MIRA INFORM REPORT

Report Date :

20.07.2007

IDENTIFICATION DETAILS

Name :	KOMATSU ASIA & PACIFIC PTE. LTD.

Registered Office :	¹^{Gul Avenue, Singapore}^{- 629648}

Country :	^Singapore

Financials (as on) :	31.03.2006

Date of Incorporation :	^18/01/1971

Com. Reg. No.:	^197100057R

Legal Form :	^{Pte Ltd}

Line of Business :	Sale of Mining, Construction, Electronic and Industrial Machinery and related Spare Parts, and Investment Holding. In addition, the Company also serves as regional headquarters for the Asia Pacific Region.

RATING & COMMENTS

MIRA’s Rating :

RATING		STATUS	PROPOSED CREDIT LINE
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

Status :	Good

Payment Behaviour :	Regular

Litigation :	Clear

Subject Company

KOMATSU ASIA & PACIFIC PTE. LTD.

Line Of Business

SALE OF MINING, CONSTRUCTION, ELECTRONIC AND INDUSTRIAL MACHINERY AND RELATED SPARE PARTS, AND INVESTMENT HOLDING. IN ADDITION, THE COMPANY ALSO SERVES AS REGIONAL HEADQUARTERS FOR THE ASIA PACIFIC REGION

Parent Company

KOMATSU LTD

(PERCENTAGE OF SHAREHOLDING: 100%)

Financial Elements

FY2006

COMPANY

Sales : US$381,351,414

Networth : US$110,312,130

Paid-Up Capital : US$ 6,685,902

Net result : US$ 27,848,257

Net Margin(%) : 7.30

Return on Equity(%) : 25.24

Leverage Ratio : 0.73 TIMES

COMPANY IDENTIFICATION

^{Subject Company : KOMATSU ASIA & PACIFIC PTE. LTD.}

^{Former Name :
KOMATSU SINGAPORE PTE LTD}

^{Business Address : 1
GUL AVENUE}

^{Town :
SINGAPORE}

^{Postcode :
629648}

^{Country :
Singapore}

^{Telephone :
6861 2033}

^{Fax :
6861 0370/5627}

^{ROC Number :
197100057R}

^Reg.^Town ^{: -}

PREVIOUS IDENTIFICATION

^{KOMATSU SINGAPORE PTE LTD (DATE
OF CHANGE OF NAME :
04/07/1996)}

SUMMARY

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

^{Legal Form :
Pte Ltd}

^{Date Inc. :
18/01/1971}

^{Previous Legal Form : -}

^{Summary year :
31/03/2006}

^{Sales :
381,351,414}

^{Net Worth :
110,312,130}

^{Paid-Up Capital :
6,685,902}

^{Employees :
-}

^{Net Result :
27,848,257}

^{Auditor :
KPMG}

REFERENCES

^{Litigation :
No}

^{Company status : TRADING}

^{Started :
18/01/1971}

PRINCIPAL(S)

^{HISASHI MIYAZAKI G5735017U Director}

DIRECTOR(S)

^{KO YANG KUANG @ KOH CHONG TEK S1166826G Director}

^{Appointed on :
01/04/2005}

^{Street :
31 POH HUAT CRESCENT}

^{POH HUAT GARDEN}

^{Town :
SINGAPORE}

^{Postcode :
546864}

^{Country :
Singapore}

^{LIM TECK WEE S7313306H Company Secretary}

^{Appointed on :
08/05/2002}

^{Street :
27 JALAN ISHAK}

^{EAST COAST PARK}

^{Town :
SINGAPORE}

^{Postcode :
419358}

^{Country :
Singapore}

^{HISASHI MIYAZAKI G5735017U Director}

^{Appointed on :
01/02/2004}

^{Street :
28 SCOTTS ROAD}

^#23-03

^{Town :
SINGAPORE}

^{Postcode :
228223}

^{Country :
Singapore}

^{HISASHI MIYAZAKI G5735017U Managing Director}

^{Appointed on :
01/04/2004}

^{Street :
28 SCOTTS ROAD}

^#23-03

^{Town :
SINGAPORE}

^{Postcode :
228223}

^{Country :
Singapore}

^{ADRIAN CHAN PENGEE S1658599H Company Secretary}

^{Appointed on :
07/05/2004}

^{Street :
700 LORONG 1 TOA PAYOH}

^#08-02

^{TRELLIS TOWERS}

^{Town :
SINGAPORE}

^{Postcode :
319773}

^{Country :
Singapore}

^{KENICHI TANAKA TF6461563 Director}

^{Appointed on :
01/01/2005}

^{Street :
261 RIVER VALLEY ROAD}

^#02-23

^{ASPEN HEIGHTS}

^{Town :
SINGAPORE}

^{Postcode :
238307}

^{Country :
Singapore}

^{TAIZO KAYATA TH1108254 Director}

^{Appointed on :
01/04/2007}

^{Street :
4-9-3 KARABE, NARITA-SHI}

^{Town :
CHIBA}

^{Postcode :
286-0036}

^{Country : Japan}

FORMER DIRECTOR(S)

^{ANG ANDREW S0208183J}

^{LEE KIM YEW S1098230H}

^{TAN AIK LENG LAWRENCE S6941680B}

^{YUZO SUZUKI TZ0127000}

^{KOSUKE YAMANE F5630196T}

^{YOSHITAKA OMURA G5608368K}

^{TOSHITAKA HAGIWARA TF3746650}

^{KUNIO NOJI TF0682641}

^{YASUSHI SAKANO TZ0068371}

^{YOSHINORI KOMAMURA TE6091428}

^{NORIYUKI ICHIHARA TZ0082623}

ACTIVITY (IES)

^{TRACTOR EQUIPMENT And PARTS Code: 22140}

^{EARTHMOVING EQUIPMENT Code: 7220}

^{BULLDOZERS Code: 2975}

^{EXCAVATING EQUIPMENT Code: 8370}

^{IMPORTERS And EXPORTERS Code: 11760}

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

^{1) BUSINESS MANAGEMENT AND CONSULTANCY
SERVICES}

^{2) GENERAL WHOLESALE TRADE(INCLUDING GENERAL
IMPORTERS & EXPORTERS)}

CHARGES

^{Date :
09/04/1997 Amount: 5,140,500}

^{Comments :
CHARGE NO: 199702067 (DISCHARGED)}

^{AMOUNT SECURED:
SGD5,140,500.00 AND ALL MONIES OWING}

^{CHARGEE(S): THE
DEVELOPMENT BANK OF SINGAPORE LTD}

PREMISES/PROPERTY INFORMATIONS

^{Date :
19/07/2007}

^{Tax rate :
10%}

^{Site Address :
1 GUL AVENUE}

^{Town :
SINGAPORE}

^{Postcode :
629648}

^{Country :
Singapore}

^{Annual Value :
SGD 1,333,000}

* 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% (I.E 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

^{DBS BANK LTD.}

^{BANK OF TOKYO-MITSUBISHI LTD}

^{CITIBANK N.A.}

^{SUMITOMO MITSUI BANKING CORPORATION}

SHAREHOLDERS(S)

^{KOMATSU LTD 153,700 Company}

^{Street :
KOMATSU BUILDING}

^{2-3-6 AKASAKA}

^MINATO-KU

^{Town : TOKYO}

^{Postcode :
-}

^{Country :
Japan}

HOLDING COMPANY

^{KOMATSU LTD UF01699R % :
100}

SUBSIDIARY (IES)

^{KOMATSU INDIA PVT LTD India}

^{PT KOMATSU MARKETING & SUPPORT Indonesia}

^{KOMATSU BANGKOK
LEASING CO. LTD Thailand}

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 : USD}

^{Audit Qualification: UNQUALIFIED UNQUALIFIED UNQUALIFIED}

^{(CLEAN) (CLEAN) (CLEAN)}

^{Date Account Lodged: 19/07/2006}

^{Balance Sheet Date: 31/03/2006 31/03/2005 31/03/2004}

^{Number of weeks: 52 52 52}

^{Consolidation Code: COMPANY COMPANY COMPANY}

^{--- ASSETS ---}

^{Preliminary Exp 2,837,520 4,999,800 3,093,833}

^{Tangible Fixed Assets: 5,203,465 5,474,000 5,670,512}

^{Investments 36,150,233 18,808,915 18,544,719}

^{Total Fixed Assets}^{: 44,191,218 29,282,715 27,309,064}

^{Inventories: 59,744,598 38,848,417 30,675,720}

^{Receivables: 70,839,825 61,400,187 21,628,620}

^{Cash, Banks,
Securities: 11,484,502 24,351,345 19,878,377}

^{Other current assets: 4,695,203 1,148,996 728,720}

^{Total Current Assets}^{: 146,764,128 125,748,945 72,911,437}

^{TOTAL
ASSETS: 190,955,346 155,031,660 100,220,501}

^{--- LIABILITIES ---}

^{Equity capital: 6,685,902 6,685,902 6,685,902}

^{Reserves: -1,129,406 - -}

^{Profit & loss
Account: 104,755,634 80,209,893 62,896,730}

^{Total Equity}^{: 110,312,130 86,895,795 69,582,632}

^{L/T Liab. to ass.
comp: - 1,253,535 -}

^{Total L/T Liabilities}^{: - 1,253,535 -}

^{Trade Creditors: 61,227,906 52,278,505 19,792,449}

^{Provisions: 4,331,593 5,260,736 2,408,046}

^{Other Short term
Liab.: 15,083,717 9,343,089 8,437,374}

^{Total short term Liab.}^{: 80,643,216 66,882,330 30,637,869}

^{TOTAL
LIABILITIES: 80,643,216 68,135,865 30,637,869}

^{PROFIT & LOSS
ACCOUNT}

^{Net Sales 381,351,414 309,200,057 140,810,267}

^{Purchases,Sces & Other
Goods: 339,396,531
270,616,203
116,325,833}

^{Gross Profit: 41,954,883 38,583,854 24,484,434}

^{Result of ordinary operations 35,339,414 27,839,395 15,343,773}

^{NET RESULT BEFORE TAX: 35,332,357 27,839,395 15,326,820}

^{Tax : 7,484,100 4,066,232 2,393,718}

^{Net income/loss year: 27,848,257 23,773,163 12,933,102}

^{Interest Paid: 7,057 - 16,953}

^{Depreciation: 518,665 590,186 464,951}

^{Dividends: 4,386,500 6,460,000 5,932,878}

^{Directors Emoluments: 804,365 483,289 507,177}

^{Wages and Salaries: 7,477,898 7,870,304 5,383,266}

^{Financial Income: 1,850,783 963,719 742,045}

RATIOS

^{31/03/2006 31/03/2005 31/03/2004}

^{Net result / Turnover(%): 0.07 0.08 0.09}

^{Stock / Turnover(%): 0.16 0.13 0.22}

^{Net Margin(%): 7.30 7.69 9.18}

^{Return on Equity(%): 25.24 27.36 18.59}

^{Return on Assets(%): 14.58 15.33 12.90}

^{Dividends Coverage: 6.35 3.68 2.18}

^{Net Working capital: 66120912.00 58866615.00 42273568.00}

^{Cash Ratio: 0.14 0.36 0.65}

^{Quick Ratio: 1.02 1.28 1.35}

^{Current ratio: 1.82 1.88 2.38}

^{Receivables Turnover: 66.87 71.49 55.30}

^{Leverage Ratio: 0.73 0.78 0.44}

^{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
DEEMED TO BE FAIR IN VIEW OF THE FOLLOWING:}

^{NET WORTH:}

^{THE BALANCE SHEET WAS PASSABLE WITH TOTAL
EQUITY IMPROVING BY 26.95% AMOUNTING TO USD110,312,130 (2005: USD86,895,795).
THIS WAS DUE TO HIGHER RETAINED EARNINGS BROUGHT FORWARD OF USD104,755,634
(2005: USD80,209,893).}

^LEVERAGE:

^{THE LEVERAGE RATIO HAD IMPROVED TO 0.73 TIMES
(2005: 0.78 TIMES), INDICATING THAT THE COMPANY'S TOTAL LIABILITIES WERE LESS
SUBSTANTIAL IN RELATION TO ITS TOTAL EQUITY.}

^{IN THE SHORT TERM, TRADE CREDITORS INCREASED
BY 17.12%, TOTALLING USD61,227,906 (2005: USD52,278,505). OTHER SHORT TERM
LIABILITIES OF USD15,083,717 (2005: USD9,343,089) COMPRISED OF:}

^{* EMPLOYEE BENEFITS OF USD227,000 (2005:
USD217,000)}

^{* DEFERRED REVENUE OF USD2,348,506 (2005:
NIL)}

^{* ACCRUED OPERATING EXPENSES OF USD11,956,666
(2005: USD7,795,578)}

^{* FINANCIAL DERIVATIVE LIABILITIES OF NIL
(2005: USD21,943)}

^{* OTHER PAYABLES OF USD488,212 (2005:
USD751,200)}

^{* AMOUNTS OWING TO JOINTLY-CONTROLLED
ENTITIES OF USD58,700 (2005: USD533,825)}

^{* AMOUNTS OWING TO RELATED CORPORATIONS
(NON-TRADE) OF USD4,633 (2005: USD555,615)}

^LIQUIDITY:

^{THE OVERALL LIQUIDITY OF THE COMPANY WAS
FAIRLY HEALTHY. BOTH THE QUICK AND CURRENT RATIOS WERE SUFFICIENT AT 1.02 TIMES
(2005: 1.28 TIMES) AND 1.82 TIMES (2005: 1.88 TIMES) RESPECTIVELY.}

^{THIS WAS IN TANDEM WITH THE NET WORKING CAPITAL,
WHICH REGISTERED HIGHER AT USD66,120,912 (2005: USD58,866,615).}

^{PROFITABILITY:}

^{REVENUE FOR FY2006 ROSE BY 23.33%, TOTALLING
USD381,351,414 (2005: USD309,200,057). LIKEWISE, NET INCOME INCREASED BY
17.14%, ACCOUNTING FOR USD27,848,257 (2005: USD23,773,163).}

^{THUS, NET MARGIN STOOD POSITIVELY AT 7.30%
(2005: 7.69%).}

^{DEBT SERVICING:}

^{DEBT SERVICING PROBLEMS MIGHT NOT BE
ANTICIPATED IN VIEW OF THE IMPROVED NET WORKING CAPITAL, REVENUES AND NET
INCOMES, AND IF TRADE RECEIVABLES WERE FORTHCOMING.}

^{AVERAGE COLLECTION PERIOD ALSO SHORTENED TO
67 DAYS (2005: 71 DAYS).}

^{NOTES TO THE
FINANCIAL STATEMENTS}^:

^{CONTINGENT LIABILITIES}

^{AS AT BALANCE SHEET DATE, THE COMPANY HAD THE
FOLLOWING CONTINGENT LIABILITIES:}

^{* CORPORATE GUARANTEEES ISSUED TO FINANCIAL INSTITUTIONS
IN RESPECT OF BANKING FACILITIES EXTENDED TO A JOINTLY-CONTROLLED ENTITY
OF USD64,470,000 (2005: USD8,384,000)}

^{* PERFORMANCE GUARANTEE OF USD2,164,000
(2005: USD1,832,000)}

^{THE COMPANY HAS YET TO ADOPT THE AMENDMENTS
TO FRS 39 AND FRS 104 IN RELATION TO FINANCIAL GUARANTEE CONTRACTS, WHICH WILL
BE EFFECTIVE FOR PERIODS COMMENCING ON OR AFTER 1 APRIL 2006.}

BACKGROUND/OPERATION

^{THE COMPANY WAS INCORPORATED IN THE REPUBLIC OF SINGAPORE ON 18/01/1971 AS A LIMITED PRIVATE
COMPANY AND WAS TRADING UNDER ITS FORMER NAMESTYLE AS "KOMATSU SINGAPORE
PTE LTD".}

^{SUBSEQUENTLY, ON 04/07/1996, SUBJECT CHANGED
TO ITS PRESENT NAMESTYLE AS "KOMATSU ASIA & PACIFIC PTE. LTD.".}

^{AS AT 16/07/2007, SUBJECT HAS AN ISSUED AND
PAID-UP CAPITAL OF 153,700 SHARES OF A VALUE OF S$28,271,034.}

^{PRINCIPAL ACTIVITIES:}

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

^{1) BUSINESS MANAGEMENT AND CONSULTANCY
SERVICES}

^{2) GENERAL WHOLESALE TRADE(INCLUDING GENERAL
IMPORTERS & EXPORTERS)}

^{DURING THE FINANCIAL YEAR(S), UNDER REVIEW,
THE PRINCIPAL ACTIVITIES OF THE COMPANY ARE THOSE RELATING TO THE SALE OF MINING,
CONSTRUCTION, ELECTRONIC AND INDUSTRIAL MACHINERY AND RELATED SPARE PARTS, AND
INVESTMENT HOLDING. IN ADDITION, THE COMPANY ALSO SERVES AS REGIONAL
HEADQUARTERS FOR THE ASIA PACIFIC REGION.}

^{THE IMMEDIATE AND ULTIMATE HOLDING COMPANY IS
KOMATSU LTD., A COMPANY INCORPORATED IN JAPAN.}

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

^{SUBJECT IS LISTED IN THE SINGAPORE LOCAL
DIRECTORY UNDER THE CLASSIFICATION OF: TRACTOR EQUIPMENT AND PARTS.}

^{SUBJECT ENGAGES IN THE FOLLOWING ACTIVITIES:}

^{* REGIONAL HEADQUARTER OF KOMATSU LTD}

^{* MARKETING AND PRODUCT SUPPORT FOR
CONSTRUCTION EQUIPMENT, INDUSTRIAL MACHINERY AND ELECTRONICS DEVICES (EG.
HYDRAULIC EXCAVATOR, MOBILE CRUSHER, ROUGH TERRAIN CRANE, GENERATOR, DIESEL
ENGINE, PRESSES, ELECTRONIC DEVICES, ETC.)}

^{* DISTRIBUTORS & MANUFACTURERS OF
TRACTORS}

^{PRODUCTS OR SERVICES:}

^{* BULLDOZERS}

^{* CONSTRUCTION EQUIPMENT}

^{* EXCAVATORS}

^{* GENERATORS}

^{* MOTOR GRADERS}

^{* TRACK LOADERS}

^{* TRACTOR PARTS}

^{* WHEEL LOADERS}

^BRAND(S):

^{* KOMATSU, GENERATORS}

^PURCHASES:

^{* IMPORTS (%): NOT PROVIDED}

^{* TERMS OF IMPORT: LETTER OF CREDITS, 30, 60
DAYS TERMS, ETC}

^{* IMPORT COUNTRIES: JAPAN, ETC}

^MARKETS:

^{* LOCAL (%): NOT PROVIDED}

^{* TERMS SALES: LETTER OF CREDITS, ETC}

^{* EXPORT(%): NOT PROVIDED}

^{* TERMS OF EXPORT: LETTER OF CREDITS, ETC}

^{* EXPORT COUNTRIES: ASIA & PACIFIC
REGION; THAILAND, VIETNAM, JAPAN,
INDONESIA,
ETC}

^{SUBJECT IS A MEMBER OF FOLLOWING ENTITIES:}

^{* JAPANESE CHAMBER OF COMMERCE & INDUSTRY}

^{* SINGAPORE INDIAN CHAMBERS OF
COMMERCE & INDUSTRY}

^{NO. OF EMPLOYEES (31 MARCH):}

^{* COMPANY - 2006: NOT AVAILABLE (2005: 188;
2004: 186; 2003: 180; 2002: 179; 2001: 142)}

^{THERE ARE CURRENTLY 143 EMPLOYEES IN THE
COMPANY.}

^{NO OTHER TRADE INFORMATION WAS MADE AVAILABLE
ON 19/07/2007.}

^{REGISTERED & BUSINESS ADDRESSES:}

^{1 GUL AVENUE}

^{OFF BENOI
ROAD}

^SINGAPORE⁶²⁹⁶⁴⁸

^{DATE OF CHANGE OF ADDRESS: 16/01/2004}

^{-- OWNED PREMISE}

^{OLD REGISTERED ADDRESS:}

^{5 SHENTON WAY}

^{#19-00 UIC BUILDING}

^SINGAPORE⁰⁶⁸⁸⁰⁸

^{DATE OF CHANGE OF ADDRESS: NOT AVAILABLE}

^WEBSITE:

^{* http://www.komatsu.com.sg}

^EMAIL:

^{* NA}

MANAGEMENT

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

^{1) HISASHI MIYAZAKI, A JAPANESE}

^{- BASED IN SINGAPORE}

^{2) KO YANG KUANG @ KOH CHONG TEK, A
SINGAPOREAN}

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

^{3) KENICHI TANAKA, A JAPANESE}

^{- BASED IN SINGAPORE}

^{4) TAIZO KAYATA, 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/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