MIRA INFORM REPORT

Report Date :

08.10.2007

IDENTIFICATION DETAILS

Name :	HUSKY INJECTION MOLDING SYSTEMS SINGAPORE PTE. LTD.
Registered Office :	^19 Changi South Street^1, Singapore – 486779
Country :	Singapore
Financials (as on) :	31.12.2004
Date of Incorporation :	^04/10/1994
Com. Reg. No.:	^199407150K
Legal Form :	^Pte Ltd
Line of Business :	Manufacturing of Machines

RATING & COMMENTS

MIRA’s Rating :

Ca

RATING		STATUS	PROPOSED CREDIT LINE
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

Status :	Moderate
Payment Behaviour :	Unknown
Litigation :	Exists

Subject Company

HUSKY INJECTION MOLDING SYSTEMS SINGAPORE PTE. LTD.

Line Of Business 

MANUFACTURING OF MACHINES

Parent Company

HUSKY INJECTION MOLDING SYSTEMS LTD

(PERCENTAGE OF SHAREHOLDINGS: 100%)

Financial Elements

FY 2004

COMPANY

Sales : S$39,628,867

Networth : S$ 3,890,936

Paid-Up Capital : S$ 74,074

Net result : S$ 1,521,555

Net Margin(%) : 3.84

Return on Equity(%) : 39.11

Leverage Ratio : 3.49

COMPANY IDENTIFICATION

^{Subject Company : HUSKY INJECTION MOLDING SYSTEMS SINGAPORE PTE. LTD.}

^{Former Name : -}

^{Business Address : 19 CHANGI SOUTH STREET 1}

^{Town : SINGAPORE}

^{Postcode : 486779}

^{Country : Singapore}

^{Telephone : 6276 8616}

^{Fax : 6542 5938}

^{ROC Number : 199407150K}

^{Reg. Town : -}

SUMMARY

^{Legal Form : Pte Ltd}

^{Date Inc. : 04/10/1994}

^{Previous Legal Form : -}

^{Summary year : 31/12/2004}

^{Sales : 39,628,867}

^{Networth : 3,890,936}

^{Capital : -}

^{Paid-Up Capital : 74,074}

^{Employees : 50}

^{Net result : 1,521,555}

^{Share value : -}

^{Auditor : ERNST & YOUNG}

REFERENCES

^{Litigation : YES}

^{Company status : TRADING}

^{Started : 04/10/1994}

PRINCIPAL(S)

^{YAK SIEW KIM S6837147C Director}

DIRECTOR(S)

^{DANIEL ALVIN GAGNON JF351196 Director}

^{Appointed on : 04/11/2004}

^{Street : 500 QUEEN STREET SOUTH}

^{BOLTON, ONTARAIO}

^{Town : CANADA}

^{Postcode : L7E 5S5}

^{Country : Canada}

^{ISAAC CHENG PC455484 Director}

^{Appointed on : 04/11/2004}

^{Street : 12TH FLOOR FLAT F, BLK 12}

^{SCENEWAY GARDEN, LAM TIN KLN}

^{Town : KOWLOON}

^{Postcode : -}

^{Country : Hong Kong}

^{YAK SIEW KIM S6837147C Director}

^{Appointed on : 21/02/2005}

^{Street : 370 WOODLANDS AVENUE 1}

^#04-833

^{Town : SINGAPORE}

^{Postcode : 730370}

^{Country : Singapore}

^{CHAN SHOK HING S2665939F Company Secretary}

^{Appointed on : 22/09/2006}

^{Street : 18 LORONG 7 TOA PAYOH}

^#04-240

^{Town : SINGAPORE}

^{Postcode : 310018}

^{Country : Singapore}

FORMER DIRECTOR(S)

^{YANG CHING CHAO S0014265D}

^{LINDA LAW S2588463I}

^{JOE MAN YIU CHO BC059954}

^{STEPHEN JOHN WILSON VC359566}

^{GEORGE TRISIC VN496984}

^{TAN LAY HONG S1592913H}

^{ROSS DAVID PERRY 100909350}

ACTIVITY(IES)

^{JIGS And FIXTURES Code: 12390}

^{MOULDS Code: 14677}

^{HOLDING COMPANIES Code: 11320}

^{BASED ON ACRA'S RECORD AS AT 03/10/2007}

1) MANUFACTURE OF DIES, MOULDS, TOOLDS, JIGS AND FIXTURES; MANUFACTURE OF INJECTION MOULDS

2) OTHER SUPPORT ACTIVITIES; SALES, TECHNICAL & MARKETING SUPPORT & ASSISTANCE TO HOLDING COMPANY

CHARGES

No Charges On Premises/Property In Our Database

PREMISES/PROPERTY INFORMATIONS

No Premises/Property Information In Our Databases

BANKERS

^{THE HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED}

SHAREHOLDERS(S)

^{HUSKY INJECTION MOLDING SYSTEMS LTD 100,000 Company}

^{Street : 530 QUEEN STREET S BOLTON}

^{Town : ONTARIO}

^{Postcode : -}

^{Country : Canada}

HOLDING COMPANY

^{HUSKY INJECTION MOLDING SYSTEMS LT UF12968E % : 100}

SUBSIDIARY(IES)

^{HUSKY INJECTION MOLDING SYSTEMS (THAILAND) LTD}

PAYMENT HISTORY AND EXPERIENCES

^{Trade Morality : AVERAGE}

^{Liquidity : UNKNOWN}

^{Payments : UNKNOWN}

^{Trend : UNKNOWN}

^{Financial Situation : UNKNOWN}

LITIGATION(S)

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

^{Case Number : MCS09772/2007}

Defendant HUSKY INJECTION MOLDING SYSTEMS ROC #: 199407150K

FINANCIAL ELEMENTS

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

^{Date Account Lodged : 16/11/2005}

^{Balance Sheet Date : 31/12/2004 31/12/2003}

^{Number of weeks : 52 52}

^{Consolidation Code : COMPANY COMPANY}

^{--- ASSETS}

^{Preliminary Exp 592,066 209,854}

^{Tangible Fixed Assets : 575,643 658,111}

^{Investments 47,619 47,619}

^{Total Fixed Assets : 1,215,328 915,584}

^{Inventories : 3,721,833 2,298,987}

^{Receivables : 11,379,536 8,993,986}

^{Cash,Banks, Securities: 741,796 2,688,696}

^{Other current assets : 404,118 745,704}

^{Total Current Assets : 16,247,283 14,727,373}

^{TOTAL ASSETS : 17,462,611 15,642,957}

^{--- LIABILITIES}

^{Equity capital : 74,074 74,074}

^{Profit & lost Account: 3,816,862 2,295,307}

^{Total Equity : 3,890,936 2,369,381}

^{Trade Creditors : 9,092,953 8,050,266}

^{Provisions : 982,900 1,109,659}

^{Other Short term Liab.: 3,495,822 4,113,651}

^{Total short term Liab.: 13,571,675 13,273,576}

^{TOTAL LIABILITIES : 13,571,675 13,273,576}

^{PROFIT & LOSS ACCOUNT}

^{Net Sales 39,628,867 45,242,729}

^{Result of ordinary operations 1,876,994 2,899,089}

^{NET RESULT BEFORE TAX : 1,876,994 2,899,089}

^{Tax : 355,439 900,625}

^{Net income/loss year : 1,521,555 1,998,464}

^{Depreciation : 191,676 199,204}

^{Directors Emoluments : 202,461}

^{Wages and Salaries : 1,081,892 1,075,984}

RATIOS

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

^{Turnover per employee : 792577.34 904854.58}

^{Net result/Turnover(%): 0.04 0.04}

^{Stock/Turnover(%) : 0.09 0.05}

^{Net Margin(%) : 3.84 4.42}

^{Return on Equity(%) : 39.11 84.35}

^{Return on Assets(%) : 8.71 12.78}

^{Net Working capital : 2675608.00 1453797.00}

^{Cash Ratio : 0.05 0.20}

^{Quick Ratio : 0.89 0.88}

^{Current ratio : 1.20 1.11}

^{Receivables Turnover : 103.37 71.57}

^{Leverage Ratio : 3.49 5.60}

^{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)/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

^{NOTE: THE FINANCIAL STATEMENT IN THIS REPORT IS THOSE OF 2004 AND IS CONSIDERED OUTDATED. HENCE, FINANCIAL ANALYSIS IS NOT CONDUCTED. THE FINANCIAL STATEMENT SERVES AS A REFERENCE ONLY. IN REPLACEMENT, ADVERSE CHECK ON ITS LOCAL DIRECTORS ARE MADE.}

BACKGROUND/OPERATION

^{THE COMPANY WAS INCORPORATED IN THE REPUBLIC OF SINGAPORE ON 04/10/1994 AS A LIMITED PRIVATE COMPANY AND IS TRADING UNDER ITS PRESENT NAMESTYLE AS "HUSKY INJECTION MOLDING SYSTEMS SINGAPORE PTE. LTD."}

^{AS AT 03/10/2007, THE COMPANY HAS AN ISSUED AND PAID-UP CAPITAL OF 100,000 SHARES OF A VALUE OF S$100,000.}

^{PRINCIPAL ACTIVITIES:}

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

1) MANUFACTURE OF DIES, MOULDS, TOOLDS, JIGS AND FIXTURES; MANUFACTURE OF INJECTION MOULDS

2) OTHER SUPPORT ACTIVITIES; SALES, TECHNICAL & MARKETING SUPPORT & ASSISTANCE TO HOLDING COMPANY

^{DURING THE FINANCIAL YEAR UNDER REVIEW, THE PRINCIPAL ACTIVITIES OF THE COMPANY CONSIST OF PROVIDING GENERAL, ADMINISTRATIVE, PROMOTIONAL, LIAISON AND CO-ORDINATION SERVICES, TECHNICAL AND MARKETING SUPPORT AND ASSISTANCE TO ITS HOLDING COMPANY; AND ITS SALES OF SPARE PARTS AND HOT RUNNER PARTS. IN ADDITION, THE COMPANY WAS APPOINTED AS AN AUTHORISED DISTRIBUTOR FOR ITS HOLDING COMPANY TO SELL HUSKY MACHINES IN THE REGION.}

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

^{BACKGROUND OF HUSKY GROUP:}

^{FOUNDED IN 1953 BY ROBERT SCHAD, HUSKY STARTED AS A SMALL MACHINE SHOP IN A TORONTO GARAGE. THE COMPANY FOUND ITS NICHE IN SPECIALIZED MOLDMAKING AND QUICKLY DEVELOPED INTO A LEADER IN PRODUCING INNOVATIVE, HIGH SPEED INJECTION MOLDING SYSTEMS FOR THINWALL CONTAINERS.}

^{TODAY HUSKY INJECTION MOLDING SYSTEMS IS ONE OF THE WORLD'S LEADING SUPPLIERS OF INJECTION MOLDING EQUIPMENT AND SERVICES TO THE GLOBAL PLASTICS INDUSTRY. WE DESIGN AND MANUFACTURE A BROAD RANGE OF INJECTION MOLDING MACHINES, HOT RUNNERS, ROBOTS, MOLDS AND INTEGRATED SYSTEMS.}

^{HUSKY'S SERVICE AND SALES NETWORK CONSISTS OF MORE THAN 40 OFFICES- INCLUDING TECHNICAL CENTERS-SUPPORTING CUSTOMERS IN OVER 100 COUNTRIES. MANUFACTURING FACILITIES ARE LOCATED IN CANADA, THE UNITED STATES, LUXEMBOURG, AND CHINA.}

^{SUBJECT ENGAGES IN THE FOLLOWING ACTIVITIES:}

^{* SALES, INSTALL, DESIGN, SERVICE OF MOLD MACHINES AND ROBOTICS FOR PLASTICS INDUSTRY}

^{PRODUCTS DEALINGS:}

^{* HYLECTRIC MACHINES}

^{* QUADLOC MACHINES}

^{* PREFORM AND BOTTLE SYSTEMS}

^{* HOT RUNNERS}

^{* MAGNESIUM MOLDING}

^{* TRACER ROBOTS}

^SERVICES:

^{* AUTOMATED SYSTEMS}

^{* PET SERVICES}

^{* PARTS AND SERVICE}

^{* FACTORY PLANNING}

^{* TECHNICAL TRAINING}

^{* PRODUCT UPGRADES}

^{OVERSEAS OFFICES:}

^AUSTRALIA

^{* SYDNEY}

^ASIA

^{- CHINA}

^{* SHANGHAI}

^{- JAPAN}

^{* YOKOHAMA}

^{- SINGAPORE}

^EUROPE

^{- DENMARK}

^{* COPENHAGEN}

^{- LUXEMBOURG}

^{* DUDELANGE}

^{- UNITED KINGDOM}

^{* COVENTRY}

^{NORTH AMERICA}

^{- CANADA}

^{* BOLTON}

^{- UNITED STATES}

^{* ATLANTA}

^{* BOSTON}

^{* CHICAGO}

^{* DETROIT}

^{* LOS ANGELES}

^{* PHILADELPHIA}

^{LATIN AMERICA}

^{- BRAZIL}

^{* SÃO PAOLO}

^{- MEXICO}

^{* MEXICO CITY}

^{TERMS OF PAYMENT:}

^{* TRADE AND OTHER RECEIVABLES: 30-120 DAYS TERM}

^{* TRADE AND OTHER PAYABLES : 30-90 DAYS TERM}

^{SUBJECT IS A MEMBER OF THE FOLLOWING ENTITIES:}

^{* SINGAPORE PLASTIC INDUSTRY ASSOCIATION}

^{NEWS: HUSKY TO ACQUIRE MOLDFLOW'S MANUFACTURING SOLUTIONS DIVISION}

^{-SOURCE: HUSKY WEBSITE}

^{DATE: 25/06/2007}

^{BOLTON, ONTARIO - HUSKY INJECTION MOLDING SYSTEMS LTD. (TSX: HKY) TODAY ANNOUNCED THAT IT HAS SIGNED AN AGREEMENT TO ACQUIRE SUBSTANTIALLY ALL OF THE ASSETS OF MOLDFLOW CORPORATION'S (NASDAQ: MFLO) MANUFACTURING SOLUTIONS DIVISION FOR $7 MILLION. THE SALE IS EXPECTED TO CLOSE ON JUNE 30, 2007.}

^{HUSKY IS ONE OF THE LARGEST SUPPLIERS OF HOT RUNNERS AND TOOLING FOR THE INJECTION MOLDING INDUSTRY. THROUGH THIS ACQUISITION, THE COMPANY WILL EXPAND ITS PRODUCT OFFERING BY ADDING TEMPERATURE CONTROLLERS, PROCESS MANAGEMENT AND DATA COMMUNICATION SOFTWARE TO ITS LEADING HOT RUNNER AND MACHINE PORTFOLIO.}

^{EFFECTIVE UPON CLOSING, THE COMPANY WILL OFFER CUSTOMERS ALTANIUM TEMPERATURE CONTROLLERS, CELLTRACK AND SHOTSCOPE SOFTWARE PRODUCTS, AS WELL AS MPX UNDER LICENSE, MOLDFLOW CORPORATION'S AUTOMATED PROCESS SET-UP AND OPTIMIZATION TOOL. IN ADDITION, THE COMPANY WILL CONTINUE TO OFFER THE CURRENT LINE OF LEC AND TTC HOT RUNNER CONTROLLERS DURING A TRANSITION PERIOD.}

^{ON MAY 10, 2007, MOLDFLOW CORPORATION ANNOUNCED ITS INTENTION TO SELL THE MANUFACTURING SOLUTIONS DIVISION. COMMENTING ON TODAY'S ANNOUNCEMENT, ROLAND THOMAS, MOLDFLOW CORPORATION'S PRESIDENT AND CEO, SAID, "I BELIEVE THAT HUSKY IS A STRATEGIC OWNER WITH THE GLOBAL INFRASTRUCTURE, EXPERTISE AND FOCUS NEEDED TO TAKE OUR ALTANIUM AND SHOP FLOOR PRODUCTS TO THE NEXT LEVEL."}

^{"THIS TRANSACTION BRINGS TO HUSKY AN EXPERIENCED TEAM, A WEALTH OF TECHNOLOGY EXPERTISE AND A HIGHLY COMPLEMENTARY SET OF INNOVATIVE PRODUCTS," SAID KEITH CARLTON, HUSKY'S VICE PRESIDENT OF HOT RUNNERS AND PET MOLDS. "AS A RESULT, WE WILL OFFER OUR CUSTOMERS GREATER VALUE WHILE CONTINUING TO GROW THIS STRATEGIC AREA OF OUR BUSINESS."}

^{"THE ACQUISITION OF MOLDFLOW'S MANUFACTURING SOLUTIONS DIVISION IS CONSISTENT WITH OUR STRATEGY OF BUILDING A PORTFOLIO OF LEADING PRODUCTS AND SERVICES TO BETTER SERVE OUR CUSTOMERS," SAID JOHN GALT, HUSKY'S PRESIDENT AND CEO. "BY LEVERAGING OUR INDUSTRY LEADING SERVICE AND SALES NETWORK AND OUR STRONG POSITION IN TOOLING, WE WILL BE ABLE TO DELIVER THESE INNOVATIVE PRODUCTS TO AN EXPANDED RANGE OF CUSTOMERS."}

^{NO OTHER TRADE INFORMATION WAS AVAILABLE ON 08/10/2007 AS TELE-INTERVIEW WAS NOT GRANTED BY SUBJECT PERSONNEL.}

^{FROM THE PRIOR TELE-INTERVIEW CONDUCTED ON 31/08/2007, THE FOLLOWING WAS GATHERED:}

^{THE SUBJECT IS INVOLVED IN THE MANUFACTURING OF THE MACHINES.}

^{IMPORT COUNTRIES:}

^{* WORLDWIDE}

^{EXPORT COUNTRIES:}

^{* THAILAND}

^{* VIETNAM}

^{* PHILIPPINES}

^{THE SUBJECT DOES EXPORTS AND SELLS LOCALLY.}

^{NUMBER OF EMPLOYEES:}

^{* COMPANY - 2007: 50+}

^{NO OTHER TRADE INFORMATION IS AVAILABLE ON 31/08/2007.}

^{THE COMPANY IS A WHOLLY-OWNED SUSBIDIARY OF HUSKY INJECTION MOLDING SYSTEMS LTD., INCORPORATED IN THE PROVINCE OF ONTARIO, CANADA, WHICH IS ALSO THE COMPANY'S ULTIMATE HOLDING COMPANY.}

^{NUMBER OF EMPLOYEES (31 JULY):}

^{* COMPANY - 2004: 25 (2003: 20)}

^{* GROUP - 2004: 30 (2003: 25)}

^{REGISTERED AND BUSINESS ADDRESS:}

^{19 CHANGI SOUTH STREET 1}

^{SINGAPORE 486779}

^{DATE OF CHANGE OF ADDRESS: 08/12/2006}

^{- RENTED PREMISE}

^{- PREMISE OWNED BY: MAPLETREE TRUSTEE PTE. LTD.}

^{WEBSITE: http://www.husky.ca}

^{EMAIL: -}

MANAGEMENT

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

^{1) DANIEL ALVIN GAGNON, A CANADIAN}

^{- BASED IN CANADA.}

^{2) ISAAC CHENG, A CANADIAN}

^{- BASED IN HONG KONG.}

^{3) YAK SIEW KIM, A SINGAPOREAN}

^{- HOLDS OTHER DIRECTORSHIP(S) AS RECORDED IN OUR DATABASE:}

^{STATOIL ASIA PACIFIC PTE LTD}

^{HOWCO METALS MANAGEMENT PTE. LTD.}

ADVERSE ON DIRECTORS

^{DIRECTOR'S NAME: YAK SIEW KIM}

^{ADVERSE REPORT AGAINST DIRECTOR: NOT AVAILABLE FROM OUR DATABASE}

^{PROPERTY OWNERSHIP: 1}

^{ANNUAL VALUE: S$6,180}

^{CO-OWNER (S): LEE HOCK SEONG}

^{* 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.}

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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