MIRA INFORM REPORT

Report Date :

28.12.2007

IDENTIFICATION DETAILS

Name :	BARUDAN ASIA PTE LTD

Registered Office :	^{39 Tampines Street 92, #03-00} ^{Mediastream Building, Singapore -528883}

Country :	^Singapore

Financials (as on) :	30.09.2006

Date of Incorporation :	^22/12/1990

Com. Reg. No.:	^199006273M

Legal Form :	^{Pte Ltd}

Line of Business :	Sale and Distribution of Computerized Monogramming and Embroidery Machines and Parts.

RATING & COMMENTS

MIRA’s Rating :

RATING		STATUS	PROPOSED CREDIT LINE
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

Status :	Good

Payment Behaviour :	Regular

Litigation :	Clear

Subject Company

BARUDAN ASIA PTE LTD

Line Of Business

SALE AND DISTRIBUTION OF COMPUTERISED MONOGRAMMING AND EMBROIDERY MACHINES AND PARTS.

Parent Company

BARUDAN COMPANY LIMITED

(PERCENTAGE OF SHAREHOLDING: 90.00%)

Financial Elements

^{FY 2006}

^COMPANY

^{Sales :
JPY}^{6,445,078,000}

^{Networth :
JPY}^{1,473,186,000}

^{Paid-Up Capital : JPY}^461,807,000

^{Net result :
JPY}^73,950,000

^{Net Margin(%) : 1.74}

^{Return on
Equity(%) : 9.64}

^{Leverage Ratio :
4.14}

COMPANY IDENTIFICATION

^{Subject Company : BARUDAN ASIA
PTE LTD}

^{Business Address: 39 TAMPINES
STREET 92}

^#03-00 ^{MEDIASTREAM BUILDING}

^{Town: SINGAPORE}

^{Postcode: 528883}

^{Country:
Singapore}

^{Telephone: 6738
2008}

^{Fax: 6738
6008}

^{ROC Number: 199006273M}

^{Reg. Town:}

SUMMARY

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

^{Legal Form: Pte
Ltd}

^{Date Inc.: 22/12/1990}

^{Summary year : 30/09/2005}

^{Sales: 6,445,078,000}

^{Networth : 1,473,186,000}

^{Capital: 492,747,000}

^{Paid-Up Capital: 461,807,000}

^Employees:

^{Net result : 73,950,000}

^{Share value: 1}

^{AUDITOR : PAUL
WAN & COMPANY}

REFERENCES

^{Litigation : No}

^{Company status : TRADING}

^{Started :}^22/12/1990

PRINCIPAL(S)

^{CHOW KIN CHEE S1112531Z Director}

DIRECTOR(S)

^{CHOW KIN CHEE S1112531Z Director}

^{Appointed on : 23/02/1998}

^{Street : 712
UPPER CHANGI ROAD EAST}

^#02-05

^{Town: SINGAPORE}

^{Postcode: 486842}

^{Country: Singapore}

^{KOHEI WATANABE TZ0275169
Director}

^{Appointed on : 20/03/1991}

^{Street : 39
TAMPINES STREET 92}

^#03-00

^{MEDIASTREAM BUILDING}

^{Town:
SINGAPORE}

^{Postcode: 528883}

^{Country: Singapore}

^{LIM LEE TING STEVEN S1517773Z
Company Secretary}

^{Appointed on : 09/04/1991}

^{Street : 13
ST. GEORGE ROAD}

^#20-260

^{Town:
SINGAPORE}

^{Postcode: 320013}

^{Country: Singapore}

^{ISMAIL BIN SENIN S0031623G
Company Secretary}

^{Appointed on : 14/12/2005}

^{Street : 84 LORONG 2 TOA PAYOH}

^#04-325

^{Town: SINGAPORE}

^{Postcode: 310084}

^{Country: Singapore}

^{YUJI MATSUMOTO TG2781582
Director}

^{Appointed on : 17/12/2002}

^{Street : 3-20
SHINONO-KAZE MIDORI-KU}

^{NAGOYA CITY}

^{Town: AICHI-PREF}

^Postcode:

^{Country: Japan}

FORMER DIRECTOR(S)

^{TANG LAI LIN S0125780C}

^{SHIBATA YOSHIO N2261227}

ACTIVITY(IES)

^{EMBROIDERING MACHINES Code:7770}

^{INDUSTRIAL EQUIPMENT And SUPPLIES Code:11830}

^{BASED ON ACRA'S RECORD AS AT 21/12/2007}

^{1) WHOLESALE OF INDUSTRIAL MACHINERY AND
EQUIPMENT; SALE & DISTRIBUTION OF COMPUTERISED MONOGRAMMING &
EMBROIDERY}

CHARGES

^{Date: 02/05/2003}

^{Comments : CHARGE
NO: C200301944}

^{AMOUNT
SECURED: 0.00 AND ALL MONIES OWING}

^{CHARGEE(S):
UFJ BANK LIMITED}

^{Date: 02/07/2002}

^{Comments : CHARGE
NO: 200202880}

^{AMOUNT SECURED: 0.00 AND ALL MONIES OWING}

^{CHARGEE(S):
CITIBANK N. A}

^{Date: 26/05/2000}

^{Comments : CHARGE
NO: 200002334}

^{AMOUNT
SECURED: 0.00 AND ALL MONIES OWING}

^{CHARGEE(S):
THE INDUSTRIAL BANK OF JAPAN LIMITED}

^{Date: 12/08/1999 Amount: 1,500,000}

^{Comments : CHARGE
NO: 199903207 (DISCHARGED)}

^{AMOUNT
SECURED: 1,500,000.00 S'PORE DOLLARS}

^{CHARGEE(S):
CITIBANK N. A}

PREMISES/PROPERTY INFORMATIONS

No Premises/Property Information In Our Databases

BANKERS

^{CITIBANK N.A.}

^{THE BANK OF TOKYO-MITSUBISHI UFJ,} ^{LTD (THE BANK OF TOKYO-MITSUBISHI,} ^LTD)

SHAREHOLDERS(S)

^{BARUDAN COMPANY LIMITED 6,000,000
Company}

^{Street : 20
TSUKAGOSHI JOSUIJI}

^{ICHINOMIYA-CITY AICHI - PREF}

^Town:

^Postcode:

^{Country: Japan}

^{CHOW KIN CHEE 150,000 Private Person}

^{Street :
712 UPPER CHANGI ROAD EAST}

^#02-05

^{Town: SINGAPORE}

^{Postcode: 486842}

^{Country: Singapore}

^{CHIU LAI CHEK 28,000 Private Person}

^{Street : 268
PASIR RIS STREET 21}

^#08-430

^{Town: SINGAPORE}

^{Postcode: 510268}

^{Country: Singapore}

^{TAN BENG HIAN 10,000 Private Person}

^{Street : 420
SERANGOON CENTRAL}

^#08-410

^{Town: SINGAPORE}

^{Postcode: 550420}

^{Country: Singapore}

^{LIM LEE TING STEVEN 150,000 Private Person}

^{Street : 13
ST. GEORGE ROAD}

^#20-260

^{Town: SINGAPORE}

^{Postcode: 320013}

^{Country: Singapore}

^{NGIAM KIA HWEE 10,000 Private Person}

^{Street : 33 CHAI CHEE AVENUE}

^#20-244

^{Town: SINGAPORE}

^{Postcode: 461033}

^{Country: Singapore}

^{YAP KIN WOON 12,000 Private Person}

^{Street : 895
TAMPINES STREET 81}

^#06-924

^{Town: SINGAPORE}

^{Postcode: 520895}

^{Country: Singapore}

^{LIM CHUAN LYE 23,000 Private Person}

^{Street : 30
CEYLON ROAD}

^#03-04

^{CEYLON CREST}

^{Town: SINGAPORE}

^{Postcode: 429623}

^{Country: Singapore}

^{SIM SENG LEE 28,000 Private Person}

^{Street : 726
TAMPINES STREET 71}

^#11-185

^{Town: SINGAPORE}

^{Postcode: 520726}

^{Country: Singapore}

^{WONG SIEW CHENG 8,000 Private Person}

^{Street : 296A
COMPASSVALE CRESCENT}

^#11-297

^{Town: SINGAPORE}

^{Postcode: 541296}

^{Country: Singapore}

^{HO CHIN LAI 23,000 Private Person}

^{Street : 408B
FERNVALE ROAD}

^#21-14

^{Town:
SINGAPORE}

^{Postcode: 792408}

^{Country: Singapore}

^{YOW WAI FONG 10,000 Private Person}

^{Street : 12
CANTONMENT CLOSE}

^#25-13

^{Town: SINGAPORE}

^{Postcode: 080012}

^{Country: Singapore}

^{ONG CHIEW YONG 10,000 Private Person}

^{Street : 520
BEDOK NORTH AVENUE 1}

^#03-352

^{Town: SINGAPORE}

^{Postcode: 460520}

^{Country: Singapore}

^{YUJI MATSUMOTO 30,000 Private Person}

^{Street : 3-20
SHINONO-KAZE MIDORI-KU}

^{NAGOYA CITY}

^{Town: AICHI-PREF}

^Postcode:

^{Country: Japan}

^{KOHEI WATANABE 150,000 Private Person}

^{Street : 39
TAMPINES STREET 92}

^#03-00

^{MEDIASTREAM BUILDING}

^{Town: SINGAPORE}

^{Postcode: 528883}

^{Country: Singapore}

^{KASUMI SHIBATA 30,000 Private Person}

^{Street : 40
AZA-SHINYASIKI ONAZA-KADONA}

^{KISAGAWA MACHI}

^{HAGURI-GUN AICHI KEN}

^Town:

^Postcode:

^{Country: Japan}

FORMER SHAREHOLDER(S)

^{DAISUKE SHIBATA 30,000}

HOLDING COMPANY

^{BARUDAN COMPANY LIMITED UF07145N % :
90.00}

SUBSIDIARY(IES)

^{BARUDAN INTERNATIONAL CHINA LIMITED}

^{BARUDAN MACHINERY (SHANGHAI) CO LTD}

PAYMENT HISTORY AND EXPERIENCES

^{Trade Morality: AVERAGE}

^{Liquidity : SUFFICIENT}

^{Payments : REGULAR}

^{Trend : UPWARD}

^{Financial Situation: AVERAGE}

FINANCIAL ELEMENTS

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

^{Date Account Lodged: 05/07/2007}

^{Balance Sheet Date: 30/09/2006 30/09/2005}

^{Number of weeks: 52 52}

^{Consolidation Code: CONSOLIDATED CONSOLIDATED}

^{---
ASSETS ---}

^{Preliminary Exp 836,048,000 875,072,000}

^{Tangible Fixed
Assets: 31,304,000 21,101,000}

^{Investments
55,274,000}

^{Total Fixed Assets: 867,352,000 951,447,000}

^{Inventories: 297,026,000 408,967,000}

^{Receivables: 3,910,266,000 3,187,433,000}

^{Cash,Banks,
Securitis: 2,434,599,000 1,562,379,000}

^{Other current assets: 59,101,000 105,273,000}

^{Total Current Assets: 6,700,992,000 5,264,052,000}

^{TOTAL ASSETS: 7,568,344,000 6,215,499,000}

^{---
LIABILITIES ---}

^{Equity capital: 461,807,000 461,807,000}

^{Reserves: -5,967,000 -11,095,000}

^{Profit & lost Account: 987,831,000 902,576,000}

^{Surplus equity: 29,515,000 24,183,000}

^{Total Equity: 1,473,186,000 1,377,471,000}

^{L/T deffered taxes: 435,000}

^{Other long term
Liab.: 8,790,000 5,600,000}

^{Total L/T Liabilities: 9,225,000 5,600,000}

^{Trade Creditors: 3,552,837,000 2,468,187,000}

^{Prepay. & Def.
charges: 96,208,000 124,643,000}

^{Short term
liabilities:
3,479,000}

^{Due to Bank: 270,000,000 886,000,000}

^{Provisions: 84,142,000 25,413,000}

^{Other Short term
Liab.: 2,079,267,000 1,328,185,000}

^{Total short term Liab.: 6,085,933,000 4,832,428,000}

^{TOTAL LIABILITIES: 6,095,158,000 4,838,028,000}

^{PROFIT & LOSS
ACCOUNT}

^{Net Sales 8,141,304,000 6,445,078,000}

^{Purchases,Sces & Other Goods:
7,556,233,000
5,822,852,000}

^{Gross Profit: 585,071,000 622,226,000}

^{NET RESULT BEFORE
TAX: 213,224,000 95,673,000}

^{Tax : 71,186,000 21,723,000}

^{Net income/loss year: 142,038,000 73,950,000}

^{Interest Paid: 16,360,000 26,980,000}

^{Depreciation: 12,423,000 18,150,000}

^{Dividends: 56,783,000 66,925,000}

^{Directors Emoluments: 100,559,000 79,759,000}

^{Wages and Salaries: 144,543,000 122,930,000}

^{Financial Income: 40,152 35,725}

RATIOS

^{30/09/2006 30/09/2005}

^{Net result /
Turnover(%): 0.02 0.01}

^{Stock / Turnover(%): 0.04 0.06}

^{Net Margin(%): 1.74 1.15}

^{Return on Equity(%): 9.64 5.37}

^{Return on Assets(%): 1.88 1.19}

^{Dividends Coverage: 2.50 1.10}

^{Net Working capital: 615059000.00 431624000.00}

^{Cash Ratio: 0.40 0.32}

^{Quick Ratio: 1.04 0.98}

^{Current ratio: 1.10 1.09}

^{Receivables Turnover: 172.91 178.04}

^{Leverage Ratio: 4.14 3.51}

^{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)/1000}

^{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 6.95% FROM JPY1,377,471,000 IN FY 2005 TO
JPY1,473,186,000 IN FY 2006. THIS WAS DUE TO HIGHER ACCUMULATED PROFIT OF
JPY987,831,000 (2005: JPY902,576,000); A RISE OF 9.44% FROM THE PRIOR FINANCIAL
YEAR.}

^LEVERAGE:

^{IN THE SHORT-TERM, SUBJECT WAS LARGELY
FINANCED BY TRADE CREDITORS WHICH MADE UP 58.37% (2005: 51.07%) OF THE TOTAL
CURRENT LIABILITIES AND AMOUNTED TO JPY3,552,837,000 (2005: JPY2,468,187,000).
THE BREAKDOWN IS AS FOLLOWS:}

^{-TRADE PAYABLE- 2006: JPY67,961,000 (2005:
JPY19,889,000)}

^{-DUE TO HOLDING COMPANY- 2006:
JPY3,484,876,000 (2005: JPY2,448,298,000)}

^{AMOUNTS DUE TO BANK CONSIST OF:}

^{-SHORT TERM BANK LOAN(SECURED)- 2006:
JPY270,000,000 (2005: JPY886,000,000)}

^{IN THE LONG-TERM, SUBJECT WAS LARGELY
FINANCED BY LONG TERM PAYABLES WHICH AMOUNTS TO JPY8,790,000 (2005:
JPY5,600,000). IN ALL, LEVERAGE RATIO ROSE FROM 3.51 TIMES TO 4.14 TIMES AS A
RESULT OF A GREATER RISE IN TOTAL LIABILITIES THAN TOTAL EQUITY.}

^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 1.10 TIMES, FROM 1.09 TIMES AND QUICK RATIO IMPROVED TO
1.04 TIMES FROM 0.98 TIMES IN FY 2005.}

^{SIMILARLY, NET WORKING CAPITAL IMPROVED BY
42.50% FROM JPY431,624,000 IN FY 2005 TO JPY615,059,000.}

^{PROFITABILITY:}

^{REVENUE POSTED AN INCREASE OF 26.32% FROM
JPY6,445,078,000 IN FY 2005 TO JPY8,141,304,000 NET PROFIT ROSE BY 92.07% TO
JPY142,038,000 (2005: JPY73,950,000). HENCE, NET MARGIN ROSE TO 1.74% (2005:
1.15%).}

^{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 JPY16,360,000 IN FY 2006 (2005:JPY26,980,000).}

^{NON-CURRENT ASSETS:}

^{THE FOLLOWING ITEMS ARE CLASSIFIED UNDER
PRELIMINARY:}

^{-LONG TERM TRADE RECEIVABLE- 2006:
JPY415,246,000 (2005: JPY599,294,000)}

^{-LONG TERM BANK DEPOSITS- 2006:
JPY417,778,000 (2005: JPY235,667,000)}

^{-DEFERRED TAX ASSETS- 2006: JPY3,024,000
(2005: JPY40,111,000)}

^{NOTES TO THE FINANCIAL STATEMENTS:}

^LITIGATION:

^{IN PRIOR YEARS, THE COMPANY WAS SUED BY A
FOREIGN AGENT, PT DUTA BARUDAN FOR AN ALLEGED BREACH OF CONTRACTUAL TERMS IN
RESPECT OF THE DISTRIBUTORSHIP OF THE COMPANY'S MACHINERY IN INDONESIA. THE
AMOUNT OF CLIAM AMOUNTED TO RP22,315,709,602 APPROXIMATELY S$3,915,000 (2004:
S$4,000,000)}

^{SUBSEQUENT EVENTS:}

^{SUBSEQUENT TO THE FINANCIAL YEAR, THE COMPANY
HAS DECIDED TO LIQUIDATE BARUDAN EMBROIDERY MACHINERY (SHANGHAI) CO., LTD UNDER
MEMBER'S VOLUNTARY WINDING UP. IN
ADDITION, THE COMPANY HAS INVESTED US$2,120,000 TO ACCQUIRE 26.50% OF SHAREHOLDINGS
IN AN ENTITY, BARUDAN EMBROIDERY MACHINERY (NANTONG) CO., LTD, A COMPANY
INCORPORATED IN NANTONG, THE PEOPLE'S REPUBLIC OF CHINA.}

BACKGROUND/OPERATION

^{THE COMPANY WAS INCORPORATED IN THE REPUBLIC
OF SINGAPORE ON 22/12/1990 AS A LIMITED PRIVATE COMPANY AND IS TRADING UNDER
ITS PRESENT NAMESTYLE AS "BARUDAN ASIA PTE LTD".}

^{AS AT 21/12/2007, THE COMPANY HAS A ISSUED
AND PAID-UP CAPITAL OF 6,672,000 SHARES OF A VALUE OF S$6,672,000.}

^{PRINCIPAL ACTIVITIES:}

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

^{1) WHOLESALE OF INDUSTRIAL MACHINERY AND
EQUIPMENT; SALE & DISTRIBUTION OF COMPUTERISED MONOGRAMMING &
EMBROIDERY MACHINES & PARTS}

^{DURING THE FINANCIAL YEAR(S), UNDER REVIEW,
SUBJECT'S PRINCIPAL ACTIVITIES ARE THE SALE AND DISTRIBUTION OF COMPUTERISED
MONOGRAMMING AND EMBROIDERY MACHINES AND PARTS.}

^{FROM THE RESEARCH DONE, SUBJECT IS A
DISTRIBUTOR OF COMPUTERIZED EMBRODIRY MACHINES; PROMOTE SALES AND AFTERSALES
SERVICES INCLUDING SPARE PARTS SUPPORT TO OUR DISTRIBUTORS TO BENEFIT OF ALL
END-USERS.}

^PRODUCTS:

^{*MULTIHEAD EMBROIDERY MACHINES}

^{*MONOGRAMMING MACHINES}

^{*PUNCHING MACHINE DECORATIVE STITCHING
MACHINES}

^{*AUTOMATIC TOWEL HEMMING MACHINES}

^{TRADE NAMES:}

^{*BARUDAN--COMPUTERIZED EMBROIDERY MACHINE
(JP)}

^{MARKET PRESENCE:}

^{*CHINA, INDO-CHINA, SOUTH-EAST ASIA, THE
INDIAN SUB-CONTINENT, AND THE MAJOR MIDDLE EASTERN AND SOUTH AFRICAN COUNTRIES.}

^{SUBJECT IS A MEMBER OF THE FOLLOWING ENTITY:}

^{*SEWING MACHINE TRADERS ASSOCIATION
(SINGAPORE)}

^{NO OTHER TRADE INFORMATION IS AVAILABLE AS
TELE-INTERVIEW WAS NOT GRANTED BY SUBJECT'S PERSONNEL ON 28/12/2007.}

^{SUBJECT IS A SUBSIDIARY OF BARUDAN CO. LTD, A
COMPANY INCORPORATED IN JAPAN.}

^{NUMBER OF EMPLOYEES (30 SEPTEMBER):}

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

^{REGISTERED AND BUSINESS ADDRESS:}

^{39 TAMPINES STREET 92}

^#03-00

^{MEDIASTREAM BUILDING}

^{SINGAPORE 528883}

^{DATE OF CHANGE OF ADDRESS: 08/08/2001}

^WEBSITE:

^{www.barudan.com.sg}

^EMAIL:

^{basia-corporate@barudan.com.sg}

MANAGEMENT

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

^{1) CHOW KIN CHEE, A SINGAPOREAN}

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

^{2) LIM LEE TING STEVEN, A SINGAPOREAN}

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

^{3) YUJI MATSUMOTO, A JAPANESE}

^{- BASED IN JAPAN.}

^{4) KOHEI WATANABE, A JAPANESE}

^{- BASED IN SINGAPORE.}

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