MIRA INFORM REPORT

Report Date :

08.10.2007

IDENTIFICATION DETAILS

Name :	SUN ACE KAKOH (PTE.) LTD.
Registered Office :	^34 Tanjong Penjuru, Singapore – 609030
Country :	Singapore
Financials (as on) :	31.12.2006
Date of Incorporation :	^15/01/1980
Com. Reg. No.:	^198000159N
Legal Form :	^Pte Ltd
Line of Business :	Manufacture PVC Stabilisers and Metallic Soaps.

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

SUN ACE KAKOH (PTE.) LTD.

Line Of Business 

MANUFACTURE PVC STABILISERS AND METALLIC SOAPS

Parent Company

SHINAGAWA CHEMICAL INDUSTRY CO LTD

(PERCENTAGE OF SHAREHOLDING: 54%)

Financial Elements

FY 2006

CONSOLIDATED

Sales : S$88,099,811

Networth : S$37,802,683

Paid-Up Capital : S$5,000,000

Net result : S$3,890,158

Net Margin(%) : 4.42

Return on Equity(%) : 10.29

Leverage Ratio : 0.39

COMPANY IDENTIFICATION

^{Subject Company : SUN ACE KAKOH (PTE.) LTD.}

^{Former Name : -}

^{Business Address: 34 TANJONG PENJURU}

^{Town: SINGAPORE}

^{Postcode: 609030}

^{County: -}

^{Country: Singapore}

^{Telephone: 6264 0255}

^{Fax: 6265 7038}

^{ROC Number: 198000159N}

^{Reg. Town: -}

SUMMARY

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

^{Legal Form: Pte Ltd}

^{Date Inc.: 15/01/1980}

^{Previous Legal Form: -}

^{Summary year : 31/12/2006}

^{Sales: 88,099,811}

^{Networth : 37,802,683}

^{Capital: -}

^{Paid-Up Capital: 5,000,000}

^{Employees: 100}

^{Net result : 3,890,158}

^{Share value: -}

^{AUDITOR : FOO, KON & TAN GRANT THORNTON}

REFERENCES

^{Litigation: No}

^{Company status : TRADING}

^{Started : 15/01/1980}

PRINCIPAL(S)

^{KAN MUN LEONG EDDIE S0341298I Director}

DIRECTOR(S)

^{NANNI ETTORE 609107A Director}

^{Appointed on : 12/02/1996}

^{Street : 7 VIA BELLINZONA 40100}

^{BOLOGNA ITALY}

^{Town: ITALY}

^Postcode:

^{Country: Italy}

^{RYO SASAKI MN9421171 Managing Director}

^{Appointed on : 01/11/1991}

^{Street : 13-11 MOEGINO AOBA-KU}

^{YOKOHAMA -SHI KANAGAWA-KEN}

^{227-0044 JAPAN}

^Town:

^Postcode:

^{Country: Japan}

^{KOJI YOSHIDA TE4384493 Director}

^{Appointed on : 01/03/2001}

^{Street : 203 GRANDY HASE, HASE,}

^{ATSUGI-SHI, KANAGAWA-KEN}

^243-0036

^Town:

^Postcode:

^{Country: Japan}

^{RYO SASAKI MN9421171 Director}

^{Appointed on : 11/05/1990}

^{Street : 13-11 MOEGINO AOBA-KU}

^{YOKOHAMA -SHI KANAGAWA-KEN}

^{227-0044 JAPAN}

^Town:

^Postcode:

^{Country: Japan}

^{YUTAKA TARUTANI TF5477131 Director}

^{Appointed on : 01/07/2005}

^{Street : 5-32-10 SETAGAYA}

^{Town: TOKYO}

^Postcode:

^{Country: Japan}

^{FOO SOON SOO S1310912E Company Secretary}

^{Appointed on : 21/02/2005}

^{Street : 45 MOUNT SINAI RISE}

^#18-03

^{BEAVERTON COURT}

^{Town: SINGAPORE}

^{Postcode: 276958}

^{Country: Singapore}

^{KAN MUN LEONG EDDIE S0341298I Director}

^{Appointed on : 02/12/2005}

^{Street : 24 JALAN ARNAP}

^{KIM LIN PARK}

^{Town: SINGAPORE}

^{Postcode: 249330}

^{Country: Singapore}

FORMER DIRECTOR(S)

^{YOSHIDA TOSHIO E7502756}

^{NISHIO HIROKI SE9230957}

^{OHKAWAUCHI KENJI E7662699}

^{TOSHITERU YOSHIDA ME0081255}

^{IMAMURA YUKITAKA SE7267947}

^{HARA MINORU S2220256A}

^{KANAYAMA TSUTOMU SE8646934}

^{IRITA YUKINORI E8644573}

^{OKADA SHIGEJI Unknown}

^{HOSAKA SATORU H2897179}

^{BEAL CHARLES MALCOLM B227682}

^{TAN HIOK SENG S0221594B}

^{TODA SHINICHI MP0827205}

^{KWAN HON KAY @ LAWRENCE KWAN S0283956C}

^{TAN LIAN NEO S0298668Z}

^{SHINICHI NAKAYAMA TF0485263}

^{YUTAKA FUJITA TF2069627}

^{GOH CHIU LI S7026207Z}

^{YOSHIHARU HAMADA TF6078440}

ACTIVITY(IES)

^{CHEMICALS Code:3970}

^{BASED ON ACRA'S RECORD AS AT 02/10/2007}

^{1. MANUFACTURING INDUSTRIES NEC}

CHARGES

^{Date: 11/03/1996 Amount: 4,000,000}

^{Comments : CHARGE NO : 9601365}

^{SECURED : 4,000,000.00 AND ALL MONIES OWING (SINGAPORE DOLLAR)}

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

^{Date: 11/03/1996}

^{Comments : CHARGE NO : 9601366}

^{SECURED : 0.00 AND ALL MONIES OWING}

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

^{Date: 04/06/1992 Amount: 4,000,000}

^{Comments : CHARGE NO : 9202217}

^{SECURED : 4,000,000.00 (SINGAPORE DOLLAR)}

^{CHARGEE(S) : MALAYAN BANKING BERHAD}

^{Date: 31/07/1997 Amount: 5,000,000}

^{Comments : CHARGE NO : 199704658}

^{SECURED : 5,000,000.00 AND ALL MONIES OWING (SINGAPORE DOLLAR)}

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

^{Date: 21/12/1995 Amount: 6,416,900}

^{Comments : CHARGE NO : 9507897}

^{SECURED : S$6,416,900.00 AND ALL MONIES OWING}

^{CHARGEE : MALAYAN BANKING BHD}

^{Date: 21/12/1995}

^{Comments : CHARGE NO : 9507897}

^{SECURED : US$327,600.00 AND ALL MONIES OWING}

^{CHARGEE : MALAYAN BANKING BHD}

PREMISES/PROPERTY INFORMATIONS

^{Date: 18/05/2006 Tax rate: 10}

^{Site Address : 34 TANJONG PENJURU}

^{Town: SINGAPORE Postcode: 609030}

^{Country: Singapore}

^{Annual Value: 604,000}

* 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

^{MALAYAN BANKING BERHAD}

^{DBS BANK LTD.}

ASSOCIATED COMPANY(IES)

^{REAGENS DEUTSCHLAND GMBH}

^Germany

^{SUN ACE GULF LIMITED}

^{Saudi Arabia}

^{WEIFANG YI HUA CHEMICAL CO. LTD}

^China

SHAREHOLDERS(S)

^{SHINAGAWA CHEMICAL INDUSTRY CO LTD 2,700,000 Company}

^{Street : 4058 NAKATSU AIKAWA-MACHI}

^{AIKO-GUN,KANAGAWA-KEN}

^243-0303

^{Town: KANAGAWA}

^Postcode:

^{Country: Japan}

^{REAGENS S. P. A. 1,300,000 Company}

^{Street : 40016 SAN GIORGIO DI PIANO}

^{BOLOGNA ITALY,}

^{VIA CODRONICHI, 4}

^{Town: ITALY}

^Postcode:

^{Country: Italy}

^{MITSUBISHI CORPORATION 1,000,000 Company}

^{Street : 3-1, MARUNOUCHI, 2-CHOME}

^CHIYODA-KU

^{Town: TOKYO}

^{Postcode: 100-86}

^{Country: Japan}

FORMER SHAREHOLDER(S)

^{SEKISUI CHEMICAL CO LTD 250,000}

HOLDING COMPANY

^{SHINAGAWA CHEMICAL INDUSTRY CO LTD UF05552Z % : 54.00}

SUBSIDIARY(IES)

^{SUN ACE AUSTRALIA PTY LTD}

Australia

^{SUN ACE KAKOH (MALAYSIA) SDN BHD}

Malaysia

^{SUN ACE SOUTH AFRICA (PTY) LTD}

South Africa

^{SUN ACE INVESTMENT PTE LTD}

Singapore

PAYMENT HISTORY AND EXPERIENCES

Trade Morality: AVERAGE

Liquidity : SUFFICIANT

Payments : REGULAR

Trend : LEVEL

Financial Situation: AVERAGE

LITIGATION(S)

No Litigation In Our Database

FINANCIAL ELEMENTS

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

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

^{Date Account Lodged: 05/07/2007}

^{Balance Sheet Date: 31/12/2006 31/12/2005 31/12/2004}

^{Number of weeks: 52 52 52}

^{Consolidation Code: CONSOLIDATED CONSOLIDATED CONSOLIDATED}

^{--- ASSETS}

^{Preliminary Exp 1,064,935 1,050,801 296,286}

^{Intangible Fixed Assets: 58,080 58,080 58,080}

^{Tangible Fixed Assets: 12,638,767 11,966,944 12,140,852}

^{Investments 3,681,887 2,053,104 1,184,232}

^{Total Fixed Assets: 17,443,669 15,128,929 13,679,450}

^{Inventories: 12,888,291 10,998,153 10,011,315}

^{Receivables: 15,496,608 13,592,886 14,233,471}

^{Cash,Banks, Securitis: 5,988,632 9,846,803 9,882,710}

^{Other current assets: 866,892 1,115,218 2,027,932}

^{Total Current Assets: 35,240,423 35,553,060 36,155,428}

^{TOTAL ASSETS: 52,684,092 50,681,989 49,834,878}

^{--- LIABILITIES}

^{Equity capital: 5,000,000 5,000,000 5,000,000}

^{Reserves: -341,044 73,525 565,377}

^{Profit & loss Account: 32,418,391 8,954,339 25,553,997}

^{Other: 725,336 669,174 525,624}

^{TOTAL EQUITY: 37,802,683 34,697,038 31,644,998}

^{Long Term Loans: 1,007,620 1,182,430 1,613,528}

^{L/T deffered taxes: 449,420 501,314 542,513}

^{Other long term Liab.: 58,667 27,197 477,978}

^{Total L/T Liabilities: 1,515,707 1,710,941 2,634,019}

^{Trade Creditors: 10,920,921 11,680,037 11,429,922}

^{Short term liabilities: 193,496 423,285 257,965}

^{Due to Bank: 1,268,369 1,042,870 2,359,163}

^{Provisions: 236,001 558,650 1,001,105}

^{Other Short term Liab.: 746,915 569,168 507,706}

^{Total short term Liab.: 13,365,702 14,274,010 15,555,861}

^{TOTAL LIABILITIES: 14,881,409 15,984,951 18,189,880}

^{PROFIT & LOSS ACCOUNT}

^{Net Sales 88,099,811 83,689,307 76,820,671}

^{Cost of Goods Sold: 72,343,006 66,113,299 60,453,906}

^{Gross Profit: 15,756,805 17,576,008 16,366,765}

^{NET RESULT BEFORE TAX: 5,155,373 6,376,305 5,594,356}

^{Tax : 1,265,215 1,754,007 1,581,697}

^{Net income/loss year: 3,890,158 4,622,298 4,012,659}

^{Interest Paid: 160,389 213,295 225,049}

^{Depreciation: 2,537,882 2,500,801 2,636,885}

^{Dividends: 250,000 1,075,000 250,000}

^{Directors Emoluments: 600,025 623,844 587,288}

^{Wages and Salaries: 9,059,516 9,125,277 8,870,537}

^{Financial Income: 233,259 247,767 186,491}

RATIOS

^{31/12/2006 31/12/2005 31/12/2004}

^{Turnover per employee: 880998.11 836893.07 768206.71}

^{Net result / Turnover(%): 0.04 0.06 0.05}

^{Stock / Turnover(%): 0.15 0.13 0.13}

^{Net Margin(%): 4.42 5.52 5.22}

^{Return on Equity(%): 10.29 13.32 12.68}

^{Return on Assets(%): 7.38 9.12 8.05}

^{Dividends Coverage: 15.56 4.30 16.05}

^{Net Working capital: 21874721.00 21279050.00 20599567.00}

^{Cash Ratio: 0.45 0.69 0.64}

^{Quick Ratio: 1.61 1.64 1.55}

^{Current ratio: 2.64 2.49 2.32}

^{Receivables Turnover: 63.32 58.47 66.70}

^{Leverage Ratio: 0.39 0.46 0.58}

^{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 8.95% FROM S$34,697,038 IN FY 2005 TO S$37,802,683 IN FY 2006. THIS WAS DUE TO HIGHER ACCUMULATED PROFIT OF S$32,418,391 (2005: S$28,954,339); A RISE OF 11.96% FROM THE PRIOR FINANCIAL YEAR.}

^LEVERAGE:

^{IN THE SHORT-TERM, SUBJECT WAS LARGELY FINANCED BY TRADE CREDITORS WHICH MADE UP 81.71% (2005: 81.83%) OF THE TOTAL CURRENT LIABILITIES AND AMOUNTED TO S$10,920,921 (2005: S$11,680,037). THE BREAKDOWN IS AS FOLLOWS:}

^{-TRADE PAYABLES - 2006: S$10,554,728 (2005: S$11,186,984)}

^{-ASSOCIATE - 2006: S$ 211,898 (2005: S$ 166,901)}

^{-SHAREHOLDERS - 2006: S$ 154,295 (2005: S$ 326,152)}

^{IN THE LONG-TERM, SUBJECT WAS LARGELY FINANCED BY LONG-TERM LOANS WHICH MADE UP 66.48% (2005: 69.11%) OF THE TOTAL CURRENT LIABILITIES AND AMOUNTED TO S$1,007,620 (2005: S$1,182,430).}

^{AMOUNT DUE TO BANKS OF S$1,268,369 (2005: S$1,042,870) CONSISTED OF:}

^{-BANK OVERDRAFT AND TERM LOAN - 2006: S$1,268,369 (2005: S$1,042,870)}

^{IN ALL, LEVERAGE RATIO FELL FROM 0.46 TIMES TO 0.39 TIMES AS A RESULT OF A DECLINE IN TOTAL LIABILITIES AND A RISE IN 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 ROSE TO 2.64 TIMES, UP FROM 2.49 TIMES AND QUICK RATIO FELL TO 1.61 TIMES FROM 1.64 TIMES IN FY 2005.}

^{SIMILARLY, NET WORKING CAPITAL IMPROVED BY 2.79% FROM S$21,279,050 IN FY 2005 TO S$21,874,721.}

^{CASH AND CASH EQUIVALENTS COMPRISE OF:}

^{-CASH AND BANK BALANCES - 2006: S$4,901,132 (2005: S$6,106,803)}

^{-FIXED DEPOSITS - 2006: S$1,087,500 (2005: S$3,740,000)}

^{PROFITABILITY:}

^{REVENUE POSTED AN INCREASE OF 5.27% FROM S$83,689,307 IN FY 2005 TO S$88,099,811 AND NET PROFIT FELL BY 15.84% TO S$3,890,158 (2005: S$4,622,298). HENCE, NET MARGIN FELL TO 4.42% (2005: 5.52%).}

^{DEBT SERVICING:}

^{DEBT SERVICING PROBLEMS MIGHT NOT BE EXPECTED IF REVENUE AND EARNINGS CAN BE MAINTAINED AND PAYMENT BY TRADE DEBTORS ARE FORTHCOMING.}

^{NON-CURRENT ASSETS:}

^{THE FOLLOWING ITEMS ARE CLASSIFIED UNDER PRELIMINARY:}

^{-UNQUOTED EQUITY SHARES - 2006: S$740,658 (2005: S$740,658)}

^{-CLUB MEMBERSHIPS - 2006: S$42,000 (2005: S$42,000)}

^{-DEFERRED TAX ASSETS - 2006: S$282,277 (2005: S$268,143)}

^{NOTES TO THE FINANCIAL STATEMENTS:}

^{BANK BORROWINGS}

^{BANK OVERDRAFRT - 2006: S$238,329 (2005: -)}

^{LOAN 1 - 2005: S$1,347,540 (2005: S$1,523,750)}

^{SHORT-TERM LOANS - 2005: S$ 690,120 (2005: S$ 701,550)}

^{TOTAL - 2005: S$2,275,989 (2005: S$2,225,300)}

^{AMOUNT REPAYABLE}

^{WITHIN ONE YEAR - 2005: S$1,268,369 (2005: S$1,042,870)}

^{AMOUNT REPAYABLE}

^{AFTER ONE YEAR - 2005: S$1,007,620 (2005: S$1,182,430)}

^{THE AMOUNT REPAYABLE WITHIN ONE YEAR IS INCLUDED UNDER CURRENT LIABILITIES WHILST THE AMOUNT REPAYABLE AFTER ONE YEAR IS INCLUDED UNDER NON-CURRENT LIABILITIES.}

^{LOAN 1}

^{THIS COMPRISES BANK COMMERCIAL BILLS WHICH ARE SECURED BY A REGISTERED FIRST MORTGAGE OVER THE FREEHOLD PROPERTY AND A DEBENTURE CHARGE OVER ASSETS OF A SUBSIDIARY. THE AMOUNT REPAYABLE IS S$339,020 (A$280,000) YEARLY AND THE CURRENT BANK BILLS WILL EXPIRE ON 30 APRIL 2010.}

^{BANK OVERDRAFT}

^{BANK OVERDRAFT FACILITIES OF S$874,280 (R3,974,000 (2005: S$526,000 (R2,000,000) ARE SECURED BY TRADE RECEIVABLES PLEDGED BY A SUBSIDIARY.}

^{SHORT-TERM LOANS}

^{THE SHORT-TERM LOANS ARE SECURED BY A SECOND LEGAL MORTGAGE OVER THE COMPANY'S FACTORY BUILDING ON LEASEHOLD LAND, FIXED AND FLOATING CHARGES ON THE COMPANY'S ASSETS AND UNDERTAKINGS, AND A CORPORATE GUARANTEE BY THE ULTIMATE HOLDING COMPANY.}

^{THE LOANS ARE REPAYABLE ON 23 AUGUST 2007 AND 24 AUGUST 2007 RESPECTIVELY.}

^{CONTINGENT LIABILITIES (UNSECURED)}

^{(I) A CLAIM HAS BEEN LODGED BY AN EMPLOYEE OF A SUBSIDIARY FOR BREACH OF CONTRACT FOR THE AMOUNT OF S$96,800 (R440,000) FOR PAYMENTS OWING TO HIM IN TERMS OF A RESTRAINT OF TRADE AGREEMENT BETWEEN THE SUBSIDIARY AND THE EMPLOYEE. THE SUBSIDIARY IS DEFENDING THE CLAIM AND THE DIRECTORS OF THE SAID SUBSIDIARY, ACTING ON ADVICE FROM THEIR LEGAL COUNCIL, ARE OF THE POSITION THAT THE CLAIM WILL NOT BE SUCCESSFUL AND ACCORIDNGLY, HAVE NOT MADE A PROVISION FOR A POSSIBLE CLAIM.}

^{(II) A SUBSIDIARY HAS A CONTINGENT LIABILITY IN RESPECT OF SECONDARY TAX OF S$126,961 (R482,742) WHICH WOULD ARISE IN THE EVENT OF DISTRIBUTION OF RETAINED PROFIT.}

^{EVENT AFTER BALANCE SHEET DATE}

^{SUSBEQUENT TO THE BALANCE SHEET DATE, A SUBSIDIARY HAS COMMITTED TO PAY S$1,439,700 (US$937,000) TO REAGENS S.P.A. FOR THE TRANSFER OF ALL REAGENS S.P.A. SHARES IN TWO UNQUOTED COMPANIES IN PEOPLE'S REPUBLIC OF CHINA TO THE SAID SUBSIDIARY.}

BACKGROUND/OPERATION

^{THE COMPANY WAS INCORPORATED IN THE REPUBLIC OF SINGAPORE ON 15/01/1980 AS A LIMITED PRIVATE COMPANY AND IS TRADING UNDER ITS PRESENT NAMESTYLE AS "SUN ACE KAKOH (PTE.) LTD.".}

^{AS AT 02/10/2007, THE COMPANY HAS ISSUED AND PAID-UP CAPITAL OF 5,000,000 SHARES OF A VALUE OF S$5,000,000.}

^{PRINCIPAL ACTIVITIES:}

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

^{1. MANUFACTURING INDUSTRIES NEC}

^{DURING THE FINANCIAL YEAR UNDER REVIEW, THE PRINCIPAL ACTIVITIES OF THE COMPANY CONSIST OF MANUFACTURE PVC STABILISERS AND METALLIC SOAPS.}

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

^BACKGROUND:

^{SUN ACE SINGAPORE WAS ESTABLISHED IN 1980 AS A SUBSIDIARY COMPANY OF SHINAGAWA CHEMICAL INDUSTRY CO. LTD, JAPAN.}

^{SUN ACE SINGAPORE STARTED AS A SMALL MANUFACTURING COMPANY AND IT HAS SINCE GROWN TO BECOME ONE OF THE LEADING PRODUCERS OF STABILISERS AND METALLIC STEARATES IN THE WORLD. IN 1996, SUN ACE FORMED A STRATEGIC PARTNERSHIP WITH REAGENS S.P.A. ITALY TO FURTHER EXPAND ITS PRODUCT RANGE.}

^{SUN ACE ALSO FORMED PARTNERSHIP WITH MITSUBISHI CORPORATION JAPAN IN 1998. WITH MITSUBISHI CORPORATION'S GLOBAL NETWORK OF TRADE AND DISTRIBUTION, THEY ARE ABLE TO SERVE OUR CUSTOMERS BETTER AROUND THE WORLD.}

^{SUBJECT ENGAGES IN THE FOLLOWING ACTIVITIES:}

^{* MANUFACTURING OF PVC STABILIZER,CALCIUM STEARATE,ZINC STEARATE, MAGNESIUM STEARATE AND SPECIALITY ADDITIVES}

^{PRODUCT DEALINGS:}

^{VINYL ADDITIVES}

^{* HEAVY METAL FREE STABILISERS}

^{* MIXED METALS STABILISERS}

^{* TINY STABILISERS}

^{* LEAD STABILISERS}

^{* METAL SOAPS}

^{NON VINYL ADDITIVES}

^{* METAL SOAPS}

^{* ONE PACK SYSTEMS}

^{* THIOESTERS}

^{SPECIALTY CHEMICALS}

^{* METAL SOAPS}

^{* ANTI-TACKIFIERS}

^{* CATTLE FEED ADDITIVES}

^{THE GROUP HAS SEVEN MANUFACTURING OPERATIONS IN:}

^{* SINGAPORE}

^{* AUSTRALIA}

^{* MALAYSIA}

^{* SAUDI ARABIA}

^{* SOUTH AFRICA}

^{* INDIA}

^{TWO BRANCH OFFICES IN}

^{* CHINA}

^{* INDIA}

^{QUALITY ASSESSMENT:}

^{* SGS ISO 9001}

^{* SGS ISO 14001}

^{* SGS ISO 18001}

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

^{* SINGAPORE CONFEDERATION OF INDUSTRIES}

^{* JAPANESE CHAMBER OF COMMERCE AND INDUSTRY}

^{* SINGAPORE NATIONAL EMPLOYEES FEDERATION}

^{FROM THE TELE-INTERVIEW CONDUCTED ON 08/10/2007, THE FOLLOWING WAS GATHERED:}

^{NUMBER OF EMPLOYEES:}

^{* 2007: 100+}

^{NO OTHER TRADE INFORMATION IS AVAILABLE ON 08/10/2007.}

^{THE ULTIMATE HOLDING COMPANY IS SHINAGAWA CHEMICAL INDUSTRY CO. LTD, WHICH IS INCORPORATED IN JAPAN.}

^{NUMBER OF EMPLOYEES (31 DECEMBER):}

^{* COMPANY - 2006: NOT AVAILABLE (2005: NOT AVAILABLE; 2004: 106; 2003: 105)}

^{REGISTERED AND BUSINESS ADDRESS:}

^{34 TANJONG PENJURU}

^{SINGAPORE 609030}

^{- OWNED PREMISE}

^{- DATE OF CHANGE OF ADDRESS: -}

^{OVERSEAS OFFICES AND PARTNERS:}

^{SUN ACE (2 PARTNERS):}

^{REAGENS DEUTSCHLAND GMBH}

^{AM WEDENBERG 1}

^{27612 LOXSTEDT, GERMANY}

^{TEL: (49) 4744 928 173}

^{FAX: (49) 4744 928 190}

^{EMAIL: loxstedt@reagens.net}

^{REAGENS S.P.A}

^{40016 S. GIORGIO DI PIANO (BOLOGNA)}

^{VIA CODRONCHI 4, ITALY}

^{TEL: (39) 051 663 9111}

^{FAX: (39) 051 897 561}

^{EMAIL: reagens@reagens.it}

^{SUN ACE GULF LTD}

^{P.O. BOX 11121}

^{JUBAIL INDUSTRIAL CITY 31961}

^{KINGDOM OF SAUDI ARABIA}

^{TEL: (966) 3 341 2240}

^{FAX: (966) 3 341 1319}

^{EMAIL: office@sunace.com.sa}

^{SUN ACE SOUTH AFRICA (PTY) LTD}

^{P.O. BOX 1070, KEMPTON PARK 1620}

^{SOUTH AFRICA}

^{55 RIGGER ROAD, SPARTAN,}

^{JOHANNESBURG, SOUTH AFRICA}

^{TEL: (27) 11 394 5379}

^{FAX: (27) 11 394 5367}

^{EMAIL: info@sunace.co.za}

^{WEBSITE: www.sunace.co.za}

^{SUN ACE INDIA}

^{SUN ACE SINGAPORE REPRESENTATIVE OFFICE}

^{DE-66-FF, TAGORE GARDEN}

^{NEW DELHI 110 027, INDIA}

^{TEL: (91) 11 2517 3566}

^{FAX: (91) 11 2511 2630}

^{EMAIL: atul.bhatnagar@sunace.com.sg}

^{SUN ACE KAKOH (MALAYSIA) SDN BHD}

^{LOT PLO 23, JALAN MASHURI 2}

^{4 1/2 MILES, JALAN MERSING, KLUANG INDUSTRIAL ESTATE}

^{86000 KLUANG, JOHOR DARUL TAKZIM, MALAYSIA}

^{TEL: (60) 7 787 9660}

^{FAX: (60) 7 787 9644}

^{EMAIL: sunace.malaysia@sunace.com.sg}

^{SUN ACE CHINA}

^{SUN ACE SINGAPORE REPRESENTATIVE OFFICE}

^{ROOM 21A06, YITIANXIA BUILDING,}

^{360 HENGTONG ROAD}

^{SHANGHAI 200070, CHINA}

^{TEL: (86) 21 6380 8382}

^{FAX: (86) 21 6380 8389}

^{EMAIL: sac.office@sunace.com.sg}

^{SHINAGAWA CHEMICAL INDUSTRY CO. LTD}

^{HEAD OFFICE}

^{4058 NAKATSU, AIKAWA TOWN}

^{AIKOH DISTRICT, KANAGAWA PREFECTURE, JAPAN 243-0303}

^{TEL: (81) 462 850 826}

^{FAX: (81) 462 851 703}

^{WEBSITE: www.shinagawa-chem.co.jp}

^{TOKYO SALES OFFICE}

^{4TH FLOOR, KYODO BUILDING}

^{2-13-9 UCHIKANDA, CHIYODA-KU}

^{TOKYO 101-0047, JAPAN}

^{TEL: (81) 3 3254 2061}

^{FAX: (81) 3 3254 2064}

^{EMAIL: sct@shinagawa-chem.co.jp}

^{SUN ACE PARTNER}

^{MITSUBISHI CORPORATION}

^{3 -1 MARUNOUCHI, 2-CHOME}

^{CHIYODA-KU, TOKYO 100-8086, JAPAN}

^{TEL: (81) 3 3210 5232}

^{FAX: (81) 3 3210 5364}

^{SUN ACE AUSTRALIA PTY LTD}

^{32 - 38 REMINGTON DRIVE, DANDENONG SOUTH}

^{VICTORIA 3175, AUSTRALIA}

^{TEL: (61) 3 9702 9444}

^{FAX: (61) 3 9702 9455}

^{EMAIL: sunace@sunace.com.au}

^{WEBSITE: http://www.sunace.com.au}

^WEBSITE:

^{http://www.sunace.com.sg}

^EMAIL:

^{saksg@sunace.com.sg}

MANAGEMENT

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

^{1) NANNI ETTORE, AN ITALIAN}

^{- BASED IN ITALY.}

^{2) RYO SASAKI, A JAPANESE}

^{- BASED IN JAPAN.}

^{3) KAN MUN LEONG EDDIE, A SINGAPOREAN}

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

^{4) KOJI YOSHIDA, A JAPANESE}

^{- BASED IN JAPAN.}

^{5) YUTAKA TARUTANI, 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.

Manufacturing sector

PAST PERFORMANCE

THE MANUFACTURING SECTOR GREW BY 18.8% COMPARED TO Q2 OF 2006, RIDING ON STRONG GROWTH FROM THE BIOMEDICAL MANUFACTURING AND TRANSPORT ENGINEERING CLUSTERS. TOTAL MANUFACTURING OUTPUT GREW BY 7.8% COMPARED TO OUTPUT IN THE SAME PERIOD LAST YEAR.

THE CHEMICALS CLUSTER GREW 4.1% IN Q2 COMPARED TO LAST YEAR'S SECOND QUARTER. THE OUTPUT OF PETROLEUM ROSE 21.7% FROM A YEAR AGO WHEN OUTPUT WAS LOW ARISING FROM MAINTENANCE SHUTDOWNS IN SOME REFINERY PLANTS. THE PRODUCTION OF PETROCHEMICALS FELL SLIGHTLY BY 0.6%. THE OUTPUT OF SPECIALTY CHEMICALS SHRANK 9.6% ON ACCOUNT OF LESS OUTPUT OF EPOXY COMPOUNDS, MINERAL OIL ADDITIVES AND CHEMICAL CATALYSTS. THE CLUSTER RECORDED A CUMULATIVE GROWTH OF 1.8% IN THE FIRST FOUR MONTHS OF 2007 COMPARED TO THE SAME PERIOD LAST YEAR.

OUTLOOK

THE MANUFACTURING SECTOR IS CAUTIOUSLY OPTIMISTIC ABOUT BUSINESS CONDITIONS IN THE NEXT SIX MONTHS COMPARED TO THE LAST QUARTER OF 2006. OVERALL, A WEIGHTED 18% OF THE MANUFACTURERS EXPECT AN IMPROVEMENT IN BUSINESS CONDITIONS WHILE A WEIGHTED 11% PREDICT DETERIORATION. THIS RESULTS IN A NET WEIGHTED BALANCE OF 7% OF MANUFACTURERS HAVING AN OPTIMISTIC OUTLOOK, COMPARED TO 22% IN LAST QUARTER’S SURVEY. THE MODERATION IN SENTIMENTS CAN BE ATTRIBUTED MAINLY TO A WEAKER OUTLOOK IN THE ELECTRONICS CLUSTER AND SEASONAL SLOWDOWN DUE TO FESTIVE HOLIDAYS IN THE EARLY PART OF THE YEAR.

THE MANUFACTURING SECTOR IS MORE OPTIMISTIC IN THE NEXT SIX MONTHS ENDING SEPTEMBER 2007, COMPARED TO THE FIRST QUARTER OF THE YEAR. OVERALL, A WEIGHTED 30% OF MANUFACTURERS FORESEE AN IMPROVED OUTLOOK, WHILE 4% PREDICT DETERIORATION. THIS RESULTS IN A NET WEIGHTED BALANCE OF 26% OF MANUFACTURERS EXPECTING BUSINESS CONDITIONS TO IMPROVE, WHICH IS HIGHER THAN THE 7% RECORDED A QUARTER AGO. THE POSITIVE BUSINESS SENTIMENT IS LED BY THE ELECTRONICS CLUSTER.

IN THE CHEMICALS CLUSTER, A NET WEIGHTED 10% OF MANUFACTURERS EXPECT THE BUSINESS ENVIRONMENT IN THE SECTOR TO IMPROVE IN THE NEXT SIX MONTHS ENDING SEPTEMBER 2007. FIRMS IN THE SPECIALTIES AND OTHER CHEMICALS SEGMENTS ARE MORE OPTIMISTIC AS THE TREND OF SALES LEVEL DURING THE APRIL TO SEPTEMBER PERIOD IS EXPECTED TO RISE, FOLLOWING SEASONAL WEAKNESS IN THE FIRST THREE MONTHS OF 2007. OUTPUT IN ALL SEGMENTS OF THE CLUSTER IS PROJECTED TO INCREASE IN THE SECOND QUARTER OF THE YEAR, AS COMPARED TO THE FIRST. THE ONLY EXCEPTION IS IN THE PETROLEUM REFINERY SEGMENT, WHERE SOME MAINTENANCE DOWNTIME IS PLANNED DURING THIS PERIOD.

EXTRACTED FROM: MINISTRY OF TRADE AND INDUSTRY, SINGAPORE

SINGAPORE DEPARTMENT OF STATISTICS

economic development board

CONTACT SINGAPORE

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