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1 Design Copyright : Smart Media (Pvt) Ltd. Singer Bangladesh Limited Annual Report 2012

2 Corporate Directory The Singer Strengths Singer's proud legacy as a state of the art business entity was not built on change. Rather, it owes much to the development of six key strengths - our Brand, Distribution network, Hire purchase - easy installment, 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. Board of Directors Chairman Mahbub Jamil Managing Director A. M. Hamim Rahmatullah Directors Akhtar Imam (Independent Director) C. K. Hyder (Independent Director) Gavin J. Walker Sajidur Rahman Khan Gelmart M. Gellecanao Mohammad Sanaullah Akram Uddin Ahmed Company Secretary Mohammad Sanaullah Audit Committee C. K. Hyder (Chairman) Akhtar Imam A. M. Hamim Rahmatullah Gelmart M. Gellecanao Remuneration Committee C. K. Hyder (Chairman) Akhtar Imam Gavin J. Walker Nomination Committee Gavin J. Walker (Chairman) Akhtar Imam C. K. Hyder Management Committee A. M. Hamim Rahmatullah (Chairman) Sajidur Rahman Khan Mohammad Sanaullah Akram Uddin Ahmed Tanyeem Quarrar Mokbulla Huda Chowdhury Kazi Rafiqul Islam M. M. Ferdous Md. Ashgar Hossain Abu Zafor Md. Kibria Mokbul Ahmed (Member Secretary) Chief Financial Officer Akram Uddin Ahmed Head of Internal Audit Abu Zafor Md. Kibria Auditors S. F. Ahmed & Co. Chartered Accountants Legal Retainer Advocate Md. Matiur Rahman Bankers Trust Bank Ltd. Pubali Bank Ltd. Dhaka Bank Ltd. Bank Alfalah Ltd. Eastern Bank Ltd. The City Bank Ltd. Mutual Trust Bank Ltd. Commercial Bank of Ceylon Plc. Standard Chartered Bank Hongkong and Shanghai Banking Corporation Registered Office 39 Dilkusha Commercial Area Dhaka-1000 Corporate Office 5B, Road No Gulshan-1, Dhaka-1212 Audit and Wholesale Office H. S. Bhaban Cha-75/A, Bir Uttam Rafiqul Islam Avenue Pragati Sarani, Dhaka-1212 Singer Manufacturing Complex (SMC) Rajfulbaria, Jhamur, Savar, Dhaka-1340

3 Contents 05 Financial Highlights 08 Year at a glance 13 Board of Directors 18 Our Brand Power 19 Directors' Report 35 Statement of Value Added 41 Together We Win 43 Corporate Social Responsibility Chairman s Statement Singer is in an envious position of controlling many powerful world class brands Page 10 6,703 million Taka Sales Sales grew by 23% crossing taka 6, million compared to previous year's sales of taka 5,461 million Page million Taka Profit after Tax Profit after tax was taka 490 million which is 22.72% higher than last year reflects extremely encouraging financial performance Page 65 Our Vision To be the most admired and respected family company in the country. Our Mission Our mission is o improve the quality of life of people by providing comforts and conveniences at affordable prices. Our Values Consumers We live up to the expectations of a responsible organisation by contributing to the improvement in the quality of life of our customers through outstanding product & services. Employees We respect each other as individuals and encourage cross functional teamwork while providing opportunities for career development. Shareholders We provide a reasonable return to our shareholders while safeguarding their investment. Singer takes its role as a member of the community and as per its ability to make people s lives more comfortable. 45 Financial Review Page 38 Chief Executive Officer's Review We were able to achieve strong growth in revenue and profit Page 38 Suppliers We develop our suppliers to be partners in progress and share our growth with them. Competitors We respect our competitors and recognise their contribution to market value. Community We conduct our business by conforming to the ethics of our country and share the social responsibility of the less fortunate 49 Risk Management 56 Remuneration Committee Report 57 Audit Committee Report 60 Directors' Responsibilities for Financial Statements Page Governance We are in business to be profitable having good corporate reputation Page 24 Our Objectives To be the market leader in our product range and market segment. Provide our consumers with the best service & shopping experience in the country. Provide our consumers with products of latest technology. Develop our employees to achieve their real potential. 61 Financial Reports Provide our shareholders with steady asset growth and return on investment above the industry norm. Grow our revenue and profits at a rate above the industry norm.

4 Singer at a Glance Financial Highlights Extension and modernisation of outlets Sales Network Taka Taka Taka Taka Taka Million Million Million Million Million 6, , , , , Operating profit before Interest & Tax Profit before Tax , Profit after Tax , Paid up Capital , , , , , , , , , , , Dividend per share (Taka) * Earnings Per Share (Taka) Price Earning Ratio (Times) Net Asset per Share (Taka) Return on Average Net Assets (%) Debt Equity Ratio (%) Interest Cover N/A N/A N/A Current Ratio ,459 11,623 8,518 4,257 5, Singer has the largest retail network in country. In 2012, the company added 25 new Shops to its fleet totaling 338 at year end. 49 Nilphamari Rangpur Thakurgaon Turnover Lalmonirhat Dinajpur Kurigram Bogra 2 Shirajgonj Sylhet Faridpur Narail Jessore Madaripur Gopalgonj Satkhira Khulna Barisal Shareholders' Equity Property, Plant & Equipment Feni Bagerhat Noakhali Pirojpur Chittagong Bandarban Investments Cox's Bazar 8 Patuakhali Net Current Assets Shareholders Bhola Jhalokhati 2009 Rangamati 1 Borguna Capital Reserve Comilla Chandpur Shariatpur Khagrachari 3 2 Revaluation Reserve Narayanganj Munshigang 7 4 Revenue Reserve Dhaka Singer encourages communications with shareholders throughout the year and welcomes their participation at shareholders' meeting. Numbers Laxmipur 11, Singer People 969 Gross Dividends Numbers , Numbers Pabna Kushtia Manikgonj Meherpur Rajbari Chuadanga Jhinaidah Magura 5 4, Numbers 3 Natore Rajshahi Mymensingh Kishoregonj Moulavi Bazar Habiganj Tangail Gazipur Narshingdi Brahmanbaria 9 8, Numbers , Chapainawabgonj Sunamgonj 338 Netrokona Jamalpur Sherpur 5 8 Naogaon Joypurhat Gaibandha 2 Market value per share at year end (Taka) Net Income to Net Turnover (%) Acid Ratio Revenue Tk. Mn Number of Shareholders 7,000 Number of Employees 6,000 * Includes 50% interim & 100% final (75% cash & 25% stock) 5,000 4,000 3,000 Turnover % (Tk. 6,703.36m) Profit before tax Profit after tax % (Tk m) % (Tk m) 2,000 1, Singer Bangladesh Limited Annual Report % (Tk. 5,461.23m) % (Tk m) % (Tk m) 000 Singer Bangladesh Limited Annual Report

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6 Year at a Glance Operating Highlights and Significant Events JANUARY MAY SEPTEMBER Singer Bangladesh Limited Profile Upgraded Gulshan Shop as SINGER MEGA A new Singer Plus Shop was opened at Rajbari Launched Singer Technologies Blu Ray DVD Player The Annual Sales Conference was held at Pan Pacific Sonargaon on January 27 and 28 Singer Annual Dealer Convention was held at Winter Garden, Hotel Rupashi Bangla from January 29 Renovated Mugda Singer Plus Shop, Dhaka Renovated Gazipur Singer Plus Shop Upgraded Bangla Motor Showroom as SINGER MEGA Opened two new Singer Plus Showroom at Razendrapur and Kashimpur in Gazipur Malibag Shop got upgraded as SINGER MEGA The official launch of DAWLANCE brand Refrigerator Shariatpur saw the opening of a new Singer Plus Shop Renovated Ibrahimpur Singer Plus Shop Renovated Dorgamoholla Singer Plus Shop in Sylhet Renovated Hemayetpur Singer Plus Shop at Savar Singer has been operating in this region (now Bangladesh) since 1905, when the first Singer sewing machines went on sale at Chittagong and Dhaka stores and at that time the country was a part of the Indian sub continent. After the partition of the Indian Sub Continent in 1947, Singer in East Pakistan operated as a branch of Singer Pakistan and the products used to come from West Pakistan. the initial stage marketing operation was carried out through only 10 shops, which increased to 43 by the late 1960s. FEBRUARY Launched Samsung Digital Camera Renovated Netrokona Singer Plus Shop Renovated Maijdee Singer Plus Shop MARCH Opened two new Singer Plus Shops at Bogra and Natore Renovated Meherpur Singer Plus Shop Renovated Meherpur Singer Plus Shop JUNE Upgraded one shop as SINGER MEGA - Jessore Three Singer Plus Shop was opened in Mohammadpur, Habiganj and Keranigonj Renovated Thakurgaon Singer Plus Shop JULY Upgraded Pallabi Shop as SINGER MEGA Opened the new Singer Plus Shop Muradpur in Chittagong, Cox Bazar, Motlab in Chandpur, Sundorgaonj at Gaibanda and Tangail OCTOBER Upgraded one shop as SINGER MEGA Mohammadpur Re-introduced SKYWORTH Brand of Panel Television Five new Singer Plus Shop was opened in Mohammadpur, Patuakhali, Noakhali, Rajshahi and Noagaon Renovated Mymensingh Singer Plus Shop Renovated Jatrabari Singer Plus Shop NOVEMBER Officially launched GODREJ brand refrigerators Officially launched VIDEOCON brand refrigerators Renovated Narayangonj Singer Plus Shop Renovated Chapainawabgonj Singer Plus Shop Renovated Shafipur Singer Plus Shop in Gazipur Renovated Bogra Singer Plus Shop KINGBODONTI or BRAVERY award given In December 16, 1971 Bangladesh emerged as a sovereign state. As a result the East Pakistan Branch Office was elevated to a Country Office and the sewing machines were made available from different Singer overseas sources. Singer Bangladesh Limited was incorporated as a private limited company on 4 September 1979 under Companies Act It was converted into a public limited company in 1983 when it offered its shares to the public with the requisite permission from the Government. Since its inception in Bangladesh, the name Singer has been synonymous with the sewing machine. Although Singer Corporation started diversification of its product range in early sixties, Singer Bangladesh Limited was a company with a single product - sewing machine till A single product sewing machine company began into a multi-product consumer durable company in Today, Singer Bangladesh Limited is a large, diversified company with unmatched presence throughout Bangladesh. Beginning with the sewing machine, Singer's product portfolio has diversified to encompass a highly successful multi-brand strategy combining products of top world marques with the company's own products across a range of electrical home appliances. Hire Purchase scheme is one of the cardinal factors for the success of the Company. This scheme is innovative and appropriate for Bangladesh considering the socio-economic conditions of the country. APRIL Uttara and Kalbagan Shop got upgraded as SINGER MEGA Renovated Nilphamari Singer Plus Shop Renovated Lalmonirhat Singer Plus Shop Renovated Tantibazar Singer Plus Shop AUGUST Officially launched ONIDA brand LED TVs Singer Plus Shop was opened in Tangail, Cox Bazar, Chittagong, Bhola and Madaripur Investors relation program held DECEMBER Pirganj in Rangpur saw the opening of a new Singer Plus Shop Renovated Sremongol and Inderhat Singer Plus Shop Renovated Keranigonj Singer Plus Shop in Dhaka Singer Bangladesh Limited remains a member of the Worldwide Singer family. Singer Bhold B.V. is the majority shareholder in the company, holding a stake of 75%. The public shareholding accounts for 25%. Singer Bangladesh Limited was listed with the Dhaka Stock exchange in 1983 and Chittagong Stock Exchange in nd Annual General Meeting held 8 Singer Bangladesh Limited Annual Report 2012 Singer Bangladesh Limited Annual Report

7 Chairman's Statement Singer is in an envious position of controlling many powerful world class brands. Dear Shareholders, It is my pleasure to introduce the Annual Report of Singer Bangladesh Limited along with the audited financial statements and Auditors Report thereon for the year ended December 31, Despite continued slower rates of economic growth and high inflation on commodity & food prices in 2012, your company performed well in terms of growth and profitability. - Sales increased by 22.74% amounting to Tk. 6,703 million; - Operating profit went up by 51.53% compared to last year; - Net income increased to Tk. 490 million that is 22.72% higher than Business Condition In the year 2012, the economy was faced with very high inflation on commodity & food prices. The weak Taka exchange rates, higher interest rate and imposition of regulatory duties also weighed on the purchasing power of consumers which in turns affected our business to some extent. Despite these, Singer Bangladesh was able to achieve its business plan. Our key strengths were as usual our Singer brand and multi brand, our nationwide distribution network, our ability to offer hire purchase easy installment, faster information system - and most importantly our people who helped us to bring strong results to go forward. Increasing Returns to Shareholders As investments need return, your needs and concerns remain central to our thinking; therefore this year we were able to strengthen our earnings. Net profit grew by 22.72% that meant to a good leap from Tk Million to Tk Million. Earnings per share increased to 12.49%. Net assets per share rose by 15.50%. Based on the performance of the Company the Board of Directors declared Interim 50% which was paid in August The Board of Directors further recommended a Final 75% in Cash and 25% Stock, total dividend for the year would therefore 150%. Singer Investors Relations Event In 2012, Singer Bangladesh Limited arranged for the Institutional Investors an official news release and presentation on the second quarter result. As a leading corporate house and a listed company, Singer is trying to establish the best Investor Relations practices through effective communication with its Investors and other stakeholders Awards and Recognition During the year, Singer received the following awards and recognitions for its success: Fifth Highest Tax Payers Award for by the Bangladesh Customs Authority of National Board of Revenue (NBR); Third Prize from the Institute of Chartered Accountants of Bangladesh (ICAB) in the manufacturing sector for Best Published Accounts and Reports for the Annual Report 2011; Certificate of Merit from the Institute of Cost and Management Accountants (ICMAB) in the ICMAB Best Corporate Award 2012; Merit Award from the South Asian Federation of Accountants (SAFA) in the manufacturing sector for Best Presented Annual Report These awards and recognitions are ample testimony to our commitment to transparency and disclosure of information. Conclusion I want to acknowledge and offer my heartfelt thanks to everyone on whom the company relies for necessary support. I also want to acknowledge our debt to the Board of Directors for their ongoing guidance and counsel and for their invaluable support to me and the company during the reporting period. And finally, I would like to express my gratitude to you, the Singer shareholder for rendering support and believing in the strengths of our management team as we continue on our path towards sustainable and profitable growth. Needless to say, your needs and concerns remain central to our thinking and plans. Thank you again for your interest in Singer Bangladesh Limited. Mahbub Jamil Chairman March 25, Singer Bangladesh Limited Annual Report 2012 Singer Bangladesh Limited Annual Report

8 Recognition Board of Directors Mahbub Jamil Chairman (Non Executive) Joined the Board of Singer Bangladesh Limited on September Served as Managing Director of Singer Bangladesh Limited for more than 24 years. Has been serving as Chairman since October 4, Former Vice President, Singer Asia and Retail Holdings N.V. Joined the Board of the International Leasing and Financial Services Limited (ILFSL) on March 5, 1996 and elected its Chairman on June 21, He is also the Chairman of ICE Retail Initiative Limited and Chairman of IL Capital Limited. He is also Advisor to the Board of Robi Axiata Limited. Served as Special Assistant to the Chief Adviser of the Caretaker Government of Bangladesh in 2008, as a Cabinet Minister. He was in charge of Ministry of Industries, Ministry of Civil Aviation & Tourism and Ministry of Youth & Sports. Presently Mr. Jamil is the Board Member of International Chamber of Commerce Bangladesh, Member of the Trustee Board of Bishwa Sahittaya Kendro (World Literature Center), and member of Eisenhower Fellowship Committee - Bangladesh. Former Director of Micro Industries Development Assistance Services (MIDAS), President of the Foreign Investors' Chamber of Commerce and industry, President of the Metropolitan Chamber of Commerce and Industry and former Member of Academic Council of BRAC University, Committee Member of Bangladesh Employers' Federation. Founder member of American Chamber of Commerce. Mr. Jamil received Sir Jagadis Chandra Bose Gold Medal in 1984 for Business Management and in 1995 Bangladesh Education Management Trust Gold Medal for Management Excellence. Received the Industry Southeast Bank Award for Management Excellence and Life Time Achievement Award by Annokotha and Rapport Award for Excellence in Human Resources in A.M. Hamim Rahmatullah Managing Director & CEO Joined the Board of Singer Bangladesh Limited on August 1, Mr. A.M. Hamim Rahmatullah has been appointed as the Managing Director of Singer Bangladesh Limited on February 1, In July 10, 2009, he was appointed as the Vice President of Singer Asia Limited. Prior to that, he served as Director and Chief Operating Officer of Singer Bangladesh Limited. Mr. Hamim was the immediate past President of Foreign Investors Chambers of Commerce & Industry (FICCI) and has also been nominated as a Commercially Important Person (CIP) by the Government of Bangladesh. He has an MBA specialized in Marketing from the Institute of Business Administration (IBA), University of Dhaka. He started his professional career in 1985 with Philips Bangladesh Limited in their Consumer Electronic Division and joined Singer Bangladesh Limited in Mr. Hamim has been with the Company for over 24 years. Akhtar Imam Independent Director Joined the Board of Singer Bangladesh Limited on January 14, Barrister Imam is a senior advocate of the Supreme Court of Bangladesh and has been involved in some of the leading constitutional and sensational cases. Besides having a successful legal practice, he was and is associated with a number of large organizations / business houses as an adviser. He was the first Bangladeshi President of the Students Union of the Hon'ble Society of Lincolns Inn and President of the Barristers Association of Bangladesh. He was a lecturer in law in various institutions in England and also in the Dhaka University. He is the elected Chairperson of Marie Stopes Clinic Society and Marie Stopes Bangladesh, two of the leading NGOs in the health sector with a vast network of clinics across Bangladesh. A life member of the Diabetic Association of Bangladesh and various social clubs and also an avid Rotarian, Barrister Imam was closely associated with a movement to increase corporate involvement in HIV/AIDS prevention and to promote awareness about human rights and ethical issues involving those infected with HIV/AIDS. 12 Singer Bangladesh Limited Annual Report 2012 Singer Bangladesh Limited Annual Report

9 C. K. Hyder Independent Director Gavin J. Walker Director Sajidur Rahman Khan Director Gelmart Gellecanao Director Mohammad Sanaullah Director Akram Uddin Ahmed Director Joined the Board of Singer Bangladesh Limited on the March 31st Joined the Board of Singer Bangladesh Limited as Director on October 23, Joined the Board of Singer Bangladesh Limited on August 20, Joined the Board of Singer Bangladesh Limited on October 21, Joined the Board of Singer Bangladesh Limited on October 21, Joined the Board of Singer Bangladesh Limited on October 21, Mr. Hyder served the Metropolitan Chamber of Commerce and Industry, Dhaka (MCCI) and Bangladesh Employers' Federation (BEF) for more than 44 years as the Secretary-General. st Till 31 December 2011 he was the Adviser to the Committee (Board) of the MCCI and BEF, with the status of a member of the Committee. With his long experience on trade and employment related issues, Mr. Hyder represented the government on many advisory/ implementation committees relating to trade and commerce and industrial relations. He was a Member of successive Pay and Service Commissions and Wages and Productivity Commissions of the Government of Bangladesh. Mr. Hyder holds postgraduate degrees in Commerce and Law. He also obtained postgraduate diplomas from several renowned institutions like London School of Economics, Harvard Business School, Australian Graduate School of Management, International Institute for Labour Studies. Mr. Hyder represented the Bangladesh Employers in over 22 annual conferences of the International Labour Organization (ILO) and headed several Technical Committees of the same. Mr. Walker is the President and Chief Executive Officer of Singer Asia Limited and was appointed to this position in August 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 licence). Mr. Walker serves on the Board of a number of Singer Asia subsidiaries. Mr. Khan is the Director and Chief Operating Officer of Singer Bangladesh Limited. Prior to his new assignment he served as Marketing Director. He has been with the Company for the last 39 years and held many key positions in Singer Bangladesh Limited. Mr. Gellecanao was appointed as a Vice President of the Company in July 2009 and Head of Credit of the Company in January He is also responsible for the overall planning and risk management for the Internal Audit Department. He joined the old Singer in May 1994 as an International Auditor and was responsible for the audits of various Singer companies and affiliates in Americas, Europe, Asia, Australia and Africa. He also worked as Controller in a number of Singer locations. Prior to this, Mr. Gellecanao spent 10 years at a member firm of Ernst & Young in the Philippines. He is a Certified Public Accountant (Philippines) and a Certified Internal Auditor. He has been with the Company and old Singer for over 18 years. Mr. Sanaullah is the Corporate Affairs Director and Company Secretary of Singer Bangladesh Limited, with over 27 years' exposures in business and corporate management. President, Institute of Chartered Secretaries of Bangladesh (ICSB). Director, Bangladesh Institute of Capital Market (BICM), Vice President, Intellectual Property Association of Bangladesh (IPAB). The Fellow and Founder Member of the Institute of Chartered Secretaries of Bangladesh (ICSB), Fellow of the Institute of Personnel Management Bangladesh and Member of the Institute of Internal Auditors, USA. Mr. Sanaullah holds B. Com (Hon's), M. Com in Accounting from University of Dhaka. MBA in Marketing and Post Graduate Diploma in Personnel Management. Mr. Akram is the Chief Financial Officer of Singer Bangladesh Limited. He joined Singer Bangladesh in 2002 and since then he has held several senior management positions. He is a fellow member of the Institute of Chartered Accountants of Bangladesh (ICAB). He started his professional career as a public accountant with various Audit and accounting firms including the representative of former Arthur Andersen Worldwide, SC. Throughout his 18 years professional career, he has performed in different roles, in some occasions as an Auditor, in other as a Consultant and sometimes as a trainer. 14 Singer Bangladesh Limited Annual Report 2012 Singer Bangladesh Limited Annual Report

10 The formidable Talent of People Management Team We 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!

11 Our Brand Power Brands Total of 14 Product Brands and 2 service brands. Directors Report SINGER Trusted Excellence SINGER the corporate, retail and product brand is well recognized in this country having a long heritage dating back to the British Colonial Era. Brand development has been the cornerstone of SINGER's growth strategy in Bangladesh from the late 1970'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 panel televisions, computers, white goods, brown goods and the recent start of furniture. This was achieved through brand development of products, retail and corporate through ATL, BTL, sponsorship, CSR and 360 degree interaction with consumer's day in day out. This effort paid off handsomely with the association of SINGER brand with Bravery Award KINGBODONTI, Mother and Child Care Awareness Program and so on and so forth. 'Trusted Excellence' continues to be the brand promise which is evident in the uncompromising commitment to provide pre and post after sales service to all Bangladeshis irrespective of their social spectrum. SAMSUNG Turn on Tomorrow Valued at US $ 32.0 Billion, Samsung is recognized as one of the top brands in the world. Samsung retains the NO 1 Position in Smart Phones and LED TV globally. With new products being launched frequently SAMSUNG is rapidly gaining grounds in Bangladesh with high brand recognition in the urban areas. WHIRLPOOL The World's Best Homemaker WHIRLPOOL the American brand who is the inventor of washing machine is still recognized as the largest appliance brand in the world SINGER MEGA - Grows Further SINGER MEGA was opened in 2012 in line with our commitment to serve our customers better. The newly opened shops accommodate a wide array of world class brands and the very latest products. The luxurious look and feel of the new stores allows customers to shop in comfort and ease. New Products Singer Bangladesh in partnership with Indian consumer durable giant ONIDA launched 3D and SMART LED Panel Television. Singer is the exclusive distributor of Onida s world class range of modern panel television which will be available across all Singer Stores. Singer Introduced Induction Cookers which is a modern cooking utensil. New Financial Service In 2012 Singer Bangladesh and Dipon Consultancy Services (DCS) jointly launched a financial service from all Singer Plus Shops. The purpose of this service is to provide banking facilities like, account opening, cash deposit, withdrawal and the like to the mass population through PRIME CASH BIO METRIC SMART CARD which is issued by Prime Bank, Singer Retail Academy Singer being 161 years old Multinational Company, customers expect and deserve the best from the company. In order to give them the best, continuous improvement, investment in our single most important asset our people is essential. In line with this commitment, the Singer Retail Academy has implemented consistent human resource standards such as hiring, orientation, career planning and remuneration across the shop staff. The balance scorecard is linked to the annual reward scheme, based on an evaluation criteria that takes into consideration a holistic view of important performance criteria of a retail sales management/showroom. Advancement in our IT Capability The largest home appliance and electronics retailer in Bangladesh having 338 shops across the country is now connected by a single system IFS ERP Solution thereby enabling the entire retail network to act as a single business unit. SINGER PLUS Singer Plus is the hub of the wheel of channels that make up Singer, by far the largest and the widest reaching channel of the company. Singer Plus shares a very close and emotional relationship with its customers, the reach of this channel is so huge that there are 338 shops spreading in each and every district town. SINGER Call Centre Singer is the first retailer in Bangladesh to set up a Call Centre which is open six days a week from 8 am to 8 pm. The volume of traffic which was handled this year by our call centre staff is provided below: Call Volume Inbound 23,492 19,974 Outbound 131, ,298 TOTAL 155, ,272 Type of Outbound Calls Welcome Calls 109, ,777 Arrears Follow Up 9,002 - Others 13,126 2,521 Number of Staffs 6 6 The Directors have the pleasure in presenting to the members their Report together with the audited financial statements of the Company for the year ended December 31, This report has been prepared in compliance with section 184 of the Companies Act 1994 and Bangladesh Securities and Exchange Commission Notification No. SEC/CMRRCD/ /134/Admin/44 dated 7 August 2012, Principal Activities The principal activities of the Company continued to be manufacturing and marketing of consumer electronic, home appliance, motor cycles, domestic and industrial cables. Besides these the Company carried out marketing of refrigerator & freezer, air-conditioners, computer and instant power supply, kitchen appliances and other allied products. Review of Business The Chairman's Message on page 10 and the CEO's review on pages 38 to 40 state the Company's affairs and highlight important events that occurred during the year. The Financial Review on pages 43 to 48 elaborates the financial results of the Company. These reports form an integral part of the Directors' Report. Property, Plant and Equipment During the year under review, the Company invested a sum of Tk 82.2 million in property, plant and equipment. Movement in property, plant and equipment during the year is disclosed under note 3 and annexure -I of the financial statements. Market Value of Freehold Properties All freehold land and buildings of the company revaluated by an Independent Valuer were reflected in the accounts. Total appreciation in value was credited to Revaluation Reserve after providing for withholding tax as required by IFRS. The recent valuation was carried out as on December 31, The details of the valuation are given in Note 12 to the Financial Statements on page 78 in this report. Directors' Responsibilities for Financial Statements The Statement of the Directors' Responsibilities for financial statements is given on page 60 of this report. Corporate and Financial Reporting Framework In accordance with the Bangladesh Securities and Exchange Commission's Notification SEC/CMRRCD/ /134/Admin/44 dated 7 August 2012, the Directors are pleased to confirm the following: Industry Outlook In the year 2012, economy faced inflationary pressures due to high commodity prices and food inflation. This prompted imposition of regulatory duties on many of our products which in turn affected growth reasonably. Considering the market, we were successful in creating demand for our products. We were successful in both our core businesses i.e. retail and wholesale. This gives us confidence that both the channels are able to perform well in On consolidated basis for the year 2012, revenue reached at Tk. 6,703 millions which was higher by % over the previous year's revenue of Tk. 5,461 millions. Operating profit (profit before taxes excluding other income) at Tk. 762 millions was higher by % over the previous year's operating profit of Tk. 503 millions. Net profit for the year at Tk. 490 million was higher by % over the previous year's net profit of Tk. 399 millions. We remained the country's largest retail company selling consumer electronic, home appliances, motor cycles and domestic and industrial cables. We believe we are well positioned to benefit from wide presence in almost every corner of the country. Besides, our strong financial position enabled us to take further actions in the year to increase profitability based upon our current expectations. Overall, we look to the future with confidence. Although there is still a high degree of economic uncertainty, we are confident that 2013 will be another successful year for Singer Bangladesh Limited. Segment Information The segment information is presented in the notes 19 and 27 to the financial statements in this report which is consistent with the total sales value for the purposes of evaluating performance. Products were sold through own sales centers i.e. Singer Mega, Singer Plus and also through Dealers named Singer Pro. Risk and Concern Like others, our business may also be affected by risks and uncertainties not presently known to us or that we currently believe to be immaterial. Detail of risk factors and determining how to best handle such event is given on Risk Management report on page 49 of this report. Margin Analysis Cost of goods sold for the year 2012 was Tk. 4,894 million. It was higher by % over the previous year's cost of goods though revenue was higher by %. In proportionate to revenue growth, cost of goods sold perhaps could have been lower. Due to imposition of regulatory duties on many of our products, gross profit margin didn't reach at our desired level. In spite of adverse effect of imposition of regulatory duties, gross profit margin was % for the year 2012 and previous year's gross margin was %. Net profit margin for the year 2012 was 7.32%. Extra-Ordinary Events No events of extra ordinary gain or loss occurred during the reporting period which would require adjustment or disclosure in the financial statements. Related Party Transaction Related Party Transactions are disclosed in the notes 36 of the notes to the financial statements on page Singer Bangladesh Limited Annual Report 2012 Singer Bangladesh Limited Annual Report

12 Utilization of Proceeds from Public Issue During the period no such event of collecting fund from public issues took place which would require adjustment or disclosure in the annual report. Financial Result Deterioration after the Public Issue Singer Bangladesh Limited went for Initial Public Offering (IPO) in 1983 and didn't go for any sort of offering since than and no such explanation is applicable for Singer Bangladesh Limited. Variance within the Financial Year There was no event of significant variance between quarterly financial performances during the year under reporting. Remuneration to Directors This information is incorporated in the Notes 21.2 of the notes to the financial statements on page 84 with reference to the Directors fees and remuneration figures concerning the Board of Directors including Independent Directors. Fairness of Financial Statements The financial statements together with the notes thereon have been drawn up in conformity with the Companies Act 1994 and Securities and Exchange Rules These statements present fairly the Company's state of affairs, the results of its operations, cash flow and changes in equity. Books of Accounts Proper books of accounts of the Company have been maintained. Accounting Policies Appropriate accounting policies have been consistently applied in preparation of the financial statements and the accounting estimates are based on reasonable and prudent judgment. Application of IAS/BAS & IFRS/BFRS International Accounting Standards (IAS)/Bangladesh Accounting Standards (BAS)/International Financial Reporting Standards (IFRS)/Bangladesh Financial Reporting Standards (BFRS), as applicable in Bangladesh, have been followed in preparation of the financial statements and any departure there-from has been adequately disclosed. Internal Control The systems of internal controls are sound and have been implemented and monitored effectively. Going Concern/Forward Looking Statement There are no significant doubts about the Company's ability to continue as a going concern. Significant Variance over the Last Year's Operating Result The significant deviations from last year in the operating results of the Company have been highlighted in the report and reasons thereof have been explained. Five Year's Financial Highlights The key operating and financial data for the last five years are annexed on page 5. Dividend The Board of Directors recommended final dividend of Tk per share for the year ended December 31, 2012 making total dividend of Tk. 15 (2011 Tk. 3 per share) including interim dividend Tk. 5 per share. The total dividend per share for 2012 was 400% up compared to the prior year. Board and Committee Meetings and tendance During the year Board of Directors met nine times. The attendance record of the Directors is shown in annexure III of this report. The Directors who could not attend the meetings were granted leave of absence. Pattern of Shareholding The pattern of shareholding is provided on page 34. Corporate Governance Compliance Report Singer Bangladesh Limited adheres to appropriate good Corporate Governance principles, as described on pages 31 to 33. The Company also complied with all the requirements of Corporate Governance as required by the Securities and Exchange Commission. Accordingly, Corporate Governance Compliance Report is shown in annexure I of this report. Further in compliance with the requirement of the Bangladesh Securities and Exchange Commission (BSEC) notification dated August 7, 2012, Rahman Rahman Huq, Chartered Accountants issued the Corporate Governance Compliance Certificate which is shown on page no. 30 of the report. Financial Results and Appropriations: The Directors are pleased to report the financial results for the year 2012 and recommend the following appropriations: Taka in ' Profit before taxation 668, ,702 Less: Provision for tax 177, ,105 Profit after tax 490, ,597 Add: Un-appropriated profit brought forward 1,410,448 1,108,673 Revaluation reserve & deferred tax 16,260 19,981 Profit available for distribution 1,917,081 1,528,251 Less: Appropriations Interim Dividend 196,337 - Final Dividend 392, ,803 Total Appropriation 589, ,803 Un-appropriated profit C/F 1,328,069 1,410,448 Contribution to the National Exchequer During the year under review, your Company paid Taka 2,881 million to the national exchequer in the form of corporate income tax, customs duties and value added tax. Credit Rating The Company continues to have AA+ rating in long term and ECRL-1 for short term with a stable outlook from Emerging Credit Rating Limited. The assigned rating represents the complete evaluation of the strengths of the company which is backed by very good profitability, stable liquidity, good corporate governance, and diversified portfolio of goods generating income. Reserves The total Reserves of the Company stood at Tk million, details of which are given in Notes 12 and in the Statement of Changes in Equity in the Financial Statements. Events subsequent to Balance Sheet No events occurred since the balance sheet date which would require adjustment or disclosure in the financial statements. Statutory Payments The Directors, to the best of their knowledge and belief, are satisfied that all statutory payments in relation to employees and the Government have been made up to date. Share Information and Substantial Shareholdings The distribution of shareholding, market value of shares, twenty largest shareholders and record of scrip issues are given on pages 94 and 95 of this report. Earnings per share, dividend per share and net assets per share are shown in the financial highlights section on page 5 of the annual report. Directors Name of the Directors of the company and their biographical details are shown on pages 13 to 15. Appointment of Independent Directors During the year under review, Mr. Akhtar Imam and Mr. C. K Hyder members of the Board voluntarily resigned from the Board. The Board accepted their resignations. Mr. Akhtar Imam and Mr. C. K Hyder both being eligible for appointment as Independent Directors as per the criteria set by the Bangladesh Securities and Exchange Commission (BSEC) Notification No. SEC/CMRRCD/ /134/Admin/44 dated 7 August 2012, the Board appointed them as Independent Directors of the Company for a period of three years subject to approval of the Shareholders at the upcoming annual general meeting. Recommendations for Re-election As per Article 81 of the Articles of Association of the Company, Mr. Mahbub Jamil and Mr. Gelmart M. Gellecanao retire by rotation as Directors at the upcoming Annual General Meeting and being eligible offering themselves for re-appointment. The Board recommends their re-appointment. Shareholdings of Directors at the beginning of the year and at the end of the year 2012 are shown in annexure II of this report. Contribution to CSR Detail report on corporate social responsibility is given on page 43 of this report. Appointment of Auditors As per section 210 of the Companies Act 1994, the Company's statutory Auditors Messrs. S F Ahmed & Co., Chartered Accountants retires at the 33rd Annual General Meeting as auditors of the Company. Pursuant to Bangladesh Securities and Exchange Commission (BSEC) order no SEC/CMRRCD/ /104/Admin dated July 27, 2011 the retiring Auditors are eligible for reappointment as Statutory Auditors. The Audit Committee recommended to appoint Messer's S F Ahmed & Co., Chartered Accountants as the auditors of the Company for the year 2013 at a fee of Taka 300,000 plus VAT. The Directors endorsed the recommendation of the Audit Committee for re-appointment of Messer's S F Ahmed & Co., Chartered Accountants as the auditors for the year 2013 at a fee of Taka 300,000 plus VAT. Human Resources The main strength of Singer's success is its Human Resources. As a part of its commitment to have a well trained work force, the Company gave more stress to develop management skills to suit business requirement. Various training programs and workshops were carried out during the year. Industrial relations, an important ingredient to productivity remained very cordial throughout the year. Going Concern The Board of Directors has reviewed the Company's business plan and is satisfied that the Company has adequate resources to continue its operations in the foreseeable future. Accordingly the Financial Statements are prepared based on the going concern concept. Compliance with Laws and Regulations The Company was not engaged in any activities contravening the laws and regulations. All those responsible for ensuring compliance with the provisions in various laws and regulations did so within the stipulated time. Environmental Protection To the best of Board's knowledge, the Company was not engaged in any activity which might be harmful to the environment; Conclusion The Company wishes to express its sincere appreciation to all employees of Singer Bangladesh Limited for their contribution and at the same time thank all the stakeholders for their continued support and confidence. Approved by the Board of Directors and signed, on its behalf, by A. M. Hamim Rahmatullah Managing Director Mohammad Sanaullah Director & Company Secretary Dhaka, March 19, Singer Bangladesh Limited Annual Report 2012 Singer Bangladesh Limited Annual Report

13

14 Governance: Managing Business Efficiently and Responsibly As a part of its growth strategy, the Company believes in adopting the best practices that are followed in the area of Corporate Governance to ensure full transparency and accountability in all its transactions, in order to protect the interests of its stakeholders. In this task the Board of Directors considers itself as a Trustee of its Shareholders and acknowledges its responsibilities towards them through creating and building long-term value for the shareholders. During the year under review, the Board continued its pursuit of achieving these objectives through the adoption and monitoring of corporate strategies, prudent business plans monitoring major risks of the Company's business and ensuring that the Company pursues policies and procedures to satisfy its legal and ethical responsibilities. The Board also believes that a good corporate reputation is the most valuable and competitive asset of a company. It is directly linked to uncompromising compliance with applicable laws, regulations and internal guidelines. Compliance is thus a central pillar of Singer management and corporate culture and, at the same time, an integral part of all of its business processes. The Board of Directors ensures that the activities of the Company are always conducted in accordance with the highest ethical standards to the best interest of all stakeholders and the preservation of the environment. Board Composition The Board comprises of nine members, a good blend of executives and non-executives and independent Directors having diverse and professional skills and experiences. The nonexecutives and independent Directors are from varied businesses and other background and their experience enables them to execute independent judgments on the Board where their views carry substantial weight in the decision making. They contribute to the Company's strategy and policy formulation in addition to maintaining its performance as well as its executive management. The profiles of all members of the Board are given on page 13 to 15. Responsibilities of the Board The Board is collectively responsible to the Company s shareholders as laid down in its Articles of Association and the relevant laws and Regulations. The Board directions are taken at its meetings held as per the Articles of Association. The Company Secretary calls the meetings of the Board and Board Committees, prepares the agenda in consultation with the Chairman of the Board of Directors, the Chairman of various Committees and the Managing Director. The Agenda for the meetings of the Board and its Committees, together with the appropriate supporting documents, are circulated well in advance of the Meetings. All Board members are entitled to raise other issues. The Company Secretary, who is accountable to the Board for ensuring that the Board procedures are followed and that applicable rules and regulations are complied with. Chairman and Managing Director The Chairman is a non- executive Director and responsible for leadership of the Board, for ensuring its effectiveness on all aspects of its role and also for facilitating the productive contribution of all Directors. The Managing Director has overall responsibility towards for the performance of the Company s business. He provides leadership to the Company to ensure the successful planning and execution of the objectives and strategies. In compliance with the requirement of the Bangladesh Securities and Exchange Commission (BSEC) guidelines, the roles of Chairman and Managing Director have been clearly defined by the Board of Directors. Independent Director As on December 31, 2012, the Company had nine Directors on its Board, of whom two are Independent Directors. The Company has complied with the notification of the Bangladesh Securities and Exchange Commission with regard to composition of the Board. Mr. C. K. Hyder and Mr. Akhtar Imam are Independent Directors, they are free from any business or other relationships which can materially interfere with or affect the exercise of their independent judgment. The Board believes their experience and knowledge enable them to provide both effective and constructive contribution to the Board. Board Meetings The Board meets regularly to discharge its duties effectively. 7 (Seven) Board Meetings were held during the year 2012 and the gap between two meetings did not exceed three months. The annexure-iii shows the attendance record for the Board meetings held during the year. There is extensive staff participation in decision making at all levels of the Company and strategic recommendations on material matters flow to the Board for decision. Board Committees The Board has established three Board Committees, to which it has delegated certain of its responsibilities. They are the Audit Committee, the Remuneration Committee and the Nomination Committee. Each Committee has its own terms of reference under which respective authority is delegated by the Board, which is kept under review and updated regularly to ensure that they remain consistent with the best practice. The Company Secretary provides each of the Committees with secretarial services. Committee meeting agendas, papers and minutes are made available to all members. Audit Committee The company's control mechanism is overseen by the Board's Audit Committee which comprises of one Executive Director and two Non- Executive Directors of the Company. The Chairman of the Audit Committee is an Independent Director Mr C. K. Hyder. His long career with Metropolitan Chamber of Commerce and Industry, Dhaka (MCCI) and Bangladesh Employers' Federation and extensive experience have been of great benefit to the Company over the years. His presence on the Audit Committee is seen as a strength. The committee's role is to provide a direct link between the Board and the internal and external audit functions of the Company which are broadly as follows: To review compliance with internal control systems; To review the findings of the Internal Auditor relating to various functions of the Company; To hold periodic discussions concerning the accounts of the Company, internal control systems, scope of audit and observations of the Auditors/Internal Auditors with the Statutory Auditors and Internal Auditors of the Company; To review the quarterly, half-yearly and annual financial results of the Company before submission to the Board; To make recommendations to the Board on any matter relating to the financial management of the Company, including Statutory & Internal Audit Reports; Recommending the appointment of statutory auditors and fixation of their remuneration. The Audit Committee met five times during the year. The Audit Committee meetings are attended by the Chief Financial Officer, and Head of Internal Audit and Representatives of Statutory Auditors by invitation. The Company Secretary acts as the Secretary of the Audit Committee. Remuneration Committee The Company constituted a Remuneration Committee in the year 2010 to discharge the responsibilities of the Board of Directors relating to compensation of the Company's executive directors and senior management. Remuneration Committee consists of three members, majority of whom are nonexecutive Independent Directors. The Chairman of the Committee is an Independent Director, Mr C. K. Hyder. The Remuneration Committee is responsible for ensuring motivation and retaining high caliber individuals. Reviews the performance of the CEO / Executive Directors, Senior Management and continues to 24 Singer Bangladesh Limited Annual Report 2012 Singer Bangladesh Limited Annual Report

15 The Brand Strength of 14 and counting... When a mega brand opens the door to a multi-brand marketing strategy...you get SINGER...one strong brand channelling products of 14 of the world s top brands to the widest of customer bases.

16 this annual report have been audited by Messrs. S. F. Ahmed & Co., Chartered Accountants. Internal Controls Directors are responsible for instituting a system of internal controls to ensure the effective implementation of all policies and decisions of the Board. The Board ensures that the Directors maintain full and effective control of all significant strategic, financial, organizational and compliance issues. The Directors have delegated to Management Committee the responsibility of establishing and implementing a system of internal control appropriate to the business environment in which it operates. The Company's internal controls are highlighted as follows: The definition of the organizational structure and appropriate delegation authorities to functional management. Procedure for the review and authorization of capital expenditures. Strategic planning and the related annual planning and quarterly forecasting process. Accounting and financial reporting policies to ensure the consistency, integrity and accuracy of the Company's accounting records. Reporting and review of financial results and other operating statistics as well as the Company's published half yearly and annual financial statements which are based on a standard reporting system. The Company has an internal audit department consisting of twelve members and headed by the Head of Internal Audit. The internal control system is maintained and reviewed by an internal audit function that operates on a global basis and reports to Management and the Audit Committee. The work of the internal auditors is focused on the areas of risk to the Company which is determined on the basis of a risk management approach to audit. The Company has several levels of personnel enforcing these internal controls, while the Internal Audit Department reviews the effectiveness of such controls. Company operations are also subject to review by the Corporate Internal Audit Division of the parent Company of Singer Bangladesh Limited. Compliance with the Law Ethical business conduct and compliance with applicable laws and regulations are fundamental aspects of Singer Bangladesh Limited. To this end, the Company has established procedures to ensure compliance with all applicable statutory and regulatory requirements. Relevant officials are responsible for ensuring proper compliance with applicable laws and regulations and this is being followed by the Company. Code of Ethics As an organization, our values include integrity, selfdetermination and valuing people. Our parent company has specified corporate values for the Company and stipulated a code of ethics for employees, ensuring that the latter maintain the highest integrity and comply with the relevant laws and ethical principles. Therefore, the Company considers the significance of ethical, human and environmental matters in the conduct of its business. Risk Management A properly functioning risk management system is necessary for responsible governance. The risk management system at Singer Bangladesh Limited is geared towards meeting the practical requirements of our business. It is designed to highlight risks at an early stage and to help avoid or limit them, as or where they occur. Details are provided in the section entitled Risk Management on pages 49 to 53. Communication with Shareholders The Company encourages communications with shareholders throughout the year and welcomes their participation at shareholders' meeting. Four times each year, Singer Bangladesh Limited reports to its shareholders regarding its business, financial position and earnings. An Annual General Meeting normally takes place within the first four months of each fiscal year. Among other things, the Annual General Meeting decides on the appropriation of net income, election of the Board members and the appointment of the auditors. Amendments to the Memorandum and Articles of Association and any change in the Company's paid up capital structure are approved exclusively at the Annual General Meeting and are implemented by the Board. Quarterly results The quarterly results of the Company are published in the newspapers and posted on the website of the Company shortly after its submission to the Stock Exchanges. Yearly/Half yearly results Comprehensive Annual reports and abridged half yearly reports are generally published and sent to the shareholders registered addresses through registered posts and are also displayed on the website of the Company shortly after its distribution. Investors relations - ongoing Information Official news releases and presentations are made available to Institutional Investors on quarterly basis. Apart from the financial performance, this includes business and performance overview of the company till that quarter. We are committed to maintaining the highest possible standards of quality for IR communications and, as such, will continue to provide timely, transparent and intelligible information on the performance of the Company and its strategic direction. During the year we took the opportunity of maintaining our close rapport with the Institutional Investors and other stakeholders. The company strongly believes that transparency and reliability in communication with the wider investor community will help the company to maintain a fair share price and encourage other companies to adopt a similar approach. Company s Corporate Website The Company s website is a comprehensive reference on Singer Bangladesh s management, vision, mission, value statement, investor relations, sales network, products, promotions and events. The section on Shareholders Information serves to inform the shareholders, by giving complete financial details, shareholding patterns, corporate benefits and by providing answers to frequently asked questions. In addition to information, which any company is under a legal or regulatory requirement to publish, the Company regularly publishes through the newspapers, its website at additional Company information which is updated regularly and includes company's management, marketing network, product range and other information. Dematerialization of shares as on December 31, 2011 The Company s shares are compulsorily traded in dematerialized form and are available for trading on Central depository Bangladesh Limited (CDBL). 31,208,910 Ordinary Shares of the Company representing % of the Company s share capital are dematerialized as on December 31, Going Concern The Directors report that, after making enquiries, they have a reasonable expectation that the Company has adequate resources to continue its operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the financial statements. 28 Singer Bangladesh Limited Annual Report 2012 Singer Bangladesh Limited Annual Report

17 Annexure - I Status of compliance with the conditions imposed by the Commission s Notification No. SEC/CMRRCD/ /134/Admin/44 dated 7th August, 2012 issued under section 2CC of Securities and Exchange Ordinance 1969 (Report under Condition No. 7.00) Condition Title Compliance Remarks No. Status (if any) 1.1 Board Size (number of Directors - minimum 5 and maximum 20) 1.2 Independent Directors: 1.2 (i) least one fifth of Directors should be Independent Directors; 1.2 (ii) a Independent Director does not hold any share or holds less than 1% share of the total paid-up capital; 1.2 (ii) b Non connectivity with the company's sponsor or director or shareholder who holds 1% or more shares on the basis of family relationship.; 1.2 (ii) c Does not have any other relationship, whether pecuniary or otherwise,with the company or its subsidiary/associated companies; 1.2 (ii) d Not a member, director or officer of any member of stock exchange; 1.2 (ii) e Not a shareholder, director or officer of any member of stock exchange or any intermediary of the capital market; 1.2 (ii) f Not a partner or an executive during preceding 3 years of the company's statutory audit firm.; 1.2 (ii) g Shall not be an Independent Director in more than 3 listed companies; 1.2 (ii) h Non convicted by court of competent jurisdiction for defaulting any loan payment to a bank/ non bank financial institution.; 1.2 (ii) i Non convicted for a criminal offence involving moral turpitude; 1.2 (iii) Appointment of Independent Director shall be by board of directors and subsequently approved by shareholders in the AGM; 1.2 (iv) The post of Independent Director(s) can not remain vacant for more than 90 (ninety) days. Not Applicable 1.2 (v) Code of conduct for all Board members and compliance matter; 1.2 (vi) Tenure of office of an Independent Director (for a period of 3 years, may be extended for 1 term only); 1.3 Qualification of Independent Director: 1.3 (i) Shall be a knowledgeable individual with integrity who is able to ensure compliance with financial, regulatory and corporate laws and can make meaningful contribution to business; 1.3 (ii) Should be a Business/Corporate Leader/Bureaucrat/University Teacher with Economics or Business Studies or Law background/ Professionals like Chartered Accountants, Cost & Management Accountants, Chartered Secretaries. Must have at least 12 (twelve) years of corporate management/ professional experiences; 1.3 (iii) Relaxation of qualifications of Independent Directors subject to prior approval of the Commission. Not Applicable 1.4 Chairman to the Board and Chief Executive Office shall be different individual with clearly defined respective roles and responsibilities. 1.5 The Director's Report to shareholders: 1.5 (i) Industry outlook and possible future developments in the industry; 1.5 (ii) Segment-wise or product-wise performance; 1.5 (iii) Risks and concerns; 1.5 (vi) A discussion on Cost of Goods sold, Gross Profit Margin and Net Profit Margin; 1.5 (v) Discussion on continuity of any Extra-Ordinary gain or loss; Not Applicable 1.5 (vi) Disclosure on related party transactions; 1.5 (vii) Utilization from public issues, rights issues and/or through any others instruments; Not Applicable 1.5 (viii) Explanation if the financial results deteriorate after going for IPO, RPO, Rights Offer, Direct Listing, etc.; Not Applicable 1.5 (ix) Significant variance between Quarterly Financial performance andannual Financial Statements and explanation thereon; Not Applicable 1.5 (x) Remuneration to directors including independent directors; 1.5 (xi) Fairness of financial statements; 30 Singer Bangladesh Limited Annual Report 2012 Singer Bangladesh Limited Annual Report

18 Condition Title Compliance Remarks No. Status (if any) 1.5 (xii) Maintenance of proper books of account; 1.5 (xiii) Application of appropriate accounting policies and estimates; 1.5 (xiv) Application of International Accounting Standards (IAS)/Bangladesh Accounting Standards (BAS)/International Financial Reporting Standards (IFRS)/ Bangladesh Financial Reporting Standards (BFRS); 1.5 (xv) Efficiency of Internal control system; 1.5 (xvi) Going concern (ability to continue as going concern); 1.5 (xvii) Deviations in Operating Results ((highlighting significant deviations from last year in operating result); 1.5 (xviii) Key operating and financial data (summarized financial data of at least preceding three years); 1.5 (xix) Reason for non declaration of dividend; Not Applicable 1.5 (xx) Number of Board Meetings (no. of Board Meetings held and attendance by each director); 1.5 (xxi) The pattern of shareholding: 1.5 (xxi) a Parent/Subsidiary/Associated Companies and other related parties (name wise details); 1.5 (xxi) b Directors, Chief Executive Officer, Company Secretary, Chief Financial Officer, Head of Internal Audit and their spouses and minor children (name wise details); 1.5 (xxi) c Executives; 1.5 (xxi) d Shareholders holding ten percent (10%) or more voting interest in the company (name wise details). 1.5 (xxii) Brief resume of Director in case of the appointment/re-appointment: 1.5 (xxii) a Brief resume of the director; 1.5 (xxii) b Nature of his/her expertise in specific functional areas; 1.5 (xxii) c Names of companies in which the person also holds the directorship and the membership of committees of the board. 2 Chief Financial Officer (CFO), Head of Internal Audit (HIA) and Company Secretary (CS) 2.1 Appointment of CFO, HIA & CS and define respective roles, responsibilities and duties of CFO, HIA & CS; 2.2 Presence of the CFO and CS in the Board meeting; 3 Audit Committee 3. (i) Should have an audit committee as a sub-committee of the Board of Directors; 3. (ii) Assisting Board of Directors in ensuring true and fair presentation of financial statements and also to monitor system; 3. (iii) Reporting and duties of the Audit Committee 3.1 Constitution of the Audit Committee; 3.1 (i) Composition of Audit Committee (should be composed of at least 3 (three) members; 3.1 (ii) Audit Committee Members Appointment (members should appointed by the Board with at least one independent Director); 3.1 (iii) Financially literacy of committee members (members should be financially literate); 3.1 (iv) Terms of Service of Audit Committee (Board to ensure continuity of minimum prescribed number of members); 3.1 (v) Secretary of the committee. 3.1 (vi) Quorum of the Audit Committee meeting (at least 1 Independent Director must present). 3.2 Chairman of the Audit Committee: 3.2 (i) Chairman of Audit Committee (Board to select Chairman from audit committee who shall be an Independent Director); 3.2 (ii) Presence of Chairman of the audit committee in the Annual General Meeting. 3.3 Role of the Audit Committee: 3.3 (i) Oversee the financial reporting process; 3.3 (ii) Monitor choice of accounting policies and principles; 3.3 (iii) Monitor internal control risk management process; Condition Title Compliance Remarks No. Status (if any) 3.3 (iv) Oversee hiring and performance of external auditors; 3.3 (v) Review of annual financial statements before submission to the board; 3.3 (vi) Review of quarterly and half yearly financial statement before submission to the board; 3.3 (vii) Review the adequacy of internal audit function; 3.3 (viii) Review statement of significant related party transactions submitted by the management; 3.3 (ix) Review Management Letters/ Letter of Internal Control weakness issued by statutory auditors; 3.3 (x) Reporting utilization of money raised through Initial Public Offering, Repeat Public Offering/Rights Issue in the quarterly financial statements and also to disclose statement of fund utilization for the purpose other than those stated in the offer documents/prospectus. 3.4 Reporting of the Audit Committee: (i) Reporting to the Board of Directors (ii) a Report on Conflict of Interest; Not Applicable (ii) b Report on defect in the Internal Control System to the Board of Directors; (ii) c Suspected Infringement of Laws to the Board of Directors; Not Applicable (ii) d Any Other Matter (out of the above, a-c). Not Applicable Reporting to the Authorities-BSEC (if any material impact on the financial condition & results of operation, unreasonably ignored by the management). Not Applicable 3.5 Reporting to the Shareholders (disclosure of activities of the audit committee in the annual report). 4 External/Statutory Auditors: 4 (i) Appraisal or Valuation Services (none by the external/statutory auditor); 4 (ii) Financial Information System (none by the external/statutory auditor); 4 (iii) Book Keeping or Other Services (none by the external/statutory auditor); 4 (iv) Broker-dealer Services (none by the external/statutory auditor); 4 (v) Actuarial Services (none by the external/statutory auditor); 4 (vi) Internal Audit Services (none by the external/statutory auditor); 4 (vii) Any other Services (none by the external/statutory auditor); 4 (viii) Not to possess any share of the company (none by the external/statutory auditor). 5 Subsidiary Company: 5 (i) Composition of the Board of Directors of the subsidiary company; Not Applicable 5 (ii) Presence of Independent Director of holding company in the Board of subsidiary company; Not Applicable 5 (iii) Review the Board meeting minutes of subsidiary company in the Board meeting of the holding company; Not Applicable 5 (iv) Reflection in the holding company's Board meeting minutes about review of the affairs of subsidiary company; Not Applicable 5 (v) Review the financial statements of subsidiary company, in particular the investments made by the subsidiary company. Not Applicable 6 Certification of CEO and CFO to the Board: 6 (i) a Financial statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading; 6 (i) b Financial statements together present a true and fair view of the company s affairs and are in compliance with existing accounting standards and applicable laws; 6 (ii) No transactions entered into by the company during the year which are fraudulent, illegal or violation of the company s code of conduct. 7 Reporting and Compliance of Corporate Governance: 7 (i) Certification on compliance of condition of Corporate Governance Guideline of BSEC and reporting to the shareholders; 7 (ii) Directors' report should state about the compliance with the conditions of the Corporate Governance Guideline of the Commission. 32 Singer Bangladesh Limited Annual Report 2012 Singer Bangladesh Limited Annual Report

19 The pattern of shareholding Annexure-II Statement of Value Added Name of Shareholders i) Parent / Subsidiary/Associate Companies Singer Bhold B. V. Singer Bhold B.V.- Blocked Shares ii) Directors, Company Secretary, Chief Financial Officer, Head of Internal Audit and their spouses and minor children Mr. Mahbub Jamil Mr. A. M. Hamim Rahmatullah Mr. Akhtar Imam Mr. C. K. Hyder Mr. Sajidur Rahman Khan Mr. Mohammad Sanaullah Mr. Akram Uddin Ahmed Ms. Nahar Jamil Ms. Humayra Hamim Ms. Perveen Ahmed Ms. Salma Aktar Ms. Arifa Salzana Hemon iii) Executives Mr. Mokbul Ahmed iv) Shareholders Holding Ten Percent or More Voting Interest Singer Bhold B. V. Singer Bhold B.V. - Blocked Shares Board Meeting and attendance during the year 2012 Name of Directors Mr. Mahbub Jamil Mr. A. M. Hamim Rahmatullah Mr. Akhtar Imam Mr. C. K. Hyder Mr. Gavin Walker Mr. Sajidur Rahman Khan Mr. Gelmart M. Gellecanao Mr. Mohammad Sanaullah Mr. Akram Uddin Ahmed Meeting held while a member Status Chairman Managing Director Independent Director Independent Director Director Director Director W/o. Mr. Mahbub Jamil W/o. Mr. A. M. Hamim Rahmatullah W/o. Mr. Akhtar Imam W/o. Mr. Mohammad Sanaullah W/o. Mr. Akram Uddin Ahmed % 20% Shares Held at 01 Jan 12 21,597,170 7,850,620 1, , , , ,597,170 7,850,620 No. of meetings attended in person/alternates Shares Held at 31 Dec 12 21,597,170 7,850,620 1, , , , ,597,170 7,850,620 Annexure -III Taka Taka Turnover - Gross 6,703,365,384 5,461,234,639 Other Income 5,754,419 4,273,600 6,709,119,803 5,465,508,239 Less: Cost of Materials & Services 2,747,652,533 2,620,792,294 Value Added 3,961,467,270 2,844,715,945 Distribution of Value Added To Employees and Dealers Salaries, Commission and other Benefits 459,864,662 11% 377,296,662 13% To Government Income Taxes, Duties and Value Added Tax 2,881,033,207 73% 2,048,424,912 72% To Banks and other Lenders Interest & Bank Charges 64,732,871 2% (47,116,813) -2% To Suppliers of Capital Dividend to Shareholders 314,140,640 8% 1,514,606,850 53% Retained for Reinvestment and Future Growth Depreciation 65,463,075 2% 66,514,442 2% Retained Profits 176,232,815 4% (1,115,010,108) -39% 3,961,467, % 2,844,715, % Audit Committee Meeting and attendance during the year 2012 Statement of Value Added (%) Name of Members Mr. C. K. Hyder Mr. Akhtar Imam Mr. A. M. Hamim Rahmatullah Mr. Gelmart M. Gellecano Meeting held while a member No. of meetings attended Salaries, Commission and other benefits Income Tax, Duties & Value Added Tax Interest & Bank Charges Dividends to Shareholders Remuneration Committee Meeting and attendance during the year 2012 Depreciation Retained Profits 2 4 Name of Members Meeting held while a member No. of meetings attended Mr. C. K. Hyder Mr. Akhtar Imam Mr.Gavin J. Walker Singer Bangladesh Limited Annual Report 2012 Singer Bangladesh Limited Annual Report

20 The Strength of Product Presence is invaluable Singer operates one of Bangladesh's widest multi-point distribution strategies that gets its products and services to more customers across the land than ever.

21 Chief Executive Officer s Review We were able to achieve strong growth in revenue and profit 2012 was another successful year for Singer Bangladesh Limited, despite the economic challenges faced by the country. High inflation persisted which slowed down the pace of economy. The fuel price was increased on several occasions during This pushed up the prices of the essential commodities, which in turn decreased the purchasing power of consumers. These challenges did not discourage the company. We developed and implemented appropriate strategies to counteract and diminish the adverse impact on the business. We encouraged and provided incentives to our team members to face the challenges boldly and bring about success to the company. Singer Bangladesh was successful in obtaining exclusive distributorship arrangements for a number of internationally reputed brands Huawei, Dawlance, Godrej, Onida, Prestige and Videocon. This helped the company to obtain greater market share by offering customers a more diverse range of products at differentiated price points. Scope of the Report The 33rd annual report is a cumulative description covering financial, social and governance issues in order to provide a complete picture on our operation, decision making, results of our actions taken and our involvement with stakeholders all of which are carried out in conformity with the applicable regulatory requirement. Operating Result for the year 2012 Through sincere commitment, appropriate marketing strategies, retail network expansion and proactive reaction to the challenges, Singer Bangladesh Limited was able to achieve double digit growth in almost all product categories. Strong sales growth of 75 per cent was registered in Washing Machine for the 2nd consecutive year. Sales of Panel Television grew up by 455 percent in comparison to Overall sales grew up by 23 per cent crossing Taka 6.7 billion in The operating profit increased by 52 percent reaching Taka 762 million. Financial Performance 2012 The financial performance of the company was extremely encouraging. Profit before tax was Taka 668 million which was 26 percent higher than the previous year. Earnings per share of Taka 10 denomination was Taka an increase of 23 percent in comparison to the prior year. The company continued to maintain the AA+ rating in the long term and ECRL-1 for short term indicating a stable outlook. Emerging Credit Rating Limited made this rating that was based on complete evaluation of the strengths of Singer Bangladesh backed by good profitability, stable liquidity, good corporate governance and diversified products generating reasonable income. Expansion & Relocation Singer Bangladesh markets Singer and its Multi Branded Products through two distinct channels its own retail chain store SINGER MEGA and SINGER PLUS and the Dealer Channel SINGER PRO. The company has the largest retail network in country. In 2012, the company added 25 new Shops to its fleet totaling 338 at year end. In 2012, the company opened a separate retail chain store SINGER MEGA which houses high end products for the upper echelon of the society. The company renamed its dealer channel as SINGER PRO and the number of dealers stood at 400 in 2012 while it was 250 at the end of Diversified Product Portfolio Singer obtained exclusive distributorship of the following brands for marketing their products in Bangladesh in addition to existing ones like Singer, Singtech, Whirlpool, Samsung, Haier, Siemens etc.: BRAND Videocon Onida Godrej Dawlance PRODUCT RANGES No- Frost Refrigerator, Air Coolers, CRT Television Panel Television Refrigerators, Safe Refrigerators, Microwave Ovens Inclusion of these brands allows the company to further strengthen its retail leadership in Bangladesh. In 2013, the company has ventured into the marketing of Huawei Smart Phones and furniture under the brand name of SINGER HOMES. Connecting with Customers Singer has branded its service centre as SINGER SERVICE PLUS. It has one Central Service Centre in the capital city, Dhaka and four regional centers in Chittagong, Jessore, Bogra and Syhlet to ensure quick and quality after sales service to all our valued customers. Plans are underway to establish more services centers to be nearer to the customers for their convenience so that we can render quick after sales services. As part of social commitment, in 2006 Singer introduced the CUSTOMER PROTECTION PLAN under its Hire Purchase Scheme. Under this plan, in case of an accident resulting in the death or earning disability of the hirer, the ownership right is transferred to the nominee by waving the residual amount due to the company. Similarly, if a product of the hirer is damaged or destroyed owing to natural calamities or accident, that product is replaced by a new one absolutely free of cost. Hello Singer, the first retail store customer helpline in Bangladesh was set up by the Company four years back which 38 Singer Bangladesh Limited Annual Report 2012 Singer Bangladesh Limited Annual Report

22 is open from 9 am to 8 pm six days a week. Singer Call Centre greeted more than one lac customers in 2012 who purchased products from Singer Plus Shops and their level of satisfaction with product, service, and staff behavior was inquired about. Their feedback helped us in improving the quality of services. The company also provided information on Product, Price, Location Special Promotion etc. to prospective customers who rang at Hello Singer Call Centre. In the financial sector, the utility bill pay service and mobile money re-load from Singer Shops increased significantly compared to last year. In 2012, Singer Bangladesh and Dipon Consultancy Services (DCS) jointly launched a financial service from all Singer Plus Shop. The purpose of this service is to provide banking facilities like, account opening, cash deposit, withdrawal and the like to the mass population through PRIME CASH BIO METRIC SMART CARD which is issued by the Prime Bank. Investment in Information Technology In 2012, all Singer shops, warehouses and service centres were made online using the Singer Information System. This ERP system works as a catalyst in our path towards growth by providing up-to date information to all levels of employees so that more time and effort can be put to help the company to grow further. Our People, Our Future The company puts great emphasis on their employees and their families and stands by them at their time of distress and happiness. Singer has increased the training facilities of the employees so that they can move smoothly along the career path. Industrial relation was also cordial without any day loss in productivity. Conclusion I would like to thank the members of the Board for their valuable support and guidance which helped us in achieving these result. The shareholders also deserve thanks for their continued trust and confidence in the Board of Directors and the Management. I wish to place on record my appreciation to all our staff and employees for their contribution and commitment without which it would not have been possible for us to achieve these results. A. M. Hamim Rahmatullah Managing Director & CEO Dhaka, March 25, 2013 Together We Win Our employees define who we are, what we do and how we do it. They bring values, skills, diversity and expertise to SINGER that make us compatible in the consumer durables industry in the country. To become the market leader in the consumer durables industry depends upon the potential, dedication, knowledge and performance of our employees and the excellence of senior management team. Means of growth Singer is on a continuous growth path along with the retail and wholesales (and rise in competition). The human resource team has been continually focusing on the means to achieve the Company's goals of meeting such growth targets through external recruitment & building proper skills and by improving the capabilities of existing employees through training. Recruitment To ensure clear succession plans in place for every senior role remains our long-term objective. We continue to build robust succession plans at all levels and aim at recruiting individuals who will help strengthen our core capabilities as well as our culture. Employee engagement Singer is committed to employee engagement throughout the business. Employees are kept well informed of the strategy, performance and objectives of the Company, which involve participation in annual sales conference presentations and discussions in many occasions. Web-based communication, presentations in different meetings and quarterly Singer in house magazines also provide important information. Management development The quality of current and future leadership of Singer is the key to our success. We identify employees at all management levels of Singer who have the potential to become future leaders within the organization. In order to prepare them for more complex future roles, they participate in targeted development programmes. Enabling employees to reach their personal best To reach their personal best, our employees were offered a wide variety of training and development opportunities, building on their strength, improving their skills and overcoming their own challenges. Our high priority was to match individual employee aspirations with our organizational needs. This year training and development program netted much larger number of employees. This approach had a greater focus on on-the-job and off-the-job components of learning which were as follows: 2012 Training Type Number of Trained Training Session Employees In-house Training External Training Foreign Training 5 17 In 2012, we arranged a week long residential training program on Singer Information System (SIS) for the Field Management. Singer Retail Academy (SRA) Singer Bangladesh Ltd. being a multinational company with a 161-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 part of continuous improvement and investment in our single most important asset 'our-people'. It 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. Through Singer Retail Academy guidance we formulate Balance Score Card (BSC) and Retail Ladder to rate the performance of the Shop Manager which reflects the performance of their Supervisors whom we call as Retail Management. The 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, Collection, Merchandising etc. 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 is a performance evaluation tool as well as a training need identification and post-training effectiveness measuring tool. Human Capital Strength: We have an excellent structured Human Capital in the Company. Naturally the structure is pyramid shaped. Here is a table of our strength as on December 31, 2012: Grade Number of Human Capital Sr. & Key Managers 19 Middle Managers 32 Junior Managers 69 Supervisor 102 Shop Manager 327 Staff / Worker 420 Performance management Our performance evaluation depends on prefixed objectives. Based on business targets as well as job tasks and 40 Singer Bangladesh Limited Annual Report 2012 Singer Bangladesh Limited Annual Report

23 competencies, each employee is evaluated once a year. Building on defined development goals, we offer and support our employees with targeted development activities both on and off the job. Performance driven remuneration system Singer is committed to rewarding employees with compensation and benefit programmes. Remuneration comprises fixed and variable monetary compensation, nonmonetary rewards, as well as other intangible benefits. Individual performance and business success are the key factors that determine the remuneration policy. Recognition and Motivation Singer is committed to rewarding employees with compensation and benefit programmes. Besides, monetary compensation, non-monetary rewards and other intangible benefits wait for the deserving employees with an objective to increase motivation level. This is a continuous process. Group Championship, President Club and Diamond Club status are awarded to the sales people at the colorful event of Annual Sales Conference. Besides, based on the length of service, long service award awaits for those employees who work for at least a decade. Long Service Award Singer belongs to a history of 161 years and bears a legacy of good name and fame. There is nothing to wonder that people who work in Singer possess strong bondage. Singer honors its family members recognizing their long service. The Long Service Award winners receive long awaited award in the Family Day (Annual Picnic) and also in the Annual Sales Conference. Long Service Award winners list for 2012 indicates the employer employee bondage. Category 10 yr 15 yr 20 yr 25 yr 30yr Shop Manager Management Factory Participation in the Company's Profit Employees of Singer Bangladesh Limited enjoy participation in long-standing profit sharing under Labor Act 2006 (Workers Participation in the Company's Profit, earlier it was Workers Profit Participation and Welfare Fund Act 1968). A Board of trustee sits regularly and reviews the issues and acts as appropriate. Compliance with the Law All statutory requirements with regards to the employee remuneration are complied with and compensations and rewards are linked closely to performance & longevity. The Company has a strict policy on child labor & compulsory labor, which is zero tolerance. Singer, all employees are above the age of 18. All appointments & contracts are in compliance with Labor Law of Bangladesh. In case of any disciplinary action, the Company follows all legal procedures properly to establish the rights of the employee. Equal Employment Opportunity The Company believes in equal opportunity in workplace irrespective of race, religion, sex, color. Singer believes in quality / competency while hiring workforce. As far as working environment and employee facilities are concerned, Singer is one of the leading companies in the country. Singer takes good care for a comfortable environment for the female. Occupational Safety & Health Nothing is more important to us than the safety, health and well-being of our employees. We invest time, effort and resources to protect all of our employees from harm that might be associated with their work. All protective measures have been taken to avoid accident in the workplace. Though accident is unwanted, first aid boxes and trained staffs are made available at all the locations for immediate response to any emergency. Working Environment Historically Singer Bangladesh Limited offers and maintains a very good working environment in workplace. Human Resources Department is working as mentor to the employees and manages their grievances. Industrial Relation among the factory workers may set an example to others. Singer believes in long term bonding with the employees. It is one of the oldest MNCs in this country and has employees who have been working for decades. Transparent relation between management & employees makes Singer a comfortable workplace. Corporate Social Responsibility Singer Bangladesh firmly believes that it has a moral obligation for uplifting the overall well being of the country. It takes its role very seriously as a member of the community and as per its ability to make people s lives more comfortable. This spirit of the company is reflected in its flexible payment schemes which help the citizen of the country to buy comfort and convenience products at an affordable price. The company makes available a wide array of products to suit the needs of a varied consumer. Singer being a compassionate and benevolent company receives many requests for assistance from philanthropic institutions which, after being evaluated by individuals, are passed on to the Management Committee for their consideration. In selecting a project the company not only believes in taking a long term view for maximizing its effectiveness but also believes that Singer will be an integral part of the Bangladesh picture for generation to come. Some of the ongoing CSR projects undertaken by the company are: KINGBODONTI OR BRAVERY AWARD KINGBODONTI recognizes acts of bravery by the member of the community who selflessly put themselves at risk to protect lives or property, be it their own or of others. This award is bestowed upon individuals who have overcome social vices and physical incapacitation through their own act of bravery. The purpose of introducing this award is to inspire others to show act of courage in time of distress, to turn against social vices and be a winner despite being physically handicapped. Singer partnering with Channel I, a local private television, provides award of gallantry in five different categories which are: 1. NIRBHIK KINGBODONTI: Physical Bravery Award is given to common people for performing selfless act of bravery at great personal risk to save life, or property of others. 2. DRIPTO KINGBODONTI: Physical Bravery Award is meant for the Bangladesh Police Force who shows extraordinary courage in preventing crimes while performing official duty. 3. SADHOK KINGBODONTI: Social Bravery Award recognizes individuals valiant effort in benefiting the society. 4. SHIMAI OSHIM: Mind of Steel Award recognizes the handicapped people who, despite their limitations, have performed far beyond the ordinary and pushed the limit of courage and performance to a new level. 5. AJIBON SHONMANONA: Lifetime Achievement Award recognizes outstanding citizens for their remarkable lifetime contribution to the field of social services. Applications are invited through advertisement in the print and electronic media and after verification are forwarded to the panel of judges comprising eminent personalities of the country, who then nominate an individual in each of the category. The award winners receives Taka Two Lac each along with a crest and a certificate which are given in a Singer Chanel I TV live telecast function. MOTHER AND CHILD CARE AWARENESS PROGRAM In consideration of the poor scenario in the rural health sector, Singer Bangladesh had taken up an on-going initiative in conjunction with Fareea Lara Foundation since 2006 for making a significant improvement in the lives of many rural people and bringing smile to many faces. This program has been running successfully for the last six years with the ultimate aim at Long Service Awardees 42 Singer Bangladesh Limited Annual Report 2012 Singer Bangladesh Limited Annual Report

24 Training the traditional birth attendants in order to ensure safe birth; Encouraging traditional birth attendants to refer complicated cases to medical centre located in the capital city of Dhaka. The company has bridged the foundation with Community Hospitals in Dhaka to provide free or minimum charge for treatment of such complicated cases; Making mothers aware of immunizable diseases and their prevention through traditional birth attendants; Providing awareness training on diabetics; Providing Eye Care Facilities; Educating on appropriate food nutritional needs for mother and children through Village Health Workers; Raising awareness with the help of the village Health Workers about the hazards of improper practices regarding hygienic, environmental contamination, drinking and using surface water. On Saturdays approximately 300 and on each of the remaining days of the week more than 50 persons frequent this medical centre for medical assistance. SINGER SEWING ACADEMY The Sewing Academy is an embodiment of Singer s social commitment, and it resolves to bring the company closer to the people and community. The Academy: extends its services to the women of the society for generation of income keeps the art of machine sewing alive and well helps the teachers of Franchise Schools to make a reasonable income from the fees while they give hands on training on sewing, embroidery, stitching, and cutting to the students creates an opportunity for students who pass out successfully to open their own Franchise Schools in their community, thereby keeping the cycle of sewing - learning - income generation Training program for the destitute women including the students in school and colleges and different non-governmental organizations and institutions is an on-going process and at the end of training session they are normally provided Singer Sewing Machine absolutely free of cost. Financial Review Accounting Policies The Financial Statements contained in this report are prepared in accordance with Bangladesh Financial Reporting Standards (BFRS), the Companies Act 1994, the Securities and Exchange Ordinance 1969, Securities and Exchange Rules 1987 and other applicable laws and regulations. Revenue Company turnover was Taka 6,703 million, which is favorable to prior year by Taka 1,242 million (22.74%). Company has achieved this revenue growth with especially staggering increase in sales of refrigerators, Panel television, washing machine and oven beholding a growth of 15%, 600%, 78%, and 32% respectively was relatively a challenging year in fetching high sales and realizing a decent organic growth. In 2012, the company continued to face competitions from local manufactured products,, specially refrigerators, CTV etc. which impacted on setting competitive prices of products and the local large scale manufacturers posed a threat of lowering the prices in the prevailing competition. 6, the marketing communications plan during the year under review. The objective of this approach was to yield market opportunities in the back drop of challenging market competition. Gross Profit The gross profit for the year under review was Taka 1,810 million as against Taka 1,401 million in the previous year, which is a 29.2% increase over the last year and gross profit was 27.0 vs 25.7%, which is an increase of 1.3% over the last year. In absolute terms, gross profit increased over the prior year due to reasonable growth in turnover and increase in percentage of gross profit. Gross profit percentage of the company reflects a decent increase over the prior year due to higher growth of earned carrying charges from hire purchase despite high cash conversion proclivity. In addition, escalation of costs of inventory due to adverse exchange rates was higher which could not be fully adjusted in some cases with selling prices. The reason of inadequate adjustment of costs into the prices is of demanding market competition. In spite of absorbing high costs the Company managed to grow gross profit by 1.3% point. This was achieved through continuous cost improvement process in supply chain management, pricing and other overhead costs. 4, , , , , Turnover growth in segments of appliances/electronics was 26.0% but cables did bring a negative growth of 28.4% which has brought down the overall growth to 22.71%. The decrease in sales of cables segment has been somewhat related to stagnant development of real estate sector, irregular or stoppage of electricity connections and the slow pace of industrialization. These areas have suffered an overall declining growth from lack of development. As a result, cables sales suffered and could not achieve any growth which could have contributed to the overall growth of the company Operating Profit The operating profit was increased from Taka 503 million in 2011 to Taka 762 million in The operating profit grew to 11.4% of turnover as opposed to 9.2% of the same in last year since the gross profit contributed better this year meeting various challenges of expectation. Despite increase in the provision for Our traditional product lines such as refrigerators, washing machine, sewing machine, computers, air conditioners and oven reported a substantial volume increase over the prior year. The panel television, a new product, continued to generate higher amount of revenue in the year under review compared to the previous year Reception of Singer employees Children's acclaim outstanding academic achievement The company blended together Above The Line (ATL) and Below The Line (BTL) advertising campaign and mingled into Singer Bangladesh Limited Annual Report 2012 Singer Bangladesh Limited Annual Report

25 In Serving We are Strengthened Beyond 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.

26 bad and doubtful debts, royalty and rent & occupancy expenses the operating profit achieved at a higher rate due to overall efficiency resulting in costs control. In spite of efforts taken to bring efficiency through various cost improvement measures in managing operating expenses, the company managed to materialize 11.4% operating profit which is an increase of 2.2% over the last year. As a result, the percentage of operating expenses decreased to 15.6% in 2012 as opposed to 16.4% in 2011 which contributed favorably to the growth of operating profit for the year under review. Non-operating Income Non-operating income of the Company increased compared to previous year from Taka 4 million to Taka 6 million in the year under review. Operating Expenses Operating expenses of the Company increased from Taka 898 million in 2011 to Taka 1,047 million in The increase in operating expenses was 16.6% which is less than the growth of turnover. Some operating expenses like bad and doubtful debts, royalty and rent & occupancy increased due to expansion of the operations and other regulatory changes like introduction VAT on commercially used space. The higher increase of operating expenses was on account of advertisement and sales promotion, shop operating expenses, etc. In order to fetch sales from the competition more aggressive advertisement campaign was taken and more market offerings were given to the customers. However, the management tried to contain the growth of period expenses but the higher inflation hit negatively. In addition, management placed various control measures to bring operating efficiency in the days ahead. Interest expenses The company incurred interest expenses to finance inventory, receivable and other expenses. The company had suffered high interest expenses in 2012 as opposed to interest income in The reason of high interest expenses was mainly holding of high volume of inventory which could not be liquidated due to slower pace of sales in certain months. The slow pace of business in the midst of competition contributed to piling of inventory because LCs which were opened could not be deferred. However, interest rates remained stable last year despite liquidity crisis coupled with other market factors. The company did manage to enjoy best possible interest rates which were arranged through effective negotiation. The company managed to make some short term investments with various banks during the year. These short term investments generated interest income which compensated interest expenses to some extent for the year under review. Income Tax The company has declared a 150% dividend for the year Due to declaration of dividend more than 20%, the company has been entitled to lower rate of tax, which is a 10% rebate from the tax amount of 27.5%. As a result, in consistency with other years, the company has made provision for income tax considering payment of dividend more than 20%. Effective Income tax for the year under review was maintained at 26.6% which is 2.5% higher than that of last year due to increase of disallowances owing to excess expenditure exceeding the threshold of allowable limit. Net Profit for the year The net profit after tax for the year increased to Taka 490 million from Taka 400 million of the previous year. Increase in the gross profit margin has resulted in increase of contribution to net profit. There was growth of net profit after tax in 2012 due to growth in operating profit because operating expenses grew at a rate lower than the rate of growth of turnover as explained above Earnings per Share The Company s earnings per share (EPS) for the year under review were Taka vs. Taka in The EPS has increased compared to last year. Price Earnings Ratio The price earnings ratio (times) of the Company as at December 31, 2012 was 13.13, compared to as at December 31, , Share Value During the year under review, the share price of the Company fluctuated between Taka 132 and Taka 295, with the year end closing value at Taka 164. The corresponding figures for 2011 were highest Taka 840 and lowest Taka 209. Risk Management Risk management is the prioritized process of analyzing exposure to risk and probability of risks occurring as well as determining how best to handle such exposures. This involves identifying and characterizing the risks involved, assessing the threat from each, assessing mitigatory precautions and ways for cost effectiveness and devising a comprehensive riskmanagement strategy to reduce those risks. The company operates on approved policies and procedures covering all risk areas in order to ensure that risks are properly addressed and protected for sustainable development and growth of the company. These policies are regularly visited for review and update in order to keep pace with the changing operating environment, technology and regulatory requirement. This section of your annual report discusses the risk management process of prioritizing risk reduction measures at Company in terms of various risks the Company has to manage. The Risk management process The company continued to review and improve its risk management function during the year under review in line with business needs, prudential requirements and international best practices. To identify and manage various risks involved in course of different operations your Company has set up different committees to deal with different aspects of risks. However, everyone of the Company who has responsibility for achieving an objective also has the responsibility for managing the risks associated with fulfilling that objective and the controls to manage those risks. This means that responsibilities and accountibilities for the management of risks are clearly and appropriately established. Singer recognizes that good information is the key to forecasting, assessing, and managing risk. Reporting Monthly and quarterly reports and other analytical information are produced comparing the previous year and using predetermined performance indicators, to ensure that the Management Committee is fully alerted to any risks as promptly as possible. The Company is implementing a real time Enterprise Resource Planning (ERP) system, which will ensure that comprehensive information is available to Company decision makers in timely and assessable fashion. The system will provide accurate information and also alert management regarding possible risks as or before they arise. Data Collection and Analysis A systematic process is followed for collecting and validating, converting this into meaningful information and quick reporting plays crucial roles in monitoring risks. The process is designed to pick up relevant business- critical information, with oversight by line managers. Data collected is subject to review and validation before it is submitted to senior management, who in turn, uses it for appropriate action. Internal, External and Corporate Audit Internal, external and corporate audits are central to the risk management process. Key performance indicators of the Company's business units are continually monitored. Reports forwarded by internal, external and corporate auditors are reviewed internally. The Company's accounting and control functions, including the Internal Audit & System Review function, maintain and seek continuity to improve the effectiveness of the reporting system and the internal controls are in place. Management Information Information collection and timely reporting play key roles in monitoring risks. If this information is inaccurate or tardy, poor decisions will result, causing financial loss to the Company. Information risk is managed through regular IT system backups and insurance to cover system-related risks. An online ERP system is being implemented currently which will help to ensure that management information is timely and accurate. All relevant information is submitted to senior management, who appraise it and submit relevant details to other in the Company. All information pertaining to finance is transmitted to the Finance Department. The Finance Department in turn shares information with senior management and department heads. Continuity Assurance Procedures to ensure business continuity exist in all major operational units. These procedures include continuity planning, product testing and quality control and provisions for disaster recovery. The adequacy of these internal controls is constantly reviewed by the management of the company as well as Internal Audit Department and Corporate Audit Team. Labour Risk The operational risk category includes labor-related risks, which are managed through the operations of a grievance handling procedures since labor issues can affect product quality, output, market share as well as company goodwill and reputation. Assets Risk Risks associated with the physical assets of the Company include their destruction, loss or theft as well as technical and other defects. Every such tangible asset is insured against identifiable risks and the insurance policies in question are reviewed annually and modification is made, as deemed necessary. Reputation risk is minimized through product quality controls and comprehensive quality management processes, which include compliance with standard based quality (ISO 9001:2000) at manufacturing facilities. A sufficient spares help to mitigate repair and maintenance related product risk, while cost-sharing agreements with local and international suppliers reduce 48 Singer Bangladesh Limited Annual Report 2012 Singer Bangladesh Limited Annual Report

27 Brings Comfort to the Lives Innovative Hire Purchase - Easy Installment scheme is one of the cardinal factors for the success of the Company. This scheme is appropriate for Bangladesh considering the socio-economic conditions of the country.

28 exposure to losses arising from product defects. Provision is also made for asset defects and malfunctions, for obsolescence due to advances in technology, warranty claims and doubtful debtors. The Company's factory and other infrastructures are continually upgraded. Market Risk Market risk arises from market changes, competitive activity and the Company's reliance on external suppliers, which can increase product and supply chain risk. Also at risk are the Company's earnings, profits, market share and reputation. A diversified product and brand portfolio reduces the Company's relative exposure to any given market segment, helping spread market risk. The portfolio is designed to minimize overall risk to the Company with the least possible compromise to profitability. Our best defense against competitive threats is the strength and power of the Singer brand, and measures to maintain and further strengthen this, as well as other Company-owned brands, through a vital part of our marketing activities. Product Risk Product may prove defective or inappropriate for the market in terms of price, functionality or perceived value. They are also liable to be rendered obsolete. Product risk is managed through stringent quality control of our product and afterservice network of retail outlets, service centres and franchise service agents. Singer after-sales service is unmatched at any given price point. Risks associate with product obsolescence are migrated by provisioning and by keeping inventory levels of products liable to obsolescence low. Provisioning also deals with risks arising out of warranty claims and doubtful debtors. Competitors and Pricing Another source of Market Risk is competitors. In the Company's case, a sizeable portion of the threat comes from products imported and made available to consumers through irregular channels, whose sellers can undercut legitimate vendors since their tax and tariff related overheads may be low or non-existent. In the lower income consumer segments, competition also comes from vendors of used products. Threats to market share also arise if consumers find competitors' products more readily available than ours. The country wide network of Company retail outlets and service centres, together with its Franchise Technicians form a bulwark against this risk. 'Price risk' arises from the possibility that our prices will be rendered uncompetitive through underselling by competitors purveying irregularly-imported (duty unpaid) products or used products sold as new on the market, or through misleading or unethical advertising. Here again, our best insurance is the power of our brand. Meanwhile, Singer Bangladesh Limited makes every effort to keep prices competitive through efficiency and cost control programmes and by negotiating favorable terms with suppliers. Company management is regularly apprised of competitor pricing through market surveys and takes action with regard to our own prices as deemed appropriate. Suppliers Reliance on external suppliers exposes the Company to the risks of supply disruption and defective third- party manufacturing in both finished products and components. It also creates the possibility of rival firms competing with the Company for the same supplier, triggering cost and supply issues. Supply chain risk is minimized through carefully-chosen supplier relationships and plant investments, as well as through product sampling and lab testing for quality. The activities of the Company's quality control unit ensure that the best suppliers are sourced. The Company has maintained strong relationships with a number of leading manufacturers, with supplier performance specified in the relevant contractual agreements. The danger of supply shortfalls is addressed through alternative supplier arrangements and the maintenance of sufficient raw material stocks to prevent shortfalls. Investment Risk Capital expenditure risk the risk that capital investments will not realize the expected returns and credit risk are the two aspects of 'transaction risk'. Capital investment risk is inherent in regular infrastructure improvements as well as, more acutely, in new product launches and the creation or acquisition and building-up of new brands. Such activities are vital to the continuance of Singer Bangladesh Limited as a going concern. So the Company proceeds with careful management of the risks involved. This is effected through due diligence, which determines whether forecasting is accurate and budgets can be met, and which financial, technological or other factors may affect a given outcome. Information is gained through market surveys. Another way of dealing with capital expenditure risk is through the diversification on the Company's business into a number of areas, as is done at present. Credit Risk The extension of customer credit is normal business practice in the white goods sector and the Company is no exception to this rule. It, therefore, faces credit risk in the form of default or delay on purchase and hire purchase agreements. The exposure is particularly high during a significant economic downturn or in the wake of changes in local laws, unexpected fiscal policy changes, natural disasters, security breakdowns and the like. This exposure is dealt within several ways. Shop managers act as del credere agents, undertaking a thorough appraisal of the customers before credit is extended. Credit appraisals of dealers are undertaken to ascertain whether they have the capacity to pay for product ordered. Details of customers who have defaulted on payments are recorded in a database and a list of those customers goes to shop managers whose duty is to undertake credit evaluations of customers. Financial Risk Financial risk is managed by the company treasury with the intention of providing cost-effective funding while minimizing the negative effects of market fluctuations on net income. The main exposures are to liquidity, interest rate and exchange rate risk. Exchange Rate Risk Exposure to exchange rate risk arises from the Company's transactions with parties overseas and can impact negatively on pricing policy. Exchange rate fluctuations also affect the picture of the Company's financial statements and hence its results. Interest Rate Risk Interest rate risk impacts the Company's earnings, cash flow and overall value and affects product pricing, customer credit arrangements and Company profits. A number of mitigatory actions are in place to manage this risk. The Company's financial strength and brand equity give it access to funds at attractive rates, further reducing interest rate risk. Liquidity Risk Liquidity risk is the potential lock of available funds to cover operations, which can affect investment plans, cost of funds, product pricing, stock levels and customer credit operations. It is managed through regular liquidity reviews and reports to the Board, coverage of net borrowings with committed facilities, a healthy industry-related gearing ratio and the maintenance of good relationship with our bankers. 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. These risks are dealt with preventively through the actions of the Company's Legal Department and through frequent internal, external and corporate audits to monitor compliance. The Company's management culture stresses ethical performance in this area, following best practices at all times. Legal Risk This is the risk of legal claims against the Company, the outcome of which cannot be predicted with any degree of confidence and which may cause loss of reputation and goodwill as well as financial loss. The Legal Department monitors all Group activity and has recourse to external legal advice when necessary. The department is itself subject to the control procedures of the Company's Internal Audit Department. Adequate provision is made in the budget to pay off any warranty claim that may arise, thus hedging the Company against legal risk. Information Risk Malfunctioning information technology may result in lost data, wasted investments in software, delayed receipt of information and other operational issues. These and other IT- related risks can severely impact decision making. To mitigate these risks the Company has installed comprehensive network security and makes regular backups of all databases and mission-critical information. These backups form part of the organizational disaster- recovery system. Other Risks This final category covers risks arising from large external factors such as socio-economic changes, shifts of public opinion, climate change and the like. Such factors could impact Company earnings, reputation and goodwill, affect the returns from certain product categories or expose the Company to government regulatory action that could tarnish its image. As with other categories of risk, good and timely information is key to managing this one. Market trends and consumer habits and attitudes are tracked through market surveys, the information which feeds into brand and product development planning. Government policy and activities are closely monitored, their potential effects assessed and actions are taken by the Company as deemed appropriate. The results of domestic and international climate change surveys and changes in the policy of governments and international bodies are monitored and their probable effect is incorporated into Company planning. Multi-country sourcing, the use of substitute raw materials, adequate inventory levels and product diversification are among the ways in which these risks are managed. Regular investment in new plant and technology improves efficiency and profit margins, further hedging against general risks in the long term. Caveat With general risk and all other categories of risk discussed above, no assurance can be given that the Company is fully protected. The best that can be achieved is reasonable management of the risks to which the Company is exposed through a sound management process at multiple levels of management process and based on the most accurate, timely and comprehensive management information available. 52 Singer Bangladesh Limited Annual Report 2012 Singer Bangladesh Limited Annual Report

29 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

30 Remuneration Committee Report Audit Committee Report Composition of the Remuneration Committee The Remuneration Committee is a sub-committee of the Board. It comprises three Directors, two of whom are independent directors. The Chairman of the Committee is also an independent Director. The Managing Director and Chief Financial Officer assist the committee by providing the relevant information and analysis. The Company Secretary functions as the Secretary of the Committee. Role of the Committee The Remuneration Committee s role is mainly to determine and recommend to the Board the remuneration of the Executive Directors. It also monitors the levels and structures of remuneration of Senior Management and seeks to ensure that the remuneration arrangements are designed to attract, retain and motivate the Executive Directors and Senior Management needed to run the Company successfully. Meetings and tendance The Committee met twice during the year under review. Its deliberations are mentioned in the summary of activities. Summary of Activities Reviewed the performance of the Executive Directors and Senior Management of the Company: Reviewed and recommended the compensation packages of the Chief Executive Officer, Executive Directors and Senior Management of the Company: Reviewed the policies pertaining to the remuneration and perquisites of the Executive Directors and Senior Management of the Company. Conclusion I wish to thank the other members of the Committee, Mr. Akhtar Imam and Mr. Gavin J Walker and the Secretary for their valuable contributions towards the functions of the Remuneration Committee. On behalf of the Remuneration Committee C. K. Hyder Chairman, Remuneration Committee March 19, 2013 Composition of the Audit Committee The Audit Committee is the sub-committee of the Board. The Committee comprises four Directors. Mr. C K Hyder, Chairman of the Committee is an independent Director. The Chief Financial Officer (CFO) and Head of Internal Audit (HIA) attend the meetings by invitation. The Company Secretary functions as the Secretary of the Committee. Role and responsibilities of the Committee The Audit Committee is empowered, to consider any matter relating to the financial affairs of the Company and to review all internal and external audits, internal control systems and procedures, accounting policies, etc., so as to ensure that a sound financial reporting system is in place and is well managed, in order to provide accurate, appropriate and timely information to the Management, Regulatory Authorities and to the Shareholders. Meetings and tendance During the financial year ended December 31, 2012, five meetings of the Audit Committee were held. The details of attendance of the members have been shown in the ANNEXTURE- III of page - - of the annual report. The Company's external auditors were present at one Audit Committee meeting during the financial year where matters relating to the audit of the statutory accounts were discussed. Summary of Activities The following activities were carried out by the Audit Committee during the financial year ended December 31, 2012: The Terms of Reference of the Audit Committee were updated in line with the Revised Corporate Governance Guideline issued by the Bangladesh Securities and Exchange Commission in its notification dated August 7, Reviewed the quarterly, half yearly and interim financial results of the company and the relevant announcements to the Stock Exchanges by the Board of Directors. Reviewed the annual financial statements of the Company prior to submission to the Board of Directors for approval. The review was to ensure that the financial reporting and disclosures were in compliance with the Securities Laws, provisions of the Companies Act 1994, applicable Accounting Standards / IFRS, any conflict of interest and other relevant legal and regulatory requirements. the Internal Audit Department. The competency and performance of the Head of Internal Audit were also reviewed. Reviewed the Internal Audit reports which encompassed the audit issues, audit recommendations and Management's responses to these recommendations. Improvement actions in the area of internal controls, systems and efficiency enhancements suggested by the internal auditors were discussed together with Management. Reviewed the implementation of these recommendations through follow-up audit reports to ensure all key areas were addressed. Suggested additional improvement opportunities in the areas of internal control, systems and efficiency improvement. External Audit The Committee met with external auditors at the conclusion of the annual audit in the absence of management and also reviewed their findings of observation and the Management's response thereto Reviewed with the external auditors about their audit scope, audit strategy and audit plan for the year and their proposed fees for the statutory audit and review of the Statement of Internal Control. Reviewed the external audit reports and areas of concern highlighted in the Management letter including Management's responses to the findings of the external auditors. Reviewed the performance of the external auditors and made recommendation to the Board on their appointment and fees. Internal Control and Risk Management System Based on review of the effectiveness of the internal controls and the procedures established for identifying, assessing and managing risks, the Committee is of the view that adequate controls and procedures are in place to provide reasonable assurance that the company's assets are safeguarded and that the financial position of the Companies is adequately managed. Recommendation The Audit Committee recommended to the Board of Directors that M/s. S F Ahmed & Co., Chartered Accountants be appointed as auditors for the financial year ending December 31, 2013 subject to the approval of the members at the 33rdAnnual General Meeting of the Company. On behalf of the Audit Committee Reviewed the annual audit Plans including the audit methodology in assessing and rating risks of auditable areas to ensure adequate scope and comprehensive coverage on the audit activities of the Company. Reviewed the effectiveness of the audit process, resource requirements for the year and assessed the performance of C. K. Hyder Chairman of the Audit Committee March 19, Singer Bangladesh Limited Annual Report 2012 Singer Bangladesh Limited Annual Report

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32 Directors' Responsibilities for Financial Statements The Directors are responsible for preparing the annual report and financial statements in accordance with the Companies Act 1994, Securities and Exchange Commission Rules 1987, Bangladesh Financial Reporting Standards (BFRS) and other applicable laws and regulations. The Companies Act 1994 requires Directors to ensure that the Company keeps proper books of accounts of all transactions and prepares financial statements that give a true and fair view of the state of the company's affairs and of the profit for the year. The Directors are also required to ensure that the financial statements have been prepared and presented in accordance with the International Financial Reporting Standards (IFRS) and BFRS as applicable in Bangladesh and provided the information required by the Companies Act 1994, Securities and Exchange Ordinance 1969, Securities and Exchange Commission Rules 1987 and the regulations of the Dhaka/ Chittagong Stock Exchanges. 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 preventing and detecting fraudulent activities and other irregularities. The Directors are of the view that these financial statements have been prepared under the generally accepted accounting principles and in accordance with the Bangladesh Accounting Standards as laid down by the Institute of Chartered Accountants of Bangladesh. to ensure that the financial statements of the Company meet with the requirements of the Companies Act, Bangladesh Accounting Standards and the regulations of the Dhaka/Chittagong Stock Exchanges. The Directors have a reasonable expectation, after making enquiries and following a review of the Company's plan for the ensuing year including cash flows and borrowing facilities, that the Company has adequate resources to continue in operational existence for the foreseeable future, and therefore continues to adopt the going concern basis in preparing the Accounts. Messrs. S. F. Ahmed & Co. 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 expressed their opinion in their report in page 63 of the Annual Report. By order of the Board Singer Bangladesh Ltd. A. M. Hamim Rahmatullah Managing Director Mohammad Sanaullah Director & Company Secretary FINANCIAL REPORTS Auditors' Report 63 Statement of Financial Position 64 Statement of Comprehensive Income 65 Statement of Changes in Equity 66 Statement of Cash Flows 67 Notes to the Financial Statements 68 Financial Calendar 2012 Annual Report Published 12th April 2012 Thirty Second Annual General Meeting 30th April 2012 Dividend Paid 24th May 2012 Interim Financial Statements to SEC, Dhaka & Chittagong Stock Exchange For the Three Months ended 31 March 2012 (unaudited) April 2012 For the Half Year ended 30 June 2012 (unaudited) July 2012 For the Nine Months ended 30 September 2012 (unaudited) October 2012 Annual Report & Annual General Meeting Annual Report 2012 Approved 19th March 2013 Thirty Third Annual General Meeting 8th May 2013 Dividend Payable May 2013 Proposed Financial Calendar /14 For the Three Months ending 31 March 2013 (unaudited) April 2013 For the Half Year ended 30 June 2013 (unaudited) July 2013 For the Nine Months ending 30 September 2013 (unaudited) October 2013 The Directors endeavor 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 Dhaka, March 19, 2013 Thirty Forth Annual General Meeting May Singer Bangladesh Limited Annual Report 2012

33 Auditors Report to the Shareholders of Singer Bangladesh Limited We have audited the accompanying financial statements of Singer Bangladesh Limited (the company), which comprise the statement of financial position (balance sheet) as at 31 December 2012, statement of comprehensive income (profit and loss statement), statement of changes in equity and statement of cash flows for the year then ended and a summary of significant accounting policies and other explanatory notes. Management's responsibility for the financial statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Bangladesh Financial Reporting Standards / Bangladesh Accounting Standards, the Companies Act 1994, Bangladesh Securities and Exchange Rules 1987 and other applicable laws and regulations. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatements, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditors' responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Bangladesh Standards on Auditing. Those standards require that we comply with relevant ethical requirements and plan and perform the audit to obtain a reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements, prepared in accordance with Bangladesh Financial Reporting Standards / Bangladesh Accounting Standards, give a true and fair view of the state of the company s affairs as at 31 December 2012 and of the results of its operations and its cash flows for the year then ended and comply with the requirements of Companies Act 1994, Bangladesh Securities and Exchange Rules 1987 and other applicable laws and regulations. We also report that: (a) (b) (c) 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 and made due verification thereof; in our opinion, proper books of account as required by law have been kept by the company so far as it appeared from our examination of those books; the statement of financial position (balance sheet) and statement of comprehensive income (profit and loss statement) dealt with by the report are in agreement with the books of account and returns; and d) the expenditure incurred and payment made were for the purpose of the business of the company. House 25, Road 13A, Block D Banani, Dhaka 1213, Bangladesh Dated, 19 March 2013 S. F. AHMED & CO Chartered Accountants Partial view of Shareholders at the 32nd Annual General Meeting Singer Bangladesh Limited Annual Report