MIRA INFORM REPORT

Report Date :

29.08.2007

IDENTIFICATION DETAILS

Name :	MAKINO ASIA PTE LTD
Registered Office :	^2^Gul Avenue, Singapore^– 629649
Country :	Singapore
Financials (as on) :	31.03.2006
Date of Incorporation :	^23/05/1973
Com. Reg. No.:	^197300960K
Legal Form :	^Pte Ltd
Line of Business :	Manufacturing and Sale of Machine Tools and Investment Holding

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

MAKINO ASIA PTE LTD

Line Of Business 

MANUFACTURING AND SALE OF MACHINE TOOLS AND INVESTMENT HOLDING

Parent Company

MAKINO MILLING MACHINE CO LTD

(PERCENTAGE OF SHAREHOLDING: 100.00%)

Financial Elements

FY 2006

CONSOLIDATED

Sales : S$345,298,382

Networth : S$155,825,916

Paid-Up Capital : S$13,626,377

Net result : S$42,272,475

Net Margin(%) : 12.24

Return on Equity(%) : 27.13

Leverage Ratio : 0.95

COMPANY IDENTIFICATION

^{Subject Company: MAKINO ASIA PTE LTD}

^{Former Name: LEBLOND MAKINO ASIA PTE LTD}

^{Business Address: 2 GUL AVENUE}

^{Town: SINGAPORE}

^{Postcode: 629649}

^{County: -}

^{Country: Singapore}

^{Telephone: 6861 5722/ 6559 4722}

^{Fax: 6861 1600}

^{ROC Number: 197300960K}

^{Reg. Town: -}

PREVIOUS IDENTIFICATION

^{LEBLOND MAKINO ASIA PTE LTD DATE OF CHANGE OF NAME: 07/05/1992}

SUMMARY

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

^{Legal Form: Pte Ltd}

^{Date Inc.: 23/05/1973}

^{Previous Legal Form: -}

^{Summary year: 31/03/2006}

^{Sales: 345,298,382}

^{Net worth: 155,825,916}

^{Capital: -}

^{Paid-Up Capital: 13,626,377}

^{Employees: Not available}

^{Net result: 42,272,475}

^{Share value: -}

^{Auditor: DELOITTE & TOUCHE}

REFERENCES

^{Litigation: No}

^{Company status: TRADING}

^{Started: 23/05/1973}

PRINCIPAL(S)

^{KUMBAKONAM SUBRAMANIAM SANKARAN S2201992I Director}

DIRECTOR(S)

^{DR MOH CHONG TAU S1283127G Director}

^{Appointed on: 23/04/1985}

^{Street: 30 SIMON PLACE}

^{Town: SINGAPORE}

^{Postcode: 545972}

^{Country: Singapore}

^{KUMBAKONAM SUBRAMANIAM SANKARAN S2201992I Director}

^{Appointed on: 01/01/2002}

^{Street: 32 HERTFORD ROAD}

^{Town: SINGAPORE}

^{Postcode: 219400}

^{Country: Singapore}

^{DR MOH CHONG TAU S1283127G Company Secretary}

^{Appointed on: 23/04/1985}

^{Street: 30 SIMON PLACE}

^{Town: SINGAPORE}

^{Postcode: 545972}

^{Country: Singapore}

^{SHUN MAKINO MH1698288 Director}

^{Appointed on: 31/07/1987}

^{Street: 4-35-5 UTSUKUSHIGAOKA MIDORI-KU}

^{YOKOHAMA CITY KANAGAWA PREF}

^{Town: -}

^{Postcode: -}

^{Country: Japan}

^{TSUNEO KAITO TZ0147754 Director}

^{Appointed on: 04/03/2004}

^{Street: 57-35 SHIRATORI-DAI, AOBA-KU}

^{YOKOHAMA KANAGAWA}

^{Town: -}

^{Postcode: -}

^{Country: Japan}

^{FUMIYOSHI MATSUBARA TE7658959 Director}

^{Appointed on: 04/05/2005}

^{Street: 4-1101-7-613 MATSUMI-CHO}

^{KANAGAWA-KU, YOKOHAMA-SHI}

^{Town: KANAGAWA}

^{Postcode: 221-0005}

^{Country: Japan}

^{TATSUAKI AIBA TG0926761 Director}

^{Appointed on: 01/06/2006}

^{Street: 1248-4, NISHIASUMA, NISHIKU}

^SAITAMA-SHI

^{Town: SAITAMA-KEN}

^{Postcode: -}

^{Country: Japan}

FORMER DIRECTOR(S)

^{SUSUMU OGASAWARA MN4141728}

^{EIICHI HOSOSHIMA MN7998024}

^{YOSHIHISA HAYASHI TF3251748}

ACTIVITY(IES)

^{MACHINE TOOLS - ACCESSORIES Code:13250}

^{METAL WORKING MACHINERY Code:13940}

^{IMPORTERS And EXPORTERS Code:11760}

^{BASED ON ACRA'S RECORD AS AT 24/08/2007}

^{1) MANUFACTURE & REPAIR MACHINERY & MACHINE-TOOLS-METAL CUTTING TYPES (EG LATHES)}

CHARGES

^{Date: 07/10/1999}

^{Comments: CHARGE NO: 199904325 (DISCHARGED)}

^{AMOUNT SECURED: 0.00 AND ALL MONIES OWING}

^{CHARGEE(S): THE DEVELOPMENT BANK OF SINGAPORE LIMITED}

^{Date: 07/10/1999}

^{Comments: CHARGE NO: 199904324 (DISCHARGED)}

^{AMOUNT SECURED: 0.00 AND ALL MONIES OWING}

^{CHARGEE(S): THE DEVELOPMENT BANK OF SINGAPORE LIMITED}

PREMISES/PROPERTY INFORMATIONS

^{Date: 14/07/2006 Tax rate: 10}

^{Site Address: 2 GUL AVENUE}

^{Town: SINGAPORE}

^{County: - Postcode: 629649}

^{Country: Singapore}

^{Annual Value: 1,729,000}

*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}

^{BANK OF TOKYO-MITSUBISHI LTD}

SHAREHOLDERS(S)

^{MAKINO MILLING MACHINE CO LTD 1,641,377 Company}

^{Street: 3-19 NAKANE 2-CHOME MEGURO-KU}

^{Town: TOKYO}

^{Postcode: 152}

^{Country: Japan}

HOLDING COMPANY

^{MAKINO MILLING MACHINE CO LTD UF05641K %: 100}

SUBSIDIARY(IES)

^{MAKINO (CHINA) CO LTD}

^{MAKINO MACHINE TOOL (INDIA) PTE LTD}

^{MAKINO (THAILAND) CO LTD}

PAYMENT HISTORY AND EXPERIENCES

^{Trade Morality: AVERAGE}

^{Liquidity: SUFFICIENT}

^{Payments: REGULAR}

^{Trend: UPWARD}

^{Financial Situation: GOOD}

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) UNQUALIFIED (CLEAN)}

^{Date Account Lodged: 21/09/2006}

^{Balance Sheet Date: 31/03/2006 31/03/2005 31/03/2004}

^{Number of weeks: 52 52 64}

^{Consolidation Code: CONSOLIDATED CONSOLIDATED CONSOLIDATED}

^{--- ASSETS}

^{Preliminary Exp 2,670,100 4,832,316 5,450,861}

^{Tangible Fixed Assets: 81,937,819 66,885,904 61,785,380}

^{Investments - - 69,179}

^{Total Fixed Assets: 84,607,919 71,718,220 67,305,420}

^{Raw material & supplies: - - 25,640,327}

^{Work in progress: - - 12,270,798}

^{Finished Goods: - - 7,642,428}

^{Inventories: 57,271,382 50,051,377 -}

^{Receivables: 142,290,076 113,084,766 65,262,287}

^{Cash,Banks,Securities: 13,473,838 7,536,155 2,469,159}

^{Other current assets: 5,468,799 2,705,667 4,005,767}

^{Total Current Assets: 218,504,095 173,377,965 117,290,766}

^{TOTAL ASSETS: 303,112,014 245,096,185 184,596,186}

^{--- LIABILITIES}

^{Equity capital: 13,626,377 1,641,377 1,641,377}

^{Reserves: -436,376 -453,691 -307,058}

^{Profit & loss Account: 142,635,915 100,363,440 70,296,106}

^{Surplus equity: - 11,985,000 11,985,000}

^{Total Equity: 155,825,916 113,536,126 83,615,425}

^{Long Term Loans: - 523,830 2,619,048}

^{L/T deferred taxes: 6,971,444 6,490,337 4,998,381}

^{Other long term Liab.: 102,697 144,785 -}

^{Total L/T Liabilities: 7,074,141 7,158,952 7,617,429}

^{Trade Creditors: 85,049,215 68,743,226 51,750,696}

^{Short term liabilities: 40,879 61,414}

^{Due to Bank: 36,949,810 27,695,857 26,973,494}

^{Provisions: 253,080 129,200 7,730}

^{Other Short term Liab.: 17,918,973 27,771,410 14,631,412}

^{Total short term Liab.: 140,211,957 124,401,107 93,363,332}

^{TOTAL LIABILITIES: 147,286,098 131,560,059 100,980,761}

^{PROFIT & LOSS ACCOUNT}

^{Net Sales 345,298,382 289,647,586 231,532,046}

^{Purchases,Sces & Other Goods: 262,010,355 226,612,931 181,721,161}

^{Gross Profit: 83,288,027 63,034,655 49,810,885}

^{Result of ordinary operations - - 18,572,586}

^{NET RESULT BEFORE TAX: 43,700,108 31,682,326 16,835,590}

^{Tax: 1,427,633 1,614,992 41,176}

^{Net income/loss year: 42,272,475 30,067,334 16,794,414}

^{Interest Paid: 1,123,472 1,249,343 1,736,996}

^{Depreciation: 4,810,181 4,538,158 5,140,014}

^{Directors Emoluments: 1,576,456 1,394,620 2,107,845}

^{Wages and Salaries: 24,439,962 21,762,763 21,877,821}

RATIOS

^{31/03/2006 31/03/2005 31/03/2004}

^{Net result / Turnover(%): 0.12 0.10 0.07}

^{Fin. Charges / Turnover(%): 0.00 0.00 0.01}

^{Stock / Turnover(%): 0.17 0.17 0.00}

^{Net Margin(%): 12.24 10.38 7.25}

^{Return on Equity(%): 27.13 26.48 20.09}

^{Return on Assets(%): 13.95 12.27 9.10}

^{Net Working capital: 78292138.00 48976858.00 23927434.00}

^{Cash Ratio: 0.10 0.06 0.03}

^{Quick Ratio: 1.11 0.97 0.73}

^{Current ratio: 1.56 1.39 1.26}

^{Receivables Turnover: 148.35 140.55 101.47}

^{Leverage Ratio: 0.95 1.16 1.21}

^{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

^{THE FINANCIAL CONDITION OF THE GROUP WAS SEEN TO BE STABLE IN VIEW OF THE FOLLOWING:}

^{NET WORTH:}

^{THE BALANCE SHEET WAS CONSIDERED SOUND WITH NET WORTH IMPROVED BY 37.25% FROM S$113,536,126 IN 2005 TO S$155,825,916 IN 2006.}

^{THIS WAS DUE TO HIGHER RETAINED EARNINGS OF S$142,635,915 (2005: S$100,363,440); A RISE OF 42.12% FROM THE PRIOR FINANCIAL YEAR.}

^LEVERAGE:

^{IN THE SHORT-TERM, SUBJECT WAS LARGELY FINANCED BY TRADE CREDITORS WHICH MADE UP 60.66% (2005: 55.26%) OF THE TOTAL CURRENT LIABILITIES AND AMOUNTED TO S$85,049,215 (2005: S$68,743,226). THE BREAKDOWN IS AS FOLLOWS:}

^{-OUTSIDE PARTIES - 2006: S$17,265,380 (2005: S$14,341,718)}

^{-HOLDING COMPANY - 2006: S$54,991,950 (2005: S$45,947,681)}

^{-RELATED COMPANIES - 2006: S$12,791,885 (2005: S$8,453,827)}

^{AMOUNTS DUE TO BANKS ROSE BY 33.41% TO S$36,949,810 (2005: S$27,695,857), AND CONSIST OF THE FOLLOWING:}

^{-BANK OVERDRAFTS - 2006: - (2005: S$2,600,619)}

^{-BANK LOANS - 2006: S$36,426,000 (2005: S$23,000,000)}

^{-CURRENT PORTION OF LONG TERM LOANS - 2006: S$523,810 (2005: S$2,095,238)}

^{SUBJECT'S LONG TERM LIABILTIES FELL BY 1.18% TO S$7,074,141 (2005: S$7,158,952), AND CONSIST OF THE FOLLOWING:}

^{-LONG TERM BANK LOANS - 2006: - (2005: S$523,830)}

^{-OBLIGATIONS UNDER FINANCE LEASES - 2006: S$102,697 (2005: S$144,785)}

^{-DEFERRED TAX LIABILITIES - 2006: S$6,971,444 (2005: S$6,490,337)}

^{IN ALL, LEVERAGE RATIO FELL FROM 1.16 TIMES TO 0.95 TIMES AS A RESULT OF A MORE THAN PROPORTIONATE RISE IN TOTAL EQUITY AS COMPARED TO THE RISE IN TOTAL LIABILITIES.}

^LIQUIDITY:

^{IN GENERAL, SUBJECT'S LIQUIDITY SITUATION WAS PASSABLE AS SEEN FROM THE RISE IN NET WORKING CAPITAL BY 59.86% TO S$78,292,138 (2005: S$48,976,858).}

^{CURRENT RATIO ROSE TO 1.56 TIMES, UP FROM 1.39 TIMES AND QUICK RATIO IMPROVED TO 1.11 TIMES FROM 0.97 TIMES IN 2005.}

^{SIMILARLY, CASH AND CASH EQUIVALENTS ROSE SHARPLY BY 78.79% TO S$13,473,838}

^{(2005: S$7,536,155).}

^{PROFITABILITY:}

^{REVENUE POSTED AN INCREASE OF 19.21% FROM S$289,647,586 IN 2005 TO S$345,298,382 AND NET PROFIT ROSE BY 40.59% TO S$42,272,475 (2005: S$30,067,334).}

^{HENCE, NET MARGIN ROSE TO 12.24% (2005: 10.38%).}

^REVENUE:

^{-SALE OF FINISHED GOODS - 2006: S$301,325,727 (2005: S$260,748,617)}

^{-RENDERING OF SERVICES AND SALES OF PARTS - 2006: S$43,972,655 (2005: S$28,898,969)}

^{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, ITS INTEREST COVERAGE WAS HEALTHY AS SHOWN BY ITS INTEREST COVERAGE RATIO OF 39.90 TIMES}

^{(2005: 26.36 TIMES).}

^{NON-CURRENT ASSETS:}

^{THE FOLLOWING ITEMS ARE CLASSIFIED UNDER PRELIMINARY:}

^{-LOAN TO A RELATED PARTY - 2006: S$633,004 (2005: S$760,000)}

^{-DEFERRED DEVELOPMENT EXPENDITURE - 2006: S$2,037,096 (2005: S$4,072,316)}

^{NOTES TO THE FINANCIAL STATEMENTS:}

^{BANK OVERDRAFTS AND LOANS}

^{THE BANK LOANS ARE UNSECURED, REPAYABLE ON DEMAND AND BEARS EFFECTIVE INTEREST AT AN AVERAGE RATE OF 3.99% (2005: 4.61%) PER ANNUM.}

^{THE BANK OVERDRAFT WAS UNSECURED AND INTEREST WAS CHARGED ON DAILY BALANCES AT PRIME RATE.}

^{LONG TERM BANK LOANS}

^{BANK LOAN IS REPYABLE IN QUARTERLY INSTALMENTS OF $523,810 COMMENCING FROM JUNE 30, 2002 AND BEARS EFFECTIVE INTEREST AT 6.75% PER ANNUM. THE LOAN IS SECURED BY THE MORTGAGE OF THE LEASEHOLD BUILDING AND CERTAIN EQUIPMENT.}

^{CONTINGENT LIABILITIES}

^GUARANTEES

^{- GROUP - 2006: S$3,311,495 (2005: S$3,296,403)}

^{CAPITAL EXPENDITURE COMMITMENTS}

^{ESTIMATED AMOUNTS AUTHORISED AND/OR CONTRACTED FOR FUTURE CAPITAL EXPENDITURE}

^{- GROUP - 2006: S$15,262,000 (2005: S$9,000,000)}

BACKGROUND/OPERATION

^{SUBJECT WAS INCORPORATED IN THE REPUBLIC OF SINGAPORE ON 23/05/1973 AS A PRIVATE COMPANY LIMITED BY SHARES AND WAS FORMERLY KNOWN AS "LEBLOND MAKINO ASIA PTE LTD".}

^{SUBSEQUENTLY, ON 07/05/1992, SUBJECT CHANGED TO ITS PRESENT NAMESTYLE AS "MAKINO ASIA PTE LTD" AND IS TRADING AS A PRIVATE COMPANY LIMITED BY SHARES.}

^{AS AT 24/08/2007, SUBJECT HAS AN ISSUED AND PAID-UP CAPITAL OF 1,641,377 SHARES OF A VALUE OF S$13,626,377.}

^{PRINCIPAL ACTIVITIES:}

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

^{1) MANUFACTURE & REPAIR MACHINERY & MACHINE-TOOLS-METAL CUTTING TYPES (EG LATHES)}

^{2) IRON AND STEEL FOUNDRIES}

^{DURING THE FINANCIAL YEAR(S), UNDER REVIEW, THE PRINCIPAL ACTIVITIES OF THE COMPANY ARE THOSE RELATING TO MANUFACTURING AND SALE OF MACHINE TOOLS AND INVESTMENT HOLDING. THE GROUP'S PRINCIPAL ACTIVITIES ARE THE DESIGN, MANUFACTURE AND SALE OF MACHINE TOOLS.}

^{SUBJECT IS A SUBSIDIARY OF MAKINO MILLING MACHINE CO LTD, INCORPORATED IN JAPAN, WHICH IS ALSO ITS ULTIMATE HOLDING COMPANY.}

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

^{SUBJECT IS LISTED IN THE SINGAPORE LOCAL DIRECTORY UNDER THE CLASSIFICATION OF: METAL WORKING MACHINERY.}

^{SUBJECT IS GENERALLY KNOWN AS AN INDUSTRY LEADER FOR MACHINE TOOLS AND THE LARGEST MACHINE TOOL BUILDER IN SINGAPORE.}

^{SUBJECT ENLARGED ITS MARKET IN THE ASIA REGION DURING THE MID-EIGHTIES. IT FURTHER EXPANDED TO THE SOUTHERN CHINA AND INDIA IN 1991 AND 1995 RESPECTIVELY. EARLY THIS YEAR, THE PHILIPPINES SALES LIAISON OFFICE WAS ESTABLISHED.}

^{IT HAS BRANCHES AND SALES OFFICES IN INDIA, CHINA, INDONESIA, MALAYSIA, PHILIPPINES AND THAILAND.}

^{IT HAS BUSINESS PARTNERS IN MALAYSIA & HONG KONG.}

^{SUBJECT ENGAGES IN THE FOLLOWING ACTIVITIES:}

^{* MANUFACTURE OF CNC MILLING MACHINES}

^{* MANUFACTURE OF CNC VERTICAL MACHINING CENTERS}

^{* MANUFACTURE OF CNC WIRE-CUT MACHINES}

^{* MANUFACTURE OF CNC EDM MACHINES}

^{* MANUFACTURING AND REGIONAL MARKETING OF MACHINING CENTERS CNC COPY MILLING}

^{MACHINE, CNC DIGITIZER, CNC GRAPHITE MILLING MACHINE, HIGH PRECISION CONVENTIONAL}

^{MILLING MACHINE, MAKINO MACHINING COMPLEX (MMC), FMS (FLEXIBLE MANUFACTURING}

^SYSTEM),ETC.

^{* DEVELOP AND DELIVER TURNKEYS AND SYSTEMS}

^{* SPINDLE & SPINDLE ASSEMBLIES}

^{PRODUCTS OR SERVICES:}

^{* MACHINE TOOLS}

^{* PRECISION PARTS}

^{SOME EXAMPLES INCLUDE:}

^{* BORING MACHINES}

^{* BORING MACHINES: JIG}

^{* DIGITIZERS}

^{* ELECTRICAL DISCHARGE MACHINES}

^{* LATHES}

^{* LATHES: ENGINE}

^{* MACHINE TOOLS}

^{* MACHINING CENTRES}

^{* METAL WORKING MACHINES}

^{* MILLING MACHINES}

^{* MILLING MACHINES: CNC}

^{* MILLING MACHINES: COPY}

^{* MILLING MACHINES: PROFILE}

^{* MILLING MACHINES: VERTICAL}

^{* WIRE CUTTING MACHINES}

^{BUSINESS RELATIONSHIP WITH:}

^{* PREMAC TOOLS PVT. LTD. (BANGALORE, INDIA)}

^{BRAND NAMES:}

^{* LEBLOND MAKINO, LATHES}

^{* MAKINO, CNC MILLING MACHINES, EDM, WIRE-CUT, COPY & GRAPHITE MILLING MACHINES}

^{* SOFTEK, INDUSTRIAL SOFTWARE}

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

^{* SINGAPORE MANUFACTURERS' FEDERATION (SMA)}

^{* JAPANESE CHAMBER OF COMMERCE & INDUSTRY (JCCI)}

^{* MACHINE TOOL CLUB}

^AWARDS:

^{* BUSINESS HEADQUARTERS (BHQ), OPERATIONAL HEADQUARTERS (OHQ) AND MANUFACTURING}

^{HEADQUARTERS (MHQ) AWARDS - FY2001}

^{FROM THE PRIOR TELE-INTERVIEW CONDUCTED, THE FOLLOWING INFORMATION WAS REVEALED:}

^PURCHASES:

^{* TERMS OF IMPORT: 90 DAYS TERM, LETTER OF CREDITS, ETC}

^{* IMPORT COUNTRIES: UNITED STATES, EUROPE, JAPAN, ETC}

^MARKETS:

^{* TERMS SALES: 90 DAYS TERM, LETTER OF CREDITS, ETC}

^{* TERMS OF EXPORT: 90 DAYS TERM, LETTER OF CREDITS, ETC}

^{* EXPORT COUNTRIES: SOUTHEAST ASIA REGION; INDIA, MALAYSIA, CHINA, ETC}

^{NO OTHER UPDATED INFORMATION WAS GATHERED AT THE TIE OF THIS REPORT.}

^{NO. OF EMPLOYEES:}

^{* GROUP - 2006: NA (2005: 801; 2004: 592; 2002: 473; 2001: 444; 2000: 406)}

^{* COMPANY - 2006: NA (2005: NA (2004: NA; 2002: 473; 2001: 436; 2000: 393)}

^{REGISTERED AND BUSINESS ADDRESSES:}

^{2 GUL AVENUE}

^{SINGAPORE 629649}

^{DATE OF CHANGE OF ADDRESS: -}

^{- REGIONAL HEAD OFFICE CUM MANUFACTURING PLANT}

^{- OWNED PREMISE}

^WEBSITE:

^{* http://www.makino.com.sg}

^{* http://www.makino.com}

^EMAIL:

^{* makinoasia@makino.com.sg}

^{* hr@makino.com.sg}

^{* manjit@makino.com.sg}

MANAGEMENT

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

^{(1) SHUN MAKINO, A JAPANESE}

^{- BASED IN JAPAN}

^{(2) MOH CHONG TAU, A SINGAPOREAN}

^{- HOLDS NO OTHER DIRECTORSHIP IN OUR DATABASE}

^{(3) KUMBAKONAM SUBRAMANIAM SANKARAN, A SINGAPOREAN}

^{- HOLDS NO OTHER DIRECTORSHIP IN OUR DATABASE}

^{(4) FUMIYOSHI MATSUBARA, A JAPANESE}

^{- BASED IN JAPAN}

^{(5) TATSUAKI AIBA, A JAPANESE}

^{- BASED IN JAPAN}

^{(6) TSUNEO KAITO, A JAPANESE}

^{- BASED IN JAPAN}

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.

MANUFACTURING SECTOR

PAST PERFORMANCE

THE MANUFACTURING SECTOR GREW BY 18.8% COMPARED TO Q2 OF 2006, RIDING ON STRONG GROWTH FROM THE BIOMEDICAL MANUFACTURING AND TRANSPORT ENGINEERING CLUSTERS. TOTAL MANUFACTURING OUTPUT GREW BY 7.8% COMPARED TO OUTPUT IN THE SAME PERIOD LAST YEAR.

BIOMEDICAL MANUFACTURING CLUSTER REBOUNDED FROM ITS CONTRACTION IN MARCH. SPEARHEADING THE JUMP OF 98.5% IN APRIL’S OUTPUT OVER APRIL LAST YEAR WAS THE PHARMACEUTICALS SEGMENT. THE PRODUCTION OF ACTIVE PHARMACEUTICAL INGREDIENTS SHOT UP BY 120.5% THIS APRIL DUE TO THE VERY LOW OUTPUT LEVEL LAST APRIL. THE MEDICAL TECHNOLOGY SEGMENT CONTINUED TO EXPAND ITS OUTPUT OF MEDICAL DEVICES AND APPLIANCES BY 16.1%. THE GROWTH OF BOTH SEGMENTS PUSHED CUMULATIVE OUTPUT OF THE WHOLE CLUSTER UP BY 10.5% IN THE FIRST FOUR MONTHS OF THIS YEAR COMPARED TO THE SAME PERIOD IN 2006.

TRANSPORT ENGINEERING CLUSTER RECORDED ITS FOURTH CONSECUTIVE MONTHLY YEAR-ON-YEAR GROWTH IN 2007. Q2 GROWTH OF 24.4% WAS CONTRIBUTED BY ALL THREE SEGMENTS. THE MARINE & OFFSHORE SEGMENT GREW 32.0% AS SHIPYARDS QUICKENED THEIR PACE OF SHIPBUILDING, SHIP CONVERSION AND SHIP REPAIRING. THE AEROSPACE SEGMENT GREW 13.5% WITH MORE REPAIRS COMPLETED FOR COMMERCIAL AIRCRAFTS. THE LAND TRANSPORT SEGMENT GREW 38.0% WITH HIGHER PRODUCTION OF LAND VEHICLE EQUIPMENT TO MEET LOCAL AND OVERSEAS ORDERS. CUMULATIVELY, THE CLUSTER GREW 23.9% IN THE FIRST FOUR MONTHS OF 2007 COMPARED TO THE SAME PERIOD LAST YEAR.

THE ELECTRONICS CLUSTER’S OUTPUT IN Q2 INCREASED BY 7.4% COMPARED TO Q2 OF 2006, BOOSTED MAINLY BY THE 18.0% INCREASE IN THE PRODUCTION OF SEMICONDUCTORS. THE ELECTRONIC MODULES AND COMPONENTS SEGMENT GREW 5.5%. ON THE OTHER HAND, CONTRACTIONS WERE SEEN IN THE OUTPUT OF INFOCOMMS & CONSUMER ELECTRONICS (-10.1%), DATA STORAGE (-2.8%) AND COMPUTER PERIPHERALS (-0.2%). FOR THE FIRST FOUR MONTHS OF THIS YEAR, THE ELECTRONICS CLUSTER GREW CUMULATIVELY BY 3.9% COMPARED TO THE SAME PERIOD IN 2006.

THE CHEMICALS CLUSTER GREW 4.1% IN Q2 COMPARED TO LAST YEAR'S SECOND QUARTER. THE OUTPUT OF PETROLEUM ROSE 21.7% FROM A YEAR AGO WHEN OUTPUT WAS LOW ARISING FROM MAINTENANCE SHUTDOWNS IN SOME REFINERY PLANTS. THE PRODUCTION OF PETROCHEMICALS FELL SLIGHTLY BY 0.6%. THE OUTPUT OF SPECIALTY CHEMICALS SHRANK 9.6% ON ACCOUNT OF LESS OUTPUT OF EPOXY COMPOUNDS, MINERAL OIL ADDITIVES AND CHEMICAL CATALYSTS. THE CLUSTER RECORDED A CUMULATIVE GROWTH OF 1.8% IN THE FIRST FOUR MONTHS OF 2007 COMPARED TO THE SAME PERIOD LAST YEAR.

OUTPUT OF THE PRECISION ENGINEERING CLUSTER FELL BY 2.5% IN Q2 2007. THIS CAME FROM THE CONTRACTIONS OF 1.4% AND 3.2% FOR THE MACHINERY & SYSTEMS SEGMENT AND PRECISION MODULES & COMPONENTS SEGMENT RESPECTIVELY. CUMULATIVELY, THE FIRST FOUR MONTHS’ OUTPUT THIS YEAR WAS 0.9% LESS THAN THE OUTPUT IN THE SAME PERIOD OF 2006.

THE GENERAL MANUFACTURING INDUSTRIES GREW 11.3% YEAR-ON-YEAR IN Q2 2007. THE FOOD, BEVERAGES AND TOBACCO INDUSTRIES CONTRIBUTED LARGELY TO THE GROWTH WITH OUTPUT INCREASES OF 18.3%. THE MISCELLANEOUS INDUSTRIES ALSO GREW 14.9%. CUMULATIVE OUTPUT FOR THIS GROUP OF INDUSTRIES GREW 9.8% IN THE FIRST FOUR MONTHS OF THIS YEAR COMPARED TO THE SAME PERIOD IN 2006.

OUTLOOK

THE MANUFACTURING SECTOR IS MORE OPTIMISTIC IN THE NEXT SIX MONTHS ENDING SEPTEMBER 2007, COMPARED TO THE FIRST QUARTER OF THE YEAR. OVERALL, A WEIGHTED 30% OF MANUFACTURERS FORESEE AN IMPROVED OUTLOOK, WHILE 4% PREDICT DETERIORATION. THIS RESULTS IN A NET WEIGHTED BALANCE OF 26% OF MANUFACTURERS EXPECTING BUSINESS CONDITIONS TO IMPROVE, WHICH IS HIGHER THAN THE 7% RECORDED A QUARTER AGO. THE POSITIVE BUSINESS SENTIMENT IS LED BY THE ELECTRONICS CLUSTER.

BUSINESS OUTLOOK IN THE BIOMEDICAL MANUFACTURING CLUSTER REMAINS RELATIVELY STABLE FOR THE NEXT SIX MONTHS ENDING SEPTEMBER 2007, COMPARED TO THE FIRST QUARTER OF THE YEAR. IN BOTH THE PHARMACEUTICAL AND MEDICAL TECHNOLOGY SEGMENTS, OUTPUT FORECAST IS ANTICIPATED TO BE HIGHER IN THE SECOND QUARTER OF 2007, COMPARED TO THE FIRST QUARTER, IN PREPARATION FOR ORDERS AND DELIVERIES TO BE MADE IN THE SAME PERIOD.

THE TRANSPORT ENGINEERING CLUSTER REMAINS POSITIVE ABOUT BUSINESS PROSPECTS IN THE NEXT SIX MONTHS ENDING SEPTEMBER 2007, COMPARED TO LAST QUARTER. THE MARINE & OFFSHORE ENGINEERING SEGMENT REMAINS ROBUST, WITH THE MAJORITY OF SHIPYARDS ANTICIPATING HIGHER LEVELS OF REPAIRING AND CONVERSION ACTIVITIES IN SECOND QUARTER OF 2007, COMPARED WITH THE FIRST QUARTER OF THE YEAR. STRONGER PERFORMANCE IS ALSO ANTICIPATED IN THE AEROSPACE SEGMENT ON A QUARTER TO QUARTER BASIS, AS AIRCRAFT REPAIR AND SERVICING ACTIVITIES INCREASE IN LINE WITH MORE OVERSEAS ORDERS AND EXPORTS. OUTPUT IN THE LAND TRANSPORT SEGMENT IS ALSO EXPECTED TO RISE IN THE SECOND QUARTER OF THE YEAR, COMPARED WITH A QUARTER AGO, IN FULFILLMENT OF CONTRACTUAL ORDERS.

THE ELECTRONICS CLUSTER IS SIGNIFICANTLY MORE OPTIMISTIC COMPARED TO THE FIRST QUARTER OF THE YEAR. A NET WEIGHTED BALANCE OF 38% OF MANUFACTURERS EXPECTS BUSINESS CONDITIONS TO IMPROVE IN THE NEXT SIX MONTHS ENDING SEPTEMBER 2007, COMPARED TO A NET WEIGHTED BALANCE OF -1% RECORDED IN THE FIRST QUARTER. IN PARTICULAR, MANUFACTURERS IN THE COMPUTER PERIPHERALS AND INFOCOMMS AND CONSUMER ELECTRONICS SEGMENTS ARE MORE BULLISH DUE TO NEW PRODUCT INTRODUCTIONS AND AN EXPECTED PICK UP IN MARKET DEMAND FOLLOWING THE FIRST QUARTER SEASONAL LULL. CHIP MAKERS ALSO PREDICT SUSTAINED GLOBAL DEMAND OVER THE SECOND AND THIRD QUARTERS OF THE YEAR, AS EVIDENCED BY AN EXPECTED INCREASE IN EXPORT ORDERS AND SALES. PRODUCTION IN ALL SEGMENTS OF THE CLUSTER IS EXPECTED TO RISE IN THE SECOND QUARTER, OVER THE LOW LEVELS IN THE FIRST QUARTER OF 2007. IN TERMS OF EMPLOYMENT OUTLOOK, A NET WEIGHTED 24% OF THE ELECTRONICS CLUSTER IS EXPECTED TO HIRE MORE WORKERS IN THE SECOND QUARTER OF 2007, AS PRODUCTION AND SALES INCREASE.

IN THE CHEMICALS CLUSTER, A NET WEIGHTED 10% OF MANUFACTURERS EXPECT THE BUSINESS ENVIRONMENT IN THE SECTOR TO IMPROVE IN THE NEXT SIX MONTHS ENDING SEPTEMBER 2007. FIRMS IN THE SPECIALTIES AND OTHER CHEMICALS SEGMENTS ARE MORE OPTIMISTIC AS THE TREND OF SALES LEVEL DURING THE APRIL TO SEPTEMBER PERIOD IS EXPECTED TO RISE, FOLLOWING SEASONAL WEAKNESS IN THE FIRST THREE MONTHS OF 2007. OUTPUT IN ALL SEGMENTS OF THE CLUSTER IS PROJECTED TO INCREASE IN THE SECOND QUARTER OF THE YEAR, AS COMPARED TO THE FIRST. THE ONLY EXCEPTION IS IN THE PETROLEUM REFINERY SEGMENT, WHERE SOME MAINTENANCE DOWNTIME IS PLANNED DURING THIS PERIOD.

A NET WEIGHTED BALANCE OF 24% OF THE PRECISION ENGINEERING CLUSTER EXPECT AN IMPROVEMENT IN THE OPERATING ENVIRONMENT IN THE NEXT SIX MONTHS ENDING SEPTEMBER 2007, AS COMPARED TO ONLY 4% RECORDED A QUARTER AGO. ON THE PRODUCTION FRONT, A TURNAROUND FROM THE SEASONALLY WEAK FIRST QUARTER IS ALSO EXPECTED. THE MACHINERY & SYSTEMS SEGMENT FORECAST AN INCREASE IN THE OUTPUT OF INDUSTRIAL PROCESS CONTROL EQUIPMENT AND SEMICONDUCTOR ASSEMBLY AND TESTING EQUIPMENT, IN VIEW OF HIGHER ORDERS AND DELIVERIES ANTICIPATED IN THE SECOND QUARTER OF 2007. MANUFACTURERS IN THE PRECISION MODULES & COMPONENTS SEGMENT EXPECT AN INCREASE IN PRODUCTION DUE TO THE INTRODUCTION OF SOME NEW PRODUCT LINES, AND IN RESPONSE TO HIGHER ORDER LEVELS. MOREOVER, SINGAPORE'S PRECISION ENGINEERING SECTOR IS GROWING AND INCREASING ITS OUTPUT ANNUALLY AND IS EXPECTED TO GENERATE S$28 BILLION BY 2010.

EXTRACTED FROM: MINISTRY OF TRADE AND INDUSTRY, SINGAPORE

SINGAPORE DEPARTMENT OF STATISTICS

economic development board

CONTACT SINGAPORE

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.	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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