MIRA INFORM REPORT

Report Date :

22.05.2007

IDENTIFICATION DETAILS

Name :	VIBROPOWER PTE LTD
Registered Office :	^11 Tuas Avenue^16, Singapore – 638929
Country :	Singapore
Financials (as on) :	31.12.2005
Date of Incorporation :	^21/07/1995
Com. Reg. No.:	^199505175C
Legal Form :	^Pte Ltd
Line of Business :	Supply, Design, Manufacture, Installation, Commissioning and Servicing of Generators

RATING & COMMENTS

MIRA’s Rating :

Ba

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 :	Exists

Subject Company

VIBROPOWER PTE LTD

Line Of Business

SUPPLY, DESIGN, MANUFACTURE, INSTALLATION, COMMISSIONING AND SERVICING OF GENERATORS

Parent Company

VIBROPOWER CORPORATION LIMITED

(PERCENTAGE OF SHAREHOLDING: 100.00%)

Financial Elements

FY 2005

COMPANY

Sales : S$51,449,571

Networth : S$1,239,910

Paid-Up Capital : S$510,000

Net result : S$1,181,026

Net Margin(%) : 2.30

Return on Equity(%) : 95.25

Leverage Ratio : 35.85

COMPANY IDENTIFICATION

^{Subject Company: VIBROPOWER PTE LTD}

^{Former Name: -}

^{Business Address: 11 TUAS AVENUE 16}

^{Town: SINGAPORE}

^{Postcode: 638929}

^{County: -}

^{Country: Singapore}

^{Telephone: 6268 2322 / 6897 8009}

^{Fax: 6262 2922 / 6897 8007}

^{ROC Number: 199505175C}

^{Reg. Town: -}

SUMMARY

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

^{Legal Form: Pte Ltd}

^{Date Inc.: 21/07/1995}

^{Previous Legal Form: -}

^{Summary year: 31/12/2005}

^{Sales: 51,449,571}

^{Net worth: 1,239,910}

^{Capital: 600,000}

^{Paid-Up Capital: 510,000}

^{Employees: 52}

^{Net result: 1,181,026}

^{Share value: 1}

^{Auditor: RSM CHIO LIM}

REFERENCES

^{Litigation: Yes}

^{Company status: TRADING}

^{Started: 21/07/1995}

PRINCIPAL(S)

^{CHEN ONN MENG BENEDICT S1418845B Director}

DIRECTOR(S)

^{KANG BENG CHIANG S0089377C Director}

^{Appointed on: 21/07/1995}

^{Street: 50 EAST COAST ROAD}

^{ROXY SQUARE}

^{Town: SINGAPORE}

^{Postcode: 428769}

^{Country: Singapore}

^{CHEN ONN MENG BENEDICT S1418845B Director}

^{Appointed on: 04/08/1995}

^{Street: 82 GARDENIA ROAD}

^{ADELPHI PARK ESTATE}

^{Town: SINGAPORE}

^{Postcode: 578878}

^{Country: Singapore}

^{TAN SIOK KHENG S1705273Z Company Secretary}

^{Appointed on: 17/01/2000}

^{Street: 680 CHOA CHU KANG CRESCENT}

^#02-566

^{Town: SINGAPORE}

^{Postcode: 680680}

^{Country: Singapore}

^{TOH PENG SEONG S2010832J Director}

^{Appointed on: 28/03/2005}

^{Street: 11 HUME AVENUE}

^#08-05

^{Town: SINGAPORE}

^{Postcode: 598723}

^{Country: Singapore}

FORMER DIRECTOR(S)

^{NG LAY HOON S1446541C}

^{FONG CHEE ENG FREDDIE S0392882I}

ACTIVITY(IES)

^{GENERATORS - COMMERCIAL And INDUSTRIAL Code:10240}

^{CONTRACTORS ENGRG, GENERAL (M) Code:5537}

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

^{1) MIXED CONSTRUCTION ACTIVITIES}

^{2) MANUFACTURE AND REPAIR OF ELECTRIC GENERATORS}

CHARGES

^{Date: 10/11/1998}

^{Comments: CHARGE NO: 199805659 (DISCHARGED - 21/12/2001)}

^{SECURED: 0.00 AND ALL MONIES OWING}

^{CHARGEE(S): OVERSEA-CHINESE BANKING CORPORATION LIMITED}

PREMISES/PROPERTY INFORMATIONS

^{Date: 31/03/2006 Tax rate: 10}

^{Site Address: 11 TUAS AVENUE 16}

^{Town: SINGAPORE}

^{County: - Postcode: 638929}

^{Country: Singapore}

^{Annual Value: 164,000}

* 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% (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

^{OVERSEA-CHINESE BANKING CORPORATION LIMITED}

^{FOUR SEAS BANK LTD}

^{DBS BANK LTD.}

ASSOCIATED COMPANY(IES)

^{VIBROPOWER GENERATORS (INDIA)}

^India

SHAREHOLDERS(S)

^{VIBROPOWER CORPORATION LIMITED 6,000,000 Company}

^{Street: 11 TUAS AVENUE 16}

^{Town: SINGAPORE}

^{Postcode: 638929}

^{Country: Singapore}

FORMER SHAREHOLDER(S)

^{CHEN ONN MENG BENEDICT 170,000}

^{LEE KIM SHIN 1}

^{MELISSA ANNE TEO EU-LENG 1}

^{TAN SU MAY 1}

^{KANG BENG CHIANG 170,000}

^{FONG CHEE ENG FREDDIE 170,000}

HOLDING COMPANY

^{VIBROPOWER CORPORATION LIMITED 200004436E %: 100}

SUBSIDIARY(IES)

^{VIBROPOWER (UK) LIMITED}

^{VIBROPOWER (CHINA) PTE LTD}

^{VIBROPOWER (HK) LTD}

^{VP POWER SDN BHD}

^{VIBROPOWER GENERATORS (INDIA) PRIVATE LIMITED}

PAYMENT HISTORY AND EXPERIENCES

^{Trade Morality: AVERAGE}

^{Liquidity: SUFFICIENT}

^{Payments: REGULAR}

^{Trend: DOWNWARD}

^{Financial Situation: AVERAGE}

LITIGATION(S)

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

^{Case Number: HWS00148/2007}

Defendant VIBROPOWER PTE LTD ROC #: 199505175C

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

^{Case Number: HWS02439/96}

Defendant FONG CHEE ENG FREDDIE ROC #: Unknown

Defendant VIBROPOWER PTE LTD ROC #: 199505175C

Defendant KANG BENG CHIANG ROC #: UNKNOWN

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

^{Case Number: MCS15919/2004}

Defendant VIBROPOWER PTE LTD ROC #: 199505175C

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

^{Case Number: DCS02307/2003}

Defendant VIBROPOWER PTE LTD ROC #: 199505175

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

^{Case Number: MCS16256/2003}

Defendant VIBROPOWER PTE LTD ROC #: 199505175C

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

^{Case Number: MCS17064/1998}

Defendant VIBROPOWER PTE LTD ROC #: 199505175C

FINANCIAL ELEMENTS

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

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

^{Date Account Lodged: 23/05/2006}

^{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: 1,251,747 1,361,123 1,481,435}

^{Investments 521,108 463,289 463,289}

^{Total Fixed Assets: 1,772,855 1,824,412 1,944,724}

^{Inventories: 28,651,651 24,776,697 11,685,113}

^{Receivables: 12,826,574 17,735,961 14,425,880}

^{Cash,Banks,Securities: 1,550,581 1,237,614 1,753,080}

^{Other current assets: 894,973 2,215,270 3,550,746}

^{Total Current Assets: 43,923,779 45,965,542 31,414,819}

^{TOTAL ASSETS: 45,696,634 47,789,954 33,359,543}

^{--- LIABILITIES}

^{Equity capital: 510,000 510,000 510,000}

^{Profit & loss Account: 729,910 1,548,884 1,133,669}

^{Total Equity: 1,239,910 2,058,884 1,643,669}

^{L/T deferred taxes: - 14,094 14,094}

^{Other long term Liab.: 11,364,701 9,370,822 -}

^{Total L/T Liabilities: 11,364,701 9,384,916 14,094}

^{Trade Creditors: 7,742,243 18,646,433 10,628,854}

^{Prepay. & Def. charges: - - 601,398}

^{Advanced payments: 858,586 957,411 -}

^{Due to Bank: 23,780,934 15,062,637 11,925,881}

^{Provisions: 479,946 978,154 306,147}

^{Other Short term Liab.: 230,314 701,519 8,239,500}

^{Total short term Liab.: 33,092,023 36,346,154 31,701,780}

^{TOTAL LIABILITIES: 44,456,724 45,731,070 31,715,874}

PROFIT & LOSS ACCOUNT

^{Net Sales 51,449,571 79,109,135 41,828,662}

^{Purchases,Sces & Other Goods:44,361,715 69,895,319 -}

^{Gross Profit: 7,087,856 9,213,816 5,427,014}

^{NET RESULT BEFORE TAX: 1,501,932 3,452,215 993,663}

^{Tax: 320,906 737,000 271,063}

^{Net income/loss year: 1,181,026 2,715,215 722,600}

^{Interest Paid: 1,550,376 508,778 260,928}

^{Depreciation: 230,507 251,959 262,759}

^{Dividends: 2,000,000 2,300,000 -}

^{Directors Emoluments: 1,159,600 1,176,777 -}

^{Wages and Salaries: 1,091,044 1,812,570 1,237,611}

RATIOS

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

^{Turnover per employee: 989414.83 1521329.52 804397.35}

^{Net result / Turnover(%): 0.02 0.03 0.02}

^{Fin. Charges / Turnover(%): 0.03 0.01 0.01}

^{Stock / Turnover(%): 0.56 0.31 0.28}

^{Net Margin(%): 2.30 3.43 1.73}

^{Return on Equity(%): 95.25 131.88 43.96}

^{Return on Assets(%): 2.58 5.68 2.17}

^{Dividends Coverage: 0.59 1.18 1.18}

^{Net Working capital: 10831756.00 9619388.00 -286961.00}

^{Cash Ratio: 0.05 0.03 0.06}

^{Quick Ratio: 0.43 0.52 0.51}

^{Current ratio: 1.33 1.26 0.99}

^{Receivables Turnover: 89.75 80.71 124.16}

^{Leverage Ratio: 35.85 22.21 19.30}

^{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 39.78% FROM S$2,058,884 IN 2004 TO S$1,239,910 IN 2005.}

^{THIS WAS DUE TO LOWER RETAINED EARNINGS OF S$729,910 (2004: S$1,548,884); A FALL OF 52.88% FROM THE PRIOR FINANCIAL YEAR.}

^LEVERAGE:

^{TRADE CREDITORS FELL BY 58.48% TO S$7,742,243 (2004: S$18,646,433), AND CONSIST OF THE FOLLOWNG:}

^{-OUTSIDE PARTIES AND ACCRUED LIABILITIES - 2005: S$5,888,206 (2004: S$11,539,112)}

^{-PARENT COMPANY - 2005: S$581,705 (2004: S$579,611)}

^{-SUBSIDIARIES - 2005: S$704,268 (2004: S$2,272,247)}

^{-RELATED COMPANIES - 2005: S$60,821 (2004: S$4,062,355)}

^{-ASSOCIATE - 2005: - (2004: S$127,108)}

^{-RELATED PARTIES - 2005: S$434,680 (2004: S$66,000)}

^{-WORK IN PROGRESS - 2005: S$72,563 (2004: - )}

^{AMOUNTS DUE TO BANKS ROSE BY 57.88% TO S$23,780,934 (2004: S$15,062,637), AND CONSIST OF THE FOLLOWING:}

^{-BANK LOANS - 2005: S$7,817,373 (2004: S$3,468,540)}

^{-BANK OVERDRAFTS - 2005: S$128,116 (2004: - )}

^{-TRUST RECEIPTS - 2005: S$15,835,445 (2004: S$11,594,097)}

^{SUBJECT'S LONG TERM LIABILITIES ROSE BY 21.10% TO S$11,364,701 (2004: S$9,384,916), AND CONSIST OF THE FOLLOWING:}

^{-DEFERRED TAX - 2005: - (2004: S$14,094)}

^{-OTHER PAYABLES - 2005: S$11,364,701 (2004: S$9,370,822)}

^{IN ALL, LEVERAGE RATIO ROSE FROM 22.21 TIMES TO 35.85 TIMES AS A RESULT OF A MORE THAN PROPORTIONATE FALL IN TOTAL EQUITY AS COMPARED TO THE FALL IN TOTAL LIABILITIES.}

^LIQUIDITY:

^{IN GENERAL, SUBJECT'S LIQUIDITY SITUATION WAS PASSABLE AS SEEN FROM THE RISE IN NET WORKING CAPITAL BY 12.60% TO S$10,831,756 (2004: S$9,619,388).}

^{CURRENT RATIO ROSE TO 1.33 TIMES, UP FROM 1.26 TIMES BUT QUICK RATIO DECREASED TO 0.43 TIMES FROM 0.52 TIMES IN 2004.}

^{PROFITABILITY:}

^{REVENUE POSTED A DECREASE OF 34.96% FROM S$79,109,135 IN 2004 TO S$51,449,571 AND NET PROFIT DROPPED BY 56.50% TO S$1,181,026 (2004: S$2,715,215).}

^{HENCE, NET MARGIN FELL TO 2.30% (2004: 3.43%).}

^REVENUE:

^{-SALES OF GOODS - 2005: S$50,401,848 (2004: S$79,109,135)}

^{-AMOUNT RECOGNISED FROM LONG TERM CONTRACT - 2005: S$1,047,723 (2004: - )}

^{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 1.97 TIMES}

^{(2004: 7.79 TIMES).}

^{NOTES TO THE FINANCIAL STATEMENTS:}

^{SHORT TERM BORROWINGS}

^{THE BANK OVERDRAFT AND LOANS ARE AT INTEREST RATES AT RATES VARYING FROM 4.45% TO 5.79% (2004: NIL) AND 3.41% TO 5.70% (2004: 2.00% TO 5.25%) RESPECTIVELY PER YEAR.}

^{THE TRADE FINANCE FACILITIES BEARS INTEREST 3.54% TO 7.00% (2004: 2.82% TO 5.50%) FOR SINGAPORE DOLLAR BILLS AND 2.06% TO 6.47% (2004: 3.22% TO 4.24%) FOR FOREIGN DOLLAR BILLS RESPECTIVELY PER YEAR.}

^{THE BANK OVERDRAFT AND OTHER CREDIT FACILITIES ARE COVERED BY A CORPORATE GUARANTEE ISSUED BY THE PARENT COMPANY.}

^{CONTINGENT LIABILITIES}

^{CORPORATE GUARANTEE - 2005: - (2004: S$414,442)}

^{THE ABOVE GUARANTEE IS ISSUED IN FAVOUR OF THE SUBSIDIARY'S CONTACTOR IN RELATION TO THE DUE AND PUNCTUAL PERFORMANCE OF THE SUBSIDIARY.}

^{THE MAXIMUM ESTIMATED AMOUNT THE COMPANY COULD BECOME LIABLE IS AS SHOWN ABOVE.}

BACKGROUND/OPERATION

^{THE COMPANY WAS INCORPORATED IN THE REPUBLIC OF SINGAPORE ON 21/07/1995 AS A LIMITED PRIVATE COMPANY AND IS TRADING UNDER ITS PRESENT NAMESTYLE AS "VIBROPOWER PTE LTD".}

^{AS AT 24/04/2007, SUBJECT HAS A ISSUED AND PAID-UP CAPITAL OF 6,000,000 SHARES OF A VALUE OF S$600,000.}

^{PRINCIPAL ACTIVITIES:}

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

^{1) MIXED CONSTRUCTION ACTIVITIES}

^{2) MANUFACTURE AND REPAIR OF ELECTRIC GENERATORS}

^{DURING THE FINANCIAL YEAR(S), UNDER REVIEW, THE PRINCIPAL ACTIVITIES OF THE COMPANY ARE THOSE OF SUPPLY, DESIGN, MANUFACTURE, INSTALLATION, COMMISSIONING AND SERVICING OF GENERATORS.}

^{FROM THE RESEARCH DONE, SUBJECT IS IN THE DESIGN, MANUFACTURE, INSTALL AND COMMISSION OF A WIDE RANGE OF STATIONARY, MOBILE AND PORTABLE GENERATOR SETS.}

^PRODUCTS:

^{*PORTABLE GENERATORS}

^{*MARINE GENSETS}

^{*GENERATORS FOR PUBLIC HOUSING}

^{*RUBBER TYRE GANTRY CONTROL GENERATORS}

^{*INDUSTRIAL & SPECIAL GENERATORS}

^{DISTRIBUTOR FOR:}

^{*VIBRO-ACOUSTICS OF CANADA}

^{*MASON OF USA}

^*ETC

^SERVICES:

^{*GENERATOR ENGINES AND ACCESSORIES}

^{*CONSULTANCY SERVICES}

^{*DESIGN AND FABRICATION OF SYSTEMS PACKAGES}

^{*MAINTENANCE SERVICES}

^PURCHASES:

^{*IMPORTS: YES (% NOT PROVIDED)}

^{*TERMS OF IMPORT: 30-180 DAYS, LETTERS OF CREDIT, ETC}

^{*IMPORT COUNTRIES: UNITED KINGDOM, HONG KONG, ETC.}

^MARKETS:

^{*LOCAL (%): 50}

^{*TERMS SALES: 30-180 DAYS, LETTERS OF CREDIT, ETC}

^{*EXPORT(%): 50}

^{*TERMS OF EXPORT: 30-180 DAYS, LETTERS OF CREDIT, ETC}

^{*EXPORT COUNTRIES: BRUNEI, CHINA, HONG KONG, INDONESIA, JAPAN, MALAYSIA, MYANMAR,}

^{SRI LANKA AND UNITED STATES}

^{BCA REGISTERED WORK HEADS/SUPPLY HEADS:}

^{*ME11 MECHANICAL ENGINEERING L1--$100,000}

^{*SY08 MECHANICAL EQUIPMENT, PLANT & MACHINERY L5--$10 MILLION}

^{CLIENT REFERENCE:}

^{*HONG KONG HOUSING AUTHORITY}

^{*SINGAPORE HOUSING DEVELOPMENT BOARD}

^{*RIVER TRADE TERMINAL, HONG KONG}

^{*ADEN PORT, YEMEN}

^{*HUMPUSS PORT, INDONESIA}

^{*MINISTRY OF FINANCE BUILDING, BRUNEI}

^{*JURONG TOWN CORPORATIONS NEW HQ BUILDING, SINGAPORE}

^{*NORTHERN TELECOM'S JV FACTORY, CHINA}

^*ETC

^{QUALITY ASSESSMENT:}

^{*ISO 9002}

^{NO OTHER TRADE INFORMATION WAS MADE AVAILABLE AS TELE-INTERVIEW WAS NOT GRANTED ON 04/05/2007.}

^{THE COMPANY IS A WHOLLY-OWNED SUBSIDIARY OF VIBROPOWER CORPORATION LIMITED, INCORPORATED IN SINGAPORE WHICH IS ALSO THE COMPANY'S ULTIMATE HOLDING COMPANY.}

^{NUMBER OF EMPLOYEES; INCLUDING DIRECTORS (31 DECEMBER):}

^{- COMPANY - 2005: 52 (2004: 52; 2003: 40; 2002: 23; 2001: 21; 2000: 10)}

^{REGISTERED AND BUSINESS ADDRESS:}

^{11 TUAS AVENUE 16}

^{SINGAPORE 638929}

^{DATE OF CHANGE OF ADDRESS: 23/10/1999}

^{- OWNED PREMISE}

^WEBSITE:

^{www.vibropower.com}

^EMAIL:

^{info@vibropower.com}

^{vibrovp@singnet.com.sg}

MANAGEMENT

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

^{1) KANG BENG CHIANG, A SINGAPOREAN}

^{- HOLDS OTHER DIRECTORSHIP(S) IN:}

^{VIBROPOWER CORPORATION LIMITED}

^{2) CHEN ONN MENG BENEDICT, A SINGAPOREAN}

^{- HOLDS OTHER DIRECTORSHIP(S) IN:}

^{VIBROTECH PTE LTD}

^{VIBROPOWER CORPORATION LIMITED}

^{3) TOH PENG SEONG, A SINGAPOREAN}

^{- HOLDS OTHER DIRECTORSHIP(S) IN:}

^{VIBROPOWER CORPORATION LIMITED}

SINGAPORE’S COUNTRY RATING 2007

^{INVESTMENT GRADE}

^{IN SINGAPORE, THE POLITICAL SITUATION REMAINS STABLE.}

^{SINGAPORE BOASTS THE BEST GOVERNANCE IN ASIA, WITH AN EFFECTIVE LEGAL SYSTEM FACILITATING DEBT COLLECTION AND TO A HIGH DEGREE OF FINANCIAL TRANSPARENCY.}

^{EXTERNAL ACCOUNTS HAVE REMAINED SUBSTANTIALLY IN SURPLUS, CONTRIBUTED TO THE DYNAMISM OF THE ELECTRONICS AND PHARMACEUTICALS SECTORS AND TO REPATRIATION OF PROFITS FROM SINGAPORE INVESTMENTS. THE FINANCIAL AND TOURISM SECTORS HAVE ALSO CONTRIBUTED TO THE LARGE CURRENT ACCOUNT SURPLUS.}

^{SINGAPORE CONTINUES TO KEENLY WELCOME FOREIGN INVESTMENT AND OFFERS A VERY OPEN AND WELL-PLANNED ECONOMIC AND POLITICAL ENVIRONMENT. IT HAS BEEN IMPLEMENTING AMBITIOUS DIVERSIFICATION STRATEGY, FOCUSED PARTICULARLY ON THE CHEMICALS AND PHARMACEUTICAL SECTORS.}

^{THE GOVERNMENT USES FOREIGN DIRECT INVESTMENT TO DEVELOP PRIORITY SECTORS (ELECTRONICS, CHEMICALS, BIOTECHNOLOGY). THE AIM IS TO ENCOURAGE THE GROWTH OF HIGH ADDED-VALUE ACTIVITIES AND TURN SINGAPORE INTO A REGIONAL HUB FOR FOREIGN INVESTORS INTERESTED IN ASIA.}

^{CERTAIN SECTORS (MEDIA, LEGAL AND FINANCIAL SERVICES) ARE HOWEVER ONLY PARTIALLY OPEN TO FOREIGN INVESTMENT. THESE SECTORS ARE SLOWLY OPENING UP, BUT THE PROGRESS IS SLOW. AFTER HIGH GROWTH IN 2006, BUOYED BY THE DYNAMISM OF BOTH EXPORTS AND HOUSEHOLD CONSUMPTION, A SLOWDOWN IS EXPECTED IN 2007.}

^ASSETS

^{" MAJOR EXPORTER OF CAPITAL IN ASIA, NOTABLY VIA THE STATE-OWNED TEMASEK HOLDING}

^COMPANY.

^{" HIGH QUALITY COMPETITIVENESS IN ASIA}

^{" EXCELLENT BUSINESS CLIMATE}

^{" POLITICAL STABILITY.}

^WEAKNESSES

^{" SKILLED MANPOWER HAS BEEN LACKING IN THE SECTORS TARGETED FOR DEVELOPMENT.}

^{" AN AGEING POPULATION COULD, ULTIMATELY, AFFECT ECONOMIC PERFORMANCE.}

^{" GROWING INEQUALITY AND THE EMERGENCE OF LONG-TERM UNEMPLOYMENT AMONG THE LEAST}

^{SKILLED COULD GENERATE SOCIAL TENSIONS.}

^{" BEING THE WORLD'S MOST OPEN ECONOMY, IT HAS BEEN VULNERABLE TO WORLD ECONOMIC}

^DOWNTURNS.

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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