MIRA INFORM REPORT

Report Date :

01.07.2008

IDENTIFICATION DETAILS

Name :	MARUBENI CHEMICAL ASIA PACIFIC PTE LTD
Registered Office :	^16 Raffles Quay #13-01 Hong Leong Building ^048581
Country :	Singapore
Financials (as on) :	31.12.2006
Date of Incorporation :	^26.02.1996
Com. Reg. No.:	^199601351Z
Legal Form :	^Pte Ltd
Line of Business :	Trading of Various Chemical Products, Plastic Resin and related Materials

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

MARUBENI CHEMICAL ASIA PACIFIC PTE LTD

Line Of Business 

TRADING OF VARIOUS CHEMICAL PRODUCTS, PLASTIC RESIN AND RELATED MATERIALS

Parent Company

MARUBENI CORPORATION

(PERCENTAGE OF SHAREHOLDINGS: 80.00%)

Financial Elements

FY 2006

COMPANY

Sales : US$ 747,807,124

Networth : US$ 5,318,096

Paid-Up Capital : US$ 1,066,050

Net result : US$ 1,024,962

Net Margin(%) : 0.14

Return on Equity(%) : 19.27

Leverage Ratio : 15.97

COMPANY IDENTIFICATION

^{Subject Company : MARUBENI CHEMICAL ASIA PACIFIC PTE LTD}

^{Former Name : -}

^{Business Address : 16 RAFFLES QUAY}

^#13-01

^{HONG LEONG BUILDING}

^{Town : SINGAPORE}

^{Postcode : 048581}

^{Country : Singapore}

^{Telephone : 6323 7226/6227 6056}

^{Fax : 6221 9856/6324 0123}

^{ROC Number : 199601351Z}

^{Reg. Town : -}

SUMMARY

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

^{Legal Form : Pte Ltd}

^{Date Inc. : 26/02/1996}

^{Previous Legal Form : -}

^{Summary year : 31/12/2006}

^{Sales : 747,807,124}

^{Networth : 5,318,096}

^{Capital : -}

^{Paid-Up Capital : 1,066,050}

^{Employees : 38}

^{Net result : 1,024,962}

^{Share value : 1}

^{Auditor : ERNST & YOUNG}

^{BASED ON ACRA'S RECORD}

^{NO OF SHARE CURRENCY AMOUNT}

^{ISSUED ORDINARY 1,500,000 SGD 1,500,000.00}

^{PAID-UP ORDINARY - SGD 1,500,000.00}

REFERENCES

^{Litigation : No}

^{Company status : TRADING}

^{Started : 26/02/1996}

PRINCIPAL(S)

^{SUSUMU UENO Managing Director}

DIRECTOR(S)

^{UENO SUSUMU SE9549155 Managing Director}

^{Appointed on : 01/04/2007}

^{Street : 2 RIDGEWOOD CLOSE}

^{13-04 HIMIKO COURT}

^{Town: SINGAPORE}

^{Postcode: 1027}

^{Country: Singapore}

^{UENO SUSUMU SE9549155 Director}

^{Appointed on : 01/04/2007}

^{Street : 2 RIDGEWOOD CLOSE}

^{13-04 HIMIKO COURT}

^{Town: SINGAPORE}

^{Postcode: 1027}

^{Country: Singapore}

^{SUSUMU UENO Director}

^{Appointed on : 03/07/2007}

^{Street : 491A RIVER VALLEY ROAD}

^{#07-10 VALLEY POINT}

^Town:

^{Postcode: 248372}

^{Country: Singapore}

^{HIROTSUGU UCHIDA Director}

^{Appointed on : 01/04/2008}

^{Street : 20-9 KAMIYASUMATSU,}

^{TOKOROZAWA-SHI}

^{Town: SAITAMA}

^{Postcode: 359-0025}

^{Country: Japan}

^{CHIHIRO SHIKAMA Director}

^{Appointed on : 01/04/2008}

^{Street : 11 UNITY STREET}

^#04-10

^Town:

^{Postcode: 237995}

^{Country: Singapore}

^{JUN KAKIZOE Director}

^{Appointed on : 01/04/2008}

^{Street : 60 HAVELOCK ROAD}

^#04-11

^Town:

^{Postcode: 169658}

^{Country: Singapore}

^{TETSUAKI SAITO TF2716568 Director}

^{Appointed on : 01/04/2006}

^{Street : 2-5-19-402, SEKIGUCHI}

^BUNKYO-KU

^{Town: TOKYO}

^{Postcode: 112-0014}

^{Country: Japan}

^{MITSURU INAMURA G5835276X Company Secretary}

^{Appointed on : 06/12/2006}

^{Street : 475 RIVER VALLEY ROAD}

^#16-04

^{VALLEY PARK}

^{Town: SINGAPORE}

^{Postcode: 248360}

^{Country: Singapore}

^{MASAYASU KAWASAKI TG7775226 Director}

^{Appointed on : 01/04/2007}

^{Street : 2-23-15-504, TSURUMAKI}

^SETAGAYA-KU

^{Town: TOKYO}

^{Postcode: 154-0016}

^{Country: Japan}

^{HIROAKI MIYACHI TH1317986 Director}

^{Appointed on : 01/04/2007}

^{Street : 3-16-1-1013, YAMAMOTODAI}

^{TAKARAZUKA-SHI}

^{Town: HYOGO}

^{Postcode: 665-0885}

^{Country: Japan}

FORMER DIRECTOR(S)

^{YVONNE CHOO S0090447C}

^{CHIA LUANG CHEW HAZEL S1407126A}

^{KIYOSHI KOBAYASHI TZ0147818}

^{TAKASHI YAMAGUCHI MP0308537}

^{RYOICHI MURAKAMI MQ3137916}

^{SHOGOG TAKAHASHI TE8547695}

^{TAMOTSU SEI F0409341X}

^{YASUTO TAMAI F2303985X}

^{YOSHIHIRO KITAHARA G5699003N}

^{KAZUMASA YAMAMOTO G5699010R}

^{MASAYA TAKADA TF5220777}

^{HIDEO TOKUYA TZ6043901}

^{HIROTO ONODA G5699008P}

^{TADASHI HIROE TE1937829}

^{HIDEAKI OSAWA TF1621632}

^{MASAHARU NASHIMOTO G5589290W}

^{HISASHI SUNAOSHI G0462368T}

^{KOJI SHIBATA TG3105452}

^{SUSUMU UENO TH2777059}

^{KOJI AOKI F2678347W}

ACTIVITY(IES)

^{RESINS Code:18420}

^{CHEMICALS Code:3970}

^{PLASTIC PRODUCTS Code:16940}

^{TRADING COMPANIES Code:22190}

^{BASED ON ACRA'S RECORD}

^{1) MANUFACTURE OF POLYMERS}

CHARGES

No Charges On Premises/Property In Our Database

PREMISES/PROPERTY INFORMATIONS

No Premises/Property Information In Our Databases

BANKERS

^{MIZUHO CORPORATE BANK, LTD}

SHAREHOLDERS(S)

^{MARUBENI SINGAPORE PTE LTD 300,000 Company}

^{Street : 16 RAFFLES QUAY}

^#13-00

^{HONG LEONG BUILDING}

^{Town: SINGAPORE}

^{Postcode: 048581}

^{Country: Singapore}

^{MARUBENI CORPORATION 1,200,000 Company}

^{Street : 4-2 OHTEMACHI 1-CHOME}

^CHIYODA-KU

^{Town: TOKYO}

^{Postcode: 100-8088}

^{Country: Japan}

FORMER SHAREHOLDER(S)

^{YVONNE CHOO 1}

^{CHIA LUANG CHEW HAZEL 1}

^{MARUBENI CHEMIX CORPORATION 75,000}

HOLDING COMPANY

^{MARUBENI CORPORATION UF23622Z % : 80.00}

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

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

^{Date Account Lodged: 18/07/2007}

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

^{Number of weeks: 52 52}

^{Consolidation Code: COMPANY COMPANY}

^{--- ASSETS ---}

^{Tangible Fixed Assets: 111,887 182,709}

^{Investments 31,979 33,812}

^{Total Fixed Assets: 143,866 216,521}

^{Inventories: 241,242 145,562}

^{Receivables: 88,858,996 79,490,672}

^{Cash,Banks, Securitis: 31,668 393,592}

^{Other current assets: 991,711 715,726}

^{Total Current Assets: 90,123,617 80,745,552}

^{TOTAL ASSETS: 90,267,483 80,962,073}

^{--- LIABILITIES ---}

^{Equity capital: 1,066,050 1,066,050}

^{Profit & lost Account: 4,252,046 6,577,084}

^{Total Equity: 5,318,096 7,643,134}

^{Trade Creditors: 69,353,439 46,032,301}

^{Advanced payments: 398,629 847,137}

^{Provisions: 434,045 532,400}

^{Other Short term Liab.: 13,673,563 25,582,524}

^{Prepay. & Def. charges: 1,089,711 324,577}

^{Total short term Liab.: 84,949,387 73,318,939}

^{TOTAL LIABILITIES: 84,949,387 73,318,939}

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

^{Net Sales 747,807,124 801,695,441}

^{Purchases,Sces & Other Goods: 720,491,318 772,352,976}

^{Gross Profit: 27,315,806 29,342,465}

^{Result of ordinary operations 3,032,795 3,371,796}

^{NET RESULT BEFORE TAX: 1,504,470 2,230,934}

^{Tax : 479,508 504,607}

^{Net income/loss year: 1,024,962 1,726,327}

^{Interest Paid: 741,310 667,697}

^{Depreciation: 70,822 79,776}

^{Directors Emoluments: 612,851 424,490}

^{Wages and Salaries: 1,779,000 1,466,343}

^{Financial Income: 29 126}

RATIOS

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

^{Turnover per employee: 19679134.84 21097248.45}

^{Net Margin(%): 0.14 0.22}

^{Return on Equity(%): 19.27 22.59}

^{Return on Assets(%): 1.14 2.13}

^{Net Working capital: 5174230.00 7426613.00}

^{Cash Ratio: 0.00 0.01}

^{Quick Ratio: 1.05 1.09}

^{Current ratio: 1.06 1.10}

^{Receivables Turnover: 42.78 35.70}

^{Leverage Ratio: 15.97 9.59}

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

^{NET WORTH:}

^{THE BALANCE SHEET WAS CONSIDERED PASSABLE WITH NET WORTH DECREASING BY 30.42% AMOUNTING TO US$5,318,096 (2005: US$7,643,134). THIS WAS CONTRIBUTED BY LOWER REVENUE RESERVES OF US$4,252,046 (2005: US$6,577,084), A DROP OF 50.66% FROM THE PRIOR FINANCIAL YEAR.}

^LEVERAGE:

^{IN THE SHORT-TERM, SUBJECT WAS LARGELY FINANCED BY TRADE CREDITORS WHICH MADE UP 81.64% (2005: 62.78%) OF THE TOTAL CURRENT LIABILITIES AND AMOUNTED TO US$69,353,439 (2005: US$46,032,301). THE BREAKDOWN WAS}

^{AS FOLLOWS:}

^{*HOLDING COMPANY - 2006: US$13,698,386 (2005: US$10,308,155)}

^{*RELATED COMPANIES - 2006: US$4,697,127 (2005: US$505,386)}

^{*OTHER TRADE ACCOUNTS PAYABLE AND ACCRUALS - 2006: US$50,957,926}

^{(2005: US$35,218,760)}

^{LEVERAGE RATIO INCREASED TO 15.97 TIMES (2005: 9.59 TIMES) AS A RESULT OF A RISE IN TOTAL LIABILITY AND A DROP IN TOTAL EQUITY. A LOWER RATIO WOULD BE MORE DESIRABLE AS THE LOWER THE RATIO, THE GREATER THE FINANCIAL SAFETY AND OPERATING FREEDOM FOR THE COMPANY.}

^LIQUIDITY:

^{THE OVERALL LIQUIDITY OF THE COMPANY WAS FAIRLY HEALTHY EVEN THOUGH NET WORKING CAPITAL FELL BY 30.33% TO US$5,174,230 (2005: US $7,426,613).}

^{BOTH CURRENT AND QUICK RATIOS WERE SUFFICIENT AT 1.06 TIMES (2005: 1.10 TIMES) AND 1.05 TIMES (2005: 1.09 TIMES) RESPECTIVELY.}

^{PROFITABILITY:}

^{REVENUE FOR FY2006 FELL BY 6.72% AMOUNTING TO US$747,807,124 (2005: US$801,695,441). THIS WAS IN TANDEM WITH THE NET INCOME, WHICH FELL BY 40.63% TOTALLING US$1,024,962 (2005: US$1,726,327). AS A RESULT, NET MARGIN STOOD LOWER AT 0.14% (2005: 0.22%).}

^{SALES COMPRISED OF:}

^{*SALES OF GOODS - 2006: US$747,260,376 (2005: US$801,420,015)}

^{*COMMISSION INCOME - 2006: US$546,748 (2005: US$275,426)}

^{DEBT SERVICING:}

^{DEBT SERVICING PROBLEMS MIGHT NOT BE ANTICIPATED IN VIEW OF THE SUFFICIENT LIQUIDITY OF THE COMPANY AND IF TRADE RECEIVABLES WERE FORTHCOMING.}

^{IN ADDITION, AVERAGE COLLECTION PERIOD HAS LENGTHENED TO}

^{43 DAYS (2005: 36 DAYS).}

^{NOTES TO THE FINANCIAL STATEMENTS:}

^{CONTINGENT LIABILITY}

^{UNDER THE PROVISIONS OF INDIA-SINGAPORE COMPREHENSIVE ECONOMIC COOPERATION AGREEMENT ("ISCECA"), IMPORTERS IN INDIA CAN CLAIM CUSTOM DUTY CONCESSION IN RESPECT OF GOODS THAT ORIGINATE FROM SINGAPORE.}

^{DURING THE YEAR, THE COMPANY SOLD CERTAIN GOODS TO CUSTOMERS IN INDIA WHICH WERE OF NON-SINGAPORE ORIGIN, HOWEVER, THESE GOODS WERE DECLARED TO BE OF SINGAPORE ORIGIN AND HENCEFORTH, WERE NOT SUBJECT TO A 12.5% IMPORT DUTY. THE COMPANY HAS SINCE TAKEN ACTION TO RECTIFY THE ERROR AND HAS ALSO VOLUNTARILY DISCLOSED THE INCIDENT TO THE SINGAPORE CUSTOMS AUTHORITY. THE COMPANY HAS MADE AN ACCRUAL FOR THE FULL SUM OF THE CUSTOM DUTIES NAD OTHER RELATED DUTIES. THE DIRECTORS BELIEVE THAT THERE SHOULD BE NO OTHER ADVERSE IMPACT WHICH WILL ADVERSELY AFFECT THE FINANCIAL POSITION OF THE COMPANY.}

^{IN THE OPINION OF THE DIRECTORS AS THE OUTCOME FROM BOTH THE INDIA AND SINGAPORE AUTHORITIES ARE UNCERTAIN, ACCORDINGLY, NO FURTHER PROVISION HAS BEEN MADE IN THE FINANCIAL STATEMENTYS IN RESPECT THEREOF.}

BACKGROUND/OPERATION

^{THE COMPANY WAS INCORPORATED IN THE REPUBLIC OF SINGAPORE ON 26/02/1996 AS A LIMITED PRIVATE COMPANY AND IS TRADING UNDER ITS PRESENT NAMESTYLE AS "MARUBENI CHEMICAL ASIA PACIFIC PTE LTD".}

^{TEH COMPANY HAS AN ISSUED AND PAID-UP CAPITAL OF 1,500,000 SHARES OF A VALUE OF S$1,500,000.}

^{PRINCIPAL ACTIVITIES:}

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

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

^{1) MANUFACTURE OF POLYMERS}

^{THE COMPANY IS LISTED IN THE SINGAPORE LOCAL DIRECTORY UNDER THE CLASSIFICATION OF: TRADING COMPANIES.}

^{DURING THE FINANCIAL YEAR(S), UNDER REVIEW, SUBJECT'S PRINCIPAL ACTIVITY IS TO ENGAGE IN THE TRADING OF VARIOUS CHEMICAL PRODUCTS, PLASTIC RESIN AND RELATED MATERIALS.}

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

^ACTIVITIES:

^{* TRADING OF PLASTIC RESINS, SPECIALTY CHEMICALS, ORGANIC AND SYNTHETIC FIBER INTERMEDIATES. PRODUCTS INCLUDE VARIOUS CHEMICALS SUCH AS ORGANIC CHEMICALS/ INORGANIC CHEMICALS, SYNTHETIC FIBER INTERMEDIATES AND SPECIALTY CHEMICALS, INCLUDING EXPORT-IMPORT BUSINESS, OFF-SHORE TRADE.}

^PRODUCTS:

^PLASTICS:

^{* POLYOLEFINS}

^{- LDPE (LOW DENSITY POLYETHYLENE)}

^{- EVA (ETHYLENE VINYL ACETATE COPOLYMER)}

^{- LLDPE (LINEAR LOW DENSITY POLYETHYLENE)}

^{- HDPE (HIGH DENSITY POLYETHYLENE)}

^{- PP (POLYPROPYLENE) HOMOPOLYMER, RANDOM COPOLYMER, BLOCK COPOLYMER,}

^TERPOLYMER

^{- ALPHA-OLEFIN COPOLYMER}

^{* STYRENE RESINS}

^{- PS (POLYSTYRENE) GENERAL PURPOASE, HIGH IMPACT}

^{- EPS (EXPANDABLE POLYSTYRENE)}

^{- ABS (ACRYLONITRILE BUTADIENE STRYRENE COPOLYMER)}

^{- AS (ACRYLONITRILE STYRENE, SAN)}

^{- AES (ACRYLONITRILE ETHYLENE STYRENE)}

^{- ASA (ACRYLONITRILE STYRENE ACRYLATE)}

^{* ENGINEERING PLASTICSPC (POLYCARBONATE)}

^{- POM (POLYACETAL)}

^{- PA (POLYAMIDE, NYLON)}

^{- PBT (POLYBUTYLENETEREPHTHALATE)}

^{- PPE (POLYPHENYLENE ETHER, PPO = POLYPHENYLENE OXIDE)}

^{- PMMA (POLYMETHYLMETHACRYLATE)}

^{- LCD (LIQUID CRYSTAL POLYMER)}

^{- PTFE (POLYTETRAFLUOROETHYLENE)}

^{* PLASTIC PRODUCTS}

^{- ONF (BIAXIALLY ORIENTED NYLON FILM)}

^{- BOPP FILM (BIAXIALLY ORIENTED POLYPROPYLENE FILM)}

^{- PA (POLYAMIDE, NYLON)}

^{- CPP FILM (CAST POLYPROPYLENE FILM)}

^{- PE BAGS (POLYETHYLENE BAGS)}

^CHEMICALS:

^{* BASIC CHEMICALS}

^{- OLEFINS (ETHYLENE, PROPYLENE, BUTADIENE, BUTENE-1, HEXENE-1,}

^{ISOBUTANE, NORMAL HEXENE, ETC.)}

^{- AROMATICS (BENZENE, STYRENE MONOMER, ETC.)}

^{- SYNTHETIC FIBER RAW MATERIALS (PARAXYLENE, MONOETHYLENE GLYCOL,}

^{CAPROLACTAM, ETC.)}

^{- VCM (VYNYL CHLORIDE MONOMER)}

^{* PRODUCTS CHEMICALS}

^{- PVA (POLYVINYL ALCOHOL)}

^{- ACRYLATES (ACRYLIC ACID, BUTYL ACRYLATE, ETHYL ACRYLATE, METHYL}

^{ACRYLATE, ETC.)}

^{- ETHYLENE AMINS (EDA, DETA, TETA, ETC.)}

^{- POLYURETHANE RAW MATERIAL (ADIPIC ACID, PPG, SILICONE SURFACTANT,}

^{AMINE CATALIST, TIN CATALIST)}

^{- POLYURETHANE SYSTEMS}

^{* SPECIALTY CHEMICALS}

^{- OLEOCHEMICALS (FATTY ACID, GLYCERINE, ETC.)}

^{- PLASTIC RELATED MATERIALS (INITIATOR, CATALYST, ADDITIVES, ETC.)}

^{- ELECTRONIC MATERIALS (OPTICAL DISK RELATED MATERIALS, LCP RELATED}

^{MATERIALS, ETC.)}

^MARKETS:

^{* POLYOLRFINS}

^{* OLEFINS}

^{* CRUDE OIL & NAPHTHA}

^{TERMS OF PAYMENT:}

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

^{* TRADE AND OTHER ACCOUNTS PAYABLES : 14-90 DAYS TERM}

^{NUMBER OF EMPLOYEES (31 DECEMBER):}

^{* COMPANY - 2005: 38 (2004: 36; 2003: 38; 2002: 41; 2001: 43)}

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

^{* SINGAPORE INTERNATIONAL CHAMBERS OF COMMERCE}

^{* SINGAPORE PLASTIC INDUSTRY ASSOCIATION}

^{NO OTHER TRADE INFORMATION WAS AVAILABLE AS TELE-INTERVIEW WAS NOT GRANTED BY SUBJECT'S PERSONNEL}

^{THE IMMEDIATE AND ULTIMATE HOLDING COMPANY IS MARUBENI CORPORATION WHICH IS INCORPORATED IN JAPAN.}

^{REGISTERED AND BUSINESS ADDRESS:}

^{16 RAFFLES QUAY}

^#13-01

^{HONG LEONG BUILDING}

^{SINGAPORE 048581}

^{DATE OF CHANGE OF ADDRESS: 01/06/2007}

^WEBSITE:

^{www.marubeni.com (HOLDING COMPANY'S)}

^{www.mcap.com.sg}

^EMAIL:

^{segawa-i@sgr.marubeni.com.jp}

^{MCAP-eSales@marubeni.com}

MANAGEMENT

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

^{1) CHIHIRO SHIKAMA, A JAPANESE}

^{- BASED IN SINGAPORE.}

^{2) SUSUMU UENO, A JAPANESE}

^{- BASED IN SINGAPORE.}

^{3) JUN KAKIZOE, A JAPANESE}

^{- BASED IN SINGAPORE.}

^{4) TETSUAKI SAITO, A JAPANESE}

^{- BASED IN JAPAN.}

^{5) HIROTSUGU UCHIDA, A JAPANESE}

^{- BASED IN JAPAN.}

^{6) MASAYASU KAWASAKI, A JAPANESE}

^{- BASED IN JAPAN.}

^{7) HIROAKI MIYACHI, 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.

MANUFACTURING SECTOR

PAST PERFORMANCE

THE MANUFACTURING SECTOR ROSE BY 0.2% IN 4Q 2007, SLOWER THAN THE 11.0% IN 3Q 2007. THE SMALL GROWTH WAS ATTRIBUTED TO A 28.0% CONTRACTION IN THE BIOMEDICAL MANUFACTURING CLUSTER. ON THE OTHER HAND, ELECTRONICS, CHEMICALS, PRECISION ENGINEERING AND TRANSPORT ENGINEERING CLUSTER PERFORMED BETTER. THE GENERAL MANUFACTURING INDUSTRIES CLUSTER SAW A MORE MODERATE PERFORMANCE.

OVERALL, THE MANUFACTURING SECTOR POSTED A 5.8% GROWTH IN 2007, DOWN FROM 12.0% IN 2006. THE TRANSPORT ENGINEERING CLUSTER CONTINUED TO GROW AT A ROBUST PACE WHILE THE ELECTRONICS, CHEMICALS AND GENERAL MANUFACTURING INDUSTRIES CLUSTERS REGISTERED MORE MODEST INCREASES. HOWEVER, THE BIOMEDICAL MANUFACTURING CLUSTER RECORDED A MARGINAL DECLINE.

THE TRANSPORT ENGINEERING CLUSTER CONTINUED TO RECORD STRONG GROWTH OF 24.0% IN 2007 COMPARED TO 32.0% IN 2006. WITHIN THE SECTOR, THE MARINE AND OFFSHORE ENGINEERING SEGMENT GREW SUBSTANTIALLY BY 32.0% AS CONTRACTS INCREASED FOR SHIP BUILDING, SHIP CONVERSION, SHIP REPAIRING AND OIL RIG FABRICATION. THE AEROSPACE SEGMENT GREW BY 9.6% WHICH IS ATTRIBUTED TO A HIGHER VOLUME IN REPAIRS OF COMMERCIAL AIRCRAFT FUELLED BY THE BOOM IN LOW COST AIR TRAVEL. THE LAND TRANSPORT SEGMENT GREW 19.0% ON THE BACK OF HIGHER EXPORT ORDERS.

THE ELECTRONICS CLUSTER ROSE BY 4.0%, DOWN FROM 4.5% IN 2006. THE PRODUCTION OF

SEMICONDUCTORS GREW 16.0% WITH INCREASED PRODUCTION OF AND FLASH AND DRAMS WHILE THE PRODUCTION OF ELECTRONIC MODULES AND COMPONENTS GREW 7.0% AS COMPARED TO 2006.

ON THE OTHER HAND, LOWER OUTPUT WERE SEEN IN THE COMPUTER PERIPHERALS (-20.0%), INFOCOMMS AND CONSUMER ELECTRONICS (-7.7%) AND DATA STORAGE SEGMENTS (-1.6%). THE DECLINE IN THE DATA STORAGE SEGMENT MODERATED AS THE HIGHER OUTPUT OF DISK MEDIA OFFSET THE FALL IN DISK DRIVES PRODUCTION.

THE CHEMICALS CLUSTER EXPANDED BY 3.3% IN 2007, HIGHER THAN THE 1.7% IN 2006. THE PETROCHEMICALS AND SPECIALTY CHEMICALS SEGMENT ROSE BY 5.4% AND 6.5% RESPECTIVELY.

HOWEVER, THESE EXPANSIONS WERE MODERATED BY A 0.2% DIP IN OUTPUT OF REFINED PETROLEUM PRODUCTS, DUE TO SOME REFINERY PLANT MAINTENANCE SHUTDOWNS DURING THE YEAR.

THE PRECISION ENGINEERING CLUSTER REGISTERED FLAT OUTPUT GROWTH IN 2007. THE 6.5% GROWTH IN THE MACHINERY AND SYSTEMS SEGMENT WAS OFFSET BY A 4.3% DECLINE IN THE PRECISION MODULES AND COMPONENTS SEGMENT. PRODUCTION OF PRECISION COMPONENTS, SPRINGS, METAL STAMPINGS, DIES AND MOULDS FELL WHILE OUTPUT OF MACHINERY – SUCH AS HOISTS, LIFTING MACHINERY, REFRIGERATING MACHINERY, INDUSTRIAL PROCESS CONTROL EQUIPMENT, SWITCHGEAR AND SWITCHBOARDS ROSE.

THE BIOMEDICAL MANUFACTURING CLUSTER FELL BY 0.6%. ALTHOUGH THE MEDICAL TECHNOLOGY SEGMENT ROSE 15.0%, THE CLUSTER WAS DRAGGED DOWN BY A 2.5% DECLINE IN THE PHARMACEUTICALS SEGMENT. PLANT MAINTENANCE SHUTDOWNS AND CHANGES IN PRODUCT MIX RESULTED IN A SIGNIFICANT DECLINE IN ACTIVE PHARMACEUTICAL INGREDIENTS PRODUCTION IN 4Q 2007.

THE GENERAL MANUFACTURING INDUSTRIES GREW BY 6.3%, SIMILAR TO 2006. THE FOOD, BEVERAGES AND TOBACCO SEGMENT REGISTERED A STRONG 11% INCREASE IN OUTPUT, WHILE THE PRINTING SEGMENT GREW BY A MORE MODEST 2.4% OVER THE YEAR.

NEWS

SINGAPORE DRAWS S$3 BILLION OF MANUFACTURING INVESTMENTS

DESPITE CURRENT GLOBAL ECONOMIC JITTERS, INVESTMENT INFLOWS HERE REMAIN STRONG. IN THE FIRST FEW MONTHS OF 2008, SINGAPORE HAS ALREADY ATTRACTED MORE THAN S$3 BILLION OF MANUFACTURING INVESTMENTS.

ADDING A WHIFF OF FRESH AIR TO THE LIFESTYLE PRODUCTS AND SERVICES AREA – ANOTHER NEW CLUSTER SINGAPORE IS TRYING TO GROW – US CONSUMER GOODS GIANT PROCTER & GAMBLE HAS JUST OPENED ITS FIRST PERFUME PLANT IN ASIA AT TUAS, WHERE IT IS CAPITALISING ON THE HEIGHTENED “NOSES” OF ITS SINGAPORE TALENT TO HELP TAILOR-MAKE “ASIANISED” PRODUCTS.

EDB MANAGING DIRECTOR KO KHENG HWA SAID THAT SOME OF THE PROJECTS INJECT NEW CAPABILITIES AND STRENGTHEN THEIR EXISTING CLUSTERS – SUCH AS ROLLS-ROYCE’S AIRCRAFT ENGINE MANUFACTURING FACILITY, P&G’S SPECIALTY PERFUME PLANT AND LANXESS’S ADVANCED RUBBER FACILITY. OTHERS BUILD NEW GROWTH ENGINES FOR THE FUTURE – SUCH AS NORSUN’S HIGH-END SOLAR WAFER PLANT, UBISOFT’S 300-STRONG GAMES DEVELOPMENT STUDIO AND NESTE OIL’S NEXT-GENERATION BIODIESEL PLANT. THE NEW GROWTH SECTORS WILL ALSO DIVERSIFY SINGAPORE’S INDUSTRIAL BASE AND INCREASE SINGAPORE’S RESILIENCY TO WEATHER BUSINESS CYCLES.

LOOKING AHEAD, MR KO SAID THAT EDB IS ALSO MOUNTING A NEW INITIATIVE CALLED “FUTURE.SINGAPORE” TO BUILD ACTIVITY WITHIN SELECTED BUSINESS THEMES WHERE SINGAPORE WANTS GOOD SOLUTIONS. THESE THEMES INCLUDE URBAN SOLUTIONS,

WELLNESS, AGEING, AND HEALTHCARE AND LIFESTYLE PRODUCTS.

OUTLOOK

THE MANUFACTURING SECTOR IS CAUTIOUS ABOUT BUSINESS CONDITIONS FOR THE PERIOD ENDING JUNE 2008. A NET WEIGHTED BALANCE OF 2% OF MANUFACTURERS FORECAST BETTER BUSINESS, LOWER THAN THE 7% REGISTERED IN THE SAME PERIOD LAST YEAR AND THE 25% RECORDED IN THE PREVIOUS QUARTER.

IN THE TRANSPORT ENGINEERING CLUSTER, A NET WEIGHTED BALANCE OF 11.0% OF FIRMS EXPECTS THE BUSINESS CLIMATE TO IMPROVE IN THE MONTHS ENDING JUNE 2008, LOWER THAN THE 33.0% OBSERVED IN THE PRECEDING QUARTER. THE MARINE AND OFFSHORE ENGINEERING SEGMENT FORESEES SUBSTAINED DEMAND FOR SHIPYARD AND CONVERSION SERVICES, AND A STRONG BACKLOG OF ORDERS. THE AEROSPACE SEGMENT FORECASTS MORE REPAIR AND SERVICING JOBS IN 1Q 2007 AS AIRLINES SEND IN THEIR PLANES FOR MAINTENANCE FOLLOWING THE PEAK TRAVELLING PERIOD IN DECEMBER.

IN THE CHEMICALS CLUSTER, MAJORITY OF FIRMS IN THE CHEMICALS CLUSTER EXPECT BUSINESS CONDITIONS TO REMAIN THE SAME FOR THE FIRST HALF OF 2008, COMPARED WITH THE PREVIOUS QUARTER. A NET WEIGHTED BALANCE OF 6.0% OF FIRMS EXPECTS THE BUSINESS CLIMATE TO IMPROVE, COMPARED WITH 22% RECORDED IN THE PRECEDING QUARTER. THE SPECIALTIES AND OTHER CHEMICALS SEGMENTS EXPECT OUTPUT TO RISE IN 1Q 2008 OVER THE PREVIOUS QUARTER, DUE TO AN EXPECTED RISE IN EXPORTS AND ORDERS. REFINERIES AND PETROCHEMICAL MANUFACTURERS EXPECT THROUGHPUT IN 1Q 2008 TO STAY AT LEVELS SIMILAR TO THOSE IN 4Q 2007.

THE ELECTRONICS CLUSTER IS MUTED WITH A NET WEIGHTED BALANCE OF 1.0% OF FIRMS EXPECTING BETTER BUSINESS AHEAD, SIGNIFICANTLY LOWER THAN THE 33.0% RECORDED IN THE PRECEDING QUARTER. SEASONAL DEMAND FOR ELECTRONIC GOODS IS EXPECTED TO SOFTEN AFTER THE YEAR END FESTIVE PEAK, AND A GENERAL DECELERATION IS NOT EXPECTED ALTHOUGH FIRMS FORECAST GLOBAL DYNAMICS TO CONTINUE EXERTING COMPETITIVE PRESSURES ON THE CLUSTER. NEVERTHELESS, A NET WEIGHTED BALANCE OF 5.0% OF FIRMS EXPECT PRODUCTION TO RISE IN 1Q 2008, OVER THE PREVIOUS QUARTER, IN TANDEM WITH THEIR FORECASTS FOR DIRECT EXPORTS AND ORDERS.

THE BIOMEDICAL MANUFACTURING CLUSTER IS EXPECTING BUSINESS OUTLOOK TO REMAIN THE SAME. A NET WEIGHTED BALANCE OF 0.0% OF FIRMS EXPECT BUSINESS TO IMPROVE IN THE COMING MONTHS, COMPARED TO 22.0% A QUARTER AGO. IN THE PHARMACEUTICALS SEGMENT,

OUTPUT IS FORECASTED TO RISE IN 1Q 2008, AFTER A LULL IN THE PREVIOUS QUARTER.

ACCORDINGLY, FINISHED GOODS STOCKS ARE EXPECTED TO RISE IN THE SAME PERIOD, FOR EXPORT LATER IN THE YEAR.

IN THE PRECISION ENGINEERING CLUSTER, A NET WEIGHTED BALANCE OF 8.0% OF FIRMS FORECASTS BUSINESS CONDITIONS TO DETERIORATE IN THE FIRST HALF OF 2008, COMPARED TO THE 11.0% PREDICTING BETTER BUSINESS CONDITIONS IN THE PRECEDING QUARTER.

THIS IS ATTRIBUTED TO A SEASONAL SLOWDOWN, AS WELL AS RISING PRODUCTION AND RAW MATERIAL COSTS AND FLUCTUATIONS IN THE US DOLLAR. WHILE THE OUTPUT OF THE CLUSTER IS EXPECTED TO DECLINE ON A QUARTER-TO-QUARTER BASIS, A NET WEIGHTED BALANCE OF 5.0% OF FIRMS IN THE MACHINERY AND SYSTEMS SEGMENT EXPECTS HIGHER PRODUCTION ON THE BACK OF A FORECASTED RISE IN EXPORT ORDERS AND SHIPMENTS.

EXTRACTED FROM: MINISTRY OF TRADE AND INDUSTRY, SINGAPORE

THE BUSINESS TIMES

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.43.30
UK Pound	1	Rs.86.13
Euro	1	Rs.68.72

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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