MIRA INFORM REPORT

Report Date :

16.06.2008

IDENTIFICATION DETAILS

Name :	FUJINON SINGAPORE PTE. LTD.

Formerly Known As :	^{FUJI KOKI SINGAPORE PTE LTD}

Registered Office :	^{211 Henderson Road} ^#10-04 ^{Henderson Industrial Park}

Country :	Singapore

Financials (as on) :	31.12.2007

Date of Incorporation :	^19.02.1991

Com. Reg. No.:	^199100746E

Legal Form :	^{Pte Ltd}

Line of Business :	Importers, Exporters and Services of Optical and Medical Precision Products, Photographic Equipment and Supplies, Optical Precision Measuring Products and related Accessories

RATING & COMMENTS

MIRA’s Rating :

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Status :	Satisfactory

Payment Behaviour :	Regular

Litigation :	Exists

Subject Company

FUJINON SINGAPORE PTE. LTD.

Line Of Business

IMPORTERS, EXPORTERS AND SERVICES OF OPTICAL AND MEDICAL PRECISION

PRODUCTS, PHOTOGRAPHIC EQUIPMENT AND SUPPLIES, OPTICAL PRECISION

MEASURING PRODUCTS AND RELATED ACCESSORIES

Parent Company

FUJINON CORPORATION

(PERCENTAGE OF SHAREHOLDINGS: 100.00%)

Financial Elements

FY 2007

COMPANY

Sales : US$ 15,846,207

Networth : US$ 2,373,685

Paid-Up Capital : US$ 843,351

Net result : US$ 805,422

Net Margin(%) : 5.08

Return on Equity(%) : 33.93

Leverage Ratio : 2.13

COMPANY IDENTIFICATION

^{Subject
Company :
FUJINON SINGAPORE PTE. LTD.}

^{Former
Name :
FUJI KOKI SINGAPORE PTE LTD}

^{Business
Address :
211 HENDERSON ROAD}

^#10-04

^{HENDERSON INDUSTRIAL PARK}

^{Town :
SINGAPORE}

^{Postcode :
159552}

^{Country :
Singapore}

^{Telephone :
6276 4988}

^{Fax :
6276 6911}

^{ROC
Number :
199100746E}

^{Reg.
Town :
-}

PREVIOUS IDENTIFICATION

^{FUJI KOKI
SINGAPORE PTE LTD DATE OF CHANGE
OF NAME: 01/10/2004}

SUMMARY

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

^{Legal Form : Pte Ltd}

^{Date Inc. :}^19/02/1991

^{Previous Legal Form :}^-

^{Summary year :}^31/12/2007

^{Sales :}^15,846,207

^{Networth :}^2,373,685

^{Capital :
-}

^{Paid-Up Capital :}^843,351

^{Employees : -}

^{Net result :}^805,422

^{Share value : 1}

^{Auditor :}^{ERNST & YOUNG}

^{BASED ON ACRA'S
RECORD}

^{NO. OF SHARES CURRENCY AMOUNT}

^{ISSUED
ORDINARY 1,250,000 SGD 1,250,000.00}

^{PAID-UP
ORDINARY - SGD 1,250,000.00}

REFERENCES

^{Litigation : Yes}

^{Company status : TRADING}

^{Started :
19/02/1991}

PRINCIPAL(S)

^{MASAKI YAMADA G5749042Q Managing Director}

DIRECTOR(S)

^{TSUJITA
AKIRA
TF1579488 Director}

^{Appointed
on : 30/06/2003}

^{Street
: 3-45-8 NAKANO, NAKANO-KU}

^{Town: TOKYO}

^{Postcode: 164-0001}

^{Country: Japan}

^{HIGUCHI
TAKESHI
MR7028224 Director}

^{Appointed
on : 30/06/2004}

^{Street
: 9-16-707 HIGASHINAKA-CHO,}

^{URAWA-KU SAITAMA-CITY}

^{Town: SAITAMA}

^{Postcode: 330-0056}

^{Country: Japan}

^{MASAKI
YAMADA
G5749042Q Managing Director}

^{Appointed
on : 08/06/2004}

^{Street
: 12 ORANGE GROVE ROAD}

^#04-03

^{Town: SINGAPORE}

^{Postcode: 258353}

^{Country: Singapore}

^{MASAKI
YAMADA
G5749042Q Director}

^{Appointed
on : 08/06/2004}

^{Street
: 12 ORANGE GROVE ROAD}

^#04-03

^{Town: SINGAPORE}

^{Postcode: 258353}

^{Country: Singapore}

^{LIM
KA BEE
S2581084H Company Secretary}

^{Appointed
on : 01/10/2007}

^{Street
: 49 HILLVIEW AVENUE}

^#01-07

^{HILLINGTON GREEN}

^{Town: SINGAPORE}

^{Postcode: 669615}

^{Country: Singapore}

FORMER DIRECTOR(S)

^{TAN
KENG IN MARINA
S1296939B}

^{TAN
SAN-JU
S1495769C}

^{NISHIYAMA
KATSUYA
S2636934G}

^{MATSUMOTO
KEN K1229734}

^{MINOSHIMA
HIROAKI
L7677528}

^{MASAMICHI
KUMAZAWA TZ6032402}

^{YASUO
HONDA TE3896054}

^{SUSUMU
YAMADA MP6047797}

^{TAKESHI
SUMIYA G5527947R}

^{KOICHIRO
HASHIMOTO
TF7523399}

^{YEO
POH NOI CAROLINE
S1340579D}

^{MUNEYUKI
MASAYUKI
TF0789670}

^{WONG
CHEE MENG LAWRENCE S1824079C}

ACTIVITY(IES)

^{OPTICAL GOODS Code: 15550}

^{IMPORTERS And EXPORTERS Code: 11760}

^{BASED ON ACRA'S RECORD}

^{1) WHOLESALE OF OPTICAL AND PHOTOGRAPHIC
EQUIPMENT AND SUPPLIES}

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

CHARGES

No Charges On Premises/Property In Our Database

PREMISES/PROPERTY INFORMATIONS

No Premises/Property Information In Our Databases

BANKERS

^{THE BANK OF
TOKYO-MITSUBISHI UFJ,} ^LTD

^{(THE BANK OF
TOKYO-MITSUBISHI,} ^LTD)

SHAREHOLDERS(S)

^{FUJINON
CORPORATION
1,250,000 Company}

^{Street : 324, UETAKE-CHO 1-CHOME}

^{KITA-KU,
SAITAMA-SHI}

^{Town: -}

^{Postcode: -}

^{Country: Japan}

FORMER SHAREHOLDER(S)

^{FUJI PHOTO OPTICAL
CO LIMITED
1,250,000}

^{NISHIYAMA
KATSUYA
1}

^{MAEDA YOSHIMI 1}

HOLDING COMPANY

^{FUJINON
CORPORATION
UF07146E % : 100}

SUBSIDIARY(IES)

No Participation In Our Database

PAYMENT HISTORY AND EXPERIENCES

^{Trade
Morality :
AVERAGE}

^{Liquidity
: SUFFICIENT}

^{Payments
: REGULAR}

^{Trend
:
UPWARD}

^{Financial
Situation : AVERAGE}

LITIGATION(S)

^{Type Of Case: Magistrate Court - W/S}

^{Case Number: MCS007469/00}

Defendant FUJINON SINGAPORE PTE. LTD. ROC # : 199100746E

FINANCIAL ELEMENTS

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

^{Date
Account Lodged:
07/04/2008}

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

^{Number
of weeks:
52
52}

^{Consolidation
Code: COMPANY COMPANY}

^{--- ASSETS} ^---

^{Tangible
Fixed Assets:
28,027
9,441}

^{Investments 14,182 14,182}

^{Total Fixed Assets: 42,209 23,623}

^{Inventories: 1,985,338 1,550,359}

^{Receivables: 3,074,663 4,093,274}

^{Cash,Banks,
Securitis: 2,278,828 1,541,926}

^{Other
current assets:
44,602
33,294}

^{Total Current Assets: 7,383,431 7,218,853}

^{TOTAL ASSETS: 7,425,640 7,242,476}

^{--- LIABILITIES} ^---

^{Equity
capital: 843,351 843,351}

^{Profit
& lost Account: 1,530,334 957,290}

^{Total Equity: 2,373,685 1,800,641}

^{Other
long term Liab.:
-
242}

^{Total L/T Liabilities: - 242}

^{Trade
Creditors: 4,216,171 4,869,557}

^{Short
term liabilities:
257
2,905}

^{Provisions: 638,989 378,114}

^{Other
Short term Liab.:
24,291
33,963}

^{Prepay.
& Def. charges:
172,247
157,054}

^{Total short term Liab.: 5,051,955 5,441,593}

^{TOTAL LIABILITIES: 5,051,955 5,441,835}

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

^{Net
Sales
15,846,207 13,107,104}

^{Purchases,Sces
& Other Goods:
12,701,423
10,860,015}

^{Gross
Profit:
3,144,784
2,247,089}

^{NET
RESULT BEFORE TAX:
955,422
580,946}

^{Tax
:
150,000
109,342}

^{Net
income/loss year:
805,422
471,604}

^{Interest
Paid:
684
647}

^{Depreciation: 11,269 5,528}

^{Dividends: 232,378 265,468}

^{Directors
Emoluments:
175,661
122,742}

^{Wages
and Salaries:
640,731
592,490}

^{Financial
Income:
33,842
26,127}

RATIOS

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

^{Net
result / Turnover(%): 0.05 0.04}

^{Stock
/ Turnover(%): 0.13 0.12}

^{Net
Margin(%): 5.08 3.60}

^{Return
on Equity(%): 33.93 26.19}

^{Return
on Assets(%): 10.85 6.51}

^{Dividends
Coverage: 3.47 1.78}

^{Net
Working capital: 2331476.00 1777260.00}

^{Cash
Ratio: 0.45 0.28}

^{Quick
Ratio: 1.06 1.04}

^{Current
ratio: 1.46 1.33}

^{Receivables
Turnover: 69.85 112.43}

^{Leverage
Ratio: 2.13 3.02}

^{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

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

^{NET WORTH:}

^{THE
BALANCE SHEET WAS PASSABLE WITH NET WORTH IMPROVED BY} ^{31.82% FROM
US$1,800,641 IN FY 2006 TO US$2,373,685 IN FY 2007. THIS} ^{WAS DUE TO
HIGHER RETAINED PROFITS OF US$1,530,334 (2006: US$957,290);} ^{A RISE
OF 59.86% FROM THE PRIOR FINANCIAL YEAR.}

^LEVERAGE:

^{IN
THE SHORT-TERM, SUBJECT WAS LARGELY FINANCED BY TRADE CREDITORSWHICH MADE UP 83.46%
(2006: 89.49%) OF THE TOTAL CURRENT LIABILITIES} ^{AND AMOUNTED
TO US$4,216,171 (2006: US$4,869,557). THE BREAKDOWN WAS} ^AS ^FOLLOWS:

^{*EXTERNAL
PARTIES - 2007: US$15,607 (2006: US$61,658)}

^{*HOLDING
COMPANY - 2007: US$4,200,564 (2006: US$4,806,438)}

^{*RELATED
COMPANY - 2007: NIL (2006: US$1,461)}

^{IN
ALL, LEVERAGE RATIO FELL TO 2.13 TIMES (2006: 3.02 TIMES) AS A} ^{RESULT OF A
DROP IN TOTAL LIABILITIES AND A RISE IN TOTAL EQUITY.}

^LIQUIDITY:

^{IN
GENERAL, SUBJECT'S LIQUIDITY SITUATION WAS PASSABLE AS SEEN FROM} ^{THE RISE IN
NET WORKING CAPITAL BY 31.18% TO US$2,331,476 (2006: US}

^$1,777,260).

^{BOTH
CURRENT AND QUICK RATIOS ROSE TO 1.46 TIMES (2006: 1.33 TIMES)} ^{AND 1.06
TIMES (2006: 1.04 TIMES) RESPECTIVELY.}

^{CASH
AND CASH EQUIVALENTS ROSE BY 47.79% TO US$2,278,828 (2006: US}

^{$1,541,926)
AND COMPRISED OF:}

^{*CASH
AND BANK BALANCES - 2007: US$878,828 (2006: US$1,041,926)}

^{*FIXED
DEPOSITS - 2007: US$1,400,000 (2006: US$500,000)}

^{PROFITABILITY:}

^{REVENUE
ROSE BY 20.90% FROM US$13,107,104 IN FY 2006 TO US}

^{$15,846,207
AND NET PROFIT ROSE BY 70.78% TO US$805,422 (2006: US}

^$471,604).

^{HENCE,
NET MARGIN ROSE TO 5.08% (2006: 3.60%).}

^{DEBT SERVICING:}

^{DEBT
SERVICING PROBLEMS MIGHT NOT BE EXPECTED IF REVENUE AND EARNINGS} ^{CAN BE
MAINTAINED AND PAYMENTS BY TRADE DEBTORS ARE FORTHCOMING. IN} ^{ADDITION,
THE AVERAGE COLLECTION PERIOD WAS SHORTENED TO 70 DAYS} ^{(2006: 112
DAYS).}

^{NOTES TO THE FINANCIAL STATEMENTS:}

^{CONTINGENT LIABILITIES}

^{*BANKER
GUARANTEES - 2007: US$391,452 (2006: US$64,482)}

^{BANK
GUARANTEES ARE SECURED BY A LETTER OF GUARANTEE FROM ITS HOLDING} ^COMPANY.

BACKGROUND/OPERATION

^{THE
COMPANY WAS INCORPORATED IN THE REPUBLIC OF SINGAPORE ON} ^{19/02/1991
AS A LIMITED PRIVATE COMPANY AND IS TRADING UNDER ITS} ^{NAMESTYLE AS
"FUJI KOKI SINGAPORE PTE. LTD.".}

^{SUBSEQUENTLY
ON 01/10/2004, THE COMPANY CHANGED TO ITS PRESENT} ^{NAMESTYLE AS
"FUJINON SINGAPORE PTE. LTD.".}

^{THE
COMPANY HAS AN ISSUED AND PAID-UP CAPITAL OF} ^{1,250,000
SHARES OF A VALUE OF S$1,250,000.}

^{PRINCIPAL
ACTIVITIES:}

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

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

^{1)
WHOLESALE OF OPTICAL AND PHOTOGRAPHIC EQUIPMENT AND SUPPLIES}

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

^{AND
EXPORTERS)}

^{DURING
THE FINANCIAL YEAR UNDER REVIEW, THE PRINCIPAL ACTIVITIES OF} ^{THE COMPANY
CONSIST OF IMPORTERS, EXPORTERS AND SERVICES OF OPTICAL} ^{AND MEDICAL
PRECISION PRODUCTS, PHOTOGRAPHIC EQUIPMENT AND SUPPLIES,} ^{OPTICAL
PRECISION MEASURING PRODUCTS AND RELATED ACCESSORIES.}

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

^{BACKGROUND
OF FUJINON CORPORATION:}

^{IN
1944, FUJINON CORPORATION WAS ESTABLISHED TO DEVELOP THE OPTICAL} ^{INSTRUMENT
BUSINESS OF FUJI PHOTO FILM GROUP. BY INVESTING IN} ^{EXTENSIVE RESEARCH
AND DEVELOPMENT, THE GROUP HAVE COMBINED OPTICAL} ^{TECHNOLOGIES WITH
COMPLEX TECHNOLOGIES IN A STRATEGIC FORMULA. WITH} ^{1,500 EMPLOYEES,
THEY CONTINUE TO FOCUS ON THE FUTURE.}

^{SUBJECT
ENGAGES IN THE FOLLOWING ACTIVITIES:}

^{*
THE SALES AND SERVICE OF THE COMPLETE RANGE OF FUJINON}

^{TECHNOLOGICALLY
ADVANCED OPTICAL PRODUCTS}

^{PRODUCTS
DEALINGS:}

^{*
BROADCAST TV LENSES}

^{*
REMOTE PAN/TILT SYSTEMS}

^{*
CCTV LENSES}

^{*
FIBER SCOPES & VIDEO ENDOSCOPES}

^*
BINOCULARS

^{*
STABISCOPES}

^{*
COMPONENTS & PARTS}

^{*
OTHER OPTICAL RELATED PRODUCTS}

^{TRADE
NAMES (PRODUCTS):}

^{*
FUJINON - MEDICAL EQUIPMENT,TV LENSES & BINOCULAR}

^MARKETS:

^{*
SOUTH-EAST ASIA (ASEAN)}

^{*
SOUTH ASIA (INDIA SUB-CONTINENT)}

^{TERMS
OF PAYMENT:}

^{*
TRADE AND OTHER PAYABLES: 30-90 DAYS TERM}

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

^{*
JAPANESE CHAMBER OF COMMERCE & INDUSTRY}

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

^{NUMBER
OF EMPLOYEES:}

^{*
COMPANY - 2008: 20}

^{NO
OTHER TRADE INFORMATION WAS AVAILABLE}

^{ITS
IMMEDIATE AND ULTIMATE HOLDING COMPANY IS FUJINON CORPORATION,}

^{WHICH
IS INCORPORATED IN JAPAN.}

^{NUMBER
OF EMPLOYEES (31 DECEMBER):}

^{*
COMPANY - 2006: NOT AVAILABLE (2005: NOT AVAILABLE; 2004: 20;}

^2003:
15)

^{*
GROUP - 2006: - (2005: -)}

^{REGISTERED
AND BUSINESS ADDRESS:}

^{211
HENDERSON ROAD}

^{#10-04
HENDERSON INDUSTRIAL PARK}

^{SINGAPORE
159552}

^{DATE
OF CHANGE OF ADDRESS: 23/04/2001}

^{-
RENTED PREMISE}

^{-
PREMISE OWNED BY: F J BENJAMIN HOLDINGS LTD}

^WEBSITE:

^{http://www.fujinon.com.sg}

^EMAIL:

^{fujinon@fujinon.com.sg}

MANAGEMENT

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

^{1)
MASAKI YAMADA, A JAPANESE}

^{-
BASED IN SINGAPORE.}

^{2)
HIGUCHI TAKESHI, A JAPANESE}

^{-
BASED IN JAPAN.}

^{3)
TSUJITA AKIRA, A JAPANESE}

^{-
BASED IN JAPAN.}

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%)

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