MIRA INFORM REPORT

Report Date :

30.04.2007

IDENTIFICATION DETAILS

Name :	SUMITOMO CHEMICAL SINGAPORE PTE LTD
Registered Office :	^150 Beach Road, #19-05, Gateway West, Singapore - 189720
Country :	^Singapore
Financials (as on) :	31.12.2005
Date of Incorporation :	^15/07/1996
Com. Reg. No.:	^199605172M
Legal Form :	^Pte Ltd
Line of Business :	Provision of Personnel, Management and related Administrative Services to its subsidiaries, etc

RATING & COMMENTS

MIRA’s Rating :

A

RATING		STATUS	PROPOSED CREDIT LINE
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

Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear

Subject Company

SUMITOMO CHEMICAL SINGAPORE PTE LTD

Line Of Business 

PROVISION OF PERSONNEL, MANAGEMENT AND RELATED ADMINISTRATIVE SERVICES TO ITS SUBSIDIARIES, ETC

Parent Company

SUMITOMO CHEMICAL COMPANY LIMITED

(PERCENTAGE OF SHAREHOLDING: 100.00%)

Financial Elements

FY 2005

CONSOLIDATED

Sales : USD261,077,835

Networth : USD132,780,196

Paid-Up Capital : USD88,627,927

Net result : USD14,759,344

Net Margin(%) : 5.65

Return on Equity(%) : 11.12

Leverage Ratio : 1.49

COMPANY IDENTIFICATION

^{Subject Company: SUMITOMO CHEMICAL SINGAPORE PTE LTD}

^{Former Name: -}

^{Business Address: 150 BEACH ROAD}

^#19-05

^{GATEWAY WEST}

^{Town: SINGAPORE}

^{Postcode: 189720}

^{County: -}

^{Country: Singapore}

^{Telephone: 6296 8183}

^{Fax: 6295 2765}

^{ROC Number: 199605172M}

^{Reg. Town: -}

SUMMARY

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

^{Legal Form: Pte Ltd}

^{Date Inc.: 15/07/1996}

^{Previous Legal Form: -}

^{Summary year: 31/12/2005}

^{Sales: 261,077,835}

^{Net worth: 132,780,196}

^{Capital: -}

^{Paid-Up Capital: 88,667,927}

^{Employees: Not Available}

^{Net result: 14,759,344}

^{Share value: -}

^{Auditor: PRICEWATERHOUSECOOPERS}

REFERENCES

^{Litigation: No}

^{Company status: TRADING}

^{Started: 15/07/1996}

PRINCIPAL(S)

^{MASAKI SHIMA TG3379880 Managing Director}

DIRECTOR(S)

^{VEMALA RAJAMANICKAM S0347048B Company Secretary}

^{Appointed on: 16/07/1996}

^{Street: 141 CEYLON ROAD}

^{Town: SINGAPORE}

^{Postcode: 429704}

^{Country: Singapore}

^{MASAKI SHIMA TG3379880 Director}

^{Appointed on: 08/12/2006}

^{Street: 1 ANDERSON ROAD}

^#07-02

^{THE SHANGRI-LA APARTMENTS}

^{Town: SINGAPORE}

^{Postcode: 259983}

^{Country: Singapore}

^{MASAKI SHIMA TG3379880 Managing Director}

^{Appointed on: 08/12/2006}

^{Street: 1 ANDERSON ROAD}

^#07-02

^{THE SHANGRI-LA APARTMENTS}

^{Town: SINGAPORE}

^{Postcode: 259983}

^{Country: Singapore}

^{NORIO ISHII F5555783R Director}

^{Appointed on: 01/01/2006}

^{Street: 36 DOVER RISE}

^#14-01

^{DOVER PARKVIEW}

^{Town: SINGAPORE}

^{Postcode: 1386685}

^{Country: Singapore}

^{TOSHIRO KOJIMA TG8502234 Director}

^{Appointed on: 01/12/2006}

^{Street: KINUNODAI, 6-6-12, TSUKUBA-MIRAI}

^{300-2436, IBARAKI}

^{Town: -}

^{Postcode: -}

^{Country: Japan}

^{MASAYUKI MIZUNO TG1610403 Director}

^{Appointed on: 15/06/2004}

^{Street: 2-10-5-302 SONEHIGASHINOCHO}

^TOONAKA-CITY

^{Town: OSAKA}

^{Postcode: 561-0802}

^{Country: Japan}

FORMER DIRECTOR(S)

^{MATSUKAWA KAZUTOSHI MN0100732}

^{KITAURA YASUHIKO F1910325X}

^{HIROMASA YONEKURA TE6744915}

^{NG MUI MUI HILDA S1634062F}

ACTIVITY(IES)

^{HOLDING COMPANIES Code:11320}

^{CHEMICALS Code:3970}

^{BASED ON ACRA'S RECORD AS AT 24/04/2007}

^{1) OTHER INVESTMENT HOLDING COMPANIES; PROVISION OF SVC TO ITS SUBSIDIARIES, ASSOCIATED, RELATED & HOLDING}

CHARGES

No Charges On Premises/Property In Our Database

PREMISES/PROPERTY INFORMATIONS

No Premises/Property Information In Our Databases

ASSOCIATED COMPANY(IES)

^{SUMITOMO SEIKA SINGAPORE PTE. LTD.}

^{20 CECIL STREET}

^#20-08

^{EQUITY PLAZA}

^{SINGAPORE Singapore}

SHAREHOLDERS(S)

^{SUMITOMO CHEMICAL COMPANY LIMITED 197,740,840 Company}

^{Street: TOKYO SUMITOMO TWIN BUILDING}

^{27-1 SHINKAWA 2-CHOME CHU-KU TOKYO}

^{Town: TOKYO}

^{Postcode: 104-8260}

^{Country: Japan}

FORMER SHAREHOLDER(S)

^{SHARMINI CHITRAN 1}

HOLDING COMPANY

^{SUMITOMO CHEMICAL COMPANY LIMITED UF05856G %: 100}

SUBSIDIARY(IES)

^{SINGAPORE METHYL METHACRYLATE PTE. LTD.}

^{SUMIKA MMA POLYMER PTE LTD}

PAYMENT HISTORY AND EXPERIENCES

^{Trade Morality: AVERAGE}

^{Liquidity: LACKING}

^{Payments: REGULAR}

^{Trend: UPWARD}

^{Financial Situation: AVERAGE}

LITIGATION(S)

No Litigation In Our Database

FINANCIAL ELEMENTS

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

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

^{Date Account Lodged: 28/07/2006}

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

^{Number of weeks: 52 52}

^{Consolidation Code: CONSOLIDATED CONSOLIDATED}

^{--- ASSETS}

^{Preliminary Exp 60,816,560 96,456,700}

^{Intangible Fixed Assets: 10,370,908 10,370,908}

^{Tangible Fixed Assets: 161,417,644 79,521,829}

^{Investments 4,300,083 3,392,853}

^{Total Fixed Assets: 236,905,195 189,742,290}

^{Inventories: 32,101,804 20,628,308}

^{Receivables: 43,022,035 25,656,711}

^{Cash,Banks,Securities: 2,050,559 2,701,274}

^{Other current assets: 1,342,684 3,332,197}

^{Total Current Assets: 78,517,082 52,318,490}

^{TOTAL ASSETS: 315,422,277 242,060,780}

^{--- LIABILITIES}

^{Equity capital: 88,667,927 88,667,927}

^{Reserves: 1,926,091 1,926,091}

^{Profit & loss Account: 42,186,178 27,426,834}

^{Total Equity: 132,780,196 118,020,852}

^{Long Term Loans: 69,385,000 49,875,000}

^{L/T deferred taxes: 6,551,635 5,256,279}

^{Total L/T Liabilities: 75,936,635 55,131,279}

^{Trade Creditors: 38,739,005 27,704,147}

^{Prepay. & Def. charges: 2,496,609 1,136,509}

^{Due to Bank: 45,050,000 20,099,000}

^{Provisions: 1,767,820 2,211,670}

^{Other Short term Liab.: 18,652,012 17,757,323}

^{Total short term Liab.: 106,705,446 68,908,649}

^{TOTAL LIABILITIES: 182,642,081 124,039,928}

PROFIT & LOSS ACCOUNT

^{Net Sales 261,077,835 244,427,152}

^{Purchases,Sces & Other Goods: 228,888,660 214,674,363}

^{Gross Profit: 32,189,175 29,752,789}

^{NET RESULT BEFORE TAX: 17,057,869 9,940,308}

^{Tax: 2,298,525 -159,482}

^{Net income/loss year: 14,759,344 10,099,790}

^{Interest Paid: 2,040,450 1,094,656}

^{Depreciation: 23,699,214 23,400,643}

^{Directors Emoluments: 711,048 847,752}

^{Wages and Salaries: 7,934,072 6,855,424}

RATIOS

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

^{Net result / Turnover(%): 0.06 0.04}

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

^{Stock / Turnover(%): 0.12 0.08}

^{Net Margin(%): 5.65 4.13}

^{Return on Equity(%): 11.12 8.56}

^{Return on Assets(%): 4.68 4.17}

^{Net Working capital: -28188364.00 -16590159.00}

^{Cash Ratio: 0.02 0.04}

^{Quick Ratio: 0.42 0.41}

^{Current ratio: 0.74 0.76}

^{Receivables Turnover: 59.32 37.79}

^{Leverage Ratio: 1.49 1.15}

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

^{NET WORTH:}

^{THE BALANCE SHEET WAS CONSIDERED PASSABLE WITH NET WORTH IMPROVED BY 12.51% FROM USD118,020,852 IN 2004 TO S$132,780,196 IN 2005.}

^{THIS WAS DUE TO HIGHER RETAINED EARNINGS OF USD42,186,178 (2004: USD27,426,834); A RISE OF 53.81% FROM THE PRIOR FINANCIAL YEAR.}

^LEVERAGE:

^{AMOUNTS DUE TO BANKS ROSE BY 1.24 TIMES TO USD45,050,000 (2004: USD20,099,000), AND CONSIST OF THE FOLLOWING:}

^{-SHORT TERM BANK LOANS - 2005: USD30,800,000 (2004: USD11,350,000)}

^{-CURRENT PORTION OF LONG TERM BANK LOANS - 2005: USD14,250,000 (2004: USD8,749,000)}

^{TRADE CREDITORS ROSE BY 39.83% TO USD38,739,005 (2004: USD27,704,147), AND CONSIST OF THE FOLLOWING:}

^{-THIRD PARTIES - 2005: USD6,012,461 (2004: USD5,004,859)}

^{-HOLDING CORPORATION - 2005: USD26,327,717 (2004: USD18,631,488)}

^{-RELATED CORPORATION - 2005: USD2,053,767 (2004: USD749,729)}

^{-RELATED PARTY - 2005: USD4,345,060 (2004: USD3,318,071)}

^{SUBJECT'S LONG TERM LIABILITIES ROSE BY 37.74% TO USD75,936,635 (2004: USD55,131,279), AND CONSIST OF THE FOLLOWING:}

^{-BORROWINGS - 2005: USD69,385,000 (2004: USD49,875,000)}

^{-DEFERRED INCOME TAX LIABILITIES - 2005: USD6,551,635 (2004: USD5,256,279)}

^{IN ALL, LEVERAGE RATIO ROSE FROM 1.15 TIMES TO 1.49 TIMES AS A RESULT OF A MORE THAN PROPORTIONATE INCREASE IN TOTAL LIABILITIES AS COMPARED TO THE RISE IN TOTAL EQUITY.}

^LIQUIDITY:

^{IN GENERAL, SUBJECT'S LIQUIDITY SITUATION WAS INADEQUATE AS SEEN FROM THE NEGATIVE NET WORKING CAPITAL, WHICH WORSENED BY 69.91% TO USD28,188,364 (2004: USD16,590,159).}

^{CURRENT RATIO FELL TO 0.74 TIMES, DOWN FROM 0.76 TIMES BUT QUICK RATIO IMPROVED TO 0.42 TIMES FROM 0.41 TIMES IN 2004.}

^{THESE COULD INDICATE THAT SUBJECT MAY FACE DIFFICULTIES IN FULFILLING ITS FUTURE SHORT TERM LIABILITIES.}

^{PROFITABILITY:}

^{REVENUE POSTED AN INCREASE OF 6.81% FROM USD244,427,152 IN 2004 TO USD261,077,835 AND NET PROFIT SURGED BY 46.14% TO USD14,759,344 (2004: USD10,099,790).}

^{THIS COULD BE DUE TO HIGHER GROSS MARGIN OF 12.53% IN 2005 (2004: 12.17%).}

^{HENCE, NET MARGIN ROSE TO 5.65% (2004: 4.13%).}

^{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 SHOWN BY ITS INTEREST COVERAGE RATIO OF 9.36 TIMES (2004: 10.08 TIMES).}

^{NON-CURRENT ASSETS:}

^{THE FOLLOWING ITEMS ARE CLASSIFIED UNDER PRELIMINARY:}

^{-LOAN TO FORMER ASSOCIATED COMPANY - 2005: - (2004: USD4,218,591)}

^{-CATALYST - 2005: USD17,006,836 (2004: USD8,661,004)}

^{-CONSTRUCTION IN PROGRESS - 2005: USD38,454,635 (2004: USD82,095,294)}

^{-LICENCE FEES - 2005: USD5,355,089 (2004: USD1,481,811)}

^{NOTES TO THE FINANCIAL STATEMENTS:}

^BORROWINGS

^{A) SECURITY GRANTED AND MATURITY OF BORROWINGS}

^{THE SHORT TERM BANK LOANS ARE GUARANTEED BY THE HOLDING AND ULTIMATE HOLDING CORPORATION. THE SHORT TERM BANK LOAN FROM RELATED CORPORATION IS UNSECURED AND IS REPAYABLE ON DEMAND.}

^{THE LONG TERM BANK LOANS ARE GUARANTEED BY THE HOLDING AND ULTIMATE HOLDING CORPORATION. REPAYMENT OF BANK LOAN 1 COMMENCED IN DECEMBER 2005 WITH INSTALMENTS OF USD7,125,000 PAYABLE IN JUNE AND DECEMBER EACH YEAR UNTIL JUNE 2009. REPAYMENT OF BANK LOAN 2 WILL COMMENCE IN MAY 2008 WITH INSTALMENTS OF USD16,126,000 PAYABLE IN MAY AND NOVEMBER EACH YEAR UNTIL NOVEMBER 2010. THE CURRENT BORROWINGS HAVE AN AVERAGE MATURITY OF 3 MONTHS (2004: 3.3 MONTHS) FROM THE END OF THE FINANCIAL YEAR.}

^COMMITMENTS

^{CAPITAL COMMTIMENTS}

^{CAPITAL EXPENDITURES CONTRACTED FOR AT THE BALCNE SHEET DATE BUT NOT RECOGNISED IN THE FINANCIAL STATEMENTS:}

^{PURCHASE OF PROPERTY, PLANT AND EQUIPMENT - 2005: USD183,220,359 (2004: USD14,436,031)}

BACKGROUND/OPERATION

^{THE COMPANY WAS INCORPORATED IN THE REPUBLIC OF SINGAPORE ON 15/07/1996 AS A LIMITED PRIVATE COMPANY AND IS TRADING UNDER THE PRESENT NAMESTYLE OF "SUMITOMO CHEMICAL SINGAPORE PTE LTD".}

^{AS AT 24/04/2007, THE COMPANY HAS AN ISSUED AND PAID-UP CAPITAL OF 197,740,840 SHARES, OF A VALUE OF S$197,740,840.}

^{PRINCIPAL ACTIVITIES:}

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

^{1) OTHER INVESTMENT HOLDING COMPANIES; PROVISION OF SVC TO ITS SUBSIDIARIES, ASSOCIATED, RELATED & HOLDING COMPANIES}

^{2) WHOLESALE OF CHEMICAL AND CHEMICAL PRODUCTS}

^{DURING THE FINANCIAL YEAR (S) UNDER REVIEW, THE PRINCIPAL ACTIVITIES OF THE COMPANY ARE THE PROVISION OF SERVICES, WHICH INCLUDE PROVISION OF PERSONNEL, MANAGEMENT AND RELATED ADMINISTRATIVE SERVICES TO ITS SUBSIDIARIES, ASSOCIATED COMPANY, RELATED CORPORATIONS AND HOLDING CORPORATION; MANAGING AND OPERATING UTILITIES AND AUXILLIARY SERVICES FOR ITS SUBSIDIARIES AND ASSOCIATED COMPANY, TRADING IN CHEMICALS AND INVESTMENT HOLDING.}

^{THE PRINCIPAL ACTIVITIES OF THE GROUP ARE THE PRODUCTION AND SUPPLY OF METHYL METHACRYLATE ("MMA") MONOMERS, POLYMERS AND ISOBUTYLENE.}

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

^ACTIVITIES

^{- MANUFACTURER, SALES AND MARKETING OF GLACIAL ACRYLIC ACID, ACRYLIC ESTERS, MMA}

^{MONOMER AND MMA POLYMER}

^{NUMBER OF EMPLOYEES}

^{- ABOUT 120}

^PRODUCTS

^{- MMA MONOMER / POLYMERS}

^{- CROP PROTECTION CHEMICALS}

^{- ENVIRONMENTAL HEALTH CHEMICALS}

^{- ANIMAL NUTRITION CHEMICALS}

^{- IT-RELATED CHEMICALS}

^{EXPORT COUNTRIES}

^{- SOUTHEAST ASIA, CHINA, TAIWAN, INDIA, THE MIDDLE AND NEAR EAST, SOUTH AFRICA, OCEANIA, EUROPE AND THE US}

^{SUBJECT IS A MEMBER OF THE FOLLOWING ENTITIES}

^{- JAPANESE CHAMBER OF COMMERCE & INDUSTRY}

^{- SINGAPORE MANUFACTURERS' FEDERATION}

^{NO OTHER TRADE INFORMATION WAS MADE AVAILABLE AS TELE-INTERVIEW WAS NOT GRANTED ON 30/04/2007.}

^{THE COMPANY’S HOLDING AND ULTIMATE HOLDING CORPORATION IS SUMITOMO CHEMICAL COMPANY LIMITED, INCORPORATED IN JAPAN.}

^{NUMBER OF EMPLOYEES (31 DECEMBER)}

^{- CONSOLIDATED - 2005: NOT AVAILABLE (2004: NOT AVAILABLE)}

^{REGISTERED ADDRESS:}

^{1 MARINA BOULEVARD}

^#28-00

^{ONE MARINE BOULEVARD}

^{SINGAPORE 018989}

^{DATE OF CHANGE OF ADDRESS: 19/04/2004}

^{BUSINESS ADDRESS:}

^{150 BEACH ROAD}

^#19-05

^{GATEWAY WEST}

^{SINGAPORE 189720}

^{- OFFICE}

^{- RENTED PREMISE}

^{- OWNED BY: GATEWAY LAND LIMITED}

^{OTHER BUSINESS ADDRESS:}

^{17 SAKRA ROAD}

^{JURONG ISLAND}

^{SINGAPORE 627886}

^{- TEL: 65 6867 6714}

^{- FAX: +65 6867 6749}

^--PLANT

^WEBSITE:

^{http://www.scs-chem.com.sg}

^EMAIL:

^{mma@scs-chem.com.sg}

^{agrochem@scs-chem.com.sg}

^{it-related@scs-chem.com.sg}

^{tc@scs-chem.com.sg}

MANAGEMENT

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

^{1) NORIO ISHII, A JAPANESE}

^{- BASED IN SINGAPORE}

^{2) MASAYUKI MIZUNO, A JAPANESE}

^{- BASED IN JAPAN}

^{3) MASAKI SHIMA, A JAPANESE}

^{- BASED IN SINGAPORE}

^{4) TOSHIRO KOJIMA, 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.

OVERVIEW OF SINGAPORE

PAST PERFORMANCE

SINGAPORE’S ECONOMY GREW BY 6.6% IN 4Q 2006, AFTER A 7.0% GROWTH IN 3Q 2006. THE GROWTH MOMENTUM, ON AN ANNUALISED QUARTER-TO-QUARTER BASIS, DOUBLED TO 7.9% IN 4Q 2006, FROM 3.9% IN THE PREVIOUS QUARTER. THIS BROUGHT FULL-YEAR REAL GDP GROTH TO 7.9%, HIGHER THAN THE 6.6% GROWTH IN 2005.

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 WHOLESALE AND RETAIL TRADE SECTOR EXPANDED 6.9% IN 4Q 2006, BUT ITS GROWTH MOMENTUM WAS DOWN BY 3.5%. THE WHOLESALE SEGMENT MODERATED, WITH GROWTH OF NON-OIL RE-EXPORTS HALVED FROM 13% IN 3Q 2006 TO 6.3% IN 4Q 2006. PERFORMANCE OF THE RETAIL SEGMENT IMPROVED FURTHER AS RETAIL SALES WENT UP 7.9% IN 4Q 2006, COMPARED TO 5.2% IN THE PREVIOUS QUARTER. OVER 2006, THE WHOLESALE AND RETAIL SECTOR EXPANDED STRONGLY BY 10%, UP FROM 9.6% IN 2005.

THE FINANCIAL SERVICES SECTOR EXPANDED BY 11% IN 4Q 2006, AFTER GROWING BY 7.4% FROM THE PREVIOUS QUARTER. THE EXPANSION WAS BROAD-BASED ACROSS MOST SEGMENTS. IN PARTICULAR, THE STOCK TRADING SEGMENT ENJOYED A SHARP INCREASE IN ACTIVITY DURING THE QUARTER. FUND MANAGEMENT, ASIAN CURRENCY UNITS, AND FOREX SEGMENTS ALSO REGISTERED STRONG GROWTH IN 4Q 2006. THE STRONG PERFORMANCE IN THE FINAL QUARTER BROUGHT THE SECTOR’S FULL-YEAR GROWTH TO 9.2%, HIGHER THAN THE 7.6% GAIN IN 2005.

THE CONSTRUCTION SECTOR CONTINUED TO EXPAND BY 4.7%, FOLLOWING 5.8% IN 3Q 2006. GROWTH MOMENTUM ON A SEASONALLY ADJUSTED QUARTER-ON-QUARTER BASIS REMAINED STRONG AT 12%. CERTIFIED PAYMENTS GREW SLIGHTLY BY 0.7%, DOWN FROM 9.8% IN 3Q 2006. CONTRACTS AWARDED DIPPED 8.0% IN 4Q 2006 AFTER A RISE IN GROWTH IN THE PREVIOUS QUARTER. FOR THE YEAR, THE SECTOR GREW BY 2.7%, UP FROM 0.7% IN 2005.

THE HOTELS AND RESTAURANTS SECTOR CONTINUED TO STRENGTHEN IN 4Q 2006 WITH A 6.1% INCREASE FOLLOWING A 4.4% GROWTH IN 3Q 2006. VISITOR ARRIVALS ROSE 8.4% COMPARED WITH 4.5% IN THE PREVIOUS QUARTER. THIS HELPED TO RAISE THE AVERAGE OCCUPANCY RATE OF HOTELS TO 88% IN 4Q 2006, COMPARED TO 85% A YEAR EARLIER. HOTEL ROOM REVENUES WENT UP 12% AFTER A 28% INCREASE IN 3Q 2006. FOR THE YEAR AS A WHOLE, THE SECTOR GREW BY 5.1%, UP FROM 4.3% IN 2005, ON THE BACK OF A RECORD 9.7 MILLION VISITOR ARRIVALS.

THE FINANCIAL SERVICES SECTOR EXPANDED BY 11% IN 4Q 2006, AFTER GROWING BY 7.4% A QUARTER EARLIER. THE EXPANSION WAS BROAD-BASED ACROSS MOST SEGMENTS. IN PARTICULAR, THE STOCK TRADING SEGMENT ENJOYED AN INCREASE IN ACTIVITY DURING THE QUARTER. FUND MANAGEMENT, ASIAN CURRENCY UNITS, AND FOREX SEGMENTS ALSO REGISTERED STRONG GROWTH IN 4Q 2006. THE STRONG PERFORMANCE IN THE FINAL QUARTER BROUGHT THE SECTOR’S FULL-YEAR GROWTH TO 9.2%, HIGHER THAN THE 7.6% GAIN IN 2005.

THE TRANSPORT AND STORAGE SECTOR INCREASE BY 4.0% IN 4Q 2006, SAME AS THE PREVIOUS QUARTER. WITHIN THE SECTOR, THE AIR TRANSPORT SEGMENT TURNED IN BETTER PERFORMANCE WHILE THE WATER TRANSPORT SEGMENT MODERATED. SLOWER GROWTH WAS SEEN IN BOTH SEA CARGO AND AIR CARGO HANDLED. MEANWHILE, GROWTH IN AIR PASSENGERSHANDLED AND CONTAINER THROUGHPUT IMPROVED COMPARED TO 3Q 2006. OVERALL, THE TRANSPORT AND STORAGE SECTOR EXPANDED 4.3% IN 2006, SIMILAR TO THE 4.2% IN 2005.

THE INFORMATION AND COMMUNICATIONS SECTOR POSTED A BETTER PERFORMANCE IN 4Q 2006 WITH A GROWTH OF 6.0%, FOLLOWING A 3.6% GAIN IN 3Q 2006. THE NUMBER OF BROADBAND SUBSCRIBERS CONTINUED TO REGISTER DOUBLE-DIGIT GROWTH IN THE QUARTER. INTERNATIONAL TELEPHONE CALL DURATION AND THE NUMBER OF MOBILE PHONE SUBSCRIBERS GREW AT A FASTER PACE COMPARED TO THE PREVIOUS QUARTER. THE SECTOR EXPANDED BY 4.6% DURING THE YEAR, COMPARED TO 5.5% IN 2005.

THE BUSINESS SERVICES SECTOR ROSE BY 5.4% IN 4Q 2006, FOLLOWING A 5.1% GAIN IN THE PREVIOUS QUARTER. THE EXPANSION IN THE SECTOR WAS DRIVEN BY ACTIVITIES IN THE CONSULTANCY, ARCHITECTURAL & ENGINEERING AND BUSINESS REPRESENTATIVE OFFICES AS WELL AS REAL ESTATE SEGMENT. FOR THE YEAR AS A WHOLE, THE BUSINESS SERVICES SECTOR INCREASED BY 5.8%, SIMILAR TO THE 5.9% GROWTH ACHIEVED IN 2005.

APART FROM WHOLESALE AND RETAIL TRADE, ALL SECTORS EXPERIENCED POSITIVE GROWTH MOMENTUM IN 4Q 2006. FOR 2006 AS A WHOLE, ALL SECTORS REGISTERED GROWTH, LED BY MANUFACTURING, WHOLESALE & RETAIL TRADE AND FINANCIAL SERVICES.

OUTLOOK

THE OUTLOOK FOR THE ECONOMY IS GENERALLY POSITIVE ALTHOUGH THERE ARE SOME DOWNSIDE RISKS. THE AVIAN FLU PANDEMIC TREAT HAS RESURFACED AS A GROWING NUMBER OF COUNTRIES REPORTED CASES OF INFECTION IN BIRDS IN RECENT WEEKS. OTHER UNCERTAINTIES INCLUDE THE DISORDERLY UNWINDING OF GLOBAL IMBALANCES, TERRORISM AND THE VULNERABILITY OF OIL PRICES TO SUPPLY SHOCKS. AS A RESULT, THE ECONOMIC GROWTH FORECAST FOR 2007 IS BEING RAISE FROM 4.0% TO 6.0% TO 4.5% TO 6.5%.

REAL ESTATE DEVELOPERS AND AGENTS AND 73% OF THE REAL ESTATE FIRMS ARE THE MOST OPTIMISTIC. THIS SECTOR IS EXPECTING TO DO WELL IN THE FIRST HALF OF 2007.

THE MANUFACTURING SECTOR IS CAUTIOUSLY OPTIMISTIC ABOUT BUSINESS SITUATIONS IN THE NEXT SIX MONTHS OF 2007.

WITHIN THE FINANCIAL SERVICES INDUSTRY, 46% OF THE FIRMS, INCLUDING COMPANIES ENGAGED IN BANKING AND FINANCE, STOCK, SHARE AND BOND BROKERAGE, FUND MANAGEMENT AND INSURANCE ACTIVITIES, ANTICIPATED HIGHER LEVELS OF BUSINESS ACTIVITIES IN THE FIRST 6 MONTHS.

IN THE BUSINESS SERVICES INDUSTRY, 27% OF THE FIRMS EXPECTS BUSINESS TO PICK UP DURING THE FIRST HALF OF THE YEAR. IN PARTICULAR, FIRMS ENGAGED IN ACCOUNTING, ARCHITECTURAL AND ENGINEERING, ADVERTISING AND SECURITY SERVICES AND THE RENTING OF CONSTRUCTION AND INDUSTRIAL MACHINERY FORESEE HIGHER DEMAND FOR THEIR SERVICES.

WITHIN THE CATERING TRADE INDUSTRY, 31% OF THE FIRM EXPRESSES POSITIVE BUSINESS SENTIMENTS. MOST HOTELIERS EXPECTS TO DO WELL IN THE FIRST HALF, IN ANTICIPATION OF HIGHER TOURIST ARRIVALS AND OCCUPANCY RATE.

RETAILERS, PARTICULARLY DEPARTMENT STORES OWNERS AND RETAILER OF FURNITURE AND FURNISHINGS, PREDICTS BUSINESS CONDITIONS TO IMPROVE IN THE NEXT SIX MONTHS.

WHOLESALERS ARE GENERALLY LESS OPTIMISTIC ABOUT THE BUSINESS ENVIRONMENT. IN PARTICULAR, DEALERS OF JEWELLERY AND WATCHES, INDUSTRIES MACHINERY AND EQUIPMENT, TELECOMMUNICATIONS EQUIPMENT AND ELECTRONIC COMPONENTS ARE THOSE WHO FORESEE SLOWER BUSINESS IN THE COMING MONTHS.

ALSO, TRANSPORT AND COMMUNICATIONS INDUSTRY IS LESS POSITIVE ABOUT THE BUSINESS OUTLOOK. SHIPPING LINES EXPECT SLOWER BUSINESS IN THE FIRST HALF DUE TO SEASONAL FACTORS. IN CONTRAST, FIRMS PROVIDING POST AND COURIER SERVICES FORESEE MORE FAVOURABLE CONDITIONS.

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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