MIRA INFORM REPORT

Report Date :

13.11.2007

IDENTIFICATION DETAILS

Name :	ITOCHU PLASTICS PTE., LTD.
Registered Office :	^9 Raffles Place, #41-01, Republic Plaza, Singapore – 048619
Country :	Singapore
Financials (as on) :	31.12.2005
Date of Incorporation :	^28/04/1988
Com. Reg. No.:	^198801314D
Legal Form :	^Pte Ltd
Line of Business :	Wholesale trading in all kinds of Plastic Raw Materials, Plastic and Chemical Products

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

ITOCHU PLASTICS PTE., LTD.

Line Of Business 

WHOLESALE TRADING IN ALL KINDS OF PLASTIC RAW MATERIALS, PLASTIC AND CHEMICAL PRODUCTS

Parent Company

ITOCHU CORPORATION

(PERCENTAGE OF SHAREHOLDING: 70%)

Financial Elements

FY 2005

COMPANY

Sales : US$601,537,000

Networth : US$4,775,000

Paid-Up Capital : US$1,473,000

Net result : US$1,584,000

Net Margin(%) : 0.26

Return on Equity(%) : 33.17

Leverage Ratio : 19.82

COMPANY IDENTIFICATION

^{Subject Company : ITOCHU PLASTICS PTE., LTD.}

^{Former Name : C. ITOH PLASTICS INTERNATIONAL}

^{Business Address: 9 RAFFLES PLACE}

^#41-01

^{REPUBLIC PLAZA}

^{Town: SINGAPORE}

^{Postcode: 048619}

^{County: -}

^{Country: Singapore}

^{Telephone: 6230 0400}

^{Fax: 6230 0578}

^{ROC Number: 198801314D}

^{Reg. Town: -}

PREVIOUS IDENTIFICATION

^{C. ITOH PLASTICS INTERNATIONAL PTE LTD}

^{DATE OF CHANGE OF NAME: 03/01/1994}

SUMMARY

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

^{Legal Form: Pte Ltd}

^{Date Inc.: 28/04/1988}

^{Previous Legal Form: -}

^{Summary year : 31/12/2005}

^{Sales: 601,537,000}

^{Networth : 4,775,000}

^{Capital: 1,980,000}

^{Paid-Up Capital: 1,473,000}

^{Employees: 27}

^{Net result : 1,584,000}

^{Share value: -}

^{AUDITOR: KPMG}

^{BASED ON ACRA'S RECORD AS AT 10/11/2007}

^{NO. OF SHARES CURRENCY AMOUNT}

^{ISSUED ORDINARY 2,750,000.00 SGD 2,750,000.00}

^{PAID-UP ORDINARY - SGD 2,750,000.00}

REFERENCES

^{Litigation: No}

^{Company status : TRADING}

^{Started : 28/04/1988}

PRINCIPAL(S)

^{UEDA AKIHIRO G5655808Q Managing Director}

DIRECTOR(S)

^{UEDA AKIHIRO G5655808Q Director}

^{Appointed on : 01/07/2002}

^{Street : 177B RIVER VALLEY ROAD}

^#10-03

^{LIANG COURT}

^{Town: SINGAPORE}

^{Postcode: 179032}

^{Country: Singapore}

^{UEDA AKIHIRO G5655808Q Managing Director}

^{Appointed on : 01/05/2004}

^{Street : 177B RIVER VALLEY ROAD}

^#10-03

^{LIANG COURT}

^{Town: SINGAPORE}

^{Postcode: 179032}

^{Country: Singapore}

^{NOBUHIRO HONDA G5597166N Director}

^{Appointed on : 01/05/2004}

^{Street : 2 JALAN MUTIARA}

^#11-02

^{MUTIARA CREST}

^{Town: SINGAPORE}

^{Postcode: 249183}

^{Country: Singapore}

^{SASAKI JUNICHI MZ0119809 Director}

^{Appointed on : 01/05/2004}

^{Street : 188-0014 SHIBAKUBO-CHO 3-19-58-503}

^{NISHI TOKYO CITY}

^{Town: TOKYO}

^Postcode:

^{Country: Japan}

^{YUKIHIRO MIYAKE G5872927U Director}

^{Appointed on : 04/05/2006}

^{Street : 2 WALSHE ROAD}

^#08-01

^{CHELSEA GARDENS}

^{Town: SINGAPORE}

^{Postcode: 257662}

^{Country: Singapore}

^{CHANG SOW KUEN S1365694J Company Secretary}

^{Appointed on : 01/01/2006}

^{Street : 130 GEYLANG EAST AVENUE 1}

^#02-299

^{Town: SINGAPORE}

^{Postcode: 380130}

^{Country: Singapore}

FORMER DIRECTOR(S)

^{KOH SWEE TIAN S0204995C}

^{OSAMU TAKAGI MK2295973}

^{SUZUKI KANJI K4583575}

^{KOMATSUZAKI RYUICHI SL9152870}

^{TAKEDA KAZUO SM3287147}

^{KENJI HARASAWA MN8000885}

^{FUSASABURO IMAI SN9110565}

^{YASUO MATSUDA F55997935}

^{HIROO TANGE F2455587U}

^{YASUO OBARA MN5885959}

^{TOSHIMASA YAMANAKA F5634070Q}

^{MITSUO MURATA TE7787362}

^{RYUICHI KOMATSUZAKI F1442277M}

^{SHINICHIRO MAKIDA F5613518U}

^{TETSUSHI ISHIZUKA TE6454990}

ACTIVITY(IES)

^{PLASTICS - RAW MATERIALS - POWDERS, LIQUIDS, RESIN Code:17020}

^{CHEMICALS Code:3970}

^{IMPORTERS And EXPORTERS Code:11760}

^{BASED ON ACRA'S RECORD AS AT 10/11/2007}

^{1. GENERAL WHOLESALE TRADE (INCLUDING GENERAL IMPORTERS & EXPORTERS); WHOLESALE TRADING IN ALL KINDS OF PLASTIC RAW MATERIAL, PLASTIC &}

CHARGES

No Charges On Premises/Property In Our Database

PREMISES/PROPERTY INFORMATIONS

No Premises/Property Information In Our Databases

BANKERS

^{THE BANK OF TOKYO-MITSUBISHI UFJ}

^{SUMITOMO MITSUI BANKING CORPORATION}

ASSOCIATED COMPANY(IES)

^{TOLING CORPORATION (M) SDN BHD}

^Malaysia

^{TPFTZ CIC INDUSTRIAL CO LTD}

^China

SHAREHOLDERS(S)

^{ITOCHU SINGAPORE PTE LTD 825,000 Company}

^{Street : 9 RAFFLES PLACE}

^#41-01

^{REPUBLIC PLAZA}

^{Town: SINGAPORE}

^{Postcode: 048619}

^{Country: Singapore}

^{ITOCHU CORPORATION 1,925,000 Company}

^{Street : 5-1 KITA AOYAMA, 2-CHOME}

^MINATO-KU

^{Town: TOKYO}

^{Postcode: 107-77}

^{Country: Japan}

FORMER SHAREHOLDER(S)

^{ITOCHU CORPORATION 1,650,000}

^{C ITOH & CO LTD [ JAPAN ] 1,650,000}

HOLDING COMPANY

^{ITOCHU CORPORATION UF12522K % : 70.00}

SUBSIDIARY(IES)

No Participation In Our Database

PAYMENT HISTORY AND EXPERIENCES

Trade Morality: AVERAGE

Liquidity : SUFFICIANT

Payments : REGULAR

Trend : LEVEL

Financial Situation: AVERAGE

FINANCIAL ELEMENTS

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

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

^{Date Account Lodged: 17/10/2006}

^{Balance Sheet Date: 31/12/2005 31/12/2004 31/12/2003}

^{Number of weeks: 52 52 52}

^{Consolidation Code: COMPANY COMPANY COMPANY}

^{--- ASSETS}

^{Preliminary Exp - - 294,000}

^{Tangible Fixed Assets: 444,000 567,000 775,000}

^{Investments 2,450,000 2,206,000 1,060,000}

^{Total Fixed Assets: 2,894,000 2,773,000 2,129,000}

^{Inventories: 2,298,000 11,739,000 3,464,000}

^{Receivables: 93,723,000 83,505,000 57,526,000}

^{Cash,Banks, Securitis: 68,000 194,000 114,000}

^{Other current assets: 437,000 103,000 136,000}

^{Total Current Assets: 96,526,000 95,541,000 61,240,000}

^{TOTAL ASSETS: 99,420,000 98,314,000 63,369,000}

^{--- LIABILITIES}

^{Equity capital: 1,473,000 1,473,000 1,473,000}

^{Reserves: -20,000 -60,000 -}

^{Profit & loss Account: 3,322,000 2,738,000 994,000}

^{Total Equity: 4,775,000 4,151,000 2,467,000}

^{L/T deffered taxes: 54,000 65,000 50,000}

^{Total L/T Liabilities: 54,000 65,000 50,000}

^{Trade Creditors: 49,639,000 57,890,000 42,358,000}

^{Advanced payments: 3,788,000 1,264,000 -}

^{Due to Bank: 40,640,000 33,973,000 17,157,000}

^{Provisions: 240,000 463,000 148,000}

^{Other Short term Liab.: 284,000 508,000 1,189,000}

^{Total short term Liab.: 94,591,000 94,098,000 60,852,000}

^{TOTAL LIABILITIES: 94,645,000 94,163,000 60,902,000}

^{PROFIT & LOSS ACCOUNT}

^{Net Sales 601,537,000 507,351,000 320,185,000}

^{Result of ordinary operations - - 1,622,000}

^{NET RESULT BEFORE TAX: 1,836,000 2,731,000 1,356,000}

^{Tax : 252,000 423,000 15,600}

^{Net income/loss year: 1,584,000 2,308,000 1,200,000}

^{Interest Paid: 1,679,000 591,000 315,000}

^{Depreciation: 241,000 300,000 323,000}

^{Dividends: 1,000,000 1,000,000 -}

^{Directors Emoluments: - - 382,000}

^{Wages and Salaries: 2,216,000 1,757,000 1,367,000}

^{Financial Income: 4,000 2,000 2,000}

RATIOS

^{31/12/2005 31/12/2004 31/12/2003}

^{Turnover per employee: 22279148.15 18790777.78 11858703.70}

^{Stock / Turnover(%): 0.00 0.02 0.01}

^{Net Margin(%): 0.26 0.45 0.37}

^{Return on Equity(%): 33.17 55.60 48.64}

^{Return on Assets(%): 1.59 2.35 1.89}

^{Dividends Coverage: 1.58 2.31 2.31}

^{Net Working capital: 1935000.00 1443000.00 388000.00}

^{Quick Ratio: 0.99 0.89 0.95}

^{Current ratio: 1.02 1.02 1.01}

^{Receivables Turnover: 56.09 59.25 64.68}

^{Leverage Ratio: 19.82 22.68 24.69}

^{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}

^{Quick Ratio : (Cash Bank securities+Receivables)/Total Short term liabilities}

^{Current ratio : Total current assets/Total short term liabilities}

^{Inventory Turnover : (360*Inventories)/Net sales}

^{Receivables Turnover : (Receivable*360)/Net sales}

^{Leverage Ratio : Total liabilities/(Total equity-Intangible assets)}

FINANCIAL COMMENTS

^{THE FINANCIAL CONDITION OF THE COMPANY WAS SEEN TO BE FAIR IN VIEW OF THE FOLLOWING:}

^{NET WORTH:}

^{THE BALANCE SHEET WAS CONSIDERED PASSABLE WITH NET WORTH IMPROVED BY 15.03% FROM US$4,151,000 IN FY 2004 TO US$4,775,000 IN FY 2005. THIS WAS DUE TO HIGHER ACCUMULATED PROFIT OF US$3,322,000 (2004: US$2,738,000); A RISE OF 21.33% FROM THE PRIOR FINANCIAL YEAR.}

^LEVERAGE:

^{IN THE SHORT-TERM, SUBJECT WAS LARGELY FINANCED BY TRADE CREDITORS WHICH MADE UP 52.48% (2004: 61.52%) OF THE TOTAL CURRENT LIABILITIES AND AMOUNTED TO US$49,639,000 (2004: US$57,890,000). THE BREAKDOWN IS AS FOLLOWS:}

^{-TRAD PAYABLES AND ACCRUED OPERATING EXPENSES - 2005: US$47,798,000 (2004: US$56,395,000)}

^{-HOLDING COMPANY - 2005: US$698,000 (2004: US$775,000)}

^{-RELATED COMPANY - 2005: US$1,143,000 (2004: US$720,000)}

^{AMOUNT DUE TO BANKS OF US$40,640,000 (2004: US$33,973,000) CONSISTED OF:}

^{-BANK OVERDRAFTS - 2005: US$570,000 (2004: US$4,573,000)}

^{-UNSECURED SHORT-TERM BANK LOANS - 2005: US$40,070,000 (2004: US$29,400,000)}

^{IN ALL, LEVERAGE RATIO FELL FROM 22.68 TIMES TO 19.82 TIMES AS A RESULT OF A GREATER RELATIVE RISE IN TOTAL EQUITY THAN TOTAL LIABILITIES.}

^LIQUIDITY:

^{IN GENERAL, SUBJECT'S LIQUIDITY SITUATION WAS PASSABLE AS SEEN FROM THE CHANGES IN NET WORKING CAPITAL AND LIQUIDITY RATIOS. CURRENT RATIO REMAIN AT 1.02 TIMES AND QUICK RATIO IMPROVED TO 0.99 TIMES FROM 0.89 TIMES IN FY 2004.}

^{NET WORKING CAPITAL IMPROVED BY 34.09% FROM US$1,443,000 IN FY 2004 TO US$1,935,000.}

^{CASH AND CASH EQUIVALENTS COMPRISE OF:}

^{-CASH AT BANK AND IN HAND - 2005: US$68,000 (2004: US$194,000)}

^{PROFITABILITY:}

^{REVENUE POSTED AN INCREASE OF 18.56% FROM US$507,351,000 IN FY 2004 TO US$601,537,000 BUT NET PROFIT DROPPED BY 31.37% TO US$1,584,000 (2004: US$2,308,000). THIS COULD BE DUE TO HIGHER STAFF COSTS OF US$2,216,000 IN FY 2006 (2005: US$1,757,000). HENCE, NET MARGIN FELL TO 0.26% (2004: 0.45%).}

^REVENUE:

^{-SALES - 2005: US$601,383,000 (2004: US$507,179,000)}

^{-COMMISSION INCOME - 2005: US$154,000 (2004: US$172,000)}

^{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:}

^{INTEREST-BEARING LIABILITIES}

^{THE WEIGHTED AVERAGE EFFECTIVE INTEREST RATES PER ANNUM RELATING TO UNSECURED BANK LOANS AT THE BALANCE SHEET DATE FOR THE COMPANY IS 4.8% (2004: 2.92%).}

^{SUBSEQUENT EVENTS}

^{SUBSEQUENT TO BALANCE SHEET DATE, THE DIRECTORS PROPOSED THE PAYMENT OF A DIVIDEND OF US$1,500,000 (2004: US$1,000,000) IN RESPECT OF THE FINANCIAL YEAR UNDER REVIEW. THE DIVIDENDS HAVE NOT BEEN PROVIDED FOR.}

BACKGROUND/OPERATION

^{THE COMPANY WAS INCORPORATED IN THE REPUBLIC OF SINGAPORE ON 28/04/1988 AS A LIMITED PRIVATE COMPANY AND IS TRADING UNDER ITS NAMESTYLE AS "C. ITOH PLASTICS INTERNATIONAL PTE. LTD.”.}

^{SUBSEQUENTLY, ON 03/01/1994, THE COMPANY CHANGED TO ITS PRESENT NAMESTYLE AS "ITOCHU PLASTICS PTE., LTD.".}

^{AS AT 10/11/2007, THE COMPANY HAS ISSUED AND PAID-UP CAPITAL OF 2,750,000 SHARES OF A VALUE OF S$2,750,000.}

^{PRINCIPAL ACTIVITIES:}

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

^{1) GENERAL WHOLESALE TRADE (INCLUDING GENERAL IMPORTERS AND EXPORTERS)}

^{WHOLESALE TRADING IN ALL KINDS OF PLASTIC RAW MATERIAL, PLASTIC & CHEMICAL PRODUCTS}

^{2) WHOLESALE OF CHEMICALS AND CHEMICAL PRODUCTS}

^{DURING THE FINANCIAL YEAR UNDER REVIEW, THE PRINCIPAL ACTIVITIES OF THE COMPANY CONSIST OF WHOLESALE TRADING IN ALL KINDS OF PLASTIC RAW MATERIALS, PLASTIC AND CHEMICAL PRODUCTS.}

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

^{BACKGROUND OF ITOCHU CORPORATION:}

^{THE HISTORY OF ITOCHU CORPORATION DATES BACK TO 1858 WHEN THE COMPANY'S FOUNDER CHUBEI ITOH COMMENCED LINEN TRADING OPERATIONS. SINCE THEN, THE COMPANY HAS EVOLVED AND GROWN OVER ABOUT 150 YEARS INTO A BUSINESS ENGAGED IN THE DOMESTIC TRADING, IMPORT/EXPORT, AND OVERSEAS TRADING OF VARIOUS PRODUCTS SUCH AS TEXTILES, MACHINERY, INFORMATION AND COMMUNICATIONS-RELATED PRODUCTS, METALS, PRODUCTS RELATED TO OIL AND OTHER ENERGY SOURCES, GENERAL MERCHANDISE, CHEMICALS, AND PROVISIONS AND FOOD. MOREOVER, ITOCHU HAS MADE MULTIFACETED INVESTMENTS IN INSURANCE AGENCIES, FINANCE, CONSTRUCTION, REAL ESTATE TRADING, AND WAREHOUSING AS WELL AS OPERATIONS AND BUSINESSES INCIDENTAL OR RELATED TO THOSE FIELDS.}

^{SUBJECT ENGAGES IN THE FOLLOWING ACTIVITIES:}

^{* TRADING AND DISTRIBUTING PLASTIC RAW MATERIALS, ENGINEERING PLASTICS AND RESINS}

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

^{* SINGAPORE PLASTIC INDUSTRY ASSOCIATION}

^{NEWS: ACQUISITION OF RESIN COMPOUND BUSINESS IN EUROPE}

^{-SOURCE: ITOCHU WEBSITE}

^{DATE: 06/08/2007}

^{TO PROMOTE ITOCHU'S RESIN COMPOUND BUSINESS WITH A PARTICULAR FOCUS ON POLYPROPYLENE COMPOUNDS FOR AUTOMOTIVE APPLICATIONS IN THE EUROPEAN MARKET, ITOCHU CORPORATION, TOGETHER WITH SUMITOMO CHEMICAL AND THE TOYO INK GROUP, HAS REACHED AN AGREEMENT WITH ASAHI KASEI CHEMICALS AND PLANESA S.A. FOR THE ACQUISITION OF AK&N, A U.K. COMPANY, WITH COMPOUND BUSINESS LOCATIONS IN THE UNITED KINGDOM AND FRANCE. ITOCHU CORPORATION IS ACTIVELY PURSUING INVESTMENT OPPORTUNITIES AS PART OF THE CORPORATE STRATEGY TO DEVELOP OUR GLOBAL BUSINESS IN THE FIELD OF CHEMICAL PRODUCTS RANGING FROM BASIC CHEMICALS TO PLASTIC PRODUCTS AND PHARMACEUTICALS.}

^{WITH AUTOMAKERS, AND ESPECIALLY JAPANESE AUTOMAKERS, STEPPING UP THEI PRODUCTION CAPACITIES IN EUROPE, GAINING A FOOTHOLD IN EUROPE FOR THE PRODUCTION OF RESIN COMPOUNDS THROUGH THE ACQUISITION OF AK&N WILL ENABLE US TO PROVIDE INNOVATIVE ADDED VALUE IN RESPECT OF THE EUROPEAN MARKET. WE ALSO EXPECT THIS ACQUISITION TO PRODUCE SYNERGY WITH OUR EXISTING BUSINESSES AND SALES NETWORKS THROUGHOUT EUROPE, THEREBY FURTHER ENHANCING OUR SALES AND DISTRIBUTION CAPABILITIES FOR RESIN PRODUCTS.}

^{NO OTHER TRADE INFORMATION IS AVAILABLE AS TELE-INTERVIEW WAS NOT GRANTED BY SUBJECT'S PERSONNEL ON 13/11/2007.}

^{THE IMMEDIATE AND ULTIMATE HOLDING COMPANY DURING THE FINANCIAL YEAR WAS ITOCHU CORPORATION, A COMPANY INCORPORATED IN JAPAN.}

^{NUMBER OF EMPLOYEES (31 DECEMBER):}

^{* COMPANY - 2004: 28 (2003: 27; 2002 : 24)}

^{* GROUP - 2004: - (2003: -)}

^{REGISTERED AND BUSINESS ADDRESS:}

^{9 RAFFLES PLACE}

^#41-01

^{REPUBLIC PLAZA}

^{SINGAPORE 048619}

^{- RENTED PREMISE}

^{- OWNED BY CDL PROPERTIES LTD}

^{- DATE OF CHANGE OF ADDRESS: 18/03/1996}

^WEBSITE:

^{http://www.itochu.co.jp}

^EMAIL:

^{ciplas@itochu.com.sg}

MANAGEMENT

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

^{1) HONDA NOBUHIRO, A JAPANESE}

^{- OTHER DIRECTORSHIP(S) IN OUR DATABASE:}

^{TOLING CORPORATION (M) SDN BHD}

^{2) UEDA AKIHIRO, A JAPANESE}

^{- BASED IN SINGAPORE.}

^{3) YUKIHIRO MIYAKE, A JAPANESE}

^{- BASED IN SINGAPORE.}

^{4) SASAKI JUNICHI, 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.	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