MIRA INFORM REPORT

Report Date :

04.09.2007

IDENTIFICATION DETAILS

Name :	SOJITZ ASIA PTE. LTD.
Registered Office :	^77 Robinson Road, #32-00^, Robinson 77,^Singapore^–^068896
Country :	Singapore
Financials (as on) :	31.12.2005
Date of Incorporation :	^15/08/1998
Com. Reg. No.:	^199803975R
Legal Form :	^Pte Ltd
Line of Business :	General Trading and Investment Holding.

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

SOJITZ ASIA PTE. LTD.

Line Of Business 

GENERAL TRADING AND INVESTMENT HOLDING.

Parent Company

SOJITZ CORPORATION

(PERCENTAGE OF SHAREHOLDING: 100%)

Financial Elements

FY 2005

COMPANY

Sales : US$982,855,000

Networth : US$146,200,000

Paid-Up Capital : US$134,957,000

Net result : US$6,073,000

Net Margin(%) : 0.62

Return on Equity(%) : 4.15

Leverage Ratio : 1.71

COMPANY IDENTIFICATION

^{Subject Company : SOJITZ ASIA PTE. LTD.}

^{Former Name : NICHIMEN ASIA OCEANIA PTE. LTD.}

^{Business Address : 77 ROBINSON ROAD}

^#32-00

^{ROBINSON 77}

^{Town : SINGAPORE}

^{Postcode : 068896}

^{County : -}

^{Country : Singapore}

^{Telephone : 6438 2566/64289165}

^{Fax : 6438 2766/64385568}

^{ROC Number : 199803975R}

^{Reg. Town : -}

PREVIOUS IDENTIFICATION

^{NICHIMEN ASIA OCEANIA PTE. LTD. DATE OF CHANGE OF NAME: 01/04/2004}

SUMMARY

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

^{Legal Form : Pte Ltd}

^{Date Inc. : 15/08/1998}

^{Previous Legal Form : -}

^{Summary year : 31/12/2005}

^{Sales : 982,855,000}

^{Networth : 146,200,000}

^{Capital : -}

^{Paid-Up Capital : 134,957,000}

^{Employees : 60}

^{Net result : 6,073,000}

^{Share value :}

^{Auditor : KPMG}

REFERENCES

^{Litigation : No}

^{Company status : TRADING}

^{Started : 15/08/1998}

PRINCIPAL(S)

^{SHIGEKI DANTANI G5867176U Managing Director}

DIRECTOR(S)

^{OSAMU IWAI G5679895T Director}

^{Appointed on : 01/04/2004}

^{Street : 25 LEONIE HILL ROAD}

^#09-06

^GRANGEFORD

^{Town : SINGAPORE}

^{Postcode : 239196}

^{Country : Singapore}

^{NOBUO MURASAKI G5838231R Director}

^{Appointed on : 01/11/2005}

^{Street : 261 RIVER VALLEY ROAD}

^#08-07

^{ASPEN HEIGHTS}

^{Town : SINGAPORE}

^{Postcode : 238307}

^{Country : Singapore}

^{CHANG SOW KUEN S1365694J Company Secretary}

^{Appointed on : 19/12/2005}

^{Street : 130 GEYLANG EAST AVENUE 1}

^#02-299

^{Town : SINGAPORE}

^{Postcode : 380130}

^{Country : Singapore}

^{SHIGEKI DANTANI G5867176U Director}

^{Appointed on : 10/04/2006}

^{Street : 6 DRAYCOTT PARK}

^#10-02

^{DRAYCOTT EIGHT}

^{Town : SINGAPORE}

^{Postcode : 259403}

^{Country : Singapore}

^{SHIGEKI DANTANI G5867176U Managing Director}

^{Appointed on : 10/04/2006}

^{Street : 6 DRAYCOTT PARK}

^#10-02

^{DRAYCOTT EIGHT}

^{Town : SINGAPORE}

^{Postcode : 259403}

^{Country : Singapore}

^{MASAHIKO NISHMURA G5874071W Director}

^{Appointed on : 29/01/2007}

^{Street : 7 CLAYMORE ROAD}

^#10-01

^{Town : SINGAPORE}

^{Postcode : 229538}

^{Country : Singapore}

FORMER DIRECTOR(S)

^{YASUSHI HOSHIKA G5586409N}

^{YOSHIMA UCHIDA F5658056P}

^{NOBUO OYAMA MZ0093925}

^{LIM THIN KONG FRANCIS S1835761E}

^{KANAI YUJI F5659565K}

^{TOSHIAKI KANEKO G5580030N}

^{TOSHIO SUGITA G5634030R}

^{HIROSHI KANEMATSU G5669066U}

^{HIROYUKI OSONE G5747927U}

^{LIM YEN LENG FLORENCE S1349403G}

ACTIVITY(IES)

^{HOLDING COMPANIES Code: 11320}

^{TRADING COMPANIES Code: 22190}

^{BUILDING CONSTRUCTION CONSULTANTS Code: 2890}

^{IMPORTERS And EXPORTERS Code: 11760}

^{BASED ON ACRA'S RECORD AS AT 22/05/2007}

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

^{2) BUILDING CONSTRUCTION; BUILDING CONSTRUCTION (MIXED ACTIVITIES)}

CHARGES

^{Date : 16/01/2001}

^{Comments : CHARGE NO: 200100284, 200100285 (DISCHARGED - 08/12/2003)}

^{AMOUNT SECURED: 0.00 AND ALL MONIES OWING}

^{CHARGEE(S): OVERSEA-CHINESE BANKING CORPORATION LIMITED}

PREMISES/PROPERTY INFORMATIONS

No Premises/Property Information In Our Databases

BANKERS

^{MIZUHO CORPORATE BANK, LTD}

^{THE BANK OF TOKYO-MITSUBISHI UFJ}

ASSOCIATED COMPANY(IES)

^{CAPITAL DISTRIBUTORS (S) PTE LTD}

^{PHESCHEM INDUSTRIAL CORPORATION}

^{NNT CONSULTING CO LTD}

SHAREHOLDERS(S)

^{SOJITZ CORPORATION 134,956,632 Company}

^{Street : 1-20, AKASAKA 6-CHOME}

^MINATO-KU

^{Town : TOKYO}

^{Postcode : 107-8655}

^{Country : Japan}

FORMER SHAREHOLDER(S)

^{NICHIMEN CORPORATION 110,101,105}

HOLDING COMPANY

^{SOJITZ CORPORATION UF42569M % : 100}

SUBSIDIARY(IES)

^{MELHADO PTE LTD}

^{P.T. SOJITZ INDONESIA}

^{SOJITZ PHILIPPINES CORPORATION}

^{NISSHO IWAI INTERNATIONAL (SINGAPORE) LTD}

^{SOJITZ INDIA PTE LTD}

^{SOJITZ (MALAYSIA) SDN BHD}

^{SOJITZ (THAILAND) CO LTD}

PAYMENT HISTORY AND EXPERIENCES

Trade Morality : AVERAGE

^{Liquidity : SUFFICIANT}

^{Payments : REGULAR}

^{Trend : LEVEL}

^{Financial Situation : AVERAGE}

FINANCIAL ELEMENTS

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

^{Date Account Lodged: 28/08/2006}

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

^{Number of weeks: 52 52}

^{Consolidation Code: COMPANY COMPANY}

^{--- ASSETS ---}

^{Preliminary Exp 25,007,000 32,285,000}

^{Tangible Fixed Assets: 113,000 145,000}

^{Investments 46,016,000 53,025,000}

^{Total Fixed Assets: 71,136,000 85,455,000}

^{Inventories: 2,367,000 2,782,000}

^{Receivables: 170,284,000 126,814,000}

^{Short Term Fin. Assets: 2,092,000}

^{Cash,Banks, Securitis: 62,546,000 21,721,000}

^{Other current assets: 89,336,000 156,157,000}

^{Total Current Assets: 324,533,000 309,566,000}

^{TOTAL ASSETS: 395,669,000 395,021,000}

^{--- LIABILITIES ---}

^{Equity capital: 134,957,000 124,043,000}

^{Profit & lost Account: 11,243,000 6,512,000}

^{Total Equity: 146,200,000 130,555,000}

^{Trade Creditors: 154,075,000 55,509,000}

^{Short term liabilities: 6,000}

^{Advanced payments: 541,000 212,000}

^{Due to Bank: 86,357,000 143,528,000}

^{Provisions: 731,000 494,000}

^{Other Short term Liab.: 7,765,000 64,717,000}

^{Total short term Liab.: 249,469,000 264,466,000}

^{TOTAL LIABILITIES: 249,469,000 264,466,000}

PROFIT & LOSS ACCOUNT

^{Net Sales 982,855,000 561,345,000}

^{Result of ordinary operations 10,468,000 13,603,000}

^{NET RESULT BEFORE TAX: 7,469,000 10,511,000}

^{Tax : 1,396,000 730,000}

^{Net income/loss year: 6,073,000 9,781,000}

^{Interest Paid: 2,984,000 3,066,000}

^{Depreciation: 32,000 99,000}

^{Dividends: 1,000,000 5,300,000}

^{Directors Emoluments: 1,543,000}

^{Wages and Salaries: 3,957,000 3,162,000}

^{Financial Income: 792,000 181,000}

RATIOS

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

^{Turnover per employee: 16380916.67 9355750.00}

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

^{Fin. Charges / Turnover(%): 0.00 0.01}

^{Net Margin(%): 0.62 1.74}

^{Return on Equity(%): 4.15 7.49}

^{Return on Assets(%): 1.53 2.48}

^{Dividends Coverage: 6.07 1.85}

^{Net Working capital: 75064000.00 45100000.00}

^{Cash Ratio: 0.25 0.08}

^{Quick Ratio: 0.93 0.56}

^{Current ratio: 1.30 1.17}

^{Receivables Turnover: 62.37 81.33}

^{Leverage Ratio: 1.71 2.03}

^{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}

^{Net Working capital : (Total current assets - Total short term liabilities)}

^{Cash Ratio : Cash Bank securities/Total short term liabilities}

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

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

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

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

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

FINANCIAL COMMENTS

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

^{NET WORTH:}

^{THE BALANCE SHEET WAS PASSABLE WITH TOTAL EQUITY IMPROVING BY 11.98% TOTALLING USD146,200,000 (2004: USD130,555,000). THIS WAS CONTRIBUTED BY HIGHER RETAINED EARNINGS BROUGHT FORWARD OF USD11,243,000 (2004: USD6,512,000).}

^LEVERAGE:

^{OVERALL THE LEVERAGE RATIO HAD IMPROVED, POSTING AT 1.71 TIMES (2004: 2.03 TIMES). THIS INDICATED THAT THE COMPANY'S TOTAL LIABILITIES WERE LESS SUBSTANTIAL IN RELATION TO ITS TOTAL EQUITY.}

^{IN THE SHORT TERM, TRADE CREDITORS SURGED BY 1.78 TIMES AMOUNTING TO USD154,075,000 (2004: USD55,509,000). ON THE OTHER HAND, AMOUNT DUE TO BANKS HAD DECREASED TO USD86,357,000 (2004: USD143,528,000) AND COMPRISED OF:}

^{* BILLS PAYABLES OF USD30,229,000 (2004: USD78,764,000)}

^{* INTEREST-BEARING LOANS FROM FINANCIAL INSTITUTIONS (UNSECURED) OF USD56,128,000 (2004: USD64,764,000)}

^{OTHER SHORT TERM LIABILITIES OF USD7,765,000 (2004: USD64,717,000) COMPRISED OF:}

^{* AMOUNTS DUE TO SUBSIDIARIES (SHORT-TERM LOANS) OF NIL (2004: USD54,572,000)}

^{* OTHER PAYABLES & ACCRUALS OF USD7,497,000 (2004: USD9,428,000)}

^{* INTEREST PAYABLE OF USD268,000 (2004: USD717,000)}

^LIQUIDITY:

^{THE OVERALL LIQUIDITY OF THE COMPANY WAS FAIRLY HEALTHY AND IMPROVING. NET WORKING CAPITAL WAS ROBUST AT USD75,064,000 (2004: USD45,000,000).}

^{ON THE OTHER HAND, THE QUICK RATIO POSTED HIGHER BUT REMAINED LACKING AT 0.93 TIMES (2004: 0.56 TIMES) WHILE THE CURRENT RATIO WAS JUST SUFFICIENT AT 1.30 TIMES (2004: 1.17 TIMES).}

^{PROFITABILITY:}

^{REVENUE FOR FY2005 SURGED BY 75.09%, ACCOUNTING FOR USD982,855,000 (2004: USD561,345,000). HOWEVER, NET INCOME DECLINED BY 37.91%, TOTALLING USD6,073,000 (2004: USD9,781,000). THIS MIGHT BE ATTRIBUTABLE TO A NOTABLE INCREASE IN COST OF PURCHASES OF USD967,048,000 (2004: USD537,107,000).}

^{AS A RESULT, NET MARGIN STOOD LOWER AT 0.62% (2004: 1.74%).}

^{DEBT SERVICING:}

^{DEBT SERVICING MIGHT NOT BE ANTICIPATED IN VIEW OF THE STRONG NET WORKING CAPITAL AND IF TRADE RECEIVABLES WERE FORTHCOMING.}

^{IN ADDITION, AVERAGE COLLECTION PERIOD HAD SHORTENED AND WAS COMPUTED AT 62 DAYS (2004: 81 DAYS).}

^{NOTES TO THE FINANCIAL STATEMENTS:}

^{SUBSEQUENT EVENTS}

^{ON 31 MARCH 2006, THE COMPANY DECLARED A TAX-EXEMPT INTERIM DIVIDEND OF USD9,160,000 OUT OF PROFITS FOR YEAR ENDING 31 DECEMBER 2006.}

^{CREDIT RISK}

^{AT BALANCE SHEET DATE, THERE WERE NO SIGNIFICANT CONCENTRATIONS OF CREDIT RISK EXCEPT FOR THE GROUP'S AND THE COMPANY'S TRADE AND LOAN RECEIVABLES TO THE IMMEDIATE HOLDING COMPANY AMOUNTING TO 36% (2004: 50%) AND 56% (2004: 49%) OF TOTAL LOAN AND TRADE RECEIVABLES RESPECTIVELY.}

^{CONTINGENT LIABILITIES:}

^{AT THE BALANCE SHEET DATE, THE GROUP AND THE COMPANY HAD THE FOLLOWING UNSECURED CONTINGENT LIABILITIES:}

^{2005 2004}

^{US$'000 US$'000}

^{GUARANTEE FOR BANKING FACILITIES}

^{GRANTED TO}

^{- A SUBSIDIARY 3,000 3,500}

^{- AN ASSOCIATED COMPANY - 1,300}

^{PERFORMANCE GUARANTEE TO THIRD}

^{PARTIES IN RESPECT OF TENDER}

^{GUARANTEE AND CREDIT FACILITIES 1,734 -}

BACKGROUND/OPERATION

^{THE COMPANY WAS INCORPORATED IN THE REPUBLIC OF SINGAPORE ON 15/08/1998 AS A LIMITED PRIVATE COMPANY AND WAS TRADING UNDER THE FORMER NAMESTYLE AS "NICHIMEN ASIA OCEANIA PTE. LTD.".}

^{SUBSEQUENTLY ON 01/04/2004, SUBJECT CHANGED TO ITS PRESENT NAMESTYLE OF "SOJITZ ASIA PTE. LTD.".}

^{AS AT 22/05/2007, THE COMPANY HAS A ISSUED AND PAID-UP CAPITAL OF 134,956,632 SHARES OF A VALUE OF US$136,507,473.60.}

^{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}

^{2) BUILDING CONSTRUCTION; BUILDING CONSTRUCTION (MIXED ACTIVITIES)}

^{DURING THE FINANCIAL YEAR(S), UNDER REVIEW, SUBJECT'S PRINCIPAL ACTIVITIES ARE THOSE RELATING TO GENERAL TRADING AND INVESTMENT HOLDING.}

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

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

^ACTIVITIES:

^{* SUBJECT ENGAGES IN GENERAL TRADING, IMPORTERS AND EXPORTERS. SUBJECT ALSO ENGAGES IN INVESTMENT HOLDING. NICHIMEN AND NISSHO IWAI IN FEBRUARY 2004 AGREED TO A MERGER, HERALDING THE BIRTH OF SOJITZ CORPORATION ON APRIL 1, 2004.}

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

^{* JAPANESE CHAMBER OF COMMERCE & INDUSTRY}

^{* SINGAPORE INTERNATIONAL CHAMBERS OF COMMERCE}

^{NUMBER OF EMPLOYEES:}

^{* 60 (AS OF 2006)}

^{NO OTHER TRADE INFORMATION IS AVAILABLE AS TELE-INTERVIEW WAS NOT GRANTED BY SUBJECT'S PERSONNEL ON 29/05/2007.}

^{FROM THE PRIOR TELE-INTERVIEW CONDUCTED, IT WAS REVEALED SUBJECT IS IN THE TRADING OF COMMODITIES LIKE RAW MATERIALS. NO OTHER TRADE INFORMATION WAS MADE AVAILABLE VIA THE TELE-INTERVIEW.}

^{NUMBER OF EMPLOYEES (31 DECEMBER):}

^{* COMPANY - 2005: NOT AVAILABLE (2004: 56; 2003: 27; 2002: 29; 2001: 31; 2000: 36)}

^{* GROUP - 2005: NOT AVAILABLE (2004: 191; 2003: 189; 2002: 196; 2001: 220; 2000: 244)}

^{INFORMATION ON HOLDING COMPANY - SOJITZ CORPORATION:}

^BACKGROUND:

^{SOJITZ CORPORATION IS A JAPAN-BASED HOLDING COMPANY. IT HAS SIX CORE BUSINESS SEGMENTS. THE MACHINERY AND SPACE AERONAUTICS SEGMENT'S MAIN PRODUCTS INCLUDE AUTOMOBILES AND AUTOMOBILE PARTS, CONSTRUCTION AND INDUSTRIAL MACHINERY, BEARINGS, POWER-GENERATING EQUIPMENT, MARINE VESSELS AND AIRPLANES. THE ENERGY AND METAL RESOURCES SEGMENT'S MAJOR PRODUCTS COMPRISE PETROLEUM PRODUCTS, ALUMINUM, COAL, IRON, ZINC, BRONZE AND TIN. THE CHEMICALS SEGMENT'S CHIEF PRODUCTS ENCOMPASS ORGANIC AND INORGANIC CHEMICALS, FINE CHEMICALS, CHEMICAL FERTILIZERS COSMETICS, INDUSTRIAL SALT AND PLASTIC MOLDING MACHINES. THE CONSTRUCTION AND TIMBER SEGMENT'S MAJOR SERVICES INCLUDE THE LEASING, SALE AND MANAGEMENT OF REAL ESTATE PROPERTIES. THE LIFESTYLE SEGMENT'S PRINCIPAL PRODUCTS COVER TEXTILES, MARINE PRODUCTS, FOODSTUFFS AND BEDDING PRODUCTS. THE OVERSEAS CORPORATION SEGMENT HAS OPERATING LOCATIONS WORLDWIDE THAT DEAL WITH VARIOUS PRODUCTS AND SERVICES. THE COMPANY HAS 397 SUBSIDIARIES AND 200 ASSOCIATES.}

^{NEWS: 31 OCTOBER 2006 (EXTRACTS)}

^{JAPAN'S SOJITZ TO JOIN BROWN COAL POWER PLANT PROJECT IN INDONESIA}

^{TOKYO (ANTARA NEWS) - TRADING HOUSE SOJITZ HOLDINGS CORP WILL PARTICIPATE IN AN INDONESIAN PROJECT TO CONSTRUCT A LARGE POWER PLANT THAT USES LOW-GRADE COAL, THE NIHON KEIZAI SHIMBUN REPORTED.}

^{THE NEWSPAPER, WITHOUT IDENTIFYING ANY SOURCES, SAID SOJITZ WOULD CONTRIBUTE 25 PCT OF THE ESTIMATED TOTAL INVESTMENT OF 1.5 USD.}

^{AN ALLIANCE OF SOJITZ, AES CORP OF THE US AND AN INDONESIAN ENERGY FIRM WILL INK TODAY A DEAL TO SUPPLY POWER FROM THE PLANT TO INDONESIA'S STATE-RUN PT PERUSAHAAN LISTRIK NEGARA (PLN).}

^{THE PLAN IS FOR A 1,200-MEGAWATT POWER PLANT TO BE BUILT WITHIN 10 KM OF A BROWN COAL RESERVE IN SOUTHERN SUMATRA, THE NIKKEI WAS QUOTES BY XFN-ASIA AS SAYING.}

^{THE PLANT IS DUE TO BE COMPLETED IN 2011.}

^{THE COMPANY'S IMMEDIATE AND ULTIMATE HOLDING COMPANY IS SOJITZ CORPORATION, INCORPORATED IN JAPAN.}

^{REGISTERED AND BUSINESS ADDRESS:}

^{77 ROBINSON ROAD}

^#32-00

^{SIA BUILDING}

^{SINGAPORE 068896}

^{DATE OF CHANGE OF ADDRESS: 01/05/2007}

^{WEBSITE: www.sojitz.com}

^{EMAIL: nichimen@se.asia.nichimen.co.jp}

MANAGEMENT

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

^{1) OSAMU IWAI, A JAPANESE}

^{- BASED IN SINGAPORE.}

^{2) NOBUO MURASAKI, A JAPANESE}

^{- BASED IN SINGAPORE.}

^{3) SHIGEKI DANTANI, A JAPANESE}

^{- BASED IN SINGAPORE.}

^{4) MASAHIKO NISHMURA, A JAPANESE}

^{- 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.

WHOLESALE AND RETAIL TRADE SECTOR

PAST PERFORMANCE

DOMESTIC WHOLESALE TRADE INDEX

DOMESTIC WHOLESALE TRADE IN 4Q 2006 HAS DECLINED BY 6.9%. EXCLUDING PETROLEUM, DOMESTIC SALES REMAINED AT SIMILAR LEVEL COMPARED TO THE PREVIOUS QUARTER.

GENERAL WHOLESALE TRADE POSTED THE LARGEST SALES DECREASE OF 16.6%, FOLLOWED BY THE SECTORS OF PETROLEUM AND PETROLEUM PRODUCTS OF 15.7% AND HOUSEHOLD EQUIPMENT AND FURNITURE OF 13.2%.

SECTORS OF INDUSTRIAL AND CONSTRUCTION MACHINERY AND ELECTRONIC COMPONENTS REGISTERED GROWTHS OF 17.0% AND 12.3%, RESPECTIVELY.

FOREIGN WHOLESALE TRADE INDEX

ON A QUARTER-TO-QUARTER BASIS, OVERALL FOREIGN WHOLESALE TRADE CONTRACTED BY 7.9% IN 4Q 2006 AFTER TWO QUARTERS OF POSITIVE GROWTH. FOREIGN SALES WENT DOWN BY 1.6%, EXCLUDING PETROLEUM.

THE SECTORS OF PETROLEUM AND PETROLEUM PRODUCTS AND ELECTRONIC COMPONENTS MARKED LOWER OVERSEAS SALE OF 14.2% AND 11.6% RESPECTIVELY IN 4Q 2006 OVER 3Q 2006.

RETAIL TRADE

IN GENERAL, RETAIL SALES GREW BY 7.9% IN 4Q 2006, UP FROM THE 5.2% IN THE PREVIOUS QUARTER. THIS BROUGHT FULL YEAR GROWTH FOR 2006 TO 6.9%, DOWN FROM 9.0% IN 2005. EXCLUDING MOTOR VEHICLE SALES, RETAIL SALES ROSE 4.1%, SLOWING FROM THE 7.2% GAIN IN THE PREVIOUS YEAR.

MOST RETAIL SECTORS REPORTED BRISK BUSINESS IN DEC. 2006. SALES OF RECREATIONAL GOODS, DEPARTMENT STORES, WEARING APPAREL AND FOOTWEAR, FURNITURE AND HOUSEHOLD EQUIPMENT, WATCHES AND JEWELLERY CLIMBED BY 36.6% TO 44.2% IN DEC. 2006 COMPARED TO THE PREVIOUS MONTH.

LIKEWISE, RETAILERS OF OPTICAL GOODS AND BOOKS, TELECOMMUNICATIONS APPARATUS AND COMPUTERS, FOOD AND BEVERAGES, MEDICAL GOODS AND TOILETRIES AND SUPERMARKETS ENJOYED GROWTH BETWEEN 12.7% TO 26.0%.

OUTLOOK

FOR WHOLESALE TRADE, A NET WEIGHTED BALANCE OF 11% OF FIRMS ANTICIPATES BUSINESS TO BE LESS BRISK FOR COMING MONTHS. THOSE DEALING IN JEWELLERY AND WATCHES, INDUSTRIAL MACHINERY AND EQUIPMENT, TELECOMMUNICATIONS EQUIPMENT AND ELECTRONIC COMPONENTS ARE AMONG THOSE WHO FORESEE SLOWER BUSINESS IN THE COMING MONTHS.

FOR RETAILERS, A NET WEIGHTED BALANCE OF 8%, FORECAST THE BUSINESS CONDITIONS TO IMPROVE IN THE NEXT SIX MONTHS. DEPARTMENT STORES OWNERS AND RETAILERS OF FURNITURE AND FURNISHINGS ARE OPTIMISTIC ABOUT THE BUSINESS PROSPECTS.

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%)

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