MIRA INFORM REPORT

Report Date :

6^th March, 2007

IDENTIFICATION DETAILS

Name :	YOKOGAWA ENGINEERING ASIA PTE LTD
Registered Office :	5 Bedok South Road, Singapore 469270, Singapore.
Country :	Singapore
Financials (as on) :	28.02.2006
Date of Incorporation :	29.03.1997
Legal Form :	Pte Ltd
Line of Business :	Trading, Distributioon, Installation and Servicing of Process Control Systems

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

Company Name

YOKOGAWA ENGINEERING ASIA PTE LTD

Line Of Business 

TRADING, DISTRIBUTIOON, INSTALLATION AND SERVICING OF PROCESS CONTROL SYSTEMS

Parent Company

YOKOGAWA ELECTRIC CORPORATION

(PERCENTAGE OF SHAREHOLDING: 100.00%)

Financial Elements

FY 2006

COMPANY

Sales : S$273,372,000

Networth : S$32,337,000

Paid-Up Capital : S$29,000,000

Net result : S$12,442,000

Net Margin(%) : 4.55

Return on Equity(%) : 38.48

Leverage Ratio : 3.81

Rating

Credit Rating : Sing $ 10 000 00 1 to Sing $ 50 000 000

BUSINESS INFORMATION REPORT

COMPANY IDENTIFICATION

Subject Company : YOKOGAWA ENGINEERING ASIA PTE LTD

Former Name : -

Business Address : 5 BEDOK SOUTH ROAD

Town : SINGAPORE

Postcode : 469270

County : -

Country : Singapore

Telephone : 6241 9933/

Fax : 6241 2606/ 6249 2400 / 6241 9919

ROC Number : 199702061H

Reg. Town : -

SUMMARY

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

Legal Form : Pte Ltd

Date Inc. : 29/03/1997

Previous Legal Form : -

Summary year : 28/02/2006

Sales : 273,372,000

Net worth : 32,337,000

Capital : -

Paid-Up Capital : 29,000,000

Employees : 400

Net result : 12,442,000

Share value : -

Auditor : PRICEWATERHOUSECOOPERS

REFERENCES

^{Litigation : Yes}

^{Company status : TRADING}

^{Started : 29/03/1997}

PRINCIPAL(S)

^{DR LEE KONG TING TONY @ LEE BOON S1851922D Managing Director}

DIRECTOR(S)

DR LEE KONG TING TONY @ LEE BOON S1851922D Managing Director

Appointed on : 01/07/1997

Street : 8 CHESTNUT CRESCENT, GREEN HILL ESTATE

Town : SINGAPORE

Postcode : 679362

Country : Singapore

TEE CHEE TENG SIMON S0117513J Company Secretary

Appointed on : 01/07/1997

Street : 38 TUNG PO AVENUE, MUN WAH GARDEN

Town : SINGAPORE

Postcode : 787178

Country : Singapore

TEE CHEE TENG SIMON S0117513J Director

Appointed on : 01/01/1998

Street : 38 TUNG PO AVENUE, MUN WAH GARDEN

Town : SINGAPORE

Postcode : 787178

Country : Singapore

DR LEE KONG TING TONY @ LEE BOON S1851922D Director

Appointed on : 29/03/1997

Street : 8 CHESTNUT CRESCENT, GREEN HILL ESTATE

Town : SINGAPORE

Postcode : 679362

Country : Singapore

TAN SHOU CHIEH S1394230G Company Secretary

Appointed on : 22/11/2001

Street : 51 WATTEN VIEW, WATTEN ESTATE

Town : SINGAPORE

Postcode : 287184

Country : Singapore

HIDETOSHI BABA TE5718312 Director

Appointed on : 22/05/2006

Street : 2-4-9 MEJIRO, TOSHIMA-KU

Town : TOKYO

Postcode : 171-0031

Country : Japan

SHUZO KAIHORI TF3497024 Director

Appointed on : 13/06/2005

Street : 12 DAIKYO CHO SHINJUKU KU, TOKYO

Town : -

Postcode : 160-0015

Country : Japan

TERUYOSHI MINAKI G5808808R Director

Appointed on : 13/06/2005

Street : 20 NEWTON ROAD, #19-06, AMARYLLIS VILLE

Town : SINGAPORE

Postcode : 307953

Country : Singapore

FORMER DIRECTOR(S)

^{SEIICHIRO KIYOBE TF1915727}

^{SATORU KUROSU TF5899426}

^{HITOSHI NARA TF7584714}

^{NAGASAWA AKIRA TE2333470}

^{TOSHIO KIMURA H1279359}

^{SHINICHI YOSHIDA TG3669399}

ACTIVITY(IES)

^{INDUSTRIAL EQUIPMENT And SUPPLIES Code:11830}

^{ENGINEERING EQUIPMENT And SUPPLIES Code:7870}

^{ENGINEERING WORKS Code:7880}

^{BASED ON ACRA'S RECORD AS AT 05/02/2007}

^{1) MANUFACTURE OF INDUSTRIAL PROCESS CONTROL EQUIPMENT}

^{2) OTHER SPECIALISED CONSTRUCTION AND RELATED ACTIVITIES NEC}

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, L (THE BANK OF TOKYO-MITSUBISHI, LTD.)}

^{MIZUHO CORPORATE BANK, LTD}

ASSOCIATED COMPANY(IES)

^{YOKOGAWA KONTROL (MALAYSIA) SDN BHD}

^{AMODA BLDG, 22 JLN IMBI, LEVEL 20}

^{KUALA LUMPUR}

^Malaysia

SHAREHOLDERS(S)

YOKOGAWA ELECTRIC CORPORATION 29,000,000 Company

Street : 2-9-32 NAKACHO, MUSASHINO-SHI

Town : TOKYO

Postcode : 180-8750

Country : Japan

FORMER SHAREHOLDER(S)

^{YOKOGAWA ELECTRIC ASIA PTE LTD 29,000,000}

HOLDING COMPANY

^{YOKOGAWA ELECTRIC CORPORATION UF01420Z %: 100}

SUBSIDIARY(IES)

^{PLANT ELECTRICAL INSTRUMENTATION PTE LTD}

^SINGAPORE

^{YOKOGAWA (THAILAND) LTD}

^THAILAND

^{PT YOGOKAWA INDONESIA}

^INDONESIA

^{YOKOSHIN SOFTWARE ENGINEERING (WUXI) CO LTD}

^{PEOPLE’S REPUBLIC OF CHINA}

^{YOKOGAWA PHILIPPINES, INC}

^PHILIPPINES

^{YOKOGAWA ELECTRIC (M) SDN BHD}

^MALAYSIA

^{YOKOGAWA MENSUREMENTATION PTE LTD}

^SINGAPORE

^{YOKOGAWA INDUSTRIAL SAFETY SYSTEMS SDN BHD}

^MALAYSIA

PAYMENT HISTORY AND EXPERIENCES

^{Trade Morality : AVERAGE}

^{Liquidity : SUFFICIENT}

^{Payments : REGULAR}

^{Trend : UPWARD}

^{Financial Situation : AVERAGE}

LITIGATION(S)

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

^{Case Number : DCS02321/2001}

Defendant YOKOGAWA ENGINEERING ASIA PTE LTD ROC #: 199702061H

FINANCIAL ELEMENTS

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

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

^{Date Account Lodged: 07/08/2006}

^{Balance Sheet Date: 28/02/2006 28/02/2005 29/02/2004}

^{Number of weeks: 52 52 52}

^{Consolidation Code: COMPANY COMPANY CONSOLIDATED}

ASSETS

^{Preliminary Exp - - 2,370,000}

^{Intangible Fixed Assets: - - 409,000}

^{Tangible Fixed Assets: 3,100,000 4,015,000 8,970,000}

^{Investments 21,038,000 21,788,000 1,497,000}

^{Total Fixed Assets: 24,138,000 25,803,000 13,246,000}

^{Work in progress: - - 10,523,000}

^{Inventories: 7,042,000 5,462,000 11,274,000}

^{Receivables: 72,779,000 71,688,000 66,518,000}

^{Short Term Fin. Assets: 924,000 - -}

^{Cash,Banks,Securities: 5,760,000 14,962,000 35,956,000}

^{Other current assets: 44,837,000 38,714,000 5,413,000}

^{Total Current Assets: 131,342,000 130,826,000 129,684,000}

^{TOTAL ASSETS: 155,480,000 156,629,000 142,930,000}

LIABILITIES

^{Equity capital: 29,000,000 29,000,000 29,000,000}

^{Reserves: - - -394,000}

^{Profit & loss Account: 3,337,000 8,926,000 10,553,000}

^{Other: - - 1,467,000}

^{Total Equity: 32,337,000 37,926,000 40,626,000}

^{L/T deferred taxes: - - 21,000}

^{Other long term Liab.: - - 407,000}

^{Total L/T Liabilities: - - 428,000}

^{Trade Creditors: 53,260,000 30,094,000 75,305,000}

^{Prepay. & Def. charges: 8,380,000 13,298,000 -}

^{Short term liabilities: - 29,000 194,000}

^{Advanced payments: 378,000 101,000 -}

^{Due to Bank: 3,307,000 - -}

^{Provisions: 15,307,000 11,079,000 2,704,000}

^{Other Short term Liab.: 42,511,000 64,102,000 23,673,000}

^{Total short term Liab.: 123,143,000 118,703,000 101,876,000}

^{TOTAL LIABILITIES: 123,143,000 118,703,000 102,304,000}

PROFIT & LOSS ACCOUNT

^{Net Sales 273,372,000 225,719,000 210,288,000}

^{Purchases,Sces & Other Goods: 237,294,000 193,308,000 -}

^{Gross Profit: 36,078,000 32,411,000 54,117,000}

^{Result of ordinary operations - - 7,400,000}

^{NET RESULT BEFORE TAX: 15,796,000 5,917,000 8,015,000}

^{Tax: 3,354,000 2,354,000 2,903,000}

^{Net income/loss year: 12,442,000 3,563,000 4,800,000}

^{Interest Paid: 80,000 62,000 216,000}

^{Depreciation: 2,311,000 2,428,000 3,829,000}

^{Dividends: 4,800,000 - -}

^{Directors Emoluments: 1,218,592 985,000 3,121,000}

^{Wages and Salaries: 38,381,000 30,405,000 51,051,000}

^{Financial Income: 196,000 188,000 321,000}

RATIOS

^{28/02/2006 28/02/2005 29/02/2004}

^{Turnover per employee: 683430.00 564297.50 525720.00}

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

^{Stock / Turnover(%): 0.03 0.02 0.05}

^{Net Margin(%): 4.55 1.58 2.28}

^{Return on Equity(%): 38.48 9.39 11.82}

^{Return on Assets(%): 8.00 2.27 3.36}

^{Dividends Coverage: 2.59 2.59 2.59}

^{Net Working capital: 8199000.00 12123000.00 27808000.00}

^{Cash Ratio: 0.05 0.13 0.35}

^{Quick Ratio: 0.64 0.73 1.01}

^{Current ratio: 1.07 1.10 1.27}

^{Receivables Turnover: 95.84 114.34 113.87}

^{Leverage Ratio: 3.81 3.13 2.54}

^{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 COMPANY WAS SEEN TO BE FAIR IN VIEW OF THE FOLLOWING:}

^{NET WORTH:}

^{THE BALANCE SHEET WAS CONSIDERED PASSABLE EVEN THOUGH NET WORTH DECREASED BY 14.74% FROM S$37,926,000 IN 2005 TO S$32,337,000 IN 2006.}

^{THIS WAS DUE TO LOWER RETAINED EARNINGS OF S$3,337,000 (2005: S$8,926,000); A FALL OF 62.61% FROM THE PRIOR FINANCIAL YEAR.}

^LEVERAGE:

^{IN THE SHORT-TERM IN 2006, SUBJECT WAS LARGELY FINANCED BY TRADE CREDITORS WHICH MADE UP 43.25% (2005: 25.35%) OF THE TOTAL CURRENT LIABILITIES AND AMOUNTED TO S$53,260,000 (2005: S$30,094,000). THE BREAKDOWN IS AS FOLLOWS:}

^{-THIRD PARTIES - 2006: S$15,986,000 (2005: S$8,437,000)}

^{-ULTIMATE HOLDING CORPORATION - 2006: S$18,866,000 (2005: S$12,892,000)}

^{-SUBSIDIARIES - 2006: S$9,631,000 (2005: S$2,889,000)}

^{-OTHER RELATED CORPORATIONS - 2006: S$8,777,000 (2005: S$5,876,000)}

^{HOWEVER, IN THE SHORT-TERM IN 2005, SUBJECT WAS LARGELY FINANCED BY OTHER SHORT TERM LIABILITIES WHICH MADE UP 54.00% (2006: 34.52%) OF THE TOTAL CURRENT LIABILITIES AND AMOUNTED TO S$64,102,000 (2006: S$42,511,000). THE BREAKDOWN IS AS FOLLOWS:}

^{-DUE TO ULTIMATE HOLDING CORPORATION (NON TRADE) - 2005: - (2006: S$13,400,000)}

^{-CONSTRUCTION CONTRACTS - 2005: S$64,102,000 (2006: S$29,111,000)}

^{SUBJECT DID NOT INCUR ANY LONG TERM LIABILITIES DURING THE FINANCIAL YEAR UNDER REVIEW.}

^{IN ALL, LEVERAGE RATIO ROSE FROM 3.13 TIMES TO 3.81 TIMES AS A RESULT OF A FALL IN TOTAL EQUITY AND A RISE IN TOTAL LIABILITIES.}

^LIQUIDITY:

^{IN GENERAL, SUBJECT'S LIQUIDITY SITUATION WAS PASSABLE EVEN THOUGH NET WORKING CAPITAL FELL BY 32.37% TO S$8,199,000 (2005: S$12,123,000).}

^{CURRENT RATIO FELL TO 1.07 TIMES, DOWN FROM 1.10 TIMES AND QUICK RATIO DECREASED TO 0.64 TIMES FROM 0.73 TIMES IN 2005.}

^{SIMILARLY, CASH AND CASH EQUIVALENTS FELL BY 61.50% TO S$5,760,000}

^{(2005: S$14,962,000).}

^{PROFITABILITY:}

^{REVENUE POSTED AN INCREASE OF 21.11% FROM S$225,719,000 IN 2005 TO S$273,372,000 AND NET PROFIT ROSE BY 2.49 TIMES TO S$12,442,000 (2005: S$3,563,000).}

^{THIS COULD BE DUE TO THE OTHER MISCELLANEOUS GAINS OF S$9,471,000 IN 2006, AS COMPARED TO THE OTHER MISCELLANEOUS LOSSES OF S$1,727,000.}

^{HENCE, NET MARGIN ROSE TO 4.55% (2005: 1.58%).}

^REVENUE:

^{-SALE OF PRODUCTS - 2006: S$116,230,000 (2005: S$78,773,000)}

^{-PROJECT REVENUE - 2006: S$157,142,000 (2005: S$146,946,000)}

^{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, ITS INTEREST COVERAGE WAS HEALTHY AS SHHOWN BY ITS INTEREST COVERAGE RATIO OF 198.45 TIMES (2005: 96.44 TIMES).}

^{NOTES TO THE FINANCIAL STATEMENTS:}

^BORROWINGS

^{A) SECURITY GRANTED}

^{THE BANK BORROWING IS UNSECURED.}

^{B) MATURITY OF BORROWINGS}

^{THE BANK BORROWING HAS AN AVERAGE MATURITY OF 3 MONTHS (2005: NIL)}

^COMMITMENTS

^{THE COMPANY HAS COMMITMENTS IN RESPECT OF BANK GUARANTEES GIVEN TO THIRD PARTIES AS A RESULT OF CONSTRUCTION CONTRACTS UNDERTAKEN. THE DIRECTORS ARE OF THE VIEW THAT NO MATERIAL LIABILITIES WILL ARISE FROM THE BANK GUARANTEES AT THE DATE OF THESE FINANCIAL STATEMENTS:}

^{GUARANTEE GIVEN TO BANKS ON BEHALF OF SUBSIDIARIES -}

^{2006: S$12,411,000 (2005: S$21,474,000)}

BACKGROUND/OPERATION

^{THE COMPANY WAS INCORPORATED IN THE REPUBLIC OF SINGAPORE ON 29/03/1997 AS A LIMITED PRIVATE COMPANY AND IS TRADING UNDER THE PRESENT NAMESTYLE OF "YOKOGAWA ENGINEERING ASIA PTE LTD".}

^{AS AT 05/02/2007, THE COMPANY HAS AN ISSUED AND PAID-UP CAPITAL OF 29,000,000 SHARES, OF A VALUE OF S$29,000,000.}

^{PRINCIPAL ACTIVITIES:}

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

^{1) MANUFACTURE OF INDUSTRIAL PROCESS CONTROL EQUIPMENT}

^{2) OTHER SPECIALISED CONSTRUCTION AND RELATED ACTIVITIES}

^{DURING THE FINANCIAL YEAR(S), UNDER REVIEW, THE PRINCIPAL ACTIVITIES OF THE COMPANY ARE THE TRADING, DISTRIBUTIOON, INSTALLATION AND SERVICING OF PROCESS CONTROL SYSTEMS, INDUSTRIAL PROCESS INSTRUMENTS AND ELECTRICAL MEASURING INSTRUMENTS AND THE PROVISION OF TECHNICAL KNOW-HOW IN THE ENGINEERING BUSINESS.}

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

^ACTIVITIES

^{- SALES, SERVICING,ENGINEERING AND TRAINING OF INDUSTRIAL PROCESS}

^{INSTRUMENTATION,CONTROL SYSTEMS AND MEASURING AND ANALYTICAL INSTRUMENTS}

^{- SUBJECT'S OFFICE SUPPORTS BANGLADESH, PAKISTAN, SRI LANKA, VIETNAM, BURUNEI,}

^{CAMBODIA AND LAOS}

^{PRODUCTS AND SERVICES}

^{- CLEAN ROOM EQUIPMENT & SUPPLIES}

^{- DATA ACQUISITION SYSTEMS}

^{- MEASURING INSTRUMENTS}

^{- PROCESS ANALYSERS}

^{- POWER ANALYSER}

^{- POWER METER}

^{- PROVISION OF ENGINEERING SERVICES}

^{IMPORT COUNTRIES}

^{- JAPAN, ETC}

^{EXPORT COUNTRIES}

^{- BRUNEI, MYANMAR, INDONESIA, MALAYSIA, PHILIPPINES, THAILAND, JAPAN, ETC}

^{SUBJECT IS A MEMBER OF FOLLOWING ENTITIES}

^{- SINGAPORE INDUSTRIAL AUTOMATION ASSOCIATION}

^{- SINGAPORE QUALITY CLASS}

^{- FIELDBUS FOUNDATION}

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

^{QUALITY ASSESSMENT}

^{- ISO 9000}

^{- ISO 9001}

^{- ISO 14001}

^AWARDS

^{- SINGAPORE H.E.A.L.T.H. AWARD 2003}

^{NO OTHER TRADE INFORMATION WAS MADE AVAILABLE AS TELE-INTERVIEW WAS NOT GRANTED.}

^{THE COMPANY'S IMMEDIATE AND ULTIMATE HOLDING CORPORATION IS YOKOGAWA ELECTRIC CORPORATION, INCORPORATED IN JAPAN.}

^{NUMBER OF EMPLOYEES (28 FEBRUARY)}

^{- COMPANY - 2006: 400 (2005: NOT AVAILABLE)}

^{REGISTERED AND BUSINESS ADDRESS:}

^{5 BEDOK SOUTH ROAD}

^{SINGAPORE 469270}

^{DATE OF CHANGE OF ADDRESS: 05/04/1999}

^{- RENTED PREMISE}

^{- OWNED BY: YOKOGAWA ELECTRIC ASIA PTE LTD}

^EMAIL:

^{njhan@yas.com.sg}

^{lynn.tan@sg.yokogawa.com}

^WEBSITE:

^{http://www.yokogawa.com/sg/index.htm}

MANAGEMENT

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

^{(1) HIDETOSHI BABA, A JAPANESE}

^{- BASED IN JAPAN}

^{(2) TEE CHEE TENG, A SINGAPOREAN}

^{- HOLDS OTHER DIRECTORSHIPS AS RECORDED IN OUR DATABASE:}

^{YOKOGAWA MENSUREMENTATION PTE LTD}

^{PLANT ELECTRICAL INSTRUMENTATION PTE LTD}

^{YOKOGAWA ELECTRIC (M) SDN BHD}

^{(3) LEE KONG TING TONY, A SINGAPOREAN}

^{- HOLDS OTHER DIRECTORSHIPS AS RECORDED IN OUR DATABASE:}

^{YOKOGAWA ELECTRIC ASIA PTE LTD}

^{YOKOGAWA MENSUREMENTATION PTE LTD}

^{PLANT ELECTRICAL INSTRUMENTATION PTE LTD}

^{YOKOGAWA ELECTRIC (M) SDN BHD}

^{(4) TERUYOSHI MINAKI, A JAPANESE}

^{- BASED IN SINGAPORE}

^{(5) SHUZO KAIHORI, A JAPANESE}

^{- BASED IN JAPAN}

Singapore’s Country Rating 2006

Investment Grade

IN SINGAPORE, THE POLITICAL SITUATION APPEARS TO BE VERY STABLE.

ECONOMIC GROWTH IS BECOMING MORE MODERATE AS INVESTMENT HAS BEEN FLAT DUE TO INCREASING OIL PRICES AND LESS BUOYANT DEMAND FOR ELECTRONIC PRODUCTS.

ECONOMIC PERFORMANCE HAS REMAINED STRONG, UNDERPINNED BY PHARMACEUTICALS AND SERVICES. EXPORTS HAS BENEFITED FROM THE STEADINESS OF DEMAND FROM ITS MAIN TRADING PARTNERS, MALAYSIA, THE UNITED STATES, CHINA AND HONG KONG. OTHER THAN ITS BALANCED PUBLIC SECTOR ACCOUNTS, LIMITED FOREIGN DEBT AND COMFORTABLE FOREIGN CURRENCY RESERVES HAVE CONTRIBUTED TO SINGAPORE’S STRONG FINANCIAL CONDITION.

AS THE ELECTRONICS SECTOR FACES COMPETITION FROM THE ASIAN ECONOMIES, SINGAPORE HAS BEEN PURSUING DIVERSIFICATION STRATEGY THAT HAS BEEN CONSOLIDATING ITS POSITION. PHARMACEUTICALS ALREADY REPRESENT 10% OF EXPORTS IN COMPARATIVE TO ITS INSIGNIFICANT CONTRIBUTION IN YEAR 1995. ELECTRONICS SECTOR SECTOR’S SHARE HAS DECLINED FROM 80% TO 60% DURING THE SAME PERIOD. THERE IS HIGH RELIANCE ON DEVELOPMENT OF PETROCHEMICAL PRODUCTS, HIGH VALUE-ADDED SERVICES AND BIOTECHNOLOGIES.

ASSETS

• ONE OF THE MOST OPEN ECONOMIES IN THE WORLD WITH EXPORTS PLAYING A MAJOR ROLE IN ITS PERFORMANCE.
• ONE OF ASIA’S MOST ADVANCED COUNTRIES IN QUALITY COMPETITIVENESS TERMS.
• WORKFORCE’S EDUCATION AND SKILL LEVEL IS VERY HIGH.
• A MAJOR EXPORT OF CAPITAL IN ASIA, PARTICULARLY THE STATE-OWNED HOLDING COMPANY, TEMASEK.
• THE BUSINESS ENVIRONMENT HAS BEEN VERY FAVOURABLE.
• GREAT POLITICAL STABILITY.

WEAKNESSES

• ECONOMY REMAINED OVERSPECIALISED IN THE ELECTRONICS SECTOR.
• MUST ACCELERATE DIVERSIFICATION IN SERVICES TO MAINTAIN ITS LEAD OVER OTHER ASIAN ECONOMIES
• REFORMS ARE STILL NEEDED TO FOSTER INNOVATION AND EDUCATION-SYSTEM MODERNIZATION.
• AGING POPULATION COULD ULTIMATELY AFFECT ECONOMIC PERFORMANCE.

WHOLESALE AND RETAIL TRADE

^{PAST PERFORMANCE}

^{WITH THE GROWTH IN NON-OIL RE-EXPORTS AND THE RISE IN RETAIL SALES, THE WHOLESALE AND RETAIL TRADE SECTOR GREW BY A ROBUST 15% IN 1Q2006, UP FROM THE 12% GAIN IN 4Q2005.}

^{WHOLESALE TRADE}

^{DOMESTIC WHOLESALE TRADE INDEX}

^{FOLLOWING SEVEN QUARTERS OF DOUBLE-DIGIT GROWTH, THE OVERALL DOMESTIC WHOLESALE TRADE INDEX MODERATED TO 7.5% IN 1Q2006. EXCLUDING PETROLEUM, THE INDEX ROSE BY 14.2% OVER THE SAME PERIOD LAST YEAR.}

^{AT CONSTANT PRICES, THE OVERALL INDEX DECLINED BY 4.4% IN 1Q2006 OVER 1Q2005, MAINLY DUE TO LOWER ACTIVITY IN CHEMICAL AND PETROLEUM SECTORS. EXCLUDING PETROLEUM, IT WAS 7.9% HIGHER THAN A YEAR AGO.}

^{ON A QUARTER-ON-QUARTER BASIS, THE OVERALL INDEX POSTED A DECLINE OF 16.5% COMPARED TO 4Q2005. EXCLUDING PETROLEUM, THE INDEX WERE LOWER BY 8.9%.}

^{FOREIGN WHOLESALE TRADE INDEX}

^{AS COMPARED TO 1Q2005, THE OVERALL FOREIGN WHOLESALE TRADE IN 1Q2006 ROSE BY 15.4%. EXCLUDING PETROLUEM, THE INDEX EXPANDED BY 11.5%.}

^{AT CONSTANT PRICES, THE OVERALL INDEX ROSE MARGINALLY BY 0.9% IN 1Q2006 OVER A YEAR AGO. EXCLUDING PETROLEUM, IT WAS UP BY 7.6%.}

^{ON A QUARTER-ON-QUARTER BASIS, THE OVERALL INDEX POSTED A DECLINE OF 9.4% FOLLOWING GROWTH FOR THREE CONSECUTIVE QUARTERS. EXCLUDING PETROLEUM, THE INDEX WERE LOWER BY 8.6%.}

^{THE MAJOR SECTORS MOSTLY POSTED LOWER FOREIGN SALES WITH THE EXCEPTION OF TELECOMMUNICATIONS & COMPUTERS SECTOR IN 1Q2006. THE HOUSEHOLD EQUIPMENT & FURNITURE, FOOD, BEVERAGES & TOBACCO SECTOR ALL REPORTED DECLINE IN TURNOVER OF MORE THAN 17% IN THE FIRST QUARTER OF 2006 OVER 4Q2005.}

^{RETAIL TRADE}

^{RETAIL SALES CHALKED UP 8.0% GROWTH IN 1Q2006, FELLING MARGINALLY FROM THE 8.2% GROWTH IN 4Q2005. SALES OF MOTOR VEHICLES ROSE BY 10% IN 1Q2006, HIGHER THAN THE 8.5% GAIN IN THE LAST QUARTER. EXCLUDING MOTOR VEHICLES, RETAIL SALES MODERATED TO 5.2% GROWTH, SLOWER THAN THE 7.8% RISE IN 4Q2005.}

^{ALL THE MAJOR SEGMENTS RECORDED GROWTH IN 1Q2006 OVER 1Q2005, WITH GROWTH RANGING FROM 1.6% TO 18%. THE SEGMENTS WERE TELECOMMUNICATIONS AND COMPUTERS, FOOD AND BEVERAGES, WEARING APPAREL AND FOOTWEAR, OPTICAL GOODS AND BOOKS, PROVISION AND SUNDRY SHOPS, DEPARTMENT STORES, SUPERMARKETS, MEDICAL GOODS AND TOILETRIES, RECREATIONAL GOODS, FURNITURE AND HOUSEHOLD EQUIPMENT, WATCHES AND JEWELLERY, AND PETROL SERVICE STATIONS.}

^{A ROSY OUTLOOK FOR RETAILERS}

^{RETAIL SALES IN SINGAPORE ROSE IN JUNE FOR THE 16TH STRAIGHT MONTH AS AN IMPROVING JOB MARKET AND A RISE IN TOURIST ARRIVALS INCREASED CONSUMER SPENDING.}

^{THE RETAIL SALES INDEX GREW BY 5.1% FROM A YEAR EARLIER AFTER EXPANDING BY 13.1% IN MAY. EXCLUDING MOTOR VEHICLES, RETAIL SALES GREW BY 7.8%.}

^AHEAD

^{WHOLESALERS PREDICTS POSITIVE BUSINESS CONDITIONS FOR THE PERIOD ENDING DECEMBER 2006. THOSE DEALING IN FURNITURE & FURNISHINGS, COSMETICS & TOILETRIES, JEWELLERY & WATCHES, HOUSEHOLD ELECTRICAL APPLIANCES & EQUIPMENT, ELECTRONIC COMPONENTS, SCIENITIFIC & PRECISION EQUIPMENT, ARE AMONG THOSE WHO ARE OPTIMISTIC ABOUT THE BUSINESS OUTLOOK AHEAD.}

^{RETAILERS ALSO FORECAST BETTER BUSINESS SENTIMENTS FOR THE COMING MONTHS ENDING DECEMBER 2006, WITH A NET BALANCE OF 22%, ESPECIALLY DEPARTMENT STORES AND RETAILERS OF WEARING APPAREL AND FURNITURE & FURNISHINGS EXPECTING A POSITIVE BUSINESS OUTLOOK FROM THE YEAR-END FESTIVE SHOPPING.}

^{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%)

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