MIRA INFORM REPORT

Report Date :

04.06.2008

IDENTIFICATION DETAILS

Name :	ARROW ELECTRONICS ASIA (S) PTE LTD

Formerly Known As :	^{ARROW ELECTRONICS INDONESIA PTE LTD}

Registered Office :	^{750E CHAI CHEE ROAD} ^#07-01/02 ^{TECHNOPARK @ CHAI CHEE}

Country :	Singapore

Financials (as on) :	31.12.2006

Date of Incorporation :	^19.08.1995

Com. Reg. No.:	^199505934R

Legal Form :	^{Pte Ltd}

Line of Business :	^{Importers and Exporters, Agents and Distributors in Electrical and Electronic Components in Computers and Computer related products.}

RATING & COMMENTS

MIRA’s Rating :

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

ARROW ELECTRONICS ASIA (S) PTE LTD

Line Of Business

^{IMPORTERS AND EXPORTERS, AGENTS AND DISTRIBUTORS
IN ELECTRICAL AND ELECTRONIC COMPONENTS IN COMPUTERS AND COMPUTER RELATED
PRODUCTS.}

Parent Company

^{COMPONENTS AGENT
(CAYMAN) LIMITED}

(PERCENTAGE OF SHAREHOLDING: 100.00%)

Financial Elements

FY 2006

COMPANY

Sales : US$328,361,868

Networth : US$ 10,769,178

Paid-Up Capital : US$ 3,983,016

Net result : US$ 2,506,580

Net Margin(%) : 0.76

Return on Equity(%) : 23.28

Leverage Ratio : 9.37

COMPANY IDENTIFICATION

^{Subject
Company : ARROW ELECTRONICS ASIA (S) PTE. LTD.}

^{Former
Name : ARROW ELECTRONICS INDONESIA PTE LTD}

^{Business
Address : 750E CHAI CHEE ROAD} ^#07-01/02 ^{TECHNOPARK @ CHAI CHEE}

^{Town : SINGAPORE}

^{Postcode : 469005}

^{County :}

^{Country : Singapore}

^{Telephone : 6559 8388}

^{Fax : 6443 6733}

^{ROC
Number : 199505934R}

^{Reg.
Town :}

PREVIOUS IDENTIFICATION

^{ARROW
ELECTRONICS INDONESIA PTE LTDDATE OF CHANGE: 22/07/2002}

SUMMARY

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

^{Legal Form :}^{Pte Ltd}

^{Date Inc. :}^19/08/1995

^{Previous Legal Form : -}

^{Summary year :}^31/12/2006

^{Sales :}^328,361,868

^{Networth :}^10,769,178

^{Capital :
-}

^{Paid-Up Capital :}^3,983,016

^{Employees :}⁸⁰

^{Net result :}^2,506,580

^{Share value : -}

^{Auditor :}^{ERNST & YOUNG}

^{BASED
ON ACRA'S RECORD}

^{NO. OF SHARES CURRENCY AMOUNT}

^{ISSUED
ORDINARY 6,929,994 SGD 6,929,994.00}

^{PAID-UP
ORDINARY - SGD 6,929,994.00}

REFERENCES

^{Litigation : No}

^{Company
status : TRADING}

^{Started
:
19/08/1995}

PRINCIPAL(S)

^{PETER
KONG TAT-MING
F5596300L Director}

DIRECTOR(S)

^{PAUL
REILLY
159921651 Director}

^{Appointed
on : 15/08/2002}

^{Street
: 21 OSBOURNE ROAD}

^{GARDEN CITY}

^{Town: NEW YORK}

^{Postcode: 11530}

^{Country: United States}

^{PETER
BROWN
700879790 Director}

^{Appointed
on : 22/12/2003}

^{Street
: 808 COURT NORTH DRIVE}

^MELVILLE

^{Town: NEW YORK}

^{Postcode: 11747}

^{Country: United States}

^{PETER
KONG TAT-MING
F5596300L Director}

^{Appointed
on : 10/11/2007}

^{Street
: 9 ARDMORE PARK}

^#16-01

^{ARDMORE PARK}

^{Town: SINGAPORE}

^{Postcode: 259955}

^{Country: Singapore}

^{JEFFREY
SOL MANN G5546613R Director}

^{Appointed
on : 12/11/2007}

^{Street
: 82 GRANGE ROAD}

^#21-04

^{COLONNADE APARTMENT}

^{Town: SINGAPORE}

^{Postcode: 249587}

^{Country: Singapore}

^{TAN
GEOK CHENG DORIS
S0067114B Company Secretary}

^{Appointed
on : 28/12/2005}

^{Street
: 229 TAMPINES STREET 23}

^#12-257

^{Town: SINGAPORE}

^{Postcode: 521229}

^{Country: Singapore}

^{PAUL
REILLY
159921651 Alternate Director}

^{Appointed
on : 12/11/2007}

^{Street
: 21 OSBOURNE ROAD}

^{GARDEN CITY}

^{Town: NEW YORK}

^{Postcode: 11530}

^{Country: United States}

FORMER DIRECTOR(S)

^{ROBERT
E KLATELL 140395200}

^{TAM
HING SANG
E2436330}

^{KOH
KEE CHEU
S0064787Z}

^{TANG
HOCK HIN
S0311925D}

^{LIM
KIAM BENG
S1661490D}

ACTIVITY(IES)

^{ELECTRICAL
And ELECTRONICS (M)
Code:7565}

^{ELECTRONIC
COMPONENTS - DISTRIBUTORS
Code:7607}

^{BASED
ON ACRA'S RECORD}

^{1)
MANUFACTURE OF PRINTERS;}

^{MANUFACTURE/REPAIR
COMPUTER PERIPHERAL EQUIPMENT}

CHARGES

No Charges On Premises/Property In Our Database

PREMISES/PROPERTY INFORMATIONS

No Premises/Property Information In Our Databases

BANKERS

^{THE
HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED}

SHAREHOLDERS(S)

^{COMPONENTS
AGENT (CAYMAN) LIMITED 6,929,994 Company}

^{Street
: P.O. BOX 2681 GT, GEORGE
TOWN}

^{GRAND CAYMAN, BRITISH}

^{WEST INDIES}

^Town:

^Postcode:

^{Country: Cayman Islands}

HOLDING COMPANY

^{COMPONENTS
AGENT (CAYMAN) LIMITED
UF10974C % : 100}

SUBSIDIARY(IES)

^{ARROW
ELECTRONICS (THAILAND) LIMITED}

PAYMENT HISTORY AND EXPERIENCES

^{Trade
Morality :
AVERAGE}

^{Liquidity
:
SUFFICIENT}

^{Payments
: REGULAR}

^{Trend
:
UPWARD}

^{Financial
Situation : AVERAGE}

FINANCIAL ELEMENTS

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

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

^{Date
Account Lodged:
29/10/2007}

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

^{Number
of weeks: 52 52}

^{Consolidation
Code: COMPANY COMPANY}

^{--- ASSETS} ^---

^{Preliminary
Exp 208,000 32,800}

^{Tangible
Fixed Assets:
27,005
43,299}

^{Investments 142,807 142,807}

  ^{Total
Fixed Assets:
377,812
218,906}

^{Inventories: 42,719,035 33,822,702}

^{Receivables: 61,522,676 42,300,378}

^{Cash,Banks,
Securitis: 1,853,876 2,612,705}

^{Other
current assets:
5,250,417
748,715}

^{Total Current Assets: 111,346,004 79,484,500}

^{TOTAL ASSETS: 111,723,816 79,703,406}

^{---
LIABILITIES} ^---

^{Equity
capital:
3,983,016
3,983,016}

^{Reserves: 6,786,162 4,067,613}

^{Total Equity: 10,769,178 8,050,629}

^{L/T
deffered taxes:
5,000
4,800}

^{Total L/T Liabilities: 5,000 4,800}

^{Trade
Creditors:
47,652,598
36,595,914}

^{Prepay.
& Def. charges:
2,048,356
1,504,801}

^{Provisions: 849,517 316,706}

^{Other
Short term Liab.:
50,399,167
33,230,556}

^{Total short term Liab.: 100,949,638 71,647,977}

^{TOTAL LIABILITIES: 100,954,638 71,652,777}

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

^{Net
Sales
328,361,868
233,508,613}

^{Purchases,Sces
& Other Goods:
308,598,312
219,223,536}

^{Gross
Profit:
19,763,556 14,285,077}

^{Result
of ordinary operations
4,009,893
1,844,443}

^{NET
RESULT BEFORE TAX:
3,039,580
1,844,423}

^{Tax
:
533,000
441,942}

^{Net
income/loss year:
2,506,580
1,402,481}

^{Interest
Paid: 970,313 20}

^{Depreciation: 17,389 18,320}

^{Directors
Emoluments:
505,470 191,254}

^{Wages
and Salaries:
4,988,624
3,334,586}

RATIOS

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

^{Turnover per
employee:                4104523.35
2918857.66}  ^{Net result / Turnover(%):                          0.01                       0.01}  ^{Stock / Turnover(%):                           0.13                       0.14}  ^{Net Margin(%):                                          0.76                       0.60}  ^{Return on Equity(%):                            23.28                       17.42}  ^{Return on Assets(%):                           2.24                       1.76}  ^{Net Working capital:       10396366.00
7836523.00}  ^{Cash Ratio:                                         0.02                       0.04}  ^{Quick Ratio:                                   0.63                       0.63}  ^{Current ratio:                                          1.10                       1.11}  ^{Receivables Turnover:                           67.45                      65.21}  ^{Leverage Ratio:                                9.37                                  8.90}

^{Net Margin : (100*Net income loss year)/Net sales}

^{Return on Equity : (100*Net
income loss year)/Total equity}

^{Return on Assets : (100*Net
income loss year)/Total fixed assets}

^{Dividends Coverage
: Net income loss
year/Dividends}

^{Net Working capital : (Total
current assets - Total short term liabilities)}

^{Cash Ratio :
Cash Bank securities/Total short term liabilities}

^{Quick Ratio :
(Cash Bank securities + Receivables)/Total Short Term Liabilities}

^{Current ratio : Total current assets/Total short term
liabilities}

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

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

FINANCIAL COMMENTS

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

^{NET WORTH:}

^{THE BALANCE SHEET
WAS CONSIDERED PASSABLE WITH NET WORTH IMPROVED BY} ^{33.77% FROM
US$8,050,629 IN FY 2005 TO US$10,769,178 IN FY 2006. THIS} ^{WAS DUE TO
HIGHER ACCUMULATED PROFIT OF US$6,786,162 (2005:} ^{US$4,067,613); A
RISE OF 66.83% FROM THE PRIOR FINANCIAL YEAR.}

^LEVERAGE:

^{IN THE SHORT-TERM,
SUBJECT WAS LARGELY FINANCED BY OTHER SHORT-TERM} ^{LIABILITIES
WHICH MADE UP 49.93% (2005: 46.38%) OF THE TOTAL CURRENT} ^{LIABILITIES
AND AMOUNTED TO US$50,399,167 (2005: US$33,230,556). THE} ^{BREAKDOWN
IS AS FOLLOWS:}

^{*
OTHER PAYABLES - 2006: US$25,201 (2005: US$775,635)}

^{*
IMMEDIATE HOLDING COMPANY - 2006: US$70,267 (2005: US$70,267)}

^{*
RELATED COMPANIES (NON-TRADE) - 2006: US$4,303,699}

^{(2005:
US$32,384,654)}

^{*
RELATED COMPANIES (SHORT-TERM LOAN) - 2006: US$46,000,000}

^(2005:
-)

^{IN
ALL, LEVERAGE RATIO ROSE FROM 8.90 TIMES TO 9.37 TIMES AS A RESULT} ^{OF A GREATER
RISE IN TOTAL LIABILITIES THAN TOTAL EQUITY.}

^LIQUIDITY:

^{IN GENERAL,
SUBJECT'S LIQUIDITY SITUATION WAS PASSABLE AS SEEN FROM} ^{THE CHANGES
IN NET WORKING CAPITAL AND LIQUIDITY RATIOS. CURRENT RATIO} ^{FELL TO
1.10 TIMES, DOWN FROM 1.11 TIMES AND QUICK RATIO REMAIN AT} ^0.63
TIMES.

^{NET
WORKING CAPITAL IMPROVED BY 32.67% FROM US$7,836,523 IN}

^{FY
2005 TO US$10,396,366.}

^{PROFITABILITY:}

^{REVENUE POSTED AN
INCREASE OF 40.62% FROM US$233,508,613 IN FY 2005 TO} ^{US$328,361,868
AND NET PROFIT ROSE BY 78.72% TO US$2,506,580 (2005:} ^{US$1,402,481).
HENCE, NET MARGIN ROSE TO 0.76% (2005: 0.60%).}

^{DEBT SERVICING:}

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

^{AVERAGE COLLECTION
PERIOD HAS INCREASED FROM 65.21 DAYS TO 67.45 DAYS.} ^{A HIGHER
AVERAGE COLLECTION PERIOD POSES GREATER RISK OF TURNING} ^{INTO BAD
DEBTS. HOWEVER, IT IS STILL WORTH NOTING THAT DEBT SERVICING} ^{ABILITY
MAY NOT BE AFFECTED IF TRADE RECEIVABLES ARE FORTHCOMING.}

^{NON-CURRENT ASSETS:}

^{THE
FOLLOWING ITEMS ARE CLASSIFIED UNDER PRELIMINARY:}

^{*
DEFERRED TAX ASSET - 2006: US$208,000 (2005: US$32,800)}

BACKGROUND/OPERATION

^{THE
COMPANY WAS INCORPORATED IN THE REPUBLIC OF SINGAPORE ON} ^{19/08/1995
AS A LIMITED PRIVATE COMPANY UNDER THE NAMESTYLE OF} ^{"ARROW
ELECTRONICS (INDONESIA) PTE LTD".}

^{ON
26/12/1997, SUBJECT CHANGED TO ITS NAMESTYLE OF "ARROW ELECTRONICS} ^{(INDONESIA)
PTE LTD".}

^{SUBSEQUENTLY
ON 22/07/2002, SUBJECT CHANGED TO ITS PRESENT NAMESTYLE} ^{OF
"ARROW ELECTRONICS ASIA (S) PTE. LTD.".}

^{,
THE COMPANY HAS ISSUED AND PAID-UP CAPITAL OF} ^{6,929,994
SHARES OF A VALUE OF S$6,929,994.}

^{PRINCIPAL
ACTIVITIES:}

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

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

^{1)
MANUFACTURE OF PRINTERS;}

^{MANUFACTURE/REPAIR
COMPUTER PERIPHERAL EQUIPMENT}

^{THE
COMPANY WAS LISTED IN THE SINGAPORE LOCAL DIRECTORIES UNDER THE} ^{CLASSIFICATION
OF: ELECTRONIC COMPONENTS}

^{DURING
THE FINANCIAL YEAR UNDER REVIEW, THE PRINCIPAL ACTIVITIES OF} ^{THE COMPANY
CONSIST OF IMPORTERS AND EXPORTERS, AGENTS AND} ^{DISTRIBUTORS IN
ELECTRICAL AND ELECTRONIC COMPONENTS IN COMPUTERS AND} ^{COMPUTER RELATED
PRODUCTS.}

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

^{BACKGROUND
OF ARROW ELECTRONICS:}

^{*
IT IS ONE OF THE WORLD'S LARGEST DISTRIBUTORS OF ELECTRONIC} ^{COMPONENTS AND COMPUTER PRODUCTS AND A
LEADING PROVIDER} ^{OF SERVICES TO THE ELECTRONICS INDUSTRY.}

^{* HEADQUARTERED IN
MELVILLE, NEW YORK, ARROW SERVES AS A SUPPLY} ^{CHANNEL
PARTNER FOR MORE THAN 600 SUPPLIERS AND 175,000 ORIGINAL} ^{EQUIPMENT
MANUFACTURERS, CONTRACT MANUFACTURERS, AND VALUE-ADDED} ^{RESELLERS
THROUGH MORE THAN 200 SALES FACILITIES AND 23 DISTRIBUTION} ^{CENTERS
IN 40 COUNTRIES AND TERRITORIES.}

^{SUBJECT
ENGAGES IN THE FOLLOWING ACTIVITIES:}

^{*
THE DISTRIBUTING OF A FULL RANGE OF ELECTRONIC COMPONENTS, PASSIVE}

^{AND
ELECTRO-MECHANICAL AND CONNECTOR PRODUCTS}

^{PRODUCTS/BRANDS:}

^{*
SEMICONDUCTOR}

^{-
AGILENT, AMD, AUTHENTEC, BECKMANN(BI), CYPRESS, FAIRCHILD, IR,}

^{ISSI,
INTERSIL, MICRON, MICREL, MOTOROLA (SEE FREESCALE), NS,}

^{ON
SEMICONDUCTOR, PHILIPS, SOLOMON SYSTECH, STMICROELECTRONICS,}

^{TI,
TOSHIBA, VISHAY, LITE-ON ELEC}

^{*
PASSIVE/ELECTRO-MECHANICAL}

^{-
AVX/KYOCERA, BC COMPONENTS, BOUMS, HALO, ITT CANNON/C&K, IRC,}

^{KEMET,
LITTELFUSE, PHYCOMP/YAGEO, RAYCHEM, TYCO ELECTRONICS,}

^{VISHAY,
WICKMAN}

^*
CONNECTOR

^{-
AVX/KYOCERA (ELCO), FCI, MOLEX, SAMTEC, TYCO ELECTRONICS AMP}

^{DISTRIBUTORS
FOR:}

^{*
ASTEC POWER}

^{*
MAXIM/DALLAS}

^{*
NATIONAL SEMICONDUCTOR}

^{*
KNITTER-SWITCH (GERMANY)}

^{*
BROADCOM CORPORATION (USA)}

^{MARKET
PRESENCE:}

^*
THAILAND

^{*
PHILIPPINES}

^*
INDIA

^*
MALAYSIA

^{INDUSTRIES
SERVED:}

^{*
MULITNATIONALS}

^{*
ORIGINAL EQUIPMENT AND CONTRACT MANUFACTURERS INVOLVED IN FIELD SUCH}

^{AS
COMPUTERS AND PERIPHERALS}

^{*
COMMUNICATIONS}

^{*
CONSUMER ELECTRONICS}

^{*
INDUSTRIAL PRODUCTS AND AUTOMOTIVE}

^{NEWS:
ARROW ELECTRONICS TO ACQUIRE COMPONENTS DISTRIBUTION BUSINESS O}

^{HYNETIC
ELECTRONICS AND SHREYANICS ELECTRONICS IN INDIA}

^"EXTRACTS"

^{-SOURCE:
ARROW ASIA WEBSITE}

^{DATE:
11/01/2008}

^{ARROW ELECTRONICS
INC., (NYSE: ARW) TODAY ANNOUNCED AN AGREEMENT TO} ^{ACQUIRE ALL
OF THE ASSETS RELATED TO THE FRANCHISE COMPONENTS} ^{DISTRIBUTION
BUSINESS OF HYNETIC ELECTRONICS AND SHREYANICS} ^{ELECTRONICS IN INDIA,
EFFECTIVE JANUARY 1, 2008. PRIVATELY OWNED,} ^{HYNETIC ELECTRONICS AND
SHREYANICS ELECTRONICS ("HYNETIC") ARE LEADING} ^{ELECTRONIC
COMPONENT DISTRIBUTORS IN INDIA.}

^{NO
OTHER TRADE INFORMATION WAS AVAILABLE AS TELE-INTERVIEW WAS NOT} ^{GRANTED BY
SUBJECT'S PERSONNEL}

^{NUMBER
OF EMPLOYEES:}

^{* 2008 - 80}

^{THE COMPANY IS A
SUBSIDIARY OF COMPONENTS AGENT (CAYMAN) LIMITED,} ^{A COMPANY
INCORPORATED IN THE BRITISH VIRGIN ISLANDS. THE ULTIMATE} ^{HOLDING
COMPANY IS ARROW ELECTRONICS INC, A COMPANY INCORPORATED IN} ^{THE
UNITED STATES OF AMERICA.}

^{NUMBER
OF EMPLOYEES:}

^{*
COMPANY - 2006: NOT AVAILABLE (2005: NOT AVAILABLE; 2004: NOT AVAILABLE;}

^{2003:
NOT AVAILABLE; 2002: 54; 2001: NIL)}

^{REGISTERED
AND BUSINESS ADDRESS:}

^{750E
CHAI CHEE ROAD}

^{#07-01/02
TECHNOPARK @ CHAI CHEE}

^{SINGAPORE
469005}

^{DATE
OF CHANGE OF ADDRESS: 19/01/2004}

^{-
RENTED PREMISE}

^{-
PREMISE OWNED BY: WAN TIEN REALTY (PTE) LTD}

^{-
TEL NO: 9870242591 ( THE PROVIDED NUMBER IS INCORRECT)}

^{OTHER
BUSINESS ADDRESS:}

^{2
CLEMENTI LOOP}

^{#03-04
JIN XING DISTRIPARK}

^{SINGAPORE
129809}

^-
WAREHOUSE

^{-
TEL: 6311 9566}

^{WEBSITE:
http://www.arrowasia.com (A RELATED COMPANY'S)}

^{EMAIL : -}

MANAGEMENT

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

^{1)
PAUL REILLY, AN AMERICAN}

^{-
BASED IN THE UNITED STATES OF AMERICA.}

^{2)
PETER BROWN, AN AMERICAN}

^{-
BASED IN THE UNITED STATES OF AMERICA.}

^{3)
PETER KONG TAT-MING, A CANADIAN}

^{-
BASED IN SINGAPORE.}

^{4)
JEFFREY SOL MANN, AN AMERICAN}

^{-
BASED IN SINGAPORE.}

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

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