MIRA INFORM REPORT

Report Date :

05.11.2007

IDENTIFICATION DETAILS

Name :	SBC PETROCHEMICAL PTE LTD
Registered Office :	9 Temassk Boulevand, 31 – 02 Duktom Road, Suntec Tower 2, 038989
Country :	Singapore
Financials (as on) :	31.12.2006
Date of Incorporation :	10.05.2001
Com. Reg. No.:	200103064K
Legal Form :	Pte Ltd
Line of Business :	Petrol and Oil Marketers and Distributors

RATING & COMMENTS

MIRA’s Rating :

Ba

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Status :	Satisfactory
Payment Behaviour :	Regular
Litigation :	Clear

Subject Company : SBC PETROCHEMICAL PTE LTD

Line Of Business  : THE PROMOTION, SALES, DISTRIBUTION, MARKETING, IMPORT AND EXPORT

OF CRUDE OIL, NATURAL GAS STEAM, HIGH-TEMPERATURE HOT WATER,

PETROLEUM, PETROLEUM PRODUCTS, PETROLEUM DERIVATIVES AND

ITS CHEMICAL RAW PRODUCTS OF EVERY DESCRIPTION AND ORIGIN

Parent Company : CONCORD INTERNATIONAL OIL LTD

(PERCENTAGE OF SHAREHOLDING: 60%)

Financial Elements

FY 2006

CONSOLIDATED

Sales : US$160,332,888

Networth : US$5,809,185

Paid-Up Capital : US$138,773

Net result : US$2,147,981

Net Margin(%) : 1.34

Return on Equity(%): 36.98

Leverage Ratio : 5.18

COMPANY IDENTIFICATION

^{Subject Company : SBC PETROCHEMICAL PTE LTD}

^{Former Name : -}

^{Business Address : 9 TEMASEK BOULEVARD}

^#31-02

^{DUXTON ROOM SUNTEC TOWER TWO}

^{Town: SINGAPORE}

^{Postcode: 038989}

^{County: -}

^{Country: Singapore}

^{Telephone: 6396 3862}

^{Fax: 6398 0329}

^{ROC Number: 200103064K}

^{Reg. Town: -}

SUMMARY

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

^{Legal Form : Pte Ltd}

^{Date Inc. : 10/05/2001}

^{Previous Legal Form : -}

^{Summary year : 31/12/2006}

^{Sales : 160,332,888}

^{Networth : 5,809,185}

^{Capital : -}

^{Paid-Up Capital : 138,773}

^{Employees : 2}

^{Net result : 2,147,981}

^{Share value : -}

^{AUDITOR: K B LEE & CO}

^{BASED ON ACRA'S}

^{NO. OF SHARES CURRENCY AMOUNT}

^{ISSUED ORDINARY 250,000 SGD 250,000}

^{PAID-UP ORDINARY - SGD 250,000}

REFERENCES

^{Litigation : No}

^{Company status : TRADING}

^{Started : 10/05/2001}

PRINCIPAL(S)

^{LEUNG MAN HIM K5612136 Director}

DIRECTOR(S)

^{LEUNG MAN HIM K5612136 Director}

^{Appointed on : 10/05/2001}

^{Street : 9 TEMASEK BOULEVARD}

^#31-02

^{SUNTEC TOWER TWO}

^{Town : SINGAPORE}

^{Postcode : 038989}

^{Country : Singapore}

^{LEUNG MAN HIM K5612136 Company Secretary}

^{Appointed on : 01/01/2006}

^{Street : 9 TEMASEK BOULEVARD}

^#31-02

^{SUNTEC TOWER TWO}

^{Town : SINGAPORE}

^{Postcode : 038989}

^{Country : Singapore}

^{CHAN LUK YAN VICKY HA9055643 Director}

^{Appointed on : 01/06/2005}

^{Street : FLAT F, 8 FLOOR, KWEILIN HOUSE}

^{TSUEN WAN CENTER}

^{TSUEN WAN}

^Town:

^{Postcode :}

^{Country : Hong Kong}

^{VICTORIA HO HA9061334 Director}

^{Appointed on : 01/07/2005}

^{Street : SUITE 1121B OCEAN CENTRE}

^{5 CANTON ROAD}

^TSIMSHATSUI

^{Town : KOWLOON}

^Postcode:

^{Country : Hong Kong}

^{CHEUNG SUI LING S2670047G Director}

^{Appointed on : 10/05/2001}

^{Street : 9 TEMASEK BOULEVARD}

^#31-02

^{SUNTEC TOWER 2}

^{Town : SINGAPORE}

^{Postcode : 038989}

^{Country : Singapore}

FORMER DIRECTOR(S)

^{WEE WOON HONG S1681953J}

^{LEUNG KAI FAI S2670046I}

ACTIVITY(IES)

^{PETROL And OIL MARKETERS And DISTRS Code:1632}

^{PETROLEUM PRODUCTS Code:16350}

^{BASED ON ACRA'S RECORD AS AT 01/11/20}

^{1) WHOLESALE OF PETROCHEMICAL PRODUCTS;}

^{HORSE BREEDING, HORSE RACING & RELATED ACTIVITIES}

CHARGES

^{Date : 19/09/2005}

^{Comments : CHARGE NO: C200505623}

^{AMOUNT SECURED: 0.00 AND ALL MONIES OWING}

^{CHARGEE: THE HONGKONG AND SHANGHAI BANKING CORPORATION LTD}

^{Date : 12/12/2006}

^{Comments : CHARGEE NO.: C200608362, C200608364, C200608365}

^{AMOUNT SECURED: 0.00 ALL MONIES OWING}

^{CHARGEE[S]: THE BANK OF TOKYO-MITSUBISHI UFJ, HONG KONG BRANCH}

^{Date : 12/12/2006}

^{Comments : CHARGEE NO.: C200608367, C200608366}

^{AMOUNT SECURED: 0.00 ALL MONIES OWING}

^{CHARGEE[S]: THE BANK OF TOKYO-MITSUBISHI UFJ, HONG KONG BRANCH}

^{Date : 26/06/2007}

^{Comments : CHARGE NO: C200704801}

^{AMOUNT SECURED: 0.00 AND ALL MONIES OWING}

^{CHARGEE: STANDARD CHARTERED BANK (HK) LTD}

^{Date : 19/09/2001}

^{Comments : CHARGE NO: 200104552}

^{AMOUNT SECURED: 0.00 AND ALL MONIES OWING}

^{CHARGEE(S): THE HONGKONG AND SHANGHAI BANKING CORPN LTD}

^{Date : 23/12/2004}

^{Comments : CHARGE NO: C200406579}

^{AMOUNT SECURED: 0.00 AND ALL MONIES OWING}

^{CHARGEE: THE BANK OF EAST ASIA LTD}

^{Date : 24/11/2004}

^{Comments : CHARGE NO: C200405892}

^{AMOUNT SECURED: 0.00 AND ALL MONIES OWING}

^{CHARGEE: THE HONGKONG AND SHANGHAI BANKING CORPORATION LTD}

^{Date : 15/02/2005}

^{Comments : CHARGEE NO.: C200500934}

^{AMOUNT SECURED: 0.00 ALL MONIES OWING}

^{CHARGEE[S]: THE BEST OF EAST ASIA LIMTED}

^{Date : 02/10/2007}

^{Comments : CHARGEE NO.: C200708272}

^{AMOUNT SECURED: 0.00 ALL MONIES OWING}

^{CHARGEE[S]: THE BANK OF TOKYO-MITSUBISHI UFJ, S'PORE BRANCH}

PREMISES/PROPERTY INFORMATIONS

No Premises/Property Information In Our Databases

BANKERS

^{THE HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED}

^{THE BANK OF EAST ASIA LIMITED}

^{STANDARD CHARTERED BANK (HK) LTD}

^{THE BANK OF TOKYO-MITSUBISHI UFJ}

SHAREHOLDERS(S)

^{CONCORD INTERNATIONAL OIL LTD 50,000 Company}

^{Street : THE CREDQUE BUILDING PO BOX 116}

^{ROAD TOWN}

^{Town : TORTOLA}

^{Postcode : BVI}

^{Country : Virgin Islands (British)}

^{LEUNG MAN HIM 75,000 Private Person}

^{Street : 9 TEMASEK BOULEVARD}

^#31-02

^{SUNTEC TOWER TWO}

^{Town : SINGAPORE}

^{Postcode : 038989}

^{Country : Singapore}

^{CHEUNG SUI LING 25,000 Private Person}

^{Street : 9 TEMASEK BOULEVARD}

^#31-02

^{SUNTEC TOWER 2}

^{Town : SINGAPORE}

^{Postcode : 038989}

^{Country : Singapore}

HOLDING COMPANY

^{CONCORD INTERNATIONAL OIL LTD UF29239H % : 60.00}

SUBSIDIARY(IES)

^{SBC ASIAPACIFIC PTY LTD}

Australia

^{SBC (TIANJIN) CHEMICAL CO. LTD}

China

PAYMENT HISTORY AND EXPERIENCES

^{Trade Morality : AVERAGE}

^{Liquidity : SUFFICIANT}

^{Payments : REGULAR}

^{Trend : UPWARD}

^{Financial Situation : AVERAGE}

FINANCIAL ELEMENTS

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

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

^{Date Account Lodged: 24/09/2007}

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

^{Number of weeks: 52 52}

^{Consolidation Code: CONSOLIDATED CONSOLIDATED}

^{--- ASSETS}

^{Tangible Fixed Assets: 2,206,273 2,053,773}

^{Investments - 28,140}

^{Total Fixed Assets: 2,206,273 2,081,913}

^{Inventories: 10,629,310 5,097,244}

^{Receivables: 20,640,206 4,437,553}

^{Cash,Banks, Securitis: 2,181,142 1,468,932}

^{Other current assets: 246,968 813,939}

^{Total Current Assets: 33,697,626 11,817,668}

^{TOTAL ASSETS: 35,903,899 13,899,581}

^{--- LIABILITIES}

^{Equity capital: 138,773 138,773}

^{Reserves: 363,947 2,051}

^{Profit & loss Account: 5,306,465 3,757,925}

^{Other: 61,237}

^{Total Equity: 5,809,185 3,959,986}

^{Long Term Loans: 1,311,674 1,308,080}

^{Total L/T Liabilities: 1,311,674 1,308,080}

^{Trade Creditors: 17,651,202 5,068,479}

^{Prepay. & Def. charges: 28,491 160,717}

^{Advanced payments: 126,379 215,704}

^{Due to Bank: 6,259,631 2,538,150}

^{Provisions: 597,152 595,597}

^{Other Short term Liab.: 4,120,185 52,868}

^{Total short term Liab.: 28,783,040 8,631,515}

^{TOTAL LIABILITIES: 30,094,714 9,939,595}

^{--- PROFIT & LOSS ACCOUNT}

^{Net Sales 160,332,888 80,872,522}

^{NET RESULT BEFORE TAX: 3,013,341 2,404,433}

^{Tax : 865,360 567,852}

^{Net income/loss year: 2,147,981 1,836,581}

^{Interest Paid: 402,488 136,163}

^{Depreciation: 126,825 57,815}

^{Dividends: 247,309 96,142}

^{Directors Emoluments: 1,320,002 343,528}

^{Wages and Salaries: 1,557,255 544,562}

^{Financial Income: 40,624 18,423}

RATIOS

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

^{Turnover per employee: 80166444.00 40436261.00}

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

^{Stock / Turnover(%): 0.07 0.06}

^{Net Margin(%): 1.34 2.27}

^{Return on Equity(%): 36.98 46.38}

^{Return on Assets(%): 5.98 13.21}

^{Dividends Coverage: 8.69 19.10}

^{Net Working capital: 4914586.00 3186153.00}

^{Cash Ratio: 0.08 0.17}

^{Quick Ratio: 0.79 0.68}

^{Current ratio: 1.17 1.37}

^{Receivables Turnover: 46.34 19.75}

^{Leverage Ratio: 5.18 2.51}

^{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}

^{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 WAS SEEN TO BE FAIR IN VIEW OF}

^{THE FOLLOWING:}

^{NET WORTH:}

^{THE BALANCE SHEET WAS CONSIDERED PASSABLE WITH NET WORTH IMPROVED BY}

^{46.70% FROM US$3,959,986 IN FY 2005 TO US$5,809,185 IN FY 2006. THIS}

^{WAS DUE TO HIGHER ACCUMULATED PROFIT OF US$5,306,465 (2005:}

^{US$3,757,925); A RISE OF 41.20 FROM THE PRIOR FINANCIAL YEAR.}

^LEVERAGE:

^{IN THE SHORT-TERM, SUBJECT WAS LARGELY FINANCED BY TRADE CREDITORS}

^{WHICH MADE UP 61.33% (2005: 58.72%) OF THE TOTAL CURRENT LIABILITIES}

^{AND AMOUNTED TO US$17,651,202 (2005: US$5,068,479). THE BREAKDOWN IS}

^{AS FOLLOWS:}

^{-TRADE CREDITORS - 2006: US$16,805,644 (2005: US$3,339,228)}

^{-RELATED PARTIES - 2006: US$845,558 (2005: US$1,729,251)}

^{IN THE LONG-TERM, SUBJECT WAS WHOLLY FINANCED BY LONG TERM LOANS AND}

^{AMOUNTED TO US$1,311,674 (2005: US$1,308,080). THE BREAKDOWN IS AS}

^FOLLOWS:

^{-TERM LOAN - SECURED - 2006: US$1,311,674 (2005: US$1,308,080)}

^{AMOUNT DUE TO BANKS OF US$6,259,631 (2005: US$2,538,150) CONSISTED OF:}

^{-TERM LOANS - SECURED - 2006: US$1,457,872 (2005: US$99,341)}

^{-BILLS PAYABLE - SECURED - 2006: US$4,801,759 (2005: US$2,438,809)}

^{IN ALL, LEVERAGE RATIO ROSE FROM 2.51 TIMES TO 5.18 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 CHANGES IN NET WORKING CAPITAL AND LIQUIDITY RATIOS. CURRENT RATIO}

^{FELL TO 1.17 TIMES, DOWN FROM 1.37 TIMES AND QUICK RATIO ROSE TO 0.79}

^{TIMES FROM 0.68 TIMES IN FY 2005.}

^{NET WORKING CAPITAL IMPROVED BY 54.25% FROM US$3,186,153 IN FY 2005 TO}

^{US$4,914,586.}

^{CASH AND CASH EQUIVALENTS COMPRISE OF:}

^{-FIXED DEPOSITS WITH BANKS - 2006: US$318,287 (2005: US$256,193)}

^{-CASH AND BANK BALANCES - 2006: US$1,862,855 (2005: US$1,212,739)}

^{PROFITABILITY:}

^{REVENUE POSTED AN INCREASE OF 98.25% FROM US$80,872,522 IN FY 2005 TO}

^{US$160,332,888 AND NET PROFIT ROSE BY 16.96% TO US$2,147,981 (2005:}

^{US$1,836,581). HENCE, NET MARGIN FELL TO 1.34% (2005: 2.27%).}

^{DEBT SERVICING:}

^{DEBT SERVICING PROBLEMS MIGHT NOT BE EXPECTED IF REVENUE AND EARNINGS}

^{CAN BE MAINTAINED AND PAYMENT BY TRADE DEBTORS ARE FORTHCOMING.}

NOTES TO THE FINANCIAL STATEMENTS:

^{TERM LOAN AND BANKING FACILITIES:}

^{THE TERM LOAN AND BANKING FACILITIES ARE SECURED BY:}

^{(I) LEGAL MORTGAGE ON THE DOCUMENTS OF THE TITLE OF THE PROPERTY WITH}

^{A CARRYING VALUE OF US$1,872,290 (2005: US$1,911,296)}

^{(II) THE CERTIFICATE OF THE FIXED DEPOSITS OF US$209,228}

^{(2005: S$205,497) AND}

^{(III) LEGAL ASSIGNMENT OVER THE COMPANY'S ACCOUNTS RECEIVABLES}

^{(B) THE TERM LOANS ARE REPAYABLE AS FOLLOWS:}

^{NOT LATER THAN ONE YEAR - 2006: US$1,457,872 (2005: US$99,341)}

^{LATER THAN ONE YEAR BUT NOT LATER THAN FIVE YEARS - 2006: US$431,205}

^{(2005: US$397,366)}

^{LATER THAN FIVE YEARS - 2006: US$880,469 (2005: US$910,714)}

^{(C) BANK LOANS INTEREST:}

^{(I) A BANK LOAN OF US$1,419,475 (2005: US$1,407,421) BEARS INTEREST AT}

^{COST OF FUNDS PLUS 1.5% P.A. (2005: COST OF FUNDS PLUS 1.5% P.A.)}

^{(II) BANK LOANS TOTALLING US$1,350,071 (2005: NIL) BEAR INTEREST}

^{RANGING FROM 9.25% TO 10.25% P.A.}

BACKGROUND/OPERATION

^{THE COMPANY WAS INCORPORATED IN THE REPUBLIC OF SINGAPORE ON 0/05/2001 AS A LIMITED PRIVATE COMPANY AND IS TRADING UNDER ITS PRESENT NAMESTYLE AS "SBC PETROCHEMICAL PTE LTD".}

^{THE COMPANY HAS ISSUED AND PAID-UP CAPITAL OF 250,000 SHARES OF A VALUE OF S$250,000.}

^{PRINCIPAL ACTIVITIES:}

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

^{1) WHOLESALE OF PETROCHEMICAL PRODUCTS; HORSE BREEDING, HORSE RACING & RELATED ACTIVITIES}

^{2) WHOLESALE OF PETROCHEMICAL PRODUCTS}

^{DURING THE FINANCIAL YEAR UNDER REVIEW, THE PRINCIPAL ACTIVITIES OFTHE COMPANY CONSIST OF THE PROMOTION, SALES, DISTRIBUTION, MARKETING, IMPORT AND EXPORT OF CRUDE OIL, NATURAL GAS STEAM, HIGH-TEMPERATURE}

^{HOT WATER, PETROLEUM, PETROLEUM PRODUCTS, PETROLEUM DERIVATIVES AND ITS CHEMICAL RAW PRODUCTS OF EVERY DESCRIPTION AND ORIGIN.}

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

^{SUBJECT ENGAGES IN THE FOLLOWING ACTIVITIES: * SALES AND DISTRIBUTION OF BASE OIL}

^{IMPORT COUNTRIES:}

^{* CHINA}

^{* KOREA}

^{EXPORT COUNTRIES:}

^{* SOUTH EAST ASIA}

^{THE SUBJECT DOES EXPORTS AND SELLS LOCALLY IN THE SAME PERCENTAGE.}

^{NUMBER OF EMPLOYEES:}

^{* COMPANY - 2007: 2}

^{NO OTHER TRADE INFORMATION IS AVAILABLE ON 05/11/2007.}

^{THE HOLDING AND ULTIMATE HOLDING COMPANY IS CONCORD INTERNATIONAL OIL LIMITED, INCORPORATED IN BRITISH VIRGIN ISLAND.}

^{NUMBER OF EMPLOYEES (31 DECEMBER):}

^{* COMPANY - 2006: NOT AVAILABLE (2005: NOT AVAILABLE; 2004: 13; 2003: 11; 2002: 3)}

^{REGISTERED AND BUSINESS ADDRESS:}

^{9 TEMASEK BOULEVARD}

^{#31-02 DUXTON ROOM SUNTEC TOWER TWO}

^{SINGAPORE 038989}

^{- RENTED PREMISE}

^{- OWNED BY CARDIFF INVESTMENTS PTE LTD}

^{- DATE OF CHANGE OF ADDRESS: 01/03/2002}

^{YOUR PROVIDED CONTACT NUMBER:}

^{TEL: 6596 3862}

^{- INCORRECT}

^WEBSITE:

^-

^EMAIL:

^-

MANAGEMENT

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

^{1) CHAN LUK YAN VICKY, A CHINESE}

^{- BASED IN HONG KONG.}

^{2) VICTORIA HO, A CHINESE}

^{- BASED IN HONG KONG.}

^{3) LEUNG MAN HIM, A BRITISH}

^{- BASED IN SINGAPORE.}

^{4) CHEUNG SUI LING, A SINGAPORE PERMANENT RESIDENT}

^{- HOLDS NO OTHER DIRECTORSHIP IN OUR DATABASE.}

Singapore’s Country Rating 2007

Rating: A1

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