Singer India Ltd Management Discussions.

Industry Structure and Development

The Consumer durables industry is poised for a huge growth in future. In addition to the expected increase in the consumer demand due to rising middle class, other factors like climatic changes, changing lifestyle, expanding participation of women in the job market, improving electrification and more reliable supply of electricity to residential areas and pushing for more housing and reforms like GST would turn to more formal economy, are going to accelerate consumer demand for durables. The business will become more competitive and the best players with strong fundamentals would sustain and survive.

Sewing machines and the Home appliances industry in which the Company deals in continue to be dominated by the SMEs. The rural and semi urban markets still hold the major area to concentrate for the sewing machines due to increased demand and welfare schemes and skill development schemes launched by the Central/State Governments. The focus is to expand the horizon to tap the potential in the urban markets by moving from the traditional sewing machines to the Zig Zag and Electronic Sewing machines. High end artisan sewing machines and Industrial sewing machines also have a potential of growth.

The home appliances market has huge untapped potential. The focus is to harness the same with further penetration and increase in the presence through advertising and brand awareness and providing tailor-made deals to suit the demands of the customers.

Outlook & Opportunities

Considering the current market share of your Company the focus is to further increase the share of sewing machines and home appliances. The Company is focusing on improving its brand recall especially in the home appliances market, emphasis on the digital marketing and increase in the advertising spend.

Threats, Risks & Concerns

The Company had identified the following Risk areas.

1. Low growth of sewing machines market

2. Strong competition in all business segments

3. Lower margins in view of intense competition

4. Sourcing

5. Fluctuation in Foreign Exchange Rates

The Board of Directors of the Company and the Audit Committee of Directors will periodically review the risk management policy of the Company so that the risks are mitigated properly.

Segment-wise Performance

Sewing Machines Business

The Companys core business remains the sewing machines which will be protected and expanded. Efforts would be directed to increase penetration in rural markets with specific models as the market requires. The penetration in urban markets will also be intensified. The Zig Zag range which offers many features more than just sewing to the consumer to operate on mechanical, electronic and computerized machines will be expanded with reaching out to the target customers through digital marketing. Many new models in other sewing machines are also being developed to offer to specific channels. A special push to promote industrial sewing machines would be made in near future.

Home Appliances

The driver for growth in the future will be the Home Appliances business. The segment results are given in the Note 34

The Company has taken its task to expand its turnover by strengthening the product range, distribution and after sales service.

Right product mix would be the focus to improve margins.

The Company has a wide range of kitchen and home comfort small appliances and the period under review the Company also had successfully expanded its sales of air-coolers and Fans. The Company also introduced Washing Machines, Gas Tops, Microwave Ovens and Solar chargeable lights during the year under review.

Internal Control Systems and Adequacy

The Company has adequate systems of internal controls for operations, optimum utilization of resources, effective monitoring and compliance with all applicable Rules. The internal control system is commensurate with the size and its nature of operations.

A firm of Chartered Accountants conducts internal audit on quarterly basis. The Audit Committee review the Audit Reports submitted by the Internal Auditors. The Committee also meet Companys Statutory Auditors and the Internal Auditors to ascertain their views on the adequacy of internal control systems and keep the Board of Directors informed of its major observations from time to time.

Human Resources

The Company is committed to implement the highest standards of Human Resource management principles and strict compliance with regulatory requirements. The Company is making continuous efforts in respect of safety and proper education of the employees to attain the organizational goals effectively and efficiently.