MIRA INFORM REPORT

Report Date :

12.01.2012

IDENTIFICATION DETAILS

Name :	CARGILL INTERNATIONAL TRADING PTE LTD
Formerly Known As :	CARGILL COMMODITY TRADING PTE. LTD.
Registered Office :	300 Beach Road #23-01 The Concourse, Singapore 199555
Country :	Singapore
Financials (as on) :	31.05.2010
Date of Incorporation :	05.12.1967
Com. Reg. No.:	196700442D
Legal Form :	Pte Ltd
Line of Business :	Commodities Trading
No. of Employees :	450

RATING & COMMENTS

MIRA’s Rating :

Aa

RATING		STATUS	PROPOSED CREDIT LINE
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large

Maximum Credit Limit :	USD 61,636,000
Status :	Excellent
Payment Behaviour :	Regular
Litigation :	Clear

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – December 31, 2010

Country Name	Previous Rating (30.09.2010)	Current Rating (31.12.2010)
Singapore	a1	a1

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

Subject Company

CARGILL INTERNATIONAL TRADING PTE LTD

Line Of Business 

 
COMMODITIES TRADING

Parent Company

CARGILL ASIA PACIFIC HOLDINGS PTE. LTD.

PERCENTAGE OF SHAREHOLDING: 100%)

Financial Elements

FY 2010

COMPANY

Sales : US$8,636,038,679

Networth : US$410,907,000

Paid-Up Capital : US$7,676,243

Net result : US$151,147,545

Net Margin(%) : 0.95

Return on Equity(%) : 19.21

Leverage Ratio : 1.79

Rating

Credit Opinion : CREDIT LINE TO A MAXIMUM OF USD61,636,000 CAN BE CONSIDERED

COMPANY IDENTIFICATION

Subject Company :	CARGILL INTERNATIONAL TRADING PTE LTD
Former Name :	CARGILL COMMODITY TRADING PTE. LTD.DATE OF CHANGE : 29/07/1993
Business Address:	300 BEACH ROAD #23-01 THE CONCOURSE
Town:	SINGAPORE
Postcode:	199555
Country:	Singapore
Telephone:	6295 1112
Fax:	6393 8898
ROC Number:	196700442D
Easy Number company:	00000406847670

PREVIOUS IDENTIFICATION

CARGILL COMMODITY TRADING PTE. LTD.DATE OF CHANGE : 29/07/1993

SUMMARY

Legal Form:	Pte Ltd
Date Inc.:	05/12/1967
Summary year :	31/05/2010
All amounts in this report are in :	USD
Sales:	8,636,038,679
Networth :	410,907,000
Capital:
Paid-Up Capital:	7,676,243
Employees:	450
Net result :	151,147,545
Share value:

AUDITOR

 
KPMG LLP 
 
BASED ON ACRA'S RECORD 
  NO OF SHARES  CURRENCY  AMOUNT 
ISSUED ORDINARY  1,650,000  SGD  1,650,000.00
ISSUED PREFERENCE  145,565  SGD  14,556,500.00 
PAID-UP ORDINARY  -  SGD  1,650,000.00 
PAID-UP PREFERENCE  -  SGS  14,556,500.00

REFERENCES

Credit Opinion:

CREDIT LINE TO A MAXIMUM OF USD61,636,000 CAN BE CONSIDERED

Litigation:	No
Company status :	TRADING
Started :	05/12/1967

PRINCIPAL(S)

JERAL SYLVESTER D'SOUZA

S2749969D

Director

DIRECTOR(S)

MARIAN VERONICA PESTANA	S1419613G	Company Secretary
Appointed on :	24/06/1985
Street :	149 TAMPINES STREET 12 #09-104
Town:	SINGAPORE
Postcode:	521149
Country:	Singapore

LYE PENG YEE	S2501597E	Director
Appointed on :	02/06/2003
Street :	18A JALAN TUA KONG
Town:	SINGAPORE
Postcode:	457211
Country:	Singapore

JERAL SYLVESTER D'SOUZA	S2749969D	Director
Appointed on :	06/08/1997
Street :	58 BELMONT ROAD
Town:	SINGAPORE
Postcode:	269890
Country:	Singapore

SYED MUNIRUL HASAN	S2715581B	Director
Appointed on :	21/04/1994
Street :	30 HOLLAND GREEN HOLLAND GREEN
Town:	SINGAPORE
Postcode:	276153
Country:	Singapore

PAUL JOHN HICKMAN	S2731685I	Director
Appointed on :	23/01/2006
Street :	1 HOLLAND GROVE WALK
Town:	SINGAPORE
Postcode:	278750
Country:	Singapore

MARC WILLEM DE HAAS	G5029868Q	Director
Appointed on :	24/02/2011
Street :	38 PRINCE OF WALES ROAD
Town:	SINGAPORE
Postcode:	266990
Country:	Singapore

SCOTT ALEXANDER BARNETT	G6005703L	Director
Appointed on :	24/02/2011
Street :	3 TAMAN NAKHODA #04-04 HOLLAND GEMS
Town:	SINGAPORE
Postcode:	257744
Country:	Singapore

ACTIVITY(IES)

Activity Code:

2765

BROKERS - COMMODITY FUTURE

BASED ON ACRA'S RECORD 
1) COMMODITY AND FUTURES BROKERS AND DEALERS

BANKERS

JPMORGAN CHASE BANK

SHAREHOLDERS(S)

CARGILL ASIA PACIFIC HOLDINGS PTE. LTD.

1,795,565

Company

Street :	300 BEACH ROAD #23-01 CONCOURSE, THE
Town:	SINGAPORE
Postcode:	199555
Country:	Singapore

Identification number: 200401312G

HOLDING COMPANY

CARGILL ASIA PACIFIC HOLDINGS PTE. LTD.

200401312G

100%

SUBSIDIARY(IES)

CARGILL GLOBAL TRADING INDIA PVT LTD

CARGILL OCEAN TRANSPORTATION (SINGAPORE) PTE. LTD.

PAYMENT HISTORY AND EXPERIENCES

Trade Morality:	AVERAGE
Liquidity :	SUFFICIANT
Payments :	REGULAR
Trend :	DOWNWARD
Financial Situation:	AVERAGE

FINANCIAL ELEMENTS

All amounts in this report are in :

USD

Audit Qualification:	UNQUALIFIED (CLEAN) OPINION	UNQUALIFIED (CLEAN) OPINION	UNQUALIFIED (CLEAN) OPINION
Date Account Lodged:	15/10/2010
Balance Sheet Date:	31/05/2010	31/05/2009	31/05/2008
Number of weeks:	52	52	52
Consolidation Code:	COMPANY	COMPANY	COMPANY

ASSETS
Preliminary Exp	2,164,000
Intangible Fixed Assets:	0	0	0
Tangible Fixed Assets:	2,024,000	2,822,000	2,592,083
Investments	21,244,000	21,252,000	21,252,163
Total Fixed Assets:	25,432,000	24,074,000	23,844,246
Inventories:	184,649,000	106,077,000	326,150,872
Receivables:	374,542,000	402,482,000	455,571,664
Short Term Fin. Assets:	3,749,000	4,509,000	21,636,596
Cash,Banks, Securitis:	1,286,000	245,000	81,927
Other current assets:	555,312,000	787,495,000	803,028,469
Total Current Assets:	1,119,538,000	1,300,808,000	1,606,469,528
TOTAL ASSETS:	1,144,970,000	1,324,882,000	1,630,313,774
LIABILITIES
Equity capital:	7,676,000	7,676,000	7,676,243
Reserves:	-56,000	-743,000	-946,852
Reeval. Reserves:		115,000	619,547
Profit & lost Account:	403,287,000	414,352,000	263,204,256
Total Equity:	410,907,000	421,400,000	270,553,194
L/T deffered taxes:		4,000	1,981,498
Other long term Liab.:	8,436,000	6,175,000	6,162,309
Total L/T Liabilities:	8,436,000	6,179,000	8,143,807
Trade Creditors:	222,361,000	290,929,000	395,326,409
Prepay. & Def. charges:	333,783,000	238,337,000	305,790,342
Advanced payments:	5,605,000	3,269,000	7,762,800
Provisions:	6,014,000	8,120,000	6,899,887
Other Short term Liab.:	157,864,000	356,648,000	635,837,335
Total short term Liab.:	725,627,000	897,303,000	1,351,616,773
TOTAL LIABILITIES:	734,063,000	903,482,000	1,359,760,580
PROFIT & LOSS ACCOUNT
Net Sales	8,298,276,000	8,636,039,000	8,563,805,351
Purchases,Sces & Other Goods:	8,209,180	8,439,018	8,404,133,067
Gross Profit:	8,290,066,820	8,627,599,982	159,672,284
NET RESULT BEFORE TAX:	81,516,000	157,900,000	104,431,196
Tax :	2,581,000	6,753,000	6,272,583
Net income/loss year:	78,935,000	151,147,000	98,158,613
Interest Paid:	1,178,000	5,917,000	10,130,883
Depreciation:	920,000	890,000	957,628
Dividends:	90,000,000
Wages and Salaries:	21,406,000	30,693,000	25,868,614
Financial Income:	1,797,000	4,125,000

RATIOS

Date Account Lodged:	31/05/2010	31/05/2009	31/05/2008
Turnover per employee:	18440613.33	19191197.78	19030678.56
Net result / Turnover(%):	0.01	0.02	0.01
Fin. Charges / Turnover(%):	0	0	0
Stock / Turnover(%):	0.02	0.01	0.04
Net Margin(%):	0.95	1.75	1.15
Return on Equity(%):	19.21	35.87	36.28
Return on Assets(%):	6.89	11.41	6.02
Dividends Coverage:	0.88
Net Working capital:	393911000	403505000	254852755
Cash Ratio:	0	0	0
Quick Ratio:	0.52	0.45	0.34
Current ratio:	1.54	1.45	1.19
Receivables Turnover:	16.25	16.78	19.15
Leverage Ratio:	1.79	2.14	5.03

 
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)/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)

BACKGROUND/OPERATION

THE COMPANY WAS INCORPORATED IN THE REPUBLIC OF SINGAPORE ON 
05/12/1967 AS A LIMITED PRIVATE COMPANY AND IS TRADING UNDER ITS 
NAMESTYLE AS "CARGILL COMMODITY TRADING PTE. LTD.". 
  
SUBSEQUENTLY, ON 29/07/1993, THE COMPANY CHANGED TO ITS PRESENT
NAMESTYLE OF "CARGILL INTERNATIONAL TRADING PTE LTD". 
 
AS AT 21/04/2011, THE COMPANY HAS ISSUED AND PAID-UP CAPITAL OF 
1,650,000 ORDINARY SHARES, OF A VALUE OF S$1,650,000 AND 145,565 
PREFERENCE SHARES, OF A VALUE OF S$14,556,500.
  
PRINCIPAL ACTIVITIES: 
SUBJECT IS REGISTERED WITH THE ACCOUNTING & CORPORATE REGULATORY 
AUTHORITY (ACRA) TO BE PRINCIPALLY ENGAGED IN THE BUSINESS OF:
1) COMMODITY AND FUTURES BROKERS AND DEALERS 
 
DURING THE FINANCIAL YEAR UNDER REVIEW, THE PRINCIPAL ACTIVITIES OF 
THE COMPANY CONSIST OF THOSE RELATING TO THE BUSINESS OF COMMODITIES 
TRADING.
 
FROM THE RESEARCH DONE, THE FOLLOWING INFORMATION WAS GATHERED: 
  
BACKGROUND (HOLDING COMPANY):
SINGAPORE IS THE HEADQUARTERS OF CARGILL'S ASIA-PACIFIC ACTIVITIES.WE 
OPENED OUR SINGAPORE OFFICE IN 1974; AND, CURRENTLY WE HAVE 300 
EMPLOYEES WORKING HERE. 
 
CARGILL HAS A CONTINUING COMMITMENT TO ASIA. WE ARE EXPANDING OUR
BUSINESSES THROUGH ACQUISITIONS AND JOINT VENTURES, AND ARE BRINGING 
INNOVATIVE STRATEGIES TO OUR CUSTOMERS IN ORDER TO HELP THEM SUCCEED. 
ASIA IS ONE OF THE LARGEST AND MOST IMPORTANT MARKETS GLOBALLY FOR 
CARGILL. WE HAVE TERRIFIC RELATIONSHIPS WITH OUR SUPPLIERS AND 
CUSTOMERS, AND ARE CONSISTENTLY WORKING TO BRING VALUE TO EACH COUNTRY
THROUGH QUALITY AND FOOD SAFETY. 
 
CARGILL ASIA PACIFIC WAS AWARDED THE 2000/01 SINGAPORE INTERNATIONAL 
TRADE AWARD FROM SENIOR MINISTER LEE KWAN-YEW DURING A TELEVISED 
CEREMONY. WE WERE GIVEN THE AWARD FOR OUTSTANDING ACHIEVEMENTS AND
SIGNIFICANT CONTRIBUTIONS MADE TO INCREASE SINGAPORE'S PROSPERITY VIA 
INTERNATIONAL TRADE BY THE TRADE DEVELOPMENT BOARD.  
 
PRODUCTS AND SERVICES
FOOD: 
FOOD INGREDIENTS AND APPLICATIONS SERVES GLOBAL, REGIONAL AND LOCAL 
FOOD MANUFACTURERS, FOOD SERVICE COMPANIES AND RETAILERS WITH FOOD AND
BEVERAGE INGREDIENTS, MEAT AND POULTRY PRODUCTS, AND NEW FOOD 
APPLICATIONS.
  
AT SUN VALLEY THAILAND (SVT), A FULLY INTEGRATED POULTRY PRODUCTION 
SYSTEM WHICH RAISES AND PROCESSES CHICKEN PRODUCTS FOR BOTH DOMESTIC 
CONSUMPTION AND EXPORT, IT MEANS COLLABORATING WITH OUR CUSTOMERS TO 
MEET THEIR NEEDS FOR QUALITY CUTS OF POULTRY TO BE SOLD IN THEIR
STORES. OUR PLANT IN SUN VALLEY THAILAND WAS PRESENTED THE NATIONAL 
HEALTH AND SAFETY AWARD IN 2001, THAILAND'S HIGHEST NATIONAL AWARD FOR
COMPANIES WHO HAVE DEMONSTRATED HEALTH AND SAFETY EXCELLENCE. SVT ALSO
RECEIVED THE PRESTIGIOUS SWEENEY AWARD FOR 2000 FROM OUR KEY CUSTOMER 
MCDONALD'S AND WERE PRAISED FOR THEIR INNOVATION, MANAGEMENT
LEADERSHIP AND BUSINESS RESULTS. CARGILL NOW HOLDS TWO OF THE FIVE 
SWEENEY AWARDS GRANTED SINCE 1990. 
 
CARGILL OPERATES A 27,000 HECTARE OIL PALM PLANTATION ON THE ISLAND OF
SUMATRA IN INDONESIA. HERE WE ARE WORKING TO HELP FARMERS PROCESS AND
CONVERT FRESH FRUIT TO CRUDE PALM OIL AND RELATED BY-PRODUCTS. CARGILL
MANAGES CLOSE TO 15 PERCENT OF THE TOTAL GRAIN AND OILSEED IMPORTS 
INTO ASIA THROUGH OUR ASIAN OILS TRADING AND MARKETING GROUP (AOTM) IN
SINGAPORE. WE PROVIDE RISK, MERCHANDISING AND SUPPLY CHAIN MANAGEMENT 
SOLUTIONS FOR PALM AND COCONUT OIL-BASED PRODUCTS FROM INDONESIA,
MALAYSIA AND THE PHILIPPINES. AOTM MANAGES AN OPTIMALLY-CONFIGURED 
SHIPPING PROGRAM TO MEET THE PHYSICAL NEEDS OF ITS LARGEST CUSTOMERS, 
AND ALSO OFFERS DIFFERENTIATED PRICE RISK MANAGEMENT AND LOGISTICAL 
SOLUTIONS TO ITS CUSTOMERS GLOBALLY. AOTM HANDLES ROUGHLY 10 PERCENT 
OF THE TOTAL TRADABLE MARKET FOR PALM OIL PRODUCTS AND SHIPPED ABOUT
TWO MILLION METRIC TONS OF PALM OIL AND DERIVATIVE PRODUCTS LAST YEAR.
CARGILL RECENTLY ACQUIRED TOSHOKU, A FOOD TRADING COMPANY IN JAPAN. 
CARGILL WORKED WITH TOSHOKU MANAGERS AND EMPLOYEES TO DRAFT A PLAN TO 
REORGANIZE THE COMPANY'S BUSINESSES AND FINANCES AND IMPROVE ITS 
PROSPECTS. THIS WAS THE FIRST TIME A WESTERN COMPANY WAS APPOINTED AS
A SPONSOR OF A NON-FINANCIAL JAPANESE COMPANY IN REHABILITATION. 
TOSHOKU IS A TRADING COMPANY AND A DISTRIBUTOR AND RETAILER OF 
COMMODITIES AND FOOD, AND IS HEADQUARTERED IN TOKYO.
 
SUBJECT ENGAGES IN THE FOLLOWING ACTIVITIES: 
* ASIAN TRADING AND MARKETING ARM OF CARGILL INTERNATIONAL SA 
* COMMODITIES TRADING (SUCH AS FOOD, RICE, MINERAL, RUBBER, TEEL, 
 ETC.)
  
SUBJECT IS A MEMBER OF FOLLOWING ENTITIES: 
* PALM OIL REFINERS ASSOCIATION OF MALAYSIA 
* SINGAPORE CHINESE CHAMBERS OF COMMERCE & INDUSTRY
  
FROM THE PRIOR TELE-INTERVIEW CONDUCTED EARLIER, THE FOLLOWING WAS 
GATHERED: 
  
IMPORT COUNTRIES:
* WORLDWIDE (MALAYSIA, INDONESIA, ETC) 
 
EXPORT COUNTRIES: 
* ASIA-PACIFIC REGION (CHINA, THAILAND, ETC)
 
TERMS OF PAYMENT: 
* TRADE AND OTHER RECEIVABLES: TELEGRAPHIC TRANSFER, ETC 
* TRADE AND OTHER PAYABLES: TELEGRAPHIC TRANSFER, ETC 
  
NUMBER OF EMPLOYEES:
* 2009: 500 
 
FROM THE TELE-INTERVIEW CONDUCTED, SUBJECT CONFIRMED ITS
BUSINESS ADDRESS, CONTACT NUMBERS AND LINE OF BUSINESS. SUBJECT ALSO 
REVEALED THAT THEY HAVE ABOUT 450 EMPLOYEES. FURTHER ENQUIRIES WERE
REJECTED. NO OTHER TRADE INFORMATION WAS AVAILABLE. 
  
NO OTHER TRADE INFORMATION WAS AVAILABLE AS TELE-INTERVIEW WAS NOT 
GRANTED BY SUBJECT'S PERSONNEL.
 
THE IMMEDIATE AND ULTIMATE HOLDING COMPANIES DURING THE FINANCIAL YEAR
ARE CARGILL ASIA PACIFIC HOLDINGS PTE LTD AND CARGILL INCORPORATED, 
WHICH ARE INCORPORATED IN THE REPUBLIC OF SINGAPORE AND THE UNITED 
STATES OF AMERICA RESPECTIVELY.
 
REGISTERED AND BUSINESS ADDRESS: 
300 BEACH ROAD  
#23-01 THE CONCOURSE 
SINGAPORE 199555 
DATE OF CHANGE OF ADDRESS: 16/08/1993
- RENTED PREMISE 
- PREMISE OWNED BY: BY HONG FOK LAND PTE LTD 
- MAIN OFFICE AND RECEPTION 
 
OTHER BUSINESS ADDRESS:
300 BEACH ROAD  
#09-01 THE CONCOURSE 
SINGAPORE 199555 
- OFFICE
 
WEBSITE: http://www.cargill.com  
EMAIL : -

MANAGEMENT

THE DIRECTORS AT THE TIME OF THIS REPORT ARE: 
 
1) MARC WILLEM DE HAAS, A DUTCH  
 - BASED IN SINGAPORE.
 
2) SCOTT ALEXANDER BARNETT, AN AUSTRALIAN 
 - BASED IN SINGAPORE. 
  
3) LYE PENG YEE, A SINGAPOREAN
 - HOLDS NO OTHER DIRECTORSHIPS AS RECORDED IN OUR DATABASE. 
 
4) SYED MUNIR-UL HASAN, A PAKISTANI 
 - BASED IN SINGAPORE.
 
5) PAUL JOHN HICKMAN, A BRITISH 
 - BASED IN SINGAPORE.  
 
6) JERAL SYLVESTER D'SOUZA, A BRITISH
 - BASED IN SINGAPORE.

Singapore’s Country Rating 2010

Investment Grade

THE SINGAPORE ECONOMY WAS SIGNIFICANTLY AFFECTED BY THE CRISIS DUE TO THE CONTRACTION OF EXPORTS, WHICH REPRESENT 210% OF GDP. SALES ABROAD OF MANUFACTURED PRODUCTS (ELECTRONICS, ENGINEERING, PHARMACEUTICALS, PETROCHEMICALS) AND SERVICES (FINANCIAL SERVICES, TOURISM, TRANSPORT) WERE AFFECTED BY THE WEAK PERFORMANCE OF THE MAIN TRADING PARTNERS (MALAYSIA, UNITED STATES, CHINA, JAPAN). WITH THE ECONOMY'S SLIDE INTO RECESSION, THE CENTRAL BANK REDUCED INTEREST RATES SEVERAL TIMES AND A STIMULUS PROGRAMME REPRESENTING 8% OF GDP WAS IMPLEMENTED IN JANUARY LAST YEAR. ALTHOUGH INCREASED PUBLIC SPENDING ON INFRASTRUCTURE, TRANSPORT, HEALTH AND EDUCATION ENABLED THE AUTHORITIES TO LIMIT THE CONTRACTION OF INVESTMENT, THAT DID NOT SUFFICE TO OFFSET THE DROP IN PRIVATE INVESTMENT. THE GOVERNMENT MOREOVER GRANTED DEFAULT GUARANTEES OF UP TO 80% ON NEW LOANS. AND HOUSEHOLD CONSUMPTION WAS SUPPORTED BY A REDUCTION OF INCOME TAX AND MEASURES TO FOSTER EMPLOYMENT. 

IN Q1 2010, GROWTH REBOUNDED SIGNIFICANTLY (15.5% Y/Y). FOR THE ENTIRE YEAR, GROWTH IS EXPECTED TO REMAIN HIGH (8.9%) THANKS TO THE POSITIVE IMPACT ON DOMESTIC DEMAND OF THESE EXPANSIONARY MONETARY AND FISCAL POLICIES AND THE GRADUAL RECOVERY OF THE WORLD ECONOMY. INVESTMENT, CONSUMPTION, AND NET EXPORTS ARE AGAIN EXPECTED TO CONTRIBUTE POSITIVELY TO GROWTH. ON THE SUPPLY SIDE, THE CONSTRUCTION SECTOR WILL BENEFIT AGAIN THIS YEAR FROM INCREASED PUBLIC SPENDING WHILE ELECTRONICS, PHARMACEUTICALS, PETROCHEMICALS, FINANCIAL SERVICES, AND TOURISM WILL GRADUALLY RECOVER. THE COFACE PAYMENT MONITORING ARE THUS EXPECTED TO REFLECT THIS FAVOURABLE TREND. SINGAPORE BOASTS THE BEST GOVERNANCE IN ASIA UNDERPINNED BY AN EFFECTIVE LEGAL SYSTEM THAT FACILITATES CLAIM COLLECTION AND A HIGH LEVEL OF FINANCIAL TRANSPARENCY.

STRONG FINANCIAL POSITION

DESPITE IMPLEMENTATION OF A BROAD STIMULUS PROGRAMME, THE COUNTRY CONTINUED TO RUN A SLIGHT FISCAL SURPLUS IN 2009, WHICH IS EXPECTED TO GROW IN 2010. PUBLIC SECTOR FINANCES HAVE THUS REMAINED SOLID.

DESPITE THE CONTRACTION OF THE CURRENT ACCOUNT SURPLUS, EXTERNAL ACCOUNTS ALSO REMAINED LARGELY IN SURPLUS LAST YEAR. IN 2010, THE CURRENT ACCOUNT SURPLUS WILL LIKELY REMAIN STABLE AS RESULT OF THE MORE RAPID RECOVERY OF IMPORTS COMPARED TO EXPORTS, ASSOCIATED WITH THE RISE OF RAW MATERIAL PRICES AND THE REBOUND OF DOMESTIC DEMAND. BESIDES, THE VOLATILITY OF PORTFOLIO INVESTMENT FLOWS THAT DEVELOPED AFTER THE LEHMAN BROTHERS BANKRUPTCY EASED IN 2009. IN 2010, THE HIGH LEVEL OF FOREIGN EXCHANGE RESERVES IS EXPECTED TO CONTINUE TO ENDOW THE COUNTRY WITH GOOD CAPACITY TO WITHSTAND SUDDEN CAPITAL.

MOREOVER, DESPITE THE INTERNATIONAL FINANCIAL TURMOIL AND THE EXPOSURE OF SOME BANKS TO SUBPRIMES AND LEHMAN BROTHERS, THE BANKING SYSTEM IS STILL SOLID THANKS TO SATISFACTORY RISK MANAGEMENT, EFFECTIVE OVERSIGHT, AND HIGH SOLVENCY AND LIQUIDITY RATIOS. 

ASSETS

* VERY HIGH QUALITY-COMPETITIVENESS

* DEVELOPMENT OF HIGH VALUE-ADDED SECTORS (CHEMICALS, PHARMACEUTICALS, FINANCE)

* STRONG FDI INFLOWS THANKS TO AN ADVANTAGEOUS TAX REGIME, POLITICAL STABILITY AND AN EXCELLENT BUSINESS ENVIRONMENT

* MAJOR EXPORTER OF CAPITAL IN ASIA VIA THE PUBLIC HOLDING COMPANY TEMASEK

WEAKNESSES

* ECONOMY DEPENDENT ON FOREIGN DEMAND

* SHORTAGES OF SKILLED LABOUR

* AGEING POPULATION

* LATENT SOCIAL TENSIONS IN A CONTEXT OF INCREASING INEQUALITY AND GROWING DURABLE UNEMPLOYMENT AMONG THE LEAST SKILLED

WHOLESALE AND RETAIL TRADE SECTOR

PAST PERFORMANCE

THE WHOLESALE AND RETAIL TRADE SECTOR GREW BY 18.0 IN 1Q 2010, FOLLOWING THE 1.5% GAIN IN 4Q 2009. IT IS ATTRIBUTED TO IMPROVEMENTS IN GLOBAL TRADE FLOWS.

DOMESTIC WHOLESALE TRADE INDEX

THE DOMESTIC WHOLESALE TRADE (SEASONALLY ADJUSTED) ROSE BY 1.8% IN 1Q 2010 OVER 4Q 2009, WITH IMPROVING SALES IN INDUSTRIAL AND CONSTRUCTION MACHINERY, GENERAL WHOLESALE TRADE AND CHEMICALS AND CHEMICAL PRODUCTS SECTORS, BUT PETROLEUM AND PETROLEUM PRODUCTS REGISTERED LOWER SALES. EXCLUDING PETROLEUM, OVERALL DOMESTIC SALES GREW BY 9.7%.

COMPARED TO THE SAME PERIOD A YEAR AGO, DOMESTIC WHOLESALE TRADE IN 1Q 2010 ROSE BY 37.1%, WITH HIGHER SALES REPORTED BY ALL WHOLESALE SECTORS. EXCLUDING PETROLEUM, DOMESTIC WHOLESALE TRADE GREW BY 26.9%.

AFTER REMOVING PRICE EFFECT, DOMESTIC WHOLESALE TRADE VOLUME SHOWED A RELATIVELY SMALLER YEAR-0N-YEAR INCREASE OF 9.4%. EXCLUDING PETROLEUM, DOMESTIC WHOLESALE TRADE GREW BY 17.9%.

ALL WHOLESALE SECTORS, EXCEPT PETROLEUM AND PETROLEUM PRODUCTS AND TIMBER, PAINTS AND CONSTRUCTION MATERIALS, REGISTERED POSITIVE GROWTHS IN DOMESTIC WHOLESALE TRADE IN 1Q 2010 COMPARED TO 4Q 2009 (AFTER SEASONAL ADJUSTMENT).

SECTORS THAT REGISTERED DOUBLE-DIGIT QUARTER-ON-QUARTER GROWTHS INCLUDED INDUSTRIAL AND CONSTRUCTION MACHINERY (25.7%), GENERAL WHOLESALE TRADE (24.5%) AND CHEMICALS AND CHEMICAL PRODUCTS (16.7%).

OTHER SECTORS SUCH AS TELECOMMUNICATIONS AND COMPUTERS, ELECTRONIC COMPONENTS, SHIP CHANDLERS AND BUNKERING, FOOD, BEVERAGES AND TOBACCO AS WELL AS HOUSEHOLD EQUIPMENT AND FURNITURE RECORDED INCREASES OF BETWEEN 1.0% AND 5.7%.

PETROLEUM AND PETROLEUM PRODUCTS AND TIMBER, PAINTS AND CONSTRUCTION MATERIALS SECTORS REGISTERED DECLINES OF 3.0% AND 1.6% RESPECTIVELY IN DOMESTIC WHOLESALE TRADE OVER 4Q 2009.

ALL WHOLESALE SECTORS REGISTERED YEAR-ON-YEAR GROWTHS IN DOMESTIC WHOLESALE TRADE IN 1Q 2010.

DOMESTIC SALES OF GENERAL WHOLESALE TRADE, CHEMICALS AND CHEMICAL PRODUCTS AS WELL AS PETROLEUM AND PETROLEUM PRODUCTS SECTORS ROSE BY BETWEEN 54.6% AND 96.5% OVER THE SAME PERIOD A YEAR AGO. AFTER REMOVING PRICE EFFECT, THE SALES VOLUME OF GENERAL WHOLESALE TRADE AND CHEMICALS AND CHEMICAL PRODUCTS GREW BY 75.7% AND 25.2% RESPECTIVELY WHILE THAT OF PETROLEUM AND PETROLEUM PRODUCTS FELL BY 1.1%.

OTHER SECTORS THAT RECORDED DOUBLE-DIGIT YEAR-ON-YEAR GROWTHS IN DOMESTIC WHOLESALE TRADE INCLUDED ELECTRONIC COMPONENTS (33.1%), TELECOMMUNICATIONS AND COMPUTERS (26.4%), TRANSPORT EQUIPMENT (19.6%), HOUSEHOLD EQUIPMENT AND FURNITURE (17.3%), INDUSTRIAL AND CONSTRUCTION MACHINERY (16.0%), SHIP CHANDLERS AND BUNKERING (15.6%) AND TIMBER, PAINTS AND CONSTRUCTION MATERIALS (11.2%).

FOREIGN WHOLESALE TRADE INDEX

FOREIGN WHOLESALE TRADE (SEASONALLY ADJUSTED) ROSE BY 9.8% IN 1Q 2010 OVER 4Q 2009, WITH IMPROVEMENT IN SALES IN MOST OF THE WHOLESALE SECTORS. EXCLUDING PETROLEUM, FOREIGN WHOLESALE TRADE ROSE BY 7.4% OVER THE PREVIOUS QUARTER.

ON A YEAR-ON-YEAR BASIS, FOREIGN WHOLESALE TRADE GREW BY 37.8%, WITH STRONG GROWTHS IN MOST WHOLESALE SECTORS. EXCLUDING PETROLEUM, FOREIGN WHOLESALE TRADE ROSE BY 23.0%.

AFTER ADJUSTING FOR PRICE CHANGES, FOREIGN WHOLESALE TRADE VOLUME ROSE BY 9.8% FROM A YEAR AGO. EXCLUDING PETROLEUM, FOREIGN WHOLESALE TRADE VOLUME GREW BY 17.4%.

AFTER SEASONAL ADJUSTMENT, ALL WHOLESALE SECTORS REGISTERED POSITIVE QUARTER-ON-QUARTER GROWTHS IN FOREIGN WHOLESALE TRADE IN 1Q 2010, EXCEPT TIMBER, PAINT AND CONSTRUCTION MATERIALS, FOOD, BEVERAGES AND TOBACCO AND TELECOMMUNICATIONS AND COMPUTERS.

GENERAL WHOLESALE TRADE AND INDUSTRIAL AND CONSTRUCTION MACHINERY SECTORS REGISTERED DOUBLE-DIGIT INCREASES OF 15.5% AND 11.9% RESPECTIVELY IN FOREIGN WHOLESALE TRADE. SHIP CHANDLERS AND BUNKERING, HOUSEHOLD EQUIPMENT AND FURNITURE, PETROLEUM AND PETROLEUM PRODUCTS, CHEMICALS AND CHEMICAL PRODUCTS AND ELECTRONIC COMPONENTS SECTORS ALSO GREW BETWEEN 1.5% AND 5.4%.

FOREIGN SALES OF TIMBER, PAINTS AND CONSTRUCTION MATERIALS AND FOOD, BEVERAGES AND TOBACCO FELL BY 7.6% AND 4.8% RESPECTIVELY IN 1Q 2010.

OTHER THAN THE FOOD, BEVERAGES AND TOBACCO SECTOR WHICH REGISTERED A MARGINAL DROP OF 1.5%, ALL WHOLESALE SECTORS REGISTERED DOUBLE-DIGIT YEAR-ON-YEAR GROWTHS IN FOREIGN WHOLESALE TRADE.

PETROLEUM AND PETROLEUM PRODUCTS, SHIP CHANDLERS AND BUNKERING, CHEMICALS AND CHEMICAL PRODUCTS SECTORS REGISTERED HIGHER FOREIGN SALES OF BETWEEN 30.0% AND 60.6%. AFTER ADJUSTING FOR PRICE CHANGES, FOREIGN WHOLESALE TRADE VOLUME OF PETROLEUM AND PETROLEUM PRODUCTS AND CHEMICALS AND CHEMICAL PRODUCTS ROSE BY A SMALLER 1.8% AND 3.6% RESPECTIVELY WHILE THAT OF SHIP CHANDLERS AND BUNKERING FELL BY 0.1%.

OTHER SECTORS THAT REPORTED STRONG YEAR-ON-YEAR GROWTHS IN FOREIGN SALES INCLUDED HOUSEHOLD EQUIPMENT AND FURNITURE (48.4%), GENERAL WHOLESALE TRADE (41.6%), TRANSPORT EQUIPMENT (37.5%) AND TIMBER, PAINTS AND CONSTRUCTION MATERIALS (36.4%).

RETAIL SALES

RETAIL SALES VOLUME ROSE FOR THE FIRST TIME SINCE 3Q 2008 TO REACH 1.1%, REVERSING THE 4.1% DECLINE REGISTERED IN 4Q 2010. EXCLUDING MOTOR VEHICLE SALES, THE GROWTH WAS HIGHER AT 7.0%.

ALTHOUGH WEIGHED DOWN BY THE DECLINE OF MOTOR VEHICLE SALES (-13.0%), OTHER MAJOR RETAIL SEGMENTS, SUCH AS WATCHES AND JEWELLERY (14.0%), FURNITURE AND HOUSEHOLD EQUIPMENT (14.0%), WEARING APPAREL AND FOOTWEAR (10.0%), AND DEPARTMENT STORES (8.1%) POSTED STRONG GROWTH IN THE FIRST QUARTER OF 2010.

NEWS

MOTOR INDUSTRY SHAKE-UP

THE MOTOR INDUSTRY IS BRACING ITSELF FOR A SHAKE-UP. THIS IS BECAUSE NEW VEHICLE SALES COULD SINK BELOW 55,000 CARS THIS YEAR – LESS THAN HALF THE AVERAGE 117,000 IT MOVED OOUT OF SHOWROOMS IN EACH OF THE “FEAST” YEARS OF THE LAST DECADE.

RETRENCHEMENTS AND RESTRUCTURING ARE ON THE INDUSTRY’S HORIZON, IN RESPONSE TO THE NEW MARKET SIZE BROUGHT ON BY A SHARP CUT IN THE CERTIFICATE OF ENTITLEMENT (COE) SUPPLY, WHICH KICKED IN LAST MONTH.

MOTOR COMPANIES THAT HAVE BUILT NEW SHOWROOMS OR EXPANDED EXISTING ONES AND HIRED MORE SALES STAFF NOW FIND THEY HAVE TO SCALE BACK.

MR CHEAH KIM TECK, JARDINE CYCLE & CARRIAGE’S CHIEF EXECUTIVE FOR MOTOR OPERATIONS, SAID: “A SAD FACT OF THE TRADE IS WHEN THE MARKET WAS HOVERING AROUND 100,000 UNITS A YEAR, YOU HAD TO HAVE THE SALES PEOPLE. NOW YOU HAVE TO CUT.”

EVEN AS MOTOR FIRMS ARE LOOKING AT TRIMMING THEIR HEADCOUNTS, SOME SALES STAFF ARE ALREADY LEAVING FOR OTHER INDUSTRIES THAT ARE FARING WELL, SUCH AS THE REAL ESTATE, HOSPITALITY AND FINANCIAL SECTORS, SAID MR JESLIN TEO, CHIEF EXECUTIVE OF FIAT AGENT TTS EUROCARS.

THOSE WHO STAY ON IN SALES MAY WELL TAKE HOME SMALLER COMMISSIONS.

BMW AGENT PERFOMANCE MOTORS AND THE SINGAPORE MANUAL & MERCANTILE WORKERS’ UNION, FOR INSTANCE, RECENTLY AGREED ON A NEW COMMISSION PLAN.

A SENIOR SPOKESMAN FOR BORNEO MOTORS, WHICH DISTRIBUTES THE TOP-SELLING TOYOTA BRAND, SAID THE COE SQUEEZE WOULD HIT VOLUME-SELLES HARDER, BECAUSE “ A 40.0% DROP TO A FIRM

THAT SELLS 150 CARS A YEAR MEANS 60 CARS. BUT TO ONE THAT SELLS 10,000 CARS, IT’S 4,000”.

EVEN MR KARSONO KWEE, THE EXECUTIVE CHAIRMAN OF EUROKARS GROUP AND ONE OF THE MOST BULLISH MOTOR TRADERS IN SINGAPORE, SAID HE WILL ASSESS WHETHER THE GROUP NEEDS ALL THE SEVEN SHOWROOMS IT NOW HAS.

EUROKARS HOLDS THE ROLLS-ROYCE, MINI, PORSCHE, OPEL AND SAAB FRANCHISES.

BUT HE SAID HE WILL CONDUCT THE REVIEW ONLY IN 22 MONTHS, AFTE A MAJOR PROJECT TO HOUSE ROLLS=ROYCE AND PORSCHE IN A CITY SHOWROOM IS COMPLETED,”BECAUSS WE STILL NEED THE SPACE WHEN CONSTRUCTION IS GOING ON”.

THE GROUP HAS ALREADY RENTED OUT ITS FORMER OPEL SHOWROOM IN KAMPUNG UBI AND MOVED THE BRAND TO ONE OF ITS TOWN PREMISES.

BESIDES DOING A STOCK-TAKE ON THEIR INFRASTRUCTURE, MOTOR COMPANIES ARE ALSO REDEFINING THE SCOPE OF THEIR BUSINESS.

THE STRAITS TIMES UNDERSTANDS THAT BORNEO MOTORS, WHICH HAS SHUNNED THE USED-CAR TRADE SINCE 1998, WILL REVISIT THE SEGMENT SOON.

PARALLEL IMPORTERS, MANY OF WHOM WERE USED-CAR DEALERS BEFORE THE 1990S, ARE ALSO RETURNING TO THEIR FORMER TRADE NOW THAT THE COE SUPPLY IS DOWN.

MR RAYMOND TANG, THE SECRETARY OF THE SINGAPORE VEHICLE TRADERS ASSOCIATION, SAID: “THOSE WHO ARE STILL DOING PARALLEL IMPORTING HAVE SHIFTED THEIR FOCUS TO BIGGER CARS AND EUROPEAN BRANDS. THESE GIVE THEM BETTER MARGINS FOR COE BIDDING.”

THE BORNEO MOTORS SPOKESMAN NOTED THAT THE INDUSTRY SHAKE-UP WOULD ALSO HAVE A RIPPLE EFFECT ON BUSINESSES IN SUPPORTING INDSUTRIES – THOSE SUPPLYING CAR ACCESSORIES, LEATHER UPHOLSTERY AND THOSE THAT PROVIDE PRE-DELIVERY INSPECTIONS.

MR DAVID SIEW, THE PROPRIETOR OD TOMO-CSE, A LEADING SUPPLIER OF LEATHER UPHOLSTERY, SAID HE EXPECTS HIS BUSINESS HERE TO SHRINK BY AT LEAST 30.0% OVER THE NEXT SIX MONTHS.

MOTOR TRADERS FEEL THE COE SUPPLY COULD HAVE BEEN CUT MORE GRADUALLY.

MR MICHAEL WONG, THE VICE-PRESIDENT OF THE MOTOR TRADERS ASSOCIATION, SAID:”IN PREVIOUS IMPLEMENTATIONS OF POLICIES AND RULES, CHANGES WERE SPREAD OUT OVER TIME, SO IT WAS MORE GRADUAL.”

MR CHEAH AGREED, SAYING THE COE CUT MADE FOR A FAMINE AFTER THE FEAST.

HE SAID HE EXPECTED THE COE SUPPLY TO RETURN TO “SIZEABLE LEVELS BY 2013, BUT GETTING THROUGH THE NEXT THREE YEARS “WILL NOT BE EASY, ESPECIALLY FOR THE MARGINAL PLAYERS”.

OUTLOOK

A NET WEIGHTED BALANCE OF 44% OF WHOLESALERS EXPECT POSITIVE BUSINESS SENTIMENTS FOR THE PERIOD ENDING SEP 2010. IN PARTICULAR, THOSE DEALING WITH FOOD AND BEVERAGES, CHEMICALS AND CHEMICAL PRODUCTS, NON-AGRICULTURAL INTERMEDIATE PRODUCTS, INDUSTRIAL MACHINERY AND EQUIPMENT, AND COMPUTERS AND ACCESSORIES.

RETAILERS FORECAST LESS UPBEAT BUSINESS CONDITIONS FOR THE COMING MONTHS. A NET WEIGHTED BALANCE OF 18% OF RETAILERS FORECAST LESS FAVOURABLE BUSINESS PROSPECTS FOR THE PERIOD ENDING SEP 2010. THIS APPLIES TO DEPARTMENT STORES, SUPEMARKETS, RETAILERS OF MOTOR VEHICLES, COSMETICS AND TOILETRIES AND WEARING APPAREL AND FOOTWEAR.

EXTRACTED FROM: MINISTRY OF TRADE AND INDUSTRY, SINGAPORE

SINGAPORE DEPARTMENT OF STATISTICS

THE STRAITS TIMES

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.51.75
UK Pound	1	Rs.80.01
Euro	1	Rs.65.99

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	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
----	NB	New Business	----

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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