MIRA INFORM REPORT

Report Date :

27.07.2007

IDENTIFICATION DETAILS

Name :	CARDO GROUP ASIA PACIFIC PTE. LTD.
Registered Office :	^25 International Business Park, #03-51/55, German Centre, Singapore – 609916
Country :	Singapore
Financials (as on) :	31.12.2006
Date of Incorporation :	^22/08/1987
Com. Reg. No.:	^198702572Z
Legal Form :	^Pte Ltd
Line of Business :	Marketing, Distribution and Technical Support Services of Wastewater Technology, Industrial Pumps, Industrial and Automatic Doors

RATING & COMMENTS

MIRA’s Rating :

Ca

RATING		STATUS	PROPOSED CREDIT LINE
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

Status :	Moderate
Payment Behaviour :	Slow
Litigation :	Clear

Subject Company

CARDO GROUP ASIA PACIFIC PTE. LTD.

Line Of Business 

MARKETING, DISTRIBUTION AND TECHNICAL SUPPORT SERVICES OF WASTEWATER TECHNOLOGY, INDUSTRIAL PUMPS, INDUSTRIAL AND AUTOMATIC DOORS

Parent Company

ABS GROUP AB

(PERCENTAGE OF SHAREHOLDING: 100%)

Financial Elements

FY2006

COMPANY

Sales : EURO 16,839,976

Networth : EURO -1,404,087

Paid-Up Capital : EURO 44,884

Net result : EURO -1,256,727

Net Margin(%) : - 7.46

Return on Equity(%) : 89.50 (POSITIVE ROE DUE TO OFF-SET OF NEGATIVE EARNINGS AND

NEGATIVE TOTAL EQUITY)

Leverage Ratio : - 6.82 TIMES

COMPANY IDENTIFICATION

^{Subject Company : CARDO GROUP ASIA PACIFIC PTE. LTD.}

^{Former Name : ABS WASTEWATER TECHNOLOGY PTE LTD}

^{Business Address : 25 INTERNATIONAL BUSINESS PARK}

^#03-51/55

^{GERMAN CENTRE}

^{Town : SINGAPORE}

^{Postcode : 609916}

^{County : -}

^{Country : Singapore}

^{Telephone : 6569 0963/6463 3933}

^{Fax : 6462 2122}

^{ROC Number : 198702572Z}

^{Reg. Town : -}

PREVIOUS IDENTIFICATION

^{ABS WASTEWATER TECHNOLOGY PTE LTD (DATE OF CHANGE OF NAME : 28/09/2006)}

^{ABS PUMPS PTE LTD (DATE OF CHANGE OF NAME : 16/03/2005)}

^{CRAWFORD DOOR (FAR EAST) PTE LTD (DATE OF CHANGE OF NAME : 10/03/1997)}

SUMMARY

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

^{Legal Form : Pte Ltd}

^{Date Inc. : 22/08/1987}

^{Previous Legal Form : -}

^{Summary year : 31/12/2006}

^{Sales : 16,839,976}

^{Net Worth : -1,404,087}

^{Paid-Up Capital : 44,884}

^{Employees : -}

^{Net Result : -1,256,727}

^{Auditor : ERNST & YOUNG}

REFERENCES

^{Litigation : No}

^{Company status : TRADING}

^{Started : 22/08/1987}

PRINCIPAL(S)

^{ULF RICHARD TONHARDT 45574699 Director}

DIRECTOR(S)

^{KARL FREDRIK PETER GROTH 10384341 Director}

^{Appointed on : 17/03/2005}

^{Street : POPPELVAGEN 20}

^{Town : FALSTERBO}

^{Postcode : 239 42}

^{Country : Sweden}

^{ULF RICHARD TONHARDT 45574699 Director}

^{Appointed on : 26/08/2002}

^{Street : 833 BUKIT TIMAH ROAD}

^#02-01

^ROYALVILLE

^{Town : SINGAPORE}

^{Postcode : 279887}

^{Country : Singapore}

^{ONG LIAN KIN ESTHER S1126307J Company Secretary}

^{Appointed on : 01/07/2003}

^{Street : 5 JALAN ISHAK}

^{Town : SINGAPORE}

^{Postcode : 419321}

^{Country : Singapore}

^{YONG WONG JIN S1484595Z Director}

^{Appointed on : 27/08/2004}

^{Street : 408 HOUGANG AVENUE 10}

^#13-1076

^{Town : SINGAPORE}

^{Postcode : 530408}

^{Country : Singapore}

FORMER DIRECTOR(S)

^{QUEK SOK CHER NANCY S0010806E}

^{KOH CHIN HO S0081880A}

^{KRISTENSSON ROYNE EVERT DP117822}

^{BENGTSOON BENGT AKE 98588255}

^{DAN CHRISTER DREJENSTAM 43504498}

ACTIVITY (IES)

^{BUILDING CONSTRUCTION CONSULTANTS Code: 2890}

^{PUMPS - MFRS And DISTRS Code: 17760}

^{BASED ON ACRA'S RECORD AS AT 20/07/2007}

^{1) MANUFACTURE OF PUMPS, COMPRESSORS, TAPS AND VALVES; MANUFACTURE AND ASSEMBLY OF PUMPS AND RELATED EQUIPMENT & SERVICES & AUTOMATION DOORS}

CHARGES

No Charges On Premises/Property In Our Database

PREMISES/PROPERTY INFORMATIONS

No Premises/Property Information In Our Databases

BANKERS

^{SKANDINAVISKA ENSKILDA BANKEN AB (PUBL)}

^{SVENSKA HANDELSBANKEN AB}

SHAREHOLDERS(S)

^{ABS GROUP AB 100,002 Company}

^{Street : BOX 2056, 431 02}

^{Town : MOLNDAL}

^{Postcode : -}

^{Country : Sweden}

FORMER SHAREHOLDER(S)

^{CRAWFORD DOOR AB 100,002}

^{ABS PUMPS INTERNATIONAL AB 100,002}

HOLDING COMPANY

^{ABS GROUP AB UF40097D % : 100}

SUBSIDIARY (IES)

No Participation In Our Database

PAYMENT HISTORY AND EXPERIENCES

^{Trade Morality : AVERAGE}

^{Liquidity : LACKING}

^{Payments : SLOW}

^{Trend : LEVEL}

^{Financial Situation : BAD}

LITIGATION(S)

No Litigation In Our Database

FINANCIAL ELEMENTS

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

^{Audit Qualification: "MILD" UNCERTAINTIES "MILD" UNCERTAINTIES}

^{Date Account Lodged: 18/07/2007}

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

^{Number of weeks: 52 52}

^{Consolidation Code: COMPANY COMPANY}

^{--- ASSETS ---}

^{Tangible Fixed Assets: 204,905 223,888}

^{Total Fixed Assets: 204,905 223,888}

^{Inventories: 732,146 502,409}

^{Receivables: 5,103,547 2,418,294}

^{Cash, Banks, Securities: 732,504 673,101}

^{Other current assets: 1,392,396 1,287,312}

^{Total Current Assets: 7,960,593 4,881,116}

^{TOTAL ASSETS: 8,165,498 5,105,004}

^{--- LIABILITIES ---}

^{Equity capital: 44,884 44,884}

^{Profit & loss Account: -1,448,971 -192,244}

^{Total Equity: -1,404,087 -147,360}

^{Trade Creditors: 6,019,969 3,056,764}

^{Advanced payments: 250,007 197,853}

^{Due to Bank: 1,584,000 766,244}

^{Provisions: 231,749 154,167}

^{Other Short term Liab.: 232,197 350,949}

^{Prepay. & Def. charges: 1,251,663 726,387}

^{Total short term Liab.: 9,569,585 5,252,364}

^{TOTAL LIABILITIES: 9,569,585 5,252,364}

^{PROFIT & LOSS ACCOUNT}

^{Net Sales 16,839,976 13,711,177}

^{Result of ordinary operations -1,204,908 -205,942}

^{NET RESULT BEFORE TAX: -1,256,727 -220,348}

^{Net income/loss year: -1,256,727 -220,348}

^{Interest Paid: 51,819 14,406}

^{Depreciation: 92,013 80,937}

^{Directors Emoluments: 543,595 404,765}

^{Wages and Salaries: 2,489,175 1,546,665}

^{Financial Income: 9,129 9,489}

RATIOS

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

^{Net result / Turnover(%): -0.07 -0.02}

^{Stock / Turnover(%): 0.04 0.04}

^{Net Margin(%): -7.46 -1.61}

^{Return on Equity(%): 89.50 149.53}

^{Return on Assets(%): -15.39 -4.32}

^{Net Working capital: -1608992.00 -371248.00}

^{Cash Ratio: 0.08 0.13}

^{Quick Ratio: 0.61 0.59}

^{Current ratio: 0.83 0.93}

^{Receivables Turnover: 109.10 63.49}

^{Leverage Ratio: -6.82 -35.64}

^{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 COMPANY WAS DEEMED TO BE LIMITED IN VIEW OF THE FOLLOWING:}

^{NET WORTH:}

^{THE BALANCE SHEET WAS INADEQUATE WITH CAPITAL DEFICIENCY OF EURO 1,404,087 (2005: EURO -147,360). THIS WAS ATTRIBUTABLE TO HIGHER RETAINED LOSSES BROUGHT FORWARD OF EURO 1,448,971 (2005: EURO -192,244).}

^LEVERAGE:

^{IN THE SHORT TERM, THE LEVERAGE RATIO REMAINED UNFAVOURABLE AT -6.82 TIMES (2005: -35.64 TIMES), INDICATING THAT THE COMPANY'S TOTAL LIABILITIES WERE SUBSTANTIAL IN RELATION TO ITS TOTAL EQUITY.}

^{TERM LOANS OF EURO 1,584,000 (2005: EURO 766,244) ARE SECURED BY A CORPORATE GUARANTEE ISSUED BY THE IMMEDIATE HOLDING COMPANY, CARDO PUMP AB.}

^LIQUIDITY:

^{THE OVERALL LIQUIDITY OF THE COMPANY WAS UNHEALTHY. BOTH THE QUICK AND CURRENT RATIOS WERE LACKING AT 0.61 TIMES (2005: 0.59 TIMES) AND 0.83 TIMES (2005: 0.93 TIMES) RESPECTIVELY.}

^{THIS WAS IN TANDEM WITH THE NET WORKING CAPITAL, WHICH REGISTERED UNFAVOURABLY AT EURO -1,608,992 (2005: EURO -1,608,992).}

^{PROFITABILITY:}

^{REVENUE FOR FY2006 IMPROVED BY 22.82%, AMOUNTING TO EURO 16,839,976 (2005: EURO 13,711,177). HOWEVER, NET LOSSES INCURRED WENT UP NOTABLY TO EURO 1,256,727 (2005: EURO -220,348).}

^{THUS, NET MARGIN STOOD ADVERSELY AT -7.46% (2005: -1.61%).}

^{DEBT SERVICING:}

^{DEBT SERVICING PROBLEMS WERE ANTICIPATED IN VIEW OF THE CAPITAL DEFICIENCY, UNHEALTHY LIQUIDITY AND IF TRADE RECEIVABLES WERE NON FORTHCOMING.}

^{AVERAGE COLLECTION PERIOD LENGTHENED TO 109 DAYS (2005: 63 DAYS).}

^{NOTES TO THE FINANCIAL STATEMENTS:}

^{FUNDAMENTAL ACCOUNTING CONCEPT}

^{THE FINANCIAL STATEMENTS HAVE BEEN PREPARED ON A GOING CONCERN BASIS, NOTWITHSTANDING THE DEFICIENCY IN NET ASSETS, ON THE STRENGTH OF THE ASSURANCE BY THE IMMEDIATE HOLDING COMPANY THAT IT WILL CONTINUE TO PROVIDE FINANCIAL SUPPORT TO ENABLE THE COMPANY TO CONTINUE ITS BUSINESS AND TO MEET ITS LIABILITIES AS AND WHEN DUE FOR THE NEXT TWELVE MONTHS.}

BACKGROUND/OPERATION

^{THE COMPANY WAS INCORPORATED IN THE REPUBLIC OF SINGAPORE ON 22/08/1987 AS A LIMITED PRIVATE COMPANY AND WAS TRADING UNDER ITS FORMER NAMESTYLE AS "CRAWFORD DOOR (FAR EAST) PTE LTD".}

^{ON 10/03/1997, SUBJECT CHANGED ITS NAMESTYLE TO "ABS PUMPS PTE LTD".}

^{ON 16/03/2005, SUBJECT CHANGED ITS NAMESTYLE TO "ABS WASTEWATER TECHNOLOGY PTE. LTD." SUBSEQUENTLY ON 28/09/2006, SUBJECT AGAIN CHANGED TO ITS PRESENT NAMESTYLE OF "CARDO GROUP ASIA PACIFIC PTE. LTD.".}

^{AS AT 20/07/2007, SUBJECT HAS AN ISSUED AND PAID-UP CAPITAL OF 100,002 SHARES OF A VALUE OF S$100,002.}

^{PRINCIPAL ACTIVITIES:}

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

^{1) MANUFACTURE OF PUMPS, COMPRESSORS, TAPS AND VALVES; MANUFACTURE AND ASSEMBLY OF PUMPS AND RELATED EQUIPMENT & SERVICES}

^{2) INSTALLATION OF DOORS, GATES, GRILLES AND WINDOWS; MARKETING, DISTRIBUTION, SALES, SERVICE & REPAIR OF INDUSTRIAL & AUTOMATION DOORS}

^{DURING THE FINANCIAL YEAR(S), UNDER REVIEW, SUBJECT'S PRINCIPAL ACTIVITIES ARE THOSE RELATING TO THE MARKETING, DISTRIBUTION AND TECHNICAL SUPPORT SERVICES OF WASTEWATER TECHNOLOGY, INDUSTRIAL PUMPS, INDUSTRIAL AND AUTOMATIC DOORS.}

^{ITS IMMEDIATE AND ULTIMATE HOLDING COMPANIES ARE CARDO PUMP AB AND CARDO AB RESPECTIVELY, BOTH OF WHICH ARE INCORPORATED IN SWEDEN.}

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

^{SUBJECT IS LISTED IN THE SINGAPORE LOCAL DIRECTORY UNDER THE CLASSIFICATION OF: PUMPS - MANUFACTURERS AND DISTRIBUTORS.}

^{SUBJECT ENGAGES IN THE FOLLOWING ACTIVITY:}

^{* PROVIDE SALES AND TECHNICAL SUPPORT TO THE VARIOUS AGENTS IN THE ASIA PACIFIC}

^PRODUCTS:

^{* WASTEWATER PUMPS}

^{* MIXERS & AGITATORS}

^{* AERATION SYSTEMS}

^{* CONTROL & MONITORING EQUIPMENT}

^{* SMALL PUMPS & LIFTING STATIONS}

^{* DEWATERING PUMPS}

^{* PROCESS PUMPS}

^{* OTHERS}

^{NO OTHER TRADE INFORMATION WAS MADE AVAILABLE ON 26/07/2007 AS A TELE-INTERVIEW REQUEST WAS NOT GRANTED.}

^{REGISTERED AND BUSINESS ADDRESS:}

^{25 INTERNATIONAL BUSINESS PARK}

^#03-51/55

^{GERMAN CENTRE}

^{SINGAPORE 609916}

^{DATE OF CHANGE OF ADDRESS: 16/10/2004}

^WEBSITE:

^{* http://www.absgroup.com/en}

^EMAIL:

^{* info-ap@abspumps.com.sg}

MANAGEMENT

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

^{1) KARL FREDRIK PETER GROTH, A SWEDISH}

^{- BASED IN SWEDEN}

^{2) ULF RICHARD TONHARDT, A SWEDISH}

^{- BASED IN SINGAPORE}

^{3) YONG WONG JIN, A SINGAPOREAN}

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

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/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%)

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions