MIRA INFORM REPORT

Report Date :

05.10.2007

IDENTIFICATION DETAILS

Name :	VERIGY LTD.
Registered Office :	^1 Yishun Avenue^7, Singapore – 768923
Country :	Singapore
Financials (as on) :	31.10.2006
Date of Incorporation :	^23/01/2006
Com. Reg. No.:	^200601091C
Legal Form :	^Pub Ltd Co
Line of Business :	Design, Develop and Manufacture Semiconductor Test Equipment

RATING & COMMENTS

MIRA’s Rating :

A

RATING		STATUS	PROPOSED CREDIT LINE
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large

Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear

Subject Company

VERIGY LTD.

Line Of Business 

DESIGN, DEVELOPE AND MANUFACTURE SEMICONDUCTOR TEST EQUIPMENT

Parent Company

AGILENT TECHNOLOGIES, INC.

(PERCENTAGE OF SHAREHOLDING: 83.70%)

Financial Elements

FY 2006

CONSOLIDATED

Sales : USD778,000,000

Networth : USD389,000,000

Paid-Up Capital : USD358,000,000

Net result : -

Net Margin(%) : -

Return on Equity(%) : -

Leverage Ratio : 0.77

COMPANY IDENTIFICATION

^{Subject Company: VERIGY LTD.}

^{Former Name: VERIGY PTE. LTD.}

^{Business Address: 1 YISHUN AVENUE 7}

^{Town: SINGAPORE}

^{Postcode: 768923}

^{County: -}

^{Country: Singapore}

^{Telephone: 6755 2033}

^{Fax: 6270 8372}

^{ROC Number: 200601091C}

^{Reg. Town: -}

PREVIOUS IDENTIFICATION

^{VERIGY PTE. LTD. DATE OF CHANGE OF NAME: 26/05/2006}

SUMMARY

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

^{Legal Form: Pub Ltd Co}

^{Date Inc.: 23/01/2006}

^{Previous Legal Form: -}

^{Summary year: 31/10/2006}

^{Sales: 778,000,000}

^{Net worth: 389,000,000}

^{Capital: -}

^{Paid-Up Capital: 358,000,000}

^{Employees: Not available}

^{Net result: -}

^{Share value: -}

^{Auditor: PRICEWATERHOUSECOOPERS}

REFERENCES

^{Litigation: No}

^{Company status: TRADING}

^{Started: 23/01/2006}

PRINCIPAL(S)

^{CHAN KWAI WAH PAUL S2016300C Director}

DIRECTOR(S)

^{ERNEST LUKENS GODSHALK III 057142095 Director}

^{Appointed on: 05/06/2006}

^{Street: 675 HALE ST. BEVERLEY}

^{Town: MASSACHUSET}

^{Postcode: MA 01915}

^{Country: United States}

^{ADRIAN TREMAYNE DILLON 057872826 Director}

^{Appointed on: 03/03/2006}

^{Street: 490 UNIVERSITY AVENUE}

^{LOS ALTOS}

^{Town: CALIFORNIA}

^{Postcode: CA 94022}

^{Country: United States}

^{KEITH LEE BARNES 058067995 Director}

^{Appointed on: 05/06/2006}

^{Street: 6135 COUNTRY CLUB PARKWAY}

^{SAN JOSE}

^{Town: CALIFORNIA}

^{Postcode: CA 95138}

^{Country: United States}

^{CHARLES SCOTT GIBSON 212093316 Director}

^{Appointed on: 05/06/2006}

^{Street: 1680 SW MONTGOMERY DRIVE}

^PORTLAND

^{Town: OREGON}

^{Postcode: 97201}

^{Country: United States}

^{CHAN KWAI WAH PAUL S2016300C Director}

^{Appointed on: 05/06/2006}

^{Street: 35B YARWOOD AVENUE}

^{Town: SINGAPORE}

^{Postcode: 588011}

^{Country: Singapore}

^{ERIC MEURICE 03TD30263 Director}

^{Appointed on: 01/11/2006}

^{Street: HANGMOOR, CALLOW HILL}

^{VIRGINIA WATER}

^{Town: -}

^{Postcode: -}

^{Country: United Kingdom}

^{CLAUDINE SIMSON JF593709 Director}

^{Appointed on: 01/11/2006}

^{Street: 4222 HIDDEN CANYON COVE}

^{AUSTIN, TX 78746}

^{Town: TEXAS}

^{Postcode: -}

^{Country: United States}

^{TAN CHOON NOI AILEEN S1779480I Company Secretary}

^{Appointed on: 01/09/2006}

^{Street: 30A HOLLAND GROVE ROAD}

^{HENRY PARK}

^{Town: SINGAPORE}

^{Postcode: 278806}

^{Country: Singapore}

^{SOPHIE LIM LEE CHENG S7321091G Company Secretary}

^{Appointed on: 01/09/2006}

^{Street: 40 FRANKEL AVENUE}

^{FRANKEL ESTATE}

^{Town: SINGAPORE}

^{Postcode: 458171}

^{Country: Singapore}

FORMER DIRECTOR(S)

^{RICHARD JOHN ALLEN S1347717E}

^{TANG AI AI (MRS WONG AI AI) S1599153D}

ACTIVITY(IES)

^{SEMICONDUCTOR DEVICES Code:19130}

^{BUSINESS SERVICES Code:4}

^{BASED ON ACRA'S RECORD AS AT 29/09/2007}

^{1) OTHER INVESTMENT HOLDING COMPANIES; INVESTMENT HOLDING COMPANY}

^{2) OTHER SUPPORT ACTIVITIES; SALES & SUPPORT}

CHARGES

No Charges On Premises/Property In Our Database

PREMISES/PROPERTY INFORMATIONS

No Premises/Property Information In Our Databases

BANKERS

No Banker Information In Our Database

SHAREHOLDERS(S)

^{AGILENT TECHNOLOGIES, INC. 50,000,000 Company}

^{Street: 395 PAGE MILL ROAD}

^{PALO ALTO}

^{Town: CALIFORNIA}

^{Postcode: 94306}

^{Country: United States}

^{CEDE & CO. 8,651,559 Company}

^{Street: 55 WATER STREET, NY 10041-0099}

^{Town: NEW YORK}

^{Postcode: -}

^{Country: United States}

^{CEDE & CO 1,085,408 Company}

^{Street: P O BOX 20, BOWLING GREEN STN}

^{Town: NEW YORK}

^{Postcode: NY 10274}

^{Country: United States}

HOLDING COMPANY

^{AGILENT TECHNOLOGIES, INC. UF42387G %: 83.70}

SUBSIDIARY(IES)

No Participation In Our Database

PAYMENT HISTORY AND EXPERIENCES

^{Trade Morality: AVERAGE}

^{Liquidity: ABUNDANT}

^{Payments: REGULAR}

^{Trend: UPWARD}

^{Financial Situation: AVERAGE}

LITIGATION(S)

No Litigation In Our Database

FINANCIAL ELEMENTS

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

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

^{Date Account Lodged: 24/05/2007}

^{Balance Sheet Date: 31/10/2006 31/10/2005}

^{Number of weeks: 52 52}

^{Consolidation Code: CONSOLIDATED CONSOLIDATED}

^{--- ASSETS}

^{Preliminary Exp 61,000,000 26,000,000}

^{Intangible Fixed Assets: 18,000,000 17,000,000}

^{Tangible Fixed Assets: 44,000,000 18,000,000}

^{Total Fixed Assets: 123,000,000 61,000,000}

^{Inventories: 87,000,000 110,000,000}

^{Receivables: 108,000,000 75,000,000}

^{Cash,Banks,Securities: 300,000,000}

^{Other current assets: 56,000,000 14,000,000}

^{Total Current Assets: 551,000,000 199,000,000}

^{TOTAL ASSETS: 674,000,000 260,000,000}

^{--- LIABILITIES}

^{Equity capital: 358,000,000 86,000,000}

^{Profit & loss Account: 34,000,000 -}

^{Other: -3,000,000 1,000,000}

^{Total Equity: 389,000,000 87,000,000}

^{Other long term Liab.: 34,000,000 15,000,000}

^{Total L/T Liabilities: 34,000,000 15,000,000}

^{Trade Creditors: 75,000,000 21,000,000}

^{Prepay. & Def. charges: 15,000,000 23,000,000}

^{Provisions: 23,000,000 32,000,000}

^{Other Short term Liab.: 138,000,000 82,000,000}

^{Total short term Liab.: 251,000,000 158,000,000}

^{TOTAL LIABILITIES: 285,000,000 173,000,000}

^{PROFIT & LOSS ACCOUNT}

^{Net Sales 778,000,000 456,000,000}

^{Purchases,Sces & Other Goods: 428,000,000 316,000,000}

^{Result of ordinary operations 16,000,000 -105,000,000}

^{NET RESULT BEFORE TAX: 21,000,000 -106,000,000}

^{Tax: 21,000,000 13,000,000}

^{Net income/loss year: - -119,000,000}

^{Depreciation: 9,000,000 6,000,000}

RATIOS

^{31/10/2006 31/10/2005}

^{Net result / Turnover(%): 0.00 -0.26}

^{Stock / Turnover(%): 0.11 0.24}

^{Net Margin(%): 0.00 -26.10}

^{Return on Equity(%): 0.00 -136.78}

^{Return on Assets(%): 0.00 -45.77}

^{Net Working capital: 300000000.00 41000000.00}

^{Cash Ratio: 1.20 0.00}

^{Quick Ratio: 1.63 0.47}

^{Current ratio: 2.20 1.26}

^{Receivables Turnover: 49.97 59.21}

^{Leverage Ratio: 0.77 2.47}

^{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 3.47 TIMES FROM USD87,000,000 IN 2005 TO USD389,000,000 IN 2006.}

^{THIS WAS DUE TO THE INCREASE IN PAID UP CAPITAL FROM USD86,000,000 TO USD358,000,000 IN 2006. IN ADDITION, ACCUMULATED PROFITS AMOUNTED TO USD34,000,000.}

^LEVERAGE:

^{IN THE SHORT-TERM, SUBJECT WAS LARGELY FINANCED BY OTHER SHORT TERM LIABILITIES WHICH MADE UP 54.98% (2005: 51.90%) OF THE TOTAL CURRENT LIABILITIES AND AMOUNTED TO USD138,000,000 (2005: USD82,000,000).}

^{THE BREAKDOWN IS AS FOLLOWS:}

^{-PAYABLES TO AGILENT - 2006: USD37,000,000 (2005: - )}

^{-EMPLOYEE COMPENSATION AND BENEFITS - 2006: USD43,000,000 (2005: USD40,000,000)}

^{-DEFERRED REVENUE - 2006: USD58,000,000 (2005: USD42,000,000)}

^{TRADE CREDITORS ROSE BY 2.57 TIMES TO USD75,000,000 (2005: USD21,000,000).}

^{SUBJECT'S LONG TERM LIABILITIES ALSO ROSE BY 1.27 TIMES TO USD34,000,000 (2005: USD15,000,000).}

^{IN ALL, LEVERAGE RATIO FELL FROM 2.47 TIMES TO 0.77 TIMES AS A RESULT OF A MORE THAN PROPORTIONATE RISE IN TOTAL EQUITY AS COMPARED TO THE RISE IN TOTAL LIABILITIES.}

^LIQUIDITY:

^{IN GENERAL, SUBJECT'S LIQUIDITY SITUATION WAS ADEQUATE WITH NET WORKING CAPITAL RISING BY 6.32 TIMES TO USD300,000,000 (2005: USD41,000,000).}

^{CURRENT RATIO ROSE TO 2.20 TIMES, UP FROM 1.26 TIMES AND QUICK RATIO IMPROVED TO 1.63 TIMES FROM 0.47 TIMES IN 2005.}

^{PROFITABILITY:}

^{REVENUE POSTED AN INCREASE OF 70.61% FROM USD456,000,000 IN 2005 TO USD778,000,000 BUT SUBJECT DID NOT POST ANY NET PROFIT/NET LOSS ON THE CURRENT FINANCIAL YEAR (2005: NET LOSS OF USD119,000,000). THIS WAS DUE TO THE PROVISION FOR TAXES WHICH ALSO AMOUNTED TO}

^{USD21,000,000 IN THE CURRENT YEAR.}

^{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, SUBJECT DID NOT INCUR ANY LONG TERM LIABILITIES DURING THE FINANCIAL YEAR UNDER REVIEW.}

^{NON-CURRENT ASSETS:}

^{THE FOLLOWING ITEM IS CLASSIFIED UNDER PRELIMINARY:}

^{-OTHER LONG TERM ASSETS - 2006: USD61,000,000 (2005: USD26,000,000)}

BACKGROUND/OPERATION

^{THE COMPANY WAS INCORPORATED IN THE REPUBLIC OF SINGAPORE ON 23/12/2006 AS A PUBLIC COMPANY LIMITED BY SHARES WITH MORE THAN 500 SHAREHOLDERS AND IS TRADING UNDER ITS PRESENT NAMESTYLE OF "VERIGY LTD.".}

^{SUBJECT WAS FORMERLY KNOWN AS VERIGY PTE. LTD. AND CHANGED TO ITS PRESENT NAMESTYLE ON 26/05/2006.}

^{AS AT 29/09/2007, THE COMPANY HAS AN ISSUED AND PAID-UP CAPITAL OF 59,736,967 SHARES, OF A VALUE OF USD669,294,580.30.}

^{PRINCIPAL ACTIVITIES:}

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

^{1) OTHER INVESTMENT HOLDING COMPANIES; INVESTMENT HOLDING COMPANY}

^{2) OTHER SUPPORT ACTIVITIES; SALES & SUPPORT}

^{DURING THE FINANCIAL YEAR (S) UNDER REVIEW, THE PRINCIPAL ACTIVITIES OF THE COMPANY ARE TO DESIGN, DEVELOPE AND MANUFACTURE SEMICONDUCTOR TEST EQUIPMENT AND PROVIDE TEST SYSTEM SOLUTIONS THAT ARE USED IN THE MANUFACTURE OF SYSTEM ON A CHIP, SYSTEM IN A PACKAGE, HIGH SPEED MEMORY AND MEMRY DEVICES.}

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

^{SUBJECT IS THE GLOBAL HEADQUARTERS FOR VERIGY LTD, A COMPANY INCORPORATED IN THE USA, WHICH ENGAGES IN THE BUSINESS OF DESIGNING, DEVELOPING, MANUFACTURING AND SELLING OF ADVANCED TEST SYSTEMS AND SOLUTIONS FOR THE SEMICONDUCTOR INDUSTRY.}

^{IMPORT COUNTRIES}

^{- USA}

^{ACTIVITIES, PRODUCTS AND SERVICES:}

^{* DESIGN, DEVELOP, MANUFACTURE AND SELL ADVANCED TEST SYSTEMS AND SOLUTIONS FOR THE SEMICONDUCTOR INDUSTRY.}

^{* OFFER A SINGLE PLATFORM FOR EACH OF THE TWO GENERAL CATEGORIES OF DEVICES BEING TESTED: OUR 93000 SERIES PLATFORM, DESIGNED TO TEST SYSTEM-ON-A-CHIP (SOC), SYSTEM INA-PACKAGE (SIP) AND HIGH-SPEED MEMORY DEVICES, AND VERSATEST V5000 SERIES PLATFORM, DESIGNED TO TEST MEMORY DEVICES, INCLUDING FLASH MEMORY AND MULTI-CHIP PACKAGES.}

^NEWS:

^{VERIGY ANNOUNCES FINANCIAL RESULTS FOR SECOND QUARTER, 2007 VERIGY EXCEEDS REVENUE AND EARNINGS GUIDANCE; SEQUENTIAL ORDER GROWTH 52%}

^{VERIGY LTD. (NASDAQ:VRGY), TODAY REPORTED FINANCIAL RESULTS FOR ITS FISCAL SECOND QUARTER, ENDED APRIL 30, 2007.}

^{SECOND QUARTER REVENUE WAS $183 MILLION, AN 11 PERCENT INCREASE FROM THE PRIOR QUARTER REVENUE OF $165 MILLION AND A 5 PERCENT DECLINE FROM $192 MILLION IN THE SECOND QUARTER OF FISCAL 2006. ORDERS FOR THE SECOND QUARTER WERE $202 MILLION, AN INCREASE OF 52 PERCENT FROM THE PRIOR QUARTER OF $133 MILLION. THE BOOK-TO-BILL RATIO WAS 1.10 FOR THE SECOND QUARTER.}

^{"VERIGY HAD A VERY STRONG QUARTER FOR BOTH PRODUCT LINES," SAID KEITH BARNES, VERIGY PRESIDENT AND CHIEF EXECUTIVE OFFICER. "OUR V5000 MEMORY PRODUCTS SHOWED SUSTAINED STRENGTH IN THE QUARTER AND OUR SOC REVENUE GREW 41 PERCENT SEQUENTIALLY. WE RECEIVED INCREASED BUSINESS FROM EXISTING CUSTOMERS AND WON NEW ACCOUNTS IN DESIGN VALIDATION AND PRODUCTION TEST.}

^{OUTLOOK FOR Q3 2007}

^{FOR THE THIRD QUARTER ENDING JULY 31, 2007, THE COMPANY PROVIDED THE FOLLOWING GUIDANCE:}

^{* REVENUE IS EXPECTED TO BE IN THE RANGE OF Us$195 TO US$205 MILLION.}

^{* GAAP NET INCOME IS EXPECTED TO BE IN THE RANGE OF US$26 TO US$29 MILLION, OR US$0.43 TO US$0.48 PER SHARE, INCLUDING APPROXIMATELY US$3.2 TO US$3.7 MILLION OF SHARE-BASED COMPENSATION EXPENSE.}

^{* ON A NON-GAAP BASIS, THE COMPANY EXPECTS TO REPORT NET INCOME OF US$27 TO US$30 MILLION, OR US$0.45 TO US$0.50 PER SHARE. TO RECONCILE THIRD QUARTER GAAP AND NON-GAAP NET INCOME AND EARNINGS PER SHARE, THE COMPANY EXPECTS TO EXCLUDE US$1 TO US$1.5 MILLION OF CHARGES RELATED TO SEPARATION AND RESTRUCTURING FROM THE GAAP RESULTS.}

^{--EXTRACTED FROM: BUSINESSWIRE. (24/05/2007)}

^{AGILENT TECHNOLOGIES ANNOUNCES NAME OF SEMICONDUCTOR SPIN-OFF COMPANY}

^{* AGILENT TECHNOLOGIES INC. ANNOUNCED IT HAS SELECTED A NAME FOR ITS UPCOMING SEMICONDUCTOR TEST SPIN-OFF COMPANY. THE NEW NAME, VERIGY, WILL BE USED WHEN THE NEW COMPANY SEPARATES FROM AGILENT, WHICH IS EXPECTED TO OCCUR NEAR MID-2006.}

^{* AGILENT'S TARGET IS TO COMPLETE AN INITIAL PUBLIC OFFERING OF VERIGY NEAR MID-2006, AND TO COMPLETE THE SPIN-OFF OF VERIGY BY THE END OF OCTOBER 2006.}

^{--EXTRACTED FROM: PALO ALTO, CALIF. (12/01/2006)}

^{VERIGY LTD. ANNOUNCES INITIAL PUBLIC OFFERING}

^{* VERIGY LTD. TODAY ANNOUNCED ITS INITIAL PUBLIC OFFERING OF 8.5 MILLION SHARES OF COMMON STOCK, PRICED AT $15.00 PER SHARE. VERIGY, THE SEMICONDUCTOR TEST BUSINESS RECENTLY SEPARATED FROM AGILENT TECHNOLOGIES INC. (NYSE: A), WILL BE LISTED ON THE NASDAQ NATIONAL MARKET BEGINNING TODAY, UNDER THE TICKER SYMBOL VRGY. GOLDMAN, SACHS & CO. ACTED AS LEAD MANAGER; CREDIT SUISSE SECURITIES (USA) LLC ACTED AS CO-LEAD MANAGER; AND SG COWEN & CO. LLC AND THOMAS WEISEL PARTNERS LLC ACTED AS CO-MANAGERS.}

^{* ALL OF THE SHARES ARE BEING SOLD BY VERIGY LTD. THE COMPANY HAS GRANTED THE UNDERWRITERS AN OPTION TO PURCHASE AN ADDITIONAL 1,275,000 SHARES TO COVER OVER-ALLOTMENTS, IF ANY. THE OFFERING IS EXPECTED TO CLOSE ON JUNE 16, 2006.}

^{* AFTER THE OFFERING, VERIGY WILL HAVE APPROXIMATELY 58.5 MILLION ORDINARY SHARES OUTSTANDING, WITH AGILENT OWNING APPROXIMATELY 85.5 PERCENT OF THOSE SHARES. AGILENT HAS ANNOUNCED THAT IT PLANS TO DISTRIBUTE THE VERIGY ORDINARY SHARES IT HOLDS TO THE HOLDERS OF AGILENT'S COMMON STOCK BY OCTOBER 31, 2006, THE END OF ITS FISCAL YEAR. THE EXACT DISTRIBUTION FORMULA AND RECORD DATE TO QUALIFY FOR THE DISTRIBUTION WILL BE DETERMINED AT A FUTURE DATE.}

^{--EXTRACTED FROM: http://www.agilent.com (13/06/2006)}

^{INFORMATION ON HOLDING COMPANY AGILENT TECHNOLOGIES INC:}

^{* ENGAGES IN THE BUSINESS OF ADVANCING ELECTRONICS, COMMUNICATIONS, LIFE SCIENCES}

^{AND CHEMICAL ANALYSIS}

^{* HAS WORLDWIDE MANUFACTURING FACILITIES}

^{NO OTHER TRADE INFORMATION WAS MADE AVAIALBLE ON 05/10/2007.}

^{SUBJECT IS A SUBSIDIARY OF AGILENT TECHNOLOGIES INC, A COMPANY INCORPORATED IN THE UNITED STATES OF AMERICA.}

^{NUMBER OF EMPLOYEES (31 OCTOBER)}

^{- GROUP - 2006: NOT AVAILABLE (2005: NOT AVAILABLE)}

^{REGISTERED ADDRESS:}

^{1 MARINA BOULEVARD}

^#28-00

^{ONE MARINA BOULEVARD}

^{SINGAPORE 018989}

^{DATE OF CHANGE OF ADDRESS: 01/09/2006}

^{BUSINESS ADDRESS:}

^{1 YISHUN AVENUE 7}

^{SINGAPORE 768923}

^{- RENTED PREMISE}

^{- OWNED BY: AGILENT TECHNOLOGIES SINGAPORE PTE LTD}

^WEBSITES:

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

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

^EMAIL:

^{support-asia@verigy.com}

MANAGEMENT

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

^{1) ERNEST LUKENS GODSHALK, AN AMERICAN}

^{- BASED IN THE UNITED STATES OF AMERICA}

^{2) ADRIAN TREMAYNE DILLON, AN AMERICAN}

^{- BASED IN THE UNITED STATES OF AMERICA}

^{3) KEITH LEE BARNES, AN AMERICAN}

^{- BASED IN THE UNITED STATES OF AMERICA}

^{4) CHARLES SCOTT GIBSON, AN AMERICAN}

^{- BASED IN THE UNITED STATES OF AMERICA}

^{5) CHAN KWAI WAH PAUL, A SINGAPOREAN}

^{- HOLDS OTHER DIRECTORSHIPS AS RECORDED IN OUR DATABASE}

^{SINGAPORE TELECOMMUNICATIONS LIMITED}

^{COMPAQ COMPUTER ASIA PTE LTD}

^{HEWLETT-PACKARD SINGAPORE (PRIVATE) LIMITED}

^{COMPAQ COMPUTER CORPORATION MSIA SDN BHD}

^{6) CLAUDINE SIMSON, A CANADIAN}

^{- BASED IN THE UNITED STATES OF AMERICA}

^{7) ERIC MEURICE, A FRENCH}

^{- BASED IN THE UNITED KINGDOM}

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