MIRA INFORM REPORT

Report Date :

15.02.2008

IDENTIFICATION DETAILS

Name :	NGK MACHINE TOOLS (S) PTE LTD
Registered Office :	^60 Benoi Road
Country :	Singapore
Financials (as on) :	^31/12/2006
Date of Incorporation :	^16/03/1988
Com. Reg. No.:	^198800797Z
Legal Form :	^Exempt Pte Ltd
Line of Business :	^Trading of used machine tools and related ^accessories and rental of machineries.

RATING & COMMENTS

MIRA’s Rating :

Ba

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

^{NGK MACHINE TOOLS (S) PTE LTD}

Line Of Business 

^{TRADING OF USED MACHINE TOOLS AND RELATED ACCESSORIES AND RENTAL OF MACHINERIES.}

Parent Company

--

Financial Elements

FY 2006

COMPANY

^{Sales : S$10,216,844}

^{Networth : S$956,783}

^{Paid-Up Capital : S$1,000,000}

^{Net result : S$-9,102}

COMPANY IDENTIFICATION

^{Subject Company : NGK MACHINE TOOLS (S) PTE LTD}

^{Business Address: 60 BENOI ROAD}

^{Town: SINGAPORE}

^{Postcode: 629906}

^{Country: Singapore}

^{Telephone: 6842 5655}

^{Fax: 6842 6168}

^{ROC Number: 198800797Z}

^{Reg. Town:}

Websites: www.nakusedmachine.com

SUMMARY

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

^{Legal Form: Exempt Pte Ltd}

^{Date Inc.: 16/03/1988}

^{Summary year : 31/12/2006}

^{Sales: 10,216,844}

^{Networth : 956,783}

^Capital:

^{Paid-Up Capital: 1,000,000}

^{Employees: 11}

^{Net result : -9,102}

^{Share value:}

AUDITOR B.K. SOO & CO

REFERENCES

^{Litigation : No}

^{Company status : TRADING}

^{Started : 16/03/1988}

PRINCIPAL(S)

^{NG GEOK KWEE S1301412D Managing Director}

DIRECTOR(S)

^{NG GEOK KWEE S1301412D Managing Director}

^{Appointed on : 03/01/2000}

^{Street : 2 MUGLISTON GARDENS}

^{Town: SINGAPORE}

^{Postcode: 798609}

^{Country: Singapore}

^{TAY SIEW LAY S1451890H Director}

^{Appointed on : 10/07/2001}

^{Street : 2 MUGLISTON GARDENS}

^{Town: SINGAPORE}

^{Postcode: 798609}

^{Country: Singapore}

^{NG GEOK KWEE S1301412D Director}

^{Appointed on : 16/03/1988}

^{Street : 2 MUGLISTON GARDENS}

^{Town: SINGAPORE}

^{Postcode: 798609}

^{Country: Singapore}

^{NG KIN ENG S1363757A Company Secretary}

^{Appointed on : 18/09/2003}

^{Street : 638 BEDOK RESERVOIR ROAD}

^#09-41

^{Town: SINGAPORE}

^{Postcode: 410638}

^{Country: Singapore}

FORMER DIRECTOR(S)

^{SOO BOON YEOW S1264027G}

^{NG BON BONK S1027875I}

ACTIVITY(IES)

^{IMPORTERS And EXPORTERS Code:11760}

^{COMMISSION MERCHANTS Code:4990}

^{BASED ON ACRA'S RECORD}

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

^{2) WHOLESALE ON A FEE OR CONTRACT BASIS (EG COMMISSION AGENCIES)}

CHARGES

^{Date: 05/09/2003}

^{Comments : CHARGE NO: C200304271}

^{AMOUNT SECURED: 0.00 AND ALL MONIES OWING}

^{CHARGEE: UNITED OVERSEAS BANK LTD}

^{Date: 10/03/2006}

^{Comments : CHARGE NO: C200601556}

^{AMOUNT SECURED: 0.00 AND ALL MONIES OWING}

^{CHARGEE: UNITED OVERSEAS BANK LTD}

^{Date: 29/03/1997}

^{Comments : CHARGE NO: 199701835 (DISCHARGED - 07/03/2001)}

^{AMOUNT SECURED: 0.00 AND ALL MONIES OWING}

^{CHARGEE: THE DEVELOPMENT BANK OF SINGAPORE LIMITED}

^{Date: 27/03/2001}

^{Comments : CHARGE NO: 200101415}

^{AMOUNT SECURED: 0.00 AND ALL MONIES OWING}

^{CHARGEE: UNITED OVERSEAS BANK LTD}

PREMISES/PROPERTY INFORMATIONS

No Premises/Property Information In Our Databases

BANKERS

^{UNITED OVERSEAS BANK LIMITED}

SHAREHOLDERS(S)

^{NG GEOK KWEE 715,000 Private Person}

^{Street : 2 MUGLISTON GARDENS}

^{Town: SINGAPORE}

^{Postcode: 798609}

^{Country: Singapore}

^{TAY SIEW LAY 285,000 Private Person}

^{Street : 2 MUGLISTON GARDENS}

^{Town: SINGAPORE}

^{Postcode: 798609}

^{Country: Singapore}

FORMER SHAREHOLDER(S)

^{EXCEL PRECISION (SINGAPORE) PTE LTD}

^{NG BON BONK}

^30,000

SUBSIDIARY(IES)

No Participation In Our Database

PAYMENT HISTORY AND EXPERIENCES

^{Trade Morality: VERAGE}

^{Liquidity : SUFFICIANT}

^{Payments : REGULAR}

^{Trend : LEVEL}

^{Financial Situation: AVERAGE}

FINANCIAL ELEMENTS

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

^{Date Account Lodged: 31/08/2007}

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

^{Number of weeks: 52 52}

^{Consolidation Code: COMPANY COMPANY}

^{--- ASSETS}

^{Tangible Fixed Assets: 1,801,534 1,904,967}

^{Total Fixed Assets: 1,801,534 1,904,967}

^{Inventories: 1,498,116 1,885,555}

^{Receivables: 449,497 948,514}

^{Cash,Banks, Securitis: 334,540 371,417}

^{Other current assets: 112,091 410,337}

^{Total Current Assets: 2,394,244 3,615,823}

^{TOTAL ASSETS: 4,195,778 5,520,790}

^{--- LIABILITIES}

^{Equity capital: 1,000,000 1,000,000}

^{Profit & lost Account: -43,217 -34,115}

^{Total Equity: 956,783 965,885}

^{Long Term Loans: 1,237,716 1,330,586}

^{L/T deffered taxes: 1,500 7,000}

^{Other long term Liab.: 103,032 129,184}

^{Total L/T Liabilities: 1,342,248 1,466,770}

^{Trade Creditors: 321,975 733,607}

^{Prepay. & Def. charges: 43,367 387,114}

^{Short term liabilities: 26,152 25,745}

^{Due to Bank: 1,311,280 1,471,110}

^{Provisions: 9,200 54,300}

^{Other Short term Liab.: 184,773 416,259}

^{Total short term Liab.: 1,896,747 3,088,135}

^{TOTAL LIABILITIES: 3,238,995 4,554,905}

^{--- PROFIT & LOSS ACCOUNT}

^{Net Sales 10,216,844 7,854,516}

^{Purchases,Sces & Other Goods: 8,896,565 6,810,535}

^{Gross Profit: 1,320,279 1,043,981}

^{Result of ordinary operations 203,894 186,279}

^{NET RESULT BEFORE TAX: 27,887 23,119}

^{Tax : 36,989 16,322}

^{Net income/loss year: -9,102 6,797}

^{Interest Paid: 176,007 163,160}

^{Depreciation: 103,443 105,756}

^{Directors Emoluments: 142,988 142,988}

^{Wages and Salaries: 229,422 251,669}

^{Financial Income: 13,460 7,236}

RATIOS

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

^{Turnover per employee: 928804.00 714046.91}

^{Net result / Turnover(%): -0.00 0.00}

^{Fin. Charges / Turnover(%): 0.02 0.02}

^{Stock / Turnover(%): 0.15 0.24}

^{Net Margin(%): -0.09 0.09}

^{Return on Equity(%): -0.95 0.70}

^{Return on Assets(%): -0.22 0.12}

^{Net Working capital: 497497.00 527688.00}

^{Cash Ratio: 0.18 0.12}

^{Quick Ratio: 0.41 0.43}

^{Current ratio: 1.26 1.17}

^{Receivables Turnover: 15.84 43.47}

^{Leverage Ratio: 3.39 4.72}

^{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 DECLINING BY 0.94% FROM S$965,885 IN FY 2005 TO S$956,783 IN FY 2006. THIS WAS DUE TO HIGHER ACCUMULATED LOSSES OF S$-43,217 (2005: S $-34,115); A RISE OF 26.68% FROM THE PRIOR FINANCIAL YEAR.}

^LEVERAGE:

^{IN THE SHORT-TERM, SUBJECT WAS LARGELY FINANCED BY AMOUNT DUE TO BANKS WHICH MADE UP 69.13% (2005: 47.63%) OF THE TOTAL CURRENT LIABILITIES AND AMOUNTED TO S$127,205,313 (2005: S$125,268,332).}

^{IN THE LONG-TERM, SUBJECT WAS LARGELY FINANCED BY TERM LOANS WHICH AMOUNTS TO S$1,237,716 (2005: S$1,330,586).}

^{IN ALL, LEVERAGE RATIO FELL FROM 4.72 TO 3.39 TIMES DUE TO A GREATER FALL IN TOTAL LIABILITIES THAN TOTAL EQUITY.}

^LIQUIDITY:

^{IN GENERAL, SUBJECT'S LIQUIDITY SITUATION WAS PASSABLE AS SEEN FROM THE NET WORKING CAPITAL AND LIQUIDITY RATIOS. CURRENT RATIO ROSE TO 1.26 TIMES, FROM 1.17 TIMES AND QUICK RATIO FELL TO 0.41 TIMES FROM 0.43 TIMES IN FY 2005.}

^{NET WORKING CAPITAL FELL BY 5.72% FROM S$527,688 IN FY 2005 TO S $497,497.}

^{PROFITABILITY:}

^{REVENUE POSTED AN INCREASE OF 30.07% FROM S$7,854,516 IN FY 2005 TO S $10,216,844 BUT NET PROFIT DROPPED BY 2.34 TIMES TO S$-9,102 (2005: S $6,797). THIS COULD BE DUE TO LOWER GROSS MARGIN OF 12.92% IN FY 2006 (2005: 13.29%). HENCE, NET MARGIN FELL TO -0.09% (2005: 0.09%).}

^{DEBT SERVICING:}

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

^{HOWEVER IT IS NOTED THAT SUBJECT INCURRED NET LOSSES FOR THE FINANCIAL YEAR WHICH NEED CAUTION.}

^{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 16/03/1988 AS A LIMITED EXEMPT PRIVATE COMPANY AND IS TRADING UNDER ITS PRESENT NAMESTYLE AS "NGK MACHINE TOOLS (S) PTE LTD".}

^{AS AT 12/02/2008, THE COMPANY HAS 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 & CORPORATE REGULATORY AUTHORITY (ACRA) TO BE PRINCIPALLY ENGAGED IN THE BUSINESS OF:}

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

^{2) WHOLESALE ON A FEE OR CONTRACT BASIS (EG COMMISSION AGENCIES)}

^{DURING THE FINANCIAL YEAR UNDER REVIEW, THE PRINCIPAL ACTIVITIES OF THE COMPANY CONSIST OF THE TRADING OF USED MACHINE TOOLS AND RELATED ACCESSORIES AND RENTAL OF MACHINERIES.}

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

^{SUBJECT ENGAGES IN THE FOLLOWING ACTIVITIES:}

^{* IMPORT AND EXPORT OF USED MACHINERY (EG.WIRE-CUT MACHINES, EDM MACHINE AND LATHE MACHINES)}

^{THEIR PRODUCTS COMPRISE A FULL RANGE OF MACHINERY, ACCESSORIES AND CAD/CAM SOFTWARE FOR EDM, PRECISION METAL MACHINING, TOOLS AND DIES, AND MOLD-MAKING PROCESS.STOCK MORE THAN 100 MACHINES OF VARIOUS KINDS}

^{AT ANY MOMENT OF TIME.}

^{PRODUCTS DEALINGS:}

^{PRODUCTS AND SERVICES}

^{* BUY & SELL OF USED MACHINES}

^{* CNC WIRE-CUT EDM MACHINE, ACCESSORIES & SPARE PARTS}

^{* WATER PAPER FILTER WIRE-CUT MACHINES}

^{* SURFACE TREATMENT SOLUTION}

^{* AUTO FILTERING SYSTEM FOR WIRE-CUT MACHINES}

^{* SMALL-HOLE DRILLING EDM MACHINES & ACCESSORIES}

^{* DRILL GUIDE BUSH, RENEWABLE GUIDE BUSH}

^{* TOOLS & ACCESSORIES FOR MILLING, TURNING, GRINDING MACHINES}

^{* WIRE-CUT BRASS WIRE, Æ0.1-Æ0.3 MM}

^{* ANTI-RUST & RUST REMOVER SOLUTION}

^{* IRON EXCHANGE RESIN}

^{* CAD/CAM SYSTEM FOR CNC WIRE-CUT MACHINES}

^{* BRASS & COPPER TUBING, Æ0.2-Æ6.0 MM (OD)}

^{* DRILL ADAPTORS, TAP ADAPTORS, MULTI DRILL HEADS}

^ACCESSORIES

^{* FILTER ELEMENT}

^{* COPPER TAPPING ELECTRODE}

^{* WATER NOZZLE}

^{* FELT PAD (BIG)}

^{* POWER FEED CONTACT}

^{* FILTER}

^{* BRASS WIRE}

^{* FELT PAD (SMALL)}

^{* BRASS TUBING}

^{* COPPER TUBING}

^{* COLLET SET}

^{* WIRE DIE GUIDE}

^{* RUST REMOVER}

^{* PIPE GUIDE}

^MACHINES

^{USED MACHINES}

^{* AIR COMPRESSOR MACHINE}

^{* BORING MACHINE}

^{* CMM MEASURING MACHINE}

^{* CNC TURNING CENTRE}

^{* CNC AUTO LATHE/LATHE}

^{* CNC DRILL & TAP}

^{* CNC EDM}

^{* CNC TOOL & CUTTER GRINDER MC}

^{* CNC VERTICAL/HOR MACHINING CENTRE}

^{* CNC WIRE CUT}

^{* CONVENTIONAL LATHE}

^{* CUTTING MACHINE}

^{* CYLINDRICAL GRINDER}

^{* DRILLING}

^{* EDM/WIRE EDM}

^{* HORIZONTAL & VERTICAL MILLING/MILLING MACHINE}

^{* HORIZONTAL MACHINING CENTRE}

^{* HORNING}

^{* INJECTION MOULDING MACHINE}

^{* JIG GRINDING MACHINE/CENTERLESS GRINDER}

^{* NC UNIVERSAL MILLING MACHINE}

^{* OPTICAL PROFILE GRINDERS}

^{* PRESS}

^{* SAND BLASTING MACHINE}

^{* SUPER DRILL}

^{* SURFACE GRINDER/GRINDING MACHINE/CG}

^{* TURRET PUNCH PRESS}

^{* VERTICAL MACHINING CENTRE}

^{AGENTS FOR:}

^{* OKI ELECTRICAL CABLE CO.LTD (JP)}

^{* CHING HUNG MACHINERY & ELECTRIC INDUSTRIAL CO.LTD (TW)}

^{TRADE NAMES:}

^{* OKI BRASS WIRES (JP)}

^{* CHMER ELECTRIC DISCHARGE MACHINE (TW)}

^{IMPORT COUNTRIES:}

^{* MALAYSIA}

^{* INDONESIA}

^{* THAILAND}

^{* TAIWAN}

^{* CHINA}

^{* JAPAN}

^{* SRI LANKA}

^{* INDIA}

^{* PAKISTAN}

^{* MIDDLE EAST}

^{* EUROPE}

^{* UNITED STATES OF AMERICA}

^{INDUSTRIES SERVED:}

^{* TOOL ROOMS}

^{* PRECISION MACHINING WORKSHOPS}

^{* MOLDING AND STAMPING}

^{FROM THE TELE-INTERVIEW CONDUCTED, THE FOLLOWING WAS GATHERED:}

^{THE SUBJECT DOES EXPORTS AND SELLS LOCALLY.}

^{NUMBER OF EMPLOYEES:}

^{* COMPANY - 2008: 11}

^{NO OTHER TRADE INFORMATION IS AVAILABLE.}

^{REGISTERED AND BUSINESS ADDRESS:}

^{60 BENOI ROAD}

^{SINGAPORE 629906}

^{- RENTED PREMISE}

^{- OWNED BY ENGINEERING MANUFACTURING SERVICES (S) PTE. LTD.}

^{- DATE OF CHANGE OF ADDRESS: 29/09/2003}

^{- MORE THAN 10,000 SQUARE FEET OF SHOP FLOOR AREA}

^WEBSITE:

^{http://www.ngkusedmachine.com}

^EMAIL:

^{sales@ngkmt.ngkservers.com}

MANAGEMENT

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

^{1) NG GEOK KWEE, A SINGAPOREAN}

^{- OTHER DIRECTORSHIP(S) IN OUR DATABASE:}

^{PSN FOOD SERVICES PTE LTD}

^{2) TAY SIEW LAY, A SINGAPOREAN}

^{- HOLDS NO OTHER DIRECTORSHIP 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