MIRA INFORM REPORT

Report Date :

22.04.2008

IDENTIFICATION DETAILS

Name :	GARDNER DENVER NASH SINGAPORE PTE. LTD

Formerly Known As :	^{NASH ELMO INTERNATIONAL}

Registered Office :	^{1 Gul Link} ⁶²⁹³⁷¹

Country :	Singapore

Financials (as on) :	31.12.2006

Date of Incorporation :	^21.03.2002

Com. Reg. No.:	^200202271G

Legal Form :	^{Pte Ltd}

Line of Business :	Sales and Installation of Vacuum Systems for the Engineering Industry

RATING & COMMENTS

MIRA’s Rating :

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

GARDNER DENVER NASH SINGAPORE PTE. LTD.

Line Of Business

SALES AND INSTALLATION OF VACUUM SYSTEMS FOR THE ENGINEERING INDUSTRY

Parent Company

GARDNER DENVER DEUTSCHLAND GMBH

(PERCENTAGE OF SHAREHOLDING: 100.00%)

Financial Elements

FY 2006

COMPANY

Sales : S$ 18,366,386

Networth : S$ 4,017,843

Paid-Up Capital : S$ 19,002

Net result : S$ 3,998,841

Net Margin(%) : 21.77

Return on Equity(%) : 99.53

Leverage Ratio : 0.89

COMPANY IDENTIFICATION

^{Subject
Company : GARDNER
DENVER NASH SINGAPORE} ^{PTE. LTD.}

^{Former
Name : NASH ELMO INTERNATIONAL}

^{Business
Address: 1 GUL LINK}

^{Town: SINGAPORE}

^{Postcode: 629371}

^{Country: Singapore}

^{Telephone: 6861
6801}

^{Fax: 6861 5091}

^{ROC
Number: 200202271G}

^{Reg.
Town: -}

PREVIOUS IDENTIFICATION

^{NASH
ELMO INTERNATIONAL SINGAPORE PTE. LTD.}

SUMMARY

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

^{Legal Form : Pte Ltd}

^{Date Inc. :}^21/03/2002

^{Previous Legal Form :}^-

^{Summary year :}^31/12/2006

^{Sales :}^18,366,386

^{Networth :}^4,017,843

^{Capital :
-}

^{Paid-Up Capital :}^19,002

^{Employees : 17}

^{Net result :}^3,998,841

^{Share value : 1}

^{Auditor :}^{BDO RAFFLES}

^{BASED
ON ACRA'S}

^{NO. OF SHARES CURRENCY AMOUNT}

^{ISSUED
ORDINARY 19,002 SGD 19,002}

^{PAID-UP
ORDINARY - SGD 19,002}

REFERENCES

^{Litigation: No}

^{Company
status : TRADING}

^{Started
: 21/03/2002}

PRINCIPAL(S)

^{TAN
SENG HWEE
S0002273Z Director}

DIRECTOR(S)

^{HELEN
WRIGHT CORNELL
028169335 Director}

^{Appointed
on : 01/04/2005}

^{Street
: 205 SOUTH 16TH, QUINCY}

^Town:

^Postcode:

^{Country: United
States}

^{TRACY
D PAGLIARA
057416568 Director}

^{Appointed
on : 01/04/2005}

^{Street
: 2722 WILD HORSE, QUINCY}

^Town:

^{Postcode: 62301}

^{Country: United States}

^{TAN
SENG HWEE
S0002273Z Director}

^{Appointed
on : 30/12/2007}

^{Street
: 56 CHOA CHU KANG NORTH 6}

^#17-27

^{YEW MEI GREEN}

^{Town: SINGAPORE}

^{Postcode: 689577}

^{Country: Singapore}

^{TEO
CHIN KEE
S2622115C Company Secretary}

^{Appointed
on : 22/05/2006}

^{Street
: 21 ELIAS ROAD}

^#02-01

^{RIS GRANDEUR}

^{Town: SINGAPORE}

^{Postcode: 519929}

^{Country: Singapore}

FORMER DIRECTOR(S)

^{DANIEL
PHILIP LEVY 153236623}

^{ONG
KAH HOCK I WARTON
S0114938E}

^{ERICH
MICHAEL WENZEL}

ACTIVITY(IES)

^{VACUUM
EQUIPMENT And SYSTEMS Code: 22980}

^{BASED
ON ACRA'S RECORD}

^{1.
WHOLESALE OF MACHINERY AND EQUIPMENT;}

^{SALE
OF ENGINEERED VACUUM & COMPRESSOR EQUIPMENT & RELATED PRODUCTS}

CHARGES

No Charges On Premises/Property In Our Database

PREMISES/PROPERTY INFORMATIONS

No Premises/Property Information In Our Databases

SHAREHOLDERS(S)

^{GARDNER
DENVER DEUTSCHLAND GMBH
19,002 Company}

^{Street
: INDUSTRIESTRASSE 26}

^{BAD NEUSTADT-SAALE, D-97616}

^{Town: -}

^{Postcode: -}

^{Country: Germany}

HOLDING COMPANY

^{GARDNER
DENVER DEUTSCHLAND GMBH
% : 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: "MILD"
UNCERTAINTIES "MILD"
UNCERTAINTIES}

^{Date
Account Lodged:
12/07/2007}

^{Balance
Sheet Date:
31/12/2006 31/12/2005}

^{Number
of weeks:
52 52}

^{Consolidation
Code: COMPANY COMPANY}

^{--- ASSETS} ^---

^{Tangible
Fixed Assets: 129,907 170,871}

^{Total Fixed Assets: 129,907 170,871}

^{Inventories: 1,502,522 1,906,730}

^{Receivables: 3,546,441 40,266}

^{Cash,Banks,
Securitis: 2,177,457 4,501,967}

^{Other
current assets:
237,647
349,762}

^{Total Current Assets: 7,464,067 6,798,725}

^{TOTAL ASSETS: 7,593,974 6,969,596}

^{--- LIABILITIES} ^---

^{Equity
capital:
19,002
19,002}

^{Profit
& lost Account: 3,998,841 2,398,187}

^{Total Equity: 4,017,843 2,417,189}

^{Trade
Creditors:
1,261,018 1,654,674}

^{Advanced
payments:
678,739
1,787,611}

^{Provisions: 1,292,967 883,702}

^{Other
Short term Liab.:
-
5,591}

^{Prepay.
& Def. charges:
343,407
220,829}

^{Total short term Liab.: 3,576,131
4,552,407}

^{TOTAL LIABILITIES: 3,576,131 4,552,407}

^{--- PROFIT & LOSS ACCOUNT} ^---

^{Net
Sales
18,366,386
12,689,996}

^{Purchases,Sces
& Other Goods:
11,057,796
7,822,278}

^{Gross
Profit: 7,308,590 4,867,718}

^{NET
RESULT BEFORE TAX:
4,998,551
3,017,232}

^{Tax
:
999,710
619,045}

^{Net
income/loss year:
3,998,841
2,398,187}

^{Depreciation: 70,220 69,248}

^{Dividends: 2,398,187 2,047,856}

^{Wages
and Salaries:
1,296,551
1,328,897}

^{Financial
Income:
29,718 38,686}

RATIOS

^{31/12/2006 31/12/2005}

^{Turnover
per employee: 1080375.65 746470.35}

^{Net
result / Turnover(%): 0.22 0.19}

^{Stock
/ Turnover(%): 0.08 0.15}

^{Net
Margin(%): 21.77 18.90}

^{Return
on Equity(%): 99.53 99.21}

^{Return
on Assets(%): 52.66 34.41}

^{Dividends
Coverage: 1.67 1.17}

^{Net
Working capital: 3887936.00 2246318.00}

^{Cash
Ratio: 0.61 0.99}

^{Quick
Ratio: 1.60 1.00}

^{Current
ratio: 2.09 1.49}

^{Receivables
Turnover: 69.51 1.14}

^{Leverage
Ratio: 0.89 1.88}

^{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

^{AUDITOR'S
NOTE:}

^{AS EXPLAINED IN
NOTE 2(N) TO THE FINANCIAL STATEMENTS, THE FUNCTIONAL} ^{CURRENCY OF
THE COMPANY IS UNITED STATES ("US") DOLLAR AS SALES AND} ^{PURCHASES
ARE DENOMINATED PRIMARILY IN US DOLLARS AND RECEIPTS FROM} ^{OPERATIONS
ARE USUALLY RETAINED IN US DOLLARS AND THE DIRECTROS ARE OF} ^{THE
OPINION THAT THE US DOLLAR REFLECTS THE ECONOMIC SUBSTANCE OF THE} ^{UNDERLYING
EVENTS AND CIRCUMSTANCES RELEVANT TO THE COMPANY. HOWEVER,} ^{THE
COMPANY CONTINUES TO MAINTAIN ITS BOOKS AND RECORDS IN SINGAPORE} ^{DOLLAR
INSTEAD OF ITS FUNCTIONAL CURRENCY AND HAS NOT TRANSLATED ALL} ^{AMOUNTS
INTO THE FUNCTIONAL CURRENCY FOR REPORTING PURPOSES. THIS IS} ^{NOT IN
COMPLICNCE WITH THE SINGAPORE FINANCIAL REPORTING STANDARDS ("FRS")} ^{21 - THE EFFECTS OF CHANGES IN FOREIGN EXCHANGE RATES, WHICH} ^{STIPULATES
THAT THE FUNCTIONAL CURRENCY SHOULD REFLECT THE UNDERLYING} ^{TRANSACTIONS,
EVENTS AND CONDITIONS RELEVANT TO THE COMPANY. IN} ^{ADDITION, THE
MANAGEMENT HAS NOT ADJUSTED FOR THE EXCHANGE DIFFERENCES} ^{ARISING
FROM THE TRANSLATION OF THE COMPANY'S RESULTS AND FINANCIAL} ^{POSITION
FROM THE FUNCTIONAL CURRENCY INTO THE PRESENTATION CURRENCY} ^{WHICH
SHOULD HAVE BEEN RECOGNISED AS A SEPARATE COMPONENT OF EQUITY.} ^{THEREFORE,
WE ARE UNABLE TO DETERMINE THE TOTAL REQUIRED ADJUSTMENTS} ^{TO THE
FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER} ^{2006.
IN ADDITION, WE ARE ALSO UNABLE TO DETERMINE THE EFFECT OF NON-} ^{COMPLIANCE
IN PRIOR YEAR ON THE RESULTS FOR THE CURRENT FINANCIAL} ^YEAR.

^{BECAUSE
OF THE SIGNIFICANCE OF THE MATTER DISCUSSSED IN PARAGRAPH 4,} ^{WE DO NOT
EXPRESS AN OPINION ON THE FINANCIAL STATEMENTS.}

^{THE
FINANCIAL CONDITION OF THE COMPANY WAS SEEN TO BE FAIR IN VIEW OF} ^{THE
FOLLOWING:}

^{NET WORTH:}

^{THE BALANCE SHEET
WAS PASSABLE WITH NET WORTH IMPROVED BY} ^{66.22% FROM S$2,417,189 IN FY 2005 TO
S$4,017,843 IN FY 2006. THIS WAS} ^{DUE TO HIGHER ACCUMULATED PROFITS
OF S$3,998,841 (2005: S$2,398,187);} ^{A RISE OF 66.74% FROM THE PRIOR
FINANCIAL YEAR.}

^LEVERAGE:

^{IN THE SHORT-TERM,
SUBJECT WAS LARGELY FINANCED BY TRADE CREDITORS} ^{WHICH MADE
UP 35.26% (2005: 36.35%) OF THE TOTAL CURRENT LIABILITIES} ^{AND
AMOUNTED TO S$1,261,018 (2005: S$1,654,674). THE BREAKDOWN WAS AS} ^FOLLOWS:

^{*TRADE PAYABLES -
2006: S$757,644 (2005: S$981,414)}

^{*DUE TO ULTIMATE
HOLDING COMPANY (TRADE) - 2006: S$40,290 (2005: S}

^$37,293)

^{*DUE
TO IMMEDIATE HOLDING COMPANY (TRADE) - 2006: NIL (2005: S$14,089)}

^{*DUE
TO RELATED COMPANIES (TRADE) - 2006: S$463,084 (2005: S$621,878)}

^{IN
ALL, LEVERAGE RATIO IMPROVED FROM 1.88 TIMES TO 0.89 TIMES AS A} ^{RESULT OF A
DROP IN TOTAL LIABILITIES AND A RISE IN TOTAL EQUITY.}

^LIQUIDITY:

^{IN
GENERAL, SUBJECT'S LIQUIDITY SITUATION WAS PASSABLE AS SEEN FROM} ^{THE RISE IN
NET WORKING CAPITAL BY 73.08% TO S$3,887,936} ^{(2005: S$2,246,318).}

^{BOTH
CURRENT AND QUICK RATIOS IMPROVED TO 2.09 TIMES (2005: 1.49} ^{TIMES) AND
1.60 TIMES (2005: 1.00 TIMES) RESPECTIVELY.}

^{CASH
AND CASH EQUIVALENTS FELL BY 51.63% TO S$2,177,457 (2005: S}

^{$4,501,967)
AND COMPRISED OF:}

^{*CASH
AND BANK BALANCES - 2006: S$2,177,457 (2005: S$2,785,400)}

^{*FIXED
DEPOSITS - 2006: NIL (2005: S$1,716,567)}

^{PROFITABILITY:}

^{REVENUE ROSE BY
44.73% FROM S$12,689,996 IN FY 2005 TO} ^{S$18,366,386. NET PROFIT ALSO IMPROVED
BY 66.74% TO S$3,998,841} ^{(2005: S$2,398,187). HENCE, NET MARGIN
INCREASED TO 21.77% (2005:} ^18.90%).

^{REVENUE COMPRISED
OF:}

^{*SALE OF VACUUM
SYSTEMS - 2006: S$15,989,449 (2005: S$11,192,158)}

^{*SALE OF PARTS -
2006: S$1,835,403 (2005: S$1,246,663)}

^{*SERVICE AND
REPAIR - 2006: S$541,534 (2005: S$251,175)}

^{DEBT
SERVICING:}

^{DEBT SERVICING
PROBLEMS MIGHT NOT BE EXPECTED IF REVENUE AND EARNINGS} ^{CAN BE
MAINTAINED AND PAYMENTS BY TRADE DEBTORS ARE FORTHCOMING.} ^{THE
AVERAGE COLLECTION PERIOD HAS LENGTHENED TO 70 DAYS (2005: 1 DAY).}

BACKGROUND/OPERATION

^{THE
COMPANY WAS INCORPORATED IN THE REPUBLIC OF SINGAPORE ON} ^{21/03/2002
AS A LIMITED PRIVATE COMPANY UNDER THE NAMESTYLE OF "NASH} ^{INTERNATIONAL
SINGAPORE PTE. LTD.".}

^{ON
04/12/2002, SUBJECT CHANGED TO THE NAMESTYLE OF "NASH ELMO} ^{INTERNATIONAL
SINGAPORE PTE. LTD.".}

^{SUBSEQUENTLY
ON 01/04/2005, SUBJECT CHANGED TO ITS PRESENT NAMESTYLE} ^{OF
"GARDNER DENVER NASH SINGAPORE PTE. LTD.".}

^{THE
COMPANY HAS AN ISSUED AND PAID-UP CAPITAL OF} ^{19,002
SHARES, OF A VALUE OF S$19,002.}

^{PRINCIPAL
ACTIVITIES:}

^{SUBJECT
IS REGISTERED WITH THE ACCOUNTING AND CORPORATE REGULATORY}

^{AUTHORITY
(ACRA) TO BE PRINCIPALLY ENGAGED IN THE BUSINESS OF:}

^{(1)
WHOLESALE OF MACHINERY AND EQUIPMENT;}

^{SALE
OF ENGINEERED VACUUM & COMPRESSOR EQUIPMENT & RELATED}

^PRODUCTS

^{(2)
ENGINEERING ACTIVITIES;}

^{SERVICE
& REPAIR OF VACUUM & COMPRESSOR EQUIPMENT}

^{THE
COMPANY IS LISTED IN THE SINGAPORE LOCAL DIRECTORIES UNDER THE} ^{CLASSIFICATION
OF: PUMPS - MANUFACTURING & DISTRIBUTION}

^{DURING
THE FINANCIAL YEAR(S), UNDER REVIEW, SUBJECT'S PRINCIPAL} ^{ACTIVITIES
ARE THE SALES AND INSTALLATION OF VACUUM SYSTEMS FOR THE} ^{ENGINEERING
INDUSTRY.}

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

^{INFORMATION
ON ITS HOLDING COMPANY:}

^BACKGROUND:

^{GARDNER DENVER
NASH WAS CREATED IN SEPTEMBER 2004, WHEN GARDNER DENVE} ^{ACQUIRED
NASH_ELMO INDUSTRIES FROM AUDAX.
NASH_ELMO RESULTED FROM THE} ^{2002 MERGER OF THE NASH
ENGINEERING COMPANY, USA, AND ELMO VACUUM} ^{TECHNOLOGY GMBH, GERMANY,
FORMERLY A SIEMENS SUBSIDIARY. THE} ^{COMBINING OF NASH, THE LEADER IN LIQUID RING VACUUM PUMPS, WITH ELMO,} ^{THE LEADER IN SIDE CHANNEL BLOWERS, CREATED NASH_ELMO, A GLOBAL LEADE} ^{IN VACUUM TECHNOLOGY. JANUARY 2007, THE GARDNER DENVER CENTRIFUGAL} ^{STRATEGIC
BUSINESS UNIT BECAME PART OF THE ENGINEERED PRODUCTS} ^{DIVISION,
ADDING HOFFMAN, LAMSON AND OTHER BLOWER PRODUCTS TO OUR} ^OFFERINGS.

^{TODAY, AS THE
GARDNER DENVER ENGINEERED PRODUCTS DIVISION, WE PROVIDE} ^{IMPROVED
GLOBAL SERVICE AND TECHNICAL SUPPORT FOR NASH LIQUID RING} ^{VACUUM
PUMPS, COMPRESSORS AND ENGINEERED SYSTEMS, AS WELL AS GARDNER} ^{DENVER
CENTRIFUGAL BLOWERS AND ENGINEERED VACUUM SYSTEMS, SERVING THE} ^{CHEMICAL,
PETROLEUM, POWER, PAPER, MINING, ENVIRONMENTAL, FOOD, AND} ^{WASTEWATER
TREATMENT INDUSTRIES.}

^{THE ENGINEERED
PRODUCTS DIVISION HAS MANUFACTURING FACILITIES IN THE} ^{USA, CHINA,
GERMANY AND BRAZIL AND ENGINEERED TO ORDER (ETO) CENTERS} ^{IN
ELIZABETH, PENNSYLVANIA, USA; SINGAPORE; SMITHFIELD, NSW,} ^{AUSTRALIA;
AND ASSENDELFT, NETHERLANDS.}

^{INDUSTRIES
SERVED:}

^*
CHEMICAL

^{*
ELECTRIC POWER}

^{*
FOOD AND BEVERAGE}

^{*
GOVERNMENT/ MARINE}

^*
MINING

^{*
OIL AND GAS}

^{*
OTHER PROCESS INDUSTRIES}

^{*
PHARMACEUTICAL}

^{*
PULP AND PAPER}

^*
TEXTILE

^{PRODUCTS
AND SYSTEMS:}

^{*
LIQUID RING COMPRESSORS}

^{*
LIQUID RING VACUUM PUMPS}

^{*
ENGINEERED SYSTEMS}

^{*
CLASSIC LIQUID RING VACUUM PUMPS AND COMPRESSORS}

^{*
STEAM JET EJECTORS}

^{INFORMATION
ON SUBJECT:}

^ACTIVITIES:

^{*
SALES AND SERVICES OF VACUUM PUMPS & ENGINEERED SYSTEM}

^{PRODUCTS
DEALING:}

^{*
LIQUID RING VACUUM PUMPS}

^{*
GAS COMPRESSORS}

^{*
DRY VACUUM PUMPS}

^{*
SIDE CHANNEL BLOWERS}

^{*
SCREW PUMPS}

^{*
ROTARY VANE PUMPS}

^{*
REGENERATIVE BLOWERS}

^{*
STEAM JET EJECTORS}

^TRADE
NAMES:

^{*
NASH - VACUUM PUMPS,STEAM JETS
& HYBRIDS (US)}

^{IMPORT
COUNTRIES:}

^*
CHINA

^*
EUROPE

^*
BRAZIL

^*
GERMANY

^*
USA

^{EXPORT
COUNTRIES:}

^*
INDIA

^*
PAKISTAN

^*
TAIWAN

^*
BANGLADESH

^{*
SRI LANKA}

^*
ASEAN

^{QUALITY
ASSESSMENT:}

^{*
ISO 9002}

^{NUMBER
OF EMPLOYEES:}

^{*
2007: 17}

^{NO
OTHER TRADE INFORMATION WAS AVAILABLE AS TELE-INTERVIEW WAS NOT}

^{GRANTED
BY SUBJECT'S PERSONNEL}

^{THE COMPANY'S
IMMEDIATE HOLDING COMPANY IS GARDNER DENVER DEUTSCHLAND} ^{GMBH, A
COMPANY INCORPORATED IN GERMANY AND ITS ULTIMATE HOLDING} ^{COMPANY IS
GARDNER DENVER LLC, A COMPANY INCORPORATED IN TEH UNITED} ^{STATES FO
AMERICA. DURING THE FINANCIAL YEAR, THE COMPANY'S IMMEDIATE} ^{HOLDING
COMPANY CHANGED ITS NAME FROM GARDNER DENVER ELMOS TECHNOLOGY} ^{GMBH
(FORMERLY KNOWN AS "NASH_ELMO INDUSTRIES GMBH") TO GARDNER DENVER}

^{DEUTSCHLAND
GMBH.}

^{REGISTERED
AND BUSINESS ADDRESS:}

^{1
GUL LINK}

^{SINGAPORE
629371}

^{DATE
OF CHANGE OF ADDRESS: -}

^{-
PROPERTY RECORD WAS NOT AVAILABLE}

^WEBSITE:

^{http://www.nasheng.com
(HOLDING COMPANY)}

^{http://www.gardnerdenver.com
(HOLDING COMPANY)}

^EMAIL:

^{nashsin@singnet.com.sg}

MANAGEMENT

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

^{1)
HELEN WRIGHT CORNELL, AN AMERICAN}

^{-
BASED IN AMERICA}

^{2)
TRACY D PAGLIARA, AN AMERICAN}

^{-
BASED IN AMERICA}

^{3)
TAN SENG HWEE, A SINGAPOREAN}

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

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 8.9% IN 3Q 2007, FOLLOWING 8.7% GROWTH IN 2Q 2007. GROW MOMENTUM (ON AN ANNUALISED QUARTER-ON-QUARTER BASIS) WAS 4.3%, COMPARED WITH 14.5% IN THE SECOND QUARTER.

THE FINANCIAL SERVICES SECTOR ROSE SIGNIFICANTLY BY 20% IN 3Q 2007, FOLLOWING A 17% GROWTH IN THE PREVIOUS QUARTER. HOWEVER, ON A SEASONALLY-ADJUSTED QUARTER-ON-QUARTER BASIS, THE SECTOR FELL BY 8.6%, IN CONTRAST TO THE 39% GROWTH IN THE SECOND QUARTER. THE DECLINE STEMS FROM THE IMPACT FROM THE TURMOIL IN GLOBAL FINANCIAL MARKETS.

THE CONSTRUCTION SECTOR REGISTERED A STRONG GROWTH. THE SECTOR GREW BY 18%, FOLLOWING 19% GAIN IN 2Q 2007. GROWTH MOMENTUM MODERATED FROM 15% IN 2Q 2007 TO 6% IN 3Q 2007.

MANUFACTURING SECTOR ROSE BY 10% IN 3Q 2007, UP FROM 8.3% IN 2Q 2007. THE HIGHEST GROWTH WAS REGISTERED IN THE BIOMEDICAL MANUFACTURING CLUSTER, FOLLOWED BY TRANSPORT ENGINEERING, ELECTRONICS AND CHEMICALS

CLUSTERS. PRECISION ENGINEERING SECTOR CONTINUED TO SEE LOWER PRODUCTION.

THE WHOLESALE AND RETAIL TRADE SECTOR GREW BY 6.6% IN 3Q 2007, SLOWER THAN THE 8.4% GROWTH IN 2Q 2007. ALTHOUGH NON-OIL RE-EXPORTS STRENGTHENED IN THE QUARTER, RETAIL SALES SAW WEAKER GROWTH.

THE TRANSPORT AND STORAGE SECTOR MOEDERATED TO 4.8% IN 3Q 2007, FROM 5.3% IN 2Q 2007. HIGHER GROWTH IN THE AIR TRANSPORT SEGMENT WAS OFFSET BY SLOWER GROWTH IN THE WATER TRANSPORT SEGEMENT AFTER LAST QUARTER’S STRONG GROWTH.

THE HOTELS AND RESTAURANTS SECTOR GREW BY 4.5% FROM 5.3% IN 2Q 2007.

THE AVERAGE OCCUPANCY RATE OF HOTELS CLIMBED TO 89%, A 2.1% RISE OVER 3Q 2006. THE AVERAGE ROOM RATE ALSO GREW BY 22% TO S$204. CONSEQUENTLY, TOTAL HOTEL ROOM REVENUE OF GAZETTED HOTELS ROSE BY 20% IN 3Q 2007 TO AN ESTIMATED S$478 MILLION.

THE INFORMATION AND COMMUNICATIONS SECTOR ROSE 6.9% IN 3Q 2007, HIGHER THAN THE 6.5% IN 2Q 2007. THE TELECOMMUNICATIONS SEGMENT CONTINUED TO ACCOUNT FOR MUCH OF THE GROWTH IN THE SECTOR. IT SERVICES MAINTAINED ITS MODERATE GROWTH LEVEL FROM 2Q 2007.

IN THE TELECOMMUNICATIONS SEGMENT, THE GROWTH OF MOBILE SUBSCRIBERS CONTINUED TO RISE, RISING BY 20%, UP FROM 18% IN 2Q 2007. INTERNATIONAL TELEPHONE CALL DURATION GREW TO 27%, UP FROM 24% IN 2Q 2007.

THE BUSINESS SERVICES SECTOR EXPANDED BY 7.1%, SIMILAR TO THE 7.2% GAIN IN 2Q 2007. GROWTH WAS HEALTHY ACROSS ALL SEGMENTS, WITH GOOD PERFORMANCES IN THE BUSINESS REPRESENTATIVE OFFICES, REAL ESTATE AND PROFESSIONAL SERVICES SEGMENTS.

NEWS

SINGAPORE GROWTH SLOWS TO 6% IN 4Q 2007

THE SINGAPORE ECONOMY GREW AT A SLOWER-THAN-EXPECTED 6% GROWTH IN 4Q 2007, WEIGHED DOWN BY DECLINING MANUFACTURING OUTPUT.

ECONOMISTS HAD ANTICIPATED GROWTH OF 7.0-8.5% FOR 4Q 2007.

THE ESTIMATE FOR REAL GROSS DOMESTIC PRODUCT (GDP) GROWTH, COMPARED WITH 4Q 2006, MEANT THE GROWTH HAD MODERATED FROM THE REVISED GROWTH FIGURE OF 9% SEEN IN 3Q 2006, THE MINISTRY OF TRADE AND INDUSTRY SAID.

ON A QUARTER-ON-QUARTER SEASONALLY ADJUSTED ANNUALISED BASIS, REAL GDP FELL BY 3.2% IN 4Q 2007 COMPARED WITH A 4.4% GAIN IN 3Q 2007, CAUSED BY A SLOWDOWN IN MANFACTURING OUTPUT.

THE FIGURE MARKS THE FIRST QUARTER-ON-QUARTER DECLINE SINCE 1Q 2005, ACCORDING TO DATA.

GROWTH IN THE MANUFACTURING SECTOR IS FORECASTED TO HAVE SLOWED FROM 10.3% IN 3Q 2007 TO 0.5% IN 4Q 2007. IT WAS LARGELY ATTRIBUTED TO A DECLINE IN THE BIOMEDICAL MANUFACTURING CLUSTER AS SOME ACTIVE PHARMACEUTICAL INGREDIENTS WERE NOT PRODUCED.

TRANSPORT ENGINEERING, WHICH INCLUDES OIL RIG MANUFACTURING AND SHIP REPAIR, CONTINUED TO SHOW DOUBLE-DIGIT GROWTH, WHILE THE CONSTRUCTION SECTOR IS PREDICTED TO HAVE GROW STRONGLY BY 24.4% IN 4Q 2007, UP FROM 19.2% IN 3Q 2007.

GROWTH IN THE SERVICE SECTOR WAS STEADY AT 8.3%.

SINGAPORE’S ECONOMY GREW BY 7.5% IN 2007, MARKING THE FOURTH STRAIGHT YEARS OF STRONG GROWTH, PRIME MINISTER LEE HSIEN LOONG SAID IN HIS NEW YEAR MESSAGE.

THE FIGURE FOR 2007 ECONOMIC EXPANSION WAS AT THE LOWER END OF THE GOVERNMENT’S UPGRADED FULL-YEAR GROWTH TARGET OF 7.5-8.0%, AND WAS BELOW THE 7.9% GROWTH REGISTERED FOR 2006.

MR LEE FORECAST GROWTH OF 4.5-6.5% FOR SINGAPORE IN 2008.

OUTLOOK

FOR 2008, EXTERNAL ECONOMIC CONDITIONS ARE EXPECTED TO WEAKEN SLIGHTLY COMPARED TO 2007. THE LINGERING EFFECTS OF THE SUB-PRIME PROBLEMS AND AN OVERALL WEAKENING OF THE HOUSING MARKET WILL DAMPEN US CONSUMPTION. EU GROWTH IS ALSO EXPECTED TO BE LOWER AS A STRONG CURRENCY ERODES EXPORT COMPETITIVENESS. HOWEVER, THE FORECAST FOR ASIAN ECONOMIES REMAIN POSITIVE, WITH CHINA EXPECTED TO SUBSTAIN DOUBLE-DIGIT GROWTH.

WITH THESE FACTORS IN MIND, THE MINISTRY OF TRADE AND INDUSTRY PREDICTS THS SINGAPORE ECONOMY TO GROW BY 4.5-6.5% IN 2008. THIS REPRESENTS A MODERATION IN GROWTH TOWARDS THE ECONOMY’S POTENTIAL RATE OF GROWTH, AFTER FOUR YEARS OF ABOVE-TREND GROWTH.

THERE ARE SOME DOWNSIDE RISKS. IF THE SUB-PRIME PROBLEMS WORSEN THAN EXPECTED, OR OIL PRICES RISE FURTHER IN 2008, THIS COULD BRING A GREATER-THAN-EXPECTED SLOWDOWN IN US, WHICH WOULD AFFECT THE SINGAPORE ECONOMY.

IN THE FINANCIAL SERVICES INDUSTRY, A NET WEIGHTED BALANCE OF 17% OF FIRMS, ESPECIALLY INSURANCE COMPANIES, REMAINS POSITIVE ABOUT THE BUSINESS OUTLOOK IN THE MONTHS AHEAD.

FIRMS IN THE REAL ESTATE INDUSTRY EXPECT BUSINESS TO BE BRISK FOR THE

COMING MONTHS, IN PARTICULAR THE REAL ESTATE DEVELOPERS.

MANUFACTURING FIRMS REMAIN OPTIMISTIC FOR THE PERIOD ENDING MARCH 2008. A NET WEIGHTED BALANCE OF 25% OF MANUFACTURERS FORECAST BETTER BUSINESS, SLIGHTLY HIGHER THAN THE 22% REGISTERED BOTH IN THE PREVIOUS QUARTER AND THE SAME PERIOD IN THE PREVIOUS YEAR.

WHOLESALERS GENERALLY REMAIN POSITIVE ABOUT THEIR BUSINESS CONDITIONS, WITH A NET WEIGHTED BALANCE OF 24% OF FIRMS BEING OPTIMISTIC FOR THE COMING MONTHS. SEGMENTS THAT ARE EXPECTED TO PERFORM BETTER INCLUDE WHOLESALING OF FOOD AND BEVERAGES, WEARING APPAREL AND FOOTWEAR, COSMETICS AND TOILETRIES, AND HOUSEHOLD ELECTRICAL APPLIANCES.

RETAILERS ANTICIPATES BETTER BUSINESS IN THE COMING MONTHS DUE TO YEAR-END FESTIVE SHOPPING, WITH A NET WEIGHTED BALANCE OF 31% BEING POSITIVE. THE SEGMENTS THAT ARE FORECASTING BRISK BUSINESS IN THE COMING MONTHS INCLUDE DEPARTMENT STORE AND SUPERMARKET OWNERS, WEARING APPAREL AND FOOTWEAR, FURNITURE AND FURNISHINGS, AND JEWELLERY AND WATCHES.

IN THE TRANSPORT AND STORAGE INDUSTRY, A NET WEIGHTED BALANCE OF 18% OF FIRMS FORECASTS FAVOURABLE BUSINESS CONDITIONS FOR THE COMING MONTHS.

HOTELIERS FORESEES A FAVOURABLE BUSINESS OUTLOOK, WITH A NET WEIGHTED BALANCE OF 79% OF FIRMS EXPECTING THEIR BUSINESSES TO RISE IN ANTICIPATION OF HIGHER BANQUET SALES AND INCREASE IN ROOM REVENUE IN VIEW OF THE POSITIVE DEVELOPMENT IN THE TOURISM INDUSTRY. FIRMS IN THE CATERING TRADE INDUSTRY ALSO FORESEES BETTER BUSINESS CONDITIONS.

FIRMS IN THE INFORMATION AND COMMUNICATIONS INDUSTRY PREDICTS A HIGHER DEMAND FOR THEIR SERVICES, WITH A NET WEIGHTED BALANCE OF 5%.

IN THE BUSINESS SERVICES INDUSTRY, AN OVERALL NET WEIGHTED BALANCE OF 33% OF FIRMS EXPECTS POSITIVE SENTIMENTS. THESE INCLUDE ACCOUNTING, BOOK-KEEPING AND AUDITING, ENGINEERING AND SPECIALISED DESIGN SERVICES AS WELL AS TRAVEL AGENCIES.

EXTRACTED FROM: MINISTRY OF TRADE AND INDUSTRY, SINGAPORE

SINGAPORE DEPARTMENT OF STATISTICS

CHANNEL NEWS 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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