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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.

• • • • • •

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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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data and statistics inaccurate or misleading. we and the Sole Global Coordinator. The Industry Consultant advises that. References to persons shall include corporations. “ BT ” or “ BDT ” are to the lawful currency of the People’s Republic of Bangladesh. 10 . the Industry Consultant does not warrant or represent that such information is accurate or correct. “ Singapore dollar ” or “ Singapore cent ” are to the lawful currency of the Republic of Singapore. and references to “ Thai baht ”. which we believe to be reliable. internal surveys. industry forecasts and market research. “ LKR ”. include the plural and vice versa and words importing the masculine gender shall. Reports and industry publications generally state that the information that they contain has been obtained from sources believed to be reliable. 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. where applicable. CERTAIN DEFINED TERMS AND CONVENTIONS In this offering document. Bookrunner. officers.S. or a false or misleading statement in. references to “ US$ ” or “ U. The Industry Consultant accepts liability only to the extent of any error or omission from. “ SGD ”. or interest in. its section and information derived from its section. references to “ Pakistani rupee ” or “ PKR ” are to the lawful currency of the Islamic Republic of Pakistan. have not been independently verified. unless the context otherwise requires. In this offering document. Underwriter and Issue Manager and our and their affiliates and advisors. but that the accuracy and completeness of that information are not guaranteed. and that. “ Management’s Discussion and Analysis of Financial Condition and Results of Operations ” and “ Business ” have been accurately reproduced and. where applicable. references to “ Indian rupee ” or “ INR ” are to the lawful currency of the Republic of India. The Industry Consultant advises further that this section contains significant volumes of information which are derived from third-party sources. prospective investors should consider the risk that any of the assumptions may be incorrect or incomplete. “ Risk Factors ”. “ baht ” or “ THB ” are to the lawful currency of the Kingdom of Thailand. warrants or rights with respect to. while the Industry Consultant believes that such third-party sources are reliable. The Industry Consultant (or any of its directors. and neither the Sole Global Coordinator. The data. statistics and information under the captions “ Summary ”. references to “ Sri Lankan rupee ”. have not independently verified and make no representation regarding the accuracy and completeness of this information. the shares or other securities of) our Company. Words importing the singular shall. references to “ our Company ” are to Sewko and. The Industry Consultant is aware of. references to “ Bangladeshi taka ”. as far as we are aware and are able to ascertain from information published or provided by the Industry Consultant. the terms “ we ”. “ us ”. Although we believe the information that the Industry Consultant supplied is reliable. Underwriter and Issue Manager nor we make any representation as to the accuracy or completeness of this information. Bookrunner. include the feminine and neuter genders. the inclusion of its names and report in this offering document. Similarly. variations in any one of which may significantly affect the outcome. no facts have been omitted that would render the reproduced information. dollar ” are to the lawful currency of the United States.The Industry Consultant advises that its forecasts should be regarded as indicative assessments of possibilities rather than absolute certainties. “ our ” and “ our Group ” refer to Sewko and its subsidiaries taken as a whole. while it has made certain assumptions with careful consideration of factors known as at the Latest Practicable Date. “ SLR ” or “ Rs ” are to the lawful currency of the Socialist Republic of Sri Lanka. to the extent permitted by law. and has consented to. employees and affiliates) may. references to “ S$ ”. and that the process of making forecasts involves assumptions in respect of a considerable number of variables which are acutely sensitive to changing conditions. own or have a position in the securities of (or options. and does not accept liability for any omission or statement in any other part of this offering document.

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

FCIS Company Secretary . Company Registration Number . . . . . 12 . 80 Nawam Mawatha Colombo 2 Sri Lanka Tel: +94 11 2316316 Fax: +94 11 2423544 Singer Bangladesh Ltd (“Singer Bangladesh”) 5-B. . . Goodman (Chairman and Executive Director) Gavin John Walker (President. . . . . .CORPORATE INFORMATION Company . KY1 – 1104 Cayman Islands Tel: +1 345 9498066 Fax: +1 345 9498080 Singer (Sri Lanka) PLC (“Singer Sri Lanka”) No. . . Directors . . . . . . . . Road #126 Gulshan-1 Dhaka-1212 Bangladesh Tel: +880 2 8825864 Fax: +880 2 9858247 Principal Places of Business. Sewko Holdings Limited Stephen H. . . . . . . . . . . . . . . . . . . FCIS Hazel Chia Luang Chew. 277964 c/o Maples Corporate Services Limited PO Box 309 Ugland House Grand Cayman. . . . . . . . . . . . . . . . . . . . . . . . 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. . . Registered Office .

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

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 . 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. . . . 50 Raffles Place #32-01 Singapore Land Tower Singapore 048623 Sole Global Coordinator. Bookrunner. . The Center 99 Queen’s Road Central Hong Kong Legal Advisor to our Company as to Bangladesh Law . . . . Ltd. . . . Legal Advisor to our Company as to Singapore Law and U.S. Syed Ishtiaq Ahmed & Associates Concord Ovilash (1st Floor) House No.S. . . Underwriter and Issue Manager as to Singapore Law and U. . Federal Securities Law . . . . . . . Federal Securities Law . . . . . . . . . . Underwriter and Issue Manager.Share Registrar . . . . . . The Hongkong and Shanghai Banking Corporation Limited. . . . . . . . . . 62 14 . Singapore Branch 21 Collyer Quay #09-02 HSBC Building Singapore 049320 Public Offer Coordinator . Boardroom Corporate & Advisory Services Pte. . . . . . Bookrunner. Clifford Chance Pte Ltd 12 Marina Boulevard 25th Floor Marina Bay Financial Centre Tower 3 Singapore 018982 Legal Advisor to the Sole Global Coordinator. . . Maples and Calder 53rd Floor. Stabilizing Manager . . . . .

. . . . 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 . . . Clifford Chance 28th Floor. PRA Law Offices W-126 Ground Floor Greater Kailash II New Delhi-110 048 India Legal Advisor to our Company as to Pakistan Law . . . . KPMG Phoomchai Audit Limited Empire Tower 50th-51st Floors 195 South Sathorn Road Bangkok 10120 Thailand Mr. . . 11A Dhanmondi Dhaka-1209 Bangladesh Legal Advisor to our Company as to Hong Kong Law . . . . Jardine House One Connaught Place Hong Kong Legal Advisor to our Company as to India Law. Nithya Partners No: 97A Galle Road Colombo 03 Sri Lanka Legal Advisor to our Company as to Thai Law . Paul Flipse. . . . . . . . . . . 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 .Road No. . . . . . . . . . . . . . Partner Practicing Member of the Institute of Singapore Chartered Accountants 15 . . . . . . . . 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.

. . . 46th Floor New York. . . . The Nielsen Company (Singapore) Pte Ltd 47 Scotts Road #13-00 Goldbell Towers Singapore 228233 16 . . . . . . . NY 10022 USA Commercial Bank of Ceylon PLC No. . Industry Consultant. . The Hongkong and Shanghai Banking Corporation Limited. . 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. 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.I. . . Chundrigar Road Karachi Pakistan Krung Thai Bank Public Company Limited 10 Sukhumvit Road Kwang Klongtoey. . .Receiving Bank . . . 21. Khet Klongtoeey Bangkok 10110 Thailand Principal Bankers . . . . Singapore Branch 20 Pasir Panjang Road (East Lobby) #12-21. . . .

5 million in 2012. Haier. we operate a direct selling business with 211 direct selling depots and 2. Skyworth. quality and consumer finance. Our Adjusted EBITDA totaled US$37. we have established a strong brand identity that our customers associate with trust. consumer electronics. Our brand offering includes both house brands as well as widely recognized third-party brands. We believe that through our long-term presence in the region. 17 . including home appliances. Bangladesh and Pakistan 2. Dawlance. IT products. offering our customers a wide range of HCDs. Huawei. where consumer credit is often expensive and difficult to obtain. representing a CAGR of 22. Grundig. furniture and sewing machines. as at March 31. we have evolved into one of the most recognized HCD retail brand names in South Asia. with total installment accounts receivable of US$218.105 independent dealers across Sri Lanka. US$21. In addition.9% from 2010 to 2012. Philips. through our extensive distribution network. as at March 31. or that you should consider before deciding to invest in the Offering Shares.9 million in 2012. 2013. US$46. we have increased our retail store base by 97 stores to 909 stores. Godrej.7 million in 2011 and US$435. Prestige.5 million. including consumer finance to purchase these products. Our Adjusted Profit totaled US$13. TCL. has enabled us to realize meaningful synergies and grow our Company successfully. Videocon and Whirlpool. US$406. before making a decision to invest in the Offering Shares. we processed on average nearly one million consumer finance and financial services transactions per month. Our ability to provide customers a complementary mix of products. including Apple. In 2012. During the period from 2010 to 2012. representing a compound annual growth rate (“ CAGR ”) of 15. As at March 31. 2013. You should read this entire offering document. Samsung.3 million in 2010. Pakistan and India. we managed 679. We are the leading provider of HCD consumer credit in Sri Lanka. We have operated in each of our markets for over 100 years. Bangladesh and Pakistan 1. We offer a wide variety of credit products. Onida. Overview We are the largest retailer of household consumer durable (“ HCD ”) products in Sri Lanka. Source: The Nielsen Company. 2013.2 million in 2012. Beko. leasing facilities and group sales (offered by partnering with organizations to provide easy payment terms to their employees for purchases of our products). mobile phone reloads and acceptance of public deposits as well as extended warranties and customer protection plans. substantially all of which can be purchased through consumer credit which we provide. Bangladesh. our independent dealer network by over 600 independent dealers and the number of direct selling depots by 17. including hire purchase. Since the SINGER ® brand was first established in 1851 with the creation of the Singer company. We have 922 stores and 2. In Thailand.6% from 2010 to 2012. inward remittances.5 million in 2011 and US$56. we provide transaction-based financial services such as bill payments.724 sales canvassers.3 million in 2010.2 million in 2010. some of which are under exclusive distribution arrangements.6 million in 2011 and US$26. 1 2 Source: The Nielsen Company. Tefal. services and brands. Hitachi. including our financial statements and related notes and the section entitled “Risk Factors”.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.895 active credit accounts. Our revenue totaled US$326. and high-quality customer service.

Dawlance. Bangladesh.105 independent dealers across Sri Lanka. We have focused on selling high-quality house brand and third-party products. our multi-format retail stores cater to evolving customer preferences and local market conditions. 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. sewing machines and other products. 2013. Cambodia and Laos. We believe that the third-party brands we offer increase our brand image as a retailer and provide our customers with a wider selection. Pakistan and India. some of which we manufacture or assemble domestically where there are local efficiencies or tax and duty incentives. as at March 31. we offer a broad range of widely recognized third-party brands. Hitachi. Onida. Tefal. 18 . TCL. furniture. Internationally recognized and domestically established SINGER ® brand The SINGER ® brand was first established in 1851 with the creation of the Singer company. 2013. Our extensive network services metropolitan. We intend to grow our business and increase profitability by expanding and enhancing our distribution platform. our online retail portal has begun to tap into the nascent but growing online retail market.724 sales canvassers. increasing and enhancing our online presence and penetrating additional markets. Videocon and Whirlpool. Godrej. introducing new brands and products. consumer electronics.We believe that our core markets of Sri Lanka. In addition. Bangladesh. 2013.422 store staff and 2. we offer a wide range of HCD products. urban and rural areas. as at March 31. IT products. Philips. including recognition as the “ Most Popular Brand in Sri Lanka ” every year since 2005.724 canvassers. 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. comprising home appliances. 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. Pakistan. some of which are under exclusive distribution arrangements. In Thailand. Samsung. as evidenced by the numerous accolades and awards we have received. with 922 stores and 2. Prestige. Grundig. 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. as at March 31. Haier. we operate a direct selling business with 211 direct selling depots and 2. Through our extensive distribution network. such as the ASEAN countries of Myanmar. Huawei. the internationally-recognized sewing machine brand that has evolved into one of the most recognized HCD retail brand names in South Asia. providing customers with wide access to products and services. Beko. Our distribution network is supported by a highly experienced and professional sales force of store managers with 2. In addition to the SINGER ® and other house brands. 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. 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. expanding our consumer credit and financial services offerings. We also offer customers house-branded products. Skyworth. 1 Source: The Nielsen Company. Bangladesh and Pakistan 1. In addition. including Apple.

In addition. As at March 31. as well as extended warranties and customer protection plans. Since our establishment.895 active credit accounts with total installment accounts receivable of US$218. Integrated consumer credit and financial services operations with strong credit control We are the leading provider of HCD consumer credit in Sri Lanka. This will ensure that we hold the exclusive right to the use of our brand in our current countries of operations. 2013. 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. where consumer credit is often expensive and difficult to obtain. We continue to provide our customers with installment and other credit services. remain lower than those in more developed markets. 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). 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. while increasing. thus maintaining a long tradition of enabling our customers to have access to HCD products. the wide range of consumer finance products that make our HCDs accessible to a broad base of consumers.5 million. the high quality of our HCD products. while providing us the opportunity to expand into other Asian markets. 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. We will continue to maximize our internationally recognized and domestically established SINGER ® brand in order to cross-sell our various products and services. we managed a total of 679. most of our customers do not have access to readily-available capital for upfront payment for products. except in respect of sewing-related products and ironing presses for which we have an exclusive perpetual distribution agreement. We are introducing additional financial products such as Singer credit cards. We offer a wide variety of credit products. we provide leasing facilities. our high-quality after-sales customer service and our commitment to improving the local communities where we operate. among others. where disposable income levels. including hire purchase and group sales for substantially all of our HCD products. Beginning in 1856. quality and consumer finance.We believe that we have established a strong brand identity that our customers associate with trust. we processed an average of nearly one million consumer finance and financial services transactions each month. We operate in emerging markets. penetrate new markets and segments and grow our customer base and customer loyalty. mobile phone reloads and acceptance of public deposits. Our target markets’ financing needs have typically been under-served by the traditional financial sector. remittances from abroad. the Singer company pioneered the use of installment payment plans to enable customers to afford and immediately purchase a sewing machine. transaction-based financial services such as bill payments. In 2012. 19 . Our comprehensive credit control system monitors receivables performance on a real-time basis. 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. Bangladesh and Pakistan 1. 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. mobile wallets and branchless banking. We believe we will continue to benefit from this market position as the established brand loyalty of consumers to incumbent players. We believe these positive. Combined with our in-depth knowledge of the retail industry. emotional tie-ins result from our long-term presence in the regions in which we operate.

better collection rates and an improvement in the quality of the customer service experience we provide. collections. They have a deep understanding of regional and local markets. Further. We conduct regular product clinics in selected outlets on a rotational basis. service centers and franchise service agents provide in-person assistance relating to the use of our HCD products. increasing third-party brands and introducing new products and service lines. whereby experienced service agents answer customer queries. delivering growth even during economic downturns such as the recent global financial crisis and Eurozone debt crisis. competitors and customers. Further. Store managers and staff undergo product knowledge training by the SRA. such as extended warranties. store administration and staff morale.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. We continuously seek to improve our overall customer experience and improve operational efficiency and customer loyalty. 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. 2013. In addition. to drive and reward operational excellence. which has successfully increased our revenue and profits. motivate and develop our employees. a program that seeks to train. in 2006 we introduced “The Star Performer” award and monthly newsletter recognizing the management with the best trading performance. including the creation of the Singer Information System (defined below). ranging from our branch managers to our store staff and canvassers across the five countries where we operate. as collections can be severely impacted if products are no longer operational or are not repaired promptly. inventory management. have worked with us for an average of 18 years each. as at March 31. which we believe is essential to ensure sales employees can properly explain the features of the products we offer. make outbound and inbound marketing calls and provide information relating to our HCD and consumer finance products and services. Our call centers assist customers during the sales and credit process.133 sales outlets. We monitor our employees’ performance based on criteria such as sales. They have built a solid platform for growth through implementing a wide range of changes since 2005. High-quality customer service We emphasize building long-term sustainable relationships with our customers. which we actively promote. have an average experience level of 22 years managing HCD retail and providing consumer finance services to our customers. Our dedication to high-quality customer service has been critical to the selling of additional HCD products and cross-selling of consumer finance products. suppliers. substantially all of our employees undergo training through the Singer Retail Academy (“ SRA ”). merchandising. Our sales outlets. Our customer service is supported by call centers in each country and a widespread network of 1. enhancing the credit control mechanisms. and our extensive incentive schemes work together to enhance performance. whose average age is 50 years. The quality of after-sales services is particularly important for our consumer finance operations. Our executive management team is supported by a motivated and trained network of staff. We believe that the “Singer” culture of awarding operational performance and the training provided to our employees have led to an increase in sales. and we view high-quality customer service as a key differentiating factor from our competitors in the HCD retail and consumer finance markets. The key members of the executive management team. which include our Group management team and each country’s key managers. Our “Singer” culture. 33 service centers and 871 franchise service agents. We also rely on customer house visits by our canvassers following a direct sale. 20 . daily cash management. offer advice on SINGER ® and third-party brand products and provide free servicing and repairs. Our executive management team.

The Singer Information System allows us to increase operational efficiency and reduce costs across our distribution network and in our consumer finance business. 2010 to December 31.835 183 812 1. The Singer Information System also offers a sophisticated management platform for our consumer finance operations that integrates our numerous customer accounts. add approximately 400 independent dealers and approximately 20 direct selling depots. we intend to grow our retail store base by a further approximately 130 stores. 2012. 2014.500 3.200 2. among other things. In particular.400 Number of independent dealers 900 1. Our historical and projected distribution platform growth is represented in the chart below: Number of retail stores and direct selling depots 1. our independent dealer network by over 600 independent dealers and our direct selling depots by 17. 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. advanced online enterprise resource planning (“ ERP ”) system (the “ Singer Information System ”). These additional stores. Expand and enhance our distribution platform From December 31.200 300 600 FY2010 FY2011 187 850 2.000 1.039 2. India and Thailand by providing a diversified range of products and services aimed at satisfying our customers’ needs. advanced online IT system We have developed and currently operate a fully-integrated. Pakistan. we intend to expand our operations into certain high growth ASEAN countries. we increased our retail store base by 97 stores. Bangladesh. a tailored software system that. inventory levels and data relating to our consumer finance operations. At the same time.800 600 1. In order to achieve these goals. their credit portfolios and installment plans and customer payment profiles.690 FY2014 220 1. dealers and depots will be located in areas with high growth potential.797 - Direct selling depots Retail stores Independent dealers 21 . provides us with real-time business information including sales.211 FY2012 200 909 2. 2013 to December 31.Fully-integrated. focusing particularly on the fast developing rural populations that are currently underserved by us and our competitors. we have developed a growth strategy with the following key elements.435 FY2013 210 969 2. Over the period from January 1. 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.

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. 2013. which is one of the largest telecommunications equipment manufacturers and one of the largest smart phone producers in the world. We have also introduced additional collection incentives to our branch staff to encourage the growth of well-managed credit portfolios. 2013. 2013 to December 31. We intend to utilize the Singer Homes retail format and provide installment credit for the purchase of furniture. with lower cost upgrades every two years.7% of total sales that it represented for the three months ended March 31. In addition to third-party brands. tailor and enhance our product offerings in response to evolving customer preferences and new opportunities that arise. for the sale of smart phones and tablets in Sri Lanka and Bangladesh. we intend to renovate or relocate approximately 220 stores. We believe furniture provides opportunities for higher gross margins and increased credit earnings while allowing for lower service and with inherent lower credit risk. Introduce new brands and products We believe it is critical for us to continually review. Further. We have also recently started selling Apple products in our stores in Sri Lanka and Bangladesh. 2014. we intend to continue to expand the range of house-branded products as new designs and models become available. these have been very well received by our customer base. We believe this will attract new customers into our stores. but we believe this percentage could increase significantly over the period from April 1.We also plan to enhance our existing retail network by renovating older stores. thereby lowering the monthly installments. IT products comprised 5. enlarging the retail space within our existing stores and relocating stores to more suitable locations as appropriate. We currently provide a wide range of third-party brands which we will continue to expand in the future. We also entered into distribution agreements with the highly recognized Indian brands Godrej. We expect the product contribution of furniture to increase from the 2. These IT products do not require significant additional selling space. The larger renovated stores are also able to display a greater range of HCDs and brands. consumer credit operations. we have begun to sell furniture in Bangladesh. we renovated 187 stores. We intend to begin to sell furniture in Pakistan in the second half of 2013. 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. the longer credit term of our installment plans should increase the total finance charge income. which is not widely available in Bangladesh and Pakistan. From 2010 to 2012. established and trusted retail brand. The growth potential of renovated stores is enhanced as customers are afforded a more modern. mostly sourced from our own factories or local vendors. 2013 to December 31. Over the period from January 1. Building on the success of our furniture business under Singer Homes in Sri Lanka. We plan to continue to take advantage of our extensive distribution platform. In 2012. Onida and Videocon and the European brands Beko and Grundig in 2012 and the first quarter of 2013.8% of total sales for the three months ended March 31. Our policy is to complete a major store renovation at least every six years. 2014. 22 . we entered into a distribution agreement with Huawei. 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. professional and exciting shopping environment.

mobile phone reload and branchless banking. except for sewing-related products and ironing presses for which we have an exclusive perpetual distribution agreement. While we. for the purposes of Section 249 of the Securities and Futures Act. Myanmar is attractive because it provides a variety of investment opportunities reflecting the pace at which the government is liberalizing the economy. 23 . Cambodia and Laos to continue to grow economically. 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.0% in 2010. neither we. 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. 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. 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).1% in 2011 and 6. with a population of approximately 6. The World Bank has not provided its consent. We expect that this will allow more customers the opportunity to view the range of our HCD products and experience our Singer customer service. remittance business. we intend to expand our bill payment services. Penetrate additional markets in the ASEAN region We believe that in addition to the countries where we currently operate. In order to successfully take advantage of these promising investment prospects. we believe that by providing a growing variety of financial products and services. In particular. Myanmar’s GDP has grown at a rate of 5. according to the World Bank 1. dealers from Myanmar.3 million people. In addition to an increase in revenue. we are well positioned to take advantage of new opportunities in other countries within the Asia Pacific region. 8. 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.3 million people. with a substantial potential market for the sale of HCDs using consumer finance. Cambodia has a population of approximately 14.5% in 2011 and 6. Cambodia and Laos also provide attractive potential growth opportunities. Cambodia and Laos.3% in 2012. has also benefitted from strong GDP growth of 8. We intend to enter these markets to provide the growing and increasingly affluent populations with our product and consumer finance offerings. The country has. the Vendors and the Sole Global Coordinator. Bookrunner. according to the World Bank 1.6% in 2012.5% in 2010. See “ Business – Branding and Intellectual Property ” for a discussion about the scope of our trademark license. experienced stable economic growth. with GDP increasing by 6.3% in 2010. Cambodia and Laos have purchased certain of our Singer products from our locations in Thailand situated near the borders with these countries. Myanmar has a population of approximately 48. These markets have a relatively low level of HCD and consumer credit penetration and offer opportunities for sustained future growth. We do not believe there are currently any established retail and consumer finance companies operating in Myanmar. 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. We intend to expand our operations into Myanmar.In the financial services business. we have established a strategic business development division. 5. 7.0% in 2011 and 8.2% in 2012. Laos. and that the information has been extracted accurately and fairly from such report. we intend to enter into strategic relationships 1 See “General and Statutory Information − Sources”. the Vendors and the Sole Global Coordinator. we will increase our store footfall by attracting new customers and encouraging repeat visits by our existing customers. The World Bank 1 expects Myanmar. In addition to expanding our current trading activities.6 million people. according to the World Bank 1. Bookrunner. which includes dedicated personnel focused on exploring these expansion opportunities. over the past several years. For nearly 30 years.

most of which do not offer e-commerce-based sales. given the considerable number of Sri Lankan. including the business. Cambodia and Laos will depend on a number of factors. In addition. 24 . advertise new products or services.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. 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. economic and regulatory environment of each country. We believe that our online shopping portal will offer our customers a value proposition and help to differentiate us from our competitors. 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. timeline and extent of expansion into Myanmar. Bangladeshi and Pakistani workers in various parts of the world. announce new store openings and provide information relating to product promotions. 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. The nature. We plan to use our online portals to promote this service.

. . Bookrunner. 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. The Offering Price was determined following a book-building process by the Sole Global Coordinator. The Singapore Public Offer . . The Offering Shares will consist of [ ● ] Issue Shares and [ ● ] Vendor Shares. . . Underwriter and Issue Manager. .S. . . . Underwriter and Issue Manager. . Offering Price . . Bookrunner. . . . . . Unless we indicate otherwise. . The International Offer will. may not be offered or sold within the United States (as defined in Regulation S). Underwriter and Issue Manager. . including institutional and other investors in Singapore. . . . . Sewko Holdings Limited. . . . . subject to certain conditions. . .SUMMARY OF THE OFFERING The Issuer. . [ ● ] of the Offering Shares offered in Singapore at the Offering Price by way of an offering to the public in Singapore. Price Determination . 25 . Clawback and Re-allocation . . . S$[ ● ] for each Offering Share. . . . . . . Securities Act and. . . The completion of the International Offer and the completion of the Singapore Public Offer are each conditional upon the completion of the other. . . . . . . . . . Bookrunner. . . . . . . . . The Offering Shares are being offered and sold outside of the United States in reliance on Regulation S. . all information in this offering document assumes that no Offering Shares have been re-allocated between the International Offer and the Singapore Public Offer. The Offering . . . Underwriter and Issue Manager. . Investors are required to pay the Offering Price in Singapore dollars. 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 Vendors . . . . . be underwritten by the Sole Global Coordinator. Our Shares have not been and will not be registered under the U. . . subject to certain exceptions. . a company incorporated with limited liability under the laws of the Cayman Islands. be underwritten by the Sole Global Coordinator. . . subject to certain conditions. . . . The International Offer . . The Singapore Public Offer will. . . See “ Plan of Distribution ”. [ ● ] of the Offering Shares offered by way of an international placement to investors at the Offering Price. . . . Bookrunner. . .

0% of the total Offering Shares. See “ Plan of Distribution ”. 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. . The minimum initial application is for 1. all information in this offering document assumes that the Stabilizing Manager does not exercise the Over-allotment Option. to purchase the Additional Shares (representing not more than 15. . . . . purchase any option or contract to sell. Bookrunner. offer. . . without the written consent of the Sole Global Coordinator. The Over-allotment Option will be granted by the Vendors in proportion to their respective shareholdings in our Company. Over-allotment Option. sell. . . The exercise of the Over-allotment Option will not affect the total number of issued Shares outstanding immediately after the completion of the Offering. lend. . sell any option or contract to purchase. . directly or indirectly. .Brokerage Fee . . Investors in the International Offer will be required to pay a brokerage fee of up to 1.000 Offering Shares. . . . .0% of the Offering Price in connection with their purchase of Offering Shares. . in whole or in part. . . that from the date of the Underwriting Agreement until the date falling six months from the Listing Date. (i) issue. Applications must be paid for in Singapore dollars. . (ii) enter into any swap or other arrangement that transfers to another. See “ Plan of Distribution – Over-allotment Option ”. . grant any option or right or warrant to purchase. . which constitutes part of this offering document registered with the Authority. subject to certain exceptions. Application Procedures for the Singapore Public Offer . we will not. . Underwriter and Issue Manager. Investors under the Singapore Public Offer must follow the application procedures set out in Appendix P – “ Terms. hypothecate or encumber or otherwise transfer or dispose of. Bookrunner.000 Offering Shares. contract to sell. and (ii) the date when the Stabilizing Manager or its appointed agent has bought on the SGX-ST an aggregate of [ ● ] Shares. In connection with the Offering. . Lock-ups . . in undertaking stabilizing actions. . representing not more than 15. . An applicant may apply for a larger number of Shares in integral multiples of 1. . . . . . Conditions and Procedures for Application for and Acceptance of the Offering Shares under the Singapore Public Offer ”. . . .0% of the total Offering Shares) at the Offering Price. . any Shares or any securities convertible into or exercisable or exchangeable for any Shares. We have agreed with the Sole Global Coordinator. . if any. any of the economic consequences of ownership of Shares or any securities convertible into or exercisable or exchangeable for Shares. . Underwriter and Issue Manager. . . . 26 . Unless indicated otherwise. . pledge. . solely to cover the overallotment of the Offering Shares.

approximately S$[ ● ] million (US$[ ● ]) to open new channels of distribution in our existing and new markets. Bangladesh and Pakistan. Application has been made to the SGX-ST for permission to list all our issued Shares. . permission being granted by the SGX-ST to deal in and for quotation of all our issued Shares. Acceptance of applications for the Offering Shares will be conditional upon. . not the sale of Vendor Shares. expansion of our IT offering in all markets and expansion of our financial services offering in Sri Lanka. . or (iv) publicly disclose our intention to do any of the above. which will be granted when we have been admitted to the Official List of the SGX-ST. . We will only receive proceeds from the primary offering.(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. We have not applied to any other exchange to list our Shares. including the expansion of our furniture offering and manufacturing capacity in Sri Lanka. . . and approximately S$[ ● ] million (US$[ ● ]) for general working capital purposes. Bookrunner. . Prior to the Offering. 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. 27 . . . the Additional Shares and the Scheme Shares on the Official List of the SGX-ST. . including transactional e-commerce sites. 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. in cash or otherwise. Proceeds from the Offering . . 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. . the Offering Shares. see “ Use of Proceeds ”. Listing and Trading . • • • For a complete description of the application of the net proceeds. Underwriter and Issue Manager and our shareholders. . among other things. whether any such transaction described above is to be settled by delivery of Shares or such other securities. there has been no public market for our Shares. the Offering Shares. Bangladesh and Pakistan. the Additional Shares and the Scheme Shares on the Main Board of the SGX-ST.

. Transfer restrictions . . Securities Act. . 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 [ ● ]. . . and (ii) the date when the Stabilizing Manager or its appointed agent has bought. in each case in compliance with all applicable laws and regulations. These transactions may be effected on the SGX-ST and in other jurisdictions where it is permissible to do so. . registered under the U. See “ Plan of Distribution – Over-allotment Option – Price Stabilization ”. . 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. representing not more than 15. on [ ● ]. These transactions may commence on or after the commencement of trading of the Shares on the SGX-ST and. including the Securities and Futures Act and any regulations thereunder. upon listing and quotation on the SGX-ST. See “ Clearance and Settlement ”. 28 . The Shares will be traded in board lot sizes of 1. . . 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. . but is not obliged to. . and will not be. . . .000 Shares on the SGX-ST. The number of Shares that the Stabilizing Manager may buy to undertake stabilizing actions will not exceed in aggregate [ ● ] Shares. Settlement. 2013.0% of the total Offering Shares in undertaking stabilizing actions. . . . However. . . . . if commenced. on the SGX-ST. . In connection with the Offering. . . an aggregate of [ ● ] Shares representing not more than 15. . 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. . . The Shares will. we cannot assure you that the Stabilizing Manager (or persons acting on behalf of the Stabilizing Manager) will undertake stabilizing actions.m. . See “ Indicative Timetable ”. 2013 (Singapore time). resales by subscribers and/or purchasers of Offering Shares and by subsequent transferees will be subject to certain restrictions described in “ Transfer Restrictions ”. . Stabilization . . . . . . . . . Therefore.We expect the Shares to commence trading on a “ready” basis at [ ● ] a.S. . the Stabilizing Manager (or persons acting on behalf of the Stabilizing Manager) may. . 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.0% of the total Offering Shares. The Shares offered in the Offering have not been. . .

. . unless he elects to receive the relevant dividend in U. For the portion of the dividends to be paid in Singapore dollars. Risk Factors . . .S. We cannot assure you that our Company will declare or pay any dividends. . . . . . . We will declare dividends in U. Prospective investors should carefully consider certain risks connected with an investment in our Shares. .S. . . . Each Shareholder will receive his dividend in the Singapore dollars equivalent of the U. . as discussed under “ Risk Factors ”. . . dollars. if any. . dollars by submitting a “Dividend Election Notice” by the books closure date. . . We do not have a fixed dividend policy. . taking into consideration any premium or discount that may be relevant to the cost of exchange. . dollars into Singapore dollars at such exchange rate as the Company may determine. . . . . only out of our profits and out of the share premium account as permitted under Cayman Islands law. dollar dividend declared.Dividends .S.S. . See “ Dividends ” for a description of our dividend policy. We will pay dividends. . 29 . . . the Company will make the necessary arrangements to convert the dividend in U. . .

. or in the newspapers. . . . . . . . . . . . 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. . . . . . . . The above timetable is indicative only and is subject to change at our and the Vendors’ discretion. Underwriter and Issue Manager. . . 2013 [ ● ]. . . . . The above timetable assumes (i) that the closing of the Singapore Public Offer is [ ● ]. The Business Times or Lianhe Zaobao . . . . .m. All dates and times above are Singapore dates and times. . . . . . (ii) Investors should consult the SGXNET announcement on the “ready” listing date on the Internet (at the SGX-ST website). .m.sgx. Underwriter and Issue Manager. . . . . . . . 2013 at [ ● ] a. . . [ ● ]. [ ● ]. subject to all applicable laws and regulations and the rules of the SGX-ST. . . . . may at our discretion. . . . . . . [ ● ]. . We and the Vendors. . . . . we will publicly announce the same: (i) through a SGXNET announcement to be posted on the Internet at the SGX-ST website http://www. . . . . . . . . 2013 at [ ● ] p. with the agreement of the Sole Global Coordinator. .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) [ ● ]. . . 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. 2013. . 30 . . 2013. In the event of the extension or shortening of the time period during which the Offering is open. . . . . . . Bookrunner. 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 . . . . . and in one or more major Singapore newspapers. . . such as The Straits Times . 2013 . . . (ii) that the date of admission of our Company to the Official List of the SGX-ST is [ ● ]. . . . . . The above timetable and procedures may also be subject to such modifications as the SGX-ST may in its discretion decide. . . Bookrunner. agree to extend or shorten the period during which the Offering is open. 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. . . The Business Times or Lianhe Zaobao . 2013 at 12:00 noon . or check with their brokers on the date on which trading on a “ready” basis will commence. . . with the agreement of the Sole Global Coordinator.com. . . . . . and (iii) compliance with the SGX-ST’s shareholding spread requirements. such as The Straits Times. . . . . including the commencement date of trading on a “ready” basis. .

Bookrunner. Conditions and Procedures for Application for and Acceptance of the Offering Shares under the Singapore Public Offer ”). in whole or in part. at the applicant’s own risk. 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. In the case of the Singapore Public Offer. In deciding the basis of allocation. 31 . Conditions and Procedures for Application for and Acceptance of the Offering Shares under the Singapore Public Offer ”). and no enquiry or correspondence on our and the Vendors’ decision will be entertained. without assigning any reason therefor. the Vendors and the Sole Global Coordinator. Conditions and Procedures for Application for and Acceptance of the Offering Shares under the Singapore Public Offer ”). 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. or to scale down or ballot any application for the Offering Shares. within 24 hours of the balloting ( provided that such refunds are made in accordance with the procedures set out in Appendix P – “ Terms. 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. at the applicant’s own risk. The manner and method for applications and acceptances under the International Offer will be determined by us. any balance of the application monies will be refunded (without interest or any share of revenue or other benefit arising therefrom) to the applicant. Underwriter and Issue Manager. Where an application under the Singapore Public Offer is accepted in part only. 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.We and the Vendors reserve the right to reject or accept. if the Offering does not proceed for any reason. Where an application under the Singapore Public Offer is rejected.

501 4.749) 21..867) (4.46 [●] – 31. . .18 [●] – 8.181) (11. . .924 9. .813 (112. .. . . 2010.. . . .243) 121.741 (252.436 8. . Finance income . . Profit attributable to: Owners of the Company .. .063 9. .649 3. . . Non-controlling interests . .649 15. Other income .76 [●] – 35.904 775 (30. 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. .575) (815) 11.240 47. .23 [●] 32 .061 25. . . .174 6..012) (805) 12.400 (64. .895 (12. .533 1.. .266 183 8. .493 (109. We have prepared the unaudited condensed combined interim financial statements on the same basis as our audited annual combined financial statements. . . . . .342) 35.943 5. Summary Combined Statement of Income Information Year ended December 31. .S. . 2012 and 2013 included in this offering document. . .945 0.921) 42. .945 4. Income tax (expense)/credit . . . . . .460 (12. . . 1. . . the accompanying notes and the related independent auditors’ report included in this offering document. . .304 (205.529) 5. . .925) 26.995) (16. .862 271 (4. . Gross profit .449 5. . . . . . U. . . . . . .439) 52. . . . .449 1. . Our financial statements are reported in U. . . GAAP and IFRS apply different criteria in determining whether to consolidate an investee company. . . Earnings per share (cents). .846) 104. .. . .595) (11.135) 435. . . . . . . . ..937 (86. .385) 406.317) (2. .577 26.596) Three months ended March 31. Earnings per share after adjusting for the issue of the Issue Shares (cents) . .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. . . . . 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 years ended December 31. Other expenses . . The summary combined financial information as at and for the three-month periods ended March 31. Profit for the year/period . .180) (3. . . . .501 16. . Profit before income tax . . . Cost of sales . . .426 (8. . . . Share of profit of equity accounted investees (net of income tax) . . .301 1.S. .641) 58. 2012 and 2013 has been derived from our unaudited condensed combined interim financial statements for the three-month periods ended March 31.948) (3. . . dollars and are prepared and presented in accordance with IFRS..641 448 (27. . . . . . .. .272 1. ..813) 166. . . . . ..078 1. .475 21. . . . . . . . . ...002 1. . . . . . .825 (67.474 (2. Finance costs . . . .99 [●] – 8. . . . .313) 42. . . . . . . . 326. . . . . IFRS reporting practices and accounting principles differ in certain respects from U. For example. .699 318 (3..553 6. 2012 2013 Results from operating activities . Selling and administrative expenses . . . . .759) 39. . . .553 26. 2010 2011 2012 US$(’000) Revenue .891 (269.. GAAP. . Profit for the year/period .398 (9. .S.040 796 (12. . . Net finance costs .440) 154.013 3.149 (17. .225) 110.543) (3. .490 35. . . .

.906 37.622 132.717 54. . . . . . .854 154. .842 5. Non-controlling interest . . . . .349 62. . . . . .712 38. . . . . . . .969 130. . . . . .. . . . . . . . . .289 4. .994 208 103 2. . . . . .022 229.956 39. . Intangible assets and goodwill . . . .895 373.947 167. . . . . .655 1. Loans and borrowings . . .508 10. . . . . .301 46. . . . Warranty provision over one year Deferred tax liabilities .181 779 1. .901 165 500 2. .895 6. . . . Current tax liabilities . .934 4. . . ..430 217.761 401. .140 4. .523 87.119 303.495 4. . .821 327.051 140. . . . . . . . . . .928 5. . .686 327.050 242. . .186 61.054 22. . .261 22. . . . . . . . . . . Deferred tax assets . . . . . . . . . . . Current assets Inventories . Reserves . 54.701 159. . .947 10. . .782 4. .. . 10 68. Total current assets . . . . . . . . . . . . . . .002 98. .019 1. .448 9. . . . . . . . . . .888 187. . . . . .. . . . . . . . .243 99. . . . . Deferred income over one year .478 18. . . . . . . . .638 1. . Other current assets . . .824 23.039 28. . .619 82. . . .136 264. . . . . .015 401. .104 40. . . .315 55. . . . . . . . Other non-current assets . . . . . . . . . . . . . . . Trade and other payables Deferred income. . . . .987 7. . .557 132 95 3.Summary Combined Statement of Financial Position Information As at December 31.555 6. . . . . . .. . . . . .235 7.. . . .. . .865 Equity attributable to owners of the Company . . . .433 14.. . .. . . . . .098 3. Total equity and liabilities . .125 9. . . .007 36. Total equity ..195 8. .881 49.. .265 22. .236 203.418 10 41. . . . . . . . . . .350 118.294 40. . .673 110.454 303. .471 1. . . . EQUITY AND LIABILITIES Equity Share capital . Trade and other receivables over one year . .109 37. . . . . . . . . .205 49. .858 59. . . Non-current liabilities Loans and borrowings . 2010 2011 2012 As at March 31. . .094 44. . . . . . . . . . .. .. . . .229 12. . . . . .110 4. . .. . .739 18. . Share premium.185 1. . . .915 137. . . . 33 . . .269 12.548 109. .418 62. . . . . . . . . . . .512 373. . . .161 1. . .880 112. .850 93. .. .510 1. . . . . . . Total non-current liabilities .914 68.303 81.935 172. . 2013 US$(’000) ASSETS Non-current assets Property. .. . . . .687 15. . . .306 4. . . .665 100. . . . . . . . . . Trade and other receivables Cash and cash equivalents . . . . .169 53.052 40. . . .946 96. . . . . . . . . . . . . . plant and equipment . .705 2. . . . .356 131.791 59.294 125. . . . . . . . . . . .896 158.627 61. . .693 10 41. Total liabilities . .458 213.503 164 458 2. .750 106. . . . .464 53.497 8.310 2. . . . . . . . . .. . . Total assets . . . . .147 61. .872 71. . . . . . . Other non-current liabilities . . . . Retained earnings .250 11. . . .223 12. . . . . .171 52.171 10 52. . . .449 55. . . . . . .865 Total non-current assets .073 12. . . . Current liabilities Bank overdraft . . .. . .231 5.340 145.693 60.798 15.. . . . .. . . .018 41. . . Warranty provision . Employee benefits . . . . .851 2. . . . . . Total current liabilities . . . . . . .895 7. .147 43.

. . plant and equipment .460 287 3. . .217) (275) (5. . . . . (9. . . . . Gain on sale of investments . . Net finance costs. . .383) (1. . . . . . . .041 (4. Acquisition of property.553 3. Deferred income . . .240) (24. . .749 46. . . . . . . . .060) – 672 1.607) (1. .457) 8. . . . Amortization of intangible assets and goodwill . . .081) 5.426 (21. . . . . .159) 26.529 12.. .513 . . . . .637 12 – 91 (1. 2010 2011 2012 US$(’000) Cash flows from operating activities Profit for the year . . . . . . . 2012 2013 35. . . . . . . . . . . . . .. .995 24 – – – – (126) 11. .676) (1.385 12. . . .502) (34. . . . . . . . . . .884) (1. . . . . . .905) (10. . .225 2. . 796 583 32. .135 9. Non-cash compensation . . . . . Income tax paid . . .379) 2.073) (17. . . .181) (3.469) (14. . . .275 (1. plant and equipment . .925 56. . . Adjustments for: Depreciation . . . .266 (11.649 3. . . . . .. .921) 318 128 1.149 381 5. Proceeds from sale of investments . . .866) (6. .671) 8.728) (11. . Trade and other receivables . . . . . . . Impairment loss on property. . . Trade and other payables .342 37. . . Changes in: Inventories . . plant and equipment .246 (7. . .667) (857) 162 8. . . . . . . .333) (1. Tax expense/(credit) . . . . . . Share of profit of equity accounted investee . .320 1. . .576) (8. .596 (183) 13. . .496) (91) 11.943) – 30. .Summary Combined Statement of Cash Flows Information Year ended December 31. . .224) Cash from/(used in) operating activities . . .877 (5. . . . . Acquisition of intangible assets . . .548) – 279 Net cash from/(used in) investing activities . .508) 15.480 – 453 – – – (146) 16. . . . .893) (10. . . . . . . . . .585) (2. . .081 – 21 – – – (87) 4. .022 437 529 3. Proceeds from sale of property. .059 (18. . Interest paid . . . . . . . . . . . . . plant and equipment .. 34 . . . Provision and employee benefits. .845 (2. . . .449 1.978 (16. . Net cash (used in)/from operating activities . .463) (14. .523 (11. . . . . . . . . . . . . . . .258) – 463 271 711 1. .509 (662) 6. . . .325 (1.596) (24. . . . . . . .504 (2. . .846 8. . . . .945 894 – – – – – (70) 3. .763) (2.624) (10. . . Other current and non-current assets .182 398 (239) 11. . . . .994) 13. . .985) (31. . . Three months ended March 31. . . . .819 (10. . . . Cash flows from investing activities Interest received . . . . . Gain on sale of property. . . . . . .985 (5. . . . . . . .501 3. . . . .884) (644) 5.021) (1. .940 1. . . . .138) (1.193 21. . . ..

. 35 .086 (4.545 (2.. . . . . 2010 2011 2012 US$(’000) Cash flows from financing activities Proceeds from borrowings. . . . Proceeds from share options exercised. .360 – (3.634) 463 4. . Three months ended March 31. . . . . . Net increase/(decrease) in cash and cash equivalents .772) 6.996) (11. .. . .. Effect of exchange rate fluctuations on cash held. . . . . .258 (4.413 327 (10. . Distribution to non-controlling interests . 2012 2013 . 7. . . . .779 423 (35.943) (15.545 62. . .201) 6.643 14. . . .. . .398) 1.546 (3.470) (20. . . .. .. . . .700) (5. .515) (2.. .. . .073) 11.. . . . . .890) 12.. .711) – (923) 2.. . . .. .. .890) – (924) 6. . . .669 30. . .435 5.398) 11. . . Cash and cash equivalents at December 31/March 31 . .928 – (1.877 – (12. . . .704) (4. . .123 Net cash (used in)/from financing activities .500) (379) (9.801 (13.545 2.294 8. . Cash and cash equivalents at January 1 . . .448) 6. . . Repayment of borrowings .Year ended December 31.274 (2. . . . . . Distribution to owners . . .. .274 29.. . .957) 30.934) (5.962 3. .

. . . . . . . . . . .034 5. . . (3) 36 . . . . . . . .205 12. . . . GAAP or any other generally accepted accounting principles. . .8% 24. . . . . 30. . . .4% 38. . . .6 203. . . . . . . . . . . . . . . . . Revenue per square meter (US$) (3)(5)(8) . . .6% 25. . . . . . .4% 393.8% 3.243 2. . . . . . . . . Bangladesh . See “Notice to Investors – Presentation of Financial and Statistical Information – Non-IFRS Financial Measures”. ..3% 27. . . . Pakistan . India . . . . . . .528 11. . . . . . Thailand . ..7% Year ended December 31.181 11.074 3. . .9% 18.5 276. is a non-IFRS financial measure often used by retail companies to measure the performance of their existing retail stores. . . . . . . . .0% (9. . . . . . . . .5% 9. . . or presented in accordance with. . . . . . . . . . . 2010 Net sales growth (%) . . . . . . ..0 61. .1% 19. . .8% 2. . 2011 25. . . . . . . .. .. . .8% 51. . . 2012 5.6% 13. . .. . . .7% 12. . .. 35. ... . . . . . . ..7 141. . . Group . . . .9% 25. . . . . . . . . .159 3. . . . . . . . . . . U. .7 236.529 3.9 207. . . . Pakistan . .3% 24. .1% 2013 5. . .5% 29.9% . . . . . . . .677 18. . . . .. . . . . . . . .4% 25.9)% 5. . . .6% 32.5% 38. . Stores that are opened. . . .. .. . . . 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). . . . . This financial measure is a supplemental measure of our performance and liquidity and is not required by. . . . . . . . . . . . . . . . . . . . 270.4% 6. . .2% 32. . . .2% 57.397 2. Non-IFRS Measures Like-for-like sales growth (2)(3) Sri Lanka . .614 3. . . . . . . . . . . . Revenue growth . . . .8% 56. . . . . . . .. . . . . . .4% 363. . . .4% 27. .2% 38.4% – – – – – . . Pakistan . . . . .7 168. . . . . . . . . . . . .1 106. . . . . . 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. . .3% 20.964 12.6% 2. . . . . . . . . Bangladesh .528 11. . . Bangladesh . . . .289 2. . . . . . . . . .088 2. . . . . .2 56. . . .8% 7.4% 46. . .9% – – – – 13. . .S. . .891 3. . .6 46. . . . .3% 28. . . . . . . .2% 37.6% 38. . Notes: (1) (2) Gross margin is calculated by dividing gross profit by revenue. . . . . . . . . . . . . . .9% 56. . . . . . . Adjusted EBITDA (US$) (’000) (3)(6) Adjusted EBITDA margin (3)(7) . . . . . . .. . . .920 3. . . . . Revenue per square meter (local currency) (’000) (3)(5)(8) Sri Lanka . EBITDA margin (3)(7) . . . .3% 3. . .2 336.325 23. . . . .2% 37. also known as “same store” or “comparable stores” sales growth. . . . .Other Financial Data Three months ended March 31. . . .626 2. . . .7% 20. . . .6% “Like-for-like” sales growth. . Bangladesh . . .785 3. .0 304. . .964 12. . . . . . . . closed or renovated during any of the periods being compared are excluded. . Gross margin (%) (1) Sri Lanka . .5% 37. . ..152 (4. Revenue growth at constant exchange rates (3)(4) .4% 37. . . . . . . . . . . . . .0% 24. . . .9% 37. . .0% 56. .205 12. . . . . India .0% 6. .7)% 8. . .4% 8.1% . . . . . . . . . . EBITDA (US$) (’000) (3)(6) . . . . IFRS. . . . . . .. . India . . . . . . . . . . . . .2% 21. . . . . . . . Pakistan . Sri Lanka .. . . . . . .5% 27.

. . . The 2010 revenue per square meter for Bangladesh would have been US$2. . (7) EBITDA margin and Adjusted EBITDA margin are non-IFRS financial measures and are calculated by dividing EBITDA or Adjusted EBITDA by revenue. 2010.528 – 46. . . if this amendment to the VAT regulations had been in place from January 1. . . 2010. . . . .711 683. . On July 1. Installment accounts receivable (Gross) (US$ million) . . . . . . EBITDA is a non-IFRS financial measure and represents results from operating activities before depreciation and amortization. . . .200 612. . Revenue per square meter is calculated by dividing revenue by the weighted average selling area (in square meters). . . . Pakistan. . . of the current period revenues using the prior period exchange rates versus the prior period revenues. .414 679. . .205 – 56. . Adjusted EBITDA .964 – 13. . . .211 187 78. . . . . . . . . . . .496) 37. . . . . .933 (1. . . . . . . . See “Notice to Investors – Presentation of Financial and Statistical Information – Non-IFRS Financial Measures”. Add: Depreciation and amortization . . . . .895 218.8 37 . . . . . . . . . Note: (1) Independent dealers in Sri Lanka. .637 (796) (1. . . . . . . . . . Set forth below is a reconciliation of our profit before income tax to EBITDA and adjusted EBITDA: Three months ended March 31. (8) Operational Data As at March 31. . . . . . .181 3. . . . . as a percentage. . net of income tax . .S. Total store area (square meters) .240) 61. See “Notice to Investors – Presentation of Financial and Statistical Information – Non-IFRS Financial Measures”.018 176. Bangladesh. . . . Number of customer accounts . . EBITDA .558 211 86.435 200 82. .5 As at December 31. . . .398 12. . .460) – 46. 2010 2011 . 2011 850 2. . dollars using the same average foreign currency exchange rates for the conversion of revenues into U. . International Leasing and Financial Services Limited (“ILFS”). . . . . . . . . . .995 3. .205 8.422 708. . . 2012 US$(’000) Profit before income tax . . . . . Less: Gain on sale of investments in associate . Bangladesh amended the regulations for Value Added Tax (“VAT”) resulting in the exclusion of VAT from revenue. .181 31. . Less: Share of profit of equity accounted investee. . . .964 2013 (5) (6) Year ended December 31. . dollars that we use to translate local currency revenues for the comparable reporting period of the prior year. . Less: Finance income .1 812 1. . .(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. . . . See “Notice to Investors – Presentation of Financial and Statistical Information – Non-IFRS Financial Measures – Constant Exchange Rates”.9 2013 922 2. . . . .895 12.797 183 76. .5 million following the disposal of our affiliate company in Bangladesh. . . . 47. .S. . .040 206. . Direct selling depots. . Independent dealers (1) .867 1. . .595 3. . . . See “Notice to Investors – Presentation of Financial and Statistical Information – Non-IFRS Financial Measures”. . . Add: Finance costs . . . . .600. . . . . . 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. .677 (24. .995 (1. . . India and Thailand.762 and BDT192. . . .266 4. . . . . . The weighted average selling area is the average of our aggregate selling area at the end of each month during the financial year. . .149) – 56. . .102 (271) – 13.528 35.426 17. . . . We calculate the change.590 141. . 2010 Number of retail stores . . . 2012 909 2.

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

42 of 2011 and the Finance Leasing Act. We currently carry out the manufacturing or assembly of products in Sri Lanka. 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. As the legal systems of the countries in which we operate continue to develop. corporate income tax. 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. 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. As no maximum rate is specified for banks. Pakistan. which could reduce these efficiencies or incentives and in turn cause a disruption or cessation of these operations in one or more locations. Bangladesh. Furthermore. 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. Consequently. These tax laws may continue to be supplemented and clarified as issues arise over interpretation or 39 . For example. No. Singer Finance (Lanka) PLC is regulated by the Central Bank of Sri Lanka under the Finance Business Act. India and Thailand (for example. As such. all major tax laws and regulations in Sri Lanka. These regulations are subject to change and new laws and regulations may be enacted. the Central Bank has very recently imposed a cap of 3. in the course of providing more attractive deposit rates to their depositors. For example. as amended. and this may have an adverse effect on our business. namely Sri Lanka. A change in these import or excise duties could have an adverse effect on our business. India and Thailand. Any slowdown in these economies could adversely affect our customers and contractual counterparties. 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. Bangladesh. finance companies such as Singer Finance (Lanka) PLC face direct competition from banks that are able to provide comparable interest rates to their borrowers. financial condition or results of operations. our consumer finance and financial services operations are subject to changes in regulation and government policies. We are subject to varying degrees of government regulation pursuant to numerous laws and regulations in the various countries in which we operate. We cannot assure you that there will be no change in the laws and regulations applying to these manufacturing and assembly operations. 36 of 2000. Similarly. 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. 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. regulations and policies in emerging markets tend to evolve and change more frequently compared with mature markets.0% per annum on the penal interest chargeable by finance companies on overdue arrears. 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. In Sri Lanka.effects. This too would seriously and adversely impact the funding capabilities of finance companies. Policy changes and interpretations of applicable laws can produce unexpected consequences which may have an adverse effect on our business. Pakistan. financial condition or results of operations. VAT. there was a change in the VAT regulations in Sri Lanka on January 1. No. Bangladesh. Pakistan and India when and where there are local efficiencies or tax or duty incentives. personal income tax and royalty fees) have undergone significant changes. Further. consumer sentiment and spending may remain cautious. 2013. increasing costs or otherwise.

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

financial position or results of operations may be materially adversely affected. see “ Management’s Discussion and Analysis of Financial Condition and Results of Operations – Significant Factors Affecting Our Results of Operations – Foreign exchange rates ”.If we are unable to pass on future price increases due to unfavorable exchange rate movements to our customers. In addition. In a rising interest rate environment. Further. there has been a material deterioration of the India Rupee against the U. such as bank borrowings. As a result. The Thai Baht. For example. which could have a material adverse effect on our business. Due to these restrictions. 41 . Pakistan Rupee and Sri Lanka Rupee have also declined in value against the U. our gross margins will decline. such as hire purchase and finance lease facilities. financial condition or results of operations. Our business is subject to fluctuations in market interest rates as a result of timing mismatches in the repricing of assets and liabilities. there are foreign exchange controls in some of the countries in which we operate. as the current liberalized regime was not in force at the time Singer (Sri Lanka) B. made its investment in our companies in Sri Lanka. We realize income from the margin. See “ Exchange Rates and Exchange Controls – Exchange Controls ”. which would materially adversely affect our business. Bangladesh. which could adversely impact our business. between interestbearing assets. 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. restrictions still exist. 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. Exchange control restrictions may affect our ability to repatriate the proceeds from our investment from our Sri Lankan subsidiaries and operations. 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. dollar (see “ Management’s Discussion and Analysis of Financial Condition and Results of Operations − Trend Information ”). 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. leading to volatility in inflation and interest rates in these countries. financial condition or results of operations. If these increased costs are passed on to new customers. as well as our subsidiaries and operations in other countries. 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. our business. leading to pressures on the balance of payments and depreciation of local currencies compared with the U. the Sri Lankan rupee is not a freely exchangeable currency and although Sri Lanka has liberalized its exchange control regime. Our working capital and consumer finance requirements are financed in large part by interestbearing bank borrowings.V. potential competitors may find it easier to enter the markets in which we operate. financial condition or results of operations. dollar. or “spread”. More recently. The direct adverse impact of the global financial crisis on Sri Lanka. India and Thailand was felt in the form of slower growth of capital inflows and declines in exports.S. Further.S. in a decreasing interest rate environment. We are exposed to variations in interest rates. 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.S. dollar. For example. particularly for capital account transactions. 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. Pakistan. For further detail on the currency fluctuations impacting our results of operations. These interest rate fluctuations are neither predictable nor controllable and may have an adverse impact on our business. and interest paid on interest-bearing liabilities. financial position or results of operations. increased volatility in capital flows may also complicate monetary policy.

financial condition or results of operations.ar. is a wholly-owned indirect subsidiary of SVP Holdings Ltd. Singer Asia has an exclusive. The sales of SINGER ா appliances and electronics. primarily registering and/or renewing the Trademark in each jurisdiction where we operate. When entering new markets. the ultimate owner of the Trademark. 2011 and 2012 respectively. a wholly-owned indirect subsidiary of SVP Holdings Ltd. we may lose our rights under the Singer License Agreement or be forced to pay a higher royalty. Singer Asia has an exclusive. if Singer Asia becomes party to any bankruptcy. if Singer Asia is nationalized by the government. which may materially adversely affect our business. and SVP Holdings are third parties and not related to Singer Asia. Both The Singer Company Limited S. Bangladesh. SVP is tasked with performing certain administrative tasks. our use of the Trademark for sewing machines may also be limited and the value of the Trademark to us may be eroded.l. Both Singer Sourcing Ltd. 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). In extreme circumstances. financial condition or results of operations.l. The termination of the Singer License Agreement and/or the Singer Distribution Agreement would have a material adverse effect on the business. and for each product category for which we are using the Trademark in that jurisdiction. on its stores and depots..ar. 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.ar. in connection with its sales and promotional activities. SINGER ா and Merritt brand sewing machines and SINGER HOMES ா furniture account for 80%. operations. Under the Singer License Agreement. Singer Asia Limited (“ Singer Asia ”) has an exclusive perpetual license agreement (the “ Singer License Agreement ”) with The Singer Company Limited S. over time. we could. which may materially adversely affect our business. (“ SVP Holdings ”). Under the Singer License Agreement. revenue and financial performance of our Group. insolvency. particularly for new products or in new markets. regional license to use the Trademark in the Singer Asia company name and in its subsidiary company names. If SVP fails to adequately perform certain administrative functions relating to the maintenance of the Trademark. if a competitor of SVP Holdings (that is. Pakistan. 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. Because of the risks enumerated above. These agreements may also be terminated in the following circumstances: if Singer Asia becomes insolvent. experience difficulty in continuing to use the Trademark. India and Thailand − these are countries where our Group currently have operations in).. See “ Business – Branding and Intellectual Property – Singer Distribution Agreement ”. or if SVP were to face financial difficulties and seek bankruptcy protection. if Singer Asia assigns its assets for the benefit of creditors or is unable to meet its debts.. liquidation or receivership proceedings.5% of the total sales of our Group for the years ended December 31.7% and 80.l. which is the owner of the SINGER ® trademark (the “ Trademark ”). 2010.Termination of the Singer License Agreement and/or the Singer Distribution Agreement would have a material adverse effect on our Group. 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. a competitor who manufactures or whose principal business is the sourcing or distribution of consumer. and SVP Holdings are third parties and not related to Singer Asia. The Singer Company Limited S. artisan and industrial sewing machines and all related sewing products and accessories) acquires a direct or indirect controlling interest in Singer Asia. perpetual distribution agreement (the “ Singer Distribution Agreement ”) with Singer Sourcing Ltd. 76. 42 . for the distribution of SINGER ® brand sewing products in certain Asia Pacific countries (namely. See “ Business – Branding and Intellectual Property – Singer License Agreement ”. Sri Lanka..

industries or markets. Our range of credit and non-credit offerings varies by country. or if other events may materially adversely affect specific customers. bridges and other infrastructure. in 2011.8 million. Singer Thailand’s credit performance was temporarily affected. such as floods. 2013. tsunamis. respectively.1 million. Sri Lanka and India have also suffered natural disasters such as earthquakes. Our business and operations may be adversely affected by severe weather conditions. 2010. floods and droughts. 2013. typhoons and other extreme climatic conditions. 2010. Our business and operations may be affected by extreme environmental conditions. such as exposure to fraudulent activities.3% of total receivables.8% of our Group’s total consumer finance revenue for the year ended December 31. including Bangkok. respectively. months of severe flooding in northern and central Thailand. which may lead to an increase in our bad debt. leasing of goods and group sales credit facilities (offered by partnering with various organizations to provide easy payment terms to their employees). Pakistani. because Bangladesh is situated on the Ganges Delta. While the paying percentage of customers in June 2011 immediately before the flood was 92. 3. it is prone to severe flooding during the monsoon season from June to September. financial condition or results of operations.1%.7% of our total revenue in the years ended December 31. which impairment charges represented 2. Under such circumstances. and the three months ended March 31.We are subject to the credit risks of our customers.9%. financial condition or results of operations. and the three months ended March 31. Our key credit-related offerings are hire purchase. which may materially adversely affect our business.6 million. making recovery more time-consuming and difficult. As a result of the floods in Thailand. However. 10. earthquakes. Bangladeshi.1%. and the three months ended March 31. In the years ended December 31. 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. Natural disasters in these regions also historically strain aging or inadequate roads. who may be unable to purchase our products and services or pay their monthly installments. respectively.9% and 12. 2012. these events may cause a disruption or cessation in our operations or those of our suppliers. 43 . which may cause disruptions to our operations as well as loss or damage to our inventories. fatalities and the spreading of disease. We cannot assure you that failures or deficiencies in our credit scoring system and processes will not occur. an economic downturn or deterioration in the financial condition of our customers. In addition. US$3. 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. For example. we may need to make additional allowances or write-offs.5%. 11. Our consumer finance business accounted for 10. resulted in over 800 deaths in Thailand. In addition. Pakistan. which accounted for 48. or other economies in which we operate.8 million and US$0. respectively.7%. 2.0% since March 2012. Indian or Thai economies. the paying percentage improved and has remained above 93. US$4. 2011 and 2012. increase our expenditure in the replacement or repair of damaged property and directly and adversely impact our customers. with the broadest spectrum of products being offered in Sri Lanka. retail stores and warehouses.6%. during the flood between July to December 2011 the paying percentage dropped to 89. Accordingly. Currently. the impairment charges for accounts receivable amounted to US$3. after the flood.1% and 0. 2013. leading to widespread damage to infrastructure.9% and 46. 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. 2011 and 2012. Credit risk from our credit portfolios may arise from events and circumstances beyond our control or events which are difficult to anticipate. which may materially adversely affect our business. machinery.

3 million.5 million and long-term liabilities of US$40. under certain of our facilities. our business. consisting of short-term liabilities of US$100. domestic and international economic conditions. certain of our existing loans contain covenants which limit our ability to borrow money. 44 . Further. including: • • • changes in customer preferences and access to suitable products. or that we will not be in breach of the covenants in our various facilities in future.8 million. regulatory or policy changes. expand our wholesale and direct selling distribution networks. In addition. financial and other factors beyond our control. pledge our assets and pay dividends if we do not meet certain financial ratios. credit. See “ Management’s Discussion and Analysis of Financial Condition and Results of Operations – Borrowings ”. the lender may have the right to stop further drawdowns under the facilities. increase retail store floor space and to do so by procuring suitable locations in a timely manner and at appropriate costs. and government or other legal. We may not be able to implement our business strategy successfully or manage our growth and operations effectively. Furthermore. Company-specific factors affecting our ability to implement our business strategy include our ability to: • • provide products and services based on changing customer preferences. even if we successfully implement our business strategy. and maintain current. and manufacturing and assembly facilities. 2013. in the event that we trigger certain amortization events. we may need to obtain additional financing. We believe our future growth and earnings largely depend on the successful implementation of our business strategy. We cannot assure you that we will be able to renew any of our facilities on similar terms or at all. In addition. External factors include business. Our business is dependent on financing and may be materially adversely affected if we are unable to secure financing for our retail. this may not translate into successful results of operations. or procure adequate additional financing. We cannot assure you that we will be successful in implementing any of our business strategies or managing our operations. we had total borrowings of US$140.We may not be able to maintain our current level of financing. If we are unable to procure adequate additional financing on economically acceptable terms or at all. which will in turn affect our ability to maximize the full potential of our assets including stores. As at March 31. in order to expand our retail and consumer finance operations. which in turn depends on a number of external and internal factors. In addition. financial condition or results of operations could be materially adversely affected. we may be unable to expand our operations and our business and financial results may be materially adversely affected. direct selling depots. relationships with suppliers. manufacturing and assembly operations. 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. • • In the event that we are unable to execute our business strategies or expansion plans. and enter into new.

which we do not have control over.Furthermore. in order to maintain and increase our customer base and to capture a bigger market share and increase our revenue.9 million. and in turn result in loss of sales. Our house brands may be used by unrelated third parties. behavior and preferences. We maintain backup systems for our Singer Information System as well as other computer systems at each of our countries of 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. In such an event.7 million. any significant breakdown of plant or equipment. 2010. 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. Bangladesh and Pakistan.4 million in the years ended December 31. A disruption in our Singer Information System and other computer systems could adversely affect our operations. This may result in a diminution in our brand reputation or value. Bangladesh. which in turn could materially adversely affect our business. respectively. including advertising and promotional efforts. 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. our business. and value associated with. 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. Our house brands may be used by unrelated third parties. 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. 2013. Pakistan. US$15. among other things. or other significant disruption to the operations of these facilities could affect our ability to manage our information technology systems. in order to attract our target customers. India and Thailand. We rely on our house brands: SINGER ®. 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. provides us with real-time business information including sales. We incurred advertising and promotional expenses of US$10. Our business activities rely to a significant degree on the efficient and uninterrupted operation of our various computer and communications systems and. Maintaining the reputation of. If we are unable to accurately assess or if we misjudge our customers’ needs and changes in consumer behavior and preferences. Sisil and Unic. financial condition or results of operations may be materially adversely affected. In addition. inventory levels and data relating to our consumer finance operations. in particular. and have also registered the Sisil trademark in Sri Lanka. 2011 and 2012 and the three months ended March 31. A failure or inability to maintain and upgrade our information technology systems may have a material adverse effect on our business. may be ineffective or may be jeopardized. in jurisdictions in which we do not operate. Further.8 million and US$4. which we do not have control over. a tailored software system that. we have sub-licensed the SINGER ® brand to third-party licensees in Malaysia and for certain products in Australia. these house brands is important to the success of our business. US$15. financial condition or results of operations. 45 . computer viruses or other malicious programs and other events. which can identify and adapt quickly to changes in customer needs. software and networks may be vulnerable to unauthorized access. on our Singer Information System. and the Unic trademark in Sri Lanka. our business. results of operations and financial condition may be materially adversely affected. The Singer Information System and our other computer systems. in jurisdictions in which we do not operate. See “ Business – Distribution Network – Sub-Licensing Agreements ”. or attract negative publicity. In the event that the adverse impact is significant. our marketing and branding strategy.

As a result. we enter into negotiations and collective agreements with these unions with respect to rates of pay. we will need to recruit suitable additional personnel. 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 ”. In addition. 46 . 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. We rely on suppliers for completely-knocked down. certain suppliers may carry distinctive or unique products that we may not be able to easily substitute with other products from alternative suppliers. we depend on our suppliers for the range. will not occur in the future. For a further discussion regarding our relationships with our suppliers. and with some of these we enjoy exclusive distribution arrangements in certain of the countries in which we operate.2% and 34. In particular. retain and motivate key personnel will have an impact on our operations. financial condition or results of operations may be materially adversely affected. 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. quality and pricing of products we are able to offer. and we cannot guarantee that we will be able to do so in a timely manner or at all.We are dependent on key management personnel and on our ability to recruit suitable and qualified employees. would have an adverse effect on our financial performance and operations. as well as other suitable employees. hours of work and other conditions of employment. If we are unable to retain or recruit suitable employees. The competition for hiring key management personnel and other employees is intense. Further. 2012 and March 31. semi-knocked down and completely built-up 1 products for our house-branded and third-party branded merchandise. our business. From time to time. of our store employees in Sri Lanka and Bangladesh were directly employed by our store managers in those countries. Moreover. which may affect our business materially adversely. and the loss of the services of one or more of these individuals without timely and adequate replacements. 1 The terms “completely-knocked down”. 2013. In addition. In addition. approximately 34. If we are unable to maintain our supplier relationships. including exclusive distribution arrangements. we may lose business to any organizations that members of our key management may join after leaving us. A completely-knocked down product is a fully disassembled item that must be assembled by the end user or reseller. 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. Our ability to continue to attract. respectively. We have entered into service agreements with certain of our key management personnel. as we expand our operations.4%. We currently have relationships with several leading global and local manufacturers. or the inability to attract new qualified personnel at a reasonable cost. We may not be able to maintain our relationships with our suppliers. we may not be able to leverage off our relationships to maintain the existing terms in our supplier agreements. results of operations or financial condition may be materially adversely affected. As a result. We cannot assure you that we will be able to maintain these relationships over the long term. In such an event. If we are unable to secure products. products may not be available in the future at all or in amounts sufficient to satisfy customer demand. our business. many of our employees in Sri Lanka are members of labor unions. but we cannot assure you that we will be able to continue engaging their services in the future. We cannot assure you that a disagreement with a union. The loss of these employees could have a materially adverse effect on us. we may need to reduce the range of products and brands which we offer our customers. certain of our employees belong to labor unions. “semi-knocked down” and “completely built-up” refer to the degree to which a product is assembled before it is exported or imported. or if suppliers are unwilling to supply us with their products. As at December 31. our business and profitability may be materially adversely affected.

consumer electronics. 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. 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. which are listed on the Colombo Stock Exchange in Sri Lanka. any of which could have an adverse effect on our business. Consequently. sell and/or distribute is significantly dependent on consumer preferences and shopping and spending trends. our business may be materially adversely affected. 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. In addition. fire. 47 .8 million. our performance may be materially adversely affected. 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. Bangladesh. or have to write off such inventory completely. extreme or unseasonable weather conditions and disruption to supplies of raw materials.Operations at our manufacturing. the home appliances. the value of our unsold inventory may decline quickly. 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. we may have to sell this inventory at either a lower value or a loss. the state of the economy. India and Thailand. furniture and sewing machines industries are characterized by changes to and enhancement of existing products and introduction of new products. natural disasters. In the three months ended March 31. 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. IT products. consumers’ income levels and demographic profiles in our markets. results of operations or financial condition may be materially adversely affected. including mechanical and IT system failures. increases in transportation costs. our inventory impairment charge was US$0. Our facilities are subject to operational risks. work stoppages. 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. 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. Pakistan. Further. and our business. and a reduction in sales. which are influenced by external factors including. shopping and spending trends affecting the purchase of our products. Any interruption of activity in our manufacturing or assembly facilities due to these or other events could result in disruption of our retail activities. We are subject to the risks of changes in consumer preferences. including the growing online retail market. cancelation of orders or refusal to accept deliveries by our independent dealers or consumers. or if new products which we manufacture and/or sell do not achieve market acceptance. Since the consumer electronics and IT products industries are characterized by rapid technological changes and rapid product obsolescence. among others. assemble. In such event. 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. warehouse or distribution facilities are subject to disruption. Our distribution network and growth strategy depend on our ability to secure appropriate locations for our stores and direct selling depots. We own and operate manufacturing and assembly facilities in Sri Lanka. Pakistan and India. financial condition or results of operations. we own controlling stakes in two manufacturing companies. Bangladesh. Regnis (Lanka) PLC and Singer Industries (Ceylon) PLC. 2013. Certain of the properties in which our stores or direct selling depots are located are leased from third parties. Demand for the products that we manufacture.

558 independent dealers. adverse publicity and exposure to public liability claims. financial condition or results of operations may be materially adversely affected. defective or dangerous products.6%. our business involves an inherent risk of product liability. product recall. In particular. as the case may be. we may need to incur significant legal. comprising 700 dealers in Sri Lanka. as at March 31. could materially adversely affect our business. 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. our reputation may be materially adversely affected. 2013. and this could materially adversely affect our business. financial condition or results of operations. We intend to continue to increase the retail floor space at a number of our existing store locations.724 canvassers in Thailand. We may be unable to control our wholesale distribution channel or our direct selling business satisfactorily. settlement and other costs in defending actions against us. This could lead to erosion of consumer confidence in our brands and a subsequent reduction in sales. In the event that we are unable to set up new stores or increase gross retail floor space.9% and 21. In particular. These litigation actions and claims may be costly and time-consuming. our direct selling business consisted of 2. 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 are exposed to the risk of litigation. we generated approximately 20. In addition. financial condition or results of operations. 2013. 310 dealers in Bangladesh. In addition. Actions by our independent dealers or canvassers that vary from our policies or the forms of our terms and conditions. including product liability claims and adverse publicity in respect of defective goods. Our customers may bring claims against us for faulty. 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. of our sales of products through our wholesale distribution channel and 18. 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. In 2012 and for the three months ended March 31. Please see “ Business – Legal Proceedings ” for a description of the material ongoing litigation and claims against us.In addition. We cannot accurately determine the full extent of any claims and liabilities (financial or otherwise) of our ongoing litigation and claims. In addition. of our sales of products from canvassers. 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. 2013. our business. 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.1% and 24. 231 dealers in Pakistan. and could result in liabilities and reputational harm. In respect of these existing stores. 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. or if claims against us are successful. as well as under other causes of action. If we were found responsible for damage caused by defective goods manufactured by us and/or products sold in our stores. 48 . respectively. as at March 31.8%. 864 dealers in India and 453 dealers in Thailand. such as offering our products at unacceptable discounts. respectively. Our wholesale network consisted of 2. 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. 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.

In addition. 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. Risks Relating to our Countries of Operation Sri Lanka. nor is there an indication that they will be sanctioned. India and Thailand are emerging economies and are susceptible to political and governmental risks. bribery and violations of laws and regulations by customers. Further. Our retail business is susceptible to seasonal fluctuations. Further. Bangladesh. some of the countries in the South Asia and Southeast Asia regions (which include Sri Lanka. and may not offer coverage in certain circumstances. our insurance policies may not be as comprehensive as those in other jurisdictions. Department of the Treasury’s Office of Foreign Assets Control (“ OFAC ”). or individuals and entities within the countries. machinery and inventories. India and Thailand may be subject to greater risk than more developed markets. we may be unable to adjust our expenses in a timely manner. respectively. economic and legal risks. Pakistan. 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. suppliers or government authorities in the jurisdictions in which we operate could have an adverse effect on our business. Accounting and corporate disclosure standards in the countries in which we operate may vary from those in more developed countries. financial condition or results of operations. Our insurance coverage may not be sufficient. if sales during these peak selling periods are significantly lower than we expect. Pakistan. Corrupt action against us or fraud. Investors should be aware that Sri Lanka. financial condition or results of operations. India and Thailand) have experienced or may experience political instability. we generally record increased sales around religious. but in the event that damage or loss exceeds the insurance coverage we procured. by the U.S. During these peak seasons. Furthermore. such as floods or business interruption. 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. cultural and country-specific holidays such as the Sri Lankan New Year in April. we may be exposed to financial losses. although the countries in which we operate are not currently sanctioned. We maintain different insurance policies in the different locations in which we operate. we may experience a decrease in sales revenue. it is possible that in the future. Pakistan. Although these fluctuations historically have not been significant. thereby materially adversely affecting our business. in which we operate. If we are unable to sell our products or offer promotions which are attractive to customers. or is not covered by those insurance policies. governmental. India and Thailand than is regularly made available by public companies in other jurisdictions. The countries in which we operate may suffer from government or business corruption. 49 . Bangladesh. including in some cases significant political. Bangladesh. 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.Our retail business is susceptible to seasonal fluctuations. In addition. Pakistan. There may be less publicly-available information about companies operating in Sri Lanka. may be subject to sanctions imposed by OFAC. covering damages or loss to our properties. countries. Bangladesh. such as countries in Europe or North America.

Cambodia and Laos. we cannot assure you that tensions or hostilities will not resume. withdrew its demands for a separate state in favor of a federal system. 50 . supervisors and officers. Further adverse developments surrounding the conflict. 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. 2009. after a series of successful operations. The pro-LTTE political party. India and Thailand. In May 2009. the Netherlands. supervisors and officers or to enforce against our Company or such directors. Our future business strategies contemplate the development of our retail business in Myanmar. and we have related companies registered in the Cayman Islands. See “ Business – Strategies – Penetrate additional markets in the ASEAN region ”. officers and managers are nationals or residents of certain of these countries. the military defeated the LTTE forces. thereby gaining full control of the northern province. and enforcement of foreign arbitral awards in Sri Lanka. Our limited operating experience in the retail and consumer finance markets in Myanmar. For nearly three decades. terrorist attacks or social unrest in Sri Lanka resume. the Liberation Tigers of Tamil Eelam (the “ LTTE “). Cambodia and Laos and the susceptibility of their respective economic. Curaçao and the British Virgin Islands. it may be difficult for investors to effect service of process upon us or our directors. We conduct operations in Sri Lanka. financial position or results of operations. We have assets located in these countries and some of our directors. India and Thailand. Cambodia and Laos have experienced or may continue to experience political instability. including the possibility of increased international pressure against the government of Sri Lanka due to perceived human rights abuses. which is the largest political group representing the Sri Lankan Tamil community. Bangladesh. While there have been no significant hostile activities since the declaration of the end of the conflict. Cambodia and Laos. the President of Sri Lanka officially proclaimed an end to the civil conflict and the defeat of the LTTE. Pakistan. On May 19. As a result. Risks Relating to Sri Lanka If regional hostilities. 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. These hostilities and tensions could lead to political or economic instability in Sri Lanka and may materially adversely affect our business. 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. Each of these countries has different securities laws and protections for investors.Enforcing civil liabilities against us. may be difficult. In pursuing business opportunities in these ASEAN countries. political and regulatory conditions may adversely and materially impact our business strategies. As a result. Tamil National Alliance. 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. Hong Kong. Pakistan. Bangladesh. 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. or judgments obtained in courts. engaged in a violent struggle against Sri Lankan government forces. Myanmar. Furthermore. the members of the Board and our officers. a terrorist group which sought to create an independent state consisting of the northern and the eastern provinces of Sri Lanka. our business could be materially adversely affected.

in 2010. Any incidents of unrest may materially adversely affect the political and economic stability of Bangladesh. particularly in more remote areas of the country.could have an adverse effect on the political and economic circumstances of the country and materially adversely affect businesses in Sri Lanka. there may be an adverse effect on the profitability of our companies in Sri Lanka. financial condition or results of operations. Sri Lanka has been exposed to significant inflationary trends. including ours. For example. In the event that inflation persists and Sri Lanka is unable to continue its current rates of growth. For an overview of the regulations of Bangladesh which affect our operations. The Commission may also seek to impose monetary penalties on Singer Bangladesh. consumer and wholesale prices in Sri Lanka have shown inflationary trends. decisions or actions are considered anti-competitive. has mitigated the negative effects of inflation. prospects. which could have a material adverse effect on our business. The next presidential election is scheduled to take place in January 2014. 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. in certain circumstances. Further. Section 5 of the Competition Act 2012 contemplates establishment of a Bangladesh Competition Commission (“ Commission ”). Once the Commission is established. From time to time. metals and crude oil. after the tribunal issued a death sentence to an Islamist party leader. as a greater portion of their disposable income is spent on daily necessities. the collapse of a garment factory in April 2013 prompted protests and calls for reform. There are regular occurrences of violence. when there may be further disruptions to the political environment of 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. pass an order restraining Singer Bangladesh from engaging in the anti-competitive behavior. general strikes and conflicts erupted resulting in deaths and injuries. Although the economic growth in Sri Lanka. If these inflationary trends continue or the inflation rate increases. financial position or results of operations. particularly prices of food. in February and March 2013. Recently. our business in Sri Lanka could be materially adversely affected. if any of Singer Bangladesh’s agreements. Our operations in Bangladesh are subject to various government regulations and changes to such regulations. This can impact the growth and profitability of the Sri Lanka business. Higher inflation in Sri Lanka impacts the ability of customers to buy our products and pay their monthly installments. 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. especially immediately following the end of the civil war in 2009. Our operations in Bangladesh are regulated by policies and other laws and regulations. see “ Appendix A – Regulation – Relevant Laws and Regulations – Bangladesh ”. 51 . protests. which we understand will be formed shortly and will be responsible for the implementation of the competition laws to ensure fair competition in Bangladesh. there have been incidents of social and political unrest in Bangladesh. 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. the Commission may enquire into the matter and. which may in turn impact our business. financial condition or results of operations. Most recently. financial condition or results of operations. In addition. Any amendments or developments to these laws or regulations could have a material adverse effect on our business.

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

In addition. will be beneficially owned by ReHo Limited and UCL Asia Holdings VII Limited. The 30% reporting obligation applies so long as we. 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. or the issuance of further new Shares by us. Thailand. and a number of people were killed or injured. Except as otherwise described in the section entitled “ Plan of Distribution – No Sales of Similar Securities and Lock-up ” in this offering document. 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. evidencing resistance to the coalition government. if any person(s).removed the Prime Minister from office. Following the Offering. Any future sale or an increased availability of Shares may negatively impact our Share price. hold 5% or more of the total voting rights in STL. were set on fire by demonstrators. This also resulted in severe traffic congestion and numerous injuries. Risks relating to Our Offering and Investment in Our Shares Sales or possible sales of a substantial number of Shares by us. we will have [ ● ] issued Shares. the demonstrations turned violent as a number of buildings. there will be no restriction on the ability of the substantial shareholders to sell their Shares either on the SGX-ST or otherwise. become the owner of our Shares conferring more than 30% of the total voting rights. of which [ ● ] and [ ● ] Shares. and the 50% takeover obligation applies so long as we. our Controlling Shareholders following the Offering could materially adversely affect the market price of our Shares. Our Shares will be traded on the Main Board of the SGX-ST. including a major shopping center and government buildings. For a description of these restrictions under the lock-up agreements we and certain of our shareholders will enter into. such person(s) may be required to make a tender offer for all shares of STL. protestors again held demonstrations calling for new elections. We cannot assure you that further protests or other violent demonstrations will not occur. or [ ● ]% and [ ● ]% of our outstanding Shares. or the perception that these sales or issuances may occur. financial condition or results of operations. In March 2010. 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. Over the course of two months. including by our shareholders. 53 . see “ Plan of Distribution ”. hold 25% or more of the total voting rights in STL. 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. The government declared a state of emergency in Bangkok and in 23 other provinces in central. in each case at the time of such acquisition or disposition of our Shares. could materially affect the market price of our Shares. whether related and/or acting in concert. These factors could also affect our ability to sell additional equity securities at a time and at a price favorable to us. northern and north-eastern Thailand. Any such occurrence could have a material adverse effect on our business. The sale of a significant number of Shares in the public market after the Offering. directly or indirectly and with related persons and/or parties acting in concert. The election of the leader of the Democrat-led coalition as new Prime Minister sparked a series of protests and demonstrations. directly or indirectly and with related persons and/or parties acting in concert. respectively (assuming the Over-allotment Option is not exercised). For six months after the Listing Date. if any such person(s) become the owner of our Shares conferring 50% or more of the total voting rights. we and certain of our shareholders will be restricted from selling Shares.

Our corporate affairs are governed by our Memorandum of Association and Articles of Association. Although we have applied for our Shares to be listed on the Main Board of the SGX-ST. there has been no public market for our Shares. The common law of the Cayman Islands is derived. The Offering Price of our Shares may not be indicative of prices that will prevail in the trading market. 54 . As such. 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. Prior to the Offering. and an active public market for our Shares may not develop or be sustained after the Offering. members of our Board of Directors or our principal shareholders than they would as shareholders of a company incorporated in another jurisdiction. there is no mechanism for minority shareholders to convene a general meeting of the company. which has persuasive. 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. changes in general economic conditions. our customers or our competitors. the Cayman Islands’ Companies Law and the common law of the Cayman Islands. but not binding.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. in part. changes in financial estimates by securities analysts. 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. There has been no prior market for our Shares. many of which are beyond our control. the operating and stock price performance of other companies and other events or factors. 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 trading prices of our Shares could be subject to fluctuations in response to variations in our results of operations. In addition. For example. from comparatively limited judicial precedent in the Cayman Islands as well as English common law. in the absence of provisions in the articles of association of the company. we cannot assure you that an active public market for our Shares will develop. including Singapore and the United States. 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. 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. authority on a court in the Cayman Islands. if you invest in our Shares. 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. We will also have to comply with the Listing Manual upon our admission to the Main Board of the SGX-ST. changes in accounting principles or other developments affecting us. You may not be able to resell our Shares at the Offering Price or at a price that is attractive to you. Our public shareholders may have more difficulty in protecting their interests in connection with actions taken by our management. there is no guarantee of the continued listing of our Shares. Our Company was incorporated in the Cayman Islands as an exempted company and is subject to the Cayman Islands’ Companies Law.

some of which are beyond our control: • • • • quarterly variations in our results of operations. announcements by us or our competitors of significant acquisitions. strategic alliances. results of operations that vary from the expectations of securities analysts and investors. additions or departures of key personnel. The Vendors and their associates could influence the outcome of any corporate transactions or other matters submitted to the shareholders for approval. 55 . fluctuations in stock market prices and volume. changes in exchange rates. 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. including financial estimates by research analysts and investors. Immediately after the Offering.Our Share price will fluctuate following the Offering. Such concentration of ownership may delay. consolidations and the sale of all or substantially all of our assets. We cannot assure you that the Vendors or their associates will act solely in our interest. joint ventures or capital commitments. or that any differences of interest will be resolved in our favor. The market price of our Shares will fluctuate as a result of. the Vendors and their associates will beneficially own in the aggregate approximately [ ● ]% of our Shares (assuming the Over-allotment Option is not exercised). a change in research analysts’ recommendations. • • • • • • • • • 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. changes in expectations as to our future financial performance. announcements by third parties or governmental entities of significant claims or proceedings against us. including mergers. the following factors. new laws and governmental regulations applicable to our industry. changes in the price of our supplied products. among others. and general economic and stock market conditions. the election of directors and other significant corporate actions. results of operations that vary from those of our competitors. prevent or deter a change in control of our Group which might have benefitted our Group’s shareholders.

results of operations and financial position. subject to compliance with the Cayman Islands’ Companies Law. distribution policies and applicable legal requirements. 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. changes in accounting standards may also affect the ability of our subsidiaries. we are subject to covenants which may restrict our ability to pay dividends. our ability to declare and pay dividends. If we are unable to pay dividends in accordance with our dividend policy. including the following. 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. 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. In the event of a subsidiary’s liquidation. In addition. if a dividend is declared in respect of these shares or if we were to dispose of any or all of these shares. at any time and for any reason. or do not pay dividends at levels anticipated by investors. under Singapore law. as we are a shareholder of our subsidiaries. we will be liable to return in full all monies paid in respect of any application for our Shares. As a result. For a description of our dividend policy. Bookrunner. the market price of our Shares may be negatively affected and the value of any investment in our Shares may be reduced. 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. we may use the proceeds to make other investments within Bangladesh. We receive dividends from our subsidiaries. please see “ Dividends – Dividend Policy ”. Underwriter and Issue Manager exercise their rights pursuant to the Underwriting Agreement to discharge themselves from their obligations thereunder. may cause a delay in or the termination of our listing: • • the Authority issues a Stop Order in respect of our Shares in Singapore. and such dividends are a source of our income. Consequently. not to pay dividends or to change our dividend policy. you will not receive any Shares and. capital requirements. Therefore. Dividend payments are not guaranteed and our Board may decide. the dividend payable or the proceeds from the sale of the shares would not be eligible for remittance from Bangladesh. 20% of the total equity of Singer Bangladesh Limited is not eligible for remittance in foreign exchange either as dividend or capital. we may be required to incur additional borrowings or raise new capital by issuing equity securities. Where the Authority 56 .We may not be able to pay dividends or realize dividends from our subsidiaries. or the Sole Global Coordinator. The occurrence of certain events. Pursuant to a permission letter by the Ministry of Industries in Bangladesh dated February 27. We are the beneficial owner of 74. There may be a delay or failure in the trading of our Shares. Furthermore. which we may not be able to do on favorable terms or at all. loan covenants. our claims against our subsidiaries will generally rank lower than those of all other creditors and claimants of our subsidiaries. However. 1979. and consequently. general financial condition. Furthermore. earnings.99% of Singer Bangladesh. the identified investors in the Offering fail to subscribe for the portion of our Shares allocated to them. • In the event of a termination of our listing. at its absolute discretion.

or the offering and sale of those rights or the underlying securities to such holders are exempt from registration under the U. Our intended use of the proceeds of the Offering may not come to fruition. See “ Use of Proceeds ”. In such event. 57 . We have no obligation to prepare or file any registration statement under the U. 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. and for other general working capital purposes. 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. Our Articles of Association provide that in relation to any rights issues of Shares. in the net asset value of our Shares. elect not to extend an offer of the Shares under a rights issue to those shareholders whose addresses. or (ii) in the case where our Shares have been issued and/or transferred to the applicants.S. the actual uses may vary substantially from our current intentions.S. Since the Offering Price per Share exceeds the net tangible assets per Share immediately after the Offering. 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. in our absolute discretion. are outside Singapore. We intend to use the proceeds from the Offering for the expansion of our product and service offerings in existing and new markets. 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. Overseas shareholders may not be able to participate in future rights offerings or certain other equity issues by us. Securities Act.issues a Stop Order and (i) in the case where our Shares have not been issued and/or transferred to the applicants. there is an immediate and substantial dilution for investors who participate in the Offering. If we offer. The Offering Price of our Shares is higher than our net asset value per Share. Securities Act is required in order for us to offer such rights to holders and sell the securities represented by such rights. We do not currently have definite and specific commitments for the entire proceeds from the Offering. to open new distribution centers for our products and services and for related working capital in new markets in the ASEAN region. and our current intentions may not materialize and may be prohibited. or cause to be offered. Securities Act. See “ Dilution ”. to our shareholders rights to subscribe for additional Shares or any rights of any other nature. if a registration statement under the U. 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. and may experience further dilution. As a result of the number and variability of factors that determine our use of the proceeds of the Offering. In addition. as we have broad discretion in the way we invest or spend the proceeds of the Offering. 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.S. 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. Accordingly. to open new channels in existing and new markets. we may enter into other transactions that may be further dilutive to investors in the future. as registered with the CDP or recorded in our register of members. we may. You will suffer immediate dilution. 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.

S. For the portion of the dividends to be paid in Singapore dollars. Our Shares have not been registered in the United States under the U. or the Directors and executive officers of our Company.S. Our Shares are subject to certain restrictions and may be subject to compulsory transfer or purchase if these restrictions are violated. if successful.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. including judgments predicated upon the provisions of the Securities and Futures Act. See “ Exchange Rates and Exchange Controls − Exchange Rates ”. Exchange rate fluctuations may adversely affect the foreign currency value of our Shares and any dividend distribution. Securities Act. or the Directors and executive officers of our Company. among other things. 58 .S. Investment Company Act. There are thus additional restrictions on the sale of Shares by shareholders who are located in the United States or who are U. in respect of our Shares will be declared in U. including judgments. including any requirement to register as an “Investment Company” under the U. and are subject to restrictions on transfer contained in such laws. including certain judgments. Investment Company Act of 1940 or under any other applicable securities law.S. we are entitled to retain and apply such proceeds as we may in our absolute discretion decide. will be paid to the shareholders whose rights or interests have been so sold. 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.S. the U. Dividends. It may not be possible for investors to effect service of process. The shareholding of the relevant shareholders may be diluted as a result of such sale. As such. by virtue of such person holding our Shares. dollars into Singapore dollars at such exchange rate as the Company may determine. within Singapore. taking into consideration any premium or discount that may be relevant to the cost of exchange.S.00 (or such other amount which we may from time to time determine in accordance with applicable laws). Each Shareholder will receive his dividend in the Singapore dollars equivalent of the U. or the Directors and executive officers of our Company. on us. dollar will affect. dollar dividend declared. subject to such other terms and conditions as we may impose. provided that where such proceeds payable to the relevant shareholders are less than S$10. Prospective purchasers should refer to the section headed “ Plan of Distribution – Selling Restrictions – United States ” and “ Transfer Restrictions ”.S. unless he elects to receive the relevant dividend in U. in the opinion of the Board. it may not be possible for investors to effect service of process.S. dollars by submitting a “Dividend Election Notice” by the books closure date. 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. on us.S. judgments obtained in Singapore courts within Singapore. Fluctuations in the exchange rate between the Singapore dollar and other currencies including the U. the Company will make the necessary arrangements to convert the dividend in U. 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. We are incorporated in the Cayman Islands and our significant assets are located outside Singapore. or to enforce against us. For further details. The proceeds of any such sale. Our Shares will be quoted in Singapore dollars on the SGX-ST. persons (as defined in Regulation S). dollars. in Singapore. at such price and on such other terms and conditions as we may determine. 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. if any.

0% of our voting Shares in any six-month period. The Singapore Take-Over Code contains certain provisions that may possibly delay. Except with the consent of the Securities Industry Council of Singapore. deter or prevent a future take-over or change in control of us. In the event this right of recall is exercised by the Vendors. 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.Singapore take-over laws contain provisions which may vary from those in other jurisdictions. except with the consent of the Securities Industry Council of Singapore. the ReHo Limited and UCL Asia Holdings VII Limited and their associates will beneficially own at least [ ● ]% and [ ● ]% of our outstanding Shares. 59 .0% (both inclusive) of our voting Shares. In addition. any person acquiring an interest.0% and 50. such a take-over offer is also required to be made if a person holding between 30. it is possible that the Stabilizing Manager may not be able to stabilize the market price of the Shares. assuming the Over-allotment Option is not exercised. See “ Plan of Distribution – Over-allotment Option – Price Stabilization ” and “ Plan of Distribution – Share Lending Agreement ”. We are subject to the Singapore Code on Take-Overs and Mergers (the “ Singapore Take-Over Code ”). respectively.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. defer or prevent a change in control of our Company or a successful offer under the Singapore Take-Over Code by another person. its provisions could substantially impede the ability of the shareholders to benefit from a change of control and. Under the Singapore Take-Over Code. acquires additional voting Shares representing more than 1. either on his own or together with parties acting in concert with him. whether by a series of transactions over a period of time or not. 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. may materially adversely affect the market price of our Shares and the ability to realize any benefits from a potential change of control. Additionally. in 30. 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. either on his own or together with parties acting in concert with him. While the Singapore Take-Over Code seeks to ensure an equality of treatment among shareholders. as a result. immediately following completion of the Offering.

We will not receive any of the net proceeds from the sale of the Vendor Shares by the Vendors. If the Over-allotment Option is exercised in full. approximately [ ● ] Singapore cents to open new distribution centers for our products and services and for related working capital in new markets including Myanmar. including the expansion of our furniture offering and manufacturing capacity in Sri Lanka. 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. Bangladesh and Pakistan (see “ Business – Strategies – Introduce new brands and products ”). the net proceeds from the Offering (after deducting underwriting commissions and estimated offering expenses payable by us and the Vendors. Bangladesh and Pakistan (see “ Business – Strategies – Introduce new brands and products ”). expansion of our IT offering in all markets and expansion of our financial services offering in Sri Lanka. • 60 . Bangladesh and Pakistan. nor will we receive any proceeds from the exercise of the Over-allotment Option granted by the Vendors. consumer needs and consumer tastes in each country. the actual allocation may vary substantially between different countries. we intend to use the following amounts for the following purposes: • approximately [ ● ] Singapore cents for the expansion of our product and service offerings. 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.USE OF PROCEEDS Based on the Offering Price of S$[ ● ] for each Offering Share. the actual allocation between our Group’s geographic operations and/or various initiatives will depend on the response of the local markets to the initiatives. including the expansion of our furniture offering and manufacturing capacity in Sri Lanka. including transactional e-commerce sites (see “ Business – Strategies – Increase and enhance our online presence ”). For each Singapore dollar of our net proceeds from the Offering. the net proceeds from the Offering will be approximately S$[ ● ] million (US$[ ● ] million). approximately S$[ ● ] million (US$[ ● ]) to open new distribution centers for our products and services and for related working capital in new markets including Myanmar. expansion of our IT offering in all markets and expansion of our financial services offering in Sri Lanka. products and/or services due to the competitive environment. Cambodia and Laos (see “ Business – Strategies – Penetrate additional markets in the ASEAN region ”). assuming that the Over-allotment Option is not exercised) will be approximately S$[ ● ] million (US$[ ● ] million) of which the net proceeds from the Offering due to us will be approximately S$[ ● ] million (US$[ ● ] million). and approximately S$[ ● ] million (US$[ ● ]) for general working capital purposes (see “ Business – Strategies ”). • • • Within each purpose above. Bangladesh and Pakistan. Based on our past projects and experience.

and approximately [●] Singapore cents for general working capital purposes (see “Business – Strategies”). Advertising and printing expenses . 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. and our application for listing. . . . 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 . . . In the event that we decide to re-allocate our net proceeds from the Offering for other purposes. including transactional e-commerce sites (see “ Business – Strategies – Increase and enhance our online presence ”). . and provide a status report on the use of proceeds in our annual report. . such amounts proposed to be provided for the items above will be provided out of funds generated from our operations. . . In the opinion of our Directors. . Pending the use of our net proceeds in the manner described above. Expenses We estimate that the expenses payable by us in connection with the Offering. as our Directors may deem appropriate in their absolute discretion. will be approximately S$[ ● ] million (US$[ ● ] million). . . . . . . . . . . . The announcement will state whether the use of the proceeds is in accordance with the stated use and the percentage allocation disclosed above. 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. [●] [●] [●] [●] [●] [●] [●] [●] [●] [●] 61 . . . Professional and accounting fees . . . . . . . no minimum amount must be raised by the Offering. . .sgx. . . . . 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). we will publicly announce our intention to do so through a SGXNET announcement to be posted on the Internet at the SGX-ST website. . . . . . . In the event the Offering is canceled. Total . http://www. . . Other offering related expenses. • 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. . We intend to make periodic announcements on the use of proceeds as and when material amounts of the Offering proceeds are disbursed. . .com .• approximately [ ● ] Singapore cents to open new channels of distribution in our existing and new markets.

Underwriter and Issue Manager. Bookrunner. Underwriter and Issue Manager. Bookrunner. underwriting fees amounting to [ ● ]% of the total gross proceeds from the sale of Issue Shares. Bookrunner. The aggregate expenses of the Offering (not including the Sole Global Coordinator. Underwriting fees of S$[ ● ] for each Issue Share are payable by us. See “ Plan of Distribution – The Offering ” for a description of the commissions payable in connection with the Offering. Bookrunner. Underwriter and Issue Manager. pay the Sole Global Coordinator. if it is to be paid to the Sole Global Coordinator. We and the Vendors may. as compensation for their services in connection with the Offering. underwriting fees amounting to [ ● ]% of the total gross proceeds from the sale of the Vendor Shares and the sale of the Additional Shares (if the Over-allotment Option is exercised). respectively. Bookrunner. as compensation for their services in connection with the Offering. at our sole discretion. Underwriter and Issue Manager an incentive fee of up to [ ● ]% of the gross proceeds from the offering of the Issue Shares. will amount to up to S$[ ● ] per Share. 62 . the Vendor Shares and the Additional Shares. The Vendors will pay the Sole Global Coordinator. Underwriter and Issue Manager’s underwriting fees) are estimated to be S$[ ● ] million to be paid by us (and not shared by the Vendors).We will pay the Sole Global Coordinator. The additional incentive fee.

and US$9. Each Shareholder will receive his dividend in the Singapore dollars equivalent of the U.85. See “Notice to Investors – Forward-Looking Statements”. The CDP or the Company shall not be liable for any loss arising from the conversion of dividends 63 . dollars into Singapore dollars at such exchange rate as the Company may determine. 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. the Sole Global Coordinator. Prospective investors are cautioned not to place undue reliance on these forward-looking statements that speak only as at the date hereof. We will declare dividends in U. and in the financial period from January 1. We are not permitted to pay dividends in excess of the amount recommended by our Board of Directors. This amounted to dividends per share of Singer Asia equivalent to US$5. upon the receipt of dividends and other distributions from our subsidiaries. warranty or prediction with respect to the accuracy of the underlying assumptions by us.54 and US$11.0 million.S. Underwriter and Issue Manager.7 million and US$11. amount and form of future dividends.5 million. unless he elects to receive the relevant dividend in U. our capital expenditures and other investment 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. if any. and US$8. dollars. taking into consideration any premium or discount that may be relevant to the cost of exchange. the Vendors. Past Dividends No dividends have been declared by Sewko to date. We are a holding company and we depend. other investment and growth plans. US$15. associates and jointly controlled entities to pay dividends on the Shares. For the portion of the dividends to be paid in Singapore dollars. We may pay all dividends out of our profits or out of our share premium account. our future prospects. All dividends we declare must be approved by an ordinary resolution of our shareholders at a general meeting. dollar dividend declared. 2011 and 2012.S.DIVIDENDS Statements contained in this section that are not historical facts are forward-looking statements. or any other person. In the financial years ended December 31. except that our Board of Directors may declare interim dividends without the approval of our shareholders. respectively.5 million. Bookrunner. the Company will make the necessary arrangements to convert the dividend in U. in part. our Company’s Board of Directors will consider. Under no circumstances should the inclusion of such information herein be regarded as a representation. among other things: • • • • • • our results of operations and cash flow. respectively. dollars by submitting a “Dividend Election Notice” by the books closure date.44. 2010. US$15. Singer Asia declared and distributed dividends of approximately US$5.39.S. Dividend Policy We do not have a fixed dividend policy. our expected financial performance and working capital needs.S. 2013 to date. When making recommendations on the timing.

results of operations. The form. dollars into Singapore dollars.S. provisions of applicable law and other factors which our Board of Directors may deem relevant. 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. dollars. The declaration of any future dividend will be subject to the decision of our Board of Directors. frequency and amount of future dividends (if any) on our Shares will depend on our earnings.S.payable to Shareholders from U. each Shareholder may elect to receive his entire dividend in U. Save for approved depository agents (acting as nominees of their customers).S. dollars and shall not be able to elect to receive dividends in a combination of Singapore dollars and U. 64 . contractual restrictions. financial position.

. . 2013 Actual (1) As adjusted (2) US$ million Cash and bank balances . . . . . . . .2 million was used to repay our current unsecured and non-guaranteed borrowings. . . . . . . . . . . . . . . . . Current portion of loans and borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . .0 4. 2013. . . . . . Reserves . . . . . . . . . . .1 [●] [●] [●] [●] [●] [●] [●] [●] [●] [●] [●] [●] 28. assumes net proceeds of US$[●] from this Offering. . . . . . . . . . . . . . . . . . . . .8 As at September 13. . . . . . . . . . . . . . . . . . . .CAPITALIZATION AND INDEBTEDNESS The table below sets out our capitalization and indebtedness based on the financial statements of our Group as at July 31. . . . . . . . Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . .9 4. . . . . . . Total loans and borrowings . . . . . . . “Selected Financial Data ”. Share capital . . . of which US$9. . . . . . Unsecured and non-guaranteed . . . As at July 31. . . . . . . . . . Share premium. . . . . . . . . . . . . . .1 164. . . . . . . . . .1 – 32. . . . . . . . . . . . . . . other than the increase in non-current unsecured and non-guaranteed borrowings from the issue of LKR1. . . . . . . . . . . . . . . . 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 ”. . . .3 52. . . . . . . . . . . . The information in this table should be read in conjunction with the “ Use of Proceeds ”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Secured and guaranteed . . . . . . . . . .6 53. . . . . . . . . . . Unsecured and non-guaranteed . . . . .4 78. . . .7 327. . . . . . . . . 2013. . . . . . “ 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. . . . .6 73. . . . . . . . . . . . . . 65 . . . Non-controlling interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9 163. . . . . . Notes: (1) (2) Total capitalization is total loans and borrowings and total equity. . . Retained earnings . .25 billion (equivalent to US$9. . . . . .5 million) of unsecured redeemable debentures by Singer Finance (Lanka) PLC. . . . . 18. . Total capitalization . . . . . . . . . . Capitalization. . . . . . . . . as adjusted. . . . . . Secured and guaranteed . . . . . . . . . . Non-current portion of loans and borrowings . . . . there were no material variances in our total long-term debt and total equity as compared to the amounts as at July 31.

. . Total Consideration (US$) 3. . . . Such dilution is illustrated in the table below. . . .726 61. . . . . . . . Dilution in pro forma net asset value per Share to new investors . Our net asset value per Share as at March 31. . Net asset value per Share is determined by subtracting our total liabilities and minority interests from our total assets. . . .200. Net asset value per Share as at March 31. . . . . . . . The Offering Price of S$[ ● ] per Offering Share exceeds the pro forma net asset value of S$[ ● ] per Share as at March 31. . . UCL Asia Holdings VII Limited . . provided that for each year from the date at which the Scheme is implemented. . . . . . . . . .0% of our total issued share capital (excluding treasury shares) on the day preceding the relevant date of the grant. . . Increase in net asset value per share after the Offering . . . .880. . . . . . .965. . . . . . . . . . . . .000. . . S$ [●] [●] [●] [●] S$0. 20. . . . New investors in the Offering. . .27 [●] Number of Shares Acquired Gavin John Walker . . .20 0. . . . . . .29 S$ 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. .27 0. . . . . . . . . there is an immediate and substantial dilution to investors in the Offering. . . . Offering Price per Share . . . . 2013. 2013 . Since the Offering Price per Share exceeds the net asset value per Share after the Offering. . . . .0% of the total issued share capital of our Company (excluding treasury shares) on the day immediately preceding the date of the relevant grant. . . . . . . . . . . and dividing the difference by the number of Shares deemed to be outstanding on the date as of which the book value is determined. . . Percentage dilution in pro forma net asset value per Share to new investors . . . . ReHo Limited . . 2013 was S$[ ● ] per Share. The following table summarizes the total number of Shares acquired or to be acquired by our Directors or key management. . . . . . . . . the issuance of the Issue Shares in the Offering by approximately [ ● ]%.000 [●] 66 . . . as adjusted for the issuance of the Issue Shares in the Offering . .940 47. . . . . . . . . . . . . . . . . Pro forma net asset value per Share as at March 31. .000 172. . . . . . the total consideration paid by them and the average effective cash cost per Share to our shareholders and to our new public shareholders pursuant to the Offering. . .DILUTION New investors subscribing for and/or purchasing the Offering Shares at the Offering Price will experience an immediate dilution in net asset value per Share immediately after the completion of the Offering. .377 [●] Effective Cash Cost per Share (US$) 0. . . . . . . . . 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. . . . . . . . . . . . . . . . . . .000 227. . . .800. . . . the number of Shares to be issued pursuant to options granted under the Scheme must not exceed 1. . . . . . . .064. . . . 2013. . . . . . 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. . . . .

For further information regarding the interest of our substantial shareholders. 67 . there has been no acquisition of any of our existing Shares by our Directors or key management. please see “ Share Capital and Shareholders – Ownership Structure ”. or any transaction entered into by them which grants them the right to acquire any of our existing Shares.Save as disclosed above. during the periods of three years prior to the date of lodgment of this offering document by the Authority. substantial shareholders or persons connected to them and/or their associates.

.239 1. . . . . . . . .S. certain information concerning the exchange rates between the Singapore dollar and the U. . . . .238 1.221 1.245 1. . . . . 2012 . . . .244 1. . . . April 2013 . While we.284 1. . . . . . . . . .259 1. . excluding non-trading days. dollar was U.320 1.266 1. . . . . . . . . . . . Closing Exchange Rates Singapore Dollar per U. .297 1. . . .240 1.00=S$1. as quoted by Bloomberg L. .275 1.283 1. . .P. . . . . .264 1. . . .254 1. . and that the information has been extracted accurately and fairly from such database. . .271 1. . . . . June 2013 .273 1. .424 1. . . .282 1. . . . .S. . . . . . . dollar. excluding non-trading days. . . . . . . March 2013 . . February 2013 . Bookrunner. 68 .235 1.S. . . . . Dollar Average Fiscal year (1): 2010 .227 1.268 1. the Vendors and the Sole Global Coordinator.272 1.240 : 1. . for purposes of Section 249 of the Securities and Futures Act. .232 1.268 1.271 1. . . . . Month (2) High Low Period End 1. . August 2013 . . . . . .260 1. . 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. . to the inclusion of the information extracted from its database. . . . .228 1. . . .297 1. 2013) . . . . . . .242 1. . .246 1. . . . . . .249 1.239 1. . 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. . . . . . . The average rates are calculated using the average of the closing exchange rates on each day of the period in question. . and is therefore not liable for such information under Sections 253 and 254 of the Securities and Futures Act. . . . for the periods indicated. . . . . . .EXCHANGE RATES AND EXCHANGE CONTROLS Exchange Rates The table below sets forth. . . .P. . . . . . . . .269 January 2013 .$1. . . . . . . May 2013 . . . The closing exchange rate on the Latest Practicable Date for the Singapore dollar to the U. . . .P. . .238 1. . . . Bloomberg L. . . . . .221 1. . . .282 1. . . the Vendors and the Sole Global Coordinator. . .’s database has been reproduced in its proper form and context. . . . neither we.242 1. . . . .251 1. Source: Bloomberg L.232 1. . . Three-month period ended March 31. See “General and Statutory Information – Sources”. .269.251 1. . . . . .222 1. . . . . . . . . Underwriter and Issue Manager have taken reasonable actions to ensure that the information from Bloomberg L. . . .201 1. July 2013 .216 1. .238 1. . . September 2013 (through September 13. . .240 1. 2013 . . . .239 1. .257 1. . . . . .276 1.S. . has not provided its consent. . . . . . . . Bookrunner.P.359 1. . . . . and rounded to three decimal places. . . 2011 . .281 1.

The laws. Singapore Currently. (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.000 per year. You should consult your own legal advisors concerning the exchange control consequences of your particular situation.V. for example: (a) investment in foreign securities (such as bonds) by resident companies of Curaçao not exceeding ANG 250. 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. and (b) purchase and sale of real estate. may change at any time and any change can be retroactive. regulations and interpretations. This description is based on laws. De Nederlandsche Bank N. Hong Kong Currently.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. no foreign exchange control restrictions are enforced in the Netherlands. All current transactions can be done without the permission of the Central Bank except for distribution of profits and dividends. Curaçao Foreign exchange in Curaçao is regulated by the Foreign Exchange Regulation Curaçao and Sint Maarten (2010). India A discussion on the relevant foreign exchange control laws is set out in “ Appendix A – Regulation – Relevant Laws and Regulations – India ”. Netherlands Currently. 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. however. 69 . Generally all capital transactions are prohibited without a license from the Central Bank of Curaçao and Sint Maarten. no foreign exchange control restrictions are enforced in Singapore. regulations and interpretations now in effect and available as at the date of this offering document. Certain capital transactions do not require a license. 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. Bangladesh A discussion on the relevant foreign exchange control laws is set out in “ Appendix A – Regulation – Relevant Laws and Regulations – Bangladesh ”. no foreign exchange control restrictions are enforced in Hong Kong.

Sri Lanka A discussion on the relevant foreign exchange control laws is set out in “ Appendix A – Regulation – Relevant Laws and Regulations – Sri Lanka ”.Pakistan A discussion on the relevant foreign exchange control laws is set out in “ Appendix A – Regulation – Relevant Laws and Regulations – Pakistan ”. 70 . Thailand A discussion on the relevant foreign exchange control laws is set out in “ Appendix A – Regulation – Relevant Laws and Regulations –Thailand ”.

. Profit for the year/period . . . . . . . . .862 271 (4... Earnings per share (cents) . . . .937 1. . . . . . . .449 5. . .304 406. . . .. . .924 9. .400 Cost of sales .825 (67.436 8.99 [●] Results from operating activities . .439) (815) 58. .440) (269. . . . . . . . . . . . . Net finance costs . Our financial statements are reported in U. Other income . .317) (109. .342) 35. . . .. .490 35. . . . .. . . . . .995) (16. . . For example. ..063 9.904 775 (30. 2012 and 2013 included in this offering document. . . . . .501 16. . Finance income .649 15. . .759) Gross profit . .. .180) (27. .272 1.596) – 8.135) – 31. . . . .641) (3. . .529) 5. 121. . . . . . . . . Non-controlling interests . . . . . . . . . .925) 26. Profit for the year/period . . . .501 4. . . . . 326. U. .460 (12. .813 448 (86.013 3. 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. .699 318 (3. .76 [●] 52. . . . . . . . .078 39.867) (4...243) (252. ..301 166. . . . . .577 26.266 183 8. . .S. . dollars and are prepared and presented in accordance with IFRS. . . .575) (2. .649 3. .948) (112. . . Profit before income tax . . Selling and administrative Other expenses ..S. . . . . . . . . Earnings per share as adjusted for the Offering (cents) . .181) (11.426 (8. Summary Combined Statement of Income Information Three months ended March 31.149 (17.945 0.474 (2. 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. .. . . . . . . . (205.813) (64.749) 21. . . .846) – 35. . . . . . .475 21. Profit attributable to: Owners of the Company .543) (3.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..895 (12.012) (805) 12.061 154.553 6. GAAP. . . . Finance costs.493 1. . .23 [●] Year ended December 31. . Income tax (expense)/credit . . .225) – 8. . . . . . .313) (3.449 1... Share of profit of equity accounted investees (net of income tax) . . .398 (9. .002 1. We have prepared the unaudited condensed combined interim financial statements on the same basis as our audited annual combined financial statements..641 25. . .385) 1. . . . . .S. . . . ..533 1.040 796 (12. 2012 and 2013 have been derived from our unaudited condensed combined interim financial statements for the three-month periods ended March 31. . the accompanying notes and the related auditors’ report included in this offering document. IFRS reporting practices and accounting principles differ in certain respects from U. .18 [●] 11. . .174 6. 2010 2011 2012 US$(’000) Revenue.. . .945 4.921) 42. .. 2010.46 [●] 42..553 26. . . . . . The selected combined financial data as at and for the three-month periods ended March 31. . . .240 47.891 104. .741 435. . expenses .943 5.595) (11. . . . GAAP and IFRS apply different criteria in determining whether to consolidate an investee company. . . . . 71 .. . . . 2012 2013 110. . The selected combined financial data as at and for the years ended December 31. .

plant and equipment . . .686 327. . . . . 2013 . . Intangible assets and goodwill . .687 15.851 2. .223 12. . . . . . . . .665 100. . . . . . Total liabilities . .136 264. . .717 54. . Total equity and liabilities . . . .854 154.508 10.171 10 52. . .627 61. EQUITY AND LIABILITIES Equity Share capital . . . . Loans and borrowings . .119 303. . .356 131. . . . .340 145.269 12. . . .880 112. .895 373.310 2. . Warranty provision . . . . .171 52. .947 10. . . . Total assets . . . . .895 6. .934 4. . . . . . . .448 9. Trade and other receivables over one year . .881 49. . .956 39.054 22. .195 8. . . . . . .850 93. . Other non-current liabilities . . . . . . . . . . .Summary Combined Statement of Financial Position Information As at December 31. . Total equity . Current liabilities Bank overdraft . .872 71. . . . . .471 1. . . .705 2. .906 37. . . . . . .073 12. . 72 . . . . . Deferred income . . . . . . . . . .987 7. Trade and other receivables.619 82. . . .418 62. . .039 28. . . 10 68. Reserves .622 132.289 4. . . .858 59.098 3. . .229 12. . . . . . . . . . .655 1. .418 10 41. . .523 87. .946 96. 2010 ASSETS Non-current assets Property.243 99. . . . . .969 130.052 40.169 53. . . . . .557 132 95 3. .798 15. .888 187.125 9.303 81. . . .161 1. . . . . . . . Total current liabilities. . . . . . . . .110 4. .914 68. . . . .350 118. Warranty provision over one year Deferred tax liabilities. . .673 110. .638 1. .002 98.497 8. . . . 2011 2012 US$(’000) As at March 31. .094 44. . .015 401.896 158. . .181 779 1. . . . .842 5. . .555 6. . . .701 159. . . . . . . . . Current assets Inventories .782 4. . .693 60. . . Share premium . . . .050 242. . .994 208 103 2. . Total non-current liabilities .430 217.231 5. . . Deferred tax assets . .824 23. .503 164 458 2.051 140. . . . .433 14. . .512 373. . . Other non-current assets .235 7. . . . . . . . . . . . . . . . . . . . . .185 1. . . . Cash and cash equivalents . . . .294 125. . . .236 203. Employee benefits .261 22. Deferred income over one year . . . . . . .022 229. . .109 37. . . . .901 165 500 2. Retained earnings . .865 Total non-current assets . . .018 41.104 40.739 18. . . . . .464 53. . . .693 10 41.147 61. . . . . . . . . .186 61. . Trade and other payables. . . . .306 4. 54.548 109.007 36. . .250 11. .821 327. . . .791 59. . . . .865 Equity attributable to owners of the Company . . . . .019 1. . . Current tax liabilities. .301 46. .712 38. .478 18. . . .265 22.750 106. Other current assets . . . . . . .454 303. . .761 401.495 4. Total current assets . . .458 213. .140 4.935 172.928 5. . . .449 55. .294 40.349 62. .315 55. . . Non-current liabilities Loans and borrowings . .510 1. . . . . . . . .147 43. .205 49. .947 167. . Non-controlling interest . .915 137. . . . . . . .895 7. .

2010 2011 2012 US$(’000) Cash flows from operating activities Profit for the year . Gain on sale of investments . . .529 12. . . . . . Income tax paid . .508) 15. . . . . . Tax expense/(credit) . . .320 1. .081) (10. . . . . .905) (10. plant and equipment. .866) (6.846 8.763) (2. . . Adjustments for: Depreciation .266 (11.513 73 . . . . . . . . . . . .502) (34. . . . . .193 Changes in: Inventories . . . . . Non-cash compensation . . . . . . .893) 11. . Provision and employee benefits. . . .Summary Combined Statement of Cash Flows Information Three months ended March 31. .585) (2. . .225 2.217) (275) (5. . .333) (1. . . . . .224) (17. .342 37.637 12 – 91 (1.081 – 21 – – – (87) 4. . . . . . . . . . .059 35. . . . . . . .995 24 – – – – (126) 11. . . . . .135 9. . . .576) (8. . Trade and other payables . . . . . . . . . .624) 3. . . Amortization of intangible assets and goodwill .819 (10. . . . . . . . Interest paid . . .469) (14. . . . . . . . . . . .041 (4.596) (5. 2012 2013 Year ended December 31. .607) (1. .325 (1. (9. .159) (24. . . . . Gain on sale of property.884) (1. 3. . . . .649 26. . .671) 8.383) (1. . . . . . . . . . .509 (662) 3. .426 3. . .945 8.925 56. . . .385 12. .463) (14. .985) (31. . .596 (183) 13. . . . .181) (3. . . . . Deferred income. . .449 894 – – – – – (70) 3. . . . .496) (91) 11. . . . . Other current and non-current assets . . .877 (11. . plant and equipment.240) (24. . . .553 21. Net finance costs . . . . .523 1.073) 6. . . . . .138) (1. . .480 – 453 – – – (146) 16.749 46. . . .182 398 (239) 8. . . Impairment loss on property. .667) (857) 162 (21.022 437 529 (18. . Share of profit of equity accounted investee . . .728) (11. . . . . . .501 5.994) 13.457) 5. Cash from/(used in) operating activities . . . . . Net cash (used in)/from operating activities .978 (16. . . Trade and other receivables .884) (644) (10. .379) 2. . . .

021) Three months ended March 31. .060) – 1. . . . plant and equipment.258) – 271 711 1. Proceeds from sale of investments . . . Distribution to non-controlling interests . . . . . . . . . 2012 2013 318 128 1. .943) (15. . .779 423 (35. . . . . . .504 (2. . Acquisition of property. . . .934) (5. . . . . .845 (2. . . . . . .877 – (12. . . . . Net cash from/(used in) investing activities . . .772) 6. . . . . .545 2.123 74 .700) (5. .985 (5. . .201) (3. . .073) (4. .957) (13. . Proceeds from share options exercised .546 2. . . . . . .500) (379) 29. . . . . . . .275 (1. . .962 3. .643 (20. . . . .258 6. . . . plant and equipment .460 287 3. . .470) 12. . Repayment of borrowings . Net cash (used in)/from financing activities .890) 796 583 32. . . .548) – 30. . .413 327 (10. . . . . . .890) – (924) 4. . 7. . .515) (2. . . . .545 (2. . . .246 (7. . . . . . .940 672 (1.676) (1. Cash and cash equivalents at December 31/March 31 . . . Proceeds from sale of property. . . .274 (2.634) (4. .669 30. . Distribution to owners .943) – 1.711) – (923) (9.360 – (3.149 381 5.928 – (1.996) (11. . .801 6. . .398) 1. . . . .398) 463 5.435 30. Effect of exchange rate fluctuations on cash held .086 14. Acquisition of intangible assets . . . Net increase/(decrease) in cash and cash equivalents .448) 8. Cash flows from financing activities Proceeds from borrowings .545 (4.274 6. .Year ended December 31. . .704) 62. . . . . . .921) 463 279 11. .294 11. Cash and cash equivalents at January 1 . . . . . 2010 2011 2012 US$(’000) Cash flows from investing activities Interest received . . . . .

. . . . . . .. . . . . . . .. . Revenue growth at constant exchange rates (3)(4) .9% 25. . . . . Group . . . . . . . . . . . .205 12. . . . . . . . . . closed or renovated during any of the periods being compared are excluded.6 203. . . EBITDA (US$) (’000) EBITDA margin (3)(7) (3)(6) 35. . . .4% 6. . . .4% 37. . . .8% 7.1% 30.. . . .. . .034 5.5% 9. . ..2% 21. ... . . .785 3. . . . . .0% 6. . .. .152 (4.5% 38. .964 12. . . .9 207. . is a non-IFRS financial measure often used by retail companies to measure the performance of their existing retail stores. . .528 11. . Pakistan . . .. . . . . . .289 2. .205 12. . . . . .6% 13.181 11.9% 56. . . Adjusted EBITDA (US$) (’000) (3)(6) . . . . . . . .7% 20. . . . . . . India . . . Adjusted EBITDA margin Notes: (1) (2) (3)(7) .4% 393. . . .4% 46. . . . .3% 3. . . .8% 24. . . “Like-for-like” sales growth. .614 3. . . . .. . . . . . .Other Financial Data Three months ended March 31.1% Sri Lanka . . . . .1% 19. . . . . . 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. . . . .325 23. . . . . . . . .088 2.2 56. . . . .2% 57. .. . . . . . also known as “same store” or “comparable stores” sales growth.4% 27. . . . .7)% 8. .9% 18. Thailand .0% (9. . . .. . .6% 32. . . . .920 3. . .. .243 2. . . . . .. . . . . . . . . Pakistan . . .2% 38. . . .7 141. . .0 304. . . . . . . . . Gross margin is calculated by dividing gross profit by revenue.4% – – – – – 270. . . . Non-IFRS Measures Like-for-like sales growth (2)(3) Sri Lanka .7% Year ended December 31. . . 2010 Net sales growth (%) . . .8% 51. .159 3. . .9% 37. . .3% 24.5% 27.9% 2012 5. . .9)% 5. . 75 . .626 2. . .5 276. . .. . . . .6% 38. . .2% 37. . . .5% 29.6% . Gross margin (%) (1) 2011 25. . . .. . . . Pakistan . . .. . .4% 25. .8% 56. . . . . . . .4% 8. . .. Revenue per square meter (US$) (3)(5)(8) . .2% 37. . . .8% 2. . . . . . . .3% 27.9% – – – – 13.. . . . . . . .074 3.6% 2. . 2013 5.1 106. . . . .677 18. . . . . . .. . . . .528 11. India . . .3% 28. . Sri Lanka .891 3. . . . . . . . . . .2% 32. . .4% 38. . . Bangladesh .7% 12. .5% 37. . . . .4% 363. . . . . . . . . . . . . . . Revenue growth .2 336. .7 168. . . 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). . Revenue per square meter (local currency) (’000) (3)(5)(8) Sri Lanka . . . . . .. .397 2.6 46. . . . .0% 24. .529 3. . . . . Pakistan . . . . . India .6% 25. . Bangladesh . . . . . . . Bangladesh . . . . .0% 56.3% 20. ..964 12. .7 236. . . . . . Stores that are opened. Bangladesh .8% 3. . . . .0 61. . . .

by revenue. . . .. . . . . .964 Three months ended March 31. India and Thailand. .5 2011 850 2. . . . Add: Finance costs . .181 – 46. . . Number of customer accounts . . . . .266 4. 76 . IFRS. .797 183 76. dollars that we use to translate local currency revenues for the comparable reporting period of the prior year. 2013 (5) (6) (24. . . .. . .426 17. or presented in accordance with. .460) – 46. . . Operational Data As at December 31.S.102 (271) – 13. . .181 3.. . . . . .211 187 78. . . . . .677 31. . . .496) 37. . On July 1. .600. . Less: Share of profit of equity accounted investee. Independent dealers (1) As at March 31. . . . . Revenue per square meter is calculated by dividing revenue by the weighted average selling area (in square meters). .5 million following the disposal of our affiliate company in ILFS. .1 812 1. . .(3) (4) This financial measure is a supplemental measure of our performance and liquidity and is not required by.149) – 56..895 12. . . . .200 612. . . . Add: Depreciation and amortization . .964 (7) (8) EBITDA margin and Adjusted EBITDA margin are non-IFRS financial measures and are calculated by dividing EBITDA or Adjusted EBITDA. . 2010 Number of retail stores . . Direct selling depots. 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. . . . The weighted average selling area is the average of our aggregate selling area at the end of each month during the financial year. 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$24.435 200 82. . dollars using the same average foreign currency exchange rates for the conversion of revenues into U..018 176. . . . . . Total store area (square meters) . GAAP or any other generally accepted accounting principles.762 and BDT192.S. Bangladesh. .995 (1. . . .9 Independent dealers in Sri Lanka.590 141. . EBITDA . respectively. . . . . . . . . . .528 35.933 (1.S. . EBITDA is a non-IFRS financial measure and represents results from operating activities before depreciation and amortization.995 3. . .711 683.558 211 86. . . . . Less: Finance income . We calculate the change.205 8. 2012 909 2. U. . . . of the current period revenues using the prior period exchange rates versus the prior period revenues. as a percentage. . . .637 (796) (1. . The 2010 revenue per square meter for Bangladesh would have been US$2. . . .867 1. 47. Less: Gain on sale of investments in associate . Bangladesh amended the regulations for VAT resulting in the exclusion of VAT from revenue. if this amendment to the VAT regulations had been in place from January 1. . 2010.528 – 56. . .414 679. Installment accounts receivable (Gross) (US$ million) .595 3.. . .895 218..240) 61. Adjusted EBITDA . .422 2013 922 2. 2010. . Note: (1) 708.040 206. . 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 .398 12.8 . . net of income tax . .205 – 13. .. Pakistan. .

Overview We are the largest retailer of HCD products in Sri Lanka. and our unaudited condensed combined interim financial statements as at and for the three-month periods ended March 31. In addition. Samsung. Bangladesh and Pakistan1. Prestige. consumer electronics. we operate a direct selling business with 211 direct selling depots and 2.5 million. IT products. we provide transaction-based financial services such as bill payments. We are the leading provider of HCD consumer credit in Sri Lanka. including home appliances. leasing facilities. Our ability to provide customers a complementary mix of products. which may differ in certain significant respects from generally accepted accounting principles in other countries. 2013. 2013. Tefal. has enabled us to realize meaningful synergies and grow our Company successfully. Grundig. Skyworth. services and brands. some of which are under exclusive distribution arrangements. and have 922 stores and 2. through our extensive distribution network. Onida. TCL. As at March 31. inward remittances. including hire purchase. Our brand offering includes both house brands as well as widely recognized third-party brands including Apple. we processed on average nearly one million consumer finance and financial services transactions per month. substantially all of which can be purchased through consumer credit which we provide. we have increased our retail store base by 97 stores to 909 stores. We have prepared our combined financial statements in accordance with IFRS. Philips. including consumer finance to purchase these products. as at March 31. During the period from 2010 to 2012. 77 . This discussion and analysis contains forward-looking statements that reflect our current views with respect to future events and our financial performance.724 sales canvassers. Pakistan and India. quality and consumer finance. 2010. Hitachi. we have established a strong brand identity that our customers associate with trust. with total installment accounts receivable of US$218. as at March 31. including the United States. Huawei. Bangladesh.105 independent dealers across Sri Lanka. We have operated in each of our markets for over 100 years. Beko. where consumer credit is often expensive and difficult to obtain. In Thailand. 2010. we managed 679. 2011 and 2012. Bangladesh and Pakistan 2. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of any number of factors. 2012 and 2013. 2011 and 2012. We offer a wide variety of credit products. our independent dealer network by over 600 independent dealers and the 1 2 Source: The Nielsen Company. 2013. Source: The Nielsen Company. Dawlance. mobile phone reloads and acceptance of public deposits as well as extended warranties and customer protection plans. 2012 and 2013. and group sales (offered by partnering with organizations to provide easy payment terms to their employees) for the purchase of our products. We believe that through our long-term presence in the region. You should read the following discussion together with our audited combined financial statements as at and for the years ended December 31. and the three-month periods ended March 31. 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 those set forth under “Risk Factors” and “Notice to Investors – ForwardLooking Statements”. In 2012. Haier. Godrej. and high-quality customer service. Videocon and Whirlpool. Since the SINGER® brand was first established in 1851 with the creation of the Singer company.895 active credit accounts. furniture and sewing machines.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.

7 million in 2011 and US$435. Our retail and consumer finance operations are therefore influenced by the state of the economies in our countries of operation. 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. fueled increases in private domestic consumption in 2011 and 2012. We intend to grow our business and increase profitability by expanding and enhancing our distribution platform. Our operations in Sri Lanka accounted for 45. introducing new brands and products.3 million in 2010. living standards and purchasing power increase. rate of inflation. expanding our consumer credit and financial services offerings.6 million in 2011 and US$26. Pakistan. Disposable income and confidence is affected by a number of factors. Pakistan. 2012 and the three months ended March 31. We believe that our core markets of Sri Lanka. US$46. 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.3% in 2011 and 6. and consumer perception of economic conditions and outlook. Bangladesh.9 million in 2012.3% of our combined revenues for the year ended December 31.5 million in 2011 and US$56. Conversely. Our Adjusted EBITDA totaled US$37. credit availability and confidence in the economy and result in reductions in consumer spending. Sri Lanka’s economy experienced strong growth.6% from 2010 to 2012. 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. climate and environmental disasters and poor infrastructure. salaries and wage rates. Growth may also be hindered by domestic issues including political turbulence. 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. our financial condition and results of operations are impacted by conditions prevailing in Sri Lanka. As these economies grow. fiscal policy. respectively. with real GDP increasing by 7. increases in unemployment rates. slower economic growth. US$21. 8.8% in 2012 1. favorable demographics and higher and growing disposable income among the population in Sri Lanka. These steps. including the reduction of import tariffs on vehicles and selected HCDs. more consumers have sufficient disposable income to afford our products and existing customers are able to spend more on our products. elevated debt and limited growth in disposable income may lead to a decline in consumer spending. During this time. US$406. both of which increase the size of our market and demand for our products.9% from 2010 to 2012. representing a CAGR of 15. regional and local economies and financial markets reduce consumer income.2 million in 2012. Cambodia and Laos. We believe that economic growth. Consequently. With the end of the civil war in 2009. Our Adjusted Profit totaled US$13.7% and 44. including general economic conditions. a very significant increase in foreign direct investment and the expansion of infrastructure. Bangladesh.3 million in 2010. India and Thailand.8% in 2010.number of direct selling depots by 17. namely Sri Lanka.2 million in 2010. reduced demand for our products and an increase in the delinquency rate and level of bad debts of our credit operations. such as the ASEAN countries of Myanmar. the Sri Lankan government introduced several measures to liberalize and rationalize the post-war economy. level of employment. representing a CAGR of 22. 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. In those circumstances. in addition to an accommodative labor environment. Our revenue totaled US$326. Pakistan. Nonetheless. liquidity. increasing our online presence and penetrating additional markets. Disruptions in the global. 78 . 2013.5 million in 2012. Bangladesh.

Bookrunner. and is therefore not liable for such information under Sections 253 and 254 of the Securities and Futures Act. 2011 and 2012. and thus we are also sensitive to macroeconomic conditions in Thailand. 2013. We are also sensitive to macroeconomic conditions in Bangladesh. which results in lower discretionary expenditure on items such as HCDs. 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. Successive bumper crop harvests. 0. but mitigating factors such as an increase in real wages of 3.5% in 2011 and 6.4%.1% in 2010. 6. with exports of high-technology and agricultural products driving growth. High inflation has disproportionately affected lower-income families. currency depreciation and the government’s decision to raise interest rates. we are less sensitive to macroeconomic conditions in India. Source: The Nielsen Company. respectively. We believe the impact of these measures will be temporary and corrective and in fact bode well for stable future growth. 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. 79 .1% and 27. and that the information has been extracted accurately and fairly from such database. Further.6% in February 2012 but has. High inflation results in consumers spending a greater portion of their earnings on daily essentials such as food and transport. Although impeded by the global financial crisis in 2009. to the inclusion of the information extracted from its database. Thailand’s economy has been particularly susceptible to global economic conditions.3% of our combined revenues for the year ended December 31. recovery in construction and sustained growth in the services sector have helped improve and stabilize the economy.4% in 2010. In 2010. neither we. and thus. Our operations in Thailand accounted for 21. Bookrunner. 4 5 Source: The Nielsen Company. India. Bangladesh has also experienced steady economic growth.9% in 2012 4. the Vendors and the Sole Global Coordinator.1% in 2012 2. growth in the past three years has been inconsistent. 2013.6% in 2012 1. These include inflation.9% of our combined revenues for the year ended December 31.9% and 13. See “General and Statutory Information − Sources”. the country’s well-developed infrastructure and pro-investment policies have made it a particularly attractive destination for Asian manufacturers. In recent years. 2012.8% in 2011 and 4. However. for purposes of Section 249 of the Securities and Futures Act.1% in 2012 have ensured that there continues to be demand for consumer goods. reached 11. which we believe has enabled more consumers to purchase our products consisting of sewing machines and small appliances. as at December 31.6% and 11. climate conditions (including devastating floods in 2011) and political turbulence. the Vendors and the Sole Global Coordinator. with real GDP growing by 7.2012 compared to 2010 and 2011.9% of our combined revenues for the year ended December 31. Source: The Nielsen Company. 2013. the tenth-largest economy in the world and the largest economy in South Asia. 2012 and the three months ended March 31. with real GDP increasing by 6. respectively.9%. annual household disposable income increased by 14. 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. Accordingly.1% in 2011 and 5. respectively 5.8% in 2010. strong manufacturing growth. has seen strong growth in recent years with real GDP increasing by 10.0%. caused in part by a significant rise in non-food prices. in 2012. While we. respectively. 11. High inflation. 1 2 3 Source: The Nielsen Company. decreased to 7. 2012 and the three months ended March 31. which accounted for 18. 6. Our operations in India accounted for 7. according to the Bangladesh Bureau of Statistics 3. The Bangladesh Bureau of Statistics has not provided its consent.7% and 8. 2012 and the three months ended March 31.

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. In addition. our cost of borrowing may decline while the interest rates for our consumer finance products remain fixed.0% in 2011 and 3. we purchase certain products and raw materials from international third-party suppliers in U. our cost of sales will decrease and our revenue and margins may increase. 2012 and the three months ended March 31. Accordingly. Increased borrowing costs may negatively impact our profitability because the financial earnings derived from consumer credit agreements with our customers are at fixed rates. if the prices of products and raw materials we purchase decrease due to favorable exchange rate movements. Fast population growth.S. Real GDP growth in Pakistan. 80 . the financial results as reported in the combined statement of income. 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. an increase in interest rates may increase our cost of borrowing. if interest rates decline. Local currency denominated financial results in each of our countries of operations. Indian rupee and Thai baht. Foreign exchange rates Our results of operations are affected by fluctuations in foreign exchange rates. dollars by applying the market exchange rate at the end of each financial reporting period. remained broadly stable at a 3. contributes directly to our net profit margin. 2013. we are less sensitive to macroeconomic conditions in Pakistan. are translated into U.Our operations in Pakistan accounted for 6. while we receive payments for our products and services in the respective local currencies.S. and in particular. and the assets and liabilities as reported in the combined statement of financial position. namely Sri Lankan rupee. The interest rate spread between our borrowings and the interest income we receive through our consumer finance products. Because most of our indebtedness is subject to floating interest rates. like India. 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. We do not hedge for interest rate risk. and thus. dollars by applying the weighted average market exchange rate during each financial reporting period. dollars. 1 Source: The Nielsen Company. political instability. the second largest economy among the sub-Himalayan countries which constitute South Asia. Pakistani rupee.1% in 2010. 3. 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. When the prices of these products and raw materials increase due to unfavorable exchange rate movements. Interest rates The cost of funding and our net profit margins are directly impacted by changes in prevailing interest rates. our ability to maintain an effective interest rate margin in times of volatility. we may seek to recover the increased cost by increasing product prices. Local currency denominated assets and liabilities are translated into U. Inversely.7% in 2012 1.S.2% and 5. respectively. Bangladeshi taka.2% of our combined revenues for the year ended December 31. are subject to foreign exchange rate fluctuations. Conversely.

showcase our complete product range and improve our overall business performance. As a result. We continually seek to increase our average unit selling price.3% 4. Thailand . Interest Rate Sri Lanka . our future growth may adversely affect our liquidity and financial condition.9% 2011 9.5% 9.5% 2010 10. Pakistan and India contributed 61.2% Ability to expand retail network and increase profitability Our retail network of 922 multi-format stores as at March 31. Pakistan . New stores generally take up to 12 months to reach their sales potential following our investment. Bangladesh. For example.4% 11. such as periodically changing the product offerings. in particular our cash flows.4% 2012 13.1% 13. . Bangladesh . Factors such as the proximity of the store to public transport infrastructure.4 million in 2013 relating to set up costs. we may decide to close them.5% As at March 31. product range and customer traffic through various means. . However. .5% 4. we intend to open approximately 130 more stores and renovate or relocate approximately 220 stores. We expect our new stores to require aggregate upfront capital expenditures of approximately US$4.0% to our total sales in 2012. .1% 7. furniture generally has a lower turnover per square meter but a higher profit margin as compared to IT products. floor layouts and space allocation for specific products. . 2012. Interest rates As at December 31. . . Many stores being renovated will be enlarged. . 2013 across Sri Lanka.0% 4. Bangladesh. In 2013 and 2014.3% 12. the availability of parking. .7% from 637 stores as at December 31. We did not have borrowings in India during this period.The table below sets forth selected reference interest rates in Sri Lanka.8% 9. . which we measure by sales and profit per square meter in existing stores. Product mix affects store productivity as different product categories have different profit margins and turnover volumes. 2013 14. and the volume of customer traffic affect the profile and prominence of the store. . as well as successfully expand by opening new stores. 81 . . and affect our short-term liquidity and capital resources. . 2005 and December 31. The interest rates on our borrowings are typically 0.2% 8. 2005 to 909 stores as at December 2012. Between December 31.5% 2.5% in excess of the applicable reference interest rate in a particular jurisdiction as shown in the table. and directly impact the ability of the store to capture market share. and significant working capital requirements to maintain sufficient inventories in these enlarged stores and to fund the related installment receivables. . the number of our retail stores increased by 42. if specific stores are underperforming. such as marketing and human resources. Average Weighted Prime Lending Rate Weighted Average Interbank Lending Rate Karachi Interbank Offer Rate (3 month) Treasury Bills plus 1. as well as overheads. Store locations impact store revenues. We seek to grow our same store sales. 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. 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.2% 12. Pakistan and Thailand at the dates indicated.

. . . . . . Note: (1) “Like-for-like” sales growth. . . . . . . . . . . . . . . . 2013 922 391 339 158 34 2. . . . . . . . . . . . . . . . . . . . . . . . . . . . Year ended December 31. . . . . . . . . . . .S. closed or renovated during any of the periods being compared are excluded. .529 3. . . . . . Pakistan . Like-for-like sales growth% (1) Sri Lanka . . . also known as “same store” or “comparable stores” sales growth. .088 2. 2010 Revenue per square meter (local currency 000’s) retail (1)(2) Sri Lanka . . .6 203. . . . . . . . . . . . . . .1 106. . . . .243 2. Pakistan . . 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. . . . . . . . . ..4% 6. . . . . . . .7 141. . . . . . . . . . . . . . . . . . . . . . . . . .4% 25.. dollar. . . . . . . .159 3. . . . . . . . . . . . . . . . . . . . Sri Lanka . . . Revenue per square meter (US$) retail (1)(2) 2011 2012 270. . .626 2.2 336. . . . . . . . . Pakistan . . . 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). . . Pakistan . . . . ..0 2. . . . . .7 236. . . . . . 2011 5. is a non-IFRS financial measure often used by retail companies to measure the performance of their existing retail stores. . . . . . . .034 393. . . Number of independent dealers . . .3% 2011 vs. . . . . . . . . .2 3. . . . .152 . India . . .891 3. . . . . . India . . Stores that are opened. . . . .325 363. . Thailand . . . . . .0 304. . . . . . India . . . . . . . . . . . . . . . . . . . . . .797 681 140 230 486 260 2010 vs. . . . . . . . . . . . . . . . . . . . . . . . . . . . Bangladesh . . . . . . . . Sri Lanka . . . .7% 12. 2009 35. . . . . . . . . . . . .211 704 190 252 765 300 2012 909 381 338 160 30 2. . . . . Bangladesh . . . . . . .7 168.6 3. . . . . . . . . . . . . . . . .074 3. . . . . . . . . . . . . . . . . .289 2. .8% 2. . . . . . . . . . . . . . . . . . . . .8% The following table sets forth our revenue per square meter in local currency and U. . . . . . .9 207. . Bangladesh . .. . . . . .4% 8. . .5% 9. . . for the periods indicated. . . . . . . . .435 662 263 235 798 477 812 343 286 163 20 1. . . . .920 3. . . . . . . . . 82 . . .. . . . . . . . . 2010 23. . . . . India . . As at December 31. . . . . .614 3.785 3. . . . . . . . . . . . . . . . . . . . . 2010 Number of retail stores . .9% 2011 850 351 314 160 25 2. . . . . . . . . . .The tables below set forth our number of stores and independent dealers and our like-for-like sales for the periods indicated. . Pakistan . . . . . . . . . . . . . . . . . . . . . . . Sri Lanka . . . .397 2.558 700 310 231 864 453 2012 vs. . . . . . . . . . . . As at March 31. .5 276. . Bangladesh . . . . Bangladesh . .

our net finance cost amounted to US$11. Accordingly. These borrowings are denominated in the local currencies in each country of operation. (2) Competition We operate in highly competitive and evolving HCD retail and consumer finance markets. As at March 31. expansion and/or renewal of our current borrowings. Bangladesh amended the regulations for VAT resulting in the exclusion of VAT from revenue. In the HCD retail market. See “ Business – Competition ” for further details.1 million. respectively. As at December 31. See “– Borrowings”. 2012. In 2010. 2012. 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.4 million in cash on the balance sheet. The growth of our credit operations and their ability to support our product sales are dependent on the continuation. US$11. 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.8 million.0 million. our competitors include local HCD retailers. 2010. we had approximately US$75. service and repair the products underlying the financing.Notes: (1) Revenue per square meter is calculated by dividing revenue by the weighted average selling area (in square meters). we intend to primarily draw down on our existing revolving debt facilities. 2011. introduce new products to meet customers’ preferences. Our ability to maintain our competitiveness as well as our competitors’ actions will affect our results of operations. For ongoing capital expenditures and consumer financing. personal loans and leasing facilities. we face competition from retailers that range from large local chain operators to small independent dealers.8 million was short-term and US$37. 2010.1 million and US$16. manage credit risk and provide customers with a wide range of credit options. our cash and bank balances were US$18. we had total borrowings of US$141.762 and BDT192. We believe that the principal success factors for HCD retailing include our ability to offer competitive prices. our level of outstanding debt. maintain our established brand reputation and provide quality after-sales customer service. Availability of financing Our business operations and future expansion plans are dependent on our ability to obtain financing at favorable rates. The 2010 revenue per square meter for Bangladesh would have been US$2. On July 1. our interest expenses and our financial performance.600. if this amendment to the VAT regulations had been in place from January 1.4 million.2 million long-term. facing competition from a number of retailers and financial institutions. The weighted average selling area is the average of our aggregate selling area at the end of each month during the financial year. 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. Similarly. As at December 31. of which US$103. 2013. 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. In the consumer finance market. we believe that the principal success factors for consumer finance include our ability to finance substantially all of our products. As our business grows.5 million of unutilized committed credit facilities and US$23. 83 . 2012. deliver high-quality products to our customers.

7%.5% of our product sales during 2012 and for the three months ended March 31. in particular those under exclusive distribution arrangements. seek to enter into additional exclusive distribution agreements. and by making existing electricity supplies more reliable and efficient. Should there be any material shift from credit sales to cash sales. 2013 were on credit while finance charges represented approximately 10. By providing access to electricity to a greater proportion of the population. monitor collections and appropriately trigger mitigating action in anticipation of potential defaults. The relationships with our suppliers. we will where possible. 2013.7% of our total revenue in 2010. depends on our ability to develop mutually beneficial relationships with our suppliers. In Bangladesh. thus increasing the disposable income of its inhabitants. Our ability to offer our products at affordable prices depends heavily on our ability to negotiate favorable pricing terms with our product suppliers. electrification can increase business enterprise and consequently wealth in an area.1% and 52. under exclusive distribution arrangements. The effectiveness of our credit management practices impacts the level of impairment losses for our trade receivables and thereby our profitability and financial position. 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. appropriately price the loan. See “– Overview of our Results of Operations – Finance Charges . which further helps us attract more customers. these programs enable a greater proportion of a population to make use of our products. respectively.” 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. 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. We believe our sales distribution and service capability will allow us to attract more brands and products. hence shifts in the mix between cash sales and credit sales can impact our results of operations. a material shift from cash sales to credit sales would positively impact our revenue and profit. 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. the government’s electrification program aims to provide electricity to the entire population by 2020. our revenue and profit would be adversely affected and inversely.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 we continue to focus on providing high-quality products to our customers. 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. 2011 and 2012 and for the three months ended March 31. Credit sales generate higher margins than cash sales. Moreover. 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.9%. The governments in each of our countries of operations have implemented electrification programs leading to different degrees of electricity penetration. In addition. according to 84 . as well as our ability to offer them at attractive prices and in certain instances.9% and 12. 11. Good credit management practices depend on our ability to properly evaluate our customers’ credit risk. an increase in government electrification programs in the countries where we operate may positively affect our sales revenue. 10. Ability to manage credit risk and the credit and cash mix Approximately 50. will depend largely on our ability to continue to achieve high sales volume. respectively. Electrification As a retailer of products that generally require electricity.

including higher or lower than average temperatures and environmental disasters. neither we. 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. Higher than average temperatures may lead to an increase in the sale of cooling products such as refrigerators or air conditioners. according to the World Bank 3. access to electrification.6% of the population in 2011. 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. such as floods. the Vendors and the Sole Global Coordinator. Bookrunner. While we.000 villages in areas away from the national grid and which are not expected to be connected within the next 15 to 20 years. 2 3 85 . and loss of disposable income and the 2010 flooding in Pakistan led to widespread damage to infrastructure. with off-grid renewable energy sources for their inhabitants. For example. Conversely. the Vendors and the Sole Global Coordinator. including Bangkok. Bookrunner. which seeks to provide nearly 8. damage to infrastructure. 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. according to the International Energy Agency. resulted in numerous deaths in Thailand. for purposes of Section 249 of the Securities and Futures Act. See “General and Statutory Information − Sources”. the Vendors and the Sole Global Coordinator. 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. While we. and that the information has been extracted accurately and fairly from such database. in 2011. The World Bank has not provided its consent. the Vendors and the Sole Global Coordinator. for the purposes of Section 249 of the Securities and Futures Act. Weather conditions may lead to increased sales or cause disruptions to our operations Weather conditions. the Vendors and the Sole Global Coordinator. neither we. the Vendors and the Sole Global Coordinator. Similarly. certain weather disasters may cause disruptions to our operations as well as loss or damage to our inventories and stores. the spreading of disease and loss of disposable income.8% of the population relying on electricity as a source of light in 2004 to 56. Sri Lanka’s government aims to increase access to electricity supply from 76. from 39. 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.6% of the population in 2009 to 100% in 2013. 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. Bookrunner. Bookrunner.Bangladesh’s Rural Electrification Board 1. 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. 62. to the inclusion of the information extracted from its database. and that the information has been extracted accurately and fairly from such database. fatalities. Bangladesh’s Rural Electrification Board has not provided its consent. according to the Bangladesh Bureau of Statistics 2. 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. India has seen the proportion of the population with access to an electricity supply grow from 74% in 2005 to 91% in 2011. We believe an increase in electrification should lead to an increase in our sales. Bookrunner. Bookrunner. neither we. many months of severe flooding in northern and central Thailand. While we. may impact our results of operations. for purposes of Section 249 of the Securities and Futures Act.4% of the population in 2009 had access to electricity. Access to electricity has significantly increased in recent years. to the inclusion of the information extracted from its database. In Pakistan. See “General and Statutory Information – Sources”. Sri Lanka and India benefit from wider. while rainy seasons followed by good harvests may lead to higher disposable income of our customers and thus to an increase in sales. depots and warehouses and may impact our customers’ ability to purchase products or make installment payments. and that the information has been extracted accurately and fairly from such report. The Bangladesh Bureau of Statistics has not provided its consent. These and similar events have caused disruptions to the distribution of our products to our stores 1 See “General and Statutory Information – Sources”. and is therefore not liable for such information under Sections 253 and 254 of the Securities and Futures Act. droughts and typhoons. and is therefore not liable for such information under Sections 253 and 254 of the Securities and Futures Act.

Trade receivables are assessed at the end of each month to determine whether there is objective evidence that they are impaired. All individually significant trade receivables are assessed for specific impairment. 2010. In particular. 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. We expect weather conditions to continue to impact our business and results of operations. 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. 86 . if actual results were to differ. In assessing collective impairment we use historical trends of the probability of default. estimates and assumptions are required. Trade receivables that are not individually significant are collectively assessed for impairment by grouping together trade receivables with similar risk characteristics. including expectations of future events that are believed to be reasonable under the circumstances. We consider evidence of impairment of trade receivables at both a specific asset and collective level. who may be unable to purchase our products or pay their monthly installments. Impairment loss on trade receivables Trade receivables arising from credit operations are recognized at fair value. see “ Appendix I – Combined Financial Statements for the Years Ended December 31. such weather conditions directly impact our customers. actual outcomes can differ from these estimates if different assumptions were used and different conditions existed. 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. Those found not to be specifically impaired are then collectively assessed for any impairment that has been incurred but not yet identified. we have identified the following areas where significant judgments. However. and if a loss event had an impact on the estimated future cash flows of that asset that can be estimated reliably. Impairment loss on inventory Inventories are assessed at the end of each month at the lower of cost and net realizable value. 2012 and 2013 ”. Critical Accounting Policies The preparation of our combined financial statements in conformity with IFRS requires us to make judgments. Trade receivables are recorded net of unearned finance charges and accumulated impairment loss. In addition. 2011 and 2012 ” and “ Appendix K – Unaudited Condensed Combined Interim Financial Statements for the Three-Month Periods ended March 31. 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. 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. Finance charges are amortized using the effective interest method in accordance with IFRS 39 Financial Instruments: Recognition and Measurement . less directly attributable transactional costs. and which. the timing of recoveries and the amount of loss incurred.and customers. 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.

1 Three months ended March 31. .6 90. Currency Exchange Rates Combined Statement of Financial Position Combined Statement of Income Year ended December 31. In the case of manufactured inventories and work in progress. .2 53. Pakistan . the OZFOREX Foreign Exchanges Services.4 46. Overview of our Results of Operations For the purposes of conversion of local currencies to U. the Bangladesh Bank. 2012 119. expressed in absolute terms and as a percentage of the total revenue.1 45. the University of British Columbia. Net realizable value is the estimated selling price in the ordinary course of business. . . . 2012 and 2013.7 44. for Bangladesh. .7 50.9 98. dollar) as at and for the three-month periods ended March 31. for India and Pakistan. 2011 and 2012. Bangladesh .8 As at December 31.Cost includes expenditure incurred in acquiring the inventories. 2010 112. For the periods indicated in the table above.8 97.0 79. Sauder School of Business. Thailand . 111. . dollars in the Combined Statement of Income and Combined Statement of Financial Position as at and for the years ended December 31.9 30.9 30.6 74.6 50. .0 2013 126.0 54.6 30.8 90.7 30. and our unaudited condensed combined interim financial statements (in local currency units per one U.9 69. . 2010.4 86.7 78.3 29. .7 93.0 89.6 82.6 As at March 31. this is computed using the daily rates and the mid-point between the buying and the selling rates. . .5 81. and for Thailand. .3 The closing exchange rates for the combined statement of financial position are arrived at using the following sources: for Sri Lanka. the following currency exchange rates were used.S. . .0 31. The same sources are used to compute the monthly average rates which are then used to convert the statement of income each month. India .2 29. the Bank of Thailand. using revenue as the basis for the weighting. production or conversion costs and other costs incurred in bringing them to their existing location and condition.3 54. .S.8 78.8 2011 110. The table below sets forth the components of our revenue and the geographic mix for the periods indicated.9 82. 2012 127.4 54.7 2012 127.5 81. 87 .0 70. less the estimated cost of completion and estimated costs necessary to make the sale. .2 2011 113. (ii) finance charges and (iii) other revenue. a weighted average rate is computed. Revenue We generate our revenue from (i) sale of goods.3 31. . In instances where these sources do not provide a monthly average. 2010 Sri Lanka .7 85.8 2013 126.5 2012 127.9 53.6 31. which is arrived at by weighting the monthly average rates.8 85.2 31.2 98. . cost includes an appropriate share of production overheads based on normal operating capacity.

When we use the term “at constant exchange rates”.2 1. . . .1% 21. 2010 US$ million Sale of goods .4 104. .9 406. lenders. on the other.3% 100.0% 2012 US$ million 378. . . . . Thailand .3 435. . . We do not evaluate our results and performance without considering both constant exchange rates data. Bangladesh .1 69.1 15.8 % 86.6 5.4% 6.S.2% 8.9 406. dollars that we used to translate local currency revenues for the comparable reporting period of the prior year.2 2.7% 1. . . . .9 72. . .3 % 87. However. .0 7.7% 21. dollars at the average exchange rate for the period presented.5% 0. and other creditors because such information enables them to gauge the impact of currency fluctuations on a company’s revenue from period to period.3 142. . dollars using the same average foreign currency exchange rates for the conversion of revenues into U. . changes in revenue prepared in accordance with IFRS.2% 18. .9% 27.1 326.7 198.S.1 33.4 1.5% 21. .3 82. Sri Lanka . As the reconciliation is inherent in the disclosure.0% 2013 US$ million 95. This resulting percentage is a non-IFRS measure referring to a change as a percentage “at constant exchange rates”.7% 100. and changes in revenue prepared in accordance with IFRS. . .9 6.4 110. .Revenue Year ended December 31. dollars.4 5. we believe that a separate reconciliation would not provide any additional benefit.0% 11.S.8 49.0% 45. We then calculate the change.8 30.4% 100.0% 12.7% 11.5% 13. .9% 1.4 326.7% 1. We present the fluctuation derived from IFRS revenue next to the fluctuation derived from non-IFRS revenue. . . . . 285.0 435.8 12.5% 100. on one hand. India .0% Three months ended March 31.8% 10.1% 0. .4% 7.9 28.3 14.3 23.7% 1.6% 10.2% 7.0% 48.8 9. . .9 0.0% 2011 US$ million 357. revenues received in local (non-U.3% 13.0% 43.5% 100. . . 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. .9% 5. .3 104.0 51. 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. as a percentage. . Total revenue .S.1 75.S.5 5. .7 14.0% Changes in our revenue include the impact of changes in foreign currency exchange rates. .3% 0. and not as a substitute for or superior to. of the current period revenues using the prior period exchange rates versus the prior period revenues. . . .1 62.0% 49.5 29. .1 1. .4 % 87.1% 0.2 43.2 27. We caution investors to follow a similar approach by considering data on constant exchange rates only in addition to.9% 6.9% 7.3% 100.9 199. . .4% 100. it means that we have translated local currency revenues for the current reporting period into U. we also believe that the usefulness of constant exchange rate data is subject to limitations.4% 100. . . 2012 US$ million 90. . Pakistan .0% 7. therefore.7 92. . dollar) currency are translated into U.7% 18. . Under IFRS. Other revenue .4 110.0 1.7% 8.4 51. at constant exchange rates is useful to investors.5 22.9% 0. .0% 44.4% 100. . .9% 1. Other .7 35. .7 % 87. . Total revenue .5 27. .2% 8.9% 17. We. particularly if the currency effects that are eliminated constitute a significant element of our revenue and significantly impact our performance.1% 19. . . 88 .0 8. 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. .3 0. Finance charges .9 % 86.5% 100.

. . . We recognize revenue for the sale of goods upon issuance of the sales receipt and/or delivery of the product to the customer. the down payment and the interest rate. . .3% 6. .2% 7. . . . . See “ Business – Products ”. . Installment payments displayed at our stores are typically calculated using a 12-month term. . . . . . . . . Sale of goods We derive revenues from our retail. among other factors. . . 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. . . 2011 compared to same period in 2010 . . . . each installment is divided into repayment of principal and a finance charge for the provision of the credit facility. . . . . In instances where low or zero interest promotions are offered to customers. . . Under IFRS 8. . . .Combined Revenue Increase Combined revenue increase At constant exchange rates Three months ended March 31. . Finance charges form part of our revenue from the consumer credit business. 2013 compared to same period in 2012 . . . . . . . . . We offer customers an option to pay in installments over time. 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. 2012 compared to same period in 2011 . For the purpose of revenue recognition. In our balance sheet. . . . direct selling and wholesale operations through the sale of our house and third-party brand HCDs. . . The actual installment payments result from the division of the retail price by the number of payments within the desired repayment period. . Year ended December 31. . . . .6% 89 . . Our credit periods are generally between two and 36 months with a fixed monthly repayment. . Year ended December 31. . . . . . . . These would then be recognized as revenue and deducted from the unearned finance charge account. . . . . Unearned finance charges on credit sales are recognized as earned over the installment period on a constant periodic rate of return. .8% 24. .2% 24. Finance charges We also derive revenues from our consumer finance business. unearned finance charges are presented as a deduction against the trade and other receivables account. . . . . . . . . . .4% 18. . . The price of our products is determined based upon the cash price plus a finance charge that varies depending on the repayment period. . . . the difference between the gross receivables and the present value of the receivables is recognized as unearned finance charge. . . . . . . . . . . . . .

. 2010 US$ million Cash sales . Bangladesh has the lowest proportion of finance charges due to the market practice of shorter credit terms and higher down payments. .The table below sets forth our sales mix for the periods indicated.7% Other Revenue We derive additional revenue from commissions. . . .5% 2. .6 39.6% 52.0% 22. 2010 Sri Lanka . . . . .0% 17. . .9% 2013 US$ million 29. .3 100. .0 100. . . hence our business in India does not generate finance charges.4% 11. This revenue is paid to us by third-party companies or our customers.7% 2012 US$ million 127. 2012 12. . . . .2% 0.8 147. comparatively high interest rates charged and lower down payments. . . . .9 59. .5 61. .1 % 30.0% 3. . . . . 98. . . 11.5 189. the down payment and the credit term also impact the level of finance charges in each business.0% 21.5% 3.8% 12.4% 0.4% 10. . Excluding India.7% 2012 12.1% 46. 90 .0 16. rendering of services and certain other activities. .7 % 34. .0% 90. . expressed as a percentage of total revenue. . Singer Thailand has the highest proportion of finance charges given the high mix of credit sales. . this is reflected in the proportion of revenue represented by finance charges. such as bill payments. . .7% 14. . . . . . Group .0% 19.6 174. . . . India .1% 16. . . .2% 2. . . . . . . .9% Three months ended March 31. . . . .0% 16.8% 16. . . Wholesale sales . The proportion of credit sales varies in each of our businesses.0% 378.5% 16. . .6% 0. . money transfer and mobile phone reloads.0 % 33.2% Three months ended March 31.9% 285. . . . Pakistan . Factors such as the interest rate.3% 12.3% 49.8% 13. . . Finance Charges Year ended December 31. longer credit term. . . Total sales of goods . . .7% 2013 13. . Sales Mix Year ended December 31. . .2 100.7% 50.6% 51.5% 0. . . Thailand .2 50. . Credit sales . .8 41. . . 2012 US$ million 32. . . . . . . .9% 10.8 100. . . (ii) insurance we sell to our customers and (iii) extended warranties.7 100.0% 19. . . . The table below sets forth our finance charges for the periods indicated.8% 15. . . . . .5% 0. . . . .0% 22. .0% 357. Credit is available for wholesale customers in all our operations but this does not bear interest. .0% 95. . . .0% Credit sales generate finance charges and compose just over half of the total sale of goods. .7% 2. . . . .9% 2011 10. .8 16.8% 11.3 % 34. The commission and service revenue includes revenue relating to (i) a range of financial transactions conducted at our stores. . .7% 13.7% 2011 US$ million 122. . .2 % 36. . Bangladesh . .

.3% 86. Selling and administrative expenses .1% 13. . .8 61.9 25. .2% 0. .4% 13.2 60. . . .7 15.6 26. . .9% 64. .2 4.1 27.7% 13. . Expenses Year ended December 31.6% 1.0% 4. Depreciation and amortization . . . .9% 1. . .9 0. . . .3 4. .1% 0. 2010 2011 2012 Three months ended March 31.7 0.7 5.3% 5.8 – 1. .4% 0. .8 10.8 62.8 Three months ended March 31. . .0% 3. .1 3. . services and locations in selected markets.9% 18. 2012 2013 Expenses The table below sets forth our expenses for the periods indicated and as a percentage of revenue. .8% 90.6 294.4 4. .4 24. . . .8% 89.4 0.1% 109.8 – 0. . plant and equipment. .1% 67.6 13.1 3.2% 3.7% 89.8 93. .4 0. .We also derive other revenue from license fees paid by third parties for the right to use the Singer trademark for certain products.9% 3. .8 0.4 3. which resulted in a substantial one-time gain which was included in other income. Other Income Year ended December 31. .3% 2. . . . . Other selling and administrative expenses .0% 2.9 26. .8 98. .4 – 0. 1. .2 62. .1 5.9 10.4 385.8% 30. .2% 4.9 2.4% 0.1% 0.3 365.9% 2.1 1. . . . .4% 13.6% 2. .5 1. .9 1. . .8% 3. . . .6 0.4% 4.8% 4.8% 88. . .9 1. Employee benefits .7% 0.6% 16. Disposal of our interest in ILFS in Bangladesh .8 1. Total expenses . .1 1.0 15. Rent and occupancy .5 – 1.7 8.8% 27.9% 252.3% 0.1% 0. . .1% 91 .5 2. .4 2. . . .0% 13.6 4. . .4% 3. . Other Income Our other income is ordinarily from the disposal of property.2 15.9 61.6% 1. Total other income . .8 10. .9 56.5 25.2 3. 205.3% 2. . 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 .8% 89.8 0.0 27. .1% 18. . External royalty paid .3 43. .4 4. we disposed of our interest in ILFS in Bangladesh. In 2010. 2010 2011 2012 US$ million Other income . Impairment losses on trade receivables .5% 1.4 62. . Advertising and promotion .8 4.1% 269. .0% 112. .

5% 37. . . Impairment losses on trade receivables can 92 . The table below sets forth our gross margin percentage for the periods indicated. and transportation costs of our products. .4% 37. .4% 26. . . compulsory social security contributions. Impairment losses on trade receivables result from bad debts that are written off. such as print.2% 20.3% 54.0% 56. . leaflets and in-store pointof-sale materials. . depreciation. Employee benefits are the largest expense category. . Our total gross margin percentage has gradually increased over the past three years. . Bangladesh . .8% 56.2% 32. Included in wages and salaries are commissions paid to branch managers. Promotions include free gifts and lucky draws as well as additional incentives offered to branch staff. . The direct selling business in Thailand has the highest gross margin percentage. Pakistan . . . . Rent and occupancy expenses include all costs relating to properties.5% 38. . .Cost of Sales and Gross Profit Our cost of sales comprises cost of acquisition of merchandise from third-party suppliers.5% 29. . .6% 25.2% 21. . for example. . . . . sales canvassers and. .4% 38.0% 2013 38. Employee benefits comprise wages and salaries. . 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. The gross profit is the difference between the revenue and the cost of sales. Three months ended March 31. .3% 28. India . . store staff. warehouse and distribution costs and other general administrative expenses.9% 25. . 2012 37.3% 20. .2% 57. . and below-the-line advertising. contributions to defined contribution plans. . . impairment losses on trade receivables and certain other costs.9% 2012 37.8% 51. Thailand .1% 19.7% 20. . .1% Sri Lanka . . . .4% 38. . warranty expenses. expenses related to defined benefit plans and other employee-related costs.1% The gross margin percentage varies depending on the nature of the business. .0% 30. .6% 32. . raw material costs. rent and occupancy costs. Bangladesh and Pakistan vary depending on the competitive landscape and the extent of credit sales. Group . amortization. Included in other selling and administrative expenses are professional fees. . Selling and Administrative Expenses Our selling and administrative expenses comprise employee benefits. . 37. . . TV and radio advertisements. . in some cases.7% Gross margin % Year ended December 31. The gross margin percentage in the retail businesses of Sri Lanka. . information technology costs. such as catalogues. . . . rent and utility payments. . The predominantly wholesale business in India which does not earn any finance charges has the lowest gross margin percentage. . The gross margin percentage is derived by dividing the gross profit by revenue. 2010 2011 38. . insurance. . . .4% 27. . . advertising and promotion. Advertising expenses includes both above-the-line advertising. manufacturing and assembly costs. .5% 27.

. . . . In determining reserve rates. . . . . . . . . . . . . . . . . . . which has different rates as it engages in direct selling. . . . . . . . . . . . . . See “– Critical Accounting Policies – Impairment loss on trade receivables ”. . . . . . . . . . . . . . . 91 – 120 . . . . . installments are collected by canvassers when visiting customer’s homes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 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 bad debt provision is arrived at using the following formula which is based on the aging and balance of the principal outstanding. . 93 . . . . . . .result from installment receivables and other trade receivables such as amounts due from independent dealers. . . . . . The level of selling and administrative expenses varies depending on the nature of the business. The reserve rates in the direct selling business vary relative to those in the retail businesses as the installment collection practices are different. . . . . . . . 61 – 90 . . . . . . . . . . . . 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. 121 – 180 . . . expressed as a percentage of revenue. . . . among other factors. . . . . . . . . The selling and administrative expenses expressed as a percentage of revenue is set forth in the table below. . . . . . . . . . . In respect of installment receivables. we consider historical trends of the probability of default. . . . . . . . . . with the exception of Thailand. . . . . . . . . . . . . . 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. . Past due (days): 1 – 60 . . . 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. . . . . . . . . . . . . The below table sets forth our selling and administrative expenses for the periods indicated. . . . . . . . . . . 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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . customers are expected to make payments in the store each month. . . . . . . . . . . . . Reserve rates are fixed and all retail entities have the same rates. . . . 271 – 360 . . . . 181 – 270 . . . . . . . the timing of recoveries and the amount of loss incurred. Reserve rates applied on the balance of the principal outstanding Age Current . . . . . . . . . . . . . . . . . . . . while in a retail business. . . . In the case of a direct selling business. . . . . . . . . . . . . . > 360. the underlying costs in each country and the proportion of credit business. . . . The wholesale business in India has the lowest cost structure. . . . In a direct selling business. . . . . . . . . .

0%. . . .2% 27. . . . . . . in Bangladesh it is 27.9% 17. . Thailand . . Finance Costs Our finance costs comprise interest expenses on our interest-bearing borrowings and foreign currency losses/gains. . for the years of assessment which ended on March 31. . . . . .8% 46. . .9% 15. . . .1% 20. . .9% 16. Under this program. Currently. . . 24. . . .4% 44. . . . with a minimum investment of LKR50 million and at least 50 employees. . Accordingly. India . . . 2010. . . . . On January 18. . . . .S. .7% 14. .0% 20. . . .8% 42.9% 45.4% 2013 24.6% 15.7% Three months ended March 31. . . See “ Business – Branding and Intellectual Property ”. . .0% and the highest is in Pakistan at 35. Our income tax expense includes both our accrued and deferred taxes and is calculated according to IFRS. . . . . Finance Income Our finance income comprises interest income on our bank balances and short-term investments. 2012. . . . Income Tax Expense Our income tax expense comprises income tax expenses paid in our countries of operations.7% 14.3% 26. .8% 27. . the corporate tax rate applicable to Regnis 94 .8% 14. 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. . . . . . GAAP. In Sri Lanka the corporate tax rate is 28.6% 18.Selling and Administrative Expenses (% of Revenue) Year ended December 31. 2010 Sri Lanka . . . Pakistan . . Group .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. . . . Regnis Appliances (Pvt) Limited. .2% 19. 2012 22.9% 26.0%. . . . investees are eligible for a reduction in the corporate tax rate. .9% 25. . . . . .8% 14.0% 2012 23. . . Income taxes vary from one country to another and are subject to changes in the tax laws of each such country. . Nipayum Sri Lanka 300 Enterprises Programme. . 2011 and March 31. . .1% 15. .5% and in India it is 32.3% 15.7% 38. . our subsidiary company Regnis (Lanka) PLC incorporated a wholly-owned subsidiary. . Bangladesh . . .4% 2011 25. . . . . .6% 19. . . . to take advantage of certain tax concessions under the Sri Lankan Board of Investment. 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. . . . in our main countries of operations the lowest corporate tax rate is in Thailand at 20. . .5%. . Dividend withholding taxes are typically 10% of the gross dividend. . ILFS. The income tax expense also includes withholding taxes on dividends received from the subsidiary companies.

. . Three-Month Period Ended March 31. . . . . . . . . . Changes in revenue include the impact of changes in foreign currency exchange rates. . . . . . . . . The table below sets forth our revenue for the three-month period ended March 31. . . Direct Selling Depots and Independent Dealers As at December 31. . Independent dealers . . . . . . . Retail Stores. . 2012 During the three months ended March 31. . . 2013 and March 31. . . . . . . Bangladesh . . . . . . . . . . . . . . . . . . 2013 922 391 339 158 34 211 2. . . . . . 2012 Retail stores .0%. . . . . . . . . . Bangladesh . . . . . . . . .Appliances (Pvt) Limited was 0. . . . . . . . . 2014. . . . . . . . . plant and equipment and income tax on items recognized directly in equity.435 662 263 235 798 477 As at March 31. revenue increased by 8. . . . . . . . . . . . 2013. . . . . . . . . . . . . . . . . . . . . . . . Sri Lanka . Other Comprehensive Income Our other comprehensive income is derived from foreign currency translation differences for foreign operations. . . . . . . . . . .8 million in the three months ended March 31. 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. .4 million in the three months ended March 31. . . . . . . . the corporate tax rate will be fixed at 20. . . . . . . 2012 in each country of operations measured in local currency and U. Direct selling depots – Thailand . . Pakistan . . . 2013 Compared to Three-Month Period Ended March 31. . . . 2014. . . . . Revenue Our revenues increased by 6. . . . . . . . . we increased our retail store base by 13 stores. . . . . . . . . .2% from US$104. . . . . . . . . Starting from April 1. . India . . . . . . 2012 to US$110. .S.0%. . . . . . . . . . . . .0% for the years of assessment ending on March 31. . . . . together with the combined revenue calculated at constant exchange rates and as per IFRS. . . . . . . . . . . . 2013. . . . . . . 2013. . . . The table below sets forth our distribution network as at December 31. . At constant exchange rates. Thailand . 909 381 338 160 30 200 2. . . . . . . revaluation of property. . . . . . . . . . . . . dollars for the periods indicated. . . . 2012 and March 31. . . . . . . . . . . . . . . . . . . . . . . . which will increase to 10. . . added 11 depots and 123 independent dealers and renovated or relocated a total of 57 stores and depots. . Sri Lanka . . . . . .4% for the three-month period ended March 31. . . . in 2013 compared to the three months ended March 31. . . . . . . . . . . India . . . . . . . . . . . . . . . . . .558 700 310 231 864 453 95 . . . . 2013 compared to the same period in 2012. . . . . . . . Pakistan . . .

8 THB 902. the provision of freezer and air conditioning maintenance services to villages countrywide led to an increase of 57. In addition.9 PKR 632. The economic slowdown.183.5% respectively. increased by almost sevenfold for the three months ended March 31.S. .2% 5. . Pakistan and India which was partially offset by local currency appreciation in Bangladesh and Thailand. smart and mobile phone sales increasing over eleven times and digital camera sales increasing 37.5 22.8 9.0 8. Revenue during this period is seasonally low in Bangladesh.6 – LKR6.3 BDT1. as measured in local currency.5%) 15. The increase in revenue was primarily due to an increase in the sale of goods. . . particularly in Thailand and India.9% 6. which were first introduced in 2011.3 PKR 570. there was a marked increase in the economic and political instability and widespread unrest in the 96 . 2013 resulted in a 12. sales to more affluent customers remained buoyant as demonstrated by the 14.4 THB 709.8%.8 30.4% and sales of IT products were very strong. . .9% 8. The revenue growth in Bangladesh. . U. sales of small appliances. Sales of furniture in Sri Lanka increased 23.3 104. This figure is a non-IFRS financial measure. . 2013 was impacted by currency devaluation in Sri Lanka.0% and 6.Revenue Local currency Three months ended March 31.3% 32.7 14.4% (2) (5.1 15.4 110. where revenue. . the increase in the number of dealers from 798 as at December 31. 2013.6% 5. increased by 614. . ... In India. .8 0.222. 2013 compared to same period in 2012. unit sales of petrol vending machines.3 BDT1. 2013 compared to same period in 2012.9 – .8% (9.3 INR 426. at 5. higher interest rates and selling prices impacted the middle-and lower-income groups in particular. .. 2012 2013 U. . dollar revenue growth in the three months ended March 31. In the lead up to the general elections in Pakistan in May 2013.0% in the unit sales of freezers for the three months ended March 31. Group . .. 2012 to 864 as at March 31.4 5. which reflected the general slowdown in the economy. as measured in local currency.7 INR 530. increased 27. India . .2% and 24.1%) 10. 2012 2013 Percentage change Local currency US$ local currency millions Sri Lanka . . . In Thailand the introduction of commercial products such as vending machines boosted sales. .3 0. Other (1) US$ million 51.0 7.S.3%.6% (16. Revenue growth in Sri Lanka was marginal. was impacted by the countrywide general strike action which resulted in 16 trading days being lost during the three-month period ended March 31. Thailand .152.2%.9 0.5% increase in unit sales of sewing related products.2% LKR6. . . . all as measured in local currency. .9% for the three months ended March 31. dollars Three months ended March 31. See “ – Significant Factors Affecting Our Results of Operations – Foreign Exchange Rates ”.219. in anticipation of the festivals that take place in the second half of the year. Bangladesh .7%) 24. a product introduced in 2009. 2013 compared to same period in 2012. Notes: (1) (2) “Other” comprised royalties received from the Malaysia and Australia sub-licensees.2% 5. higher interest rates and higher product selling prices due to the devaluation of the Sri Lankan rupee compared to 2012.4 49. Pakistan . with computer sales increasing 30.. as measured in local currency. in the Singer Mega and Singer Homes stores respectively. Further.8% growth. .5% 27.

. .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.4 13. . . . . . . . . . .2% Bangladesh US$15. . . . . . . 2013 the credit sales mix increased from 46. . . . on account of the increasing proportion of credit sales in all locations.8 8. .4% India US$9. . . . as measured in local currency. . . . . . . . The figures provided are in millions of U.3 27. . The prospects for growth in Pakistan are expected to improve following the May 2013 election. .0% of product sales revenue in the prior period to 52. . An important measure for our predominantly retail businesses in Sri Lanka. The chart below sets forth the revenue mix by source country for the three-month period ended March 31. 2013 compared to three months ended March 31. . . . 2013.7%. . . . . . . . Thailand US$30. . . . and therefore Thailand’s increased share of total overall revenue. . . . . . . . . Bangladesh . . . . . . (4. . During the three months ended March 31. . . . Due to the increased credit sales mix. Pakistan . .9) 5. . . Like-for-like sales growth in % (three months ended March 31. Bangladesh and Pakistan is like-for-like sales growth.7%. . . . This resulted in a decline in revenue for the three-month period ended March 31.5%. . . . . . . . . . .S. In particular. 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. . finance charges as a percentage of revenue increased from 11.9% Pakistan US$5. . . . 2012) Sri Lanka .9% Sri Lanka US$49.1 44. . . . . . . 2013 of 9. . has also increased the overall Company credit sales mix. . .4 0. . .8 5. where the proportion of credit sales is highest. . which was as follows. . the strong growth in Thailand. . . . . . . . .country. . 97 . .0 (9. dollars. . . . . . The Bangladesh share is low on account of sales seasonality. .3% Other US$0.7% in the prior period to 12. .3% The share of Thailand and India in this revenue mix has increased during this period as a result of their stronger performance. .

0 million in the three months ended March 31. . . . .0% % US$ million 2013 % Cost of Sales and Gross Profit Our cost of sales increased by 4. . 2012 to 12. . 2012 to US$0.3 46. the gross margin percentage declined on account of increased sales of commercial products (including vending machines) and small appliances. . . . . .3% from US$39. . .2% 2. plant and equipment. Furniture . Other products .8 9. . . . .8 48. . 2012 to US$67. . . Gross margin percentage increased from 38. . . . . . . . . .5 2.9 90. . Total . . . Our gross profit increased by 8. .8 16. 2013. . . primarily due to an increase in the gain on sale of property. . .9 million in the three months ended March 31.8% 2.6 million in the three months ended March 31.0% in the three months ended March 31. Sewing machines . . 2013. . .9 5.7% 15. . .1 million) from US$64. IT products . . . . . . . . . . . 2013.4% in the three-month period ended March 31. . the product mix of IT products increased from 6. In Bangladesh.3% 10.4% in the three months ended March 31. . . . . .3 3. . Consumer electronics. . .0% 4. respectively. . . the product gross margin increased due to reduced sales of motorcycles and certain other products where the gross margin percentage is lower. operates at significantly higher gross margins than the retail and wholesale businesses in our other countries of operation. 2012 to 27.8% 100. . . This increase 98 . 2013 due to the changes in our revenue and cost of sales as indicated above. . . .8 million in the three months ended March 31.2 14. . . As a percentage of revenue. .7% 5. . . . . . . . .The table below sets forth our product mix for the three-month period ended March 31. . .2 95. . . . . 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. where the gross margin is lower. . .4 million in the three months ended March 31. . . . Product Mix Three months ended March 31. . In Thailand and India. . . . .7% from US$27. . being a direct selling business. . . . . Other Income Our other income increased from US$0.1 15. .1% in the three months ended March 31. . 2012 to US$42. . 2012 to US$30. .1% for the same period in 2013. 2012 and 2013. . . . .6 million in the three months ended March 31. . . . 2013. . 43. . . .2% 18.3% 16. . . . .4% 16. . . . but this change did not impact the overall gross margin percentage. Selling and Administrative Expenses Our selling and administrative expenses increased by 8.9% 100. . .7% 12. 2012 to 38. 2012 US$ million Group Home appliances .0% 44.0 12. . . . In Sri Lanka. . . . .8 million in the three months ended March 31. . .9 million in the three months ended March 31. .6 15.8% (or US$3.8 2. . The increase in the group gross margin percentage also resulted from the strong performance in Thailand which. . .7% for the same period in 2013. . . . selling and administrative expenses increased from 26.

S. Likewise. and rent and occupancy.0 million of the US$1. 2013 compared to the same period in 2012. primarily in Sri Lanka and Bangladesh. Commission as a percentage of revenue in Thailand was 16. US$1. was related to increased commission expenses in Thailand.7 million in finance costs.reflects the strong performance in Thailand.2% due to strong revenue growth and because some of the expenses were fixed in nature.8 million in the three months ended March 31. and (ii) the growth in borrowings following a need to increase our working capital for receivables and inventory.8 million in both the three months ended March 31. 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. Since we offer credit sales. Net Finance Costs Our net finance costs increased from US$3. For further detail on certain differences between U. 2013 increased 10. 99 . which resulted in an increase of US$0. 2013. in Sri Lanka and Pakistan.3 million in the three months ended March 31. Other Expenses Our other expenses remained the same at US$0. Once again. Further.9% from US$13. depreciation and amortization. we anticipate that the amount of receivables will grow in line with increased credit sales. Additional working capital is required to fund any increase in receivables. the selling and administrative expense percentage of revenue in Thailand declined from 44.3% to 38. As such. 2013.3 million. this increase reflects the strong performance from the Thailand direct selling business which has greater commission levels compared to the retail businesses. and professional and legal fees. 2012 and the three months ended March 31. 2012 to US$4.6 million in finance costs.S. particularly in Sri Lanka. benefits and travelling (excluding commission and bonus). Bangladesh and Pakistan. as Thailand’s selling and administrative expenses as a percentage of revenue are the highest within our Group.6 million in the three months ended March 31. 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. The employee benefits for the three months ended March 31. it amounted to 5. Additional cash is needed to fund this increase (as represented by “changes in inventory” in the cashflow statement).5 million in the three months ended March 31. see “ Summary Financial Information ”. as we open more shops.5 million increase in employee benefits for the three months ended March 31.5% for the year ended December 31. which resulted in an increase of US$0. GAAP. advertising and promotions. 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. Profit before Income Tax Our profit before income tax decreased by 2.2 million in the three months ended March 31.3 million in finance costs (before set-off against finance income) was primarily attributable to (i) a rise in interest rates. This is represented by “changes in trade and other receivables” in the cashflow statement.4% from US$8. 2012 whereas for Sri Lanka.4%. 2013 due to the changes described above. GAAP and IFRS. The most significant fixed expenses include salaries. However. The increase of US$1. rent and occupancy. 2012 to US$15. when considered in isolation. 2012 to US$8.

revenue increased by 18. India . .3 – “Other” comprised royalties received from the Malaysia and Australia sub-licensees and certain sales of Singer products to third parties in 2011.357.0% from US$4.5 29. The profit attributable to equity holders of our Company increased 25. and as per IFRS.8% primarily on account of a comparatively stronger performance from our Thailand business where the minority portion is highest. .Income Tax Expense Our income tax for the three months ended March 31.0 1. 2012 to US$5. . . the Company incurred tax charge of US$2.3 82.7% 22.4 PKR2.0 million in the three months ended March 31. respectively. Year Ended December 31. 100 . . 2012 to US$8. . .2% from US$406.7 92.9 15.7 199. .8% (2) 0.010. Revenue Local currency For the year ended December 31.2 PKR2.9 406.3 435.9 million in the three months ended March 31.3 BDT6. Profit for the Year Our profit for the year increased by 42. .S. . 2012. relating to accumulated historical losses in India.0 million in the three months ended March 31.3% -20. . This figure is a non-IFRS financial measure.8% in 2012.0% 15. . .3 THB2.399. 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. .4 million in the three months ended March 31.S.523. .4% from US$5.5 27. 2011 2012 Percentage change Local currency US$ local currency millions Sri Lanka . dollars For the year ended December 31. amounting to US$1.3 – LKR25.2 million. . Changes in revenue include the impact of changes in foreign currency exchange rates.9 28. . 2012 Compared to Year Ended December 31.857. 2011 Revenue Our revenues increased by 7. 2013.299.2% -5. for the periods indicated. predominantly in Sri Lanka. .4 1. .9 INR1.1 33.1 75.2% 13. 2013.3% 24. .9 million in 2012. dollars. 2013 was a credit of US$0. Group .7 million in 2011 to US$435. Other(1) . Thailand . .3% 7. This credit mainly resulted from the creation of a deferred tax asset. . and a higher debt level over the same period in the prior year. .9 million. 2011 2012 U. Bangladesh . together with the combined revenue calculated at constant exchange rates.5 THB2.5 million. For the three-month period ended March 31. Notes: (1) (2) US$ million 198.795. Pakistan .0% -20.3% 2.421. . The table below sets forth our revenue in 2012 versus 2011 in each country of operations measured in local currency and U. Non-controlling interest share of profit increased by 76. .2% LKR22. . This deferred tax asset has been created following the Singer India’s deregistration from BIFR on February 28.463. . . .3 INR1.8 BDT5. At constant exchange rates.9 72.5% 32.739.3% 18.4% 24.

2% in 2011 and 34. in addition to the 28 stores opened in 2011. 2012 increased geographic presence and exposure to different customer groups. The revenue growth was highest in India. where unit sales for 2012 increased over 200% to 92. India and to a lesser extent Thailand. Price increases for sewing products of approximately 10% to 15% also boosted revenue. The increase in the number of dealers from 765 as at December 31.U. as well as improved sales productivity with sales per square meter increasing by 8. interest rates increased sharply and the currency devalued. See “ – Significant – Factors Affecting Our Results of Operations – Foreign exchange rates ”.432 as at December 31. in particular panel televisions. driving sales. Bangladesh. contributed to revenue growth. 2011 to 798 as at December 31.5% growth in sewing machine unit sales in 2012.773 as at December 31. 40. the introduction of the petrol vending machine. The increase in dealers from 2. In Thailand. This strong performance may be attributed to the reduced cost of these products. panel televisions and sewing machines of 52.1% in 2012.S.3%. whilst air cooling products are new to the market and offer a more affordable alternative to air conditioners. 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. Pakistan. combined with strong sales of mobile phone airtime vending machines.S.794 units. almost all product categories experienced strong growth. stores experienced greater productivity. The increase in revenue in U. All these factors resulted in a reduction in consumer disposal income and a gradual slowdown in the revenue growth to 15. bottle coolers and freezers to small entrepreneurs helped drive sales growth. 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%. with sales per square meter increasing by 14.6% in 2010. Further. This growth was driven by an increase in the number of stores by 24. at 32.2% and in air cooling products of 70.2%. 2012 helped to drive this growth. following the successful introduction of the small appliance category. an increase of 30 stores and the full year contribution of the eight stores opened in 2011. amongst others. As Singer India has been operating in India since 1870.4% in 2012 from 37.2%. Despite this slowdown. since panel televisions have become more affordable following the reduction in import duty in 2011. HCD products also performed well in Thailand with unit sale growth in air conditioners. respectively. In Sri Lanka.3% and 27. Bangladesh. where unit sales increased by 600%. During 2012. 2011 to 2. 101 . In Bangladesh. many product categories performed well with unit sales growth in panel televisions of 23. Revenue growth in Pakistan was subdued due to economic and political instability and widespread unrest in the country. India and Thailand.5%. dollar terms was primarily due to an increase in the sale of goods.4%. adding to the 17. particularly in Sri Lanka. dollar revenue growth in 2012 was significantly impacted by currency devaluations in Sri Lanka.

Our gross profit increased by 7. .9% Like-for-like revenue growth 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. . . . .4% 25. . . . . . . . . . . 5. . . . . . . . . . 102 . .8 million in 2012. . . .4% India US$33.5 18. .7% Pakistan US$27. . .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. .1 6. . . . . .9% (or US$17. The figures provided are in millions of U. . . Bangladesh and Pakistan was: Like-for-like revenue growth in percentage 2012 revenues compared to 2011 Sri Lanka . . finance charges. where the gross margin percentage is highest. . . . . .9% in 2011 to 38. Bangladesh . . . . . . . . .3 0. . . . . . . Pakistan . . . . .6% from US$154. therefore. . . Cost of Sales and Gross Profit Our cost of sales increased by 6. . . . . .7% Bangladesh US$82. .3 45. . . .1% Other US$1. .1 million in 2012.7 7. The gross margin percentage increased slightly from 37. dollars.4 million in 2011 to US$269.1% in 2012. . . . .0 21. . .8% 2. . This was partially off-set by a decline in the gross margin percentage in Sri Lanka. . .The chart below sets forth the revenue mix by source country for 2012. . . . . . . . . . Thailand US$92. . . . .S. . . . . The gross margin percentage increased mainly on account of the increase in the sale of goods in Thailand.3 million in 2011 to US$166. . . .4 million) in 2012 from US$252. . . . . . . . The like-for-like sales growth in Bangladesh was strong. . . .2% Sri Lanka US$199. . 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.

4 million in finance costs. The increase was primarily due to the increase of US$123.0% in 2011 to 25.7% from US$31.1 million in 2011 to US$16. 2013).9 million in 2011 to US$112. the percentage of warranty provision to product sales increased from 0. 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.4% in 2011 to 0.5 million in 2011 to US$1. This was in part due to increases in warranty expenses.6% in 2012 (and for the three months ended March 31. both of which relate to Singer Sri Lanka.4 million in 2012 due to the changes described above.Other Income Our other income increased by 20. Bangladesh and Sri Lanka all resulted in reduced selling and administrative expense percentages in these countries. 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. 103 . particularly in Sri Lanka.1% from US$109.000 in income from repairs for products out of warranty and an increase of US$124.000 in the penalty charged on overdue installment receivables. In 2012.4 million in finance cost (before set-off against finance income) was primarily attributable to (i) a rise in interest rates. As a result.4 million in 2012.4 million in 2011 to US$35.3 million in 2011 to US$3.8 million in 2012. Net Finance Costs Our net finance cost increased from US$11. 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.0% from US$3. which resulted in an increase of US$3. Income Tax Expense Our income tax expense decreased by 8.S.2 million in 2012. our internal audit department. As a percentage of revenue. selling and administrative expenses declined from 27.7% in 2012.9 million in 2012.7 million in 2011 to US$8.2% of revenue to 0. Thailand. This decrease was primarily due to a decrease in the corporate tax rate in Sri Lanka from 35. These strong performances also resulted in lower impairment losses on trade receivables that reduced from 1.0% and lower withholding taxes on dividends received.2% from US$9.8 million in 2012.0% to 28. which resulted in an increase of US$2.9% of revenue. which increased in 2012. Profit before Income Tax Our profit before income tax increased by 12. together with Singer Bangladesh. The strong revenue growth in India. The increase of US$5. 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.0 million in financial costs. GAAP. Selling and Administrative Expenses Our selling and administrative expenses increased by 2. Warranty provisions are directly proportional to product sales as the first year warranty is offered for free to customers on products sold.0% from US$1. Other Expenses Our other expenses increased by 3.

0% in U..3% (2) 40. See “– Significant Factors Affecting Our Results of Operations – Macroeconomic conditions in our countries of operation ”.3% -20.357. .0 PKR2.0% 5. Other (1) .. ..9 406.5 29. . . .4 1. together with the combined revenue calculated at constant exchange rates and as per IFRS. The profit attributable to equity holders of the Company increased 11. . .325. dollar terms in Sri Lanka.1 62.1 75.463. 2010. as revenue at constant exchange rates increased by 24. .7 2011 LKR22. ..6% . Group . . The overall impact of changes in foreign currency exchange rates was minimal in 2011.7 – 37. .6 million in 2011 to US$26. helped in the case of panel 104 . . . . Bangladesh (3) Percentage change 2011 vs. Non-controlling interest share of profit increased by 47. The customs duty reductions decreased the overall cost of the products in these categories correspondingly.6% from US$326.8% 16.9% primarily on account of a comparatively stronger performance from the Thailand business where the minority portion is highest. . . .600. .2% -20. .978. on account of an overall improvement in the economy in Sri Lanka following the cessation of civil war in 2009 and the reduction by the Sri Lankan government in customs duty for certain product categories with effect from January 2011.299.762 and BDT192.3 2011 198. .7 million in 2011... as such.2 27. . Bangladesh amended the regulations for VAT resulting in the exclusion of VAT from revenue.2 PKR2..054. 2010 Local currency US$ Revenue in US$ million 2010 142.8% 24.5 INR1.7 BDT4.. . we were able to reduce the retail price of certain HCDs. 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.0 THB1. The table below sets forth our revenue increase in 2011 versus 2010 in each country of operation measured in local currency and U. Thailand . . Year Ended December 31.. 2010 Revenue Our revenue increased by 24. The 2010 revenue per square meter for Bangladesh would have been US$2. .4% 25.3% 4.9% 21.010. 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 2011.824. respectively.8 BDT5. respectively for the periods indicated. . Pakistan . .3 – LKR16. India . On July 1. Revenue in local currency million 2010 Sri Lanka .2% 12. .Profit Our profit increased by 22.3 THB2. .9 28. . . Revenue Year ended December 31. . and. .040.3 23. This figure is a non-IFRS measure.2 million in 2011 to US$16.2 2. 2011 Compared to Year Ended December 31. .4 326.9 million in 2012.9% 28. dollars. . . Our sales increased by 40.9 72. .3 million in 2010 to US$406. . .421.5 million in 2012 due to the changes described above.3%..2% from US$15. .1 69.3 INR1. 2010.S..4% 5. if this amendment to the VAT regulations had been in place from January 1.8% 24.7% from US$21.S. .

9%. .463 82.007 185. .5 7. . Unit sales of other major HCD products such as television and freezers increased by 29. . . . . .5% India US$29. . . . . . Thailand US$75. as indicated in the table below. . . . rice cookers. . . . . . The chart below sets forth the revenue mix by source country for 2011.S. .9 0.2% Pakistan US$28.5% Customs duties were also reduced from 28% in 2010 to 0% in 2011 in Sri Lanka on microwave ovens.3% respectively for the year ended December 31. 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. . .6% and 19.807. . . 2011 compared to the same period in the prior year.7% increase in unit sales of sewing related products. In India. . . . Customs Duty and Unit Sales Customs duty rate in 2010 Panel televisions (< 32 inches in size) . . . Kitchen appliances . . .0% Bangladesh US$72. . .4 18. . . .6% 58. In Thailand. This made our products more affordable and resulted in a significant increase in the sales of these products in 2011 compared to 2010. . .503 174. Customs duty rate in 2011 Unit sales in 2010 Unit sales in 2011 % change 15% 15% 28% 0% 0% 0% 4. as well as general growth in the economy led to an 11. active expansion of Singer India countrywide. DVD and home theatre systems . . .397 1.453 301.television by a reduction in price from suppliers.9% Sri Lanka US$198. The figures provided are in millions of U. . . and audio players which also meaningfully increased sales volumes.9 48. .5% Other US$1.6% 62.325 110.9 17. dollars. .1 7.9% 105 . .

. . . In 2011. . . for US$31. does not generate revenue from the sale of products. . . . which increased in 2011. . Certain minor changes to margins took place in Thailand and Pakistan as their product mix shifted. . Other Income Our other income decreased from US$25. which. . . . Other Expenses Our other expenses increased from US$2.1% in 2010 to 37. .6% interest in its affiliate leasing company. we increased our advertising and promotion spending as a percentage of revenue from 3. . Bangladesh and Pakistan in 2011.The following table indicates the like-for-like sales growth in our retail businesses in Sri Lanka. . . . ILFS. . .0% in 2011. . 106 . . . . . As a percentage of revenue. . .6% in 2011.4% 8.6 million in 2010 to US$3. . . . . . . . . . . .7% 12. . .3% to 3. . . . . . .9 million in 2010 to US$1. Pakistan .5 million in 2011. . . .3 million in 2010 to US$109.9 million in 2011. .S. . . 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.3 million in 2011. . . . . . . . Selling and Administrative Expenses Our selling and administrative expenses increased by 27. . . being a finance company. . . . .3 million in 2011. . . . . . . . selling and administrative expenses increased from 26. . 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. Cost of Sales and Gross Profit Our cost of sales increased by 23. . .9 million resulting in a gain on disposal amounting to US$24. . .0% (or US$47. . . .4% in 2010 to 27. . . . 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. 23. . . . . our gross profit increased by 27. . . . . . . Singer Finance’s selling and administrative percentage of revenue was 42. This increase was primarily on account of the strong performance in Sri Lanka.1 million in 2010 to US$154.9%. . . GAAP. Bangladesh . In 2010.5 million. As a result of the above. . . . .2 million) in 2011.4% from US$121. These higher profits gradually decreased as competitive pressures realigned selling prices to the new duty levels. Like-for-like sales growth in percentage terms (2011 compared to 2010) Sri Lanka . our subsidiary in Bangladesh sold to third parties its entire 35.9% in 2011. . . . to take advantage of more buoyant economic conditions in our countries of operation.8% The like-for-like sales growth in Sri Lanka was particularly strong due to the buoyant economic conditions and lower customs duties. . . . . . . . . . where the selling and administrative expenses as a percentage of revenue is comparatively higher. . . . . The gross margin percentage increased from 37. .3% from US$86.

debenture issues and public deposits.1 million in 2011. 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.3 million in 2010 to US$9. our material unused sources of liquidity amounted to US$75. Profit before Income Tax Our profit before income tax decreased by 34.1 million in 2010 to US$15.1% from US$12. The profit attributable to equity holders of the Company decreased 41.7 million in 2011. including our sales on credit and the opening of new stores and to satisfy our debt-service obligations.5 million and the capital gains tax thereon.3 million (“ Adjusted Profit ”) and US$9.Net Finance Costs Our net finance costs decreased by 2. 2013.4% from US$47.2% increase.4 million.6 million in 2011. meeting operating expenses and capital expenditure.4 million in 2010 to US$11. Liquidity and Capital Resources Our primary sources of liquidity are the cash flows generated by our operating activities. If the other income resulting from the “one-time” gain on disposal of ILFS was eliminated.8% from US$26. Income Tax Expense Our income tax expense decreased by 21. the profit before income tax in 2010 would have been US$23.5 million.4 million in 2011.6 million in 2010 to US$21. If the other income resulting from the gain on disposal of ILFS was eliminated.4 million. As at March 31.6% from US$11. the funds available under our existing credit facilities.9 million in 2010 to US$31. respectively. The principal utilization of cash has been for the payment to suppliers. which we accept as part of our financial services business. Adjusted Profit is a non-IFRS measure. adjusted profit for the year and the profit attributable to equity holders in 2010 would decrease to US$13. 107 . The majority of these sale proceeds were subsequently remitted as a dividend by Singer Bangladesh in May 2011.3% from US$35.2 million in 2011. See “ Presentation of Financial and Statistical Information – Non-IFRS Financial Measures ”. 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. ILFS. Interest rates relating to our borrowings remained relatively stable during this period. Profit for the Year Our profit for the year decreased by 39. and the profit before income tax in 2011 would have represented a 34. in Bangladesh. We require liquidity primarily to fund our working capital needs.

9) 0. . . .9) (10. . . . . .9) 26.5) (14. Cash and cash equivalents at beginning of period . . .8 (2. .3 1. . . . equipment and intangible assets net of proceeds of sale . . . .9) (0. . .8 (17. . . . . Cash Flows Year ended December 31. . . . . . .3 3. . . . . . . . . . . . .0 3.1 (10. .4 30. Change in borrowings .8 6.3 (2. .3 1. . .0 5. . . . . interest and tax . . . . .4) 1. . Interest paid .Cash Flows The table below sets forth our summary combined statement of cash flow information for the periods indicated.1) 56.2) 1. 2010 2011 2012 US$ million Operating cash flow before working capital changes. . .9) (11.5 (4.5 7. . . .5 5.4) 0. . . Distributions to owners and non-controlling shareholders . . . . . .5) (5. . 2012 2013 37. .4 0.3) (1. . .6) 12.5 4.7 16.6) (10. . Tax paid . .5 (24. .3 5. . . . .4 (42. . .6) (4. .4) (4. . . .5) 0. . .4) – (1. Net cash (used in)/from operating activities .7) (3. . . . . Acquisition of property. . .1) 1. . . . .9 (21.1 108 . . . .5 2.1 (49. . .8) (4. . . . .5 (17.6) (10.1) (4. . . . . . .5 0. . .7 30. . . . . . . .8 (14. Cash and cash equivalents at end of period . . . .3 (2. . Net cash from/(used in) investing activities .3 0.6) 46.5) 12. .8) (8. . Changes in working capital . .8) 32.2 (0. . . . . Proceeds from sale of investments and non-controlling interests . Interest received . .5 (2. .5 (0. . plant.1) (1.8 30.2 (28.6 2. .1) (16. . Proceeds from share options exercised .8) 6.2) 0.4) 0. . . . .9) – 0. Net cash (used in)/from financing activities .3 6. Effect of exchange rate fluctuations on cash held . .9 (3.3 15.9) – (9. . . Three months ended March 31.3 6. . .4) (1. .9) 13.9) (6.

7 million for the corresponding period in 2012 as a greater portion of the inventory in the 2013 period was funded by trade payables.4 million was distributed to owners of the Company and non-controlling shareholders during the year.6 million resulting in net cash generated from operating activities of US$5. while US$1. The increase in working capital during the three-month period ended March 31. 109 . A net amount of US$0. This operating cash flow was partially offset by working capital requirements of US$2. Interest paid in 2012 was US$16. 2012 and March 31. interest paid of US$4. Total interest bearing borrowings as at March 31. in particular increased trade and other receivables of US$31.8 million mainly reflecting the investment in new stores and depots and store renovations. Interest paid in the three months ended March 31.0% from US$154.Statement of cash flow information for the three months ended March 31. requiring some initial additional investment in inventory. A total of US$14.9 million was paid as dividends to non-controlling shareholders during the three-month period ended March 31.5 million.1 million.9 million. our operating cash flow before working capital changes. Inventories increased by 21.6 million in 2012 on account of the increase in credit sales.1% effected through sales on The Stock Exchange of Thailand which resulted in a cash inflow of US$5. 2013 was US$140.6 million as at March 31. Overall.3 million.8 million.7 million to US$118. This operating cash flow was more than offset by higher working capital requirements. 2013. A total of US$0.4% to US$13.9 million in 2011 to US$87.9 million and tax paid of US$0. an increase of 17. of US$7. 2013.4%. Interest paid increased partially on account of larger borrowings. interest and tax increased by 10. but mainly due to higher interest rates.3 million.8 million.9% from US$46.5 million. but mainly due to higher interest rates in Sri Lanka and to a lesser extent in Bangladesh. 2013 was US$2. We reduced our equity interest in Singer Thailand from 41. 2013 During the three-month period ended March 31. plant and equipment.3 million in 2012 as new third-party brand distribution agreements were entered into. During the three months ended March 31. net of proceeds of sales. our operating cash flow before working capital changes.0 million in 2011 to US$178. an increase of 40. of US$1. a net amount of US$24.9 million was used in investing activities.1% on 2011.1% compared to the corresponding period in 2012.0% which resulted in a cash inflow of US$1. which was substantially lower than the working capital requirement of US$17.4% from US$71. net of proceeds of sales. particularly in Sri Lanka. plant and equipment. We reduced our interest in Singer Thailand from 45.1 million was used in operating activities. Statement of cash flow information for the year ended December 31.0 million was invested in computer software.4 million to US$56.3 million was generated from investing activities. 2012. an increase of 44.8 million as compared to the same period in the prior year.8 million. 2013 was US$4. we acquired property. Interest paid increased partially on account of larger borrowings. Loans and borrowings increased by US$19.5% to 41. interest and tax increased as compared to the prior year by 20. 2012 During 2012.8 million compared to US$119.1% to 40.9 million and inventories of US$19. we acquired property. A net amount of US$1.5 million.0 million.7%. an increase of 51. In 2012. 2013. Trade and other receivables increased by 16.

Loans and borrowings increased by US$14. our operating cash flow before working capital changes. was sold for US$31. ILFS. a net amount of US$17. interest and tax increased by 24.8 million.5 million. In 2010. During the year.9 million in 2011. 2011 was on account of the early Chinese New Year holidays in February 2012 and the resultant necessity to purchase stocks earlier.9 million. and as a result a net amount of US$30. we acquired property. Statement of cash flows information for the year ended December 31.7 million was generated from investing activities. Overall.6% over 2010. This operating cash flow was offset by higher working capital requirements.4 million was distributed to owners of the company and non-controlling shareholders during the year.8 million. This operating cash flow was more than offset by higher working capital requirements.1 million in 2010 to US$154.2 million was used in operating activities.6 million. plant and equipment. Interest paid in 2010 was US$11.Statement of cash flow information for the year ended December 31. we acquired property. in particular.8 million to US$84. A total of US$21. The additional inventory on hand at December 31.0 million in 2011 on account of an increase in credit sales. Trade and other receivables increased by 23.5 million in 2011. 110 .0 million.2 million in 2010 to US$46. plant and equipment. Inventories increased by 31. Interest paid in 2011 was US$10. a net amount of US$10. increased trade and other receivables of US$14.2 million.9 million was generated from investing activities.9 million in 2010 to US$71.1% from US$125. A net amount of US$0.2 million to US$98.5% effected through sales on The Stock Exchange of Thailand. ILFS. in particular increased trade and other receivables of US$34. net of proceeds from sales. our operating cash flow before working capital changes. Loans and borrowings increased by US$0.9 million was distributed to owners of the Company and non-controlling shareholders during the year. We reduced our interest in Singer Thailand from 48.5 million. of US$4. Interest rates in 2011 were relatively stable. net of proceeds from sales. which resulted in a cash inflow of US$4.4 million.5% higher than 2010 due to the receipt of the sale proceeds following the disposal of our affiliate company in Bangladesh. the affiliate in Bangladesh. This was 87.5% to 45.2 million was used in operating activities.9 million. 2010 During 2010.6 million and inventories of US$21. Interest received was US$1. before the supplier factories in China closed for the New Year holiday. A total of US$5.0% from US$54.9 million which was 8. interest and tax was US$37. In 2011.4 million in 2011.8 million and inventories of US$9.4% lower than in 2010. of US$2. an increase of 68. Overall. 2011 During 2011.7% from US$37.

2010 2011 2012 US$ million Inventories .9 154. . 2012 2013 54.6 79. . .3 (1) Inventory turnover is calculated by dividing cost of sales for the immediately preceding 12 months by the inventory balance. . Working Capital As at December 31. .5 29.0 184. 2013 primarily because of an increase in inventory in Sri Lanka and Thailand. Borrowings As at March 31. our total combined short-term debt was US$100. . Note: (1) Trade payable days increased between December 31. respectively. . .3 million. 2013. . . Trade payables days are calculated by dividing trade payables by cost of sales and then multiplying by 365 days. . . .6 87. 2012. Other payables .4 142. . .4 21. . . . . . During this period.5 93. . As at March 31.7 times to 2. . . Net working capital increased 24.5 28.3 million and US$3.7 3.7 29.1 25. . .0 20. . . . 24.4 3.9 27. . . Trade and other receivables .3 30. .7 25. . .Working Capital The table below sets forth the key components of working capital at the dates indicated. . .2% in 2012 and 0. . 2013. . .9 3. . 2012 and March 31. . as at March 31.1 14. Inventory turnover (times) . .8% as at March 31.6 188.9 million. . . the inventory turnover has declined from 3. . this additional inventory relates primarily to new third-party brands and new categories that have been added to the product portfolio.9 125.6 18. . .7 29. Net working capital .4 71. . sales of these new brands and categories will increase thereby reducing the inventory turnover level. .2 156. .2% in 2011. . . Trade payables . .8 31. .3 3. The Sri Lankan New Year festival was in March and April 2013 and the Thai New Year festival was in April 2013.9 times. . . . .7 176. . . . There was a build up of inventory in anticipation of these festivals. Over time. . Trade payables days outstanding . 111 .2 2.5 million and our total combined long-term debt was US$40.9 42. . . .6 219. with inventory in Sri Lanka and Thailand having increased by US$8.3 178. 2013 compared to December 31. .5 221. . . .3 23. .

. . .4 2. . . . . . . . . . .0% As at March 31. . . . . .Our total financial debt includes both fixed-rate and variable-rate debt. . .3 140. . Bank overdraft . . . . . Finance lease liabilities . % Total . . . . . . . . . . .6% 8. . . while 71. . . . .1 0. . . . . . . . . . . . . .2 – 31. . .1 0. .4% 3.0 25. . .2% 13. . . . . .5 million (or 71. . . . . . . . 0. . .1 – 5.0 112. . . . . . . . . . Promissory notes . . . . .8% 0. Unsecured debentures .2 33.0 25. . . . . . none of our debt was denominated in U.7% 28. . .8 15. . . .0% The majority of the borrowings amounting to US$100. 2013 is as follows: Interest Rates As at March 31. . 2013. .3 28. . . . . . .8% 0. . . . 2013 Due within 12 months Due in more than 12 months Total % of total US$ million Secured bank loans . .0 25. Finance lease liabilities .1 18.4 20% 8. . . . . . . . . . . . . . . . . . . . . Unsecured bank loans .9 3. . Total . . . .8 100% 6. .5 71. .7% 17. . 5. .2% 13.6% 10. .S. . Public deposits . .7% 17. 9. . . . 2013. . .3 18. . .1% in Pakistani rupees and 19. .6% 10. . . . . . . . . . we had the following borrowings by maturity: Borrowings As at March 31. . . . . .5 36. . The vast majority of the public deposits are in Singer Finance (Lanka) PLC. . . . . . .0% 100. A breakdown of our borrowings by fixed-rate and variable-rate debt as at March 31. .7 0. 2013 Fixed Variable Total % of total US million Secured bank loans .0 19. . . . . . . . . .8% in Thai baht. . with only US$5. .3 140. . . Bank overdraft . . . . .4 40. Promissory notes . . . . . .3 13. . . . As at March 31. . Singer Finance (Lanka) PLC accepts cash 112 . . . . . . . .4%) of the total are due prior to March 31.8 100% 6. . . . . . . . . . .4 80% 8.8 15. . . 2014. . . . . . . . . . . . . . . . . . . . . . . .4 33. . . . .3 15.4 8. . . . . . . . . . . % Total . . . . .4 40. . . . . . . . . . . . .4 33. . .3 15. . . . . Unsecured debentures . .3 28. . . . . . . . .5 – – 0. . . .000 of the public deposits in Singer India.3 18.0% 23. dollars. . . . . . . . .2 – 40. .3 100. – 30. . . Total . . .0% was in Sri Lankan rupees. . . . . . Fixed rate long-term borrowings are not always readily available at attractive interest rates.0% 23. .7% 28. .5 – 5. . . . . . .1% in Bangladeshi takas. Unsecured bank loans . . Public deposits . . .0% 100. . . . .4 0.

.4 33. . .0 25. .9 1. . . .1% 2. .6 2. .5 3. In our financial statements. We have no U.1% – – – – 0.0 – – 0. . . these deposits are also classify under “loans and borrowings”. . .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. . 6. . 2011 2012 2013 US$ in millions 0. . Unsecured debentures . .4 40. . .3 15.1 million of these borrowings are secured by property. .9 2. . . . .1 – 7.3 18. . . . . . .0% – – – – – – 0.5 1.1 0. Total . . .8 8.6 – – – 0. .6 – 5.8 100. . 2010 Land. 2013 Sri Lankan Bangladeshi Rupee Taka Pakistani Rupee US$ million Secured bank loans. .3 31.1 4. . . . .2 – 2. . Public deposits . . .1 – – – – 0.1 99. . . . April 1.2 2.0% (or US$99. . . Total . . . . . US$7. . . . Promissory notes . . . . . .4 0. .2 0.8 million. .S. . . . .7 25. . . Of the total borrowings of US$140. . plant and equipment and US$8. . Unsecured bank loans . Computer software .7 1. . 71.3 million are secured by receivables. Capital Expenditures and Capital Investments Capital Expenditures and Capital Investments Three months ended March 31. . leasehold improvements. .3 1. . .6 27. . .7 15. . Plant and equipment . .3 10. Finance lease liabilities . . .8% 8. .from depositors and classifies these deposits under “loans and borrowings” in its financial statements. . .7 1. % Total . . . . . . . .8 0. buildings. . . .2 1. . Bank overdraft .5 113 . . dollar-denominated borrowings. . . . . .0 0. . . .7 14.4 12.0 25. .5 2. . .9 19. The borrowings are denominated in the following currencies: Borrowings in Local Currencies At March 31.8 9. . . . 2013 to the Latest Practicable Date Year ended December 31. . fixtures and fittings. . . .3 140. . .9 million) is denominated in Sri Lankan rupees.0% – 1.9 71. . .2 0. .

2013 to the Latest Practicable Date. . . . our capital expenditure of US$8. . our capital expenditure of US$2. 2012.7 million was primarily incurred for the opening of 80 stores and depots and renovation of 89 stores. . . . and purchase of computer equipment and software.7 9. . the opening of 28 stores and depots and renovation of 36 stores. . Year ended December 31. . . . . . . . . . 2010 For the year ended December 31. Planned Capital Expenditures Nine months ended December 31. . Total .1 million was incurred primarily for the opening of 50 stores and depots and the renovation of 98 stores. . . . . . . . . 2010. . . our capital expenditure of US$3. . . 2013 and the year ending December 31. . Planned Capital Expenditures We currently expect to incur capital expenditures for the nine months ending December 31. . . . 4. . . . Three-month period ended March 31. . . . . . .6 4.3 6. 2013 to the Latest Practicable Date For the period between April 1. . . . . the renovation of our Singer Sri Lanka’s corporate headquarters in Colombo. our capital expenditure of US$5. Sri Lanka and the opening of Regnis Appliance (Private) Limited incorporating our washing machine factory in Panadura.0 114 . . 2014. . Sri Lanka following a change in tax laws and a subsequent tax incentive to assemble washing machines in Sri Lanka. . 2012 For the year ended December 31.5 million was primarily incurred on opening new stores and renovating existing stores. Year ended December 31. . . .Historical Capital Expenditures April 1. Year ended December 31. Plant and equipment . our capital expenditure of US$2. . . . . . buildings. 2013 For the three-month period ended March 31. . 2013 Year ended December 31. 2011 For the year ended December 31. . .0 12. . . . leasehold improvements . . .9 million was incurred primarily for factory equipment for our factory in Regnis Appliance (Private) Limited. 2013. 2014 US$ million Land. . . . . . . .5 million was primarily incurred for the opening of 29 stores and depots and renovation of 57 stores. . 2011. as set out in the table below.0 6.

2 12. . . .0 The planned capital expenditures primarily relate to our strategy to expand and enhance our distribution platform (see “ Business – Strategies ”). . . . . . . . . . . . .3 million. . . . . . . . . . . . . . . .3 0. 2014 US$ million Sri Lanka . . . . . . . . . .5 million between one and five years. Total . . . . . . . . . . . . . . . . . . . . . . . . . .7 1. . . . changes in the economies of Sri Lanka. . . . . . . we had contractual obligations of US$4. . . . . . .5 9. . 2012. including our future cash flows. . . . . . . results of operations and financial condition. problems in relation to possible construction/development delays of our stores and factories.2 2. . . . . . and also relate to further enhancements to our information technology systems and our manufacturing capacity.Planned Capital Expenditures Nine months ended December 31. . . . . . . . . .3 5. . . . . . . . . . . we did not have any material capital commitments other than to acquire software amounting to US$0. . . . Our actual capital expenditures may differ from the amounts set out above due to various factors. . . . . .0 1. . 2012. . . . . . . . . . . . . changes in the legislative and regulatory environment and other factors that are beyond our control. As at the Latest Practicable Date. . . . . . . . . we did not have any material capital commitments. . . . . . 4. . . . . . . . . . . . . Thailand . . Bangladesh . .9 1. . As at December 31. . . . . . . India . . . . . . 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 ”). . . . . Pakistan. . .7 1. . . . . . Bangladesh. . . . . . . . . 115 . . .4 million in respect of non-cancellable operating lease rentals of which US$1. . 2013 Year ended December 31. . . . Contractual Obligations and Commitments As at December 31. . . the availability of financing on terms acceptable to us. . . . . . . delays in obtaining or receipt of governmental approval. . .9 million were due within 12 months and the balance of US$2. . . . . . .6 0. . . India and Thailand. .2 2. . . . Pakistan . .

. It also includes operating lease commitments. most of which are short-term (less than 90 days) in nature. dollars to our international third-party suppliers. . 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.e. . . .0 − − − − 37. Hedging Arrangements Our policy is to borrow money to fund the operations of our subsidiary businesses in the local currency of the respective countries. . policies and processes for the management of these risks. .4 145.. Financial Risk Management We are exposed to financial risks arising from our operations and the use of financial instruments. . . . promissory notes.3 − 13. Order Book Due to the nature of our business.The following table summarizes our significant contractual obligations and commitments as December 31.4 31.6 Our Company also has ongoing purchase commitments for inventory which are made in the normal course of business. .9 105. debentures.3 − 2. Short-term debt obligations (1) . We do not currently hedge against foreign currency risk arising from payments in U. .8 1. 1 to < 3 years 3 to < 5 years Ն5 years Total Interest – 103.7 29. we do not maintain an order book. The key financial risks include market risk. .7 7.9 − 0.8 4. . Total .2 103. . . The matter is now at the hearing stage and the proceedings before the High Court are pending.3 5.S. 116 . . We do not view this matter as material. . Our policy is to monitor our foreign currency exposure regularly and assess if the foreign currency exposure should be hedged against. . We plan to fund these contractual commitments through our internal cash flows and external borrowings. bank loans. 2012: Contractual Obligations and Commitments Payments due by period US$ million Within one year Long-term debt obligations (1) . Note: (1) Long-term and short-term debt obligations include all loans and borrowings as presented in the financial statements. . The following sections provide details regarding our exposure to the above-mentioned risks and the objectives. bank overdraft. . public deposits and finance leases. i. Off-Balance Sheet Arrangements and Contingent Liabilities We have no off-balance sheet arrangements or contingent liabilities. liquidity risk and credit risk. . Lease obligations . See “ Business – Legal Proceedings – Singer Pakistan ”.1 8.4 8.

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. The objective of market risk management is to manage and control market risk exposures within acceptable parameters. 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. without incurring unacceptable losses or risking damage to our reputation.Market Risk Market risk is the risk that changes in market prices. such as foreign exchange rates and interest rates will affect our income.4 million arising mainly as a result of higher (lower) interest expense on our net floating borrowing position. Our exposure to credit risk arises primarily from trade and other receivables. For other financial assets (including cash and bank balances). 2013. a hundred basis points increase (decrease) in interest rates would decrease (increase) our profit after income tax by approximately US$2. as far as possible. under both normal and stressed conditions. 2013. Net finance costs in the three months ended June 30. 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.S. Trend Information Our revenue growth. while optimizing the return. Exposure to credit risk At the end of the reporting date. geographic revenue mix. 117 . 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. 2013 are expected to be similar to that of the three months ended March 31. dollar. 2013 are expected to increase compared to that of the three months ended March 31. Credit Risk Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on its obligations. we minimize credit risk by dealing exclusively with high credit rating counterparties. With all other variables held constant. that we will always have sufficient liquidity to meet our liabilities when due. Our approach to managing liquidity is to ensure. 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. gross margin percentage and selling and administrative expenses as a percentage of revenue in the three months ended June 30. Interest Rate Risk We manage interest rate risk on borrowings by using a combination of fixed and floating interest rates. The currency in which these transactions primarily are denominated is the U.

S.The income tax expense in the three months ended June 30.4 31. our Directors are not aware of any known trends. commitments or events that are reasonably likely to have a material and adverse effect on our revenue. 2013 in line with the revenue growth.1 September 13. deteriorate or continue to further deteriorate against the U.8 99. dollar. June 30.7 If the local currencies in which we conduct our business and/or report our financial results. 2013 in accordance with seasonal trends. 2013. 2013 as the one-time deferred tax credit during the three months ended March 31. The installment receivable portfolio as at June 30. uncertainties. Closing exchange rate for the U.3 63. these trends are expected to continue for the remainder of 2013. 2013.7 78. 2013 remains stable compared to March 31. 2013 is expected to reduce compared to March 31.1 103. During the three months ended June 30. Except as disclosed in this offering document and barring any unforeseen circumstances. there has been a material deterioration of the India Rupee against the U. The table below sets out the exchange rate between the relevant local currency per one U. demands. 2013.3 June 30. Dollar to: Sri Lanka Rupee Bangladeshi Taka Pakistan Rupee India Rupee Thai Bhat March 31. dollar. 2013 is not expected to recur in the three months ended June 30. 2013 130. Inventory as at June 30. 2013 126. this will materially and adversely affect our business. dollar as at March 31.3 29. liquidity or capital resources. Since March 31.5 31. Pakistan Rupee and Sri Lanka Rupee have also declined in value against the U. in the various countries where we have operations.2 76.6 59.4 54. 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. 2013 is expected to increase compared to March 31.S. 2013. 2013. 118 . The Thai Baht.S.2 98.S. Barring unforeseen circumstances and save as discussed below. The arrears percentage and paying percentage as at June 30. profitability. 2013 is expected to be higher than that of the three months ended March 31. 2013. dollar. financial condition and results of operations. 2013 and as at the Latest Practicable Date of September 13.6 77. we remain on track with our new store opening and store renovation program.S. 2013 132.

11% Singer (Sri Lanka) PLC(1) (Sri Lanka) 58.28% Singer (Sri Lanka) B.(1) (Bangladesh) Singer (Thailand) B.0001% is held by ThaiInvest B.V. 2013 as “Sewko”.V. One (1) share in Brand Trading (India) Private Limited or 0.I.99% Singer Bangladesh Ltd.9996% (Thailand) Co.29% Singer (Broker) Limited (Thailand) 99. (Sri Lanka) Notes: (1) (2) (3) (4) This entity is listed on a stock exchange in its respective country.V. we have 29 subsidiaries.60% 80.V. 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. The remaining 76. In voluntary liquidation.V.4% ownership in Telshan Network (Pvt) Ltd is held by 11 third-parties..V..V.V.7% Regnis (Lanka) PLC(1) (Sri Lanka) Singer Service Plus Co. (Sri Lanka) Regnis Appliances (Pvt) Ltd.) Singer Corporation Limited (Hong Kong) Btindia Limited (B.V.I.CORPORATE STRUCTURE AND OWNERSHIP Corporate Structure We were incorporated in the Cayman Islands on May 24.V. (Netherlands) Singer (India) B.V. (Netherlands) Singer Pakistan Ltd.40% 40% 15% Telshan Network (Private) Limited(2) (Sri Lanka) Singer Finance (Lanka) PLC(1) (Sri Lanka) Reality Lanka Ltd. (Netherlands) 74.V.88% 45% 23. 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. (Curaçao) 100% Singer Asean Trading Limited (B.(1) (Pakistan) Singer India Limited(1) (India) Singer Leasing 99. see “ Appendix B – Our Subsidiaries. Limited (Thailand) 100% 99. (Netherlands) 100% Singer Bhold B. (Curaçao) Singer Asia Holdings B. (Netherlands) 40% Singer Thailand Public Co. (Netherlands) 75% Singer (Pakistan) B. As at the Latest Practicable Date. 119 . (Netherlands) 70. For information regarding our subsidiaries and jointly controlled entities.(1) (Thailand) ThaiInvest B. Ltd. (Netherlands). Associated Companies and Joint Venture Entities ”.) 100% Brand Trading (India) Private Limited(3) (India) Singer Asia Finance B.

Bangladesh. Bangladesh and Pakistan. Beko.BUSINESS Overview We are the largest retailer of HCD products in Sri Lanka. In 2012. Source: The Nielsen Company. Our Adjusted EBITDA totaled US$37. services and brands.6 million in 2011 and US$26. substantially all of which can be purchased through consumer credit which we provide.5 million. 120 . We intend to grow our business and increase profitability by expanding and enhancing our distribution platform. Grundig. US$46. and high quality customer service. our independent dealer network by over 600 independent dealers and the number of direct selling depots by 17. We believe that through our long-term presence in the region. introducing new brands and products. including consumer finance to purchase these products. Since the SINGER ® brand was first established in 1851 with the creation of the Singer company. Videocon and Whirlpool. through our extensive distribution network. Skyworth. Prestige.724 sales canvassers. inward remittances.5 million in 2011 and US$56. US$406. Our ability to provide customers a complementary mix of products. Pakistan. 1 with 922 stores and 2. Philips.2 million in 2012. As at March 31. mobile phone reloads and acceptance of public deposits as well as extended warranties and customer protection plans.2 million in 2010. furniture and sewing machines. US$21. Godrej.7 million in 2011 and US$435. Samsung. Bangladesh and Pakistan. Our brand offering includes both house brands as well as widely recognized third-party brands including Apple. We believe that our core markets of Sri Lanka. 2013. including home appliances. 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. representing a CAGR of 15. expanding our consumer credit and financial services offerings. Dawlance. We offer a wide variety of credit products. Our revenue totaled US$326. with total accounts receivable of US$218. We have operated in each of our markets for over 100 years. 2013. Huawei. Hitachi.6% from 2010 to 2012. as at March 31.5 million in 2012. IT products. Pakistan and India.9% from 2010 to 2012. we have evolved into one of the most recognized HCD retail brand names in South Asia offering our customers a wide range of HCDs. we processed on average nearly one million consumer finance and financial services transactions per month. we provide transaction-based financial services such as bill payments. increasing our online presence and penetrating additional markets. including hire purchase. TCL. representing a CAGR of 22. we have established a strong brand identity that our customers associate with trust.895 active credit accounts. as at March 31. Haier. we managed 679.105 independent dealers across Sri Lanka. and group sales (offered by partnering with organizations to provide easy payment terms to their employees for purchases of our products). Cambodia and Laos. Onida. we have increased our retail store base by 97 stores to 909 stores. we operate a direct selling business with 211 direct selling depots and 2.9 million in 2012. 2 where consumer credit is often expensive and difficult to obtain. In addition. We are the leading provider of HCD consumer credit in Sri Lanka. quality and consumer finance. Our Adjusted Profit totaled US$13. such as the ASEAN countries of Myanmar. consumer electronics. In Thailand. has enabled us to realize meaningful synergies and grow our Company successfully. 1 2 Source: The Nielsen Company. 2013. leasing facilities.3 million in 2010. Tefal. some of which are under exclusive distribution arrangements.3 million in 2010. Bangladesh. During the period from 2010 to 2012.

we operate a direct selling business with 211 direct selling depots and 2. 2013. IT products. Huawei. Skyworth.724 canvassers. as at March 31. 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. our high quality after-sales customer service and our commitment to improving the local communities where we operate. as at March 31. Onida. Godrej.724 sales canvassers. Pakistan and India. 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. Bangladesh. Hitachi. TCL. Philips. 1 with 922 stores and 2. Tefal. In addition to the SINGER ® and other house brands. quality and consumer finance. comprising home appliances. Extensive multi-channel retail and wholesale distribution platform We are the largest retailer of HCD products in Sri Lanka.105 independent dealers across Sri Lanka. 121 . providing customers with wide access to products and services. 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 believe that we have established a strong brand identity that our customers associate with trust. Beko. Our distribution network is supported by a highly experienced and professional sales force of store managers with 2. our online retail portal has begun to tap into the nascent but growing online retail market. Grundig. including recognition as the “Most Popular Brand in Sri Lanka ” every year since 2005. Dawlance. the high quality of our HCD products.422 store staff and 2. sewing machines and other products. the wide range of consumer finance products that make our HCDs accessible to a broad base of consumers. In addition. Samsung. 2013. our multi-format retail stores cater to evolving customer preferences and local market conditions. We have focused on selling high quality house brand and third-party products. Our extensive network services metropolitan. In Thailand. as evidenced by the numerous accolades and awards we have received. Bangladesh and Pakistan.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. Haier. some of which are under exclusive distribution arrangements. including Apple. furniture. some of which we manufacture or assemble domestically where there are local efficiencies or tax and duty incentives. 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. Videocon and Whirlpool. We also offer customers house-branded products. we offer a wide range of HCD products. emotional tie-ins result from our long-term presence in the regions in which we operate. and has evolved into one of the most recognized HCD retail brand names in South Asia. urban and rural areas. Prestige. the internationally recognized sewing machine brand. We believe that the third-party brands we offer increase our brand image as a retailer and provide our customers with a wider selection. 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. In addition. Through our extensive distribution network. We believe we will continue to benefit from this market position as the established brand loyalty of consumers to incumbent players. Internationally recognized and domestically established SINGER ® brand Our SINGER ® brand was first established in 1851 with the creation of the Singer company. we offer a broad range of widely recognized third-party brands. consumer electronics. 1 Source: The Nielsen Company. We believe these positive.

Our executive management team.5 million. Bangladesh and Pakistan. as well as extended warranties and customer protection plans. They have a deep understanding of regional and local markets. among others.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). We continue to provide our customers with installment and other credit services. mobile wallets and branchless banking. Beginning in 1856. 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 where consumer credit is often expensive and difficult to obtain. including hire purchase and group sales for substantially all of our HCD products. In 2012. whose average age is 50 years. Our comprehensive credit control system monitors receivables performance on a real-time basis. except for sewing-related products and ironing presses for which we have a perpetual distribution agreement. we managed a total of 679. 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. where disposable income levels. 2013. In addition. mobile phone reloads and acceptance of public deposits. penetrate new markets and segments and grow our customer base and customer loyalty. 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. have worked with us for an average of 18 years each. This will ensure that we hold the exclusive right to the use of our brand in our current countries of operations. We offer a wide variety of credit products. while providing us the opportunity to expand into other Asian markets. we provide leasing facilities. the Singer company pioneered the use of installment payment plans to enable customers to afford and immediately purchase a sewing machine. We operate in emerging 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. 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. 122 . remain lower than those in more developed markets. have an average experience level of 22 years managing HCD retail and providing consumer finance services to our customers. 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. Integrated consumer credit and financial services operations with strong credit control We are the leading provider of HCD consumer credit in Sri Lanka. transaction-based financial services such as bill payments. They have built a solid platform 1 Source: The Nielsen Company.895 active credit accounts with total accounts receivable of US$218. remittances from abroad. We are introducing additional financial products such as Singer credit cards. while increasing. We will continue to maximize our internationally recognized and domestically established SINGER ® brand in order to cross-sell our various products and services. suppliers. competitors and customers. Since our establishment. which has successfully increased our revenue and profits. The key members of the executive management team. we processed an average of nearly one million consumer finance and financial services transactions each month. delivering growth even during economic downturns such as the recent global financial crisis and Eurozone debt crisis. thus maintaining a long tradition of enabling our customers to have access to HCD products. which include our Group management team and each country’s key managers.

We continuously seek to improve our overall customer experience and improve operational efficiency and customer loyalty. as collections can be severely impacted if products are no longer operational or are not repaired promptly. merchandising. to drive and reward operational excellence. 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. Further.133 sales outlets. service centers and franchise service agents provide in-person assistance relating to the use of our HCD products. 2013. increasing third-party brands and introducing new products and service lines. High quality customer service We emphasize building long-term sustainable relationships with our customers. Fully-integrated. In addition. a tailored software system that. 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. Our executive management team is supported by a motivated and trained network of staff. Our sales outlets. 33 service centers and 871 customer service agents. daily cash management. offer advice on SINGER ® and third-party brand products and provide free servicing and repairs. 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. 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 allows us to increase operational efficiency and reduce costs across our distribution network and in our consumer finance business. 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. inventory management. which we believe is essential to ensure sales employees can properly explain the features of the products we offer. We monitor our employees’ performance based on criteria such as sales. Our dedication to high quality customer service has been critical to the selling of additional HCD products and cross-selling of consumer finance products. store administration and staff morale. Store managers and staff undergo product knowledge training by the SRA. ranging from our branch managers to our store staff and canvassers across the five countries where we operate. we introduced “The Star Performer” award and monthly newsletter recognizing the management with the best trading performance. as at March 31. collections. In particular. We conduct regular product clinics in select outlets on a rotational basis. advanced online ERP system. provides us with real-time business information including sales. Further. such as extended warranties. 123 . Our customer service is supported by call centers in each country and a widespread network of 1. motivate and develop our employees. We also rely on customer house visits by our canvassers following a direct sale. among other things. in 2006. The Singer Information System also offers a sophisticated management platform for our consumer finance operations that integrates our numerous customer accounts. and our extensive incentive schemes work together to enhance performance. including the creation of the Singer Information System. their credit portfolios and installment plans and customer payment profiles. enhancing the credit control mechanisms. a program that seeks to train. inventory levels and data relating to our consumer finance operations. whereby experienced service agents answer customer queries.for growth through implementing a wide range of changes since 2005. which we actively promote. advanced online IT system We have developed and currently operate a fully-integrated. Our “Singer” culture. substantially all of our employees undergo training through the Singer Retail Academy (“ SRA ”).

Our historical and projected distribution platform growth is represented in the chart below: Number of retail stores and direct selling depots 1. we intend to grow our retail store base by a further approximately 130 stores.400 Number of independent dealers 900 1. 2013 to December 31. we have developed a growth strategy with the following key elements. 124 .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. These additional stores.200 300 600 - FY2010 183 812 1.211 FY2012 200 909 2.039 2.500 3. At the same time. we intend to expand our operations into certain high growth ASEAN countries. 2014. Over the period from January 1.800 600 1. 2012. The growth potential of renovated stores is enhanced as customers are afforded a more modern. From 2010 to 2012.690 FY2014 220 1. focusing particularly on the fast developing rural populations that are currently underserved by us and our competitors. add approximately 400 independent dealers and approximately 20 direct selling depots. Over the period from January 1. we intend to renovate or relocate approximately 220 stores.200 2. we increased our retail store base by 97 stores. 2014. The larger renovated stores are also able to display a greater range of HCDs and brands. Bangladesh. our independent dealer network by over 600 independent dealers and our direct selling depots by 17.000 1. 2013 to December 31. enlarging the retail space within our existing stores and relocating stores to more suitable locations as appropriate. In order to achieve these goals. professional and exciting shopping environment.835 - Direct selling depots Retail stores Independent dealers We also plan to enhance our existing retail network by renovating older stores. 2010 to December 31. dealers and depots will be located in areas with high growth potential. Pakistan. India and Thailand by providing a diversified range of products and services aimed at satisfying our customers’ needs.435 FY2013 210 969 2. Expand and enhance our distribution platform From December 31. Our policy is to complete a major store renovation at least every six years with lower cost upgrades every two years. we renovated 187 stores.797 FY2011 187 850 2.

We expect the product contribution of furniture to increase significantly from the 2.Introduce new brands and products We believe it is critical for us to continually review. which is one of the largest telecommunications equipment manufacturers and one of the largest smart phone producers in the world. the longer credit term of our installment plans should increase the total finance charge income. we intend to continue to expand the range of house-brand products as new designs and models become available. We believe this will attract new customers into our stores. In the financial services business. We intend to begin to sell furniture in Pakistan in the second half of 2013. which is not widely available in Bangladesh and Pakistan. 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. tailor and enhance our product offerings in response to evolving customer preferences and new opportunities that arise. remittance business. for the sale of smart phones and tablets in Sri Lanka and Bangladesh. We also entered into distribution agreements with the highly recognized Indian brands Godrej. these have been very well received by our customer base. 2013 to December 31. we have begun to sell furniture in Bangladesh. We intend to utilize the Singer Homes retail format and provide installment credit for the purchase of furniture. 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. mostly sourced from our own factories or local vendors. We expect that this will allow more customers the opportunity to view the range of our HCD products and experience our Singer customer service. In addition to third-party brands. thereby lowering the monthly installments. established and trusted retail brand. We believe furniture provides opportunities for higher gross margins and increased credit earnings while allowing for lower service and with inherent lower credit risk. In particular. we will increase our store footfall by attracting new customers and encouraging repeat visits by our existing customers. consumer credit operations.7% of total sales that it represented for the three months ended March 31. mobile phone reload and branchless banking. We plan to continue to take advantage of our extensive distribution platform. These IT products do not require significant additional selling space. In 2012. 2013. we intend to expand our bill payment services. We have also introduced additional collection incentives to our branch staff to encourage the growth of well managed credit portfolios. 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 believe that by providing a growing variety of financial products and services. We currently provide a wide range of third-party brands which we will continue to expand in the future. Further. Onida and Videocon and the European brands Beko and Grundig in 2012 and the first quarter of 2013. but we believe this percentage could increase significantly over the period from January 1. 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. IT products comprised 5. 125 . In addition to an increase in revenue. we entered into a distribution agreement with Huawei.8% of total sales for the three months ended March 31. We have also recently started selling Apple products in our stores in Sri Lanka and Bangladesh. Building on the success of our furniture business under Singer Homes in Sri Lanka. 2014. 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. 2013.

5.5% in 2011 and 6.0% in 2010.Penetrate additional markets in the ASEAN region We believe that in addition to the countries where we currently operate. 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. 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. The World Bank expects Myanmar.6% in 2012. Myanmar has a population of approximately 48. the Vendors and the Sole Global Coordinator. We intend to expand our operations into Myanmar. For nearly 30 years.1% in 2011 and 6. with GDP increasing by 6. While we. Cambodia and Laos to continue to grow economically. the Vendors and the Sole Global Coordinator. for the purposes of Section 249 of the Securities and Futures Act. we intend to launch.6 million people. Cambodia and Laos. we intend to enter into strategic relationships with local partners and establish a Singer subsidiary in each of Myanmar. 8. 126 . a new web-based service to enable them to make purchases of our products 1 See “General and Statutory Information – Sources”.5% in 2010. Laos.3 million people.3% in 2010. given the considerable number of Sri Lankan. In addition. neither we.3% in 2012 according to the World Bank 1. dealers from Myanmar. Bookrunner. we have established a strategic business development division. Bookrunner. according to the World Bank. We intend to enter these markets to provide the growing and increasingly affluent populations with our product and consumer finance offerings. 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 order to successfully take advantage of these promising investment prospects. over the last several years.0% in 2011 and 8. See “ Branding and Intellectual Property ” for a discussion about the scope of our trademark license. according to the World Bank. 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. We do not believe there are currently any established retail and consumer finance companies operating in Myanmar. Myanmar’s GDP has grown at a rate of 5. In addition to expanding our current trading activities. 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. Bangladeshi and Pakistani workers in various parts of the world. in 2014.3 million people. Cambodia and Laos also provide attractive potential growth opportunities. Myanmar is attractive because it provides a variety of investment opportunities reflecting the pace at which the government is liberalizing the economy. except for sewing-related products and ironing presses for which we have a perpetual exclusive distribution agreement. Cambodia and Laos have purchased certain of our Singer products from our locations in Thailand situated near to the borders with these countries. with a population of approximately 6.2% in 2012. and that the information has been extracted accurately and fairly from such report. with a substantial potential market for the sale of HCDs using consumer finance. has also benefitted from strong GDP growth of 8. 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). The country has. Cambodia has a population of approximately 14. 7. which includes dedicated personnel focused on exploring these expansion opportunities. we are well positioned to take advantage of new opportunities in other countries within the Asia Pacific region. The World Bank has not provided its consent. These markets have a relatively low level of HCD and consumer credit penetration and offer opportunities for sustained future growth. 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. experienced stable economic growth.

including present-day Bangladesh and Pakistan. Singer Manufacturing Company (the successor company to I. . . . . . Singer & Company and commences production of sewing machines in Boston. . Date 1851 . . . .V. most of which do not offer e-commerce-based sales. . .V. . . Singer N. 127 . .P. Singer Manufacturing Company introduces installment payment plan. . completes the sale of the Singer worldwide sewing business and SINGER ® trademark to SVP. .V. History The table below sets out the key milestones for Sewko.V. .. . .2% of Singer Asia. .M. becomes the parent company of several operating companies formerly owned by The Singer Company N. . . 1870 . . announce new store openings and provide information relating to product promotions.. . . . . . Event Isaac Merritt Singer founds I. . advertise new products or services. To preserve its rights in the trademark. . Singer Manufacturing Company introduces sale of home appliances to complement sewing machine sales in the Asian markets. 1957 . Singer & Company) begins overseas expansion. . . L. . Singer Asia provide investors a separate vehicle to inject additional capital for the growth of Singer Asia’s business in the Asia Pacific. The Singer Company N. . . including all of the operating companies now included in Singer Asia. . . . . . following a corporate reorganization. . . . 2003 . having been taken private in 1989. . Pakistan. . private equity firm. . 2000 . .V. Singer Asia acquires a perpetual license to use and sub-license the SINGER ® brand in the Asia Pacific license territories and an exclusive. . . Singer N. . .C. We believe that our online shopping portal will offer our customers a value proposition and help to differentiate us from our competitors. . stock of Singer N. (the successor company to the Singer Manufacturing Company) relists on the New York Stock Exchange. 1856 . . . . . 1877 . . . . . UCL Asia Partners. . . . a U. India and Thailand. to acquire the worldwide Singer sewing business. . . L. .. .V. . Bangladesh. perpetual right to distribute SINGER ® sewing products in countries of operation. . . . . . . . . forms Singer Asia to hold interests in Sri Lanka. . acquires 43. 2004 . . . Massachusetts USA. . . Singer Manufacturing Company commences operations in Thailand. . .L. . . . . to concentrate its resources and management in Singer Asia’s business in the Asia Pacific. . SVP was formed by Kohlberg & Company.M.S. . 1855 . We plan to use our online portals to promote this service. commences trading on the Pink Sheets Quotation Service. Singer N. . . Singer Manufacturing Company commences operations in Sri Lanka. . .V. Singer Manufacturing Company commences operations in India. . . 1991 .while working outside of their countries of origin and have these delivered to their respective families at home. . . 1889 . . This allows Singer N. .

2013. Pakistan. 2013 . . . Among the retail outlets and direct selling depots. 2008 . . re-branding the retail stores ‘Singer Plus’. . . .045 locations. . .435 independent dealers and corporate accounts.000th outlet. .558 independent dealers and 211 direct selling depots. . . . .Date 2005 . For the three months ended March 31. We have invested heavily in building and strengthening our distribution network. . . .724 canvassers. 2013.V. forms ReHo Limited as a 100% owned subsidiary in anticipation of a proposed sale or initial public offering of Singer Asia. sales canvassers. as at March 31. Retail Holdings N. Indian brands Godrej. Distribution Network We have a multi-channel distribution network across the region with national coverage in Sri Lanka.6% of product sales value was generated from our 211 direct selling depots and 2. . 2011 ..0% of product sales value in 2012 was generated from our 909 retail stores. six in Bangladesh. . . We become distributor for a number of additional third-party brands. . . . products were distributed via 922 retail stores. Direct selling: 18. a network of 2. We hire new senior management team and launch third-party brand strategy. . . 2005 . store staff. . 2010 . We introduce an improved credit system and commences expansion of its distribution network. Bangladesh. . . we owned 88 locations (33 in Sri Lanka. .8% of product sales value was generated from our 2. . . 2013. . As at March 31. . 2006 . . . 2012 . . .V. We launch new financial services products. .558 independent dealers and corporate accounts. . . . .1% of product sales value in 2012 was generated from our 200 direct selling depots and 2. Onida and Videocon and in 2013 European brands Beko and Grundig. . . 2013.V. including Chinese brand Huawei. . . . Sewko gives the Group the flexibility to pursue non-Singer brand business outside the Singer Asia arm. . . . Event Singer N. six in Pakistan and 43 in Thailand) and leased the remaining 1. including inward remittance. reflecting the sale of the Singer trademark to SVP. . 2013. . . 53. . . .9% of product sales value in 2012 was generated from our 2. Our distribution network has three main channels: • Retail: 61. . Sewko formed and acquires Singer Asia. . . 24. . . changes its name to Retail Holdings N. . . Wholesale: 20. India and Thailand. We commence roll-out of the Singer Information System. . . 21. . . For the three months ended March 31. . . . We open our 1. .773 canvassers in Thailand. and transfers its equity interest in Singer Asia to ReHo Limited. thereby providing customers greater access to our products and an enhanced shopping experience. • • 128 . Our distribution network is supported by a highly experienced and professional sales force. wholesalers and dealers. . . which includes store managers. . . in-store bill payment and mobile phone reload services. . 2011 . . For the three months ended March 31. . .6% of product sales value was generated from our 922 retail stores. . . .

. . . . . . . as at December 31. added 123 wholesale dealers and renovated or relocated 57 stores. . . However. . 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. . . We have entered into Singer sub-licensing agreements with Singer (Malaysia) Sdn Bhd (“ Singer Malaysia ”) in Malaysia and Blessington Pty. . 2013. . Singer Malaysia had a revenue of US$131. . . . . . . Blessington is primarily a sewing machine distributor but also sells SINGER ®-branded HCDs through 79 department stores. . . . . Ltd (“ Blessington ”) in Australia.6 million in 2012 operating from 147 direct selling depots and 576 sales agent dealers. . . 129 . . . . . In the three months ended March 31. . See “– Sub-Licensing Agreements ”. . . Thailand . . we opened a total of 29 stores and direct selling depots. . . . . 2014. and including the growth in the three months ended March 31. India. . as at March 31. . . . . Total . . . . . . 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 . 2013. . . . . . . 2013 to December 31. . 2012. Over the period from January 1. . See “ Use of Proceeds ”. . our online sales platforms are expected to generate increased revenue and mature as e-commerce gains momentum in our countries of operation. we intend to increase our retail store base by approximately 130 stores. . . . . . Bangladesh . Pakistan . . . 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. . . . . . . . . . . . 2013. . . . . some independent traders and online. . . .In addition. . . . . . . . . .

Pakistan. Thailand and that of our licensee in Malaysia. India.Geographical Distribution The following map shows our distribution networks in Sri Lanka. as at March 31. Bangladesh. 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 130 . 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: 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 131 .Bangladesh The following map sets forth the geographical location of our 339 stores and 310 dealers in Bangladesh 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.India The following map sets forth the geographical location of our 34 stores and 864 dealers in India 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 132 .

. . .4% 88. 2013: Number of Singer Plus stores Sri Lanka . . . 2013. . . . . and are open six days a week. . . . . . . . . . . . . with a total of 831 stores in Sri Lanka. . . . . .4% 88. . . . . . . . . . . . . 381 338 160 30 909 80. . . . . . . . . .0% of our product sales in 2012. Most of our stores have their own storage area to ensure that the most popular products are readily available. . . . . . . . with our largest store located in Sri Lanka being 1. . .m. . . . . . . Bangladesh Pakistan . .9 74. . . . . . Bangladesh Pakistan .S. . . . . . . . we had 909 retail stores. Each of our stores is operated using the Singer Information System. . . . . . . . . . . . The following table shows the number of Singer Plus stores in our countries of operation as at March 31. . . . . especially in rural areas. . . . . . .3% 61.We distribute and deliver our merchandise to our Singer outlets mainly through arrangements with a network of independent carriers in each country. . . . . . . . Store Formats We currently have four different store formats to cater to different customer needs and locations: Singer Plus. . . . 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. . . Each of our store managers is responsible for product deliveries to customers. . . . . . . . . . . . . . . . .7 44.8% 9. . . Sisil World and Singer Homes. . . . . . . . . . and 8:30 p. . . . Bangladesh. . . . . . . Our average store size is 91 square meters of selling area. We intend to increase the number of Singer Plus stores. . . . .074 Number of stores Average store size (in sq.115 square meters. . . . of retail space (U. . . . . .m. . Our stores are distinguished by their target market. . . . . .088 2. . . . . . . . product range and merchandising. . 133 . . . . . . . . . . . . India . . . . . Pakistan and India. . Retail Network As at December 31. . . . . . . . . . . . . . . . . . . . . which contributed 61. .1 90. 2012.614 3. . .m. . 1 2 Source: The Nielsen Company. . . . . Percentage relates to our Group’s total sales including Thailand. . . . . . . meters) 128. . . .m. • Singer Plus is the main retail store format with an average store size of 77 sq. . . . . . . . . . . . . . Singer Mega.152 3. . . . . as at March 31.6 Sri Lanka . . . . . . . . . . . .891 3. . Singer Plus stores offer a wide range of HCDs. . . except for nationally recognized holidays. . . . . . . . . . . . . . . . including house brands and third-party brands.m. . . They generally open at around 10:00 a. . . . . India . . . and close between 6:00 p. . . Bangladesh and Pakistan by total revenue value. . . . .2 32. . . . . . . . . dollars) 3. . . . . . .0% 2 Total . . We are the largest HCD retailer in Sri Lanka. . . . . 308 331 158 34 831 Total . . . . .

we rolled out a new store design and store fittings as part of our six-year store revamp initiative with a brighter. New dealers are only appointed following a thorough investigation for volume potential. In 2011 and 2012. It also serves to extend the reach of SINGER ® products and other brands to new areas pending the opening of a retail store. We expect to introduce this retail format in Bangladesh and Pakistan in 2013. We had 15 Singer Mega stores in Sri Lanka and eight Singer Mega stores in Bangladesh as at March 31. Wholesale Network As at March 31.m. In 2011 and 2012. and we expect to renovate or relocate approximately 220 additional stores in 2013 and 2014. relocating and modernizing existing stores. we opened 112 stores. which is a Sri Lankan heritage refrigerator brand. and we plan to open approximately 130 additional stores in the next two years including the introduction of Singer Homes in Bangladesh and Pakistan. dining room suites. 2013. and some also further distribute Singer products to other dealers. offering a wider range of HCDs and furniture. there is significant potential to further expand this channel in Bangladesh and Thailand. we renovated or relocated 187 stores. larger store format with an average store size of 443 sq. We had 15 Singer Homes stores in Sri Lanka as at March 31. as at March 31. In 2011 and 2012. we closed 15 unprofitable stores. In India. The products sold to dealers are backed by the same warranty and service. creditworthiness. Sisil World. is known as “The Cooling Specialist”.• Singer Mega is a flagship. • • We are focused on investing in and improving our distribution network. This approach seeks to avoid unnecessary competition between retail and wholesale selling channels as the products available through both channels are generally the same. the majority also sell products purchased from other sources. While the wholesale businesses in Sri Lanka and Pakistan are well developed. upgrading. enlarging. In 2011. The discount is set to offer sufficient incentive for the dealer to drive sales while preventing significant price competition with our retail stores. offering a variety of high quality. Credit is strictly controlled and new product delivery is put on hold for any dealers in arrears. cash discounts are offered or a “cash on delivery only” policy is enforced. Sisil World stores offer a unique product and brand mix mostly under the Sisil brand.558 independent dealers including 700 in Sri Lanka. The extent of the dealer network penetration varies from country to country. Credit terms offered to dealers range from 15 to 120 days. business background and reputation. as well as quality commitment as those sold via our retail network.m. In addition to expanding our footprint. with 53 stores in Sri Lanka and an average store size of 91 sq. primarily located in more affluent areas. home and office accessories and pantry furniture. bedroom suites. Independent dealers are usually appointed in locations that are a distance away from the nearest retail store. In certain cases. the wholesale network focuses on sewing products and represents our principal channel for sewing machine distribution. Singer Homes’ product offerings include sofas. wardrobes.m. 2013. Most dealers only have a single store. more modern appearance.. 134 . our wholesale network consisted of 2. As these dealers are independent businesses. 2013. This channel focuses on home appliances. Products are sold to dealers at a discount to the retail price.. 310 in Bangladesh. Singer Homes are furniture showrooms with an average store size of 339 sq. modern and traditional furniture and home accessories. 864 in India. 2013. 231 in Pakistan and 453 in Thailand. while also carrying a differentiated range of small appliances and consumer electronics. we are continuously improving our retail network by renovating.

In most cases. Online Sales We have an online sales channel in Sri Lanka at www. This market is also served by direct selling canvassers. also operates direct selling operations in Malaysia. freezers. Prior to delivery. selling and collection bonuses are paid to the best performers. a third party licensee. 2013. During these visits. Groups of canvassers are further organized into smaller teams headed by a unit manager. In particular. holidays and awards are provided to dealers who achieve their assigned targets. A new market consisting of small businesses and entrepreneurs (usually grocery stores. Selling commissions range from 4. The canvassers’ and field staff’s compensation is based substantially on commissions. The online distribution market for HCDs in our countries of operation is growing and we believe that with our existing infrastructure. 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. Singer Malaysia. Customers can also visit depots to effect payments and purchase products. Direct Sales We operate direct selling operations in Thailand. arrange secure payments online and have their purchases delivered to their homes.724 canvassers who served as the primary channel for door-to-door sales and collection. conferences.1% of the cash price. 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.net. Following a successful sale. In general. A depot serves as a mini-warehouse. hotels and schools) has been identified for commercial products such as beverage coolers. we are well positioned to meet higher online demand from our customers as they increasingly access the Internet and shop online. the selling canvasser and Credit Checking Officer (CCO) are responsible for determining and assessing the creditworthiness of customers and for related collections. Online sales currently represent less than one percent of product sales. These canvassers operate from 211 direct selling depots located throughout Thailand. which serve as mini-warehouses. petrol vending machines and other commercial appliances used by these businesses. but substantially all of the sales and payments are done at the customers’ homes. which set annual performance targets. dealers are managed by the wholesale departments. operating procedures. Our presence in the online market is relatively new given the low level of Internet penetration in our countries of operations. As at March 31. credit limits and payment terms and also provide the dealers with training in areas such as product knowledge. Customers can select their desired products. Singer Thailand had 2. the product is delivered at sale. products are stored in depots. There is no difference between direct selling depots and retail stores in terms of accounting and risk.com and in India at www.singerindia. 135 . merchandizing display and after-sales service. a display area for Singer products and a meeting point for the canvassing teams headed by a branch manager.singersl. In direct selling. restaurants.3% to 11. Singer Thailand plans to increase its product offerings for this market. Incentives such as discounts. mobile phone airtime vending machines. the same canvasser visits the customer monthly to collect the installment payment. while collecting commissions range from 7% to 9% of collections. Bangladeshi and Pakistani workers in various parts of the world. In addition. sales are made at the customer’s home during canvasser visits.Once appointed. the canvasser seeks to sell other products to the customer. given the considerable number of Sri Lankan.

software. Blessington is granted an exclusive and non-transferrable license to use the Singer trademark in Australia. Singer Malaysia. by either party without the consent of the other party. The licensing agreement is automatically renewed for five-year periods in perpetuity. distribution channel and country. 2012. 2013. This agreement expires on December 31. as at March 31. We tailor the mix of the products we offer based on the specific preferences and requirements of the targeted customer segment by location. The licensing agreement is not assignable or transferrable in whole. Tahiti and Tonga in relation to certain products not to include sewing machines and spare parts. operated a total of 147 direct selling Singer branches and had 576 sales agents. primarily distributes Singer products through 79 department stores. 2016. 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. Sewing machines. Consumer electronics. in exchange for a royalty based on revenue. Products We offer a wide range of HCDs either as house brands or under distribution agreements with third-party brand owners.Sub-Licensing Agreements Two third-party companies. and Other products. Fiji. one in Malaysia and one in Australia. semiconductor chips. but can be terminated by either party following a material breach of the agreement by the other party and failure to cure the breach. such as gambling and lottery operations which may have an adverse effect on the reputation of the trademarks. or in part. Furniture. 136 . topographies. 2010. independent traders and online on its website. Product Range We distribute a broad range of HCDs classified into six broad categories: • • • • • • Home appliances. We entered into a sub-licensing agreement with Blessington on September 15. IT products. Solomon Islands. the sub-licensee in Malaysia. in exchange for a royalty based on sales of these products with an annual minimum fee. the sub-licensee in Australia. Blessington may not sublicense the trademark to any person without our prior written consent. currently hold sub-licensing rights to the Singer trademark as described below. Blessington. Vanuatu. accessories and related goods and services and goods or services. New Zealand. Papua New Guinea. New Caledonia. The licence agreement was entered into by a predecessor company in December 2002 and assigned to us in July 2003. needles for sewing machines and related products. and ironing presses. as at December 31.

Onida. dining room and bedroom sets. mixers. Furniture Our furniture products include living room. tablets. keyboards and printers). artisan and industrial models. Haier. Samsung and Sony.7% Home Appliances 46. Unic. Microsoft. mattresses. headboards. water purifiers and small appliances such as rice cookers. DVD players. Skyworth. Dell. The key brands we carry are SINGER ®. pantry furniture and office furniture. smart phones and accessories. chairs. The key brands we carry are SINGER ®. dressers. Samsung. Consumer electronics Our consumer electronics products include televisions.7% IT Products 5. we offer.8% Furniture 2. accessories (including monitors.The chart below sets forth our product mix for the sale of goods as at March 31. HTC. camcorders and accessories. and mobile products including mobile phones. Apple. sofas. In the large appliances category. Samsung. Haier. we carry brands such as SINGER ®. Beko. wardrobes.3% Sewing Machines 15.8% Home appliances We offer home appliances such as refrigerators. Prestige and Tefal products. Philips. Videocon and Whirlpool. Dawlance. Godrej. Asus. In the small appliances category.7% Others 12. SINGER ®. Huawei. such as digital cameras. Hitachi. 2013: Consumer Electronics 16. TCL and Videocon. tea kettles and irons. Moulinex. air conditioners. Sisil. grinders. among others. IT products We offer IT products including computers (both desktops and laptops). The majority of the furniture we offer is branded SINGER HOMES ®. Hitachi. book cases. freezers. Lenovo. air coolers. zig zag. juicers. Krups. photography products. tables. 137 . Grundig. audio equipment. 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. washing machines. Blu-ray players and home theater systems.

.3% 3. IT products . .1 170.4% 12.5% 3. .6 3.3 3. . . .4 66. .2 47.7 4.3 1. Bangladesh Home appliances. .8 3.3% 12.3% 16. . . .9 90. Consumer electronics .0% 19.9% 9.3 34. .4% 5.7 15.0 44.6% 18. . .6% 8. . . .2% 22. .9 18.7 56. . . . .5 40. . . .2 14.2 7. . .2% 3.9% 2.8% 2.7% 15.8 79.1 70.9% 11. . vending machines and agricultural equipment such as small tractors and paddy threshers. .6% 4. . . .3% 10.6% 25. . .4 6.3% 11. . .1% 8. . . .4% 9.5 2.3 51. solar water heaters.2% 100. as shown in the table below.4 15.1 14.3% 23. . .6 53. . .7 29.0% 191. .1% 6. .2 63.1% 25. . .2% 100. Sewing machines .0% 52. . . . .0 2. .9% 3.2% 5.7% 10.8% 4. .4 15.2 4. .8 2. .6% 100.9% 9.8 48. .0% 74. . .9 3.6% 6. .7 57.5% 12. . . . . .2% 6.1 43. . 2012 US$ million 2013 US$ million % % % % % 138 .0 14.0% 16. .6% 4. .2% 100.2 174. .6 44.8 12.3 14.6 60.2 95. . . For the year ended December 31. .1 15.3% 15. .2 70. .9 7.9 10. .4% 14.4 2. . . .0% 44.5% 4. .7% 100.9 378.7 40.3% 2.4 3. . . . . . .6% 19.3 46.2 8. Sewing machines . .5 2. Furniture .8 5. . Furniture . Consumer electronics .2% 18. .6 17. .9 0. .7 49.5% 6. .0 50.2 41. .0% 12.0% 139. . fitness equipment. .5% 14.8% 100.6 357. . .9% 100. . .1% 5.6 9. . . Total . .0 8. . . . IT products . .2% 28.8 3. .3 42.9 5. .4% 16.3% 9.0% 70. .2 49. .7 2.0% 17. .0% 43.8 1.7% 12. . .8 9. Other products . .2% 3.2% 6.9 71.3% 100.2% 2.0% 51. .3% 5.6 9.Other products Other products we sell and distribute include water pumps. .0% 169. .1% 2.2 285. . .0% 8. Product Mix Home appliances have consistently formed the largest component of sales of goods in our countries of operations.0 36. . . . .7% 100. . .8 2.9% 100.9 13.6 13.8 16.6 1.7 9. Sri Lanka Home appliances. . . Other products .5 0.2% 100. . generators. .7% 9.2% 100. . . . .5% 3.6% 24.7 16.5% 100. . . .8 2. Total .7% 5. .0% 7.6 41.3 11.4 12. 40.1 124. . Consumer electronics .6 15. .0% 2011 US$ million 2012 US$ million For the three months ended March 31.6% 14. . .2% 100. .8% 18.7% 23.8 2.6 44.0% 6.9 49. .6% 4.6 16. .0 0. Sewing machines .4% 2.0% 4. .3% 3.1 40.0% 10.0 12. .2 9.2% 21.8 6. Total . IT products .4% 100.5 8. motorcycles and bicycles. . .6% 9.2% 10. .9% 22. Other products .6 2. .7 0.0% 44. . 2010 US$ million Group Home appliances. . .4 66.

. . . .For the year ended December 31.0% 10. .5 66. .9% 11.7 96. . Thailand Home appliances.6% 100.2% 6. . India Sewing machines . . .0% 35.4 29.0 76.7 7. . .5 0.0% 14.6% 100.3 14. .2 2. 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. . .1 23. .5 0.5 99. 7. . .1 8.7 2. .8% 100. . . . Other products . . .4 71.3 7.3 1.9% SINGER ® and other house-brand sewing machines. . Home appliances.8 93. 2012 US$ million 2013 US$ million % % % % % 4.2 0.5% 100. . respectively.8% third-party products.4 60. . .0% Our best selling products are refrigerators and televisions.6% SINGER ® Homes furniture. . . . .5 58. . Consumer electronics .4% 6.5% 1. Product mix by product categories and brand in 2012 comprised 63. .2 4. .2 0.3 1.5 2. .8 0.4% 11.0% 3. .1% 7. 2010 US$ million Pakistan Home appliances.7 1. 30. . . . .9% 100.9 11. .1 99. .3% 100.6 9. .9 2. . . . Sewing machines .0% 12. . .0% 11.4% 3.4 33.7 76.0 62. .7% other SINGER ® house-brand products and 11. We have a significant market share across many HCD products categories.4% 100.7 0.9% 3. .0% 2011 US$ million 2012 US$ million For the three months ended March 31.0% 100.0% 24.5 6.0% 19. . .0 3.7% 0.7% 10. .1 24.1% 9.0% 23. .7% 22.5 2.0% 17.1 98. .9% 10. . .3% 4. 14.9 76.2% 100. . . Brands We offer customers house-branded products and third-party brands. . .1% 3. .9 76. .5% and 14. .5% 10.0% 9.5 0.6% 100.9 75.0% 24. 2. .0% 28.7 0. .6% 7.2 1.9 18. Total . . Consumer electronics .4 0. .9% 100. . . .5 60.0% 17.2 6. Total . Other products .7% 3.0% SINGER ® brand appliances and electronics.0% 32. Sewing machines . .7 2. Total .6 2.7 2.2% 100.0% 1.6 0. .5 3. .0% 100.5% of 2012 sales.6% 4.7 0.0 2.0% 28.6 22. 139 .6 48.0 0.9 63. .0% 8. . . . comprising domestic and international brands.0% 2.6% 10. .0 0. . . .9% 20.9% 2.6% 8. . . .9 0. . .7 16.3% 100.1 23. representing 24.9% 3.9% 9. .0% 45. . .0% 100.8 24. .5% 9.0% 4.7% 8.

.8% 100.3% 8. . .4% 8.3% % 59.0% 15. Hitachi. We require third-party brand suppliers to comply with our standard purchase terms and conditions. . 2010 US$ million SINGER® appliances and electronics . .7% 100.2% 178. Videocon and Whirlpool. 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. . . SINGER HOMES furniture . .8 378.7 52.8 16. such as whether the brands are well established.0 14.0% 56. OEM products are sourced on a completely built-up.7% 10. TCL. . . . .4% 2.7 15. Third-party brands We also sell a number of third-party brands. ® ® Three months ended March 31. . 2010. Samsung. We believe that customers associate these house brands with trust. . respectively. .0 % 63.2 44.The table below sets forth our sales by brand mix as at December 31. . .6 30. .6 9. while the Sisil and Unic brands are used exclusively in Sri Lanka. . .4% 100. .0% House-branded products We have four house brands: SINGER ®.6% 11. the products are reliable in terms of quality. Sisil and Unic. . Third-party-branded products . Prestige. Merritt. 2011 and 2012 and for the three months ended March 31. . .1 % 62.0% 53. The majority of our house-branded products. . Skyworth. Haier.6% 7. 2012 2012 US$ million 47.3 9. ranging from refrigerators to sewing machines. We believe that the variety of brands we offer enhances our image as a retailer and offers customers greater choice. .2 14. .7 357. primarily for refrigerators and televisions. . 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. . .7 29. . we consider numerous factors. 140 . . Dawlance.8% 14. .9 18. Grundig. including Apple. . Philips. sales target and payment days are approved by management at the country level. .0 6. Beko.6% 14. . Godrej. quality and the ability to purchase using consumer finance.4% 19. efficient in replenishment and whether the products they offer match customer preferences. Huawei. Every new OEM supplier must be approved by our CEO.2 12. are branded SINGER ®. In selecting third-party brands. . .8 2.6% 13. Terms and conditions such as margin. Total .6 24.5 13.0% 14.3% 2. .7% 11.7 2011 US$ million 212. some of which are subject to exclusive distribution arrangements.1 8.5 285. .7% 2.8% 100.5 90.1 95. . semi-knocked down or completely knocked-down basis. .5% % 52. SINGER and Merritt brand sewing machines. Other house-branded products .9% 2. .9% 2. Our alternative sewing machine brand is Merritt.4% US$ million 238. Onida.8 2013 US$ million 49. Tefal.3 15.6 32. Third-party brands help us broaden the range of merchandise offered to customers in our stores. .0 44.0% 100.0 2. . Year ended December 31.0% % 52. . We actively monitor the performance of our third-party brand suppliers by assessing the sales of the respective products. We only consider the manufacture or assembly of products where there are local efficiencies or tax or duty incentives.

a total of 1. we manufacture refrigerators. sewing machines. As at March 31. In Bangladesh. and microwaves. 50. The price of the products with consumer finance includes a finance charge that ranges between 0. the type of product and whether we are promoting the sale of the particular product or model.8% of sales were of products which we manufactured or assembled. Our manufacturing or assembly operations are relatively simple and easily scalable. washing machines. In Sri Lanka. 23. 2013. We have not included factory utilization rate for our factories because it is not a meaningful indicator of performance. In Sri Lanka. however. Hire purchase also allows us the opportunity to realize higher gross margins on the sale of our products. Our marketing departments continually monitor market prices and trends and appropriate adjustments to our prices and promotions are implemented as necessary. except for one in Sri Lanka.1% of our sales were on company-provided credit.114 of our employees were directly involved in the manufacturing and assembly operations. the down payment. We own all of these factory sites. four in Sri Lanka and one in each of Bangladesh. we assemble televisions and air conditioners. In Pakistan. namely Regnis (Lanka) PLC. which represents 13% of our total staff (including all staff working in our retail stores) of 8. and Singer Industries (Ceylon) PLC. In India. Regnis Appliances (Pvt) Ltd. depending on a number of factors. In 2012.537 persons as at March 31. This consumer finance business continues in our subsidiaries today and is a key driver in facilitating sales by increasing the affordability of our products. some of the manufacturing and assembly operations are conducted by other subsidiaries. gas appliances. 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. There is also a pool of readily available third party vendors to whom we can outsource some of our manufacturing and assembly operations. thereby providing them with a product they desired and needed. air conditioners. We do not currently manufacture or assemble products in Thailand. which engage exclusively in manufacturing and assembly operations. washing machines. domestic and agricultural water pumps and paddy threshers and assemble sewing machines. the customer’s credit history. a sewing machine represented a significant step upwards in convenience and productivity for the customer. We can increase our capacity by adding another shift and extending our factories’ operating hours. Consumer Finance Beginning in 1856. 2013. The installment payment plan enabled customers to purchase what they otherwise could not immediately afford. 141 . furniture.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. we manufacture refrigerators and assemble televisions. the repayment period. which we lease.0% per annum of the amount financed. we manufacture sewing machines. it was also an expensive product. air conditioners and motorcycles. At that time. and have recently commenced manufacturing furniture. Our main operating subsidiaries in each country conduct our manufacturing and assembly operations.0% to 60. the Singer Manufacturing Company pioneered the use of installment payment plans to enable customers to afford and immediately purchase a sewing machine. We operate seven factories. Pakistan and India. 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. including local market interest rates.

. . . . . . . . . . consumer savings accounts. .7 30.8 29.9 11. . The following table sets forth the accounts receivable outstanding by account size as at March 31. loans from Singer (Sri Lanka) PLC and the proceeds from the offering of shares on the CSE and subsequent rights issue. . . . . . . . . . Singer Finance’s credit granting activities are funded by a broad array (in terms of type and tenor of maturities) of consumer deposits. . . . . . . . . . .809 145. . .00% 265.4% of Singer Finance (Lanka) PLC. . . 2013. . . Number of accounts % 39. . . .8 206. .4% 2.3% 5. .104 16. . . . .895 Size of individual accounts US$ < 100 . . . . . . 251 – 550 . .7% of our total revenue in 2010. . . . Singer Finance operated 13 stand-alone branches and five service centers within Singer retail stores and had a total staff complement of 200. 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. . . . . 2012 and for the three months ended March 31. . . . . . . 1. . .6% 34. . . . . . .6% 21.243 23. . . . . . . . . . . . . were US$218. . . Installment accounts receivable US$ million 10.000 . . . . . 2013.000 . . . . . . . . . . . . . . 2012 US$ million Sri Lanka .9 % 52. . . . . .5% 0. . (“ Singer Finance ”). . . 851 – 1. . . Total accounts receivable as at March 31.3 47. .Our subsidiary. . . owns 80.008 187. 100 – 250 . . December 31.5 25. . . . . . . . . .9% and 12. .8 22. Following the successful development of the business. . . . . . . . . . . . 2013. . . . . . .300 . . 2013 US$ million 111. . .1% 7. . 551 – 850 . . . . .9% 3. . to comply with government requirements. .7%. . . . . . . . .6% 5. . . . .8% 13. .5 % 4. . . . . . .3% 100. . Total . . . .7% 100. . . . . . . . As at March 31. . . . .8 51. . . . 2013. . . . . .112 40. . .0% Accounts receivable. . . . .2% 21. . 2011. . .1% 23. . . . . 11. . . .5 % 51. bank loans from local banks. 10. respectively. . . Total .7% 100. . . . . . . . Thailand . .7 15.4 84. . . . .00% The following table sets forth by country our installment accounts receivable. . . . . . . . .9% 14. .8 11. > 10. . . .0% 27. . .6% 100. additional forms of consumer financing and financing of other kinds of capital goods. . . Singer (Sri Lanka) PLC. . Finance revenue accounted for 10. .1% 5. .6% 11. . . . . . .2% 38. . . .822 679. a stand-alone leasing and consumer finance business listed on the Colombo Stock Exchange (“ CSE ”). . . Accounts receivable. .797 1. . 107. .895 active customer accounts. . . . . . . .6 10. . . . . we had 679. .0% 5. . . Bangladesh .6 218. . . 2013.6 71. . . . .0% Country 142 . . . . Pakistan . . . .8% 10. . . . As at March 31. . . .6 218. . March 31. . . .5 million. . . . .301 – 10. . .9%. . we listed Singer Finance on the CSE in January 2011. . .

. . Mobile phone reloads “Flexi Load”. . . . . . 2012 and US$37. . . with the broadest spectrum of products being offered in Sri Lanka. . . . . . . . 143 . . . or plan to commence during 2013. . . . . . . . in each of our countries of operations: Sri Lanka Bangladesh Consumer Credit Products Hire purchase . . . .3 million as at March 31. . . Leasing was introduced to Sri Lanka in the 1980s and has gained acceptance as an alternative to loan financing. Zero interest and low interest credit are offered as promotions. . . . Consumer protection plan . . . depending on the credit promotion. The lease receivable portfolio accounts for 54. . . . . . . . 2013. . 2013. .6 million. including introducing Singer credit cards. . . Singer Finance provides leasing for new commercial and passenger vehicles. . . . . . . . . . product purchased and customer choice. and Interest rates: 0. . Remittances . . . . Financial Services Extended warranty . . . . . . . . Group sales . . . . . . . .6% of the total receivable portfolio of Singer Finance as at March 31. . . . . . . . . . . . . . . . The following table sets forth consumer credit products and financial services we currently provide. . . Utilities payment “Bill Pay” . Period: between two and 36 months based on the creditworthiness of the customer. . . primarily through Singer Finance. . . .0% to 60. . . . . . . . Branchless banking . . . . We intend to expand the credit and non-credit financial services offerings. . . of the product purchased. . . . . Singer credit cards . . . .0 million at December 31. .Consumer Credit Products and Financial Services Our range of credit and non-credit financial services offerings varies by country. . . 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. mobile wallets and virtual banking.0% per annum. . . . . . . . . which was US$68. . . . . . . . . . . . . .0%. . . . . . . . It provides an additional source of financing for both retail customers and small and medium enterprises. . . . . .0% to 40. . . . . . . . The lease receivable portfolio of Singer Finance was US$36. Leasing. . • • Leasing We offer leasing in Sri Lanka only.

Other Financial Service Transactions Starting in Sri Lanka. we processed more than 200. disbursement of remittances from overseas and within the country and the sale of mobile phone airtime. we have a back-to-back warranty insurance from a third party. Consumer Protection Plans We offer consumer protection plans providing protection against product loss or damage due to fire. Installment payments are generally facilitated by deductions from the employees’ monthly remuneration leading to strong collection performance. In 2012.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. and now including Bangladesh and Pakistan. These include bill collection on behalf of utility companies and financial institutions. on average. we have significantly broadened the scope of the financial products and services we offer to customers. 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. withdrawals and transfers using a biometric system developed in conjunction with a leading local bank (branchless banking). More recently in Bangladesh. we have begun to offer customers the opportunity to open bank accounts and make deposits.000 other financial services transactions per month. 144 . thereby transferring the risk to that third party while retaining a significant portion of the warranty income. 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 conduct a welcome call. Promise-To-Pay System Customer's payment commitments are recorded and followedup on promised dates. Credit Bureau (Sri Lanka & Thailand) Based on certain criteria. we perform credit checks against the local credit bureaus on a selective basis. Credit Department/ Call Center Arrears Follow up Follow up calls through call centers or Credit Department for customers in arrears. reject the customer’s credit application. branch managers take responsibility for uncollectible accounts by settling these with their security deposit. Delinquency Letter Send out notification letters to delinquent customers. 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. In Sri Lanka and Thailand. among others. proof of address and income. Point Scoring Evaluate customer credit risk based on point scoring model. We conduct credit reviews and may. photo and. Credit Application. depending on our assessment of the potential customer’s creditworthiness. and we inform the customer of the payment obligations and steps to be taken to ensure compliance with all related obligations. monitoring the credit portfolio and collecting installment payments. the customer will execute a credit agreement. when applicable. Scoring criteria includes capacity to pay. Reject any credit application on blacklist. Background Checks and Physical Visits Conduct background checks for new customers through physical visit of customer residence and/or interview with neighbours . The diagram below sets forth the steps our consumer finance team usually takes when approving a credit application. We may also conduct background checks and physical visits to the customer’s premises. Once the application is approved. We evaluate a number of criteria for each customer resulting in a score that permits us to rate the customer’s creditworthiness. residency and guarantors. Legal Recourse/ Security Deposit Offset Legal actions are taken against customers who are in serious credit default. Photos and Identification Card Potential customer completes the credit application form. Once the veracity of all information provided by the customer is authenticated and we approve the credit application. In addition. rely primarily on our step-by-step approach to managing the credit process (the “ Credit Life Cycle ”). Repossession Accounts that have no payment for 4+ months or in arrears for 9+ months are required to be repossessed. 145 . In certain cases. Reject credit application based on delinquency criteria. Calls done by Call Centers using customer telephone numbers in the system. which serves as an additional verification. Multiple Payment Points Provide various channels to customers for credit payments. Monitoring and Collections Our credit culture and credit system throughout the organization. Execute Credit Agreement and Welcome Call Verify authenticity and accuracy of customer account information through Welcome Call. when available. Obtain copy of identification card.Credit Approval Process. Approval Process Monitoring Collections Customer Potential customer requests to purchase a product on credit. Account Checker/ Internal Audit Regular internal checking and audits of outstanding accounts. check credit bureau for customer records. we require the execution of a guarantee by a third party. proof of income and address. which is also an integral part of the Singer Financial Manual or SFM (as defined below). stability of income source. from headquarters to individual branches. Monthly Perf ormance Assessment: – Credit Dashboards – Balanced Scorecards – VIP Clubs Credit performance & profitability is assessed each month through the credit dashboards and balanced scorecards. Blacklist Check potential customer against blacklist.

credit management reports and balance scorecards. we retain a portion of commissions paid to each branch manager as a security deposit. net receivables and arrears as a percentage of gross receivables.0% Arrears % .0% 3. The credit approval and granting process is similar across our countries of operation.Monitoring We assess the credit performance of each branch and the profitability of the consumer finance business each month through our credit dashboards.0% Number of Accounts – Thousands 700 94. Our store managers rely on our centralized credit risk monitoring and management system.0% 4. In this system.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% 6. 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. 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. Our monitoring policies have resulted in significant improvements in our arrears percentage.0% Total Number of Accounts Paying percentage 146 Paying % 500 90.0% 400 88. by which we set guidelines and authorizations at the operating level to ensure a well-managed credit portfolio and first-rate collection experience. the branch managers take responsibility for uncollectible accounts that they create.0% 5. In certain circumstances. each store manager acts as our credit granting and collection agent. and as such. The chart below sets forth our historical installment receivable portfolio including our gross receivables.0% 2.0% 600 92.

. Arrears 61 to 120 days Arrears 121 and over Arrears 1 to 60 days Total Arrears Gross Receivables 212.9% 1.4 1. . As a % of gross receivables .Paying accounts consist of accounts that paid at least one full installment during the month. We operate a promise-to-pay system that tracks the commitments customers offer when they fall into arrears. . .6 218. which we determine based on applicable interest rates and account for as other income. As at March 31.5 Amounts in Arrears US$ million 2. . We provide various payment channels for our credit customers including payments at our Singer retail stores.2% 3.7% 6. 111.9 11. Bangladesh . . The table below sets out certain information relating to our customers’ accounts as at March 31. . .5 147 . . .1% 8.7% 4.9 14. .7% 13. .3% 7.3% 1. 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. For purposes of this presentation.8 0. . Arrears as a % of gross receivables Advances as a % of gross receivables Gross Receivables US$ million Sri Lanka . customers are encouraged to pay in advance. . . We are entitled to charge a penalty to customers whose payments are in arrears.6 0. . . The paying percentage is determined by dividing the outstanding number of paying accounts at month end by the total number of accounts. . . . Pakistan . The collection of credit payments is monitored closely and accounts in arrears are actively followed up by our store staff. .0 5.5 3.7% 218. 2013.1 0. . .8 The table below sets out the ageing of the amounts in arrears in respect of our customers’ accounts as at March 31. .3 1. We may also take legal action against the customer. . If customers fail to make their payments on time. 2013.0% 6. 46. .3% of customers had made installment payments in advance. These penalty charges vary by country but are charged. . Current/ not yet due Gross Receivables Ageing US$ million . . Thailand . 2013.2% 2.4 1. . we will follow up with calls and delinquency letters to notify the customer of late payments and to ensure customers process the required payments. . .6% 4.6 5.7% 2.8% 5. .1% 5. . . hire purchase vehicles and group sales segments.8 Amounts in Advance US$ million Net advances US$ million 1. . the paying percentage does not include the accounts of Singer Finance for its leasing. when applied. . equally to all customers in each respective country in which we operate.8 0. .8 2.7 97.2 8.7 5.6 0.3 0.6 10. 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.5 2. . Collections During the lifetime of an installment plan. .4 84. Total .

This helps ensure an accurate assessment of each store’s performance. The variable commission and bonus payments comprise up to 5. is adopted towards store managers and branch staff that fail to comply with their obligations. “ Territory Managers ”).5% in our direct selling business. (iv) store managers and (v) store employees and canvassers. a portion of commissions from the store managers are withheld each month as a security deposit. (iii) area managers and district managers (collectively. Sales. Since this income group typically does not have access to bank loans. and monitoring competitor strategies and store profitability. ensuring there are adequate sales staff. including termination and where appropriate civil and criminal prosecution. our credit products enable a wider base of potential customers to purchase products. 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. 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. In instances where the assets are impaired or incomplete. 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.4% of our revenue in our retail business and 16. verifying cash. in Sri Lanka. Territory Managers are responsible for the performance of stores in their designated territory and are expected to be active managers. Store managers are normally selected from the pool of promising and talented store staff within the operating countries. briefing sales staff on new products and promotions. the other branch staff are not. except in Pakistan. Store managers receive a small basic salary complemented by variable commissions for sales and collections. 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. attending morning meetings. the store manager is also paid a bonus. While the store managers in each country are employees of the local operating companies. Bangladesh and India. A zero tolerance approach. monitoring and managing complaints. the store manager is paid the security deposit subject to a complete review and handover of all assets held at the branch. credit cards or other forms of credit. if stipulated targets for sales or collections are achieved. 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. 148 . checking merchandising. Territory Managers are accountable for reviewing sales and collections. In Sri Lanka. In order to safeguard our assets. training and coaching sales staff. Upon retirement. for the Singer Mega and some Singer Homes stores. inventory. the shortfall is deducted from the security deposit. (ii) national sales managers. resignation or termination. Thailand and. receivables and other records. In addition. Lower income earners represent a large part of the total population in the countries where we operate.to lower-income groups located in rural areas.Customers We serve customers from all income groups including middle.

sports sponsorship. 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.ar. as well as additional incentives offered to branch staff. Internet advertising. Store managers and staff undergo training as part of The Singer Retail Academy. such as print. promote customer loyalty and ensure the timely collection of customer installments. the ultimate owner of the Trademark. direct mail marketing. In 2012.133 sales outlets and our 33 specialized service centers and 871 franchise service agents. in connection with its sales and promotional activities. 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.0% comprised promotions. quality and affordability (due to our consumer finance offerings). 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.0% of which comprised advertising and 64. and SVP Holdings are third parties and not related to Singer Asia. offer advice on Singer and third-party products and provide free service and repairs. To this end. which is the owner of the SINGER ® trademark (the “ Trademark ”). In 2012. Singer License Agreement Singer Asia has an exclusive perpetual license agreement (the “ Singer License Agreement ”) with The Singer Company Limited S. is essential to ensure sales employees can properly explain the features of one product versus another. or which it sources from third parties (with certain exceptions for sewing products and ironing presses. 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. All products are supported by a widespread service network including service at our 1. scratch-card discounts. We conduct regular “Product Clinics” in select outlets on a rotational basis. customer satisfaction surveys and other customer communication materials. Bangladesh. and below-the-line advertising. Marketing We use various techniques to advertise and promote our brands and products. TV and radio ads. Under the Singer License Agreement.000 inbound calls. Product knowledge training.. whereby experienced service agents answer customer queries. leaflets and in-store point-of-sale materials. improve operational efficiency.l. we made approximately 572. The Singer Company Limited S.ar. We operate call centers in Sri Lanka. on its stores and depots. Promotions include free gifts and lucky draws. is a wholly-owned indirect subsidiary of SVP Holdings.l. we spent 3. These positive. 36. and on existing and new products and services that Singer Asia manufactures. big prize lucky draws.Customer and After-Sales Service We believe that the primary objectives of customer service are to enhance customer satisfaction. See “– Staff Training ”. assembles or provides.000 outbound calls and received approximately 191. Advertising includes both above-the-line advertising. emotional tie-ins result from our long-term presence in the region and commitment to improving the local community and people’s everyday lives.6% of revenue on marketing. We believe customers associate the SINGER ® brand with trust. Both The Singer Company Limited S. such as catalogues. SMS promotions. Pakistan and Thailand. in particular. These include seasonal and ad hoc promotions. credit incentives such as low down payment or low interest. loyalty programs.ar.l. as described 149 .

Singer Asia is nationalized by the government. 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. become insolvent. Pakistan. in connection with sales and promotional activities and on products and services. Nepal. Sri Lanka. Sewing Products Distribution Agreement Singer Asia has an exclusive perpetual distribution agreement (the “ Singer Distribution Agreement ”) with Singer Sourcing Ltd.below). Indonesia. purchase sewing machines from third parties. not in their company names.l. Singer Asia may also sub-license other parties. other than subsidiaries. As we enter new markets in the territory. Myanmar. India. As consideration for the foregoing license. 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. Singer Asia assigns its assets for the benefit of creditors or is unable to meet its debts. the Philippines. a competitor who manufactures or whose principal business is the sourcing or distribution of consumer. Bangladesh.0% of consolidated revenue of Singer Asia. a competitor of SVP Holdings (that is. the agreement may also be extended to these additional markets if SVP has not already appointed. US$3.4 million was paid in 2010. the agreement may be terminated if either Singer Asia or Singer Sourcing Ltd. 2011 and 2012. a wholly-owned indirect subsidiary of SVP Holdings. affiliates and third-party companies to use the Trademark in the territory on their sales outlets. Singer Asia pays a royalty in an amount equal to 1. Thailand. Sewing products are not included under the Singer License Agreement as described above.. insolvency. Bhutan. a competitor who manufactures or whose principal business is the sourcing or distribution of consumer. Maldives. for the distribution of SINGER ® brand sewing machines and related products and accessories. Cambodia. Both Singer Sourcing Ltd and SVP Holdings are third parties and not related to Singer Asia. Singer Asia becomes party to any bankruptcy. artisan and industrial sewing machines and all related sewing products and accessories) acquires a direct or indirect controlling interest in Singer Asia. Pakistan. Either Singer Asia or Singer Sourcing Ltd. respectively. liquidation or receivership proceedings. the Singer License Agreement may be terminated if Singer Asia becomes insolvent. Malaysia.6 million. China. in certain Asia-Pacific countries (namely. Sri Lanka. GAAP. Laos. The agreement includes all of our existing countries of operation. but. 150 . being Sri Lanka. India and Thailand − these are countries where our Group currently have operations in). Mongolia. Papua New Guinea. calculated according to U. Singer Asia is nationalized by the government. or a competitor of SVP Holdings (that is. as enumerated above. A royalty of US$2. Singer Asia assigns its assets for the benefit of creditors or is unable to meet its debts.S. 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.3 million and US$3. except in India for certain models. Bangladesh. artisan and industrial sewing machines and all related sewing products and accessories) acquires a direct or indirect controlling interest in Singer Asia. In addition. or is not planning to appoint another sewing machine distributor in that market. Brunei. India and Thailand. Either Singer Asia or The Singer Company Limited S. In addition. The territory comprises: Australia. Bangladesh. Singer Asia is not permitted to sell non-SINGER ® sewing products and may not. liquidation or receivership proceedings. including its subsidiaries. Under the terms of the Singer Distribution Agreement.ar. New Zealand. Singapore. and ironing presses. Singer Asia becomes party to any bankruptcy. Vietnam and the Pacific Islands (but does not include Japan and Korea). insolvency. Taiwan. Pakistan.

In certain instances. marketing designs. Our aggregate purchases from our top ten suppliers in the past three years have accounted for an average of 34. accounting for 6.2% of our purchases over this period. Malaysia.3% of our purchases. We are not critically dependent on any one supplier. We purchased this brand in April 2006 and have since extended it to include many consumer electronics products.. Ltd. The Sisil brand is a Sri Lankan heritage brand. copyright protection and domain name registrations to establish and protect our brand names and logos. ADT Online Co. TCL Overseas Marketing (Macao) Co.. The Sisil brand was purchased in December 2000. consumer electronics and IT products. and Samsung Electronics Co. our top three suppliers were TCL Overseas Marketing (Macao) Co. and Samsung Electronics Co. our top three suppliers were. India. Intellectual Property We rely on a combination of trademarks. including marketing subsidies from key suppliers.. especially cooling products. Haier Electric (Thailand) Public Company Limited. being the first to launch refrigerators in Sri Lanka. accounting for 8. accounting for 4. Limited. Ltd. our top three suppliers were TCL Overseas Marketing (Macao) Co. 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. Ltd. In 2011. and Sanyo (Thailand) Co. we enter into agreements with domestic manufacturers for the supply of certain items. Limited. Singapore. We have developed strong business relationships with several of the world’s leading manufacturers of home appliances. accounting for 3. 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. accounting for 9. 151 . Indonesia. Ltd. as well as affordable pricing to our customers. 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.0% of our purchases. including China.5% of our purchases.Other House Brands We own the Sisil and Unic brands. accounting for 3.2% of our purchases. Kelon International Inc. Except as disclosed herein. accounting for 10. such as furniture and vending machines. 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. These relationships and our significant market share in our respective countries of operation allow us to negotiate favorable terms and procure preferred partner privileges. Internet domain names and our intellectual property in works eligible for copyright. and as a store brand for 49 Sisil World retail shops. We import parts from a range of countries. service marks. Taiwan and Turkey.6% of our purchases.4% of our purchases. which we use in Sri Lanka.2% of our purchases. In 2012. accounting for 4. We seek suppliers that provide high quality materials and components at competitive prices to assure the reliability of our products.. The Sisil brand is now used in Sri Lanka on many home appliance products. Major Suppliers In 2010.6% of our purchases.6% of our purchases. Limited. accounting for 3. The Unic brand is also a Sri Lankan heritage brand and was first known for portable radios..

Supply Chain and Inventory Management Subject to certain guidelines and regulations. work-in-progress. We distinguish ourselves from our competitors with our competitive prices. therefore. For retail operations in Sri Lanka. inventory ageing. 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. are benchmarked against three and a half months cost of sales based on a forward sales projection. packaging standards. slow and fast moving items. delivery time. 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. we provide a central coordination function to ensure the best prices through group price negotiation. In respect of purchases from certain countries such as China. The majority of these are payment onsite. Bangladesh and Pakistan. Payment is conducted mostly via letter of credit. retail experience and customer service. The extent of the competition that we encounter varies by country. regardless of location. We believe that the principal bases for competition for HCDs include affordability. We generally do not operate transportation vehicles. raw materials. the individual entities in each of our countries of operations are responsible for purchasing and managing their inventory. shipping arrangements and documentation. stock-in-transit and second-hand items. The HCD retail industry in Sri Lanka is concentrated. the highest-quality through pre-production evaluation and post-production sample testing. We compete primarily with Abans and to a lesser degree with Damro. 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. sales forecasting and inventory provisions. brand awareness. Abans has the second largest number of stores (with 312) in 2012 and the second largest market share by sales value of 33. The central warehouses are normally located at the factory premises in those countries where we have factories. reflecting their higher percentage of locally sourced products. depending on factors such as the number and strength of the competitors. spare parts. We believe that the barriers to entry into the HCD retail industry in our countries of operation are relatively high.0% of the total market by sales value in 2012. including finished goods. respectively. Sri Lanka We are the leading market HCD retailer in Sri Lanka 1 with approximately 36. with the top five players accounting for approximately 85. the inventory levels and. high quality after-sales customer service and good store locations.2% market share in terms of sales value and also the largest HCD retailer by number of stores in 2012. These are updated monthly. purchase volumes. availability of credit. the scarcity of available prime store locations and high start-up costs. including stores. superior service through negotiated order quantities. brand power and product offerings. the established brand loyalty of incumbent players. regional warehouses or factories. attractive range of products. 1 Source: The Nielsen Company. This includes all inventory items. among other factors. central warehouses. Inventory dashboards and inventory management reports track the key performance indicators relating to inventory levels. Softlogic and Browns. convenience. Competition The HCD retail industry in our countries of operation is highly competitive. In addition. product quality. 152 .9%. given.

0% of market share by sales value.2% of the total market by sales value in 2012. Philips and Bajaj. as at 2012.8% market share by sales value. Of the total sewing products market we had the second largest market share.) Ltd. although we and Usha have a small number of retail stores located in major centers. There are other smaller international brands such as Brother.0% of total market sales value in 2012.7% market share in 2012. Novel and Bernina and a number of local Indian brands that generally operate on a regional basis. with 2. Source: The Nielsen Company. United Sales (Pvt. the sales and market share are growing rapidly but are still low compared to the market leaders. Like Sri Lanka. while Usha was the market leader with approximately 33. with an approximately 9. The second largest participant is Mida Assets. There are also a number of smaller.0% and 15. Our closest competitors are Walton and Butterfly Marketing. Singer Thailand is not a significant player in the retail market that accounts for the majority of HCD sales. and the introduction of new products and services.0% market share by sales value in 2012. Our closest competitor.0% of the total market by sales value in 2012. In the small appliance sector. Sewing products are largely distributed by independent dealers. Pakistan We have the largest retail network in Pakistan 2 with 160 retail stores and the largest market share with approximately 8. The HCD retail industry in Pakistan is fragmented. accounting for approximately 20.1% market share. respectively. we are the leading direct seller of HCDs with approximately 61. has 72 retail stores. Other competitors include My One and Electra. Thailand In Thailand. regional competitors. There are a number of local HCD manufacturers which distribute primarily through independent dealers.7% market share in terms of sales value and the largest HCD retailer by number of stores in 2012.0% of the total market by sales value in 2012. which are the second and third largest players with 19. India The international brands selling sewing products in India are primarily us and Usha. with the top five players accounting for only approximately 11. 153 . the HCD retail industry in Bangladesh is concentrated. which we entered in 2011.Bangladesh We are the market leading HCD retailer in Bangladesh 1 with approximately 24. with the top 5 players accounting for approximately 70. 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. 1 2 Source: The Nielsen Company.

consistently awarded to us. 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 154 .C.Awards and Accreditations The status of the SINGER ® brand in the region has been recognized by numerous awards. We believe these accolades. 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. 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. Nielsen and Sri Lanka Institute of Marketing Period 2005-2013 2005-2013 2005-2011. are a validation of our customer-centric retail philosophy and our commitment to be a responsible corporate citizen.

. . Pakistan. . rates and taxes) amounted to US$8.432 557 538 370 634 1. . . . . . . . . In 2010. Pakistan. .724 645 545 409 678 1. 2. with increased sales being recorded around religious. . . .. 2010 1. . . . . . . . . . . . ... Bangladesh Pakistan . . . . . .. by location. . . . .. . we benefit from a number of low-rent long-term leases. . . .068 7. . .4 million. . . . . . . . .. .537 Total . .602 829 1. . .422 2. . Bangladesh. . .129 2. .. . . . . . . . . . . . . . particularly in India and Thailand.728 2012 2.2 million. . . . . . . 2013 2. The following table provides the number of our full-time employees. .104 8. . . . . . . . . 155 . . . .. . . . . . . As at March 31. . . .537 Total . canvassers Sales and marketing . respectively. . . . . . . . . . . we had 1.728 2012 1. 2010 Shop management and staff . . Distribution and service . 2013. . . . . .. . . . . .146 8. . . 2011 and 2012.295 97 3. .913 945 1. . . . . . ... . as at the dates indicated. .309 92 3. .495 2011 2. . . .717 926 1. . respectively.. . . . .. the Eid al-Fitr festivities following Ramadan in Bangladesh and Pakistan during the ninth month of the Islamic calendar. .. . Manufacturing.876 969 1. . . . . . .490 March 31. India and Thailand. . .2 million. .773 622 558 415 703 1. cultural and country-specific holidays such as the Sri Lankan New Year in March and April. . . . . . . and Hindu and Buddhist holidays in India and Thailand. . . . . .. We own a total of 88 stores as well as six factory and warehouse sites. warehouses.363 136 4. . .537 employees across Sri Lanka. . . . . . . 2013 was US$44. . .152 short-term lease agreements in place. Direct sales staff. . As at December 31. .490 March 31.. By Location Sri Lanka . 2013 1. our total rental expense (including other occupancy costs such as utilities. . . . . .025 2. The total book value of these land and buildings as at March 31. .130 8. . . . . . . . .086 7. . India and Thailand. . . .. . .. . . . .663 7. . . . . . The following table sets forth our employees by function as at the dates indicated. . . . . . In some locations. . . . As at December 31. . service centers and corporate offices we use. Employees As at March 31.495 2011 1.114 8. . .. Bangladesh. .315 2. . . .397 152 4.4 million and US$10. . . . . . . . . . . . . . . . .Properties We lease the majority of the trading space. 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.441 494 509 333 607 1.. . . Credit management . . . . . . .. we had 8. 2013. . . . .693 7. . . . . Thailand . . India . Corporate management and administration . US$10. Seasonality Our sales follow the traditional seasonal shopping patterns in the countries in which we operate.

As at March 31. daily cash management and remittances. 2013. As at March 31. Ensure implementation of comprehensive and effective training programs. Improve productivity. retirement or similar benefits for our employees. The total staff complement (comprising employees and non-employees) was 12. district and area has a significant influence on all aspects of performance 156 . 2013. Branch managers employ these staff members directly and thus. guide and evaluate our employees with the objective of having qualified. The Balanced Scorecard rewards overall performance based on a range of criteria. In 2009. 2012 and March 31. Establish career development opportunities. However.013 as at March 31. product knowledge. including sales. respectively. the staff is not bound contractually to any employment contract with us.476 staff. who were engaged by the branch managers in the retail locations in Sri Lanka and Bangladesh and who are not considered our employees. We place strong emphasis on the quality of our employees. we established the SRA.414 and 4. 2012 and 13. as at December 31. In order to monitor employee development. The rating of each branch. 2013. and Singer Thailand contributes to the Social Security Fund on their behalf. accounts verification. there was a total of 4. loyal staff to boost sales and provide a quality customer experience. inventory management. retail internal audit. motivate and develop our employees. we have provided a total of US$12. therefore. district or area. The objectives of the SRA are as follows: • • • • • • • • Ensure that the best available staff are hired for each position. we use a monthly “Balanced Scorecard” and the “Retail Ladder”. 2013.The canvassers in our direct selling business are employees of Singer Thailand. Identify and coach individuals that perform below expectations. service center administration.9 million for pension. Establish effective mechanisms for performance evaluation. retail district management and retail area management. Staff Training We have implemented a number of strategies and programs designed to motivate. merchandising. train. and Improve job satisfaction and company loyalty. pursuant to the policies of our Company and the requirements of the law in the various jurisdictions in which we operate. variable.904 as at December 31. the canvassers do not receive a fixed basic salary and all of their cash remuneration is based on commissions and are. store administration and staff morale. collections. a program that seeks to train. The Retail Ladder uses the results of the Balanced Scorecard to determine the rating of a branch. we had entered into a number of collective bargaining agreements with labor unions in Sri Lanka which cover 635 unionized employees in Sri Lanka. In addition to the employees listed above. Identify and reward individuals that perform above expectations. Graduates of SRA receive a Singer retail diploma after covering areas such as sales skills. reducing staff turnover. We consider our relations with our employees and with their respective labor unions to be good. store management.

which 157 . submitted electronically to the head office of their respective country via the Singer Information System. training requirements. and canvassers must issue receipts to customers when cash is collected. namely Tally. Singer Information System In 2010. Pakistan and Thailand. It places particular emphasis on strict reporting and approval guidelines. 1. Bangladesh. a Swedish company that develops. we commenced the implementation of a new information system. supplies. and the depot manager must perform necessary reconciliations between cash and receipts. 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. 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. Using these reports. enabling management at our headquarters to control and monitor operations of our country subsidiaries and their respective sales networks efficiently. invitations to annual conferences. The SFM covers a broad range of topics to ensure solid internal control and compliance with accounting policies. In addition. promotion and career development. With regard to receivables management.0%. and the Singer Information System is designed for businesses that provide hire purchase. respectively.evaluation. and we follow up rigorously any short remittance by a branch manager. 2010. our management considers that the cash management policy is effective in ensuring that cash collected is reconciled and properly accounted for. If the shortfall is ultimately not repaid. In Thailand there are no stores and cash is collected directly from customers. Singer India uses a different accounting and inventory information system. This system was developed in conjunction with IFS. As the amount of bad debt expense as a percentage of revenue was only 1. Monitoring and Collections ”. a component-based extended enterprise resource planning suite built on service-oriented architecture technology. coaching requirements and disciplinary action. See “ – Consumer Finance – Credit Approval Process. The SFM is a concise iteration of all of the policies and procedures pertaining to the financial functions and approval levels within our Group. Cash and Receivables Management Policies Under our cash management policies.2% and 0. The Singer Information System also performs an automatic reconciliation to balance receipts. the Singer Information System. cash and receivables. 2011 and 2012. 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. we manage our credit portfolio using the Credit Life Cycle. we are able to monitor branches which fail to follow our cash management policies correctly or in a timely manner. 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. and implements IFS Applications™. Singer Financial Manual All of our operations adhere to the policies set out in our Singer Financial Manual (“ SFM ”). See “ – Singer Financial Manual ” below. annual bonuses. as well as relevant responsibilities to implement and monitor these policies and includes the key step-by-step approach to managing the credit process. and produces exception reports. On a weekly basis. Our audit committee conducts regular reviews of our operations to ensure compliance with the SFM. which is part of the Singer Financial Manual. our internal audit department reviews compliance with SFM policies. each store or depot is required to complete a weekly return. ongoing financial rewards. the Credit Life Cycle. The Singer Information System now operates in all of the retail and direct selling depots in Sri Lanka. the branch manager of each Singer store must deposit collected cash with a designated bank on a daily basis.9% for the three years ended December 31. including performance recognition.

hospital and surgical policies. 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. The Knowledge Bus travels across the Sri Lanka. wholesale business. We ensure that new employees are advised of our safety and health policy and we provide them with the necessary in-house training. credit management. including operating and maintenance costs. the cost of such insurance. and donations. customer relationship management. with the intention of helping local residents secure employment. These insurance policies have specifications and limits that we believe are appropriate in view of our exposure to the risk of loss. We also use the Singer Information System for the service centers. such as group-term life insurance with total permanent disability benefits.8 million. Insurance We have purchased insurance policies to cover a variety of risks that are relevant to our business needs and operations. offices. For example. US$1. our factory machinery. Research and Development We do not conduct any material research and development activities. particularly in rural and outlying areas. Health. While the needs of the different communities vary. sponsorship and support for education and youth. We maintain property insurance in respect of all leased and owned real property. Safety and Environmental Issues We value the health of our employees and place great emphasis on safety at all our stores. We maintain product and other liability insurance for our operations. as well as fidelity insurance. During 2012. donations. four of the most common needs are addressed through: donations and support for the disadvantaged. respectively. We also comply with applicable national and international environmental standards to minimize any impact operations may have on the environment. 158 . Singer Asia operates 121 sewing schools that provide subsidized training. IFS is contractually prohibited until 2018 from providing similar software services to our competitors. We also maintain various insurance policies for employees. donations and support for medical facilities and programs. applicable regulatory requirements and the prevailing industry practice in each country where we operate. in our IT systems. treasury management. The Singer Information System is fully integrated and online. warehouses. we invested US$1. as well as financial reporting and the general ledger. suppliers and fellow employees. The schools typically teach young ladies to operate sewing machines. Corporate Social Responsibility We are firmly committed to being a good corporate citizen. awarding graduates qualifications to assist them in securing work in the garment and related industries. and group accident.9 million and US$3. inventory and equipment. We believe that the insurance policies and coverage we have subscribed for are adequate for our business needs and operations. catering primarily to the rural communities. factories and warehouses. the Knowledge Bus visited 127 semi-urban and rural schools. In addition. Our ERP Singer Information System is exclusive to Sewko in our operating countries. sponsorship and support for the elderly. 2011 and 2012.4 million.we do not offer in India. and insurance relating specifically to directors’ and officers’ liability. we introduced the “Knowledge Bus” in Sri Lanka. and provides underprivileged children with hands-on training by qualified instructors on how to operate computers. We periodically conduct reviews of our insurance coverage. inventory management. to encourage IT literacy and awareness. In 2010.

resulting in us owning a 90.5 million (US$1. A succession of local operating managers tried to implement a number of business strategies to grow Singer India’s wholesale business. 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. 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. The amount spent in settlement or for assessed damages was not material in 2010. reducing our percentage of ownership of Singer India to 85. In order to obtain release of the goods. Singer India breached certain financial covenants and was in arrears on interest and principal repayments with respect to various financing agreements. 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.2 million (US$780. The registration of Singer India as a Sick Company provided legal protection against creditors. The consignment was valued at approximately LKR20 million (US$181. Since being deregistered by the BIFR. As a result. and INR28. As at December 31. In accordance with the BIFR plan.9 million (US$322. malicious and unlawful and seeking an order to quash the decision of the respondents to detain the consignment and prevent 159 . arrived in the Port of Colombo. 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. In February 2010.000) in May 2009. 2012.72 million) and relief from certain claims by secured and unsecured creditors. there are no material pending claims.4 million (US$578.9% as at December 31. 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 2005.000) to meet the requirements of the BIFR. On or around January 23. Singer Sri Lanka On or around November 28. arbitration or legal proceedings against us. a consignment order containing ‘Singer Technologies’ branded color television sets. the BIFR approved a restructuring plan for Singer India which provided for an equity infusion by us of INR 83. Singer India’s secured creditors also approved the plan and received a one-time settlement of all amounts due. The need for BIFR intervention reflected local mismanagement. Subsequently. Singer India was formally deregistered by the BIFR. profitability or business. and which could have a significant or material effect on our financial position.0% level required to maintain the Singer India stock exchange listing. Other than the matter(s) disclosed below.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. claims or proceedings which may have occurred in the 12 months immediately preceding the date of lodgment of this offering document with the Authority. 2009. which had been ordered by Singer (Sri Lanka) PLC in the course of its normal business operations. we remitted INR40. Singer India In May 2005. 2013.000). on February 28. 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. 2007.000) in March 2009. We subsequently sold shares from this holding. we had sold down our ownership in Singer India to the 75. but these strategies led to levels of debt incurred that Singer India could not service. In April 2008.1% interest in Singer India. 2011 and 2012. Our Directors have no knowledge of any proceedings pending. 2008. Singer India has not breached any financial covenants. We believe that any ultimate. 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. we made a further infusion of INR14.

Chinoy and Mr. We do not view this matter as material. citing that the financial projections had not. Mr. 2012. among other things. Chinoy and Mr. 1507 of 2012 in the High Court of Sindh at Karachi (the “ High Court ”) against Singer Pakistan. We do not view this matter as material. Chinoy. been signed by all of the directors of Singer Pakistan. Following their dissent. to order steps be taken by Singer Pakistan. Rasheed Y. we expect to have enough funds (excluding IPO proceeds) to proceed with the rights issue. On November 5.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.4% of Singer Pakistan and two other allied shareholders. 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. through an order passed ex parte . Thailand from the requirement to make a tender offer for all the shares of STL. Dagia filed Suit No. the board of directors of Singer Pakistan approved a rights issue (the “ 2012 Rights Issue ”) which required a majority vote. The matter is now at the hearing stage and the proceedings before the High Court are pending. the High Court granted an interim injunction temporarily restraining Singer Pakistan from issuing the rights shares. which was within three business days after the date of the acquisition. Singer Pakistan On August 30. Thailand on 17 September 2013. 2013 a waiver from the Office of the Securities and Exchange Commission. Yussuff Rasheed Chinoy. as required. who is a nominee of Janhangir Siddiqui & Co. If the High Court approves the rights issue. Mr. Our Company submitted the report on such acquisition to the Office of the Securities and Exchange Commission. which would enable the customs inquiry to be proceeded with. Pakistan. and that royalty payments made by Singer Pakistan be canceled and that the chief executive officer and its chief financial officer be terminated. Mr. 2012. India and Thailand applicable to our Group. which requires that all the directors present at a meeting in which a rights issue is approved sign the financial projections. to declare that Singer Pakistan may not engage in the business of hire purchase. our Company has to report the acquisition of its shares in Singer Asia to the Office of the Securities and Exchange Commission. Applicable Laws and Regulations See “ Appendix A – Regulation ” of this offering document for a description of the laws and regulations of Sri Lanka. which holds approximately 17. 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. 2013 dismissed the application filed by Singer (Sri Lanka) PLC. Abdul Hamid Dagia. its chief executive officer and its chief financial officer requesting the court to. In response. Before the SECP decided on the application. Bangladesh. All of the directors voted in favor of the 2012 Rights Issue with the exception of Mr. 160 . on September 27. Singer (Sri Lanka) PLC intends to file an appeal at the Supreme Court of Sri Lanka against this decision. its chief executive officer and its chief financial officer to increase the profitability of the company. Thailand within three business days following the date of such acquisition. Dagia formally lodged a complaint to the Karachi Stock Exchange regarding the proposed 2012 Rights Issue. 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. and Mr. Dagia dissented to the 2012 Rights Issue and did not sign the financial projections that accompanied the proposed 2012 Rights Issue. 2012. Singer Thailand Our Company obtained on July 12. grant an injunction restraining Singer Pakistan from proceeding with the proposed 2012 Rights Issue. alternate director for Mr. Limited. The Court of Appeal on September 3. Chinoy and Mr.

and the Company and the Sole Global Coordinator.0% and 8. You should also be aware that since September 24. Underwriter and Issue Manager and any of their affiliates or advisors have not independently verified this information or data.INDUSTRY OVERVIEW This report has been prepared by The Nielsen Company (Singapore) Pte Ltd (“ Nielsen ”) as an Industry Consultant. 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.6 billion as at December 31. Singer’s three largest markets in terms of revenue throughout 2012 were Sri Lanka. Pakistan.5%. except India. 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 report describes in detail the macroeconomic environment in each of Singer’s countries of operation. Introduction Singer Asia operates in five countries: Sri Lanka. with a combined population of approximately 1.0% of total population. The median age of the population is 31 years old. 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. While the Company believes that the information and data included in this section are reliable. a guarantee.0% of the population resides in urban areas. while the youth and older age groups comprise 25. In Thailand. respectively.7 million as at 2012. This section contains forward-looking statements. 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.2% and the unemployment rate is 5. Singer is engaged in the wholesaling of sewing machines. for the purposes of inclusion in this offering document. and must not be relied upon by any prospective Shareholder as. circumstances and results are difficult or impossible to predict and may differ materially from these forward-looking statements. and GDP per capita between 2008 and 2012 in these countries grew at a CAGR of 13. which necessarily involve risks. a prediction or a definitive statement of fact or probability. uncertainties and assumptions. Singer also provides consumer lending services in each of its countries of operation. India and Thailand. the Company cannot ensure the accuracy of the information or data.6% and 12. 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. SRI LANKA Macroeconomic Environment Population Sri Lanka had a population of approximately 20. an assurance. Nearly 14. 161 .0%. and provides an overview of the industries that Singer operates in. Bangladesh and Pakistan. with an annual rate of urbanization close to 1.1%. actual events. Due to various risks and uncertainties. The literacy rate is 91.6%. Bookrunner. In India. The working age group (15-59 years old) is about 67. Singer sells HCDs via the direct selling channel. 2013. Thailand and Bangladesh. Forward-looking statements are provided for illustrative purposes only and are not intended to serve as. Singer is engaged in the store-based retailing of HCDs in Sri Lanka. Bangladesh.1%. and has recently entered into the small appliances market. 5. respectively. 2012.

. . . 2012 . . . . . . Sri Lanka’s growth rate dropped slightly to 6. . . . . . . . . . .The table below sets forth Sri Lanka’s population and growth. . . . . . . . .1 – 0. . . . Source: International Monetary Fund Growth (%) 20. . .0 21. . . . . . . . . . .4 20. . . . . . . . . . . . Large-scale development and reconstruction projects by the government. . . . . . . . . . .7 0. . . . . . . . .6 billion loan to Sri Lanka by the IMF. . . . .8 0. . . . .7 20. . . . . . CAGR 13-15 (%) . . . . . . . . . . . . . . . . . Food inflation was even higher as a result of drought in some parts of the country.2% in 2012. . .3% in 2011. . . . . . . . 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . About 87.2 20. .7 0. . . . . . . .7 0. . . . . . 2010 . CAGR 08-12 (%) . . . . . . . . . . . . . . . .7% of households have access to safe drinking water and 85. . . . . . . . . . . . . . . . .8% in 2012 from 8.7 – 0. . . . . .8 0. . . . . . . . . The government introduced monetary tightening policies in the latter half of 2012 to ease the pressure on economy. . . . . . 2009 . . . 91. . . . . . . . . 162 . . . . . . . . . . . . which put further pressure on prices. . . . . . . . . . . . . . . while inflation reached a high of 9. . . . . with an average household size of four persons.3% of households use electricity as the major source of lighting. . . . .5% over the next three years. . . . . . . . . . . . . . . . . . . . . . due to a drop in imports and exports and slower expansion in services. . . . There was also currency depreciation of about 15. . .8 0. . . . 2015 . . . . . . . whilst efforts have been made to develop small and medium enterprises and to increase productivity in the agriculture sector. . . . . . .7% of houses are made of permanent materials.5 20. economic activity rebounded strongly following the end of the war and the grant of a $2.1 20.8 21. . . . . . . . . . . . . . . Population (in millions) Historic 2008 . . . . . . Forecast 2013 . . . . . . . . . . . While growth slowed to 3. . . . . . . . . . . . . . . . . . . . . . . . . . resulting in three straight years of high growth between 2010 and 2012. Economy Overview The Sri Lankan economy grew at a CAGR of 6. . . . . . .5% in 2009 due to the global financial crisis. . . . . . The table below sets forth Sri Lanka’s GDP historical and projected data. . . . . . . . . . . . . .7 0. . . . . . 2011 . . . . . The economy is expected to grow at a steady pace and is estimated to achieve a CAGR of 6. along with investments from the private sector helped to fuel growth in the country. . . . . . . .7 0. . . . .7 Living Conditions There are currently approximately 5. . . .0% in the first half of 2012. . . . . . . .1 million households in Sri Lanka. . . . . . . .6% over the past five years. . . .

. . . . . . . Income and Expenditure in Sri Lanka (as at 2010) • Average monthly income per household: LKR 36. . . . . . Household expenditures have also increased but at a relatively slower rate compared to household income.2 9. .451 o o • Average monthly income per household – Urban sector: LKR 47. .8 12. 2011 .8 6. . CAGR 13-15 (%) . .5 6. . . . .027 2.543 7. . .604 238. .852 8. . 2012. . . .8 13. . . 8. . .934 13.228 Average monthly expenditure per household: LKR 31. .082 12.633 9. . . . . .5 7.596 468.7 13. . . . . .5 2. . . .3 6.6 15. . . .8 8.712 525. .3 6. . .GDP (in billion LKR) Historic 2008. Forecast 2013. .9 14. . .430 2.3 6. .5 6. . .0 14.0 3. . . 2014. Household Income and Expenditure Household incomes have risen considerably in Sri Lanka in the past few years. .526 – GDP Growth (%) GDP Real Growth (%) GDP per capita (LKR) GDP per capita (US$) 23.5 3.870 274.783 Average monthly income per household – Rural sector: LKR 35. . . .694 318. .826 11. . . . .331 o o Mean household expenditure per month – Urban sector: LKR 44.881 2. .083 – 4. . . .423 163 . 2010. 2015.249 3.524 363. . .114 12.928 Mean household expenditure per month – Rural sector: LKR 29. . CAGR 08-12 (%) .7 15.5 414. . .604 6. . . .5 Source: The Nielsen Company and International Monetary Fund Note: US$ figures converted from LKR based on average annual exchange rates. . .411 4.078 2. . .6 219. .835 5. . . . .7 6. . .9 16. . . . . . . . . 2009.673 4. .

164 .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 . . . . . 2011 . . . . . . . . to compete with modern retail chains. . . . . . . . . Further.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. . . . . . . . 2009 .934 38. . .2 4. Their consumption patterns and shopping behaviors have evolved in tandem. 2012 . .679 36. . electronics and appliance retail stores. . This has resulted in a boom in organized retail.372 12. . . economic growth. . 2010 . . . . . There is an increased awareness among Sri Lankan consumers about global trends. . . . . . Traditional retailers are feeling the need to improve their marketing and selling strategies. . . . . 29. especially with the increase in supermarkets. . . .451 41. . . . as organized retailers offer consumers convenience and a wide variety of options to suit their evolving needs. .0 4. .1 4.228 31. . . . . footwear chain stores and other retail outlets. . . such as improving merchandising and displays and introducing online selling channels.8 Average monthly expenditure per household (LKR) 25. .951 11. . . . . . . . .554 47. . .1 4. . .331 34. . with rapid expansion across different retail formats and locations. . . . . . . CAGR 08-12 (%) . apparel stores. Sri Lanka’s retail industry is expanding rapidly. .0 4. .309 32. and infrastructure development across the country in the post-war period have contributed to the boom in the retail industry. . . the development of new townships across the country has resulted in opportunities for the setting up of retail businesses. .454 28. . and they are becoming increasingly modern in their outlook. . . Retail Positive market sentiments. .

. . . . . . . . . . . . . . . . . . . . . 2011 . . . . . . . . . . . . .4 9. . . . . . . 2015 . . . . . . . . . . . . . . . . . .943 2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .979 – 27. . . . . . . 2012 . .9 15. . . . . . . . . . . . . . . . . .3 22. . 3. .707 2. . 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . Forecast 2013 . . 2009 . . . . . . . . . . . . . . . . . . . .1 -0. . . . . . . . . . . . . . . . . . . . . . .8 26. . . . . . . . . . . . . . . . . . . . . . .7 Growth (%) Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209 165 . . . . . CAGR 13-15 (%) . . . . . . . . . . . . . 2012 . . . . Forecast 2013 . . . . . . . . . .0 0. . . . 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6 12. . .2 9. . . . . . . . .The table sets forth our historic and forecast retail sales: Retail value sales (in Billion LKR) Historic 2008 . 2010 . . .3 1. CAGR 13-15 (%) . . . . . . . . . . . . . . . . . . . . . . . 2010 . . . . . . . The table below sets forth our sales of store-based HCD retailers.318 3. . . .0 12. . . . . . . . . .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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .0 12. . . . . . CAGR 08-12 (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 11. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5 39. . . . . 77. . . . . . . . . . . . . . . . . . . . . . . . . .631 3. . . . . . . . . . . . . . . . . . . . . . 2014 . . . . . . . . . . .16 39. . . . . .06 45. . . . . . . . . . . . . . . . . . . . . . . . . HCD Retail value sales (in Billion LKR) Historic 2008 . . . . . . . . . . . . . . . .24 86. . . . . . . . . . . . . . . . . . . . .963 – 11. . . . . . . . . .22 – 25. . . . . . . . . . . . . . . . . . . . . . . CAGR 08-12 (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .76 – 10.14 70. .931 1. .4 9. . . . . . . . . . . . . . . . . . . . . . . . . . 2011 . . . . . . . . . . .0 13. .2 15. . . . . . . . .194 2. . . . . . . . .51 97. . . . . . . . .9 23. . . . . . 2015 . . . . . . . .4 10.25 57. .

the market size for home appliances has increased.0% of consumers who own a washing machine now owning a fully automatic washing machine. consumers purchased white and brown goods for the long term (eight to ten years). • • • • 166 . The standard of living has improved and Sri Lankan consumers are spending more on durable goods. thus increasing the complexity in trading. compared to five years ago. Key Trends and Drivers • The steady improvement of the economy in post-war Sri Lanka has had a positive effect on consumer confidence.• Consumer durables ownership is high in Sri Lanka’s households. consumers today are more willing to upgrade to new technology. Changing lifestyle patterns have led to change in the purchasing behavior of consumers. However. consumers are increasingly upgrading from semi-automatic to fully automatic washing machines. latest trends in electronics retail show that consumers are more willing to upgrade within five years of purchase. the Sri Lankan government has introduced ad hoc tariff waivers and has continuously changed the tariff structure and number of tariff bands.000 households bought one in 2012) and one in four have a computer. It is envisaged that the implementation of such plans will turn retailing into a lucrative business in Sri Lanka. For instance. 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. with nearly 20. With the introduction of more advanced technology in the market. one in six households own a washing machine (200. ad hoc government policy measures on import tariffs are a concern to retailers. Over the last decade. especially for TVs. The Sri Lankan government plans to transform the country into a shopping hub by lowering taxes and import duties. With the increased provision of electricity to the rural population. Approximately. Almost all households have a television and close to three in five households have a refrigerator. refrigerators and small kitchen appliances. In the past decade.

16. . . . . . Singer Homes and Sisil World to cater to various consumer segments. Revenue has grown by 135. This indicated the high awareness and equity status of the SINGER ® brand from a consumer’s perspective.2 2012 CAGR 10-12 (%) 26.5% in 2012. . • • • • 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 .0 0. . . Browns . .0% to LKR 4. 2011 also resulted in high double-digit revenue growth for the Company. . has contributed to a positive growth in sales. . 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 the expansion of retail outlets. .1 0.5 9.8 4. . . Singer has developed multi-channel retail networks. compared to growth of just 3. consumer electronics. .0% of the total market size. . Abans – A privately owned company whose turnover is slightly less than Singer.6 0.9 13. multi-channel strategy to provide a diverse choice of brands. Browns – A retail business which provides a range of home and office equipment. A close rival of Singer.7 183.5 3. . Singer Mega. Abans Group Damro . . Others. plus relaxation in import duty.2 1. in descending order: Singer. namely Singer Plus.6 Total . . . The company registered a growth of 28. Softlogic. . . . .5 70. . . . . Singer reported revenue growth of 15. . .7 billion in the last financial year from LKR 2 billion in the previous financial year. . The revenue for Abans and Damro is not published by the respective companies and has been estimated. . . the company expanded its product line to carry home appliances and later. .0 11. . and which represents only a part of its total revenue.2% market share. . In 2012. . . .1 45. . Softlogic . Damro – Its main business has been furniture but. .9% from 2011 to 2012.3 3. . . . .0 19. . . ‘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. In 2012. Abans is the agent for LG in Sri Lanka. Singer emerged. and impacts on the retailer brand as well. • Singer – The market leader with 36. .0 43. . . . according to industry sources. .4 23.9 4. .9 10. products and special offers to consumers. Damro and Browns. . and operates the Elite showrooms and Abans showrooms. . . The company has adopted a multi-brand. .8 2. 167 . Abans has been expanding outlets and also experienced strong growth in 2012. . .2 22.8 -10. . . Softlogic – The Panasonic agent in Sri Lanka. . . .5 24. the top five leaders by revenue were. and which is the Sharp agent in Sri Lanka. . .7 0.5 57.Competitive Landscape The HCD retail industry in Sri Lanka is dominated by a few key players. Softlogic has ‘Softlogic’ and ‘Softlogic Max’ showrooms selling consumer goods.1 25. 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. . . for the seventh successive year. since 2005. Abans.9 25. .0% in the fast-moving consumer goods retail sector as a whole. with the top five players accounting for 85. . . . .

2 12. Historic 2010-12 Rank Company 2010 2011 2012 CAGR 10-12 (%) 1 2 3 4 5 Singer . . An increase in interest and exchange rates also adversely affected the consumer lending industry in 2012. . However. . The lower interest rates during 2011 also helped to increase the number of loans advanced. the government rolled back the reduced import duty on vehicles during the first quarter of 2012. . . 7. . .8 40. . . . . Sri Lanka.1 37.9% from 2011 to 2012. . . . 343 244 80 53 38 758 351 272 112 101 14 850 381 312 152 104 18 967 5. but the return in consumer confidence significantly boosted borrowings in 2010 and 2011. . leading to a market slowdown in consumer lending. 1. . Browns .4 13.3% Damro. 15. . .0% Abans. . 6. . .7% Singer. . . . . . . .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. 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. . .The table below sets forth Sri Lanka’s top five retailers by number of outlets. . Consumer borrowing experienced a decrease in 2009 due to the global financial crisis.1 -31.9 Total . .2% Softlogic. Sri Lanka’s government reduced the import duty on vehicles. . In 2011. . . . 168 . 36. . . . . . . . . . . . . . . . . . leading to significant growth in the purchase and consumer lending for automobiles. . Consumer lending value grew at a rate of 20. . . . . Abans Group Softlogic . .0% Browns. .4% in the past five years. . Top five retailers by number of outlets. . . Damro . . 33. with a CAGR of 25. .

. . . . . .5 – 201. . CAGR has averaged 17. . . . . . . . . . . . . . . . .5 10. . . . . . . . . . . . . . . . . . . . . . .8 34. 2010 . . . . .2 185. . . . . . . . .6 trillion by 2015. . . . . . . . . . . . . . . . . . . . . . . 421 437 588 861 1. . .3 17. . . . . . . . . . . . 2014 . . 2009 . .0 15. . . there is expected to be an increase in the demand for durable goods. . . . As the lifestyle of the population continues to evolve due to increased income levels and exposure to global trends. . . . . . . . . . .0% of durable goods are purchased through hire purchases. . . . . . . . . .5% over the past five years. . The growth in hire purchase value is expected to be steady in the next three years at a CAGR of 11. . . . . . . . . . . . . . . . . . .581 – Growth (%) – 3. . . . . . but lending in this segment has seen uneven growth. . . . . . . . . . . . . . . . . . . . . Gross Hire Purchase Lending Value (in Billion LKR) Historic 2008 .0 11.0 248. .4 20. . . . . . Since 40. . . . . . . . . . . . . . . . . . 2012 . . . . . . .6 -1. .041 – 1. . . . . . . . . .5 billion. .4 20. . . . . . growth in the value of consumer lending is expected to remain steady over the next three years to reach LKR 1. . . . . . . . . . . . . . . . . . . 2011 . . . . . . . . . . . . . . . . . . . . . . . . CAGR 08-12 (%) Forecast 2013 . . . . reaching a total lending value of LKR 248. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CAGR 13-15 (%) . . . . . . . . . . . . . .0 10. . . . . . . . . .9 25. . . . . . . . . . . . The table below sets forth Sri Lanka’s hire purchase lending value. . . . . . . . . . . . . . with some periods of tremendous growth. . . . .0 11. . . .0 12. . . . . . . . . . . .0%. . . .437 1. . . . . The market for hire purchases is estimated to be LKR 183. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2009 . 2012 . . . .6 46. . . . CAGR 08-12 (%) 2013 . . . . .7 – Growth (%) – 4. . . . . . . . . . . 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . .0% to 50. 2015 . . CAGR 13-15 (%) . . .9 26. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99. . . . . . . . . . . . .2 131. . . . . . . . . . . . . . . . . . . . . . . . . . . 2010 . . . . . . . . . . . . . . 2014 . . . .250 1. . . . . . . .Overall.0 41. . . . . . . . . . . . . .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. . . . . . . . . . . . . . . . . . . . . . . . . . . as set forth in the table below. . .6% of the overall value of consumer lending. . . . . . .7 billion. . . . . . . . . . . . . . . . . . .3 104. . . .8 183. . . . . . . . . . . . . . . Gross Consumer Lending Value (in Billion LKR) 2008 . . . . . .0 11. . . . . . . . . . . . . . . . . . . . . . . . . . . 2015 . . . . . . . . . . . . . . . . . . . . . . . . .0 Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209 169 . . . . . . . . . . . . .8 224. the hire purchase industry will stand to benefit from the increase in sales of durable goods. .

especially for televisions. With the increased provision of electricity to the rural population. Increased interest and exchange rates. At 0. Singer continues to have one of the lowest proportions of non-performing loans (NPL) in the industry.0% from LKR 132 million in 2010. Softlogic. Singer Sri Lanka offers a hire purchase service for consumer durables through its showrooms. Singer Sri Lanka income from its consumer durable installment loans was LKR 3.Key Trends and Drivers • The steady improvement of the economy in post-war Sri Lanka is having a positive effect on consumer confidence.5%. and also offers hire purchase for vehicles and agricultural equipment.0% from LKR 433 million in 2010. will also contribute to growth in hire purchase lending. the market size for home appliances has increased. with its gross lending value reaching LKR 1. • • • Competitive Landscape The hire purchase industry in Sri Lanka is very fragmented.0% in 2011. 40. with a growth of 6. thereby deterring borrowing by consumers. an increase of 40. Albans’ revenue from hire purchase was LKR 698 million in 2011. which was an increase of 61. with hire purchase forming 45.0% of its total portfolio.5%.0% from 2011 to 2012.9% from LKR 2. Softlogic’s revenue from hire purchase was LKR 145 million in 2011. The frequent advancement in technology in the consumer durables industry.2 billion as at 2012. Singer Sri Lanka has implemented strong internal controls.2 billion in 2012.0% of which is funded through hire purchase. Softlogic provides other types of loans as well.0−50. The standard of living has improved and Sri Lankan consumers are spending more on durable goods. had a gross lending value of LKR 4. along with reduced liquidity. consisting of about 55 companies in the non-banking financial sector. hire purchase schemes make the purchase of consumer durables possible for this segment. the second largest lender. Singer Sri Lanka is the largest lender with a gross lending value of LKR 13 billion in 2012. Abans saw growth of 12. and the trend among consumers to adapt to it more rapidly. 170 .4 billion. In spite of the lower rural household income levels. At about 1. Hence it is envisaged that the hire purchase industry will grow with increased electrification in rural areas. with growth of 16.2% of loans in 2010 to 7.9% from 2011 to 2012. The rate of NPL for example reduced from 11. Abans is expected to see good growth over the next couple of years. which was an increase of 10. Softlogic has a low proportion of NPL.3 million in 2011. mainly due to Albans’ recovery efforts. will continue to affect the hire purchase industry in 2013 by making hire purchase interest rates more expensive. credit approvals and good follow-up to ensure that non-performing loans are kept to a minimal. followed by refrigerators and small kitchen appliances.0% during financial year 2012.

. . . . . . . . . . . . . . . . .9 – 1.3 13. . . . . . .238 101. . . . . . . . . . . .1 1. . 2012 .1 1. . . .616 1. . . . Rank Company 2010 2011 (in million LKR) 1 2 3 Singer . . . . . .7 34. . . . . . . . . .386 104. . . . .6 years. . . The table below sets forth the historic and forecast population of Bangladesh. . . . . . . . . . . .0% of total population. . . . . . . . of the total population. . . . . . . . . . . . The literacy rate is 56. . . . . . . . CAGR 08-12 (%) . . . . . . . .3 154. . . . Total . . .036 12. . . . . . .031 4. . . . . . . . . .323 895 84. . . . . . . .1 1. . . . . . . .0 – 1. . . . .400 13. . . . .8% and the unemployment rate is 5. . . . . with an annual rate of urbanization of close to 3.4 24. . . . . . . . . . .1 1. Abans . . . . . . . . . . . . . . . . . . Nearly 28. 2011 . . . . . .195 3. . . . . . . . . . . .0% and 5. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .519 2. . . . .985 2012 CAGR 10-12 (%) 23. . . Softlogic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .299 96. . . . . . . . . . . . Population (in Millions) Historic 2008 . .9 148. . .195 1. 8. . . . . . . . . . . . . . . .1 1. . . . . . . . . . . . .4 11. while the youth and older age groups comprise 34. . . . .0% of the population resides in urban areas.0%.1 1.373 122. . . . . Forecast 2013 . . Source: International Monetary Fund Growth (%) 143. . . . . . . . . . . . . .5 150. 2014 . . . . . .1 1. . . .0%. . . . . . . . . The median age of the population is 23. CAGR 13-15 (%) . . . . . . . . 2009 .1 1. . .1 171 .351 118. . . . . . . . . . . . . . . . . . . . . . . . . . .6 153. . Others. 2010 . . . .The table below sets forth the top three consumer lending entities by gross lending value. . .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 61.2 146. . . . . . . . . . . . 2015 . . . . . . . . . . . . . . . . . . respectively. .0%. . . . . . . . . . . . . . . . . .7 145. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 151. . . . . .

508 14. . .754 57.7 7.4 6.7 13.1 6.1 6. . . . . . . . is aimed at enhancing macroeconomic stability and supporting faster and more inclusive economic growth in Bangladesh in the coming years. whereas agriculture is the major occupation in the country.2% over the past five years. .1 6. . . The majority of the households (57. Moreover.2 40. 28. .7 million households in Bangladesh. .0% receive tap water. About 85. . the GDP growth is expected to remain stable at 6. with an average household size of 4. . .8% in 2012. . . 2010. . .3 887 997 1.6 589 653 729 777 793 7.188 – 5. . .7% in 2011 to 8. . . . . . .1%.8 13. The government is expected to focus on boosting spending on infrastructure and social sectors. .8 13. .119 12. . the service sector growth was in line with GDP growth. by a CAGR of 6.0% households use tube-wells as a source of drinking water. . Infrastructure issues and electricity shortages continued to affect economic activity in 2012. .0 5.016 12. . . . .546 7. .616 91. CAGR 08-12 (%) . . . . . and adopting policies that encourage investment and trade to create more jobs. Forecast 2013. . . . amounting to nearly 12. . the extended credit facility (a loan of US$987 million over three years) from the International Monetary Fund.1% in 2012. . .3 Source: The Nielsen Company and International Monetary Fund 172 .646 81. and only 11. .5 6. 2009. . In 2013. . . addressing power shortages. . GDP Growth (%) GDP Real Growth (%) GDP per capita (BDT) GDP per capita (US$) GDP (in billion BDT) Historic 2008. . .803 6. . Inflation reduced to some extent from 10. .8 13. granted as part of an economic program to adjust policies and provide support. . . . 2012. .0%) use electricity as the major source of lighting. . . The table below sets forth Bangladesh’s GDP historical and projected growth data. . .9 6.9 14. . . .885 12. . .5 13. 2014. . .0 12. .0% of the houses are made of permanent materials. While export growth slowed in 2012.557 9. . . .1% and is expected to pick up slightly in the following years.35 persons.4 13. helped maintain private consumption. .5 6. .380 45. . . 2011 . 2015. More than half of GDP is generated through the service sector. . .Living Conditions There are currently approximately 31. .455 8.2 13. . .735 – 14.0% of GDP. . .599 12. . Economy – Overview Bangladesh’s GDP grew by 6. Substantial growth in remittances can also be expected.8 6. . . healthy credit flows and growth in overseas remittance. . . At 6.643 64. . . . . . 11. . CAGR 13-15 (%) .9 72. .066 50.

. . .841 10. .8 10. .6 Consumer expenditure (In Billion BDT) 2008 . . . . . . .308 4. . .477 Average monthly income per household – Rural sector: BDT 9. . .0 11. .1 Growth (%) 12. . 2011 .479 12. .0 10. . . .8 12.016 – Growth (%) 9. . Consumer expenditure per capita (BDT) 29. . . . . . . . . . . 2009 . . . . . . . . .8 12. . . .0 12.8 Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209 173 .334 6. . . . . .0 16.929 11. . . . . . . .0 10. . . . . . .8%. . . .726 – Growth (%) 19. . . . . 9. . . . . . 4. The above numbers for all other years are estimates based on the five-year CAGR from 2005 to 2010. .0 9.0 11. .531 Average monthly expenditure per household – Rural sector: BDT 9. CAGR 08-12 (%) . . . 2012 .313 41. . .803 9. . . . . . . .977 32. . . . . . . . . . . . . .648 Average monthly expenditure per household: BDT 11.0 11.8 9.527 10. . . . . . . 2010 . . . .200 o o Average monthly expenditure per household – Urban sector: BDT 15. . . .0 11. . .8 9. . . . . . .552 – Average monthly income per household (BDT) 2008 . The growth rate in consumer expenditure decreased in 2012 as the economy was affected by high inflation and infrastructure issues such as power shortages. . . . . . .200 12. . . . .742 14. . Consumer Expenditure Consumer expenditure has increased substantially over the past five years at a CAGR of 11. . . . CAGR 08-12 (%) . .8 11. . .764 5.726 44. . .458 11. . . . . . 2009 . . .480 o o • Average monthly income per household – Urban sector: BDT 16. .196 6. . . . . . . . . 2010 . . . .810 36. . . . . . 2012 . . . . . . .Household Income and Expenditure Income and Expenditure in Bangladesh (as at 2010) • Average monthly income per household: BDT 11. . . . . . . . . . . . 2011 .320 13. . .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. .612 Average monthly expenditure per household (BDT) 8. . .

. . . . . . . . .0 6. . . . with retail sales value averaging a CAGR of 6. . . . . . . . . . . . . . . . . . ‘mom and pop’ stores will coexist. . . . . Other organized retail – apparel and shoe chains. . CAGR 08-12 (%) . . . .0 1. in turn. . . . . In particular. . . . . . . . . . . . 2010 . . . . . . . . . . . . . The value of total retail sales in Bangladesh grew by 6. . . . long-term expansion strategies. .5 6. . . . . . . . Mainly attracting the middle-and upper-income consumer segments. . . . . . The retail sector is expected to reach a sales value of BDT 2. . . .520 1. .1 Growth (%) Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209 174 . . 2009 . . . . .798 1. . . . . . . . . . . . . . . . . . . . .6 6. .0 6. . . . . . . . . . . . wet markets and ‘mom and pop’ stores. . . . . . .415 1. . . . . consumer durables and furniture – have also grown significantly. . .0% annually) retail and wholesale sector. . . . . . . . . . . Inadequate infrastructure. . . grocery shops. . . the retail sector faces several challenges. The organized retail sector constitutes less than 2. . .0 trillion by 2015. . .4 6. .0 6. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .324 1. Supermarkets have started to flourish. . . . . . . . . . . . . . . . . . but are mostly limited to major cities such as Dhaka and Chittagong. . . . . 2014 . .590 1. . . . . . . . operated by thousands of small traders. . . . . . . . . . However. . . . . . . . . . The landscape began to change in the last decade when supermarkets moved in to benefit from the growing (at 6. . The unorganized retail sector will feel the need to improve quality and services. . . . .906 2. .Retail Retail in Bangladesh is largely unorganized. . . . . . . supermarkets have been able to achieve an annual growth of 15. . . . . . . . . .0-20. . . 2011 .0%. . . The organized retail sector is poised to achieve sustained strong growth in the coming years owing to the rising demand from consumers. The retail sector grew at a steady pace over the past five years. . . . . . . . and will follow in the footsteps of megastores. .021 – 6. . . . . . .1%. . . . . . . . . . . . Although the organized retail sector is expected to expand.68 trillion. . . . .680 – – 5. . . . .0% of the retail industry. . . 2015 . . . . . . . Retail value sales (in Billion BDT) Historic 2008 . . . The expansion of organized retail chains will provide a plethora of choices to consumers and enhance their spending which. . 2012 . . . . . . . . . . CAGR 13-15 (%) . . . . 1. . . . . .1 6. . . . . . . . . short-term plans and policies by government make it difficult for companies to formulate concrete. . . . . . . Forecast 2013 . . . . high inflation and short-term plans and policies by government are the major issues faced by retailers.6% in 2012 to reach BDT 1. . . . . . . . . . . . . . . . . will help economic growth. . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 billion.3 14. . . . . . . . . . . 2009 . . . . . . . HCD Retail value sales (in Billion BDT) Historic 2008 . . .5 19.6 17. . . . . . . . . . . . . The table below sets forth the sales of store-based HCD retailers in Bangladesh. . . . . . . . . 32. . . 2012 . . . . . . . . .9% from 2011 to 2012. . . . . . . . . . . . . . . . 2011 . . . . . . . . . . . . . . .4% in 2013. . . . . . . . . . . . . . . . . . . . . . . . 2010 . . . . . CAGR 13-15 (%) . . . . . . . . . . . . . CAGR 08-12 (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The HCD industry is expected to grow by 20. . . . . . . .7 38. . . . . .2 20. . . . . . . 2014 . . . . . . . 2011 .2 7. . 2010 . . . . . . . . . . and in 2015 growth is expected to be 14. . . . . . . . . . . . . . . . . . . . . .0 10. . . . . . . . 2012 . . . . . .042 – – 7. . . . . . . . . . . . . . . . . . 2015 . . .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. . . . . . . . . . . . . . . . . . . . . . . . . . .705 1. . . . . . . . . . . . . . . . . .5 27. . . . . . . . . .3 22. . . . . . . . . . . . . . . . . . . . . reaching a total market value of BDT 27. . . . . . . .7 44. . . . . . . . . .4 18. . . .0% with a total retail value of BDT 44. . . . . . . . .2 – – 12. . . . .0 Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209 175 . Forecast 2013 . . . . . . . .HCD Retailing Market Overview HCD retail in Bangladesh saw a growth of 20. . . . . .0 16. . . 2009 . . . . . . . . CAGR 08-12 (%) . . . . . . . . . . . . . . . . . . .5 16. . . . . . . . . . . . .1 – 20. .448 1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9 14. . Number of HCD Retail outlets Growth (%) 2008 .561 1. . . . . . . . . . . . . . . . . . . . . .3 9. . . . . .2 billion in 2012. . . .6 11. . . . . .8 9. . .1 15. . . . . . . . .834 2. . . . . . . . . . . . . . .

Walton (market share 19.7%. Electra.9%). in 2012.7%). sewing machine sales. Hire purchase facilities offered by Singer also helped to increase revenue.Key Trends and Drivers • Despite infrastructural issues such as power shortages.8%.1 billion and 4.6%. washing machines. and this is expected to remain an issue in the near future.0%). As the demand and supply for traditional CRT televisions dwindles. As electricity coverage (currently to 57. Walton and Butterfly Marketing. Growth was seen in almost all of Singer’s major product lines – refrigerators.1% in the previous year. had an increase in revenue of 23.0% of the population) increases. 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. grew at 25. nationwide presence and strong distribution network have made it a market leader with revenue of BDT 6. the sale of panel televisions is expected to increase. in descending order. the market size for home appliances is poised to increase. Butterfly Marketing Limited (market share 15.8%) and Electra (market share 5. the fourth largest player.1 billion. panel television. The fifth largest retailer. etc. earning estimated revenue of BDT 1.7% in 2012. 176 . the top five leaders by sales value were. My One has fewer number of stores compared to the top three players and mostly operates through dealers selling to ‘mom and pop’ stores. earning estimated revenue of BDT 5. accounting for more than 70.1%). Singer (market share 24. My One (market share 7.7 billion in 2012. Growth was 13. had growth of 11. and growth is expected to continue over the next two years. Due to a population with lower income levels. In 2012. My One. The second and third largest players.4% and 20.6 billion in 2012. the HCD retail sector has seen tremendous growth in the past few years. Significant quantities of counterfeit products are another challenge facing electronic appliance retailers in Bangladesh. respectively. Bangladesh has huge potential as the ownership of durable goods is still at a low level (less than 50. Singer’s strong brand recognition. Both companies have a wide presence and are close competitors of Singer. achieving a year-on-year growth of 22.0% of the total market size. • • • • Competitive Landscape The HCD retail industry is dominated by the top five players.0% of households own a television).

Rank Company 2010 2011 (in Million BDT) 1 2 3 4 5 Singer . . . 27. . .440 6. . . . . . .108 3. .9 15. 7. . . . Walton .0 9. Rank Company 2010 2011 2012 CAGR 10-12 (%) 1 2 3 4 5 Singer . . Butterfly Marketing . .7% Others. . . 286 228 124 96 38 934 1. .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. . . . .465 6. . . . . . 24.3 17. Total .The table below sets forth our top five retailers by revenue. . .335 4. . . .461 4. . . Total . .0% My One. . .007 1. .6 9. . by revenue: Market Share (2012) Singer. . . Electra .703 5. . . . . . .900 19.4 4. . . . . . . .083 1. . . Electra . . Butterfly Marketing . . . . 5. . . .834 338 275 140 104 45 1.705 314 243 130 100 40 1. . . . . . .610 7. . . 19.3 10. . . . . . Walton . .400 1. . . 15.5 18. . .331 5.336 22. .140 2. .5% Electra.100 2.5 9.1% Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209 177 . .127 1. . . . . .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.7 9. . . . . . .8 23. . . .042 8.8 6. . . . . .8% Butter y Marketing. . .9% Walton. . .165 2012 CAGR 10-12 (%) 17. . . . . . . . . .475 27. .720 1. . . . . . 4.538 1. .8 18. . . My One . . Others. . . . . . . . . . . . . Others. . . . .829 3. .150 4.646 3. My One .

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. . . . . . . . . . . .0 18. . . . . . . . . . . . . . . . . . . 2010 . . . . .7 44. CAGR 08-12 (%) Forecast 2013 . . . . . . . . . . . . A major share of the consumer lending market in Bangladesh is with the commercial banks. . . . . . . . . . . . . . . . . . . . . . . . . . .4 130.5 156. . . . . . . . . . . . . .0 59. . . . . . 2009 . . . . . . . . . The growth is expected to remain steady in the next three years leading to a CAGR of 18. . . . .0 20. . . . . . . . . . . The lending in this segment has seen high growth in the past five years (CAGR 23. . . .0 18. . . . . . . . . . . . . . . . . . . . 2010 . . .0 23. . . . . . . . . . .0 18. . .5 13. . . . . . . . . . . . 2009 . . . . . Gross Consumer Durable Lending Value (in Billion BDT) Historic 2008 . . . .1 18. . . . . . . . . . . . . . . . . . . .Consumer Lending The annual lending value of the consumer lending industry in Bangladesh is estimated to be BDT 156. . . .0 18. . . . . . . . . . .0 18. . . . . . . . CAGR 13-15 (%) . . . . . . . .5%). . . . . . . 2014 . . . . . . . . . . . . . . . . . . . . . . . . . .3 – 187. . . . . . . . . . . . . . . . . . . . . . .6 – Growth (%) 33. . . . . . . . . . . . . . . . . . . .2 36. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .0 28. . . . . . . . . . whereas the non-bank players have a small market share (about 15. . CAGR 08-12 (%) Forecast 2013 . . . 2011 .7 20. .0% and reaching a total lending value of BDT 69. . . . . . . . . . . . . . . . . . . . . .6 billion. . . . . . . . . . . . .0 26. . . . . . . . . . . . . . .3 261. . . . . . . .5 110. . . . . .0 21. . . . . . . . .8 21. . . . . . . . . . . . . . . . . . The growth is expected to remain steady over the next three years to take the consumer lending value to BDT 261. . .3 85. . . . . . . . .8 29. . . 2012 . . . . . . . . . . . . . . . . . . .0 69. . . . .0% from 2011 to 2012. . . . . . . . . . .0%). . . . . . . . Consumer lending grew 20. . . . . . . . .9 29. . . . . . . . . . . . . . . . . . . . . . . . .7% in the past five years.0 22. . 19. . . . . . Gross Consumer Lending Value (in Billion BDT) Historic 2008 . .0 18. . . . . . . . . . . . 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 – Growth (%) 35. . . CAGR 13-15 (%) . . . . . . . .0 Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209 178 . . . . . . . . . . . . .2 19. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2015 . . . . . . . . . . . . . . . . . . 71. . . . . . . . . . . .3 billion. . . . . .3 – 50. . . . . . . . . . . 2015 . . . . . . . . . . . . . . 2012 . . .5 221. . . . . . . . . . . . . . . . . and has experienced high growth with a CAGR of 21. . . .1 billion by 2015. . . . . 2014 . . .2 19. . . .

hire purchase is very common and enables the large segment of middle.275 251 33. The growth of HCD retail is expected to continue in the next two years.2 23.5% from BDT 152 million in 2011. BML mainly sells LG products. . . driving growth in the hire purchase industry. . Singer is the top player with a gross lending value of BDT 4.5 23. . Butterfly . . . . 2. Singer and Butterfly Marketing are the main non-bank players offering hire purchase schemes for consumer durables.085 364 39. its own brand products (Butterfly and Eco Plus) and two other brand products through its retail stores and dealership outlets. . . . . .715 4. . .910 225 26. • • Competitive Landscape The hire purchase industry in Bangladesh is mainly dominated by commercial banks. with growth of 24. Despite infrastructural issues such as electricity shortage. . . .084 29. . . BML sells electronics and home appliances. The company’s income from consumer durable installment loans was BDT 191 million in 2012. Butterfly Marketing Ltd. The hire purchase contracts are generally for a period ranging from 2 months to 12 months. . . . . is the second largest player and Singer’s closest competitor. . . 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 .and lower-income earners to own brown and white goods through payment in affordable installments. a company with an estimated gross lending value of BDT 287 million in 2012. . . . As electricity coverage (currently 57. televisions and air conditioners. . . such as refrigerators. through its retail stores and offers installment plans for the same. . .1 Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209 179 .7% from 2011 to 2012. . Total . . . Singer provides hire purchase service to customers purchasing consumer durables at its showrooms.Key Trends and Drivers • Due to a significant proportion of the population having lower income levels. . the HCD retail sector has seen substantial growth in the past few years. .809 44. .1 billion in 2012. Bangladesh has significant potential as the ownership of durable goods is still at a low level. . (BML). . . . .189 36. an increase of 25.258 2012 CAGR 10-12 (%) 18. Others. .5 27. . the market size for home appliances and hence the hire purchase industry is poised to expand. . . Singer is expected to see good growth in hire purchases in the coming years as well.220 3.0% of population) increases.

7 182. . . . . . .0% in 2012. . . . . .0% of total population. . 2011 . . . Population (in millions) Historic 2008 .0 168. . . . . . .4% in 2011 to 3. . . . . . There is steady growth in remittances from Pakistanis working overseas. . . . .0 Economy Overview Pakistan’s economy grew by a modest 3. . . . . . . . . . CAGR 08-12 (%) . . . . . . . .9 – 1. . . . . . .6 186. . . . Forecast 2013 . .0% and 4. . . . Literacy is 54. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The median age of population is 21. . . . .0% in 2011 to 10. . . . . . . . . . . . 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . 180 . . .0 2. . . Inflation has reduced slightly from nearly 12. . . . . .7 175. .0% of population resides in urban areas. with an average household size of 6. . .9 years. . . . with an annual rate of urbanization close to 3. . .PAKISTAN Macroeconomic Environment Population Pakistan had a population of 179 million as at 2012.0% of the households have access to tap water as a source of drinking water and 91. . . .4 persons. . . . . . . . averaging to about $1 billion a month. The working age group (15-59 years old) population is about 61. . . . . . . . . . . . . . . . . Agricultural products and textiles are the major outputs for Pakistan. Nearly 36. . . . . . . . . . . . . . . . . . .7% Living conditions There are currently approximately 30 million households in Pakistan. . . . . . . . . . . . . . . . . .5 2. . . . . . The economy was affected by severe floods and high inflation in 2011. . . . . . .2 171. . . Foreign investment in the country has declined over the past few years from 22. 2012 . . . . . . . . .1% in 2012. . . . . . . . . . . . . . . . . . . . . Growth in agriculture improved from 2. . . . . . . Source: International Monetary Fund Growth (%) 161. .1 2. . . . . . . . . .9% and the unemployment rate is at 7. . 2010 . . . while the youth and older age groups comprise 35. . . .1 2. . . . . . . . . . . . . . .0%. .1 2. . . . . . . . . .3 178. . . . .5% of GDP in 2012. . . . . . . . . . . . . . . . . . . . . . .0 2.0% of the households are under the ownership of the persons living in them.0% households use electricity as a source of lighting. .3 190. . . . . 2015 . .7% in 2012. . . . . . . . . . . . 2009 .8 4.0 – 2. . .5% of GDP in 2007 to 12. . . . . . . . . . . . . . . . . .1 2. CAGR 13-15 (%) . . . . About 86. . . . . .0% respectively. . . . . . . . . . . . 32. . . . . . . . . . . . . . . . . . . . . . . easing the inflation pressure. . . . .

. . . 2015. . . . .654 – 23.1 128. . . . . 2009. . . . . .1 14. .3 3.554 1.1 GDP per capita (US$) 904 926 1.863 115. . . . . CAGR 13-15 (%) . . . . . 14.2 15.2 14. . . . . CAGR 08-12 (%) . .3% owing to structural problems. . . Income and Expenditure in Pakistan (as at 2011) • • Average monthly income per household: PKR 21. . .660 14. . especially in urban areas. 2012 . . . . . . .1 24. .341 – Source: The Nielsen Company and International Monetary Fund Note: US$ Figures converted from PKR based on average annual exchange rates. .804 18. . .785 25. . .1 3. 2011 .5 3. .7 15. . . . . . . Women. . . .7 Growth (%) – 14. .012 1. . . .776 13. .5 19. . .088 20. . . .380 1. . .5 15.8 14. increasingly contribute to their household income by taking up jobs or starting home-based businesses. . . . Household Income and Expenditure Pakistan Household income has increased at CAGR of 14. . . . .0 15. . . 2010. its large size ensures it will continue to be a major component of GDP and growth in the country.275 – Average monthly income per household (PKR) 2008 . . .632 75. . . . . . 2012. . 2009 . . .1 1. .960 13.2 15.191 1.053 – Growth (%) – 14. .785 Average monthly expenditure per household: PKR 19. . . .142 164. . . . . . .5 3. . GDP growth in 2013 is expected to be 3.3 21. energy shortage and macroeconomic disparities.0 16.336 22. . . . . .5%. .002 21. .2 16. .724 14. .9 3. 2010 . . . 2011 . . . . . .7 1. . .203 102. .0% and growth in remittances is expected to remain at 7.7% in the past five years. . . 2014. . .2 Source: The Nielsen Company and Pakistan Bureau of Statistics 181 . . . . . . . . . . . . Inflation is expected to remain at 10. . . .534 27.336 Average monthly expenditure per household (PKR) 12.3 15.7 3. This has also led to an increase in the household income as well as expenditure. . . . . .Although the growth of the service sector slowed slightly in 2012. . . . . . . .509 19. . . . . . CAGR 08-12 (%) . 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. .6 15. . . . The table below sets forth Pakistan’s GDP historical and projected data: GDP Growth (%) 18. . . .456 16. . 10.037 31. . .243 12. . . .4 GDP (in billion PKR) Historic 2008. .893 145. .4 GDP Real Growth (%) 3. . . . . . Forecast 2013. . . . . .0 14.236 8. . . . .5 GDP per capita (PKR) 63. . . .0 3. . . .0 15.714 19.496 16.7 2.657 86.443 16. . . .

. . . . . . . .835 10.7 15. . . . . . CAGR 08-12 (%) . . . .032 – Growth (%) 19. . . . . . . .7 16. . . . 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .541 121. have increased substantially over the past five years. . 2011 . . . . . . . . . . . . . . . . . . . . . 7. . . . . . . . . . . . The growth in per capita income has been steady except in 2011. . . . . . . . . . . . . . . . . . . . 2009 . . . . . . 2009 . . .4 18. . . . . . . . . . . . . . . . . . . . . . . .Consumer Income and Expenditure Annual per capita income and expenditure. . . . . . . . . . . . . . . .9 24. 2010 . . . .470 70. . 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .475 100. .9 17. . .500 107. . .160 18. .7 19.977 86. . .2 20. derived from the GNP.930 77. . CAGR 08-12 (%) . . . . . . .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. . .189 15. . . . 2012 .173 – Growth (%) 19. . Income growth in 2011 was lower and the increase in expenditure was higher than in other years. . . . . .676 61. .2 Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209 182 . . . . . . . . . . 64. . when the economy was affected by floods and other issues. .338 12. . . .2 12. . . . . . . . . . . . . . .716 89.9 23. . . . The table below sets forth annual per capita income: Annual per capita income (PKR) 2008 . . . . . . . . . . .8 31. . 2010 . . . . . . . . . . . .0 Consumer expenditure (in Billion PKR) 2008 . . . . . . . . . . . . . . .787 20. . . . . . . . .

. . . The retail scene in Pakistan has witnessed a shift in the past few years due to the arrival of multinational companies/brands. .7 trillion by 2015. 1.900 – 3. .9 9. . . . CAGR 08-12 (%) Forecast 2013 .7% CAGR over the past five years. . . .5 9. grew at a faster CAGR of 12. . . . .0% of GDP. . . . . . . . . . . the retail and wholesale sector was valued at PKR 3. . the retail sector grew at a slower pace of 9. . . although smaller. . . . . global economic slowdown and terror attacks have proved to be deterrents to retail sector growth in 2011-12. . . . . especially in non-grocery retail. Organized. . 2010 . .6% from 2011 to 2012. . . . .646 2. .392 3. 2009 . . 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. .5 10. . . . After experiencing significant growth of 17. . . . . This has led to the emergence of new trends such as more structured retailing. . . . . . 2012 . .7 7.900 2. . although a few of them are spread across the country. averaging 11. The large-format retail chains sell to small retailers. . . . . . . . . .100 2. . . 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 . . . and the establishment of supermarkets and hypermarkets. The increasing affluence of consumers and changing lifestyles (increasing consumerism) have helped increase consumer spending. . . . . . . .6 11. .0 17. . . . operational efficiencies. The number of retail outlets in the country is estimated to be two million as at 2012. . . . while high inflation. . . . . . ‘pan’ shops and fewer supermarkets. . . . . . .5 7. . According to the Pakistan Bureau of Statistics.247 2. 2014 . CAGR 13-15 (%) . . hypermarkets and specialty stores. . . . .728 – Growth (%) 9. .2 Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209 183 . . . . reaching a market value of PKR 3. . . . . and also directly to customers. .126 3. . . . . . .8 8. The mid-and high-income population residing in major cities have fueled the growth of the organized retail sector. . . . . Growth in retail sales is expected to remain high in the next three years.9 trillion. . . including smaller towns. . . . . . . . .Retail Pakistan has a highly fragmented retail sector with a large proportion being unorganized retail (estimated to be more than 90. . . The retail sector is currently valued at PKR 2. . 2011 . . . . . . .7% over the past five years. . . . . . The non-grocery sector. . . .8% in value sales from 2010 to 2011.6 trillion in 2011-12 and constituted about 18.0% of the retail market). The various formats of retail stores include mostly ‘mom and pop’ stores. . larger retail stores are mostly concentrated in the major cities. medical-cum-general stores.8 9.

. . . . . . . . . . . .3 3. . . . . . . . . . . . . . . . . . . . . . . . .191 3. . . . . . . . . . . .07 – Growth (%) 8. . . . . . .98 27. .5 Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209 Total retail value sales of HCDs. . . . . . . . . . . . . . . . . . . . . . . . . . Pakistan. . .424 – – 4. 2009 . . . . . . . . . . . . . This is largely due to a return of consumer confidence after floods and violence in some parts of the country subsided. . . .34 37. . . . . . . . . . . . . . . Sales of store-based HCD retailers Total retail value sales of HCDs. . . . . . . . . . . . . . . . . . . . . . . . 19. . . 2014 . . . . . . . . . . . of retail outlets Growth (%) 2008 . . . . .7 11. . . . . . . . . . . . . . . . . . . . . . . . 2.6 Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209 184 . . . . . . . . . . . . . . . . . . . . . . . 30. 2010 . . . . . . . . . . . . Historic 2008-12 No. . . . . . . 2015 . . . . . . . . .110 3. . . . 2009 . . . . . . . . . . . . . .42 25. . . . . . . . CAGR 08-12 (%) . . . . . .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. . . . . . . . . Forecast 2013-15 HCD Retail value sales (Billion PKR) 2013 . . .5 2. . . . . . . . . . . . . . .9 3. . . . . . . . . . . . . . .51 23. .6 3. . . . . . . . . . . . . . . . . . . . 2011 .296 3. . . . . . . . . . . . .83 – Growth (%) – 11. . . . . . . . . . . . . . . CAGR 13-15 (%) . . . . . . . . . . . . . . . . . . . . . .38 21. . . . . . .0 7. . . . 2010 . . . . .2 10. CAGR 08-12 (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2012 . . . . . . . . . . . . . . 2011 . . . . . . . . . . . . . . . . . . . . .3 10. .8 billion and grew 7. .1 9. .976 3. . . . . . .13 33. . . . . . . Pakistan. . . . . . . Pakistan. . . . . . . . . . . . . . .1% from 2011 to 2012. . . . .5 11. . . . . . . . . . . . . . . Growth is expected to increase in the next three years to reach a market value of PKR 37 billion by 2015. . . . . . . . . . . . . . . . . . .0 9. . . . . . . . . . . . . . . . . . . . . . . . . . .The HCD Retail Industry Market Overview The HCD retail industry in Pakistan is currently valued at PKR 27. . Historic 2008-12 HCD Retail value sales (Billion PKR) 2008 . . . . . . . . . . . . . . . . . . . .

In 2012.0% market share). with its sizable market. etc.2% growth in revenue from 2011 to 2012. such as refrigerators.3% market share) and CSD (0. but are now frequented by a large section of the general public. proved a deterrent to investment and affected the cost of raw materials for manufacturers of electronic devices. Canteen Stores Department (“ CSD ”) were originally set up as army/defense stores. in revenue. CSD is estimated to have earned revenue of PKR 79 million in 2012 through the sale of consumer durables. respectively.Key Trends and Drivers • Hire purchases are very common and enable the huge segment of middle. Rupee devaluation and cost escalations affected sales of most appliances. achieving a growth in revenue of 7. a company with revenue of PKR 565 million. MAKRO Habib Pakistan Limited and Metro (“ Makro ”).0% of the total market size. convenience. Afghanistan. whereas an increase in oil prices and a shortage in electricity have adversely affected manufacturing.. USL had a 13. and countrywide store presence has helped Singer maintain its leading position. Due to the low presence of manufacturers and retailers in Afghanistan. fast-moving consumer goods. the third and fourth largest players. Devaluation of the Pakistani rupee has put a burden on the purchasing power of consumers. with the top five players accounting only for 11. The growth in revenue was mainly due to increased sales of high sales-value appliances. and sell groceries and fast-moving consumer goods. Parallel imports of electronic devices is another challenge retailers face in Pakistan and is expected to remain an issue in the near future.3% from the previous year. variety and service. is the second largest player and Singer’s closest competitor.2 billion in 2012. Singer (8. 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. this is a huge opportunity for retailers and distributors in Pakistan.) Ltd (“ USL ”). Singer was the leading company with revenue of PKR 2. Metro (0.0% market share). the top five leaders by revenue were. and sell groceries.3% market share). Their consumer durables business is estimated to be about PKR 200 million combined. air-conditioners and panel televisions. in descending order. United Sales (Pvt.and lower-income earners to own brown and white goods by enabling payments through affordable installments. Makro (0. Despite instability and security concerns. a customer base across different economic and social classes. Pakistan acts as a gateway to import goods into Afghanistan. 185 . Having high brand recognition.4% market share). USL (2. Government’s initiative to reduce the excise duty on electronic goods has resulted in the growth of manufacturing and retail revenue. apart from electronic appliances. • • • • • Competitive Landscape The HCD retail industry in Pakistan is highly fragmented. are hypermarket and cash and carry stores. apart from electronic appliances. clothes. 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. serves as a supplementary market for companies operating in Pakistan.

. 8.Top five retailers by revenue. . . . . . . . . . .765 25. . .6% Total . . . . .6% 15. . .. .217 499 565 103 111 50 91 66 79 23. . . ..4% Metro. . . Metro .198 2011 160 70 20 15 9 3. .. . .424 2011 2012 CAGR 10-12 10. Afzal Electronics (Punjab) . CSD*. . . .3% Singer. . . . . . . . . Chart 3: Market share of HCD retailers in Pakistan. . Others. .. . .0% (million PKR) 2. . . . . . . .300 2012 160 72 22 20 9 3. . . . . . . . . . . .977 27. . . . .. . 89. .. by revenue: Market Share (2012) USL. . . . . 2010 163 68 19 15 9 2. . .139 3. .. Pakistan. .422 CAGR 10-12 -0.192 24. . Historic 2010-12 Rank 1 2 3 4 5 Company Singer .7% 8. 0. . . . . .0% Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209 186 .. .6% 15. .. . . . . .956 23. . . . . .832 454 83 42 57 20. . . . .067 2.5% 0. . 0.. 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. . . . CSD*. . . . . . . 0.924 3. .. . Pakistan. . USL. .. . . .. .026 3. . Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209 *Note: The revenues for Makro. . . . . .6% 3. . . . Top five retailers by number of outlets. and represent only a part of their total number of stores. . .7% 9.0% 3. . . . .. . . . .3% CSD. . .7% 17. ..828 Total . . Makro* Metro* . . USL. .0% Makro.6% 47. . . . .9% 2. Historic 2010-12 Rank 1 2 3 4 5 Company Singer . Metro and CSD are estimated to indicate revenues from their HCD sales only and represent only a part of their total revenue. . . 2010 1. .. 2. . Others. .9% 7. . .0% Others. . .. .. . .0% 11.

. . .1 – Growth (%) 19. . . . . . . . .1 Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209 187 . . .7 426. . Historic 2008-12 Gross Consumer Lending Value (Billion PKR) 2008 .Consumer Lending The annual lending value of the consumer lending industry in Pakistan is estimated to be PKR 441 billion. .0 3. . . . . . . . . Consumer Lending. . . . . . . the return in consumer confidence boosted borrowings significantly in 2012. . . . . .6 5. . . .8 11. . . . . . . . . . . . . . . . . . . .2% in the past five years. . . . . . . . . . . . . . . . . . . . . . . . . Pakistan. . . 2010 . . . . . . . CAGR 08-12 (%) . . . . . . 2014 . . . . 2015 . . . . . . . . . . . . . . . . . . . .6% from 2011 to 2012. . . . . . . . . . . . . . . . . . Pakistan. . . . . . . . . .1 410. . . . . . . reaching a lending value of PKR 584 billion by 2015. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Consumer borrowing experienced a decrease in 2011 due to severe floods and high inflation. . . . . 2012 . . . . . 528. . . . . . . . .7 584. . . . .0 – Growth (%) 5. . . The consumer lending market in Pakistan is dominated by the local banks. . . . . . . . . . . .0 5. . . . . . . . . . . . 2011 . . . . . . . . . . . . . . . . . . .7 555. . . .1 5. . . . . . . . . . . . . . . . . . . .0 0. . . . . following which. . . . . . . . . . . . . . . . . . CAGR 13-15 (%) . . . . . 345. . . . .2 Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209 Consumer Lending. . . . . . . . Consumer lending value grew at 11. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8 5. . . . . . Consumer lending is expected to see a steady growth in the next three years. . . . . whereas the non-bank players have a smaller market share. . . . . . . . . .2 447. . . . 2009 . . . . . with a CAGR of 5.1 5. . . . . Forecast 2013-15 Gross Consumer Lending Value (Billion PKR) 2013 . .5 451. .

.9%. . . .0 5. . . . . . .8 3. . . . . . .8 5. . . . At an overall level. . . . . . . . The lending in this segment has seen uneven growth in the past five years (CAGR 5. where the majority of the population is in the lower-and lower-middle income segments. reaching a total lending value of PKR 35. . . . . . . . . . . . . . . CAGR 13-15 (%) .0 2. . . . . . . . CAGR 08-12 (%) . . In Pakistan. . . . . . . . 2015 . . . . . . . . . Pakistan. estimated at PKR 30 billion. . . . . . . . . . . . . . . . . .9%) due to economic and political instability.5 30. . . . . . . . . . . . . . . . . .Consumer Durables Market overview The Pakistan market for lending towards consumer durables purchases is about 6. . . . . . . . . . . . . . . . . . . . . The result is an overall increase in the standard of living of the population. consumer lending gives higher purchasing power to the consumer by making consumer durable goods accessible to them. . . . . . . . an increase in demand and hence growth in the manufacturing of consumer goods. . . . . . . . . . . . . . . . . . . . . 2011 . . . . . . . . . . 24. . . . . . . . . . . . .1 billion. .8 27. . . . . . . . . . . . 2009 . . . . . . .6 26. . . . . . . . . . . . . . . .5 9. . .9 Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209 Consumer Durable Lending. 31. . . . . . . . . Forecast 2013-15 Gross Consumer Durable Lending Value (Billion PKR) 2013 . . . . Historic 2008-12 Gross Consumer Durable Lending Value (Billion PKR) 2008 .6 25. Pakistan. . . . . . . . . . . . . . . . . . . .5 35. . . . . . . . . . . . . 2014 . . . . . . . . . . . . . . . . . . . . . . . . . .5 5. . . . . This growth is expected to remain steady in the next three years at a CAGR of 4. 2012 . . . . . .9 33. 2010 . . . . . . . while the growth was at its lowest in 2011 due to floods and high inflation. . . . . . Consumer Durables Lending. . . . . . . . . .2 – Growth (%) 18.0 4. . . . . . . . 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. . .1 – Growth (%) 5. . . .9 5. . . . . . . . .0% of the overall consumer lending value. .9 Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209 188 . . . . . . . .

7% from PKR 333 million in 2011. an increase of 15. and hence the hire purchase industry.. CSD provides hire purchase for consumer durables – refrigerators. across the country.Key Trends and Drivers • Hire purchase facilities are being increasingly used by the Pakistani consumer. franchises and dealers.2% during 2012.and 18-month installment plans with multiple down-payment options. The hire purchase contracts are generally for a period ranging between six months and 30 months. Political and economic stability is crucial for the development of the consumer finance industry. a company with a gross lending value of PKR 565 million in 2012. USL. This trend is expected to continue in 2013 as well. is the second largest consumer finance provider and Singer’s closest competitor. computers and generator sets. Singer is the top player with a gross lending value of PKR 1.9% from 2011 to 2012.0% growth in hire purchases in the next two years. especially the large segment of middle. TVs. for the personnel of armed forces and some related organizations. with an estimated gross lending value of PKR 40 million. shops. etc. Canteen Stores Department (CSD) has run hire purchase schemes for the past four decades.and lower-income earners who wish to own brown and white goods by enabling payment through affordable installments. 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. air conditioners. USL provides consumer durables hire purchases in six-. and for cars. The Company’s income from consumer durable installment loans was PKR 385 million in 2012. CSD saw a growth of 21. 12. the economy has uplifted and there has been political stability in the country in the past four years. consumer spending. Singer provides hire purchase services for consumer durables through its showrooms. Singer is expected to see more than 15. motorcycles.7 billion in 2012 and a growth of 4. deep freezers. who are in the hire purchasing business as well. • • • Competitive Landscape The hire purchase industry in Pakistan is mainly dominated by banks. USL is a fully owned subsidiary of the Dawlance group of Companies. If this trend continues. we have picked TWO of Singer’s closest competitors – USL and CSD. The high and variable lending interest rates have adversely affected the consumers’ borrowing in the past year. will continue to see steady growth. 189 . Due to huge monetary aids coming into the country in the past decade. For the sake of comparison. USL is a long established company in Pakistan and has a large network of branches.

with an average household size of five persons. . . . . . . .207 1. . . .0% and its unemployment rate is 10. . . .0% use hand-pumps/tube-wells as a source of drinking water. . . . . About 62. . . CAGR 08-12 (%) . . . . .628 499 33 25. . . . . . . Historic 2008-12 Population (Million) 2008 . . . . while the youth and older age groups comprise 29. . . . . . . . . 2010 . . . . . . . . .0% 5. . . . . . .501 454 28 24. . .4 1. . . . 2012 . Others.0%. while another 42. .213 6. .Top three consumer lending entities by gross lending value. . . . Population. . .849 1. .158 1. . with an annual rate of urbanization close to 2. . . . . . . . India’s literacy is 61. . . . . Historic 2010-2012 Rank Company 2010 2011 2012 CAGR 10-12 (million PKR) 1 2 3 Singer . . .902 30. . . . . . . . . . . . 32. CSD . . .0% of the population resides in urban areas. . . Total . 67. . .4 1.5%. respectively.174 1. . . . . . . . . . . . . .358 27. . . . . . Nearly 30. . . . . . . . . . . . . . . . . .0% households have access to treated tap water. . . .518 1. 1. .191 1.4 1. .4 1. .0% of the total population. . . . . . . .4 1. .5 years. . . . . . . . . . . . . . . . . . . . USL. . .866 26. . . .0% of houses are made of permanent materials. . . . . . . . . . . . . . . . . . . . Source: International Monetary Fund Growth (%) 1. The median age of the population is 26. . . . . . . . . . . . . . .4 1. . . . . . . . . . . . . . . . . . . . . . India. .0% of households use electricity as the main source of lighting.223 – 190 . . . . . . . .9% 6. . . 2009 .707 565 40 27.6% 11. . . . . . . . . . . . . . . . . The working age group (15-59 years old) population is about 65. . . . . .0% and 6. . . . . . .2 billion as at 2012. . . .5% of households are under the ownership of the persons living in them. . . . . . . .6% 18. . Pakistan. . . . . . . . . . . . . . . . . . . . 86. . . . . . . .4%. 2011 . . .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. .7 million households in India. . . . . . . . Living conditions There are currently approximately 246. . . .

. . . . which stood at a CAGR of 6. .874 13. . . .220 63. . . . 2011 . . . . .Population. . . Inflation stabilized to 8. . . . . . . . .9 GDP per capita (INR) 47. This is attributable to a slump in investments. . . CAGR 13-15 (%) . . lower exports due to a drop in global demand. . . good savings and investment rates. . . .256 1.0 15. . . . . . .307 75. Economic liberalization measures initiated by the government have helped to accelerate the country’s growth. . . . . . . . . . . . .0% for most of 2010 and 2011. and increased integration with the global economy. . . .641 79. food inflation has remained high.9 5. .4 15. . . .465 97. . . Source: International Monetary Fund Growth (%) 1. . . .0% of workforce) but contributed to less than one-sixth of GDP in 2012. The mid-term outlook for India’s economic growth is positive due to a younger population. . . .3 1. . In the second half of 2012. . . . . reverting to near double digits in 2012 after a brief respite in 2011. . affecting food prices and hence consumer spending. . . . . 2012. . India’s economy grew by 4. and a weakening personal income and consumer spending. . CAGR 08-12 (%) . . . .2% in 2012. . . . . . . . .700 – GDP Growth (%) 15. . . India. .956 61.239 1. . lower imports due to a sharp drop in gold and other imports. . .3 1. . .2 Source: The Nielsen Company and International Monetary Fund 191 .091 1. . . . . . .079 1.053 86. . . .379 1. . . . . . . . . additional reforms and deficit reduction measures were announced by the government to boost growth.3 11. . . . . . . . . which fell far short of expectations in view of its strong performance in recent years. thus easing the inflation pressure. . However. . . . .9 10. . . . . . . .2 13. . .458 52. . . .6 22. . . . India. 2010. . . . A good monsoon season will improve agricultural production. .9 GDP per capita (US$) 1.5 GDP Real Growth (%) 6. . . . .042 71. . . . including allowing higher levels of foreign direct investment in the country. . .535 1.3 1. . . accounting for nearly two-third of India’s output in 2012. . while the service sector is a major contributor to economic growth. . . 54. .272 – Economy Overview India has an open-market economy. . . . . . while an improvement in the global economic climate is expected to bring in investments in the country to boost the GDP growth to 6. . . 2009. . . . . The table below sets forth India’s GDP historical and projected data: GDP Nominal. 2014 . . . . . . . . . . . .9% in the past five years. . .1 6. . . Historic 2008-12 GDP (Billion INR) 2008.495 8. . . . .9% in 2012. . . . . . . . . . .9 6. .3 1. . . . . . after staying close to 10. . . . . . . . Agriculture is the major occupation (employing about 53. . . . . Forecast 2013-15 Population (Million) 2013 . . . 2015 .8 4. .7% in 2013. . . .

. . (Billion INR) 32. . . .4 12. . . . . . .5 14. . . . . .3 15.6 14. .940 2. . . . . . .8 12. . .1 GDP Real Growth (%) 6. . . . . . . . . . . .999 36. .444 191. (Billion INR) 112. .6 Growth (%) 18. . . . . . . . . . . . . . 2012 . . . .134 149. . . . . . . . . . . . . . . . . .337 306. . . . . . . . . (INR) 215. .6 GDP per capita (US$) 1. .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. . . . . .203 The annual household disposable income and expenditure have increased substantially over the past five years. . . .0 11.661 56. . . . . . . . . . . . . . 2009 .701 1.210 – Growth (%) 18. . . . . . . . 2009 . . .4 Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209 192 . . . . . . . . . . . . . . . . . . . . . . . . .695 274. . .654 130. .9 11. 2015.0 6. . . . . . . . . . . . . CAGR 13-15 (%) . .1 17. . . . . . . . . . . 2014. . . . . . . . . . . . .6 11. . .874 220.050 166.4 6. . . Annual household disposable income. . . . . . . . . .6 11.495 – Consumer Expenditure per Household (INR) 151. .7 6. . . . . . . 2012 . . .352 13. . . . . . . . . . . . . . .7 15. . . . India. . . . . .196 13. . . . . . . India. . . . . . Forecast 2013-15 GDP 2013. . . . . . .434 Average monthly expenditure per household: INR 20. . . . . . . . . . CAGR 08-12 (%) .274 341. . . . . . . . . . . . . . . . . Historic 2008-12 Annual Household Disposable Income 2008 . . . . . .GDP Nominal.626 240. . . . . .2 16. . . 2010 . . .976 43. . . . .6% over the past five years. Historic 2008-12 Consumer Expenditure 2008 . . . . CAGR 08-12 (%) . 2011 . . . . The annual household disposable income increased at a CAGR of 12. . . . . . . . . .806 242. . . . . . .645 117. . . . .438 12. . . . India.327 50. . . .282 – GDP Growth (%) 15. 2011 . . . . .2% whereas the consumer expenditure per household grew at a marginally higher CAGR of 12. . .5 14. . . . . . . . . . . .2 Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209 Consumer Expenditure. . . . . . . .904 103. . . . . 2010 .6 GDP per capita (INR) 90.

. . . . . . Forecast 2013-15 Consumer Expenditure (Billion INR) 2013 . . . . . . . . . . . . . . . . . .7 12.3 10. . . . ‘mom and pop’ stores. . . . .613 8. 2015 . . .497 16. . . .2 . . . .8 8. . 2009 . . . . . . . hypermarkets and retail chains are largely present in urban areas – mostly in tier 1 cities and tier 2 cities to some extent. .600 311. . . . . .4 10. .0% of the market). . . . . The Indian retail market is estimated to be INR 16 trillion in size. . . . . CAGR 13-15 (%) . . . . It is also one of world’s fastest-growing retail markets. . . 10. . The retail environment is highly competitive and the consumers are highly price-conscious.0% foreign direct investment in retail. . . . . . . . . . . . . . . . . . 2014 . further increasing the organized retail market share in India. .019 286. . .9 13. . . . . . . . . . . . . . .4 Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209 Total retail value sales. small grocery shops and wet markets dominating the retail scene. .Consumer Expenditure.151 Growth (%) 8. . . . . . . . . . . This will open doors to international retail chains to set up shop in India. . . . . . . . . . The government has recently allowed 100. Strong economic performance and controlled inflation will help drive further growth in the overall retail sector in India. . . . . . . . . . .224 – Consumer Expenditure per Household (INR) 264. . . . . .981 76. . . . . . . Rising urban income levels. with small traders. . . . . . . . . . . . . . . . . . The huge domestic market (1. . . . . . . . . . . . Historic 2008-12 Retail Value Sales (Billion INR) 2008 . . . . . . . . . . . . . . . . 2010 . . . .3 11. . . . . . . .2 billion people) ensures that retail remains an important contributor to the country’s economy. . . . . new retail formats and the shopping experience provided by the organized retail sector have help increase consumer spending in urban areas. . . . Forecast 2013-15 Retail Value Sales (Billion INR) 2013 . .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. . . . . . . . . . . . . . . . . . . . 2011 . . . Supermarkets. . Organized retailing is absent in the majority of the rural areas and small towns of India. .890 12. . . . 62. . . . . . .5 10.058 13.783 – Growth (%) 12. . . . . . . . . . . . . . 193 18. . .613 15. . India. . 2012 . .527 68. . . . . . . . . . . . . . . . . India. . CAGR 08-12 (%) . . . India. . . . . .6 Growth (%) 10. . . . . . . . Total retail value sales. . . . . . . . . . . .7 10. . . . . . . . .

. . . . . . . . small grocery shops. . . . . . . . . . . . . Over the next three years.3 12. . . . Historic 2008-12 Retail Value Sales of Electronic Appliances (Billion INR) 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . and the growing demand for the latest gadgets and smart phones.6 Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209 194 . . . . . .0% in 2011. . . . 744 836 970 1. . . Total HCD retail value sales. . . . . . manufacturers are able to improve their reach and presence. . .286 – Growth (%) 8. . . 2011 . . . . . . . . 2010 . . . . . . . CAGR 13-15 (%) . . . . . . . . . . India.4 7. . . . . . and the lack of control on service levels provided by small retailers are some of the challenges faced by such manufacturers in wholesaling. . . . . . . owing to their increased income and exposure to global trends. . The industry has grown at a CAGR of 14. With the change in lifestyle of consumers. . . . . . . . . Forecast 2013-15 Retail Value Sales (Billion INR) 2014 . . . . .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.552 21. .Total retail value sales. . .1 8. . . . . tend to set up a few showrooms to allow for exquisite shopping experience with their brands and products. . . . . . the competition for shelf-space. . . . . . the industry will be performing strongly in the near future. . . . . Most manufacturers.6% in the past five years and the total retail value currently stands at INR 1. . . . . . . especially in the electronics segment. . . . . . . . . . . . . .286 billion in 2012. On the other hand. . .003 – Growth (%) 7. the opportunity for instant price comparison by cost-conscious Indian consumers. “mom and pop” stores. . . . . . . . the HCD industry is expected to see continued high growth. . . . . . . . . . . . . . 2015 . . 2009 . . .0 22. . . . . . . . . . . . . . . . . . . supermarkets and hypermarkets. . . . . . . . . . . . . . . . . end-retailers’ limited capacity to carry product variants. . . . . . most manufacturers prefer to transact wholesale to small traders. . . . . . . . . . . . .5% in 2012. . . . . . 2012 . . By investing in a strong distributor network and long-term relationships. . . . The HCD Retailing Industry Market Overview HCD retail in India saw somewhat subdued growth of 8. . . . . . . . compared to high growth of 22. . . . . . . . . . . . . . . . . . . CAGR 08-12 (%) . .184 1. 19. . . . . . . . . . . . . . .4 16. . . . . .5 14. . . India. . . . .7 7. . . . . . .

2014 . . . . 195 . . . . with a market share of about 3. Consumers generally feel the need to be seen with latest gadgets and increased income levels allow them to spend more on electronic devices. . . especially due to the increased popularity of social networking among young consumers. . formation of new households due to the emerging nuclear family concept. etc. . . .0% a year. are driving the growth in this segment. . . .. . . . . .967 – Growth (%) 12. . . Competitive landscape The small-appliances market in India is highly fragmented. . . . . Crompton Greaves and Usha. . . 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. Small appliances is a relatively new category for Singer and currently only 4. . . . . . .6 16. . .8 15.3 billion. . Small appliances are replaced at shorter intervals and thus offer an opportunity for repeat purchases by consumers. . Forecast 2013-15 Retail Value Sales of Electronic Appliances (Billion INR) 2013 . . . the multi-brand format allows for price and features comparisons. with fans being the major category. . . Bajaj Electricals. . the top three leaders by revenue were. . . . contributing to three-fourths of small appliances sales value. . In 2012. . . . • • • Small Appliances Segment The Indian small-appliances market. . . making them more popular among consumers. . There is growing demand for Internet-enabled devices. . . Due to low brand loyalty among consumers. Usha is a major player. . . . . . . . . . . . Nearly 60. . . . . . . . . . . 2015 .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. . . . . . . . . Singer sells its appliances to its distributors who in turn redistribute to retailers. in descending order. is growing by approximately 10. . .673 1. . . CAGR 13-15 (%) . . .0% of its total revenue is derived from it. . . This mostly includes entertainment and communication devices. . . .0% and estimated revenue from small appliances at about INR 8.0% of its total revenue is derived from the sale of small appliances. .Total HCD retail value sales. . are offering multiple brands in stores to attract more consumers. Young adults with increasing disposable income. . . . 1. . . .450 1. . Hire purchase schemes and installment payment schemes by retailers and credit cards drive growth in the purchase of electronic goods. . with a market size of over INR 227 billion. . . . . . . .4 17. . . . . . . . . . India. . . . . Electronic devices retail chains have been rapidly expanding and have been increasing their presence in smaller cities. especially around the festive seasons.

Usha .. .352 71 212. though a low-priority product to the affluent classes.336 3. which is a major category for the company.9% 9. . . . . .6% 16. . Others.9 billion in 2012. . . especially in the rural areas. . .400 1. with estimated sewing machine revenue of INR 2.531 21. . holding a market share of 33. . Usha is the top player in this segment. .294 277.521 19. . . . . . 27. .2% and revenue of INR 1.0% 15. Novel. . . Specialized sewing machines with embroidery functionalities have been gaining popularity. . . etc.815 16. With Indian consumer’s love for embroidery and practice of getting custom-made tailored clothes. Bernina. . . . Historic 2010-12 Rank Company 2010 2011 2012 CAGR 10-12 (million INR) 1 2 3 4 Bajaj Electricals . . in the Indian market. . . India. Crompton Greaves . Competitive Landscape The sewing machines market is dominated by two players – Usha and Singer. . . . .7 billion in 2012. Sewing machines. Others. . . . . . .837 – 182. the majority of sewing machines sold are still the mechanical models.790 31. Sewing Machines Sewing machines have evolved from the mechanical type to electrical models. . . . . . .960 21 192.013 1. . . Top sewing machine companies by revenue.4% Total . . Total . . . .916 8. serve a vital purpose for large segments of the society.584 13. with a market share of 20.210 6. . .259 6. . . .6% 27. . . . . .0% 19.8%. .336 8. . . . sewing machines are expected to continue to be in demand.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. About 20. . . 2.6% – 8. . Zig-Zag sewing machines have good growth potential in India.725 3. .0% 9. 196 . . . and represents only a part of its total revenue. . .Top three small appliances companies by revenue. . .120 5. . . . . . such as Brother. . . India. . . . . backed with demonstrations of the use of its sewing machines. .054 3. There are other smaller players in the market. . . . . .326 2. Historic 2010-12 Rank Company 2010 2011 (million INR) 1 2 USHA* . Singer . . . . Singer is second largest player.308 2.911 251. 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.443 20. .018 231. . . . and plenty of smaller regional companies. However. .545 35.0% of Usha’s total revenue comes from the sale of sewing machines.572 7. Singer focuses on enhancing its customer support and services. Singer . .0%-22. . .880 1.

6 0. . . . . . . . . . Nearly 30. . . . . . . . . The literacy rate is 92. . . . . and electricity (99.2% 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. . . . . . . . . .2 0. . . . . . . . . . . . . . . . while the youth and older age groups comprise 23. 46. Thailand. . .4%). . . .5 – 197 .4 63. . .6 0. sanitary toilets (99. . . . . . . . . .7% of the total population. . . . . . . .0% Singer. . . . . . . . . . . . . . . . . .6 persons. .5 63.5 million as at 2012. . . Living conditions There are currently approximately 17. . . . . . . . . . with an average household size of 3. . . . . . . . . . . . .8% live in Bangkok). . . . . . . . . . . . . . . . by revenue Market Share (2012) Usha. .4 63. . . . About 82. . . . . . . .0%). . . Historic 2008-12 Population (Million) 2008 . . . . . 2010 . . 20. .9%). . . .8% Others. . . . respectively. . . . . . . . . . . . . . . . . . . . . . . . Source: International Monetary Fund Growth (%) 0.4%) houses are made of permanent materials. . . . . 33. . .3 0. . . . . . . . . .9 million households in Thailand. .6% and the unemployment rate is 4. .6 0. . . . .0% of the population resides in municipal areas (of which 34. . . . CAGR 08-12 (%) . The working age group (15-59 years old) population is about 66. . .Chart 4: Market Share of sewing machine companies in India. . The proportion of house ownership in non-municipal areas is higher than in municipal areas. . . . . . . .0% and 10. . . . . . . . 2009 . . . . Most (98.9 64. . . . .3%. .3%. . . . . Most households have access to safe drinking water (89. Population. 2012 . . . . . . . . . . . . . .1 64. 2011 . . . . . . . . .4% of households are under the ownership of the persons living in them. . .

.5 -0. . supported by government decisions to raise the minimum wage and increase incomes in the public service sector. . . Flood mitigation projects have been undertaken by the government in order to prevent similar economic damage in the future. .6 GDP per capita (US$) 4. . Thailand’s main exports. . . 12. . The economy is expected to grow at a steady pace over the next three years. . Private consumption increased by 4. . . . . . . . . . . . 2015 . Historic 2008-12 GDP (Billion THB) 2008. . with a free-enterprise economy. . . boosting the economy in 2012. . . . . . . GDP Nominal. . Thailand. . . . . . . . . . . . .4 11. . . . . .0 GDP Real Growth (%) 2. .6 2. . CAGR 08-12 (%) .601 13. . . welldeveloped infrastructure. .Population. . . . Forecast 2013-15 Population (Million) 2013 . . . . . . . . . . .080 9. . . . . .395 5. Thailand. .3 7. . .6 64. 2014 .992 5.8 0. . . . . which crippled the manufacturing sector. . Thailand has an environment conducive to investments and growth. . . . .8 6. . . . . . . . . .8 7. Source: International Monetary Fund Growth (%) 0. . . .472 – GDP Growth (%) 6.494 177.1%. . . .540 11. . . . . . . . . . . . . .6 0.6 -2. .702 198 . . . .6% in 2012. . . . . . . 2014.726 7. . . . .105 10. .7 GDP per capita (THB) 143. . . . . . . .300 4. . .6 – Economy Overview Thailand had GDP growth of 5. . Thailand. . . 9. .590 GDP Growth (%) 9. .252 6. . agricultural commodities and electronics. 2011 . . . .5 GDP per capita (THB) 194. . . achieved steady growth. .323 208. . . . Forecast 2013-15 GDP (Billion THB) 2013. .330 158. . . . . . pro-investment policies. 2009. . . . . . . .1 5. . . . . The government is making efforts towards continuing the economic growth by attracting public investments and by encouraging domestic consumption to counter the effects of relatively weak external demand. . .8 65. . . . . . . . .3 8. . . . . . . .151 4. . 2012. . . . . . . and strong export industries.8 GDP Real Growth (%) 6. .248 142. . . . . . . . . . . . . . .0 4. . .8 4.6 0. .4 Source: The Nielsen Company and International Monetary Fund Note: US$ figures converted from THB based on average annual exchange rates. The table below sets forth Thailand’s GDP historical and projected data: GDP Nominal.2 65. . . . . . . . . . . 2010. . .6 0.189 164. . . . . . .042 10. CAGR 13-15 (%) . . . . . . . . following economic stagnation in 2011 largely owing to the massive floods in the industrial areas. . . . .316 GDP per capita (US$) 6. . . . .971 5. . . . . . .

. . .273 – 199 . . . Thailand. . . . . . . . . . . . . .403 18. . . .5 15. . . . . . . . . . . . . . . . . . CAGR 13-15 (%) . . . 2012 . . . . . . . . . 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CAGR 08-12 (%) . . . . . . . . . . . . . . . . . . . .8 3. . . . . . . . . . . . . . . . . Thailand. . . . . . Source: The Nielsen Company and National Statistical office – Thailand Growth (%) 9. . . . . . . . . . .677 – Average monthly household expenditure. . . Household Income and Expenditure Income and Expenditure in Thailand (as at 2011) • • Average monthly income per household: THB 23. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .403 Average monthly household income. . . . . . Source: The Nielsen Company and National Statistical office – Thailand Growth (%) 10. . . . . Historic 2008-12 Average Monthly Income per Household (THB) 2008 . Thailand. . . . . . . . . 14. . . . . . . . . . . . .7 7. . . CAGR 08-12 (%) . . . . . . . . . . . . . . . . . . .2 4. . .942 16. . . . . . . . . . 2012 . . .1 6. . . . . 2009 . .819 17. . . . . . . .526 20.8 GDP Real Growth (%) 4. . . . . . . . . . . . . . . . . .5 5.6 4. . . . . . . . . . . . .115 23.0 3. . . . . . . 2009 .8 5. . . . . . . . . . .6 3. . . . .1 Source: The Nielsen Company and International Monetary Fund Note: US$ figures converted from THB based on average annual exchange rates. . . . . . . . . . . . . . . . . . . . . . . . . Forecast 2013-15 GDP (Billion THB) 2015. . . . .7 20. . . Historic 2008-12 Average Monthly Expenditure per Household (THB) 2008 . . . 2010 . . . . . . . . . .641 – GDP Growth (%) 7. . . . .205 16. . . . . . . . . . . . . . . . . . . . . . . . . . . .GDP Nominal. 2011 . . . . . . . . . . . . . .9 1. . . .0 1. . . . . . .236 Average monthly expenditure per household: THB 17.903 22. . . . . . . . . . . .236 24. .8 5. . . . . 2010 . . .5 GDP per capita (THB) 223. . . . . . . . . . . . . . . .1 GDP per capita (US$) 7. . . . .177 7. . . .097 7. . . . . . . . . . . .

. . . .8 6. . . . . . . . . . . . . . . 2011 . . . . . 2010 .1% in 2012. . . . . . . . . .450 308. 4. . .210 316. . . .7 Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209 200 . . . . . . . . . . . . . . . . . . . . . . . . .6 -2.369 4. . . . .1 5. The growth in both income and expenditure was affected by the global economic crisis in 2009 and by floods in 2011. . . . . . Thailand. Historic 2008-12 Annual Disposable Household Income (THB) 2008 . . . . . . . . . . . . .0 8. . . . . . . . while consumer expenditure grew by 5. . . . . . . . . . . . . . . . . . . .166 – Growth (%) 5. . . . . . . . . .292 283. . . . . . . . . . . . . .602 4. . .6 2. . . . . . . . . . . . . . .8 0. . . . . . .8 Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209 Consumer Expenditure. . . . . .0 -2. . . . . . . . . . . .720 336. . . . .268 4. . . . . . 2012 . . . . . . . . . . . 2009 . . . . . . .600 4. . . . . . . . Annual Disposable Household Income. . . . . . .858 – Growth (%) 2. . . . . . . . . . . . . . . . . . . . . . . . Annual disposable household income grew by 6. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2012 . CAGR 08-12 (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . .6% in 2012. . . . . . . . . . . . . . . . . .3 7. . . . . . . . . . . . . . . . . .Consumer Income and Expenditure Annual disposable household income and consumer expenditure have had uneven growth over the past five years. . 289. . . . . . . . . . . . . 2010 . . . Thailand. . . . . . . . . . . . . . . . . . . . 2009 . . . .7 2. . . . . . . . . . . . CAGR 08-12 (%) . . . . . . . . . . Historic 2008-12 Consumer Expenditure per capita (THB) 2008 . . . . . . . . 2011 . .1 3. . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . Direct selling is expected to grow at a CAGR of 6. .1 billion. .661 – Growth (%) 3. . . 201 . . . . . . . compared to a higher growth rate in previous years. . . . . .. . . . . . . . .3 3. . . Historic 2008-12 Retail Value Sales (Billion THB) 2008 . . . . . .7% for the past five years. . .324 2. . . . . . . . .210 2. . . . . . . . . . . . CAGR 13-15 (%) . As a result. . . . . . . . . . . . . . . . . . . .8 3. 2011 . . . . Beauty and healthcare companies. . . .3% over the next three years. . . . .113 2. . . . . with a growth rate of 7. Total retail value sales. .2%. . and has affected their purchasing behavior in the past year. . Herbalife. . . . . . . . . . . retail traders who offer a good cost-value proposition have performed well in the past year. . The rising cost of living has made consumers increasingly cost-conscious. . . .576 2. . . . . . . . . .Retail Retail sales in Thailand grew at a lower rate in 2012. . . CAGR 08-12 (%) . . . . . .409 – Growth (%) 5. Forecast 2013-15 Retail Value Sales (Billion THB) 2013 . . continue to dominate the direct selling channel in Thailand. . . . . . . . . This trend is expected to continue in 2013 as inflation remained high in the first quarter of 2013. . . . . . . . . . . . . . . . 2. . . . . . . . . . . . . . . . . 2014 . . . Electronic appliances and healthcare product sales are expected to continue to grow faster than other consumer products. especially the lower income households. . . . 2. . . . 2009 . . . . . . . . 2012 . . . . . . Avon Cosmetics. . . . . . . . . . . . Thailand. . . . . . . . . . . .4 4. . The rising cost of living has made consumers increasingly cost-conscious. . . . . .5 3. . . . . . . . . . . . . Thailand. . leading to high annual growth. . . . . . . such as Amway. . . . . . . . . . . . .7 4. . . . . . . . . . . . . . . . . . . . .492 2. . . . . . . . . . . Direct selling companies typically employ consumers to sell their products and the opportunity for extra income attracts these consumers. . . . . . . . . . . . . . . . . 2010 . . . .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. . . . . . . . . . .6 5. . . . The direct selling sales value in 2012 is estimated to be THB 53. . . . . . . . . . . 2015 . .3 3. . . . . . . .0% over 2011. .1 3.2 Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209 Total retail value sales. . . . . . . . . . . . . . .044 2. . . Sales CAGR for the past five years was 4. etc. . . . . . . . . . . . Sales CAGR was 8. . . . . . . . . . . . . . .

. . . .8 8. . . . . . . . . . . Historic 2008-12 Direct Selling Sales (Billion THB) 2008 . . . . . . 37. . . . . . . . . . . CAGR 08-12 (%) . . . .Direct Selling sales value. . . . Growth is expected to pick up over the next three years to reach a market value of THB 5. . . . . . . . . . . . . . . . . . . . . . . . .0 6. . . . . . . . . . .33 45. . . . . . . . .8 Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209 202 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Thailand. . . . .0 6. . . . Historic 2008-12 Direct Selling Sales of Electronic Appliances (Million THB) 2008 . . . . . . . . . . . . . . . . . 2012 . . . . . . . . . . . . . . .30 59. . . . . . . . . . .9 10. . Direct Selling sales value of HCD. . .56 – Growth (%) 6. . . . . .7 Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209 Direct Selling sales value. . . . . . . . . . . . . . . . . . . . . . . . . .5 6. . . . . . . . . . .8% from THB 3. . . . .000 – Growth (%) 7. . . . . . . . . . . . . . 2010 . . . . . . . . . . .0 8. . . . . . . . . . . 2011 . . . . . . . . . 2. . . . . . . . . . . . . . . . . . . . . . . . 2015 . . . . . . . . . . . . 2011 . . . . .3 billion in 2011 to THB 4.64 53. . . .4 8. . . . 2010 . . . .310 4. . . . . . . . . . . . . . . . . . . . . CAGR 13-15 (%) . . Thailand. .581 2. . . .801 3. . .0 8. . . . . . . . . . . . . .96 63. .5 18. . . . .471 2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . This is largely due to a resurgence in consumer confidence after the floods in 2011 and aggressive expansion strategies by key players. . . .98 41. . .01 49. . .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. . . . 2009 . 2009 . . . . . . Thailand. . . .12 – Growth (%) 7. . . Forecast 2013-15 Direct Selling Sales (Billion THB) 2013 . . . . . . . 2012 . . . . . . .0 billion in 2012. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 20. . . . . . . . . . . . . . . . . . . . . . . . . . . 56. . . . . . . . . . . . . . . . .8 12. . . . . . . . . . . . . . . . . . . . 2014 . . . . . . . . . .3 7. . . . . . . . . . . . . . . . . . . . . . . . . CAGR 08-12 (%) . . . . . . .7 billion by 2015. . .3 4. . . . . . . . . . . .

where customers can order through online stores belonging to direct-selling companies. . 2015 . . . . . 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. this has helped to increase the overall market size for the segment. . . 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. . . . . . . .283 5. As direct selling companies already have a large workforce on the ground. . There has been a particularly high increase in mobile phone penetration. Thailand. 2014 . . . . . .595 5. . CAGR 13-15 (%) . . . . delivering pre-ordered goods (from online stores) to consumers will be easy. . . . . . . . . . . .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. . . . . . . . . . . . . . . . . . . . . . . . . leading to an increase in consumption of electronic items which were previously viewed as luxury goods. . 4. will be a trend in the future. . . . . . . . . . . . . . .3 11. . . . . . Since the low-and middle-income earners are a major target segment for direct-selling electronic appliance companies such as Singer. . . . . . . • 203 . . . . . . . . . . . .9 15. Forecast 2013-15 Direct Selling Sales of Electronic Appliances (Million THB) 2013 . . . . . . . . . . .Direct Selling sales value of HCD. . . . . . . . . . . . . . . .722 – Growth (%) 14.0 8. . . . . . . . . . .

.079 421 42 815 3. . The company mainly sells sewing machines. Collectively. Others. Malaysia. . Historic 2010-12 Rank Company 2010 2011 (million THB) 1 2 3 Singer . . . capital and human resource across the regional bloc.7% 8. The company is expected to continue its growth trend over the next two years. Myanmar. also sells products directly to consumers. . . . . Thailand. . . Competitive Landscape Singer has the highest market share (about 61. . . . . .7% in 2012. With revenue of THB 2. . .3% 20. . and a market share of about 9. Lux Royal . services. .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. .132 4.834 19. . though on a much smaller scale. . . . Mida Assets is the second largest player. . . . .• With the launch of the ASEAN Economic Community (AEC) in 2015. . . 2. Singapore.363 4. . . dealers from Myanmar. Mida Assets’ revenue grew at a slow rate of 1. water filters. this massive single market comprising Thailand. . Vietnam. . . . the 10 member countries of ASEAN are to eliminate trade tariffs among them and liberalize investment sectors.9 billion in 2012. Top three retailers by direct sales revenue. . . . Cambodia. Indonesia. enabling the free flow of goods. with estimated revenues of THB 470 million in 2012 from the sale of consumer durables and interest from hire purchase of consumer durables. it saw a growth of 23. . vending machines and home appliances such as refrigerators. washing machines. The company mainly sells electrical home appliances and electronic goods to the middle. .6% 29. from THB 463 million in 2011 to THB 470 million in 2012. provided by the above companies. Brunei and the Philippines will create a market of 600 million consumers for the electronic appliance industry.0%) among direct-selling electronic appliance companies in Thailand. . The company mainly sells vacuum cleaners. an increase in sales force and the introduction of new products and services.022 2. . washing machines and dryers.7%. . Lux Royal (Thailand) Co. air conditioners and microwave oven to these dealers. . Cambodia and Laos have purchased certain Singer products from its locations in Thailand situated near to the borders with these countries. 204 . . .8% over the previous year. . . . . . . . Laos. . such as real estate and hotel operations. Total . . .951 470 50 1.357 2.1% 5. For nearly 30 years. This growth is attributed to the company’s efforts to expand its grassroots customer base among both consumers and small traders/shops. .383 463 44 1. Mida . The company’s revenues are estimated at THB 50 million in 2012. due to Mida Assets’ higher focus on other aspects of its business.and low-income segments in Thailand.

. and other operation fees in aggregate can be charged at the maximum effective annual rate of 28. 9. . . . . . . . Consumer lending value increased at 8. Consumer borrowing had experienced a slump in 2009 due to political turmoil caused by unstable government and widespread protests in the country. . . . . . . with a CAGR of 8. . . . 1. . . . . . . . . . . . . 2011 .2% Singer. . . . . . . The growth in consumer lending value is expected to remain steady in the next three years to reach THB 2. . while the non-bank players have a small market share with most specializing in specific types of lending such as automobiles. . homes. . . boosted consumer borrowing significantly in 2010 and 2011. . .1 Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 209 205 . Thailand. . . . . . . . . consumer durables. Since 2005. . . .344 1. .695 1. . . . . . . hire purchase and consumer lending business are controlled by the Ministry of Finance. . . . 2012 . . . . . Also.2% from 2011 to 2012. . .0% Lux Royal. . . .384 1. . . . Consumer Lending. . . 2010 . . . . The growth in consumer lending has stabilized in 2012. . . . . . . . . . . . . . . . . . . etc.0% Mida. . . . .2 8. . . . . . . . . CAGR 08-12 (%) .Chart 5: Market Share of HCD direct sellers in Thailand. . . . . . . . . . . . . . .3 trillion by 2015. The majority share of the consumer lending market in Thailand is with the local banks. . . . . .550 1. . . . . . . . . 28. . . . The return in consumer confidence.0 9. . . . service fees. . . . . . 2009 . . . . . . . . . . . . Historic 2008-12 Gross Consumer Lending Value (Billion THB) 2008 . . . . . . . . . . . . . . . . . . 61. . . . . .4 8. . . . . . . . . . following the end of the political turmoil period. . . . .6 3. . . . .0%.8 trillion. 1. . . . . fines. . .0 12. . . . The interest rates. . . . by revenue Market Share (2012) Others. the Bank of Thailand issues notifications for the regulation of such businesses. . . .1% in the past five years. .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. . . . .834 – Growth (%) 8. .

The current growth trend is expected to continue in the next three years due to a return in consumer confidence. . . . . . . . Thailand. . . . . 1. Thailand. . . . . . . . . . . .6% of the overall consumer lending value. . . . . . . . . . . . . . . . . . . . . . . . . . . . . CAGR 13-15 (%) . . . . . . . . . . .147 2. . . . . . . 2010 . . . . . . .4 5. . 39 41 43 45 48 – Growth (%) 5. . . . . reaching a total lending value of THB 58 billion by 2015.Consumer Lending. Consumer Durables Lending. . . . The lending in this segment has seen steady growth in the past five years (CAGR 5. . . . . . . . 2012 . . . . 2014 . . . . . . . . . . . . . . . . . CAGR 13-15 (%) . . . . . . . . . . . . . . . 2015 . . . 2011 . . . . . . . . 2009 . . . . . which was mainly fueled by high growth in auto loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .984 2. . . . . . . .4 6. . . . .3 Source: Nielsen analysis of various sources as set out under ‘References’ on pages 208 and 200 Consumer Durables Lending. . . . . . . . . . 2015 . . . . . . . . . . . . . .1%). . . . . . . . . . .3%). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 4. . . CAGR 08-12 (%) .323 – Growth (%) 8. . . . .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 . . . . . . . . . . .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. . .7 5. . . . . . . . .3 5. . . . . . . . . . . . . . . . . . . . . . . . though the growth has been at a lower rate compared to the growth in overall consumer lending value (CAGR 8.9 4. . . Thailand. .9 7. . . . . 51 54 58 – Growth (%) 6. . estimated at THB 48 billion. . . . . . . . . . . . . . . . . . . . . . . . . Historic 2008-12 Gross Consumer Durables Lending Value (Billion THB) 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . .7 6. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2014 . . . . . . . . . . Forecast 2013-15 Gross Consumer Durables Lending Value (Billion THB) 2013 . . . . . . . . . . . . . . . . . . . .2 8. . . . . . . . . . Forecast 2013-15 Gross Consumer Lending Value (Billion THB) 2013 . . . . . . . . .

as well as by non-bank players who see the opportunity to lend to this segment. is dominated by Singer.0% to 70. has a gross lending value of THB 1.lending companies in the past three years. specifically. slightly higher than the 28.0% interest rate for personal loans. the second largest player. mobile phone. Singer charges an annual interest rate of more than 30. The strong economic recovery in 2012 (9. Income from personal loans includes interest received. handling fees and penalty fees. This increase was mainly due to high growth of 25. enacting new tax reforms designed to lower rates on middle-income earners and increasing the salary of civil servants. for buying electrical appliances.0% growth from 2011) has boosted consumer confidence. The Company’s revenue from installment loans was THB 624 million in 2012. Singer. such as terms of price.7 billion and has had significant growth of 28. Most consumer finance providers have been selective in loan approval by focusing mainly on quality consumers with good credit history. Among the non-banks. Singer Leasing classifies its customers in two categories – ‘Good borrowers’ who pay timely installments are allowed easy access to further credit. with a gross lending value of close to THB 20 billion in 2012 and growth of 8.400 member dealer stores and department stores such as The Mall. Singer Leasing uses a credit-analysis program and also analyzes borrowers’ records at the National Credit Bureau to check their credit worthiness. a large proportion of consumer lending is done by the commercial banks through personal loans. However. Aeon provides consumer loans through its more than 15. as a result of the increasing cautiousness following the credit crisis. Aeon Thana Sinsap (Thailand) is the top player. The growth trend is expected to continue in the coming years. • • Competitive Landscape In Thailand. Jusco. home decorative items.0% of which are purchased through installment plans (hire purchases). office equipment. they tend to offer competitive promotions. • There is an effort to reach the grassroots consumers by the government (through state-owned banks). Tesco Lotus. The company issues the AEON Member Card to customers with good payment records to receive quick and convenient loan services from the company. 207 . Singer’s subsidiary Singer Leasing oversees credit and debt collection. IT products.0% from 2011 to 2012.0%. This has led to an increase in the consumption of electronic items which were previously considered a form of luxury goods. lending towards consumer durables. in view of the additional services provided. etc. this has opened up opportunities to the hire purchase companies. to gain further market share.0% from THB 853 million in 2010.. MaxValu. credit cards and other forms of credit. which was an increase of 20. such as customer after-sales service and home delivery. which was an increase of 6.0% from 2011 to 2012. etc.0% of Singer’s overall revenue. services and payment options. Interest income from the hire purchase business accounts for about 30.9% from THB 516 million in 2011. leading to an increase in spending on consumer durables. due to consumers’ lower access to banks owing to the banks’ stringent screening criteria and consumers’ low credit worthiness (low income and assets). and ‘Risky borrowers’ with a history of delayed payments have to go through a strict evaluation process to be considered for credit. Singer has a large network through its direct-sales operations and is well known for its installment plans. Since the factory workers and low-to middle-income earners tend to rely on hire purchase. minimum payment fees. Aeon’s revenue from consumer durable installment loans was THB 908 million in 2011. The government of Thailand has focused on increasing household incomes by introducing a nation-wide 300 baht per day minimum wage policy. 60. Aeon and Easy Buy.0% in the past two years in income from lease-to-own installment plans for vending machines.

mainly due to changes in the company’s policy to strictly screen borrowers and vendors for quality and the launch of new products. . . it has a sizable hire purchase portfolio as well. . . .0%) comes from revolving loans to businesses. . . Top three consumer lending entities by gross lending value.4% from 2011 to 2012. . . . USL/Dacolence. Mida) Industry Reports Department of Census and Statistics – Sri Lanka Central Bank of Sri Lanka Bangladesh Bureau of Statistics (BBS) • • • • 208 .709 43. . The Company’s revenue from installment loans was THB 58. . .130 18. hypermarkets. .931 1. Softlogic. . . . although the third largest player.193 297 23. . . . Although most of Easy Buy’s business (99.0% from THB 95 million in 2010. BML. .520 19. Usha. . . and modern traders.4% -7. . The Installment Loan business is serviced through its more than 330 vendor shops which consist of specialty shops. .7% 5.200 5. Bajaj Electrical. . .757 254 26. .436 1. Abans.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. . . My One. . Historic 2010-2012 Rank Company 2010 2011 (million THB) 1 2 3 Aeon .4% 21.470 45. Thailand. . superstores. Browns. References • • • • • • • International Monetary Fund (IMF) World Bank Asian Development Bank CIA World Factbook Trade Interviews Trade associations Company annual reports and websites (Singer. department stores. Easy Buy operates under the “Umay+” brand and targets middle-and upper-income customers with regular income. Others. Total 17. . Walton. . . Easy Buy.278 48. CSD. Singer . Crompton Greaves. Easy Buy . Damro. which was a decrease of 38. . . . . . Aeon.3% 5. .911 1.373 241 25. Lux. . . . .Easy Buy. Metro.54 million in 2011. . has a much smaller gross lending value of THB 254 million in 2012 and growth of 5.

. . . . . . . . . . . . . .60 69. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2010 . . . . . .04 69. . . . . . . . . . . .619 Note: The forecast US$ figures are converted from LKR based on average annual historical exchange rate for 2012. . .65 74. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .064 110. . . . . . . . . . . . .945 113. . . . . . . . . . . . . . . . . . . . . . . . . . 209 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . India Ministry of Statistics and Programme Implementation.• • • • • • • • Central Bank of Bangladesh Pakistan Bureau of Statistics Bank of Pakistan State Bank of Pakistan Statistical Bulletin Mar-13 Central Statistical Organisation. . 67. . . .86 Note: The forecast US$ figures are converted from BDT based on average annual historical exchange rate for 2012. . 108. . . . . . . . . . . . . . . . . . 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2012 . . .565 127. . . . 2011 . . India National Statistical Office – Thailand Bank of Thailand Exchange Rates 1. . . . . . . . . . . . . . . . . 2. . US$ figures are converted from BDT based on average annual historical exchange rates as below: Bangladesh Currency (BDT per US$) 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . US$ figures are converted from LKR based on average annual historical exchange rates as below: Sri Lanka Currency (LKR per US$) 2008 . . . . . . . . . . . . . . . . . . .15 81. 2012 . . . . . . . . . . . . . . . . 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .334 114. . . . . . 2009 . . . . . . . . . . . . . .

. . . . . .08 2008 2009 2010 2011 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19 86. . . . . . .44 2008 2009 2010 2011 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29 31. . . . . . . . . . . US$ figures are converted from THB based on average annual historical exchange rates as below: Thailand Currency (THB per US$) 33. 4. . . . . . . . . . . . . . .49 31. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . For and on behalf of The Nielsen Company (Singapore) Pte Ltd 23 September 2013 Joan Koh Managing Director 210 . . . . . . . . . . . . . . . .41 81. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .67 53. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34 93. . . . . . . . . . . . . . . Note: The forecast US$ figures are converted from PKR based on average annual historical exchange rate for 2012. .3. . . . . . . . . . . . . . .71 85. . . . . . . . . . . . . . . . . . . . . . US$ figures are converted from INR based on average annual historical exchange rates as below: India Currency (INR per US$) 43. . . .51 48. . . . . . . . . . . . . . . . . . . . . . . . . .31 34. . . . . . . . US$ figures are converted from PKR based on average annual historical exchange rates as below: Pakistan Currency (PKR per US$) 70. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41 45. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5. .69 30. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40 2008 2009 2010 2011 2012 . . . . . . . . . . . . . . . . . . . . . . . .73 46. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Note: The forecast US$ figures are converted from THB based on average annual historical exchange rate for 2012. . . . . . . . . . . Note: The forecast US$ figures are converted from INR based on average annual historical exchange rate for 2012. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Hong Kong Chairman and Executive Director June 5. . . . NY 10549 USA 7/F. 49 September 23. . . The following table sets forth information regarding our Directors. Kowloon. . 49 Austin Road. . 50 2/F. Goodman . . 2013 Hui Choon Kit . . 66 September 23. . . . . 44 President. . . 2013 Tobias Josef Brown . . . Baskerville House 13 Duddell Street. Baskerville House 13 Duddell Street. . . . . 73 Independent NonExecutive Director June 5. 2013 211 . Hong Kong 2/F. . Date of appointment as Director Name Stephen H. 2013 Jeremy Paul Egerton Hobbins . . . . 2013 Gavin John Walker . .MANAGEMENT Directors Our Board of Directors is entrusted with the responsibility for our overall management and direction. Hong Kong June 5. . Suite 301-A Mt Kisco. 2013 Peter James O’Donnell . . 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 Laurent Levan . . . . Age Address Occupation 69 118 North Bedford Road. . . . 51 June 5. . . . Baskerville House 13 Duddell Street. . . . . . Hong Kong 438 Alexandra Road #21-00 Alexandra Point Singapore 119958 680 Upper Thomson Road Singapore 787103 4/F. . 46 Independent NonExecutive Director September 23. . . . Hong Kong 33/F Alexandra House 18 Chater Road Central. 2013 Malcolm John Matthews .

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.

221

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. Matthews’ immediate family was employed by Sewko (or Singer Asia) or any of its related corporations in any of the past three financial years.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.500 shares of Retail Holdings in October 2003 (all of which he exercised in May 2007. and have not. Matthews holds only 0. 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).00 to buy 1. significant payments or material services (which may include auditing. any organization to which the company or any of its subsidiaries made.500 shares). He had not been nominated as director by any shareholder of Retail Holdings. even after the Listing Date.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. instructions or wishes of the 10. Mr.The Nominating Committee notes that Guideline 2. the Board should also take into account the need for progressive refreshing of the Board. whether formal or informal. The Board should also explain why any such director should be considered independent. Matthews was an independent non-executive director of Retail Holdings.500 shares of Retail Holdings in January 2005. consulting and legal services). whether formal or informal. options at US$3.12 to buy 4. (a predecessor company to Retail Holdings) was then facing. or a director of.500 shares of Retail Holdings in October 2004 and options at US$1. In doing so. None of Mr. banking.” Having carried out a rigorous review. Other than approximately US$52. in the past financial year been.V. to act in accordance with the directions. Mr.0% shareholder in relation to the corporate affairs of the corporation. 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.49% of the Retail Holdings. (b) (c) (d) (e) (f) (g) (h) 222 .500 per year received from Retail Holdings as compensation for board services provided. US$1. 600 shares in Retail Holdings awarded to Mr.0% shareholder of or a partner in (with 10.0% or more stake). Mr Matthews will not be accustomed or under an obligation. a 10. instructions or wishes of Retail Holdings. options at.12 to buy 4. Matthews has confirmed that he and his family members are not. to act in accordance with the directions. 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. Mr. While Mr. acquiring 10. he was not accustomed or under an obligation. or an executive officer of. or from which the company or any of its subsidiaries received. Matthews and his immediate family members have not received any compensation from Sewko or Singer Asia for the current or immediate past financial year. and about US$50.

and the composition of the Board. bonuses. severance payments and other similar payments to members of the Board and key/senior executives. benefits in kind. including the Chief Executive Officer. determine each year whether awards will be made under each of our equity-based plans. 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. consider. review the ongoing appropriateness and relevance of our executive remuneration policy and other benefit programs. The Chairman of our Remuneration Committee is Malcolm Matthews. retirement payments. having taken into consideration the following: (a) (b) (c) the number of listed company directorships by each of our Independent Directors. our Independent Directors’ working experience and expertise in different areas of specialization. ex-gratia payments. review and approve the design of all option plans. gratuities. retirement rights. options. having regard to the executive remuneration policy for each of the companies within our Group.Nominating Committee’s view of our Independent Directors The Nominating Committee. including that of our chief executive officer and other key management executives (collectively. 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. allowances. all of whom must be non-executive and a majority of whom must be independent. Remuneration Committee Our internal policy requires the Remuneration Committee to have at least three members. Our Remuneration Committee comprises Tobias Brown. (b) (c) (d) (e) (f) 223 . severance packages and service contracts). the confirmations by our Independent Directors stating that they are each able to devote sufficient time and attention to the matters of the Company. Laurent Levan and Malcolm Matthews. consider and approve termination payments. payments. stock plans and/or other equity-based plans. (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. the principal commitments of our Independent Directors. including the Chairman. share-based incentives and awards. salaries. the “ Senior Management 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. 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. all of whom must be non-executive and a majority of whom must be independent. Our Strategy Committee currently comprises Jeremy Hobbins. approval or recommendation of any member who has a conflict of interest in the subject matter under consideration. financial services and other service offerings. (ii) new channels of distribution. reviewing and approving implementation strategies for the approved Strategic Initiatives and monitoring implementation of such strategies. approval or recommendation of any member who has a conflict of interest in the subject matter under consideration. and developing the framework for and reviewing the development and ongoing implementation of our strategic plan. review. Laurent Levan and Jamie O’Donnell. Our internal policy requires the Strategy Committee to have at least three members. The Chairman of our Strategy Committee is Laurent Levan. (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.(g) review and approve each award as well as the total proposed awards under each plan in accordance with the rules governing each plan. (iii) new markets (countries of operation). review succession plans for Senior Management Executive positions. approve the remuneration framework (including directors’ fees) for our non-executive Directors on the relevant boards of directors within our Group. 224 . approve and keep under review performance hurdles and/or fulfillment of performance hurdles for each of our equity-based plans. and (iv) other promotional activities (collectively “ Strategic Initiatives ”). Strategy Committee We have also established a Strategy Committee. and review with Senior Management Executives the development of our key executives and talented executives. including the Chairman.

Finance Vice President. . . Sri Lanka Hiran Asoka Pieris. Hong Kong Plot #39. . Name Stephen Goodman . Hong Kong A-26/4. Information Services Vice President. . 53 Gelmart Martin Gellecanao . . . . . Thailand 225 . 51 Vice President. . . . . . . . NY 10549 USA 7/F. 49 Hamim Rahmatullah . . . . . . Bangladesh Boonyong Tansakul . Sector 19 Korangi Industrial Area Karachi Pakistan 80 Nawam Maratha Colombo 2 Sri Lanka 80 Nawam Maratha Colombo 2 Sri Lanka 5B. 57 Vice President. . Baskerville House 13 Duddell Street. . . . . . Hong Kong 7/F. . . .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. . . . . Baskerville House 13 Duddell Street. 2nd Floor Mohan Cooperative Industrial Estate New Delhi-110044 India 7/F. 44 Kan Yat Cho Joe . . . 50 Vice President. . 47 Ajith Shirley Paranavitane . 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. . . . Baskerville House 13 Duddell Street. We have ten Executive Officers and the following table sets forth information regarding them. Chief Executive Officer and Executive Director of our Company Chief Financial Officer and Vice President. Age 69 Address 118 North Bedford Road Mt Kisco. . . . . . . . . Pakistan Syed Aleem Hussain . . . 48 Vice President. 47 Rajeev Bajaj . . . . Risk Management Vice President. . . . . . . . . . India Gavin Walker. .

he was the Head of Financial Services of Octopus Cards Limited. he has also served as Chief Financial Officer of Singer Asia. Chartered Accountants. from 1985 to 1986. He is a member of the Institute of Internal Auditors and an associate member of the Association of Certified Fraud Examiners. at Hallmark Cards Asia Limited. Since January 2009. Brand Trading (India) Private Limited and V. 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. University of Delhi in 1980 with a Bachelor of Commerce degree with honors. Since October 2010. Rajeev Bajaj is our Vice President. a developer and operator of the Octopus smartcard payment system. he was a Chartered Accountant with Thakur Vaidyanath Aiyar & Co. he was the General Manager. Mr. in the Audit and Special Projects departments. Between 1984 and 1985. He joined our Group in 1994 and has held a number of positions. 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 was the General Manager – Commercial and Company Secretary of Brand Trading (India) Private 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. Alternate Director and Chief Financial Officer. he has also served as Vice President. Gellecanao has been responsible for the overall management of our credit operations since January 2009 and its Internal Audit activities since October 2004. Between 1986 and 2005. 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. a member firm of Ernst and Young in the Philippines. Bajaj graduated from Shri Ram College of Commerce. General Manager. Risk Management of Singer Asia. Between 1998 and 2002. Singer Corporation Limited. Mr. Mr. United Kingdom. from 2005 to 2008. he has also served as Chief Executive Officer and Managing Director of Singer India. India. Singer Finance (Lanka) PLC. he was a Senior at KPMG. Consultants Ltd. He is a Fellow Member of the Institute of Chartered Accountants of India and the Institute of Company Secretaries of India. he was a Manager at Ernst & Young. from 2003 to 2010. and Finance Director. 226 . He previously held the positions of Director. including Location Controller to Senior Auditor and Manager of the Internal Audit Department of our Group in the United States. Mr. Asia. he held various positions in Singer India. Mr. Risk Management. he was a Junior Manager.. beginning in 1983 and left as an Audit Manager in 1994. Between 1992 and 1995. Hong Kong. Prior to joining Singer India. Between 1995 and 1998. He also serves as a Director of Singer Asean Trading Limited. BT India Limited. designated as the Finance Director.. Since September 2010.F. He has also been a Director of Singer Bangladesh since October 2010 and a member of its Audit Committee since July 2011.Experience of our Executive Officers Information on the key business and working experience of our Executive Officers (other than Mr. he held the position of Financial Controller or and/or Finance Manager with various corporations in Hong Kong. Further. including positions of General Manager – Finance and Company Secretary of Singer India at certain points in time. and from 1988 to 1992. He qualified as a Certified Public Accountant (Philippines) in November 1983 and as a Certified Internal Auditor (USA) in May 2003. Hong Kong. Kan graduated from the University of Birmingham. he worked with SGV & Co. Finance. Prior to joining our Company. Commercial and Controller of Singer India between 2005 and 2010. Gavin Walker. Gelmart Martin Gellecanao (“ Gelmart Gellecanao ”) is our Vice President. whose business and working experience are described above) is set out below: Kan Yat Cho Joe (“ Joe Kan ”) is our Vice President. Stephen Goodman and Mr. Finance in Steel Authority of India Limited. Prior to joining the Group.

Information Services of Singer Asia with overall responsibility of Information Technology (IT) needs for the Group. he has also served as Vice President. Holland. Mr. and the Country Manager in Imation (Thailand) Ltd. Hiran Asoka Pieris (“ Asoka Pieris ”) is our Vice-President. having first joined Singer Thailand in 1992. Bangladesh. 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. Ajith Shirley Paranavitane (“ Ajith Paranavitane ”) is our Vice President. he has also served as Chief Executive Officer of Singer Thailand. Marketing Services Manager. He joined Singer Pakistan Limited in August 1993 as a management trainee and has since held various positions including Product Manager. Pakistan. He previously held positions as Deputy Managing Director and Sales and Marketing Director of Singer Thailand. he worked with Philips Bangladesh Limited in its Consumer Electronic Division. Sales Manager (Wholesale). Since September 2012. Sales and Service) at Cyberdict Technology Ltd. an IT consulting firm. IT and Group Manager in Singer Sri Lanka. Director and Chief Operating Officer. Credit Marketing Manager. Mr. From 1987 to 1998. and Credit Director. he was a Senior Consultant in Trustek Inc. Senior Area Manager. between 1983 and 1987. Hamim Rahmatullah is our Vice President. Since July 2010. he has also served as a Director and Chief Executive Officer of Singer Sri Lanka. He graduated from the Institute of Business Administration. since 1988. Between 2003 and 2006. Pieris is an Associate Member of The Institute of Chartered Accountants of Sri Lanka and a Fellow of the Chartered Institute of Management Accountants. 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. has held various positions in Singer Bangladesh Limited. USA. Prior to that. he held various positions such as Systems Engineer. Boonyong Tansakul is our Vice President. he was a trainee and then a supervisor and manager at Ernst & Young (formerly known as Ernst & Whinney). 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. Mr. including Product Manager. Marketing Services Director. 227 . He has also held positions such as the Deputy Director and Director of IT of Singer Sri Lanka since 2000. he has also served as Director and Chief Executive Officer of Singer Pakistan. United Kingdom. Mr. He has been with our Group for 25 years and. Sri Lanka. Mr. Between 1985 and 1990. Philippines in 1992 with a Masters in Business Administration. In 1997. Hussain graduated from Karachi University in 1988 with a Bachelor of Commerce degree and from the University of East Manila.Syed Aleem Hussain is our Vice President. Since December 2009. He is also a Chartered IT Professional and Fellow of the British Computer Society. United Kingdom and a Chartered Global Management Accountant. Information Services. Tansakul graduated from the King Mongkut’s Institute of Technology in 1986 with a Bachelor of Science degree in Electrical Engineering. From 1985 to 1988. he held positions such as Manager. Programming Group Manager and Manager (Packaged Application) at Data Management Systems Ltd. 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. Thailand. University of Dhaka in 1985 with a Masters of Business Administration degree. Tansakul held positions as the General Manager (Marketing. Since February 2009. In 1999. Since January 2011. He also trained at Management Aids Limited from July 1984 to January 1985. Mr. 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. he has also served as Managing Director and Chief Executive Officer of Singer Bangladesh.

. . . . . . . . . . . . . . . . . Rajeev Bajaj . . . . . . . . . is a nominee director appointed by Retail Holdings. . . . . . . . . .0% of the shares in ReHo Limited. . . . . . . . Syed Aleem Hussain .14% direct shareholding in our Company as at the date of this offering document and is a Controlling Shareholder. . .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 ”. . . customers or suppliers or other person pursuant to which such Director or Executive Officer was appointed as a Director or as an Executive Officer. . . . . . . . 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 . . . . . . . . . . . .0% of the shares in UCL Asia Holdings VII Limited. . . 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. . . . . . . . . . . which has a 54. . Tobias Brown . . . . . . . . . which owns 100. 2013 are as follows: 2013 Estimated 2011 Directors Stephen Goodman . . . . . . . . . . . . . . . 2011 and 2012 and the estimated amount of compensation to be paid for the fiscal year ended December 31. . . . . . . . . . . . . . .000. . . . . . . . . . . . . . . . . . . . . . . which has a 41. . . . . . .P. . . . . Gelmart Gellecanao . . . . . . . . . . . . . . . . . Laurent Levan . . . . Compensation The compensation. . our Chairman and Executive Director. . Hui Choon Kit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . in remuneration bands of S$250. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Executive Officers and substantial shareholders. . Stephen Goodman. . . . . . . . . . . . . . . Family Relationships There are no family relationships among any of our Directors. . . . .10% direct shareholding in our Company as at the date of this offering document and is a Controlling Shareholder. Executive Officers Joe Kan . . none of our Directors or Executive Officers has any arrangement or understanding with any of our substantial shareholders. . Jeremy Hobbins . . . . . . Arrangements or Understandings Tobias Brown and Jamie O’Donnell. . . . . . . . . . . .. . . . . . . . . . Jamie O’Donnell . . Gavin Walker . . . . . . . . . . . Save for the foregoing. . . . . which owns 100. . . . . . . . . . . are nominee directors appointed by UCL Asia Partners. . . L. Malcolm Matthews . our Non-Independent Non-Executive Directors. . . . . . . . . . . . . . . . . . . . . . .

. . .001 and S$500. Please see section “ Business – Employees ”. . . . Not yet appointed to the Board of Directors of Sewko. . . Boonyong Tansakul . . . we have provided for certain amounts for pension. . . . . 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. . . . . . . pursuant to the policies of our Company. . Hamim Rahmatullah . . . . . . . . . . . . . . . . . . . . . . .001 and S$1 million. . . . . . . . . . . . . . . . . Except as set out above. . . . . . 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. . retirement or similar benefits for our employees. .000. . “ Band 4 ” refers to remuneration between the equivalent of S$750. . As at March 31. . . . . . “ Band 3 ” refers to remuneration between the equivalent of S$500. . . . and bonuses are expected to be paid on a discretionary basis.2011 Ajith Paranavitane . Asoka Pieris . . . . . . . 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. . . . . 2013. Notes: (1) (2) Remuneration paid by Retail Holdings.000.001 and S$750. . . . “ Band 2 ” refers to remuneration between the equivalent of S$250. . . . . . as at the date of this offering document.000. . . 229 . . . . Compensation includes benefits in kind and any deferred compensation accrued for the relevant fiscal year and payable at a later date.

and (iv) recommendations for modifications to the Scheme. to retain key employees whose contributions are important to our long-term growth and prosperity. These rules comply with the requirements set out in the Listing Manual and the Singapore Companies Act. (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. this maximum limit of 5. among other things.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. Our Remuneration Committee will determine. the following: (i) (ii) the persons to be granted Options.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. The aggregate number of shares to be released under the Scheme (the “ Scheme Shares ”) will be up to 5. (ii) (iii) to attain harmonious employer/employee relations and to strengthen working relationships with our close business associates. As at the Latest Practicable Date. 2013. the number of Shares which are the subject of the Options to be granted. (iii) the exercise price of the Options to be granted. 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. 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 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. 230 . Administration of the Scheme Our Remuneration Committee will be designated as the committee responsible for the administration of the Scheme. no Options have been granted under the Scheme. The rules of our Scheme are set out in Appendix G of this offering document. 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. As the Scheme is valid for a period of five years.0% of our Company’s total issued share capital.

which will take into consideration criteria such as rank. 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 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. Implementing our Scheme with the maximum amount of shares not exceeding 5. 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. This 5. when added to the number of Shares issued and/or issuable in respect of (i) all Options granted under the Scheme. the aggregate number of Shares in respect of which Options may be offered will be determined at the discretion of our Remuneration Committee.0% of the total issued share capital of our Company (excluding treasury shares) on the day immediately preceding the date of the relevant grant. performance share or restricted share plan implemented by our Company and for the time being in force. 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. taking into account the share capital base of our Company.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. and (ii) all awards granted under any share option. Notwithstanding the expiry or termination of the Scheme. must not exceed 5. the number of Shares to be issued pursuant to Options granted under the Scheme must not exceed 1. with the portion of our issued share capital set aside for the Scheme.0% of the total issued share capital of our Company will enable us to maintain flexibility and remain competitive in the industry.0% size is intended to accommodate the potential pool of participants arising from our base of eligible participants. past performance and potential for future development of the Participant. Maximum Entitlements of the Scheme Subject to the size of our Scheme as described above and any requirements of the SGX-ST.In compliance with the requirements of the Listing Manual. Size of the Scheme The aggregate number of Shares which may be issued pursuant to Options granted under the Scheme. The following is a summary of the rules of our Scheme. We also hope that. any Options granted to Participants prior to such expiry or termination will continue to remain valid. 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. share incentive. 231 . We are of the view that the size of the Scheme is reasonable. the contributions by our employees and Directors and the potential number of employees as our business expands.

(b) The Participant must not be an undischarged bankrupt and must not have entered into a composition with his creditors. in the event that an announcement on any matter of an exceptional nature involving unpublished price sensitive information is imminent. However. in whole or in part ( provided that an Option may be exercised in part only in respect of 1. if not accepted by the closing date (which will not exceed 30 days from the date of the offer). 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. Acceptance of Options Options are personal to the Participant to whom they are granted and must not be transferred. contributed or will contribute to the success and development 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. Each Option granted with the exercise price set at a discount to Market Price is only exercisable.00. and such person must: (a) in the case of Executive Directors. 232 . Non-Executive Directors (including Independent Directors) and Employees of our Group.000 Shares or any multiples thereof).Eligibility Under the rules of the Scheme. 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. and in the case of directors and employees of our associated companies. the Remuneration Committee may only grant Options on or after the second Market Day from the date on which the announcement is released. in whole or in part ( provided that an Option may be exercised in part only in respect of 1. Grant of Options The Remuneration Committee may grant Options at any time during the period when our Scheme is in force. will lapse and will be null and void and of no effect. 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. 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. charged. Executive Directors. 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. the Participant must pay to us a consideration of S$1. Upon acceptance of the offer. All offers made to Participants. in the opinion of the Remuneration Committee. if any. Exercise of Options Each Option granted with the exercise price set at Market Price is only exercisable.000 Shares or any multiples thereof).

the exercise price of the Options granted will be determined by our Remuneration Committee. In determining which Participant should be granted Options and the quantum of the discount. and the quantum of the discount. Lapse of Options (i) Unless the Executive Director. Discounted Options would be perceived in a more positive light by the Participants. for any reason whatsoever. the extent of the discount may vary from one case to another. (iii) the contribution of the Participant to our success and development. an Option will. upon the Participant ceasing to be in our employment. 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 (b) (c) 233 .Exercise Price Under our Scheme. The flexibility to grant Discounted Options is also intended to cater to situations where the stock market performance has overrun the general market conditions. as determined by the Remuneration Committee in its absolute discretion. 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. Non-Executive Director or Independent Director is terminated due to a change in control of the Board of Directors. rounded up to the nearest whole cent in the event of fractional prices) and. to the extent that it is unexercised. subject to a maximum discount of 20.0% of the Market Price of the Shares. (ii) the performance of the individual Participant. as only employees who have made significant contributions to the success and development of our Group would be granted Discounted Options. the par value will be taken to be the exercise price.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. including factors such as (i) our performance. or in the event of misconduct on the part of the Participant. the Remuneration Committee is at liberty to take into consideration such criteria as they deem fit. 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. if the exercise price so determined is less than the par value of the Share. in its absolute discretion. encouraging them to work hard and produce results in order to be offered Discounted Options. Our Remuneration Committee may grant Options to the Participants at up to a 20. The Remuneration Committee will determine on a case-by-case basis whether a discount will be given. or subject to paragraph (b). and (iv) the prevailing market conditions. 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.

provided that written confirmation is given by the auditors that such adjustment is fair and reasonable. For this purpose. 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. 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. the record date of which is prior to the date on which the Scheme Shares are allotted and issued.. allotments or other distributions. Alteration of Capital In the event of a capitalization issue and other circumstances (e. Non-Executive Director or Independent Director is terminated due to a change in control of the Board. rights issue. rights. 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. 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. subject to all other relevant approvals which may be required and. at its sole and absolute discretion. “ record date ” means the date as at the close of business on which shareholders must be registered in order to participate in any dividend. Any adjustment will take effect upon such written notification being given. 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. 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. rights. no further Options will be offered by our Company thereunder. will be adjusted by the Remuneration Committee in such manner as it may determine to be appropriate. Upon any such adjustment being made. capital reduction. allotments or other distributions. (e) (ii) Where a Participant who is an Executive Director. as the case may be. However. and/or (ii) (iii) the class and/or number of Scheme Shares in respect of which additional Options may be granted to Participants. and/or the class and/or number of Scheme Shares comprised in the Option to the extent unexercised and the rights attached thereto. Our Scheme may also be terminated at any time by our Remuneration Committee or by resolution of our Shareholders at a general meeting. if our Scheme is so terminated. 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.g.(d) in the event that the Remuneration Committee. 234 .

they play a valuable role in furthering our business interests by contributing their experience and expertise. 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. the Remuneration Committee will take into consideration. and to motivate existing Non-Executive Directors to take extra efforts to promote our interests. 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. the number of Shares will be recalculated and reduced accordingly). where it considers relevant. No alteration may be made to the particular rules of the Scheme to the advantage of the holders of the Options. among other things.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. 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. In order to minimize any potential conflict of interests and to not compromise the independence of the Non-Executive Directors. subject to the prior approval of SGX-ST and such other regulatory authorities as may be necessary. The Remuneration Committee may also. In addition. For instance. the contributions made to our growth. However. 235 . 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. in the event that any conflicts of interest arise in any matter to be decided by the Board. the Non-Executive Directors may bring strategic or other value to our Company which may be difficult to quantify in monetary terms. 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. such as economic conditions and our Company’s performance. In deciding whether to grant Options to the Non-Executive Directors. take into account other factors. development and success of a particular Non-Executive Director. 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. our Company intends to grant such number of Options under the Scheme to Non-Executive Directors that will not compromise their independence or judgment. our Company will procure that the relevant Non-Executive Director abstains from voting on such matter at the Board meeting. except with the prior approval of Shareholders in a general meeting.

Where such Options are granted at a consideration which is less than their fair value. Cost of Options Granted under the Scheme to our Company Any Option granted under the Scheme will have a fair value. Rationale for Participation of Controlling Shareholders and their Associates in the Scheme An Executive Director. and made and who continue to make significant contributions to our long-term growth. there will be a cost to our Company. and (in the case of employees who are Directors) to refrain from making any recommendation on. the resolutions in relation to the Scheme.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. The relevant employee is required to abstain from voting on. We believe that the grant of Options to directors and employees of our associated companies will enable us to attract. 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. 236 . Our view is that all deserving and eligible participants should be motivated. It is in our interest to incentivize outstanding directors and employees who have contributed to our growth to continue to remain with us. The objectives of the Scheme apply equally to our directors and employees who are Controlling Shareholders or their respective associates. the amount of which will depend on whether the Options are granted at the Market Price or at a discount. Although our Controlling Shareholders and their respective Associates have or may already have shareholding interest in our Company. with our other director and employees. 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. to participate in and benefit from this system of remuneration. the number of Options exercised and the exercise price (as well as any applicable discounts) will be disclosed in our annual reports. 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. regardless of whether they are Controlling Shareholders or their respective Associates. Disclosures in Annual Reports Details of the number of Options granted pursuant to the Scheme. 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 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.

The cost to our Company in granting an Option would vary depending on the number of Options granted pursuant to the Scheme. accordingly. 237 . (ii) and (iii) above would materialize only upon the exercise of the relevant Options. it would have to be charged to our Company’s profit and loss account over the vesting period. (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. As the monetary cost of granting Options with a discounted exercise price is borne by our Company. It should be noted that the financial effects discussed in (i). 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. The requirement to recognize an expense in respect of options granted to employees is set out in IFRS 2. a consideration that is less than the fair value of the Option). in the long term. retaining and motivating directors and employees. Such reduction of the exercise proceeds would represent monetary cost to our Company. If such costs were to be recognized in accordance with IFRS 2. yield greater returns for us and our shareholders. The issuance of new Shares under the Scheme will have a dilutive impact on our combined earnings per Share. 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. Insofar as such Options are granted at a consideration that is less than their fair value at the time of grant. each participant to whom an Option is offered pays a nominal consideration of S$1. Under the Scheme. We believe these costs are justified by the effect the Scheme would have in attracting. 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. whether these Options are granted at the Market Price or at a discount and the validity period of the Options.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. Such reduction would. a greater discount and a longer validity period for an Option will result in a higher potential cost to our Company. 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. Generally. recruiting. there will be a cost to our Company (in that we will receive from the participant upon the grant of the Option to him. result in the dilution of our earnings per Share. 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. However. 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.00 to our Company on his acceptance of the offer of the Option. which could.

our shareholders approved. (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. 2013 under the name of “Sewko Holdings Limited”. our issued and paid-up ordinary share capital was US$10. 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. debentures or other instruments convertible into Shares. and (2) (B) 238 . including but not limited to the creation and issue of (as well as adjustments to) warrants. (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. and/or make or grant offers.500 comprising 420.000 Shares. bonus or otherwise. agreements or options (collectively. 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. new Shares arising from exercising share options or vesting of share awards outstanding or subsisting at the time of the passing of the Resolutions. 2013. 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. As at the date of incorporation. Pursuant to written resolutions dated September 23.0% of the issued share capital of our Company excluding treasury shares (as calculated in accordance with sub-paragraph (B) below).0% of the issued share capital of our Company excluding treasury shares (as calculated in accordance with sub-paragraph (B) below). among other things. “ Instruments ”) that might or would require Shares to be issued. 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. 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. 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. our Company has issued ONE nil paid share of a par value of US$0.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 24.000025. that authority be given to the Directors to: (i) (ii) issue Shares whether by way of rights.000. As at the Latest Practicable Date and the date of this offering document.

(3) in exercising the authority conferred by such authority. whichever is the earlier. 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.(C) any subsequent bonus issue. on such terms and conditions and with such rights or restrictions as they may think fit to impose. and a substantial shareholder is a person who holds a substantial shareholding.0% of the total issued share capital of our Company on the day immediately preceding the date of the relevant grant. 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. 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. acquire or dispose of. in such form and containing such information as the Authority may prescribe. when added to the number of Shares issued and/or issuable in respect of all Options granted under the Scheme. 239 . 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. (4) (c) that authority be given to the Directors to issue Shares and offer the same to such persons. Substantial Shareholding Disclosure Under the SFA. on his behalf. in connection with the Offering and the admission of our Company to the Official List of the SGX-ST. provided that the aggregate number of Shares which may be issued pursuant to Options granted under the Scheme. 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. must not exceed 5. and. The SFA requires a person who is or (if he has ceased to be one) has been a substantial shareholder in our Company. consolidation or subdivision of shares in the capital of our Company. being a non Singapore-incorporated corporation with a primary listing on the Main Board of the SGX-ST. in relation to a substantial shareholder in the Company. voting Shares or an interest or interests in voting Shares in our Company. 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. the beneficial owner must take reasonable steps to ensure that the legal owner 1 “Percentage level”. 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. rounding that figure down to the next whole number. or those shares. (b) Where a person (the “ beneficial owner ”) authorizes another person (the “ legal owner ”) to hold.0% of the total votes (excluding treasury shares) attached to all the voting shares in that company. 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. if it is not a whole number. is not less than 5.

. . .14 – – – – – – – – – – – – – – – Jamie O’Donnell(2) . . .10 (1) – – [●] – [●] – – [●] – [●] [●] [●] – [●] – [●] Retail Holdings N. Jeremy Hobbins . . . . in any case. . . . .200.14 UCL Asia Partners. – – 227. .14 – 172.000 54. Public . . . .000 – – – – – – – – 227.14 – 172. . he must give to the second-mentioned person a notice of any acquisition or disposal of any of those Shares effected by him. . as soon as practicable and.000 41. . 227. . . . . . 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. . . . Percentage ownership is based on 420.000 100. . .10 4. in the form as the Authority may prescribe. being a shareholder who is known by us to beneficially own 5. . .0 240 . .000 54. . . – 172. .14 UCL Asia GP.76 – – – [●] – – – – – – – [●] – [●] – – – – – – – 100. 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.800. . . Total Shares . Hui Choon Kit .000. . being voting Shares in which another person has an interest.000 41. . . . . where a person holds voting Shares in our Company. New investors in the Offering . 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) % % % % % % . .800. 420. .000. . . . . Ltd (2) . there are no other relationships among our substantial shareholders. . L. .200. . In addition. . . UCL Asia Investments.200. . . . . .0 [●] – [●] [●] – – – – – [●] – [●] [●] – – – – – . . . . . . no later than two business days after acquiring or disposing of the Shares.V.P. . . .000 54. . . . Malcolm Matthews . . Directors: Stephen Goodman(3) . .0% or more of our issued Shares. . .800. . Ownership Structure The table below sets out the shareholdings of each substantial shareholder. .10 UCL Asia Holdings VII Limited(2) . . . .800. . – – – – – [●] – – – [●] – – – – – – – – – – – [●] – – – [●] – – – – [●] [●] [●] – [●] [●] [●] – 172. . . . 172. . . Gavin Walker Tobias Brown (2) – – – – [●] [●] – – [●] [●] – – – 20.000 41.000. Laurent Levan . . . . . All Shares owned by our substantial shareholders. . outstanding as at the date of this offering document and immediately after completion of the Offering.(2) . L.0 [●] – [●] [●] – – – – – [●] – [●] [●] – – – – – – [●] – – – – – – – [●] – [●] – – – – – – – 100. . .14 – 172. . . . .800. . .000 41. . . . Save as disclosed below. . .800. . . .000 and [ ● ] Shares respectively. . .(2)(1) . as at the date of this offering document and immediately after completion of the Offering. . in any case. .notifies him as soon as practicable and.P. . .000 41.000 41. . . . .

. Goodman’s child and grandchildren. . . .4% which is held by three trusts (the Meeting House Trust (5.000025 each into One Share of a par value of US$0.000025 each additionally issued nil paid on August 23. . . 2013 . .Notes: (1) As at the date of this offering document. .016.P. . . .000025 each additionally issued nil paid on July 10.V. . .4%) and Princess Trust M (1. .000025 issued nil paid on incorporation on May 24. with the remaining 1% owned (in equal proportions) by Tobias Brown and Jamie O’Donnell. . .) are deemed to have an interest in the Shares held by UCL Asia Holdings VII Limited and as equal shareholders of UCL Asia GP.66 1. .016. 2013 . .10% of the total issued Shares of our Company and is wholly-owned by Retail Holdings. . . . . Two of our Directors. . It is a publicly traded company in the United States on the Pink Sheets quotation service. . . . . Stephen Goodman has a direct shareholding of 16. L. . Goodman thus has an interest (direct and deemed) in 25. Goodman’s spouse is the trustee and for which the beneficiaries are Mr. . . . . . Stephen Goodman is deemed to have an interest in the Shares held by ReHo Limited. 1. . . . . . and its general partner (UCL Asia GP. . . . .904 Shares of a par value of US$0. Mr.666 nil paid Shares of a par value of US$0.166.9% in Retail Holdings and is also deemed interested in an additional shareholding of 8. . 2013 . Resultant Issued Share Capital (US$) -0- Share Capital One Share of a par value of US$0. . . . UCL Asia Holdings VII Limited has a direct interest in 41. . . .P.500. .01 each additionally issued fully paid on September 18. Jamie O’Donnell and Tobias Brown have the authority to make investment decisions on behalf of UCL Asia Partners. . 2013 . L. formerly known as Singer N. . Jamie O’Donnell and Tobias Brown. .430 Shares of a par value of US$0. which owns 99% of UCL Asia GP.665 Shares of a par value of US$0. . . As at the date of this offering document. . .01 each on August 23.000 10.P. .6%). which is the General Partner of and manages UCL Asia Partners. Retail Holdings is interested in ReHo Limited. Curaçao) in December 1999. 2013 (see Note 1 below) . As at the date of this offering document. L.666 -0- 1. . . . .3% of the shares of Retail Holdings.00 241 . .P. For the purposes of Section 4 of the SFA. 4. and our Directors. are the equal shareholders of UCL Asia Investments. .016. L. . 2013 (see details in “Options exercised by Gavin Walker” below) . . and are thus deemed to have an interest in the Shares held by UCL Asia Holdings VII Limited. . . .016.4%)) for which Mr. . . Our Director.666.01 each additionally issued fully paid on September 18. 405. Resultant Number of Shares 1 1. Ltd. (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. Princess Trust E (1. . . .021.734 Shares of a par value of US$0.10% of the total issued Shares of our Company and is wholly-owned by Retail Holdings. . . . . 2013 (see details in “Options exercised by Gavin Walker” below) . . UCL Asia Partners. . For the purposes of Section 4 of the SFA. . . 1.096 10.666 10. . . . . . . For the purposes of Section 4 of the SFA. . . Consolidation of every 400 Shares of a par value of US$0. L. .14% of the total issued Shares of our Company and is wholly-owned by UCL Asia Partners. . . . . . 2013 are set out in the table below. . . . . . . . . . . .016. . . . . was formed as a new corporate entity in the Netherlands Antilles (now. . ReHo Limited has a direct interest in 54. . to acquire ownership of several operating companies that were part of the old Singer group. .P. .666 -0- 406. ReHo Limited has a direct interest in 54. . our Director. .400 -0- 1. .649.050. .01 each credited as fully paid on September 16.P. .. . 28.210. . . . . . .96 1. . . . L. Retail Holdings. .

Goodman’s spouse is the trustee (and for which the beneficiaries are Mr. and two of our Directors.Share Capital Subdivision of One Share of a par value of US$0. with the remaining 1% owned (in equal proportions) by Tobias Brown and Jamie O’Donnell. Jamie O’Donnell and Tobias Brown. 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. which own 54. .01 each into 400 Shares of a par value of US$0.. 2013 at an option price of US$64.334 common shares in Singer Asia were issued to him pursuant to such exercise.000025 each on September 18. 2013. 242 .9%) and Malcolm Matthews (0. Chief Executive Officer and Executive Director.000 10. entered into a stock option agreement with Singer Asia. Walker an option in respect of 50. are equal shareholders of UCL Asia Investments. L. 2005. there were no significant changes in the percentage ownership of our Company held by our Directors and substantial shareholders since the date of incorporation and up to the Latest Practicable Date. The shareholders of Retail Holdings in turn include two of our Directors.4% and other shareholders own the balance of the shares of Retail Holdings (1).50 per share and 33. result in a change of control of our Company. The ordinary shares of UCL Asia Holdings VII Limited are held by UCL Asia Partners.P. our President.49%).000 shares in the capital of Singer Asia. Save as discussed above and in “ Business – History ”. Change of Control of our Company We are not aware of any arrangements that may.334 shares in the capital of the Company. which owns 99% of UCL Asia GP. . our Company acquired the 33. (100. at a subsequent date. The ordinary shares of ReHo Limited are owned by Retail Holdings (100. Gavin Walker. the General Partner of UCL Asia Partners.0%).10% and 41. Mr. respectively. to him on the same date.P. Goodman’s child and grandchildren) own an additional 8. Options exercised by Gavin Walker On August 15. Resultant Number of Shares Resultant Issued Share Capital (US$) 420. wherein Singer Asia agreed to grant Mr. Walker exercised all of his options on September 18. On September 18. Ltd. credited as fully paid.500. . . L.00 Note 1: the nil paid shares were credited as fully paid on September 16. 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. Control of our Company As at the date of this offering document.P. L. 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. we are controlled (as such term is defined in the Listing Manual) by ReHo Limited and UCL Asia Holdings VII Limited. of the total number of issued Shares of our Company. Three trusts for which Mr.0%). The option terminates upon the earlier of August 15. 2013 .000.14%. Stephen Goodman (16.334 common shares in Singer Asia held by Gavin Walker in consideration for allotting and issuing 33.

. . by any other person or government and there is no known arrangement. nor does it have any other material continuing relationship with. to the best of the knowledge of our Directors. . neither of the Vendors hold any position or office in. . 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 . . apart from its shareholdings in our Company. result in a change in the control of our Company. 243 . registered company and its shareholders do not have a filing obligation even if any of its shareholders own more than 5. . our Company is not directly or indirectly owned or controlled. . Retail Holdings is not a U. . at a subsequent date. . . We do not have sufficient data to accurately estimate the number of outstanding Shares held by residents of the U. of Shares Offered [●] [●] Share Capital before the Offering [●] [●] Share Capital after the Offering [●] [●] Save as disclosed in “Management – Arrangements or Understandings ”. No. our Group. . Retail Holdings.0% of the shares of Retail Holdings. the operations of which may. .S. are quoted on the Pink Sheets quotation service under the symbol “RHDGF”. UCL Asia Holdings VII Limited . . . . .Save as disclosed in this offering document.S. Note: (1) Shares of our Controlling Shareholder. whether severally or jointly. . .

“ 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. or an associate of any such director. 2013 until the Latest Practicable Date. as the case may be. “ our Group ” means: (a) (b) our Company. chief executive officer or controlling shareholder. We have entered into certain other transactions with our interested persons which are material in the context of the Offering. “ control ”. 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. chief executive officer or Controlling Shareholder of our Company.INTERESTED PERSON TRANSACTIONS AND CONFLICTS OF INTERESTS For purposes of this section.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. unless the context specifically requires the application of the definitions in one or the other. In line with the rules set out in Chapter 9 of the Listing Manual. 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. 244 . the following definitions will apply: 1. Certain terms such as “ associate ”. In general. 2010. there are no interested person transactions that are material in the context of the Offering for the last three fiscal years ended December 31. Save as otherwise provided in this section. 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. (c) 2. investors. 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. “ 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. 2011 and 2012 and for the period from January 1. upon subscription and/or purchase of the Offering Shares. Save as disclosed in these sections. 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. 3. “ interested person ” means: (a) (b) a director. a subsidiary of our Company that is not listed on the SGX-ST or any approved exchange. a transaction of less than S$100.

There are no fees paid by the parties to each other for the shared audit arrangement. the aggregate amounts paid by Singer Asia alone under the Audit Agreement were US$173. such as directors and officers liability insurance. 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. Singer Asia and Retail Holdings agreed to share the audit fees and expenses charged by KPMG Thailand in the proportion of 80. are as follows: Shared Insurance Services Our wholly-owned subsidiary. US$57. The Insurance Agreements were entered into on normal commercial terms and on an arm’s length basis. As at December 31. This percentage was based on what KPMG Thailand would have charged Singer Asia and Retail Holdings had they engaged KPMG Thailand separately. There are no fees paid by the parties to each other for the shared audit arrangement. The Insurance Agreements will expire on various dates starting from July 30. US$167. Retail Holdings. Pursuant to the Audit Agreement.985. foreign product liability insurance. and our controlling shareholder. It is therefore cost effective and also efficient to appoint the same auditor for both Retail Holdings and Singer Asia.759. for the past three fiscal years ended December 31. Each party is expected to enter into its own separate agreement after the expiry of the insurance agreement. for the past three fiscal years ended December 31. Singer Asia. Singer Asia and our controlling shareholder.034. 2013 until the Latest Practicable Date. our wholly-owned subsidiary. 2013 financial results. 2013 until the Latest Practicable Date. 2013 through to January 31.0% of Singer Asia and consolidates Singer Asia in its financial statements.874. and travel and accident insurance. 2010. respectively. jointly engaged KPMG Phoomchai Audit Limited (“ KPMG Thailand ”) to audit their financial statements (the “ Audit Agreement ”).430 and US$ nil. are as follows: Shared Audit Services Starting in 2003. US$55.697. 2011 and 2012 and the Latest Practicable Date. respectively. 2011 and 2012 and the Latest Practicable Date. 2010.0% and 20.653 and US$26. 2011 and 2012 and for the period from January 1. In the event that such interested person transactions require the approval 245 . 2010. US$172. The Audit Agreement was entered into on normal commercial terms and on an arm’s length basis. entered jointly into several insurance arrangements (the “ Insurance Agreements ”).Past Interested Person Transactions Details of the past transactions between our Group and interested persons which are material in the context of the Offering. 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. The Audit Agreement was terminated with effect from the June 30. Retail Holdings. 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. Retail Holdings holds more than 50. 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. As at December 31. kidnap and ransom insurance. 2014. the aggregate amounts paid by Singer Asia alone under the Insurance Agreements were US$39. and each party will enter into its own separate audit agreement with KPMG. 2010. 2011 and 2012 and for the period from January 1.0% respectively.

he will abstain from reviewing that particular transaction. We will also endeavor to comply with the recommendations set out in the Code of Corporate Governance.0% but below 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. In the event that such interested person transactions require the approval of shareholders. The annual internal audit plan will incorporate a review of all interested person transactions entered into. additional information may be required to be presented to shareholders and an independent financial advisor may be appointed for an opinion. 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. The Audit Committee will review all interested person transactions to ensure that the prevailing rules and regulations of the SGX-ST (in particular. In addition. Additionally.of our Board and the Audit Committee.0% of the value of our Company’s net tangible assets will be subject to the review and prior approval of the Audit Committee. and the Audit Committee may. including those required by prevailing legislation. 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. as it deems fit. on which they are entered into). 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. 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. The Audit Committee will also ensure that all disclosure. including the obtaining of valuations from independent professional valuers. All relevant non-quantitative factors will also be taken into account.0% of the value of our Company’s net tangible assets will be subject to review by the Audit Committee at regular intervals. the Listing Manual and relevant accounting standards. 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. We will also disclose the aggregate value of interested person transactions conducted during the current fiscal year in our annual report. Such review includes the examination of the transaction and its supporting documents or such other data deemed necessary by our Audit Committee.000 in value but below 3. a register will be maintained to record all interested person transactions (incorporating the basis. 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. Transactions falling within the above categories. if any. In the event that a member of the Audit Committee is interested in any interested person transaction. 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. relevant information will be submitted to the Board or the Audit Committee for review. approval and other requirements on interested person transactions. request advice on the transaction from independent sources or advisors. Chapter 9 of the Listing Manual) are complied with. 246 . amount and nature. are complied with.

whether formal or informal. L. ReHo Limited and UCL Asia Holdings VII Limited. L.10% direct shareholding in our Company. has majority control of the board seats in our Company. which owns 100. he was not accustomed or under an obligation. which has a 41. Malcolm Matthews has resigned from his directorship since July 2013. L. used to be an Independent Non-Executive Director of Retail Holdings. to act in accordance with the directions. Neither Retail Holdings nor UCL Asia Partners.P. Our management team is independent and unrelated to Retail Holdings and UCL Asia Partners. In addition. As at the date of this offering document. such nominees appointed by UCL Asia Partners. Retail Holdings and UCL Asia Partners.14% direct shareholding in our Company and is a Controlling Shareholder. Tobias Brown and Jamie O’Donnell.. currently do not have investments in other entities which are in similar industries in which we operate.P.P. the Company will put in place additional measures and safeguards to mitigate the conflicts of interests. instructions or wishes of Retail Holdings. our Non-Independent Non-Executive Directors. 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. L. confirm that they will notify the Board of Directors of any acquisition by UCL Asia Partners. Mitigation We believe that any potential conflicts of interests are addressed as follows: • With respect to Retail Holdings. which is a Controlling Shareholder of our Company. neither Retail Holdings nor UCL Asia Partners. L.P.P. will not participate in any proceedings of our Board of Directors. is to acquire majority control of the board of the Company.P. we do not see any potential conflicts of interests which may arise from the interests of the Controlling Shareholders. our Independent Non-Executive Director. As such. L.P. will not be participating in our day-to-day management and will only hold non-executive functions on our Company’s board.P.Potential Conflicts of Interests Our Controlling Shareholders. and their respective associates operate separately and distinctly from our Board of Directors. being nominees appointed by UCL Asia Partners. Except for Stephen Goodman (being a nominee appointed by Retail Holdings). our Independent Directors will review whether our current measures and safeguards for addressing conflicts of interests are sufficient. while he was an independent non-executive director. is a nominee director appointed by Retail Holdings.P. L.0% of the shares in ReHo Limited. L. and • • • • • 247 . In the event that either Retail Holdings or UCL Asia Partners. L.. The respective board of directors of Retail Holdings and UCL Asia Partners. and if these are not sufficient. are nominee directors appointed by UCL Asia Partners. which owns 100.0% of the shares in UCL Asia Holdings VII Limited. Upon such notification. which has a 54. and is a Controlling Shareholder. L. our Chairman and Executive Director. intends to gain majority control over the board seats in the Company. Certain of Our Directors Malcolm Matthews. Tobias Brown and Jamie O’Donnell.P. Stephen Goodman.

or our Company ceases to be listed on the Main Board of the SGX-ST. Our Directors have a duty to disclose their interests in respect of any contract. Upon such disclosure. and shall in any event abstain from voting in respect of any such contract. not to assist with technical advice to any person. 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. Stephen Goodman and our Group. Non-Competition In order to manage any potential competition and conflicts of interest that may otherwise arise among Retail Holdings. • Mr. unless and until our Audit Committee has determined that no such conflict of interest exists. and have undertaken to procure their associates (as defined in the Listing Manual). in competition with the businesses carried on by our Group at the date of his service agreement. arrangement or any other proposal whatsoever in which they have any personal material interest. in competition with the businesses carried on by our Group at the date of his service agreement. Under the Deed. among other things. firm or company engaged in any business within the countries in which our Company is presenting operating. and not to deal in similar services. or has plans to enter. Mr. or has plans to enter. • • • not to carry on the same or any similar business as our Group. proposal. India and Thailand) or has plans to enter (namely Myanmar. 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. directly or indirectly. in competition with the businesses carried on by our Group at the date of his service agreement. Retail Holdings and Mr. • • 248 . such Directors will not participate in any proceedings of our Board of Directors. Cambodia and Laos). the parties have entered into a deed of undertaking dated [ ● ] (the “ Deed ”). Stephen Goodman has also undertaken in his service agreement. arrangement. Stephen Goodman have undertaken. arrangement. 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 countries in which the Group is presently operating (namely Sri Lanka. Bangladesh. not to deal in similar products. 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. proposal.shall in any event abstain from voting in respect of any such contract. unless and until our Audit Committee has determined that no such conflict of interest exists. transaction or matter in which the conflict of interest arises. Pakistan. transaction or matter in which the conflict of interest arises.

within the countries in which our Company is presently operating or has plans to enter. 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. • 249 . firm or company who at any time during the last 12 months of his service with our Company was a customer of our Group.• not to. solicit in competition with the businesses carried on by our Group at the date of his service agreement any person.

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. occurring after such date.TAXATION Cayman Islands Taxation Our Company is incorporated in the Cayman Islands. 2004 by a Singapore tax resident individual through a partnership in Singapore is exempt from Singapore income tax.0% to 20. 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. Foreign-sourced income received in Singapore by an individual who is not tax resident in Singapore is exempt from Singapore income tax.0%. selling or otherwise dealing with our Shares or on any tax implications arising from the acquisition. There are no reciprocal tax treaties between the Cayman Islands and Singapore. holding or disposal of our Shares. or in the interpretation of these laws or guidelines. A Singapore tax resident individual is taxed at progressive rates ranging from 0. 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. 250 . Subject to certain conditions. and the relevant tax authorities or the courts could later disagree with the explanations or conclusions set out below. 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. Individual Income Tax An individual is a tax resident in Singapore in a year of assessment if. in the preceding calendar year.0%. 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. which changes could be made on a retrospective basis. Individual taxpayers who are Singapore tax residents are subject to Singapore income tax on income accruing in or derived from Singapore. are subject to Singapore income tax on income accruing in or derived from Singapore at the rate of 20. All foreign-sourced income received in Singapore on or after January 1. foreign-sourced dividend income received in Singapore on or after January 1. Dividends remitted to Shareholders resident outside the Cayman Islands will not be subject to Cayman Islands withholding tax. or if he resides in Singapore. sale or other dealings in respect of our Shares. purchase. subject to certain exceptions and conditions. Non-resident individuals. These laws and guidelines are also subject to various interpretations. 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. Prospective shareholders are advised to consult their own tax advisors as to the Singapore or other tax consequences of the acquisition. Our Company does not intend to be a tax resident in Singapore for Singapore income tax purposes. ownership or disposal of our Shares. 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.

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. and (ii) (iii) the Comptroller is satisfied that the exemption would be beneficial to the income recipient. branch profits and services income received or deemed to be received in Singapore by Singapore tax-resident companies on or after June 1. The corporate tax rate is 17. of a company’s chargeable income otherwise subject to normal taxation is exempt from corporate tax. and on foreign-sourced income received or deemed received in Singapore. be eligible for full tax exemption on their normal chargeable income of up to S$100. 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. on foreignsourced income received or deemed to be received in Singapore. at the time the income is received in Singapore. subject to certain exceptions. three-quarters of up to the first S$10. subject to certain exceptions.0% with effect from year of assessment 2010. Corporate taxpayers who are Singapore tax residents are subject to Singapore income tax on income accruing in or derived from Singapore and. 2003 are exempt from tax if certain prescribed conditions are met. New companies will also. Foreign-sourced income in the form of dividends.0%. A non-resident corporate taxpayer is subject to income tax on income that is accrued in or derived from Singapore. The remaining chargeable income will be fully taxable at the prevailing corporate tax rate. A non-resident corporate taxpayer which does not operate in or from Singapore would not be taxed on foreign income received in Singapore.000. 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. Certain concessions and clarifications have also been announced by the Inland Revenue Authority of Singapore with respect to such conditions. subject to certain conditions.000 a year for each of the company’s first three years of assessment.000. 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. There are no specific laws or regulations which deal with the characterization of whether a gain is income or capital in nature. In addition. 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. 251 . and one-half of up to the next S$290. Gains on Disposal of Shares Singapore does not impose tax on capital gains. Gains arising from the disposal of our Shares may be construed to be of an income nature and subject to Singapore income tax.

The buyers of the Shares would not incur any GST on their purchase of the Shares. 2012 to May 31. whichever is higher. The stamp duty is borne by the purchaser unless there is an agreement to the contrary. or market value of. 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. However. In addition. 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.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. unless certain conditions are satisfied. 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. certainty of non-taxation will be given on gains derived by a company from disposal of ordinary shares during the period June 1. 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.20 for every S$100 or part thereof of the consideration for. shareholders who apply. subject to satisfaction of certain conditions. no stamp duty is payable on the acquisition of our Shares. 2017 (both dates inclusive) and immediately prior to the date of share disposal. holding and disposal of our Shares. our Shares. the seller had held at least 20. 252 . Where our Shares evidenced in certificated form are acquired in Singapore. 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. Stamp duty There is no stamp duty payable on the subscription of our Shares. subject to certain conditions. the sale should generally. Where an instrument of transfer is executed outside Singapore or no instrument of transfer is executed. be considered a taxable supply subject to GST at the zero rate. Estate duty Singapore estate duty has been abolished with respect to all deaths occurring on or after February 15. 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. GST-registered investors should seek the advice of their tax advisors on these conditions. or who are required to apply. stamp duty is payable on the instrument of transfer of our Shares at the rate of S$0.0% of the ordinary shares in the investee company for a continuous period of at least 24 months. 2008. GST-registered investors should seek the advice of their tax advisors on these conditions.

be subject to GST at the zero rate. subject to satisfaction of certain conditions. Similar services rendered contractually to and for the direct benefit of an investor belonging outside Singapore should generally. underwriting or advising on the issue. currently at 7. 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. broking. 253 . sale or holding of our Shares will be subject to GST at the prevailing standard rate.0%.Services consisting of arranging.

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

at our sole discretion. 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. will be required to pay to the Sole Global Coordinator. estimates of our business potential and earnings prospects. We and the Vendors may also. The Offering Price was determined after a book building process and agreed among ourselves.0% of the total Offering Shares. subject to certain conditions. as compensation for their services in connection with the Offering. Bookrunner. Bookrunner. Bookrunner. whether the Company and/or Vendors. Over-allotment Option In connection with the Offering. Bookrunner. 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). on one or more occasions. the Vendors and the Sole Global Coordinator. Underwriter and Issue Manager. representations or obligations under the Underwriting Agreement and the respective parties’ relative intent. Expenses and Commission The Global Coordinator. an aggregate of [ ● ] Shares. breached any of its warranties. The relative fault is determined by reference to. 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. Bookrunner. Purchasers of our Offering Shares. Underwriter and Issue Manager believe to be reasonably comparable to us. 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). pay to the Sole Global Coordinator. The Sole Global Coordinator. other than those in the Singapore Public Offer. whether the misstatement or omission relates to information supplied by the Company and/or Vendors. Underwriter and Issue Manager in respect of the Offering. representing not more than 15. 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. the Vendors have granted the Stabilizing Manager the Overallotment Option exercisable by the Stabilizing Manager in whole or in part. current market valuations of publicly traded companies that we. or the Sole Global Coordinator. Underwriter and Issue Manager a brokerage fee of up to 1. No Existing Public Market Prior to the Offering. as applicable. Bookrunner. Underwriter and Issue Manager. Bookrunner.received by the Sole Global Coordinator. as the case may be. Bookrunner. among other things. Underwriter and Issue Manager has agreed. stamp taxes and other similar charges in accordance with the laws and practices of the country of purchase. an assessment of our recent historical performance. on the SGX-ST. See “ Use of Proceeds ” for details on the expenses incurred in connection with the Offering. at the time of settlement. to undertake stabilizing actions to purchase up to an aggregate of [ ● ] Additional Shares 255 . Bookrunner. the Vendors and the Sole Global Coordinator. the current state of our development and the current state of our industry and the economy as a whole. knowledge. access to information and opportunity to correct or prevent such misstatement or omission or breach. as applicable. underwriting. there has been no trading market for our Shares. Among the factors considered in determining the Offering Price of the Offering Shares were the prevailing market conditions. We and the Vendors will pay the Sole Global Coordinator.0% of the Offering Price. Underwriter and Issue Manager.

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. Neither our Company. Such transactions may be effected on the SGX-ST and in other jurisdictions where it is permissible to do so. 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. once commenced. directly or through their affiliates. there is no assurance that the Stabilizing Manager will undertake any such stabilization action. nor the Sole Global Coordinator. However. Shares Are Not Being Registered Under the U.S. Underwriter and Issue Manager. 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. Share Lending Agreement In connection with settlement and stabilization. The Sole Global Coordinator. including sales pursuant to Regulation S. made in connection with the Offering. the Vendors. if any.0% of the total Offering Shares) at the Offering Price. In addition. representing not more than 15. 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. if commenced. 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. Bookrunner. the Vendors. if any. In addition. and (ii) the date when the Stabilizing Manager has bought on the SGX-ST an aggregate of [ ● ] Shares. nor the Sole Global Coordinator. will not be discontinued without notice (unless such notice is required by law). subject to any applicable laws and regulations. Underwriter and Issue Manager make any representation that the Stabilizing Manager will engage in such transactions or that such transactions. to undertake stabilizing actions. 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. solely to cover the over-allotment of the Offering Shares. 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.0% of the total Offering Shares. 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.S. Price Stabilization In connection with the Offering. Such transactions may commence on or after the commencement of trading of the Shares on the SGX-ST and.(representing not more than 15. 256 . Bookrunner. Securities Act The Sole Global Coordinator. neither our Company. Securities Act or applicable state securities laws. including the SFA and any regulations thereunder. in each case in compliance with all applicable laws and regulations. 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). 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 ”. Bookrunner. If the Stabilizing Manager borrows Shares pursuant to the Share Lending Agreement. Bookrunner. proposes to offer the Offering Shares for resale in transactions not requiring registration under the U.

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

from the date of the Underwriting Agreement until the date falling six months after Listing Date. The foregoing restrictions do not apply to (i) the Shares to be sold by the Vendors in the Offering. Underwriter and Issue Manager that shall not. has agreed with the Sole Global Coordinator. Bookrunner. in whole or in part. L. directly or indirectly. sell or contract to sell. in cash or otherwise. in whole or in part. directly or indirectly. any of the economic consequences of ownership of (or having interests in) any UAP Interests. each of UCL Asia Partners. and UCL Asia GP. any Shares) in any depository receipt facilities. (ii) any Additional Shares that are sold pursuant to the Over-allotment Option granted by the Vendors to the Stabilizing Manager. it will not without the prior written consent of the Sole Global Coordinator. remain as general partner of UCL Asia Partners. directly or indirectly. 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. without the prior written consent of the Sole Global Coordinator. hedge or other arrangement is to be settled by delivery of shares or other securities. to the foregoing (a) or (b). Bookrunner. in whole or in part. hedge or other arrangement that transfers to another. (a) offer. Bookrunner. grant any option. in cash or otherwise. or agree to. (c) enter into any transaction or other arrangement having an economic effect similar. Bookrunner. To demonstrate UCL Asia Partners. (c) enter into any transaction or other arrangement having an economic effect similar. hedge or other arrangement that transfers to another.P. do any of the above. (b) enter into any swap. has further undertaken to the Sole Global Coordinator. or (e) offer to. during the Lock-Up Period. right or warrant to purchase. or (e) offer to. L.P. and UCL Asia GP. to the foregoing (a) or (b).’s commitment to our Group. Underwriter and Issue Manager. sell or contract to sell. grant any option. whether such swap.P. UCL Asia Partners. whether any such transaction is to be settled by delivery of shares or other securities. UCL Asia GP. Underwriter and Issue Manager that.P. or publicly announce any intention to. (a) offer. any Shares or UCL Asia Holdings VII Limited Shares) in any depository receipt 258 .P.P. UCL Asia GP. L. hypothecate or encumber or otherwise transfer or dispose of. cause itself to be removed as general partner of UAP. (d) deposit any of the UAP Interests in any depository receipt facilities. 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. during the Lock-Up Period. any of its interests in UAP (including any interests or securities convertible into or exchangeable for any interest in UAP) (the “ UAP Interests ”). pledge. pledge. unless otherwise removed by the limited partners pursuant to the limited partnership agreement. its interests in the Shares and its shares in UCL Asia Holdings VII Limited (the “ UCL Asia Holdings VII Shares ” and together. hedge or other arrangement is to be settled by delivery of shares or other securities. 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). Underwriter and Issue Manager. it will. (“ UAP ”) and will not. L. or which carry rights to subscribe for or purchase. lend. or which carry rights to subscribe for or purchase.P. L. in whole or in part. or agree to. Underwriter and Issue Manager that. hypothecate or encumber or otherwise transfer or dispose of.P. lend. directly or indirectly. (b) enter into any swap. whether any such transaction is to be settled by delivery of shares or other securities. subject to certain exceptions. L. L. in cash or otherwise. L. whether directly or indirectly.(including any interests or securities convertible into or exchangeable for. has further agreed with the Sole Global Coordinator. right or warrant to purchase. whether such swap. in cash or otherwise. (d) deposit any of UCL Asia Partners Lock-Up Securities (including any interests or securities convertible into or exchangeable for. 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. Bookrunner. or publicly announce any intention to do any of the above.

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

right or warrant to purchase. in cash or otherwise. whether such swap. from the date of the Underwriting Agreement until the date falling six months after Listing Date. 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. do any of the above. (b) enter into any swap. directly or indirectly. any Shares or UCL Asia Investments Shares. in cash or otherwise. or agree to. or publicly announce any intention to. (b) enter into any swap. and (iii) the Shares which are lent by UCL Asia Holdings VII Limited to the Stabilizing Manager under the Share Lending Agreement. to the foregoing (a) or (b). pledge. grant any option. Bookrunner. Tobias Brown (who is a Director of our Company and a shareholder of UCL Asia Investments. 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). 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 foregoing restrictions do not apply to (i) the Shares to be sold by UCL Asia Holdings VII Limited in the Offering. or which carry rights to subscribe for or purchase. hedge or other arrangement that transfers to another. any Shares or UCL Asia Investments Shares) in any depository receipt facilities. (c) enter into any transaction or other arrangement having an economic effect similar. whether such swap. or exchangeable for or which carry rights to subscribe or purchase. sell or contract to sell. or which carry rights to subscribe or purchase. he will not without the prior written consent of the Sole Global Coordinator. (c) enter into any transaction or other arrangement having an economic effect similar. whether any such transaction is to be settled by delivery of shares or other securities. in cash or otherwise. (ii) any Additional Shares that are sold pursuant to the Over-allotment Option granted by the Vendors to the Stabilizing Manager. 260 . hedge or other arrangement is to be settled by delivery of shares or other securities. in whole or in part. in whole or in part. (d) deposit any of JOD Lock-Up Securities (including any interests or securities convertible into or exchangeable for. in cash or otherwise. or which carry rights to subscribe for or purchase. directly or indirectly. provided that the restrictions will apply to the Shares returned to UCL Asia Holdings VII Limited pursuant to the Share Lending Agreement. (d) deposit any of TB Lock-Up Securities (including any interests or securities convertible into or exchangeable for. hedge or other arrangement is to be settled by delivery of shares or other securities. any Shares or UCL Asia Investments Shares) in any depository receipt facilities.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). or (e) offer to. provided that the restrictions will apply to the Shares returned to UCL Asia Holdings VII Limited pursuant to the Share Lending Agreement. lend. any Shares or UCL Asia Investments Shares. (a) offer. in whole or in part. (ii) any Additional Shares that are sold pursuant to the Over-allotment Option granted by the Vendors to the Stabilizing Manager. or agree to. whether any such transaction is to be settled by delivery of shares or other securities. Underwriter and Issue Manager that. Tobias Brown To demonstrate his commitment to our Group. has agreed with the Sole Global Coordinator. Underwriter and Issue Manager. 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. Ltd). hedge or other arrangement that transfers to another. in whole or in part. or (e) offer to. to the foregoing (a) or (b). subject to certain exceptions. Bookrunner. do any of the above. or publicly announce any intention to. The foregoing restrictions do not apply to (i) the Shares to be sold by UCL Asia Holdings VII Limited in the Offering. and (iii) the Shares which are lent by UCL Asia Holdings VII Limited to the Stabilizing Manager under the Share Lending Agreement. hypothecate or encumber or otherwise transfer or dispose of.

(ii) any Additional Shares that are sold pursuant to the Over-allotment Option granted by the Vendors to the Stabilizing Manager. Underwriter and Issue Manager that. in whole or in part. sell or contract to sell. Underwriter and Issue Manager. have agreed with the Sole Global Coordinator. Bookrunner. in cash or otherwise. Underwriter and Issue Manager. or publicly announce any intention to. 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). any Shares or ReHo Shares) in any depository receipt facilities. to the foregoing (a) or (b). to the foregoing (a) or (b). Underwriter and Issue Manager that. 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 for or 261 . subject to certain exceptions. it will not without the prior written consent of the Sole Global Coordinator. any Shares or ReHo Shares. hedge or other arrangement is to be settled by delivery of shares or other securities. Bookrunner. directly or indirectly. provided that the restrictions will apply to the Shares returned to ReHo Limited pursuant to the Share Lending Agreement. its interests in the Shares and its shares in ReHo Limited (the “ ReHo Shares ” and together. The foregoing restrictions do not apply to (i) the Shares to be sold by ReHo Limited in the Offering.Retail Holdings To demonstrate Retail Holdings’s commitment to our Group. any Shares or Retail Holdings Shares. Bookrunner. or which carry rights to subscribe for or purchase. (b) enter into any swap. hypothecate or encumber or otherwise transfer or dispose of. Stephen Goodman (who is our Chairman and Executive Director and a shareholder of Retail Holdings). directly or indirectly. hedge or other arrangement that transfers to another. Stephen Goodman To demonstrate his commitment to our Group. from the date of the Underwriting Agreement until the date falling six months after Listing Date. or (e) offer to. right or warrant to purchase. each of Stephen Goodman and the three trusts will not without the prior written consent of the Sole Global Coordinator. in cash or otherwise. grant any option. Bookrunner. whether such swap. directly or indirectly. whether any such transaction is to be settled by delivery of shares or other securities. 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. and (iii) the Shares which are lent by ReHo Limited to the Stabilizing Manager under the Share Lending Agreement. hedge or other arrangement is to be settled by delivery of shares or other securities. 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. whether such swap. pledge. Retail Holdings has agreed with the Sole Global Coordinator. hypothecate or encumber or otherwise transfer or dispose of. lend. subject to certain exceptions. directly or indirectly. grant any option. pledge. (a) offer. in whole or in part. (c) enter into any transaction or other arrangement having an economic effect similar. (d) deposit any of SG Lock-Up Securities (including any interests or securities convertible into or exchangeable for. do any of the above. (a) offer. 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). (d) deposit any of Retail Holdings Lock-up Securities (including any interests or securities convertible into or exchangeable for. right or warrant to purchase. (c) enter into any transaction or other arrangement having an economic effect similar. from the date of the Underwriting Agreement until the date falling six months after Listing Date. hedge or other arrangement that transfers to another. sell or contract to sell. in whole or in part. or which carry rights to subscribe or purchase. 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. in cash or otherwise. or agree to. lend. (b) enter into any swap.

and (iii) the Shares which are lent by ReHo Limited to the Stabilizing Manager under the Share Lending Agreement. product disclosure statement or any other form of formal “disclosure document” for the purposes of Australian Law. (c) deposit any of his Shares (including any interests or securities convertible into or exchangeable for. do any of the above. in cash or otherwise. or (d) offer to. enter into any transaction or other arrangement having an economic effect similar. or file with the SEC a registration statement under the U. directly or indirectly. sell. or publicly announce any intention to. of the Corporations Act. 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). (a) offer. lend. hypothecate or encumber or otherwise transfer or dispose of. hedge or other arrangement that transfers to another. Chief Executive Officer and Executive Director. Gavin Walker has agreed with the Sole Global Coordinator. Gavin Walker Our President. any Shares or Retail Holdings Shares) in any depository receipt facilities. in whole or in part. whether such swap. Bookrunner.purchase. provided that the restrictions will apply to the Shares returned to ReHo Limited pursuant to the Share Lending Agreement. or which carry rights to subscribe for or purchase. Bookrunner. The foregoing restrictions do not apply to (i) the Shares to be sold by ReHo Limited in the Offering. 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. 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. whether any such transaction is to be settled by delivery of shares or other securities. in whole or in part. Underwriter and Issue Manager that he will not without the prior written consent of the Sole Global Coordinator. and is not required to. in cash or otherwise. contain all the information which would be required in a disclosure document under Australian law. in cash or otherwise. from the date of the Underwriting Agreement until the date falling six months after Listing Date. and a wholesale client for the purposes of Chapter 7.S. It is made available to you on the basis that you are a professional investor or sophisticated investor for the purposes of Chapter 6D. This document is not a prospectus. or (e) offer to. any Shares) in any depository receipt facilities. whether any such transaction is to be settled by delivery of shares or other securities. to the foregoing (a) or (b).9. Underwriter and Issue Manager. hedge or other arrangement is to be settled by delivery of shares or other securities. represent and warrant that you are a wholesale client. except in circumstances where: 262 . or agree to. grant any option. contract to sell. 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. right or warrant to purchase. or agree to. If you acquire the IPO Shares in Australia. pledge. (b) enter into any swap.9 of the Australian Corporations Act 2001 (Cth) (“ Corporations Act ”). and does not. (ii) any Additional Shares that are sold pursuant to the Over-allotment Option granted by the Vendors to the Stabilizing Manager. Securities Act relating to. then you: (a) (b) (c) represent and warrant that you are a professional or sophisticated investor.

Accordingly. No cooling off regime will apply to an acquisition of any interest in the Company. Underwriter and Issue Manager. The DFSA has no responsibility for reviewing or verifying any documents in connection with Exempt Offers. and has no responsibility for it. 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. or any other circumstances falling within Article 3(2) of the Prospectus Directive. any other person.9 of the Corporations Act. The Offering Shares to which this document relates may be illiquid and/or subject to restrictions on their resale. 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. Bookrunner. 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 ”). 150. if the Relevant Member State has implemented the relevant provisions of the 2010 PD Amending Directive. Bookrunner. to fewer than 100. 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.(i) disclosure to investors would not be required under either Chapter 6D or Chapter 7. 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. or. natural or legal persons (other than qualified investors as defined in the Prospectus Directive). financial situation or needs of any particular person. European Economic Area In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each. Prospective purchasers of the Offering Shares offered should conduct their own due diligence on the Offering Shares. This document is intended for distribution only to persons of a type specified in those Rules. 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. The DFSA has not approved this document or taken steps to verify the information set out in it. The persons referred to in this document may not hold Australian Financial Services licenses. It must not be delivered to. This document does not take into account the investment objectives. or such sale or offer is made pursuant to a disclosure document which complies with either Chapter 6D or Chapter 7. or relied on by. warranted and agreed to and with the Sole Global Coordinator. before making any investment decision in relation to this document. (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. an offer to the public of any Offering Shares may not be made in that Relevant Member State.9 of the Corporations Act. (c) 263 . a “ Relevant Member State ”). subject to obtaining the prior consent of the Sole Global Coordinator. If you do not understand the contents of this document you should consult an authorized financial advisor.

Underwriter and Issue Manager has been obtained to each such proposed offer or resale. The Company. Notwithstanding the above. any advertisement. If you are in any doubt about any of the contents of this document. Bookrunner. as the same may be varied for that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State. Bookrunner. Bookrunner. 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). nor have they been acquired with a view to their offer or resale to. or the contents of which are likely to be accessed or read by. including the 2010 PD Amending Directive. 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. warranty and agreement. with the consent of the Sole Global Coordinator. as amended. Hong Kong The contents of this document have not been reviewed by any regulatory authority in Hong Kong. or (ii) where Offering Shares have been acquired by it on behalf of persons in any Relevant Member State other than qualified investors. you should obtain independent professional advice. and the expression “ 2010 PD Amending Directive ” means Directive 2010/73/EU. Underwriter and Issue Manager. to the extent that such directive has been implemented in the Relevant Member State). invitation or document relating to the Offering Shares which is directed at. be permitted to subscribe for or purchase Offering Shares. or in circumstances in which the prior consent of the Sole Global Coordinator. Underwriter and Issue Manager of such fact in writing may. The expression “ Prospectus Directive ” means Directive 2003/71/EC. a person who is not a qualified investor and who has notified the Sole Global Coordinator. Underwriter and Issue Manager and each of their respective affiliates and others will rely upon the truth and accuracy of the foregoing representation. 264 . 571) and any rules made thereunder. Bookrunner. warranted and agreed to and with the Sole Global Coordinator. Bookrunner. You are advised to exercise caution in relation to the offer. whether in Hong Kong or elsewhere. or in other circumstances which do not result in the document being a “prospectus” as defined in the Companies Ordinance of Hong Kong (Cap. persons in any Relevant Member State other than qualified investors.For the purposes of this provision. the offer of those Offering Shares to it is not treated under the Prospectus Directive as having been made to such persons. such financial intermediary will also be deemed to have represented. 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. the Sole Global Coordinator. and (ii) no person shall issue or possess for the purposes of issue. This offering document has not been approved by the Securities and Futures Commission in Hong Kong and. 32) or which do not constitute an offer to the public within the meaning of the Companies Ordinance. Underwriter and Issue Manager and the Company that (i) the Offering Shares acquired by it have not been acquired on behalf of. accordingly. and includes any relevant implementing measure in each Relevant Member State (and amendments thereto. (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.

corporations or to Indonesian citizens. this document will not be filed with. wherever they are domiciled or to Indonesian residents. and will not offer and sell. and the offer of Offering Shares will not be supervised by. the disclosure standards for issue prospectuses under art. including the Offering Shares and Exchange Board of India. (“ SIX Swiss Exchange ”) or on any other stock exchange or regulated trading facility in Switzerland. 265 . the Swiss Financial Market Supervisory Authority FINMA (“ FINMA ”). any resident of India. and the offer of Offering Shares has not been and will not be authorized under the Swiss Federal Act on Collective Investment Schemes (“ CISA ”).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. any Offering Shares in Indonesia or to Indonesian nationals. This document does not constitute a prospectus within the meaning of. corporations or residents in a manner which constitutes a public offering of the Offering Shares under the laws or regulations of Indonesia. 27 ff. In particular. and does not constitute an offer or invitation for any investment or subscription for Offering Shares in India. Bookrunner. or for the account or benefit of. 652a or art. Switzerland The Offering Shares may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange Ltd. which would permit a public offering of any of the Offering Shares or distribution of the Offering Document. Thailand No action has been or will be taken by the Company. This document has not been reviewed or approved by any statutory or regulatory authority in India. or by or on behalf of the Underwriter. 1156 of the Swiss Code of Obligations or the disclosure standards for listing prospectuses under art. The investor protection afforded to acquirers of interests in collective investment schemes under the CISA does not extend to acquirers of Offer Shares. of the SIX Swiss Exchange Listing Rules or the listing rules of any other stock exchange or regulated trading facility in Switzerland. except on a private and confidential basis. 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. and neither this offering document nor any other materials relating to the Offering Shares have been distributed. 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. and has been prepared without regard to. offering or advertisement. Underwriter and Issue Manager has represented and agreed that it has not offered and sold. including by way of invitation. or will be distributed. in Indonesia or to Indonesian nationals. or except as otherwise permitted by applicable Indian laws and regulations. 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. 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. 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. Indonesia The Sole Global Coordinator.

directly or indirectly. the Securities and Commodities Authority or the Dubai Financial Services Authority. Securities Act) in reliance on Regulation S under the U. 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. until 40 days after the commencement of the Offering. Bookrunner. from or otherwise involving the United Kingdom. publicly offered. the registration requirements of the U. and are not being. the Offering Shares may not be offered or sold. 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. 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. 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. 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.S. or the possession. 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. Accordingly. Further. 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. Accordingly. Securities Act. Underwriter and Issue Manager has represented. in any jurisdiction where action for the purpose is required.S.S. In addition. This offering document has not been approved by or filed with the Central Bank of the United Arab Emirates. 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. offering and sale of securities. United Kingdom The Sole Global Coordinator. Securities Act or the securities laws of any state or other jurisdiction of the United States. Securities Act and any other applicable securities laws. Accordingly.United Arab Emirates The Offering Shares have not been. sold.S. the Offering Shares may not be offered. 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. Securities Act. 266 . sold or otherwise transferred in the United States except pursuant to an exemption from. circulation or distribution of this offering document or any other material relating to us or the Offering Shares. or in a transaction not subject to. (ii) United States The Offering Shares have not been registered under the U.S. and neither this offering document nor any other offering material or advertisements in connection with the Offering Shares may be distributed or published.

trade in our securities. engage in transactions with. Bookrunner. and perform services for. Underwriter and Issue Manager and certain of its affiliates may have performed commercial banking.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 [ ● ]. from time to time. Bookrunner. Other Relationships The Sole Global Coordinator. 267 . investment banking and other advisory services for us and our affiliates from time to time for which they received customary fees and expenses. Underwriter and Issue Manager and certain of its affiliates may. us and our affiliates in the ordinary course of their business.0% of the Offering Shares pursuant to the Offering. The Sole Global Coordinator. 2013. 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.

the Vendors and the Sole Global Coordinator. 268 . Securities Act will be deemed to have represented. representations or agreements deemed to have been made by it through its purchase of the Offering Shares are no longer accurate. representations and agreements contained under this section of this offering document entitled “ Transfer Restrictions ”. pledged or otherwise transferred or delivered within the United States except pursuant to an applicable exemption from the registration requirements of the U. investors are urged to consult legal counsel prior to making any offer. and such prospective purchaser agrees that. and if it is acquiring any Offering Shares as fiduciary or agent for one or more investor accounts. Bookrunner. General In addition. 2. the Vendors or the Offering. the Vendors and the Sole Global Coordinator. Underwriter and Issue Manager as follows: 1. Each purchaser of the Offering Shares offered outside the United States pursuant to Regulation S under the U. Securities Act or with any US state or federal securities regulatory authority of any state or other jurisdiction and. Securities Act are used herein as defined therein. the Vendors and the Sole Global Coordinator. the Vendors or the Sole Global Coordinator. 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.S. may not be offered. sold. Securities Act.S.S. The Offering Shares have not been registered under the U. resale.S.S. if any of the acknowledgments. the Vendors and the Sole Global Coordinator. Bookrunner. Underwriter and Issue Manager has made any representation or provided any information to it with respect to our Company. representations and agreements on behalf of each such account. Bookrunner. other than the information contained or incorporated by reference in this offering document. by its acceptance thereof.TRANSFER RESTRICTIONS As a result of the following restrictions. pledge or other transfer of the Offering Shares. Bookrunner. That none of our Company. Underwriter and Issue Manager or any person representing our Company. it shall promptly notify our Company. will be deemed to have acknowledged. Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States. which document has been delivered to it and upon which it is relying in making its investment decision with respect to the Offering Shares. 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. Bookrunner. each prospective purchaser of Offering Shares. That our Company. 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. accordingly. Underwriter and Issue Manager. represented to and agreed with our Company. Underwriter and Issue Manager and others will rely upon the truth and accuracy of the acknowledgments. Terms used in these “ Transfer Restrictions ” that are defined in Regulation S under the U. United States The Offering is being made in accordance with and in reliance upon Regulation S under the U.

An investor may open a direct securities account with the CDP or a securities sub-account with a depository agent. and stamp duty of S$10. Upon listing and quotation on the SGX-ST. rather than the CDP itself. either directly or through depository agents.00 for each withdrawal of 1. is incorporated under the laws of Singapore and acts as a depository and clearing organization. bank.20 per S$100. subject to a maximum of S$600.000 Shares or less and a fee of S$25. 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.00 for each withdrawal of more than 1.00 or part thereof of the last-transacted price where our Shares are withdrawn in the name of a third party. our Shares will be traded under the book-entry (scripless) settlement system of the CDP. In addition. securities accounts with the CDP.00 is also payable where our Shares are withdrawn in the name of the person withdrawing our Shares. 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. 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. Settlement of trades on a normal “ready” basis on the SGX-ST generally takes place on the third Market Day following the transaction date. a board lot for our Shares will comprise 1.04% of the transaction value. or S$0. under the Cayman Islands’ Companies Law and our Articles of Association. 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. a wholly-owned subsidiary of the Singapore Exchange Limited. be valid for delivery pursuant to trades transacted on the SGX-ST. a fee of S$2. The CDP holds securities on behalf of investors in securities accounts.00 is payable upon the deposit of each instrument of transfer with the CDP. Persons named as direct securities account holders and depository agents in the depository register maintained by the CDP. merchant bank or trust company. A fee of S$10.000 Shares will be payable to the CDP upon withdrawing our Shares from the book-entry settlement system and obtaining physical share certificates. A Singapore clearing fee for trades in our Shares on the SGX-ST is payable at the rate of 0. as members of our Company in respect of the number of our Shares credited to their respective securities accounts. The clearing fee. 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. Such share certificates will not. and payment for the securities is generally settled on the following day. 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. although they will be prima facie evidence of title and may be transferred in accordance with our Articles of Association. For the purpose of trading on the SGX-ST.000 Shares. 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. as amended from time to time. 269 . will be treated.0% (or such other rate prevailing from time to time).00 (or such other amount as our Directors may decide) will be payable to our Share Registrar for each share certificate issued. No transfer stamp duty is currently payable for the transfer of our Shares that are settled on a book-entry basis. and have their respective securities accounts credited with the number of our Shares deposited before they can affect the desired trades. Dealings in our Shares will be carried out in Singapore dollars and will be effected for settlement in the CDP on a scripless basis. A depository agent may be a member company of the SGX-ST. instrument of transfer deposit fees and share withdrawal fee are subject to GST of 7. The CDP. however. A fee of S$20.00 per transaction.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.

and to the extent permitted by law takes no responsibility for. Syed Ishtiaq Ahmad & Associates. Bookrunner. Nithya Partners and Chandler and Thong-ek Law Offices Limited does not make.S. Maples and Calder. federal securities law. 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. Clifford Chance. Each of Clifford Chance Pte Ltd. 270 . any statement in or omission from this offering document. by Maples and Calder with respect to British Virgin Islands and Cayman Islands law. federal securities law. regarding. and it makes no representation. Certain legal matters in connection with the Offering will be passed upon for the Sole Global Coordinator. Vellani & Vellani. express or implied.S. by Syed Ishtiaq Ahmed & Associates with respect to Bangladeshi law.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. Underwriter and Issue Manager by Allen & Overy LLP with respect to matters of Singapore law and U. by PRA Law Offices with respect to Indian law. Allen & Overy LLP. PRA Law Offices. 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. by Clifford Chance with respect to Hong Kong law.

The above reports were prepared for the purpose of inclusion in this offering document. have reported that they applied limited procedures in accordance with professional standards for a review of such information. 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. 2011 and 2012 and for each of the years then ended. With respect to the unaudited condensed combined interim financial statements for the threemonth periods ended March 31. the degree of reliance on their reports on such information should be restricted in the light of the limited nature of the procedures applied. 2010. 2012 and 2013. 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.INDEPENDENT AUDITORS AND JOINT REPORTING ACCOUNTANTS The combined financial statements of Sewko as at December 31. included in this offering document. However. 271 . Accordingly. included in this offering document. KPMG Phoomchai Audit Limited and KPMG LLP. the independent joint reporting accountants.

warrants or rights with respect to. the shares or other securities of) our Company. #13-00 Goldbell Towers. Singapore 228233. or interest in. The Industry Consultant (or any of their respective directors. was responsible for preparing those sections. 272 . own or have a position in the securities of (or options. The Nielsen Company (Singapore) Pte Ltd. which were prepared for the purpose of inclusion in this offering document. officers.EXPERTS The Industry Consultant. attributable to each of them in “ Industry Overview ”. to the extent permitted by law. employees or affiliates) may. 47 Scotts Road.

or has been the subject of any criminal proceedings (including any pending criminal proceedings of which he is aware) for such purpose. 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. at any time during the last ten years. involving a breach of any law or regulatory requirement that relates to the securities or futures industry in Singapore or elsewhere. involving fraud or dishonesty. in Singapore or elsewhere. or from taking part directly or indirectly in the management of any entity or business trust. as at the date of this offering document. ever been convicted of any offense. judgment or ruling of any court. in Singapore or elsewhere. tribunal or governmental body. ever been convicted in Singapore or elsewhere of any offense in connection with the formation or management of any entity or business trust. misrepresentation or dishonesty on his part. none of our Directors or Executive Officers has: (a) at any time during the last ten years. 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. in Singapore or elsewhere. permanently or temporarily enjoining him from engaging in any type of business practice or activity. any unsatisfied judgment against him. or been the subject of any criminal proceedings (including any pending criminal proceedings of which he is aware) for such breach. been concerned with the management or conduct. ever been the subject of any order. Except as otherwise set out below. or been the subject of any civil proceedings (including any pending civil proceedings of which he is aware) involving an allegation of fraud. for the winding-up or dissolution of that entity or. or a finding of fraud. that business trust. ever been disqualified from acting as a director or an equivalent person of any entity (including the trustee of a business trust). misrepresentation or dishonesty on his part. 273 (b) (c) (d) (e) (f) (g) (h) (i) (j) . where that entity is the trustee of a business trust. which is punishable with imprisonment. to his knowledge. on the ground of insolvency. 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. 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.GENERAL AND STATUTORY INFORMATION Information on Directors and Executive Officers 1. ever. 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 any time during the last ten years. ever been convicted of any offense.

274 . 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. Disclosure in relation to Rajeev Bajaj Singer India Mr. Singer India was subject to a routine investigation on its financial records by the Ministry of Corporate Affairs.000 was imposed on Mr. Krishan Kumar Gupta. Singer India has imported sewing machines with inbuilt motors. A duty of INR 4. in connection with any matter occurring or arising during the period when he was so concerned with the entity or business trust.307 and a penalty of INR 4. No provision has been made for payment of this penalty. paying excise duties as applicable.207 were imposed on Singer India. by the Authority or any other regulatory authority. currently serving as non-executive chairman of Singer India) and another penalty of INR 500. Singer India was registered in May 2005 as a “Sick Company” by the BIFR.000 was imposed on the then vice-chairman and managing director (Mr. 2. Excise duties had to be paid for such manufacturing activities which Singer India had not paid.000. Further. professional body or government agency. please see “ Business – Legal Proceedings-Singer India ”.538. 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. As at the Latest Practicable Date. was a director of Singer India from July 2005 to September 2005 and subsequently from August 2008 until the present day. As a “Sick Company”. and (k) been the subject of any current or past investigation or disciplinary proceedings. the duties and penalties imposed have been stayed by CESTAT. Singer India was found by the Central Excise Authorities of India to have carried on manufacturing activities by affixing motors to imported sewing machines.538. and there have not been any defaults in payment of excise duties. For further information. Since receiving the penalty for non-compliance with the Central Excise Act. Excise Duties Dispute In 2004. 2009 before the Custom Excise & Service Tax Appellate Tribunal (“ CESTAT ”) (the second appeal stage) and the matter is currently pending. whether in Singapore or elsewhere. or has been reprimanded or issued any warning. our Vice President. a penalty of INR 1. India in 2006. Matters which were raised during such investigation relate to observations by auditors and all of them have been resolved. Rajeev Bajaj.(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. exchange. Singer India filed an appeal on April 27. India. (iii) any business trust which has been investigated for a breach of any law or regulatory requirement governing business trusts in Singapore or elsewhere.

Disclosure in relation to Asoka Pieris Singer Sri Lanka Asoka Pieris. 3. 1998. 2005. Similar incidents to the above have not since occurred. The approval of the accounts contained a separate disclosure for auditors’ remuneration which Singer India considered as deemed approval. 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. 2004. See “ Business – Legal Proceedings – Singer India ”. 2007. 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. Auditor Remuneration Singer India failed to fix the remuneration of the auditors pursuant to annual general meetings of Singer India held in August 2003. In 2000. Since Singer India’s failure to deposit the remaining unpaid dividends in time in 2005. who was the company secretary at the relevant time. Similarly. but the relevant authorities objected to this practice and called for a specific resolution. paid a compounding fee of INR 3.000 (approximately US$37). Rajeev Bajaj. there have been no other similar delays and we believe that this safeguard is sufficient to prevent such defaults from occurring in the future. Sri Lanka. which was passed subsequently. The Court of Appeal of Sri Lanka granted interim relief to Singer (Sri Lanka) PLC for the consignment to be released upon the 275 . 1997. Ministry of Corporation Affairs compounded the offenses as the unpaid dividend had already been deposited into the government account and the default was unintentional. our Vice President. August 2004 and June 2005 in contravention of the relevant legislation. who was the company secretary at the relevant time. The Director (Northern Region). paid the compounding fee of INR 2. Singer India failed to deposit the remaining unpaid amount into a government account by December 7. Rajeev Bajaj. Singer India formed an audit committee to review the adequacy of internal controls. As the consignment remained detained despite Singer (Sri Lanka) PLC having responded to the Customs Department’s questions. 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. 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 Regional Director (Northern Region).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. 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. Singer (Sri Lanka) PLC filed an application in the Court of Appeal of Sri Lanka for the consignment to be released. 2004.000 (approximately US$55). 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 ”). but the remaining unpaid amount was transferred 17 days late into a government account on July 6. only doing so 17 days later on December 24. With regards to the valuation of imported articles. 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.

any Director or Executive Officer within the two fiscal years preceding the date of this offering document. .675. . being ordinary shares. or has the right to be.386. Except as disclosed below and in “ Share Capital and Shareholders ”. Final relief was requested by Singer (Sri Lanka) PLC in 2008. management. . . Taka 392. given an option to subscribe for or purchase any securities of our Company or any of our subsidiaries. .750 276 . . .675. . 2013. US$10.800 Taka 98. no option to subscribe for shares in.800 Taka 490. . Associated Companies and Joint Venture Entities ”. Substantial shareholders of our Company are not entitled to any different voting rights from the other shareholders. . there is only one class of Shares in the capital of our Company. . The rights and privileges attached to our Shares are stated in the Memorandum of Association and Articles of Association of our Company. As at the Latest Practicable Date. Save for the Over-allotment Option and as described in the Scheme. . 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. . deferred or unissued shares reserved for issuance for any purpose. . 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”. . . . . .64 New Issue US$10. Share Capital 7. None of our Independent Directors sits on the board of our principal subsidiaries based in jurisdictions outside Singapore. . 6. Date CAYMAN ISLANDS Singer Asia Limited Initial Paid-up Capital Resultant Paid-up Capital 2012 . . . there are no founder. . . our Company or our subsidiaries has been granted to. Increase or Reduction of Paid-up Capital Reason for Increase or Reduction of Paid-up Capital 8.101. .200 Taka 168. . Singer (Sri Lanka) PLC intends to file an appeal at the Supreme Court of Sri Lanka against this decision. which would enable the customs inquiry to be proceeded with.289. Taka 224. . . no person has been. as at the Latest Practicable Date.166. . .furnishing of a banker’s guarantee by Singer (Sri Lanka) PLC to the Customs Department. 4. Similar incidents to the above have not since occurred. . . Save for the Scheme Shares. The Court of Appeal dismissed such application on September 3. . 9.66 2011 . . or debentures of. . . Subsidiaries and Jointly-Controlled Entities 5.600 Bonus Issue 2013 . .02 BANGLADESH Singer Bangladesh Ltd US$65. .950 Bonus Issue Taka 392.168. or was exercised by. The details of our subsidiaries and jointly-controlled entities are set out in “ Appendix B – Our Subsidiaries.844.

. 100. .123. . .000 Rs. . . . .000.0% Issue of Bonus Shares at the rate of 10. . . .000 Repayment of loan to STL Baht 850.0% Issue of Bonus Shares at the rate of 10.000 Notes: (1) Cancellation of warrant Baht 270.000. 120. . .445.253. . . 800.650 2011 . 400.000 PAKISTAN Singer Pakistan Ltd (1) 2010 .005 Regnis (Lanka) PLC November 7.000 Rs.0% PKR 341. . .080 PKR 37.955 Rights issue Rs.000. . . . 2012 .170 PKR 34. . PKR 412. .170 PKR 375. . . its chief executive officer and chief financial officer.000 Rs. . . 2010 . Rs. Rs.126. . . .000.005 Shares being allotted pursuant to an initial public offering Rights issue Rs. 50.000. 211. .000. 100. . . . PKR 310. . in the board meeting held on August 31. .000 Baht 13. 111. Baht 283. .000 Rs.380 PKR 454. . . . The High Court has for the time being restrained the issuance of rights shares. 800. . 2010 . .253. . PKR 341. . .342 Rs.277.005 August 6. . Rs.000. . . .923. Baht 1. 0 December 1. 50. . resolved by majority to issue rights shares. Rs.000. See section entitled “Business – Legal Proceedings-Singer Pakistan” for more information on the ongoing legal dispute of Singer Pakistan Ltd.000. . Rs. . . 2012 . .500 In terms of the Petition for Capital Reduction sanctioned by the Delhi High Court INR 10.380 PKR 41. 2012. Rs. INR 39. . .337 Rs. . . .910 Issue of Bonus Shares at the rate of 10. 400.056.300 2013 .139.500 INR 29. .000. 645.000. .000 Singer Leasing December 11. . 150. .000. . PKR 375.923. 277 . .840 SRI LANKA (2)(3)(4)(5) Singer Finance (Lanka) PLC December 22.113. .500. . 2010. 60. . .000 The Board of Directors of Singer Pakistan Ltd. .000 Reality Lanka Limited June 28. .333. Singer Pakistan Limited has filed its response and the matter is pending before the High Court. 1. .000. . 60.000 New issue of shares Rs. . .070 May 7.000.525.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 .425 Rs. . . .778.192. . . . . .012. . . 2012 .778.080 PKR 412. 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. 2011 . . . .0% Issue of Bonus Shares at the rate of 10. .000 Initial issue of shares New issue of shares Rs.000. . However.070 THAILAND Singer Thailand Rs. .000.520 PKR 31. .139. . . .000 Baht 849. 50.000.220 2012 . .333. . .500. 2011. . .068. . .470 Regnis Appliances (Pvt) Ltd February 2.

2012 . Save as disclosed below.805 shares to 125. 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 LKR 100 4. On October 28. There was no change to the stated capital resulting from such subdivision.440.000 LKR 100 6.(2) The Companies Act No.000. within the three years preceding the Latest Practicable Date. .000 units LKR 644.000 LKR 100 To part finance working capital requirements 15.000 unlisted debentures 6. May 10.000.000.560.000 unlisted debentures 900.000.658. or were agreed to be issued as fully or partly paid for in cash or for a consideration other than cash. . In terms of Section 58 of the said Act.000 with an option to raise a further LKR 500. In 2012.000. .610 shares. .000 unlisted debentures 590.000. were proposed to be issued.000 unlisted debentures 10. . There was no change to the stated capital resulting from such subdivision.000 LKR 250.829. (3) (4) (5) Save as disclosed under “ Share Capital and Shareholders ”. the said Act uses the concept of “stated capital”.000 LKR 59. April 30.000 units 278 .604. no debentures of our Company or our subsidiary had been issued.168 shares.500. 2012 .084 shares to 9.000. 2013 . 10. no shares in our Company or our subsidiary had been issued.000.000 Rated Unsecured Redeemable Debentures listed on the Colombo Stock Exchange with an option to issue up to a further 5.000 units 2. Instead. .000 unlisted debentures 2.000 shares. LKR 356.000 3. 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.000 shares to 80. 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. 2012 .000 unlisted debentures LKR 1. .000 units October 1. .560.000 units LKR 1.000 unlisted debentures 4. . 2011.000 LKR 100 Balance sheet restructuring Balance sheet restructuring Balance sheet restructuring Balance sheet restructuring Balance sheet restructuring Balance sheet restructuring Balance sheet restructuring 3. . 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. .209. There was no change to the stated capital resulting from such subdivision.000.440. .000 units 590.000. were proposed to be issued. On March 31.000. .000 units December 24 2012 .000.000. . 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. .000 LKR 100 LKR 100 LKR 100 LKR 100 10. July 25.000. October 25. 2010. LKR 400. . or were agreed to be issued as fully or partly paid for in cash or for a consideration other than cash. .000.000.000 units 900.000 LKR 90.500. May 10. within the three years preceding the Latest Practicable Date. 2010. 2012 . 2012 . 7 of 2007 of Sri Lanka does not recognize the concept of “paid-up capital”.000. . .

. 3 and 4 years 750.000.12 whereby the Creditors agreed. Krungthai Bank Public Company Limited. .102. . 2013 . 2009 (“Agreement”) with TMB Bank Public Company Limited.000.000 Senior Secured debentures guaranteed by Singer Thailand PCL *Tenor 3 years 320.000.500.000. According to the letter of TMB Bank Public Company Limited who acted as the security agent for the Creditors dated October 8.56 and default interest of Baht 4. as working capital and for business expansion 600. the debts had been paid in full.000 units Note: (1) Singer Thailand Public Company Limited had entered into the Debt Rescheduling Agreement dated November 13.000 Baht For repayment of debts under the Debt Rescheduling Agreement. 2009 in the principal amount of Baht 1. ..000 rated unsecured redeemable debentures to be listed on the Colombo Stock Exchange. The Agreement was terminated and all debts were paid in full in October 2012. Number of Units of Debentures 3.000 Issue Price per Unit LKR 100 Purpose of Issue/ Reduction Balance sheet restructuring Balance sheet restructuring Resultant Issued Debentures 3.000 Baht For repayment of debt to Singer Thailand PCL 320.000.000. 7.000. dated November 13. Bangkok Bank Public Company Limited. among other things. 2013 . with an option to issue a further 5. Ltd.000 units Singer Finance (Lanka) PLC August 29. May 10. The Company’s land and buildings were mortgaged as security in favor of the Creditors.000 units Singer Leasing (Thailand) Co. .000 units THAILAND Singer Thailand Public Company Limited(1) May 11.000.000 units May 31. .000 Baht 1. . . LKR 300. unpaid interest of Baht 127.000 unlisted debentures 3. 279 .000 LKR 100 To support general business growth and to minimize short term funding exposures 12.148.000.012.000. . 2010 . 2012 . 320.000 Unsubordinated unsecured debentures *Tenor 1. ACL Bank Public Company Limited.000.000 unlisted debentures Aggregate Consideration LKR 300.250. 2.000 Baht 1. CIMB Thai Bank Public Company Limited.Date of Issue May 31. The Siam Commercial Bank Public Company Limited. . 750.515.000 LKR 100 3. 2009. to reschedule the loan repayment and interest payment.179. United Overseas Bank (Thai) Public Company Limited.500. 2010 . Up to LKR 1. Kasikornbank Public Company Limited. All mortgaged properties were released in November 2012. .444. 2012.54. Siam City Bank Public Company Limited and Muang Thai Life Assurance Company Limited (the “Creditors”) to reschedule of outstanding debts as at September 30.

11. and the expectation that the banks will continue to provide financing after Sewko is listed. whether direct or indirect. Material Contracts 12. our Directors are not aware of any event which has occurred since March 31. Our Directors are of the opinion that. our Company does not have any material relationship with the Sole Global Coordinator.Working Capital 10. Except as disclosed under “ Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – Borrowings ”. 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. No expert is employed on a contingent basis by us. Except as disclosed in “Plan of Distribution – Other Relationships ”. 16. or has a material economic interest. Our Directors’ opinion takes into account the business model of our Group (where we provide consumer finance to our customers. charges. guarantees or other material contingent liabilities. 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. 2013 (which is more than adequate to meet the present working capital requirements of our Group). hire purchase commitments. in our Company including an interest in the success of the Offering. we have adequate working capital to meet our present requirements. and the cash paid by the customer is a fraction of the product cost with the remainder financed by our bank facilities). we have. There are no contracts. 2013 and up to the Latest Practicable Date. banks who continue to provide finance to support the growth of our Group. 280 . No commission. mortgages. after taking into consideration our present banking facilities and cash position. whether direct or indirect. which may have a material effect on our financial position and results. as at the Latest Practicable Date. 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. 15. the performance of our Group. 2013 − Subsequent Events ” found in the Notes to the condensed combined interim financial statements. our Group’s unutilized bank facilities of US$75. or any other financial advisor in relation to the Offering. Underwriter and Issue Manager. 2010. 14. promoter. in the shares of our Company or our subsidiaries. not being contracts entered into in the ordinary course of business.5 million as at March 31. as at the date of lodgment of this offering document. Bookrunner. or has a material interest. 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. expert. Miscellaneous 13. Save as disclosed under the “ Combined Financial Statements of our Group for the Years Ended December 31. 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.

Securities Act. 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. 18. 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.S. 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.S. 19. Bookrunner. that to the best of their knowledge and belief.S. our Company and its subsidiaries. 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 ”. The Hongkong and Shanghai Banking Corporation Limited. 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. KPMG Phoomchai Audit Limited and KPMG LLP not filed a consent under Section 7 of the Securities Act. 281 . Singapore Branch as the Sole Global Coordinator. “ Appendix J − Independent Joint Reporting Accountants’ Report on the Unaudited Condensed Combined Interim Financial Statements ”. Underwriter and Issue Manager. this offering document constitutes full and true disclosure of all material facts about the Offering.Consents 17. 2012 ” and “ Appendix N − Independent Reporting Accountants’ Report on the Pro Forma Combined Statement of Financial Position as at March 31. which is applicable only to transactions involving securities registered under the U. 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. Securities Act. Responsibility Statement by our Directors and the Vendors 20. Where information in this offering document has been extracted from published or otherwise publicly available sources or obtained from a named source. Securities Act. 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. As the Shares in the International Offering have not and will not be registered under the U. 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. “ Appendix L − Independent Reporting Accountants’ Report on the Pro Forma Combined Statement of Financial Position as at December 31. 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.

the Vendors and the Sole Global Coordinator.. Copies of the following documents may be inspected at 50 Raffles Place. None of World Bank. to the inclusion of the information cited and attributed to it. the report referred to in paragraph 18 above. Underwriter and Issue Manager have taken reasonable actions to ensure that the market forecasts. 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.P. While we. Bookrunner. for purposes of Section 249 of the Securities and Futures Act. and the rules of the Sewko Employee Share Option Scheme. 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. the Vendors. Bookrunner. Singapore Land Tower. 282 . the Sole Global Coordinator. and is thereby not liable for such information under Sections 253 and 254 of the Securities and Futures Act.Documents Available for Inspection 21. (b) (c) (d) (e) (f) Sources 22. Bangladesh Bureau of Statistics. 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. #32-01. We have included the information from these sources in its proper form and context in this offering document. 2010. in this offering document. 2012 and 2013. exchange rates or other information have been reproduced in their proper form and context. we. the Central Statistical Organisation in India. the service agreements referred to in “ Management – Service Agreements ”. the combined financial statements of our Company and our subsidiaries for the years ended December 31. the letters of consent referred to in paragraphs 17 to 19 above. Bangladesh Rural Electrification Board. Bloomberg L. International Energy Agency and other third party sources has provided its consent. IMF.

excluding treasury shares Shares at the Offering Price.0% or more of the voting shares in the Company.0% Shareholder any person who directly or indirectly holds 10. 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.DEFINED TERMS AND ABBREVIATIONS 10. 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 .

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. 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. earnings before interest. 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 . tax. Pakistan International Financial Reporting Standards International Leasing and Financial Services Limited The Nielsen Company (Singapore) Pte Ltd offers.V. 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. depreciation and amortization Fraser and Neave.V. agreements and options insurance arrangements entered jointly into by Singer Asia and Retail Holdings N.Customs Department Depositor the customs department of Sri Lanka has the meanings ascribed to it in Section 130A of the Companies Act.

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 .S. 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.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.

Chapter 50 of Singapore a public offer of [ ● ] Offering Shares in Singapore the Singapore Code on Take-Overs and Mergers Singer Asia Limited. 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 .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. 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. 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. Bangladesh. India. being an entity formed by Retail Holdings in 2003 to hold interests in Sri Lanka. Pakistan. 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.

ar. the ultimate owner of the SINGER ® trademark Singer (Malaysia) Sdn Bhd Singer Pakistan Ltd. and (iv) other promotional activities a stop order to the Company and the Vendors. Singer (Sri Lanka) PLC Singer Thailand PLC The Hongkong and Shanghai Banking Corporation Limited. I..0% owned indirect subsidiary of SVP Holdings Ltd. issued or sold STL Strategic Initiatives Stop Order 287 . Bookrunner.M. Singer & Company a perpetual distribution agreement between Singer Asia and Singer Sourcing Ltd. Ltd. provides us with real-time business information. (iii) new markets (countries of operation).. among other things. Singapore Branch Singer Thailand Public Company Limited Include (i) new products. financial services and other service offerings.0% owned indirect subsidiary of SVP Holdings Singer Finance (Lanka) PLC Singer India Limited a tailored enterprise resource planning system that.. Underwriter and Issue Manager SRA Stabilizing Manager Singer Retail Academy The Hongkong and Shanghai Banking Corporation Limited. a 100. (ii) new channels of distribution.Singer Bangladesh Singer & Company Singer Distribution Agreement Singer Bangladesh Ltd. including sales. directing that no or no further Offering Shares be allotted. inventory levels and data relating to our consumer finance operations Singer Leasing (Thailand) Co. a perpetual license agreement between Singer Asia and The Singer Company Limited S. a 100.l. 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.

Ltd UCL Asia Partners.P.P. the Vendors and the Sole Global Coordinator. and Singer Sourcing Ltd. owned by UCL Asia Investments. Securities Act Vendor Shares Vendors 288 .S. Underwriter and Issue Manager. U.l.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.’s shares in UCL Asia Holdings VII Limited UCL Asia Investments. Bookrunner. and (iii) area managers and district managers the SINGER ® trademark equity interests in UCL Asia GP. L. L. dated [ ● ] the United States of America United Sales (Pvt. The Singer Company Limited. owned by Tobias Brown UCL Asia Partners. (ii) national sales managers.P. and US USL U.ar. Ltd interest in the Shares and UCL Asia GP Shares shares in UCL Asia Investments Ltd.S.) 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. L. The Singer Company Limited S.’s interests in the Shares and the UCL Asia Holdings VII Shares the underwriting agreement among the Company. (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.

Once a company is listed (or has a security listed) on the Colombo Stock Exchange (“ CSE ”). 2. such as computers.APPENDIX A REGULATION I. Retail and wholesale business is chargeable with NBT on 50. Currently.0% of their liable turnover. financial services VAT is not payable on the basis of turnover but on a value addition basis. which is chargeable on the supply of financial services at the rate of 12. the applicable rate is 12. A number of our products. A-1 . 1. 9 of 2009. 7 of 2007.1 TAXATION Corporate Tax The Inland Revenue Act No. however. and on the importation of goods into Sri Lanka. 13 of 1989. 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. VAT is payable on the supply in Sri Lanka of goods and services. sets out the rules regarding the taxation of corporates. 2.3 Nation Building Tax The Nation Building Tax Act No. 2. 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. as amended. imposes a National Building Tax (“ NBT ”).0% of the liable turnover of such person. such as Singer Finance (Lanka) PLC.4 Excise Duty Under the Excise (Special Provisions) Act. 10 of 2006. are VAT exempt.2 VAT/Sales Tax VAT in Sri Lanka is charged in accordance with the Value Added Tax Act No. 14 of 2002. while distributors are chargeable with NBT on 25.0% of their liable turnover. 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. as amended. 2.0% and exports are generally zero-rated. 2.0%. excise duties are charged on certain articles produced or manufactured in or imported into Sri Lanka. NBT is payable by any person that imports any article (other than personal baggage) into Sri Lanka. as amended. No.0%. are subject to financial services VAT. Unlike conventional VAT. as amended. Companies operating in the financial sector in Sri Lanka. NBT is currently payable at the standard rate of 2. The current applicable rate of corporate tax is 28.

subject to some limited exceptions. Stamp duty of 0. While this has not yet come into force.50. LCD televisions having screens below 32” and electromechanical domestic appliances have zero customs duties. Stamp duty on transfers of land is charged on the value of the land at 3% for the first Rs. 2. several of our products such as computers. In addition to customs duties and excise duties.2. 2. 11 of 1963. a foreign company or a local company with 50. there are also other taxes and levies imposed at import point which are in the nature of surcharges and cess. and (ii) that foreign persons acquiring leasehold rights to state lands in Sri Lanka would have to pay over a tax equivalent to 100. However.8 Other Tax Transfer Tax Until recently.0% of the total lease value (as determined by the Government valuer). a transfer tax was imposed when foreign persons. acquired immoveable property in Sri Lanka. customs duty is levied in Sri Lanka at variable rates on all goods. A-2 . No. However. including premiums.0% or more foreign shareholding. a trade/business tax is payable where a trade or business is being carried on in a property.0% that have been in existence for over 10 years prior to the entering into of the relevant deed of transfer.1% of the secured amount and leases are charged at 1.5 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. The rate is applied on the value of the shares issued/transferred and this may or may not be equivalent to the consideration exchanged.0% for the remaining value. up to a maximum term of 20 years.0% thereafter.0%. as well as on documents such as land-related documents and mortgages. The applicable rate of stamp duty depends on the type of instrument.000 and 2. relates to companies with foreign shareholdings exceeding 50. One such exception. Such rates are based on the assessed value of a property. the Budget Speech for 2013 indicated (i) that there would be a prohibition on foreign persons purchasing state land in Sri Lanka. respectively. It is likely that new enactments giving statutory force to the aforesaid will be passed in the near future. under Part VI of the Finance Act. In addition. certain audio equipment. Mortgages attract a stamp duty of 0.0% of the lease payments for the entire term. 2.0% for the first Rs. This has now been repealed. which is relevant to our companies in Sri Lanka. The circulars provide for a prohibition on transfers of any land (state or private) to a foreign national.000 and 4. or a company whose non-Sri Lankan shareholding exceeded 25. several circulars have been issued to the Registrar of Lands as an interim measure.5% is payable on the share issue forms and share transfer forms which are necessary documents for valid share issues and share transfers.7 Customs Duty Under the Customs Ordinance. share certificates and share transfer forms. Gifts of land attract stamp duty of 3. 100. wares and merchandise imported into or exported out of Sri Lanka.6 Stamp Duty Stamp duty is payable on instruments such as promissory notes.

Capital account transactions include foreign direct investment. With respect to these capital account transactions.2 Foreign Exchange The Government of Sri Lanka has increasingly liberalized current and capital account transactions. finance companies (such as Singer Finance (Lanka) PLC) and insurance companies. This levy is payable at the rate of 1. general permission has been granted by the Exchange Control Department for non-residents/foreigners to invest in securities in Sri Lanka such as shares. units of unit trusts. All proceeds from such investments in securities (such as dividends. Where such investments have not been made through an SIA. Current account transactions include merchandise exports and imports. 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. the successor to the Share Investment External Rupee Account (“ SIERA ”) previously in place for such purpose. 3. 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. 3. entrepot trade. guarantees to non-residents.Crop Insurance Levy In terms of the Finance Act No. foreign currency borrowings by residents. No. investments abroad by residents. 3. 12 of 2013. debentures.1 CUSTOMS/TRADE Imports and Exports (Control Act) The Imports and Exports (Control) Act. the special permission of the Exchange Control Department would be required in order A-3 . treasury bonds and treasury bills provided that the monies relating to such investment are remitted into Sri Lanka through a Securities Investment Account (“ SIA ”). Current account transactions were liberalized in 1994 while regulations on capital account transactions have been gradually relaxed since 2010. There is provision for specified classes of goods to be exempted from this requirement.0% of the profit after tax of the institution and is to be remitted to the National Insurance Trust Fund Board. 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. 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. service payments and income remittances. 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. 1 of 1969. 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. 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 transfers to immigrants and the purchase of patent rights. a crop insurance levy has been imposed on banks. as amended. In relation to foreign direct investment.

Payments made in relation to loans extended under the ECBS may also be routed through the SIA. 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. 2013 to December 31. trademarks. A-4 . 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. 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.000 and US$100. 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. 36 of 2003. Under the ECBS. In this regard. Registration is available for trademarks. INTELLECTUAL PROPERTY Intellectual property rights in Sri Lanka are governed by the National Intellectual Property Act No. Whereas in the recent past the specific permission of the Exchange Control Department was required for borrowings from overseas. 7 of 2003 (“ CAA ”) promotes effective competition in Sri Lanka and restricts any anti-competitive practice that operates against the public interest. and the National Intellectual Property Office of Sri Lanka is mandated to administer the intellectual property system in the country.for proceeds relating to such investments to be later repatriated out of Sri Lanka. industrial designs. established under the CAA. Recent developments have also liberalized the debt financing markets. 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. 2015. The Act covers areas of intellectual property such as copyright. respectively.000 per annum. in relation to which there is no applicable cap. In 2013. unfair competition and undisclosed information. 4. 5. there is a cap of US$100. 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.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. All such investments must be made through an Outward Investment Account opened in a licensed commercial bank in Sri Lanka. Accordingly. Unlike foreign investment into Sri Lanka. can investigate any anti-competitive practice and make an application to the Consumer Affairs Council. prior to the introduction of the SIERA in 1990. the Government has now introduced the External Commercial Borrowing Scheme (“ ECBS ”) which would be in force from January 1. Certain thresholds of investment are applicable depending on the type of business that is proposed to be set up in Sri Lanka. The Consumer Affairs Authority. which is empowered to issue an order terminating any anti-competitive practice that operates against the public interest. the boundaries of investment categories that could be routed through the SIA account were expanded. industrial designs and patents at the National Intellectual Property Office. patents. companies incorporated under Sri Lanka’s Companies Act No. 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. COMPETITION The Consumer Affairs Authority Act No. however.

43 of 1950. 6. in relation to the supply of goods or the provision of services by any person in the course of business to a consumer. with the employee also contributing 8.1 LABOR/PRODUCTION General Employment Laws and Regulations Sri Lanka has wide-ranging laws for the protection of employees. the buyer’s right to quiet possession of the goods. and also provides for the notification and investigation of accidents or industrial diseases. 6. In terms of the Employees’ Trust Fund Act No. The Sale of Goods Ordinance provides for terms to be implied into sales contracts regarding the seller’s right to sell the goods. These amounts are deposited in an employee’s name and are available to be drawn out when he exits the workforce in Sri Lanka.3 Gratuity Under the Payment of Gratuity Act No.0% of the total earnings of an employee to the Employees’ Trust Fund. Occupational safety and health are dealt with in the Factories Ordinance and the Workmen’s Compensation Ordinance. the registration of factories and the approval of factory buildings by the Chief Factory Inspecting Engineer or the District Factory Inspecting Engineer. as amended. Such laws range from those governing the terms and conditions of employment. 6. Similar terms are also implied into contracts through the provisions in the CAA. the employer is also required to contribute a further 3. such as the Maternity Benefits Ordinance and the Employment of Women. A-5 . 12 of 1983.0% of his total earnings to the Fund. 19 of 1954 and the Wages Board Ordinance. young persons and children. 46 of 1980.6.4 Factories Ordinance The Factories Ordinance was enacted to provide for the safety and welfare of workers in factories. 6. 47 of 1956. as amended. and the Termination of Employment of Workmen (Special Provisions) Act No. The amount payable is half of the last drawn monthly salary of the employee per year of employment with the employer. 15 of 1958 to contribute 12. Young Persons and Children Act No. conditions relating to the quality and fitness of the goods and the fact that goods sold by description should match that description. to special laws which regulate the employment of women. 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. 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. There are also special laws relating to employment disputes such as the Industrial Disputes Act No. such as the Shop and Office (Regulation of Employment and Remuneration) Act No. 45 of 1971.5 Sale of Goods Ordinance The principal activities carried out by our companies in Sri Lanka include the sale and supply of goods and services. In this regard it is especially noteworthy that Sri Lanka does not allow employees to be fired at will. The Factories Ordinance stipulates substantial health and safety requirements.0% of the total earnings of an employee each month to the Employees’ Provident Fund.

There is provision for specified activities which cause pollution to be carried out upon obtaining an Environmental Protection License from the Central Environmental Authority. as is relevant to Singer (Sri Lanka) PLC. 6. regulations have been issued directing all manufactures.6 Unfair Contract Terms Act No. storage. Further regulations have been published under the NEA relating to areas such as waste management. The NEA provides for the protection of the waters.6. 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. restrictive trade practices or any other forms of exploitation of consumers by traders. For example. The CAA also enables consumers to make complaints to the Consumer Affairs Authority. as amended (“ NEA ”). 6. soil and surface land of Sri Lanka from pollution. 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. sale or manufacture of any goods. which investigates claims. price marking. The Consumer Affairs Authority has been given the power to issue general directions to manufacturers or traders regarding labeling. 26 of 1997 operates to restrict the ability of persons to avoid liability for negligence and breach of contract. as amended (“ CCA ”). 26 of 1997 The Unfair Contract Terms Act No. 29 of 1982. noise pollution and ozone-depleting materials. respectively. 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. This protects consumers and prevents sellers from excluding liability in relation to breaches of the implied conditions referred to above. The Consumer Affairs Authority also has the power to determine specific standards and specifications relating to the production. protecting consumers against unfair trade practices.9 Environmental Laws The main environmental laws applicable in Sri Lanka are contained in the National Environmental Act No. as well as special directions to any class of manufacturers or traders specifying when and where such goods may be sold. ensuring that consumers have adequate access to goods and services at competitive prices and redressing unfair trade practices.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. atmosphere. Breaching these regulations is an offense.8 Hire Purchase Contracts Hire purchase contracts are governed by the Consumer Credit Act No. supply. A-6 . read together with the regulations published thereunder. transportation and sale of any goods or the supply of any services. 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. 6. 47 of 1980. packaging. The CCA sets out the requirements applicable to the formation of hire purchase contracts and the rights and duties of the hirer and owner. manufacture.

liquidity of assets. notices and guidelines to registered finance companies and registered finance leasing establishments in terms of the FBA and FLA. capital adequacy framework. notices and guidelines are issued in areas such as minimum capital requirements. The Department of Supervision of Non-Bank Financial Institutions of the Central Bank of Sri Lanka acts in a supervisory/monitoring role and. The Registration of Title Act is currently being enforced in stages and is in operation in specified areas of Sri Lanka. land-related documents such as deeds of transfer or lease agreements require registration at the land registry in which the relevant land is situated. being a registered finance company and a registered finance leasing establishment. 21 of 1998 Under the Registration of Documents Ordinance. respectively. gross assets in excess of Rs.7. bank/financial liabilities in excess of Rs. issues directions. public corporations engaged in the sale of goods or the provision of services. single borrower limits. although title or rights to the land would not be extinguished by lack of registration. 300 million. finance companies. 7. which includes listed companies. 46 of 2000 Singer Finance (Lanka) PLC. 7. 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. 15 of 1995 and its regulations have defined certain enterprises as “ Specified Business Enterprises ”. 7. the provisions of the Finance Business Act No.1 COUNTRY SPECIFIC Accounting and Auditing Standards Act No. interest rate caps on deposits.3 Finance Business Act No. as amended (“ FLA ”). in order for such documents to get priority. 500 million. 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. 21 of 1998. Such directions. A-7 . Sri Lanka is moving towards registration by title with the enactment of the Registration of Title Act No. 46 of 2000. and companies having a turnover in excess of Rs. 100 million or over 1. 42 of 2011 (“ FBA ”) and the provisions of the Finance Leasing Act No. 15 of 1995 The Sri Lanka Accounting and Auditing Standards Act No. 100 million.2 Registration of Documents Ordinance and the Registration of Title Act No. operates in a regulated industry and is subject to the supervision of the Central Bank of Sri Lanka. leasing companies. together with the Monetary Board. shareholders’ equity in excess of Rs. respectively. 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. corporate governance and the write-offs/provisions for loans and bad debts. 42 of 2011 and the Finance Leasing Act No.000 employees.

indemnity. A-8 . parties to such performance. instead it consists of a number of limiting principles under which the parties may create rights and duties for themselves. such as insider trading provisions. trade organizations.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 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. then a tax rate of 37.5%.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. disclosure.5% will be applicable.2 Companies Act 1994 The Companies Act 1994 requires continuing compliance in areas such as the holding of board and shareholder meetings. breach of contract and its consequences. These regulations and rules aim to ensure transparency. then a rebate of 10. 2. If a publicly traded company declares or pays a dividend which is more than 20. guarantee. 2.0% of capital. the Act establishes the office of the Registrar of Joint Stock Companies and Firms which acts as a registrar for limited companies. the filing of annual and other periodic returns regarding directors.1 TAXATION Corporate Tax Publicly traded companies (companies listed with any stock exchanges in Bangladesh. 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. other than companies in certain industries) are taxed at a rate of 27. as specified by the SEC. 1. The Act deals with areas such as the making of valid agreements or contracts. bailment. It also prescribes penalties for delays and failures in complying with numerous requirements. performance. special and extraordinary resolutions. agency and the effect of contracts through agency. societies and partnership firms. and the issue of capital. 1. Further. 1. 1. keeping a share register and a register of members.0% of the tax payable is available.0% of the company’s capital. quasi-contracts. preparing and filing an annual balance sheet and updating the books. The Act does not specify rights. If a publicly traded company declares or pays a dividend at less than 10.II. share transfer. accounts and registers. or fails to pay a dividend within 60 days from the date of declaration. maintenance of books. market discipline and the orderly advancement of the market.

i. “primary” duty and supplementary duty may lead to miscalculation and appeals.3 VAT/Sales Tax Under the Value Added Tax Act 1991 (“ VAT Act ”). Under Section 84 of the ITO. Any order by the VAT commissioner may be appealed to the VAT Appellate Tribunal and finally to the Supreme Court. where the goods were socially undesirable. 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. VAT is payable at a rate of 15.2 Income Tax The Income Tax Ordinance 1984 (“ ITO ”) provides for the assessment and levy of tax on income. service providers. the DCT can serve a notice for assessment where income has escaped assessment.0%. and services provided by a service provider or distributor.e. all assesses are required to file returns by a specified date. he may require the assessee to file a revised return with the requisition of further documents. There is a provision in the VAT Act for imposition of a supplementary duty on goods. 2. goods manufactured in Bangladesh. 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. The value of a good or service to be taxed is usually determined by the National Board of Revenue by notification.2. A-9 .0% on imported goods. there were three specific grounds on which such supplementary duty could be imposed. he can use his best judgment to determine the income tax payable. if the Deputy Commissioner of Taxes (the “ DCT ”) (the officer primarily charged with assessing income to tax) finds any errors or omissions. The Government of Bangladesh has entered into Double Taxation Treaties with more than 26 countries. All distributors. all income deemed to have accrued or arisen in Bangladesh is subject to income tax. where the DCT feels that the assessee has failed to produce all required documents. Section 44 of the ITO provides for exemptions to and allowances for certain income.4 Other Tax Capital Gains Tax on Sale of Shares of Listed Companies The capital gains of companies. Originally. luxury items or non-essential items.. After filing. 2. which can lead to arbitrary decisions. importers and exporters must register with the VAT authority under the VAT Act. Under Section 93 of the ITO. Under Section 75 of the ITO. the DCT may also require the assessee to appear and produce any evidence in support of the return. 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. Under Section 83 of the ITO. Under Section 18 of the ITO. The calculation of VAT. 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.

including the assessment and collection of customs duty. Customs clearance for an export takes approximately three to five working days. The office of the Chief Controller of Imports and Exports also issues Import Policy Orders. exporter or cargo and freight agent must obtain 43 permissions to release consignments. The FERA also provides that no person in or resident of Bangladesh may. 3.1 Import and Export (Control) Act 1950 The government may publish an Order prohibiting. 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. make any payment to. as does import clearance. subsequent amendments and modifications issued from time to time. and the import and export of currency and bullion. restricting or otherwise controlling goods being imported or exported into Bangladesh or elsewhere.2 Foreign Exchange The Foreign Exchange Regulation Act 1947 (“ FERA ”) regulates payments and dealings in foreign exchange and securities. exports. without the general or special permission of the Bangladesh Bank.3. imports. any person resident outside Bangladesh. The Customs Act and the Import and Export (Control) Act 1950 are important to private sector investment. an importer. The Customs Act sets out goods which are dutiable and the rate at which the duty is charged. It provides for the valuation of goods for the purpose of assessing of duties. or for the credit of. general authorization (or exemption) is granted to banks for extending working capital loans to foreign owned and controlled companies. and also for penalties for breach of these provisions. Details regarding general or special permission and provisions in relation to letters of credit. The FET Guidelines are to be read in conjunction with other instructions. In order to berth at the Chittagong port.3. payments of dividends to non-resident shareholders and other such forms of payments are given in the FET Guidelines. 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. and public notices. 3. The Guidelines for Foreign Exchange Transactions (“ FET Guidelines ”) have been published by the Bangladesh Bank to summarize instructions issued under the FERA. such as the Import Policy Order 2009-2012. the warehousing of goods under bond. VAT. incoming and outgoing vessels have to fill out a total of 40 forms. supplementary duty. 3. and provides for the procedures for import and export of goods and the collection of duties thereon. However. 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 A-10 .1 CUSTOMS/TRADE Customs The Customs Act 1969 (“ Customs Act ”) and the VAT Act established the powers of the Customs Department. regulatory duty and advance income tax. In airport customs in Bangladesh. whereas other ports around the world require only seven.3 Foreign Trade 3.

or results in bid rigging or other fraudulent practices. deceiving the customer by deceptive or false advertisement with the objective of selling any service.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. 3.1 COMPETITION Competition Law Act 2012 The purpose of the Competition Law Act 2012 is to prevent. providing any service at a price higher than the price specified under any law or regulation. supply. (b) (c) (d) 4. limits or controls the organizations responsible for production.pursuant to the Importers. ammunition and other defense equipment. or the imposition of acceptance of supplementary obligations at the time of purchase. 4. 4. abuse of dominant position. practices which create any barrier for other businesses to access the market. or shares the market by way of allocating a particular geographical area. (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.. all imports must be made by opening an irrevocable power of credit with a local bank. the creation of obstacles that limit or restrict the production of goods and technical and scientific developments of the market or organization. technical development. monopoly and oligopoly. Under the CP Act. not A-11 .3. control and eradicate collusion. 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. 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. etc. Unless otherwise specified. Section 15(2) of the act provides that any agreement. displaying or showing the price list of services. acts that oppose and violate consumers’ rights include not preserving.2 Consumer Protection Act 2009 The Consumer Protection Act 2009 (“ CP Act ”) provides for the protection of consumer rights and interests. or the use of a dominant position in one market to enter into or protect another related market. and other anti-competitive practices in the market and to encourage and ensure a competitive business environment to promote the economic development of Bangladesh. markets. type of good or customer group. Exporters and Indentors (Registration) Order 1981.

the Director General or any officer empowered by the Directorate can temporarily suspend the relevant business. 5. technical. 6. The importer/manufacturer is required to apply for a “Standard Mark”. chemical products. A registered trademark is assignable and transmissible with or without the goodwill of the business. In addition. either directly or indirectly or through a contractor. 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.1 LABOR/PRODUCTION Bangladesh Labour Act 2006 The Bangladesh Labour Act 2006 (“ BLA ”) applies to establishments of various types as defined in the BLA. annual and maternity leave which overrides any employment contract provisions. If any person or organization violates consumers’ rights under the CP Act. conducting work that endangers the life and safety of service receiver. but may be renewed from time to time. unskilled.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. trade promotional or clerical work for hire or reward. BSTI approval is required to import or manufacture any these products. and bringing about a loss of money. 5.1 INTELLECTUAL PROPERTY Patents and Designs Act 1911 The Patents and Designs Act 1911 (the “ PDA ”) provides the rules for new patent applications. pursuant to Section 43(1) of the PDA. referred to as the Certification Mark (“ CM ”). manual. A-12 . The TA provides both civil and criminal remedies in any case of infringement. No person is entitled to institute proceedings to prevent. sick. 5. The BLA provides a statutory entitlement to casual. 7. to do any skilled. or to recover damages for. The BLA applies to “workers”. the term and transmission of patents. defined in section 2(45) as “any person including an apprentice employed in an establishment or industry. in respect of all or some of the goods for which that trademark is registered.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 ”). Furthermore. 7. electronic and electrical products and engineering products. the infringement of an unregistered trademark. health or life of the service receiver through negligence. the BLA also provides entitlement to different benefits such as gratuity and provident funds. jute and textile products. and remedies for any infringement of patent rights. The Directorate also has a surveillance role over service sectors and can impose a marketing ban on any hazardous products. 6. whether the terms of employment be expressed or implied. The registration of a trademark is for a period of seven years.selling or supplying properly the assured services in exchange for the specified price. Mandatory CMs are required for food and agricultural products. but does not include a person employed mainly in a managerial or administrative capacity” (unofficial English translation).

listing of companies and annual fees. listing of subsidiary company and other matters. contracts of sale. and promote investment and development of the economy. the eligibility of potential directors. 1. voluntary de-listing of companies. capital increases by companies/modarabas and allied issues. amendments to the company’s constitutional documents. the constitution of the board of directors and the rights and obligations of directors and shareholders. annual general meetings. 1. The rights of shareholders include election of the board. sale agreements. and goods perishing before sale but after agreement for sale. prospectus.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. Shareholders play a limited role in the operation and management of companies. The Listing Regulations broadly regulate the following areas: • • • • • • • • • • • listing companies and securities.2. issue and transfer of shares. A-13 . goods perishing before making of contracts.2 Public Companies 1. offering capital by companies to the public.2 Sale of Goods Act 1930 The Sale of Goods Act 1930 applies to the sale of goods. suspension and defaulters. and disclosure of material information that may affect the share price.1 Listing Regulations The Listing Regulations of the Pakistan Stock Exchanges (Karachi. allotment. 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. 1. approval of extraordinary transactions and any basic issues specified in the Companies Ordinance or internal company documents. The Companies Ordinance governs and regulates the incorporation and registration of companies in Pakistan including the management of companies. de-listing.7. dividends and entitlements. protect investors and creditors. III.

2. 1. and most recently amended in 2012. The use of unpublished price-sensitive information is a criminal offense. issued by the SECP under the Securities and Exchange Commission of Pakistan Act 1997.3 the composition and function of the board and its committees.The Code of Corporate Governance. The SECP Guidelines apply to persons holding more than 10. sections 15A and 15B of the Securities and Exchange Ordinance 1969 (the “ SEC Ordinance ”). and internal audit procedures. powers and functions of the board of directors. 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.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. 2000. discussed below. 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. Any such dealing is punishable under section 15B of the SEC Ordinance.2. 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. the responsibilities. A-14 . corporate and financial reporting. Insider Trading Regulations regarding insider trading in Pakistan are contained in section 224 of the Companies Ordinance 1984.0% 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. proceedings of the meetings of the board of directors. is also a part of the Listing Regulations.2 The Code of Corporate Governance Initially issued by the SECP in 2002. including the following: • • • • • 1.2. 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 the Listed Companies (Prohibition of Insiders Trading) Guidelines dated March 27.

The income tax law requires deductions to be made from certain payments of withholding tax at source. voting agreement or otherwise. which starts from July 1. management right. statute. which is required to be withheld at source at the rate of 10. charter. shareholder agreement.0%. issuers of book-entry securities and account/subaccount holders. These deductions are credited to the recipient of the payment. 2.1 TAXATION Corporate Tax At present corporate tax is payable by a company in Pakistan at the rate of 34. or any applicable document or resolution.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.2 Income Tax The Income Tax Ordinance 2001 provides a system of universal self-assessment. 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. 1. Dividend income is subject to withholding tax. It establishes the rights. profit on debt. dividends.0% of its net income. 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. payments to non-residents. The Substantial Acquisition Law also requires a person acquiring more than 25. income from property and prizes. 2013 and ends on June 30. which taken together with existing shares. Additionally. and in some cases may result in the full discharge of all income tax liability for that income. Every person earning a taxable income has to apply for a National Tax Number (commonly known as “ NTN ”). This reduced rate is only applicable for the tax year 2014. 2014. The term “ control ” includes the right to appoint a majority of the directors or to control the management or policy decisions. The provisions of this Act override any contradictions found in anything contained in the Companies Ordinance or in any other law. 2.0% voting shares or control to make a public announcement of offer to acquire voting shares. This unique number is used for both income and sales tax purposes. duties and obligations of the central depository companies. transfer of book-entry securities and pledging of securities within the book-entry systems.0% of a listed company’s voting. by a person individually or through others acting in concert with him. and tax at the time of import A-15 . would entitle the acquirer to more than 10. Tax is required to be withheld from payments of salary. there are provisions for payment of advance tax.2. The Act also establishes the basis of accounts/sub-accounts in the central depository system. payments for goods and services. memorandum of articles of association.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. 2. whether by virtue of shareholding.

then before its execution in Pakistan by the other party. Generally. in certain cases. 12. the retail price. Punjab and Khyber Pakhtunkhwa. sales tax paid on purchases is offset against sales tax payable on sales.5 Property Tax In the provinces of Sindh. There is now no formal assessment process and all returns filed are considered accepted unless challenged by the Sales Tax Department. 2. Sales tax of 17. it is possible to decentralize record keeping and the filing of returns. Sales tax is payable monthly. wholesalers (including dealers) and distributors are required to be registered with the Sales Tax Department. 2. However. the provinces are now authorized to set up revenue boards. the applicable duty and rates are as listed. less an allowance of 10. The term A-16 . or if executed outside Pakistan by one party.3 VAT/Sales Tax All manufacturers with annual turnover exceeding PKR 5 million. 2. up to one year. retailers with annual supplies exceeding PKR 5 million in value. 2. Exclusions include sales tax paid on goods acquired otherwise than as stock-in-trade. Following the 18th constitutional amendment.0% of the annual value of the land and buildings. such as refrigerators and air conditioning. attract extra sales tax of 0.0% excise duty ad valorem. Annual value is ascertained by estimating the gross annual rent at which the land or building together with its appurtenances may be let. In certain cases it is possible to obtain an exemption certificate. the government may specify by notification urban areas where tax may be levied at the rate of 20. irrespective of where business is conducted. Such certificate has to be obtained by the payee and is generally valid for a specified period of time. In the event that an instrument is executed by both parties outside Pakistan.0% property tax is levied on the annual rental value of properties where annual rent exceeds Rs. Sindh and Punjab provinces have already set up their independent authorities for collecting sales tax on services. importers. sales tax registration is required with the Sales Tax Department’s regional office in the location of the registered office of the company. based on the value of the goods or.0% is payable on goods supplied or imported into Pakistan. Certain specified electronics. In the province of Balochistan. local and imported goods and services provided or rendered in Pakistan are subject to 15.0% for the costs. for goods and services specified in the First Schedule to the Federal Excise Act 2005. then the instrument is required to be stamped within three months of the receipt of the instrument in Pakistan. repairs and all other expenses for maintenance. 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.4 Excise Tax Under the provisions of the Federal Excise Act 2005. which would allow the payer to make payment without such deduction. For companies.75% under sales tax special procedure rules. a 15. However.or export.000.6 Stamp Duty The Stamp Act 1899 (the “ Stamp Act ”) requires the payment of stamp duty in respect of specified instruments before execution in Pakistan.

The rates of duty are set out in Schedule I to the Stamp Act. the federal government publishes. the rates of stamp duty vary from province to province. which could be up to ten times the amount of the stamp duty. All goods. clearance through customs is handled by a clearing and forwarding agent. the issue of securities to non-residents and the import and export of currency and bullion. used or second-hand condition. but since stamp duty is a provincial subject. The customs law contains elaborate provisions for the valuation of goods imported into Pakistan. 2. or on behalf of. 3. Where the proper stamp duty is not paid with respect to any instrument. restricted imports. The rate varies from item to item and product to product. Generally. payable in respect of that instrument or the stamp duty deficit.1 CUSTOMS/TRADE Customs The federal government is empowered to regulate the import and export of goods into or from Pakistan. 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. 3. and goods which may not be imported in old. a non-resident. extinguished or recorded. The specified goods are classified into three basic categories: prohibited imports. However. extended. which may result in enhancement of values for imports from affiliates. Pursuant to this power. The FERA generally requires the special or general permission of the State Bank of Pakistan for payments to. other than those specified. created. transferred. A-17 . from time to time.“instrument” is defined in the Stamp Act to include every document by which any right or liability is. are freely importable from worldwide sources. borrowings in Pakistan by foreign-owned or controlled companies and borrowings from abroad by Pakistani residents. Stamp duty must be paid through the purchase of stamp paper or stamps from the stamp office to make them legally admissible as evidence. or acknowledging a debt to. limited.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). 3.7 Customs Duty Under the provisions of the Customs Act 1969. The customs clearance processes have recently undergone improvements and it is now possible to file bills of entry electronically. or purports to be. import and export policy orders which set out the government’s current policy on the import and export of goods. goods imported into Pakistan are subject to customs duty. the rates of custom duty are lower for imports of raw materials than for manufactured 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. The custom duty payable on goods is specified in the First Schedule to the Customs Act 1969.

Foreign private investment needs to be made in convertible foreign currency (for example U. 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. Subject to the investment being made in foreign currency through normal banking channels (established through a proceeds realization certificate issued by the bank). 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. 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). Although the payment of royalties is limited to five years. including (a) assistance on manufacturing process.S. Paragraph 10 of Chapter XIV of the Foreign Exchange Manual sets out the general exemptions for remittance of any royalty or technical fee. (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. 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. we are not aware of any example where such extension has been granted.The Foreign Exchange Manual. testing and quality control. 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. 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. subject only to the foreign exchange regulations set out above. The Foreign Private Investment (Promotion and Protection) Act 1976 expressly guarantees repatriation of the entire amount of capital and profits realized on investments. Special permission is required from the State Bank of Pakistan for the remittance of amounts exceeding those limits. and (ii) technical training of local personnel. Eighth Edition – 2002. sets out the directions. in the case of a listed company. A royalty or technical fee may not be remitted except with the prior permission of the State Bank of Pakistan. However. A-18 . 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. instructions and orders issued by the State Bank of Pakistan relating to the transactions covered by the FERA. permit or approval is required. No other license. As regards disinvestment proceeds. and technical fee is a fee paid by the local firm to the foreign collaborator in consideration of (i) engineering and technical services.. or the breakup value of shares for an unlisted company. 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. There is no limit on the amount or percentage of royalties or technical assistance fees which may be paid in such cases.

4.0% of the gross amount of the royalty or technical service fee. Registered Designs Ordinance 2000 and the Patents Rules 2003. domain names. subject to deduction of withholding tax.0% of the annual turnover of the entity. Application for registration must be filed within 30 days of execution along with a copy of the agreement. 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. which deals with grant of patent rights for inventions. Section 4 of the Competition Act prohibits and renders void any agreements or arrangements relating to fixing prices. The penalty for contravening the provisions of the Competition Act is a fine of up to PKR 75 million (approximately US$773. unfair competition and comparative advertising. well-known marks. The process for remitting royalty and other payments is set forth in paragraph 10(iv) of Chapter XIV of the Foreign Exchange Manual. 5. Abuse of dominant position arises where any practice is carried on by a person in a dominant position which prevents. 4. the Pakistani company may remit royalties. tie-ins or restrictions on the sale of products of competitors or any other restriction.1 INTELLECTUAL PROPERTY Patents Patents are regulated by the Patents Ordinance 2000. Once registered. restricts. imposing territorial restrictions.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. 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. provided the application for remittance is supported by an auditor’s certificate regarding the amount of royalties sought to be remitted. registration of a mark is not compulsory and a person may use a A-19 . However. reduces or distorts competition in the relevant market. Though the definition is now somewhat limited in its scope.196) or 10. In Pakistan. 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.0% and in the case of pharmaceuticals 4. the definition will greatly assist in the enforcement of patent rights.0% to 6. 5. exclusivity. 5. has introduced a clear definition for a patent. The Patents Ordinance 2000. recently some companies have experienced difficulty in securing increases to the rate of royalties and technical assistance fees.0%. which includes service marks. providing for price discrimination.5% to 3. collective marks. Withholding tax will apply to the remittance to the non-resident at the rate of 15. 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.2 Trademarks The Trade Marks Ordinance 2001 regulates trademarks.Presently.

Employees’ Cost of Living (Relief) Act 1973. computer programs. West Pakistan Employees’ Social Security Ordinance 1965.2 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. dramatic works. artistic works including drawings. A-20 . Employees Old-Age Benefits Act 1976. • • • • • • • • • • 6. cinematographic works and records. Minimum Wages for Unskilled Workers Ordinance 1969. 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. Employer’s Liability Act 1938. and Workers’ Welfare Fund Ordinance 1971. The registration of a trademark is for an initial period of ten years. Industrial Relations Act 2012. but it may be renewed from time to time by making an application on the prescribed form along with the prescribed renewal fee.1 LABOR/PRODUCTION Principal Laws There is no employment law which governs employment terms for management employees. industrial and other establishments in Pakistan. 6. musical works. Such terms are governed by the general laws of contract and the contract of employment. West Pakistan Maternity Benefit Ordinance 1958.3 Copyright Copyright law is governed by the Copyright Ordinance 1962. To make the Ordinance work.mark without being registered. The types of works protected include original literary works. West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance 1968. 5. 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. additional rules are found in the Copyright Rules 1967. Companies Profits (Workers’ Participation) Act 1968. 6. maps and photographs. Payment of Wages Act 1936.

and the enforcement of rights granted to workmen. and the payment of a profit bonus. must be registered with the Deputy Chief Inspector for the area it is situated within. Workman means a person employed to do any skilled or unskilled. in any railway. 6. 6.Every establishment. 6. the avoidance of and settlement of any differences or disputes arising between them. either directly or indirectly. It also contains special provisions relating to retrenchment. a domestic inquiry must be held. industrial or commercial establishment. A-21 . the taking out of group insurance. the Standing Orders Ordinance sets out rules relating to provident funds. other than a one-man shop and factories employing clerical staff within the factory premises. factory. 6. and to pay all outstanding dues payable at termination within two days of such termination. publication of working time. and deductions are permitted by the employer for the provision of housing and/or transport. where termination is for cause. holidays and paydays.6 Industrial Relations Act 2012 The Industrial Relations Act 2012 provides for the formation and registration of trade unions. and wage rates. Further. • • • The Standing Orders Ordinance places certain restrictions on termination of employment and.000 per month. The Act applies to any establishment or industry carrying on business in more than one province in Pakistan. manual or clerical work. The minimum wage in the District of Karachi is PKR 8. transfer and promotion to be provided to the worker in writing.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 Act obligates employers to pay wages regularly in periods not exceeding one month.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.4 Payment of Wages Act 1936 The Payment of Wages Act 1936 regulates the payment of wages to persons employed. the facilitation of relations between employers and workmen. and guarantees certain rights to workmen. The Standing Orders Ordinance requires: • the terms and conditions of appointment. 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.

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. the employer must make a contribution to the Employees Social Security Institution in respect of every employee. 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.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. 6. 6. 6. (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. 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. A-22 . which is deducted from their salary.8 Employees Old-Age Benefits Act 1976 This Act provides for the payment of old-age benefits to persons employed in industrial.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. in respect of each employee.0% of the employee’s wages per month. 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.9 West Pakistan Maternity Benefit Ordinance 1958 The West Pakistan Maternity Benefit Ordinance 1958 guarantees maternity benefits to women working in establishments. Where this law applies. Maternity leave of six weeks is permitted and during this period the employee is entitled to full pay. 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. Currently.0% of their wages per month. It applies to every industry or establishment (a) where 10 or more persons are employed. employment injury or death. 6. commercial or otherwise. and the employer contributes. employees contribute 1. This Act applies to establishments falling under the Shops and Establishments Ordinance. commercial and other organizations. 5. 6. maternity. whether industrial.The Industrial Relations Act 2012 also sets up the National Industrial Relations Commission.

A-23 . States in India have their own Value Added Tax laws. The Central Excise Tariff Act 1985 deals with matters relating to rates of duties to be levied under the Central Excise Act 1944. and for related matters.1 TAXATION Income Tax The Income Tax Act 1961 governs income tax and applies to corporate entities. 2. 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.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. having completed six months of employment with the company during an accounting year. The new Companies Bill has received the assent of the President of India and has been enacted as the Companies Act 2013. IV. 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. 2. or the paid-up capital of the company as on the last day of its accounting year is PKR 2 million or more. management and winding up. 2. 2.If a company engaged in an industrial undertaking fulfils any one of the following conditions.0% of its total income assessable under the Income Tax Ordinance 2001 to the Workers’ Welfare Fund. 1. It deals with matters relating to determination of income.000 or more is required to pay 2. The new law would replace the Companies Act 1956. RELEVANT LAWS AND REGULATIONS – INDIA CORPORATE/COMPANY The Companies Act 1956 is the law that governs companies. all workers. 6. transfer pricing provisions. an industrial establishment whose total income in any year of account is PKR 500. and certain associations’ formation.13 Workers’ Welfare Fund Ordinance 1971 Under section 4 of the Workers’ Welfare Fund Ordinance 1971. operations.3 Excise Tax The Central Excise Act 1944 governs central excise duties. double taxation relief and other matters. 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. • • Under the provisions of the Companies Profits (Workers’ Participation) Act 1968. 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.

2. and provides for matters relating to the levy of tax on services provided or received by various persons.5 Stamp Duty The Indian Stamp Act 1899 provides for stamp duty to be levied on various instruments. 3.8 Other Tax Wealth Tax The Wealth Tax Act 1957 established a wealth tax of 1. such as agricultural. 3 million.4 Property Tax Various state laws levy tax relating to ownership of property. The Customs Tariff Act 1975 consolidates and amends the law relating to customs duties. 2.2. FOREIGN EXCHANGE Foreign investment in Indian securities is regulated through the industrial policy of Government of India and Foreign Exchange Management Act 1999 (“ FEMA ”). The states usually classify immovable property based on use. industrial or institutional.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. Some states in India (including Jammu and Kashmir) have their own stamp duty legislation. The stamp duty in relation to the lease or conveyance of immovable property is prescribed by the respective states where the property is located. A person may sell or draw foreign exchange to or from an authorized person if such sale or draw is a current account A-24 . and contains provisions. relating to levy and collection of customs duties. Under the industrial policy. commercial. and levy different rates of tax. 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. 2. FEMA regulates the precise manner in which such investment may be made. among other things . The Central Government is empowered to make orders and announce foreign trade policy under this law. while other states have simply amended the rates applicable to that state under the Stamp Act. The government bodies responsible for granting foreign investment approvals are the Foreign Investment Promotion Board and the Reserve Bank of India. which applies if net wealth exceeds Rs. and prescribes the rates of duties to be charged under the Customs Act 1962. 2. 4. unless specifically restricted. and for related matters. but the foreign investor is required to follow certain prescribed procedures for making such investment. CUSTOMS/TRADE The Foreign Trade (Development and Regulation) Act 1992 regulates foreign trade by facilitating imports and exports.0% of net wealth after determining the value of certain assets.6 Customs Duty The Customs Act 1962 is a law to consolidate and amend the law relating to customs. foreign investment is freely permitted in all sectors of the Indian economy up to any extent and without any prior approvals.

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.3 Employees’ Provident Funds and Miscellaneous Provisions Act 1952 The Employees’ Provident Funds and Miscellaneous Provisions Act 1952 (“ EPF Act ”) established provident funds. and the prevention of the use of fraudulent marks and infringement. safety and welfare. promote and sustain competition in markets and clear with related matters. 5. 6.2 Trademarks The Trade Marks Act 1999 governs trademarks. assignment and licensing of trademarks. 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. Under the EPF Act. The Act provides for the registration of trademarks for goods and services. COMPETITION The Competition Act 2002 established a commission to prevent anti-competitive practices. as well as civil and other remedies for infringement of copyright. The Act also establishes an Appellate Board. 6.1 INTELLECTUAL PROPERTY Patents The Patents Act 1970 governs patents including suits concerning infringement of patents. Registration of capital and revenue is permitted under the current FEMA regulations for foreign investors. however. the employer and employee are required to contribute a percentage of the employee’s wages (generally 12. copyright societies and international copyright. This is. 7. such as anti-competitive agreements and abuse of dominance. the powers and functions of the Controller and Appellate Board. infringement of patents. subject to any restrictions that the Central Government may impose from time to time.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. 7.3 Copyright The Copyright Act 1957 governs copyright and contains provisions relating to the Copyright Office and Copyright Board. 7.0%) every month to a fund to provide for deferred benefits. A-25 . pension funds and deposit-linked insurance funds for the benefit of employees in factories and other establishments. and international arrangements. 6. 7. 6.1 LABOR/PRODUCTION Factories Act 1948 The Factories Act 1948 regulates the working conditions of factory workers and provides for their health.transaction.

7. Standing orders usually contain matters relating to the classification of workmen. Gratuity is payable at the time of resignation. even though for the purposes of calculation of bonus the maximum salary considered is limited to INR 3. termination of employment and suspension or dismissal for misconduct. and make the conditions known to their workmen.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. maternity and employment injury and for related matters. hours of work and holidays.7. Employers are required to ensure that such minimum wages are paid.000 per month are eligible to get bonuses. superannuation. The Act also contains provisions relating to permitted deductions that may be made from wages. A-26 . death or disablement due to accident or sickness. 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.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.5 Minimum Wages Act 1948 Under the Minimum Wages Act 1948. The employer is required to contribute an amount equal to 4. shift work. 7. 7. The maximum period of leave with wages is 12 weeks. employees drawing wages less than INR 15.500 per month.6 Payment of Wages Act 1936 The Payment of Wages Act 1936 applies to factories and certain other establishments. of which not more than six weeks shall precede the date of a woman’s expected delivery. 7. attendance. retirement.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.000 per month are covered under the ESI Act.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. Currently. Employees drawing a salary up to INR 10. as notified by the appropriate government (Central or State) and