MIRA INFORM REPORT

Report Date :

29.05.2007

IDENTIFICATION DETAILS

Name :	NORSKE SKOG PANASIA CO. PTE. LTD.
Registered Office :	^4 Shenton Way, #29-02^, Sgx Centre 2, Singapore – 068807
Country :	Singapore
Financials (as on) :	31.12.2005
Date of Incorporation :	^13/06/1998
Com. Reg. No.:	^199802923N
Legal Form :	^Pte Ltd
Line of Business :	Provision of Services as a Financial Treasury Centre, Provision of Management Services to its Subsidiaries and Selling of Newsprint and Groundwood Specialty Paper Products.

RATING & COMMENTS

MIRA’s Rating :

A

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

NORSKE SKOG PANASIA CO. PTE. LTD.

Line Of Business 

INVESTMENT HOLDING, PROVISION OF SERVICES AS A FINANCIAL TREASURY CENTRE, PROVISION OF MANAGEMENT SERVICES TO ITS SUBSIDIARIES AND SELLING OF NEWSPRINT AND GROUNDWOOD SPECIALTY PAPER PRODUCTS.

Parent Company

NORSKE SKOGINDUSTRIER ASA

(PERCENTAGE OF SHAREHOLDING: 100%)

Financial Elements

FY2005

CONSOLIDATED

Sales : US$1,037,366,000

Networth : US$ 913,985,000

Paid-Up Capital : US$ 600,000

Net result : US$ 25,537,000

Net Margin(%) : 2.46

Return on Equity(%) : 2.79

Leverage Ratio : 0.93 TIMES

COMPANY IDENTIFICATION

^{Subject Company : NORSKE SKOG PANASIA CO. PTE. LTD.}

^{Former Name : PAN ASIA PAPER CO PTE LTD}

^{Business Address : 4 SHENTON WAY}

^#29-02

^{SGX CENTRE 2}

^{Town : SINGAPORE}

^{Postcode : 068807}

^{County : -}

^{Country : Singapore}

^{Telephone : 6327 4188}

^{Fax : 6327 4264}

^{ROC Number : 199802923N}

^{Reg. Town : -}

PREVIOUS IDENTIFICATION

^{PAN ASIA PAPER CO. PTE LTD (DATE OF CHANGE OF NAME: 18/11/2005)}

^{DELPHINIUM ENTERPRISE PTE LTD (DATE OF CHANGE OF NAME: 18/11/1998)}

SUMMARY

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

^{Legal Form : Pte Ltd}

^{Date Inc. : 13/06/1998}

^{Previous Legal Form : -}

^{Summary year : 31/12/2005}

^{Sales : 1,037,366,000}

^{Net Worth : 913,985,000}

^{Paid-Up Capital : 600,000}

^{Employees : -}

^{Net Result : 25,537,000}

^{Auditor : PRICEWATERHOUSECOOPERS}

^{AS AT 21/05/2007}

^{ISSUED ORDINARY : 4.00 V/SHARE: 1.00 SINGAPORE DOLLAR}

^{ISSUED ORDINARY : 600,000.00 V/SHARE: 1.00 U.S. DOLLAR}

^{PAID UP ORDINARY : 4.00 V/SHARE: 1.00 SINGAPORE DOLLAR}

^{PAID UP ORDINARY : 600,000.00 V/SHARE: 1.00 U.S. DOLLAR}

REFERENCES

^{Litigation : No}

^{Company status : TRADING}

^{Started : 13/06/1998}

PRINCIPAL(S)

^{HANNES KRISTIAN SKISAKER 25613333 Director}

DIRECTOR(S)

^{VIDAR LERSTAD 21118656 Director}

^{Appointed on : 01/10/2006}

^{Street : INGA FALSEN GJERDRUMSVEI 13,}

^{1396 BILLINGSTAD}

^{Town : -}

^{Postcode : -}

^{Country : Norway}

^{HANNES KRISTIAN SKISAKER 25613333 Director}

^{Appointed on : 01/10/2006}

^{Street : 105 NAMLY DRIVE}

^{SHAMROCK PARK}

^{Town : SINGAPORE}

^{Postcode : 267500}

^{Country : Singapore}

^{QUEK CHEW YEN S1243886I Company Secretary}

^{Appointed on : 01/03/2007}

^{Street : 79 MARINE DRIVE}

^#23-32

^{Town : SINGAPORE}

^{Postcode : 440079}

^{Country : Singapore}

FORMER DIRECTOR(S)

^{JAN OKSUM 01299682}

^{JARLE DRAGVIK 20136656}

^{JOHN W. WEAVER 700844964}

^{PAUL ANTONIO PLANET 700947937}

^{ANDRE MAARTEN JOHAN VAN HATTUM BA0188475}

^{JACQUES VACHON MJ030853}

^{AU YAN SHUK SHAN MARIA S2570131C}

^{SE KANG OH SG0005275}

^{DAG A. TORVOLD 20673277}

^{TERRANCE JOHN HAMILTON G5847080K}

ACTIVITY (IES)

^{INVESTMENT COMPANIES Code: 12095}

^{IMPORTERS And EXPORTERS Code: 11760}

^{PAPER Code: 18}

^{PAPER DISTRIBUTORS Code: 15990}

^{BASED ON ACRA'S RECORD AS AT 21/05/2007}

^{1) OTHER INVESTMENT HOLDING COMPANIES}

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

CHARGES

^{Date : 01/06/2004}

^{Comments : CHARGE NO: C200402635}

^{AMOUNT SECURED: 0.00 AND ALL MONIES OWING}

^{CHARGEE(S): DBS BANK LTD, SHANGHAI BRANCH}

^{Date : 01/06/2004}

^{Comments : CHARGE NO: 199905375, 199905374 (DISCHARGED - 10/12/2001)}

^{AMOUNT SECURED: 0.00 AND ALL MONIES OWING}

^{CHARGEE(S): NORSKE SKOGINDUSTRIER ASA}

^{Date : 01/06/2004}

^{Comments : CHARGE NO: 199905326 (DISCHARGED - 10/12/2001)}

^{AMOUNT SECURED: 0.00 AND ALL MONIES OWING}

^{CHARGEE(S): CITICORP INVESTMENT BANK (SINGAPORE) LTD}

^{Date : 01/06/2004}

^{Comments : CHARGE NO: 199900299 (DISCHARGED - 26/08/2000)}

^{AMOUNT SECURED: 0.00 AND ALL MONIES OWING}

^{CHARGEE(S): HANSOL PAPER CO LTD}

^{Date : 01/06/2004}

^{Comments : CHARGE NO: C200402634}

^{AMOUNT SECURED: 0.00 AND ALL MONIES OWING}

^{CHARGEE(S): DBS BANK LTD, SHANGHAI BRANCH}

PREMISES/PROPERTY INFORMATIONS

No Premises/Property Information In Our Databases

BANKERS

^{THE DEVELOPMENT BANK OF SINGAPORE LTD, SHANGHAI BRANCH}

ASSOCIATED COMPANY(IES)

^{BEIJING KSPA RESOURCES RECYCLING CO China}

SHAREHOLDERS(S)

^{NORSKE SKOGINDUSTRIER ASA 600,004 Company}

^{Street : OKSENOYVEIEN 80 P.O. BOX 329}

^{N-1326 LYSAKER}

^{Town : -}

^{Postcode : -}

^{Country : Norway}

FORMER SHAREHOLDER(S)

^{ABITIBI-CONSOLIDATED INC 2}

HOLDING COMPANY

^{NORSKE SKOGINDUSTRIER ASA UF23747N % : 100}

SUBSIDIARY(IES)

^{PAN ASIA PAPER (THAILAND) COMPANY LTD Thailand}

PAYMENT HISTORY AND EXPERIENCES

^{Trade Morality : AVERAGE}

^{Liquidity : SUFFICIENT}

^{Payments : REGULAR}

^{Trend : LEVEL}

^{Financial Situation : AVERAGE}

LITIGATION(S)

No Litigation In Our Database

FINANCIAL ELEMENTS

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

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

^{Date Account Lodged: 18/07/2006}

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

^{Number of weeks: 52 52}

^{Consolidation Code: CONSOLIDATED CONSOLIDATED}

^{--- ASSETS ---}

^{Preliminary Exp 14,406,000 5,969,000}

^{Intangible Fixed Assets: 20,175,000 19,463,000}

^{Tangible Fixed Assets: 1,373,831,000 1,311,486,000}

^{Investments 198,000 -}

^{Total Fixed Assets: 1,408,610,000 1,336,918,000}

^{Inventories: 96,252,000 87,515,000}

^{Receivables: 212,582,000 158,354,000}

^{Cash, Banks, Securities: 20,728,000 33,471,000}

^{Other current assets: 10,924,000 15,008,000}

^{Total Current Assets: 340,486,000 294,348,000}

^{TOTAL ASSETS: 1,749,096,000 1,631,266,000}

^{--- LIABILITIES ---}

^{Equity capital: 600,000 600,000}

^{Reserves: 61,810,000 42,139,000}

^{Profit & loss Account: 196,210,000 202,006,000}

^{Other: 55,965,000 58,466,000}

^{Surplus equity: 599,400,000 599,400,000}

^{Total Equity: 913,985,000 902,611,000}

^{Long Term Loans: 443,081,000 363,023,000}

^{L/T deferred taxes: 84,550,000 65,368,000}

^{Other long term Liab.: 13,771,000 10,848,000}

^{Total L/T Liabilities: 541,402,000 439,239,000}

^{Trade Creditors: 97,045,000 90,837,000}

^{Due to Bank: 152,903,000 171,126,000}

^{Provisions: 1,873,000 2,603,000}

^{Other Short term Liab.: 37,779,000 20,713,000}

^{Prepay. & Def. charges: 4,109,000 4,137,000}

^{Total short term Liab.: 293,709,000 289,416,000}

^{TOTAL LIABILITIES: 835,111,000 728,655,000}

PROFIT & LOSS ACCOUNT

^{Net Sales 1,037,366,000 1,001,823,000}

^{NET RESULT BEFORE TAX: 38,853,000 49,685,000}

^{Tax : 13,316,000 14,036,000}

^{Net income/loss year: 25,537,000 35,649,000}

^{Interest Paid: 25,861,000 18,975,000}

^{Depreciation: 86,409,000 72,545,000}

^{Dividends: 33,848,000 36,897,000}

^{Wages and Salaries: 76,964,000 64,844,000}

^{Financial Income: 1,823,000 1,132,000}

RATIOS

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

^{Net result / Turnover(%): 0.02 0.04}

^{Fin. Charges / Turnover(%): 0.02 0.02}

^{Stock / Turnover(%): 0.09 0.09}

^{Net Margin(%): 2.46 3.56}

^{Return on Equity(%): 2.79 3.95}

^{Return on Assets(%): 1.46 2.19}

^{Dividends Coverage: 0.75 0.97}

^{Net Working capital: 46777000.00 4932000.00}

^{Cash Ratio: 0.07 0.12}

^{Quick Ratio: 0.79 0.66}

^{Current ratio: 1.16 1.02}

^{Receivables Turnover: 73.77 56.90}

^{Leverage Ratio: 0.93 0.83}

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

^{NET WORTH:}

^{THE BALANCE SHEET WAS PASSABLE WITH TOTAL EQUITY RISING BY 1.26% AMOUNTING TO USD913,985,000 (2004: USD902,611,000). THIS WAS CONTRIBUTED BY RESERVES BROUGHT FORWARD OF USD61,810,000 (2004: USD42,139,000). HOWEVER, RETAINED EARNINGS BROUGHT FORWARD DECREASED BY 2.87% TOTALLING USD196,210,000 (2004: USD202,006,000).}

^LEVERAGE:

^{THE LEVERAGE RATIO HAD GONE UP BUT REMAINED CONSERVATIVE AT 0.93 TIMES (2004: 0.83 TIMES). THIS INDICATED THAT THE GROUP'S TOTAL LIABILITIES WERE MORE SUBSTANTIAL IN RELATION TO ITS TOTAL EQUITY.}

^{IN THE SHORT TERM, TRADE CREDITORS ROSE BY 6.83% AMOUNTING TO USD97,045,000 (2004: USD90,837,000). AMOUNT DUE TO BANKS HAD FALLEN TO USD152,903,000 (2004: USD171,126,000) AND COMPRISED OF:}

^{* BANK LOANS (UNSECURED) OF USD98,652,000 (2004: USD84,194,000)}

^{* CURRENT PORTION OF NON-CURRENT BANK LOANS (SECURED) OF USD24,658,000 (2004: USD29,556,000)}

^{* BONDS (UNSECURED) OF USD29,593,000 (2004: USD57,376,000)}

^{CERTAIN PROPERTY, PLANT & EQUIPMENT OF THE SUBSIDIARIES ARE PLEDGED AS COLLATERAL FOR LONG-TERM BORROWINGS WITH A MAXIMUM VALUE TOTALLING USD213.1 MILLION (CONSISTING OF USD12 MILLION, KRW114,500 MILLION AND RMB711 MILLION [2004: USD28.1 MILLION (CONSISTING OF USD12 MILLION, KRW114,500 MILLION AND RMB786 MILLION)]. A SUBSIDIARY HAS ALSO DEPOSITED CASH OF USD2.7 MILLION (EQUIVALENT TO RMB22.1 MILLION) [2004: USD2.6 MILLION (EQUIVALENT TO RMB21.8 MILLION)] AS SECURITY FOR BANK BORROWINGS.}

^{IN ADDITION, THE COMPANY HAS A COMMITMENT TO PLEDGE EXISTING AND FUTURE ASSETS AS COLLATERAL. AS AT 31 DECEMBER 2005, ASSETS TOTALLING USD258.3 MILLION (EQUIVALENT TO RMB2 BILLION) OF A SUBSIDIARY, HEBEI PAN ASIA LONG-TENG CO., LTD. HAVE BEEN PLEDGED AS COLLATERAL UNDER THE PROJECT FINANCING.}

^{CERTAIN BORROWINGS CERTAIN CONVENANTS WHICH REQUIRE MAINTENANCE OF FINANCIAL RATIOS, LIMIT THE INCURRENCE OF ADDITIONAL INDEBTNESS AND ASSET SALES, MAINTAINING MINIMUM INVESTMENTS IN SUBSIDIARIES AND OTHER CUSTOMARY RESTRICTIONS.}

^{OTHER CURRENT LIABILITIES OF USD37,779,000 (2004: USD20,713,000) COMPRISED OF:}

^{* NON-TRADE PAYABLES TO THIRD PARTIES OF USD25,046,000 (2004: USD10,197,000)}

^{* NON-TRADE PAYABLES TO SHAREHOLDERS OF USD108,000 (2004: USD82,000)}

^{* OTHER PAYABLES OF USD5,660,000 (2004: USD3,163,000)}

^{* OTHER LIABILITIES OF USD6,619,000 (2004: USD6,870,000)}

^{* FAIR VALUES OF FORWARD FOREIGN EXCHANGE CONTRACTS OF USD346,000 (2004: USD401,000)}

^{OTHER LONG TERM LIABILITIES OF USD13,771,000 (2004: USD10,848,000) REPRESENTED:}

^{* ACCRUED SEVERANCE LIABILITIES OF USD10,884,000 (2004: USD9,346,000)}

^{* OTHER PAYABLES OF USD1,011,000 (2004: USD1,143,000)}

^{* FAIR VALUES OF CROSS CURRENCY SWAP CONTRACTS OF USD1,876,000 (2004: USD359,000)}

^LIQUIDITY:

^{THE OVERALL LIQUIDITY OF THE GROUP WAS FAIRLY HEALTHY AND IMPROVING. NET WORKING CAPITAL IMPROVED SIGNIFICANTLY, REGISTERING HIGHER AT USD46,777,000 (2004: USD4,932,000).}

^{ON THE OTHER HAND, THE QUICK RATIO WAS LACKING AT 0.79 TIMES (2004: 0.66 TIMES) WHILE THE CURRENT RATIO WAS BARELY SUFFICIENT AT 1.16 TIMES (2004: 1.02 TIMES).}

^{PROFITABILITY:}

^{REVENUE FOR FY2005 ROSE BY 3.55%, ACCOUNTING FOR USD1,037,366,000 (2004: USD1,001,823,000). HOWEVER, NET INCOME DECLINED BY 28.37%, TOTALLING USD25,537,000 (2004: USD35,649,000). THIS WAS ATTRIBUTABLE TO A RISE IN TOTAL EXPENSES OF USD999,709,000 (2004: USD954,201,000).}

^{AS A RESULT, NET MARGIN STOOD LOWER AT 2.46% (2004: 3.56%).}

^{DEBT SERVICING:}

^{DEBT SERVICING PROBLEMS MIGHT NOT BE ANTICIPATED IN VIEW OF THE IMPROVING LIQUIDITY AND IF TRADE RECEIVABLES WERE FORTHCOMING.}

^{IN ADDITION, AVERAGE COLLECTION PERIOD WAS COMPUTED AT 74 DAYS (2004: 57 DAYS).}

^{PRELIMINARY EXPENSES}

^{THIS COMPONENT OF USD14,406,000 (2004: USD5,969,000) COMPRISED OF:}

^{* OTHER NON-CURRENT ASSETS OF USD4,057,000 (2004: USD3,573,000)}

^{* DEFERRED INCOME TAX ASSETS OF USD10,349,000 (2004: USD2,396,000)}

^{OTHER CURRENT ASSETS}

^{THIS COMPONENT OF USD10,924,000 (2004: USD15,008,000) REFERRED TO:}

^{* OTHER CURRENT ASSETS OF USD6,589,000 (2004: USD11,868,000)}

^{* NON-TRADE RECEIVABLES OF USD3,348,000 (2004: USD3,140,000)}

^{* LOANS TO SUPPLIERS OF USD987,000 (2004: NIL)}

^{NOTES TO THE FINANCIAL STATEMENTS:}

^{CONTINGENT LIABILITIES}

^{DETAILS AND ESTIMATES OF MAXIMUM AMOUNTS OF CONTINGENT LIABILITIES ARE AS FOLLOWS:}

^{* LETTER OF GUARANTEES (UNSECURED) OF USD650,000 (2004: USD780,000)}

^{* DISCOUNTED NOTES OF USD750,000 (2004: NIL)}

^{* LETTERS OF CREDIT OF NIL (2004: USD250,000)}

^{CAPITAL COMMITMENTS}

^{CAPITAL EXPENDITURES CONTRACTED FOR AT THE BALANCE SHEET DATE BUT NOT RECOGNISED IN THE FINANCIAL STATEMENTS ARE AS FOLLOWS:}

^{* EXPENDITURE FOR PROPERTY, PLANT & EQUIPMENT CONTRACTED FOR}

^{- GROUP : USD14,380,000 (2004: USD56,025,000)}

^{- COMPANY: NIL (2004: NIL)}

^{* INVESTMENT IN ASSOCIATE}

^{- GROUP : USD90,000 (2004: NIL)}

^{- COMPANY: USD90,000 (2004: NIL)}

^{LIQUIDITY RISK}

^{THE GROUP HAS A POLICY OF MAINTAINING A LIQUIDITY RESERVE OF AT LEASE 10% OF GROUP'S TURNOVER (2004: 10% OF GROUP'S DEBTS).}

^{WITH THE ACQUISITION OF THE GROUP BY NORSKE SKOGINDUSTRIES ASA, THE REQUIREMENT TO MAINTAIN A LIQUIDITY RESERVE IS MINIMISED AND NORSKE SKOGINDUSTRIES ASA, BEING THE SOLE OWNER OF THE GROUP, WILL PROVIDE SUPPORT WHEN NECESSARY.}

^{EVENT OCCURRING AFTER BALANCE SHEET DATE}

^{ON 9 JANUARY 2006, THE COMPANY MADE THE FINAL CAPITAL CONTRIBUTION OF ITS INVESTMENT IN AN ASSOCIATED COMPANY, BEIJING KSPA RESOURCES RECYCLING CO. LTD FOR A CASH CONSIDERATION OF USD90,000. THE ASSOCIATED COMPANY HAS YET TO COMMENCE OPERATIONS.}

BACKGROUND/OPERATION

^{THE COMPANY WAS INCORPORATED IN THE REPUBLIC OF SINGAPORE ON 13/06/1998 AS A LIMITED PRIVATE COMPANY AND WAS FORMERLY KNOWN AS "DELPHINIUM ENTERPRISE PTE LTD".}

^{ON 18/11/1998, SUBJECT CHANGED TO ITS NAMESTYLE OF "PAN ASIA PAPER CO. PTE LTD".}

^{SUBSEQUENTLY ON 18/11/2005, SUBJECT AGAIN CHANGED TO ITS PRESENT NAMESTYLE OF "NORSKE SKOG PANASIA CO. PTE. LTD.".}

^{AS AT 21/05/2007, SUBJECT HAS AN ISSUED AND PAID-UP CAPITAL COMPRISING OF 4 ORDINARY SHARES OF A VALUE OF S$4 AND 600,000 ORDINARY SHARES OF A VALUE OF US$600,000,000.}

^{PRINCIPAL ACTIVITIES:}

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

^{1) OTHER INVESTMENT HOLDING COMPANIES}

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

^{DURING THE FINANCIAL YEAR(S), UNDER REVIEW, SUBJECT'S PRINCIPAL ACTIVITIES ARE INVESTMENT HOLDING, PROVISION OF SERVICES AS A FINANCIAL TREASURY CENTRE, PROVISION OF MANAGEMENT SERVICES TO ITS SUBSIDIARIES AND SELLING OF NEWSPRINT AND GROUNDWOOD SPECIALTY PAPER PRODUCTS.}

^{THE COMPANY'S IMMEDIATE AND ULTIMATE HOLDING CORPORATION IS NORSKE SKOGINDUSTRIER ASA, INCORPORATED IN NORWAY.}

^{ON 17 NOVEMBER 2005, NORSKE SKOGINDUSTRIER ASA COMPLETED THE ACQUISITION OF ABITIBI - CONSOLIDATED INC.'S 50% SHAREHOLDING IN THE COMPANY. FOLLOWING THE ACQUISITION, THE COMPANY BECAME A WHOLLY-OWNED SUBSIDIARY OF NORSKE SKOGINDUSTRIER ASA. PRIOR TO THE ACQUISITION, INTERESTS IN TEH SHARE CAPITAL OF THE COMPANY WERE HELD EQUALLY BY ABITIBI-CONSOLIDATED INC. AND NORSKE SKOGINDUSTRIER ASA.}

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

^{SUBJECT IS LISTED IN THE SINGAPORE LOCAL DIRECTORY UNDER THE CLASSIFICATION OF: INVESTMENT MANAGEMENT AND/OR COMPANIES.}

^{SUBJECT ENGAGES IN THE FOLLOWING ACTIVITY:}

^{* MANUFACTURER AND SALES OF NEWSPRINT AND OTHER PUBLICATION PAPER PRODUCTS}

^{TODAY, SUBJECT PRODUCES 1.45 MILLION TONNES OF NEWSPRINT AND MECHANICAL PAPER ANNUALLY. THIS REPRESENTS ABOUT 25 PER CENT OF ASIA'S TOTAL MARKET DEMAND OUTSIDE OF JAPAN.}

^{THE GROUP OPERATES IN FIVE MAIN GEOGRAPHICAL AREAS:}

^{* KOREA}

^{- PRODUCTION & SALE OF NEWSPRINT AND GROUNDWOOD SPECIALTY PAPER PRODUCTS IN ASIA PACIFIC REGION;}

^{* SINGAPORE}

^{- INVESTMENT HOLDING, PROVISION OF SERVICES AS A FINANCIAL TREASURY CENTRE, PROVISION OF MANAGEMENT SERVICES TO ITS SUBSIDIARIES AND SELLING OF NEWSPRINT AND GROUND WOOD SPECIALTY PAPER PRODUCTS;}

^{* PEOPLE'S REPUBLIC OF CHINA}

^{- PRODUCTION & SALE OF NEWSPRINT PAPER PRODUCTS IN PEOPLE'S REPUBLIC OF CHINA}

^{* THAILAND}

^{- PRODUCTION & SALE OF NEWSPRINT PAPER PRODUCTS IN THAILAND}

^{* OTHER COUNTRIES}

^{- PROMOTION & MARKETING OF PAPER PRODUCTS IN OCEANIA AND ASIA REGION}

^{REVENUE BY GEOGRAPHICAL SEGMENTS:}

^{* KOREA}

^{- 2005: USD396,615,000 (2004: USD408,872,000)}

^{* SINGAPORE}

^{- 2005: USD466,803,000 (2004: USD457,193,000)}

^{* PEOPLE'S REPUBLIC OF CHINA}

^{- 2005: USD115,485,000 (2004: USD77,334,000)}

^{* THAILAND}

^{- 2005: USD58,463,000 (2004: USD58,424,000)}

^{* OTHER COUNTRIES}

^{- 2005: NIL (2004: NIL)}

^{PRODUCT CATEGORIES:}

^{* BOOK}

^{* NEWS}

^{* DIRECTORY}

^{* HI-BRITE}

^{* LWC}

^{* SC}

^{* MFP}

^{IMPORT COUNTRIES:}

^{* EUROPE}

^{* NORTH AMERICA}

^{* CANADA}

^{* NORWAY}

^{SOLE DISTRIBUTORS FOR:}

^{* ABITIBI CONSOLIDATED, NORSKE SKOG AND THEIR AFFILIATES IN THE ASIA-PACIFIC REGION}

^{QUALITY ASSESSMENT:}

^{* ISO 9001:2000}

^{NUMBER OF EMPLOYEES:}

^{* APPROXIMATELY 2100 (GROUP)}

^{NO OTHER TRADE INFORMATION WAS MADE AVAILABLE ON 29/05/2007.}

^{REGISTERED AND BUSINESS ADDRESS:}

^{4 SHENTON WAY}

^#29-01

^{SGX CENTRE 2}

^{SINGAPORE 068807}

^{DATE OF CHANGE OF ADDRESS: 08/12/2001}

^{-- HEADQUARTERS}

^{-- RENTED PREMISE}

^{-- PREMISE OWNED BY: SHING KWAN (PTE.) LTD.}

^WEBSITE:

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

^EMAIL:

^{* info@panasia.com.sg}

MANAGEMENT

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

^{1) VIDAR LERSTAD, A NORWEGIAN}

^{- BASED IN NORWAY}

^{2) HANNES KRISTIAN SKISAKER, A NORWEGIAN}

^{- 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.

OVERVIEW OF SINGAPORE

PAST PERFORMANCE

SINGAPORE’S ECONOMY GREW BY 6.6% IN 4Q 23006, 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%)

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