MIRA INFORM REPORT

Report Date :

02.08.2007

IDENTIFICATION DETAILS

Name :	YKK SINGAPORE PTE LTD
Registered Office :	^1 Joo Yee Road^, Jurong Town, Singapore^– 619197
Country :	Singapore
Financials (as on) :	31.12.2006
Date of Incorporation :	^02/09/1968
Com. Reg. No.:	^196800405H
Legal Form :	^Pte Ltd
Line of Business :	Manufacture and Sale of Zip Fasteners and Component Parts

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

Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear

Subject Company

YKK SINGAPORE PTE LTD

Line Of Business 

MANUFACTURE AND SALE OF ZIP FASTENERS AND COMPONENT PARTS

Parent Company

YKK HOLDING ASIA PTE LTD

(PERCENTAGE OF SHAREHOLDING: 100.00%)

Financial Elements

FY 2006

COMPANY

Sales : S$44,977,647

Networth : S$39,859,358

Paid-Up Capital : S$1,000,000

Net result : S$2,077,543

Net Margin(%) : 4.62

Return on Equity(%) : 5.21

Leverage Ratio : 0.17

COMPANY IDENTIFICATION

^{Subject Company: YKK SINGAPORE PTE LTD}

^{Former Name: Y.K.K. ZIPPERS (SINGAPORE)}

^{Business Address: 1 JOO YEE ROAD}

^{JURONG TOWN}

^{Town: SINGAPORE}

^{Postcode: 619197}

^{County: -}

^{Country: Singapore}

^{Telephone: 6265 1875}

^{Fax: 6268 9446}

^{ROC Number: 196800405H}

^{Reg. Town: -}

PREVIOUS IDENTIFICATION

^{Y.K.K. ZIPPERS (SINGAPORE) PRIVATE LIMITED DATE OF CHANGE: 20/12/2000}

SUMMARY

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

^{Legal Form: Pte Ltd}

^{Date Inc.: 02/09/1968}

^{Previous Legal Form: -}

^{Summary year: 31/12/2006}

^{Sales: 44,977,647}

^{Net worth: 39,859,358}

^{Capital: -}

^{Paid-Up Capital: 1,000,000}

^{Employees: Not available}

^{Net result: 2,077,543}

^{Share value: -}

^{Auditor: ERNST & YOUNG}

REFERENCES

^{Litigation: No}

^{Company status: TRADING}

^{Started: 02/09/1968}

PRINCIPAL(S)

^{SKATO NAGASAKI G5794242N Managing Director}

DIRECTOR(S)

^{SKATO NAGASAKI G5794242N Director}

^{Appointed on: 08/03/2005}

^{Street: 33 WOODGROVE VIEW}

^{CENTURY WOODS}

^{Town: SINGAPORE}

^{Postcode: 738136}

^{Country: Singapore}

^{SKATO NAGASAKI G5794242N Managing Director}

^{Appointed on: 08/03/2005}

^{Street: 33 WOODGROVE VIEW}

^{CENTURY WOODS}

^{Town: SINGAPORE}

^{Postcode: 738136}

^{Country: Singapore}

^{KEN NAKANO F2375877Q Director}

^{Appointed on: 01/12/2006}

^{Street: 10 CUSCADEN WALK}

^#04-03

^{Town: SINGAPORE}

^{Postcode: 249693}

^{Country: Singapore}

^{YOSHIHISA MORITA G5687089Q Director}

^{Appointed on: 11/02/2003}

^{Street: 8 DOVER RISE}

^#06-09

^{HERITAGE VIEW}

^{Town: SINGAPORE}

^{Postcode: 138679}

^{Country: Singapore}

^{QUEK SOK CHER NANCY S0010806E Company Secretary}

^{Appointed on: 02/08/2004}

^{Street: 840 SIMS AVENUE}

^#10-858

^{EUNOS ESTATE HUDC}

^{Town: SINGAPORE}

^{Postcode: 400840}

^{Country: Singapore}

^{DOROTHY HO LAI YONG S1105012C Company Secretary}

^{Appointed on: 01/05/2006}

^{Street: 84 CORPORATION ROAD}

^#06-10

^{Town: SINGAPORE}

^{Postcode: 649821}

^{Country: Singapore}

FORMER DIRECTOR(S)

^{MURAKAMI RYOZO SN9108284}

^{YOSHIDA MASAHIRO SE9094689}

^{YOSHIDA TADAHIRO L4540569}

ACTIVITY(IES)

^{BUTTON MAKERS Code:3220}

^{FASTENERS - INDUSTRIAL Code:8600}

^{BASED ON ACRA'S RECORD AS AT 26/07/2007}

^{1) MANUFACTURING INDUSTRIES; MANUFACTURE AND SALE OF ZIP FASTERNERS AND COMPONENTS PARTS.}

CHARGES

No Charges On Premises/Property In Our Database

PREMISES/PROPERTY INFORMATIONS

^{Date: 31/07/2007 Tax rate: 10}

^{Site Address: 1 JOO YEE ROAD}

^{JURONG TOWN}

^{Town: SINGAPORE}

^{County: - Postcode: 619197}

^{Country: Singapore}

^{Annual Value: 714,000}

*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

^{DBS BANK LTD.}

^{UNITED OVERSEAS BANK LIMITED}

^{THE BANK OF TOKYO-MITSUBISHI UFJ, L (THE BANK OF TOKYO-MITSUBISHI, LTD.}

SHAREHOLDERS(S)

^{YKK HOLDING ASIA PTE LTD 10,000 Company}

^{Street: 152 BEACH ROAD}

^#08-02/04

^{GATEWAY EAST}

^{Town: SINGAPORE}

^{Postcode: 189721}

^{Country: Singapore}

FORMER SHAREHOLDER(S)

^{YOSHIDA KOGYO KABUSHIKI KAISHA 10,000}

HOLDING COMPANY

^{YKK HOLDING ASIA PTE LTD 199106063N %: 100}

SUBSIDIARY(IES)

No Participation In Our Database

PAYMENT HISTORY AND EXPERIENCES

^{Trade Morality: AVERAGE}

^{Liquidity: SUFFICIENT}

^{Payments: REGULAR}

^{Trend: UPWARD}

^{Financial Situation: AVERAGE}

LITIGATION(S)

No Litigation In Our Database

FINANCIAL ELEMENTS

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

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

^{Date Account Lodged: 26/03/2007}

^{Balance Sheet Date: 31/12/2006 31/12/2005}

^{Number of weeks: 52 52}

^{Consolidation Code: COMPANY COMPANY}

^{--- ASSETS}

^{Tangible Fixed Assets: 5,143,873 9,589,871}

^{Total Fixed Assets: 5,143,873 9,589,871}

^{Inventories: 7,026,309 9,336,241}

^{Receivables: 6,227,898 8,726,170}

^{Cash,Banks,Securities: 14,913,995 18,987,715}

^{Other current assets: 13,300,964 5,969,933}

^{Total Current Assets: 41,469,166 43,020,059}

^{TOTAL ASSETS: 46,613,039 52,609,930}

^{--- LIABILITIES}

^{Equity capital: 1,000,000 1,000,000}

^{Profit & loss Account: 38,859,358 43,817,815}

^{Total Equity: 39,859,358 44,817,815}

^{L/T deferred taxes: 413,700 830,000}

^{Total L/T Liabilities: 413,700 830,000}

^{Trade Creditors: 2,981,794 3,414,076}

^{Prepay. & Def. charges: 1,888,052 1,944,405}

^{Provisions: 1,131,725 1,292,397}

^{Other Short term Liab.: 338,410 311,237}

^{Total short term Liab.: 6,339,981 6,962,115}

^{TOTAL LIABILITIES: 6,753,681 7,792,115}

^{PROFIT & LOSS ACCOUNT}

^{Net Sales 44,977,647 42,039,826}

^{Purchases,Sces & Other Goods: 32,822,607 32,304,141}

^{Gross Profit: 12,155,040 9,735,685}

^{Result of ordinary operations 3,413,213 1,638,272}

^{NET RESULT BEFORE TAX: 3,073,290 2,139,821}

^{Tax: 995,747 610,000}

^{Net income/loss year: 2,077,543 1,529,821}

^{Depreciation: 2,120,837 3,015,932}

^{Dividends: 7,036,000 5,000,000}

^{Directors Emoluments: 390,242 480,654}

^{Wages and Salaries: 5,976,167 6,351,613}

^{Financial Income: 141,390 133,454}

RATIOS

^{31/12/2006 31/12/2005}

^{Net result / Turnover(%): 0.05 0.04}

^{Stock / Turnover(%): 0.16 0.22}

^{Net Margin(%): 4.62 3.64}

^{Return on Equity(%): 5.21 3.41}

^{Return on Assets(%): 4.46 2.91}

^{Dividends Coverage: 0.30 0.31}

^{Net Working capital: 35129185.00 36057944.00}

^{Cash Ratio: 2.35 2.73}

^{Quick Ratio: 3.33 3.98}

^{Current ratio: 6.54 6.18}

^{Receivables Turnover: 49.85 74.72}

^{Leverage Ratio: 0.17 0.17}

^{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 ADEQUATE EVEN THOUGH NET WORTH DECREASED BY 11.06% FROM S$44,817,815 IN 2005 TO S$39,859,358 IN 2006.}

^{THIS WAS DUE TO LOWER ACCUMULATED PROFITS OF S$38,859,358 (2005: S$ 43,817,815); A FALL OF 11.32% FROM THE PRIOR FINANCIAL YEAR.}

^LEVERAGE:

^{IN THE SHORT-TERM, SUBJECT WAS LARGELY FINANCED BY TRADE CREDITORS WHICH MADE UP 47.03% (2005: 49.04%) OF THE TOTAL CURRENT LIABILITIES AND AMOUNTED TO S$2,981,794 (2005: S$3,414,076). THE BREAKDOWN IS AS FOLLOWS:}

^{-TRADE CREDITORS - 2006: S$603,204 (2005: S$724,786)}

^{-ULTIMATE HOLDING COMPANY - 2006: S$1,475,254 (2005: S$1,559,007)}

^{-RELATED COMPANIES - 2006: S$903,336 (2005: S$1,130,283)}

^{SUBJECT'S LONG TERM LIABILITY, WHICH CONSIST OF DEFERRED TAXATION, FELL BY 50.16% TO S$413,700 (2005: S$830,000).}

^{IN ALL, LEVERAGE RATIO REMAINEDAT 0.17 TIMES AS A RESULT OF THE SIMILAR FALL IN TOTAL EQUITY AND TOTAL LIABILITIES.}

^LIQUIDITY:

^{IN GENERAL, SUBJECT'S LIQUIDITY SITUATION WAS PASSABLE EVEN THOUGH NET WORKING CAPITAL FELL BY 2.58% TO S$35,129,185 (2005: S$36,057,944).}

^{CURRENT RATIO ROSE TO 6.54 TIMES, UP FROM 6.18 TIMES BUT QUICK RATIO DECREASED TO 3.33 TIMES FROM 3.98 TIMES IN 2005.}

^{PROFITABILITY:}

^{REVENUE POSTED AN INCREASE OF 6.99% FROM S$42,039,826 IN 2005 TO S$44,977,647 AND NET PROFIT ROSE BY 35.80% TO S$2,077,543 (2005: S$ 1,529,821).}

^{THIS COULD BE DUE TO THE HIGHER GROSS MARGIN OF 27.02% IN 2006 (2005: 23.16%).}

^{HENCE, NET MARGIN ROSE TO 4.62% (2005: 3.64%).}

^{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.}

BACKGROUND/OPERATION

^{THE COMPANY WAS INCORPORATED IN THE REPUBLIC OF SINGAPORE ON 02/09/1968 AS A LIMITED PRIVATE COMPANY UNDER THE NAMESTYLE OF "Y.K.K. ZIPPERS (SINGAPORE) PRIVATE LIMITED".}

^{SUBSEQUENTLY ON 20/12/2000, THE COMPANY CHANGED TO ITS PRESENT NAMESTYLE OF "YKK SINGAPORE PTE LTD".}

^{AS AT 26/07/2007, THE COMPANY HAS AN ISSUED AND PAID-UP CAPITAL OF 10,000 SHARES, OF A VALUE OF S$1,000,000.}

^{PRINCIPAL ACTIVITIES:}

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

^{1) MANUFACTURING INDUSTRIES; MANUFACTURE AND SALE OF ZIP FASTERNERS AND COMPONENTS PARTS.}

^{2) MANUFACTURING INDUSTRIES}

^{DURING THE FINANCIAL YEAR (S) UNDER REVIEW, THE PRINCIPAL ACTIVITIES OF THE COMPANY ARE THE MANUFACTURE AND SALE OF ZIP FASTENERS AND COMPONENT PARTS.}

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

^ACTIVITIES

^{- MANUFACTURING OF ZIPPERS}

^{NUMBER OF EMPLOYEES}

^{- ABOUT 150}

^PRODUCTS

^{- ZIPPER & SLIDER}

^{- HOOK & LOOP}

^{- PLASTIC PARTS}

^{- SNAP & BUTTON}

^{MARKET PRESENCE}

^{- ASIAN REGION}

^{SUBJECT IS A MEMBER OF THE FOLLOWING ENTITIES}

^{- SINGAPORE BUSINESS FEDERATION}

^{- JAPANESE CHAMBER OF COMMERCE AND INDUSTRY}

^{QUALITY ASSESSMENT}

^{- ISO 9001}

^{- ISO 14001}

^{NO OTHER TRADE INFORMATION WAS MADE AVAILABLE AS TELE-INTERVIEW WAS NOT GRANTED ON 01/08/2007.}

^{THE COMPANY'S IMMEDIATE HOLDING COMPANY AND ULTIMATE HOLDING COMPANY ARE YKK HOLDING ASIA PTE LTD AND YKK CORPORATION, INCORPORATED IN SINGAPORE AND JAPAN, RESPECTIVELY.}

^{NUMBER OF EMPLOYEES (31 DECEMBER)}

^{- COMPANY - 2006: NOT AVAILABLE (2005: NOT AVAILABLE)}

^{REGISTERED AND BUSINESS ADDRESS:}

^{1 JOO YEE ROAD}

^{JURONG TOWN}

^{SINGAPORE 619197}

^{DATE OF CHANGE OF ADDRESS: -}

^{- OWNED PREMISE}

^WEBSITE:

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

^EMAIL:

^{info@ykk.com.sg}

MANAGEMENT

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

^{1) KEN NAKANO, A JAPANESE}

^{- BASED IN SINGAPORE}

^{2) YOSHIHISA MORITA, A JAPANESE}

^{- BASED IN SINGAPORE}

^{3) SAKATO NAGASAKI, A JAPANESE}

^{- BASED IN SINGAPORE}

SINGAPORE’S COUNTRY RATING 2007

^{INVESTMENT GRADE}

^{IN SINGAPORE, THE POLITICAL SITUATION REMAINS STABLE.}

^{SINGAPORE BOASTS THE BEST GOVERNANCE IN ASIA, WITH AN EFFECTIVE LEGAL SYSTEM FACILITATING DEBT COLLECTION AND TO A HIGH DEGREE OF FINANCIAL TRANSPARENCY.}

^{EXTERNAL ACCOUNTS HAVE REMAINED SUBSTANTIALLY IN SURPLUS, CONTRIBUTED TO THE DYNAMISM OF THE ELECTRONICS AND PHARMACEUTICALS SECTORS AND TO REPATRIATION OF PROFITS FROM SINGAPORE INVESTMENTS. THE FINANCIAL AND TOURISM SECTORS HAVE ALSO CONTRIBUTED TO THE LARGE CURRENT ACCOUNT SURPLUS.}

^{SINGAPORE CONTINUES TO KEENLY WELCOME FOREIGN INVESTMENT AND OFFERS A VERY OPEN AND WELL-PLANNED ECONOMIC AND POLITICAL ENVIRONMENT. IT HAS BEEN IMPLEMENTING AMBITIOUS DIVERSIFICATION STRATEGY, FOCUSED PARTICULARLY ON THE CHEMICALS AND PHARMACEUTICAL SECTORS.}

^{THE GOVERNMENT USES FOREIGN DIRECT INVESTMENT TO DEVELOP PRIORITY SECTORS (ELECTRONICS, CHEMICALS, BIOTECHNOLOGY). THE AIM IS TO ENCOURAGE THE GROWTH OF HIGH ADDED-VALUE ACTIVITIES AND TURN SINGAPORE INTO A REGIONAL HUB FOR FOREIGN INVESTORS INTERESTED IN ASIA.}

^{CERTAIN SECTORS (MEDIA, LEGAL AND FINANCIAL SERVICES) ARE HOWEVER ONLY PARTIALLY OPEN TO FOREIGN INVESTMENT. THESE SECTORS ARE SLOWLY OPENING UP, BUT THE PROGRESS IS SLOW. AFTER HIGH GROWTH IN 2006, BUOYED BY THE DYNAMISM OF BOTH EXPORTS AND HOUSEHOLD CONSUMPTION, A SLOWDOWN IS EXPECTED IN 2007.}

^ASSETS

^{" MAJOR EXPORTER OF CAPITAL IN ASIA, NOTABLY VIA THE STATE-OWNED TEMASEK HOLDING}

^COMPANY.

^{" HIGH QUALITY COMPETITIVENESS IN ASIA}

^{" EXCELLENT BUSINESS CLIMATE}

^{" POLITICAL STABILITY.}

^WEAKNESSES

^{" SKILLED MANPOWER HAS BEEN LACKING IN THE SECTORS TARGETED FOR DEVELOPMENT.}

^{" AN AGEING POPULATION COULD, ULTIMATELY, AFFECT ECONOMIC PERFORMANCE.}

^{" GROWING INEQUALITY AND THE EMERGENCE OF LONG-TERM UNEMPLOYMENT AMONG THE LEAST}

^{SKILLED COULD GENERATE SOCIAL TENSIONS.}

^{" BEING THE WORLD'S MOST OPEN ECONOMY, IT HAS BEEN VULNERABLE TO WORLD ECONOMIC}

^DOWNTURNS.

OVERVIEW OF SINGAPORE

PAST PERFORMANCE

SINGAPORE’S ECONOMY GREW BY 6.6% IN 4Q 2006, AFTER A 7.0% GROWTH IN 3Q 2006. THE GROWTH MOMENTUM, ON AN ANNUALISED QUARTER-TO-QUARTER BASIS, DOUBLED TO 7.9% IN 4Q 2006, FROM 3.9% IN THE PREVIOUS QUARTER. THIS BROUGHT FULL-YEAR REAL GDP GROTH TO 7.9%, HIGHER THAN THE 6.6% GROWTH IN 2005.

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.

THE WHOLESALE AND RETAIL TRADE SECTOR EXPANDED 6.9% IN 4Q 2006, BUT ITS GROWTH MOMENTUM WAS DOWN BY 3.5%. THE WHOLESALE SEGMENT MODERATED, WITH GROWTH OF NON-OIL RE-EXPORTS HALVED FROM 13% IN 3Q 2006 TO 6.3% IN 4Q 2006. PERFORMANCE OF THE RETAIL SEGMENT IMPROVED FURTHER AS RETAIL SALES WENT UP 7.9% IN 4Q 2006, COMPARED TO 5.2% IN THE PREVIOUS QUARTER. OVER 2006, THE WHOLESALE AND RETAIL SECTOR EXPANDED STRONGLY BY 10%, UP FROM 9.6% IN 2005.

THE FINANCIAL SERVICES SECTOR EXPANDED BY 11% IN 4Q 2006, AFTER GROWING BY 7.4% FROM THE PREVIOUS QUARTER. THE EXPANSION WAS BROAD-BASED ACROSS MOST SEGMENTS. IN PARTICULAR, THE STOCK TRADING SEGMENT ENJOYED A SHARP INCREASE IN ACTIVITY DURING THE QUARTER. FUND MANAGEMENT, ASIAN CURRENCY UNITS, AND FOREX SEGMENTS ALSO REGISTERED STRONG GROWTH IN 4Q 2006. THE STRONG PERFORMANCE IN THE FINAL QUARTER BROUGHT THE SECTOR’S FULL-YEAR GROWTH TO 9.2%, HIGHER THAN THE 7.6% GAIN IN 2005.

THE CONSTRUCTION SECTOR CONTINUED TO EXPAND BY 4.7%, FOLLOWING 5.8% IN 3Q 2006. GROWTH MOMENTUM ON A SEASONALLY ADJUSTED QUARTER-ON-QUARTER BASIS REMAINED STRONG AT 12%. CERTIFIED PAYMENTS GREW SLIGHTLY BY 0.7%, DOWN FROM 9.8% IN 3Q 2006. CONTRACTS AWARDED DIPPED 8.0% IN 4Q 2006 AFTER A RISE IN GROWTH IN THE PREVIOUS QUARTER. FOR THE YEAR, THE SECTOR GREW BY 2.7%, UP FROM 0.7% IN 2005.

THE HOTELS AND RESTAURANTS SECTOR CONTINUED TO STRENGTHEN IN 4Q 2006 WITH A 6.1% INCREASE FOLLOWING A 4.4% GROWTH IN 3Q 2006. VISITOR ARRIVALS ROSE 8.4% COMPARED WITH 4.5% IN THE PREVIOUS QUARTER. THIS HELPED TO RAISE THE AVERAGE OCCUPANCY RATE OF HOTELS TO 88% IN 4Q 2006, COMPARED TO 85% A YEAR EARLIER. HOTEL ROOM REVENUES WENT UP 12% AFTER A 28% INCREASE IN 3Q 2006. FOR THE YEAR AS A WHOLE, THE SECTOR GREW BY 5.1%, UP FROM 4.3% IN 2005, ON THE BACK OF A RECORD 9.7 MILLION VISITOR ARRIVALS.

THE FINANCIAL SERVICES SECTOR EXPANDED BY 11% IN 4Q 2006, AFTER GROWING BY 7.4% A QUARTER EARLIER. THE EXPANSION WAS BROAD-BASED ACROSS MOST SEGMENTS. IN PARTICULAR, THE STOCK TRADING SEGMENT ENJOYED AN INCREASE IN ACTIVITY DURING THE QUARTER. FUND MANAGEMENT, ASIAN CURRENCY UNITS, AND FOREX SEGMENTS ALSO REGISTERED STRONG GROWTH IN 4Q 2006. THE STRONG PERFORMANCE IN THE FINAL QUARTER BROUGHT THE SECTOR’S FULL-YEAR GROWTH TO 9.2%, HIGHER THAN THE 7.6% GAIN IN 2005.

THE TRANSPORT AND STORAGE SECTOR INCREASE BY 4.0% IN 4Q 2006, SAME AS THE PREVIOUS QUARTER. WITHIN THE SECTOR, THE AIR TRANSPORT SEGMENT TURNED IN BETTER PERFORMANCE WHILE THE WATER TRANSPORT SEGMENT MODERATED. SLOWER GROWTH WAS SEEN IN BOTH SEA CARGO AND AIR CARGO HANDLED. MEANWHILE, GROWTH IN AIR PASSENGERSHANDLED AND CONTAINER THROUGHPUT IMPROVED COMPARED TO 3Q 2006. OVERALL, THE TRANSPORT AND STORAGE SECTOR EXPANDED 4.3% IN 2006, SIMILAR TO THE 4.2% IN 2005.

THE INFORMATION AND COMMUNICATIONS SECTOR POSTED A BETTER PERFORMANCE IN 4Q 2006 WITH A GROWTH OF 6.0%, FOLLOWING A 3.6% GAIN IN 3Q 2006. THE NUMBER OF BROADBAND SUBSCRIBERS CONTINUED TO REGISTER DOUBLE-DIGIT GROWTH IN THE QUARTER. INTERNATIONAL TELEPHONE CALL DURATION AND THE NUMBER OF MOBILE PHONE SUBSCRIBERS GREW AT A FASTER PACE COMPARED TO THE PREVIOUS QUARTER. THE SECTOR EXPANDED BY 4.6% DURING THE YEAR, COMPARED TO 5.5% IN 2005.

THE BUSINESS SERVICES SECTOR ROSE BY 5.4% IN 4Q 2006, FOLLOWING A 5.1% GAIN IN THE PREVIOUS QUARTER. THE EXPANSION IN THE SECTOR WAS DRIVEN BY ACTIVITIES IN THE CONSULTANCY, ARCHITECTURAL & ENGINEERING AND BUSINESS REPRESENTATIVE OFFICES AS WELL AS REAL ESTATE SEGMENT. FOR THE YEAR AS A WHOLE, THE BUSINESS SERVICES SECTOR INCREASED BY 5.8%, SIMILAR TO THE 5.9% GROWTH ACHIEVED IN 2005.

APART FROM WHOLESALE AND RETAIL TRADE, ALL SECTORS EXPERIENCED POSITIVE GROWTH MOMENTUM IN 4Q 2006. FOR 2006 AS A WHOLE, ALL SECTORS REGISTERED GROWTH, LED BY MANUFACTURING, WHOLESALE & RETAIL TRADE AND FINANCIAL SERVICES.

OUTLOOK

THE OUTLOOK FOR THE ECONOMY IS GENERALLY POSITIVE ALTHOUGH THERE ARE SOME DOWNSIDE RISKS. THE AVIAN FLU PANDEMIC TREAT HAS RESURFACED AS A GROWING NUMBER OF COUNTRIES REPORTED CASES OF INFECTION IN BIRDS IN RECENT WEEKS. OTHER UNCERTAINTIES INCLUDE THE DISORDERLY UNWINDING OF GLOBAL IMBALANCES, TERRORISM AND THE VULNERABILITY OF OIL PRICES TO SUPPLY SHOCKS. AS A RESULT, THE ECONOMIC GROWTH FORECAST FOR 2007 IS BEING RAISE FROM 4.0% TO 6.0% TO 4.5% TO 6.5%.

REAL ESTATE DEVELOPERS AND AGENTS AND 73% OF THE REAL ESTATE FIRMS ARE THE MOST OPTIMISTIC. THIS SECTOR IS EXPECTING TO DO WELL IN THE FIRST HALF OF 2007.

THE MANUFACTURING SECTOR IS CAUTIOUSLY OPTIMISTIC ABOUT BUSINESS SITUATIONS IN THE NEXT SIX MONTHS OF 2007.

WITHIN THE FINANCIAL SERVICES INDUSTRY, 46% OF THE FIRMS, INCLUDING COMPANIES ENGAGED IN BANKING AND FINANCE, STOCK, SHARE AND BOND BROKERAGE, FUND MANAGEMENT AND INSURANCE ACTIVITIES, ANTICIPATED HIGHER LEVELS OF BUSINESS ACTIVITIES IN THE FIRST 6 MONTHS.

IN THE BUSINESS SERVICES INDUSTRY, 27% OF THE FIRMS EXPECTS BUSINESS TO PICK UP DURING THE FIRST HALF OF THE YEAR. IN PARTICULAR, FIRMS ENGAGED IN ACCOUNTING, ARCHITECTURAL AND ENGINEERING, ADVERTISING AND SECURITY SERVICES AND THE RENTING OF CONSTRUCTION AND INDUSTRIAL MACHINERY FORESEE HIGHER DEMAND FOR THEIR SERVICES.

WITHIN THE CATERING TRADE INDUSTRY, 31% OF THE FIRM EXPRESSES POSITIVE BUSINESS SENTIMENTS. MOST HOTELIERS EXPECTS TO DO WELL IN THE FIRST HALF, IN ANTICIPATION OF HIGHER TOURIST ARRIVALS AND OCCUPANCY RATE.

RETAILERS, PARTICULARLY DEPARTMENT STORES OWNERS AND RETAILER OF FURNITURE AND FURNISHINGS, PREDICTS BUSINESS CONDITIONS TO IMPROVE IN THE NEXT SIX MONTHS.

WHOLESALERS ARE GENERALLY LESS OPTIMISTIC ABOUT THE BUSINESS ENVIRONMENT. IN PARTICULAR, DEALERS OF JEWELLERY AND WATCHES, INDUSTRIES MACHINERY AND EQUIPMENT, TELECOMMUNICATIONS EQUIPMENT AND ELECTRONIC COMPONENTS ARE THOSE WHO FORESEE SLOWER BUSINESS IN THE COMING MONTHS.

ALSO, TRANSPORT AND COMMUNICATIONS INDUSTRY IS LESS POSITIVE ABOUT THE BUSINESS OUTLOOK. SHIPPING LINES EXPECT SLOWER BUSINESS IN THE FIRST HALF DUE TO SEASONAL FACTORS. IN CONTRAST, FIRMS PROVIDING POST AND COURIER SERVICES FORESEE MORE FAVOURABLE CONDITIONS.

EXTRACTED FROM: MINISTRY OF TRADE AND INDUSTRY, SINGAPORE

SINGAPORE DEPARTMENT OF STATISTICS

TODAY

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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