MIRA INFORM REPORT

Report Date :

04.06.2007

IDENTIFICATION DETAILS

Name :	OLYMPUS SINGAPORE PTE LTD

Registered Office :	^{491B River Valley Road, #12-01/04}^{, Valley Point Office Tower, Singapore}^{– 248373}

Country :	Singapore

Financials (as on) :	31.03.2006

Date of Incorporation :	^15/02/1989

Com. Reg. No.:	^198900566E

Legal Form :	^{Pte Ltd}

Line of Business :	Regional Sales Office and Repair Centre of Medical Equipments.

RATING & COMMENTS

MIRA’s Rating :

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

OLYMPUS SINGAPORE PTE LTD

Line Of Business

REGIONAL SALES OFFICE AND REPAIR CENTRE OF MEDICAL EQUIPMENTS (BIOSCIENCE, ENDOSCOPE AND DIAGNOSTIC SYSTEMS), AND INSPECTION MEASURING SYSTEMS COVERING THE ASEAN COUNTRIES AND INDIAN CONTINENTS

Parent Company

OLYMPUS CORPORATION

(PERCENTAGE OF SHAREHOLDING: 100%)

Financial Elements

FY 2006

CONSOLIDATED

Sales : JPY 5,043,854,577

Networth : JPY 1,231,521,207

Paid-Up Capital : JPY 21,816,631

Net result : JPY 270,856,679

Net Margin(%) : 5.37

Return on Equity(%) : 21.99

Leverage Ratio : 1.37

COMPANY IDENTIFICATION

^{Subject Company
: OLYMPUS
SINGAPORE PTE LTD}

^{Former Name : -}

^{Business
Address: 491B RIVER
VALLEY ROAD}

^#12-01/04

^{VALLEY
POINT OFFICE
TOWER}

^{Town: SINGAPORE}

^{Postcode: 248373}

^{County: -}

^{Country: Singapore}

^{Telephone: 6834
0010}

^{Fax: 6834 2438}

^{ROC Number: 198900566E}

^Reg.^Town^{: -}

SUMMARY

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

^{Legal Form: Pte
Ltd}

^{Date Inc.: 15/02/1989}

^{Previous Legal
Form: -}

^{Summary year
: 31/03/2006}

^{Sales: 5,043,854,577}

^{Networth : 1,231,521,207}

^{Capital: -}

^{Paid-Up
Capital: 21,816,631}

^{Employees: 100}

^{Net result : 270,856,679}

^{Share value: -}

^{AUDITOR : KPMG}

^{BASED ON ACRA'S AS
AT 28/05/2007}

^{NO. OF SHARES
CURRENCY AMOUNT}

^{ISSUED
ORDINARY 330,000 SGD 330,000}

^{PAID-UP
ORDINARY - SGD 330,000}

REFERENCES

^{Litigation: No}

^{Company status
: TRADING}

^{Started : 15/02/1989}

PRINCIPAL(S)

^{GOTO SUMIO G5698432T Managing Director}

DIRECTOR(S)

^{KHOO GHEE
SAIK S0169360C Company Secretary}

^{Appointed on : 28/02/1989}

^{Street : 27
JALAN MERAH SAGA}

^#02-03

^{Town: SINGAPORE}

^{Postcode: 278106}

^{Country: Singapore}

^{MORISHIMA
HARUHITO ML5445941 Director}

^{Appointed on : 04/04/1994}

^{Street : 19-7 KICHIJOJI KITAMACHI}

^{1-CHOME
MUSASHINO-CITY}

^{Town: TOKYO}

^Postcode:

^{Country: Japan}

^{GOTO SUMIO G5698432T Director}

^{Appointed on : 01/04/2003}

^{Street : 53B GRANGE ROAD}

^#14-01

^{SPRING GROVE}

^{Town: SINGAPORE}

^{Postcode: 249565}

^{Country: Singapore}

^{GOTO SUMIO G5698432T Managing Director}

^{Appointed on : 01/04/2003}

^{Street : 53B GRANGE ROAD}

^#14-01

^{SPRING GROVE}

^{Town: SINGAPORE}

^{Postcode: 249565}

^{Country: Singapore}

^{AKIMASA
WAKABAYASHI TG8484492 Director}

^{Appointed on : 01/04/2006}

^{Street : 2-1-1201
YOKAMACHI}

^HACHIOJI-SHI

^{Town: TOKYO}

^{Postcode: 192-0071}

^{Country: Japan}

FORMER DIRECTOR(S)

^{NISHIHARA
TAMASHI L7131664}

^{INATOME
HIDETOMO
F1855519X}

^{MASAMICHI
HANDA
TF1582153}

ACTIVITY(IES)

^{IMPORTERS And
EXPORTERS
Code:11760}

^{PHOTOGRAPHIC EQUIPMENT
And SUPPLIES - WHSLE And MF Code:16540}

^{BASED ON ACRA'S RECORD AS
AT 28/05/2007}

^{1. GENERAL
WHOLESALE TRADE (INCLUDING GENERAL IMPORTERS AND EXPORTERS)}

^{2. PHOTOGRAPHIC
ACTIVITIES NEC (INCLUDING MICRO-IMAGE RECORDING}

CHARGES

No Charges On Premises/Property In Our Database

PREMISES/PROPERTY INFORMATIONS

No Premises/Property Information In Our Databases

BANKERS

^{THE BANK OF
TOKYO-MITSUBISHI UFJ}

SHAREHOLDERS(S)

^{OLYMPUS
CORPORATION
330,000 Company}

^{Street : 43-2,
HATAGAYA 2-CHOME}

^SHIBUYA-KU

^{Town: TOKYO}

^Postcode:

^{Country: Japan}

FORMER SHAREHOLDER(S)

^{OLYMPUS OPTICAL CO
LTD [ JAPAN
] 330,000}

HOLDING COMPANY

^OLYMPUS^{CORPORATION UF25769N % :
100}

SUBSIDIARY(IES)

^{OLYMPUS (THAILAND)
COMPANY LIMITED}

Thailand

^{OLYMPUS MEDICAL
SYSTEMS SERVICES VIETNAM CO. LTD}

Vietnam

PAYMENT HISTORY AND EXPERIENCES

Trade Morality: AVERAGE

Liquidity : SUFFICIANT

Payments : REGULAR

Trend : LEVEL

Financial Situation: AVERAGE

LITIGATION(S)

No Litigation In Our Database

FINANCIAL ELEMENTS

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

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

^{Date
Account Lodged:
18/10/2006}

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

^{Number
of weeks:
52 52}

^{Consolidation
Code: CONSOLIDATED CONSOLIDATED}

^{--- ASSETS}

^{Preliminary
Exp 3,754,322 3,754,322}

^{Tangible
Fixed Assets: 276,311,498 293,088,155}

^{Total
Fixed Assets:
280,065,820
296,842,477}

^{Inventories: 163,796,004 147,539,556}

^{Receivables: 853,964,739 920,543,997}

^{Cash,Banks,
Securitis: 1,579,909,025 955,100,295}

^{Other
current assets:
44,190,682
45,266,382}

^{Total
Current Assets:
2,641,860,450
2,068,450,230}

^{TOTAL ASSETS: 2,921,926,270 2,365,292,707}

^{---
LIABILITIES}

^{Equity
capital:
21,816,631
21,816,631}

^{Reserves: 18,450,958 5,906,930}

^{Profit
& loss Account:
1,191,253,618
971,192,939}

^{TOTAL EQUITY: 1,231,521,207 998,916,500}

^{L/T
deffered taxes:
20,001,546
12,042,660}

^{Other
long term Liab.:
14,143,478
24,541,069}

^{Total
L/T Liabilities:
34,145,024
36,583,729}

^{Trade
Creditors:
1,110,262,186
943,918,700}

^{Prepay.
& Def. charges:
408,036,300 246,251,816}

^{Short
term liabilities:
8,915,118
11,191,608}

^{Provisions: 121,800,285 90,843,152}

^{Other
Short term Liab.:
7,246,150
37,587,202}

^{Total
short term Liab.:
1,656,260,039
1,329,792,478}

^{TOTAL LIABILITIES: 1,690,405,063 1,366,376,207}

PROFIT & LOSS ACCOUNT

^{Net
Sales
5,043,854,577
6,794,853,342}

^{Gross
Profit: 1,883,253,186 2,000,283,447}

^{Result
of ordinary operations
368,129,971
181,942,069}

^{NET
RESULT BEFORE TAX:
369,533,159
179,779,984}

^{Tax
:
98,676,480
64,368,001}

^{Net
income/loss year:
270,856,679
115,411,983}

^{Interest
Paid:
2,611,905
6,892,051}

^{Depreciation: 97,617,313 110,300,766}

^{Dividends: 50,796,000 46,291,494}

^{Purchases,Sces
& Other Goods: 3,160,601,391 4,794,569,895}

^{Wages
and Salaries:
464,738,589
483,350,623}

^{Financial
Income:
4,015,093
4,729,966}

RATIOS

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

^{Turnover
per employee: 50438545.77 67948533.42}

^{Net
result / Turnover(%): 0.05 0.02}

^{Stock
/ Turnover(%): 0.03 0.02}

^{Net
Margin(%): 5.37 1.70}

^{Return
on Equity(%): 21.99 11.55}

^{Return
on Assets(%): 9.27 4.88}

^{Dividends
Coverage: 5.33 2.49}

^{Net
Working capital: 985600411.00 738657752.00}

^{Cash
Ratio: 0.95 0.72}

^{Quick
Ratio: 1.47 1.41}

^{Current
ratio: 1.60 1.56}

^{Receivables
Turnover: 60.95 48.77}

^{Leverage
Ratio: 1.37 1.37}

^{Net
Margin : (100*Net income loss year)/Net sales}

^{Return
on Equity : (100*Net income loss year)/Total equity}

^{Return
on Assets : (100*Net income loss year)/Total fixed assets}

^{Dividends
Coverage : Net income loss year/Dividends}

^{Net
Working capital : Total current assets - Total short term liabilities}

^{Cash
Ratio : Cash Bank securities/Total short term liabilities}

^{Quick
Ratio : (Cash Bank securities+Receivables)/Total Short term liabilities}

^{Current
ratio : Total current assets/Total short term liabilities}

^{Inventory
Turnover : (360*Inventories)/Net sales}

^{Receivables
Turnover : (Receivable*360)/Net sales}

^{Leverage
Ratio : Total liabilities/(Total equity-Intangible assets)}

FINANCIAL COMMENTS

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

^NET
WORTH:

^{THE BALANCE SHEET
WAS CONSIDERED PASSABLE WITH NET WORTH IMPROVED BY 23.29% FROM JPY998,916,500
IN FY 2005 TO JPY1,231,521,207 IN FY 2006.
THIS WAS DUE TO HIGHER ACCUMULATED PROFIT OF JPY1,191,253,618 (2005:
JPY971,192,939); A RISE OF 22.66% FROM THE PRIOR FINANCIAL YEAR.}

^LEVERAGE:

^{IN THE SHORT-TERM,
SUBJECT WAS LARGELY FINANCED BY TRADE CREDITORS WHICH MADE UP 67.03% (2005:
70.98%) OF THE TOTAL CURRENT LIABILITIES AND AMOUNTED TO JPY1,110,262,186
(2005: JPY943,918,700). THE BREAKDOWN IS AS FOLLOWS:}

^{-TRADE PAYABLES -
2006: JPY206,337,343 (2005: JPY155,405,732)}

^{-IMMEDIATE HOLDING
COMPANY - 2006: JPY391,700,342 (2005: JPY707,366,184)}

^{-RELATED COMPANIES
- 2006: JPY512,224,501 (2005: JPY81,146,784)}

^{IN ALL, LEVERAGE
RATIO REMAIN STABLE AT 1.37 TIMES AS A RESULT OF A PROPORTIONATE RISE IN TOTAL
LIABILITIE AND TOTAL EQUITY.}

^LIQUIDITY:

^{IN GENERAL,
SUBJECT'S LIQUIDITY SITUATION WAS PASSABLE AS SEEN FROM THE RISE IN NET WORKING
CAPITAL AND LIQUIDITY RATIOS. CURRENT RATIO ROSE TO 1.60 TIMES, UP FROM 1.56
TIMES AND QUICK RATIO IMPROVED TO 1.47 TIMES FROM 1.41 TIMES IN FY 2005.}

^{SIMILARLY, NET
WORKING CAPITAL IMPROVED BY 33.43% FROM JPY738,657,752 IN FY 2005 TO
JPY985,600,411.}

^{PROFITABILITY:}

^{REVENUE POSTED A
DECLINE OF 25.77% FROM JPY6,794,853,342 IN FY 2005 TO JPY5,043,854,577 BUT NET
PROFIT ROSE BY 1.35 TIMES TO JPY270,856,679 (2005: JPY115,411,983). THIS COULD
BE DUE TO LOWER ADMINISTRATIVE EXPENSES OF JPY505,271,654 IN FY 2006 (2005:
JPY609,758,106). HENCE, NET MARGIN ROSE TO 5.37% (2005: 1.70%).}

^REVENUE:

^{-SALES OF MEDICAL
EQUIPMENT - 2006: JPY4,773,421,774 (2005: JPY4,566,650,732)}

^{-SALES OF CAMERAS
- 2006: - (2005: JPY2,186,359,768)}

^{-COMMISSION INCOME
- 2006: JPY18,905,699 (2005: JPY2,732,106)}

^{-REVENUE FROM
SERVICES - 2006: JPY251,527,104 (2005: JPY39,110,736)}

^{DEBT
SERVICING:}

^{DEBT SERVICING
PROBLEMS MIGHT NOT BE EXPECTED IF REVENUE AND EARNINGS CAN BE MAINTAINED AND
PAYMENT BY TRADE DEBTORS ARE FORTHCOMING.}

^{NON-CURRENT
ASSETS:}

^{THE FOLLOWING
ITEMS ARE CLASSIFIED UNDER PRELIMINARY:}

^{-CLUB MEMBERSHIP -
2006: JPY3,754,322 (2005: JPY3,754,322)}

^{NOTES TO THE FINANCIAL STATEMENTS:}

^{CONTINGENT
LIABILITIES}

^{AS AT 31 MARCH 2006,
THE GROUP AND THE COMPANY HAVE OUTSTANDING BANKERS' GUARANTEES GIVEN TO THIRD
PARTIES IN THE NORMAL COURSE OF BUSINESS AMOUNTING TO JPY26,658,327 AND
JPY22,753,517 (2005: JPY16,653,268 AND JPY1,901,712) RESPECTIVELY, WHICH HAVE
NOT BEEN PROVIDED FOR IN THE FINANCIAL STATEMENTS.}

^{SUBSEQUENT
EVENTS}

^{AFTER THE BALANCE
SHEET DATE, THE DIRECTORS PROPOSED A FINAL DIVIDEND OF JPY76,250,000 LESS TAX
AT 20% IN RESPECT OF THE FINANCIAL YEAR ENDED 31 MARCH 2006. THE DIVIDEND HAS
NOT BEEN PROVIDED FOR AS AT 31 MARCH 2006.}

BACKGROUND/OPERATION

^{THE COMPANY WAS
INCORPORATED IN THE REPUBLIC
OF SINGAPORE ON
15/02/1989 AS A LIMITED PRIVATE COMPANY AND IS TRADING UNDER ITS PRESENT
NAMESTYLE AS "OLYMPUS SINGAPORE PTE LTD".}

^{AS AT 28/05/2007,
THE COMPANY HAS ISSUED AND PAID-UP CAPITAL OF 330,000 SHARES OF A VALUE OF
S$330,000.}

^{PRINCIPAL
ACTIVITIES:}

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

^{1. GENERAL
WHOLESALE TRADE (INCLUDING GENERAL IMPORTERS AND EXPORTERS)}

^{2. PHOTOGRAPHIC
ACTIVITIES NEC (INCLUDING MICRO-IMAGE RECORDING SERVICES)}

^{DURING THE
FINANCIAL YEAR UNDER REVIEW, THE PRINCIPAL ACTIVITIES OF THE COMPANY CONSIST OF
THE DISTRIBUTION OF MEDICAL AND HEALTHCARE EQUIPMENT AND ACTING AS A LIAISON OFFICE FOR THE
HOLDING COMPANY.}

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

^{BACKGROUND OF
OLYMPUS CORPORATION:}

^OLYMPUS^{" HAS BEEN
USED AS A TRADEMARK SINCE THE TIME OF TAKACHIHO SEISAKUSHO, THE PREDECESSOR OF OLYMPUS
CORPORATION.}

^{IN JAPANESE
MYTHOLOGY, IT IS SAID THAT EIGHT MILLION GODS AND GODDESSES LIVE IN
TAKAMAGAHARA, THE PEAK
OF MT.TAKACHIHO. THE NAME
"OLYMPUS" WAS SELECTED AS THE
TRADEMARK BECAUSE MT.OLYMPUS, LIKE MT.TAKACHIHO, WAS THE HOME OF GODS AND GODDESSES.
THIS TRADEMARK IS ALSO IMBUED WITH THE ASPIRATION OF OLYMPUS
TO ILLUMINATE THE WORLD WITH ITS OPTICAL DEVICES, JUST LIKE TAKAMAGAHARA
BROUGHT LIGHT TO THE WORLD.}

^{TAKACHIHO
SEISAKUSHO WAS RENAMED TAKACHIHO OPTICAL CO., LTD. IN 1942 WHEN OPTICAL
PRODUCTS BECAME THE MAINSTAY OF THE COMPANY. IN 1947, THE NAME WAS CHANGED
AGAIN TO OLYMPUS OPTICAL CO., LTD. IN AN
ATTEMPT TO ENHANCE ITS CORPORATE IMAGE.}

^{AND IN 2003, THE
COMPANY MADE A FRESH START AS OLYMPUS CORPORATION, TO SHOW ITS WILLINGNESS TO
ESTABLISH A DYNAMIC CORPORATE BRAND BY UNIFYING THE CORPORATE NAME AND THE
WELL-KNOWN BRAND.}

^{IN RECENT YEARS,
OLYMPUS CORPORATION HAS FOCUSED ON "OPTO-DIGITAL TECHNOLOGY" AS ITS
CORE COMPETENCE, TECHNOLOGICAL STRENGTHS THAT COMPETITORS CANNOT EASILY IMITATE,
TO MAXIMIZE CORPORATE VALUE AND TO BECOME ONE OF THE TOP OPTICAL INSTRUMENT
MANUFACTURES.}

^{SUBJECT ENGAGES IN
THE FOLLOWING ACTIVITIES:}

^{REGIONAL SALES
OFFICE AND REPAIR CENTRE OF MEDICAL EQUIPMENTS (BIOSCIENCE, ENDOSCOPE AND
DIAGNOSTIC SYSTEMS), AND INSPECTION MEASURING SYSTEMS COVERING THE ASEAN
COUNTRIES AND INDIAN CONTINENTS.}

^{PRODUCTS DEALINGS:}

^MEDICAL:

^{GASTROINTESTINAL
ENDOSCOPES}

^{* BRONCHOSCOPES}

^{* ENDOSCOPIC
ULTRASOUND}

^{* ENDOTHERAPY}

^{* EXERA}

^{SURGICAL PRODUCTS}

^UROLOGY

^{PROSTATE TREATMENT}

^{* ENDOUROLOGY}

^{* CYSTOSCOPY}

^{* PEDIATRIC
UROLOGY}

^{* VIDEO IMAGING}

^{* LAPAROSCOPY}

^GYNAECOLOGY

^{* DIAGNOSTIC
HYSTEROSCOPY}

^{* THERAPEUTIC
HYSTEROSCOPY}

^{* LAPAROSCOPY}

^{* COLPOSCOPY}

^{* DISTENSION UNITS}

^SURGERY

^{* LAPAROSCOPY}

^{* LAPAROSCOPIC
UNITS}

^{* ULTRASONIC DISSECTION}

^{* CHF-CB30L/S
CHOLEDOCHOSCOPES}

^{* SUB-FASCIAL
ENDOSCOPIC PERFORATING VEIN SURGERY}

^{* CARDIAC SURGERY}

^{* SOLOSURGERY}

^{* MRI APPLICATIONS}

^ARTHROSCOPY

^{* ARTHROSCOPES}

^{* HIGH FLOW TROCAR
SYSTEMS}

^{* HAND INSTRUMENTS}

^{* PSU-2
POWER-SHAVER SYSTEM}

^{* ARTHROMAT FLUID
MANAGEMENT SYSTEM}

^{* VIDEO IMAGING}

^ENT

^{* RHINO-LARYNGO
FIBERSCOPES}

^{* SINUS SURGERY}

^{* VIDEO IMAGING}

^{AIRWAY MANAGEMENT}

^{* PORTAVIEW
INTUBATION-FIBERSCOPES}

^VIDEO

^{* CAMERA SYSTEMS}

^{LIFE SCIENCES:}

^MICROSCOPY

^{* UPRIGHT
MICROSCOPES}

^{* INVERTED MICROSCOPES}

^{* OLYMPUS MEDICAL MICROSCOPES (JP)}

^{* OLYMPUS MEDICAL & INDUSTRIAL ENDOSCOPES (JP)}

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

^{* SINGAPORE
INTERNATIONAL CHAMBERS OF COMMERCE}

^{* JAPANESE CHAMBER
OF COMMERCE & INDUSTRY}

^{FROM THE TELE-INTERVIEW
CONDUCTED ON 04/06/2007, THE FOLLOWING WAS GATHERED:}

^{IMPORT COUNTRIES:}

^{* JAPAN (HEAD
OFFICE)}

^{EXPORT COUNTRIES:}

^{* ASIA}

^{THE SUBJECT DOES
EXPORTS AND SELLS LOCALLY.}

^{NUMBER OF
EMPLOYEES:}

^{* COMPANY - 2007:
100+}

^{NO OTHER TRADE INFORMATION
IS AVAILABLE ON 04/06/2007.}

^{THE COMPANY IS A
WHOLLY-OWNED SUBSIDIARY OF OLYMPUS CORPORATION, INCORPORATED IN JAPAN, WHICH IS
ALSO ITS ULTIMATE HOLDING COMPANY.}

^{NUMBER OF
EMPLOYEES (31 MARCH):}

^{* COMPANY - 2006:
NOT AVAILABLE (2005: NOT AVAILABLE;
2004: 103; 2003: 98)}

^{* GROUP - 2006: NOT AVAILABLE (2005: NOT AVAILABLE; 2004: 158
(2003: 148)}

^{REGISTERED
ADDRESS:}

^{3 CHURCH STREET}

^#08-01

^SINGAPORE⁰⁴⁹⁴⁸³

^{- DATE OF CHANGE
OF ADDRESS: 18/12/2006}

^{BUSINESS ADDRESS:}

^{491B RIVER VALLEY ROAD}

^{#12-01/04 VALLEY POINT
OFFICE TOWER}

^SINGAPORE²⁴⁸³⁷³

^{- RENTED PREMISE}

^{- OWNED BY RIVER
VALLEY PROPERTIES PTE LTD}

^{YOUR PROVIDED
ADDRESS:}

^{491B RIVER VALLEY ROAD}

^{#12-1 04 VALLEY
POINT OFF TOWER}

^SINGAPORE²⁴⁸³⁷³

^{- INCORRECT}

^{YOUR PROVIDED
CONTACT NUMBER:}

^{FAX: 91-11
52531191}

^{- INCORRECT}

^WEBSITE:

^{http://www.olympus.com.sg}

^EMAIL:

^{endoService.osp@olympus.com.sg}

^{hot_mail.osp@olympus.com.sg}

MANAGEMENT

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

^{1) GOTO SUMIO, A
JAPANESE}

^{- OTHER
DIRECTORSHIP(S) IN OUR DATABASE:}

^{OLYMPUS (MALAYSIA) SDN
BHD}

^{2) MORISHIMA
HARUHITO, A JAPANESE}

^{- BASED IN JAPAN.}

^{3) AKIMASA
WAKABAYASHI, 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.

WHOLESALE AND RETAIL TRADE SECTOR

PAST PERFORMANCE

DOMESTIC WHOLESALE TRADE INDEX

DOMESTIC WHOLESALE TRADE IN 4Q 2006 HAS DECLINED BY 6.9%. EXCLUDING PETROLEUM, DOMESTIC SALES REMAINED AT SIMILAR LEVEL COMPARED TO THE PREVIOUS QUARTER.

GENERAL WHOLESALE TRADE POSTED THE LARGEST SALES DECREASE OF 16.6%, FOLLOWED BY THE SECTORS OF PETROLEUM AND PETROLEUM PRODUCTS OF 15.7% AND HOUSEHOLD EQUIPMENT AND FURNITURE OF 13.2%.

SECTORS OF INDUSTRIAL AND CONSTRUCTION MACHINERY AND ELECTRONIC COMPONENTS REGISTERED GROWTHS OF 17.0% AND 12.3%, RESPECTIVELY.

FOREIGN WHOLESALE TRADE INDEX

ON A QUARTER-TO-QUARTER BASIS, OVERALL FOREIGN WHOLESALE TRADE CONTRACTED BY 7.9% IN 4Q 2006 AFTER TWO QUARTERS OF POSITIVE GROWTH. FOREIGN SALES WENT DOWN BY 1.6%, EXCLUDING PETROLEUM.

RETAIL TRADE

IN GENERAL, RETAIL SALES GREW BY 7.9% IN 4Q 2006, UP FROM THE 5.2% IN THE PREVIOUS QUARTER. THIS BROUGHT FULL YEAR GROWTH FOR 2006 TO 6.9%, DOWN FROM 9.0% IN 2005. EXCLUDING MOTOR VEHICLE SALES, RETAIL SALES ROSE 4.1%, SLOWING FROM THE 7.2% GAIN IN THE PREVIOUS YEAR.

LIKEWISE, RETAILERS OF OPTICAL GOODS AND BOOKS, TELECOMMUNICATIONS APPARATUS AND COMPUTERS, FOOD AND BEVERAGES, MEDICAL GOODS AND TOILETRIES AND SUPERMARKETS ENJOYED GROWTH BETWEEN 12.7% TO 26.0%.

OUTLOOK

FOR WHOLESALE TRADE, A NET WEIGHTED BALANCE OF 11% OF FIRMS ANTICIPATES BUSINESS TO BE LESS BRISK FOR COMING MONTHS. THOSE DEALING IN JEWELLERY AND WATCHES, INDUSTRIAL MACHINERY AND EQUIPMENT, TELECOMMUNICATIONS EQUIPMENT AND ELECTRONIC COMPONENTS ARE AMONG THOSE WHO FORESEE SLOWER BUSINESS IN THE COMING MONTHS.

FOR RETAILERS, A NET WEIGHTED BALANCE OF 8%, FORECAST THE BUSINESS CONDITIONS TO IMPROVE IN THE NEXT SIX MONTHS. DEPARTMENT STORES OWNERS AND RETAILERS OF FURNITURE AND FURNISHINGS ARE OPTIMISTIC ABOUT THE BUSINESS PROSPECTS.

EXTRACTED FROM: MINISTRY OF TRADE AND INDUSTRY, SINGAPORE

SINGAPORE DEPARTMENT OF STATISTICS

TODAY

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average/normal.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
NR		In view of the lack of information, we have no basis upon which to recommend credit dealings	No Rating

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

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