MIRA INFORM REPORT

Report Date :

02.11.2007

IDENTIFICATION DETAILS

Name :	SHIMADZU (ASIA PACIFIC) PTE LTD
Registered Office :	^16 Science Park Drive, #01-01 The Pasteur,^Singapore –^118227
Country :	Singapore
Financials (as on) :	31.12.2006
Date of Incorporation :	^18/10/1989
Com. Reg. No.:	^198904521E
Legal Form :	^Pte Ltd
Line of Business :	Importing, Exporting, and Dealing in Analytical, Scientific Medical and Industrial Goods

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 :	Clear

Subject Company

SHIMADZU (ASIA PACIFIC) PTE LTD

Line Of Business 

IMPORTING, EXPORTING, AND DEALING IN ANALYTICAL, SCIENTIFIC MEDICAL AND INDUSTRIAL GOODS

Parent Company

SHIMADZU CORPORATION

(PERCENTAGE OF SHAREHOLDING: 100.00%)

Financial Elements

2006

COMPANY

Sales : JPY10,787,791,000

Networth : JPY3,510,167,000

Paid-Up Capital : JPY200,359,000

Net result : JPY1,049,691,000

Net Margin(%) : 9.73

Return on Equity(%) : 29.90

Leverage Ratio : 0.97

COMPANY IDENTIFICATION

^{Subject Company : SHIMADZU (ASIA PACIFIC) PTE LTD}

^{Former Name : -}

^{Business Address : 16 SCIENCE PARK DRIVE}

^{#01-01 THE PASTEUR}

^{Town : SINGAPORE}

^{Postcode : 118227}

^{County : -}

^{Country : Singapore}

^{Telephone : 6778 6280}

^{Fax : 6779 2935}

^{ROC Number : 198904521E}

^{Reg. Town : -}

SUMMARY

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

^{Legal Form : Pte Ltd}

^{Date Inc. : 18/10/1989}

^{Previous Legal Form : -}

^{Summary year : 31/12/2006}

^{Sales : 10,787,791,000}

^{Networth : 3,510,167,000}

^{Capital : 6,000,000}

^{Paid-Up Capital : 200,359,000}

^{Employees : -}

^{Net result : 1,049,691,000}

^{Share value : -}

^{Auditor : DELOITTE & TOUCHE}

REFERENCES

^{Litigation : Yes}

^{Company status : TRADING}

^{Started : 18/10/1989}

PRINCIPAL(S)

^{TSUGUO KISHDA G5630494R Managing Director}

DIRECTOR(S)

^{FUMIO TSUJI TZ0037794 Director}

^{Appointed on : 01/07/2004}

^{Street : 6-39-5, MAKAMI-CHO}

^{TAKATSUKI CITY}

^{Town: OSAKA PREFECTURE}

^Postcode:

^{Country: Japan}

^{SHUNJI FUKUI TE8059874 Director}

^{Appointed on : 01/07/2004}

^{Street : 43-4, NAGAO, MOBARA-SHI}

^{Town: CHIBA}

^Postcode:

^{Country: Japan}

^{TSUGUO KISHDA G5630494R Director}

^{Appointed on : 02/10/2001}

^{Street : 25 LEONIE HILL ROAD}

^#06-05

^{GRANGEFORD APARTMENT}

^{Town: SINGAPORE}

^{Postcode: 239196}

^{Country: Singapore}

^{TSUGUO KISHDA G5630494R Managing Director}

^{Appointed on : 02/10/2001}

^{Street : 25 LEONIE HILL ROAD}

^#06-05

^{GRANGEFORD APARTMENT}

^{Town: SINGAPORE}

^{Postcode: 239196}

^{Country: Singapore}

^{LEE SIEW JEE JENNIFER S1336064B Company Secretary}

^{Appointed on : 28/06/2007}

^{Street : 2 ENG KONG ROAD}

^{Town: SINGAPORE}

^{Postcode: 599081}

^{Country: Singapore}

^{YOSHIAKI MASE TF7844033 Director}

^{Appointed on : 28/06/2007}

^{Street : SHIMADZU CHOFU DORMITORY (B) 304}

^{1-7-16 NISHI TSUTSUJI GAOKA}

^{CHOFU CITY}

^{Town: TOKYO}

^Postcode:

^{Country: Japan}

^{JUN DOMOTO TG2887769 Director}

^{Appointed on : 28/06/2007}

^{Street : 102 TOKYO DOEL-ARS TAMA PLAZA}

^{3-27 SHIN-ISHIKAWA AOBA-KU}

^YOKOHAMA-SHI

^{Town: KANAGAWA}

^Postcode:

^{Country: Japan}

FORMER DIRECTOR(S)

^{EIJI SONODA TG4424705}

^{KOJI FURUSAWA TF1660865}

^{HARA TASUKU L9090744}

^{KAWABE YSAUTSUGU SN2021788}

^{KAKINUMA SHIGEMASA N9091098}

^{TAKAGI YASUMITSU SN9149705}

^{JULIANA LOH JOO HUI S2558149J}

^{KEN EMORI F0377421W}

^{TSUNEKAZU MATSUYAMA MN2477822}

^{SHIGEHIKO HATTORI MN9206672}

^{SHIGETSUGU TANAKA MQ4075811}

^{AKIRA NAKAMOTO TF5044364}

ACTIVITY(IES)

^{SCIENTIFIC APPARATUS And INSTRUMENTS Code:19027}

^{LABORATORY EQUIPMENT And SUPPLIES Code:12720}

^{ANALYTICAL INSTRUMENTS Code:807}

^{LABORATORIES - ANALYTICAL Code:12655}

^{ULTRASONIC EQUIPMENT And SUPPLIES Code:22790}

^{BASED ON ACRA'S RECORD AS AT 01/11/2007}

^{(1) RESEARCH AND EXPERIMENTAL DEVELOPMENT ON LIFE SCIENCES; RESEARCH & DEVELOPMENT, IMPORT, EXPORT, REPAIR ANALYTICAL, MEDICAL}

CHARGES

No Charges On Premises/Property In Our Database

PREMISES/PROPERTY INFORMATIONS

No Premises/Property Information In Our Databases

BANKERS

^{THE BANK OF TOKYO-MITSUBISHI UFJ, L (THE BANK OF TOKYO-MITSUBISHI, LTD.}

SHAREHOLDERS(S)

^{SHIMADZU CORPORATION 3,150,000 Company}

^{Street : 1 NISHINOKYO-KUWABARACHO}

^{NAKAGYO-KU KYOTO}

^Town:

^{Postcode: 604-8511}

^{Country: Japan}

HOLDING COMPANY

^{SHIMADZU CORPORATION UF02485G % : 100}

SUBSIDIARY(IES)

^{SHIMADZU MEDICAL SYSTEMS (OCEANIA) PTY LTD}

^{SHIMADZU PHILIPPINES CORPORATION}

^{SHIMADZU SCIENTIFIC INSTRUMENTS (OCEANIA) PTY LTD}

^{SHIMADZU SINGAPORE PTE LTD}

^{SHIMADZU MEDICAL (INDIA) PRIVATE LIMITED (F.K.A. SHIMADZU (INDIA) PRIVATE LIMITED)}

^{SHIMADZU ANALYTICAL (INDIA) PRIVATE LIMITED}

PAYMENT HISTORY AND EXPERIENCES

^{Trade Morality : AVERAGE}

^{Liquidity : SUFFICIENT}

^{Payments : REGULAR}

^{Trend : UPWARD}

^{Financial Situation : AVERAGE}

LITIGATION(S)

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

^{Case Number: MCS017093/2000}

Defendant SHIMADZU (ASIA PACIFIC) PTE LTD ROC # : 198904521E

FINANCIAL ELEMENTS

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

^{Date Account Lodged: 11/07/2007}

^{Balance Sheet Date: 31/12/2006 31/12/2005}

^{Number of weeks: 52 52}

^{Consolidation Code: COMPANY COMPANY}

^{--- ASSETS ---}

^{Tangible Fixed Assets: 77,772,000 67,591,000}

^{Investments 295,779,000 181,145,000}

^{Total Fixed Assets: 373,551,000 248,736,000}

^{Inventories: 1,024,877,000 716,592,000}

^{Receivables: 2,431,674,000 2,400,380,000}

^{Cash,Banks, Securitis: 3,031,507,000 2,446,194,000}

^{Other current assets: 60,586,000 106,834,000}

^{Total Current Assets: 6,548,644,000 5,670,000,000}

^{TOTAL ASSETS: 6,922,195,000 5,918,736,000}

^{--- LIABILITIES ---}

^{Equity capital: 200,359,000 200,359,000}

^{Profit & lost Account: 3,309,808,000 2,536,160,000}

^{Total Equity: 3,510,167,000 2,736,519,000}

^{Other long term Liab.: 553,000 4,485,000}

^{Total L/T Liabilities: 553,000 4,485,000}

^{Trade Creditors: 3,122,914,000 2,873,203,000}

^{Prepay. & Def. charges: 61,519,000 85,556,000}

^{Short term liabilities: 2,899,000 5,431,000}

^{Provisions: 221,379,000 207,764,000}

^{Other Short term Liab.: 2,764,000 5,778,000}

^{Total short term Liab.: 3,411,475,000 3,177,732,000}

^{TOTAL LIABILITIES: 3,412,028,000 3,182,217,000}

^{PROFIT & LOSS ACCOUNT}

^{Net Sales 10,787,791,000 8,895,260,000}

^{NET RESULT BEFORE TAX: 1,279,498,000 1,156,284,000}

^{Tax : 229,807,000 209,118,000}

^{Net income/loss year: 1,049,691,000 947,166,000}

^{Interest Paid: 328,000 1,177,000}

^{Depreciation: 60,050,000 52,309,000}

^{Dividends: 276,043,000 199,773,000}

^{Directors Emoluments: 11,208,000 10,489,000}

^{Wages and Salaries: 489,660,000 446,748,000}

^{Financial Income: 2,128,000 4,530,000}

RATIOS

^{31/12/2006 31/12/2005}

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

^{Stock / Turnover(%): 0.10 0.08}

^{Net Margin(%): 9.73 10.65}

^{Return on Equity(%): 29.90 34.61}

^{Return on Assets(%): 15.16 16.00}

^{Dividends Coverage: 3.80 4.74}

^{Net Working capital: 3137169000.00 2492268000.00}

^{Cash Ratio: 0.89 0.77}

^{Quick Ratio: 1.60 1.53}

^{Current ratio: 1.92 1.78}

^{Receivables Turnover: 81.15 97.15}

^{Leverage Ratio: 0.97 1.16}

^{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)/1000}

^{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 FAIR IN VIEW OF THE FOLLOWING:}

^{NET WORTH:}

^{THE BALANCE SHEET WAS CONSIDERED PASSABLE WITH NET WORTH IMPROVED BY 28.27% FROM YEN2,736,519,000 IN FY 2005 TO YEN3,510,167,000 IN FY 2006. THIS WAS DUE TO HIGHER ACCUMULATED PROFIT OF YEN3,309,808,000 (2005: YEN2,536,160,000); A RISE OF 30.50% FROM THE PRIOR FINANCIAL YEAR.}

^LEVERAGE:

^{IN THE SHORT-TERM, SUBJECT WAS LARGELY FINANCED BY TRADE CREDITORS WHICH MADE UP 91.54% (2005: 90.41%) OF THE TOTAL CURRENT LIABILITIES AND AMOUNTED TO YEN3,122,914,000 (2005: YEN2,873,203,000). THE BREAKDOWN IS AS FOLLOWS:}

^{-OUTSIDE PARTIES- 2006: YEN1,248,287,000 (2005: YEN1,198,385,000)}

^{-HOLDING COMPANY- 2006: YEN1,421,418,000 (2005: YEN1,419,699,000)}

^{-RELATED COMPANIES- 2006: YEN57,057,000 (2005: YEN26,346,000)}

^{-SUBSIDIARIES- 2006: YEN396,152,000 (2005: YEN228,773,000)}

^{IN THE LONG-TERM, SUBJECT WAS WHOLLY FINANCED BY OBLIGATIONS UNDER FINANCE LEASE WHICH CONSIST OF:}

^{-PAYABLE WITHIN TWO TO FIVE YEARS- YEN553,000 (2005: YEN4,485,000)}

^{IN ALL, LEVERAGE RATIO FELL FROM 1.16 TIMES IN FY 2005 TO 0.97 TIMES LIQUIDITY, THIS WAS DUE TO A GREATER RISE IN TOTAL EQUITY THAN TOTAL LIABILITIES.}

^LIQUIDITY:

^{IN GENERAL, SUBJECT'S LIQUIDITY SITUATION WAS PASSABLE AS SEEN FROM THE RISE IN NET WORKING CAPITAL AND LIQUIDITY RATIOS. CURRENT RATIO ROSE TO 1.92 TIMES, UP FROM 1.78 TIMES AND QUICK RATIO IMPROVED TO 1.60 TIMES FROM 1.53 TIMES IN FY 2005.}

^{SIMILARLY, NET WORKING CAPITAL IMPROVED BY 25.87% FROM YEN2,492,268,000 IN FY 2005 TO YEN3,137,169,000.}

^{CASH AND CASH EQUIVALENT CONSIST OF:}

^{-CASH AT BANK- 2006: YEN3,030,422,000 (2005: YEN2,445,102,000)}

^{-CSAH ON HAND- 2006: YEN1,085,000 (2005: YEN1,092,000)}

^{PROFITABILITY:}

^{REVENUE POSTED AN INCREASE OF 21.27% FROM YEN8,895,260,000 IN FY 2005 TO YEN10,787,791,00. NET PROFIT INCREASED BY 10.82% TO YEN1,049,691,000 (2005: YEN947,166,000). HENCE, NET MARGIN FELL TO 9.73% (2005: 10.65%).}

^REVENUE:

^{-SALES OF GOODS- 2006: YEN10,519,158,000 (2005: YEN8,661,912,000)}

^{-COMMISSION INCOME- 2006: YEN268,633,000 (2005: YEN233,348,000)}

^{DEBT SERVICING:}

^{DEBT SERVICING PROBLEMS MIGHT NOT BE EXPECTED IF REVENUE AND EARNINGS CAN BE MAINTAINED AND PAYMENT BY TRADE DEBTORS ARE FORTHCOMING. IN ADDITION, ITS INTEREST COVERAGE WAS HEALTHY CONSIDERING THAT ITS INTEREST EXPENSES WERE LOWER AT YEN328,000,000 (2005: YEN1,177,000).}

^{NOTES TO FINANCIAL STATEMENTS}

^{CONTINGENT LIABILITIES - UNSECURED}

^{*BANKERS' GUARANTEES ISSUED IN FAVOUR OF THIRD PARTIES 2006: YEN91,424,000 (2005: YEN83,400,000)}

BACKGROUND/OPERATION

^{THE COMPANY WAS INCORPORATED IN THE REPUBLIC OF SINGAPORE ON 18/10/1989 AS A LIMITED PRIVATE COMPANY AND IS TRADING UNDER THE PRESENT NAMESTYLE OF "SHIMADZU (ASIA PACIFIC) PTE LTD".}

^{AS AT 01/11/2007, THE COMPANY HAS AN ISSUED AND PAID-UP CAPITAL OF 3,150,000 SHARES, OF A VALUE OF S$3,150,000.}

^{PRINCIPAL ACTIVITIES:}

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

^{1) RESEARCH AND EXPERIMENTAL DEVELOPMENT ON LIFE SCIENCES; R&D, IMPORT, EXPORT, REPAIR ANALYTICAL, MEDICAL & INDUSTRIAL GOODS}

^{2) HARDWARE CONSULTANCY (INCLUDING SYSTEMS CONSULTANCY)}

^{DURING THE FINANCIAL YEAR(S), UNDER REVIEW, THE PRINCIPAL ACTIVITIES OF THE COMPANY ARE IMPORTING, EXPORTING, BUYING, SELLING, REPAIRING AND DEALING IN ANALYTICAL, MEDICAL AND INDUSTRIAL GOODS.}

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

^{* RESEARCH & DEVELOPMENT, SALES & MARKETING OF PRODUCTS IN THE FIELDS OF ANALYTICAL, SCIENTIFIC, MEDICAL AND INDUSTRIAL BUSINESSES}

^{* INTERNATIONAL PROCUREMENT}

^{* REGIONAL OFFICE FOR MARKETING OPERATION AND CUSTOMER SUPPORT CENTRE IN THE ASIA PACIFIC REGION}

^PRODUCTS:

^{LABORATORY INSTRUMENTS:}

^{* LIQUID CHROMATOGRAPH}

^{* GAS CHROMATOGRAPH}

^{* DATA SYSTEMS FOR LC/GC}

^{* MASS SPECTROMETER SYSTEMS}

^{* SPECTROSCOPY PRODUCTS}

^{* TOC ANALYZERS AND WATER QUALITY ANALYZERS}

^{* ENVIRONMENTAL GAS ANALYZERS}

^{* SURFACE ANALYSIS APPARATUS}

^{* THERMAL ANALYSIS INSTRUMENTS}

^{* X-RAY SPECTROSCOPIC APPARATUS}

^{* X-RAY DIFFRACTOMETER}

^{TESTING & INSPECTION MACHINES:}

^{* UNIVERSAL TESTING MACHINES}

^{* FATIGUE TESTING MACHINES}

^{* HARDNESS TESTER}

^{* VISCOSITY & FLOW TESTING INSTRUMENTS}

^{* NON-DESTRUCTIVE INSPECTION MACHINES}

^{* POWDERS & PARTICLE SIZE ANALYZERS}

^{* HIGH-SPEED VIDEO CAMERA}

^{BALANCES & SCALES:}

^{* DUAL-RANGE SEMI-MICRO BALANCES}

^{* ANALYTICAL BALANCES}

^{* TOP-LOADING BALANCES}

^{* PORTABLE BALANCES}

^{* HIGH-PRECISION PLATFORM BALANCES}

^{* APPLICATION BALANCES}

^{* ELECTRONIC PRINTER}

^{MEDICAL SYSTEMS & EQUIPMENT:}

^{* ANGIOGRAPHY}

^{* FLUOROSCOPY}

^{* MOBILE X-RAY}

^{* RADIOGRAPHY}

^{* CT}

^{* ULTRASOUND}

^{AFTER-SALES SUPPORT AND SERVICES:}

^{* INSTRUMENT INSTALLATION AND COMMISSIONING}

^{* INSTRUMENT TROUBLESHOOTING}

^{* INSTALLATION QUALIFICATION AND OPERATIONAL QUALIFICATION (IQOQ)}

^DISTRIBUTORS

^{* DISTRIBUTOR ADVANCED SERVICE TRAINING}

^{* DISTRIBUTOR IQOQ TRAINING}

^{* WARRANTY MANAGEMENT}

^{IMPORT COUNTRIES}

^{* JAPAN, ETC.}

^{EXPORT COUNTRIES}

^{* WORLDWIDE; JAPAN, AUSTRALIA, ETC}

^{SUBJECT IS A MEMBER OF FOLLOWING ENTITY}

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

^{FROM THE TELE-INTERVIEW CONDUCTED ON 02/11/2007, THE FOLLOWING WAS GATHERED:}

^{MARKET PRESENCE}

^{* WORLDWIDE}

^{TERMS OR PAYMENT}

^{* CUSTOMERS: TELEGRAPHIC TRANSFER AND LETTERS OF CREDIT}

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

^{NO OTHER TRADE INFORMATION IS AVAILABLE ON 02/11/2007.}

^{SUBJECT IS A SUBSIDIARY OF SHIMADZU CORPORATION, INCORPORATED IN JAPAN, WHICH IS ALSO SUBJECT'S ULTIMATE HOLDING COMPANY.}

^{NUMBER OF EMPLOYEES (31 DECEMBER)}

^{* COMPANY - 2006: NOT AVAILABLE (2005: NOT AVAILABLE; 2004: 99; 2003: 95; 2002: 94; 2001: 89)}

^{REGISTERED AND BUSINESS ADDRESS:}

^{16 SCIENCE PARK DRIVE}

^#01-01

^{THE PASTEUR}

^{SINGAPORE 118227}

^{DATE OF CHANGE OF ADDRESS: 25/04/1990}

^{- RENTED PREMISE}

^{- OWNED BY: ASCENDAS LAND (SINGAPORE) PTE LTD}

^WEBSITE:

^{* http://www.shimadzu.com.sg}

^E-MAIL:

^{* sales@shimadzu.com.sg}

^{* lab@shimadzu.com.sg}

MANAGEMENT

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

^{1) TSUGUO KISHIDA, A JAPANESE}

^{- BASED IN SINGAPORE}

^{2) SHUNJI FUKUI, A JAPANESE}

^{- BASED IN JAPAN}

^{3) YOSHIAKI MASE, A JAPANESE}

^{- BASED IN JAPAN}

^{4) JUN DOMOTO, A JAPANESE}

^{- BASED IN JAPAN}

^{5) FUMIO TSUJI, A JAPANESE}

^{- BASED IN JAPAN}

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 6.1% IN QUARTER 1 OF 2007 AFTER A 6.6% GROWTH IN QUARTER 4 OF 2006. THE GROWTH MOMENTUM EASED SLIGHTLY TO 7.6% IN 1Q 2007, COMPARED WITH 7.9% A QUARTER EARLIER. GROWTH IN QUARTER 1 WAS LED BY THE FINANCIAL SERVICES AND CONSTRUCTION SECTORS. THE MANUFACTURING SECTOR CONTINUED TO EXPERIENCE A MODERATION IN GROWTH.

THE FINANCIAL SERVICES SECTOR SIGNIFICANTLY INCREASED BY 13% IN 1Q 2007 ON THE HEELS OF THE 11% GROWTH A QUARTER AGO. THE STRONG PERFORMANCE WAS ACROSS ALL MAJOR FINANCIAL SEGMENTS, PARTICULARLY IN THE CAPITAL AND MONEY MARKETS. FUND MANAGEMENT ACTIVITIES REMAINED BOUYANT, IN LINE WITH THE CONTINUED STRENGTH IN ECONOMIC CLIMATE. SIMILARLY, BANKS SAW STRONG GROWTH, BOUYED BY SUSTAINED RESILIENCE IN THE ASIA DOLLAR MARKET AS WELL AS A STEADY INCREASE IN DOMESTIC LENDING ACTIVITY.

THE CONSTRUCTION SECTOR GREW BY 9.7% IN 1Q 2007, ITS STRONGEST GROWTH IN 9 YEARS. CERTIFIED PAYMENTS INCREASE BY 9.5% IN 1Q 2007, SUPPORTED BY STRONG GROWTH IN THE PRIVATE RESIDENTIAL, COMMERCIAL AND INDUSTRIAL SEGMENTS AS WELL AS PUBLIC RESIDENTIAL SEGMENT. HOWEVER, CONTRACTS AWARDED FELL BY 11% IN 1Q 2007, DUE MAINLY TO THE DROP IN THE PRIVATE COMMERCIAL AND PUBLIC INSTITUTIONAL SEGMENTS.

MANUFACTURING SECTOR INCREASED BY 4.3% IN 1Q 2007, DOWN FROM 7.7% IN THE PREVIOUS QUARTER. BOTH BIOMEDICAL MANUFACTURING (-5.0%) AND PRECISION ENGINEERING (-0.7%) CLUSTERS SAW LOWER PRODUCTION DURING THE QUARTER. THE ELECTRONICS CLUSTER, HOWEVER, RECOVERED FROM A 4.1% CONTRACTION IN 4Q 2006 TO REGISTER AN INCREASE OF 2.6% IN 1Q 2007. THE TRANSPORT ENGINEERING CLUSTER CONTINUED TO EXPAND STRONGLY AT 23%, FOLLOWING A 25% INCREASE IN 4Q 2006.

THE WHOLESALE AND RETAIL TRADE SECTOR EXPANDED 6.7% IN 1Q 2007 AFTER A 6.9 GROWTH IN 4Q 2006. RETAIL SALES GROWTH EASED FROM 7.9% IN THE PREVIOUS QUARTER TO 6.1% IN 1Q 2007, MAINLY DUE TO A DECELERATION IN MOTOR VEHICLES SALES. EXCLUDING MOTOR VEHICLES, RETAIL SALES ROSE BY 5.9%, UP FROM 4.2% IN 4Q 2006. IN THE WHOLESALE SEGMENT, GROWTH OF NON-OIL RE-EXPORTS REMAINED FIRM AT 5.9%, SLOWER THAN 6.3% IN 4Q 2006.

THE TRANSPORT AND STORAGE SECTOR GREW 4.4% IN 1Q 2007, UP FROM 4.0% A QUARTER EARLIER. THE AIR SEGMENT SAW A SLOWDOWN DUE TO A MODERATION IN AIR PASSENGER TRAFFIC GROWTH AND A DECLINE IN AIR CARGO. STRONGER ACTIVITY WAS RECORDED IN THE SEA SEGMENT ON THE BACK OF BETTER PERFORMANCE IN SEA CARGO HANDLED AND CONTAINER THROUGHPUT.

THE HOTELS AND RESTAURANTS SECTOR REGISTERED A SLOWER GROWTH OF 4.7% IN 1Q 2007, DOWN FROM 6.1% 4Q 2006. VISITOR ARRIVALS GREW AT A MORE MODEST PACE OF 4.1% COMPARED TO 8.4% IN THE PREVIOUS QUARTER. THE INCREASE IN HOTEL ROOM REVENUE MODERATED FROM THE 21% GAIN IN 4Q 2006 TO 14% IN 1Q 2007. HOWEVER, THE AVERAGE OCCUPANCY RATE OF HOTELS REMAINED HIGH AT 87%, A 4.3% POINTS INCREASE OVER THE CORRESPONDING PERIOD LAST YEAR.

THE INFORMATION AND COMMUNICATIONS SECTOR GREW 6.6% IN 1Q 2007, UP FROM 6.0% IN THE PREVIOUS QUARTER. WHILE THE IT SEGMENT SAW SOME MODERATION IN ACTIVITIES, THE TELECOMMUNICATIONS SEGMENT PERFORMED BETTER. INTERNATIONAL TELEPHONE CALL DURATION WENT UP SHARPLY BY 19%, UP FROM 11% IN 4Q 2006. GROWTH IN THE NUMBER OF MOBILE SUBSCRIBERS AND BROADBAND SUBSCRIBERS ALSO REMAINED STRONG DURING THE QUARTER.

BUSINESS SERVICES SECTOR EXPANDED BY 6.6% IN 1Q 2007, BETTER THAN THE 5.4% POSTED IN 4Q 2006. ROBUST PERFORMANCE WAS SEEN IN THE REAL ESTATE SEGMENT ON THE BACK OF CONTINUED STRENGTH IN THE LUXURY PROPERTY MARKET. THE SECTOR WAS ALSO WELL SUPPORTED BY THE OTHER SEGMENTS, PARTICULARLY BUSINESS REPRESENTATIVE OFFICES, AND BUSINESS & MANAGEMENT CONSULTANCY ACTIVITIES.

OUTLOOK

THE ECONOMIC OUTLOOK IS GENERALLY POSITIVE BUT SOME DOWNSIDE RISKS REMAIN. THESE INCLUDE A SLOWDOWN IN THE US ECONOMY, VULNERABILITY OF OIL PRICES TO SUPPLY SHOCKS AND A DISORDERLY UNWINDING OF GLOBAL UNBALANCES. BARRING THESE UNCERTAINTIES, ECONOMIC GROWTH IS EXPECTED TO REMAIN HEALTHY IN 2007.

BUSINESS SENTIMENTS ARE GENERALLY POSITIVE IN THE FINANCIAL SERVICES INDUSTRY. BANKS AND FINANCE COMPANIES, FUND MANAGEMENT FIRMS AND INSURANCE COMPANIES EXPECT AN IMPROVEMENT IN THE BUSINESS CLIMATE IN THE COMING MONTHS.

AN OVERALL NET WEIGHTED BALANCE OF 61% OF FIRMS IN THE REAL ESTATE INDUSTRY EXPECTS BETTER BUSINESS CONDITIONS FOR THE NEXT 6 MONTHS. WITHIN THE INDUSTRY, REAL ESTATE DEVELOPERS AND AGENTS FORESEE BRISK BUSINESS ACTIVITY AHEAD.

MANUFACTURING SECTORS ARE MORE OPTIMISTIC IN THE NEXT 6 MONTHS COMPARED TO THE FIRST QUARTER OF THE YEAR. OVERALL, A WEIGHTED 30% OF MANUFACTURERS FORESEE AN IMPROVED OUTLOOK, WHILE 4% PREDICT DETERIORATION. THIS RESULTS IN A NET WEIGHTED BALANCE OF 26% OF MANUFACTURERS EXPECTING BUSINESS CONDITIONS TO IMPROVE, WHICH IS HIGHER THAN 7% RECORDED A QUARTER AGO.

WHOLESALERS EXPECT TO DO WELL FOR THE NEXT 6 MONTHS, WITH A POSITIVE NET WEIGHTED BALANCE OF 17%. DEALERS OF FOOD AND BEVERAGES, TROPICAL PRODUCE, TEXTILES & LEATHER GOODS AND HOUSEHOLD ELECTRICAL APPLIANCE & EQUIPMENT ARE AMONG THOSE WHO ARE OPTIMISTIC ABOUT THE BUSINESS OUTLOOK AHEAD.

FIRMS IN THE RETAIL TRADE FORESEE BUSINESS TO BE LESS BRISK. IN PARTICULAR, DEPARTMENT STORES, SUPERMARKETS AND RETAILERS OF MOTOR VEHICLES EXPECT SLOWER BUSINESS IN THE COMING MONTHS.

WITHIN THE TRANSPORT AND STORAGE INDUSTRY, A NET WEIGHTED BALANCE OF 18% OF FIRMS FORECASTS IMPROVED BUSINESS PROSPECTS FOR THE NEXT 6 MONTHS. IN PARTICULAR, FIRMS IN THE WATER TRANSPORT AND SUPPORTING SERVICES EXPECT HIGHER LEVEL OF BUSINESS ACTIVITY.

HOTELIERS PROJECT A FAVOURABLE BUSINESS OUTLOOK, WHICH IS IN TANDEM WITH THE POSITIVE SENTIMENTS IN THE TOURISM MARKET. FOR THE CATERING TRADE INDUSTRY, BUSINESS OUTLOOK IN THE COMING MONTHS REMAINS THE SAME.

FIRMS IN THE INFORMATION AND COMMUNICATION INDUSTRY ANTICIPATES A HIGHER LEVEL OF BUSINESS ACTIVITY, WITH A POSITIVE NET WEIGHTED BALANCE OF 12%.

IN THE BUSINESS SERVICES INDUSTRY, AN OVERALL NET WEIGHTED BALANCE OF 24% OF FIRMS EXPRESSES POSITIVE SENTIMENTS. THESE INCLUDE FIRM ENGAGED IN RENTING OF CONSTRUCTION & INDUSTRIAL MACHINERY, ARCHITECTURAL & ENGINEERING, SPECIALISED DESIGN AND LABOUR RECRUITMENT SERVICES.

EXTRACTED FROM: MINISTRY OF TRADE AND INDUSTRY, SINGAPORE

SINGAPORE DEPARTMENT OF STATISTICS

CHANNELNEWS ASIA

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.	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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