MIRA INFORM REPORT

Report Date :

05.11.2007

IDENTIFICATION DETAILS

Name :	LINEAR TECHNOLOGY PTE LTD
Registered Office :	^507 Yishun Industrial Park A, Singapore - 768734
Country :	Singapore
Financials (as on) :	02.07.2006
Date of Incorporation :	^25/02/1989
Com. Reg. No.:	^198900759N
Legal Form :	^Pte Ltd
Line of Business :	The Testing And Design Of Linear Integrated Circuits

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

LINEAR TECHNOLOGY PTE LTD

Line Of Business

THE TESTING AND DESIGN OF LINEAR INTEGRATED CIRCUITS

Parent Company

LINEAR TECHNOLOGY CORPORATION

(PERCENTAGE OF SHAREHOLDING: 100%)

Financial Elements

FY 2006

COMPANY

Sales : S$100,380,859

Networth : S$112,436,096

Paid-Up Capital : S$2

Net result : S$264,499,062

Net Margin(%) : 263.50

Return on Equity(%) : 235.24

Leverage Ratio : 0.21

Based on the with the Accounting and Corporate Regulatory Authority (ACRA) as at 31/10/2007, the paid-up share capital has increased to S$7,909,369.

Rating

Credit Requested : USD90,000

Credit Rating : MINIMAL RISK

Credit Opinion : RECOMMEND ON USD90,000

COMPANY IDENTIFICATION

^{Subject Company : LINEAR TECHNOLOGY PTE LTD}

^{Former Name : -}

^{Business Address: 507 YISHUN INDUSTRIAL PARK A}

^{Town: SINGAPORE}

^{Postcode: 768734}

^{County: -}

^{Country: Singapore}

^{Telephone: 6753 2692}

^{Fax: 6754 4113}

^{ROC Number: 198900759N}

^{Reg. Town: -}

SUMMARY

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

^{Legal Form: Pte Ltd}

^{Date Inc.: 25/02/1989}

^{Previous Legal Form: -}

^{Summary year : 02/07/2006}

^{Sales: 100,380,859}

^{Networth : 112,436,096}

^{Capital: -}

^{Paid-Up Capital: 2}

^{Employees: 800}

^{Net result : 264,499,062}

^{Share value: -}

^{AUDITOR: ERNST & YOUNG}

^{BASED ON ACRA'S RECORD AS AT 31/10/2007}

^{NO OF SHARE CURRENCY AMOUNT}

^{ISSUED ORDINARY 4 SGD 7,909,369.00}

^{PAID-UP ORDINARY - SGD 7,909,369.00}

REFERENCES

^{Credit Requested: USD90,000}

^{Credit Opinion: RECOMMEND ON USD90,000}

^{Credit Rating: MINIMAL RISK}

^{Litigation: No}

^{Company status : TRADING}

^{Started : 25/02/1989}

PRINCIPAL(S)

^{LAWRENCE JOSEPH FRANICS F2547320P Managing Director}

DIRECTOR(S)

^{PATRICIA SEET GEOK NEO S1465985D Company Secretary}

^{Appointed on : 09/05/1989}

^{Street : 48 UNIVERSITY WALK}

^{Town: SINGAPORE}

^{Postcode: 297758}

^{Country: Singapore}

^{LAWRENCE JOSEPH FRANICS F2547320P Managing Director}

^{Appointed on : 16/08/1996}

^{Street : 7 DRAYCOTT DRIVE}

^#15-02

^{Town: SINGAPORE}

^{Postcode: 259421}

^{Country: Singapore}

^{PAUL COGHLAN 052453029 Director}

^{Appointed on : 08/06/1990}

^{Street : 686 BICKNELL ROAD LOS GATOS}

^CALIFORNIA

^Town:

^{Postcode: 95030}

^{Country: United States}

^{LAWRENCE JOSEPH FRANICS F2547320P Director}

^{Appointed on : 16/08/1996}

^{Street : 7 DRAYCOTT DRIVE}

^#15-02

^{Town: SINGAPORE}

^{Postcode: 259421}

^{Country: Singapore}

^{LOTHAR MAIER 073604179 Director}

^{Appointed on : 27/06/2003}

^{Street : 2306 GLORIA CT, PLEASANTON}

^{Town: CALIFORNIA}

^{Postcode: CA 94588}

^{Country: United States}

^{ALEXANDER ROBERT MCCANN 704554238 Director}

^{Appointed on : 01/03/2005}

^{Street : 2234 TERRENA VALLEY DRIVE}

^{SAN JOSE, CA 95121}

^Town:

^Postcode:

^{Country: United States}

^{SHARON CHUA S7700237E Company Secretary}

^{Appointed on : 27/10/2005}

^{Street : 313C ANCHORVALE ROAD}

^#07-148

^{Town: SINGAPORE}

^{Postcode: 543313}

^{Country: Singapore}

FORMER DIRECTOR(S)

^{WARK DANIEL WALTER S05043562}

^{DAVIES CLIVE BERTRAM S05121874}

^{SWANSON ROBERT HERBERT S05156349}

^{COGHLAN PAUL S05245302}

^{SHARMINI CHITRAN S1288855D}

^{LI SUI MAY DEBORAH S1731753I}

^{CLIVE BERTRAM DAVIES 051218744}

^{ROBERT HERBERT SWANSON JR 051563495}

ACTIVITY(IES)

^{SEMICONDUCTOR DEVICES Code:19130}

^{BASED ON ACRA'S RECORD AS AT 31/10/2007}

^{1) ASSEMBLY AND TESTING OF SEMICONDUCTORS; TESTING AND DESIGN OF LINEAR INTEGRATED CIRCUITS}

CHARGES

No Charges On Premise/Property In Our Database

PREMISES/PROPERTY INFORMATIONS

^{Date: 05/11/2007 Tax rate: 10}

^{Site Address : 507 YISHUN INDUSTRIAL PARK A}

^{Town: SINGAPORE Postcode: 768734}

^{Country: Singapore}

^{Annual Value: 710,000}

*TAX RATE OF 4% MEANS THE ADDRESS (I.E RESIDENTIAL PROPERTY) IS OWNER OCCUPIED.

*TAX RATE OF 10% MEANS THE ADDRESS (I.E RESIDENTIAL PROPERTY) IS PARTIALLY OR FULLY

RENTED OUT BY THE OWNER/OWNED BY COMPANY.

*FOR PROPERTIES OTHER THAN RESIDENTIAL PROPERTIES REGARDLESS RENTED OUT OR NOT, THE

TAX RATE IS 10% (I.E INDUSTRIAL AND COMMERCIAL PROPERTY).

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

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

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

BANKERS

No Bankers Information In Our Database

SHAREHOLDERS(S)

^{LINEAR TECHNOLOGY CORPORATION 4 Company}

^{Street : 1630 MCCARTHY BOULEVARD}

^{MILPITAS CALIFONIA 95035-7487}

^Town:

^Postcode:

^{Country: United States}

FORMER SHAREHOLDER(S)

^{SHARMINI CHITRAN 1}

^{LI SUI MAY DEBORAH 1}

HOLDING COMPANY

^{LINEAR TECHNOLOGY CORPORATION UF08152K % : 100}

SUBSIDIARY(IES)

^{LINEAR SEMICONDUCTOR SDN BHD}

^Malaysia

^{LINEAR TECHNOLOGY (TAIWAN) CORPORATION}

^Taiwan

PAYMENT HISTORY AND EXPERIENCES

Trade Morality: AVERAGE

Liquidity : SUFFICIANT

Payments : REGULAR

Trend : UPWARD

Financial Situation: AVERAGE

FINANCIAL ELEMENTS

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

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

^{Date Account Lodged: 16/01/2007}

^{Balance Sheet Date: 02/07/2006 03/07/2005}

^{Number of weeks: 52 53}

^{Consolidation Code: COMPANY COMPANY}

^{--- ASSETS}

^{Tangible Fixed Assets: 71,037,188 52,634,533}

^{Investments 600,061 274,319}

^{Total Fixed Assets: 71,637,249 52,908,852}

^{Receivables: 35,914,083}

^{Cash,Banks, Securitis: 64,838,886 328,117,821}

^{Other current assets: 93,299 85,707}

^{Total Current Assets: 64,932,185 364,117,611}

^{TOTAL ASSETS: 136,569,434 417,026,463}

^{--- LIABILITIES}

^{Equity capital: 2 2}

^{Profit & loss Account: 112,436,094 381,575,226}

^{Total Equity: 112,436,096 381,575,228}

^{L/T deffered taxes: 1,774,497 26,617,122}

^{Total L/T Liabilities: 1,774,497 26,617,122}

^{Trade Creditors: 12,966,066 480,755}

^{Provisions: 4,187,592 3,797,341}

^{Total short term Liab.: 22,358,841 8,834,113}

^{Prepay. & Def. charges: 5,205,183 4,556,017}

^{TOTAL LIABILITIES: 24,133,338 35,451,235}

^{PROFIT & LOSS ACCOUNT}

^{Net Sales 100,380,859 91,550,996}

^{Purchases,Sces & Other Goods: 44,239,937 38,947,187}

^{Gross Profit: 56,140,922 52,603,809}

^{NET RESULT BEFORE TAX: 243,091,107 51,192,102}

^{Tax : -21,407,955 19,855,234}

^{Net income/loss year: 264,499,062 31,336,868}

^{Dividends: 533,638,194 -}

^{Directors Emoluments: 287,183 286,340}

^{Financial Income: 3,832 595}

RATIOS

^{02/07/2006 03/07/2005}

^{Turnover per employee: 125476.07 114438.74}

^{Net result / Turnover(%): 2.63 0.34}

^{Net Margin(%): 263.50 34.23}

^{Return on Equity(%): 235.24 8.21}

^{Return on Assets(%): 193.67 7.51}

^{Dividends Coverage: 0.50 0.50}

^{Net Working capital: 42573344.00 355283498.00}

^{Cash Ratio: 2.90 37.14}

^{Quick Ratio: 2.90 41.21}

^{Current ratio: 2.90 41.22}

^{Receivables Turnover: 0.00 141.22}

^{Leverage Ratio: 0.21 0.09}

^{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}

^{Receivables Turnover : (Receivable*360)/Net sales}

^{Leverage Ratio : Total liabilities/(Total equity-Intangible assets)}

FINANCIAL COMMENTS

^{THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 02/07/2006 COVERS THE PERIOD FROM 04/07/2005 TO 02/07/2006, A TOTAL OF 52 WEEKS. THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 03/07/2005 COVERS THE PERIOD FROM 28/06/2004 TO 03/07/2005, A TOTAL OF 53 WEEKS. THUS, THE ANALYSIS MAY NOT GIVE A TRUE AND FAIR VIEW.}

^{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 DECLINING BY 70.53% FROM S$381,575,228 IN FY 2005 TO S$112,436,096 IN FY 2006. THIS WAS DUE TO LOWER ACCUMULATED PROFIT OF S$112,436,094 (2005: S$381,575,226); A DECLINE OF 70.53% FROM THE PRIOR FINANCIAL YEAR.}

^LEVERAGE:

^{IN THE SHORT-TERM, SUBJECT WAS LARGELY FINANCED BY TRADE CREDITORS WHICH MADE UP 57.99% (2004: 68.66%) OF THE TOTAL CURRENT LIABILITIES AND AMOUNTED TO S$12,966,066 (2005: S$480,755). THE BREAKDOWN IS AS FOLLOWS:}

^{-TRADE PAYABLES - 2006: S$1,374,916 (2005: S$480,755)}

^{-HOLDING COMPANY - 2006: S$11,432,504 (2005: -)}

^{-SUBSIDIARY - 2006: S$158,646 (2005: -)}

^{N ALL, LEVERAGE RATIO ROSE FROM 0.09 TIMES TO 0.21 TIMES AS A RESULT OF A RISE IN TOTAL LIABILITIES AND A DECLINE IN TOTAL EQUITY.}

^LIQUIDITY:

^{IN GENERAL, SUBJECT'S LIQUIDITY SITUATION WAS PASSABLE AS SEEN FROM THE RISE IN NET WORKING CAPITAL AND LIQUIDITY RATIOS. CURRENT RATIO FELL TO 2.90 TIMES, DOWN FROM 41.22 TIMES AND QUICK RATIO FELL TO 2.90 TIMES FROM 41.21 TIMES IN FY 2005. NET WORKING CAPITAL FELL BY 88.02% FROM S$355,283,498 IN FY 2005 TO S$42,573,344.}

^{CASH AND CASH EQUIVALENTS COMPRISE OF:}

^{-CASH AT BANKS AND IN HAND - 2006: S$9,029,185 (2005: S$752,819)}

^{PROFITABILITY:}

^{REVENUE POSTED AN INCREASE OF 9.64% FROM S$91,550,996 IN FY 2005 TO S$100,380,859 AND NET PROFIT ROSE BY 7.44 TIMES TO S$264,499,062 (2005: S$31,336,868). HENCE, NET MARGIN ROSE TO 263.50% (2005: 34.23%).}

^{DEBT SERVICING:}

^{DEBT SERVICING PROBLEMS MIGHT NOT BE EXPECTED IF REVENUE AND EARNINGS CAN BE MAINTAINED AND PAYMENT BY TRADE DEBTORS ARE FORTHCOMING.}

^{NOTES TO THE FINANCIAL STATEMENTS:}

^{CONTINGENT LIABILITIES}

^{BANKER GUARANTEES - 2006: S$134,000 (2005: S$198,000)}

^{THE COMPANY HAS GUARANTEED THIS AMOUNT TO SP SERVICES LTD FOR PROVIDING WATER AND ELECTRICITY SERVICES.}

^{SUBSEQUENT EVENTS}

^{SUBSEQUENT TO THE END OF THE FINANCIAL YEAR, THE COMPANY ACQUIRED 7 SUBSIDIARIES FROM THE HOLDING COMPANY FOR A SHARE CONSIDERATION OF S$7,909,367 AS PART OF A GROUP RESTRUCTURING.}

BACKGROUND/OPERATION

^{THE COMPANY WAS INCORPORATED IN THE REPUBLIC OF SINGAPORE ON 25/02/1989 AS A LIMITED PRIVATE COMPANY AND IS TRADING UNDER ITS PRESENT NAMESTYLE AS "LINEAR TECHNOLOGY PTE LTD".}

^{AS AT 31/10/2007, THE COMPANY HAS ISSUED AND PAID-UP CAPITAL OF 4 SHARES OF A VALUE OF S$7,909,369.}

^{PRINCIPAL ACTIVITIES:}

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

^{1) ASSEMBLY AND TESTING OF SEMICONDUCTORS;}

^{TESTING AND DESIGN OF LINEAR INTEGRATED CIRCUITS}

^{DURING THE FINANCIAL YEAR UNDER REVIEW, THE PRINCIPAL ACTIVITIES OF THE COMPANY CONSIST OF THE TESTING AND DESIGN OF LINEAR INTEGRATED CIRCUITS. THE SUBSIDIARY IS PRIMARILY ENGAGED IN THE MANUFACTURE OF LINEAR INTEGRATED CIRCUITS.}

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

^{SUBJECT ENGAGES IN THE FOLLOWING ACTIVITIES:}

^{* DESIGNS, MANUFACTURES AND MARKETS A BROAD LINE OF STANDARD HIGH PERFORMANCE INTEGRATED CIRCUITS.}

^{PRODUCTS DEALINGS:}

^{* AMPLIFIERS}

^{* BATTERY MANAGEMENT}

^{* DATA CONVERTERS}

^{* HIGH FREQUENCY}

^{* INTERFACE}

^{* VOLTAGE REGULATORS}

^{* VOLTAGE REFERENCES}

^{APPLICATIONS:}

^{* TELECOMMUNICATIONS}

^{* CELLULAR TELEPHONES}

^{* NETWORKING PRODUCTS}

^{* NOTEBOOK AND DESKTOP COMPUTERS}

^{* VIDEO/MULTIMEDIA}

^{* INDUSTRIAL INSTRUMENTATION}

^{* AUTOMOTIVE ELECTRONICS}

^{* FACTORY AUTOMATION}

^{* PROCESS CONTROL}

^{* MILITARY AND SPACE SYSTEMS}

^{FROM THE TELE-INTERVIEW CONDUCTED ON 05/11/2007, THE FOLLOWING WAS GATHERED:}

^{NUMBER OF EMPLOYEES:}

^{* 2007: 800}

^{NO OTHER TRADE INFORMATION IS AVAILABLE ON 05/11/2007.}

^{THE COMPANY IS A WHOLLY-OWNED SUBSIDIARY OF LINEAR TECHNOLOGY CORPORATION, INCORPORATED IN THE UNITED STATES OF AMERICA, WHICH IS ALSO THE COMPANY'S ULTIMATE HOLDING COMPANY.}

^{NUMBER OF EMPLOYEES (2 JULY):}

^{* COMPANY - 2006: NOT AVAILABLE (2005: NOT AVAILABLE)}

^{REGISTERED ADDRESS:}

^{1 MARINA BOULEVARD}

^{#28-00 ONE MARINA BOULEVARD}

^{SINGAPORE 018989}

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

^{BUSINESS ADDRESS:}

^{507 YISHUN INDUSTRIAL PARK A}

^{SINGAPORE 118481}

^{- OWNED PREMISE}

^WEBSITE:

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

^EMAIL:

^-

MANAGEMENT

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

^{1) PAUL COGHLAN, AN AMERICAN}

^{- BASED IN UNITED STATES OF AMERICA.}

^{2) LOTHAR MAIER, AN AMERICAN}

^{- BASED IN UNITED STATES OF AMERICA.}

^{3) ALEXANDER ROBERT MCCANN, A BRITISH}

^{- BASED IN UNITED STATES OF AMERICA.}

^{4) LAWRENCE JOSEPH FRANICS, AN AMERICAN}

^{- BASED IN SINGAPORE.}

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%)

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