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THIS IS A PRELIMINARY PROSPECTUS.

THE INFORMATION IN THIS PRELIMINARY PROSPECTUS IS NOT COMPLETE AND IS SUBJECT TO FURTHER AMENDMENTS AND COMPLETION IN THE FINAL PROSPECTUS TO BE ISSUED BY OUR COMPANY AND REGISTERED BY THE AUTHORITY. UNDER NO CIRCUMSTANCES SHALL THIS PRELIMINARY PROSPECTUS CONSTITUTE AN OFFER TO SELL OR ANY SOLICITATION OF AN OFFER TO BUY, NOR SHALL THERE BE ANY SALE OF SECURITIES IN ANY JURISDICTION ON THE BASIS OF THIS PRELIMINARY PROSPECTUS. THIS PRELIMINARY PROSPECTUS HAS BEEN LODGED WITH THE AUTHORITY WHO TAKES NO RESPONSIBILITY FOR ITS CONTENTS. CERTAIN INFORMATION (INCLUDING DATES AND TIMES) AND STATEMENTS IN THIS PRELIMINARY PROSPECTUS REFER TO EVENTS WHICH HAVE NOT OCCURRED OR BEEN COMPLETED, AND MAY OR MAY NOT HAVE BEEN COMPLETED BY THE TIME THE FINAL PROSPECTUS IS REGISTERED BY THE AUTHORITY, WHICH MAY OR MAY NOT OCCUR. NO SECURITIES OF OUR COMPANY MAY BE OFFERED UNTIL THE PROSPECTUS IS DELIVERED IN FINAL FORM. A PERSON TO WHOM A COPY OF THIS PRELIMINARY PROSPECTUS IS ISSUED MUST NOT CIRCULATE THIS COPY TO ANY OTHER PERSON. BY ACCEPTING THIS PRELIMINARY PROSPECTUS, YOU AGREE TO BE BOUND BY THE RESTRICTIONS SET OUT HEREIN.

PRELIMINARY PROSPECTUS DATED SEPTEMBER 24, 2013 (Lodged with the Monetary Authority of Singapore on September 24, 2013) THIS IS A PRELIMINARY PROSPECTUS AND IS SUBJECT TO FURTHER AMENDMENTS AND COMPLETION IN THE PROSPECTUS TO BE REGISTERED BY THE MONETARY AUTHORITY OF SINGAPORE

SEWKO HOLDINGS LIMITED
(Company Registration Number: 277964) (Incorporated in the Cayman Islands on May 24, 2013)

[●] Offering Shares
(subject to the Over-allotment Option (as defined herein))

Offering Price: S$[●] per Offering Share
This document is important. If you are in any doubt as to the action you should take, you should consult your legal, financial, tax or other professional advisor. This is the initial public offering of our ordinary shares (the “ Shares ”). Sewko Holdings Limited (the “ Company ” or “ Sewko ”) is issuing an aggregate of [ ● ] Shares (the “ Issue Shares ”) and ReHo Limited and UCL Asia Holdings VII Limited (the “ Vendors ”) are offering [ ● ] Shares and [ ● ] Shares, respectively (collectively, the “ Vendor Shares ”, and together with the Issue Shares, the “ Offering Shares ”), for subscription and/or purchase at the Offering Price (as defined above) (the “ Offering ”). The Offering consists of (i) an international placement of [ ● ] Offering Shares (the “ International Offer ”) to investors, including institutional and other investors in Singapore, and (ii) a public offer of [ ● ] Offering Shares in Singapore (the “ Singapore Public Offer ”). The Offering Shares offered may be re-allocated between the International Offer and the Singapore Public Offer, at the discretion of the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager (as defined below), subject to applicable law. See “ Plan of Distribution ”. The Hongkong and Shanghai Banking Corporation Limited, Singapore Branch is the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager for the Offering (the “ Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager ”). In connection with the Offering, the Vendors have granted The Hongkong and Shanghai Banking Corporation Limited, Singapore Branch, as stabilizing manager (the “ Stabilizing Manager ”), an over-allotment option (the “ Over-allotment Option ”) exercisable in whole or in part on one or more occasions from the commencement of dealing in the Shares (the “ Listing Date ”) on the Singapore Exchange Securities Trading Limited (the “ SGX-ST ”) until the earlier of (i) the date falling 30 days from the Listing Date and (ii) the date when the Stabilizing Manager or its appointed agent has bought, on the SGX-ST, an aggregate of [ ● ] Shares, representing not more than 15.0% of the total Offering Shares, in undertaking stabilizing actions, to purchase up to an aggregate of [ ● ] Shares (the “ Additional Shares ”) (representing not more than 15.0% of the total Offering Shares) at the Offering Price, solely to cover the over-allotment of the Offering Shares, if any. The Over-allotment Option will be granted by the Vendors in proportion to their respective shareholdings in our Company. The exercise of the Over-allotment Option will not affect the total number of issued Shares outstanding immediately after the completion of the Offering. Prior to the Offering, there has been no public market for our Shares. Application has been made to the SGX-ST for permission to list all our issued Shares, Offering Shares, the Additional Shares and the Scheme Shares (as defined herein) on the Main Board of the SGX-ST, which will be granted when we have been admitted to the Official List of the SGX-ST. Acceptance of applications for the Offering Shares will be conditional upon, among other things, permission being granted by the SGX-ST to deal in and for quotation of all our issued Shares, the Offering Shares, the Additional Shares and the Scheme Shares on the Official List of the SGX-ST. Monies paid in respect of any application accepted will be returned, at each investor’s own risk, without interest or any share of revenue or other benefit arising therefrom, and without any right or claim against us, the Vendors or the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager, if the Offering is not completed because this permission is not granted or for any other reason. The settlement and quotation of our Shares will be in Singapore dollars. We have received a letter of eligibility from the SGX-ST for the listing and quotation of all of our issued Shares, the Offering Shares, the Additional Shares and the Scheme Shares on the Main Board of the SGX-ST. The SGX-ST assumes no responsibility for the correctness of any statements or opinions made or reports contained in this offering document. Our eligibility to list and our admission to the Official List of the SGX-ST is not an indication of the merits of the Offering, our Company, our Group or our Shares (including the Offering Shares, the Additional Shares, and the Scheme Shares). Investing in our Shares involves certain risks. See “Risk Factors ” beginning on page 38. SINGER PRODUCTS CONTRIBUTE MATERIALLY TO THE SALES OF OUR GROUP. AMONG OTHER THINGS, THE ACQUISITION OF A DIRECT OR INDIRECT CONTROLLING INTEREST IN SINGER ASIA LIMITED (“SINGER ASIA”) BY A COMPETITOR OF SVP HOLDINGS LTD. (AS DESCRIBED HEREIN) MAY RESULT IN A TERMINATION OF THE SINGER LICENSE AGREEMENT AND/OR SINGER DISTRIBUTION AGREEMENT WHICH WOULD HAVE A MATERIAL ADVERSE EFFECT ON OUR GROUP. PLEASE SEE THE RELEVANT RISK FACTOR ON PAGE 38. Investors in the International Offer will be required to pay a brokerage fee of 1.0% of the Offering Price in connection with their purchase of the Offering Shares. See “ Plan of Distribution ”. OUR SHARES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”) AND MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OF AMERICA (THE “UNITED STATES”) EXCEPT PURSUANT TO AN EXEMPTION FROM OR IN A TRANSACTION NOT SUBJECT TO THE REGISTRATION REQUIREMENTS OF THE U.S. SECURITIES ACT. ACCORDINGLY, THE OFFERING SHARES ARE BEING OFFERED AND SOLD OUTSIDE THE UNITED STATES (INCLUDING TO INSTITUTIONAL AND OTHER INVESTORS IN SINGAPORE) IN RELIANCE ON REGULATION S UNDER THE U.S. SECURITIES ACT (“REGULATION S”). THE OFFERING SHARES ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE RESTRICTIONS DESCRIBED UNDER “TRANSFER RESTRICTIONS ”. A copy of this offering document was lodged on [ ● ], 2013 with and registered by the Monetary Authority of Singapore (the “ Authority ”) on [ ● ], 2013. The Authority assumes no responsibility for the contents of this offering document. Registration of this offering document by the Authority does not imply that the Securities and Futures Act, Chapter 289 of Singapore (the “ Securities and Futures Act ” or “ SFA ”) or any other legal or regulatory requirements have been complied with. The Authority has not in any way considered the merits of the Shares being offered for investment (or of the Additional Shares, where the Over-allotment Option is exercised). No Shares will be allotted or allocated on the basis of this offering document later than six months after the date of registration of this offering document by the Authority. Investors applying for Offering Shares by way of Application Forms or Electronic Applications in the Singapore Public Offer will pay the Offering Price on application, subject to the refund of the full amount or, as the case may be, the balance of the application monies (in each case without interest or any share of revenue or other benefit arising therefrom and without any right or claim against us, the Vendors or the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager, where (i) an application is rejected or accepted in part only, or (ii) the Offering does not proceed for any reason.

Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager

Public Offer Coordinator

TABLE OF CONTENTS
Page NOTICE TO INVESTORS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORPORATE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SUMMARY OF THE OFFERING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . INDICATIVE TIMETABLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SUMMARY FINANCIAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . DIVIDENDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CAPITALIZATION AND INDEBTEDNESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . DILUTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EXCHANGE RATES AND EXCHANGE CONTROLS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SELECTED FINANCIAL DATA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORPORATE STRUCTURE AND OWNERSHIP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . INDUSTRY OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SEWKO EMPLOYEE SHARE OPTION SCHEME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SHARE CAPITAL AND SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . INTERESTED PERSON TRANSACTIONS AND CONFLICTS OF INTERESTS . . . . . . . . TAXATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . TRANSFER RESTRICTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CLEARANCE AND SETTLEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . LEGAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . INDEPENDENT AUDITORS AND JOINT REPORTING ACCOUNTANTS . . . . . . . . . . . . . EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 12 17 25 30 32 38 60 63 65 66 68 71

77 119 120 161 211 230 238 244 250 254 268 269 270 271 272

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GENERAL AND STATUTORY INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . DEFINED TERMS AND ABBREVIATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . APPENDIX A − REGULATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . APPENDIX B − OUR SUBSIDIARIES, ASSOCIATED COMPANIES AND JOINT VENTURE ENTITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . APPENDIX C − LIST OF MATERIAL PROPERTIES AND INTELLECTUAL PROPERTY RIGHTS OF OUR GROUP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . APPENDIX D − DESCRIPTION OF OUR SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . APPENDIX E − SUMMARY OF CERTAIN PROVISIONS OF THE CAYMAN ISLANDS’ COMPANIES LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . APPENDIX F − LIST OF PRESENT AND PAST PRINCIPAL DIRECTORSHIPS . . . . . . . . APPENDIX G − RULES OF THE SEWKO EMPLOYEE SHARE OPTION SCHEME . . . . . APPENDIX H − INDEPENDENT JOINT REPORTING ACCOUNTANTS’ REPORT ON THE COMBINED FINANCIAL STATEMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . APPENDIX I − COMBINED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2010, 2011 AND 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . APPENDIX J − INDEPENDENT JOINT REPORTING ACCOUNTANTS’ REPORT ON THE UNAUDITED CONDENSED COMBINED INTERIM FINANCIAL STATEMENTS . . . . . . . . APPENDIX K − UNAUDITED CONDENSED COMBINED INTERIM FINANCIAL STATEMENTS FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 2012 AND 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . APPENDIX L − INDEPENDENT REPORTING ACCOUNTANT’S REPORT ON THE PRO FORMA COMBINED STATEMENT OF FINANCIAL POSITION AS AT DECEMBER 31, 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . APPENDIX M − UNAUDITED PRO FORMA COMBINED STATEMENT OF FINANCIAL POSITION AS AT DECEMBER 31, 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . APPENDIX N − INDEPENDENT REPORTING ACCOUNTANT’S REPORT ON THE PRO FORMA CONDENSED COMBINED INTERIM FINANCIAL INFORMATION AS AT MARCH 31, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . APPENDIX O − UNAUDITED PRO FORMA COMBINED STATEMENT OF FINANCIAL POSITION AS AT MARCH 31, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . APPENDIX P − TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION FOR AND ACCEPTANCE OF THE OFFERING SHARES UNDER THE SINGAPORE PUBLIC OFFER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

273 283 A-1

B-1

C-1 D-1

E-1 F-1 G-1

H-1

I-1

J-1

K-1

L-1

M-1

N-1

O-1

P-1

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NOTICE TO INVESTORS
No person is authorized to give any information or to make any representation not contained in this offering document, and any information or representation not so contained must not be relied upon as having been authorized by or on behalf of us, any of the Vendors or the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager. Neither the delivery of this offering document nor any offer, sale or transfer made hereunder shall under any circumstances imply that the information herein is correct as at any date subsequent to the date hereof or constitute a representation that there has been no change or development reasonably likely to involve a material adverse change in the affairs, conditions and prospects of our Group since the date hereof. Where such changes occur and are material or required to be disclosed by law, the SGX-ST and/or any other regulatory or supervisory body or agency, we and/or the Vendors will make an announcement of the same to the SGX-ST and, if required, we and/or the Vendors will issue and lodge an amendment to this offering document or a supplementary document or replacement document pursuant to Section 240 or, as the case may be, Section 241 of the Securities and Futures Act and take immediate steps to comply with these sections. Investors should take notice of such announcements and documents and upon release of such announcements or documents shall be deemed to have notice of such changes. None of us, the Vendors, the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager and our or their respective affiliates, directors, officers, employees, agents, representatives and advisors are making any representation or undertaking to any investor in our Shares regarding the legality of an investment by such investor under applicable legal investment or similar laws. In addition, investors in our Shares should not construe the contents of this offering document or its appendices as legal, business, financial or tax advice. Investors should be aware that they may be required to bear the financial risks of an investment in our Shares for an indefinite period of time. Investors should consult their own professional advisors as to the legal, tax, business, financial and related aspects of an investment in our Shares. By applying for the Offering Shares on the terms and subject to the conditions in this offering document, each investor in the Offering Shares represents and warrants that, except as otherwise disclosed to the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager in writing, he is not (i) a Director or substantial shareholder of our Company, (ii) an associate as defined in the SGX-ST Listing Manual of any of the persons mentioned in (i), or (iii) a connected client of any issue manager or underwriter, or lead broker or distributor of the Offering Shares. We and the Vendors are subject to the provisions of the Securities and Futures Act and the Listing Manual regarding the contents of this offering document. In particular, if after this offering document is registered, but before the close of the Offering, we and the Vendors become aware of: (a) (b) a false or misleading statement in this offering document; an omission from this offering document of any information that should have been included in it under Section 243 of the Securities and Futures Act; or a new circumstance that has arisen since this offering document was lodged with the Authority which would have been required by Section 243 of the Securities and Futures Act to be included in this offering document if it had arisen before this offering document was lodged,

(c)

that is materially adverse from the point of view of an investor, we and the Vendors may lodge a supplementary or replacement document with the Authority pursuant to Section 241 of the Securities and Futures Act.

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Where, prior to the lodgment of the supplementary or replacement document, applications have been made under this offering document to subscribe for and/or purchase the Offering Shares and where the Offering Shares have not been issued and/or sold to the applicants, we shall (as well as on behalf of the Vendors) either: (a) within two Market Days (as defined herein) from the date of lodgment of the supplementary or replacement document, give the applicants notice in writing of how to obtain, or arrange to receive, a copy of the supplementary or replacement document, as the case may be, and provide the applicants with an option to withdraw their applications and take all reasonable steps to make available within a reasonable period the supplementary or replacement document, as the case may be, to the applicants who have indicated that they wish to obtain, or have arranged to receive, a copy of the supplementary or replacement document; within seven days from the date of lodgment of the supplementary or replacement document, give the applicants the supplementary or replacement document, as the case may be, and provide the applicants with an option to withdraw their applications; or treat the applications as withdrawn and canceled, in which case the applications shall be deemed to have been withdrawn and canceled, and we shall (as well as on behalf of the Vendors), within seven days from the date of lodgment of the supplementary or replacement document, return all monies paid in respect of any application to the applicants, without interest or any share of revenue or other benefit arising therefrom and at their own risk, and the applicants will not have any claim against our Company, the Vendors and the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager and the Public Offer Coordinator.

(b)

(c)

Where the Offering Shares have been issued and/or sold to the applicants, we shall (as well as on behalf of the Vendors) either: (a) within two Market Days from the date of lodgment of the supplementary or replacement document, give the applicants notice in writing of how to obtain, or arrange to receive, a copy of the supplementary or replacement document and provide the applicants with an option to return to our Company those securities which they do not wish to retain title in and take all reasonable steps to make available within a reasonable period the supplementary or replacement document, as the case may be, to the applicants who have indicated that they wish to obtain, or have arranged to receive, a copy of the supplementary or replacement document; within seven days from the date of lodgment of the supplementary or replacement document, give the applicants the supplementary or replacement document, as the case may be, and provide the applicants with an option to return the Offering Shares which they do not wish to retain title in; or (A) in the case of the Issue Shares, deem the issue as void and refund the applicants’ payments for the Issue Shares (without interest or any share of revenue or other benefits arising therefrom and at their own risk) within seven days from the date of lodgment of the supplementary or replacement document, (B) in the case of the Vendor Shares, deem the sale of the Vendor Shares as void, and (C) in the case where documents to evidence title to the Vendor Shares (“ title documents ”) have been issued to the applicants, within seven days from the date of lodgment of the supplementary or replacement document, inform the applicants to return the title documents within 14 days from the date of lodgment of the supplementary or replacement document, and within seven days from receipt of the title documents or the date of lodgment of the supplementary or replacement document, whichever is the later, refund the applicants’ payments for the Vendor Shares (without interest or any share of revenue or other benefits arising therefrom and at their own risk) and the applicants will not have any claim against us, the Vendors and the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager and the Public Offer Coordinator.

(b)

(c)

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Any applicant who wishes to exercise his option to withdraw his application or return the Offering Shares issued and/or sold to him shall, within 14 days from the date of lodgment of the supplementary or replacement document, notify us and the Vendors, whereupon we and the Vendors shall, within seven days from the receipt of such notification, return the application monies without interest or any share of revenue or other benefit arising therefrom and at the applicant’s own risk. Under the Securities and Futures Act, the Authority may in certain circumstances issue a stop order (the “ Stop Order ”) to us and the Vendors, directing that no or no further Offering Shares be allotted, issued or sold. Such circumstances will include a situation where this offering document (i) contains a statement which, in the opinion of the Authority, is false or misleading, (ii) omits any information that is required to be included in accordance with the Securities and Futures Act, or (iii) does not, in the opinion of the Authority, comply with the requirements of the Securities and Futures Act. Where the Authority issues a Stop Order pursuant to Section 242 of the Securities and Futures Act, and: (a) in the case where the Offering Shares have not been issued and/or transferred to the applicants, the applications for the Offering Shares pursuant to the Offering shall be deemed to have been withdrawn and canceled and we and the Vendors shall, within 14 days from the date of the Stop Order, pay to the applicants all monies the applicants have paid on account of their applications for the Offering Shares; or in the case where the Offering Shares have been issued and/or transferred to the applicants, the issue and/or sale of the Offering Shares shall be deemed void and we and the Vendors shall, within 14 days from the date of the Stop Order, pay to the applicants all monies paid by them for the Offering Shares.

(b)

Where monies paid in respect of applications received or accepted are to be returned to the applicants, such monies will be returned at the applicants’ own risk, without interest or any share of revenue or other benefit arising therefrom, and the applicants will not have any claim against us, the Vendors or the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager. The distribution of this offering document and the offering, purchase, sale or transfer of our Shares in certain jurisdictions may be restricted by law. We, the Vendors and the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager require persons into whose possession this offering document comes to inform themselves about and to observe any such restrictions at their own expense and without liability to us, the Vendors or the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager. This offering document does not constitute an offer of, or an invitation to purchase, any of our Shares in any jurisdiction in which such offer or invitation would be unlawful. Persons to whom a copy of this offering document has been issued shall not circulate to any other person, reproduce or otherwise distribute this offering document or any information herein for any purpose whatsoever nor permit or cause the same to occur. We and the Vendors are entitled to withdraw the Offering at any time before closing, subject to compliance with certain conditions set out in the Underwriting Agreement (as defined in “ Plan of Distribution ”) relating to the Offering. We and the Vendors are making the Offering subject to the terms described in this offering document and the Underwriting Agreement. The Offering Shares have not been and will not be registered under the U.S. Securities Act and, subject to certain exceptions, may not be offered or sold within the United States. There will be no public offering of the Offering Shares in the United States. The Offering Shares have not been approved or disapproved by the United States Securities and Exchange Commission (the “ SEC ”) or any state or foreign securities commission or regulatory authority. The foregoing authorities have not confirmed the accuracy or determined the adequacy of this offering document. Any representation to the contrary is a criminal offense in the United States.

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The Offering Shares are subject to restrictions on transferability and resale and may not be offered, transferred or resold in the United States (as defined in Regulation S), except as permitted under the U.S. Securities Act and applicable state securities laws pursuant to registration or an exemption from, or a transaction not subject to, registration under the U.S. Securities Act and in accordance with the restrictions under “ Transfer Restrictions ”. You should be aware that you may be required to bear the risks of an investment in our Shares for an indefinite period of time. Because of these restrictions, purchasers of the Offering Shares are advised to consult legal counsel prior to making any offer, resale, pledge or other transfer of the Offering Shares. See “ Transfer Restrictions ” for more information on these restrictions. In connection with the Offering, the Vendors have granted the Stabilizing Manager the Overallotment Option exercisable in whole or in part by the Stabilizing Manager on one or more occasions from the Listing Date until the earlier of (i) the date falling 30 days from the Listing Date and (ii) the date when the Stabilizing Manager or its appointed agent has bought, on the SGX-ST, an aggregate of [ ● ] Shares, representing not more than 15.0% of the total Offering Shares, in undertaking stabilizing actions, to purchase up to an aggregate of [ ● ] Shares (representing not more than 15.0% of the total Offering Shares) at the Offering Price, solely to cover the over-allotment of the Offering Shares, if any. The Over-allotment Option will be granted by the Vendors in proportion to their respective shareholdings in our Company. If the Over-allotment Option is exercised in full, the total number of issued and outstanding Shares immediately following the Offering will be [ ● ] Shares. In connection with the Offering, the Stabilizing Manager or its appointed agent may over-allot Shares or effect transactions that stabilize or maintain the market price of our Shares at levels that might not otherwise prevail in the open market. These transactions may be effected on the SGX-ST and in other jurisdictions where it is permissible to do so, in each case in compliance with all applicable laws and regulations, including the Securities and Futures Act and any regulations thereunder. However, we cannot assure you that the Stabilizing Manager or its appointed agent will undertake any stabilization action. These transactions may commence on or after the commencement of trading of the Shares on the SGX-ST and, if commenced, may be discontinued at any time and may not be effected after the earlier of (i) the date falling 30 days from the Listing Date and (ii) the date when the Stabilizing Manager or its appointed agent has bought on the SGX-ST an aggregate of [ ● ] Shares, representing not more than 15.0% of the total Offering Shares, in undertaking stabilizing actions. FORWARD-LOOKING STATEMENTS Certain statements in this offering document constitute “ forward-looking statements ”. All statements other than statements of historical fact included in this offering document, including those regarding our financial position and results, business strategies, plans and objectives of management for future operations (including development plans and dividends), are forwardlooking statements. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. These forward-looking statements are based on numerous assumptions regarding our present and future business strategies and the environment in which we will operate in the future.

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Forward-looking statements involve inherent risks and uncertainties. The forward-looking statements included in this offering document reflect our current views with respect to future events and are not a guarantee of future performance. A number of important factors could cause actual results or outcomes to differ materially from those expressed in any forward-looking statement. These include, but are not limited to: • risks related to our business, our strategy, our expectations of growth in demand for our products and services and to our business operations, financial condition and results of operations; changes in regulatory, administrative, political, fiscal, social and economic conditions, including growth or diminution of the household consumer durable products and consumer finance business in Sri Lanka, Bangladesh, Pakistan, India and Thailand; adverse general global, regional and local economic conditions; our access to funding sources and the cost of funding; our anticipated growth strategies and expected internal growth; changes in competitive conditions and our ability to compete under these conditions; changes in interest or inflation rates; changes in our future capital needs and the availability of financing and capital to fund these needs; our dependence on our senior management team and key personnel; man-made or natural disasters, including extreme weather conditions, war, acts of international or domestic terrorism, civil disturbances, occurrences of catastrophic events and acts of God that affect our business or properties; legal, regulatory and other proceedings arising out of our operations; foreign currency exchange rate fluctuations, including fluctuations in the exchange rates of currencies that are used in our business, including the U.S. dollar, the Sri Lankan rupee, the Bangladeshi taka, the Pakistani rupee, the Indian rupee and the Thai baht; other factors beyond our control; and other matters not yet known to us.

• • • • • •

• •

• •

• •

Additional factors that could cause our actual results, performance or achievements to differ materially include, but are not limited to, those discussed under “ Risk Factors ”, “ Dividends ”, “ Management’s Discussion and Analysis of Financial Condition and Results of Operations ”, “ Business ” and “ Industry Overview ”. These forward-looking statements speak only as at the date of this offering document. Although we believe that the expectations reflected in the forwardlooking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. We do not intend to update any of the forward-looking statements after the date of this offering document to conform those statements to actual results, subject to compliance with all applicable laws including the Securities and Futures Act and/or rules of the SGX-ST.

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PRESENTATION OF FINANCIAL AND STATISTICAL INFORMATION Historical Financial Information This offering document contains our audited combined financial statements as at and for the years ended December 31, 2010, 2011 and 2012 and our unaudited condensed combined interim financial statements for the three-month periods ended March 31, 2012 and 2013. We prepare our combined financial statements in accordance with International Financial Reporting Standards (“ IFRS ”). IFRS differs in certain respects from generally accepted accounting principles in certain other countries, including the United States. We prepare our combined financial statements in U.S. dollars. This offering document contains conversions of U.S. dollar amounts into Singapore dollars solely for the convenience of the reader. Unless otherwise indicated, U.S. dollar amounts in this offering document have been translated into Singapore dollars, based on the exchange rate of S$1.269 = US$1.00, quoted by Bloomberg L.P. on the Latest Practicable Date (as defined herein). However, these translations should not be construed as representations that U.S. dollar amounts have been, would have been or could be converted into Singapore dollars or that Singapore dollar amounts have been, would have been or could be converted into U.S. dollars at those rates or any other rate or at all. See “ Exchange Rates and Exchange Controls ” for certain historical information on the exchange rate between U.S. dollars and Singapore dollars. Convenience Translations We have included the exchange rate quoted above in its proper form and context in this offering document. Bloomberg L.P. has not provided its consent, for the purposes of Section 249 of the Securities and Futures Act, to the inclusion of the exchange rate quoted above and in “ Exchange Rates and Exchange Controls ” in this offering document and is thereby not liable for such information under Sections 253 and 254 of the Securities and Futures Act. While we, the Vendors and the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager have taken reasonable actions to ensure that the above exchange rates have been reproduced in their proper form and context, neither we, the Vendors, the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager nor any other party has conducted an independent review of the information or verified the accuracy of the contents of the relevant information. Non-IFRS Financial Measures Earnings before interest, tax, depreciation and amortization (“ EBITDA ”) and other similar supplemental financial measures presented in this offering document are supplemental measures of our performance and liquidity that are not required by or presented in accordance with IFRS. EBITDA and the other financial measures are not measurements of financial performance or liquidity under IFRS and should not be considered as an alternative to net income, operating income or any other performance measures derived in accordance with IFRS or as an alternative to cash flows from operating activities or as a measure of liquidity. In addition, EBITDA and the other financial measures are not standardized terms, hence a direct comparison between companies using such terms may not be possible. We believe that EBITDA and the other financial measures facilitate comparisons of operating performance from period to period and company to company by eliminating potential differences caused by variations in capital structures (affecting interest expense and finance charges), tax positions (such as the impact on periods or companies of changes in effective tax rates or net operating losses) and the age and booked depreciation and amortization of assets (affecting relative depreciation and amortization expenses). EBITDA and the other financial measures have been presented because we believe that they are frequently used by securities analysts, investors and other interested parties in evaluating similar companies, many of whom present such non-IFRS financial measures when reporting their results. Finally, EBITDA and other financial 8

measures are presented as supplemental measures of our ability to service debt. Nevertheless, EBITDA and the other financial measures have limitations as analytical tools, and potential investors should not consider these in isolation from, or as a substitute for, analysis of our financial condition or results of operations, as reported under IFRS. Due to these limitations, EBITDA and the other financial measures should not be considered as measures of discretionary cash available to invest in the growth of our business. We do not consider these non-IFRS financial measures to be a substitute for, or a superior to, the information by IFRS financial measures, and they may not be comparable to similarly titled measures disclosed by other companies. Constant Exchange Rates We also use the non-IFRS financial measures at constant exchange rates to show changes in our combined revenue without giving effect to period-to-period currency fluctuations. Under IFRS, revenues received in local (non-U.S. dollar) currency are translated into U.S. dollars at the average exchange rate for the period presented. When we use the term “at constant exchange rates” in this offering document, it means that we have translated local currency revenues for the current reporting period into U.S. dollars using the same average foreign currency exchange rates for the conversion of revenues into U.S. dollars that we used to translate local currency revenues for the comparable reporting period of the prior year. We then calculate the change, as a percentage, of the current period revenues using the prior period exchange rates versus the prior period revenues. This resulting percentage is a non-IFRS measure referring to a change as a percentage “at constant exchange rates”. We believe that revenue growth is a key indication of how a company is progressing from period to period and that the non-IFRS financial measure constant currency is useful to investors, lenders, and other creditors because such information enables them to gauge the impact of currency fluctuations on a company’s revenue from period to period. However, we also believe that the usefulness of data on constant currency period-over-period changes is subject to limitations, particularly if the currency effects that are eliminated constitute a significant element of our revenue and significantly impact our performance. We therefore limit our use of constant currency period-over-period changes to a measure for the impact of currency fluctuations on the translation of local currency revenue into U.S. dollars. We do not evaluate our results and performance without considering both constant currency period-over-period changes in non-IFRS revenue on the one hand and changes in revenue prepared in accordance with IFRS on the other. We caution investors to follow a similar approach by considering data on constant currency period-over-period changes only in addition to, and not as a substitute for or superior to, changes in revenue prepared in accordance with IFRS. We present the fluctuation derived from IFRS revenue next to the fluctuation derived from non-IFRS revenue. As the reconciliation is inherent in the disclosure, we believe that a separate reconciliation would not provide any additional benefit. MARKET AND INDUSTRY INFORMATION Market data used in this offering document under the captions “ Summary ”, “ Risk Factors ”, “ Management’s Discussion and Analysis of Financial Condition and Results of Operations ” and “ Business ” has been extracted from official and industry sources and other sources we believe to be reliable. Sources of these data, statistics and information include “The Nielsen Company (Singapore) Pte Ltd” (the “ Industry Consultant ” or “ The Nielsen Company ”). We commissioned the Industry Consultant to prepare the market assessment of the retail and consumer finance industries in South Asia included in this offering document. The Industry Consultant has advised us that the statistical and graphical information contained herein under “ Industry Overview ” has been drawn from its databases and other sources.

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The Industry Consultant advises that its forecasts should be regarded as indicative assessments of possibilities rather than absolute certainties, and that the process of making forecasts involves assumptions in respect of a considerable number of variables which are acutely sensitive to changing conditions, variations in any one of which may significantly affect the outcome. The Industry Consultant advises that, while it has made certain assumptions with careful consideration of factors known as at the Latest Practicable Date, prospective investors should consider the risk that any of the assumptions may be incorrect or incomplete. The Industry Consultant advises further that this section contains significant volumes of information which are derived from third-party sources, and that, while the Industry Consultant believes that such third-party sources are reliable, the Industry Consultant does not warrant or represent that such information is accurate or correct. The Industry Consultant accepts liability only to the extent of any error or omission from, or a false or misleading statement in, its section and information derived from its section, and does not accept liability for any omission or statement in any other part of this offering document. The Industry Consultant is an independent company with a presence in approximately 100 countries that carries out analysis and research from time to time to provide clients with an understanding of consumers and consumer behavior. The Industry Consultant (or any of its directors, officers, employees and affiliates) may, to the extent permitted by law, own or have a position in the securities of (or options, warrants or rights with respect to, or interest in, the shares or other securities of) our Company. The Industry Consultant is aware of, and has consented to, the inclusion of its names and report in this offering document. The data, statistics and information under the captions “ Summary ”, “ Risk Factors ”, “ Management’s Discussion and Analysis of Financial Condition and Results of Operations ” and “ Business ” have been accurately reproduced and, as far as we are aware and are able to ascertain from information published or provided by the Industry Consultant, no facts have been omitted that would render the reproduced information, data and statistics inaccurate or misleading. Reports and industry publications generally state that the information that they contain has been obtained from sources believed to be reliable, but that the accuracy and completeness of that information are not guaranteed. Although we believe the information that the Industry Consultant supplied is reliable, we and the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager and our and their affiliates and advisors, have not independently verified and make no representation regarding the accuracy and completeness of this information. Similarly, internal surveys, industry forecasts and market research, which we believe to be reliable, have not been independently verified, and neither the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager nor we make any representation as to the accuracy or completeness of this information. CERTAIN DEFINED TERMS AND CONVENTIONS In this offering document, references to “ our Company ” are to Sewko and, unless the context otherwise requires, the terms “ we ”, “ us ”, “ our ” and “ our Group ” refer to Sewko and its subsidiaries taken as a whole. Words importing the singular shall, where applicable, include the plural and vice versa and words importing the masculine gender shall, where applicable, include the feminine and neuter genders. References to persons shall include corporations. In this offering document, references to “ S$ ”, “ SGD ”, “ Singapore dollar ” or “ Singapore cent ” are to the lawful currency of the Republic of Singapore, references to “ US$ ” or “ U.S. dollar ” are to the lawful currency of the United States, references to “ Sri Lankan rupee ”, “ LKR ”, “ SLR ” or “ Rs ” are to the lawful currency of the Socialist Republic of Sri Lanka, references to “ Bangladeshi taka ”, “ BT ” or “ BDT ” are to the lawful currency of the People’s Republic of Bangladesh, references to “ Pakistani rupee ” or “ PKR ” are to the lawful currency of the Islamic Republic of Pakistan, references to “ Indian rupee ” or “ INR ” are to the lawful currency of the Republic of India, and references to “ Thai baht ”, “ baht ” or “ THB ” are to the lawful currency of the Kingdom of Thailand.

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Any discrepancies in the tables included herein between the listed amounts and totals thereof are due to rounding. The information on our websites or any website directly or indirectly linked to such websites or the websites of any of our related corporations or other entities in which we may have an interest is not incorporated by reference into this offering document and should not be relied on. References to our management and Directors are to the management and Directors of our Company; references to our “ Memorandum and Articles of Association ” are to the Memorandum of Association and Articles of Association of our Company which have been adopted with effect from the date of listing of our Shares on the SGX-ST; and references to our share capital in “ Appendix D – Description of our Shares ” and elsewhere are to the share capital of our Company. In addition, unless we indicate otherwise, all information in this offering document assumes that (i) the Stabilizing Manager has not exercised the Over-allotment Option; and (ii) no Offering Shares have been re-allocated between the International Offer and the Singapore Public Offer. The terms “ Depositor ”, “ Depository Agent ” and “ Depository Register ” shall have the meanings ascribed to them respectively in Section 130A of the Companies Act, Chapter 50 of Singapore (the “ Singapore Companies Act ”) Any reference in this offering document and the Application Forms to any statute or enactment is a reference to that statute or enactment for the time being amended or re-enacted. Any word defined under the Singapore Companies Act and the Securities and Futures Act or any statutory modification thereof and used in this offering document and the Application Forms shall have the meaning assigned to it under the Singapore Companies Act and the Securities and Futures Act or such statutory modification, as the case may be. Any reference in this offering document and the Application Forms to Shares being allotted to an applicant includes allotment to the Central Depository (Pte) Limited (the “ CDP ”) for the account of that applicant. References to the “ Latest Practicable Date ” in this offering document are to September 13, 2013, which is the latest practicable date prior to the lodgment of this offering document with the Authority. Certain Sri Lankan, Bangladeshi, Pakistani, Indian and Thai names and characters, such as those of entities, properties, cities, governmental and regulatory authorities, laws and regulations and notices, have been translated into English or from English names and characters, solely for your convenience, and such translations should not be construed as representations that the English names actually represent the Sri Lankan, Bangladeshi, Pakistani, Indian and Thai names and characters or (as the case may be) that the Sri Lankan, Bangladeshi, Pakistani, Indian and Thai names actually represent the English names and characters. Any reference to dates or times of day in this offering document, the Application Forms and, in relation to the Electronic Applications (as defined in page N-1 of this offering document), the instructions appearing on the screens of the ATMs or the relevant pages of the Internet banking websites of the relevant Participating Banks, are to Singapore dates and times unless otherwise stated. Any reference in this offering document, the Application Forms and, in relation to the Electronic Applications, the instructions appearing on the screens of the ATMs or the relevant pages of the Internet banking websites of the relevant Participating Banks, to any statute or enactment is to that statute or enactment as amended or re-enacted. Any word defined in the Securities and Futures Act, the Singapore Companies Act, or any statutory modification thereof and used in this offering document has the meaning ascribed to it under the Securities and Futures Act, the Singapore Companies Act or any statutory modification thereof, as the case may be, unless otherwise indicated. 11

CORPORATE INFORMATION
Company . . . . . . . . . . . . . . . . Directors . . . . . . . . . . . . . . . . Sewko Holdings Limited Stephen H. Goodman (Chairman and Executive Director) Gavin John Walker (President, Chief Executive Officer and Executive Director) Tobias Josef Brown (Non-Independent Non-Executive Director) Peter James O’Donnell (Non-Independent Non-Executive Director) Jeremy Paul Egerton Hobbins (Lead Independent Non-Executive Director) Hui Choon Kit (Independent Non-Executive Director) Laurent Levan (Independent Non-Executive Director) Malcolm John Matthews (Independent Non-Executive Director) KCS Corporate Services Pte Ltd 36 Robinson Road #17-01 City House Singapore 068877 Busarakham Kohsikaporn, FCIS Hazel Chia Luang Chew, FCIS

Company Secretary . . . . . . . .

Company Registration Number . . . . . . . . . . . . . . . . . Registered Office . . . . . . . . . .

277964 c/o Maples Corporate Services Limited PO Box 309 Ugland House Grand Cayman, KY1 – 1104 Cayman Islands Tel: +1 345 9498066 Fax: +1 345 9498080 Singer (Sri Lanka) PLC (“Singer Sri Lanka”) No. 80 Nawam Mawatha Colombo 2 Sri Lanka Tel: +94 11 2316316 Fax: +94 11 2423544 Singer Bangladesh Ltd (“Singer Bangladesh”) 5-B, Road #126 Gulshan-1 Dhaka-1212 Bangladesh Tel: +880 2 8825864 Fax: +880 2 9858247

Principal Places of Business. .

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Singer Pakistan Ltd (“Singer Pakistan”) Plot 39, Sector 19 Korangi Industrial Park Karachi 74900 Pakistan Tel: +92 21 35052941 Fax: +92 21 35052956 Singer India Limited (“Singer India”) A-26/4, IInd Floor Mohan Co-operative Industrial Area New Delhi 110044 India Tel: +91 11 40617777 Fax: +91 11 40617799 Singer Thailand PCL (“Singer Thailand”) 72, CAT Telecom Tower 17th Floor Charoen Krung Road Bangkok 10500 Thailand Tel: +66 2 3524777 Fax: +66 2 3524799 Administrative Office. . . . . . . . 7th Floor, Baskerville House 13 Duddell Street, Hong Kong Tel: +852 31562860 Fax: +852 31562864 ReHo Limited 89 Nexus Way PO Box 31106 Camana Bay, Grand Cayman, KY1 – 1205 Cayman Islands UCL Asia Holdings VII Limited c/o KCS Chambers PO Box 4051 Road Town, Tortola British Virgin Islands Grantors of the Over-allotment Option . . . . . . . . . . . . . . . . . .

Vendors . . . . . . . . . . . . . . . . .

ReHo Limited 89 Nexus Way PO Box 31106 Camana Bay, Grand Cayman KY1 – 1205 Cayman Islands UCL Asia Holdings VII Limited c/o KCS Chambers PO Box 4051 Road Town, Tortola British Virgin Islands 13

Share Registrar . . . . . . . . . . .

Boardroom Corporate & Advisory Services Pte. Ltd. 50 Raffles Place #32-01 Singapore Land Tower Singapore 048623

Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager. . . . . . . . . . . . . . . . .

The Hongkong and Shanghai Banking Corporation Limited, Singapore Branch 21 Collyer Quay #09-02 HSBC Building Singapore 049320 UOB Kay Hian Private Limited 8 Anthony Road #01-01 Singapore 229957 The Hongkong and Shanghai Banking Corporation Limited, Singapore Branch 21 Collyer Quay #09-02 HSBC Building Singapore 049320

Public Offer Coordinator . . . . .

Stabilizing Manager . . . . . . . .

Legal Advisor to our Company as to Singapore Law and U.S. Federal Securities Law . . . . . Clifford Chance Pte Ltd 12 Marina Boulevard 25th Floor Marina Bay Financial Centre Tower 3 Singapore 018982 Legal Advisor to the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager as to Singapore Law and U.S. Federal Securities Law . . . . .

Allen & Overy LLP 50 Collyer Quay #09-01 OUE Bayfront Singapore 049321

Legal Advisor to our Company as to British Virgin Islands and Cayman Islands Law . . . .

Maples and Calder 53rd Floor, The Center 99 Queen’s Road Central Hong Kong

Legal Advisor to our Company as to Bangladesh Law . . . . . .

Syed Ishtiaq Ahmed & Associates Concord Ovilash (1st Floor) House No. 62

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Road No. 11A Dhanmondi Dhaka-1209 Bangladesh Legal Advisor to our Company as to Hong Kong Law . . . . . . .

Clifford Chance 28th Floor, Jardine House One Connaught Place Hong Kong

Legal Advisor to our Company as to India Law. . . . . . . . . . . .

PRA Law Offices W-126 Ground Floor Greater Kailash II New Delhi-110 048 India

Legal Advisor to our Company as to Pakistan Law . . . . . . . . .

Vellani & Vellani 148 18th East Street Phase I Defence Officers’ Housing Authority Karachi-75500 Pakistan

Legal Advisor to our Company as to Sri Lanka Law . . . . . . . .

Nithya Partners No: 97A Galle Road Colombo 03 Sri Lanka

Legal Advisor to our Company as to Thai Law . . . . . . . . . . . .

Chandler and Thong-ek Law Offices Limited 7th-9th Floor Bubhajit Building 20 North Sathon Road Bangkok 10500 Thailand

Independent Auditors and Joint Reporting Accountants . .

KPMG Phoomchai Audit Limited Empire Tower 50th-51st Floors 195 South Sathorn Road Bangkok 10120 Thailand Mr. Paul Flipse, Partner Practicing Member of the Netherlands Institute of Chartered Accountants KPMG LLP (in its capacity as Joint Reporting Accountant) 16 Raffles Quay #22-00 Hong Leong Building Singapore 048581 Mr. Barry Lee, Partner Practicing Member of the Institute of Singapore Chartered Accountants

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Receiving Bank . . . . . . . . . . .

The Hongkong and Shanghai Banking Corporation Limited, Singapore Branch 20 Pasir Panjang Road (East Lobby) #12-21, Mapletree Business City Singapore 117439 The Hongkong and Shanghai Banking Corporation Limited HSBC Main Building 1 Queen’s Road Central Hong Kong Standard Chartered Bank (Hong Kong) Limited 4-4A Des Voeux Road Central Hong Kong Merrill Lynch Global Wealth Management New York International Complex 601 Lexington Avenue, 46th Floor New York, NY 10022 USA Commercial Bank of Ceylon PLC No. 21, Bristol Street Colombo 1 Sri Lanka Eastern Bank Limited Jiban Bima Bhaban 10 Dilkusha Commercial Area Dhaka 1000 Bangladesh Bank Alfalah Limited BA Building I.I. Chundrigar Road Karachi Pakistan Krung Thai Bank Public Company Limited 10 Sukhumvit Road Kwang Klongtoey, Khet Klongtoeey Bangkok 10110 Thailand

Principal Bankers . . . . . . . . . .

Industry Consultant. . . . . . . . .

The Nielsen Company (Singapore) Pte Ltd 47 Scotts Road #13-00 Goldbell Towers Singapore 228233

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SUMMARY
This summary highlights information contained elsewhere in this offering document and may not contain all of the information that may be important to you, or that you should consider before deciding to invest in the Offering Shares. You should read this entire offering document, including our financial statements and related notes and the section entitled “Risk Factors”, before making a decision to invest in the Offering Shares. Overview We are the largest retailer of household consumer durable (“ HCD ”) products in Sri Lanka, Bangladesh and Pakistan 1. We have 922 stores and 2,105 independent dealers across Sri Lanka, Bangladesh, Pakistan and India, as at March 31, 2013. In Thailand, we operate a direct selling business with 211 direct selling depots and 2,724 sales canvassers, as at March 31, 2013. Since the SINGER ® brand was first established in 1851 with the creation of the Singer company, we have evolved into one of the most recognized HCD retail brand names in South Asia, offering our customers a wide range of HCDs, including home appliances, consumer electronics, IT products, furniture and sewing machines, substantially all of which can be purchased through consumer credit which we provide. Our brand offering includes both house brands as well as widely recognized third-party brands, including Apple, Beko, Dawlance, Godrej, Grundig, Haier, Hitachi, Huawei, Onida, Philips, Prestige, Samsung, Skyworth, TCL, Tefal, Videocon and Whirlpool, some of which are under exclusive distribution arrangements. We have operated in each of our markets for over 100 years. We are the leading provider of HCD consumer credit in Sri Lanka, Bangladesh and Pakistan 2, where consumer credit is often expensive and difficult to obtain. We offer a wide variety of credit products, including hire purchase, leasing facilities and group sales (offered by partnering with organizations to provide easy payment terms to their employees for purchases of our products). As at March 31, 2013, we managed 679,895 active credit accounts, with total installment accounts receivable of US$218.5 million. In addition, we provide transaction-based financial services such as bill payments, inward remittances, mobile phone reloads and acceptance of public deposits as well as extended warranties and customer protection plans. In 2012, we processed on average nearly one million consumer finance and financial services transactions per month. We believe that through our long-term presence in the region, we have established a strong brand identity that our customers associate with trust, quality and consumer finance. Our ability to provide customers a complementary mix of products, services and brands, including consumer finance to purchase these products, through our extensive distribution network, and high-quality customer service, has enabled us to realize meaningful synergies and grow our Company successfully. During the period from 2010 to 2012, we have increased our retail store base by 97 stores to 909 stores, our independent dealer network by over 600 independent dealers and the number of direct selling depots by 17. Our revenue totaled US$326.3 million in 2010, US$406.7 million in 2011 and US$435.9 million in 2012, representing a compound annual growth rate (“ CAGR ”) of 15.6% from 2010 to 2012. Our Adjusted EBITDA totaled US$37.2 million in 2010, US$46.5 million in 2011 and US$56.2 million in 2012, representing a CAGR of 22.9% from 2010 to 2012. Our Adjusted Profit totaled US$13.3 million in 2010, US$21.6 million in 2011 and US$26.5 million in 2012.

1 2

Source: The Nielsen Company. Source: The Nielsen Company.

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We believe that our core markets of Sri Lanka, Bangladesh, Pakistan, India and Thailand will continue to offer attractive opportunities for growth based on their strong economic and demographic prospects and relatively undeveloped and fragmented markets for HCDs and consumer credit. We intend to grow our business and increase profitability by expanding and enhancing our distribution platform, introducing new brands and products, expanding our consumer credit and financial services offerings, increasing and enhancing our online presence and penetrating additional markets, such as the ASEAN countries of Myanmar, Cambodia and Laos. Competitive Strengths We believe that we are well positioned to maintain our leadership in the HCD and consumer finance markets in South Asia and deliver growth as a result of the following competitive strengths: Extensive multi-channel retail and wholesale distribution platform We are the largest retailer of HCD products in Sri Lanka, Bangladesh and Pakistan 1, with 922 stores and 2,105 independent dealers across Sri Lanka, Bangladesh, Pakistan and India, as at March 31, 2013. In Thailand, we operate a direct selling business with 211 direct selling depots and 2,724 sales canvassers, as at March 31, 2013. Our extensive network services metropolitan, urban and rural areas, providing customers with wide access to products and services. In addition, our multi-format retail stores cater to evolving customer preferences and local market conditions. Our distribution network is supported by a highly experienced and professional sales force of store managers with 2,422 store staff and 2,724 canvassers, as at March 31, 2013. In addition, our online retail portal has begun to tap into the nascent but growing online retail market. We believe our multi-channel distribution strategy allows for effective market penetration by matching customer segments with corresponding product and credit needs while also providing a platform and resources for future growth in our countries of operations. Through our extensive distribution network, we offer a wide range of HCD products, comprising home appliances, consumer electronics, IT products, furniture, sewing machines and other products. In addition to the SINGER ® and other house brands, we offer a broad range of widely recognized third-party brands, including Apple, Beko, Dawlance, Godrej, Grundig, Haier, Hitachi, Huawei, Onida, Philips, Prestige, Samsung, Skyworth, TCL, Tefal, Videocon and Whirlpool, some of which are under exclusive distribution arrangements. We believe that our strong market position in the HCD retail industry in South Asia has enhanced our ability to negotiate better prices and product offerings with our suppliers. We believe that the third-party brands we offer increase our brand image as a retailer and provide our customers with a wider selection. We also offer customers house-branded products, some of which we manufacture or assemble domestically where there are local efficiencies or tax and duty incentives. We believe our mix of house and third-party brands allows us to significantly improve both the value proposition we provide our customers and our margins compared to retailers that offer only third-party brands. Internationally recognized and domestically established SINGER ® brand The SINGER ® brand was first established in 1851 with the creation of the Singer company, the internationally-recognized sewing machine brand that has evolved into one of the most recognized HCD retail brand names in South Asia. We have focused on selling high-quality house brand and third-party products, providing credit to finance the purchase of these products and closely interacting with and providing service to our customer base to develop a widely recognized brand, as evidenced by the numerous accolades and awards we have received, including recognition as the “ Most Popular Brand in Sri Lanka ” every year since 2005.
1

Source: The Nielsen Company.

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We believe that we have established a strong brand identity that our customers associate with trust, quality and consumer finance. We believe these positive, emotional tie-ins result from our long-term presence in the regions in which we operate, the high quality of our HCD products, the wide range of consumer finance products that make our HCDs accessible to a broad base of consumers, our high-quality after-sales customer service and our commitment to improving the local communities where we operate. We believe we will continue to benefit from this market position as the established brand loyalty of consumers to incumbent players, the high start-up costs for new entrants and low bargaining power of less-established retailers pose significant barriers to entry for potential entrants in our countries of operations. We have an exclusive perpetual license to use and sub-license the SINGER ® brand and trademark in all countries in the Asia Pacific region (excluding Japan and Korea), except in respect of sewing-related products and ironing presses for which we have an exclusive perpetual distribution agreement. This will ensure that we hold the exclusive right to the use of our brand in our current countries of operations, while providing us the opportunity to expand into other Asian markets. We will continue to maximize our internationally recognized and domestically established SINGER ® brand in order to cross-sell our various products and services, penetrate new markets and segments and grow our customer base and customer loyalty. Integrated consumer credit and financial services operations with strong credit control We are the leading provider of HCD consumer credit in Sri Lanka, Bangladesh and Pakistan 1, where consumer credit is often expensive and difficult to obtain. Beginning in 1856, the Singer company pioneered the use of installment payment plans to enable customers to afford and immediately purchase a sewing machine. We continue to provide our customers with installment and other credit services, thus maintaining a long tradition of enabling our customers to have access to HCD products. We offer a wide variety of credit products, including hire purchase and group sales for substantially all of our HCD products. In addition, we provide leasing facilities, transaction-based financial services such as bill payments, remittances from abroad, mobile phone reloads and acceptance of public deposits, among others, as well as extended warranties and customer protection plans. In 2012, we processed an average of nearly one million consumer finance and financial services transactions each month. We are introducing additional financial products such as Singer credit cards, mobile wallets and branchless banking. We believe that these new credit products will allow us to continue to serve our customers over time as consumer credit needs develop and evolve. We operate in emerging markets, where disposable income levels, while increasing, remain lower than those in more developed markets. Our target markets’ financing needs have typically been under-served by the traditional financial sector; most of our customers do not have access to readily-available capital for upfront payment for products. Since our establishment, we have been developing the necessary market knowledge and logistics network to service the credit needs of multiple segments of the population in our countries of operations. As at March 31, 2013, we managed a total of 679,895 active credit accounts with total installment accounts receivable of US$218.5 million. Our comprehensive credit control system monitors receivables performance on a real-time basis, which has resulted in a relatively low level of credit write-offs and nonperforming loans in the context of the countries in which we operate. Combined with our in-depth knowledge of the retail industry, we believe that our extensive experience with risk management and consumer financing represents a competitive advantage that we have and will continue to enhance through our future and expanded consumer finance services and products offering.

1

Source: The Nielsen Company.

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Highly experienced management team with proven track record backed by highly motivated and trained staff We are led by an executive management team with extensive operational and management experience in the HCD retail and consumer finance industries, which has successfully increased our revenue and profits, delivering growth even during economic downturns such as the recent global financial crisis and Eurozone debt crisis. The key members of the executive management team, which include our Group management team and each country’s key managers, have an average experience level of 22 years managing HCD retail and providing consumer finance services to our customers. They have a deep understanding of regional and local markets, suppliers, competitors and customers. Our executive management team, whose average age is 50 years, have worked with us for an average of 18 years each. They have built a solid platform for growth through implementing a wide range of changes since 2005, including the creation of the Singer Information System (defined below), enhancing the credit control mechanisms, increasing third-party brands and introducing new products and service lines. Our executive management team is supported by a motivated and trained network of staff, ranging from our branch managers to our store staff and canvassers across the five countries where we operate. Our “Singer” culture, which we actively promote, and our extensive incentive schemes work together to enhance performance. We monitor our employees’ performance based on criteria such as sales, collections, merchandising, inventory management, daily cash management, store administration and staff morale. In addition, substantially all of our employees undergo training through the Singer Retail Academy (“ SRA ”), a program that seeks to train, motivate and develop our employees. Further, to drive and reward operational excellence, in 2006 we introduced “The Star Performer” award and monthly newsletter recognizing the management with the best trading performance. We believe that the “Singer” culture of awarding operational performance and the training provided to our employees have led to an increase in sales, better collection rates and an improvement in the quality of the customer service experience we provide. High-quality customer service We emphasize building long-term sustainable relationships with our customers, and we view high-quality customer service as a key differentiating factor from our competitors in the HCD retail and consumer finance markets. The quality of after-sales services is particularly important for our consumer finance operations, as collections can be severely impacted if products are no longer operational or are not repaired promptly. Our customer service is supported by call centers in each country and a widespread network of 1,133 sales outlets, 33 service centers and 871 franchise service agents, as at March 31, 2013. Our call centers assist customers during the sales and credit process, make outbound and inbound marketing calls and provide information relating to our HCD and consumer finance products and services. Our sales outlets, service centers and franchise service agents provide in-person assistance relating to the use of our HCD products. We also rely on customer house visits by our canvassers following a direct sale. We conduct regular product clinics in selected outlets on a rotational basis, whereby experienced service agents answer customer queries, offer advice on SINGER ® and third-party brand products and provide free servicing and repairs. Store managers and staff undergo product knowledge training by the SRA, which we believe is essential to ensure sales employees can properly explain the features of the products we offer. Our dedication to high-quality customer service has been critical to the selling of additional HCD products and cross-selling of consumer finance products, such as extended warranties. Further, we believe that companies manufacturing third-party brands have entered into distribution agreements with us in part due to the quality of our customer service. We continuously seek to improve our overall customer experience and improve operational efficiency and customer loyalty.

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Fully-integrated, advanced online IT system We have developed and currently operate a fully-integrated, advanced online enterprise resource planning (“ ERP ”) system (the “ Singer Information System ”), a tailored software system that, among other things, provides us with real-time business information including sales, inventory levels and data relating to our consumer finance operations. The Singer Information System allows us to increase operational efficiency and reduce costs across our distribution network and in our consumer finance business. In particular, our Singer Information System has allowed us to manage information in such a way as to increase the likelihood that we can offer the products the customer wants to purchase while optimizing the associated inventory levels. The Singer Information System also offers a sophisticated management platform for our consumer finance operations that integrates our numerous customer accounts, their credit portfolios and installment plans and customer payment profiles. Strategies Our strategic goal is to continue to strengthen our leading position in the HCD retail and consumer finance industries in our core markets of Sri Lanka, Bangladesh, Pakistan, India and Thailand by providing a diversified range of products and services aimed at satisfying our customers’ needs. At the same time, we intend to expand our operations into certain high growth ASEAN countries. In order to achieve these goals, we have developed a growth strategy with the following key elements. Expand and enhance our distribution platform From December 31, 2010 to December 31, 2012, we increased our retail store base by 97 stores, our independent dealer network by over 600 independent dealers and our direct selling depots by 17. Over the period from January 1, 2013 to December 31, 2014, we intend to grow our retail store base by a further approximately 130 stores, add approximately 400 independent dealers and approximately 20 direct selling depots. These additional stores, dealers and depots will be located in areas with high growth potential, focusing particularly on the fast developing rural populations that are currently underserved by us and our competitors. Our historical and projected distribution platform growth is represented in the chart below:

Number of retail stores and direct selling depots

1,500

3,000

1,200

2,400 Number of independent dealers

900

1,800

600

1,200

300

600

FY2010 FY2011 187 850 2,211 FY2012 200 909 2,435 FY2013 210 969 2,690 FY2014 220 1,039 2,835 183 812 1,797

-

Direct selling depots Retail stores Independent dealers

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We also plan to enhance our existing retail network by renovating older stores, enlarging the retail space within our existing stores and relocating stores to more suitable locations as appropriate. The growth potential of renovated stores is enhanced as customers are afforded a more modern, professional and exciting shopping environment. The larger renovated stores are also able to display a greater range of HCDs and brands. Our policy is to complete a major store renovation at least every six years, with lower cost upgrades every two years. From 2010 to 2012, we renovated 187 stores. Over the period from January 1, 2013 to December 31, 2014, we intend to renovate or relocate approximately 220 stores. Introduce new brands and products We believe it is critical for us to continually review, tailor and enhance our product offerings in response to evolving customer preferences and new opportunities that arise. We plan to continue to take advantage of our extensive distribution platform, established and trusted retail brand, consumer credit operations, strong customer service and after-sales support and manufacturing and assembly capabilities to offer new house-branded and third-party branded products on an ongoing basis. We currently provide a wide range of third-party brands which we will continue to expand in the future. In 2012, we entered into a distribution agreement with Huawei, which is one of the largest telecommunications equipment manufacturers and one of the largest smart phone producers in the world, for the sale of smart phones and tablets in Sri Lanka and Bangladesh. We have also recently started selling Apple products in our stores in Sri Lanka and Bangladesh. These IT products do not require significant additional selling space. We believe this will attract new customers into our stores. IT products comprised 5.8% of total sales for the three months ended March 31, 2013, but we believe this percentage could increase significantly over the period from April 1, 2013 to December 31, 2014. We also entered into distribution agreements with the highly recognized Indian brands Godrej, Onida and Videocon and the European brands Beko and Grundig in 2012 and the first quarter of 2013; these have been very well received by our customer base. In addition to third-party brands, we intend to continue to expand the range of house-branded products as new designs and models become available. Building on the success of our furniture business under Singer Homes in Sri Lanka, we have begun to sell furniture in Bangladesh, mostly sourced from our own factories or local vendors. We intend to begin to sell furniture in Pakistan in the second half of 2013. We believe furniture provides opportunities for higher gross margins and increased credit earnings while allowing for lower service and with inherent lower credit risk. We intend to utilize the Singer Homes retail format and provide installment credit for the purchase of furniture, which is not widely available in Bangladesh and Pakistan. We expect the product contribution of furniture to increase from the 2.7% of total sales that it represented for the three months ended March 31, 2013. Expand our consumer credit and financial services operations We intend to make our products more affordable to our customers by extending the average term of our hire purchase offerings, thereby lowering the monthly installments. We expect that this will allow our sales staff the opportunity to sell higher-value products to existing customers while also enticing new customers into our stores. Further, the longer credit term of our installment plans should increase the total finance charge income. We have also introduced additional collection incentives to our branch staff to encourage the growth of well-managed credit portfolios.

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In the financial services business, we intend to expand our bill payment services, remittance business, mobile phone reload and branchless banking. In particular, we plan to introduce a Singer credit card in Sri Lanka via our finance company Singer Finance (Lanka) PLC to our existing hire purchase customer base. In addition to an increase in revenue, we believe that by providing a growing variety of financial products and services, we will increase our store footfall by attracting new customers and encouraging repeat visits by our existing customers. We expect that this will allow more customers the opportunity to view the range of our HCD products and experience our Singer customer service. We believe that these new credit and financial service products will position us to continue to serve our customers over time as consumer credit needs develop and evolve in our markets. Penetrate additional markets in the ASEAN region We believe that in addition to the countries where we currently operate, we are well positioned to take advantage of new opportunities in other countries within the Asia Pacific region. We have an exclusive perpetual license to use and sub-license the SINGER ® brand and trademark in all countries in the Asia Pacific region (excluding Japan and Korea), except for sewing-related products and ironing presses for which we have an exclusive perpetual distribution agreement. See “ Business – Branding and Intellectual Property ” for a discussion about the scope of our trademark license. We intend to expand our operations into Myanmar, Cambodia and Laos. For nearly 30 years, dealers from Myanmar, Cambodia and Laos have purchased certain of our Singer products from our locations in Thailand situated near the borders with these countries. These markets have a relatively low level of HCD and consumer credit penetration and offer opportunities for sustained future growth. Myanmar is attractive because it provides a variety of investment opportunities reflecting the pace at which the government is liberalizing the economy. Myanmar has a population of approximately 48.6 million people, with a substantial potential market for the sale of HCDs using consumer finance. Myanmar’s GDP has grown at a rate of 5.3% in 2010, 5.5% in 2011 and 6.3% in 2012, according to the World Bank 1. We do not believe there are currently any established retail and consumer finance companies operating in Myanmar. Cambodia and Laos also provide attractive potential growth opportunities. Cambodia has a population of approximately 14.3 million people. The country has, over the past several years, experienced stable economic growth, with GDP increasing by 6.0% in 2010, 7.1% in 2011 and 6.6% in 2012, according to the World Bank 1. Laos, with a population of approximately 6.3 million people, has also benefitted from strong GDP growth of 8.5% in 2010, 8.0% in 2011 and 8.2% in 2012, according to the World Bank 1. The World Bank 1 expects Myanmar, Cambodia and Laos to continue to grow economically. We intend to enter these markets to provide the growing and increasingly affluent populations with our product and consumer finance offerings. In order to successfully take advantage of these promising investment prospects, we have established a strategic business development division, which includes dedicated personnel focused on exploring these expansion opportunities. In addition to expanding our current trading activities, we intend to enter into strategic relationships

1

See “General and Statutory Information − Sources”. The World Bank has not provided its consent, for the purposes of Section 249 of the Securities and Futures Act, to the inclusion of the information extracted from the relevant reports published by it and therefore is not liable for such information under Sections 253 and 254 of the SFA. While we, the Vendors and the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager have taken reasonable actions to ensure that the information from its reports have been reproduced in its proper form and context, and that the information has been extracted accurately and fairly from such report, neither we, the Vendors and the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager nor any other party have conducted an independent review of the information contained in the reports or verified the accuracy of the contents of the relevant information.

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with local partners and/or establish a Singer subsidiary in each of Myanmar, Cambodia and Laos to gain entry into the respective markets and assist us to execute marketing strategies specifically designed to meet the preferences of the local consumers. The nature, timeline and extent of expansion into Myanmar, Cambodia and Laos will depend on a number of factors, including the business, economic and regulatory environment of each country. Increase and enhance our online presence We believe that e-commerce presents an important business opportunity that will enable us to pursue additional growth opportunities in the future. We intend to strengthen our current online sales channel in Sri Lanka and India to match higher online demand from our customers as they increasingly access the Internet and begin to shop online. In addition, given the considerable number of Sri Lankan, Bangladeshi and Pakistani workers in various parts of the world, in 2014 we intend to launch a new web-based service to enable them to make purchases of our products while working outside of their countries of origin and have these delivered to their respective families at home. We plan to use our online portals to promote this service, advertise new products or services, announce new store openings and provide information relating to product promotions. We believe that our online shopping portal will offer our customers a value proposition and help to differentiate us from our competitors, most of which do not offer e-commerce-based sales.

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SUMMARY OF THE OFFERING
The Issuer. . . . . . . . . . . . . . . . . . The Vendors . . . . . . . . . . . . . . . . The Offering . . . . . . . . . . . . . . . . Sewko Holdings Limited, a company incorporated with limited liability under the laws of the Cayman Islands. ReHo Limited and UCL Asia Holdings VII Limited [ ● ] Shares (subject to the Over-allotment Option) offered by our Company and the Vendors through the International Offer and the Singapore Public Offer. The Offering Shares will consist of [ ● ] Issue Shares and [ ● ] Vendor Shares. The completion of the International Offer and the completion of the Singapore Public Offer are each conditional upon the completion of the other. Our Shares have not been and will not be registered under the U.S. Securities Act and, subject to certain exceptions, may not be offered or sold within the United States (as defined in Regulation S). The Offering Shares are being offered and sold outside of the United States in reliance on Regulation S. See “ Plan of Distribution ”. The International Offer . . . . . . . . [ ● ] of the Offering Shares offered by way of an international placement to investors at the Offering Price, including institutional and other investors in Singapore. The International Offer will, subject to certain conditions, be underwritten by the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager. [ ● ] of the Offering Shares offered in Singapore at the Offering Price by way of an offering to the public in Singapore. The Singapore Public Offer will, subject to certain conditions, be underwritten by the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager. The Offering Shares may be re-allocated between the International Offer and the Singapore Public Offer at the sole discretion of the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager. Unless we indicate otherwise, all information in this offering document assumes that no Offering Shares have been re-allocated between the International Offer and the Singapore Public Offer. S$[ ● ] for each Offering Share. Investors are required to pay the Offering Price in Singapore dollars. The Offering Price was determined following a book-building process by the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager.

The Singapore Public Offer . . . .

Clawback and Re-allocation . . . .

Offering Price . . . . . . . . . . . . . . .

Price Determination . . . . . . . . . .

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Brokerage Fee . . . . . . . . . . . . . .

Investors in the International Offer will be required to pay a brokerage fee of up to 1.0% of the Offering Price in connection with their purchase of Offering Shares. See “ Plan of Distribution ”.

Application Procedures for the Singapore Public Offer . . . . . .

Investors under the Singapore Public Offer must follow the application procedures set out in Appendix P – “ Terms, Conditions and Procedures for Application for and Acceptance of the Offering Shares under the Singapore Public Offer ”, which constitutes part of this offering document registered with the Authority. Applications must be paid for in Singapore dollars. The minimum initial application is for 1,000 Offering Shares. An applicant may apply for a larger number of Shares in integral multiples of 1,000 Offering Shares. In connection with the Offering, the Vendors have granted the Stabilizing Manager the Over-allotment Option exercisable in whole or in part on one or more occasions from the Listing Date on the SGX-ST until the earlier of (i) the date falling 30 days from the Listing Date, and (ii) the date when the Stabilizing Manager or its appointed agent has bought on the SGX-ST an aggregate of [ ● ] Shares, representing not more than 15.0% of the total Offering Shares, in undertaking stabilizing actions, to purchase the Additional Shares (representing not more than 15.0% of the total Offering Shares) at the Offering Price, solely to cover the overallotment of the Offering Shares, if any. The Over-allotment Option will be granted by the Vendors in proportion to their respective shareholdings in our Company. The exercise of the Over-allotment Option will not affect the total number of issued Shares outstanding immediately after the completion of the Offering. Unless indicated otherwise, all information in this offering document assumes that the Stabilizing Manager does not exercise the Over-allotment Option. See “ Plan of Distribution – Over-allotment Option ”. We have agreed with the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager, subject to certain exceptions, that from the date of the Underwriting Agreement until the date falling six months from the Listing Date, we will not, without the written consent of the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager, (i) issue, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option or right or warrant to purchase, lend, hypothecate or encumber or otherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for any Shares, (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of Shares or any securities convertible into or exercisable or exchangeable for Shares,

Over-allotment Option. . . . . . . . .

Lock-ups . . . . . . . . . . . . . . . . . . .

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(iii) deposit any Shares or any securities convertible into or exchangeable for or which carry rights to subscribe or purchase Shares in any depository receipt facilities, whether any such transaction described above is to be settled by delivery of Shares or such other securities, in cash or otherwise, or (iv) publicly disclose our intention to do any of the above. See “ Plan of Distribution – No Sales of Similar Securities and Lock-up ” for further information on (i) our lock-up arrangement and (ii) the lock-up arrangements agreed between the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager and our shareholders. Proceeds from the Offering . . . . We will only receive proceeds from the primary offering, not the sale of Vendor Shares. We intend to use our net proceeds from the Offering primarily for the following purposes: • approximately S$[ ● ] million (US$[ ● ]) for the expansion of our product and service offerings, including the expansion of our furniture offering and manufacturing capacity in Sri Lanka, Bangladesh and Pakistan, expansion of our IT offering in all markets and expansion of our financial services offering in Sri Lanka, Bangladesh and Pakistan; approximately S$[ ● ] million (US$[ ● ]) to open new distribution centers for our products and services and for related working capital in new markets in the ASEAN region; approximately S$[ ● ] million (US$[ ● ]) to open new channels of distribution in our existing and new markets, including transactional e-commerce sites; and approximately S$[ ● ] million (US$[ ● ]) for general working capital purposes.

For a complete description of the application of the net proceeds, see “ Use of Proceeds ”. Listing and Trading . . . . . . . . . . . Prior to the Offering, there has been no public market for our Shares. Application has been made to the SGX-ST for permission to list all our issued Shares, the Offering Shares, the Additional Shares and the Scheme Shares on the Main Board of the SGX-ST, which will be granted when we have been admitted to the Official List of the SGX-ST. Acceptance of applications for the Offering Shares will be conditional upon, among other things, permission being granted by the SGX-ST to deal in and for quotation of all our issued Shares, the Offering Shares, the Additional Shares and the Scheme Shares on the Official List of the SGX-ST. We have not applied to any other exchange to list our Shares.

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We expect the Shares to commence trading on a “ready” basis at [ ● ] a.m. on [ ● ], 2013 (Singapore time). See “ Indicative Timetable ”. The Shares will, upon listing and quotation on the SGX-ST, be traded on the SGX-ST under the book-entry (scripless) settlement system of the CDP. Dealing in and quotation of our Shares on the SGX-ST will be in Singapore dollars. The Shares will be traded in board lot sizes of 1,000 Shares on the SGX-ST. Settlement. . . . . . . . . . . . . . . . . . We and the Vendors expect to receive payment for all the Offering Shares in the International Offer and the Singapore Public Offer on or about [ ● ], 2013. We and the Vendors will deliver share certificates representing the Offering Shares to the CDP for deposit into the securities accounts of successful applicants on or about [ ● ], 2013. See “ Clearance and Settlement ”. In connection with the Offering, the Stabilizing Manager (or persons acting on behalf of the Stabilizing Manager) may, but is not obliged to, over-allot Shares or effect transactions that stabilize or maintain the market price of our Shares at levels that might not otherwise prevail in the open market. These transactions may be effected on the SGX-ST and in other jurisdictions where it is permissible to do so, in each case in compliance with all applicable laws and regulations, including the Securities and Futures Act and any regulations thereunder. The number of Shares that the Stabilizing Manager may buy to undertake stabilizing actions will not exceed in aggregate [ ● ] Shares, representing not more than 15.0% of the total Offering Shares. However, we cannot assure you that the Stabilizing Manager (or persons acting on behalf of the Stabilizing Manager) will undertake stabilizing actions. These transactions may commence on or after the commencement of trading of the Shares on the SGX-ST and, if commenced, may be discontinued at any time and shall not be effected after the earlier of (i) the date falling 30 days from the Listing Date, and (ii) the date when the Stabilizing Manager or its appointed agent has bought, on the SGX-ST, an aggregate of [ ● ] Shares representing not more than 15.0% of the total Offering Shares in undertaking stabilizing actions. See “ Plan of Distribution – Over-allotment Option – Price Stabilization ”. The Shares offered in the Offering have not been, and will not be, registered under the U.S. Securities Act. Therefore, resales by subscribers and/or purchasers of Offering Shares and by subsequent transferees will be subject to certain restrictions described in “ Transfer Restrictions ”.

Stabilization . . . . . . . . . . . . . . . .

Transfer restrictions . . . . . . . . . .

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Dividends . . . . . . . . . . . . . . . . . .

We do not have a fixed dividend policy. We will pay dividends, if any, only out of our profits and out of the share premium account as permitted under Cayman Islands law. We will declare dividends in U.S. dollars. Each Shareholder will receive his dividend in the Singapore dollars equivalent of the U.S. dollar dividend declared, unless he elects to receive the relevant dividend in U.S. dollars by submitting a “Dividend Election Notice” by the books closure date. For the portion of the dividends to be paid in Singapore dollars, the Company will make the necessary arrangements to convert the dividend in U.S. dollars into Singapore dollars at such exchange rate as the Company may determine, taking into consideration any premium or discount that may be relevant to the cost of exchange. We cannot assure you that our Company will declare or pay any dividends. See “ Dividends ” for a description of our dividend policy. Prospective investors should carefully consider certain risks connected with an investment in our Shares, as discussed under “ Risk Factors ”.

Risk Factors . . . . . . . . . . . . . . . .

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INDICATIVE TIMETABLE
An indicative timetable for trading in our Shares is set out below for the reference of applicants for our Shares: Indicative date and time (Singapore time) [ ● ], 2013 at [ ● ] p.m. . . . . . . . . . . . . . . . . . . . . [ ● ], 2013 at 12:00 noon . . . . . . . . . . . . . . . . . [ ● ], 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Event Opening of the Singapore Public Offer Close of the Singapore Public Offer and close of the Application List Balloting of applications or otherwise as may be approved by the SGX-ST, if necessary (in the event of an over-subscription for the Offering Shares) Commence trading on a “ready” basis Settlement date for all trades done on a “ready” basis on [ ● ], 2013

[ ● ], 2013 at [ ● ] a.m. . . . . . . . . . . . . . . . . . . . . [ ● ], 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The above timetable is indicative only and is subject to change at our and the Vendors’ discretion, with the agreement of the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager. The above timetable and procedures may also be subject to such modifications as the SGX-ST may in its discretion decide, including the commencement date of trading on a “ready” basis. The above timetable assumes (i) that the closing of the Singapore Public Offer is [ ● ], 2013, (ii) that the date of admission of our Company to the Official List of the SGX-ST is [ ● ], 2013, and (iii) compliance with the SGX-ST’s shareholding spread requirements. All dates and times above are Singapore dates and times. We and the Vendors, with the agreement of the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager, may at our discretion, subject to all applicable laws and regulations and the rules of the SGX-ST, agree to extend or shorten the period during which the Offering is open, provided that the period of the Singapore Public Offer may not be less than two Market Days without the prior approval of the SGX-ST. In the event of the extension or shortening of the time period during which the Offering is open, we will publicly announce the same: (i) through a SGXNET announcement to be posted on the Internet at the SGX-ST website http://www.sgx.com; and in one or more major Singapore newspapers, such as The Straits Times , The Business Times or Lianhe Zaobao .

(ii)

Investors should consult the SGXNET announcement on the “ready” listing date on the Internet (at the SGX-ST website), or in the newspapers, or check with their brokers on the date on which trading on a “ready” basis will commence. We and the Vendors will provide details of and the results of the Singapore Public Offer through SGXNET or in one or more major Singapore newspapers, such as The Straits Times, The Business Times or Lianhe Zaobao .

30

We and the Vendors reserve the right to reject or accept, in whole or in part, or to scale down or ballot any application for the Offering Shares, without assigning any reason therefor, and no enquiry or correspondence on our and the Vendors’ decision will be entertained. In deciding the basis of allocation, due consideration will be given to the desirability of allocating our Shares to a reasonable number of applicants with a view to establishing an adequate market for our Shares. Where an application under the Singapore Public Offer is rejected, the full amount of the application monies will be refunded (without interest or any share of revenue or other benefit arising therefrom) to the applicant, at the applicant’s own risk, within 24 hours of the balloting ( provided that such refunds are made in accordance with the procedures set out in Appendix P – “ Terms, Conditions and Procedures for Application for and Acceptance of the Offering Shares under the Singapore Public Offer ”). Where an application under the Singapore Public Offer is accepted in part only, any balance of the application monies will be refunded (without interest or any share of revenue or other benefit arising therefrom) to the applicant, at the applicant’s own risk, within 14 Market Days after the close of the Offering ( provided that such refunds are made in accordance with the procedures set out in Appendix P – “ Terms, Conditions and Procedures for Application for and Acceptance of the Offering Shares under the Singapore Public Offer ”). In the case of the Singapore Public Offer, if the Offering does not proceed for any reason, the full amount of application monies (without interest or any share of revenue or other benefit arising therefrom) will be returned to the applicants at their own risk within three Market Days after the Offering is discontinued ( provided that such refunds are made in accordance with the procedures set out in Appendix P – “ Terms, Conditions and Procedures for Application for and Acceptance of the Offering Shares under the Singapore Public Offer ”). The manner and method for applications and acceptances under the International Offer will be determined by us, the Vendors and the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager.

31

SUMMARY FINANCIAL INFORMATION
You should read the following summary combined financial information for the periods and as at the dates indicated in conjunction with the section of this offering document entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our combined financial statements, the accompanying notes and the related independent auditors’ report included in this offering document. Our financial statements are reported in U.S. dollars and are prepared and presented in accordance with IFRS. IFRS reporting practices and accounting principles differ in certain respects from U.S. GAAP. For example, U.S. GAAP and IFRS apply different criteria in determining whether to consolidate an investee company. The summary combined financial information as at and for the years ended December 31, 2010, 2011 and 2012 have been derived from our audited combined financial statements included in this offering document and should be read together with those financial statements and the notes thereto. The summary combined financial information as at and for the three-month periods ended March 31, 2012 and 2013 has been derived from our unaudited condensed combined interim financial statements for the three-month periods ended March 31, 2012 and 2013 included in this offering document. We have prepared the unaudited condensed combined interim financial statements on the same basis as our audited annual combined financial statements. Our historical results for any prior or interim periods are not necessarily indicative of results to be expected for a full fiscal year or for any future period. Summary Combined Statement of Income Information Year ended December 31, 2010 2011 2012 US$(’000) Revenue . . . . . . . . . . . . . . . . . . . Cost of sales . . . . . . . . . . . . . . . Gross profit . . . . . . . . . . . Other income . . . . . . . . . . Selling and administrative expenses . . . . . . . . . . . . . Other expenses . . . . . . . . ..... ..... ..... ..... 326,304 (205,243) 121,061 25,937 (86,317) (2,641) 58,040 796 (12,181) (11,385) 406,741 (252,440) 154,301 1,493 (109,948) (3,313) 42,533 1,460 (12,595) (11,135) 435,891 (269,813) 166,078 1,813 (112,180) (3,439) 52,272 1,149 (17,995) (16,846) 104,400 (64,759) 39,641 448 (27,575) (815) 11,699 318 (3,543) (3,225) 110,825 (67,921) 42,904 775 (30,012) (805) 12,862 271 (4,867) (4,596) Three months ended March 31, 2012 2013

Results from operating activities . . . . . . . . . . . . . . . . . . Finance income . . . . . . . . . . . . . Finance costs . . . . . . . . . . . . . . . Net finance costs . . . . . . . . . . . Share of profit of equity accounted investees (net of income tax) . . . . . . . . . . . Profit before income tax . . . . . Income tax (expense)/credit . . . . Profit for the year/period . . . . . Profit attributable to: Owners of the Company . . . . . . Non-controlling interests . . . . . . Profit for the year/period . . . . . Earnings per share (cents). . . . . Earnings per share after adjusting for the issue of the Issue Shares (cents) . . . . . . . . .

1,240 47,895 (12,342) 35,553 26,063 9,490 35,553 6.46 [●]

– 31,398 (9,749) 21,649 15,174 6,475 21,649 3.76 [●]

– 35,426 (8,925) 26,501 16,924 9,577 26,501 4.18 [●]

– 8,474 (2,529) 5,945 4,002 1,943 5,945 0.99 [●]

– 8,266 183 8,449 5,013 3,436 8,449 1.23 [●]

32

Summary Combined Statement of Financial Position Information As at December 31, 2010 2011 2012 As at March 31, 2013

US$(’000) ASSETS Non-current assets Property, plant and equipment . . . Intangible assets and goodwill . . . Trade and other receivables over one year . . . . . . . . . . . . . . . . . . . . Deferred tax assets . . . . . . . . . . . Other non-current assets . . . . . . .

..... ..... ..... ..... .....

54,306 4,039 28,934 4,195 8,243 99,717 54,946 96,147 43,125 9,236 203,454 303,171

52,289 4,018 41,782 4,235 7,548 109,872 71,880 112,261 22,250 11,430 217,821 327,693

60,495 4,464 53,098 3,497 8,969 130,523 87,294 125,478 18,073 12,050 242,895 373,418

62,110 4,449 55,928 5,448 9,915 137,850 93,622 132,824 23,433 14,136 264,015 401,865

Total non-current assets . . . . . . . . . . . Current assets Inventories . . . . . . . . . . . . . . Trade and other receivables Cash and cash equivalents . Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total current assets . . . . . . . . . . . . . . . Total assets . . . . . . . . . . . . . . . . . . . . . . EQUITY AND LIABILITIES Equity Share capital . . . . . . . . . . . Share premium. . . . . . . . . . Reserves . . . . . . . . . . . . . . Retained earnings . . . . . . .

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

10 68,687 15,265 22,750 106,712 38,340 145,052 40,508 10,557 132 95 3,140 4,791 59,223 12,851 2,094 44,109 37,655 1,185 1,002 98,896 158,119 303,171

10 52,987 7,294 40,665 100,956 39,051 140,007 36,947 10,994 208 103 2,231 5,315 55,798 15,705 2,147 61,881 49,161 1,638 1,356 131,888 187,686 327,693

10 41,895 6,627 61,673 110,205 49,701 159,906 37,229 12,503 164 458 2,842 5,858 59,054 22,471 1,303 81,301 46,510 1,019 1,854 154,458 213,512 373,418

10 41,895 7,914 68,350 118,169 53,935 172,104 40,269 12,901 165 500 2,555 6,349 62,739 18,310 2,619 82,186 61,181 779 1,947 167,022 229,761 401,865

Equity attributable to owners of the Company . . . . . . . . . . . . . . . . . . . . . Non-controlling interest . . . . . . . . . . . . Total equity . . . . . . . . . . . . . . . . . . . . . . Non-current liabilities Loans and borrowings . . . . . . . . . Employee benefits . . . . . . . . . . . . Deferred income over one year . . Warranty provision over one year Deferred tax liabilities . . . . . . . . . Other non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total non-current liabilities . . . . . . . . . Current liabilities Bank overdraft . . . . . . . . . Current tax liabilities . . . . Loans and borrowings . . . Trade and other payables Deferred income. . . . . . . . Warranty provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total current liabilities . . . . . . . . . . . . . . Total liabilities . . . . . . . . . . . . . . . . . . . Total equity and liabilities . . . . . . . . . .

33

Summary Combined Statement of Cash Flows Information Year ended December 31, 2010 2011 2012 US$(’000) Cash flows from operating activities Profit for the year . . . . . . . . . . . . . Adjustments for: Depreciation . . . . . . . . . . . . . . . . . Impairment loss on property, plant and equipment . . . . . . . . . . . . . . . . Amortization of intangible assets and goodwill . . . . . . . . . . . . . . . . . Non-cash compensation . . . . . . . . Share of profit of equity accounted investee . . . . . . . . . . . . Gain on sale of investments . . . . . Gain on sale of property, plant and equipment . . . . . . . . . . . Net finance costs. . . . . . . . . . . . . . Tax expense/(credit) . . . . . . . . . . . Changes in: Inventories . . . . . . . . . . . . . . . . . . Trade and other receivables . . . . Other current and non-current assets . . . . . . . . . . . . Trade and other payables . . . . . . Provision and employee benefits. Deferred income . . . . . . . . . . . . . Three months ended March 31, 2012 2013

35,553 3,637 12 – 91 (1,240) (24,496) (91) 11,385 12,342 37,193

21,649 3,995 24 – – – – (126) 11,135 9,749 46,426 (21,502) (34,585) (2,508) 15,022 437 529 3,819 (10,905) (10,073) (17,159)

26,501 3,480 – 453 – – – (146) 16,846 8,925 56,059 (18,985) (31,884) (1,379) 2,320 1,509 (662) 6,978 (16,463) (14,596) (24,081)

5,945 894 – – – – – (70) 3,225 2,529 12,523 (11,728) (11,138) (1,671) 8,325 (1,217) (275) (5,181) (3,383) (1,893) (10,457)

8,449 1,081 – 21 – – – (87) 4,596 (183) 13,877 (5,576) (8,607) (1,994) 13,182 398 (239) 11,041 (4,884) (644) 5,513

. . . . . .

(9,469) (14,763) (2,333) (1,667) (857) 162 8,266 (11,866) (6,624) (10,224)

Cash from/(used in) operating activities . . . . . . . . . . . . . . . . . . . . Interest paid . . . . . . . . . . . . . . . . . Income tax paid . . . . . . . . . . . . . . . Net cash (used in)/from operating activities . . . . . . . . . . . Cash flows from investing activities Interest received . . . . . . . . . . . . Proceeds from sale of property, plant and equipment . . . . . . . . . Proceeds from sale of investments . . . . . . . . . . . . . . . . Acquisition of property, plant and equipment . . . . . . . . . Acquisition of intangible assets .

.. .. .. .. ..

796 583 32,504 (2,943) – 30,940

1,460 287 3,985 (5,060) – 672

1,149 381 5,246 (7,676) (1,021) (1,921)

318 128 1,275 (1,258) – 463

271 711 1,845 (2,548) – 279

Net cash from/(used in) investing activities . . . . . . . . . . .

34

Year ended December 31, 2010 2011 2012 US$(’000) Cash flows from financing activities Proceeds from borrowings. . . Proceeds from share options exercised. . . . . . . . . . Repayment of borrowings . . . Distribution to owners . . . . . . Distribution to non-controlling interests . . . . . . . . . . . . . . . . .

Three months ended March 31, 2012 2013

.... .... .... .... ....

7,413 327 (10,934) (5,500) (379) (9,073) 11,643 14,962 3,669 30,274

29,877 – (12,943) (15,700) (5,704) (4,470) (20,957) 30,274 (2,772) 6,545

62,779 423 (35,996) (11,515) (2,890) 12,801 (13,201) 6,545 2,258 (4,398)

11,360 – (3,890) – (924) 6,546 (3,448) 6,545 (2,634) 463

4,928 – (1,711) – (923) 2,294 8,086 (4,398) 1,435 5,123

Net cash (used in)/from financing activities . . . . . . . . . . . Net increase/(decrease) in cash and cash equivalents . . . . . . . . . Cash and cash equivalents at January 1 . . . . . . . . . . . . . . . . . Effect of exchange rate fluctuations on cash held. . . . . . . . Cash and cash equivalents at December 31/March 31 . . . . . . . .

35

Other Financial Data Three months ended March 31, 2012 5.8% 7.2% 37.4% 27.6% 32.3% 20.0% 56.4% 38.1% 2013 5.0% 6.2% 38.5% 27.2% 32.1% 19.8% 51.5% 38.7%

Year ended December 31, 2010 Net sales growth (%) . . . . . . . . . . . Revenue growth . . . . . . . . . . . . . . . Gross margin (%) (1) Sri Lanka . . . . . . . . . . . . . . . . . . . . Bangladesh . . . . . . . . . . . . . . . . . . Pakistan . . . . . . . . . . . . . . . . . . . . . India . . . . . . . . . . . . . . . . . . . . . . . . Thailand . . . . . . . . . . . . . . . . . . . . . Group . . . . . . . . . . . . . . . . . . . . . . . Non-IFRS Measures Like-for-like sales growth (2)(3) Sri Lanka . . . . . . . . . . . . . . . . . . . . Bangladesh . . . . . . . . . . . . . . . . . . Pakistan . . . . . . . . . . . . . . . . . . . . . Revenue growth at constant exchange rates (3)(4) . . . . . . . . . . . . Revenue per square meter (US$) (3)(5)(8) . . . . . . . . . . . . . . . . . . Sri Lanka . . . . . . . . . . . . . . . . . . . . Bangladesh . . . . . . . . . . . . . . . . . . Pakistan . . . . . . . . . . . . . . . . . . . . . India . . . . . . . . . . . . . . . . . . . . . . . . Revenue per square meter (local currency) (’000) (3)(5)(8) Sri Lanka . . . . . . . . . . . . . . . . . . . . Bangladesh . . . . . . . . . . . . . . . . . . Pakistan . . . . . . . . . . . . . . . . . . . . . India . . . . . . . . . . . . . . . . . . . . . . . . EBITDA (US$) (’000) (3)(6) . . . . . . . . EBITDA margin (3)(7) . . . . . . . . . . . . Adjusted EBITDA (US$) (’000) (3)(6) Adjusted EBITDA margin (3)(7) . . . . .
Notes: (1) (2) Gross margin is calculated by dividing gross profit by revenue.

2011 25.0% 24.6% 38.9% 25.3% 28.7% 20.8% 56.4% 37.9%

.... .... . . . . . . . . . . . . . . . . . . . . . . . .

30.3% 27.2% 37.6% 25.5% 29.2% 21.2% 57.5% 37.1%

.... .... .... .... . . . . . . . . . . . . . . . . . . . .

35.5% 9.4% 6.3% 24.6% 2,626 2,397 2,920 3,243 2,325

23.7% 12.4% 8.8% 24.3% 3,159 3,289 2,785 3,529 3,034

5.4% 25.8% 2.9% 18.8% 3,074 3,088 2,891 3,614 3,152

(4.9)% 5.0% (9.7)% 8.4% – – – – –

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

270.6 203.5 276.1 106.0 61,677 18.9% 37,181 11.4%

363.9 207.0 304.7 141.6 46,528 11.4% 46,528 11.4%

393.7 236.2 336.7 168.2 56,205 12.9% 56,205 12.9%

– – – – 13,964 12.6% 13,964 12.6%

“Like-for-like” sales growth, also known as “same store” or “comparable stores” sales growth, is a non-IFRS financial measure often used by retail companies to measure the performance of their existing retail stores. Like-for-like sales growth is calculated in local currency by selecting stores that have been in full and continuous operation during the current period and the period to be compared against (usually the same period in the prior year). Stores that are opened, closed or renovated during any of the periods being compared are excluded. We have included like-for-like sales to allow investors to determine the portion of revenue increase which has come from sales growth of existing stores and the portion which can be attributed to the opening of new stores. This financial measure is a supplemental measure of our performance and liquidity and is not required by, or presented in accordance with, IFRS, U.S. GAAP or any other generally accepted accounting principles. See “Notice to Investors – Presentation of Financial and Statistical Information – Non-IFRS Financial Measures”.

(3)

36

(4)

Revenue growth at constant exchange rates is a non-IFRS financial measure and is calculated by translating local currency revenues for the current reporting period into U.S. dollars using the same average foreign currency exchange rates for the conversion of revenues into U.S. dollars that we use to translate local currency revenues for the comparable reporting period of the prior year. We calculate the change, as a percentage, of the current period revenues using the prior period exchange rates versus the prior period revenues. See “Notice to Investors – Presentation of Financial and Statistical Information – Non-IFRS Financial Measures – Constant Exchange Rates”. Revenue per square meter is calculated by dividing revenue by the weighted average selling area (in square meters). The weighted average selling area is the average of our aggregate selling area at the end of each month during the financial year. EBITDA is a non-IFRS financial measure and represents results from operating activities before depreciation and amortization. See “Notice to Investors – Presentation of Financial and Statistical Information – Non-IFRS Financial Measures”. Adjusted EBITDA is a non-IFRS financial measure and is calculated by adjusting EBITDA for a one-time gain on sale of investments in associate in 2010 of US$24.5 million following the disposal of our affiliate company in Bangladesh, International Leasing and Financial Services Limited (“ILFS”). See “Notice to Investors – Presentation of Financial and Statistical Information – Non-IFRS Financial Measures”. Set forth below is a reconciliation of our profit before income tax to EBITDA and adjusted EBITDA: Three months ended March 31, 2012 US$(’000) Profit before income tax . . . . . . . . . . . Add: Finance costs . . . . . . . . . . . . . . Add: Depreciation and amortization . . . Less: Finance income . . . . . . . . . . . . Less: Share of profit of equity accounted investee, net of income tax . . . . . . . . . . . . . . . . . 47,895 12,181 3,637 (796) (1,240) 61,677 (24,496) 37,181 31,398 12,595 3,995 (1,460) – 46,528 – 46,528 35,426 17,995 3,933 (1,149) – 56,205 – 56,205 8,266 4,867 1,102 (271) – 13,964 – 13,964 2013

(5)

(6)

Year ended December 31, 2010 2011

. .

EBITDA . . . . . . . . . . . . . . . . . . . . . . . Less: Gain on sale of investments in associate . . . . . . . . . . . . . . . . . . . . . . Adjusted EBITDA . . . . . . . . . . . . . . . . (7)

EBITDA margin and Adjusted EBITDA margin are non-IFRS financial measures and are calculated by dividing EBITDA or Adjusted EBITDA by revenue. See “Notice to Investors – Presentation of Financial and Statistical Information – Non-IFRS Financial Measures”. On July 1, 2010, Bangladesh amended the regulations for Value Added Tax (“VAT”) resulting in the exclusion of VAT from revenue. The 2010 revenue per square meter for Bangladesh would have been US$2,762 and BDT192,600, if this amendment to the VAT regulations had been in place from January 1, 2010.

(8)

Operational Data As at March 31, 2012 909 2,435 200 82,422 708,040 206.9 2013 922 2,558 211 86,414 679,895 218.5

As at December 31, 2010 Number of retail stores . . . . . . . . . . . . . Independent dealers (1) . . . . . . . . . . . . . . Direct selling depots. . . . . . . . . . . . . . . . Total store area (square meters) . . . . . . Number of customer accounts . . . . . . . . Installment accounts receivable (Gross) (US$ million) . . . . . . . . . . . . . . . . . . . . .
Note: (1) Independent dealers in Sri Lanka, Bangladesh, Pakistan, India and Thailand.

2011 850 2,211 187 78,711 683,018 176.1

812 1,797 183 76,200 612,590 141.8

37

RISK FACTORS
You should consider carefully the risks described below, together with all other information contained in this offering document, before deciding whether to invest in our Shares. The risks described below are not the only ones we face. There may be additional risks not described below or not presently known to us or that we currently deem immaterial that turn out to be material. Our business, financial condition, results of operations and prospects could be materially and adversely affected by any of these risks. The market price of our Shares could decline due to any of these risks, and you may lose part or all of your investment. This offering document also contains forward-looking statements that involve risks and uncertainties. Our actual results of operations could differ materially from those anticipated in these forward-looking statements due to a variety of factors, including the risks described below and those discussed in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Significant Factors Affecting Our Results of Operations” and elsewhere in this offering document. See “Forward-Looking Statements”. Risks Relating to our Business Adverse conditions in the general economy and the global financial markets could adversely affect our business, financial condition or results of operations. As the HCD retail industry is a consumer-dependent industry, any economic slowdown experienced in any of our countries of operations may adversely affect our operating revenues and profitability. A general slowdown in the economies of the countries in which we operate or an uncertain economic outlook may adversely affect consumer confidence and spending levels, which may affect our business, financial condition or results of operations. The stress experienced by global markets that began in the second half of 2007 continued and substantially increased through the second half of 2008. Similar pressures continued during 2009, 2010 and 2011; these pressures may continue in the future. Concerns over inflation, geopolitical disputes, the availability and cost of credit, the credit crisis in Europe, the economic slowdown of China, the volatile political climate in North Africa and the Middle East, and unstable markets in some of the countries in which we operate have led to a general decline in lending activity between financial institutions and in commercial lending markets, while increasing volatility of the global economy in the near term. Further, certain of the countries in which we operate are dependent on exports to other countries within South Asia and to other major markets worldwide. Although economic conditions are different in each country, developments in one country can have adverse effects on the business and operations of companies operating in other countries, including Sri Lanka, Bangladesh, Pakistan, India and Thailand. See “ Management’s Discussion and Analysis of Financial Condition and Results of Operations – Significant Factors Affecting Our Results of Operations – Macroeconomic conditions in our countries of operation ”. The economies of the countries in which we operate may also be affected by trade sanctions or withdrawal of trade incentives effected by other major economies. These factors, combined with volatile oil prices, fluctuations in the prices of other commodities, reduced demand for exports from our countries of operations or declining business and consumer confidence and increased unemployment, may adversely affect our business, financial condition or results of operations. Although global economic conditions, including economic conditions in South Asia, have improved significantly, and in response to such developments, legislators and financial regulators in the United States and other jurisdictions, including those in which we operate, have implemented a number of policy measures designed to add stability to the financial markets, it is not yet clear that the recovery will be sustained. The overall impact of these and other legislative and regulatory efforts on the global financial markets is uncertain, and they may not have the intended stabilizing 38

effects. Any slowdown in these economies could adversely affect our customers and contractual counterparties. Consequently, consumer sentiment and spending may remain cautious, and this may have an adverse effect on our business, financial condition or results of operations. We operate in a highly regulated industry and the regulatory environment in which we operate is subject to change. We are subject to varying degrees of government regulation pursuant to numerous laws and regulations in the various countries in which we operate, namely Sri Lanka, Bangladesh, Pakistan, India and Thailand. These regulations are subject to change and new laws and regulations may be enacted. As the legal systems of the countries in which we operate continue to develop, we expect that inconsistencies and uncertainties in laws and regulations will be addressed as new laws are interpreted and refined and older laws are repealed or updated. It is difficult to predict when these countries’ legal systems will obtain the level of certainty and predictability of other more developed legal jurisdictions as laws, regulations and policies in emerging markets tend to evolve and change more frequently compared with mature markets. Policy changes and interpretations of applicable laws can produce unexpected consequences which may have an adverse effect on our business, financial condition or results of operations. Similarly, our consumer finance and financial services operations are subject to changes in regulation and government policies. In Sri Lanka, Singer Finance (Lanka) PLC is regulated by the Central Bank of Sri Lanka under the Finance Business Act, No. 42 of 2011 and the Finance Leasing Act, No. 36 of 2000, as amended. The laws and regulations governing the non-banking sector could change in the future and any such changes may adversely affect our credit operations and financial performance by requiring a restructuring of our activities, increasing costs or otherwise. For example, the Monetary Board of the Central Bank of Sri Lanka has recently imposed a maximum rate of interest that can be paid by finance companies on their deposits. As no maximum rate is specified for banks, finance companies such as Singer Finance (Lanka) PLC face direct competition from banks that are able to provide comparable interest rates to their borrowers, in the course of providing more attractive deposit rates to their depositors. The deposit-taking abilities of finance companies such as Singer Finance (Lanka) PLC may be adversely impacted as the funding capabilities of finance companies have been constrained. Furthermore, the Central Bank has very recently imposed a cap of 3.0% per annum on the penal interest chargeable by finance companies on overdue arrears. This too would seriously and adversely impact the funding capabilities of finance companies. We currently carry out the manufacturing or assembly of products in Sri Lanka, Bangladesh, Pakistan and India when and where there are local efficiencies or tax or duty incentives. As such, our business is subject to fluctuations in the import and excise duties on finished products and their component parts in the countries in which we operate. A change in these import or excise duties could have an adverse effect on our business, financial condition or results of operations. We cannot assure you that there will be no change in the laws and regulations applying to these manufacturing and assembly operations, which could reduce these efficiencies or incentives and in turn cause a disruption or cessation of these operations in one or more locations. Further, all major tax laws and regulations in Sri Lanka, Bangladesh, Pakistan, India and Thailand (for example, VAT, corporate income tax, personal income tax and royalty fees) have undergone significant changes. For example, there was a change in the VAT regulations in Sri Lanka on January 1, 2013, which imposed VAT on retail sales of products manufactured within Sri Lanka in respect of businesses having a turnover in excess of LKR 500 million per quarter and changes in the VAT regulations in Bangladesh introduced a 15% VAT computed on the retail selling price as opposed to the assessed value at point of importation with effect from July 2010. These tax laws may continue to be supplemented and clarified as issues arise over interpretation or

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implementation. Any change in our tax status or the taxation legislation or different interpretations of tax laws and policies in countries where we operate could increase the tax obligations imposed on us and adversely affect our business, results of operations or financial condition. If we fail to manage regulatory risks, we could be subject to investigations, enforcement actions, lawsuits or other proceedings or increased regulatory supervision. We may also be required to undertake remedial measures or pay fines or damages which may adversely affect our business, financial condition or results of operations. We operate in the HCD retail and consumer finance markets in our countries of operation, which are highly competitive. We operate in a competitive HCD retail and consumer finance landscape and face competition in Sri Lanka, Bangladesh, Pakistan, India and Thailand from household appliance, consumer electronics, IT product, furniture and sewing machine retailers, as well as consumer credit providers. In the HCD retail market, we face competition from retailers that range from large local chain operators to small independent dealers. Our continued success depends, in part, on our ability to maintain price competitiveness relative to our competitors, introduce new products to meet customers’ preferences, deliver high-quality products to our customers, maintain our established brand reputation and provide after-sales customer service. Should any of our current or new competitors have access to greater financial resources or to a wider customer base or range of products, or be able to offer more competitive pricing or a superior customer experience, our market share, business, results of operations and financial condition may be adversely affected. In the consumer finance market, our competitors include local HCD retailers, local and international banks and other financial institutions that are seeking to expand their consumer lending businesses. Competition in the consumer finance business may increase significantly as a result of the introduction of new banking and other financial products, such as credit cards, micro-finance loans and personal loans. Should any of our current or new competitors provide more affordable consumer finance options or a wider array of financial services to customers, our market share, financial condition or results of operations may be adversely affected. See “ Business – Competition ” and “ Industry Overview ”. We are subject to risks due to fluctuations in exchange rates, which may increase costs and negatively impact our financial results and there are foreign exchange controls in some countries in which we operate. Our business, financial position and results of operations are affected by fluctuations in foreign exchange rates. “See “ Exchange Rates and Exchange Controls – Exchange Controls ”. Generally, a strong U.S. dollar has a negative influence on our results of operations and financial position as measured in U.S. dollars. Local currency denominated financial results in each of our countries of operations, namely the Sri Lankan rupee, Bangladeshi taka, Pakistani rupee, Indian rupee and Thai baht, are translated into U.S. dollars by applying the weighted average market exchange rate during each financial reporting period. Local currency denominated assets and liabilities are translated into U.S. dollars by applying the market exchange rate at the end of each financial reporting period. Accordingly, the financial results as reported in the combined statement of income, and the assets and liabilities as reported in the combined statement of financial position, are subject to foreign exchange rate fluctuations. In addition, while we receive payments for our products and services in the respective local currencies, we purchase the majority of our products and raw materials from international third-party suppliers in U.S. dollars. When the prices of these products and raw materials increase due to unfavorable exchange rate movements, we may seek to recover the increased cost by increasing product prices. Competitive conditions may impact how much we can increase prices. 40

If we are unable to pass on future price increases due to unfavorable exchange rate movements to our customers, our business, financial position or results of operations may be materially adversely affected. The direct adverse impact of the global financial crisis on Sri Lanka, Bangladesh, Pakistan, India and Thailand was felt in the form of slower growth of capital inflows and declines in exports, leading to pressures on the balance of payments and depreciation of local currencies compared with the U.S. dollar. More recently, there has been a material deterioration of the India Rupee against the U.S. dollar. The Thai Baht, Pakistan Rupee and Sri Lanka Rupee have also declined in value against the U.S. dollar (see “ Management’s Discussion and Analysis of Financial Condition and Results of Operations − Trend Information ”). In addition, any increased intervention by any of these countries’ central banks in the foreign exchange markets to control the volatility of the exchange rate may result in a decline in the country’s foreign exchange reserves and reduced liquidity and higher interest rates in their economies. Further, increased volatility in capital flows may also complicate monetary policy, leading to volatility in inflation and interest rates in these countries, which could adversely impact our business. If we experience increased local currency costs as a result of exchange rate fluctuations and we are unable to increase our prices to a level sufficient to compensate for such increased costs, our gross margins will decline, which would materially adversely affect our business, financial condition or results of operations. For further detail on the currency fluctuations impacting our results of operations, see “ Management’s Discussion and Analysis of Financial Condition and Results of Operations – Significant Factors Affecting Our Results of Operations – Foreign exchange rates ”. Further, there are foreign exchange controls in some of the countries in which we operate. See “ Exchange Rates and Exchange Controls – Exchange Controls ”. For example, the Sri Lankan rupee is not a freely exchangeable currency and although Sri Lanka has liberalized its exchange control regime, restrictions still exist, particularly for capital account transactions. Due to these restrictions, there is no assurance that our subsidiaries in Sri Lanka will be able to convert Sri Lankan rupees into foreign currencies and remit foreign currency payments out of Sri Lanka. For example, as the current liberalized regime was not in force at the time Singer (Sri Lanka) B.V. made its investment in our companies in Sri Lanka, specific approval of the Exchange Control Department of the Central Bank of Sri Lanka may still be required whenever the proceeds from its investments in Sri Lanka are repatriated out of Sri Lanka. Exchange control restrictions may affect our ability to repatriate the proceeds from our investment from our Sri Lankan subsidiaries and operations, as well as our subsidiaries and operations in other countries, which could have a material adverse effect on our business, financial position or results of operations. We are exposed to variations in interest rates. Our working capital and consumer finance requirements are financed in large part by interestbearing bank borrowings. We realize income from the margin, or “spread”, between interestbearing assets, such as hire purchase and finance lease facilities, and interest paid on interest-bearing liabilities, such as bank borrowings. Our business is subject to fluctuations in market interest rates as a result of timing mismatches in the repricing of assets and liabilities. These interest rate fluctuations are neither predictable nor controllable and may have an adverse impact on our business, financial condition or results of operations. In a rising interest rate environment, we may not be able to pass along higher interest costs to our current customers as the hire purchase and finance lease facilities are usually provided by us at fixed interest rates. If these increased costs are passed on to new customers, higher rates may make hire purchase and finance lease facilities less attractive to potential customers and result in a reduction in customer volume and operating revenues. Further, in a decreasing interest rate environment, potential competitors may find it easier to enter the markets in which we operate. As a result, fluctuations in interest rates could have an adverse effect on our margins and volumes and in turn result in an adverse effect on our business, financial condition or results of operations.

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Termination of the Singer License Agreement and/or the Singer Distribution Agreement would have a material adverse effect on our Group. Singer Asia Limited (“ Singer Asia ”) has an exclusive perpetual license agreement (the “ Singer License Agreement ”) with The Singer Company Limited S.ar.l., which is the owner of the SINGER ® trademark (the “ Trademark ”). The Singer Company Limited S.ar.l. is a wholly-owned indirect subsidiary of SVP Holdings Ltd. (“ SVP Holdings ”), the ultimate owner of the Trademark. Both The Singer Company Limited S.ar.l. and SVP Holdings are third parties and not related to Singer Asia. Under the Singer License Agreement, Singer Asia has an exclusive, regional license to use the Trademark in the Singer Asia company name and in its subsidiary company names, on its stores and depots, in connection with its sales and promotional activities, and on the products it manufactures or assembles or provides or which it sources from third parties (with certain exceptions for sewing-related products and ironing presses). See “ Business – Branding and Intellectual Property – Singer License Agreement ”. Under the Singer License Agreement, SVP is tasked with performing certain administrative tasks, primarily registering and/or renewing the Trademark in each jurisdiction where we operate, and for each product category for which we are using the Trademark in that jurisdiction. If SVP fails to adequately perform certain administrative functions relating to the maintenance of the Trademark, or if SVP were to face financial difficulties and seek bankruptcy protection, we could, over time, experience difficulty in continuing to use the Trademark, particularly for new products or in new markets. In extreme circumstances, we may lose our rights under the Singer License Agreement or be forced to pay a higher royalty, which may materially adversely affect our business, financial condition or results of operations. Singer Asia has an exclusive, perpetual distribution agreement (the “ Singer Distribution Agreement ”) with Singer Sourcing Ltd., a wholly-owned indirect subsidiary of SVP Holdings Ltd., for the distribution of SINGER ® brand sewing products in certain Asia Pacific countries (namely, Sri Lanka, Bangladesh, Pakistan, India and Thailand − these are countries where our Group currently have operations in). Both Singer Sourcing Ltd., and SVP Holdings are third parties and not related to Singer Asia. See “ Business – Branding and Intellectual Property – Singer Distribution Agreement ”. When entering new markets, we may find that we are not able to obtain the right to distribute SINGER ® brand sewing machines in these markets because an existing or prospective SINGER ® brand sewing distributor appointed by SVP already has the right to do so. Because of the risks enumerated above, our use of the Trademark for sewing machines may also be limited and the value of the Trademark to us may be eroded, which may materially adversely affect our business, financial condition or results of operations. The sales of SINGER ா appliances and electronics, SINGER ா and Merritt brand sewing machines and SINGER HOMES ா furniture account for 80%, 76.7% and 80.5% of the total sales of our Group for the years ended December 31, 2010, 2011 and 2012 respectively. The Singer License Agreement and the Singer Distribution Agreement may be terminated in the event of a material breach by any party if such breach is not cured within 90 days from the date of notice of material breach. These agreements may also be terminated in the following circumstances: if Singer Asia becomes insolvent; if Singer Asia becomes party to any bankruptcy, insolvency, liquidation or receivership proceedings; if Singer Asia assigns its assets for the benefit of creditors or is unable to meet its debts; if Singer Asia is nationalized by the government; if a competitor of SVP Holdings (that is, a competitor who manufactures or whose principal business is the sourcing or distribution of consumer, artisan and industrial sewing machines and all related sewing products and accessories) acquires a direct or indirect controlling interest in Singer Asia; or if a law or regulation restricts Singer Asia’s right to make payments as provided for in the Singer License Agreement and the agreement cannot be modified to the satisfaction of both parties. The termination of the Singer License Agreement and/or the Singer Distribution Agreement would have a material adverse effect on the business, operations, revenue and financial performance of our Group.

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We are subject to the credit risks of our customers. Our consumer finance business accounted for 10.9%, 10.7%, 11.9% and 12.7% of our total revenue in the years ended December 31, 2010, 2011 and 2012, and the three months ended March 31, 2013, respectively. Our range of credit and non-credit offerings varies by country, with the broadest spectrum of products being offered in Sri Lanka, which accounted for 48.9% and 46.8% of our Group’s total consumer finance revenue for the year ended December 31, 2012, and the three months ended March 31, 2013, respectively. Our key credit-related offerings are hire purchase, leasing of goods and group sales credit facilities (offered by partnering with various organizations to provide easy payment terms to their employees). Credit risk from our credit portfolios may arise from events and circumstances beyond our control or events which are difficult to anticipate, such as exposure to fraudulent activities, an economic downturn or deterioration in the financial condition of our customers. We cannot assure you that failures or deficiencies in our credit scoring system and processes will not occur, which may lead to an increase in our bad debt. In the years ended December 31, 2010, 2011 and 2012, and the three months ended March 31, 2013, the impairment charges for accounts receivable amounted to US$3.1 million, US$4.8 million, US$3.8 million and US$0.6 million, respectively, which impairment charges represented 2.5%, 3.1%, 2.1% and 0.3% of total receivables, respectively. Currently, we maintain a provisioning policy for impairment losses on our hire purchase and leasing facilities to customers based on the aging and balance of the principal outstanding, but we cannot assure you that this policy will prove to be adequate over time to cover credit losses in these portfolios or that the risk of default by our customers will not increase in the future due to unanticipated adverse changes in the Sri Lankan, Bangladeshi, Pakistani, Indian or Thai economies, or other economies in which we operate, or if other events may materially adversely affect specific customers, industries or markets. Under such circumstances, we may need to make additional allowances or write-offs, which may materially adversely affect our business, financial condition or results of operations. Our business and operations may be affected by extreme environmental conditions. Our business and operations may be adversely affected by severe weather conditions, such as floods, earthquakes, typhoons and other extreme climatic conditions, which may cause disruptions to our operations as well as loss or damage to our inventories, machinery, retail stores and warehouses. For example, because Bangladesh is situated on the Ganges Delta, it is prone to severe flooding during the monsoon season from June to September. In addition, months of severe flooding in northern and central Thailand, including Bangkok, in 2011, resulted in over 800 deaths in Thailand. As a result of the floods in Thailand, Singer Thailand’s credit performance was temporarily affected. While the paying percentage of customers in June 2011 immediately before the flood was 92.1%, during the flood between July to December 2011 the paying percentage dropped to 89.6%. However, after the flood, the paying percentage improved and has remained above 93.0% since March 2012. Pakistan, Sri Lanka and India have also suffered natural disasters such as earthquakes, tsunamis, floods and droughts, leading to widespread damage to infrastructure, fatalities and the spreading of disease. Natural disasters in these regions also historically strain aging or inadequate roads, bridges and other infrastructure, making recovery more time-consuming and difficult. Accordingly, these events may cause a disruption or cessation in our operations or those of our suppliers, increase our expenditure in the replacement or repair of damaged property and directly and adversely impact our customers, who may be unable to purchase our products and services or pay their monthly installments, which may materially adversely affect our business, financial condition or results of operations. In addition, the insurance coverage we maintain for these risks may not be adequate to compensate us for all damage and economic losses from natural or man-made catastrophes.

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We may not be able to maintain our current level of financing, or procure adequate additional financing. As at March 31, 2013, we had total borrowings of US$140.8 million, consisting of short-term liabilities of US$100.5 million and long-term liabilities of US$40.3 million. We cannot assure you that we will be able to renew any of our facilities on similar terms or at all, or that we will not be in breach of the covenants in our various facilities in future. In addition, under certain of our facilities, in the event that we trigger certain amortization events, the lender may have the right to stop further drawdowns under the facilities. See “ Management’s Discussion and Analysis of Financial Condition and Results of Operations – Borrowings ”. Our business is dependent on financing and may be materially adversely affected if we are unable to secure financing for our retail, credit, manufacturing and assembly operations. Further, in order to expand our retail and consumer finance operations, we may need to obtain additional financing. If we are unable to procure adequate additional financing on economically acceptable terms or at all, we may be unable to expand our operations and our business and financial results may be materially adversely affected. In addition, certain of our existing loans contain covenants which limit our ability to borrow money, pledge our assets and pay dividends if we do not meet certain financial ratios. We may not be able to implement our business strategy successfully or manage our growth and operations effectively. We believe our future growth and earnings largely depend on the successful implementation of our business strategy, which in turn depends on a number of external and internal factors. External factors include business, financial and other factors beyond our control, including: • • • changes in customer preferences and access to suitable products; domestic and international economic conditions; and government or other legal, regulatory or policy changes.

Company-specific factors affecting our ability to implement our business strategy include our ability to: • • provide products and services based on changing customer preferences; increase retail store floor space and to do so by procuring suitable locations in a timely manner and at appropriate costs; expand our wholesale and direct selling distribution networks; and maintain current, and enter into new, relationships with suppliers.

• •

In the event that we are unable to execute our business strategies or expansion plans, our business, financial condition or results of operations could be materially adversely affected. In addition, even if we successfully implement our business strategy, this may not translate into successful results of operations. Furthermore, we may decide to alter or discontinue aspects of our business strategy and may adopt alternative or additional strategies in response to our operating environment or competitive situation or factors or events beyond our control. We cannot assure you that we will be successful in implementing any of our business strategies or managing our operations, which will in turn affect our ability to maximize the full potential of our assets including stores, direct selling depots, and manufacturing and assembly facilities.

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Furthermore, the success and continued growth of our business are dependent on our ability to establish and maintain an effective and versatile marketing and branding strategy, which can identify and adapt quickly to changes in customer needs, behavior and preferences, in order to maintain and increase our customer base and to capture a bigger market share and increase our revenue. We incurred advertising and promotional expenses of US$10.7 million, US$15.9 million, US$15.8 million and US$4.4 million in the years ended December 31, 2010, 2011 and 2012 and the three months ended March 31, 2013, respectively, in order to attract our target customers. We cannot assure you that we will be able to continue to interpret customer preferences and demands accurately or structure our marketing and branding strategy accordingly. If we are unable to accurately assess or if we misjudge our customers’ needs and changes in consumer behavior and preferences, or attract negative publicity, our marketing and branding strategy, including advertising and promotional efforts, may be ineffective or may be jeopardized. This may result in a diminution in our brand reputation or value, and in turn result in loss of sales. In such an event, our business, results of operations and financial condition may be materially adversely affected. Our house brands may be used by unrelated third parties, which we do not have control over, in jurisdictions in which we do not operate. We rely on our house brands: SINGER ®, Sisil and Unic. We have an exclusive license in the Asia-Pacific territory (excluding Japan and Korea) to use the Singer trademark in the Singer Asia company name, and have also registered the Sisil trademark in Sri Lanka, Bangladesh and Pakistan, and the Unic trademark in Sri Lanka. Further, we have sub-licensed the SINGER ® brand to third-party licensees in Malaysia and for certain products in Australia. See “ Business – Distribution Network – Sub-Licensing Agreements ”. Maintaining the reputation of, and value associated with, these house brands is important to the success of our business. Our house brands may be used by unrelated third parties, which we do not have control over, in jurisdictions in which we do not operate. Any adverse impact on the SINGER ® brand and other house brands in these jurisdictions resulting from actions of these unrelated third parties may have an adverse impact on the perception and value of our brand in Sri Lanka, Bangladesh, Pakistan, India and Thailand. In the event that the adverse impact is significant, our business, financial condition or results of operations may be materially adversely affected. A disruption in our Singer Information System and other computer systems could adversely affect our operations. Our business activities rely to a significant degree on the efficient and uninterrupted operation of our various computer and communications systems and, in particular, on our Singer Information System, a tailored software system that, among other things, provides us with real-time business information including sales, inventory levels and data relating to our consumer finance operations. All of our stores (except those in India) are linked through the Singer Information System that facilitates the flow of information among the stores and to our management. We maintain backup systems for our Singer Information System as well as other computer systems at each of our countries of operations. The Singer Information System and our other computer systems, software and networks may be vulnerable to unauthorized access, computer viruses or other malicious programs and other events. In addition, any significant breakdown of plant or equipment, or other significant disruption to the operations of these facilities could affect our ability to manage our information technology systems, which in turn could materially adversely affect our business. We cannot assure you that we will be able to maintain and upgrade our Singer Information System and related computer systems in a manner that will avoid interruptions or disruptions of such systems. A failure or inability to maintain and upgrade our information technology systems may have a material adverse effect on our business, financial condition or results of operations.

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We are dependent on key management personnel and on our ability to recruit suitable and qualified employees; certain of our employees belong to labor unions. Our success depends in part upon the capabilities and efforts of our management team and on our ability to hire and retain key management personnel, as well as other suitable employees. Our ability to continue to attract, retain and motivate key personnel will have an impact on our operations. The competition for hiring key management personnel and other employees is intense, and the loss of the services of one or more of these individuals without timely and adequate replacements, or the inability to attract new qualified personnel at a reasonable cost, would have an adverse effect on our financial performance and operations. In addition, we may lose business to any organizations that members of our key management may join after leaving us. We have entered into service agreements with certain of our key management personnel, but we cannot assure you that we will be able to continue engaging their services in the future. Further, as we expand our operations, we will need to recruit suitable additional personnel, and we cannot guarantee that we will be able to do so in a timely manner or at all. If we are unable to retain or recruit suitable employees, our business, financial condition or results of operations may be materially adversely affected. As at December 31, 2012 and March 31, 2013, approximately 34.2% and 34.4%, respectively, of our store employees in Sri Lanka and Bangladesh were directly employed by our store managers in those countries. As a result, we have limited control over the terms and conditions of their employment contracts and over whether or not these employees will choose to remain as store staff. The loss of these employees could have a materially adverse effect on us. In addition, many of our employees in Sri Lanka are members of labor unions. From time to time, we enter into negotiations and collective agreements with these unions with respect to rates of pay, hours of work and other conditions of employment. We cannot assure you that a disagreement with a union, which may affect our business materially adversely, will not occur in the future. We may not be able to maintain our relationships with our suppliers. We rely on suppliers for completely-knocked down, semi-knocked down and completely built-up 1 products for our house-branded and third-party branded merchandise. We currently have relationships with several leading global and local manufacturers, and with some of these we enjoy exclusive distribution arrangements in certain of the countries in which we operate. For a further discussion regarding our relationships with our suppliers, see “ Business – Suppliers ” and “ Management’s Discussion and Analysis of Financial Condition and Results of Operations – Significant Factors Affecting Our Results of Operations – Ability to establish and maintain relationships with product suppliers ”. We cannot assure you that we will be able to maintain these relationships over the long term. As a result, we may not be able to leverage off our relationships to maintain the existing terms in our supplier agreements, including exclusive distribution arrangements. If we are unable to maintain our supplier relationships, our business and profitability may be materially adversely affected. Moreover, we depend on our suppliers for the range, quality and pricing of products we are able to offer. In particular, products may not be available in the future at all or in amounts sufficient to satisfy customer demand. In addition, certain suppliers may carry distinctive or unique products that we may not be able to easily substitute with other products from alternative suppliers. If we are unable to secure products, or if suppliers are unwilling to supply us with their products, we may need to reduce the range of products and brands which we offer our customers. In such an event, our business, results of operations or financial condition may be materially adversely affected.

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The terms “completely-knocked down”, “semi-knocked down” and “completely built-up” refer to the degree to which a product is assembled before it is exported or imported. A completely-knocked down product is a fully disassembled item that must be assembled by the end user or reseller, while a semi-knocked down product is exported or imported as a partially assembled item. A completely built-up product is exported or imported as a complete product and does not require further assembly.

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Operations at our manufacturing, warehouse or distribution facilities are subject to disruption. We own and operate manufacturing and assembly facilities in Sri Lanka, Bangladesh, Pakistan and India. In addition, we own controlling stakes in two manufacturing companies, Regnis (Lanka) PLC and Singer Industries (Ceylon) PLC, which are listed on the Colombo Stock Exchange in Sri Lanka. Our facilities are subject to operational risks, including mechanical and IT system failures, work stoppages, increases in transportation costs, natural disasters, fire, extreme or unseasonable weather conditions and disruption to supplies of raw materials. Any interruption of activity in our manufacturing or assembly facilities due to these or other events could result in disruption of our retail activities, cancelation of orders or refusal to accept deliveries by our independent dealers or consumers, and a reduction in sales, any of which could have an adverse effect on our business, financial condition or results of operations. We are subject to the risks of changes in consumer preferences, shopping and spending trends affecting the purchase of our products. Demand for the products that we manufacture, assemble, sell and/or distribute is significantly dependent on consumer preferences and shopping and spending trends, which are influenced by external factors including, among others, the state of the economy, consumers’ income levels and demographic profiles in our markets. The products we sell must appeal to customers whose preferences cannot be predicted with certainty and must be provided to them through appropriate distribution channels, including the growing online retail market. Consequently, we depend in part upon the continuing favorable market response to the efforts of our purchasing and marketing team as well as the expertise of our suppliers to anticipate trends that will appeal to our customer base. Further, the home appliances, consumer electronics, IT products, furniture and sewing machines industries are characterized by changes to and enhancement of existing products and introduction of new products. If we are unable to source and offer new or enhanced products in a timely manner in response to changing market conditions or consumer requirements, or if new products which we manufacture and/or sell do not achieve market acceptance, our business may be materially adversely affected. Since the consumer electronics and IT products industries are characterized by rapid technological changes and rapid product obsolescence, the value of our unsold inventory may decline quickly. In such event, we may have to sell this inventory at either a lower value or a loss, or have to write off such inventory completely, and our business, results of operations or financial condition may be materially adversely affected. In the three months ended March 31, 2013, our inventory impairment charge was US$0.8 million. We may not be able to renew our leases for current stores or direct selling depots or procure suitable locations for new stores or additional retail floor space. Our distribution network and growth strategy depend on our ability to secure appropriate locations for our stores and direct selling depots. Certain of the properties in which our stores or direct selling depots are located are leased from third parties. The stability of our business operations and expansion of existing retail floor space at our stores is dependent on the continuity of these lease agreements. We cannot assure you that the current lease agreements in respect of our stores or direct selling depots will not be terminated by the respective landlords, or that we will be able to continue to operate our stores or direct selling depots at their current locations on commercially favorable terms or at all. If the lease agreements are terminated or we are unable to renew these tenancy agreements upon expiry and we are unable to find alternative suitable premises to house our stores, our performance may be materially adversely affected. Please refer to “ Appendix C – List of Material Properties and Intellectual Property Rights of our Group ” for details of our material property interests in Sri Lanka, Bangladesh, Pakistan, India and Thailand.

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In addition, we believe our continued growth is dependent on our ability to open new stores and direct selling depots and operate them on a profitable basis. The ability to open new stores and direct selling depots will depend on the availability of suitable sites and the ability to negotiate attractive lease terms. We cannot assure you that we will be able to open new stores or direct selling depots on a timely basis or that we will be able to identify and procure suitable locations for these new stores and direct selling depots at favorable lease terms. We also cannot assure you that the opening of new stores and direct selling depots will meet our intended objectives and that the new stores and direct selling depots will not materially adversely affect the sales of our other existing stores. We intend to continue to increase the retail floor space at a number of our existing store locations. In respect of these existing stores, there can be no assurance that we will be able to procure additional retail or new space at these existing locations at a suitable cost or at all. In the event that we are unable to set up new stores or increase gross retail floor space, as the case may be, our business, financial condition or results of operations may be materially adversely affected. We may be unable to control our wholesale distribution channel or our direct selling business satisfactorily. Our wholesale network consisted of 2,558 independent dealers, comprising 700 dealers in Sri Lanka, 310 dealers in Bangladesh, 231 dealers in Pakistan, 864 dealers in India and 453 dealers in Thailand, as at March 31, 2013. In addition, our direct selling business consisted of 2,724 canvassers in Thailand, as at March 31, 2013. In 2012 and for the three months ended March 31, 2013, we generated approximately 20.9% and 21.8%, respectively, of our sales of products through our wholesale distribution channel and 18.1% and 24.6%, respectively, of our sales of products from canvassers. We rely on our ability to control our wholesale distribution channel and canvassers to ensure that our products are sold in environments and in a manner consistent with our policies. In particular, it is important to properly manage and control the trade credit that is offered to the wholesale distribution channel as well as the price that products are sold to the wholesaler dealers to avoid undue competition with the retail channel for the same products. In addition, the orderly operation of our receipt and distribution of inventory requires the effective management of our distribution centers and an adherence to our logistics guidelines. Actions by our independent dealers or canvassers that vary from our policies or the forms of our terms and conditions, such as offering our products at unacceptable discounts, could materially adversely affect our business, financial condition or results of operations. We are exposed to the risk of litigation, including product liability claims and adverse publicity in respect of defective goods. Our customers may bring claims against us for faulty, defective or dangerous products, as well as under other causes of action. Please see “ Business – Legal Proceedings ” for a description of the material ongoing litigation and claims against us. These litigation actions and claims may be costly and time-consuming, and could result in liabilities and reputational harm. We cannot accurately determine the full extent of any claims and liabilities (financial or otherwise) of our ongoing litigation and claims. In particular, our business involves an inherent risk of product liability, product recall, adverse publicity and exposure to public liability claims. We cannot assure you that we will be successful in obtaining indemnity payments from our suppliers for any third party liability we incur from selling their products or that any indemnity payment will fully cover all of our costs associated with the original liability. If we were found responsible for damage caused by defective goods manufactured by us and/or products sold in our stores, our reputation may be materially adversely affected. This could lead to erosion of consumer confidence in our brands and a subsequent reduction in sales. In addition, we may need to incur significant legal, settlement and other costs in defending actions against us, or if claims against us are successful, and this could materially adversely affect our business, financial condition or results of operations.

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Our retail business is susceptible to seasonal fluctuations. Our retail business is susceptible to seasonal fluctuations. Although these fluctuations historically have not been significant, we generally record increased sales around religious, cultural and country-specific holidays such as the Sri Lankan New Year in April, the Eid al-Fitr festivities following Ramadan in Bangladesh and Pakistan during the ninth month of the Islamic calendar and Hindu and Buddhist holidays in India and Thailand, respectively. During these peak seasons, we typically run sales promotions and we incur additional expenses in advance of these periods to acquire additional inventory and carry out marketing and advertising activities. If we are unable to sell our products or offer promotions which are attractive to customers, we may experience a decrease in sales revenue. In addition, if sales during these peak selling periods are significantly lower than we expect, we may be unable to adjust our expenses in a timely manner, thereby materially adversely affecting our business, financial condition or results of operations. Our insurance coverage may not be sufficient. We maintain different insurance policies in the different locations in which we operate, covering damages or loss to our properties, machinery and inventories, but in the event that damage or loss exceeds the insurance coverage we procured, or is not covered by those insurance policies, we may be exposed to financial losses. Furthermore, our insurance policies may not be as comprehensive as those in other jurisdictions, such as countries in Europe or North America, and may not offer coverage in certain circumstances, such as floods or business interruption. Risks Relating to our Countries of Operation Sri Lanka, Bangladesh, Pakistan, India and Thailand are emerging economies and are susceptible to political and governmental risks. Investors should be aware that Sri Lanka, Bangladesh, Pakistan, India and Thailand may be subject to greater risk than more developed markets, including in some cases significant political, governmental, economic and legal risks. Investors should also note that circumstances in these countries may be subject to rapid change and the information set out in this offering document may become outdated relatively quickly. Further, some of the countries in the South Asia and Southeast Asia regions (which include Sri Lanka, Bangladesh, Pakistan, India and Thailand) have experienced or may experience political instability. The countries in which we operate may suffer from government or business corruption. Corrupt action against us or fraud, bribery and violations of laws and regulations by customers, suppliers or government authorities in the jurisdictions in which we operate could have an adverse effect on our business, financial condition or results of operations. In addition, although the countries in which we operate are not currently sanctioned, nor is there an indication that they will be sanctioned, by the U.S. Department of the Treasury’s Office of Foreign Assets Control (“ OFAC ”), it is possible that in the future, countries, or individuals and entities within the countries, in which we operate, may be subject to sanctions imposed by OFAC. Accounting and corporate disclosure standards in the countries in which we operate may vary from those in more developed countries. There may be less publicly-available information about companies operating in Sri Lanka, Bangladesh, Pakistan, India and Thailand than is regularly made available by public companies in other jurisdictions. Further, there may be significant differences in the level of regulation and monitoring of companies operating in these markets as compared to companies operating in more developed countries.

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Enforcing civil liabilities against us, the members of the Board and our officers, and enforcement of foreign arbitral awards in Sri Lanka, Bangladesh, Pakistan, India and Thailand, may be difficult. We conduct operations in Sri Lanka, Bangladesh, Pakistan, India and Thailand, and we have related companies registered in the Cayman Islands, the Netherlands, Hong Kong, Curaçao and the British Virgin Islands. Each of these countries has different securities laws and protections for investors. We have assets located in these countries and some of our directors, officers and managers are nationals or residents of certain of these countries. As a result, it may be difficult for investors to effect service of process upon us or our directors, supervisors and officers or to enforce against our Company or such directors, supervisors and officers, or judgments obtained in courts. Our limited operating experience in the retail and consumer finance markets in Myanmar, Cambodia and Laos and the susceptibility of their respective economic, political and regulatory conditions may adversely and materially impact our business strategies. Our future business strategies contemplate the development of our retail business in Myanmar, Cambodia and Laos. See “ Business – Strategies – Penetrate additional markets in the ASEAN region ”. In pursuing business opportunities in these ASEAN countries, we will enter into a new retail and consumer finance market that we have limited experience with and which may require entering into strategic partnerships with companies in Myanmar, Cambodia and Laos. As a result, we will experience significant exposure to the business concentration risks presented by the economies and regulatory environments of these three countries as well as the competition of companies already operating there. We cannot assure you that we will be successful in operating in these countries or that we will be able to adapt to any regulatory changes impacting the retail and consumer finance industry. Investors should also note that circumstances in these countries may be subject to rapid change and the information set out in this offering document may become outdated relatively quickly. Myanmar, Cambodia and Laos have experienced or may continue to experience political instability. Furthermore, we may decide to alter or discontinue aspects of our business strategy and may adopt alternative or additional strategies in response to our operating environment or competitive situation or factors or events beyond our control. Risks Relating to Sri Lanka If regional hostilities, terrorist attacks or social unrest in Sri Lanka resume, our business could be materially adversely affected. For nearly three decades, the Liberation Tigers of Tamil Eelam (the “ LTTE “), a terrorist group which sought to create an independent state consisting of the northern and the eastern provinces of Sri Lanka, engaged in a violent struggle against Sri Lankan government forces. Conflicts between government forces and the LTTE were primarily focused in the northern province of Sri Lanka after the military evicted the LTTE from its last stronghold in the east in 2007. In May 2009, after a series of successful operations, the military defeated the LTTE forces, thereby gaining full control of the northern province. On May 19, 2009, the President of Sri Lanka officially proclaimed an end to the civil conflict and the defeat of the LTTE. The pro-LTTE political party, Tamil National Alliance, which is the largest political group representing the Sri Lankan Tamil community, withdrew its demands for a separate state in favor of a federal system. While there have been no significant hostile activities since the declaration of the end of the conflict, we cannot assure you that tensions or hostilities will not resume. These hostilities and tensions could lead to political or economic instability in Sri Lanka and may materially adversely affect our business, financial position or results of operations. Further adverse developments surrounding the conflict, including the possibility of increased international pressure against the government of Sri Lanka due to perceived human rights abuses, 50

could have an adverse effect on the political and economic circumstances of the country and materially adversely affect businesses in Sri Lanka, including ours, which could have a material adverse effect on our business, financial condition or results of operations. Sri Lanka has been exposed to significant inflationary trends. Recently, consumer and wholesale prices in Sri Lanka have shown inflationary trends, particularly prices of food, metals and crude oil. If these inflationary trends continue or the inflation rate increases, there may be an adverse effect on the profitability of our companies in Sri Lanka. Higher inflation in Sri Lanka impacts the ability of customers to buy our products and pay their monthly installments, as a greater portion of their disposable income is spent on daily necessities. This can impact the growth and profitability of the Sri Lanka business. Although the economic growth in Sri Lanka, especially immediately following the end of the civil war in 2009, has mitigated the negative effects of inflation, there is no assurance that Sri Lanka will be able to continue its economic growth in the future at growth rates similar to the growth rates of recent years. In the event that inflation persists and Sri Lanka is unable to continue its current rates of growth, our business in Sri Lanka could be materially adversely affected. Risks Relating to Bangladesh There have been incidents of social and political unrest in Bangladesh from time to time which could have an adverse effect on our business, financial condition or results of operations. From time to time, there have been incidents of social and political unrest in Bangladesh. The opposition Bangladesh National Party (“ BNP ”) fueled political and economic uncertainty in 2010 with street protests against a constitutional amendment to reverse the practice of holding national elections under a neutral caretaker administration. In addition, in 2010, the government set up a tribunal to try nine Jamaat-e-Islami leaders and two members of the BNP accused of collaborating with Pakistani forces during Bangladesh’s war of independence from Pakistan in 1971. Most recently, in February and March 2013, after the tribunal issued a death sentence to an Islamist party leader, protests, general strikes and conflicts erupted resulting in deaths and injuries. Further, the collapse of a garment factory in April 2013 prompted protests and calls for reform. There are regular occurrences of violence, particularly in more remote areas of the country. The next presidential election is scheduled to take place in January 2014, when there may be further disruptions to the political environment of Bangladesh. Any incidents of unrest may materially adversely affect the political and economic stability of Bangladesh, which may in turn impact our business, financial condition or results of operations. Our operations in Bangladesh are subject to various government regulations and changes to such regulations. Our operations in Bangladesh are regulated by policies and other laws and regulations. Any amendments or developments to these laws or regulations could have a material adverse effect on our business, prospects, financial position or results of operations. For an overview of the regulations of Bangladesh which affect our operations, see “ Appendix A – Regulation – Relevant Laws and Regulations – Bangladesh ”. For example, Section 5 of the Competition Act 2012 contemplates establishment of a Bangladesh Competition Commission (“ Commission ”), which we understand will be formed shortly and will be responsible for the implementation of the competition laws to ensure fair competition in Bangladesh. Once the Commission is established, if any of Singer Bangladesh’s agreements, decisions or actions are considered anti-competitive, the Commission may enquire into the matter and, in certain circumstances, pass an order restraining Singer Bangladesh from engaging in the anti-competitive behavior. The Commission may also seek to impose monetary penalties on Singer Bangladesh.

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Risks Relating to Pakistan The high threat of terrorism and sectarian violence in Pakistan could have a material adverse effect on our business, financial position or results of operations. There is a high threat of terrorism and sectarian violence throughout Pakistan. International military campaigns, which commenced as a result of the terrorist attacks on the United States on September 11, 2001 (the “ September 11 Attacks ”), have had a major impact on Pakistan. Although sectarian violence had existed before the September 11 Attacks, after the September 11 Attacks, Pakistan also had to combat the threat from Al-Qaeda and Taliban militants who fled from Afghanistan and have been targeting high-profile Pakistani political figures. Terrorist attacks staged in Pakistan have caused significant numbers of casualties and damage to property, as well as materially adversely affected the Pakistani economy. Furthermore, militants have also targeted public areas, particularly if they are associated with representatives of the Pakistani authorities or activities that the militants claims to be un-Islamic, such as the bomb explosion in a market place in Hazara Town, outside Quetta, on February 16, 2013. There are frequent demonstrations and incidents of civil disorder in Pakistan. Work stoppages due to unrest, particularly in the city of Karachi, where the head office of Singer Pakistan is located, are not uncommon. Following the general elections in Pakistan held on May 11, 2013, protests and violence in relation to the results disrupted the public order. Further incidents of terrorism and sectarian violence in Pakistan could have an adverse effect on the political and economic stability of Pakistan as well as lower confidence in Pakistan’s economy, which in turn could materially adversely affect our business, financial condition or results of operations. Risks Relating to India Political instability, changes in economic liberalization and deregulation policies, social or civil unrest, terrorist attacks, wars or conflicts could harm business and economic conditions in India. The government of India has traditionally exercised and continues to exercise significant influence over many aspects of the Indian economy. The government of India has in recent years sought to implement economic reforms, but there can be no assurance that liberalization policies will continue in the future. Any significant change in such liberalization and deregulation policies could materially adversely affect business and economic conditions in India, generally, and our business, financial condition or results of operations. Further, India has experienced civil and social unrest, terrorist attacks such as the attacks in November 2008 and July 2011 in the city of Mumbai, the attack in May 2013 on a convoy of politicians in the State of Chhattisgarh and other acts of violence or war in some parts of the country. If these tensions occur in places where we operate or in other parts of the country, leading to overall political and economic instability, it could materially adversely affect our business, financial condition or results of operations. Any of these events could lower confidence in India’s economy and create a perception that investments in companies with Indian operations involve a high degree of risk, which could have an adverse effect on our business, financial condition or results of operations. Risks Relating to Thailand The impact of the recent political instability in Thailand is uncertain and continued violence, terrorist attacks and instability could materially adversely affect us. Our operations in Thailand may be influenced by the social and political situation there, which has been volatile and at times unstable. In December 2008, the Thai constitutional court issued a verdict to disband certain political parties which dissolved the existing coalition government and 52

removed the Prime Minister from office. The election of the leader of the Democrat-led coalition as new Prime Minister sparked a series of protests and demonstrations, including an attack by protestors in April 2009 which caused the cancelation of the Association of South East Asian Nations Summit in Pattaya and riots in Bangkok, evidencing resistance to the coalition government. This also resulted in severe traffic congestion and numerous injuries. In March 2010, protestors again held demonstrations calling for new elections. Over the course of two months, the demonstrations turned violent as a number of buildings, including a major shopping center and government buildings, were set on fire by demonstrators, and a number of people were killed or injured. The government declared a state of emergency in Bangkok and in 23 other provinces in central, northern and north-eastern Thailand. We cannot assure you that further protests or other violent demonstrations will not occur. Any such occurrence could have a material adverse effect on our business, financial condition or results of operations. Holders or acquirors of our Shares may be subject to reporting obligations and tender offer requirements in respect of STL under the securities laws of Thailand Under the securities laws in Thailand, if any person(s), whether related and/or acting in concert, become the owner of our Shares conferring more than 30% of the total voting rights, such person(s) may be required to file a report of their indirect acquisition of STL’s shares to the Office of the Securities and Exchange Commission, Thailand, and of their indirect disposition of such person(s) who are no longer the owner of our Shares or decrease their shareholding to 30% or less of the total voting rights. In addition, if any such person(s) become the owner of our Shares conferring 50% or more of the total voting rights, such person(s) may be required to make a tender offer for all shares of STL. The 30% reporting obligation applies so long as we, directly or indirectly and with related persons and/or parties acting in concert, hold 5% or more of the total voting rights in STL, and the 50% takeover obligation applies so long as we, directly or indirectly and with related persons and/or parties acting in concert, hold 25% or more of the total voting rights in STL, in each case at the time of such acquisition or disposition of our Shares. Risks relating to Our Offering and Investment in Our Shares Sales or possible sales of a substantial number of Shares by us, our Controlling Shareholders following the Offering could materially adversely affect the market price of our Shares. Following the Offering, we will have [ ● ] issued Shares, of which [ ● ] and [ ● ] Shares, or [ ● ]% and [ ● ]% of our outstanding Shares, will be beneficially owned by ReHo Limited and UCL Asia Holdings VII Limited, respectively (assuming the Over-allotment Option is not exercised). Our Shares will be traded on the Main Board of the SGX-ST. For six months after the Listing Date, we and certain of our shareholders will be restricted from selling Shares. For a description of these restrictions under the lock-up agreements we and certain of our shareholders will enter into, see “ Plan of Distribution ”. Any future sale or an increased availability of Shares may negatively impact our Share price. The sale of a significant number of Shares in the public market after the Offering, including by our shareholders, or the issuance of further new Shares by us, or the perception that these sales or issuances may occur, could materially affect the market price of our Shares. These factors could also affect our ability to sell additional equity securities at a time and at a price favorable to us. Except as otherwise described in the section entitled “ Plan of Distribution – No Sales of Similar Securities and Lock-up ” in this offering document, there will be no restriction on the ability of the substantial shareholders to sell their Shares either on the SGX-ST or otherwise.

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We are a Cayman Islands incorporated company and the rights and protection accorded to our Shareholders may not be the same as those of other jurisdictions. Our Company was incorporated in the Cayman Islands as an exempted company and is subject to the Cayman Islands’ Companies Law. We will also have to comply with the Listing Manual upon our admission to the Main Board of the SGX-ST. The Singapore Companies Act may provide shareholders of Singapore incorporated companies certain rights and protections of which there may be no corresponding rights or protections under the Cayman Islands’ Companies Law. As such, if you invest in our Shares, you may not be accorded the same level of shareholder rights and protection that a shareholder of a Singapore incorporated company would be accorded under the Singapore Companies Act. The rights of our shareholders and the responsibilities of our management and the Board of Directors under Cayman law may be different from those applicable to a company incorporated in another jurisdiction, including Singapore and the United States. Our corporate affairs are governed by our Memorandum of Association and Articles of Association, the Cayman Islands’ Companies Law and the common law of the Cayman Islands. The laws of the Cayman Islands relating to the protection of the interests of minority shareholders are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived, in part, from comparatively limited judicial precedent in the Cayman Islands as well as English common law, which has persuasive, but not binding, authority on a court in the Cayman Islands. The laws of the Cayman Islands relating to the protection of the interests of minority shareholders may differ in some respects from those established under statutes and under judicial precedents in Singapore or other jurisdictions. For example, in the absence of provisions in the articles of association of the company, there is no mechanism for minority shareholders to convene a general meeting of the company. Our public shareholders may have more difficulty in protecting their interests in connection with actions taken by our management, members of our Board of Directors or our principal shareholders than they would as shareholders of a company incorporated in another jurisdiction. See “ Appendix E – Summary of Certain Provisions of the Cayman Islands’ Companies Law ” and “ Summary of Certain Provisions of Our Articles of Association ” in Appendix E. There has been no prior market for our Shares. Prior to the Offering, there has been no public market for our Shares, and an active public market for our Shares may not develop or be sustained after the Offering. Although we have applied for our Shares to be listed on the Main Board of the SGX-ST, we cannot assure you that an active public market for our Shares will develop. In addition, there is no guarantee of the continued listing of our Shares. The Offering Price of our Shares may not be indicative of prices that will prevail in the trading market. You may not be able to resell our Shares at the Offering Price or at a price that is attractive to you. The trading prices of our Shares could be subject to fluctuations in response to variations in our results of operations, changes in general economic conditions, changes in accounting principles or other developments affecting us, our customers or our competitors, changes in financial estimates by securities analysts, the operating and stock price performance of other companies and other events or factors, many of which are beyond our control. Volatility in the price of our Shares may be caused by factors outside of our control or may be unrelated or disproportionate to our results of operations.

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Our Share price will fluctuate following the Offering. The market price of our Shares will fluctuate as a result of, among others, the following factors, some of which are beyond our control: • • • • quarterly variations in our results of operations; results of operations that vary from the expectations of securities analysts and investors; results of operations that vary from those of our competitors; changes in expectations as to our future financial performance, including financial estimates by research analysts and investors; a change in research analysts’ recommendations; announcements by us or our competitors of significant acquisitions, strategic alliances, joint ventures or capital commitments; announcements by third parties or governmental entities of significant claims or proceedings against us; new laws and governmental regulations applicable to our industry; additions or departures of key personnel; changes in exchange rates; changes in the price of our supplied products; fluctuations in stock market prices and volume; and general economic and stock market conditions.

• •

• • • • • •

A negative variance in any of the factors listed above could materially adversely affect the price of our Shares. The interests of our Controlling Shareholders and their associates may differ from our own. Immediately after the Offering, the Vendors and their associates will beneficially own in the aggregate approximately [ ● ]% of our Shares (assuming the Over-allotment Option is not exercised). The Vendors and their associates could influence the outcome of any corporate transactions or other matters submitted to the shareholders for approval, including mergers, consolidations and the sale of all or substantially all of our assets, the election of directors and other significant corporate actions. These persons may also have veto power with respect to any shareholder action or approval requiring a majority vote except where they are required by the rules of the Listing Manual to abstain from voting. Such concentration of ownership may delay, prevent or deter a change in control of our Group which might have benefitted our Group’s shareholders. We cannot assure you that the Vendors or their associates will act solely in our interest, or that any differences of interest will be resolved in our favor.

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We may not be able to pay dividends or realize dividends from our subsidiaries. Dividend payments are not guaranteed and our Board may decide, at its absolute discretion, at any time and for any reason, not to pay dividends or to change our dividend policy. If we are unable to pay dividends in accordance with our dividend policy, or do not pay dividends at levels anticipated by investors, the market price of our Shares may be negatively affected and the value of any investment in our Shares may be reduced. Any payment of dividends may materially adversely affect our ability to fund unexpected capital expenditures as well as our ability to make interest and principal repayments on our debt and vendor financing if cash flow from operations is insufficient. As a result, we may be required to incur additional borrowings or raise new capital by issuing equity securities, which we may not be able to do on favorable terms or at all. Furthermore, we are subject to covenants which may restrict our ability to pay dividends. We receive dividends from our subsidiaries, and such dividends are a source of our income. Consequently, a factor in our ability to pay dividends on the Shares is the amount of dividends and other distributions that we receive from our subsidiaries. The ability of our subsidiaries to pay dividends or make other distributions to us in the future and the amount of such dividends or distributions will depend upon their operating results, earnings, capital requirements, general financial condition, loan covenants, distribution policies and applicable legal requirements. In addition, changes in accounting standards may also affect the ability of our subsidiaries, and consequently, our ability to declare and pay dividends. Furthermore, as we are a shareholder of our subsidiaries, our claims against our subsidiaries will generally rank lower than those of all other creditors and claimants of our subsidiaries. In the event of a subsidiary’s liquidation, there may not be sufficient assets after paying creditors and claimants for us to recoup our investment and this may have a material and adverse effect on our business, results of operations and financial position. For a description of our dividend policy, please see “ Dividends – Dividend Policy ”. We are the beneficial owner of 74.99% of Singer Bangladesh. Pursuant to a permission letter by the Ministry of Industries in Bangladesh dated February 27, 1979, 20% of the total equity of Singer Bangladesh Limited is not eligible for remittance in foreign exchange either as dividend or capital. Therefore, if a dividend is declared in respect of these shares or if we were to dispose of any or all of these shares, the dividend payable or the proceeds from the sale of the shares would not be eligible for remittance from Bangladesh. However, we may use the proceeds to make other investments within Bangladesh. There may be a delay or failure in the trading of our Shares. The occurrence of certain events, including the following, may cause a delay in or the termination of our listing: • • the Authority issues a Stop Order in respect of our Shares in Singapore; the identified investors in the Offering fail to subscribe for the portion of our Shares allocated to them; or the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager exercise their rights pursuant to the Underwriting Agreement to discharge themselves from their obligations thereunder.

In the event of a termination of our listing, subject to compliance with the Cayman Islands’ Companies Law, you will not receive any Shares and, under Singapore law, we will be liable to return in full all monies paid in respect of any application for our Shares. Where the Authority 56

issues a Stop Order and (i) in the case where our Shares have not been issued and/or transferred to the applicants, the applications for our Shares pursuant to the Offering shall be deemed to have been withdrawn and canceled and we will have to pay to the applicants all monies the applicants have paid on account of their applications for our Shares; or (ii) in the case where our Shares have been issued and/or transferred to the applicants, the issue and/or sale of our Shares shall be deemed void and we will have to pay to the applicants all monies paid by them for our Shares. Our intended use of the proceeds of the Offering may not come to fruition. We intend to use the proceeds from the Offering for the expansion of our product and service offerings in existing and new markets, to open new distribution centers for our products and services and for related working capital in new markets in the ASEAN region, to open new channels in existing and new markets, and for other general working capital purposes. See “ Use of Proceeds ”. We do not currently have definite and specific commitments for the entire proceeds from the Offering, and our current intentions may not materialize and may be prohibited. As a result of the number and variability of factors that determine our use of the proceeds of the Offering, the actual uses may vary substantially from our current intentions. In such event, as we have broad discretion in the way we invest or spend the proceeds of the Offering, we cannot assure you that we will invest or spend the proceeds in ways with which you agree or which you believe will have the most beneficial effect on our profitability. You will suffer immediate dilution, and may experience further dilution, in the net asset value of our Shares. The Offering Price of our Shares is higher than our net asset value per Share. Dilution caused by the Offering represents the amount by which the Offering Price paid by the subscribers or purchasers of our Shares exceeds the net tangible asset value per Share after the Offering. Since the Offering Price per Share exceeds the net tangible assets per Share immediately after the Offering, there is an immediate and substantial dilution for investors who participate in the Offering. Investors who subscribe for or purchase our Shares in the Offering will therefore experience immediate dilution in net asset value per Share of our Shares they own. See “ Dilution ”. In addition, we may enter into other transactions that may be further dilutive to investors in the future. Overseas shareholders may not be able to participate in future rights offerings or certain other equity issues by us. Our Articles of Association provide that in relation to any rights issues of Shares, we may, in our absolute discretion, elect not to extend an offer of the Shares under a rights issue to those shareholders whose addresses, as registered with the CDP or recorded in our register of members, are outside Singapore. If we offer, or cause to be offered, to our shareholders rights to subscribe for additional Shares or any rights of any other nature, we will have discretion as to the procedure to be followed in making such rights available to our shareholders or in disposing of such rights for the benefit of such shareholders and making the net proceeds available to such shareholders. For example, we will not offer those rights to our shareholders who have a registered address in the United States unless a registration statement is in effect, if a registration statement under the U.S. Securities Act is required in order for us to offer such rights to holders and sell the securities represented by such rights, or the offering and sale of those rights or the underlying securities to such holders are exempt from registration under the U.S. Securities Act. We have no obligation to prepare or file any registration statement under the U.S. Securities Act. Accordingly, shareholders who have a registered address in the United States may be unable to participate in rights offerings and may experience a dilution in their holdings as a result.

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The rights or interests to the Shares to which such shareholders would have been entitled will be offered for sale and sold in such manner, at such price and on such other terms and conditions as we may determine, subject to such other terms and conditions as we may impose. The proceeds of any such sale, if successful, will be paid to the shareholders whose rights or interests have been so sold, provided that where such proceeds payable to the relevant shareholders are less than S$10.00 (or such other amount which we may from time to time determine in accordance with applicable laws), we are entitled to retain and apply such proceeds as we may in our absolute discretion decide. The shareholding of the relevant shareholders may be diluted as a result of such sale. Exchange rate fluctuations may adversely affect the foreign currency value of our Shares and any dividend distribution. Our Shares will be quoted in Singapore dollars on the SGX-ST. Dividends, if any, in respect of our Shares will be declared in U.S. dollars. Each Shareholder will receive his dividend in the Singapore dollars equivalent of the U.S. dollar dividend declared, unless he elects to receive the relevant dividend in U.S. dollars by submitting a “Dividend Election Notice” by the books closure date. For the portion of the dividends to be paid in Singapore dollars, the Company will make the necessary arrangements to convert the dividend in U.S. dollars into Singapore dollars at such exchange rate as the Company may determine, taking into consideration any premium or discount that may be relevant to the cost of exchange. Fluctuations in the exchange rate between the Singapore dollar and other currencies including the U.S. dollar will affect, among other things, the foreign currency value of the proceeds which a shareholder would receive upon sale in Singapore of our Shares and the foreign currency value of dividend distributions. See “ Exchange Rates and Exchange Controls − Exchange Rates ”. Our Shares are subject to certain restrictions and may be subject to compulsory transfer or purchase if these restrictions are violated. Our Shares have not been registered in the United States under the U.S. Securities Act, the U.S. Investment Company Act of 1940 or under any other applicable securities law, and are subject to restrictions on transfer contained in such laws. There are thus additional restrictions on the sale of Shares by shareholders who are located in the United States or who are U.S. persons (as defined in Regulation S). We have the right to cause the transfer or purchase for cancelation (subject to the rules of the SGX-ST) of Shares owned directly or indirectly by any person if, in the opinion of the Board, by virtue of such person holding our Shares, our Company would be required to comply with any registration or filing requirements in any jurisdiction with which our Company would not otherwise be required to comply, including any requirement to register as an “Investment Company” under the U.S. Investment Company Act. For further details, see “ Appendix E – Summary of Certain Provisions of the Cayman Islands’ Companies Law” and “ Summary of Certain Provisions of Our Articles of Association ” in Appendix E. Prospective purchasers should refer to the section headed “ Plan of Distribution – Selling Restrictions – United States ” and “ Transfer Restrictions ”. It may not be possible for investors to effect service of process, including certain judgments, on us, or the Directors and executive officers of our Company, in Singapore. We are incorporated in the Cayman Islands and our significant assets are located outside Singapore. As such, it may not be possible for investors to effect service of process, including judgments, on us, or the Directors and executive officers of our Company, within Singapore, or to enforce against us, or the Directors and executive officers of our Company, judgments obtained in Singapore courts within Singapore, including judgments predicated upon the provisions of the Securities and Futures Act.

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Singapore take-over laws contain provisions which may vary from those in other jurisdictions. We are subject to the Singapore Code on Take-Overs and Mergers (the “ Singapore Take-Over Code ”). The Singapore Take-Over Code contains certain provisions that may possibly delay, deter or prevent a future take-over or change in control of us. Under the Singapore Take-Over Code, except with the consent of the Securities Industry Council of Singapore, any person acquiring an interest, whether by a series of transactions over a period of time or not, either on his own or together with parties acting in concert with him, in 30.0% or more of our voting Shares is required to extend a take-over offer for our remaining voting Shares in accordance with the Singapore Take-Over Code. Except with the consent of the Securities Industry Council of Singapore, such a take-over offer is also required to be made if a person holding between 30.0% and 50.0% (both inclusive) of our voting Shares, either on his own or together with parties acting in concert with him, acquires additional voting Shares representing more than 1.0% of our voting Shares in any six-month period. While the Singapore Take-Over Code seeks to ensure an equality of treatment among shareholders, its provisions could substantially impede the ability of the shareholders to benefit from a change of control and, as a result, may materially adversely affect the market price of our Shares and the ability to realize any benefits from a potential change of control. Additionally, the ReHo Limited and UCL Asia Holdings VII Limited and their associates will beneficially own at least [ ● ]% and [ ● ]% of our outstanding Shares, respectively, immediately following completion of the Offering, assuming the Over-allotment Option is not exercised. This concentration of ownership and the arrangements we have entered into between ourselves and the Vendors and their associates as described in the section “ Interested Person Transactions and Conflicts of Interests – Potential Conflicts of Interests ” could delay, defer or prevent a change in control of our Company or a successful offer under the Singapore Take-Over Code by another person. In addition, in order not to trigger the mandatory offer requirement under the Singapore Take-Over Code which may otherwise occur in connection with the lending and return of Shares pursuant to the Share Lending Agreement (as defined herein) between the Vendors and the Stabilizing Manager, the Share Lending Agreement includes a right for the Vendors to recall such number of Shares which are equivalent to the Shares (if any) lent under the Share Lending Agreement by giving seven days’ prior written notice to the Stabilizing Manager. In the event this right of recall is exercised by the Vendors, it is possible that the Stabilizing Manager may not be able to stabilize the market price of the Shares. See “ Plan of Distribution – Over-allotment Option – Price Stabilization ” and “ Plan of Distribution – Share Lending Agreement ”.

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USE OF PROCEEDS
Based on the Offering Price of S$[ ● ] for each Offering Share, the net proceeds from the Offering (after deducting underwriting commissions and estimated offering expenses payable by us and the Vendors, assuming that the Over-allotment Option is not exercised) will be approximately S$[ ● ] million (US$[ ● ] million) of which the net proceeds from the Offering due to us will be approximately S$[ ● ] million (US$[ ● ] million). If the Over-allotment Option is exercised in full, the net proceeds from the Offering will be approximately S$[ ● ] million (US$[ ● ] million). We will not receive any of the net proceeds from the sale of the Vendor Shares by the Vendors, nor will we receive any proceeds from the exercise of the Over-allotment Option granted by the Vendors. We intend to use our share of the net proceeds from the Offering primarily for the following purposes: • approximately S$[ ● ] million (US$[ ● ]) for the expansion of our product and service offerings, including the expansion of our furniture offering and manufacturing capacity in Sri Lanka, Bangladesh and Pakistan, expansion of our IT offering in all markets and expansion of our financial services offering in Sri Lanka, Bangladesh and Pakistan (see “ Business – Strategies – Introduce new brands and products ”); approximately S$[ ● ] million (US$[ ● ]) to open new distribution centers for our products and services and for related working capital in new markets including Myanmar, Cambodia and Laos (see “ Business – Strategies – Penetrate additional markets in the ASEAN region ”); approximately S$[ ● ] million (US$[ ● ]) to open new channels of distribution in our existing and new markets, including transactional e-commerce sites (see “ Business – Strategies – Increase and enhance our online presence ”); and approximately S$[ ● ] million (US$[ ● ]) for general working capital purposes (see “ Business – Strategies ”).

Within each purpose above, the actual allocation between our Group’s geographic operations and/or various initiatives will depend on the response of the local markets to the initiatives. Based on our past projects and experience, the actual allocation may vary substantially between different countries, products and/or services due to the competitive environment, consumer needs and consumer tastes in each country. For each Singapore dollar of our net proceeds from the Offering, we intend to use the following amounts for the following purposes: • approximately [ ● ] Singapore cents for the expansion of our product and service offerings, including the expansion of our furniture offering and manufacturing capacity in Sri Lanka, Bangladesh and Pakistan, expansion of our IT offering in all markets and expansion of our financial services offering in Sri Lanka, Bangladesh and Pakistan (see “ Business – Strategies – Introduce new brands and products ”); approximately [ ● ] Singapore cents to open new distribution centers for our products and services and for related working capital in new markets including Myanmar, Cambodia and Laos (see “ Business – Strategies – Penetrate additional markets in the ASEAN region ”);

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approximately [ ● ] Singapore cents to open new channels of distribution in our existing and new markets, including transactional e-commerce sites (see “ Business – Strategies – Increase and enhance our online presence ”); and approximately [●] Singapore cents for general working capital purposes (see “Business – Strategies”).

The foregoing represents our best estimate of our allocation of proceeds from the Offering based on our current plans and estimates regarding our anticipated expenditures. Actual expenditures may vary from these estimates and we may find it necessary or advisable to re-allocate our net proceeds within the categories described above or use portions of our net proceeds for other purposes. In the event that we decide to re-allocate our net proceeds from the Offering for other purposes, we will publicly announce our intention to do so through a SGXNET announcement to be posted on the Internet at the SGX-ST website, http://www.sgx.com . Pending the use of our net proceeds in the manner described above, we may also use our net proceeds for working capital, place the funds in deposits with banks and financial institutions or use the funds to invest in short-term money market instruments, as our Directors may deem appropriate in their absolute discretion. We intend to make periodic announcements on the use of proceeds as and when material amounts of the Offering proceeds are disbursed, and provide a status report on the use of proceeds in our annual report. The announcement will state whether the use of the proceeds is in accordance with the stated use and the percentage allocation disclosed above. In the opinion of our Directors, no minimum amount must be raised by the Offering. In the event the Offering is canceled, such amounts proposed to be provided for the items above will be provided out of funds generated from our operations. Expenses We estimate that the expenses payable by us in connection with the Offering, and our application for listing, including the underwriting (but excluding discretionary incentive fees) and all other incidental expenses relating to the Offering (not including underwriting fees and other expenses payable by the Vendors), will be approximately S$[ ● ] million (US$[ ● ] million). The breakdown of these expenses is set out below: As a Percentage of the Gross Proceeds from the Offering

Estimated Expenses S$ million Underwriting fees . . . . . . . . . . . . . . . . Professional and accounting fees . . . Advertising and printing expenses . . . Other offering related expenses. . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . [●] [●] [●] [●] [●]

[●] [●] [●] [●] [●]

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We will pay the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager, as compensation for their services in connection with the Offering, underwriting fees amounting to [ ● ]% of the total gross proceeds from the sale of Issue Shares. Underwriting fees of S$[ ● ] for each Issue Share are payable by us. The Vendors will pay the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager, as compensation for their services in connection with the Offering, underwriting fees amounting to [ ● ]% of the total gross proceeds from the sale of the Vendor Shares and the sale of the Additional Shares (if the Over-allotment Option is exercised). We and the Vendors may, at our sole discretion, pay the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager an incentive fee of up to [ ● ]% of the gross proceeds from the offering of the Issue Shares, the Vendor Shares and the Additional Shares, respectively. The additional incentive fee, if it is to be paid to the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager, will amount to up to S$[ ● ] per Share. The aggregate expenses of the Offering (not including the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager’s underwriting fees) are estimated to be S$[ ● ] million to be paid by us (and not shared by the Vendors). See “ Plan of Distribution – The Offering ” for a description of the commissions payable in connection with the Offering.

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DIVIDENDS
Statements contained in this section that are not historical facts are forward-looking statements. Such statements are subject to certain risks and uncertainties which could cause actual results to differ materially from those which may be forecasted and projected. Under no circumstances should the inclusion of such information herein be regarded as a representation, warranty or prediction with respect to the accuracy of the underlying assumptions by us, the Vendors, the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager, or any other person. Prospective investors are cautioned not to place undue reliance on these forward-looking statements that speak only as at the date hereof. See “Notice to Investors – Forward-Looking Statements”. Past Dividends No dividends have been declared by Sewko to date. In the financial years ended December 31, 2010, 2011 and 2012, and in the financial period from January 1, 2013 to date, Singer Asia declared and distributed dividends of approximately US$5.5 million, US$15.7 million and US$11.5 million, and US$9.0 million, respectively. This amounted to dividends per share of Singer Asia equivalent to US$5.44, US$15.54 and US$11.39, and US$8.85, respectively. Dividend Policy We do not have a fixed dividend policy. All dividends we declare must be approved by an ordinary resolution of our shareholders at a general meeting, except that our Board of Directors may declare interim dividends without the approval of our shareholders. We are not permitted to pay dividends in excess of the amount recommended by our Board of Directors. We may pay all dividends out of our profits or out of our share premium account. We are a holding company and we depend, in part, upon the receipt of dividends and other distributions from our subsidiaries, associates and jointly controlled entities to pay dividends on the Shares. When making recommendations on the timing, amount and form of future dividends, if any, our Company’s Board of Directors will consider, among other things: • • • • • • our results of operations and cash flow; our expected financial performance and working capital needs; our future prospects; our capital expenditures and other investment plans; other investment and growth plans; and the general economic and business conditions and other factors deemed relevant by our Board of Directors and statutory restrictions on the payment of dividends.

We will declare dividends in U.S. dollars. Each Shareholder will receive his dividend in the Singapore dollars equivalent of the U.S. dollar dividend declared, unless he elects to receive the relevant dividend in U.S. dollars by submitting a “Dividend Election Notice” by the books closure date. For the portion of the dividends to be paid in Singapore dollars, the Company will make the necessary arrangements to convert the dividend in U.S. dollars into Singapore dollars at such exchange rate as the Company may determine, taking into consideration any premium or discount that may be relevant to the cost of exchange. The CDP or the Company shall not be liable for any loss arising from the conversion of dividends 63

payable to Shareholders from U.S. dollars into Singapore dollars. Save for approved depository agents (acting as nominees of their customers), each Shareholder may elect to receive his entire dividend in U.S. dollars and shall not be able to elect to receive dividends in a combination of Singapore dollars and U.S. dollars. The foregoing are statements of our present intentions which may be subject to modification (including the reduction or non-declaration of any dividends) in the sole and absolute discretion of our Board of Directors. The declaration of any future dividend will be subject to the decision of our Board of Directors. The form, frequency and amount of future dividends (if any) on our Shares will depend on our earnings, financial position, results of operations, contractual restrictions, provisions of applicable law and other factors which our Board of Directors may deem relevant.

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CAPITALIZATION AND INDEBTEDNESS
The table below sets out our capitalization and indebtedness based on the financial statements of our Group as at July 31, 2013 on an actual basis and as adjusted to reflect the issuance of the Offering Shares and the application of net proceeds due to us from the Offering in the manner described in “ Use of Proceeds ”. The information in this table should be read in conjunction with the “ Use of Proceeds ”, “Selected Financial Data ”, “ Management’s Discussion and Analysis of Financial Condition and Results of Operations ” and our combined historical financial statements and the notes thereto included in this offering document. As at July 31, 2013 Actual (1) As adjusted (2)

US$ million Cash and bank balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . Current portion of loans and borrowings . . . . . . . . . . . . . . . . Secured and guaranteed . . . . . . . . . . . . . . . . . . . . . . . . . . . . Unsecured and non-guaranteed . . . . . . . . . . . . . . . . . . . . . . . Non-current portion of loans and borrowings . . . . . . . . . . . . . Secured and guaranteed . . . . . . . . . . . . . . . . . . . . . . . . . . . . Unsecured and non-guaranteed . . . . . . . . . . . . . . . . . . . . . . . Total loans and borrowings . . . . . . . . . . . . . . . . . . . . . . . . . Share capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Share premium. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Non-controlling interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes: (1) (2) Total capitalization is total loans and borrowings and total equity. Capitalization, as adjusted, assumes net proceeds of US$[●] from this Offering.

18.1

[●] [●] [●] [●] [●] [●] [●] [●] [●] [●] [●] [●]

28.4 78.0

4.6 53.1 164.1 – 32.9 4.6 73.3 52.9 163.7 327.8

As at September 13, 2013, other than the increase in non-current unsecured and non-guaranteed borrowings from the issue of LKR1.25 billion (equivalent to US$9.5 million) of unsecured redeemable debentures by Singer Finance (Lanka) PLC, of which US$9.2 million was used to repay our current unsecured and non-guaranteed borrowings, there were no material variances in our total long-term debt and total equity as compared to the amounts as at July 31, 2013.

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DILUTION
New investors subscribing for and/or purchasing the Offering Shares at the Offering Price will experience an immediate dilution in net asset value per Share immediately after the completion of the Offering. Net asset value per Share is determined by subtracting our total liabilities and minority interests from our total assets, and dividing the difference by the number of Shares deemed to be outstanding on the date as of which the book value is determined. Our net asset value per Share as at March 31, 2013 was S$[ ● ] per Share. The Offering Price of S$[ ● ] per Offering Share exceeds the pro forma net asset value of S$[ ● ] per Share as at March 31, 2013, the issuance of the Issue Shares in the Offering by approximately [ ● ]%. Since the Offering Price per Share exceeds the net asset value per Share after the Offering, there is an immediate and substantial dilution to investors in the Offering. Such dilution is illustrated in the table below. Offering Price per Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net asset value per Share as at March 31, 2013 . . . . . . . . . . . . . . . . . . . . . . . Increase in net asset value per share after the Offering . . . . . . . . . . . . . . . . . Pro forma net asset value per Share as at March 31, 2013, as adjusted for the issuance of the Issue Shares in the Offering . . . . . . . . . . . . . . . . . . . . . . . Dilution in pro forma net asset value per Share to new investors . . . . . . . . . . . Percentage dilution in pro forma net asset value per Share to new investors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S$ [●] [●] [●] [●]

S$0.29 S$ S$ S$

[ ● ]%

The issue of new Shares pursuant to options which may be granted under the Sewko Employee Share Option Scheme (as described further in “ Appendix G – Rules of the Sewko Employee Share Option Scheme ”) would have a further dilutive effect on new investors in the Offering. The total number of new Shares that may be issued pursuant to options granted under the Sewko Employee Share Option Scheme may not exceed 5.0% of our total issued share capital (excluding treasury shares) on the day preceding the relevant date of the grant, provided that for each year from the date at which the Scheme is implemented, the number of Shares to be issued pursuant to options granted under the Scheme must not exceed 1.0% of the total issued share capital of our Company (excluding treasury shares) on the day immediately preceding the date of the relevant grant. The following table summarizes the total number of Shares acquired or to be acquired by our Directors or key management, substantial shareholders or persons connected to them during the period of three years prior to the date of lodgment of this offering document by the Authority, the total consideration paid by them and the average effective cash cost per Share to our shareholders and to our new public shareholders pursuant to the Offering. Total Consideration (US$) 3,965,726 61,880,940 47,064,377 [●] Effective Cash Cost per Share (US$) 0.20 0.27 0.27 [●]

Number of Shares Acquired Gavin John Walker . . . . . . . . . . . . . ReHo Limited . . . . . . . . . . . . . . . . . UCL Asia Holdings VII Limited . . . . New investors in the Offering. . . . . 20,000,000 227,200,000 172,800,000 [●]

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Save as disclosed above, there has been no acquisition of any of our existing Shares by our Directors or key management, substantial shareholders or persons connected to them and/or their associates, or any transaction entered into by them which grants them the right to acquire any of our existing Shares, during the periods of three years prior to the date of lodgment of this offering document by the Authority. For further information regarding the interest of our substantial shareholders, please see “ Share Capital and Shareholders – Ownership Structure ”.

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EXCHANGE RATES AND EXCHANGE CONTROLS
Exchange Rates The table below sets forth, for the periods indicated, certain information concerning the exchange rates between the Singapore dollar and the U.S. dollar, as quoted by Bloomberg L.P. and rounded to three decimal places. Closing Exchange Rates Singapore Dollar per U.S. Dollar Average Fiscal year (1): 2010 . . . . . . . . . . . . . . . . . . . . . . . . 2011 . . . . . . . . . . . . . . . . . . . . . . . . 2012 . . . . . . . . . . . . . . . . . . . . . . . . Three-month period ended March 31, 2013 . . . . . . . . . . . . . . . . Month
(2)

High

Low

Period End

1.359 1.254 1.245 1.239

1.424 1.320 1.297 1.251

1.282 1.201 1.216 1.221

1.283 1.297 1.222 1.240

: 1.228 1.239 1.246 1.238 1.249 1.260 1.268 1.273 1.272 1.238 1.242 1.251 1.242 1.271 1.276 1.282 1.284 1.281 1.221 1.235 1.240 1.232 1.227 1.244 1.259 1.257 1.266 1.238 1.239 1.240 1.232 1.264 1.268 1.271 1.275 1.269

January 2013 . . . . . . . . . . . . . . . . . February 2013 . . . . . . . . . . . . . . . . . March 2013 . . . . . . . . . . . . . . . . . . . April 2013 . . . . . . . . . . . . . . . . . . . . May 2013 . . . . . . . . . . . . . . . . . . . . June 2013 . . . . . . . . . . . . . . . . . . . . July 2013 . . . . . . . . . . . . . . . . . . . . August 2013 . . . . . . . . . . . . . . . . . . September 2013 (through September 13, 2013) . . . . . . . . . . .

Source: Bloomberg L.P. See “General and Statutory Information – Sources”. Bloomberg L.P. has not provided its consent, for purposes of Section 249 of the Securities and Futures Act, to the inclusion of the information extracted from its database, and is therefore not liable for such information under Sections 253 and 254 of the Securities and Futures Act. While we, the Vendors and the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager have taken reasonable actions to ensure that the information from Bloomberg L.P.’s database has been reproduced in its proper form and context, and that the information has been extracted accurately and fairly from such database, neither we, the Vendors and the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager nor any other party have conducted an independent review of the information contained in that database or verified the accuracy of the contents of the relevant information.
Notes: (1) (2) The average rates are calculated using the average of the closing exchange rates on the last day of each month of the period in question, excluding non-trading days. The average rates are calculated using the average of the closing exchange rates on each day of the period in question, excluding non-trading days.

The closing exchange rate on the Latest Practicable Date for the Singapore dollar to the U.S. dollar was U.S.$1.00=S$1.269.

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Exchange Controls The discussion below is not intended to constitute a complete analysis of all exchange control consequences relating to our operations or business in various jurisdictions. You should consult your own legal advisors concerning the exchange control consequences of your particular situation. This description is based on laws, regulations and interpretations now in effect and available as at the date of this offering document. The laws, regulations and interpretations, however, may change at any time and any change can be retroactive. These laws and regulations are also subject to various interpretations and the relevant authorities or the courts can later disagree with the explanations or conclusions set out below. Singapore Currently, no foreign exchange control restrictions are enforced in Singapore. Bangladesh A discussion on the relevant foreign exchange control laws is set out in “ Appendix A – Regulation – Relevant Laws and Regulations – Bangladesh ”. British Virgin Islands There is no exchange control legislation under British Virgin Islands law and accordingly there are no exchange control regulations imposed under British Virgin Islands law. Cayman Islands There is no exchange control legislation under Cayman Islands law and accordingly there are no exchange control regulations imposed under Cayman Islands law. Curaçao Foreign exchange in Curaçao is regulated by the Foreign Exchange Regulation Curaçao and Sint Maarten (2010). Generally all capital transactions are prohibited without a license from the Central Bank of Curaçao and Sint Maarten. Certain capital transactions do not require a license, for example: (a) investment in foreign securities (such as bonds) by resident companies of Curaçao not exceeding ANG 250,000 per year; and (b) purchase and sale of real estate. All current transactions can be done without the permission of the Central Bank except for distribution of profits and dividends. Hong Kong Currently, no foreign exchange control restrictions are enforced in Hong Kong. India A discussion on the relevant foreign exchange control laws is set out in “ Appendix A – Regulation – Relevant Laws and Regulations – India ”. Netherlands Currently, no foreign exchange control restrictions are enforced in the Netherlands. De Nederlandsche Bank N.V. (the “ DNB ”) may demand that Dutch residents (including corporations) provide the DNB with information regarding capital transactions which relate to foreign investments and/or information which relates to their position in respect of non-residents. 69

Pakistan A discussion on the relevant foreign exchange control laws is set out in “ Appendix A – Regulation – Relevant Laws and Regulations – Pakistan ”. Sri Lanka A discussion on the relevant foreign exchange control laws is set out in “ Appendix A – Regulation – Relevant Laws and Regulations – Sri Lanka ”. Thailand A discussion on the relevant foreign exchange control laws is set out in “ Appendix A – Regulation – Relevant Laws and Regulations –Thailand ”.

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SELECTED FINANCIAL DATA
You should read the following selected historical combined financial data for the periods and as at the dates indicated in conjunction with the section of this offering document entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our combined financial statements, the accompanying notes and the related auditors’ report included in this offering document. Our financial statements are reported in U.S. dollars and are prepared and presented in accordance with IFRS. IFRS reporting practices and accounting principles differ in certain respects from U.S. GAAP. For example, U.S. GAAP and IFRS apply different criteria in determining whether to consolidate an investee company. The selected combined financial data as at and for the years ended December 31, 2010, 2011 and 2012 have been derived from our audited historical combined financial statements included in this offering document and should be read together with those financial statements and the notes thereto. The selected combined financial data as at and for the three-month periods ended March 31, 2012 and 2013 have been derived from our unaudited condensed combined interim financial statements for the three-month periods ended March 31, 2012 and 2013 included in this offering document. We have prepared the unaudited condensed combined interim financial statements on the same basis as our audited annual combined financial statements. Our historical results for any prior or interim periods are not necessarily indicative of results to be expected for a full fiscal year or for any future period. Summary Combined Statement of Income Information Three months ended March 31, 2012 2013 110,825 (67,921) 42,904 775 (30,012) (805) 12,862 271 (4,867) (4,596) – 8,266 183 8,449 5,013 3,436 8,449 1.23 [●]

Year ended December 31, 2010 2011 2012

US$(’000) Revenue. . . . . . . . . . . . . . . . . . . . . . . . 326,304 406,741 435,891 104,400 Cost of sales . . . . . . . . . . . . . . . . . . . . (205,243) (252,440) (269,813) (64,759) Gross profit . . . . . . . . . . Other income . . . . . . . . . . Selling and administrative Other expenses . . . . . . . . ........ ........ expenses ........ . . . . . . . . 121,061 154,301 166,078 39,641 25,937 1,493 1,813 448 (86,317) (109,948) (112,180) (27,575) (2,641) (3,313) (3,439) (815) 58,040 796 (12,181) (11,385) 1,240 47,895 (12,342) 35,553 26,063 9,490 35,553 6.46 [●] 42,533 1,460 (12,595) (11,135) – 31,398 (9,749) 21,649 15,174 6,475 21,649 3.76 [●] 52,272 1,149 (17,995) (16,846) – 35,426 (8,925) 26,501 16,924 9,577 26,501 4.18 [●] 11,699 318 (3,543) (3,225) – 8,474 (2,529) 5,945 4,002 1,943 5,945 0.99 [●]

Results from operating activities . . . Finance income . . . . . . . . . . . . . . . . . . Finance costs. . . . . . . . . . . . . . . . . . . . Net finance costs . . . . . . . . . . . . . . . . Share of profit of equity accounted investees (net of income tax) . . . . . . . Profit before income tax . . . . . . . . . . Income tax (expense)/credit . . . . . . . . Profit for the year/period . . . . . . . . . . Profit attributable to: Owners of the Company . . . . . . . . . . . Non-controlling interests . . . . . . . . . . . Profit for the year/period . . . . . . . . . . Earnings per share (cents) . . . . . . . . . Earnings per share as adjusted for the Offering (cents) . . . . . . . . . . . . . . .

71

Summary Combined Statement of Financial Position Information As at December 31, 2010 ASSETS Non-current assets Property, plant and equipment . . . Intangible assets and goodwill . . . Trade and other receivables over one year . . . . . . . . . . . . . . . . . . . . Deferred tax assets . . . . . . . . . . . Other non-current assets . . . . . . . 2011 2012 US$(’000) As at March 31, 2013

. . . . .

54,306 4,039 28,934 4,195 8,243 99,717 54,946 96,147 43,125 9,236 203,454 303,171

52,289 4,018 41,782 4,235 7,548 109,872 71,880 112,261 22,250 11,430 217,821 327,693

60,495 4,464 53,098 3,497 8,969 130,523 87,294 125,478 18,073 12,050 242,895 373,418

62,110 4,449 55,928 5,448 9,915 137,850 93,622 132,824 23,433 14,136 264,015 401,865

Total non-current assets . . . . . . . Current assets Inventories . . . . . . . . . . . . . . Trade and other receivables. Cash and cash equivalents . Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total current assets . . . . . . . . . . . Total assets . . . . . . . . . . . . . . . . . . EQUITY AND LIABILITIES Equity Share capital . . . . . . . . . . . Share premium . . . . . . . . . . Reserves . . . . . . . . . . . . . . Retained earnings . . . . . . .

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

10 68,687 15,265 22,750 106,712 38,340 145,052 40,508 10,557 132 95 3,140 4,791 59,223 12,851 2,094 44,109 37,655 1,185 1,002 98,896 158,119 303,171

10 52,987 7,294 40,665 100,956 39,051 140,007 36,947 10,994 208 103 2,231 5,315 55,798 15,705 2,147 61,881 49,161 1,638 1,356 131,888 187,686 327,693

10 41,895 6,627 61,673 110,205 49,701 159,906 37,229 12,503 164 458 2,842 5,858 59,054 22,471 1,303 81,301 46,510 1,019 1,854 154,458 213,512 373,418

10 41,895 7,914 68,350 118,169 53,935 172,104 40,269 12,901 165 500 2,555 6,349 62,739 18,310 2,619 82,186 61,181 779 1,947 167,022 229,761 401,865

Equity attributable to owners of the Company . . . . . . . . . . . . . . . . . Non-controlling interest . . . . . . . . Total equity . . . . . . . . . . . . . . . . . . Non-current liabilities Loans and borrowings . . . . . . . . . Employee benefits . . . . . . . . . . . . Deferred income over one year . . Warranty provision over one year Deferred tax liabilities. . . . . . . . . . Other non-current liabilities . . . . . . . . . . .

Total non-current liabilities . . . . . Current liabilities Bank overdraft . . . . . . . . . Current tax liabilities. . . . . Loans and borrowings . . . Trade and other payables. Deferred income . . . . . . . . Warranty provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total current liabilities. . . . . . . . . . . Total liabilities . . . . . . . . . . . . . . . . Total equity and liabilities . . . . . .

72

Summary Combined Statement of Cash Flows Information Three months ended March 31, 2012 2013

Year ended December 31, 2010 2011 2012 US$(’000) Cash flows from operating activities Profit for the year . . . . . . . . . . . . Adjustments for: Depreciation . . . . . . . . . . . . . . . . Impairment loss on property, plant and equipment. . . . . . . . . . Amortization of intangible assets and goodwill . . . . . . . . . . Non-cash compensation . . . . . . . Share of profit of equity accounted investee . . . . . . . . . . Gain on sale of investments . . . Gain on sale of property, plant and equipment. . . . . . . . . . Net finance costs . . . . . . . . . . . . Tax expense/(credit) . . . . . . . . . . 3,637 12 – 91 (1,240) (24,496) (91) 11,385 12,342 37,193 Changes in: Inventories . . . . . . . . . . . . . . . . . Trade and other receivables . . . Other current and non-current assets . . . . . . . . . . . . . . . . . . . . . Trade and other payables . . . . . Provision and employee benefits. . . . . . . . . . . . . . . . . . . . Deferred income. . . . . . . . . . . . . Cash from/(used in) operating activities . . . . . . . . . . . . . . . . . . Interest paid . . . . . . . . . . . . . . . . Income tax paid . . . . . . . . . . . . . Net cash (used in)/from operating activities . . . . . . . . . (9,469) (14,763) (2,333) (1,667) (857) 162 (21,502) (34,585) (2,508) 15,022 437 529 (18,985) (31,884) (1,379) 2,320 1,509 (662) 3,995 24 – – – – (126) 11,135 9,749 46,426 3,480 – 453 – – – (146) 16,846 8,925 56,059 35,553 21,649 26,501

5,945

8,449

894 – – – – – (70) 3,225 2,529 12,523

1,081 – 21 – – – (87) 4,596 (183) 13,877

(11,728) (11,138) (1,671) 8,325 (1,217) (275)

(5,576) (8,607) (1,994) 13,182 398 (239)

8,266 (11,866) (6,624)

3,819 (10,905) (10,073)

6,978 (16,463) (14,596)

(5,181) (3,383) (1,893)

11,041 (4,884) (644)

(10,224)

(17,159)

(24,081)

(10,457)

5,513

73

Year ended December 31, 2010 2011 2012 US$(’000) Cash flows from investing activities Interest received . . . . . . . . . . . . Proceeds from sale of property, plant and equipment. . . . . . . . . . Proceeds from sale of investments . . . . . . . . . . . . . . . . Acquisition of property, plant and equipment . . . . . . . . . . . . . . Acquisition of intangible assets . Net cash from/(used in) investing activities . . . . . . . . . . Cash flows from financing activities Proceeds from borrowings . . . . . Proceeds from share options exercised . . . . . . . . . . . . . . . . . . Repayment of borrowings . . . . . Distribution to owners . . . . . . . . Distribution to non-controlling interests . . . . . . . . . . . . . . . . . . . Net cash (used in)/from financing activities . . . . . . . . . . Net increase/(decrease) in cash and cash equivalents . Cash and cash equivalents at January 1 . . . . . . . . . . . . . . . . . . Effect of exchange rate fluctuations on cash held . . . . . . Cash and cash equivalents at December 31/March 31 . . . . . . . 7,413 327 (10,934) (5,500) (379) 29,877 – (12,943) (15,700) (5,704) 62,779 423 (35,996) (11,515) (2,890) 796 583 32,504 (2,943) – 1,460 287 3,985 (5,060) – 1,149 381 5,246 (7,676) (1,021)

Three months ended March 31, 2012 2013

318 128 1,275 (1,258) –

271 711 1,845 (2,548) –

30,940

672

(1,921)

463

279

11,360 – (3,890) – (924)

4,928 – (1,711) – (923)

(9,073)

(4,470)

12,801

6,546

2,294

11,643

(20,957)

(13,201)

(3,448)

8,086

14,962 3,669

30,274 (2,772)

6,545 2,258

6,545 (2,634)

(4,398) 1,435

30,274

6,545

(4,398)

463

5,123

74

Other Financial Data Three months ended March 31, 2013 5.0% 6.2% 38.5% 27.2% 32.1% 19.8% 51.5% 38.7%

Year ended December 31, 2010 Net sales growth (%) . . . . . . . . . . . Revenue growth . . . . . . . . . . . . . . . Gross margin (%)
(1)

2011 25.0% 24.6% 38.9% 25.3% 28.7% 20.8% 56.4% 37.9%

2012 5.8% 7.2% 37.4% 27.6% 32.3% 20.0% 56.4% 38.1%

30.3% 27.2% 37.6% 25.5% 29.2% 21.2% 57.5% 37.1%

Sri Lanka . . . . . . . . . . . . . . . . . . Bangladesh . . . . . . . . . . . . . . . . . Pakistan . . . . . . . . . . . . . . . . . . . India . . . . . . . . . . . . . . . . . . . . . . Thailand . . . . . . . . . . . . . . . . . . . Group . . . . . . . . . . . . . . . . . . . . . Non-IFRS Measures Like-for-like sales growth (2)(3) Sri Lanka . . . . . . . . . . . . . . . . . . Bangladesh . . . . . . . . . . . . . . . . . Pakistan . . . . . . . . . . . . . . . . . . . Revenue growth at constant exchange rates (3)(4) . . . . . . . . . . . Revenue per square meter (US$) (3)(5)(8) . . . . . . . . . . . . . . . . . Sri Lanka . . . . . . . . . . . . . . . . . . Bangladesh . . . . . . . . . . . . . . . . . Pakistan . . . . . . . . . . . . . . . . . . . India . . . . . . . . . . . . . . . . . . . . . . Revenue per square meter (local currency) (’000) (3)(5)(8) Sri Lanka . . . . . . . . . . . . . . . . . . Bangladesh . . . . . . . . . . . . . . . . . Pakistan . . . . . . . . . . . . . . . . . . . India . . . . . . . . . . . . . . . . . . . . . . EBITDA (US$) (’000) EBITDA margin
(3)(7) (3)(6)

35.5% 9.4% 6.3% 24.6% 2,626 2,397 2,920 3,243 2,325

23.7% 12.4% 8.8% 24.3% 3,159 3,289 2,785 3,529 3,034

5.4% 25.8% 2.9% 18.8% 3,074 3,088 2,891 3,614 3,152

(4.9)% 5.0% (9.7)% 8.4% – – – – –

270.6 203.5 276.1 106.0 61,677 18.9% 37,181 11.4%

363.9 207.0 304.7 141.6 46,528 11.4% 46,528 11.4%

393.7 236.2 336.7 168.2 56,205 12.9% 56,205 12.9%

– – – – 13,964 12.6% 13,964 12.6%

........

............

Adjusted EBITDA (US$) (’000) (3)(6) . . . . . . . . . . . . . . . . . . Adjusted EBITDA margin
Notes: (1) (2)
(3)(7)

.....

Gross margin is calculated by dividing gross profit by revenue. “Like-for-like” sales growth, also known as “same store” or “comparable stores” sales growth, is a non-IFRS financial measure often used by retail companies to measure the performance of their existing retail stores. Like-for-like sales growth is calculated in local currency by selecting stores that have been in full and continuous operation during the current period and the period to be compared against (usually the same period in the prior year). Stores that are opened, closed or renovated during any of the periods being compared are excluded. We have included like-for-like sales to allow investors to determine the portion of revenue increase which has come from sales growth of existing stores and the portion which can be attributed to the opening of new stores.

75

(3) (4)

This financial measure is a supplemental measure of our performance and liquidity and is not required by, or presented in accordance with, IFRS, U.S. GAAP or any other generally accepted accounting principles. Revenue growth at constant exchange rates is a non-IFRS financial measure and is calculated by translating local currency revenues for the current reporting period into U.S. dollars using the same average foreign currency exchange rates for the conversion of revenues into U.S. dollars that we use to translate local currency revenues for the comparable reporting period of the prior year. We calculate the change, as a percentage, of the current period revenues using the prior period exchange rates versus the prior period revenues. Revenue per square meter is calculated by dividing revenue by the weighted average selling area (in square meters). The weighted average selling area is the average of our aggregate selling area at the end of each month during the financial year. EBITDA is a non-IFRS financial measure and represents results from operating activities before depreciation and amortization. Adjusted EBITDA is a non-IFRS financial measure and is calculated by adjusting EBITDA for a one-time gain on sale of investments in associate in 2010 of US$24.5 million following the disposal of our affiliate company in ILFS. Set forth below is a reconciliation of our profit before income tax to EBITDA and adjusted EBITDA: Year ended December 31, 2010 2011 2012 US$(’000) Profit before income tax . . . . . . . . . . . Add: Finance costs . . . . . . . . . . . . . . Add: Depreciation and amortization . . . Less: Finance income . . . . . . . . . . . . Less: Share of profit of equity accounted investee, net of income tax . . EBITDA . . . . . . . . . . . . . . . . . . . . . Less: Gain on sale of investments in associate . . . . . . . . . . . . . . . . . . . . Adjusted EBITDA . . . . . . . . . . . . . . 47,895 12,181 3,637 (796) (1,240) 61,677 31,398 12,595 3,995 (1,460) – 46,528 35,426 17,995 3,933 (1,149) – 56,205 8,266 4,867 1,102 (271) – 13,964 Three months ended March 31, 2013

(5)

(6)

(24,496) 37,181

– 46,528

– 56,205

– 13,964

(7) (8)

EBITDA margin and Adjusted EBITDA margin are non-IFRS financial measures and are calculated by dividing EBITDA or Adjusted EBITDA, respectively, by revenue. On July 1, 2010, Bangladesh amended the regulations for VAT resulting in the exclusion of VAT from revenue. The 2010 revenue per square meter for Bangladesh would have been US$2,762 and BDT192,600, if this amendment to the VAT regulations had been in place from January 1, 2010.

Operational Data As at December 31, 2010 Number of retail stores . . . . . . . . Independent dealers
(1)

As at March 31, 2012 909 2,435 200 82,422 2013 922 2,558 211 86,414 679,895 218.5

2011 850 2,211 187 78,711 683,018 176.1

812 1,797 183 76,200 612,590 141.8

.........

Direct selling depots. . . . . . . . . . . Total store area (square meters) . Number of customer accounts . . . Installment accounts receivable (Gross) (US$ million) . . . . . . . . . .
Note: (1)

708,040 206.9

Independent dealers in Sri Lanka, Bangladesh, Pakistan, India and Thailand.

76

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
In the following section we discuss our historical financial results for the years ended December 31, 2010, 2011 and 2012, and the three-month periods ended March 31, 2012 and 2013. You should read the following discussion together with our audited combined financial statements as at and for the years ended December 31, 2010, 2011 and 2012, and our unaudited condensed combined interim financial statements as at and for the three-month periods ended March 31, 2012 and 2013. This discussion and analysis contains forward-looking statements that reflect our current views with respect to future events and our financial performance. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of any number of factors, including those set forth under “Risk Factors” and “Notice to Investors – ForwardLooking Statements”. We have prepared our combined financial statements in accordance with IFRS, which may differ in certain significant respects from generally accepted accounting principles in other countries, including the United States. Overview We are the largest retailer of HCD products in Sri Lanka, Bangladesh and Pakistan1, and have 922 stores and 2,105 independent dealers across Sri Lanka, Bangladesh, Pakistan and India, as at March 31, 2013. In Thailand, we operate a direct selling business with 211 direct selling depots and 2,724 sales canvassers, as at March 31, 2013. Since the SINGER® brand was first established in 1851 with the creation of the Singer company, we have evolved into one of the most recognized HCD retail brand names in South Asia offering our customers a wide range of HCDs, including home appliances, consumer electronics, IT products, furniture and sewing machines, substantially all of which can be purchased through consumer credit which we provide. Our brand offering includes both house brands as well as widely recognized third-party brands including Apple, Beko, Dawlance, Godrej, Grundig, Haier, Hitachi, Huawei, Onida, Philips, Prestige, Samsung, Skyworth, TCL, Tefal, Videocon and Whirlpool, some of which are under exclusive distribution arrangements. We have operated in each of our markets for over 100 years. We are the leading provider of HCD consumer credit in Sri Lanka, Bangladesh and Pakistan 2, where consumer credit is often expensive and difficult to obtain. We offer a wide variety of credit products, including hire purchase, leasing facilities, and group sales (offered by partnering with organizations to provide easy payment terms to their employees) for the purchase of our products. As at March 31, 2013, we managed 679,895 active credit accounts, with total installment accounts receivable of US$218.5 million. In addition, we provide transaction-based financial services such as bill payments, inward remittances, mobile phone reloads and acceptance of public deposits as well as extended warranties and customer protection plans. In 2012, we processed on average nearly one million consumer finance and financial services transactions per month. We believe that through our long-term presence in the region, we have established a strong brand identity that our customers associate with trust, quality and consumer finance. Our ability to provide customers a complementary mix of products, services and brands, including consumer finance to purchase these products, through our extensive distribution network, and high-quality customer service, has enabled us to realize meaningful synergies and grow our Company successfully. During the period from 2010 to 2012, we have increased our retail store base by 97 stores to 909 stores, our independent dealer network by over 600 independent dealers and the

1 2

Source: The Nielsen Company. Source: The Nielsen Company.

77

number of direct selling depots by 17. Our revenue totaled US$326.3 million in 2010, US$406.7 million in 2011 and US$435.9 million in 2012, representing a CAGR of 15.6% from 2010 to 2012. Our Adjusted EBITDA totaled US$37.2 million in 2010, US$46.5 million in 2011 and US$56.2 million in 2012, representing a CAGR of 22.9% from 2010 to 2012. Our Adjusted Profit totaled US$13.3 million in 2010, US$21.6 million in 2011 and US$26.5 million in 2012. We believe that our core markets of Sri Lanka, Bangladesh, Pakistan, India and Thailand will continue to offer attractive opportunities for growth based on their strong economic and demographic prospects and relatively undeveloped and fragmented markets for HCDs and consumer credit. We intend to grow our business and increase profitability by expanding and enhancing our distribution platform, introducing new brands and products, expanding our consumer credit and financial services offerings, increasing our online presence and penetrating additional markets, such as the ASEAN countries of Myanmar, Cambodia and Laos. Significant Factors Affecting Our Results of Operations Macroeconomic conditions in our countries of operation Consumer purchasing patterns are generally influenced by consumers’ disposable income and confidence. Disposable income and confidence is affected by a number of factors, including general economic conditions, level of employment, rate of inflation, salaries and wage rates, and consumer perception of economic conditions and outlook. Our retail and consumer finance operations are therefore influenced by the state of the economies in our countries of operation, namely Sri Lanka, Bangladesh, Pakistan, India and Thailand. As these economies grow, living standards and purchasing power increase. In those circumstances, more consumers have sufficient disposable income to afford our products and existing customers are able to spend more on our products, both of which increase the size of our market and demand for our products. Conversely, slower economic growth, increases in unemployment rates, elevated debt and limited growth in disposable income may lead to a decline in consumer spending, reduced demand for our products and an increase in the delinquency rate and level of bad debts of our credit operations. Disruptions in the global, regional and local economies and financial markets reduce consumer income, liquidity, credit availability and confidence in the economy and result in reductions in consumer spending. Growth may also be hindered by domestic issues including political turbulence, fiscal policy, climate and environmental disasters and poor infrastructure. We believe that economic growth, favorable demographics and higher and growing disposable income among the population in Sri Lanka, Bangladesh, Pakistan, India and Thailand strongly underpin our future sales growth – notwithstanding any localized or temporary conditions which may slow our growth in one market or another when measured on a quarter-by-quarter (or even longer) basis. Our operations in Sri Lanka accounted for 45.7% and 44.3% of our combined revenues for the year ended December 31, 2012 and the three months ended March 31, 2013, respectively. Consequently, our financial condition and results of operations are impacted by conditions prevailing in Sri Lanka. With the end of the civil war in 2009, Sri Lanka’s economy experienced strong growth, with real GDP increasing by 7.8% in 2010, 8.3% in 2011 and 6.8% in 2012 1. During this time, the Sri Lankan government introduced several measures to liberalize and rationalize the post-war economy, including the reduction of import tariffs on vehicles and selected HCDs. These steps, in addition to an accommodative labor environment, a very significant increase in foreign direct investment and the expansion of infrastructure, fueled increases in private domestic consumption in 2011 and 2012. The economic investment and growth following the end of the civil war have thus had significant positive impacts on the Sri Lankan economy and we anticipate that these benefits will build and accrue in the future. Nonetheless, strong growth in a relatively small economy has created some negative pressures which likely reduced Sri Lanka’s rate of growth in

1

Source: The Nielsen Company.

78

2012 compared to 2010 and 2011. These include inflation, currency depreciation and the government’s decision to raise interest rates. We believe the impact of these measures will be temporary and corrective and in fact bode well for stable future growth. Our operations in Thailand accounted for 21.1% and 27.3% of our combined revenues for the year ended December 31, 2012 and the three months ended March 31, 2013, respectively, and thus we are also sensitive to macroeconomic conditions in Thailand. In recent years, Thailand’s economy has been particularly susceptible to global economic conditions, climate conditions (including devastating floods in 2011) and political turbulence. Accordingly, growth in the past three years has been inconsistent, with real GDP growing by 7.8% in 2010, 0.1% in 2011 and 5.6% in 2012 1. However, the country’s well-developed infrastructure and pro-investment policies have made it a particularly attractive destination for Asian manufacturers, with exports of high-technology and agricultural products driving growth. Further, in 2012, household consumption grew as a result of various ongoing government economic stimulus schemes as well as low unemployment rates which raised consumer confidence and spending. We are also sensitive to macroeconomic conditions in Bangladesh, which accounted for 18.9% and 13.9% of our combined revenues for the year ended December 31, 2012 and the three months ended March 31, 2013, respectively. Bangladesh has also experienced steady economic growth, with real GDP increasing by 6.4% in 2010, 6.5% in 2011 and 6.1% in 2012 2. Successive bumper crop harvests, strong manufacturing growth, recovery in construction and sustained growth in the services sector have helped improve and stabilize the economy. High inflation, caused in part by a significant rise in non-food prices, reached 11.6% in February 2012 but has, as at December 31, 2012, decreased to 7.9%, according to the Bangladesh Bureau of Statistics 3. High inflation has disproportionately affected lower-income families, but mitigating factors such as an increase in real wages of 3.1% in 2012 have ensured that there continues to be demand for consumer goods. High inflation results in consumers spending a greater portion of their earnings on daily essentials such as food and transport, which results in lower discretionary expenditure on items such as HCDs. Our operations in India accounted for 7.7% and 8.9% of our combined revenues for the year ended December 31, 2012 and the three months ended March 31, 2013, respectively, and thus, we are less sensitive to macroeconomic conditions in India. Although impeded by the global financial crisis in 2009, India, the tenth-largest economy in the world and the largest economy in South Asia, has seen strong growth in recent years with real GDP increasing by 10.1% in 2010, 6.8% in 2011 and 4.9% in 2012 4. In 2010, 2011 and 2012, annual household disposable income increased by 14.0%, 11.6% and 11.4%, respectively 5, which we believe has enabled more consumers to purchase our products consisting of sewing machines and small appliances.

1 2 3

Source: The Nielsen Company. Source: The Nielsen Company.
See “General and Statutory Information − Sources”. The Bangladesh Bureau of Statistics has not provided its consent, for purposes of Section 249 of the Securities and Futures Act, to the inclusion of the information extracted from its database, and is therefore not liable for such information under Sections 253 and 254 of the Securities and Futures Act. While we, the Vendors and the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager have taken reasonable actions to ensure that the information from the database of the Bangladesh Bureau of Statistics has been reproduced in its proper form and context, and that the information has been extracted accurately and fairly from such database, neither we, the Vendors and the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager nor any other party have conducted an independent review of the information contained in that database or verified the accuracy of the contents of the relevant information.

4 5

Source: The Nielsen Company. Source: The Nielsen Company.

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Our operations in Pakistan accounted for 6.2% and 5.2% of our combined revenues for the year ended December 31, 2012 and the three months ended March 31, 2013, respectively, and thus, like India, we are less sensitive to macroeconomic conditions in Pakistan. Real GDP growth in Pakistan, the second largest economy among the sub-Himalayan countries which constitute South Asia, remained broadly stable at a 3.1% in 2010, 3.0% in 2011 and 3.7% in 2012 1. Fast population growth, political instability, incidents of terrorist and related violence and low levels of foreign investment have meant that Pakistan remains one of the poorest and least developed countries in Asia. Our ability to drive sales growth in Pakistan in the future is affected by its ability to bolster growth to meet the needs of its rapidly growing population and to raise both domestic and foreign confidence in its economic stability. Foreign exchange rates Our results of operations are affected by fluctuations in foreign exchange rates. Local currency denominated financial results in each of our countries of operations, namely Sri Lankan rupee, Bangladeshi taka, Pakistani rupee, Indian rupee and Thai baht, are translated into U.S. dollars by applying the weighted average market exchange rate during each financial reporting period. Local currency denominated assets and liabilities are translated into U.S. dollars by applying the market exchange rate at the end of each financial reporting period. Accordingly, the financial results as reported in the combined statement of income, and the assets and liabilities as reported in the combined statement of financial position, are subject to foreign exchange rate fluctuations. In addition, while we receive payments for our products and services in the respective local currencies, we purchase certain products and raw materials from international third-party suppliers in U.S. dollars. When the prices of these products and raw materials increase due to unfavorable exchange rate movements, we may seek to recover the increased cost by increasing product prices. Our ability and timing in relation to the increase in prices will depend on whether competitors similarly raise prices and on the levels of inventory at the time of the currency devaluation; higher amounts of inventory allow us to hold the older prices for a longer period of time or to improve our margins by selling lower cost inventory at new higher prices. Inversely, if the prices of products and raw materials we purchase decrease due to favorable exchange rate movements, our cost of sales will decrease and our revenue and margins may increase. Interest rates The cost of funding and our net profit margins are directly impacted by changes in prevailing interest rates. The interest rate spread between our borrowings and the interest income we receive through our consumer finance products, and in particular, our ability to maintain an effective interest rate margin in times of volatility, contributes directly to our net profit margin. Because most of our indebtedness is subject to floating interest rates, an increase in interest rates may increase our cost of borrowing. Increased borrowing costs may negatively impact our profitability because the financial earnings derived from consumer credit agreements with our customers are at fixed rates. Conversely, if interest rates decline, our cost of borrowing may decline while the interest rates for our consumer finance products remain fixed. We do not hedge for interest rate risk.

1

Source: The Nielsen Company.

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The table below sets forth selected reference interest rates in Sri Lanka, Bangladesh, Pakistan and Thailand at the dates indicated. We did not have borrowings in India during this period. The interest rates on our borrowings are typically 0.5% in excess of the applicable reference interest rate in a particular jurisdiction as shown in the table. Interest rates As at December 31, Interest Rate Sri Lanka . . . . . Bangladesh . . . Pakistan . . . . . Thailand . . . . . Average Weighted Prime Lending Rate Weighted Average Interbank Lending Rate Karachi Interbank Offer Rate (3 month) Treasury Bills plus 1.5% 2010 10.2% 8.1% 13.5% 2.9% 2011 9.4% 11.2% 12.0% 4.4% 2012 13.3% 12.8% 9.3% 4.5% As at March 31, 2013 14.1% 7.5% 9.5% 4.2%

Ability to expand retail network and increase profitability Our retail network of 922 multi-format stores as at March 31, 2013 across Sri Lanka, Bangladesh, Pakistan and India contributed 61.0% to our total sales in 2012. Between December 31, 2005 and December 31, 2012, the number of our retail stores increased by 42.7% from 637 stores as at December 31, 2005 to 909 stores as at December 2012. In 2013 and 2014, we intend to open approximately 130 more stores and renovate or relocate approximately 220 stores. Many stores being renovated will be enlarged. Our retail network is key to maintaining our leading HCD retail market position and sustaining future growth as it helps to promote our SINGER ® brand, showcase our complete product range and improve our overall business performance. We seek to grow our same store sales, which we measure by sales and profit per square meter in existing stores, as well as successfully expand by opening new stores. However, if specific stores are underperforming, we may decide to close them, which we decided to do for a number of stores in Pakistan in the past three years and more selectively in other countries of operation. We continually seek to increase our average unit selling price, product range and customer traffic through various means, such as periodically changing the product offerings, floor layouts and space allocation for specific products. Product mix affects store productivity as different product categories have different profit margins and turnover volumes. For example, furniture generally has a lower turnover per square meter but a higher profit margin as compared to IT products. Store locations impact store revenues. Factors such as the proximity of the store to public transport infrastructure, the availability of parking, and the volume of customer traffic affect the profile and prominence of the store, and directly impact the ability of the store to capture market share. We expect our new stores to require aggregate upfront capital expenditures of approximately US$4.4 million in 2013 relating to set up costs, as well as overheads, such as marketing and human resources, and significant working capital requirements to maintain sufficient inventories in these enlarged stores and to fund the related installment receivables. New stores generally take up to 12 months to reach their sales potential following our investment. As a result, our future growth may adversely affect our liquidity and financial condition, and affect our short-term liquidity and capital resources, in particular our cash flows.

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The tables below set forth our number of stores and independent dealers and our like-for-like sales for the periods indicated. As at December 31, 2010 Number of retail stores . . . . . . . . . . Sri Lanka . . . . . . . . . . . . . . . . . . . . Bangladesh . . . . . . . . . . . . . . . . . . . Pakistan . . . . . . . . . . . . . . . . . . . . . India . . . . . . . . . . . . . . . . . . . . . . . . Number of independent dealers . . . Sri Lanka . . . . . . . . . . . . . . . . . . . . Bangladesh . . . . . . . . . . . . . . . . . . . Pakistan . . . . . . . . . . . . . . . . . . . . . India . . . . . . . . . . . . . . . . . . . . . . . . Thailand . . . . . . . . . . . . . . . . . . . . . Like-for-like sales growth% (1) Sri Lanka . . . . . . . . . . . . . . . . . . Bangladesh . . . . . . . . . . . . . . . . . Pakistan . . . . . . . . . . . . . . . . . . .
Note: (1) “Like-for-like” sales growth, also known as “same store” or “comparable stores” sales growth, is a non-IFRS financial measure often used by retail companies to measure the performance of their existing retail stores. Like-for-like sales growth is calculated in local currency by selecting stores that have been in full and continuous operation during the current period and the period to be compared against (usually the same period in the prior year). Stores that are opened, closed or renovated during any of the periods being compared are excluded. We have included like-for-like sales to allow investors to determine the portion of revenue increase which has come from sales growth of existing stores and the portion which can be attributed to the opening of new stores.

As at March 31, 2013 922 391 339 158 34 2,558 700 310 231 864 453 2012 vs. 2011 5.4% 25.8% 2.9%

2011 850 351 314 160 25 2,211 704 190 252 765 300

2012 909 381 338 160 30 2,435 662 263 235 798 477

812 343 286 163 20 1,797 681 140 230 486 260 2010 vs. 2009 35.5% 9.4% 6.3%

2011 vs. 2010 23.7% 12.4% 8.8%

The following table sets forth our revenue per square meter in local currency and U.S. dollar, for the periods indicated. Year ended December 31, 2010 Revenue per square meter (local currency 000’s) retail (1)(2) Sri Lanka . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Bangladesh . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pakistan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Revenue per square meter (US$) retail
(1)(2)

2011

2012

270.6 203.5 276.1 106.0 2,626 2,397 2,920 3,243 2,325

363.9 207.0 304.7 141.6 3,159 3,289 2,785 3,529 3,034

393.7 236.2 336.7 168.2 3,074 3,088 2,891 3,614 3,152

......

Sri Lanka . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Bangladesh . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pakistan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Notes: (1) Revenue per square meter is calculated by dividing revenue by the weighted average selling area (in square meters). The weighted average selling area is the average of our aggregate selling area at the end of each month during the financial year. On July 1, 2010, Bangladesh amended the regulations for VAT resulting in the exclusion of VAT from revenue. The 2010 revenue per square meter for Bangladesh would have been US$2,762 and BDT192,600, if this amendment to the VAT regulations had been in place from January 1, 2010.

(2)

Competition We operate in highly competitive and evolving HCD retail and consumer finance markets, facing competition from a number of retailers and financial institutions. In the HCD retail market, we face competition from retailers that range from large local chain operators to small independent dealers. In the consumer finance market, our competitors include local HCD retailers, local and international banks and other financial institutions that are seeking to expand their consumer lending businesses by providing alternative forms of credit such as credit cards, personal loans and leasing facilities. We believe that the principal success factors for HCD retailing include our ability to offer competitive prices, introduce new products to meet customers’ preferences, deliver high-quality products to our customers, maintain our established brand reputation and provide quality after-sales customer service. Similarly, we believe that the principal success factors for consumer finance include our ability to finance substantially all of our products, service and repair the products underlying the financing, manage credit risk and provide customers with a wide range of credit options. Our ability to maintain our competitiveness as well as our competitors’ actions will affect our results of operations. See “ Business – Competition ” for further details. Availability of financing Our business operations and future expansion plans are dependent on our ability to obtain financing at favorable rates. As at December 31, 2012, we had total borrowings of US$141.0 million, of which US$103.8 million was short-term and US$37.2 million long-term. As at December 31, 2012, our cash and bank balances were US$18.1 million. In 2010, 2011, 2012, our net finance cost amounted to US$11.4 million, US$11.1 million and US$16.8 million, respectively. See “– Borrowings”. As at March 31, 2013, we had approximately US$75.5 million of unutilized committed credit facilities and US$23.4 million in cash on the balance sheet. For ongoing capital expenditures and consumer financing, we intend to primarily draw down on our existing revolving debt facilities. Our borrowings throughout our countries of operation consist mainly of loan facilities we have entered into with 44 financial institutions. The diversified sources of funding reduce our financial risk as we are not dependent on any one financial institution. These borrowings are denominated in the local currencies in each country of operation. As our business grows, we expect to continue to rely on financial institutions as well as public deposits and other debt instruments to provide the funding to support and expand our operations. The growth of our credit operations and their ability to support our product sales are dependent on the continuation, expansion and/or renewal of our current borrowings. Accordingly, our level of outstanding debt, fluctuations in the cost of borrowing and availability and terms of additional debt financing will continue to have a meaningful impact on the level of outstanding borrowings, our interest expenses and our financial performance.

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Ability to establish and maintain relationships with product suppliers Our ability to continue to source popular and high-quality products that appeal to our existing and potential customers, as well as our ability to offer them at attractive prices and in certain instances, under exclusive distribution arrangements, depends on our ability to develop mutually beneficial relationships with our suppliers. Where we have exclusive distribution rights in respect of these products in certain of our countries of operations such rights will allow us to realize additional growth and higher margins as well as increase our brand visibility. As we continue to focus on providing high-quality products to our customers, we will where possible, seek to enter into additional exclusive distribution agreements. Our ability to offer our products at affordable prices depends heavily on our ability to negotiate favorable pricing terms with our product suppliers. Our revenues and profit margins would be materially and adversely affected if we fail to secure adequate supplies of quality products at favorable pricing and other terms. The relationships with our suppliers, in particular those under exclusive distribution arrangements, will depend largely on our ability to continue to achieve high sales volume. We believe our sales distribution and service capability will allow us to attract more brands and products, which further helps us attract more customers. Ability to manage credit risk and the credit and cash mix Approximately 50.1% and 52.5% of our product sales during 2012 and for the three months ended March 31, 2013 were on credit while finance charges represented approximately 10.9%, 10.7%, 11.9% and 12.7% of our total revenue in 2010, 2011 and 2012 and for the three months ended March 31, 2013, respectively. See “– Overview of our Results of Operations – Finance Charges .” Our financial position and the profitability of our consumer finance operations are dependent on our ability to manage the credit risk relating to our customers. Good credit management practices depend on our ability to properly evaluate our customers’ credit risk, appropriately price the loan, monitor collections and appropriately trigger mitigating action in anticipation of potential defaults. The effectiveness of our credit management practices impacts the level of impairment losses for our trade receivables and thereby our profitability and financial position. Credit sales generate higher margins than cash sales; hence shifts in the mix between cash sales and credit sales can impact our results of operations. Should there be any material shift from credit sales to cash sales, our revenue and profit would be adversely affected and inversely, a material shift from cash sales to credit sales would positively impact our revenue and profit. In addition, customers who purchase products on credit often make regular visits to our stores to pay monthly installments or canvassers perform in-house visits to collect such payments. We find these customer and canvasser visits helpful for the sale of our products as they provide us with the opportunity to showcase our new products. Any shift in the mix from cash sales to credit sales or from credit sales to cash sales could further impact our sales revenue as it may increase or decrease the frequency of customer interaction and related sales, respectively. Electrification As a retailer of products that generally require electricity, an increase in government electrification programs in the countries where we operate may positively affect our sales revenue. By providing access to electricity to a greater proportion of the population, and by making existing electricity supplies more reliable and efficient, these programs enable a greater proportion of a population to make use of our products. Moreover, electrification can increase business enterprise and consequently wealth in an area; thus increasing the disposable income of its inhabitants. The governments in each of our countries of operations have implemented electrification programs leading to different degrees of electricity penetration. In Bangladesh, the government’s electrification program aims to provide electricity to the entire population by 2020, according to

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Bangladesh’s Rural Electrification Board 1. Access to electricity has significantly increased in recent years, from 39.8% of the population relying on electricity as a source of light in 2004 to 56.6% of the population in 2011, according to the Bangladesh Bureau of Statistics 2. In Pakistan, 62.4% of the population in 2009 had access to electricity, according to the International Energy Agency. The need to provide those in rural locations with access to electricity is currently being targeted by the Alternative Energy Development Board through the parliament sponsored Village Electrification Program, which seeks to provide nearly 8,000 villages in areas away from the national grid and which are not expected to be connected within the next 15 to 20 years, with off-grid renewable energy sources for their inhabitants. Sri Lanka and India benefit from wider, access to electrification. Sri Lanka’s government aims to increase access to electricity supply from 76.6% of the population in 2009 to 100% in 2013. Similarly, India has seen the proportion of the population with access to an electricity supply grow from 74% in 2005 to 91% in 2011, according to the World Bank 3. We believe an increase in electrification should lead to an increase in our sales. Weather conditions may lead to increased sales or cause disruptions to our operations Weather conditions, including higher or lower than average temperatures and environmental disasters, such as floods, droughts and typhoons, may impact our results of operations. Higher than average temperatures may lead to an increase in the sale of cooling products such as refrigerators or air conditioners, while rainy seasons followed by good harvests may lead to higher disposable income of our customers and thus to an increase in sales. Conversely, certain weather disasters may cause disruptions to our operations as well as loss or damage to our inventories and stores, depots and warehouses and may impact our customers’ ability to purchase products or make installment payments. For example, many months of severe flooding in northern and central Thailand, including Bangkok, in 2011, resulted in numerous deaths in Thailand, damage to infrastructure, and loss of disposable income and the 2010 flooding in Pakistan led to widespread damage to infrastructure, fatalities, the spreading of disease and loss of disposable income. These and similar events have caused disruptions to the distribution of our products to our stores

1

See “General and Statutory Information – Sources”. Bangladesh’s Rural Electrification Board has not provided its consent, for purposes of Section 249 of the Securities and Futures Act, to the inclusion of the information extracted from its database, and is therefore not liable for such information under Sections 253 and 254 of the Securities and Futures Act. While we, the Vendors and the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager have taken reasonable actions to ensure that the information from the database of Bangladesh’s Rural Electrification Board has been reproduced in its proper form and context, and that the information has been extracted accurately and fairly from such database, neither we, the Vendors and the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager nor any other party have conducted an independent review of the information contained in that database or verified the accuracy of the contents of the relevant information. See “General and Statutory Information – Sources”. The Bangladesh Bureau of Statistics has not provided its consent, for purposes of Section 249 of the Securities and Futures Act, to the inclusion of the information extracted from its database, and is therefore not liable for such information under Sections 253 and 254 of the Securities and Futures Act. While we, the Vendors and the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager have taken reasonable actions to ensure that the information from the database of the Bangladesh Bureau of Statistics has been reproduced in its proper form and context, and that the information has been extracted accurately and fairly from such database, neither we, the Vendors and the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager nor any other party have conducted an independent review of the information contained in that database or verified the accuracy of the contents of the relevant information. See “General and Statutory Information − Sources”. The World Bank has not provided its consent, for the purposes of Section 249 of the Securities and Futures Act, to the inclusion of the information extracted from the relevant report published by it and therefore is not liable for such information under Sections 253 and 254 of the SFA. While we, the Vendors and the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager have taken reasonable actions to ensure that the information from its report has been reproduced in its proper form and context, and that the information has been extracted accurately and fairly from such report, neither we, the Vendors and the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager nor any other party have conducted an independent review of the information contained in that report or verified the accuracy of the contents of the relevant information.

2

3

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and customers. In addition, such weather conditions directly impact our customers, who may be unable to purchase our products or pay their monthly installments. We expect weather conditions to continue to impact our business and results of operations. Critical Accounting Policies The preparation of our combined financial statements in conformity with IFRS requires us to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the end of the reporting period, and the reported amounts of revenues and expenses during the reporting period. Estimates and judgments are continuously evaluated and are based on our experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. However, actual outcomes can differ from these estimates if different assumptions were used and different conditions existed. In particular, we have identified the following areas where significant judgments, estimates and assumptions are required, and which, if actual results were to differ, may materially affect the financial position or financial results reported in future periods. For further information on each of these and how they impact the various accounting policies described in the relevant notes to the financial statements, see “ Appendix I – Combined Financial Statements for the Years Ended December 31, 2010, 2011 and 2012 ” and “ Appendix K – Unaudited Condensed Combined Interim Financial Statements for the Three-Month Periods ended March 31, 2012 and 2013 ”. Impairment loss on trade receivables Trade receivables arising from credit operations are recognized at fair value, less directly attributable transactional costs. Finance charges are amortized using the effective interest method in accordance with IFRS 39 Financial Instruments: Recognition and Measurement . Trade receivables are recorded net of unearned finance charges and accumulated impairment loss. Trade receivables are assessed at the end of each month to determine whether there is objective evidence that they are impaired. A trade receivable is impaired if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset, and if a loss event had an impact on the estimated future cash flows of that asset that can be estimated reliably. We consider evidence of impairment of trade receivables at both a specific asset and collective level. All individually significant trade receivables are assessed for specific impairment. Those found not to be specifically impaired are then collectively assessed for any impairment that has been incurred but not yet identified. Trade receivables that are not individually significant are collectively assessed for impairment by grouping together trade receivables with similar risk characteristics. In assessing collective impairment we use historical trends of the probability of default, the timing of recoveries and the amount of loss incurred, adjusted for management’s judgment as to whether current economic and credit conditions are such that actual losses are likely to be greater or lesser than suggested by historical trends. Impairment loss on inventory Inventories are assessed at the end of each month at the lower of cost and net realizable value. The cost of inventory is based on the weighted average basis for finished goods and on the standard cost basis for raw materials and work-in-progress for inventories that are manufactured.

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Cost includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their existing location and condition. In the case of manufactured inventories and work in progress, cost includes an appropriate share of production overheads based on normal operating capacity. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and estimated costs necessary to make the sale. Overview of our Results of Operations For the purposes of conversion of local currencies to U.S. dollars in the Combined Statement of Income and Combined Statement of Financial Position as at and for the years ended December 31, 2010, 2011 and 2012, and our unaudited condensed combined interim financial statements (in local currency units per one U.S. dollar) as at and for the three-month periods ended March 31, 2012 and 2013, the following currency exchange rates were used.
Currency Exchange Rates Combined Statement of Financial Position

Combined Statement of Income Year ended December 31, 2010 112.9 69.7 85.1 45.6 31.8 2011 110.6 74.4 86.4 46.6 30.5 2012 127.5 81.7 93.2 53.3 31.1 Three months ended March 31, 2012 119.6 82.6 90.7 50.2 31.0 2013 126.8 78.9 98.0 54.2 29.8

As at December 31, 2010 Sri Lanka . . . . Bangladesh . . . Pakistan . . . . . India . . . . . . . Thailand . . . . . 111.0 70.8 85.7 44.7 30.2 2011 113.9 82.0 89.9 53.0 31.7 2012 127.0 79.8 97.3 54.9 30.6

As at March 31, 2012 127.5 81.8 90.6 50.9 30.8 2013 126.7 78.2 98.4 54.3 29.3

The closing exchange rates for the combined statement of financial position are arrived at using the following sources: for Sri Lanka, the OZFOREX Foreign Exchanges Services; for Bangladesh, the Bangladesh Bank; for India and Pakistan, the University of British Columbia, Sauder School of Business; and for Thailand, the Bank of Thailand. The same sources are used to compute the monthly average rates which are then used to convert the statement of income each month. For the periods indicated in the table above, a weighted average rate is computed, which is arrived at by weighting the monthly average rates, using revenue as the basis for the weighting. In instances where these sources do not provide a monthly average, this is computed using the daily rates and the mid-point between the buying and the selling rates. Revenue We generate our revenue from (i) sale of goods, (ii) finance charges and (iii) other revenue. The table below sets forth the components of our revenue and the geographic mix for the periods indicated, expressed in absolute terms and as a percentage of the total revenue.

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Revenue Year ended December 31, 2010 US$ million Sale of goods . . . . . Finance charges . . . Other revenue . . . . Total revenue . . . . Sri Lanka . . . . . . . . Bangladesh . . . . . . Pakistan . . . . . . . . India . . . . . . . . . . . Thailand . . . . . . . . Other . . . . . . . . . . Total revenue . . . . 285.7 35.5 5.1 326.3 142.1 69.2 27.3 23.1 62.2 2.4 326.3 % 87.6% 10.9% 1.5% 100.0% 43.5% 21.2% 8.4% 7.1% 19.1% 0.7% 100.0% 2011 US$ million 357.2 43.6 5.9 406.7 198.9 72.9 28.5 29.1 75.4 1.9 406.7 % 87.8% 10.7% 1.5% 100.0% 48.9% 17.9% 7.0% 7.2% 18.5% 0.5% 100.0% 2012 US$ million 378.0 51.9 6.0 435.9 199.3 82.5 27.1 33.7 92.0 1.3 435.9 % 86.7% 11.9% 1.4% 100.0% 45.7% 18.9% 6.2% 7.7% 21.1% 0.4% 100.0% Three months ended March 31, 2012 US$ million 90.8 12.2 1.4 104.4 51.7 14.0 7.0 8.5 22.9 0.3 104.4 % 87.0% 11.7% 1.3% 100.0% 49.5% 13.4% 6.7% 8.1% 21.9% 0.4% 100.0% 2013 US$ million 95.3 14.1 1.4 110.8 49.1 15.4 5.8 9.8 30.3 0.4 110.8 % 86.0% 12.7% 1.3% 100.0% 44.3% 13.9% 5.2% 8.9% 27.3% 0.4% 100.0%

Changes in our revenue include the impact of changes in foreign currency exchange rates. We also use the non-IFRS financial measure “at constant exchange rates” to show changes in our combined revenue without giving effect to period-to-period currency fluctuations. Under IFRS, revenues received in local (non-U.S. dollar) currency are translated into U.S. dollars at the average exchange rate for the period presented. When we use the term “at constant exchange rates”, it means that we have translated local currency revenues for the current reporting period into U.S. dollars using the same average foreign currency exchange rates for the conversion of revenues into U.S. dollars that we used to translate local currency revenues for the comparable reporting period of the prior year. We then calculate the change, as a percentage, of the current period revenues using the prior period exchange rates versus the prior period revenues. This resulting percentage is a non-IFRS measure referring to a change as a percentage “at constant exchange rates”. We believe that revenue growth is a key indicator of how a company is progressing from period to period and that the non-IFRS financial measure, at constant exchange rates is useful to investors, lenders, and other creditors because such information enables them to gauge the impact of currency fluctuations on a company’s revenue from period to period. However, we also believe that the usefulness of constant exchange rate data is subject to limitations, particularly if the currency effects that are eliminated constitute a significant element of our revenue and significantly impact our performance. We, therefore, limit our use of constant exchange rates data as a measure for the impact of currency fluctuations on the translation of local currency revenue into U.S. dollars. We do not evaluate our results and performance without considering both constant exchange rates data, on one hand, and changes in revenue prepared in accordance with IFRS, on the other. We caution investors to follow a similar approach by considering data on constant exchange rates only in addition to, and not as a substitute for or superior to, changes in revenue prepared in accordance with IFRS. We present the fluctuation derived from IFRS revenue next to the fluctuation derived from non-IFRS revenue. As the reconciliation is inherent in the disclosure, we believe that a separate reconciliation would not provide any additional benefit.

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Combined Revenue Increase Combined revenue increase At constant exchange rates Three months ended March 31, 2013 compared to same period in 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Year ended December 31, 2012 compared to same period in 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Year ended December 31, 2011 compared to same period in 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sale of goods We derive revenues from our retail, direct selling and wholesale operations through the sale of our house and third-party brand HCDs. See “ Business – Products ”. We recognize revenue for the sale of goods upon issuance of the sales receipt and/or delivery of the product to the customer. Finance charges We also derive revenues from our consumer finance business. We offer customers an option to pay in installments over time. Our credit periods are generally between two and 36 months with a fixed monthly repayment. The price of our products is determined based upon the cash price plus a finance charge that varies depending on the repayment period, the down payment and the interest rate, among other factors. The actual installment payments result from the division of the retail price by the number of payments within the desired repayment period. Installment payments displayed at our stores are typically calculated using a 12-month term. For the purpose of revenue recognition, each installment is divided into repayment of principal and a finance charge for the provision of the credit facility. Finance charges form part of our revenue from the consumer credit business. Finance charges are calculated using the effective interest rate method and transferred to the unearned finance charge account to ensure that profit and loss reflects only finance charge earned for that period. Accordingly, the difference between the gross receivables and the present value of the receivables is recognized as unearned finance charge. In our balance sheet, unearned finance charges are presented as a deduction against the trade and other receivables account. Unearned finance charges on credit sales are recognized as earned over the installment period on a constant periodic rate of return. These would then be recognized as revenue and deducted from the unearned finance charge account. In instances where low or zero interest promotions are offered to customers, unearned finance charges are created on these accounts to an extent similar to regular credit sales with a corresponding reduction in the gross margin relating to the sale. Under IFRS

8.4% 18.8% 24.3%

6.2% 7.2% 24.6%

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The table below sets forth our sales mix for the periods indicated.
Sales Mix Year ended December 31, 2010 US$ million Cash sales . . . Credit sales . . . Wholesale sales . . . . . . . Total sales of goods . . . . . . 98.8 147.6 39.3 % 34.6% 51.7% 13.7% 2011 US$ million 122.6 174.9 59.7 % 34.3% 49.0% 16.7% 2012 US$ million 127.5 189.5 61.0 % 33.7% 50.1% 16.2% Three months ended March 31, 2012 US$ million 32.8 41.8 16.2 % 36.1% 46.0% 17.9% 2013 US$ million 29.2 50.0 16.1 % 30.6% 52.5% 16.9%

285.7

100.0%

357.2

100.0%

378.0

100.0%

90.8

100.0%

95.3

100.0%

Credit sales generate finance charges and compose just over half of the total sale of goods. The proportion of credit sales varies in each of our businesses; this is reflected in the proportion of revenue represented by finance charges. Factors such as the interest rate, the down payment and the credit term also impact the level of finance charges in each business. Singer Thailand has the highest proportion of finance charges given the high mix of credit sales, longer credit term, comparatively high interest rates charged and lower down payments. Excluding India, Bangladesh has the lowest proportion of finance charges due to the market practice of shorter credit terms and higher down payments. Credit is available for wholesale customers in all our operations but this does not bear interest, hence our business in India does not generate finance charges. The table below sets forth our finance charges for the periods indicated, expressed as a percentage of total revenue. Finance Charges Year ended December 31, 2010 Sri Lanka . . . . . . . . . . . . . . . . . . Bangladesh . . . . . . . . . . . . . . . . Pakistan . . . . . . . . . . . . . . . . . . . India . . . . . . . . . . . . . . . . . . . . . . Thailand . . . . . . . . . . . . . . . . . . . Group . . . . . . . . . . . . . . . . . . . . 11.2% 2.8% 12.6% 0.0% 22.9% 10.9% 2011 10.5% 2.8% 13.5% 0.0% 22.4% 10.7% 2012 12.7% 2.8% 15.2% 0.0% 21.8% 11.9% Three months ended March 31, 2012 12.0% 3.7% 14.5% 0.0% 19.4% 11.7% 2013 13.5% 3.8% 16.4% 0.0% 19.3% 12.7%

Other Revenue We derive additional revenue from commissions, rendering of services and certain other activities. This revenue is paid to us by third-party companies or our customers. The commission and service revenue includes revenue relating to (i) a range of financial transactions conducted at our stores, such as bill payments, money transfer and mobile phone reloads, (ii) insurance we sell to our customers and (iii) extended warranties.

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We also derive other revenue from license fees paid by third parties for the right to use the Singer trademark for certain products, services and locations in selected markets. Other Income Our other income is ordinarily from the disposal of property, plant and equipment. In 2010, we disposed of our interest in ILFS in Bangladesh, which resulted in a substantial one-time gain which was included in other income. Other Income Year ended December 31, 2010 2011 2012 US$ million Other income . . . . . . . . . . . . . . . Disposal of our interest in ILFS in Bangladesh . . . . . . . . . . . . . . Total other income . . . . . . . . . . 1.4 24.5 25.9 1.5 – 1.5 1.8 – 1.8 0.4 – 0.4 0.8 – 0.8 Three months ended March 31, 2012 2013

Expenses The table below sets forth our expenses for the periods indicated and as a percentage of revenue.
Expenses Year ended December 31, 2010 2011 2012 Three months ended March 31, 2012 2013

% of US$ % of US$ % of US$ % of US$ % of US$ million revenue million revenue million revenue million revenue million revenue Cost of sales . . . . . Selling and administrative expenses . . . . . . . . Employee benefits . . . . . . Advertising and promotion . . . . . Rent and occupancy . . . . Depreciation and amortization . . . Impairment losses on trade receivables . . . . Other selling and administrative expenses . . . . . External royalty paid . . . . . . . . . . Total expenses . . . 205.2 62.9% 252.4 62.1% 269.8 61.9% 64.8 62.1% 67.9 61.3%

86.3 43.8 10.7 8.2 3.6

26.4% 13.4% 3.3% 2.5% 1.1%

109.9 56.7 15.9 10.4 4.0

27.0% 13.9% 3.9% 2.6% 1.0%

112.2 60.2 15.8 10.4 3.9

25.7% 13.8% 3.6% 2.4% 0.8%

27.6 13.8 4.5 2.4 0.9

26.4% 13.2% 4.3% 2.3% 0.8%

30.0 15.3 4.4 2.9 1.1

27.1% 13.8% 4.0% 2.6% 1.0%

3.1

1.0%

4.8

1.2%

3.8

0.9%

1.1

1.1%

0.6

0.6%

16.9 2.6 294.1

5.1% 0.8% 90.1%

18.1 3.3 365.6

4.4% 0.8% 89.9%

18.1 3.4 385.4

4.2% 0.8% 88.4%

4.9 0.8 93.2

4.7% 0.8% 89.3%

5.7 0.8 98.7

5.1% 0.7% 89.1%

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Cost of Sales and Gross Profit Our cost of sales comprises cost of acquisition of merchandise from third-party suppliers, manufacturing and assembly costs, raw material costs, and transportation costs of our products. The gross profit is the difference between the revenue and the cost of sales. The gross margin percentage is derived by dividing the gross profit by revenue. Our total gross margin percentage has gradually increased over the past three years. The table below sets forth our gross margin percentage for the periods indicated. Three months ended March 31, 2012 37.4% 26.0% 30.2% 20.3% 54.4% 38.0% 2013 38.5% 27.2% 32.1% 19.8% 51.5% 38.7%

Gross margin %

Year ended December 31, 2010 2011 38.9% 25.3% 28.7% 20.8% 56.4% 37.9% 2012 37.4% 27.6% 32.3% 20.0% 56.4% 38.1%

Sri Lanka . . . . . . . . . . Bangladesh . . . . . . . . Pakistan . . . . . . . . . . . India . . . . . . . . . . . . . . Thailand . . . . . . . . . . . Group . . . . . . . . . . . .

37.6% 25.5% 29.2% 21.2% 57.5% 37.1%

The gross margin percentage varies depending on the nature of the business. The gross margin percentage in the retail businesses of Sri Lanka, Bangladesh and Pakistan vary depending on the competitive landscape and the extent of credit sales. The direct selling business in Thailand has the highest gross margin percentage. The predominantly wholesale business in India which does not earn any finance charges has the lowest gross margin percentage. Selling and Administrative Expenses Our selling and administrative expenses comprise employee benefits, advertising and promotion, rent and occupancy costs, depreciation, amortization, impairment losses on trade receivables and certain other costs. Included in other selling and administrative expenses are professional fees, information technology costs, warranty expenses, insurance, warehouse and distribution costs and other general administrative expenses. Employee benefits comprise wages and salaries, compulsory social security contributions, contributions to defined contribution plans, expenses related to defined benefit plans and other employee-related costs. Included in wages and salaries are commissions paid to branch managers, sales canvassers and, in some cases, store staff. Employee benefits are the largest expense category. Advertising expenses includes both above-the-line advertising, such as print, TV and radio advertisements, and below-the-line advertising, such as catalogues, leaflets and in-store pointof-sale materials. Promotions include free gifts and lucky draws as well as additional incentives offered to branch staff. Rent and occupancy expenses include all costs relating to properties; for example, rent and utility payments. Impairment losses on trade receivables result from bad debts that are written off, the movement in the bad debt provision during a particular period and any losses realized following the repossession of the product in relation to an account. Impairment losses on trade receivables can

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result from installment receivables and other trade receivables such as amounts due from independent dealers. In respect of installment receivables, the bad debt provision is arrived at using the following formula which is based on the aging and balance of the principal outstanding. Reserve rates applied on the balance of the principal outstanding Age Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Past due (days): 1 – 60 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 – 90 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91 – 120 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121 – 180 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181 – 270 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 271 – 360 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . > 360. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0% 50% 50% 100% 100% 100% 100% 5% 5% 25% 25% 35% 50% 100% Retail 0% Direct Selling 1%

Reserve rates are determined and reviewed by our management annually before being reviewed and approved by our audit committee. In determining reserve rates, we consider historical trends of the probability of default, the timing of recoveries and the amount of loss incurred, adjusted for management’s judgment as to whether current economic and credit conditions are such that actual losses are likely to be greater or lesser than suggested by historical trends. See “– Critical Accounting Policies – Impairment loss on trade receivables ”. Reserve rates are fixed and all retail entities have the same rates, with the exception of Thailand, which has different rates as it engages in direct selling. The reserve rates in the direct selling business vary relative to those in the retail businesses as the installment collection practices are different. In a direct selling business, installments are collected by canvassers when visiting customer’s homes, while in a retail business, customers are expected to make payments in the store each month. In the case of a direct selling business, a reserve for current and less than 60 days past due is raised and a 100% provision is raised only after 360 days past due. The reserve rates used are amended from time to time based on our analysis of historical trends, the timing of recoveries and the amount of loss incurred, among other factors. The selling and administrative expenses expressed as a percentage of revenue is set forth in the table below. The level of selling and administrative expenses varies depending on the nature of the business, the underlying costs in each country and the proportion of credit business. The direct selling business in Thailand has the highest selling and administrative expenses percentage of revenue mainly on account of greater levels of commissions paid to canvassers. The wholesale business in India has the lowest cost structure. The below table sets forth our selling and administrative expenses for the periods indicated, expressed as a percentage of revenue.

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Selling and Administrative Expenses (% of Revenue) Year ended December 31, 2010 Sri Lanka . . . . . . . . . . . . . . . . . . Bangladesh . . . . . . . . . . . . . . . . Pakistan . . . . . . . . . . . . . . . . . . . India . . . . . . . . . . . . . . . . . . . . . . Thailand . . . . . . . . . . . . . . . . . . . Group . . . . . . . . . . . . . . . . . . . . 24.8% 14.6% 19.9% 15.9% 45.9% 26.4% 2011 25.1% 15.6% 18.6% 15.8% 46.8% 27.0% 2012 23.3% 15.1% 20.7% 14.8% 42.9% 25.7% Three months ended March 31, 2012 22.9% 16.2% 19.7% 14.4% 44.3% 26.4% 2013 24.9% 17.0% 20.8% 14.7% 38.2% 27.1%

Other Expenses Our other expenses comprise the royalty payments to SVP for the use of the Singer trademark by Singer Asia and its subsidiary companies calculated based on the consolidated revenue of Singer Asia as determined pursuant to U.S. GAAP. See “ Business – Branding and Intellectual Property ”. Finance Income Our finance income comprises interest income on our bank balances and short-term investments. Finance Costs Our finance costs comprise interest expenses on our interest-bearing borrowings and foreign currency losses/gains. Income Tax Expense Our income tax expense comprises income tax expenses paid in our countries of operations. Income taxes vary from one country to another and are subject to changes in the tax laws of each such country. Our income tax expense includes both our accrued and deferred taxes and is calculated according to IFRS. The income tax expense also includes withholding taxes on dividends received from the subsidiary companies. The effective tax rate (income tax expense expressed as a percentage of profit before tax excluding share of profit from equity accounted investees) can vary from year to year depending on the distribution of profit and dividends among our subsidiaries and the different tax rates in our countries of operations. Currently, in our main countries of operations the lowest corporate tax rate is in Thailand at 20.0% and the highest is in Pakistan at 35.0%. In Sri Lanka the corporate tax rate is 28.0%, in Bangladesh it is 27.5% and in India it is 32.5%. Withholding tax on dividends was high in 2011 as a large dividend was received from our subsidiary in Bangladesh following the sale of an affiliate company, ILFS. Dividend withholding taxes are typically 10% of the gross dividend. On January 18, 2010, our subsidiary company Regnis (Lanka) PLC incorporated a wholly-owned subsidiary, Regnis Appliances (Pvt) Limited, to take advantage of certain tax concessions under the Sri Lankan Board of Investment, Nipayum Sri Lanka 300 Enterprises Programme. Under this program, with a minimum investment of LKR50 million and at least 50 employees, investees are eligible for a reduction in the corporate tax rate. Accordingly, for the years of assessment which ended on March 31, 2011 and March 31, 2012, the corporate tax rate applicable to Regnis 94

Appliances (Pvt) Limited was 0.0%, which will increase to 10.0% for the years of assessment ending on March 31, 2013 and March 31, 2014. Starting from April 1, 2014, the corporate tax rate will be fixed at 20.0%. Other Comprehensive Income Our other comprehensive income is derived from foreign currency translation differences for foreign operations, revaluation of property, plant and equipment and income tax on items recognized directly in equity. Three-Month Period Ended March 31, 2013 Compared to Three-Month Period Ended March 31, 2012 During the three months ended March 31, 2013, we increased our retail store base by 13 stores, added 11 depots and 123 independent dealers and renovated or relocated a total of 57 stores and depots. The table below sets forth our distribution network as at December 31, 2012 and March 31, 2013. Retail Stores, Direct Selling Depots and Independent Dealers As at December 31, 2012 Retail stores . . . . . . . . . . . . . . . . . . . . . . . . . . . Sri Lanka . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Bangladesh . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pakistan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Direct selling depots – Thailand . . . . . . . . . . . Independent dealers . . . . . . . . . . . . . . . . . . . . Sri Lanka . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Bangladesh . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pakistan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Thailand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Revenue Our revenues increased by 6.2% from US$104.4 million in the three months ended March 31, 2012 to US$110.8 million in the three months ended March 31, 2013. Changes in revenue include the impact of changes in foreign currency exchange rates. We also use the non-IFRS financial measure at constant exchange rates to show changes in our combined revenue without giving effect to period-to-period currency fluctuations. At constant exchange rates, revenue increased by 8.4% for the three-month period ended March 31, 2013 compared to the same period in 2012. The table below sets forth our revenue for the three-month period ended March 31, in 2013 compared to the three months ended March 31, 2012 in each country of operations measured in local currency and U.S. dollars for the periods indicated, together with the combined revenue calculated at constant exchange rates and as per IFRS. 909 381 338 160 30 200 2,435 662 263 235 798 477 As at March 31, 2013 922 391 339 158 34 211 2,558 700 310 231 864 453

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Revenue Local currency Three months ended March 31, 2012 2013 U.S. dollars Three months ended March 31, 2012 2013 Percentage change Local currency US$

local currency millions Sri Lanka . . . . Bangladesh . . Pakistan . . . . . India . . . . . . . . Thailand . . . . . Other
(1)

US$ million 51.7 14.0 7.0 8.5 22.9 0.3 104.4 49.1 15.4 5.8 9.8 30.3 0.4 110.8 0.6% 5.8% (9.7%) 24.5% 27.2% 5.9% 8.4% (2) (5.1%) 10.6% (16.5%) 15.3% 32.2% 5.9% 6.2%

LKR6,183.3 BDT1,152.9 PKR 632.3 INR 426.4 THB 709.6 –

LKR6,222.3 BDT1,219.3 PKR 570.7 INR 530.8 THB 902.9 –

......

Group . . . . . .
Notes: (1) (2)

“Other” comprised royalties received from the Malaysia and Australia sub-licensees. This figure is a non-IFRS financial measure.

U.S. dollar revenue growth in the three months ended March 31, 2013 was impacted by currency devaluation in Sri Lanka, Pakistan and India which was partially offset by local currency appreciation in Bangladesh and Thailand. See “ – Significant Factors Affecting Our Results of Operations – Foreign Exchange Rates ”. The increase in revenue was primarily due to an increase in the sale of goods, particularly in Thailand and India, where revenue, as measured in local currency, increased 27.2% and 24.5% respectively. In Thailand the introduction of commercial products such as vending machines boosted sales; unit sales of petrol vending machines, a product introduced in 2009, increased by 614.9% for the three months ended March 31, 2013 compared to same period in 2012. In addition, the provision of freezer and air conditioning maintenance services to villages countrywide led to an increase of 57.0% in the unit sales of freezers for the three months ended March 31, 2013 compared to same period in 2012. In India, the increase in the number of dealers from 798 as at December 31, 2012 to 864 as at March 31, 2013 resulted in a 12.5% increase in unit sales of sewing related products. Further, sales of small appliances, which were first introduced in 2011, increased by almost sevenfold for the three months ended March 31, 2013 compared to same period in 2012. The revenue growth in Bangladesh, as measured in local currency, at 5.8%, was impacted by the countrywide general strike action which resulted in 16 trading days being lost during the three-month period ended March 31, 2013. Revenue during this period is seasonally low in Bangladesh, in anticipation of the festivals that take place in the second half of the year. Revenue growth in Sri Lanka was marginal, which reflected the general slowdown in the economy, higher interest rates and higher product selling prices due to the devaluation of the Sri Lankan rupee compared to 2012. The economic slowdown, higher interest rates and selling prices impacted the middle-and lower-income groups in particular; sales to more affluent customers remained buoyant as demonstrated by the 14.0% and 6.8% growth, as measured in local currency, in the Singer Mega and Singer Homes stores respectively. Sales of furniture in Sri Lanka increased 23.4% and sales of IT products were very strong, with computer sales increasing 30.3%, smart and mobile phone sales increasing over eleven times and digital camera sales increasing 37.2%, all as measured in local currency. In the lead up to the general elections in Pakistan in May 2013, there was a marked increase in the economic and political instability and widespread unrest in the 96

country. This resulted in a decline in revenue for the three-month period ended March 31, 2013 of 9.7%, as measured in local currency. The prospects for growth in Pakistan are expected to improve following the May 2013 election. The chart below sets forth the revenue mix by source country for the three-month period ended March 31, 2013. The figures provided are in millions of U.S. dollars.
Thailand US$30.3 27.3% Other US$0.4 0.4%

India US$9.8 8.9% Pakistan US$5.8 5.2%

Bangladesh US$15.4 13.9%

Sri Lanka US$49.1 44.3%

The share of Thailand and India in this revenue mix has increased during this period as a result of their stronger performance. The Bangladesh share is low on account of sales seasonality. An important measure for our predominantly retail businesses in Sri Lanka, Bangladesh and Pakistan is like-for-like sales growth, which was as follows. Like-for-like sales growth in % (three months ended March 31, 2013 compared to three months ended March 31, 2012) Sri Lanka . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Bangladesh . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pakistan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4.9) 5.0 (9.7)

The negative like-for-like sales growth in Sri Lanka and Pakistan is a reflection of the economic effects of the factors as indicated above. During the three months ended March 31, 2013 the credit sales mix increased from 46.0% of product sales revenue in the prior period to 52.5%, on account of the increasing proportion of credit sales in all locations. In particular, the strong growth in Thailand, and therefore Thailand’s increased share of total overall revenue, where the proportion of credit sales is highest, has also increased the overall Company credit sales mix. Due to the increased credit sales mix, finance charges as a percentage of revenue increased from 11.7% in the prior period to 12.7%. Singer Thailand has the highest proportion of revenue contributed by finance charges due to a high credit sales percentage and comparatively high finance charge rates.

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The table below sets forth our product mix for the three-month period ended March 31, 2012 and 2013. Product Mix Three months ended March 31, 2012 US$ million Group Home appliances . . . . . . . . . . . . . . . . . . Consumer electronics. . . . . . . . . . . . . . . IT products . . . . . . . . . . . . . . . . . . . . . . . Furniture . . . . . . . . . . . . . . . . . . . . . . . . . Sewing machines . . . . . . . . . . . . . . . . . . Other products . . . . . . . . . . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.8 16.3 3.8 2.2 14.8 9.9 90.8 48.2% 18.0% 4.2% 2.4% 16.3% 10.9% 100.0% 44.1 15.9 5.5 2.6 15.0 12.2 95.3 46.3% 16.7% 5.8% 2.7% 15.7% 12.8% 100.0% % US$ million 2013 %

Cost of Sales and Gross Profit Our cost of sales increased by 4.8% (or US$3.1 million) from US$64.8 million in the three months ended March 31, 2012 to US$67.9 million in the three months ended March 31, 2013. Gross margin percentage increased from 38.0% in the three months ended March 31, 2012 to 38.7% for the same period in 2013. The gross margin percentage increased in Sri Lanka and Pakistan as a result of their increased mix of credit sales and therefore higher finance charges. In Sri Lanka, the product mix of IT products increased from 6.4% in the three-month period ended March 31, 2012 to 12.1% for the same period in 2013, but this change did not impact the overall gross margin percentage. In Bangladesh, the product gross margin increased due to reduced sales of motorcycles and certain other products where the gross margin percentage is lower. In Thailand and India, the gross margin percentage declined on account of increased sales of commercial products (including vending machines) and small appliances, respectively, where the gross margin is lower. The increase in the group gross margin percentage also resulted from the strong performance in Thailand which, being a direct selling business, operates at significantly higher gross margins than the retail and wholesale businesses in our other countries of operation. Our gross profit increased by 8.3% from US$39.6 million in the three months ended March 31, 2012 to US$42.9 million in the three months ended March 31, 2013 due to the changes in our revenue and cost of sales as indicated above. Other Income Our other income increased from US$0.4 million in the three months ended March 31, 2012 to US$0.8 million in the three months ended March 31, 2013, primarily due to an increase in the gain on sale of property, plant and equipment. Selling and Administrative Expenses Our selling and administrative expenses increased by 8.7% from US$27.6 million in the three months ended March 31, 2012 to US$30.0 million in the three months ended March 31, 2013. As a percentage of revenue, selling and administrative expenses increased from 26.4% in the three months ended March 31, 2012 to 27.1% in the three months ended March 31, 2013. This increase 98

reflects the strong performance in Thailand, as Thailand’s selling and administrative expenses as a percentage of revenue are the highest within our Group. However, when considered in isolation, the selling and administrative expense percentage of revenue in Thailand declined from 44.3% to 38.2% due to strong revenue growth and because some of the expenses were fixed in nature. The most significant fixed expenses include salaries, benefits and travelling (excluding commission and bonus), advertising and promotions, rent and occupancy, depreciation and amortization, and professional and legal fees. Further, in Sri Lanka and Pakistan, the higher selling and administrative expense percentage of revenue resulted from slower sales growth not keeping pace with the inflation of expense categories such as staff salaries and benefits, and rent and occupancy. The employee benefits for the three months ended March 31, 2013 increased 10.9% from US$13.8 million in the three months ended March 31, 2012 to US$15.3 million. Once again, this increase reflects the strong performance from the Thailand direct selling business which has greater commission levels compared to the retail businesses. Commission as a percentage of revenue in Thailand was 16.5% for the year ended December 31, 2012 whereas for Sri Lanka, Bangladesh and Pakistan, it amounted to 5.4%. As such, US$1.0 million of the US$1.5 million increase in employee benefits for the three months ended March 31, 2013 compared to the same period in 2012, was related to increased commission expenses in Thailand. Other Expenses Our other expenses remained the same at US$0.8 million in both the three months ended March 31, 2012 and the three months ended March 31, 2013. Other expenses comprise the royalty payment to SVP for our use of the Trademark calculated based on the consolidated revenue of Singer Asia under U.S. GAAP. For further detail on certain differences between U.S. GAAP and IFRS, see “ Summary Financial Information ”. Net Finance Costs Our net finance costs increased from US$3.2 million in the three months ended March 31, 2012 to US$4.6 million in the three months ended March 31, 2013. The increase of US$1.3 million in finance costs (before set-off against finance income) was primarily attributable to (i) a rise in interest rates, particularly in Sri Lanka, which resulted in an increase of US$0.7 million in finance costs; and (ii) the growth in borrowings following a need to increase our working capital for receivables and inventory, primarily in Sri Lanka and Bangladesh, which resulted in an increase of US$0.6 million in finance costs. Additional working capital is required to fund any increase in receivables. Since we offer credit sales, we anticipate that the amount of receivables will grow in line with increased credit sales. This is represented by “changes in trade and other receivables” in the cashflow statement. Likewise, as we open more shops, increase our product categories and also increase the number of third-party brands that we sell, the amount of inventory will increase to ensure that there is enough inventory for each type and brand of product in each shop. Additional cash is needed to fund this increase (as represented by “changes in inventory” in the cashflow statement). Profit before Income Tax Our profit before income tax decreased by 2.4% from US$8.5 million in the three months ended March 31, 2012 to US$8.3 million in the three months ended March 31, 2013 due to the changes described above.

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Income Tax Expense Our income tax for the three months ended March 31, 2013 was a credit of US$0.2 million. This credit mainly resulted from the creation of a deferred tax asset, amounting to US$1.9 million, relating to accumulated historical losses in India. This deferred tax asset has been created following the Singer India’s deregistration from BIFR on February 28, 2013. For the three-month period ended March 31, 2012, the Company incurred tax charge of US$2.5 million. Profit for the Year Our profit for the year increased by 42.4% from US$5.9 million in the three months ended March 31, 2012 to US$8.4 million in the three months ended March 31, 2013 primarily due to the recognition of a deferred tax asset described above which was offset by an increase in interest charges due to higher interest rates, predominantly in Sri Lanka, and a higher debt level over the same period in the prior year. The profit attributable to equity holders of our Company increased 25.0% from US$4.0 million in the three months ended March 31, 2012 to US$5.0 million in the three months ended March 31, 2013. Non-controlling interest share of profit increased by 76.8% primarily on account of a comparatively stronger performance from our Thailand business where the minority portion is highest. Year Ended December 31, 2012 Compared to Year Ended December 31, 2011 Revenue Our revenues increased by 7.2% from US$406.7 million in 2011 to US$435.9 million in 2012. Changes in revenue include the impact of changes in foreign currency exchange rates. At constant exchange rates, revenue increased by 18.8% in 2012. The table below sets forth our revenue in 2012 versus 2011 in each country of operations measured in local currency and U.S. dollars, respectively, for the periods indicated, together with the combined revenue calculated at constant exchange rates, and as per IFRS. Revenue Local currency For the year ended December 31, 2011 2012 U.S. dollars For the year ended December 31, 2011 2012 Percentage change Local currency US$

local currency millions Sri Lanka . . . . Bangladesh . . Pakistan . . . . . India . . . . . . . . Thailand . . . . . Other(1) . . . . . . Group . . . . . .
Notes: (1) (2)

US$ million 198.9 72.9 28.5 29.1 75.4 1.9 406.7 199.3 82.5 27.1 33.7 92.0 1.3 435.9 15.4% 24.3% 2.5% 32.3% 24.3% -20.3% 18.8% (2) 0.2% 13.2% -5.0% 15.7% 22.0% -20.3% 7.2%

LKR22,010.8 BDT5,421.2 PKR2,463.3 INR1,357.3 THB2,299.3 –

LKR25,399.3 BDT6,739.4 PKR2,523.9 INR1,795.5 THB2,857.3 –

“Other” comprised royalties received from the Malaysia and Australia sub-licensees and certain sales of Singer products to third parties in 2011. This figure is a non-IFRS financial measure.

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U.S. dollar revenue growth in 2012 was significantly impacted by currency devaluations in Sri Lanka, Bangladesh, Pakistan, India and to a lesser extent Thailand. See “ – Significant – Factors Affecting Our Results of Operations – Foreign exchange rates ”. The increase in revenue in U.S. dollar terms was primarily due to an increase in the sale of goods, particularly in Sri Lanka, Bangladesh, India and Thailand. In Sri Lanka, an increase of 30 stores and the full year contribution of the eight stores opened in 2011, as well as improved sales productivity with sales per square meter increasing by 8.2%, contributed to revenue growth. During 2012, the economy in Sri Lanka started to show signs of slowing following strong growth in 2010 and 2011. Fuel and electricity prices increased over 40%, interest rates increased sharply and the currency devalued. All these factors resulted in a reduction in consumer disposal income and a gradual slowdown in the revenue growth to 15.4% in 2012 from 37.2% in 2011 and 34.6% in 2010. Despite this slowdown, many product categories performed well with unit sales growth in panel televisions of 23.2% and in air cooling products of 70.5%, amongst others. This strong performance may be attributed to the reduced cost of these products, since panel televisions have become more affordable following the reduction in import duty in 2011, whilst air cooling products are new to the market and offer a more affordable alternative to air conditioners. In Bangladesh, almost all product categories experienced strong growth, in particular panel televisions, where unit sales increased by 600%. This growth was driven by an increase in the number of stores by 24, in addition to the 28 stores opened in 2011. Further, stores experienced greater productivity, with sales per square meter increasing by 14.1% in 2012. The revenue growth was highest in India, at 32.3%, following the successful introduction of the small appliance category, where unit sales for 2012 increased over 200% to 92,794 units. As Singer India has been operating in India since 1870, it has established a strong brand identity with the SINGER ® brand and many customers who have previously bought Singer branded sewing machines have purchased Singer small appliances. Price increases for sewing products of approximately 10% to 15% also boosted revenue, adding to the 17.5% growth in sewing machine unit sales in 2012. The increase in the number of dealers from 765 as at December 31, 2011 to 798 as at December 31, 2012 helped to drive this growth. Revenue growth in Pakistan was subdued due to economic and political instability and widespread unrest in the country. In Thailand, the introduction of the petrol vending machine, combined with strong sales of mobile phone airtime vending machines, bottle coolers and freezers to small entrepreneurs helped drive sales growth. HCD products also performed well in Thailand with unit sale growth in air conditioners, panel televisions and sewing machines of 52.4%, 40.3% and 27.2%, respectively. The increase in dealers from 2,432 as at December 31, 2011 to 2,773 as at December 31, 2012 increased geographic presence and exposure to different customer groups, driving sales.

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The chart below sets forth the revenue mix by source country for 2012. The figures provided are in millions of U.S. dollars.
Thailand US$92.0 21.1%

Other US$1.3 0.4%

India US$33.7 7.7% Pakistan US$27.1 6.2% Sri Lanka US$199.3 45.7%

Bangladesh US$82.5 18.9%

Like-for-like revenue growth in Sri Lanka, Bangladesh and Pakistan was: Like-for-like revenue growth in percentage 2012 revenues compared to 2011 Sri Lanka . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Bangladesh . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pakistan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.4% 25.8% 2.9%

The relatively slower like-for-like sales growth in Sri Lanka and Pakistan resulted from the economic conditions in these countries referred to above. The like-for-like sales growth in Bangladesh was strong. Cost of Sales and Gross Profit Our cost of sales increased by 6.9% (or US$17.4 million) in 2012 from US$252.4 million in 2011 to US$269.8 million in 2012. The gross margin percentage increased slightly from 37.9% in 2011 to 38.1% in 2012. The gross margin percentage increased mainly on account of the increase in the sale of goods in Thailand, where the gross margin percentage is highest. This was partially off-set by a decline in the gross margin percentage in Sri Lanka, as the high margins (that became available following the customs duty reductions in 2011) were not sustained into 2012 as we gradually reduced selling prices to address competition. The gross margin percentage increased in Bangladesh due to a greater proportion of home appliance sales driven by strong sales of refrigerators during the festival season in the second half of the year and in Pakistan due to the greater portion of credit sales and, therefore, finance charges. Our gross profit increased by 7.6% from US$154.3 million in 2011 to US$166.1 million in 2012.

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Other Income Our other income increased by 20.0% from US$1.5 million in 2011 to US$1.8 million in 2012. The increase was primarily due to the increase of US$123,000 in income from repairs for products out of warranty and an increase of US$124,000 in the penalty charged on overdue installment receivables, both of which relate to Singer Sri Lanka. Selling and Administrative Expenses Our selling and administrative expenses increased by 2.1% from US$109.9 million in 2011 to US$112.2 million in 2012. As a percentage of revenue, selling and administrative expenses declined from 27.0% in 2011 to 25.7% in 2012. The strong revenue growth in India, Thailand, Bangladesh and Sri Lanka all resulted in reduced selling and administrative expense percentages in these countries. These strong performances also resulted in lower impairment losses on trade receivables that reduced from 1.2% of revenue to 0.9% of revenue. In 2012, our internal audit department, together with Singer Bangladesh, performed a review of the adequacy of warranty provisions and determined that the warranty provision rates needed to be revised based on historical trends and records. This was in part due to increases in warranty expenses. As a result, the percentage of warranty provision to product sales increased from 0.4% in 2011 to 0.6% in 2012 (and for the three months ended March 31, 2013). Warranty provisions are directly proportional to product sales as the first year warranty is offered for free to customers on products sold. The warranty provision rates are revised from time to time to reflect the change in product mix and quality of products supplied as part of the continuous process to improve accounting accuracy and appropriateness. Other Expenses Our other expenses increased by 3.0% from US$3.3 million in 2011 to US$3.4 million in 2012. This increase was due to an increase in the royalty payment to SVP for our use of the Singer trademark calculated based on the consolidated revenue of Singer Asia under U.S. GAAP, which increased in 2012. Net Finance Costs Our net finance cost increased from US$11.1 million in 2011 to US$16.8 million in 2012. The increase of US$5.4 million in finance cost (before set-off against finance income) was primarily attributable to (i) a rise in interest rates, particularly in Sri Lanka, which resulted in an increase of US$2.4 million in finance costs; and (ii) the growth in our borrowings to fund additional working capital for receivables and inventory on account of additional credit sales and a wider range of third-party brands and product categories, which resulted in an increase of US$3.0 million in financial costs. Profit before Income Tax Our profit before income tax increased by 12.7% from US$31.4 million in 2011 to US$35.4 million in 2012 due to the changes described above. Income Tax Expense Our income tax expense decreased by 8.2% from US$9.7 million in 2011 to US$8.9 million in 2012. This decrease was primarily due to a decrease in the corporate tax rate in Sri Lanka from 35.0% to 28.0% and lower withholding taxes on dividends received.

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Profit Our profit increased by 22.7% from US$21.6 million in 2011 to US$26.5 million in 2012 due to the changes described above. The profit attributable to equity holders of the Company increased 11.2% from US$15.2 million in 2011 to US$16.9 million in 2012. Non-controlling interest share of profit increased by 47.9% primarily on account of a comparatively stronger performance from the Thailand business where the minority portion is highest. Year Ended December 31, 2011 Compared to Year Ended December 31, 2010 Revenue Our revenue increased by 24.6% from US$326.3 million in 2010 to US$406.7 million in 2011. The overall impact of changes in foreign currency exchange rates was minimal in 2011, as revenue at constant exchange rates increased by 24.3%. The table below sets forth our revenue increase in 2011 versus 2010 in each country of operation measured in local currency and U.S. dollars, respectively for the periods indicated, together with the combined revenue calculated at constant exchange rates and as per IFRS, respectively. Revenue Year ended December 31, Revenue in local currency million 2010 Sri Lanka . . . . . . . . Bangladesh
(3)

Percentage change 2011 vs. 2010 Local currency US$

Revenue in US$ million 2010 142.1 69.2 27.3 23.1 62.2 2.4 326.3 2011 198.9 72.9 28.5 29.1 75.4 1.9 406.7

2011 LKR22,010.8 BDT5,421.2 PKR2,463.3 INR1,357.3 THB2,299.3 –

LKR16,040.7 BDT4,824.0 PKR2,325.5 INR1,054.0 THB1,978.7 –

37.2% 12.4% 5.9% 28.8% 16.2% -20.8% 24.3% (2)

40.0% 5.3% 4.4% 25.9% 21.3% -20.8% 24.6%

....

Pakistan . . . . . . . . India . . . . . . . . . . . Thailand . . . . . . . . Other
(1)

.........

Group . . . . . . . . . .
Notes: (1) (2) (3)

“Other” comprised royalties received from the Malaysia and Australia sub-licensees and certain sales of Singer products to third parties in 2010 and 2011. This figure is a non-IFRS measure. On July 1, 2010, Bangladesh amended the regulations for VAT resulting in the exclusion of VAT from revenue. The 2010 revenue per square meter for Bangladesh would have been US$2,762 and BDT192,600, if this amendment to the VAT regulations had been in place from January 1, 2010.

The increase in revenue was primarily due to an increase in the sale of our products in our stores and through our wholesale dealer network. Our sales increased by 40.0% in U.S. dollar terms in Sri Lanka, on account of an overall improvement in the economy in Sri Lanka following the cessation of civil war in 2009 and the reduction by the Sri Lankan government in customs duty for certain product categories with effect from January 2011. See “– Significant Factors Affecting Our Results of Operations – Macroeconomic conditions in our countries of operation ”. The customs duty reductions decreased the overall cost of the products in these categories correspondingly, and, as such, we were able to reduce the retail price of certain HCDs, helped in the case of panel 104

television by a reduction in price from suppliers. This made our products more affordable and resulted in a significant increase in the sales of these products in 2011 compared to 2010, as indicated in the table below. Customs Duty and Unit Sales Customs duty rate in 2010 Panel televisions (< 32 inches in size) . . . . . . . . . . . . . . . . . . . . DVD and home theatre systems . . . . . . . . . . . . . . . . . . . Kitchen appliances . . . . . . . . . . . Customs duty rate in 2011 Unit sales in 2010 Unit sales in 2011 % change

15% 15% 28%

0% 0% 0%

4,325 110,007 185,463

82,503 174,453 301,397

1,807.6% 58.6% 62.5%

Customs duties were also reduced from 28% in 2010 to 0% in 2011 in Sri Lanka on microwave ovens, rice cookers, and audio players which also meaningfully increased sales volumes. In Thailand, the implementation of a new strategy to include small grocery shops in our customer base increased unit sales of mobile phone air time vending machine by 127.9%. Unit sales of other major HCD products such as television and freezers increased by 29.6% and 19.3% respectively for the year ended December 31, 2011 compared to the same period in the prior year. In India, active expansion of Singer India countrywide, as well as general growth in the economy led to an 11.7% increase in unit sales of sewing related products. The chart below sets forth the revenue mix by source country for 2011. The figures provided are in millions of U.S. dollars.
Thailand US$75.4 18.5% Other US$1.9 0.5%

India US$29.1 7.2% Pakistan US$28.5 7.0%

Bangladesh US$72.9 17.9%

Sri Lanka US$198.9 48.9%

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The following table indicates the like-for-like sales growth in our retail businesses in Sri Lanka, Bangladesh and Pakistan in 2011. Like-for-like sales growth in percentage terms (2011 compared to 2010) Sri Lanka . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Bangladesh . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pakistan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.7% 12.4% 8.8%

The like-for-like sales growth in Sri Lanka was particularly strong due to the buoyant economic conditions and lower customs duties. Cost of Sales and Gross Profit Our cost of sales increased by 23.0% (or US$47.2 million) in 2011. The gross margin percentage increased from 37.1% in 2010 to 37.9% in 2011. This increase mainly resulted from a higher gross margin percentage in Sri Lanka following opportunities to earn increased profits for most of the year on products where customs duty reductions had taken place. These higher profits gradually decreased as competitive pressures realigned selling prices to the new duty levels. Certain minor changes to margins took place in Thailand and Pakistan as their product mix shifted. As a result of the above, our gross profit increased by 27.4% from US$121.1 million in 2010 to US$154.3 million in 2011. Other Income Our other income decreased from US$25.9 million in 2010 to US$1.5 million in 2011. In 2010, our subsidiary in Bangladesh sold to third parties its entire 35.6% interest in its affiliate leasing company, ILFS, for US$31.9 million resulting in a gain on disposal amounting to US$24.5 million. Selling and Administrative Expenses Our selling and administrative expenses increased by 27.3% from US$86.3 million in 2010 to US$109.9 million in 2011. As a percentage of revenue, selling and administrative expenses increased from 26.4% in 2010 to 27.0% in 2011. This increase was primarily on account of the strong performance in Sri Lanka, where the selling and administrative expenses as a percentage of revenue is comparatively higher. Sri Lanka has a higher selling and administrative expenses percentage of revenue compared to the retail businesses in Bangladesh and Pakistan partly as a result of Singer Finance, which, being a finance company, does not generate revenue from the sale of products. Singer Finance’s selling and administrative percentage of revenue was 42.6% in 2011. In 2011, to take advantage of more buoyant economic conditions in our countries of operation, we increased our advertising and promotion spending as a percentage of revenue from 3.3% to 3.9%. Other Expenses Our other expenses increased from US$2.6 million in 2010 to US$3.3 million in 2011. This increase was due to an increase in the royalty payment to SVP for our use of the Trademark calculated based on the consolidated revenue of Singer Asia under U.S. GAAP, which increased in 2011.

106

Net Finance Costs Our net finance costs decreased by 2.6% from US$11.4 million in 2010 to US$11.1 million in 2011. Interest rates relating to our borrowings remained relatively stable during this period. Net financing costs in 2011 were lower as borrowings in Bangladesh were reduced following the receipt of the proceeds from the sale of the affiliate company, ILFS, in Bangladesh. The majority of these sale proceeds were subsequently remitted as a dividend by Singer Bangladesh in May 2011. Profit before Income Tax Our profit before income tax decreased by 34.4% from US$47.9 million in 2010 to US$31.4 million in 2011. If the other income resulting from the “one-time” gain on disposal of ILFS was eliminated, the profit before income tax in 2010 would have been US$23.4 million, and the profit before income tax in 2011 would have represented a 34.2% increase. Income Tax Expense Our income tax expense decreased by 21.1% from US$12.3 million in 2010 to US$9.7 million in 2011. This variance results principally from the higher profit before income tax in 2010 on account of the other income resulting from the “one-time” gain on disposal of ILFS of US$24.5 million and the capital gains tax thereon. Profit for the Year Our profit for the year decreased by 39.3% from US$35.6 million in 2010 to US$21.6 million in 2011. The profit attributable to equity holders of the Company decreased 41.8% from US$26.1 million in 2010 to US$15.2 million in 2011. If the other income resulting from the gain on disposal of ILFS was eliminated, adjusted profit for the year and the profit attributable to equity holders in 2010 would decrease to US$13.3 million (“ Adjusted Profit ”) and US$9.4 million, respectively. Adjusted Profit is a non-IFRS measure. See “ Presentation of Financial and Statistical Information – Non-IFRS Financial Measures ”. Liquidity and Capital Resources Our primary sources of liquidity are the cash flows generated by our operating activities, the funds available under our existing credit facilities, debenture issues and public deposits, which we accept as part of our financial services business. We require liquidity primarily to fund our working capital needs, including our sales on credit and the opening of new stores and to satisfy our debt-service obligations. The principal utilization of cash has been for the payment to suppliers, meeting operating expenses and capital expenditure. As at March 31, 2013, our material unused sources of liquidity amounted to US$75.5 million.

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Cash Flows The table below sets forth our summary combined statement of cash flow information for the periods indicated. Cash Flows Year ended December 31, 2010 2011 2012 US$ million Operating cash flow before working capital changes, interest and tax . . . . . . . . . . . . . Changes in working capital . . . . Interest paid . . . . . . . . . . . . . . . . Tax paid . . . . . . . . . . . . . . . . . . . Net cash (used in)/from operating activities . . . . . . . . . Interest received . . . . . . . . . . . . Acquisition of property, plant, equipment and intangible assets net of proceeds of sale . . Proceeds from sale of investments and non-controlling interests . . . . . . . Net cash from/(used in) investing activities . . . . . . . . . . Change in borrowings . . . . . . . . Distributions to owners and non-controlling shareholders . . . Proceeds from share options exercised . . . . . . . . . . . . . . . . . . Net cash (used in)/from financing activities . . . . . . . . . . Cash and cash equivalents at beginning of period . . . . . . . . . . Effect of exchange rate fluctuations on cash held . . . . . . Cash and cash equivalents at end of period . . . . . . . . . . . . . . Three months ended March 31, 2012 2013

37.2 (28.9) (11.9) (6.6)

46.4 (42.6) (10.9) (10.1)

56.1 (49.1) (16.5) (14.6)

12.5 (17.7) (3.4) (1.9)

13.8 (2.8) (4.9) (0.6)

(10.2) 0.8

(17.2) 1.5

(24.1) 1.1

(10.5) 0.3

5.5 0.3

(2.4)

(4.8)

(8.3)

(1.1)

(1.8)

32.5

4.0

5.3

1.3

1.8

30.9 (3.5) (5.9) 0.3

0.7 16.9 (21.4) –

(1.9) 26.8 (14.4) 0.4

0.5 7.5 (0.9) –

0.3 3.2 (0.9) –

(9.1)

(4.5)

12.8

6.6

2.3

15.0 3.7

30.3 (2.8)

6.5 2.3

6.5 (2.6)

(4.4) 1.4

30.3

6.5

(4.4)

0.5

5.1

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Statement of cash flow information for the three months ended March 31, 2013 During the three-month period ended March 31, 2013, our operating cash flow before working capital changes, interest and tax increased by 10.4% to US$13.8 million as compared to the same period in the prior year. This operating cash flow was partially offset by working capital requirements of US$2.8 million, interest paid of US$4.9 million and tax paid of US$0.6 million resulting in net cash generated from operating activities of US$5.5 million. The increase in working capital during the three-month period ended March 31, 2013 was US$2.8 million, which was substantially lower than the working capital requirement of US$17.7 million for the corresponding period in 2012 as a greater portion of the inventory in the 2013 period was funded by trade payables. Interest paid in the three months ended March 31, 2013 was US$4.9 million, an increase of 44.1% compared to the corresponding period in 2012. Interest paid increased partially on account of larger borrowings, but mainly due to higher interest rates, particularly in Sri Lanka. Total interest bearing borrowings as at March 31, 2013 was US$140.8 million compared to US$119.6 million as at March 31, 2012, an increase of 17.7%. During the three months ended March 31, 2013, we acquired property, plant and equipment, net of proceeds of sales, of US$1.8 million mainly reflecting the investment in new stores and depots and store renovations. We reduced our equity interest in Singer Thailand from 41.1% to 40.0% which resulted in a cash inflow of US$1.8 million. A net amount of US$0.3 million was generated from investing activities. A total of US$0.9 million was paid as dividends to non-controlling shareholders during the three-month period ended March 31, 2012 and March 31, 2013. Statement of cash flow information for the year ended December 31, 2012 During 2012, our operating cash flow before working capital changes, interest and tax increased as compared to the prior year by 20.9% from US$46.4 million to US$56.1 million. This operating cash flow was more than offset by higher working capital requirements, in particular increased trade and other receivables of US$31.9 million and inventories of US$19.0 million. Trade and other receivables increased by 16.0% from US$154.0 million in 2011 to US$178.6 million in 2012 on account of the increase in credit sales. Inventories increased by 21.4% from US$71.9 million in 2011 to US$87.3 million in 2012 as new third-party brand distribution agreements were entered into, requiring some initial additional investment in inventory. Interest paid in 2012 was US$16.5 million, an increase of 51.4%. Interest paid increased partially on account of larger borrowings, but mainly due to higher interest rates in Sri Lanka and to a lesser extent in Bangladesh. Overall, a net amount of US$24.1 million was used in operating activities, an increase of 40.1% on 2011. In 2012, we acquired property, plant and equipment, net of proceeds of sales, of US$7.3 million, while US$1.0 million was invested in computer software. We reduced our interest in Singer Thailand from 45.5% to 41.1% effected through sales on The Stock Exchange of Thailand which resulted in a cash inflow of US$5.3 million. A net amount of US$1.9 million was used in investing activities. A total of US$14.4 million was distributed to owners of the Company and non-controlling shareholders during the year. Loans and borrowings increased by US$19.7 million to US$118.5 million.

109

Statement of cash flow information for the year ended December 31, 2011 During 2011, our operating cash flow before working capital changes, interest and tax increased by 24.7% from US$37.2 million in 2010 to US$46.4 million in 2011. This operating cash flow was more than offset by higher working capital requirements, in particular increased trade and other receivables of US$34.6 million and inventories of US$21.5 million. Trade and other receivables increased by 23.1% from US$125.1 million in 2010 to US$154.0 million in 2011 on account of an increase in credit sales. Inventories increased by 31.0% from US$54.9 million in 2010 to US$71.9 million in 2011. The additional inventory on hand at December 31, 2011 was on account of the early Chinese New Year holidays in February 2012 and the resultant necessity to purchase stocks earlier, before the supplier factories in China closed for the New Year holiday. Interest paid in 2011 was US$10.9 million which was 8.4% lower than in 2010. Interest rates in 2011 were relatively stable. Overall, a net amount of US$17.2 million was used in operating activities, an increase of 68.6% over 2010. In 2011, we acquired property, plant and equipment, net of proceeds from sales, of US$4.8 million. We reduced our interest in Singer Thailand from 48.5% to 45.5% effected through sales on The Stock Exchange of Thailand, which resulted in a cash inflow of US$4.0 million. Interest received was US$1.5 million in 2011. This was 87.5% higher than 2010 due to the receipt of the sale proceeds following the disposal of our affiliate company in Bangladesh, ILFS. A net amount of US$0.7 million was generated from investing activities. A total of US$21.4 million was distributed to owners of the company and non-controlling shareholders during the year. Loans and borrowings increased by US$14.2 million to US$98.8 million. Statement of cash flows information for the year ended December 31, 2010 During 2010, our operating cash flow before working capital changes, interest and tax was US$37.2 million. This operating cash flow was offset by higher working capital requirements, in particular, increased trade and other receivables of US$14.8 million and inventories of US$9.5 million. Interest paid in 2010 was US$11.9 million. Overall, a net amount of US$10.2 million was used in operating activities. In 2010, we acquired property, plant and equipment, net of proceeds from sales, of US$2.4 million. During the year, the affiliate in Bangladesh, ILFS, was sold for US$31.9 million, and as a result a net amount of US$30.9 million was generated from investing activities. A total of US$5.9 million was distributed to owners of the Company and non-controlling shareholders during the year. Loans and borrowings increased by US$0.8 million to US$84.6 million.

110

Working Capital The table below sets forth the key components of working capital at the dates indicated. Working Capital As at December 31, 2010 2011 2012 US$ million Inventories . . . . . . . . . . . . . . . . Trade and other receivables . . . Trade payables . . . . . . . . . . . . . Other payables . . . . . . . . . . . . . Net working capital . . . . . . . . . . Inventory turnover (times) . . . . . Trade payables days outstanding . . . . . . . . . . . . . . . .
Note: (1) Trade payable days increased between December 31, 2012 and March 31, 2013 primarily because of an increase in inventory in Sri Lanka and Thailand. The Sri Lankan New Year festival was in March and April 2013 and the Thai New Year festival was in April 2013. There was a build up of inventory in anticipation of these festivals, with inventory in Sri Lanka and Thailand having increased by US$8.3 million and US$3.9 million, respectively, as at March 31, 2013 compared to December 31, 2012.

As at March 31, 2012 2013

54.9 125.1 14.3 23.4 142.3 3.7 25.4

71.9 154.0 20.5 28.7 176.7 3.5 29.6

87.3 178.6 18.9 27.6 219.4 3.1 25.6

79.2 156.4 21.7 29.0 184.9 3.3 30.5

93.6 188.8 31.7 29.5 221.2 2.9 42.3 (1)

Inventory turnover is calculated by dividing cost of sales for the immediately preceding 12 months by the inventory balance. Trade payables days are calculated by dividing trade payables by cost of sales and then multiplying by 365 days. Net working capital increased 24.2% in 2011, 24.2% in 2012 and 0.8% as at March 31, 2013. During this period, the inventory turnover has declined from 3.7 times to 2.9 times, this additional inventory relates primarily to new third-party brands and new categories that have been added to the product portfolio. Over time, sales of these new brands and categories will increase thereby reducing the inventory turnover level. Borrowings As at March 31, 2013, our total combined short-term debt was US$100.5 million and our total combined long-term debt was US$40.3 million.

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Our total financial debt includes both fixed-rate and variable-rate debt. A breakdown of our borrowings by fixed-rate and variable-rate debt as at March 31, 2013 is as follows: Interest Rates As at March 31, 2013 Fixed Variable Total % of total

US million Secured bank loans . . . . . . . . . . . . . . . . Unsecured bank loans . . . . . . . . . . . . . . Unsecured debentures . . . . . . . . . . . . . . Promissory notes . . . . . . . . . . . . . . . . . . Public deposits . . . . . . . . . . . . . . . . . . . . Finance lease liabilities . . . . . . . . . . . . . Bank overdraft . . . . . . . . . . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . % Total . . . . . . . . . . . . . . . . . . . . . . . . . – 30.5 36.8 15.0 25.1 – 5.0 112.4 80% 8.4 2.9 3.5 – – 0.3 13.3 28.4 20% 8.4 33.4 40.3 15.0 25.1 0.3 18.3 140.8 100% 6.0% 23.7% 28.6% 10.7% 17.8% 0.2% 13.0% 100.0%

As at March 31, 2013, none of our debt was denominated in U.S. dollars, while 71.0% was in Sri Lankan rupees, 0.1% in Bangladeshi takas, 9.1% in Pakistani rupees and 19.8% in Thai baht. As at March 31, 2013, we had the following borrowings by maturity: Borrowings As at March 31, 2013 Due within 12 months Due in more than 12 months

Total

% of total

US$ million Secured bank loans . . . . . . . . . . . . . . . . Unsecured bank loans . . . . . . . . . . . . . . Unsecured debentures . . . . . . . . . . . . . . Promissory notes . . . . . . . . . . . . . . . . . . Public deposits . . . . . . . . . . . . . . . . . . . . Finance lease liabilities . . . . . . . . . . . . . Bank overdraft . . . . . . . . . . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . % Total . . . . . . . . . . . . . . . . . . . . . . . . . 5.2 33.4 8.8 15.0 19.7 0.1 18.3 100.5 71.4% 3.2 – 31.5 – 5.4 0.2 – 40.3 28.6% 8.4 33.4 40.3 15.0 25.1 0.3 18.3 140.8 100% 6.0% 23.7% 28.6% 10.7% 17.8% 0.2% 13.0% 100.0%

The majority of the borrowings amounting to US$100.5 million (or 71.4%) of the total are due prior to March 31, 2014. Fixed rate long-term borrowings are not always readily available at attractive interest rates. The vast majority of the public deposits are in Singer Finance (Lanka) PLC, with only US$5,000 of the public deposits in Singer India. Singer Finance (Lanka) PLC accepts cash

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from depositors and classifies these deposits under “loans and borrowings” in its financial statements. In our financial statements, these deposits are also classify under “loans and borrowings”. The borrowings are denominated in the following currencies: Borrowings in Local Currencies At March 31, 2013 Sri Lankan Bangladeshi Rupee Taka Pakistani Rupee US$ million Secured bank loans. . . . . . . Unsecured bank loans . . . . . Unsecured debentures . . . . Promissory notes . . . . . . . . . Public deposits . . . . . . . . . . Finance lease liabilities . . . . Bank overdraft . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . % Total . . . . . . . . . . . . . . . . 6.3 31.7 14.7 15.0 25.1 – 7.1 99.9 71.0% – – – – – – 0.2 0.2 0.1% 2.1 – – – – 0.3 10.4 12.8 9.1% – – – – 0.0 – – 0.0 0.0% – 1.7 25.6 – – – 0.6 27.9 19.8% 8.4 33.4 40.3 15.0 25.1 0.3 18.3 140.8 100.0% Indian Rupee Thai Baht

Total

Our policy is to borrow money to fund the operations of our subsidiary businesses in the local currency of the respective countries. We have no U.S. dollar-denominated borrowings. Of the total borrowings of US$140.8 million, 71.0% (or US$99.9 million) is denominated in Sri Lankan rupees. US$7.1 million of these borrowings are secured by property, plant and equipment and US$8.3 million are secured by receivables. Capital Expenditures and Capital Investments Capital Expenditures and Capital Investments Three months ended March 31, April 1, 2013 to the Latest Practicable Date

Year ended December 31, 2010 Land, buildings, leasehold improvements, fixtures and fittings. . . . . . . . . . . . . . . . . Plant and equipment . . . . . Computer software . . . . . . . Total . . . . . . . . . . . . . . . . . . 2011

2012 2013 US$ in millions

0.9 1.4 0.6 2.9

2.5 2.6 – 5.1

4.2 2.7 1.8 8.7

1.3 1.2 – 2.5

1.2 1.8 0.5 3.5

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Historical Capital Expenditures April 1, 2013 to the Latest Practicable Date For the period between April 1, 2013 to the Latest Practicable Date, our capital expenditure of US$3.5 million was primarily incurred on opening new stores and renovating existing stores. Three-month period ended March 31, 2013 For the three-month period ended March 31, 2013, our capital expenditure of US$2.5 million was primarily incurred for the opening of 29 stores and depots and renovation of 57 stores. Year ended December 31, 2012 For the year ended December 31, 2012, our capital expenditure of US$8.7 million was primarily incurred for the opening of 80 stores and depots and renovation of 89 stores, and purchase of computer equipment and software. Year ended December 31, 2011 For the year ended December 31, 2011, our capital expenditure of US$5.1 million was incurred primarily for the opening of 50 stores and depots and the renovation of 98 stores, the renovation of our Singer Sri Lanka’s corporate headquarters in Colombo, Sri Lanka and the opening of Regnis Appliance (Private) Limited incorporating our washing machine factory in Panadura, Sri Lanka following a change in tax laws and a subsequent tax incentive to assemble washing machines in Sri Lanka. Year ended December 31, 2010 For the year ended December 31, 2010, our capital expenditure of US$2.9 million was incurred primarily for factory equipment for our factory in Regnis Appliance (Private) Limited, the opening of 28 stores and depots and renovation of 36 stores. Planned Capital Expenditures We currently expect to incur capital expenditures for the nine months ending December 31, 2013 and the year ending December 31, 2014, as set out in the table below. Planned Capital Expenditures Nine months ended December 31, 2013 Year ended December 31, 2014

US$ million Land, buildings, leasehold improvements . . . . . . . . . . . Plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.6 4.7 9.3 6.0 6.0 12.0

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Planned Capital Expenditures Nine months ended December 31, 2013 Year ended December 31, 2014

US$ million Sri Lanka . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Bangladesh . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pakistan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Thailand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.7 1.3 0.6 0.2 2.5 9.3 5.7 1.0 1.2 2.9 1.2 12.0

The planned capital expenditures primarily relate to our strategy to expand and enhance our distribution platform (see “ Business – Strategies ”), and also relate to further enhancements to our information technology systems and our manufacturing capacity. We expect to fund the above-planned capital expenditures through our internal cash flows and external borrowings as well as the net proceeds from the Offering (see “ Use of Proceeds ”). Our actual capital expenditures may differ from the amounts set out above due to various factors, including our future cash flows, results of operations and financial condition, changes in the economies of Sri Lanka, Bangladesh, Pakistan, India and Thailand, the availability of financing on terms acceptable to us, problems in relation to possible construction/development delays of our stores and factories, delays in obtaining or receipt of governmental approval, changes in the legislative and regulatory environment and other factors that are beyond our control. Contractual Obligations and Commitments As at December 31, 2012, we did not have any material capital commitments other than to acquire software amounting to US$0.3 million. As at the Latest Practicable Date, we did not have any material capital commitments. As at December 31, 2012, we had contractual obligations of US$4.4 million in respect of non-cancellable operating lease rentals of which US$1.9 million were due within 12 months and the balance of US$2.5 million between one and five years.

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The following table summarizes our significant contractual obligations and commitments as December 31, 2012: Contractual Obligations and Commitments Payments due by period US$ million Within one year Long-term debt obligations (1) . . . . . . Short-term debt obligations (1) . . . . . . Lease obligations . . Total . . . . . . . . . . . .
Note: (1) Long-term and short-term debt obligations include all loans and borrowings as presented in the financial statements, i.e., bank loans, bank overdraft, debentures, promissory notes, public deposits and finance leases. It also includes operating lease commitments.

1 to < 3 years

3 to < 5 years

Ն5 years

Total

Interest

– 103.8 1.9 105.7

29.3 − 2.4 31.7

7.9 − 0.1 8.0

− − − −

37.2 103.8 4.4 145.4

8.3 5.3 − 13.6

Our Company also has ongoing purchase commitments for inventory which are made in the normal course of business. We plan to fund these contractual commitments through our internal cash flows and external borrowings. Order Book Due to the nature of our business, we do not maintain an order book. Off-Balance Sheet Arrangements and Contingent Liabilities We have no off-balance sheet arrangements or contingent liabilities, save as in relation to a legal action brought against Singer Pakistan Limited by two of its directors in November 2012 relating to Singer Pakistan’s decision to organize a rights issue. See “ Business – Legal Proceedings – Singer Pakistan ”. The matter is now at the hearing stage and the proceedings before the High Court are pending. We do not view this matter as material. Hedging Arrangements Our policy is to borrow money to fund the operations of our subsidiary businesses in the local currency of the respective countries. We do not currently hedge against foreign currency risk arising from payments in U.S. dollars to our international third-party suppliers, most of which are short-term (less than 90 days) in nature. Our policy is to monitor our foreign currency exposure regularly and assess if the foreign currency exposure should be hedged against. Financial Risk Management We are exposed to financial risks arising from our operations and the use of financial instruments. The key financial risks include market risk, liquidity risk and credit risk. The following sections provide details regarding our exposure to the above-mentioned risks and the objectives, policies and processes for the management of these risks.

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Market Risk Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates will affect our income. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return. Interest Rate Risk We manage interest rate risk on borrowings by using a combination of fixed and floating interest rates. With all other variables held constant, a hundred basis points increase (decrease) in interest rates would decrease (increase) our profit after income tax by approximately US$2.4 million arising mainly as a result of higher (lower) interest expense on our net floating borrowing position. Foreign Exchange Risk We are exposed to currency risk on purchases that are denominated in a currency other than the respective functional currencies of our entities. The currency in which these transactions primarily are denominated is the U.S. dollar. The currency risk is limited by the short-term nature of the period between the dates of the purchase and the settlements of the related liability. Liquidity Risk Liquidity risk is the risk we encounter if we have difficulty in meeting the obligations associated with our financial liabilities that are settled by delivering cash or another financial asset. Our approach to managing liquidity is to ensure, as far as possible, that we will always have sufficient liquidity to meet our liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to our reputation. Credit Risk Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on its obligations. Our exposure to credit risk arises primarily from trade and other receivables. For other financial assets (including cash and bank balances), we minimize credit risk by dealing exclusively with high credit rating counterparties. Exposure to credit risk At the end of the reporting date, our maximum exposure to credit risk is represented by the carrying amount of each class of financial assets recognized in the combined statement of financial position. Trend Information Our revenue growth, geographic revenue mix, gross margin percentage and selling and administrative expenses as a percentage of revenue in the three months ended June 30, 2013 are expected to be similar to that of the three months ended March 31, 2013. Net finance costs in the three months ended June 30, 2013 are expected to increase compared to that of the three months ended March 31, 2013, because of generally higher interest rates and an increase in amount of borrowings used to fund revenue growth and the resultant rise in installment receivables.

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The income tax expense in the three months ended June 30, 2013 is expected to be higher than that of the three months ended March 31, 2013 as the one-time deferred tax credit during the three months ended March 31, 2013 is not expected to recur in the three months ended June 30, 2013. The installment receivable portfolio as at June 30, 2013 is expected to increase compared to March 31, 2013 in line with the revenue growth. The arrears percentage and paying percentage as at June 30, 2013 remains stable compared to March 31, 2013. Inventory as at June 30, 2013 is expected to reduce compared to March 31, 2013 in accordance with seasonal trends. During the three months ended June 30, 2013, we remain on track with our new store opening and store renovation program. Barring unforeseen circumstances and save as discussed below, these trends are expected to continue for the remainder of 2013. Since March 31, 2013, there has been a material deterioration of the India Rupee against the U.S. dollar. The Thai Baht, Pakistan Rupee and Sri Lanka Rupee have also declined in value against the U.S. dollar. The table below sets out the exchange rate between the relevant local currency per one U.S. dollar as at March 31, 2013, June 30, 2013 and as at the Latest Practicable Date of September 13, 2013. Closing exchange rate for the U.S. Dollar to: Sri Lanka Rupee Bangladeshi Taka Pakistan Rupee India Rupee Thai Bhat March 31, 2013 126.7 78.2 98.4 54.3 29.3 June 30, 2013 130.6 77.8 99.6 59.5 31.1 September 13, 2013 132.2 76.1 103.3 63.4 31.7

If the local currencies in which we conduct our business and/or report our financial results, in the various countries where we have operations, deteriorate or continue to further deteriorate against the U.S. dollar, this will materially and adversely affect our business, financial condition and results of operations. Except as disclosed in this offering document and barring any unforeseen circumstances, our Directors are not aware of any known trends, uncertainties, demands, commitments or events that are reasonably likely to have a material and adverse effect on our revenue, profitability, liquidity or capital resources, or that would cause our financial information disclosed in this offering document to be not necessarily indicative of our future operating results or financial condition.

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CORPORATE STRUCTURE AND OWNERSHIP
Corporate Structure We were incorporated in the Cayman Islands on May 24, 2013 as “Sewko”. For information regarding our subsidiaries and jointly controlled entities, see “ Appendix B – Our Subsidiaries, Associated Companies and Joint Venture Entities ”. As at the Latest Practicable Date, we have 29 subsidiaries; the details of our group structure are as follows:
Sewko Holdings Limited (Cayman Islands) 100% Singer Asia Limited (Cayman Islands) 100%

LEGEND Company Name (place of incorporation)

Singer Asia Holdings N.V. (Curaçao) 100%

Singer Asean Trading Limited (B.V.I.)

Singer Corporation Limited (Hong Kong)

Btindia Limited (B.V.I.) 100% Brand Trading (India) Private Limited(3) (India)

Singer Asia Finance B.V. (Curaçao)

Singer Asia Holdings B.V. (Netherlands) 100%

Singer Bhold B.V. (Netherlands) 74.99% Singer Bangladesh Ltd.(1) (Bangladesh)

Singer (Thailand) B.V. (Netherlands) 40% Singer Thailand Public Co. Ltd.(1) (Thailand)

ThaiInvest B.V. (Netherlands)

Singer (India) B.V. (Netherlands) 75%

Singer (Pakistan) B.V. (Netherlands) 70.28%

Singer (Sri Lanka) B.V. (Netherlands)

Singer Pakistan Ltd.(1) (Pakistan) Singer India Limited(1) (India)

Singer Leasing 99.9996% (Thailand) Co., Limited (Thailand)

40% 100% Himec India Limited(4) (India) 100% Singer India Trading Limited(4) (India) Meritec India Limited (India)

83.55% Singer Industries (Ceylon) PLC(1) (Sri Lanka)

86.11% Singer (Sri Lanka) PLC(1) (Sri Lanka)

58.29%

Singer (Broker) Limited (Thailand)

99.7%

Regnis (Lanka) PLC(1) (Sri Lanka)

Singer Service Plus Co., Limited (Thailand)

100% 99.88% 45% 23.60% 80.40% 40% 15%

Telshan Network (Private) Limited(2) (Sri Lanka)

Singer Finance (Lanka) PLC(1) (Sri Lanka)

Reality Lanka Ltd. (Sri Lanka)

Regnis Appliances (Pvt) Ltd. (Sri Lanka)

Notes: (1) (2) (3) (4) This entity is listed on a stock exchange in its respective country. The remaining 76.4% ownership in Telshan Network (Pvt) Ltd is held by 11 third-parties. One (1) share in Brand Trading (India) Private Limited or 0.0001% is held by ThaiInvest B.V. (Netherlands). In voluntary liquidation.

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BUSINESS
Overview We are the largest retailer of HCD products in Sri Lanka, Bangladesh and Pakistan, 1 with 922 stores and 2,105 independent dealers across Sri Lanka, Bangladesh, Pakistan and India, as at March 31, 2013. In Thailand, we operate a direct selling business with 211 direct selling depots and 2,724 sales canvassers, as at March 31, 2013. Since the SINGER ® brand was first established in 1851 with the creation of the Singer company, we have evolved into one of the most recognized HCD retail brand names in South Asia offering our customers a wide range of HCDs, including home appliances, consumer electronics, IT products, furniture and sewing machines, substantially all of which can be purchased through consumer credit which we provide. Our brand offering includes both house brands as well as widely recognized third-party brands including Apple, Beko, Dawlance, Godrej, Grundig, Haier, Hitachi, Huawei, Onida, Philips, Prestige, Samsung, Skyworth, TCL, Tefal, Videocon and Whirlpool, some of which are under exclusive distribution arrangements. We have operated in each of our markets for over 100 years. We are the leading provider of HCD consumer credit in Sri Lanka, Bangladesh and Pakistan, 2 where consumer credit is often expensive and difficult to obtain. We offer a wide variety of credit products, including hire purchase, leasing facilities, and group sales (offered by partnering with organizations to provide easy payment terms to their employees for purchases of our products). As at March 31, 2013, we managed 679,895 active credit accounts, with total accounts receivable of US$218.5 million. In addition, we provide transaction-based financial services such as bill payments, inward remittances, mobile phone reloads and acceptance of public deposits as well as extended warranties and customer protection plans. In 2012, we processed on average nearly one million consumer finance and financial services transactions per month. We believe that through our long-term presence in the region, we have established a strong brand identity that our customers associate with trust, quality and consumer finance. Our ability to provide customers a complementary mix of products, services and brands, including consumer finance to purchase these products, through our extensive distribution network, and high quality customer service, has enabled us to realize meaningful synergies and grow our Company successfully. During the period from 2010 to 2012, we have increased our retail store base by 97 stores to 909 stores, our independent dealer network by over 600 independent dealers and the number of direct selling depots by 17. Our revenue totaled US$326.3 million in 2010, US$406.7 million in 2011 and US$435.9 million in 2012, representing a CAGR of 15.6% from 2010 to 2012. Our Adjusted EBITDA totaled US$37.2 million in 2010, US$46.5 million in 2011 and US$56.2 million in 2012, representing a CAGR of 22.9% from 2010 to 2012. Our Adjusted Profit totaled US$13.3 million in 2010, US$21.6 million in 2011 and US$26.5 million in 2012. We believe that our core markets of Sri Lanka, Bangladesh, Pakistan, India and Thailand will continue to offer attractive opportunities for growth based on their strong economic and demographic prospects and relatively undeveloped and fragmented markets for HCDs and consumer credit. We intend to grow our business and increase profitability by expanding and enhancing our distribution platform, introducing new brands and products, expanding our consumer credit and financial services offerings, increasing our online presence and penetrating additional markets, such as the ASEAN countries of Myanmar, Cambodia and Laos.

1 2

Source: The Nielsen Company. Source: The Nielsen Company.

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Competitive Strengths We believe that we are well positioned to maintain our leadership in the HCD and consumer finance markets in South Asia and deliver growth as a result of the following competitive strengths. Extensive multi-channel retail and wholesale distribution platform We are the largest retailer of HCD products in Sri Lanka, Bangladesh and Pakistan, 1 with 922 stores and 2,105 independent dealers across Sri Lanka, Bangladesh, Pakistan and India. In Thailand, we operate a direct selling business with 211 direct selling depots and 2,724 sales canvassers, as at March 31, 2013. Our extensive network services metropolitan, urban and rural areas, providing customers with wide access to products and services. In addition, our multi-format retail stores cater to evolving customer preferences and local market conditions. Our distribution network is supported by a highly experienced and professional sales force of store managers with 2,422 store staff and 2,724 canvassers, as at March 31, 2013. In addition, our online retail portal has begun to tap into the nascent but growing online retail market. We believe our multi-channel distribution strategy allows for effective market penetration by matching customer segments with corresponding product and credit needs while also providing a platform and resources for future growth in our countries of operations. Through our extensive distribution network, we offer a wide range of HCD products, comprising home appliances, consumer electronics, IT products, furniture, sewing machines and other products. In addition to the SINGER ® and other house brands, we offer a broad range of widely recognized third-party brands, including Apple, Beko, Dawlance, Godrej, Grundig, Haier, Hitachi, Huawei, Onida, Philips, Prestige, Samsung, Skyworth, TCL, Tefal, Videocon and Whirlpool, some of which are under exclusive distribution arrangements. We believe that our strong market position in the HCD retail industry in South Asia has enhanced our ability to negotiate better prices and product offerings with our suppliers. We believe that the third-party brands we offer increase our brand image as a retailer and provide our customers with a wider selection. We also offer customers house-branded products, some of which we manufacture or assemble domestically where there are local efficiencies or tax and duty incentives. We believe our mix of house and third-party brands allows us to significantly improve both the value proposition we provide our customers and our margins compared to retailers that offer only third-party brands. Internationally recognized and domestically established SINGER ® brand Our SINGER ® brand was first established in 1851 with the creation of the Singer company, the internationally recognized sewing machine brand, and has evolved into one of the most recognized HCD retail brand names in South Asia. We have focused on selling high quality house brand and third-party products, providing credit to finance the purchase of these products and closely interacting with and providing service to our customer base to develop a widely recognized brand, as evidenced by the numerous accolades and awards we have received, including recognition as the “Most Popular Brand in Sri Lanka ” every year since 2005. We believe that we have established a strong brand identity that our customers associate with trust, quality and consumer finance. We believe these positive, emotional tie-ins result from our long-term presence in the regions in which we operate, the high quality of our HCD products, the wide range of consumer finance products that make our HCDs accessible to a broad base of consumers, our high quality after-sales customer service and our commitment to improving the local communities where we operate. We believe we will continue to benefit from this market position as the established brand loyalty of consumers to incumbent players, the high start-up costs for new entrants and low bargaining power of less established retailers pose significant barriers to entry for potential entrants in our countries of operations.
1

Source: The Nielsen Company.

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We have a perpetual exclusive license to use and sub-license the SINGER ® brand and trademark in all countries in the Asia Pacific region (excluding Japan and Korea), except for sewing-related products and ironing presses for which we have a perpetual distribution agreement. This will ensure that we hold the exclusive right to the use of our brand in our current countries of operations, while providing us the opportunity to expand into other Asian markets. We will continue to maximize our internationally recognized and domestically established SINGER ® brand in order to cross-sell our various products and services, penetrate new markets and segments and grow our customer base and customer loyalty. Integrated consumer credit and financial services operations with strong credit control We are the leading provider of HCD consumer credit in Sri Lanka, Bangladesh and Pakistan, 1 where consumer credit is often expensive and difficult to obtain. Beginning in 1856, the Singer company pioneered the use of installment payment plans to enable customers to afford and immediately purchase a sewing machine. We continue to provide our customers with installment and other credit services, thus maintaining a long tradition of enabling our customers to have access to HCD products. We offer a wide variety of credit products, including hire purchase and group sales for substantially all of our HCD products. In addition, we provide leasing facilities, transaction-based financial services such as bill payments, remittances from abroad, mobile phone reloads and acceptance of public deposits, among others, as well as extended warranties and customer protection plans. In 2012, we processed an average of nearly one million consumer finance and financial services transactions each month. We are introducing additional financial products such as Singer credit cards, mobile wallets and branchless banking. We believe that these new credit products will allow us to continue to serve our customers over time as consumer credit needs develop and evolve. We operate in emerging markets, where disposable income levels, while increasing, remain lower than those in more developed markets. Our target markets’ financing needs have typically been underserved by the traditional financial sector; most of our customers do not have access to readily-available capital for upfront payment for products. Since our establishment, we have been developing the necessary market knowledge and logistics network to service the credit needs of multiple segments of the population in our countries of operations. As at March 31, 2013, we managed a total of 679,895 active credit accounts with total accounts receivable of US$218.5 million. Our comprehensive credit control system monitors receivables performance on a real-time basis, which has resulted in a relatively low level of credit write-offs and non-performing loans in the context of the countries in which we operate. Combined with our in-depth knowledge of the retail industry, we believe that our extensive experience with risk management and consumer financing represents a competitive advantage that we have and will continue to enhance through our future and expanded consumer finance services and products offering. Highly experienced management team with proven track record backed by highly motivated and trained staff We are led by an executive management team with extensive operational and management experience in the HCD retail and consumer finance industries, which has successfully increased our revenue and profits, delivering growth even during economic downturns such as the recent global financial crisis and Eurozone debt crisis. The key members of the executive management team, which include our Group management team and each country’s key managers, have an average experience level of 22 years managing HCD retail and providing consumer finance services to our customers. They have a deep understanding of regional and local markets, suppliers, competitors and customers. Our executive management team, whose average age is 50 years, have worked with us for an average of 18 years each. They have built a solid platform

1

Source: The Nielsen Company.

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for growth through implementing a wide range of changes since 2005, including the creation of the Singer Information System, enhancing the credit control mechanisms, increasing third-party brands and introducing new products and service lines. Our executive management team is supported by a motivated and trained network of staff, ranging from our branch managers to our store staff and canvassers across the five countries where we operate. Our “Singer” culture, which we actively promote, and our extensive incentive schemes work together to enhance performance. We monitor our employees’ performance based on criteria such as sales, collections, merchandising, inventory management, daily cash management, store administration and staff morale. In addition, substantially all of our employees undergo training through the Singer Retail Academy (“ SRA ”), a program that seeks to train, motivate and develop our employees. Further, to drive and reward operational excellence, in 2006, we introduced “The Star Performer” award and monthly newsletter recognizing the management with the best trading performance. We believe that the “Singer” culture of awarding operational performance and the training provided to our employees have led to an increase in sales, better collection rates and an improvement in the quality of the customer service experience we provide. High quality customer service We emphasize building long-term sustainable relationships with our customers, and we view high quality customer service as a key differentiating factor from our competitors in the HCD retail and consumer finance markets. The quality of after-sales services is particularly important for our consumer finance operations, as collections can be severely impacted if products are no longer operational or are not repaired promptly. Our customer service is supported by call centers in each country and a widespread network of 1,133 sales outlets, 33 service centers and 871 customer service agents, as at March 31, 2013. Our call centers assist customers during the sales and credit process, make outbound and inbound marketing calls and provide information relating to our HCD and consumer finance products and services. Our sales outlets, service centers and franchise service agents provide in-person assistance relating to the use of our HCD products. We also rely on customer house visits by our canvassers following a direct sale. We conduct regular product clinics in select outlets on a rotational basis, whereby experienced service agents answer customer queries, offer advice on SINGER ® and third-party brand products and provide free servicing and repairs. Store managers and staff undergo product knowledge training by the SRA, which we believe is essential to ensure sales employees can properly explain the features of the products we offer. Our dedication to high quality customer service has been critical to the selling of additional HCD products and cross-selling of consumer finance products, such as extended warranties. Further, we believe that companies manufacturing third-party brands have entered into distribution agreements with us in part due to the quality of our customer service. We continuously seek to improve our overall customer experience and improve operational efficiency and customer loyalty. Fully-integrated, advanced online IT system We have developed and currently operate a fully-integrated, advanced online ERP system, a tailored software system that, among other things, provides us with real-time business information including sales, inventory levels and data relating to our consumer finance operations. The Singer Information System allows us to increase operational efficiency and reduce costs across our distribution network and in our consumer finance business. In particular, our Singer Information System has allowed us to manage information in such a way as to increase the likelihood that we can offer the products the customer wants to purchase while optimizing the associated inventory levels. The Singer Information System also offers a sophisticated management platform for our consumer finance operations that integrates our numerous customer accounts, their credit portfolios and installment plans and customer payment profiles.

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Strategies Our strategic goal is to continue to strengthen our leading position in the HCD retail and consumer finance industries in our core markets of Sri Lanka, Bangladesh, Pakistan, India and Thailand by providing a diversified range of products and services aimed at satisfying our customers’ needs. At the same time, we intend to expand our operations into certain high growth ASEAN countries. In order to achieve these goals, we have developed a growth strategy with the following key elements. Expand and enhance our distribution platform From December 31, 2010 to December 31, 2012, we increased our retail store base by 97 stores, our independent dealer network by over 600 independent dealers and our direct selling depots by 17. Over the period from January 1, 2013 to December 31, 2014, we intend to grow our retail store base by a further approximately 130 stores, add approximately 400 independent dealers and approximately 20 direct selling depots. These additional stores, dealers and depots will be located in areas with high growth potential, focusing particularly on the fast developing rural populations that are currently underserved by us and our competitors. Our historical and projected distribution platform growth is represented in the chart below:

Number of retail stores and direct selling depots

1,500

3,000

1,200

2,400 Number of independent dealers

900

1,800

600

1,200

300

600

-

FY2010 183 812 1,797

FY2011 187 850 2,211

FY2012 200 909 2,435

FY2013 210 969 2,690

FY2014 220 1,039 2,835

-

Direct selling depots Retail stores Independent dealers

We also plan to enhance our existing retail network by renovating older stores, enlarging the retail space within our existing stores and relocating stores to more suitable locations as appropriate. The growth potential of renovated stores is enhanced as customers are afforded a more modern, professional and exciting shopping environment. The larger renovated stores are also able to display a greater range of HCDs and brands. Our policy is to complete a major store renovation at least every six years with lower cost upgrades every two years. From 2010 to 2012, we renovated 187 stores. Over the period from January 1, 2013 to December 31, 2014, we intend to renovate or relocate approximately 220 stores.

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Introduce new brands and products We believe it is critical for us to continually review, tailor and enhance our product offerings in response to evolving customer preferences and new opportunities that arise. We plan to continue to take advantage of our extensive distribution platform, established and trusted retail brand, consumer credit operations, strong customer service and after-sales support and manufacturing and assembly capabilities to offer new house-branded and third-party branded products on an ongoing basis. We currently provide a wide range of third-party brands which we will continue to expand in the future. In 2012, we entered into a distribution agreement with Huawei, which is one of the largest telecommunications equipment manufacturers and one of the largest smart phone producers in the world, for the sale of smart phones and tablets in Sri Lanka and Bangladesh. We have also recently started selling Apple products in our stores in Sri Lanka and Bangladesh. These IT products do not require significant additional selling space. We believe this will attract new customers into our stores. IT products comprised 5.8% of total sales for the three months ended March 31, 2013, but we believe this percentage could increase significantly over the period from January 1, 2013 to December 31, 2014. We also entered into distribution agreements with the highly recognized Indian brands Godrej, Onida and Videocon and the European brands Beko and Grundig in 2012 and the first quarter of 2013; these have been very well received by our customer base. In addition to third-party brands, we intend to continue to expand the range of house-brand products as new designs and models become available. Building on the success of our furniture business under Singer Homes in Sri Lanka, we have begun to sell furniture in Bangladesh, mostly sourced from our own factories or local vendors. We intend to begin to sell furniture in Pakistan in the second half of 2013. We believe furniture provides opportunities for higher gross margins and increased credit earnings while allowing for lower service and with inherent lower credit risk. We intend to utilize the Singer Homes retail format and provide installment credit for the purchase of furniture, which is not widely available in Bangladesh and Pakistan. We expect the product contribution of furniture to increase significantly from the 2.7% of total sales that it represented for the three months ended March 31, 2013. Expand our consumer credit and financial services operations We intend to make our products more affordable to our customers by extending the average term of our hire purchase offerings, thereby lowering the monthly installments. We expect that this will allow our sales staff the opportunity to sell higher value products to existing customers while also enticing new customers into our stores. Further, the longer credit term of our installment plans should increase the total finance charge income. We have also introduced additional collection incentives to our branch staff to encourage the growth of well managed credit portfolios. In the financial services business, we intend to expand our bill payment services, remittance business, mobile phone reload and branchless banking. In particular, we plan to introduce a Singer credit card in Sri Lanka via our finance company Singer Finance (Lanka) PLC to our existing hire purchase customer base. In addition to an increase in revenue, we believe that by providing a growing variety of financial products and services, we will increase our store footfall by attracting new customers and encouraging repeat visits by our existing customers. We expect that this will allow more customers the opportunity to view the range of our HCD products and experience our Singer customer service. We believe that these new credit and financial service products will position us to continue to serve our customers over time as consumer credit needs develop and evolve in our markets.

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Penetrate additional markets in the ASEAN region We believe that in addition to the countries where we currently operate, we are well positioned to take advantage of new opportunities in other countries within the Asia Pacific region. We have a perpetual exclusive license to use and sub-license the SINGER ® brand and trademark in all countries in the Asia Pacific region (excluding Japan and Korea), except for sewing-related products and ironing presses for which we have a perpetual exclusive distribution agreement. See “ Branding and Intellectual Property ” for a discussion about the scope of our trademark license. We intend to expand our operations into Myanmar, Cambodia and Laos. For nearly 30 years, dealers from Myanmar, Cambodia and Laos have purchased certain of our Singer products from our locations in Thailand situated near to the borders with these countries. These markets have a relatively low level of HCD and consumer credit penetration and offer opportunities for sustained future growth. Myanmar is attractive because it provides a variety of investment opportunities reflecting the pace at which the government is liberalizing the economy. Myanmar has a population of approximately 48.6 million people, with a substantial potential market for the sale of HCDs using consumer finance. Myanmar’s GDP has grown at a rate of 5.3% in 2010, 5.5% in 2011 and 6.3% in 2012 according to the World Bank 1. We do not believe there are currently any established retail and consumer finance companies operating in Myanmar. Cambodia and Laos also provide attractive potential growth opportunities. Cambodia has a population of approximately 14.3 million people. The country has, over the last several years, experienced stable economic growth, with GDP increasing by 6.0% in 2010, 7.1% in 2011 and 6.6% in 2012, according to the World Bank. Laos, with a population of approximately 6.3 million people, has also benefitted from strong GDP growth of 8.5% in 2010, 8.0% in 2011 and 8.2% in 2012, according to the World Bank. The World Bank expects Myanmar, Cambodia and Laos to continue to grow economically. We intend to enter these markets to provide the growing and increasingly affluent populations with our product and consumer finance offerings. In order to successfully take advantage of these promising investment prospects, we have established a strategic business development division, which includes dedicated personnel focused on exploring these expansion opportunities. In addition to expanding our current trading activities, we intend to enter into strategic relationships with local partners and establish a Singer subsidiary in each of Myanmar, Cambodia and Laos to gain entry into the respective markets and assist us to execute marketing strategies specifically designed to meet the preferences of the local consumers. Increase and enhance our online presence We believe that e-commerce presents an important business opportunity that will enable us to pursue additional growth opportunities in the future. We intend to strengthen our current online sales channel in Sri Lanka and India to match higher online demand from our customers as they increasingly access the Internet and begin to shop online. In addition, given the considerable number of Sri Lankan, Bangladeshi and Pakistani workers in various parts of the world, we intend to launch, in 2014, a new web-based service to enable them to make purchases of our products

1

See “General and Statutory Information – Sources”. The World Bank has not provided its consent, for the purposes of Section 249 of the Securities and Futures Act, to the inclusion of the information extracted from the relevant report published by it and therefore is not liable for such information under Sections 253 and 254 of the SFA. While we, the Vendors and the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager have taken reasonable actions to ensure that the information from its report has been reproduced in its proper form and context, and that the information has been extracted accurately and fairly from such report, neither we, the Vendors and the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager nor any other party have conducted an independent review of the information contained in that report or verified the accuracy of the contents of the relevant information.

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while working outside of their countries of origin and have these delivered to their respective families at home. We plan to use our online portals to promote this service, advertise new products or services, announce new store openings and provide information relating to product promotions. We believe that our online shopping portal will offer our customers a value proposition and help to differentiate us from our competitors, most of which do not offer e-commerce-based sales. History The table below sets out the key milestones for Sewko. Date 1851 . . . . . . . . . . 1855 . . . . . . . . . . 1856 . . . . . . . . . . 1870 . . . . . . . . . . 1877 . . . . . . . . . . 1889 . . . . . . . . . . 1957 . . . . . . . . . . 1991 . . . . . . . . . . Event Isaac Merritt Singer founds I.M. Singer & Company and commences production of sewing machines in Boston, Massachusetts USA. Singer Manufacturing Company (the successor company to I.M. Singer & Company) begins overseas expansion. Singer Manufacturing Company introduces installment payment plan. Singer Manufacturing Company commences operations in India, including present-day Bangladesh and Pakistan. Singer Manufacturing Company commences operations in Sri Lanka. Singer Manufacturing Company commences operations in Thailand. Singer Manufacturing Company introduces sale of home appliances to complement sewing machine sales in the Asian markets. The Singer Company N.V. (the successor company to the Singer Manufacturing Company) relists on the New York Stock Exchange, having been taken private in 1989. Singer N.V., following a corporate reorganization, becomes the parent company of several operating companies formerly owned by The Singer Company N.V., including all of the operating companies now included in Singer Asia; stock of Singer N.V. commences trading on the Pink Sheets Quotation Service. Singer N.V. forms Singer Asia to hold interests in Sri Lanka, Bangladesh, Pakistan, India and Thailand. Singer Asia provide investors a separate vehicle to inject additional capital for the growth of Singer Asia’s business in the Asia Pacific. UCL Asia Partners, L.P. acquires 43.2% of Singer Asia. Singer N.V. completes the sale of the Singer worldwide sewing business and SINGER ® trademark to SVP. This allows Singer N.V. to concentrate its resources and management in Singer Asia’s business in the Asia Pacific. To preserve its rights in the trademark, Singer Asia acquires a perpetual license to use and sub-license the SINGER ® brand in the Asia Pacific license territories and an exclusive, perpetual right to distribute SINGER ® sewing products in countries of operation. SVP was formed by Kohlberg & Company, L.L.C., a U.S. private equity firm, to acquire the worldwide Singer sewing business.

2000 . . . . . . . . . .

2003 . . . . . . . . . .

2004 . . . . . . . . . .

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Date 2005 . . . . . . . . . . 2005 . . . . . . . . . . 2006 . . . . . . . . . . 2008 . . . . . . . . . . 2010 . . . . . . . . . . 2011 . . . . . . . . . .

Event Singer N.V., reflecting the sale of the Singer trademark to SVP, changes its name to Retail Holdings N.V. We hire new senior management team and launch third-party brand strategy, re-branding the retail stores ‘Singer Plus’. We introduce an improved credit system and commences expansion of its distribution network. We launch new financial services products, including inward remittance, in-store bill payment and mobile phone reload services. We commence roll-out of the Singer Information System. Retail Holdings N.V. forms ReHo Limited as a 100% owned subsidiary in anticipation of a proposed sale or initial public offering of Singer Asia; and transfers its equity interest in Singer Asia to ReHo Limited. We open our 1,000th outlet. We become distributor for a number of additional third-party brands, including Chinese brand Huawei, Indian brands Godrej, Onida and Videocon and in 2013 European brands Beko and Grundig. Sewko formed and acquires Singer Asia. Sewko gives the Group the flexibility to pursue non-Singer brand business outside the Singer Asia arm.

2011 . . . . . . . . . . 2012 . . . . . . . . . .

2013 . . . . . . . . . .

Distribution Network We have a multi-channel distribution network across the region with national coverage in Sri Lanka, Bangladesh, Pakistan, India and Thailand. As at March 31, 2013, products were distributed via 922 retail stores, a network of 2,558 independent dealers and 211 direct selling depots. Among the retail outlets and direct selling depots, we owned 88 locations (33 in Sri Lanka, six in Bangladesh, six in Pakistan and 43 in Thailand) and leased the remaining 1,045 locations, as at March 31, 2013. Our distribution network is supported by a highly experienced and professional sales force, which includes store managers, store staff, sales canvassers, wholesalers and dealers. We have invested heavily in building and strengthening our distribution network, thereby providing customers greater access to our products and an enhanced shopping experience. Our distribution network has three main channels: • Retail: 61.0% of product sales value in 2012 was generated from our 909 retail stores. For the three months ended March 31, 2013, 53.6% of product sales value was generated from our 922 retail stores. Wholesale: 20.9% of product sales value in 2012 was generated from our 2,435 independent dealers and corporate accounts. For the three months ended March 31, 2013, 21.8% of product sales value was generated from our 2,558 independent dealers and corporate accounts. Direct selling: 18.1% of product sales value in 2012 was generated from our 200 direct selling depots and 2,773 canvassers in Thailand. For the three months ended March 31, 2013, 24.6% of product sales value was generated from our 211 direct selling depots and 2,724 canvassers.

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In addition, our online sales platforms are expected to generate increased revenue and mature as e-commerce gains momentum in our countries of operation. We have entered into Singer sub-licensing agreements with Singer (Malaysia) Sdn Bhd (“ Singer Malaysia ”) in Malaysia and Blessington Pty. Ltd (“ Blessington ”) in Australia. Singer Malaysia had a revenue of US$131.6 million in 2012 operating from 147 direct selling depots and 576 sales agent dealers, as at March 31, 2013. Blessington is primarily a sewing machine distributor but also sells SINGER ®-branded HCDs through 79 department stores, some independent traders and online, as at December 31, 2012. See “– Sub-Licensing Agreements ”. In the three months ended March 31, 2013, we opened a total of 29 stores and direct selling depots, added 123 wholesale dealers and renovated or relocated 57 stores. Over the period from January 1, 2013 to December 31, 2014, and including the growth in the three months ended March 31, 2013, we intend to increase our retail store base by approximately 130 stores, our wholesale network by approximately 400 independent dealers and our direct selling network by approximately 20 direct selling depots as set forth below: New direct selling depots 2013-2014 – – – – 20 20 Store renovations and relocations 92 93 35 – – 220

New stores 2013-2014 Sri Lanka . . . . . . . . . . . . . . . Bangladesh . . . . . . . . . . . . . Pakistan . . . . . . . . . . . . . . . . India. . . . . . . . . . . . . . . . . . . Thailand . . . . . . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . 49 65 10 6 – 130

New dealers 2013-2014 68 137 5 167 23 400

We intend to fund the opening and enhancement of our stores and direct selling depots with our existing funds and bank facilities of each of our operating companies. However, the working capital requirements in the years ahead for the receivables and inventory will be funded using a portion of the IPO proceeds earmarked for general working capital purposes. See “ Use of Proceeds ”.

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Geographical Distribution The following map shows our distribution networks in Sri Lanka, Bangladesh, Pakistan, India, Thailand and that of our licensee in Malaysia, as at March 31, 2013:
Pakistan
• 158 stores • 231 dealers

Bangladesh
• 339 stores • 310 dealers

Thailand
• 211 depots • 453 dealers

India
• 34 stores • 864 dealers

Malaysia
• 147 depots • 576 dealers

Sri Lanka
• 391 stores • 700 dealers

Retail

Direct selling

Wholesale

Licensee

Sri Lanka The following map sets forth the geographical location of our 391 stores and 700 dealers in Sri Lanka as at March 31, 2013:

North 80 stores 155 dealers

East 23 stores Central 109 stores 154 dealers 110 dealers West 128 stores 145 dealers Colombo Kandy

Galle

South 51 stores 136 dealers

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Bangladesh The following map sets forth the geographical location of our 339 stores and 310 dealers in Bangladesh as at March 31, 2013:

Sylhet Northwest 46 stores 24 dealers Northeast Central 38 stores 90 stores 38 dealers 101 dealers Dhaka Southwest 90 stores 67 dealers Southeast 75 stores 80 dealers Chittagong

Pakistan The following map sets forth the geographical location of our 158 stores and 231 dealers in Pakistan as at March 31, 2013:

North 60 stores 30 dealers Islamabad

West 2 stores 2 dealers

East 64 stores 105 dealers

Lahore

Karachi

South 32 stores 94 dealers

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India The following map sets forth the geographical location of our 34 stores and 864 dealers in India as at March 31, 2013:

North 8 stores 219 dealers New Delhi East 2 stores 133 dealers Kolkata West 4 stores 166 dealers

Mumbai

Chennai Bangalore South 20 stores 346 dealers

Thailand The following map sets forth the geographical location of our 211 depots and 453 dealers in Thailand as at March 31, 2013:

Chiang Mai

North 49 depots 105 dealers

Central 40 depots 94 dealers

Northeast 58 depots 75 dealers

Bangkok 4 depots 84 dealers East Bangkok 25 depots 44 dealers

South 35 depots 51 dealers

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We distribute and deliver our merchandise to our Singer outlets mainly through arrangements with a network of independent carriers in each country. Each of our store managers is responsible for product deliveries to customers. Retail Network As at December 31, 2012, we had 909 retail stores, which contributed 61.0% of our product sales in 2012. Our average store size is 91 square meters of selling area, with our largest store located in Sri Lanka being 1,115 square meters. We are the largest HCD retailer in Sri Lanka, Bangladesh and Pakistan by total revenue value. 1 The following table sets forth our retail sales contribution by country of operations in 2012: Retail sales as a percentage of total sales Average revenue per sq.m. of retail space (U.S. dollars) 3,088 2,891 3,614 3,152 3,074

Number of stores

Average store size (in sq. meters) 128.9 74.7 44.2 32.1 90.6

Sri Lanka . . Bangladesh Pakistan . . . India . . . . . .

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

381 338 160 30 909

80.4% 88.4% 88.8% 9.3% 61.0% 2

Total . . . . . . . . . . . . . . . . . . . . . .

Our stores are distinguished by their target market, product range and merchandising. Most of our stores have their own storage area to ensure that the most popular products are readily available. Each of our stores is operated using the Singer Information System. They generally open at around 10:00 a.m. and close between 6:00 p.m. and 8:30 p.m. and are open six days a week, except for nationally recognized holidays. Store Formats We currently have four different store formats to cater to different customer needs and locations: Singer Plus, Singer Mega, Sisil World and Singer Homes. • Singer Plus is the main retail store format with an average store size of 77 sq.m. with a total of 831 stores in Sri Lanka, Bangladesh, Pakistan and India, as at March 31, 2013. Singer Plus stores offer a wide range of HCDs, including house brands and third-party brands. We intend to increase the number of Singer Plus stores, especially in rural areas. The following table shows the number of Singer Plus stores in our countries of operation as at March 31, 2013: Number of Singer Plus stores Sri Lanka . . Bangladesh Pakistan . . . India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 308 331 158 34 831

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1 2

Source: The Nielsen Company.
Percentage relates to our Group’s total sales including Thailand.

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Singer Mega is a flagship, larger store format with an average store size of 443 sq.m., offering a wider range of HCDs and furniture. We had 15 Singer Mega stores in Sri Lanka and eight Singer Mega stores in Bangladesh as at March 31, 2013, primarily located in more affluent areas. Singer Homes are furniture showrooms with an average store size of 339 sq.m., offering a variety of high quality, modern and traditional furniture and home accessories. We had 15 Singer Homes stores in Sri Lanka as at March 31, 2013. We expect to introduce this retail format in Bangladesh and Pakistan in 2013. Singer Homes’ product offerings include sofas, wardrobes, bedroom suites, dining room suites, home and office accessories and pantry furniture. Sisil World, with 53 stores in Sri Lanka and an average store size of 91 sq.m. as at March 31, 2013, is known as “The Cooling Specialist”. Sisil World stores offer a unique product and brand mix mostly under the Sisil brand, which is a Sri Lankan heritage refrigerator brand. This channel focuses on home appliances, while also carrying a differentiated range of small appliances and consumer electronics.

We are focused on investing in and improving our distribution network. In 2011 and 2012, we opened 112 stores, and we plan to open approximately 130 additional stores in the next two years including the introduction of Singer Homes in Bangladesh and Pakistan. In addition to expanding our footprint, we are continuously improving our retail network by renovating, upgrading, enlarging, relocating and modernizing existing stores. In 2011 and 2012, we renovated or relocated 187 stores, and we expect to renovate or relocate approximately 220 additional stores in 2013 and 2014. In 2011, we rolled out a new store design and store fittings as part of our six-year store revamp initiative with a brighter, more modern appearance. In 2011 and 2012, we closed 15 unprofitable stores. Wholesale Network As at March 31, 2013, our wholesale network consisted of 2,558 independent dealers including 700 in Sri Lanka, 310 in Bangladesh, 864 in India, 231 in Pakistan and 453 in Thailand. The extent of the dealer network penetration varies from country to country. While the wholesale businesses in Sri Lanka and Pakistan are well developed, there is significant potential to further expand this channel in Bangladesh and Thailand. In India, the wholesale network focuses on sewing products and represents our principal channel for sewing machine distribution. Independent dealers are usually appointed in locations that are a distance away from the nearest retail store. This approach seeks to avoid unnecessary competition between retail and wholesale selling channels as the products available through both channels are generally the same. It also serves to extend the reach of SINGER ® products and other brands to new areas pending the opening of a retail store. As these dealers are independent businesses, the majority also sell products purchased from other sources, and some also further distribute Singer products to other dealers. Most dealers only have a single store. Products are sold to dealers at a discount to the retail price. The discount is set to offer sufficient incentive for the dealer to drive sales while preventing significant price competition with our retail stores. The products sold to dealers are backed by the same warranty and service, as well as quality commitment as those sold via our retail network. New dealers are only appointed following a thorough investigation for volume potential, creditworthiness, business background and reputation. Credit terms offered to dealers range from 15 to 120 days. In certain cases, cash discounts are offered or a “cash on delivery only” policy is enforced. Credit is strictly controlled and new product delivery is put on hold for any dealers in arrears.

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Once appointed, dealers are managed by the wholesale departments, which set annual performance targets, credit limits and payment terms and also provide the dealers with training in areas such as product knowledge, operating procedures, merchandizing display and after-sales service. Incentives such as discounts, conferences, holidays and awards are provided to dealers who achieve their assigned targets. Direct Sales We operate direct selling operations in Thailand. In direct selling, sales are made at the customer’s home during canvasser visits. In most cases, the product is delivered at sale. Prior to delivery, products are stored in depots, which serve as mini-warehouses. Following a successful sale, the same canvasser visits the customer monthly to collect the installment payment. During these visits, the canvasser seeks to sell other products to the customer. A new market consisting of small businesses and entrepreneurs (usually grocery stores, restaurants, hotels and schools) has been identified for commercial products such as beverage coolers, freezers, mobile phone airtime vending machines, petrol vending machines and other commercial appliances used by these businesses. This market is also served by direct selling canvassers. Singer Thailand plans to increase its product offerings for this market. As at March 31, 2013, Singer Thailand had 2,724 canvassers who served as the primary channel for door-to-door sales and collection. These canvassers operate from 211 direct selling depots located throughout Thailand. A depot serves as a mini-warehouse, a display area for Singer products and a meeting point for the canvassing teams headed by a branch manager. Groups of canvassers are further organized into smaller teams headed by a unit manager. Customers can also visit depots to effect payments and purchase products, but substantially all of the sales and payments are done at the customers’ homes. There is no difference between direct selling depots and retail stores in terms of accounting and risk. In general, the selling canvasser and Credit Checking Officer (CCO) are responsible for determining and assessing the creditworthiness of customers and for related collections. The canvassers’ and field staff’s compensation is based substantially on commissions. Selling commissions range from 4.3% to 11.1% of the cash price, while collecting commissions range from 7% to 9% of collections. In addition, selling and collection bonuses are paid to the best performers. Singer Malaysia, a third party licensee, also operates direct selling operations in Malaysia. Online Sales We have an online sales channel in Sri Lanka at www.singersl.com and in India at www.singerindia.net. Customers can select their desired products, arrange secure payments online and have their purchases delivered to their homes. Online sales currently represent less than one percent of product sales. Our presence in the online market is relatively new given the low level of Internet penetration in our countries of operations. The online distribution market for HCDs in our countries of operation is growing and we believe that with our existing infrastructure, we are well positioned to meet higher online demand from our customers as they increasingly access the Internet and shop online. In particular, given the considerable number of Sri Lankan, Bangladeshi and Pakistani workers in various parts of the world, we intend to launch a new web-based service in 2014 to enable them to make purchases while overseas and have the products delivered to their families at home. We will continue to carefully monitor retail Internet activity in the future and expand our online sales channel in response to growing demand from customers.

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Sub-Licensing Agreements Two third-party companies, one in Malaysia and one in Australia, currently hold sub-licensing rights to the Singer trademark as described below. Singer Malaysia, the sub-licensee in Malaysia, operated a total of 147 direct selling Singer branches and had 576 sales agents, as at March 31, 2013. The licence agreement was entered into by a predecessor company in December 2002 and assigned to us in July 2003. The licensing agreement is automatically renewed for five-year periods in perpetuity, but can be terminated by either party following a material breach of the agreement by the other party and failure to cure the breach. Singer Malaysia is granted a full and exclusive right and license to use the Singer and Regnis trademarks in Malaysia in relation to all products except computers, software, semiconductor chips, topographies, accessories and related goods and services and goods or services, such as gambling and lottery operations which may have an adverse effect on the reputation of the trademarks, in exchange for a royalty based on revenue. The licensing agreement is not assignable or transferrable in whole, or in part, by either party without the consent of the other party. Blessington, the sub-licensee in Australia, primarily distributes Singer products through 79 department stores, independent traders and online on its website, as at December 31, 2012. We entered into a sub-licensing agreement with Blessington on September 15, 2010. This agreement expires on December 31, 2016. Blessington is granted an exclusive and non-transferrable license to use the Singer trademark in Australia, New Zealand, Papua New Guinea, Fiji, Vanuatu, Solomon Islands, New Caledonia, Tahiti and Tonga in relation to certain products not to include sewing machines and spare parts, needles for sewing machines and related products, and ironing presses, in exchange for a royalty based on sales of these products with an annual minimum fee. Blessington may not sublicense the trademark to any person without our prior written consent. Products We offer a wide range of HCDs either as house brands or under distribution agreements with third-party brand owners. We tailor the mix of the products we offer based on the specific preferences and requirements of the targeted customer segment by location, distribution channel and country. Product Range We distribute a broad range of HCDs classified into six broad categories: • • • • • • Home appliances; Consumer electronics; IT products; Furniture; Sewing machines; and Other products.

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The chart below sets forth our product mix for the sale of goods as at March 31, 2013:
Consumer Electronics 16.7% IT Products 5.8% Furniture 2.7% Home Appliances 46.3% Sewing Machines 15.7%

Others 12.8%

Home appliances We offer home appliances such as refrigerators, freezers, washing machines, air conditioners, air coolers, water purifiers and small appliances such as rice cookers, mixers, juicers, grinders, tea kettles and irons. In the large appliances category, we carry brands such as SINGER ®, Sisil, Beko, Dawlance, Godrej, Haier, Hitachi, Samsung, Videocon and Whirlpool. In the small appliances category, we offer, among others, SINGER ®, Krups, Moulinex, Prestige and Tefal products. Consumer electronics Our consumer electronics products include televisions, audio equipment, DVD players, Blu-ray players and home theater systems. The key brands we carry are SINGER ®, Unic, Grundig, Haier, Hitachi, Onida, Philips, Samsung, Skyworth, TCL and Videocon. IT products We offer IT products including computers (both desktops and laptops); accessories (including monitors, keyboards and printers); photography products, such as digital cameras, camcorders and accessories; and mobile products including mobile phones, tablets, smart phones and accessories. The key brands we carry are SINGER ®, Apple, Asus, Dell, HTC, Huawei, Lenovo, Microsoft, Samsung and Sony. Furniture Our furniture products include living room, dining room and bedroom sets, chairs, tables, wardrobes, headboards, mattresses, dressers, book cases, sofas, pantry furniture and office furniture. The majority of the furniture we offer is branded SINGER HOMES ®. Sewing machines We generally market sewing machines and related products under the SINGER ® and Merritt brands for both household and commercial use and include straight stitch, zig zag, artisan and industrial models.

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Other products Other products we sell and distribute include water pumps, motorcycles and bicycles, fitness equipment, solar water heaters, generators, vending machines and agricultural equipment such as small tractors and paddy threshers. Product Mix Home appliances have consistently formed the largest component of sales of goods in our countries of operations, as shown in the table below.
For the year ended December 31, 2010 US$ million Group Home appliances. . . . . . . Consumer electronics . . . . IT products . . . . . . . . . . Furniture . . . . . . . . . . . . Sewing machines . . . . . . Other products . . . . . . . . Total . . . . . . . . . . . . . . Sri Lanka Home appliances. . . . . . . Consumer electronics . . . . IT products . . . . . . . . . . Furniture . . . . . . . . . . . . Sewing machines . . . . . . Other products . . . . . . . . Total . . . . . . . . . . . . . . Bangladesh Home appliances. . . . . . . Consumer electronics . . . . IT products . . . . . . . . . . Sewing machines . . . . . . Other products . . . . . . . . Total . . . . . . . . . . . . . . 40.1 14.3 1.6 2.2 8.4 66.6 60.2% 21.4% 2.5% 3.3% 12.6% 100.0% 44.8 12.8 2.5 2.9 7.2 70.2 63.8% 18.2% 3.6% 4.2% 10.2% 100.0% 52.6 17.8 3.4 2.7 2.8 79.4 66.2% 22.5% 4.3% 3.5% 3.5% 100.0% 6.9 3.0 0.9 0.6 1.9 13.3 51.9% 22.6% 6.8% 4.5% 14.2% 100.0% 8.4 3.7 0.5 0.8 1.3 14.7 57.1% 25.2% 3.1% 5.4% 9.2% 100.0% 51.7 29.2 7.8 6.6 13.7 15.1 124.2 41.7% 23.5% 6.3% 5.3% 11.0% 12.2% 100.0% 70.2 49.3 11.5 8.6 16.9 18.2 174.7 40.2% 28.2% 6.6% 4.9% 9.7% 10.4% 100.0% 74.3 42.4 12.2 9.7 16.4 15.1 170.1 43.6% 25.0% 7.2% 5.7% 9.6% 8.9% 100.0% 19.9 10.8 2.8 2.2 4.7 4.0 44.6 44.6% 24.2% 6.4% 5.0% 10.6% 9.2% 100.0% 16.7 9.8 5.0 2.6 3.8 3.6 41.5 40.3% 23.5% 12.1% 6.3% 9.1% 8.7% 100.0% 139.9 49.6 9.4 6.6 44.0 36.2 285.7 49.0% 17.3% 3.3% 2.3% 15.4% 12.7% 100.0% 169.9 71.0 14.0 8.6 53.1 40.6 357.2 47.6% 19.9% 3.9% 2.4% 14.9% 11.3% 100.0% 191.1 70.4 15.6 9.7 56.3 34.9 378.0 50.6% 18.6% 4.1% 2.6% 14.9% 9.2% 100.0% 43.8 16.3 3.8 2.2 14.8 9.9 90.8 48.2% 18.0% 4.2% 2.4% 16.3% 10.9% 100.0% 44.1 15.9 5.5 2.6 15.0 12.2 95.3 46.3% 16.7% 5.8% 2.7% 15.7% 12.8% 100.0% 2011 US$ million 2012 US$ million For the three months ended March 31, 2012 US$ million 2013 US$ million

%

%

%

%

%

138

For the year ended December 31, 2010 US$ million Pakistan Home appliances. . . . . . . Consumer electronics . . . . Sewing machines . . . . . . Other products . . . . . . . . Total . . . . . . . . . . . . . . India Sewing machines . . . . . . Home appliances. . . . . . . Total . . . . . . . . . . . . . . Thailand Home appliances. . . . . . . Consumer electronics . . . . Sewing machines . . . . . . Other products . . . . . . . . Total . . . . . . . . . . . . . . 30.0 3.5 2.9 11.6 48.0 62.6% 7.2% 6.0% 24.2% 100.0% 35.5 6.2 2.3 14.5 58.5 60.6% 10.6% 4.0% 24.8% 100.0% 45.3 7.5 2.7 16.4 71.9 63.0% 10.4% 3.7% 22.9% 100.0% 23.0 0.1 23.1 99.7% 0.3% 100.0% 28.7 0.4 29.1 98.5% 1.5% 100.0% 32.3 1.4 33.7 96.0% 4.0% 100.0% 17.9 2.7 2.2 1.1 23.9 75.0% 11.1% 9.3% 4.6% 100.0% 19.0 2.7 2.2 0.8 24.7 76.9% 10.9% 9.1% 3.2% 100.0% 17.6 2.7 2.0 0.6 22.9 76.9% 11.6% 8.9% 2.6% 100.0% 2011 US$ million 2012 US$ million

For the three months ended March 31, 2012 US$ million 2013 US$ million

%

%

%

%

%

4.6 0.7 0.5 0.2 6.0

76.4% 11.7% 8.9% 3.0% 100.0%

3.7 0.5 0.5 0.2 4.9

76.5% 9.5% 10.7% 3.3% 100.0%

8.4 0.1 8.5

99.0% 1.0% 100.0%

9.2 0.6 9.8

93.4% 6.6% 100.0%

12.3 1.8 0.5 3.9 18.5

66.7% 10.0% 2.9% 20.4% 100.0%

14.7 1.9 0.7 7.1 24.4

60.1% 7.9% 3.0% 28.9% 100.0%

Our best selling products are refrigerators and televisions, representing 24.5% and 14.5% of 2012 sales, respectively. We have a significant market share across many HCD products categories. Brands We offer customers house-branded products and third-party brands, comprising domestic and international brands. Product mix by product categories and brand in 2012 comprised 63.0% SINGER ® brand appliances and electronics, 14.9% SINGER ® and other house-brand sewing machines, 2.6% SINGER ® Homes furniture, 7.7% other SINGER ® house-brand products and 11.8% third-party products. We believe our mix of house and third-party brands allows us to significantly improve both the value proposition we provide our customers and our margins compared to all third-party brand retailers.

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The table below sets forth our sales by brand mix as at December 31, 2010, 2011 and 2012 and for the three months ended March 31.
Year ended December 31, 2010 US$ million SINGER® appliances and electronics . . . . . SINGER and Merritt brand sewing machines. . . . . . . . . SINGER HOMES furniture . . . . . . . . . Other house-branded products . . . . . . . . . Third-party-branded products . . . . . . . . . Total . . . . . . . . . . .
® ®

Three months ended March 31, 2012 2012 US$ million 47.8 2013 US$ million 49.7

2011 US$ million 212.1

% 62.3%

% 59.4%

US$ million 238.0

% 63.0%

% 52.5%

% 52.2%

178.0

44.0 6.6 24.6 32.5 285.7

15.4% 2.3% 8.6% 11.4% 100.0%

53.1 8.6 30.7 52.7 357.2

14.9% 2.4% 8.6% 14.7% 100.0%

56.3 9.7 29.2 44.8 378.0

14.9% 2.6% 7.7% 11.8% 100.0%

14.8 2.2 12.5 13.5 90.8

16.3% 2.6% 13.8% 14.8% 100.0%

15.0 2.6 9.9 18.1 95.3

15.7% 2.7% 10.4% 19.0% 100.0%

House-branded products We have four house brands: SINGER ®, Merritt, Sisil and Unic. The majority of our house-branded products, ranging from refrigerators to sewing machines, are branded SINGER ®. Our alternative sewing machine brand is Merritt, while the Sisil and Unic brands are used exclusively in Sri Lanka, primarily for refrigerators and televisions, respectively. We believe that customers associate these house brands with trust, quality and the ability to purchase using consumer finance. House-branded products are either purchased from third-party manufacturers on an original equipment manufacturer (“ OEM ”) basis at competitive prices or manufactured or assembled by us in our own factories. Every new OEM supplier must be approved by our CEO. OEM products are sourced on a completely built-up, semi-knocked down or completely knocked-down basis. We enter into Trademark Agreement on Purchase Orders with OEM suppliers which allow them to brand the products they are supplying to us as Singer products. We only consider the manufacture or assembly of products where there are local efficiencies or tax or duty incentives. Third-party brands We also sell a number of third-party brands, including Apple, Beko, Dawlance, Godrej, Grundig, Haier, Hitachi, Huawei, Onida, Philips, Prestige, Samsung, Skyworth, TCL, Tefal, Videocon and Whirlpool, some of which are subject to exclusive distribution arrangements. Third-party brands help us broaden the range of merchandise offered to customers in our stores. We believe that the variety of brands we offer enhances our image as a retailer and offers customers greater choice. In selecting third-party brands, we consider numerous factors, such as whether the brands are well established, the products are reliable in terms of quality, efficient in replenishment and whether the products they offer match customer preferences. We require third-party brand suppliers to comply with our standard purchase terms and conditions. Terms and conditions such as margin, sales target and payment days are approved by management at the country level. We actively monitor the performance of our third-party brand suppliers by assessing the sales of the respective products.

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Local Manufacturing and Assembly We manufacture or assemble certain of our house-branded products where there are local efficiencies or tax or duty incentives. In 2012, 23.8% of sales were of products which we manufactured or assembled. In Sri Lanka, we manufacture refrigerators, washing machines, furniture, domestic and agricultural water pumps and paddy threshers and assemble sewing machines, air conditioners and motorcycles. In Bangladesh, we assemble televisions and air conditioners, and have recently commenced manufacturing furniture. In Pakistan, we manufacture refrigerators and assemble televisions, sewing machines, gas appliances, washing machines, air conditioners, and microwaves. In India, we manufacture sewing machines. We do not currently manufacture or assemble products in Thailand. We operate seven factories, four in Sri Lanka and one in each of Bangladesh, Pakistan and India. We own all of these factory sites, except for one in Sri Lanka, which we lease. As at March 31, 2013, a total of 1,114 of our employees were directly involved in the manufacturing and assembly operations, which represents 13% of our total staff (including all staff working in our retail stores) of 8,537 persons as at March 31, 2013. Our main operating subsidiaries in each country conduct our manufacturing and assembly operations. In Sri Lanka, however, some of the manufacturing and assembly operations are conducted by other subsidiaries, namely Regnis (Lanka) PLC, Regnis Appliances (Pvt) Ltd. and Singer Industries (Ceylon) PLC, which engage exclusively in manufacturing and assembly operations. We have not included factory utilization rate for our factories because it is not a meaningful indicator of performance. Our manufacturing or assembly operations are relatively simple and easily scalable. We can increase our capacity by adding another shift and extending our factories’ operating hours. There is also a pool of readily available third party vendors to whom we can outsource some of our manufacturing and assembly operations. Pricing Our pricing strategy seeks to offer products at competitive prices in each of our markets taking into account our brand positioning and product features for each product category. Our marketing departments continually monitor market prices and trends and appropriate adjustments to our prices and promotions are implemented as necessary. Consumer Finance Beginning in 1856, the Singer Manufacturing Company pioneered the use of installment payment plans to enable customers to afford and immediately purchase a sewing machine. At that time, a sewing machine represented a significant step upwards in convenience and productivity for the customer; it was also an expensive product. The installment payment plan enabled customers to purchase what they otherwise could not immediately afford, thereby providing them with a product they desired and needed. This consumer finance business continues in our subsidiaries today and is a key driver in facilitating sales by increasing the affordability of our products. This is an important element in emerging markets where other sources of credit are not readily available and has provided us with a strong competitive advantage over other retailers who require full payment or rely on third-parties to provide credit. In 2012, 50.1% of our sales were on company-provided credit. Hire purchase also allows us the opportunity to realize higher gross margins on the sale of our products. The price of the products with consumer finance includes a finance charge that ranges between 0.0% to 60.0% per annum of the amount financed, depending on a number of factors, including local market interest rates, the repayment period, the down payment, the customer’s credit history, the type of product and whether we are promoting the sale of the particular product or model.

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Our subsidiary, Singer (Sri Lanka) PLC, owns 80.4% of Singer Finance (Lanka) PLC. (“ Singer Finance ”), a stand-alone leasing and consumer finance business listed on the Colombo Stock Exchange (“ CSE ”). We established Singer Finance as a wholly-owned subsidiary in April 2004 to broaden our financing activities in Sri Lanka into leasing of commercial equipment and vehicles, additional forms of consumer financing and financing of other kinds of capital goods. Following the successful development of the business, we listed Singer Finance on the CSE in January 2011, to comply with government requirements. Singer Finance’s credit granting activities are funded by a broad array (in terms of type and tenor of maturities) of consumer deposits, consumer savings accounts, bank loans from local banks, loans from Singer (Sri Lanka) PLC and the proceeds from the offering of shares on the CSE and subsequent rights issue. As at March 31, 2013, Singer Finance operated 13 stand-alone branches and five service centers within Singer retail stores and had a total staff complement of 200. Finance revenue accounted for 10.9%, 10.7%, 11.9% and 12.7% of our total revenue in 2010, 2011, 2012 and for the three months ended March 31, 2013, respectively. As at March 31, 2013, we had 679,895 active customer accounts. Total accounts receivable as at March 31, 2013, were US$218.5 million. The following table sets forth the accounts receivable outstanding by account size as at March 31, 2013. Installment accounts receivable US$ million 10.7 30.8 51.5 25.8 22.3 47.8 29.6 218.5 % 4.9% 14.1% 23.6% 11.8% 10.2% 21.8% 13.6% 100.00% 265,008 187,809 145,112 40,243 23,104 16,797 1,822 679,895

Size of individual accounts US$ < 100 . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 – 250 . . . . . . . . . . . . . . . . . . . . . . . . 251 – 550 . . . . . . . . . . . . . . . . . . . . . . . . 551 – 850 . . . . . . . . . . . . . . . . . . . . . . . . 851 – 1,300 . . . . . . . . . . . . . . . . . . . . . . 1,301 – 10,000 . . . . . . . . . . . . . . . . . . . . > 10,000 . . . . . . . . . . . . . . . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Number of accounts % 39.0% 27.6% 21.3% 5.9% 3.4% 2.5% 0.3% 100.00%

The following table sets forth by country our installment accounts receivable. Accounts receivable, December 31, 2012 US$ million Sri Lanka . . . . . . . . . . . . . . . . . . . . . . . . Bangladesh . . . . . . . . . . . . . . . . . . . . . . Pakistan . . . . . . . . . . . . . . . . . . . . . . . . . Thailand . . . . . . . . . . . . . . . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107.7 15.8 11.6 71.8 206.9 % 52.1% 7.6% 5.6% 34.7% 100.0% Accounts receivable, March 31, 2013 US$ million 111.6 10.9 11.4 84.6 218.5 % 51.1% 5.0% 5.2% 38.7% 100.0%

Country

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Consumer Credit Products and Financial Services Our range of credit and non-credit financial services offerings varies by country, with the broadest spectrum of products being offered in Sri Lanka. We intend to expand the credit and non-credit financial services offerings, including introducing Singer credit cards, mobile wallets and virtual banking. The following table sets forth consumer credit products and financial services we currently provide, or plan to commence during 2013, in each of our countries of operations: Sri Lanka Bangladesh Consumer Credit Products Hire purchase . . . . . . . . . . . . . . . . . . . . . Leasing. . . . . . . . . . . . . . . . . . . . . . . . . . Group sales . . . . . . . . . . . . . . . . . . . . . . Financial Services Extended warranty . . . . . . . . . . . . . . . . . Consumer protection plan . . . . . . . . . . . Utilities payment “Bill Pay” . . . . . . . . . . . Remittances . . . . . . . . . . . . . . . . . . . . . . Mobile phone reloads “Flexi Load”. . . . . Branchless banking . . . . . . . . . . . . . . . . Singer credit cards . . . . . . . . . . . . . . . . . ߛ ߛ ߛ ߛ ߛ × ߛ ߛ ߛ ߛ ߛ ߛ ߛ × ߛ ߛ ߛ ߛ ߛ × × × ߛ ߛ × ߛ × × ߛ ߛ ߛ ߛ × ߛ ߛ × ߛ ߛ ߛ ߛ Pakistan Thailand

The key financial service offerings are as follows: Hire Purchase Hire purchase is a highly flexible scheme that includes the following: • Down payment amount: 0.0% to 40.0%, depending on the credit promotion, of the product purchased; Period: between two and 36 months based on the creditworthiness of the customer, product purchased and customer choice; and Interest rates: 0.0% to 60.0% per annum. Zero interest and low interest credit are offered as promotions.

Leasing We offer leasing in Sri Lanka only, primarily through Singer Finance. Leasing was introduced to Sri Lanka in the 1980s and has gained acceptance as an alternative to loan financing. It provides an additional source of financing for both retail customers and small and medium enterprises. Singer Finance provides leasing for new commercial and passenger vehicles. The lease receivable portfolio of Singer Finance was US$36.0 million at December 31, 2012 and US$37.3 million as at March 31, 2013. The lease receivable portfolio accounts for 54.6% of the total receivable portfolio of Singer Finance as at March 31, 2013, which was US$68.6 million.

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Group Sales Group sales credit facilities are offered by partnering with organizations to provide easy payment terms to their employees for purchases of our products. Installment payments are generally facilitated by deductions from the employees’ monthly remuneration leading to strong collection performance. Extended Warranty We offer our customers the option of purchasing extended warranties for a period longer than the normal free-of-charge warranty period. In Sri Lanka, we have a back-to-back warranty insurance from a third party, thereby transferring the risk to that third party while retaining a significant portion of the warranty income. Consumer Protection Plans We offer consumer protection plans providing protection against product loss or damage due to fire, theft or natural calamities and debt forgiveness in the event of the death of a customer or other extraordinary interruption in a customer’s repayment ability. Other Financial Service Transactions Starting in Sri Lanka, and now including Bangladesh and Pakistan, we have significantly broadened the scope of the financial products and services we offer to customers. In 2012, on average, we processed more than 200,000 other financial services transactions per month. These include bill collection on behalf of utility companies and financial institutions, disbursement of remittances from overseas and within the country and the sale of mobile phone airtime. More recently in Bangladesh, we have begun to offer customers the opportunity to open bank accounts and make deposits, withdrawals and transfers using a biometric system developed in conjunction with a leading local bank (branchless banking).

144

Credit Approval Process, Monitoring and Collections Our credit culture and credit system throughout the organization, from headquarters to individual branches, rely primarily on our step-by-step approach to managing the credit process (the “ Credit Life Cycle ”), which is also an integral part of the Singer Financial Manual or SFM (as defined below). The diagram below sets forth the steps our consumer finance team usually takes when approving a credit application, monitoring the credit portfolio and collecting installment payments.
Approval Process

Monitoring

Collections

Customer
Potential customer requests to purchase a product on credit.

Blacklist
Check potential customer against blacklist. Reject any credit application on blacklist.

Credit Application, Photos and Identification Card
Potential customer completes the credit application form. Obtain copy of identification card, photo and, when available, proof of address and income.

Credit Bureau (Sri Lanka & Thailand)
Based on certain criteria, check credit bureau for customer records. Reject credit application based on delinquency criteria.

Point Scoring
Evaluate customer credit risk based on point scoring model. Scoring criteria includes capacity to pay, stability of income source, residency and guarantors, among others.

Credit Department/ Call Center Arrears Follow up
Follow up calls through call centers or Credit Department for customers in arrears.

Multiple Payment Points
Provide various channels to customers for credit payments.

Account Checker/ Internal Audit
Regular internal checking and audits of outstanding accounts.

Execute Credit Agreement and Welcome Call
Verify authenticity and accuracy of customer account information through Welcome Call. Calls done by Call Centers using customer telephone numbers in the system.

Background Checks and Physical Visits
Conduct background checks for new customers through physical visit of customer residence and/or interview with neighbours .

Delinquency Letter
Send out notification letters to delinquent customers.

Promise-To-Pay System
Customer's payment commitments are recorded and followedup on promised dates.

Repossession
Accounts that have no payment for 4+ months or in arrears for 9+ months are required to be repossessed.

Legal Recourse/ Security Deposit Offset
Legal actions are taken against customers who are in serious credit default. In certain cases, branch managers take responsibility for uncollectible accounts by settling these with their security deposit.

Monthly Perf ormance Assessment: – Credit Dashboards – Balanced Scorecards – VIP Clubs
Credit performance & profitability is assessed each month through the credit dashboards and balanced scorecards. Top performing branches are awarded the VIP Club membership which provides added compensation and prestige for excellent performance.

Approval Process Our customer credit approval process begins with the submission by the customer of a credit application and certain supporting documentation, including photo identification and, when applicable, proof of income and address. We conduct credit reviews and may, depending on our assessment of the potential customer’s creditworthiness, reject the customer’s credit application. We evaluate a number of criteria for each customer resulting in a score that permits us to rate the customer’s creditworthiness. We may also conduct background checks and physical visits to the customer’s premises. In Sri Lanka and Thailand, we perform credit checks against the local credit bureaus on a selective basis. Once the veracity of all information provided by the customer is authenticated and we approve the credit application, the customer will execute a credit agreement. In addition, we require the execution of a guarantee by a third party. Once the application is approved, we conduct a welcome call, which serves as an additional verification, and we inform the customer of the payment obligations and steps to be taken to ensure compliance with all related obligations.

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Monitoring We assess the credit performance of each branch and the profitability of the consumer finance business each month through our credit dashboards, credit management reports and balance scorecards. These tools allow for a comprehensive evaluation of all the key performance indicators relating to the credit business and provide early warning signals to identify branches that might experience future collection problems. The credit approval and granting process is similar across our countries of operation. Our store managers rely on our centralized credit risk monitoring and management system, by which we set guidelines and authorizations at the operating level to ensure a well-managed credit portfolio and first-rate collection experience. In this system, each store manager acts as our credit granting and collection agent. In certain circumstances, the branch managers take responsibility for uncollectible accounts that they create, and as such, we retain a portion of commissions paid to each branch manager as a security deposit. Our monitoring policies have resulted in significant improvements in our arrears percentage. The chart below sets forth our historical installment receivable portfolio including our gross receivables, net receivables and arrears as a percentage of gross receivables, which we calculate as the ratio of the total amount of installments in arrears to the gross receivable balance:
Receivable balances and Arrears %
250 7.0% 6.0% 5.0% 4.0% 3.0% 2.0%

Receivable balance US$ million

200 150 100 50

Gross receivable

Net receivable

% arrears

The chart below sets forth our historical collections performance:
Number of Accounts and Paying % 800 96.0%

Number of Accounts – Thousands

700

94.0%

600

92.0%

400

88.0%

Total Number of Accounts

Paying percentage

146

Paying %

500

90.0%

Arrears %

Paying accounts consist of accounts that paid at least one full installment during the month. The paying percentage is determined by dividing the outstanding number of paying accounts at month end by the total number of accounts. For purposes of this presentation, the paying percentage does not include the accounts of Singer Finance for its leasing, hire purchase vehicles and group sales segments. Collections During the lifetime of an installment plan, customers are encouraged to pay in advance. As at March 31, 2013, 46.3% of customers had made installment payments in advance. If customers fail to make their payments on time, we will follow up with calls and delinquency letters to notify the customer of late payments and to ensure customers process the required payments. We operate a promise-to-pay system that tracks the commitments customers offer when they fall into arrears. We are entitled to charge a penalty to customers whose payments are in arrears, which we determine based on applicable interest rates and account for as other income. These penalty charges vary by country but are charged, when applied, equally to all customers in each respective country in which we operate. We will generally repossess the underlying asset for resale if a customer fails to make any payment for four or more consecutive months or is in arrears for nine or more months. We may also take legal action against the customer. We provide various payment channels for our credit customers including payments at our Singer retail stores. The collection of credit payments is monitored closely and accounts in arrears are actively followed up by our store staff, territory managers, the credit department and internal audit. See “ Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies – Impairment loss on trade receivables ” for details of our impairment policy. The table below sets out certain information relating to our customers’ accounts as at March 31, 2013.
Arrears as a % of gross receivables Advances as a % of gross receivables

Gross Receivables US$ million Sri Lanka . . . . Bangladesh . . Pakistan . . . . . Thailand . . . . . Total . . . . . . . 111.6 10.9 11.4 84.6 218.5

Amounts in Arrears US$ million 2.1 0.6 0.5 2.7 5.8

Amounts in Advance US$ million

Net advances US$ million

1.8% 5.6% 4.2% 3.2% 2.7%

6.3 1.4 1.0 5.9 14.6

5.7% 13.1% 8.3% 7.0% 6.7%

4.3 0.8 0.5 3.2 8.8

The table below sets out the ageing of the amounts in arrears in respect of our customers’ accounts as at March 31, 2013.
Current/ not yet due Gross Receivables Ageing US$ million . . . . . . . . . . . . As a % of gross receivables . . . . . . . . . . . . Arrears 61 to 120 days Arrears 121 and over

Arrears 1 to 60 days

Total Arrears

Gross Receivables

212.7 97.3%

1.8 0.9%

1.6 0.7%

2.4 1.1%

5.8 2.7%

218.5

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Customers We serve customers from all income groups including middle- to lower-income groups located in rural areas. Lower income earners represent a large part of the total population in the countries where we operate. Since this income group typically does not have access to bank loans, credit cards or other forms of credit, our credit products enable a wider base of potential customers to purchase products. We also continue to address the more affluent market segment with higher specification and higher value products through modern store formats including Singer Mega for the metropolitan areas of Sri Lanka and Bangladesh. Sales, Customer Service and Marketing Sales Force Our sales force in each country is comprised of (i) a sales director and a credit director respectively overseeing all sales and credit efforts, (ii) national sales managers, (iii) area managers and district managers (collectively, “ Territory Managers ”), (iv) store managers and (v) store employees and canvassers. Territory Managers are responsible for the performance of stores in their designated territory and are expected to be active managers. We believe that store visits by Territory Managers are the cornerstone of effective retail territory management as they allow the Territory Manager to see for themselves the individual circumstances of each store. This helps ensure an accurate assessment of each store’s performance. Territory Managers are accountable for reviewing sales and collections; attending morning meetings; verifying cash, inventory, receivables and other records; briefing sales staff on new products and promotions; monitoring and managing complaints; checking merchandising; ensuring there are adequate sales staff; training and coaching sales staff; and monitoring competitor strategies and store profitability. Store managers are normally selected from the pool of promising and talented store staff within the operating countries. Store managers receive a small basic salary complemented by variable commissions for sales and collections. In addition, if stipulated targets for sales or collections are achieved, the store manager is also paid a bonus. The variable commission and bonus payments comprise up to 5.4% of our revenue in our retail business and 16.5% in our direct selling business. While the store managers in each country are employees of the local operating companies, the other branch staff are not, except in Pakistan, Thailand and, for the Singer Mega and some Singer Homes stores, in Sri Lanka. In Sri Lanka, Bangladesh and India, the branch staff are hired by the individual store manager and it is the responsibility of each store manager to remunerate the branch staff out of his own earnings. The Singer Mega and some Singer Homes stores in Sri Lanka operate a more conventional remuneration system where all staff working at the branch are employees and basic salaries represent a higher proportion of their compensation. In order to safeguard our assets, a portion of commissions from the store managers are withheld each month as a security deposit. Upon retirement, resignation or termination, the store manager is paid the security deposit subject to a complete review and handover of all assets held at the branch. In instances where the assets are impaired or incomplete, the shortfall is deducted from the security deposit. A zero tolerance approach, including termination and where appropriate civil and criminal prosecution, is adopted towards store managers and branch staff that fail to comply with their obligations.

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Customer and After-Sales Service We believe that the primary objectives of customer service are to enhance customer satisfaction, improve operational efficiency, promote customer loyalty and ensure the timely collection of customer installments. To this end, one of our main goals is to provide a suitable shopping environment for our customers and a number of channels for us to communicate with our customers. We operate call centers in Sri Lanka, Bangladesh, Pakistan and Thailand. These call centers assist customers during the sale and credit process and also make outbound welcome calls to verify customer details and provide information relating to products and promotions. In 2012, we made approximately 572,000 outbound calls and received approximately 191,000 inbound calls. All products are supported by a widespread service network including service at our 1,133 sales outlets and our 33 specialized service centers and 871 franchise service agents. We conduct regular “Product Clinics” in select outlets on a rotational basis, whereby experienced service agents answer customer queries, offer advice on Singer and third-party products and provide free service and repairs. Store managers and staff undergo training as part of The Singer Retail Academy. See “– Staff Training ”. Product knowledge training, in particular, is essential to ensure sales employees can properly explain the features of one product versus another. Marketing We use various techniques to advertise and promote our brands and products. These include seasonal and ad hoc promotions, big prize lucky draws, scratch-card discounts, credit incentives such as low down payment or low interest, sports sponsorship, direct mail marketing, Internet advertising, SMS promotions, loyalty programs, customer satisfaction surveys and other customer communication materials. In 2012, we spent 3.6% of revenue on marketing, 36.0% of which comprised advertising and 64.0% comprised promotions. Advertising includes both above-the-line advertising, such as print, TV and radio ads, and below-the-line advertising, such as catalogues, leaflets and in-store point-of-sale materials. Promotions include free gifts and lucky draws, as well as additional incentives offered to branch staff. Branding and Intellectual Property We believe SINGER ® is an established and iconic brand in many Asian markets with strong customer recognition and loyalty handed down from generation to generation for over 100 years. We believe customers associate the SINGER ® brand with trust, quality and affordability (due to our consumer finance offerings). These positive, emotional tie-ins result from our long-term presence in the region and commitment to improving the local community and people’s everyday lives. Singer License Agreement Singer Asia has an exclusive perpetual license agreement (the “ Singer License Agreement ”) with The Singer Company Limited S.ar.l., which is the owner of the SINGER ® trademark (the “ Trademark ”). The Singer Company Limited S.ar.l. is a wholly-owned indirect subsidiary of SVP Holdings, the ultimate owner of the Trademark. Both The Singer Company Limited S.ar.l. and SVP Holdings are third parties and not related to Singer Asia. Under the Singer License Agreement, Singer Asia has an exclusive license in the Asia-Pacific territory (excluding Japan and Korea) to use the Trademark in the Singer Asia company name and in its subsidiary company names, on its stores and depots, in connection with its sales and promotional activities, and on existing and new products and services that Singer Asia manufactures, assembles or provides, or which it sources from third parties (with certain exceptions for sewing products and ironing presses, as described

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below). Singer Asia may also sub-license other parties, including its subsidiaries, affiliates and third-party companies to use the Trademark in the territory on their sales outlets, in connection with sales and promotional activities and on products and services, but, other than subsidiaries, not in their company names. The territory comprises: Australia, Bangladesh, Bhutan, Brunei, Cambodia, China, India, Indonesia, Laos, Malaysia, Maldives, Mongolia, Myanmar, Nepal, New Zealand, Pakistan, Papua New Guinea, the Philippines, Singapore, Sri Lanka, Taiwan, Thailand, Vietnam and the Pacific Islands (but does not include Japan and Korea). As consideration for the foregoing license, Singer Asia pays a royalty in an amount equal to 1.0% of consolidated revenue of Singer Asia, calculated according to U.S. GAAP. A royalty of US$2.6 million, US$3.3 million and US$3.4 million was paid in 2010, 2011 and 2012, respectively. Either Singer Asia or The Singer Company Limited S.ar.l. may terminate the Singer License Agreement in the event of a material breach by either party of any of its obligations or responsibilities if not cured within 90 days from the date of notice of material breach. In addition, the Singer License Agreement may be terminated if Singer Asia becomes insolvent; Singer Asia becomes party to any bankruptcy, insolvency, liquidation or receivership proceedings; Singer Asia assigns its assets for the benefit of creditors or is unable to meet its debts; Singer Asia is nationalized by the government; a competitor of SVP Holdings (that is, a competitor who manufactures or whose principal business is the sourcing or distribution of consumer, artisan and industrial sewing machines and all related sewing products and accessories) acquires a direct or indirect controlling interest in Singer Asia; or a law or regulation restricts Singer Asia’s right to make payments as provided for in the Singer License Agreement and the agreement cannot be modified to the satisfaction of both parties. Sewing Products Distribution Agreement Singer Asia has an exclusive perpetual distribution agreement (the “ Singer Distribution Agreement ”) with Singer Sourcing Ltd., a wholly-owned indirect subsidiary of SVP Holdings, for the distribution of SINGER ® brand sewing machines and related products and accessories, and ironing presses, in certain Asia-Pacific countries (namely, Sri Lanka, Bangladesh, Pakistan, India and Thailand − these are countries where our Group currently have operations in). Both Singer Sourcing Ltd and SVP Holdings are third parties and not related to Singer Asia. Sewing products are not included under the Singer License Agreement as described above. The agreement includes all of our existing countries of operation, being Sri Lanka, Bangladesh, Pakistan, India and Thailand. As we enter new markets in the territory, as enumerated above, the agreement may also be extended to these additional markets if SVP has not already appointed, or is not planning to appoint another sewing machine distributor in that market. Under the terms of the Singer Distribution Agreement, Singer Asia is not permitted to sell non-SINGER ® sewing products and may not, except in India for certain models, purchase sewing machines from third parties. Either Singer Asia or Singer Sourcing Ltd. may terminate the sewing machine distribution agreement in the event of a material breach by the other party of any of its obligations or responsibilities if not cured within 90 days from the date of notice of material breach. In addition, the agreement may be terminated if either Singer Asia or Singer Sourcing Ltd. become insolvent; Singer Asia becomes party to any bankruptcy, insolvency, liquidation or receivership proceedings; Singer Asia assigns its assets for the benefit of creditors or is unable to meet its debts; Singer Asia is nationalized by the government; or a competitor of SVP Holdings (that is, a competitor who manufactures or whose principal business is the sourcing or distribution of consumer, artisan and industrial sewing machines and all related sewing products and accessories) acquires a direct or indirect controlling interest in Singer Asia.

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Other House Brands We own the Sisil and Unic brands, which we use in Sri Lanka. The Sisil brand is a Sri Lankan heritage brand, being the first to launch refrigerators in Sri Lanka. The Sisil brand was purchased in December 2000. The Sisil brand is now used in Sri Lanka on many home appliance products, especially cooling products, and as a store brand for 49 Sisil World retail shops. The Unic brand is also a Sri Lankan heritage brand and was first known for portable radios. We purchased this brand in April 2006 and have since extended it to include many consumer electronics products. Intellectual Property We rely on a combination of trademarks, service marks, copyright protection and domain name registrations to establish and protect our brand names and logos, marketing designs, Internet domain names and our intellectual property in works eligible for copyright. See “ Appendix C – List of Material Properties and Intellectual Property Rights of our Group ” of this offering document for details of the material intellectual property rights of our Group in our countries of operation. Except as disclosed herein, we do not own any material trademark or patent and have not paid or received any royalties for any licenses or use of any intellectual property. Suppliers A critical element of our marketing strategy is our ability to offer a broad range of high quality products that will attract customers to our retail stores. We have developed strong business relationships with several of the world’s leading manufacturers of home appliances, consumer electronics and IT products. In certain instances, we enter into agreements with domestic manufacturers for the supply of certain items, such as furniture and vending machines. These relationships and our significant market share in our respective countries of operation allow us to negotiate favorable terms and procure preferred partner privileges, including marketing subsidies from key suppliers. Also important to us is the establishment of strong relationships with suppliers of raw materials and parts that we subsequently use to manufacture and assemble our house-brand products. We seek suppliers that provide high quality materials and components at competitive prices to assure the reliability of our products, as well as affordable pricing to our customers. We import parts from a range of countries, including China, India, Indonesia, Malaysia, Singapore, Taiwan and Turkey. Major Suppliers In 2010, our top three suppliers were, Haier Electric (Thailand) Public Company Limited, accounting for 9.4% of our purchases; TCL Overseas Marketing (Macao) Co. Ltd., accounting for 6.6% of our purchases; and Sanyo (Thailand) Co. Limited, accounting for 3.5% of our purchases. In 2011, our top three suppliers were TCL Overseas Marketing (Macao) Co. Ltd., accounting for 10.2% of our purchases; ADT Online Co. Limited, accounting for 4.6% of our purchases; and Samsung Electronics Co. Limited, accounting for 3.3% of our purchases. In 2012, our top three suppliers were TCL Overseas Marketing (Macao) Co. Ltd., accounting for 8.0% of our purchases; Kelon International Inc., accounting for 4.2% of our purchases; and Samsung Electronics Co. Ltd., accounting for 3.6% of our purchases. Our aggregate purchases from our top ten suppliers in the past three years have accounted for an average of 34.2% of our purchases over this period. We are not critically dependent on any one supplier.

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Supply Chain and Inventory Management Subject to certain guidelines and regulations, the individual entities in each of our countries of operations are responsible for purchasing and managing their inventory. For retail operations in Sri Lanka, Bangladesh and Pakistan, the inventory levels and, therefore, purchase volumes, are benchmarked against three and a half months cost of sales based on a forward sales projection. These are updated monthly. This includes all inventory items, including finished goods, spare parts, raw materials, work-in-progress, stock-in-transit and second-hand items, regardless of location, including stores, central warehouses, regional warehouses or factories. The inventory benchmarks in the direct selling operations in Thailand and wholesale business in India are two and a half months and two months of the cost of sales, respectively, reflecting their higher percentage of locally sourced products. Inventory dashboards and inventory management reports track the key performance indicators relating to inventory levels, inventory ageing, slow and fast moving items, sales forecasting and inventory provisions. In respect of purchases from certain countries such as China, we provide a central coordination function to ensure the best prices through group price negotiation, the highest-quality through pre-production evaluation and post-production sample testing, superior service through negotiated order quantities, delivery time, packaging standards, shipping arrangements and documentation. Payment is conducted mostly via letter of credit. The majority of these are payment onsite. We generally do not operate transportation vehicles. Delivery from the central warehouse to regional warehouses and stores is outsourced and final delivery to the customer is arranged and paid for by the store manager. The central warehouses are normally located at the factory premises in those countries where we have factories. Competition The HCD retail industry in our countries of operation is highly competitive. We believe that the principal bases for competition for HCDs include affordability, product quality, brand awareness, convenience, retail experience and customer service. We distinguish ourselves from our competitors with our competitive prices, availability of credit, attractive range of products, high quality after-sales customer service and good store locations. We believe that the barriers to entry into the HCD retail industry in our countries of operation are relatively high, given, among other factors, the established brand loyalty of incumbent players, the scarcity of available prime store locations and high start-up costs. In addition, we believe that our years of experience in our countries of operation provide us with a unique understanding of the local market and customer preferences. The extent of the competition that we encounter varies by country, depending on factors such as the number and strength of the competitors, brand power and product offerings. Sri Lanka We are the leading market HCD retailer in Sri Lanka 1 with approximately 36.2% market share in terms of sales value and also the largest HCD retailer by number of stores in 2012. We compete primarily with Abans and to a lesser degree with Damro, Softlogic and Browns. Abans has the second largest number of stores (with 312) in 2012 and the second largest market share by sales value of 33.9%. The HCD retail industry in Sri Lanka is concentrated, with the top five players accounting for approximately 85.0% of the total market by sales value in 2012.

1

Source: The Nielsen Company.

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Bangladesh We are the market leading HCD retailer in Bangladesh 1 with approximately 24.7% market share in terms of sales value and the largest HCD retailer by number of stores in 2012. Our closest competitors are Walton and Butterfly Marketing, which are the second and third largest players with 19.0% and 15.1% market share, respectively. Other competitors include My One and Electra. Like Sri Lanka, the HCD retail industry in Bangladesh is concentrated, with the top 5 players accounting for approximately 70.0% of the total market by sales value in 2012. Pakistan We have the largest retail network in Pakistan 2 with 160 retail stores and the largest market share with approximately 8.0% of total market sales value in 2012. Our closest competitor, United Sales (Pvt.) Ltd, has 72 retail stores, with 2.0% of market share by sales value, as at 2012. The HCD retail industry in Pakistan is fragmented, with the top five players accounting for only approximately 11.0% of the total market by sales value in 2012. There are a number of local HCD manufacturers which distribute primarily through independent dealers. India The international brands selling sewing products in India are primarily us and Usha. There are other smaller international brands such as Brother, Novel and Bernina and a number of local Indian brands that generally operate on a regional basis. Sewing products are largely distributed by independent dealers, although we and Usha have a small number of retail stores located in major centers. Of the total sewing products market we had the second largest market share, accounting for approximately 20.2% of the total market by sales value in 2012, while Usha was the market leader with approximately 33.8% market share by sales value. In the small appliance sector, which we entered in 2011, the sales and market share are growing rapidly but are still low compared to the market leaders, Philips and Bajaj. Thailand In Thailand, we are the leading direct seller of HCDs with approximately 61.0% market share by sales value in 2012. Our growth in Thailand can be attributed to our efforts to expand our grassroots customer base among consumers and small traders/shops, and to increasing our sales force, and the introduction of new products and services. The second largest participant is Mida Assets, with an approximately 9.7% market share in 2012. There are also a number of smaller, regional competitors. Singer Thailand is not a significant player in the retail market that accounts for the majority of HCD sales.

1 2

Source: The Nielsen Company. Source: The Nielsen Company.

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Awards and Accreditations The status of the SINGER ® brand in the region has been recognized by numerous awards. We believe these accolades, consistently awarded to us, are a validation of our customer-centric retail philosophy and our commitment to be a responsible corporate citizen.
Award Brand of the Year • Overall Winner • #1 HCDs Brand • Youth Brand of the Year Best Corporate Citizen Ceylon Chamber of Commerce 2012 2012 2012 By A.C. Nielsen and Sri Lanka Institute of Marketing Period 2005-2013 2005-2013 2005-2011, 2013

Sri Lanka

• Overall 2nd place • Category winners ‘Community Relations and CSR’ • Category winners ‘Customer and Supplier Relations’ Best E-Commerce Website – 2nd place Top 20 of the Most Favorite Sri Lanka Websites Sri Lanka Annual Report Awards – Gold Award, Trading Sector Most Respected Company Best Presented Account Report Awards – 3rd prize manufacturing sector Certificate of Merit for Best Presented Accounts and Corporate Governance Disclosures Awards 5th Highest importer to Bangladesh (via Chittagong Port) Consumer Choice Award for the best refrigerator University of Moratuwa University of Moratuwa

2009 2009

Institute of Chartered Accountants of Sri Lanka Business magazine “Artha Kantha” Institute of Chartered Accountants of Bangladesh South Asian Federation of Accountants

2012

2009 2012

Bangladesh

2012

National Board of Revenue

2011

Consumers Association of Pakistan Consumers Association of Pakistan CPC-Help Line Trust Consumer Protection Council His Majesty King Bhumibol Adulyadej of Thailand Consumer Protection Board Electricity Generating Authority of Thailand Stock Exchange of Thailand

2008 2007 2010 2008 2004

Pakistan

Consumer Choice Award for the best Geysers and Sewing Machines Putting the Consumer First Corporate Social Responsibility Award Garuda Award for the Thai company’s contribution to the social welfare of the people of Thailand

Thailand

Consumer Protection: Protect consumer rights in advertising, labeling and contract Highest efficiency in Energy Saving of one-door refrigerator during the last 12 years Stock Exchange of Thailand – Best Investor Relations Awards

2008 2008

2011-2012

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Properties We lease the majority of the trading space, warehouses, service centers and corporate offices we use. As at March 31, 2013, we had 1,152 short-term lease agreements in place. In some locations, particularly in India and Thailand, we benefit from a number of low-rent long-term leases. In 2010, 2011 and 2012, our total rental expense (including other occupancy costs such as utilities, rates and taxes) amounted to US$8.2 million, US$10.4 million and US$10.4 million, respectively. We own a total of 88 stores as well as six factory and warehouse sites. The total book value of these land and buildings as at March 31, 2013 was US$44.2 million. See “ Appendix C – List of Material Properties and Intellectual Property Rights of our Group ” of this offering document for details of our material property interests in Sri Lanka, Bangladesh, Pakistan, India and Thailand. Seasonality Our sales follow the traditional seasonal shopping patterns in the countries in which we operate, with increased sales being recorded around religious, cultural and country-specific holidays such as the Sri Lankan New Year in March and April, the Eid al-Fitr festivities following Ramadan in Bangladesh and Pakistan during the ninth month of the Islamic calendar, and Hindu and Buddhist holidays in India and Thailand, respectively. Employees As at March 31, 2013, we had 8,537 employees across Sri Lanka, Bangladesh, Pakistan, India and Thailand. The following table provides the number of our full-time employees, by location, as at the dates indicated. As at December 31, By Location Sri Lanka . . Bangladesh Pakistan . . . India . . . . . . Thailand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2010 1,602 829 1,309 92 3,663 7,495 2011 1,717 926 1,295 97 3,693 7,728 2012 1,876 969 1,363 136 4,146 8,490 March 31, 2013 1,913 945 1,397 152 4,130 8,537

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The following table sets forth our employees by function as at the dates indicated. As at December 31, 2010 Shop management and staff . Direct sales staff, canvassers Sales and marketing . . . . . . . Corporate management and administration . . . . . . . . . . . . . Credit management . . . . . . . . Distribution and service . . . . . Manufacturing. . . . . . . . . . . . . ........ ........ ........ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,025 2,441 494 509 333 607 1,086 7,495 2011 2,129 2,432 557 538 370 634 1,068 7,728 2012 2,315 2,773 622 558 415 703 1,104 8,490 March 31, 2013 2,422 2,724 645 545 409 678 1,114 8,537

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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The canvassers in our direct selling business are employees of Singer Thailand, and Singer Thailand contributes to the Social Security Fund on their behalf. However, the canvassers do not receive a fixed basic salary and all of their cash remuneration is based on commissions and are, therefore, variable. In addition to the employees listed above, as at December 31, 2012 and March 31, 2013, there was a total of 4,414 and 4,476 staff, respectively, who were engaged by the branch managers in the retail locations in Sri Lanka and Bangladesh and who are not considered our employees. Branch managers employ these staff members directly and thus, the staff is not bound contractually to any employment contract with us. The total staff complement (comprising employees and non-employees) was 12,904 as at December 31, 2012 and 13,013 as at March 31, 2013. As at March 31, 2013, we had entered into a number of collective bargaining agreements with labor unions in Sri Lanka which cover 635 unionized employees in Sri Lanka. We consider our relations with our employees and with their respective labor unions to be good. As at March 31, 2013, pursuant to the policies of our Company and the requirements of the law in the various jurisdictions in which we operate, we have provided a total of US$12.9 million for pension, retirement or similar benefits for our employees. Staff Training We have implemented a number of strategies and programs designed to motivate, train, guide and evaluate our employees with the objective of having qualified, loyal staff to boost sales and provide a quality customer experience. We place strong emphasis on the quality of our employees. In 2009, we established the SRA, a program that seeks to train, motivate and develop our employees. Graduates of SRA receive a Singer retail diploma after covering areas such as sales skills, product knowledge, store management, service center administration, accounts verification, retail internal audit, retail district management and retail area management. The objectives of the SRA are as follows: • • • • • • • • Ensure that the best available staff are hired for each position; Ensure implementation of comprehensive and effective training programs; Improve productivity; Establish career development opportunities; Establish effective mechanisms for performance evaluation; Identify and reward individuals that perform above expectations; Identify and coach individuals that perform below expectations; and Improve job satisfaction and company loyalty, reducing staff turnover.

In order to monitor employee development, we use a monthly “Balanced Scorecard” and the “Retail Ladder”. The Balanced Scorecard rewards overall performance based on a range of criteria, including sales, collections, merchandising, inventory management, daily cash management and remittances, store administration and staff morale. The Retail Ladder uses the results of the Balanced Scorecard to determine the rating of a branch, district or area. The rating of each branch, district and area has a significant influence on all aspects of performance

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evaluation, including performance recognition, promotion and career development, ongoing financial rewards, annual bonuses, invitations to annual conferences, training requirements, coaching requirements and disciplinary action. Cash and Receivables Management Policies Under our cash management policies, the branch manager of each Singer store must deposit collected cash with a designated bank on a daily basis. In Thailand there are no stores and cash is collected directly from customers, and canvassers must issue receipts to customers when cash is collected, and the depot manager must perform necessary reconciliations between cash and receipts. On a weekly basis, each store or depot is required to complete a weekly return, submitted electronically to the head office of their respective country via the Singer Information System. The Singer Information System also performs an automatic reconciliation to balance receipts, cash and receivables, and produces exception reports. Using these reports, we are able to monitor branches which fail to follow our cash management policies correctly or in a timely manner, and we follow up rigorously any short remittance by a branch manager. Any shortfall between the cash collected by the direct selling depot manager or store branch manager and the amount remitted to Singer Thailand will be treated as a short remittance. If the shortfall is ultimately not repaid, the depot manager or branch manager may be replaced, and the amount unremitted will be offset against the direct selling depot or store branch manager’s security deposit and any shortfall will be treated as bad debt. As the amount of bad debt expense as a percentage of revenue was only 1.0%, 1.2% and 0.9% for the three years ended December 31, 2010, 2011 and 2012, respectively, our management considers that the cash management policy is effective in ensuring that cash collected is reconciled and properly accounted for. With regard to receivables management, we manage our credit portfolio using the Credit Life Cycle, which is part of the Singer Financial Manual. See “ – Singer Financial Manual ” below. Singer Financial Manual All of our operations adhere to the policies set out in our Singer Financial Manual (“ SFM ”). The SFM is a concise iteration of all of the policies and procedures pertaining to the financial functions and approval levels within our Group. The SFM covers a broad range of topics to ensure solid internal control and compliance with accounting policies, enabling management at our headquarters to control and monitor operations of our country subsidiaries and their respective sales networks efficiently. It places particular emphasis on strict reporting and approval guidelines, as well as relevant responsibilities to implement and monitor these policies and includes the key step-by-step approach to managing the credit process, the Credit Life Cycle. See “ – Consumer Finance – Credit Approval Process, Monitoring and Collections ”. Our audit committee conducts regular reviews of our operations to ensure compliance with the SFM. Our CFO is responsible for the overall proper implementation of the SFM while executive officers regularly visit the operating countries to ensure compliance with the SFM. These various entities and individuals apply a risk-based audit approach to ensure that asset misappropriation and policy violations are presented or detected in a timely manner as per the SFM. In addition, our internal audit department reviews compliance with SFM policies. Singer Information System In 2010, we commenced the implementation of a new information system, the Singer Information System. This system was developed in conjunction with IFS, a Swedish company that develops, supplies, and implements IFS Applications™, a component-based extended enterprise resource planning suite built on service-oriented architecture technology. The Singer Information System now operates in all of the retail and direct selling depots in Sri Lanka, Bangladesh, Pakistan and Thailand. Singer India uses a different accounting and inventory information system, namely Tally, and the Singer Information System is designed for businesses that provide hire purchase, which 157

we do not offer in India. We also use the Singer Information System for the service centers, warehouses, wholesale business, credit management, inventory management, customer relationship management, treasury management, as well as financial reporting and the general ledger. The Singer Information System is fully integrated and online. Our ERP Singer Information System is exclusive to Sewko in our operating countries. IFS is contractually prohibited until 2018 from providing similar software services to our competitors. In 2010, 2011 and 2012, we invested US$1.8 million, US$1.9 million and US$3.4 million, respectively, in our IT systems, including operating and maintenance costs. Corporate Social Responsibility We are firmly committed to being a good corporate citizen. We have established procedures to help ensure compliance with all applicable statutory and regulatory requirements and with our Code of Business Conduct with respect to relations with customers, suppliers and fellow employees. We also comply with applicable national and international environmental standards to minimize any impact operations may have on the environment. While the needs of the different communities vary, four of the most common needs are addressed through: donations and support for the disadvantaged; donations, sponsorship and support for the elderly; donations and support for medical facilities and programs, particularly in rural and outlying areas; and donations, sponsorship and support for education and youth. For example, to encourage IT literacy and awareness, we introduced the “Knowledge Bus” in Sri Lanka. The Knowledge Bus travels across the Sri Lanka, catering primarily to the rural communities, and provides underprivileged children with hands-on training by qualified instructors on how to operate computers. During 2012, the Knowledge Bus visited 127 semi-urban and rural schools. In addition, with the intention of helping local residents secure employment, Singer Asia operates 121 sewing schools that provide subsidized training. The schools typically teach young ladies to operate sewing machines, awarding graduates qualifications to assist them in securing work in the garment and related industries. Insurance We have purchased insurance policies to cover a variety of risks that are relevant to our business needs and operations. We maintain property insurance in respect of all leased and owned real property, our factory machinery, inventory and equipment. We maintain product and other liability insurance for our operations, and insurance relating specifically to directors’ and officers’ liability. These insurance policies have specifications and limits that we believe are appropriate in view of our exposure to the risk of loss, the cost of such insurance, applicable regulatory requirements and the prevailing industry practice in each country where we operate. We also maintain various insurance policies for employees, such as group-term life insurance with total permanent disability benefits, and group accident, hospital and surgical policies, as well as fidelity insurance. We believe that the insurance policies and coverage we have subscribed for are adequate for our business needs and operations. We periodically conduct reviews of our insurance coverage. Research and Development We do not conduct any material research and development activities. Health, Safety and Environmental Issues We value the health of our employees and place great emphasis on safety at all our stores, offices, factories and warehouses. We ensure that new employees are advised of our safety and health policy and we provide them with the necessary in-house training.

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Legal Proceedings We are engaged in the ordinary course of business either as a defendant or a plaintiff in a variety of lawsuits or other contested legal proceedings in a number of jurisdictions. Other than the matter(s) disclosed below, there are no material pending claims, arbitration or legal proceedings against us. Our Directors have no knowledge of any proceedings pending, known to be contemplated or threatened by or against us or any of our subsidiaries or associates or any facts likely to give rise to any litigation, claims or proceedings which may have occurred in the 12 months immediately preceding the date of lodgment of this offering document with the Authority, and which could have a significant or material effect on our financial position, profitability or business. We believe that any ultimate, uninsured liability with respect to any litigation known to us will not have a material adverse impact on our financial condition or results of operations. The amount spent in settlement or for assessed damages was not material in 2010, 2011 and 2012. Singer India In May 2005, Singer India was registered as a “Sick Company” (“ Sick Company ”) by the Board for Industrial & Financial Reconstruction (“ BIFR ”) pursuant to the Sick Industrial Company’s (Special Provisions) Act of 1985. The need for BIFR intervention reflected local mismanagement. A succession of local operating managers tried to implement a number of business strategies to grow Singer India’s wholesale business, but these strategies led to levels of debt incurred that Singer India could not service. As a result, Singer India breached certain financial covenants and was in arrears on interest and principal repayments with respect to various financing agreements. The registration of Singer India as a Sick Company provided legal protection against creditors. In April 2008, the BIFR approved a restructuring plan for Singer India which provided for an equity infusion by us of INR 83.5 million (US$1.72 million) and relief from certain claims by secured and unsecured creditors. Singer India’s secured creditors also approved the plan and received a one-time settlement of all amounts due. None of the directors involved in the multiple failed business strategies leading to the default in payments by Singer India were involved with the operation of Singer India by the time the company was registered as a Sick Company in 2005. In accordance with the BIFR plan, we remitted INR40.2 million (US$780,000) in March 2009, and INR28.4 million (US$578,000) in May 2009, resulting in us owning a 90.1% interest in Singer India. We subsequently sold shares from this holding, reducing our percentage of ownership of Singer India to 85.9% as at December 31, 2009. In February 2010, we made a further infusion of INR14.9 million (US$322,000) to meet the requirements of the BIFR. As at December 31, 2012, we had sold down our ownership in Singer India to the 75.0% level required to maintain the Singer India stock exchange listing. Subsequently, on February 28, 2013, Singer India was formally deregistered by the BIFR. Since being deregistered by the BIFR, Singer India has not breached any financial covenants. Singer Sri Lanka On or around November 28, 2007, a consignment order containing ‘Singer Technologies’ branded color television sets, which had been ordered by Singer (Sri Lanka) PLC in the course of its normal business operations, arrived in the Port of Colombo. The consignment was valued at approximately LKR20 million (US$181,000). The Sri Lanka customs office refused to release the consignment of goods and initiated an investigation into the valuation of the goods in the context of the royalty payments which were being paid to another Singer related company. In order to obtain release of the goods, Singer (Sri Lanka) PLC had to provide a bank guarantee in favor of the customs office whereupon the goods were released to Singer (Sri Lanka) PLC. On or around January 23, 2008, Singer (Sri Lanka) PLC filed a writ application against certain officers of Sri Lanka Customs and the Controller of Exchange at the Court of Appeal claiming that the detention of the containers by Sri Lanka Customs was arbitrary, malicious and unlawful and seeking an order to quash the decision of the respondents to detain the consignment and prevent 159

them from taking any steps in respect of the consignment on the basis that Singer (Sri Lanka) PLC had acted in violation of any law. The Court of Appeal on September 3, 2013 dismissed the application filed by Singer (Sri Lanka) PLC, which would enable the customs inquiry to be proceeded with. Singer (Sri Lanka) PLC intends to file an appeal at the Supreme Court of Sri Lanka against this decision. We do not view this matter as material. Singer Pakistan On August 30, 2012, the board of directors of Singer Pakistan approved a rights issue (the “ 2012 Rights Issue ”) which required a majority vote. All of the directors voted in favor of the 2012 Rights Issue with the exception of Mr. Rasheed Y. Chinoy, alternate director for Mr. Yussuff Rasheed Chinoy, and Mr. Abdul Hamid Dagia, who is a nominee of Janhangir Siddiqui & Co. Limited, which holds approximately 17.4% of Singer Pakistan and two other allied shareholders. Mr. Chinoy and Mr. Dagia dissented to the 2012 Rights Issue and did not sign the financial projections that accompanied the proposed 2012 Rights Issue. Following their dissent, Mr. Chinoy and Mr. Dagia formally lodged a complaint to the Karachi Stock Exchange regarding the proposed 2012 Rights Issue, citing that the financial projections had not, as required, been signed by all of the directors of Singer Pakistan. In response, on September 27, 2012, the Company applied to the Securities and Exchange Commission of Pakistan (“ SECP ”) for a waiver from Rule 5(ii) of the Companies (Issue of Capital) Rules 1996, which requires that all the directors present at a meeting in which a rights issue is approved sign the financial projections. Before the SECP decided on the application, Mr. Chinoy and Mr. Dagia filed Suit No. 1507 of 2012 in the High Court of Sindh at Karachi (the “ High Court ”) against Singer Pakistan, its chief executive officer and its chief financial officer requesting the court to, among other things, grant an injunction restraining Singer Pakistan from proceeding with the proposed 2012 Rights Issue, to order steps be taken by Singer Pakistan, its chief executive officer and its chief financial officer to increase the profitability of the company, to declare that Singer Pakistan may not engage in the business of hire purchase, and that royalty payments made by Singer Pakistan be canceled and that the chief executive officer and its chief financial officer be terminated. On November 5, 2012, through an order passed ex parte , the High Court granted an interim injunction temporarily restraining Singer Pakistan from issuing the rights shares. Singer Pakistan has filed its response requesting the High Court to vacate the injunction and allow Singer Pakistan to proceed with the 2012 Rights Issue. The matter is now at the hearing stage and the proceedings before the High Court are pending. We do not view this matter as material. If the High Court approves the rights issue, we expect to have enough funds (excluding IPO proceeds) to proceed with the rights issue. Singer Thailand Our Company obtained on July 12, 2013 a waiver from the Office of the Securities and Exchange Commission, Thailand from the requirement to make a tender offer for all the shares of STL. The condition for the waiver is that our Company acquires the shares of Singer Asia within six months of the date of waiver. As required under Securities and Exchange Act, our Company has to report the acquisition of its shares in Singer Asia to the Office of the Securities and Exchange Commission, Thailand within three business days following the date of such acquisition. Our Company submitted the report on such acquisition to the Office of the Securities and Exchange Commission, Thailand on 17 September 2013, which was within three business days after the date of the acquisition. Applicable Laws and Regulations See “ Appendix A – Regulation ” of this offering document for a description of the laws and regulations of Sri Lanka, Bangladesh, Pakistan, India and Thailand applicable to our Group. 160

INDUSTRY OVERVIEW
This report has been prepared by The Nielsen Company (Singapore) Pte Ltd (“ Nielsen ”) as an Industry Consultant, for the purposes of inclusion in this offering document. Nielsen information reflects estimates of market conditions based on samples and is prepared primarily as a marketing research tool to use together with other sources of available information in making marketing decisions. This information should not be viewed as a basis for investments and references to Nielsen should not be considered as Nielsen’s opinion as to the value of any security or the advisability of investing in the Company. While the Company believes that the information and data included in this section are reliable, the Company cannot ensure the accuracy of the information or data, and the Company and the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager and any of their affiliates or advisors have not independently verified this information or data. You should not assume that the information and data contained in this section is accurate as at any date other than September 24, 2013 except as otherwise indicated. This section contains forward-looking statements, which necessarily involve risks, uncertainties and assumptions. Forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied upon by any prospective Shareholder as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Due to various risks and uncertainties, actual events, circumstances and results are difficult or impossible to predict and may differ materially from these forward-looking statements. There can be no assurance that any particular forward-looking statement will be realized and you should not place any undue reliance on these forward-looking statements. You should also be aware that since September 24, 2013, there may have been changes in the HCD and consumer finance industries and the various sectors therein which could affect the accuracy or completeness of the information in this section. Introduction Singer Asia operates in five countries: Sri Lanka, Bangladesh, Pakistan, India and Thailand, with a combined population of approximately 1.6 billion as at December 31, 2012. Singer’s three largest markets in terms of revenue throughout 2012 were Sri Lanka, Thailand and Bangladesh, and GDP per capita between 2008 and 2012 in these countries grew at a CAGR of 13.5%, 5.6% and 12.6%, respectively. Singer is engaged in the store-based retailing of HCDs in Sri Lanka, Bangladesh and Pakistan. In India, Singer is engaged in the wholesaling of sewing machines, and has recently entered into the small appliances market. In Thailand, Singer sells HCDs via the direct selling channel. Singer also provides consumer lending services in each of its countries of operation, except India. This report describes in detail the macroeconomic environment in each of Singer’s countries of operation, and provides an overview of the industries that Singer operates in. SRI LANKA Macroeconomic Environment Population Sri Lanka had a population of approximately 20.7 million as at 2012. The working age group (15-59 years old) is about 67.0% of total population, while the youth and older age groups comprise 25.0% and 8.0%, respectively. The median age of the population is 31 years old. Nearly 14.0% of the population resides in urban areas, with an annual rate of urbanization close to 1.1%. The literacy rate is 91.2% and the unemployment rate is 5.1%.

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The table below sets forth Sri Lanka’s population and growth. Population (in millions) Historic 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CAGR 08-12 (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Forecast 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CAGR 13-15 (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Source: International Monetary Fund

Growth (%)

20.1 20.2 20.4 20.5 20.7 –

0.8 0.8 0.8 0.7 0.7 0.7

20.8 21.0 21.1 –

0.7 0.7 0.7 0.7

Living Conditions There are currently approximately 5.1 million households in Sri Lanka, with an average household size of four persons. 91.7% of houses are made of permanent materials. About 87.7% of households have access to safe drinking water and 85.3% of households use electricity as the major source of lighting. Economy Overview The Sri Lankan economy grew at a CAGR of 6.6% over the past five years. While growth slowed to 3.5% in 2009 due to the global financial crisis, economic activity rebounded strongly following the end of the war and the grant of a $2.6 billion loan to Sri Lanka by the IMF, resulting in three straight years of high growth between 2010 and 2012. Large-scale development and reconstruction projects by the government, along with investments from the private sector helped to fuel growth in the country, whilst efforts have been made to develop small and medium enterprises and to increase productivity in the agriculture sector. Sri Lanka’s growth rate dropped slightly to 6.8% in 2012 from 8.3% in 2011, due to a drop in imports and exports and slower expansion in services. There was also currency depreciation of about 15.0% in the first half of 2012, while inflation reached a high of 9.2% in 2012, which put further pressure on prices. Food inflation was even higher as a result of drought in some parts of the country. The government introduced monetary tightening policies in the latter half of 2012 to ease the pressure on economy. The economy is expected to grow at a steady pace and is estimated to achieve a CAGR of 6.5% over the next three years. The table below sets forth Sri Lanka’s GDP historical and projected data.

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GDP (in billion LKR) Historic 2008. . . . . . . . . . . . . 2009. . . . . . . . . . . . . 2010. . . . . . . . . . . . . 2011 . . . . . . . . . . . . . 2012. . . . . . . . . . . . . CAGR 08-12 (%) . . . Forecast 2013. . . . . . . . . . . . . 2014. . . . . . . . . . . . . 2015. . . . . . . . . . . . . CAGR 13-15 (%) . . . 8,633 9,826 11,083 – 4,411 4,835 5,604 6,543 7,526 –

GDP Growth (%)

GDP Real Growth (%)

GDP per capita (LKR)

GDP per capita (US$)

23.2 9.6 15.9 16.7 15.0 14.3

6.0 3.5 7.8 8.3 6.8 6.6

219,604 238,870 274,694 318,524 363,934 13.5

2,027 2,078 2,430 2,881 2,852 8.9

14.7 13.8 12.8 13.3

6.7 6.5 6.5 6.5

414,596 468,712 525,082 12.5

3,249 3,673 4,114 12.5

Source: The Nielsen Company and International Monetary Fund
Note: US$ figures converted from LKR based on average annual exchange rates.

Household Income and Expenditure Household incomes have risen considerably in Sri Lanka in the past few years. Household expenditures have also increased but at a relatively slower rate compared to household income. Income and Expenditure in Sri Lanka (as at 2010) • Average monthly income per household: LKR 36,451 o o • Average monthly income per household – Urban sector: LKR 47,783 Average monthly income per household – Rural sector: LKR 35,228

Average monthly expenditure per household: LKR 31,331 o o Mean household expenditure per month – Urban sector: LKR 44,928 Mean household expenditure per month – Rural sector: LKR 29,423

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The table below sets forth Sri Lanka’s historical average monthly income per household and average monthly expenditure per household. Average monthly income per household (LKR) 2008 . . . . . . . . . . . . . . . . . . 2009 . . . . . . . . . . . . . . . . . . 2010 . . . . . . . . . . . . . . . . . . 2011 . . . . . . . . . . . . . . . . . . 2012 . . . . . . . . . . . . . . . . . . CAGR 08-12 (%) . . . . . . . . 29,309 32,679 36,451 41,554 47,372 12.8 Average monthly expenditure per household (LKR) 25,454 28,228 31,331 34,934 38,951 11.2 4.1 4.1 4.0 4.0 4.0 –

Average household size

Source: The Nielsen Company and Department of Census and Statistics – Sri Lanka
Note: The household income and expenditure survey is conducted by Department of Census and Statistics – Sri Lanka once in every three years and was last conducted in 2010. The above numbers for other years are estimated based on the three-year CAGR from 2007 to 2010 and projections.

Retail Positive market sentiments, economic growth, and infrastructure development across the country in the post-war period have contributed to the boom in the retail industry. Further, the development of new townships across the country has resulted in opportunities for the setting up of retail businesses. Sri Lanka’s retail industry is expanding rapidly, especially with the increase in supermarkets, electronics and appliance retail stores, apparel stores, footwear chain stores and other retail outlets. Traditional retailers are feeling the need to improve their marketing and selling strategies, such as improving merchandising and displays and introducing online selling channels, to compete with modern retail chains. There is an increased awareness among Sri Lankan consumers about global trends, and they are becoming increasingly modern in their outlook. Their consumption patterns and shopping behaviors have evolved in tandem. This has resulted in a boom in organized retail, with rapid expansion across different retail formats and locations, as organized retailers offer consumers convenience and a wide variety of options to suit their evolving needs.

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The table sets forth our historic and forecast retail sales: Retail value sales (in Billion LKR) Historic 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CAGR 08-12 (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Forecast 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CAGR 13-15 (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,318 3,631 3,963 – 11.4 9.4 9.2 9.3 1,931 1,943 2,194 2,707 2,979 – 27.0 0.6 12.9 23.4 10.1 11.5 Growth (%)

Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209

Household Consumer Durables (“HCD”) Retailing Market Overview • The annual value of the consumer electronics and appliance market in Sri Lanka is estimated to be LKR 70 Billion.

The table below sets forth our sales of store-based HCD retailers. HCD Retail value sales (in Billion LKR) Historic 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CAGR 08-12 (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Forecast 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CAGR 13-15 (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77.24 86.51 97.76 – 10.0 12.0 13.0 12.5 39.16 39.06 45.25 57.14 70.22 – 25.1 -0.2 15.8 26.3 22.9 15.7

Growth (%)

Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209

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Consumer durables ownership is high in Sri Lanka’s households. Almost all households have a television and close to three in five households have a refrigerator. Approximately, one in six households own a washing machine (200,000 households bought one in 2012) and one in four have a computer.
Consumer Durables Ownership
94% 96% 2011 58% 47% 58% 53% 2012 57%

54%

22%

26% 13% 17%

TV

Refrigerator

DVD Player

Computer

Washing Machine

Rice cooker

Source: The Nielsen Company

Despite a growing consumer durables market, ad hoc government policy measures on import tariffs are a concern to retailers. Over the last decade, the Sri Lankan government has introduced ad hoc tariff waivers and has continuously changed the tariff structure and number of tariff bands, thus increasing the complexity in trading.

Key Trends and Drivers • The steady improvement of the economy in post-war Sri Lanka has had a positive effect on consumer confidence. The standard of living has improved and Sri Lankan consumers are spending more on durable goods. With the increased provision of electricity to the rural population, the market size for home appliances has increased, especially for TVs, refrigerators and small kitchen appliances. With the introduction of more advanced technology in the market, consumers today are more willing to upgrade to new technology, compared to five years ago. For instance, consumers are increasingly upgrading from semi-automatic to fully automatic washing machines, with nearly 20.0% of consumers who own a washing machine now owning a fully automatic washing machine. Changing lifestyle patterns have led to change in the purchasing behavior of consumers. In the past decade, consumers purchased white and brown goods for the long term (eight to ten years). However, latest trends in electronics retail show that consumers are more willing to upgrade within five years of purchase. The Sri Lankan government plans to transform the country into a shopping hub by lowering taxes and import duties. It is envisaged that the implementation of such plans will turn retailing into a lucrative business in Sri Lanka.

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Competitive Landscape The HCD retail industry in Sri Lanka is dominated by a few key players, with the top five players accounting for 85.0% of the total market size. In 2012, the top five leaders by revenue were, in descending order: Singer, Abans, Softlogic, Damro and Browns. • Singer – The market leader with 36.2% market share. Singer reported revenue growth of 15.5% in 2012, compared to growth of just 3.0% in the fast-moving consumer goods retail sector as a whole. 2011 also resulted in high double-digit revenue growth for the Company. Singer has developed multi-channel retail networks, namely Singer Plus, Singer Mega, Singer Homes and Sisil World to cater to various consumer segments. In 2012, Singer emerged, for the seventh successive year, ‘the favorite’ brand in terms of Overall Brand of the Year (All categories) and the Durables Brand of the Year in the SLIM-Nielson awards, which are presented to consumers’ favorite brands according to the Sri Lanka Institute of Marketing (SLIM) annual report. This indicated the high awareness and equity status of the SINGER ® brand from a consumer’s perspective, and impacts on the retailer brand as well. Abans – A privately owned company whose turnover is slightly less than Singer, according to industry sources. Abans is the agent for LG in Sri Lanka, and operates the Elite showrooms and Abans showrooms. A close rival of Singer, Abans has been expanding outlets and also experienced strong growth in 2012. Damro – Its main business has been furniture but, since 2005, the company expanded its product line to carry home appliances and later, consumer electronics. The company registered a growth of 28.9% from 2011 to 2012. Softlogic – The Panasonic agent in Sri Lanka, Softlogic has ‘Softlogic’ and ‘Softlogic Max’ showrooms selling consumer goods. The company has adopted a multi-brand, multi-channel strategy to provide a diverse choice of brands, products and special offers to consumers, and the expansion of retail outlets, plus relaxation in import duty, has contributed to a positive growth in sales. Revenue has grown by 135.0% to LKR 4.7 billion in the last financial year from LKR 2 billion in the previous financial year. Browns – A retail business which provides a range of home and office equipment, and which is the Sharp agent in Sri Lanka. The company underwent intense restructuring in 2011 to bring the retail business back to profitability after a string of losses over the previous six years.

The table below sets forth Sri Lanka’s top five retailers by revenue Rank Company 2010 2011 (in billion LKR) 1 2 3 4 5 Singer . . . . . . . . . . . . . Abans Group Damro . . . . . . Softlogic . . . . Browns . . . . . Others. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.0 11.5 3.1 0.6 0.9 13.1 45.2 22.0 19.3 3.8 2.0 0.5 9.5 57.1 25.4 23.8 4.9 4.7 0.9 10.5 70.2 2012 CAGR 10-12 (%) 26.0 43.9 25.7 183.2 1.8 -10.5 24.6

Total . . . . . . . . . . . . . .

Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209
Note: The revenue for Browns indicates revenue from its Home and Office Solutions business only which consists of HCD retail, and which represents only a part of its total revenue. The revenue for Abans and Damro is not published by the respective companies and has been estimated.

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The table below sets forth Sri Lanka’s top five retailers by number of outlets. Top five retailers by number of outlets, Sri Lanka, Historic 2010-12 Rank Company 2010 2011 2012 CAGR 10-12 (%) 1 2 3 4 5 Singer . . . . . . Abans Group Softlogic . . . . Damro . . . . . . Browns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 343 244 80 53 38 758 351 272 112 101 14 850 381 312 152 104 18 967 5.4 13.1 37.8 40.1 -31.2 12.9

Total . . . . . . . . . . . . . .

Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209

The chart below shows the market share of HCD retailers in Sri Lanka by revenue:
Market Share (2012)

Others, 15.0%

Browns, 1.3% Damro, 6.7% Singer, 36.2% Softlogic, 7.0%

Abans, 33.9%
Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209

Consumer Lending The annual value of consumer lending in Sri Lanka is estimated to be LKR 1 trillion. Consumer lending value grew at a rate of 20.9% from 2011 to 2012, with a CAGR of 25.4% in the past five years. Consumer borrowing experienced a decrease in 2009 due to the global financial crisis, but the return in consumer confidence significantly boosted borrowings in 2010 and 2011. In 2011, Sri Lanka’s government reduced the import duty on vehicles, leading to significant growth in the purchase and consumer lending for automobiles. The lower interest rates during 2011 also helped to increase the number of loans advanced. However, the government rolled back the reduced import duty on vehicles during the first quarter of 2012, leading to a market slowdown in consumer lending. An increase in interest and exchange rates also adversely affected the consumer lending industry in 2012.

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Overall, growth in the value of consumer lending is expected to remain steady over the next three years to reach LKR 1.6 trillion by 2015, as set forth in the table below. Gross Consumer Lending Value (in Billion LKR) 2008 . . . . . . . . . . 2009 . . . . . . . . . . 2010 . . . . . . . . . . 2011 . . . . . . . . . . 2012 . . . . . . . . . . CAGR 08-12 (%) 2013 . . . . . . . . . . 2014 . . . . . . . . . . 2015 . . . . . . . . . . CAGR 13-15 (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 421 437 588 861 1,041 – 1,250 1,437 1,581 –

Growth (%) – 3.8 34.6 46.4 20.9 25.4 20.0 15.0 10.0 12.5

Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209

Hire Purchase Market Overview The Sri Lankan market for lending towards hire purchases is about 17.6% of the overall value of consumer lending. The market for hire purchases is estimated to be LKR 183.5 billion. CAGR has averaged 17.5% over the past five years, but lending in this segment has seen uneven growth, with some periods of tremendous growth. The growth in hire purchase value is expected to be steady in the next three years at a CAGR of 11.0%, reaching a total lending value of LKR 248.7 billion. As the lifestyle of the population continues to evolve due to increased income levels and exposure to global trends, there is expected to be an increase in the demand for durable goods. Since 40.0% to 50.0% of durable goods are purchased through hire purchases, the hire purchase industry will stand to benefit from the increase in sales of durable goods. The table below sets forth Sri Lanka’s hire purchase lending value. Gross Hire Purchase Lending Value (in Billion LKR) Historic 2008 . . . . . . . . . . 2009 . . . . . . . . . . 2010 . . . . . . . . . . 2011 . . . . . . . . . . 2012 . . . . . . . . . . CAGR 08-12 (%) Forecast 2013 . . . . . . . . . . 2014 . . . . . . . . . . 2015 . . . . . . . . . . CAGR 13-15 (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99.3 104.2 131.2 185.8 183.5 – 201.8 224.0 248.7 –

Growth (%) – 4.9 26.0 41.6 -1.3 17.5 10.0 11.0 11.0 11.0

Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209

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Key Trends and Drivers • The steady improvement of the economy in post-war Sri Lanka is having a positive effect on consumer confidence. The standard of living has improved and Sri Lankan consumers are spending more on durable goods; 40.0−50.0% of which is funded through hire purchase. With the increased provision of electricity to the rural population, the market size for home appliances has increased, especially for televisions, followed by refrigerators and small kitchen appliances. In spite of the lower rural household income levels, hire purchase schemes make the purchase of consumer durables possible for this segment. Hence it is envisaged that the hire purchase industry will grow with increased electrification in rural areas. The frequent advancement in technology in the consumer durables industry, and the trend among consumers to adapt to it more rapidly, will also contribute to growth in hire purchase lending. Increased interest and exchange rates, along with reduced liquidity, will continue to affect the hire purchase industry in 2013 by making hire purchase interest rates more expensive, thereby deterring borrowing by consumers.

Competitive Landscape The hire purchase industry in Sri Lanka is very fragmented, consisting of about 55 companies in the non-banking financial sector. Singer Sri Lanka is the largest lender with a gross lending value of LKR 13 billion in 2012, with a growth of 6.9% from 2011 to 2012. Singer Sri Lanka income from its consumer durable installment loans was LKR 3.2 billion in 2012, an increase of 40.9% from LKR 2.3 million in 2011. Singer Sri Lanka offers a hire purchase service for consumer durables through its showrooms, and also offers hire purchase for vehicles and agricultural equipment. Singer Sri Lanka has implemented strong internal controls, credit approvals and good follow-up to ensure that non-performing loans are kept to a minimal. At 0.5%, Singer continues to have one of the lowest proportions of non-performing loans (NPL) in the industry. Softlogic, the second largest lender, had a gross lending value of LKR 4.2 billion as at 2012, with growth of 16.0% from 2011 to 2012. Softlogic’s revenue from hire purchase was LKR 145 million in 2011, which was an increase of 10.0% from LKR 132 million in 2010. Softlogic provides other types of loans as well, with hire purchase forming 45.0% of its total portfolio. At about 1.5%, Softlogic has a low proportion of NPL. Abans saw growth of 12.0% during financial year 2012, with its gross lending value reaching LKR 1.4 billion. Albans’ revenue from hire purchase was LKR 698 million in 2011, which was an increase of 61.0% from LKR 433 million in 2010, mainly due to Albans’ recovery efforts. The rate of NPL for example reduced from 11.2% of loans in 2010 to 7.0% in 2011. Abans is expected to see good growth over the next couple of years.

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The table below sets forth the top three consumer lending entities by gross lending value. Rank Company 2010 2011 (in million LKR) 1 2 3 Singer . . . . . . . . . . . . . Softlogic . . . . . . . . . . . Abans . . . . . . . . . . . . . Others. . . . . . . . . . . . . Total . . . . . . . . . . . . . . 8,519 2,323 895 84,299 96,036 12,195 3,616 1,238 101,351 118,400 13,031 4,195 1,386 104,373 122,985 2012 CAGR 10-12 (%) 23.7 34.4 24.4 11.3 13.2

Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209

BANGLADESH Macroeconomic Environment Population Bangladesh had a population of 150 million as at 2012. The working age group (15-59 years old) population is about 61.0% of total population, while the youth and older age groups comprise 34.0% and 5.0%, respectively, of the total population. The median age of the population is 23.6 years. Nearly 28.0% of the population resides in urban areas, with an annual rate of urbanization of close to 3.0%. The literacy rate is 56.8% and the unemployment rate is 5.0%. The table below sets forth the historic and forecast population of Bangladesh. Population (in Millions) Historic 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CAGR 08-12 (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Forecast 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CAGR 13-15 (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Source: International Monetary Fund

Growth (%)

143.7 145.2 146.9 148.5 150.0 –

1.1 1.1 1.1 1.1 1.1 1.1

151.6 153.3 154.9 –

1.1 1.1 1.1 1.1

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Living Conditions There are currently approximately 31.7 million households in Bangladesh, with an average household size of 4.35 persons. 28.0% of the houses are made of permanent materials. About 85.0% households use tube-wells as a source of drinking water, and only 11.0% receive tap water. The majority of the households (57.0%) use electricity as the major source of lighting. Economy – Overview Bangladesh’s GDP grew by 6.1% in 2012, by a CAGR of 6.2% over the past five years. More than half of GDP is generated through the service sector, whereas agriculture is the major occupation in the country. While export growth slowed in 2012, healthy credit flows and growth in overseas remittance, amounting to nearly 12.0% of GDP, helped maintain private consumption. At 6.1%, the service sector growth was in line with GDP growth. Inflation reduced to some extent from 10.7% in 2011 to 8.8% in 2012. Infrastructure issues and electricity shortages continued to affect economic activity in 2012. In 2013, the GDP growth is expected to remain stable at 6.1% and is expected to pick up slightly in the following years. Substantial growth in remittances can also be expected. The government is expected to focus on boosting spending on infrastructure and social sectors, addressing power shortages, and adopting policies that encourage investment and trade to create more jobs. Moreover, the extended credit facility (a loan of US$987 million over three years) from the International Monetary Fund, granted as part of an economic program to adjust policies and provide support, is aimed at enhancing macroeconomic stability and supporting faster and more inclusive economic growth in Bangladesh in the coming years. The table below sets forth Bangladesh’s GDP historical and projected growth data. GDP Growth (%) GDP Real Growth (%) GDP per capita (BDT) GDP per capita (US$)

GDP (in billion BDT) Historic 2008. . . . . . . . . . . . . 2009. . . . . . . . . . . . . 2010. . . . . . . . . . . . . 2011 . . . . . . . . . . . . . 2012. . . . . . . . . . . . . CAGR 08-12 (%) . . . Forecast 2013. . . . . . . . . . . . . 2014. . . . . . . . . . . . . 2015. . . . . . . . . . . . . CAGR 13-15 (%) . . . 11,016 12,508 14,188 – 5,803 6,546 7,455 8,557 9,735 –

14.0 12.8 13.9 14.8 13.8 13.8

6.0 5.9 6.4 6.5 6.1 6.2

40,380 45,066 50,754 57,643 64,885 12.6

589 653 729 777 793 7.7

13.2 13.5 13.4 13.5

6.1 6.7 7.1 6.9

72,646 81,616 91,599 12.3

887 997 1,119 12.3

Source: The Nielsen Company and International Monetary Fund

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Household Income and Expenditure Income and Expenditure in Bangladesh (as at 2010) • Average monthly income per household: BDT 11,480 o o • Average monthly income per household – Urban sector: BDT 16,477 Average monthly income per household – Rural sector: BDT 9,648

Average monthly expenditure per household: BDT 11,200 o o Average monthly expenditure per household – Urban sector: BDT 15,531 Average monthly expenditure per household – Rural sector: BDT 9,612 Average monthly expenditure per household (BDT) 8,803 9,929 11,200 12,320 13,552 –

Average monthly income per household (BDT) 2008 . . . . . . . . . . . . . . . . . . 2009 . . . . . . . . . . . . . . . . . . 2010 . . . . . . . . . . . . . . . . . . 2011 . . . . . . . . . . . . . . . . . . 2012 . . . . . . . . . . . . . . . . . . CAGR 08-12 (%) . . . . . . . . 9,527 10,458 11,479 12,742 14,016 –

Growth (%) 9.8 9.8 9.8 11.0 11.0 10.1

Growth (%) 12.8 12.8 12.8 10.0 10.0 11.4

Source: The Nielsen Company and Department of Census and Statistics
Note: The household income and expenditure survey is conducted by Bangladesh Bureau of Statistics once in every five years and was last conducted in 2010. The above numbers for all other years are estimates based on the five-year CAGR from 2005 to 2010.

Consumer Expenditure Consumer expenditure has increased substantially over the past five years at a CAGR of 11.8%. The growth rate in consumer expenditure decreased in 2012 as the economy was affected by high inflation and infrastructure issues such as power shortages. Consumer expenditure per capita (BDT) 29,977 32,810 36,313 41,726 44,841 10.6

Consumer expenditure (In Billion BDT) 2008 . . . . . . . . . . . . . . . . . . 2009 . . . . . . . . . . . . . . . . . . 2010 . . . . . . . . . . . . . . . . . . 2011 . . . . . . . . . . . . . . . . . . 2012 . . . . . . . . . . . . . . . . . . CAGR 08-12 (%) . . . . . . . . 4,308 4,764 5,334 6,196 6,726 –

Growth (%) 19.0 11.0 12.0 16.0 9.0 11.8

Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209

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Retail Retail in Bangladesh is largely unorganized, operated by thousands of small traders, grocery shops, wet markets and ‘mom and pop’ stores. The organized retail sector constitutes less than 2.0% of the retail industry. Supermarkets have started to flourish, but are mostly limited to major cities such as Dhaka and Chittagong. The landscape began to change in the last decade when supermarkets moved in to benefit from the growing (at 6.0% annually) retail and wholesale sector. Mainly attracting the middle-and upper-income consumer segments, supermarkets have been able to achieve an annual growth of 15.0-20.0%. Other organized retail – apparel and shoe chains, consumer durables and furniture – have also grown significantly. The organized retail sector is poised to achieve sustained strong growth in the coming years owing to the rising demand from consumers. Although the organized retail sector is expected to expand, ‘mom and pop’ stores will coexist. The expansion of organized retail chains will provide a plethora of choices to consumers and enhance their spending which, in turn, will help economic growth. The unorganized retail sector will feel the need to improve quality and services, and will follow in the footsteps of megastores. However, the retail sector faces several challenges. Inadequate infrastructure, high inflation and short-term plans and policies by government are the major issues faced by retailers. In particular, short-term plans and policies by government make it difficult for companies to formulate concrete, long-term expansion strategies. The value of total retail sales in Bangladesh grew by 6.6% in 2012 to reach BDT 1.68 trillion. The retail sector grew at a steady pace over the past five years, with retail sales value averaging a CAGR of 6.1%. The retail sector is expected to reach a sales value of BDT 2.0 trillion by 2015. Retail value sales (in Billion BDT) Historic 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CAGR 08-12 (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Forecast 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CAGR 13-15 (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,798 1,906 2,021 – 6.1 6.0 6.0 6.0 1,324 1,415 1,520 1,590 1,680 – – 5.5 6.4 6.0 6.6 6.1 Growth (%)

Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209

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HCD Retailing Market Overview HCD retail in Bangladesh saw a growth of 20.9% from 2011 to 2012, reaching a total market value of BDT 27.2 billion in 2012. The HCD industry is expected to grow by 20.4% in 2013, and in 2015 growth is expected to be 14.0% with a total retail value of BDT 44.1 billion. The table below sets forth the sales of store-based HCD retailers in Bangladesh. HCD Retail value sales (in Billion BDT) Historic 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CAGR 08-12 (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Forecast 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CAGR 13-15 (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32.7 38.7 44.1 – 20.4 18.3 14.0 16.1 15.6 17.5 19.3 22.5 27.2 – – 12.0 10.5 16.2 20.9 14.8

Growth (%)

Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209

The table below sets forth the number of outlets for store-based HCD retailers. Number of HCD Retail outlets

Growth (%)

2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CAGR 08-12 (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,448 1,561 1,705 1,834 2,042 –

– 7.8 9.2 7.6 11.3 9.0

Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209

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Key Trends and Drivers • Despite infrastructural issues such as power shortages, the HCD retail sector has seen tremendous growth in the past few years. Bangladesh has huge potential as the ownership of durable goods is still at a low level (less than 50.0% of households own a television), and growth is expected to continue over the next two years. As electricity coverage (currently to 57.0% of the population) increases, the market size for home appliances is poised to increase. As the demand and supply for traditional CRT televisions dwindles, the sale of panel televisions is expected to increase. Significant quantities of counterfeit products are another challenge facing electronic appliance retailers in Bangladesh, and this is expected to remain an issue in the near future. Due to a population with lower income levels, hire purchases are very common and enable the large middle-and lower-income segments to own consumer electronics and household appliances by enabling payment through affordable installments.

Competitive Landscape The HCD retail industry is dominated by the top five players, accounting for more than 70.0% of the total market size. In 2012, the top five leaders by sales value were, in descending order, Singer (market share 24.7%), Walton (market share 19.0%), Butterfly Marketing Limited (market share 15.1%), My One (market share 7.8%) and Electra (market share 5.9%). Singer’s strong brand recognition, nationwide presence and strong distribution network have made it a market leader with revenue of BDT 6.7 billion in 2012, achieving a year-on-year growth of 22.7%. Growth was 13.1% in the previous year. Growth was seen in almost all of Singer’s major product lines – refrigerators, panel television, sewing machine sales, washing machines, etc. Hire purchase facilities offered by Singer also helped to increase revenue. The second and third largest players, Walton and Butterfly Marketing, grew at 25.4% and 20.6%, earning estimated revenue of BDT 5.1 billion and 4.1 billion, respectively, in 2012. Both companies have a wide presence and are close competitors of Singer. My One, the fourth largest player, had an increase in revenue of 23.7% in 2012. My One has fewer number of stores compared to the top three players and mostly operates through dealers selling to ‘mom and pop’ stores. The fifth largest retailer, Electra, had growth of 11.8%, earning estimated revenue of BDT 1.6 billion in 2012.

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The table below sets forth our top five retailers by revenue. Rank Company 2010 2011 (in Million BDT) 1 2 3 4 5 Singer . . . . . . . . . . . . . Walton . . . . . . . . . . . . Butterfly Marketing . . . My One . . . . . . . . . . . . Electra . . . . . . . . . . . . Others. . . . . . . . . . . . . Total . . . . . . . . . . . . . . 4,829 3,646 3,083 1,538 1,335 4,900 19,331 5,461 4,108 3,400 1,720 1,440 6,336 22,465 6,703 5,150 4,100 2,127 1,610 7,475 27,165 2012 CAGR 10-12 (%) 17.8 18.9 15.3 17.6 9.8 23.5 18.5

Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209

The table below sets forth our top five retailers by number of outlets. Rank Company 2010 2011 2012 CAGR 10-12 (%) 1 2 3 4 5 Singer . . . . . . . . . . . . . Butterfly Marketing . . . Walton . . . . . . . . . . . . Electra . . . . . . . . . . . . My One . . . . . . . . . . . . Others. . . . . . . . . . . . . Total . . . . . . . . . . . . . . 286 228 124 96 38 934 1,705 314 243 130 100 40 1,007 1,834 338 275 140 104 45 1,140 2,042 8.7 9.8 6.4 4.0 9.3 10.5 9.4

Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209

The chart below sets forth the market share of HCD retailers in Bangladesh, by revenue:
Market Share (2012)

Singer, 24.7% Others, 27.5%

Electra, 5.9% Walton, 19.0% My One, 7.8% Butter y Marketing, 15.1%
Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209

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Consumer Lending The annual lending value of the consumer lending industry in Bangladesh is estimated to be BDT 156.3 billion. Consumer lending grew 20.0% from 2011 to 2012, and has experienced high growth with a CAGR of 21.7% in the past five years. A major share of the consumer lending market in Bangladesh is with the commercial banks, whereas the non-bank players have a small market share (about 15.0%). The growth is expected to remain steady over the next three years to take the consumer lending value to BDT 261.1 billion by 2015. Gross Consumer Lending Value (in Billion BDT) Historic 2008 . . . . . . . . . . 2009 . . . . . . . . . . 2010 . . . . . . . . . . 2011 . . . . . . . . . . 2012 . . . . . . . . . . CAGR 08-12 (%) Forecast 2013 . . . . . . . . . . 2014 . . . . . . . . . . 2015 . . . . . . . . . . CAGR 13-15 (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71.3 85.5 110.4 130.5 156.3 – 187.5 221.3 261.1 –

Growth (%) 35.2 19.9 29.1 18.2 19.8 21.7 20.0 18.0 18.0 18.0

Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209

Market Overview The Bangladesh market for lending towards consumer durables purchases is estimated to be BDT 44 billion. The lending in this segment has seen high growth in the past five years (CAGR 23.5%). The growth is expected to remain steady in the next three years leading to a CAGR of 18.0% and reaching a total lending value of BDT 69.6 billion. Gross Consumer Durable Lending Value (in Billion BDT) Historic 2008 . . . . . . . . . . 2009 . . . . . . . . . . 2010 . . . . . . . . . . 2011 . . . . . . . . . . 2012 . . . . . . . . . . CAGR 08-12 (%) Forecast 2013 . . . . . . . . . . 2014 . . . . . . . . . . 2015 . . . . . . . . . . CAGR 13-15 (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.0 22.8 29.2 36.7 44.3 – 50.0 59.0 69.6 –

Growth (%) 33.0 20.0 28.0 26.0 21.0 23.5 13.0 18.0 18.0 18.0

Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209

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Key Trends and Drivers • Due to a significant proportion of the population having lower income levels, hire purchase is very common and enables the large segment of middle- and lower-income earners to own brown and white goods through payment in affordable installments. Despite infrastructural issues such as electricity shortage, the HCD retail sector has seen substantial growth in the past few years. Bangladesh has significant potential as the ownership of durable goods is still at a low level. The growth of HCD retail is expected to continue in the next two years, driving growth in the hire purchase industry. As electricity coverage (currently 57.0% of population) increases, the market size for home appliances and hence the hire purchase industry is poised to expand.

Competitive Landscape The hire purchase industry in Bangladesh is mainly dominated by commercial banks. Singer and Butterfly Marketing are the main non-bank players offering hire purchase schemes for consumer durables. Singer is the top player with a gross lending value of BDT 4.1 billion in 2012, with growth of 24.7% from 2011 to 2012. The company’s income from consumer durable installment loans was BDT 191 million in 2012, an increase of 25.5% from BDT 152 million in 2011. Singer provides hire purchase service to customers purchasing consumer durables at its showrooms. The hire purchase contracts are generally for a period ranging from 2 months to 12 months. Singer is expected to see good growth in hire purchases in the coming years as well. Butterfly Marketing Ltd. (BML), a company with an estimated gross lending value of BDT 287 million in 2012, is the second largest player and Singer’s closest competitor. BML sells electronics and home appliances, such as refrigerators, televisions and air conditioners, through its retail stores and offers installment plans for the same. BML mainly sells LG products, its own brand products (Butterfly and Eco Plus) and two other brand products through its retail stores and dealership outlets. The table below sets forth our top three consumer lending entities by gross lending value: Rank Company 2010 2011 (in Million BDT) 1 2 3 Singer . . . . . . . . . . . . . Butterfly . . . . . . . . . . . Others. . . . . . . . . . . . . Total . . . . . . . . . . . . . . 2,910 225 26,084 29,220 3,275 251 33,189 36,715 4,085 364 39,809 44,258 2012 CAGR 10-12 (%) 18.5 27.2 23.5 23.1

Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209

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PAKISTAN Macroeconomic Environment Population Pakistan had a population of 179 million as at 2012. The working age group (15-59 years old) population is about 61.0% of total population, while the youth and older age groups comprise 35.0% and 4.0% respectively. The median age of population is 21.9 years. Nearly 36.0% of population resides in urban areas, with an annual rate of urbanization close to 3.0%. Literacy is 54.9% and the unemployment rate is at 7.7% Living conditions There are currently approximately 30 million households in Pakistan, with an average household size of 6.4 persons. About 86.0% of the households are under the ownership of the persons living in them. 32.0% of the households have access to tap water as a source of drinking water and 91.0% households use electricity as a source of lighting. Population (in millions) Historic 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CAGR 08-12 (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Forecast 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CAGR 13-15 (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Source: International Monetary Fund

Growth (%)

161.0 168.2 171.7 175.3 178.9 –

1.8 4.5 2.1 2.1 2.1 2.7

182.6 186.3 190.0 –

2.1 2.0 2.0 2.0

Economy Overview Pakistan’s economy grew by a modest 3.7% in 2012. The economy was affected by severe floods and high inflation in 2011. Inflation has reduced slightly from nearly 12.0% in 2011 to 10.0% in 2012. Agricultural products and textiles are the major outputs for Pakistan. Growth in agriculture improved from 2.4% in 2011 to 3.1% in 2012, easing the inflation pressure. Foreign investment in the country has declined over the past few years from 22.5% of GDP in 2007 to 12.5% of GDP in 2012. There is steady growth in remittances from Pakistanis working overseas, averaging to about $1 billion a month.

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Although the growth of the service sector slowed slightly in 2012, its large size ensures it will continue to be a major component of GDP and growth in the country. GDP growth in 2013 is expected to be 3.3% owing to structural problems, energy shortage and macroeconomic disparities. Inflation is expected to remain at 10.0% and growth in remittances is expected to remain at 7.5%. The table below sets forth Pakistan’s GDP historical and projected data: GDP Growth (%) 18.1 24.2 16.3 21.8 14.5 19.2 14.0 15.0 16.0 15.4 GDP Real Growth (%) 3.7 1.7 3.1 3.0 3.7 2.9 3.3 3.5 3.5 3.5 GDP per capita (PKR) 63,632 75,657 86,203 102,863 115,443 16.1 128,893 145,142 164,960 13.1 GDP per capita (US$) 904 926 1,012 1,191 1,236 8.1 1,380 1,554 1,776 13.4

GDP (in billion PKR) Historic 2008. . . . . . . . . . . 2009. . . . . . . . . . . 2010. . . . . . . . . . . 2011 . . . . . . . . . . . 2012. . . . . . . . . . . CAGR 08-12 (%) . Forecast 2013. . . . . . . . . . . 2014. . . . . . . . . . . 2015. . . . . . . . . . . CAGR 13-15 (%) . . . . . . . . . . . . . . . . . . . . . 10,243 12,724 14,804 18,088 20,654 – 23,534 27,037 31,341 –

Source: The Nielsen Company and International Monetary Fund
Note: US$ Figures converted from PKR based on average annual exchange rates.

Household Income and Expenditure Pakistan Household income has increased at CAGR of 14.7% in the past five years. Women, especially in urban areas, increasingly contribute to their household income by taking up jobs or starting home-based businesses. This has also led to an increase in the household income as well as expenditure. The increase in food and commodity prices has resulted in farmers and producers of other base products (raw materials) getting higher prices for their products and has contributed to rising incomes in the rural areas. Income and Expenditure in Pakistan (as at 2011) • • Average monthly income per household: PKR 21,785 Average monthly expenditure per household: PKR 19,336 Average monthly expenditure per household (PKR) 12,660 14,496 16,714 19,336 22,275 –

Average monthly income per household (PKR) 2008 . . . . . . . . . . 2009 . . . . . . . . . . 2010 . . . . . . . . . . 2011 . . . . . . . . . . 2012 . . . . . . . . . . CAGR 08-12 (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,456 16,509 19,002 21,785 25,053 –

Growth (%) – 14.2 15.1 14.6 15.0 14.7

Growth (%) – 14.5 15.3 15.7 15.2 15.2

Source: The Nielsen Company and Pakistan Bureau of Statistics

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Consumer Income and Expenditure Annual per capita income and expenditure, derived from the GNP, have increased substantially over the past five years. The growth in per capita income has been steady except in 2011, when the economy was affected by floods and other issues. Income growth in 2011 was lower and the increase in expenditure was higher than in other years. The table below sets forth annual per capita income: Annual per capita income (PKR) 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CAGR 08-12 (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64,930 77,716 89,500 107,541 121,173 –

Growth (%) 19.7 15.2 20.2 12.7 19.7 16.9

Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209

The table below sets forth consumer expenditure: Consumer expenditure per capita (BDT) 48,676 61,470 70,977 86,475 100,787 20.0

Consumer expenditure (in Billion PKR) 2008 . . . . . . . . . . . . . . . . . . 2009 . . . . . . . . . . . . . . . . . . 2010 . . . . . . . . . . . . . . . . . . 2011 . . . . . . . . . . . . . . . . . . 2012 . . . . . . . . . . . . . . . . . . CAGR 08-12 (%) . . . . . . . . 7,835 10,338 12,189 15,160 18,032 –

Growth (%) 19.8 31.9 17.9 24.4 18.9 23.2

Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209

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Retail Pakistan has a highly fragmented retail sector with a large proportion being unorganized retail (estimated to be more than 90.0% of the retail market). Organized, larger retail stores are mostly concentrated in the major cities, although a few of them are spread across the country, including smaller towns. The mid-and high-income population residing in major cities have fueled the growth of the organized retail sector. According to the Pakistan Bureau of Statistics, the retail and wholesale sector was valued at PKR 3.6 trillion in 2011-12 and constituted about 18.0% of GDP. The number of retail outlets in the country is estimated to be two million as at 2012. The various formats of retail stores include mostly ‘mom and pop’ stores, medical-cum-general stores, ‘pan’ shops and fewer supermarkets, hypermarkets and specialty stores. The large-format retail chains sell to small retailers, and also directly to customers. The retail scene in Pakistan has witnessed a shift in the past few years due to the arrival of multinational companies/brands. This has led to the emergence of new trends such as more structured retailing, operational efficiencies, and the establishment of supermarkets and hypermarkets. The role of multinational companies/brands and organized retail will continue to grow but the ‘mom and pop’ stores and smaller retailers will also co-exist in the foreseeable future. The increasing affluence of consumers and changing lifestyles (increasing consumerism) have helped increase consumer spending, especially in non-grocery retail, while high inflation, global economic slowdown and terror attacks have proved to be deterrents to retail sector growth in 2011-12. The retail sector is currently valued at PKR 2.9 trillion. After experiencing significant growth of 17.8% in value sales from 2010 to 2011, the retail sector grew at a slower pace of 9.6% from 2011 to 2012, averaging 11.7% CAGR over the past five years. The non-grocery sector, although smaller, grew at a faster CAGR of 12.7% over the past five years. Growth in retail sales is expected to remain high in the next three years, reaching a market value of PKR 3.7 trillion by 2015. Retail Sales Retail value sales (Non-Grocery) (in Billion PKR) 530 590 656 770 850 12.7 – – – –

Retail value sales (in Billion PKR) Historic 2008 . . . . . . . . . . 2009 . . . . . . . . . . 2010 . . . . . . . . . . 2011 . . . . . . . . . . 2012 . . . . . . . . . . CAGR 08-12 (%) Forecast 2013 . . . . . . . . . . 2014 . . . . . . . . . . 2015 . . . . . . . . . . CAGR 13-15 (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,900 2,100 2,247 2,646 2,900 – 3,126 3,392 3,728 –

Growth (%) 9.5 10.5 7.0 17.8 9.6 11.7 7.8 8.5 9.9 9.2

Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209

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The HCD Retail Industry Market Overview The HCD retail industry in Pakistan is currently valued at PKR 27.8 billion and grew 7.1% from 2011 to 2012. This is largely due to a return of consumer confidence after floods and violence in some parts of the country subsided. Growth is expected to increase in the next three years to reach a market value of PKR 37 billion by 2015. Sales of store-based HCD retailers Total retail value sales of HCDs, Pakistan, Historic 2008-12 HCD Retail value sales (Billion PKR) 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CAGR 08-12 (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.38 21.51 23.42 25.98 27.83 – Growth (%) – 11.0 9.5 11.0 7.1 9.5

Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209

Total retail value sales of HCDs, Pakistan, Forecast 2013-15 HCD Retail value sales (Billion PKR) 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CAGR 13-15 (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30.13 33.34 37.07 – Growth (%) 8.3 10.7 11.2 10.9

Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209

Number of outlets for store-based HCD retailers Total number of outlets, Pakistan, Historic 2008-12 No. of retail outlets Growth (%) 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CAGR 08-12 (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,976 3,110 3,191 3,296 3,424 – – 4.5 2.6 3.3 3.9 3.6

Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209

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Key Trends and Drivers • Hire purchases are very common and enable the huge segment of middle- and lower-income earners to own brown and white goods by enabling payments through affordable installments. Devaluation of the Pakistani rupee has put a burden on the purchasing power of consumers, proved a deterrent to investment and affected the cost of raw materials for manufacturers of electronic devices. Government’s initiative to reduce the excise duty on electronic goods has resulted in the growth of manufacturing and retail revenue, whereas an increase in oil prices and a shortage in electricity have adversely affected manufacturing. Parallel imports of electronic devices is another challenge retailers face in Pakistan and is expected to remain an issue in the near future. Afghanistan, with its sizable market, serves as a supplementary market for companies operating in Pakistan. Due to the low presence of manufacturers and retailers in Afghanistan, Pakistan acts as a gateway to import goods into Afghanistan. Despite instability and security concerns, this is a huge opportunity for retailers and distributors in Pakistan. Organized retailing in Pakistan is still in the initial growth phase and presents enormous opportunities for retailers to tap into this growth and attract consumers with structure, convenience, variety and service. The rising income levels and evolving modern lifestyle of consumers will provide ample opportunities to retailers to introduce new products and retail formats and establish and grow their respective brands.

Competitive Landscape The HCD retail industry in Pakistan is highly fragmented, with the top five players accounting only for 11.0% of the total market size. In 2012, the top five leaders by revenue were, in descending order, Singer (8.0% market share), USL (2.0% market share), Makro (0.4% market share), Metro (0.3% market share) and CSD (0.3% market share). Singer was the leading company with revenue of PKR 2.2 billion in 2012, achieving a growth in revenue of 7.3% from the previous year. The growth in revenue was mainly due to increased sales of high sales-value appliances, such as refrigerators, air-conditioners and panel televisions. Rupee devaluation and cost escalations affected sales of most appliances. Having high brand recognition, a customer base across different economic and social classes, and countrywide store presence has helped Singer maintain its leading position. United Sales (Pvt.) Ltd (“ USL ”), a company with revenue of PKR 565 million, is the second largest player and Singer’s closest competitor. USL had a 13.2% growth in revenue from 2011 to 2012. MAKRO Habib Pakistan Limited and Metro (“ Makro ”), the third and fourth largest players, are hypermarket and cash and carry stores, respectively, and sell groceries and fast-moving consumer goods, apart from electronic appliances. Their consumer durables business is estimated to be about PKR 200 million combined, in revenue. Canteen Stores Department (“ CSD ”) were originally set up as army/defense stores, but are now frequented by a large section of the general public, and sell groceries, clothes, fast-moving consumer goods, etc., apart from electronic appliances. CSD is estimated to have earned revenue of PKR 79 million in 2012 through the sale of consumer durables.

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Top five retailers by revenue, Pakistan, Historic 2010-12 Rank 1 2 3 4 5 Company Singer . USL. . . Makro* Metro* . CSD*. . Others. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2010 1,832 454 83 42 57 20,956 23,424 2011 2012 CAGR 10-12 10.0% 11.6% 15.6% 47.7% 17.7% 8.7% 9.0% (million PKR) 2,067 2,217 499 565 103 111 50 91 66 79 23,192 24,765 25,977 27,828

Total . . . . . . . . . . . . . .

Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209
*Note: The revenues for Makro, Metro and CSD are estimated to indicate revenues from their HCD sales only and represent only a part of their total revenue.

Top five retailers by number of outlets, Pakistan, Historic 2010-12 Rank 1 2 3 4 5 Company Singer . . . . . . . . . USL. . . . . . . . . . . CSD*. . . . . . . . . . Afzal Electronics (Punjab) . . . . . . . Metro . . . . . . . . . Others. . . . . . . . . .... .... .... .... .... .... 2010 163 68 19 15 9 2,924 3,198 2011 160 70 20 15 9 3,026 3,300 2012 160 72 22 20 9 3,139 3,422 CAGR 10-12 -0.9% 2.9% 7.6% 15.5% 0.0% 3.6% 3.6%

Total . . . . . . . . . . . . . .

Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209
*Note: The store numbers for CSD are estimated to indicate only those stores carrying HCD, and represent only a part of their total number of stores.

Chart 3: Market share of HCD retailers in Pakistan, by revenue:
Market Share (2012)
USL, 2.0% Makro, 0.4% Metro, 0.3% CSD, 0.3%

Singer, 8.0%

Others, 89.0%
Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209

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Consumer Lending The annual lending value of the consumer lending industry in Pakistan is estimated to be PKR 441 billion. Consumer lending value grew at 11.6% from 2011 to 2012, with a CAGR of 5.2% in the past five years. Consumer borrowing experienced a decrease in 2011 due to severe floods and high inflation, following which, the return in consumer confidence boosted borrowings significantly in 2012. Consumer lending is expected to see a steady growth in the next three years, reaching a lending value of PKR 584 billion by 2015. The consumer lending market in Pakistan is dominated by the local banks, whereas the non-bank players have a smaller market share. Consumer Lending, Pakistan, Historic 2008-12 Gross Consumer Lending Value (Billion PKR) 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CAGR 08-12 (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 345.1 410.7 426.2 447.5 451.1 – Growth (%) 19.0 3.8 5.0 0.8 11.6 5.2

Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209

Consumer Lending, Pakistan, Forecast 2013-15 Gross Consumer Lending Value (Billion PKR) 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CAGR 13-15 (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 528.7 555.7 584.0 – Growth (%) 5.0 5.1 5.1 5.1

Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209

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Consumer Durables Market overview The Pakistan market for lending towards consumer durables purchases is about 6.0% of the overall consumer lending value, estimated at PKR 30 billion. The lending in this segment has seen uneven growth in the past five years (CAGR 5.9%) due to economic and political instability, while the growth was at its lowest in 2011 due to floods and high inflation. This growth is expected to remain steady in the next three years at a CAGR of 4.9%, reaching a total lending value of PKR 35.1 billion. In Pakistan, where the majority of the population is in the lower-and lower-middle income segments, consumer lending gives higher purchasing power to the consumer by making consumer durable goods accessible to them. The result is an overall increase in the standard of living of the population, an increase in demand and hence growth in the manufacturing of consumer goods. At an overall level, this leads to growth in the consumer durables sector, economic development due to an increase in consumer spending and growth in manufacturing and overall socioeconomic development of the population. Consumer Durables Lending, Pakistan, Historic 2008-12 Gross Consumer Durable Lending Value (Billion PKR) 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CAGR 08-12 (%) . . . . . . . . . . . . . . . . . . . . . . . . . . 24.6 25.6 26.8 27.5 30.2 – Growth (%) 18.8 3.9 5.0 2.5 9.8 5.9

Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209

Consumer Durable Lending, Pakistan, Forecast 2013-15 Gross Consumer Durable Lending Value (Billion PKR) 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CAGR 13-15 (%) . . . . . . . . . . . . . . . . . . . . . . . . . . 31.9 33.5 35.1 – Growth (%) 5.5 5.0 5.0 4.9

Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209

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Key Trends and Drivers • Hire purchase facilities are being increasingly used by the Pakistani consumer, especially the large segment of middle- and lower-income earners who wish to own brown and white goods by enabling payment through affordable installments. The high and variable lending interest rates have adversely affected the consumers’ borrowing in the past year. This trend is expected to continue in 2013 as well. Political and economic stability is crucial for the development of the consumer finance industry. Due to huge monetary aids coming into the country in the past decade, the economy has uplifted and there has been political stability in the country in the past four years. If this trend continues, consumer spending, and hence the hire purchase industry, will continue to see steady growth. Devaluation of the Pakistani rupee and high commodity prices have placed a burden on purchasing power of consumers and this will have an effect on the hire purchase industry as well.

Competitive Landscape The hire purchase industry in Pakistan is mainly dominated by banks. For the sake of comparison, we have picked TWO of Singer’s closest competitors – USL and CSD, who are in the hire purchasing business as well. Singer is the top player with a gross lending value of PKR 1.7 billion in 2012 and a growth of 4.9% from 2011 to 2012. The Company’s income from consumer durable installment loans was PKR 385 million in 2012, an increase of 15.7% from PKR 333 million in 2011. Singer provides hire purchase services for consumer durables through its showrooms. The hire purchase contracts are generally for a period ranging between six months and 30 months. Singer is expected to see more than 15.0% growth in hire purchases in the next two years. USL, a company with a gross lending value of PKR 565 million in 2012, is the second largest consumer finance provider and Singer’s closest competitor. USL is a fully owned subsidiary of the Dawlance group of Companies. USL is a long established company in Pakistan and has a large network of branches, shops, franchises and dealers, across the country. USL provides consumer durables hire purchases in six-, 12- and 18-month installment plans with multiple down-payment options. CSD saw a growth of 21.2% during 2012, with an estimated gross lending value of PKR 40 million. Canteen Stores Department (CSD) has run hire purchase schemes for the past four decades, for the personnel of armed forces and some related organizations. CSD provides hire purchase for consumer durables – refrigerators, deep freezers, TVs, air conditioners, etc., and for cars, motorcycles, computers and generator sets.

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Top three consumer lending entities by gross lending value, Pakistan, Historic 2010-2012 Rank Company 2010 2011 2012 CAGR 10-12

(million PKR) 1 2 3 Singer . . . . . . . . . . . . . USL. . . . . . . . . . . . . . . CSD . . . . . . . . . . . . . . Others. . . . . . . . . . . . . Total . . . . . . . . . . . . . . 1,501 454 28 24,866 26,849 1,628 499 33 25,358 27,518 1,707 565 40 27,902 30,213 6.6% 11.6% 18.0% 5.9% 6.1%

Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209

INDIA Macroeconomic Environment Population India had a population of 1.2 billion as at 2012. The working age group (15-59 years old) population is about 65.0% of the total population, while the youth and older age groups comprise 29.0% and 6.0%, respectively. The median age of the population is 26.5 years. Nearly 30.0% of the population resides in urban areas, with an annual rate of urbanization close to 2.4%. India’s literacy is 61.0% and its unemployment rate is 10.5%. Living conditions There are currently approximately 246.7 million households in India, with an average household size of five persons. About 62.0% of houses are made of permanent materials. 86.5% of households are under the ownership of the persons living in them. 32.0% households have access to treated tap water, while another 42.0% use hand-pumps/tube-wells as a source of drinking water. 67.0% of households use electricity as the main source of lighting. Population, India, Historic 2008-12 Population (Million) 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CAGR 08-12 (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Source: International Monetary Fund

Growth (%) 1.4 1.4 1.4 1.4 1.4 1.4

1,158 1,174 1,191 1,207 1,223 –

190

Population, India, Forecast 2013-15 Population (Million) 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CAGR 13-15 (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Source: International Monetary Fund

Growth (%) 1.3 1.3 1.3 1.3

1,239 1,256 1,272 –

Economy Overview India has an open-market economy. Economic liberalization measures initiated by the government have helped to accelerate the country’s growth, which stood at a CAGR of 6.9% in the past five years. Agriculture is the major occupation (employing about 53.0% of workforce) but contributed to less than one-sixth of GDP in 2012, while the service sector is a major contributor to economic growth, accounting for nearly two-third of India’s output in 2012. India’s economy grew by 4.9% in 2012, which fell far short of expectations in view of its strong performance in recent years. This is attributable to a slump in investments, lower exports due to a drop in global demand, lower imports due to a sharp drop in gold and other imports, and a weakening personal income and consumer spending. Inflation stabilized to 8.2% in 2012, after staying close to 10.0% for most of 2010 and 2011. However, food inflation has remained high, reverting to near double digits in 2012 after a brief respite in 2011, affecting food prices and hence consumer spending. In the second half of 2012, additional reforms and deficit reduction measures were announced by the government to boost growth, including allowing higher levels of foreign direct investment in the country. The mid-term outlook for India’s economic growth is positive due to a younger population, good savings and investment rates, and increased integration with the global economy. A good monsoon season will improve agricultural production, thus easing the inflation pressure, while an improvement in the global economic climate is expected to bring in investments in the country to boost the GDP growth to 6.7% in 2013. The table below sets forth India’s GDP historical and projected data: GDP Nominal, India, Historic 2008-12 GDP (Billion INR) 2008. . . . . . . . . . . . . 2009. . . . . . . . . . . . . 2010. . . . . . . . . . . . . 2011 . . . . . . . . . . . . . 2012. . . . . . . . . . . . . CAGR 08-12 (%) . . . 54,956 61,307 75,053 86,465 97,700 – GDP Growth (%) 15.3 11.6 22.4 15.2 13.0 15.5 GDP Real Growth (%) 6.9 5.9 10.1 6.8 4.9 6.9 GDP per capita (INR) 47,458 52,220 63,042 71,641 79,874 13.9 GDP per capita (US$) 1,091 1,079 1,379 1,535 1,495 8.2

Source: The Nielsen Company and International Monetary Fund

191

GDP Nominal, India, Forecast 2013-15 GDP 2013. . . . . . . . . . . 2014. . . . . . . . . . . 2015. . . . . . . . . . . CAGR 13-15 (%) . . . . . . . . . (Billion INR) 112,654 130,134 149,282 – GDP Growth (%) 15.3 15.5 14.7 15.1 GDP Real Growth (%) 6.0 6.4 6.7 6.6 GDP per capita (INR) 90,904 103,645 117,352 13.6 GDP per capita (US$) 1,701 1,940 2,196 13.6

Source: The Nielsen Company and International Monetary Fund

Consumer Income and Expenditure Income and Expenditure in India (as at 2012) • • Average monthly income per household: INR 28,434 Average monthly expenditure per household: INR 20,203

The annual household disposable income and expenditure have increased substantially over the past five years. The annual household disposable income increased at a CAGR of 12.2% whereas the consumer expenditure per household grew at a marginally higher CAGR of 12.6% over the past five years. Annual household disposable income, India, Historic 2008-12 Annual Household Disposable Income 2008 . . . . . . . . . . 2009 . . . . . . . . . . 2010 . . . . . . . . . . 2011 . . . . . . . . . . 2012 . . . . . . . . . . CAGR 08-12 (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (INR) 215,626 240,695 274,337 306,274 341,210 – Growth (%) 18.6 11.6 14.0 11.6 11.4 12.2

Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209

Consumer Expenditure, India, Historic 2008-12 Consumer Expenditure 2008 . . . . . . . . . . 2009 . . . . . . . . . . 2010 . . . . . . . . . . 2011 . . . . . . . . . . 2012 . . . . . . . . . . CAGR 08-12 (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (Billion INR) 32,999 36,976 43,327 50,661 56,495 – Consumer Expenditure per Household (INR) 151,050 166,444 191,874 220,806 242,438 12.6

Growth (%) 18.8 12.1 17.2 16.9 11.5 14.4

Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209

192

Consumer Expenditure, India, Forecast 2013-15 Consumer Expenditure (Billion INR) 2013 . . . . . . . . . . . . . . . . . . 2014 . . . . . . . . . . . . . . . . . . 2015 . . . . . . . . . . . . . . . . . . CAGR 13-15 (%) . . . . . . . . 62,527 68,981 76,224 – Consumer Expenditure per Household (INR) 264,019 286,600 311,613 8.6

Growth (%) 10.7 10.3 10.5 10.4

Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209

Retail and Wholesale India has a large proportion of unorganized retail (close to 95.0% of the market), with small traders, ‘mom and pop’ stores, small grocery shops and wet markets dominating the retail scene. Supermarkets, hypermarkets and retail chains are largely present in urban areas – mostly in tier 1 cities and tier 2 cities to some extent. Organized retailing is absent in the majority of the rural areas and small towns of India. The retail environment is highly competitive and the consumers are highly price-conscious. Rising urban income levels, new retail formats and the shopping experience provided by the organized retail sector have help increase consumer spending in urban areas. The Indian retail market is estimated to be INR 16 trillion in size. The huge domestic market (1.2 billion people) ensures that retail remains an important contributor to the country’s economy. It is also one of world’s fastest-growing retail markets. The government has recently allowed 100.0% foreign direct investment in retail. This will open doors to international retail chains to set up shop in India, further increasing the organized retail market share in India. Strong economic performance and controlled inflation will help drive further growth in the overall retail sector in India. Total retail value sales, India, Historic 2008-12 Retail Value Sales (Billion INR) 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CAGR 08-12 (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,890 12,058 13,613 15,497 16,783 – Growth (%) 12.4 10.7 12.9 13.8 8.3 11.4

Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209

Total retail value sales, India, Forecast 2013-15 Retail Value Sales (Billion INR) 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193 18,151 Growth (%) 8.2

Total retail value sales, India, Forecast 2013-15 Retail Value Sales (Billion INR) 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CAGR 13-15 (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,552 21,003 – Growth (%) 7.7 7.4 7.6

Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209

Wholesale As the majority of the retail sector is unorganized, most manufacturers prefer to transact wholesale to small traders, “mom and pop” stores, small grocery shops, supermarkets and hypermarkets. Most manufacturers, especially in the electronics segment, tend to set up a few showrooms to allow for exquisite shopping experience with their brands and products. By investing in a strong distributor network and long-term relationships, manufacturers are able to improve their reach and presence. On the other hand, the competition for shelf-space, end-retailers’ limited capacity to carry product variants, the opportunity for instant price comparison by cost-conscious Indian consumers, and the lack of control on service levels provided by small retailers are some of the challenges faced by such manufacturers in wholesaling. The HCD Retailing Industry Market Overview HCD retail in India saw somewhat subdued growth of 8.5% in 2012, compared to high growth of 22.0% in 2011. The industry has grown at a CAGR of 14.6% in the past five years and the total retail value currently stands at INR 1,286 billion in 2012. Over the next three years, the HCD industry is expected to see continued high growth. With the change in lifestyle of consumers, owing to their increased income and exposure to global trends, and the growing demand for the latest gadgets and smart phones, the industry will be performing strongly in the near future. Total HCD retail value sales, India, Historic 2008-12 Retail Value Sales of Electronic Appliances (Billion INR) 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CAGR 08-12 (%) . . . . . . . . . . . . . . . . . . . . . . . . . 744 836 970 1,184 1,286 – Growth (%) 8.3 12.4 16.0 22.1 8.5 14.6

Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209

194

Total HCD retail value sales, India, Forecast 2013-15 Retail Value Sales of Electronic Appliances (Billion INR) 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CAGR 13-15 (%) . . . . . . . . . . . . . . . . . . . . . . . . . 1,450 1,673 1,967 – Growth (%) 12.8 15.4 17.6 16.5

Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209

Key Trends and Drivers • Most retailers, even those with in-house brands, are offering multiple brands in stores to attract more consumers. Due to low brand loyalty among consumers, the multi-brand format allows for price and features comparisons, making them more popular among consumers. Electronic devices retail chains have been rapidly expanding and have been increasing their presence in smaller cities. Consumers generally feel the need to be seen with latest gadgets and increased income levels allow them to spend more on electronic devices. This mostly includes entertainment and communication devices. There is growing demand for Internet-enabled devices, especially due to the increased popularity of social networking among young consumers. Hire purchase schemes and installment payment schemes by retailers and credit cards drive growth in the purchase of electronic goods, especially around the festive seasons.

Small Appliances Segment The Indian small-appliances market, with a market size of over INR 227 billion, is growing by approximately 10.0% a year. Young adults with increasing disposable income, formation of new households due to the emerging nuclear family concept, etc., are driving the growth in this segment. Small appliances are replaced at shorter intervals and thus offer an opportunity for repeat purchases by consumers. Competitive landscape The small-appliances market in India is highly fragmented. In 2012, the top three leaders by revenue were, in descending order, Bajaj Electricals, Crompton Greaves and Usha. Small appliances is a relatively new category for Singer and currently only 4.0% of its total revenue is derived from it. Singer sells its appliances to its distributors who in turn redistribute to retailers. Singer plans to further grow its business in this category and has plans to increase the number of distributors from the current 63 to 117 in 2013 and 141 by 2015 with each distributor having 60 retail counters on average. Usha is a major player, with a market share of about 3.0% and estimated revenue from small appliances at about INR 8.3 billion. Nearly 60.0% of its total revenue is derived from the sale of small appliances, with fans being the major category, contributing to three-fourths of small appliances sales value.

195

Top three small appliances companies by revenue, India, Historic 2010-12 Rank Company 2010 2011 2012 CAGR 10-12

(million INR) 1 2 3 4 Bajaj Electricals . . . Crompton Greaves . Usha . . . . . . . . . . . . Singer . . . . . . . . . . . Others. . . . . . . . . . . . . . . . . . . . . 27,815 16,120 5,837 – 182,018 231,790 31,443 20,210 6,960 21 192,911 251,545 35,531 21,336 8,352 71 212,294 277,584 13.0% 15.0% 19.6% – 8.0% 9.4%

Total . . . . . . . . . . . . . .

Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209
Note: Revenue from small appliances sales has been estimated for the above companies and represents only a part of their total revenue.

Sewing Machines Sewing machines have evolved from the mechanical type to electrical models. However, in the Indian market, the majority of sewing machines sold are still the mechanical models, especially in the rural areas. Specialized sewing machines with embroidery functionalities have been gaining popularity. Zig-Zag sewing machines have good growth potential in India. Sewing machines, though a low-priority product to the affluent classes, serve a vital purpose for large segments of the society. With Indian consumer’s love for embroidery and practice of getting custom-made tailored clothes, sewing machines are expected to continue to be in demand. Competitive Landscape The sewing machines market is dominated by two players – Usha and Singer. There are other smaller players in the market, such as Brother, Novel, Bernina, etc., and plenty of smaller regional companies. Singer is second largest player, with a market share of 20.2% and revenue of INR 1.7 billion in 2012. Singer focuses on enhancing its customer support and services, backed with demonstrations of the use of its sewing machines. Usha is the top player in this segment, with estimated sewing machine revenue of INR 2.9 billion in 2012, holding a market share of 33.8%. About 20.0%-22.0% of Usha’s total revenue comes from the sale of sewing machines, which is a major category for the company. Top sewing machine companies by revenue, India, Historic 2010-12 Rank Company 2010 2011 (million INR) 1 2 USHA* . . . . . . . . . . . . Singer . . . . . . . . . . . . . Others. . . . . . . . . . . . . Total . . . . . . . . . . . . . . 2,013 1,054 3,259 6,326 2,400 1,336 3,572 7,308 2,880 1,725 3,916 8,521 19.6% 27.9% 9.6% 16.1% 2012 CAGR 10-12

Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209
*Note: Revenue for Usha has been estimated to indicate the revenue from sewing machine sales only, and represents only a part of its total revenue.

196

Chart 4: Market Share of sewing machine companies in India, by revenue
Market Share (2012)

Usha, 33.8%

Others, 46.0%

Singer, 20.2%
Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209

THAILAND Macroeconomic Environment Population Thailand has a population of 64.5 million as at 2012. The working age group (15-59 years old) population is about 66.7% of the total population, while the youth and older age groups comprise 23.0% and 10.3%, respectively. Nearly 30.0% of the population resides in municipal areas (of which 34.8% live in Bangkok). The literacy rate is 92.6% and the unemployment rate is 4.3%. Living conditions There are currently approximately 17.9 million households in Thailand, with an average household size of 3.6 persons. Most (98.4%) houses are made of permanent materials. About 82.4% of households are under the ownership of the persons living in them. The proportion of house ownership in non-municipal areas is higher than in municipal areas. Most households have access to safe drinking water (89.9%), sanitary toilets (99.0%), and electricity (99.4%). Population, Thailand, Historic 2008-12 Population (Million) 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CAGR 08-12 (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Source: International Monetary Fund

Growth (%) 0.6 0.2 0.6 0.3 0.6 0.4

63.4 63.5 63.9 64.1 64.5 –

197

Population, Thailand, Forecast 2013-15 Population (Million) 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CAGR 13-15 (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Source: International Monetary Fund

Growth (%) 0.6 0.6 0.6 0.6

64.8 65.2 65.6 –

Economy Overview Thailand had GDP growth of 5.6% in 2012, following economic stagnation in 2011 largely owing to the massive floods in the industrial areas, which crippled the manufacturing sector. Flood mitigation projects have been undertaken by the government in order to prevent similar economic damage in the future. Thailand’s main exports, agricultural commodities and electronics, achieved steady growth, boosting the economy in 2012. Private consumption increased by 4.1%, supported by government decisions to raise the minimum wage and increase incomes in the public service sector. The economy is expected to grow at a steady pace over the next three years. Thailand has an environment conducive to investments and growth, with a free-enterprise economy, welldeveloped infrastructure, pro-investment policies, and strong export industries. The government is making efforts towards continuing the economic growth by attracting public investments and by encouraging domestic consumption to counter the effects of relatively weak external demand. The table below sets forth Thailand’s GDP historical and projected data: GDP Nominal, Thailand, Historic 2008-12 GDP (Billion THB) 2008. . . . . . . . . . . . . 2009. . . . . . . . . . . . . 2010. . . . . . . . . . . . . 2011 . . . . . . . . . . . . . 2012. . . . . . . . . . . . . CAGR 08-12 (%) . . . 9,080 9,042 10,105 10,540 11,472 – GDP Growth (%) 6.5 -0.4 11.8 4.3 8.8 6.0 GDP Real Growth (%) 2.6 -2.3 7.8 0.1 5.6 2.7 GDP per capita (THB) 143,248 142,330 158,189 164,494 177,971 5.6 GDP per capita (US$) 4,300 4,151 4,992 5,395 5,726 7.4

Source: The Nielsen Company and International Monetary Fund
Note: US$ figures converted from THB based on average annual exchange rates.

GDP Nominal, Thailand, Forecast 2013-15 GDP (Billion THB) 2013. . . . . . . . . . . . . 2014. . . . . . . . . . . . . 12,601 13,590 GDP Growth (%) 9.8 7.8 GDP Real Growth (%) 6.0 4.5 GDP per capita (THB) 194,323 208,316 GDP per capita (US$) 6,252 6,702

198

GDP Nominal, Thailand, Forecast 2013-15 GDP (Billion THB) 2015. . . . . . . . . . . . . CAGR 13-15 (%) . . . 14,641 – GDP Growth (%) 7.7 7.8 GDP Real Growth (%) 4.6 4.5 GDP per capita (THB) 223,097 7.1 GDP per capita (US$) 7,177 7.1

Source: The Nielsen Company and International Monetary Fund
Note: US$ figures converted from THB based on average annual exchange rates.

Household Income and Expenditure Income and Expenditure in Thailand (as at 2011) • • Average monthly income per household: THB 23,236 Average monthly expenditure per household: THB 17,403 Average monthly household income, Thailand, Historic 2008-12 Average Monthly Income per Household (THB) 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CAGR 08-12 (%) . . . . . . . . . . . . . . . . . . . . . . . . . . .
Source: The Nielsen Company and National Statistical office – Thailand

Growth (%) 10.0 1.8 5.8 5.1 6.2 4.7

20,526 20,903 22,115 23,236 24,677 –

Average monthly household expenditure, Thailand, Historic 2008-12 Average Monthly Expenditure per Household (THB) 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CAGR 08-12 (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Source: The Nielsen Company and National Statistical office – Thailand

Growth (%) 9.9 1.6 3.8 3.5 5.0 3.5

15,942 16,205 16,819 17,403 18,273 –

199

Consumer Income and Expenditure Annual disposable household income and consumer expenditure have had uneven growth over the past five years. The growth in both income and expenditure was affected by the global economic crisis in 2009 and by floods in 2011. Annual disposable household income grew by 6.1% in 2012, while consumer expenditure grew by 5.6% in 2012. Annual Disposable Household Income, Thailand, Historic 2008-12 Annual Disposable Household Income (THB) 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CAGR 08-12 (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 289,292 283,450 308,210 316,720 336,166 – Growth (%) 5.0 -2.0 8.7 2.8 6.1 3.8

Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209

Consumer Expenditure, Thailand, Historic 2008-12 Consumer Expenditure per capita (THB) 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CAGR 08-12 (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,369 4,268 4,600 4,602 4,858 – Growth (%) 2.6 -2.3 7.8 0.1 5.6 2.7

Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209

200

Retail Retail sales in Thailand grew at a lower rate in 2012, compared to a higher growth rate in previous years. Sales CAGR for the past five years was 4.2%. The rising cost of living has made consumers increasingly cost-conscious. As a result, retail traders who offer a good cost-value proposition have performed well in the past year. Total retail value sales, Thailand, Historic 2008-12 Retail Value Sales (Billion THB) 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CAGR 08-12 (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,044 2,113 2,210 2,324 2,409 – Growth (%) 5.8 3.4 4.6 5.1 3.7 4.2

Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209

Total retail value sales, Thailand, Forecast 2013-15 Retail Value Sales (Billion THB) 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CAGR 13-15 (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,492 2,576 2,661 – Growth (%) 3.5 3.3 3.3 3.3

Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209

Direct Selling Direct selling is a popular channel in Thailand. Direct selling companies typically employ consumers to sell their products and the opportunity for extra income attracts these consumers, leading to high annual growth. The direct selling sales value in 2012 is estimated to be THB 53.1 billion, with a growth rate of 7.0% over 2011. Sales CAGR was 8.7% for the past five years. Beauty and healthcare companies, such as Amway, Herbalife, Avon Cosmetics, etc., continue to dominate the direct selling channel in Thailand. Direct selling is expected to grow at a CAGR of 6.3% over the next three years. The rising cost of living has made consumers increasingly cost-conscious, especially the lower income households, and has affected their purchasing behavior in the past year. This trend is expected to continue in 2013 as inflation remained high in the first quarter of 2013. Electronic appliances and healthcare product sales are expected to continue to grow faster than other consumer products.

201

Direct Selling sales value, Thailand, Historic 2008-12 Direct Selling Sales (Billion THB) 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CAGR 08-12 (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.98 41.33 45.01 49.64 53.12 – Growth (%) 7.0 8.8 8.9 10.3 7.0 8.7

Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209

Direct Selling sales value, Thailand, Forecast 2013-15 Direct Selling Sales (Billion THB) 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CAGR 13-15 (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.30 59.96 63.56 – Growth (%) 6.0 6.5 6.0 6.3

Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209

HCD Direct Selling Market Overview The annual value of the consumer HCD market in Thailand is estimated to have grown 20.8% from THB 3.3 billion in 2011 to THB 4.0 billion in 2012. This is largely due to a resurgence in consumer confidence after the floods in 2011 and aggressive expansion strategies by key players. Growth is expected to pick up over the next three years to reach a market value of THB 5.7 billion by 2015. Direct Selling sales value of HCD, Thailand, Historic 2008-12 Direct Selling Sales of Electronic Appliances (Million THB) 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CAGR 08-12 (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,471 2,581 2,801 3,310 4,000 – Growth (%) 7.3 4.4 8.5 18.2 20.8 12.8

Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209

202

Direct Selling sales value of HCD, Thailand, Forecast 2013-15 Direct Selling Sales of Electronic Appliances (Million THB) 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CAGR 13-15 (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,595 5,283 5,722 – Growth (%) 14.9 15.0 8.3 11.6

Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209

Key Trends and Drivers • The rapid increase in technology penetration in Thailand in recent years is indicative of the increased tech-savvy nature of Thai consumers. There has been a particularly high increase in mobile phone penetration.
Thailand Technology Penetration (% of population)

66 62 57 53 47 42 37 26 27 16 28 18 29 20 31 22 32 24

25

12

14

2005

2006

2007

2008

2009

2010

2011

Internet
Source: The Nielsen Company

Computer

Mobile Phone

Development of new formats such as online shopping, where customers can order through online stores belonging to direct-selling companies, will be a trend in the future. As direct selling companies already have a large workforce on the ground, delivering pre-ordered goods (from online stores) to consumers will be easy. Bangkok has implemented a nation-wide THB 300 per day minimum wage policy and has been deploying new tax reforms designed to lower tax rates on middle-income earners, leading to an increase in consumption of electronic items which were previously viewed as luxury goods. Since the low-and middle-income earners are a major target segment for direct-selling electronic appliance companies such as Singer, this has helped to increase the overall market size for the segment.

203

With the launch of the ASEAN Economic Community (AEC) in 2015, the 10 member countries of ASEAN are to eliminate trade tariffs among them and liberalize investment sectors, enabling the free flow of goods, services, capital and human resource across the regional bloc. Collectively, this massive single market comprising Thailand, Singapore, Malaysia, Indonesia, Vietnam, Cambodia, Laos, Myanmar, Brunei and the Philippines will create a market of 600 million consumers for the electronic appliance industry.

Competitive Landscape Singer has the highest market share (about 61.0%) among direct-selling electronic appliance companies in Thailand. With revenue of THB 2.9 billion in 2012, it saw a growth of 23.8% over the previous year. This growth is attributed to the company’s efforts to expand its grassroots customer base among both consumers and small traders/shops, an increase in sales force and the introduction of new products and services. For nearly 30 years, dealers from Myanmar, Cambodia and Laos have purchased certain Singer products from its locations in Thailand situated near to the borders with these countries. The company mainly sells sewing machines, vending machines and home appliances such as refrigerators, washing machines, air conditioners and microwave oven to these dealers. The company is expected to continue its growth trend over the next two years. Mida Assets is the second largest player, with estimated revenues of THB 470 million in 2012 from the sale of consumer durables and interest from hire purchase of consumer durables, and a market share of about 9.7%. Mida Assets’ revenue grew at a slow rate of 1.7% in 2012, from THB 463 million in 2011 to THB 470 million in 2012, due to Mida Assets’ higher focus on other aspects of its business, such as real estate and hotel operations. The company mainly sells electrical home appliances and electronic goods to the middle- and low-income segments in Thailand. Lux Royal (Thailand) Co. also sells products directly to consumers, though on a much smaller scale. The company’s revenues are estimated at THB 50 million in 2012. The company mainly sells vacuum cleaners, water filters, washing machines and dryers. Top three retailers by direct sales revenue, Thailand, Historic 2010-12 Rank Company 2010 2011 (million THB) 1 2 3 Singer . . . . . . . . . . . . . Mida . . . . . . . . . . . . . . Lux Royal . . . . . . . . . . Others. . . . . . . . . . . . . Total . . . . . . . . . . . . . . 2,079 421 42 815 3,357 2,383 463 44 1,132 4,022 2,951 470 50 1,363 4,834 19.1% 5.7% 8.6% 29.3% 20.0% 2012 CAGR 10-12

Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209
Note: Revenue for the above companies includes interest income from hire purchase services towards HCD, provided by the above companies.

204

Chart 5: Market Share of HCD direct sellers in Thailand, by revenue
Market Share (2012)

Others, 28.2%

Singer, 61.0% Lux Royal, 1.0%

Mida, 9.7%

Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209

Consumer Lending The annual lending value of consumer lending in Thailand is estimated to be THB 1.8 trillion. Consumer lending value increased at 8.2% from 2011 to 2012, with a CAGR of 8.1% in the past five years. Consumer borrowing had experienced a slump in 2009 due to political turmoil caused by unstable government and widespread protests in the country. The return in consumer confidence, following the end of the political turmoil period, boosted consumer borrowing significantly in 2010 and 2011. The growth in consumer lending has stabilized in 2012. The majority share of the consumer lending market in Thailand is with the local banks, while the non-bank players have a small market share with most specializing in specific types of lending such as automobiles, homes, consumer durables, etc. Since 2005, hire purchase and consumer lending business are controlled by the Ministry of Finance. Also, the Bank of Thailand issues notifications for the regulation of such businesses. The interest rates, fines, service fees, and other operation fees in aggregate can be charged at the maximum effective annual rate of 28.0%. The growth in consumer lending value is expected to remain steady in the next three years to reach THB 2.3 trillion by 2015. Consumer Lending, Thailand, Historic 2008-12 Gross Consumer Lending Value (Billion THB) 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CAGR 08-12 (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,344 1,384 1,550 1,695 1,834 – Growth (%) 8.6 3.0 12.0 9.4 8.2 8.1

Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209

205

Consumer Lending, Thailand, Forecast 2013-15 Gross Consumer Lending Value (Billion THB) 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CAGR 13-15 (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,984 2,147 2,323 – Growth (%) 8.2 8.2 8.2 8.2

Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209

Consumer Durables Market overview The lending market in Thailand for consumer durables purchases is about 2.6% of the overall consumer lending value, estimated at THB 48 billion. The lending in this segment has seen steady growth in the past five years (CAGR 5.3%), though the growth has been at a lower rate compared to the growth in overall consumer lending value (CAGR 8.1%), which was mainly fueled by high growth in auto loans. The current growth trend is expected to continue in the next three years due to a return in consumer confidence, reaching a total lending value of THB 58 billion by 2015. Consumer Durables Lending, Thailand, Historic 2008-12 Gross Consumer Durables Lending Value (Billion THB) 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CAGR 08-12 (%) . . . . . . . . . . . . . . . . . . . . . . . . . 39 41 43 45 48 – Growth (%) 5.4 5.1 4.9 4.7 6.7 5.3

Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 200

Consumer Durables Lending, Thailand, Forecast 2013-15 Gross Consumer Durables Lending Value (Billion THB) 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CAGR 13-15 (%) . . . . . . . . . . . . . . . . . . . . . . . . . 51 54 58 – Growth (%) 6.3 5.9 7.4 6.6

Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209

Key Trends and Drivers • The consumer lending process has seen a tightening of regulations by the Ministry of Finance and Bank of Thailand and more stringent screening criteria by most consumer 206

lending companies in the past three years, as a result of the increasing cautiousness following the credit crisis. Most consumer finance providers have been selective in loan approval by focusing mainly on quality consumers with good credit history. However, to gain further market share, they tend to offer competitive promotions, such as terms of price, services and payment options. • There is an effort to reach the grassroots consumers by the government (through state-owned banks), as well as by non-bank players who see the opportunity to lend to this segment, due to consumers’ lower access to banks owing to the banks’ stringent screening criteria and consumers’ low credit worthiness (low income and assets). The strong economic recovery in 2012 (9.0% growth from 2011) has boosted consumer confidence, leading to an increase in spending on consumer durables, 60.0% to 70.0% of which are purchased through installment plans (hire purchases). The government of Thailand has focused on increasing household incomes by introducing a nation-wide 300 baht per day minimum wage policy, enacting new tax reforms designed to lower rates on middle-income earners and increasing the salary of civil servants. This has led to an increase in the consumption of electronic items which were previously considered a form of luxury goods. Since the factory workers and low-to middle-income earners tend to rely on hire purchase, this has opened up opportunities to the hire purchase companies.

Competitive Landscape In Thailand, a large proportion of consumer lending is done by the commercial banks through personal loans, credit cards and other forms of credit. Among the non-banks, lending towards consumer durables, specifically, is dominated by Singer, Aeon and Easy Buy. Aeon Thana Sinsap (Thailand) is the top player, with a gross lending value of close to THB 20 billion in 2012 and growth of 8.0% from 2011 to 2012. Aeon’s revenue from consumer durable installment loans was THB 908 million in 2011, which was an increase of 6.0% from THB 853 million in 2010. Aeon provides consumer loans through its more than 15,400 member dealer stores and department stores such as The Mall, Jusco, MaxValu, Tesco Lotus, etc., for buying electrical appliances, home decorative items, office equipment, mobile phone, IT products, etc. Income from personal loans includes interest received, minimum payment fees, handling fees and penalty fees. The company issues the AEON Member Card to customers with good payment records to receive quick and convenient loan services from the company. Singer, the second largest player, has a gross lending value of THB 1.7 billion and has had significant growth of 28.0% from 2011 to 2012. The Company’s revenue from installment loans was THB 624 million in 2012, which was an increase of 20.9% from THB 516 million in 2011. This increase was mainly due to high growth of 25.0% in the past two years in income from lease-to-own installment plans for vending machines. The growth trend is expected to continue in the coming years. Interest income from the hire purchase business accounts for about 30.0% of Singer’s overall revenue. Singer charges an annual interest rate of more than 30.0%, slightly higher than the 28.0% interest rate for personal loans, in view of the additional services provided, such as customer after-sales service and home delivery. Singer has a large network through its direct-sales operations and is well known for its installment plans. Singer’s subsidiary Singer Leasing oversees credit and debt collection. Singer Leasing uses a credit-analysis program and also analyzes borrowers’ records at the National Credit Bureau to check their credit worthiness. Singer Leasing classifies its customers in two categories – ‘Good borrowers’ who pay timely installments are allowed easy access to further credit, and ‘Risky borrowers’ with a history of delayed payments have to go through a strict evaluation process to be considered for credit. 207

Easy Buy, although the third largest player, has a much smaller gross lending value of THB 254 million in 2012 and growth of 5.4% from 2011 to 2012. The Company’s revenue from installment loans was THB 58.54 million in 2011, which was a decrease of 38.0% from THB 95 million in 2010, mainly due to changes in the company’s policy to strictly screen borrowers and vendors for quality and the launch of new products. Easy Buy operates under the “Umay+” brand and targets middle-and upper-income customers with regular income. Although most of Easy Buy’s business (99.0%) comes from revolving loans to businesses, it has a sizable hire purchase portfolio as well. The Installment Loan business is serviced through its more than 330 vendor shops which consist of specialty shops, department stores, superstores, hypermarkets, and modern traders. Top three consumer lending entities by gross lending value, Thailand, Historic 2010-2012 Rank Company 2010 2011 (million THB) 1 2 3 Aeon . . . . . . . . . . . . . . Singer . . . . . . . . . . . . . Easy Buy . . . . . . . . . . Others. . . . . . . . . . . . . Total 17,931 1,193 297 23,709 43,130 18,436 1,373 241 25,470 45,520 19,911 1,757 254 26,278 48,200 5.4% 21.4% -7.7% 5.3% 5.7% 2012 CAGR 10-12

Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209
Note: The above figures indicate the lending value towards consumer durables hire purchases only.

References • • • • • • • International Monetary Fund (IMF) World Bank Asian Development Bank CIA World Factbook Trade Interviews Trade associations Company annual reports and websites (Singer, Abans, Damro, Softlogic, Browns, Aeon, Easy Buy, BML, Walton, My One, CSD, USL/Dacolence, Metro, Bajaj Electrical, Usha, Crompton Greaves, Lux, Mida) Industry Reports Department of Census and Statistics – Sri Lanka Central Bank of Sri Lanka Bangladesh Bureau of Statistics (BBS)

• • • •

208

• • • • • • • •

Central Bank of Bangladesh Pakistan Bureau of Statistics Bank of Pakistan State Bank of Pakistan Statistical Bulletin Mar-13 Central Statistical Organisation, India Ministry of Statistics and Programme Implementation, India National Statistical Office – Thailand Bank of Thailand

Exchange Rates 1. US$ figures are converted from LKR based on average annual historical exchange rates as below: Sri Lanka Currency (LKR per US$) 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108.334 114.945 113.064 110.565 127.619

Note: The forecast US$ figures are converted from LKR based on average annual historical exchange rate for 2012.

2.

US$ figures are converted from BDT based on average annual historical exchange rates as below: Bangladesh Currency (BDT per US$) 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67.60 69.04 69.65 74.15 81.86

Note: The forecast US$ figures are converted from BDT based on average annual historical exchange rate for 2012.

209

3.

US$ figures are converted from PKR based on average annual historical exchange rates as below: Pakistan Currency (PKR per US$) 70.41 81.71 85.19 86.34 93.40

2008 2009 2010 2011 2012

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Note: The forecast US$ figures are converted from PKR based on average annual historical exchange rate for 2012.

4.

US$ figures are converted from INR based on average annual historical exchange rates as below: India Currency (INR per US$) 43.51 48.41 45.73 46.67 53.44

2008 2009 2010 2011 2012

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Note: The forecast US$ figures are converted from INR based on average annual historical exchange rate for 2012.

5.

US$ figures are converted from THB based on average annual historical exchange rates as below: Thailand Currency (THB per US$) 33.31 34.29 31.69 30.49 31.08

2008 2009 2010 2011 2012

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Note: The forecast US$ figures are converted from THB based on average annual historical exchange rate for 2012.

For and on behalf of The Nielsen Company (Singapore) Pte Ltd

23 September 2013 Joan Koh Managing Director

210

MANAGEMENT
Directors Our Board of Directors is entrusted with the responsibility for our overall management and direction. The following table sets forth information regarding our Directors. Date of appointment as Director

Name Stephen H. Goodman . . . . . . . .

Age

Address

Occupation

69

118 North Bedford Road, Suite 301-A Mt Kisco, NY 10549 USA 7/F, Baskerville House 13 Duddell Street, Hong Kong

Chairman and Executive Director

June 5, 2013

Gavin John Walker . . . . . . . . . .

44

President, Chief Executive Officer and Executive Director Non-Independent Non-Executive Director Non-Independent Non-Executive Director Lead Independent Non-Executive Director Independent NonExecutive Director

June 5, 2013

Tobias Josef Brown . . . . . . . . . .

50

2/F, Baskerville House 13 Duddell Street, Hong Kong 2/F, Baskerville House 13 Duddell Street, Hong Kong 33/F Alexandra House 18 Chater Road Central, Hong Kong 438 Alexandra Road #21-00 Alexandra Point Singapore 119958 680 Upper Thomson Road Singapore 787103 4/F, 49 Austin Road, Kowloon, Hong Kong

June 5, 2013

Peter James O’Donnell . . . . . . . .

51

June 5, 2013

Jeremy Paul Egerton Hobbins . .

66

September 23, 2013

Hui Choon Kit . . . .

49

September 23, 2013

Laurent Levan . . . .

46

Independent NonExecutive Director

September 23, 2013

Malcolm John Matthews . . . . . . . .

73

Independent NonExecutive Director

June 5, 2013

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Experience of our Board of Directors Information on the key business and working experience of our Directors is set out below: Stephen H. Goodman (“ Stephen Goodman ”) is our Chairman and Executive Director and was appointed to the board of directors of our Company on June 5, 2013. Since July 2003, he has also served as Chairman and Executive Director of Singer Asia. Since 1998, he has been the Chairman, Executive Director, President and Chief Executive Officer of Retail Holdings N.V. (formerly known as Singer N.V.) (“ Retail Holdings ”), a Controlling Shareholder of our Company. Prior to this, he was a Managing Director at Bankers Trust Company (“ Bankers Trust ”) from 1986 to 1998. At Bankers Trust, he served as Head of International Mergers and Acquisitions from 1986 to 1990, as head of Asia strategic advisory based in Hong Kong from 1990 to 1996, and in the Chairman’s office with responsibility for bank strategy and mergers and acquisitions from 1996 to 1998. He served in The Singer Company N.V. from 1977 to 1986 in the treasury and legal departments, becoming Treasurer and Senior Director Business Investments. He also served with the U.S. Government from 1969 to 1977, conducting economic research and policy analysis. He taught economics at the University of Zambia as an Assistant Lecturer from 1967 to 1968. Mr. Goodman graduated from Cornell University, Ithaca, New York, USA with a Bachelor of Science in 1965 and from Yale University, New Haven, Connecticut, USA with a Master of Arts and Master of Philosophy in 1967 and 1968, respectively. Gavin John Walker (“ Gavin Walker ”) is our President and Chief Executive Officer and was appointed to the board of directors of our Company on June 5, 2013. Since August 2005, he has also served as President and Chief Executive Officer, and since October 2007, as Executive Director of Singer Asia. Prior to this, he was the Managing Director of Ashton Chase Group Ltd, a United Kingdom property investments and property trading company, from 2004 to 2005. From 2002 to 2003, he was the Managing Director of First Prize Solutions (a subsidiary of Auto & General Insurance Group, South Africa). From 1995 to 2002, he was initially the Finance Director, then the Chief Executive Officer of Profurn Limited, a retailer of household consumer durables and consumer finance company that operated in 16 African countries, and was also a licensee of the Singer trademark for certain products and markets in Africa. In 1995, he was a Marketing Manager of First National Bank of South Africa and in charge of the acquisition of hire purchase assets from retail companies. In 1988, he was awarded a university bursary by KPMG and worked with them until 1995, at which time he was a Manager in the Corporate Finance Division of the Johannesburg office, South Africa. He currently holds directorships with the local operating entities within our Group. Mr. Walker graduated from University of Witwatersrand, Johannesburg, South Africa with a Bachelor of Commerce in 1990 and a Bachelor of Accountancy in 1991. He qualified as a South African chartered accountant in 1995. Tobias Josef Brown (“ Tobias Brown ”) is our Non-Independent Non-Executive Director and was appointed to the board of directors of our Company on June 5, 2013. Since August 2003, he has also served as director of Singer Asia. Mr. Brown co-founded UCL Asia Partners, L.P., a private equity fund and a Controlling Shareholder of our Company in 1999 and has served as a Managing Director of UCL Asia Ltd. since 1999. He has served as a Non-Executive Director of Singer Thailand Public Co., Ltd and of KCS Limited since 2003. From 2003 to 2010, he served on the board of Singer Bangladesh Limited as a Non-Executive Director. From 2003 to 2008, he was an Independent Non-Executive Director of Hsin Chong Construction Group Limited, a company listed on the Stock Exchange of Hong Kong, and from 1994 to 2005, he was a Non-Executive Director of A-S China Plumbing Products Ltd. In 2010, he served as Executive Chairman and an Executive Director of Noble Group Limited, a company listed on the Stock Exchange of Singapore (“ Noble Group ”), and from 1995 to 2007, he served as a Non-Executive Director and then as Non-Executive Chairman of Noble Group. From 1991 to 1999, he was the Managing Director of General Oriental Investments Limited (“ General Oriental ”), an industrial holding company controlled by the late Sir James Goldsmith. From 1986 to 1991, he held positions beginning as

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Research Analyst and then rising to Senior Vice President at Asia Securities, Inc, an investment banking firm headquartered in Taipei, Taiwan. Mr. Brown attended Brandeis University, Massachusetts, USA. Peter James O’Donnell (“ Jamie O’Donnell ”) is our Non-Independent Non-Executive Director and was appointed to the board of directors of our Company on June 5, 2013. Since August 2003, he has also served as director of Singer Asia. Mr. O’Donnell co-founded UCL Asia Partners, L.P., a private equity fund and a Controlling Shareholder of our Company, in 1999 and has served as a Managing Director of UCL Asia Limited since 1999. He has also served as a Non-Executive Director of Singer (Sri Lanka) PLC, a company listed on the Colombo Stock Exchange, and KCS Limited since 2003. From 2003 to 2010, he served on the boards of both Singer Bangladesh Limited and Singer Pakistan Limited as a Non-Executive Director. From 1994 to 2009, he was a Non-Executive Director of A-S China Plumbing Products Ltd., a company which was listed on the Stock Exchange of Hong Kong from 2005 to 2009. In 2010, he served as an Executive Director and Senior Vice President of Noble Group, and from 1995 to 2007 he was a Non-Executive Director of Noble Group. From 1995 to 1999, he was a Director of General Oriental. From 1984 to 1995, he held various positions beginning as an Associate and rising to Vice President and Head of Private Equity – Asia at Bankers Trust. Mr. O’Donnell graduated in 1984 from Harvard College of Cambridge, MA, USA with an AB with honors and he graduated from Harvard Business School of Cambridge, MA, USA in 1991 with an MBA. Jeremy Paul Egerton Hobbins (“ Jeremy Hobbins ”) is our Lead Independent Non-Executive Director and was appointed to the board of directors of our Company on September 23, 2013. Since 2009, he has been an Executive Director of Fung Holdings (1937) Limited (formerly known as Li & Fung (1937) Limited), the controlling shareholder of the Fung Retailing Group (the retailing arm of the Fung Group). Since 2004, he has been on the board of Convenience Retail Asia Limited as a Non-Executive Director. He was appointed as a Director of Trinity Limited in December 2006 to June 2011 and the formerly listed Integrated Distribution Services Group Limited (which was privatized in October 2010) from October 2003 to April 2011. Previously, from 2004 to 2006, he was the Group Managing Director of Fung Retailing Limited (formerly known as Li & Fung (Retailing) Limited) and from 1999 to 2004, the Deputy Chairman of Fung Distribution International Limited (formerly known as Li & Fung Distribution Limited). From 1996 to 1999, he was the Chief Executive Officer of Inchcape Marketing Service Limited, Asia Pacific, which was listed in Singapore, and from 1993 to 1996, the Chief Executive of Inchcape Buying Services based in Hong Kong. From 1990 to 1992, he was the President of the Campbell Soup Company, United Kingdom, and from 1987 to 1990, the President of Ault Foods, Canada. Prior to that, from 1984 to 1987, he also held a number of senior management positions in Procter & Gamble. From 1981 to 1984, he was the Regional Market Director of Richardson Vicks, Singapore and from 1977 to 1981, the Group Marketing Controller of AS Watson, Hong Kong. Mr. Hobbins started his career as a commercial apprentice working in brand management at Cadbury Schweppes Limited. Hui Choon Kit is our Independent Non-Executive Director and was appointed to the board of directors of our Company on September 23, 2013. He is currently the Chief Financial Officer for the Fraser and Neave, Limited Group (“ F&N Group ”) and is responsible for the F&N Group’s corporate finance, treasury, accounting, taxation, information technology and investor relations functions. Prior to being the Chief Financial Officer, he held various positions with the F&N Group, such as the Deputy Financial Controller from 2008 to 2009, the General Manager of the Treasury & Budget department from 2005 to 2008, the General Manager of the Chairman’s Office/Corporate Communications department from 2002 to 2005 and the Senior Manager/Deputy General Manager of the Corporate Planning & Business Development department from 2000 to 2002. Between 1997 and 1999, he was a Manager in the Corporate Finance department of Schroder International Merchant Bankers Limited and from 1994 to 1996, he was an Assistant Vice President of the Investment Banking department of Keppel Bank of Singapore Limited (now known as OCBC Bank). From 1989 to 1993, he was an Audit Senior with Ernst & Young LLP and an Executive Consultant with Ernst & Young Consultants Pte Ltd. Mr. Hui graduated from Curtin 213

University, Australia in 1989 with a Bachelor of Business (Accounting) and from Nanyang Technology University in 1996 with a Master of Business Administration. He is a Certified Public Accountant with the Institute of Certified Public Accountants in Singapore. Laurent Levan is our Independent Non-Executive Director and was appointed to the board of directors of our Company on September 23, 2013. Since September 2009, he has been the Director of International and Special Projects, a Group Executive Committee member and member of the IT, Risks, Investment, and Project Management committees at NTUC Fairprice Co-operative Ltd. Since 2010, he has been the Chief Executive Officer of Fairprice International (2010) Pte Ltd, where he is responsible for international operations. In February 2012, he also became General Manager HyperCash for Singapore at NTUC Fairprice Co-operative Ltd. and in May 2013, the Chief Executive Officer at Saigon-Co-op Fairprice LLC. From 2005 to 2009, he was Chief Operating Officer (Vietnam) and Executive Regional Director (France) for Metro AG, and from 1994 to 2005 he held a number of senior positions within Carrefour SA including Commercial Centers Director (Japan), Country Business Development Director (Japan, Singapore, Philippines, Indonesia, India, Vietnam), and Country Chief Representative (Indonesia, Philippines, Japan). Mr. Levan has a Degree Commerce from the University of Paris Rene Descartes and a Master’s degree in Finance from ESG Management School in Paris. He attended the general management program at IMD and finance program at LBS. Malcolm John Matthews (“ Malcolm Matthews ”) is our Independent Non-Executive Director and was appointed to the board of directors of our Company on June 5, 2013. Since May 2006, he has also served as director of Singer Asia. Mr. Matthews was an Independent Non-Executive Director of Retail Holdings from 2000 to 2013 and resigned from his directorship in July 2013. Mr. Matthews has been a consultant to and the independent director of TAL Apparel Ltd., a multi-national garment manufacturer, since 1997. He also served as a consultant to The Singer Company N.V. from 1999 to 2000. Prior to that, from 1985 to 1997, he was the Managing Director and Chief Executive Officer of the Hong Kong & China Gas Company, a Hong Kong publicly-listed utility company. From 1975 to 1984, he held various positions at Airco Industrial Gases, Airco Inc. (a subsidiary of the BOC Group PLC), serving as division president from 1981 to 1984. From 1972 to 1975, he was the Manager of the Gas Applications Department of the BOC Group plc’s Gases Divisions in the United Kingdom and from 1969 to 1972, he was employed as an applications engineer with Air Products and Chemicals Inc. Prior to that, he worked as an Engineer with Grumman Aerospace Corporation from 1968 to 1969, with BOC Group plc from 1965 to 1968 and as a volunteer teacher in Ghana with Voluntary Services Overseas from 1963 to 1964. He had been Deputy Chairman of the Federation of Hong Kong Industries from 1989 to 1995 and President of the Hong Kong Institution of Engineers from 1993 to 1994. He is currently a fellow of the Hong Kong Institution of Engineers, the Hong Kong Academy of Engineering Science and the Institution of Gas Engineers and Managers. Mr. Matthews graduated from Imperial College London in 1963 with a Bachelor of Science in Chemical Engineering and in 1967 with a Masters of Science in Chemical Engineering. Independent Directors One of the key roles of the directors of our Company, including our Independent Directors, is to formulate our strategic direction to achieve our business objectives. We seek to appoint to our Board persons who have distinguished themselves in their respective fields and who are able to contribute to our business objectives. Each of our Independent Directors confirms that he is able to devote sufficient time to discharge his duties as an Independent Director of our Company.

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Management Reporting Structure The management and reporting structure reflecting the reporting lines and functional responsibilities of our Executive Directors and Executive Officers are set out in the chart below.
BOARD OF DIRECTORS Audit Committee(1) Stephen Goodman (Chairman and Executive Director) Gavin Walker (President, Chief Executive Officer and Executive Director) Tobias Brown (Non-Independent Non-Executive Director) Jamie O'Donnell (Non-Independent Non-Executive Director) Jeremy Hobbins (Lead Independent Non-Executive Director) Hui Choon Kit (Independent Non-Executive Director) Laurent Levan (Independent Non-Executive Director) Malcolm Matthews (Independent Non-Executive Director)

Nominating Committee(2)

Remuneration Committee(3) Gavin Walker President and Chief Executive Officer

Strategy Committee(4)

Gelmart Gellecanao Vice President, Risk Management

Joe Kan Chief Financial Officer and Vice President, Finance

Ajith Paranavitane Vice President, Information Services

Rajeev Bajaj Vice President, India

Syed Aleem Hussain Vice President, Pakistan

Asoka Pieris Vice President, Sri Lanka

Boonyong Tansakul Hamim Rahmatullah Vice President, Vice President, Thailand Bangladesh

Notes: (1) (2) (3) (4) Our Audit Committee comprises Hui Choon Kit, Jamie O’Donnell and Malcolm Matthews. The Chairman of our Audit Committee is Hui Choon Kit. Our Nominating Committee comprises Jeremy Hobbins, Tobias Brown and Hui Choon Kit. The Chairman of our Nominating Committee is Jeremy Hobbins. Our Remuneration Committee comprises Malcolm Matthews, Tobias Brown and Jeremy Hobbins. The Chairman of our Remuneration Committee is Malcolm Matthews. Our Strategy Committee comprises Laurent Levan, Jamie O’Donnell and Jeremy Hobbins. The Chairman of our Strategy Committee is Laurent Levan.

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Independence of our Independent Directors The Singapore Code of Corporate Governance (the “ Code of Corporate Governance ”) recommends that there should be a strong and independent element on the board of directors which is able to exercise objective judgment on corporate affairs independently, in particular, from (i) the management of the company and (ii) any person who directly or indirectly holds 10.0% or more of the voting shares in the company, excluding treasury shares (a “ 10.0% Shareholder ”). Under the Code of Corporate Governance, an “independent director” is defined as one who has no relationship with the listed company (the “ Listco ”), its related companies, its 10.0% Shareholders or its officers that could interfere, or be reasonably perceived to interfere, with the exercise of the director’s independent business judgment with a view to the best interests of the Listco. Examples of relationships which deem a director not to be independent include: (a) a director being employed by the Listco or any of its related companies for the current or any of the past three financial years; a director who has an immediate family member who is, or has been in any of the past three financial years, employed by the Listco or any of its related companies as a senior executive officer whose remuneration is determined by the remuneration committee; a director, or an immediate family member, accepting any significant compensation from the Listco or any of its related companies for the provision of services, for the current or immediate past fiscal year, other than compensation for board service; a director, (i) (ii) who, in the current or immediate past financial year, is or was; or whose immediate family member, in the current or immediate past financial year, is or was,

(b)

(c)

(d)

a 10.0% Shareholder of, or a partner in (with 10.0% or more stake), or an executive officer of, or a director of, any organization to which the Listco or any of its subsidiaries made, or from which the company or any of its subsidiaries received, significant payments or material services (which may include auditing, banking, consulting and legal services), in the current or immediate past financial year. As a guide, payments aggregated over any financial year in excess of US$200,000 should generally be deemed significant; (e) a director who is a 10.0% Shareholder or an immediate family member of a 10.0% Shareholder of the Listco; or a director who is or has been directly associated with a 10.0% Shareholder of the Listco, in the current or immediate past financial year.

(f)

Present and past principal directorships of our Directors and our Executive Officers The past and present principal directorships held by our Directors and our Executive Officers in the last five years preceding the date of this offering document are set out in “Appendix F – List of Present and Past Principal Directorships ”. Interests in Shares As at the date of this offering document, our President, Chief Executive Officer and Executive Director, Gavin Walker, has a direct shareholding of 4.76% in our Company. 216

Our Non-Independent Non-Executive Directors, Tobias Brown and Jamie O’Donnell, own UCL Asia Investments, Ltd (in equal proportions), which in turn owns 99% of UCL Asia GP, L.P. with the remaining 1% owned (in equal proportions) by Tobias Brown and Jamie O’Donnell. UCL Asia GP, L.P. is the General Partner of and manages UCL Asia Partners, L.P., which owns 100.0% of the shares in UCL Asia Holdings VII Limited, which has a 41.14% direct shareholding in our Company. Our Chairman and Executive Director, Stephen Goodman, has a direct shareholding of 16.9% in Retail Holdings and is also deemed interested in an additional shareholding of 8.4% in Retail Holdings, which is held by three trusts for which Mr. Goodman’s spouse is the trustee and for which the beneficiaries are Mr. Goodman’s child and grandchildren. Mr. Goodman thus has an interest (direct and deemed) in 25.3% of the shares of Retail Holdings. Retail Holdings in turn holds 100.0% of the shares in ReHo Limited, which has a 54.10% direct shareholding in our Company. Our Independent Non-Executive Director, Malcolm Matthews, has a direct shareholding of 0.49% in Retail Holdings. For further details as to our Directors’ interests in our Shares, see “ Share Capital and Shareholders – Ownership Structure ” or “– Interests in Shares ”. Service Agreements Service Agreement with Stephen Goodman On July 4, 2013, we entered into a service agreement with our Chairman and Executive Director, Stephen Goodman. The following is a summary of Mr. Goodman’s service agreement. Mr. Goodman’s service agreement provides that his employment shall continue (subject to earlier termination as provided in the agreement) for a period of three years from the commencement date. The notice period for termination is six months and we may pay Mr. Goodman salary in lieu of notice. We may terminate Mr. Goodman’s service agreement by written notice immediately if he commits certain acts of default described in the service agreement. Mr. Goodman is subject to certain restrictions up to a period of three years following any termination of his appointment under the service agreement, including restrictions against his employment in, carrying on, or providing advice to any person engaged in, any business within Asia and any other territory in which we or our associated companies have substantial business dealings from time to time, and which is in competition with our business. Service Agreement with Gavin Walker On July 4, 2013, we entered into a service agreement with our President, Chief Executive Officer and Executive Director, Gavin Walker. The following is a summary of Mr. Walker’s service agreement. Mr. Walker’s service agreement provides that his employment shall continue (subject to earlier termination as provided in the agreement) for a period of three years from the commencement date. The notice period for termination is six months and we may pay Mr. Walker salary in lieu of notice. We may terminate Mr. Walker’s service agreement by written notice immediately if he commits certain acts of default described in the service agreement. Mr. Walker is subject to certain restrictions up to a period of three years following any termination of his appointment under the service agreement, including restrictions against his employment in, carrying on, or providing advice to any person engaged in, any business within Asia and any other territory in which we or our associated companies have substantial business dealings from time to time, and which is in competition with our business. 217

Term of office Our Directors do not have fixed terms of office. Each Director is required to retire from office every three years and for this purpose, at each annual general meeting, one-third of the Directors for the time being (or, if their number is not a multiple of three, the number nearest to but not less than one-third) is required to retire from office by rotation and will be eligible for re-election at that annual general meeting (the Directors so to retire being those longest in office). Employment Terms Other than Stephen Goodman and Gavin Walker, with each of whom we have entered into a service agreement, our key management are employed under employment letters, which generally stipulate remuneration terms, entitlement to leave and other benefits consistent with our prevailing policies. Employees are bound by confidentiality obligations. Typically, the notice period for termination of employment of key management is one month, given either by the employee or us, subject to local laws relating to notice periods and termination. We may also terminate the employment of key management by giving salary in lieu of notice, as well as terminate the employment of key management for cause, without notice. There are no existing or proposed service contracts entered into or to be entered into by our Company or any of our subsidiaries with any of our Directors which provide for compensation in the form of stock options, or pensions, retirement or other similar benefits, or other benefits, upon the termination of their employment. Other Arrangements between Gavin Walker and Controlling Shareholder Gavin Walker has, pursuant to an Option Exercise Loan Agreement dated July 4, 2013 (the “ Loan Agreement ”), obtained a loan from ReHo Limited for the purchase of 28,904 shares in Singer Asia via the exercise of certain unexercised share options granted by Singer Asia to Mr. Walker pursuant to an option agreement dated July 10, 2007, as amended on April 12, 2011. The Loan Agreement sets out that one-third of the principal amount of the loan (together with all interest accrued thereon and other amounts due or owing to ReHo Limited with such portion of the loan) will be deemed to have been repaid on each of the first, second and third anniversaries of the Offering provided that Mr. Walker remains an employee of Singer Asia or Sewko on each of those respective dates. In the event that Mr. Walker is no longer an employee of either Singer Asia or Sewko on each of these respective anniversaries, the Loan Agreement provides that the loan will be deemed to have been repaid in full on the termination date of employment if Mr. Walker’s employment was terminated due to incapacity caused by ill-health or accident, prohibition by law, mental disorder, bankruptcy, or incompetency in the performance of his duties or if Sewko terminated Mr. Walker’s employment by giving notice, pursuant to a service agreement dated July 4, 2013 between Mr. Walker and Sewko. Although the lender on record under the Loan Agreement is ReHo Limited, 43.2% of the loan will be funded by UCL Asia Holdings VII Limited pursuant to the provisions of a side letter between UCL Asia Holdings VII Limited and ReHo Limited. Corporate Governance Our Directors recognize the importance of corporate governance and the maintenance of high standards of accountability to our shareholders. The Code of Corporate Governance recommends that the roles of chairman and chief executive officer be separated, to ensure an appropriate balance of power and increased accountability to shareholders. Our Board has established four committees: (i) the Audit Committee; (ii) the Nominating Committee; (iii) the Remuneration Committee; and (iv) the Strategy Committee.

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Audit Committee Our internal policy requires the Audit Committee to have at least three members, all of whom have to be non-executive and the majority of whom, including the Chairman, have to be independent. Under our Audit Committee’s terms of reference, our Audit Committee should have broad business experience, and have knowledge of our operations, finance and auditing procedures with at least two members having recent and relevant accounting or related financial management expertise or experience. Our Audit Committee will have explicit authority to investigate any matter within its terms of reference, full access to and cooperation by our management and full discretion to invite any director or executive officer to attend its meetings, and reasonable resources to enable it to discharge its functions properly. Our Audit Committee comprises three members, namely Hui Choon Kit, Malcolm Matthews and Jamie O’Donnell. The Chairman of our Audit Committee is Hui Choon Kit. Our Audit Committee is required to meet at least four times a year to perform functions such as to: (a) review all of our financial information and any public financial reporting with our management and external auditors for submission to the Board; review the significant financial reporting issues and judgments so as to ensure the integrity of the financial statements of our Company and any announcements relating to our Company’s financial performance list; review, together with external auditors, their audit plan, audit report, management letter and the responses which the external auditors have received from our management on difficulties which they have encountered with our management in the course of their audit; review with external and internal auditors, and report to our Board at least annually, the adequacy and effectiveness of our internal control system, including financial, operational, compliance and information technology controls (such review to be carried out internally or with the assistance of any competent third parties); review with internal auditors the program, scope and results of any internal audit and our management’s response to their findings to ensure that appropriate follow-up measures are taken; review the effectiveness of our internal audit function and initiate internal controls audits as and when it deems fit to satisfy itself that our Group’s internal controls remain robust and effective; review the scope and results of any external audit, and the independence and objectivity of the external auditors; review with external auditors the impact of any new or proposed changes in accounting principles or regulatory requirements on our financial information; review interested person transactions for potential conflicts of interest as well as all conflicts of interests to ensure that proper measures to mitigate such conflicts of interests have been put in place (see the “ Interested Person Transactions and Conflicts of Interests – Review Procedures for Future Interested Person Transactions ”); assess the suitability of an accounting firm as external auditors and recommend to our Board the appointment or re-appointment of such external auditors for the coming year, approve their compensation as negotiated by our management and review and approve their discharge; 219

(b)

(c)

(d)

(e)

(f)

(g)

(h)

(i)

(j)

(k)

review filings with the SGX-ST or other regulatory bodies which contain our financial information and ensure proper disclosure; commission and review the findings of internal investigations into matters where there is any suspected fraud or irregularity or failure of internal controls or infringement of any law, rule and regulation which has or is likely to have a material impact on our operating results and/or financial position;

(l)

(m) review risk management policies and guidelines and monitor compliance therewith; (n) review policy and arrangements by which our staff and any other persons may, in confidence, raise concerns about possible improprieties in matters of financial reporting or other matters and ensure that arrangements are in place for such concerns to be raised and independently investigated, and for appropriate follow-up action to be taken; review and approve all hedging policies and types of hedging instruments to be implemented by us, if any; report to the Board the work performed by the Committee in carrying out its functions; monitor the investments in our customers, suppliers and competitors made by our Directors, Controlling Shareholders and their respective associates who are involved in the management of or have shareholding interests in similar or related business of our Company and make assessments on whether there are any potential conflicts of interest; review the safeguards in place for cash and receivable management polices and whether the policies and processes are adequate; and undertake generally such other functions and duties as may be required by law or the Listing Manual, and by amendments made thereto from time to time.

(o)

(p) (q)

(r)

(s)

All decisions at any meeting of the Audit Committee shall be decided by a majority of votes of the members present and voting and such decision shall at all times exclude the vote, approval or recommendation of any member who has a conflict of interest in the subject matter under consideration. Apart from the duties listed above, the Audit Committee is required to discuss matters which may involve any suspected fraud or irregularity, or suspected infringement of any law, rule or regulation, which has or is likely to have a material impact on our operating results or financial position with external auditors and report such matters to the Board at an appropriate time. Our Board, after making all reasonable enquiries, with the concurrence of our Audit Committee, is of the opinion that our internal controls are adequate to address the financial, operational and compliance risks. Our Audit Committee will appoint a third-party professional firm to review our internal control processes and procedures after we are listed on the Official List of the SGX-ST. In addition, all future transactions with related parties shall comply with the requirements of the Listing Manual. As required by paragraph 1(9)(e) of Appendix 2.2 of the Listing Manual, our Directors shall abstain from voting in respect of any contract or arrangement or proposed contract or arrangement in which they have directly or indirectly a personal material interest. Our Audit Committee, after having: (a) conducted interviews with our Chief Financial Officer; (b) considered the qualifications and past working experience of our Chief Financial Officer (as described in the section entitled “Executive Officers ”); (c) noted our Chief Financial Officer’s abilities, familiarity and diligence in relation to our financial matters and information; (d) noted the 220

absence of negative feedback on our Chief Financial Officer from KPMG Phoomchai Audit Limited, our Reporting Accountants and Auditors; and (e) made all reasonable enquiries, and to the best of its knowledge and belief, is of the view that our Chief Financial Officer has the requisite competence, character and integrity expected thereof. We will commission an annual internal controls audit (including on cash and receivables management) by a suitable and qualified professional accounting firm until the Audit Committee is satisfied that our Group’s internal controls are robust and effective enough to mitigate our Group’s internal control weakness. Prior to the decommission of the annual internal control audit, our Board of Directors will report to the SGX on how the key internal control weaknesses have been rectified and the basis for the decision to decommission the annual internal control audit. Upon completion of the internal controls audit, we will make appropriate disclosure via SGXNET on any material, price-sensitive internal controls weaknesses and any follow-up to be taken by our Board of Directors. Nominating Committee Our internal policy requires the Nominating Committee to have at least three members, of whom the majority including the Chairman, have to be independent. If there is a Lead Independent Director, he should be a member of the Nominating Committee. Our Nominating Committee comprises Jeremy Hobbins, Tobias Brown and Hui Choon Kit. The Chairman of our Nominating Committee is our Lead Independent Non-Executive Director, Jeremy Hobbins. The Nominating Committee is responsible for matters such as: (a) reviewing and recommending candidates for appointments to our Board and Board committees (excluding the appointment of existing members of our Board to each of the Audit Committee, the Nominating Committee and the Remuneration Committee for the purposes of the initial establishment of such Board committees), as well as candidates for senior management staff, who are not also candidates for appointment to our Board; developing a process for the evaluation of the performance of our Board, our board committees and our Directors; reviewing and recommending nomination for re-appointment or re-election or renewal of appointment of our Directors; reviewing and recommending candidates to be our nominees on the boards and board committees of the listed companies and entities within our Group; reviewing board succession plans for our Directors, in particular, the chairman and the chief executive officer; reviewing training and professional development programs for our Board; determining the independence of our Directors; and undertaking generally such other functions and duties as may be required by law or the Listing Manual, and by amendments made thereto from time to time.

(b)

(c)

(d)

(e)

(f) (g) (h)

Each member of the Nominating Committee is required to abstain from voting, approving or making a recommendation on any resolutions of the Nominating Committee in which he has a conflict of interest in the subject matter under consideration.

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The Nominating Committee notes that Guideline 2.4 of the Code of Corporate Governance 2012 stipulates that “The independence of any director who has served on the Board beyond nine years from the date of his first appointment should be subject to particularly rigorous review. In doing so, the Board should also take into account the need for progressive refreshing of the Board. The Board should also explain why any such director should be considered independent.” Having carried out a rigorous review, the Nominating Committee is of the view that Malcolm Matthews is suitable to act as independent director of the Board of Directors in view of the following factors: (a) Mr. Matthews has not been employed by Sewko (or Singer Asia) or any of its related corporations for the current or any of the past three financial years. None of Mr. Matthews’ immediate family was employed by Sewko (or Singer Asia) or any of its related corporations in any of the past three financial years. Other than approximately US$52,500 per year received from Retail Holdings as compensation for board services provided, 600 shares in Retail Holdings awarded to Mr. Matthews in September 2012 (all of which are expected to fully vest without further restrictions on his resignation as director of Retail Holdings prior to the IPO), options at US$3.00 to buy 1,500 shares of Retail Holdings in January 2005, options at. US$1.12 to buy 4,500 shares of Retail Holdings in October 2004 and options at US$1.12 to buy 4,500 shares of Retail Holdings in October 2003 (all of which he exercised in May 2007, acquiring 10,500 shares), and about US$50,000 paid to him about 13 years ago for him to lead a team to evaluate the sewing machine supply situation that The Singer Company N.V. (a predecessor company to Retail Holdings) was then facing, he did not receive any other significant compensation from Sewko or any of its related corporations (including Retail Holdings) for the provision of such services. Mr. Matthews and his immediate family members have not received any compensation from Sewko or Singer Asia for the current or immediate past financial year. Mr. Matthews has confirmed that he and his family members are not, and have not, in the past financial year been, a 10.0% shareholder of or a partner in (with 10.0% or more stake), or an executive officer of, or a director of, any organization to which the company or any of its subsidiaries made, or from which the company or any of its subsidiaries received, significant payments or material services (which may include auditing, banking, consulting and legal services). Mr. Matthews holds only 0.49% of the Retail Holdings. While Mr. Matthews was an independent non-executive director of Retail Holdings, he was not accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of the 10.0% shareholder in relation to the corporate affairs of the corporation. He had not been nominated as director by any shareholder of Retail Holdings. Mr Matthews will not be accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of Retail Holdings, even after the Listing Date.

(b)

(c)

(d)

(e)

(f) (g)

(h)

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Nominating Committee’s view of our Independent Directors The Nominating Committee, having taken into consideration the following: (a) (b) (c) the number of listed company directorships by each of our Independent Directors; the principal commitments of our Independent Directors; the confirmations by our Independent Directors stating that they are each able to devote sufficient time and attention to the matters of the Company; our Independent Directors’ working experience and expertise in different areas of specialization; and the composition of the Board,

(d)

(e)

is of the view that each of our Independent Directors is individually and collectively able to devote sufficient time to the discharge of his duties and is suitable and possesses relevant experience as an Independent Director of our Company. Remuneration Committee Our internal policy requires the Remuneration Committee to have at least three members, all of whom must be non-executive and a majority of whom must be independent, including the Chairman. Our Remuneration Committee comprises Tobias Brown, Laurent Levan and Malcolm Matthews. The Chairman of our Remuneration Committee is Malcolm Matthews. Our Remuneration Committee is responsible for the performance of the duties and responsibilities such as to: (a) review and approve our policy for determining the remuneration of our executives, including that of our chief executive officer and other key management executives (collectively, the “ Senior Management Executives ”); review the ongoing appropriateness and relevance of our executive remuneration policy and other benefit programs; consider, review and approve and/or vary (if necessary) the entire specific remuneration package and service contract terms for each Senior Management Executive (including directors’ fees, salaries, allowances, bonuses, payments, options, share-based incentives and awards, benefits in kind, retirement rights, severance packages and service contracts), having regard to the executive remuneration policy for each of the companies within our Group; consider and approve termination payments, retirement payments, gratuities, ex-gratia payments, severance payments and other similar payments to members of the Board and key/senior executives, including the Chief Executive Officer; review and approve the design of all option plans, stock plans and/or other equity-based plans; determine each year whether awards will be made under each of our equity-based plans;

(b)

(c)

(d)

(e)

(f)

223

(g)

review and approve each award as well as the total proposed awards under each plan in accordance with the rules governing each plan; review, approve and keep under review performance hurdles and/or fulfillment of performance hurdles for each of our equity-based plans; approve the remuneration framework (including directors’ fees) for our non-executive Directors on the relevant boards of directors within our Group; review succession plans for Senior Management Executive positions; and review with Senior Management Executives the development of our key executives and talented executives.

(h)

(i)

(j) (k)

All decisions at any meeting of the Remuneration Committee shall be decided by a majority of votes of the members present and voting and such decision shall at all times exclude the vote, approval or recommendation of any member who has a conflict of interest in the subject matter under consideration. Strategy Committee We have also established a Strategy Committee. Our internal policy requires the Strategy Committee to have at least three members, all of whom must be non-executive and a majority of whom must be independent, including the Chairman. Our Strategy Committee currently comprises Jeremy Hobbins, Laurent Levan and Jamie O’Donnell. The Chairman of our Strategy Committee is Laurent Levan. Our Strategy Committee’s duties and responsibilities include the following: (a) developing a process to promote the identification by our Senior Management Executives and other employees of new strategic initiatives to include (i) new products, financial services and other service offerings; (ii) new channels of distribution; (iii) new markets (countries of operation); and (iv) other promotional activities (collectively “ Strategic Initiatives ”); reviewing and approving implementation strategies for the approved Strategic Initiatives and monitoring implementation of such strategies; and developing the framework for and reviewing the development and ongoing implementation of our strategic plan.

(b)

(c)

All decisions at any meeting of the Strategy Committee must be decided by a majority of votes of the members present and voting and any such decision must exclude the vote, approval or recommendation of any member who has a conflict of interest in the subject matter under consideration.

224

Executive Officers Our Executive Officers are responsible for our day-to-day management and operations as well as the implementation and execution of our operational policies. We have ten Executive Officers and the following table sets forth information regarding them. Name Stephen Goodman . . . . . . Age 69 Address 118 North Bedford Road Mt Kisco, NY 10549 USA 7/F, Baskerville House 13 Duddell Street, Hong Kong 7/F, Baskerville House 13 Duddell Street, Hong Kong A-26/4, 2nd Floor Mohan Cooperative Industrial Estate New Delhi-110044 India 7/F, Baskerville House 13 Duddell Street, Hong Kong Plot #39, Sector 19 Korangi Industrial Area Karachi Pakistan 80 Nawam Maratha Colombo 2 Sri Lanka 80 Nawam Maratha Colombo 2 Sri Lanka 5B, Road No-126 Gulshan-1 Dhaka-1212 Bangladesh 72 CAT Telecom Tower Floor 17 Charoen Krung Road Bangruk District Bangkok 10500 Thailand Position Chairman and Executive Director of our Company President, Chief Executive Officer and Executive Director of our Company Chief Financial Officer and Vice President, Finance Vice President, India

Gavin Walker. . . . . . . . . . .

44

Kan Yat Cho Joe . . . . . . . .

47

Rajeev Bajaj . . . . . . . . . . .

53

Gelmart Martin Gellecanao . . . . . . . . . . . .

50

Vice President, Risk Management Vice President, Pakistan

Syed Aleem Hussain . . . . .

47

Ajith Shirley Paranavitane .

57

Vice President, Information Services Vice President, Sri Lanka

Hiran Asoka Pieris. . . . . . .

49

Hamim Rahmatullah . . . . .

51

Vice President, Bangladesh

Boonyong Tansakul . . . . . .

48

Vice President, Thailand

225

Experience of our Executive Officers Information on the key business and working experience of our Executive Officers (other than Mr. Stephen Goodman and Mr. Gavin Walker, whose business and working experience are described above) is set out below: Kan Yat Cho Joe (“ Joe Kan ”) is our Vice President, Finance. Since September 2010, he has also served as Chief Financial Officer of Singer Asia. He also serves as a Director of Singer Asean Trading Limited, Singer Corporation Limited, Singer Finance (Lanka) PLC, BT India Limited, Brand Trading (India) Private Limited and V.F. Consultants Ltd. Prior to joining our Company, he was the Head of Financial Services of Octopus Cards Limited, a developer and operator of the Octopus smartcard payment system, from 2003 to 2010. Between 1998 and 2002, he was the General Manager, Hong Kong, and Finance Director, Asia, at Hallmark Cards Asia Limited, where he was responsible for overseeing all operations regarding the distribution of Hallmark products in Hong Kong and the finance and accounting matters in Asia. Between 1995 and 1998, he held the position of Financial Controller or and/or Finance Manager with various corporations in Hong Kong. Between 1992 and 1995, he was a Manager at Ernst & Young, Hong Kong, and from 1988 to 1992, he was a Senior at KPMG, United Kingdom, in the Audit and Special Projects departments. Mr. Kan graduated from the University of Birmingham, United Kingdom in 1988 with a Bachelor degree in Engineering (Electrical and Electronics Engineering) and The Chinese University of Hong Kong in 1998 with a Masters of Business Administration degree. Mr. Kan is also a member of the Institute of Chartered Accountants in England and Wales and of the Hong Kong Institute of Certified Public Accountants. Rajeev Bajaj is our Vice President, India. Since October 2010, he has also served as Chief Executive Officer and Managing Director of Singer India. He previously held the positions of Director, designated as the Finance Director, Alternate Director and Chief Financial Officer, General Manager, Commercial and Controller of Singer India between 2005 and 2010. Between 1986 and 2005, he held various positions in Singer India, including positions of General Manager – Finance and Company Secretary of Singer India at certain points in time. Further, from 2005 to 2008, he was the General Manager – Commercial and Company Secretary of Brand Trading (India) Private Limited. Prior to joining Singer India, from 1985 to 1986, he was a Junior Manager, Finance in Steel Authority of India Limited. Between 1984 and 1985, he was a Chartered Accountant with Thakur Vaidyanath Aiyar & Co., Chartered Accountants. Mr. Bajaj graduated from Shri Ram College of Commerce, University of Delhi in 1980 with a Bachelor of Commerce degree with honors. He is a Fellow Member of the Institute of Chartered Accountants of India and the Institute of Company Secretaries of India. Gelmart Martin Gellecanao (“ Gelmart Gellecanao ”) is our Vice President, Risk Management. Since January 2009, he has also served as Vice President, Risk Management of Singer Asia. He has also been a Director of Singer Bangladesh since October 2010 and a member of its Audit Committee since July 2011. Mr. Gellecanao has been responsible for the overall management of our credit operations since January 2009 and its Internal Audit activities since October 2004. He joined our Group in 1994 and has held a number of positions, including Location Controller to Senior Auditor and Manager of the Internal Audit Department of our Group in the United States. Prior to joining the Group, he worked with SGV & Co., a member firm of Ernst and Young in the Philippines, beginning in 1983 and left as an Audit Manager in 1994. Mr. Gellecanao graduated from the University of the Philippines in the Visayas in 1983 with a Bachelor of Science degree in Business Administration – Majoring in Accounting. He is a member of the Institute of Internal Auditors and an associate member of the Association of Certified Fraud Examiners. He qualified as a Certified Public Accountant (Philippines) in November 1983 and as a Certified Internal Auditor (USA) in May 2003.

226

Syed Aleem Hussain is our Vice President, Pakistan. Since January 2011, he has also served as Director and Chief Executive Officer of Singer Pakistan. He joined Singer Pakistan Limited in August 1993 as a management trainee and has since held various positions including Product Manager, Senior Area Manager, Credit Marketing Manager, and Credit Director. Mr. Hussain graduated from Karachi University in 1988 with a Bachelor of Commerce degree and from the University of East Manila, Philippines in 1992 with a Masters in Business Administration. Ajith Shirley Paranavitane (“ Ajith Paranavitane ”) is our Vice President, Information Services. Since September 2012, he has also served as Vice President, Information Services of Singer Asia with overall responsibility of Information Technology (IT) needs for the Group. He has also held positions such as the Deputy Director and Director of IT of Singer Sri Lanka since 2000. In 1999, he was a Senior Consultant in Trustek Inc, USA, an IT consulting firm. From 1987 to 1998, he held positions such as Manager, IT and Group Manager in Singer Sri Lanka. Prior to that, between 1983 and 1987, he held various positions such as Systems Engineer, Programming Group Manager and Manager (Packaged Application) at Data Management Systems Ltd. Mr. Paranavitane graduated from the University of Colombo of Sri Lanka in 1982 with a Bachelor of Science and the National Institute of Business Management Sri Lanka in 1984 with a Diploma in Computer Systems Design. In 1997, he obtained a post-graduate Diploma in Business and Financial Administration from the Institute of Chartered Accountants of Sri Lanka in association with University of Wageningen, Holland. He is also a Chartered IT Professional and Fellow of the British Computer Society, United Kingdom. Hiran Asoka Pieris (“ Asoka Pieris ”) is our Vice-President, Sri Lanka. Since July 2010, he has also served as a Director and Chief Executive Officer of Singer Sri Lanka. He has worked for our Group and for Retail Holdings in various roles since 1990, including Chief Financial Officer of Singer Asia and Finance Director and accountant of Singer Sri Lanka. Between 1985 and 1990, he was a trainee and then a supervisor and manager at Ernst & Young (formerly known as Ernst & Whinney). He also trained at Management Aids Limited from July 1984 to January 1985. Mr. Pieris is an Associate Member of The Institute of Chartered Accountants of Sri Lanka and a Fellow of the Chartered Institute of Management Accountants, United Kingdom and a Chartered Global Management Accountant. Hamim Rahmatullah is our Vice President, Bangladesh. Since February 2009, he has also served as Managing Director and Chief Executive Officer of Singer Bangladesh. He has been with our Group for 25 years and, since 1988, has held various positions in Singer Bangladesh Limited, including Product Manager, Sales Manager (Wholesale), Marketing Services Manager, Marketing Services Director, Director and Chief Operating Officer. From 1985 to 1988, he worked with Philips Bangladesh Limited in its Consumer Electronic Division. Mr. Rahmatullah is the out-going President of Foreign Investors Chambers of Commerce & Industry (FICCI) and has been nominated as a Commercially Important Person (CIP) by the Government of Bangladesh. He graduated from the Institute of Business Administration, University of Dhaka in 1985 with a Masters of Business Administration degree. Boonyong Tansakul is our Vice President, Thailand. Since December 2009, he has also served as Chief Executive Officer of Singer Thailand. He previously held positions as Deputy Managing Director and Sales and Marketing Director of Singer Thailand, having first joined Singer Thailand in 1992. Between 2003 and 2006, Mr. Tansakul held positions as the General Manager (Marketing, Sales and Service) at Cyberdict Technology Ltd. and the Country Manager in Imation (Thailand) Ltd. Mr. Tansakul graduated from the King Mongkut’s Institute of Technology in 1986 with a Bachelor of Science degree in Electrical Engineering. He also has a Certificate in Executive Development from Northwestern University’s Kellogg Graduate School of Management and a Certificate of Introductory Manufacturing Management from Sanno Institute of Management.

227

The past and present principal directorships held by our Executive Officers in the five years preceding the date of this offering document are set out in “ Appendix F – List of Present and Past Principal Directorships ”. Family Relationships There are no family relationships among any of our Directors, Executive Officers and substantial shareholders. Arrangements or Understandings Tobias Brown and Jamie O’Donnell, our Non-Independent Non-Executive Directors, are nominee directors appointed by UCL Asia Partners, L.P., which owns 100.0% of the shares in UCL Asia Holdings VII Limited, which has a 41.14% direct shareholding in our Company as at the date of this offering document and is a Controlling Shareholder. Stephen Goodman, our Chairman and Executive Director, is a nominee director appointed by Retail Holdings, which owns 100.0% of the shares in ReHo Limited, which has a 54.10% direct shareholding in our Company as at the date of this offering document and is a Controlling Shareholder. Save for the foregoing, none of our Directors or Executive Officers has any arrangement or understanding with any of our substantial shareholders, customers or suppliers or other person pursuant to which such Director or Executive Officer was appointed as a Director or as an Executive Officer. Compensation The compensation, in remuneration bands of S$250,000, paid to our Directors and the Executive Officers for services rendered to us in all capacities on an aggregate basis in the fiscal years ended December 31, 2011 and 2012 and the estimated amount of compensation to be paid for the fiscal year ended December 31, 2013 are as follows: 2013 Estimated

2011 Directors Stephen Goodman . . . . . . . . . . . . . . . . . . . . . . . . . Gavin Walker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tobias Brown . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Jamie O’Donnell . . . . . . . . . . . . . . . . . . . . . . . . . . . Jeremy Hobbins . . . . . . . . . . . . . . . . . . . . . . . . . . . Hui Choon Kit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Laurent Levan . . . . . . . . . . . . . . . . . . . . . . . . . . . . Malcolm Matthews . . . . . . . . . . . . . . . . . . . . . . . . . Executive Officers Joe Kan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rajeev Bajaj . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gelmart Gellecanao . . . . . . . . . . . . . . . . . . . . . . . . Syed Aleem Hussain . . . . . . . . . . . . . . . . . . . . . . . 228 Band 2 Band 1 Band 2 Band 1 Nil (1) Band 4 Nil Nil Nil Nil Nil
(2) (2) (2) (2)

2012

Nil (1) Band 4 Nil Nil Nil Nil Nil
(2) (2) (2) (2)

Band 1 Band 4 Band 1 Band 1 Band 1 Band 1 Band 1 Band 1

Nil (1)(2)

Nil (1)(2)

Band 2 Band 1 Band 2 Band 1

Band 2 Band 1 Band 2 Band 1

2011 Ajith Paranavitane . . . . . . . . . . . . . . . . . . . . . . . . . Asoka Pieris . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Hamim Rahmatullah . . . . . . . . . . . . . . . . . . . . . . . . Boonyong Tansakul . . . . . . . . . . . . . . . . . . . . . . . .
Notes: (1) (2) Remuneration paid by Retail Holdings. Not yet appointed to the Board of Directors of Sewko.

2012 Band 1 Band 1 Band 1 Band 3

2013 Estimated Band 1 Band 1 Band 1 Band 3

Band 1 Band 2 Band 1 Band 2

Remuneration bands: • • • • “ Band 1 ” refers to remuneration below the equivalent of S$250,000. “ Band 2 ” refers to remuneration between the equivalent of S$250,001 and S$500,000. “ Band 3 ” refers to remuneration between the equivalent of S$500,001 and S$750,000. “ Band 4 ” refers to remuneration between the equivalent of S$750,001 and S$1 million.

Compensation includes benefits in kind and any deferred compensation accrued for the relevant fiscal year and payable at a later date. The estimated amount of compensation payable in the current fiscal year excludes any bonus or profit-sharing plan or any other profit-linked agreement or arrangement. Except as set out above, as at the date of this offering document, our Company does not have in place any formal bonus or profit-sharing plan or any other profit linked agreement or arrangement with any of its directors and senior management, and bonuses are expected to be paid on a discretionary basis. As at March 31, 2013, pursuant to the policies of our Company, we have provided for certain amounts for pension, retirement or similar benefits for our employees. Please see section “ Business – Employees ”.

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SEWKO EMPLOYEE SHARE OPTION SCHEME
In conjunction with our listing on the Official List of the SGX-ST, we have adopted a share option scheme known as the “Sewko Employee Share Option Scheme” (the “ Scheme ”) which was approved at an Extraordinary General Meeting of our Shareholders held on September 23, 2013. The rules of our Scheme are set out in Appendix G of this offering document. These rules comply with the requirements set out in the Listing Manual and the Singapore Companies Act. The Scheme will provide eligible participants (“ Participants ”) with an opportunity to participate in the equity of our Company and to motivate them towards better performance through increased dedication and loyalty. The Scheme forms an integral and important component of our compensation plan and is designed primarily to reward and retain employees whose services are vital to our growth and performance. As at the Latest Practicable Date, no Options have been granted under the Scheme. The Scheme is proposed on the basis that it is important to recognize the fact that the services of our employees are important to our success and continued well-being. Implementing the Scheme will enable our Company to give our employees a direct interest in our Company and will also help to achieve the following positive objectives: (i) to motivate Participants to optimize performance standards and efficiency and to maintain a high level of contribution; to retain key employees whose contributions are important to our long-term growth and prosperity;

(ii)

(iii) to attain harmonious employer/employee relations and to strengthen working relationships with our close business associates; (iv) to align the interests of employees and other Participants with the interests of the Shareholders; and (v) to develop a participatory style of management which promotes greater commitment and dedication amongst the employees and instills loyalty and a stronger sense of identification with our long-term prosperity.

The aggregate number of shares to be released under the Scheme (the “ Scheme Shares ”) will be up to 5.0% of our Company’s total issued share capital. As the Scheme is valid for a period of five years, this maximum limit of 5.0% of our Company’s total issued share capital allows for a potential increase in the number of employees participating in the Scheme as our Company expands in the future. Administration of the Scheme Our Remuneration Committee will be designated as the committee responsible for the administration of the Scheme. Our Remuneration Committee will determine, among other things, the following: (i) (ii) the persons to be granted Options; the number of Shares which are the subject of the Options to be granted;

(iii) the exercise price of the Options to be granted; and (iv) recommendations for modifications to the Scheme. 230

In compliance with the requirements of the Listing Manual, a Participant of the Scheme who is a member of the Remuneration Committee must not be involved in its deliberations in respect of Options to be granted to or held by that member of the Remuneration Committee. Size of the Scheme The aggregate number of Shares which may be issued pursuant to Options granted under the Scheme, when added to the number of Shares issued and/or issuable in respect of (i) all Options granted under the Scheme, and (ii) all awards granted under any share option, share incentive, performance share or restricted share plan implemented by our Company and for the time being in force, must not exceed 5.0% of the total issued share capital of our Company (excluding treasury shares) on the day immediately preceding the date of the relevant grant, provided that for each year from the date which the Scheme is implemented, the number of Shares to be issued pursuant to Options granted under the Scheme must not exceed 1.0% of the total issued share capital of our Company (excluding treasury shares) on the day immediately preceding the date of the relevant grant. Notwithstanding the expiry or termination of the Scheme, any Options granted to Participants prior to such expiry or termination will continue to remain valid. This 5.0% size is intended to accommodate the potential pool of participants arising from our base of eligible participants. We also hope that, with the portion of our issued share capital set aside for the Scheme, our employees and Directors will recognize that we are making an effort to reward them for their contributions to our Company by allowing them greater opportunities to participate in our equity. We are of the view that the size of the Scheme is reasonable, taking into account the share capital base of our Company, the contributions by our employees and Directors and the potential number of employees as our business expands. Implementing our Scheme with the maximum amount of shares not exceeding 5.0% of the total issued share capital of our Company will enable us to maintain flexibility and remain competitive in the industry. The Scheme will continue in force at the discretion of the Remuneration Committee subject to a maximum period of five years commencing on the date it is adopted by our Company at general meeting, except that it may continue beyond the above stipulated period with the approval of Shareholders by ordinary resolution at general meeting and of any relevant authorities which may then be required. Maximum Entitlements of the Scheme Subject to the size of our Scheme as described above and any requirements of the SGX-ST, the aggregate number of Shares in respect of which Options may be offered will be determined at the discretion of our Remuneration Committee, which will take into consideration criteria such as rank, past performance and potential for future development of the Participant. Summary of the Rules of the Scheme Capitalized terms used in this section bear the same meanings as defined in Appendix G of this offering document. The following is a summary of the rules of our Scheme.

231

Eligibility Under the rules of the Scheme, Executive Directors, Non-Executive Directors (including Independent Directors) and Employees of our Company and our subsidiaries and directors and employees of our associated companies over which our Company has control (if any) are eligible to participate in our Scheme at the absolute discretion of the Remuneration Committee, and such person must: (a) in the case of Executive Directors, Non-Executive Directors (including Independent Directors) and Employees of our Group, have attained the age of 21 years and hold such rank as may be designated by the Remuneration Committee from time to time; and in the case of directors and employees of our associated companies, if any, have attained the age of 21 years and hold such rank as may be designated by the Remuneration Committee from time to time and who, in the opinion of the Remuneration Committee, contributed or will contribute to the success and development of our Group.

(b)

The Participant must not be an undischarged bankrupt and must not have entered into a composition with his creditors. Grant of Options The Remuneration Committee may grant Options at any time during the period when our Scheme is in force. However, in the event that an announcement on any matter of an exceptional nature involving unpublished price sensitive information is imminent, the Remuneration Committee may only grant Options on or after the second Market Day from the date on which the announcement is released. Acceptance of Options Options are personal to the Participant to whom they are granted and must not be transferred, charged, pledged or otherwise disposed of or encumbered in whole or in part or in any way whatsoever save as provided for in the rules of our Scheme. All offers made to Participants, if not accepted by the closing date (which will not exceed 30 days from the date of the offer), will lapse and will be null and void and of no effect. Upon acceptance of the offer, the Participant must pay to us a consideration of S$1.00. Exercise of Options Each Option granted with the exercise price set at Market Price is only exercisable, in whole or in part ( provided that an Option may be exercised in part only in respect of 1,000 Shares or any multiples thereof), at any time by a Participant during the period commencing after the first anniversary of the Offering Date and expiring on the tenth anniversary of such Offering Date or such earlier date as may be determined by the Remuneration Committee. Each Option granted with the exercise price set at a discount to Market Price is only exercisable, in whole or in part ( provided that an Option may be exercised in part only in respect of 1,000 Shares or any multiples thereof), at any time by a Participant during the period commencing after the second anniversary of the Offering Date and expiring on the tenth anniversary of such Offering Date or such earlier date as may be determined by the Remuneration Committee.

232

Exercise Price Under our Scheme, the exercise price of the Options granted will be determined by our Remuneration Committee, in its absolute discretion. Our Remuneration Committee may grant Options to the Participants at up to a 20.0% discount to the Market Price of the Scheme Shares (determined by reference to the daily official list or other publication published by the SGX-ST for the five consecutive trading days immediately preceding the date of the offer of that Option, rounded up to the nearest whole cent in the event of fractional prices) and, if the exercise price so determined is less than the par value of the Share, the par value will be taken to be the exercise price. In determining which Participant should be granted Options and the quantum of the discount, the Remuneration Committee is at liberty to take into consideration such criteria as they deem fit, including factors such as (i) our performance, (ii) the performance of the individual Participant, (iii) the contribution of the Participant to our success and development, and (iv) the prevailing market conditions. The Remuneration Committee will determine on a case-by-case basis whether a discount will be given, and the quantum of the discount, taking into consideration the objective that we desire to achieve and the prevailing market conditions. As the actual discount given will depend on the relevant circumstances, the extent of the discount may vary from one case to another, subject to a maximum discount of 20.0% of the Market Price of the Shares. Grant of Discounted Options Options granted with the Exercise Price set at a discount to Market Price (“ Discounted Options ”) will only be granted to deserving employees whose performance has been consistently good and/or whose future contributions to our Group will be valuable. The ability to offer Discounted Options will operate as a means to recognize the performance of participants as well as to motivate them to continue to excel while encouraging them to focus on improving the profitability and return of our Group to a level that benefits our Shareholders when these are eventually reflected through an appreciation of our Share price. Discounted Options would be perceived in a more positive light by the Participants, encouraging them to work hard and produce results in order to be offered Discounted Options, as only employees who have made significant contributions to the success and development of our Group would be granted Discounted Options. The flexibility to grant Discounted Options is also intended to cater to situations where the stock market performance has overrun the general market conditions. Lapse of Options (i) Unless the Executive Director, Non-Executive Director or Independent Director is terminated due to a change in control of the Board of Directors, an Option will, to the extent that it is unexercised, lapse immediately and become null and void and a Participant will have no claim against us: (a) upon the bankruptcy of the Participant or the happening of any other event which results in his being deprived of the legal or beneficial ownership of such Option; or in the event of misconduct on the part of the Participant, as determined by the Remuneration Committee in its absolute discretion; or subject to paragraph (b), upon the Participant ceasing to be in our employment, for any reason whatsoever; or

(b)

(c)

233

(d)

in the event that the Remuneration Committee, at its sole and absolute discretion, deems it appropriate that such Option lapses on the grounds that any of the objectives of the Scheme have not been met; or in the event that our Company is liquidated or wound-up prior to the acceptance of the Option.

(e)

(ii)

Where a Participant who is an Executive Director, Non-Executive Director or Independent Director is terminated due to a change in control of the Board, he will be entitled to exercise in full all unexercised Options from the last date of employment with us until the end of the relevant Option Period.

Rights of Scheme Shares Scheme Shares allotted and issued upon the exercise of the Option rank pari passu in all respects with the then existing issued Shares in the capital of our Company except for any dividends, rights, allotments or other distributions, the record date of which is prior to the date on which the Scheme Shares are allotted and issued. For this purpose, “ record date ” means the date as at the close of business on which shareholders must be registered in order to participate in any dividend, rights, allotments or other distributions, as the case may be. Duration of our Scheme Our Scheme will continue in operation for a maximum duration of five years commencing from the date on which our Scheme was adopted by our Company at general meeting. However, our Scheme may continue beyond the period stipulated above with the approval of the Shareholders at general meeting by way of ordinary resolution and the relevant authorities. Our Scheme may also be terminated at any time by our Remuneration Committee or by resolution of our Shareholders at a general meeting, subject to all other relevant approvals which may be required and, if our Scheme is so terminated, no further Options will be offered by our Company thereunder. Alteration of Capital In the event of a capitalization issue and other circumstances (e.g., rights issue, capital reduction, subdivision or consolidation of shares or distribution): (i) the Exercise Price in respect of the Scheme Shares comprised in the Option to the extent unexercised; and/or the class and/or number of Scheme Shares comprised in the Option to the extent unexercised and the rights attached thereto; and/or

(ii)

(iii) the class and/or number of Scheme Shares in respect of which additional Options may be granted to Participants, will be adjusted by the Remuneration Committee in such manner as it may determine to be appropriate, provided that written confirmation is given by the auditors that such adjustment is fair and reasonable. Upon any such adjustment being made, the Remuneration Committee will notify the Participant in writing informing him of the exercise price thereafter to be in effect and the number of Scheme Shares thereafter to be issued on the exercise of the Option. Any adjustment will take effect upon such written notification being given. 234

Modifications or Alterations to the Scheme The Scheme may be modified and/or altered from time to time by a resolution of our Remuneration Committee, subject to the prior approval of SGX-ST and such other regulatory authorities as may be necessary. However, no modification or alteration will adversely affect the rights attached to Options granted except with the written consent of Participants who are entitled to not less than three-quarters of the aggregate number of Shares which would be issued upon exercise in full of all outstanding Options (in the event of a change in capital structure such as a share consolidation, the number of Shares will be recalculated and reduced accordingly). No alteration may be made to the particular rules of the Scheme to the advantage of the holders of the Options, except with the prior approval of Shareholders in a general meeting. Rationale for Participation by our Executive Directors and our Employees in the Scheme The extension of the Scheme to our Executive Directors and Employees allows us to have a fair and equitable system to reward our Executive Directors and Employees who have made and who continue to make significant contributions to our long-term growth. We believe that the grant of Options to our Executive Directors and Employees will enable us to attract, retain and provide incentives to our Executive Directors and Employees to produce higher standards of performance as well as encourage greater dedication and loyalty by enabling our Company to give recognition to past contributions and services as well as motivating participants generally to contribute towards our long-term growth. Rationale for Participation by our Non-Executive Directors (including Independent Directors) in the Scheme Although our Non-Executive Directors are not involved in running our day-to-day operations, they play a valuable role in furthering our business interests by contributing their experience and expertise. The participation by Non-Executive Directors in the Scheme will provide our Company with a further avenue to acknowledge and recognize their services and contributions to us, as it may not always be possible to compensate them fully or appropriately by increasing the directors’ fees or other forms of cash payment. For instance, the Non-Executive Directors may bring strategic or other value to our Company which may be difficult to quantify in monetary terms. The grant of Options to Non-Executive Directors will allow our Company to attract and retain experienced and qualified persons from different professional backgrounds to join our Company as Non-Executive Directors, and to motivate existing Non-Executive Directors to take extra efforts to promote our interests. In deciding whether to grant Options to the Non-Executive Directors, the Remuneration Committee will take into consideration, among other things, the contributions made to our growth, development and success of a particular Non-Executive Director. The Remuneration Committee may also, where it considers relevant, take into account other factors, such as economic conditions and our Company’s performance. In order to minimize any potential conflict of interests and to not compromise the independence of the Non-Executive Directors, our Company intends to grant such number of Options under the Scheme to Non-Executive Directors that will not compromise their independence or judgment. In addition, in the event that any conflicts of interest arise in any matter to be decided by the Board, our Company will procure that the relevant Non-Executive Director abstains from voting on such matter at the Board meeting.

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Rationale for Participation by Directors and Employees of our Associated Companies in the Scheme The extension of the Scheme to directors and employees of our associated companies allows us to have a fair and equitable system to reward the directors and employees of our associated companies who have contributed to the success and development of our Group, and made and who continue to make significant contributions to our long-term growth. We believe that the grant of Options to directors and employees of our associated companies will enable us to attract, retain and provide incentives to the directors and employees of our associated companies to produce higher standards of performance as well as encourage greater dedication and loyalty by enabling our Company to give recognition to past contributions and services as well as motivating participants generally to contribute towards our success and development. Rationale for Participation of Controlling Shareholders and their Associates in the Scheme An Executive Director, Non-Executive Director or other employee who is a Controlling Shareholder of our Company or an associate of a Controlling Shareholder will be eligible to participate in the Scheme if (a) his participation in the Scheme and (b) the actual number and terms of the options to be granted to him have been approved by independent Shareholders of our Company in separate resolutions for each such person. The relevant employee is required to abstain from voting on, and (in the case of employees who are Directors) to refrain from making any recommendation on, the resolutions in relation to the Scheme. One of the main objectives of the Scheme is to motivate participants to optimize their performance standards and efficiency and to maintain a high level of contribution. The objectives of the Scheme apply equally to our directors and employees who are Controlling Shareholders or their respective associates. Our view is that all deserving and eligible participants should be motivated, regardless of whether they are Controlling Shareholders or their respective Associates. It is in our interest to incentivize outstanding directors and employees who have contributed to our growth to continue to remain with us. Although our Controlling Shareholders and their respective Associates have or may already have shareholding interest in our Company, we believe that the extension of the Scheme to allow Controlling Shareholders and their respective Associates the opportunity to participate in the Scheme will enable them to be equally entitled, with our other director and employees, to participate in and benefit from this system of remuneration. The Scheme is intended to be part of our Company’s system of employee remuneration and our Company is of the view that directors and employees who are Controlling Shareholders or their respective Associates should not be unduly discriminated against by virtue only of their shareholding in our Company. Disclosures in Annual Reports Details of the number of Options granted pursuant to the Scheme, the number of Options exercised and the exercise price (as well as any applicable discounts) will be disclosed in our annual reports. Cost of Options Granted under the Scheme to our Company Any Option granted under the Scheme will have a fair value. Where such Options are granted at a consideration which is less than their fair value, there will be a cost to our Company, the amount of which will depend on whether the Options are granted at the Market Price or at a discount.

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The cost to our Company of granting Options under the Scheme will be as follows: (i) The exercise of an Option at a discounted exercise price would translate into a reduction of the proceeds from the exercise of such Option, as compared to the proceeds that our Company would have received from such exercise had the exercise been made at the prevailing market price of the Shares. Such reduction of the exercise proceeds would represent monetary cost to our Company; As the monetary cost of granting Options with a discounted exercise price is borne by our Company, our earnings would effectively be reduced by an amount corresponding to the reduced interest earnings that we would have received from the difference in proceeds from exercise price with no discount versus the discounted exercise price. Such reduction would, accordingly, result in the dilution of our earnings per Share;

(ii)

(iii) The effect of the issue of new Shares upon the exercise of Options is that our Company’s net tangible value (“ NTA ”) per Share will increase if the exercise price is above the NTA value per Share and decrease if the exercise price is below the NTA value per Share; and (iv) The grant of Options under the Scheme will have an impact on our Company’s reported profit because under IFRS 2 share-based payment requires the recognition of an expense in respect of Options granted under the Scheme. The expense will be based on the fair value of the Options at the date of grant (as determined by an option-pricing model) and will be recognized over the vesting period. The requirement to recognize an expense in respect of options granted to employees is set out in IFRS 2. It should be noted that the financial effects discussed in (i), (ii) and (iii) above would materialize only upon the exercise of the relevant Options. The cost of granting Options discussed in (iv) above would be recognized in the financial statements even if the Options discussed in (iv) above are not exercised. We believe these costs are justified by the effect the Scheme would have in attracting, recruiting, retaining and motivating directors and employees, which could, in the long term, yield greater returns for us and our shareholders. Under the Scheme, each participant to whom an Option is offered pays a nominal consideration of S$1.00 to our Company on his acceptance of the offer of the Option. Insofar as such Options are granted at a consideration that is less than their fair value at the time of grant, there will be a cost to our Company (in that we will receive from the participant upon the grant of the Option to him, a consideration that is less than the fair value of the Option). The cost to our Company in granting an Option would vary depending on the number of Options granted pursuant to the Scheme, whether these Options are granted at the Market Price or at a discount and the validity period of the Options. Generally, a greater discount and a longer validity period for an Option will result in a higher potential cost to our Company. If such costs were to be recognized in accordance with IFRS 2, it would have to be charged to our Company’s profit and loss account over the vesting period. The issuance of new Shares under the Scheme will have a dilutive impact on our combined earnings per Share. However, the impact is not expected to be material in any given financial year as the Options are likely to be exercised over several years in accordance with the pre-determined vesting schedules.

237

SHARE CAPITAL AND SHAREHOLDERS
(a) Share Capital of our Company Our Company was incorporated as an exempted company limited by shares in the Cayman Islands on May 24, 2013 under the name of “Sewko Holdings Limited”. As at the date of incorporation, our Company has issued ONE nil paid share of a par value of US$0.000025. As at the Latest Practicable Date and the date of this offering document, our issued and paid-up ordinary share capital was US$10,500 comprising 420,000,000 Shares. Pursuant to written resolutions dated September 23, 2013, our shareholders approved, among other things, the following: (a) the adoption of a new set of Articles of Association (“ Articles “) with effect from the date of listing the shares on the SGX-ST; that authority be given to the Directors to: (i) (ii) issue Shares whether by way of rights, bonus or otherwise; and/or make or grant offers, agreements or options (collectively, “ Instruments ”) that might or would require Shares to be issued, including but not limited to the creation and issue of (as well as adjustments to) warrants, debentures or other instruments convertible into Shares, at any time and upon such terms and conditions and for such purposes and to such person(s) as the Directors may in their absolute discretion deem fit; and (notwithstanding the authority conferred by such authority may have ceased to be in force) issue Shares in pursuance of any Instrument made or granted by the Directors while such authority was in force,

(b)

provided that : (1) the aggregate number of Shares to be issued pursuant to such authority (including new Shares to be issued in pursuance of Instruments made or granted pursuant to such authority) must not exceed 50.0% of the issued share capital of our Company excluding treasury shares (as calculated in accordance with sub-paragraph (B) below), of which the aggregate number of Shares to be issued other than on a pro rata basis to the then existing shareholders (including new Shares to be issued in pursuance of Instruments made or granted pursuant to such authority) must not exceed 20.0% of the issued share capital of our Company excluding treasury shares (as calculated in accordance with sub-paragraph (B) below); (subject to such manner of calculation as may be prescribed by the SGX-ST) for the purpose of determining the aggregate number of shares that may be issued under paragraph (1) above, the percentage of issued Shares in the capital of our Company will be based on the total number of issued Shares in the capital of our Company excluding treasury shares immediately following the close of the Offering, after adjusting for: (A) new Shares arising from the conversion or exercise of any convertible securities or share options or vesting of share awards which are outstanding or subsisting at the time such authority is passed; new Shares arising from exercising share options or vesting of share awards outstanding or subsisting at the time of the passing of the Resolutions; and

(2)

(B)

238

(C) any subsequent bonus issue, consolidation or subdivision of shares in the capital of our Company; (3) in exercising the authority conferred by such authority, our Company must comply with the provisions of the Listing Manual for the time being in force (unless such compliance has been waived by the SGX-ST) and the Articles of Association; and (unless revoked or varied by our Company at a general meeting) the authority conferred by such authority will continue in force until the conclusion of the next annual general meeting of our Company or the date by which the next annual general meeting of our Company is required by law to be held, whichever is the earlier;

(4)

(c)

that authority be given to the Directors to issue Shares and offer the same to such persons, on such terms and conditions and with such rights or restrictions as they may think fit to impose, in connection with the Offering and the admission of our Company to the Official List of the SGX-ST; and the adoption of the Scheme and that authority be given to our Directors to allot and issue new Shares as may be required to be issued pursuant to the Options granted under the Scheme, provided that the aggregate number of Shares which may be issued pursuant to Options granted under the Scheme, when added to the number of Shares issued and/or issuable in respect of all Options granted under the Scheme, must not exceed 5.0% of the total issued share capital of our Company on the day immediately preceding the date of the relevant grant. Substantial Shareholding Disclosure Under the SFA, a person has a substantial shareholding in a company if he has an interest or interests in one or more voting shares (excluding treasury shares) in that company and the total votes attached to that share, or those shares, is not less than 5.0% of the total votes (excluding treasury shares) attached to all the voting shares in that company, and a substantial shareholder is a person who holds a substantial shareholding. The SFA requires a person who is or (if he has ceased to be one) has been a substantial shareholder in our Company, being a non Singapore-incorporated corporation with a primary listing on the Main Board of the SGX-ST, to give notice in writing to our Company of particulars of the voting Shares in our Company in which he has or had an interest or interests and the nature and extent of that interest or those interests, in such form and containing such information as the Authority may prescribe, within two business days after such person:

(d)

(c)

(a)

becomes aware that he is or (if he has ceased to be one) had been a substantial shareholder in our Company; or becomes aware of a change in the percentage level 1 of the interest or interests of the substantial shareholder in our Company in voting Shares in our Company.

(b)

Where a person (the “ beneficial owner ”) authorizes another person (the “ legal owner ”) to hold, acquire or dispose of, on his behalf, voting Shares or an interest or interests in voting Shares in our Company, the beneficial owner must take reasonable steps to ensure that the legal owner
1 “Percentage level”, in relation to a substantial shareholder in the Company, means the percentage figure ascertained by expressing the total votes attached to all the voting shares in which the substantial shareholder has an interest or interests immediately before or (as the case may be) immediately after the relevant time as a percentage of the total votes attached to all the voting shares (excluding treasury shares) in the Company, and, if it is not a whole number, rounding that figure down to the next whole number.

239

notifies him as soon as practicable and, in any case, no later than two business days after any acquisition or disposal of any of those voting Shares or interest or interests in voting Shares effected by the legal owner on his behalf which will or may give rise to any duty on the part of the beneficial owner to give notice under the SFA. In addition, where a person holds voting Shares in our Company, being voting Shares in which another person has an interest, he must give to the second-mentioned person a notice of any acquisition or disposal of any of those Shares effected by him, in the form as the Authority may prescribe, as soon as practicable and, in any case, no later than two business days after acquiring or disposing of the Shares. Ownership Structure The table below sets out the shareholdings of each substantial shareholder, being a shareholder who is known by us to beneficially own 5.0% or more of our issued Shares, as at the date of this offering document and immediately after completion of the Offering. All Shares owned by our substantial shareholders, our Directors and the new Shares to be issued pursuant to the grant of Awards under our Scheme will carry the same voting rights as the Offering Shares. Percentage ownership is based on 420,000,000 and [ ● ] Shares respectively, outstanding as at the date of this offering document and immediately after completion of the Offering. Save as disclosed below, there are no other relationships among our substantial shareholders.
Shares Owned Immediately After Completion of the Offering Shares Owned as at the date of this Offering Document Direct Interest Deemed Interest (Assuming the Over-Allotment Option (Assuming the Over-Allotment Option is Not Exercised) is Exercised in Full) Direct Interest Deemed Interest Direct Interest Deemed Interest

Name Substantial Shareholders: ReHo Limited(1)

%

%

%

%

%

%

. . . . . . . . 227,200,000 54.10
(1)

[●] –

[●] –

– [●]

– [●]

[●]

[●]

– [●]

– [●]

Retail Holdings N.V.

. . . . .

– 227,200,000 54.10

UCL Asia Holdings VII Limited(2) . . . . . . . . . . . 172,800,000 41.14 UCL Asia Partners, L.P.(2)(1) . . – – –

[●] – – –

[●] – – –

– – – –

– – – –

[●] – – –

[●] – – –

– [●] [●] [●]

– [●] [●] [●]

– 172,800,000 41.14 – 172,800,000 41.14 – 172,800,000 41.14

UCL Asia GP, L.P.(2) . . . . . . UCL Asia Investments, Ltd
(2)

. .

New investors in the Offering . . . . . . . . . . . Directors: Stephen Goodman(3) . . . . . . Gavin Walker Tobias Brown
(2)

[●]

[●]

[●]

[●]

– 20,000,000 – – – – – – –

– 227,200,000 54.10 4.76 – –

– [●] – – – – – – – [●]

– [●] – – – – – – – 100.0

[●] – [●] [●] – – – – –

[●] – [●] [●] – – – – –

– [●] – – – – – – – [●]

– [●] – – – – – – – 100.0

[●] – [●] [●] – – – – –

[●] – [●] [●] – – – – –

. . . . . . . . . . . . . . . . .

– 172,800,000 41.14 – 172,800,000 41.14 – – – – – – – – – – – – – – –

Jamie O’Donnell(2) . . . . . . . Jeremy Hobbins . . . . . . . . Hui Choon Kit . . . . . . . . . Laurent Levan . . . . . . . . . Malcolm Matthews . . . . . . . Public . . . . . . . . . . . . . Total Shares

. . . . . . . . . 420,000,000 100.0

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Notes: (1) As at the date of this offering document, ReHo Limited has a direct interest in 54.10% of the total issued Shares of our Company and is wholly-owned by Retail Holdings. For the purposes of Section 4 of the SFA, Retail Holdings is interested in ReHo Limited. Retail Holdings, formerly known as Singer N.V., was formed as a new corporate entity in the Netherlands Antilles (now, Curaçao) in December 1999, to acquire ownership of several operating companies that were part of the old Singer group. It is a publicly traded company in the United States on the Pink Sheets quotation service. As at the date of this offering document, UCL Asia Holdings VII Limited has a direct interest in 41.14% of the total issued Shares of our Company and is wholly-owned by UCL Asia Partners, L.P. Two of our Directors, Jamie O’Donnell and Tobias Brown, are the equal shareholders of UCL Asia Investments, Ltd, which owns 99% of UCL Asia GP, L.P. with the remaining 1% owned (in equal proportions) by Tobias Brown and Jamie O’Donnell, which is the General Partner of and manages UCL Asia Partners, L.P. For the purposes of Section 4 of the SFA, UCL Asia Partners, L.P. and its general partner (UCL Asia GP, L.P.) are deemed to have an interest in the Shares held by UCL Asia Holdings VII Limited and as equal shareholders of UCL Asia GP, and our Directors, Jamie O’Donnell and Tobias Brown have the authority to make investment decisions on behalf of UCL Asia Partners, L.P. and are thus deemed to have an interest in the Shares held by UCL Asia Holdings VII Limited. As at the date of this offering document, ReHo Limited has a direct interest in 54.10% of the total issued Shares of our Company and is wholly-owned by Retail Holdings. Our Director, Stephen Goodman has a direct shareholding of 16.9% in Retail Holdings and is also deemed interested in an additional shareholding of 8.4% which is held by three trusts (the Meeting House Trust (5.6%), Princess Trust E (1.4%) and Princess Trust M (1.4%)) for which Mr. Goodman’s spouse is the trustee and for which the beneficiaries are Mr. Goodman’s child and grandchildren. Mr. Goodman thus has an interest (direct and deemed) in 25.3% of the shares of Retail Holdings. For the purposes of Section 4 of the SFA, our Director, Stephen Goodman is deemed to have an interest in the Shares held by ReHo Limited.

(2)

(3)

Significant Changes in the issued share capital of our Company Details of the changes in our share capital from the date of our incorporation and up to September 24, 2013 are set out in the table below. Resultant Issued Share Capital (US$) -0-

Share Capital One Share of a par value of US$0.000025 issued nil paid on incorporation on May 24, 2013 . . . . . . 1,016,665 Shares of a par value of US$0.000025 each additionally issued nil paid on July 10, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 405,649,734 Shares of a par value of US$0.000025 each additionally issued nil paid on August 23, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . Consolidation of every 400 Shares of a par value of US$0.000025 each into One Share of a par value of US$0.01 each on August 23, 2013 . . . . . 1,016,666 nil paid Shares of a par value of US$0.01 each credited as fully paid on September 16, 2013 (see Note 1 below) . . . . . . . . 4,430 Shares of a par value of US$0.01 each additionally issued fully paid on September 18, 2013 (see details in “Options exercised by Gavin Walker” below) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,904 Shares of a par value of US$0.01 each additionally issued fully paid on September 18, 2013 (see details in “Options exercised by Gavin Walker” below) . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Resultant Number of Shares 1

1,016,666

-0-

406,666,400

-0-

1,016,666

-0-

1,016,666

10,166.66

1,021,096

10,210.96

1,050,000

10,500.00

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Share Capital Subdivision of One Share of a par value of US$0.01 each into 400 Shares of a par value of US$0.000025 each on September 18, 2013 . . . . .

Resultant Number of Shares

Resultant Issued Share Capital (US$)

420,000,000

10,500.00

Note 1: the nil paid shares were credited as fully paid on September 16, 2013 as the consideration of the Company’s acquisition of certain shares in Singer Asia

More than 10% of capital has been paid for with assets other than cash. Options exercised by Gavin Walker On August 15, 2005, our President, Chief Executive Officer and Executive Director, Gavin Walker, entered into a stock option agreement with Singer Asia, wherein Singer Asia agreed to grant Mr. Walker an option in respect of 50,000 shares in the capital of Singer Asia. The option terminates upon the earlier of August 15, 2015 or prior to the execution of definitive agreements relating to the completion of an initial public offering of Singer Asia on the SGX-ST. Mr. Walker exercised all of his options on September 18, 2013 at an option price of US$64.50 per share and 33,334 common shares in Singer Asia were issued to him pursuant to such exercise. On September 18, 2013, our Company acquired the 33,334 common shares in Singer Asia held by Gavin Walker in consideration for allotting and issuing 33,334 shares in the capital of the Company, credited as fully paid, to him on the same date. Save as discussed above and in “ Business – History ”, there were no significant changes in the percentage ownership of our Company held by our Directors and substantial shareholders since the date of incorporation and up to the Latest Practicable Date. There has not been any public take-over by a third party in respect of our Shares or by our Company in respect of the shares of another corporation which has occurred between the beginning of the most recent completed financial year and the Latest Practicable Date. Change of Control of our Company We are not aware of any arrangements that may, at a subsequent date, result in a change of control of our Company. Control of our Company As at the date of this offering document, we are controlled (as such term is defined in the Listing Manual) by ReHo Limited and UCL Asia Holdings VII Limited, which own 54.10% and 41.14%, respectively, of the total number of issued Shares of our Company. The ordinary shares of ReHo Limited are owned by Retail Holdings (100.0%). The shareholders of Retail Holdings in turn include two of our Directors, Stephen Goodman (16.9%) and Malcolm Matthews (0.49%). Three trusts for which Mr. Goodman’s spouse is the trustee (and for which the beneficiaries are Mr. Goodman’s child and grandchildren) own an additional 8.4% and other shareholders own the balance of the shares of Retail Holdings (1). The ordinary shares of UCL Asia Holdings VII Limited are held by UCL Asia Partners, L.P. (100.0%), and two of our Directors, Jamie O’Donnell and Tobias Brown, are equal shareholders of UCL Asia Investments, Ltd, which owns 99% of UCL Asia GP, L.P., the General Partner of UCL Asia Partners, L.P. with the remaining 1% owned (in equal proportions) by Tobias Brown and Jamie O’Donnell. 242

Save as disclosed in this offering document, to the best of the knowledge of our Directors, our Company is not directly or indirectly owned or controlled, whether severally or jointly, by any other person or government and there is no known arrangement, the operations of which may, at a subsequent date, result in a change in the control of our Company.
Note: (1) Shares of our Controlling Shareholder, Retail Holdings, are quoted on the Pink Sheets quotation service under the symbol “RHDGF”. Retail Holdings is not a U.S. registered company and its shareholders do not have a filing obligation even if any of its shareholders own more than 5.0% of the shares of Retail Holdings. We do not have sufficient data to accurately estimate the number of outstanding Shares held by residents of the U.S.

VENDORS The name of the Vendors and the number of Shares which they will offer pursuant to the Offering are set out as below:
Shares Offered by the Vendors pursuant to the Offering expressed as a % of Name ReHo Limited . . . . . . . . . . . . . . . . UCL Asia Holdings VII Limited . . . . No. of Shares Offered [●] [●] Share Capital before the Offering [●] [●] Share Capital after the Offering [●] [●]

Save as disclosed in “Management – Arrangements or Understandings ”, neither of the Vendors hold any position or office in, nor does it have any other material continuing relationship with, our Group, apart from its shareholdings in our Company.

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INTERESTED PERSON TRANSACTIONS AND CONFLICTS OF INTERESTS
For purposes of this section, the following definitions will apply: 1. “ our Group ” means: (a) (b) our Company; a subsidiary of our Company that is not listed on the SGX-ST or any approved exchange; or an associated company of our Company that is not listed on the SGX-ST or any approved exchange and of which our Group and our interested person(s) have control.

(c)

2.

“ approved exchange ” means a stock exchange that has rules which safeguard the interests of shareholders against interested person transactions according to similar principles in Chapter 9 of the Listing Manual. “ interested person ” means: (a) (b) a director, chief executive officer or Controlling Shareholder of our Company; or an associate of any such director, chief executive officer or controlling shareholder.

3.

Certain terms such as “ associate ”, “ control ”, “ controlling shareholder ” and “ interested person ” used in this section have the meanings as provided in the Listing Manual and in the Securities and Futures (Offers of Investments) (Shares and Debentures) Regulations 2005 of Singapore, unless the context specifically requires the application of the definitions in one or the other, as the case may be. In general, transactions between our Group and any of our interested persons would constitute interested person transactions for the purposes of Chapter 9 of the Listing Manual. Details of the present and ongoing transactions as well as past transactions between our Group and our interested persons which are material in the context of the Offering are set out below. We have entered into certain other transactions with our interested persons which are material in the context of the Offering, as further disclosed in this section and the sections entitled “ Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – Borrowings ” and “ History ” of this offering document. Save as disclosed in these sections, there are no interested person transactions that are material in the context of the Offering for the last three fiscal years ended December 31, 2010, 2011 and 2012 and for the period from January 1, 2013 until the Latest Practicable Date. Save as otherwise provided in this section, investors, upon subscription and/or purchase of the Offering Shares, are deemed to have specifically approved these transactions with our interested persons and as such these transactions are not subject to Rules 905 and 906 of the Listing Manual to the extent that there are no subsequent changes to the terms of the agreements in relation to each of these transactions. In line with the rules set out in Chapter 9 of the Listing Manual, a transaction of less than S$100,000 in value is not considered material in the context of the Offering and is not taken into account for the purposes of aggregation in this section.

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Past Interested Person Transactions Details of the past transactions between our Group and interested persons which are material in the context of the Offering, for the past three fiscal years ended December 31, 2010, 2011 and 2012 and for the period from January 1, 2013 until the Latest Practicable Date, are as follows: Shared Audit Services Starting in 2003, our wholly-owned subsidiary, Singer Asia and our controlling shareholder, Retail Holdings, jointly engaged KPMG Phoomchai Audit Limited (“ KPMG Thailand ”) to audit their financial statements (the “ Audit Agreement ”). Retail Holdings holds more than 50.0% of Singer Asia and consolidates Singer Asia in its financial statements. It is therefore cost effective and also efficient to appoint the same auditor for both Retail Holdings and Singer Asia. There are no fees paid by the parties to each other for the shared audit arrangement. Pursuant to the Audit Agreement, Singer Asia and Retail Holdings agreed to share the audit fees and expenses charged by KPMG Thailand in the proportion of 80.0% and 20.0% respectively. This percentage was based on what KPMG Thailand would have charged Singer Asia and Retail Holdings had they engaged KPMG Thailand separately. The Audit Agreement was entered into on normal commercial terms and on an arm’s length basis. There are no fees paid by the parties to each other for the shared audit arrangement. As at December 31, 2010, 2011 and 2012 and the Latest Practicable Date, the aggregate amounts paid by Singer Asia alone under the Audit Agreement were US$173,985, US$167,759, US$172,430 and US$ nil, respectively. The Audit Agreement was terminated with effect from the June 30, 2013 financial results, and each party will enter into its own separate audit agreement with KPMG. Present and Ongoing Interested Person Transactions Details of the present and ongoing transactions between our Group and interested persons which are material in the context of the Offering, for the past three fiscal years ended December 31, 2010, 2011 and 2012 and for the period from January 1, 2013 until the Latest Practicable Date, are as follows: Shared Insurance Services Our wholly-owned subsidiary, Singer Asia, and our controlling shareholder, Retail Holdings, entered jointly into several insurance arrangements (the “ Insurance Agreements ”), such as directors and officers liability insurance, kidnap and ransom insurance, foreign product liability insurance, and travel and accident insurance. Singer Asia and Retail Holdings agreed to share the premiums under those Insurance Agreements after negotiations on the basis of the cost of insurance for each individual entity. The Insurance Agreements were entered into on normal commercial terms and on an arm’s length basis. As at December 31, 2010, 2011 and 2012 and the Latest Practicable Date, the aggregate amounts paid by Singer Asia alone under the Insurance Agreements were US$39,034, US$55,697, US$57,653 and US$26,874, respectively. The Insurance Agreements will expire on various dates starting from July 30, 2013 through to January 31, 2014. Each party is expected to enter into its own separate agreement after the expiry of the insurance agreement. Review Procedures for Future Interested Person Transactions All future interested person transactions will be reviewed and approved in accordance with the threshold limits set out under Chapter 9 of the Listing Manual, to ensure that they are carried out on normal commercial terms and are not prejudicial to our interests and the interests of our minority shareholders. In the event that such interested person transactions require the approval 245

of our Board and the Audit Committee, relevant information will be submitted to the Board or the Audit Committee for review. In the event that such interested person transactions require the approval of shareholders, additional information may be required to be presented to shareholders and an independent financial advisor may be appointed for an opinion. In the review of all future interested person transactions the following procedures will be applied: (i) transactions (either individually or as part of a series or if aggregated with other transactions involving the same related party during the same fiscal year) equal to or exceeding S$100,000 in value but below 3.0% of the value of our Company’s net tangible assets will be subject to review by the Audit Committee at regular intervals; transactions (either individually or as part of a series or if aggregated with other transactions involving the same related party during the same fiscal year) equal to or exceeding 3.0% but below 5.0% of the value of our Company’s net tangible assets will be subject to the review and prior approval of the Audit Committee. Such approval will only be given if the transactions are on arm’s length commercial terms and are consistent with similar types of transactions made with non-interested parties; and

(ii)

(iii) transactions (either individually or as part of a series or if aggregated with other transactions involving the same related party during the same fiscal year) equal to or exceeding 5.0% of the value of our Company’s net tangible assets will be reviewed and approved by the Audit Committee prior to such transactions being entered into, and the Audit Committee may, as it deems fit, request advice on the transaction from independent sources or advisors, including the obtaining of valuations from independent professional valuers. Additionally, a register will be maintained to record all interested person transactions (incorporating the basis, amount and nature, on which they are entered into). The Audit Committee will review all interested person transactions to ensure that the prevailing rules and regulations of the SGX-ST (in particular, Chapter 9 of the Listing Manual) are complied with. We will also endeavor to comply with the recommendations set out in the Code of Corporate Governance. The annual internal audit plan will incorporate a review of all interested person transactions entered into. The Audit Committee will review internal audit reports to ascertain that the guidelines and procedures established to monitor interested person transactions have been complied with. In addition, the Audit Committee will also review from time to time such guidelines and procedures to determine if they are adequate and/or commercially practicable in ensuring that transactions between us and our interested persons are conducted on arm’s-length commercial terms. Transactions falling within the above categories, if any, will be reviewed quarterly by the Audit Committee to ensure that they are carried out on normal commercial terms and in accordance with the procedures outlined above. All relevant non-quantitative factors will also be taken into account. Such review includes the examination of the transaction and its supporting documents or such other data deemed necessary by our Audit Committee. The Audit Committee will also ensure that all disclosure, approval and other requirements on interested person transactions, including those required by prevailing legislation, the Listing Manual and relevant accounting standards, are complied with. In the event that a member of the Audit Committee is interested in any interested person transaction, he will abstain from reviewing that particular transaction. We will also disclose the aggregate value of interested person transactions conducted during the current fiscal year in our annual report.

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Potential Conflicts of Interests Our Controlling Shareholders, ReHo Limited and UCL Asia Holdings VII Limited, currently do not have investments in other entities which are in similar industries in which we operate. As such, we do not see any potential conflicts of interests which may arise from the interests of the Controlling Shareholders. Stephen Goodman, our Chairman and Executive Director, is a nominee director appointed by Retail Holdings, which owns 100.0% of the shares in ReHo Limited, which has a 54.10% direct shareholding in our Company, and is a Controlling Shareholder. Tobias Brown and Jamie O’Donnell, our Non-Independent Non-Executive Directors, are nominee directors appointed by UCL Asia Partners, L.P., which owns 100.0% of the shares in UCL Asia Holdings VII Limited, which has a 41.14% direct shareholding in our Company and is a Controlling Shareholder. Certain of Our Directors Malcolm Matthews, our Independent Non-Executive Director, used to be an Independent Non-Executive Director of Retail Holdings, which is a Controlling Shareholder of our Company. Mitigation We believe that any potential conflicts of interests are addressed as follows: • With respect to Retail Holdings, Malcolm Matthews has resigned from his directorship since July 2013. In addition, while he was an independent non-executive director, he was not accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of Retail Holdings. Neither Retail Holdings nor UCL Asia Partners, L.P. has majority control of the board seats in our Company. As at the date of this offering document, neither Retail Holdings nor UCL Asia Partners, L.P. intends to gain majority control over the board seats in the Company. In the event that either Retail Holdings or UCL Asia Partners, L.P. is to acquire majority control of the board of the Company, our Independent Directors will review whether our current measures and safeguards for addressing conflicts of interests are sufficient, and if these are not sufficient, the Company will put in place additional measures and safeguards to mitigate the conflicts of interests. The respective board of directors of Retail Holdings and UCL Asia Partners, L.P. and their respective associates operate separately and distinctly from our Board of Directors. Our management team is independent and unrelated to Retail Holdings and UCL Asia Partners, L.P. Except for Stephen Goodman (being a nominee appointed by Retail Holdings), Retail Holdings and UCL Asia Partners, L.P. will not be participating in our day-to-day management and will only hold non-executive functions on our Company’s board. Tobias Brown and Jamie O’Donnell, being nominees appointed by UCL Asia Partners, L.P., confirm that they will notify the Board of Directors of any acquisition by UCL Asia Partners, L.P. of any business or any investment in a company that is similar to our Group as soon as practicable following having knowledge of the signing of definitive agreements in relation to such acquisition and/or investment. Upon such notification, such nominees appointed by UCL Asia Partners, L.P. will not participate in any proceedings of our Board of Directors, and

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shall in any event abstain from voting in respect of any such contract, arrangement, proposal, transaction or matter in which the conflict of interest arises, unless and until our Audit Committee has determined that no such conflict of interest exists. Our Directors have a duty to disclose their interests in respect of any contract, arrangement or any other proposal whatsoever in which they have any personal material interest, directly or indirectly, or any actual or potential conflicts of interest (including conflicts of interest that arise from their directorship(s) or executive position(s) or personal investments in any other corporation(s)) that may involve them. Upon such disclosure, such Directors will not participate in any proceedings of our Board of Directors, and shall in any event abstain from voting in respect of any such contract, arrangement, proposal, transaction or matter in which the conflict of interest arises, unless and until our Audit Committee has determined that no such conflict of interest exists. Non-Competition In order to manage any potential competition and conflicts of interest that may otherwise arise among Retail Holdings, Mr. Stephen Goodman and our Group, the parties have entered into a deed of undertaking dated [ ● ] (the “ Deed ”). Under the Deed, Retail Holdings and Mr. Stephen Goodman have undertaken, and have undertaken to procure their associates (as defined in the Listing Manual), • • • not to carry on the same or any similar business as our Group; not to deal in similar products; and not to deal in similar services,

in countries in which the Group is presently operating (namely Sri Lanka, Bangladesh, Pakistan, India and Thailand) or has plans to enter (namely Myanmar, Cambodia and Laos). The Deed shall be terminated if any of the following events occur: • Retail Holdings ceases to be a controlling shareholder (as defined in the SGX Listing Manual) of our Company; or our Company ceases to be listed on the Main Board of the SGX-ST.

Mr. Stephen Goodman has also undertaken in his service agreement, among other things, for 36 months after the termination of his service agreement (or such earlier date as our Company shall decide): • not to be employed in any business within the countries in which our Company is presently operating, or has plans to enter, in competition with the businesses carried on by our Group at the date of his service agreement; not to carry on for his own account either alone or in partnership (or be concerned as a director in any company engaged in) any business within the countries in which our Company is presently operating, or has plans to enter, in competition with the businesses carried on by our Group at the date of his service agreement; not to assist with technical advice to any person, firm or company engaged in any business within the countries in which our Company is presenting operating, or has plans to enter, in competition with the businesses carried on by our Group at the date of his service agreement;

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not to, within the countries in which our Company is presently operating or has plans to enter, solicit in competition with the businesses carried on by our Group at the date of his service agreement any person, firm or company who at any time during the last 12 months of his service with our Company was a customer of our Group; and not to offer employment by himself or solicit or arrange for employment by any other person of any of the employees of our Group.

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TAXATION
Cayman Islands Taxation Our Company is incorporated in the Cayman Islands. Dividends remitted to Shareholders resident outside the Cayman Islands will not be subject to Cayman Islands withholding tax. There are no reciprocal tax treaties between the Cayman Islands and Singapore. Singapore Taxation The statements made herein regarding taxation are general in nature and based on certain aspects of the tax laws of Singapore and administrative guidelines issued by the relevant authorities in force as at the date of this offering document and are subject to any changes in such laws or administrative guidelines, or in the interpretation of these laws or guidelines, occurring after such date, which changes could be made on a retrospective basis. These laws and guidelines are also subject to various interpretations, and the relevant tax authorities or the courts could later disagree with the explanations or conclusions set out below. The statements below are not to be regarded as advice on the tax position of any holder of our Shares or of any person acquiring, selling or otherwise dealing with our Shares or on any tax implications arising from the acquisition, sale or other dealings in respect of our Shares. The statements made herein do not purport to be a comprehensive or exhaustive description of all of the tax considerations that may be relevant to a decision to purchase, own or dispose of our Shares and do not purport to deal with the tax consequences applicable to all categories of investors some of which (such as dealers in securities) may be subject to special rules. Prospective shareholders are advised to consult their own tax advisors as to the Singapore or other tax consequences of the acquisition, ownership or disposal of our Shares. It is emphasized that neither our Company nor any other persons involved in this offering document accept responsibility for any tax effects or liabilities resulting from the subscription for, purchase, holding or disposal of our Shares. Our Company does not intend to be a tax resident in Singapore for Singapore income tax purposes. Individual Income Tax An individual is a tax resident in Singapore in a year of assessment if, in the preceding calendar year, he was physically present in Singapore or exercised an employment in Singapore (other than as a director of a company) for 183 days or more, or if he resides in Singapore. Individual taxpayers who are Singapore tax residents are subject to Singapore income tax on income accruing in or derived from Singapore. All foreign-sourced income received in Singapore on or after January 1, 2004 by a Singapore tax resident individual (except for income received through a partnership in Singapore) is exempt from Singapore income tax if the Comptroller of Income Tax in Singapore (“ Comptroller ”) is satisfied that the tax exemption would be beneficial to the individual. Subject to certain conditions, foreign-sourced dividend income received in Singapore on or after January 1, 2004 by a Singapore tax resident individual through a partnership in Singapore is exempt from Singapore income tax. A Singapore tax resident individual is taxed at progressive rates ranging from 0.0% to 20.0%. Non-resident individuals, subject to certain exceptions and conditions, are subject to Singapore income tax on income accruing in or derived from Singapore at the rate of 20.0%. Foreign-sourced income received in Singapore by an individual who is not tax resident in Singapore is exempt from Singapore income tax.

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Corporate Income Tax A corporate taxpayer is regarded as resident in Singapore for Singapore tax purposes if the control and management of its business is exercised in Singapore. Corporate taxpayers who are Singapore tax residents are subject to Singapore income tax on income accruing in or derived from Singapore and, subject to certain exceptions, on foreignsourced income received or deemed to be received in Singapore. Foreign-sourced income in the form of dividends, branch profits and services income received or deemed to be received in Singapore by Singapore tax-resident companies on or after June 1, 2003 are exempt from tax if certain prescribed conditions are met, including the following: (i) such income is subject to tax of a similar character to income tax under the law of the jurisdiction from which such income is received; at the time the income is received in Singapore, the highest rate of tax of a similar character to income tax (by whatever name called) levied under the law of the territory from which the income is received on any gains or profits from any trade or business carried on by any company in that territory at that time is not less than 15.0%; and

(ii)

(iii) the Comptroller is satisfied that the exemption would be beneficial to the income recipient. Certain concessions and clarifications have also been announced by the Inland Revenue Authority of Singapore with respect to such conditions. A non-resident corporate taxpayer is subject to income tax on income that is accrued in or derived from Singapore, and on foreign-sourced income received or deemed received in Singapore, subject to certain exceptions. A non-resident corporate taxpayer which does not operate in or from Singapore would not be taxed on foreign income received in Singapore. The corporate tax rate is 17.0% with effect from year of assessment 2010. In addition, three-quarters of up to the first S$10,000, and one-half of up to the next S$290,000, of a company’s chargeable income otherwise subject to normal taxation is exempt from corporate tax. The remaining chargeable income will be fully taxable at the prevailing corporate tax rate. New companies will also, subject to certain conditions, be eligible for full tax exemption on their normal chargeable income of up to S$100,000 a year for each of the company’s first three years of assessment. Dividend Distributions Dividends received in respect of our Shares by either a resident or non-resident in Singapore will be treated as foreign-sourced dividend income for Singapore tax purposes. Gains on Disposal of Shares Singapore does not impose tax on capital gains. There are no specific laws or regulations which deal with the characterization of whether a gain is income or capital in nature. Gains arising from the disposal of our Shares may be construed to be of an income nature and subject to Singapore income tax, especially if the gains are considered as income arising from activities which are regarded as the carrying on of a trade or business and the gains are sourced in Singapore.

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To provide more tax certainty in respect of the determination of nature of share disposal gains derived by companies which are not in the trade/business of share trading, certainty of non-taxation will be given on gains derived by a company from disposal of ordinary shares during the period June 1, 2012 to May 31, 2017 (both dates inclusive) and immediately prior to the date of share disposal, the seller had held at least 20.0% of the ordinary shares in the investee company for a continuous period of at least 24 months. In addition, shareholders who apply, or who are required to apply, the Singapore Financial Reporting Standard 39 Financial Instruments – Recognition and Measurement (“ FRS 39 ”) for the purposes of Singapore income tax may be required to recognize gains or losses (not being gains or losses in the nature of capital) in accordance with the provisions of FRS 39 (as modified by the applicable provisions of Singapore income tax law) even though no sale or disposal of our Shares is made. Shareholders who may be subject to such tax treatment should consult their own accounting and tax advisors regarding the Singapore income tax consequences of their acquisition, holding and disposal of our Shares. Stamp duty There is no stamp duty payable on the subscription of our Shares. Where our Shares evidenced in certificated form are acquired in Singapore, stamp duty is payable on the instrument of transfer of our Shares at the rate of S$0.20 for every S$100 or part thereof of the consideration for, or market value of, our Shares, whichever is higher. The stamp duty is borne by the purchaser unless there is an agreement to the contrary. Where an instrument of transfer is executed outside Singapore or no instrument of transfer is executed, no stamp duty is payable on the acquisition of our Shares. However, stamp duty may be payable if the instrument of transfer is executed outside Singapore and is received in Singapore. Stamp duty is not applicable to electronic transfers of our Shares through the scripless trading system operated by CDP. Estate duty Singapore estate duty has been abolished with respect to all deaths occurring on or after February 15, 2008. Goods and services tax (“GST”) The sale of our Shares by a GST-registered investor belonging in Singapore for GST purposes to another person belonging in Singapore is an exempt supply not subject to GST. Any input GST incurred by the GST-registered investor in making such an exempt supply is generally not recoverable from the Singapore Comptroller of GST, unless certain conditions are satisfied. GST-registered investors should seek the advice of their tax advisors on these conditions. The buyers of the Shares would not incur any GST on their purchase of the Shares. Where our Shares are supplied by a GST-registered investor in the course of or furtherance of a business carried on by such investor contractually to and for the direct benefit of a person belonging outside Singapore, the sale should generally, subject to satisfaction of certain conditions, be considered a taxable supply subject to GST at the zero rate. Any input GST incurred by the GST-registered investor in making such a supply in the course of or furtherance of a business carried on by such investor may be fully recoverable from the Singapore Comptroller of GST, subject to certain conditions. GST-registered investors should seek the advice of their tax advisors on these conditions.

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Services consisting of arranging, broking, underwriting or advising on the issue, allotment or transfer of ownership of our Shares rendered by a GST-registered person to an investor belonging in Singapore for GST purposes in connection with the investor’s purchase, sale or holding of our Shares will be subject to GST at the prevailing standard rate, currently at 7.0%. Similar services rendered contractually to and for the direct benefit of an investor belonging outside Singapore should generally, subject to satisfaction of certain conditions, be subject to GST at the zero rate.

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PLAN OF DISTRIBUTION
The Offering We and the Vendors are making an offering of [ ● ] Offering Shares for subscription and/or purchase at the Offering Price, consisting of the International Offer and the Singapore Public Offer. [ ● ] Offering Shares are being offered under the International Offer and [ ● ] Offering Shares are being offered under the Singapore Public Offer. The Offering Shares may be re-allocated between the International Offer and the Singapore Public Offer at the discretion of the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager, subject to any applicable law. The Underwriting Agreement Under the terms and subject to the conditions contained in an underwriting agreement among us, the Vendors and the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager, dated [ ● ] (the “ Underwriting Agreement ”), we will effect the issue of [ ● ] Shares and the Vendors are expected to effect the transfer of [ ● ] Shares, and the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager has, subject to certain conditions, agreed to subscribe for and/or purchase or procure subscribers and/or purchasers for, an aggregate of [ ● ] Offering Shares. The Underwriting Agreement may be terminated at any time prior to delivery of the Offering Shares pursuant to the terms of the Underwriting Agreement, upon the occurrence of certain events, including, among other things, certain force majeure events. The closing of the Offering is conditional upon certain events, including the fulfillment, or waiver by the SGX-ST, of all of the conditions contained in the letter of eligibility from the SGX-ST for the listing and quotation of all of our issued Shares (including the Offering Shares, the Additional Shares and the Scheme Shares) on the Official List of the SGX-ST. The Underwriting Agreement also provides that the obligations of the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager to subscribe for and/or purchase or procure subscribers for and/or purchasers of the Shares in the Offering are subject to certain conditions precedent, including the receipt by the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager of officer’s certificates and legal opinions. The Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager may make subunderwriting agreements in respect of their obligations under the Underwriting Agreement upon such terms and conditions as they deem fit. Indemnities We and the Vendors have agreed in the Underwriting Agreement to indemnify the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager against certain liabilities. The indemnity provides that to the extent that the indemnification is unavailable or insufficient to hold harmless an indemnified party, the Company and/or Vendors, as applicable, shall contribute to the amount payable by the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager as a result of any claims against them, in such proportion as is appropriate to reflect the relative benefits from the Offering. Where such allocation is prohibited by applicable law then the Company and/or Vendors, as applicable, and the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager shall contribute proportionately to reflect both their relative benefits and their relative fault, as the case may be, in respect of any misstatement or omission which resulted in such claims and any other relevant equitable considerations. The relative benefits received by the Company and/or Vendors, as applicable, and the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager pursuant to the Offering will be in the same proportion as (in the case of the Company and/or the Vendors) the amount of total net proceeds from the Offering (before deducting expenses) they received and (in the case of the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager) the amount of the total underwriting commissions 254

received by the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager in respect of the Offering. The relative fault is determined by reference to, among other things, whether the misstatement or omission relates to information supplied by the Company and/or Vendors, as applicable, or the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager, as the case may be, whether the Company and/or Vendors, as applicable, breached any of its warranties, representations or obligations under the Underwriting Agreement and the respective parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such misstatement or omission or breach. The Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager shall not be required to contribute any amount in excess of its total commission and underwriting fees less the amount of any damages it has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. Expenses and Commission The Global Coordinator, Bookrunner, Underwriter and Issue Manager has agreed, subject to certain conditions, to subscribe for and/or purchase or procure subscribers and/or purchasers for the Offering Shares at the Offering Price set forth on the cover page of this document. We and the Vendors will pay the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager, as compensation for their services in connection with the Offering, underwriting, selling and management commission amounting to [ ● ] of the total gross proceeds from the sale of the Offering Shares and the Additional Shares (if the Over-allotment Option is exercised). We and the Vendors may also, at our sole discretion, pay to the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager an incentive fee in aggregate of up to [ ● ]% of the gross proceeds from the offering of the Offering Shares and the Additional Shares (if the Over-allotment Option is exercised). See “ Use of Proceeds ” for details on the expenses incurred in connection with the Offering. Purchasers of our Offering Shares, other than those in the Singapore Public Offer, will be required to pay to the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager a brokerage fee of up to 1.0% of the Offering Price, stamp taxes and other similar charges in accordance with the laws and practices of the country of purchase, at the time of settlement. No Existing Public Market Prior to the Offering, there has been no trading market for our Shares. The Offering Price was determined after a book building process and agreed among ourselves, the Vendors and the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager. Among the factors considered in determining the Offering Price of the Offering Shares were the prevailing market conditions, current market valuations of publicly traded companies that we, the Vendors and the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager believe to be reasonably comparable to us, an assessment of our recent historical performance, estimates of our business potential and earnings prospects, the current state of our development and the current state of our industry and the economy as a whole. Over-allotment Option In connection with the Offering, the Vendors have granted the Stabilizing Manager the Overallotment Option exercisable by the Stabilizing Manager in whole or in part, on one or more occasions, from the Listing Date until the earlier of (i) the date falling 30 days from the Listing Date and (ii) the date when the Stabilizing Manager or its appointed agent has bought, on the SGX-ST, an aggregate of [ ● ] Shares, representing not more than 15.0% of the total Offering Shares, to undertake stabilizing actions to purchase up to an aggregate of [ ● ] Additional Shares

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(representing not more than 15.0% of the total Offering Shares) at the Offering Price, solely to cover the over-allotment of the Offering Shares, if any, subject to any applicable laws and regulations. Price Stabilization In connection with the Offering, the Stabilizing Manager may over-allot Shares or effect transactions which may stabilize or maintain the market price of the Shares at levels above those that would otherwise prevail in the open market. Such transactions may be effected on the SGX-ST and in other jurisdictions where it is permissible to do so, in each case in compliance with all applicable laws and regulations, including the SFA and any regulations thereunder. However, there is no assurance that the Stabilizing Manager will undertake any such stabilization action. Such transactions may commence on or after the commencement of trading of the Shares on the SGX-ST and, if commenced, may be discontinued at any time and shall not be effected after the earlier of (i) the date falling 30 days from the Listing Date, and (ii) the date when the Stabilizing Manager has bought on the SGX-ST an aggregate of [ ● ] Shares, representing not more than 15.0% of the total Offering Shares, to undertake stabilizing actions. Neither our Company, the Vendors, nor the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager make any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the price of the Shares. In addition, neither our Company, the Vendors, nor the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager make any representation that the Stabilizing Manager will engage in such transactions or that such transactions, once commenced, will not be discontinued without notice (unless such notice is required by law). The Stabilizing Manager will be required to make a public announcement through the SGX-ST on the cessation of the stabilizing actions and the amount of the Over-allotment Option that has been exercised not later than the start of the trading day of the SGX-ST immediately after the day of cessation of stabilizing actions. See “ Risk Factors – Risks Relating to Our Offering and Investment in Our Shares – Singapore take-over laws contain provisions which may vary from those in other jurisdictions ”. Share Lending Agreement In connection with settlement and stabilization, the Stabilizing Manager has entered into a share lending agreement dated [ ● ] 2013 (the “ Share Lending Agreement ”) with ReHo Limited and UCL Asia Holdings VII Limited (the “ Share Lenders ”) pursuant to which the Stabilizing Manager may borrow up to [ ● ] Shares allowing the Stabilizing Manager to settle over-allocations, if any, made in connection with the Offering. If the Stabilizing Manager borrows Shares pursuant to the Share Lending Agreement, it is required to return equivalent securities or cash to the Share Lender by no later than ten business days following the earlier of (i) the last date for exercising the Over-allotment Option and (ii) the date on which the Over-allotment Option is exercised. In addition, in order not to trigger the mandatory offer requirement under the Singapore Take-Over Code which may otherwise occur in connection with the lending and return of Shares pursuant to the Share Lending Agreement, the Share Lending Agreement includes a right for the Share Lenders to recall such number of Shares which are equivalent to the Shares (if any) lent under the Share Lending Agreement by giving seven days’ prior written notice to the Stabilizing Manager. Shares Are Not Being Registered Under the U.S. Securities Act The Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager, directly or through their affiliates, proposes to offer the Offering Shares for resale in transactions not requiring registration under the U.S. Securities Act or applicable state securities laws, including sales pursuant to Regulation S. The Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager will not offer or sell the Offering Shares except outside the United States in offshore transactions (as defined in Regulation S). 256

Shares may not be offered, transferred or resold within the United States except under an exemption from the registration requirements of the U.S. Securities Act or under a registration statement declared effective under the U.S. Securities Act and in accordance with the restrictions under “ Transfer Restrictions ”. No Sales of Similar Securities and Lock-up Our Company We have agreed with the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager that, subject to certain exceptions, from the date of the Underwriting Agreement until the date falling six months after Listing Date, we will not, without the prior written consent of the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager, (a) allot, offer, issue, sell, contract to issue, grant any option, warrant or other right to subscribe or purchase, grant security over, encumber (whether by way of mortgage, assignment of rights, charge, pledge, pre-emption rights, rights of first refusal or otherwise), or otherwise dispose of or transfer, or file with the SEC a registration statement under the U.S. Securities Act relating to, any Shares or any other securities of the Company or any subsidiary of ours (including any bonds, equity-linked securities, perpetual securities and any securities convertible into or exchangeable for, or which carry rights to subscribe for or purchase, such Shares or any other securities of the Company or any subsidiary of ours), whether such transaction is to be settled by delivery of Shares or other securities of the Company or any subsidiary of ours, or in cash or otherwise; (b) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any Shares or any other securities of the Company or any subsidiary of ours, or any interest in any of the foregoing (including any securities convertible into or exchangeable for, or which carry rights to subscribe or purchase, Shares or any other securities of the Company or any subsidiary of ours), whether such transaction is to be settled by delivery of Shares or other securities of the Company or any subsidiary of ours, or in cash or otherwise; (c) enter into any transaction with the same economic effect as any transaction described in the foregoing (a) or (b); (d) deposit any Shares or any other securities of the Company or any subsidiary of ours (including any securities convertible into or exchangeable for, or which carry rights to subscribe or purchase, such Shares or any other securities of the Company or any subsidiary of ours) in any depository receipt facilities; or (e) offer or agree to or make any announcement with respect to any of the foregoing transactions. The foregoing restriction does not apply to any Shares issued under the Offering or pursuant to the Sewko Employee Share Option Scheme (the “ Scheme ”). The Vendors To demonstrate the Vendors’ commitment to our Group, each of the Vendors has agreed with the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager that, subject to certain exceptions, it will not without the prior written consent of the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager, from the date of the Underwriting Agreement until the date falling six months after Listing Date, directly or indirectly, (a) offer, pledge, sell, contract to sell, grant any option, right or warrant to purchase, lend, hypothecate or encumber or otherwise transfer or dispose of, or file with the SEC a registration statement under the U.S. Securities Act relating to, any of its Shares (including any interests or securities convertible into or exchangeable for any Shares or which carry rights to subscribe for or purchase any Shares); (b) enter into any swap, hedge or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Shares or any interests or securities convertible into or exercisable or exchangeable for, or which carry rights to subscribe or purchase, any Shares, whether such swap, hedge or other arrangement is to be settled by delivery of shares or other securities, in cash or otherwise; (c) enter into any transaction or other arrangement having an economic effect similar, in whole or in part, to the foregoing (a) or (b); (d) deposit any of its Shares 257

(including any interests or securities convertible into or exchangeable for, or which carry rights to subscribe for or purchase, any Shares) in any depository receipt facilities, whether any such transaction is to be settled by delivery of shares or other securities, in cash or otherwise; or (e) offer to, or agree to, or publicly announce any intention to, do any of the above. The foregoing restrictions do not apply to (i) the Shares to be sold by the Vendors in the Offering; (ii) any Additional Shares that are sold pursuant to the Over-allotment Option granted by the Vendors to the Stabilizing Manager; and (iii) the Shares which are lent by ReHo Limited or UCL Asia Holdings VII Limited to the Stabilizing Manager under the Share Lending Agreement, provided that the restrictions will apply to the Shares returned to ReHo Limited or UCL Asia Holdings VII Limited pursuant to the Share Lending Agreement. UCL Asia GP, L.P. has further undertaken to the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager that, during the Lock-Up Period, it will, unless otherwise removed by the limited partners pursuant to the limited partnership agreement, remain as general partner of UCL Asia Partners, L.P. (“ UAP ”) and will not, without the prior written consent of the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager, during the Lock-Up Period, directly or indirectly, (a) offer, pledge, sell or contract to sell, grant any option, right or warrant to purchase, lend, hypothecate or encumber or otherwise transfer or dispose of, directly or indirectly, any of its interests in UAP (including any interests or securities convertible into or exchangeable for any interest in UAP) (the “ UAP Interests ”); (b) enter into any swap, hedge or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of (or having interests in) any UAP Interests, whether such swap, hedge or other arrangement is to be settled by delivery of shares or other securities, in cash or otherwise; (c) enter into any transaction or other arrangement having an economic effect similar, in whole or in part, to the foregoing (a) or (b); (d) deposit any of the UAP Interests in any depository receipt facilities, whether any such transaction is to be settled by delivery of shares or other securities, in cash or otherwise; or (e) offer to, or agree to, or publicly announce any intention to do any of the above. UCL Asia GP, L.P. has further agreed with the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager that shall not, whether directly or indirectly, cause itself to be removed as general partner of UAP. UCL Asia Partners, L.P. and UCL Asia GP, L.P. To demonstrate UCL Asia Partners, L.P.’s commitment to our Group, each of UCL Asia Partners, L.P. and UCL Asia GP, L.P. has agreed with the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager that, subject to certain exceptions, it will not without the prior written consent of the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager, from the date of the Underwriting Agreement until the date falling six months after Listing Date, directly or indirectly, (a) offer, pledge, sell or contract to sell, grant any option, right or warrant to purchase, lend, hypothecate or encumber or otherwise transfer or dispose of, directly or indirectly, its interests in the Shares and its shares in UCL Asia Holdings VII Limited (the “ UCL Asia Holdings VII Shares ” and together, the “ UCL Asia Partners Lock-Up Securities ”) (including any interests or securities convertible into or exchangeable for any such shares or which carry rights to subscribe for or purchase any such shares); (b) enter into any swap, hedge or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of (or having interests in) the Shares or the UCL Asia Holdings VII Shares or any interests or securities convertible into or exercisable or exchangeable for or which carry rights to subscribe or purchase any Shares or UCL Asia Holdings VII Limited Shares, whether such swap, hedge or other arrangement is to be settled by delivery of shares or other securities, in cash or otherwise; (c) enter into any transaction or other arrangement having an economic effect similar, in whole or in part, to the foregoing (a) or (b); (d) deposit any of UCL Asia Partners Lock-Up Securities (including any interests or securities convertible into or exchangeable for, or which carry rights to subscribe for or purchase, any Shares or UCL Asia Holdings VII Limited Shares) in any depository receipt

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facilities, whether any such transaction is to be settled by delivery of shares or other securities, in cash or otherwise; or (e) offer to, or agree to, or publicly announce any intention to, do any of the above. The foregoing restrictions do not apply to (i) the Shares to be sold by UCL Asia Holdings VII Limited in the Offering; (ii) any Additional Shares that are sold pursuant to the Over-allotment Option granted by the Vendors to the Stabilizing Manager; and (iii) the Shares which are lent by UCL Asia Holdings VII Limited to the Stabilizing Manager under the Share Lending Agreement, provided that the restrictions will apply to the Shares returned to UCL Asia Holdings VII Limited pursuant to the Share Lending Agreement. UCL Asia Investments, Ltd To demonstrate its commitment to our Group, UCL Asia Investments, Ltd, which owns 99% of UCL Asia GP, L.P., has agreed with the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager that, subject to certain exceptions, it will not without the prior written consent of the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager, from the date of the Underwriting Agreement until the date falling six months after Listing Date, directly or indirectly, (a) offer, pledge, sell or contract to sell, grant any option, right or warrant to purchase, lend, hypothecate or encumber or otherwise transfer or dispose of, directly or indirectly, its interests in the Shares and equity interests in UCL Asia GP, L.P. which it owns or has agreed to acquire (referred to in this paragraph as the “ UCL Asia GP Interests ” and together with the Shares, the “ UCL Asia Investments Lock-Up Securities ”) (including any interests or securities convertible into or exchangeable for any such shares or which carry rights to subscribe for or purchase any such shares); (b) enter into any swap, hedge or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of (or having interests in) the Shares or the UCL Asia GP Interests or any interests or securities convertible into or exercisable or exchangeable for, or which carry rights to subscribe or purchase, any Shares or UCL Asia GP Interests, whether such swap, hedge or other arrangement is to be settled by delivery of shares or other securities, in cash or otherwise; (c) enter into any transaction or other arrangement having an economic effect similar, in whole or in part, to the foregoing (a) or (b); (d) deposit any of UCL Asia Investments Lock-Up Securities (including any interests or securities convertible into or exchangeable for, or which carry rights to subscribe for or purchase, any Shares or UCL Asia GP Interests) in any depository receipt facilities, whether any such transaction is to be settled by delivery of shares or other securities, in cash or otherwise; or (e) offer to, or agree to, or publicly announce any intention to, do any of the above. The foregoing restrictions do not apply to (i) the Shares to be sold by UCL Asia Holdings VII Limited in the Offering; (ii) any Additional Shares that are sold pursuant to the Over-allotment Option granted by the Vendors to the Stabilizing Manager; and (iii) the Shares which are lent by UCL Asia Holdings VII Limited to the Stabilizing Manager under the Share Lending Agreement, provided that the restrictions will apply to the Shares returned to UCL Asia Holdings VII Limited pursuant to the Share Lending Agreement. Jamie O’Donnell To demonstrate his commitment to our Group, Jamie O’Donnell (who is a Director of our Company and a shareholder of UCL Asia Investments, Ltd), has agreed with the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager that, subject to certain exceptions, he will not without the prior written consent of the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager, from the date of the Underwriting Agreement until the date falling six months after Listing Date, directly or indirectly, (a) offer, pledge, sell or contract to sell, grant any option, right or warrant to purchase, lend, hypothecate or encumber or otherwise transfer or dispose of, directly or indirectly, his interests in the Shares and his shares in UCL Asia Investments Ltd (referred to in this paragraph as the “ UCL Asia Investments Shares ” and together with the Shares, the “ JOD 259

Lock-Up Securities ”) (including any interests or securities convertible into or exchangeable for any such shares or which carry rights to subscribe for or purchase any such shares); (b) enter into any swap, hedge or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of (or having interests in) the Shares or the UCL Asia Investments Shares or any interests or securities convertible into or exercisable or exchangeable for, or which carry rights to subscribe or purchase, any Shares or UCL Asia Investments Shares, whether such swap, hedge or other arrangement is to be settled by delivery of shares or other securities, in cash or otherwise; (c) enter into any transaction or other arrangement having an economic effect similar, in whole or in part, to the foregoing (a) or (b); (d) deposit any of JOD Lock-Up Securities (including any interests or securities convertible into or exchangeable for, or which carry rights to subscribe for or purchase, any Shares or UCL Asia Investments Shares) in any depository receipt facilities, whether any such transaction is to be settled by delivery of shares or other securities, in cash or otherwise; or (e) offer to, or agree to, or publicly announce any intention to, do any of the above. The foregoing restrictions do not apply to (i) the Shares to be sold by UCL Asia Holdings VII Limited in the Offering; (ii) any Additional Shares that are sold pursuant to the Over-allotment Option granted by the Vendors to the Stabilizing Manager; and (iii) the Shares which are lent by UCL Asia Holdings VII Limited to the Stabilizing Manager under the Share Lending Agreement, provided that the restrictions will apply to the Shares returned to UCL Asia Holdings VII Limited pursuant to the Share Lending Agreement. Tobias Brown To demonstrate his commitment to our Group, Tobias Brown (who is a Director of our Company and a shareholder of UCL Asia Investments, Ltd), has agreed with the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager that, subject to certain exceptions, he will not without the prior written consent of the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager, from the date of the Underwriting Agreement until the date falling six months after Listing Date, directly or indirectly, (a) offer, pledge, sell or contract to sell, grant any option, right or warrant to purchase, lend, hypothecate or encumber or otherwise transfer or dispose of, directly or indirectly, his interests in the Shares and his shares in UCL Asia Investments Ltd (referred to in this paragraph as the “ UCL Asia Investments Shares ” and together with the Shares, the “ TB Lock-Up Securities ”) (including any interests or securities convertible into or exchangeable for any such shares or which carry rights to subscribe for or purchase any such shares); (b) enter into any swap, hedge or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of (or having interests in) the Shares or the UCL Asia Investments Shares or any interests or securities convertible into or exercisable, or exchangeable for or which carry rights to subscribe or purchase, any Shares or UCL Asia Investments Shares, whether such swap, hedge or other arrangement is to be settled by delivery of shares or other securities, in cash or otherwise; (c) enter into any transaction or other arrangement having an economic effect similar, in whole or in part, to the foregoing (a) or (b); (d) deposit any of TB Lock-Up Securities (including any interests or securities convertible into or exchangeable for, or which carry rights to subscribe for or purchase, any Shares or UCL Asia Investments Shares) in any depository receipt facilities, whether any such transaction is to be settled by delivery of shares or other securities, in cash or otherwise; or (e) offer to, or agree to, or publicly announce any intention to, do any of the above. The foregoing restrictions do not apply to (i) the Shares to be sold by UCL Asia Holdings VII Limited in the Offering; (ii) any Additional Shares that are sold pursuant to the Over-allotment Option granted by the Vendors to the Stabilizing Manager; and (iii) the Shares which are lent by UCL Asia Holdings VII Limited to the Stabilizing Manager under the Share Lending Agreement, provided that the restrictions will apply to the Shares returned to UCL Asia Holdings VII Limited pursuant to the Share Lending Agreement.

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Retail Holdings To demonstrate Retail Holdings’s commitment to our Group, Retail Holdings has agreed with the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager that, subject to certain exceptions, it will not without the prior written consent of the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager, from the date of the Underwriting Agreement until the date falling six months after Listing Date, directly or indirectly, (a) offer, pledge, sell or contract to sell, grant any option, right or warrant to purchase, lend, hypothecate or encumber or otherwise transfer or dispose of, directly or indirectly, its interests in the Shares and its shares in ReHo Limited (the “ ReHo Shares ” and together, the “ Retail Holdings Lock-Up Securities ”) (including any interests or securities convertible into or exchangeable for any such shares or which carry rights to subscribe for or purchase any such shares); (b) enter into any swap, hedge or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of (or having interests in) the Shares or the ReHo Shares or any interests or securities convertible into or exercisable or exchangeable for, or which carry rights to subscribe or purchase, any Shares or ReHo Shares, whether such swap, hedge or other arrangement is to be settled by delivery of shares or other securities, in cash or otherwise; (c) enter into any transaction or other arrangement having an economic effect similar, in whole or in part, to the foregoing (a) or (b); (d) deposit any of Retail Holdings Lock-up Securities (including any interests or securities convertible into or exchangeable for, or which carry rights to subscribe for or purchase, any Shares or ReHo Shares) in any depository receipt facilities, whether any such transaction is to be settled by delivery of shares or other securities, in cash or otherwise; or (e) offer to, or agree to, or publicly announce any intention to, do any of the above. The foregoing restrictions do not apply to (i) the Shares to be sold by ReHo Limited in the Offering; (ii) any Additional Shares that are sold pursuant to the Over-allotment Option granted by the Vendors to the Stabilizing Manager; and (iii) the Shares which are lent by ReHo Limited to the Stabilizing Manager under the Share Lending Agreement, provided that the restrictions will apply to the Shares returned to ReHo Limited pursuant to the Share Lending Agreement. Stephen Goodman To demonstrate his commitment to our Group, Stephen Goodman (who is our Chairman and Executive Director and a shareholder of Retail Holdings), as well as Susan Goodman (who is the spouse of Stephen Goodman) in her capacity as the trustee of the three trusts which beneficiaries are Stephen Goodman’s child and grandchildren, have agreed with the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager that, subject to certain exceptions, each of Stephen Goodman and the three trusts will not without the prior written consent of the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager, from the date of the Underwriting Agreement until the date falling six months after Listing Date, directly or indirectly, (a) offer, pledge, sell or contract to sell, grant any option, right or warrant to purchase, lend, hypothecate or encumber or otherwise transfer or dispose of, directly or indirectly, their respective interests in the Shares and their shares in Retail Holdings (referred to in this paragraph as the “ Retail Holdings Shares ” and together with the Shares, the “ SG Lock-Up Securities ”) (including any interests or securities convertible into or exchangeable for any such shares or which carry rights to subscribe for or purchase any such shares); (b) enter into any swap, hedge or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of (or having interests in) the Shares or the Retail Holdings Shares or any interests or securities convertible into or exercisable or exchangeable for, or which carry rights to subscribe or purchase, any Shares or Retail Holdings Shares, whether such swap, hedge or other arrangement is to be settled by delivery of shares or other securities, in cash or otherwise; (c) enter into any transaction or other arrangement having an economic effect similar, in whole or in part, to the foregoing (a) or (b); (d) deposit any of SG Lock-Up Securities (including any interests or securities convertible into or exchangeable for, or which carry rights to subscribe for or

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purchase, any Shares or Retail Holdings Shares) in any depository receipt facilities, whether any such transaction is to be settled by delivery of shares or other securities, in cash or otherwise; or (e) offer to, or agree to, or publicly announce any intention to do any of the above. The foregoing restrictions do not apply to (i) the Shares to be sold by ReHo Limited in the Offering; (ii) any Additional Shares that are sold pursuant to the Over-allotment Option granted by the Vendors to the Stabilizing Manager; and (iii) the Shares which are lent by ReHo Limited to the Stabilizing Manager under the Share Lending Agreement, provided that the restrictions will apply to the Shares returned to ReHo Limited pursuant to the Share Lending Agreement. Gavin Walker Our President, Chief Executive Officer and Executive Director, Gavin Walker has agreed with the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager that he will not without the prior written consent of the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager, from the date of the Underwriting Agreement until the date falling six months after Listing Date, directly or indirectly, (a) offer, pledge, sell, contract to sell, grant any option, right or warrant to purchase, lend, hypothecate or encumber or otherwise transfer or dispose of, or file with the SEC a registration statement under the U.S. Securities Act relating to, any of his Shares (including any interests or securities convertible into or exchangeable for any Shares or which carry rights to subscribe for or purchase any Shares); (b) enter into any swap, hedge or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Shares or any interests or securities convertible into or exercisable or exchangeable for or which carry rights to subscribe or purchase any Shares, whether such swap, hedge or other arrangement is to be settled by delivery of shares or other securities, in cash or otherwise, enter into any transaction or other arrangement having an economic effect similar, in whole or in part, to the foregoing (a) or (b); (c) deposit any of his Shares (including any interests or securities convertible into or exchangeable for, or which carry rights to subscribe for or purchase, any Shares) in any depository receipt facilities, whether any such transaction is to be settled by delivery of shares or other securities, in cash or otherwise; or (d) offer to, or agree to, or publicly announce any intention to, do any of the above. Selling Restrictions Australia This document and the offer is only made available in Australia to persons to whom a disclosure document is not required to be given under either Chapter 6D or Chapter 7.9 of the Australian Corporations Act 2001 (Cth) (“ Corporations Act ”). This document is not a prospectus, product disclosure statement or any other form of formal “disclosure document” for the purposes of Australian Law, and is not required to, and does not, contain all the information which would be required in a disclosure document under Australian law. It is made available to you on the basis that you are a professional investor or sophisticated investor for the purposes of Chapter 6D, and a wholesale client for the purposes of Chapter 7.9, of the Corporations Act. If you acquire the IPO Shares in Australia, then you: (a) (b) (c) represent and warrant that you are a professional or sophisticated investor; represent and warrant that you are a wholesale client; and agree not to sell or offer for sale any IPO Shares in Australia within 12 months from the date of their issue under the Offer, except in circumstances where:

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(i)

disclosure to investors would not be required under either Chapter 6D or Chapter 7.9 of the Corporations Act; or such sale or offer is made pursuant to a disclosure document which complies with either Chapter 6D or Chapter 7.9 of the Corporations Act.

(ii)

This document has not been and will not be lodged or registered with the Australian Securities and Investments Commission or ASX Limited or any other regulatory body or agency in Australia. The persons referred to in this document may not hold Australian Financial Services licenses. No cooling off regime will apply to an acquisition of any interest in the Company. This document does not take into account the investment objectives, financial situation or needs of any particular person. Accordingly, before making any investment decision in relation to this document, you should assess whether the acquisition of any interest in the Company is appropriate in light of your own financial circumstances or seek professional advice. Dubai International Financial Centre This document relates to an Exempt Offer in accordance with the Offered Securities Rules of the Dubai Financial Services Authority (“ DFSA ”). This document is intended for distribution only to persons of a type specified in those Rules. It must not be delivered to, or relied on by, any other person. The DFSA has no responsibility for reviewing or verifying any documents in connection with Exempt Offers. The DFSA has not approved this document or taken steps to verify the information set out in it, and has no responsibility for it. The Offering Shares to which this document relates may be illiquid and/or subject to restrictions on their resale. Prospective purchasers of the Offering Shares offered should conduct their own due diligence on the Offering Shares. If you do not understand the contents of this document you should consult an authorized financial advisor. European Economic Area In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “ Relevant Member State ”), an offer to the public of any Offering Shares may not be made in that Relevant Member State, except that an offer to the public in that Relevant Member State of any Offering Shares may be made at any time under the following exemptions under the Prospectus Directive, if they have been implemented in that Relevant Member State: (a) (b) to any legal entity which is a qualified investor as defined under the Prospectus Directive; to fewer than 100, or, if the Relevant Member State has implemented the relevant provisions of the 2010 PD Amending Directive, 150, natural or legal persons (other than qualified investors as defined in the Prospectus Directive), subject to obtaining the prior consent of the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager; or any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of Offering Shares shall result in a requirement for the Company to publish a prospectus pursuant to Article 3 of the Prospectus Directive or supplement a prospectus pursuant to Article 16 of the Prospectus Directive and each person who initially acquires any Offering Shares or to whom any offer is made will be deemed to have represented, warranted and agreed to and with the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager and the Company that it is a qualified investor within the meaning of the law in that Relevant Member State implementing Article 2(1)(e) of the Prospectus Directive.

(c)

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For the purposes of this provision, the expression “ an offer to the public ” in relation to any Offering Shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the Offering and any Offering Shares to be offered so as to enable an investor to decide to purchase any Offering Shares, as the same may be varied for that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State. In the case of any Offering Shares being offered to a financial intermediary as that term is used in Article 3(2) of the Prospectus Directive, such financial intermediary will also be deemed to have represented, warranted and agreed to and with the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager and the Company that (i) the Offering Shares acquired by it have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any Relevant Member State other than qualified investors, or in circumstances in which the prior consent of the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager has been obtained to each such proposed offer or resale, or (ii) where Offering Shares have been acquired by it on behalf of persons in any Relevant Member State other than qualified investors, the offer of those Offering Shares to it is not treated under the Prospectus Directive as having been made to such persons. The Company, the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager and each of their respective affiliates and others will rely upon the truth and accuracy of the foregoing representation, warranty and agreement. Notwithstanding the above, a person who is not a qualified investor and who has notified the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager of such fact in writing may, with the consent of the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager, be permitted to subscribe for or purchase Offering Shares. The expression “ Prospectus Directive ” means Directive 2003/71/EC, as amended, and includes any relevant implementing measure in each Relevant Member State (and amendments thereto, including the 2010 PD Amending Directive, to the extent that such directive has been implemented in the Relevant Member State), and the expression “ 2010 PD Amending Directive ” means Directive 2010/73/EU. Hong Kong The contents of this document have not been reviewed by any regulatory authority in Hong Kong. You are advised to exercise caution in relation to the offer. If you are in any doubt about any of the contents of this document, you should obtain independent professional advice. This offering document has not been approved by the Securities and Futures Commission in Hong Kong and, accordingly, (i) the Offering Shares may not be offered or sold in Hong Kong by means of this offering document or any other document other than to “professional investors” as defined in the Securities and Futures Ordinance of Hong Kong (Cap. 571) and any rules made thereunder, or in other circumstances which do not result in the document being a “prospectus” as defined in the Companies Ordinance of Hong Kong (Cap. 32) or which do not constitute an offer to the public within the meaning of the Companies Ordinance, and (ii) no person shall issue or possess for the purposes of issue, whether in Hong Kong or elsewhere, any advertisement, invitation or document relating to the Offering Shares which is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to the Offering Shares which are or are intended to be disposed of only to persons outside Hong Kong or only to professional investors (as set out above).

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India This document may not be distributed directly or indirectly in India and the Offering Shares may not be offered or sold directly or indirectly in India or to, or for the account or benefit of, any resident of India, except on a private and confidential basis, to such limited investors who are permitted to participate in such an offering and not constituting an offer or invitation to the public within the meaning of the Indian Companies Act 1956, or except as otherwise permitted by applicable Indian laws and regulations. This document has not been reviewed or approved by any statutory or regulatory authority in India, including the Offering Shares and Exchange Board of India, and does not constitute an offer or invitation for any investment or subscription for Offering Shares in India. Indonesia The Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager has represented and agreed that it has not offered and sold, and will not offer and sell, any Offering Shares in Indonesia or to Indonesian nationals, corporations or to Indonesian citizens, wherever they are domiciled or to Indonesian residents, including by way of invitation, offering or advertisement, and neither this offering document nor any other materials relating to the Offering Shares have been distributed, or will be distributed, in Indonesia or to Indonesian nationals, corporations or residents in a manner which constitutes a public offering of the Offering Shares under the laws or regulations of Indonesia. Switzerland The Offering Shares may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange Ltd. (“ SIX Swiss Exchange ”) or on any other stock exchange or regulated trading facility in Switzerland. This document does not constitute a prospectus within the meaning of, and has been prepared without regard to, the disclosure standards for issue prospectuses under art. 652a or art. 1156 of the Swiss Code of Obligations or the disclosure standards for listing prospectuses under art. 27 ff. of the SIX Swiss Exchange Listing Rules or the listing rules of any other stock exchange or regulated trading facility in Switzerland. Neither this document nor any other offering or marketing material relating to the Offering Shares or the Offering may be publicly distributed or otherwise made publicly available in Switzerland. Neither this document nor any other offering or marketing material relating to the Offering, the Company or the Offering Shares have been or will be filed with or approved by any Swiss regulatory authority. In particular, this document will not be filed with, and the offer of Offering Shares will not be supervised by, the Swiss Financial Market Supervisory Authority FINMA (“ FINMA ”), and the offer of Offering Shares has not been and will not be authorized under the Swiss Federal Act on Collective Investment Schemes (“ CISA ”). The investor protection afforded to acquirers of interests in collective investment schemes under the CISA does not extend to acquirers of Offer Shares. Thailand No action has been or will be taken by the Company, or by or on behalf of the Underwriter, which would permit a public offering of any of the Offering Shares or distribution of the Offering Document, and this Offering Document is not intended to constitute an offer to sell or the solicitation of an offer to buy the Offering Shares in Thailand. No general solicitation has been or will be conducted and no advertisement in whatever form has been employed in Thailand or in other countries where the offer or solicitation of the Offering Shares would be prohibited.

265

United Arab Emirates The Offering Shares have not been, and are not being, publicly offered, sold, promoted or advertised in the United Arab Emirates (including the Dubai International Financial Centre) other than in compliance with the laws of the United Arab Emirates (and the Dubai International Financial Centre) governing the issue, offering and sale of securities. Further, this offering document does not constitute a public offer of securities in the United Arab Emirates (including the Dubai International Financial Centre) and is not intended to be a public offer. This offering document has not been approved by or filed with the Central Bank of the United Arab Emirates, the Securities and Commodities Authority or the Dubai Financial Services Authority. United Kingdom The Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager has represented, warranted and undertaken that: (i) it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000 (“ FSMA ”)) in connection with the issue or sale of any Offering Shares in circumstances in which section 21(1) of FSMA does not apply to the Company; and it has complied and will comply with all applicable provisions of FSMA with respect to anything done by it in relation to the Offering Shares in, from or otherwise involving the United Kingdom.

(ii)

United States The Offering Shares have not been registered under the U.S. Securities Act or the securities laws of any state or other jurisdiction of the United States. Accordingly, the Offering Shares may not be offered, sold or otherwise transferred in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and any other applicable securities laws. Accordingly, the Offering Shares are being offered and sold only to investors outside the United States in “offshore transactions” (as defined in Regulation S under the U.S. Securities Act) in reliance on Regulation S under the U.S. Securities Act. In addition, until 40 days after the commencement of the Offering, an offer or sale of Offering Shares within the United States by any dealer (whether or not participating in the Offering) may violate the registration requirements of the U.S. Securities Act. General Buyers of Offering Shares under the International Offer may be required to pay stamp taxes and/or other charges in accordance with the laws and practice of the country of purchase in addition to the Offering Price on the cover of this offering document. No action has been or will be taken in any jurisdiction that would permit a public offer of the Offering Shares being offered outside of Singapore, or the possession, circulation or distribution of this offering document or any other material relating to us or the Offering Shares, in any jurisdiction where action for the purpose is required. Accordingly, the Offering Shares may not be offered or sold, directly or indirectly, and neither this offering document nor any other offering material or advertisements in connection with the Offering Shares may be distributed or published, in or from any country or jurisdiction except under circumstances that will result in compliance with any applicable rules and regulations of any such country or jurisdiction.

266

It is expected that delivery of the Offering Shares offered in the Offering will be made through the facilities of the CDP (scripless system) on or about [ ● ], 2013. Other Relationships The Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager and certain of its affiliates may have performed commercial banking, investment banking and other advisory services for us and our affiliates from time to time for which they received customary fees and expenses. The Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager and certain of its affiliates may, from time to time, trade in our securities, engage in transactions with, and perform services for, us and our affiliates in the ordinary course of their business. Persons Intending to Purchase and/or Subscribe for the Offering Shares As at the date of registration of the offering document with the Authority, we are not aware of any person who intends to purchase more than 5.0% of the Offering Shares pursuant to the Offering.

267

TRANSFER RESTRICTIONS
As a result of the following restrictions, investors are urged to consult legal counsel prior to making any offer, resale, pledge or other transfer of the Offering Shares. United States The Offering is being made in accordance with and in reliance upon Regulation S under the U.S. Securities Act. The Offering Shares have not been registered under the U.S. Securities Act or with any US state or federal securities regulatory authority of any state or other jurisdiction and, accordingly, may not be offered, sold, pledged or otherwise transferred or delivered within the United States except pursuant to an applicable exemption from the registration requirements of the U.S. Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States. Terms used in these “ Transfer Restrictions ” that are defined in Regulation S under the U.S. Securities Act are used herein as defined therein. Each purchaser of the Offering Shares offered outside the United States pursuant to Regulation S under the U.S. Securities Act will be deemed to have represented, agreed and acknowledged that the purchaser is acquiring such Offering Shares in an offshore transaction in accordance with Rule 903 or Rule 904 of Regulation S. General In addition, each prospective purchaser of Offering Shares, by its acceptance thereof, will be deemed to have acknowledged, represented to and agreed with our Company, the Vendors and the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager as follows: 1. That none of our Company, the Vendors and the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager or any person representing our Company, the Vendors or the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager has made any representation or provided any information to it with respect to our Company, the Vendors or the Offering, other than the information contained or incorporated by reference in this offering document, which document has been delivered to it and upon which it is relying in making its investment decision with respect to the Offering Shares; and it has had access to such financial and other information concerning our Company and the Offering Shares as it has deemed necessary in connection with its decision to purchase the Offering Shares. That our Company, the Vendors and the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager and others will rely upon the truth and accuracy of the acknowledgments, representations and agreements contained under this section of this offering document entitled “ Transfer Restrictions ”, and such prospective purchaser agrees that, if any of the acknowledgments, representations or agreements deemed to have been made by it through its purchase of the Offering Shares are no longer accurate, it shall promptly notify our Company, the Vendors and the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager; and if it is acquiring any Offering Shares as fiduciary or agent for one or more investor accounts, it represents that it has sole investment discretion with respect to each such account and that it has full power to make the foregoing acknowledgments, representations and agreements on behalf of each such account.

2.

268

CLEARANCE AND SETTLEMENT
A letter of eligibility has been obtained from the SGX-ST for the listing and quotation of our Shares on the Main Board of the SGX-ST. For the purpose of trading on the SGX-ST, a board lot for our Shares will comprise 1,000 Shares. Upon listing and quotation on the SGX-ST, our Shares will be traded under the book-entry (scripless) settlement system of the CDP, and all dealings in and transactions of our Shares through the SGX-ST will be effected in accordance with the terms and conditions for the operations of securities accounts with the CDP, as amended from time to time. The CDP, a wholly-owned subsidiary of the Singapore Exchange Limited, is incorporated under the laws of Singapore and acts as a depository and clearing organization. The CDP holds securities for its account holders and facilitates the clearance and settlement of securities transactions between account holders through electronic book-entry changes in the securities accounts maintained by such account holders with the CDP. Our Shares will be registered in the name of the CDP or its nominees and held by the CDP for and on behalf of persons who maintain, either directly or through depository agents, securities accounts with the CDP. Persons named as direct securities account holders and depository agents in the depository register maintained by the CDP, rather than the CDP itself, will be treated, under the Cayman Islands’ Companies Law and our Articles of Association, as members of our Company in respect of the number of our Shares credited to their respective securities accounts. Persons holding our Shares in a securities account with the CDP may withdraw the number of Shares they own from the book-entry settlement system in the form of physical share certificates. Such share certificates will not, however, be valid for delivery pursuant to trades transacted on the SGX-ST, although they will be prima facie evidence of title and may be transferred in accordance with our Articles of Association. A fee of S$10.00 for each withdrawal of 1,000 Shares or less and a fee of S$25.00 for each withdrawal of more than 1,000 Shares will be payable to the CDP upon withdrawing our Shares from the book-entry settlement system and obtaining physical share certificates. In addition, a fee of S$2.00 (or such other amount as our Directors may decide) will be payable to our Share Registrar for each share certificate issued, and stamp duty of S$10.00 is also payable where our Shares are withdrawn in the name of the person withdrawing our Shares, or S$0.20 per S$100.00 or part thereof of the last-transacted price where our Shares are withdrawn in the name of a third party. Persons holding physical share certificates who wish to trade on the SGX-ST must deposit with the CDP their share certificates together with the duly executed and stamped instruments of transfer in favor of the CDP, and have their respective securities accounts credited with the number of our Shares deposited before they can affect the desired trades. A fee of S$20.00 is payable upon the deposit of each instrument of transfer with the CDP. The above fee may be subject to such changes as may be in accordance with the CDP’s prevailing policies or the current tax policies that may be in force in Singapore from time to time. Transactions in our Shares under the book-entry settlement system will be reflected by the seller’s securities account being debited with the number of our Shares sold and the buyer’s securities account being credited with the number of our Shares acquired. No transfer stamp duty is currently payable for the transfer of our Shares that are settled on a book-entry basis. A Singapore clearing fee for trades in our Shares on the SGX-ST is payable at the rate of 0.04% of the transaction value, subject to a maximum of S$600.00 per transaction. The clearing fee, instrument of transfer deposit fees and share withdrawal fee are subject to GST of 7.0% (or such other rate prevailing from time to time). Dealings in our Shares will be carried out in Singapore dollars and will be effected for settlement in the CDP on a scripless basis. Settlement of trades on a normal “ready” basis on the SGX-ST generally takes place on the third Market Day following the transaction date, and payment for the securities is generally settled on the following day. The CDP holds securities on behalf of investors in securities accounts. An investor may open a direct securities account with the CDP or a securities sub-account with a depository agent. A depository agent may be a member company of the SGX-ST, bank, merchant bank or trust company. 269

LEGAL MATTERS
Certain legal matters in connection with the Offering will be passed upon for us and the Vendors by Clifford Chance Pte Ltd with respect to matters of Singapore law and U.S. federal securities law, by Maples and Calder with respect to British Virgin Islands and Cayman Islands law, by Syed Ishtiaq Ahmed & Associates with respect to Bangladeshi law, by Clifford Chance with respect to Hong Kong law, by PRA Law Offices with respect to Indian law, by Vellani & Vellani with respect to Pakistani law, by Nithya Partners with respect to Sri Lankan law and by Chandler and Thong-ek Law Offices Limited with respect to Thai law. Certain legal matters in connection with the Offering will be passed upon for the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager by Allen & Overy LLP with respect to matters of Singapore law and U.S. federal securities law. Each of Clifford Chance Pte Ltd, Allen & Overy LLP, Maples and Calder, Syed Ishtiaq Ahmad & Associates, Clifford Chance, PRA Law Offices, Vellani & Vellani, Nithya Partners and Chandler and Thong-ek Law Offices Limited does not make, or purport to make, any statement in this offering document and is not aware of any statement in this offering document which purports to be based on a statement made by each of them, and it makes no representation, express or implied, regarding, and to the extent permitted by law takes no responsibility for, any statement in or omission from this offering document.

270

INDEPENDENT AUDITORS AND JOINT REPORTING ACCOUNTANTS
The combined financial statements of Sewko as at December 31, 2010, 2011 and 2012 and for each of the years then ended, included in this offering document, have been audited by KPMG Phoomchai Audit Limited and KPMG LLP (in their capacity as joint reporting accountants) as stated in their report appearing herein. With respect to the unaudited condensed combined interim financial statements for the threemonth periods ended March 31, 2012 and 2013, included in this offering document, the independent joint reporting accountants, KPMG Phoomchai Audit Limited and KPMG LLP, have reported that they applied limited procedures in accordance with professional standards for a review of such information. However, their separate report included in this offering document states that they did not audit and they do not express an opinion on these interim financial statements. Accordingly, the degree of reliance on their reports on such information should be restricted in the light of the limited nature of the procedures applied. The above reports were prepared for the purpose of inclusion in this offering document.

271

EXPERTS
The Industry Consultant, The Nielsen Company (Singapore) Pte Ltd, 47 Scotts Road, #13-00 Goldbell Towers, Singapore 228233, was responsible for preparing those sections, which were prepared for the purpose of inclusion in this offering document, attributable to each of them in “ Industry Overview ”. The Industry Consultant (or any of their respective directors, officers, employees or affiliates) may, to the extent permitted by law, own or have a position in the securities of (or options, warrants or rights with respect to, or interest in, the shares or other securities of) our Company.

272

GENERAL AND STATUTORY INFORMATION
Information on Directors and Executive Officers 1. Except as otherwise set out below, as at the date of this offering document, none of our Directors or Executive Officers has: (a) at any time during the last ten years, had an application or a petition under any bankruptcy laws of any jurisdiction filed against him or against a partnership of which he was a partner at the time when he was a partner or at any time within two years from the date he ceased to be a partner; at any time during the last ten years, had an application or a petition under any law of any jurisdiction filed against an entity (not being a partnership) of which he was a director or an equivalent person or a key executive, at the time when he was a director or an equivalent person or a key executive of that entity or at any time within two years from the date he ceased to be a director or an equivalent person or a key executive of that entity, for the winding-up or dissolution of that entity or, where that entity is the trustee of a business trust, that business trust, on the ground of insolvency; any unsatisfied judgment against him; ever been convicted of any offense, in Singapore or elsewhere, involving fraud or dishonesty, which is punishable with imprisonment, or has been the subject of any criminal proceedings (including any pending criminal proceedings of which he is aware) for such purpose; ever been convicted of any offense, in Singapore or elsewhere, involving a breach of any law or regulatory requirement that relates to the securities or futures industry in Singapore or elsewhere, or been the subject of any criminal proceedings (including any pending criminal proceedings of which he is aware) for such breach; at any time during the last ten years, had judgment entered against him in any civil proceedings in Singapore or elsewhere involving a breach of any law or regulatory requirement that relates to the securities or futures industry in Singapore or elsewhere, or a finding of fraud, misrepresentation or dishonesty on his part, or been the subject of any civil proceedings (including any pending civil proceedings of which he is aware) involving an allegation of fraud, misrepresentation or dishonesty on his part; ever been convicted in Singapore or elsewhere of any offense in connection with the formation or management of any entity or business trust; ever been disqualified from acting as a director or an equivalent person of any entity (including the trustee of a business trust), or from taking part directly or indirectly in the management of any entity or business trust; ever been the subject of any order, judgment or ruling of any court, tribunal or governmental body, permanently or temporarily enjoining him from engaging in any type of business practice or activity; ever, to his knowledge, been concerned with the management or conduct, in Singapore or elsewhere, of the affairs of: (i) any corporation which has been investigated for a breach of any law or regulatory requirement governing corporations in Singapore or elsewhere; 273

(b)

(c) (d)

(e)

(f)

(g)

(h)

(i)

(j)

(ii)

any entity (not being a corporation) which has been investigated for a breach of any law or regulatory requirement governing such entities in Singapore or elsewhere;

(iii) any business trust which has been investigated for a breach of any law or regulatory requirement governing business trusts in Singapore or elsewhere; or (iv) any entity or business trust which has been investigated for a breach of any law or regulatory requirement that relates to the securities or futures industry in Singapore or elsewhere; in connection with any matter occurring or arising during the period when he was so concerned with the entity or business trust; and (k) been the subject of any current or past investigation or disciplinary proceedings, or has been reprimanded or issued any warning, by the Authority or any other regulatory authority, exchange, professional body or government agency, whether in Singapore or elsewhere.

2.

Disclosure in relation to Rajeev Bajaj Singer India Mr. Rajeev Bajaj, our Vice President, India, was a director of Singer India from July 2005 to September 2005 and subsequently from August 2008 until the present day. Singer India was registered in May 2005 as a “Sick Company” by the BIFR. As a “Sick Company”, Singer India was subject to a routine investigation on its financial records by the Ministry of Corporate Affairs, India in 2006. Matters which were raised during such investigation relate to observations by auditors and all of them have been resolved. For further information, please see “ Business – Legal Proceedings-Singer India ”. Excise Duties Dispute In 2004, Singer India was found by the Central Excise Authorities of India to have carried on manufacturing activities by affixing motors to imported sewing machines. Excise duties had to be paid for such manufacturing activities which Singer India had not paid. A duty of INR 4,538,307 and a penalty of INR 4,538,207 were imposed on Singer India. Further, a penalty of INR 1,000,000 was imposed on the then vice-chairman and managing director (Mr. Krishan Kumar Gupta, currently serving as non-executive chairman of Singer India) and another penalty of INR 500,000 was imposed on Mr. Bajaj since their positions as principal officers of Singer India meant they were presumed to have been aware of the alleged infringement of the provisions of the Central Excise Act relating to non-payment of excise duty on goods liable for excise duty. Singer India filed an appeal on April 27, 2009 before the Custom Excise & Service Tax Appellate Tribunal (“ CESTAT ”) (the second appeal stage) and the matter is currently pending. As at the Latest Practicable Date, the duties and penalties imposed have been stayed by CESTAT. No provision has been made for payment of this penalty. Since receiving the penalty for non-compliance with the Central Excise Act, Singer India has imported sewing machines with inbuilt motors, paying excise duties as applicable, and there have not been any defaults in payment of excise duties.

274

Unpaid/Unclaimed Dividends Unpaid/unclaimed dividends (in respect of the 1996-1997 financial year) declared at the 1997 annual general meeting were transferred to the unpaid dividend account on November 7, 1997. Singer India failed to deposit the remaining unpaid amount into a government account by December 7, 2004, only doing so 17 days later on December 24, 2004. Similarly, unpaid/unclaimed dividends (in respect of the 1997-1998 financial year) declared at the 1998 annual general meeting were transferred to the unpaid dividend account on May 19, 1998, but the remaining unpaid amount was transferred 17 days late into a government account on July 6, 2005. Both of these delays were the result of administrative lapses and occurred at the time when Singer India was undergoing financial distress and entering “Sick Company” status. See “ Business – Legal Proceedings – Singer India ”. The Regional Director (Northern Region), Ministry of Corporation Affairs compounded the offenses as the unpaid dividend had already been deposited into the government account and the default was unintentional. Rajeev Bajaj, who was the company secretary at the relevant time, paid a compounding fee of INR 3,000 (approximately US$55). In 2000, Singer India formed an audit committee to review the adequacy of internal controls. Since Singer India’s failure to deposit the remaining unpaid dividends in time in 2005, there have been no other similar delays and we believe that this safeguard is sufficient to prevent such defaults from occurring in the future. Auditor Remuneration Singer India failed to fix the remuneration of the auditors pursuant to annual general meetings of Singer India held in August 2003, August 2004 and June 2005 in contravention of the relevant legislation. Singer India’s Board of Directors was authorized to fix the remuneration of the auditors pursuant to shareholders’ appointment of the auditors at the annual general meeting (“ AGM ”). The Board in their meetings held subsequent to the AGMs set the remuneration to be paid to the auditors but did not expressly pass a resolution fixing the remuneration as they should have done. The approval of the accounts contained a separate disclosure for auditors’ remuneration which Singer India considered as deemed approval, but the relevant authorities objected to this practice and called for a specific resolution, which was passed subsequently. The Director (Northern Region), Ministry of Corporation Affairs compounded the offenses as the auditor’s remuneration was fixed by the board of directors and ratified in the board meeting held on July 30, 2007. Rajeev Bajaj, who was the company secretary at the relevant time, paid the compounding fee of INR 2,000 (approximately US$37). Similar incidents to the above have not since occurred. 3. Disclosure in relation to Asoka Pieris Singer Sri Lanka Asoka Pieris, our Vice President, Sri Lanka, was the finance director of Singer (Sri Lanka) PLC (formerly Singer (Sri Lanka) Limited) in late 2007 when a consignment of ‘Singer Technologies’ brand of color televisions imported from China by Singer (Sri Lanka) PLC were seized by the Customs Department of Sri Lanka (“ Customs Department ”) for an alleged underpayment of customs duty. With regards to the valuation of imported articles, the Customs Department raised questions on the royalties which were being paid by Singer (Sri Lanka) PLC to its related overseas companies and whether the royalties should also be included for the purpose of determining the valuation for customs purposes. As the consignment remained detained despite Singer (Sri Lanka) PLC having responded to the Customs Department’s questions, Singer (Sri Lanka) PLC filed an application in the Court of Appeal of Sri Lanka for the consignment to be released. The Court of Appeal of Sri Lanka granted interim relief to Singer (Sri Lanka) PLC for the consignment to be released upon the 275

furnishing of a banker’s guarantee by Singer (Sri Lanka) PLC to the Customs Department. Final relief was requested by Singer (Sri Lanka) PLC in 2008. The Court of Appeal dismissed such application on September 3, 2013, which would enable the customs inquiry to be proceeded with. Singer (Sri Lanka) PLC intends to file an appeal at the Supreme Court of Sri Lanka against this decision. Similar incidents to the above have not since occurred. 4. Save as described in the section entitled “ Share Capital and Shareholders – Significant Changes in Percentage of Ownership of our Company – Options exercised by Gavin Walker”, no option to subscribe for shares in, or debentures of, our Company or our subsidiaries has been granted to, or was exercised by, any Director or Executive Officer within the two fiscal years preceding the date of this offering document.

Subsidiaries and Jointly-Controlled Entities 5. The details of our subsidiaries and jointly-controlled entities are set out in “ Appendix B – Our Subsidiaries, Associated Companies and Joint Venture Entities ”. None of our Independent Directors sits on the board of our principal subsidiaries based in jurisdictions outside Singapore.

6.

Share Capital 7. As at the Latest Practicable Date, there is only one class of Shares in the capital of our Company, being ordinary shares. The rights and privileges attached to our Shares are stated in the Memorandum of Association and Articles of Association of our Company. Save for the Scheme Shares, there are no founder, management, deferred or unissued shares reserved for issuance for any purpose. Substantial shareholders of our Company are not entitled to any different voting rights from the other shareholders. Save for the Over-allotment Option and as described in the Scheme, as at the Latest Practicable Date, no person has been, or has the right to be, given an option to subscribe for or purchase any securities of our Company or any of our subsidiaries. Except as disclosed below and in “ Share Capital and Shareholders ”, there were no changes in the issued and paid-up capital of our Company and our subsidiaries within the three years preceding the Latest Practicable Date.
Increase or Reduction of Paid-up Capital Reason for Increase or Reduction of Paid-up Capital

8.

9.

Date CAYMAN ISLANDS Singer Asia Limited

Initial Paid-up Capital

Resultant Paid-up Capital

2012 . . . . . . . . . . . . . . US$10,101.02 BANGLADESH Singer Bangladesh Ltd

US$65.64

New Issue

US$10,166.66

2011 . . . . . . . . . . . . . . Taka 224,386,200 Taka 168,289,600 Bonus Issue 2013 . . . . . . . . . . . . . Taka 392,675,800 Taka 98,168,950 Bonus Issue

Taka 392,675,800 Taka 490,844,750

276

Date INDIA Brand Trading (India) Private Limited

Initial Paid-up Capital

Increase or Reduction of Paid-up Capital

Reason for Increase or Reduction of Paid-up Capital

Resultant Paid-up Capital

2012 . . . . . . . . . . . . . INR 39,923,500

INR 29,923,500

In terms of the Petition for Capital Reduction sanctioned by the Delhi High Court

INR 10,000,000

PAKISTAN Singer Pakistan Ltd (1) 2010 . . . . . . . . . . . . . PKR 310,126,520 PKR 31,012,650 2011 . . . . . . . . . . . . . PKR 341,139,170 PKR 34,113,910 Issue of Bonus Shares at the rate of 10.0% Issue of Bonus Shares at the rate of 10.0% Issue of Bonus Shares at the rate of 10.0% Issue of Bonus Shares at the rate of 10.0% PKR 341,139,170 PKR 375,253,080 PKR 412,778,380 PKR 454,056,220

2012 . . . . . . . . . . . . . PKR 375,253,080 PKR 37,525,300 2013 . . . . . . . . . . . . . . PKR 412,778,380 PKR 41,277,840 SRI LANKA (2)(3)(4)(5) Singer Finance (Lanka) PLC December 22, 2010 . . . . Rs. 400,000,000 Rs. 400,000,005

Shares being allotted pursuant to an initial public offering Rights issue

Rs. 800,000,005

August 6, 2012 . . . . . . . Rs. 800,000,005 Regnis (Lanka) PLC November 7, 2012 . . . . . Rs. 100,123,470 Regnis Appliances (Pvt) Ltd February 2, 2010. . . . . . Rs. 0 December 1, 2011 . . . . . Rs. 50,000,000 Reality Lanka Limited June 28, 2011. . . . . . . . Rs. 60,000,070 THAILAND Singer Thailand

Rs. 645,333,337

Rs. 1,445,333,342

Rs. 111,068,955

Rights issue

Rs. 211,192,425

Rs. 50,000,000 Rs. 100,000,000

Initial issue of shares New issue of shares

Rs. 50,000,000 Rs. 150,000,000

Rs. 60,000,000

New issue of shares

Rs. 120,000,070

May 7, 2010 . . . . . . . . . Baht 283,500,000 Baht 13,500,000 Singer Leasing December 11, 2012 . . . . Baht 1,000,000
Notes: (1)

Cancellation of warrant

Baht 270,000,000

Baht 849,000,000 Repayment of loan to STL Baht 850,000,000

The Board of Directors of Singer Pakistan Ltd, in the board meeting held on August 31, 2012, resolved by majority to issue rights shares. However, two Directors of the Company dissented and in November 2012 filed in the High Court of Sindh at Karachi a suit in this respect against Singer Pakistan Limited, its chief executive officer and chief financial officer. The High Court has for the time being restrained the issuance of rights shares. Singer Pakistan Limited has filed its response and the matter is pending before the High Court. See section entitled “Business – Legal Proceedings-Singer Pakistan” for more information on the ongoing legal dispute of Singer Pakistan Ltd.

277

(2)

The Companies Act No. 7 of 2007 of Sri Lanka does not recognize the concept of “paid-up capital”. Instead, the said Act uses the concept of “stated capital”. In terms of Section 58 of the said Act, stated capital is defined as the total of all amounts received by the company or due and payable to the company in respect of the issue of shares and in respect of calls made on shares. On March 31, 2011, Singer (Sri Lanka) PLC effected a subdivision of shares in the ratio of 1:2 so that the number of shares in issue increased from 62,604,805 shares to 125,209,610 shares. There was no change to the stated capital resulting from such subdivision. On October 28, 2010, Singer Finance (Lanka) PLC effected a subdivision of shares in the ratio of 1:2 so that the number of shares in issue increased from 40,000,000 shares to 80,000,000 shares. There was no change to the stated capital resulting from such subdivision. In 2012, Regnis (Lanka) PLC effected a subdivision of shares in the ratio of 1:2 so that the number of shares in issue increased from 4,829,084 shares to 9,658,168 shares. There was no change to the stated capital resulting from such subdivision.

(3)

(4)

(5)

Save as disclosed under “ Share Capital and Shareholders ”, no shares in our Company or our subsidiary had been issued, were proposed to be issued, or were agreed to be issued as fully or partly paid for in cash or for a consideration other than cash, within the three years preceding the Latest Practicable Date. Save as disclosed below, no debentures of our Company or our subsidiary had been issued, were proposed to be issued, or were agreed to be issued as fully or partly paid for in cash or for a consideration other than cash, within the three years preceding the Latest Practicable Date.
Number of Units of Debentures Purpose of Issue/ Reduction Resultant Issued Debentures

Date of Issue SRI LANKA

Aggregate Consideration

Issue Price per Unit

Singer Sri Lanka
May 31, 2013 . . 10,000,000 Rated Unsecured Redeemable Debentures listed on the Colombo Stock Exchange with an option to issue up to a further 5,000,000 3,560,000 unlisted debentures 6,440,000 unlisted debentures 10,000 unlisted debentures 590,000 unlisted debentures 900,000 unlisted debentures 2,500,000 unlisted debentures 4,000,000 unlisted debentures LKR 1,000,000,000 with an option to raise a further LKR 500,000,000 LKR 100 To part finance working capital requirements 15,000,000 units

December 24 2012 . . . . . . . . October 25, 2012 . . . . . . . . July 25, 2012 . . May 10, 2012 . . May 10, 2012 . . April 30, 2012 . .

LKR 356,000,000

LKR 100

Balance sheet restructuring Balance sheet restructuring Balance sheet restructuring Balance sheet restructuring Balance sheet restructuring Balance sheet restructuring Balance sheet restructuring

3,560,000 units

LKR 644,000,000

LKR 100

6,440,000 units

LKR 1,000,000 LKR 59,000,000 LKR 90,000,000 LKR 250,000,000

LKR 100 LKR 100 LKR 100 LKR 100

10,000 units 590,000 units 900,000 units 2,500,000 units

October 1, 2010.

LKR 400,000,000

LKR 100

4,000,000 units

278

Date of Issue May 31, 2010 . .

Number of Units of Debentures 3,000,000 unlisted debentures 3,000,000 unlisted debentures

Aggregate Consideration LKR 300,000,000

Issue Price per Unit LKR 100

Purpose of Issue/ Reduction Balance sheet restructuring Balance sheet restructuring

Resultant Issued Debentures 3,000,000 units

May 31, 2010 . .

LKR 300,000,000

LKR 100

3,000,000 units

Singer Finance (Lanka) PLC
August 29, 2013 . . . . . . . . 7,500,000 rated unsecured redeemable debentures to be listed on the Colombo Stock Exchange, with an option to issue a further 5,000,000. Up to LKR 1,250,000,000 LKR 100 To support general business growth and to minimize short term funding exposures 12,500,000 units

THAILAND

Singer Thailand Public Company Limited(1)
May 11, 2012 . . 750,000 Unsubordinated unsecured debentures *Tenor 1, 2, 3 and 4 years 750,000,000 Baht 1,000 Baht For repayment of debts under the Debt Rescheduling Agreement, dated November 13, 2009, as working capital and for business expansion 600,000 units

Singer Leasing (Thailand) Co., Ltd.
May 10, 2013 . . 320,000 Senior Secured debentures guaranteed by Singer Thailand PCL *Tenor 3 years 320,000,000 Baht 1,000 Baht For repayment of debt to Singer Thailand PCL 320,000 units

Note: (1) Singer Thailand Public Company Limited had entered into the Debt Rescheduling Agreement dated November 13, 2009 (“Agreement”) with TMB Bank Public Company Limited, Krungthai Bank Public Company Limited, Bangkok Bank Public Company Limited, Kasikornbank Public Company Limited, ACL Bank Public Company Limited, CIMB Thai Bank Public Company Limited, United Overseas Bank (Thai) Public Company Limited, The Siam Commercial Bank Public Company Limited, Siam City Bank Public Company Limited and Muang Thai Life Assurance Company Limited (the “Creditors”) to reschedule of outstanding debts as at September 30, 2009 in the principal amount of Baht 1,012,102,444.54, unpaid interest of Baht 127,515.56 and default interest of Baht 4,148,179.12 whereby the Creditors agreed, among other things, to reschedule the loan repayment and interest payment. The Company’s land and buildings were mortgaged as security in favor of the Creditors. The Agreement was terminated and all debts were paid in full in October 2012. According to the letter of TMB Bank Public Company Limited who acted as the security agent for the Creditors dated October 8, 2012, the debts had been paid in full. All mortgaged properties were released in November 2012.

279

Working Capital 10. Except as disclosed under “ Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – Borrowings ”, we have, as at the Latest Practicable Date, no other borrowings or indebtedness in the nature of borrowings including bank overdrafts and liabilities under acceptances (other than normal trading credits) or acceptances credits, mortgages, charges, hire purchase commitments, guarantees or other material contingent liabilities. 11. Our Directors are of the opinion that, as at the date of lodgment of this offering document, after taking into consideration our present banking facilities and cash position, we have adequate working capital to meet our present requirements. Our Directors’ opinion takes into account the business model of our Group (where we provide consumer finance to our customers, and the cash paid by the customer is a fraction of the product cost with the remainder financed by our bank facilities), the performance of our Group, banks who continue to provide finance to support the growth of our Group, our Group’s unutilized bank facilities of US$75.5 million as at March 31, 2013 (which is more than adequate to meet the present working capital requirements of our Group), and the expectation that the banks will continue to provide financing after Sewko is listed.

Material Contracts 12. There are no contracts, not being contracts entered into in the ordinary course of business, that have been entered into by our Company and our subsidiaries within the two years preceding the date of lodgment of this offering document that are or may be material. Miscellaneous 13. No commission, discount or brokerage has been paid or other special terms granted by us within the two years preceding the Latest Practicable Date or is payable to any Director, promoter, expert, proposed Director or any other person for subscribing or agreeing to subscribe or procure subscriptions for any of our Shares or other securities or debentures. 14. No expert is employed on a contingent basis by us, or has a material interest, whether direct or indirect, in the shares of our Company or our subsidiaries, or has a material economic interest, whether direct or indirect, in our Company including an interest in the success of the Offering. 15. Except as disclosed in “Plan of Distribution – Other Relationships ”, our Company does not have any material relationship with the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager, or any other financial advisor in relation to the Offering. 16. Save as disclosed under the “ Combined Financial Statements of our Group for the Years Ended December 31, 2010, 2011 and 2012 – Subsequent Events ” found in the Notes to the combined financial statements and under the “ Unaudited Condensed Combined Interim Financial Statements for the three-month periods ended March 31, 2013 − Subsequent Events ” found in the Notes to the condensed combined interim financial statements, our Directors are not aware of any event which has occurred since March 31, 2013 and up to the Latest Practicable Date, which may have a material effect on our financial position and results.

280

Consents 17. The Hongkong and Shanghai Banking Corporation Limited, Singapore Branch as the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager, has given and has not withdrawn its written consent to the issue of this offering document with the inclusion herein of its name and references in the form and context which it appears in this offering document and to act in such capacity in relation to this offering document. 18. KPMG Phoomchai Audit Limited as the Independent Auditor has given and has not withdrawn its written consent to the issue of this offering document with the inclusion herein of its name and references in the form and context which it appears and the inclusion herein of the sections “ Appendix H – Independent Joint Reporting Accountants’ Report on the Combined Financial Statements ” and “ Appendix J – Independent Joint Reporting Accountants’ Report on the Unaudited Condensed Combined Interim Financial Statements ” in the form and context in which they appear in this offering document and to act in such capacity in relation to this offering document. KPMG LLP (in their capacity as joint reporting accountants) has given and has not withdrawn its written consent to the issue of this offering document with the inclusion herein of the sections “ Appendix H − Independent Joint Reporting Accountants’ Report on the Combined Financial Statements ”, “ Appendix J − Independent Joint Reporting Accountants’ Report on the Unaudited Condensed Combined Interim Financial Statements ”, “ Appendix L − Independent Reporting Accountants’ Report on the Pro Forma Combined Statement of Financial Position as at December 31, 2012 ” and “ Appendix N − Independent Reporting Accountants’ Report on the Pro Forma Combined Statement of Financial Position as at March 31, 2013 ” in the form and context in which they appear in this offering document and to act in such capacity in relation to this offering document. A written consent under Section 249 of the Securities and Futures Act is different from a consent filed with the SEC under Section 7 of the U.S. Securities Act, which is applicable only to transactions involving securities registered under the U.S. Securities Act. As the Shares in the International Offering have not and will not be registered under the U.S. Securities Act, KPMG Phoomchai Audit Limited and KPMG LLP not filed a consent under Section 7 of the Securities Act. 19. The Nielsen Company as the Industry Consultant has given and has not withdrawn its written consent to the issue of this offering document with the inclusion herein of its name and references in the form and context which it appears and the inclusion herein of the section “ Industry Overview ” in the form and context in which they appear in this offering document and to act in such capacity in relation to this offering document. Responsibility Statement by our Directors and the Vendors 20. Our Directors and the Vendors collectively and individually accept full responsibility for the accuracy of the information given herein and confirm after making all reasonable enquiries, that to the best of their knowledge and belief, this offering document constitutes full and true disclosure of all material facts about the Offering, our Company and its subsidiaries, and our Directors and the Vendors are not aware of any facts the omission of which would make any statements in this offering document misleading. Where information in this offering document has been extracted from published or otherwise publicly available sources or obtained from a named source, the sole responsibility of our Directors and the Vendors has been to ensure that such information has been accurately and correctly extracted from those sources and/or reproduced in this offering document in its proper form and context.

281

Documents Available for Inspection 21. Copies of the following documents may be inspected at 50 Raffles Place, #32-01, Singapore Land Tower, Singapore 048623 during normal business hours for a period of six months from the date of this offering document: (a) the Memorandum and Articles of Association of our Company which will take effect on the listing of our shares on the SGX-ST; the combined financial statements of our Company and our subsidiaries for the years ended December 31, 2010, 2011 and 2012 and the unaudited condensed combined interim financial statements of our Company and our subsidiaries for the three-month periods ended March 31, 2012 and 2013; the letters of consent referred to in paragraphs 17 to 19 above; the report referred to in paragraph 18 above; the service agreements referred to in “ Management – Service Agreements ”; and the rules of the Sewko Employee Share Option Scheme.

(b)

(c) (d) (e) (f) Sources

22. We have included the information from these sources in its proper form and context in this offering document. None of World Bank, IMF, the Central Statistical Organisation in India, Bloomberg L.P., Bangladesh Rural Electrification Board, Bangladesh Bureau of Statistics, International Energy Agency and other third party sources has provided its consent, for purposes of Section 249 of the Securities and Futures Act, to the inclusion of the information cited and attributed to it, in this offering document, and is thereby not liable for such information under Sections 253 and 254 of the Securities and Futures Act. While we, the Vendors and the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager have taken reasonable actions to ensure that the market forecasts, exchange rates or other information have been reproduced in their proper form and context, we, the Vendors, the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager or any other party have not conducted an independent review of the information or verified the accuracy of the contents of the relevant information.

282

DEFINED TERMS AND ABBREVIATIONS
10.0% Shareholder any person who directly or indirectly holds 10.0% or more of the voting shares in the Company, excluding treasury shares Shares at the Offering Price, up to an aggregate of [ ● ] solely to cover the over-allotment of the Offering Shares profit minus the gain on the disposal of ILFS the printed application forms to be used for the purposes of the Offering and which forms part of this offering document the list of applicants subscribing for Offering Shares under the Singapore Public Offer Articles of Association of Sewko Holdings Limited Association of Southeast Asian Nations automated teller machines agreement between Singer Asia and Retail Holdings to jointly engage KPMG Thailand to audit their financial statements Monetary Authority of Singapore Bankers Trust Company Board for Industrial & Financial Reconstruction Blessington Pty. Ltd Bangladesh National Party compound annual growth rate The Central Depository (Pte) Limited Custom Excise & Service Tax Appellate Tribunal Singapore Code of Corporate Governance 2012

Additional Shares

Adjusted Profit Applications Forms

Application List

Articles ASEAN ATMs Audit Agreement

Authority Bankers Trust BIFR Blessington BNP CAGR CDP CESTAT Code of Corporate Governance Company or Sewko Credit Life Cycle CSD CSE Comptroller

Sewko Holdings Limited Our step-by-step approach to managing the credit process Canteen Stores Department Colombo Stock Exchange Comptroller of Income Tax in Singapore 283

Customs Department Depositor

the customs department of Sri Lanka has the meanings ascribed to it in Section 130A of the Companies Act, Chapter 50 of Singapore has the meanings ascribed to it in Section 130A of the Companies Act, Chapter 50 of Singapore has the meanings ascribed to it in Section 130A of the Companies Act, Chapter 50 of Singapore A person holding office as a director for the time being of Sewko options granted with exercise price set at a discount to market price only granted to employees whose performance has been consistently good and/or whose future contributions to our Group will be valuable De Nederlandsche Bank N.V. earnings before interest, tax, depreciation and amortization Fraser and Neave, Limited Group Singapore Financial Reporting Standard 39 Instruments – Recognition and Measurement Financial Services and Markets Act 2000 General Oriental Investments Limited goods and services tax Household Consumer Durables High Court of Sindh at Karachi, Pakistan International Financial Reporting Standards International Leasing and Financial Services Limited The Nielsen Company (Singapore) Pte Ltd offers, agreements and options insurance arrangements entered jointly into by Singer Asia and Retail Holdings N.V. an international placement of [ ● ] Offering Shares an aggregate of [ ● ] Shares to be issued by the Company Financial

Depository Agent

Depository Register

Director

Discounted Options

DNB EBITDA F&N Group FRS 39

FSMA General Oriental GST HCD High Court IFRS ILFS Industry Consultant Instruments Insurance Agreements

International Offer Issue Shares

284

JOD Lock-Up Securities

Jamie O’Donnell’s interest in the Shares and “UCL Asia Investments Shares” KPMG Thailand and KPMG LLP KPMG Phoomchai Audit Limited September 13, 2013, which is the latest practicable date prior to the lodgment of this offering document with the Authority the listed company the commencement of dealing in the Shares The Listing Manual of the SGX-ST Liberation Tigers of Tamil Eelam A day on which the SGX-ST is open for trading of securities The Nielsen Company Noble Group Limited net tangible value original equipment manufacturer Office of Foreign Assets Control of the U.S. Department of the Treasury the offering of Offering Shares for subscription and/or purchase at the Offering Price the Vendor Shares together with the Issue Shares an over-allotment option granted to the Stabilizing Manager by each of the Vendors participants in the Scheme UOB Kay Hian Private Limited Regulation S under the Securities Act the shares in ReHo Limited owned by Retail Holdings each Member State of the European Economic Area which has implemented the Prospectus Directive Retail Holdings N.V.

KPMG KPMG Thailand Latest Practicable Date

Listco Listing Date Listing Manual LTTE Market Day Nielsen Noble Group NTA OEM OFAC

Offering

Offering Shares Over-allotment Option

Participants Public Offer Coordinator Regulation S ReHo Shares Relevant Member State

Retail Holdings

285

Retail Holdings Lock-Up Securities Retail Holdings Shares

Retail Holdings’s interests in the Shares and its ReHo Shares

the Shares in Retail Holdings owned by Stephen Goodman and three trusts which beneficiaries are Stephen Goodman’s child and grandchildren and for which Mrs. Goodman is the trustee Singer Bangladesh Limited share option scheme known as the “Sewko Employee Share Option Scheme” as described in Appendix G the aggregate number of shares to be released under the Scheme the United States Securities and Exchange Commission Securities and Exchange Commission of Pakistan Securities account or sub-account maintained by a Depositor with CDP Securities and Futures Act, Chapter 289 of Singapore Chief Executive executives Officer and other key management

SBL Scheme

Scheme Shares

SEC SECP Securities Account

Securities and Futures Act Senior Management Executives September 11 Attacks

the terrorist attacks on the United States on September 11, 2001 Singer Financial Manual Stephen Goodman and the three trusts’ respective interest in the Shares and their shares in Retail Holdings the Singapore Exchange Securities Trading Limited ReHo Limited and UCL Asia Holdings VII Limited share lending agreement dated [ ● ] 2013 the ordinary shares in the Company Companies Act, Chapter 50 of Singapore a public offer of [ ● ] Offering Shares in Singapore the Singapore Code on Take-Overs and Mergers Singer Asia Limited, being an entity formed by Retail Holdings in 2003 to hold interests in Sri Lanka, Bangladesh, Pakistan, India, Thailand

SFM SG Lock-Up Securities

SGX-ST Share Lenders Share Lending Agreement Shares Singapore Companies Act Singapore Public Offer Singapore Take-Over Code Singer Asia

286

Singer Bangladesh Singer & Company Singer Distribution Agreement

Singer Bangladesh Ltd. I.M. Singer & Company a perpetual distribution agreement between Singer Asia and Singer Sourcing Ltd., a 100.0% owned indirect subsidiary of SVP Holdings Singer Finance (Lanka) PLC Singer India Limited a tailored enterprise resource planning system that, among other things, provides us with real-time business information, including sales, inventory levels and data relating to our consumer finance operations Singer Leasing (Thailand) Co. Ltd. a perpetual license agreement between Singer Asia and The Singer Company Limited S.ar.l., a 100.0% owned indirect subsidiary of SVP Holdings Ltd., the ultimate owner of the SINGER ® trademark Singer (Malaysia) Sdn Bhd Singer Pakistan Ltd. Singer (Sri Lanka) PLC Singer Thailand PLC The Hongkong and Shanghai Banking Corporation Limited, Singapore Branch

Singer Finance Singer India Singer Information System

Singer Leasing Singer License Agreement

Singer Malaysia Singer Pakistan Singer Sri Lanka Singer Thailand Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager SRA Stabilizing Manager

Singer Retail Academy The Hongkong and Shanghai Banking Corporation Limited, Singapore Branch Singer Thailand Public Company Limited Include (i) new products, financial services and other service offerings; (ii) new channels of distribution; (iii) new markets (countries of operation); and (iv) other promotional activities a stop order to the Company and the Vendors, directing that no or no further Offering Shares be allotted, issued or sold

STL Strategic Initiatives

Stop Order

287

Substantial Acquisition Law

The Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Ordinance 2002 read with and Listed Companies (Substantial Acquisition of Voting Shares and Take-overs) Regulations 2008 SVP Holdings Ltd and/or any one or more of its subsidiaries, The Singer Company Limited, The Singer Company Limited S.ar.l. and Singer Sourcing Ltd. (as the case may be) SVP Holdings Ltd Tobias Brown’s interest in the Shares and UCL Asia Investments Shares our sales force in each country comprising (i) a sales director and a credit director respectively overseeing all sales and credit efforts, (ii) national sales managers, and (iii) area managers and district managers the SINGER ® trademark equity interests in UCL Asia GP, L.P. owned by UCL Asia Investments, Ltd UCL Asia Partners, L.P.’s shares in UCL Asia Holdings VII Limited UCL Asia Investments, Ltd interest in the Shares and UCL Asia GP Shares shares in UCL Asia Investments Ltd. owned by Tobias Brown UCL Asia Partners, L.P.’s interests in the Shares and the UCL Asia Holdings VII Shares the underwriting agreement among the Company, the Vendors and the Sole Global Coordinator, Bookrunner, Underwriter and Issue Manager, dated [ ● ] the United States of America United Sales (Pvt.) Ltd the United States Securities Act of 1933 an aggregate of [ ● ] shares offered by the Vendors for subscription and/or purchase ReHo Limited and UCL Asia Holdings VII Limited

SVP

SVP Holdings TB Lock-Up Securities

Territory Managers

Trademark UCL Asia GP Interest

UCL Asia Holdings VII Shares

UCL Asia Investments Lock-up Securities UCL Asia Investments Shares UCL Asia Partners Lock-Up Securities Underwriting Agreement

United States, U.S. and US USL U.S. Securities Act Vendor Shares

Vendors

288

APPENDIX A

REGULATION
I. 1. RELEVANT LAWS AND REGULATIONS – SRI LANKA CORPORATE/COMPANY Companies incorporated and operating in Sri Lanka are required to be registered and are subject to the provisions of the Companies Act No. 7 of 2007. Once a company is listed (or has a security listed) on the Colombo Stock Exchange (“ CSE ”), it comes under the purview of the Securities and Exchange Commission of Sri Lanka (“ SEC ”) and as such becomes subject to further regulations such as the Listing Rules of the CSE and the rules and regulations issued by the SEC. 2. 2.1 TAXATION Corporate Tax The Inland Revenue Act No. 10 of 2006, as amended, sets out the rules regarding the taxation of corporates. The current applicable rate of corporate tax is 28.0%. 2.2 VAT/Sales Tax VAT in Sri Lanka is charged in accordance with the Value Added Tax Act No. 14 of 2002, as amended. VAT is payable on the supply in Sri Lanka of goods and services, and on the importation of goods into Sri Lanka. Currently, the applicable rate is 12.0% and exports are generally zero-rated. A number of our products, such as computers, are VAT exempt. Companies operating in the financial sector in Sri Lanka, such as Singer Finance (Lanka) PLC, are subject to financial services VAT, which is chargeable on the supply of financial services at the rate of 12.0%. Unlike conventional VAT, however, financial services VAT is not payable on the basis of turnover but on a value addition basis. 2.3 Nation Building Tax The Nation Building Tax Act No. 9 of 2009, as amended, imposes a National Building Tax (“ NBT ”). NBT is payable by any person that imports any article (other than personal baggage) into Sri Lanka, carries on the business of manufacture of any article, carries on the business of providing a service of any description or carries on the business of wholesale or retail sale of any article. NBT is currently payable at the standard rate of 2.0% of the liable turnover of such person. Retail and wholesale business is chargeable with NBT on 50.0% of their liable turnover, while distributors are chargeable with NBT on 25.0% of their liable turnover. 2.4 Excise Duty Under the Excise (Special Provisions) Act, No. 13 of 1989, as amended, excise duties are charged on certain articles produced or manufactured in or imported into Sri Lanka.

A-1

2.5

Property Tax There are property taxes in Sri Lanka in the form of rates which are payable to the local authority or municipal council in the area in which such property is situated. Such rates are based on the assessed value of a property. In addition, a trade/business tax is payable where a trade or business is being carried on in a property.

2.6

Stamp Duty Stamp duty is payable on instruments such as promissory notes, share certificates and share transfer forms, as well as on documents such as land-related documents and mortgages. The applicable rate of stamp duty depends on the type of instrument. Stamp duty on transfers of land is charged on the value of the land at 3% for the first Rs. 100,000 and 4.0% for the remaining value. Gifts of land attract stamp duty of 3.0% for the first Rs.50,000 and 2.0% thereafter. Mortgages attract a stamp duty of 0.1% of the secured amount and leases are charged at 1.0% of the lease payments for the entire term, including premiums, up to a maximum term of 20 years. Stamp duty of 0.5% is payable on the share issue forms and share transfer forms which are necessary documents for valid share issues and share transfers, respectively. The rate is applied on the value of the shares issued/transferred and this may or may not be equivalent to the consideration exchanged.

2.7

Customs Duty Under the Customs Ordinance, customs duty is levied in Sri Lanka at variable rates on all goods, wares and merchandise imported into or exported out of Sri Lanka. However, several of our products such as computers, certain audio equipment, LCD televisions having screens below 32” and electromechanical domestic appliances have zero customs duties. In addition to customs duties and excise duties, there are also other taxes and levies imposed at import point which are in the nature of surcharges and cess.

2.8

Other Tax Transfer Tax Until recently, under Part VI of the Finance Act, No. 11 of 1963, a transfer tax was imposed when foreign persons, or a company whose non-Sri Lankan shareholding exceeded 25.0%, acquired immoveable property in Sri Lanka. This has now been repealed. However, the Budget Speech for 2013 indicated (i) that there would be a prohibition on foreign persons purchasing state land in Sri Lanka; and (ii) that foreign persons acquiring leasehold rights to state lands in Sri Lanka would have to pay over a tax equivalent to 100.0% of the total lease value (as determined by the Government valuer). While this has not yet come into force, several circulars have been issued to the Registrar of Lands as an interim measure. The circulars provide for a prohibition on transfers of any land (state or private) to a foreign national, a foreign company or a local company with 50.0% or more foreign shareholding, subject to some limited exceptions. One such exception, which is relevant to our companies in Sri Lanka, relates to companies with foreign shareholdings exceeding 50.0% that have been in existence for over 10 years prior to the entering into of the relevant deed of transfer. It is likely that new enactments giving statutory force to the aforesaid will be passed in the near future. A-2

Crop Insurance Levy In terms of the Finance Act No. 12 of 2013, a crop insurance levy has been imposed on banks, finance companies (such as Singer Finance (Lanka) PLC) and insurance companies. This levy is payable at the rate of 1.0% of the profit after tax of the institution and is to be remitted to the National Insurance Trust Fund Board. 3. 3.1 CUSTOMS/TRADE Imports and Exports (Control Act) The Imports and Exports (Control) Act, No. 1 of 1969, as amended, requires a license from the Controller of Imports and Exports in relation to the import or export of any goods into or out of Sri Lanka. There is provision for specified classes of goods to be exempted from this requirement. 3.2 Foreign Exchange The Government of Sri Lanka has increasingly liberalized current and capital account transactions. Current account transactions were liberalized in 1994 while regulations on capital account transactions have been gradually relaxed since 2010. The Exchange Control Department of the Central Bank of Sri Lanka exercises the exchange control function on behalf of the Government and derives its powers from the Exchange Control Act No. 24 of 1953. Authorized Dealers of foreign exchange (which are essentially licensed commercial banks) are expected to exercise appropriate due diligence to ensure that foreign exchange transactions are effected for bona fide purposes under the supervision of the Exchange Control Department. Current account transactions include merchandise exports and imports, entrepot trade, service payments and income remittances. Authorized Dealers are required to examine documentary evidence and release foreign exchange without restrictions for all international current account transactions by exercising their discretion and satisfying themselves as to the bona fides of the transaction. Capital account transactions include foreign direct investment, investments abroad by residents, foreign currency borrowings by residents, guarantees to non-residents, capital transfers to immigrants and the purchase of patent rights. With respect to these capital account transactions, the Authorized Dealers (or their customers) are expected to obtain the permission of the Exchange Control Department and/or abide by the guidelines issued by said Department. In relation to foreign direct investment, general permission has been granted by the Exchange Control Department for non-residents/foreigners to invest in securities in Sri Lanka such as shares, debentures, units of unit trusts, treasury bonds and treasury bills provided that the monies relating to such investment are remitted into Sri Lanka through a Securities Investment Account (“ SIA ”), the successor to the Share Investment External Rupee Account (“ SIERA ”) previously in place for such purpose. An SIA is an account (which may be maintained in Sri Lankan rupees or in any other designated foreign currency) that can be opened with licensed commercial banks in Sri Lanka and funds in such SIA are repatriable. All proceeds from such investments in securities (such as dividends, interests or proceeds from sale) will also need to be routed through the SIA in order for the same to be repatriated out of Sri Lanka. Where such investments have not been made through an SIA, the special permission of the Exchange Control Department would be required in order A-3

for proceeds relating to such investments to be later repatriated out of Sri Lanka. In this regard, the Central Bank of Sri Lanka very recently issued a press release stating that a mechanism has been established to grant permission on a case-by-case basis for the repatriation of returns from investments made by foreign investors in shares and business ventures in Sri Lanka, prior to the introduction of the SIERA in 1990. In 2013, the boundaries of investment categories that could be routed through the SIA account were expanded. Accordingly, even in the event that non-residents/foreigners wish to set up places of business in Sri Lanka without the requirement of investing in securities, such investment to be made into Sri Lanka must also be routed through the SIA in order for the profits and other monies relating to such investments to be repatriable. Certain thresholds of investment are applicable depending on the type of business that is proposed to be set up in Sri Lanka. Similar provisions have been made in relation to where residents wish to invest overseas in shares of foreign companies or sovereign bonds issued by foreign governments. All such investments must be made through an Outward Investment Account opened in a licensed commercial bank in Sri Lanka. Unlike foreign investment into Sri Lanka, however, in relation to which there is no applicable cap, there is a cap of US$100,000 on foreign investments by individuals whilst companies listed and unlisted on the Colombo Stock Exchange would be allowed to make investments of up to US$500,000 and US$100,000 per annum, respectively. Recent developments have also liberalized the debt financing markets. Whereas in the recent past the specific permission of the Exchange Control Department was required for borrowings from overseas, the Government has now introduced the External Commercial Borrowing Scheme (“ ECBS ”) which would be in force from January 1, 2013 to December 31, 2015. Under the ECBS, companies incorporated under Sri Lanka’s Companies Act No. 7 of 2007 (other than companies limited by guarantee and off-shore companies) have been granted permission to borrow from persons outside Sri Lanka up to a maximum of US$30 million or its equivalent in any other foreign currency, provided that the maximum amount so borrowed by a company per calendar year would be US$10 million or its equivalent in any other foreign currency. Payments made in relation to loans extended under the ECBS may also be routed through the SIA. Any company that requires borrowings and which does not fall within the above or exceeds the maximum thresholds set out above would require the prior permission of the Exchange Control Department. 4. COMPETITION The Consumer Affairs Authority Act No. 7 of 2003 (“ CAA ”) promotes effective competition in Sri Lanka and restricts any anti-competitive practice that operates against the public interest. The Consumer Affairs Authority, established under the CAA, can investigate any anti-competitive practice and make an application to the Consumer Affairs Council, which is empowered to issue an order terminating any anti-competitive practice that operates against the public interest. 5. INTELLECTUAL PROPERTY Intellectual property rights in Sri Lanka are governed by the National Intellectual Property Act No. 36 of 2003, and the National Intellectual Property Office of Sri Lanka is mandated to administer the intellectual property system in the country. The Act covers areas of intellectual property such as copyright, trademarks, industrial designs, patents, unfair competition and undisclosed information. Registration is available for trademarks, industrial designs and patents at the National Intellectual Property Office.

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6. 6.1

LABOR/PRODUCTION General Employment Laws and Regulations Sri Lanka has wide-ranging laws for the protection of employees. Such laws range from those governing the terms and conditions of employment, such as the Shop and Office (Regulation of Employment and Remuneration) Act No. 19 of 1954 and the Wages Board Ordinance, to special laws which regulate the employment of women, young persons and children, such as the Maternity Benefits Ordinance and the Employment of Women, Young Persons and Children Act No. 47 of 1956. Occupational safety and health are dealt with in the Factories Ordinance and the Workmen’s Compensation Ordinance. There are also special laws relating to employment disputes such as the Industrial Disputes Act No. 43 of 1950, as amended, and the Termination of Employment of Workmen (Special Provisions) Act No. 45 of 1971, as amended. In this regard it is especially noteworthy that Sri Lanka does not allow employees to be fired at will.

6.2

Employees’ Provident Fund/Employees’ Trust Fund Sri Lanka has a system akin to social security where employers are obligated by the Employees’ Provident Fund Act No. 15 of 1958 to contribute 12.0% of the total earnings of an employee each month to the Employees’ Provident Fund, with the employee also contributing 8.0% of his total earnings to the Fund. In terms of the Employees’ Trust Fund Act No. 46 of 1980, the employer is also required to contribute a further 3.0% of the total earnings of an employee to the Employees’ Trust Fund. These amounts are deposited in an employee’s name and are available to be drawn out when he exits the workforce in Sri Lanka.

6.3

Gratuity Under the Payment of Gratuity Act No. 12 of 1983, an employer is liable to pay a gratuity in the event that an employee is terminated from employment for any reason whatsoever after he has been employed for a period of five years or more. The amount payable is half of the last drawn monthly salary of the employee per year of employment with the employer.

6.4

Factories Ordinance The Factories Ordinance was enacted to provide for the safety and welfare of workers in factories. The Factories Ordinance stipulates substantial health and safety requirements, and also provides for the notification and investigation of accidents or industrial diseases, the registration of factories and the approval of factory buildings by the Chief Factory Inspecting Engineer or the District Factory Inspecting Engineer.

6.5

Sale of Goods Ordinance The principal activities carried out by our companies in Sri Lanka include the sale and supply of goods and services. The Sale of Goods Ordinance provides for terms to be implied into sales contracts regarding the seller’s right to sell the goods, the buyer’s right to quiet possession of the goods, conditions relating to the quality and fitness of the goods and the fact that goods sold by description should match that description. Similar terms are also implied into contracts through the provisions in the CAA, in relation to the supply of goods or the provision of services by any person in the course of business to a consumer.

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6.6

Unfair Contract Terms Act No. 26 of 1997 The Unfair Contract Terms Act No. 26 of 1997 operates to restrict the ability of persons to avoid liability for negligence and breach of contract. This protects consumers and prevents sellers from excluding liability in relation to breaches of the implied conditions referred to above.

6.7

Consumer Affairs Authority Act No. 09 of 2003 The CAA is the main legislation in Sri Lanka for the protection of consumers from unfair commercial practices of companies. The Consumer Affairs Authority has the objective of protecting consumers against the marketing of goods or the provision of services which are hazardous to the life or property of consumers, protecting consumers against unfair trade practices, ensuring that consumers have adequate access to goods and services at competitive prices and redressing unfair trade practices, restrictive trade practices or any other forms of exploitation of consumers by traders. The CAA also enables consumers to make complaints to the Consumer Affairs Authority, which investigates claims. The Consumer Affairs Authority has been given the power to issue general directions to manufacturers or traders regarding labeling, price marking, packaging, sale or manufacture of any goods, as well as special directions to any class of manufacturers or traders specifying when and where such goods may be sold. The Consumer Affairs Authority also has the power to determine specific standards and specifications relating to the production, manufacture, supply, storage, transportation and sale of any goods or the supply of any services. Breaching these regulations is an offense. For example, as is relevant to Singer (Sri Lanka) PLC, regulations have been issued directing all manufactures, traders and importers of electrical and/or electronic items to provide a minimum warranty period of six months from the date of sale or transfer of such item to the relevant purchaser.

6.8

Hire Purchase Contracts Hire purchase contracts are governed by the Consumer Credit Act No. 29 of 1982, as amended (“ CCA ”). Certain of our companies in Sri Lanka are involved in assisting their customers in financing the purchase of products by way of entering into hire purchase contracts. The CCA sets out the requirements applicable to the formation of hire purchase contracts and the rights and duties of the hirer and owner, respectively. The CCA also provides for limitations on the charges applicable to hire purchase contracts and governs the method of recovery of the possession of such goods by the owner.

6.9

Environmental Laws The main environmental laws applicable in Sri Lanka are contained in the National Environmental Act No. 47 of 1980, as amended (“ NEA ”), read together with the regulations published thereunder. The NEA provides for the protection of the waters, atmosphere, soil and surface land of Sri Lanka from pollution. Further regulations have been published under the NEA relating to areas such as waste management, noise pollution and ozone-depleting materials. There is provision for specified activities which cause pollution to be carried out upon obtaining an Environmental Protection License from the Central Environmental Authority.

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7. 7.1

COUNTRY SPECIFIC Accounting and Auditing Standards Act No. 15 of 1995 The Sri Lanka Accounting and Auditing Standards Act No. 15 of 1995 and its regulations have defined certain enterprises as “ Specified Business Enterprises ”, which includes listed companies, leasing companies, finance companies, public corporations engaged in the sale of goods or the provision of services, and companies having a turnover in excess of Rs. 500 million, shareholders’ equity in excess of Rs. 100 million, gross assets in excess of Rs. 300 million, bank/financial liabilities in excess of Rs. 100 million or over 1,000 employees. Specified Business Enterprises are required to prepare financial statements in compliance with Sri Lanka Accounting Standards and to take all necessary measures to ensure that the financial statements are audited in accordance with Sri Lanka Auditing Standards to present a true and fair view of the financial performance and financial position of such an enterprise. Specified Business Enterprises are also required to have their financial statements audited by a member of the Institute of Chartered Accountants of Sri Lanka and to submit annual audited financial statements to the Sri Lanka Accounting and Auditing Standards Monitoring Board.

7.2

Registration of Documents Ordinance and the Registration of Title Act No. 21 of 1998 Under the Registration of Documents Ordinance, land-related documents such as deeds of transfer or lease agreements require registration at the land registry in which the relevant land is situated, in order for such documents to get priority, although title or rights to the land would not be extinguished by lack of registration. Sri Lanka is moving towards registration by title with the enactment of the Registration of Title Act No. 21 of 1998. The Registration of Title Act is currently being enforced in stages and is in operation in specified areas of Sri Lanka.

7.3

Finance Business Act No. 42 of 2011 and the Finance Leasing Act No. 46 of 2000 Singer Finance (Lanka) PLC, being a registered finance company and a registered finance leasing establishment, operates in a regulated industry and is subject to the supervision of the Central Bank of Sri Lanka, the provisions of the Finance Business Act No. 42 of 2011 (“ FBA ”) and the provisions of the Finance Leasing Act No. 46 of 2000, as amended (“ FLA ”). No person is entitled to operate a finance business or finance leasing business unless such person has been registered under the FBA and/or FLA, respectively. The Department of Supervision of Non-Bank Financial Institutions of the Central Bank of Sri Lanka acts in a supervisory/monitoring role and, together with the Monetary Board, issues directions, notices and guidelines to registered finance companies and registered finance leasing establishments in terms of the FBA and FLA, respectively. Such directions, notices and guidelines are issued in areas such as minimum capital requirements, capital adequacy framework, liquidity of assets, single borrower limits, interest rate caps on deposits, corporate governance and the write-offs/provisions for loans and bad debts.

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II. 1. 1.1

RELEVANT LAWS AND REGULATIONS – BANGLADESH CORPORATE/COMPANY Securities and Exchange Commission Ordinance 1969 and Securities and Exchange Commission Act 1993 The Securities and Exchange Ordinance 1969 and the Securities and Exchange Commission Act 1993 regulate listed and non-listed companies in Bangladesh. The Securities Exchange Commission (the “ SEC ”) issues listed companies with Guidelines for Corporate Governance and the Bangladesh Stock Exchanges has issued specific regulations for listed companies, such as insider trading provisions. These regulations and rules aim to ensure transparency, disclosure, market discipline and the orderly advancement of the market.

1.2

Companies Act 1994 The Companies Act 1994 requires continuing compliance in areas such as the holding of board and shareholder meetings, the filing of annual and other periodic returns regarding directors, special and extraordinary resolutions, share transfer, maintenance of books, accounts and registers, and the issue of capital. The Act stipulates a number of compliance requirements such as holding an annual general meeting at least once a year and four board meetings per year, keeping a share register and a register of members, preparing and filing an annual balance sheet and updating the books. It also prescribes penalties for delays and failures in complying with numerous requirements. Further, the Act establishes the office of the Registrar of Joint Stock Companies and Firms which acts as a registrar for limited companies, trade organizations, societies and partnership firms.

1.3

Contract Act 1872 The Contract Act 1872 was enacted to “define and amend certain parts of the law relating to contracts” but does not attempt to completely codify the law relating to contracts. The Act deals with areas such as the making of valid agreements or contracts, performance, parties to such performance, quasi-contracts, breach of contract and its consequences, indemnity, guarantee, bailment, agency and the effect of contracts through agency. The Act does not specify rights; instead it consists of a number of limiting principles under which the parties may create rights and duties for themselves.

2. 2.1

TAXATION Corporate Tax Publicly traded companies (companies listed with any stock exchanges in Bangladesh, other than companies in certain industries) are taxed at a rate of 27.5%. If a publicly traded company declares or pays a dividend which is more than 20.0% of the company’s capital, then a rebate of 10.0% of the tax payable is available. If a publicly traded company declares or pays a dividend at less than 10.0% of capital, or fails to pay a dividend within 60 days from the date of declaration, as specified by the SEC, then a tax rate of 37.5% will be applicable.

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2.2

Income Tax The Income Tax Ordinance 1984 (“ ITO ”) provides for the assessment and levy of tax on income. Under Section 18 of the ITO, all income deemed to have accrued or arisen in Bangladesh is subject to income tax. Section 44 of the ITO provides for exemptions to and allowances for certain income. Under Section 75 of the ITO, all assesses are required to file returns by a specified date. After filing, if the Deputy Commissioner of Taxes (the “ DCT ”) (the officer primarily charged with assessing income to tax) finds any errors or omissions, he may require the assessee to file a revised return with the requisition of further documents. Under Section 83 of the ITO, the DCT may also require the assessee to appear and produce any evidence in support of the return. Under Section 84 of the ITO, where the DCT feels that the assessee has failed to produce all required documents, he can use his best judgment to determine the income tax payable, which can lead to arbitrary decisions. Under Section 93 of the ITO, the DCT can serve a notice for assessment where income has escaped assessment. Orders of the DCT can be appealed to the Appellate Commissioner and then to the Appellate Tribunal whose decision may finally be referred to the High Court Division. Under Section 144 of the ITO, the Government may enter into an agreement with the Government of any other country for the avoidance of double taxation and the prevention of fiscal evasion with respect to income tax. The Government of Bangladesh has entered into Double Taxation Treaties with more than 26 countries.

2.3

VAT/Sales Tax Under the Value Added Tax Act 1991 (“ VAT Act ”), VAT is payable at a rate of 15.0% on imported goods, goods manufactured in Bangladesh, and services provided by a service provider or distributor. The value of a good or service to be taxed is usually determined by the National Board of Revenue by notification. All distributors, service providers, importers and exporters must register with the VAT authority under the VAT Act, and separate registrations are required for a person carrying on business in two or more places even though the same company is carrying out the business. There is a provision in the VAT Act for imposition of a supplementary duty on goods. Originally, there were three specific grounds on which such supplementary duty could be imposed, i.e., where the goods were socially undesirable, luxury items or non-essential items. The calculation of VAT, “primary” duty and supplementary duty may lead to miscalculation and appeals. Any order by the VAT commissioner may be appealed to the VAT Appellate Tribunal and finally to the Supreme Court.

2.4

Other Tax Capital Gains Tax on Sale of Shares of Listed Companies The capital gains of companies, firms and sponsor shareholders from the transfer of stocks and shares of public limited companies listed on the stock exchange (except listed government securities) are taxed at 10.0%.

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3. 3.1

CUSTOMS/TRADE Customs The Customs Act 1969 (“ Customs Act ”) and the VAT Act established the powers of the Customs Department, including the assessment and collection of customs duty, VAT, supplementary duty, regulatory duty and advance income tax. The Customs Act and the Import and Export (Control) Act 1950 are important to private sector investment. The Customs Act sets out goods which are dutiable and the rate at which the duty is charged, and provides for the procedures for import and export of goods and the collection of duties thereon. It provides for the valuation of goods for the purpose of assessing of duties, imports, exports, the warehousing of goods under bond, and also for penalties for breach of these provisions. Customs clearance for an export takes approximately three to five working days, as does import clearance. In order to berth at the Chittagong port, incoming and outgoing vessels have to fill out a total of 40 forms, whereas other ports around the world require only seven. In airport customs in Bangladesh, an importer, exporter or cargo and freight agent must obtain 43 permissions to release consignments.

3.2

Foreign Exchange The Foreign Exchange Regulation Act 1947 (“ FERA ”) regulates payments and dealings in foreign exchange and securities, and the import and export of currency and bullion. The Guidelines for Foreign Exchange Transactions (“ FET Guidelines ”) have been published by the Bangladesh Bank to summarize instructions issued under the FERA, as well as the prudential instructions issued by the Bangladesh Bank to be followed by authorized dealers in foreign currency in their day-to-day foreign exchange transactions. The FET Guidelines are to be read in conjunction with other instructions, subsequent amendments and modifications issued from time to time. The FERA also provides that no person in or resident of Bangladesh may, without the general or special permission of the Bangladesh Bank, make any payment to, or for the credit of, any person resident outside Bangladesh. Details regarding general or special permission and provisions in relation to letters of credit, payments of dividends to non-resident shareholders and other such forms of payments are given in the FET Guidelines. The guidelines for foreign exchange transactions published by Bangladesh Bank provide that credit facilities to “foreign owned and controlled companies” require prior approval of Bangladesh Bank. However, general authorization (or exemption) is granted to banks for extending working capital loans to foreign owned and controlled companies.

3.3

Foreign Trade 3.3.1 Import and Export (Control) Act 1950 The government may publish an Order prohibiting, restricting or otherwise controlling goods being imported or exported into Bangladesh or elsewhere. The office of the Chief Controller of Imports and Exports also issues Import Policy Orders, such as the Import Policy Order 2009-2012, and public notices. No person may commercially import any goods unless he is registered with the Chief Controller of Import and Export (“ CCI&E ”) and obtains an Import Registration Certificate

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pursuant to the Importers, Exporters and Indentors (Registration) Order 1981. Unless otherwise specified, all imports must be made by opening an irrevocable power of credit with a local bank. 3.3.2 The Foreign Private Investment (Promotion and Protection) Act 1980 This Act includes a guarantee of fair and equitable treatment for foreign private investment. The laws of Bangladesh permit foreign investment and ownership in all sectors except for areas such as arms, ammunition and other defense equipment. 4. 4.1 COMPETITION Competition Law Act 2012 The purpose of the Competition Law Act 2012 is to prevent, control and eradicate collusion, monopoly and oligopoly, abuse of dominant position, and other anti-competitive practices in the market and to encourage and ensure a competitive business environment to promote the economic development of Bangladesh. Section 15(2) of the act provides that any agreement, decision or action in relation to individuals or organizations dealing with goods and services shall be considered anticompetitive if it: (a) directly or indirectly determines the purchase or selling price, or results in bid rigging or other fraudulent practices; limits or controls the organizations responsible for production, supply, markets, technical development, etc.; or shares the market by way of allocating a particular geographical area, type of good or customer group.

(b)

(c)

Section 16 of the act sets out certain factors that should be considered in determining whether a business organization has abused its dominant position, including: (a) the direct or indirect imposition of unfair or discriminatory prices or purchase conditions with respect to buying/selling of goods or the setting of an artificial predatory price; the creation of obstacles that limit or restrict the production of goods and technical and scientific developments of the market or organization; practices which create any barrier for other businesses to access the market, or the imposition of acceptance of supplementary obligations at the time of purchase; or the use of a dominant position in one market to enter into or protect another related market.

(b)

(c)

(d)

4.2

Consumer Protection Act 2009 The Consumer Protection Act 2009 (“ CP Act ”) provides for the protection of consumer rights and interests. Under the CP Act, acts that oppose and violate consumers’ rights include not preserving, displaying or showing the price list of services, providing any service at a price higher than the price specified under any law or regulation, deceiving the customer by deceptive or false advertisement with the objective of selling any service, not A-11

selling or supplying properly the assured services in exchange for the specified price, conducting work that endangers the life and safety of service receiver, and bringing about a loss of money, health or life of the service receiver through negligence. If any person or organization violates consumers’ rights under the CP Act, the Director General or any officer empowered by the Directorate can temporarily suspend the relevant business. The Directorate also has a surveillance role over service sectors and can impose a marketing ban on any hazardous products. 5. 5.1 INTELLECTUAL PROPERTY Patents and Designs Act 1911 The Patents and Designs Act 1911 (the “ PDA ”) provides the rules for new patent applications, the term and transmission of patents, and remedies for any infringement of patent rights. Furthermore, pursuant to Section 43(1) of the PDA, the Registrar may approve and register the application of any person claiming to be the proprietor of any new or original design not previously published in Bangladesh. 5.2 Trademarks Act 2009 The Trademarks Act 2009 (“ TA ”) provides that the proprietor of a trademark has to apply in writing to the Registrar in the prescribed manner to register a trademark. The registration of a trademark is for a period of seven years, but may be renewed from time to time. The TA provides both civil and criminal remedies in any case of infringement. No person is entitled to institute proceedings to prevent, or to recover damages for, the infringement of an unregistered trademark. A registered trademark is assignable and transmissible with or without the goodwill of the business, in respect of all or some of the goods for which that trademark is registered. 6. 6.1 LABOR/PRODUCTION Bangladesh Labour Act 2006 The Bangladesh Labour Act 2006 (“ BLA ”) applies to establishments of various types as defined in the BLA. The BLA applies to “workers”, defined in section 2(45) as “any person including an apprentice employed in an establishment or industry, either directly or indirectly or through a contractor, to do any skilled, unskilled, manual, technical, trade promotional or clerical work for hire or reward, whether the terms of employment be expressed or implied, but does not include a person employed mainly in a managerial or administrative capacity” (unofficial English translation). The BLA provides a statutory entitlement to casual, sick, annual and maternity leave which overrides any employment contract provisions. In addition, the BLA also provides entitlement to different benefits such as gratuity and provident funds. 7. 7.1 COUNTRY SPECIFIC Bangladesh Standard Testing Institute All products imported or manufactured in Bangladesh have to be registered and certified in accordance with the rules and regulations of Bangladesh Standard Testing Institute (“ BSTI ”). The importer/manufacturer is required to apply for a “Standard Mark”, referred to as the Certification Mark (“ CM ”). Mandatory CMs are required for food and agricultural products, chemical products, jute and textile products, electronic and electrical products and engineering products. BSTI approval is required to import or manufacture any these products. A-12

7.2

Sale of Goods Act 1930 The Sale of Goods Act 1930 applies to the sale of goods, sale agreements, contracts of sale, goods perishing before making of contracts, and goods perishing before sale but after agreement for sale.

III. 1. 1.1

RELEVANT LAWS AND REGULATIONS – PAKISTAN CORPORATE/COMPANY Companies Ordinance 1984 The Companies Ordinance 1984 (“ Companies Ordinance ”) aims to regulate the growth of corporate enterprises, protect investors and creditors, and promote investment and development of the economy. The Companies Ordinance governs and regulates the incorporation and registration of companies in Pakistan including the management of companies, the eligibility of potential directors, the constitution of the board of directors and the rights and obligations of directors and shareholders. Shareholders play a limited role in the operation and management of companies. The rights of shareholders include election of the board, amendments to the company’s constitutional documents, approval of extraordinary transactions and any basic issues specified in the Companies Ordinance or internal company documents.

1.2

Public Companies 1.2.1 Listing Regulations The Listing Regulations of the Pakistan Stock Exchanges (Karachi, Lahore and Islamabad) are drafted by the Securities and Exchange Commission of Pakistan (“ SECP ”) under the Securities and Exchange Ordinance 1969 and they apply to all listed companies. The Listing Regulations broadly regulate the following areas: • • • • • • • • • • • listing companies and securities; offering capital by companies to the public; prospectus, allotment, issue and transfer of shares; dividends and entitlements; annual general meetings; capital increases by companies/modarabas and allied issues; listing of subsidiary company and other matters; de-listing, suspension and defaulters; voluntary de-listing of companies; listing of companies and annual fees; and disclosure of material information that may affect the share price.

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The Code of Corporate Governance, discussed below, is also a part of the Listing Regulations. 1.2.2 The Code of Corporate Governance Initially issued by the SECP in 2002, and most recently amended in 2012, the Code of Corporate Governance is part of the Listing Regulations of each exchange and contains both mandatory and voluntary provisions that listed companies must comply with, including the following: • • • • • 1.2.3 the composition and function of the board and its committees; the responsibilities, powers and functions of the board of directors; proceedings of the meetings of the board of directors; corporate and financial reporting; and internal audit procedures.

Insider Trading Regulations regarding insider trading in Pakistan are contained in section 224 of the Companies Ordinance 1984, sections 15A and 15B of the Securities and Exchange Ordinance 1969 (the “ SEC Ordinance ”), and the Listed Companies (Prohibition of Insiders Trading) Guidelines dated March 27, 2000, issued by the SECP under the Securities and Exchange Commission of Pakistan Act 1997. The SECP Guidelines prohibit dealings on the basis of unpublished price-sensitive information which a person may have access to by virtue of his shareholding or position in the company. Any such dealing is punishable under section 15B of the SEC Ordinance. The use of unpublished price-sensitive information is a criminal offense. The SECP Guidelines apply to persons holding more than 10.0% of the shares of any listed company (besides its directors and officers) and covers selling or purchasing within a period of less than six months. The SECP has recently issued a notification requiring all listed companies to maintain and update a list of all employees who may have had access to inside information, and also requires the disclosure by listed companies of details of inside information upon the occurrence of certain price-sensitive events stated in the notification.

1.2.4

Acquisition and Takeovers The Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Ordinance 2002 and the Listed Companies (Substantial Acquisition of Voting Shares and Take-overs) Regulations 2008 (“ Substantial Acquisition Law ”) regulate the acquisition of substantial voting shareholdings and takeovers of listed companies.

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The Substantial Acquisition Law requires an acquirer to disclose his shareholding to the listed company and for the stock exchange where an acquisition of voting shares, which taken together with existing shares, would entitle the acquirer to more than 10.0% of a listed company’s voting. The Substantial Acquisition Law also requires a person acquiring more than 25.0% voting shares or control to make a public announcement of offer to acquire voting shares. The term “ acquirer ” means a person who is directly or indirectly acquiring voting shares in a target company or control of the target company by himself or through any person acting in concert. The expression “ person acting in concert ” means a person who co-operates with the acquirer to acquire voting shares or control of the target company. The term “ control ” includes the right to appoint a majority of the directors or to control the management or policy decisions, by a person individually or through others acting in concert with him, whether by virtue of shareholding, management right, shareholder agreement, voting agreement or otherwise. 1.2.5 Central Depositories Act 1997 The Central Depositories Act 1997 deals with the establishment and operation of book-entry (electronic) systems for the transfer of securities by central depository companies. The provisions of this Act override any contradictions found in anything contained in the Companies Ordinance or in any other law, charter, statute, memorandum of articles of association, or any applicable document or resolution. The Act also establishes the basis of accounts/sub-accounts in the central depository system, transfer of book-entry securities and pledging of securities within the book-entry systems. It establishes the rights, duties and obligations of the central depository companies, issuers of book-entry securities and account/subaccount holders. 2. 2.1 TAXATION Corporate Tax At present corporate tax is payable by a company in Pakistan at the rate of 34.0% of its net income. This reduced rate is only applicable for the tax year 2014, which starts from July 1, 2013 and ends on June 30, 2014. Dividend income is subject to withholding tax, which is required to be withheld at source at the rate of 10.0%. 2.2 Income Tax The Income Tax Ordinance 2001 provides a system of universal self-assessment. Every person earning a taxable income has to apply for a National Tax Number (commonly known as “ NTN ”). This unique number is used for both income and sales tax purposes. The income tax law requires deductions to be made from certain payments of withholding tax at source. These deductions are credited to the recipient of the payment, and in some cases may result in the full discharge of all income tax liability for that income. Tax is required to be withheld from payments of salary, dividends, profit on debt, payments to non-residents, payments for goods and services, income from property and prizes. Additionally, there are provisions for payment of advance tax, and tax at the time of import

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or export. In certain cases it is possible to obtain an exemption certificate, which would allow the payer to make payment without such deduction. Such certificate has to be obtained by the payee and is generally valid for a specified period of time, up to one year. 2.3 VAT/Sales Tax All manufacturers with annual turnover exceeding PKR 5 million, retailers with annual supplies exceeding PKR 5 million in value, importers, wholesalers (including dealers) and distributors are required to be registered with the Sales Tax Department. Sales tax of 17.0% is payable on goods supplied or imported into Pakistan, based on the value of the goods or, in certain cases, the retail price. Certain specified electronics, such as refrigerators and air conditioning, attract extra sales tax of 0.75% under sales tax special procedure rules. Generally, sales tax paid on purchases is offset against sales tax payable on sales. Exclusions include sales tax paid on goods acquired otherwise than as stock-in-trade. Sales tax is payable monthly. There is now no formal assessment process and all returns filed are considered accepted unless challenged by the Sales Tax Department. Various records must be retained for a minimum of six years and a sales tax invoice is required to be issued in respect of sales. For companies, sales tax registration is required with the Sales Tax Department’s regional office in the location of the registered office of the company, irrespective of where business is conducted. However, it is possible to decentralize record keeping and the filing of returns. Following the 18th constitutional amendment, the provinces are now authorized to set up revenue boards; Sindh and Punjab provinces have already set up their independent authorities for collecting sales tax on services. 2.4 Excise Tax Under the provisions of the Federal Excise Act 2005, local and imported goods and services provided or rendered in Pakistan are subject to 15.0% excise duty ad valorem. However, for goods and services specified in the First Schedule to the Federal Excise Act 2005, the applicable duty and rates are as listed. 2.5 Property Tax In the provinces of Sindh, Punjab and Khyber Pakhtunkhwa, the government may specify by notification urban areas where tax may be levied at the rate of 20.0% of the annual value of the land and buildings. Annual value is ascertained by estimating the gross annual rent at which the land or building together with its appurtenances may be let, less an allowance of 10.0% for the costs, repairs and all other expenses for maintenance. In the province of Balochistan, a 15.0% property tax is levied on the annual rental value of properties where annual rent exceeds Rs. 12,000. 2.6 Stamp Duty The Stamp Act 1899 (the “ Stamp Act ”) requires the payment of stamp duty in respect of specified instruments before execution in Pakistan, or if executed outside Pakistan by one party, then before its execution in Pakistan by the other party. In the event that an instrument is executed by both parties outside Pakistan, then the instrument is required to be stamped within three months of the receipt of the instrument in Pakistan. The term A-16

“instrument” is defined in the Stamp Act to include every document by which any right or liability is, or purports to be, created, transferred, limited, extended, extinguished or recorded. The rates of duty are set out in Schedule I to the Stamp Act, but since stamp duty is a provincial subject, the rates of stamp duty vary from province to province. Stamp duty must be paid through the purchase of stamp paper or stamps from the stamp office to make them legally admissible as evidence. Where the proper stamp duty is not paid with respect to any instrument, the Collector of Stamps is empowered to impound the instrument and the instrument may be returned only after payment of stamp duty and a penalty, which could be up to ten times the amount of the stamp duty, payable in respect of that instrument or the stamp duty deficit. 2.7 Customs Duty Under the provisions of the Customs Act 1969, goods imported into Pakistan are subject to customs duty. The custom duty payable on goods is specified in the First Schedule to the Customs Act 1969. The rate varies from item to item and product to product. However, the rates of custom duty are lower for imports of raw materials than for manufactured goods. The customs law contains elaborate provisions for the valuation of goods imported into Pakistan, which may result in enhancement of values for imports from affiliates. The customs clearance processes have recently undergone improvements and it is now possible to file bills of entry electronically. Generally, clearance through customs is handled by a clearing and forwarding agent. 3. 3.1 CUSTOMS/TRADE Customs The federal government is empowered to regulate the import and export of goods into or from Pakistan. Pursuant to this power, the federal government publishes, from time to time, import and export policy orders which set out the government’s current policy on the import and export of goods. Schedules A and B to the Import Policy Order contain a list of goods whose import is banned and those which may be imported subject to certain conditions. All goods, other than those specified, are freely importable from worldwide sources. The specified goods are classified into three basic categories: prohibited imports; restricted imports; and goods which may not be imported in old, used or second-hand condition. 3.2 Foreign Exchange The Foreign Exchange Regulation Act 1947 (the “ FERA ”) regulates payments and dealings in foreign exchange (including acknowledgment of a debt to any non-resident), the issue of securities to non-residents and the import and export of currency and bullion. The FERA generally requires the special or general permission of the State Bank of Pakistan for payments to, or on behalf of, or acknowledging a debt to, a non-resident, borrowings in Pakistan by foreign-owned or controlled companies and borrowings from abroad by Pakistani residents.

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The Foreign Exchange Manual, Eighth Edition – 2002, sets out the directions, instructions and orders issued by the State Bank of Pakistan relating to the transactions covered by the FERA. Foreign private investment needs to be made in convertible foreign currency (for example U.S. dollars) brought into Pakistan and converted into Rupees through normal banking channels which can be utilized to purchase issued shares or to subscribe for new shares in a company incorporated in Pakistan. Subject to the investment being made in foreign currency through normal banking channels (established through a proceeds realization certificate issued by the bank), the fact of the investment and the issuance of shares to the foreign investor must be recorded by a banker designated for that purpose by the State Bank of Pakistan, and it is then authorized to make remittances to the foreign shareholder in foreign currency of dividends declared and capital amounts to be repatriated (subject to appropriate certification by the auditors and the deduction of tax at source – see below). No other license, permit or approval is required. As regards disinvestment proceeds, the designated bank has the general permission of the State Bank of Pakistan to allow remittances in repatriation of amounts not exceeding the market value of shares, in the case of a listed company, or the breakup value of shares for an unlisted company. Special permission is required from the State Bank of Pakistan for the remittance of amounts exceeding those limits. The Foreign Private Investment (Promotion and Protection) Act 1976 expressly guarantees repatriation of the entire amount of capital and profits realized on investments, subject only to the foreign exchange regulations set out above. Paragraph 10 of Chapter XIV of the Foreign Exchange Manual sets out the general exemptions for remittance of any royalty or technical fee. Royalty has been defined to include a fee paid by a local firm to the foreign collaborator in consideration of a license to use the foreign manufacturer’s patent/brand name for marketing the products; and technical fee is a fee paid by the local firm to the foreign collaborator in consideration of (i) engineering and technical services, including (a) assistance on manufacturing process, testing and quality control, (b) assistance by way of making available patented process and/or secret know-how and (c) right to avail of the technical/confidential information resulting from continuous technical research and development etc.; and (ii) technical training of local personnel. A royalty or technical fee may not be remitted except with the prior permission of the State Bank of Pakistan. The State Bank of Pakistan has granted a general exemption for the remittance of royalties and technical fees by manufacturing entities for use of brands and for the provision of engineering and technical services. There is no limit on the amount or percentage of royalties or technical assistance fees which may be paid in such cases. However, in practice not all agreements providing for the payment of royalties or technical assistance fees in the manufacturing sector are registered by the State Bank of Pakistan. Although the payment of royalties is limited to five years, we understand that the State Bank of Pakistan is willing to review on a case-by-case basis any application made to them after the expiry of the initial five-year period for extension of the term for which royalty payments may be made. However, we are not aware of any example where such extension has been granted. This may partly be due to the fact that many franchises have not as yet completed their initial five years since the imposition of a royalty on the use of their brands.

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Presently, the levels of royalty allowed by the State Bank of Pakistan (although no limit has been specified in the Foreign Exchange Manual or in the government policy) in the case of consumer goods are 1.5% to 3.0% and in the case of pharmaceuticals 4.0% to 6.0%. However, recently some companies have experienced difficulty in securing increases to the rate of royalties and technical assistance fees. The process for remitting royalty and other payments is set forth in paragraph 10(iv) of Chapter XIV of the Foreign Exchange Manual. An agreement for the transfer of technology between a non-resident and a Pakistani company is required to be registered with the State Bank of Pakistan. Application for registration must be filed within 30 days of execution along with a copy of the agreement. Once registered, the Pakistani company may remit royalties, subject to deduction of withholding tax, provided the application for remittance is supported by an auditor’s certificate regarding the amount of royalties sought to be remitted. Withholding tax will apply to the remittance to the non-resident at the rate of 15.0% of the gross amount of the royalty or technical service fee. 4. 4.1 COMPETITION Competition Law The Competition Act (the “ Competition Act ”) prohibits the abuse of a dominant market position and certain agreements and deceptive marketing practices under Section 3. Abuse of dominant position arises where any practice is carried on by a person in a dominant position which prevents, restricts, reduces or distorts competition in the relevant market. Section 4 of the Competition Act prohibits and renders void any agreements or arrangements relating to fixing prices, providing for price discrimination, imposing territorial restrictions, exclusivity, tie-ins or restrictions on the sale of products of competitors or any other restriction. A provision which is considered anti-competitive may only be retained in an agreement if an exemption in respect of the particular provision is obtained from the Competition Commission under the provisions of section 5 of the Competition Act. The penalty for contravening the provisions of the Competition Act is a fine of up to PKR 75 million (approximately US$773,196) or 10.0% of the annual turnover of the entity. 5. 5.1 INTELLECTUAL PROPERTY Patents Patents are regulated by the Patents Ordinance 2000, Registered Designs Ordinance 2000 and the Patents Rules 2003. The Patents Ordinance 2000, which deals with grant of patent rights for inventions, has introduced a clear definition for a patent. Though the definition is now somewhat limited in its scope, the definition will greatly assist in the enforcement of patent rights. Also the term of a patent has been extended from 16 years to 20 years and priority has been granted in respect of applications filed in WTO member countries. 5.2 Trademarks The Trade Marks Ordinance 2001 regulates trademarks, which includes service marks, well-known marks, collective marks, domain names, unfair competition and comparative advertising. In Pakistan, registration of a mark is not compulsory and a person may use a A-19

mark without being registered. But the rights acquired by such use may be protected only by an action of passing-off or by proceeding against the infringer for criminal offense. The registration of a trademark is for an initial period of ten years, but it may be renewed from time to time by making an application on the prescribed form along with the prescribed renewal fee. 5.3 Copyright Copyright law is governed by the Copyright Ordinance 1962. To make the Ordinance work, additional rules are found in the Copyright Rules 1967. The types of works protected include original literary works, computer programs, dramatic works, musical works, artistic works including drawings, maps and photographs, cinematographic works and records. 6. 6.1 LABOR/PRODUCTION Principal Laws There is no employment law which governs employment terms for management employees. Such terms are governed by the general laws of contract and the contract of employment. The principal labor laws of Pakistan relating to employees in non-managerial roles and the terms and conditions of employment in the non-manufacturing sector are: • • West Pakistan Shops & Establishments Ordinance 1969; West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance 1968; Payment of Wages Act 1936; Minimum Wages for Unskilled Workers Ordinance 1969; Industrial Relations Act 2012; Employees’ Cost of Living (Relief) Act 1973; Employees Old-Age Benefits Act 1976; West Pakistan Maternity Benefit Ordinance 1958; West Pakistan Employees’ Social Security Ordinance 1965; Employer’s Liability Act 1938; Companies Profits (Workers’ Participation) Act 1968; and Workers’ Welfare Fund Ordinance 1971.

• • • • • • • • • • 6.2

The West Pakistan Shops & Establishments Ordinance 1969 The West Pakistan Shops & Establishments Ordinance 1969 governs the hours and other conditions of work and employment of persons employed in shops and commercial, industrial and other establishments in Pakistan.

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Every establishment, other than a one-man shop and factories employing clerical staff within the factory premises, must be registered with the Deputy Chief Inspector for the area it is situated within. 6.3 West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance 1968 The West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance 1968 (the “ Standing Orders Ordinance ”) applies to every industrial or commercial establishment where more than 20 workmen are employed, and guarantees certain rights to workmen. Workman means a person employed to do any skilled or unskilled, manual or clerical work. The Standing Orders Ordinance requires: • the terms and conditions of appointment, transfer and promotion to be provided to the worker in writing; publication of working time, holidays and paydays, and wage rates; the taking out of group insurance; and the payment of a profit bonus.

• • •

The Standing Orders Ordinance places certain restrictions on termination of employment and, where termination is for cause, a domestic inquiry must be held. It also contains special provisions relating to retrenchment. Further, the Standing Orders Ordinance sets out rules relating to provident funds. 6.4 Payment of Wages Act 1936 The Payment of Wages Act 1936 regulates the payment of wages to persons employed, either directly or indirectly, in any railway, factory, industrial or commercial establishment. The Act obligates employers to pay wages regularly in periods not exceeding one month, and to pay all outstanding dues payable at termination within two days of such termination. 6.5 Minimum Wages for Unskilled Workers Ordinance 1969 The Minimum Wages for Unskilled Workers Ordinance 1969 fixes the minimum rates of wages for unskilled workers employed in commercial and industrial establishments. The minimum wage in the District of Karachi is PKR 8,000 per month, and deductions are permitted by the employer for the provision of housing and/or transport. 6.6 Industrial Relations Act 2012 The Industrial Relations Act 2012 provides for the formation and registration of trade unions, the facilitation of relations between employers and workmen, the avoidance of and settlement of any differences or disputes arising between them, and the enforcement of rights granted to workmen. The Act applies to any establishment or industry carrying on business in more than one province in Pakistan. The Industrial Relations Act 2012 sets out the procedure for the settlement of any disputes and differences that may arise between employers and workmen or the trade unions representing such workmen.

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The Industrial Relations Act 2012 also sets up the National Industrial Relations Commission. Workers protected by the Industrial Relations Act 2012 may take their grievances to the National Industrial Relations Commission for adjudication if they are dissatisfied with the decision of their employers. 6.7 Employees’ Cost of Living (Relief) Act 1973 This Act provides for payment of cost of living allowance to employees in accordance with the rates specified in the Act. This Act applies to establishments falling under the Shops and Establishments Ordinance. 6.8 Employees Old-Age Benefits Act 1976 This Act provides for the payment of old-age benefits to persons employed in industrial, commercial and other organizations. It applies to every industry or establishment (a) where 10 or more persons are employed, (b) where less than five persons are employed if such industry or establishment voluntarily applies for the application of this Act and (c) which the federal government may by gazette notification specify. Currently, employees contribute 1.0% of their wages per month, which is deducted from their salary, and the employer contributes, in respect of each employee, 5.0% of the employee’s wages per month. 6.9 West Pakistan Maternity Benefit Ordinance 1958 The West Pakistan Maternity Benefit Ordinance 1958 guarantees maternity benefits to women working in establishments, whether industrial, commercial or otherwise. A woman will only be entitled to maternity benefits if she has been employed in an establishment for a period of not less than four months immediately preceding the day on which she delivers the child. Maternity leave of six weeks is permitted and during this period the employee is entitled to full pay. 6.10 Provincial Employees’ Social Security Ordinance 1965 The Provincial Employees’ Social Security Ordinance 1965 provides benefits to certain employees or their dependents in the event of sickness, maternity, employment injury or death. Where this law applies, the employer must make a contribution to the Employees Social Security Institution in respect of every employee. 6.11 Employer’s Liability Act 1938 This Act specifies certain defenses which may not be raised in suits for damages in respect of injuries sustained by workmen. 6.12 Companies Profits (Workers’ Participation) Act 1968 Section 3 of the Companies Profits (Workers’ Participation) Act 1968 requires that “every company to which the scheme applies” shall establish a Workers’ Participation Fund. The obligation to establish such a fund arises only when the person concerned is a “company” and the scheme set out in the Schedule to the Companies Profits (Workers’ Participation) Act applies to that company.

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If a company engaged in an industrial undertaking fulfils any one of the following conditions, then the provisions of the scheme apply: • the number of workers employed by the company at any time during a year is 50 or more; or the paid-up capital of the company as on the last day of its accounting year is PKR 2 million or more; or the value at cost of the fixed assets of the company as on the last day of its accounting year is PKR 4 million or more.

Under the provisions of the Companies Profits (Workers’ Participation) Act 1968, all workers, having completed six months of employment with the company during an accounting year, are eligible to participate in the Fund and to the benefits of the scheme set up under the Schedule to the Companies Profits (Workers’ Participation) Act 1968. 6.13 Workers’ Welfare Fund Ordinance 1971 Under section 4 of the Workers’ Welfare Fund Ordinance 1971, an industrial establishment whose total income in any year of account is PKR 500,000 or more is required to pay 2.0% of its total income assessable under the Income Tax Ordinance 2001 to the Workers’ Welfare Fund. IV. 1. RELEVANT LAWS AND REGULATIONS – INDIA CORPORATE/COMPANY The Companies Act 1956 is the law that governs companies, and certain associations’ formation, operations, management and winding up. The new Companies Bill has received the assent of the President of India and has been enacted as the Companies Act 2013. The new law would replace the Companies Act 1956. 2. 2.1 TAXATION Income Tax The Income Tax Act 1961 governs income tax and applies to corporate entities. It deals with matters relating to determination of income, transfer pricing provisions, double taxation relief and other matters. 2.2 VAT/Sales Tax The Central Sales Tax Act 1956 establishes taxes on the sale of goods in the course of inter-state trade or commerce, and for related matters. States in India have their own Value Added Tax laws. The state of Jammu and Kashmir has enacted the Jammu and Kashmir General Sales Tax Act 1962 which provides for a levy of a general tax on the sale and purchase of goods in the state and for other connected matters. 2.3 Excise Tax The Central Excise Act 1944 governs central excise duties. The Central Excise Tariff Act 1985 deals with matters relating to rates of duties to be levied under the Central Excise Act 1944.

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2.4

Property Tax Various state laws levy tax relating to ownership of property. The states usually classify immovable property based on use, such as agricultural, commercial, industrial or institutional, and levy different rates of tax.

2.5

Stamp Duty The Indian Stamp Act 1899 provides for stamp duty to be levied on various instruments. Some states in India (including Jammu and Kashmir) have their own stamp duty legislation, while other states have simply amended the rates applicable to that state under the Stamp Act. The stamp duty in relation to the lease or conveyance of immovable property is prescribed by the respective states where the property is located.

2.6

Customs Duty The Customs Act 1962 is a law to consolidate and amend the law relating to customs, and contains provisions, among other things , relating to levy and collection of customs duties. The Customs Tariff Act 1975 consolidates and amends the law relating to customs duties, and prescribes the rates of duties to be charged under the Customs Act 1962.

2.7

Service Tax The law relating to tax on services is contained in Chapter V of the Finance Act 1994 and Chapter VA of the Finance Act 2003, and provides for matters relating to the levy of tax on services provided or received by various persons, and for related matters.

2.8

Other Tax Wealth Tax The Wealth Tax Act 1957 established a wealth tax of 1.0% of net wealth after determining the value of certain assets, which applies if net wealth exceeds Rs. 3 million.

3.

CUSTOMS/TRADE The Foreign Trade (Development and Regulation) Act 1992 regulates foreign trade by facilitating imports and exports. The Central Government is empowered to make orders and announce foreign trade policy under this law.

4.

FOREIGN EXCHANGE Foreign investment in Indian securities is regulated through the industrial policy of Government of India and Foreign Exchange Management Act 1999 (“ FEMA ”). While the industrial policy prescribes the limits and the conditions subject to which foreign investment can be made in different sectors of the Indian economy, FEMA regulates the precise manner in which such investment may be made. Under the industrial policy, unless specifically restricted, foreign investment is freely permitted in all sectors of the Indian economy up to any extent and without any prior approvals, but the foreign investor is required to follow certain prescribed procedures for making such investment. The government bodies responsible for granting foreign investment approvals are the Foreign Investment Promotion Board and the Reserve Bank of India. A person may sell or draw foreign exchange to or from an authorized person if such sale or draw is a current account

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transaction. This is, however, subject to any restrictions that the Central Government may impose from time to time. Registration of capital and revenue is permitted under the current FEMA regulations for foreign investors. 5. COMPETITION The Competition Act 2002 established a commission to prevent anti-competitive practices, promote and sustain competition in markets and clear with related matters, such as anti-competitive agreements and abuse of dominance. 6. 6.1 INTELLECTUAL PROPERTY Patents The Patents Act 1970 governs patents including suits concerning infringement of patents, the powers and functions of the Controller and Appellate Board, infringement of patents, and international arrangements. 6.2 Trademarks The Trade Marks Act 1999 governs trademarks. The Act provides for the registration of trademarks for goods and services, assignment and licensing of trademarks, and the prevention of the use of fraudulent marks and infringement. The Act also establishes an Appellate Board. 6.3 Copyright The Copyright Act 1957 governs copyright and contains provisions relating to the Copyright Office and Copyright Board, copyright societies and international copyright, as well as civil and other remedies for infringement of copyright. 7. 7.1 LABOR/PRODUCTION Factories Act 1948 The Factories Act 1948 regulates the working conditions of factory workers and provides for their health, safety and welfare. 7.2 Contract Labor (Regulation and Abolition) Act 1970 The Contract Labor (Regulation and Abolition) Act 1970 regulates the use of contract labor in certain establishments. It provides for registration of the principal employer and licensing of the contractor to ensure that appropriate employment benefits are made available to contract laborers. 7.3 Employees’ Provident Funds and Miscellaneous Provisions Act 1952 The Employees’ Provident Funds and Miscellaneous Provisions Act 1952 (“ EPF Act ”) established provident funds, pension funds and deposit-linked insurance funds for the benefit of employees in factories and other establishments. Under the EPF Act, the employer and employee are required to contribute a percentage of the employee’s wages (generally 12.0%) every month to a fund to provide for deferred benefits. The state of Jammu and Kashmir has enacted the Jammu and Kashmir Employees Provident Funds and Miscellaneous Provisions Act 1961 which provides for similar provisions as the central act.

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7.4

Employees State Insurance Act 1948 The Employees State Insurance Act 1948 (“ ESI Act ”) provides benefits to employees in factories and certain other establishments in the case of sickness, maternity and employment injury and for related matters. The employer is required to contribute an amount equal to 4.75% of the employee’s wages, and the employee is required to contribute an amount equal to 1.75% of their wages. Currently, employees drawing wages less than INR 15,000 per month are covered under the ESI Act.

7.5

Minimum Wages Act 1948 Under the Minimum Wages Act 1948, the appropriate government (Central or State) may fix the minimum wage or rates of wages that are to be paid in relation to specified types of employment. Employers are required to ensure that such minimum wages are paid.

7.6

Payment of Wages Act 1936 The Payment of Wages Act 1936 applies to factories and certain other establishments, as notified by the appropriate government (Central or State) and in relation to employees drawing wages less than the limits prescribed by the Government from time to time. The Act also contains provisions relating to permitted deductions that may be made from wages.

7.7

Payment of Bonus Act 1965 The Payment of Bonus Act 1965 provides for a minimum bonus of 8.33% of a salary that may be payable even if the establishment does not earn profits, and a maximum bonus of 20.0% of the salary that may be paid. Employees drawing a salary up to INR 10,000 per month are eligible to get bonuses, even though for the purposes of calculation of bonus the maximum salary considered is limited to INR 3,500 per month.

7.8

Payment of Gratuity Act 1972 The Payment of Gratuity Act 1972 provides for a scheme for the payment of gratuity to employees who have served the employer for a continuous period of five years. Gratuity is payable at the time of resignation, retirement, superannuation, death or disablement due to accident or sickness. The maximum gratuity payable under the current law is INR 1 million.

7.9

The Maternity Benefit Act 1961 The Maternity Benefit Act 1961 was enacted to regulate the employment of women in certain establishments for certain periods before and after childbirth, and to provide for a maternity benefit and certain other benefits. The maximum period of leave with wages is 12 weeks, of which not more than six weeks shall precede the date of a woman’s expected delivery.

7.10 Industrial Employment (Standing Orders) Act 1946 The Industrial Employment (Standing Orders) Act 1946 requires employers in industrial establishments that employ a specified number of workers to formally define the conditions of employment under them, and make the conditions known to their workmen. Standing orders usually contain matters relating to the classification of workmen, hours of work and holidays, shift work, attendance, termination of employment and suspension or dismissal for misconduct.

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7.11

The Employee’s Compensation Act 1923 The Employee’s Compensation Act 1923 was framed with a view to provide compensation to workmen or their dependants, including those employed by a contractor, for partial or full disablement or death caused in the course of employment. The amount of compensation payable is linked to the monthly wages of the relevant employee, subject to caps prescribed.

7.12 Inter State Migrant Workmen (Regulation of Employment and Conditions of Service) Act 1979 The Inter State Migrant Workmen (Regulation of Employment and Conditions of Service) Act 1979 regulates the employment of inter-state migrant workmen and requires the registration of certain establishments and licenses for contractors employing workmen above the prescribed limit. 7.13 State Specific Shops and Commercial Establishments Legislations These are a number of state laws that regulate matters relating to the registration of shops and establishments, working hours, payment of overtime wages, holidays and termination of employment. 7.14 Trade Unions Act 1926 The Trade Unions Act 1926 requires the registration of trade unions and defines the law relating to registered trade unions. 7.15 Industrial Disputes Act 1947 The Industrial Disputes Act 1947 provides for the investigation and settlement of industrial disputes and applies to employees that are considered to be “workmen”. This law does not apply to employees that are principally engaged in a managerial or administrative capacity, or employees that are employed in a supervisory capacity who draw wages in excess of Rs. 10,000 per month. The Act also regulates matters relating to strikes, lock-outs, retrenchment of employees and the closure of industrial undertakings. 7.16 Environment (Protection) Act 1986 The Environment (Protection) Act 1986 aims to protect and improve the environment by empowering the Central Government to take all measures it deems necessary or expedient for that purpose and to prevent, control and abate environmental pollution. The Act sets discharge and emissions standards for pollutants and deals with the handling of hazardous substances. 7.17 Water (Prevention and Control of Pollution) Act 1974 The Water (Prevention and Control of Pollution) Act 1974 provides that no person shall establish any industry, operations or process, or any treatment and disposal system that is likely to discharge sewage or trade effluent into a stream, well, sewer, or land, without the prior consent of the State Pollution Control Board.

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7.18 Air (Prevention and Control of Pollution) Act 1981 The Air (Prevention and Control of Pollution) Act 1981 provides that no person shall, without the prior consent of the State Pollution Control Board, establish or operate any industrial plant in an air pollution control area. 7.19 The Water (Prevention and Control of Pollution) Cess Act 1977 The Water (Prevention and Control of Pollution) Cess Act 1977 imposes a cess which is payable by any person carrying on an industry consuming water or discharging effluents, calculated on the basis of the water consumed for any of the purposes specified in the Act. 8. 8.1 COUNTRY SPECIFIC THE REGISTRATION ACT 1908 The Registration Act 1908 regulates the method of public registration of documents so as to give information to people as to their legal rights and obligations regarding particular property. The Act specifies the documents that require compulsory registration, which includes a lease of immovable property for a term exceeding 12 months or reserving a yearly rent. Non-registration of a document requiring compulsory registration makes the contents of the contract inadmissible as evidence. Similar provisions have been laid down by the state of Jammu and Kasmir under the Registration Act 1977, which is applicable within the state. 8.2 Legal Metrology Act 2009 The Legal Metrology Act 2009 regulates standards of weights and measures, and trade and commerce in weights, measures and other goods which are sold or distributed by weight, measure or number. V. 1. 1.1 RELEVANT LAWS AND REGULATIONS – THAILAND CORPORATE/COMPANY Private Companies Private limited companies in Thailand are subject to the Civil and Commercial Code. All shares must be issued, and each share must be at least 25% paid up in cash or property. There is no equivalent of “authorized but unissued” shares or treasury stock. The registered capital of a Thai limited company may be increased or reduced by special resolution of the shareholders. The articles of association may include provisions for classes of shares, rights to nominate directors, greater-than-majority voting and quorum requirements, rights of preference shares and other rights of shareholders. In 2008, the use of directors’ proxies and circular board resolutions became prohibited. 1.2 Public companies Under the Public Limited Company Act 1992, only public limited companies may issue shares to the public. All companies wishing to list their shares on the Stock Exchange of Thailand (“ SET ”), must obtain approval of, and file disclosure documents with, the Office of the Securities Exchange Commission (“ SEC ”) to sell shares to the public, and then obtain SET approval to list their shares.

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The size of the public shareholding block is dealt with in the SET listing requirements. Public offerings of new shares are subject to approval under the Securities and Exchange Act which also came into force in 1992, and relevant regulations issued thereunder. Some of the features of a public limited company (as distinct from private limited companies) include no restrictions on the transfer of shares (except to satisfy statutory or policy ceilings on foreign ownership), no director’s proxies allowed, no circular board resolutions allowed, directors elected by cumulative voting (unless the articles provide otherwise), at least 50% of the directors must reside in Thailand and board meetings must be held at least once every three months. Directors’ liabilities are substantially increased. Listed companies must comply with a number of requirements as specified in the SEC’s and the SET’s regulations in relation to securities offering for sale, disclosure requirements, reporting obligations and other shareholder and/or investor protection measures. Connected transactions made between STL (or subsidiaries of STL) and the related persons, such as parent companies, must be approved by the board of directors or the shareholders as the case may be. Major acquisition or disposition of assets must also be approved by the board of directors or the shareholders. 2. 2.1 TAXATION Corporate Tax Royal Decree (No. 530) under the Revenue Code prescribes corporate income tax at a flat rate of 20% for the period from January 1, 2013 to December 31, 2014 on an accrual basis, with certain exceptions. Reduced rates may apply to certain small and medium enterprises, to certain newly listed companies and to regional headquarters offices. Usual business deductions and depreciation allowances, at rates ranging from 5% to 20%, are allowed in calculating net profits. Accelerated depreciation methods are also permitted. Withholding tax at rates of up to 15% is payable on many forms of outward remittances, such as dividends (10%), royalties (15%), professional fees (15%), service fees (3%-15%) and other forms of income paid to companies not doing business in Thailand. Interest paid to foreign banks or financial institutions is taxed at 15%, subject to reduction to 10% under double tax treaties. The payer of income listed above is required to issue a withholding tax certificate to the payee in the format prescribed by the Director-General of the Revenue Department. 2.2 Income Tax The Revenue Code also provides for personal income tax at rates ranging from 10% to 37%. 2.3 VAT/Sales Tax The Value Added Tax (“ VAT ”) in Thailand is imposed on all natural and juristic persons who sell goods, render services or import goods and services. Certain activities are exempted from VAT. The current VAT rates are 0% and 7%. The Specific Business Tax is an alternative tax levy on services which is collected on gross revenue at fixed rates. For example, the life insurance business is subject to a rate of 2.5%.

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2.4

Excise Tax Excise tax is levied on selected goods, mainly luxury goods, such as petroleum products, tobacco, liquor, beer, soft drinks, crystal glasses, perfume and cosmetic products, and passenger cars with 10 seats or less. Excise tax is computed on an ad valorem basis or at a specific rate basis, whichever is greater. All goods subject to excise tax remain subject to VAT. The excise tax is collected by the Excise Department and usually imposed at the time of import of goods or delivery of the goods from factories.

2.5

Property Tax Property tax is imposed and collected annually. Under the House and Land Tax Act B.E. 2475 (A.D. 1932), as amended, the tax is imposed on owners of houses, buildings, structures or land rented or otherwise put to commercial use. Taxable property under house and land tax includes houses not occupied by the owner, industrial and commercial buildings and land used in connection therewith. The tax rate is 12.5% of actual or assessed annual rental value of the property.

2.6

Stamp Duty Stamp duty is levied on 28 classes of instruments listed in the Stamp Duty Schedule of the Revenue Code, such as service contracts, hire of work contracts, loan contracts, share pledges, promissory notes, bills of exchange, powers of attorney, letters of credit, checks, bills of lading, memorandums of association of a limited company, articles of association of a limited company and partnership contracts. Rates vary according to classification of the transactions contained in the instrument. If the instrument is executed in Thailand, the stamp duty is due within 15 days after the execution date. If the instrument is executed outside Thailand, the stamp duty is due within 30 days after arrival of the instrument in Thailand.

2.7

Customs Duty Customs duties are governed by the Customs Tariff Decree B.E. 2530 (A.D. 1987) to conform to the Harmonized System of the Customs Cooperation Council. Tariff duties on goods are levied on an ad valorem or a specific rate basis. The goods imported by businesses are subject to rates between zero and 100%. The majority of imported articles are subject to two different taxes: tariff duty and VAT. Tariff duty is computed by multiplying the CIF value of the goods by the duty rate. The duty thus determined is added to the value of the goods determined with reference to the CIF price. Tariff duties may be lowered at the discretion of the Minister of Finance and with the approval of the Cabinet. Two exceptions to the obligation to pay customs duties apply to the importation of machinery, equipment and materials for use by oil and gas concessionaires and their contractors, and certain companies promoted by the Board of Investment.

2.8

Other Tax Sign tax is imposed on any signs that illustrate a name, brand, trade name or trademark, or signs that are intended for commercial purposes. Sign tax is calculated by the size of the sign – that is, length multiplied by width using the basis of square centimeters. Thailand has double tax treaties with over 50 countries, and these treaties provide relief from double taxation on certain forms of income.

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3. 3.1

CUSTOMS/TRADE Customs The basic laws governing customs are the Customs Law, B.E. 2469 (1926), as amended, and the Customs Tariff Decree, B.E. 2530 (1987), as amended. In addition, for importation and exportation in Thailand, the Export and Import Act, B.E. 2522 (1979) empowers the Ministry of Commerce to designate classes of goods that are subject to import and export controls, which usually take the form of permission and licensing. The government encourages exports by supporting various industries through promotions, incentives and programs to excel their competitiveness in the international market.

3.2

Foreign Exchange Thai foreign exchange controls are administered by the Bank of Thailand on behalf of the Ministry of Finance, pursuant to the Exchange Control Act, B.E. 2485 (A.D. 1942), as amended (the “ Exchange Control Act ”). The Bank of Thailand has granted commercial banks and certain other entities the authority to conduct foreign-exchange transactions as authorized agents of the Bank of Thailand. Since 1998, the Bank of Thailand has instituted measures to prevent Thai Baht speculation to restrict certain foreign exchange-related transactions by domestic financial institutions with non-residents of Thailand and to safeguard against instability and speculation in the domestic currency market. However, the easing of exchange controls may be granted from time to time as the Bank of Thailand considers appropriate to the financial circumstance. On February 29, 2008, the Bank of Thailand, among other things, (i) reduced the limit that each financial institution can borrow Thai Baht, or undertake transactions comparable to Thai Baht borrowing from non-residents without underlying trade or investment in Thailand, to Baht 10,000,000 per group of non-residents, regardless of maturities, (ii) limited the value of foreign exchangerelated transactions for underlying trade or investment activities in Thailand to not exceed the actual value of the underlying trade or investment activity and, for transactions without any underlying trade or investment activity in Thailand, to not exceed Baht 300,000,000 for certain other transactions by financial institutions, such as baht or foreign currency loans or swaps and (iii) regulated the Non-resident Baht Account (“ NRBA ”) on the meaning of “underlying”, which means the non-resident’s trade, services, lending or direct investment activities in Thailand. The inward remittance of money into Thailand for investment in securities does not require registration with the exchange control authorities. Based on the Ministerial Regulations No. 13 (B.E. 2497) issued under the Exchange Control Act dated December 3, 1954 and the Notifications of the Competent Officer on Rules and Practices Regarding Currency Exchange (amended up to No. 21) dated June 25, 2013 (the “ Notification ”), any person, excluding non-residents, short-term foreign residents, foreign embassy staff, persons with diplomatic immunity and staff of certain international organizations and persons with certain characteristics specified in the Notification, must bring foreign currency into Thailand within 360 days from the date of the transaction, and must either: (a) sell such foreign currency to an authorized financial institution located within Thailand; or

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(b)

deposit it into a foreign currency account opened with an authorized financial institution located within Thailand for which a specified form must be submitted to such authorized agent if the amount sold or deposited is at least US$50,000 (or its equivalent).

The Notification also provides that a person depositing foreign currency must prove one of the following to an authorized agency: (a) the deposit originated abroad, in which case the depositor may deposit unlimited foreign currency as requested into the foreign currency account, except the competent officer of the Bank of Thailand sets the amount (the competent officer is entitled to stipulate any amount, including on a case-by-case basis); the deposit is purchased, exchanged or borrowed from an authorized agency by a Thai resident, including the deposit originated abroad which the depositor wishes to deposit together with the deposit purchased, exchanged or borrowed from authorized agent. In this case, the depositor may deposit the foreign currency amounts in the foreign currency account. However, the amount deposited must not exceed the payment obligation and the depositor must show the evidence of payment obligation it and its affiliate have to pay those foreign currency funds outside Thailand or to an authorized agent. If the depositor cannot prove it has a payment obligation, the deposit must be placed in a separate account, and the daily balance of foreign currency in all accounts held by that depositor must not exceed US$500,000 or its equivalent; or the depositor (except for certain persons, including government organizations and Thai state enterprises including government officers working abroad) is a person who does not have a foreign exchange license; the depositor may deposit not more than US$10,000 or its equivalent in cash per day into the foreign currency account.

(b)

(c)

The outward remittance from Thailand of dividends or the proceeds of sale (including capital gain) from the transfer of shares after payment of the applicable Thai taxes or the repayment of loans, if any, may be made without the requirement to file a specified form to the relevant authorized agent if the amount is less than US$50,000 or the equivalent amount in relevant currency per remittance. As the Bank of Thailand has a policy not to allow any person to take Baht currency out of Thailand, dividends paid to a non-resident must be converted into foreign currency prior to the outward remittance from Thailand. If the amount is at least US$50,000 (or its equivalent) in the relevant currency, a specified form must be submitted to the authorized commercial bank together with documents or evidence as to the particular transaction (such as evidence of the disposal of shares). If the repatriation of capital and remittance of profits is in the form of dividends, evidence of dividend payment, such as a notice of payment, is required from the paying company. For a distribution of profit to the principal office outside Thailand, the financial statements of the recent accounting period approved by a certified auditor are required. In order to transfer money as loans to a business abroad, a number of supporting documents are required, including, among others, those showing the source of the loan and information regarding the lender. Export of share certificates or other securities certificates from Thailand does not require prior approval from an exchange control officer appointed by the Bank of Thailand. The exporter may either dispatch the certificates by mail or carry them when travelling abroad.

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On February 29, 2008, the Bank of Thailand issued Notification of the Competent Officer on Rules and Practices Regarding Currency Exchange No. 17 (“ Notification 17 ”), which establishes the criteria for the withdrawal and deposit of Baht into (i) an NRBS (e.g., for the purpose of investing in equity instruments, debt instruments and mutual fund units) and (ii) non-resident Baht accounts for other purposes (including the deposit of the repayment for investments in shares made by a non-resident) at a portion of 10% or more and the yields thereof, including payments related to such investments. Further to Notification 17, the Bank of Thailand has also issued Rules and Practices under the Measures to Prevent Thai Baht Speculation dated February 29, 2008 (the “ Measures ”). The Measures establish rules and practices for domestic financial institutions to undertake transactions involving Baht with non-residents in order to reduce volatility of the Baht resulting from speculative activities or from non-residents’ financial transactions without underlying trade or investment in Thailand. One of the measures relates to NRBA and Non-resident Baht Accounts for Securities (“ NRBS ”). Where a non-resident wishes to open an NRBS, such account is to be a current or savings account only, and the financial institution is required to monitor the outstanding balances of all NRBSs at the end of each day to ensure that such accounts do not exceed the limit of Baht 300,000,000 per non-resident. Such limitation includes balances of all NRBS opened by each non-resident with all financial institutions in Thailand, except for those approved by the Bank of Thailand on a case-by-case basis. 3.3 Foreign Trade In addition to customs duties, value added tax and excise tax are payable on many imports or exports. Foreign trade transactions are also subject to certain provisions of the exchange control law and various licensing requirements. 4. COMPETITION The Unfair Contract Terms Act 1997 applies to many types of contracts, including “Standard Form Contracts”. Under the Unfair Contract Terms Act, the terms “consumer”, “trader”, and “professional” as parties to contracts are broadly defined to accommodate the various agreements that may fall within its scope. The Unfair Contract Terms Act also provides sample contract terms that may result in a party performing or assuming a burden more than an ordinarily prudent person would normally foresee. Such contract terms would only be enforced to the extent that they are fair and reasonable. There are some specific types of contracts that are subject to the Unfair Contract Terms Act such as consumer contracts, standard form contracts, sale with right of redemption contracts, contracts in restraint of trade, contracts that limit or exclude liability, and contracts with deposit forfeiture provisions. The Trade Competition Act prohibits business operators from being in a “dominant position”, which is said to exist when one or more business operators control a certain market share which results in gaining a certain sales turnover. The exact levels of dominant market shares and sales turnover will be defined from time to time by the Commission with the Cabinet’s approval. Business operators that control a dominant position will be prohibited from certain specific activities. The Consumer Protection Act 1979, as amended in 1998, is to protect the interests of consumers.

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5. 5.1

INTELLECTUAL PROPERTY Patents Thailand is a member of the Paris Convention, the World Trade Organization (WTO) and thus the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs). Nationals of the Paris Convention and WTO member countries will receive the same protection accorded to Thai nationals. Under the Patent Act 1979, applicants must submit the application to the Department of Intellectual Property together with drawing(s) of the invention or design and the applicant’s right to the invention or design. The term of an invention patent is 20 years from the date of filing an application in Thailand, and it is not renewable. During the period of the validity of the patent, the patent holder has the exclusive right to produce, use, sell, have for sale, offer for sale and import the patented invention or design. A patent holder may assign the patent to another holder. A patent holder may grant a license to another person, subject to certain restrictions. A patent holder may not require a licensee to pay a royalty or royalties after the validity of the patent has expired. Any assignment of a patent or license contract must be in writing and officially registered with the authorities.

5.2

Trademarks The Trademark Act 2000 regulates trademarks. The Act defines a “trademark” as a symbol used in connection with goods for indicating that they are the goods of the owner of the trademark. The trademark must be “distinctive” and not iden