MIRA INFORM REPORT

Report Date :

12.09.2007

IDENTIFICATION DETAILS

Name :	YAMARI SINGAPORE PTE. LTD.
Registered Office :	^61 Tuas View Walk 2, Westlink Technopark, Singapore – 637630
Country :	Singapore
Financials (as on) :	31.07.2006
Date of Incorporation :	^01/11/1997
Com. Reg. No.:	^199707501G
Legal Form :	^Pte Ltd
Line of Business :	Customized Fabrication of Temperature Sensor for various Industries.

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

YAMARI SINGAPORE PTE. LTD.

Line Of Business 

CUSTOMISED FABRICATION OF TEMPERATURE SENSOR FOR VARIOUS INDUSTRIES.

Parent Company

YAMARI INDUSTRIES LIMITED

(PERCENTAGE OF SHAREHOLDING: 100%)

Financial Elements

FY 2006

COMPANY

Sales : S$5,499,836

Networth : S$1,736,968

Paid-Up Capital : S$1,511,400

Net result : S$427,564

Net Margin(%) : 7.77

Return on Equity(%) : 24.62

Leverage Ratio : 1.49

COMPANY IDENTIFICATION

^{Subject Company : YAMARI SINGAPORE PTE. LTD.}

^{Former Name : THERMOSENSOR TECHNOLOGIES PTE LTD}

^{Business Address : 61 TUAS VIEW WALK 2}

^{WESTLINK TECHNOPARK}

^{Town : SINGAPORE}

^{Postcode : 637630}

^{County : -}

^{Country : Singapore}

^{Telephone : 6268 0090}

^{Fax : 6262 0013}

^{ROC Number : 199707501G}

^{Reg. Town : -}

PREVIOUS IDENTIFICATION

^{THERMOSENSOR TECHNOLOGIES PTE LTD DATE OF CHANGE OF NAME: 01/08/2005}

SUMMARY

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

^{Legal Form : Pte Ltd}

^{Date Inc. : 01/11/1997}

^{Previous Legal Form : -}

^{Summary year : 31/07/2006}

^{Sales : 5,499,836}

^{Networth : 1,736,968}

^{Capital : -}

^{Paid-Up Capital : 1,511,400}

^{Employees : 39}

^{Net result : 427,564}

^{Share value : 1}

^{Auditor : TEO ENG TIAN & CO}

REFERENCES

^{Litigation : No}

^{Company status : TRADING}

^{Started : 01/11/1997}

PRINCIPAL(S)

^{KAZUYUKI NAKATANI S2717843Z Managing Director}

DIRECTOR(S)

^{KAZUYUKI NAKATANI S2717843Z Director}

^{Appointed on : 11/11/2002}

^{Street : 51 JURONG EAST AVENUE 1}

^#16-03

^{PARC OASIS}

^{Town : SINGAPORE}

^{Postcode : 609782}

^{Country : Singapore}

^{TAN CHENG KIM S0084726G Company Secretary}

^{Appointed on : 01/01/2004}

^{Street : 47C HONGKONG STREET}

^{TET BUILDING}

^{Town : SINGAPORE}

^{Postcode : 059685}

^{Country : Singapore}

^{KAZUYUKI NAKATANI S2717843Z Managing Director}

^{Appointed on : 10/10/2006}

^{Street : 51 JURONG EAST AVENUE 1}

^#16-03

^{PARC OASIS}

^{Town : SINGAPORE}

^{Postcode : 609782}

^{Country : Singapore}

^{MAKOTO KURAWAKI TZ0065361 Director}

^{Appointed on : 29/10/2005}

^{Street : 1-4-19-201, TENMA KITA-KU}

^{Town : OSAKA}

^{Postcode : 530-0043}

^{Country : Japan}

FORMER DIRECTOR(S)

^{YEO SECK KAN S1561645H}

^{SHOHEI NORITAKE MN7130632}

^{LOW GEOK ENG SUSIE S0167313J}

^{TAKESHI SATO TF45421471}

^{HIROSHI TSUKOSHI TF7543802}

^{HAJIME UEDA TZ0126853}

ACTIVITY(IES)

^{THERMOCOUPLES Code: 21540}

^{SENSORS And SENSING EQUIPMENT Code: 19132}

^{INDUSTRIAL EQUIPMENT And SUPPLIES Code: 11830}

^{BASED ON ACRA'S RECORD AS AT 04/01/2007}

^{1) WHOLESALE OF INDUSTRIAL MACHINERY AND EQUIPMENT; MANUFACTURE OF INSTRUMENTS & APPLIANCES FOR MEASURING, CHECKING, ACTIVITIES STATED IN THE FINANCIAL STATEMENTS:}

^{CUSTOMISED FABRICATION OF TEMPERATURE SENSOR FOR VARIOUS INDUSTRIES.}

CHARGES

^{Date : 28/07/2003}

^{Comments : CHARGE NO: 200100819 (DISCHARGED - 27/09/2001)}

^{SECURED: 0.00 AND ALL MONIES OWING}

^{CHARGEE(S): THE DEVELOPMENT BANK OF SINGAPORE LTD}

^{Date : 28/07/2003}

^{Comments : CHARGE NO: C200303563 (DISCHARGED - 15/06/2004)}

^{SECURED: 0.00 AND ALL MONIES OWING}

^{CHARGEE(S): DBS BANK LTD}

^{Date : 28/04/2003}

^{Comments : CHARGE NO: C200301887}

^{SECURED: YEN 90,000,000.00}

^{CHARGEE(S): YAMARI INDUSTRIES LTD}

PREMISES/PROPERTY INFORMATIONS

^{Date : 17/01/2007}

^{Tax rate : 10}

^{Site Address : 61 TUAS VIEW WALK 2}

^{WESTLINK TECHPARK}

^{Town : SINGAPORE}

^{County : -}

^{Postcode : 637630}

^{Country : Singapore}

^{Annual Value : 65,100}

BANKERS

^{DBS BANK LTD.}

^{UFJ BANK LIMITED (F.K.A. THE SANWA BANK LIMITED)}

SHAREHOLDERS(S)

^{YAMARI INDUSTRIES LIMITED 800,000 Company}

^{Street : NO 5-4, 1-CHOME, MISHIMAE}

^{TAKATSUKI-SHI}

^{Town : OSAKA}

^{Postcode : 569-0835}

^{Country : Japan}

FORMER SHAREHOLDER(S)

^{RODIUM-WEL PL 40,000}

^{ACEZ INSTRUMENTS (S) PTE LTD 352,000}

^{YEO SECK KAN 1}

^{SHOHEI NORITAKE 1}

HOLDING COMPANY

^{YAMARI INDUSTRIES LIMITED UF21603M % : 100}

SUBSIDIARY(IES)

No Participation In Our Database

PAYMENT HISTORY AND EXPERIENCES

^{Trade Morality : AVERAGE}

^{Liquidity : SUFFICIENT}

^{Payments : REGULAR}

^{Trend : UPWARD}

^{Financial Situation : AVERAGE}

FINANCIAL ELEMENTS

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

^{Date Account Lodged: 03/11/2006}

^{Balance Sheet Date: 31/07/2006 31/07/2005}

^{Number of weeks: 52 52}

^{Consolidation Code: COMPANY COMPANY}

^{--- ASSETS ---}

^{Tangible Fixed Assets: 1,798,899 1,958,904}

^{Investments 2,800 8,000}

^{Total Fixed Assets: 1,801,699 1,966,904}

^{Raw material & supplies:}

^{Work in progress:}

^{Inventories: 1,004,398 647,357}

^{Receivables: 1,343,703 1,078,467}

^{Cash,Banks, Securities: 142,329 106,605}

^{Other current assets: 27,257 26,693}

^{Total Current Assets: 2,517,687 1,859,122}

^{TOTAL ASSETS: 4,319,386 3,826,026}

^{--- LIABILITIES ---}

^{Equity capital: 1,511,400 800,000}

^{Profit & lost Account: 225,568 -201,996}

^{Surplus equity: 711,400}

^{Total Equity: 1,736,968 1,309,404}

^{L/T deffered taxes: 112,274 132,584}

^{Other long term Liab.: 914,424 1,105,005}

^{Total L/T Liabilities: 1,026,698 1,237,589}

^{Trade Creditors: 651,643 392,452}

^{Short term liabilities: 79,626 73,790}

^{Advanced payments: 212}

^{Due to Bank: 236,300 265,704}

^{Prepay. & Def. charges: 200,382 187,097}

^{Provisions: 112,224 72,303}

^{Other Short term Liab.: 275,545 287,475}

^{Total short term Liab.: 1,555,720 1,279,033}

^{TOTAL LIABILITIES: 2,582,418 2,516,622}

^{PROFIT & LOSS ACCOUNT}

^{Net Sales 5,499,836 4,986,952}

^{Purchases,Sces & Other Goods: 3,186,738 3,026,758}

^{Gross Profit: 2,313,098 1,960,194}

^{Result of ordinary operations 547,941 363,723}

^{NET RESULT BEFORE TAX: 507,254 316,037}

^{Tax : 79,690 62,608}

^{Net income/loss year: 427,564 253,429}

^{Interest Paid: 40,687 47,686}

^{Depreciation: 253,924 206,058}

^{Wages and Salaries: 1,001,099 1,005,314}

^{Financial Income: 583 381}

RATIOS

^{31/07/2006 31/07/2005}

^{Turnover per employee: 141021.44 127870.56}

^{Net result / Turnover(%): 0.08 0.05}

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

^{Stock / Turnover(%): 0.18 0.13}

^{Net Margin(%): 7.77 5.08}

^{Return on Equity(%): 24.62 19.35}

^{Return on Assets(%): 9.90 6.62}

^{Net Working capital: 961967.00 580089.00}

^{Cash Ratio: 0.09 0.08}

^{Quick Ratio: 0.96 0.93}

^{Current ratio: 1.62 1.45}

^{Receivables Turnover: 87.95 77.85}

^{Leverage Ratio: 1.49 1.92}

^{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 32.65% FROM S$1,309,404 IN FY 2005 TO S$1,736,968. THIS WAS DUE TO RETAINED EARNINGS OF S$225,568 IN FY 2006 (2005: S$-201,996) AND INCREASED IN SHARE CAPITAL FROM S$800,000 IN FY 2006 TO S$1,511,400 WHICH WAS DUE TO THE TRANSFER OF SHARE PREMIUM OF S$711,400.}

^LEVERAGE:

^{IN THE SHORT-TERM, SUBJECT WAS MAINLY FINANCED BY TRADE CREDITORS WHICH MADE UP 41.89% (2005: 30.68%) OF THE TOTAL CURRENT LIABILITIES AND AMOUNTED TO S$651,643 (2005: S$392,452). THE BREAKDOWN CONSISTED OF THE FOLLOWING:}

^{* TRADE CREDITORS - 2006: S$484,554 (2005: S$232,562)}

^{* AMOUNT DUE TO RELATED COMPANY (TRADE) - 2006: S$28,757 (2005: S$20,481)}

^{* AMOUNT DUE TO HOLDING COMPANY (TRADE) - 2006: S$138,332 (2005: S$139,409)}

^{IN ADDITION TO OTHER SHORT-TERM LIABILITIES, SUBJECT WAS FINANCED BY AMOUNT DUE TO BANKS WHICH AMOUNTED TO S$236,300 IN FY 2006 (2005: S$265,704).}

^{IN THE LONG-TERM, SUBJECT WAS LARGELY FINANCED BY LOAN FROM HOLDING COMPANY WHICH AMOUNTED TO S$785,625 (2005: S$906,525).}

^{IN ALL, LEVERAGE RATIO HAD GONE DOWN AT 1.49 TIMES (2005: 1.92 TIMES). THIS IS DUE TO A GREATER INCREASE IN THE NET WORTH THAN TOTAL LIABILITIES.}

^LIQUIDITY:

^{IN GENERAL, SUBJECT'S LIQUIDITY SITUATION HAD IMPROVED AS SEEN FROM THE RISE IN NET WORKING CAPITAL OF S$961,967 IN FY 2006 (2005: S$580,089). BOTH QUICK AND CURRENT RATIOS INCREASED MARGINALLY FROM 0.93 TIMES IN FY 2005 TO 0.96 TIMES AND FROM 1.45 TIMES IN FY 2005 TO 1.62 TIMES, RESPECTIVELY.}

^{IN ADDITION, CASH AND CASH EQUIVALENTS ROSE BY 33.51% TO S$142,329 (2005: S$106,605).}

^{PROFITABILITY:}

^{REVENUE ROSE BY 10.28% FROM S$4,986,952 IN FY 2005 TO S$5,499,836 AND NET PROFIT BY 68.71% TO S$427,564 (2005: S$253,429). AS A RESULT, NET MARGIN FOR FY 2006 STOOD AT 7.77% (2005: 5.08%).}

^{DEBT SERVICING:}

^{DEBT SERVICING PROBLEMS MIGHT NOT BE EXPECTED IF REVENUE AND EARNINGS CAN BE MAINTAINED AND PAYMENT BY TRADE DEBTORS ARE FORTHCOMING. IT WAS NOTED THAT AVERAGE COLLECTION PERIOD HAS LENGTHENED TO 88 DAY (2005: 78 DAYS).}

^{NOTES TO THE FINANCIAL STATEMENTS:}

^{BANK LOANS:}

^{THE SHORT LOAN IS SECURED BY A GUARANTEE FROM THE HOLDING COMPANY, YAMARI INDUSTRIES LTD, REPAYABLE WITHIN 1 YEAR AND BEARS INTEREST OF 1.44% P.A. (2005: 1.44%).}

^{SHARE CAPITAL:}

^{ON 30 JANUARY 2006, IN LINE WITH AMENDMENTS TO THE COMPANIES ACT, CAP. 50, THE COMPANY ABOLISHED THE CONCEPTS OF PAR VALUE OF SHARES AND AUTHORISED SHARE CAPITAL AND ON THAT DATE, THE SHARES OF THE COMPANY CEASED TO HAVE A PAR VALUE.}

BACKGROUND/OPERATION

^{THE COMPANY WAS INCORPORATED IN THE REPUBLIC OF SINGAPORE ON 01/11/1997 AS A LIMITED PRIVATE COMPANY UNDER THE NAMESTYLE OF "THERMOSENSOR TECHNOLOGIES PTE LTD".}

^{SUBSEQUENTLY ON 01/08/2005, SUBJECT CHANGED TO ITS PRESENT NAMESTYLE OF "YAMARI SINGAPORE PTE. LTD.".}

^{AS AT 06/091/2007, THE COMPANY HAS AN ISSUED AND PAID-UP CAPITAL OF 800,000 SHARES, OF A VALUE OF S$1,511,400.}

^{PRINCIPAL ACTIVITIES:}

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

^{1) WHOLESALE OF INDUSTRIAL MACHINERY AND EQUIPMENT; MANUFACTURE OF INSTRUMENTS & APPLIANCES FOR MEASURING, CHECKING,TESTING & NAVIGATING}

^{THE COMPANY IS LISTED IN THE SINGAPORE LOCAL DIRECTORIES UNDER THE CLASSIFICATION OF: THERMOCOUPLES}

^{DURING THE FINANCIAL YEAR(S), UNDER REVIEW, SUBJECT'S PRINCIPAL ACTIVITY IS THE CUSTOMISED FABRICATION OF TEMPERATURE SENSOR FOR VARIOUS INDUSTRIES.}

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

^ACTIVITIES:

^{* SUBJECT IS A MANUFACTURER OF TEMPERATURE SENSOR & THERMOWELLS, OEM WELCOME. SUBJECT IS ALSO A SUPPLIER & STOCKIST OF THERMOCOUPLE ACCESSORIES, WIRES AND CABLES. SUBJECT SPECIALISES IN THE DESIGN, MANUFACTURE AND CALIBRATION OF TEMPERATURE SENSORS AND THERMOWELLS FOR THE MOST DEMANDING INDUSTRIAL APPLICATIONS.}

^PRODUCTS:

^*THERMOWELLS

^{*TEMPERATURE SENSORS}

^-RDTS

^{-THERMOCOUPLES}

^*ACCESSORIES

^{-WIRES (JIS, IEC, BS, ANSI): EXTENSION & COMPENSATING CABLES, JIS CODE, PVC, GLASS FIBER, SILICON RUBBER, TEFLON}

^{-PROTECTION TUBES: PTO (ALSINT), PTI (PYTHAGORAS), METAL CERAMIC (CERMET), Y2 (SELF BANDED SILICON CARBIDE)}

^{-OTHERS: TERMINAL HEADS, CONNECTORS, INSULATORS, BARE ELEMENTS: K, J, R, S, B, MINERALS INSULATED CABLES, RTD SENSOR BULBS}

^SERVICES:

^{* INFORMATION}

^{* QUALITY CONTROL: VARIOUS TESTS, CHECKS AND REPORTS ARE AVAILABLE UPON REQUEST.}

^{* PRICING}

^{* SERVICE SUPPORT}

^{* DELIVERY}

^{* WPQ/PQR}

^BRANDS:

^{* ETK--CERAMIC TUBES & INSULATORS}

^{* LABFACILITY--BS THERMOCOUPLE EXTENSION WIRES & CABLES}

^{* MICT--MINERAL INSULATED CABLES FOR THERMOCOUPLES, RTDS & HEATERS}

^{* PMC--ANSI THERMOCOUPLE EXTENSION WIRES & CABLES}

^{* SAB--DIN THERMOCOUPLE EXTENSION WIRES & CABLES}

^{* TDI--RESISTANCE TEMPERATURE DETECTORS}

^{* THERMOSENSOR--THERMOCOUPLES & RTDS}

^{* YAMARI--JIS THERMOCOUPLE EXTENSION WIRES & CABLES, SPECIAL THERMOCOUPLES & RTDS}

^{* YAMARI--RTDS, T/CS, TEMPERATURE SENSORS & HEATERS, THERMOWELLS}

^{SUBJECT SERVED CUSTOMERS IN THE FOLLOWING INDUSTRIES:}

^{* IRON & STEEL AND NONFERROUS METALS}

^{* ELECTRIC POWER AND GAS}

^{* NUCLEAR POWER GENERATION}

^{* COMPREHENSIVE INDUSTRIAL PLANTS}

^{* OIL REFINING, CHEMICAL AND PETROCHEMICAL INDUSTRIES}

^{* MARINE AND OFFSHORE}

^{* ELECTRIC MACHINES AND APPLIANCES}

^{* INDUSTRIAL MACHINERY}

^{* AEROSPACE}

^{* AUTOMOBILE}

^{* TEXTILE}

^{* GLASS, CEMENT AND CERAMICS}

^{* PAPER AND PULP}

^{* FOOD PROCESSING}

^{* UNIVERSITIES AND RESEARCH INSTITUTES}

^{* OVERSEAS INSTALLATIONS}

^{* BUILDING AUTOMATION}

^{* SEMI-CONDUCTOR}

^{* PHARMACEUTICAL PLANTS}

^{* FERTILIZER PLANTS}

^{* PALM OIL PROCESSING}

^{EXPORT MARKETS:}

^{* MALAYSIA, INDONESIA, THAILAND, PHILIPPINES, PAKISTAN/MIDDLE EAST.}

^{NO OTHER TRADE INFORMATION WAS AVAILABLE ON 12/09/2007.}

^{THE IMMEDIATE AND ULTIMATE HOLDING COMPANY IS YAMARI INDUSTRIES LIMITED, A COMPANY INCORPORATED IN JAPAN.}

^{NUMBER OF EMPLOYEES (AS OF 31 JULY 2006):}

^{* 2006: 39 (2005: 40; 2004: 34)}

^{QUALITY ASSESSMENT:}

^{* ISO 9001}

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

^{* SINGAPORE MANUFACTURERS' FEDERATION}

^{REGISTERED AND BUSINESS ADDRESS:}

^{61 TUAS VIEW WALK 2}

^{WESTLINK TECHNOPARK}

^{SINGAPORE 637630}

^{DATE OF CHANGE OF ADDRESS: 16/12/2003}

^{- OWNED PREMISE}

^{WEBSITE: www.yamari.com.sg}

^{EMAIL: sales@yamari.com.sg}

MANAGEMENT

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

^{1) KAZUYUKI NAKATANI, A SINGAPORE PERMANENT RESIDENT}

^{- HOLDS NO OTHER DIRECTORSHIPS AS RECORDED IN OUR DATABASE.}

^{2) MAKOTO KURAWAKI, 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.

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.

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.

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.

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