MIRA INFORM REPORT

Report Date :

10.08.2007

IDENTIFICATION DETAILS

Name :	GRUNDFOS (SINGAPORE) PTE LTD

Registered Office :	²⁴^{Tuas West Road, Singapore}^{- 638381}

Country :	Singapore

Financials (as on) :	31.12.2005

Date of Incorporation :	^31/03/1994

Com. Reg. No.:	^199402276N

Legal Form :	^{Pte Ltd}

Line of Business :	Assembly, Sales and Marketing of Pumps

RATING & COMMENTS

MIRA’s Rating :

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Status :	Satisfactory

Payment Behaviour :	Regular

Litigation :	Clear

Subject Company

GRUNDFOS (SINGAPORE) PTE LTD

Line Of Business

ASSEMBLY, SALES AND MARKETING OF PUMPS

Parent Company

GRUNDFOS HOLDING AG

(PERCENTAGE OF SHAREHOLDING: 100.00%)

Financial Elements

FY 2005

COMPANY

Sales : S$101,679,462

Networth : S$15,502,667

Paid-Up Capital : S$1,800,002

Net result : S$4,646,049

Net Margin (%) : 4.57

Return on Equity (%) : 29.97

Leverage Ratio : 2.81

COMPANY IDENTIFICATION

^{Subject
Company: GRUNDFOS (SINGAPORE) PTE LTD}

^{Former Name: -}

^{Business Address:
24 TUAS WEST ROAD}

^{Town: SINGAPORE}

^{Postcode: 638381}

^{County: -}

^{Country: Singapore}

^{Telephone: 6865
1222}

^{Fax: 6861 8402}

^{ROC Number: 199402276N}

^Reg.^Town^{:
-}

SUMMARY

^{All amounts in
this report are in: SGD unless otherwise stated}

^{Legal Form: Pte
Ltd}

^{Date Inc.: 31/03/1994}

^{Previous Legal
Form: -}

^{Summary
year: 31/12/2005}

^{Sales: 101,679,462}

^{Net worth: 15,502,667}

^{Capital: -}

^{Paid-Up
Capital: 1,800,002}

^{Employees: Not
available}

^{Net result: 4,646,049}

^{Share value: -}

^{Auditor: DELOITTE
& TOUCHE}

REFERENCES

^{Litigation: No}

^{Company
status: TRADING}

^{Started: 31/03/1994}

PRINCIPAL(S)

^{ANDERSEN CARSTEN
BLOCH
G5897744L Director}

DIRECTOR(S)

^{SOREN OSTERGAARD
SORENSEN 200913117 Director}

^{Appointed
on: 01/12/1999}

^{Street: MULTEBAERVEJ
45 SEJ}

^DK-8600

^SILKEBORG

^{Town: -}

^{Postcode: -}

^{Country: Denmark}

^{ANDERSEN CARSTEN
BLOCH G5897744L Director}

^{Appointed
on: 01/09/2006}

^{Street: 36 CHUAN PLACE}

^{Town: SINGAPORE}

^{Postcode: 554839}

^{Country: Singapore}

^{LARS HERMAN
PETERSEN 100690786 Director}

^{Appointed
on: 12/04/2005}

^{Street: GYVELVEJ 2, DK-7700}

^{Town: THISTED}

^{Postcode: -}

^{Country: Denmark}

^{TANG WAI KHUEN
DENNIS S1187779F Director}

^{Appointed
on: 20/10/2006}

^{Street: 61
LORONG SARHAD}

^#04-09

^{Town: SINGAPORE}

^{Postcode: 119174}

^{Country: Singapore}

^{TAN CHENG SIEW @
NUR FARAH TAN S6920790A Company Secretary}

^{Appointed
on: 29/06/2007}

^{Street: 97 BEDOK NORTH AVENUE
4}

^#20-1513

^{Town: SINGAPORE}

^{Postcode: 460097}

^{Country: Singapore}

FORMER DIRECTOR(S)

^{ANG SHU KEE
RICHARD S0165921I}

^{CHOO LIANG KOK @
ZHU JINGHUA S0352153B}

^{HELEN CAMPOS THOMAS S1318008C}

^{FENNEL HAROLD
REECE 6315438}

^{BIDSTRUP
PETER A0010551}

^{KRISTENSEN ARNE
KROGH P4708851}

^{JENS JORGEN
MADSEN A001322229}

^{CARLO PROLA 988741B}

^{UFFE BONDE
ERIKSEN 100927888}

ACTIVITY(IES)

^{PUMPS
Code:17745}

^{BASED ON ACRA'S RECORD AS
AT 06/08/2007}

^{1) MANUFACTURE OF
PUMPS (EG HYDRAULIC PUMPS, DRAINAGE PUMPS); SALE & MARKETING OF PUMPS}

CHARGES

No Charges On Premises/Property In Our Database

PREMISES/PROPERTY INFORMATIONS

^{Date: 08/08/2007} ^{Tax rate: 10}

^{Site Address: 24
TUAS WEST ROAD}

^{Town: SINGAPORE}

^{County: - Postcode: 638381}

^{Country: Singapore}

^{Annual
Value: 393,000}

* TAX RATE OF 4% MEANS THE ADDRESS (I.E RESIDENTIAL PROPERTY) IS OWNER OCCUPIED.

* TAX RATE OF 10% MEANS THE ADDRESS (I.E RESIDENTIAL PROPERTY) IS PARTIALLY OR

FULLY RENTED OUT BY THE OWNER/OWNED BY COMPANY.

* FOR PROPERTIES OTHER THAN RESIDENTIAL PROPERTIES REGARDLESS RENTED OUT OR NOT,

THE TAX RATE IS 10% (IE INDUSTRIAL AND COMMERCIAL PROPERTY).

*ANNUAL VALUE IS THE ESTIMATED ANNUAL RENT THE PROPERTY CAN FETCH IF IT WERE RENTED OUT. THE ANNUAL VALUE IS DETERMINED IN THE SAME MANNER REGARDLESS OF WHETHER THE PROPERTY IS LET-OUT, OWNER-OCCUPIED OR VACANT.

BANKERS

^{CITIBANK N.A.}

SHAREHOLDERS(S)

^{GRUNDFOS HOLDING
AG
11,800,002 Company}

^{Street: CH-6300 ZUG SCHWEIZ SUISSE}

^{Town: -}

^{Postcode: -}

^{Country: Switzerland}

FORMER SHAREHOLDER(S)

^{ANG SHU KEE
RICHARD
1}

^{BIDSTRUP
PETER
1}

HOLDING COMPANY

^{GRUNDFOS HOLDING
AG UF12399G %: 100}

SUBSIDIARY(IES)

^{GRUNDFOS PUMPS
PHILIPPINES CO. LTD}

PAYMENT HISTORY AND EXPERIENCES

^{Trade
Morality: AVERAGE}

^{Liquidity: SUFFICIENT}

^{Payments: REGULAR}

^{Trend: UPWARD}

^{Financial
Situation: AVERAGE}

LITIGATION(S)

No Litigation In Our Database

FINANCIAL ELEMENTS

^{All amounts in
this report are in: SGD unless otherwise stated}

^{Audit Qualification: UNQUALIFIED
(CLEAN) UNQUALIFIED (CLEAN) UNQUALIFIED (CLEAN)}

^{Date Account Lodged: 30/08/2006}

^{Balance Sheet Date: 31/12/2005 31/12/2004 31/12/2003}

^{Number of weeks: 52 52 52}

^{Consolidation Code: COMPANY COMPANY COMPANY}

^{--- ASSETS}

^{Tangible Fixed Assets: 7,153,311 5,067,759 5,500,999}

^{Investments 344,532 344,532 -}

^{Total Fixed Assets: 7,497,843 5,412,291 5,500,999}

^{Inventories: 19,323,162 19,281,226 13,450,045}

^{Receivables: 24,186,792 16,358,962 7,771,317}

^{Short Term Fin. Assets: 132,504 - -}

^{Cash,Banks,Securities: 4,177,782 1,974,736 53,310}

^{Other current assets: 3,805,318 2,623,608 3,144,514}

^{Total Current Assets}^{: 51,625,558 40,238,532 24,419,186}

^{TOTAL
ASSETS: 59,123,401 45,650,823 29,920,185}

^{---
LIABILITIES}

^{Equity capital: 11,800,002 4,300,002 1,300,002}

^{Profit & loss Account: 3,702,665 -943,384 -4,176,208}

^{Total Equity: 15,502,667 3,356,618 -2,876,206}

^{Reserve for pensions: 1,385,394 1,236,000 1,081,000}

^{L/T deferred taxes: 362,000 83,000 -}

^{Other long term Liab.: 35,395 18,004 35,128}

^{Total L/T Liabilities}^{: 1,782,789 1,337,004 1,116,128}

^{Trade Creditors: 14,266,968 22,906,647 7,911,193}

^{Short term liabilities: 25,877 35,313 17,948}

^{Due to Bank: 24,007,019 15,978,114 5,111,418}

^{Provisions: 980,400 - -}

^{Other Short term Liab.: 2,557,681 2,037,127 18,639,704}

^{Total short term Liab}^{.: 41,837,945 40,957,201 31,680,263}

^{TOTAL
LIABILITIES: 43,620,734 42,294,205 32,796,391}

^{PROFIT & LOSS ACCOUNT}

^{Net Sales 101,679,462 83,042,303 22,174,584}

^{Purchases,Sces & Other Goods: 83,723,340 68,683,495 -}

^{Gross Profit: 17,956,122 14,358,808 6,580,939}

^{Result of ordinary operations - - 262,983}

^{NET RESULT BEFORE TAX: 5,905,449 3,315,824 206,790}

^{Tax: 1,259,400 83,000 -6,761}

^{Net income/loss year: 4,646,049 3,232,824 213,551}

^{Interest Paid: 530,722 321,017 56,193}

^{Depreciation: 956,781 932,158 -}

^{Directors Emoluments: 967,422 867,830 778,480}

^{Wages and Salaries: 5,359,014 5,158,326 3,641,154}

RATIOS

^{31/12/2005 31/12/2004 31/12/2003}

^{Net result / Turnover(%): 0.05 0.04 0.01}

^{Fin. Charges / Turnover(%): 0.01 0.00 0.00}

^{Stock / Turnover(%): 0.19 0.23 0.61}

^{Net Margin(%): 4.57 3.89 0.96}

^{Return on Equity(%): 29.97 96.31 -7.42}

^{Return on Assets(%): 7.86 7.08 0.71}

^{Net Working capital: 9787613.00 -718669.00 -7261077.00}

^{Cash Ratio: 0.10 0.05 0.00}

^{Quick Ratio: 0.68 0.45 0.25}

^{Current ratio: 1.23 0.98 0.77}

^{Receivables Turnover: 85.63 70.92 126.17}

^{Leverage Ratio: 2.81 12.60 -11.40}

^{Net Margin: (100*Net income loss
year)/Net sales}

^{Return on Equity: (100*Net income loss
year)/Total equity}

^{Return on Assets: (100*Net income loss
year)/Total fixed assets}

^{Net Working capital: (Total current
assets-Total short term liabilities)}

^{Cash Ratio: Cash Bank securities/Total
short term liabilities}

^{Quick Ratio: (Cash Bank securities+Receivables)/Total
Short term liabilities}

^{Current ratio: Total current
assets/Total short term liabilities}

^{Inventory Turnover:
(360*Inventories)/Net sales}

^{Receivables Turnover:
(Receivable*360)/Net sales}

^{Leverage Ratio: Total liabilities/(Total
equity-Intangible assets)}

FINANCIAL COMMENTS

^{THE FINANCIAL
CONDITION OF THE COMPANY WAS SEEN TO BE FAIR IN VIEW} ^{OF THE FOLLOWING:}

^{NET WORTH:}

^{THE BALANCE SHEET
WAS CONSIDERED PASSABLE WITH NET WORTH IMPROVING} ^{SHARPLY BY 3.62 TIMES FROM S$3,356,618
IN 2004 TO S$15,502,667 IN} ^2005.

^{THIS WAS DUE TO
HIGHER ACCUMULATED PROFITS OF S$3,702,665 IN 2005,} ^{AS COMPARED TO THE ACCUMULATED LOSSES
OF S$943,384 IN 2004.}

^{IN ADDITION,
SUBJECT'S SHARE CAPITAL INCREASED BY 1.74 TIMES TO} ^S$11,800,002

^{(2004:
S$4,300,002).}

^LEVERAGE:

^{IN THE SHORT-TERM
IN 2005, SUBJECT WAS LARGELY FINANCED BY AMOUNTS} ^{DUE TO BANKS WHICH MADE UP 57.38%
(2004: 39.01%) OF THE TOTAL CURRENT} ^{LIABILITIES AND AMOUNTED TO
S$24,007,019 (2004: S$15,978,114).} ^{THE BREAKDOWN IS AS FOLLOWS:}

^{-BANK LOANS -
2005: S$22,470,000 (2004: S$15,070,000)}

^{-BANK OVERDRAFTS
- 2005: S$1,537,019 (2004: S$908,114)}

^{HOWEVER, IN THE
SHORT-TERM IN 2004, SUBJECT WAS LARGELY FINANCED BY} ^{TRADE CREDITORS WHICH MADE UP 55.93%
(2005: 34.10%) OF THE TOTAL} ^{CURRENT LIABILITIES AND AMOUNTED TO
S$22,906,647 (2005: S$14,266,968).} ^{THE BREAKDOWN IS AS FOLLOWS:}

^{-OUTSIDE PARTIES
- 2004: S$3,101,477 (2005: S$5,277,957)}

^{-RELATED
COMPANIES - 2004: S$19,805,170 (2005: S$8,989,011)}

^{SUBJECT'S LONG
TERM LIABILITIES ROSE BY 33.34% TO S$1,782,789} ^{(2004: S$1,337,004), AND CONSIST OF THE
FOLLOWING:}

^{-RETIREMENT
BENEFIT OBLIGATION - 2005: S$1,385,394 (2004: S$1,236,000)}

^{-FINANCE LEASES -
2005: S$35,395 (2004: S$18,004)}

^{-DEFERRED TAX LIABILITIES
- 2005: S$362,000 (2004: S$83,000)}

^{IN ALL, LEVERAGE
RATIO FELL FROM 12.60 TIMES TO 2.81 TIMES AS A} ^{RESULT OF A RISE IN TOTAL EQUITY.}

^LIQUIDITY:

^{IN GENERAL,
SUBJECT'S LIQUIDITY SITUATION WAS PASSABLE AS SEEN FROM} ^{THE RISE IN NET WORKING CAPITAL INTO
POSITIVE REGION OF S$9,787,613,} ^{AS COMPARED TO THE NEGATIVE NET
WORKING CAPITAL OF S$718,669 IN 2004.}

^{CURRENT RATIO
ROSE TO 1.23 TIMES, UP FROM 0.98 TIMES AND} ^{QUICK RATIO IMPROVED TO 0.68 TIMES FROM 0.45 TIMES IN 2004.}

^{SIMILARLY, CASH AND
CASH EQUIVALENTS ROSE BY 1.12 TIMES TO} ^{S$4,177,782 (2004: S$1,974,736).}

^{PROFITABILITY:}

^{REVENUE POSTED AN
INCREASE OF 22.44% FROM S$83,042,303 IN 2004 TO} ^{S$101,679,462 AND NET PROFIT ROSE BY
43.71% TO S$4,646,049} ^{(2004: S$3,232,824).}

^{HENCE, NET MARGIN
ROSE TO 4.57% (2004: 3.89%).}

^{DEBT SERVICING:}

^{DEBT SERVICING
PROBLEMS MIGHT NOT BE EXPECTED IF REVENUE AND EARNINGS} ^{CAN BE MAINTAINED AND PAYMENT BY TRADE
DEBTORS ARE FORTHCOMING. IN} ^{ADDITION, ITS INTEREST COVERAGE WAS
HEALTHY AS SHOWN BY ITS INTEREST} ^{COVERAGE RATIO OF 12.13 TIMES
(2004: 11.33 TIMES).}

^{NOTES TO THE FINANCIAL STATEMENTS:}

^{BANK LOANS AND OVERDRAFTS}

^{THE BANK LOANS
AND BANK OVERDRAFTS ARE SECURED BY LETTERS OF} ^{GUARANTEE FROM ITS IMMEDIATE HOLDING
COMPANY, GRUNDFOS HOLDING AG.} ^{THE COMPANY IS NOT CHARGED BY THE
IMMEDIATE HOLDING COMPANY FOR THE} ^{PROVISION OF THE GUARANTEE.}

^{CONTINGENT LIABILITIES}

^{GUARANTEE GIVEN
(UNSECURED) - 2005: S$179,612 (2004: S$495,091)}

^{SHARE CAPITAL}

^{DURING THE
FINANCIAL YEAR, THE COMPANY INCREASED ITS AUTHORISED SHARE} ^{CAPITAL FROM $5,000,000 TO $12,500,000
BY THE CREATION OF 7,500,000} ^{ORDINARY SHARES OF $1 EACH. THE COMPANY
ISSUED 7,500,000 ORDINARY} ^{SHARES OF $1 EACH AT PAR IN SETTLEMENT OF
TRADE PAYABLE OWING TO A} ^{RELATED COMPANY.}

BACKGROUND/OPERATION

^{THE COMPANY WAS INCORPORATED
IN THE REPUBLIC OF SINGAPORE ON} ^{31/03/1994 AS A LIMITED PRIVATE COMPANY AND IS TRADING UNDER THE} ^{PRESENT NAMESTYLE OF "GRUNDFOS (SINGAPORE) PTE LTD".}

^{AS AT 06/08/2007,
THE COMPANY HAS AN ISSUED AND PAID-UP CAPITAL OF} ^{11,800,002 SHARES, OF A VALUE OF
S$11,800,002.}

^{PRINCIPAL
ACTIVITIES:}

^{SUBJECT IS
REGISTERED WITH THE ACCOUNTING AND CORPORATE REGULATORY} ^{AUTHORITY (ACRA) TO BE PRINCIPALLY
ENGAGED IN THE BUSINESS OF:}

^{1) MANUFACTURE OF
PUMPS (EG HYDRAULIC PUMPS, DRAINAGE PUMPS);} ^{SALE & MARKETING OF PUMPS}

^{DURING THE
FINANCIAL YEAR (S) UNDER REVIEW, THE PRINCIPAL ACTIVITIES} ^{OF THE COMPANY ARE THE ASSEMBLY, SALES
AND MARKETING OF PUMPS.}

^{FROM THE RESEARCH
DONE, THE FOLLOWING INFORMATION WAS GATHERED:}

^{BACKGROUND
INFORMATION}

^{- GRUNDFOS SINGAPORE
(GSI) WAS ESTABLISHED IN 1984. THE ESTABLISHMENT} ^{MARKED A}

^{MILESTONE IN GRUNDFOS PRESENCE AND FOCUS IN
THE ASIA} ^{PACIFIC REGION. IT SERVES}

^{THE DOMESTIC SINGAPORE MARKET AS WELL AS} ^{THE EMERGING MARKETS IN NEIGHBOURING}

^{COUNTRIES. A DECADE LATER,} ^{GRUNDFOS HAS ESTABLISHED SUBSIDIARY
SALES COMPANIES IN}

^{MOST ASEAN} ^{COUNTRIES. NOW GRUNDFOS SINGAPORE IS
FOCUSED ON DEVELOPING THE}

^{SINGAPORE
MARKET AND THE MARKETS IN THE PHILIPPINES,
SRI LANKA,} ^NEPAL^{, BATAM,}

^{VIETNAM
AND OTHER COUNTRIES IN INDOCHINA. IN} ^SINGAPORE^{, IT IS A
LEADING SUPPLIER}

^{OF PUMPS AND PUMPING SYSTEMS TO} ^{THE COMMERCIAL AND RESIDENTIAL BUILDING
SERVICES,}

^{INDUSTRIAL AND} ^{OEM MARKETS AS WELL AS MUNICIPAL
DEVELOPMENTS.}

^{- GRUNDFOS
SINGAPORE HOSTS THE ASIA PACIFIC REGIONAL
HEADQUARTERS OF} ^GRUNDFOS,

^{WHICH IS RESPONSIBLE FOR GRUNDFOS SUBSIDIARY
SALES} ^{COMPANIES
IN CHINA, KOREA,}

^{HONG KONG, TAIWAN, MALAYSIA,
THAILAND,} ^INDONESIA^{AND INDIA.
BESIDES SALES}

^{ACTIVITIES, GSI HAS MODERN AND} ^{HIGHLY EFFICIENT ASSEMBLY OPERATIONS,
ADVANCED}

^{TESTING
FACILITIES} ^{AND
EXTENSIVE WAREHOUSING FACILITIES. THE COMPREHENSIVE AND}

^{INTEGRATED CAPABILITIES ALLOW GSI TO PLAY A
COMPETENT ROLE AS THE} ^ASIA^PACIFIC

^{REGIONAL DISTRIBUTION CENTRE AS WELL.}

^ACTIVITIES

^{- MARKETING AND
DISTRIBUTION OF INDUSTRIAL PUMPS}

^{NUMBER OF
EMPLOYEES}

^{- ABOUT 90}

^{SUBJECT IS A
MEMBER OF THE FOLLOWING ENTITY}

^{- SINGAPORE
BUSINESS FEDERATION}

^{QUALITY
ASSESSMENT}

^{- ISO 9001}

^{NO OTHER TRADE
INFORMATION WAS MADE AVAILABLE AS TELE-INTERVIEW WAS} ^{NOT GRANTED ON 10/08/2007.}

^{THE COMPANY IS A
SUBSIDIARY OF GRUNDFOS HOLDING AG, INCORPORATED IN} ^SWITZERLAND^{. THE
COMPANY'S ULTIMATE HOLDING COMPANY IS THE POUL DUE} ^{JENSEN
FOUNDATION, INCORPORATED IN DENMARK.}

^{NUMBER OF
EMPLOYEES (31 DECEMBER)}

^{- COMPANY - 2005:
NOT AVAILABLE (2004: NOT AVAILABLE)}

^{REGISTERED AND
BUSINESS ADDRESS:}

^{24 TUAS WEST ROAD}

^SINGAPORE⁶³⁸³⁸¹

^{DATE OF CHANGE OF
ADDRESS:}

^{- OWNED PREMISE}

^WEBSITE:

^{http://www.grundfos.com.sg}

^EMAIL:

^{andytan@grundfos.com}

^{pbidstrup@grundfos.com}

^{contact-sg@grundfos.com}

MANAGEMENT

^{THE DIRECTORS AT
THE TIME OF THE REPORT ARE:}

^{1) LARS HERMAN
PETERSEN, A DANISH}

^{- BASED IN DENMARK}

^{2) SOREN
OSTERGAARD SORENSEN, A DANISH}

^{- BASED IN DENMARK}

^{3) ANDERSEN
CARSTEN BLOCH, A DANISH}

^{- BASED IN SINGAPORE}

^{4) TANG WAI KHUEN
DENNIS, A SINGAPOREAN}

^{- HOLDS NO OTHER
DIRECTORSHIPS AS RECORDED IN OUR DATABASE.}

SINGAPORE’S COUNTRY RATING 2007

^{INVESTMENT GRADE}

^{IN SINGAPORE, THE
POLITICAL SITUATION REMAINS STABLE.}

^SINGAPORE^{BOASTS THE BEST GOVERNANCE IN ASIA,
WITH AN EFFECTIVE LEGAL SYSTEM} ^{FACILITATING DEBT COLLECTION AND TO A HIGH DEGREE OF FINANCIAL
TRANSPARENCY.}

^{EXTERNAL ACCOUNTS
HAVE REMAINED SUBSTANTIALLY IN SURPLUS, CONTRIBUTED TO THE} ^{DYNAMISM OF THE ELECTRONICS AND
PHARMACEUTICALS SECTORS AND TO REPATRIATION OF} ^{PROFITS FROM SINGAPORE
INVESTMENTS. THE FINANCIAL AND TOURISM SECTORS HAVE ALSO} ^{CONTRIBUTED
TO THE LARGE CURRENT ACCOUNT SURPLUS.}

^SINGAPORE^{CONTINUES TO KEENLY WELCOME FOREIGN
INVESTMENT AND OFFERS A VERY OPEN} ^{AND WELL-PLANNED ECONOMIC AND POLITICAL ENVIRONMENT. IT HAS BEEN IMPLEMENTING} ^{AMBITIOUS DIVERSIFICATION STRATEGY, FOCUSED PARTICULARLY ON THE CHEMICALS
AND} ^{PHARMACEUTICAL SECTORS.}

^{THE GOVERNMENT
USES FOREIGN DIRECT INVESTMENT TO DEVELOP PRIORITY SECTORS} ^{(ELECTRONICS, CHEMICALS,
BIOTECHNOLOGY). THE AIM IS TO ENCOURAGE THE GROWTH OF} ^{HIGH
ADDED-VALUE ACTIVITIES AND TURN SINGAPORE
INTO A REGIONAL HUB FOR FOREIGN} ^{INVESTORS INTERESTED IN ASIA.}

^{CERTAIN SECTORS
(MEDIA, LEGAL AND FINANCIAL SERVICES) ARE HOWEVER ONLY PARTIALLY} ^{OPEN TO FOREIGN INVESTMENT. THESE
SECTORS ARE SLOWLY OPENING UP, BUT THE} ^{PROGRESS IS SLOW.} ^{AFTER
HIGH GROWTH IN 2006, BUOYED BY THE DYNAMISM OF BOTH EXPORTS AND HOUSEHOLD} ^{CONSUMPTION, A SLOWDOWN IS EXPECTED IN 2007.}

^ASSETS

^{" MAJOR
EXPORTER OF CAPITAL IN ASIA, NOTABLY VIA THE
STATE-OWNED TEMASEK HOLDING}

^COMPANY.

^{" HIGH
QUALITY COMPETITIVENESS IN ASIA}

^{" EXCELLENT
BUSINESS CLIMATE}

^{" POLITICAL
STABILITY.}

^WEAKNESSES

^{" SKILLED
MANPOWER HAS BEEN LACKING IN THE SECTORS TARGETED FOR DEVELOPMENT.}

^{" AN AGEING
POPULATION COULD, ULTIMATELY, AFFECT ECONOMIC PERFORMANCE.}

^{" GROWING
INEQUALITY AND THE EMERGENCE OF LONG-TERM UNEMPLOYMENT AMONG THE LEAST}

^{SKILLED COULD GENERATE SOCIAL TENSIONS.}

^{" BEING THE
WORLD'S MOST OPEN ECONOMY, IT HAS BEEN VULNERABLE TO WORLD ECONOMIC}

^DOWNTURNS.

WHOLESALE AND RETAIL TRADE SECTOR

PAST PERFORMANCE

DOMESTIC WHOLESALE TRADE INDEX

THE OVERALL DOMESTIC WHOLESALE TRADE DECLINED BY 7.5% IN Q1 2007. EXCLUDING PETROLEUM, DOMESTIC SALES FELL BY 7.4%. SECTORS OF ELECTRONIC COMPONENTS, SHIP CHANDLERS AND BUNKERING, INDUSTRIAL AND CONSTRUCTION MACHINERY REPORTED DECLINES OF 11.6% TO 23.8%.

HOWEVER, WHOLESALERS OF FOOD, BEVERAGES AND TOBACCO REGISTERED HIGHER TURNOVER OF 5.4%.

FOREIGN WHOLESALE TRADE INDEX

THE OVERALL FOREIGN WHOLESALE TRADE IN QUARTER 1 2007 FELL BY 7.6%. EXCLUDING PETROLEUM, FOREIGN SALES DECLINED BY 8.0%. MOST WHOLESALE SECTORS REPORTED LOWER OVERSEAS RECEIPTS IN QUARTER 1 2007 COMPARED TO THE PREVIOUS QUARTER, EXCEPT HOUSEHOLD EQUIPMENT AND FURNITURE SECTOR. SHIP CHANDLERS & BUNKERING REPORTED THE LARGEST DECLINE OF 18.3% IN QUARTER 1 2007, FOLLOWED BY FOOD BEVERAGES & TOBACCO SECTOR OF 17.7%.

RETAIL TRADE

THE OVERALL RETAIL SALES ROSE MARGINALLY BY 0.7% IN QUARTER 2 2007, COMPARED TO QUARTER 2 2006. EXCLUDING MOTOR VEHICLES, RETAIL SALES ROSE BY 5.1%. SALES OF OPTICAL GOODS & BOOKS, FURNITURE & HOUSEHOLD EQUIPMENT AND SUPERMARKETS ENJOYED STRONG GROWTHS OVER A YEAR AGO. PROVISION & SUNDRY SHOPS, WATCHES AND JEWELLERY, DEPARTMENT STORES AND WEARING APPAREL & FOOTWEAR SECTORS ALSO REPORTED HIGHER SALES OF 4.35 TO 5.9% RESPECTIVELY.

HOWEVER, RETAILERS OF MOTOR VEHICLES, FOOD & BEVERAGES, TELECOMMUNICATIONS APPARATUS & COMPUTERS AND PETROL SERVICES STATIONS REPORTED LOWER SALES.

OUTLOOK

GENERALLY, WHOLESALERS EXPECT TO DO WELL FOR THE NEXT 6 MONTHS, WITH A POSITIVE NET WEIGHTED BALANCE OF 17%. DEALERS OF FOOD & BEVERAGES, TROPICAL PRODUCE, TEXTILES & LEATHER GOODS AND HOUSEHOLD ELECTRICAL APPLIANCE & EQUIPMENT ARE AMONG THOSE WHO ARE OPTIMISTIC.

RETAIL TRADE FIRMS ANTICIPATE BUSINESS TO BE LESS BRISK FOR THE NEXT 6 MONTHS. IN PARTICULAR, DEPARTMENT STORES, SUPERMARKETS AND RETAILERS OF MOTOR VEHICLES EXPECT SLOWER BUSINESS IN THE COMING MONTHS.

EXTRACTED FROM: MINISTRY OF TRADE AND INDUSTRY, SINGAPORE

SINGAPORE DEPARTMENT OF STATISTICS

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average/normal.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
NR		In view of the lack of information, we have no basis upon which to recommend credit dealings	No Rating

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions