MIRA INFORM REPORT

Report Date :

08.05.2008

IDENTIFICATION DETAILS

Name :	ARMSTRONG INDUSTRIAL CORPORATION LIMITED

Formerly Known As :	^{ARMSTRONG INDUSTRIES SINGAPORE PTE}

Registered Office :	^{531 Bukit Batok Street 23} ^{Armstrong Industrial Building}

Country :	Singapore

Financials (as on) :	31.12.2007

Date of Incorporation :	^15.10.1980

Com. Reg. No.:	^198003808K

Legal Form :	^{Public Limited Company}

Line of Business :	Investment Holding and the Manufacture and Sale of Precision Die-Cut Foam and Rubber Moulded Components for a wide range of Technology and other applications

RATING & COMMENTS

MIRA’s Rating :

RATING		STATUS	PROPOSED CREDIT LINE
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

Status :	Very Good

Payment Behaviour :	Regular

Litigation :	Exists

Subject Company

ARMSTRONG INDUSTRIAL CORPORATION LIMITED

Line Of Business

INVESTMENT HOLDING AND THE MANUFACTURE AND SALE OF PRECISION DIE-CUT FOAM AND RUBBER MOULDED COMPONENTS FOR A WIDE RANGE OF TECHNOLOGY AND OTHER APPLICATIONS

Parent Company

N.A.

Financial Elements

FY 2007

CONSOLIDATED

Sales : S$182,994,000

Networth : S$ 86,502,000

Paid-Up Capital : S$ 48,706,000

Net result : S$ 20,488,000

Net Margin(%) : 11.20

Return on Equity(%) : 23.69

Leverage Ratio : 0.50

COMPANY IDENTIFICATION

^{Subject Company : ARMSTRONG INDUSTRIAL
CORPORATION LIMITED}

^{Former Name :
ARMSTRONG INDUSTRIES SINGAPORE PTE}

^{Business Address : 531 BUKIT BATOK STREET 23}

^{ARMSTRONG INDUSTRIAL BUILDING}

^{Town :
SINGAPORE}

^{Postcode : 659547}

^{County :
-}

^{Country :
Singapore}

^{Telephone : 6665 8588 / 6665
8513}

^{Fax :
6665 8665}

^{ROC Number :
198003808K}

PREVIOUS IDENTIFICATION

^{ARMSTRONG INDUSTRIES
SINGAPORE PTE LTD DATE OF CHANGE : 09/11/1995}

SUMMARY

^{Legal Form : Pub Ltd Co}

^{Date Inc. :
15/10/1980}

^{Previous Legal Form : Pte Ltd}

^{Summary year :
31/12/2007}

^{Sales :
141,922,000}

^{Networth : 86,502,000}

^{Capital :
-}

^{Paid-Up Capital :
47,858,000}

^{Employees : 1,940}

^{Net result : 12,766,000}

^{Share value : -}

^{Auditor :
ERNST & YOUNG}

REFERENCES

^{Litigation :
YES}

^{Company status : TRADING}

^{Started : 15/10/1980}

PRINCIPAL(S)

^{ONG PENG KOON
GILBERT S0847793J Director}

DIRECTOR(S)

^{KOH GIM HOE S0098517A Director}

^{Appointed on : 05/12/2000}

^{Street : 28 BUKIT BATOK STREET 52}

^#08-03

^{GUILIN VIEW}

^{Town: SINGAPORE}

^{Postcode: 659248}

^{Country: Singapore}

^{ONG PENG KOON
GILBERT S0847793J Director}

^{Appointed on : 15/10/1980}

^{Street : 27B WESTLAKE AVENUE}

^{Town: SINGAPORE}

^{Postcode: 278657}

^{Country: Singapore}

^{CHOW GOON CHAU
PATRICIA S1133374E Director}

^{Appointed on : 13/07/1988}

^{Street : 27B WESTLAKE AVENUE}

^{Town: SINGAPORE}

^{Postcode: 574292}

^{Country: Singapore}

^{ANG MENG HUAT
ANTHONY S1134434H Director}

^{Appointed on : 04/11/1994}

^{Street : 10B BRADDELL HILL}

^#18-08

^{BRADDELL VIEW}

^{Town: SINGAPORE}

^{Postcode: 579721}

^{Country: Singapore}

^{CHUANG SHEUE LING S1235221B Company Secretary}

^{Appointed on : 19/09/1997}

^{Street : 28 LOTUS AVENUE}

^{LUCKY PARK}

^{Town: SINGAPORE}

^{Postcode: 277611}

^{Country: Singapore}

^{TAN PENG CHIN S1269425C Director}

^{Appointed on : 06/11/1995}

^{Street : 3 JALAN HARUM}

^{OEI TIONG HAM PARK}

^{Town: SINGAPORE}

^{Postcode: 268477}

^{Country: Singapore}

^{CHAN PEE TECK PETER S1431439C Director}

^{Appointed on : 19/11/1993}

^{Street : 151B KING'S ROAD}

^#10-06

^{FARRER COURT}

^{Town: SINGAPORE}

^{Postcode: 268159}

^{Country: Singapore}

^{LO SWEE OI S1611477D Company Secretary}

^{Appointed on : 31/12/2004}

^{Street : 135 CASHEW ROAD}

^#10-129

^{Town: SINGAPORE}

^{Postcode: 670135}

^{Country: Singapore}

FORMER DIRECTOR(S)

^{NEO BOON CHENG
JERRY S0584585H}

^{ONG PENG YEOW S1176245Z}

^{LIM HWEE CHIANG S1188082G}

ACTIVITY(IES)

^{MOULDS
Code:
14677}

^{RUBBER PRODUCTS Code:
18720}

^{HOLDING COMPANIES Code:
11320}

^{BASED ON ACRA'S RECORD}

^{1) MANUFACTURE OF
INDUSTRIAL & MECHANICAL RUBBER GOODS}

CHARGES

^{Date: 27/02/1997}

^{Comments : CHARGE NO: 199701248 (DISCHARGED)}

^{AMOUNT SECURED: 0.00 AND
ALL MONIES OWING}

^{CHARGEE(S): OVERSEAS
UNION BANK LIMITED}

^{Date: 27/02/1997}

^{Comments : CHARGE NO: 199701249 (DISCHARGED)}

^{AMOUNT SECURED: 0.00 AND
ALL MONIES OWING}

^{CHARGEE(S): OVERSEAS
UNION BANK LIMITED}

^{Date: 27/02/1997}

^{Comments : CHARGE NO: 199701250 (DISCHARGED)}

^{AMOUNT SECURED: 0.00 AND
ALL MONIES OWING}

^{CHARGEE(S): OVERSEAS
UNION BANK LIMITED}

PREMISES/PROPERTY INFORMATIONS

No Premises/Property Information In Our Databases

BANKERS

^{UNITED OVERSEAS BANK LTD}

^{DBS BANK LTD.}

^{ABN AMRO BANK N.V.}

ASSOCIATED COMPANY(IES)

^{BRIDGESTONE ARMSTRONG
PTE LTD}

^{7 GUL LANE}

^{SINGAPORE Singapore}

SHAREHOLDERS(S)

^{OCBC NOMINEES SINGAPORE
PTE LTD 5,364,320 Company}

^{Street : 65 CHULIA STREET}

^#28-01

^{OCBC CENTRE}

^{Town: SINGAPORE}

^{Postcode: 049513}

^{Country: Singapore}

^{UNITED OVERSEAS BANK
NOMINEES
15,670,094 Company}

^{Street : 80 RAFFLES PLACE}

^{#UOB PLAZA}

^{Town: SINGAPORE}

^{Postcode: 048624}

^{Country: Singapore}

^{ONG PENG KOON
GILBERT
193,745,915 Private Person}

^{Street : 27B WESTLAKE AVENUE}

^{Town: SINGAPORE}

^{Postcode: 278657}

^{Country: Singapore}

^{CHOW GOON CHAU
PATRICIA
28,318,000 Private Person}

^{Street : 27B WESTLAKE AVENUE}

^{Town: SINGAPORE}

^{Postcode: 574292}

^{Country: Singapore}

^{CITIBANK NOMINEES
SINGAPORE PTE LTD
15,487,000 Company}

^{Street :}

^Town:

^Postcode:

^{Country: Singapore}

^{JOJO KRISNAWAN
5,398,000 Private Person}

^{Street :}

^Town:

^Postcode:

^{Country: Singapore}

^{KIM ENG SECURITIES PTE
LTD 2,592,780 Company}

^{Street : 9 TEMASEK BOULEVARD}

^#39-00

^{SUNTEC TOWER TWO}

^{Town: SINGAPORE}

^{Postcode: 038989}

^{Country: Singapore}

^{UOB KAY HIAN PRIVATE
LIMITED
1,706,000 Company}

^{Street : 80 RAFFLES PLACE}

^#30-01

^{UOB PLAZA 1}

^{Town: SINGAPORE}

^{Postcode: 048624}

^{Country: Singapore}

^{CIMB-GK SECURITIES
(F.K.A. G K GOH
3,176,462 Company}

^{Street : 50 RAFFLES PLACE}

^#19-00

^{SINGAPORE LAND TOWER}

^{Town: SINGAPORE}

^{Postcode: 048623}

^{Country: Singapore}

^{TSUI SUNG LAM
1,602,000 Private Person}

^{Street : 69 GERALD DRIVE}

^{Town: SINGAPORE}

^{Postcode: 799013}

^{Country: Singapore}

^{ONG EUGENE
1,748,000 Private Person}

^{Street :}

^Town:

^Postcode:

^{Country: Singapore}

^{DBS NOMINEES (PRIVATE)
LIMITED 52,549,554 Company}

^{Street : 6 SHENTON WAY}

^{DBS BUILDING}

^{Town: SINGAPORE}

^{Postcode: 068809}

^{Country: Singapore}

^{HSBC (SINGAPORE)
NOMINEES PTE LTD 33,658,000
Company}

^{Street : 10 COLLYER QUAY}

^#02-02

^{OCEAN BUILDING}

^{Town: SINGAPORE}

^{Postcode: 049315}

^{Country: Singapore}

^{DBS VICKERS SECURITIES
(S) PTE LTD 4,481,500 Company}

^{Street :}

^Town:

^Postcode:

^{Country: Singapore}

^{RAFFLES NOMINEES PTE
LTD
3,422,000 Company}

^{Street : 000}

^{Town: 000}

^{Postcode: 000}

^{Country: Singapore}

^{YU KUN-SHAN 2,540,000
Private Person}

^{Street :}

^Town:

^Postcode:

^{Country: Singapore}

^{GUI JIANG LIN
2,000,000 Private Person}

^{Street :}

^{Town: SINGAPORE}

^Postcode:

^{Country: Singapore}

^{DBSN SERVICES PTE
LTD
1,634,000 Company}

^{Street :}

^Town:

^Postcode:

^{Country: Singapore}

^{TSUI SUNG LAM
1,602,000 Private Person}

^{Street :}

^Town:

^Postcode:

^{Country: Singapore}

^{CHIA LAIN HENG
1,600,000 Private Person}

^{Street :}

^Town:

^Postcode:

^{Country: Singapore}

^{MORGAN STANLEY ASIA
(SINGAPORE)
1,574,000 Company}

^{Street : 000000000000}

^Town:

^Postcode:

^{Country: Singapore}

FORMER SHAREHOLDER(S)

^{UOB NOMINEES (2006)
PRIVATE LIMITED 3,345,200}

^{SINGAPORE NOMINEES PTE
LTD 2,130,000}

^{OCBC SECURITIES PRIVATE
LIMITED 4,467,000}

^{PHILLIP SECURITIES PTE
LTD 584,500}

^{CITIBANK CONSUMER
NOMINEES PTE LTD 548,000}

^{ONG HWEE JOO 564,340}

^{ANG MENG HUAT
ANTHONY 10,395,012}

^{TEO LAY SWEE 400,000}

^{HONG LEONG FINANCE
NOMINEES PTE LTD 301,000}

^{ONG HWEE TIN 408,000}

^{KB NOMINEES PTE LTD 374,000}

^{ABN AMRO NOMINEES S'PORE PTE LTD 300,000}

^{HL BANK NOMINEES
(SINGAPORE) PTE 9,451,000}

^{LIM & TAN SECURITIES
PTE LTD 1,347,000}

^{WONG KIEN CHORN 2,300,000}

^{CHAN TIEN LOK 1,677,000}

^{LAU CHIN KIA 1,500,000}

^{PANTJA BOEN
SOESANTO 1,440,000}

SUBSIDIARY(IES)

^{ARMSTRONG RUBBER
MANUFACTURING PTE LTD}

^{FOAMLINE INDUSTRIES SDN
BHD}

^{HARDYFLEX INDUSTRIES SDN
BHD}

^{ARMSTRONG TECHNOLOGY
(WUXI) CO., LTD.}

^{ARMSTRONG-ODENWALD
(ASIA) PTE LTD}

^{ARMSTRONG RUBBER AND
CHEMICAL PRODUCTS CO., LTD}

^{PT ARMSTRONG INDUSTRIES
INDONESIA}

^{ARMSTRONG TECHNOLOGY
(SHANGHAI) CO LTD}

^{ARMSTRONG TECHNOLOGY
(DALIAN) CO LTD}

^{ARMSTRONG MECHANICAL
COMPONENTS CO LTD (F.K.A NT PRECISION (THAILAND) CO LTD)}

^{ARMSTRONG TECHNOLOGY
(SUZHOU) CO LTD}

^{ARMSTRONG WESTON
HOLDINGS PTE LTD}

^{ARMSTRONG RUBBER
TECHNOLOGY (THAILAND) COMPANY LIMITED}

PAYMENT HISTORY AND EXPERIENCES

^{Trade Morality: AVERAGE}

^{Liquidity : SUFFICIENT}

^{Payments : REGULAR}

^{Trend : UPWARD}

^{Financial Situation: AVERAGE}

LITIGATION(S)

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

^{Case Number: HWS001377/1990}

Defendant ARMSTRONG INDUSTRIAL CORPORATION ROC #: 198003808K

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

^{Case Number: DCS002062/1995}

Defendant ARMSTRONG INDUSTRIAL CORPORATION ROC #: 198003808K

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

^{Case Number: HWS01377/90}

Defendant ARMSTRONG INDUSTRIAL CORPORATION ROC #: 198003808K

FINANCIAL ELEMENTS

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

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

^{Date Account Lodged: 26/04/2007}

^{Balance Sheet Date: 31/12/2007 31/12/2006}

^{Number of weeks: 52 52}

^{Consolidation Code: CONSOLIDATED CONSOLIDATED}

^{--- ASSETS ---}

^{Preliminary Exp 10,674,000}

^{Intangible Fixed Assets: 747,000 226,000}

^{Tangible Fixed Assets: 33,424,000 25,959,000}

^{Investments 1,451,000 1,744,000}

^{Total Fixed Assets:
35,622,000
38,603,000}

^{Inventories: 19,959,000 19,709,000}

^{Receivables: 44,501,000 32,524,000}

^{Cash,Banks, Securitis: 26,555,000 18,621,000}

^{Other current assets: 2,750,000 2,381,000}

^{Total Current Assets:
93,765,000
73,235,000}

^{TOTAL ASSETS:
129,387,000
111,838,000}

^{--- LIABILITIES ---}

^{Equity capital: 48,706,000 47,858,000}

^{Reserves: -3,012,000 -2,776,000}

^{Profit & lost
Account:
36,418,000 24,068,000}

^{Other: 4,390,000 5,668,000}

^{Total Equity:
86,502,000
74,818,000}

^{Long Term Loans: 395,000
1,095,000}

^{L/T deffered taxes: 429,000 449,000}

^{Other long term Liab.: 251,000 266,000}

^{Total L/T Liabilities:
1,075,000
1,810,000}

^{Trade Creditors: 19,348,000 18,055,000}

^{Prepay. & Def. charges: 9,452,000 6,676,000}

^{Short term liabilities: 104,000 114,000}

^{Due to Bank: 4,675,000 5,529,000}

^{Provisions:
3,055,000 1,844,000}

^{Other Short term Liab.: 5,176,000 2,992,000}

^{Total short term Liab.:
41,810,000
35,210,000}

^{TOTAL LIABILITIES:
42,885,000
37,020,000}

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

^{Net Sales 182,994,000 141,922,000}

^{Purchases,Sces & Other Goods: 131,828,000 108,022,000}

^{Gross Profit: 51,166,000 33,900,000}

^{Result of ordinary operations 27,672,000
15,428,000}

^{NET RESULT BEFORE TAX: 24,135,000 15,171,000}

^{Tax : 3,647,000 2,405,000}

^{Net income/loss year: 20,488,000 12,766,000}

^{Interest Paid: 358,000 326,000}

^{Depreciation: 4,229,000 3,525,000}

^{Dividends: 5,099,000 4,052,000}

^{Directors Emoluments: 2,752,000 1,977,000}

^{Wages and Salaries: 33,614,000 27,370,000}

^{Financial Income: 366,000 247,000}

RATIOS

^{31/12/2007 31/12/2006}

^{Turnover per employee: 94326.80
73155.67}

^{Net result / Turnover(%): 0.11
0.09}

^{Fin. Charges / Turnover(%): 0.00 0.00}

^{Stock / Turnover(%): 0.11 0.14}

^{Net Margin(%): 11.20 9.00}

^{Return on Equity(%): 23.69 17.06}

^{Return on Assets(%): 15.83 11.41}

^{Dividends Coverage: 4.02 3.15}

^{Net Working capital: 51955000.00
38025000.00}

^{Cash Ratio: 0.64 0.53}

^{Quick Ratio: 1.70 1.45}

^{Current ratio: 2.24
2.08}

^{Receivables Turnover: 87.55
82.50}

^{Leverage Ratio: 0.50 0.50}

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

^{THE FOLLOWING:}

^{NET WORTH:}

^{THE BALANCE SHEET WAS CONSIDERED PASSABLE
WITH NET WORTH IMPROVED BY} ^{15.62% FROM S$74,818,000 IN 2006 TO S$86,502,000 IN 2007. THIS WAS
DUE} ^{TO HIGHER REVENUE RESERVES OF S$36,418,000 (2006: S$24,068,000);
A} ^{RISE OF 51.31% FROM THE PRIOR YEAR.}

^LEVERAGE:

^{IN THE SHORT TERM, SUBJECT WAS LARGELY
FINANCED BY TRADE CREDITORS} ^{WHICH MADE UP 46.28% (2006: 51.28%) OF THE TOTAL CURRENT
LIABILITIES} ^{AND AMOUNTED TO S$19,348,000 (2006: S$18,055,000). THE
BREAKDOWN IS AS} ^FOLLOWS:

^{* TRADE CREDITORS - 2007: S$18,780,000 (2006:
S$17,454,000)}

^{* DUE TO AFFLIATED
COMPANY - 2007: S$568,000 (2006:
S$601,000)}

^{AMOUNT DUE TO BANKS OF
S$4,675,000 (2006: S$5,529,000) CONSISTED OF:}

^{* TERM LOAN - 2007: S$1,048,000 (2006:
S$1,081,000)}

^{* SHORT TERM BANK LOANS
- 2007: S$3,627,000 (2006: S$4,448,000)}

^{IN THE LONG TERM,
SUBJECT INCURRED THE FOLLOWING LIABILITIES:}

^{* TERM LOAN - 2007: S$395,000 (2006: S$1,095,000)}

^{* LEASE OBLIGATION - 2007: S$251,000 (2006: S$266,000)}

^{* DEFERRED TAXATION -
2007: S$429,000 (2006: S$449,000)}

^{IN ALL, LEVERAGE RATIO
REMAINED AT 0.50 TIMES AS A RESULT OF A} ^{PROPORTIONATE RISE IN BOTH TOTAL EQUITY AND TOTAL LIABILITIES.}

^LIQUIDITY:

^{IN GENERAL, SUBJECT'S LIQUIDITY SITUATION WAS
PASSABLE WITH THE RISE} ^{IN NET WORKING CAPITAL AND LIQUIDITY RATIOS. CURRENT RATIO ROSE TO} ^{2.24 TIMES, UP FROM 2.08 TIMES AND QUICK RATIO IMPROVED TO 1.70 TIMES} ^{FROM 1.45 TIMES IN 2006. SIMILARLY, NET WORKING CAPITAL ROSE BY 36.63%} ^{FROM S$38,025,000 IN 2006 TO S$51,955,000 IN 2007.}

^{CASH AND CASH
EQUIVALENTS COMPRISES OF:}

^{* FIXED DEPOSITS - 2007: S$13,452,000 (2006:
S$6,234,000)}

^{* CASH AND BANK BALANCES
- 2007: S$13,103,000 (2006: S$12,387,000)}

^{PROFITABILITY:}

^{REVENUE POSTED AN
INCREASE OF 28.94% FROM S$141,922,000 IN 2006 TO}

^{S$182,994,000 AND NET
PROFIT ROSE BY 60.49% TO S$20,488,000 (2006:}

^{S$12,766,000). HENCE,
NET MARGIN ROSE TO 11.20% (2006: 9.00%).}

^{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 S$358,000 (2006: S$326,000).}

^{NON-CURRENT ASSETS:}

^{THE FOLLOWING ITEMS ARE
CLASSIFIED UNDER PRELIMINARY:}

^{* LOAN TO AN INVESTEE
COMPANY - 2007: NIL (2006: S$10,674,000)}

^{NOTES TO THE FINANCIAL STATEMENTS:}

^{TERM LOANS/SHORT-TERM BANK LOANS}

^{(A) TERM LOAN}

^{* DUE WITHIN 1 YEAR - 2007: S$1,048,000 (2006:
S$1,081,000)}

^{* DUE BETWEEN 1 TO 5
YEARS - 2007: S$395,000 (2006:
S$1,095,000)}

^{DETAILS OF THE TERM LOAN
ARE AS FOLLOWS:}

^SUBSIDIARIES

^{TERM LOAN}

^{THE BANK LOAN AMOUNT OF
S$1,443,000 (2006: S$2,176,000) IS SECURED BY}

^{A CORPORATE GUARANTEE
FROM THE COMPANY AND A CHARGE OVER THE}

^{SUBSIDIARY'S FIXED ASSETS
WITH A NET BOOK VALUE OF APPROXIMATELY}

^{S$1,732,000 (2006:
S$1,810,000). IT IS REPAYABLE IN 60 MONTHLY}

^{INSTALMENTS FROM
NOVEMBER 2003 AND BEARS INTEREST AT THE MINIMUM}

^{LENDING RATE LESS 2.25%
PER ANNUM. THERE IS NO FIXED REPRICING PERIOD}

^{FOR THIS PERIOD.}

^{THE EFFECTIVE INTEREST
RATE ON TERM LOAN FOR THE YEAR RANGED FROM}

^{4.87% TO 6.12% (2006:
5.75% TO 6.25%) PER ANNUM.}

^{(B) SHORT TERM BANK
LOANS}

^{SHORT TERM BANK LOANS OF
THE GROUP AMOUNTING TO S$1,224,000 (2006:}

^{S$2,589,000) ARE SECURED
BY A CORPORATE GUARANTEE FROM THE COMPANY.}

^{THE REMAINING SHORT TERM
LOANS ARE UNSECURED. SHORT TERM BANK LOANS}

^{AMOUNTING TO S$1,248,000
(2006: S$1,321,000) ARE REPRICED EVERY 3}

^{MONTHS WHILE SHORT TERM
BANK LOANS AMOUNTING TO S$2,379,000 (2006:}

^{S$3,127,000) HAVE NO
FIXED REPRICING METHOD.}

^{THE LOANS ARE REPAYABLE
WITHIN THE NEXT 12 MONTHS AND BEAR INTEREST AT}

^{3.90% TO 7.06% (2006:
5,50% TO 6.98%) PER ANNUM.}

^{SHARE CAPITAL}

^{* ISSUED AND FULLY
REPAID AT THE BEGINNING OF THE YEAR}

^{- 2007: 505,659,000 SHARES
OF A VALUE OF S$47,858,000}

^{- 2006: 506,297,000
SHARES OF A VALUE OF S$50,630,000}

^{* ISSUED FOR CASH UNDER
EMPLOYEE SHARE OPTION PLAN}

^{- 2007: 7,445,000 SHARES
OF A VALUE OF S$848,000}

^{- 2006: 3,467,000 SHARES
OF A VALUE OF S$356,000}

^{* TRANSFER TO CAPITAL
REDEMPTION RESERVE PURSUANT TO BUY-BACK OF}

^{ORDINARY SHARE}

^{- 2007: NIL}

^{- 2006: -922,000 SHARES
OF A VALUE OF S$-92,000}

^{* SHARES BOUGHT BACK AND
CANCELLED}

^{- 2007: NIL}

^{- 2006: -3,1830,00
SHARES OF A VALUE OF S$-575,000}

^{* TRANSFER OF SHARE
PREMIUM RESERVE TO SHARE CAPITAL ACCOUNT}

^{- 2007: NIL}

^{- 2006: S$6,743,000}

^{* TRANSFER OF SHARE
DISCOUNT RESERVE TO SHARE CAPITAL ACCOUNT}

^{- 2007: NIL}

^{- 2006: S$-9,862,000}

^{* TRANSFER OF CAPITAL
REDEMPTION RESERVE TO SHARE CAPITAL ACCOUNT}

^{- 2007: NIL}

^{- 2006: S$658,000}

^{DURING THE YEAR, THE
COMPANY INCREASED ITS ISSUED AND PAID-UP CAPITAL} ^{VIA AN ALLOTMENT OF 7,445,267 (2006:
3,466,998) NEW ORDINARY SHARES} ^{FOR CASH PURSUANT TO THE EXERCISE OF
EMPLOYEE SHARE OPTIONS.}

^{DURING THE FINANCIAL YEAR, THE COMPANY BOUGHT
BACK 4,847,000 (2006:} ^{10,796,000 ORDINARY SHARES BY WAY OF MARKET ACQUISITION FOR A
TOTAL} ^{CONSIDERATION OF S$1,766,000 (2006: S$1,839,000). THE HIGHEST
AND} ^{LOWEST PRICES PAID FOR THE PURCHASES WERE S$0.430 AND S$0.170
(2006:} ^{S$0,195 AND S$0.015) RESPECTIVELY. THE REPURCHASE
TRANSACTIONS WERE} ^{MADE OUT OF SHAREHOLDERS' FUNDS.}

^{4,847,000 (2006: 6,691,000) OF THE ORDINARY
SHARES BOUGHT BACK FOR A} ^{TOTAL CONSIDERATION OF S$1,763,000 (2006: S$1,109,000) WERE
RETAINED} ^{AS SHARES HELD IN TREASURY, OF WHICH ASSOCIATED WITH THE REPURCHASE
OF} ^{S$3,000 (2006: S$3,000) ARE SET OFF AGAINST REVENUE RESERVE. IN
THE} ^{PREVIOUS FINANCIAL YEAR, 922,000 OF THE ORDINARY SHARES BOUGHT
BACK}

^{FOR A TOTAL CONSIDERATION OF S$92,200 WAS
USED TO REDUCE THE COMPANY'S} ^{SHARE CAPITAL AND TRANSFERRED TO CAPITAL REDEMPTION RESERVE AND} ^{3,183,000 OF THE ORDINARY SHARES BOUGHT BACK FOR A TOTAL CONSIDERATION} ^{OF S$575,000 WAS CANCELLED AGAINST THE COMPANY'S SHARE CAPITAL.}

^{THE HOLDERS OF ORDINARY SHARES ARE ENTITLED
TO RECEIVE DIVIDENDS AS} ^{AND WHEN DECLARED BY THE COMPANY. ALL ORDINARY SHARES EXCLUDING
SHARES} ^{HELD IN TRASURY CARRY ONE VOTE PER SHARE.}

^{IN ACCORDANCE WITH THE COMPANIES (AMENDMENT)
ACT 2005, ON 30 JANUARY} ^{2006, THE SHARES OF THE COMPANY CEASED TO HAVE A PAR VALUE AND THE} ^{AMOUNT STANDING IN THE SHARE PREMIUM, SHARE DISCOUNT AND CAPITAL} ^{REDEMPTION
RESERVE BECAME PART OF THE COMPANY'S SHARE CAPITAL.}

^{COMMITMENTS AND CONTINGENT LIABILITIES}

^{CAPITAL EXPENDITURE
COMMITMENTS}

^{AS AT 31 DECEMBER 2007,
THE GROUP HAD CAPITAL EXPENDITURE CONTRACTED}

^{BUT NOT PROVIDED FOR IN
THE FINANCIAL STATEMENTS AS FOLLOWS:}

^{* FIXED ASSETS PURCHASE
COMMITMENTS - 2007: S$26,000 (2006: S$112,000)}

^{CONTINGENT LIABILITIES}

^{(I) BANKERS' GUARANTEE}

^{IN PRIOR YEAR, THE COMPANY REQUESTED A BANK
TO ISSUE A BANKERS'} ^{GUARANTEE, IN THE NAME OF SLRL, OF S$155,750 IN FAVOUR OF LAND} ^{TRANSPORT AUTHORITY OF SINGAPORE. UNDER THE TERMS OF THE} ^{BANKERS'
GUARANTEE, THE COMPANY SHALL BE LIABLE FOR ANY CLAIMS}

^{MADE BY LAND TRANSPORT AUTHORITY OF SINGAPORE
AGAINST THE BANK}

^{TO THE EXTENT OF THE GUARANTEE AMOUNT. TO
INDEMNIFY THE COMPANY} ^{AGAINST SSLRPL'S SHARE OF LOSS SHOULD THE GUARANTEE CRYSTALLISE,} ^{A DIRECTOR OF SSLRPL HAS PLACED A DEPOSIT OF S$132,389 WITH THE} ^{COMPANY
AS SECURITY FOR THE COMPANY'S OBLIGATIONS IN CONNECTION} ^{WITH THE GUARANTEE;}

^{(II)
AS AT 31 DECEMBER 2007, THE COMPANY HAD GIVEN UNDERTAKINGS TO} ^{ARMSTRONG-ODENWALD (ASIA) PTE LTD AND
ARMSTRONG MECHANICAL} ^{COMPONENTS
COMPANY LIMITED TO PROVIDE FINANCIAL SUPPORT TO THESE} ^{SUBSIDIARY
COMPANIES, WHERE NECESSARY, TO ENABLE THESE COMPANIES} ^{TO OPERATE AS
GOING CONCERNS AND TO MEET THEIR OBLIGATIONS FOR}

^{AT LEAST 12 MONTHS FROM
THE DATE OF THIS REPORT; AND}

^{(III) AS AT 31 DECEMBER
2007, THE COMPANY HAD GIVEN CORPORATE}

^{GUARANTEES OF UP TO BAHT
150 MILLION (2006: BAHT 482 MILLION)}

^{AND US$4 MILLION (2006:
US$4 MILLION), EQUIVALENT TO}

^{S$12,122,000 (2006:
S$26,488,000) FOR BANKING FACILITIES GRANTED}

^{TO ITS SUBSIDIARY
COMPANIES.}

BACKGROUND/OPERATION

^{THE SUBJECT WAS
INCORPORATED IN THE REPUBLIC OF SINGAPORE ON} ^{15/10/1980 AS A PRIVATE COMPANY LIMITED
BY SHARES UNDER THE NAMESTYLE} ^{OF "ARMSTRONG INDUSTRIES
SINGAPORE PTE LTD".}

^{SUBSEQUENTLY, ON
09/11/1995, SUBJECT CHANGED TO ITS PRESENT NAME} ^{OF "ARMSTRONG INDUSTRIAL
CORPORATION LIMITED" AND IS TRADING AS A} ^{PUBLIC COMPANY LIMITED
BY SHARES.}

^{SUBJECT WAS LISTED ON 06/12/1995 ON SGX
MAINBOARD.}

^{THE COMPANY HAS AN ISSUED AND PAID-UP CAPITAL
OF} ^{514,181,642
SHARES, OF A VALUE OF S$48,835,548.86. THE COMPANY HAS} ^{ISSUED
TREASURY OF 14,738,000 SHARES OF A VALUE OF S$3,984,108.74.}

^{PRINCIPAL ACTIVITIES:}

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

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

^{1) MANUFACTURE OF
INDUSTRIAL & MECHANICAL RUBBER GOODS}

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

^{OF THE COMPANY ARE THOSE
OF INVESTMENT HOLDING AND THE MANUFACTURE}

^{AND SALE OF PRECISION
DIE-CUT FOAM AND RUBBER MOULDED COMPONENTS FOR}

^{A WIDE RANGE OF
TECHNOLOGY AND OTHER APPLICATIONS.}

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

^{THE GROUP IS ORGANISED
ON A WORLDWIDE BASIS INTO 5 MAIN OPERATING}

^{DIVISIONS, NAMELY:}

^{* INFORMATION TECHNOLOGY}

^{* OFFICE AUTOMATION}

^{* CONSUMER
ELECTRONICS/TELECOMMUNICATIONS}

^{* AUTOMOTIVE}

^{* INDUSTRIAL ENGINEERING}

^{OTHER OPERATIONS INCLUDE
THE PRINTING BUSINESS AND TRADING OF ADHESIVE}

^{AND FOAM PRODUCTS.}

^PRODUCTS:

^{* DIE-CUTTING}

^{- POLYURETHANE FOAM}

^{- MICROCELLULAR FOAM}

^{- FILTER FOAM}

^{- POLYVINYL FOAM}

^{- POLYETHYLENE FOAM}

^{- MELAMINE FOAM}

^{- EVA, EPP}

^{* STAMPING}

^{- FILM MATERIALS}

^{- POLYESTER (PET) FILMS}

^{- POLYVINYL CHLORIDE
(PVC) FILMS}

^{- POLYCARBONATE (PC)
FILMS}

^{- POLYPROPYLENE (PP)
FILMS}

^{- POLYAMIDE FILMS}

^{- POLYVINYL FLOURIDE
(PVF) FILMS}

^{- METAL MATERIALS}

^{- ALUMINIUM SHEETS/FOILS}

^{- STAINLESS STEEL}

^{- BRASS}

^{- BERYLLIUM COPPER}

^{- COPPER FOIL}

^{- COLD ROLLED STEEL}

^{- PHOSPHER BRONZE}

^{- CUSTOMER SPECIFIED
MATERIALS}

^{* RUBBER MOULDING}

^{- NATURAL RUBBER (NR)}

^{- BUTYL RUBBER (IIR)}

^{- CHLORINATED
POLYETHYLENE (CPE)}

^{- STYRENE BUTADIENE
RUBBER (SBR)}

^{- NEOPRENE RUBBER (CR)}

^{* VACUUM FORMING / HEAT
PRESS MOULDING}

^{- THERMOPLASTIC POLYETHYLENE
FOAM}

^{BRAND NAMES:}

^{* BRIDGESTONE - FOAM & SPONGE}

^{* RUBATEX - INSULATION MATERIALS}

^{* SELLOTAPE - PVC FOAM}

^{TERMS OF PAYMENT:}

^{* TRADE AND OTHER
RECEIVABLES: 30 - 120 DAY TERMS}

^{* TRADE AND OTHER
PAYABLES : 30 - 120 DAY TERMS}

^{MARKET PRESENCE:}

^{* SINGAPORE, THAILAND,
MALAYSIA, INDONESIA, CHINA.}

^{MANUFACTURING LOCATIONS}

^{* THAILAND (5 FACTORIES)}

^{* CHINA (6 FACTORIES)}

^{* MALAYSIA (6 FACTORIES)}

^{* INDONESIA (1 FACTORY)}

^{* VIETNAM (1 FACTORY)}

^{MAJOR INDUSTRIES SERVED:}

^{* DATA STORAGE}

^{* OFFICE AUTOMATION}

^{* CONSUMER ELECTRONICS}

^{* AUTOMOTIVE}

^AWARDS:

^{* ISO 9001: 2000}

^{* ISO 14001: 1996}

^{* QS 9000: 1998}

^{* TS 16949: 2002}

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

^{* SINGAPORE
MANUFACTURERS' FEDERATION}

^{FROM THE TELE-INTERVIEW
CONDUCTED, SUBJECT PERSONNEL WAS} ^{ONLY WILLING TO CONFIRM ITS ADDRESS AND CONTACTS. NO OTHER TRADE} ^{INFORMATION WAS AVAILABLE}

^{NUMBER OF EMPLOYEES:}

^{* GROUP - 2007: N.A. (2006: N.A.; 2005: N.A.; 2004:
1,940;}

^{2003: 1,820; 2002: N.A;
2001: 1,077;}

^{2000: 1,068)}

^{* COMPANY - 2007: N.A.
(2006: N.A.; 2005: N.A.; 2004: 233;}

^{2003: 239; 2002: NA;
2001: 207;}

^{2000: 218)}

^{REGISTERED AND BUSINESS
ADDRESS:}

^{531 BUKIT BATOK STREET
23}

^{ARMSTRONG INDUSTRIAL
BUILDING}

^{SINGAPORE 659547}

^{DATE OF CHANGE OF
ADDRESS: 19/11/1997}

^{- RENTED PREMISE}

^{- PREMISE OWNED BY: HSBC
INSTITUTIONAL TRUST SERVICES (SINGAPORE)}

^{WEBSITE : www.armstrong.com.sg}

^{EMAIL :
aicl@armstrong.com.sg}

MANAGEMENT

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

^{1) KOH GIM HOE, A
SINGAPOREAN}

^{- HOLDS OTHER DIRECTORSHIP(S)
AS RECORDED IN OUR DATABASE:}

^{NT VISION PTE LTD}

^{2) ONG PENG KOON,
GILBERT, A SINGAPOREAN}

^{- HOLDS OTHER
DIRECTORSHIP(S) AS RECORDED IN OUR DATABASE:}

^{NT VISION PTE LTD}

^{ARMSTRONG RUBBER
MANUFACTURING PTE LTD}

^{3) CHOW GOON CHAU, PATRICIA,
A SINGAPOREAN}

^{- HOLDS OTHER
DIRECTORSHIP(S) AS RECORDED IN OUR DATABASE:}

^{ARMSTRONG RUBBER
MANUFACTURING PTE LTD}

^{4) ANTHONY ANG MENG
HUAT, A SINGAPOREAN}

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

^{5) TAN PENG CHIN, A
SINGAPOREAN}

^{- HOLDS OTHER
DIRECTORSHIP(S) AS RECORDED IN OUR DATABASE:}

^{HUBER + SUHNER
(SINGAPORE) PTE LTD}

^{6) CHAN PEE TECK PETER,
A SINGAPOREAN}

^{- HOLDS OTHER
DIRECTORSHIP(S) AS RECORDED IN OUR DATABASE:}

^{TECKWAH INDUSTRIAL
CORPORATION LTD}

^{ARMSTRONG INDUSTRIAL
CORPORATION LIMITED}

^{SEKSUN CORPORATION
LIMITED}

^{MAYFRAN INTERNATIONAL
LTD}

^{POPULAR HOLDINGS LIMITED}

^{BCEA MANAGEMENT PTE LTD}

^{BPEP HOLDINGS (ASIA)
PRIVATE LIMITED}

^{ASIATRADEMART.COM PTE
LTD}

^{NORELCO UMS HOLDINGS
LIMITED}

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 5.4% IN 4Q 2007, SLOWER THAN THE 9.5% GROWTH IN 3Q 2007. GROW MOMENTUM WAS LED BY CONSTRUCTION AND FINANCIAL SERVICES. FOR THE WHOLE OF 2007, THE ECONOMY GREW BY 7.7%, DOWN FROM 8.2% IN 2006.

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 SECTOR. ON THE OTHER HAND, ELECTRONICS, CHEMICALS, PRECISION ENGINEERING AND TRANSPORT ENGINEERING SECTOR PERFORMED BETTER. OVERALL, THE MANUFACTURING SECTOR POSTED A 5.8% GROWTH IN 2007, DOWN FROM 12.0% IN 2006.

THE FINANCIAL SERVICES SECTOR ROSE SIGNIFICANTLY BY 16% IN 4Q 2007, FOLLOWING A 20% GROWTH IN THE PREVIOUS QUARTER. MOST SECTORS EXPERIENCE STRONG EXPANSION WITH THE EXCEPTION OF STOCK BROKING AND FUND MANAGEMENT ACTIVITIES WHICH HAVE SLOWED DOWN. OVERALL, THE FINANCIAL SERVICES SECTOR POSTED A 17% GROWTH IN 2007, HIGHER THAN 11.0% IN 2006.

THE CONSTRUCTION SECTOR REGISTERED A STRONG GROWTH. THE SECTOR GREW BY 24%, FOLLOWING 20% GAIN IN 3Q 2007. GROWTH MOMENTUM FOR THE WHOLE YEAR GREW 20%, ITS FASTEST GROWTH SINCE 1996.

THE WHOLESALE AND RETAIL TRADE SECTOR GREW BY 6.0% IN 4Q 2007, SLOWER THAN THE 6.8% GROWTH IN 3Q 2007. NON-OIL RE-EXPORTS SAW GROWTH REDUCED FROM 9.0% IN 3Q 2007 TO 7.0% IN 4Q 2007. RETAIL SALES FELL BY 2.5% IN 4Q 2007, FOLLOWING A 1.5% GROWTH IN 3Q 2007. OVERALL, THE WHOLESALE AND RETAIL TRADE SECTOR POSTED A 7.3% GROWTH IN 2007, DOWN FROM 10.0% IN 2006.

THE TRANSPORT AND STORAGE SECTOR ROSE BY 5.4% IN 4Q 2007, FROM 5.0% IN 3Q 2007. HIGHER GROWTH IN THE SEA TRANSPORT SEGMENT WAS OFFSET BY SLOWER GROWTH IN THE AIR TRANSPORT SEGEMENT. OVERALL, THE TRANSPORT AND STORAGE SECTOR POSTED A 5.1% GROWTH IN 2007, UP FROM 4.7% IN 2006.

THE HOTELS AND RESTAURANTS SECTOR GREW BY A SMALLER 2.5% FROM 4.9% IN 3Q 2007. VISITOR ARRIVALS ROSE 5.5% IN 4Q 2007, SIMILAR TO 5.4% RISE IN 3Q 2007. HOWEVER, THE AVERAGE OCCUPANCY RATE OF HOTELS DIPPED TO 86.0% IN 4Q 2007 FROM 88.0% IN 4Q 2006. VISITOR ARRIVALS ROSE 5.4% TO REACH A RECORD OF 10.3 MILLION IN 2007. OVERALL, THE HOTELS AND RESTAURANTS SECTOR POSTED A 4.4% GROWTH IN 2007, DOWN FROM 4.8% IN 2006.

THE INFORMATION AND COMMUNICATIONS SECTOR ROSE 6.1% IN 4Q 2007, SLIGHTLY SLOWER THAN THE 6.6% IN 3Q 2007. BOTH THE TELECOMMUNICATIONS AND IT SERVICES SEGMENTS REMAINED HEALTHY DURING THE QUARTER. FOR THE TELECOMMUNICATIONS SEGMENT, THE GROWTH OF INTERNATIONAL TELEPHONE CALLS DURATION AND NUMBER OF SUBSCRIBERS FOR BOTH MOBILE PHONE SERVICE AND BROADBAND INTERNET REMAINED STRONG. OVERALL, THE INFORMATION AND COMMUNICATIONS SECTOR POSTED A 6.3% GROWTH IN 2007, UP FROM 4.6% IN 2006.

THE BUSINESS SERVICES SECTOR EXPANDED BY 8.7%, HIGHER THAN THE 7.5% GAIN IN 3Q 2007. GROWTH WAS HEALTHY ACROSS ALL SEGMENTS, WITH GOOD PERFORMANCES IN THE BUSINESS REPRESENTATIVE OFFICES AND REAL ESTATE SEGMENTS. OVERALL, THE BUSINESS SERVICES SECTOR POSTED A 7.8% GROWTH IN 2007, UP FROM 6.9% IN 2006.

NEWS

SINGAPORE ECONOMY GROWS 7.2% ON STRONG SHOWING IN MANUFACTURING

SINGAPORE’S ECONOMY TURNED OUT TO BE SURPRISINGLY RESLIENT IN THE FIRST QUARTER, EASILY BEATING MARKET EXPECTATIONS WITH STRONG GROWTH OF 7.2%.

THE ADVANCE ESTIMATES ISSUED BY THE MINISTRY OF TRADE AND INDUSTRY (MTI) REPORTED YESTERDAY WERE A MARKED IMPROVEMENT OVER THE 5.4% POSTED IN THE FINAL QUARTER OF LAST YEAR. EARLIER REPORTS HAD SUGGESTED MARKET EXPECTATIONS OF 5.9% GROWTH. ON A SEASONALLY ADJUSTED ANNUALISED BASIS, THE ECONOMY GREW AT A BREAKNECK RATE OF 16.9% QUARTER-ON-QUARTER. IT SHRANK 4.8% IN 4Q 2007.

HOWEVER, ECONOMISTS DO NOT BELIEVE THE STRONG PERFORMANCE SIGNIFIES AN UPTREND FOR THE REST OF THE YEAR. THEY POINT TO A POTENTIAL RECESSION IN THE UNITED STATES AND RISING GLOBAL INFLATION.

MANUFACTURING AND SERVICES WERE CONTRIBUTORS TO THE BETTER-THAN-EXPECTED FIRST QUARTER GROWTH.

MANUFACTURING IS ESTIMATED TO HAVE EXPANDED BY 13.2% IN THE FIRST QUARTER, COMPARED TO A SMAL 0.2% RISE IN THE PREVIOUS THREE MONTHS. IT WAS ALSO CONSIDERABLY HIGHER THAN THE 3.9% REGISTERED IN 1Q 2007.

THIS WAS LARGELY DUE TO A SURGE IN BIOMEDICAL MANUFACTURING OUTPUT. THE REST OF THE MANUFACTURING CLUSTERS ALSO ENJOYED BETTER PERFORMANCES

WITH THE EXCEPTION OF TRANSPORT ENGINEERING AND PRECISION ENGINEERING CLUSTER WHO ENJOY MODERATE GROWTH.

SERVICES INDUSTRIES GROW 7.6%, SIMILAR TO THE 7.7% IN 4Q 2007 AS WELL AS IN 1Q 2007. FINANCIAL SERVICES CONTINUED TO BE THE FASTEST-GROWING AMONG THE SERVICES SECTORS.

HOWEVER, THE FIGURE FOR THE SLOWING CONSTRUCTION SECTOR WAS LESS ROSY WITH GROWTH SLIPPING TO 14.6% FROM 24.3% IN 4Q 2007.

UNITED OVERSEAS BANK ECONOMIST HO WOEI CHEN SAID THIS WAS DISAPPOINTING,

AFTER THREE QUARTERS OF GROWTH ABOVE 20.0%. BUT SHE STILL EXPECTED THE SECTOR TO CONTRIBUTE TO GROWTH THIS YEAR, ON THE BACK OF INFRASTRCTURE PROJECTS SUCH AS THE INTEGRATED RESORTS AND THE PROPOSED SPORTS HUB IN KALLANG.

ECONOMISTS WERE SURPRISED BY WHAT THEY SAID AMOUNTED TO A CONTRACTION IN THE INDUSTRY BUT THEY REMAINED CONFIDENT THAT GROWTH WAS STILL HEALTHY AND IN LINE WITH THEIR FORECASTS FOR THE YEAR, WHICH RANGED FROM 10.0%

TO 25.0%.

CIMG-GK ECONOMIST SOGN SENG WUN SAID THAT RISING INFLATION, ESPECIALLY FOR FOOD PRICES, WILL BE A MAJOR CONCERN. “PEOPLE ARE FOCUSING ON ISSUES SUCH AS THE RISING PRICE OF RICE AND THIS IS SOMETHING THAT COULD PERSIST FOR THE REST OF THE YEAR”.

NONE OF THE ECONOMISTS INTERVIEWED REVISE FULL-YEAR GROWTH FORECASTS WHICH RANGE FROM 4.7% TO 5.5%. MTI HAS FORECAST A RANGE OF 4.0% TO 6.0% FOR THE YEAR.

OUTLOOK

AFTER THE LAST REVIEW IN NOVEMBER 2007, THE OUTLOOK FOR EXTERNAL DEMAND IN 2008 HAS WORSENED AND THERE ARE INCREASED DOWNSIDE RISKS.

COMPARED TO THE FORECAST THREE MONTHS AGO, THERE IS BROAD CONSENSUS NOW THAT THE US ECONOMY IS ENTERING A SLOWDOWN. THE LENGTH AND SEVERITY OF THE SLOWDOWN REMAINS TO BE SEEN, AND IT WILL AFFECT COUNTRIES WORLDWIDE AND KEY INDUSTRIES.

TAKING INTO ACCOUNT THE RISE IN DOWNSIDE RISKS, THE MINISTRY OF TRADE AND INDUSTRY LOWERED THE ECONOMIC FORECAST FOR THE SINGAPORE ECONOMY TO GROW BY 4.0-6.0% IN 2008, DOWN FROM THE GROWTH FORECAST OF 4.5-6.5% EARLIER.

CURRENT CONDITIONS INDICATE THAT THE US ECONOMY WILL LIKELY ENTER A MILD RECESSION IN THE FIRST HALF BUT ITS STRONG FUNDAMENTALS, COUPLED WITH FISCAL AND MONETARY STIMULUS, WILL ASSIST TO SUPPORT RECOVERY IN THE SECOND HALF. REGIONAL ECONOMIES WILL HAVE MODERATE BUT HEALTHY GROWTH. SINGAPORE’S GDP GROWTH WILL THEN BE IN THE UPPER HALF OF THE FORECAST RANGE. HOWEVER, IF THE US FALLS INTO A MORE SEVERE RECESSION, THE REGION WILL BE MORE SIGNIFICANTLY AFFECTED. THE IMPACT ON THE SINGAPORE ECONOMY WILL ALSO BE STRONGER, PARTICULARLY IN THE SENTIMENT-SENSITIVE AND EXPORT-ORIENTED SECTORS LIKE FINANCIAL SERVICES, WHOLESALE TRADE AND ELECTRONICS. IN THIS ENVIRONMENT, THE SINGAPORE ECONOMY WILL GROW AT A SLOWER PACE, NEARER THE LOWER END OF THE FORECAST RANGE.

IN THE FINANCIAL SERVICES INDUSTRY, A NET WEIGHTED BALANCE OF 19% OF FIRMS, ESPECIALLY INSURANCE COMPANIES AND FIRMS PROVIDING CREDIT CARD SERVICES, REMAINS POSITIVE ABOUT THE BUSINESS OUTLOOK IN THE MONTHS AHEAD.

IN THE REAL ESTATE INDUSTRY, A NET WEIGHTED BALANCE OF 17% OF FIRMS,

EXPECT BUSINESS TO BE BRISK FOR THE COMING MONTHS.

MANUFACTURING FIRMS ARE 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.

GENERALLY, WHOLESALERS ARE POSITIVE ABOUT THEIR BUSINESS PROSPECTS IN THE COMING MONTHS, WITH A NET WEIGHTED BALANCE OF 4% OF FIRMS EXPRESSING POSITIVE BUSINESS SENTIMENTS. THE MAJORITY OF WHOLESALERS OF PETROLEUM AND PETROLEUM PRODUCTS, CHEMICALS AND CHEMICAL PRODUCTS, INDUSTRIAL MACHINERY AND EQUIPMENT AND COMPUTERS AND ACCESSORIES FORECAST BUSINESS OUTLOOK TO REMAIN THE SAME IN THE FIRST SIX MONTHS OF 2008 COMPARED WITH THE LAST SIX MONTHS IN 2007.

A NET WEIGHTED BALANCE OF 12% OF RETAILERS PREDICTS LESS FAVOURABLE BUSINESS CONDITIONS FOR THE PERIOD ENDING JUNE 2008. AS A RESULT OF THE REDUCED CERTIFICATE OF ENTITLEMENT (COE) QUOTA, MOTOR VEHICLES RETAILERS ARE ESPECIALLY CONCERNED WITH THE SALES.

IN THE TRANSPORT AND STORAGE INDUSTRY, A NET WEIGHTED BALANCE OF 5% OF FIRMS FORECASTS LESS FAVOURABLE BUSINESS CONDITIONS FOR THE COMING MONTHS.

IN THE SERVICES INDUSTRY, A NET WEIGHTED BALANCE OF 8% OF FIRMS,

EXPECT BUSINESS TO BE BRISK FOR THE COMING MONTHS. THIS IS SMALLER THAN THE 18% REGISTERED IN THE SAME PERIOD LAST YEAR AND THE 23% RECORDED IN THE PREVIOUS QUARTER. HOTELIERS REMAIN BULLISH ON BUSINESS CONDITIONS FOR THE COMING MONTHS, WITH A NET WEIGHTED BALANCE OF 35% OF HOTELIERS EXPECTING THEIR BUSINESSES TO RISE IN ANTICIPATION OF EXPECTED INCREASES IN ROOM RATES AND HIGHER OCCUPANCY RATES. IN THE CATERING TRADE INDUSTRY, A NET WEIGHTED BALANCE OF 27% OF CATERERS ANTICIPATES MORE FAVOURABLE BUSINESS CONDITIONS.

IN THE INFORMATION AND COMMUNICATIONS INDUSTRY, A NET WEIGHTED BALANCE OF 9% OF FIRMS PREDICTS A HIGHER DEMAND FOR THEIR SERVICES, IN PARTICULAR THE NETWORK OPERATORS.

IN THE BUSINESS SERVICES INDUSTRY, AN OVERALL NET WEIGHTED BALANCE OF 19% OF FIRMS EXPECTS POSITIVE SENTIMENTS. THESE INCLUDE ACCOUNTING, BOOK-KEEPING AND AUDITING, RENTING OF CONSTRUCTION AND INDUSTRIAL MACHINERY AND RENTING OF TRANSPORT EQUIPMENT.

EXTRACTED FROM: MINISTRY OF TRADE AND INDUSTRY, SINGAPORE

SINGAPORE DEPARTMENT OF STATISTICS

THE STRAITS TIMES

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