MIRA INFORM REPORT

Report Date :

23.04.2008

IDENTIFICATION DETAILS

Name :	^{FUJI MACHINE MFG.(SINGAPORE) PTE. LTD.}

Registered Office :	^{51 UBI Avenue 1} ^#01-24 ^{Paya Ubi Industrial Park}

Country :	Singapore

Financials (as on) :	31.12.2006

Date of Incorporation :	^20.01.2001

Com. Reg. No.:	^200100454G

Legal Form :	^{Pte Ltd}

Line of Business :	Sales, Servicing and Rental of Industrial Machinery and Equipment

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

FUJI MACHINE MFG. (SINGAPORE) PTE. LTD.

Line Of Business

SALES, SERVICING AND RENTAL OF INDUSTRIAL MACHINERY AND EQUIPMENT

Parent Company

SOJITZ CORPORATION

(PERCENTAGE OF SHAREHOLDINGS: 86.00%)

Financial Elements

FY 2006

COMPANY

Sales : S$57,982,405

Networth : S$ 6,211,368

Paid-Up Capital : S$ 2,986,600

Net result : S$ 1,142,955

Net Margin(%) : 1.97

Return on Equity(%) : 18.40

Leverage Ratio : 2.75

COMPANY IDENTIFICATION

^{Subject Company : FUJI MACHINE MFG.(SINGAPORE)
PTE. LTD.}

^{Former Name :
-}

^{Business Address : 51 UBI AVENUE 1}

^#01-24

^{PAYA UBI INDUSTRIAL PARK}

^{Town :
SINGAPORE}

^{Postcode : 408933}

^{County :
-}

^{Country :
Singapore}

^{Telephone : 6746 4966}

^{Fax :
6841 2326}

^{ROC Number :
200100454G}

^{Reg. Town : -}

SUMMARY

^{Legal Form : Pte Ltd}

^{Date Inc. : 20/01/2001}

^{Previous Legal Form : -}

^{Summary year :
31/12/2006}

^{Sales :
57,982,405}

^{Networth :
6,211,368}

^{Capital :
-}

^{Paid-Up Capital :
2,986,600}

^{Employees : 20}

^{Net result : 1,142,955}

^{Share value : 1}

^{Auditor :
Y F CHEN & CO}

REFERENCES

^{Litigation : No}

^{Company status : TRADING}

^{Started :
20/01/2001}

PRINCIPAL(S)

^{TATSUYUKI SHIMIZU G5802127Q Director}

DIRECTOR(S)

^{TATSUYUKI SHIMIZU G5802127Q Director}

^{Appointed on : 01/10/2006}

^{Street : 205
RIVER VALLEY ROAD}

^#14-52

^{Town: SINGAPORE}

^{Postcode: 238274}

^{Country: Singapore}

^{SOPHIA LIM SIEW FAY S2664520D Company Secretary}

^{Appointed on : 05/11/2002}

^{Street : 806
BEDOK RESERVOIR ROAD}

^#14-04

^BAYWATER

^{Town: SINGAPORE}

^{Postcode: 479243}

^{Country: Singapore}

^{EIJI OCHI TG0334114 Director}

^{Appointed on : 30/03/2001}

^{Street : 261
RIVER VALLEY ROAD}

^#08-25

^{ASPEN HEIGHTS}

^{Town: SINGAPORE}

^{Postcode: 238307}

^{Country: Singapore}

^{FUKASE SHINICHI TZ0201990 Director}

^{Appointed on : 01/10/2006}

^{Street : 6-5-18
MINAMI-OOI}

^SHINAGAWA-KU

^{Town: TOKYO}

^{Postcode: 140-0013}

^{Country: Japan}

ACTIVITY(IES)

^{MACHINERY
Code: 13260}

^{BASED ON ACRA'S RECORD}

^{1) RENTING OF INDUSTRIAL
MACHINERY AND EQUIPMENT}

^{2) WHOLESALE OF
MACHINERY AND EQUIPMENT}

CHARGES

No Charges On Premises/Property In Our Database

PREMISES/PROPERTY INFORMATIONS

No Premises/Property Information In Our Databases

ASSOCIATED COMPANY(IES)

^{FUJI SMT (MALAYSIA) SDN
BHD}

^Malaysia

SHAREHOLDERS(S)

^{FUJI MACHINE MFG. CO.,
LTD. 418,124 Company}

^{Street : 19, CHAUSUYAMA, YAMA-MACHI}

^{Town: CHIRYU-SHI}

^{Postcode: 4720006}

^{Country: Japan}

^{SOJITZ CORPORATION 2,568,476 Company}

^{Street : 1-20, AKASAKA 6-CHOME}

^MINATO-KU

^{Town: TOKYO}

^{Postcode: 107-8655}

^{Country: Japan}

HOLDING COMPANY

^{SOJITZ CORPORATION UF36614R %: 86.00}

SUBSIDIARY(IES)

No Participation In Our Database

PAYMENT HISTORY AND EXPERIENCES

^{Trade Morality: AVERAGE}

^{Liquidity : SUFFICIENT}

^{Payments : REGULAR}

^{Trend : DOWNWARD}

^{Financial Situation: AVERAGE}

FINANCIAL ELEMENTS

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

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

^{Date Account Lodged: 12/04/2007}

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

^{Number of weeks: 52 52}

^{Consolidation Code: COMPANY COMPANY}

^{---
ASSETS ---}

^{Tangible Fixed
Assets: 1,350,266 2,054,852}

^{Investments 23,056 16,552}

^{Total Fixed Assets: 1,373,322 2,071,404}

^{Inventories: 3,586,803 1,664,009}

^{Receivables: 12,965,123 13,204,688}

^{Cash,Banks,
Securitis: 5,098,573 14,192,798}

^{Other current assets: 274,772 427,433}

^{Total Current Assets: 21,925,271 29,488,928}

^{TOTAL ASSETS: 23,298,593 31,560,332}

^{---
LIABILITIES ---}

^{Equity capital: 2,986,600 2,986,600}

^{Profit & lost Account: 3,226,222 3,021,267}

^{Other: -1,454 -1,273}

^{Total Equity: 6,211,368 6,006,594}

^{L/T deffered taxes: 36,876 70,638}

^{Total L/T Liabilities: 36,876 70,638}

^{Trade Creditors: 15,678,521 23,779,082}

^{Prepay. & Def.
charges: 1,020,835 951,030}

^{Provisions: 335,705 459,241}

^{Other Short term
Liab.: 15,288 293,747}

^{Total short term Liab.: 17,050,349 25,483,100}

^{TOTAL LIABILITIES: 17,087,225 25,553,738}

^{---
PROFIT & LOSS ACCOUNT}

^{Net Sales 57,982,405 90,617,496}

^{Result of ordinary
operations 1,574,362 2,427,404}

^{NET RESULT BEFORE
TAX: 1,418,499 2,349,073}

^{Tax :
275,544
471,647}

^{Net income/loss year: 1,142,955 1,877,426}

^{Depreciation: 1,100,650 792,207}

^{Dividends: 938,000 378,830}

^{Directors Emoluments: 424,641 322,805}

^{Wages and Salaries: 2,022,045 1,579,300}

^{Financial Income: 12,452 5,273}

RATIOS

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

^{Turnover per
employee: 2899120.25 4530874.80}

^{Net result /
Turnover(%): 0.02 0.02}

^{Stock / Turnover(%): 0.06 0.02}

^{Net Margin(%): 1.97 2.07}

^{Return on Equity(%): 18.40 31.26}

^{Return on Assets(%): 4.91 5.95}

^{Dividends Coverage: 1.22
4.96}

^{Net Working capital: 4874922.00 4005828.00}

^{Cash Ratio: 0.30 0.56}

^{Quick Ratio: 1.06 1.08}

^{Current ratio: 1.29 1.16}

^{Receivables Turnover: 80.50 52.46}

^{Leverage Ratio:}^{2.75 4.25}

^{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}

^{Dividends Coverage : Net income loss year/Dividends}

^{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

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

^{THE FOLLOWING:}

^{NET WORTH:}

^{THE BALANCE SHEET WAS
CONSIDERED PASSABLE WITH NET WORTH IMPROVED BY} ^{3.41% FROM S$6,006,594 IN 2005 TO
S$6,211,368 IN 2006. THIS WAS DUE TO} ^{HIGHER RETAINED PROFITS OF
S$3,226,222 (2005: S$3,021,267); A RISE OF} ^{6.78% FROM THE PRIOR
YEAR.}

^LEVERAGE:

^{IN THE SHORT TERM,
SUBJECT WAS LARGELY FINANCED BY TRADE CREDITORS} ^{WHICH MADE UP 91.95% (2005: 93.31%) OF
THE TOTAL CURRENT LIABILITIES} ^{AND AMOUNTED TO S$15,678,521 (2005:
S$23,779,082). THE BREAKDOWN IS AS}

^FOLLOWS:

^{* THIRD PARTIES}

^{- 2006: $51,942 (2005:
S$2,052,088)}

^{* AMOUNT OWING TO
HOLDING COMPANY}

^{- 2006: S$15,055,661
(2005: S$21,476,619)}

^{* AMOUNT OWING TO
ASSOCIATED COMPANY}

^{- 2006: NIL (2005:
S$110,691)}

^{* FELLOW SUBSIDIARY
COMPANY}

^{- 2006: S$563,178 (2005:
S$136,864)}

^{* RELATED COMPANY}

^{- 2006: S$7,740 (2005:
S$2,820)}

^{IN THE LONG TERM,
SUBJECT INCURRED DEFFERED TAXATION OF S$36,876}

^{(2005: S$70,638).}

^{IN ALL, LEVERAGE RATIO FELL FROM 4.25 TIMES
TO 2.75 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 WITH THE RISE} ^{IN NET WORKING CAPITAL AND CHANGES IN LIQUIDITY RATIOS. CURRENT
RATIO} ^{ROSE TO 1.29 TIMES, UP FROM 1.16 TIMES AND QUICK RATIO FELL TO
1.06} ^{TIMES FROM 1.08 TIMES IN 2005. NET WORKING CAPITAL ROSE BY
21.70% FROM} ^{S$4,005,828 IN 2005 TO S$4,874,922 IN 2006.}

^{CASH AND CASH
EQUIVALENTS COMPRISES OF:}

^{* FIXED DEPOSITS - 2006: S$250,000 (2005: S$250,514)}

^{* CASH AND BANK BALANCES
- 2006: S$4,848,573 (2005: S$13,942,284)}

^{PROFITABILITY:}

^{REVENUE POSTED A DECREASE OF 36.01% FROM
S$90,617,496 IN 2005 TO} ^{S$57,982,405 AND NET PROFIT FELL BY 39.12% TO S$1,142,955 (2005:} ^{S$1,877,426). HENCE, NET MARGIN FELL TO 1.97% (2005: 2.07%).}

^{DEBT SERVICING:}

^{DEBT SERVICING PROBLEMS MIGHT NOT BE EXPECTED
IF REVENUE AND EARNINGS} ^{CAN BE MAINTAINED AND PAYMENT BY TRADE DEBTORS ARE FORTHCOMING.}

^{THE AVERAGE COLLECTION PERIOD ROSE FROM 52.46
DAYS TO 80.50 DAYS. A} ^{HIGHER AVERAGE COLLECTION PERIOD POSES GREATER RISK OF TURNING
INTO} ^{BAD DEBTS. HOWEVER, IT IS STILL WORTH NOTING THAT DEBT
SERVICING} ^{ABILITY MAY NOT BE AFFECTED IF TRADE RECEIVABLES ARE
FORTHCOMING.}

BACKGROUND/OPERATION

^{THE COMPANY WAS
INCORPORATED IN THE REPUBLIC OF SINGAPORE ON} ^{20/01/2001 AS A LIMITED PRIVATE COMPANY
AND IS TRADING UNDER ITS} ^{PRESENT NAMESTYLE AS "FUJI MACHINE
MFG. (SINGAPORE) PTE. LTD.".}

^{THE COMPANY HAS AN
ISSUED AND PAID-UP CAPITAL OF} ^{2,986,600 SHARES, OF A VALUE OF S$2,986,600.}

^{PRINCIPAL ACTIVITIES:}

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

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

^{1) RENTING OF INDUSTRIAL
MACHINERY AND EQUIPMENT}

^{2) WHOLESALE OF
MACHINERY AND EQUIPMENT}

^{DURING THE FINANCIAL
YEAR(S), UNDER REVIEW, SUBJECT'S PRINCIPAL} ^{ACTIVITIES ARE THE SALES, SERVICING AND RENTAL OF INDUSTRIAL
MACHINER} ^{AND EQUIPMENT.}

^{THE COMPANY'S HOLDING
COMPANY OS SOJITZ CORPORATION, A COMPANY} ^{INCORPORATED IN JAPAN.}

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

^{THE COMPANY IS LISTED IN
THE SINGAPORE LOCAL DIRECTORIES UNDER THE}

^{CLASSIFICATION OF:
ELECTRONIC EQUIPMENT & SUPPLIES-DEALERS.}

^{SUBJECT ENGAGES IN THE
FOLLOWING ACTIVITIES:}

^{* SALES & SERVICES
FOR FUJI SURFACE MOUNT TECHNOLOGY MACHINE (SMT)}

^{PRODUCTS DEALINGS:}

^{* PLACING MACHINE}

^{* PRINTING MACHINE}

^{* SOFTWARE}

^{FROM THE TELE-INTERVIEW
CONDUCTED, SUBJECT PERSONNEL}

^{CONFIRMED ITS ADDRESS
AND CONTACTS. SUBJECT PERSONNEL ALSO REVEALED} ^{THAT THEY ARE ABOUT 20 EMPLOYEES. NO
OTHER TRADE INFORMATION WAS} ^AVAILABLE

^{NUMBER OF EMPLOYEES (31
DECEMBER):}

^{* COMPANY - 2006: NOT
AVAILABLE (2005: NOT AVAILABLE)}

^{REGISTERED AND BUSINESS
ADDRESS:}

^{51 UBI AVENUE 1}

^#01-24

^{PAYA UBI INDUSTRIAL PARK}

^{SINGAPORE 408933}

^{DATE OF CHANGE OF
ADDRESS: 21/04/2001}

^{- RENTED PREMISE}

^{- PREMISE OWNED BY: PAYA
UBI INDUSTRIAL PARK PTE LTD}

^{WEBSITE : -}

^{EMAIL :
-}

MANAGEMENT

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

^{1) TATSUYUKI SHIMIZU, A
JAPANESE}

^{- BASED IN SINGAPORE.}

^{2) EIJI OCHI, A JAPANESE}

^{- BASED IN SINGAPORE.}

^{3) FUKASE SHINICHI, 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 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%)

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