MIRA INFORM REPORT

Report Date :

08.05.2008

IDENTIFICATION DETAILS

Name :	CIMELIA RESOURCE RECOVERY PTE. LTD.
Registered Office :	^3 Tuas Avenue 2 639443
Country :	Singapore
Financials (as on) :	31.12.2006
Date of Incorporation :	^27.02.2004
Com. Reg. No.:	^200402265E
Legal Form :	^Pte Ltd
Line of Business :	Electronic Waste Recycling Company Providing E-Waste Management, Recycling and Platinum Group Metals Recovery and Refining.

RATING & COMMENTS

MIRA’s Rating :

A

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 :	Exists

Subject Company

CIMELIA RESOURCE RECOVERY PTE. LTD.

Line Of Business 

ELECTRONIC WASTE RECYCLING COMPANY PROVIDING E-WASTE MANAGEMENT, RECYCLING AND PLATINUM GROUP METALS RECOVERY AND REFINING.

Parent Company

ENVIRO-HUB HOLDINGS LTD

(PERCENTAGE OF SHAREHOLDING: 100%)

Financial Elements

FY 2006

COMPANY

Sales : US$22,085,738

Networth : US$11,775,911

Paid-Up Capital : US$9,666,086

Net result : US$-296,187

Net Margin(%) : -1.34

Return on Equity(%) : -2.52

Leverage Ratio : 3.14

COMPANY IDENTIFICATION

^{Subject Company : CIMELIA RESOURCE RECOVERY PTE. LTD.}

^{Former Name : -}

^{Business Address : 3 TUAS AVENUE 2}

^{Town : SINGAPORE}

^{Postcode : 639443}

^{County : -}

^{Country : Singapore}

^{Telephone : 6898 0808}

^{Fax : 6898 0888}

^{ROC Number : 200402265E}

SUMMARY

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

^{Legal Form : Pte Ltd}

^{Date Inc. : 27/02/2004}

^{Previous Legal Form : -}

^{Summary year : 31/12/2006}

^{Sales : 22,085,738}

^{Networth : 11,775,911}

^{Capital : -}

^{Paid-Up Capital : 9,666,086}

^{Employees : 65}

^{Net result : -296,187}

^{Share value : -}

^{Auditor : KPMG}

^{BASED ON ACRA'S RECORD}

^{NO OF SHARE CURRENCY AMOUNT}

^{ISSUED ORDINARY 7,558,579 SGD 7,558,579.00}

^{PAID-UP ORDINARY - SGD 7,558,579.00}

REFERENCES

^{Litigation : YES}

^{Company status : TRADING}

^{Started : 27/02/2004}

PRINCIPAL(S)

^{SEOW BAO SHUEN S1792093F Director}

DIRECTOR(S)

^{SONG HWEE TIONG S1661149B Company Secretary}

^{Appointed on : 22/03/2004}

^{Street : 6B LA SALLE STREET}

^{LA SALLE VILLAS}

^{Town: SINGAPORE}

^{Postcode: 456958}

^{Country: Singapore}

^{SEOW BAO SHUEN S1792093F Director}

^{Appointed on : 07/04/2004}

^{Street : 683 TESSENSOHN ROAD}

^#04-123

^{Town: SINGAPORE}

^{Postcode: 210683}

^{Country: Singapore}

^{CHUNG THIM SUI S2016201E Director}

^{Appointed on : 22/03/2004}

^{Street : 31 FUDU PARK}

^{FUDU PARK}

^{Town: SINGAPORE}

^{Postcode: 789563}

^{Country: Singapore}

^{MOHAMED GANI MOHAMED ANSARI S2657119G Director}

^{Appointed on : 27/02/2004}

^{Street : 8 CHWEE CHIAN ROAD}

^{Town: SINGAPORE}

^{Postcode: 119750}

^{Country: Singapore}

^{VENTATESHA MURTHY S2716834E Director}

^{Appointed on : 27/02/2004}

^{Street : 49 HILLVIEW AVENUE}

^#05-07

^{HILLINGTON GREEN}

^{Town: SINGAPORE}

^{Postcode: 669615}

^{Country: Singapore}

ACTIVITY(IES)

^{SCRAP METALS Code:19045}

^{IMPORTERS And EXPORTERS Code:11760}

^{BASED ON ACRA'S RECORD}

^{1. RECYCLING OF METAL WASTE AND SCRAP}

^{2. GENERAL WHOLESALE TRADE (INCLUDING GENERAL IMPORTERS AND EXPORTERS)}

CHARGES

^{Date: 19/01/2006}

^{Comments : CHARGE NO: C200600498}

^{AMOUNT SECURED: 0.00 AND ALL MONIES OWING}

^{CHARGEE: UNITED OVERSEAS BANK LTD}

^{Date: 27/07/2004}

^{Comments : CHARGE NO: C200403690}

^{AMOUNT SECURED: 0.00 AND ALL MONIES OWING}

^{CHARGEE: UNITED OVERSEAS BANK LTD}

PREMISES/PROPERTY INFORMATIONS

No Premises/Property Information In Our Databases

BANKERS

^{UNITED OVERSEAS BANK LIMITED}

ASSOCIATED COMPANY(IES)

^{GREEN HYDROCARBON PTE. LTD.}

^Singapore

SHAREHOLDERS(S)

^{ENVIRO-HUB HOLDINGS LTD 7,558,579 Company}

^{Street : 20 GUL WAY}

^{Town: SINGAPORE}

^{Postcode: 629196}

^{Country: Singapore}

FORMER SHAREHOLDER(S)

^{SEOW BAO SHUEN 4,900,000}

^{MOHAMED GANI MOHAMED ANSARI 50,000}

^{VENTATESHA MURTHY 50,000}

HOLDING COMPANY

^{ENVIRO-HUB HOLDINGS LTD 199802709E % : 100}

SUBSIDIARY(IES)

No Participation In Our Database

PAYMENT HISTORY AND EXPERIENCES

^{Trade Morality: AVERAGE}

^{Liquidity : SUFFICIANT}

^{Payments : REGULAR}

^{Trend : DOWNWARD}

^{Financial Situation: AVERAGE}

LITIGATION(S)

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

^{Case Number: HWS00665/2007}

Defendant CIMELIA RESOURCE RECOVERY PTE. LT ROC # : 200402265E

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

^{Case Number: HWS00414/2005}

Defendant CIMELIA RESOURCE RECOVERY PTE. LT ROC # : 200402265E

FINANCIAL ELEMENTS

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

^{Audit Qualification: UNQUALIFIED (CLEAN) "MILD" UNCERTAINTIES "MILD" UNCERTAINTIES}

^{Date Account Lodged: 27/09/2007}

^{Balance Sheet Date: 31/12/2006 31/12/2005 31/12/2004}

^{Number of weeks: 52 52 39}

^{Consolidation Code: COMPANY COMPANY COMPANY}

^{--- ASSETS ---}

^{Tangible Fixed Assets: 5,254,609 9,571,067 7,234,285}

^{Total Fixed Assets: 5,254,609 9,571,067 7,234,285}

^{Inventories: 36,944,537 10,605,899 1,825,010}

^{Receivables: 2,489,180 6,620,803 1,256,422}

^{Cash,Banks, Securitis: 537,425 1,349,361 719,277}

^{Other current assets: 3,559,101 519,060 81,977}

^{Total Current Assets: 43,530,243 19,095,123 3,882,686}

^{TOTAL ASSETS: 48,784,852 28,666,190 11,116,971}

^{--- LIABILITIES ---}

^{Equity capital: 9,666,086 4,573,170 2,941,672}

^{Reserves: - - 127,926}

^{Profit & loss Account: 2,109,825 2,406,012 406,435}

^{Surplus equity: - 5,092,916 -}

^{Total Equity: 11,775,911 12,072,098 3,476,033}

^{Long Term Loans: 3,794,705 4,334,198 2,290,939}

^{L/T deffered taxes: 460,000 375,293 100,476}

^{Other long term Liab.: 312,486 395,680 115,858}

^{Total L/T Liabilities: 4,567,191 5,105,171 2,507,273}

^{Trade Creditors: 3,895,320 998,104 1,600,858}

^{Prepay. & Def. charges: 831,337 630,956 -}

^{Short term liabilities: 179,934 120,047 30,361}

^{Due to Bank: 16,101,185 7,145,220 1,705,494}

^{Provisions: 107,946 187,772 5,194}

^{Other Short term Liab.: 11,326,028 2,406,822 1,791,758}

^{Total short term Liab.: 32,441,750 11,488,921 5,133,665}

^{TOTAL LIABILITIES: 37,008,941 16,594,092 7,640,938}

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

^{Net Sales 22,085,738 24,421,601 2,802,220}

^{Purchases,Sces & Other Goods:17,781,076 20,038,376 1,716,419}

^{Gross Profit: 4,304,662 4,383,225 1,085,801}

^{Result of ordinary operations 861,379 2,878,141 -}

^{NET RESULT BEFORE TAX: -126,238 2,443,726 508,741}

^{Tax : 169,949 457,512 102,306}

^{Net income/loss year: -296,187 1,986,214 406,435}

^{Interest Paid: 987,617 434,415 30,952}

^{Depreciation: 1,242,232 847,539 120,652}

^{Directors Emoluments: 145,896}

^{Wages and Salaries: 1,265,830 873,203 251,448}

RATIOS

^{31/12/2006 31/12/2005 31/12/2004}

^{Turnover per employee: 339780.58 375716.94 43111.08}

^{Net result / Turnover(%): -0.01 0.08 0.15}

^{Fin. Charges / Turnover(%):0.04 0.02 0.01}

^{Stock / Turnover(%): 1.67 0.43 0.65}

^{Net Margin(%): -1.34 8.13 14.50}

^{Return on Equity(%): -2.52 16.45 11.69}

^{Return on Assets(%): -0.61 6.93 3.66}

^{Net Working capital: 11088493.00 7606202.00 -1250979.00}

^{Cash Ratio: 0.02 0.12 0.14}

^{Quick Ratio: 0.09 0.69 0.38}

^{Current ratio: 1.34 1.66 0.76}

^{Receivables Turnover: 40.57 97.60 161.41}

^{Leverage Ratio: 3.14 1.37 2.20}

^{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}

^{Inventory Turnover : (360*Inventories)/Net sales}

^{Receivables Turnover : (Receivable*360)/Net sales}

^{Leverage Ratio : Total liabilities/(Total equity-Intangible assets)}

FINANCIAL COMMENTS

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

^{NET WORTH:}

^{THE BALANCE SHEET WAS CONSIDERED PASSABLE WITH NET WORTH DECLINING BY 2.45% FROM US$12,072,098 IN FY 2005 TO US$11,775,911 IN FY 2006. THIS WAS DUE TO LOWER ACCUMULATED PROFIT OF US$2,109,825 (2005: US$2,406,012); A DECLINE OF 12.31% FROM THE PRIOR FINANCIAL YEAR.}

^LEVERAGE:

^{IN THE SHORT-TERM, SUBJECT WAS LARGELY FINANCED BY AMOUNT DUE TO BANKS WHICH MADE UP 49.63% (2005: 62.19%) OF THE TOTAL CURRENT LIABILITIES AND AMOUNTED TO US$16,101,185 (2005: US$7,145,220). THE BREAKDOWN IS AS FOLLOWS:}

^{* TRUST RECEIPTS (SECURED) - 2006: US$15,153,507 (2005: US$6,336,121)}

^{* SECURED BANK LOANS - 2006: US$947,678 (2005: US$809,099)}

^{IN THE LONG-TERM, SUBJECT WAS LARGELY FINANCED BY LONG-TERM LOANS WHICH MADE UP 83.09% (2005: 84.89%) OF THE TOTAL CURRENT LIABILITIES AND AMOUNTED TO US$3,794,705 (2005: US$4,334,198). THE BREAKDOWN IS AS FOLLOWS:}

^{* SECURED BANK LOANS - 2006: US$3,794,705 (2005: US$4,334,198)}

^{IN ALL, LEVERAGE RATIO ROSE FROM 1.37 TIMES TO 3.14 TIMES AS A RESULT}

^{OF A RISE IN TOTAL LIABILITIES AND A DECLINE IN TOTAL EQUITY.}

^LIQUIDITY:

^{IN GENERAL, SUBJECT'S LIQUIDITY SITUATION WAS PASSABLE AS SEEN FROM THE CHANGES IN NET WORKING CAPITAL AND LIQUIDITY RATIOS. CURRENT RATIO FELL TO 1.34 TIMES, DOWN FROM 1.66 TIMES AND QUICK RATIO FELL TO 0.09 TIMES FROM 0.69 TIMES IN FY 2005.}

^{NET WORKING CAPITAL IMPROVED BY 45.78% FROM US$7,606,202 IN FY 2005 TO US$11,088,493.}

^{PROFITABILITY:}

^{REVENUE POSTED A DECLINE OF 9.56% FROM US$24,421,601 IN FY 2005 TO}

^{US$22,085,738 AND NET PROFIT DROPPED BY 1.15 TIMES TO US$-296,187}

^{(2005: US$1,986,214). HENCE, NET MARGIN FELL TO -1.34% (2005: 8.13%).}

^REVENUE:

^{* SALE OF GOODS - 2006: US$21,865,192 (2005: US$24,136,381)}

^{* SERVICES RENDERED - 2006: US$220,546 (2005: US$285,220)}

^{DEBT SERVICING:}

^{DEBT SERVICING PROBLEMS MIGHT NOT BE EXPECTED IF REVENUE CAN BE MAINTAINED AND PAYMENT BY TRADE DEBTORS ARE FORTHCOMING. IT IS NOTED THAT THE SUBJECT HAS NET LOSS WHICH NEEDS CAUTION. AVERAGE COLLECTION PERIOD HAS SHORTENED FROM 97.60 DAYS TO 40.57 DAYS.}

^{A SHORTER AVERAGE COLLECTION PERIOD POSES LESSER RISK OF TURNING INTO BAD DEBTS. HOWEVER, IT IS STILL WORTH NOTING THAT DEBT SERVICING ABILITY MAY BE AFFECTED IF TRADE RECEIVABLES ARE NON FORTHCOMING.}

^{NOTES TO THE FINANCIAL STATEMENTS:}

^{TERMS AND DEBT REPAYMENT SCHEDULE}

^{TERMS AND CONDITIONS OF OUTSTANDING LOANS AND BORROWINGS ARE AS}

^FOLLOWS:

^{S$ FIXED RATE LOANS - YEAR OF MATURITY: 2009 - 2019}

^{- 2006: US$4,742,383 (2005: US$5,143,297)}

^{S$ TRUST RECEIPTS - YEAR OF MATURITY: 2007}

^{- 2006 US$1,118,017 (2005: US$284,394)}

^{US$ TRUST RECEIPTS - YEAR OF MATURITY: 2007}

^{- 2006 US$14,035,490 (2005: US$6,051,727)}

^{THE BANK LOANS AND TRUST RECEIPTS ARE SECURED AS FOLLOWS:}

^{A) LEGAL MORTAGE OVER THE COMPANY'S LEASEHOLD PROPERTY WITH}

^{CARRYING AMOUNT OF US$3,480,730 (2005: U$3,554,585).}

^{B) FIXED CHARGES ON CERTAIN PLANT AND MACHINERY OF THE COMPANY WITH}

^{CARRYING AMOUNTS OF US$2,715,392 (2005: US$3,317,115).}

^{C) FIXED AND FLOATING CHARGES ON CERTAIN INVENTORIES OF THE COMPANY}

^{WITH CARRYING AMOUNTS OF US$15,153,507 (2005: US$6,336,121);}

^{D) PERSONAL FIXED DEPOSITS OF A DIRECTOR OF THE COMPANY OF NOT LESS}

^{THAN US$764,531 (2005: US$NIL);}

^{E) PERSONAL GUARANTEES PROVIDED BY A DIRECTOR OF THE COMPANY AMOUNTING}

^{TO US$8,724,872 (2005: US$10,963,755); AND}

^{F) CORPORATE GUARANTEES FROM THE IMMEDIATE AND ULTIMATE HOLDING}

^{COMPANY TOTALLING US$11,824,295 (2005: US$NIL)}

^{EFFECTIVE INTEREST RATES}

^{(A) SECURED BANK LOANS OF THE COMPANY INCLUDE AN AMOUNT OF}

^{US$2,394,440 (2005: US$2,247,545) WHICH IS REPAYABLE OVER 180 MONTHLY}

^{INSTALMENTS COMMENCING IN AUGUST 2004 AND BEARS INTEREST AS FOLLOWS:}

^{* FIRST YEAR AT A FIXED RATE OF 2.75% PER ANNUM}

^{* SECOND YEAR AT A FIXED RATE OF 3% PER ANNUM}

^{* THIRD YEAR AT THE BANK'S PREVAILING PRIME RATE PER ANNUM}

^{* THEREAFTER AT A FIXED RATE OF 0.5% OVER THE BANK'S PREVAILING PRIME RATE}

BACKGROUND/OPERATION

^{THE COMPANY WAS INCORPORATED IN THE REPUBLIC OF SINGAPORE ON 27/02/2004 AS A LIMITED PRIVATE COMPANY AND IS TRADING UNDER THE PRESENT NAMESTYLE OF "CIMELIA RESOURCE RECOVERY PTE. LTD.".}

^{THE COMPANY HAS AN ISSUED AND PAID-UP CAPITAL OF 7,558,579 SHARES, OF A VALUE OF S$7,558,579.}

^{PRINCIPAL ACTIVITIES:}

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

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

^{1) RECYCLING OF METAL WASTE AND SCRAP}

^{2) GENERAL WHOLESALE TRADE (INCLUDING GENERAL IMPORTERS AND EXPORTERS)}

^{DURING THE FINANCIAL YEAR UNDER REVIEW, THE PRINCIPAL ACTIVITIES OF THE COMPANY ARE THOSE RELATING TO ELECTRONIC WASTE RECYCLING AND PLATINUM GROUP METALS REFINING.}

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

^ACTIVITIES:

^{* ELECTRONIC WASTE RECYCLING COMPANY PROVIDING E-WASTE MANAGEMENT,}

^{RECYCLING AND PLATINUM GROUP METALS RECOVERY AND REFINING}

^PRODUCTS:

^{* GOLD INGOT}

^{* PLATINUM INGOT}

^{* SPUTTER/EVAPORATION MATERIALS}

^{* PALLADIUM SPONGE}

^{* P.C.G - POTASSIUM GOLD CYANIDE}

^{* TETRAMMINO PALLADOUS CHLORIDE}

^SERVICES:

^{* FULLY INTEGRATED E-WASTE MANAGEMENT, BASE-METAL RECYCLING, PGM}

^{RECOVERY AND ITS REFINING PROCESSES}

^{* WASTE MANAGEMENT AT SOURCE (AT CLIENT'S PLACE)}

^{* TOTAL SUPPORT IN SCRAP HANDLING, COLLECTION, TRANSPORT}

^{DOCUMENTATION, SHIPPING (EXPORT) AND OTHER RELATED AREAS}

^{* INTEGRATED EHS SYSTEM (ISO & OHSAS STANDARD)}

^{* WEB-BASED TRADING, SERVICES & ACCESSIBILITY}

^{* LOGISTICS, WAREHOUSING FACILITY WORLD WIDE}

^{* WORLD WIDE REPRESENTATION AND NETWORK OPERATION}

^{SUBJECT'S E-WASTE RECYCLING FACILITY COMPRISES THE FOLLOWING}

^{* MECHANICAL DRY PROCESS PLANT WITH ON-LINE SAMPLING SYSTEM}

^{* PRECIOUS METALS (PGMS) RECOVERY AND REFINING PLANT}

^{* BASE METAL RECOVERY}

^{* CRT RECYCLING PLANT}

^{* IC TRAY RECYCLING AND MANUFACTURING}

^{* INK CARTRIDGE RECYCLING}

^{* RECHARGEABLE BATTERY RECYCLING}

^{* POLLUTION CONTROL EQUIPMENTS}

^{* CHEMICAL TREATMENT PLANT}

^{* WASTE WATER TREATMENT PLANT}

^{* ANALYTICAL LABORATORY}

^{MARKET PRESENCE:}

^{* SOUTH EAST ASIA, UNITED STATES OF AMERICA, SOUTH AMERICA, CHINA AND}

^INDIA

^{QUALITY ASSESSMENT:}

^{* ISO 9001:2000}

^{* ISO 14001:2004}

^{* OHSAS 18001:1999}

^{FROM THE TELE-INTERVIEW CONDUCTED, THE FOLLOWING WAS GATHERED:}

^{NUMBER OF EMPLOYEES:}

^{* 2008: 65}

^{NO OTHER TRADE INFORMATION IS AVAILABLE}

^{THE IMMEDIATE AND ULTIMATE HOLDING COMPANY DURING THE FINANCIAL YEAR WAS ENVIRO-HUB HOLDINGS LTD, INCORPORATED IN THE REPUBLIC OF SINGAPORE.}

^{NUMBER OF EMPLOYEES (31 DECEMBER)}

^{- COMPANY - 2006: NOT AVAILABLE (2005: NOT AVAILABLE;}

^{2004: NOT AVAILABLE)}

^{REGISTERED AND BUSINESS ADDRESS:}

^{3 TUAS AVENUE 2}

^{SINGAPORE 639443}

^{DATE OF CHANGE OF ADDRESS: 30/10/2004}

^{- RENTED PREMISE}

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

^{WEBSITE: http://www.cimeliaglobal.com}

^{EMAIL : info@cimeliaglobal.com}

MANAGEMENT

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

^{1) SEOW BAO SHUEN, A SINGAPOREAN}

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

^{2) CHUNG THIM SUI, A SINGAPOREAN}

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

^{3) MOHAMED GANI MOHAMED ANSARI, A SINGAPOREAN}

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

^{4) VENTATESHA MURTHY, A SINGAPORE PERMANENT RESIDENT}

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

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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