MIRA INFORM REPORT

Report Date :

27.12.2007

IDENTIFICATION DETAILS

Name :	^YAMAZAKI MAZAK SINGAPORE PTE LTD
Registered Office :	^21 Joo Koon Circle, Jurong, Singapore – 629053
Country :	^Singapore
Financials (as on) :	31.03.2007
Date of Incorporation :	^02/09/1988
Com. Reg. No.:	^198803160G
Legal Form :	^Pte Ltd
Line of Business :	^Researching, Developing, Manufacturing, Trading and Servicing of Machinery

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

^{YAMAZAKI MAZAK SINGAPORE PTE LTD}

Line Of Business 

^{RESEARCHING, DEVELOPING, MANUFACTURING, TRADING AND SERVICING OF MACHINERY}

Parent Company

^{YAMAZAKI MAZAK NEDERLAND B V}

^{(PERCENTAGE OF SHAREHOLDING: 100%)}

Financial Elements

^{FY 2007}

^COMPANY

^{Sales : S$206,480,492}

^{Networth : S$116,060,080}

^{Paid-Up Capital : S$22,200,000}

^{Net result : S$22,074,461}

^{Net Margin(%) : 10.69}

^{Return on Equity(%) : 19.02}

^{Leverage Ratio : 0.48}

COMPANY IDENTIFICATION

^{Subject Company : YAMAZAKI MAZAK SINGAPORE PTE LTD}

^{Business Address: 21 JOO KOON CIRCLE}

^JURONG

^{Town: SINGAPORE}

^{Postcode: 629053}

^{Country: Singapore}

^{Telephone: 6862 1131}

^{Fax: 6861 9281/4}

^{ROC Number: 198803160G}

^{Reg. Town:}

SUMMARY

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

^{Legal Form: Pte Ltd}

^{Date Inc.: 02/09/1988}

^{Summary year : 31/03/2007}

^{Sales: 206,480,492}

^{Networth : 116,060,080}

^Capital:

^{Paid-Up Capital: 22,200,000}

^Employees:

^{Net result : 22,074,461}

^{Share value:}

^{AUDITOR: DELOITTE & TOUCHE}

REFERENCES

^{Litigation : No}

^{Company status : TRADING}

^{Started : 02/09/1988}

PRINCIPAL(S)

^{TOSHIMITSU KITO G5679693U Managing Director}

DIRECTOR(S)

^{TOSHIMITSU KITO G5679693U Director}

^{Appointed on : 11/11/2002}

^{Street : 38 ST. THOMAS WALK}

^#08-02

^{ST. THOMAS VILLE}

^{Town: SINGAPORE}

^{Postcode: 238118}

^{Country: Singapore}

^{TOMOHISA YAMAZAKI MM3623909 Director}

^{Appointed on : 26/04/1996}

^{Street : #405 78 ISHIGANE-CHO}

^{MEITO-KU NAGOYA CITY AICHI}

^Town:

^Postcode:

^{Country: Japan}

^{TAKASHI YAMAZAKI MZ0057411 Director}

^{Appointed on : 08/04/1996}

^{Street : 5-A 29-1 GOKENYA-CHO SHOWA-KU}

^NOGOYA

^Town:

^Postcode:

^{Country: Japan}

^{CHAN LILY S2668267C Company Secretary}

^{Appointed on : 13/11/2000}

^{Street : 259A COMPASSVALE ROAD}

^#13-609

^{Town: SINGAPORE}

^{Postcode: 541259}

^{Country: Singapore}

^{NORIHIKO SHIMZU TZ0127098 Director}

^{Appointed on : 18/01/2002}

^{Street : 3-7 MATSUZUKI-CHO}

^MIZUHO-KU

^{NAGOYA CITY}

^Town:

^Postcode:

^{Country: Japan}

^{KENJI ESAKI G5746076N Director}

^{Appointed on : 01/07/2004}

^{Street : 12 STIRLING ROAD}

^#18-13

^QUEENS

^{Town: SINGAPORE}

^{Postcode: 148955}

^{Country: Singapore}

^{TOSHIMITSU KITO G5679693U Managing Director}

^{Appointed on : 02/10/2006}

^{Street : 38 ST. THOMAS WALK}

^#08-02

^{ST. THOMAS VILLE}

^{Town: SINGAPORE}

^{Postcode: 238118}

^{Country: Singapore}

FORMER DIRECTOR(S)

^{SUZUKI NORIO SK2601046}

^{NISHIMURA KAZUO H1575578}

^{MIURA YOSHIHIDE SN9148878}

^{NIWA TETSUO L2469461}

^{MASANORI TORIHARA F2340562T}

^{HIROYUKI YAMAZAKI G5668368U}

^{TAKASHI YAMAZAKI MZ0057411}

ACTIVITY(IES)

^{MACHINE TOOLS - REPAIRING And REBUILDING Code:13255}

^{MACHINERY REBUILDING And REPAIRING Code:13290}

^{METAL CUTTING MACHINES Code:13800}

^{BASED ON ACRA'S RECORD AS AT 19/12/2007}

^{1) MANUFACTURING AND REPAIR OF MACHINERY AND MACHINE-TOOLS-METAL CUTTING TYPES}

CHARGES

No Charges on Premises/Property Information In Our Databases

PREMISES/PROPERTY INFORMATIONS

^{Date : 29/12/2006}

^{Tax rate : 10}

^{Site Address : 21 JOO KOON CIRCLE}

^{SINGAPORE 629053}

^{Town : SINGAPORE}

^{Postcode : 629053}

^{Country : Singapore}

^{Annual Value : 917,000}

* 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

^{UFJ BANK LIMITED (F.K.A. THE SANWA BANK LIMITED)}

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

ASSOCIATED COMPANY(IES)

^{MAZAK (THAILAND) CO. LTD Thailand}

SHAREHOLDERS(S)

^{YAMAZAKI MAZAK NEDERLAND B V 22,200,000 Company}

^{Street : HOEKENRODE 6 1102 BR}

^ARMSTERDAM

^Town:

^Postcode:

^{Country: Netherlands}

HOLDING COMPANY

^{YAMAZAKI MAZAK NEDERLAND B V UF08307K % : 100}

SUBSIDIARY(IES)

No Participation In Our Database

PAYMENT HISTORY AND EXPERIENCES

^{Trade Morality: AVERAGE}

^{Liquidity : ABUNDANT}

^{Payments : REGULAR}

^{Trend : UPWARD}

^{Financial Situation: GOOD}

FINANCIAL ELEMENTS

^{Audit Qualification: UNQUALIFIED (CLEAN) "MILD" UNCERTAINTIES}

^{Date Account Lodged: 26/09/2007}

^{Balance Sheet Date: 31/03/2007 31/03/2006}

^{Number of weeks: 52 52}

^{Consolidation Code: COMPANY COMPANY}

^{--- ASSETS ---}

^{Preliminary Exp 465,204 194,335}

^{Intangible Fixed Assets: 51,000 51,000}

^{Tangible Fixed Assets: 27,879,413 30,929,177}

^{Investments 3,064,386 715,887}

^{Total Fixed Assets: 31,460,003 31,890,399}

^{Inventories: 30,952,911 28,510,504}

^{Receivables: 50,200,501 46,854,117}

^{Cash,Banks, Securitis: 58,419,742 35,424,770}

^{Other current assets: 926,213 1,484,584}

^{Total Current Assets: 140,499,367 112,273,975}

^{TOTAL ASSETS: 171,959,370 144,164,374}

^{--- LIABILITIES ---}

^{Equity capital: 22,200,000 22,200,000}

^{Reserves: 20,045}

^{Profit & lost Account: 93,840,035 71,765,574}

^{Total Equity: 116,060,080 93,965,574}

^{L/T deffered taxes: 224,000 224,000}

^{Other long term Liab.: 35,973}

^{Total L/T Liabilities: 224,000 259,973}

^{Trade Creditors: 35,018,913 31,912,455}

^{Prepay. & Def. charges: 6,003,142 4,429,065}

^{Short term liabilities: 34,030 38,828}

^{Advanced payments: 6,447,630 5,622,517}

^{Provisions: 8,171,575 7,935,962}

^{Total short term Liab.: 55,675,290 49,938,827}

^{TOTAL LIABILITIES: 55,899,290 50,198,800}

^{PROFIT & LOSS ACCOUNT}

^{Net Sales 206,480,492 192,250,735}

^{Purchases,Sces & Other Goods: 160,433,762 155,173,434}

^{Gross Profit: 46,046,730 37,077,301}

^{NET RESULT BEFORE TAX: 25,336,056 19,861,873}

^{Tax : 3,261,595 3,104,875}

^{Net income/loss year: 22,074,461 16,756,998}

^{Interest Paid: 7,563 9,481}

^{Depreciation: 3,647,120 3,264,876}

^{Directors Emoluments: 541,684 651,341}

^{Wages and Salaries: 12,904,735 11,248,609}

^{Financial Income: 660,724 197,031}

RATIOS

^{31/03/2007 31/03/2006}

^{Net result / Turnover(%): 0.11 0.09}

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

^{Net Margin(%): 10.69 8.72}

^{Return on Equity(%): 19.02 17.83}

^{Return on Assets(%): 12.84 11.62}

^{Net Working capital: 84824077.00 62335148.00}

^{Cash Ratio: 1.05 0.71}

^{Quick Ratio: 1.95 1.65}

^{Current ratio: 2.52 2.25}

^{Receivables Turnover: 87.52 87.74}

^{Leverage Ratio: 0.48 0.53}

^{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)/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 23.51% FROM S$93,965,574 IN FY 2006 TO S$116,060,080 IN FY 2007. THIS WAS DUE TO HIGHER ACCUMULATED PROFIT OF S$93,840,035 (2006: S$71,765,574); A RISE OF 30.76% FROM THE PRIOR FINANCIAL YEAR.}

^LEVERAGE:

^{IN THE SHORT-TERM, SUBJECT WAS LARGELY FINANCED BY TRADE CREDITORS WHICH MADE UP 62.90% (2006: 63.90%) OF THE TOTAL CURRENT LIABILITIES AND AMOUNTED TO S$35,018,913 (2006: S$31,912,455). THE BREAKDOWN IS AS FOLLOWS:}

^{-OUTSIDE PARTIES- 2007: S$10,992,127 (2006: S$10,293,112)}

^{-ULTIMATE HOLDING- 2007: S$23,099,392 (2006: S$20,303,976)}

^{-RELATED COMPANIES- 2007: S$249,487 (2006: S$327,855)}

^{-RELATED PARTIES- 2007: S$477,969 (2006: S$681,770)}

^{-ASSOCIATE- 2007: S$199,938 (2006: S$305,742)}

^{IN ALL, LEVERAGE RATIO FELL FROM 0.53 TIMES TO 0.48 TIMES DUE TO A GREATER RISE IN TOTAL EQUITY THAN TOTAL LIABILITIES.}

^LIQUIDITY:

^{IN GENERAL, SUBJECT'S LIQUIDITY SITUATION WAS ADEQUATE AS SEEN FROM THE RISE IN NET WORKING CAPITAL AND LIQUIDITY RATIOS. CURRENT RATIO ROSE TO 2.52 TIMES, FROM 2.25 TIMES AND QUICK RATIO IMPROVED TO 1.95 TIMES FROM 1.65 TIMES IN FY 2006. SIMILARLY, NET WORKING CAPITAL IMPROVED BY 36.07% FROM S$62,335,148 IN FY 2006 TO S$84,824,077.}

^{PROFITABILITY:}

^{REVENUE POSTED AN INCREASE OF 7.40% FROM S$192,250,735 IN FY 2006 TO S$206,480,492 NET PROFIT ROSE BY 31.73% TO S$22,074,461 (2006: S$16,756,998). HENCE, NET MARGIN FELL TO 10.69% (2006: 8.72%).}

^REVENUE:

^{-SALE OF GOODS- 2007: S$205,368,227 (2006: S$191,115,676)}

^{-RESEARCH AND DEVELOPMENT INCOME- 2007: S$806,700 (2006: S$803,000)}

^{-COMMISSION INCOME- 2007: S$305,656 (2006: S$332,059)}

^{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 CONSIDERING THAT ITS INTEREST EXPENSES WERE LOW AT S$7,563 IN FY 2007 (2006: S$9,481).}

^{NON-CURRENT ASSETS:}

^{THE FOLLOWING ITEMS ARE CLASSIFIED UNDER PRELIMINARY:}

^{-DEFERRED TAX ASSETS- 2007: S$465,204 (2006: S$194,335)}

BACKGROUND/OPERATION

^{THE SUBJECT WAS INCORPORATED IN THE REPUBLIC OF SINGAPORE ON 02/09/1988 AS A LIMITED PRIVATE COMPANY AND IS TRADING UNDER ITS PRESENT NAMESTYLE AS "YAMAZAKI MAZAK SINGAPORE PTE LTD".}

^{AS AT 19/12/2007, SUBJECT HAS AN ISSUED AND PAID-UP CAPITAL OF 22,200,000 SHARES OF A VALUE OF S$22,200,000.}

^{PRINCIPAL ACTIVITIES:}

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

^{1) MANUFACTURING AND REPAIR OF MACHINERY AND MACHINE-TOOLS-METAL CUTTING TYPES}

^{DURING THE FINANCIAL YEAR(S), UNDER REVIEW, SUBJECT'S PRINCIPAL ACTIVITY IS TO ENGAGE IN RESEARCHING, DEVELOPING, MANUFACTURING, TRADING AND SERVICING OF METAL WORKING MACHINES, METAL MACHINE TOOLS AND RELATED SPARE PARTS.}

^{THE COMPANY HAS A BRANCH IN INDIA WITH ITS PRINCIPAL PLACE OF BUSINESS AT ELPRO COMPOUND, CHINCHAWAD GAON, PUNE 411033, INDIA.}

^{THE COMPANY IS A WHOLLY-OWNED SUBSIDIARY OF YAMAZAKI MAZAK NETHERLAND B.V., INCORPORATED IN THE NETHERLANDS. THE COMPANY'S ULTIMATE HOLDING COMPANY IS YAMAZAKI MAZAK TRADING CORPORATION, INCORPORATED IN JAPAN. FROM THE RESEARCH CONDUCTED, THE FOLLOWING INFORMATION WAS GATHERED:}

^{SUBJECT IS LISTED IN THE SINGAPORE LOCAL DIRECTORY UNDER THE CLASSIFICATION OF: MACHINE TOOLS.}

^{SUBJECT IS INTO THE BUSINESS OF MANUFACTURING PARTS FOR MACHINERIES, MANUFACTURING CNC MACHINE TOOLS, TRADING OF MACHINE TOOLS AND DEVELOPING & DESIGNING SOFTWARE.}

^{SUBJECT PRODUCES AND EXPORTS MACHINE TOOLS TO MARKETS WORLDWIDE.}

^{SUBJECT ENGAGES IN THE FOLLOWING ACTIVITIES:}

^{* PRECISION TURNING, LASER CUTTING, METAL WORKING MACHINE TOOLS}

^BRANDS:

^{* MAZAK, MACHINE TOOLS}

^{* INTEGREX, MULTI-TASKING MACHINE TOOL}

^PURCHASES:

^{* IMPORTS: NOT PROVIDED}

^{* TERMS OF IMPORT: 30 DAY TERMS, LETTER OF CREDITS, ETC}

^{* IMPORT COUNTRIES: JAPAN, ETC}

^MARKETS:

^{* LOCAL (%): LESS THAN 50}

^{* TERMS SALES: 30 DAY TERMS, ETC}

^{* EXPORT(%): MORE THAN 50}

^{* TERMS OF EXPORT: 30 DAY TERMS, LETTER OF CREDITS, ETC}

^{* EXPORT COUNTRIES: MALAYSIA, INDIA, JAPAN, ETC}

^{SUBJECT IS A MEMBER OF FOLLOWING ENTITY:}

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

^{NO. OF EMPLOYEES (31 MARCH):}

^{* COMPANY - 2007: NOT AVAILABLE (2006: NOT AVAILABLE)}

^{REGISTERED AND BUSINESS ADDRESSES:}

^{21 JOO KOON CIRCLE}

^{SINGAPORE 629053}

^{DATE OF CHANGE OF ADDRESS: 02/12/1991}

^{- FACTORY CUM OFFICE (OWNED PREMISE)}

^WEBSITE:

^{* http://www.mazak.co.jp}

^{* http://www.mazak.com/english/flash/index.html}

^E-MAIL:

^{* NA}

MANAGEMENT

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

^{1) TOSHIMITSU KITO, A JAPANESE}

^{- BASED IN SINGAPORE}

^{2) KENJI ESAKI, A JAPANESE}

^{- BASED IN SINGAPORE}

^{3) TOMOHISA YAMAZAKI, A JAPANESE}

^{- BASED IN JAPAN}

^{4) TAKASHII YAMAZAKI, A JAPANESE}

^{- BASED IN JAPAN}

^{5) NORIHIKO SHIMIZU, 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.

OVERVIEW OF SINGAPORE

PAST PERFORMANCE

SINGAPORE’S ECONOMY GREW BY 6.1% IN QUARTER 1 OF 2007 AFTER A 6.6% GROWTH IN QUARTER 4 OF 2006. THE GROWTH MOMENTUM EASED SLIGHTLY TO 7.6% IN 1Q 2007, COMPARED WITH 7.9% A QUARTER EARLIER. GROWTH IN QUARTER 1 WAS LED BY THE FINANCIAL SERVICES AND CONSTRUCTION SECTORS. THE MANUFACTURING SECTOR CONTINUED TO EXPERIENCE A MODERATION IN GROWTH.

THE FINANCIAL SERVICES SECTOR SIGNIFICANTLY INCREASED BY 13% IN 1Q 2007 ON THE HEELS OF THE 11% GROWTH A QUARTER AGO. THE STRONG PERFORMANCE WAS ACROSS ALL MAJOR FINANCIAL SEGMENTS, PARTICULARLY IN THE CAPITAL AND MONEY MARKETS. FUND MANAGEMENT ACTIVITIES REMAINED BOUYANT, IN LINE WITH THE CONTINUED STRENGTH IN ECONOMIC CLIMATE. SIMILARLY, BANKS SAW STRONG GROWTH, BOUYED BY SUSTAINED RESILIENCE IN THE ASIA DOLLAR MARKET AS WELL AS A STEADY INCREASE IN DOMESTIC LENDING ACTIVITY.

THE CONSTRUCTION SECTOR GREW BY 9.7% IN 1Q 2007, ITS STRONGEST GROWTH IN 9 YEARS. CERTIFIED PAYMENTS INCREASE BY 9.5% IN 1Q 2007, SUPPORTED BY STRONG GROWTH IN THE PRIVATE RESIDENTIAL, COMMERCIAL AND INDUSTRIAL SEGMENTS AS WELL AS PUBLIC RESIDENTIAL SEGMENT. HOWEVER, CONTRACTS AWARDED FELL BY 11% IN 1Q 2007, DUE MAINLY TO THE DROP IN THE PRIVATE COMMERCIAL AND PUBLIC INSTITUTIONAL SEGMENTS.

MANUFACTURING SECTOR INCREASED BY 4.3% IN 1Q 2007, DOWN FROM 7.7% IN THE PREVIOUS QUARTER. BOTH BIOMEDICAL MANUFACTURING (-5.0%) AND PRECISION ENGINEERING (-0.7%) CLUSTERS SAW LOWER PRODUCTION DURING THE QUARTER. THE ELECTRONICS CLUSTER, HOWEVER, RECOVERED FROM A 4.1% CONTRACTION IN 4Q 2006 TO REGISTER AN INCREASE OF 2.6% IN 1Q 2007. THE TRANSPORT ENGINEERING CLUSTER CONTINUED TO EXPAND STRONGLY AT 23%, FOLLOWING A 25% INCREASE IN 4Q 2006.

THE WHOLESALE AND RETAIL TRADE SECTOR EXPANDED 6.7% IN 1Q 2007 AFTER A 6.9 GROWTH IN 4Q 2006. RETAIL SALES GROWTH EASED FROM 7.9% IN THE PREVIOUS QUARTER TO 6.1% IN 1Q 2007, MAINLY DUE TO A DECELERATION IN MOTOR VEHICLES SALES. EXCLUDING MOTOR VEHICLES, RETAIL SALES ROSE BY 5.9%, UP FROM 4.2% IN 4Q 2006. IN THE WHOLESALE SEGMENT, GROWTH OF NON-OIL RE-EXPORTS REMAINED FIRM AT 5.9%, SLOWER THAN 6.3% IN 4Q 2006.

THE TRANSPORT AND STORAGE SECTOR GREW 4.4% IN 1Q 2007, UP FROM 4.0% A QUARTER EARLIER. THE AIR SEGMENT SAW A SLOWDOWN DUE TO A MODERATION IN AIR PASSENGER TRAFFIC GROWTH AND A DECLINE IN AIR CARGO. STRONGER ACTIVITY WAS RECORDED IN THE SEA SEGMENT ON THE BACK OF BETTER PERFORMANCE IN SEA CARGO HANDLED AND CONTAINER THROUGHPUT.

THE HOTELS AND RESTAURANTS SECTOR REGISTERED A SLOWER GROWTH OF 4.7% IN 1Q 2007, DOWN FROM 6.1% 4Q 2006. VISITOR ARRIVALS GREW AT A MORE MODEST PACE OF 4.1% COMPARED TO 8.4% IN THE PREVIOUS QUARTER. THE INCREASE IN HOTEL ROOM REVENUE MODERATED FROM THE 21% GAIN IN 4Q 2006 TO 14% IN 1Q 2007. HOWEVER, THE AVERAGE OCCUPANCY RATE OF HOTELS REMAINED HIGH AT 87%, A 4.3% POINTS INCREASE OVER THE CORRESPONDING PERIOD LAST YEAR.

THE INFORMATION AND COMMUNICATIONS SECTOR GREW 6.6% IN 1Q 2007, UP FROM 6.0% IN THE PREVIOUS QUARTER. WHILE THE IT SEGMENT SAW SOME MODERATION IN ACTIVITIES, THE TELECOMMUNICATIONS SEGMENT PERFORMED BETTER. INTERNATIONAL TELEPHONE CALL DURATION WENT UP SHARPLY BY 19%, UP FROM 11% IN 4Q 2006. GROWTH IN THE NUMBER OF MOBILE SUBSCRIBERS AND BROADBAND SUBSCRIBERS ALSO REMAINED STRONG DURING THE QUARTER.

BUSINESS SERVICES SECTOR EXPANDED BY 6.6% IN 1Q 2007, BETTER THAN THE 5.4% POSTED IN 4Q 2006. ROBUST PERFORMANCE WAS SEEN IN THE REAL ESTATE SEGMENT ON THE BACK OF CONTINUED STRENGTH IN THE LUXURY PROPERTY MARKET. THE SECTOR WAS ALSO WELL SUPPORTED BY THE OTHER SEGMENTS, PARTICULARLY BUSINESS REPRESENTATIVE OFFICES, AND BUSINESS & MANAGEMENT CONSULTANCY ACTIVITIES.

OUTLOOK

THE ECONOMIC OUTLOOK IS GENERALLY POSITIVE BUT SOME DOWNSIDE RISKS REMAIN. THESE INCLUDE A SLOWDOWN IN THE US ECONOMY, VULNERABILITY OF OIL PRICES TO SUPPLY SHOCKS AND A DISORDERLY UNWINDING OF GLOBAL UNBALANCES. BARRING THESE UNCERTAINTIES, ECONOMIC GROWTH IS EXPECTED TO REMAIN HEALTHY IN 2007.

BUSINESS SENTIMENTS ARE GENERALLY POSITIVE IN THE FINANCIAL SERVICES INDUSTRY. BANKS AND FINANCE COMPANIES, FUND MANAGEMENT FIRMS AND INSURANCE COMPANIES EXPECT AN IMPROVEMENT IN THE BUSINESS CLIMATE IN THE COMING MONTHS.

AN OVERALL NET WEIGHTED BALANCE OF 61% OF FIRMS IN THE REAL ESTATE INDUSTRY EXPECTS BETTER BUSINESS CONDITIONS FOR THE NEXT 6 MONTHS. WITHIN THE INDUSTRY, REAL ESTATE DEVELOPERS AND AGENTS FORESEE BRISK BUSINESS ACTIVITY AHEAD.

MANUFACTURING SECTORS ARE MORE OPTIMISTIC IN THE NEXT 6 MONTHS 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 7% RECORDED A QUARTER AGO.

WHOLESALERS EXPECT TO DO WELL FOR THE NEXT 6 MONTHS, WITH A POSITIVE NET WEIGHTED BALANCE OF 17%. DEALERS OF FOOD AND BEVERAGES, TROPICAL PRODUCE, TEXTILES & LEATHER GOODS AND HOUSEHOLD ELECTRICAL APPLIANCE & EQUIPMENT ARE AMONG THOSE WHO ARE OPTIMISTIC ABOUT THE BUSINESS OUTLOOK AHEAD.

FIRMS IN THE RETAIL TRADE FORESEE BUSINESS TO BE LESS BRISK. IN PARTICULAR, DEPARTMENT STORES, SUPERMARKETS AND RETAILERS OF MOTOR VEHICLES EXPECT SLOWER BUSINESS IN THE COMING MONTHS.

WITHIN THE TRANSPORT AND STORAGE INDUSTRY, A NET WEIGHTED BALANCE OF 18% OF FIRMS FORECASTS IMPROVED BUSINESS PROSPECTS FOR THE NEXT 6 MONTHS. IN PARTICULAR, FIRMS IN THE WATER TRANSPORT AND SUPPORTING SERVICES EXPECT HIGHER LEVEL OF BUSINESS ACTIVITY.

HOTELIERS PROJECT A FAVOURABLE BUSINESS OUTLOOK, WHICH IS IN TANDEM WITH THE POSITIVE SENTIMENTS IN THE TOURISM MARKET. FOR THE CATERING TRADE INDUSTRY, BUSINESS OUTLOOK IN THE COMING MONTHS REMAINS THE SAME.

FIRMS IN THE INFORMATION AND COMMUNICATION INDUSTRY ANTICIPATES A HIGHER LEVEL OF BUSINESS ACTIVITY, WITH A POSITIVE NET WEIGHTED BALANCE OF 12%.

IN THE BUSINESS SERVICES INDUSTRY, AN OVERALL NET WEIGHTED BALANCE OF 24% OF FIRMS EXPRESSES POSITIVE SENTIMENTS. THESE INCLUDE FIRM ENGAGED IN RENTING OF CONSTRUCTION & INDUSTRIAL MACHINERY, ARCHITECTURAL & ENGINEERING, SPECIALISED DESIGN AND LABOUR RECRUITMENT SERVICES.

EXTRACTED FROM: MINISTRY OF TRADE AND INDUSTRY, SINGAPORE

SINGAPORE DEPARTMENT OF STATISTICS

CHANNELNEWS ASIA

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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