MIRA INFORM REPORT

Report Date :

28.03.2007

IDENTIFICATION DETAILS

Name :	WHITFORD PTE LTD
Registered Office :	^1 TUAS BASIN CLOSE, SINGAPORE - 638803
Country :	^Singapore
Financials (as on) :	31.12.2005
Date of Incorporation :	^19/07/1991
Com. Reg. No.:	^199103553E
Legal Form :	^Pte Ltd
Line of Business :	The Manufacture and Sale of Fluoropolymer Coatings and Chemicals

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

WHITFORD PTE LTD

Line Of Business 

THE MANUFACTURE AND SALE OF FLUOROPOLYMER COATINGS AND CHEMICALS

Parent Company

WHITFORD B.V.

(PERCENTAGE OF SHAREHOLDING: 100%)

Financial Elements

FY 2005

COMPANY

Sales : S$62,864,986

Networth : S$23,175,383

Paid-Up Capital : S$332,194

Net result : S$8,219,858

Net Margin(%) : 13.08

Return on Equity(%) : 35.47

Leverage Ratio : 0.72

Rating

Credit Rating : Sing $ 10000001 to Sing $ 50000000

COMPANY IDENTIFICATION

^{Subject Company : WHITFORD PTE LTD}

^{Former Name : -}

^{Business Address: 1 TUAS BASIN CLOSE}

^{Town: SINGAPORE}

^{Postcode: 638803}

^{County: -}

^{Country: Singapore}

^{Telephone: 6861 6877}

^{Fax: 6861 6577}

^{ROC Number: 199103553E}

^{Reg. Town: -}

SUMMARY

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

^{Legal Form: Pte Ltd}

^{Date Inc.: 19/07/1991}

^{Previous Legal Form: -}

^{Summary year : 31/12/2005}

^{Sales: 62,864,986}

^{Networth : 23,175,383}

^{Capital: 1,000,000}

^{Paid-Up Capital: 332,194}

^{Net result : 8,219,858}

^{Employees: 60}

^{Share value: 1}

^{AUDITOR : PRICEWATERHOUSECOOPERS}

REFERENCES

^{Litigation: Yes}

^{Company status : TRADING}

^{Started : 19/07/1991}

PRINCIPAL(S)

^{PETER HARDOLD NEELY G5523929R Director}

DIRECTOR(S)

^{DAVID POND WILLIS JR G1004600 Director}

^{Appointed on : 27/03/1992}

^{Street : PO BOX 507 WEST CHESTER}

^{Town: PENNSYLVANIA}

^{Postcode: 19381}

^{Country: United States}

^{PETER HARDOLD NEELY G5523929R Director}

^{Appointed on : 03/08/2000}

^{Street : 25 ORANGE GROVE ROAD}

^#05-02

^{GARDEN APARTMENT}

^{Town: SINGAPORE}

^{Postcode: 258351}

^{Country: Singapore}

^{PETER HARDOLD NEELY G5523929R Managing Director}

^{Appointed on : 03/08/2000}

^{Street : 25 ORANGE GROVE ROAD}

^#05-02

^{GARDEN APARTMENT}

^{Town: SINGAPORE}

^{Postcode: 258351}

^{Country: Singapore}

^{TAN SIOK KHENG S1705273Z Company Secretary}

^{Appointed on : 01/08/1995}

^{Street : 680 CHOA CHU KANG CRESCENT}

^#02-566

^{Town: SINGAPORE}

^{Postcode: 680680}

^{Country: Singapore}

^{LOW MEI MEI MAUREEN S1728235B Company Secretary}

^{Appointed on : 25/10/2000}

^{Street : 26 SIMEI STREET 1}

^#07-01

^{MELVILLE PARK}

^{Town: SINGAPORE}

^{Postcode: 529947}

^{Country: Singapore}

^{BRIAN EDWARD KILTY 093704081 Director}

^{Appointed on : 01/07/2005}

^{Street : 11 TWIN PINES ROAD}

^{DOWINGTOWN, PA 19335}

^{Town: PENNSYLVANIA}

^Postcode:

^{Country: United States}

^{FOONG SUN FATT S1527431Z Director}

^{Appointed on : 23/06/2006}

^{Street : 17 BURGUNDY DRIVE}

^{BURGUNDY HILL}

^{Town: SINGAPORE}

^{Postcode: 658820}

^{Country: Singapore}

FORMER DIRECTOR(S)

^{GRAHAM SIDNEY RHOADES Unknown}

^{JEHANGIR MOBED 090667887}

^{FOO KIM CHONG S1386984G}

ACTIVITY(IES)

^{PAINT - WHSLE And MFRS Code:15800}

^{BASED ON ACRA'S RECORD AS AT 23/03/2007}

^{1. MANUFACTURE OF PAINTS}

^{2. WHOLESALE OF PAINTS (INCLUDING VARNISHES & SUPPLIES)}

CHARGES

^{Date: 10/06/2004}

^{Comments : CHARGE NO : 9506078 (DISCHARGED - 18/06/1997)}

^{SECURED : 0.00 AND ALL MONIES OWING}

^{CHARGEE : THE BANK OF NOVA SCOTIA}

^{Date: 10/06/2004}

^{Comments : CHARGE NO: C200402811}

^{SECURED : 0.00 AND ALL MONIES OWING}

^{CHARGEE: DBS BANK LTD}

^{Date: 11/03/2004}

^{Comments : CHARGE NO : C200401187}

^{SECURED : 0.00 AND ALL MONIES OWING}

^{CHARGEE : DBS BANK LTD}

^{Date: 25/10/2000}

^{Comments : CHARGE NO : 200005062}

^{SECURED : 0.00 AND ALL MONIES OWING}

^{CHARGEE : THE DEVELOPMENT BANK OF SINGAPORE LTD}

^{Date: 03/07/1997}

^{Comments : CHARGE NO : 199703939, 199703938}

^{SECURED : 0.00 AND ALL MONIES OWING}

^{CHARGEE : THE DEVELOPMENT BANK OF SINGAPORE LTD}

PREMISES/PROPERTY INFORMATIONS

^{Date: 28/03/2007 Tax rate: 10}

^{Site Address : 1 TUAS BASIN CLOSE}

^{Town: SINGAPORE Postcode: 638803}

^{Country: Singapore}

^{Annual Value: 391,000}

* 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).

* ANNUAL VALUE IS THE ESTIMATED ANNUAL RENT THE PROPERTY CAN FETCH IF IT WERE RENTED

OUT. THE ANNUAL VALUE IS DETERMINED IN THE SAME MANNER REGARDLESS OF WHETHER THE

PROPERTY IS LET-OUT, OWNER-OCCUPIED OR VACANT.

BANKERS

^{DBS BANK LTD.}

SHAREHOLDERS(S)

^{WHITFORD B.V. 332,194 Company}

^{Street : STRAWINSKYLAAN 3127}

^{1077 ZX}

^{Town: AMSTERDAM}

^{Postcode: 1077}

^{Country: Netherlands}

HOLDING COMPANY

^{WHITFORD B.V. UF29730D % : 100}

SUBSIDIARY(IES)

No Participation In Our Database

PAYMENT HISTORY AND EXPERIENCES

Trade Morality: AVERAGE

Liquidity : SUFFICIANT

Payments : REGULAR

Trend : UPWARD

Financial Situation: AVERAGE

LITIGATION(S)

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

^{Case Number: MCS0011855/2003}

Defendant WHITFORD PTE LTD

ROC # : 199103553E

FINANCIAL ELEMENTS

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

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

^{Date Account Lodged: 18/07/2006}

^{Balance Sheet Date: 31/12/2005 31/12/2004 31/12/2003}

^{Number of weeks: 52 52 52}

^{Consolidation Code: COMPANY COMPANY COMPANY}

^{--- ASSETS}

^{Tangible Fixed Assets: 10,430,148 10,885,068 11,504,495}

^{Total Fixed Assets: 10,430,148 10,885,068 11,504,495}

^{Inventories: 6,588,390 6,487,254 5,155,325}

^{Receivables: 15,202,480 12,532,147 12,364,172}

^{Cash,Banks, Securitis: 4,223,114 1,522,668 1,042,755}

^{Other current assets: 3,456,635 860,239 647,013}

^{Total Current Assets: 29,470,619 21,402,308 19,209,265}

^{TOTAL ASSETS: 39,900,767 32,287,376 30,713,760}

^{--- LIABILITIES}

^{Equity capital: 332,194 332,194 332,194}

^{Profit & loss Account: 22,843,189 19,603,331 16,317,423}

^{TOTAL EQUITY: 23,175,383 19,935,525 16,649,617}

^{Long Term Loans: 3,398,075 2,570,221 3,432,361}

^{Other long term Liab.: 131,993 221,235 478,245}

^{Total L/T Liabilities: 3,530,068 2,791,456 3,910,606}

^{Trade Creditors: 7,788,738 4,805,209 3,170,830}

^{Prepay. & Def. charges: 2,883,340 2,275,807 -}

^{Short term liabilities: 112,940 244,219 294,752}

^{Due to Bank: 862,140 862,134 3,029,134}

^{Provisions: 1,548,158 1,281,550 1,300,000}

^{Other Short term Liab.: - 91,476 2,358,821}

^{Total short term Liab.: 13,195,316 9,560,395 10,153,537}

^{TOTAL LIABILITIES: 16,725,384 12,351,851 14,064,143}

PROFIT & LOSS ACCOUNT

^{Net Sales 62,864,986 55,475,841 52,183,777}

^{Gross Profit: 26,999,556 23,411,891 20,049,696}

^{Result of ordinary operations - - 7,393,291}

^{NET RESULT BEFORE TAX: 9,479,858 6,535,408 6,974,544}

^{Tax : 1,260,000 1,010,000 1,067,900}

^{Net income/loss year: 8,219,858 5,525,408 5,906,644}

^{Interest Paid: 211,341 289,839 420,392}

^{Depreciation: 1,395,688 1,469,195 1,499,051}

^{Dividends: 4,980,000 2,239,500 -}

^{Directors Emoluments: 935,184 989,618 -}

^{Purchases,Sces & Other}

^{Goods: 35,865,430 32,063,950 -}

^{Wages and Salaries: 4,968,710 3,818,573 2,898,771}

^{Financial Income: 58,345 5,763 1,645}

RATIOS

^{31/12/2005 31/12/2004 31/12/2003}

^{Turnover per employee: 1047749.77 924597.35 869729.62}

^{Net result / Turnover(%): 0.13 0.10 0.11}

^{Fin. Charges / Turnover(%):0.00 0.01 0.01}

^{Stock / Turnover(%): 0.10 0.12 0.10}

^{Net Margin(%): 13.08 9.96 11.32}

^{Return on Equity(%): 35.47 27.72 35.48}

^{Return on Assets(%): 20.60 17.11 19.23}

^{Dividends Coverage: 1.65 2.47 2.47}

^{Net Working capital: 16275303.00 11841913.00 9055728.00}

^{Cash Ratio: 0.32 0.16 0.10}

^{Quick Ratio: 1.47 1.47 1.32}

^{Current ratio: 2.23 2.24 1.89}

^{Receivables Turnover: 87.06 81.33 85.30}

^{Leverage Ratio: 0.72 0.62 0.84}

^{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 WITH NET WORTH IMPROVED BY 16.25% FROM S$19,935,525 IN FY 2004 TO S$23,175,383 IN FY 2005. THIS WAS DUE TO HIGHER ACCUMULATED PROFIT OF S$22,843,189 (2004: S$19,603,331); A RISE OF 16.53% FROM THE PRIOR FINANCIAL YEAR.}

^LEVERAGE:

^{IN THE SHORT-TERM, SUBJECT WAS LARGELY FINANCED BY TRADE CREDITORS WHICH MADE UP 59.03% (2004: 50.26%) OF THE TOTAL CURRENT LIABILITIES AND AMOUNTED TO S$7,788,738 (2004: S$4,805,209). THE BREAKDOWN IS AS FOLLOWS:}

^{-TRADE CREDITORS - 2005: S$5,408,414 (2004: S$3,625,864)}

^{-ULTIMATE HOLDING CORPORATION - 2005: - (2004: S$308,412)}

^{-RELATED CORPORATIONS - 2005: S$2,380,324 (2004: S$870,933)}

^{IN THE LONG-TERM, SUBJECT WAS LARGELY FINANCED BY LONG TERM LOANS WHICH MADE UP 96.26% (2004: 92.07%) OF THE TOTAL CURRENT LIABILITIES AND AMOUNTED TO S$3,398,075 (2004: S$2,570,221). THE BREAKDOWN IS AS FOLLOWS:}

^{-NON-CURRENT PORTION OF LONG-TERM BANK LOANS - 2005: S$3,398,075 (2004: S$2,570,221)}

^{AMOUNT DUE TO BANKS OF S$862,140 (2004: S$862,134) CONSISTED OF:}

^{CURRENT PORTION OF LONG-TERM BANK LOANS - 2005: S$862,140 (2004: S$862,134)}

^{IN ALL, LEVERAGE RATIO ROSE FROM 0.62 TIMES TO 0.72 TIMES AS A RESULT OF A GREATER RISE IN TOTAL LIABILITIES THAN TOTAL EQUITY.}

^LIQUIDITY:

^{IN GENERAL, SUBJECT'S LIQUIDITY SITUATION WAS PASSABLE AS SEEN FROM THE CHANGES IN NET WORKING CAPITAL AND LIQUIDITY RATIOS. CURRENT RATIO FELL SLIGHTLY TO 2.23 TIMES, DOWN FROM 2.24 TIMES AND QUICK RATIO REMAINED STABLE AT 1.47 TIMES.}

^{NET WORKING CAPITAL IMPROVED BY 37.44% FROM S$11,841,913 IN FY 2004 TO S$16,275,303.}

^{PROFITABILITY:}

^{REVENUE POSTED AN INCREASE OF 13.32% FROM S$55,475,841 IN FY 2004 TO S$62,864,986 AND NET PROFIT ROSE BY 48.76% TO S$8,219,858 (2004: S$5,525,408). HENCE, NET MARGIN ROSE TO 13.08% (2004: 9.96%).}

^{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$211,341 IN FY 2005 (2004: S$289,839).}

^{NOTES TO THE FINANCIAL STATEMENTS:}

^BORROWINGS:

^{THE WEIGHTED AVERAGE EFFECTIVE INTEREST RATES AT THE BALANCE SHEET DATE WERR AS FOLLOWS:}

^{BANK LOANS - 2005: 6.3% (2004: 4.2%)}

^{ALL BORROWINGS ARE SECURED BY WAY OF A FIRST LEGAL MORTGAGE OVER THE LEASEHOLD PROPERTIES, FIXED AND FLOATING CHARGE ON ALL THE ASSETS OF THE COMPANY AND CORPORATE GUARANTEE FROM THE HOLDING CORPORATION.}

^{THE FAIR VALUES ARE BASED ON DISCOUNTED CASH FLOWS USING THE BORROWING RATE WHICH THE DIRECTORS EXPECT WOULD BE AVAILABLE TO THE COMPANY AT THE BALANCE SHEET DATE.}

^{THE CARRYING AMOUNTS OF SHORT-TERM BORROWINGS AND FINANCE LEASE OBLIGATIONS APPROXIMATE THEIR FAIR VALUE.}

^{CONTINGENT LIABILITIES:}

^{THERE ARE CONTINGENT LIABILITIES FOR GUARANTEES GIVEN TO A BANK FOR FACILITIES EXTENDED TO A RELATED CORPORATION, AT 31 DECEMBER 2005 AMOUNTING TO S$5,070,000 (2004: S$3,300,000).}

BACKGROUND/OPERATION

^{THE COMPANY WAS INCORPORATED IN THE REPUBLIC OF SINGAPORE ON 19/07/1991 AS A LIMITED PRIVATE COMPANY AND IS TRADING UNDER ITS PRESENT NAMESTYLE AS "WHITFORD PTE LTD".}

^{AS AT 23/03/2007, THE COMPANY HAS ISSUED AND PAID-UP CAPITAL OF 332,194 SHARES OF A VALUE OF S$332,194.}

^{PRINCIPAL ACTIVITIES:}

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

^{1) MANUFACTURE OF PAINTS}

^{2) WHOLESALE OF PAINTS (INCLUDING VARNISHES AND SUPPLIES)}

^{DURING THE FINANCIAL YEAR UNDER REVIEW, THE PRINCIPAL ACTIVITIES OF THE COMPANY CONSIST OF THE MANUFACTURE AND SALE OF FLUOROPOLYMER COATINGS AND CHEMICALS.}

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

^{BACKGROUND OF WHITFORD GROUP:}

^{WHITFORD GROUP MAKE THE LARGEST, MOST COMPLETE LINE OF FLUOROPOLYMER COATINGS IN THE WORLD. WHITFORD WORLDWIDE HAS MANUFACTURING FACILITIES IN SEVEN COUNTRIES, WHITFORD OFFICES STAFFED BY WHITFORD EMPLOYEES IN ELEVEN, AND AGENTS IN AN ADDITIONAL TWENTY-FIVE. THE GROUP SELL IN MORE THAN FIFTY COUNTRIES.}

^{SUBJECT ENGAGES IN THE FOLLOWING ACTIVITIES:}

^{DESIGN, MANUFACTURE AND SUPPLY OF FLUOROPOLYMER AND SPECIALTY COATINGS PROVIDING VARIOUS PROPERTIES:}

^{* CORROSION RESISTANCE}

^{* CHEMICAL RESISTANCE}

^{* LOW FRICTION}

^{* DRY LUBRICATION}

^{* ABRASION RESISTANCE}

^{* TEMPERATURE RESISTANCE, RELEASE AND NONSTICK}

^{TRADE NAMES:}

^{* EXCALIBUR}

^{* ECLIPSE}

^{* QUANTANIUM}

^{* QUANTUM2}

^{* XYLAN}

^{* XYLAC}

^{* DYKOR}

^{* XYLAR}

^{* SUAVE}

^{* WHITFORD}

^{* ULTRALON}

^{INDUSTRIES SERVED (USED IN, BUT NOT LIMITED TO):}

^{* COOKWARE INTERIORS/EXTERIORS}

^{* BAKEWARE INTERIORS/EXTERIORS}

^{* SMALL APPLIANCES}

^{* INDUSTRIAL APPLICATIONS}

^{* AUTOMOTIVE (FLEXIBLE FINISHES)}

^{QUALITY ASSESSMENT:}

^{* BSEN ISO 9001: BSI REGISTERED}

^{FROM THE TELE-INTERVIEW CONDUCTED ON 28/03/2007, THE FOLLOWING WAS GATHERED:}

^{NUMBER OF EMPLOYEES:}

* COMPANY - 2007: 60

^{NO OTHER TRADE INFORMATION IS AVAILABLE ON 28/03/2007.}

^{THE COMPANY'S HOLDING CORPORATION IS WHITFORD B.V., A COMPANY INCORPORATED IN THE NETHERLANDS. THE COMPANY'S ULTIMATE HOLDING CORPORATION IS WHITFORD WORLDWIDE COMPANY, A COMPANY INCORPORATED IN THE UNITED STATES OF AMERICA.}

^{NUMBER OF EMPLOYEES (31 DECEMBER):}

^{* COMPANY - 2005: NOT AVAILABLE (2004: NOT AVAILABLE; 2003: 66; 2002 : 58)}

^{* GROUP - 2005: - (2004: -)}

^{REGISTERED AND BUSINESS ADDRESS:}

^{1 TUAS BASIN CLOSE}

^{SINGAPORE 638803}

^{- OWNED PREMISE}

^{- DATE OF CHANGE OF ADDRESS: 29/08/2001}

^{- MANUFACTURING AND SALES FACILITY}

^{YOUR PROVIDED ADDRESS:}

^{11 BIOPOLIS WAY HELIOS}

^#10-10/11

^{SINGAPORE 138667}

^{- INCORRECT}

^WEBSITE:

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

^EMAIL:

^{sales@whitfordww.com.sg}

MANAGEMENT

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

^{1) BRIAN EDWARD KILTY, AN AMERICAN}

^{- BASED IN UNITED STATES OF AMERICA.}

^{2) DAVID POND WILLIS JR, AN AMERICAN}

^{- BASED IN UNITED STATES OF AMERICA.}

^{3) PETER HAROLD NEELY, A BRITISH}

^{- BASED IN SINGAPORE.}

^{4) FOONG SUN FATT, A SINGAPOREAN}

^{- HOLDS NO OTHER DIRECTORSHIP IN OUR DATABASE.}

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.

Manufacturing sector

PAST PERFORMANCE

THE MANUFACTURING SECTOR GREW AT A MORE MODEST PACE OF 7.7% IN 4Q 2006, AFTER A 9.5% EXPANSION IN 3Q 2006. THIS WAS DUE MAINLY TO A FALL IN THE OUTPUT OF THE ELECTRONICS AND CHEMICALS CLUSTERS, AND SLOWER GROWTH IN THE PRECISION ENGINEERING CLUSTER. GROWTH IN THE TRANSPORT ENGINEERING CLUSTER EASED BUT REMAINED STRONG. MEANWHILE, THE BIOMEDICAL MANUFACTURING CLUSTER ACCELERATED FROM A GROWTH OF 4.7% IN 3Q 2006 TO 27% IN 4Q 2006. FOR THE WHOLE YEAR, THE MANUFACTURING SECTOR GREW BY 12%, UP FROM 9.5% IN 2005, SUPPORTED BY STRONGER PERFORMANCES IN THE TRANSPORT ENGINEERING, BIOMEDICAL

MANUFACTURING AND PRECISION ENGINEERING CLUSTERS.

THE CHEMICALS CLUSTER GREW 3.3% IN JANUARY 2007 WITH EXPANSIONS IN THE PETROCHEMICALS AND SPECIALTY CHEMICALS SEGMENTS AT 5.8% AND 7.6% RESPECTIVELY. HOWEVER, THESE EXPANSIONS WERE MODERATED BY THE CONTRACTION OF 2.3% IN THE PETROLEUM SEGMENT. OIL REFINERS REDUCED THEIR CRUDE OIL PROCESSING BECAUSE OF LOWER REFINING MARGINS. THE OUTPUT LEVEL WAS ALSO AFFECTED BY SOME PLANT SHUTDOWNS FOR MAINTENANCE.

OUTLOOK

THE MANUFACTURING SECTOR IS CAUTIOUSLY OPTIMISTIC ABOUT BUSINESS CONDITIONS IN THE NEXT SIX MONTHS COMPARED TO THE LAST QUARTER OF 2006. OVERALL, A WEIGHTED 18% OF THE MANUFACTURERS EXPECT AN IMPROVEMENT IN BUSINESS CONDITIONS WHILE A WEIGHTED 11% PREDICT DETERIORATION. THIS RESULTS IN A NET WEIGHTED BALANCE OF 7% OF MANUFACTURERS HAVING AN OPTIMISTIC OUTLOOK, COMPARED TO 22% IN LAST QUARTER’S SURVEY. THE MODERATION IN SENTIMENTS CAN BE ATTRIBUTED MAINLY TO A WEAKER OUTLOOK IN THE ELECTRONICS CLUSTER AND SEASONAL SLOWDOWN DUE TO FESTIVE HOLIDAYS IN THE EARLY PART OF THE YEAR.

THE CHEMICALS CLUSTER FORECASTS AN IMPROVEMENT IN THE BUSINESS CONDITIONS IN THE FIRST SIX MONTHS OF 2007, COMPARED WITH THE FOURTH QUARTER OF 2006. THIS POSITIVE OUTLOOK IS LED BY THE SPECIALTIES AND OTHER CHEMICALS SEGMENT, WHICH ANTICIPATE A PICK-UP IN ACTIVITIES DUE TO THE FESTIVE SEASON AND STRONG MARKET DEMAND. THE SPECIALTIES SEGMENT EXPECTS HIGHER OUTPUT OF PAINTS AND INDUSTRIAL GASES IN THE FIRST QUARTER OF 2007 COMPARED TO THE FOURTH QUARTER OF 2006, IN TANDEM WITH EXPECTED INCREASES IN DOMESTIC AND EXPORT SALES. IN THE PETROLEUM REFINING SEGMENT, THROUGHPUT IS EXPECTED TO HOLD STEADY COMPARED TO THE PREVIOUS QUARTER, DESPITE SOME REFINERY UNITS UNDERGOING MAINTENANCE AND REPAIR IN THE FIRST QUARTER OF 2007.

EXTRACTED FROM: MINISTRY OF TRADE AND INDUSTRY, SINGAPORE

SINGAPORE DEPARTMENT OF STATISTICS

economic development board

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