Dear J2EE, Excellent to establish contact with the management as they would be the best source of information. Please find below a list of queries / clarifications which would help understand the business better. I can understand if all of them cannot be discussed in detail with the CS. Request boarders to post queries if any are missed and a final list can be compiled which will aid J2EE in his discussions.
1). What were the exact circumstances that led to the company to become a BIFR case? If it was entry into segments where the company could not compete with larger players, then how different is the current entry into consumer durables space this time? What are the drivers for the company to succeed this time? Was the management/owners same pre-BIFR?
2). What is the reason for venturing into consumer durables, which is a much more crowded market as compared to sewing machines, where the company enjoys much higher brand strength.
3). Any BIFR litigation pending? Whether all unsecured and statutory dues are settled? If not, what are the pending claims against the company and how much has the company already provided against these claims?
4). What is the remaining amount of income from deferred tax asset yet to be realised and by which year would it be fully realised?
5). Is the company a full tax paying company excluding the effect of the above?
6). What are the following figures for 2012, 2013 and 2014 (if possible):
a. Value of Retail sales and Industrial sales. What will be the proportion going forward?
b. Value of new sewing machines and replacement demand (for industrial machines). Management outlook on the same.
c. Number of sewing machines sold to Retail and Industrial sectors
d. Margins for retail and industrial sales
e. Domestic and overseas sales, and management expectation on future trends
f. Margins from domestic and overseas sales
g. Price increases taken in the past and whether the company has pricing power
7). Reason for decreasing trend of sales growth from 31% in FY12, 26% in FY13 and on track to achieve 20% in FY14. What will be the impact of restarting Jammu plant on sales? What annual growth does the management envisage over the medium to long term?
8). For 2014, what was the number and value of machines sold under trading activity and manufacturing? Within manufacturing, how much was self manufactured and how much was outsourced? What are the management expectation of trends in 2015 and beyond.
9). What is the capacity of the Jammu plant at peak operations and is it sufficient to meet demand?
10). Is the royalty payment to the parent capped at 1% of sales? Are there any plans to increase this going forward?
11). Overall outlook for the sewing machine sector and the company in particular â size of the market, growth of the sector, contribution of unorganised players, trend of shift from unorganised to organised, why should the shift continue in future?
12). Who are the major customers for industrial machines and what is their contribution to the companyâs revenues?
13). Competition â how many organised players, market share, sales and profits of main ones if known.
14). Are competitors different in retail category and industrial category? If so, then above information for industrial category also.
15). How many contract manufacturers are there for the company? What are the activities carried out by the contract manufacturers and what is the role of Singer? Who looks at quality control, purchasing, etc.
16). What is the role of the parent / group companies in Singer Indiaâs operations?