MIRA INFORM REPORT

Report Date :

03.03.2008

IDENTIFICATION DETAILS

Name :	EMERSON NETWORK POWER (SINGAPORE) PTE. LTD.
Formerly Known as :	^LIEBERT FAR EAST PTE LTD
Registered Office :	^27 International Business Park ^#03-01 Primefield-Landmark Building, 609924
Country :	Singapore
Financials (as on) :	30.09.2006
Date of Incorporation :	^07.12.1982
Com. Reg. No.:	^198205102D
Legal Form :	^Pte Ltd
Line of Business :	^Trading in Computer Support Systems for Regulating and Monitoring Environmental and Electrical Power Conditions and Provision of Installation and Maintenance Services.

RATING & COMMENTS

MIRA’s Rating :

Ba

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

EMERSON NETWORK POWER (SINGAPORE) PTE. LTD.

Line Of Business 

^{TRADING IN COMPUTER SUPPORT SYSTEMS FOR REGULATING AND MONITORING ENVIRONMENTAL AND ELECTRICAL POWER CONDITIONS AND PROVISION OF INSTALLATION AND MAINTENANCE SERVICES.}

Parent Company

^{LIEBERT CORPORATION}

(PERCENTAGE OF SHAREHOLDING: 100.00%)

Financial Elements

FY 2006

COMPANY

Sales : US$25,540,122

Networth : US$ 6,031,508

Paid-Up Capital : US$ 177,300

Net result : US$ 2,422,814

Net Margin(%) : 9.49

Return on Equity(%) : 40.17

Leverage Ratio : 1.54

COMPANY IDENTIFICATION

^{Subject Company : EMERSON NETWORK POWER (SINGAPORE) PTE. LTD.}

^{Former Name : LIEBERT FAR EAST PTE LTD}

^{Business Address: : 27 INTERNATIONAL BUSINESS PARK #03-01}

^{PRIMEFIELD-LANDMARK BUILDING}

^{Town : SINGAPORE}

^{Postcode : 609924}

^{Country : Singapore}

^{Telephone : 6467 2211}

^{Fax : 6467 0130}

^{ROC Number : 198205102D}

^{Reg. Town :}

PREVIOUS IDENTIFICATION

^{LIEBERT FAR EAST PTE LTD DATE OF CHANGE OF NAME: 13/11/2001 LIEBE}

SUMMARY

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

^{Legal Form : Pte Ltd}

^{Date Inc. : 07/12/1982}

^{Previous Legal Form : -}

^{Summary year : 30/09/2006}

^{Sales : 25,540,122}

^{Networth : 6,031,508}

^{Capital : -}

^{Paid-Up Capital : 177,300}

^{Employees : 65}

^{Net result : 2,422,814}

^{Share value : -}

^{Auditor : KPMG}

^{BASED ON ACRA'S}

^{NO. OF SHARES CURRENCY AMOUNT}

^{ISSUED ORDINARY 300,000 SGD 300,000}

^{PAID-UP ORDINARY - SGD 300,000}

REFERENCES

^{Litigation : No}

^{Company status : TRADING}

^{Started : 07/12/1982}

PRINCIPAL(S)

^{SEAH SIOW TECK S2614272E Managing Director}

DIRECTOR(S)

^{SEAH SIOW TECK S2614272E Managing Director}

^{Appointed on : 16/03/1992}

^{Street : 74 KING'S DRIVE}

^KINGSVILLE

^{Town : SINGAPORE}

^{Postcode : 266441}

^{Country : Singapore}

^{CHARLES EUGENE HAYDEN 700438061 Director}

^{Appointed on : 01/12/2000}

^{Street : 5-G GRENVILLE HOUSE 1}

^{MAGAZINE GAP ROAD CENTRAL}

^{HONG KONG}

^{Town :}

^{Postcode :}

^{Country : Hong Kong}

^{SEAH SIOW TECK S2614272E Director}

^{Appointed on : 16/03/1992}

^{Street : 74 KING'S DRIVE}

^KINGSVILLE

^{Town : SINGAPORE}

^{Postcode : 266441}

^{Country : Singapore}

^{TAN CHENG SIEW @ NUR FARAH TAN S6920790A Company Secretary}

^{Appointed on : 06/06/2003}

^{Street : 97 BEDOK NORTH AVENUE 4}

^#20-1513

^{Town : SINGAPORE}

^{Postcode : 460097}

^{Country : Singapore}

^{STEPHEN JOHN SHELLEY E7596574 Director}

^{Appointed on : 01/03/2006}

^{Street : 153 CARTERS ROAD}

^{GROSE VALE , NSW 2753}

^{Town :}

^{Postcode :}

^{Country : Australia}

FORMER DIRECTOR(S)

^{TAN GIK HOA S0113838C}

^{SETZER ROBERT D S01333906}

^{IVAN EE ENG HOK S0277362G}

^{LOH SUR JIN ANDREW S1185696I}

^{BOERGER KARSTEN S13191905}

^{ARUN GUIN B237868}

^{LIEBERT LARRY L SK3005569}

^{TAN TUAN HONG S2180571H}

^{DAVID BRUCE SCOTT EM274772}

^{TAY GEOK SWEE S0007393H}

^{TOM VENNEMEYER 013122802}

ACTIVITY(IES)

^{COMPUTER-NETWORKING Code:5098}

^{BASED ON ACRA'S RECORD}

^{1) WHOLESALE OF COMPUTER HARDWARE AND PERIPHERAL EQUIPMENT}

^{2) REPAIR AND MAINTENANCE & REPAIR OF COMPUTER HARDWARE, DATA}

CHARGES

^{Amount : 150,000}

^{Comments : CHARGE NO: 8602188 (DISCHARGED - 30/04/1987)}

^{AMOUNT SECURED : S$150,000.00}

^{CHARGEE(S) : THE HONGKONG & SHANGHAI BANKING CORPORATION}

PREMISES/PROPERTY INFORMATIONS

No Premises/Property Information In Our Databases

SHAREHOLDERS(S)

^{LIEBERT CORPORATION 300,000 Company}

^{Street : 1050 DEARBORN DRIVE}

^{PO BOX 29186}

^{Town : COLUMBUS OHIO}

^{Postcode : 43229}

^{Country : United States}

FORMER SHAREHOLDER(S)

^{LIEBERT FAR EAST LTD 25,001}

^{ARUN GUIN 10,000}

HOLDING COMPANY

^{LIEBERT CORPORATION UF03148C % : 100}

SUBSIDIARY(IES)

^{EMERSON NETWORK POWER (MALAYSIA) SDN BHD}

PAYMENT HISTORY AND EXPERIENCES

^{Trade Morality : AVERAGE}

^{Liquidity : SUFFICIENT}

^{Payments : REGULAR}

^{Trend : UPWARD}

^{Financial Situation : AVERAGE}

FINANCIAL ELEMENTS

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

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

^{Date Account Lodged: 26/02/2007}

^{Balance Sheet Date: 30/09/2006 30/09/2005}

^{Number of weeks: 52 52}

^{Consolidation Code: COMPANY COMPANY}

^{--- ASSETS ---}

^{Preliminary Exp 1,247,308 1,196,880}

^{Tangible Fixed Assets: 347,921 357,013}

^{Investments 215,923 215,923}

^{Total Fixed Assets: 1,811,152 1,769,816}

^{Inventories: 1,621,415 1,410,384}

^{Receivables: 5,256,413 3,499,758}

^{Cash,Banks, Securitis: 6,400,707 4,079,351}

^{Other current assets: 210,371 180,367}

^{Total Current Assets: 13,488,906 9,169,860}

^{TOTAL ASSETS: 15,300,058 10,939,676}

^{--- LIABILITIES ---}

^{Equity capital: 177,300 138,632}

^{Reserves: 276,103}

^{Profit & lost Account: 5,854,208 4,465,159}

^{Total Equity: 6,031,508 4,879,894}

^{Other long term Liab.: 130,000 197,000}

^{Total L/T Liabilities: 130,000 197,000}

^{Trade Creditors: 5,818,058 3,520,042}

^{Provisions: 838,848 619,257}

^{Other Short term Liab.: 2,481,644 1,723,483}

^{Total short term Liab.: 9,138,550 5,862,782}

^{TOTAL LIABILITIES: 9,268,550 6,059,782}

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

^{Net Sales 25,540,122 21,974,942}

^{Purchases,Sces & Other Goods: 15,521,752 14,408,016}

^{Gross Profit: 10,018,370 7,566,926}

^{NET RESULT BEFORE TAX: 3,085,300 2,256,976}

^{Tax : 662,486 456,373}

^{Net income/loss year: 2,422,814 1,800,603}

^{Interest Paid: 307 164}

^{Depreciation: 111,681 114,280}

^{Dividends: 1,271,200 3,796,632}

^{Wages and Salaries: 3,602,251 2,747,098}

^{Financial Income: 154,113 163,143}

RATIOS

^{30/09/2006 30/09/2005}

^{Turnover per employee: 392924.95 338076.03 Net result / Turnover(%): 0.09 0.08 Stock / Turnover(%): 0.06 0.06 Net Margin(%): 9.49 8.19 Return on Equity(%): 40.17 36.90 Return on Assets(%): 15.84 16.46 Dividends Coverage: 1.91 0.47 Net Working capital: 4350356.00 3307078.00 Cash Ratio: 0.70 0.70 Quick Ratio: 1.28 1.29 Current ratio: 1.48 1.56 Receivables Turnover: 74.09 57.33 Leverage Ratio: 1.54 1.24}

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

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

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

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

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

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

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

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

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

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

FINANCIAL COMMENTS

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

^{THE FOLLOWING:}

^{NET WORTH:}

^{THE BALANCE SHEET WAS CONSIDERED PASSABLE WITH NET WORTH IMPROVED BY 23.59% FROM US$4,879,894 IN FY 2005 TO US$6,031,508 IN FY 2006. THIS WAS DUE TO HIGHER ACCUMULATED PROFIT OF US$5,854,208 (2005: US$4,465,159); A RISE OF 31.11% FROM THE PRIOR FINANCIAL YEAR.}

^LEVERAGE:

^{IN THE SHORT-TERM, SUBJECT WAS LARGELY FINANCED BY TRADE CREDITORS WHICH MADE UP 63.67% (2005: 60.04%) OF THE TOTAL CURRENT LIABILITIES AND AMOUNTED TO US$5,818,058 (2005: US$3,520,042).}

^{IN THE LONG-TERM, SUBJECT WAS WHOLLY FINANCED BY OTHER LONG-TERM LIABILITIES AND AMOUNTED TO US$130,000 (2005: US$197,000). THE BREAKDOWN IS AS FOLLOWS:}

^{* LOAN FROM A RELATED CORPROATION - 2006: US$130,000 (2005: US$197,000) IN ALL, LEVERAGE RATIO ROSE FROM 1.24 TIMES TO 1.54 TIMES AS A RESULT OF A GREATER RISE IN TOTAL LIABILITIES THAN TOTAL EQUITY.}

^LIQUIDITY:

^{IN GENERAL, SUBJECT'S LIQUIDITY SITUATION WAS PASSABLE AS SEEN FROM THE CHANGES IN NET WORKING CAPITAL AND LIQUIDITY RATIOS. CURRENT RATIO FELL TO 1.48 TIMES, DOWN FROM 1.56 TIMES AND QUICK RATIO FELL TO 1.28 TIMES FROM 1.29 TIMES IN FY 2005.}

^{NET WORKING CAPITAL IMPROVED BY 31.55% FROM US$3,307,078 IN FY 2005 TO US$4,350,356.}

^{PROFITABILITY:}

^{REVENUE POSTED AN INCREASE OF 16.22% FROM US$21,974,942 IN FY 2005 TO US$25,540,122 AND NET PROFIT ROSE BY 34.56% TO US$2,422,814 (2005: US$1,800,603). HENCE, NET MARGIN ROSE TO 9.49% (2005: 8.19%).}

^REVENUE:

^{* SALE OF GOODS - 2006: US$23,136,813 (2005: US$20,298,512)}

^{* MAINTENANCE CONTRACT INCOME - 2006: US$1,706,000 (2005: US$1,590,946)}

^{* START-UP AND COMMISSIONING INCOME - 2006: US$697,309 (2005:}

^US$85,483)

^{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, ITS INTEREST COVERAGE WAS HEALTHY CONSIDERING THAT ITS INTEREST EXPENSES WERE LOW AT US$307 IN FY 2006 (2005: US$164).}

^{AVERAGE COLLECTION PERIOD HAS INCREASED FROM 57.33 DAYS TO 74.09 DAYS. A HIGHER AVERAGE COLLECTION PERIOD POSES GREATER RISK OF TURNING INTO BAD DEBTS. HOWEVER, IT IS STILL WORTH NOTING THAT DEBT SERVICING ABILITY MAY NOT BE AFFECTED IF TRADE RECEIVABLES ARE FORTHCOMING.}

^{NON-CURRENT ASSETS:}

^{THE FOLLOWING ITEMS ARE CLASSIFIED UNDER PRELIMINARY:}

^{* CLUB MEMBERSHIP - 2006: US$140,534 (2005: US$23,107)}

^{* LOANS TO RELATED CORPORATIONS - 2006: US$1,106,774 (2005: US$1,173,773)}

^{NOTES TO THE FINANCIAL STATEMENTS:}

^{LOANS FROM RELATED CORPORATIONS THE NON-CURRENT LOANS FROM RELATED CORPORATIONS ARE UNSECURED AND ARE REPAYABLE BETWEEN 2009 AND 2010. THE LOANS BEAR INTEREST AT 0.35% PER ANNUM ABOVE THE THREE MONTH LIBOR.}

BACKGROUND/OPERATION

^{THE COMPANY WAS INCORPORATED IN THE REPUBLIC OF SINGAPORE ON 07/12/1982 AS A LIMITED PRIVATE COMPANY AND IS TRADING UNDER ITS NAMESTYLE AS "LIEBERT PRODUCTS PTE. LTD.".}

^{SUBSEQUENTLY, ON 26/09/1988, THE COMPANY CHANGED TO ITS NAMESTYLE AS}

^{"LIEBERT FAR EAST PTE LTD".}

^{SUBSEQUENTLY, ON 13/11/2001, THE COMPANY CHANGED TO ITS PRESENT NAMESTYLE AS "EMERSON NETWORK POWER (SINGAPORE) PTE. LTD.".}

^{THE COMPANY HAS ISSUED AND PAID-UP CAPITAL OF 300,000 SHARES OF A VALUE OF S$300,000.}

^{PRINCIPAL ACTIVITIES:}

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

^{1) WHOLESALE OF COMPUTER HARDWARE AND PERIPHERAL EQUIPMENT}

^{2) REPAIR AND MAINTENANCE & REPAIR OF COMPUTER HARDWARE, DATA}

^{PROCESSING EQUIPMENT AND COMPUTER PERIPHERALS}

^{DURING THE FINANCIAL YEAR UNDER REVIEW, THE PRINCIPAL ACTIVITIES OF THE COMPANY CONSIST OF TRADING IN COMPUTER SUPPORT SYSTEMS FOR REGULATING AND MONITORING ENVIRONMENTAL AND ELECTRICAL POWER CONDITIONS AND PROVISION OF INSTALLATION AND MAINTENANCE SERVICES.}

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

^{SUBJECT ENGAGES IN THE FOLLOWING ACTIVITIES:}

^{SUPPORT AND PROTECTION FOR ALL COMPUTER SYSTEMS}

^{* WITH THE WIDEST RANGE OF COMPUTER ROOM AIR CONDITIONING SYSTEMS,}

^{UNINTERRUPTED POWER SUPPLIES (UPS), POWER CONDITIONING SYSTEMS,}

^{SECURITY ACCESS CONTROLS AND SITE MONITORING SYSTEMS}

^{PRODUCTS AND SERVICES:}

^{* UPS/UNITERRUPTIBLE POWER SUPPLY}

^{* BUSINESS CONTINUITY}

^{* DISASTER RECOVERY}

^{* POWER PROTECTION}

^{* LIEBERT/HIROSS}

^{* MISSION CRITICAL SYSTEMS}

^{* CONNECTIVITY}

^{* INTEGRATED CABINET SOLUTIONS}

^{* PRECISION COOLING}

^{* SITE MONITORING AND SERVICES}

^SERVICES:

^{* PRECISION AIR CONDITIONING SYSTEM FOR DATA CENTRES}

^{* DC RECTIFIERS AND CONVERTERS}

^{* TRANSFER SWITCHES}

^{* TURNKEY DATA CENTRE DESIGN AND CONSTRUCTION}

^{TRADE NAMES:}

^{* UPSTATION UPS}

^{* POWESURE UPS}

^{* LIEBERT}

^{* EMEKSON AIR CONDITIONING EQPT & CARD ACCESS SYSTEMS}

^{* EMERSON UPS & POWER CONDITIONERS}

^{IMPORT COUNTRIES:}

^{* CHINA}

^{* NORTH AMERICA}

^{* EUROPE}

^{EXPORT COUNTRIES:}

^{* SOUTH EAST ASIA}

^{BCA, BUILDING & CONSTRUCTION AUTHORITY (SINGAPORE) REGISTERED WORK}

^{HEADS/DESCRIPTION/TENDERING LIMIT:}

^{* ME01/AIR-CONDITIONING, REFRIGERATION & VENTILATION WORKS/}

^L3

^{* SY05/ELECTRICAL & ELECTRONIC MATERIALS, PRODUCTS & COMPONENTS/}

^L4

^{NEWS:EMERSON TO ACQUIRE MOTOROLA'S EMBEDDED COMMUNICATIONS COMPUTING}

^BUSINESS

^"EXTRACTS"

^{SOURCE: EMERSON WEBSITE}

^{DATE: 28/09/2007}

^{EMERSON (NYSE: EMR) AND MOTOROLA, INC. (NYSE: MOT) TODAY ANNOUNCED THAT THE TWO COMPANIES HAVE ENTERED INTO A DEFINITIVE AGREEMENT UNDER WHICH EMERSON WILL ACQUIRE MOTOROLA'S EMBEDDED COMMUNICATIONS COMPUTING (ECC) BUSINESS FOR $350 MILLION IN CASH. MOTOROLA'S ECC BUSINESS, WHICH HAD 2006 REVENUE OF APPROXIMATELY $520 MILLION, WILL STRENGTHEN EMERSON'S POSITION IN THE $6 BILLION-AND-GROWING MERCHANT EMBEDDED COMPUTING INDUSTRY. UPON COMPLETION OF THE TRANSACTION, MOTOROLA'S ECC BUSINESS WILL BECOME PART OF EMERSON NETWORK POWER. THE TRANSACTION IS EXPECTED TO BE COMPLETED BY THE END OF THE CALENDAR YEAR AND IS SUBJECT TO CUSTOMARY CLOSING CONDITIONS AND REGULATORY APPROVALS.}

^{FROM THE TELE-INTERVIEW CONDUCTED SUBJECT HAS 65 EMPLOYEES. NO OTHER TRADE INFORMATION WAS AVAILABLE.}

^{INCORPROATED IN THE STATE OF OHIO, UNITED STATES OF AMERICA, AND EMERSON ELECTRIC CO., INCORPORATED IN THE STATE OF MISSOURI, UNITED STATES OF AMERICA, RESPECTIVELY.}

^{NUMBER OF EMPLOYEES (30 SEPTEMBER):}

^{* COMPANY - 2006: NOT AVAILABLE (2005: 53; 2004: 55; 2003: 51,}

^{2002: 51)}

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

^{2004: NOT AVAILABLE; 2003: 96, 2002: 95)}

^{REGISTERED AND BUSINESS ADDRESS:}

^{27 INTERNATIONAL BUSINESS PARK}

^{#03-01 PRIMEFIELD-LANDMARK BUILDING}

^{SINGAPORE 609924}

^{- DATE OF CHANGE OF ADDRESS: 30/07/2005}

^WEBSITES:

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

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

^EMAIL:

^{marketing@emersonnetwork-ap.com}

MANAGEMENT

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

^{1) CHARLES EUGENE HAYDEN, AN AMERICAN}

^{- BASED IN HONG KONG.}

^{2) STEPHEN JOHN SHELLEY, AN AUSTRALIAN}

^{- BASED IN AUSTRALIA.}

^{3) SEAH SIOW TECK, 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.

WHOLESALE AND RETAIL TRADE SECTOR

PAST PERFORMANCE

THE WHOLESALE AND RETAIL TRADE SECTOR GREW BY 6.6% IN 3Q 2007, WEAKER THAN THE 8.4% GROWTH IN 2Q 2007. ALTHOUGH NON-OIL RE-EXPORTS STRENGTHENED IN THE QUARTER, RETAIL SALES RECORDED SLOWER GROWTH.

DOMESTIC WHOLESALE TRADE INDEX

THE OVERALL DOMESTIC WHOLESALE TRADE ROSE BY 4.6% IN 3Q 2007 OVER 3Q 2006.

EXCLUDING PETROLEUM, DOMESTIC SALES GREW BY 7.5%.

THE RISE IN THE OVERALL INDEX WAS MAINLY DUE TO HIGHER SALES OF FOOD, BEVERAGES AND TOBACCO (45.7%), TIMBER, PAINTS AND CONSTRUCTION MATERIALS (23.3%). OTHER WHOLESALE SEGMENTS THAT REPORTED BETTER BUSINESS WERE WHOLESALING OF INDUSTRIAL AND CONSTRUCTION MACHINERY (9.7%) TELECOMMUNICATIONS AND COMPUTERS (8.3%) AND CHEMICALS AND CHEMICAL PRODUCTS (6.8%).

ON THE OTHER HAND, WHOLESALE SEGMENTS THAT REPORTED LOWER SALES WERE ELECTRONIC COMPONENTS (-19.4%), HOUSEHOLD EQUIPMENT AND FURNITURE (-4.4%), SHIP CHANDLERS AND BUNKERING (-3.1%).

AT CONSTANT PRICES, THE OVERALL DOMESTIC WHOLESALE TRADE ROSE BY 4.9% IN 3Q 2007 OVER 3Q 2006. DOMESTIC SALES EXCLUDING PETROLEUM ROSE BY 9.1%.

ON A QUARTER-OVER-QUARTER BASIS, THE OVERALL DOMESTIC WHOLESALE TRADE IN 3Q 2007 ROSE BY 12.2% OVER 2Q 2007. EXCLUDING PETROLEUM, IT GREW BY 8.2%.

THE MAJORTIY OF THE WHOLESALE SECTORS RECORDED HIGHER DOMESTIC SALES IN 3Q 2007 OVER PREVIOUS QUARTER. SHIP CHANDLERS AND BUNKERING EXPANDED BY 27.9%, MAINLY DUE TO HIGHER BUNKER SALES.

THE GENERAL WHOLESALE TRADE SECTOR FELL IN 3Q 2007 AFTER RECORDING STRONG GROWTH IN 2Q 2007.

FOREIGN WHOLESALE TRADE INDEX

THE OVERALL FOREIGN WHOLESALE TRADE FOR 3Q 2007 ROSE BY 4.3%, IN COMPARISON TO 3Q 2006. EXCLUDING PETROLEUM, IT EXPANDED BY 9.0%

MOST OF THE SECTORS REPORTED HIGHER SALES. DOUBLE-DIGIT GROWTH RATES FOR OVERSEAS SALES WERE RECORDED BY FOOD, BEVERAGES AND TOBACCO (51.2%) AND TIMBER, PAINT AND CONSTRUCTION MATERIALS (15.5%). OTHER WHOLESALE SECTORS THAT REGISTERED BETTER BUSINESS IN 3Q 2007 WERE CHEMICALS AND CHEMICAL PRODUCTS (7.6%) AND TELECOMMUNICATIONS AND COMPUTERS (5.0%)

FOREIGN SALES OF SHIP CHANDLERS AND BUNKERING, GENERAL WHOLESALE TRADE, INDUSTRIAL AND CONSTRUCTION MACHINERY AND ELECTRONIC COMPONENTS REGISTERED INCREASES OF 2.6% TO 6.1 %IN 3Q 2007, IN CONTRAST TO THE LOWER SALES IN THE PREVIOUS QUARTER.

AT CONSTANT PRICES, THE OVERALL INDEX ROSE BY 8.0% IN 3Q 2007 OVER 3Q 2006.

EXCLUDING PETROLEUM, FOREIGN WHOLESALE TRADE GREW BY 12.0%.

ON A QUARTER-OVER-QUARTER BASIS, THE OVERALL FOREIGN WHOLESALE TRADE IN 3Q 2007 ROSE BY 4.9% OVER 2Q 2007. EXCLUDING PETROLEUM, IT GREW BY 8.2%.

ALL WHOLESALE SECTORS RECORDED BETTER BUSINESS IN 3Q 2007 WITH THE EXCEPTION OF CHEMICALS AND CHEMICAL PRODUCTS. WHOLESALE TRADE OF FOOD, BEVERAGES AND TOBACCO, AND SHIP CHANDLERS AND BUNKERING BOTH GREW BY 17.1%. WHOLESALE OF ELECTRONIC COMPONENTS ROSE BY 12.5%.

RETAIL TRADE

THE OVERALL RETAIL SALES ROSE BY 1.3%, WEAKER THAN THE 7.9% IN 2Q 2007. MOTOR VEHICLES FELL BY 6.8% COMPARED TO THE 2.4% GROWTH IN 2Q 2007. EXCLUDING MOTOR VEHICLES, RETAIL SALES ROSE BY 5.7%, A DECLINE FROM THE 11.O% IN 2Q 2007.

OUTLOOK

GENERALLY, WHOLESALERS ARE POSITIVE ABOUT THEIR BUSINESS PROSPECTS IN THE COMING MONTHS, WITH A NET WEIGHTED BALANCE OF 24% OF FIRMS EXPRESSING POSITIVE BUSINESS SENTIMENTS. THIS APPLIES PARTICULARLY TO FIRMS IN THE WHOLESALING OF FOOD AND BEVERAGES, WEARING APPAREL AND FOOTWEAR, COSMETICS AND TOILETRIES, AND HOUSEHOLD AND ELECTRICAL APPLIANCES.

AS A RESULT OF YEAR-END FESTIVE SHOPPING, A NET WEIGHTED BALANCE OF 31% OF RETAILERS EXPECTS BUSINESS TO IMPROVE IN THE COMING MONTHS. THE RETAIL SECTORS THAT ARE FORECASTING BETTER BUSINESS INCLUDING DEPARTMENT STORE AND SUPERMARKET OWNERS, WEARING APPAREL AND FOOTWEAR, FURNITURE AND FURNISHINGS, AND JEWELLERY AND WATCHES.

EXTRACTED FROM: MINISTRY OF TRADE AND INDUSTRY

SINGAPORE DEPARTMENT OF STATISTICS

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
NR		In view of the lack of information, we have no basis upon which to recommend credit dealings	No Rating

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions