MIRA INFORM REPORT

Report Date :

30^th May 2006

IDENTIFICATION DETAILS

Name :	INNOVATION PHARMACEUTICALS INDUSTRY INTERNATIONAL PRIVATE LTD
Registered Office :	^204 Pandan Loop, Singapore ^128394, Singapore
Country :	^Singapore
Financials (as on) :	31/12/2004
Date of Incorporation :	^06/12/1982
Com. Reg. No.:	^198205070R
Legal Form :	^Pte Ltd
Line of Business :	Manufacture of empty gelatin capsules

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

INNOVATION PHARMACEUTICALS INDUSTRY INTERNATIONAL PRIVATE LTD

Line Of Business 

MANUFACTURE OF EMPTY GELATIN CAPSULES.

Parent Company

-

Financial Elements

FY 2004

COMPANY

Sales : S$1,847,521

Networth : S$3,714,288

Paid-Up Capital : S$5,100,000

Net result : S$-391,263

Net Margin(%) : -21.18

Return on Equity(%) : -10.53

Leverage Ratio : 0.39

Rating

Credit Requested : -

Credit Rating : Singapore $ 1000001 to Singapore $ 5000000

Credit Opinion : -

BUSINESS INFORMATION REPORT

COMPANY IDENTIFICATION

^{Subject Company: INNOVATION PHARMACEUTICALS INDUSTRY INTERNATIONAL PRIVATE LTD}

^{Former Name: -}

^{Business Address: 204 PANDAN LOOP}

^{Town: SINGAPORE}

^{Postcode: 128394}

^{County: -}

^{Country: Singapore}

^{Telephone: 6778 5415/6779 4664}

^{Fax: 6777 7400}

^{ROC Number: 198205070R}

^{Reg. Town: -}

SUMMARY

^{Legal Form: Pte Ltd}

^{Date Inc.: 06/12/1982}

^{Previous Legal Form:-}

^{Summary year: 31/12/2004}

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

^{Sales: 1,847,521}

^{Networth: 3,714,288}

^{Capital: 10,000,000}

^{Paid-Up Capital: 5,100,000}

^{Employees: 28}

^{Net result: -391,263}

^{Share value: 1}

^{Auditor: LO HOCK LING & CO}

REFERENCES

^{Report Date: 30/05/2006}

^{Update Date: 30/05/2006}

^{Credit Requested: -}

^{Credit Opinion: -}

^{Litigation: No}

^{Company status: TRADING}

^{Started: 06/12/1982}

PRINCIPAL(S)

^{LEE KAM CHI B2716838 Managing Director}

DIRECTOR(S)

^{KOK SANG KONG MARGARET S0210935B Company Secretary}

^{Appointed on: 10/01/1983}

^{Street: 295 BEDOK SOUTH AVENUE 3}

^#13-08

^{Town: SINGAPORE}

^{Postcode: 469296}

^{Country: Singapore}

^{CHANG TSE LIANG 957664 Director}

^{Appointed on: 06/12/1982}

^{Street: 8 WISTANG ROAD}

^{WAU YAT CHUEN}

^KOWLOON

^{Town: KOWLOON}

^{Postcode: -}

^{Country: Hong Kong}

^{LEE KAM CHI B2716838 Managing Director}

^{Appointed on: 20/11/1984}

^{Street: 991 BUKIT TIMAH ROAD}

^#10-08

^{Town: SINGAPORE}

^{Postcode: 589630}

^{Country: Singapore}

^{LEE PING LOK AMY S2223030A Director}

^{Appointed on: 05/12/1997}

^{Street: 991 BUKIT TIMAH ROAD}

^#10-08

^{Town: SINGAPORE}

^{Postcode: 589630}

^{Country: Singapore}

^{LEE KAM CHI B2716838 Director}

^{Appointed on: 20/11/1984}

^{Street: 991 BUKIT TIMAH ROAD}

^#10-08

^{Town: SINGAPORE}

^{Postcode: 589630}

^{Country: Singapore}

FORMER DIRECTOR(S)

^{TANG PENG YEU S2147722B}

^{WANG CHUAN PIK S2164368H}

ACTIVITY(IES)

^{PHARMACEUTICAL PRODUCTS - WHSLE And MFRS Code: 16400}

^{BASED ON ACRA'S RECORD AS AT 24/05/2006}

^{1) MANUFACTURING INDUSTRIES}

CHARGES

^{Date: 27/02/1984}

^{Amount: 2,000,000}

^{Comments: CHARGE NO: 8400951}

^{SECURED: 2,000,000.00}

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

^{Date: 27/02/1984}

^{Amount: 2,000,000}

^{Comments: CHARGE NO: 8400952}

^{SECURED: 2,000,000.00}

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

^{Date: 23/09/1988}

^{Amount: 2,000,000}

^{Comments: CHARGE NO: 8802974}

^{SECURED: 2,000,000.00}

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

PREMISES/PROPERTY INFORMATIONS

^{Date: 30/05/2006}

^{Site Address: 204 PANDAN LOOP}

^{Tax rate: 10}

^{Town: SINGAPORE}

^{County: -}

^{Postcode: 128394}

^{Country: Singapore}

^{Annual Value: 192,000}

*TAX RATE OF 4% MEANS THE ADDRESS (I.E RESIDENTIAL PROPERTY) IS OWNER OCCUPIED.

*TAX RATE OF 10% MEANS THE ADDRESS (I.E RESIDENTIAL PROPERTY) IS PARTIALLY OR FULLY

RENTED OUT BY THE OWNER/OWNED BY COMPANY.

*FOR PROPERTIES OTHER THAN RESIDENTIAL PROPERTIES REGARDLESS RENTED OUT OR NOT, THE

TAX RATE IS 10% (IE INDUSTRIAL AND COMMERCIAL PROPERTY).

*ANNUAL VALUE IS THE ESTIMATED ANNUAL RENT THE PROPERTY CAN FETCH IF IT WERE

RENTED OUT. THE ANNUAL VALUE IS DETERMINED IN THE SAME MANNER REGARDLESS OF

WHETHER THE PROPERTY IS LET-OUT, OWNER-OCCUPIED OR VACANT.

BANKERS

^{THE HONGKONG & SHANGHAI BANKING CORPORATION LTD}

SHAREHOLDERS(S)

^{LEE KAM CHI 300,000 Private Person}

^{Street: 991 BUKIT TIMAH ROAD}

^#10-08

^{Town: SINGAPORE}

^{Postcode: 589630}

^{Country: Singapore}

^{CHEUNG PING YUNG MARY 250,000 Private Person}

^{Street: -}

^{Town: -}

^{Postcode: -}

^{Country: -}

^{WAUNG YEN YUN CATHERINE 360,000 Private Person}

^{Street: -}

^{Town: -}

^{Postcode: -}

^{Country: -}

^{WIDODO SARWONO 1,000,000 Private Person}

^{Street: 3 HAJI MISBACH}

^SURABAYA

^{Town: INDONESIA}

^{Postcode: -}

^{Country: Indonesia}

^{LEE PING LOK AMY 700,000 Private Person}

^{Street: 991 BUKIT TIMAH ROAD}

^#10-08

^{Town: SINGAPORE}

^{Postcode: 589630}

^{Country: Singapore}

^{GREENERY HOLDING INC 1,740,000 Company}

^{Street: C/O PANDAN LOOP}

^{Town: -}

^{Postcode: -}

^{Country: Virgin Islands (British)}

^{PING KIT LEE EUNICE 250,000 Private Person}

^{Street: -}

^{Town: -}

^{Postcode: -}

^{Country: -}

^{PING YUEN CHOW BETTY 250,000 Private Person}

^{Street: -}

^{Town: -}

^{Postcode: -}

^{Country: -}

^{CHRISTINA Y TSUEI 250,000 Private Person}

^{Street: 716 UPPER CHANGI ROAD EAST}

^#02-07

^{Town: SINGAPORE}

^{Postcode: 486847}

^{Country: Singapore}

FORMER SHAREHOLDER (S)

^{WANG CHUAN PIK 50,000}

^{ZHANG MING 1,000,000}

^{CHANG TSE LIANG 1,050,000}

^{PING YU YIM MARIA 250,000}

SUBSIDIARY(IES)

No Participation In Our Database

PAYMENT HISTORY AND EXPERIENCES

^{Trade Morality: AVERAGE}

^{Liquidity: SUFFICIENT}

^{Payments: REGULAR}

^{Trend: DOWNWARD}

^{Financial Situation: AVERAGE}

LITIGATION(S)

No Litigation In Our Database

FINANCIAL ELEMENTS

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

^{Audit Qualification: "MILD" UNCERTAINTIES "MILD" UNCERTAINTIES}

^{Date Account Lodged: 15/07/2005}

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

^{Number of weeks: 52 52}

^{Consolidation Code: COMPANY COMPANY}

^{--- ASSETS}

^{Tangible Fixed Assets: 1,477,606 1,517,855}

^{Total Fixed Assets: 1,477,606 1,517,855}

^{Inventories: 3,242,728 3,992,292}

^{Receivables: 365,043 208,173}

^{Cash, Banks, Securities: 23,034 39,331}

^{Other current assets: 46,595 46,675}

^{Total Current Assets: 3,677,400 4,286,471}

^{TOTAL ASSETS: 5,155,006 5,804,326}

^{--- LIABILITIES}

^{Equity capital: 5,100,000 5,100,000}

^{Profit & loss Account: -1,385,712 -994,449}

^{Total Equity: 3,714,288 4,105,551}

^{Long Term Loans: 240,000 360,000}

^{L/T deferred taxes: 75,000 75,000}

^{Total L/T Liabilities: 315,000 435,000}

^{Trade Creditors: 84,425 33,178}

^{Advanced payments: 6,633 6,633}

^{Due to Bank: 266,980 297,464}

^{Prepay. & Def. charges: 74,232 46,962}

^{Other Short term Liab.: 693,448 879,538}

^{Total short term Liab.: 1,125,718 1,263,775}

^{TOTAL LIABILITIES: 1,440,718 1,698,775}

^{--- PROFIT & LOSS ACCOUNT}

^{Net Sales 1,847,521 951,481}

^{Result of ordinary operations -359,435 -145,836}

^{NET RESULT BEFORE TAX: -391,263 -173,423}

^{Tax: - -}

^{Net income/loss year: -391,263 -173,423}

^{Interest Paid: 31,828 27,587}

^{Depreciation: 40,249 44,119}

^{Directors Emoluments: 130,956 123,408}

^{Wages and Salaries: 553,482 466,688}

RATIOS

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

^{Turnover per employee: 65,982.89 33,981.46}

^{Net result / Turnover(%): -0.21 -0.18}

^{Fin. Charges / Turnover(%): 0.02 0.03}

^{Stock / Turnover(%): 1.76 4.20}

^{Net Margin(%): -21.18 -18.23}

^{Return on Equity(%): -10.53 -4.22}

^{Return on Assets(%): -7.59 -2.99}

^{Net Working capital: 2,551,682.00 3,022,696.00}

^{Cash Ratio: 0.02 0.03}

^{Quick Ratio: 0.34 0.20}

^{Current ratio: 3.27 3.39}

^{Receivables Turnover: 71.13 78.76}

^{Leverage Ratio: 0.39 0.41}

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:

THE COMPANY’S YEAR-END STOCK INCLUDED CERTAIN STOCK ITEMS WHICH WERE BOUGHT FORWARD FROM PRIOR YEARS AND WHICH HAD NOT BEEN SOLD A THE DATE OF THIS REPORT. NO ALLOWANCE FOR STOCK OBSOLESCENCE HAS BEEN MADE IN THE ACCOUNTS AS EXPLAINED ON THE NOTES TO THE FINANCIAL STATEMENTS. ANY ADJUSTMENTS WHICH MAY ARISE DUE TO THE UNCERTAINITY IN THE REALISABLE VALUE OF THE STOCKS HAVE NOT BEEN INCLUDED IN THE FINANCIAL STATEMENTS.

THE FINANCIAL CONDITION OF THE COMPANY WAS FAIR TO LIMITED IN VIEW OF THE FOLLOWING:

NET WORTH:

THE BALANCE SHEET WAS DEEMED PASSABLE ALTHOUGH NET WORTH FELL BY 9.53% TO S$3,714,288 (2003: S$4,105,551). THIS WAS DUE TO HIGHER ACCUMULATED LOSS OF TO S$1,385,712 (2003: S$-994,449).

LEVERAGE:

IN THE SHORT-TERM, SUBJECT WAS LARGELY FINANCED BY OTHER SHORT-TERM LIABILITIES OF S$693,448 (2003: S$879,538) AND ACCOUNTED FOR 61.60% (2003: 69.60%) OF THE TOTAL CURRENT LIABILITIES. THE BREAKDOWN IS AS FOLLOWS:

-NON-TRADE CREDITORS – 2004: S$18,750 (2003: S$466)

-AMOUNT DUE TO A DIRECTOR (NON-TRADE) – 2004: S$674,698 (2003: S$879,072)

AMOUNT DUE TO BANK OF S$266,980 (2003: S$297,464) COMPRISED:
-BANK OVERDRAFT – 2004: S$146,980 (2003: S$177,464)

-TERM LOAN – 2004: S$120,000 (2003: S$120,000)

IN THE LONG-TERM, TERM LOAN AMOUNTED TO S$240,000 (2003: S$360,000).

LEVERAGE RATIO FELL TO 0.39 TIMES IN FY 2004 (2003: 0.41 TIMES) AS A RESULT OF A GREATER FALL IN TOTAL LIABILITIES THAN TOTAL EQUITY.

LIQUIDITY:

IN GENERAL, LIQUIDITY STATUS OF THE COMPANY HAD WEAKENED WITH NET WORKING CAPITAL OF S$2,551,682 (2003: S$3,022,696), A FALL OF 15.58% FROM THE PRIOR FINANCIAL YEAR.

ALSO, CURRENT RATIO DECLINED TO 3.27 TIMES, DOWN FROM 3.39 TIMES WHILE QUICK RATIO ROSE TO 0.34 TIMES (2003: 0.20 TIMES).

LIKEWISE, CASH AND CASH EQUIVALENTS DROPPED SHARPLY BY 41.44% TO S$23,034 (2003: S$39,331).

PROFITABILITY:

REVENUE INCREASED MARKEDLY BY 94.17% TO S$1,847,521 (2003: S$951,481) BUT NET PROFIT WORSENED TO S$391,263 (2003: S$-173,423). THIS COULD BE DUE TO LOWER OTHER OPERATING INCOME BY 99.43% (2004: S$97; 2003: S$17,087) AS WELL AS A HUGE CHANGE IN STOCK OF FINISHED GOODS (2004: S$-789,041; 2003: S$100,022). HENCE, NET MARGIN WORSENED TO -21.18% (2003: -18.23%).

DEBT SERVICING:

DEBT SERVICING PROBLEMS MIGHT BE ANTICIPATED IF PAYMENTS FROM TRADE RECEIVABLES WERE NOT FORTHCOMING AND PROFITABILITY DOES NOT IMPROVE. ALSO, INTEREST COVERAGE RATIO WAS UNFAVOURABLE AT -11.29 TIMES (2003: -5.29 TIMES).

NOTES TO THE FINANCIAL STATEMENTS:

AMOUNT OWING TO A BANK:

THE BANK OVERDRAFT AND TERM LOAN ARE SECURED BY A DEBENTURE FOR S$2,000,000 (2003: S$2,000,000) OVER THE COMPANY’S FIXED AND FLOATING ASSETS PLUS A COLLATERAL MORTGAGE OVER THE COMPANY’S LEASEHOLD PROPERTY WHICH HAS A NET BOOK VALUE OF S$1,475,391 (2003: S$1,513,222).

THE TERM LOAN BEARS INTEREST AT 3.88% (20003: 3.16%) PER ANNUM AND IS REPAYABLE OVER 5 YEARS BY 60 MONTHLY INSTLAMENTS COMMENCING ON 28/01/2003.

THE BANK OVERDRAFT BEARS INTEREST AT THE PREVAILING BANK’S PRIME RATE.

BACKGROUND/OPERATION

THE COMPANY WAS INCORPORATED IN THE REPUBLIC OF SINGAPORE ON 06/12/1982 AS A LIMITED PRIVATE COMPANY AND IS TRADING UNDER ITS PRESENT NAMESTYLE AS "INNOVATION PHARMACEUTICALS INDUSTRY INTERNATIONAL PRIVATE LTD".

AS AT 24/05/2006, THE COMPANY HAS A ISSUED AND PAID-UP CAPITAL OF 5,100,000 SHARES OF A VALUE OF S$5,100,000.

PRINCIPAL ACTIVITIES:

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

1) MANUFACTURING INDUSTRIES

DURING THE FINANCIAL YEAR(S), UNDER REVIEW, SUBJECT'S PRINCIPAL ACTIVITIES CONSIST OF THE MANUFACTURE OF EMPTY GELATIN CAPSULES.

FROM THE RESEARCH DONE, SUBJECT IS A MANUFACTURER OF EMPTY HARD GELATIN CAPSULES FOR PHARMACEUTICAL USE.

FROM THE TELE-INTERVIEW CONDUCTED ON 30/05/2006, SUBJECT IS IN THE MANUFACTURING OF EMPTY GELATIN CAPSULES WHICH IS SUBJECT'S ONLY PRODUCT. SUBJECT DOES EXPORT. HOWEVER, NO OTHER TRADE INFORMATION WAS MADE AVAILABLE BY SUBJECT'S PERSONNEL.

NUMBER OF EMPLOYEES (31 DECEMBER):

*2004: 28 (2003: 30)

REGISTERED AND BUSINESS ADDRESS:

204 PANDAN LOOP

SINGAPORE 128394

DATE OF CHANGE OF ADDRESS: -

- OWNED PREMISE

WEBSITE:

NIL

EMAIL:

NOT AVAILABLE

MANAGEMENT

THE DIRECTORS AT THE TIME OF THIS REPORT ARE:

1) CHANG TSE LIANG, A HONG KONG RESIDENT

- BASED IN HONG KONG.

2) LEE KAM CHI, AN AMERICAN

- BASED IN SINGAPORE.

3) LEE PING LOK AMY, A SINGAPOREAN

- HOLDS NO OTHER DIRECTORSHIPS AS RECORDED IN OUR DATABASE.

Singapore’s 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.

MANUFACTURING SECTOR

THE MANUFACTURING SECTOR AT THE HEART OF SINGAPORE’S EXPORT-DEPENDENT ECONOMY EXPANDED 11.5 PERCENT IN THE FOURTH QUARTER OF 2005 FROM THE PREVIOUS YEAR 2005, BUOYED BY STRONG GROWTH IN THE BIOMEDICAL, TRANSPORT ENGINEERING AND ELECTRONICS CLUSTERS. “PHARMACEUTICALS AD ELECTRONICS WILL CONTINUE TO DRIVE GROWTH,” SAID LESLIE TANG, AN ECONOMIST AT UOB KAYHIAN.

MONTHLY MANUFACTURING PERFORMANCE - DECEMBER 2005

MANUFACTURING OUTPUT MAINTAINED ITS UPSWING IN DECEMBER 2005

(I) TOTAL MANUFACTURING PERFORMANCE

MANUFACTURING OUTPUT CONTINUED TO EXPAND IN DECEMBER 2005. YEAR-ON-YEAR OUTPUT ROSE 5.1%, SPURRED BY HIGH GROWTH IN THE TRANSPORT ENGINEERING AND ELECTRONICS CLUSTERS DESPITE CONTRACTION IN THE BIOMEDICAL MANUFACTURING CLUSTER. EXCLUDING THE BIOMEDICAL MANUFACTURING CLUSTER, MANUFACTURING OUTPUT GREW 15.0%. THE THREE-MONTH MOVING AVERAGE FOR TOTAL MANUFACTURING GREW BY 14.1% IN DECEMBER. WITH SEASONAL ADJUSTMENT, THE MONTH-ON-MONTH MANUFACTURING OUTPUT DIPPED 2.5%. TOTAL MANUFACTURING OUTPUT FOR 2005 INCREASED 9.2% COMPARED TO 2004.

OUTPUT OF THE BIOMEDICAL MANUFACTURING CLUSTER CONTRACTED 23.9% YEAR-ON-YEAR IN DECEMBER 2005. CONTRACTIONS OF 25.4% AND 8.7% RESPECTIVELY WERE SEEN IN THE PHARMACEUTICALS AND MEDICAL TECHNOLOGY SEGMENTS. A DIFFERENT PRODUCT MIX RESULTED IN LOWER OUTPUT OF ACTIVE PHARMACEUTICAL INGREDIENTS. WEAKER EXPORT DEMAND LED TO LOWER OUTPUT OF MEDICAL DEVICES. OVERALL, THE CLUSTER GREW 10.7% IN 2005 COMPARED TO 2004.

BUSINESS EXPECTATIONS FOR JANUARY - JUNE 2006

OPTIMISTIC BUSINESS SENTIMENTS IN THE MANUFACTURING SECTOR ARE EXPECTED TO CONTINUE INTO THE FIRST HALF OF 2006 FROM THE FOURTH QUARTER OF 2005. THIS IS INDICATED BY A WEIGHTED 20 PER CENT OF MANUFACTURERS WHO FORESEE AN IMPROVED OUTLOOK. ONLY A WEIGHTED 5 PER CENT PREDICT DETERIORATION. OVERALL, A NET WEIGHTED BALANCE OF 15 PER CENT OF MANUFACTURERS EXPECT AN IMPROVED BUSINESS SITUATION IN THE FIRST SIX MONTHS OF 2006, WHICH IS COMPARABLE TO THE 16 PER CENT RECORDED A QUARTER AGO. THE POSITIVE MOMENTUM IS LARGELY DUE TO A STABLE ECONOMIC OUTLOOK FOR THE FIRST HALF OF 2006.

IN THE BIOMEDICAL MANUFACTURING CLUSTER, A WEIGHTED 92 PER CENT OF MANUFACTURERS EXPECT THE GENERAL BUSINESS CONDITIONS IN THE SECTOR TO REMAIN THE SAME IN THE FIRST SIX MONTHS OF 2006, COMPARED TO A QUARTER AGO. IN THE PHARMACEUTICAL SEGMENT, OUTPUT AND EXPORT ORDERS ARE EXPECTED TO SOFTEN IN THE FIRST QUARTER OF 2006 AS PRODUCTION AND ORDERS PEAKED IN THIS SECTOR LAST QUARTER. THE MEDICAL TECHNOLOGY SEGMENT ALSO FORECASTS A DECREASE IN OUTPUT AS INVENTORIES OF MEDICAL SUPPLIES HAVE BUILT UP FROM PRODUCTION IN THE PREVIOUS QUARTER. IN TERMS OF EMPLOYMENT, THE BIOMEDICAL CLUSTER EXPECTS A STABLE EMPLOYMENT LEVEL IN THE FIRST QUARTER OF 2006.

EXTRACTED FROM:

DEPARTMENT OF STATISTICS, SINGAPORE (DOS)

ECONOMIC DEVELOPMENT BOARD, SINGAPORE (EDB)

REUTERS

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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