MIRA INFORM REPORT

Report Date :

15.04.2008

IDENTIFICATION DETAILS

Name :	OM MATERIALS (S) PTE LTD
Registered Office :	^80 Marine Parade Road #08-08 ^Parkway Parade Building
Country :	Singapore
Financials (as on) :	31.12.2006
Date of Incorporation :	^13.02.1999
Com. Reg. No.:	^199900815Z
Legal Form :	^Pte Ltd
Line of Business :	^Distributors of Ferroalloys and that of an Investment Holding Company

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

OM MATERIALS (S) PTE LTD

Line Of Business 

^{DISTRIBUTORS OF FERROALLOYS AND THAT OF AN INVESTMENT HOLDING COMPANY.}

Parent Company

^{OM MANUFACTURING (CHINA) LIMITED}

(PERCENTAGE OF SHAREHOLDING: 100.00%)

Financial Elements

FY 2006

COMPANY

Sales : US$114,013,367

Networth : US$ 16,234,710

Paid-Up Capital : US$ 602,047

Net result : US$ 1,919,010

Net Margin(%) : 1.68

Return on Equity(%) : 11.82

Leverage Ratio : 2.03

COMPANY IDENTIFICATION

^{Subject Company : OM MATERIALS (S) PTE LTD}

^{Former Name : -}

^{Business Address : 80 MARINE PARADE ROAD}

^#08-08

^{PARKWAY PARADE BUILDING}

^{Town : SINGAPORE}

^{Postcode : 449269}

^{County :}

^{Country : Singapore}

^{Telephone : 6346 5515}

^{Fax : 6342 2242}

^{ROC Number : 199900815Z}

^{Reg. Town :}

SUMMARY

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

^{Legal Form : Pte Ltd}

^{Date Inc. : 13/02/1999}

^{Previous Legal Form : -}

^{Summary year : 31/12/2006}

^{Sales : 114,013,367}

^{Networth : 16,234,710}

^{Capital : 602,047}

^{Paid-Up Capital : 602,047}

^{Employees : 10}

^{Net result : 1,919,010}

^{Share value : -}

^{Auditor : FOO KON TAN GRANT THORNTON}

^{BASED ON ACRA'S RECORD}

^{NO OF SHARE CURRENCY AMOUNT}

^{ISSUED ORDINARY 1,000,000 SGD 1,000,000.00}

^{PAID-UP ORDINARY - SGD 1,000,000.00}

REFERENCES

^{Litigation : No}

^{Company status : TRADING}

^{Started : 13/02/1999}

PRINCIPAL(S)

^{LOW NGEE TONG S0069868G Director}

DIRECTOR(S)

^{LOW NGEE TONG S0069868G Director}

^{Appointed on : 13/02/1999}

^{Street : 6 MAYFIELD AVENUE}

^{Town : SINGAPORE}

^{Postcode : 438024}

^{Country : Singapore}

^{ANG BEE WAH S0196745B Company Secretary}

^{Appointed on : 30/04/2004}

^{Street : 4B PHILLIPS AVENUE}

^{Town : SINGAPORE}

^{Postcode : 546924}

^{Country : Singapore}

^{WANG YUECHUAN S2624905H Director}

^{Appointed on : 05/04/2001}

^{Street : 200 UPPER THOMSON ROAD}

^#03-06

^{Town : SINGAPORE}

^{Postcode : 574424}

^{Country : Singapore}

^{EDWARD YOUNG WOO HWA S1184107D Director}

^{Appointed on : 01/05/2007}

^{Street : 370 THOMSON ROAD}

^#17-370

^{TAN TONG MENG TOWER}

^{Town : SINGAPORE}

^{Postcode : 298128}

^{Country : Singapore}

^{HENG SIOW KWEE S1548948J Director}

^{Appointed on : 01/05/2007}

^{Street : 6 MAYFIELD AVENUE}

^{Town : SINGAPORE}

^{Postcode : 438024}

^{Country : Singapore}

FORMER DIRECTOR(S)

^{SEETOH KWOK WENG S0059393A}

ACTIVITY(IES)

^{METAL SPECIALTIES Code:13890}

^{IMPORTERS And EXPORTERS Code:11760}

^{BASED ON ACRA'S RECORD}

^{1) WHOLESALE OF METALS AND FABRICATED METALS EXCEPT GENERAL HARDWARE}

^{(EG STEEL PIPES)}

CHARGES

^{Date : 17/12/2004}

^{Comments : CHARGE NO: C200406449}

^{AMOUNT SECURED : 0.00 AND ALL MONIES OWING}

^{CHARGEE(S) : FORTIS BANK NV/SA, HONG KONG BRANCH}

^{Date : 15/10/2004}

^{Comments : CHARGE NO: C200405147}

^{AMOUNT SECURED : 0.00 AND ALL MONIES OWING}

^{CHARGEE(S) : MALAYAN BANKING BHD}

^{Date : 15/08/2003}

^{Comments : CHARGE NO: C200303953 (DISCHARGED)}

^{AMOUNT SECURED : 0.00 AND ALL MONIES OWING}

^{CHARGEE(S) : KBC BANK N.V.}

^{Date : 02/04/2003}

^{Comments : CHARGE NO: C200301457}

^{AMOUNT SECURED : 0.00 AND ALL MONIES OWING}

^{CHARGEE(S) : ABN AMRO BANK N.V.}

^{Date : 10/01/2007}

^{Comments : CHARGE NO: C200700220}

^{AMOUNT SECURED : 0.00 AND ALL MONIES OWING}

^{CHARGEE(S) : COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEEBANK}

^{Comments : CHARGE NO: C200303987 (DISCHARGED - 12/04/2005)}

^{AMOUNT SECURED : 0.00 AND ALL MONIES OWING}

^{CHARGEE(S) : INDUSTRIAL & COMMERCIAL BANK OF CHINA (S'PORE BRANCH)}

^{Comments : CHARGE NO: C200301452 (DISCHARGED - 22/04/2004)}

^{AMOUNT SECURED : 0.00 AND ALL MONIES OWING}

^{CHARGEE(S) : ABN AMRO BANK N.V.}

^{Comments : CHARGE NO: 200205186 (DISCHARGED - 04/09/2003)}

^{AMOUNT SECURED : 0.00 AND ALL MONIES OWING}

^{CHARGEE(S) : FORTIS BANK ASIA HK}

^{Comments : CHARGE NO: C200303711 (DISCHARGED - 05/01/2005)}

^{AMOUNT SECURED : 0.00 AND ALL MONIES OWING}

^{CHARGEE(S) : FORTIS BANK ASIA HK}

PREMISES/PROPERTY INFORMATIONS

^{Date :15/04/2008}

^{Estimated Value :}

^{Tax rate : 10}

^{Site Address : 80 MARINE PARADE ROAD}

^{#08-08 PARKWAY PARADE BUILDING}

^{Town :}

^{County :}

^{Postcode : 4429269}

^{Country : Singapore}

^{Annual Value : 86,000}

* 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

^{KBC BANK NV}

^{ABN AMRO BANK NV}

^{FORTIS BANK S.A./N.V.}

^{COOPERATIEVE CENTRALE RAIFFEISEN- BOERENLEENBANK BA}

SHAREHOLDERS(S)

^{OM MANUFACTURING (CHINA) LIMITED 1,000,000 Company}

^{Street : ROOM 1404, 14/F BONHAM TRADE CENTR}

^{E50 BONHAM STRAND EAST}

^{SHEUNG WAN}

^Town:

^Postcode:

^{Country: Hong Kong}

HOLDING COMPANY

^{OM MANUFACTURING (CHINA) LIMITED UF24051R % : 100}

SUBSIDIARY(IES)

^{OM MATERIALS (TIANJIN) LTD}

^{OM MATERIALS (QINZHOU) CO. LTD}

PAYMENT HISTORY AND EXPERIENCES

^{Trade Morality : AVERAGE}

^{Liquidity : SUFFICIENT}

^{Payments : REGULAR}

^{Trend : DOWNWARD}

^{Financial Situation : AVERAGE}

FINANCIAL ELEMENTS

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

^{Audit Qualification: UNQUALIFIED (CLEAN) UNQUALIFIED (CLEAN) Date Account Lodged: 13/06/2007}

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

^{Number of weeks: 52 52}

^{Consolidation Code: COMPANY COMPANY}

^{--- ASSETS ---}

^{Tangible Fixed Assets: 568,100 585,618}

^{Investments 7,700,000 7,611,887}

^{Total Fixed Assets: 8,268,100 8,197,505}

^{Inventories: 10,116,494 2,324,245}

^{Receivables: 21,077,920 12,768,940}

^{Cash,Banks, Securitis: 6,740,914 5,753,937}

^{Other current assets: 2,976,355 5,023,953}

^{Total Current Assets: 40,911,683 25,871,075}

^{TOTAL ASSETS: 49,179,783 34,068,580}

^{--- LIABILITIES ---}

^{Equity capital: 602,047 602,047}

^{Reserves: -28,080}

^{Profit & lost Account: 15,632,663 13,713,653}

^{Total Equity: 16,234,710 14,287,620}

^{Other long term Liab.: 2,964,529 5,641,422}

^{Total L/T Liabilities: 2,964,529 5,641,422}

^{Trade Creditors: 17,424,280 6,576,558}

^{Prepay. & Def. charges: 9,804 66,457}

^{Due to Bank: 7,996,56 4,568,859 Provisions: 165,908 740,391 Other Short term Liab.: 4,383,991 2,187,273}

^{Total short term Liab.: 29,980,544 14,139,538}

^{TOTAL LIABILITIES: 32,945,073 19,780,960}

^{--- PROFIT & LOSS ACCOUNT ---}

^{Net Sales 114,013,367 129,401,407}

^{Purchases,Sces & Other Goods: 97,753,706 108,922,223 Gross Profit: 16,259,661 20,479,184 NET RESULT BEFORE TAX: 2,081,366 5,113,535 Tax : 162,356 496,407 Net income/loss year: 1,919,010 4,617,128 Interest Paid: 587,549 341,793 Depreciation: 29,466 27,684 Directors Emoluments: 367,004 331,527 Wages and Salaries: 458,933 483,662 Financial Income: 841,802 476,525}

RATIOS

^{31/12/2006 31/12/2005 Turnover per employee: 11401336.70 12940140.70 Net result / Turnover(%): 0.02 0.04 Fin. Charges / Turnover(%): 0.01 0.00 Stock / Turnover(%): 0.09 0.02 Net Margin(%): 1.68 3.57 Return on Equity(%): 11.82 32.32 Return on Assets(%): 3.90 13.55 Net Working capital: 10931139.00 11731537.00 Cash Ratio: 0.22 0.41 Quick Ratio: 0.93 1.31 Current ratio: 1.36 1.83 Receivables Turnover: 66.55 35.52 Leverage Ratio: 2.03 1.38}

^{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}

^{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 13.63% FROM USD14,287,620 IN 2005 TO USD16,234,710 IN 2006.}

^{THIS WAS DUE TO HIGHER RETAINED PROFITS OF USD15,632,663 (2005:}

^{USD13,713,653); A RISE OF 13.99% FROM THE PRIOR FINANCIAL YEAR.}

^LEVERAGE:

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

^{WHICH MADE UP 58.12% (2005: 46.51%) OF THE TOTAL CURRENT LIABILITIES}

^{AND AMOUNTED TO USD17,424,280 (2005: USD6,576,558). BREAKDOWN WAS AS}

^FOLLOWS:

^{* SUBSIDIARY (TRADE) - 2006: USD8,130,576 (2005: NIL)}

^{* FELLOW SUBSIDIARY (TRADE) - 2006: USD1,249,302 (2005: NIL)}

^{* OTHERS (TRADE) - 2006: USD8,044,402 (2005: USD6,576,558)}

^{DUE TO BANKS ROSE BY 75.02% AND AMOUNTED TO USD7,996,561 (2005:}

^{USD4,568,859). BREAKDOWN WAS AS FOLLOWS:}

^{* BILLS PAYABLE - 2006: USD7,540,580 (2005: USD4,568,859)}

^{* BANK LOANS (SECURED) - 2006: USD 455,981 (2005: NIL)}

^{IN ALL, LEVERAGE RATIO ROSE FROM 1.38 TIMES TO 2.03 TIMES INDICATING THAT THE COMPANY'S LIABILITIES WERE MORE SUBSTANTIAL IN RELATION TO ITS TOTAL EQUITY. A LOWER RATIO WOULD BE MORE DESIRABLE AS THE LOWER THE RATIO, THE GREATER THE FINANCIAL SAFETY AND OPERATING FREEDOM FOR THE COMPANY.}

^LIQUIDITY:

^{IN GENERAL, SUBJECT'S LIQUIDITY SITUATION WAS PASSABLE ALTHOUGH NET WORKING CAPITAL FALL BY 6.82% TO USD10,931,139 (2005: USD11,731,537).}

^{BOTH CURRENT AND QUICK RATIOS POSTED LOWER BUT WERE SUFFICIENT AT 1.36 TIMES (2005: 1.83 TIMES) AND 0.93 TIMES (2005: 1.31 TIMES), RESPECTIVELY.}

^{CASH AND CASH EQUIVALENTS ROSE BY 17.15% AND AMOUNTED TO USD6,740,914 (2005: USD5,753,937). BREAKDOWN WAS AS FOLLOWS:}

^{* FIXED & SECURITY DEPOSITS - 2006: USD5,658,746 (2005: USD3,004,591)}

^{* CASH AND BANK BALANCES - 2006: USD1,082,168 (2005: USD2,749,346)}

^{FIXED AND SECURITY DEPOSITS - THE BANKING FACILITY OF THE COMPANY ARE SECURED BY A CHARGED ON THE COMPANY'S FIXED DEPOSITS, LETTERS OF UNDERTAKING, LETTERS OF NEGATIVE PLEDGE AND LETTERS OF HYPOTHECATION AND ARE GUARANTEED BY COMPANIES IN THE GROUP.}

^{PROFITABILITY:}

^{REVENUE POSTED A DECREASE OF 11.89% FROM USD129,401,407 IN 2005 TO USD114,013,367. SIMILARLY, NET PROFIT DROPPED BY 58.44% TO USD1,919,010 (2005: USD4,617,128).}

^{THIS COULD BE DUE TO LOWER GROSS MARGIN OF 14.26% IN 2006 (2004: 15.83%) AND THE INCREASE IN FINANCE COST BY 71.90% TO USD587,549 (2005: USD341,793). HENCE, NET MARGIN FELL TO 1.68% (2005: 3.57%).}

^{DEBT SERVICING:}

^{DEBT SERVICING PROBLEMS MIGHT NOT BE EXPECTED IF REVENUE AND EARNINGS CAN BE IMPROVED AND PAYMENTS BY TRADE DEBTORS ARE FORTHCOMING. IT WAS NOTED THAT AVERAGE COLLECTION PERIOD HAS LENGTHENED TO 67 DAYS (2005: 36 DAYS).}

^{NOTES TO THE FINANCIAL STATEMENTS:}

^{* BANK LOANS AND BORROWINGS - THE WEIGHTED AVERAGE EFFECTIVE INTEREST}

^{RATES OF THE BANK LOANS (SECURED) AS AT BALANCE SHEET DATE IS 5.36%}

^{(2005: NIL).}

BACKGROUND/OPERATION

^{THE COMPANY WAS INCORPORATED IN THE REPUBLIC OF SINGAPORE ON 13/02/1999 AS A LIMITED PRIVATE COMPANY AND IS TRADING UNDER ITS PRESENT NAMESTYLE AS "OM MATERIALS (S) PTE LTD".}

^{THE COMPANY HAS AN ISSUED AND PAID-UP CAPITAL OF 1,000,000 SHARES, OF A VALUE OF S$1,000,000.}

^{PRINCIPAL ACTIVITIES:}

^{SUBJECT IS REGISTERED WITH THE ACCOUNTING AND CORPORATE REGULATORY}

^{AUTHORITY (ACRA) BE PRINCIPALLY ENGAGED IN THE BUSINESS OF:}

^{1) WHOLESALE OF METALS AND FABRICATED METALS EXCEPT GENERAL HARDWARE}

^{(EG STEEL PIPES)}

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

^{THE COMPANY WAS LISTED IN THE SINGAPORE LOCAL DIRECTORIES UNDER THE CLASSIFICATION OF: INVESTMENT MANAGEMENT &/OR COMPANIES}

^{DURING THE FINANCIAL YEAR(S), UNDER REVIEW, THE PRINCIPAL ACTIVITIES OF SUBJECT ARE THOSE OF DISTRIBUTORS OF FERROALLOYS AND THAT OF AN INVESTMENT HOLDING COMPANY.}

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

^ACTIVITIES:

^{* INVESTMENT HOLDINGS}

^{* IMPORTER, PROCESSOR AND TRADER OF SPECIALIZED METAL MATERIALS AND}

^PRODUCTS

^{KEY BUSINESS OPERATIVES:}

^{* THE DEVELOPMENT OF A COMPLETE RAW MATERIALS SUPPLY CHAIN}

^{* PARTICIPATING IN MINE INVESTMENTS WITH STRATEGIC BUSINESS PARTNERS}

^{* RESEARCHING THE DEVELOPMENT OF METAL MATERIALS TO MEET THE EVER}

^{CHANGING DEMANDS OF THE MARKET}

^{* MANAGING THE PROCESSING OF ORES}

^{* SELLING THE ALLOYS TO END USERS}

^{* TRADING ON THIRD PARTY RAW MATERIALS AND MANAGING THE SUPPLY,}

^{PROCESSING AND SALE CHAIN OF THIRD PARTY MINE OPERATORS}

^PRODUCTS:

^{* MANGANESE ORE}

^{* CHROME ORE}

^{* MANGANESE}

^{* CHROME}

^{* STAINLESS STEEL SCRAP}

^{* NON FERROUS METAL}

^{* IRON ORE}

^{* SILICON ALLOY}

^{MARKET PRESENCE:}

^{* CHINA}

^{* SOUTH KOREA}

^{* IRAN}

^{* JAPAN}

^{* TAIWAN}

^{* SOUTH EAST ASIA}

^{* EUROPE}

^{NO OTHER TRADE INFORMATION WAS AVAILABLE AS TELE-INTERVIEW WAS NOT}

^{GRANTED BY SUBJECT'S PERSONNEL}

^{THE COMPANY'S ULTIMATE HOLDING COMPANY IS OM HOLDINGS LIMITED, INCORPORATED IN BERMUDA. THE COMPANY'S IMMEDIATE HOLDING COMPANY IS OM MANUFACTUIRNG CHINA LIMITED, INCORPORATED IN HONG KONG.}

^{NUMBER OF EMPLOYEES (31 DECEMBER)}

^{* 2006: 10}

^{* 2005: 14}

^{* 2004: 14}

^{* 2003: 10}

^{REGISTERED AND BUSINESS ADDRESS:}

^{80 MARINE PARADE ROAD}

^#08-08

^{PARKWAY PARADE BUILDING}

^{SINGAPORE 449269}

^{DATE OF CHANGE OF ADDRESS: 05/04/1999}

^{- OWNED PREMISE}

^{WEBSITE: http://www.omholdingsltd.com (HOLDING COMPANY'S)}

^{EMAIL : om@omresources.com.sg}

MANAGEMENT

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

^{1) LOW NGEE TONG, A SINGAPOREAN}

^{- HOLDS NO OTHER DIRECTORSHIPS AS RECORDED IN OUR DATABASE.}

^{2) EDWARD YOUNG WOO HWA, A SINGAPOREAN}

^{- HOLDS NO OTHER DIRECTORSHIPS AS RECORDED IN OUR DATABASE.}

^{3) HENG SIOW KWEE, A SINGAPOREAN}

^{- HOLDS NO OTHER DIRECTORSHIPS AS RECORDED IN OUR DATABASE.}

^{4) WANG YUECHUAN, A SINGAPOREAN}

^{- HOLDS NO OTHER DIRECTORSHIPS AS RECORDED IN OUR DATABASE.}

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

THE WHOLESALE AND RETAIL TRADE SECTOR GREW BY 6.6% IN 3Q 2007, WEAKER THAN THE 8.4% GROWTH IN 2Q 2007. ALTHOUGH NON-OIL RE-EXPORTS STRENGTHENED IN THE QUARTER, RETAIL SALES RECORDED SLOWER GROWTH.

DOMESTIC WHOLESALE TRADE INDEX

THE OVERALL DOMESTIC WHOLESALE TRADE ROSE BY 4.6% IN 3Q 2007 OVER 3Q 2006.

EXCLUDING PETROLEUM, DOMESTIC SALES GREW BY 7.5%.

THE RISE IN THE OVERALL INDEX WAS MAINLY DUE TO HIGHER SALES OF FOOD, BEVERAGES AND TOBACCO (45.7%), TIMBER, PAINTS AND CONSTRUCTION MATERIALS (23.3%). OTHER WHOLESALE SEGMENTS THAT REPORTED BETTER BUSINESS WERE WHOLESALING OF INDUSTRIAL AND CONSTRUCTION MACHINERY (9.7%) TELECOMMUNICATIONS AND COMPUTERS (8.3%) AND CHEMICALS AND CHEMICAL PRODUCTS (6.8%).

ON THE OTHER HAND, WHOLESALE SEGMENTS THAT REPORTED LOWER SALES WERE ELECTRONIC COMPONENTS (-19.4%), HOUSEHOLD EQUIPMENT AND FURNITURE (-4.4%), SHIP CHANDLERS AND BUNKERING (-3.1%).

AT CONSTANT PRICES, THE OVERALL DOMESTIC WHOLESALE TRADE ROSE BY 4.9% IN 3Q 2007 OVER 3Q 2006. DOMESTIC SALES EXCLUDING PETROLEUM ROSE BY 9.1%.

ON A QUARTER-OVER-QUARTER BASIS, THE OVERALL DOMESTIC WHOLESALE TRADE IN 3Q 2007 ROSE BY 12.2% OVER 2Q 2007. EXCLUDING PETROLEUM, IT GREW BY 8.2%.

THE MAJORTIY OF THE WHOLESALE SECTORS RECORDED HIGHER DOMESTIC SALES IN 3Q 2007 OVER PREVIOUS QUARTER. SHIP CHANDLERS AND BUNKERING EXPANDED BY 27.9%, MAINLY DUE TO HIGHER BUNKER SALES.

THE GENERAL WHOLESALE TRADE SECTOR FELL IN 3Q 2007 AFTER RECORDING STRONG GROWTH IN 2Q 2007.

FOREIGN WHOLESALE TRADE INDEX

THE OVERALL FOREIGN WHOLESALE TRADE FOR 3Q 2007 ROSE BY 4.3%, IN COMPARISON TO 3Q 2006. EXCLUDING PETROLEUM, IT EXPANDED BY 9.0%

MOST OF THE SECTORS REPORTED HIGHER SALES. DOUBLE-DIGIT GROWTH RATES FOR OVERSEAS SALES WERE RECORDED BY FOOD, BEVERAGES AND TOBACCO (51.2%) AND TIMBER, PAINT AND CONSTRUCTION MATERIALS (15.5%). OTHER WHOLESALE SECTORS THAT REGISTERED BETTER BUSINESS IN 3Q 2007 WERE CHEMICALS AND CHEMICAL PRODUCTS (7.6%) AND TELECOMMUNICATIONS AND COMPUTERS (5.0%)

FOREIGN SALES OF SHIP CHANDLERS AND BUNKERING, GENERAL WHOLESALE TRADE, INDUSTRIAL AND CONSTRUCTION MACHINERY AND ELECTRONIC COMPONENTS REGISTERED INCREASES OF 2.6% TO 6.1 %IN 3Q 2007, IN CONTRAST TO THE LOWER SALES IN THE PREVIOUS QUARTER.

AT CONSTANT PRICES, THE OVERALL INDEX ROSE BY 8.0% IN 3Q 2007 OVER 3Q 2006.

EXCLUDING PETROLEUM, FOREIGN WHOLESALE TRADE GREW BY 12.0%.

ON A QUARTER-OVER-QUARTER BASIS, THE OVERALL FOREIGN WHOLESALE TRADE IN 3Q 2007 ROSE BY 4.9% OVER 2Q 2007. EXCLUDING PETROLEUM, IT GREW BY 8.2%.

ALL WHOLESALE SECTORS RECORDED BETTER BUSINESS IN 3Q 2007 WITH THE EXCEPTION OF CHEMICALS AND CHEMICAL PRODUCTS. WHOLESALE TRADE OF FOOD, BEVERAGES AND TOBACCO, AND SHIP CHANDLERS AND BUNKERING BOTH GREW BY 17.1%. WHOLESALE OF ELECTRONIC COMPONENTS ROSE BY 12.5%.

RETAIL TRADE

THE OVERALL RETAIL SALES ROSE BY 1.3%, WEAKER THAN THE 7.9% IN 2Q 2007. MOTOR VEHICLES FELL BY 6.8% COMPARED TO THE 2.4% GROWTH IN 2Q 2007. EXCLUDING MOTOR VEHICLES, RETAIL SALES ROSE BY 5.7%, A DECLINE FROM THE 11.O% IN 2Q 2007.

OUTLOOK

GENERALLY, WHOLESALERS ARE POSITIVE ABOUT THEIR BUSINESS PROSPECTS IN THE COMING MONTHS, WITH A NET WEIGHTED BALANCE OF 24% OF FIRMS EXPRESSING POSITIVE BUSINESS SENTIMENTS. THIS APPLIES PARTICULARLY TO FIRMS IN THE WHOLESALING OF FOOD AND BEVERAGES, WEARING APPAREL AND FOOTWEAR, COSMETICS AND TOILETRIES, AND HOUSEHOLD AND ELECTRICAL APPLIANCES.

AS A RESULT OF YEAR-END FESTIVE SHOPPING, A NET WEIGHTED BALANCE OF 31% OF RETAILERS EXPECTS BUSINESS TO IMPROVE IN THE COMING MONTHS. THE RETAIL SECTORS THAT ARE FORECASTING BETTER BUSINESS INCLUDING DEPARTMENT STORE AND SUPERMARKET OWNERS, WEARING APPAREL AND FOOTWEAR, FURNITURE AND FURNISHINGS, AND JEWELLERY AND WATCHES.

EXTRACTED FROM: MINISTRY OF TRADE AND INDUSTRY

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