MIRA INFORM REPORT

Report Date :

05.06.2008

IDENTIFICATION DETAILS

Name :	GOLD MATRIX RESOURCES PTE. LTD.
Registered Office :	^101 Cecil Street ^#25-12 ^Tong Eng Building
Country :	Singapore
Financials (as on) :	31.03.2006
Date of Incorporation :	^02.11.2004
Com. Reg. No.:	^200414243H
Legal Form :	^Pte Ltd
Line of Business :	General Trading

RATING & COMMENTS

MIRA’s Rating :

B

RATING		STATUS	PROPOSED CREDIT LINE
26-40	B	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average.	Small

Status :	Moderate
Payment Behaviour :	Unknown
Litigation :	Clear

Subject Company

GOLD MATRIX RESOURCES PTE. LTD.

Line Of Business 

GENERAL TRADING

Parent Company

SINO INVESTMENT GLOBAL LIMITED

(PERCENTAGE OF SHAREHOLDINGS: 100.00%)

Financial Elements

FY 2006

COMPANY

Sales : US$ 10,610,356

Networth : US$ 2,038,590

Paid-Up Capital : US$ 2,007,118

Net result : US$ 31,472

Net Margin(%) : 0.30

Return on Equity(%) : 1.54

Leverage Ratio : 2.52

COMPANY IDENTIFICATION

^{Subject Company : GOLD MATRIX RESOURCES PTE. LTD.}

^{Former Name : -}

^{Business Address : 101 CECIL STREET}

^#25-12

^{TONG ENG BUILDING}

^{Town : SINGAPORE}

^{Postcode : 069533}

^{Country : Singapore}

^{Telephone : 6491 1100}

^{Fax : 6220 0400}

^{ROC Number : 200414243H}

^{Reg. Town : -}

SUMMARY

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

^{Legal Form : Pte Ltd}

^{Date Inc. : 02/11/2004}

^{Previous Legal Form : -}

^{Summary year : 31/03/2006}

^{Sales : 10,610,356}

^{Networth : 2,038,590}

^{Capital : -}

^{Paid-Up Capital : 2,007,118}

^{Employees : 3}

^{Net result : 31,472}

^{Share value : 1}

^{Auditor : BDO RAFFLES}

^{BASED ON ACRA'S RECORD}

^{NO OF SHARES CURRENCY AMOUNT}

^{ISSUED ORDINARY 4,856,203 SGD 4,856,203.00}

^{PAID-UP ORDINARY - SGD 4,856,203.00}

REFERENCES

^{Litigation : No}

^{Company status : TRADING}

^{Started : 02/11/2004}

PRINCIPAL(S)

^{PINAKI RATH S6960871Z Managing Director}

DIRECTOR(S)

^{PINAKI RATH S6960871Z Director}

^{Appointed on : 30/08/2005}

^{Street : 9 RHU CROSS}

^#05-08

^{COSTA RHU}

^{Town: SINGAPORE}

^{Postcode: 437436}

^{Country: Singapore}

^{PINAKI RATH S6960871Z Managing Director}

^{Appointed on : 27/12/2005}

^{Street : 9 RHU CROSS}

^#05-08

^{COSTA RHU}

^{Town: SINGAPORE}

^{Postcode: 437436}

^{Country: Singapore}

^{LIM SAI BENG S0307980E Director}

^{Appointed on : 11/07/2005}

^{Street : 20 DOVER CRESCENT}

^#12-314

^{Town: SINGAPORE}

^{Postcode: 130020}

^{Country: Singapore}

^{LAU SIEK LING S7578028A Company Secretary}

^{Appointed on : 30/08/2005}

^{Street : 35 TELOK BLANGAH RISE}

^#04-285

^{Town: SINGAPORE}

^{Postcode: 090035}

^{Country: Singapore}

ACTIVITY(IES)

^{IMPORTERS And EXPORTERS Code:11760}

^{METALS - BASE - DEALERS And BROKERS Code:13960}

^{BASED ON ACRA'S RECORD}

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

^{2) OTHER INVESTMENT HOLDING COMPANIES}

CHARGES

^{Date: 11/07/2006}

^{Comments : CHARGE NO : C200604511}

^{AMOUNT SECURED : 0.00 AND ALL MONIES OWING}

^{CAHRGEE(S) : INDIAN OVERSEAS BANK}

^{Date: 10/03/2006}

^{Comments : CHARGE NO : C200601594}

^{AMOUNT SECURED : 0.00 AND ALL MONIES OWING}

^{CAHRGEE(S) : INDIAN OVERSEAS BANK}

^{Date: 16/10/2007}

^{Comments : CHARGE NO : C200708741, C200708725}

^{AMOUNT SECURED : 0.00 AND ALL MONIES OWING}

^{CAHRGEE(S) : BANK OF INDIA}

^{Date: 11/02/2008}

^{Comments : CHARGE NO : C200801558, C200801557}

^{AMOUNT SECURED : 0.00 AND ALL MONIES OWING}

^{CAHRGEE(S) : THE HONGKONG & SHANGHAI BANKINC CORPORATION LTD}

PREMISES/PROPERTY INFORMATIONS

^{Date : 14/02/2007}

^{Tax rate : 10}

^{Site Address : 101 CECIL STREET}

^#25-12

^{TONG ENG BUILDING}

^{Postcode : 069533}

^{Country : Singapore}

^{Annual Value : 31,500}

* 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

^{INDIAN OVERSEAS BANK}

^{THE HONGKONG AND SHANGHAI BANKING CORPORATION LTD}

SHAREHOLDERS(S)

^{SINO INVESTMENT GLOBAL LIMITED 4,856,203 Company}

^{Street : PALM GROVE HOUSE P O BOX 438}

^{ROAD TOWN}

^{Town: TORTOLA}

^Postcode:

^{Country: Virgin Islands (British)}

HOLDING COMPANY

^{SINO INVESTMENT GLOBAL LIMITED UF40940N % : 100}

SUBSIDIARY(IES)

No Participation In Our Database

PAYMENT HISTORY AND EXPERIENCES

^{Trade Morality : AVERAGE}

^{Liquidity : SUFFICIENT}

^{Payments : UNKNOWN}

^{Trend : UNKNOWN}

^{Financial Situation : AVERAGE}

FINANCIAL ELEMENTS

^{Audit Qualification: "MILD" UNCERTAINTIES}

^{Date Account Lodged: 05/06/2006}

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

^{Number of weeks: 72}

^{Consolidation Code: COMPANY}

^{--- ASSETS ---}

^{Tangible Fixed Assets: 7,511}

^{Total Fixed Assets: 7,511}

^{Inventories: 2,245,541}

^{Receivables: 3,153,313}

^{Cash,Banks, Securitis: 1,748,419}

^{Other current assets: 26,077}

^{Total Current Assets: 7,173,350}

^{TOTAL ASSETS: 7,180,861}

^{--- LIABILITIES ---}

^{Equity capital: 2,007,118}

^{Profit & lost Account: 31,472}

^{Total Equity: 2,038,590}

^{Trade Creditors: 108,677}

^{Due to Bank: 5,007,158}

^{Other Short term Liab.: 5,124}

^{Prepay. & Def. charges: 21,312}

^{Total short term Liab.: 5,142,271}

^{TOTAL LIABILITIES: 5,142,271}

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

^{Net Sales 10,610,356}

^{Purchases,Sces & Other Goods: 10,459,716}

^{Gross Profit: 150,640}

^{NET RESULT BEFORE TAX: 31,472}

^{Net income/loss year: 31,472}

^{Depreciation: 3,755}

^{Directors Emoluments: 31,997}

^{Wages and Salaries: 5,747}

^{Financial Income: 16,629}

RATIOS

^31/03/2006

^{Turnover per employee: 3536785.33}

^{Stock / Turnover(%): 0.21}

^{Net Margin(%): 0.30}

^{Return on Equity(%): 1.54}

^{Return on Assets(%): 0.44}

^{Net Working capital: 2031079.00}

^{Cash Ratio: 0.34}

^{Quick Ratio: 0.95}

^{Current ratio: 1.39}

^{Receivables Turnover: 106.99}

^{Leverage Ratio: 2.52}

^{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)}

^{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

^{AUDITORS REPORT}

^{ATTENTION IS DRAWN TO THE FINANCIAL STATEMENTS REGARDING THE IDENTITY}

^{OF THE ULTIMATE HOLDING COMPANY.}

^{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 IN POSITIVE REGION OF USD2,038,590. THIS WAS DUE TO SUBJECT'S PROFIT FOR THE PERIOD AMOUNTIG TO USD31,472.}

^LEVERAGE:

^{IN THE SHORT-TERM, SUBJECT WAS LARGELY FINANCED BY TRUST RECEIPTS WHICH MADE UP 97.37% OF TOTAL SHORT TERM LIABILITIES AND AMOUNTED TO USD5,007,158.}

^{TRADE CREDITORS AMOUNTED TO USD108,677 FOR THE FINANCIAL PERIOD.}

^{SUBJECT DID NOT INCUR ANY LONG TERM LIABILITIES DURING THE FINANCIAL YEAR UNDER REVIEW.}

^{IN ALL, LEVERAGE RATIO WAS AT 2.52 TIMES. THIS WAS DUE TO SUBJECT'S OVERWHELMING TOTAL LIABILITIES AS COMPARED TO ITS TOTAL EQUITY.}

^LIQUIDITY:

^{IN GENERAL, SUBJECT'S LIQUIDITY SITUATION WAS PASSABLE AS SEEN FROM THE RISE IN NET WORKING CAPITAL WHICH AMOUNTED TO USD2,031,079.}

^{CURRENT RATIO AND QUICK RATIO WERE AT 1.39 TIMES AND 0.95 TIMES RESPECTIVELY.}

^{PROFITABILITY:}

^{SUBJECT POSTED A REVENUE OF USD10,610,356 AND ACHIEVED A NET PROFIT OF USD31,472. HENCE NET MARGIN WAS IN POSITIVE REGION OF 0.30%.}

^{DEBT SERVICING:}

^{DEBT SERVICING PROBLEMS MIGHT NOT BE EXPECTED IF REVENUE AND EARNINGS CAN BE MAINTAINED AND PAYMENT BY TRADE DEBTORS ARE FORTHCOMING. IN ADDITION, SUBJECT DID NOT INCUR ANY INTEREST EXPENSES DURING THE FINANCIAL YEAR.}

^{NOTES TO THE FINANCIAL STATEMENTS:}

^{INTEREST BEARING LOANS}

^{*TRUST RECEIPTS - 2006: USD5,007,158}

^{THIS CARRIES AN EFFECTIVE INTEREST RATE OF 7.33% P.A. THE ABOVE LOAN IS SECURED BY A LIEN ON FIXED DEPOSITS, AN OPEN CHARGE ON THE RECIEVABLES, BOOK DEBTS, AND STOCKS OF THE COMPANY AND A GUARANTEE FROM ITS HOLDING AND ULTIMATE HOLDING COMPANY.}

^{COMPARATIVE FIGURES}

^{THE COMPANY WAS INCORPORATED ON 02/11/2004. THERE WERE NO COMPARATIVE FIGURES AVAILABLE SINCE THIS IS THE FIRST SET OF THE FINANCIAL STATEMENTS.}

BACKGROUND/OPERATION

^{THE COMPANY WAS INCORPORATED IN THE REPUBLIC OF SINGAPORE ON 02/11/2004 AS A LIMITED PRIVATE COMPANY AND IS TRADING UNDER THE PRESENT NAMESTYLE OF "GOLD MATRIX RESOURCES PTE. LTD.".}

^{AS AT 05/06/2008, THE COMPANY HAS AN ISSUED AND PAID-UP CAPITAL OF 3,340,000 SHARES, OF A VALUE OF S$3,340,000.}

^{PRINCIPAL ACTIVITIES:}

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

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

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

^{2) OTHER INVESTMENT HOLDING COMPANIES}

^{DURING THE FINANCIAL YEAR (S) UNDER REVIEW, THE PRINCIPAL ACTIVITIES OF THE COMPANY ARE TO CARRY ON THE BUSINESS OF GENERAL TRADING.}

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

^ACTIVITIES:

^{* TRADING COMPANY SPECIALISED IN THE BASE METALS MARKET}

^{* OFFERS STRUCTURED PRODUCTS COMBINING TRADE AND COMMODITY FINANCE,}

^{INSURANCE, HEDGING STRATEGIES AND LOGISTICAL SUPPORT}

^{SUBJECT'S PRODUCT PORTFOLIO INCLUDES THE SIX BASE METALS:}

^{* NICKEL}

^{* ZINC}

^{* TIN}

^{* ALUMINIUM}

^{* COPPER}

^{* LEAD}

^{MARKET PRESENCE:}

^{* SOUTH AND SOUTH-EAST ASIA}

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

^ACTIVITIES:

^{* TRADING OF BASE METALS}

^{NUMBER OF EMPLOYEES:}

^{* 2008: 3}

^{NO OTHER TRADE INFORMATION WAS AVAILABLE}

^{SUBJECT IS A WHOLLY OWNED SUBSIDIARY OF SINO INVESTMENT GLOBAL LIMITED, INCORPORATED IN THE BRITISH VIRGIN ISLANDS.}

^{NUMBER OF EMPLOYEES (31 MARCH):}

^{* COMPANY - 2006: 2}

^{REGISTERED AND BUSINESS ADDRESS:}

^{101 CECIL STREET}

^#25-12

^{TONG ENG BUILDING}

^{SINGAPORE 069533}

^{DATE OF CHANGE OF ADDRESS: 14/09/2006}

^{- OWNED PREMISE}

^{- OFFICE}

^WEBSITE:

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

^EMAIL:

^{gmr@goldmatrixresources.com}

^{pinaki@goldmatrixresources.com}

^{anuj@goldmatrixresources.com}

MANAGEMENT

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

^{1) LIM SAI BENG, A SINGAPOREAN}

^{- HOLDS OTHER DIRECTORSHIPS AS RECORDED IN OUR DATABASE:}

^{GOLDEN VANTAGE PTE LTD}

^{ERG TRANSIT SYSTEMS (SING) PTE LTD}

^{WESTHORNE INT'L PTE LTD}

^{2) PINAKI RATH, A SINGAPORE PERMANENT RESIDENT}

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

SINGAPORE'S COUNTRY RATING 2007

Investment Grade

IN SINGAPORE, THE POLITICAL SITUATION REMAINS STABLE.

SINGAPORE BOASTS THE BEST GOVERNANCE IN ASIA, WITH AN EFFECTIVE LEGAL SYSTEM FACILITATING DEBT COLLECTION AND TO A HIGH DEGREE OF FINANCIAL TRANSPARENCY.

EXTERNAL ACCOUNTS HAVE REMAINED SUBSTANTIALLY IN SURPLUS, CONTRIBUTED TO THE DYNAMISM OF THE ELECTRONICS AND PHARMACEUTICALS SECTORS AND TO REPATRIATION OF PROFITS FROM SINGAPORE INVESTMENTS. THE FINANCIAL AND TOURISM SECTORS HAVE ALSO CONTRIBUTED TO THE LARGE CURRENT ACCOUNT SURPLUS.

SINGAPORE CONTINUES TO KEENLY WELCOME FOREIGN INVESTMENT AND OFFERS A VERY OPEN AND WELL-PLANNED ECONOMIC AND POLITICAL ENVIRONMENT. IT HAS BEEN IMPLEMENTING AMBITIOUS DIVERSIFICATION STRATEGY, FOCUSED PARTICULARLY ON THE CHEMICALS AND PHARMACEUTICAL SECTORS.

THE GOVERNMENT USES FOREIGN DIRECT INVESTMENT TO DEVELOP PRIORITY SECTORS (ELECTRONICS, CHEMICALS, BIOTECHNOLOGY). THE AIM IS TO ENCOURAGE THE GROWTH OF HIGH ADDED-VALUE ACTIVITIES AND TURN SINGAPORE INTO A REGIONAL HUB FOR FOREIGN INVESTORS INTERESTED IN ASIA.

CERTAIN SECTORS (MEDIA, LEGAL AND FINANCIAL SERVICES) ARE HOWEVER ONLY PARTIALLY OPEN TO FOREIGN INVESTMENT. THESE SECTORS ARE SLOWLY OPENING UP, BUT THE PROGRESS IS SLOW.

AFTER HIGH GROWTH IN 2006, BUOYED BY THE DYNAMISM OF BOTH EXPORTS AND HOUSEHOLD CONSUMPTION, A SLOWDOWN IS EXPECTED IN 2007.

ASSETS

• MAJOR EXPORTER OF CAPITAL IN ASIA, NOTABLY VIA THE STATE-OWNED TEMASEK HOLDING COMPANY.
• HIGH QUALITY COMPETITIVENESS IN ASIA
• EXCELLENT BUSINESS CLIMATE
• POLITICAL STABILITY.

WEAKNESSES

• SKILLED MANPOWER HAS BEEN LACKING IN THE SECTORS TARGETED FOR DEVELOPMENT.
• AN AGEING POPULATION COULD, ULTIMATELY, AFFECT ECONOMIC PERFORMANCE.
• GROWING INEQUALITY AND THE EMERGENCE OF LONG-TERM UNEMPLOYMENT AMONG THE LEAST SKILLED COULD GENERATE SOCIAL TENSIONS.
• BEING THE WORLD’S MOST OPEN ECONOMY, IT HAS BEEN VULNERABLE TO WORLD ECONOMIC DOWNTURNS.

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

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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