MIRA INFORM REPORT

Report Date :

19.03.2008

IDENTIFICATION DETAILS

Name :	SOCOMEC UPS ASIA PTE. LTD.

Formerly Known As :	^{SOCOMEC SICON (FAR EAST) PTE LTD}

Registered Office :	^{31 UBI Road 1} ^#01-00 ^{Aztech Building}

Country :	Singapore

Financials (as on) :	31.12.2006

Date of Incorporation :	^16.10.1987

Com. Reg. No.:	^198703243E

Legal Form :	^{Pte Ltd}

Line of Business :	Importing and Dealing in Uninterruptibles, Ac Power Source and Technical Equipment and the Rendering of Technical Services

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 :	Exists

Subject Company

SOCOMEC UPS ASIA PTE. LTD.

Line Of Business

MPORTING AND DEALING IN UNINTERRUPTIBLES, AC POWER SOURCE AND

TECHNICAL EQUIPMENT AND THE RENDERING OF TECHNICAL SERVICES

Parent Company

SICON S.R.L.

(PERCENTAGE OF SHAREHOLDINGS: 51%)

Financial Elements

FY 2006

COMPANY

Sales : EURO 9,760,805

Networth : EURO 1,235,324

Paid-Up Capital : EURO 606,061

Net result : EURO 296,869

Net Margin(%) : 3.04

Return on Equity(%) : 24.03

Leverage Ratio : 3.92

COMPANY IDENTIFICATION

^{Subject
Company : SOCOMEC UPS
ASIA PTE. LTD.}

^{Former
Name :
SOCOMEC SICON (FAR EAST) PTE LTD}

^{Business
Address : 31 UBI ROAD 1}

^#01-00

^{AZTECH BUILDING}

^{Town :
SINGAPORE}

^{Postcode : 408694}

^{Country :
Singapore}

^{Telephone : 6745 7555}

^{Fax :
6458 7377}

^{ROC
Number :
198703243E}

^{Reg.
Town : -}

PREVIOUS IDENTIFICATION

^{SOCOMEC SICON (FAR
EAST) PTE LTD DATE OF CHANGE OF NAME:
20/02/2006}

SUMMARY

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

^{Legal
Form : Pte Ltd}

^{Date
Inc. :
16/10/1987}

^{Previous
Legal Form : -}

^{Summary
year :
31/12/2006}

^{Sales :
9,760,805}

^{Networth
:
1,235,324}

^{Capital :
-}

^{Paid-Up
Capital :
606,061}

^{Employees : 20}

^{Net
result :
296,869}

^{Share
value : 1}

^{Auditor :
ERNST & YOUNG}

^{BASED
ON ACRA'S}

^{NO. OF SHARES CURRENCY AMOUNT}

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

^{PAID-UP
ORDINARY - SGD 1,000,000}

REFERENCES

^{Litigation : Yes}

^{Company status : TRADING}

^{Started :16/10/1987}

PRINCIPAL(S)

^{PIERRE LOUIS
BERGER
G5718172P Managing Director}

DIRECTOR(S)

^{CARTER
MICHAEL PAUL 703041101
Director}

^{Appointed
on : 18/10/2000}

^{Street
:19
RUE JULES RATHGEBER}

^{Town :
STRABOURG}

^{Postcode : 67100}

^{Country : France}

^{RENATO
FRATTA C856245 Director}

^{Appointed
on : 21/01/2002}

^{Street
:
STRADA DELLE BEREGANE, 24}

^{Town : VICENZA}

^{Postcode : 36100}

^{Country : Italy}

^{ALAIN
DIDIER TSORBA
03KB53921 Director}

^{Appointed
on : 05/02/2002}

^{Street
: 1
ALLEE DES ROSSIGNOLS}

^{Town :
MONTLIGNON}

^{Postcode : 95680}

^{Country : France}

^{KIM
PASCAL MAURICE JULES
03VI39160 Director}

^{Appointed
on : 07/11/2003}

^{Street
: 3
RUE CHARLES SCHMIDT}

^{Town :
STRASBOURG}

^{Postcode : 67100}

^{Country : France}

^{GAUTIER
JEAN MARC FRANCOIS
F5619719L Director}

^{Appointed
on : 30/10/2004}

^{Street
: 27C
CHANCERY LANE}

^{CHANCERY
GROVE}

^{Town :
SINGAPORE}

^{Postcode : 309529}

^{Country : Singapore}

^{LIM
BEE ENG
S1626446F Company Secretary}

^{Appointed
on : 19/12/2005}

^{Street
: 289
BISHAN STREET 24}

^#16-17

^{Town :
SINGAPORE}

^{Postcode : 570289}

^{Country : Singapore}

^{PIERRE
LOUIS BERGER
G5718172P Director}

^{Appointed
on : 01/01/2007}

^{Street
: 76
GRANGE ROAD}

^#01-01

^{MANHATTAN MANSIONS}

^{Town :
SINGAPORE}

^{Postcode : 249580}

^{Country : Singapore}

^{PIERRE
LOUIS BERGER G5718172P Managing Director}

^{Appointed
on : 01/01/2007}

^{Street
: 76
GRANGE ROAD}

^#01-01

^{MANHATTAN MANSIONS}

^{Town :
SINGAPORE}

^{Postcode : 249580}

^{Country : Singapore}

FORMER DIRECTOR(S)

^{CHAN
CHEOW SIANG MARIA S0292849C}

^{KOH
TONG BUAY
S1394005C}

^{ORIO
GABRIELLE 247055F}

^{LEE
POH MENG
4646771}

^{FONG
SOW KHENG S2589406E}

^{MARQUAIRE
MARC ANDRE 00AE21791}

^{LIM
YEN LENG FLORENCE
S1349403G}

ACTIVITY(IES)

^{ENGINEERING
WORKS
Code:7880}

^{ELECTRIC
POWER PLANTS - EMERGENCY And STANDBY
Code:7490}

^{POWER
TRANSMISSION EQUIPMENT Code:17440}

^{BASED
ON ACRA'S RECORD}

^{1)
OTHER SERVICE ACTIVITIES;}

^{DISTRIBUTION
& ENGINEERING WORK FOR UNINTERRUPTIBLE POWER SUPPLY}

^INVERTERS

CHARGES

^{Date: 24/09/1991}

^{Comments
: CHARGE
NO :
9103989 (DISCHARGED)}

^{SECURED :
0.00 ALL MONIES OWING}

^{CHARGEE :
HONG LEONG FINANCE LIMITED}

PREMISES/PROPERTY INFORMATIONS

No Premises/Property Information In Our Databases

BANKERS

^{BNP PARIBAS}

^{DBS BANK LTD.}

ASSOCIATED COMPANY(IES)

^{SOCOMEC SICON HONG
KONG LTD Hong
Kong}

SHAREHOLDERS(S)

^{IMR
INTERNATIONAL S.A.
490,000 Company}

^{Street
: 3 PLACE D'ARGENT}

^{Town: LUXEMBOURG}

^{Postcode: L-2019}

^{Country: Italy}

^{SICON
S.R.L.
510,000 Company}

^{Street
: VIA DELLA TECNICA, 1}

^{Town: VILLAVERLA}

^{Postcode: 36030}

^{Country: Italy}

FORMER SHAREHOLDER(S)

^{NUOVA
SICON ELECTTRONICA S R L
408,000}

^{CHAN
CHEOW SIANG MARIA
200,000}

^{ORIO
GABRIELLE
80,000}

^{LEE
POH MENG 75,000}

^{FRATTA
RENATO
40,000}

HOLDING COMPANY

^{SICON S.R.L. UF24367W % :
51.00}

SUBSIDIARY(IES)

No Participation In Our Database

PAYMENT HISTORY AND EXPERIENCES

^{Trade
Morality :
AVERAGE}

^{Liquidity
:
SUFFICIENT}

^{Payments
: REGULAR}

^{Trend
:
UPWARD}

^{Financial
Situation : AVERAGE}

LITIGATION(S)

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

^{Case
Number: MCS14514/2001}

Defendant SOCOMEC UPS ASIA PTE. LTD. ROC # : 198703243E

FINANCIAL ELEMENTS

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

^{Date
Account Lodged:
01/08/2007}

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

^{Number
of weeks:
52 52}

^{Consolidation
Code: COMPANY COMPANY}

^---
ASSETS ^---

^{Tangible
Fixed Assets:
204,679
84,492}

^{Total Fixed Assets: 204,679 84,492}

^{Inventories: 1,442,945 622,282}

^{Receivables: 2,986,156 1,894,049}

^{Cash,Banks,
Securitis: 1,377,894 680,313}

^{Other
current assets:
65,443
85,582}

^{Total Current Assets: 5,872,438 3,282,226}

^{TOTAL ASSETS: 6,077,117 3,366,718}

^{---
LIABILITIES} ^---

^{Equity
capital:
606,061
606,061}

^{Profit
& lost Account: 629,263 332,394}

^{Total Equity: 1,235,324 938,455}

^{L/T
deffered taxes:
2,736 2,816}

^{Other
long term Liab.:
14,435
-}

^{Total L/T Liabilities: 17,171 2,816}

^{Trade
Creditors:
4,174,569
2,009,088}

^{Short
term liabilities:
6,981 -}

^{Advanced
payments:
107,651
46,583}

^{Provisions: 263,931 10,176}

^{Other
Short term Liab.:
11,385
11,718}

^{Prepay.
& Def. charges:
260,105
347,882}

^{Total short term Liab.: 4,824,622 2,425,447}

^{TOTAL LIABILITIES: 4,841,793 2,428,263}

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

^{Net
Sales
9,760,805
5,479,350}

^{Purchases,Sces
& Other Goods:
8,003,318 4,473,774}

^{Gross
Profit:
1,757,487
1,005,576}

^{NET
RESULT BEFORE TAX:
296,869
-194,312}

^{Tax
:
- -}

^{Net
income/loss year:
296,869
-194,312}

^{Interest
Paid:
5,797 -}

^{Depreciation: 51,870 42,130}

^{Directors
Emoluments: 35,892 77,695}

^{Wages
and Salaries:
712,912
423,943}

^{Financial
Income:
6,312 9,487}

RATIOS

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

^{Turnover
per employee: 488040.25 273967.50}

^{Net
result / Turnover(%): 0.03 -0.04}

^{Stock
/ Turnover(%): 0.15 0.11}

^{Net
Margin(%): 3.04 -3.55}

^{Return
on Equity(%): 24.03 -20.71}

^{Return
on Assets(%): 4.89 -5.77}

^{Net
Working capital: 1047816.00 856779.00}

^{Cash
Ratio: 0.29 0.28}

^{Quick
Ratio: 0.90 1.06}

^{Current
ratio: 1.22 1.35}

^{Receivables
Turnover: 110.14 124.44}

^{Leverage
Ratio: 3.92 2.59}

^{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}

^{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
OVERALL FINANCIAL CONDITION OF THE COMPANY WAS FAIR IN VIEW OF}

^{THE
FOLLOWING:}

^{NET WORTH:}

^{THE BALANCE SHEET
WAS PASSABLE WITH NET WORTH ROSE BY 31.63%} ^{TO EURO 1,235,324 (2005: EURO
938,455). THIS WAS ATTRIBUTABLE TO} ^{HIGHER REVENUE RESERVE BY 89.13%
TO EURO 629,263 (2005: EURO 332,394).}

^LEVERAGE:

^{IN THE SHORT-TERM,
SUBJECT WAS LARGELY FINANCED BY TRADE CREDITORS} ^{WHICH MADE
UP 86.53% (2005: 82.83%) OF THE TOTAL CURRENT LIABILITIES} ^{AND
AMOUNTED TO EURO 1,235,324 (2005: EURO 938,455). THE BREAKDOWN} ^{WAS
AS FOLLOWS:}

^{*TRADE CREDITORS -
2006: EURO 1,377,916 (2005: EURO 383,569)}

^{*DUE TO ULTIAMTE
HOLDING COMPANY (TRADE) - 2006: EURO 2,014,115} ^{(2005: EURO
1,100,718)}

^{*DUE TO RELATED
COMPANY (TRADE) - 2006: EURO 12,946 (2005: EURO} ^46,039)

^{*DUE TO HOLDING
COMPANY (TRADE) - 2006: EURO 769,592 (2005: EURO} ^478,762)

^{SUBJECT'S TOTAL
LONG TERM LIABILITIES ROSE BY 5.10 TIMES TO EURO} ^{17,171
(2005: EURO 2,816) AND CONSISTED OF:} ^{*DEFERRED TAXATION - 2006: EURO
2,736 (2005: EURO 2,816)} ^{*HIRE PURCHASE CREDITOR - 2006: EURO 14,435
(2005: NIL)}

^{LEVERAGE RATIO
ROSE TO 3.92 TIMES IN FY 2006 (2005: 2.59 TIMES) AS A} ^{RESULT OF A
GREATER INCREASE IN TOTAL LIABILITIES THAN 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:

^{IN
GENERAL, LIQUIDITY STATUS OF THE COMPANY WAS PASSABLE WITH NET} ^{WORKING
CAPITAL IMPROVED BY 22.30% TO EURO 1,047,816 (2005: EURO} ^856,779).

^{BOTH
CURRENT AND QUICK RATIOS DROPPED TO 1.22 TIMES (2005: 1.35 TIMES)} ^{AND 0.90
TIMES (2005: 1.06 TIMES) RESPECTIVELY.}

^{CASH
AND BANK BALANCES}

^{*CASH AT BANKS AND
IN HAND - 2006: EURO 1,377,894 (2005: EURO 680,313)}

^{PROFITABILITY:}

^{REVENUE
ROSE BY 78.14% TO EURO 9,760,805 (2005: EURO 5,479,350). NET} ^{PROFIT ALSO
IMPROVED SHARPLY BY 2.53 TIMES TO EURO 296,869 (2005: EURO} ^{-194,312).
HENCE, NET MARGIN INCREASED TO 3.04% (2005: -3.55%).}

^{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 DECREASED TO 110 DAYS (2005: 124 DAYS).}

BACKGROUND/OPERATION

^{THE
COMPANY WAS INCORPORATED IN THE REPUBLIC OF SINGAPORE ON} ^{16/10/1987
AS A LIMITED PRIVATE COMPANY AND WAS TRADING AS} ^{"POWER
PROTECTION (S) PTE LTD".}

^{ON
20/04/1989, IT CHANGED TO THE NAMESTYLE OF "NUOVA SICON ELECTRONIC} ^{(FAR EAST)
PTE LTD" AND ON 22/12/1998, TO "SOCOMEC SICON (FAR EAST)} ^PTE
LTD".

^{SUBSEQUENTLY
ON 20/02/2006, SUBJECT CHANGED TO ITS PRESENT NAMESTYLE} ^{OF
"SOCOMEC UPS ASIA PTE. LTD.".}

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

^{PRINCIPAL
ACTIVITIES:}

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

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

^{1)
OTHER SERVICE ACTIVITIES;}

^{DISTRIBUTION
& ENGINEERING WORK FOR UNINTERRUPTIBLE POWER SUPPLY}

^{2)
MECHANICAL ENGINEERING WORKS;}

^{DISTRIBUTION
& ENGINEERING WORK FOR DC SWITCH MODE RECTIFIER &}

^INVERTERS

^{THE COMPANY IS
LISTED IN THE SINGAPORE LOCAL DIRECTORIES UNDER THE} ^{CLASSIFICATION
OF: ELECTRIC POWER PLANT-EMERGENCY & STANDBY}

^{DURING THE
FINANCIAL YEAR(S), UNDER REVIEW, SUBJECT'S PRINCIPAL} ^{ACTIVITIES
ARE THOSE OF IMPORTING AND DEALING IN UNINTERRUPTIBLES,} ^{AC POWER
SOURCE AND TECHNICAL EQUIPMENT AND THE RENDERING OF} ^{TECHNICAL
SERVICES.}

^{FROM THE RESEARCH
DONE, SUBJECT'S PRIME BUSINESS ACTIVITY IS TO} ^{OFFER SALES
AND SERVICES OF UNINTERRUPTIBLE POWER SUPPLY (UPS)} ^{REQUIREMENTS IN
ASIA PACIFIC REGION. IT OFFERS POWER-PROTECTION} ^{SOLUTION (UPS) FOR
MOST INDUSTRIES FOR CRITICAL ENVIRONMENT.}

^{THE SOCOMEC GROUP
WHICH SPECIALISES IN DISTRIBUTION, CONTROL,} ^{SECURITY AND SECURE POWER SUPPLY OF
LOW VOLTAGE ELECTRICAL ENERGY,} ^{FOR THE INDUSTRIAL AND SERVICES
SECTORS. THE GROUP IS AN EUROPEAN UPS} ^{MANUFACTURER OF COMPUTER-GRADE
AND INDUSTRIAL-GRADE UNINTERRUPTIBLE} ^{POWER SUPPLIES SYSTEMS (UPS)
FROM 320VA TO 4800KVA.}

^PRODUCTS:

^{*
UPS FROM 400 VA TO 24 KVA, SINGLE-PHASE REQUIREMENTS, SINGLE-PHASE}

^INPUT

^{*
UPS FROM 4.5 TO 120 KVA, SINGLE-PHASE REQUIREMENTS, THREE-PHASE}

^INPUT

^{*
UPS FROM 10 TO 800 KVA, THREE-PHASE REQUIREMENTS, THREE-PHASE INPUT}

^{*
STATIC TRANSFER SYSTEMS (STS)}

^{*
HARMONICS COMPENSATORS ATRYS®}

^{*
400 HZ STATIC CONVERTERS FOR AERONAUTIC APPLICATIONS}

^{*
DC AND AC POWER SYSTEMS/RECTIFIERS AND INVERTERS}

^{*
COMMUNICATION INTERFACES}

^SERVICES:

^{*
COMMISSIONING}

^{-
EQUIPMENT IS INSTALLED BY A SPECIALIST, WITH CUSTOMISATION}

^{*
MAINTENANCE CONTRACTS}

^{*
REMOTE SERVICE (ESERVICE)}

^{-
YOUR UPS IS LINKED TO OUR REMOTE MONITORING CENTRE SO THAT SUBJEC}

^{CAN
DETECT AND REPORT ANY MALFUNCTION.}

^{*
SPECIAL SERVICES}

^{*
COMMUNICATIONS PRODUCTS}

^{*
RESPONDING TO CUSTOMERS' NEEDS AND BEING THERE TO HELP}

^{-
TECHNICAL SUPPORT AND ADVICE.}

^TRADE
NAMES:

^{*
SOCOMEC SICON - UPS (FRANCE)}

^{TERMS
OF PAYMENT:}

^{*
TRADE AND OTHER DEBTORS : 30-90 DAYS
TERM, ETC}

^{*
TRADE AND OTHER CREDITORS: 60 DAYS TERM}

^{MARKET
PRESENCE:}

^{*
ASIA PACIFIC REGION}

^{TRADING
COUNTRIES:}

^{*
HONG KONG}

^*
CHINA

^*
INDIA

^*
KOREA

^{*
NEW ZEALAND}

^{*
PHILIPPINES}

^*
TAIWAN

^{QUALITY
ASSESSMENT:}

^*ISO
9002

^{*ISO
9001: 2000 - SOCOMEC SICON UPS}

^{*ISO
9001: 2000 - SOCOMEC SA}

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

^{*
SINGAPORE CHINESE CHAMBERS OF COMMERCE AND INDUSTRY}

^{*
FRENCH CHAMBER OF COMMERCE}

^{NUMBER
OF EMPLOYEES:}

^2007:
20

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

^{THE
COMPANY'S IMMEDIATE HOLDING CORPORATION IS SICON S.R.L, WHICH IS} ^{INCORPORATED
IN ITALY. THE COMPANY'S ULTIMATE HOLDING CORPORATION IS} ^{SOCOMEC
S.A., A COMPANY INCORPORATED IN FRANCE.}

^{REGISTERED
AND BUSINESS ADDRESS:}

^{31
UBI ROAD 1}

^#01-00

^{AZTECH
BUILDING}

^{SINGAPORE
408694}

^{DATE
OF CHANGE OF ADDRESS: 20/02/2006}

^{-
PROPERTY RECORD WAS NOT AVAILABLE}

^WEBSITES:

^{www.socomec.com}

^EMAIL:

^{enquiry@socomec.com.sg}

^{sg.ups.sales@socomec.com}

^{inquiry@socomecsicon.com.sg}

MANAGEMENT

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

^{1)
ALAIN DIDIER TSORBA, A FRENCH}

^{-
BASED IN FRANCE.}

^{2)
KIM PASCAL MAURICE JULES, A FRENCH}

^{-
BASED IN FRANCE.}

^{3)
CARTER MICHAEL PAUL, A BRITISH}

^{-
BASED IN FRANCE.}

^{4)
RENATO FRATTA, AN ITALIAN}

^{-
BASED IN ITALY.}

^{5)
GAUTIER JEAN MARC FRANCOIS, A FRENCH}

^{-
BASED IN SINGAPORE.}

^{6)
PIERRE, LOUIS BERGER, A FRENCH}

^{-
BASED IN SINGAPORE.}

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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