Sri Lanka and the Companies Act No. 07 of 2007.

We also identify and groom our executives for possible appointment to the Board in a well-structured process that includes extensive training and development. This may involve overseas assignment and training at foreign universities and other institutions.

We provide opportunities for current members of the Board of Directors to be exposed to new developments in key areas by conducting regular training programmes and having members serve in related committees.

Memberships in AssociationsThe Company Singer (Sri Lanka) PLC and Subsidiary Company Singer Finance (Lanka) PLC are members of the following associations:

The Ceylon Chamber of Commerce

Sri Lanka-China Business Council

Import Section of the Ceylon Chamber of Commerce

Sri Lanka-Canada Business Council

The Employers’ Federation of Ceylon

The Finance Houses Association of Sri Lanka - Singer Finance (Lanka) PLC

Leasing Association of Sri Lanka - Singer Finance (Lanka) PLC

Several of our Directors and key managers serve in voluntary basis on the Executive Committees of the following associations, in order to contribute to the overall development of the industry.

The Commercial Director of Singer (Sri Lanka) PLC serves in the Executive Committee of the Ceylon Chamber of Commerce and is the immediate Past President Chairman of the Import Section of the Ceylon Chamber of Commerce. He is also the past-president of the Sri Lanka-China Business Council. As an indication of the Company’s involvement in promotion sports and youth development, he is the immediate past president of the Mercantile Cricket Association.

The Group Manufacturing Director of Singer (Sri Lanka) is an Executive Committee Member of the Industrial Association of Sri Lanka; the Co-ordination Committee for

the Implementation of the Montreal Protocol in Sri Lankan; and the Environmentally Friendly Refrigeration Association of Sri Lanka, under the patronage of the National Ozone Unit.

The Marketing Director of Singer (Sri Lanka) PLC is on the Board of Management (Vice-President) of the Management Club.

The Chief Executive Office of Singer Sri Lanka serves in the capacity of Vice-President of the Rotary Club of Colombo North.

Fundamental Framework - Our Vision, Mission, Values and ObjectivesOur Vision, Mission, Values and Objectives are found on page 3 of this Report. As a company that is committed to creating shared value, we ensure that our business practices are aligned with our social goals. Such values are built into the operational style and structure of the organisation so that these areas routinely get evaluated in the process. As a customer-centered company, we are always focused on enhancing customer satisfaction, convenience and service quality. By expanding our distribution channels, we make it easier for customers to get the products and services they need. We also upgrade and refurbish our retail outlets at least once in every five years. As a dynamic and changing company with customer lifestyle changes, we always focus on new market developments with changing of new product range like digital media products, agro products and personal computers, etc. We reward customers with loyalty programmes and provide customer guidelines, merchandising manuals and recipe books. Our Sanasuma extended warranty programme gives shoppers confidence in their purchase. We also operate a call centre hotline to ensure that any issues are quickly directed to the relevant division so that a solution can be provided. As a responsible corporate that works to benefit the community, we have very close links with the society in which we operate. We work on the principle that we give something back by means of conducting many community support projects. This report provides ample examples of the amount of projects conducted by the Company within a year. We believe in working closely with our suppliers in order to create shared values, for both parties. As detailed in the Customer and Supplier Relations Section, we try to help our suppliers reach new standards and share our market intelligence with them in order to improve existing products and develop new ones. Overseeing Economic, Social and Environmental Performance as the highest governance body, our Board of Directors is responsible for all strategic planning. This includes the formulation of our strategic vision and mission, setting our overall corporate policy, monitoring performance and reviewing risks and all major investments. The Board provides a mechanism for critically reviewing all aspects of the Company’s operations. Board members, we believe in working closely with our suppliers in order to create shared values, for both parties. As detailed in the customer and supplier relations section, we try to help our suppliers reach new standards and share our market intelligence with them in order to improve existing products and develop new ones.



Overseeing Economic, Social and Environmental PerformanceAs the highest governance body, our Board of Directors is responsible for all strategic planning. This includes the formulation of our strategic vision and mission, setting our overall corporate policy, monitoring performance and reviewing risks and all major investments.

The Board provides a mechanism for critically reviewing all aspects of the Company’s operations. Board members exercise independent judgment in performing their responsibilities, which include strategy and risk management planning.

Both, Chairman and Group CEO ensure that good governance is practiced through the organisation, seeing to it that both Executive and Non-Executive Directors are able to participate effectively in decision-making and bring independent judgment to bear on issues of strategy, performance and risk. The Board also seeks independent professional advice from third parties such as the Company’s External auditors and other professional consultants when deemed necessary.

Finance, Sales, Marketing, Factories and Commercial Directors who participate in the Board as Alternate Directors also provide additional information and expertise to the Board. Operational decisions are taken by our Executive Committee which meets every Monday. In addition, a Management Review meeting is held once a month.

Our annual plan sets out the objectives and plans for all our business units and divisions. Management Committees translate these objectives into actionable tasks for Divisional Heads who do the same thing for their charges.

We hold ourselves to internationally agreed upon standards, codes of conduct and principles. For example, our Annual Report includes this Encompassing the Future-based on Global Reporting Initiative Guidelines.

Evaluating Board Members’ PerformanceAs noted above, our Board is constantly evaluating its own performance. Our interactions with stakeholders also allow us to assess our economic, environmental and social performance. In addition to critical self-analysis and stakeholder communication, we also rely upon independent judgments from externally-based professionals, such as our External Auditors and other professional consultants.

The Company’s performance is also judged and reviewed by the Singer Asia Board at Corporate Level as against the Annual Business Plan.

Through our implementation of Global Reporting Initiative Guidelines and our participation in forums, such as Annual Report competitions, we are able to get feedback on our Board’s performance. Other awards and ranking competitions, such as

SLIM-Nielsen Brand Awards, Fitch Ratings, and LMD’s ‘Most Respected Entities’, and the ‘Best Corporate Citizen’ rankings, provide useful external evaluations of the Board’s performance.

The Executive Directors on the Board are very much involved in the day-to-day operations of the business, constantly meeting key stakeholders such as; customers during field visits; meeting suppliers at their manufacturing locations (overseas and local) and also during suppliers’ visit to the Company regular interactions with employees; and other external bodies, such as Chamber of Commerce, rating agencies, governmental agencies, industrial associations, etc., where direct feedback is received.

Our Response to Precautionary ApproachWe understand the need to safeguard the public at large in conducting our businesses. In doing so, we make every effort to ensure that our customers and the community at large are informed of any potential risk that they may face as a result of our operations. We believe in anticipating possible health or environmental risks and being proactive, instead of just responding to them when they arise. The shift in our furniture manufacturing plant from UV-based paints to water-based paints and very early adaptation to CFC free gas and early adaptation of zero ozone impact 600 natural refrigerated was not promoted by any legal regulations but rather by our concerns about possible environmental risks.

We are mindful of the precautionary approach. For example, our voluntary partnership with the Central Environmental Authority in the National Co-operate E-Waste Management project was driven by our belief in the need to be proactive in safeguarding the environment and the general public. As detailed in the Environmental Relations sections, we have led the way in collecting e-waste which may, one day pose a risk to the environment as well as to health and safety of the public.

We also strive to increase the recyclable content of all our products and packaging. For example, by sub-substituting natural recyclable materials like recycled paper for polystyrene in our packaging, we have been ahead of the regulatory requirements.

Commitments to External InitiativesAs noted earlier, we act in accordance with the rules and regulations published by the Colombo Stock Exchange, the Code of Best Practice on Corporate Governance issued jointly by The Institute of Chartered Accountants of Sri Lanka and the Securities and Exchange Commission of Sri Lanka and the Companies act No. 07 of 2007.

Our Annual Report included a Sustainability Report based on Global Reporting Initiative Guidelines.

We comply with all environmental regulations that are applicable to our operations and often go above and beyond our statutory duties to the environment. For example, we were one of the first



companies to sign up with the Central Environmental Authority to ensure the efficient disposal of e-waste and have been the most active partner since.

Our manufacturing division - Piliyandala Factory and distribution centres have obtained and conform to many ISO 9001-2008 certifications.

Stakeholder EngagementsWe engage with all stakeholders including customers, employees, shareholders, bankers, financial institutions, depositors, Government authorities, suppliers, competitors and the community at large.

As an organisation that does not discriminate, we engage with all our stakeholders. However, we do not engage with parties that do not uphold the principles that Singer practices, based on our Code of Conduct. We do not entertain approaches by parties who are interested in illicit gains or who do not abide by our corporate values.

For example, when selecting our suppliers we evaluate them on the basis of their standing in the industry and their demonstrated commitment to globally accepted business practices. Our diversified retail strategy means that we are able to engage with different consumer segments and, as in our Mission Statement, provide them with quality products and services at fair prices. Our successful history as an upstanding corporate citizen is testament to our philosophy of engaging diversified retail strategy means that we are able to engage with different consumer segments and as in our Mission Statement, provide the with quality products and services at fair prices.

Our successful history over 135 years in Sri Lanka and 160 years worldwide as an upstanding corporate citizen is testament to our philosophy of engaging stakeholders on a fair and unbiased basis.

We engage with our customers through our retail channels which form one of the most extensive retail networks in the island. This engagement occurs on a daily basis. Our hire-purchase schemes allow us to meet our customers on a regular basis, which gives us greater insight into their needs and suggestions.

We spend approximately 4% of our revenues on advertisements/promotions to closely engage with our customers.

We also operate a call centre that not only addresses customer queries but also actively engages with customers through outgoing calls in order to get a better sense of their needs. We solicit customer feedback through questionnaires and conduct Mystery Shopper Programmes to get a sense of what our customers experience.

Our engagement with the employees is through informal daily meetings and through more formal forums such as Management and Divisional meetings. Our HR Division is responsible for ensuring that employees get the support they need to achieve their full potential. Please find details on the activities and programmes through which we engage with our employees under the Employee Relations Section of this report.

We engage with shareholders through General Meetings and by actively soliciting their opinions, suggestions and criticisms through written correspondence with our Compliance Officer or Group CEO. Our Quarterly/Half Yearly performance reports update our shareholders of our performance.

Our engagement with suppliers and services providers is through regular visits to their manufacturing facilities, both in Sri Lanka and abroad. We also encourage them to help create shared value by partnering with us in our shared success. For example, we actively solicit their suggestions on product development and share our engineering and technical expertise with them through training workshops. Our insistence on a shared value approach to supplier relations has made Singer one of the most preferred partners for many foreign and local brands. Vis a vis our employees, marketing team, technical teams too visit our suppliers manufacturing facilities and share knowledge about products quality and adequate changes of our products.

We engage with the community at large in innumerable ways. We are extremely active in the community as we believe that our business growth must be aligned with social growth. Please see the Community Relations Section for a more detailed breakdown of our approach.

Our stakeholders have a very comfortable relationship with our Company. Our Encompassing the Future strives to give our stakeholders a sense of sustainability of our operations.

For example, our shareholders’ primary concern is the financial performance and transparency of the Company. In the year under review, Singer (Sri Lanka) PLC performed exceptionally well, declaring a generous dividend to shareholders. We address their concerns about transparency by ensuring that our operations and organisational reputation adhere to the highest standards of integrity.

As Sri Lanka’s leading retailer of consumer durable goods, Singer has addressed the after-sales service concerns of our customers establishing an extensive island-wide service network including 9 regional service centres and over 100 franchise service agents which deliver industry-best levels of convenience.

We also address customer concerns about pricing by ensuring that they pay a fair price. For example, when the Government lowered import duties on many electronic items, Singer was the first to pass on the benefit to the consumers, forcing our competitors to follow suit.



We have been successful in anticipating and adapting to the changing needs of the modern consumer by providing an unrivalled choice of products, services and payment options through many channels to cater to different customer groups and market segments. For example, we have implemented a unique hire-purchase system (instalment payment system) that has elevated the living standards of many Sri Lankans by making our products more affordable.

With respect to our employees, we ensure that we provide a meritocratic working environment with no bias, favouritism or harassment, as well as compensation packages that are above industry standards. We also give them the opportunity to develop by implementing Training and Career Development initiatives. As an indication of the upward professional mobility at Singer, presently there are four Key Managers who have risen to their current positions after starting their careers at a junior level.

Our suppliers are primarily concerned about getting paid on time and ensuring that there is a consistent order pattern in order for them to plan production on a long-term basis. As noted in the Customer and Supplier Relations Section, we strive to provide them with regular orders at fair costs, allowing them to have a sustainable business and to grow with us. The support we give to the local industry has allowed many entrepreneurs to build their businesses from cottage industries to SMEs. Our success in this regard is reflected in the long-term relationships we share with many of our suppliers.

We address the Government’s concerns with respect to collecting due taxes by ensuring that we make all payments on time. We also comply with all regulations from environmentally-friendly operations to labour conditions to import duties. The communities that we operate in are largely concerned about environmental impacts, the fair treatment of locally employed workers, assistance in times of need and creating Shared Values by upgrading local infrastructure. Our involvement in this respect is extensively detailed in the Community Relations Section of this report.

We even address our competitors’ concerns about a level playing field by ensuring that our business practices adhere to high ethical standards. For example, we never boost our business by denigrating our competitors

Economic PerformanceIn the year under review (2012), the Singer Group retained its position as the No. 1 Consumer Retailing Company in Sri Lanka. The Group achieved its highest ever revenue of Rs. 25.4 billion, a growth of 15% over prior year. Net profit for the year was Rs. 1.2 billion and Group comprehensive income for the year was Rs. 1.3 billion.

The ‘Value Added Statement’ shown below indicates the wealth the Company created and its distribution, including the contribution of the Company to the Government’s revenue. The Group generated Rs. 6,874.2 million in the current year as against Rs. 6,193.3 million in the prior year.

Statement of Value Added

Category2012

Rs. ’000 %2011

Rs. ‘000 %

Group Turnover - Gross 27,082,125 23,703,893

Other Income 190,545 134,710

Less - Cost of Material and Services 20,398,437 17,645,323

Value Added 6,874,233 100 6,193,280 100

Distribution of Value Added

To Employees and DealersSalaries, Commissions and Other Benefits 2,820,748 41 2,534,018 41

To GovernmentIncome Taxes, Turnover Taxes, Value Added Tax and Other Taxes 1,709,162 25 1,672,240 27

To Banks, Deposit Holders and Other LendersInterest and Bank Charges on Borrowings and Customer Deposits 954,965 13 497,625 8

To Suppliers of CapitalDividends to Shareholders 751,258 11 939,072 15

Retained for Reinvestment and Future GrowthDepreciation 251,617 4 223,054 4

Retained Profits 386,483 6 327,272 5

Value Distributed 6,874,233 100 6,193,280 100



Impact of Climate Change Changing climate patterns have had an impact on the Group performance. In 2012, there was a drought which affected the agricultural output which destroyed the harvest and led to power cuts in the months of July/August and heavy rains and floods in February. As a result of all this the business environment was not as favourable as it was in the last two years.

While there have been some short-term negative impacts on our performance, effective measures taken by us enabled us to increase our sales over prior year.

Government AssistanceNo financial assistance has been received by the Group.

Environment

At Singer Sri Lanka, we understand that, due to our size and island-wide reach, our policies and our day-to-day operations can have impact on the environment. From importation manufacturing, packaging to distributions we are continuously examining the various components of each product’s lifecycle and each stage of our operations in order to assess and minimise our environmental impact.

The leading role we play in the National E-Waste Management Programme is a perfect illustration of how individual threads can come together to form a brighter picture. We understand that our electronic goods, if improperly disposed, can have a detrimental effect on our world. Instead of ignoring these big-picture ramifications, we work with our customers and the Central Environmental Authority to ensure that any negative impact is minimised. By mobilising our workforce and our customers, we have succeeded in collecting 174 tons since we signed onto the programme, the most by any corporate partner. In year 2012 alone we have collected 82 tones of E-waste through our retail network which prove our contribution on protecting the environment for future generations.

This approach is characteristic of our environmental ethos. From our manufacturing facilities to our retail operations, we actively strive to weave the threads of our strategies, operations, policies into a better world. For example, we promote the energy efficiency of our LED televisions and energy efficient products so as to turn more customers on to environmentally-friendly purchases.

Our Piliyandala Factory has acquired all licenses and certifications needed to comply with the Central Environmental Authority’s regulations. Our manufacturing factory in Piliyandala is licensed under the Environment Protection License (issued under Section 23B of the National Environment Act No. 47 or 1980).

We work hard to ensure that our retail showrooms too engage in and promote eco-friendly practices.

We haven’t enacted a formal environmental policy but we are guided by one simple principle: which we have included in Singer’s value statement. Minimise and mitigate any negative impacts that stem from our manufacturing, logistical, marketing, and retailing operations. This principle is at work in all our operations and also animates our interactions with clients. We invest heavily in the promotion of energy-efficient products, leveraging our marketing and sales strength to steer customers towards more environmentally friendly products. We also consult regularly with environmental experts to solicit their views on the measures we take to protect our operating environment and the planet.

Each and every one of our shop assistants, call centre staff and CSR Committee members actively promote environmental management. For example, all our employees are tasked with spreading awareness about e-waste management. Our training department also conducts training programmes on energy saving for our field staff.

We have designed a logo that encapsulates our position on ‘green thinking’ and we use this on all relevant publicity materials. For example, we use this logo on all products that use energy-saving technology, biodegradable plastics or corrugated cardboard in place of rigifoam.

As noted, we have also used our marketing muscle to build awareness of e-waste management through advertising and PR platforms, such as radio, press ads and press releases. We also use our significant purchasing power to encourage manufacturers to act in a more environmentally sustainable manner. During our regular evaluations of suppliers, we pay particular attention to their manufacturing processes and their compliance with universally accepted environmental practices. If we find that a given supplier is not adhering to our guidelines, we will either drop it from our list of approved suppliers or take measures to help it upgrade its standards.



National and International Awards ReceivedWe received an E-Waste Management Award from the Central Environment Authority (CEA), in recognition of our outstanding contribution to this critical initiative.

Think Green, a pioneer in providing safe and reliable electronic waste management in Sri Lanka, has been approved by the Central Environment Authority of Sri Lanka and is an exporter, operating under the regulations of UN Basel Conventions. In a recent communiqué they said, “We are glad to partner with Singer, one of the leading and oldest manufacturers and retailers of Electronic/Electrical appliances in Sri Lanka - a Company that has taken many initiatives in proper management and disposal of e-waste demonstrating responsibility of a good corporate citizen. Many people who couldn’t dispose their e-waste in a safe manner, now can hand over with ease to the respective showrooms of Singer island-wide for recycling. On Behalf of the Green Industry, we thank Singer Sri Lanka for making our environment healthy and safe by facilitating to accept e-waste from public through their 400 collecting centres island-wide. As we work towards creating a healthy environment, Think Green will continue to provide innovative solutions to make Sri Lanka an environmentally sustainable destination of Asia”.

Training/Educational Programmes for Employees on Environmental Protection, Ecosystem Services and ConservationEach and every one of our shop assistants, call centre staff and CSR Committee members actively promote environmental management. For example, all our employees are tasked with spreading awareness about e-waste management. Our training department also conducts training programmes on energy saving for our field staff.

In order to prepare our staff, we organised a seminar on the 11th of May to educate them about e-waste and the importance of proper disposal and management. This seminar was led by the Assistant Director of the CEA’s Waste Management Unit.

For the week beginning on 14th May, we also used our Theme of the Week mechanism all weekly theme develop to the Waste Management, which reaches all our retail outlets, to give staff the tools and knowledge required to drive the point home to customers.

We also initiated the first annual nationwide Singer E-Waste Collection Day on the 19th May 2012, which included sending collection trucks from house-to-house. We also utilised press and electronic media to spread public awareness of the pressing issue of e-waste. We distributed leaflets and banners to all Singer Plus, Sisil World, Singer Mega, and Singer Homes showrooms, as well as to all our service centres so that each location could educate customers about proper e-waste management. The Singer E-Waste Collection Day was a massive success collecting 17 tonnes with some showrooms extending door-to-door collections for an additional week, depending on the number of requests received from the public. Singer Sri Lanka invested more than Rs. 1,650,000 just on publicity and awareness-building for the Singer E-Waste Collection Day.

We Believe in…Education

Education would be much more effective if its purpose was to ensure that by the time they leave school every boy and girl should know how much they do not know, and be imbued with a lifelong desire to know itWilliam Haley

We received an E-Waste Management Award from the Central Environment Authority (CEA)



Singer’s commitment to education is a perennial one. Buoyed by the resounding success we had in the 160 schools project we undertook in 2011, to commemorate the anniversary of our 160 years of international operations, we decided that in 2012 to launch a further project covering 100 schools. We can contribute money for something that lasts a short time, or we can invest it on something that lasts a lifetime. That is why we believe in education and invest continuously in these projects. Our aim in undertaking these projects is to help break the persistent inequality that persists in our society and promote equity and opportunity for the downtrodden. We firmly believe as Aristotle said ‘Education is an ornament in prosperity and a refuge in adversity’.

In 2012, we renewed our commitments to education by initiating our ‘100 Schools’ project where, once again, we invested in basic infrastructure for 100 rural schools around the country. From constructing school buildings and children’s parks to installing water supply systems and donating musical instruments, we leveraged our financial resources as well as employees from our Head Office, our factories, our retail showrooms and our service centres. For the second year in a row, we were humbled by the gratitude shown by beneficiaries and inspired by the compassion of our employees.

Working hand-in-hand with community stakeholders, including parents, teachers, and students, we feel that we have helped improve education standards in areas where they were most lacking. Once again, our island-wide reach allowed us to identify some of the most needy schools in Sri Lanka. All in all, we have helped over 75,000 school children through these projects. By continuing our commitment to our children, wherever they may attend school, we hope to build a better Sri Lanka.

AISEC education programme - We entered into an agreement with the International AIESEC programme to bring foreign English teachers to rural Sri Lankan school, our sponsorship was helped in upgrading the level of English-language education, a key determinant of success for students, around the country.

Sponsorship of British Council Workshop on Teaching and Learning in the Primary Schools - We sponsored this workshop organised by the British Council that trained government and private primary school teachers from Kandy, Kurunegala, Anuradhapura, Matale and Nuwara Eliya.

Anada Abhiman - We donated Rs. 1.5 million to help Ananda College organise an educational, cultural and trade exhibition on their 125th anniversary.

Sponsorship of four students at the Ceylon School for the Deaf and Blind - For the third successive year, we have sponsored four children’s education at this School.

Donation to Asia Pacific Regional and Sri Lanka Centenary Jamboree - This event for Scouts from the Asia Pacific region was held in Dambulla and celebrated the organisation’s history of molding the characters of young people so that they may become good citizens.



Sponsorship of ‘EDEX’ - For the 8th consecutive year, we were the Platinum Sponsor of this event, which aims to give guidance to both students and parents about educational and employment opportunities.

Future Minds Exhibition - This event, held in Colombo and Kandy, gives young students guidance for their future careers, providing an overview of industries and potential job opportunities. We have been the main sponsor of this event since its inception in 2006 and continued our championing of children.

Healthy Body Healthy Mind

SINGER Sri Lanka’s No. 1 Sports Promoter

For more than 20 years, our name has been intertwined with Sri Lankan sports. We have invested more than a billion rupees in Sri Lankan sports teams, events and infrastructure. In sports, just as in CSR and our other activities, we look at the big picture, instead of focusing on the short-term buzz that may come from sponsoring a particular event. That’s why we have been involved with such a broad range of sports for so long. For example we have backed the Bradby Shield for over twenty years, the annual Hill Club Tennis Tournament and the Fox Hill Supercross, for many years.

Our support extends to the comprehensive development of our country’s sporting infrastructure, which includes providing employment to sportsmen, investing in the upkeep and upgrading sports grounds and encouraging our children to reach and surpass international sporting standards. We focus on sustainable improvements and continuous progression, putting the pieces together patiently in order to build winning teams.

Obtaining/Renewing Environmental Compliance CertificationOur factory at Piliyandala has acquired all licenses and certifications needed to comply with the Central Environmental Authority’s regulations. Our manufacturing factory in Piliyandala and Ratmalana are licensed under the Environment Protection License (issued under Section 23B of the National Environment Act No. 47 or 1980).

We work hard to ensure that our retail showrooms engage in and promote eco-friendly practices.

Reducing EmissionsOur operations generate the following air emissions, liquid effluents and hazardous and solid wastes:

Saw dust Smoke Paint fumes Wood cut-offs Particle boards Plastic Iron scraps

Our installation of state-of-the-art machinery at our incineration and extraction plants, ensures that saw dust is incinerated and segregates pollutants and impurities from clean air, allowing only clean air into the environment. Waste materials are then channelled into water troughs, where they can be collected, treated and disposed of properly. We have also installed a separate dust collecting system in our sofa factory that uses fine filtration to prevent air pollution.

We use water-based paints, which are non-volatile and do not lead to toxic emissions during the curing or application processes, instead of nitrocellulose paints which are significantly more harmful. We have also replaced all of our conventional paint booths with water curtain paint booths, thereby dramatically reducing any air emissions caused by spray painting.

We are constantly seeking out new ways of reducing our environmental footprint. One such initiative is our plan to ensure that all our shopping bags are made out of biodegradable materials within 2 years. Our factory in Piliyandala has already started using corrugated cardboard as a packaging material for our water pumps, instead of regifoam.

Reducing WasteAddition to the above, following steps has been taken to reduce waste include on day-to-day operations:

1. Introduced SMS receipt system which enhance to reduce use of stationary.

2. After a thorough study, changed our computer-generated receipt system which too helped to reduce stationary usage.

3. Use of centralised printing instead of individual printers for each other.

4. Reuse of single side printed A4 sheet for rough work.

At Singer Sri Lanka, we reduce, recycle and reuse whenever possible. For example, we reuse wood cut-offs, particle boards and plastics. Otherwise, we give them to third parties, who can then make use of these materials in a sustainable manner. We also sell our iron scraps to collectors. These activities not only protect the environment but also help develop new environmentally-friendly competencies in third parties.



Reducing PollutionWe have invested Rs. 2 million in order to construct retaining walls at our factories that reduce soil erosion.

We have labelled dustbins at our offices so that waste materials are separated by type and recyclability.

During the period under review, we planted 10 Kaluwara trees at our Piliyandala factory so as to aid in the absorption of carbon dioxide. These trees will also provide significant shade and cooling, reducing the future expenditure of energy on cooling the factory premises. This is in addition to over 100 of Mahogany trees planted previously.

Energy Saving Measures and Renewable Energy UseEnvironmental conservation and resource efficiency are accorded paramount importance at Singer Sri Lanka. The following practices have been carried out at the various locations in which we operate:

Furniture and Agro Products Manufacturing Facility at Piliyandala In order to reduce energy consumption, specific task lights are

used instead of general lighting.

Old high-consumption compressors were replaced with new energy-efficient compressors that do not need to be switched on at all times. This new system also eliminates air pressure losses, saving yet more energy.

Incandescent street lights were replaced with fluorescent lights.

The number of street lights used were reduced.

Asbestos roofing was replaced with transparent sheeting in order to maximise natural lighting. This, in turn, allowed for a reduction in the number of light fixtures as well as the replacement of mercury lamps with low-power fluorescent bulbs.

Stricter control over thermostat settings on air conditioners to reduce energy use.

Pressure regulators are used in order to manage energy use more effectively.

A more efficient air distribution system has been implemented, allowing for more effective cooling at a greatly reduced cost.

Air leaks in the compressed air system have been sealed, leading to lower energy costs.

Trees have been planted alongside buildings housing air-conditioners, resulting in a reduction of the air-conditioning system’s energy requirements.

Portable dust extractors are used whenever possible so as to avoid the greater energy cost of the main dust extractor.

Head Office and Branches All office rooms now use energy saving lighting.

Switching off lights at times of non-occupancy.

Switching off air conditioners by 5 p.m.

Air conditioners are not used on most of the weekends and holidays, thereby saving energy.

Use of energy-saving option on fax machines and other office equipment

Retail Operations/New Product Introduction Introduction of energy efficient product. Eg. 60% Energy Saving

LED TVs, All in one PCs, Pressure Cookers, Eco Thermo Pot, Induction Cooker and introducing new technologically advanced refrigerator range using zero ozone impact Gas R 600.

Singer Mega has partnered with Solar Therm to offer customers environmentally-friendly solar power solutions.

Waste Water Treatment Reuse of Waste Water Treatment and Water ConservationSinger (Sri Lanka) does not engage in activities that result in polluted water leaving any of its premises, whether it’s a factory or retail showrooms. Therefore, no waste water treatment programme is necessary. We impress the importance of water conservation on all our workers, whether they are stationed in factory or at our Head Office. Through gentle reminders and sometimes stern reprimands, we push our employees to respect the ecology by using water sparingly.

Labour Practices and Decent WorkAt Singer, we believe that empowered employees are the best employees. Our ability to operate successfully and continue the development of our business is closely dependent on our employees. Having been in business in over 135 years in Sri Lanka, we understand that true sustainability comes from nurturing our employees, guiding them to reach their potential and rewarding them equitably for their hard working.

We adhere to rules and conditions of employment that respect our employees, safeguard their rights under all labor regulation and standards. No employees is subject to any discrimination in employment including hiring, compensation, advancement disciple, termination or retirement. At Singer every employee is treated with respect and dignity.

It’s no surprise then that many of our employees have been working at Singer for more than 2 decades, growing in step with the Company. We are seen as one of Sri Lanka’s best employers, a validation of our dedication to developing careers and lifelong skills, our emphasis on equal-opportunity, merit-based professional culture and our eagerness to resolve work and private issues in a mutually beneficial manner.



We put our expertise in planning and analysis to good use by evaluating all of our employees on a regular basis. We carefully appraise their skills, training, accomplishments, professional goals and other relevant factors in a constructive manner, giving them every possible opportunity to succeed. As part of this continual process, we have designed and implemented holistic programmes for every employee, including formal training sessions, informal mentoring and regular feedback.

It’s quite simple - we champion our people because we believe in ourselves. It’s a confidence that comes out of knowing our employees, understanding our strengths and continuously striving for higher standards. It’s a confidence that arises from knowing that our dedication to Corporate Social Value has stood us in good stead for 160 years.

Type of Employment No. of Employees

Full time 1,475

Part time Nil

Singer’s harmonious relations with its employees are reflected in the fact that there has not been a single industrial dispute in many years.

Remuneration and BenefitsAs a reputed corporate citizen Company Singer ensures that our employees are received above the industry average remuneration package including other finance and other benefits. Some valuable finance and other benefits that Company provide are as follows:

Housing LoansEmployees with five years’ service are eligible for financial assistance from the Company. This sum is meant to cover the initial expenses of building a home while they await a loan from a financial institution.

Distress LoansIn case of emergencies such as a sudden illness, a death in the family, damage to homes due to flooding or other acts of God, urgent home repairs, a family wedding etc., employees can avail themselves of distress loans.

Vehicle/Motorcycle LoansPermanent employees belonging to specified categories can apply for interest-free, five year loans/low interest loans.

Maximum loan amount which is decided by the management from time to time or vehicle valuation whichever is lower, be granted on an interest-free loan or at special low interest rate.

Educational Aid SchemeSinger (Sri Lanka) has two mechanisms in place to help employees with their studies:

1. The Company will grant a lump sum of Rs. 225,000/-, in exchange for which the employee must serve Singer (Sri Lanka) for eight years. This amount needs to be repaid only if the employee leaves the Company before fulfilling his/her eight year term. This is mostly granted for postgraduate studies.

2. The Company will reimburse two-thirds of the cost of a particular course if the employee is successful in the final examination.

Age Analysis 2012

Key & Senior Management

Middle Management

JuniorManagement

Non-Management

Total

21-30 29.2% – 1 23 406 430

31-40 43.1% 9 42 98 486 635

41-50 21.1% 17 37 16 241 311

Above 50 6.6% 16 12 9 62 99

Total 42 92 146 1,195 1,475



ThE fORmidaBlE TalEnT Of PEOPlEWe’re talking of our people here...the family of Singer employees; with their years of industry experience, loyalty and longevity of service, passion for the job and constant skills and personal development...they truly ARE a formidable talent!

Aruna Kolambage, Terrence Martyn, Sujeewa Perera, Chitral Perera, Ransiri Perera(Left - Right)


Professional SubscriptionsSinger (Sri Lanka) will pay subscription fees on behalf of its Managers to one professional body.

Death DonationIn the unfortunate event of an employee’s death, his/her family will receive a sum of Rs. 50,000/- in addition to six months’ salary. In the unfortunate event of the death of an employee’s spouse, child, parent or unmarried sibling, the employee will be given a sum of Rs. 25,000/-. Death Donation Fund is a contributory fund by all permanent employees of the Company.

Medical BenefitsSinger (Sri Lanka) will reimburse medical expenses incurred up to a predetermined amount. The Company provides hospitalisation and OPD treatment coverage to all staff and their immediate family members. Under this scheme the Company reimburses medical expenses incurred up to predetermined amounts according to the employee grade. If the expenses exceed this specific amount, then the employee and Company share the balance equally. In some special cases, the Company will fully reimburse all medical expenses. Accident CoverThe Company provides this facility to all staff, whose line of work exposes them to a greater risk of accidents, either at the workplace or because their job involves extensive travel.

Travel ExpensesSinger (Sri Lanka) provides several facilities to employees who must partake in official travel, including vehicle maintenance, transport allowances and reimbursement of travel expenses. The Company divides its staff into two categories, Field Staff and Base Staff and then allocates vehicle and transport allowances depending on these two categories, as well as the respective grade that the employee belongs to.

Discounted SalesAll products that are marketed by Singer (Sri Lanka) are offered to its employees at discounted prices and on easy payment terms.

UniformsAll employees working at the Company’s factories, service centres, distribution centre and branches are provided with uniforms.

LodgingSinger (Sri Lanka) reimburses all expenses incurred by field staff staying at approved hotels while on official business purposes.

Sports and Recreational Facilities

Singer teams have represented the Company at Mercantile tournament level in Cricket B and F Divisions, Hockey, Football, Rugby, Netball, Badminton etc. and have won many awards during the last year. To support our employees in this regard the Company has invested in sports facilities. In addition, the Piliyandala factory has built badminton and volleyball courts where as the Distribution Centre has built a badminton court in their premises while the head office is home to a fully-equipped gym.

Singer organise sports days for present and past employees. Also with the participation of factory and other sister companies, Singer held its Group sports day and Inter Department Cricket Tournament to further strengthen the unity among its employees.

Other Leisure FacilitiesThe Company provides annual holiday plans for all levels of management staff to spend 3 days with their families in selected star class hotels as an appreciation of their dedicated services to the Company. Also, the Company organises ‘Annual Gents Picnic’ and ‘Annual Ladies Picnic’ separately for Singer, factory and distribution centre.

We also organise a Christmas party for employee’s families and kids an eagerly anticipated event in the Company’s social calendar. The 2012 Christmas party was held at Waters Edge Battaramulla, with over a thousand Singer employees and family members attending.



Trade UnionsAll permanent clerical, supervisory, technical and allied grade employees, as well as permanently employed drivers, packers and cleaners are unionised under the Commercial and Industrial workers’ union. Permanent workers employed in production are organised under the Inter-Companies’ Union (ICEU).

Singer (Sri Lanka)’s amicable relations with its employees are reflected in the fact that there hasn’t been a single industrial action in many years.

The Company conducted that event and more than 100 children participated and shared their abilities.

As a reputed company we ensure to shine the skill of our employees’ children for this, Kids Art Competition is one of the major events in every year. This year too, the Company conducted that event and more than 100 children participated and shared their abilities.

In accordance with our respect for the diversity of religious beliefs found in Sri Lanka, we organise religious ceremonies for all faiths annually.

Labour RelationsCollective AgreementsWe have signed three separate Memorandums of Settlement (MOS) with the following branch/parent unions with regards to salary revisions.

With the Commercial and Industrial Workers Union Clerical branch applicable to clerical, allied and technical-grade employees.

With the Commercial and Industrial Workers Union Non-Clerical branch applicable to manual workers. Ex: Drivers and packers.

With the Inter-Company Employees Union, applicable to manual workers attached to our factory.



Staff Strength Group


Middle Management

Junior Management

Non- Management

Total

2012 42 92 146 1,195 1,475

2011 41 63 145 979 1,228

2010 38 58 133 918 1,147

2009 31 63 135 887 1,116

2008 31 60 133 923 1,147


Middle Management

Non-Management

Junior Management

Employee functional levels

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HR Policies and ProceduresEliminating DiscriminationCodes of ConductSinger (Sri Lanka) has adopted the Code of Business Conduct devised by Singer Asia Ltd., which clearly sets out every employee’s responsibilities with regards to compliance with national laws; refraining from bribes and political contributions made on behalf of the Company; divulging confidential information and engaging in insider trading; recording false, inaccurate or incomplete information and avoiding conflicts of interests.

Whistle-Blower PolicyWith the purpose of creating open communication regarding the Company’s business practices and to protect employees from unlawful retaliation and discrimination this policy is established.

Grievance HandlingGrievance handling is central to the Company’s commitment to fairness. It gives every employee an opportunity to air his or her grievances and demand remedial action. Singer (Sri Lanka) has implemented a 3-stage procedure to deal with such grievances, as detailed below. Fairness and impartiality are emphasised at each stage and the employee is protected from any retaliatory action.

It is instructive to note that no grievances have reached the 2nd level, proof of the procedure’s efficacy.

1st Level If an employee has a grievance, it should be brought to the attention of his or her immediate superior.

2nd LevelIf the grievance has still not been addressed to the satisfaction of the employee, it will be referred to an Ombudsman Committee appointed by the CEO.

3rd LevelIf the Ombudsman Committee has been unable to satisfactorily resolve the employee’s grievance, it will be referred to a ‘Level 3’ Committee appointed by the CEO.

Further ActionIf, after having progressed through 3 stages, a solution to the original grievance has still not been found, the CEO will intervene directly and propose a fair and just settlement.

Occupational Health and SafetyAs a large industrial company, Singer (Sri Lanka) knows the paramount importance of health and safety. It strives to uphold the highest standards of safety and health in order to ensure that employees and workplaces are both accident-free and hygienic. The Company has appointed a Safety and Welfare Committee, headed by the Director - Human Resources and ably assisted by twelve other members. This Committee meets quarterly to evaluate the health and safety records of every division and department and to decide on issues relating to the health and safety of employees in the workplace.



Proactive and Reactive Mechanisms in place to ensure Occupational Safety and HealthSinger (Sri Lanka) has instituted several proactive and reactive measures in order to ensure that the highest standards of occupational safety and health are safeguarded. The following measures have been put in place:

1. Safety and Welfare Committee - Meeting once a quarter, as well as in cases of emergencies (such as bomb threats etc.), this Committee is charged with reviewing the Company’s occupational safety and health records besides making decisions regarding the health and safety of employees in the workplace.

2. Contingency Plans - These plans are activated in the event of an emergency, such as a fire.

3. Fire drills and training on fire fighting and handling of equipment.

4. Incineration of saw dust - Saw dust is incinerated without being exposed to the environment so that the factory and general environment are not polluted.

5. Mandatory use of personal safety gear on factory floor, such as helmets, masks, ear plugs, respirators, safety shoes, etc.

6. Medical clinics.

Training and Development Our Training PhilosophyFinding new leaders is critical to the successful growth of any organisation. The fact is that this growth is greatly impacted by the numbers of leaders we recruit. Following are the steps we adopt through the concept of multiplying our leadership base:

Catch the vision of multiplication It’s hard to sell something you don’t believe in.

Be intentional You must make a conscious decision to replace yourself. Multiplication must be a part of your strategy and there must be a system of leadership recruitment.

Start early Replace leaders before you need them.

Invest in your own personal growth You can’t take people where you haven’t been or aren’t going.

Humble yourself Leaders must not be afraid that new leaders could lead better than them. Allow people to shine under your leadership and it will only advance your ability to lead. The good news is that today’s generation likes honesty. They will follow you more if there is a direct benefit to them in doing so and if they trust your integrity.

Share responsibilities early The easiest way to learn something is to do it and the more ownership you give to people the more they will be motivated to participate.

Identify potential Look for the good in people. What do they have that attracts people to them.

Create an environment conducive to produce leaders Leaders don’t develop well under a dictatorship. If people are afraid to have an answer under your leadership for fear of being wrong, they are less likely to try to have an answer.

Recruit Don’t do the sign up method. The best quality people are recruited.

We find people with a personal ask.

Lead for life change Some people will experience their greatest life change only when they are leading others or have some sort of responsibility for leadership. Nurture potential leaders knowing that part of their maturity will be that step of leadership.

Investment in Training and Number of People TrainedThe total investment made by Singer on training and development in 2012 was Rs. 22.6 million, in both local and foreign training.

Following is a summary of major categories of training, number of personnel trained under each particular category and the average cost incurred per person.

Type

No. of Employees

TrainedPer-Head Cost

(LKR)

Operational and Internal 2,740 2,332

Product Training 1,670 1,669

External Training 120 23,240

Foreign 17 267,757

We place lot of importance to our employees’ training programmes. Our recruitment process forms the first stage of training. Following are the steps we follow in these two important areas:



1. Be Real During the Interview ProcessIf we identify a prospective employee, we don’t succumb to the temptation of sugar coating the job. If we don’t share realistic job expectations before hiring, we can expect a disillusioned employee. However, if this prospect still wants to come on board after knowing the downsides of the job, he will stay committed to our company during the good times and the not-so-good times.

2. Be a Leader, Not a BossEmployees will repeat what they see you doing - not what they hear you advising. If we expect our subordinates to be punctual, we shouldn’t show up late our selves. If we want them to be innovative, we need to be constantly tweaking protocol. The difference between being a leader and being a boss is living out the values we expect from our subordinates.

3. Select an Inner CircleWhen employees show great promise, we develop their potential by investing ourself in their lives. We can give our potential leaders something to aspire to by allowing them to see us handle difficult sales calls, respond to dicey challenges from upper management or comfort a subordinate who just learned her husband has cancer.

Great leaders, during the worst of times, do not avoid the situation or put on a false front; they face reality with full commitment to deal with it. When things go wrong with our business, we are doing our inner circle a great service by inviting them to share the struggle as we handle it with integrity.

4. Share the Big Picture VisionWe continually reinforce the big picture, if our employees are going to be passionate about what they do, they need to believe that it is worthwhile, important and making the world a better place. We need to impart the big picture to them.

Identifying Skills that Will Be Required for the FutureWe have adopted a two-pronged approach to identify gaps in our future-readiness and determine the level of training our employees need in order to continue to excel.

Performance AppraisalPerformance Appraisal - We conduct individual performance appraisals on a quarterly basis with a final appraisal done at the end of every year. The appraisal form asks each line manager to assess the given employee’s strengths, weaknesses, and training and development needs, which are analysed and then incorporated into the training plan for the upcoming year.

Annual Training NeedsDivisional Heads at Singer are required to give a detailed accounting of their division’s training requirements in the third quarter of every year. After an analysis of these requirements,

our Training Department schedules and implements tailor-made programmes to address training needs, either through external training that sends individual employees to seminars, conferences, and technical sessions or through internally conducted programmes that train groups of employees in particular skill sets.

Department Heads are also responsible for assessing skill shortages by studying his or her department’s annual performance appraisals and considering the skill requirements needed to successfully navigate future challenges. The Department Head, in consultation with the Training Department, then decides on the training that will be needed by his or her staff in the year to come.

Creating Visibility as a Top Employer BrandSinger (Sri Lanka) Human Resources team participated at the EDEX Exhibition held in January 2012 both at BMICH Colombo and City Centre, Kandy. The objective of this representation at an Educational Exhibition was to create awareness of the Company’s standing as a top employer to work for among school children and those searching for jobs and to give them an insight as to what kind of educational paths would help them in securing their interest jobs in future. We saw a high level of interest shown among all segments of attendees in getting to know about our company and the career opportunities present at Singer.

Initiatives Taken by the Company for Career Progression and Career DevelopmentHuman Resources Department ensure that to conduct training and career development programmes in every year targeting different levels of staff grades to develop their careers at Singer. Many training programmes conducted during this year are as follows:

High Flyers programme for Clerical Staff

Presentation skills programme for District Managers

Outward-bound programmes

IT programmes for Wholesale teams

Motivation a programmes for Mega and Wholesale Teams and Distribution Centre

Customer Service Excellence programme for Service Staff,

HR for Business Managers

Finance for Business Managers

Toastmasters Club

English Classes for Clerical staff

HR for Modern Trade

Admin Programme for Branch Managers and Approved Dealers and Sub Agents

Overseas Training at the National University of Singapore and the Administrative Staff College of India.



In-house TrainingA fully-equipped state-of-the-art training centre at the company’s Head Office, now at Nawam Mawatha, carries out daily training programmes and can accommodate up to 200 staff at a time. Singer (Sri Lanka) has also invested in training infrastructure at its seven regional centres, which can accommodate about 25 employees at a time. Trainers are drawn from the Company’s own experts as well as from a selection of renowned external resource persons. Our service centres have separate training programmes that focus on imparting technical know-how.

All key employees including management staff, supervisory staff, branch managers, approved dealers, shop floor managers and sales assistants undergo comprehensive training in all aspects of their jobs and are measured against established key performance indicators.

Every new recruit is also put through a basic orientation as well as on-the-job training and cross-functional training. Technicians attached to the service centres and service franchise agents are trained continuously by engineers attached to the service centres.

Singer Retail AcademySinger (Sri Lanka) being a multinational company with a 160-year history established the Singer Retail Academy in 2009, an HR initiative that seeks to significantly enhance the training and career development of staff employed at the Company’s retail shops, as well as field supervisory personnel and staff in other related areas as continuous improvement and investment in our single most important asset ‘our-people’.

Singer Retail Academy has developed consistent human resource standards such as hiring, orientation, career planning and remuneration applicable across management staff to shop assistants. Graduates from the Academy will receive a Singer Retail Diploma, a Diploma for Call Centre Staff or Diplomas in Shop Management, Service Centre Administration, Accounts Verification, Retail Internal Audit, Retail District Management or Retail Area Management, depending on their area of training. It’s clear that Singer (Sri Lanka) has committed considerable resources to training and developing its employees.

Succession Plan (3 x 3 x 3)This initiative is aimed at identifying and grooming employees for management roles. As part of our Development and Succession Programme, the 3x3x3 initiative seeks to ensure that all Key Managers, Senior Managers, Middle Managers and select Junior Managers have identified and developed their successors. The first ‘3’ of the 3x3x3 initiative represents the identification of 3 individuals for every available management position.

The second ‘3’ entails identifying 3 areas of development required to develop the candidate so as to be a suitable successor. The final ‘3’ represents the duration of the 3-year programme; candidates with potential will not usually require more than 3 years to be ready to move up in the corporate management structure. With the successful implementation of the 3x3x3 initiative, we are now secure in the knowledge that we are continuing to build a truly sustainable company; one that has the management structures in place to ensure our long-term progress.

High Flyers ProgrammesThis programme is aimed at the non-management category of the organisation especially at the officer and senior officer levels. Department heads from each division will identify those employees in the above given levels who are eligible to be promoted but lack certain skills. Thus, the aim of the programme is to close the skill gap needed. Under this programme we offer separate training programmes such as communication skills, presentation skills, training on developing personality etc.Currently, there is a pool of 16 employees in this programme and we have seen a very high percentage being promoted to the management in the past couple of years.

Junior Manager DevelopmentThis programme is aimed at developing the managerial skills, communication skills and presentation skills needed to rise up to the next level in the organisational hierarchy. Nominations of suitable employees are done by departmental heads and currently there are 20 employees in this programme and we have seen many of out past members getting promoted to middle management level.

Middle Manager DevelopmentThis programme was started up this year with the intention of polishing the managerial and personal skills needed to become a successful senior manager. In this too, nominations of suitable candidates from the middle manager level are done by departmental heads and currently there are 18 employees in this programme.

Showroom Management Development ProgrammeThis modular programme is expected to enhance the knowledge of dealers and they will be exposed to responsibilities of showroom Managers and relevant areas pertaining to branch management and will qualify for appointments in the future.



Product Training ProgrammeTraining Programmes Conducted For Year 2012Field Training Workshops - A New Methodology in Training

A new methodology for product training was introduced in order to fast track the training programmes and to introduce a proper evaluation system. In this new method, an entire area will be covered within a day on four different product lines by dividing the area in to four groups and rotating the groups among the four workshops. In the consumer electronics programme, the four workshops were ‘Blu-ray Technology’, ‘All In One PC’, ‘TV Technology’ and ‘Digital Cameras’ and each work shop was of one hour in duration. These works shops were conducted by the Respective Brand Managers together with the Training Managers. During the first quarter, the consumer electronics programme was conducted for Central, East and Sabaragamuwa areas. After the initial success of the Consumer electronics programme, a second programme was designed on Kitchen Appliances with workshops on ‘Pressure and Induction Cookers’, ‘Mixer Grinders’ and ‘Cook ware and Microwave ovens’. This programme was also conducted by the Brand Mangers together with the Manager Sales Demo with Cookery demonstrators. The Kitchen Appliances programme was conducted for West and South areas during the first quarter. Before conducting the second programme in a given area an evaluation question paper from the previous programme will be given to all participants and will be marked and individual marks will be stored in a database as in the Training Passport concept of Singer Retail Academy. At the end of the year the best 10 shop assistants will be rewarded on their cumulative marks on all test papers in the given year.

Service Training on Hitachi ProductsA two day service training programme was conducted on Hitachi product range for service center staff and selected SFA during the month of February. The programme was conducted by Mr. Chen Yoon Khoon, Michael from Hitachi, Home Electronics Asia Ltd, Singapore. Hitachi new side-by-side refrigerators and LED TV range were covered in this programme.

Training on TCL Air ConditionersWith the introduction of TCL Air Conditioners a training programme was stated highlighting the featured of the TCL AC and the initial programme was conducted for wholesale channel during the month of March and there are several programmes lined up for wholesale dealer and their assistants.

Product FamiliarisationTwelve Product Familiarisation programmes were conducted for all new recruits during the past year in order to familiarise them with the range of products that we offer together with basic features and relevant technologies.

Kitchen Appliances Training WorkshopThis training programme covered the whole Kitchen appliances range with live demonstrations. Kitchen appliances programme covered the whole island under four main areas. The programme was designed to address both technical and operational queries of kitchen appliances.

Home Appliances Training Workshop:The newly developed workshop methodology was applied in the recently concluded Home Appliances training. Refrigerators, Air Conditioners, Water pumps and Washing Machines were the main topics that were covered during this workshop. Before the commencement of the second programme an examination was held in order to evaluate the product knowledge of the previous programme. This evaluation system, not only encourages the participants to perform well but also provided the trainers with vital feedback on the previous training programmes. This programme covered four main Areas.

Consumer Electronics Training Workshop Televisions, Blu-Ray players, Mobile Phones/Digital Cameras & Computers were the main topics covered in this programme. This programme was conducted in all Areas.

Digital Media Training Workshop:With the rise of the digital media product range a novel methodology of training was introduced in order to make the sessions more interactive and practical. This particular programme accommodated Digital Cameras and mobile phones. The programme structure was not only focused on providing product knowledge but also on developing skills such as leadership, team work, communication and attractive presentation. A Digital Media training workshop was carried out in all areas except North and South areas.



Training Programme Examinations

Examination papers were prepared in all three languages with relevance to Consumer Electronics and Kitchen Appliance programmes to evaluate the participants. This evaluation process was carried in the four main areas. These evaluations not only provided vital feedback for the trainers but also created an opportunity for the participants to standardise themselves based on their product knowledge.

Best PracticeTraining was carried out for the showroom Managers, satellite shop Dealers, Sales Agents & Shop Assistants on best practices. The staff are provided with a collection of handy tips that are currently been practiced by the Best Showroom Managers and satellite shop dealers in their routine activities. The Chief Executive Officer and Head of Risk management recognised the value of this best practice training and has asked that the programme be carried out across all channels. Accordingly the training programme has now been successfully completed in seven districts and it is projected to be carried out in all remaining districts as well.

MS Office ProgrammeA training programme aimed at developing the proficiency of the Microsoft Office programme was conducted for Managers and employees of head office. The programme was held in July this year and was done for the benefit of all those who use MS Office in the course of their employment. The programme was conducted by Microsoft staff.

Administration Programme for Mega StaffA programme encompassing administration related duties was carried out on the 6th and 7th of August. The beneficiaries of the programme were the staff of Singer Mega. The workshop was conducted by the Head of Risk Management. The areas covered under this initiative were: Inventory Management, Cash Management, HP management, General Administration and Merchandising.

Speech Crafter TrainingThis programme was held with the objective of assisting participants of the first ever toastmasters speech contest. It was conducted by the Singer Toastmasters club for the benefit of 26 speech contestants and was held on 27th August 2012. This served as a preparatory programme for the 1st round of speeches organised by Toastmasters of Singer Sri Lanka.

Language Development for StaffAfter a lapse of a few years a language development programme for English was implemented for the general staff at the beginning of February 2012. Being a programme of 40 hours spanning over a period of four months it is currently being conducted for three batches which include the Distribution centre staff, wholesale team & a mixture of staff attached to head office and service centres. The programme is conducted by trained corporate lecturers attached to the City & Guild organisation.

Balance Score CardThe balance score card is the tool under the concept of the Singer retail academy that is used to monitor the performance of the singer retail shops. It provides a balance performance measurement platform taking into consideration aspects such as sales, profitability and even inventory levels. Performance reports are generated based on data captured, for each month and communicated to each location. This gives them the opportunity to know where they stand in each area of performance and also gives them the opportunity along with the help of field supervision to take necessary corrective action.

The balance score card system rates all retail locations within a grading from A+ to F, monthly. The total points for a given month as well as the ability to maintain a certain amount of total points are the criteria considered.

The balance score card is both a performance evaluation tool as well as a training need identification and post-training effectiveness measuring tool. The accumulated results of these reports for a given year are considered in giving awards for the Best Personnel under the categories of showroom Manager, satellite shop Dealer and also for the Field Supervisor.

Singer Toastmasters ClubThe Singer Toastmasters Club was registered at toastmasters international under toastmaster Division J, in June 2011. Being a multinational it is of paramount importance to maintain high standards in linguistic and presentation skills. In general Sri Lankans are competent in either Sinhala or Tamil languages but the competency in English is low.

Therefore we expect to groom the leadership and presentation skills of all our employees through Singer Toastmasters Club. In general the first ever achievement of the club was the president of the club winning first place in impromptu speech at the area competition being the youngest club which competed. Also we achieved the distinguished club status for toastmasters international.



HR for Business Managers ProgrammeA two-day programme on HR Functions was held for the first batch of Middle Managers on 22nd and 23rd September 2012. This programme was conducted by Dr. Ajantha Dharmasiri and Mr. Aruna Dayanatha, two experienced scholars of PIM. Thirty Managers participated at this programme.

Company Training ScheduleThe Company has opted for a dynamic training schedule based on the nature of business in order to maintain competitiveness through a competent and well-informed employee base.In catering to the ever increasing need for product training due to both expansion of the retail network as well as the introduction of more and more new highly technological products the Company has recruited two additional trainers to be a part of their training team. This has given the Company the ability to disperse knowledge on a very low time gap since a product has been introduced to the market.

Training Goes GreenAs a responsible corporate citizen we try to promote sustainable living wherever possible.

Singer Training division has become one of the pioneering divisions in this regard and have already started conducting training programmes in open environment utilising natural light by which we reduce CO2 emission to the environment by limiting the use of air conditioners and electricity.

Sewing Machine TrainingThis training was carried out in accordance to the request of the field. This programme consisted of a technical training for the technicians as well as sewing lessons for the participants. This programme covered all existing sewing machine models.

Knowledge Evaluation SystemThis year, we introduced a system called Knowledge Evaluation System utilising a multiple choice question paper given after two months of conducting a field training programme, specifically starting with the product training. The papers are made available under all three languages of Sinhala, Tamil and English. The best performers will be rewarded at the end of the year. External TrainingAreas of instruction include customer care, selling techniques, personality development, and management training. External training is arranged at the British Council, Phantomz Global, NIBM, Sponge Global, Cosmopolitan Learning Academy, Smart Quest, Rens Global, CINEC, and others. Customised training is arranged, depending on the specific requirements of each job.

In the past year, we have sent selected middle and senior managers to foreign training programmes, in India, Singapore, and Japan.

In the Singer Sri Lanka Factory competence is the key. Thus, we employ a competence evaluation system to identify gaps and arrange on the job training programmes to close those gaps.

Singer Training division has become one of the pioneering divisions in this regard and have already started conducting training programmes in open environment.



Outward-Bound ProgrammeActivity-based training - Outward-bound training highlights the strengths and weaknesses of employees. It pinpoints leadership skills, presentation skills, decision making, team spirit, and environmental awareness executing ability of the trainee. This will in tern give a guide line as to which development programmes the Company should do to improve the skills of our employees. Employee observation and periodical performance appraisal will be another method that will be used to develop and improve performance of employees.

55 managers were included for an outward-bound programme conducted by the Sri Lanka Business Development Centre in July 2012. The managers represented Sales, Audit, Credit, IT, Sisil World, Factories and Service. This programme was held after a lapse of five years. This is known to be one of the best ways of building teams. The programme consisted of trust-building exercises, management games, rock climbing, abseiling, raft building and rafting.

In addition, two separate outward-bound programmes were conducted for the field credit team and the whole sale teams.

Internship Programmes for University StudentsSinger Sri Lanka has taken yet another stride into sharing professional knowledge through facilitating training in form of Internships for students of both of local and foreign degree programmes within the country and other professional education bodies (ICA/CIMA). These included students from Finance, Marketing, Supply chain and Human Resources Management Degrees. They were provided with a comprehensive orientation to the operations of the organisation and a in-depth training in the practical operation in their specialised areas through on the job training under the respective divisions. The Company also aims at bringing in new ideas and suggestions from academia to this programme, to further enhance the way they conduct business. Given the strength of the bond between the Company and its employees, it seems that mere facts and figures fail to capture the true investment that the Company makes in its human resources.

Service AnalysisService (Years) Key & Senior Middle Junior Non- Total

Management Management Management Management

Above 20 14 18 7 58 97

16-20 9 15 11 116 151

11-15 9 20 12 74 115

6-10 7 23 48 159 237

Below 5 3 16 68 788 875

Total 42 92 146 1,195 1,475

Service Awards - Year 2012Below is an analysis of length of service of award winners in Singer Service Awards 2012, who were awarded with a plaque and a gift voucher, recognising their immense contribution to the Company. Speciality of this event is the recognition provided for employees who worked for even five years which is rarely seen in other companies -

Length of Service Number of Awards

5 Years 96

10 Years 16

15 Years 56

20 Years 21

25 Years 05

30 Years 05

Diversity and Equal OpportunityGender Diversity

Employee Levels Male Female Total

Key and Senior Management 42 – 42

Middle Management 85 7 92

Junior Management 121 25 146

Non-Management 980 215 1,195

Total 1,228 247 1,475

Description 2012 2011 2010 2009 2008

Staff growth (%) 20.1 7.1 2.8 -2.7 4.8

Turnover per employee Rs. (’000) 17,202 17,941 13,974 10,675 11,974

Profit after tax per employee Rs. (’000) 809 106 583 119 144

Asset per employee Rs. (’000) 14,526 14,213 11,232 9,725 11,032

All locations stipulated by labour laws are provided for female employees.



Fostering Human Rights and Equal OpportunityMoving the Community ForwardWe are deeply embedded in the hearts and minds of all Sri Lankans, to an extent that is perhaps unmatched by any other local company. We understand that we have a responsibility, rooted in both business sense as well as in a strong compassionate sensitivity, to uplift the quality of life in the country. As such, we take our standing as a member of the community, and our ability to make people’s lives easier, very seriously, a commitment that is demonstrated, for example, in our flexible payment schemes and affordable product range. This philosophy extends to our CSR work as well, with a number of large and small projects running concurrently. In order for the business to be truly sustainable, the community must be continuously uplifted.

As a result of the Sri Lankan people’s affinity for the connection to Singer, the Company receives many requests from religious, educational, and other institutions as well as appeals from everyday people. Sri Lankans know that Singer is a compassionate and benevolent company and, as such, often turn to it in their moment of need. Our island-wide reach means that we are present in some of the more remote areas of our country, giving us a unique perspective on the issues that affect the lives of our less fortunate countrymen and women. It is also important to note that our employees are often the biggest champions of particular community-relations projects and initiatives and are empowered to propose solutions to their own community’s needs.

Shared Value Vs Corporate Social ResponsibilityAssessing Societal and Community NeedsSinger has a dedicated CSR Committee, consisting of personnel drawn from a diverse range of operational backgrounds and experiences, that is tasked with going through proposals forwarded by its employees as well as the requests from community members. Because of its voluntary nature, the Committee is self-sustaining and self-driven; employees express their passion for their communities through their roles in this Committee. The Committee scrutinises forwarded proposals for merit and decides how best to expend its resources.

When making this decision, we look, first and foremost, at the sustainability of a given project. We believe that taking the long view is essential, not only because it maximises our effectiveness, but also because we believe that Singer will be an integral part of the Sri Lankan picture for generations to come.

Creating Awareness and Encouraging Involvement of Staff, Customers, Suppliers in the Formulation and Implementation of Programmes.

Our attitude to meeting community needs is exemplified by our multitasking field staff who, in addition to serving customers, are also entrusted with seeking out humanitarian projects that Singer can lend a helping hand to. Field staff are expected to prepare and present a small proposal for each project that they recommend. By tapping into this vast network of Singer employees, we are able to generate a large list of opportunities, which are then evaluated for worthiness and also analysed to see whether they fit into our assessment of macro needs and to determine how our financial, logistical, and human resources can be used most effectively.

At the implementation stage, field staff are actively involved in ensuring that the community needs are met. We also bring our CSR initiatives into Company forums such as the Monthly Management Meeting Presentation, Annual Convention and Internal Magazines, in order to impress upon our employees the importance of our CSR projects and to keep them aware of what their colleagues are doing. Indeed, a review of ongoing future CSR projects is usually part of the presentations which Divisional Heads make to management.

StaffAll staff, regardless of division or location, are well aware of our commitment to society, as well as our strategies for improving community relations. These strategies have evolved over time with the engagement of our staff in CSR activities.

In terms of our business strategy, our retail showroom are the front-end of our Company, driving our revenues and growth. These very same retail showroom are also the front-end of our Company when it comes to our societal activities, serving as hubs through which these activities can be co-ordinated, launched, and followed up on.

Just as our showroom Managers/District Managers/Area Managers are responsible for achieving business objectives, they are also charged with ensuring successful completion of community projects and for maintaining accountability for transparency. Our multitasking field staff serve our customers while also helping Singer implement its community relations strategies and initiatives.

We use our influence to encourage employees to participate in our various community relations programmes. For example, we use Company-wide forums such as the Annual Convention and the Singer Sinera employee magazine to create awareness of our initiatives amongst our employees, letting them know what their peers are doing.



CustomersOur prominence and influence in Sri Lankan society means that we are in prime position to influence and encourage customers and community members to make a positive impact. There are a number of mechanisms we use to spread awareness of our many projects to our customers and encourage greater participation.

One of these mechanisms is our retail outlet network. We put up posters in our retail locations, informing shoppers about our various initiatives. For example, our leading role in the National e-Waste Management Initiative was supported by huge customer participation. Another obvious mechanism is our use of mass media to disseminate our messages. We also work with our dealers, who value customers, to involve them in our various projects, such as our e-waste collection initiative.

Combining Social Projects with Company’s ObjectivesAs explained earlier Singer (Sri Lanka) has a dedicated CSR Committee, consisting of personnel drawn from a diverse range of operational backgrounds and experiences, that is tasked with going through proposals forwarded by its employees as well as the requests from community members. Because of its voluntary nature, the Committee is self-sustaining and self-driven; employees express their passion for their communities through their roles in this Committee.

Similarly, our investments in the area of entrepreneurship development are aimed at giving Sri Lankans the training and confidence they need to uplift their lives. Once they are able to leverage on these new skills, their living standards will improve and they will demand access to the convenience and quality offered by Singer.

Our philanthropic initiatives are also inspired by an understanding that it makes good business sense to help our Sri Lankan brothers and sisters. We realise that if we want to continue to prosper, we must partner with Sri Lankan society and help it prosper as well.

Philanthropic Projects Undertaken

We make a living by what we get we make a life by what we giveWinston Churchill

Support for our Tri-Services

Abhimansala II Wellness Resort - We have partnered with the Sri Lanka Army’s Seva Vanitha Unit to build fully-equipped homes for disabled soldiers. We sponsored the construction of one villa at the Abhimansala II project in the Matara District, which has all the facilities required for a disabled person, including specially-equipped bathrooms and dining rooms. Our donation towards this worthy cause to benefit the war heroes who sacrificed so much for our nation. This contribution was an extension of our support for the Abhimansala I project in Anuradhapura, which we undertook in the previous year.

Army Tatoo 2012 - This stunning display of Army’s talent and discipline provided entertainment to an unprecedented crowd in Jaffna. However, the event even drew crowds from areas such as Mullaitivu and Kilinochchi, including large numbers of schoolchildren. It was staged to improve the military-civilian relationship in the Jaffna peninsula. We were the main sponsor of this event. In addition to this Singer was the main partner of sponsoring ‘Wasantha Geetham Musical Show’ and ‘Mega Musical Show’ organised by the Army 611 Brigade and 61 Division respectively.

Donation of 10 Sewing Machines to the Sri Lanka Army - We Wanted to help the wives of deceased servicemen rebuild their lives after the tragic loss of their spouses. We decided to donate sewing machines that would give these women a chance to uplift their family’s livelihood through new sources of much-needed income.



Supporting and Sustaining Our Cultural Events

Given our engagement with Sri Lankans all over the island, it is important that we support our shared cultural traditions and customs. We respect these traditions and practices, because they have sustained us and our fellow Sri Lankans through the years and we wish to continue these historical traditions. We have made significant donations towards this cause. Few of our main contributed Cultural events are:

Dalada Maligawa Esala Perahera - Addition to our main donation to support this major annual festival, we also donated 10,000 water bottles to pilgrims and leveraged our field staff to distribute these bottles.

Ruhunu Kataragama Devalaya Esala Perahera - Donation to support this landmark religious festival.

Bellanvila Esala Perahera - Donation to support this event.

Colombo Nawam Maha Perahera - Donation to support participating dancers and drummers, dazzling the crowds and bringing excitement to this colourful cultural pageant.

Donation to Buddha Rashmi Vesak Uthsawaya - Our donation towards the illumination and installation of Vesak decorations in the Gangaramaya area and surrounding streets.

Bringing Village Communities TogetherAs a company that believes in bringing joy to the community, we have sponsored and helped organise 56 New Year Events throughout Sri Lanka. These events bring together all Sri Lankans, and we ensure that our donations benefit all communities.

Our goal in undertaking these events was to spread cheer and goodwill throughout the diverse range of ethnic, religious, and cultural communities that comprise our small nation. Further, the impact created via this very important event in the social calendar of the rural fold touched their hearts to no mean extent. Some of the organisations that requested and received help of their new year celebrations include the Colombo District Deaf Association, the Soysapura Flats Association.

Hotel Show - Organised by the Ceylon Hotel School Graduates’ Association, with Singer in 3rd successive year as main sponsor. This event aims to ensure a high standard in the hotel and tourism industry which will attract and allure the tourists to the island and could promote the island to the world as a major tourist destination. It also gives the industry a chance to showcase their talents in the relevant hospitality fields thus elevating the overall standards of the hospitality industry to compete globally.



Supporting Entertainment and the Arts

We are a big supporter of arts and entertainment events in Sri Lanka, believing that these events enrich the tapestry of life in the island. Singer also aims at providing every opportunity for success to the blossomed as well as budding talent of the country. As such, we have sponsored and made sizeable contributions to a number of fun-filled musical shows, festivals and other entertainment events and a few of some events are:

Sponsorship for Olivia Newton John ‘Live in Concert’.

Sponsorship of Miss Ceylinco VIP for the Miss Universe 2012.

Partnering with The De Lanerolle Brothers’ ‘The Concert - Life 3’.

Sponsorship of Clifford Richards Live in Concert.

Sponsorship to Umara Sinhawansa - Vassanayata album.

Sponsorship of the Mantra Moods Concert.

Sponsorship of Rukshan Perera Live in Concert.

Sponsorship of the Deepavali Festival and musical shop.

Sponsorship of the Muslim Ladies Study Food Festival.

Sponsorship of the Ceylon Moor Ladies 75th Anniversary.

Sponsorship for the Colombo Night.

Sponsorship of Visaka Vidyalaya ‘Celebration of Music’.

Supporting Professional BodiesAs one of the most prominent companies in Sri Lanka, we have a duty to contribute to the overall development of our industry. We work with trade associations and other industrial bodies to highlight the achievements of our country’s best and brightest professionals and companies. To do so, we sponsor a number of awards events, details of which can be found below:

The Chartered Institute of Marketing’s Annual Conference - We were a silver sponsor for this event, exploring the latest marketing trends.

Institute of Certified Management Accountants of Sri Lanka - We were the strategic partner for 2012, upholding and enhancing professional accounting standards in Sri Lanka.

Toastmaster’s International District Conference Ovation 2012 - sponsorship of this landmark event in the field of public speaking.

Association of HR Professionals.

Sri Lankan Institute of Marketing Brand Excellence Awards, Effies, People’s Awards and NASCO - sponsorship of these events, which seek to develop the marketing profession by turning the spotlights on exceptional performers.

OtherWe support community projects in many different areas, always seeking to maximise our positive impact on Sri Lankan society. Some of the worthy causes that have benefitted from our involvement are -

Sponsorship of Old Anandians’ Six-a-Side Cricket Tournament.

Donation of a bottle cooler to the Army’s Seva Vanitha Unit - This contribution benefitted patients at the Maharagama Cancer Hospital.

Donation of television of Blood Bank of the Wathupitiwala Base Hospital - We donated a 24” LED television to uplift the spirits of patients undergoing blood transfusions.

Donation of Singer LCD television and DVD player to Navajeevana Rehabilitation Centre - These items were installed in the reception area of this centre in rural Tangalle, which focuses on rehabilitating disabled persons.

Ranbodu Seya Art Exhibition at Deyata Kirula Exhibition 2012.

Donation of Wheelchair to the University of Sri Jayewardeanepura - We donated this wheelchair to support a project undertaken by the Department of Business Economics at the University.

Child/Elder Care Programmes

Children’s Day Out for Orphanage - As a part of a CSR initiative factory employees treated the orphans to a fun-filled afternoon.

Factory employees annually organises a meal for the “Preethi’ children orphanage.

Donation of deep freezer to the All Ceylon Women’s Buddhist Congress - We donated this freezer to the Charity Homes of this organisation, which houses, feeds and looks after 200 residents.

Donation of refrigerator to Marcsri Saranaseva Nivahana Handicapped Boys’ Home.

Donation of hot water shower to Maupiya Sewana Elders’ Home

Donation of refrigerator to the Womens’ Home of the Kamburupitiya Adults Care Foundation.

Donation of deep freezer to Home for Elderly and Retired Priests in Battaramulla.



Infrastructure development at Village/Other Level Building of 10 toilets in Kilinochchi District.

Donation of laptops to Colombo National Hospital - We donated this computing equipment to the Orthopedic Unit of the Hospital in order to upgrade their IT infrastructure and enable them to deliver a higher level of patient care.

Donation of Heavy Duty Nebulizer Machine to Homagama Base hospital to help patients with breathing difficulties.

Donation of 2-door refrigerator to the Dialysis and Kidney Transplant Unit of the Kandy General Hospital - On the request of the consultant Nephrologist of the Kandy General Hospital, we donated a fridge to keep blood samples, critical drugs and patients’ special food items.

Continuing maintenance of Wards 24 and 25 at Colombo South (Kalubowila) Hospital - For the past 2 years, we have been maintaining Ward 24 at the hospital. Our maintenance of Ward 25 has been an ongoing commitment for the past four years.

Public PolicyThe Company does not fund or make contributions in kind to any political parties, politicians or related institutions. The Company is regularly invited by the Government of Sri Lanka to submit its proposals for consideration when formulating the National Budget.

Anti-Competitive Behaviour and ComplianceThe Company did not encounter any legal action for anti-competitive behaviour, anti-trust and monopoly practices during 2012. We always obtain necessary local authority approval and strictly adhere to the laid down rules and regulations on display materials, audio/video materials, branding among other factors when conducting marketing/sales promotional activities.We have not been subjected to any fines or sanctions as we have not been in breach of laws and regulations in this regard.

Product ResponsibilityAs one of the leading consumer durable companies in Sri Lanka, Singer has focused on delivering safe, secure and durable products. The Company’s business practices have been adapted to ensure that the entire production chain is based on sustainable processes. The Company seeks to ensure that product design, product storage, product distribution and product disposal are governed by sustainable and secure business practices.

The Company ensures the highest forms of compliance with Health and Safety Codes. No incidents were reported during the year.

How we Identify Our Customers’ Needs Research conducted to identify customer needs, and an ongoing system to track changing needsAs a customer-centered company, our success is based on understanding and meeting customer needs. We invest significant resources towards this goal and have implemented a number of schemes and systems to help us gain better insights. For example, we carry out formal surveys on our own, design and make extensive use of questionnaires and feedback forms, use our call centre to report customer complaints and needs, employs mystery shoppers, and commission market research agencies to perform through facts-finding and analysis.

We conduct a retail audit through Nielsens on a continuous basis, allowing us to identify changing consumer trends from mouth-to-mouth. During these retail audits, we also visit a representative sample to independent dealers, ensuring that we capture information that isn’t reflected in the data forwarded to us by our own retail outlets . A new retail audit cycle will commence in January, after having made changes to our methodology, as recommended by Nielsens.

As a retailer that is engaged in direct selling, when we visit customers’ homes, we are able to get a first-hand sense of customer expectation and satisfaction. Our regular interactions with hire-purchase customers during visits to collect instalment payments also allow us to gather critical information. Our Area Management collate the data gathered from this bottom-up process and make monthly presentations on the insights contained therein.

We also perform data mining on local members to extract their preferences on a continuous basis. Clearly, Singer Sri Lanka is a company that is intertwined with the needs and dreams of our customers.

Our Policy on Research and DevelopmentAs a company that is constantly introducing new products and service innovations into the lives of our customers, we understand that continuous market research and product development is essential. In order to stay ahead of the technology curve, we work with our partner brands, which include technology giants like Samsung, Hitachi and Whirlpool. We benefit significantly from the enormous R&D spends of these partner brands. The introduction of a new category of products, something that is frequent at Singer Sri Lanka, follows extensive R&D and feasibility studies.



We also conduct Research and Development at our local factories, so as to ensure that our locally-manufactured products are upgraded in line with global standards and market demands. We also perform research on consumer and market behaviour, competition, and market shares. We send our engineers and product specialists to overseas facilities in order to train and educate them on new developments. Given our limited resources, we strive to push our products towards these global standards through continuous monitoring of product upgrades and technology developments.

New Products/Services Introduced in 2012 Singer is continually looking at new ways of enriching its customers’ lives. As their purchasing power increases and they become more sophisticated consumers, these customers require new products and services, a need that Singer does its best to meet. Some of the new products and services introduced during the period under review include -

Change of all Televisions to more energy efficient LED Flat panel Television

Godrej Brand Refrigerators

A new range of Audio hi-fi system, Home Theatre Systems

GPS Navigation System

Budry Electronic Weighing Scales

Smart Phones, Media Pads and Tablets

Floor Standing Air Conditioners

Singer branded Scooters and motor bikes

Agro-products - Sprayers, Pumps etc.

Generators

New range of teak furniture, Cameras, Mobile Phones

Induction Cooker, Induction Compatible Non-Stick Cook Wear

New range of Lenova laptops

Artmetrix office furniture

Continuous product/service quality improvement schemes in place during the Company’s product/service life cycleQuality Surveillance Unit We understand that our reputation for ‘trusted excellence’ is built on our commitment to ensuring that each and every one of our products adheres to the highest quality standards. Whenever we import a product, the item is subject to strict quality control tests at our Quality Surveillance Unit at our Regional Centre in Colombo. Also, before a new product becomes a part of the Company’s range, it is subject to a pre-production validation test. The quality checks don’t end there, however; a random sampling of every shipment is taken in order to ensure a zero defect rate. If there are any defects or problems, we stop distribution of the entire shipment until the issue is rectified. We grade suppliers on the basis of these quality checks.

Monthly Quality MeetingsThe public perception of our products and services is paramount to our success; even a hint of unreliability or poor quality can cause considerable harm to our brands. We constantly evaluate our quality control mechanisms and outcomes. To this end, we convene monthly quality meetings headed by our Directors, where quality issues are discussed and recommendations are made to ensure that our products and services keep to the lofty standards expected by customers.

Monthly Operations MeetingsAt the beginning of our monthly operations meetings, attended by the CEO, all Operational Directors and Senior Management, we discuss all product quality issues and improvements. A summary of the previous twelve months’ key product indicators is shared for necessary action.

Quarterly Meetings with Our Manufacturing FacilitiesOur Marketing Sales and After-Sales Staff meets Manufacturing Division Staff on a quarterly basis to communicate quality improvements and suggestions.

Periodic Visit to and by SuppliersWe also conduct periodic visits to supplier facilities, both local and overseas, in order to ensure that our products are of the highest quality. One member each from our Commercial, Marketing, and Quality Assurance teams visit suppliers and give relevant feedback and instructions, while listening to their concerns and suggestions as well.

Suppliers also visit to conduct product and services quality training programmes to ensure that we maintain the highest levels at all times.

Regular Product Service ClientsOur services and factory personnel conduct outreach clinics to provide free servicing to existing customers. During these visits, we collect information on potential usage issues and provide valuable guidance on optimal use of our products, including tips on energy saving and safety.

Spare Parts Ordering CommitteeGiven our extensive product portfolio and massive customer base, after-sales services are critical. Our Spare Parts Ordering Committee is tasked with ensuring that spare parts availability is optimised for our products, life cycles. This allows us to maintain service levels that are far higher than our competitors’.



Trade FairsSinger Sri Lanka conducted ‘Singer Lifestyle’ trade exhibition and sponsors one of the major annual trade exhibition and fairs, Home and You Lifestyle Exhibition. This event gives us an opportunity to meet face-to-face with customers and to hear their suggestions, criticism, and appreciations directly. We also sponsor Reddalla, another lifestyle exhibition which allow us to gain valuable customer feedback.

Continuous TrainingWe invest significant resources in ongoing training programmes for our customer services staff. In order to help our over 3,000 field staff keep pace with our product innovations, our Training Department provides regular technical training and customer care tips.

Customer Complaints/SuggestionsSystem to Identify and Address Customer/Supplier Complaints/SuggestionsWe have a number of integrated systems in place to respond swiftly and fairly to customer and supplier complaints and suggestions. These mechanisms include:

Singer Call Centre - We were the first consumer goods retailer in Sri Lanka to set up a call centre. Operating year-round from 9 a.m. to 6 p.m., we record all telephone conversations in order to assure our customers of our accountability

Singer After Sales Service Network

Consumer Service meetings

Regional Service meetings/Sales meetings

Feedback Forms

Monthly Market and Product Review meetings

Product Warranty and Replacement Schemes

Product Loan Scheme - This one-of-a-kind scheme gives customers a replacement product while their product is under repair

Written/verbal complaints that can be made at any level to the Company - We pride ourselves on an open management culture, where customers can contact even the highest levels of senior management with ease

Periodic supplier meetings

We keep track of the ratio of complaints and repairs to sales on a monthly basis. This is another mechanism for gauging the quality of our products and services.

Avoiding/Reducing Negative Impacts of Company’s Products/Services on CustomersSystem to assess possible negative impacts of company’s product/services and communications on customers, and the society at large and measures adopted to mitigate/negate such impacts.All products and services are introduced only after we conduct extensive studies of the market and the product or service in question. We use New Product Development focus groups to

assess any possible negative impacts of our products on actual customers. We conduct our research in different parts of the country to take into account regional differences.

Our proactive approach to negating negative impacts on customers extends to our Brand Communication policy, which prohibits sexual innuendo, vulgarity, negative humor, and racist views.

Other mechanisms in place for assessing possible negative impacts include:

Use of Customer QuestionnairesCustomer feedback is critical to the Company’s goal of ensuring the highest possible levels of customer satisfaction. As such, Singer (Sri Lanka) makes extensive use of questionnaires to find out whether its customers are satisfied with their Singer experience. These questionnaires query customers on their opinions regarding Singer (Sri Lanka)’s staff, products, and service. The answers to these questions are then analysed by the Company’s senior management team and action is taken, as and when necessary.

Mystery Shopper ProgrammeEven the most detailed questionnaires will fail to fully capture customers’ experiences in an effort to find out more about the way its employees, products, and services are perceived by customers, Singer (Sri Lanka) uses mystery shoppers to measure various quality of service indicators. Mystery shoppers are regularly dispatched to the Company’s retail outlets where they pose as regular customers and perform certain activities, such as purchase products, make complaints, ask questions, and behave in specific ways designed to evoke a response from staff. These mystery shoppers then give detailed reports about their experiences and necessary action is taken; all part of Singer (Sri Lanka)’s efforts to ensure maximum customer satisfaction.

Hire-Purchase SchemeAround 50% of our customers purchase our products on hire purchase and make monthly instalment payments, our branch staff make direct contact with these customers on a monthly basis. We get immediate first hand feedback from these customers on product and service quality levels.

We are the pioneer in allowing Sri Lankans to purchase consumer durable products through instalment payments. This allows otherwise neglected segments of society to access our world famous products and services. At any given time, we serve over 300,000 hire-purchase customers.

Customer Call CentreSinger (Sri Lanka) has set up a call centre to cater to its customers. Customers can dial the hotline and access a range of information, including: product details, hire purchase terms, shop locations, and other relevant information. Customers can also lodge complaints regarding Singer (Sri Lanka)’s service or products. The Call Centre then liaises with our Service Centre



or the relevant Singer party to ensure that the customer’s complaint is attended to, tracking the internal progress of the customer’s complaint.

Our customer call centre is a powerful tool in our continual quest to improve customer satisfaction. By giving customers an outlet for their complaints and inquiries, we are able to feel the pulse of our valued customers, which allows us to take proactive measures that will enhance the customer’s experience in the future. Our customer call centre also conducts outbound calls to existing customers to keep them updated about new product and service offerings, making them aware that they are always connected to the Singer family.

Having assessed any possible negative impact, we work both proactively and reactively to mitigate the impact. In terms of proactive measures, we ensure that we comply with the highest industrial/industry standards. We also move quickly to establish and adopt internal product quality standards that are even more stringent than these industry standards.

Reactive measures include product exchange and trade-in schemes. These schemes allow our customers to replace products that they are not happy with. Our trade-in schemes also have the effect of taking older, less inefficient products out of customers’ homes, replacing them with more environmentally-friendly products. This not only benefit the particular customer but society at large.

Product HomologationSince our products reach homes all across the island, we go to great lengths to make sure that these products can withstand a variety of climatic and other conditions. For example, all electronics can operate under a wide range of voltage fluctuations. We also provide additional proactive coatings for products that are used by customers in coastal areas. We have also modified our products to receive transmission signals for better reception.

Product Exchanges, Product on Loan and Trade-in-SchemesUnder our industry-best warranty schemes, we give our customers the above benefits.

Showroom Upgrade CycleCustomer satisfaction depends, to a large degree, on their perception of the retail experience. This perception, in turn, is greatly influenced by the retail environment in which they shop. As such, Singer goes to great lengths to ensure that its retails outlets are always clean, secure, spacious, comfortable and welcoming. Further to this, the Company’s retail showroom are on a 5-year cycle; each and every Singer showroom is upgraded and refurbished every 5 years. Although this involves a huge investment on our part, we consider it essential to maintaining and enhancing customer satisfaction, as well as our overall image and reputation.

Service Network

Singer (Sri Lanka)’s customers can breathe easy, knowing that each and every purchase is backed-up by a sophisticated service network that is unmatched in the country. This network covers the entire island and includes 9 regional service centres and more than one hundred service franchise agents. It ensures that customers are given the best after-sales service possible at the most convenient location and is a key component of our customer satisfaction measures.

Senasuma Extended Warranty

Our customers know that our products are of the highest quality. To provide even further reassurance, however, we offer our customers an extended warranty programme called ‘Senasuma’ that gives them extended after-sales support for 3 years from the date of purchase.

Loyalty Cards and Mega MoneyIn order to show its customers how much they mean to the Company, Singer (Sri Lanka) has introduced customer rewards programmes such as Singer Loyalty Cards and Mega Money. These programmes help the company build an even closer relationship with its customers and enhance their satisfaction by adding even more value to their purchases.

Customer GuideWe publish a regularly-updated Customer Guide that catalogues all products offered by the Company and explains their features. By letting the customer know exactly what he or she can expect from the Company and its products, we ensure that customer expectations are in tune with what we offer. This allows us to be in the best possible position from which to satisfy customers.



Index No. Description Report Section Page

1. Strategy and Analysis

1.1 Statement from the most senior decision maker of the organisation (e.g., CEO, chair or equivalent senior position) about the relevance of sustainability to the organisation and its strategy

Encompassing the Future 54

1.2 Description of key impacts, risks and opportunities Not Applicable

2. Organisational Profile

2.1 Name of the organisation Corporate Information Inner Back Cover

2.2 Primary brands, products and/or services Encompassing the Future


57

21

2.3 Operational structure of the organisation, including main divisions, operating companies, subsidiaries and joint ventures


2.4 Location of organisation’s headquarters Encompassing the Future 572.5 Number of countries where the organisation operates and names of countries with either major

operations or that are specifically relevant to the sustainability issues covered in the ReportEncompassing the Future 57

2.6 Nature of ownership and legal form Encompassing the Future 582.7 Markets served (including geographic breakdown, sectors served and types of customers/

beneficiaries)Encompassing the Future 58

2.8 Scale of the reporting organisation Encompassing the Future 59

2.9 Significant changes during the reporting period regarding size, structure or ownership Encompassing the Future 592.10 Awards received in the reporting period Encompassing the Future 59

3 Report Parameters

3.1 Reporting period (e.g., fiscal/calendar year) for information provided Encompassing the Future 60

3.2 Date of most recent previous Report Encompassing the Future 60

3.3 Reporting cycle (annual, biennial, etc.) Encompassing the Future 60

3.4 Contact point for questions regarding the Report or its contents Encompassing the Future 60

3.5 Defining Report content Encompassing the Future 60

3.6 Boundary of the Report Encompassing the Future 60

3.7 State any specific limitations on the scope or boundary of the Report Not Applicable

3.8 Basis for reporting on joint ventures, subsidiaries, leased facilities, outsourced operations, and other entities that can significantly affect comparability from period to period and/or between organisations


3.9 Data measurement techniques and the bases of calculations, including assumptions and techniques underlying estimations applied to the compilation of the indicators and other information in the Report

Not Applicable

3.10 Explanation of the effect of any restatement of information provided in earlier report, and the reasons for such restatement


3.11 Significant changes from previous reporting periods in the scope, boundary or measurement methods applied in the Report

Not Applicable

3.12 Table identifying the location of the standard disclosures in the Report Encompassing the Future 92-95

3.13 Policy and current practice with regard to seeking external assurance for the Report Not Applicable

4. Governance, Commitments & Engagement

4.1 Governance Structure of the Organisation The Way we Manage


98-101

61

4.2 Indicate whether the Chair of the highest governance body is also an executive officer The Way we Manage 98-101

4.3 The number of members of the highest governance body that are independent and/or non-executive members

The Way we Manage 98-101

4.4 Mechanisms for Shareholders and employees to provide recommendations or direction to the highest governance body

The Way we Manage 98-101

4.5 Linkage between compensation for members of the highest governance body, senior managers, and executives and the Organisation’s performance

Not Applicable

4.6 Processes in place for the highest governing body to ensure conflicts of interests are avoided Not Applicable

Global Reporting Initiatives (GRI) G3 Standard Disclosures Index




4.7 Process for determining the qualifications and expertise of the members of the highest governance body for guiding the Organisation’s strategy on economic, environmental, and social topics

Not Applicable

4.8 Internally developed statements of mission or values, codes of conduct, and principles relevant to economic, environmental, and social performance and the status of their implementation

Not Applicable

4.9 Procedures of the highest governance body for overseeing the Organisation’s identification and management of economic, environmental, and social performance

Not Applicable

4.10 Processes for evaluating the highest governance body's own performance Not Applicable

4.11 Precautionary Approach Not Applicable

4.12 Externally developed economic, environmental and social Charters and principles Not Applicable

4.13 Membership in industry/business association Not Applicable

4.14 List of stakeholder groups engaged by the Organisation Encompassing the Future 64

4.15 Basis for identification and selection of stakeholders with whom to engage Encompassing the Future 64

4.16 Approaches to stakeholder engagement including frequency Not Applicable

4.17 Key topics and concerns raised through stakeholders engagement and the Organisation’s response

Not Applicable

Economic Performance

EC1 Direct economic value generated and distributed Encompassing the Future 65

EC2 Financial implications and other risks and opportunities for the Organisation’s activities due to climate change


EC3 Coverage of the Organisation’s defined benefit plan obligations Notes to the Financial Statements

159

EC4 Significant financial assistance received from Government Not Applicable

EC5 Range of ratios of standard entry level wage by gender compared to local minimum wage at significant locations of operation

Not Applicable

EC6 Policy, practices, and proportion of spending on locally-based suppliers at significant locations of operation

Not Applicable

EC7 Procedures for local hiring and proportion of senior management hired from the local community at locations of significant operation

Not Applicable

EC8 Development and impact of infrastructure investments and services provided primarily for public benefit through commercial, in-kind or pro bono engagement

Not Applicable

EC9 Understanding and describing significant indirect economic impacts, including the extent of impacts

Not Applicable

Environmental Performance

EN1 Materials used by weight or volume Not Applicable

EN2 Percentage of materials used that are recycled input materials Not Applicable

EN3 Direct energy consumption by primary energy source Not Applicable

EN4 Indirect energy consumption by primary source Not Applicable

EN5 Energy saved due to conservation and efficiency improvements Not Applicable

EN6 Initiatives to provide energy-efficient or renewable energy-based products and services, and reductions in energy requirements as a result of these initiatives


EN7 Initiatives to reduce indirect energy consumption and reductions achieved Not Applicable

EN8 Total water withdrawal by source Not Applicable

EN9 Water sources significantly affected by withdrawal of water Not Applicable

EN10 Percentage and total volume of water recycled and reused Not Applicable

EN11 Location and size of land owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas

Not Applicable

EN12 Description of significant impacts of activities, products, and services on biodiversity in protected areas and areas of high biodiversity value outside protected areas

Not Applicable

EN13 Habitats protected or restored Not Applicable

EN14 Strategies, current action & future plans for managing biodiversity Not Applicable

EN15 Number of IUCN Red List Species & National Conservation List Species with habitats in areas affected by operations

Not Applicable

EN16 Total direct and indirect greenhouse gas emissions by weight Not Applicable

EN17 Other relevant indirect greenhouse gas emissions by weight Not Applicable

EN18 Initiatives to reduce greenhouse gas emissions and reductions achieved Encompassing the Future 69




EN19 Emissions of ozone-depleting substances by weight Not Applicable

EN20 NO, SO, and other significant air emissions by type and weight Not Applicable

EN21 Total water discharge by quality and destination Encompassing the Future 70

EN22 Total weight of waste by type and disposal method Encompassing the Future 69

EN23 Total Number of & Volume of significant spills Not Applicable

EN24 Weight of transported, imported, exported, or treated waste deemed hazardous under the terms of the Basel Convention Annex I, II, III, and VIII, and percentage of transported waste shipped internationally

Not Applicable

EN25 Identity, size, protected status, and biodiversity value of water bodies and related habitats significantly affected by the reporting Organisation’s discharges of water and runoff

Not Applicable

EN26 Initiatives to mitigate environmental impacts of products and services, and extent of impact mitigation


EN27 Percentage of products sold & their packaging materials reclaimed Not Applicable

EN28 Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations

Not Applicable

EN29 Significant environmental impacts of transporting products and other goods and materials used for the Organisation’s operations, and transporting members of the workforce

Not Applicable

EN30 Total environmental protection expenditures and investments by type Not Applicable

Society

SO1 Percentage of operations with implemented local community engagement, impact assessments, and development programmes


SO2 Percentage and total number of business units analyzed for risks related to corruption Not Applicable

SO3 Percentage of employees trained in organization’s anti-corruption policies and procedures Not Applicable

SO4 Actions taken in response to incidents of corruption Encompassing the Future 88

SO5 Public policy positions and participation in public policy development and lobbying Encompassing the Future 88

SO6 Total value of financial and in-kind contributions to political parties, politicians, and related institutions by country

Not Applicable

SO7 Total number of legal actions for anti-competitive behaviour, anti-trust, and monopoly practices and their outcomes

Not Applicable

SO8 Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with laws and regulations

Not Applicable

SO9 Operations with significant potential or actual negative impacts on local communities Not Applicable

SO10 Prevention and mitigation measures implemented in operations with significant potential or actual negative impacts on local communities

Not Applicable

Labour Practices and Decent Work

LA1 Total workforce by employment type, employment contract, and region, broken down by gender


LA2 Total number and rate of new employee hires and employee turnover by age group, gender, and region

Not Applicable

LA3 Benefits provided to full-time employees that are not provided to temporary or part-time employees, by significant locations of operations


LA4 Percentage of employees covered by collective bargaining agreements Encompassing the Future 75

LA5 Minimum notice period(s) regarding operational changes, including whether it is specified in collective agreements

Not Applicable

LA6 Percentage of total workforce represented in formal joint management-worker health and safety committees that help monitor and advice on occupational health and safety programmes


LA7 Rates of injury, occupational diseases, lost days, and absenteeism, and number of work-related fatalities by province

Not Applicable

LA8 Education, training, counselling, prevention of diseases, and risk-control programmes in place to assist workforce members, their families, or community members regarding serious diseases

Not Applicable

LA9 Health and safety topics covered in formal agreements with trade unions Not Applicable

LA10 Average hours of training per year per employee by employee category Encompassing the Future 77

LA11 Programmes for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings


LA12 Percentage of employees receiving regular performance and career development reviews, by gender


LA13 Composition of governance bodies and breakdown of employees per category according to gender, age group, minority group membership, and other indicators of diversity

Not Applicable




LA14 Ratio of basic salary and remuneration of women to men by employee category, by significant locations of operations

Not Applicable

LA15 Return to work and retention rates after parental leave, by gender Not Applicable

Human Rights

HR1 Percentage and total number of significant investment agreements and contracts that include clauses incorporating human rights concerns, or that have undergone human rights screening

Not Applicable

HR2 Percentage of significant suppliers, contractors and other business partners that have undergone human rights and actions taken

Not Applicable

HR3 Total hours of employee training on policies and procedures concerning aspects of human rights that are relevant to operations, including the percentage of employees trained

Not Applicable

HR4 Total number of incidents of discrimination and actions taken Not Applicable

HR5 Operations and significant suppliers identified in which the right to exercise freedom of association and collective bargaining may be violated or at significant risk, and actions taken to support these rights

Not Applicable

HR6 Operations and significant suppliers identified as having significant risk for incidents of child labour, and measures taken to contribute to the effective abolition of child labour

Not Applicable

HR7 Operations and significant suppliers identified as having significant risk for incidents of forced or compulsory labour, and measures to contribute to the elimination of all forms of forced or compulsory labour

Not Applicable

HR8 Percentage of security personnel trained in Organisation policies & Procedures concerning aspects of human rights that are relevant to operations

Not Applicable

HR9 Total number of incidents of violations of rights of indigenous people and actions taken Not Applicable

HR10 Percentage and total number of operations that have been subject to human rights reviews and/or impact assessments

Not Applicable

HR11 Number of grievances related to human rights filed, addressed, and resolved through formal grievance mechanisms


Products Responsibility

PR 1 Life cycle stages in which health and safety impacts of products and services are assessed for improvement, and percentage of significant products and services categories subject to such procedures


PR 2 Total number of incidents of non-compliance with regulations and voluntary codes concerning health and safety impacts of products and services


PR3 Type of product & service Information required by procedures and percentage of significant products and services subject to such information requirements

Not Applicable

PR4 Total number of incidents of non-compliance with regulations and voluntary codes concerning product and service information and labelling


PR5 Practices related to customer satisfaction, including results of surveys measuring customer satisfaction


PR6 Programmes for adherence to laws, standards, and voluntary codes related to marketing communications, including advertising, promotion, and sponsorship

Not Applicable

PR7 Total number of incidents of non-compliance with regulations and voluntary codes concerning marketing communications, including advertising, promotion, and sponsorship by type of outcomes

Not Applicable

PR8 Total number of substantiated complaints regarding breaches of customer privacy and losses of customer data


PR9 Monetary value of significant fines for non-compliance with laws and regulations concerning the provision and use of products and services

Not Applicable



OnE Of OuR STROngEST PlaTfORmS‘The System’ – technologically current; fully supportive of a multi-functional operation; facilitator of next generation communication and more...it’s the ideal platform to launch a strong enterprise

OnE Of OuR STROngEST PlaTfORmS‘The System’ – technologically current; fully supportive of a multi-functional operation; facilitator of next generation communication and more...it’s the ideal platform to launch a strong enterprise


Lalith Yatiwella, Thilan Rupasinghe, Ajith Paranavitane, Priyanjith Meegoda, Kapila Perera

(Left - Right)


The Way We Manage

Corporate GovernanceGroup/Company ensures to comply with established best practices in corporate governance and ensures the highest ethical standards in conduct of its business. The Board adopts core values and standards which set out the conduct of staff in their dealings with shareholders, customers, colleagues, suppliers and other stakeholders. Once the core values are set and communicated to all levels of the organisation, the Company is of the belief that the highest standards of integrity will be maintained in business.

Governance Policy and FrameworkGovernance framework covers both corporate governance and business governance. Corporate governance and business governance is interrelated processes and one process is always linked and depended on the other process. Business governance enable us to focus on areas of value creation to the business. Corporate governance process is to safeguard and ensure that the Group/Company achieve business performance maintaining a balance between accountability and assurance of the business process. Thus, we believe our business governance and corporate governance are interlinked to each other as depicted below:

In line with the above governance framework, the Group believes that successfully run business enterprises are founded on a set of fundamental qualities - those that embed transparency, accountability and responsibility within the core of its business operations. Translated into action, the Company’s strong core qualities and guiding corporate governance functions ensure that we remain ‘law abiding’, strictly adhering to the laws and regulations of the country. Business integrity and accountability to stakeholders are top of the mind factors that we inculcate right across - from the Board of Directors to the shop floor.

Statement of ComplianceSinger Group is fully compliant with the Code of Best Practices on Corporate Governance issued jointly by The Institute of Chartered Accountants of Sri Lanka and the Securities and Exchange Commission of Sri Lanka as well as the Rules on Corporate Governance published by the Colombo Stock Exchange. In addition to the above, our subsidiary company Singer Finance (Lanka) PLC is fully compliant with the requirement set out by the Finance Companies Act No. 78 of 1988 and subsequent amendments and Finance Companies Corporate Governance Direction No. 3 of 2008 issued by the Central Bank of Sri Lanka.

The following developments which took place in 2012 further improved Singer corporate governance framework.

• Restructured the Remuneration Committee in compliance with the directive issued by the Security and Exchange Commission and Colombo Stock Exchange.

Chairman’s StatementDear Shareholder,

The sustainability of an Organization and its durability through the passage of time depends on the code of Corporate Governance practiced through every limb of its complex structure. We see organizations shining momentarily and then going into a phase of rapid decline due to the tenets of Corporate Governance being practiced in default.

In order to strengthen our futuristic Corporate Governance standpoint, we have entrusted Chartered Accountants, Messrs Ernst & Young to carry-out a group-wise evaluation to even encompass Associate Companies such that any weakness or gap in the internal controls system will be revealed and we will be in a position to take corrective action immediately to overcome such weakness if any. This cycle will be repeated every three years to ensure the continuous monitoring of Corporate Governance conformity and sustainability of a high standard of business ethics.

The Corporate Governance report lays-down the process of diligence through which we implement our Corporate Governance ethics in order to safeguard our shareholder’s investment through transparency.

Sincerely,



The Way We Manage


Further Improved IFS - ERP system to enhance efficiency and integrity of financial information and controls over financial reports.

Enhance internal audit resources and frequency of audits to ensure that strategic and key operational risks are well-managed and any deviations are escalated on a timely basis.

From 30th September 2012, Group and Company prepared and presented Interim Condensed Financial Statements in accordance with SLFRS and LKAS.

From 31st December 2012, Group and Company prepared and presented Consolidated Financial Statements in accordance with SLFRS and LKAS. (Previously for period up to 31st December 2011, the Group and Company prepared its Financial Statements in accordance with Sri Lanka Accounting Standards which were effective up to 31st December 2011.

In line with implementation of SLFRS and LKAS, Group and the Company has done a Gap Analysis assignment to identify and rectify required financial reporting changes to SLFRS and LKAS. Further to that Group and the Company has done separate assignments to quantify and readjust brought forward financial position (which was previously reported) in accordance with SLFRS and LKAS. The Group and the Company have consulted Messrs KPMG - Chartered Accountants, External Auditors have to carry out both these assignments in consultation with internal management.

Board of Directors appointed Messrs Ernst & Young - Chartered Accountants to carry out internal systems and controls review and to document said internal system and control procedures to enhance integrity of financial reporting, information and controls over financial reports. This assignment is being currently carried out and is expected to be completed in year 2013.

Business GovernanceBusiness Governance (Performance Governance) is linked from Company’s Vision Statement to Final Objective level of grass root level. Business Governance process is started at the point of preparing the annual plan and annual plan is focused on future strategic direction, long-term objectives, medium-term objectives and short-term set targets. Annual Plan is initially approved by Singer Asia Ltd. which is the Intermediate Parent Company and subsequently reviewed and approved by the Board. The Group CEO and Executive Committee review the strategic plan and budgets against the actual performance on a monthly basis and at more frequent intervals, as needed and Chairman and Board of Directors review actual performance at each Board meeting.

IT GovernanceIT Governance process of the Company ensures that IT objectives are aligned with the business objectives that will meet its strategic and operational objectives. IT Governance is an integral part of the Corporate Governance process and which deals primarily with optimising the linkage between Strategic Directions and Information Management of the Company. Competent and dedicated staff are deployed to support this need. Company investment in IT resources covers resources operated and managed centrally and resources deployed in various places. IT recourses include ERP system, other related business systems, internet, e-mails and other Company wide data communication system.

Impact of the IT Governance to diverse functional areas of the Company are driven by certain core objectives which are set below:

Compliance Investing in Licensed Software deployed in compliance with Intellectual Property Law with a view to educate and mandate compliance to such laws throughout the Company.

Operational Efficiency Streamlining of inventory management, logistic management and credit management process so that integrity is maintained across the value chain through near real-time processing.

Prudent Capital Expenditure

All major IT investments are carefully evaluated by the IT Team and built into the business plan and carefully scrutinised at the planning level, and approval is granted by both, Board and Intermediate Parent Company.

Final approval of IT capital expenditure is sought from the Group CEO and Intermediate Parent Company.

Customer Convenience Ensuring process efficiencies to increase the contribution to customer convenience.

Green IT Protecting the Environment by reducing print through migration to e-mails and soft copies.

The Way We Manage


Governance StructureExternal Regulations Internal Regulations

Companies Act No. 07 of 2007 Articles of Association of the Company

Continues Listing Requirements of the Colombo Stock Exchange Singer Finance Manual

Code of Best Practice of Corporate Governance issued jointly by The Institute of Chartered Accountants of Sri Lanka and Securities and Exchange Commission of Sri Lanka

Company’s Code of Ethics, Human Resources Policies and Procedures

In case of Subsidiary Company Singer Finance (Lanka) PLC, requirements set out by the Finance Companies Act No. 78 of 1988 and Subsequent Amendments and Finance Companies Corporate Governance - Direction No. 3 of 2008 issued by the Central Bank of Sri Lanka

Information Technology and other internal manual.

Company’s Standing Institution and Policy and Procedures (P&P)

As diagrammatically presented in above, Group governance structure is set up to create a distinction between the functions of the Board and Management team but ensuring effective co-operations and communication between two groups. Group Chief Executive Officer exercises triangular linking role between Board, Executive Management Committee and other Stakeholders i.e. Shareholders, Employees, Customers, Community and Environment. Group’s Chief Executive Officer is the main communication link with Board and Executive Management Committee as well as he acts as a defacto officer

to maintain a fair role on behalf of Shareholders, Employees, Customers, Community and Environment.

Business EthicsThe Group enshrines the highest ethical standards in the conduct of its business affairs and its Board of Directors are tasked with ensuring that the resultant regime of exemplary governance across all aspects of business are in the best interests of stakeholders. Ethically correct conduct comprising integrity, honesty, fair play and loyalty pervade all Group actions.

The Way We Manage

Board of Directors

Board of Directors of Intermediate Parent Company

Board Remuneration Committee

Executive Committee

Employee

Customer

Community

Environment

Group Chief Executive Officer

Board Audit Committee

Shareholders


Transparency is encouraged in all public disclosures, as well as in the way business and communication take place with all stakeholders. A ‘whistle-blowing policy’ introduced internally in 2009 has increased the level of transparency towards a wider dimension.

All employees are bound by the Company’s written Code of Ethics that includes the following aspects:

Exercise honesty, objectivity and diligence when performing ones duties.

Avoid situations where personal interest might conflict with the interest of the Company; and if so, disclose such interest in advance.

Maintain confidentiality of commercial and price sensitive information.

Work within applicable laws and regulations.

Safeguard the Company’s assets.

Avoid conduct that will reflect badly on the person concerned or the Company’s image.

Strictly avoid giving or accepting any kind of bribe, either directly or indirectly.

Strictly avoid making contributions for political funds, either directly or indirectly.

Strictly avoid any kind of sexual harassment.

The Company has implemented a formal whistle-blowing procedure and encourages any employee who suspects wrong doing at work, whether by management, peers or any other employee, to raise their concerns.

Other PoliciesIn addition, the Company implements policies covering:

Recruitment and selection

Financial integrity

Use of company property including computers

Non-harassment in the workplace

Environment, safety and health

Security of IT system

Responsibility to Customers The Company maintains an island-wide network of outlets and provides a wide choice of products and brands to its customers, augmented by easy payment opportunities. Outstanding customer care and world class after-sales service are two of seven propositions substantiating our claim to be a world-class Company. What is salient about the widespread nature of our distribution is that in most instances, a consumer living in any part of the country need not travel more than 10 km to obtain goods and services from the Company.

Products sold by the Company are of the highest quality and are rigorously tested prior to introduction. The Company extends warranties on its products. It maintains an island-wide network of service centres and franchise agents to facilitate product repairs. Customer grievances, if any, are handled promptly and solutions provided with exchange of merchandise in the unlikely event of a manufacturing defect.

Among developments relevant to customer relations in the year under review was the growing popularity of our Contact Centre established in 2006 to deal with customer complaints and product performance issues as well as to provide customer-related information. In addition to this, the Company conducts customer-loyalty programmes such as the popular Mega Money Programme, Singer Plus Reward Programme and Customer-Service Clinics across the country where any customer can relate their grievances or obtain service for their product on site.

In service to our differently-abled customers, wheelchair ramps and other such infrastructure modifications and facilities are being added to the Company’s retail outlets progressively as part of routine showroom renovations.

EnvironmentSocial responsibility is regarded as a fundamental aspect of Company’s strategy and it is one of the core values of the business. As stated in our value statement ‘we make every effort to ensure that the environment is protected and conserved for future generations’ and in-line with this core value, the Company is committed to minimising any adverse impact the conduct of the business may have on the environment. Further to that, this core value encourages and ensures our products, processes and business does not unnecessarily damage the environment.

The Company is proud to present in this Annual Report, the Embracing Posterity based on the Global Reporting Initiatives (GRI) Guidelines for the second time. The Company’s Social and Environment Management initiations are more fully described in the Encompassing the Future on pages 54 to 95. Code of Best Practice on Corporate GovernanceWe set out below the Corporate Governance practices adopted and practiced by the Company, the extent of adoption of the Code of Best Practice on Corporate Governance issued jointly by The Institute of Chartered Accountant of Sri Lanka and the Securities and Exchange Commission of Sri Lanka and the Rule set out in Section 7.10 of the Colombo Stock Exchange’s Listing Rules on Corporate Governance.

Section AThis section covers Companies extent of adherence to the requirements of the Code of Best Practice on Corporate Governance issued by the Securities and Exchange Commission of Sri Lanka and The Institute of Chartered Accountants of Sri Lanka. This reflects Company’s governance in following six fundamental aspects:

Directors

Director’s Remuneration

Relationship with Shareholders

Accountability and Audit

Institutional Investors

Other Investors

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These are discussed in the sections that follow.

A. DirectorsA.1 - The BoardMain Principle

Every public company should be headed by an effective Board, which should direct, lead and control the Company.

Corporate Governance Principle

SEC & ICASL Code Reference

Requirement of the Code Compliant with the Code

Board Meeting A.1.1 The Board should meet regularly, at least once in every quarter

The Board meets at least four times a year and additional meetings are held if required. The Board subcommittees also met on a regular basis. Circular Resolutions are passed as per the requirements. The Board met 4 times during the financial year. Details of the meetings and attendance of the members are set out on page 129 The meetings convened by the Board subcommittees during 2012 are also provided on page 129.

Responsibility of the Board

A.1.2 Board should be responsible for matters including:

Ensuring the formulation and implementation of a sound business strategy

The Board is responsible for the strategic planning process of the Company. This includes the responsibility for the formulation of the strategic vision and mission of the Company, setting the overall corporate policy and strategy, monitoring performance and reviewing risks and major investments. The Board also takes on the added responsibility of directing Company performance towards achieving the best results possible and increasing shareholder value. The Board sets the broad parameters of the Company’s business. The Company’s business units are then tasked with their application, in achieving specific targets and objectives.

Ensuring that the CEO and Management team possess the skill, experience and knowledge to implement strategy

The profile of the CEO is provided in the Annual Report on page 15.

While the Board of Directors is ultimately responsible for the operations and financial soundness of the Company, the day-to-day management of the Company is entrusted to the Group CEO. There is extensive staff participation in decision-making at all levels, with strategic recommendations on material matters flowing to the Board for final decision.

The Group CEO chairs the Executive Committee and five key management members are Alternate Directors. The Executive Management Committee, comprising all Key Managers who are divisional heads and another two senior managers representing Finance and Factory and Group CEO, meets every week for a performance review and decision-making. The Group CEO chairs the meeting and five Key Managers are in the Committee are also Alternative Directors to the main Board.

The Company’s Annual Plan addresses the requirements of all business units and divisions. This ensures that the entire Company follows the set plans and objectives as articulated in the Annual Plan. These in turn become the primary objectives of the Management Committee which is represented by all Heads of Divisions, and are shared with Divisional Heads and Heads of all SBUs. The Management Committee together with the Heads of Divisions and SBUs have the autonomy and freedom to translate these objectives to specific goals that are achievable.

Key programmes are identified by the Group CEO for each year in line with the Annual Plan after they are discussed at Executive Committee meetings. A review of progress on plan implementation is a key item on the agenda of the monthly Management Review Meetings.

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Ensuring the adoption of an effective CEO and Senior Management succession strategy

Succession planning is given due recognition in the corporate culture. Effective succession planning is a criterion in the performance appraisals of the Senior Management and Key Management.

Addition to that, as part of the development and succession programme, the ‘3x3x3’ initiative seeks to ensure that all positions of Key Managers, Senior Managers, Middle Managers and Junior Managers have been identified and are groomed for succession.

Ensure effective systems to secure integrity of information, internal control and risk management.

The Board has delegated this responsibility to the Board Audit Committee.

The Audit Committee is empowered to review and monitor the financial reporting process of Singer Group so as to provide additional assurance on the reliability of Financial Statements through a process of independent and objective review. As such, the Audit Committee acts as an effective forum in assisting the Board of Directors in discharging their responsibilities on ensuring the quality of financial reporting and related communication to the shareholders and the public.

Audit Committee framework, composition, responsibilities and duties are given in the Audit Committee Report on page 137.

Risk Management framework is given in the Risk Management Report appearing from page 132 to 136.

Ensuring compliance with laws, regulation and ethical standards

The Board follows a policy of strict compliance with laws and regulatory requirements and ensures that stakeholder interests are considered in key corporate direction.

A compliance checklist is provided to Board Audit Committee and Board members in every quarter by the Compliance Officer indicating compliance with applicable laws, regulations etc.

The Company has also issued a Code of Ethics and Human Resources Policies and Procedures applicable to all employees.

All stakeholders’ interest are considered in corporate decisions

The Board adopted core values and standards which set out the conduct of staff in their dealings with shareholders, customers, community, environment, colleagues, suppliers and other stakeholders. Once the core values are set and communicated to all levels of the organisation, there is a belief that the highest standards of integrity are maintained in business.

The Board relies on the integrity and due diligence of Key Managers, Senior Managers, Auditors and Advisors to oversee the Group’s overall performance objectivities, financial plans and annual budgets, investments, financial performance reviews, risk management and corporate governance practices.

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The Company’s values and standards are set with emphasis on adopting appropriate accounting policies and fostering compliance with financial regulations

The Group enshrines the highest ethical standards in the conduct of its business affairs and its Board of Directors are tasked with ensuring that the resultant regime of exemplary governance across all aspects of business are in the best interests of stakeholders. Ethically correct conduct comprising integrity, honesty, fair play and loyalty pervade all Group actions.

Accounting policies are reviewed annually in light of changing business requirements, evolving international and local accounting standards and industry best practice. As mentioned above, significant emphasis is placed on compliance with applicable regulations. Group continues to adopt same accounting policies adopted in year 2011. However, in accordance with SLFRS and LKAS, Group and Company aligned its accounting policies and which are given as part of the Financial Reports in pages 153 to 163.

Fulfilling such other Board functions as relevant to the organisation

The Board makes every endeavour to ensure a balanced and objective assessment of the Company’s position, performance and prospects.

Members from professional accounting bodies and high scholar representatives from the field of economics are on the Board ensuring financial and economic acumen, knowledge and other Board members from the professional marketing bodies ensure stimulation of marketing knowledge of the Board members.

Compliance with laws and seeking independent professional advices

A.1.3 The Board collectively, and Directors individually, must act in accordance with the laws of the country and there should be a procedure agreed by the Board of Directors to obtain independent professional advice where necessary, at the Company’s expense.

As mentioned above, there is a significant emphasis across the organisation to ensure compliance with applicable laws and regulations.

The Board members are permitted to obtain independent professional advice from a third party including the Company’s External Auditors and other professional consultants whenever deemed necessary at the expense of the Company.

Board of Directors appointed Messrs KPMG - Chartered Accountants as consultant to do Gap Analysis of financial information as a result of SLFRS and LKRS, and quantify and readjust brought forward financial position (which was previously reported) in accordance with SLFRS and LKAS Financial Reporting in year 2012.

Except above, no Director obtained any independent professional advice during the year 2012.

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Company Secretary A.1.4 All Directors should have access to the advice and service of the Company’s Secretary, who is responsible to the Board in ensuring, that the Board procedures are followed and that the applicable rules and regulations are complied with. Any question of the removal of the Company Secretary should be a matter for the Board as a whole.

The Company Secretary ensures that all Board Terms of Reference are followed and applicable rules and regulations are adhered to. The Company Secretary advices the Board and ensures that matters concerning the Companies Act, Board procedures and other applicable rules and regulations are followed. All Directors have access to the Company Secretary. The Secretary possesses the required qualifications as set out in the Companies Act.

Independent judgment of Directors

A.1.5 All Directors should bring independent judgment to bear on issues of strategy, performance, resources and standards of business conduct.

The Chairman conducts Board meetings in a manner which ensures that there is effective participation from all Directors, their individual contribution and concerns are objectively assessed prior to making key decisions and that the balance of power is maintained.

In advance of every Board meeting, each Director receives a comprehensive set of Board papers and any additional information requested by the Directors. It is the Group CEO’s duty to ensure that all members are properly briefed.

None of the Independent Directors have held executive responsibilities in the Company, and have submitted a declaration confirming their independence in accordance with Section 7 of the CSE Listing Rules on Corporate Governance as at 31st December 2012.

Dedication of adequate time and effort by the Directors

A.1.6 Every Director should dedicate adequate time and effort to matters of the Board and the Company, to ensure that the duties and responsibilities owned to the Company are satisfactorily discharged.

The Board met on 4 occasions during the year. The Chairman attended all meetings and the attendance of the other Directors are detailed on page 129.

The Board is satisfied that the Chairman and the Non-Executive Directors committed sufficient time during 2012 to fulfil their duties.

Training for new and existing Directors

A.1.7 Every Director should receive appropriate training when first appointed to the Board of a Company, and subsequently as necessary. The Training curricular should encompass both general aspects of directorship and matters specify to the particular industry/company concerned. A Director must recognise that there is a need for continuous training and expansion of the knowledge and skill required to effectively perform his duties as a Director.

The Directors are given the opportunities to familiarise and obtain an in-depth understanding of the Company’s business, its strategies, risks and processes, at their discretion.

Training is provided to Executive Directors and Alternate Directors to equip themselves to discharge their responsibilities effectively. This includes training provided by principles, external and in-house training.

Directors are briefed on changes in laws and regulations, tax laws and accounting standards from time-to-time either during the Board meetings or at specially convened sessions.

The Way We Manage


A.2 Chairman and Group Chief Executive Officer (CEO)Main Principle




Separation of the roles of Chairman and Group CEO

A.2.1 The positions of Chairman and Group CEO are separated to ensure a balance of power and authority and to prevent any one individual from possessing unfettered decision-making authority.

The Chairman’s and Group CEO’s functions are separated to ensure a balance of power of authority and this dual panel structure has been continued throughout the year 2012. The Chairman of the Board of Directors functions in a non-executive capacity with no activities involving the direct supervision of staff or senior management. The Group Chief Executive Officer functions as an Ex-Officio Director of the Board and is the apex executive in charge of the day-to-day management of operations and business of the Company, while providing the link between the Board, Board of the Intermediate Parent Company and Divisional Heads (key management).

A.3 Chairman’s RoleMain PrincipleThe Chairman’s role in preserving good corporate governance is crucial. As the person responsible for running the Board, the Chairman should preserve order and facilitate the effective discharge of Board functions.




Role of Chairman A.3.1 The Chairman should conduct Board proceedings in a proper manner and ensure, inter alia, that:

the effective participation of both Executive and Non-Executive Directors is secured;

all Directors are encouraged to make an effective contribution, within their respective capabilities, for the benefit of the Company;

a balance of power between Executive and Non-Executive Directors is maintained;

the views of Directors on issues under consideration are ascertained; and

the Board is in complete control of the Company’s affairs and alert to its obligations to all shareholders and other stakeholders.

The Chairman is responsible for leading the Board and for its effectiveness. In practice, this means taking responsibility for the Board’s composition, ensuring that the Board focuses on its key tasks and supports the Group CEO in managing the day-to-day running of the Company. The Chairman is also the ultimate point of contact for shareholders, particularly on corporate governance issues.

The Chairman satisfies himself that the information available to the Board is sufficient to make an informed assessment of the Company’s affairs as well as to discharge their duties to all stakeholders.

The Chairman conducts Board meetings in a manner which ensures that there is effective participation from all Directors, their individual contribution and concerns are objectively assessed prior to making key decisions and that the balance of power is maintained.

Chairman ensures that regular meetings are conducted at least once a quarter and the minutes of the meetings are accurately recorded.

Chairman approves the agenda prepared by the Company Secretary.

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A.4 Financial AcumenMain PrincipleThe Board should ensure the availability within it of those with sufficient financial acumen and knowledge to offer guidance on matters of finance.




Financial acumen and knowledge

A.4.1 Availability of sufficient financial acumen and knowledge

The Chairman is a fellow of The Institute of Chartered Accountants of Sri Lanka, fellow of the Chartered Institute of Management Accountants UK and fellow of Chartered Institute of Marketing UK. Group CEO is an Associate Member of The Institute of Chartered Accountants of Sri Lanka and Fellow of the Chartered Institute of Management Accountants UK. In addition, the Boards includes another two members who are Fellows of The Institute of Chartered Accountants of Sri Lanka. These members of the Board have the ability to offer guidance on matters of finance to the Board.

A.5 Board BalanceMain Principle It is preferable for the Board to have a balance of Executive and Non-Executive Directors such that no individual or small group of individuals can dominate the Board’s decision-taking.




Presence of strong team of Non-Executive Directors

A.5.1 The Board should include Non-Executive Directors of sufficient calibre and number for their views to carry significant weight in the Board’s decisions.

The Board should include at least two Non-Executive Directors or such number of Non-Executive Directors equivalent to one-third of total number of Directors, whichever is higher. In the event, the Chairman and CEO is the same person, Non-Executive Directors should comprise a majority of the Board.

Seven out of eight Directors on the Board are Non-Executive Directors which is well above the minimum prescribed by the Code. This ensure views of Non-Executive Directors carry a significant weight in the decisions made by the Board.

Independent Non-Executive Directors

A.5.2 Where the constitution of the Board of Directors includes only two Non-Executive Directors, both such Non-Executive Directors should be ‘independent’. In all other instances two or one-third of Non-Executive Directors appointed to the Board of Directors whichever is higher should be ‘independent’.

Three out of seven Non-Executive Directors on the Board are independent-based on the criteria set by this Code and the Listing Rules of the Colombo Stock Exchange.

The Name of the Independent Non-Executive Directors are disclosed on page 144 and back page of the Annual Report.

The Way We Manage





Independence of Non-Executive Directors

A.5.3 For a Director to be deemed ‘independent’ such Director should be independent of management and free of any business or other relationship that could materially interfere with or could reasonably be perceived to materially interfere with the exercise of their unfettered and independent judgment.

The Company maintains the ‘Interest Register’ required by the Companies Act No. 07 of 2007, which also shows details of Director’s Interest in Contracts/Company or Group.

A disclosure on related party transactions is available on pages 195 to 198.

Annual Declaration A.5.4 Each Non-Executive Director should submit a signed and dated declaration annually of his/her independence or non-independence against the specified criteria set out in the Specimen in Schedule H.

Every Non-Executive Independent Director of the Company has made written submissions as to their independence against the specified criteria set out by the Company, which is in line with the requirements of Schedule H of this Code.

Determination of Independence of Director

A.5.5 The Board should make a determination annually as to the independence or non-independence of each Non-Executive Director based on such a declaration made of decided criteria and other information available to the Board, and should set out in the Annual Report the names of Directors determined to be ‘independent’.

The Board should specify the criteria not met and the basis for its determination in the Annual Report, if it determines that a Director is independent notwithstanding the existence of relationships or circumstances which indicate the contrary.

The Board has determined the independence of Directors based on the declarations submitted by the Non-Executive Directors, as to their independence, as a fair representation and will continue to evaluate their independence on this basis annually. No circumstances have arisen for the determination of independence by the Board, beyond the criteria set out in the Code. Independent Non-Executive Directors are:

Dr. G.C.B. WijeyesingheDr. S. KelegamaDeshabandu A.M. de S. Jayaratne

Requirement to appoint ‘Senior Non-Executive Director’

A.5.6 In the event the Chairman and CEO is the same person, the Board should appoint one of the Independent Non-Executive Directors to be the ‘Senior Independent Director’ (SID) and disclose this appointment in the Annual Report.

The requirement to appoint a Senior Independent Director does not arise as the roles of Chairman and Group CEO are separated.

The Way We Manage





Confidential discussion with Senior Independent Director

A.5.7 The Senior Independent Director should make himself available for confidential discussions with other Directors who may have concerns which they believe have not been properly considered by the Board as a whole and which pertain to significant issues that are detrimental to the Company.

Not Applicable

Chairman’s meetings with Non-Executive Directors

A.5.8 The Chairman should hold meetings with the Non-Executive Directors only, without the Executive Directors being present, as necessary and at least once each year.

Chairman meets with NEDs without the presence of Executive Directors, whenever necessary.

Recording of concerns in Board Minutes

A.5.9 Where Directors have concerns about the matters of the Company which cannot be unanimously resolved, they should ensure their concerns are recorded in the Board Minutes.

Concerns raised by the Directors during the year, if any, are recorded in the minutes of Board meetings with adequate details by the Company Secretary.

A.6 Supply of InformationMain Principle The Board should be provided with timely information in a form and of a quality appropriate to enable it to discharge its duties.




Management obligation to provide appropriate and timely information to the Board

A.6.1 Management has an obligation to provide the Board with appropriate and timely information, but information volunteered by management may not be enough in all circumstances and Directors should make further inquiries where necessary. The Chairman should ensure all Directors are properly briefed on issues arising at Board meetings.

The Company ensures that the Directors receive adequate information in a timely manner. On urgent matters, every effort is made to provide the information, as early as possible.

The Board receives a standard set of documents, which are timely, accurate, relevant and comprehensive. These papers include a detailed analysis of financial and non-financial information. The Board may call for additional information or clarify issues with any member of the Executive Committee. If necessary, all Directors are adequately briefed by the Group CEO on matters arising at Board meetings. The Secretary and the Compliance Officer ensure that Board Papers are circulated in advance prior to Board meeting.

If necessary, members of the Executive Committee, External Auditors and Outside Consultancies makes presentations on issues of importance.

The Chairman ensures that all Directors are briefed adequately on issues arising at Board meetings.

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Adequate time for effective conduct of Board meeting

A.6.2 The minutes, agenda and papers required for a Board meeting should ordinarily be provided to Directors at least seven (7) days before the meeting, to facilitate its effective conduct.

The minutes, agenda and papers required for Board meeting are provided in advance to facilitate its effective conduct.

A.7 Appointments to the BoardMain Principle There should be a formal and transparent procedure for the appointment of new Directors to the Board.




Nomination Committee

A.7.1 A Nomination Committee should be established to make recommendations to the Board on all new Board appointments. Terms of Reference for Nomination Committees are set out in Schedule A. The Chairman and members of the Nomination Committee should be identified in the Annual Report.

Although the formal Nomination Committee is not formed by the Board, new appointments are decided based on consent of the Chairman, all Board Directors and the consent from the Intermediate Parent Company and the final decision is made by the Board.

No new appointment in year 2012.

Assessment of Board Composition by the Nomination Committee

A.7.2 The Nomination Committee or in the absence of a Nomination Committee, the Board as a whole should annually assess Board-composition to ascertain whether the combined knowledge and experience of the Board matches the strategic demands facing the Company. The findings of such assessment should be taken into account when new Board appointments are considered and when incumbent Directors come up for re-election.

Board as a whole annually assessed the composition of the Board to ensure that the combined knowledge and experience of the Board matches the strategic demand facing the Company. The findings of such assessments are taken into account when new Board appointments are considered.

Disclose of required details of new Directors to shareholders

A.7.3 Upon the appointment of a new Director to the Board, the Company should forthwith disclose to shareholders:

a brief résumé of the Director;

the nature of his expertise in relevant functional areas;

the names of companies in which the Director holds directorships or memberships in Board committees; and

whether such a Director can be considered ‘independent’.

All new appointments are communicated to the shareholders via the Colombo Stock Exchange.

No requirement was arisen in year 2012 due to none of new appointment to the Board.

The details of the current Board of Directors are provided on pages 12 to 17 in this Annual Report.

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A.8 Re-electionMain Principle All Directors should be required to submit themselves for re-election at regular intervals and at least once every three years.




Re-election of Non-Executive Directors, Chairman and CEO

A.8.1 Non-Executive Directors should be appointed for specified terms subject to re-election and to the provisions in the Companies Act relating to the removal of a Director, and their reappointment should not be automatic.

In terms of the Articles of Association, one-third of the Directors, except for Chairman, Managing Director/CEO, retire in rotation and may offer themselves for re-election at the AGM. By virtue of being the Chairman, Managing Director/CEO are not required to make themselves available for re-election as the Articles of Association.

The Company’s Articles of Association provides that any Director appointed by the Board to hold office until the next Annual General Meeting, may seek reappointment by the shareholders at the said AGM.

Based on the article and the current composition of the Board, a Director has to come forward for re-election, every three years.

A résumé of the Directors coming up for re-election at the AGM, 2013 is available on pages 12 and 17.

The Chief Executive Officer does not retire by rotation.

A.8.2 All Directors including the Chairman of the Board, should be subject to election by shareholders at the first opportunity after their appointment, and to re-election thereafter at intervals of no more than three years. The names of Directors submitted for election or re-election should be accompanied by a résumé minimally as set out in paragraph A.7.3 above, to enable shareholders to make an informed decision on their election.

A.9 Appraisal of Board PerformanceMain Principle Boards should periodically appraise their own performance in order to ensure that Board responsibilities are satisfactorily discharged.




Annual performance evaluation of the Board and its Committee

A.9.1 The Board should annually appraise itself on its performance in the discharge of its key responsibilities as set out in A.1.2.

The performance of the Board and the subcommittee is reviewed and evaluated by the Board and Chairman based on a self-appraisal basis.

A.9.2 The Board should also undertake an annual self-evaluation of its own performance and that of its Committees.

A.9.3 The Board should state how such performance evaluations have been conducted, in the Annual Report.

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A.10 Disclosure of Information in Respect of DirectorsMain Principle Shareholders should be kept advised of relevant details in respect of Directors.




Details in respect of Directors

A.10.1 The Annual Report of the Company should set out the following information in relation to each Director:

i. Name, qualifications and brief profile;

ii. The nature of his/her expertise in relevant functional areas;

iii. Immediate family and/or material business relationships with other Directors of the Company;

iv. Names of listed companies in Sri Lanka in which the Director concerned serves as a Director;

v. Names of other companies in which the Director concerned serves as a Director, provided that where he/she holds directorships in companies within a Group of which the Company is a part, their names need not be disclosed; it is sufficient to state that he/she holds other directorships in such companies;

vi. Number/percentage of Board meetings of the Company attended during the year;

vii. Committees in which the Director serves as Chairman or a member;

viii. Number/percentage of Committee meetings attended during the year.

Available on pages 12 and 17 of Board of Directors


Not Applicable



Available on page 129.



The Way We Manage


A.11 Appraisal of Group Chief Executive OfficerMain Principle The Board should be required, at least annually, to assess the performance of the Group CEO.




Setting annual targets and the appraisal of performance of the CEO

A.11.1

A.11.2

At the commencement of every fiscal year, the Board in consultation with the CEO, should set, in line with the short, medium and long-term objectives of the Company, reasonable financial and non-financial targets that should be met by the Group CEO during the year.

The performance of the Group CEO should be evaluated by the Board at the end of each fiscal year to ascertain whether the targets set by the Board have been achieved and if not, whether the failure to meet such targets was reasonable in the circumstances.

The Annual budget is prepared setting up short-term, medium-term and long-term financial and non-financial goals. The Annual budget is initially approved by the Intermediate Parent Company, Singer Asia Ltd. and subsequently approved by the Board.

Assessment of performance of the Group CEO is carried out by both Intermediate Parent Company’s Board and the local Board at the end of each year to ensure that pre-agreed targets have been achieved or if not whether there are acceptable reasons for not achieving them.

B. Directors’ RemunerationB.1 Remuneration ProcedureMain Principle Companies should establish a formal and transparent procedure for developing policy on executive remuneration and for fixing the remuneration packages of individual Directors. No Director should be involved in deciding his/her own remuneration.




Establishment of the Remuneration Committee

B.1.1 To avoid potential conflicts of interest, the Board of Directors should set up a Remuneration Committee to make recommendations to the Board, within agreed terms of reference, on the Company’s framework of remunerating Executive Directors. (These also include Post-Employment Benefits as well as Terminal Benefits) Terms of Reference for Remuneration Committees are set out in Schedule C.

The scope of the Committee is to ‘look into fees, remuneration and perquisites of the Chairman, Group CEO, Independent Directors and Executive Directors of the Board of the Company including Alternate Directors and approve recommendations made by the Group Chief Executive Officer and the Corporate Office of Singer Asia Ltd.’.

Singer Asia Ltd., is the Intermediate Partner of the Company.

Composition of the Remuneration Committee

B.1.2 Remuneration Committees should consist exclusively of Non-Executive Directors, and should have a Chairman, who should be appointed by the Board.

The Committee consists of the three Independent Non-Executive Directors and Chairman who is also a Non-Executive Director. Group CEO and Finance Director participate by invitation. The Committee is Chaired by an Independent Non-Executive Director. The Chairman, the Group CEO and the Finance Director assist the Committee by providing the relevant information and participating in its analysis and deliberations.

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Chairman and Members of the Remuneration Committee

B.1.3 The Chairman and Members of the Remuneration Committee should be listed in the Annual Report each year.

Please refer page 138 of the Remuneration Committee Report for details of the Chairman and Members of the Board Remuneration Committee

Determination of remuneration of Non-Executive Directors

B.1.4 The Board as a whole, or where required by the Articles of Association the shareholders, should determine the remuneration of Non-Executive Directors, including members of the Remuneration Committee, within the limits set in the Articles of Association. Where permitted by the Articles, the Board may delegate this responsibility to a Subcommittee of the Board, which might include the CEO.

After consideration of the recommendation made by the Group Chief Executive Officer and the Corporate Office of Singer Asia Ltd., Board as a whole decides the remuneration of the Non-Executive Directors. The Non-Executive Directors receive a fee for being a Director of the Board and an additional fee for either chairing or being a member of a Board Subcommittee. They do not receive any performance/incentive payments.

Consultation of the Chairman and access to professional advice

B.1.5 The Remuneration Committee should consult the Chairman and/or CEO about its proposals relating to the remuneration of other Executive Directors and have access to professional advice from within and outside the Company, in discharging their responsibilities.

The Committee has the authority to seek internal and external independent professional advice on matters falling within its purview, at the Company’s expense. Views of the Chairman and Group CEO are obtained as they too are members of the said Board - Subcommittee.

B.2 Level and Make Up of RemunerationMain Principle Levels of remuneration of both Executive and Non-Executive Directors should be sufficient to attract and retain the Directors needed to run the Company successfully. A proportion of Executive Directors’ remuneration should be structured to link rewards to corporate and individual performance.




Executive Directors’ remuneration package

B.2.1 The Remuneration Committee should provide the packages needed to attract, retain and motivate Executive Directors of the quality required but should avoid paying more than is necessary for this purpose.

The Board Remuneration Committee and also the Board ensure that Executive Director - Group CEO and another five Executive Directors - (Alternate Directors to the Non-Executive Directors) who are on the Board are provided with an attractive remuneration package.

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Comparison of remuneration with other Companies/Other Companies in the Group

B.2.2

B.2.3

The Remuneration Committee should judge where to position levels of remuneration of the Company, relative to other companies. It should be aware what comparable companies are paying and should take account of relative performance, but should use such comparisons with caution, mindful of the risk that they can result in an increase of remuneration levels with no corresponding improvement in performance.

The Remuneration Committee should be sensitive to remuneration and employment conditions elsewhere in the Company or Group of which it is a part, especially when determining annual salary increases.

A primary objective of compensation packages is to attract and retain a highly qualified and experienced workforce and reward performances. These compensation packages should provide compensation appropriate for each business within the Group and commensurate with each employee’s level of experience and contribution, bearing in mind the business performance and long-term shareholder returns.

Performance-based remuneration of Executive Directors

B.2.4 The performance-related elements of remuneration of Executive Directors should be designed and tailored to align their interests with those of the Company and main stakeholders and to give these Directors appropriate incentives to perform at the highest levels.

Objectives for Executive Directors including Group CEO are set at the beginning of the year and the remuneration including the performance bonus is decided based upon the degree of achievement of such pre-set targets.

Executive share options

B.2.5 Executive share options should not be offered at a discount (i.e., less than market price prevailing at the time the exercise price is determined), save as permitted by the Listing Rules of the Colombo Stock Exchange.

Presently Company does not have a Executive Share Option Scheme.

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Designing the remuneration of Executive Directors

B.2.6 In designing schemes of performance-related remuneration, Remuneration Committees should follow the provisions set out in Schedule D.

Please refer Remuneration Committee Report on page 138.

Early termination of Executive Directors

B.2.7 Remuneration Committees should consider what compensation commitments (including pension contributions) their Directors’ contracts of service, if any, entail in the event of early termination. Remuneration Committees should in particular, consider the advantages of providing explicitly for such compensation commitments to apply other than in the case of removal for misconduct, in initial contracts.

Where the initial contract does not explicitly provide for compensation commitments, Remuneration Committees should, within legal constraints, tailor their approach in early termination cases to the relevant circumstances. The broad aim should be, to avoid rewarding poor performance while dealing fairly with cases where departure is not due to poor performance.

Not applicable to the Board except for Group Chief Executive Officer and other Executive Directors who are employees of the Company, and their terms of employment are governed by the contract of service/employment.

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Level of remuneration of Non-Executive Directors

B.2.9 Levels of remuneration for Non-Executive Directors should reflect the time commitment and responsibilities of their role, taking into consideration market practices. Remuneration for Non-Executive Directors should not normally include share options. If exceptionally options are granted, shareholder approval should be sought in advance and any shares acquired by exercise of the options should be held until at least one year after the Non-Executive Director leaves the Board. Holding share options could be relevant to the determination of a Non-Executive Director’s independence. (as set out in provision A.5.5)

Non-Executive Directors of the Company are paid nominal fees commensurate with their time and role in the Company and taking into consideration market practices and recommendations made by the Group Chief Executive Officer of Singer Asia Ltd., as the Intermediate Parent of the Company.

Non-Executive Directors are not included in share options as there is no scheme in existence.

B.3 Disclosure of RemunerationMain Principle The Company’s Annual Report should contain a Statement of Remuneration Policy and details of remuneration of the Board as a whole.




Disclosure of Remuneration

B.3.1 The Annual Report should set out the names of Directors (or persons in the Parent Company’s Committee in the case of a Group Company) comprising the Remuneration Committee, contain a statement of remuneration policy and set out the aggregate remuneration paid to Executive and Non-Executive Directors.

Please refer Remuneration Committee Report on page 138 for disclosure on the names of Remuneration Committee members and Remuneration Policy of the Company.

Please refer Note 40 to the Financial Statements on page 198 for aggregate remuneration paid to Executive and Non-Executive Directors.

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C. Relations with ShareholdersC.1 Constructive use of Annual General Meeting (AGM) and Conduct of General Meetings Main Principle Boards should use the AGM to communicate with shareholders and should encourage their participation.




Use of Proxy Votes C.1.1 Companies should count all proxy votes and should indicate the level of proxies lodged on each resolution, and the balance for and against the resolution, after it has been dealt with on a show of hands, except where a poll is called.

The Company has in place an effective mechanism to count all proxy votes to indicate to the Chairman the level of proxies lodged on each resolution and the number of votes for and against the resolution.

Separate Resolution for all separate issues at the AGM

C.1.2 Companies should propose a separate resolution at the AGM on each substantially separate issue and should in particular propose a resolution at the AGM relating to the adoption of the report and accounts.

Company proposes a separate resolution at the AGM on each substantially separate issue.

Further, adoption of the Annual Report of the Board of Directors on the affairs of the Company and Audited Financial Statements together with the Report of the Auditors thereon are considered as a separate resolution.

Availability of All Subcommittee Chairmen

C.1.3 The Chairman of the Board should arrange for the Chairmen of the Audit, Remuneration and Nomination Committees to be available to answer questions at the AGM if so requested by the Chairman.

The Chairman of the Company ensures that Chairmen of all Board Subcommittees namely, Audit and Remuneration are present at the AGM to answer the questions under their purview.

Adequate Notice of the AGM

C.1.4 Companies should arrange for the Notice of the AGM and related papers to be sent to shareholders at least 21 calendar days or other period determined by statute, before the meeting.

A copy of the Annual Report including Financial Statements, Notice of the Meeting and the Form of the Proxy are sent to shareholders 15 working days prior to the date of the AGM, as requested by statute, in order to provide the opportunity to all the shareholders to attend the AGM.

Procedures of Voting at AGM

C.1.5 Companies should circulate with every Notice of General Meeting, a summary of the procedures governing voting at General Meetings.

A summary of the procedures governing voting at General Meeting is circulated to shareholders with every Notice of the General Meeting.

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C.2 Major TransactionsMain PrincipleFurther to compliance with the requirements under the Companies Act, Directors should disclose to shareholders all proposed corporate transactions, which if entered into, would materially alter/vary the Company’s net assets base or in the case of a Company with subsidiaries, the consolidated Group net asset base.




Disclosure on ‘Major Transaction’

C.2.1 Prior to a company engaging in or committing to a ‘Major Transaction’, involving the acquisition, sale or disposition of greater than half of the net value of the Company’s assets or that of a subsidiary which has a material bearing on the consolidated net assets of the Company, Directors should disclose to shareholders all material facts of such transactions.

During the year, there were no major transactions as defined by Section 185 of the Company’s Act No. 07 of 2007 which materially affect the Net Assets Base of the Company or consolidated Group Net Asset Base.

Transactions which materially affect the net assets base of the Company will be disclosed in the Quarterly/Annual Financial Statements, if any.

D. Accountability and AuditD.1 Financial ReportingMain PrincipleThe Board should present a balanced and understandable assessment of the Company’s financial position, performance and prospects.




Board’s responsibility for Statutory and Regulatory Reporting

D.1.1 The Board’s responsibility to present a balanced and understandable assessment extends to interim and other price-sensitive public reports and reports to regulators, as well as to information required to be presented by statutory requirements.

The Board is well aware of its responsibility to present regulatory and statutory reporting in a balanced and understandable manner and a statement to this effect is given in the Statement of Directors’ Responsibility on page 146 confirming this position.

The Company had strictly complied with the requirements of the Companies Act No. 07 of 2007 in the preparation of Quarterly and Annual Financial Statements which are prepared and presented in conformity with Sri Lanka Accounting Standards. Further, Company has complied with the reporting requirements prescribed by the regulatory authority such as the Colombo Stock Exchange.

In case of Subsidiary Company - Singer Finance (Lanka) PLC has also complied with the requirements of the Finance Companies Act No. 78 of 1988 and amendments thereto and reporting requirements prescribed by the regulatory authorities such as the Central Bank of Sri Lanka and the Colombo Stock Exchange. Given below is a table containing the dates on which the annual and Interim Financial Statements were uploaded to the CSE website/dispatched to the shareholders in the year under review:

Report Date of Dispatch or Upload

Status

Annual Report for the year ended 31st December 2011 06th March 2012 Compliant

1st Quarter 2012 02nd May 2012 Compliant

2nd Quarter 2012 07th August 2012 Compliant

3rd Quarter 2012 31st October 2012 Compliant

4th Quarter 2012 28th February 2013 Compliant

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Directors’ Report in the Annual Report

D.1.2 The Directors’ Report, which forms part of the Annual Report, should contain declarations by the Directors to the effect that:

the Company has not engaged in any activity which contravenes laws and regulations;

The Annual Report of the Board of Directors on the Affairs of the Company given on pages 141 to 145 covers all of these sections.

Addition to that Company has established procedures to ensure compliance with all applicable statutory and regulatory requirements. The Accountants of respective companies within the Group act as Compliance Officers and are responsible for ensuring proper compliance with applicable laws and regulations.

A compliance statement is tabled at each Board meeting by the Chief Compliance Officer.

the Directors have declared all material interests in contracts involving the Company and refrained from voting on matters in which they were materially interested;

the Company has made all endeavours to ensure the equitable treatment of shareholders;

the business is a going concern, with supporting assumptions or qualifications as necessary; and

they have conducted a review of the internal controls, covering financial, operational and compliance controls and risk management, and have obtained reasonable assurance of their effectiveness and successful adherence therewith, and, if it is unable to make any of these declarations, to explain why it is unable to do so.

The Company’s compliance with Section 7.10 of the Colombo Stock Exchange Listing Rules on Corporate Governance and details of such compliance are discussed on pages 127 and 128 of this Report.

Statements of Directors’ and Auditors’ Responsibility for the Financial Statements

D.1.3 The Annual Report should contain a statement setting out the responsibilities of the Board for the preparation and presentation of Financial Statements, together with a statement by the Auditors about their reporting responsibilities.

The ‘Statement of Directors’ Responsibility’ is given on Page 146.

The ‘Independent Auditors’ Report’ on Page 147 states the Auditor’s responsibility.

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Management Discussion and Analysis

D.1.4 The Annual Report should contain a ‘Management Discussion and Analysis’, discussing, among other issues:

industry structure and developments;

opportunities and threats; risks and concerns; internal control systems and

their adequacy; social and environmental

protection activities carried out by the Company;

Please refer Chairman’s Letter on Pages 6 to 7, Group Chief Executive Officer’s Review on Pages 8 to 11, Review of Operation (Saga of Our Unabated Journey) on page 20, Encompassing the Future on page 54 and Result in Perspective on page 44 of this Annual Report.

financial performance; material developments in

human resource/industrial relations; and

prospects for the future.

Declaration by the Board on the going concern of the business

D.1.5 The Directors should report that the business is a going concern, with supporting assumptions or qualifications as necessary. The matters to which the Board should give due consideration when adopting the going concern assumption are set out in Schedule E to this Code.

Please refer page 141 of this ‘Annual Report to the Board of Directors’ and the ‘Statement of Directors’ Responsibility’ on page 146 for the required declaration.

Summon on EGM to notify serious loss of capital

D.1.6 In the event the net assets of the Company falling below 50% of the value of the Company’s shareholders’ funds, the Directors shall forthwith summon an Extraordinary General Meeting of the Company to notify shareholders of the position and of remedial action being taken.

Likelihood of such occurrence is remote. However, should the situation arise, an EGM will be called for and shareholders will be notified.

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D.2 Internal ControlMain PrincipleThe Board should maintain a sound system of internal control to safeguard shareholders’ investments and the Company’s assets.




Annual Review of the effectiveness of Group’s system of internal control

D.2.1 The Directors should, at least annually, conduct a review of the effectiveness of the Group’s system of internal controls, so as to be able to report to shareholders as required in D.1.2. This could be made the responsibility of the Audit Committee.

The Company’s Directors are responsible for instituting a system of internal controls to ensure the effective implementation of all policies and decisions of the Board. This framework is designed to provide reasonable but not absolute assurance that all aspects are safeguarded.

In year 2012, Board of Directors appointed Messrs Ernst and Young - Chartered Accountants to carry out internal system and control review and to document said internal system and control procedure to enhance integrity of financial reporting and information and controls over financial reports. This assignment is being currently carried out and expects to complete in year 2013.

The Company employs personnel across different levels of operations to apply these internal controls, while the Internal Audit Department reviews the effectiveness of such controls.

The Company’s operations are also subject to review by the Corporate Internal Audit Division of Retail Holdings NV, the Ultimate Parent Company of Singer (Sri Lanka) PLC.

The Company has its own internal audit processes, implemented to ensure that effective controls are in place. These processes extend across all Company operations.

The internal audit function is headed by the Head of Risk Management, who reports to the Board Audit Committee and Group CEO and the Corporate Internal Auditor.

In relation to the retail network, the internal audit function includes an individual risk assessment for every outlet directly operated by Singer (Sri Lanka) PLC, based on five criteria:

1. Receivables management

2. Inventory management

3. Cash management

4. Internal checks and balances

5. Effectiveness of internal controls

Each location is graded by the Internal Audit Department based on its adherence to controls and its administrative performance on the management of the five criteria mentioned above.

Review the need for internal audit function

D.2.2 Companies which do not have an internal audit function should from time to time review the need for one.

This is not applicable as the Risk Management and Internal Audit is responsible for internal audit functions.

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D.3 Audit CommitteeMain PrincipleThe Board should establish formal and transparent arrangements for considering how they should select and apply accounting policies, financial reporting and internal control principles and maintaining an appropriate relationship with the Company’s Auditors.




Composition of the Audit Committee

D.3.1 The Audit Committee should be comprised of a minimum of two Independent Non-Executive Directors (in instances where a company has only two Directors on its Board) or exclusively by Non-Executive Directors, a majority of whom should be independent, whichever is higher. The Chairman of the Committee should be a Non-Executive Director, appointed by the Board.

All members of the Board Audit Committee are Independent Non-Executive Directors.

Details of the member, invitees and Secretary of the Committee are found on page 137 of the ‘Audit Committee Report’ under the heading ‘Composition of the Committee’.

Duties of the Audit Committee

D.3.2 The duties of the Audit Committee should include keeping under review the scope and results of the audit and its effectiveness, and the independence and objectivity of the Auditors. Where the Auditors also supply a substantial volume of non-audit services to the Company, the Committee should keep the nature and extent of such services under review, seeking to balance objectivity, independence and value for money.

As stated in the Report of the Audit Committee of the Company it regularly reviews scope, results and effectiveness of the Audit.

Details of ‘Duties of the Audit Committee’ are found on page 137 of the ‘Audit Committee Report’ under the heading ‘Responsibilities and Duties of the Committee’.

Terms of Reference of the Audit Committee

D.3.3 The Audit Committee should have a written Terms of Reference, dealing clearly with its authority and duties. (As referred to in the Code).

Detailed guidance on the scope and functions of the Audit Committee can be found in the Code of Best Practice on Audit Committees issued by The Institute of Chartered Accountants of Sri Lanka (ICASL) in May 2002.

Terms of Reference of the Board Audit Committee is clearly defined in the Charter of the Audit Committee approved by the Board of Directors. This clearly explains the purpose of the Committee, its duties and responsibilities together with the scope and functions of the Committee. The Committee mainly deals with the matters pertaining to statutory and regulatory compliance in financial reporting, matters with regard to the External Auditors, internal audit and risk management procedures of the Company.

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Disclosure of names of the members of the Audit Committee

D.3.4 The names of Directors (persons in the Parent Company’s Committee in the case of a Group Company) comprising the Audit Committee should be disclosed in the Annual Report.

The Committee should also make a determination of the independence of the Auditors and should disclose the basis of such determination in the Annual Report.

The Annual Report should contain a Report by the Audit Committee, setting out the manner of compliance by the Company, in relation to the above, during the period to which the Annual Report relates.

Names of the members of the Audit Committee are given on page 137 under the section on the ‘Composition of the Committee’ and disclosure on the independence of the Auditors is found on page 145 under the ‘Auditors’ in the ‘Annual Report of the Board of Directors on the Affairs of the Company’ on pages 141 to 145.

D.4 Code of Business Conduct and EthicsMain PrincipleCompanies must adopt a Code of Business Conduct and Ethics for Directors and members of the senior management team and must promptly disclose any waivers of the Code for Directors or others.




Disclosure of Code of Business Conduct and Ethics

D.4.1 All Companies must disclose whether they have a Code of Business Conduct and Ethics for Directors and members of the senior management team and if they have such a Code, make an affirmative declaration in the Annual Report that all Directors and members of the senior management team have complied with such Code, and if unable to make that declaration, state why they are unable to do so.

Company has an internally-developed Code of Conduct. All employees including Directors, Key Managers and Senior Managers are bound by the Company’s written Code of Ethics that includes the following aspects:

Exercise honesty, objectivity and diligence when performing ones duties.

Avoid situations where personal interest might conflict with the interest of the Company; and if so, disclose such interest in advance.

Maintain confidentiality of commercial and price sensitive information.

Work within applicable laws and regulations.

Safeguard the Company’s assets.

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Each Company may determine its own policies in the formulation of such a Code, but all companies should address the following important topics in their respective Codes:

conflict of interest;

corporate opportunities;

confidentiality;

fair dealing;

protection and proper use of Company assets;

compliance with laws, rules and regulations (including insider trading laws); and

encouraging the reporting of any illegal or unethical behaviour.

Avoid conduct that will reflect badly on the person concerned or the Company’s image.

Strictly avoid giving or accepting any kind of bribe, either directly or indirectly.

Strictly avoid making contributions for political funds, either directly or indirectly.

Strictly avoid any kind of sexual harassment.

The Company has implemented a formal whistle-blowing procedure and encourages any employee who suspects wrong doing at work, whether by management, peers or any other employee, to raise their concerns.

Other Policies In addition, the Company implements policies covering:

Recruitment and selection

Financial integrity

Use of Company property including computers

Non-harassment in the work place

Environment, safety and health

Security of IT system

Affirmative Statement by the Chairman

D.4.2 The Chairman must affirm in the Company’s Annual Report that he is not aware of any violation of any of the provisions of the Code of Business Conduct and Ethics.

Please refer Chairman’s Letter on page 6 to 7 in this Report.

D.5 Corporate Governance DisclosuresDirectors should be required to disclose the extent to which the Company adheres to established principles and practices of good Corporate Governance.




Disclosure of Corporate Governance

D.5.1 The Directors should include in the Company’s Annual Report a Corporate Governance Report, setting out the manner and extent to which the Company has complied with the principles and provisions of this Code.

This Report from page 98 to 129 sets out the manner and extent to which Singer (Sri Lanka) PLC has complied with the principles and provisions of the Code.

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SHAREHOLDERSE. Institutional InvestorsE.1 Shareholder VotingMain PrincipleInstitutional shareholders have a responsibility to make considered use of their votes and should be encouraged to ensure their voting intentions are translated into practice.




Communication with Shareholders

E.1.1 A listed company should conduct a regular and structured dialogue with shareholders based on a mutual understanding of objectives. Arising from such dialogue, the Chairman should ensure the views of shareholders are communicated to the Board as a whole.

In order to avoid conflict of interest by nurturing the mutual understanding, the Board carries out dialogues with its shareholders at General Meetings. In this regards, the Annual General Meeting (AGM) of the Company plays a critical role. Voting of the shareholders is crucial in carrying a resolution at the AGM. The Chairman who plays the role of the agent and communicates the views and queries of the shareholders to Board and the Key and Senior Management in order to ensure that the views are properly communicated to the Company.

Shareholders are provided with Quarterly Financial Statements and the Annual Report, which the Company considered as its principle communication with them and other stakeholders. These reports are also available on the Company’s website - www.singersl.com and are provided to the Colombo Stock Exchange.

Any information that the Board considered as price sensitive is disseminated to the shareholders as necessary.

E.2 Evaluation of Governance Disclosures




Due weight by Institutional Investors

E.2.1 When evaluating Companies’ governance arrangements, particularly those relating to Board structure and composition, institutional investors should be encouraged to give due weight to all relevant factors drawn to their attention.

The Institutional Investors are at liberty to give due weight on matters relating to the Board structure and composition, when they consider resolutions relating to Board structure and composition.

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F. Other InvestorsF.1 Investing/Divesting Decision




Individual Shareholders

F.1 Individual shareholders, investing directly in shares of companies should be encouraged to carry out adequate analysis or seek independent advice in investing or divesting decisions.

Individual investors are encouraged to carry out adequate analysis or seek independent advice in investing or divesting decisions.

Individual Shareholder Voting

F.2 Individual shareholders should be encouraged to participate in General Meetings of companies and exercise their voting rights.

Individual shareholders are encouraged to participate in General Meeting of the Company and exercise their voting rights.

SECTION BThis section covers Company’s extent of adherence to the requirements of the Continues Listing Requirements Section 7.10 on Corporate Governance Rules for Listed Companies issued by the Colombo Stock Exchange. This reflects Companys’ level of conformity to CSE’s Listing Rules which comprise of the following fundamental principles:

Non-Executive Directors

Independent Directors

Disclosures Relating to Directors

Remuneration Committee

Audit Committee

The following table presents the details of the Company’s compliance with Section 7.10 of the CSE Listing Rules on Corporate Governance as at 31st December 2012:

Rule No. Corporate Governance Rule Details of Compliance

Board of Directors

7.10.1 Number of Non-Executive Directors - One-third of the total number of Directors, subject to a minimum of two.

The Board of Directors comprises eight Directors, seven of whom are Non-Executive Directors.

7.10.2 Number of Independent Directors - One-third of Non-Executive Directors, subject to a minimum of two.

Three of the Non-Executive Directors are independent.

7.10.3 Disclosure Relating to Directors’ Independence. Three Independent Non-Executive Directors have submitted a declaration confirming their independence.

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Rule No. Corporate Governance Rule Details of Compliance


7.10.4 (a) Number of Independent Non-Executive Directors in the Committee to be:

a minimum of two (where a company has only two Directors on the Board), or

in all other instances majority of whom to be independent.

The Committee comprises four Non-Executive Directors, three of whom are Independent Non-Executive Directors.

Separate Committee to be formed for the Company or the Listed Parent’s Remuneration Committee to be used.

A separate Remuneration Committee was formed for the Company.

Chairman of the Committee to be a Non-Executive Director.

The Board of Directors has appointed a Non-Executive Independent Director as the Chairman of the Committee.

(b) Function of the Committee. The Remuneration Committee Report sets out the functions of the Committee.

Audit Committee

7.10.5 (a) Number of Independent Non-Executive Directors in the Committee to be:

The Committee comprises of three Directors who are Independent Non-Executive Directors.

a minimum of two (where a company has only two Directors on the Board), or

in all other instances majority of whom to be independent.

Separate Committee to be formed for the Company or the Listed Parent’s Committee to be used.

A separate Audit Committee was formed for the Company.

Chairman of the Committee to be a Non-Executive Director.

The Board of Directors has appointed a Non-Executive Director as the Chairman of the Committee.

Chairman or one member of the Committee to be a member of a recognised professional accounting body.

The Chairman of the Committee is a member of a recognised professional accounting body.

CEO and CFO to attend committee meetings, unless otherwise determined by the Audit Committee.

Group CEO attends by invitation.CFO attends by invitation.

(b) Function of the Committee. The Audit Committee Report sets out the functions of the Committee.

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Board, Audit Committee and Remuneration Committee AttendanceThe number of meetings of the Board, Audit Committee and Remuneration Committee and individual attendance by members are as follows:

Number of Meetings, Circular Resolutions and Dates

Board Meetings 04

Audit Committee Meetings 07

Remuneration Committee Meetings 02

Circular Resolutions Passed 32

Board Meetings Audit Committee Meetings Remuneration Committee Meetings

28th February 2012 24th February 2012 28th February 2012

2nd May 2012 2nd April 2012 9th July 2012

7th August 2012 27th April 2012

31st October 2012 4th July 2012

26th July 2012

1st October 2012

25th October 2012

Individual Attendance

Name Directorship Status Board Audit Committee Remuneration Committee

Mr. H.D.S. Amarasuriya - Chairman Non-Executive 4/4 – 2/2

Dr. G.C.B. Wijeyesinghe Independent Non-Executive

4/4 7/7 2/2

Dr. S. Kelegama Independent Non-Executive

3/4 7/7 2/2

Deshabandu A.M. de S. Jayaratne (Alternate Director Mr. A.N. Majeed)

Independent Non-Executive

3/4 6/7 2/2

Mr. H.A. Pieris - Group CEO (Alternate Director Mr. L.N.S.K. Samarasinghe)

Executive 4/4 – –

Mr. G.J. Walker (Alternate Director Mr. M.H. Wijewardene)* Non-Executive 4/4 – –

Mr. P.J. O’Donnell (Alternate Director Mr. M.P.A. Salgado)** Non-Executive 4/4 – –

Mr. J.J. Hyun (Alternate Director Mr. V.G.K. Vidyaratne)*** Non-Executive 4/4 – –

* Alternate Director Mr. M.H. Wijewardene attended three meetings.** Alternate Director Mr. M.P.A. Salgado attended two meetings.*** Alternate Director Mr. V.G.K. Vidyaratne attended one meeting.

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in SERving wE aRE STREngThEnEdBeyond the cliché...we exist to serve our customer. Staying in touch; listening; problem solving; being in their ‘line of sight’ always; appreciating their loyalty...and in a myriad other ways, Singer is strengthened immeasurably.


Thulitha Mendis, Shyam Ramanathan, Oscar Amarathunga, Ananda Weerasuriya, Nandana Wijesundera

(Left - Right)


Protecting Ourselves

Risk is an integral part of any business. It is a matter of identifying the sources of risk, their likelihood of occurrence and impact, and then developing a comprehensive framework to address them. Such a systematic approach also raises a few questions, like determining one’s appetite for risk and establishing thresholds, bearing in mind that risk and return go hand in hand. So it’s a question of striking a balance and managing risk.

Over the years Singer has developed a set of clear risk management objectives and a well-established strategy to deliver them, through core risk management processes.

At a strategic level, our risk management objectives are:

To identify the Company’s significant risks.

To formulate the Company’s Risk Appetite and ensure that business profile and the plans are consistent with it.

To optimise risk/return decisions by taking them as closely as possible to the business, while establishing strong and independent review and challenge structures.

To ensure that business growth plans are properly supported by effective risk infrastructure.

To manage risk profile to ensure that specific financial deliverables remain possible under a range of adverse business conditions.

To help executives improve the control and co-ordination of risk taking across the business.

The Company’s approach is to provide direction on: understanding the principal risks to achieving Company strategy; establishing Risk Appetite; and establishing and communicating the risk management framework. The process is then broken down into five steps: identify, assess, control, report, and manage/challenge.

The Company’s risk management strategy is broadly unchanged from 2011.

The Risk Management ProcessDuring the year under review, the Company continued to review and improve its risk management function in line with its Risk Management Objectives.

Steps Activities

Data Collection and Analysis

- The management information system (MIS) to pick up relevant business-critical information.

- review and validation before it is submitted to senior management.

Assess - Agree and implement measurement and reporting standards and methodologies.

Control - Establish key control processes and practices, including limit structures, impairment allowance criteria and reporting requirements.

- Monitor the operation of the controls and adherence to risk direction and limits.

- Provide early warning of control or appetite breaches.

- Ensure that risk management practices and conditions are appropriate for the business environment.

Report - Interpret and report on risk exposures, concentrations and risk-taking outcomes.

- Interpret and report on sensitivities and Key Risk Indicators.

- Communicate with relevant parties.

Manage - Review aspects of the Company’s risk profile.

- Assess new risk-return opportunities.

- Advise on optimising the Company’s risk profile.

- Review and challenge risk management practices.

Internal, External and Corporate Audit Internal, external and corporate audits are crucial in the risk management process. Reports on the Group’s operational and financial systems by these audits are reviewed and action taken to manage any risks that have been identified. Significant audit findings by the Auditors are immediately reviewed by the Board-appointed Audit Committee.

The Group’s system of internal controls covers all policies and procedures, enabling significant strategic and operational risks to be managed.

The internal audit team meets with the Finance Department every month to share information and exchange perspectives. Issues identified at these discussions as being a potential risk are immediately subjected to a fuller investigation.



Risk Mitigation Activities

1. Macroeconomic Factors

Economic Environment

The Group’s business operations are sensitive to economic conditions and in particular to levels of consumer spending. Any delay in economic recovery could affect consumer expenditure and therefore our revenue. There is an on going risk to our business of increases in the cost of key products.

A diversified products and brands with a wide range of offers targeted at different consumer groups.

A Broad’s geographic spread.

The Board and the Senior Management team regularly review the impact of the economic conditions on the Group’s budget and strategic plans.

Emphasise excellent quality, service, value for money and up-to-date product offers, we aim to broaden our appeal to customers.

Renewal and transformation plan to improve our business performance irrespective of macroeconomic factors strategy and business planning which takes into account varying economic scenarios.

Market Specific Characteristics

Seasonality - A substantial proportion of revenue and operating profit is generated during the fourth financial quarter, which includes the Christmas and New Year season. Adverse trading in this relatively short period is likely to impact significantly the full year’s results.

Financial planning takes into account expected peaks and troughs during the year and the business is run accordingly.

Increasing the proportion of internal promotion and various offers, which gives a regular stream of income over the course of the year.

Price Deflation - Price deflation has been a common feature across most electrical goods categories for a number of years, primarily driven by technological advances and improved production efficiencies.

Effective launches of new technology as it becomes available to the market.

Growth of services related business to increase the number and value of non-product sales.

Improve gross profit in renovated showrooms.

Control of stock and strong management over clearance and exit routes.

2. Competitor and Marketplace Risk

Competition

Competitors reduce the Group’s market share and/or drive down margins in specific markets.

Renovation and transformation plan is improving our showrooms, cost structure and service across all channels.

Continuing development of strong international brands.

Ensuring our prices offer good value, including a customer price index.

Building ever stronger relationships with suppliers.

Expand and improve after-sales service network.

Changing Technology/Consumer Preferences

Risk that we fail to capitalise on new technology or emerging trends to maximise revenues and fail to meet the expectations of customers.

Strong supplier relationships.

Delivery of Customer Plan to respond to identified changes in technology.

Showrooms renovation to take into account emerging trends in showroom layouts.

Exciting product launches to make our showrooms the destination for the latest technology.

Continued focus on ensuring we have an excellent range across all price points.

Customer service training for all sales staff and product workshops to improve product knowledge.

A loyalty programme encourages customers to stay with the Singer brand and its products.




Product Risk

Products could turn out to be defective or inappropriate for the market in terms of price, functionality or perceived value. They are also liable to be rendered obsolete. In such instances, the Company is exposed to market risks arising from consumer dissatisfaction and consequent rejection of its products.

The Company’s plant and machinery are rigorously maintained and upgraded whenever necessary.

Established quality control measures as well as product testing through sampling are performed on all product lines.

The in-house Quality Surveillance Unit tests samples of new products or components from external suppliers before order placement.

3. Operational Risk

People

A failure to attract, retain, develop and motivate the best employees across all our showrooms and head office may impact our ability to deliver our operational and strategic objectives. Labour issues can affect product quality, output, market share as well as the Company goodwill and reputation.

Recruit the best people with the right skills.

Offer training and development programmes to ensure that we retain them.

Remuneration packages are benchmarked to ensure that they remain competitive, including incentive arrangements where appropriate.

Collective agreements with the labour unions to maintain an equitable balance between the interests of employer and employee and provide a basis for negotiations when issues arise.

Procedures have also been laid down in responding to grievances and staff complaints.

Fraud, Compliance and Internal Controls

As the business grows in size and geographical scope, the potential for fraud and dishonest activity by our suppliers, customers and employees increase.

Clear behavioural guidance given to employees through operational manuals.

Appropriate procedures and controls set out and audited across the business to reduce fraud risks; Internal Audit and Corporate Audit undertake detailed investigations into all business areas and report their findings to the Audit Committee.

Regular update and new introduction of relevant policies and procedures.

Whistle-blower policy.

Periodical review of the internal controls by outsourced consultants.

IT Systems and Infrastructure

Any significant failure in the IT processes of our retail operations would impact our ability to trade.

The Company has installed comprehensive network security.

Regular backups of all databases and mission-critical information.

Off-site disaster-recovery system.

Regular follow-up review on recommendation given by external IT risk assessment team.

Investment in IT system improvements and innovating to improve business efficiency.

Extensive controls and reviews to maintain integrity and efficiency of IT infrastructure and data.

Supply Chain

Timely distribution of products to our retail outlets is crucial. We work with a number of key overseas and local suppliers our business, could be at risk of both interruption of supply and of failure of such key suppliers and service providers.

Regular review of distribution plan.

Monthly operational meeting to review the forecast, level of inventory, and procurement requirement etc.

Long-standing relationships with many suppliers help to minimise risks in this area.

Reduce dependability on a single service provider.




Asset Risk

Risks associated with the physical assets of the Company include the destruction, loss or theft as well as technical and other defects.

Every such asset is insured against all identifiable risks.

The relevant insurance policies are subject to a comprehensive annual review, with modifications made as deemed necessary.

Procedures in place to control technical and other defects include purchasing from reputable suppliers who comply with acceptable standards on product and service quality; active, standards-based (ISO 9001) quality assurance at all manufacturing facilities, distribution centres and service centres; and the maintenance of adequate spare parts.

Provisioning is also made against obsolete inventory, warranty claims and doubtful debtors. Warranty costs are shared with the Company’s partners. The extended warranty cost is comprehensively covered by a well-reputed insurance company.

4. Financial Risk

Liquidity Risk

Inadequate liquidity can have an adverse impact on on going operations, marketing and investment in new products and brands.

The liquidity position of the Company is regularly reviewed and reported to the Board.

Projected net borrowings are covered by committed facilities and a healthy industry-related gearing ratio is maintained.

The Company’s good relationships and facilities with many banks and other sources of finance ensure reliable access to funds.

Interest-Rate Risk

Increase in interest rates will have an adverse impact to the profitability.

Fluctuating interest rates are minimised by striking a balance between short- and long-term borrowings.

Floating-rate debentures are sometimes issued to capitalise on existing interest rates.

The Company’s strong brand strength and financial dependability help ensure ready access to funds at attractive rates.

Credit Risk

The Company is exposed to credit risk in the form of financial loss when a customer reneges on a hire-purchase agreement. Such exposure cannot be avoided entirely since consumer credit is an integral part of the Company’s retail operations, and is used to encourage and enable consumers to purchase.

Branch managers act as del credere agents.

Undertaking a thorough appraisal of the client before credit is extended.

Credit appraisals of dealers are undertaken to ascertain whether they have the capacity to pay for goods ordered; in doubtful cases, a bank guarantee or security deposit is requested.

Details of customers and dealers who have defaulted on payments are recorded in a database, accessible to those staff whose duty is to undertake credit evaluations of customers and dealers.

Risk-adjusted pricing.

A fully equipped and trained Credit Supervision team is available.

Investment Risk

While investment in new products and geographical expansion is vital for the Company to remain competitive, it raises fresh risks.

Appraisal before an investment is made.

A due diligence study ensures that projected budgets and forecasts can be met and examines the impact of technological and other factors on the investment decision.

Post-investment analysis and performance tracking is in place including financial and customer measures through balance score card.




5. Other Risk

Governance Risk

These are risks to the Company arising from non-compliance with relevant health, safety and environmental statutes and leading to loss of reputation and goodwill, possible litigation and financial loss.

Preventive action has been designed by the Company’s Legal Department.

Frequent internal, external and corporate audits-monitor compliance.

The Company’s management culture stresses ethical performance in this area. International best practices are followed wherever possible.

Quality surveillance helps protect the Company against litigation and warranty claims. Provisioning ensures that such claims do not have an adverse impact on operational and other aspects of the Company.

Detailed, established procedures to ensure product integrity.

Group Compliance Officer reviews report to the Audit Committee compliance with laws and policies.

Socioeconomic Risks

Sri Lanka’s socioeconomic and political environment has an impact on the consumer durables business as well as the investment climate.

Reviewing prices in light of inflation and by negotiating with suppliers for lower input prices and credit terms.

Environment and Climate Change

Aside from the general risks to humankind posed by climate change, a specific business risk to which the Company is exposed concerns possible shortages of essential raw materials, such as wood for the manufacture of furniture and risks of environment pollution due to waste material.

The use of alternative materials mitigates this risk while simultaneously opening up new marketing opportunities.

Collaborate with Central Environment Authority to assist in E-waste project.

All factories, warehouse and service centres complied with the requirement of environment regulations.

Introduction of energy saving appliances.

Caveat

Although the key sources of risk and their mitigation have been discussed in this document, no assurance can be given that the Company is fully protected against all possible risks. As noted in the opening paragraph, the best that can be achieved is reasonable management of risks through a sound operational framework that identifies, evaluates and mitigates the negative impacts in a timely manner at multiple levels.

The Company is confident that all material risk factors have been adequately assessed and managed to ensure the uninterrupted and profitable continuance of the business.



Audit Committee Report

Preamble The Committee is empowered to review and monitor the financial reporting process of Singer Group so as to provide additional assurance on the reliability of the Financial Statements through a process of independent and objective review. As such, the Audit Committee acts as an effective forum in assisting the Board of Directors in discharging their responsibilities on ensuring the quality of financial reporting and related communication to the Shareholders and the Public.

Composition of the Committee As at year-end, the Audit Committee comprised three Non-Executive Directors of the Board namely Dr. G.C.B. Wijeyesinghe, Deshabandu Ajit Jayaratne and Dr. Saman Kelegama. The Head of Risk Management functions as the Secretary to the Committee. The Finance Director/Compliance Officer, Audit Staff, Representatives of External Auditors and when necessary, the Chairman/the Group Chief Executive Officer and relevant operation Directors and Managers attend the meetings by invitation.

Responsibilities and Duties of the Committee The Audit Committee’s authority, responsibilities and specific duties have been formalised through an Audit Committee Charter. By this, the Audit Committee is empowered among other things, to examine any matters relating to the financial affairs of the Singer Group and to review the adequacy of the internal control procedures, coverage of internal and external audit programmes, disclosure of Accounting Policies and Compliance with Statutory and Corporate Governance requirements.

The Committee also provides a forum for the impartial review of the reports of internal and external audits and to take into consideration findings and recommendations stated therein related to significant business risks and control issues.

The Audit Committee reviews significant business risks and internal control issues and suggests where necessary appropriate remedial measures.

The Committee along with the Board, Internal Audit and External Audit review the Quarterly Financial Results to ensure compliance with mandatory, statutory and other regulatory requirements laid down by the authorities.

The Audit Committee also reviews the Corporate Audit Report of the Corporate Internal Auditors of Singer Asia Ltd. Corporate Auditors carry-out an audit at least once a year.

The Compliance Officer monitors the Singer Group’s compliance with the applicable laws and regulations, including any internal policy codes of conduct of its employees.

Meetings of Committee During the year, seven Audit Committee meetings were held to discuss the reports of the Internal and External Auditors and quarterly accounts. The final accounts were also discussed at the meeting held on 22nd February 2013. The minutes of the meetings were tabled at the meeting of the Board of Directors for information and necessary action.

External Auditors The Audit Committee recommended to the Board of Directors that Messrs. KPMG, Chartered Accountants be reappointed as the External Auditors for the year ending 31st December 2013, subject to the approval of the shareholders at the Annual General Meeting.

Dr. Gamini C.B. WijeyesingheChairman - Audit Committee



Remuneration Committee Report

The Remuneration Committee consists of the 3 Non-Executive Directors and the non- executive Chairman of the Singer Group. The Finance Director acts as the Secretary to the Committee. The Committee is chaired by a Non-Executive Director. The Group Chief Executive Officer and the Finance Director assist the committee by providing the relevant information and participating in its analysis and deliberations.

The scope of the committee is to “look into fees, remuneration and perquisites of Chairman, Group Chief Executive Officer, Independent Directors and the executive Directors of the Board of the Company including alternate Directors and approve recommendations made by the Group Chief Executive Officer and the Corporate Office of Singer Asia Limited. Singer Asia Ltd., is the Intermediate Parent of the Company.

The Committee also reviews the policies pertaining to the remuneration and perquisites of the Executives of the Company.

A primary objective of compensation packages is to attract and retain a highly qualified and experienced Work force and reward performances. These compensation packages should provide compensation appropriate for each business within the Group and commensurate with each employee’s level of experience and contribution, bearing in mind the business performance and long-term shareholder returns.

The Committee meets from time to time and reviews the Group’s remuneration and fee structures to assure alignment with strategic priorities and with compensation offered by comparative companies.

The committee met twice during the period.

I wish to thank the other members of the Committee, the Non-Executive Chairman, Mr. Hemaka Amarasuriya, Deshabandu Ajit Jayaratne and Dr. Saman Kelegama for their valuable contributions to the deliberations of the committee.

I also wish to thank Mr. Asoka Pieris and Mr. Priyath Salgado for helping the committee in its deliberations by providing the necessary information.

Dr. Gamini C.B. WijeyesingheChairman - Remuneration Committee


FINANCIAL REPORTS Financial Calendar - 2012Annual Report 2011 28th February 2012

Thirty-Seventh Annual General Meeting 29th March 2012

Interim Financial Statements in terms of Rule 8.3 of the Colombo Stock ExchangeFor the three months ended 31st March 2012 (unaudited) 2nd May 2012

For the six months ended 30th June 2012 (unaudited) 07th August 2012

For the nine months ended 30th September 2012 (unaudited) 31st October 2012

For the twelve months ended 31st December 2012 (unaudited) 28th February 2013

Annual Report & Annual General MeetingAnnual Report 2012 Approved 28th February 2013

Thirty-Eighth Annual General Meeting 27th March 2013

141Annual Report of the Board of Directors on the Affairs of the Company

146Statement of Directors’ Responsibility

147Independent Auditors’ Report

148Statement of Comprehensive Income

149Statement of Financial Position

150Statement of Changes in Equity

152Statement of Cash Flows

153Notes to the Financial Statements

Final Dividend Payable20th March 2013

Proposed Financial Calendar - 2013/14For the three months ending 31st March 2013 (unaudited) May 2013

For the six months ending 30th June 2013 (unaudited) August 2013

For the nine months ending 30th September 2013 (unaudited) November 2013

For the twelve months ending 31st December 2013 (unaudited)February 2014

Annual Report and Accounts for 2013 (audited) March 2014

Thirty-Ninth Annual General Meeting March 2014

The Board of Directors of Singer (Sri Lanka) PLC have pleasure in

presenting their report on the affairs of the Company together with

the Audited Financial Statements of Singer (Sri Lanka) PLC, and the

Audited Consolidated Financial Statements of the Group for the year

ended 31st December 2012.

Review of the YearThe Chairman’s Letter (pages 6 to 7), the Group Chief Executive

Officer’s Review (pages 8 to 11) and Review of Operations

(pages 24 to 41), describe the Company’s affairs and the Group’s

business and mention important events that occurred during the

year, and up to the date of this Report. Results in Perspective on

pages 44 to 51 elaborates the financial results of the Company/

Group. These reports together with the Audited Financial Statements

reflect the state of the affairs of the Company/Group.

Principal ActivitiesThe Company is engaged in Retail and Wholesale Marketing,

Financing, Assembling and Manufacturing and in Financial Services.

The Company markets Domestic and Industrial Sewing Machines,

Consumer Electronics, Household Appliances, Air conditioners,

Furniture, Agricultural Implements, Motor Cycles, Telephones,

Mobile Phones, Personal Computers, Laptops, Cameras and provides

Financing through Hire Purchase and Loans. In addition, the

Company manufactures Furniture, Water Pumps, Paddy Threshers

and assembles Motor Cycles and Two Wheel Tractors. The Company

also acts as Bill Collection Agent for HSBC Credit Card, Amex Credit

Card, Singer Finance, Mobitel, Etisalat, Airtel, Lankabell, Sri Lanka

Telecom, Dialog, Dialog Television, Dialog Ez Cash, National Water

Supply & Drainage Board, Ceylon Electricity Board and is also a sub-

agent for Western Union Money Transfer.

The Company has one subsidiary and one associate company and

their activities are given on page 208 of this Annual Report.

Independent Auditors’ ReportThe Independent Auditors’ Report on the Financial Statements is

given on page 147 in this Annual Report.

Financial StatementsThe Financial Statements for the year ended 31st December 2012

are the first, the Company has prepared in accordance with SLFRS/

LKASs, the accounting Standards issued by The Institute of Chartered

Accountants of Sri Lanka to converge with International Financial

Reporting Standards (IFRS) and International Accounting Standards

(IAS). The Financial Statements duly signed by the Directors are

provided on pages 148 to 203.

Accounting PoliciesThe accounting policies resulting from convergence to Accounting

Standards issued by The Institute of Chartered Accountants of

Sri Lanka (SLFRS/LKAS) are provided in details in the Notes to the

Financial Statements on pages 153 to 163.

Property, Plant & EquipmentDuring the year under review, the Company invested a sum of

Rs. 557,213,082/- (2011 - Rs. 333,346,288/-) in Property, Plant

& Equipment. Rs. 128.3 million was spent on renovating and

upgrading leasehold premises out of which Rs. 125 million related

to retail shops and Rs. 3.3 million related to the office premises at

Nawam Mawatha. A further Rs. 168.3 million was invested in shop

furniture and Rs. 135.7 million was invested in shop equipment.

Piliyandala factory upgraded their plant and machinery at a cost of

Rs. 22.1 million which includes a new Wide Belt Sander Machine

costing Rs. 8.2 million, a new Clamping Machine costing

Rs. 2.8 million, upgrading the Spray Paint Booth costing

Rs. 1.1 million and extensions to the Fire Hydrant System costing

Rs. 1.3 million. Motor vehicles purchased during the year amounted

to Rs. 37 million being replacement of the Company vehicle fleet.

Rs. 17.9 million was spent on furniture and equipment. Cost of

information and communication technology equipment purchased

during the year was Rs. 46.4 million out of which Rs. 30 million was

spent on software. In addition to the above, the subsidiary, Singer

Finance (Lanka) PLC invested a sum of Rs. 38 million in Property,

Plant & Equipment including Rs. 10.8 million spent on establishment

of new branches, Rs. 6.2 million on replacement of motor vehicles

and Rs. 11.9 million was spent on user licence and software licences

and balance Rs. 9.1 million was spent on furniture, equipment and

cost of information and technology equipment for head office.

Details of Property, Plant & Equipment and Intangible Assets and

their movements are given in Notes 12 and 13 to the Financial

Statements respectively.

Market Value of PropertiesThe freehold property of the Company is revalued by an Independent

Qualified Valuer where there is a substantial difference between the

fair value and the carrying amount of the freehold property.

The most recent valuation was carried out as at 31st December

2012. The details of the valuation are given in Note 12 to the

Financial Statements on pages 168 to 172 in this Annual Report.

Investments The Company increased its shareholding in Singer Finance (Lanka)

PLC by 5.4% to 80.4% subsequent to subscribing to the additional

shares from the Rights Issue by Singer Finance ( Lanka) PLC.

Movement in investments during the year is disclosed under Notes

14, 15 and 16 to the Financial Statements.

Directors’ ResponsibilitiesThe Statement of the Directors’ Responsibility is given on page 146.

Corporate GovernanceThe Company has complied with Corporate Governance rules laid

down under the Listing Rules of Colombo Stock Exchange. The

Corporate Governance Section on pages 98 to 129 describes the

good Corporate Governance Principles adopted by the Company.

Annual Report of the Board of Directors on the Affairs of the Company


Profit and Appropriations

2012 2011Rs. Rs.

Group profit before tax for the year ended 31st December after deducting all expenses, known liabilities and depreciation amounts to 1,746,225,331 1,990,012,085

From this has to be deducted the income tax expense (552,788,721) (681,180,633)

Non-controlling interest (55,696,216) (42,487,648)

Making a profit for the year of 1,137,740,394 1,266,343,804

To this has to be added a balance brought forward from the previous year 470,480,860 364,246,417

Interim Dividend - Year 2012 - Rs. Nil per share (Year 2011 - Rs. 1.50 per share) – (187,814,415)

And adjustment due to realisation on revaluation surplus 12,622,416 12,622,419

Acquisition of Non Controlling interest without change in control (8,069,354) –

Leaving a total available for appropriation of 1,612,774,316 1,455,398,225

The following appropriations have been approved:

Transfer to General Reserve (300,000,000) (200,000,000)

Transfer to Investment Fund (22,739,295) (28,057,705)

Transfer to Reserve Fund (11,278,000) (5,602,000)

Final dividend approved: Gross Rs. 6.00 per share (2011 - Rs. 6.00 per share) (751,257,660) (751,257,660)

Making a total appropriation of (1,085,274,955) (984,917,365)

Leaving a balance on Group basis to be carried forward of 527,499,361 470,480,860

The balance to be carried forward on Company only basis (excluding Group) will be 118,321,337 148,018,856

Dividends In terms of Article 7 of the Articles of Association of the Company,

a final dividend of Rs. 6.00 per share has been approved by the

Directors for the financial year ended 31st December 2012, for

payment on 20th March 2013. The Board has reasonable grounds

for believing that the Company would satisfy the Solvency Test

immediately after the distribution is made and accordingly the Board

of Directors has signed the Certificate of Solvency in accordance with

Section 57 of the Companies Act No. 07 of 2007.

The Board of Directors will obtain a Certificate of Solvency from the

Auditors prior to the date of despatch of the dividend payment.

Reserves (Excluding Non-Controlling Interest)Group Reserves and Retained Equity as at 31st December 2012

amounted to Rs. 4,630.5 million vs Rs. 4,121.6 million as at

31st December 2011. The breakup and movement are shown in the

Statement of Changes in Equity in the Financial Statements.

Stated CapitalAs per the terms of the Companies Act No. 07 of 2007, the

Stated Capital of the Company was Rs. 626,048,050/- as at

31st December 2012 and was unchanged during the year. Details are

given in Note 23 to the Financial Statements on page 179.

Events after the Reporting PeriodNo circumstances have arisen since the reporting date, which would

require adjustment or disclosure except for the following event:

(a) The Board of Directors has approved the final dividend

of Rs. 6.00 per ordinary share for the year ended

31st December 2012, for payment on 20th March 2013.

Statutory PaymentsThe declaration relating to statutory payments is made in the

Statement of Directors’ Responsibility on page 146.

Directors’ Interests and Interest Register Details of transactions with Director-related entities are disclosed in

Notes 39 and 40 to the Financial Statements on pages 195 to 198

and have been declared at the Board Meeting, pursuant to Section

192 (2) of the Companies Act No. 07 of 2007.

Interest in Shares Share transaction by the Directors, in terms of Section 200 of the

Companies Act in respect of the Group Companies are as follows:

Singer (Sri Lanka) PLC

Name of Director Nature of Share Dealings

V.G.K. Vidyaratne Purchased 2,595 shares on 13th May 2012

at Rs. 85/- per share

A.N. Majeed Purchased 2,000 shares on 10th May 2012


L.N.S.K. Samarasinghe Purchased 400 shares on 9th May 2012 at

Rs. 90/10 per share

Purchased 600 shares on 10th May 2012 at

Rs. 90/10 per share

M.P.A. Salgado Purchased 4,000 shares on 15th May 2012


Singer (Sri Lanka) PLC Annual Report 2012142 Annual Report of the Board of Directors on the Affairs of the Company


Name of Director Nature of Share Dealings

H.A. Pieris Purchased 10,000 shares on 15th March 2012 at Rs. 18/- per share

Purchased 51,000 shares on 6th August 2012 at Rs. 11/- per share

Sold 10,000 shares on 24th August 2012 at Rs. 14/- per share

Sold 10,000 shares on 13th September 2012 at Rs. 15/- per share

H.D.S. Amarasuriya Purchased 10,000 shares on 25th September 2012 at Rs.16/20 per share

M.P.A. Salgado Purchased 10,000 shares on 22nd March 2012 at Rs. 17/- per share

Purchased 10,000 shares on 30th March 2012 at Rs. 17/- per share

Purchased 800 shares on 15th May 2012 at Rs. 13/50 per share

Purchased 4,000 shares on 23rd May 2012 at Rs. 13/50 per share

Purchased 43,640 shares on 6th August 2012 at Rs. 11/- per share

Board CommitteesAudit Committee

Following are the names of the Directors comprising the Audit

Committee of the Board:

Dr. G.C.B. Wijeyesinghe - Chairman

Deshabandu A.M. de S. Jayaratne

Dr. S. Kelegama

Mr. M.M.C. Priyanjith - Secretary

The Report of the Audit Committee on page 137 sets out the manner

of compliance by the Company in accordance with the requirements

of the Rule 7.10 of the Listing Rules of the Colombo Stock Exchange

on Corporate Governance.


During the year Remuneration Committee was reconstituted to

comply with the Corporate Governance Rule of Colombo Stock

Exchange. Following are the names of the Directors comprising the

Remuneration Committee of the Board:

Dr. G.C.B. Wijeyesinghe - Chairman

Deshabandu A.M. de S. Jayaratne

Dr. S. Kelegama

Mr. H.D.S. Amarasuriya

Mr. M.P.A. Salgado - Secretary

The Report of the Remuneration Committee on page 138 contains a

statement of the remuneration policy. The details of the aggregate

remuneration paid to the Executive and Non-Executive Directors

during the financial year are given in Note 40 to the Financial

Statements on page 198.

Directors’ Indemnity and InsuranceThe Directors and Officers of the Company and Subsidiary are

covered in respect of Directors’ and Officers’ liability by the Insurance

Policy obtained by the Ultimate Parent Company, as per the

provisions in Article 44.

Share Information and Substantial ShareholdingsThe distribution of shareholding, public holding percentage, market

value of shares, twenty largest shareholders and record of scrip issues

are given on pages 205 and 207.

Earnings per share, dividends per share, dividend pay out and net

assets value per share are given in the Financial Highlights on page 5

of the Annual Report.

Directorate and ShareholdingThe names of the Directors of the Company as at 31st December 2012 and their brief profiles are shown on pages 12 and 17 and the inner back cover.

The Board has received notice from Dr. G.C.B. Wijeyesinghe that he has attained the age of 79 years on 19th February 2013. The Board has requested Dr. G.C.B. Wijeyesinghe to continue to serve as a Director of the Company, and Dr. G.C.B. Wijeyesinghe has consented to remain on the Board subject to the due compliance of the provisions of the Companies Act No. 07 of 2007 and has offered himself for reappointment to the Board.

The Directors recommended the resolution declaring that the age limit stipulated in Section 210 of the Companies Act No. 07 of 2007 shall not apply to Dr. G.C.B. Wijeyesinghe, notwithstanding him having attained the age of 79 years and that his re-appointment for a further period of one year is approved and to re-elect him in terms of Section 211 of the Companies Act No. 07 of 2007.

The Board has received notice from Deshabandu A.M. de S. Jayaratne that he has attained the age of 72 years on 30th April 2012. The Board has requested Deshabandu A.M. de S. Jayaratne to continue to serve as a Director of the Company, and Deshabandu A.M. De. S. Jayaratne consented to remain on the Board subject to the due compliance of the provisions of the Companies Act No. 07 of 2007 and has offered himself for reappointment to the Board.

The Directors recommended the resolution declaring that the age limit stipulated in Section 210 of the Companies Act No. 07 of 2007 shall not apply to Deshabandu A.M. de. S. Jayaratne who has attained the retirement age stipulated in Section 210 of the said Act and who has attained the age of 72 years and that his reappointment for a further period of one year is approved and to re-elect him in terms of Section 211 of the said Act No. 07 of 2007.

In terms of Article 24 (4) of the Articles of Association of the Company Mr. G. J. Walker retires by rotation and being eligible, is recommended for re-election.

In terms of Article 24 (4) of the Articles of Association of the Company Mr. P. J. O’Donnell retires by rotation and being eligible, is recommended for re-election

Annual Report 2012 Singer (Sri Lanka) PLC 143Annual Report of the Board of Directors on the Affairs of the Company

Shareholdings of Directors and Chief Executive Officer at the beginning of the year and as at the end of the year are as follows:

Shareholding01.01.2012

No. of Shares

Shareholding31.12.2012

No. of Shares

Debentures held01.01.2012

No. of Debentures

Debentures held31.12.2012

No. of Debentures

Shareholding ofSinger Finance

(Lanka) PLC01.01.2012

No. of Shares

Shareholding ofSinger Finance

(Lanka) PLC31.12.2012

No. of Shares

Mr. H.D.S. Amarasuriya 89,482 89,482 – – 6 10,006

Mr. H.A. Pieris 2,000 2,000 – – 10,002 51,002

Dr. G.C.B. Wijeyesinghe – – – – – –

Dr. S. Kelegama – – – – – –

Deshabandu A.M. de S. Jayaratne – – – – – –

Mr. P.J. O’Donnell – – – – – –

Mr. J.J.Hyun – – – – – –

Mr. G.J. Walker – – – – – –

Mr. V.G.K. Vidyaratne 21,236 23,831 – – – –

Mr. M.H. Wijewardene – – – – – –

Mr. M.P.A. Salgado – 4,000 – – 2 68,442

Mr. L.N.S.K. Samarasinghe 3,124 4,124 – – – –

Mr. A.N. Majeed 3,000 5,000 – – – –

The names of Directors holding office at the end of the financial year in respect of subsidiary and Associate Company is given on page 208.

Independence of Directors In accordance with Rule 7.10.2 (b) of Colombo Stock Exchange,

(CSE) Listing Rules, Dr. G.C.B. Wijeyesinghe, Deshabandu A.M. de

S. Jayaratne and Dr. S. Kelegama who are Non-Executive Directors

of the Company, have submitted a signed and dated declaration

as per the specimen given in Appendix 7A of continuing listing

requirements of CSE.

Although, Dr. G.C.B. Wijeyesinghe has not met the criteria

mentioned in items (e) and (g) of Rule 7.10.4 of the CSE Listing

Rules, the Board of Directors of the Company is of the opinion that -

(i) Dr. G.C.B. Wijeyesinghe is nevertheless independent on the

following basis:

(a) His high standing in the society and business sector.

(b) His experience and knowledge particularly in the Accounting

Field will continue to be an asset to the Company.

(c) His stature in the academic field of management, being a

member of the Board of Study of the Postgraduate Institute

of Management for several years. He has been conferred a

doctorate by the University of Sri Jayawardenapura.

(d) His continued valuable services to the Company in various

ways and in particular as the Chairman of the Audit Committee

and Remuneration Committee of the Company.

(e) He does not participate in executive decision-making.

Although, Deshabandu A.M. de S. Jayaratne has not met the criteria

mentioned in item (g) of Rule 7.10.4 of the CSE Listing Rules, the

Board of Directors of the Company is of the opinion that -

(ii) Deshabandu A.M. de S. Jayaratne is nevertheless independent on

the following basis:


(b) His experience and knowledge particularly in the Accounting

Field will continue to be an asset to the Company.

(c) He does not participate in executive decision-making.

Although, Dr. S. Kelegama has not met the criteria mentioned in item

(g) of Rule 7.10.4 of the CSE Rules, the Board of Directors of the

Company is of the opinion that -

(iii) Dr. S. Kelegama is nevertheless independent on the

following basis:


(b) His experience and knowledge particularly in the field of

Economics will continue to be an asset to the Company.

(c) He does not participate in executive decision-making.

(Dr. G.C.B. Wijeyesinghe, Deshabandu A.M. de. S. Jayaratne and

Dr. S. Kelegama did not participate in these deliberations and

decisions taken pursuant thereto as referred to above to avoid

conflict of interests.)

Singer (Sri Lanka) PLC Annual Report 2012144 Annual Report of the Board of Directors on the Affairs of the Company

EmploymentThe number of persons employed by the Group and the Company as

at 31st December 2012 was 1,475 (2011 - 1,228) and 1,284

(2011 - 1,095), respectively.

Details of human resource initiatives are detailed in the employees’

section of the sustainability report.

Corporate GovernanceDirectors’ Declarations

The Directors declare that having considered all information and

explanations made available to them that -

(a) the Company complied with all applicable laws and regulations

in conducting its business,

(b) the Directors have declared all material interests in contracts

involving the Company and refrained from voting on matters in

which they were materially interested,

(c) the Company has made all endeavour to ensure the equitable

treatment of shareholders,

(d) the business is a going concern with supporting assumptions or

qualifications as necessary, and

(e) have conducted a review of internal controls covering financial,

operational and compliance controls and risk management and

have obtained a reasonable assurance of their effectiveness and

successful adherence herewith.

The Corporate Governance report is given under the governance

section of the Annual Report.

DonationsDuring the year, donations amounting to Rs. 519,000/- (2011 -

Rs. 284,000/-) were made by the Company, of which Rs. 24,000/-

was paid to Government-approved charities. Donations made by the

Group is given in Note 9.

AuditorsThe Financial Statements for the period under review were audited

by Messrs KPMG, Chartered Accountants who offer themselves for

reappointment for the ensuing year. The Directors propose the

reappointment of Messrs KPMG, Chartered Accountants as Auditors

of the Company for the year 2013.

The audit and non-audit fees paid to the Auditors by the Company

and Group is disclosed in Note 9 on page 166 in this Annual Report.

As far as the Directors are aware, the Auditors do not have any

relationship or interest in the Company or its Subsidiary.

The Audit Committee reviews the appointment of the Auditor,

its effectiveness and its relationship with the Company including

the level of audit and non-audit fees paid to the Auditors. Details on

the work of the Audit Committee are set out in the Audit Committee

Report.

Notice of MeetingThe Thirty-Eighth Annual General Meeting will be held at Registered

Office of the Company, No. 80, Nawam Mawatha, Colombo 2, on

Wednesday, 27th March 2013 at 10.00 a.m.

The Notice of the Annual General Meeting of the shareholders is

given in page 212.

For and on behalf of the Board,

H.D.S. Amarasuriya H.A. PierisChairman Director/Group Chief Executive Officer

A.C.M. Irzan FCMA (UK)Company Secretary


Colombo

28th February 2013

Annual Report 2012 Singer (Sri Lanka) PLC 145Annual Report of the Board of Directors on the Affairs of the Company

The Companies Act No. 07 of 2007 requires Directors to ensure

that the Company keeps accounting records, which correctly record

and explain the Company’s transactions and prepare Financial

Statements that give a true and fair view of the Company’s state

of affairs as at the Reporting date and of the profit for the year. It

further requires the Financial Statements of a Group to give a true

and fair view of the state of affairs of the Group and the profit of the

Group for the year.

The Directors are also required to ensure that the Financial

Statements have been prepared and presented in accordance with

the Sri Lanka Accounting Standards SLFRS/LKAS and the Rules of

the Colombo Stock Exchange. They are also responsible for taking

reasonable measures to safeguard the assets of the Company

and in that context to have proper regard to the establishment of

appropriate systems of internal control with a view to the prevention

and detection of fraud and other irregularities.

The Directors are of the view that these Financial Statements

have been prepared in accordance with the Sri Lanka Accounting

Standards SLFRS/LKAS as laid down by The Institute of Chartered

Accountants of Sri Lanka.

The Directors endeavour to ensure that the Company maintains

sufficient records to be able to disclose, with reasonable accuracy,

the financial position of the Company and to be able to ensure

that the Financial Statements of the Company meet with the

requirements of the Companies Act, Sri Lanka Accounting Standards

SLFRS/LKAS and the Rules of the Colombo Stock Exchange.

The Directors have a reasonable expectation, that the Company and

Group have adequate resources to continue in operational existence

for the foreseeable future and therefore have continued to adopt the

going concern basis in preparing the Accounts.

As required by Section 56 (2) of the Companies Act and in terms of

Article 7 (2) of the Articles of Association of the Company, the Board

of Directors has authorised the payment of dividends, being satisfied

based on information available to it that the Company would satisfy

the Solvency Test after such distributions in accordance with Section

57 of the Companies Act No. 07 of 2007. Accordingly, the Board

of Directors has signed the Certificate of Solvency. In respect of the

authorised final dividend, the Company shall forward to CSE, prior

to the date of dispatch of the dividend payment, a Certificate by

the Auditors to the effect that the Company is able to satisfy the

Solvency Test immediately after the distribution.

Messrs KPMG, Chartered Accountants, the Auditors of the Company,

have examined the Financial Statements made available by the Board

of Directors together with all relevant financial records, related data,

minutes of shareholders' and Directors' meetings and express their

opinion in their Report on page 147 of the Annual Report.

Compliance ReportBased on the Report of the Compliance Officer, the Directors confirm

that to the best of their knowledge and belief, all taxes, duties and

levies payable by the Company and its Subsidiary, all contributions,

levies and taxes payable on behalf of and in respect of the employees

of the Company and its Subsidiary and all other known statutory

dues as were due and payable by the Company and its Subsidiary as

at the Reporting date have been paid or were provided.

By Order of the Board,

A.C.M. Irzan, FCMA (UK)Company Secretary


Colombo

28th February 2013

Statement of Directors’ Responsibility


Independent Auditors’ Report

TO THE SHAREHOLDERS OF SINGER (SRI LANKA) PLC

Report on the Financial StatementsWe have audited the accompanying financial statements of Singer

(Sri Lanka) PLC (“the Company”) and the consolidated financial

statements of the Company and its subsidiary (“the Group”), which

comprise the statements of financial position as at December 31,

2012, the statements of comprehensive income, changes in equity

and cash flows for the year then ended, and notes, comprising a

summary of significant accounting policies and other explanatory

information set out on pages 148 to 203 of the annual report.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation

of these financial statements in accordance with Sri Lanka

Accounting Standards. This responsibility includes: designing,

implementing and maintaining internal control relevant to the

preparation and fair presentation of financial statements that are

free from material misstatement, whether due to fraud or error;

selecting and applying appropriate accounting policies; and making

accounting estimates that are reasonable in the circumstances.

Scope of Audit and Basis of Opinion

Our responsibility is to express an opinion on these financial

statements based on our audit. We conducted our audit in

accordance with Sri Lanka Auditing Standards. Those standards

require that we plan and perform the audit to obtain reasonable

assurance whether the financial statements are free from material

misstatement.

An audit includes examining, on a test basis, evidence supporting

the amounts and disclosures in the financial statements. An audit

also includes assessing the accounting policies used and significant

estimates made by management, as well as evaluating the overall

financial statement presentation.

We have obtained all the information and explanations which to the

best of our knowledge and belief were necessary for the purposes of

our audit. We therefore believe that our audit provides a reasonable

basis for our opinion.

Opinion

In our opinion, so far as appears from our examination, the Company

maintained proper accounting records for the year ended December

31, 2012 and the financial statements give a true and fair view of the

financial position of the Company as at December 31, 2012, and of

its financial performance and its cash flow for the year then ended in

accordance with Sri Lanka Accounting Standards.

In our opinion, the consolidated financial statements give a true and

fair view of the financial position of the Company and its subsidiary

dealt with thereby as at December 31, 2012, and of its financial

performance and its cash flows for the year then ended in accordance

with Sri Lanka Accounting Standards.

Report on Other Legal and Regulatory Requirements

These financial statements also comply with the requirements of

Sections 153(2) to 153(7) of the Companies Act No. 07 of 2007.

CHARTERED ACCOUNTANTS

Colombo

28th February 2013


Consolidated Company

Year ended 31st December 2012 2011 2012 2011Note Rs. Rs. Rs. Rs.

Revenue 3 25,372,962,572 22,031,653,142 23,850,203,088 20,944,436,625

Cost of Sales (16,120,453,386) (13,655,527,677) (16,120,453,386) (13,655,527,677)

Direct Interest Cost (547,208,208) (279,647,676) – –

Gross Profit 8,705,300,978 8,096,477,789 7,729,749,702 7,288,908,948

Other Income 5 190,545,225 134,709,962 221,965,014 167,244,869

Selling and Administrative Expenses (5,922,791,294) (5,490,438,962) (5,374,656,412) (5,037,133,708)

Other Expenses 6 (228,346,324) (195,965,537) (215,855,381) (186,559,996)

Finance Cost 7.1 (1,054,025,271) (559,650,375) (1,054,025,271) (559,650,375)

Finance Income 7.2 99,059,887 62,025,484 189,386,968 101,240,616

Net Finance Cost (954,965,384) (497,624,891) (864,638,303) (458,409,759)

Share of Profit/(Loss) of Equity Accounted Investees (Net of Income Tax) 8 5,777,555 (638,975) – –

Value Added Tax on Financial Services (49,295,425) (56,507,301) (29,052,000) (29,000,000)

Profit before Tax 9 1,746,225,331 1,990,012,085 1,467,512,620 1,745,050,354

Income Tax Expense 10 (552,788,721) (681,180,633) (458,574,898) (573,529,077)

Profit for the Year 1,193,436,610 1,308,831,452 1,008,937,722 1,171,521,277

Other Comprehensive Income

Revaluation of Property, Plant & Equipment 148,602,050 – 148,602,050 –

Income Tax on Other Comprehensive Income (21,655,424) – (21,655,424) –

Other Comprehensive Income for the Year, Net of Tax 126,946,626 – 126,946,626 –

Total Comprehensive Income for the Year 1,320,383,236 1,308,831,452 1,135,884,348 1,171,521,277

Profit Attributable to:

Owners of the Company 1,137,740,394 1,266,343,804 1,008,937,722 1,171,521,277

Non-Controlling Interests 55,696,216 42,487,648 – –


Total Comprehensive Income Attributable to:

Owners of the Company 1,264,687,020 1,266,343,804 1,135,884,348 1,171,521,277

Non-Controlling Interests 55,696,216 42,487,648 – –

Total Comprehensive Income for the Year 1,320,383,236 1,308,831,452 1,135,884,348 1,171,521,277

Earnings per Share - Basic - (Rs.) 11.2 9.09 10.11 8.06 9.36

Dividends per Share (Including Proposed Final Dividend) - (Rs.) 33 – – 6.00 7.50

The Notes on pages 153 through 203 form an integral part of these Financial Statements.

Colombo

28th February 2013

Statement of Comprehensive Income



As at 31st December 2012

31st December2011

1st January 2011

31st December2012

31st December2011

1st January201

Note Rs. Rs. Rs. Rs. Rs. Rs.

ASSETSNon-Current AssetsProperty, Plant & Equipment 12 2,151,207,667 1,691,106,605 1,564,239,939 2,106,382,609 1,659,601,041 1,536,053,077

Intangible Assets 13 189,255,900 167,683,369 178,939,703 166,953,577 155,016,387 169,368,778

Investment in Subsidiary 14 – – – 982,241,596 400,000,000 400,000,000

Investments in Equity Accounted Investees 15 52,663,202 46,885,646 23,524,621 48,000,000 48,000,000 24,000,000

Other long-term Investments 16 17,061,300 17,061,300 17,061,300 17,020,000 17,020,000 17,020,000

Trade and Other Receivables 19.1 5,044,790,241 4,218,084,408 2,508,341,116 1,295,482,986 1,222,760,062 1,013,727,151

Deferred Tax Assets 28 150,284,035 143,449,551 110,225,949 146,299,773 125,501,850 114,353,256

7,605,262,345 6,284,270,879 4,402,332,628 4,762,380,541 3,627,899,340 3,274,522,262

Current AssetsInventories 17 4,226,074,244 3,402,916,348 2,115,464,054 4,226,074,244 3,386,044,868 2,115,464,054

Loans due from Related Parties 18 93,634,631 173,634,631 202,217,767 1,492,053,836 539,505,864 611,410,191

Trade and Other Receivables 19.2 8,355,653,594 6,894,196,335 5,462,044,388 5,329,017,385 4,290,255,607 3,208,705,585

Amounts due from Related Parties - Trade 20.1 134,398,104 7,986,289 6,723,621 138,580,705 569,973,103 953,850,294

Amounts due from Related Parties - Non-Trade 20.2 19,180,693 23,539,522 29,556,243 19,180,693 23,539,522 29,556,243

Deposits with Bank 50,983,014 – – – – –

Marketable Securities 21 318,719,907 290,312,617 410,551,810 – – –

Cash and Cash Equivalents 22.1 615,316,097 372,302,709 250,573,958 424,276,574 364,735,727 200,402,845

13,813,960,283 11,164,888,451 8,477,131,841 11,629,183,437 9,174,054,691 7,119,389,212

Total Assets 21,419,222,628 17,449,159,330 12,879,464,469 16,391,563,978 12,801,954,031 10,393,911,474

EquityStated Capital 23 626,048,050 626,048,050 626,048,050 626,048,050 626,048,050 626,048,050

Capital Reserves 24 773,312,374 655,453,887 664,542,029 773,312,374 655,453,887 664,542,029

Statutory Reserve 25 78,425,118 44,407,823 10,748,118 – – –

Revenue Reserves 26 3,778,757,019 3,421,738,520 2,583,363,235 3,369,578,997 3,099,276,519 2,322,064,056

Total Equity Attributable to Equity Holders of the Company 5,256,542,561 4,747,648,280 3,884,701,432 4,768,939,421 4,380,778,456 3,612,654,135

Non-Controlling Interest 356,692,234 255,995,211 224,174,228 – – –

Total Equity 5,613,234,795 5,003,643,491 4,108,875,660 4,768,939,421 4,380,778,455 3,612,654,135

Non-Current LiabilitiesLoans and Borrowings 27 1,633,822,786 1,110,385,067 1,287,290,697 1,402,554,786 754,125,067 1,265,832,925

Retirement Benefit Obligations 29 270,539,471 204,787,190 181,875,758 259,358,640 197,833,421 176,663,436

Deferred Tax Liabilities 28 113,926,325 95,805,177 99,339,454 113,926,325 95,805,177 99,339,454

Security Deposits 576,648,411 487,448,522 403,893,567 576,648,411 487,448,522 403,893,567

Deposits from Customers 35 342,849,614 503,142,064 195,994,680 – – –

2,937,786,607 2,401,568,020 2,168,394,157 2,352,488,162 1,535,212,187 1,945,729,382

Current LiabilitiesTrade and Other Payables 30 2,653,495,750 2,571,464,250 1,497,946,889 2,261,543,467 2,126,108,140 1,218,205,378

Deferred Revenue 31 22,329,750 17,653,550 13,124,600 22,329,750 17,653,550 13,124,600

Income Tax Payable 67,213,232 191,642,639 148,523,489 38,976,352 170,547,218 118,434,130

Dividend Payable 32 10,822,388 5,824,553 3,204,691 10,822,388 5,824,553 3,204,691

Amounts due to Related Parties - Trade 34.1 184,453,415 171,271,866 268,647,603 184,453,415 171,271,866 268,647,603

Amounts due to Related Parties - Non-Trade 34.2 72,674,730 73,441,026 53,272,425 72,674,730 73,441,026 53,272,425

Deposits from Customers 35 2,521,670,352 2,159,857,465 1,451,990,703 – – –

Loans and Borrowings 27 7,335,541,609 4,852,792,470 3,165,484,251 6,679,336,293 4,321,117,036 3,160,639,130

12,868,201,226 10,043,947,819 6,602,194,652 9,270,136,395 6,885,963,389 4,835,527,957

Total Equity and Liabilities 21,419,222,628 17,449,159,330 12,879,464,469 16,391,563,978 12,801,954,031 10,393,911,474


I certify that the above Financial Statements of the Company comply with the requirements of the Companies Act No. 07 of 2007.

Priyath SalgadoFinance Director

The Board of Directors is responsible for the preparation of these Financial Statements. Signed for and on behalf of the Board by,

Hemaka Amarasuriya H.A. PierisDirector Director/Group Chief Executive Officer

Colombo 28th February 2013

Statement of Financial Position


Statement of Changes in Equity

ConsolidatedYear ended 31st December Attributable to Owners of the Company

Note Stated Reserve Investment Revaluation General Retained Total Non- TotalCapital Fund Fund Reserves Reserves Earnings Controlling Equity

Interest

Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs.

Restated balance at 1st January 2011 626,048,050 10,748,118 – 664,542,029 2,000,000,000 583,363,235 3,884,701,432 224,174,228 4,108,875,660Realisation on Revaluation Surplus 24.1 – – – (12,622,419) – 12,622,419 – – –Deferred Tax effect on realisation of Revaluation Surplus 28.2 – – – 3,534,277 – – 3,534,277 – 3,534,277Transferred to/(from) during the year

25.1,25.2,26.1 – 5,602,000 28,057,705 – 200,000,000 (233,659,705) – – –

Transactions with owners of the Company, recognised directly in equity

Distributions to owners of the CompanyFinal Dividend - 2010 33 – – – – – (219,116,818) (219,116,818) – (219,116,818)Interim Dividend - 2011 33 – – – – – (187,814,415) (187,814,415) (10,666,665) (198,481,080)Total Distributions to owners of the Company – – – – – (406,931,233) (406,931,233) (10,666,665) (417,597,898)Total comprehensive income for the yearProfit for the year, as restated – – – – – 1,266,343,804 1,266,343,804 42,487,648 1,308,831,452Other comprehensive income – – – – – – – – –Total comprehensive income for the Year – – – – – 1,266,343,804 1,266,343,804 42,487,648 1,308,831,452Restated Balance at 31st December 2011 626,048,050 16,350,118 28,057,705 655,453,887 2,200,000,000 1,221,738,520 4,747,648,280 255,995,211 5,003,643,491Realisation on Revaluation Surplus 24.1 – – – (12,622,416) – 12,622,416 – – –Deferred Tax effect on realisation of Revaluation Surplus 28.2 – – – 3,534,277 – – 3,534,277 – 3,534,277Transferred to/(from) during the year

25.1,25.2,26.1 – 11,278,000 22,739,295 – 300,000,000 (334,017,295) – –

Transactions with owners of the Company, recognised directly in equityDistributions to owners of the CompanyFinal Dividend - 2011 33 – – – – – (751,257,660) (751,257,660) (21,333,333) (772,590,993)Total Distributions to owners of the Company – – – – – (751,257,660) (751,257,660) (21,333,333) (772,590,993)Change in ownership interest in subsidiaryAcquisition of non-contolling interests without change in control – – – – – (8,069,354) (8,069,354) – (8,069,354)Issue shares of subsidiary to non-contolling interest – – – – – – – 66,334,140 66,334,140Total transactions with owners of the Company – – – – – (759,327,014) (759,327,014) 45,000,807 (714,326,207)Total comprehensive income for the yearProfit for the year – – – – – 1,137,740,394 1,137,740,394 55,696,216 1,193,436,610

Other comprehensive incomeSurplus on Revaluation for the year 12 – – – 148,602,050 – – 148,602,050 – 148,602,050Deferred tax effect on Revaluation 28.2 – – – (21,655,424) – (21,655,424) – (21,655,424)Total other comprehensive income for the year – – – 126,949,626 – – 126,946,626 – 126,946,626Total comprehensive income for the year – – – 126,946,626 – 1,137,740,394 1,264,687,020 55,696,216 1,320,383,236Balance at 31st December 2012 626,048,050 27,628,118 50,797,000 773,312,374 2,500,000,000 1,278,757,019 5,256,542,561 356,692,234 5,613,234,795

Investment Fund Account consists of 8% of the profits calculated for the payment of Value Added Tax on Financial Services and 5% of the Profit before Tax calculated for payment of Income Tax purposes during the year.




CompanyYear ended 31st December Attributable to Equity Holders of the Company

Note Stated Revaluation General Retained TotalCapital Reserves Reserves Earnings

Rs. Rs. Rs. Rs. Rs.

Restated balance at 1 January 2011 626,048,050 664,542,029 2,000,000,000 322,064,056 3,612,654,135

Realisation on Revaluation Surplus 24.1 – (12,622,419) – 12,622,419 –

Deferred Tax effect on realisation of Revaluation Surplus 28.2 – 3,534,277 – – 3,534,277

Transferred to/(from) during the year 26.1 – – 200,000,000 (200,000,000) –


Distributions to owners of the Company

Final Dividend - 2010 33 (219,116,818) (219,116,818)

Interim Dividend - 2011 33 (187,814,415) (187,814,415)

Total Distributions to owners of the Company – – – (406,931,233) (406,931,233)

Total comprehensive income for the year

Profit for the year – – – 1,171,521,277 1,171,521,277

Other comprehensive income – – – – –

Total comprehensive income for the year – – – 1,171,521,277 1,171,521,277

Restated Balance at 31 December 2011 626,048,050 655,453,887 2,200,000,000 899,276,519 4,380,778,456

Realisation on Revaluation Surplus 24.1 – (12,622,416) – 12,622,416 –

Deferred Tax effect on realisation of Revaluation Surplus 28.2 – 3,534,277 – – 3,534,277

Transferred to/(from) during the year 26.1 – – 300,000,000 (300,000,000) –


Distributions to owners of the Company

Final Dividend - 2011 33 – – – (751,257,660) (751,257,660)

Total Distributions to owners of the Company – – – (751,257,660) (751,257,660)

Total comprehensive income for the year

Profit for the year – – – 1,008,937,722 1,008,937,722

Other comprehensive income

Surplus on Revaluation for the year 12 – 148,602,050 – – 148,602,050

Deferred tax effect on Revaluation 28.2 – (21,655,424) – – (21,655,424)

Total other comprehensive income – 126,946,626 – – 126,946,626

Total comprehensive income for the year – 126,946,626 – 1,008,937,722 1,135,884,348

Balance as at 31st December 2012 626,048,050 773,312,374 2,500,000,000 869,578,997 4,768,939,421



Statement of Changes in Equity Annual Report 2012 Singer (Sri Lanka) PLC 151

Statement of Cash Flows


Year ended 31st December 2012 2011 2012 2011Note Rs. Rs. Rs. Rs.

Cash Flows from Operating Activities

Profit before Income Tax Expense 1,746,225,331 1,990,012,085 1,467,512,620 1,745,050,354

Adjustments for:

Depreciation on Property, Plant & Equipment 12 233,157,545 207,120,389 222,881,140 199,295,874

Share of (Profit)/Loss from Equity Accounted Investees 8 (5,777,555) 638,975 – –

Amortisation of Intangible Assets 13 18,459,349 15,933,417 16,244,811 14,352,391

(Gain)/Loss on Disposal of Property, Plant & Equipment (1,894,295) (9,561,662) (964,020) (9,561,662)

Interest Expense 7.1 1,054,025,271 (559,650,375) 1,054,025,271 559,650,375

Interest Income 7.2 (99,059,887) (62,025,484) (189,386,968) (101,240,616)

Impairment of Inventory 27,049,717 50,096,184 27,049,717 50,096,184

Bad Debts Written-off (38,591,333) (227,677,071) (17,803,787) (203,353,653)

Impairment on Trade and Other Receivables 110,907,246 137,689,500 77,097,730 119,318,202

Dividend Income (2,008,950) (18,225) (59,590,941) (28,804,721)

Provision for Retiring Gratuity 29 75,349,772 36,562,706 70,492,710 34,686,259

Operating Profit before Working Capital Changes 3,117,842,211 2,698,421,189 2,667,558,283 2,379,488,987

(Increase)/Decrease in Inventories (850,207,613) (1,337,548,478) (867,079,093) (1,320,676,998)

(Increase)/Decrease in Debtors falling due after One Year (841,087,133) (1,709,743,292) (72,722,923) (223,613,268)

(Increase)/Decrease in Debtors falling due within One Year (1,514,715,667) (1,337,635,428) (1,093,379,523) (978,405,267)

(Increase)/Decrease in dues from Related Parties (122,052,986) 4,754,053 435,751,227 389,893,911

(Increase)/Decrease in dues to Related Parties 12,415,253 (77,207,136) 12,415,253 (77,207,137)

Increase in Security Deposits 89,199,890 83,554,954 89,199,890 83,554,953

Increase in Customer Deposit Liabilities 201,520,436 1,015,014,144 – –

Increase in Trade and Other Payables (65,093,539) 1,054,553,264 33,001,495 912,939,997

Cash Generated from Operations 27,820,852 394,163,272 1,204,744,610 1,165,975,178

Finance Costs Paid (906,900,236) (540,686,277) (951,591,437) (564,687,607)

Retiring Gratuity Paid 29 (9,597,491) (13,651,274) (8,967,491) (13,516,274)

Income Tax Paid (684,052,611) (671,285,084) (610,943,687) (532,564,583)

Net Cash from/(Used in) Operating Activities (1,572,729,486) (831,459,362) (366,758,006) 55,206,714

Cash Flows from Investing Activities

Acquisition of Property, Plant & Equipment and Intangible Assets 12/13 (602,757,249) (349,166,590) (564,695,250) (333,346,287)

Proceeds from Disposal of Property, Plant & Equipment 19,963,106 20,064,114 16,416,611 20,064,114

Investment in Subsidiary Company – – (582,241,596) –

(Acquisition)/Disposal of Marketable Securities (28,407,290) 120,239,193 – –

Investment in Equity Accounted Investee – (24,000,000) – (24,000,000)

Investment in Bank Deposits (50,983,014) – – –

Net Cash Flows from Loans Given to Related Companies 80,000,000 28,583,136 (952,547,971) 71,904,327

Interest Received 99,059,887 62,025,484 189,386,968 101,240,616

Dividend Received 2,008,950 18,225 59,590,941 28,804,721

Net Cash Flows Used in Investing Activities (481,115,610) (142,236,439) (1,834,090,297) (135,332,509)

Cash Flows from Financing Activities

Proceeds from Interest-Bearing Loans and Borrowings 8,510,752,906 5,908,054,000 7,938,652,906 5,133,054,000

Repayment of Interest-Bearing Loans and Borrowings (5,493,216,426) (4,614,744,236) (5,016,872,281) (4,573,224,290)

Proceeds from Rights Issue Purchased by Minority Holders 58,264,786 – – –

Net Payment to Minority Shareholders (21,333,333) (10,666,665) – –

Dividends Paid (746,259,826) (404,311,371) (746,259,826) (404,311,371)

Net Cash Flows from Financing Activities 2,308,208,107 878,331,728 2,175,520,899 155,518,339

Net Increase/(Decrease) in Cash and Cash Equivalents 254,363,011 (302,561,629) (25,327,504) 75,392,544

Cash and Cash Equivalents at the beginning of the Year 22 (302,561,629) (207,197,556) (181,976,124) (257,368,668)

Cash and Cash Equivalents at the end of the Year 22 (48,198,618) (302,561,629) (207,303,628) (181,976,124)



1. Corporate Information1.1 Reporting Entity1.1.1 General

Singer (Sri Lanka) PLC is a limited liability company incorporated

and domiciled in Sri Lanka. The Registered Office of the Company is

located at No. 80, Nawam Mawatha, Colombo 2, and the principal

place of business is situated at the above address.

In the Report of the Directors and in the Financial Statements, ‘the

Company’ refers to Singer (Sri Lanka) PLC as the Holding Company

and ‘the Group’ refers to the Consolidated Financial Statements of

Singer (Sri Lanka) PLC and its Subsidiary, Singer Finance (Lanka) PLC.

1.1.2 Companies in the GroupSubsidiary

A fully-owned subsidiary, Singer Finance (Lanka) PLC, was

incorporated on 19th April 2004 under the Companies Act No. 17 of

1982 and its commercial operations commenced on 8th July 2004.

Singer Finance (Lanka) PLC issued 25% of its equity holding through

Initial Public Offering and allotted shares on 22nd December 2010.

Shares of Singer Finance (Lanka) PLC was first traded on 17th January

2011 at the Colombo Stock Exchange. Pursuant to the Special

Resolution passed by the shareholders on 21st December 2010,

name of the Subsidiary Company was changed from Singer Finance

(Lanka) Ltd. to Singer Finance (Lanka) PLC. The name change was

gazetted on 18th February 2011.

Associates (Equity Accounted Investees)

Associate Companies of the Group, whose results have been included

in the Consolidated Financial Statements are:

Telshan Network (Pvt) Ltd.

Reality Lanka Ltd.

All of the above companies are incorporated in Sri Lanka.

1.1.3 Principal Activities and Nature of OperationsCompany

During the year, the principal activities of the Company were

marketing domestic and industrial sewing machines, consumer

electronics, home appliances, furniture, agricultural equipment and

personal computers and manufacturing furniture and agricultural

equipment.

Subsidiary

Principal activities of Singer Finance (Lanka) PLC are financing of

the sale or purchase of any goods, articles, vehicles or other items

either by letting on hire, hire purchase, leasing and other methods of

financing. In addition, Singer Finance (Lanka) PLC accepts deposits.

1.1.4 Parent Enterprise and Ultimate Parent Enterprise

The Company's Parent undertaking is Singer (Sri Lanka) BV.

The Company's Ultimate Parent undertaking and controlling party is

Retail Holdings NV, which is incorporated in the Netherlands, Antilles.

Note 1 Corporate Information 153

Note 2 Significant Accounting Policies 154

Note 3 Revenue 164

Note 4 Segment Information 164

Note 5 Other Income 165

Note 6 Other Expenses 165

Note 7. Net Finance Cost 166

Note 8 Share of Profit/(Loss) of Equity Accounted Investees - (Net of Income Tax) 166

Note 9 Profit before Tax 166

Note 10 Income Tax Expense 167

Note 11 Earnings Per Share 168

Note 12 Property, Plant & Equipment 168

Note 13 Intangible Assets 172

Note 14 Investment in Subsidiary - Company 174

Note 15 Investments in Equity Accounted Investees 175

Note 16 Other Long-Term Investments 176

Note 17 Inventories 177

Note 18 Loans Due from Related Parties 177

Note 19 Trade and Other Receivables 177

Note 20 Amounts Due from Related Parties 179

Note 21 Marketable Securities 179

Note 22 Cash and Cash Equivalents 179

Note 23 Stated Capital 179

Note 24 Capital Reserves 180

Note 25 Statutory Reserves 180

Note 26 Revenue Reserves 181

Note 27 Loans & Borrowings 182

Note 28 Deferred Tax Assets/(Liabilities) 185

Note 29 Retirement Benefit Obligations 187

Note 30 Trade and Other Payables 187

Note 31 Deferred Revenue 188

Note 32 Dividend Payable 188

Note 33 Dividends 188

Note 34 Amounts due to Related Parties 188

Note 35 Deposits from Customers 189

Note 36 Financial Instruments 189

Note 37 Commitments and Contingencies - Group/Company 194

Note 38 Events after the Reporting Period 194

Note 39 Related Party Transactions 195

Note 40 Transactions with Key Management Personnel 198

Note 41 Reconciliation of Transition to SLFRS 198

Notes to the Financial Statements


1.1.5 Number of Employees

The number of employees of the Group at the end of the year was

1,475 (2011 - 1,228), Company - 1,284 (2011 - 1,095).

1.2 Basis of Preparation1.2.1 Statement of Compliance

The Financial Statements have been prepared in accordance with

Sri Lanka Accounting Standards (Hereinafter referred to as SLFRS)

issued by The Institute of Chartered Accountants of Sri Lanka (ICASL)

and the requirements of the Companies Act No. 07 of 2007 and

Sri Lanka Accounting and Auditing Standards Act No. 15 of 1995.

For all periods up to and including year ended 31st December 2011,

the Group prepared its Financial Statements in accordance with

Sri Lanka Accounting Standards effective as at 31st December 2011.

These Financial Statements for the year ended 31st December 2012

are the first annual Financial Statements prepared and presented in

accordance with Sri Lanka Accounting Standards (SLFRS/LKAS) and

SLFRS 1, First Time Adoption of SLFRS has been applied. These SLFRSs

have materially converged with the International Financial reporting

standards (IFRS) as issued by the International Accounting Standards

Board (IASB).

Accordingly, the Group has prepared Financial Statements which

comply with SLFRS and LKAS applicable for periods ending on of

after 31st December 2012, together with the comparative periods

ending on or after 31st December 2011, as described in the

Accounting Policies.

The effect of the transition to SLFRS/LKAS on the previously reported

financial positions, financial performances and cash flows of

the Group and the Company is given in Note 41 to the Financial

Statements.

1.2.2 Approval of Financial Statements

The Financial Statements for the year ended 31st December 2012

were authorised for issue in accordance with a resolution of the

Board of Directors on 28th February 2013.

1.2.3 Basis of Measurement

The Financial Statements have been prepared on the historical cost

basis, except for certain investments and items of Property, Plant &

Equipment, which are measured at fair value and Defined Benefit

Plans which are measured at the present value of the Retirement

Benefit Obligations as explained in the respective Notes to the

Financial Statements.

1.2.4 Functional and Presentation Currency

The Financial Statements are presented in Sri Lankan Rupees which is

the functional currency of the Company and its Subsidiary.

1.2.5 Use of Estimates and Judgements

The preparation of the Consolidated Financial Statements in

conformity with SLFRS requires management to make judgements,

estimates and assumptions that affect the application of accounting

policies and the reported amounts of assets, liabilities, income and

expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing

basis. Revisions to accounting estimates are recognised in the period

in which the estimate is revised and any future periods affected.

Information about significant areas of estimation uncertainty and

critical judgements in applying accounting policies that have the

most significant effect on the amounts recognised in the Financial

Statements is included in the following Notes:

• Note13-Measurementofintangibleassets

• Note28-Measurementofretirementbenefitobligations

• Note35-Commitmentsandcontingencies

2. Significant Accounting PoliciesThe accounting policies set out below have been consistently applied

to all periods presented in these consolidated Financial Statements

and in preparing the opening SLFRS statement of financial position at

1st January 2011 for the purposes of the transition to SLFRSs, unless

otherwise indicated.

The Directors have made an assessment of the Group’s ability to

continue as a going concern in the foreseeable future, and they do

not intend either to liquidate or cease trading.

2.1 Basis of Consolidation2.1.1 Business Combinations

Business combinations are accounted using acquisition method. The

Group measures goodwill at the acquisition date, as the fair value

of the consideration transferred including the recognised amount of

any non-controlling interests in the acquire, less the net recognised

amount (generally fair value) of the identifiable assets acquired and

liabilities assumed measured as of the acquisition date. When the

excess is negative, a bargain purchase gain is recognised immediately

in profit or loss.

The Group elects on a transaction-by-transaction basis whether

to measure non-controlling interests at fair value, or at their

proportionate share of the recognised amount of the identifiable net

assets, at the acquisition date.

Transaction costs, other than those associated with the issue of

debt or equity securities, that the Group incurs in connection with a

business combination are expensed as incurred.

2.1.2 Subsidiary

Subsidiary is an entity controlled by the Group. Control exists when

the Group has the power to govern the financial and operating

policies of an entity so as to obtain benefits from its activities.

The Financial Statements of the subsidiary are included in the

Consolidated Financial Statements from the date that control

commences until the date that control ceases.

2.1.3 Acquisitions of Non-Controlling Interests

Acquisitions of Non-controlling interests are accounted for as

transactions with equity holders. Therefore no goodwill is recognised

as a result of such transactions.

Singer (Sri Lanka) PLC Annual Report 2012154 Notes to the Financial Statements

2.1.4 Loss of Control

Upon loss of control, the Group derecognises the assets and

liabilities of the subsidiary, anyone controlling interests and the other

components of equity related to the subsidiary. Any surplus or deficit

arising on the loss of control is recognised in the Income Statement.

If the Group retains any interest in the previous subsidiary, then

such interest is measured at fair value as at the date that control is

lost. It is then accounted for an equity accounted investee or as an

available-for-sale financial asset depending on the level of influence

retained.

2.1.5 Associates (Equity Accounted Investees)

Associates are those entities in which the Group has significant

influence, but not control, over the financial and operating policies.

Significant influence is presumed to exist when the Group holds

between 20% to 50% of the voting power of another entity.

Investments in associates are accounted for using the equity method

(equity accounted investees) and are recognised initially at cost. The

Consolidated Financial Statements includes the Group’s share of the

income and expenses and equity movements of equity accounted

investees, from the date that significant influence commences until

the date that significant influence ceases. When the Group's share

of losses exceeds its interest in an equity accounted investee, the

carrying amount of that interest is reduced to nil and the recognition

of further losses is discontinued, except to the extent that the Group

has an obligation or has made payments on behalf of the investee.

2.1.6 Transactions Eliminated on Consolidation

Intra-group balances and transactions, and any unrealised income

and expenses arising from intra-group transactions are eliminated

in preparing the Consolidated Financial Statements. Unrealised

gains arising from transactions with equity accounted investees

are eliminated against the investment to the extent of the Group’s

interest in the investee. Unrealised losses are eliminated in the same

way as unrealised gains, but only to the extent that there is no

evidence of impairment.

2.2 Foreign Currency Translation

Transactions in foreign currencies are initially recorded at the

functional currency rate ruling at the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies at

the reporting date are retranslated at the functional currency rate of

exchange ruling at that date. Non-monetary items that are measured

in terms of historical cost in a foreign currency are retranslated using

the exchange rates as at the dates of the initial transactions. Foreign

exchange differences arising on translation are recognised in profit

and loss.

2.3 Property, Plant & Equipment2.3.1 Recognition and Measurement

Items of Property, Plant & Equipment are measured at cost

or valuation, less accumulated depreciation and accumulated

impairment losses.

(a) Cost and Valuation

Cost includes expenditure directly attributable to the acquisition of

the asset. Purchased software that is integral to the functionality of

the related equipment is capitalised as part of that equipment. When

parts of an item of Property, Plant & Equipment have different useful

lives, they are accounted for as separate items of Property, Plant &

Equipment.

All items of Property, Plant & Equipment are initially recognised

at cost. A revaluation is carried out when there is a substantial

difference between the fair value and the carrying amount of the

property, and is undertaken by professionally qualified valuers. When

items of Property, Plant & Equipment are subsequently revalued, the

entire class of such assets are revalued.

Increases in the carrying amount on revaluation are credited to

the revaluation reserve in shareholders' equity, unless it reverses a

previous revaluation decrease relating to the same asset, which was

previously recognised as an expense. In these circumstances the

increase is recognised as income to the extent of the previous write

down.

Decreases in the carrying amount on revaluation that offset previous

increases of the same individual asset is charged against revaluation

reserve directly in equity. All other decreases are recognised in profit

and loss.

(b) Subsequent Costs

The cost of replacing part of an item of Property, Plant & Equipment

is recognised in the carrying amount of the item if it is probable that

the future economic benefits embodied within that part will flow

to the Group and its cost can be measured reliably. The carrying

amount of the replaced part is derecognised. The costs of the day-to-

day servicing of Property, Plant & Equipment are recognised in profit

and loss as incurred.

(c) Depreciation

Depreciation is calculated over the depreciable amount, or other

amount substituted for cost, less its residual value.

Depreciation is recognised in profit and loss on a straight-line basis

over the estimated useful lives of each part of an item of property,

plant & equipment, since this most closely reflected the expected

pattern of consumption of the future economic benefits embodied in

the asset. Freehold land is not depreciated.

The estimated useful lives are as follows:

Freehold Buildings Over 37.5 to 50 years

Motor Vehicles Over 05 years

Furniture, Fittings and Equipment Over 10 years

Plant and Machinery Over 10 years

EDP Equipment Over 05 years

Improvement on Leasehold Premises Over 04 to 10 years

Shop Furniture and Equipment Over 05 years

Annual Report 2012 Singer (Sri Lanka) PLC 155Notes to the Financial Statements

Depreciation of an asset commences when the asset is available for

use and ceases at the earlier of the date the asset is classified as held-

for-sale and the date that the asset is derecognised.

Depreciation methods, useful lives and residual values are reviewed

at each financial year end and adjusted if appropriate.

(d) Derecognition

An item of Property, Plant & Equipment is derecognised upon

disposal of or when no future economic benefits are expected from

its use or disposal. Gains and losses arising on derecognition of

the asset are determined by comparing the proceeds from disposal

with the carrying amount of Property, Plant & Equipment and are

recognised net within ‘Other Income’ in profit and loss.

2.3.2 Intangible Assets

An intangible asset is recognised if it is probable that future

economic benefits will flow to the entity and the cost of the asset

can be measured reliably in accordance with LKAS 38 on Intangible

Assets. Intangible Assets with finite useful lives are measured at cost,

less accumulated amortisation and accumulated impairment losses.

The useful lives of Intangible Assets are assessed to be either finite or

indefinite.

(a) Subsequent Expenditure

Subsequent expenditure is capitalised only when it increases the

future economic benefits embodied in the specific asset to which

it relates. All other expenditure, including expenditure on internally

generated goodwill and brands are recognised in profit or loss as

incurred.

Intangible Assets with finite lives are amortised over the useful

economic life and assessed for impairment whenever there is

an indication that the intangible asset may be impaired. The

amortisation period and the amortisation method for an intangible

asset with a finite useful life are reviewed at least at each financial

year-end. Changes in the expected useful life or the expected

pattern of consumption of future economic benefits embodied

in the asset is accounted for by changing the amortisation period

or method, as appropriate, and treated as changes in accounting

estimates. Amortisation expense on Intangible Assets with finite

lives is recognised in profit and loss on a straight-line basis over the

estimated useful lives, from the date they are available for use.

The estimated useful lives of Intangible Assets with finite lives are as

follows:The Class of Intangible Assets Useful Life

Computer Software 10 years

Other Intangible Assets Externally Acquired 5 years

Intangible assets with indefinite useful lives are tested for impairment

annually either individually or at the cash-generating unit level. Such

intangibles are not amortised.

Gains or losses arising from derecognition of an intangible asset are

measured as the difference between the net disposal proceeds and

the carrying amount of the asset and are recognised in profit and

loss when the asset is derecognised.

Intangible assets with indefinite useful lives represent Trade Marks

purchased through the effect of a business combination and were

recorded at cost.

2.4 Financial Instruments2.4.1 Non-derivative Financial Assets

The Group recognises a financial assets or financial liabilities in its

statement of financial position when the Group becomes a party to

the contractual provisions of the instrument.

Financial assets and financial liabilities are initially measured at

fair value. Transaction costs that are directly attributable to the

acquisition or issue of a financial asset or a liability (other than

financial assets and financial liabilities at fair value through profit or

loss) are added or deducted from the fair value of the financial asset

or liability, as appropriate, on initial recognition. Transaction costs

that are directly attributable to the acquisition of financial assets and

financial liabilities at fair value through profit or loss are recognized

immediately in the income statement.

Financial assets and liabilities are offset and the net amount is

presented when, and only when the Group has a legal right to offset

the amount and intends either to settle on a net basis or to realize

the asset and settle the liability simultaneously.

The Group has following non-derivative financial assets: held to

maturity financial assets, loans and receivables and available for sale

financial assets.

2.4.1.1 Held to Maturity Financial Assets

A non-derivative financial asset with fixed or determinable payments

with fixed maturity where group intends to hold to maturity is

classified under this category.

Held to maturity financial assets are recognized initially at fair

value plus any directly attributable transaction costs. Subsequent

to initial recognition held-to-maturity financial assets are measured

at amortised cost using the effective interest method, less any

impairment losses.

Held to maturity financial assets comprise of T Bills and T Bonds.

2.4.1.2 Loans and Receivables

Loans and receivables are financial assets with fixed or determinable

payments that are not quoted in an active market. Such assets

are recognised initially at fair value plus any directly attributable

transaction costs.

Subsequent to initial recognition loans and receivables are measured

at amortised cost using the effective interest method, less any

impairment losses.

Loans and receivables comprise of HP and Lease receivable, related

party loans and staff loans and trade and other receivables.


Cash and Cash Equivalents

Cash and cash equivalents comprise cash in hand, demand deposits

and short-term highly liquid investments, readily convertible to

known amounts of cash and subject to insignificant risk of changes

in value.

For the purpose of cash flow statement, cash and cash equivalents

consist of cash in hand and deposits in banks net of outstanding

bank overdrafts.

2.4.1.3 Available-for-Sale Financial Assets

Available for sale financial assets are non-derivative financial assets

that are recognised as available or sale or not classified in any

previous categories. Available for sale financial assets are recognised

initially at fair value plus any directly attributable transaction costs.

Subsequent to initial recognition, they are measured at fair value

and changes therein, other than impairment losses, are recognised

in the other comprehensive income and presented in the available

for sale reserve in equity. When an investment is derecognised, the

cumulative gain or loss in other comprehensive income is transferred

to profit or loss.

Available for sales financial assets comprise of equity investments.

2.4.1.4 Derecognition of Financial Assets

The Group derecognises a financial asset when the rights to receive

cash flows from the asset have expired or when it transfers the

financial asset in a transaction in which substantially all the risks

and rewards of ownership of the financial asset are transferred or

in which the Group neither transfers nor substantially all risks and

rewards of ownership and it does not retain control of the financial

asset.

In transactions in which the Group neither retains nor transfers

substantially all the risks and rewards of ownership of a financial

asset and it retains control over the asset, the Group continues to

recognise the asset to the extent of its continuing involvement,

determined by the extent to which it is exposed to changes in the

value of the transferred asset.

On derecognition of a financial asset, the difference between the

carrying amount of the asset (or the carrying amount allocated

to the portion of the asset transferred), and the sum of (i) the

consideration received (including any new asset obtained less any

new liability assumed) and (ii) any cumulative gain or loss that had

been recognised in other comprehensive income is recognised in

profit or loss.

The Group derecognises a financial liability when its contractual

obligations are discharged or cancelled or expire.

2.4.2 Non-derivative Financial Liabilities

The Group initially recognises debt securities issued and subordinated

liabilities on the date that they are originated. All other liabilities are

recognised initially on the trade date at which the Company becomes

a party to the contractual provisions of the instrument.

The Group classifies non-derivative financial liabilities into other

financial liabilities category. Such financial liabilities are recognised

initially at fair value plus any directly attributable transaction costs.

Subsequent to initial recognition, these financial liabilities are

measured at amortised cost using the effective interest method.

Other financial liabilities comprise interest bearing borrowings, bank

overdrafts and trade and other payables.

Bank overdrafts that are repayable on demand and form an

integral part of the Company’s cash management are included as a

component of cash and cash equivalents for the statement of cash

flows.

2.4.2.1 De-recognition of Financial Liability

The Group derecognises a financial liability when its contractual

obligations are discharged, cancelled or expired. Financial assets and

liabilities are offset and the net amount presented in the statement

of financial position when and only when, the Company has a legal

right to offset the amounts and intends either to settle on a net basis

or to realise the asset or settle the liability simultaneously.

2.4.3 Share Capital

Ordinary shares are classified as equity. Incremental costs directly

attributable to the issue of ordinary shares are recognised as a

deduction from equity, net of any tax effects.

2.4.4 Amortised Cost Measurement

The amortised cost of a financial asset or liability is the amount at

which the financial asset or liability is measured at initial recognition,

minus principal repayments and any impairment and plus/minus the

cumulative amortisation using the effective interest method of any

difference between the initial amount recognised and the maturity

amount, minus any reduction for impairment.

2.4.5 Fair Value Measurement

Fair value is the amount for which an asset could be exchanged, or a

liability settled, between knowledgeable, willing parties in an arm’s

length transaction on the measurement date.

The fair value of financial instruments that are traded in an active

market at each reporting date is determined by reference to quoted

market prices or dealer price quotations, without any deduction for

transaction costs.

For financial instruments not traded in an active market, the

fair value is determined using appropriate valuation techniques.

Such techniques may include using recent arm’s length market

transactions; reference to the current fair value of another instrument

that is substantially the same; a discounted cash flow analysis or

other valuation models.


2.4.6 Impairment2.4.6.1 Impairment of Non-derivative Financial Assets

Financial assets other than those measured at fair value are assessed

for indicators of impairment at the end of each reporting period.

Financial assets are considered to be impaired when there is objective

evidence that as a result of one or more event that occurred after the

initial recognition of the financial assets, the estimated future cash

from the asset have been affected.

The Group assesses at each reporting date whether there is any

objective evidence that a financial asset or a group of financial

assets is impaired. A financial asset or a group of financial assets is

deemed to be impaired if, and only if, there is objective evidence of

impairment as a result of one or more events that has occurred after

the initial recognition of the asset and that loss event have an impact

on the estimated future cash flows of the financial asset or the group

of financial assets that can be reliably estimated.

(a) Impairment Losses on Financial Assets carried at Amortised Cost

Impairment losses on assets carried at amortised cost are measured

as the difference between the carrying amount of the financial asset

and the present value of estimated future cash flows discounted at

the asset’s original effective interest rate.

Impairment losses are recognised in profit or loss and reflected in an

allowance account against loans and advances. When a subsequent

event causes the amount of impairment loss to decrease, the

decrease in impairment loss is reversed through profit or loss.

(b) Impairment Losses on Available-for-Sale Financial Assets

Impairment losses on available-for-sale investment securities are

recognised by transferring the cumulative loss that has been

recognised in other comprehensive income to profit or loss as a

reclassification adjustment. The cumulative loss that is reclassified

from other comprehensive income to profit or loss is the difference

between the acquisition cost, net of any principal repayment and

amortisation, and the current fair value, less any impairment loss

previously recognised in profit or loss. Changes in impairment

provisions attributable to time value are reflected as a component of

interest income.

If, in a subsequent period, the fair value of an impaired available-

for-sale debt security increases and the increase can be objectively

related to an event occurring after the impairment loss was

recognised in profit or loss, the impairment loss is reversed, with the

amount of the reversal recognised in profit or loss. However, any

subsequent recovery in the fair value of an impaired available-for-sale

equity security is recognized in other comprehensive income.

2.4.6.2 Impairment of Non-Financial Assets

The carrying amount of the Group’s non-financial assets other than

inventories and deferred tax assets are reviewed at each reporting

date to determine whether there is an indication of impairment. If

any such indication exists or when annual impairment testing for an

asset is required, then the asset's recoverable amount is estimated.

The recoverable amount of an asset or cash-generating unit is

the greater of its value in use and its fair value less costs to sell.

In assessing value in use, the estimated future cash flows are

discounted to their present value using a pre-tax discount rate that

reflects current market assessments of the time value of money and

the risks specific to the asset. In determining fair value, less costs to

sell, an appropriate valuation model is used.

An impairment loss is recognised if the carrying amount of an asset

or cash-generating unit exceeds its estimated recoverable amount.

Impairment losses are recognised in profit and loss. An impairment

loss is reversed if there has been a change in the estimates used to

determine the recoverable amount. An impairment loss is reversed

only to the extent that the asset's carrying amount does not exceed

the carrying amount that would have been determined, net of

depreciation or amortisation, if no impairment loss had been

recognised.

2.5 Inventories

Inventories are measured at the lower of cost and net realisable

value, after making due allowances for obsolete and slow moving

items. Net realisable value is the estimated selling price in the

ordinary course of business, less the estimated cost of completion

and selling expenses.

The cost of each category of inventory is determined on the

following basis:

Raw Materials - At actual cost on first-in first-out basis.

Finished Goods (excluding factory) - Weighted average cost.

Finished Goods and Work-in-Progress at Piliyandala Factory

- At the cost of direct materials, direct labour and an appropriate proportion of fixed production overheads, based on normal operating capacity.

Goods-in-Transit - At actual cost.

Supplies and Parts - Purchase cost, less issues for the period valued at a standard percentage of selling price (requires revision).

Repossessed Goods - Half of its weighted average cost. Provisions for Inventory

Specific provisions are made giving consideration to the condition of

inventory held by the Company.

2.6 Provisions

A provision is recognised if, as a result of a past event, the Group

has a present legal or constructive obligation that can be measured

reliably, and it is probable that an outflow of economic benefits will

be required to settle the obligation. Provisions are determined by

discounting the expected future cash flows at a pre-tax rate that

reflects current market assessments of the time value of money and

the risks specific to the liability. The unwinding of the discount is

recognised as finance cost.


2.6.1 Provisions for Warranties

A provision for warranties is recognised when the underlying

products or services are sold. The provision is based on historical

warranty data and a weighing of all possible outcomes against their

associated probabilities.

Capital Commitments and Contingencies

Capital commitments and contingent liabilities of the Group are

disclosed in the respective Notes to the Financial Statements.

2.7 Employee Benefits2.7.1 Defined Benefit Plan

A defined benefit plan is post-employment benefit plan other than

a defined contribution plan. The liability recognised in the Financial

Statements in respect of defined benefit plans is the present value

of the defined benefit obligation as at the reporting date. The

defined benefit obligation is calculated by a Qualified Actuary as at

the reporting date using the Projected Unit Credit (PUC) method as

recommended by SLAS 16.

The actuarial valuation involves making assumptions about discount

rates, salary increment rate, mortality rate and retirement age. Due

to the long-term nature of his plans such estimates are subject to

significant uncertainty.

The liability is not externally funded.

All actuarial gains and losses arising from defined benefit plans are

recognised immediately in profit and loss.

2.7.2 Defined Contribution Plans - Employees' Provident Fund /Mercantile Services Provident Society and Employees' Trust Fund

A defined contribution plan is a post-employment benefit plan under

which an entity pays fixed contributions into a separate entity and

will have no legal or constructive obligation to pay further amounts.

Employees are eligible for contributions to Employees' Provident

Fund/Mercantile Services Provident Society and Employees' Trust Fund

in line with the respective Statutes and Regulations. The Company

contributes 12%, 12% and 3% of gross emoluments of employees to

the Employees' Provident Fund, Mercantile Services Provident Society

and the Employees' Trust Fund, respectively and is recognised as an

expense in profit and loss in the periods during which services are

rendered by employees.

2.7.3 Short-Term Benefits

Short-term employee benefit obligations are measured on an

undiscounted basis and are expensed as the related service is

provided. A liability is recognised for the amount expected to be

paid under short-term cash bonus if the Group has a present legal or

constructive obligation to pay this amount as a result of past services

provided by the employee and the obligation can be measured

reliably.

2.8 Discontinued Operations

A discontinued operation is a component of the Group’s business

that represents a separate major line of business or geographical

area of operations that has been disposed of or is held for sale,

or is a subsidiary acquired with a view to resale. Classification as

discontinued operation occurs upon disposal or when the operation

meets the criteria to be classified as held for sale, if earlier. When an

operation is classified as a discontinued operation, the comparative

Statement of Comprehensive Income is represented as if the

operation had been discontinued from the start of the comparative

period.

2.9 Income Statement2.9.1 Revenue Recognition

Revenue is recognised to the extent that it is probable that the

economic benefits will flow to the Company and the revenue and

associated costs incurred or to be incurred can be reliably measured.

Revenue is measured at the fair value of the consideration received

or receivable, net of returns, trade discounts and turnover taxes. The

following specific criteria are used for the purpose of recognition of

revenue:

(a) Sale of Goods (Normal Trading Transactions)

Revenue from the sale of goods is recognised when the significant

risks and rewards of ownership of the goods have passed to buyers,

the recovery of the consideration is probable, the associated costs

and possible return of goods can be estimated reliably, there is

no continuing management involvement with the goods and the

amount of revenue can be measured reliably.

(b) Sale of Goods (Hire Purchase Transactions)

At the time of effecting hire sales, the cash sales value is recognised

as sales.

The unearned income is recognised as income over the term of

hire purchase contract commencing from the month in which first

rental is due, in proportion to the declining receivable balance, so

as to produce a constant periodic rate of return on the hirer’s net

investment outstanding on the hire purchase.

(c) Interest - Other

Interest income is recognised in profit and loss as it accrues and is

calculated by using the effective interest rate method.

(d) Dividends

Dividend income is recognised in profit and loss when the right to

receive dividends is established.

(e) Service Fee Income on Hire Purchase

Service fee income is recognised over the length of hire purchase

agreement using the effective interest rate method. In the event of

early termination of the Hire Purchase Contract or cash conversion

remaining deferred, service income is recognised when such contract

is recognised or converted.

(f) Income on Suraksha and Extended Warranty Scheme

Income is recognised over the period of contract. Unrecognised

income is accounted for as deferred revenue.

(g) Others

Other income is recognised on an accrual basis.


Net gains and losses of a revenue nature on the disposal of

Property, Plant & Equipment and other non-current assets including

investments have been accounted for in profit and loss, having

deducted from proceeds on disposal, the carrying amount of the

assets and related selling expenses.

2.9.2 Revenue Recognition Policy of Singer Finance (Lanka) PLC(a) Hire Purchase

The excess of aggregated contract receivables over the cost of

the hired assets constitutes the total unearned income at the

commencement of a contract. The unearned income is recognised

as income over the term of the hire purchase contract commencing

from the month in which the first rental is due, in proportion to the

declining receivable balance, so as to produce a constant periodic

rate of return on the hirer’s net investment outstanding on hire

purchase.

(b) Lease

The excess of aggregated contract receivables over the cost of

the leased assets constitutes the total unearned income at the

commencement of a contract. The unearned income is recognised

as income over the term of lease contract commencing from the

month in which the first rental is due, in proportion to the declining

receivable balance, so as to produce a constant periodic rate of

return on the lessor’s net investment outstanding on the lease

outstanding.

(c) Interest on Government Securities

Interest is accrued in profit and loss, based on a receivable pattern

reflecting a constant periodic rate of return.

(d) Commissions, Service Charges and Others

Commissions, service charges and others are recognised on an

accrual basis.

2.9.3 Expenditure Recognition

(a) Expenses are recognised in profit and loss on the basis of a direct

association between the cost incurred and the earning of specific items

of income. All expenditure incurred in the running of the business and

in maintaining the Property, Plant & Equipment in a state of efficiency

has been charged to income in arriving at the profit for the year.

(b) For the purpose of presentation of the Income Statement, the

Directors are of the opinion that ‘function of expenses method’

presents fairly the elements of the Company's performance and

hence such presentation method is adopted.

Net Finance Cost

Finance income comprises interest income on funds invested, and

which is recognised as it accrues in profit or loss, using the effective

interest method.

Finance cost comprises interest payable on borrowings. Borrowing

costs that are not directly attributable to the acquisition, construction

or production of a qualifying asset are recognised in profit or loss

using the effective interest method.

Foreign currency gains and losses are reported on a net basis as

either finance income or finance cost depending on whether foreign

currency movements are in net gain or net loss position.

2.9.4 Taxation

Income tax expense comprises both current and deferred tax. Income

tax expense is recognised in profit and loss, except to the extent

that it relates to items recognised directly in equity, or in other

comprehensive income.

(a) Current Taxes

The current tax is the expected tax payable on the taxable income

for the year, using tax rates enacted or substantially enacted at the

reporting date, and any adjustment to tax payable in respect of

previous years.

(b) Deferred Taxation

Deferred tax is recognised in respect of temporary differences

between the carrying amount of assets and liabilities for financial

reporting purposes and the amounts used for taxation purposes.

Deferred tax liabilities are recognised for all taxable temporary

differences, except for -

• temporarydifferencesarisingontheinitialrecognitionofassetsor

liabilities in a transaction that is not a business combination and

that affects neither the accounting profit nor taxable profit or loss;

• temporarydifferencesrelatedtoinvestmentsinSubsidiariestothe

extent that it is probable that the temporary differences will not

reverse in the foreseeable future; and

• taxabletemporarydifferencesarisingontheinitialrecognitionof

goodwill.

Deferred tax is measured at the tax rates that are expected to be

applied to temporary differences when they reverse, based on

tax laws that have been enacted or substantively enacted by the

reporting date.

A deferred tax asset is recognised for unused tax losses and

deductible temporary differences, to the extent that it is probable

that future taxable profits will be available against which they can

be utilised. The carrying amount of deferred tax assets is reviewed at

each reporting date and is reduced to the extent that it is no longer

probable that the related tax benefit will be realised.

Tax withheld on dividend income from subsidiaries and associates

is recognised as an expense in the Consolidated Income Statement

at the same time as the liability to pay the related dividend is

recognised.

2.9.5 Borrowing Costs

Borrowing costs are recognised as an expense in the period in which

they are incurred.

2.10 Events After the Reporting Period

All material events after the reporting date have been considered and

where necessary adjustments made in these Financial Statements.


2.11 Earnings Per Share

The Group presents basic Earnings Per Share (EPS) for its ordinary

shares. Basic EPS is calculated by dividing the profit or loss

attributable to ordinary shareholders of the Company by the

weighted number of ordinary shares outstanding during the period.

2.12 Segment Reporting

An operating segment is a component of the company that engages

in business activities from which it may earn revenues and incur

expenses, including revenues and expenses that relate to transactions

with any of the Company’s other components. All operating results

are reviewed regularly by the Chief Executive Officer (CEO) to make

decisions regarding resources to be allocated to the segments and to

assess its performance and for which discrete finance information is

available.

Segment results that are reported to the CEO include items directly

attributable to a segment as well as those that can be allocated on a

reasonable basis.

Segment results assets and liabilities include items directly

attributable to a segment as well as those that can be allocated on a

reasonable basis.

Segment capital expenditure is the total cost incurred during the

period to acquire Property, Plant & Equipment and Intangible Assets

other than goodwill.

Segment information is presented in the respective Notes to the

Financial Statements.

2.13 Cash Flow Statement

The cash flow statement has been prepared using the indirect

method.

2.14 First Time Adoption of SLFRSs/LKAS

The Financial Statements, for the year ended 31st December 2012,

are the first Financial Statements prepared in accordance with SLFRS/

LKAS. Previously for period up to, the Group and Company prepared

its Financial Statements in accordance with Sri Lanka Accounting

Standards which were effective up to 31st December 2011.

2.14.1 Exemption offered in the SLFRS - 1 First Time Adoption of Sri Lanka Accounting Standards (SLFRS)

Group has taken the advantage of the following optional exemptions

offered in the SLFRS- 1 First Time Adoption of Sri Lanka Accounting

Standards (SLFRSs).

2.14.2 Exemption from Business Combinations

The Group elected not to apply IFRS 3, retrospectively to past

business compilation that occurred before 1st January 2011.

2.14.3 Exemption from Other SLFRs

Investments in Subsidiaries and Associates

The Group elected to account for its Investments in Subsidiaries and

Associates cost as recognised previously as per the previous

Sri Lanka Accounting Standards.

2.14.4 The Group has applied the following mandatory exceptions:Significant accounting judgement, estimates and assumptions

Significant accounting judgment, estimates and assumptions at

1st January 2011 and at 31st December 2011 are consistent with

those made for the same dates in accordance with SLAS effective up

to 31st December 2011 (after adjustment to reflect any difference in

Accounting Policies).

The estimates used by the Group to present these amounts in

accordance with SLFRS/LKAS effective from 1st January 2012 reflect

conditions at 1st January 2011, the date of transition to SLFRS/LKAS

and as of 31st December 2011.

2.14.5 Explanations for Transition to SLFRS/LKASs

In preparing SLFRS/LKAS Statement of Financial Position for

previously reported financial periods, required adjustments have been

made, in accordance with the respective SLFRS/LKASs. The effect

of the transition from SLASs to SLFRS/LKASs has been presented in

the reconciling statements and accompanying notes the material

reconciliation items.

2.15 New Accounting Standards Issued But Not Yet Effective

The Institute of Chartered Accountants of Sri Lanka has issued the

following standards which become effective for annual periods

beginning after the current financial year. Accordingly these

standards have not been applied in preparing these Financial

Statements. The Group expects that these standards when applied

will have substantial impact to the financial performance, financial

position and disclosures. The Group will be adopting these standards

when they become effective.

SLFS 9 - Financial Instruments

SLFRS 10 - Consolidated Financial Statements

SLFRS 11 - Joint Arrangements

SLFRS 12 - Disclosure of Interest in other entities

SLFRS 13 - Fair Value Measurement

2.16 Explanations for Transition to SLFRS/LKASs

In preparing SLFRS/LKASs Statement of Financial Position for

previously reported financial period, required adjustments have been

made in accordance with the respective SLFRS/LKASs. The effect of

the transition from SLASs to SLFRS/LKASs has been presented in the

reconciliation statements and accompanying notes to the material

reconciliation items.

2.17 Determination of Fair Values

A number of the Group’s accounting policies and disclosures

require the determination of fair values, for both financial and

non-financial assets and liabilities. Fair values have been determined

for measurement and/or disclosure purposes, based on the

following methods. When applicable, further information about the

assumptions made in determining fair values is disclosed in the Notes

specific to that asset or liability.


(i) Land and Buildings

The fair value of land and buildings is based on market values.

The market value of property is the estimated amount for which a

property could be exchanged on the date of valuation between a

willing buyer and a willing seller in an arm’s length transaction after

proper marketing wherein the parties had each acted knowledgeably

and willingly.

(ii) Investments in Equity and Debt Securities

The fair value of financial assets held to maturity investments and

available-for-sale financial assets are determined by reference to their

quoted closing bid price at the reporting date.

(iii) Trade and Other Receivables

The fair value of trade and other receivables which is determined for

disclosure purposes in Note 19 is estimated as the present value of

future cash flows, discounted at the market rate of interest at the

reporting date. The fair value is determined for disclosure purposes.

(iv) Non-derivative Financial Liabilities

Fair value, which is determined for disclosure purposes, is calculated,

based on the present value of future principal and interest cash

flows, discounted at the market rate of interest at the reporting

date. For finance leases, the market rate of interest is determined by

reference to similar lease agreements

2.18 Financial Risk ManagementOverview

The Group has exposure to the following risks from its use of

financial instruments:

• Creditrisk

• Liquidityrisk

• Marketrisk

• Operationalrisk

This note presents information about the Group’s exposure to each

of the above risks, the Group’s objectives, policies and processes

for measuring and managing risk and the Group’s management

of capital. Further quantitative disclosures are included throughout

these consolidated Financial Statements.

Risk Management Framework

The Board of Directors has overall responsibility for the establishment

and oversight of the Group’s risk management framework.

The Group’s risk management policies are established to identify and

analyse the risks faced by the Group, to set appropriate risk limits

and controls and to monitor risks and adherence to limits.

Risk management policies and systems are reviewed regularly to

reflect changes in market conditions and the Group’s activities.

The Board of Directors oversee how management monitors

compliance with the Group’s risk management policies and

procedures and reviews the adequacy of the risk management

framework in relation to the risks faced by the Group. The

Company’s Directors are assisted in their oversight role by Internal

Audit. Internal Audit undertakes both regular and ad hoc reviews of

risk management controls and procedures, the results of which are

reported to the Company’s Directors.

Credit Risk

Credit risk is the risk of financial loss to the Group if a customer or

counterparty to a financial instrument fails to meet its contractual

obligations and arises principally from the Group’s trade and other

receivables.

Treasury Bills

Singer Finance (Lanka) PLC invests not less than 7.5% of the Public

Deposits in Treasury Bills to comply with the Central Bank of Sri Lanka

Direction No. 1 of 2009.

Trade and Other Receivables

The Group’s exposure to credit risk relates to sale of products on

installment credit/hire purchase which is an integral part of the

business of the Group.

The Group’s exposure to credit risk on installment credit/

hire purchase contracts is influenced mainly by the individual

characteristics of each customer. The demographics of the Group’s

customer base, including the default risk of the country in which

customers reside, has a lesser influence on credit risk.

Geographically, there is no concentration of credit risk. Goods are

sold, subject to collateral undertakings so that in the event of non-

payment, the Group can have a secured claim. The Group establishes

an allowance for impairment that represents its estimate of incurred

losses in respect of trade and other receivables and investments. The

main components of this allowance are a specific loss component

that relates to individually significant exposures and a collective loss

component established for groups of similar assets in respect of

losses that have been incurred but not yet identified. The collective

loss allowance is determined, based on historical data of payment

statistics for similar financial assets.

Guarantees

The Group’s policy is not to provide financial guarantees to

subsidiaries.


Liquidity Risk

Liquidity risk is the risk that the Group will not be able to meet

its financial obligations as they fall due. The Group’s approach to

managing liquidity is to ensure, as far as possible, that it will always

have sufficient liquidity to meet its liabilities when due, under both

normal and stressed conditions, without incurring unacceptable

losses or risking damage to the Group’s reputation.

Market Risk

Market risk is the risk that changes in market prices, such as foreign

exchange rates and interest rates will affect the Group’s income.

The objective of market risk management is to manage and control

market risk exposures within acceptable parameters, while optimising

the return.

Currency Risk

The Group is exposed to currency risk on purchases that are

denominated in a currency other than the respective functional

currencies of Group entities. The currency in which these transactions

primarily are denominated is U.S. Dollars. The currency risk is limited

by the short-term nature of the period between the dates of the

purchase and the settlements of the related liability.

Interest Rate Risk

The Group manages interest rate risk on borrowings by using a

combination of fixed and floating interest rates.

Operational Risk

Operational risk is the risk of direct or indirect loss arising from

a wide variety of causes associated with the Group’s processes,

personnel, technology and infrastructure and from external factors

other than credit, market and liquidity risks such as those arising

from legal and regulatory requirements and generally accepted

standards of corporate behaviour. Operational risks arise from all

Group’s operations.

The Group’s objective is to manage operational risk so as to balance

the avoidance of financial losses and damage to the Group’s

reputation with overall cost effectiveness and to avoid control

procedures that restrict initiative and creativity.

The primary responsibility for the development and implementation

of controls to address operational risk is assigned to senior

management within each business unit. This responsibility is

supported by the development of overall Group standards for the

management of operational risk in the following areas:

• requirementsforappropriatesegregationofduties,including

the independent authorisation of transactions

•requirementsforthereconciliationandmonitoring

of transactions

•compliancewithregulatoryandotherlegalrequirements

•documentationofcontrolsandprocedures

•requirementsfortheperiodicassessmentofoperationalrisks

faced and the adequacy of controls and procedures to address

the risks identified

•requirementsforthereportingofoperationallossesand

proposed remedial action

•developmentofcontingencyplans

•trainingandprofessionaldevelopment

•ethicalandbusinessstandards

•riskmitigation,includinginsurancewherethisiseffective

Compliance with Group standards is supported by a programme of

periodic reviews undertaken by Internal Audit. The results of Internal

Audit reviews are discussed with the management of the business

unit to which they relate, senior management of the Group and the

Board of Directors.


3. RevenueConsolidated Company

Year ended 31st December 2012 2011 2012 2011Rs. Rs. Rs. Rs.

3.1 Summary

Gross Turnover 25,372,962,572 22,031,653,142 23,850,203,088 20,944,436,625

25,372,962,572 22,031,653,142 23,850,203,088 20,944,436,625

3.2 Revenue

Sale of Goods 21,680,140,568 19,347,252,087 21,680,140,568 19,338,972,033

Rendering of Services 3,692,822,004 2,684,401,055 2,170,062,520 1,605,464,592

25,372,962,572 22,031,653,142 23,850,203,088 20,944,436,625

4. Segment Information

4.1 Segment Products and Services

Sewing-Related Products Domestic and Industrial Sewing Machines and General Merchandise.

Consumer Electronics Televisions, Audios, VCD, DVD and Other Electronic Products.

White Goods Refrigerators, Washing Machines, Deep Freezers, Bottle Coolers, Air Conditioners and Fans.

Kitchen-Related Products Table Tops, Gas Ovens, Rice Cookers, Microwave Ovens, Electric Ovens, Grinders and Blenders.

Communications Computers, Laptops, CDMA and Cellular Phones, Smart Phones, Tablets and Dialog Satellite Dishes.

Furniture Wood and Layered Furniture, Sofa Sets and Steel Furniture.

Transportation Motor Bikes and Bicycles.

Agro Water Pumps, Paddy Threshers, Tractors

Singer Finance (Lanka) PLC Leasing, Hire Purchase and Loans

4.2 Segmental Analysis of Revenue is as Follows:Consolidated Company

2012 2011 2012 2011Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000

Sewing-Related Products 2,674,797 2,403,858 2,674,797 2,403,858

Consumer Electronics 6,028,638 6,068,647 6,028,638 6,068,647

White Goods 8,780,142 7,407,042 8,780,142 7,407,042

Kitchen-Related Products 1,693,436 1,481,274 1,693,436 1,481,274

Communications 1,738,761 1,333,349 1,738,761 1,333,349

Furniture 1,453,256 1,041,997 1,453,256 1,041,997

Transportation 616,892 453,654 616,892 453,654

Agro 864,281 754,615 864,281 754,615

Singer Finance (Lanka) PLC 1,522,759 1,087,217 – –

25,372,963 22,031,653 23,850,203 20,944,436


4.3 Segmental Analysis of Profit before Tax is as Follows:Consolidated Company

2012 2011 2012 2011Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000

Sewing-Related Products 163,744 188,133 163,744 188,133

Consumer Electronics 430,242 591,230 430,242 591,230

White Goods 477,602 583,066 477,602 583,066

Kitchen-Related Products 120,557 149,642 120,557 149,642

Communications 71,860 70,320 71,860 70,320

Furniture 80,987 71,074 80,987 71,074

Transportation 12,229 11,344 12,229 11,344

Agro 50,701 51,436 50,701 51,436

Singer Finance (Lanka) PLC 330,515 274,388 – –

Segment Result 1,738,437 1,990,663 1,407,922 1,716,245

Gain on Disposal of Other Investment – – – –

Dividend from Associates/Subsidiary 2,009 18 59,590 28,805

Gain on Dilution of Shares in Singer Finance (Lanka) PLC – – – –

Share of Loss on Equity Accounted Investees 5,778 (639) – –

1,746,225 1,990,012 1,467,512 1,745,050

4.4 There are no separately distinguishable assets and liabilities for the above segments.

5. Other IncomeConsolidated Company

2012 2011 2012 2011Rs. Rs. Rs. Rs.

Dividend Income - Quoted 18,000 18,225 57,599,991 28,804,721

- Unquoted 1,990,950 – 1,990,950 –

Gain on Disposal of Property, Plant & Equipment 1,894,295 9,561,662 964,020 9,561,662

Overdue Charges 68,530,958 41,549,697 – –

Miscellaneous Income 58,870,846 38,360,755 33,997,467 17,716,163

Service Fee Income - Singer Finance (Lanka) PLC – – 68,172,410 65,942,700

Income from Financial Services 59,240,176 45,219,623 59,240,176 45,219,623

190,545,225 134,709,962 221,965,014 167,244,869

6. Other Expenses

Depreciation on Property, Plant & Equipment (Notes 12.8 and 12.16) 209,886,975 180,032,120 199,610,570 172,207,605

Amortisation of Intangible Assets with Finite Useful Lives (Note 13.8) 18,459,349 15,933,417 16,244,811 14,352,391

228,346,324 195,965,537 215,855,381 186,559,996



2012 2011 2012 2011Rs. Rs. Rs. Rs.

7. Net Finance Cost

7.1 Finance Cost

Interest on Overdrafts and Loans 1,100,961,835 507,795,702 1,000,961,835 507,795,702

Interest on Security Deposits 53,063,436 50,596,591 53,063,436 50,596,591

Interest on Customer Deposits – – – –

Interest on Related Party Payables – 1,258,082 – 1,258,082

1,054,025,271 559,650,375 1,054,025,271 559,650,375

7.2 Finance Income

Interest Income - Related Parties 14,357,149 17,595,396 151,634,388 83,442,814

- Others 54,428,473 20,604,847 15,794,600 378,165

Unwinding Interest Income on Interest Free Employee Loans 28,633,442 23,813,376 20,317,156 17,407,772

Gain on Translation of Foreign Currency 1,640,823 11,865 1,640,823 11,865

99,059,887 62,025,484 189,386,968 101,240,616

Net Finance Cost 954,965,384 497,624,891 864,638,303 458,409,759

8. Share of Profit/(Loss) of Equity Accounted Investees - (Net of Income Tax)Consolidated

2012 2011Share of Profit/(Loss) Share of Tax Net Profit/(Loss) Net Profit/(Loss)

Rs. Rs. Rs. Rs.

Reality Lanka Ltd. 6,274,538 (498,982) 5,777,555 (638,975)

6,274,538 (496,982) 5,777,555 (638,975)

9. Profit before TaxConsolidated Company

2012 2011 2012 2010Rs. Rs. Rs. Rs.

Stated after Charging All Expenses including the Following:

Executive Directors’ Emoluments 84,878,686 63,539,518 73,466,541 54,871,469

Non-Executive Directors’ Fees 7,773,758 7,704,299 7,173,758 6,579,299

Auditors' Remuneration - Statutory Audit 1,935,000 1,850,000 1,450,000 1,300,000

- Audit-Related Services 2,095,000 925,000 1,555,000 765,000

Impairment on Trade and Other Receivables 110,907,246 137,689,500 77,097,730 119,318,202

Impairment of Inventories 27,049,717 50,096,184 27,049,717 50,096,184

Personnel Costs (Note 9.1) 2,820,748,355 2,534,018,054 2,662,575,052 2,424,414,608

Operating Lease Rentals 460,139,985 415,896,718 437,380,477 400,038,242

Donations 519,000 284,000 519,000 284,000

9.1 Personnel Costs

Staff Cost 2,518,515,330 2,298,678,924 2,376,045,279 2,198,216,933

Voluntary Retirement Scheme 12,094 2,170,919 12,094 2,170,919

Defined Benefit Plan Costs - Retiring Gratuity 75,349,772 36,562,706 70,492,710 34,686,259

Defined Contribution Plan Costs - EPF, ETF and MSPS 226,871,159 196,605,505 216,024,969 189,340,497

2,820,748,355 2,534,018,054 2,662,575,052 2,424,414,608


10. Income Tax ExpenseConsolidated Company

2012 2011 2012 2011Rs. Rs. Rs. Rs.

Current Income Tax Expense

Current Tax Expense on Ordinary Activities for the Year - Singer (Sri Lanka) PLC (Note 10.1) 547,908,605 710,091,270 474,058,222 583,564,708

(Over)/Under Provision in Respect of Previous Year 5,314,599 1,112,963 5,314,599 1,112,963

Tax on Dividend Income

WHT on Dividend Received from Singer Finance (Lanka) PLC 6,400,000 3,200,000 – –

559,623,204 714,404,234 479,372,821 584,677,671

Deferred Tax

Expense/(Income) (Note 10.2) (6,834,483) (33,223,601) (20,797,923) (11,148,594)

552,788,721 681,180,633 458,574,898 573,529,077

10.1 Reconciliation Between Current Tax Expense and the Product of Accounting ProfitConsolidated Company

2012 2011 2012 2011Rs. Rs. Rs. Rs.

Profit before Tax 1,746,225,331 1,990,012,085 1,467,512,620 1,745,050,354

Share of (Profit)/Loss of Associates (5,777,555) 638,975 – –

Aggregate Accounting Profit 1,740,447,775 1,990,651,059 1,467,512,620 1,745,050,354

Aggregate Disallowable Expenses 1,620,956,343 1,311,722,154 547,455,028 583,891,356

Aggregate Tax Deductible Expenses (1,402,578,722) (926,078,909) (262,311,628) (365,990,268)

Income Not Liable for Tax (2,008,950) (18,225) (59,590,941) (28,804,721)

1,956,816,447 2,376,276,078 1,693,065,079 1,934,146,721

Taxable Profit 1,956,816,447 2,376,276,078 1,693,065,079 1,934,146,721

Taxable Profit Tax @ 35% - (01.01.2011 - 31.03.2011) – 559,103,403 – 559,103,403

Taxable Profit Tax @ 33 1/3% - (01.01.2011 - 31.03.2011) – 120,185,516 – –

Taxable Profit Tax @ 28% - (01.04.2011 - 31.12.2011) 1,956,816,447 1,696,987,159 1,693,065,079 1,375,043,318

1,956,816,447 2,376,276,078 1,693,065,079 1,934,146,721

Income Tax at 35% – 195,686,190 – 195,686,190

Income Tax at 33 1/3% – 35,844,618 – –

Income Tax at 28% 547,908,605 475,156,405 474,058,222 385,012,129

Social Responsibility Levy – 3,404,058 – 2,866,389

Current Income Tax Expense 547,908,605 710,091,270 474,058,222 583,564,708

The Group tax expense is based on the taxable profit of each Company in the Group. Group is liable to Income Tax at 28% on taxable profit with

effect from 1st April 2011.

10.2 Deferred Tax Expense/(Income)Consolidated Company

2012 2011 2012 2011Rs. Rs. Rs. Rs.

Deferred Tax Charge/(Credit) arising due to Origination and Reversal of Temporary Differences (6,274,483) (33,223,601) (20,797,923) (11,148,594)

(6,834,483) (33,223,601) (20,797,923) (11,148,594)

10.3 Deferred Tax has been computed using the enacted tax rate of 28%.


11. Earnings Per Share11.1 Basic earnings per share is calculated by dividing the profit for the year attributable to the ordinary shareholders by the weighted average

number of ordinary shares outstanding during the year.

11.2 The following reflects the income and share data used in the basic earnings per share computations:


2012 2011 2012 2011Rs. Rs. Rs. Rs.

Amounts used as the Numerator


Profit Attributable to Ordinary Shareholders for Basic Earnings per Share 1,137,740,394 1,266,343,804 1,008,937,722 1,171,521,277

Number of Ordinary Shares Used as Denominator

Weighted Average Number of Ordinary Shares in Issue Applicable to Basic Earnings per Share 125,209,610 125,209,610 125,209,610 125,209,610

Basic Earnings per Share (Rs.) 9.09 10.11 8.06 9.36

12. Property, Plant & Equipment 12.1 Gross Carrying Amounts - Consolidated

Balance Additions/ Disposals/ Balance Additions/ Offset of Increase/ Disposals/ Balanceas at Transfers Transfers as at Transfers Accumulated (Decrease) Transfers as at

Depreciation in Revaluation01.01.2011 31.12.2011 on Revaluation 31.12.2012


At Cost

Motor Vehicles 182,745,633 110,139,619 33,081,294 259,803,958 43,215,843 – – 30,790,976 272,228,824

Furniture & Equipment 179,927,626 58,049,477 48,048,353 189,928,750 23,874,404 – – 188,141 213,615,014

Plant & Machinery 169,154,722 10,590,462 1,925,850 177,819,334 22,116,695 – – 12,000,000 187,936,029

Culinary School

Equipment 75,814 – – 75,814 – – – – 75,814

E.D.P. Equipment 267,040,150 46,294,252 – 313,334,402 49,630,261 – – 20,699,832 342,264,832

Shop Furniture 98,492,050 35,189,357 18,624,013 115,057,394 168,334,993 – – 12,373,828 271,018,559

Shop Equipment 196,774,560 27,559,095 36,299,373 188,034,282 135,674,355 – – 21,361,792 302,346,845

Improvements on Leasehold Premises 402,438,439 56,163,945 144,908,358 313,694,026 139,079,602 – – 24,517,812 428,255,816

1,496,648,994 343,986,207 282,887,241 1,557,747,959 581,926,153 – – 121,932,380 2,017,741,733

At Valuation

Freehold Land 512,436,500 – – 512,436,500 – – 71,261,250 – 583,697,750

Freehold Buildings 547,859,318 503,300 38,254 548,400,872 1,521,184 (37,544,802) 77,340,800 – 589,718,054

1,060,295,818 503,300 38,254 1,060,837,372 1,521,184 (37,544,802) 148,602,050 – 1,173,415,804

Total Gross Carrying Amount 2,556,944,812 344,489,507 282,925,495 2,618,585,331 583,447,337 (37,544,802) 148,602,050 121,932,380 3,191,157,537


12.2 Depreciation and Impairment Losses

Balance Charge for the Disposals/ Balance Charge for the Adjustment on Disposals/ Balanceas at Year/ Transfers as at Year/Transfers Revaluation Transfers as at

01.01.2011 Transfer 31.12.2011 31.12.2012Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs.

Freehold Buildings – 18,116,948 (38,254) 18,155,202 19,389,600 (37,544,802) – –

Motor Vehicles 98,993,996 23,183,272 22,578,941 99,598,327 17,138,475 – 15,141,502 101,595,300

Furniture & Equipment 112,040,069 16,905,626 48,048,353 80,897,342 20,427,005 – 90,090 101,234,257

Plant & Machinery 99,149,920 16,212,262 1,925,850 113,436,332 12,053,492 – 12,000,000 113,489,824

Culinary School Equipment 75,814 – – 75,814 – – – 75,814

E.D.P. Equipment 202,511,114 27,737,408 – 230,248,522 31,916,868 – – 262,165,390

Shop Furniture 65,524,412 13,890,499 18,624,013 60,790,898 34,358,005 – 11,666,095 83,482,808

Shop Equipment 137,258,089 24,899,473 36,299,373 125,858,189 36,287,849 – 20,065,154 142,080,884

Improvements on Leasehold Premises 277,151,458 66,174,901 144,908,259 198,418,100 61,586,251 – 24,178,758 235,825,593

Total Depreciation and Impairment Loss 992,704,872 207,120,389 272,346,535 927,478,726 233,157,545 (37,544,802) 83,141,599 1,039,949,870

12.3 Carrying AmountsGroup

2012 2011 1st January 2011Rs. Rs. Rs.

At Cost 940,247,062 630,269,233 503,944,121

At Valuation 1,210,960,606 1,060,837,372 1,060,295,818

Total Carrying Amount of Property, Plant & Equipment 2,151,207,667 1,691,106,605 1,564,239,939

12.4 During the financial year, the Group's additions to Property, Plant & Equipment is Rs. 583,447,337/- which includes net transfer of

Rs. 22,138/-. The net acquisition of Group aggregate to the value of Rs. 583,425,199/- (2011 - Rs. 344,489,507/-) on cash basis.

12.5 Property, Plant & Equipment includes fully-depreciated assets having a gross carrying amount of Rs. 221,816,242/-

(2011 - Rs. 223,093,320/-).

12.6 Lands & buildings were revalued during the financial year 2012 by Messrs Chulananda Wellappili, an Independent Valuer. The results of

such revaluation were incorporated in these Financial Statements from its effective date which is 31st December 2012. Such assets were valued

on an open market value for existing use basis. The surplus arising from the revaluation Rs. 148,602,050/- was transferred to a revaluation

reserve.

12.7 The carrying amount of the revalued assets that would have been included in the Financial Statements had the assets been carried at cost

would be as follows:

Cost Accumulated Depreciation

Carring Amount

Rs. Rs. Rs.

Land 103,338,782 – 103,338,782

Building 275,339,177 93,955,486 181,383,691

Total Carrying Amount 378,677,959 93,955,486 284,722,473

12.8 Depreciation charge for the year is included in the following line items in the Statement of Comprehensive Income.


Cost of Sales 23,270,570 27,088,269 15,489,237

Other Expenses Excluding Amortisation of Software and Externally Acquired Intangible Assets 209,886,975 180,032,120 160,319,856

233,157,545 207,120,389 175,809,093


12.9 Gross Carrying Amounts - Company

Balance Additions/ Disposals/ Balance Additions/ Offset of Increase/ Disposals/ Balanceas at Transfers Transfers as at Transfers Accumulated (Decrease) Transfers as at

01.01.2011 31.12.2011 Depreciation in Revaluation 31.12.2012on Revaluation


At Cost

Freehold Buildings

Motor Vehicles 178,944,606 110,139,619 33,081,294 256,002,931 36,983,700 – 26,989,950 265,996,681


Plant & Machinery 169,154,722 10,590,462 1,925,850 177,819,334 22,116,695 – 12,000,000 187,936,029


E.D.P. Equipment 256,841,611 43,787,434 – 300,629,045 46,415,400 – 20,699,832 326,344,613

Shop Furniture 98,492,050 35,189,357 18,624,013 115,057,394 168,334,993 – 12,373,828 271,018,559

Shop Equipment 196,774,560 27,559,095 36,299,373 188,034,282 135,674,355 – 21,361,792 302,346,845


1,446,199,436 332,842,988 282,887,241 1,496,155,183 555,714,036 – 117,966,724 1,933,902,495

At Valuation

Freehold Land 512,436,500 – – 512,436,500 – – 71,261,250 – 583,697,750

Freehold Buildings 547,859,318 503,300 (38,254) 548,400,872 1,521,184 (37,544,802) 77,340,800 – 589,718,054

1,060,295,818 503,300 (38,254) 1,060,837,372 1,521,184 (37,544,802) 148,602,050 – 1,173,415,804

Total Gross Carrying Amount 2,506,495,254 333,346,288 282,848,987 2,556,992,555 557,235,220 (37,544,802) 148,602,050 117,966,724 3,107,318,299

12.10 Depreciation and Impairment Losses

Balance Charge Disposals/ Balance Charge Adjustment Disposals/ Balanceas at for the year/ Transfers as at for the year/ on Revaluation Transfers as at

01.01.2011 Transfers 31.12.2011 Transfers 31.12.2012Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs.

Freehold Buildings – 18,116,948 (38,254) 18,155,202 19,389,600 (37,544,802) – –

Motor Vehicles 98,213,551 22,823,067 22,578,941 98,457,677 16,587,454 – 13,880,784 101,164,347


Plant & Machinery 99,149,919 16,212,262 1,925,850 113,436,331 12,053,492 – 12,000,000 113,489,823


E.D.P. Equipment 196,393,572 26,074,357 – 222,467,929 29,941,077 – – 252,409,006

Shop Furniture 65,524,412 13,890,499 18,624,013 60,790,898 34,358,005 – 11,666,095 83,482,808

Shop Equipment 137,258,090 24,899,473 36,299,373 125,858,190 36,287,849 – 20,065,154 142,080,885


Total Depreciation and Impairment Losses 970,442,175 199,295,874 272,346,535 897,391,514 222,881,140 (37,544,802) 81,792,163 1,000,935,690

12.11 Carrying Amounts


At Cost 895,422,003 598,763,669 475,757,259

At Valuation 1,210,960,606 1,060,837,372 1,060,295,818

Total Carrying Amount of Property, Plant & Equipment 2,106,382,609 1,659,601,041 1,536,053,077

12.12 During the financial year, the Company additions to Property, Plant & Equipment is Rs. 557,235,220/- which includes net transfer of

Rs. 22,138/-. The net acquisition of Company aggregate to the value of Rs. 557,213,082/- (2011 - Rs. 333,346,288/-) on cash basis.

12.13 Property, Plant & Equipment include fully-depreciated assets having a gross carrying amount of Rs. 206,589,170/-

(2011 - Rs. 216,764,418/-).


12.14 Lands & buildings were revalued during the financial year 2012 by Messrs Chulananda Wellappili, an Independent Valuer. The results of such

revaluation were incorporated in these Financial Statements from its effective date which is 31st December 2012. Such assets were valued on an

open market value for existing use basis. The surplus arising from the revaluation was Rs. 148,602,050/- transferred to a revaluation reserve.

12.15 The carrying amount of the revalued assets that would have been included in the Financial Statements had the assets been carried at cost

would be as follows:

Cost Accumulated Depreciation

Carrying Amount

Rs. Rs. Rs.

Land 103,338,782 – 103,338,782

Building 275,339,177 93,955,486 181,383,691

Total Carrying Amount 378,677,959 93,955,486 284,722,473

12.16 Depreciation charge for the year is included in the following line items in the Statement of Comprehensive Income:


Cost of Sales 23,270,570 27,088,269 15,489,236

Other Expenses Excluding Amortisation of Software and Externally Acquired Intangible Assets 199,610,570 172,207,605 154,168,063

222,881,140 199,295,874 169,657,299

12.17 Information on the Freehold Land & Buildings of the Company

LocationExtent

(Perches)Buildings

(Square Feet)

Cost or Revaluation of

Land Rs. ’000


BuildingsRs. ’000

Total ValueRs. ’000

Accumulated Depreciation

Rs. ’000 Net Book Value

Rs. ’000

Net BookValue as a

% of Revalued Amount

Ambalantota No. 46, Main Street, Ambalantota 6.6 1,885 6,600,000 4,382,625 10,982,625 849,102 10,133,523 92

Balangoda No. 60, Ratnapura Road, Balangoda 6.2 2,080 35,740,000 25,823,438 61,563,438 1,637,989 59,925,449 97

Bandarawela No. 120, Main Street, Bandarawela 3.69 1,535 5,535,000 4,712,875 10,247,875 1,093,783 9,154,092 89

Borella No. 33, D.S. Senanayaka Mawatha, Borella 4.64 1,700 2,552,000 6,120,000 8,672,000 3,634,659 5,037,341 58

Chilaw No. 04, Bazaar Street, Chilaw 13.05 4,120 15,660,000 11,865,600 27,525,600 2,983,967 24,541,633 89

ColpettyNo. 143, Galle Road, Colombo 03 3.35 1,560 16,750,000 5,760,000 22,510,000 510,164 21,999,836 98

Eheliyagoda No. 159, Ratnapura Road, Eheliyagoda 5.73 1,660 5,730,000 4,938,500 10,668,500 1,665,105 9,003,395 84

Galle No. 176, Main Street, Galle 2.84 2,250 7,100,000 9,000,000 16,100,000 1,186,796 14,913,204 93

Gampaha No. 103, Colombo Road, Gampaha 19.45 7,870 35,740,000 25,823,438 61,563,438 5,550,439 56,012,999 91

Hikkaduwa No. 263, Galle Road, Hikkaduwa 8.74 2,400 10,488,000 6,630,000 17,118,000 1,577,980 15,540,020 91

Hingurakgoda Main Road, Hingurakgoda 15.25 2,145 15,250,000 6,113,250 21,363,250 2,315,739 19,047,511 89

Kadawatha Kandy Road, Kadawatha 3.8 1,150 5,500,000 3,176,875 8,676,875 856,355 7,820,520 90

Kandy - Mega No. 215, Sirimavo Bandaranaike Mawatha, Kandy 9.55 12,840 23,602,500 40,862,800 64,465,300 10,088,128 54,377,172 84

Katugastota No. 07, Madawala Road, Katugastota 4.875 535 5,512,500 – 5,512,500 – 5,512,500 100

Kirindiwela No. 83, Gampaha Road, Kirindiwela 8.1 2,940 9,720,000 8,489,250 18,209,250 1,697,059 16,512,191 91


LocationExtent

(Perches)Buildings

(Square Feet)


Land Rs. ’000


BuildingsRs. ’000

Total ValueRs. ’000

Accumulated Depreciation

Rs. ’000 Net Book Value

Rs. ’000

Net BookValue as a

% of Revalued Amount

Kurunegala No. 28A, Bodhiraja Mawatha, Kurunegala 7.66 2,230 15,320,000 5,766,250 21,086,250 1,294,906 19,791,344 94

Maharagama No. 71/A, High Level Road, Maharagama 6.2 2,700 17,050,000 8,977,500 26,027,500 1,524,116 24,503,384 94

Matara Anagarika Dharmapala Mawatha, Matara 10 3,520 21,000,000 12,320,000 33,320,000 2,491,755 30,828,245 93

Middeniya Katuwana Road, Middeniya 8.25 2,670 8,250,000 6,728,400 14,978,400 1,557,432 13,420,968 90

Mount Lavinia Galle Road, Mount Lavinia 7.5 1,900 22,500,000 6,234,375 28,734,375 1,306,722 27,427,653 95

Mount Lavinia - Mega Galle Road, Mount Lavinia 20 15,840 60,027,500 63,504,478 123,531,978 13,015,118 110,516,860 89

Nawalapitiya Kotmale Road, Nawalapitiya 5.25 2,760 8,225,000 6,053,000 14,278,000 1,838,591 12,439,409 87

Negombo Greens Road, Negombo 6 2,040 15,000,000 5,992,000 20,992,000 1,379,946 19,612,054 93

Nuwara-Eliya No. 80, Kandy Street, Nuwara-Eliya 4.65 1,700 11,625,000 5,259,375 16,884,375 1,203,456 15,680,919 93

Panadura No. 348, Galle Road, Panadura 6.15 2,940 11,070,000 8,731,800 19,801,800 1,900,978 17,900,822 90

Piliyandala Gonamaditta Road, Piliyandala 1,151.95 116,410 131,600,250 268,368,350 399,968,600 42,700,275 357,268,325 89

Pussellawa No. 515B, Nuwara-Eliya Road, Pussellawa 12.43 3,295 12,430,000 8,649,375 21,079,375 2,438,423 18,640,952 88

Ratnapura No. 122, Colombo Road, Ratnapura 5.8 2,735 8,700,000 7,384,500 16,084,500 1,986,618 14,097,882 88

Tangalle No. 99, Matara Road, Tangalle 4.6 1,285 8,050,000 1,606,250 9,656,250 77,280 9,578,970 99

Trincomalee North Coast Road, Trincomalee 12.12 2.184 8,370,000 2,850,000 11,220,000 310,263 10,909,737 97

Wellawatta No. 579, Galle Road, Wellawatta, Colombo 06 4.6 2,700 23,000,000 7,593,750 30,593,750 2,187,996 28,405,754 93

583,697,750 589,718,054 1,173,415,804 112,861,140 1,060,554,664

13. Intangible AssetsConsolidated Company

2012 2011 1st January 2011 2012 2011 1st January 2011Rs. Rs. Rs. Rs. Rs. Rs.

13.1 Trade Marks

Summary

Cost

As at the beginning of the Year 93,512,500 93,512,500 93,512,500 93,512,500 93,512,500 93,512,500

As at the end of the Year 93,512,500 93,512,500 93,512,500 93,512,500 93,512,500 93,512,500

Less: Accumulated Impairment Loss – – – – – –

Net Carrying Amount (Notes 13.5 & 13.6) 93,512,500 93,512,500 93,512,500 93,512,500 93,512,500 93,512,500


13.2 SoftwareConsolidated Company


Summary

Cost


Transferred from Property, Plant & Equipment 20,699,832 – – 20,699,832 – –

Acquired/Incurred during the Year (Note 13.7) 19,332,048 4,677,083 13,600,416 7,482,169 – 10,968,434


Amortisation


Amortisation Charge for the Year (Note 13.8) 12,059,353 9,533,421 7,751,659 9,844,815 7,952,395 6,568,711


Carrying Amount



13.3 Other Intangible Assets Externally Acquired

Cost


Acquired/Incurred during the Year – – – – – –

Capitalised during the Year – – – – – –


Amortisation


Amortisation Charge for the Year (Note 13.8) 6,399,996 6,399,996 6,399,993 6,399,996 6,399,996 6,399,993


Carrying Amount



Total Net Carrying Amount 189,255,900 167,683,369 178,939,703 166,953,577 155,016,387 169,368,778

13.4 Sisil Trademark

The Company had acquired the ‘SISIL’ trademark in December 2000, amounting to Rs. 55 million. The management is of the opinion that the

aforementioned trademark has an indefinite useful life as their associated brand awareness and recognition has existed over 30 years and the

Company intends to utilise the said trademark for the foreseeable future. There are no legal, regulatory, contractual, competitive, economic

or other factors that may limit its useful life and accordingly, the carrying amount of this trademark is determined after testing for impairment

annually. Following assumptions are made to test for any impairment as at 31st December 2012:

Annual Sales Growth for the Next Five Years 10%

Gross Margin 24%

Discount Rate 14%

Indefinite Growth Rate after Year 2017 2%


13.5 UNIC Trademark

The Company had acquired the ‘UNIC’ trademark in 2006, amounting to Rs. 38,512,500/-. This asset is now carried at cost subject to annual

impairment test and carrying amount as at 31st December 2012 is Rs. 38,512,500/-. This trademark is also considered to have an indefinite

useful life due to the factors mentioned in the preceding paragraph and accordingly, the carrying amount of this trademark is determined after

testing for impairment annually. Following assumptions are made to test for impairment as at 31st December 2012:

Annual Sales Growth for the Next Five Years

Year 2012 10%

Year 2013 10%

Year 2014 & 2015 10%

Gross Margin 28%

Discount Rate 14%

Indefinite Growth Rate after Year 2017 2%

13.6 The Company took over the showrooms, retail operation of the Hayleys Electronic Retail Ltd. from 2nd January 2008 and agencies of

Phillips and Kenwood from Hayleys Electronic Retail Ltd. for Rs. 32 million. The entire purchase consideration is treated as Goodwill, and is

amortised over the determined useful life of 5 years commencing from the period beginning 1st January 2009.

13.7 The Company and subsidiary have acquired the software which is categorised as Intangible Assets, amounting to Rs. 7,482,169 and

Rs. 11,849,879/-. It is amortised over 5 years, commencing from the date of effective use.



13.8 Amortisation Charge for the Year

Amortisation of Software 12,059,353 9,533,421 7,751,659 9,844,815 7,952,395 6,568,711

Amortisation of Other Intangible Assets Externally Acquired 6,399,996 6,399,996 6,399,993 6,399,996 6,399,993 6,399,993

18,459,349 15,933,417 14,151,652 16,244,811 14,352,388 12,968,704

14. Investment in Subsidiary - Company

Carrying Market Carrying Carrying Value Value Value Value

Country of No. of Shares Holding % 31st Dec. 31st Dec. 31st Dec. 1st January 31st Dec. Holding % 31st Dec. Holding % 1st Jan. 1st Jan. 2012 2012 2011 2011

Incorporation 2012 2012 2011 2011 2011 2011 Rs. Rs Rs.


Investment on 1st January Sri Lanka 80,000,000 80.4 80,000,000 75 80,000,000 75 400,000,000 1,821,155,440 400,000,000 400,000,000

Investments Made during the Year 52,931,054 – – 582,241,596 – – –

Carrying Amount as at 31st December 132,931,054 80,000,000 80,000,000 982,241,596 1,821,155,440 400,000,000 400,000,000

14.1 Singer Finance (Lanka) PLC started trading its shares on 17th January 2011 at Colombo Stock Exchange after allotting on

22nd December 2010. In the absence of active market trading as at 31st December 2010, market value of Singer Finance (Lanka) PLC is not

available. Hence, Directors valued Singer Finance (Lanka) PLC at its Net Assets Value as at 31st December 2010 of Rs. 897 million.


15. Investments in Equity Accounted Investees15.1 Investment in Equity Accounted Investees - Consolidated

Share of ConsolidatedHolding Consolidated Profit/(Loss) Consolidated Carrying

% Carrying Net of Dividends Carrying Amount1st January Amount Received for Amount 1st January

2012 2011 2011 2012 the Year 2011 2011Rs. Rs. Rs. Rs.

Non-Quoted

Reality Lanka Ltd. (Note 15.2) 40 40 40 52,663,202 5,777,535 46,885,646 23,524,621

Telshan Network (Pvt) Ltd. 23.56 23.56 23.56 – – – –

Total Non-Quoted Investments in Equity Accounted Investees – – – 52,663,202 – 46,885,646 23,524,621

Net Carrying Amount of Investments in Equity Accounted Investees 52,663,202 – 46,885,646 23,524,621

Consolidated

2012 20111st January

2011Rs. Rs. Rs.

15.2 Share of Equity-Accounted Investees Retained Profit

Reality Lanka Ltd.

Balance Brought Forward (1,114,354) (475,379) 541,304

Current Year Share of Profit/(Loss) - Net of Tax 5,777,555 (638,975) (1,016,683)

4,663,202 (1,114,354) (475,379)

Total Share of Equity-Accounted Investees Retained Profits 4,663,202 (1,114,354) (475,379)

Cost of Equity-Accounted Investees (Note 15.3) 48,000,000 48,000,000 24,000,000

Total Carrying Amount of Investment in Equity-Accounted Investees 52,663,202 46,885,646 23,524,621

15.3 Movement of Investment - Cost

Consolidated Increase/ Consolidated Increase/ ConsolidatedBalance as at (Decrease) Balance as at (Decrease) Balance as at01.01.2011 in Investments 31.12.2011 in Investments 31.12.2012

Rs. Rs. Rs. Rs. Rs.

Reality Lanka Ltd. 24,000,000 24,000,000 48,000,000 – 48,000,000

Telshan Network (Pvt) Ltd. (Note 15.6) – – –

24,000,000 24,000,000 48,000,000 – 48,000,000

15.4 Summarised Financial Information of Equity-Accounted Investees

In Thousands of Rs. OwnershipCurrent Assets

Non-Current Assets

Total Assets

Current Liabilities

Non-CurrentLiabilities

Total Liabilities

2010

Reality Lanka Ltd. (Associate) 40% 9,106 178,785 187,891 129,080 – 129,080

2011


2012



15.5 Investment in Equity-Accounted Investees - Company

Carrying Carrying CarryingNo. of Shares Amount Amount Amount

31st December 31st December 1st January 31st December 31st December 1st January 2012 2011 2011 2012 2011 2011

Rs. Rs. Rs.

Non-Quoted

Telshan Network (Pvt) Ltd. (Note 15.6) 2,000,000 2,000,000 2,000,000 – – –

Reality Lanka Ltd. 4,800,000 4,800,000 2,400,000 48,000,000 48,000,000 24,000,000

Total Investments in Non-Quoted Associate Equity Securities 48,000,000 48,000,000 24,000,000

Net Carrying Amount of Investment in Equity-Accounted Investees 48,000,000 48,000,000 24,000,000

15.6 Investment in Telshan Network (Pvt) Ltd. amounting to Rs. 20,000,000/- had been written off since it carries negative net assets position.

16. Other Long-Term Investments

16.1 Consolidated

Carrying Carrying CarryingNo. of Shares Value Value Value


Rs. Rs. Rs.

(a) Non-Quoted

Equity Investment Lanka Ltd. 1,665,000 1,665,000 1,665,000 17,020,000 17,020,000 17,020,000

Credit Information Bureau of Sri Lanka 100 100 100 41,300 41,300 41,300

Total Investments in Non-Quoted Equity Securities – – 17,061,300 17,061,300 17,061,300

Total Net Carrying Amount of Other Investments - Non-Current 17,061,300 17,061,300 17,061,300

16.2 Company Investments in Equity Securities - Non-Current

Carrying Carrying CarryingNo. of Shares Value Value Value


Rs. Rs. Rs.

(a) Non-Quoted

Equity Investment Lanka Ltd. 1,665,000 1,665,000 1,665,000 17,020,000 17,020,000 17,020,000

Total Investments in Non-Quoted Equity Securities – – – 17,020,000 17,020,000 17,020,000

Total Net Carrying Amount of Other Investments - Non-Current 17,020,000 17,020,000 17,020,000


17. InventoriesConsolidated Company


Raw Materials 152,256,536 144,251,095 104,156,594 152,256,536 144,251,095 104,156,594

Work-in-Progress 37,573,235 32,295,354 23,315,632 37,573,235 32,295,354 23,315,632

Finished Goods 3,765,359,229 3,033,957,740 1,824,856,499 3,765,359,229 3,017,086,260 1,824,856,499

Supplies and Parts 287,717,482 237,179,190 224,440,896 287,717,482 237,179,190 224,440,896

Goods-in-Transit 230,034,398 175,726,139 99,727,961 230,034,398 175,726,139 99,727,961

4,472,940,881 3,623,409,518 2,276,497,582 4,472,940,881 3,606,538,038 2,276,497,582

Impairment of Inventories (225,802,825) (198,753,108) (148,656,924) (225,802,825) (198,753,108) (148,656,924)

Consignment Inventories (21,063,811) (21,740,062) (12,376,604) (21,063,811) (21,740,062) (12,376,604)

Total Inventories 4,226,074,244 3,402,916,348 2,115,464,054 4,226,074,244 3,386,044,868 2,115,464,054

Raw materials, consumable and change in work-in-progress and finished goods are recognised as cost of sales by the Group and Company to the

amount of Rs. 1,128,004,562/- (2011 - Rs. 951,600,386/-) and Rs. 1,128,004,562/- (2011 - Rs. 951,600,386/-) respectively.

Company inventories amounting to Rs. 23,925,348/- (2011 - Rs. 13,413,915/-) were written-off against the provision during the year.

18. Loans Due from Related PartiesConsolidated Company

2012 2011 1st January 2011 2012 2011 1st January 2011Relationship Rs. Rs. Rs. Rs. Rs. Rs.

Regnis (Lanka) PLC Affiliate Company – – 70,000,000 – – 70,000,000

Reality Lanka Ltd. Associate Company 73,634,631 73,634,631 102,217,767 73,634,631 73,634,631 102,217,767

Singer Industries (Ceylon) PLC Affiliate Company – – 30,000,000 – – 30,000,000

Regnis Appliances (Lanka) Ltd. Affiliate Company 20,000,000 100,000,000 – 20,000,000 100,000,000 –

Singer Finance (Lanka) PLC Subsidiary – – – 1,398,419,204 365,871,233 409,192,424

93,634,631 173,634,631 202,217,767 1,492,053,836 539,505,864 611,410,191

18.1 The above loans are recoverable within one year from the Balance Sheet date. Interest is charged at the rate of 1% above the Company’s effective rate. The aforesaid loans are not secured.

19. Trade and Other Receivables19.1 Non-Current



Hire Debtors 2,585,598,380 2,570,571,457 1,909,741,950 893,564,538 898,024,896 686,833,953

Less: Deferred Profit on Hire Sales (501,468,720) (463,477,667) (353,520,847) (153,693,101) (158,950,407) (133,932,621)

2,084,129,660 2,107,093,790 1,556,221,103 739,871,437 739,074,489 552,901,332

Lease Rental Receivables

Gross Instalment in Lease 2,935,254,913 1,696,342,529 404,145,149 – – –

Rental Received in Advance (1,217,630) (806,322) (1,429,770) – – –

2,934,037,283 1,695,536,207 402,715,379 – – –

Less: Unearned Income (669,059,898) (348,027,794) (75,136,106) – – –

2,264,977,385 1,347,508,413 327,579,273 – – –

Loan Debtors

Consumer and Personal Loans 144,423,037 308,581,917 178,055,108 – – –

Rental Received in Advance – (10,705) (138,270) – – –

Less: Unearned Loan Interest Income (29,853,845) (46,542,948) (20,778,524) – – –

114,569,192 262,028,264 157,138,314 – – –

Other Receivables 399,477,579 322,655,334 344,221,130 399,477,579 322,655,334 344,221,130

Loans to Employees (Note 19.3) 181,636,427 178,798,607 123,181,296 156,133,970 161,030,239 116,604,689

581,114,006 501,453,941 467,402,425 555,611,549 483,685,573 460,825,819

5,044,790,241 4,218,084,408 2,508,341,116 1,295,482,986 1,222,760,062 1,013,727,151


19.2 CurrentConsolidated Company


Hire Debtors 5,197,132,996 4,254,750,889 3,207,601,821 3,960,224,114 3,154,888,081 2,306,903,875

Rental Received in Advance (212,222) (230,500) (440,561) – – –

Less: Deferred Profit on Hire Sales (1,096,657,890) (983,287,919) (681,024,292) (704,338,541) (637,421,409) (392,573,796)

Provision for Impairment (49,344,980) (48,133,225) (34,127,964) (44,736,495) (43,792,581) (26,448,014)

4,051,517,904 3,223,099,245 2,492,009,003 3,211,149,078 2,473,674,091 1,887,882,065

Lease Rental Receivables

Gross Instalment in Lease 1,717,420,103 905,609,460 335,953,903 – – –

Less: Unearned Income (658,628,623) (337,116,117) (103,526,578) – – –

Provision for Impairment (13,280,747) (2,595,288) (7,285,731) – – –

1,045,510,733 565,898,055 225,141,594 – – –

Loan Debtors

Consumer and Personal Loans 1,137,751,935 1,298,346,605 1,567,955,974 – – –

Less: Unearned Loan Interest Income (202,076,672) (200,017,493) (255,150,429) – – –

FD Loans 57,035,390 50,760,571 45,548,790 – – –

Net Receivable 992,710,653 1,149,089,683 1,358,354,335 – – –

Less: Provision for Impairment (19,492,549) (20,318,047) (18,020,195) – –

973,218,104 1,128,771,636 1,340,334,140 – – –

Other Debtors

Trade Receivables 1,220,235,923 1,142,264,500 718,285,506 1,220,235,923 1,142,264,500 718,285,506


Advance and Other Receivables 1,074,749,257 754,461,604 532,152,889 947,449,038 617,789,318 458,640,380


Shipping Guarantees 3,237,255 – 4,359,274 3,237,255 – 4,359,274

Prepayments 123,341,013 188,994,052 338,478,313 70,723,261 163,429,585 331,257,829

Interest Receivable from Reality Lanka Ltd. – – 17,837,118 – – 17,837,118

Loans to Employees (Note 19.3) 126,058,079 91,677,719 96,017,269 119,059,935 77,585,188 76,310,506

2,285,406,853 1,976,427,399 1,404,559,652 2,117,868,307 1,816,581,516 1,320,823,520

8,355,653,594 6,894,196,335 5,462,044,388 5,329,017,385 4,290,255,607 3,208,705,585

19.3 Loans to Company Employees Consolidated Company


Movement

Balance as at the beginning of the Year 270,476,326 219,198,565 198,763,363 238,615,427 192,915,195 189,054,059

Loans Granted during the Year 145,772,900 136,424,500 98,514,045 118,269,900 120,664,500 69,961,000

Less: Repayments (108,554,720) (85,146,739) (78,078,843) (81,691,422) (74,964,268) (66,099,864)

Balance as at the end of the Year 307,694,506 270,476,326 219,198,565 275,193,905 238,615,427 192,915,195

Due within One Year 126,058,079 91,677,719 96,017,269 119,059,935 77,585,188 76,310,506

Due after One Year 181,636,427 178,798,607 123,181,296 156,133,970 161,030,239 116,604,689

19.4 Maturity Analysis of Lease and Loans

Less than 3-12 1-3 3-5 Over Total 3 Months Months Years Years 5 Years 2012

Rs. Rs. Rs. Rs. Rs. Rs.

Lease Rental Receivables 273,375,408 772,135,325 1,806,336,756 458,293,039 347,590 3,310,488,116

Loans 392,567,003 580,650,102 103,165,654 9,925,209 1,478,330 1,087,786,298


20. Amounts Due from Related Parties Consolidated Company


20.1 Trade

Singer Finance (Lanka) PLC Subsidiary – – – 4,182,602 561,986,814 947,126,673

Regnis Appliances (Pvt) Ltd. Affiliate Company 127,001,606 1,140,930 – 127,001,606 1,140,930 –

Singer Asia Sourcing Ltd. Affiliate Company 7,396,498 6,845,359 6,723,621 7,396,498 6,845,359 6,723,621

134,398,104 7,986,289 6,723,621 138,580,705 569,973,103 953,850,294

20.2 Non-Trade

Singer Industries (Ceylon) PLC Affiliate Company – 17,375,371 21,987,873 – 17,375,371 21,987,873

Regnis (Lanka) PLC Affiliate Company 18,686,144 6,164,151 7,568,370 18,686,144 6,164,151 7,568,370

Regnis Appliances (Lanka)

Limited Affiliate Company 494,549 – – 494,549 – –

19,180,693 23,539,522 29,556,243 19,180,693 23,539,522 29,556,243

21. Marketable SecuritiesConsolidated Company


Investment in Repurchase Agreement 318,719,907 290,312,617 410,551,810 – – –

318,719,907 290,312,617 410,551,810 – – –

22. Cash and Cash EquivalentsComponents of Cash and Cash Equivalents

22.1 Favourable Cash and Cash Equivalent Balances

Cash and Bank Balances 615,316,097 372,302,709 250,573,958 424,276,574 364,735,727 200,402,845

22.2 Unfavourable Cash and Cash Equivalent Balances

Bank Overdrafts (Notes 27.1 and 27.6) (663,514,715) (674,864,338) (457,771,513) (631,580,202) (546,711,851) (457,771,513)

Total Cash and Cash Equivalents for the Purpose of Cash Flow Statement (48,198,618) (302,561,629) (207,197,555) (207,303,628) (181,976,124) (257,368,668)

23. Stated Capital23.1 Issued and Fully Paid

At the Issued for Issued for At the Issued for Issued for At the beginning Cash during Non-Cash beginning Cash during Non-Cash end of

of the Year the Year Consideration of the Year the Year Consideration the Year 01.01.2011 31.12.2011 31.12.2012

Number Number Number Number Number Number Number

Number of Shares - Ordinary Shares 62,604,805 – 62,604,805 125,209,610 – – 125,209,610

62,604,805 – 62,604,805 125,209,610 – – 125,209,610

Rs. Rs. Rs. Rs. Rs. Rs. Rs.

Rupees - Ordinary Shares 626,048,050 – – 626,048,050 – – 626,048,050

626,048,050 – – 626,048,050 – – 626,048,050

23.2 At the Extraordinary General Meeting held on 31st March 2011, the shareholders approved a subdivision of shares on the basis of one

into one. Its issued shares were 62,604,805 and post subdivision it has increased to 125,209,610. This has not altered the Stated Capital of the

Company which remains at Rs. 626,048,050/-.


23.3 Rights, Preference and Restrictions of Classes of Capital

The holders of ordinary shares are entitled to receive dividend as declared from time to time and are entitled to one vote per share at a meeting

of the Company.

23.4 Shares held by Group Companies

The shares of the Company held by the Group Companies are as follows:

2012 2011 1st January 2011Number Number Number

Singer (Sri Lanka) B.V. 107,812,850 107,812,850 52,252,125

Singer Industries (Ceylon) PLC – – 1,050,700

24. Capital ReservesConsolidated Company


(a) Revaluation Reserve

Revaluation Reserve (Note 24.1) 773,312,374 655,453,887 664,542,029 773,312,371 655,453,887 664,542,029

773,312,374 655,453,887 664,542,029 773,312,371 655,453,887 664,542,029

24.1 Revaluation Reserve


Revaluation Surplus during the Year 148,602,050 – 359,796,766 148,602,050 – 359,796,766

Deferred Tax on Revaluation Surplus (21,655,424) – (99,339,454) (21,655,424) – (99,339,454)

Realisation on Revaluation Surplus (12,622,416) (12,622,419) – (12,622,416) (12,622,419) –

Deferred Tax Effect on Transfer of

Revaluation Surplus 3,534,276 3,534,277 – 3,534,276 3,534,277 –


The revaluation reserve relates to revaluation of freehold land and buildings which represents the fair value of the land and buildings as at the

date of revaluation.

25. Statutory ReservesConsolidated Company


(a) Reserve Fund

Reserve Fund (Note 25.1) 27,628,118 16,350,118 10,748,118 – – –

27,628,118 16,350,118 10,748,118 – – –

The balance in the reserve fund will be used only for the purposes specified in the Central Bank Direction No. 1 of 2003.

(b) Investment Fund

Investment Fund (Note 25.2) 50,797,000 28,057,705 – – – –

50,797,000 28,057,705 – – – –

78,425,118 44,407,823 10,748,118 – – –

The Subsidiary Company, Singer Finance (Lanka) PLC is required to transfer 8% of the profits calculated for the payment of Value Added Tax

(VAT) on financial services to a fund identified as a ‘Investment Fund Account’ as per the proposal made in the Government Budget 2011.

The guidelines has also been issued by the Central Bank of Sri Lanka on utilisation of funds in this account.




25.1 Reserve Fund

Balance as at the beginning of the Year 16,350,118 10,748,118 8,042,189 – – –

Transfer of Surplus during the Year 11,278,000 5,602,000 2,705,929 – – –

Balance as at the end of the Year 27,628,118 16,350,118 10,748,118 – – –

25.2 Investment Fund

Balance as at the beginning of the Year 28,057,705 – – – – –

Transfers during the Year 22,739,295 28,057,705 – – – –

Balance as at the end of the Year 50,797,000 28,057,705 – – – –

26. Revenue Reserves Summary

(a) General Reserve (Note 26.1) 2,500,000,000 2,200,000,000 2,000,000,000 2,500,000,000 2,200,000,000 2,000,000,000

2,500,000,000 2,200,000,000 2,000,000,000 2,500,000,000 2,200,000,000 2,000,000,000

(b) Retained Earnings (Note 26.2) 1,278,757,019 1,221,738,519 583,363,235 869,578,997 899,276,519 322,064,056

1,278,757,019 1,221,738,519 583,363,235 869,578,997 899,276,519 322,064,056

3,778,757,019 3,421,738,519 2,583,363,235 3,369,578,997 3,099,276,519 2,322,064,056

26.1 General Reserve

The general reserve which is a revenue reserve represents the amounts set aside by the Directors for general application.

The movement of general reserve is as follows:



At the beginning of the Year 2,200,000,000 2,000,000,000 1,600,000,000 2,200,000,000 2,000,000,000 1,600,000,000

Transferred from Retained Earnings 300,000,000 200,000,000 400,000,000 300,000,000 200,000,000 400,000,000

At the end of the Year 2,500,000,000 2,200,000,000 2,000,000,000 2,500,000,000 2,200,000,000 2,000,000,000

26.2 Retained Earnings

Singer (Sri Lanka) PLC 869,578,997 899,276,519 322,064,056 869,578,997 899,276,519 322,064,056

Equity Accounted Investees (Note 15.2) 4,663,202 (1,114,354) (475,379) – – –

Subsidiary Company 302,942,258 179,571,558 85,848,779 – – –

Gain on Dilution of Equity Holding in Singer Finance (Lanka) PLC 176,573,748 176,573,748 176,573,748 – – –

Acquisition of Non-Contolling Interests without Change in Control (8,069,354) – – – – –

Issue Shares of Subsidiary to Non-Controlling Interest (Note 26.3) (66,931,834) (32,568,952) (747,969) – – –

1,278,757,019 1,221,738,519 583,363,235 869,578,997 899,276,519 322,064,056

26.3 Retained Earnings Attributable to Minority Shareholders

At the beginning of the Year 32,568,952 747,969 – – – –

Profit Attributable to Minority Shareholders - for the Year 55,696,216 42,487,648 747,969 – – –

Dividend for Minority Shareholders - for the Year (21,333,333) (10,666,665) – – – –

At the end of the Year 66,931,834 32,568,952 747,969 – – –


27. Loans & Borrowings27.1 Loans & Borrowings - Consolidated

2012 2012 2012 2011 2011 2011 1st January 2011 1st January 2011 1st January 2011Amount Amount Total Amount Amount Total Amount Amount Total

Repayable Repayable Repayable Repayable Repayable RepayableWithin 1 Year After 1 Year Within 1 Year After 1 Year Within 1 Year After 1 Year


Debentures

(Note 27.2) 472,000,000 1,400,000,000 1,872,000,000 520,000,000 500,000,000 1,020,000,000 300,000,000 1,060,000,000 1,360,000,000

Bank Loans

(Note 27.3) 4,042,514,091 233,822,786 4,276,336,877 3,657,928,132 360,385,067 4,018,313,199 2,157,712,738 227,290,697 2,385,003,435

Bank Overdraft

(Note 22.2) 663,514,715 – 663,514,715 674,864,338 – 674,864,338 457,771,513 – 457,771,513

Commercial Papers

(Note 27.4) 2,157,512,802 – 2,157,512,802 – 250,000,000 250,000,000 250,000,000 – 250,000,000

7,335,541,609 1,633,822,786 8,969,364,395 4,852,792,470 1,110,385,067 5,963,177,537 3,165,484,251 1,287,290,697 4,452,774,948

27.2 Debentures - Consolidated

Balance as at New Redemption Balance as at New Redemption As at 01.01.2011 Issues 31.12.2011 Issues 31.12.2012


6 Month TB + 1.75% Debentures Unsecured Redeemable on 05.06.2012 30,000,000 – 15,000,000 15,000,000 – 15,000,000 –

AWPLR+3.00 Debentures Unsecured Redeemable on 05.06.2012 90,000,000 – 45,000,000 45,000,000 – 45,000,000 –

19.75% Debentures Unsecured Redeemable on 29.02.2013 272,000,000 – – 272,000,000 – – 272,000,000

6 Months TB+1.65 Debentures Unsecured Redeemable on 29.09.2012 28,000,000 – – 28,000,000 – 28,000,000 –



AWPLR+1.25 Debentures Unsecured Redeemable on 31.12.2013 400,000,000 – 40,000,000 360,000,000 – 160,000,000 200,000,000

Fixed rate 15.50%. Senior, Unlisted, Unsecured, Rated Debentures Redeemable on 09.05.2015 – – – – 59,000,000 – 59,000,000

Six month Gross TB +2.75% Senior, Unlisted, Unsecured, Rated Debentures Redeemable on 09.05.2015 – – – – 340,000,000 – 340,000,000

Fixed rate 15.50%. Senior, Unlisted, Unsecured, Rated Debentures Redeemable on 24.07.2015 – – – – 1,000,000 – 1,000,000

Fixed rate 17.00%. Senior, listed, Unsecured, Rated Debentures Redeemable on 30.09.2015 – – – – 644,000,000 – 644,000,000

Fixed rate 17.00%. Senior, Unlisted, Unsecured, Rated Debentures Redeemable On 30.09.2015 – – – – 356,000,000 – 356,000,000

1,360,000,000 – 340,000,000 1,020,000,000 1,400,000,000 548,000,000 1,872,000,000

27.3 Bank Loans - Consolidated

Balance as at Obtained Repayment Balance as at Obtained Repayment As at 01.01.2011 31.12.2011 31.12.2012


(a) Movement of Bank Loans

Bank Loans 2,385,003,435 5,708,054,000 4,074,744,236 4,018,313,199 4,534,688,906 4,276,665,228 4,276,336,877

2,385,003,435 5,708,054,000 4,074,744,236 4,018,313,199 4,534,688,906 4,276,665,228 4,276,336,877


(b) Bank Loan Repayable after One Year

Company Lender/Rate Repayment Security 2012 2011 1st January 2011of Interest (p.a.) Rs. Rs. Rs.

Singer (Sri Lanka) PLC E-Friends Loan @ 6.5% At Maturity No Assets Pledged 2,554,786 4,125,067 5,832,925

NDB Bank 11.25% Quarterly payment Rs. 18,200,000/-

Negative Pledge over movable assets – – 200,000,000

2,554,786 4,125,067 205,832,925

Singer Finance (Lanka) PLC Sampath Bank AWPLR + 2 (Floor rate 22%) Rate Reviewed Quarterly Monthly Repayment

Hire Purchase/Lease receivables 87,518,000 137,510,000 –

Commercial Bank

Monthly RepaymentHire Purchase/Lease receivables

143,750,000 218,750,000 –

BOC AWPLR +2.5% Rate (Floor Rate 23%) Rate 25.75% Monthly Repayment Lease Debtors – – 1,570,316

Loan on Securitisation Fixed Rate 25.75% Monthly Repayment Lease Debtors – – 19,887,456

231,268,000 356,260,000 21,457,772

233,822,786 360,385,067 227,290,697

27.4 Commercial Papers - Consolidated



Commercial Papers 250,000,000 200,000,000 200,000,000 250,000,000 2,576,064,000 668,551,198 2,157,512,802

250,000,000 200,000,000 200,000,000 250,000,000 2,576,064,000 668,551,198 2,157,512,802

27.5 Bank Facilities - Consolidated

2012 2011 1st January 2011Utilised Total Facility Utilised Total Facility Utilised Total Facility


Overdraft 675,908,509 1,640,000,000 674,864,338 1,497,000,000 457,771,513 1,045,000,000

Term Loans 608,814,786 852,554,786 454,125,635 450,000,000 312,597,484 1,410,000,000

Short-Term Loans 5,725,756,091 8,213,245,214 3,814,187,564 5,336,060,635 2,322,405,951 3,655,800,000

Debentures 1,872,000,000 1,872,000,000 1,020,000,000 1,020,000,000 1,360,000,000 1,360,000,000

Total Debt Facility 8,882,479,386 12,577,800,000 5,963,177,537 8,303,060,635 4,452,774,948 7,470,800,000

Guarantees – 450,000,000 – 350,000,000 254,359,274 350,000,000

Letter of Credit 1,528,069,676 1,785,000,000 1,493,256,782 1,685,000,000 1,408,218,372 1,685,000,000

Total Debt and Other Facilities 10,410,549,062 14,812,800,000 7,456,434,319 10,338,060,635 6,115,352,592 9,505,800,000

27.6 Loans & Borrowings - Company

2012 2012 2012 2011 2011 2011 1st January 2011 1st January 2011 1st January 2011Amount Amount Total Amount Amount Total Amount Amount Total

Repayable Repayable Repayable Repayable Repayable RepayableWithin 1 Year After 1 Year Within 1 Year After 1 Year Within 1 Year After 1 Year


Debentures

(Note 27.7) 472,000,000 1,400,000,000 1,872,000,000 520,000,000 500,000,000 1,020,000,000 300,000,000 1,060,000,000 1,360,000,000

Bank Loans

(Note 27.8) 3,517,522,091 2,554,786 3,520,076,877 3,254,405,185 4,125,067 3,258,530,252 2,152,867,617 205,832,925 2,358,700,542

Bank Overdrafts

(Note 22.2) 631,580,202 – 631,580,202 546,711,851 – 546,711,851 457,771,513 – 457,771,513

Commercial Papers

(Note 27.9) 2,058,234,000 – 2,058,234,000 – 250,000,000 250,000,000 250,000,000 – 250,000,000

6,679,336,293 1,402,554,786 8,081,891,079 4,321,117,036 754,125,067 5,075,242,103 3,160,639,130 1,265,832,925 4,426,472,055


27.7 Debentures - Company



6 Month TB + 1.75% Debentures Unsecured Redeemable on 05.06.2012 30,000,000 – 15,000,000 15,000,000 – 15,000,000 –


19.75% Debentures Unsecured Redeemable on 29.02.2013 272,000,000 – – 272,000,000 – – 272,000,000

6 Months TB+1.65 Debentures Unsecured Redeemable on 29.09.2012 28,000,000 – – 28,000,000 – 28,000,000 –



AWPLR+1.25 Debentures Unsecured Redeemable on 31.12.2013 400,000,000 – 40,000,000 360,000,000 – 160,000,000 200,000,000

Fixed rate 15.50%. Senior,unlisted, unsecured, rated Debentures redeemable on 09.05.2015 – – – – 59,000,000 – 59,000,000

Six month Gross TB +2.75% Senior, unlisted, unsecured, rated Debentures redeemable on 09.05.2015 – – – – 340,000,000 – 340,000,000

Fixed rate 15.50%. Senior, unlisted, unsecured, rated Debentures redeemable on 24.07.2015 – – – – 1,000,000 – 1,000,000

Fixed rate 17.00%. Senior, listed, unsecured, rated Debentures redeemable on 30.09.2015 – – – – 644,000,000 – 644,000,000

Fixed rate 17.00%. Senior, unlisted, unsecured, rated Debentures redeemable on 30.09.2015 – – – – 356,000,000 – 356,000,000

1,360,000,000 – 340,000,000 1,020,000,000 1,400,000,000 548,000,000 1,872,000,000

27.8 Bank Loans - Company

Balance as at Obtained Repayment Balance as at Obtained Repayment As at 01.01.2011 31.12.2011 31.12.2012


(a) Movement of Bank Loans

Bank Loans 2,358,700,542 4,933,054,000 4,033,224,290 3,258,530,252 4,134,688,906 3,873,142,281 3,520,076,877

2,358,700,542 4,933,054,000 4,033,224,290 3,258,530,252 4,134,688,906 3,873,142,281 3,520,076,877

(b) Bank Loan Repayable after One Year

Lender/Rate Repayment Security 2012 2011 1st January 2011of Interest (p.a.) Rs. Rs. Rs.

E-Friends Loan @ 6.5% At Maturity No Assets Pledged 2,554,786 4,125,635 5,832,925

National Savings Bank -

AWPLR+1.25%

Rs. 200 million to be

paid in May 2012

No Assets Pledged

– – 200,000,000

2,554,786 4,125,635 205,832,925

27.9 Commercial Papers - Company

As at New Redemption As at New Redemption As at 01.01.2011 Issues 31.12.2011 Issues 31.12.2012


Commercial Papers 250,000,000 200,000,000 200,000,000 250,000,000 2,403,964,000 595,730,000 2,058,234,000

250,000,000 200,000,000 200,000,000 250,000,000 2,403,964,000 595,730,000 2,058,234,000


27.10 Bank Facilities - Company

2012 2011 1st January 2011Utilised Total Facility Utilised Total Facility Utilised Total Facility


Overdraft 643,973,996 1,370,000,000 546,711,851 1,247,000,000 457,771,513 1,020,000,000

Term Loans 252,554,786 252,554,786 454,125,635 450,000,000 286,294,591 1,310,000,000

Short-Term Loans 5,325,756,091 7,738,245,214 3,054,404,617 4,459,100,000 2,322,405,951 3,655,800,000

Debentures 1,872,000,000 1,872,000,000 1,020,000,000 1,020,000,000 1,360,000,000 1,360,000,000

Total Debt Facility 8,094,284,873 11,232,800,000 5,075,242,103 7,176,100,000 4,426,472,055 7,345,800,000

Guarantees – 450,000,000 – 350,000,000 254,359,274 350,000,000

Letter of Credit 1,528,069,676 1,785,000,000 1,493,256,782 1,685,000,000 1,408,218,372 1,685,000,000

Total Debt and Other Facilities 9,622,354,549 13,467,800,000 6,568,498,885 9,211,100,000 6,089,049,701 9,380,800,000

28. Deferred Tax Assets/(Liabilities)Consolidated Company


28.1 Deferred Tax Assets


Adjustment due to Change in Tax Rate - Recognised in Statement of Comprehensive Income (Note 10.2) – – (28,610,667) – – (28,610,667)

Origination and Reversal of Timing Differences - Recognised in Statement of Comprehensive Income (Note 10.2) 6,834,484 33,223,601 10,532,692 20,797,923 11,148,594 (89,402)

Transfer from Deferred Tax Liabilities – – (14,749,401) – – –


28.2 Deferred Tax Liabilities

Balance as at the beginning of the Year 95,805,177 99,339,454 14,749,401 95,805,177 99,339,454 –

Origination of Deferred Tax Liability due to Revaluation of Building - Recognised in Equity 21,655,424 – 99,339,454 21,655,424 – 99,339,454

Deferred Tax Effect on Realisation of Revaluation Surplus (3,534,277) (3,534,277) – (3,534,277) (3,534,277) –

Transfers to Deferred Tax Assets – – (14,749,401) – – –



28.3 Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against tax liabilities and

when the deferred tax relate to the same fiscal authority.

The movement in deferred tax assets and liabilities during the year, without taking into consideration the offsetting of balances within the

same tax jurisdiction, is as follows:

28.3.1 Consolidated

2012 2011 1st January 2011Assets Liabilities Assets Liabilities Assets Liabilities


(a) Composition of Deferred Tax Assets

Property, Plant & Equipment – 88,258,743 – 65,776,119 – 74,172,913

Intangible Assets – 9,298,141 – 8,224,885 – 4,495,750

Lease Rentals 8,022,376 – 20,639,251 – – –

Inventories 63,224,791 – 55,650,870 – 41,623,938 –

Provision on Assets 100,842,700 – 83,820,396 – 96,060,676 –

Deferred Benefit Obligations 75,751,052 – 57,340,008 – 49,465,762 –

247,840,919 97,556,884 217,450,525 74,000,974 187,150,376 78,668,663

Net Deferred Tax 150,284,035 – 143,449,551 – 110,225,949 –

(b) Composition of Deferred Tax Liabilities


– 113,926,325 – 95,805,177 – 99,339,454

Net Deferred Tax – 113,926,325 – 95,805,177 – 99,339,454

28.3.2 Company

2012 2011 1st January 2011Assets Liabilities Assets Liabilities Assets Liabilities


(a) Composition of Deferred Tax Assets


Intangible Assets – 3,782,100 – 4,678,100 – 4,495,750

Inventories 63,224,791 – 55,650,870 – 41,623,938 –

Provision on Assets 100,842,700 – 83,820,396 – 96,060,676 –

Deferred Benefit Obligations 72,620,419 – 55,393,358 – 49,465,762 –

236,687,910 90,388,137 194,864,624 69,362,774 187,150,376 72,797,120

Net Deferred Tax 146,299,773 – 125,501,850 – 114,353,256 –

(b) Composition of Deferred Tax Liabilities


– 113,926,325 – 95,805,177 – 99,339,454

Net Deferred Tax – 113,926,325 – 95,805,177 – 99,339,454


29. Retirement Benefit ObligationsConsolidated Company


Present Value of Unfunded Gratuity 270,539,471 204,787,190 181,875,758 259,358,640 197,833,421 155,164,141

Total Present Value of the Obligation 270,539,471 204,787,190 181,875,758 259,358,640 197,833,421 155,164,141

Provision for Retiring Gratuity

At the beginning of the Year 204,787,190 181,875,758 158,545,420 197,833,421 176,663,436 155,164,141

Actuarial (Gain)/Loss on Obligation 30,935,134 (124,970) 220,509 28,907,958 (183,884) (247,944)

Current Service Cost 22,911,982 17,499,411 16,018,237 20,812,242 16,230,217 15,028,682

Interest on Obligation 21,502,656 19,188,265 17,573,814 20,772,510 18,639,926 17,200,779

280,136,962 218,438,464 192,357,980 268,326,131 211,349,695 187,145,658

Benefits Paid (9,597,491) (13,651,274) (10,482,222) (8,967,491) (13,516,274) (10,482,222)

At the end of the Year 270,539,471 204,787,190 181,875,758 259,358,640 197,833,421 176,663,436

The Company maintains a non-contributory defined benefit plan providing for gratuity benefits payable to employees expressed in terms of final

monthly salary and service.

As at 31st December 2012, the gratuity liability was actuarialy valued under the Projected Unit Credit (PUC) method by a professionally qualified

actuary firm Messrs Actuarial & Management Consultants (Private) Ltd.

The required accounting provision of the Company as at 31st December 2012, has been determined based on the recommendation

on this Report.

Following key assumptions were made in arriving at the above figures:

(a) Rate of Discount - 10.5% p.a. (net of tax)

(b) Salary Increment Rate - 9%

(c) Retirement Age

Other than Factory General Staff Factory General Staff

Males 60 years 55 years

Females 60 years 55 years

(d) Assumptions regarding future mortality are based on A67/70 Mortality Table, issued by the Institute of Actuaries, London.

The demographic assumptions underline the valuation are with respect to retirement age, early withdrawal from service and

retirement on medical grounds.

The expense so recognised is included in Selling and Administrative expenses in the Statement of Comprehensive Income.

The Group’s and Company's retirement benefit obligation would have been Rs. 300.5 million and Rs. 287.4 million respectively as at the

reporting date, had their retirement benefit obligation been calculated as per the requirements of Payment of Gratuity Act No. 12 of 1983.

30. Trade and Other PayablesConsolidated Company


Trade Payables 1,286,671,908 1,038,405,126 551,474,918 1,159,098,596 858,046,445 458,339,232

Interest Payable 276,537,494 129,412,460 110,448,362 144,510,118 42,076,284 47,113,516

Value Added Tax Payable 2,749,248 77,879,367 53,949,856 1,900,000 74,205,036 51,439,712

MSPS Payable 22,884,662 21,169,011 13,839,778 22,884,662 21,169,011 13,839,778

ETF Payable 6,096,640 4,877,182 3,701,930 6,096,640 4,877,182 3,701,930

Advances Received from Customers 105,034,709 132,537,264 109,605,148 105,034,709 132,537,264 109,605,148

Accrued Expenses 616,345,460 762,682,118 404,122,470 585,003,002 729,811,324 392,252,500

Turnover Tax Payable – – 31,802,374 – – 31,802,374

Other Payables 264,596,727 333,422,821 188,243,317 164,436,840 192,306,693 79,352,452

Warranty Provisions 72,578,901 71,078,901 30,758,736 72,578,901 71,078,901 30,758,736

2,653,495,750 2,571,464,250 1,497,946,889 2,261,543,467 2,126,108,140 1,218,205,378


30.1 Warranty provisions have been recognised for expected warranty claims on products sold by the Company.

31. Deferred RevenueConsolidated Company



Amounts Transferred to Trade and Other Receivables – – (66,184,234) – – (53,159,040)

Amounts Recognised as Revenue during the Year 4,676,200 4,528,950 22,297,250 4,676,200 4,528,950 16,751,490


31.1 Deferred revenue includes deferred service fee on air conditioners and amount deferred on motor bike services income as at

31st December 2012.

32. Dividend PayableGroup Company


Unclaimed Dividends 10,822,388 5,824,553 3,204,691 10,822,388 5,824,553 3,204,691

10,822,388 5,824,553 3,204,691 10,822,388 5,824,553 3,204,691

33. DividendsCompany

2012 2011 2010Rs. Rs. Rs.

Ordinary Shares

Interim Dividend 2012 - Nil (2011 - Rs. 1.50) – 187,814,415 62,604,805

Proposed Final Dividend 2012 - Rs. 6.00 (2011 - Rs. 6.00) 751,257,660 751,257,660 219,116,818

751,257,660 939,072,075 281,721,623

34. Amounts due to Related PartiesConsolidated Company


34.1 Trade

Singer Industries (Ceylon) PLC Affiliate Company 116,912,950 72,983,434 160,845,568 116,912,950 72,983,434 160,845,568

Regnis (Lanka) PLC Affiliate Company 67,540,465 64,339,509 53,402,870 67,540,465 64,339,509 53,402,870

Regnis Appliances (Pvt) Ltd. Affiliate Company – 33,948,923 54,399,165 – 33,948,923 54,399,165

184,453,415 171,271,866 268,647,603 184,453,415 171,271,866 268,647,603

34.2 Non-Trade

Singer Asia Ltd. Affiliate Company 72,674,730 73,441,026 53,272,425 72,674,730 73,441,026 53,272,425

72,674,730 73,441,026 53,272,425 72,674,730 73,441,026 53,272,425


35. Deposits from CustomersConsolidated Company


Balance as at the beginning of the Year 2,662,999,529 1,647,985,384 1,463,621,740 – – –

New Deposits 1,042,745,950 1,501,498,312 716,990,498 – – –

Capitalisation of Interest 108,140,082 87,142,811 87,998,515 – – –

3,813,885,562 3,236,626,507 2,268,610,753 – – –

Repaid Deposits (949,365,595) (573,626,978) (620,625,369) – – –

Balance as at the end of the Year 2,864,519,966 2,662,999,529 1,647,985,384 – – –

Payable within One Year 2,521,670,352 2,159,857,465 1,451,990,703 – – –

Payable after One Year 342,849,614 503,142,064 195,994,681 – – –

36. Financial InstrumentsCredit RiskExposure to Credit Risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was:

Carrying AmountGroup

Carrying AmountCompany


Trade and other Receivables 13,400,443,835 11,112,280,743 7,970,385,504 6,624,500,371 5,513,015,670 4,222,432,736

13,400,443,835 11,112,284,743 7,970,385,504 6,624,500,371 5,513,015,670 4,222,432,736

The Maximum exposure to credit risk for receivables at the reporting date by type of counterparty was:

Carrying AmountGroup

Carrying AmountCompany


Retail Customers 4,003,621,370 3,262,928,301 2,480,518,998 3,951,020,515 3,212,748,580 2,440,783,397

Wholesale Customers 1,187,521,511 1,088,508,159 682,141,440 1,187,521,511 1,088,508,159 682,141,440

Others 8,209,300,953 6,760,844,283 4,807,725,066 1,485,958,344 1,211,758,930 1,099,507,899

Total 13,400,443,835 11,112,280,743 7,970,385,504 6,624,500,371 5,513,015,670 4,222,432,736

Impairment losses

The aging of receivables at the reporting date was:

Group Gross2012

Impairment2012

Gross2011

Impairment2011

Gross 1st January 2011

Impairment1st January 2011


Not past due 9,713,974,108 – 4,058,601,011 – 6,979,636,685 –

Past due 0-30 Days 2,246,507,162 (16,700,821) 925,700,718 (2,464,320) 421,455,367 (25,105,721)

Past due 31-120 Days 1,364,062,294 (9,399,209) 624,932,115 (56,486,192) 536,797,345 (26,329,348)

Past due more than 120 Days 420,233,220 (318,232,919) 33,768,610 (130,516,388) 394,500,715 (310,569,538)

13,744,776,784 (344,332,949) 11,384,297,779 (272,017,036) 8,332,390,111 (362,004,607)

Company Gross2012

Impairment2012

Gross2011

Impairment2011

Gross 1st January 2011

Impairment1st January 2011


Not past due 5,766,660,970 – 5,493,768,896 – 4,215,002,043 –

Past due 0-30 Days 848,487,000 – 23,009,820 13,213,560 12,998,700 (6,234,607)

Past due 31-120 Days 16,891,000 (7,538,599) 58,094,100 60,030,570 21,442,300 (20,775,700)

Past due more than 120 Days 280,035,000 (280,035,000) 166,422,510 155,031,510 285,304,800 (285,304,800)

6,912,073,970 (287,573,599) 5,741,595,326 (228,279,656) 4,534,747,843 312,315,107


The movement in the allowance for impairment in respect of receivables during the year was as follow:

Group Company2012 2011 1st January 2011 2012 2011 1st January 2011


Balance at the beginning of the Year 272,017,036 362,004,607 415,754,645 228,279,656 312,315,107 373,102,874

Impairment Loss Recognised 134,251,459 137,665,197 108,722,282 100,441,943 119,293,899 104,417,933

Amounts Written-off (61,935,546) (227,652,768) (162,472,320) (41,148,000) (203,329,350) (165,205,700)

Balance at the end of the Year 344,332,949 272,017,036 362,004,607 – – –

Liquidity Risk

The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting

agreements:

Group

31st December 2012

Carrying Contractual 6 months 6 - 12 1-2 2-5 More than Amount

Rs. Cash Flows

Rs. or Less

Rs. Months

Rs. Years

Rs.Years

Rs. 5 Years

Rs.

Non-Derivative Financial Liabilities

Secured Bank Loans 756,260,000 839,236,002 493,248,558 88,565,628 146,597,295 110,824,522 –

Unsecured Bank Loans 3,520,076,877 3,557,143,000 3,657,143,000 – – – –

Unsecured Bond Issues 1,872,000,000 2,539,238,000 280,670,000 – 221,996,000 2,036,572,000 –

Promissory Notes 2,157,512,802 2,296,278,353 1,644,768,353 105,156,000 546,354,000 – –

Trade and Other Payables 2,653,495,767 – – – – – –

Public Deposits 2,864,519,966 3,233,824,258 1,695,687,065 1,138,764,001 220,618,665 178,754,527 –

Bank Overdraft 663,514,715 631,580,202 – – – – –

14,487,380,128 13,097,299,815 7,671,516,976 1,332,485,629 1,135,565,960 2,326,151,049 –

31st December 2011


Rs. Cash Flows

Rs. or Less

Rs. Months

Rs. Years

Rs.Years

Rs. 5 Years

Rs.

Non-Derivative Financial Liabilities –

Secured Bank Loans 684,782,947 789,202,441 293,193,993 84,473,432 157,357,968 254,177,048 –

Unsecured Bank Loans 3,333,530,252 3,357,017,362 3,142,068,053 210,411,397 – 4,537,912 –

Unsecured Bond Issues 1,020,000,000 1,158,097,693 63,197,638 – – 1,094,900,055 –

Promissory Notes 250,000,000 285,767,123 – – 285,767,123 – –


Public Deposits 2,662,999,529 2,989,373,695 1,288,041,885 1,083,429,037 404,500,788 213,401,986 –

Bank Overdraft 674,864,338 546,711,851 546,711,851 – – – –

11,197,641,329 9,126,170,166 5,333,213,420 1,378,313,867 847,625,879 1,567,017,000 –

1st January 2011


Rs. Cash Flows

Rs. or Less

Rs. Months

Rs. Years

Rs.Years

Rs. 5 Years

Rs.


Secured Bank Loans 26,302,893 31,948,449 3,540,234 20,644,064 7,764,151 – –

Unsecured Bank Loans 2,358,700,542 2,429,235,000 2,009,655,000 172,050,000 240,648,000 6,882,000 –

Unsecured Bond Issues 1,360,000,000 1,693,638,000 74,481,000 373,404,000 964,923,000 280,830,000 –



Public Deposits 1,647,985,384 – – – – – –

Bank Overdraft 457,771,513 457,771,513 457,771,513 – – – –

7,598,707,221 4,898,360,086 2,545,447,747 566,098,064 1,499,102,274 287,712,000 –


Company

31st December 2012


Rs. Cash Flows

Rs. or Less

Rs. Months

Rs. Years

Rs.Years

Rs. 5 Years

Rs.


Unsecured Bank Loans 3,520,076,877 3,557,143,000 3,557,143,000 – – – –

Unsecured Bond Issues 1,872,000,000 2,539,238,000 280,670,000 – 221,996,000 2,036,572,000 –

Promissory Notes 2,058,234,000 2,190,496,000 1,538,986,000 105,156,000 546,354,000 – –


Bank Overdraft 631,580,202 631,580,202 – – – – –

10,343,434,546 8,918,457,202 5,376,799,000 105,156,000 768,350,000 2,036,572,000 –

31st December 2011


Rs. Cash Flows

Rs. or Less

Rs. Months

Rs. Years

Rs.Years

Rs. 5 Years

Rs.


Unsecured Bank Loans 3,258,530,252 3,281,283,800 3,066,334,491 210,411,397 – 4,537,912 –

Unsecured Bond Issues 1,020,000,000 1,158,097,693 63,197,638 – – 1,094,900,055 –



Bank Overdraft 546,711,851 546,711,851 546,711,851 – – – –

7,201,350,243 5,271,860,468 3,676,243,981 210,411,397 285,767,123 1,099,437,967 –

1st January 2011


Rs. Cash Flows

Rs. or Less

Rs. Months

Rs. Years

Rs.Years

Rs. 5 Years

Rs.


Unsecured Bank Loans 2,358,700,542 2,429,235,000 2,009,655,000 172,050,000 240,648,000 6,882,000 –

Unsecured Bond Issues 1,360,000,000 1,693,638,000 74,481,000 373,404,000 964,923,000 280,830,000 –

Promissory Notes 250,000,000 268,065,000 268,065,000 – – – –


Bank Overdraft 457,771,513 457,771,513 457,771,513 – – – –

5,644,677,433 4,848,709,513 2,809,972,513 545,454,000 1,205,571,000 287,712,000 –

Interest Rate RiskProfile

At the reporting date, the interest rate profile of the Group's interest-bearing financial instruments was:

Group Company


Fixed Rate Instruments

Financial Assets 11,176,313,335 9,032,984,422 6,625,019,889 4,032,668,428 3,313,453,998 2,507,067,037

Financial Liabilities (10,518,266,769) (6,867,187,965) (4,646,224,846) (7,554,468,000) (4,127,227,801) (2,978,352,000)

658,046,566 2,165,796,457 1,978,795,043 (3,521,799,572) (813,773,803) (471,284,963)

Variable Rate Instruments

Financial Assets – – – – – –

Financial Liabilities (1,315,617,592) (1,758,989,101) (1,454,535,489) (527,423,079) (948,014,302) (1,448,120,055)

(1,315,617,592) (1,758,989,101) (1,454,535,489) (527,423,079) (948,014,302) (1,448,120,055)


Fair ValuesFair Values Versus Carrying Amounts

The fair values of financial assets and liabilities, together with the carrying amounts in the Balance Sheet, are as follows:

Group

Loans andReceivables

Other Financial Liabilities

Total CarryingAmount

Fair Value

31st December 2012 Rs. Rs. Rs. Rs.

Trade and Other Receivables 13,400,443,835 – 13,400,443,835 13,400,443,835

13,400,443,835 – 13,400,443,835 13,400,443,835

Secured Bank Loans – 756,260,000 756,260,000 756,260,000

Unsecured Bank Loans – 3,520,076,877 3,520,076,877 3,557,143,000

Unsecured Bond Issues – 1,872,000,000 1,872,000,000 2,539,238,000

Promissory Notes – 2,157,512,802 2,151,512,802 2,289,774,802

Trade and Other Payables – 2,653,495,767 2,653,495,767 2,653,495,767

Public Deposits – 2,864,519,966 2,864,519,966 2,864,519,966

Bank Overdraft – 663,514,715 663,514,715 663,514,715

– 14,487,380,128 13,731,120,128 14,567,686,251




Fair Value



11,112,280,743 – 11,112,280,743 11,112,280,743




Promissory Notes – 250,000,000 250,000,000 285,767,123


Public Deposits – 2,662,999,529 2,662,999,529 2,662,999,529

Bank Overdraft – 674,864,338 674,864,338 674,864,338

– 11,197,641,329 10,512,858,382 10,709,476,747




Fair Value

1st January 2011 Rs. Rs. Rs. Rs.


7,970,385,504 – 7,970,385,504 7,970,385,504






Public Deposits – 1,647,985,386 1,647,985,386 1,647,985,386

Bank Overdraft – 457,771,513 457,771,513 457,771,513

– 7,598,707,224 7,598,707,224 8,020,944,682


Company




Fair Value



6,624,500,371 – 6,624,500,371 6,624,500,371



Promissory Notes – 2,058,234,000 2,058,234,000 2,190,496,000


Bank Overdraft – 631,580,202 631,580,202 631,580,202

– 10,343,434,546 10,343,434,546 11,180,000,669




Fair Value



5,513,015,670 – 5,513,015,670 5,513,015,670





Bank Overdraft – 546,711,851 546,711,851 546,711,851

– 7,201,350,243 7,201,350,243 7,397,968,607




Fair Value

1st January 2011 Rs. Rs. Rs. Rs.


4,222,432,736 – 4,222,432,736 4,222,432,736





Bank Overdraft – 457,771,513 457,771,513 457,771,513

– 5,644,677,433 5,644,677,433 6,066,914,891

Capital Management

The Board’s policy is to maintain a strong capital base to maintain confidence of the investors, creditors and the market while sustaining future

development of the business capital consists to total equity. The Board of Directors monitors the return on capital as well as the level of dividends

to ordinary shareholders.

The Board of Directors seeks to maintain a balance between higher returns facilitated through a higher level of borrowings and the benefits and

security afforded by a sound capital position.

The capital structure of the Group consists of debt and equity of the Group. The capital structure of the Group is reviewed by the Board of Directors.


37. Commitments and Contingencies - Group/Company37.1 Financial Commitments

Documentary Credits effected for foreign purchases amounted to Rs. 1,528,069,676/- (2011 - Rs. 1,493,256,782/-).

37.2 Capital Commitments

There were no significant capital commitments, which have been approved or contracted for by the Company/Subsidiary as at the Balance Sheet

date except for the following:

Operating Lease commitment as at 31st December 2012 is as follows:

Within One Year - Rs. 289.5 million

Between One to Five Years - Rs. 1,119.4 million

Over Five Years - Rs. 356.6 million

37.3 Assets Pledged

Company has given a negative pledge over the Company's total assets, except immovable assets, for the following banks over the Loans and

Overdrafts having a carrying value of Rs. 3.1 billion as at the year end:

•Hongkong&ShanghaiBankingCorporationLtd.

•CommercialBankofCeylonPLC

•SeylanBankPLC

•SampathBankPLC

•NationsTrustBankPLC

•DeutscheBankAG

•NationalDevelopmentBankPLC

•MuslimCommercialBankLtd.

•DFCCVardhanaBankPLC

•People'sBank

Lease debtors and hire purchase receivable portfolio with a carrying value of Rs. 676 million had been pledged by the subsidiary Singer Finance

(Lanka) PLC against loans obtained to the value of Rs. 374 million from Bank of Ceylon, Sampath Bank PLC, Deutsche Bank, Commercial Bank and

Nations Trust Bank.

37.4 Contingencies

(a) Guarantees given to banks and other lending institutions on behalf of Singer Industries (Ceylon) PLC and Regnis (Lanka) PLC amounts to

Rs. 75 million and Rs. 455.5 million respectively.

(b) The Company has provided bank guarantees amounting to Rs. 179.2 million to the Director General of Customs to clear imports during the

year under review pending completion of legal proceedings in the Court of Appeal.

The bank guarantees related to alleged additional duty payable on imports, is being contested by the Company in Courts.

The Company lawyers are of the opinion that there is no basis that the Company is liable for the additional duty and hence, no provision is made

in the Financial Statements.

(c) Singer Finance (Lanka) PLC has provided guarantees to its Fixed Deposit Holders amounting to Rs. 2,906,000/-, holding deposit holders Fixed

Deposits amounting to Rs. 3,494,797/- as Security.

38. Events after the Reporting Period There have been no material events after the reporting date that require disclosure in the Financial Statements.

(i) Final Dividend - 2012

On the 28th February 2013, Board of Directors approved a final dividend of Rs. 6.00 per share amounting to Rs. 751.3 million for the year ended

31st December 2012.

The dividend will be paid on 20th March 2013.


39. Related Party Transactions

39.1 Identity of Related Parties

The Company has a related party relationship with its Parent Company, its Associate Companies, Affiliate Companies and with its Directors.

39.2 Transactions with Parent Companies

(a) During the year, the Company had the following transactions with its Parent Companies:

Singer Asia Ltd. - (Intermediate Parent)

2012 2011Rs. million Rs. million

Royalty Expense 264.8 232.8

Royalty Payable Balance as at the Year End 72.7 73.4

Singer Asia Holdings B.V. (Intermediate Parent)

Royalty paid to Singer Asia Ltd. through Singer Asia Holdings B.V.

(b) Following companies are also Parent Companies of Singer (Sri Lanka) PLC and Singer Finance (Lanka) PLC, with whom no transactions were

entered into during the year:

Company Relationship

Singer (Sri Lanka) B.V. Intermediate Parent

Singer Asia Holdings N.V. Intermediate Parent

Retail Holdings N.V. Ultimate Parent

39.3 Transactions with Subsidiary Companies



Sales Financed through Singer Finance (Lanka) PLC 1,230.7 2,049.9

Payments to Singer (Sri Lanka) PLC on behalf of Customers 996.5 1,835.4

Short-Term Loan granted 1,693.0 –

Short-Term Loan recovered 400.0 –

Interest Income 138.0 65.8

Dividend Received - Gross 64.0 32.0

Cash Collections by Singer (Sri Lanka) PLC 2,643.1 2,937.3

Expenses Paid 155.7 94.5

Administrative Fee Charged 68.2 65.9

Collecting Commission paid through Singer (Sri Lanka) PLC 16.8 10.4

Purchase of Assets 0.9 –

Rent Reimbursed 13.4 11.0

Royalty Paid through Singer (Sri Lanka) PLC 16.9 12.0

Balance Receivable - Trade 4.2 562.0

Balance Receivable - Loan 1,398.4 365.9


39.4 Transactions with Associate Companies

(a) During the year, the Company had following transactions with its Associate Companies:


Reality Lanka Ltd.

Loans Receivable 73.6 73.6

Interest Income – 4.3

Interest Receivable – –

Invested in Shares – 24.0

Rent Expense 4.1 4.20

(b) Following company is an Associate Company of Singer (Sri Lanka) PLC, with whom Singer (Sri Lanka) PLC or Singer Finance (Lanka) PLC

had no transactions other than through Advertising Agencies during the year.

Telshan Network (Pvt) Ltd.

39.5 Transactions with Other Related Parties

Transactions with following parties have been disclosed in Note 38.6:

Relationship

Regnis (Lanka) PLC Affiliate Company

Singer Industries (Ceylon) PLC Affiliate Company

Singer Asia Sourcing Ltd. Affiliate Company

39.6 Transactions with Key Management Personnel

A number of Key Management Personnel or their related parties, hold positions in other entities that result in them having control or significant

influence over the financial or operating policies of these entities. These transactions are given below:

Name of the Company Name of Nature of 2012 2011and Relationship Director Transaction Rs. million Rs. million

Singer Industries (Ceylon) PLC Mr. H.D.S. Amarasuriya (Chairman) Purchases 847.7 884.0

(Affiliate Company) Dr. G.C.B. Wijeyesinghe Corporate Guarantee given 75.0 75.0

Mr. H.A. Pieris Lease Rental paid 3.3 2.7

Mr. V.G.K. Vidyaratne Net Finance Income 3.1 2.3

Mr. G.J. Walker Dividend paid (Gross) – 2.9

Deshabandu A.M. de S. Jayaratne Trade Credit Settled 783.0 957.0

Purchase of Fixed Assets 5.0 1.2

Expenses Reimbursed 12.9 19.3

Loans Recovered – 30.0

Loans Receivable – –

Balance Payable 116.9 55.6

Regnis (Lanka) PLC Mr. H.D.S. Amarasuriya (Chairman) Purchases 2,030.5 2,099.7

(Affiliate Company) Dr. G.C.B. Wijeyesinghe Corporate Guarantee given 455.5 455.5

Mr. H.A. Pieris Interest Income 9.6 5.9

Mr. V.G.K. Vidyaratne Non-Trade Settlement 45.0 47.0

Mr. G.J. Walker Trade Credit Settled 2,318.1 2,088.0

Dr. S. Kelegama Fixed Asset Purchases 0.2 –

Loans Granted 60.00 –

Loans Recovered 60.00 70.0

Expenses Incurred 47.0 40.4

Balance Payable 48.9 58.2


Name of the Company Name of Nature of 2012 2011and Relationship Director Transaction Rs. million Rs. million

Singer Finance (Lanka) PLC (Subsidiary Company)

Mr. H.D.S. Amarasuriya (Chairman) Sales financed through Singer Finance (Lanka) PLC 1,230.7 2,049.9

Dr. G.C.B. Wijeyesinghe(Resigned w.e.f. 30.12.2011)

Payments to Singer (Sri lanka) PLC on behalf of Customers 996.5 1,835.4

Mr. H.A. Pieris Short Term Loan given 1,693.0

Dr. S. Kelegama Shor Term Loan Settled 400.0

Mr. M.P.A. Salgado Interest Income 138.0 65.8

Mr. G.J. Walker Dividend Received -Gross 64.0 32.0

Mr. J.J. Hyun (Appointed w.e.f. 28.02.2011)

Cash Collections by Singer (Sri Lanka) PLC 2,643.1 2,937.3

Expenses Paid 155.7 94.5

Administrative Fee Charged 68.2 65.9

Collecting Commission paid through Singer (Sri Lanka) PLC 16.8 10.4

Purchase of Assets 0.9 –

Rent Reimbursed 13.4 11.0

Royalty paid through Singer (Sri Lanka) PLC 16.9 12.0

Balance Receivable - Trade 4.2 562.0

Balance Receivable-Loans 1,398.4 365.9

National Development Bank PLC Mr. H.D.S. Amarasuriya Borrowed Funds 290 22.8

Interest Expense 34 1.9

Issue of Debentures 18.6 150.0

Debenture Interest – 28.9

Singer Asia Sourcing Ltd. (Affiliate Company) Mr. G.J. Walker Purchases – 0.1

Settlement – –

Balance Receivable/(Payable) 7.4 6.8

Singer Asia Ltd. (Intermediate Parent Company) Mr P.J. O’ Donnell Royalty Expense 264.8 232.8

Mr. T. Brown Royalty Payable 72.7 73.4

Mr. G.J. Walker

Mr H.A. Pieris

Sampath Bank PLC Dr. S. Kelegama Borrowed Funds 300.0 281.9

(Resigned w.e.f. 30.12.2011) Interest Expense 36.2 16.6

Reality Lanka Ltd. (Associate Company) Mr. H.D.S. Amarasuriya Loan Receivable 73.6 73.6

Mr. H.A. Pieris Interest Income – 4.3

Mr. V.G.K. Vidyaratne Interest Receivable – –

Mr. G.J. Walker Investment in Shares – 24.0

Rent Charge 4.1 4.2

Regnis Appliances (Pvt) Ltd. Mr. H.D.S. Amarasuriya Purchases 759.1 485.0

Mr. H.A. Pieris Settlements 1043.1 618.0

Mr. V.G.K. Vidyaratne Expenses Paid 1.6 1.0

Mr. A.N. Majeed Finance Charges 6.8 3.0

Loan Granted – 100.0

Loan Recovered 80.0 –

Non Trade Settlements 9.0 –

Loan Receivable 20.0 100.0

Balance Receivable 127.5 –

Balance Payable – 32.8

Fintravels Ltd. Dr. G.C.B. Wijeyesinghe Business Transactions 9.5 5.5


40. Transactions with Key Management Personnel(a) Key Management Personnel includes members of the Board of Directors of the Company, its Subsidiary and Parent. Transaction with Key

Management Personnel, their close family members and parties/entities in which such Key Management Personnel or their close family

members have control, joint control or significant influence can be shown as follows:


(i) Transactions with Key Management Personnel or Close Family Members

Deposit Kept by Key Management Personnel or their close family members at Singer Finance (Lanka) PLC. 85.9 60.3

Group Company

2012 2011 2012 2011Rs. Rs. Rs. Rs.

(ii) Compensation of Key Management Personnel

Short-Term Employee Benefits 84,878,686 63,539,518 73,466,541 54,871,469

Post-Employment Benefits Paid – – – –

In addition to their salaries the Company provides non-cash benefits to the Key Management Personnel and contributes to a post employment

defined benefit plan on their behalf. Directors’ emoluments are disclosed in Note 9 to the Financial Statements.

(iii) No transactions had taken place during the year with the parties/entities in which Key Management Personnel or their close family members

have control, joint control or significant influence.

(b) The amounts receivable from or payable by above related parties as at 31st December 2012, are disclosed in Notes 20.1, 20.2, 34.1 and

34.2 respectively.

41. Reconciliation of Transition to SLFRSAs stated in Note 1.2, these are the Company’s first Financial Statements prepared in accordance with new Sri Lanka Accounting Standards

prefixed both SLFRS (corresponding to IFRS) and LKAS (corresponding to IAS), promulgated by The Institute of Chartered Accountants of

Sri Lanka (ICASL). The Accounting Policies set out in Note 2 have been applied in preparing the Financial Statements for the year ended

31st December 2012, the comparative information presented in these Financial Statements for the year ended 31st December 2011 and in the

preparation of an opening Statement of Financial Position as at 1st January 2011 (the Company’s date of transition).

In preparing its opening SLFRS Statement of Financial Position, the Company has adjusted amounts reported previously in Financial Statements

prepared in accordance with previous SLAS. An explanation of how the transition from previous SLASs has affected the Company’s financial

position and financial performance is set out in the following tables and notes that accompany the tables.

41.1 Reconciliation of Comprehensive Income for the Year ended 31st December 2011 Group Company

For the year ended 31st December 2011Note

As per SLAS

Rs.

Effect of Transition to IFRS/LKAS

Rs.

As per SLFRS/LKAS

Rs.

As per SLAS

Rs.


Rs.

As per SLFRS/LKAS

Rs.

Revenue 41.4.1 22,010,767,109 20,886,033 22,031,653,142 20,931,312,025 13,124,600 20,944,436,625

Cost of Sales (13,655,527,677) – (13,655,527,677) (13,655,527,677) – (13,655,527,677)

Direct Interest Cost 41.4.2 (280,033,487) 385,811 (279,647,676) – – –

Gross Profit 8,075,205,945 21,271,844 8,096,477,789 7,275,784,348 13,124,600 7,288,908,948

Other Operating Income 134,709,962 – 134,709,962 167,244,869 – 167,244,869

Selling and Administration Expenses (5,449,103,540) (41,335,422) (5,490,438,962) (5,019,725,937) (17,407,771) (5,037,133,708)

Other Operating Expenses (195,965,537) – (195,965,537) (186,559,996) – (186,559,996)

Finance Cost (559,650,375) – (559,650,375) (559,650,375) – (559,650,375)

Finance Income 41.4.3 38,212,108 23,813,376 62,025,484 83,832,844 17,407,771 101,240,616

Net Finance Cost (521,438,267) 23,813,376 (497,624,891) (475,817,531) 17,407,771 (458,409,759)

Share of Loss of Equity Accounted Investees (Net of Income Tax) (638,975) – (638,975) – – –

Value Added Tax on Financial Services (56,507,301) – (56,507,301) (29,000,000) – (29,000,000)


Group CompanyFor the year ended 31st December 2011

NoteAs per SLAS

Rs.


Rs.

As per SLFRS/LKAS

Rs.

As per SLAS

Rs.


Rs.

As per SLFRS/LKAS

Rs.

Profit before Tax 1,986,262,287 3,749,798 1,990,012,085 1,731,925,753 13,124,600 1,745,050,354

Income Tax Expense 41.4.4 (679,505,974) (1,674,659) (681,180,633) (568,935,467) (4,593,610) (573,529,077)

Profit for the Period 1,306,756,313 2,075,139 1,308,831,452 1,162,990,286 8,530,990 1,171,521,277

Attributable to:

Equity Holders of the Company 1,262,654,702 3,689,102 1,266,343,804 1,162,990,286 8,530,990 1,171,521,277

Non-Controlling Interest 41.4.9 44,101,611 (1,613,963) 42,487,648 – – –

Profit for the Period 1,306,756,313 2,075,139 1,308,831,452 1,162,990,286 8,530,990 1,171,521,277

41.2 Reconciliation of Equity - Company Equity as at 31st December 2011 Equity as at 1st January 2011

(Date of Transition to SLFRS/LKAS)As at

NoteAs per SLAS Effect of Transition

to IFRS/LKASAs per

SLFRS/LKASAs per SLAS Effect of Transition

to IFRS/LKASAs per

SLFRS/LKASRs. Rs. Rs. Rs. Rs. Rs.

ASSETS

Non-Current Assets

Property, Plant & Equipment 1,659,601,041 – 1,659,601,041 1,536,053,077 – 1,536,053,077

Intangible Assets 41.4.7 141,266,387 13,750,000 155,016,387 155,618,778 13,750,000 169,368,778

Investment in Subsidiaries 400,000,000 – 400,000,000 400,000,000 – 400,000,000

Investments in Equity-Accounted Investees 48,000,000 – 48,000,000 24,000,000 – 24,000,000

Other Investments 17,020,000 – 17,020,000 17,020,000 – 17,020,000

Trade and Other Receivables 41.4.6 1,258,913,230 (36,153,168) 1,222,760,062 1,035,299,957 (21,572,806) 1,013,727,151

Deferred Tax Assets 125,501,850 – 125,501,850 114,353,256 – 114,353,256

3,650,302,508 (22,403,168) 3,627,899,340 3,282,345,068 (7,822,806) 3,274,522262

Current Assets

Inventories 3,386,044,868 – 3,386,044,868 2,115,464,054 – 2,115,464,054

Loans due from Related Parties 539,505,864 – 539,505,864 611,410,191 – 611,410,191


Amounts due from Related Parties-Trade 569,973,103 – 569,973,103 953,850,294 – 953,850,294

Amounts due from Related Parties-Non-Trade 23,539,522 – 23,539,522 29,556,243 – 29,556,243

Deposits with Banks – – – – – –

Marketable Securities – – – – – –

Cash & Cash Equivalents 364,735,727 – 364,735,727 200,402,845 – 200,402,845

9,238,606,941 (64,552,250) 9,174,054,691 7,164,100,046 (44,710,834) 7,119,389,212

Total Assets 12,888,909,449 (89,955,418) 12,801,954,031 10,446,445,114 (52,533,640) 10,393,911,474


Equity as at 31st December 2011 Equity as at 1st January 2011 (Date of Transition to SLFRS/LKAS)

As atNote

As per SLAS Effect of Transition to IFRS/LKAS

As perSLFRS/LKAS


As perSLFRS/LKAS


EQUITY AND LIABILITIES

Equity

Stated Capital 626,048,050 – 626,048,050 626,048,050 – 626,048,050

Capital Reserves 655,453,887 – 655,453,887 664,542,029 – 664,542,029

Statutory Reserve – – – – – –

Revenue Reserves 41.4.7 3,085,526,518 13,750,000 3,099,276,518 2,316,845,046 5,219,010 2,322,064,056

Total Equity Attributable for Equity Holders of the Company 41.4.8 4,367,028,455 13,750,000 4,380,778,455 3,607,435,125 5,219,010 3,612,654,135

Non-Controlling Interest – – – – – –

Total Equity 4,367,028,455 13,750,000 4,380,778,455 3,607,435,125 5,219,010 3,612,654,135

Non-Current Liabilities

Loans & Borrowings 754,125,067 – 754,125,067 1,265,832,925 – 1,265,832,925

Retirement Benefit Obligations 197,833,421 – 197,833,421 176,663,436 – 176,663,436

Deferred Taxation Liability 95,805,177 – 95,805,177 99,339,454 – 99,339,454

Security Deposits 487,448,522 – 487,448,522 403,893,567 – 403,893,567

Deposits from Customers – – – – – –

1,535,212,187 – 1,535,212,187 1,945,729,382 – 1,945,729,382

Current Liabilities

Trade and Other Payables 2,126,108,140 – 2,126,108,140 1,218,205,378 – 1,218,205,378

Deferred Revenue 41.4.5 118,358,968 (100,705,418) 17,653,550 66,283,640 (53,159,040) 13,124,600

Income Tax Payable 170,547,218 – 170,547,218 123,027,740 (4,593,610) 118,434,130

Dividends Payable 5,824,553 – 5,824,553 3,204,691 – 3,204,691

Amounts due to Related Parties-Trade 171,271,866 – 171,271,866 268,647,603 – 268,647,603

Amounts due to Related Parties - Non-Trade 73,441,026 – 73,441,026 53,272,425 – 53,272,425

Deposits from Customers – – – – – –

Loans and Borrowings 4,321,117,036 – 4,321,117,036 3,160,639,130 – 3,160,639,130

6,986,668,808 (100,705,418) 6,885,963,389 4,893,280,607 (57,752,650) 4,835,527,957

Total Equity and Liabilities 12,888,909,449 (86,955,418) 12,801,954,031 10,446,445,114 (52,533,640) 10,393,911,474

41.3 Reconciliation of Equity - Group Equity as at 31st December 2011 Equity as at 1st January 2011

(Date of Transition to SLFRS/LKAS)As at

NoteAs per SLAS Effect of Transition

to IFRS/LKASAs per

SLFRS/LKASAs per SLAS Effect of Transition

to IFRS/LKASAs per

SLFRS/LKASRs. Rs. Rs. Rs. Rs. Rs.

ASSETS

Non-Current Assets

Property, Plant & Equipment 1,691,106,605 – 1,691,106,605 1,564,239,939 – 1,564,239,939

Intangible Assets 41.4.7 153,933,369 13,750,000 167,683,369 165,189,703 13,750,000 178,939,703

Investment in Subsidiaries – – – – – –

Investments in Equity-Accounted Investees 46,885,646 – 46,885,646 23,524,621 – 23,524,621

Other Investments 17,061,300 – 17,061,300 17,061,300 – 17,061,300


Deferred Tax Assets 143,449,551 – 143,449,551 110,225,949 – 110,225,949

6,313,537,139 (29,266,260) 6,284,210,879 4,425,983,201 (23,650,574) 4,402,332,628


Equity as at 31st December 2011 Equity as at 1st January 2011 (Date of Transition to SLFRS/LKAS)

As atNote


As perSLFRS/LKAS


As perSLFRS/LKAS


Current Assets

Inventories 3,402,916,348 – 3,402,916,348 2,115,464,054 – 2,115,464,054

Loans due from Related Parties 173,634,631 – 173,634,631 202,217,767 – 202,217,767


Amounts due from Related Parties-Trade 7,986,289 – 7,986,289 6,723,621 – 6,723,621

Amounts due from Related Parties-Non-Trade 23,539,522 – 23,539,522 29,556,243 – 29,556,243

Deposits with Banks – – – – – –

Marketable Securities 290,312,617 – 290,312,617 410,551,810 – 410,551,810

Cash & Cash Equivalents 372,302,709 – 372,302,709 250,573,958 – 250,573,958

11,258,728,061 (93,839,610) 11,164,888,451 8,524,409,610 (47,277,769) 8,477,131,841

Total Assets 17,572,265,200 (123,105,870) 17,449,159,330 12,950,392,811 (70,928,342) 12,879,464,469

EQUITY AND LIABILITIES

Equity

Stated Capital 626,048,050 – 626,048,050 626,048,050 – 626,048,050

Capital Reserves 655,453,887 – 655,453,887 664,542,029 – 664,542,029

Statutory Reserve 44,407,823 – 44,407,823 10,748,118 – 10,748,118

Revenue Reserves 41.4.7/41.4.8 3,413,010,861 8,727,659 3,421,738,520 2,578,324,678 5,038,557 2,583,363,235

Total Equity Attributable for Equity Holders of the Company 4,738,920,621 8,727,659 4,747,648,280 3,879,662,875 5,038,557 3,884,701,432

Non-Controlling Interest 41.4.9 257,669,325 (1,674,114) 255,995,211 224,234,379 (60,151) 224,174,228

Total Equity 4,996,589,946 7,053,545 5,003,643,491 4,103,897,254 4,978,406 4,108,875,660

Non-Current Liabilities

Loans & Borrowings 1,110,385,067 – 1,110,385,067 1,287,290,697 – 1,287,290,697

Retirement Benefit Obligations 204,787,190 – 204,787,190 181,875,758 – 181,875,758

Deferred Taxation Liability 95,805,177 – 95,805,177 99,339,454 – 99,339,454

Security Deposits 487,448,522 – 487,448,522 403,893,567 – 403,893,567

Deposits from Customers 503,142,064 – 503,142,064 195,994,680 – 195,994,680

2,401,568,020 – 2,401,568,020 2,168,394,157 – 2,168,394,157

Current Liabilities

Trade and Other Payables 2,574,219,012 (2,754,762) 2,571,464,250 1,500,315,840 (2,368,951) 1,497,946,889

Deferred Revenue 41.4.5 139,379,298 (121,725,748) 17,653,550 79,308,834 (66,184,234) 13,124,600

Income Tax Payable 197,321,544 (5,678,905) 191,642,639 155,877,053 (7,353,564) 148,523,489

Dividends Payable 5,824,553 – 5,824,553 3,204,691 – 3,204,691

Amounts due to Related Parties-Trade 171,271,866 – 171,271,866 268,647,603 – 268,647,603

Amounts due to Related Parties - Non-Trade 73,441,026 – 73,441,026 53,272,425 – 53,272,425

Deposits from Customers 2,159,857,465 – 2,159,857,465 1,451,990,703 – 1,451,990,703

Loans and Borrowings 4,852,792,470 – 4,852,792,470 3,165,484,251 – 3,165,484,251

10,174,107,234 (130,159,415) 10,043,947,819 6,678,101,400 (75,906,749) 6,602,194,651

Total Equity and Liabilities 17,572,265,200 (123,105,870) 17,449,159,330 12,950,392,811 (70,928,342) 12,879,464,469


41.4 Explanations of Transition to SLFRS41.4.1 Revenue Recognition

Service Fee - Subsidiary Company

Due to the application of LKAS 18 the Subsidiary Company, Singer Finance (Lanka) PLC has recognised fees charged for loans as revenue as to

services are provided which resulted to the year ended 31st December 2012 was Rs. 8,280,054/-. The Group has remeasured Financial Statement

accordingly with retrospective effect.

31st December 2011

Group CompanyRs. Rs.

Revenue as Reported Previous SLAS 22,010,767,109 20,731,312,025

Adjustment to Revenue 20,886,033 13,124,600

Revenue Reported as per SLFRS 22,031,653,142 20,944,436,625

40.4.2 Finance expenses directly attributable to the Subsidiary Company Singer Finance (Lanka) PLC has been reclassified in direct interest cost

under cost of sales.

31st December 2011

Group CompanyReclassification from Reclassification to Rs. Rs.

Finance Cost Direct Interest Cost 280,033,487 –

The interest expenses on fixed deposit calculated based on effective interest rate (EIR) in line with LKAS 39.

31st December 2011


Finance Cost as Reported Previous SLAS 280,033,487 –

Adjustment to Finance Cost 385,811 –

Finance Cost Reported as per SLFRS 280,419,298 –

41.4.3 Finance Income

Staff loans that have been fair valued and recognised using market interest rate that prevailed at the grant date with the adaptation of LKAS - 39,

resulting finance income is as follows:

31st December 2011


Finance Income as Reported Previous SLAS 38,212,108 83,832,844

Adjustment to Finance Income 23,813,376 17,407,722

Finance Income as per SLFRS 62,025,484 101,240,616

Remeasured prepaid employee benefit for Company and Group amounting Rs. 17,407,772/- and Rs. 6,405,604/- adjusted in administrative

expenses.

41.4.4 Income Tax Expense

Income tax expense related to the remeasured revenue have been adjusted as follows:

31st December 2011


Tax Expenses As Reported Previous SLAS 679,505,974 568,935,467

Remeasured Income Tax 1,674,659 4,593,610

Income Tax Reported as per SLFRS 681,180,633 573,529,077


41.4.5 Deferred Revenue

Due to the application of LKAS 32 and 39, deferred revenue relating to the hire debtors have been reclassified to trade and other receivables.

Reclassification from - Deferred Revenue

Reclassification to Trade and Other Receivables Current


As at 31st December 2011 53,159,040 53,159,040

As at 1st January 2011 100,705,418 100,705,418

41.4.6 Employee Loans Recognised at Fair Value

In line with the LKAS 39, the Group and the Company have recognised employee loans at amortised cost using the effective interest rate method

and adjusted to reflect the fair value of the receivable amount.

41.4.7 Intangible Assets - Sisil Trade Mark

The Company elected to restate the Sisil trade mark its original cost at the date of transition.

41.4.8 Retained Earnings Reconciliation

The impact arising due to SLFRS adjustments are summarised as follows:

Group Company

31st December 1st January 31st December 1st January2011

Rs.2011

Rs.2011

Rs.2011

Rs.

Retained Earnings Reported at SLAS 1,213,010,861 578,324,678 885,526,516 316,845,046

Transitional Adjustments:

Revenue Recognition 11,472,485 (5,734,378) – (13,124,600)

Interest Cost 2,066,072 1,776,713 – –

Gain of Fair Value of Intangible Assets 13,750,000 13,750,000 13,750,000 13,750,000

Adjustment of Administration Expenses (22,488,923) (9,347,388) – –

Tax Adjustments of Deferred Revenue 3,928,025 4,593,610 – 4,593,610

Retained Earnings as per SLFRS/LKAS 1,221,738,519 583,363,235 899,276,516 322,064,056

41.4.9 Non-Controlling Interest (NCI)

Change in the net assets of the subsidiaries due to the SLFRS related adjustments.

Group Company

31st December 1st January 31st December 1st January2011

Rs.2011

Rs.2011

Rs.2011

Rs.

Consolidated Statement of Comprehensive Income

Changing Non-Controlling Income (1,613,963) – – –

Consolidated Statement of Financial Position

Changing Net Assets in the Subsidiary (1,674,114) – – –

41.5 Reconciliation of Statement of Cash Flows

There are no material differences between the Group and Company statement of cash flows presented under SLFRS and the cash flows presented

under SLASs.


A Decade in Perspective

Year ended 31st December 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 (Restated)

Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000

GDP Growth - % 6.0 8.3 7.0 3.5 6.0 6.8 7.7 6.2 5.4 5.9

Market Capitalisation Growth - % (22.9) 36.1 102.0 123.0 (40.4) 42.6 42.9 52.8 45.4 61.6

Trading Results

Group Turnover - Net 25,372,963 22,031,653 16,028,534 11,913,503 13,734,093 13,776,425 12,216,067 10,865,994 8,618,616 6,229,282

Profit before Tax 1,746,225 1,990,012 1,167,862 247,729 255,074 602,913 792,656 750,220 735,595 480,835

Taxation 552,789 681,181 499,042 114,830 89,616 232,698 302,356 257,304 235,237 102,570

Profit after Tax 1,193,437 1,308,831 668,819 132,899 165,458 370,215 490,300 492,916 500,358 378,265

Property, Plant & Equipment 2,151,208 1,691,107 1,564,240 1,285,728 1,445,078 1,198,303 1,063,614 842,794 451,809 374,496

Investment in Equity Accounted Investees 52,663 46,886 23,525 24,541 25,433 412,214 366,964 264,992 285,466 291,131

Other Investments 17,061 17,061 17,061 18,490 18,490 18,490 18,490 17,837 18,395 18,395

Deferred Tax 150,284 143,450 110,226 143,053 96,481 68,642 48,363 29,717 9,088 4,498

Other Non-Current Assets 5,234,046 4,385,768 2,687,281 2,205,263 2,455,481 2,145,427 1,777,522 1,267,125 813,579 488,772

Total Non-Current Assets 7,605,262 6,284,271 4,402,333 3,677,075 4,040,963 3,843,076 3,274,953 2,422,465 1,578,337 1,177,292

Current Assets 13,813,960 11,164,888 8,477,132 7,176,378 8,612,254 8,219,439 7,477,565 5,699,334 4,508,080 3,180,543

Current Liabilities 12,868,201 10,043,948 6,602,195 6,392,896 7,668,414 5,853,413 4,555,752 3,390,742 2,674,872 2,471,186

Net Current Assets 945,759 1,120,941 1,874,937 783,482 943,840 2,366,026 2,921,813 2,308,592 1,833,208 709,357

TOTAL ASSETS LESS CURRENT

LIABILITIES 8,551,021 7,405,212 6,277,270 4,460,557 4,984,803 6,209,102 6,196,766 4,731,057 3,411,545 1,886,649

Security Deposit 576,648 487,449 403,894 359,516 334,837 301,558 270,623 235,391 201,889 173,153

Loans Re-payable after One Year 1,633,823 1,110,385 1,287,291 763,936 1,444,165 2,350,644 2,826,637 1,946,780 1,331,823 300,000

Provision for Gratuity 270,539 204,787 181,876 158,546 148,418 126,889 109,623 86,562 71,362 59,303

Public Deposits 342,850 503,142 195,995 150,001 81,077 443,444 235,006 96,048 – –

Deferred Tax Liability 113,926 95,805 99,339 – 22,707 17,987 4,808 – – –

NET ASSETS 5,613,235 5,003,643 4,108,876 3,013,799 2,953,599 2,968,580 2,750,069 2,366,276 1,806,471 1,354,193

Share Capital and Reserves

Stated Capital 626,048 626,048 626,048 626,048 626,048 626,048 626,048 500,838 400,671 320,537

Capital Reserves 773,312 655,454 664,542 412,127 407,098 233,598 233,335 208,895 – 4,098

Statutory Reserves 78,425 44,408 10,748 – – – – – – –

Revenue Reserves 3,778,757 3,421,739 2,583,363 1,975,624 1,920,453 2,108,933 1,895,495 1,656,543 1,405,800 1,029,558

Shareholders’ Fund 5,256,543 4,747,648 3,884,701 3,013,799 2,953,599 2,968,579 2,754,878 2,366,276 1,806,471 1,345,193

Non-Controlling Interest 356,692 255,995 224,174 – – – – – – –

Total Equity 5,613,235 5,003,643 4,108,876 3,013,799 2,953,599 2,968,580 2,750,069 2,366,276 1,806,471 1,354,193

Ratio and Statistics

Profitability

Earning per Share - Rs. 9.05 10.11 5.34 1.06 1.32 2.96 3.92 3.94 4 3.02

Net Assets per Share - Rs. 44.83 39.96 32.82 24.07 23.59 23.71 22 18.9 14.43 10.74

Return on Average Net Assets - % 22.5 28.7 18.8 4.4 5.6 12.9 19.1 23.6 31.7 31.2

Dividends

Amount - Rs. ’000 751,258 939,072 281,722 – 250,419 125,210 156,512 125,210 100,168 112,188

Per Share - Rs. 6.00 7.5 4.5 – 4 2 2.5 2.5 2.5 3.5

Cover – 1.2 1.5 – 1.8 1.7 2.7 3 4 3.1

Others

Market Price per Share - Rs. 102.3 132.7 195 76.5 32 68 74.3 63.5 70.5 85

Price Earnings Ratio 12.69 14.2 18.3 36.1 12.1 11.5 9.5 8.1 5.7 9

Annual Sales Growth - % 15.17 37.3 34.5 (13.3) (0.3) 12.8 12.4 26.1 38.4 23.3

Current Ratio 1.1 1.1 1.3 1.1 1.3 1.4 1.6 1.7 1.7 1.3

Average Annual Inflation - % 7.6 6.7 6.9 4.8 14.4 17.5 13.7 12.6 7.5 6.3

Net Income to Net Turnover - % 4.7 5.9 4.2 1.1 1.2 2.7 4 4.5 5.8 6.1


1. Stated Capital

31st December 2012 31st December 2011

Stated Capital (Rs.) : 626,048,050 626,048,050

No. of Ordinary Shares : 125,209,610 125,209,610

Class of Shares : Ordinary Shares

Voting Rights : One Vote per Ordinary Share

2. Stock Exchange Listing The issued Ordinary Shares of Singer (Sri Lanka) PLC are listed with the Colombo Stock Exchange of Sri Lanka.

3. Distribution of Shareholding - 31st December 2012 No. of Shareholders: 31st December 2012 - 2,792 (31st December 2011 - 2,951).

Resident Non-Resident Total

No. of Shares Held

No. ofShare-

holdersNo. ofShares %

No. ofShare-


No. ofShare-


1 - 1,000 1,679 442,116 0.36 22 8,520 – 1,701 450,636 0.36

1,001 - 10,000 831 2,966,216 2.37 13 56,856 0.04 844 3,023,072 2.41

10,001 - 100,000 222 6,059,042 4.84 8 220,499 0.18 230 6,279,541 5.02

100,001 - 1,000,000 15 3,526,588 2.82 – – – 15 3,526,588 2.82

Over - 1,000,001 1 4,116,923 3.29 1 107,812,850 86.10 2 111,929,773 89.39

Total 2,748 17,110,885 13.68 44 108,098,725 86.32 2,792 125,209,610 100

31st December 2012 31st December 2011

Categories of SharesNo. of Shares

No. of Shareholders

No. of Shares

No. ofShareholders

Individuals 10,936,145 2,615 11,446,172 2,760

Institutions 114,273,465 177 113,763,438 191

Total 125,209,610 2,792 125,209,610 2,951

4. Dividends Interim Dividend 2012 - Rs. Nil (2011 - Rs. 1.50)

Final Dividend 2012 - Rs. 6.00 (2011 - Rs. 6.00)

5. Market Value Per Share 2012

Rs.2011

Rs.

Highest during the Year 138.50 - 23rd January 235.00 - 28th March

Lowest during the Year 78.00 - 31st May 92.10 - 03rd May

31st December 102.30 132.70

Share Information


6. Twenty Largest Shareholders as at 31st December 2012

Name No. of Shares %

1. Singer (Sri Lanka) BV 107,812,850 86.10

2. Bank of Ceylon A/c Ceybank Unit Trust 4,116,923 3.29

3. Bank of Ceylon A/c Ceybank Century Growth Fund 594,268 0.48

4. Miss Ranjani Eileen Weeraratne Jayasuriya 592,516 0.48

5. Mrs. Mihiri Virani Fernando 470,000 0.38

6. Mrs. Zohra Taher Jafferjee 330,890 0.26

7. Mrs. Anoma Kamalika Amarasuriya 178,970 0.14

8. Sri Lanka Insurance Corporation Ltd. - General Fund 177,500 0.14

9. Dr. Nimal Ebenezer Herat Sanderatne 175,626 0.14

10. Sampath Bank PLC/Capital Trust Holdings (Pvt) Ltd. 148,206 0.12

11. Mas Capital (Pvt) Ltd. 135,400 0.11

12. Mrs. Kalutaravedage Jinangali Manel De Silva 131,248 0.10

13. Mr. Nalin Amita De Silva 126,326 0.10

14. Jafferjee Brothers (Exports) Ltd. 125,200 0.10

15. Miss Nai Kaluge Ruvani Hemamala De Silva 118,246 0.09

16. Mrs. Enoka Kamali Wickramasinghe 112,644 0.09

17. Mr. Abeysiri Hemapala Munasinghe 109,548 0.09

18. Mr. Hemaka Devapriya Senarath Amarasuriya 89,482 0.07

19. Merchant Bank Of Sri Lanka Ltd./Union Investments Ltd. 88,894 0.07

20. Mrs. Malini Wijenaike 82,006 0.07

115,716,743 92.42

Others 9,492,867 7.58

Total 125,209,610 100

2011Name No. of Shares %

1. Singer (Sri Lanka) BV 107,812,850 86.10

2. Bank of Ceylon A/c Ceybank Unit Trust 3,549,800 2.84

3. Miss Ranjani Eileen Weeraratne Jayasuriya 592,516 0.48

4. Bank of Ceylon A/c Ceybank Century Growth Fund 512,800 0.42

5. Mrs. Mihiri Virani Fernando 460,000 0.37

6. Mrs. Zohra Taher Jafferjee 330,890 0.27

7. Mrs. Anoma Kamalika Amarasuriya 178,970 0.14

8. Sri Lanka Insurance Corporation Ltd. - General Fund 177,500 0.14

9. Dr. Nimal Ebenezer Herat Sanderatne 151,594 0.12

10. Seylan Bank PLC/Rurev Capital Ltd. 144,100 0.12

11. Capital Trust Holdings (Pvt) Ltd. 140,600 0.11

12. Mas Capital (Pvt) Ltd. 135,400 0.11

13. Mrs. Kalutaravedage Jinangali Manel De Silva 131,248 0.10

14. Mr. Nalin Amita De Silva 126,326 0.10

15. Jafferjee Brothers (Exports) Ltd. 125,200 0.10

16. Miss Nai Kaluge Ruvani Hemamala De Silva 118,246 0.09

17. Mr. Dikowita Kankanamge Athula Kithsiri Weeratunga 113,600 0.09

18. Mrs. Enoka Kamali Wickramasinghe 112,644 0.09

19. Mrs. Nanayakkara Hettige Mary Loretta Perera 109,364 0.08

20. Mr. Harsha Nilantha De Silva 90,000 0.07

115,113,648 91.94

Others 10,095,962 8.06

Total 125,209,610 100

Singer (Sri Lanka) PLC Annual Report 2012206 Share Information

7. Share TradingFor the year ended 31st December 2012 2011

Number of Transactions 2,757 11,673

Number of Shares Traded 1,852,436 13,092,800

Value of Shares Traded (Rs.) 189,951,959 1,799,248,460

8. Public Holdings The percentage of shares held by the public is 13.65% (2011 - 13.66%).

9. Record of Scrip Issues

Year ended 31st December Issue Basis No. of SharesShare Capital

Rs. ’000

1981 Prior to Public Issue – 927,600 9,276

1982 Public Issue – 1,391,400 23,190

1984 Bonus 1:02 1,159,500 34,785

1985 Bonus 1:03 1,159,500 46,380

1989 Bonus 1:01 4,638,000 92,760

1992 Bonus 1:04 2,319,000 115,950

1992 Rights (at Rs. 40/-) 1:08 1,449,375 130,444

1994 Bonus 1:15 2,608,875 156,533

1996 Bonus 2:09 3,478,500 191,318

1996 Rights (at Rs. 50/-) 1:09 1,855,766 209,875

1998 Bonus 3:11 5,723,868 267,114

2000 Bonus 1:15 5,342,276 320,537

2004 Bonus 1.04 8,013,415 400,671

2005 Bonus 1:04 10,016,769 500,838

2006 Bonus 1:04 12,520,961 626,048

2011 Subdivision 1 for 1 62,604,805 –

Total No. of Shares 125,209,610 626,048

10. Listed Debentures Details regarding the listed debentures are as follows:

1. 17% senior rated unsecured redeemable on 30th September 2015 .

Interest rate of comparable Government Securities as at date of issue, 25th October 2012 was 11.84%.

The listed debentures were not traded during the period 25th October 2012 to 31st December 2012. Therefore, highest traded price, lowest

traded price, last traded price as at 31st December 2012, interest yield and yield to maturity of trade were not available.

Debt/equity ratio, interest cover and quick asset ratio are given in Group at a glance on page 5 of this Report.

Annual Report 2012 Singer (Sri Lanka) PLC 207Share Information

Subsidiary/Associate Companies

Principal Activity Directors

Singer Finance (Lanka) PLC • Leasing Mr. H.D.S. Amarasuriya - Chairman

Singer - Interest 80.4% • Hire Purchasing Dr. S. Kelegama

• Lending and Accepting Deposits Mr. J.A. Setnkavalar (Appointed w.e.f. 22nd May 2012)

Ms. M. Tharmaratnam (Appointed w.e.f. 7th August 2012)

Mr. H.A. Pieris - Group Chief Executive Officer (Alternate Mr. M.P.A. Salgado)

Mr. G.J. Walker (Alternate Director Mr. J. Kan)

Mr. J.J. Hyun

Mr. R.S. Wijeweera - Chief Executive Officer

Mr. M.P.A. Salgado (Resigned w.e.f. 7th August 2012)

Reality Lanka Limited • Investment on Properties Mr. H.D.S. Amarasuriya - Chairman

Singer - Interest 40% Mr. H.A. Pieris - Group Chief Executive Officer

Mr. V.G.K. Vidyaratne

Mr. G.J. Walker


Singer Plus Shops Ampara

AkkaraipattuAmparaDehiattakandiyaKalmunai ‘A’Kalmunai ‘B’PadiyatalawaPottuvil

Anuradhapura

Anuradhapura ‘A’Anuradhapura ‘B’Anuradhapura ‘C’HorowpatanaKekirawaMedawachchiyaTambuththegama

Badulla

BadullaBandarawela ‘A’Bandarawela ‘B’GirandurukotteMahiyanganayaWelimada

Batticaloa

Batticaloa ‘A’Batticaloa ‘B’KattankudyValaichchenai

Colombo

AngodaAthurugiriyaAttidiyaAvissawellaBattaramullaBoralesgamuwaBorellaColpettyDehiwelaDelkandaGalle Face CourtGothatuwaHomagamaKaduwelaKatubeddaKirulaponaKohuwalaKotahenaKottawaMaharagama ‘A’Maharagama ‘B’MalabeMaradanaMilagiriyaMoratuwaNugegodaPelawattePeliyagodaPettahPiliyandalaPitakotteRajagiriyaRatmalanaThimbirigasyayaUdahamulla - MeritUnion PlaceWard PlaceWellampitiyaWellawatta

Galle

AhangamaAmbalangodaBaddegamaElpitiyaGalle ‘A’Galle ‘B’HikkaduwaNeluwa

Gampaha

DelgodaDivulapitiyaGampahaGanemullaJa-ElaKadawatha ‘B’KandanaKiribathgoda ‘A’Kiribathgoda ‘B’KirindiwelaKochchikadeMinuwangodaMirigamaNegomboNittambuwaRagamaSeeduwaVeyangodaWattalaWeliweriyaYakkala

Hambantota

AgunakolapelessaAmbalantotaHambantotaKataragamaMiddeniyaSuriyawewaTangalleTissamaharamaya

Jaffna

ChavakachcheriChunnakamJaffnaNelliadyPoint Pedro

Kalutara

AgalawattaAluthgamaBandaragamaBeruwalaHoranaKalutara ‘A’Kalutara ‘B’MatugamaPanaduraWadduwa

Kandy

DiganaGampolaGelioyaKandyKatugastotaNawalapitiyaPeradeniyaPilimatalawa

Kegalle

KegalleMawanellaRambukkanaRuwanwellaWarakapola

Kurunegala

KuliyapitiyaKurunegala ‘A’Kurunegala ‘B’MahoMawatagamaNarammalaNikaweratiyaPolgahawelaWariyapola

Matara

AkuressaDeniyayaDikwellaHakmanaKamburupitiyaMatara ‘A’Matara ‘B’UrubokkaWeligama

Mannar

Mannar

Matale

BakamunaDambullaGalewelaMatale

Moneragala

BibileButtalaMoneragalaWellawaya

NuwaraEliya

HattonNuwara Eliya ‘A’Nuwara Eliya ‘B’PussellawaRikillagaskadaTalawakelle

Polonnaruwa

HingurakgodaKaduruwelaMedirigiriyaPolonnaruwaWelikanda

Puttalam

AnamaduwaChilawDankotuwaPuttalamWennappuwa

Ratnapura

BalangodaEheliyagodaEmbilipitiyaKahawattaKuruwitaPelmadullaRatnapura ‘A’Ratnapura ‘B’

Trincomalee

TrincomaleeVakarai

Vavuniya

Vavuniya

Kilinochchi

Kilinochchi

Singer HomesBadullaColpettyGodagamaKadawataKalutaraKegalleKotteKurunegalaMaharagamaMataraNegomboNuwara EliyaRatmalanaRatnapura

Sisil ShopsAkuressaAnuradhapuraAmbalantotaBadullaBandarawelaBattaramullaBorellaChilawDambullaDiganaEheliyagodaEmbilipitiyaGalleGampahaGampolaHoranaJa-ElaJaffnaKadawathaKahawattaKalawanaKalutaraKatugastotaKegalleKuliyapitiyaKurunegalaMaharagamaMahiyanganayaMataleMataraMatugamaMawanellaMirigamaMount LaviniaNarammalaNegomboNittambuwaPanaduraPannipitiyaPelmadullaPiliyandalaRatnapuraTalawathugodaTissamaharamayaTrincomaleeUnion PlaceVavuniyaWarakapolaWattala

Mega StoresDuplication RoadGampahaKandyKandy MallKiribathgodaK-Zone - MoratuwaMaharagamaMalabeMt. LaviniaNegomboNugegodaRajagiriyaThurstan RoadWattala

Satellite ShopsAmpara

AralaganwilaHinguranaUhana

Anuradhapura

EppawelaGalenbindunuwewaGalgamuwaGalnewaKahatagasdigiliyaKebithigollewaNochchiyagamaPolpithigamaRambewaThalawaThirappaneWillachchiya

Badulla

EttampitiyaHali-ElaHasalakaHettipolaKeppetipolaMeegahakivulaPassaraUdapussellawaUdudumbara

Batticaloa

ChenkaladiGonagolla

Colombo

HanwellaKosgamaMoragahahenaNawam MawathaPadukka

Galle

BatapolaHabaraduwaImaduwaKarandeniyaPinnaduwaPitigalaTalgaswalaUdugamaUragasmanhandiyaWandurambaYakkalamulla

Gampaha

DompeKadawatha ‘A’KatanaMarandagahamullaPasyala

Hambantota

BeliattaRannaWalasmullaWeeraketiya

Jaffna

ChankanaiHospital Road, JaffnaKodikamamManipay

Kalutara

BaduraliyaBeruwelaBulathsinhalaIngiriya

Kandy

AnkumburaGalagedaraGalahaHatharaliyaddaKadugannawaMenikhinnaPoojapitiyaWattegama

Kegalle

AlawwaBulathkohupitiyaDeraniyagalaHemmatagamaKotiyakumbura

Kurunegala

DummalasuriyaGiriullaHiripitiyaIbbagamuwaMelsiripuraPannalaRideegama

Matale

NaulaPallepolaRattotaWilgamuwa

Matara

MorawakaPitabeddaraTelijjawalaThihagoda

Moneragala

BadalkumburaSiyabalanduwaThanamalwila

Nuwara Eliya

BogawantalawaGinigathhenaMaskeliyaPundaluoyaRagalaWalapane

Polonnaruwa

DiyabedumaHabaranaJayanthipuraManampitiyaMinneriya

Puttalam

AbanpolaArachchikattuwaBingiriyaKobeiganeNattandiyaNorochcholai

Ratnapura

DehiowitaDiyatalawaGodakawelaHaldemullaKalawanaKiriellaNivitigalaRakwanaYatiyantota

Trincomalee

KantalaiMuttur

Vavuniya

Padaviya

OtherKatunayake Duty Free StoreApparel Solutions

Singer Distribution Network As at 31st December 2012


Singer ServiceRegional Service CentresAmparaAnuradhapuraColomboKandyMataraPeliyagodaPolonnaruwaRatnapuraJaffna

Service Franchisee AgentsColomboAloka Engineers Anuradha Electricals Ben RefrigeratorsChamath EnterprisesChandu ElectricalsChatu Spray PaintChi Power TechnologyChirathma Electricals Cool Tech EngineersCR Engineers Dineth ElectronicsDirect Cool Ref CentreDynamic Ref Engineers E.M.P ElectricalsElectro Frost Freezair Hot & ColdIssuru Kaveen EngineersJ & U Electricals and ElectronicsMahesh Electricals & ServicesPace Electronics Ref Air ElectricalsRoyal coolRuwan Electricals S.K.ElectricalsS.N.A. Ref AirSaleena ElectronicsSamagi Ref CentreSamodha Electronics & ServicesSharp ElectronicsSilicon ElectronicsSisilasa Ref EngineeringSun Cool EnterprisesSure Freeze ( Pvt ) Ltd.Tech Way ServicesTechnico ElectronicTechnicold Electronics Temp Cool EngineeringUltra Cool Ref Centre Yellowma Airconditioning

KandyFresh Cool EnterpriseI Tec ElectronicsModern Air ConditionOminda Electricals Ranweli Ref EngineersSandamini Multi Electrical EngineersSathsara Sound Senadeera Ref Centre Super Air Electrical WorksTECH MART Techno Ref & Air EnterprisesThushara ElectronicsVimod Electricals World Air Conditioner

MataraChaminda Air Ref Eng. ServiceJanapriya ElectronicsNanayakkara ElectronicsNew Shiney ElectronicsNew Freeze Air New Lion Radio Penguin InternationalPrince ElectricalsRohan Ref CentreRuhunu Ref & Air ServicesSampath Engineering WorksSausiri ElectricalSilver Dale ElectronicsSiri Electrical & Ref Eng.U.D. Ref EngineeringVishwa Ref & Air

AnuradhapuraAnura EngineerAshoka Ref & ElectricalEmil ElectronicsJ&p ElectronicsLuxman Ref & ElectricalMayura RefMudalige ElectronicsMulty Ref & ElectricalsPrasanna ElectronicsShalini Auto CoolThilak ElectronicsUdani Electronics

RatnapuraAir TechHigh CoolHigh FrostMarriot Electricals Multi TechPathirana RefRoshan Electronics Sar Ref & Electricals T V Cntre Tele LabTharindu Electricals

AmparaAruna ElectricalAruna Ref Centre Eastern Tech Institute Hi Tech Electronics Janudha Mahaweli ElectronicsSameera Cooling ServiceTelstar Electronics

JaffnaAmbihaa ElectricalsInstitute of ACEVageetha Motors Ragu Mechanic CentreHero Service StationPunchu GarageCity Link CoolersN P M Electricals

PolonnaruwaAshoka RefDJ EngineersJ&P ElectronicsMahaweli ElectronicsMayura Ref & ElectricalsMudalige ElectronicsPrasanna ElectronicsSanath AC EngineeringThilak ElectronicsBNR EnterprisesKarunarathne MotorsNissanka MotorsTechno EngineeringThilanka MotorsUdarata MotorsVishwalak Motors K’welaArunasiri EngineeringJayathilaka MotorsDissanayake Lathe Shop

Fashion AcademiesAmbalangodaAmbalantotaAmparaAngodaAnuradhapuraBaddegamaBadullaBalangodaBandarawelaBattaramullaBatticaloaBorellaChilawDambulla DankotuwaDehiattakandiyaDickwellaEheliyagodaElpitiyaEmbilipitiyaGalewelaGalleGampahaGampolaHambantotaHattonHingurakgodaHomagama - FranchiseHoranaJa-ElaKaduruwelaKaduwelaKalutaraKandana

KandyKandy MegaKatugastotaKegalleKiribathogda - BKiribathgoda (New Welcome Store)KirindiwelaKottawaKuliyapitiyaKohuwalaKurunegalaLankadharaMahiyanganaMahoMaradanaMalabeMataraMawanellaMiddeniyaMinuwangodaMoratuwaNawalapitiyaNegomboNeluwaNittambuwaNuwara EliyaPanaduraPeliyagodaPiliyandala (Upali Trade Centre) - FranchisePussellawaRatmalana

Service Network and Fashion Academy


Glossary of Financial Terms

Accounting PoliciesSpecific principles, bases, conventions, rules and practices adopted by an enterprise in preparing and presenting Financial Statements.

AmortisationThe expense of writing off over a fixed period, the initial value of an intangible asset such as goodwill, patents etc.

Available for SaleAll assets not in any of the three categories namely held to maturity fair value through profit or loss and loan and receivables. It is a residual category does not mean that the entity stands ready to sell these all the time.

BorrowingsAll interest bearing liabilities.

Capital EmployedTotal assets less interest free liabilities, deferred income and provisions.

Capital ReservesReserves identified for specific purposes and considered not available for distribution.

Cash EquivalentsLiquid investments with original maturity periods of three months or less.

Contingent LiabilitiesConditions or situations at the Balance Sheet date the financial effect of which are to be determined by future events which may or may not occur.

Credit RatingAn evaluation of a corporate’s ability to repay its obligations or the likelihood of not defaulting, carried out by an independent rating agency.

Current RatioCurrent Assets divided by Current Liabilities. A measure of liquidity.

DebtTotal liabilities, excluding deferred income.

Debt RatioTotal liabilities divided by total assets.

Deferred TaxationThe net tax effect on items which have been included in the Income Statement, which would only qualify for inclusion on a tax return at a future date.

Dividend CoverProfit attributable to ordinary shareholders divided by gross dividend. Measures the number of times dividend is covered by distributable profit.

Dividend PayoutDividend per share divided by earnings per share.

Earnings Per ShareProfits attributable to ordinary shareholders divided by the weighted average number of ordinary shares in issue.

EquityShareholders’ funds.

Fair ValueFair value is the amount for which an asset could be exchanged between a knowledgeable, willing buyer and a knowledgeable, willing seller in an arm’s length transactions.

Financial InstrumentsFinancial Instrument is any contract that gives rise to both a financial assets in one entity and a financial liability or equity instrument in another entity.

GearingProportion of borrowings to capital employed.

Gross Dividend Portion of profits inclusive of tax withheld, distributed to shareholders.

Held to MaturityDebt assets acquired by the entity with positive intention to be held to maturity.

Interest CoverProfit before tax plus net finance cost divided by net finance cost. Measure of an entity’s debt service ability.

ImpairmentThis occurs when recoverable amount of an asset is less than its carrying value.

Market CapitalisationNumber of shares in issue multiplied by the market value of a share at the reported date.

Net Assets Per ShareShareholders’ funds divided by the weighted average number of ordinary shares in issue. A basis of share valuation.

Non-Controlling InterestEquities in a subsidiary not attributable, directly or indirectly, to a parent.

Price Earnings RatioMarket price of a share divided by earnings per share as reported at that date.

Related PartiesParties who could control or significantly influence the financial and operating policies of the business.

Return on Average Net Assets EquityAttributable profits divided by average shareholders’ funds/total equity.

Revenue ReservesReserves considered as being available for distributions and investments.

SegmentConstituent business units grouped in terms of similarity of operations and location.

Value AdditionThe quantum of wealth generated by the activities of the Group measured as the difference between turnover and the cost of materials and services bought in.

Working CapitalCapital required to finance the day-to-day operations computed as the excess of current assets over current liabilities.


Notice of Annual General Meeting

SINGER (SRI LANKA) PLC(Company Registration No. PQ 160)

NOTICE IS HEREBY GIVEN THAT THE THIRTY-EIGHTH ANNUAL

GENERAL MEETING OF SINGER (SRI LANKA) PLC, will be held at

the Registered Office of the Company, No. 80, Nawam Mawatha,

Colombo 02, on Wednesday, 27th March 2013 at 10.00 a.m. for the

following purposes:

1. To receive, consider and adopt the Report of the Directors and the

Audited Financial Statements for the year ended

31st December 2012 with the Report of the Auditors thereon.

2. To resolve declaring that the age limit stipulated in Section 210 of

the Companies Act No. 07 of 2007 shall not apply to

Dr. G.C.B. Wijeyesinghe who has attained the retirement age

stipulated in Section 210 of the said Act and who has attained

the age of 79 years on 19th February 2013 and that his

reappointment for another one year in terms of Section 211 of

the said Act is approved and to re-elect him as a Director of the

Company in terms of the said Section 211.

3. To resolve declaring that the age limit stipulated in Section 210 of

the Companies Act No. 07 of 2007 shall not apply to Deshabandu

Ajit Jayaratne who has attained the retirement age stipulated in

Section 210 of the said Act and who has attained the age of 72

years on 30th April 2012 and that his reappointment for another

one year in terms of Section 211 of the said Act is approved and

to re-elect him as a Director of the Company in terms of the said

Section 211.

4. To re-elect Mr. G.J. Walker who retires by rotation and who being

eligible is being recommended for re-election.

5. To re-elect Mr. P.J. O’Donnell who retires by rotation and who

being eligible is being recommended for re-election.

6. To authorise Directors to determine contributions to Charities.

7. To reappoint Messrs KPMG, Chartered Accountants as the

Auditors of the Company for the ensuing year and to authorise

the Directors to determine their remuneration.

By Order of the Board,

(Sgd.)

A.C.M. Irzan, FCMA (UK)Secretary

Colombo

28th February 2013

Note1. The Transfer Books of the Company will be kept open.

2. A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote instead of him/her and such proxy need not be a member of the Company. A Form of Proxy is enclosed for this purpose. The completed Form of Proxy should be deposited at the Registered Office of the Company not less than 48 hours before the time fixed for the Meeting.


Form of Proxy

SINGER (SRI LANKA) PLC(Company Registration No. PQ 160)

I / We ..............................................................................................................................................................................................................

of ........................................................................................................................................................................being a member/members of

Singer (Sri Lanka) PLC hereby appoint -

Mr. Hemaka Devapriya Senarath Amarasuriya (or failing him)

Mr. Hiran Asoka Pieris (or failing him)

Dr. Gamini Christopher Bernard Wijeyesinghe (or failing him)

Deshabandu Ajit Mahendra De Silva Jayaratne (or failing him)

Dr. Saman Bandara Kelegama (or failing him)

Mr. Gavin John Walker (or failing him)

Mr. Peter O'Donnell (or failing him)

Mr. John J Hyun (or failing him)

Mr. Vidyaratne Ganithaguruge Kulatunga Vidyaratne (or failing him)

Mr. Mahesh Hiranya Wijewardene (or failing him)

Mr. Merennege Priyath Ananda Salgado (or failing him)

Mr. Loku Narangodage Sarath Kumara Samarasinghe (or failing him)

Mr. Abdul Nasser Majeed

........................................................................................................................................................................................................................

........................................................................................................................................................................................................................of

....................................................................................................................................................................................................................

as my/our proxy to represent me/us on my/our behalf at the Annual General Meeting of the Company to be held on Wednesday, 27th March

2013 at 10.00 a.m. at the Singer (Sri Lanka) PLC, Registered Office at No. 80, Nawam Mawatha, Colombo 02, and at any adjournment thereof

and at every poll, which may be taken in consequence thereof. I/We the undersigned hereby authorise my/our proxy to vote on my/our behalf in

accordance with the preferences indicated below:

FOR AGAINST

1. To receive, consider and adopt the Report of the Directors and the Audited Financial Statements

for the year ended 31st December 2012 with the Report of the Auditors thereon.

2. To resolve that Section 210 of the Companies Act No. 07 of 2007 shall not apply to

Dr. G.C.B. Wijeyesinghe and to re-elect him as a Director.

3. To resolve that Section 210 of the Companies Act No. 07 of 2007 shall not apply to

Deshabandu Ajit Jayaratne and to re-elect him as a Director.

4. To re-elect Mr. G.J. Walker, who retires by rotation.

5. To re-elect Mr. P.J. O'Donnell, who retires by rotation.

6. To authorise Directors to determine contributions to Charities.

7. To reappoint Messrs KPMG, Chartered Accountants as the Auditors of the Company for the ensuing year and

to authorise the Directors to determine their remuneration.

As witness my/our hand this ................................................................ day of .......................................................... Two Thousand and Thirteen.

..................................................

Signature

Annual Report 2012 Singer (Sri Lanka) PLC

Instructions for Completion of Form of Proxy

If a proxy other than the names mentioned above is preferred, delete the names printed and add the name of the proxy preferred and initial

the alteration.

Please indicate how your proxy should vote by marking an ‘X’ in the cage provided for each resolution. If no indication is given, or if there is,

in the view of the proxyholder, any doubt (be reason of the manner in which the instructions contained in the Proxy have been completed) as

to the way in which the proxyholder should vote, the proxyholder in his/her discretion may vote as he/she thinks fit.

A Company/Corporation should execute the proxy under its seal in the manner authorised by its Articles of Association or Statute creating it

or under the hand of an Officer or Attorney duly authorised.

If the Form of Proxy is signed by an Attorney, a certified copy (certified by a Notary Public) of the relative Power of Attorney should also

accompany the completed Form of Proxy, if it has not already been registered with the Company and the original of the Power of Attorney

should be produced for inspection at the meeting if required.

Unless the completed Form of Proxy is deposited at the Registered Office of the Company at No. 80, Nawam Mawatha, Colombo 02,

Sri Lanka, not less than 48 hours before the time of the meeting the same will not be valid.

Singer (Sri Lanka) PLC Annual Report 2012 Form of Proxy

Corporate Information

Name of the Company Singer (Sri Lanka) PLC

Legal Form Public company with limited liability Incorporated as a public company in Sri Lanka on 30th December 1974 under the Companies Ordinance and re-registered under the Companies Act No. 07 of 2007 on 13th June 2008.

Founded in 1877 as a branch of Singer Sewing Machine Company, USA. The shares of the Company are listed on the Colombo Stock Exchange.

Accounting Year: 31st December

Registered Office No. 80, Nawam Mawatha,Colombo 2, Sri LankaTelephone: 94-11-2316316 (13 lines)Facsimile: 94-11- 2423544E-mail: [email protected]: www.singersl.com

Company Registration Number Old - PBS 802 (S.P.)New - PQ 160

Tax Payer Identification Number 124008026

Directorate H.D.S. Amarasuriya - ChairmanH.A. Pieris - Group Chief Executive Officer - Alternate L.N.S.K. SamarasingheG.C.B. WijeyesingheA.M. De S. Jayaratne - Alternate A.N. MajeedS. KelegamaP.J. O’Donnell - Alternate M.P.A. SalgadoG.J. Walker - Alternate M.H. WijewardeneJ. Hyun - Alternate V.G.K. Vidyaratne

Senior Management H.D.S. Amarasuriya - ChairmanH.A. Pieris - Chief Executive OfficerV.G.K. Vidyaratne - Group Manufacturing DirectorM.H. Wijewardene - Commercial DirectorM.P.A. Salgado - Finance DirectorL.N.S.K. Samarasinghe - Director Sales - Sewing & MarketingA.N. Majeed - Marketing Director R.S. Wijeweera - Chief Executive Officer/Director - Singer Finance (Lanka) PLCS. Ramanathan - Director - LogisticsP.L.D.C. Perera - Director - Human ResourcesA.S. Paranavitane - Director - Information TechnologyP.J.P. De Silva - Director - OperationsJ. Mendis - Credit DirectorK.K.L.P. Yatiwella - Group Finance ManagerR.C. De La Motte - Business Development Manager - Wholesale ChannelL.A.D.K. Perera - Head of Modern Trade Channel - Information TechnologyD.B. Wijesundera - Marketing Manager - White GoodsC.A. Samarasinghe - Business Development ManagerG.A.K. Weerasuriya - Senior Manager - InventoryA.P. Manoratne - Senior Manager - DistributionH.A.P.S. Perera - Factory Manager - Piliyandala FactoryM.H.M. Fairoz - Marketing Manager - ElectronicsA.U. Karunaratne - Senior Manager - Merchandise & PromotionsT.G.S. Perera - Senior Manager - RecoveriesB.T.L. Mendis - Commercial ManagerI.A.S. Kolambage - Commercial Manager - Piliyandala FactoryC.L.T.P. Rupasinghe - Senior Manager - TreasuryM.M.C. Priyanjith - Head of Risk ManagementT.P.G.D. Guruge - Marketing ManagerR.S. Singhabahu - Sales Manager - Institutional SalesM. Mahesharatnam - Business Development Manager - Sisil Channel T.M.V. Tennekoon - Marketing Manager - Digital MediaH.V. Gomes - Senior Manager - Financial ServicesO.D. Amarathunga- Senior Manager - ServicesW.L.I.A Gunathilake - Business Development Manager - Retail ChannelK.R.L. Perera - Group Administration ManagerA.R.N.P.K. Wijesundera - Sales Manager - Special ProjectsH.S. Perera - Senior Manager - Budget & Planning T.S. Martyn - Senior Manager - Apparel Solutions

Bankers Commercial Bank of Ceylon PLCNations Trust Bank PLCStandard Chartered Bank PLCHatton National Bank PLCSampath Bank PLCDeutsche BankDFCC Vardhana Bank PLCNDB Bank PLCThe Hongkong & Shanghai Banking Corporation PLCBank of CeylonMCB BankSeylan Bank PLCPeople’s BankUnion BankPan Asia Bank PLC

Auditors KPMGChartered AccountantsNo. 32A, Sir Mohamed Macan Markar MawathaP.O. Box 186,Colombo 3

Registrars Business Intelligence Ltd.No. 8, Tickell RoadColombo 8

Secretary A.C.M. Irzan FCMA (UK)

Lawyers Neelakandan & NeelakandanAttorneys-at-Law & Notaries PublicM&N Building (Level 5)No. 2, Deal PlaceColombo 3

This Singer (Sri Lanka) PLC annual report has been produced by Smart Media The Annual Report Company, a certified carbon neutral organisation. Additionally, the greenhouse gas emissions resulting from activities outsourced by Smart Media in the production of this annual report, including the usage of paper and printing, are offset through verified sources.

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2012 Results in PerspectiveSinger Group sustained its growth momentum in year 2012

Page-44

THE SINGER STRENGTHS

Singer over the years...building unique strengths and presence in a highly

competitive environment.

Chairman’s letter... it is hoped that Sri Lanka will be able to stretch the post-war peace dividend and sustain prosperity for its people. Page-7

Encompassing the futureA Year of Great Achievement in Social Responsibility SpherePage-56

Group Chief Executive Officer’s ReviewWe continued to position ourselves to be the preferred consumer durableretailer...Page-8

Annual Report 2012 - SINGER SL Files · Audit Committee Report 138 Remuneration Committee Report...

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Transcript of Annual Report 2012 - SINGER SL Files · Audit Committee Report 138 Remuneration Committee Report...