MIRA INFORM REPORT

Report Date :

11.12.2007

IDENTIFICATION DETAILS

Name :	SOLECTRON TECHNOLOGY SINGAPORE PTE LTD
Registered Office :	^12 Kallang Way, Htl Building, Singapore - 349216
Country :	^Singapore
Financials (as on) :	31.08.2006
Date of Incorporation :	^23/03/1981
Com. Reg. No.:	^198101202H
Legal Form :	^Pte Ltd
Line of Business :	Manufacturers in the Computer, Telecommunication and related Electronic Industries

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

SOLECTRON TECHNOLOGY SINGAPORE PTE LTD

Line Of Business 

MANUFACTURERS IN THE COMPUTER, TELECOMMMINCATION AND RELATED ELECTRONIC INDUSTRIES

Parent Company

SOLECTRON SINGAPORE HOLDINGS PTE

(PERCENTAGE OF SHAREHOLDING: 100%)

Financial Elements

FY2006

COMPANY

Sales : US$534,985,000

Networth : US$643,467,000

Paid-Up Capital : US$455,488,000

Net result : US$58,971,000

Net Margin(%) : 11.02

Return on Equity(%) : 9.16

Leverage Ratio : 0.16

Rating

Credit Requested : USD200,000 TERM: 0/A 75 DAYS

Credit Rating : MINIMAL RISK

Credit Opinion : RECOMMEND ON USD200,000 TERM: 0/A 75 DAYS

COMPANY IDENTIFICATION

^{Subject Company : SOLECTRON TECHNOLOGY SINGAPORE PTE LTD}

^{Former Name : NATSTEEL ELECTRONICS LTD}

^{Business Address: 12 KALLANG WAY}

^{HTL BUILDING}

^{Town: SINGAPORE}

^{Postcode: 349216}

^{Country: Singapore}

^{Telephone: 68411888/ 68438992}

^{Fax: 6842 3738}

^{ROC Number: 198101202H}

^{Reg. Town:}

PREVIOUS IDENTIFICATION

^{NATSTEEL ELECTRONICS LTD DATE OF CHANGE: 19/03/2001}

SUMMARY

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

^{Legal Form: Pte Ltd}

^{Date Inc.: 23/03/1981}

^{Summary year : 31/08/2006}

^{Sales: 534,985,000}

^{Networth : 643,467,000}

^{Capital: 52,736,000}

^{Paid-Up Capital: 455,488,000}

^Employees:

^{Net result : 58,971,000}

^{Share value:}

^{AUDITOR: KPMG}

REFERENCES

^{Credit Requested : USD200,000 TERM: 0/A 75 DAYS}

^{Credit Opinion : RECOMMEND ON USD200,000}

^{TERM : 0/A 75 DAYS}

^{Credit Rating : MINIMAL RISK}

^{Litigation : Yes}

^{Company status : TRADING}

^{Started : 23/03/1981}

PRINCIPAL(S)

^{TAN BEE GEOK SAMANTHA S1667758B Director}

DIRECTOR(S)

^{ANTHONY ANNE CATHERINE S1347717E Company Secretary}

^{Appointed on : 26/06/2007}

^{Street : 8 LORONG 29 GEYLANG}

^#07-06

^{Town: SINGAPORE}

^{Postcode: 388064}

^{Country: Singapore}

^{MANNY MARIMUTHU A10700030 Director}

^{Appointed on : 01/10/2007}

^{Street : NO. 6 LOT 32,}

^{PERSIARAN KUDALARI, COUNTRY HEIGHT}

^SKAJANG

^{Town: SELANGOR}

^{Postcode: 43000}

^{Country: Malaysia}

^{TAN BEE GEOK SAMANTHA S1667758B Director}

^{Appointed on : 01/10/2007}

^{Street : 17 CHWEE CHIAN VIEW}

^{CHWEE CHIAN VIEW}

^{Town: SINGAPORE}

^{Postcode: 119700}

^{Country: Singapore}

^{LIEW JIN YANG BERNARD S1683520Z Director}

^{Appointed on : 01/10/2007}

^{Street : 23 PALM DRIVE}

^{Town: SINGAPORE}

^{Postcode: 456507}

^{Country: Singapore}

FORMER DIRECTOR(S)

^{THAI CHEE KEN S1144224B}

^{CHAY YEE MENG S1194076E}

^{LEE SUET FERN S1625938A}

^{LIN CHIEN S2196728I}

^{CHU HIU TUNG S2221559J}

^{KUK HUN YI 108673}

^{SUSAN SAN WANG 054670997}

^{SAEED ZOHOURI 056371045}

^{TANG HEAM HONG A10690234}

^{YAP KHEOK JOO S0043186I}

^{WARREN JAMES LIGAN 701176049}

^{JASMINE OH PECK LI S1764038J}

^{WONG KENG PHENG S2690912J}

^{TAN SHIUH-SYN CLAIRE S7340734F}

^{TIONG CHI SIENG S2506983H}

ACTIVITY(IES)

^{COMPUTERS Code:5100}

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

^{METAL STAMPING Code:13920}

^{BASED ON ACRA'S RECORD AS AT 06/12/2007}

^{(1) WHOLESALE OF COMPUTER ACCESSORIES (EG DISKETTES, COMPUTER CARDS), SUB CONTRACT MANUFACTURER OF PCBA & COMPUTER ACCESSORIES MANUFACTURE AND TRADE IN METAL STAMPED PARTS TOOLS AND DIES AND OTHER RELATED PARTS ELEC}

CHARGES

No Charges on Premises/Property Information In Our Databases

PREMISES/PROPERTY INFORMATIONS

^{Date : 17/08/2007}

^{Tax rate : 10}

^{Site Address : 12 KALLANG WAY}

^{HTL BUILDING}

^{Town : SINGAPORE}

^{Postcode : 349216}

^{Country : Singapore}

^{Annual Value : 1,110,000}

* 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% (I.E INDUSTRIAL AND COMMERCIAL PROPERTY).

BANKERS

^{CITIBANK NA}

^{DEUTSCHE BANK AG LONDON}

^{ING ASIA PRIVATE BANK LTD}

^{STANDARD CHARTERED BANK}

^{DBS BANK LTD.}

ASSOCIATED COMPANY(IES)

^{SOLECTRON K.K. JAPAN Japan}

SHAREHOLDERS(S)

^{SOLECTRON SINGAPORE HOLDINGS PTE 509,482,973 Company}

^{Street : 1 TEMASEK AVENUE}

^#27-01

^{MILLENIA TOWER}

^{Town: SINGAPORE}

^{Postcode: 039192}

^{Country: Singapore}

FORMER SHAREHOLDER(S)

^{RAFFLES NOMINEES PTE LTD 76,475,906}

^{HSBC (SINGAPORE) NOMINEES PTE LTD 29,496,396}

^{OCBC NOMINEES SINGAPORE PTE LTD 16,598,500}

^{NATSTEEL LTD 146,140,001}

^{OVERSEAS UNION BANK NOMINEES (PTE) 882,000}

^{UNITED OVERSEAS BANK NOMINEES 11,774,000}

^{DBS NOMINEES (PTE) LTD 83,807,563}

^{TOKYO-MITSUBISHI INTERNATIONAL (S) 2,198,100}

^{PRUDENTIAL ASSURANCE COMPANY 1,383,000}

^{CITIBANK NOMINEES S'PORE PTE LTD 21,808,172}

^{DB NOMINEES (SINGAPORE) PTE LTD 5,509,530}

^{PHILLIP SECURITIES PTE LTD 1,442,000}

^{CHAY YEE MENG 1,967,357}

^{CHU HIU TUNG 5,929,696}

^{LIN CHIEN 4,803,326}

^{NG BAN HOCK 4,783,696}

^{LIM ENG CHIOW 1,920,696}

^{NTUC INCOME INSURANCE CO-OPERATIVE 1,264,000}

^{PRUDENTIAL ASSURANCE COMPANY SINGAP 929,000}

HOLDING COMPANY

^{SOLECTRON SINGAPORE HOLDINGS PTE 200010243H % : 100}

SUBSIDIARY(IES)

^{SOLECTRON (SHANGHAI) TECHNOLOGY CO., LTD}

^{SOLECTRON (SHENZHEN) TECHNOLOGY CO., LTD}

^{SOLECTRON PHILIPPINES INC}

PAYMENT HISTORY AND EXPERIENCES

^{Trade Morality: AVERAGE}

^{Liquidity : ABUNDANT}

^{Payments : REGULAR}

^{Trend : UPWARD}

^{Financial Situation: GOOD}

LITIGATION(S)

^{Type Of Case: Magistrate Court - W/S}

^{Case Number: MCS00854/2001}

Defendant SOLECTRON TECHNOLOGY SINGAPORE ROC # : 198101202H

FINANCIAL ELEMENTS

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

^{Date Account Lodged: 09/03/2007}

^{Balance Sheet Date: 31/08/2006 31/08/2005}

^{Number of weeks: 52 52}

^{Consolidation Code: COMPANY COMPANY}

^{--- ASSETS ---}

^{Preliminary Exp}

^{Tangible Fixed Assets: 31,452,000 16,811,000}

^{Investments 221,867,000 141,462,000}

^{Total Fixed Assets: 253,319,000 158,273,000}

^{Inventories: 70,122,000 43,722,000}

^{Receivables: 100,404,000 83,536,000}

^{Cash,Banks, Securitis: 27,340,000 121,986,000}

^{Other current assets: 296,968,000 267,066,000}

^{Total Current Assets: 494,834,000 516,310,000}

^{TOTAL ASSETS: 748,153,000 674,583,000}

^{--- LIABILITIES ---}

^{Equity capital: 455,488,000 33,600,000}

^{Profit & lost Account: 187,979,000 129,008,000}

^{Surplus equity: 421,888,000}

^{Total Equity: 643,467,000 584,496,000}

^{L/T deffered taxes: 758,000 221,000}

^{Other long term Liab.: 1,517,000 -}

^{Total L/T Liabilities: 2,275,000 221,000}

^{Trade Creditors: 76,702,000 52,082,000}

^{Prepay. & Def. charges: 9,339,000 8,111,000}

^{Provisions: 3,523,000 4,243,000}

^{Other Short term Liab.: 12,847,000 25,430,000}

^{Total short term Liab.: 102,411,000 89,866,000}

^{TOTAL LIABILITIES: 104,686,000 90,087,000}

^{PROFIT & LOSS ACCOUNT}

^{Net Sales 534,985,000 379,684,000}

^{Purchases,Sces & Other Goods: 472,560,000 352,982,000}

^{Gross Profit: 62,425,000 26,702,000}

^{Result of ordinary operations 44,695,000 22,048,000}

^{NET RESULT BEFORE TAX: 58,961,000 22,048,000}

^{Tax : -10,000 48,000}

^{Net income/loss year: 58,971,000 22,000,000}

^{Depreciation: 7,624,000 5,491,000}

^{Dividends: - 38,000,000}

^{Wages and Salaries: 30,697,000 25,713,000}

^{Financial Income: 2,719,000 2,338,000}

RATIOS

^{31/08/2006 31/08/2005}

^{Net result / Turnover(%): 0.11 0.06}

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

^{Net Margin(%): 11.02 5.79}

^{Return on Equity(%): 9.16 3.76}

^{Return on Assets(%): 7.88 3.26}

^{Dividends Coverage: - 0.58}

^{Net Working capital: 392423000.00 426444000.00}

^{Cash Ratio: 0.27 1.36}

^{Quick Ratio: 1.25 2.29}

^{Current ratio: 4.83 5.75}

^{Receivables Turnover: 67.56 79.21}

^{Leverage Ratio: 0.16 0.15}

^{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)/1000}

^{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 10.09% FROM US$584,496,000 IN FY 2005 TO US$643,467,000 IN FY 2006. THIS WAS DUE TO HIGHER ACCUMULATED PROFIT OF US$187,979,000 (2005: US$129,008,000); A RISE OF 45.71% FROM THE PRIOR FINANCIAL YEAR.}

^LEVERAGE:

^{IN THE SHORT-TERM, SUBJECT WAS LARGELY FINANCED BY TRADE CREDITORS WHICH MADE UP 74.89% (2005: 57.95%) OF THE TOTAL CURRENT LIABILITIES AND AMOUNTED TO US$76,702,000 (2005: US$52,082,000). THE BREAKDOWN IS AS FOLLOWS:}

^{-TRADE PAYABLE- 2006: US$70,296,000 (2005: US$47,765,000)}

^{-DUE TO ULTIMATE HOLDING COMPANY- 2006: US$1,070,000 (2005: US$2,031,000)}

^{-DUE TO SUBSIDIARIES- 2006: US$41,000 (2005: US$44,000)}

^{-DUE TO RELATED CORPORATIONS- 2006: US$5,295,000 (2005: US$2,242,000)}

^{IN THE LONG-TERM, SUBJECT WAS LARGELY FINANCED BY DEFERRED REVENUE WHICH AMOUNTED TO S$1,517,000 (2005: NIL)}

^{IN ALL, LEVERAGE RATIO ROSE MARGINALLY FROM 0.15 TIMES IN FY 2005 TO 0.16 TIMES AS A RESULT OF A GREATER RELATIVE RISE IN TOTAL LIABILITIES THAN TOTAL EQUITY.}

^LIQUIDITY:

^{IN GENERAL, SUBJECT'S LIQUIDITY SITUATION WAS ADEQUATE AS SEEN FROM THE NET WORKING CAPITAL AND LIQUIDITY RATIOS. CURRENT RATIO FELL TO 4.83 TIMES, FROM 5.75 TIMES AND QUICK RATIO FELL TO 1.25 TIMES FROM 2.29 TIMES IN FY 2005.}

^{NET WORKING CAPITAL DECLINE BY 7.97% FROM US$426,444,000 IN FY 2005 TO US$392,423,000.}

^{PROFITABILITY:}

^{REVENUE POSTED AN INCREASE OF 40.90% FROM US$379,684,000 IN FY 2005 TO US$534,985,000 NET PROFIT ROSE BY 1.68 TIMES TO US$58,971,000 (2005: US$22,000,000). HENCE, NET MARGIN FELL TO 2.19% (2005: 2.66%).}

^REVENUE:

^{-SALE OF GOODS- 2006: US$508,117,000 (2005: US$358,754,000)}

^{-PROVISION OF SERVICES - ASIA SERVICE REGIONAL FEE- 2006: US$7,610,000 (2005: NIL)}

^{-PROVISION OF OTHER SERVICES- 2006: US$19,258,000 (2005: US$20,930,000)}

^{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 FOR THE FINANCIAL YEARS UNDER REVIEW.}

^{NOTES TO THE FINANCIAL STATEMENTS:}

^{CONTINGENT LIABILITIES:}

^{AS AT 31 AUGUST 2006, THERE WERE CONTINGENT LIABILITIES IN RESPECT OF THE FOLLOWING:}

^{(A) UNSECURED GUARANTEES GIVEN TO BANKS IN REPSECT OF BANAK FACILIITES EXTENDED TO THRID PARTIES AMOUNTING TO US$717,170 AND}

^{(B) UNSECURED GUARANTEE GIVEN TO THIRD PARTIES AMOUNTING TO US$808,409; AND}

^{(C) UNSECURED GUARANTEES GIVEN TO ABBEY CAPITAL REAL ESTATE PTY LTD ON BEHALF OF A RELATED CORPORATION, SOLECTRON AUSTRALIA LTD, IN RESPECT OF A LEASE GUARANTEE AMOUNTING TO US$600,306.}

BACKGROUND/OPERATION

^{THE COMPANY WAS INCORPORATED IN THE REPUBLIC OF SINGAPORE ON 23/03/1981 AS A LIMITED PRIVATE COMPANY AND IS TRADING UNDER ITS NAMESTYLE AS "NATSTEEL ELECTRONICS PTE LTD".}

^{SUBSEQUENTLY, THE COMPANY CHANGED TO ITS NAMESTYLE AS "NATSTEEL ELECTRONICS LTD".}

^{SUBSEQUENTLY ON 19/03/2001, THE COMPANY CHANGED TO ITS PRESENT NAMESTYLE AS "SOLECTRON TECHNOLOGY SINGAPORE PTE LTD".}

^{AS AT 06/12/2007, THE COMPANY HAS ISSUED AND PAID-UP CAPITAL OF 509,482,973 SHARES OF A VALUE OF S$759,325,297.30.}

^{PRINCIPAL ACTIVITIES:}

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

^{(1) WHOLESALE OF COMPUTER ACCESSORIES (EG DISKETTES, COMPUTER CARDS), SUB CONTRACT MANUFACTURER OF PCBA & COMPUTER ACCESSORIES}

^{(2) MANUFACTURING OF ELECTRICAL HOUSEHOLD APPLIANCES (EG FRIDGE, HOT PLATES, TOASTERS); MANUFACTURE AND TRADE IN METAL STAMPED PARTS TOOLS AND DIES AND OTHER RELATED PARTS ELEC}

^{DURING THE FINANCIAL YEAR UNDER REVIEW, THE PRINCIPAL ACTIVITIES OF THE COMPANY CONSIST OF CONTRACT MANUFACTURING FOR ORIGINAL EQUIPMENT MANUFACTURERS IN THE COMPUTER, TELECOMMMINCATION AND RELATED ELECTRONIC INDUSTRIES AND THE PROVISION OF PRE-MANUFACTURING AND POST-MANUFACTURING SERVICES SUCH AS DESIGN, PROTOTYPING, TESTING, DISTRIBUTION, LOGISTICS AND OTHER SUPPORT SERVICES.}

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

^{BACKGROUND OF SOLECTRON GROUP:}

^{SOLECTRON PROVIDES FULLY INTEGRATED OUTSOURCING SOLUTIONS TO THE ELECTRONICS INDUSTRY - FROM PRODUCT DESIGN TO MANUFACTURING TO END-TO-LIFE. IT EMPLOYS MORE THAN 20,000 ASSOCIATES AT OVER 20 MANUFACTURING FACILITIES WORLDWIDE. IT IS ALSO RECOGNISED AS THE ONLY TWO-TIME WINNER OF THE MALCOLM BALDRIGE AWARD.}

^{THE CONTRACT MANUFACTURING BUSINESS OF THE GROUP IS MANAGED ON A WORLDWIDE BASIS BUT OPERATES IN THE PRINCIPAL GEOGRAPHICAL AREAS OF SINGAPORE, AMERICA, EUROPE AND ASIA PACIFIC.}

^{SUBJECT ENGAGES IN THE FOLLOWING ACTIVITIES:}

^{* CONTRACT MANUFACTURING OF PRINTED CIRCUIT BOARD ASSEMBLY, DESIGN AN TESTING SERVICES, SYSTEM AND SUBSYSTEM ASSEMBLY OF ELECTRONICS PRODUCTS}

^SERVICES:

^{PRODUCT DESIGN & ENGINEERING}

^{* PRODUCT DESIGN}

^{* DESIGN FOR LEAN SIX SIGMA & MANUFACTURABILITY}

^{* PRODUCT LAUNCH}

^{* PRODUCT LIFE EXTENSION}

^{* SUSTAINING ENGINEERING}

^{MANUFACTURING & SUPPLIER CHAIN SERVICES}

^{* SUPPLY CHAIN SOLUTIONS}

^{* LEAN/SIX SIGMA GLOBAL NETWORK OF PLANTS}

^{* CERTIFIED & LOCALIZED SUPPLIER NETWORK}

^{FULFILLMENT & AFTERMARKET SERVICES}

^{* REPAIR}

^{* PRODUCT LOGISTICS}

^{* END-OF-LIFE SUPPORT}

^{* PROCESS LOOPS FOR DESIGN & MANUFACTURING IMPROVEMENT}

^{INFORMATION FLOWS}

^{* REAL-TIME PRODUCTION MONITORING}

^{* DESIGN COLLABORATION}

^{* STREAMLINED SUPPLIER INTERACTIONS}

^{SOME OF SUBJECT'S CLIENTS:}

^{* OLYMPUS TECHNOLOGIES SINGAPORE PTE LTD}

^{INDUSTRIES SERVED:}

^{* AUTOMOTIVE}

^{* COMPUTING & STORAGE}

^{* CONSUMER PRODUCTS}

^{* EMERGING BUSINESSES}

^{* INDUSTRIAL}

^{* MEDICAL}

^{* NETWORKING}

^{QUALITY ASSESSMENT:}

^{* ISO 9002}

^{* ISO 14001}

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

^{* ELECTRONICS INDUSTRIES TRAINING CENTRE}

^{* AMERICAN CHAMBER OF COMMERCE}

^{NEWS: FLEXTRONICS INTERNATIONAL TO BUY SOLECTRON FOR ABOUT $3.6 BILLION}

^{-SOURCE: DOW JONES NEWSWIRES}

^{DATE: 04/06/2007}

^{FLEXTRONICS INTERNATIONAL LTD. HAS AGREED TO ACQUIRE SOLECTRON CORP., THE COMPANIES SAID. SHAREHOLDERS OF SOLECTRON WILL RECEIVE TOTAL CONSIDERATION VALUED AT ABOUT $ 3.6 BILLION, BASED ON THE FRIDAY CLOSING PRICE OF SINGAPORE-BASED FLEXTRONICS' ORDINARY SHARES. THE BUYOUT PRICE REPRESENTS A PREMIUM OF 20% OVER SOLECTRON'S CLOSING PRICE OF $3.37 ON JUNE 1. STOCKHOLDERS OF MILPITAS, CALIF.-BASED SOLECTRON CAN RECEIVE 0.3450 SHARE OF FLEXTRONICS OR A CASH PAYMENT OF $3.89 FOR EACH OF THEIR SHARES, WITH A LIMIT OF 70% PEGGED ON THE AGGREGATE AMOUNT OF SOLECTRON SHARES THAT CAN BE CONVERTED INTO FLEXTRONICS STOCK.}

^{UPON COMPLETION OF THE DEAL, SOLECTRON WILL BECOME A WHOLLY OWNED SUBSIDIARY OF FLEXTRONICS, AND SOLECTRON SHAREHOLDERS WILL OWN BETWEEN 20% AND 26% OF FLEXTRONICS' OUTSTANDING SHARES. "IT COULD TAKE UP TO 18 TO 24 MONTHS TO FULLY INTEGRATE THIS ACQUISITION AND REALIZE THE FULL SYNERGY POTENTIAL, WHICH WE ESTIMATE TO BE AT LEAST $200 MILLION AFTER-TAX," SAID THOMAS SMACH, CHIEF FINANCIAL OFFICER OF FLEXTRONICS.}

^{THE DEAL "SHOULD BE AT LEAST 15% ACCRETIVE" TO FLEXTRONICS' EARNINGS PER SHARE ONCE ALL SYNERGIES ARE REALIZED, HE ADDED. A COMBINED FLEXTRONICS-SOLECTRON WOULD HAVE ANNUAL REVENUE OF MORE THAN $30 BILLION.}

^{NO OTHER TRADE INFORMATION IS AVAILABLE AS TELE-INTERVIEW WAS NOT GRANTED BY SUBJECT'S PERSONNEL ON 11/12/2007. THE IMMEDIATE AND ULTIMATE HOLDING COMPANIES ARE SOLECTRON SINGAPORE HOLDINGS PTE LTD, INCORPORATED IN SINGAPORE, AND SOLECTRON CORPORATION, INCORPORATED IN THE UNITED STATES OF AMERICA, RESPECTIVELY.}

^{NUMBER OF EMPLOYEES (31 AUGUST):}

^{* COMPANY - 2006: NOT AVAILABLE (2005: 1,444)}

^{REGISTERED AND BUSINESS ADDRESS:}

^{12 KALLANG WAY}

^{SINGAPORE 349216}

^{- OWNED PREMISE}

^{- DATE OF CHANGE OF ADDRESS: 01/06/2002}

^WEBSITE:

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

^EMAIL:

^-

MANAGEMENT

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

^{1) MANNY MARIMUTHU, A MALAYSIAN}

^{- BASED IN MALAYSIA}

^{2) SAMANTHA TAN BEE GEOK, A SINGAPOREAN}

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

^{3) BERNARD LIEW JIN YANG, A SINGAPOREAN}

^{- HOLDS OTHER DIRECTORSHIP(S) AS RECORDED IN OUR DATABASE.}

^{FLEXTRONICS TECHNOLOGY (SINGAPORE) PTE LTD}

^{FLEXTRONICS HOLDINGS (SINGAPORE) PTE LTD}

^{FLEXTRONICS PLASTICS (SINGAPORE) PTE LTD}

^{FLEXTRONICS LOGISTICS (SINGAPORE) PTE LTD}

^{FLEXTRONICS DESIGN ASIA PTE LTD}

^{FLEXTRONICS NETWORK SERVICES (SINGAPORE) PTE. LTD.}

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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