MIRA INFORM REPORT

Report Date :

14.07.2008

IDENTIFICATION DETAILS

Name :	BAOSTEEL SINGAPORE PTE LTD
Registered Office :	^7 Temasek Boulevard ^#40-02/03 ^Suntec Tower One ^038987
Country :	Singapore
Financials (as on) :	31.12.2007
Date of Incorporation :	^25.02.1997
Com. Reg. No.:	^199701206Z
Legal Form :	^Pte Ltd
Line of Business :	Bank/Financial Holding Companies; Holding Companies

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

BAOSTEEL SINGAPORE PTE LTD

Line Of Business 

BANK/FINANCIAL HOLDING COMPANIES; HOLDING COMPANIES

Parent Company

SHANGHAI BAOSTEEL INTERNATIONAL

(PERCENTAGE OF SHAREHOLDINGS: 100.00%)

Financial Elements

FY 2007

COMPANY

Sales : US$ 624,745,871

Networth : US$ 33,679,152

Paid-Up Capital : US$ 980,001

Net result : US$ 13,844,434

Net Margin(%) : 2.22

Return on Equity(%) : 41.11

Leverage Ratio : 1.84

COMPANY IDENTIFICATION

^{Subject Company : BAOSTEEL SINGAPORE PTE LTD}

^{Former Name : -}

^{Business Address : 7 TEMASEK BOULEVARD}

^#40-02/03

^{SUNTEC TOWER ONE}

^{Town : SINGAPORE}

^{Postcode : 038987}

^{Country : Singapore}

^{Telephone : 6333 6818}

^{Fax : 6333 6819}

^{ROC Number : 199701206Z}

^{Reg. Town : -}

SUMMARY

^{All amounts in this report are in : USD unless otherwise stated}

^{Legal Form : Pte Ltd}

^{Date Inc. : 25/02/1997}

^{Previous Legal Form : -}

^{Summary year : 31/12/2007}

^{Sales : 624,745,871}

^{Networth : 33,679,152}

^{Capital : -}

^{Paid-Up Capital : 980,001}

^{Employees : -}

^{Net result : 13,844,434}

^{Share value : 1}

^{Auditor : ERNST & YOUNG LLP}

^{BASED ON ACRA'S RECORD}

^{NO.OF SHARES CURRENCY AMOUNT}

^{ISSUED ORDINARY 1,419,036 SGD 1,419,036.00}

^{PAID-UP ORDINARY - SGD 1,419,036.00}

REFERENCES

^{Litigation : No}

^{Company status : TRADING}

^{Started : 25/02/1997}

PRINCIPAL(S)

^{QIU CHENGZHI F5522963P Managing Director}

DIRECTOR(S)

^{QIU CHENGZHI F5522963P Director}

^{Appointed on : 25/02/1997}

^{Street : 62 BAYSHORE ROAD}

^#08-03

^{PEARL TOWER}

^{Town: SINGAPORE}

^{Postcode: 469983}

^{Country: Singapore}

^{QIU CHENGZHI F5522963P Managing Director}

^{Appointed on : 13/03/1997}

^{Street : 62 BAYSHORE ROAD}

^#08-03

^{PEARL TOWER}

^{Town: SINGAPORE}

^{Postcode: 469983}

^{Country: Singapore}

^{TEO HUI YONG S0214050J Company Secretary}

^{Appointed on : 16/06/2006}

^{Street : 149 HOUGANG STREET 11}

^#10-120

^{MINTON RISE CONDOMINIUM}

^{Town: SINGAPORE}

^{Postcode: 530149}

^{Country: Singapore}

^{HUANG WEILIANG P6591534 Director}

^{Appointed on : 09/04/2008}

^{Street : 3509 TONG JI ROAD BAOSHAN DISTRICT}

^{Town: SHANGHAI}

^{Postcode: 201900}

^{Country: China}

FORMER DIRECTOR(S)

^{WEE WOON HONG S1681953J}

^{LIM GEOK MUI S7106005E}

^{QUAN PING P0318881}

^{HE WENBO P2752798}

^{TEO SIEW SUAN S1474175E}

ACTIVITY(IES)

^{STEEL PRODUCTS Code:20410}

^{TRADING COMPANIES Code:22190}

^{IMPORTERS And EXPORTERS Code:11760}

^{BASED ON ACRA'S RECORD}

^{1) BANK/FINANCIAL HOLDING COMPANIES; HOLDING COMPANIES}

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

CHARGES

^{Date : 23/02/2004}

^{Comments : CHARGE NO : C200400849,C200400846}

^{AMOUNT SECURED : 0.00 AND ALL MONIES OWING}

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

PREMISES/PROPERTY INFORMATIONS

^{Date : 11/07/2008}

^{Tax rate : 10}

^{Site Address : 7 TEMASEK BOULEVARD}

^#40-02

^{SUNTEC TOWER ONE}

^{Postcode : 038987}

^{Country : Singapore}

^{Annual Value : 290,000}

^{Date : 11/07/2008}

^{Tax rate : 10}

^{Site Address : 7 TEMASEK BOULEVARD}

^#40-03

^{SUNTEC TOWER ONE}

^{Postcode : 038987}

^{Country : Singapore}

^{Annual Value : 406,000}

* 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

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

SHAREHOLDERS(S)

^{SHANGHAI BAOSTEEL INTERNATIONAL 1,419,036 Company}

^{Street : 1813 MU DAN JIANG ROAD}

^{BAOSHAN DISTRICT}

^{Town: SHANGHAI}

^{Postcode: 201900}

^{Country: China}

FORMER SHAREHOLDER(S)

^{LIM GEOK MUI 1}

^{QIU CHENGZHI 1}

^{CHINA BAO STEEL GROUP INTERNATIONAL 1,419,036}

HOLDING COMPANY

^{SHANGHAI BAOSTEEL INTERNATIONAL UF32609M % : 100}

SUBSIDIARY(IES)

No Participation In Our Database

PAYMENT HISTORY AND EXPERIENCES

^{Trade Morality : AVERAGE}

^{Liquidity : SUFFICIENT}

^{Payments : REGULAR}

^{Trend : UPWARD}

^{Financial Situation : AVERAGE}

FINANCIAL ELEMENTS

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

^{Date Account Lodged: 22/04/2008}

^{Balance Sheet Date: 31/12/2007 31/12/2006}

^{Number of weeks: 52 52}

^{Consolidation Code: COMPANY COMPANY}

^{--- ASSETS ---}

^{Intangible Fixed Assets: 43,631 46,987}

^{Tangible Fixed Assets: 4,740,847 4,908,140}

^{Total Fixed Assets: 4,784,478 4,955,127}

^{Receivables: 23,418,385 13,011,388}

^{Cash,Banks, Securitis: 67,222,392 21,173,705}

^{Other current assets: 117,653 92,107}

^{Total Current Assets: 90,758,430 34,277,200}

^{TOTAL ASSETS: 95,542,908 39,232,327}

^{--- LIABILITIES ---}

^{Equity capital: 980,001 980,001}

^{Profit & lost Account: 32,699,151 18,854,717}

^{Total Equity: 33,679,152 19,834,718}

^{Reserve for pensions: 40,999 40,999}

^{Total L/T Liabilities: 40,999 40,999}

^{Trade Creditors: 56,010,886 16,209,181}

^{Advanced payments: 3,828,536 1,655,522}

^{Provisions: 1,889,000 1,199,681}

^{Other Short term Liab.: 66,837 226,143}

^{Prepay. & Def. charges: 27,498 66,083}

^{Total short term Liab.: 61,822,757 19,356,610}

^{TOTAL LIABILITIES: 61,863,756 19,397,609}

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

^{Net Sales 624,745,871 415,770,493}

^{Purchases,Sces & Other Goods: 576,078,846 389,636,774}

^{Gross Profit: 48,667,025 26,133,719}

^{NET RESULT BEFORE TAX: 15,750,755 8,798,386}

^{Tax : 1,906,321 1,225,369}

^{Net income/loss year: 13,844,434 7,573,017}

^{Interest Paid: 113,733 639,868}

^{Depreciation: 388,021 276,947}

^{Wages and Salaries: 1,601,450 1,060,577}

^{Financial Income: 1,336,608 1,135,360}

RATIOS

^{31/12/2007 31/12/2006}

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

^{Net Margin(%): 2.22 1.82}

^{Return on Equity(%): 41.11 38.18}

^{Return on Assets(%): 14.49 19.30}

^{Net Working capital: 28935673.00 14920590.00}

^{Cash Ratio: 1.09 1.09}

^{Quick Ratio: 1.47 1.77}

^{Current ratio: 1.47 1.77}

^{Receivables Turnover: 13.49 11.27}

^{Leverage Ratio: 1.84 0.98}

^{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}

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

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

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

FINANCIAL COMMENTS

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

^{NET WORTH:}

^{THE BALANCE SHEET WAS FAIRLY SOUND WITH NET WORTH SURGING BY 73.43% TOTALLING US$33,679,152 (2006: US$19,834,718). THIS WAS CONTRIBUTED BY HIGHER ACCUMULATED PROFITS OF US$32,699,151 (2006: S$18,854,717).}

^LEVERAGE:

^{IN THE SHORT-TERM, SUBJECT WAS LARGELY FINANCED BY TRADE CREDITORS WHICH MADE UP 90.60% (2006: 83.74%) OF THE TOTAL CURRENT LIABILITIES AND AMOUNTED TO US$56,010,886 (2006: US$16,209,181). THE BREAKDOWN WAS AS FOLLOWS:}

^{*TRADE PAYABLES - 2007: US$2,580,135 (2006: US$1,480,540)}

^{*IMMEDIATE HOLDING COMPANY - 2007: US$48,832,073 (2006: US$11,033,384)}

^{*RELATED COMPANIES - 2007: US$4,598,678 (2006: US$3,695,257)}

^{LEVERAGE RATIO ROSE TO 1.84 TIMES (2006: 0.98 TIMES) AS A RESULT OF A MORE THAN PROPORTIONATE RISE IN TOTAL LIABILITIES THAN IN 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:

^{THE OVERALL LIQUIDITY OF THE COMPANY WAS FAIRLY HEALTHY. NET WORKING CAPITAL ROSE BY 93.93% TO US$28,935,673 (2006: US$14,920,590).}

^{BOTH CURRENT AND QUICK RATIOS DECLINED BUT WERE STILL SUFFICIENT AT 1.47 TIMES (2006: 1.77 TIMES).}

^{CASH AND CASH EQUIVALENTS ROSE SHARPLY BY 2.17 TIMES TO US$67,222,392 (2006: US$21,173,705) AND COMPRISED OF:}

^{*CASH AT BANK AND IN HAND - 2007: US$3,422,392 (2006: US$1,073,705)}

^{*SHORT TERM DEPOSITS - 2007: US$63,800,000 (2006: US$20,100,000)}

^{PROFITABILITY:}

^{REVENUE FOR FY2007 ROSE BY 50.26% ACCOUNTING FOR US$624,745,871 (2006: US$415,770,493). THIS WAS IN TANDEM WITH THE NET INCOME, WHICH IMPROVED BY 82.81% AMOUNTING TO US$13,844,434 (2006: US$7,573,017). AS A RESULT, NET MARGIN STOOD HIGHER AT 2.22% (2006: 1.82%).}

^{DEBT SERVICING:}

^{DEBT SERVICING PROBLEMS WERE UNLIKELY TO BE ANTICIPATED IN VIEW OF THE STRONG NET WORTH AND SUFFICIENT LIQUIDITY, AND IF TRADE RECEIVABLES WERE FORTHCOMING.}

^{IN ADDITION, AVERAGE COLLECTION PERIOD WAS RELATIVELY THE SAME FOR BOTH YEARS AT 13 DAYS (2006: 11 DAYS).}

BACKGROUND/OPERATION

^{THE SUBJECT WAS INCORPORATED IN THE REPUBLIC OF SINGAPORE ON 25/02/1997 AS A PRIVATE LIMITED COMPANY AND IS TRADING UNDER ITS PRESENT NAMESTYLE AS "BAOSTEEL SINGAPORE PTE LTD".}

^{THE COMPANY HAS AN ISSUED AND PAID-UP CAPITAL OF 1,419,036 SHARES OF A VALUE OF S$1,419,036.}

^{PRINCIPAL ACTIVITIES:}

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

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

^{1) BANK/FINANCIAL HOLDING COMPANIES; HOLDING COMPANIES}

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

^{THE COMPANY IS LISTED IN THE SINGAPORE LOCAL DIRECTORY UNDER THE CLASSIFICATION OF: HOLDING COMPANIES.}

^{DURING THE FINANCIAL YEAR(S), UNDER REVIEW, THE PRINCIPAL ACTIVITIES OF THE COMPANY ARE THOSE RELATING TO THE TRADING OF STEEL PRODUCTS.}

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

^BACKGROUND:

^{SUBJECT WAS ESTABLISHED IN SINGAPORE ON FEBRUARY 25, 1997. AS A WHOLLY-OWNED SUBSIDIARY OF BAOSHAN IRON AND STEEL CO., LTD, ONE OF THE WORLD'S LEADING IRON AND STEEL MANUFACTURERS, THE COMPANY IS FOCUSING ON THE TRADE OF ALL KINDS OF STEEL AND STEEL-RELATED PRODUCTS. THEY MAINLY SUPPLY HIGH-TECH AND HIGH VALUE-ADDED STEEL PRODUCTS, INCLUDING CARBON STEEL, STAINLESS STEEL AND SPECIAL STEEL, IN THE SERIES OF COLD ROLLED SHEETS OR COILS, HOT ROLLED PLATES OR COILS, LONG PRODUCTS AND TUBULAR PRODUCTS}

^{APART FROM THE HEAD OFFICE IN SINGAPORE, THE COMPANY ALSO SET UP REPRESENTATIVE OFFICES IN VIETNAM, THAILAND, INDIA AND SHANGHAI.}

^{SUBJECT ENGAGES IN THE FOLLOWING ACTIVITIES:}

^{* REGIONAL OFFICE FOR BAOSTEEL'S IRON AND STEEL}

^{* DOMESTIC AND INTERNATIONAL WHOLESALE AND TRADING COMPANY OF IRON}

^{AND STEEL PRODUCTS}

^{PRODUCTS AND BUSINESS:}

^{* CARBON STEEL}

^{* STAINLESS STEEL}

^{* SPECIAL STEEL}

^{MARKET COVERAGE:}

^{* SINGAPORE}

^{* MALAYSIA}

^{* INDONESIA}

^{* PHILIPPINES}

^{* THAILAND}

^{* VIETNAM}

^{* BRUNEI}

^{* INDIA}

^{* PAKISTAN}

^{* BANGLADESH}

^{INDUSTRIES SERVED:}

^{* AUTOMOBILE}

^{* HOUSEHOLD APPLIANCES}

^{* OIL EXPLORATION}

^{* OIL AND GAS TRANSMISSION}

^{* SHIPBUILDING}

^{* BOILER AND PRESSURE VESSEL}

^{* ELECTRICAL EQUIPMENTS}

^{* FOOD AND BEVERAGE PACKAGING}

^{* CONSTRUCTION}

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

^{* SINGAPORE CHINESE CHAMBER OF COMMERCE AND INDUSTRIES}

^{TERMS OF PAYMENT:}

^{* TRADE RECEIVABLES: 60 DAYS}

^{* TRADE PAYABLES: 60 DAYS}

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

^ACTIVITIES:

^{* IMPROT AND EXPORT OF STEEL PRODUCTS}

^{NO OTHER TRADE INFORMATION WAS AVAILABLE}

^{ACCORDING TO THE FINANCIAL STATEMENTS FOR FY2005, THE IMMEDIATE AND ULTIMATE HOLDING COMPANIES ARE BAOSHAN IRON & STEEL CO. LTD AND SHANGHAI BAOSTEEL GROUP CORPORATION RESPECTIVELY. BOTH COMPANIES ARE INCORPORATED IN THE PEOPLE'S REPUBLIC OF CHINA.}

^{ACCORDING TO THE ACRA DATED 09/07/2008, THE HOLDING COMPANY IS}

^{"SHANGHAI BAOSTEEL INTERNATIONAL ECONOMIC & TRADING CO., LTD", A}

^{COMPANY INCORPORATED IN THE PEOPLE'S REPUBLIC OF CHINA.}

^{REGISTERED AND BUSINESS ADDRESS:}

^{7 TEMASEK BOULEVARD}

^#40-02/03

^{SUNTEC TOWER ONE}

^{SINGAPORE 038987}

^{DATE OF CHANGE OF ADDRESS: 02/05/2006}

^{- OWNED PREMISE}

^{OVERSEAS ADDRESS:}

^{SHANGHAI REPRESENTATIVE OFFICE}

^{ADD: 17D, FIRST TRADER TOWER, 985 DONG FANG ROAD, PUDONG, SHANGHAI,}

^{CHINA 200122}

^{TEL: (86) 21-5081 5863}

^{FAX: (86) 21-5081 5181}

^{VIETNAM REPRESENTATIVE OFFICE}

^{ADD: SAIGON RIVERSIDE OFFICE CENTER, UNIT 908 2A-4A TON DUC THANG}

^{STREET, HO CHI MINH CITY, VIETNAM}

^{TEL: (84) 8-9100126}

^{FAX: (84) 8-9100124}

^{THAILAND REPRESENTATIVE OFFICE}

^{ADD: UNIT 5, 15F CAPITAL TOWER, ALL SEASONS PLACE, 87/2 WIRELESS ROAD,}

^{LUMPINI PATHUMEWAN, BANGKOK 10330, THAILAND}

^{TEL: (66) 2-6368485}

^{FAX: (66) 2-2348989}

^WEBSITE:

^{http://www.baosteel.sg/baoSingapore/index_en.jsp}

^{http://www.baosteel.com/group_e/index.asp}

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

^E-MAIL:

^{chengzhi@baosteel.com.sg}

^{webman@baosteel.com}

MANAGEMENT

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

^{(1) QIU CHENGZHI, A CHINESE}

^{- BASED IN SINGAPORE}

^{(2) HUANG WEILIANG, A CHINESE}

^{- BASED IN CHINA}

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.

OVERVIEW OF SINGAPORE

PAST PERFORMANCE

SINGAPORE’S ECONOMY GREW BY 5.4% IN 4Q 2007, SLOWER THAN THE 9.5% GROWTH IN 3Q 2007. GROW MOMENTUM WAS LED BY CONSTRUCTION AND FINANCIAL SERVICES. FOR THE WHOLE OF 2007, THE ECONOMY GREW BY 7.7%, DOWN FROM 8.2% IN 2006.

THE MANUFACTURING SECTOR ROSE BY 0.2% IN 4Q 2007, SLOWER THAN THE 11.0% IN 3Q 2007. THE SMALL GROWTH WAS ATTRIBUTED TO A 28.0% CONTRACTION IN THE BIOMEDICAL MANUFACTURING SECTOR. ON THE OTHER HAND, ELECTRONICS, CHEMICALS, PRECISION ENGINEERING AND TRANSPORT ENGINEERING SECTOR PERFORMED BETTER. OVERALL, THE MANUFACTURING SECTOR POSTED A 5.8% GROWTH IN 2007, DOWN FROM 12.0% IN 2006.

THE FINANCIAL SERVICES SECTOR ROSE SIGNIFICANTLY BY 16% IN 4Q 2007, FOLLOWING A 20% GROWTH IN THE PREVIOUS QUARTER. MOST SECTORS EXPERIENCE STRONG EXPANSION WITH THE EXCEPTION OF STOCK BROKING AND FUND MANAGEMENT ACTIVITIES WHICH HAVE SLOWED DOWN. OVERALL, THE FINANCIAL SERVICES SECTOR POSTED A 17% GROWTH IN 2007, HIGHER THAN 11.0% IN 2006.

THE CONSTRUCTION SECTOR REGISTERED A STRONG GROWTH. THE SECTOR GREW BY 24%, FOLLOWING 20% GAIN IN 3Q 2007. GROWTH MOMENTUM FOR THE WHOLE YEAR GREW 20%, ITS FASTEST GROWTH SINCE 1996.

THE WHOLESALE AND RETAIL TRADE SECTOR GREW BY 6.0% IN 4Q 2007, SLOWER THAN THE 6.8% GROWTH IN 3Q 2007. NON-OIL RE-EXPORTS SAW GROWTH REDUCED FROM 9.0% IN 3Q 2007 TO 7.0% IN 4Q 2007. RETAIL SALES FELL BY 2.5% IN 4Q 2007, FOLLOWING A 1.5% GROWTH IN 3Q 2007. OVERALL, THE WHOLESALE AND RETAIL TRADE SECTOR POSTED A 7.3% GROWTH IN 2007, DOWN FROM 10.0% IN 2006.

THE TRANSPORT AND STORAGE SECTOR ROSE BY 5.4% IN 4Q 2007, FROM 5.0% IN 3Q 2007. HIGHER GROWTH IN THE SEA TRANSPORT SEGMENT WAS OFFSET BY SLOWER GROWTH IN THE AIR TRANSPORT SEGEMENT. OVERALL, THE TRANSPORT AND STORAGE SECTOR POSTED A 5.1% GROWTH IN 2007, UP FROM 4.7% IN 2006.

THE HOTELS AND RESTAURANTS SECTOR GREW BY A SMALLER 2.5% FROM 4.9% IN 3Q 2007. VISITOR ARRIVALS ROSE 5.5% IN 4Q 2007, SIMILAR TO 5.4% RISE IN 3Q 2007. HOWEVER, THE AVERAGE OCCUPANCY RATE OF HOTELS DIPPED TO 86.0% IN 4Q 2007 FROM 88.0% IN 4Q 2006. VISITOR ARRIVALS ROSE 5.4% TO REACH A RECORD OF 10.3 MILLION IN 2007. OVERALL, THE HOTELS AND RESTAURANTS SECTOR POSTED A 4.4% GROWTH IN 2007, DOWN FROM 4.8% IN 2006.

THE INFORMATION AND COMMUNICATIONS SECTOR ROSE 6.1% IN 4Q 2007, SLIGHTLY SLOWER THAN THE 6.6% IN 3Q 2007. BOTH THE TELECOMMUNICATIONS AND IT SERVICES SEGMENTS REMAINED HEALTHY DURING THE QUARTER. FOR THE TELECOMMUNICATIONS SEGMENT, THE GROWTH OF INTERNATIONAL TELEPHONE CALLS DURATION AND NUMBER OF SUBSCRIBERS FOR BOTH MOBILE PHONE SERVICE AND BROADBAND INTERNET REMAINED STRONG. OVERALL, THE INFORMATION AND COMMUNICATIONS SECTOR POSTED A 6.3% GROWTH IN 2007, UP FROM 4.6% IN 2006.

THE BUSINESS SERVICES SECTOR EXPANDED BY 8.7%, HIGHER THAN THE 7.5% GAIN IN 3Q 2007. GROWTH WAS HEALTHY ACROSS ALL SEGMENTS, WITH GOOD PERFORMANCES IN THE BUSINESS REPRESENTATIVE OFFICES AND REAL ESTATE SEGMENTS. OVERALL, THE BUSINESS SERVICES SECTOR POSTED A 7.8% GROWTH IN 2007, UP FROM 6.9% IN 2006.

NEWS

SINGAPORE ECONOMY GROWS 7.2% ON STRONG SHOWING IN MANUFACTURING

SINGAPORE’S ECONOMY TURNED OUT TO BE SURPRISINGLY RESLIENT IN THE FIRST QUARTER, EASILY BEATING MARKET EXPECTATIONS WITH STRONG GROWTH OF 7.2%.

THE ADVANCE ESTIMATES ISSUED BY THE MINISTRY OF TRADE AND INDUSTRY (MTI) REPORTED YESTERDAY WERE A MARKED IMPROVEMENT OVER THE 5.4% POSTED IN THE FINAL QUARTER OF LAST YEAR. EARLIER REPORTS HAD SUGGESTED MARKET EXPECTATIONS OF 5.9% GROWTH. ON A SEASONALLY ADJUSTED ANNUALISED BASIS, THE ECONOMY GREW AT A BREAKNECK RATE OF 16.9% QUARTER-ON-QUARTER. IT SHRANK 4.8% IN 4Q 2007.

HOWEVER, ECONOMISTS DO NOT BELIEVE THE STRONG PERFORMANCE SIGNIFIES AN UPTREND FOR THE REST OF THE YEAR. THEY POINT TO A POTENTIAL RECESSION IN THE UNITED STATES AND RISING GLOBAL INFLATION.

MANUFACTURING AND SERVICES WERE CONTRIBUTORS TO THE BETTER-THAN-EXPECTED FIRST QUARTER GROWTH.

MANUFACTURING IS ESTIMATED TO HAVE EXPANDED BY 13.2% IN THE FIRST QUARTER, COMPARED TO A SMAL 0.2% RISE IN THE PREVIOUS THREE MONTHS. IT WAS ALSO CONSIDERABLY HIGHER THAN THE 3.9% REGISTERED IN 1Q 2007.

THIS WAS LARGELY DUE TO A SURGE IN BIOMEDICAL MANUFACTURING OUTPUT. THE REST OF THE MANUFACTURING CLUSTERS ALSO ENJOYED BETTER PERFORMANCES

WITH THE EXCEPTION OF TRANSPORT ENGINEERING AND PRECISION ENGINEERING CLUSTER WHO ENJOY MODERATE GROWTH.

SERVICES INDUSTRIES GROW 7.6%, SIMILAR TO THE 7.7% IN 4Q 2007 AS WELL AS IN 1Q 2007. FINANCIAL SERVICES CONTINUED TO BE THE FASTEST-GROWING AMONG THE SERVICES SECTORS.

HOWEVER, THE FIGURE FOR THE SLOWING CONSTRUCTION SECTOR WAS LESS ROSY WITH GROWTH SLIPPING TO 14.6% FROM 24.3% IN 4Q 2007.

UNITED OVERSEAS BANK ECONOMIST HO WOEI CHEN SAID THIS WAS DISAPPOINTING,

AFTER THREE QUARTERS OF GROWTH ABOVE 20.0%. BUT SHE STILL EXPECTED THE SECTOR TO CONTRIBUTE TO GROWTH THIS YEAR, ON THE BACK OF INFRASTRCTURE PROJECTS SUCH AS THE INTEGRATED RESORTS AND THE PROPOSED SPORTS HUB IN KALLANG.

ECONOMISTS WERE SURPRISED BY WHAT THEY SAID AMOUNTED TO A CONTRACTION IN THE INDUSTRY BUT THEY REMAINED CONFIDENT THAT GROWTH WAS STILL HEALTHY AND IN LINE WITH THEIR FORECASTS FOR THE YEAR, WHICH RANGED FROM 10.0%

TO 25.0%.

CIMG-GK ECONOMIST SOGN SENG WUN SAID THAT RISING INFLATION, ESPECIALLY FOR FOOD PRICES, WILL BE A MAJOR CONCERN. “PEOPLE ARE FOCUSING ON ISSUES SUCH AS THE RISING PRICE OF RICE AND THIS IS SOMETHING THAT COULD PERSIST FOR THE REST OF THE YEAR”.

NONE OF THE ECONOMISTS INTERVIEWED REVISE FULL-YEAR GROWTH FORECASTS WHICH RANGE FROM 4.7% TO 5.5%. MTI HAS FORECAST A RANGE OF 4.0% TO 6.0% FOR THE YEAR.

OUTLOOK

AFTER THE LAST REVIEW IN NOVEMBER 2007, THE OUTLOOK FOR EXTERNAL DEMAND IN 2008 HAS WORSENED AND THERE ARE INCREASED DOWNSIDE RISKS.

COMPARED TO THE FORECAST THREE MONTHS AGO, THERE IS BROAD CONSENSUS NOW THAT THE US ECONOMY IS ENTERING A SLOWDOWN. THE LENGTH AND SEVERITY OF THE SLOWDOWN REMAINS TO BE SEEN, AND IT WILL AFFECT COUNTRIES WORLDWIDE AND KEY INDUSTRIES.

TAKING INTO ACCOUNT THE RISE IN DOWNSIDE RISKS, THE MINISTRY OF TRADE AND INDUSTRY LOWERED THE ECONOMIC FORECAST FOR THE SINGAPORE ECONOMY TO GROW BY 4.0-6.0% IN 2008, DOWN FROM THE GROWTH FORECAST OF 4.5-6.5% EARLIER.

CURRENT CONDITIONS INDICATE THAT THE US ECONOMY WILL LIKELY ENTER A MILD RECESSION IN THE FIRST HALF BUT ITS STRONG FUNDAMENTALS, COUPLED WITH FISCAL AND MONETARY STIMULUS, WILL ASSIST TO SUPPORT RECOVERY IN THE SECOND HALF. REGIONAL ECONOMIES WILL HAVE MODERATE BUT HEALTHY GROWTH. SINGAPORE’S GDP GROWTH WILL THEN BE IN THE UPPER HALF OF THE FORECAST RANGE. HOWEVER, IF THE US FALLS INTO A MORE SEVERE RECESSION, THE REGION WILL BE MORE SIGNIFICANTLY AFFECTED. THE IMPACT ON THE SINGAPORE ECONOMY WILL ALSO BE STRONGER, PARTICULARLY IN THE SENTIMENT-SENSITIVE AND EXPORT-ORIENTED SECTORS LIKE FINANCIAL SERVICES, WHOLESALE TRADE AND ELECTRONICS. IN THIS ENVIRONMENT, THE SINGAPORE ECONOMY WILL GROW AT A SLOWER PACE, NEARER THE LOWER END OF THE FORECAST RANGE.

IN THE FINANCIAL SERVICES INDUSTRY, A NET WEIGHTED BALANCE OF 19% OF FIRMS, ESPECIALLY INSURANCE COMPANIES AND FIRMS PROVIDING CREDIT CARD SERVICES, REMAINS POSITIVE ABOUT THE BUSINESS OUTLOOK IN THE MONTHS AHEAD.

IN THE REAL ESTATE INDUSTRY, A NET WEIGHTED BALANCE OF 17% OF FIRMS,

EXPECT BUSINESS TO BE BRISK FOR THE COMING MONTHS.

MANUFACTURING FIRMS ARE CAUTIOUS ABOUT BUSINESS CONDITIONS FOR THE PERIOD ENDING JUNE 2008. A NET WEIGHTED BALANCE OF 2% OF MANUFACTURERS FORECAST BETTER BUSINESS, LOWER THAN THE 7% REGISTERED IN THE SAME PERIOD LAST YEAR AND THE 25% RECORDED IN THE PREVIOUS QUARTER.

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.

IN THE TRANSPORT AND STORAGE INDUSTRY, A NET WEIGHTED BALANCE OF 5% OF FIRMS FORECASTS LESS FAVOURABLE BUSINESS CONDITIONS FOR THE COMING MONTHS.

IN THE SERVICES INDUSTRY, A NET WEIGHTED BALANCE OF 8% OF FIRMS,

EXPECT BUSINESS TO BE BRISK FOR THE COMING MONTHS. THIS IS SMALLER THAN THE 18% REGISTERED IN THE SAME PERIOD LAST YEAR AND THE 23% RECORDED IN THE PREVIOUS QUARTER. HOTELIERS REMAIN BULLISH ON BUSINESS CONDITIONS FOR THE COMING MONTHS, WITH A NET WEIGHTED BALANCE OF 35% OF HOTELIERS EXPECTING THEIR BUSINESSES TO RISE IN ANTICIPATION OF EXPECTED INCREASES IN ROOM RATES AND HIGHER OCCUPANCY RATES. IN THE CATERING TRADE INDUSTRY, A NET WEIGHTED BALANCE OF 27% OF CATERERS ANTICIPATES MORE FAVOURABLE BUSINESS CONDITIONS.

IN THE INFORMATION AND COMMUNICATIONS INDUSTRY, A NET WEIGHTED BALANCE OF 9% OF FIRMS PREDICTS A HIGHER DEMAND FOR THEIR SERVICES, IN PARTICULAR THE NETWORK OPERATORS.

IN THE BUSINESS SERVICES INDUSTRY, AN OVERALL NET WEIGHTED BALANCE OF 19% OF FIRMS EXPECTS POSITIVE SENTIMENTS. THESE INCLUDE ACCOUNTING, BOOK-KEEPING AND AUDITING, RENTING OF CONSTRUCTION AND INDUSTRIAL MACHINERY AND RENTING OF TRANSPORT EQUIPMENT.

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.42.82
UK Pound	1	Rs.84.89
Euro	1	Rs.68.07

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