MIRA INFORM REPORT

Report Date :

21.09.2007

IDENTIFICATION DETAILS

Name :	AERO SUPPLIES SYSTEMS ENGINEERING PTE LTD
Registered Office :	^1 Kian Teck Way^, Jurong, Singapore^– 628731
Country :	Singapore
Financials (as on) :	31.03.2004
Date of Incorporation :	^23/09/1983
Com. Reg. No.:	^198304586N
Legal Form :	^Exempt Pte Ltd
Line of Business :	Repairs of Ships, Tankers and Other Ocean going Vessels

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

AERO SUPPLIES SYSTEMS ENGINEERING PTE LTD

Line Of Business

REPAIRS OF SHIPS, TANKERS AND OTHER OCEAN GOING VESSELS

Parent Company

--

Financial Elements

FY 2004

COMPANY

Sales : S$2,585,237

Networth : S$2,943,948

Paid-Up Capital : S$3,500,000

Net result : S$26,080

Net Margin(%) : 1.01

Return on Equity(%) : 0.89

Leverage Ratio : 1.05

COMPANY IDENTIFICATION

^{Subject Company: AERO SUPPLIES SYSTEMS ENGINEERING PTE LTD}

^{Former Name: AEROBOTICS PTE LTD}

^{Business Address: 1 KIAN TECK WAY}

^JURONG

^{Town: SINGAPORE}

^{Postcode: 628731}

^{County: -}

^{Country: Singapore}

^{Telephone: 6264 1722}

^{Fax: 6268 4080}

^{ROC Number: 198304586N}

^{Reg. Town: -}

PREVIOUS IDENTIFICATION

^{AEROBOTICS PTE LTD DATE OF CHANGE: 26/02/1988}

SUMMARY

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

^{Legal Form: Exempt Pte Ltd}

^{Date Inc.: 23/09/1983}

^{Previous Legal Form: -}

^{Summary year: 31/03/2004}

^{Sales: 2,585,237}

^{Net worth: 2,943,948}

^{Capital: -}

^{Paid-Up Capital: 3,500,000}

^{Employees: 15}

^{Net result: 26,080}

^{Share value: -}

^{Auditor: TAN, CHAN & PARTNERS}

REFERENCES

^{Litigation: No}

^{Company status: TRADING}

^{Started: 23/09/1983}

PRINCIPAL(S)

^{SUHAS VISHNUPANT GHORPADE S2590292J Managing Director}

DIRECTOR(S)

^{HARIKRISHNAN S/O MUTHUSAMY S2135685I Company Secretary}

^{Appointed on: 03/05/1994}

^{Street: 101 AH HOOD ROAD}

^#11-02

^{Town: SINGAPORE}

^{Postcode: 320101}

^{Country: Singapore}

^{SUHAS VISHNUPANT GHORPADE S2590292J Managing Director}

^{Appointed on: 08/03/1988}

^{Street: 54 WEST COAST CRESENT}

^#01-02

^{Town: SINGAPORE}

^{Postcode: 128037}

^{Country: Singapore}

^{ARUNA SUHAS GHORPADE S2591829J Director}

^{Appointed on: 01/08/1991}

^{Street: 85 WEST COAST DRIVE}

^#06-01

^{HONG LEONG GARDEN}

^{Town: SINGAPORE}

^{Postcode: 128001}

^{Country: Singapore}

^{SUHAS VISHNUPANT GHORPADE S2590292J Director}

^{Appointed on: 08/03/1988}

^{Street: 54 WEST COAST CRESENT}

^#01-02

^{Town: SINGAPORE}

^{Postcode: 128037}

^{Country: Singapore}

FORMER DIRECTOR(S)

^{TAN BOON HOCK S1092531B}

^{BEK KHENG LEE S1183715H}

^{YEO NAI KWANG S1319343F}

^{MIRCHANDANI POONAM L S1325479F}

^{LAI WENG KONG 1735943}

^{FAUZIAH BEGAM GILBERT S1766378Z}

ACTIVITY(IES)

^{SHIP BUILDERS And REPAIRERS Code:19285}

^{ENGINEERING WORKS Code:7880}

^{BASED ON ACRA'S RECORD AS AT 17/09/2007}

^{1) REPAIR OF SHIPS, TANKERS AND OTHER OCEAN-GOING VESSELS}

^{2) MECHANICAL ENGINEERING WORKS}

CHARGES

^{Date: 14/06/2000 Amount: 2,994,000}

^{Comments: CHARGE NO: 200002638}

^{SECURED: S$2,994,000.00}

^{CHARGEE (S): OVERSEAS UNION BANK LIMITED}

^{Date: 18/07/1997}

^{Comments: CHARGE NO: 199704354}

^{SECURED: 0.00 ALL MONIES OWING}

^{CHARGEE (S): OVERSEAS UNION BANK LIMITED}

^{Date: 28/02/1991}

^{Comments: CHARGE NO: 9100856}

^{SECURED: 0.00 ALL MONIES OWING}

^{CHARGEE (S): OVERSEAS UNION BANK LIMITED}

^{Date: 17/04/1990 Amount: 1,000,000}

^{Comments: CHARGE NO: 9001720}

^{SECURED: S$1,000,000.00}

^{CHARGEE(S): OVERSEAS UNION BANK LIMITED}

^{Date: 11/02/1993 Amount: 550,000}

^{Comments: CHARGE NO: 9300615}

^{SECURED: S$550,000.00}

^{CHARGEE (S): OVERSEAS UNION BANK LIMITED}

PREMISES/PROPERTY INFORMATIONS

^{Date: 20/09/2007 Tax rate: 10}

^{Site Address: 1 KIAN TECK WAY}

^JURONG

^{Town: SINGAPORE}

^{County: - Postcode: 628731}

^{Country: Singapore}

^{Annual Value: 102,000}

*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% (IE 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

^{OVERSEAS UNION BANK LIMITED}

^{STANDARD CHARTERED BANK}

SHAREHOLDERS(S)

^{SUHAS VISHNUPANT GHORPADE 3,192,500 Private Person}

^{Street: 54 WEST COAST CRESENT}

^#01-02

^{Town: SINGAPORE}

^{Postcode: 128037}

^{Country: Singapore}

^{ARUNA SUHAS GHORPADE 307,500 Private Person}

^{Street: 85 WEST COAST DRIVE}

^#06-01

^{HONG LEONG GARDEN}

^{Town: SINGAPORE}

^{Postcode: 128001}

^{Country: Singapore}

FORMER SHAREHOLDER(S)

^{TAN BOON HOCK 28,334}

^{BEK KHENG LEE 58,333}

^{LAI WENG KONG 250,000}

SUBSIDIARY(IES)

^{SHAN DONG FUTAI ALUMINIUM COMPANY LIMITED}

PAYMENT HISTORY AND EXPERIENCES

^{Trade Morality: AVERAGE}

^{Liquidity: UNKNOWN}

^{Payments: REGULAR}

^{Trend: LEVEL}

^{Financial Situation: UNKNOWN}

LITIGATION(S)

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

^{Case Number: HWS02151/90}

Defendant AERO SUPPLIES SYSTEMS ENGINEERING ROC #: 198304586N

Plaintiff TAN BOON HOCK ROC #: S1092531B

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

^{Case Number: HWS02191/90}

Defendant AERO SUPPLIES SYSTEMS ENGINEERING ROC #: 198304586N

Defendant TWO OTHER DEFENDANTS ROC #: Unknown

Plaintiff TAN BOON HOCK ROC #: Unknown

FINANCIAL ELEMENTS

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

^{Audit Qualification: "MILD" UNCERTAINTIES "MILD" UNCERTAINTIES}

^{Date Account Lodged: 24/12/2006}

^{Balance Sheet Date: 31/03/2004 31/03/2003}

^{Number of weeks: 52 52}

^{Consolidation Code: COMPANY COMPANY}

^{--- ASSETS}

^{Tangible Fixed Assets: 949,889 1,008,149}

^{Investments 1,177,951 1,177,951}

^{Total Fixed Assets: 2,127,840 2,186,100}

^{Receivables: 1,813,743 943,387}

^{Cash,Banks,Securities: 496,137 494,037}

^{Other current assets: 1,607,785 1,757,304}

^{Total Current Assets: 3,917,665 3,194,728}

^{TOTAL ASSETS: 6,045,505 5,380,828}

^{--- LIABILITIES}

^{Equity capital: 3,500,000 2,925,000}

^{Profit & loss Account: -556,052 -582,132}

^{Total Equity: 2,943,948 2,342,868}

^{Trade Creditors: 151,620 113,085}

^{Prepay. & Def. charges: 213,951 213,434}

^{Short term liabilities: - 1,718}

^{Due to Bank: 2,152,745 2,037,668}

^{Provisions: 10,336 -}

^{Other Short term Liab.: 572,905 672,055}

^{Total short term Liab.: 3,101,557 3,037,960}

^{TOTAL LIABILITIES: 3,101,557 3,037,960}

^{PROFIT & LOSS ACCOUNT}

^{Net Sales 2,585,237 2,559,205}

^{Result of ordinary operations 164,266 141,861}

^{NET RESULT BEFORE TAX: 36,416 15,029}

^{Tax: 10,336 -}

^{Net income/loss year: 26,080 15,029}

^{Depreciation: 58,260 59,330}

^{Directors Emoluments: 94,506 160,080}

^{Wages and Salaries: 348,365 362,659}

^{Financial Income: 2,578 4,274}

RATIOS

^{31/03/2004 31/03/2003}

^{Turnover per employee: 172349.13 170613.67}

^{Net result / Turnover(%): 0.01 0.01}

^{Net Margin(%): 1.01 0.59}

^{Return on Equity(%): 0.89 0.64}

^{Return on Assets(%): 0.43 0.28}

^{Net Working capital: 816108.00 156768.00}

^{Cash Ratio: 0.16 0.16}

^{Quick Ratio: 0.74 0.47}

^{Current ratio: 1.26 1.05}

^{Receivables Turnover: 252.57 132.71}

^{Leverage Ratio: 1.05 1.30}

^{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}

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

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

FINANCIAL COMMENTS

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

^{LIMITED EXEMPT PRIVATE COMPANY:}

^{WHERE THE SHARES OF A PRIVATE COMPANY ARE NOT OWNED BY ANY CORPORATE BODY AND THERE ARE NO MORE THAN 20 MEMBERS, THE PRIVATE COMPANY IS KNOWN AS AN EXEMPT PRIVATE COMPANY.}

^{AN EXEMPT PRIVATE COMPANY ENJOYS A GREATER AMOUNT OF PRIVACY THAN A PRIVATE COMPANY. IT IS NOT REQUIRED TO FILE ACCOUNTS WITH THE REGISTRAR IF IT CAN PRODUCE A CERTIFICATE SIGNED BY ONE OF ITS DIRECTORS, SECRETARY AND AUDITOR CONFIRMING THE FOLLOWING POINTS:}

^{1. THE COMPANY IS AN EXEMPT PRIVATE COMPANY.}

^{2. THE AUDITED ACCOUNTS HAVE BEEN TABLED BEFORE THE SHAREHOLDERS AT THE ANNUAL}

^{GENERAL MEETING.}

^{3. THE COMPANY IS ABLE TO MEET ITS LIABILITIES.}

^{THERE IS THEREFORE NO DISCLOSURE TO THE PUBLIC OF THE ACCOUNTS OF THE COMPANY ALTHOUGH THE ACCOUNTS STILL HAVE TO BE AUDITED EVERY YEAR AND APPROVED AT AN ANNUAL GENERAL MEETING OF THE COMPANY.}

^{A PRIVATE COMPANY THAT IS WHOLLY OWNED BY THE GOVERNMENT MAY BECOME AN EXEMPT PRIVATE COMPANY IF THE MINISTER FOR FINANCE, IN THE NATIONAL INTEREST, DECLARES IT TO BE SUCH BY A GAZETTE NOTIFICATION.}

^{EXEMPT FROM AUDIT}

^{AN EXEMPT PRIVATE COMPANY IS EXEMPT FROM AUDIT REQUIREMENTS IF THE STARTING DATE OF ITS FINANCIAL YEAR IS BETWEEN 15 MAY 2003 AND 31 MAY 2004 AND ITS TURNOVER FOR THAT FINANCIAL YEAR DOES NOT EXCEED $2.5 MILLION. FOR FINANCIAL YEARS STARTING 1 JUNE 2004, THE AMOUNT OF THE TURNOVER HAS BEEN RAISED TO $5 MILLION. THESE COMPANIES ARE STILL REQUIRED TO MAINTAIN PROPER ACCOUNTING.}

BACKGROUND/OPERATION

^{THE COMPANY WAS INCORPORATED IN THE REPUBLIC OF SINGAPORE ON 26/02/1988 AS A LIMITED EXEMPT PRIVATE COMPANY UNDER THE NAMESTYLE OF "AEROBOTICS PTE LTD".}

^{SUBSEQUENTLY ON 26/02/1988, THE COMPANY CHANGED TO ITS PRESENT NAMESTYLE OF "AERO SUPPLIES SYSTEMS ENGINEERING PTE LTD".}

^{AS AT 17/09/2007, THE COMPANY HAS AN ISSUED AND PAID-UP CAPITAL OF 3,500,000 SHARES, OF A VALUE OF S$3,500,000.}

^{PRINCIPAL ACTIVITIES:}

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

^{1) REPAIR OF SHIPS, TANKERS AND OTHER OCEAN-GOING VESSELS}

^{2) MECHANICAL ENGINEERING WORKS}

^{DURING THE FINANCIAL YEAR (S) UNDER REVIEW, THE PRINCIPAL ACTIVITIES OF THE COMPANY ARE THAT OF REPAIRS OF SHIPS, TANKERS AND OTHER OCEAN GOING VESSELS.}

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

^{BACKGROUND INFORMATION}

^{- SINCE ITS INCORPORATION IN 1983, AERO SUPPLIES SYSTEMS ENGINEERING PTE LTD (ASSE TECHNOLOGIES), ONE OF THE LEADING COMPANIES IN SINGAPORE, HAS BEEN ENGAGING SUCCESSFULLY IN VARIOUS COMPLETE METAL FINISHING PROJECTS IN AUTOMATIC PAINTING ELECTROSTATIC POWDER COATINGS, ELECTRO DEPOSITION COATINGS, TEFLON COATINGS, PVC}

^{LAMINATIONS, VITREOUS ENAMEL COATINGS AND IN OTHER ENGINEERING FIELDS SUCH AS PROCESS CHEMICAL PLANT ENGINEERING, PROCESS CONTROLS TURNKEY PROJECTS, DESIGNS AND INSTALLATIONS.}

^{- ITS ACTIVITIES HAVE GROWN IN FIELD OF AIR AND WATER POLLUTION CONTROL EQUIPMENT, SHOT BLASTING SYSTEMS, MATERIAL HANDLING SYSTEMS, INDUSTRIAL FURNACES AND INDUSTRIAL FANS AND BLOWERS AND MARINE CONTAINER MANUFACTURING TECHNOLOGY UNDER VARIOUS LICENSE AGREEMENTS WITH REPUTED COMPANIES FROM GERMANY, USA, JAPAN, U.K., FRANCE AND ITALY. THE COMPANY'S EXPORT MARKET HAS EXPANDED TO 22 COUNTRIES WORLDWIDE THROUGH STRONG NETWORKING AND SERVICE FACILITIES.}

^{- UTILISING THE SYSTEMATIC ADVANTAGE AS ASSE TECHNOLOGIES GROUP, THERE ARE NOW THREE COMPANIES IN SINGAPORE AND MALAYSIA AND JOINT- VENTURES IN EGYPT, CHINA AND INDIA. ITS MANAGEMENT BELIEVES STRONGLY IN THE ENGAGEMENT OF QUALIFIED AND EXPERIENCE PERSONNEL AND THE ASSEMBLY OF MULTI-DISCIPLINED ENGINEERS TO UNDERTAKE ALL THE REQUIREMENTS THAT YOU MAY ASSIGN TO IT.}

^ACTIVITIES

^{- SPECIALIST IN TURNKEY PROJECTS, ENGINEERING CONSULTANCY, EQUIPMENT FABRICATION}

^{AND PLANT ERECTION}

^SERVICES

^{- TURNKEY PROJECTS CAPABILITIES}

^{- PROCESS/PLANT ENGINEERING MANUFACTURING & INSTALLATIONS}

^{- INDUSTRIAL METAL FINISHING PLANTS}

^{- INDUSTRIAL AIR/WATER POLLUTION CONTROL}

^{- FURNACES & OVENS}

^{- INDUSTRIAL FANS & BLOWERS}

^{- INTERNATIONAL IMPORT & EXPORT TRADE}

^{MARKET PRESENCE}

^{- SINGAPORE, MALAYSIA, NEW ZEALAND, INDIA, CHINA AND EGYPT}

^{SOME OF SUBJECT'S CLIENTS INCLUDE}

^{- AEG}

^{- APPLE COMPUTERS}

^{- ASIAN DRIVESHAFT}

^{- AUTOMOTIVE MANUFACTURERS (M)}

^{- BOSCH}

^{- BRADFORD ISOLITE}

^{- DCM HYUNDAI LTD}

^{- EVERGREEN}

^{- FERRO}

^{SUBJECT IS A MEMBER OF THE FOLLOWING ENTITY}

^{- SINGAPORE INDIAN CHAMBERS OF COMMERCE & INDUSTRY}

^{NO OTHER TRADE INFORMATION WAS MADE AVAILABLE AS TELE-INTERVIEW WAS NOT GRANTED ON 21/09/2007.}

^{NUMBER OF EMPLOYEES (31 MARCH)}

^{- COMPANY - 2004: 15 (2003: 12)}

^{REGISTERED AND BUSINESS ADDRESS:}

^{1 KIAN TECK WAY}

^JURONG

^{SINGAPORE 628731}

^{DATE OF CHANGE OF ADDRESS: 30/09/1986}

^{- OWNED PREMISE}

^WEBSITE:

^{http://web.singnet.com.sg/~assesin}

^EMAIL:

^{assesin@singnet.com.sg}

MANAGEMENT

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

^{1) SUHAS VISHNUPANT GHORPADE, A SINGAPORE PERMANENT RESIDENT}

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

^{2) ARUNA SUHAS GHORPADE, A SINGAPOREAN}

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

ADVERSE ON DIRECTORS

^{DIRECTOR'S NAME: SUHAS VISHNUPANT GHORPADE}

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

^{PROPERTY OWNERSHIP: OWNS 1}

^{ANNUAL VALUE: S$16,800}

^{CO-OWNER (S): ARUNA SUHAS GHORPADE}

^{DIRECTOR'S NAME: ARUNA SUHAS GHORPADE}

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

^{PROPERTY OWNERSHIP: OWNS 1}

^{ANNUAL VALUE: S$16,800}

^{CO-OWNER (S): SUHAS VISHNUPANT GHORPADE}

^{*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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