MIRA INFORM REPORT

Report Date :

19.07.2007

IDENTIFICATION DETAILS

Name :	KAHAR TRADING SINGAPORE PTE LTD
Registered Office :	^190 Middle Road, # 09-01^, Fortune Centre, Singapore – 188979
Country :	Singapore
Financials (as on) :	31.12.2006
Date of Incorporation :	^21/12/1982
Com. Reg. No.:	^198205346G
Legal Form :	^Pte Ltd
Line of Business :	Machinery, Spare Parts and Timber Merchants and Agents.

RATING & COMMENTS

MIRA’s Rating :

B

RATING		STATUS	PROPOSED CREDIT LINE
26-40	B	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average/normal.	Small

Status :	Moderate
Payment Behaviour :	Slow
Litigation :	Clear

Subject Company

KAHAR TRADING SINGAPORE PTE LTD

Line Of Business 

MACHINERY, SPARE PARTS AND TIMBER MERCHANTS AND AGENTS

Parent Company

K.T.S. (SINGAPORE) PTE LTD

(PERCENTAGE OF SHAREHOLDING: 100.00%)

Financial Elements

FY 2006

COMPANY

Sales : S$886,970

Networth : S$1,210,700

Paid-Up Capital : S$500,000

Net result : S$222,517

Net Margin(%) : 25.09

Return on Equity(%) : 18.38

Leverage Ratio : 0.89

COMPANY IDENTIFICATION

^{Subject Company: KAHAR TRADING SINGAPORE PTE LTD}

^{Former Name: -}

^{Registered Address: 190 MIDDLE ROAD}

^{# 09-01}

^{FORTUNE CENTRE}

^{Town: SINGAPORE}

^{Postcode: 188979}

^{County: -}

^{Country: Singapore}

^{Telephone: 6336 6077}

^{Fax: 6339 0715}

^{ROC Number: 198205346G}

^{Reg. Town: -}

SUMMARY

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

^{Legal Form: Pte Ltd}

^{Date Inc.: 21/12/1982}

^{Previous Legal Form: -}

^{Summary year: 31/12/2006}

^{Sales: 886,970}

^{Net worth: 1,210,700}

^{Capital: -}

^{Paid-Up Capital: 500,000}

^{Employees: Not available}

^{Net result: 222,517}

^{Share value: -}

^{Auditor: ERNST & YOUNG}

REFERENCES

^{Litigation: No}

^{Company status: TRADING}

^{Started: 21/12/1982}

PRINCIPAL(S)

^{LAU LEE HUONG K139835 Director}

DIRECTOR(S)

^{LAU LEE HUONG K139835 Director}

^{Appointed on: 25/07/1983}

^{Street: 15 ORCHARD BOULEVARD}

^#12-15

^{WESTWOOD APARTMENTS}

^{Town: SINGAPORE}

^{Postcode: 248644}

^{Country: Singapore}

^{LAU LEE HUONG K139835 Manager}

^{Appointed on: 25/07/1983}

^{Street: 15 ORCHARD BOULEVARD}

^#12-15

^{WESTWOOD APARTMENTS}

^{Town: SINGAPORE}

^{Postcode: 248644}

^{Country: Singapore}

^{LOH CHAI HIANG S0691677E Director}

^{Appointed on: 21/12/1982}

^{Street: 59 JALAN REMAJA}

^{BAMBOO GROVE PARK}

^{Town: SINGAPORE}

^{Postcode: 668713}

^{Country: Singapore}

^{CHENG HWA CHUANG S2504243C Director}

^{Appointed on: 21/12/1982}

^{Street: 15 ORCHARD BOULEVARD}

^#12-15

^{WESTWOOD APARTMENTS}

^{Town: SINGAPORE}

^{Postcode: 248644}

^{Country: Singapore}

^{HENG KHIAM NENG S7235890B Company Secretary}

^{Appointed on: 31/12/2004}

^{Street: 29 CHENG SOON GARDEN}

^{CHENG SOON GARDEN}

^{Town: SINGAPORE}

^{Postcode: 599805}

^{Country: Singapore}

ACTIVITY(IES)

^{HARDWARE - WHSLE Code:11020}

^{MACHINE TOOLS Code:13245}

^{TIMBER - WHSLE Code:21690}

^{BASED ON ACRA'S RECORD AS AT 16/07/2007}

^{1) WHOLESALE OF GENERAL HARDWARE (EG LOCKS, HINGES); MACHINERY, SPARE PARTS AND TIMBER MERCHANTS AND AGENTS}

CHARGES

No Charges On Premises/Property In Our Database

PREMISES/PROPERTY INFORMATIONS

No Premises/Property Information In Our Databases

BANKERS

No Banker Information In Our Database

SHAREHOLDERS(S)

^{K.T.S. (SINGAPORE) PTE LTD 500,000 Company}

^{Street: 190 MIDDLE ROAD}

^#09-01

^{FORTUNE CENTRE}

^{Town: SINGAPORE}

^{Postcode: 188979}

^{Country: Singapore}

HOLDING COMPANY

^{K.T.S. (SINGAPORE) PTE LTD 197401224C %: 100}

SUBSIDIARY(IES)

No Participation In Our Database

PAYMENT HISTORY AND EXPERIENCES

^{Trade Morality: AVERAGE}

^{Liquidity: SUFFICIENT}

^{Payments: SLOW}

^{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)}

^{Date Account Lodged: 04/07/2007}

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

^{Number of weeks: 52 52}

^{Consolidation Code: COMPANY COMPANY}

^{--- ASSETS}

^{Inventories: 612 5,959}

^{Receivables: 219,108 329,732}

^{Cash,Banks,Securities: 2,032,005 2,947,528}

^{Other current assets: 33,502 1,371,175}

^{Total Current Assets: 2,285,227 4,654,394}

^{TOTAL ASSETS: 2,285,227 4,654,394}

^{--- LIABILITIES}

^{Equity capital: 500,000 500,000}

^{Profit & loss Account: 710,700 2,888,183}

^{Total Equity: 1,210,700 3,388,183}

^{Trade Creditors: 121,463 99,269}

^{Prepay. & Def. charges: 2,515 24}

^{Provisions: 28,545 16,424}

^{Other Short term Liab.: 922,004 1,150,494}

^{Total short term Liab.: 1,074,527 1,266,211}

^{TOTAL LIABILITIES: 1,074,527 1,266,211}

^{PROFIT & LOSS ACCOUNT}

^{Net Sales 886,970 1,133,749}

^{Purchases,Sces & Other Goods: 883,044 1,117,282}

^{Gross Profit: 3,926 16,467}

^{NET RESULT BEFORE TAX: 246,217 117,955}

^{Tax: 23,700 12,395}

^{Net income/loss year: 222,517 105,560}

^{Dividends: 2,400,000 -}

^{Directors Emoluments: 1,500 1,500}

^{Wages and Salaries: 36,013 35,656}

RATIOS

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

^{Net result / Turnover(%): 0.25 0.09}

^{Stock / Turnover(%): 0.00 0.01}

^{Net Margin(%): 25.09 9.31}

^{Return on Equity(%): 18.38 3.12}

^{Return on Assets(%): 9.74 2.27}

^{Dividends Coverage: 0.09 0.09}

^{Net Working capital: 1210700.00 3388183.00}

^{Cash Ratio: 1.89 2.33}

^{Quick Ratio: 2.09 2.59}

^{Current ratio: 2.13 3.68}

^{Receivables Turnover: 88.93 104.70}

^{Leverage Ratio: 0.89 0.37}

^{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 EVEN THOUGH NET WORTH DECREASED BY 64.27% FROM S$3,388,183 IN 2005 TO S$1,210,700 IN 2006.}

^{THIS WAS DUE TO LOWER REVENUE RESERVE OF S$710,700 (2005: S$2,888,183); A FALL OF 75.39% FROM THE PRIOR FINANCIAL YEAR.}

^LEVERAGE:

^{IN THE SHORT-TERM, SUBJECT WAS LARGELY FINANCED BY OTHER SHORT TERM LIABILITIES WHICH MADE UP 85.81% (2005: 90.86%) OF THE TOTAL CURRENT LIABILITIES AND AMOUNTED TO S$922,004 (2005: S$1,150,494). THE BREAKDOWN IS AS FOLLOWS:}

^{-HOLDING COMPANY - 2006: S$3,512 (2005: - )}

^{-RELATED PARTIES - 2006: S$918,492 (2005: S$1,150,494)}

^{TRADE CREDITORS ROSE BY 22.36% TO S$121,463 (2005: S$99,269).}

^{SUBJECT DID NOT INCUR ANY LONG TERM LIABILITIES DURING THE FINANCIAL YEAR UNDER REVIEW.}

^{IN ALL, LEVERAGE RATIO ROSE FROM 0.37 TIMES TO 0.89 TIMES AS A RESULT OF A MORE THAN PROPORTIONATE FALL IN TOTAL EQUITY AS COMPARED TO THE FALL IN TOTAL LIABILITIES.}

^LIQUIDITY:

^{IN GENERAL, SUBJECT'S LIQUIDITY SITUATION WAS PASSABLE EVEN THOUGH NET WORKING CAPITAL FELL BY 64.27% TO S$1,210,700 (2005: S$3,388,183).}

^{CURRENT RATIO FELL TO 2.13 TIMES, DOWN FROM 3.68 TIMES AND QUICK RATIO DECREASED TO 2.09 TIMES FROM 2.59 TIMES IN 2005.}

^{PROFITABILITY:}

^{REVENUE POSTED A DECREASE OF 21.77% FROM S$1,133,749 IN 2005 TO S$886,970 BUT NET PROFIT ROSE BY 1.11 TIMES TO S$222,517 (2005: S$105,560).}

^{THIS COULD BE DUE TO THE INCREASE IN OTHER INCOME BY 64.42% TO S$349,377}

^{(2005: S$212,493), AND THE DECREASE IN SELLING EXPENSES BY 19.33% TO S$24,992 (2005: S$30,982).}

^{HENCE, NET MARGIN ROSE TO 25.09% (2005: 9.31%).}

^REVENUE:

^{-EXTERNAL CUSTOMERS - 2006: S$608,127 (2005: S$984,628)}

^{-RELATED PARTIES - 2006: S$278,843 (2005: S$149,121)}

^{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, SUBJECT DID NOT INCUR ANY INTEREST EXPENSES DURING THE FINANCIAL YEAR UNDER REVIEW.}

BACKGROUND/OPERATION

^{THE COMPANY WAS INCORPORATED IN THE REPUBLIC OF SINGAPORE ON 21/12/1982 AS A LIMITED PRIVATE COMPANY AND IS TRADING UNDER THE PRESENT NAMESTYLE OF "KAHAR TRADING SINGAPORE PTE LTD".}

^{AS AT 16/07/2007, THE COMPANY HAS AN ISSUED AND PAID-UP CAPITAL OF 500,000 SHARES, OF A VALUE OF S$500,000.}

^{PRINCIPAL ACTIVITIES:}

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

^{1) WHOLESALE OF GENERAL HARDWARE (EG LOCKS, HINGES); MACHINERY, SPARE PARTS AND TIMBER MERCHANTS AND AGENTS}

^{2) WHOLESALE OF SAWN TIMBER, PLYWOOD AND RELATED PRODUCTS; MACHINERY, SPARE PARTS AND TIMBER MERCHANTS AND AGENTS}

^{DURING THE FINANCIAL YEAR (S) UNDER REIVEW, THE PRINCIPAL ACTIVITIES OF THE COMPANY ARE THOSE OF MACHINERY, SPARE PARTS AND TIMBER MERCHANTS AND AGENTS.}

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

^{TERM OF PAYMENT}

^{-TRADE AND OTHER CREDITORS: 30-90 DAYS TERMS}

^{SUBJECT IS A MEMBER OF THE FOLLOWING ENTITY}

^{- SINGAPORE BUSINESS FEDERATION}

^{SUBJECT'S CONTACT NUMBERS AND TRADE INFORMATION, HOWEVER, ARE NOT LISTED ON THE INTERNET AND LOCAL DIRECTORIES. HENCE, BASED ON THE CONTACT NUMBER PROVIDED}

^{(TEL: 6336 6077), A CALL WAS MADE.}

^{NO OTHER TRADE INFORMATION WAS MADE AVAILABLE AS TELE-INTERVIEW WAS NOT GRANTED ON 19/07/2007.}

^{THE COMPANY IS A WHOLLY OWNED SUBSIDIARY OF K.T.S. (SINGAPORE) PTE LTD, A COMPANY INCORPORATED IN SINGAPORE.}

^{NUMBER OF EMPLOYEES (31 DECEMBER)}

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

^{REGISTERED ADDRESS:}

^{190 MIDDLE ROAD}

^#09-01

^{FORTUNE CENTRE}

^{SINGAPORE 188979}

^{DATE OF CHANGE OF ADDRESS: -}

^WEBSITE:

^{NOT AVAILABLE}

^EMAIL:

^{NOT AVAILABLE}

MANAGEMENT

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

^{1) LAU LEE HUONG, A MALAYSIAN}

^{- BASED IN SINGAPORE}

^{2) LOH CHAI HIANG, A SINGAPOREAN}

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

^{3) CHENG HWA CHUANG, A SINGAPORE PERMANENT RESIDENT}

^{- HOLDS OTHER DIRECTORSHIPS AS RECORDED IN OUR DATABASE:}

^{K.T.S. (SINGAPORE) PTE LTD}

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.

OVERVIEW OF SINGAPORE

PAST PERFORMANCE

SINGAPORE’S ECONOMY GREW BY 6.6% IN 4Q 2006, AFTER A 7.0% GROWTH IN 3Q 2006. THE GROWTH MOMENTUM, ON AN ANNUALISED QUARTER-TO-QUARTER BASIS, DOUBLED TO 7.9% IN 4Q 2006, FROM 3.9% IN THE PREVIOUS QUARTER. THIS BROUGHT FULL-YEAR REAL GDP GROTH TO 7.9%, HIGHER THAN THE 6.6% GROWTH IN 2005.

THE MANUFACTURING SECTOR GREW AT A MORE MODEST PACE OF 7.7% IN 4Q 2006, AFTER A 9.5% EXPANSION IN 3Q 2006. THIS WAS DUE MAINLY TO A FALL IN THE OUTPUT OF THE ELECTRONICS AND CHEMICALS CLUSTERS, AND SLOWER GROWTH IN THE PRECISION ENGINEERING CLUSTER. GROWTH IN THE TRANSPORT ENGINEERING CLUSTER EASED BUT REMAINED STRONG. MEANWHILE, THE BIOMEDICAL MANUFACTURING CLUSTER ACCELERATED FROM A GROWTH OF 4.7% IN 3Q 2006 TO 27% IN 4Q 2006. FOR THE WHOLE YEAR, THE MANUFACTURING SECTOR GREW BY 12%, UP FROM 9.5% IN 2005, SUPPORTED BY STRONGER PERFORMANCES IN THE TRANSPORT ENGINEERING, BIOMEDICAL

MANUFACTURING AND PRECISION ENGINEERING CLUSTERS.

THE WHOLESALE AND RETAIL TRADE SECTOR EXPANDED 6.9% IN 4Q 2006, BUT ITS GROWTH MOMENTUM WAS DOWN BY 3.5%. THE WHOLESALE SEGMENT MODERATED, WITH GROWTH OF NON-OIL RE-EXPORTS HALVED FROM 13% IN 3Q 2006 TO 6.3% IN 4Q 2006. PERFORMANCE OF THE RETAIL SEGMENT IMPROVED FURTHER AS RETAIL SALES WENT UP 7.9% IN 4Q 2006, COMPARED TO 5.2% IN THE PREVIOUS QUARTER. OVER 2006, THE WHOLESALE AND RETAIL SECTOR EXPANDED STRONGLY BY 10%, UP FROM 9.6% IN 2005.

THE FINANCIAL SERVICES SECTOR EXPANDED BY 11% IN 4Q 2006, AFTER GROWING BY 7.4% FROM THE PREVIOUS QUARTER. THE EXPANSION WAS BROAD-BASED ACROSS MOST SEGMENTS. IN PARTICULAR, THE STOCK TRADING SEGMENT ENJOYED A SHARP INCREASE IN ACTIVITY DURING THE QUARTER. FUND MANAGEMENT, ASIAN CURRENCY UNITS, AND FOREX SEGMENTS ALSO REGISTERED STRONG GROWTH IN 4Q 2006. THE STRONG PERFORMANCE IN THE FINAL QUARTER BROUGHT THE SECTOR’S FULL-YEAR GROWTH TO 9.2%, HIGHER THAN THE 7.6% GAIN IN 2005.

THE CONSTRUCTION SECTOR CONTINUED TO EXPAND BY 4.7%, FOLLOWING 5.8% IN 3Q 2006. GROWTH MOMENTUM ON A SEASONALLY ADJUSTED QUARTER-ON-QUARTER BASIS REMAINED STRONG AT 12%. CERTIFIED PAYMENTS GREW SLIGHTLY BY 0.7%, DOWN FROM 9.8% IN 3Q 2006. CONTRACTS AWARDED DIPPED 8.0% IN 4Q 2006 AFTER A RISE IN GROWTH IN THE PREVIOUS QUARTER. FOR THE YEAR, THE SECTOR GREW BY 2.7%, UP FROM 0.7% IN 2005.

THE HOTELS AND RESTAURANTS SECTOR CONTINUED TO STRENGTHEN IN 4Q 2006 WITH A 6.1% INCREASE FOLLOWING A 4.4% GROWTH IN 3Q 2006. VISITOR ARRIVALS ROSE 8.4% COMPARED WITH 4.5% IN THE PREVIOUS QUARTER. THIS HELPED TO RAISE THE AVERAGE OCCUPANCY RATE OF HOTELS TO 88% IN 4Q 2006, COMPARED TO 85% A YEAR EARLIER. HOTEL ROOM REVENUES WENT UP 12% AFTER A 28% INCREASE IN 3Q 2006. FOR THE YEAR AS A WHOLE, THE SECTOR GREW BY 5.1%, UP FROM 4.3% IN 2005, ON THE BACK OF A RECORD 9.7 MILLION VISITOR ARRIVALS.

THE FINANCIAL SERVICES SECTOR EXPANDED BY 11% IN 4Q 2006, AFTER GROWING BY 7.4% A QUARTER EARLIER. THE EXPANSION WAS BROAD-BASED ACROSS MOST SEGMENTS. IN PARTICULAR, THE STOCK TRADING SEGMENT ENJOYED AN INCREASE IN ACTIVITY DURING THE QUARTER. FUND MANAGEMENT, ASIAN CURRENCY UNITS, AND FOREX SEGMENTS ALSO REGISTERED STRONG GROWTH IN 4Q 2006. THE STRONG PERFORMANCE IN THE FINAL QUARTER BROUGHT THE SECTOR’S FULL-YEAR GROWTH TO 9.2%, HIGHER THAN THE 7.6% GAIN IN 2005.

THE TRANSPORT AND STORAGE SECTOR INCREASE BY 4.0% IN 4Q 2006, SAME AS THE PREVIOUS QUARTER. WITHIN THE SECTOR, THE AIR TRANSPORT SEGMENT TURNED IN BETTER PERFORMANCE WHILE THE WATER TRANSPORT SEGMENT MODERATED. SLOWER GROWTH WAS SEEN IN BOTH SEA CARGO AND AIR CARGO HANDLED. MEANWHILE, GROWTH IN AIR PASSENGERSHANDLED AND CONTAINER THROUGHPUT IMPROVED COMPARED TO 3Q 2006. OVERALL, THE TRANSPORT AND STORAGE SECTOR EXPANDED 4.3% IN 2006, SIMILAR TO THE 4.2% IN 2005.

THE INFORMATION AND COMMUNICATIONS SECTOR POSTED A BETTER PERFORMANCE IN 4Q 2006 WITH A GROWTH OF 6.0%, FOLLOWING A 3.6% GAIN IN 3Q 2006. THE NUMBER OF BROADBAND SUBSCRIBERS CONTINUED TO REGISTER DOUBLE-DIGIT GROWTH IN THE QUARTER. INTERNATIONAL TELEPHONE CALL DURATION AND THE NUMBER OF MOBILE PHONE SUBSCRIBERS GREW AT A FASTER PACE COMPARED TO THE PREVIOUS QUARTER. THE SECTOR EXPANDED BY 4.6% DURING THE YEAR, COMPARED TO 5.5% IN 2005.

THE BUSINESS SERVICES SECTOR ROSE BY 5.4% IN 4Q 2006, FOLLOWING A 5.1% GAIN IN THE PREVIOUS QUARTER. THE EXPANSION IN THE SECTOR WAS DRIVEN BY ACTIVITIES IN THE CONSULTANCY, ARCHITECTURAL & ENGINEERING AND BUSINESS REPRESENTATIVE OFFICES AS WELL AS REAL ESTATE SEGMENT. FOR THE YEAR AS A WHOLE, THE BUSINESS SERVICES SECTOR INCREASED BY 5.8%, SIMILAR TO THE 5.9% GROWTH ACHIEVED IN 2005.

APART FROM WHOLESALE AND RETAIL TRADE, ALL SECTORS EXPERIENCED POSITIVE GROWTH MOMENTUM IN 4Q 2006. FOR 2006 AS A WHOLE, ALL SECTORS REGISTERED GROWTH, LED BY MANUFACTURING, WHOLESALE & RETAIL TRADE AND FINANCIAL SERVICES.

OUTLOOK

THE OUTLOOK FOR THE ECONOMY IS GENERALLY POSITIVE ALTHOUGH THERE ARE SOME DOWNSIDE RISKS. THE AVIAN FLU PANDEMIC TREAT HAS RESURFACED AS A GROWING NUMBER OF COUNTRIES REPORTED CASES OF INFECTION IN BIRDS IN RECENT WEEKS. OTHER UNCERTAINTIES INCLUDE THE DISORDERLY UNWINDING OF GLOBAL IMBALANCES, TERRORISM AND THE VULNERABILITY OF OIL PRICES TO SUPPLY SHOCKS. AS A RESULT, THE ECONOMIC GROWTH FORECAST FOR 2007 IS BEING RAISE FROM 4.0% TO 6.0% TO 4.5% TO 6.5%.

REAL ESTATE DEVELOPERS AND AGENTS AND 73% OF THE REAL ESTATE FIRMS ARE THE MOST OPTIMISTIC. THIS SECTOR IS EXPECTING TO DO WELL IN THE FIRST HALF OF 2007.

THE MANUFACTURING SECTOR IS CAUTIOUSLY OPTIMISTIC ABOUT BUSINESS SITUATIONS IN THE NEXT SIX MONTHS OF 2007.

WITHIN THE FINANCIAL SERVICES INDUSTRY, 46% OF THE FIRMS, INCLUDING COMPANIES ENGAGED IN BANKING AND FINANCE, STOCK, SHARE AND BOND BROKERAGE, FUND MANAGEMENT AND INSURANCE ACTIVITIES, ANTICIPATED HIGHER LEVELS OF BUSINESS ACTIVITIES IN THE FIRST 6 MONTHS.

IN THE BUSINESS SERVICES INDUSTRY, 27% OF THE FIRMS EXPECTS BUSINESS TO PICK UP DURING THE FIRST HALF OF THE YEAR. IN PARTICULAR, FIRMS ENGAGED IN ACCOUNTING, ARCHITECTURAL AND ENGINEERING, ADVERTISING AND SECURITY SERVICES AND THE RENTING OF CONSTRUCTION AND INDUSTRIAL MACHINERY FORESEE HIGHER DEMAND FOR THEIR SERVICES.

WITHIN THE CATERING TRADE INDUSTRY, 31% OF THE FIRM EXPRESSES POSITIVE BUSINESS SENTIMENTS. MOST HOTELIERS EXPECTS TO DO WELL IN THE FIRST HALF, IN ANTICIPATION OF HIGHER TOURIST ARRIVALS AND OCCUPANCY RATE.

RETAILERS, PARTICULARLY DEPARTMENT STORES OWNERS AND RETAILER OF FURNITURE AND FURNISHINGS, PREDICTS BUSINESS CONDITIONS TO IMPROVE IN THE NEXT SIX MONTHS.

WHOLESALERS ARE GENERALLY LESS OPTIMISTIC ABOUT THE BUSINESS ENVIRONMENT. IN PARTICULAR, DEALERS OF JEWELLERY AND WATCHES, INDUSTRIES MACHINERY AND EQUIPMENT, TELECOMMUNICATIONS EQUIPMENT AND ELECTRONIC COMPONENTS ARE THOSE WHO FORESEE SLOWER BUSINESS IN THE COMING MONTHS.

ALSO, TRANSPORT AND COMMUNICATIONS INDUSTRY IS LESS POSITIVE ABOUT THE BUSINESS OUTLOOK. SHIPPING LINES EXPECT SLOWER BUSINESS IN THE FIRST HALF DUE TO SEASONAL FACTORS. IN CONTRAST, FIRMS PROVIDING POST AND COURIER SERVICES FORESEE MORE FAVOURABLE CONDITIONS.

EXTRACTED FROM: MINISTRY OF TRADE AND INDUSTRY, SINGAPORE

SINGAPORE DEPARTMENT OF STATISTICS

TODAY

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