MIRA INFORM REPORT

Report Date :

17.05.2007

IDENTIFICATION DETAILS

Name :	CPM/PACIFIC (PRIVATE) LIMITED

Registered Office :	²¹^{Gul Drive, Singapore}^{– 629470}

Country :	Singapore

Financials (as on) :	30.09.2006

Date of Incorporation :	^01/03/1969

Com. Reg. No.:	^196900113Z

Legal Form :	^{Pte Ltd}

Line of Business :	Manufacturing and Selling of Dies Used In Pellet Mills, Etc

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

CPM/PACIFIC (PRIVATE) LIMITED

Line Of Business

MANUFACTURING AND SELLING OF DIES USED IN PELLET MILLS, ETC

Parent Company

CPM ACQUISITION CORP

(PERCENTAGE OF SHAREHOLDING: 100.00%)

Financial Elements

FY 2006

COMPANY

Sales : S$13,196,693

Networth : S$14,754,481

Paid-Up Capital : S$1,200,000

Net result : S$1,360,482

Net Margin(%) : 10.31

Return on Equity(%) : 9.22

Leverage Ratio : 0.24

COMPANY IDENTIFICATION

^{Subject Company: CPM/PACIFIC
(PRIVATE) LIMITED}

^{Former Name: -}

^{Business Address: 21 GUL
DRIVE}

^{Town:
SINGAPORE}

^{Postcode: 629470}

^{County: -}

^{Country: Singapore}

^{Telephone: 6265
0701}

^{Fax: 6268 6428}

^{ROC Number: 196900113Z}

^Reg.^Town^{:
-}

SUMMARY

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

^{Legal Form: Pte
Ltd}

^{Date Inc.: 01/03/1969}

^{Previous Legal Form: -}

^{Summary year: 30/09/2006}

^{Sales: 13,196,693}

^{Net worth: 14,754,481}

^{Capital: -}

^{Paid-Up Capital: 1,200,000}

^{Employees: Not
Available}

^{Net result: 1,360,482}

^{Share value: -}

^{Auditor: PRICEWATERHOUSECOOPERS}

REFERENCES

^{Litigation: No}

^{Company status: TRADING}

^{Started: 01/03/1969}

PRINCIPAL(S)

^{TAN YEOW KOON S0319261Z Director}

DIRECTOR(S)

^{TAN YEOW KOON S0319261Z Company Secretary}

^{Appointed on: 03/05/1987}

^{Street: 200 LOYANG AVENUE}

^#05-03

^{LOYANG VALLEY}

^{Town: SINGAPORE}

^{Postcode: 509058}

^{Country: Singapore}

^{TAN YEOW KOON S0319261Z Director}

^{Appointed on: 30/06/1990}

^{Street: 200 LOYANG AVENUE}

^#05-03

^{LOYANG VALLEY}

^{Town: SINGAPORE}

^{Postcode: 509058}

^{Country: Singapore}

^{TED WAITMAN 026128553 Director}

^{Appointed on: 31/03/1998}

^{Street: 1001 GATEWAY BOULEVARD}

^{WAVERLY IOWA}

^{Town: IOWA}

^{Postcode: -}

^{Country: United States}

^{CHAN KHENG HONG S1262569C Director}

^{Appointed on: 15/05/2001}

^{Street: 2 LAKEPOINT DRIVE}

^#04-06

^LAKEPOINT

^{Town: SINGAPORE}

^{Postcode:
648923}

^{Country: Singapore}

FORMER DIRECTOR(S)

^{TING MICHAEL S1354058F}

^{PITSCH LARRY H SB2087043}

^{MAYO MAURICE G E655716}

^{SUKHIA RAVI
KUMAR K916016}

^{WENDEBORN RICHARD D M104839}

^{ARNOLDSON HAKAN N S51319769}

^{SOPER ROBERT L A217708}

^{ELY EUGENE
WESLEY SE2138269}

^{ETTIE GORDON E SD2278472}

ACTIVITY(IES)

^{DIE MAKERS Code:6520}

^{MILLING MACHINES Code:14132}

^{BASED ON ACRA'S RECORD AS AT
16/05/2007}

^{1) MANUFACTURE OF DIES, MOULDS, TOOLS, JIGS
AND FIXTURES}

CHARGES

^{Date:
27/09/2004}

^{Comments:
CHARGE NO:
C200404750}

^{AMOUNT SECURED: 0.00 AND ALL MONIES OWING}

^{CHARGEE(S):DYMAS FUNDING COMPANY, LLC}

^{Date:
27/09/2004}

^{Comments:
CHARGE NO:
C200404749}

^{AMOUNT SECURED: 0.00 AND ALL MONIES OWING}

^{CHARGEE(S):DYMAS FUNDING COMPANY, LLC}

^{Amount: 28,000,000}

^{Comments:
CHARGE NO:
C200301510 (DISCHARGED - 13/09/2004)}

^{AMOUNT SECURED: US$28,000,000.00}

^{CHARGEE(S): U.S. BANK NATIONAL ASSOCIATION}

^{Comments:
CHARGE NO:
200104149 (DISCHARGED - 13/09/2004)}

^{AMOUNT SECURED: 0.00 & ALL MONIES OWING}

^{CHARGEE(S):
U.S. BANK NATIONAL ASSOCIATION}

^{Comments:
CHARGE NO:
200104148 (DISCHARGED - 13/09/2004)}

^{AMOUNT SECURED: 0.00 & ALL MONIES OWING}

^{CHARGEE(S): U.S. BANK NATIONAL ASSOCIATION}

^{Comments:
CHARGE NO:
200104147 (DISCHARGED - 13/09/2004)}

^{AMOUNT SECURED: 0.00 & ALL MONIES OWING}

^{CHARGEE(S): U.S. BANK NATIONAL ASSOCIATION}

PREMISES/PROPERTY INFORMATIONS

^{Date: 04/08/2006} ^{Tax rate: 10}

^{Site Address: 21 GUL DRIVE}

^{Town: SINGAPORE}

^{County: - Postcode: 629470}

^{Country: Singapore}

^{Annual Value: 468,000}

*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, TAX RATE IS 10% (IE 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

^{ABN AMRO BANK N.V.}

SHAREHOLDERS(S)

^{CPM ACQUISITION CORP 12,000 Company}

^{Street: 61 WIITON ROAD WESTPORT}

^{CONNECTION 06880}

^{Town: -}

^{Postcode: -}

^{Country: United States}

FORMER SHAREHOLDER(S)

^{CALIFORNIA PELLET MILL CO 12,000}

HOLDING COMPANY

^{CPM ACQUISITION CORP UF31410C %: 100}

SUBSIDIARY(IES)

^{CALIFORNIA PELLET MILL EUROPE} ^LIMITED

^{CPM MACHINERY CO. LTD}

PAYMENT HISTORY AND EXPERIENCES

^{Trade Morality: AVERAGE}

^{Liquidity: SUFFICIENT}

^{Payments: REGULAR}

^{Trend: DOWNWARD}

^{Financial Situation: AVERAGE}

LITIGATION(S)

No Litigation In Our Database

FINANCIAL ELEMENTS

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

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

^{Date Account Lodged: 04/04/2007}

^{Balance Sheet Date: 30/09/2006 30/09/2005 30/09/2004}

^{Number of weeks: 52 52 82}

^{Consolidation Code: COMPANY COMPANY COMPANY}

^---
ASSETS

^{Preliminary Exp 7,000 22,000 28,000}

^{Tangible Fixed Assets: 650,169 411,349 606,429}

^{Investments 857,189 857,189 857,189}

^{Total Fixed Assets}^{: 1,514,358 1,290,538 1,491,618}

^{Inventories: 3,923,976 3,574,337 3,590,969}

^{Receivables: 5,146,229 3,325,662 4,005,872}

^{Cash,Banks,Securities: 814,850 767,300 942,767}

^{Other current assets: 6,897,829 7,179,460 5,273,785}

^{Total Current Assets}^{: 16,782,884 14,846,759 13,813,393}

^{TOTAL ASSETS:
18,297,242
16,137,297
15,305,011}

^{---
LIABILITIES}

^{Equity capital: 1,200,000 1,200,000 1,200,000}

^{Profit & loss
Account: 13,554,481 12,193,999 10,300,027}

^{Total Equity: 14,754,481 13,393,999 11,500,027}

^{Other long term Liab.: 24,596 45,684 66,772}

^{Total L/T Liabilities}^{: 24,596 45,684 66,772}

^{Trade Creditors: 1,875,964 1,284,899 1,650,714}

^{Prepay. & Def. charges: 702,403 751,933 930,696}

^{Short term
liabilities: 21,086 21,086 21,086}

^{Advanced payments: 580,319 172,596 245,868}

^{Provisions: 338,393 467,100 889,848}

^{Total short term Liab}^{.: 3,518,165 2,697,614 3,738,212}

^{TOTAL LIABILITIES:
3,542,761
2,743,298
3,804,984}

PROFIT & LOSS ACCOUNT

^{Net Sales 13,196,693 12,507,551 22,417,039}

^{Gross Profit: 3,507,926 3,162,893 6,287,559}

^{Result of ordinary
operations - - 4,452,417}

^{NET RESULT BEFORE TAX: 1,719,610 2,367,072 4,446,341}

^{Tax: 359,128 473,100 948,631}

^{Net income/loss year: 1,360,482 1,893,972 3,497,710}

^{Interest Paid: 3,838 3,838 6,076}

^{Depreciation: 88,889 133,209 221,699}

^{Directors Emoluments: 537,574 474,331 911,684}

^{Purchases,Sces & Other
Goods: 9,688,767 9,344,658 16,129,480}

^{Wages and Salaries: 1,786,855 1,772,565 3,348,746}

^{Financial Income: 3,149 4 9,053}

RATIOS

^{30/09/2006 30/09/2005 30/09/2004}

^{Net result /
Turnover(%): 0.10 0.15 0.16}

^{Stock / Turnover(%): 0.30 0.29 0.16}

^{Net Margin(%): 10.31 15.14 15.60}

^{Return on Equity(%): 9.22 14.14 30.41}

^{Return on Assets(%): 7.44 11.74 22.85}

^{Net Working capital: 13264719.00 12149145.00 10075181.00}

^{Cash Ratio: 0.23 0.28 0.25}

^{Quick Ratio: 1.69 1.52 1.32}

^{Current ratio: 4.77 5.50 3.70}

^{Receivables Turnover: 140.39 95.72 64.33}

^{Leverage Ratio: 0.24 0.20 0.33}

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

^{NET WORTH:}

^{THE BALANCE SHEET WAS CONSIDERED PASSABLE
WITH NET WORTH IMPROVED} ^{BY 10.16% FROM S$13,393,999 IN 2005 TO S$14,754,481 IN 2006.}

^{THIS WAS DUE TO HIGHER RETAINED EARNINGS OF
S$13,554,481} ^{(2005:
S$12,193,999); A RISE OF 11.16% FROM THE PRIOR FINANCIAL YEAR.}

^LEVERAGE:

^{IN THE SHORT-TERM, SUBJECT WAS LARGELY
FINANCED BY TRADE CREDITORS} ^{WHICH MADE UP 53.32% (2005: 47.63%) OF THE TOTAL CURRENT
LIABILITIES} ^{AND AMOUNTED TO S$1,875,964 (2005: S$1,284,899).} ^{THE
BREAKDOWN IS AS FOLLOWS:}

^{-THIRD PARTIES - 2006: S$843,803 (2005:
S$442,015)}

^{-IMMEDIATE HOLDING CORPORATION - 2006:
S$95,714 (2005: S$161,721)}

^{-RELATED CORPORATION - 2006: S$553,763 (2005:
S$375,699)}

^{-SUBSIDIARY - 2006: S$382,684 (2005:
S$305,404)}

^{SUBJECT'S LONG TERM LIABILITIES, WHICH
CONSIST OF FINANCE LEASE} ^{LIABILITIES, FELL BY 46.16% TO S$24,596 (2005: S$45,684).}

^{IN ALL, LEVERAGE RATIO ROSE FROM 0.20 TIMES
TO 0.24 TIMES AS A RESULT} ^{OF A MORE THAN PROPORTIONATE RISE IN TOTAL LIABILITIES AS COMPARED
TO} ^{THE RISE IN TOTAL EQUITY.}

^LIQUIDITY:

^{IN GENERAL, SUBJECT'S LIQUIDITY SITUATION WAS
PASSABLE AS SEEN FROM} ^{THE RISE IN NET WORKING CAPITAL BY 9.18% TO S$13,264,719} ^{(2005:
S$12,149,145).}

^{CURRENT RATIO FELL TO 4.77 TIMES, DOWN FROM
5.50 TIMES BUT} ^{QUICK RATIO
IMPROVED TO 1.69 TIMES FROM 1.52 TIMES IN 2005.}

^{PROFITABILITY:}

^{REVENUE POSTED AN INCREASE OF 5.51% FROM
S$12,507,551 IN 2005 TO} ^{S$13,196,693 BUT NET PROFIT DROPPED BY 28.17% TO S$1,360,482} ^{(2005: S$1,893,972).}

^{THIS COULD BE DUE TO THE DECREASE IN OTHER
GAINS BY 56.34% TO} ^S$153,051

^{(2005: S$350,554), AND THE INCREASE IN
ADMINISTRATIVE} ^{EXPENSES BY
1.26 TIMES TO S$1,086,564 (2005: S$481,293).}

^{HENCE, NET MARGIN FELL TO 10.31% (2005: 15.14%).}

^{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 449.05 TIMES}

^{(2005: 617.75 TIMES).}

^{NON-CURRENT ASSETS:}

^{THE FOLLOWING ITEM IS CLASSIFIED UNDER
PRELIMINARY:}

^{-DEFERRED INCOME TAX ASSETS - 2006: S$7,000
(2005: S$22,000)}

^{NOTES TO THE
FINANCIAL STATEMENTS:}

^{CONTINGENT
LIABILITIES}

^{THE COMPANY IS A JOINT GUARANTOR OF A TERM
LOAN AMOUNTING TO} ^{US$37,347,635 (2004: US$47,500,000) WHICH WAS ADVANCED TO ITS} ^{ULTIMATE HOLDING COMPANY, CPM ACQUISITION CORP., BY A FINANCIAL} ^{INSTITUTION,
FIRST BANK N.A. THE TERM LOAN IS SECURED BY THE}

^FOLLOWING:

^{(A) LEGAL MORTGAGE OF THE COMPANY'S LEASEHOLD LAND;}

^{(B) FIRST PRIORITY EQUITABLE MORTGAGE OF
INVESTMENT IN CPM MACHINERY} ^(WUXI)
CO.

^{LTD, A WHOLLY-OWNED SUBSIDIARY; AND}

^{(C) A NEGATIVE PLEDGE ON SUBSTANTIALLY ALL
ASSETS OF THE COMPANY.}

BACKGROUND/OPERATION

^{THE COMPANY WAS INCORPORATED IN THE REPUBLIC OF SINGAPORE ON} ^{01/03/1969 AS A LIMITED PRIVATE COMPANY
AND IS TRADING UNDER ITS} ^{PRESENT NAMESTYLE OF "CPM/PACIFIC
(PRIVATE) LIMITED".}

^{AS AT 16/05/2007, THE COMPANY HAS AN ISSUED AND
PAID-UP CAPITAL OF} ^{12,000 SHARES, OF A VALUE OF S$1,200,000.}

^{PRINCIPAL ACTIVITIES:}

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

^{1) MANUFACTURE OF DIES, MOULDS, TOOLS, JIGS
AND FIXTURES}

^{DURING THE FINANCIAL YEARS UNDER REVIEW, THE
PRINCIPAL ACTIVITIES OF} ^{THE COMPANY ARE THOSE OF MANUFACTURING AND SELLING OF DIES USED IN} ^{PELLET MILLS; ASSEMBLY AND SELLING OF PELLET MILLS AND OTHER RELATED} ^{EQUIPMENT; TRADING OF SPARE PARTS FOR PELLET MILLS.}

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

^ACTIVITIES

^{- MANUFACTURING OF PELLETISING EQUIPMENT
DIES, ROLLERS AND SPARE} ^{PARTS, HAMMERMILLS}

^{AND
ROLLER-MILLS}

^{TRADE NAMES}

^{- CPM -- PELLETISING EQUIPMENT (US)}

^{- CHAMPION -- HAMMERMILLS (US)}

^{- ROSKAMP -- ROLLER-MILLS (US)}

^{SUBJECT IS A MEMBER OF THE FOLLOWING ENTITIES}

^{- SINGAPORE MANUFACTURERS' FEDERATION}

^{- SINGAPORE BUSINESS FEDERATION}

^{ACCORDING TO THE EARLIER TELE-INTERVIEW
CONDUCTED ON 04/08/2006,} ^{THE FOLLOWING INFORMATION WAS GATHERED:}

^{TERMS OF PAYMENT}

^{- CUSTOMERS: LETTERS OF CREDIT}

^{- SUPPLIERS: LETTERS OF CREDIT AND
TELEGRAPHIC TRANSFER}

^{NUMBER OF EMPLOYEES}

^{- 40}

^{MARKET PRESENCE}

^{- WORLDWIDE}

^{IMPORT COUNTRIES}

^{- WORLDWIDE}

^{NO OTHER TRADE INFORMATION WAS MADE AVAILABLE
VIA THE TELE-INTERVIEW.}

^{THE COMPANY'S IMMEDIATE HOLDING CORPORATION
IS CPM ACQUISITION CORP.,} ^{INCORPORATED IN THE UNITED STATES OF AMERICA. THE
ULTIMATE HOLDING} ^{CORPORATION IS CPM HOLDINGS INC., ALSO INCORPORATED
IN THE UNITED STATES OF AMERICA.}

^{NUMBER OF EMPLOYEES (30 SEPTEMBER)}

^{*COMPANY - 2006: NOT AVAILABLE (2005: 40;
2004: 46)}

^{REGISTERED AND BUSINESS ADDRESS:}

^{21 GUL DRIVE}

^SINGAPORE⁶²⁹⁴⁷⁰

^{DATE OF CHANGE OF ADDRESS: 15/12/2003}

^{- OWNED PREMISE}

^WEBSITE:

^{http://www.cpmroskamp.com (HOLDING COMPANY'S)}

^EMAIL:

^{cpmrc@singnet.com.sg}

MANAGEMENT

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

^{1) TED WAITMAN, AN AMERICAN}

^{- BASED IN THE UNITED STATES OF AMERICA}

^{2) TAN YEOW KOON, A SINGAPOREAN}

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

^{3) CHAN KHENG HONG, A SINGAPOREAN}

^{- HOLDS NO OTHER DIRECTORSHIPS AS RECORDED 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.}

^{OUTPUT OF THE TRANSPORT ENGINEERING CLUSTER
JUMPED 45.2% YEAR-ON-YEAR IN JANUARY 2007. THE MARINE & OFFSHORE
ENGINEERING SEGMENT EXPANDED MORE THAN 50% AS SHIPYARDS CONTINUED WITH A HECTIC
PACE OF BUILDING, REPAIRING AND CONVERSION WORKS ON SHIPS. FABRICATION OF OIL
RIGS AND MANUFACTURE OF OIL FIELD EQUIPMENT KEPT PACE WITH HIGHER DEMAND. THE
AEROSPACE SEGMENT GREW 30.0% AS MORE ORDERS SUSTAINED THE INCREASE IN
COMMERCIAL AIRCRAFT REPAIRS. THE LAND TRANSPORT SEGMENT GREW 17.4% IN RESPONSE
TO INCREASED OVERSEAS ORDERS FOR VEHICLE PARTS AND COMPONENTS. BIOMEDICAL MANUFACTURING OUTPUT WENT UP 24.1%
IN JANUARY 2007. THE PRODUCTION OF PHARMACEUTICALS AND MEDICAL TECHNOLOGY
PRODUCTS INCREASED 25.0% AND 17.4% RESPECTIVELY.}

^{THE PRECISION ENGINEERING CLUSTER GREW 8.8%
DUE LARGELY TO EXPANSION IN THE MACHINERY & SYSTEMS SEGMENT. THERE WERE
INCREASES IN THE MANUFACTURE OF MACHINERY FOR HOISTING, LIFTING, REFRIGERATION,
AIR-CONDITIONING, INDUSTRIAL PROCESS CONTROL, SWITCH-GEAR AND SWITCHBOX
APPARATUS. THE PRECISION MODULES AND COMPONENTS SEGMENT POSTED A SLIGHT
INCREASE OF 1.7% COMPARED TO JANUARY LAST YEAR.}

^{THE ELECTRONICS CLUSTER REVERSED ITS
DOWNTREND IN THE PAST FOUR MONTHS TO EXPAND BY 4.1% IN JANUARY 2007. THE GROWTH
CAME MAINLY FROM HIGHER PRODUCTION OF SEMICONDUCTORS AND COMPUTER PERIPHERALS, WHICH
SHOWED 12.3% AND 4.0% GROWTH RESPECTIVELY COMPARED TO LAST JANUARY. THE DATA
STORAGE SEGMENT REMAINED DEPRESSED OWING TO THE RELOCATION OF LOW END
PRODUCTION OVERSEAS. THE INFOCOMMS & CONSUMER ELECTRONICS SEGMENT
CONTRACTED AT 5.9% DUE TO DECLINES IN OUTPUT OF TELECOMMUNICATION PRODUCTS AND
CONSUMER ELECTRONICS.}

^{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.}

^{THE GENERAL MANUFACTURING INDUSTRIES EXPANDED
11.0% IN JANUARY 2007. PRODUCTION OF FOOD AND BEVERAGES INDUSTRIES INCREASED
12.7%, ESPECIALLY FOR FOOD, CHOCOLATE PRODUCTS AND DRINKS WHICH MEET HIGHER
FESTIVE DEMAND. THE PRINTING INDUSTRIES ALSO EXPANDED BY 13.4%}

^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 ELECTRONICS CLUSTER EXPECTS BUSINESS TO
SOFTEN IN THE FIRST HALF OF 2007 IN ALL SEGMENTS EXCEPT THE COMPUTER
PERIPHERALS SEGMENT. THE SEMICONDUCTOR SEGMENT ANTICIPATES A DECELERATION OF
THE SEMICONDUCTOR MARKET IN THE FIRST HALF OF 2007 COMPARED TO THE LAST QUARTER
OF 2006, DUE TO WEAKER DEMAND AND EXCESS INVENTORIES. OUTPUT FOR THIS SEGMENT,
HOWEVER, IS EXPECTED TO INCREASE IN THE FIRST QUARTER OF 2007 COMPARED TO A
QUARTER AGO, TO FULFILL PRE-ARRANGED ORDERS. IN THE INFOCOMMS AND CONSUMER
ELECTRONICS, AND OTHER ELECTRONIC MODULES AND COMPONENTS SEGMENTS, PRICING
PRESSURES AND SEASONAL WEAKNESS CONTRIBUTED TO THE DIP IN SENTIMENTS.
PRODUCTION LEVELS IN THE FIRST QUARTER OF THE YEAR ARE ALSO EXPECTED TO DROP IN
THESE SEGMENTS, COMPARED TO THE OCTOBER TO DECEMBER 2006 PERIOD, AS SOME
PRODUCTION LINES ARE TRANSFERRED OUT OF SINGAPORE. OVERALL EMPLOYMENT IN THIS
CLUSTER IS EXPECTED TO INCREASE, BOOSTED BY THE POSITIVE OUTLOOK IN THE
COMPUTER PERIPHERALS SEGMENT, WHICH ANTICIPATES A CORRESPONDING RISE IN OUTPUT
AND DIRECT EXPORTS IN THE FIRST QUARTER OF THE YEAR, COMPARED WITH THE PREVIOUS
QUARTER.}

^{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.}

^{THE BUSINESS SITUATION IN THE BIOMEDICAL
MANUFACTURING CLUSTER IS EXPECTED TO REMAIN THE SAME IN THE NEXT SIX MONTHS
ENDING JUNE 2007, COMPARED TO THE LAST QUARTER OF 2006. IN THE PHARMACEUTICAL
SEGMENT, PRODUCTION IN THE FIRST QUARTER OF THE YEAR IS EXPECTED TO FALL FROM
THE HIGH LEVELS IN THE FOURTH QUARTER OF 2006. STOCK OF ACTIVE PHARMACEUTICALS
INGREDIENTS IS ALSO EXPECTED TO CONTINUE BEING RUN DOWN TO MEET DEMAND IN THIS
QUARTER. THE MAJORITY OF MANUFACTURERS IN THE MEDICAL TECHNOLOGY SEGMENT ALSO
EXPECT OUTPUT TO REMAIN LARGELY THE SAME AS FOURTH QUARTER 2006 LEVELS. IN
TERMS OF EMPLOYMENT OUTLOOK, PHARMACEUTICAL MANUFACTURERS EXPECT TO HIRE MORE
WORKERS IN THE FIRST QUARTER OF 2007 IN ANTICIPATION OF NEW PRODUCTION LINES
LATER IN THE YEAR. A NET WEIGHTED
BALANCE OF 4% OF PRECISION ENGINEERING MANUFACTURERS EXPECT BUSINESS CONDITIONS
IN THEIR INDUSTRY TO IMPROVE IN THE FIRST HALF OF 2007, COMPARED TO THE LAST
QUARTER OF 2006. ON THE PRODUCTION FRONT, HOWEVER,}

^{MANUFACTURE AND REPAIR OF LIFTS, ESCALATORS
AND LIFTING AND HANDLING EQUIPMENT, AND MANUFACTURE OF SEMICONDUCTOR ASSEMBLY
AND TESTING EQUIPMENT IN THE MACHINERY AND SYSTEMS SEGMENT IS EXPECTED TO DECREASE
DUE TO HOLIDAY DOWNTIMES AND MODERATION OF
DEMAND IN THE SEMICONDUCTOR MARKET. IN THE PRECISION MODULES AND COMPONENTS
SEGMENT, PRODUCTION OF PLASTIC PRECISION PARTS, CONNECTORS AND ELECTRIC MOTORS
IS SIMILARLY EXPECTED TO TAPER DURING THE FIRST QUARTER OF 2007 DUE LARGELY TO
DECREASED ORDERS AMIDST CONTINUED STIFF COMPETITION.}

^{THE TRANSPORT ENGINEERING CLUSTER ANTICIPATES
ROBUST BUSINESS CONDITIONS TO CONTINUE INTO THE FIRST SIX MONTHS OF 2007
COMPARED TO THE FOURTH QUARTER OF 2006. OUTPUT IN ALL SEGMENTS OF THE CLUSTER
IS FORECAST TO INCREASE IN THE FIRST QUARTER OF 2007, COMPARED TO THE LAST
QUARTER OF THE PREVIOUS YEAR. THE MARINE AND OFFSHORE ENGINEERING SEGMENT IS
SPURRED ON BY SUSTAINED DEMAND FOR OIL-RIGS AND OFFSHORE VESSELS, AND RISING DEMAND
FOR SHIP REPAIR ACTIVITIES DUE TO INCREASED SHIPPING ACTIVITIES IN ASIA PACIFIC AND A GROWING GLOBAL FLEET. IN THE LAND
TRANSPORT SEGMENT, OUTPUT IS EXPECTED TO RISE ON THE BACK OF HIGHER LEVELS OF
LOCAL SALES AND EXPORT ORDERS.}

^{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