MIRA INFORM REPORT

Report Date :

02.12.2008

IDENTIFICATION DETAILS

Name :	ITL HARDWARE & ENGINEERING SUPPLIES PTE LTD

Registered Office :	72 Syed Alwi Road 207651

Country :	Singapore

Financials (as on) :	30.09.2007

Date of Incorporation :	25.09.1991

Com. Reg. No.:	199104825H

Legal Form :	Exempt Pte Ltd

Line of Business :	Wholesalers, Retailers and Dealers of Outboard Marine Motors, Spare Parts and Accessories.

RATING & COMMENTS

MIRA’s Rating :

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Status :	Satisfactory

Payment Behaviour :	Regular

Litigation :	Clear

Subject Company

ITL HARDWARE & ENGINEERING SUPPLIES PTE LTD

Line Of Business

WHOLESALERS, RETAILERS AND DEALERS OF OUTBOARD MARINE MOTORS, SPARE PARTS AND ACCESSORIES.

Parent Company

N/A

Financial Elements

FY 2007

COMPANY

Sales : S$6,315,506

Networth : S$ 680,876

Paid-Up Capital : S$ 350,000

Net result : S$ 93,649

Net Margin(%) : 1.48

Return on Equity(%) : 13.75

Leverage Ratio : 4.77

COMPANY IDENTIFICATION

Subject Company :	ITL HARDWARE & ENGINEERING SUPPLIESPTE LTD
Business Address:	72 SYED ALWI ROAD
Town:	SINGAPORE
Postcode:	207651
Country:	Singapore
Telephone:	6291 0503
Fax:	6291 3065
ROC Number:	199104825H

SUMMARY

Legal Form:	Exempt Pte Ltd
Date Inc.:	25/09/1991
Summary year :	30/09/2007
All amounts in this report are in :	SGD
Sales:	6,315,506
Networth :	680,876
Capital:	350,000
Paid-Up Capital:	350,000
Net result :	93,649
Share value:	1

AUDITOR: S C TEO & CO

BASED ON ACRA'S RECORD

                               NO.OF SHARES    CURRENCY              AMOUNT

ISSUED ORDINARY         750,000           SGD                       750,000.00

PAID-UP ORDINARY           -                  SGD                        750,000.00

REFERENCES

Litigation:	No
Company status :	TRADING
Started :	25/09/1991

PRINCIPAL(S)

TAY BOON LEE KESTER

S1294351B

Director

DIRECTOR(S)

ENG CHENG SWEE	S2539985D	Company Secretary
Appointed on :	16/03/2005
Street :	156 TAMPINES STREET 12 #08-15
Town:	SINGAPORE
Postcode:	521156
Country:	Singapore
TAY BOON LEE KESTER	S1294351B	Director
Appointed on :	27/12/1999
Street :	7 PARRY RAOD
Town:	SINGAPORE
Postcode:	547192
Country:	Singapore
LIM KIM NEE FLORENCE	S1463962D	Director
Appointed on :	20/12/1991
Street :	7 PARRY ROAD
Town:	SINGAPORE
Postcode:	547192
Country:	Singapore

FORMER DIRECTOR(S)

LIM KIM CHYE	S0221460A
TAY SIEW TIN	S0055205D

ACTIVITY(IES)

Activity Code:	11010	HARDWARE - RETAIL
Activity Code:	11760	IMPORTERS And EXPORTERS

BASED ON ACRA'S RECORD

1) WHOLESALE OF GENERAL HARDWARE (EG LOCKS, HINGES)

2) GENERAL WHOLESALE TRADE(INCLUDING GENERAL IMPORTERS AND EXPORTERS)

CHARGES

	AVAILABLE
Date:	12/02/2007
Amount:	0
Comments :	CHARGE NO: C200701192 AMOUNT SECURED: 0.00 AND ALL MONIES OWING CHARGEE(S): OVERSEA-CHINESE BANKING CORPORATION LIMTED

	AVAILABLE
Date:	15/09/2008
Amount:	0
Comments :	CHARGE NO: C200808570 AMOUNT SECURED: 0.00 AND ALL MONIES OWING CHARGEE(S): UNITED OVERSEAS BANK LIMITED

BANKERS

OVERSEA-CHINESE BANKING CORPORATIONLIMITED

UNITED OVERSEAS BANK LIMITED

SHAREHOLDERS(S)

TAY BOON LEE KESTER

490,000

Private Person

Street :	7 PARRY RAOD
Town:	SINGAPORE
Postcode:	547192
Country:	Singapore

LIM KIM NEE FLORENCE

260,000

Private Person

Street :	7 PARRY ROAD
Town:	SINGAPORE
Postcode:	547192
Country:	Singapore

FORMER SHAREHOLDER(S)

TAY KIM HOON

PAYMENT HISTORY AND EXPERIENCES

Trade Morality:	AVERAGE
Liquidity :	SUFFICIENT
Payments :	REGULAR
Trend :	LEVEL
Financial Situation:	AVERAGE

FINANCIAL ELEMENTS

All amounts in this report are in :

SGD

Audit Qualification:	UNQUALIFIED (CLEAN) OPINION	UNQUALIFIED (CLEAN) OPINION
Date Account Lodged:	25/05/2008
Balance Sheet Date:	30/09/2007	30/09/2006
Number of weeks:	52	52
Consolidation Code:	COMPANY	COMPANY

--- ASSETS
Tangible Fixed Assets:	1,575,619	383,287
Investments	6,370	8,365
Total Fixed Assets:	1,581,989	391,652
Inventories:	228,634	223,475
Receivables:	1,931,114	1,808,883
Cash,Banks, Securitis:	175,670	129,904
Other current assets:	11,848	26,383
Total Current Assets:	2,347,266	2,188,645
TOTAL ASSETS:	3,929,255	2,580,297
--- LIABILITIES
Equity capital:	350,000	350,000
Reeval. Reserves:	4,060	3,325
Profit & lost Account:	326,816	233,167
Total Equity:	680,876	586,492
Long Term Loans:	902,447	260,000
L/T deffered taxes:	2,000	2,000
Other long term Liab.:	237,480	81,154
Total L/T Liabilities:	1,141,927	343,154
Trade Creditors:	1,214,570	1,008,029
Short term liabilities:	47,144	29,901
Due to Bank:	82,766	40,281
Provisions:	19,278	33,436
Other Short term Liab.:	426,906	123,005
Total short term Liab.:	2,106,452	1,650,651
Prepay. & Def. charges:	315,788	415,999
TOTAL LIABILITIES:	3,248,379	1,993,805
--- PROFIT & LOSS ACCOUNT
Net Sales	6,315,506	4,787,532
NET RESULT BEFORE TAX:	111,649	195,732
Tax :	18,000	36,000
Net income/loss year:	93,649	159,732
Interest Paid:	47,140	25,545
Depreciation:	128,978	50,800
Directors Emoluments:	526,858	582,918
Wages and Salaries:	386,836	291,336

RATIOS

Date Account Lodged:	30/09/2007	30/09/2006
Net result / Turnover(%):	0.01	0.03
Fin. Charges / Turnover(%):	0.01	0.01
Stock / Turnover(%):	0.04	0.05
Net Margin(%):	1.48	3.34
Return on Equity(%):	13.75	27.24
Return on Assets(%):	2.38	6.19
Net Working capital:	240814	537994
Cash Ratio:	0.08	0.08
Quick Ratio:	1	1.17
Current ratio:	1.11	1.33
Receivables Turnover:	110.08	136.02
Leverage Ratio:	4.77	3.40

^{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}

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

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

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

FINANCIAL COMMENTS

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

NET WORTH:

THE BALANCE SHEET WAS CONSIDERED PASSABLE WITH NET WORTH IMPROVED BY 16.09% TO S$680,876 (2006: S$586,492). THIS WAS ATTRIBUTED TO A RISE IN ACCUMULATED PROFITS BY 40.16% TO S$326,816 IN 2007 FROM S$233,167 IN 2006.

LEVERAGE:

IN THE SHORT-TERM, SUBJECT WAS LARGELY FINANCED BY TRADE CREDITORS WHICH MADE UP 57.66% (2006: 61.07%) OF THE TOTAL CURRENT LIABILITIES AND AMOUNTED TO S$1,214,570 (2006: S$1,008,029). BREAKDOWN WAS AS FOLLOWS:

*  TRADE PAYABLES - 2007: S$1,214,570 (2006: S$977,951)

*  AMOUNT DUE TO A RELATED PARTY (TRADE) - 2007; NIL (2006: S$30,078)

AMOUNTS DUE TO BANKS ROSE BY 1.05 TIMES AND AMOUNTED TO S$82,766

(2006: S$40,281). BREAKDOWN WAS AS FOLLOWS:

*  TERM LOAN (SECURED) - 2007: S$45,520 (2006: S$7,656)

*  BANK LOAN (UNSECURED) - 2007: S$37,246 (2006: S$32,625)

IN ALL, LEVERAGE RATIO ROSE FROM 3.40 TIMES IN 2006 TO 4.77 TIMES IN

2007 INDICATING THAT THE COMPANY'S LIABILITIES WERE MORE SUBSTANTIAL

IN RELATION TO ITS TOTAL EQUITY.

LIQUIDITY:

IN GENERAL, SUBJECT'S LIQUIDITY SITUATION WAS CONSIDERED PASSABLE ALTHOUGH NET WORKING CAPITAL DROPPED BY 55.24% AND AMOUNTED TO S$240,814 (2006: S$537,994).

ON THE OTHER HAND, BOTH CURRENT AND QUICK RATIOS POSTED LOWER BUT WERE SUFFICIENT TO 1.11 TIMES (2006: 1.33 TIMES) AND 1.00 TIMES (2006: 1.17 TIMES) RESPECTIVELY.

CASH AND CASH EQUIVALENTS ROSE BY 35.23% FROM S$129,904 IN 2006 TO S$175,670 IN 2007.

PROFITABILITY:

SUBJECT POSTED AN INCREASE IN REVENUE OF 31.92% WHICH AMOUNTED TO S$6,315,506 (2006: S$4,787,532). HOWEVER,  NET PROFIT FELL BY 41.37%  WHICH AMOUNTED TO S$93,649 (2006: S$159,732). AS A RESULT, NET MARGIN FELL TO 1.48% (2006: 3.34%).

DEBT SERVICING:

DEBT SERVICING PROBLEMS MIGHT NOT BE EXPECTED IF REVENUE AND EARNINGS CAN BE MAINTAINED OR IMPROVED AND PAYMENTS BY TRADE DEBTORS ARE FORTHCOMING.

IT WAS NOTED THAT AVERAGE COLLECTION PERIOD HAS SHORTHENED TO 110 DAYS

(2006: 136 DAYS).

NOTES TO FINANCIAL STATEMENTS:

TERM LOANS (SECURED):

*  TERM LOANS ARE SECURED BY LEGAL MORTGAGE OF THE COMPANY'S LEASEHOLD

   PROPERTIES.

*  TERM LOANS BEAR INTEREST OF 4.2% - 6.2% (2006: 5.6%) AND ARE

   REPAYABBLE VIA MONTHLY INSTALLMENTS TILL 2024.

*  BANK LOAN (UNSECURED):

BANK LOAN BEARS INTEREST OF 14.20% PER ANNUM (2006: 12.80%) AND IS

REPAYABLE OVER 3 YEARS VIA MONTHLY INSTALLMENTS COMMENCING 22 OCTOBER

2005.

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 25/09/1991 AS A LIMITED EXEMPT PRIVATE COMPANY AND IS TRADING UNDER ITS PRESENT NAMESTYLE AS "ITL HARDWARE & ENGINEERING SUPPLIES PTE LTD".

THE COMPANY HAS AN ISSUED AND PAID-UP CAPITAL OF 750,000 SHARES, OF A VALUE OF S$750,000.

PRINCIPAL ACTIVITIES:

SUBJECT IS REGISTERED WITH THE ACCOUNTING AND CORPORATE REGULATORY

AUTHORITY (ACRA) TO BE PRINCIPALLY ENGAGED IN THE BUSINESS OF:

1) WHOLESALE OF GENERAL HARDWARE (EG LOCKS, HINGES)

2) GENERAL WHOLESALE TRADE(INCLUDING GENERAL IMPORTERS AND EXPORTERS)

THE COMPANY WAS LISTED IN THE SINGAPORE LOCAL DIRECTORIES UNDER THE

CLASSIFICATION OF: HARDWARE-WHSLE

DURING THE FINANCIAL YEAR(S), UNDER REVIEW, SUBJECT'S PRINCIPAL ACTIVITIES ARE THOSE OF WHOLESALERS, RETAILERS AND DEALERS OF OUTBOARD MARINE MOTORS, SPARE PARTS AND ACCESSORIES.

FROM THE RESEARCH DONE, THE FOLLOWING INFORMATION WAS GATHERED:

SUBJECT ENGAGES IN THE FOLLOWING ACTIVITIES:

*  SUBJECT IS A SUPPLIER OF MARINE EQUIPMENT, GENERAL HARDWARE &

   SHIPBUILDING SUPPLIES.

*  TRADING IN CHEMICAL RESISTANT, ELECTRICAL & WELDING GLOVES,

   PNEUMATIC AIR TOOLS, GASKET PUNCHING TABLE AND SCALING HAMMERS

   WITH TUNGSTEN CARBIDE TIPPED PISTON.

PRODUCTS OR SERVICES:

*  AIR TOOLS

*  BRUSHES: WIRE CUP

*  CHEMICAL RESISTANT GLOVES

*  DIAPHRAGM PUMPS

*  ELECTRIC POWER TOOLS

*  FOOTWEARS: SAFETY

*  GLOVES: LEATHER

*  HARDWARE - WHOLESALERS

*  LEATHER GLOVES

*  MARINE EQUIPMENT & SUPPLIES

*  PUMPS: DEWATERING, DRAINAGE

*  PUMPS: SUMP

*  SAFETY EQUIPMENT & CLOTHING

*  SHOES: SAFETY

*  TAPES: MEASURING

*  TOOLS: DRILLING

*  TOOLS: HAND

*  WIRE CUP BRUSHES

*  BLOCKS: CHAIN

*  CHAIN BLOCKS

*  CONSTRUCTION PUMPS

*  DRAINAGE PUMPS

*  ELECTRIC TOOLS

*  GLOVES: CHEMICAL RESISTANT

*  GLOVES: WELDING

*  HOISTS: CHAIN

*  LEVER HOISTS

*  MEASURING TAPES

*  PUMPS: DIAPHRAGM

*  SAFETY BOOTS

*  SAFETY SHOES

*  SHOVELS

*  TAPS & DIES

*  TOOLS: ELECTRIC

*  TOOLS: PNEUMATIC

*  BOOTS: SAFETY

*  CHAIN HOISTS

*  DEWATERING-DRAINANGE PUMPS

*  DRILLING TOOLS

*  ELECTRICIANS' GLOVES

*  GLOVES: ELECTRICIAN

*  HAND TOOLS

*  HOISTS: MANUAL

*  MANUAL HOISTS

*  PUMPS: CONSTRUCTION

*  PUMPS: DRAINAGE

*  SAFETY CLOTHING

*  SHIP CHANDLERS

*  SUMP PUMPS

*  TOOLS

*  TOOLS: ELECTRIC POWER

*  WELDING GLOVES

BRANDNAMES:

*  AMMECH             - HAND TOOLS

*  IRIMO                  - HAND TOOLS

*  EDITOOL              - PNEUMATIC TOOLS

*  TERYAIR              - AIR TOOLS, MARINE HARDWARE PRODUCTS

TERMS OF PAYMENT:

*  TRADE AND OTHER RECEIVABLES: 30-90 DAYS TERM

*  TRADE AND OTHER PAYABLES   : 30-90 DAYS TERM

NO OTHER TRADE INFORMATION WAS AVAILABLE AS TELE-INTERVIEW WAS NOT

GRANTED BY SUBJECT'S PERSONNEL

REGISTERED AND BUSINESS ADDRESS:

72  SYED ALWI ROAD

SINGAPORE 207651

DATE OF CHANGE OF ADDRESS: 27/10/1997

- RENTED PREMISE

- PREMISE OWNED BY: GRAND EAST EXPORTS PTE LTD

WEBSITE: -

EMAIL  : itlhw@singnet.com.sg

MANAGEMENT

THE DIRECTORS AT THE TIME OF THIS REPORT ARE:

1) TAY BOON LEE KESTER, A SINGAPOREAN

   - HOLDS NO OTHER DIRECTORSHIPS AS RECORDED IN OUR DATABASE.

2) LIM KIM NEE FLORENCE, A SINGAPOREAN

   - HOLDS OTHER DIRECTORSHIPS AS RECORDED IN OUR DATABASE:

     SEAFARI PTE LTD

GENERAL COMMENTS

SINGAPORE'S COUNTRY RATING 2008

INVESTMENT GRADE

IN SINGAPORE, THE POLITICAL AND ECONOMIC SITUATION IS VERY GOOD. A QUALITY

BUSINESS ENVIRONMENT HAS A POSITIVE INFLUENCE ON CORPORATE PAYMENT BEHAVIOUR.

CORPORATE DEFAULT PROBABILITY IS VERY LOW ON AVERAGE.

ECONOMIC GROWTH REMAINED STRONG IN 2007 AND IN Q1 2008 (6.7%) THANKS TO A SHARP

INCREASE IN CONSUMPTION SPURRED BY A BRIGHT EMPLOYMENT PICTURE, RISING REAL

WAGES, AND A POSITIVE WEALTH EFFECT PRODUCED BY RISING PROPERTY PRICES. IN THIS

CONTEXT, BANKRUPTCIES CONTINUE TO DECLINE, AS REFLECTED BY THE FAVOURABLE COFACE

PAYMENT INCIDENT INDEX TREND. SINGAPORE MOREOVER BOASTS THE BEST GOVERNANCE IN

ASIA THANKS TO AN EFFECTIVE LEGAL SYSTEM AND A GOOD LEVEL OF FINANCIAL

TRANSPARENCY.

HOWEVER, A GROWTH SLOWDOWN IS EXPECTED FOR 2008 (4.5%) AMID WEAKER DEMAND GROWTH

IN THE UNITED STATES, SINGAPORE'S NUMBER TWO TRADING PARTNER. THE FOREIGN TRADE

CONTRIBUTION TO GROWTH WILL THUS DECLINE ESPECIALLY WITH EXPORTS REPRESENTING

210 PER CENT OF GDP.

INFLATION ACCELERATED IN 2007 AND REACHED 7.5% IN MAY 2008 BECAUSE OF RISING RAW

MATERIAL PRICES. INDEED, SINGAPORE IMPORTS ALMOST ALL ITS ENERGY AND FOOD.

HOWEVER, FOR THE ENTIRE YEAR, INFLATION SHOULD MODERATE AND REACH 2.8%.

THE FINANCIAL SITUATION HAS REMAINED ROBUST AS THE EQUILIBRIUM OF PUBLIC SECTOR

FINANCES AND THE SOLIDITY OF A BANKING SYSTEM POISED TO ADOPT BASEL II

PRUDENTIAL STANDARDS ATTEST. EXTERNAL ACCOUNTS CONTINUE MOREOVER TO SHOW LARGE

SURPLUSES THANKS TO GOOD PERFORMANCE IN A RANGE OF SECTORS INCLUDING

ELECTRONICS, TRANSPORT, CONSTRUCTION, TOURISM, AND FINANCIAL SERVICES. THE

DECLINE EXPECTED IN THE CURRENT ACCOUNT SURPLUS IN 2008 SHOULD NOT JEOPARDISE

SINGAPORE'S EXCEPTIONAL FINANCIAL SOLIDITY.

UNDERPINNED BY SUBSTANTIAL FISCAL RESERVES AND A LARGE MAJORITY IN PARLIAMENT,

THE PEOPLE'S ACTION PARTY OF PRIME MINISTER LEE HSIEN LOONG HAS SOUGHT AT ONCE

TO MAKE THE CITY-STATE MORE ATTRACTIVE TO FOREIGN INVESTORS AND TO BOLSTER THE

SPECIALISATION IN HIGH-VALUE ADDED SECTORS TO MEET THE GROWING COMPETITION FROM

LOW-COST ASIAN ECONOMIES. BESIDES REDUCTIONS IN CORPORATE INCOME TAX AND TAX

INCENTIVES FOR COMPANIES SETTING UP OPERATIONS IN SINGAPORE, THE GOVERNMENT

CONTINUES TO PURSUE ITS INFRASTRUCTURE AND R&D INVESTMENT POLICY.

ASSETS

"              THE COUNTRY HAS BEEN PURSUING AMBITIOUS DIVERSIFICATION STRATEGY,

ESPECIALLY TO HIGH VALUE-ADDED SECTORS LIKE CHEMICALS, PHARMACEUTICALS, AND

FINANCE.

"              IT IS AMONG THE MOST ADVANCED COUNTRIES OF ASIA IN QUALITY

COMPETITIVENESS TERMS.

"              SINGAPORE HAS BECOME A MAJOR EXPORTER OF CAPITAL IN ASIA IN MANY ECONOMIC

SECTORS -SUCH AS FINANCE, TELECOMMUNICATIONS, TRANSPORT - NOTABLY VIA THE STATE-

OWNED TEMASEK HOLDING COMPANY

"              THE ECONOMY HAS BENEFITED FROM THE COUNTRY'S POLITICAL STABILITY AND

EXCELLENT BUSINESS CLIMATE.

WEAKNESSES

"              SKILLED LABOUR IS IN SHORT SUPPLY IN THE SECTORS THE COUNTRY WISHES TO

DEVELOP.

"              THE AGEING POPULATION COULD ULTIMATELY UNDERMINE ECONOMIC PERFORMANCE.

"              GROWING INEQUALITY AND THE EMERGENCE OF LONG-TERM UNEMPLOYMENT AMONG THE

LEAST SKILLED COULD GENERATE SOCIAL TENSIONS.

"              THE VERY OPEN ECONOMY IS VULNERABLE TO A WORLD ECONOMIC DOWNTURN.

WHOLESALE AND RETAIL TRADE SECTOR

PAST PERFORMANCE

THE WHOLESALE AND RETAIL TRADE SECTOR GREW BY 6.0% IN 2Q 2008, HIGHER THAN THE

5.5% GROWTH IN 1Q 2008. NON-OIL RE-EXPORTS GREW BY 14.0% IN 2Q 2008, STRONGER

THAN THE 11.0% GROWTH IN 1Q 2008. RETAIL SALES FELL BY 2.9% IN 2Q 2008. HOWEVER,

THIS REPRESENTED A DECLINE OVER A RELATIVELY HIGHER BASE IN 2Q 2007(8.1%

GROWTH). EXCLUDING MOTOR VEHICLES, RETAIL SALES FELL BY 1.4% IN 2Q 2008, IN

CONTRAST TO THE 1.4% GROWTH IN 1Q 2008.

DOMESTIC WHOLESALE TRADE INDEX

THE OVERALL DOMESTIC WHOLESALE TRADE ROSE BY 11.1% IN 2Q 2008 OVER 1Q 2008.

EXCLUDING PETROLEUM, DOMESTIC SALES ROSE BY 2.9%.

AFTER SEASONAL ADJUSTMENT, DOMESTIC SALES ROSE BY 4.5% IN 2Q 2008 OVER 1Q 2008.

EXCLUDING PETROLEUM, DOMESTIC SALES FELL BY 1.9%.

ON A YEAR-ON-YEAR BASIS, THE OVERALL DOMESTIC WHOLESALE TRADE GREW BY 25.4% OVER

THE PREVIOUS YEAR. EXCLUDING PETROLEUM, DOMESTIC SALES ROSE BY 4.7%. AFTER

REMOVING PRICE EFFECT, THE OVERALL DOMESTIC WHOLESALE TRADE FELL BY 2.0% IN 2Q

2008 OVER 2Q 2007.

ON A QUARTER-OVER-QUARTER BASIS, MOST WHOLESALE SECTORS REPORTED HIGHER DOMESTIC

SALES AFTER RECORDING SLOWER BUSINESS IN THE PREVIOUS QUARTER.

DOMESTIC SALES OF TIMBER, PAINTS AND CONSTRUCTION MATERIALS, AND INDUSTRIAL AND

CONSTRUCTION MACHINERY REGISTERED INCREASES OF 22.7% AND 21.1% IN 2Q 2008.

PETROLEUM AND PETROLEUM PRODUCTS, AND CHEMICALS AND CHEMICAL PRODUCTS ROSE BY

20.2% AND 12.6% RESPECTIVELY IN 2Q 2008 OVER 1Q 2008. AFTER ADJUSTING FOR PRICE

CHANGES, SALES REMAINED AT SIMILAR LEVELS AS 1Q 2008.

CONVERSELY, DOMESTIC GENERAL WHOLESALE TRADE FELL BY 15.2%. IT WAS FOLLOWED BY

DOMESTIC SALES OF FOOD, BEVERAGES AND TOBACCO, SHIP CHANDLERS AND BUNKERING, AND

HOUSEHOLD EQUIPMENT AND FURNITURE WHICH CONTRACTED BY 4.1% TO 6.9% OVER 1Q 2008.

ON A YEAR-ON-YEAR BASIS, THE WHOLESALE SECTORS RECORDED MIXED PERFORMANCE IN

DOMESTIC SALES IN 2008 OVER 2Q 2007.

THE DOMESTIC SALES OF PETROLEUM AND PETROLEUM PRODUCTS, SHIP CHANDLERS AND

BUNKERING, TIMBER, PAINTS AND CONSTRUCTION MATERIALS, AND CHEMICALS AND CHEMICAL

PRODUCTS ROSE BY 17.8% TO 54.7% IN 2Q 2008. SALES OF TIMBER, PAINTS AND

CONSTRUCTION MATERIALS ROSE BY 8.7% OVER 2Q 2007.

CONVERSELY, DOMESTIC GENERAL WHOLESALE TRADE FELL BY 24.6%. WHOLESALE TRADE OF

FOOD, BEVERAGES AND TOBACCO, HOUSEHOLD EQUIPMENT AND FURNITURE, AND TRANSPORT

EQUIPMENT FELL BY 7.7% TO 9.3%. DOMESTIC SALES OF ELECTRONIC COMPONENTS DECLINED

BY 4.3% IN 2Q 2008 WHILE TELECOMMUNICATIONS AND COMPUTERS REMAINED STABLE.

FOREIGN WHOLESALE TRADE INDEX

FOREIGN WHOLESALE TRADE SALES ROSE BY 11.8% IN 2Q 2008 OVER 1Q 2008. EXCLUDING

PETROLEUM, SALES ROSE BY 4.7%.

AFTER SEASONAL ADJUSTMENT, FOREIGN SALES ROSE BY 6.7% OVER 1Q 2008. EXCLUDING

PETROLEUM, SALES ROSE SLIGHTLY BY 1.0%.

ON A YEAR-ON-YEAR BASIS, FOREIGN WHOLESALE SALES ROSE BY 28.4% OVER 1Q 2008.

EXCLUDING PETROLEUM, SALES ROSE BY 15.3%. AFTER REMOVING PRICE EFFECT, OVERSEAS

SALES ROSE SLIGHTLY BY 1.1% OVER 2Q 2007.

COMPARED TO 1Q 2008, FOREIGN SALES ROSE IN THE MAJORITY OF WHOLESALE SECTORS IN

2Q 2008.

FOOD, BEVERAGES AND TOBACCO WHOLESALERS REPORTED HIGHER OVERSEAS SALES OF 21.9%

IN 2Q 2008 OVER 1Q 2008, THE LARGEST INCREASE AMONG ALL SECTORS. IT WAS FOLLOWED

BY PETROLEUM AND PETROLEUM PRODUCTS, AND HOUSEHOLD EQUIPMENT AND FURNITURE WITH

INCREASES OF 19.4$ AND 16.1% RESPECTIVELY. FOREIGN SALES OF SHIP CHANDLERS AND

BUNKERING ROSE BY 8.1% IN 2Q 2008 OVER 1Q 2008.TIMBER, PAINTS AND CONSTRUCTION

MATERIALS, CHEMICALS AND CHEMICAL PRODUCTS, AND INDSUTRIAL AND CONSTRUCTION

MACHINERY ALSO ROSE BY BETWEEN 5.8% TO 7.2%.

AFTER ADJUSTING FOR PRICE INCREASES, THE SALES VOLUME OF PETROLEUM AND PETROLEUM

PRODUCTS, CHEMICALS AND CHEMICAL PRODUCTS, SHIP CHANDLERS AND BUNKERING

CONTRACTED COMPARED TO 1Q 2008.

CONVERSELY, FOREIGN SALES OF TELECOMMUNICATIONS AND COMPUTERS, AND GENERAL

WHOLESALE TRADE FELL IN 2Q 2008 OVER 1Q 2008. SALES OF ELECTRONIC COMPONENTS

REMAINED STABLE AS COMPARED TO 1Q 2008.

COMPARED TO A YEAR AGO, MOST WHOLESALE SECTORS REPORTED DOUBLE-DIGIT GROWTHS IN

FOREIGN SALES IN 2Q 2008.

WHOLESALING OF FOOD, BEVERAGES AND TOBACCO CONTINUED TO RECORD HIGHER GROWTH

RATES IN FOREIGN SALES, WITH HIGHER TURNOVER OF 94.8% IN 2Q 2008 OVER A YEAR

AGO. AFTER ADJUSTING FOR PRICES, SALES VOLUME ROSE BY 77.3% OVER A YEAR AGO.

WITH HIGHER FUEL PRICES. WHOLESALE SECTORS OF PETROLEUM AND PETROLEUM PRODUCTS,

SHIP CHANDLERS AND BUNKERING REPORTED HIGHER FOREIGN SALES OF 43.7% AND 38.1%

RESPECTIVELY OVER A YEAR AGO. AFTER REMOVING PRICE EFFECT, THE SALES VOLUME OF

PETROLEUM AND PETROLEUM PRODUCTS FELL BY 10.7% WHILE SALES VOLUME OF SHIP

CHANDLERS AND BUNKERING DECLINED BY 13.6.

GENERAL WHOLESALE TRADE, CHEMICALS AND CHEMICAL PRODUCTS, TRANSPORT EQUIPMENT,

AND

HOUSEHOLD EQUIPMENT AND FURNITURE, AND INDUSTRIAL AND CONSTRUCTION MACHINERY

ALSO REGISTERED STRONG SALES GROWTH OF BETWEEN 5.8% TO 24.7%.

CONVERSELY, FOREIGN SALES OF ELECTRONIC COMPONENTS, TIMBER, PAINTS AND

CONSTRUCTION MATERIALS, AND TELECOMMUNICATIONS AND COMPUTERS FELL BY 4.9% TO

8.6%

IN 2Q 2008 COMPARED TO 2Q 2007.

NEWS

RETAIL SPENDING DOWN FOR THIRD STRAIGHT MONTH

RETAIL SPENDING FELL FOR THE THIRD STRAIGHT MONTH IN AUGUST AS DEMAND FOR CARS

AND RECREATIONAL GOODS DROPPED AMID THE COUNTRY'S FIRST RECESSION SINCE 2002.

WHILE SPENDING ROSE 4.2% FROM AUGUST LAST YEAR, IT WAS 5.8% FROM JULY THIS YEAR,

ACCORDING TO THE RETAIL SALES INDEX RELEASED BY THE DEPARTMENT OF STATISTICS

(DOS) YESTERDAY.

TOTAL RETAIL SALES IN AUGUST WERE ESTIMATED AT S$2.71 BILLION, DOWN FROM S$2.88

BILLION IN JULY.

THE SLOWDOWN IN SPENDING MEANT PEOPLE SPLASHED OUT LESS ON CARS, FURNITURE AND

HOUSEHOLD EQUIPMENT, PETROL, APPAREL, FOOTWEAR AND RECREATIONAL GOODS.

SALES FELL ACROSS THE BOARD FROM THEIR JULY TAKINGS, WITH DECLINES RANGING FROM

3.6% TO 20.4%.

BUT THERE WAS A DOUBLE-DIGIT RISE IN SALES OF BIG-TICKET LUXURY ITEMS.

TELECOMMUNICATIONS APPARATUS AND COMPUTER RETAILERS ENJOYED SALES GROWTH OF

19.5%, WHILE THE WATCH AND JEWELLERY SECTOR'S RECEIPTS ROSE BY 13.6% IN JULY.

A RECENT STRAITS TIMES SURVEY OF 62 TENANTS IN SIX ORCHARD ROAD MALLS FOUND

RETAIL REVENUES HAVE FALLEN BY AS MUCH AS 30.0% IN THE PAST THREE WEEKS,

COINCIDING WITH THE BANK FAILURES, STOCK MARKET ROUTS AND GROWING FEARS OVER THE

GLOBAL FINANICAL TURMOIL.

SEVERAL STORES HAVE ALSO LAUNCHED MID-SEASON SALES, AN EXERCISE UNUSUALLY

UNDERTAKEN ONLY IN PARTICULARY SLOW PERIODS.

THE AUGUST FIGURES WERE MORE ENCOURAGING, HOWEVER, WHEN COMPARED WITH THE SAME

PERIOD LAST YEAR. VIRTUALLY ALL SEGMENTS, FROM DEPARTMENT STORES TO

SUPERMARKETS, REPORTED DOUBLE-DIGIT GROWTHS OF 11.2 TO 29.6%. HOWEVER, MOTOR

VEHICLE SALES FELL 12.9% AND RECREATIONAL GOODS SALES CONTRACTED BY 6.8%.

INFLATION MAY HAVE PUSHED SALES FIGURES UP. AFTER REMOVING THE EFFECT OF HIGHER

PRICES, WHICH WOULD GIVE A HIGHER OVERALL SALES VALUE, RETAIL SALES ACTUALLY

REMAINED UNCHANGED FROM A YEAR AGO.

VALUE OF PETROL SALES IN MARCH SOARED 39%, AS A RESULT OF RISING CRUDE OIL

PRICES, EVEN THOUGH THE ACTUAL VOLUME WAS ONLY MARGINALLY HIGHER.

PETROL STATION SALES POSTED THE FASTEST GROWTH OF ALL RETAIL SEGMENTS IN MARCH,

ACCORDING TO FIGURES THE DEPARTMENT OF STATISTICS RELEASED YESTERDAY.

PETROL SALES ROSE 28.2% IN FEBRUARY.

MOST RETAIL SEGMENTS POSTED HIGHER GROWTH MARCH AFTER A WEAKER SHOWING IN

FEBRUARY FOR THE COMPUTERS, FURNITURE, OPTICAL GOODS AND BOOKS SEGMENTS. BUT

MOTOR VEHICLES FELL 8.1% FROM MARCH 2007 AS A RESULT OF THE ESCALATING PETROL

PRICES. CRUDE OIL HIT ALMOST US$127 A BARREL RECENTLY.

THE SUPERMARKET AND FOOD AND BEVERAGE SEGMENTS ALSO REPORTED LOWER SALES

ACTIVITY THAN IN FEBRUARY, WITH FALLS OF 4.7% AND 11.9%, RESPECTIVELY.

OVERALL RETAIL SALES ROSE BY 5.6% COMPARED TO MARCH 2007. EXCLUDING MOTOR

VEHICLES, SALES VOLUME ROSE BY 12.5%.

OCBC ECONOMIST SELENA LING NOTED THE RETAIL NUMBERS INDICATED RELATIVELY HEALTHY

CONSUMER SPENDING. "THIS IS A TESTIMONY TO THE FACT THAT THE SINGAPOREAN ECONOMY

IS STILL ENJOYING BROAD-BASED GROWTH DESPITE THE GLOBAL SLOWDOWN," SHE SAID.

THE TOTAL VALUE OF RETAIL SALES IN MARCH WAS ESTIMATED AT S$2.89 BILLION,

COMPARED WITH S$2.59 BILLION IN FEBRUARY.

OUTLOOK

GENERALLY, THE MAJORITY OF WHOLESALERS, WITH A NET WEIGHTED BALANCE OF 55% OF

FIRMS, FORECASTS BUSINESS ACTIVITIES IN THE COMING MONTHS, TO REMAIN AT SIMILAR

LEVELS. FOR THE REMAINING WHOLESALE FIRMS, A WEIGHTED 22% OF THEM EXPECTS BETTER

BUSINESS CONDITIONS TO IMPROVE. THESE FIRMS ARE MAINLY IN THE BUSINESS OF

WHOLESALE TRADE OF INDUSTRIAL MACHINERY AND EQUIPMENT, ELECTRONIC COMPONENTS,

AND COMPUTER AND ACCESSORIES. ON THE OTHER HAND, A WEIGHTED 23% OF WHOLESALERS,

MAINLY FROM FOOD AND BEVERAGES, AND PETROLEUM AND PETROLEUM PRODUCTS, FORECAST

BUSINESS CONDITIONS TO DETERIORATE IN THE COMING MONTHS. ON THE WHOLE, A NET

WEIGHTED BALANCE OF 1% OF FIRMS EXPECTS GENERAL BUSINESS OUTLOOK TO REMAIN LESS

FAVOURABLE.

A NET WEIGHTED BALANCE OF 20% OF RETAILERS PREDICTS LESS FAVOURABLE BUSINESS

CONDITIONS FOR THE PERIOD ENDING DECEMBER 2008. MOTOR VEHICLES RETAILERS, AND

JEWWELLERY AND WATCHES CONTINUE TO PREDICT SLOWER SALES IN THE MONTHS AHEAD.

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.50.52
UK Pound	1	Rs.75.08
Euro	1	Rs.63.72

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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