MIRA INFORM REPORT

Report Date :

19.06.2008

IDENTIFICATION DETAILS

Name :	SUDIMA INTERNATIONAL PTE LTD

Registered Office :	151 Chin Swee Road, #09-08, Manhattan House, 169876

Country :	Singapore

Financials (as on) :	30.09.2007

Date of Incorporation :	^27.01.1994

Com. Reg. No.:	^199400641G

Legal Form :	^{Pte Ltd}

Line of Business :	^{Trading and Acting as Commission Agents}

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 :	Clear

Subject Company

SUDIMA INTERNATIONAL PTE LTD

Line Of Business

^{TRADING
AND ACTING AS COMMISSION AGENTS.}

Parent Company

^{FORTUNE HOLDINGS
LTD}

(PERCENTAGE OF SHAREHOLDING: 98.75%)

Financial Elements

FY 2007

COMPANY

Sales : S$99,690,561

Networth : S$ 3,447,362

Paid-Up Capital : S$ 2,000,000

Net result : S$ 422,021

Net Margin(%) : 0.42

Return on Equity(%) : 12.24

Leverage Ratio : 2.95

COMPANY IDENTIFICATION

^{Subject
Company : SUDIMA INTERNATIONAL PTE LTD}

^{Former
Name :}

^{Business
Address : 151 CHIN SWEE ROAD}

^#09-08

^{MANHATTAN HOUSE}

^{Town : SINGAPORE}

^{Postcode : 169876}

^{County :}

^{Country : Singapore}

^{Telephone : 6732 7180}

^{Fax : 6732 7125}

^{ROC
Number :
199400641G}

^{Reg.
Town :}

SUMMARY

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

^{Legal Form :}^{Pte Ltd}

^{Date Inc. :}^27/01/1994

^{Previous Legal Form : -}

^{Summary year :}^30/09/2007

^{Sales :}^99,690,561

^{Networth :}^3,447,362

^{Capital :
-}

^{Paid-Up Capital :}^2,000,000

^{Employees :}¹³

^{Net result :}^422,021

^{Share value : -}

^{Auditor :}^{SASHI KALA DEVI ASSOCIATES}

^{BASED
ON ACRA'S RECORD}

^{NO OF SHARE CURRENCY AMOUNT}

^{ISSUED
ORDINARY 2,000,000 SGD 2,000,000.00}

^{PAID-UP
ORDINARY - SGD 2,000,000.00}

REFERENCES

^{Litigation : No}

^{Company
status : TRADING}

^{Started
:
27/01/1994}

PRINCIPAL(S)

^{SANGITA
JHUNJHUWALA
S2597941I Director}

DIRECTOR(S)

^{ANIL
KUMAR JHUNJHNUWALA
S2597940J Director}

^{Appointed
on : 01/01/2005}

^{Street
: 5 ALLAMANDA GROVE}

^{Town: SINGAPORE}

^{Postcode: 269983}

^{Country: Singapore}

^{MANOJ
KUMAR JHUNJHNUWALA E215636 Director}

^{Appointed
on : 22/12/2000}

^{Street
: 23 ROBINSON ROAD}

^{6TH FLOOR}

^Town:

^Postcode:

^{Country: Hong Kong}

^{LAXMI
NIWAS JHUNJHNUWALA
S2693981Z Director}

^{Appointed
on : 27/01/1994}

^{Street
: 5 ALLAMANDA GROVE}

^{Town: SINGAPORE}

^{Postcode: 269983}

^{Country: Singapore}

^{SANGITA
JHUNJHUWALA
S2597941I Director}

^{Appointed
on : 01/07/1998}

^{Street
: 5 ALLAMANDA GROVE}

^{Town: SINGAPORE}

^{Postcode: 269983}

^{Country: Singapore}

^{JAMES
METHODIUS S/O CYRIL METHODIS S0680660J
Company Secretary}

^{Appointed
on : 10/01/2005}

^{Street
: 132 GRANGE ROAD}

^{Town: SINGAPORE}

^{Postcode: 249606}

^{Country: Singapore}

FORMER DIRECTOR(S)

^{WONG
LAI LENG S1176982I}

^{DINESH
KUMAR JHUNJHNUWALA
B099870}

^{SUDESH
KUMAR JHUNJHNUWALA
Q224043}

ACTIVITY(IES)

^{IMPORTERS
And EXPORTERS
Code:11760}

^{TIMBER
- WHSLE Code:21690}

^{BASED
ON ACRA'S RECORD}

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

CHARGES

^{Date: 18/03/2004}

^{Comments
: CHARGE NO: C200401283}

^{AMOUNT
SECURED: 0.00 AND ALL MONIES OWING}

^{CHARGEE(S):
OVERSEA-CHINESE BANKING CORPORATION LIMITED}

^{Date: 28/03/2001}

^{Comments
: CHARGE NO: 200101436 (DISCHARGED)}

^{AMOUNT
SECURED: 0.00 AND ALL MONIES OWING}

^{CHARGEE(S):
STANDARD CHARTERED BANK}

^{Date: 08/04/2008}

^{Comments
: CHARGE NO: C200803217}

^{AMOUNT
SECURED: 0.00 AND ALL MONIES OWING}

^{CHARGEE(S):
UCO BANK}

PREMISES/PROPERTY INFORMATIONS

^{Date: 19/06/2008}

^{Estimated
Value : Tax rate: 10}

^{Site
Address : 151 CHIN SWEE ROAD}

^{#09-08
MANHATTAN HOUSE}

^{Town: SINGAPORE}

^County:

^{Postcode: 169876}

^{Country: Singapore}

^{Annual
Value: 21,700}

* 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

^{STANDARD
CHARTERED BANK}

^{OVERSEA-CHINESE
BANKING CORPORATION LIMITED}

^UCO
BANK

SHAREHOLDERS(S)

^{ANIL
KUMAR JHUNJHNUWALA
5,000 Private Person}

^{Street
: 5 ALLAMANDA GROVE}

^{Town: SINGAPORE}

^{Postcode: 269983}

^{Country: Singapore}

^{DINESH
KUMAR JHUNJHNUWALA
5,000 Private Person}

^{Street
: 23 ROBINSON ROAD}

^{6TH FLOOR}

^Town:

^Postcode:

^{Country: Hong Kong}

^{MANOJ
KUMAR JHUNJHNUWALA
5,000 Private Person}

^{Street
: 23 ROBINSON ROAD}

^{6TH FLOOR}

^Town:

^Postcode:

^{Country: Hong Kong}

^{SUDESH
KUMAR JHUNJHNUWALA 5,000 Private Person}

^{Street
: 23 ROBINSON ROAD}

^{6TH FLOOR}

^Town:

^Postcode:

^{Country: Hong Kong}

^{LAXMI
NIWAS JHUNJHNUWALA
5,000 Private Person}

^{Street
: 5 ALLAMANDA GROVE}

^{Town: SINGAPORE}

^{Postcode: 269983}

^{Country: Singapore}

^{FORTUNE
HOLDINGS LTD
1,975,000 Company}

^{Street
: BANK OF NOVA SCOTIA
BUILDING}

^{P O BOX 884}

^{GRAND CAYMAN, BWI}

^Town:

^Postcode:

^{Country: Cayman Islands}

HOLDING COMPANY

^{FORTUNE
HOLDINGS LTD
UF11272N % : 98.75}

SUBSIDIARY(IES)

No Participation In Our Database

PAYMENT HISTORY AND EXPERIENCES

^{Trade
Morality :
AVERAGE}

^{Liquidity
:
SUFFICIENT}

^{Payments
: REGULAR}

^{Trend
:
UPWARD}

^{Financial
Situation : GOOD}

FINANCIAL ELEMENTS

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

^{Audit
Qualification:        UNQUALIFIED
(CLEAN)        UNQUALIFIED (CLEAN)}  ^{Date
Account Lodged:
14/02/2008}

^{Balance Sheet
Date: 30/09/2007 30/09/2006}

^{Number of
weeks: 52
52}

^{Consolidation
Code: COMPANY COMPANY}

^{--- ASSETS ---}

^{Tangible Fixed
Assets: 1,113,548 785,445}

^{Total
Fixed Assets:
1,113,548
785,445}

^{Inventories: 20,506 71,368}

^{Receivables: 10,333,944 11,549,393}

^{Cash,Banks,
Securitis: 1,338,156 1,748,676}

^{Other current
assets: 822,268 709,703}

^{Total
Current Assets:
12,514,874
14,079,140}

^{TOTAL
ASSETS:
13,628,422
14,864,585}

^{--- LIABILITIES ---}

^{Equity
capital:
2,000,000
2,000,000}

^{Reeval.
Reserves:
255,075}

^{Profit & lost Account: 1,192,287 770,266}

^{Total
Equity:
3,447,362
2,770,266}

^{L/T deffered
taxes: 800 800}

^{Other long term Liab.: 48,414 64,138}

^{Total
L/T Liabilities:
49,214
64,938}

^{Trade
Creditors:
9,273,788
11,071,675}

^{Prepay. & Def.
charges: 27,827 32,279}

^{Short term
liabilities:
15,724
15,724}

^{Due to Bank: 6,526}

^{Provisions: 43,919 52,275}

^{Other Short term
Liab.: 764,062 857,428}

^{Total
short term Liab.:
10,131,846
12,029,381}

^{TOTAL
LIABILITIES:
10,181,060
12,094,319}

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

^{Net Sales 99,690,561 71,037,688}

^{Purchases,Sces
& Other Goods: 95,598,501 67,866,455}

^{Gross Profit: 4,092,060 3,171,233}

^{Result of ordinary
operations 1,580,092 1,226,918}

^{NET RESULT BEFORE
TAX: 465,976 335,869}

^{Tax :
43,955
52,275}

^{Net income/loss
year: 422,021 283,594}

^{Interest Paid: 598,567 501,578}

^{Depreciation: 62,555 37,164}

^{Directors
Emoluments:
141,500
173,600}

^{Wages and
Salaries: 974,781 890,438}

^{Financial
Income:
47,714
34,574}

RATIOS

                             ^{30/09/2007                  30/09/2006}  ^{Turnover per employee:     7668504.69                 5464437.54}  ^{Fin.
Charges / Turnover(%):          0.01                       0.01}  ^{Net Margin(%):
0.42
0.40}  ^{Return on Equity(%):         12.24                      10.24}  ^{Return on Assets(%):          3.10                       1.91}  ^{Net Working capital:
2383028.00
2049759.00}  ^{Cash Ratio:                 0.13                       0.15}  ^{Quick Ratio:                1.15                       1.11}  ^{Current ratio:
1.24
1.17}  ^{Receivables Turnover:         37.32                      58.53}  ^{Leverage Ratio:                       2.95                                     4.37}

^{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)/1000}

^{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 WITH NET WORTH IMPROVED BY} ^{24.44% FROM
S$2,770,266 IN 2006 TO S$3,447,362 IN 2007. THIS WAS DUE} ^{TO HIGHER
ACCUMULATED PROFIT OF S$1,192,287 (2006: S$770,266); A RISE} ^{OF
54.79% FROM THE PRIOR FINANCIAL YEAR.}

^LEVERAGE:

^{IN THE SHORT-TERM,
SUBJECT WAS LARGELY FINANCED BY TRADE CREDITORS} ^{WHICH MADE
UP 91.53% (2006: 92.04%) OF THE TOTAL CURRENT LIABILITIES} ^{AND
AMOUNTED TO S$9,273,788 (2006: S$11,071,675). THE BREAKDOWN WAS AS} ^FOLLOWS:

^{* TRADE CREDITORS - 2007: S$1,179,084 (2006:
S$1,984,189)}

^{* AMOUNT DUE TO RELATED PARTIES (TRADE) -
2007: NIL (2006: S$732,661)}

^{* BILLS PAYABLE (SECURED) - 2007: S$8,041,762
(2006: S$8,065,942)}

^{* ADVANCES RECEIVED (TRADE) - 2007: S$52,942
(2006: S$288,883)}

^{BANK
OVERDRAFT WHICH CLASSIFIED AS DUE TO BANKS AND AMOUNTED TO S$6,526}

^(2006:
NIL).

^{OVERALL,
THE LEVERAGE RATIO HAD IMPROVED TO 2.95 TIMES (2006: 4.37}

^{TIMES),
INDICATING THAT THE COMPANY'S TOTAL LIABILITIES WERE LESS}

^{SUBSTANTIAL
IN RELATION TO ITS TOTAL EQUITY.}

^LIQUIDITY:

^{IN GENERAL,
SUBJECT'S LIQUIDITY SITUATION WAS CONSIDERED PASSABLE AS SEEN FROM NET WORKING
CAPITAL AND LIQUIDITY RATIOS. BOTH CURRENT AND QUICK RATIOS ROSE TO 1.24 TIMES
(2006: 1.17 TIMES) AND 1.15 TIMES (2006: 1.11 TIMES) RESPECTIVELY.}

^{NET
WORKING CAPITAL INCREASED BY 16.26% FROM S$2,049,759 IN 2006 TO} ^{S$2,383,028
IN 2007.}

^{CASH
AND CASH EQUIVALENTS FELL BY 23.48% FROM S$1,748,676 IN 2006 TO}

^{S$1,338,156
IN 2007. BREAKDOWN WAS AS FOLLOWS:}

^{* CASH IN HAND - 2007: S$ 12,604 (2006: S$ 27,647)}

^{* CASH AT BANK - 2007: S$389,701 (2006: S$768,382)}

^{* FIXED DEPOSIT - 2007: S$935,851 (2006:
S$952,647)}

^{PROFITABILITY:}

^{REVENUE
POSTED AN INCREASE OF 40.33% FROM S$71,037,688 IN 2006 TO}

^{S$99,690,561
AND NET PROFIT ROSE BY 48.81% TO S$422,021 (2006:}

^{S$283,594).
HENCE, NET MARGIN ROSE TO 0.42% (2006: 0.40%).}

^{REVENUE
CONSISTED OF:}

^{* SALE OF AGRO PRODUCTS, LOGS AND MEDICINE -
2007: S$99,690,561}

^{(2006:
S$71,037,688)}

^{DEBT SERVICING:}

^{DEBT SERVICING
PROBLEMS MIGHT NOT BE EXPECTED IF REVENUE AND EARNINGS} ^{CAN BE
MAINTAINED AND PAYMENTS BY TRADE DEBTORS ARE FORTHCOMING.} ^{IT WAS
NOTED THAT AVERAGE COLLECTION PERIOD HAS SHORTHENED TO 37 DAYS} ^{(2006:
59 DAYS).}

^{NOTES
TO THE FINANCIAL STATEMENTS:}

^{* BANK OVERDARFT (SECURED):}

^{THESE
ARE SECURED BY THE PLEDGING OF THE COMPANY'S LEASEHOLD OFFICE}

^{PREMISES
AND A FIXED DEPOSIT TO THE FINANCIAL STATEMENTS.}

^{CONTINGENT
LIABILITIES:}

^{AS
AT BALANCE SHEET DATE, THE COMPANY HAS CONTINGENT LIABILITIES AND}

^{BANKER
GUARANTEES ISSUED IN FAVOUR OF THIRD PARITES AS FOLLOWS:}

^{* LETTER OF CREDIT ISSUED - 2007: S$8,044,082
(2006: S$4,135,033)}

^{* BILLS DISCOUNTED/NEGOTIATED - 2007:
S$918,611 (2006: S$654,748)}

^{* BILLS DISCOUNTED/NEGOTIATED W/O RECOURSE -
2007: S$6,336,247}

^(2006:
NIL)

^{* GUARANTEE - 2007: S$68,278 (2006: NIL)}

BACKGROUND/OPERATION

^{THE
COMPANY WAS INCORPORATED IN THE REPUBLIC OF SINGAPORE ON} ^{27/01/1994
AS A LIMITED PRIVATE COMPANY AND IS TRADING UNDER ITS} ^{PRESENT
NAMESTYLE AS "SUDIMA INTERNATIONAL PTE LTD".}

^{THE
COMPANY HAS ISSUED AND PAID-UP CAPITAL OF} ^{2,000,000 SHARES OF A VALUE OF
S$2,000,000.}

^{PRINCIPAL
ACTIVITIES:}

^{SUBJECT
IS REGISTERED WITH THE ACCOUNTING & CORPORATE REGULATORY} ^{AUTHORITY
(ACRA) TO BE PRINCIPALLY ENGAGED IN THE BUSINESS OF:}

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

^{THE
COMPANY WAS LISTED IN THE SINGAPORE LOCAL DIRECTORIES UNDER THE} ^{CLASSIFICATION
OF: TRADING COMPANIES}

^{DURING THE
FINANCIAL YEAR UNDER REVIEW, THE PRINCIPAL ACTIVITIES OF} ^{THE COMPANY CONSIST
OF TRADING AND ACTING AS COMMISSION AGENTS.} ^{FROM THE RESEARCH DONE,
THE FOLLOWING INFORMATION WAS GATHERED:}

^BACKGROUND:

^{SUDIMA
INTERNATIONAL PTE LTD. IS A PART OF SUDIMA GROUP OF COMPANIES} ^{SINCE 1918.
SUDIMA GROUP HAS DIVERSE BUSINESS INTEREST IN TRADING,} ^{FOREST
PLANTATIONS, TEXTILE BUSINESS, HOTEL INDUSTRY, PHARMACEUTICALS} ^{ETC.
THE COMPANY HAS AN EXCELLENT MARKET NETWORK ACROSS THE GLOBE IN} ^{COUNTRIES
SUCH AS AUSTRALIA, NEW ZEALAND, MALAYSIA, HONG KONG,} ^{COMBODIA,
VIETNAM, SOUTH AFRICA, INDIA ETC. WITH ITS HEAD OFFICE} ^{LOCATED IN
SINGAPORE.}

^ACTIVITIES:

^{WE
ARE DEALING MAINLY IN-TIMBER LOGS, LOGS-OF VARIOUS TYPES, AGRO-} ^{MAIZE,
PALMOIL KERNELS, SUGAR, MEDICINES, PAPER, TEXTILE RAW} ^{MATERIALS,
RUBBER, ETC. ,}

^PRODUCTS:

^{* AGRO COMMODITIES}

^{* HOTELS}

^{* OTHER COMMODITIES}

^{* PHARMACEUTICALS}

^{* TIMBER YARN & TEXTILES}

^{EXPORT
COUNTRIES:}

^{* MALAYSIA}

^{* INDONESIA}

^{* MYANMAR}

^{* SOUTH AFRICA}

^{* NIGERIA}

^{* SOUTH AMERICA}

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

^{THE
COMPANY IS A SUBSIDIARY OF FORTUNE HOLDINGS LTD, A COMPANY} ^{INCORPORATED
IN CAYMAN ISLANDS.}

^{NUMBER
OF EMPLOYEES (30 SEPTEMBER):}

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

^{2004:
13; 2003: 13)}

^{REGISTERED
AND BUSINESS ADDRESS:}

^{151
CHIN SWEE ROAD}

^{#09-08
MANHATTAN HOUSE}

^{SINGAPORE
169876}

^{DATE
OF CHANGE OF ADDRESS: -}

^{-
OWNED PREMISE}

^{ADDRESS
PROVIDED BY CLIENT:}

^{151
CHIN SWEE ROAD}

^{#07-08
MANHATTAN HOUSE}

^{SINGAPORE
169876}

^{-
RENTED PREMISE}

^{-
PREMISE OWNED BY: SPRINGATES PTE LTD}

^{WEBSITE:
http://www.sudima.com}

^{EMAIL : info@sudima.com}

MANAGEMENT

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

^{1)
MANOJ KUMAR JHUNJHNUWALA, AN INDIAN}

^{-
BASED IN HONG KONG.}

^{2)
ANIL KUMAR JHUNJHNUWALA, A SINGAPORE PERMANENT RESIDENT}

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

^{3)
SANGITA JHUNJHUWALA, A SINGAPORE PERMANENT RESIDENT}

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

^{EURO-INTERNATIONAL
PTE LTD}

^{4)
LAXMI NIWAS JHUNJHNUWALA, A SINGAPORE PERMANENT RESIDENT}

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

^{EURO-INTERNATIONAL
PTE LTD}

^{RANG
MAHAL PTE LTD}

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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