MIRA INFORM REPORT

Report Date :

28.05.2008

IDENTIFICATION DETAILS

Name :	TIMES THE BOOKSHOP PTE LTD

Formerly Known As :	^{TIMES DISTRIBUTORS SDN BHD}

Registered Office :	^{438 Ang Mo Kio Industrial Park 1} ^{Ang Mo Kio Avenue 10}

Country :	Singapore

Financials (as on) :	30.09.2007

Date of Incorporation :	^30.09.1967

Com. Reg. No.:	^196700335H

Legal Form :	^{Pte Ltd}

Line of Business :	Retailing of Books, Stationery, Magazines and Periodicals

RATING & COMMENTS

MIRA’s Rating :

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

Status :	Moderate

Payment Behaviour :	Regular

Litigation :	Clear

Subject Company

TIMES THE BOOKSHOP PTE LTD

Line Of Business

RETAILING OF BOOKS, STATIONERY, MAGAZINES AND PERIODICALS

Parent Company

TIMES PUBLISHING LIMITED

(PERCENTAGE OF SHAREHOLDINGS: 100.00%)

Financial Elements

FY 2007

COMPANY

Sales : S$ 37,031,000

Networth : S$ -19,586,000

Paid-Up Capital : S$ 700,000

Net result : S$ -582,000

Net Margin(%) : -1.57

Return on Equity(%) : 2.97

Leverage Ratio : -2.22

COMPANY IDENTIFICATION

^{Subject
Company : TIMES THE
BOOKSHOP PTE LTD}

^{Former
Name :
TIMES DISTRIBUTORS SDN BHD}

^{Business
Address : 438 ANG MO KIO
INDUSTRIAL PARK 1}

^{ANG MO KIO AVENUE 10}

^{Town :
SINGAPORE}

^{Postcode : 569619}

^{Country :
Singapore}

^{Telephone : 6457 0577}

^{Fax :
6382 2571}

^{ROC
Number :
196700335H}

^{Reg.
Town : -}

PREVIOUS IDENTIFICATION

^{TIMES
DISTRIBUTORS SDN BHD DATE OF
CHANGE OF NAME: 08/09/1986}

SUMMARY

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

^{Legal Form : Pte Ltd}

^{Date Inc. :}^30/09/1967

^{Previous Legal Form :}^-

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

^{Sales :}^37,031,000

^{Networth :}^-19,586,000

^{Capital :
-}

^{Paid-Up Capital :}^700,000

^{Employees : 130}

^{Net result :}^-582,000

^{Share value : 1}

^{Auditor :}^{ERNST & YOUNG}

^{BASED
ON ACRA'S}

^{NO. OF SHARES CURRENCY AMOUNT}

^{ISSUED
ORDINARY 700,000 SGD 700,000}

^{PAID-UP
ORDINARY - SGD
700,000}

REFERENCES

^{Litigation : No}

^{Company
status : TRADING}

^{Started
:
30/09/1967}

PRINCIPAL(S)

^{DAVID
CHOW
S0039760A Director}

DIRECTOR(S)

^{CHEONG
CHEE HWA
S1308088G Director}

^{Appointed
on : 27/08/2001}

^{Street
: 12 JALAN HAJI SALAM}

^{Town: SINGAPORE}

^{Postcode: 468769}

^{Country: Singapore}

^{ANTHONY
CHEONG FOOK SENG
S2505014B Company Secretary}

^{Appointed
on : 01/06/2001}

^{Street
: 479 RIVER VALLEY ROAD}

^#20-01

^{VALLEY PARK}

^{Town: SINGAPORE}

^{Postcode: 248364}

^{Country: Singapore}

^{NG
JUI SIA S0016371F Director}

^{Appointed
on : 29/08/2006}

^{Street
: 39A CHILTERN DRIVE}

^{BRADDELL HEIGHTS ESTATE}

^{Town: SINGAPORE}

^{Postcode: 359762}

^{Country: Singapore}

^{DAVID
CHOW S0039760A Director}

^{Appointed
on : 01/08/2003}

^{Street
: 20 SWANAGE ROAD}

^{Town: SINGAPORE}

^{Postcode: 437218}

^{Country: Singapore}

^{ANTHONY
CHEONG FOOK SENG
S2505014B Director}

^{Appointed
on : 29/08/2006}

^{Street
: 479 RIVER VALLEY ROAD}

^#20-01

^{VALLEY PARK}

^{Town: SINGAPORE}

^{Postcode: 248364}

^{Country: Singapore}

FORMER DIRECTOR(S)

^{GOH
YEOW TIN
S0169987C}

^{KUA
HONG PAK
S0229766C}

^{HOLLOWAY
LYNDLEY JOHN S0388849E}

^{CHIAM
HENG HIM S0409887J}

^{YAM
CHIN KWAN COLIN
S1148631B}

^{LAI
SECK KHUI S0132007F}

^{GAN
JUAY KIAT
S1230349A}

^{ELSA
TAN HWEE KHOON S1813808E}

ACTIVITY(IES)

^{MAGAZINE
DEALERS And DISTRIBUTORS
Code: 13293}

^{BOOK
DEALERS - RETAIL Code: 2380}

^{BASED
ON ACRA'S RECORD}

^{1)
RETAIL SALE OF BOOKS, MAGAZINES AND STATIONERY (INCLUDING}

^{NEWSVENDORS);}

CHARGES

No Charges On Premises/Property In Our Database

PREMISES/PROPERTY INFORMATIONS

No Premises/Property Information In Our Databases

ASSOCIATED COMPANY(IES)

^{TIMES
VILLAGE ENTERTAINMENT PRIVATE}

^{2
HANDY ROAD}

^13-10

^{CATHAY
BUILDING}

^{SINGAPORE Singapore}

^{TIMES-DHARMALA
PTE LTD}

^{SINGAPORE Singapore}

^{PACIFIC
BOOKSTORES PTE LTD}

^{73
AYER RAJAH CRESCENT}

^03-01/09

^{SINGAPORE Singapore}

SHAREHOLDERS(S)

^{TIMES
PUBLISHING LIMITED
700,000 Company}

^{Street
: 1 NEW INDUSTRIAL ROAD}

^{TIMES CENTRE}

^{Town: SINGAPORE}

^{Postcode: 536196}

^{Country: Singapore}

HOLDING COMPANY

^{TIMES
PUBLISHING LIMITED
196800064R % : 100}

SUBSIDIARY(IES)

^{TIMES-DHARMALA
PTE LTD}

PAYMENT HISTORY AND EXPERIENCES

^{Trade
Morality :
AVERAGE}

^{Liquidity
: LACKING}

^{Payments
: REGULAR}

^{Trend
:
UPWARD}

^{Financial
Situation : BAD}

FINANCIAL ELEMENTS

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

^{Date
Account Lodged:
26/03/2008}

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

^{Number
of weeks:
52
52}

^{Consolidation
Code: COMPANY COMPANY}

^{--- ASSETS} ^---

^{Intangible
Fixed Assets:
-
21,000}

^{Tangible
Fixed Assets:
1,616,000 1,781,000}

^{Investments 2,732,000 -}

^{Total Fixed Assets: 4,348,000 1,802,000}

^{Inventories: 11,032,000 8,174,000}

^{Receivables: 492,000 246,000}

^{Cash,Banks,
Securitis: 3,024,000 1,315,000}

^{Other
current assets:
5,081,000
5,324,000}

^{Total Current Assets: 19,629,000 15,059,000}

^{TOTAL ASSETS: 23,977,000 16,861,000}

^{--- LIABILITIES} ^---

^{Equity
capital:
700,000
700,000}

^{Reserves: -305,000 -275,000}

^{Profit
& lost Account: -19,981,000 -19,681,000}

^{Total Equity: -19,586,000 -19,256,000}

^{L/T
deffered taxes:}

^{Other
long term Liab.:
24,416,000
23,927,000}

^{Total L/T Liabilities: 24,416,000 23,927,000}

^{Trade
Creditors:
12,033,000
9,250,000}

^{Due
to Bank:
2,477,000
-}

^{Provisions: 950,000 700,000}

^{Other
Short term Liab.:
2,269,000
1,290,000}

^{Prepay.
& Def. charges:
1,418,000
950,000}

^{Total short term Liab.: 19,147,000 12,190,000}

^{TOTAL LIABILITIES: 43,563,000 36,117,000}

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

^{Net
Sales
37,031,000
33,281,000}

^{Purchases,Sces
& Other Goods:
23,043,000
20,757,000}

^{Gross
Profit: 13,988,000 12,524,000}

^{NET
RESULT BEFORE TAX:
-441,000
-1,300,000}

^{Tax
:
141,000
117,000}

^{Net
income/loss year:
-582,000
-1,417,000}

^{Interest
Paid:
77,000
-}

^{Depreciation: 725,000 783,000}

^{Wages
and Salaries:
3,410,000
2,909,000}

^{Financial
Income:}

RATIOS

^{30/09/2007 30/09/2006}

^{Turnover
per employee: 284853.85 256007.69}

^{Net
result / Turnover(%): -0.02 -0.04}

^{Stock
/ Turnover(%): 0.30 0.25}

^{Net
Margin(%): -1.57 -4.26}

^{Return
on Equity(%): 2.97 7.36}

^{Return
on Assets(%): -2.43 -8.40}

^{Net
Working capital: 482000.00 2869000.00}

^{Cash
Ratio: 0.16 0.11}

^{Quick
Ratio: 0.18 0.13}

^{Current
ratio: 1.03 1.24}

^{Receivables
Turnover: 4.78 2.66}

^{Leverage
Ratio: -2.22 -1.87}

^{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 LIMITED IN VIEW} ^{OF THE
FOLLOWING:}

^{NET WORTH:}

^{THE BALANCE SHEET
WAS INADEQUATE WITH NET WORTH WORSENED BY} ^{1.71% FROM S$-19,256,000 IN FY 2006 TO
S$-19,586,000 IN FY 2007. THIS} ^{WAS DUE TO HIGHER ACCUMULATED LOSSES
OF S$-19,981,000 (2006: S$-} ^{19,681,000); WORSENING BY 1.52% FROM THE
PRIOR FINANCIAL YEAR.}

^LEVERAGE:

^{IN THE SHORT-TERM,
SUBJECT WAS LARGELY FINANCED BY TRADE CREDITORS} ^{WHICH MADE
UP 62.85% (2006: 75.88%) OF THE TOTAL CURRENT LIABILITIES} ^{AND
AMOUNTED TO S$12,033,000 (2006: S$9,250,000). THE BREAKDOWN WAS AS} ^FOLLOWS:

^{*TRADE
PAYABLES - 2007: S$7,315,000 (2006: S$4,795,000)}

^{*AMOUNTS
DUE TP FELLOW SUBSIDIARIES (TRADE) - 2007: S$4,718,000 (2006:}

^S$4,455,000)

^{IN
ALL, LEVERAGE RATIO WAS IN THE NEGATIVE REGION OF -2.22 TIMES} ^{(2006: -1.87
TIMES) DUE TO NEGATIVE NET WORTH.}

^LIQUIDITY:

^{IN GENERAL,
SUBJECT'S LIQUIDITY SITUATION WAS CONSIDERED PASSABLE EVEN} ^{THOUGH NET
WORKING CAPITAL DROPPED BY 83.20% TO S$482,000 (2006: S} ^$2,869,000).

^{CURRENT RATIO
DROPPED TO 1.03 TIMES (2006: 1.24 TIMES) WHILE QUICK} ^{RATIO
IMPROVED TO 0.18 TIMES (2006: 0.13 TIMES).}

^{CASH AND CASH
EQUIVALENTS ROSE SHARPLY BY 1.30 TIMES TO S$3,024,000} ^{(2006:
S$1,315,000) AND COMPRISED OF:}

^{*FIXED
DEPOSITS - 2007: S$438,000 92006: S$104,000)}

^{*CASH
AND BANK BALANCES - 2007: S$2,586,000 (2006: S$1,211,000)}

^{PROFITABILITY:}

^{REVENUE ROSE BY
11.27% FROM S$33,281,000 IN FY 2006 TO} ^{S$37,031,000. A NET LOSS OF S$582,000
(2006: S$-1,417,000) WAS} ^{INCURRED IN FY 2007, NARROWING BY 58.93%
FROM THE PRIOR FINANCIAL} ^{YEAR. HENCE, NET MARGIN IMPROVED BUT WAS
STILL UNFAVOURABLE AT -1.57%} ^{(2006: -4.26%).}

^{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.

^{THE
AVERAGE COLLECTION PERIOD HAS LENGTHENED TO 5 DAYS (2006: 3 DAYS).}

^{NOTES TO FINANCIAL STATEMENTS:}

^{INTEREST-BEARING SHORT TERM LOAN}

^{THE
UNSECURED BANK TERM LOAN CONSIST OF:}

^{*AMOUNTS
DUE WITHIN 12 MONTHS - 2007: S$2,477,000 (2006: NIL)}

^{THE SHORT TERM
BANK LOAN BEARS INTEREST RANGING FROM 2.33% TO 2.85%} ^{(2006: NIL)
PER ANNUM. THE CARRYING AMOUNT OF THE BANK BORROWING} ^{APPROXIMATES
FAIR VALUE AS IT BEARS INTEREST AT RATES WHICH} ^{APPROXIMATE THE
CURRENT INCREMENTAL BORROWING RATE FOR SIMILAR TYPE OF} ^{LENDING AND
BORROWING ARRANGEMENTS.}

BACKGROUND/OPERATION

^{THE
COMPANY WAS INCORPORATED IN THE REPUBLIC OF SINGAPORE ON} ^{30/09/1967
AS A LIMITED PRIVATE COMPANY UNDER THE NAMESTYLE OF "TIMES} ^{DISTRIBUTORS
SENDIRIAN BERHAD".}

^{SUBSEQUENTLY
ON 08/09/1986, SUBJECT CHANGED TO ITS PRESENT NAMESTYLE} ^{OF
"TIMES THE BOOKSHOP PTE LTD".}

^{THE
COMPANY HAS AN ISSUED AND PAID-UP CAPITAL OF} ^{700,000
SHARES, OF A VALUE OF S$700,000.}

^{PRINCIPAL
ACTIVITIES:}

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

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

^{(1) RETAIL SALE OF
BOOKS, MAGAZINES AND STATIONERY (INCLUDING}

^{NEWSVENDORS);
RETAIL BOOKS, MAGAZINES & STATIONERY}

^{DURING THE
FINANCIAL YEAR(S), UNDER REVIEW, SUBJECT'S PRINCIPAL} ^{ACTIVITIES
ARE RETAILING OF BOOKS, STATIONERY, MAGAZINES AND} ^PERIODICALS.

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

^BACKGROUND:

^{ESTABLISHED IN
1978, TIMES BOOKSTORES HAVE BEEN A PROVIDER TO THE} ^{READING
NEEDS OF SINGAPORE AND MALAYSIA FOR THE LAST 30 YEARS.}

^{WE OFFER A WIDE
VARIETY OF PRODUCTS CATERING TO READERS OF ALL AGES} ^{AND INTERESTS
INCLUDING CHILDREN'S BOOKS, LIFESTYLE AND NON-FICTION} ^{BOOKS. TIMES
BOOKSTORES ALSO HOSTS A NUMBER OF EXCITING AND VIBRANT} ^{ACTIVITIES,
INCLUDING AUTHOR APPEARANCES, BOOK SIGNINGS AND WORKSHOPS} ^{FOR
CUSTOMERS. GENERATING INTEREST AND AWARENESS OF PUBLISHERS' BOOKS,} ^{AND
CREATING AN ENGAGING AND INSPIRING ENVIRONMENT CONDUCIVE TO BOOK} ^{APPRECIATION
HAS FIRMLY ESTABLISHED TIMES BOOKSTORES AS A BOOK} ^{RETAILER OF
CHOICE.}

^{TIMES
BOOKSTORES IS A MEMBER OF TIMES PUBLISHING LIMITED.}

^ACTIVITIES:

^{*
DEALERS/RETAIL OF BOOKS, STATIONERY, GREETING CARDS, POSTERS,}

^{EDUCATIONAL
GAMES, VIDEO, MAGAZINES, NEWSPAPER, CD-ROMS}

^{*
LEADING RETAILER OF ENGLISH LANGUAGE BOOKS AND COMPLEMENTARY}

^{PRODUCTS
IN THE REGION, WITH A CHAIN OF OUTLETS THROUGHOUT MALAYSIA,}

^{MACAU
AND SINGAPORE}

^{TERMS
OF PAYMENT:}

^{*
TRADE RECEIVABLES: 30 TO 120 DAYS}

^{*
TRADE PAYABLES: 30 TO 120 DAYS}

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

^{*
SINGAPORE RETAILERS ASSOCIATION}

^{NUMBER
OF EMPLOYEES:}

^2007:
130

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

^{SUBJECT'S
PERSONNEL WAS ONLY WILLING TO CONFIRM THE BUSINESS ADDRESS} ^{ADN CONTACT
NUMBERS OF THE COMPANY. AS SUCH, NO OTHER TRADE} ^{INFORMATION WAS
AVAILABLE}

^{THE
IMMEDIATE HOLDING COMPANY AND ULTIMATE HOLDING COMPANY IS TIMES} ^{PUBLISHING
LIMITED AND FRASER AND NEAVE LIMITED, RESPECTIVELY BOTH ARE} ^{INCORPORATED
IN SINGAPORE.}

^{REGISTERED
ADDRESS:}

^{1
NEW INDUSTRIAL ROAD}

^TIMES
CENTRE

^{SINGAPORE
536196}

^{DATE
OF CHANGE OF ADDRESS: 24/11/1988}

^{-
RENTED PREMISE}

^{-
PREMISE OWNED BY: TIMES PUBLISHING LIMITED}

^{BUSINESS
ADDRESS:}

^{438
ANG MO KIO INDUSTRIAL PARK 1}

^{ANG
MO KIO AVENUE 10}

^{SINGAPORE
569619}

^WEBSITE:

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

^EMAIL:

MANAGEMENT

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

^{1)
NG JUI SIA, A SINGAPOREAN}

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

^{TIMES
PRINTERS PRIVATE LIMITED}

^{PANSING
DISTRIBUTION PRIVATE LIMITED}

^{TIMES
OFFSET (MALAYSIA) SDN BHD}

^{2)
DAVID CHOW, A SINGAPOREAN}

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

^{TIMES
PRINTERS PRIVATE LIMITED}

^{TIMES
BUSINESS INFORMATION PRIVATE LIMITED}

^{MARSHALL
CAVENDISH INTERNATIONAL (SINGAPORE) PRIVATE LIMITED}

^{PANSING
DISTRIBUTION PRIVATE LIMITED}

^{TIMES
OFFSET (MALAYSIA) SDN BHD}

^{NESTLE
TC ASIA PACIFIC PTE LTD}

^{F.I.S
ASIA PACIFIC SERVICES PTE LTD}

^{3)
CHEONG CHEE HWA, A SINGAPOREAN}

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

^{EDUCATIONAL
TECHNOLOGIES PRIVATE LIMITED}

^{MARSHALL
CAVENDISH INTERNATIONAL (SINGAPORE) PRIVATE LIMITED}

^{PANSING
DISTRIBUTION PRIVATE LIMITED}

^{STP
DISTRIBUTORS (M) SDN BHD}

^{HWA
SENG FURNITURE (PRIVATE) LIMITED}

^{4)
ANTHONY CHEONG FOOK SENG, A SINGAPORE PERMANENT RESIDENT}

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

^{F&N
INTERFLAVINE PTE. LTD.}

^{RIVER
VALLEY TOWER PTE LTD}

^{RIVER
VALLEY APARTMENTS PTE LTD}

^{TIMES
PRINTERS PRIVATE LIMITED}

^{F&N
FOODS PTE LTD}

^{RIVERSIDE
PROPERTY PTE. LTD.}

^{FRASER
& NEAVE HOLDINGS BHD}

^{MALAYA
GLASS PRODUCTS SDN BHD}

^{F
& N COCA-COLA [MALAYSIA] SDN BHD}

^{TIGER
EXPORT PTE LTD}

^{FRASERS
HOSPITALITY 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%)

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