MIRA INFORM REPORT

Report Date :

25.03.2008

IDENTIFICATION DETAILS

Name :	FOAMTEC (SINGAPORE) PTE LTD

Registered Office :	^{6 SUNGEI KADUT CRESCENT}

Country :	Singapore

Financials (as on) :	31.12.2006

Date of Incorporation :	^28.05.1997

Com. Reg. No.:	^199703592G

Legal Form :	^{Pte Ltd}

Line of Business :	Manufacturers, Designers, Importers, Distributors, Agents of and Dealers in Products Made from all kinds of Foam Rubber, Synthetic Rubber, Neoprene, Sponges, Plastics, Pvc, Films, Felts, Paper, Metallurgical Alloy and other Materials with or without Adhesives, Glue and Bonding Agents for various Industrial Uses

RATING & COMMENTS

MIRA’s Rating :

RATING		STATUS	PROPOSED CREDIT LINE
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

Status :	Good

Payment Behaviour :	Regular

Litigation :	Clear

Subject Company

FOAMTEC (SINGAPORE) PTE LTD

Line Of Business

MANUFACTURERS, DESIGNERS, IMPORTERS, DISTRIBUTORS, AGENTS OF AND DEALERS IN PRODUCTS MADE FROM ALL KINDS OF FOAM RUBBER, SYNTHETIC RUBBER, NEOPRENE, SPONGES, PLASTICS, PVC, FILMS, FELTS, PAPER, METALLURGICAL ALLOY AND OTHER MATERIALS WITH OR WITHOUT ADHESIVES, GLUE AND BONDING AGENTS FOR VARIOUS INDUSTRIAL USES

Parent Company

FOAMTEC INTERNATIONAL CO., LTD.

(PERCENTAGE OF SHAREHOLDINGS: 100.00%)

Financial Elements

FY 2006

CONSOLIDATED

Sales : US$28,101,899

Networth : US$11,127,545

Paid-Up Capital : US$ 1,316,195

Net result : US$ 2,044,713

Net Margin(%) : 7.28

Return on Equity(%) : 18.38

Leverage Ratio : 0.69

COMPANY IDENTIFICATION

^{Subject Company : FOAMTEC (SINGAPORE) PTE LTD}

^{Former Name :
-}

^{Business Address : 6 SUNGEI KADUT CRESCENT}

^{Town :
SINGAPORE}

^{Postcode : 728689}

^{County :
-}

^{Country :
Singapore}

^{Telephone : 6368 8356 /
6368 2898}

^{Fax :
6368 1831}

^{ROC Number :
199703592G}

^{Reg. Town : -}

SUMMARY

^{Legal Form : Pte Ltd}

^{Date Inc. :
28/05/1997}

^{Previous Legal Form : -}

^{Summary year :
31/12/2006}

^{Sales :
28,101,899}

^{Networth :
11,127,545}

^{Capital :
-}

^{Paid-Up Capital :
1,316,195}

^{Employees : 150}

^{Net result : 2,044,713}

^{Share value : 1}

^{Auditor :
KPMG}

REFERENCES

^{Litigation : No}

^{Company status : TRADING}

^{Started :
28/05/1997}

PRINCIPAL(S)

^{LEONG KUO WEE JAY S1306651E Director}

DIRECTOR(S)

^{LEONG KUO WEE JAY S1306651E Director}

^{Appointed on :
14/07/1999}

^{Street : 152 PRINCE CHARLES CRESCENT}

^#03-12

^{TANGLIN VIEW}

^{Town: SINGAPORE}

^{Postcode: 159013}

^{Country: Singapore}

^{STEPHEN P SCIBELLI
JR 150003912 Director}

^{Appointed on : 28/05/1997}

^{Street : 313 W
CRISTOBEL}

^{SAN CLEMENTE}

^CALIFORNIA

^{Town: : USA}

^{Postcode :
92672}

^{Country : United
States}

^{SER LIP JING S0821712B Company Secretary}

^{Appointed on : 30/09/2002}

^{Street : 2
MARSILING DRIVE}

^#06-35

^{Town :
SINGAPORE}

^{Postcode : 730002}

^{Country : Singapore}

^{PICHIT NITHIVASIN Z051704 Director}

^{Appointed on : 25/06/2003}

^{Street : 109 SUAPA ROAD}

^{KWAENG POMPRAB}

^{KHET POMPRABSATTRUPAI}

^{Town: BANGKOK}

^{Postcode: 10100}

^{Country: Thailand}

FORMER DIRECTOR(S)

^{AW YING FATT S1298909A}

^{HENG KIM SIANG S1382254I}

^{FOONG SIEW LEONG 7875149}

ACTIVITY(IES)

^{RUBBER - FOAM And SPONGE
- WHSLE And MFRS Code: 18670}

^{PLASTIC PRODUCTS Code:
16940}

^{RUBBER FOAM And SPONGE -
RETAIL Code: 18710}

^{RUBBER - SYNTHETIC Code:
18675}

^{BASED ON ACRA'S RECORD}

^{1) MANUFACTURE FOAM
RUBBER PRODUCTS (EXCLUDING FOAM RUBBER MATTRESSES)}

^{MANUFACTURE FOAM RUBBER
PRODUCTS (INCLUDING FOAM RUBBER)}

^{2) MANUFACTURE OF
PLASTIC SHEET, FILM & ARTICLES THEREOF}

^{(EG POLYTHENE AND
POLYPROPYLENE BAGS)}

CHARGES

^{Date: 26/07/2001}

^{Comments : CHARGE NO: 200103507 (DISCHARGED)}

^{SECURED: 0.00 AND ALL
MONIES OWING}

^{CHARGEE(S): BANGKOK BANK
PUBLIC COMPANY LTD}

PREMISES/PROPERTY INFORMATIONS

No Premises/Property Information In Our Databases

SHAREHOLDERS(S)

^{FOAMTEC INTERNATIONAL
CO., LTD. 2,145,002 Company}

^{Street : 175 SATHORN CITY TOWER 20TH
FLOOR}

^{SOUTH SATHORN ROAD
SATHORN}

^{Town: BANGKOK}

^{Postcode: 10120}

^{Country: Thailand}

FORMER SHAREHOLDER(S)

^{FOONG SIEW LEONG 1}

^{STEPHEN P SCIBELLI
JR 1}

HOLDING COMPANY

^{FOAMTEC INTERNATIONAL
CO., LTD. UF50368W %: 100}

SUBSIDIARY(IES)

^{FOAMEX ASIA (WUXI) CO.,
LTD.}

^{FOAMEX ASIA
MANUFACTURING (WUXI)}

^{CO., LTD.}

^{FOAMEX ASIA (MALAYSIA)
SDN. BHD.}

PAYMENT HISTORY AND EXPERIENCES

^{Trade Morality :
AVERAGE}

^{Liquidity :
SUFFICIENT}

^{Payments :
REGULAR}

^{Trend :
LEVEL}

^{Financial Situation : AVERAGE}

FINANCIAL ELEMENTS

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

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

^{Date Account Lodged: 18/06/2007}

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

^{Number of weeks: 52 52}

^{Consolidation Code: CONSOLIDATED CONSOLIDATED}

^{---
ASSETS ---}

^{Preliminary Exp 6,541}

^{Tangible Fixed
Assets: 2,406,569 2,157,523}

^{Total Fixed Assets: 2,406,569 2,164,064}

^{Inventories: 4,141,578 3,514,485}

^{Receivables: 6,604,779 5,406,973}

^{Cash,Banks,
Securitis: 4,903,328 5,153,287}

^{Other current assets: 711,351 667,059}

^{Total Current Assets: 16,361,036 14,741,804}

^{TOTAL ASSETS: 18,767,605 16,905,868}

^{---
LIABILITIES ---}

^{Equity capital: 1,316,195 1,316,195}

^{Reserves: 153,515 30,314}

^{Profit & lost Account: 9,657,835 8,139,826}

^{Total Equity: 11,127,545 9,486,335}

^{L/T deffered taxes: 190,927 198,227}

^{Other long term
Liab.: 3,926,098 3,926,098}

^{Total L/T Liabilities: 4,117,025 4,124,325}

^{Trade Creditors: 1,461,110 1,498,378}

^{Prepay. & Def.
charges: 462,798 214,770}

^{Provisions: 461,410 459,564}

^{Other Short term
Liab.: 1,137,717 1,122,496}

^{Total short term Liab.: 3,523,035 3,295,208}

^{TOTAL LIABILITIES: 7,640,060 7,419,533}

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

^{Net Sales 28,101,899 28,177,481}

^{Purchases,Sces & Other
Goods: 21,113,048 21,672,111}

^{Gross Profit: 6,988,851 6,505,370}

^{Result of ordinary operations 2,864,707 2,528,929}

^{NET RESULT BEFORE
TAX: 2,557,315 2,379,592}

^{Tax :
512,602
507,296}

^{Net income/loss year: 2,044,713 1,872,296}

^{Interest Paid: 292,212 231,270}

^{Depreciation: 495,141 402,429}

^{Wages and Salaries: 4,648,608 4,287,926}

^{Financial Income:}^{188,745 81,933}

RATIOS

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

^{Turnover per
employee: 187345.99 187849.87}

^{Net result /
Turnover(%): 0.07 0.07}

^{Fin. Charges /
Turnover(%): 0.01 0.01}

^{Stock / Turnover(%): 0.15 0.12}

^{Net Margin(%): 7.28 6.64}

^{Return on Equity(%): 18.38 19.74}

^{Return on Assets(%): 10.89 11.07}

^{Net Working capital: 12838001.00 11446596.00}

^{Cash Ratio: 1.39 1.56}

^{Quick Ratio: 3.27 3.20}

^{Current ratio: 4.64 4.47}

^{Receivables Turnover: 84.61 69.08}

^{Leverage Ratio: 0.69 0.78}

^{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)/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 GROUP WAS SEEN TO BE FAIR IN VIEW OF}

^{THE FOLLOWING:}

^{NET WORTH:}

^{THE BALANCE SHEET WAS
CONSIDERED PASSABLE WITH NET WORTH IMPROVED BY} ^{17.30% FROM US$9,486,335 IN 2005 TO
US$11,127,545 IN 2006. THIS WAS} ^{DUE TO HIGHER ACCUMULATED PROFITS OF
US$9,657,835 (2005:} ^{US$8,139,826); A RISE OF 18.65% FROM THE PRIOR
YEAR.}

^LEVERAGE:

^{IN THE SHORT TERM,
SUBJECT WAS LARGELY FINANCED BY TRADE CREDITORS} ^{WHICH MADE UP 41.47% (2005: 45.47%) OF
THE TOTAL CURRENT LIABILITIES} ^{AND AMOUNTED TO US$1,461,110 (2005:
US$1,498,378). THE BREAKDOWN IS AS}

^FOLLOWS:

^{* TRADE PAYABLES}

^{- 2006: US$1,396,275
(2005: US$1,080,351)}

^{* AMOUNTS DUE TO
IMMEDIATE HOLDING CORPORATION}

^{- 2006: US$11,127 (2005: US$264,563 )}

^{* AMOUNTS DUE TO RELATED
CORPORATION}

^{- 2006: US$53,708 (2005: US$153,464 )}

^{IN THE LONG TERM,
SUBJECT INCURRED US$4,117,025 (2005: US$4,124,325)}

^{AND THE BREAKDOWN IS AS
FOLLOWS:}

^{* LOAN FROM IMMEDIATE
HOLDING COMPANY}

^{- 2006: US$3,926,098
(2005: US$3,926,098)}

^{* DEFERRED TAX
LIABILITIES}

^{- 2006: US$190,927 (2005: US$198,227 )}

^{IN ALL, LEVERAGE RATIO
FELL FROM 0.78 TIMES TO 0.69 TIMES AS A RESULT}

^{OF A GREATER RISE IN
TOTAL EQUITY TO TOTAL LIABILITIES.}

^LIQUIDITY:

^{IN GENERAL, SUBJECT'S
LIQUIDITY SITUATION WAS PASSABLE AS SEEN FROM} ^{THE RISE IN NET WORKING CAPITAL AND
LIQUIDITY RATIOS. CURRENT RATIO}

^{ROSE
TO 4.64 TIMES, UP FROM 4.47 TIMES AND QUICK RATIO IMPROVED TO} ^{3.27 TIMES FROM 3.20 TIMES IN 2005.
SIMILARLY, NET WORKING CAPITAL} ^{IMPROVED BY 12.16% FROM US$11,446,596
IN 2005 TO US$12,838,001 IN} ^2006.

^{PROFITABILITY:}

^{REVENUE POSTED A DECREASE OF 0.27% FROM
US$28,177,481 IN 2005 TO} ^{US$28,101,899 BUT NET PROFT ROSE BY 9.21% TO US$2,044,713 (2005:} ^{US$1,872,296). HENCE, NET MARGIN ROSE TO 7.28% (2005: 6.64%).}

^{DEBT SERVICING:}

^{DEBT SERVICING PROBLEMS MIGHT NOT BE EXPECTED
IF REVENUE AND EARNINGS} ^{CAN BE MAINTAINED AND PAYMENT BY TRADE DEBTORS ARE FORTHCOMING. IN} ^{ADDITION, ITS INTEREST COVERAGE WAS HEALTHY CONSIDERING THAT ITS}

^{INTEREST EXPENSES WERE LOW AT US$292,212 IN 2006 (2005:
US$231,270).}

^{NON-CURRENT ASSETS:}

^{THE FOLLOWING ITEMS ARE
CLASSIFIED UNDER PRELIMINARY:}

^{* PREPAYMENTS - 2006:
NIL (2005: US$6,541)}

^{NOTES TO THE FINANCIAL STATEMENTS:}

^{SUBSEQUENT EVENTS} ^{ON 15 FEBRUARY 2007, THE MINISTER FOR FINANCE ANNOUNCED IN HIS BUDGET}

^{SPEECH THAT THE
CORPORATE INCOME TAX RATE IS TO BE REDUCED FROM 20% TO} ^{18% FOR THE YEAR ASSESSMENT 20008. THE
TAX CHARGES FOR THE COMPANY FOR} ^{THE YEAR ENDED 31 DECEMBER 2006 HAVE
BEEN COMPUTED AT THE RATE OF 20%,} ^{BEING THE CORPORATE TAX EFFECTIVE
AS AT THAT DATE. HAD THE LATEST} ^{CORPORATE RATE OF 18% BEEN USED, THE
CURRENT AND DEFERRED TAX CHARGE} ^{FOR THE GROUP WOULD HAVE DECREASED
BY $44,318 AND $18,809,} ^{RESPECTIVELY. THE DEFERRED TAX LIABILITIES
FOR THE GROUP AND THE} ^{COMPANY WOULD ALSO HAVE DECREASED BY $18,809.}

BACKGROUND/OPERATION

^{THE COMPANY WAS
INCORPORATED IN THE REPUBLIC OF SINGAPORE ON} ^{28/05/1997 AS A LIMITED PRIVATE COMPANY
AND IS TRADING UNDER ITS} ^{PRESENT NAMESTYLE AS "FOAMTEC
(SINGAPORE) PTE LTD".}

^{THE COMPANY HAS AN
ISSUED AND PAID-UP CAPITAL OF} ^{2,145,002 SHARES OF A VALUE OF S$2,145,002.}

^{PRINCIPAL ACTIVITIES:}

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

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

^{1) MANUFACTURE FOAM
RUBBER PRODUCTS (EXCLUDING FOAM RUBBER MATTRESSES)}

^{MANUFACTURE FOAM RUBBER
PRODUCTS (INCLUDING FOAM RUBBER)}

^{2) MANUFACTURE OF
PLASTIC SHEET, FILM & ARTICLES THEREOF}

^{(EG POLYTHENE AND
POLYPROPYLENE BAGS)}

^{DURING THE FINANCIAL
YEAR(S), UNDER REVIEW, THE PRINCIPAL ACTIVITIES}

^{OF THE COMPANY ARE THOSE
RELATING TO THE BUSINESS OF MANUFACTURERS,}

^{DESIGNERS, IMPORTERS,
DISTRIBUTORS, AGENTS OF AND DEALERS IN PRODUCTS}

^{MADE FROM ALL KINDS OF
FOAM RUBBER, SYNTHETIC RUBBER, NEOPRENE,}

^{SPONGES, PLASTICS, PVC,
FILMS, FELTS, PAPER, METALLURGICAL ALLOY AND}

^{OTHER MATERIALS WITH OR
WITHOUT ADHESIVES, GLUE AND BONDING AGENTS}

^{FOR VARIOUS INDUSTRIAL
USES.}

^{FROM THE RESEARCH DONE,
SUBJECT IS INTO FABRICATION OF TECHNICAL} ^{FOAM, FELT, FILM, RUBBER AND SPONGE PRODUCTS FOR ELECTRONICS,} ^{AUTOMOTIVE AND HOME APPLIANCES.}

^{OPERATING FROM A 47,000
SQUARE-FOOT FACILITY, THE GROUP NOW HAS A} ^{WIDE SELECTION OF AUTOMATED AND SEMI-AUTOMATED EQUIPMENT AND A
CLASS} ^{100 CLEANROOM, SOME STATE-OF-THE-ART, THAT ARE CAPABLE OF} ^{MANUFACTURING AT HIGH SPEED AND CONSISTENT QUALITY FROM PRECISION} ^{DIE-CUTTING
TO LAMINATION AND CONTRACT ASSEMBLY.}

^{PRODUCTS/SERVICES:}

^{* ACOUSTICAL SYSTEM, INK
TRANSFER, WIPERS/SWAPS, COSMETICS,}

^{FILTRATION, EMI/RFI
SHIELDING, GASKETING, SEALING, INSULATION,}

^{CUSHIONING &
PACKAGING.TAILORED CUSTOMER SOLUTIONS FOR MATERIAL}

^{NEEDS, ASSEMBLY OF TIGHT
TOLERANCE ENGINEERING COMPONENTS, SUPPLY}

^{CHAIN MANAGEMENT.}

^{MAJOR PRODUCTION
EQUIPMENT:}

^{* CLEANROOM ROTARY
DIE-CUT, VERTICAL CUTTING, PRECISION SPLITTING,}

^{DIE-CUTTING, DIRECT
ADHESIVE LAMINATION MACHINES.}

^{QUALITY ASSESSMENT:}

^{* ISO 9002}

^{NO OTHER TRADE
INFORMATION WAS AVAILABLE AS TELE-}

^{INTERVIEW WAS NOT
GRANTED BY SUBJECT PERSONNEL.}

^{HOWEVER, FROM THE PRIOR
TELE-INTERVIEW CONDUCTED, THE FOLLOWING WAS}

^GATHERED:

^{SUBJECT ENGAGES IN THE
FOLLOWING ACTIVITIES:}

^{* TRADING OF FOAM
PRODUCTS}

^{SUBJECT MAINLY TRADES IN
THE ASIA REGION AND ALSO THE LOCAL MARKET.}

^{NUMBER OF EMPLOYEES:}

^{* ABOUT 150}

^{NO OTHER TRADE
INFORMATION WAS AVAILABLE}

^{THE IMMEDIATE HOLDING
COMPANY IS FOAMEX ASIA CO., LTD, INCORPORATED} ^{IN THAILAND. THE ULTIMATE HOLDING
COMPANY IS FOAMEX INTERNATIONAL}

^{INC, INCORPORATED IN THE UNITED STATES OF
AMERICA.}

^{NUMBER OF EMPLOYEES (31
DECEMBER):}

^{* GROUP - 2006: NOT
AVAILABLE (2005: NOT AVAILABLE; 2004: 230;}

^{2003: 204)}

^{REGISTERED AND BUSINESS
ADDRESS:}

^{6 SUNGEI KADUT CRESCENT}

^{SINGAPORE 728689}

^{DATE OF CHANGE OF
ADDRESS: 29/10/1997}

^{- RENTED PREMISE}

^{- PREMISE OWNED BY:
ADVANTEC OFFICE SYSTEMS PTE LTD}

^{WEBSITE:
www.foamexasia.com.sg (HOLDING COMPANY'S)}

^{EMAIL : foamtec@singnet.com.sg}

^{enquiry@foamexasia.com.sg}

MANAGEMENT

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

^{1) STEPHEN P. SCIBELLI
JR., AN AMERICAN}

^{- BASED IN THE UNITED
STATES OF AMERICA.}

^{2) LEONG KUO WEE JAY, A
SINGAPOREAN}

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

^{3) PICHIT NITHIVASIN, A
THAI}

^{- BASED IN THAILAND.}

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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