MIRA INFORM REPORT

Report Date :

30.08.2007

IDENTIFICATION DETAILS

Name :	PIGEON SINGAPORE PTE. LTD.
Registered Office :	84. Genting Lane No. 05 – 06, City Neon Design Centre, Singapore - 349584
Country :	Singapore
Financials (as on) :	31.12.2006
Date of Incorporation :	14.02.1978
Com. Reg. No.:	197800321C
Legal Form :	Pte Ltd
Line of Business :	Marketing of Baby Products. Manufacturer and Wholesalers of Baby Products

RATING & COMMENTS

MIRA’s Rating :

Ba

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

PIGEON SINGAPORE PTE. LTD.

Line Of Business 

MARKETING OF BABY PRODUCTS

Parent Company

PIGEON CORPORATION

(PERCENTAGE OF SHAREHOLDING: 100%)

Financial Elements

FY 2006

COMPANY

Sales : S$34,157,560

Networth : S$8,451,862

Paid-Up Capital : S$1,670,000

Net result : S$2,029,598

Net Margin(%) : 5.94

Return on Equity(%) : 24.01

Leverage Ratio : 0.66

COMPANY IDENTIFICATION

^{Subject Company : PIGEON SINGAPORE PTE. LTD.}

^{Former Name : -}

^{Business Address : 84 GENTING LANE}

^#05-06

^{CITY NEON DESIGN CENTRE}

^{Town : SINGAPORE}

^{Postcode : 349584}

^{County : -}

^{Country : Singapore}

^{Telephone : 6742 3001}

^{Fax : 6742 3522}

^{ROC Numbe : 197800321C}

^{Reg. Town : -}

SUMMARY

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

^{Legal Form : Pte Ltd}

^{Date Inc. : 14/02/1978}

^{Previous Legal Form : -}

^{Summary year : 31/12/2006}

^{Sales : 34,157,560}

^{Networth : 8,451,862}

^{Capital: -}

^{Paid-Up Capital : 1,670,000}

^{Employees : 50}

^{Net result : 2,029,598}

^{Share value : -}

^{AUDITOR : PRICEWATERHOUSECOOPERS}

REFERENCES

^{Litigation: No}

^{Company status : TRADING}

^{Started : 14/02/1978}

PRINCIPAL(S)

^{TATSUYA SUGO G5952312R Managing Director}

DIRECTOR(S)

^{TAN SOO KIAT S2507688E Company Secretary}

^{Appointed on : 07/04/1987}

^{Street : 183 TOA PAYOH CENTRAL}

^#01-286

^{Town : SINGAPORE}

^{Postcode : 310183}

^{Country : Singapore}

^{YUSUKE NAKATA F5599280X Director}

^{Appointed on : 10/08/1998}

^{Street : 2A CORNWALL GARDENS}

^#03-17

^{2 ATHE CORNWALL}

^{Town : SINGAPORE}

^{Postcode : 269678}

^{Country : Singapore}

^{TATSUYA SUGO G5952312R Director}

^{Appointed on : 15/04/2007}

^{Street : 70 DALVEY ROAD}

^#02-04

^{Town : SINGAPORE}

^{Postcode : 259469}

^{Country : Singapore}

^{TATSUYA SUGO G5952312R Managing Director}

^{Appointed on : 15/04/2007}

^{Street : 70 DALVEY ROAD}

^#02-04

^{Town : SINGAPORE}

^{Postcode : 259469}

^{Country : Singapore}

^{YOICHI NAKATA MR6581771 Director}

^{Appointed on : 16/04/2005}

^{Street : 2-5-49 HIGASHIKAIGANMINAMI}

^{CHIGASAKI-SHI, KANAGAWA-KEN}

^{Town :}

^{Postcode :}

^{Country : Japan}

^{KAZUHIKO OTA TF4796430 Director}

^{Appointed on : 10/08/1998}

^{Street : 1-21-12 TAKAIDO-NISHI}

^SUGINAMI-KU

^{Town : TOKYO}

^{Postcode :}

^{Country : Japan}

FORMER DIRECTOR(S)

^{FUJITA KOOSEI E3125816}

^{SHIKAWA HIKARU E3921249}

^{SAKAMOTO KEN E402201}

^{NAKATA YUICHI E4102048}

^{MIYAKE HIROYUKI SE9281593}

^{OMURA KENJI G8772414}

^{OGAWA TETSUO H0656779}

^{TSUKUDA TAIJI SH0815170}

^{OTA KAZUHIKO L4693012}

^{KITAZAWA NORIMASA SM0795113}

^{YAMAMOTO HARUMI SN1950665}

^{MIZUNOE HIROYUKI N3962267}

^{SUDA TETSURO SN9108509}

^{ISAO KOSAKA MZ0124352}

^{KENTARO KOBAYASHI TE2203335}

ACTIVITY(IES)

^{BABY PRODUCTS - WHSLE And MFRS Code:1340}

^{TRADING COMPANIES Code:22190}

^{TOYS - MFRS Code:22090}

^{BASED ON ACRA'S RECORD AS AT 27/08/2007}

^{1. MANUFACTURE OF ELECTRO-MECHANICAL TOYS; TRADING BABY PRODUCTS & MANUFACTURING OF NIPPLES}

CHARGES

No Charges On Premises/Property In Our Database

PREMISES/PROPERTY INFORMATIONS

No Premises/Property Information In Our Databases

BANKERS

^{No Bankers Information In Our Database}

SHAREHOLDERS(S)

^{PIGEON CORPORATION 1,670,000 Company}

^{Street : 4-4 NIHONBAHSI HISAMATSU-CHO}

^{CHUO-KU, 103-8480}

^{Town : TOKYO}

^{Postcode :}

^{Country : Japan}

FORMER SHAREHOLDER(S)

^{PIGEON CO LTD 1,670,000}

HOLDING COMPANY

^{PIGEON CORPORATION UF14306M % : 100}

SUBSIDIARY(IES)

No Participation In Our Database

PAYMENT HISTORY AND EXPERIENCES

^{Trade Morality : AVERAGE}

^{Liquidity : SUFFICIANT}

^{Payments : REGULAR}

^{Trend : UPWARD}

^{Financial Situatio : AVERAGE}

LITIGATION(S)

No Litigation In Our Database

FINANCIAL ELEMENTS

^{All amounts in this report are in: SGD}

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

^{Date Account Lodged : 27/07/2007}

^{Balance Sheet Date : 31/12/2006 31/12/2005}

^{Number of weeks : 52 52}

^{Consolidation Code: COMPANY COMPANY}

^{--- ASSETS}

^{Tangible Fixed Assets: 785,130 675,120}

^{Total Fixed Assets: 785,130 675,120}

^{Inventories: 2,372,422 2,515,456}

^{Receivables: 8,446,170 5,891,349}

^{Cash,Banks, Securitis: 2,235,579 2,653,184}

^{Other current assets: 206,220 125,756}

^{Total Current Assets: 13,260,391 11,185,745}

^{TOTAL ASSETS: 14,045,521 11,860,865}

^{--- LIABILITIES}

^{Equity capital: 1,670,000 1,670,000}

^{Profit & loss Account: 6,781,862 5,392,264}

^{TOTAL EQUITY: 8,451,862 7,062,264}

^{L/T deffered taxes: 28,052 25,761}

^{Other long term Liab.: 63,168 111,649}

^{Total L/T Liabilities: 91,220 137,410}

^{Trade Creditors: 4,281,942 3,479,006}

^{Prepay. & Def. charges: 504,449 476,985}

^{Short term liabilities: 48,305 48,305}

^{Due to Bank: 151,121 152,025}

^{Provisions: 516,622 504,870}

^{Total short term Liab.: 5,502,439 4,661,191}

^{TOTAL LIABILITIES: 5,593,659 4,798,601}

PROFIT & LOSS ACCOUNT

^{Net Sales 34,157,560 31,928,092}

^{Gross Profit: 10,224,878 8,788,194}

^{NET RESULT BEFORE TAX: 2,509,197 2,274,938}

^{Tax : 479,599 467,296}

^{Net income/loss year: 2,029,598 1,807,642}

^{Interest Paid: 5,605 5,083}

^{Depreciation: 301,014 257,545}

^{Dividends: 640,000 642,744}

^{Purchases,Sces & Other Goods: 23,932,682 23,139,898}

^{Wages and Salaries: 2,679,944 2,293,833}

RATIOS

^{31/12/2006 31/12/2005}

^{Turnover per employee: 683151.20 638561.84}

^{Net result / Turnover(%): 0.06 0.06}

^{Stock / Turnover(%): 0.07 0.08}

^{Net Margin(%): 5.94 5.66}

^{Return on Equity(%): 24.01 25.60}

^{Return on Assets(%): 14.45 15.24}

^{Dividends Coverage: 3.17 2.81}

^{Net Working capital: 7757952.00 6524554.00}

^{Cash Ratio: 0.41 0.57}

^{Quick Ratio: 1.94 1.83}

^{Current ratio: 2.41 2.40}

^{Receivables Turnover: 89.02 66.43}

^{Leverage Ratio: 0.66 0.68}

^{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}

^{Dividends Coverage : Net income loss year/Dividends}

^{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 IMPROVED BY 19.68% FROM S$7,062,264 IN FY 2005 TO S$8,451,862 IN FY 2006. THIS WAS DUE TO HIGHER ACCUMULATED PROFIT OF S$6,781,862 (2005: S$5,392,264); A RISE OF 25.77% FROM THE PRIOR FINANCIAL YEAR.}

^LEVERAGE:

^{IN THE SHORT-TERM, SUBJECT WAS LARGELY FINANCED BY TRADE CREDITORS WHICH MADE UP 77.82% (2005: 74.64%) OF THE TOTAL CURRENT LIABILITIES AND AMOUNTED TO S$4,281,942 (2005: S$3,479,006). THE BREAKDOWN IS AS FOLLOWS:}

^{-HOLDING CORPORATION - 2006: S$1,024,194 (2005: S$1,051,048)}

^{-RELATED CORPORATIONS - 2006: S$2,297,894 (2005: S$1,798,271)}

^{-THIRD PARTIES - 2006: S$959,854 (2005: S$629,687)}

^{IN THE LONG-TERM, SUBJECT WAS LARGELY FINANCED BY OTHER LONG-TERM LIABILITIES WHICH MADE UP 69.25% (2005: 81.25%) OF THE TOTAL CURRENT LIABILITIES AND AMOUNTED TO S$63,168 (2005: S$111,649). THE BREAKDOWN IS AS FOLLOWS:}

^{-FINANCE LEASES - 2006: S$63,168 (2005: S$111,649)}

^{AMOUNT DUE TO BANKS OF S$151,121 (2005: S$152,025) CONSISTED OF:}

^{-TRUST RECEIPTS - 2006: S$151,121 (2005: S$152,025)}

^{IN ALL, LEVERAGE RATIO FELL FROM 0.68 TIMES TO 0.66 TIMES AS A RESULT OF A GREATER RISE IN TOTAL EQUITY THAN TOTAL LIABILITIES.}

^LIQUIDITY:

^{IN GENERAL, SUBJECT'S LIQUIDITY SITUATION WAS PASSABLE AS SEEN FROM THE RISE IN NET WORKING CAPITAL AND LIQUIDITY RATIOS. CURRENT RATIO ROSE TO 2.41 TIMES, UP FROM 2.40 TIMES AND QUICK RATIO IMPROVED TO}

^{1.94 TIMES FROM 1.83 TIMES IN FY 2005.}

^{SIMILARLY, NET WORKING CAPITAL IMPROVED BY 18.90% FROM S$6,524,554 IN}

^{FY 2005 TO S$7,757,952.}

^{PROFITABILITY:}

^{REVENUE POSTED AN INCREASE OF 6.98% FROM S$31,928,092 IN FY 2005 TO S$34,157,560 AND NET PROFIT ROSE BY 12.28% TO S$2,029,598 (2005: S$1,807,642). HENCE, NET MARGIN ROSE TO 5.94% (2005: 5.66%).}

^{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 CONSIDERING THAT ITS INTEREST EXPENSES WERE LOW AT S$5,605 IN FY 2006 (2005: S$5,083). AVERAGE COLLECTION PERIOD HAS INCREASED FROM 66.43 DAYS TO 89.02 DAYS. A HIGHER AVERAGE COLLECTION PERIOD POSES GREATER RISK OF TURNING INTO BAD DEBTS. HOWEVER, IT IS STILL WORTH NOTING THAT DEBT SERVICING ABILITY MAY NOT BE AFFECTED IF TRADE RECEIVABLES ARE FORTHCOMING.}

BACKGROUND/OPERATION

^{THE COMPANY WAS INCORPORATED IN THE REPUBLIC OF SINGAPORE ON 14/02/1978 AS A LIMITED PRIVATE COMPANY AND IS TRADING UNDER ITS PRESENT NAMESTYLE AS "PIGEON SINGAPORE PTE. LTD.".}

^{THE COMPANY HAS ISSUED AND PAID-UP CAPITAL OF 1,670,000 SHARES OF A VALUE OF S$1,670,000.}

^{PRINCIPAL ACTIVITIES:}

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

^{1. MANUFACTURE OF ELECTRO-MECHANICAL TOYS; TRADING BABY PRODUCTS & MANUFACTURING OF NIPPLES}

^{2. MANUFACTURE OF OUTER GARMENTS; TRADING BABY GARMENTS & TEXTILE ITEMS}

^{DURING THE FINANCIAL YEAR UNDER REVIEW, THE PRINCIPAL ACTIVITIES OF THE COMPANY CONSIST OF TRADING IN BABY PRODUCTS, SILICONE NIPPLES FOR MILK PRODUCTS AND BLISTERING AND PACKING OF IMPORTED PACIFIERS AND EETHERS.}

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

^{SUBJECT ENGAGES IN THE FOLLOWING ACTIVITIES:}

^{* MARKETING OF BABY PRODUCTS}

^{PRODUCTS DEALINGS:}

^{* BREASTFEEDING - BREAST PUMPS AND BREAST CARE}

^{* BREAST PADS}

^{* NIPPLES}

^{* NURSING BOTTLES}

^{* LIQUID CLEANSER AND STERILISATION}

^{* BABY WIPES}

^{* TOILETRIES}

^{* HEALTHCARE}

^{* MAGMAG}

^{* PACIFIERS AND TEETHERS}

^{FROM THE TELE-INTERVIEW CONDUCTED THE FOLLOWING WAS}

^GATHERED:

^{IMPORT COUNTRIES:}

^{* INDONESIA}

^{* THAILAND}

^{* ETC}

^{EXPORT COUNTRIES:}

^{* INDONESIA}

^{* THAILAND}

^{* ETC}

^{THE SUBJECT DOES EXPORTS AND SELLS LOCALLY.}

^{NUMBER OF EMPLOYEES:}

^{* COMPANY - 2007: 50}

^{NO OTHER TRADE INFORMATION IS AVAILABLE}

^{THE IMMEDIATE AND ULTIMATE HOLDING CORPORATION IS PIGEON CORPORATION,}

^{INCORPORATED IN JAPAN.}

^{NUMBER OF EMPLOYEES (31 DECEMBER):}

^{* COMPANY - 2006: NOT AVAILABLE (2005: NOT AVAILABLE)}

^{* GROUP - 2006: - (2005: -)}

^{REGISTERED AND BUSINESS ADDRESS:}

^{84 GENTING LANE}

^{#05-06 CITY NEON DESIGN CENTRE}

^{SINGAPORE 118481}

^{- RENTED PREMISE}

^{- OWNED BY HSBC INSTITUTIONAL TRUST SVC (S) LTD AS TRUSTEE OF ASCENDA}

^{REAL ESTATE INVESTMENT TRUST}

^{- DATE OF CHANGE OF ADDRESS: 30/04/2002}

^{YOUR PROVIDED ADDRESS:}

^{84 GENTING LANE}

^{5-6 CITY NEON DESIGN CENTRE}

^{SINGAPORE 118481}

^{- INCORRECT}

^WEBSITE:

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

^EMAIL:

^{pigeon@pigeon.com.sg}

MANAGEMENT

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

^{1) YUSUKE NAKATA, A JAPANESE}

^{- BASED IN SINGAPORE.}

^{2) TATSUYA SUGO, A JAPANESE}

^{- BASED IN SINGAPORE.}

^{3) YOICHI NAKATA, A JAPANESE}

^{- BASED IN JAPAN.}

^{4) KAZUHIKO OTA, A JAPANESE}

^{- BASED IN JAPAN.}

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.	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