MIRA INFORM REPORT

Report Date :

31.07.2008

IDENTIFICATION DETAILS

Name :	SHIBUYA SAKURA INDUSTRIES (S) PTE LTD
Registered Office :	455 Tagore Industrial Avenue, Sindo Industrial Estate, Singapore - 6459 1622
Country :	Singapore
Financials (as on) :	31.03.2007
Date of Incorporation :	^03.10.1997
Com. Reg. No.:	^199706908E
Legal Form :	^Exempt Pte Ltd
Line of Business :	^Importers, Exporters and Wholesalers of Scrap, Buying and Selling of Vessels, Commission Agent and General Wholesale Trade Including General Importers and Exporters.

RATING & COMMENTS

MIRA’s Rating :

Aa

RATING		STATUS	PROPOSED CREDIT LINE
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

Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear

Subject Company

SHIBUYA SAKURA INDUSTRIES (S) PTE LTD

Line Of Business 

^{IMPORTERS, EXPORTERS AND WHOLESALERS OF SCRAP, BUYING AND SELLING OF VESSELS, COMMISSION AGENT AND GENERAL WHOLESALE TRADE INCLUDING GENERAL IMPORTERS AND EXPORTERS.}

Parent Company

N/A

Financial Elements

FY 2007

COMPANY

Sales S$24,903,021

Networth S$ 1,179,535

Paid-Up Capital S$ 500,000

Net result S$ 284,360

Net Margin(%) 1.14

Return on Equity(%) 24.11

Leverage Ratio 3.18

COMPANY IDENTIFICATION

^{Subject Company : SHIBUYA SAKURA INDUSTRIES (S) PTE LTD}

^{Former Name :}

^{Business Address: 455 TAGORE INDUSTRIAL AVENUE}

^{SINDO INDUSTRIAL ESTATE}

^{Town : SINGAPORE}

^{Postcode: 787825}

^{County :}

^{Country : Singapore}

^{Telephone : 6459 1622}

^{Fax: 6456 5550}

^{ROC Number : 199706908E}

^{Reg. Town:}

SUMMARY

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

^{Legal Form : Exempt Pte Ltd}

^{Date Inc. : 03/10/1997}

^{Previous Legal Form : -}

^{Summary year : 31/03/2007}

^{Sales : 24,903,021}

^{Networth : 1,179,535}

^{Capital : -}

^{Paid-Up Capital : 500,000}

^{Employees : 6}

^{Net result : 284,360}

^{Share value : -}

^{Auditor : D. ARUMUGAM & CO}

^{BASED ON ACRA'S RECORD}

^{NO OF SHARE CURRENCY AMOUNT}

^{ISSUED ORDINARY 500,000 SGD 500,000.00}

^{PAID-UP ORDINARY - SGD 500,000.00}

REFERENCES

^{Litigation : No}

^{Company status : TRADING}

^{Started : 03/10/1997}

PRINCIPAL(S)

^{SEATON GARY DONALD F0779553W Director}

DIRECTOR(S)

^{SEATON GARY DONALD F0779553W Director}

^{Appointed on :14/06/2001}

^{Street : 257 ARCADIA ROAD}

^#07-02

^{HILLCREST ARCADIA}

^{Town: SINGAPORE}

^{Postcode: 289851}

^{Country: Singapore}

^{N ANANDARAJA S/O NADARAJAH S1794580G Director}

^{Appointed on :21/09/1999}

^{Street : 12 TELOK BLANGAH CRESCENT}

^#15-109

^{Town: SINGAPORE}

^{Postcode: 090012}

^{Country: Singapore}

^{HARIKRISHNAN S/O MUTHUSAMY S2135685I Company Secretary}

^{Appointed on : 03/10/1997}

^{Street : 101 AH HOOD ROAD}

^#11-02

^{Town: SINGAPORE}

^{Postcode: 320101}

^{Country: Singapore}

^{PARIKH SAUMIL KISHORE KUMAR S7913209H Director}

^{Appointed on : 19/10/2007}

^{Street : 48A LORONG J TELOK KURAU}

^{Town: SINGAPORE}

^{Postcode: 425838}

^{Country: Singapore}

ACTIVITY(IES)

^{IMPORTERS And EXPORTERS Code:11760}

^{SCRAP METALS Code:19045}

^{COMMISSION MERCHANTS Code:4990}

^{BASED ON ACRA'S RECORD}

^{1) WHOLESALE OF TEXTILES}

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

CHARGES

^{Date: 08/05/2007}

^{Comments : CHARGE NO: C200703410}

^{AMOUNT SECURED: 0.00 AND ALL MONIES OWING}

^{CHARGEE(S): SING INVESTMENTS & FINANCE LIMITED}

^{Date: 27/02/2006}

^{Comments : CHARGE NO: C200601297}

^{AMOUNT SECURED: 0.00 AND ALL MONIES OWING}

^{CHARGEE(S): INDIAN BANK}

^{Date: 08/10/2004}

^{Comments : CHARGE NO: C200405012}

^{AMOUNT SECURED: 0.00 AND ALL MONIES OWING}

^{CHARGEE(S): INDIAN BANK}

^{Date: 29/09/2004}

^{Comments : CHARGE NO: C200404843}

^{AMOUNT SECURED: 0.00 AND ALL MONIES OWING}

^{CHARGEE(S): INDIAN BANK}

^{Date: 20/04/2004}

^{Comments : CHARGE NO: C200401985}

^{AMOUNT SECURED: 0.00 AND ALL MONIES OWING}

^{CHARGEE(S): INDIAN BANK}

^{Date: 17/12/2003}

^{Comments : CHARGE NO: C200306100}

^{AMOUNT SECURED: 0.00 AND ALL MONIES OWING}

^{CHARGEE(S): INDIAN BANK}

^{Date: 03/07/2007}

^{Comments : CHARGE NO: C200705090}

^{CHARGEE: INDIAN BANK}

^{AMOUNT SECURED: 0.00 AND ALL MONIES OWNING}

PREMISES/PROPERTY INFORMATIONS

No Premises/Property Information In Our Databases

BANKERS

^{INDIAN BANK}

SHAREHOLDERS(S)

^{SEATON GARY DONALD 1 Private Person}

^{Street : 257 ARCADIA ROAD}

^#07-02

^{HILLCREST ARCADIA}

^{Town: SINGAPORE}

^{Postcode: 289851}

^{Country: Singapore}

^{N ANANDARAJA S/O NADARAJAH 249,999 Private Person}

^{Street : 12 TELOK BLANGAH CRESCENT}

^#15-109

^{Town: SINGAPORE}

^{Postcode: 090012}

^{Country: Singapore}

^{PARIKH SAUMIL KISHORE KUMAR 250,000 Private Person}

^{Street : 48A LORONG J TELOK KURAU}

^{Town: SINGAPORE}

^{Postcode: 425838}

^{Country: Singapore}

FORMER SHAREHOLDER(S)

^{SOMASEGARAN S/O K PONNAMPALAM 90,000}

SUBSIDIARY(IES)

No Participation In Our Database

PAYMENT HISTORY AND EXPERIENCES

^{Trade Morality : AVERAGE}

^{Liquidity : SUFFICIENT}

^{Payments : REGULAR}

^{Trend : UPWARD}

^{Financial Situation : GOOD}

FINANCIAL ELEMENTS

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

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

^{Date Account Lodged: 15/01/2008}

^{Balance Sheet Date: 31/03/2007 31/03/2006}

^{Number of weeks: 52 52}

^{Consolidation Code: COMPANY COMPANY}

^{--- ASSETS ---}

^{Tangible Fixed Assets: 145 1,308}

^{Investments 1,000 2,000}

^{Total Fixed Assets: 1,145 3,308}

^{Receivables: ` 2,316,565 1,676,746}

^{Cash,Banks, Securities: 618,117 587,122}

^{Other current assets: 1,989,212 1,635,758}

^{Total Current Assets: 4,923,894 3,899,626}

^{TOTAL ASSETS: 4,925,039 3,902,934}

^{--- LIABILITIES ---}

^{Equity capital: 500,000 410,000}

^{Reserves: Profit & lost Account: 679,535 395,175}

^{Total Equity: 1,179,535 805,175}

^{Trade Creditors: 1,464,574 1,592,582}

^{Prepay. & Def. charges: 104,327 131,224}

^{Short term}

^{liabilities: Due to Bank: 555,639 18,393}

^{Provisions: 47,324 52,352}

^{Other Short term Liab.: 1,573,640 1,303,208}

^{Total short term Liab.: 3,745,504 3,097,759}

^{TOTAL LIABILITIES: 3,745,504 3,097,759}

PROFIT & LOSS ACCOUNT

^{Net Sales 24,903,021 18,917,516}

^{Purchases,Sces & Other Goods: 23,437,612 17,673,624 Gross Profit: 1,465,409 1,243,892 Result of ordinary operations 1,025,403 601,155 NET RESULT BEFORE TAX: 295,883 188,288 Tax : 11,523 41,280 Net income/loss year: 284,360 147,008 Interest Paid: 729,520 412,867 Depreciation: 2,922 1,427 Directors Emoluments: 24,000 24,000 Wages and Salaries: 200,304 173,070 Financial Income: 26,595 7,874}

RATIOS

^{31/03/2007 31/03/2006 Turnover per employee: 4150503.50 3152919.33 Net result / Turnover(%): 0.01 0.01 Fin. Charges / Turnover(%): 0.03 0.02 Net Margin(%): 1.14 0.78 Return on Equity(%): 24.11 18.26 Return on Assets(%): 5.77 3.77 Net Working capital: 1178390.00 801867.00 Cash Ratio: 0.17 0.19 Quick Ratio: 0.78 0.73 Current ratio: 1.31 1.26 Receivables Turnover: 33.49 31.91 Leverage Ratio: 3.18 3.85}

^{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)/1000}

^{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 BY46.49% TO S$1,179,535 (2006: S$805,175). THIS WAS ATTRIBUTED TO A RISE IN ACCUMULATED PROFITS BY 71.96% TO S$679,535 IN 2007 FROM S$395,175 IN 2006.}

^LEVERAGE:

^{IN THE SHORT-TERM, SUBJECT WAS LARGELY FINANCED BY OTHER SHORT-TERM LIABILITIES WHICH MADE UP 42.01% (2006: 42.07%) OF THE TOTAL CURRENT LIABILITIES AND AMOUNTED TO S$1,573,640 (2006: S$1,303,208).}

^{TRADE CREDITORS FELL BY 8.04% AND AMOUNTED TO S$1,464,574 (2006: S$1,592,582). BREAKDOWN WAS AS FOLLOWS:}

^{* TRADE CREDITORS - 2007: S$205,868 (2006: S$989,869)}

^{* DISCOUNTED BILLS - 2007: S$159,044 (2006: S$ 52,840)}

^{* INVOICE FINANCING - 2007: 372,576 (2006: NIL)}

^{* TRUST RECEIPTS - 2007: S$727,086 (2006: S$549,873)}

^{DUE TO BANKS ROSE BY 29.21 TIMES AND AMOUNTED TO S$555,639 (2006: S$18,393). BREAKDOWN WAS AS FOLLOWS:}

^{* SHORT TERM BANK LOANS (SECURED) - 2007: NIL (2006: S$18,225)}

^{* BANK OVERDRAFT - 2007: S$555,639 (2006: S$168)}

^{OVERALL, THE LEVERAGE RATIO HAD IMPROVED TO 3.18 TIMES (2006: 3.85 TIMES), INDICATING THAT THE COMPANY'S TOTAL LIABILITIES WERE LESS SUBSTANTIAL IN RELATION TO ITS TOTAL EQUITY.}

^LIQUIDITY:

^{IN GENERAL, SUBJECT'S LIQUIDITY SITUATION WAS CONSIDERED PASSABLE AS SEEN FROM NET WORKING CAPITAL AND LIQUIDITY RATIOS. BOTH CURRENT AND}

^{QUICK RATIOS ROSE TO 1.31 TIMES (2006: 1.26 TIMES) AND 0.78 TIMES (2006: 0.73 TIMES) RESPECTIVELY.}

^{NET WORKING CAPITAL INCREASED BY 46.96% FROM S$801,867 IN 2006 TO S$1,178,390 IN 2007.}

^{CASH AND CASH EQUIVALENTS ROSE BY 5.28% FROM S$587,122 IN 2006 TO S$618,117 IN 2007. BREAKDOWN WAS AS FOLLOWS:}

^{* FIXED DEPOSIT - 2007: S$570,423 (2006: S$581,725)}

^{* CASH AND CASH EQUIVALENTS - 2007: S$47,694 (2006: S$5,397)}

^{ALL FIXED DEPOSITS WERE PLEDGED TO A BANK TO SECURE TRADE FACILITIES THE FIXED DEPOSITS ARE DENOMINATED IN UNITED STATES DOLLAR. THE FIXED INTEREST BEARS INTEREST RATES RANGING FROM 4.13% TO 6=5% (2006: 3.625% TO 4.25%) PER ANNUM.}

^{PROFITABILITY:}

^{SUBJECT POSTED AN INCREASE IN REVENUE OF 31.64% WHICH AMOUNTED TO S$24,903,021 (2006: S$18,917,516). SIMILARLY, NET PROFIT ROSE BY 93.43% WHICH AMOUNTED TO S$284,360 (2006: S$147,008). AS A RESULT, NET MARGIN ROSE TO 1.14% (2006: 0.78%).}

^{DEBT SERVICING:}

^{DEBT SERVICING PROBLEMS MIGHT NOT BE ANTICIPATED IN VIEW OF THE SUFFICIENT LIQUIDITY AND IF TRADE RECEIVABLES WERE FORTHCOMING. AVERAGE COLLECTION PERIOD HAD ALSO LENGTHENED TO 33 DAYS (2006: 32 DAYS).}

^{NOTES TO FINANCIAL STATEMENTS:}

^{* SHARE CAPITAL:}

^{THE HOLDERS OF ORDINARY SHARES ARE ENTITLED TO RECEIVE DIVIDENDS AS AND WHEN DECLARED BY THE COMPANY. ALL ORDINARY SHARES CARRY ONE VOTE WITHOUT RESTRICTION. ALL SHARES RANK EQUALLY WITH REGARDS TO THE COMPANY'S RESIDUAL ASSETS. DURING THE FINANCIAL YEAR 90,000 ORDINARY SHARES WERE ISSUED TO AN INDIVIDUAL OTHER THAN THE EXISTING SHAREHOLDERS OR DIRECTORS.}

^{* EVENTS AFTER THE BALANCE SHEET DATE:}

^{THE COMPANY PURCHASED A PROPERTY ON 19 APRIL 2007 AT 101 BEACH ROAD # 02-04 SINGAPORE 189703 FOR S$700,000. THE COMPANY FINANCED THE PURCHASE OF THE PROPERTY BY TAKING A LOAN OF S$560,000 FROM A FINANCIAL INSTITUTION.}

^{EXEMPT PRIVATE COMPANY}

^{WHERE THE SHARES OF A PRIVATE COMPANY ARE NOT OWNED BY ANY CORPORATE BODY AND THERE ARE NO MORE THAN 20 MEMBERS, THE PRIVATE COMPANY IS KNOWN AS AN EXEMPT PRIVATE COMPANY.}

^{AN EXEMPT PRIVATE COMPANY ENJOYS A GREATER AMOUNT OF PRIVACY THAN A PRIVATE COMPANY. IT IS NOT REQUIRED TO FILE ACCOUNTS WITH THE REGISTRAR IF IT CAN PRODUCE A CERTIFICATE SIGNED BY ONE OF ITS DIRECTORS, SECRETARY AND AUDITOR CONFIRMING THE FOLLOWING POINTS:}

^{1. THE COMPANY IS AN EXEMPT PRIVATE COMPANY.}

^{2. THE AUDITED ACCOUNTS HAVE BEEN TABLED BEFORE THE SHAREHOLDERS AT THE ANNUAL GENERAL MEETING.}

^{3. THE COMPANY IS ABLE TO MEET ITS LIABILITIES.}

^{THERE IS THEREFORE NO DISCLOSURE TO THE PUBLIC OF THE ACCOUNTS OF THE COMPANY ALTHOUGH THE ACCOUNTS STILL HAVE TO BE AUDITED EVERY YEAR AND APPROVED AT AN ANNUAL GENERAL MEETING OF THE COMPANY.}

^{A PRIVATE COMPANY THAT IS WHOLLY OWNED BY THE GOVERNMENT MAY BECOME AN EXEMPT PRIVATE COMPANY IF THE MINISTER FOR FINANCE, IN THE NATIONAL INTEREST, DECLARES IT TO BE SUCH BY A GAZETTE NOTIFICATION.}

^{EXEMPT FROM AUDIT}

^{AN EXEMPT PRIVATE COMPANY IS EXEMPT FROM AUDIT REQUIREMENTS IF THE STARTING DATE OF ITS FINANCIAL YEAR IS BETWEEN 15 MAY 2003 AND 31 MAY 2004 AND ITS TURNOVER FOR THAT FINANCIAL YEAR DOES NOT EXCEED $2.5 MILLION. FOR FINANCIAL YEARS STARTING 1 JUNE 2004, THE AMOUNT OF THE TURNOVER HAS BEEN RAISED TO $5 MILLION. THESE COMPANIES ARE STILL REQUIRED TO MAINTAIN PROPER ACCOUNTING.}

BACKGROUND/OPERATION

^{THE COMPANY WAS INCORPORATED IN THE REPUBLIC OF SINGAPORE ON 03/10/1997 AS A LIMITED EXEMPT PRIVATE COMPANY AND IS TRADING UNDER ITS PRESENT NAMESTYLE AS "SHIBUYA SAKURA INDUSTRIES (S) PTE LTD".}

^{SUBJECT HAS AN ISSUED AND PAID-UP CAPITAL OF 500,000 SHARES OF A VALUE OF S$500,000.}

^{PRINCIPAL ACTIVITIES:}

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

^{1) WHOLESALE OF TEXTILES}

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

^{DURING THE FINANCIAL YEAR(S), UNDER REVIEW, SUBJECT'S PRINCIPAL ACTIVITIES ARE THAT OF IMPORTERS, EXPORTERS AND WHOLESALERS OF SCRAP, BUYING AND SELLING OF VESSELS, COMMISSION AGENT AND GENERAL WHOLESALE TRADE INCLUDING GENERAL IMPORTERS AND EXPORTERS.}

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

^{SUBJECT IS LISTED IN THE SINGAPORE LOCAL DIRECTORY UNDER THE CLASSIFICATION OF: TEXTILE MERCHANTS.}

^ACTIVITIES:

^{* IMPORTERS OF METAL SCRAP AND WASTE PAPERS}

^{FROM THE TELE-INTERVIEW CONDUCTED, SUBJECT CONFIRMED ITS BUSINESS ADDRESS, CONTACT NUMBERS AND LINE OF BUSINESS. FURTHER ENQURIES WERE REJECTED. NO OTHER TRADE INFORMATION WAS AVAILABLE ON 31/07/2008.}

^{NUMBER OF EMPLOYEES (31 MARCH):}

^{* COMPANY - 2007: 6 (2006: 4; 2005: 4)}

^{REGISTERED AND BUSINESS ADDRESS:}

^{455 TAGORE INDUSTRIAL AVENUE}

^{SINDO INDUSTRIAL ESTATE}

^{SINGAPORE 787825}

^{DATE OF CHANGE OF ADDRESS: 01/04/2005}

^{- RENTED PREMISE}

^{- PREMISE OWNED BY: TRUSHA REALTY PTE LTD}

^WEBSITE:

^-

^{EMAIL :}

^-

MANAGEMENT

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

^{1) SEATON GARY DONALD, AN AUSTRALIAN}

^{- BASED IN SINGAPORE}

^{2) N ANANDARAJA S/O NADARAJAH, A SINGAPOREAN}

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

^{3) PARIKH SAUMIL KISHORE KUMAR, A SINGAPOREAN}

^{- HOLDS NO OTHER DIRECTORSHIP 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 6.0% IN 4Q 2007, SLOWER THAN THE 6.8% GROWTH IN 3Q 2007. RETAIL SALES FELL BY 2.5%, FOLLOWING A 1.5% GROWTH IN 3Q 2007.

DOMESTIC WHOLESALE TRADE INDEX

THE OVERALL DOMESTIC WHOLESALE TRADE ROSE BY 22.2% IN 4Q 2007 OVER 4Q 2006. EXCLUDING PETROLEUM, DOMESTIC SALES GREW BY 4.8%.

THE RISE IN THE OVERALL INDEX WAS MAINLY DUE TO HIGHER SALES OF PETROLEUM AND PETROLEUM PRODUCTS (47.3%), TIMBER, PAINTS AND CONSTRUCTION MATERIALS (29.8%). OTHER WHOLESALE SEGMENTS THAT REPORTED DOUBLE-DIGIT GROWTH WERE WHOLESALING OF GENERAL WHOLESALE TRADE, HOUSEHOLD EQUIPMENT AND FURNITURE AND CHEMICALS AND CHEMICAL PRODUCTS.

ON THE OTHER HAND, WHOLESALE SEGMENT THAT REPORTED LOWER SALES WERE ELECTRONIC COMPONENTS (-35.8%).

AT CONSTANT PRICES, THE OVERALL DOMESTIC WHOLESALE TRADE ROSE BY 1.6% IN 4Q 2007 OVER 4Q 2006. EXCLUDING PETROLEUM, DOMESTIC SALES ROSE SLIGHTLY BY 0.2%.

ON A QUARTER-OVER-QUARTER BASIS, THE OVERALL DOMESTIC WHOLESALE TRADE IN 4Q 2007 ROSE BY 7.1% OVER 3Q 2007. EXCLUDING PETROLEUM, DOMESTIC SALES CONTRACTED BY 2.9%.

THE MAJORTIY OF THE WHOLESALE SECTORS RECORDED HIGHER DOMESTIC SALES IN 4Q 2007 OVER PREVIOUS QUARTER. PETROLEUM AND PETROLEUM PRODUCTS EXPANDED BY 20.0%. GENERAL WHOLESALE TRADE AND INDUSTRIAL AND CONSTRUCTION MACHINERY ALSO REGISTERED

DOUBLE-DIGIT GROWTH OVER PREVIOUS QUARTER.

ON THE OTHER HAND, SALES OF FOOD, BEVERAGES AND TOBACCO AND ELECTRONIC COMPONENTS FELL IN 4Q 2007 OVER 3Q 2007.

FOREIGN WHOLESALE TRADE INDEX

THE OVERALL FOREIGN WHOLESALE TRADE FOR 4Q 2007 ROSE BY 27.0%, IN COMPARISON TO 4Q 2006. EXCLUDING PETROLEUM, IT EXPANDED BY 15.3%

MOST OF THE SECTORS REPORTED HIGHER SALES. DOUBLE-DIGIT GROWTH RATES FOR OVERSEAS SALES WERE RECORDED BY FOOD, BEVERAGES AND TOBACCO (40.6%) PETROLEUM AND PETROLEUM PRODUCTS (39.9%) SHIP CHANDLERS AND BUNKERING (24.3%) INDUSTRIAL AND CONSTRUCTION MACHINERY (18.2%) CHEMICALS AND CHEMICAL PRODUCTS (16.4%) ELECTRONIC COMPONENTS (12.1%) TIMBER, PAINT AND CONSTRUCTION MATERIALS (11.1%).

ON THE OTHER HAND, OVERSEAS SALES OF TELECOMMUNICATIONS AND COMPUTERS FELL BY 2.8%

IN 4Q 2007 OVER 4Q 2006.

AT CONSTANT PRICES, THE OVERALL INDEX ROSE BY 11.5% IN 4Q 2007 OVER 4Q 2006.

EXCLUDING PETROLEUM, FOREIGN WHOLESALE TRADE GREW BY 15.1%.

ON A QUARTER-OVER-QUARTER BASIS, THE OVERALL FOREIGN WHOLESALE TRADE IN 4Q 2007 ROSE BY 11.7% OVER 3Q 2007. EXCLUDING PETROLEUM, IT GREW BY 6.0%.

ALL WHOLESALE SECTORS RECORDED BETTER BUSINESS IN 4Q 2007 WITH THE EXCEPTION OF THE ELECTRONIC COMPONENTS SECTOR. THOSE SECTORS THAT REGISTERED DOUBLE-DIGIT GROWTH WERE WHOLESALE SECTORS OF PETROLEUM AND PETROLEUM PRODUCTS, TELECOMMUNICATIONS AND COMPUTERS, INDUSTRIAL AND CONSTRUCTION MACHINERY AND CHEMICALS AND CHEMICAL PRODUCTS.

RETAIL TRADE

THE OVERALL RETAIL SALES CONTRACTED BY 2.5%, IN CONTRAST TO THE 1.5% GROWTH IN 3Q 2007. THE SECTOR THAT RECORDED THE LARGEST DECLINE WERE MOTOR VEHICLES, FOLLOWED BY PROVISION AND SUNDRY SHOPS, FOOD AND BEVERAGES, WATCHES AND JEWELLERY AND MEDICAL GOODS AND TOILETRIES. EXCLUDING MOTOR VEHICLES, RETAIL SALES ROSE BY 5.2%, A DECLINE FROM THE 6.O% GROWTH IN 3Q 2007.

NEWS

SURPRISING DROP IN RETAIL SALES

RETAIL SALES FELL UNEXPECTEDLY IN FEBRUARY, THE FIRST TIME IN SEVEN MONTHS, AS INFLATION HIT 26 YEAR HIGHS AND WORRIES GREW ABOUT THE WORLD ECONOMY. SHOPS, SUPERMARKETS AND OTHER RETAILERS SAW REVENUES FELL 1.3% FROM A YEAR EARLIER, AS CAR SALES DECLINED 10.6% AND FOOD AND BEVERAGES SALES PLUNGED 21.8%.

THE OVERALL CONTRACTION BY THE SECTOR WOULD HAVE BEEN BIGGER IF NOT FOR MUCH HIGHER PRICES THIS YEAR. IN CONSTANT PRICES TERMS, SALES FELL 5.7%. THIS IS THE WORST READING SINCE THE 5.0% DECLINE IN MARCH 2007, IF ONE WERE TO IGNORE THE 2.0% CONTRACTION IN JULY THAT WAS DUE TO THE HIKE IN THE GOODS AND SERVICES TAX,” SAID HSBC ECONOMIST PRAKRITI SOFAT.

ANALYSTS SAID RISING LIVING COSTS AND UNCERTAINTY ABOUT THE ECONOMY WOULD AFFECT SINGAPORE CONSUMER’S SPENDING THIS YEAR. MANY, HOWEVER, REMAIN LARGELY OPTIMISTIC ABOUT THE DOMESTIC RETAIL SCENE, SAYING THE POOR FEBRUARY SHOWING COULD BE A STATISTICAL BLIP.

DOMESTIC DEMAND CONDITIONS REMAIN POSITIVE, HELPED BY THE GOVERNMENT WHICH IS GIVING CASH FROM LAST YEAR’S SURPLUS TO THE WHOLE POPULATION AND ISSUING FOOD VOUCHERS TO THE POOR. “LOW INTEREST RATES AND A HEALHY JOBS MARKET SHOULD KEEP SPENDING FIRM,” SAID HSBC’S MS SOFAT. SHE ADDED THAT FEBRUARY’S DECLINE WAS DUE LARGELY TO A HIGH BASE SET THE PREVIOUS YEAR AND PREDICTED THAT MARCH SALES WOULD BOUNCE BACK WITH A 15.0% SURGE. ALSO, IF COMPARED WITH JANUARY, FEBRUARY SALES ROSE 8.8% AFTER ADJUSTING FOR SEASONAL EFFECTS. THIS WAS THE STRONGEST PERFORMANCE IN FOUR YEARS, SHE SAID.

CIMB-GK ECONOMIST SONG SENG WUN SAID MUCH OF THE POOR PERFORMANCE CAME ON THE BACK OF WEAKER CAR SALES. EXCLUDING THOSE, RETAIL SALES WOULD HAVE RISEN 2.9%. CAR SALES HAVE BEEN HURT SINCE OCTOBER BY RISING CERTIFICATE OF ENTITLEMENT PRICES, CAUSED BY AN EXPECTED CUT IN QUOTAS FROM NEXT MONTH AND SURGING PUMP PRICES.

OUTLOOK

GENERALLY, WHOLESALERS ARE POSITIVE ABOUT THEIR BUSINESS PROSPECTS IN THE COMING MONTHS, WITH A NET WEIGHTED BALANCE OF 4% OF FIRMS EXPRESSING POSITIVE BUSINESS SENTIMENTS. THE MAJORITY OF WHOLESALERS OF PETROLEUM AND PETROLEUM PRODUCTS, CHEMICALS AND CHEMICAL PRODUCTS, INDUSTRIAL MACHINERY AND EQUIPMENT AND COMPUTERS AND ACCESSORIES FORECAST BUSINESS OUTLOOK TO REMAIN THE SAME IN THE FIRST SIX MONTHS OF 2008 COMPARED WITH THE LAST SIX MONTHS IN 2007.

A NET WEIGHTED BALANCE OF 12% OF RETAILERS PREDICTS LESS FAVOURABLE BUSINESS CONDITIONS FOR THE PERIOD ENDING JUNE 2008. AS A RESULT OF THE REDUCED CERTIFICATE OF ENTITLEMENT (COE) QUOTA, MOTOR VEHICLES RETAILERS ARE ESPECIALLY CONCERNED WITH THE SALES.

EXTRACTED FROM: MINISTRY OF TRADE AND INDUSTRY, SINGAPORE

SINGAPORE DEPARTMENT OF STATISTICS

THE STRAITS TIMES

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs. 42.37
UK Pound	1	Rs.84.01
Euro	1	Rs.65.96

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%)

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