MIRA INFORM REPORT

Report Date :

12.06.2008

IDENTIFICATION DETAILS

Name :	PROCTER & GAMBLE INTERNATIONAL OPERATIONS PTE LTD

Formerly Known As :	^{DOLAND TRADING PTE LTD}

Registered Office :	^{238A Thomson Road} ^#21-01/10 ^{Novena Square}

Country :	Singapore

Financials (as on) :	30.06.2006

Date of Incorporation :	^06.05.2000

Com. Reg. No.:	^200003934Z

Legal Form :	^{Pte Ltd}

Line of Business :	Regional Product Charter

RATING & COMMENTS

MIRA’s Rating :

RATING		STATUS	PROPOSED CREDIT LINE
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

Status :	Excellent

Payment Behaviour :	Regular

Litigation :	Clear

Subject Company

PROCTER & GAMBLE INTERNATIONAL OPERATIONS PTE LTD

Line Of Business

REGIONAL PRODUCT CHARTER

Parent Company

PROCTER & GAMBLE INTERNATIONAL OPERATIONS S A

(PERCENTAGE OF SHAREHOLDING: 100%)

Financial Elements

FY 2006

COMPANY

Sales : S$1,987,084,000

Networth : S$453,383,000

Paid-Up Capital : S$57,530,000

Net result : S$245,556,000

Net Margin(%) : 12.36

Return on Equity(%) : -

Leverage Ratio : 0.69

COMPANY IDENTIFICATION

^{Subject Company : PROCTER & GAMBLE INTERNATIONAL
OPERATIONS PTE LTD}

^{Former Name : DOLAND TRADING PTE LTD}

^{Business Address : 238A THOMSON ROAD}

^#21-01/10

^{NOVENA SQUARE}

^{Town : SINGAPORE}

^{Postcode :
307684}

^{County : -}

^{Country : Singapore}

^{Telephone : 6824 5000}

^{Fax : 6824 6200}

^{ROC Number : 200003934Z}

^{Reg. Town : -}

PREVIOUS IDENTIFICATION

^{DOLAND TRADING PTE LTD}

^{DATE OF CHANGE OF NAME:
08/08/2000}

SUMMARY

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

^{Legal Form :
Pte Ltd}

^{Date Inc. : 06/05/2000}

^{Previous Legal Form : -}

^{Summary year :
30/06/2006}

^{Sales : 1,987,084,000}

^{Networth : 453,383,000}

^{Capital :
-}

^{Paid-Up Capital : 57,530,000}

^{Employees :
-}

^{Net result : 245,556,000}

^{Share value : -}

^{AUDITOR: DELOITTE &
TOUCHE LLP}

^{BASED ON ACRA'S RECORD}

^{NO. OF SHARES CURRENCY AMOUNT}

^{ISSUED ORDINARY :
250,002 SGD 250,002.00}

^{ISSUED PREFERENCE : 572,800
SGD 57,280,000.00}

^{PAID-UP ORINARY : - SGD 250,002.00}

^{PAID-UP PREFERENCE: - SGD 57,280,000.00}

REFERENCES

^{Litigation : No}

^{Company status : TRADING}

^{Started : 06/05/2000}

PRINCIPAL(S)

^{PRAMOD AGARWAL G5715131K Director}

DIRECTOR(S)

^{CHAN CHOW PHENG S1298885J Company Secretary}

^{Appointed on : 01/06/2002}

^{Street : 59
TELOK BLANGAH HEIGHTS}

^#04-11

^{Town: SINGAPORE}

^{Postcode: 100059}

^{Country: Singapore}

^{TEO CHIN KEE S2622115C Company Secretary}

^{Appointed on :
01/06/2002}

^{Street : 1
ELIAS ROAD}

^#02-01

^{RIS GRANDEUR}

^{Town: SINGAPORE}

^{Postcode: 519929}

^{Country: Singapore}

^{PRAMOD AGARWAL G5715131K Director}

^{Appointed on :
01/10/2003}

^{Street : 61 GRANGE ROAD}

^#19-04

^{BEVERLY HILLS APARTMENTS}

^{Town: SINGAPORE}

^{Postcode: 249570}

^{Country: Singapore}

^{CHARLES ABDI LIM S2723258B Director}

^{Appointed on :
15/02/2004}

^{Street : 2
FIFTH AVENUE}

^#04-03

^{FIFTH AVENUE CONDOMINIUM}

^{Town: SINGAPORE}

^{Postcode: 268800}

^{Country: Singapore}

^{DEBORAH ANN
HENRETTA G5814226W Director}

^{Appointed on :
01/09/2005}

^{Street : 53 CLUNY PARK ROAD}

^{Town: SINGAPORE}

^{Postcode: 257501}

^{Country: Singapore}

^{JOANNE CREWES S2707651C
Director}

^{Appointed on :
01/06/2007}

^{Street : 25 CLAYMORE ROAD}

^#04-03

^{THE CLAYMORE}

^{Town: SINGAPORE}

^{Postcode: 229543}

^{Country: Singapore}

FORMER DIRECTOR(S)

^{CHAN WAI TENG PRISCILLA S1437234B}

^{KRUTTIVENTI VENKATA
SATYA ANAND S2660764G}

^{CHARLES VICTOR
BERGH 702116349}

^{WADE DUVALL
MIQUELON G5624788U}

^{VAIDYANATH SWAMY S2733463F}

ACTIVITY(IES)

^{PRODUCT DEVELOPMENT And
MARKETING Code:17585}

^{HOLDING COMPANIES Code:11320}

^{BUSINESS MANAGEMENT Code:3160}

^{BASED ON ACRA'S RECORD}

^{1) BUSINESS MANAGEMENT
AND CONSULTANCY SERVICES;}

^{REGIONAL PRODUCT CHARTER}

CHARGES

No Charges On Premises/Property In Our Database

PREMISES/PROPERTY INFORMATIONS

No Premises/Property Information In Our Databases

BANKERS

^{DBS BANK LTD.}

SHAREHOLDERS(S)

^{PROCTER & GAMBLE
INTERNATIONAL
822,802 Company}

^{Street : 47 ROUTE DE SAINT GEORGES}

^{1213 PETIT LANCY, GENEVA}

^Town:

^Postcode:

^{Country: Switzerland}

FORMER SHAREHOLDER(S)

^{MICHAEL TAY KWANG
HOW 1}

^{TAY MUI SIM
FLORENCE
1}

HOLDING COMPANY

^{PROCTER & GAMBLE
INTERNATIONAL UF28724W % :
100}

SUBSIDIARY(IES)

^{PROCTER AND GAMBLE KOREA IE C0.}

^{P&G NORTHEAST ASIA
PTE LTD}

PAYMENT HISTORY AND EXPERIENCES

^{Trade Morality: AVERAGE}

^{Liquidity : SUFFICIANT}

^{Payments : REGULAR}

^{Trend : LEVEL}

^{Financial Situation: AVERAGE}

FINANCIAL ELEMENTS

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

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

^{Date Account Lodged: 03/05/2007}

^{Balance Sheet Date: 30/06/2006 30/06/2005
30/06/2004}

^{Number of weeks: 52 52 52}

^{Consolidation Code: COMPANY COMPANY
COMPANY}

^---
ASSETS

^{Preliminary Exp 48,921,000 2,603,000
2,557,000}

^{Intangible Fixed
Assets: 73,341,000 73,341,000 73,341,000}

^{Tangible Fixed
Assets: 6,708,000 7,779,000 9,403,000}

^{Investments 67,597,000 67,597,000
67,597,000}

^{Total Fixed Assets: 196,567,000 151,320,000
152,898,000}

^{Inventories: 131,068,000 120,589,000 132,145,000}

^{Receivables: 68,483,000 100,216,000
92,584,000}

^{Cash,Banks,
Securitis: 26,008,000 19,717,000 14,966,000}

^{Other current assets: 292,623,000 553,906,000
287,456,000}

^{Total Current Assets:
518,182,000 794,428,000
527,151,000}

^{TOTAL ASSETS: 714,749,000
945,748,000
680,049,000}

^{---
LIABILITIES}

^{Equity capital: 57,530,000 823,000 823,000}

^{Reserves: -9,081,000 - 403,675,000}

^{Profit & loss
Account: 404,934,000 627,918,000 -}

^{Surplus equity:
56,707,000 -}

^{Total Equity: 453,383,000
685,448,000
404,498,000}

^{L/T deffered taxes: 1,805,000 582,000 -}

^{Total L/T Liabilities:
1,805,000 582,000 -}

^{Trade Creditors: 136,748,000 113,096,000 124,206,000}

^{Prepay. & Def.
charges: 15,478,000 12,781,000 23,120,000}

^{Provisions: 3,279,000 3,289,000 1,963,000}

^{Other Short term
Liab.: 104,056,000 130,552,000 126,262,000}

^{Total short term
Liab.: 259,561,000 259,718,000 275,551,000}

^{TOTAL LIABILITIES: 261,366,000 260,300,000 275,551,000}

^{---
PROFIT & LOSS ACCOUNT}

^{Net Sales 1,987,084,000 1,939,161,000 1,690,396,000}

^{Result of ordinary
operations}

^{NET RESULT BEFORE
TAX: 247,859,000 283,398,000 175,558,000}

^{Tax : 2,303,000 2,448,000 1,104,000}

^{Net
income/loss year: 245,556,000 280,950,000 174,454,000}

^{Interest Paid: 124,000 132,000 202,000}

^{Depreciation: 6,933,000 5,763,000 11,706,000}

^{Dividends: - -
14,000,000}

^{Wages and Salaries: 63,148,000 52,757,000
49,034,000}

RATIOS

^{30/06/2006 30/06/2005 30/06/2004}

^{Net result /
Turnover(%): 0.12 0.14
0.10}

^{Stock / Turnover(%): 0.07 0.06 0.08}

^{Net Margin(%): 12.36 14.49 10.32}

^{Return on Equity(%): 54.16 40.99
43.13}

^{Return on Assets(%): 34.36 29.71 25.65}

^{Dividends Coverage:
12.46}

^{Net Working capital: 258621000.00 534710000.00
251600000.00}

^{Cash Ratio: 0.10 0.08 0.05}

^{Quick Ratio: 0.36 0.46 0.39}

^{Current ratio: 2.00 3.06 1.91}

^{Receivables Turnover: 12.41
18.60 19.72}

^{Leverage Ratio: 0.69 0.43 0.83}

^{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 SEEN TO BE FAIR IN VIEW OF} ^{THE FOLLOWING:}

^{NET WORTH:}

^{THE BALANCE SHEET WAS
CONSIDERED PASSABLE ALTHOUGH NET WORTH DECLINED} ^{BY 33.86% FROM S$685,448,000 IN FY 2005
TO S$453,383,000. THIS} ^{WAS DUE TO LOWER ACCUMULATED PROFIT OF
S$453,383,000 (2005:} ^{S$684,625,000); A FALL OF 35.51% FROM THE PRIOR
FINANCIAL YEAR.}

^LEVERAGE:

^{IN THE SHORT-TERM,
SUBJECT WAS LARGELY FINANCED BY TRADE CREDITORS} ^{WHICH MADE UP 52.68% (2005: 43.55%) OF
THE TOTAL CURRENT LIABILITIES} ^{AND AMOUNTED TO S$136,748,000 (2005:
S$113,096,000). TRADE CREDITORS} ^{CONSISTED OF THE FOLLOWING}

^{* OUTSIDE PARTIED - 2006: S$101,271,000 (2005: S$80,146,000)}

^{* RELATED COMPANIES -
2006: S$35,477,000 (2005: S$32,950,000)}

^{IN ALL, LEVERAGE RATIO
ROSE FROM 0.43 TIMES TO 0.69 TIMES AS A RESULT} ^{OF A DECLINE IN TOTAL EQUITIES AND A
RISE IN TOTAL LIABILITIES.}

^LIQUIDITY:

^{IN GENERAL, SUBJECT'S
LIQUIDITY SITUATION WAS CONSIDERED PASSABLE} ^{ALTHOUGH NET WORKING CAPITAL AND LIQUIDITY RATIOS DECLINED.
CURRENT} ^{RATIO FELL TO 2.00 TIMES, DWON FROM 3.06 TIMES AND QUICK
RATIO}

^{DECREASED TO 0.36 TIMES
FROM 0.46 TIMES IN FY 2005.}

^{SIMILARLY, NET WORKING CAPITAL DECLINED BY
51.63% FROM S$534,710,000} ^{IN FY 2005 TO S$258,621,000.}

^{PROFITABILITY:}

^{SUBJECT POSTED AN INCREASE IN REVENUE BY
2.47% FROM S$1,939,161,000 TO} ^{S$1,987,084 IN FY 2006. HOWEVER, NET PROFIT FELL BY 12.60% TO S} ^{$245,556,000 (2005: S$280,950,000). HENCE, NET MARGIN FELL TO 12.36%} ^{(2005: 14.49%).}

^{DEBT SERVICING:}

^{DEBT SERVICING PROBLEMS MIGHT NOT BE EXPECTED
IF REVENUE AND EARNINGS} ^{CAN BE MAINTAINED OR IMPROVED AND PAYMENTS BY TRADE DEBTORS ARE} ^{FORTHCOMING. IT WAS NOTED THAT AVERAGE COLLECTION PERIOD HAS SHORTENED} ^{TO 12 DAYS (2005: 19 DAYS).}

^{NON-CURRENT ASSETS:}

^{THE FOLLOWING ITEMS WERE
CLASSIFIED UNDER PRELIMINARY:}

^{* LOANS TO EMPLOYEES -
2006: S$2,203,000 (2005: S$2,491,000)}

^{* OTHER RECEIVABLES - 2006: NIL (2005: S$112,000)}

^{* TRADEMARKS - 2006: S$46,718,000 (2005: NIL)}

^{NOTES TO THE FINANCIAL STATEMENTS:}

^{SHARE CAPITAL:}

^{BALANCE AT JULY 1, 2005:
ORDINARY SHARES - 2006: S$250,000}

^{(2005: S$250,000)}

^{BALANCE AT JULY 1, 2005:
REDEEMABLE PREFERENCE SHARES}

^{- 2006: S$573,000 (2005:
S$573,000)}

^{TRANSFER FROM SHARE PREMIUM
ACCOUNT - 2006: S$56,707,000 (2005: NIL)}

^{BALANCE AT JUNE 30, 2006
- 2006: S$57,530,000 (2005: S$823,000)}

^{CONTIGENT LIABILITIES:}

^{* GUARANTEES (UNSECURED)
- 2006: S$63,600,000 (2005: NIL)}

BACKGROUND/OPERATION

^{THE COMPANY WAS INCORPORATED
IN THE REPUBLIC OF SINGAPORE ON} ^{06/05/2000 AS A LIMITED PRIVATE COMPANY AND IS TRADING UNDER ITS} ^{NAMESTYLE AS "DOLAND TRADING PTE LTD".}

^{SUBSEQUENTLY ON
08/08/2000, THE COMPANY CHANGED TO ITS PRESENT} ^{NAMESTYLE OF "PROCTER & GAMBLE
INTERNATIONAL OPERATIONS PTE LTD".}

^{THE COMPANY HAS AN
ORDINARY ISSUED AND PAID-UP} ^{CAPITAL OF 250,002 SHARES, OF A VALUE OF S$250,002 AND PREFERENCE} ^{ISSUED AND PAID-UP CAPITAL OF 572,800 SHARES, OF A VALUE OF} ^{S$57,280,000.}

^{PRINCIPAL ACTIVITIES:}

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

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

^{1) BUSINESS MANAGEMENT
AND CONSULTANCY SERVICES; REGIONAL PRODUCT}

^CHARTER

^{2) OTHER INVESTMENT
HOLDING COMPANIES}

^{DURING THE FINANCIAL YEAR
UNDER REVIEW, THE PRINCIPAL ACTIVITIES OF} ^{THE COMPANY CONSISTS OF REGIONAL PRODUCT CHARTER.}

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

^{BRANDS INCLUDE:}

^{* PAMPERS}

^{* TIDE}

^{* ARIEL}

^{* ALWAYS}

^{* PANTENE}

^{* BOUNTY}

^{* FOLGERS}

^{* PRINGLES}

^{* CHARMIN}

^{* DOWNY}

^{* IAMS}

^{* CREST}

^{* ACTONEL}

^{* OLAY}

^{AGENTS AND DISTRIBUTORS
OF:}

^{* PAMPERS (CONSUMER
PRODUCTS) USA}

^{* WHISPER (CONSUMER
PRODUCTS) USA}

^{* REJOICE (CONSUMER
PRODUCTS) USA}

^{* OIL OF ULAN (BEAUTY
CARE PRODUCTS) USA}

^{* PANTENE (CONSUMER
PRODUCTS) USA}

^{* VIDAL SASSOON (CONSUMER
PRODUCTS) USA}

^{* HEAD &
SHOULDERS (CONSUMER PRODUCTS)
USA}

^{* PRINGLES (SNACKS) USA}

^{* SK-II (COSMETICS) USA}

^{FROM THE TELE-INTERVIEW
CONDUCTED, SUBJECT PERSONNEL WAS} ^{ONLY WILLING TO CONFIRM ITS ADDRESS AND CONTACTS. NO OTHER TRADE} ^{INFORMATION WAS AVAILABLE}

^{THE COMPANY IS A WHOLLY-OWNED
SUBSIDIARY OF PROCTER & GAMBLE} ^{INTERNATIONAL OPERATIONS S.A., INCORPORATED IN SWITZERLAND.} ^{THE
COMPANY'S ULTIMATE HOLDING COMPANY IS THE PROCTER & GAMBLE} ^{COMPANY,
INCORPORATED IN THE UNITED STATES OF AMERICA.}

^{REGISTERED ADDRESS:}

^{138 ROBINSON ROAD}

^#17-00

^{THE CORPORATE OFFICE}

^{SINGAPORE 068906}

^{DATE OF CHANGE OF
ADDRESS: 01/06/2002}

^{BUSINESS ADDRESS:}

^{238A THOMSON ROAD}

^#21-01/10

^{NOVENA SQUARE}

^{SINGAPORE 307684}

^{- RENTED PREMISE}

^{- PREMISE OWNED BY:
NOVENA SQUARE INVESTMENTS LTD}

^WEBSITE:

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

^EMAIL:

MANAGEMENT

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

^{1) PRAMOD AGARWAL, AN
INDIAN}

^{- BASED IN SINGAPORE.}

^{2) DEBORAH ANN HENRETTA,
AN AMERICAN}

^{- BASED IN SINGAPORE.}

^{3) JOANNE CREWES, A
SINGAPORE PERMANENT RESIDENT}

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

^{4) CHARLES ABDI LIM, 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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