MIRA INFORM REPORT

Report Date :

5^th June 2006

IDENTIFICATION DETAILS

Name :	E-SMART TECHNOLOGY PTE LTD
Registered Office :	^17 Kallang Junction, #04-01/03/04 ^Esmart Centre, 339274, Singapore
Country :	^Singapore
Financials (as on) :	31/12/2004
Date of Incorporation :	^01/08/2001
Com. Reg. No.:	^200105097N
Legal Form :	^Pte Ltd
Line of Business :	Design and supply of intermediate electronic products and dstribution of electronic components

RATING & COMMENTS

MIRA’s Rating :

Ca

RATING		STATUS	PROPOSED CREDIT LINE
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

Status :	Moderate
Payment Behaviour :	Regular
Litigation :	Clear

Subject Company

E-SMART TECHNOLOGY PTE LTD

Line Of Business 

DESIGN AND SUPPLY OF INTERMEDIATE ELECTRONIC PRODUCTS AND

DISTRIBUTION OF ELECTRONIC COMPONENTS

Parent Company

ESMART HOLDINGS LIMITED

(PERCENTAGE OF SHAREHOLDING: 51%)

Financial Elements

FY 2004

COMPANY

Sales : S$2,233,905

Net worth : S$-507,244

Paid-Up Capital : S$680,000

Net result : S$-408,668

Net Margin(%) : -18.29

Return on Equity(%) : 80.57

Leverage Ratio : -2.48

Rating

Credit Requested : -

Credit Rating : Singapore $10000

Credit Opinion : -

BUSINESS INFORMATION REPORT

COMPANY IDENTIFICATION

^{Subject Company: E-SMART TECHNOLOGY PTE LTD}

^{Former Name: -}

^{Business Address: 17 KALLANG JUNCTION}

^#04-01/03/04

^{ESMART CENTRE}

^{Town: SINGAPORE}

^{Postcode: 339274}

^{County: -}

^{Country: Singapore}

^{Telephone: 6299 7811}

^{Fax: 6294 1518}

^{ROC Number: 200105097N}

^{Reg. Town: -}

SUMMARY

^{Legal Form: Pte Ltd}

^{Date Inc.: 01/08/2001}

^{Previous Legal Form: -}

^{Summary year: 31/12/2004}

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

^{Sales: 2,233,905}

^{Net worth: -507,244}

^{Capital: 1,000,000}

^{Paid-Up Capital: 680,000}

^{Employees: 7}

^{Net result: -408,668}

^{Share value: 1}

^{Auditor: MOORES ROWLAND}

REFERENCES

^{Report Date: 05/06/2006}

^{Update Date: 05/06/2006}

^{Credit Requested: -}

^{Credit Opinion: -}

^{Litigation: No}

^{Company status: TRADING}

^{Started: 01/08/2001}

PRINCIPAL(S)

^{LEE KEOW CHIN S1201750B Director}

DIRECTOR(S)

^{LEE KEOW CHIN S1201750B Director}

^{Appointed on: 01/08/2001}

^{Street: 3 BALMORAL ROAD}

^#03-01

^{Town: SINGAPORE}

^{Postcode: 259785}

^{Country: Singapore}

^{KINGSLEY NEO HOCK BENG S1672254E Director}

^{Appointed on: 16/06/2005}

^{Street: 193 SEAGULL WALK}

^{Town: SINGAPORE}

^{Postcode: 486662}

^{Country: Singapore}

^{NOR HAFIZA ALWI S1788410G Company Secretary}

^{Appointed on: 02/11/2005}

^{Street: 2 GHIM MOH ROAD}

^#07-318

^{Town: SINGAPORE}

^{Postcode: 270002}

^{Country: Singapore}

^{LUA EK CHAN S2570208E Director}

^{Appointed on: 15/11/2005}

^{Street: 22 WILBY ROAD}

^#07-15

^{THE TESSARIN0A}

^{Town: SINGAPORE}

^{Postcode: 276306}

^{Country: Singapore}

ACTIVITY(IES)

^{ELECTRONIC COMPONENTS Code:7605}

^{ELECTRIC APPLIANCES - WHSLE And MFRS Code:7340}

^{BASED ON ACRA'S RECORD AS AT 30/05/2006}

^{1) WHOLESALE OF ELECTRONIC COMPONENTS}

^{2) WHOLESALE OF HOUSEHOLD ELECTRICAL APPLIANCES AND EQUIPMENT}

CHARGES

No Charges On Premises/Property In Our Database

PREMISES/PROPERTY INFORMATIONS

No Premises/Property Information In Our Databases

BANKERS

No Bankers Information In Our Database

SHAREHOLDERS(S)

^{ESMART HOLDINGS LIMITED 346,800 Company}

^{Street: 17 KALLANG JUNCTION}

^#04-01

^{ESMART CENTRE}

^{Town: SINGAPORE}

^{Postcode: 339274}

^{Country: Singapore}

^{K & S SECRETARIAL LIMITED 333,200 Company}

^{Street: UNIT D, 17/F SEABRIGHT PLAZA}

^{9-23, SHELL STREET}

^{NORTH POINT}

^{Town: HONG KONG}

^{Postcode: -}

^{Country: Hong Kong}

HOLDING COMPANY

^{ESMART HOLDINGS LIMITED 200102393E % : 51.00}

SUBSIDIARY(IES)

No Participation In Our Database

PAYMENT HISTORY AND EXPERIENCES

^{Trade Morality: AVERAGE}

^{Liquidity: LACKING}

^{Payments: REGULAR}

^{Trend: UPWARD}

^{Financial Situation: AVERAGE}

LITIGATION(S)

No Litigation In Our Database

FINANCIAL ELEMENTS

All amounts in this report are in: SGD

Audit Qualification: GOING CONCERN QUALIFICATION GOING CONCERN QUALIFICATION

^{Date Account Lodged: 21/04/2005}

^{Balance Sheet Date: 31/12/2004 31/12/2003}

^{Number of weeks: 52 52}

^{Consolidation Code: COMPANY COMPANY}

^{--- ASSETS}

^{Tangible Fixed Assets: 18,815 16,784}

^{Total Fixed Assets: 18,815 16,784}

^{Inventories: 106,571 190,495}

^{Receivables: 463,430 97,321}

^{Cash,Banks, Securities: 108,237 334,445}

^{Other current assets: 55,883 44,015}

^{Total Current Assets: 734,121 666,276}

^{TOTAL ASSETS: 752,936 683,060}

^{--- LIABILITIES}

^{Equity capital: 680,000 680,000}

^{Profit & loss Account: -1,187,244 -778,576}

^{Total Equity: -507,244 -98,576}

^{Trade Creditors: 395,601 164,898}

^{Other Short term Liab.: 854,067 595,410}

^{Prepay. & Def. charges: 10,512 21,328}

^{Total short term Liab.: 1,260,180 781,636}

^{TOTAL LIABILITIES: 1,260,180 781,636}

^{--- PROFIT & LOSS ACCOUNT}

^{Net Sales 2,233,905 1,427,489}

^{Cost of Goods Sold: 1,839,483 1,250,407}

^{Gross Profit: 394,422 177,082}

^{Result of ordinary operation -333,672 -370,842}

^{NET RESULT BEFORE TAX: -408,668 -466,035}

^{Tax: - -}

^{Net income/loss year: -408,668 -466,035}

^{Interest Paid: 48,356 75,655}

^{Depreciation: 4,783 4,355}

^{Wages and Salaries: 150,909 148,224}

^{Financial Income: 174 43}

RATIOS

^{31/12/2004 31/12/2003}

^{Turnover per employee: 319,129.29 203,927.00}

^{Net result / Turnover(%): -0.18 -0.33}

^{Fin. Charges / Turnover(%): 0.02 0.05}

^{Stock / Turnover(%): 0.05 0.13}

^{Net Margin(%): -18.29 -32.65}

^{Return on Equity(%): 80.57 472.77}

^{Return on Assets(%): -54.28 -68.23}

^{Net Working capital: -526,059 -115,360}

^{Cash Ratio: 0.09 0.43}

^{Quick Ratio: 0.45 0.55}

^{Current ratio: 0.58 0.85}

^{Receivables Turnover: 74.68 24.54}

^{Leverage Ratio: -2.48 -7.93}

^{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}

^{Inventory Turnover : (360*Inventories)/Net sales}

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

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

FINANCIAL COMMENTS

^{AUDITORS' REPORT:}

^{WITHOUT QUALIFYING OUR OPINION, WE DRAW YOUR ATTENTION TO THE NOTES IN THE FINANCIAL STATEMENTS. AS SHOWN IN THE ACCOMPANYING FINANCIAL STATEMENTS, THE COMPANY INCURRED A LOSS OF S$408,668 DURING THE FINANCIAL YEAR ENDED 31/12/2004 AND AS AT THAT DATE, THE COMPANY'S TOTAL LIABILLTIES EXCEEDED TOTAL ASSETS BY S$507,244. THE ACCOMPANYING FINANCIAL STATEMENTS HAVE BEEN PREPARED ON A GOING-CONCERN BASIS WHICH ASSUMES THAT CONTINUED FINANCIAL SUPPORT WILL BE GIVEN BY THE HOLDING COMPANY TO MEET THE COMPANY'S LIABILITIES AS AND WHEN THEY FALL DUE.}

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

^{NET WORTH:}

^{THE BALANCE SHEET WAS CONSIDERED INADEQUATE WITH A NEGATIVE NET WORTH WIDENING FROM S$98,576 IN FY 2003 TO S$507,244 IN FY 2004. THIS WAS DUE TO AN INCREASE IN ACCUMULATED LOSSES AMOUNT FROM S$778,576 IN FY 2003 TO S$1,187,244 IN FY 2004.}

^LEVERAGE:

^{IN THE SHORT-TERM, 67.77% (2003: 76.17%) OF TOTAL SHORT-TERM LIABILITIES CAME FROM OTHER SHORT-TERM LIABILITIES (2004: S$854,067, 2003: S$595,410). OTHER SHORT-TERM LIABILITIES SHOWED AN INCREASE BY 43.44%.}

^{THE LATTER COMPRISED OF:}

^{* OTHER PAYABLES}

^{(2004: S$24,510, 2003: -)}

^{* AMOUNT OWING TO HOLDING COMPANY - NON-TRADE}

^{(2004: S$20,248, 2003: -)}

^{* AMOUNT OWING TO A RELATED COMPANY - NON-TRADE}

^{(2004: S$809,309, 2003: S$595,410)}

^{THE TRADE CREDITORS ACCOUNT EXPERIENCED A 1.40 TIMES INCREASE IN FY 2004 (2004: S$395,601, 2003: S$164,898) AND ITS BREAKDOWN WERE AS FOLLOWS:}

^{* TRADE PAYABLES}

^{(2004: S$126,826, 2003: S$144,875)}

^{* AMOUNT OWING TO HOLDING COMPANY - TRADE}

^{(2004: S$188,200, 2003: -)}

^{* AMOUNT OWING TO A RELATED COMPANY - TRADE}

^{(2004: S$80,575, 2003: S$20,023)}

^{SUBJECT DID NOT HAVE ANY LONG-TERM LIABILITIES TO FINANCE IN THE FY 2004 AND FY 2003.}

^{IN ALL, LEVERAGE RATIO IMPROVED FROM TIMES -7.93 IN FY 2003 TO -2.48 TIMES IN FY 2004. DESPITE THE IMPROVEMENT, THESE RATIOS WERE STILL CONSIDERED UNFAVOURABLE.}

^LIQUIDITY:

^{IN GENERAL, SUBJECT'S LIQUIDITY WAS LACKING AND HAD WORSENED AS SEEN FROM THE NEGATIVE NET WORKING CAPITAL OF S$526,059 IN FY 2004 (2003: S$-115,360). AS SUCH, THE COMPANY MIGHT FACE DIFFICULTIES IN MEETING ITS SHORT-TERM LIABILITIES WHEN THEY FALL DUE.}

^{CONSEQUENTLY, CURRENT RATIO FELL FROM 0.85 TIMES IN FY 2003 TO 0.58 TIMES IN FY 2004. SIMILARLY, QUICK RATIO FELL TO 0.45 TIMES IN FY 2004 FROM 0.55 TIMES IN FY 2003.}

^{THERE WAS A SIGNIFICANT DROP IN CASH, BANKS AND SECURITIES BY 67.64% IN FY 2004 (2004: S$108,237, 2003: S$334,445). THIS MIGHT BE DUE TO REPAYMENTS OF LIABILITIES MADE DURING THE FINANCIAL YEAR UNDER REVIEW.}

^{THE BREAKDOWN OF CASH, BANKS AND SECURITIES WERE AS FOLLOWS:}

^{* CASH AT BANK AND IN HAND}

^{(2004: S$108,237, 2003: S$318,363)}

^{* DEPOSITS WITH FINANCIAL INSTITUTIONS}

^{(2004: -, 2003: S$16,082)}

^{PROFITABILITY:}

^{REVENUE ROSE BY 56.49% IN FY 2004 AND AMOUNTED TO S$2,233,905 (2003: S$1,427,489). HOWEVER, NET LOSSES NARROWED TO S$408,668 IN FY 2004 (2003: S$-466,035). THIS MIGHT BE DUE LOWER DISTRIBUTION COSTS INCURRED IN FY 2004 THAN IN FY 2003 (2004: S$431,896, 2003: S$503,355).}

^{GROSS MARGIN ROSE TO 17.66% (2003: 12.41%) IN FY 2004 AND NET MARGIN STOOD AT}

^{-18.29% (2003: -32.65%) IN FY 2004.}

^{DEBT SERVICING:}

^{DEBT SERVICING PROBLEMS MIGHT BE EXPECTED IF REVENUE AND EARNINGS DO NOT IMPROVE AND PAYMENT BY TRADE DEBTORS ARE NOT FORTHCOMING. IN ADDITION, INTEREST COVERAGE RATIO WORSENED TO -7.45 TIMES IN FY 2004 FROM -5.16 TIMES IN FY 2003.}

^{NOTES TO THE FINANCIAL STATEMENTS:}

^{GOING-CONCERN:}

^{THE FINANCIAL STATEMENTS OF THE COMPANY HAS BEEN PREPARED ON A GOING-CONCERN BASIS WHICH ASSUMES THE CONTINUED SUPPORT FINANCIAL SUPPORT OF THE HOLDING COMPANY.}

^{AMOUNT OWING TO A RELATED COMPANY:}

^{THE AMOUNT OWING IS UNSECURED AND HAS NO FIXED TERMS OF REPAYMENT. INCLUDED IN THE AMOUNT OWING (NON-TRADE) IS AN AMOUNT OF S$750,194 (2003: S$575,276) WHICH BEARS EFFECTIVE INTEREST RATES OF 7.75% (2003: 10.58%) PER ANNUM FOR THE YEAR ENDED 31/12/2004.}

BACKGROUND/OPERATION

^{THE COMPANY WAS INCORPORATED IN THE REPUBLIC OF SINGAPORE ON 01/08/2001 AS A LIMITED PRIVATE COMPANY AND IS TRADING UNDER ITS PRESENT NAMESTYLE OF "E-SMART TECHNOLOGY PTE LTD".}

^{AS AT 30/05/2006, THE COMPANY HAS ISSUED AND PAID-UP CAPITAL OF 680,000 SHARES OF A VALUE OF S$680,000.}

^{PRINCIPAL ACTIVITIES:}

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

^{1) WHOLESALE OF ELECTRONIC COMPONENTS}

^{2) WHOLESALE OF HOUSEHOLD ELECTRICAL APPLIANCES AND EQUIPMENT}

^{FROM THE FINANCIAL YEAR UNDER REVIEW, THE PRINCIPAL ACTIVITIES OF THE COMPANY WERE THAT OF DESIGN AND SUPPLY OF INTERMEDIATE ELECTRONIC PRODUCTS AND DISTRIBUTION OF ELECTRONIC COMPONENTS.}

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

^{SUBJECT ENGAGES IN THE FOLLOWING ACTIVITIES:}

^{* IMPORTER AND DISTRIBUTOR OF ELECTRONICS AND INTERMEDIATE}

^{COMPONENTS IN INDIA}

^{* PRODUCTS DISTRIBUTOR OF DIGITAL SOLUTIONS - VIDEO SURVEILLANCE, RF}

^{MODULES, GRPS MODULES, DATA COMMUNICATION AND VIDEO CONFERENCING IN}

^INDIA

^{* DESIGNING AND SUPPLYING INTERMEDIATE PRODUCTS FOR THE FOLLOWING}

^{SEGMENTS OF THE ELECTRONICS INDUSTRY}

^{* DESIGN AND SUPPLY SOLUTIONS RANGING FROM DESIGNING THE ENTIRE}

^{SUBSYSTEMS OF ELECTRONIC PRODUCTS - HARDWARE DESIGN, FIRMWARE}

^{DEVELOPMENT, AND PCB LAYOUT DESIGN - TO SUPPLYING THE MAIN ACTIVE}

^{DEVICES, CHIPSETS AND OTHER ELECTRONIC COMPONENTS}

^{* DEVELOPED SUBSYSTEMS FOR TELEVISIONS, DVD PLAYERS, GPS / GSM}

^{LOCATION TRACKING, VIDEO STREAMING, VIDEO SURVEILLANCE AND}

^{VIDEO-ON-DEMAND END-PRODUCTS}

^{* MAIN BUSINESS IS IN DESIGN & SUPPLY, AND COMPONENT DISTRIBUTION}

^{SOME OF SUBJECT'S PRODUCT DEALINGS/SERVICES:}

^{* ELECTRONIC COMPONENTS}

^{* APPLICATIONS DESIGN SERVICES}

^{- OEM AUTOMOTIVE RAIN SENSOR}

^{- AUTOMOTIVE SAFETY WIRELESS BRAKE LIGHTING FOR MOTORCYCLE}

^{- TIRE PRESSURE MONITORING SYSTEM (TPMS)}

^{TRADE NAMES:}

^{* ES}

^{* EDEVICE}

^{* DYNAPEL}

^{* LEADTEK}

^{* SIRF}

^{* ERNI}

^{* CYAN}

^{* ZILOG}

^{* NAVMAN}

^{* EQUATOR}

^{* CHIPCON}

^{* OKI}

^{* SKYWORKS}

^{* MULTI-TECH}

^{SUBJECT HAS DESIGN EXPERIENCE IN THE FOLLOWING CATEGORIES:}

^{* DIGITAL VIDEO SERVICES AND SYSTEMS}

^{- VOD SET TOP BOXES}

^{- DIGITAL VIDEO SURVEILLANCE EMBEDDED IP-BASED DEVICES}

^{[IP VIDEO SERVERS] AND OTHER VIDEO SECURITY DEVICES}

^{- DIGITAL VIDEO SURVEILLANCE SYSTEMS [NET2SEE] APPLICATIONS}

^{- DIGITAL VIDEO SURVEILLANCE THREATS ANALYSIS SYSTEM}

^{- DIGITAL VIDEO UNMANNED VIDEO GUARD SYSTEM}

^{* WIRELESS APPLICATIONS}

^{- GSM DATA MODEM & GPS MODULE FOR VEHICLE AND OUTDOOR MOBILE ACCESS TRACKING}

^{- RF MODULE - FROM SPECIALISED RFID DEVICES TO RF MODULE FOR DATA TELEMETRY USE}

^{* MULTIMEDIA INFOTAINMENT}

^{- INTERACTIVE IPTV SET TOP BOXES AND DEVICES}

^{- OTHER DIGITAL CONSUMER VIDEO COMMUNICATION DEVICES}

^{* AUTOMOTIVE ELECTRONICS}

^{- AUTOMOTIVE RAIN SENSOR}

^{- AUTOMOTIVE SAFETY WIRELESS BRAKE LIGHTING FOR MOTORCYCLE}

^{- TIRE PRESSURE MONITORING SYSTEM (TPMS)}

^{- AUTOMOTIVE GEAR INDICATION SYSTEM AND OTHERS}

^{IMPORT COUNTRIES:}

^{* US}

^{* EUROPE}

^{* CHINA}

^{* JAPAN}

^{* KOREA}

^{* TAIWAN}

^{MARKET PRESENCE:}

^{* MALAYSIA}

^{* HONGKONG}

^{* THAILAND}

^{* SINGAPORE}

^{* INDIA}

^{* CHINA}

^{* SOUTH ASIA}

^{* OTHER ASEAN COUNTRIES}

^{INDUSTRIES SERVED:}

^{* ELECTRONICS INDUSTRY}

^{- MULTIMEDIA INFOTAINMENT}

^{- DATA COMMUNICATIONS}

^{- WIRELESS ( GPS / GSM ) APPLICATIONS}

^{- DIGITAL VIDEO SERVICES AND SYSTEMS}

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

^{* SINGAPORE BUSINESS FEDERATION}

^{FROM THE TELE-INTERVIEW CONDUCTED ON 05/06/2006, THE FOLLOWING INFORMATION WAS OBTAINED:}

^{SUBJECT ENGAGES IN THE FOLLOWING ACTIVITIES:}

^{* DISTRIBUTOR OF ELECTRONIC COMPONENTS, APPLICATION DESIGN SERVICES}

^{IMPORT/EXPORT COUNTRIES:}

^{* HONGKONG}

^{* INDIA}

^{INDUSTRIES SERVED:}

^{* ELECTRONICS INDUSTRY}

^{TERMS OF PAYMENT:}

^{* CUSTOMERS: CASH ON DELIVERY, TELE-GRAPHIC TRANSFER (TT), LETTER OF}

^{CREDIT (LC), 30/60 DAYS TERM, CHEQUE}

^{* SUPPLIERS: CASH ON DELIVERY, TELE-GRAPHIC TRANSFER (TT), LETTER OF}

^{CREDIT (LC), 30/60 DAYS TERM, CHEQUE}

^{NO OTHER TRADE INFORMATION WAS REVEALED BY THE SUBJECT'S PERSONNEL.}

^{THE IMMEDIATE AND ULTIMATE HOLDING COMPANY IS ESMART HOLDINGS LIMITED, A COMPANY INCORPORATED IN SINGAPORE.}

^{NUMBER OF EMPLOYEES (31 DECEMBER):}

^{* COMPANY - 2004: 7 (2003: 7)}

^{REGISTERED ADDRESS:}

^{17 KALLANG JUNCTION}

^#04-01

^{ESMART CENTRE}

^{SINGAPORE 339274}

^{DATE OF CHANGE OF ADDRESS: 23/07/2003}

^{BUSINESS ADDRESS:}

^{17 KALLANG JUNCTION}

^#04-01/03/04

^{ESMART CENTRE}

^{SINGAPORE 339274}

^{-SALES OFFICE}

^WEBSITE:

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

^{http://www.e-smart.com.sg}

^EMAIL:

^{sales@e-smart.com.sg}

^{info@esmarthholdings.com}

MANAGEMENT

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

^{1) LEE KEOW CHIN, A SINGAPOREAN}

^{- HOLDS OTHER DIRECTORSHIPS IN:}

^{E-SMART DISTRIBUTION PTE LTD}

^{ESMART HOLDINGS LIMITED}

^{2) KINGSLEY NEO HOCK BENG, A SINGAPOREAN}

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

^{3) LUA EK CHAN, A SINGAPORE PERMANENT RESIDENT}

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

SINGAPORE COUNTRY RATING 2006

INVESTMENT GRADE

IN SINGAPORE, THE POLITICAL SITUATION APPEARS TO BE VERY STABLE.

ECONOMIC GROWTH IS BECOMING MORE MODERATE AS INVESTMENT HAS BEEN FLAT DUE TO INCREASING OIL PRICES AND LESS BUOYANT DEMAND FOR ELECTRONIC PRODUCTS.

ECONOMIC PERFORMANCE HAS REMAINED STRONG, UNDERPINNED BY PHARMACEUTICALS AND SERVICES. EXPORTS HAS BENEFITED FROM THE STEADINESS OF DEMAND FROM ITS MAIN TRADING PARTNERS, MALAYSIA, THE UNITED STATES, CHINA AND HONG KONG. OTHER THAN ITS BALANCED PUBLIC SECTOR ACCOUNTS, LIMITED FOREIGN DEBT AND COMFORTABLE FOREIGN CURRENCY RESERVES HAVE CONTRIBUTED TO SINGAPORE'S STRONG FINANCIAL CONDITION.

AS THE ELECTRONICS SECTOR FACES COMPETITION FROM THE ASIAN ECONOMIES, SINGAPORE HAS BEEN PURSUING DIVERSIFICATION STRATEGY THAT HAS BEEN CONSOLIDATING ITS POSITION. PHARMACEUTICALS ALREADY REPRESENT 10% OF EXPORTS IN COMPARATIVE TO

ITS INSIGNIFICANT CONTRIBUTION IN YEAR 1995. ELECTRONICS SECTOR SECTOR'S SHARE HAS DECLINED FROM 80% TO 60% DURING THE SAME PERIOD. THERE IS HIGH RELIANCE ON DEVELOPMENT OF PETROCHEMICAL PRODUCTS, HIGH VALUE-ADDED SERVICES AND BIOTECHNOLOGIES.

ASSETS

· ONE OF THE MOST OPEN ECONOMIES IN THE WORLD WITH EXPORTS PLAYING A MAJOR ROLE IN ITS PERFORMANCE.

· ONE OF ASIA'S MOST ADVANCED COUNTRIES IN QUALITY COMPETITIVENESS TERMS.

· WORKFORCE'S EDUCATION AND SKILL LEVEL IS VERY HIGH.

· A MAJOR EXPORT OF CAPITAL IN ASIA, PARTICULARLY THE STATE-OWNED HOLDING COMPANY, TEMASEK.

· THE BUSINESS ENVIRONMENT HAS BEEN VERY FAVOURABLE.

· GREAT POLITICAL STABILITY.

WEAKNESSES

· ECONOMY REMAINED OVERSPECIALISED IN THE ELECTRONICS SECTOR.

· MUST ACCELERATE DIVERSIFICATION IN SERVICES TO MAINTAIN ITS LEAD OVER OTHER ASIAN ECONOMIES

· REFORMS ARE STILL NEEDED TO FOSTER INNOVATION AND EDUCATION-SYSTEM MODERNIZATION.

· AGING POPULATION COULD ULTIMATELY AFFECT ECONOMIC PERFORMANCE.

WHOLESALE AND RETAIL TRADE SECTOR

PAST PERFORMANCE

WITH THE BOOST FROM THE STRONG GROWTH PERFORMANCE OF NON-OIL RE-EXPORTS AND RETAIL SALES, THE WHOLESALE AND RETAIL TRADE SECTOR GREW BY A HEALTHY 8.0% IN 3Q2005, EASING SLIGHTLY FROM THE 8.7% GROWTH REGISTERED IN 2Q2005.

WHOLESALE TRADE

DOMESTIC WHOLESALE TRADE INDEX

THE OVERALL DOMESTIC WHOLESALE TRADE INDEX ROSE BY 20.5% OVER THE SAME PERIOD A YEAR AGO. EXCLUDING PETROLEUM, THE INDEX ROSE BY 8.9%.

AT CONSTANT PRICES, THE OVERALL INDEX ROSE SLIGHTLY BY 1.9% IN 3Q2005 OVER 3Q2004. EXCLUDING PETROLEUM, IT WAS 3.6% HIGHER THAN A YEAR AGO.

ON A QUARTER-ON-QUARTER BASIS, THE OVERALL INDEX POSTED A RISE OF 10.7% IN 3Q2005.

EXCLUDING PETROLEUM, THE INDEX ROSE MODERATELY BY 4.1%.

FOREIGN WHOLESALE TRADE INDEX

AS COMPARED TO 3Q2004, THE OVERALL FOREIGN WHOLESALE TRADE FOR 3Q2005 ROSE BY 22%. EXCLUDING PETROLUEM, THE INDEX ROSE BY 10.2%.

AT CONSTANT PRICES, THE OVERALL INDEX ROSE BY 7.6% IN 3Q2005 OVER 3Q2004. EXCLUDING PETROLEUM, IT WAS UP BY 10.8%.

IN COMPARISON TO 2Q2005, THE OVERALL INDEX FOR 3Q2005 REGISTERED A RISE OF 9.9%.

EXCLUDING PETROLEUM, THE GROWTH WAS LOWER AT 5.7%.

AHEAD

AN OVERALL NET BALANCE OF 22% OF FIRMS IN THE SERVICES SECTOR IS OPTIMISTIC ABOUT THE BUSINESS OUTLOOK FOR THE NEXT 3 MOTNHS ENDING MARCH 2006. THE MAGNITUDE IS SLIGHTLY LOWER COMPARED TO THAT REGISTERED IN THE PERIOD OF JULY-DECEMBER 2005 (26%), AND ALSO LOWER THAN THE 30% NET BALANCE RECORDED FOR OCTOBER 2004 – MARCH 2005.

AN OVERALL NET BALANCE OF 8% OF WHOLESALERS PREDICTS POSITIVE BUSINESS CONDITIONS FOR THE COMING MONTHS.

RETAILERS ALSO EXPRESS UPBEAT BUSINESS SENTIMENTS FOR THE COMING MONTHS, WITH A POSITIVE NET BALANCE OF 38%, ESPECIALLY DEPARTMENT STORES AND RETAILERS OF WEARING APPAREL AND FURNITURE & FURNISHINGS FORESEE BETTER BUSINESS OUTLOOK FROM THE YEAR-END FESTIVE SEASON.

EXTRACTED FROM : MINISTRY OF TRADE AND INDUSTRY, SINGAPORE

SINGAPORE DEPARTMENT OF STATISTICS

BLOOMBERG

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/normal.	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

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