MIRA INFORM REPORT

Report Date :

23.04.2007

IDENTIFICATION DETAILS

Name :	POLYONE SINGAPORE PTE LTD

Registered Office :	^{22 Tuas West Road, Singapore – 638380}

Country :	Singapore

Financials (as on) :	31.12.2005

Date of Incorporation :	^14/12/1990

Com. Reg. No.:	^199006136Z

Legal Form :	^{Pte Ltd}

Line of Business :	Reinforced and Conductive Engineering Thermoplastics

RATING & COMMENTS

MIRA’s Rating :

RATING		STATUS	PROPOSED CREDIT LINE
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

Status :	Good

Payment Behaviour :	Regular

Litigation :	Clear

Subject Company

POLYONE SINGAPORE PTE LTD

Line Of Business

REINFORCED AND CONDUCTIVE ENGINEERING THERMOPLASTICS

Parent Company

POLYONE CORPORATION

(PERCENTAGE OF SHAREHOLDING: 100.00%)

Financial Elements

FY 2005

COMPANY

Sales : USD34,318,066

Networth : USD13,279,605

Paid-Up Capital : USD112,439

Net result : USD2,550,374

Net Margin(%) : 7.43

Return on Equity(%) : 19.21

Leverage Ratio : 0.51

Rating

Credit Rating : Sing $ 10000001 to Sing $ 50000000

COMPANY IDENTIFICATION

^{Subject Company: POLYONE
SINGAPORE PTE LTD}

^{Former Name: COMPOUNDING
TECHNOLOGY, PTE. LTD.}

^{Business Address: 22 TUAS WEST ROAD}

^{Town: SINGAPORE}

^{Postcode: 638380}

^{County: -}

^{Country: Singapore}

^{Telephone: 6861
9325/ 6861 8069}

^{Fax: 6861
9327/ 6863 1028}

^{ROC Number: 199006136Z}

^{Reg. Town: -}

PREVIOUS IDENTIFICATION

^{COMPOUNDING TECHNOLOGY, PTE. LTD. DATE OF CHANGE OF NAME: 12/04/2001}

SUMMARY

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

^{Legal Form: Pte
Ltd}

^{Date Inc.: 14/12/1990}

^{Previous Legal Form: -}

^{Summary year: 31/12/2005}

^{Sales: 34,318,066}

^{Net worth: 13,279,605}

^{Capital: 200,000}

^{Paid-Up Capital: 112,439}

^{Employees: 67}

^{Net result: 2,550,374}

^{Share value: 1}

^{Auditor: ERNST
& YOUNG}

REFERENCES

^{Litigation: No}

^{Company status: TRADING}

^{Started: 14/12/1990}

PRINCIPAL(S)

^{SEAH SOON CHER S0004985I Director}

DIRECTOR(S)

^{SEAH SOON CHER S0004985I Director}

^{Appointed on: 20/06/1996}

^{Street:
29 JALAN PERADUN}

^{SELETAR HILLS ESTATE}

^{Town: SINGAPORE}

^{Postcode: 808674}

^{Country: Singapore}

^{BERNARD BAERT EB857006/C Director}

^{Appointed on: 26/12/2002}

^{Street: 149 RUE DES HOUGNES}

^{Town: VERVIERS}

^{Postcode: 4800}

^{Country: Belgium}

^{SEAH SOON CHER S0004985I Manager}

^{Appointed on: 15/07/1991}

^{Street: 29 JALAN PERADUN}

^{SELETAR HILLS ESTATE}

^{Town: SINGAPORE}

^{Postcode: 808674}

^{Country: Singapore}

^{WENDY CHRISTINE SHIBA 204581985 Director}

^{Appointed on: 30/09/2002}

^{Street: 1428
CROSSING PARKWAY}

^WESTLAKE

^{Town: OHIO}

^{Postcode: 44145}

^{Country: United States}

^{LATHIKA DEVI AMMA D/O K R PILLAY S1552769B Company Secretary}

^{Appointed on: 05/05/2005}

^{Street: 67 CHOA CHU KANG ROAD}

^{NICON GARDENS}

^{Town: SINGAPORE}

^{Postcode: 689415}

^{Country: Singapore}

^{EILEEN KOH S7246425G Company Secretary}

^{Appointed on:}

^{Street: 9 SENGKANG SQUARE}

^#13-06

^{COMPASS HEIGHTS}

^{Town: SINGAPORE}

^{Postcode: 545075}

^{Country: Singapore}

FORMER DIRECTOR(S)

^{LIM SAY HUI BOBBY S0177938I}

^{KAN MUN LEONG EDDIE S0341298I}

^{FOO SOON SOO S1310912E}

^{TAN GIM SOO S2167816C}

^{GILBERT RUSSELL TOLEN S31683758}

^{JACKSON FRANKLIN LEONARD 032335907}

^{CHOONG MEE FONG S2564466B}

^{MICHAEL STEPHEN DUFFEY 022142391}

^{JOHN SECREST PYKE JR 151462022}

^{JIM CHAPMAN 7703996106}

^{RICHARD ERIC HAHN 024819101}

^{WOODROW WILLIAM BAN 155079843}

^{FRANCIS GEDIMINAS TITAS 155468402}

^{MARTIN EIERMANN-KOHLER}

^{JAMES KWANG LIN YUANN Z8105404}

ACTIVITY(IES)

^{POLYETHYLENE MATERIALS And PRODUCTS Code:17250}

^{PLASTIC - ENGINEERING Code:16910}

^{RESINS Code:18420}

^{BASED ON ACRA'S RECORD AS AT 18/04/2007}

^{1) MANUFACTURE OF POLYMERS}

CHARGES

No Charges On Premises/Property In Our Database

PREMISES/PROPERTY INFORMATIONS

No Premises/Property Information In Our Databases

BANKERS

^{BANK OF AMERICA}

^{CITIBANK NA}

^{ABN AMRO BANK N.V.}

SHAREHOLDERS(S)

^{POLYONE CORPORATION 200,000 Company}

^{Street: 33587 WALKER ROAD}

^{AVON LAKE}

^{Town: OHIO}

^{Postcode: 44012}

^{Country: United States}

FORMER SHAREHOLDER(S)

^{COMPOUNDING TECHNOLOGY INC 200,000}

^{LIM SAY HUI BOBBY 1}

^{TAN GIM SOO 1}

HOLDING COMPANY

^{POLYONE CORPORATION UF28697E %: 100}

SUBSIDIARY(IES)

No Participation In Our Database

PAYMENT HISTORY AND EXPERIENCES

Trade Morality: AVERAGE

^{Liquidity: SUFFICIENT}

^{Payments: REGULAR}

^{Trend: LEVEL}

^{Financial Situation: GOOD}

LITIGATION(S)

No Litigation In Our Database

FINANCIAL ELEMENTS

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

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

^{Date Account Lodged: 19/07/2006}

^{Balance Sheet Date: 31/12/2005 31/12/2004
31/12/2003}

^{Number of weeks: 52 52 52}

^{Consolidation Code: COMPANY COMPANY COMPANY}

^---
ASSETS

^{Tangible Fixed
Assets: 2,602,255 3,047,781 3,178,103}

^{Total Fixed Assets}^{: 2,602,255 3,047,781
3,178,103}

^{Inventories: 4,299,519 4,255,124 3,496,895}

^{Receivables: 5,985,143 4,539,212 6,798,242}

^{Cash,Banks,Securities: 2,101,991 826,798
3,460,370}

^{Other current assets: 5,119,387 6,346,636
3,198,963}

^{Total Current Assets}^{: 17,506,040 15,967,770
16,954,470}

^{TOTAL
ASSETS: 20,108,295 19,015,551 20,132,573}

^{---
LIABILITIES}

^{Equity capital: 112,439 112,439 112,439}

^{Profit & loss
Account: 13,167,166 10,616,792 9,247,056}

^{Total Equity: 13,279,605 10,729,231 9,359,495}

^{L/T deferred taxes: 371,170 366,705
293,657}

^{Total L/T Liabilities}^{: 371,170 366,705
293,657}

^{Trade Creditors: 4,851,559 6,282,898 6,101,296}

^{Prepay. & Def.
charges: 557,976 609,197 -}

^{Provisions: 924,993 889,714 806,896}

^{Other Short term
Liab.: 122,992 137,806 3,571,229}

^{Total short term Liab}^{.: 6,457,520 7,919,615
10,479,421}

^{TOTAL
LIABILITIES: 6,828,690 8,286,320 10,773,078}

PROFIT & LOSS ACCOUNT

^{Net Sales 34,318,066 28,939,631 29,464,386}

^{Purchases,Sces & Other Goods: 27,994,501 23,050,815
23,859,160}

^{Gross Profit: 6,323,565
5,888,816
5,605,226}

^{Result of ordinary
operations 3,104,986 3,476,858 3,160,044}

^{NET RESULT BEFORE
TAX: 3,232,596 3,566,887 3,200,358}

^{Tax: 682,222
697,151 751,888}

^{Net income/loss year: 2,550,374 2,869,736
2,448,470}

^{Depreciation: 556,369 556,327 540,838}

^{Dividends: - 1,500,000 3,008,173}

^{Directors Emoluments: 308,873 220,644
242,951}

^{Wages and Salaries: 2,387,839 1,782,948 -}

^{Financial Income: - - 40,314}

RATIOS

^{31/12/2005 31/12/2004 31/12/2003}

^{Turnover per
employee: 512209.94 431934.79 439766.96}

^{Net result /
Turnover(%): 0.07 0.10 0.08}

^{Stock / Turnover(%): 0.13 0.15 0.12}

^{Net Margin(%): 7.43 9.92 8.31}

^{Return on Equity(%): 19.21 26.75 26.16}

^{Return on Assets(%): 12.68 15.09 12.16}

^{Dividends Coverage: - 1.91
0.81}

^{Net Working capital: 11048520.00 8048155.00
6475049.00}

^{Cash Ratio: 0.33 0.10 0.33}

^{Quick Ratio: 1.25 0.68 0.98}

^{Current ratio: 2.71 2.02 1.62}

^{Receivables Turnover: 62.78 56.47 83.06}

^{Leverage Ratio: 0.51 0.77 1.15}

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

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

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

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

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

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

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

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

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

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

^{NET WORTH:}

^{THE BALANCE SHEET WAS CONSIDERED SOUND WITH
NET WORTH IMPROVED BY} ^{23.77% FROM USD10,729,231 IN 2004 TO USD13,279,605 IN 2005.}

^{THIS WAS DUE TO HIGHER ACCUMULATED PROFIT OF
USD13,167,166} ^{(2004:
USD10,616,792); A RISE OF 24.02% FROM THE PRIOR FINANCIAL} ^YEAR.

^LEVERAGE:

^{IN THE SHORT-TERM, SUBJECT WAS LARGELY
FINANCED BY TRADE CREDITORS} ^{WHICH MADE UP 75.13% (2004: 79.33%) OF THE TOTAL CURRENT
LIABILITIES} ^{AND AMOUNTED TO USD4,851,559 (2004: USD6,282,898). THE
BREAKDOWN IS} ^{AS FOLLOWS:}

^{-TRADE PAYABLES - 2005: USD4,850,252 (2004:
USD4,182,435)}

^{-AMOUNTS DUE TO HOLDING COMPANY (TRADE) -
2005: USD1,307} ^{(2004:
USD2,100,463)}

^{SUBJECT INCURED LONG TERM LIABILITIES, WHICH CONSIST
OF DEFERRED} ^{TAXATION,
AND ROSE BY 1.22% TO USD371,170 (2004: USD366,705).}

^{IN ALL, LEVERAGE RATIO FELL FROM 0.77 TIMES
TO 0.51 TIMES AS A} ^{RESULT OF A RISE IN TOTAL EQUITY AND A FALL IN TOTAL LIABILITIES.}

^LIQUIDITY:

^{IN GENERAL, SUBJECT'S LIQUIDITY SITUATION WAS
PASSABLE AS SEEN FROM} ^{THE RISE IN NET WORKING CAPITAL BY 37.28% TO USD11,048,520} ^{(2004:
USD8,048,155).}

^{CURRENT RATIO ROSE TO 2.71 TIMES, UP FROM
2.02 TIMES AND QUICK RATIO} ^{IMPROVED TO 1.25 TIMES FROM 0.68 TIMES IN 2004.}

^{CASH AND CASH EQUIVALENTS ROSE SHARPLY BY
1.54 TIMES TO USD2,101,991}

^{(2004: USD826,798).}

^{PROFITABILITY:}

^{REVENUE POSTED AN INCREASE OF 18.59% FROM
USD28,939,631 IN 2004 TO} ^{USD34,318,066 BUT NET PROFIT DROPPED BY 11.13% TO USD2,550,374} ^{(2004: USD2,869,736).}

^{THIS COULD BE DUE TO THE INCREASE IN OTHER
OPERATING COSTS BY 56.04%} ^{TO USD1,091,810 (2004: USD699,678) AND THE LOWER GROSS MARGIN OF} ^{18.43% IN 2005}

^{(2004: 20.35%). HENCE, NET MARGIN FELL TO
7.43%} ^{(2004:
9.92%).}

^{DEBT SERVICING:}

^{DEBT SERVICING PROBLEMS MIGHT NOT BE EXPECTED
IF REVENUE AND EARNINGS} ^{CAN BE MAINTAINED AND PAYMENT BY TRADE DEBTORS ARE FORTHCOMING. IN} ^{ADDITION, SUBJECT DID NOT INCUR ANY INTEREST EXPENSES DURING THE} ^{FINANCIAL
YEAR UNDER REVIEW.}

^{NOTES TO THE
FINANCIAL STATEMENT}

^{SHARE CAPITAL:}

^{AUTHORISED, ISSUED AND FULLY PAID ORDINARY
SHARE OF S$1 EACH}

^{- 2005: 200,000 SHARES (2004: 200,000 SHARES)}

^{- 2005: USD112,439 (2004: USD112,439)}

BACKGROUND/OPERATION

^{THE COMPANY WAS INCORPORATED IN THE REPUBLIC
OF SINGAPORE ON} ^{14/12/1990 AS
A LIMITED PRIVATE COMPANY AND WAS TRADING UNDER} ^{THE NAMESTYLE OF
"COMPOUNDING TECHNOLOGY, PTE. LTD.".}

^{SUBSEQUENTLY ON 12/04/2001, THE COMPANY
CHANGED TO ITS PRESENT} ^{NAMESTYLE OF "POLYONE SINGAPORE PTE LTD".}

^{AS AT 18/04/2007, THE COMPANY HAS AN ISSUED AND
PAID-UP CAPITAL OF} ^{200,000 SHARES, OF A VALUE OF S$200,000.}

^{PRINCIPAL ACTIVITIES:}

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

^{1) MANUFACTURE OF POLYMERS}

^{DURING THE FINANCIAL YEAR(S), UNDER REVIEW,
THE PRINCIPAL ACTIVITIES} ^{OF THE COMPANY ARE THE COMPOUNDING OF REINFORCED ENGINEERING} ^{THERMOPASTICS AND PRODUCING A WIDE RANGE OF VINYL COMPOUNDS IN} ^{THE
CUSTOMISED INJECTION MOULDING APPLICATIONS.}

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

^ACTIVITIES

^{- REINFORCED AND CONDUCTIVE ENGINEERING
THERMOPLASTICS}

^PRODUCTS

^{- POLYMER}

^{- ELASTOMER}

^{- COLORANT AND ADDITIVE PRODUCTS}

^{- CABLE SYSTEMS}

^{- SCREEN PRINTING INKS}

^{- ENGINEERED MATERIALS}

^{EXPORT COUNTRIES}

^{- THAILAND, ETC}

^{IMPORT COUNTRIES}

^{- UNITED STATES, ETC}

^{TERMS OF PAYMENTS}

^{- CUSTOMERS: LETTERS OF CREDIT; 30-90 DAY
TERMS}

^{- SUPPLIERS: LETTERS OF CREDIT; 30-90 DAY
TERMS}

^{QUALITY ASSESSMENT}

^{- SISIR ISO 9002}

^{ACCORDING TO AN EARLIER TELE-INTERVIEW
CONDUCTED ON 05/09/2006, THE} ^{FOLLOWING INFORMATION WAS GATHERED:}

^ACTIVITIES

^{- MANUFACTURING OF THERMOPLASTIC RESINS}

^{SUBJECT'S PERSONNEL CONFIRMED THE BUSINESS
ADDRESS AND THE CONTACT} ^{NUMBERS OF THE COMPANY, BUT WAS NOT WILLING TO REVEAL FURTHER} ^{INFORMATION, HENCE NO OTHER TRADE INFORMATION WAS MADE AVAILABLE VIA} ^{THE TELE-INTERVIEW.}

^{SUBJECT'S IMMEDIATE AND ULTIMATE HOLDING
COMPANY IS POLYONE} ^{CORPORATION, INCORPORATED IN THE UNITED STATES OF AMERICA.}

^{NUMBER OF EMPLOYEES (31 DECEMBER)}

^{-COMPANY - 2005: 67 (2004: 67; 2003: 64;
2002: 66; 2001: 56; 2000: 58)}

^{REGISTERED AND BUSINESS ADDRESSES:}

^{22 TUAS WEST ROAD}

^{SINGAPORE 638380}

^{DATE OF CHANGE OF ADDRESS: 18/10/1995}

^EMAIL:

^{general@polyone.com.sg}

^WEBSITE:

^{http://www.polyone.com (HOLDING COMPANY'S)}

MANAGEMENT

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

^{(1) WENDY CHRISTINE SHIBA, AN AMERICAN}

^{- BASED IN THE UNITED STATES}

^{(2) BERNARD BAERT, A BELGIAN}

^{- BASED IN BELGIUM}

^{(3) SEAH SOON CHER, 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

^{PAST PERFORMANCE}

THE MANUFACTURING SECTOR GREW AT A MORE MODEST PACE OF 7.7% IN 4Q 2006, AFTER A 9.5% EXPANSION IN 3Q 2006. THIS WAS DUE MAINLY TO A FALL IN THE OUTPUT OF THE ELECTRONICS AND CHEMICALS CLUSTERS, AND SLOWER GROWTH IN THE PRECISION ^{ENGINEERING CLUSTER. GROWTH IN THE TRANSPORT
ENGINEERING CLUSTER EASED BUT REMAINED STRONG. MEANWHILE, THE BIOMEDICAL
MANUFACTURING CLUSTER ACCELERATED FROM A GROWTH OF 4.7% IN 3Q 2006 TO 27% IN 4Q
2006. FOR THE WHOLE YEAR, THE MANUFACTURING SECTOR GREW BY 12%, UP FROM 9.5% IN
2005, SUPPORTED BY STRONGER PERFORMANCES IN THE TRANSPORT ENGINEERING, BIOMEDICAL}

^{MANUFACTURING AND PRECISION ENGINEERING
CLUSTERS.}

^{OUTPUT OF THE TRANSPORT ENGINEERING CLUSTER
JUMPED 45.2% YEAR-ON-YEAR IN JANUARY 2007. THE MARINE & OFFSHORE
ENGINEERING SEGMENT EXPANDED MORE THAN 50% AS SHIPYARDS CONTINUED WITH A HECTIC
PACE OF BUILDING, REPAIRING AND CONVERSION WORKS ON SHIPS. FABRICATION OF OIL
RIGS AND MANUFACTURE OF OIL FIELD EQUIPMENT KEPT PACE WITH HIGHER DEMAND. THE
AEROSPACE SEGMENT GREW 30.0% AS MORE ORDERS SUSTAINED THE INCREASE IN
COMMERCIAL AIRCRAFT REPAIRS. THE LAND TRANSPORT SEGMENT GREW 17.4% IN RESPONSE
TO INCREASED OVERSEAS ORDERS FOR VEHICLE PARTS AND COMPONENTS.}

^{BIOMEDICAL MANUFACTURING OUTPUT WENT UP 24.1%
IN JANUARY 2007. THE PRODUCTION OF PHARMACEUTICALS AND MEDICAL TECHNOLOGY
PRODUCTS INCREASED 25.0% AND 17.4% RESPECTIVELY.}

^{THE PRECISION ENGINEERING CLUSTER GREW 8.8%
DUE LARGELY TO EXPANSION IN THE MACHINERY & SYSTEMS SEGMENT. THERE WERE
INCREASES IN THE MANUFACTURE OF MACHINERY FOR HOISTING, LIFTING, REFRIGERATION,
AIR-CONDITIONING, INDUSTRIAL PROCESS CONTROL, SWITCH-GEAR AND SWITCHBOX
APPARATUS. THE PRECISION MODULES AND COMPONENTS SEGMENT POSTED A SLIGHT
INCREASE OF 1.7% COMPARED TO JANUARY LAST YEAR.}

^{THE ELECTRONICS CLUSTER REVERSED ITS
DOWNTREND IN THE PAST FOUR MONTHS TO EXPAND BY 4.1% IN JANUARY 2007. THE GROWTH
CAME MAINLY FROM HIGHER PRODUCTION OF SEMICONDUCTORS AND COMPUTER PERIPHERALS,
WHICH SHOWED 12.3% AND 4.0% GROWTH RESPECTIVELY COMPARED TO LAST JANUARY. THE
DATA STORAGE SEGMENT REMAINED DEPRESSED OWING TO THE RELOCATION OF LOW END
PRODUCTION OVERSEAS. THE INFOCOMMS & CONSUMER ELECTRONICS SEGMENT
CONTRACTED AT 5.9% DUE TO DECLINES IN OUTPUT OF TELECOMMUNICATION PRODUCTS AND
CONSUMER ELECTRONICS.}

^{THE CHEMICALS CLUSTER GREW 3.3% IN JANUARY
2007 WITH EXPANSIONS IN THE PETROCHEMICALS AND SPECIALTY CHEMICALS SEGMENTS AT
5.8% AND 7.6% RESPECTIVELY. HOWEVER, THESE EXPANSIONS WERE MODERATED BY THE
CONTRACTION OF 2.3% IN THE PETROLEUM SEGMENT. OIL REFINERS REDUCED THEIR CRUDE
OIL PROCESSING BECAUSE OF LOWER REFINING MARGINS. THE OUTPUT LEVEL WAS ALSO
AFFECTED BY SOME PLANT SHUTDOWNS FOR MAINTENANCE.}

^{THE GENERAL MANUFACTURING INDUSTRIES EXPANDED
11.0% IN JANUARY 2007. PRODUCTION OF FOOD AND BEVERAGES INDUSTRIES INCREASED
12.7%, ESPECIALLY FOR FOOD, CHOCOLATE PRODUCTS AND DRINKS WHICH MEET HIGHER
FESTIVE DEMAND. THE PRINTING INDUSTRIES ALSO EXPANDED BY 13.4%}

^OUTLOOK

^{THE MANUFACTURING SECTOR IS CAUTIOUSLY
OPTIMISTIC ABOUT BUSINESS CONDITIONS IN THE NEXT SIX MONTHS COMPARED TO THE
LAST QUARTER OF 2006. OVERALL, A WEIGHTED 18% OF THE MANUFACTURERS EXPECT AN
IMPROVEMENT IN BUSINESS CONDITIONS WHILE A WEIGHTED 11% PREDICT DETERIORATION.
THIS RESULTS IN A NET WEIGHTED BALANCE OF 7% OF MANUFACTURERS HAVING AN
OPTIMISTIC OUTLOOK, COMPARED TO 22% IN LAST QUARTER'S SURVEY. THE MODERATION IN
SENTIMENTS CAN BE ATTRIBUTED MAINLY TO A WEAKER OUTLOOK IN THE ELECTRONICS
CLUSTER AND SEASONAL SLOWDOWN DUE TO FESTIVE HOLIDAYS IN THE EARLY PART OF THE
YEAR.}

^{THE ELECTRONICS CLUSTER EXPECTS BUSINESS TO
SOFTEN IN THE FIRST HALF OF 2007 IN ALL SEGMENTS EXCEPT THE COMPUTER
PERIPHERALS SEGMENT. THE SEMICONDUCTOR SEGMENT ANTICIPATES A DECELERATION OF
THE SEMICONDUCTOR MARKET IN THE FIRST HALF OF 2007 COMPARED TO THE LAST QUARTER
OF 2006, DUE TO WEAKER DEMAND AND EXCESS INVENTORIES. OUTPUT FOR THIS SEGMENT,
HOWEVER, IS EXPECTED TO INCREASE IN THE FIRST QUARTER OF 2007 COMPARED TO A
QUARTER AGO, TO FULFILL PRE-ARRANGED ORDERS. IN THE INFOCOMMS AND CONSUMER
ELECTRONICS, AND OTHER ELECTRONIC MODULES AND COMPONENTS SEGMENTS, PRICING
PRESSURES AND SEASONAL WEAKNESS CONTRIBUTED TO THE DIP IN SENTIMENTS.
PRODUCTION LEVELS IN THE FIRST QUARTER OF THE YEAR ARE ALSO EXPECTED TO DROP IN
THESE SEGMENTS, COMPARED TO THE OCTOBER TO DECEMBER 2006 PERIOD, AS SOME
PRODUCTION LINES ARE TRANSFERRED OUT OF SINGAPORE. OVERALL EMPLOYMENT IN THIS
CLUSTER IS EXPECTED TO INCREASE, BOOSTED BY THE POSITIVE OUTLOOK IN THE
COMPUTER PERIPHERALS SEGMENT, WHICH ANTICIPATES A CORRESPONDING RISE IN OUTPUT
AND DIRECT EXPORTS IN THE FIRST QUARTER OF THE YEAR, COMPARED WITH THE PREVIOUS
QUARTER.}

^{THE CHEMICALS CLUSTER FORECASTS AN
IMPROVEMENT IN THE BUSINESS CONDITIONS IN THE FIRST SIX MONTHS OF 2007,
COMPARED WITH THE FOURTH QUARTER OF 2006. THIS POSITIVE OUTLOOK IS LED BY THE
SPECIALTIES AND OTHER CHEMICALS SEGMENT, WHICH ANTICIPATE A PICK-UP IN
ACTIVITIES DUE TO THE FESTIVE SEASON AND STRONG MARKET DEMAND. THE SPECIALTIES
SEGMENT EXPECTS HIGHER OUTPUT OF PAINTS AND INDUSTRIAL GASES IN THE FIRST
QUARTER OF 2007 COMPARED TO THE FOURTH QUARTER OF 2006, IN TANDEM WITH EXPECTED
INCREASES IN DOMESTIC AND EXPORT SALES. IN THE PETROLEUM REFINING SEGMENT,
THROUGHPUT IS EXPECTED TO HOLD STEADY COMPARED TO THE PREVIOUS QUARTER, DESPITE
SOME REFINERY UNITS UNDERGOING MAINTENANCE AND REPAIR IN THE FIRST QUARTER OF
2007. THE BUSINESS SITUATION IN THE BIOMEDICAL MANUFACTURING CLUSTER IS
EXPECTED TO REMAIN THE SAME IN THE NEXT SIX MONTHS ENDING JUNE 2007, COMPARED
TO THE LAST QUARTER OF 2006. IN THE PHARMACEUTICAL SEGMENT, PRODUCTION IN THE
FIRST QUARTER OF THE YEAR IS EXPECTED TO FALL FROM THE HIGH LEVELS IN THE
FOURTH QUARTER OF 2006. STOCK OF ACTIVE PHARMACEUTICALS INGREDIENTS IS ALSO
EXPECTED TO CONTINUE BEING RUN DOWN TO MEET DEMAND IN THIS QUARTER. THE
MAJORITY OF MANUFACTURERS IN THE MEDICAL TECHNOLOGY SEGMENT ALSO EXPECT OUTPUT
TO REMAIN LARGELY THE SAME AS FOURTH QUARTER 2006 LEVELS. IN TERMS OF
EMPLOYMENT OUTLOOK, PHARMACEUTICAL MANUFACTURERS EXPECT TO HIRE MORE WORKERS IN
THE FIRST QUARTER OF 2007 IN ANTICIPATION OF NEW PRODUCTION LINES LATER IN THE
YEAR.}

^{A NET WEIGHTED BALANCE OF 4% OF PRECISION
ENGINEERING MANUFACTURERS EXPECT BUSINESS CONDITIONS IN THEIR INDUSTRY TO
IMPROVE IN THE FIRST HALF OF 2007,
COMPARED TO THE LAST QUARTER OF 2006. ON THE PRODUCTION FRONT, HOWEVER,
MANUFACTURE AND REPAIR OF LIFTS, ESCALATORS AND LIFTING AND HANDLING EQUIPMENT,
AND MANUFACTURE OF SEMICONDUCTOR ASSEMBLY AND TESTING EQUIPMENT IN THE
MACHINERY AND SYSTEMS SEGMENT IS EXPECTED TO DECREASE DUE TO HOLIDAY DOWNTIMES
AND MODERATION OF DEMAND IN THE SEMICONDUCTOR MARKET. IN THE PRECISION MODULES
AND COMPONENTS SEGMENT, PRODUCTION OF PLASTIC PRECISION PARTS, CONNECTORS AND
ELECTRIC MOTORS IS SIMILARLY EXPECTED TO TAPER DURING THE FIRST QUARTER OF 2007
DUE LARGELY TO DECREASED ORDERS AMIDST CONTINUED STIFF COMPETITION.}

^{THE TRANSPORT ENGINEERING CLUSTER ANTICIPATES
ROBUST BUSINESS CONDITIONS TO CONTINUE INTO THE FIRST SIX MONTHS OF 2007
COMPARED TO THE FOURTH QUARTER OF 2006. OUTPUT IN ALL SEGMENTS OF THE CLUSTER
IS FORECAST TO INCREASE IN THE FIRST QUARTER OF 2007, COMPARED TO THE LAST
QUARTER OF THE PREVIOUS YEAR. THE MARINE AND OFFSHORE ENGINEERING SEGMENT IS
SPURRED ON BY SUSTAINED DEMAND FOR OIL-RIGS AND OFFSHORE VESSELS, AND RISING
DEMAND FOR SHIP REPAIR ACTIVITIES DUE TO INCREASED SHIPPING ACTIVITIES IN ASIA
PACIFIC AND A GROWING GLOBAL FLEET. IN THE LAND TRANSPORT SEGMENT, OUTPUT IS
EXPECTED TO RISE ON THE BACK OF HIGHER LEVELS OF LOCAL SALES AND EXPORT ORDERS.}

^{EXTRACTED FROM: MINISTRY OF TRADE AND
INDUSTRY, SINGAPORE}

^{SINGAPORE DEPARTMENT OF
STATISTICS}

^{ECONOMIC DEVELOPMENT BOARD}

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
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%)

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