MIRA INFORM REPORT

Report Date :

28.08.2008

IDENTIFICATION DETAILS

Name :	MAKINO ASIA PTE LTD (w..e.f 07.05.1992)
Formerly Known As :	LEBLOND MAKINO ASIA PTE LTD
Registered Office :	2 Gul Avenue, Singapore - 629649
Country :	Singapore
Financials (as on) :	31.03.2007
Date of Incorporation :	23.05.1973
Com. Reg. No.:	197300960K
Legal Form :	Pte Ltd
Line of Business :	Manufacturing and Sale of machine tools and investment holding

RATING & COMMENTS

MIRA’s Rating :

Aa

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

MAKINO ASIA PTE LTD

Line Of Business 

MANUFACTURING AND SALE OF MACHINE TOOLS AND INVESTMENT HOLDING

Parent Company

MAKINO MILLING MACHINE CO LTD

(PERCENTAGE OF SHAREHOLDINGS: 100.00%)

Financial Elements

FY 2007

GROUP

Sales : S$ 412,546,170

Networth : S$ 202,870,074

Paid-Up Capital : S$ 13,626,377

Net result : S$ 47,202,374

Net Margin(%) : 11.44

Return on Equity(%) : 23.27

Leverage Ratio : 0.73

COMPANY IDENTIFICATION

^{Subject Company : MAKINO ASIA PTE LTD}

^{Former Name : LEBLOND MAKINO ASIA PTE LTD}

^{Business Address : 2 GUL AVENUE}

^{Town : SINGAPORE}

^{Postcode : 629649}

^{Country : Singapore}

^{Telephone : 6861 5722/65594722}

^{Fax : 6861 1600}

^{ROC Number : 197300960K}

^{Reg. Town : -}

PREVIOUS IDENTIFICATION

^{LEBLOND MAKINO ASIA PTE LTD DATE OF CHANGE OF NAME: 07/05/1992}

SUMMARY

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

^{Legal Form : Pte Ltd}

^{Date Inc. : 23/05/1973}

^{Previous Legal Form : -}

^{Summary year : 31/03/2007}

^{Sales : 412,546,170}

^{Networth : 202,870,074}

^{Capital : -}

^{Paid-Up Capital : 13,626,377}

^{Employees : -}

^{Net result : 47,202,374}

^{Share value : -}

^{Auditor : DELOITTE & TOUCHE LLP}

^{BASED ON ACRA'S}

^{NO. OF SHARES CURRENCY AMOUNT}

^{ISSUED ORDINARY 1,641,377 SGD 13,626,377}

^{PAID-UP ORDINARY - SGD 13,626,377}

REFERENCES

^{Litigation : YES}

^{Company status : TRADING}

^{Started : 23/05/1973}

PRINCIPAL(S)

^{KUMBAKONAM SUBRAMANIAM SANKARAN S2201992I Director}

DIRECTOR(S)

^{DR MOH CHONG TAU S1283127G Director}

^{Appointed on : 23/04/1985}

^{Street : 30 SIMON PLACE}

^{Town: SINGAPORE}

^{Postcode: 545972}

^{Country: Singapore}

^{KUMBAKONAM SUBRAMANIAM SANKARAN S2201992I Director}

^{Appointed on : 01/01/2002}

^{Street : 32 HERTFORD ROAD}

^{Town: SINGAPORE}

^{Postcode: 219400}

^{Country: Singapore}

^{DR MOH CHONG TAU S1283127G Company Secretary}

^{Appointed on : 23/04/1985}

^{Street : 30 SIMON PLACE}

^{Town: SINGAPORE}

^{Postcode: 545972}

^{Country: Singapore}

^{SHUN MAKINO MH1698288 Director}

^{Appointed on : 31/07/1987}

^{Street : 4-35-5 UTSUKUSHIGAOKA MIDORI-KU}

^{YOKOHAMA CITY KANAGAWA PREF}

^{Town: -}

^{Postcode: -}

^{Country: Japan}

^{FUMIYOSHI MATSUBARA TE7658959 Director}

^{Appointed on : 04/05/2005}

^{Street : 4-1101-7-613 MATSUMI-CHO}

^{KANAGAWA-KU, YOKOHAMA-SHI}

^{Town: KANAGAWA}

^{Postcode: 221-0005}

^{Country: Japan}

^{MATSUNAGA KAZUHIKO TF2432916 Director}

^{Appointed on : 01/04/2008}

^{Street : 33 HUME AVENUE}

^#10-08

^{SYMPHONY HEIGHTS}

^{Town: SINGAPORE}

^{Postcode: 598734}

^{Country: Singapore}

^{KIKKAWA YASUHIKO TH0936882 Director}

^{Appointed on : 01/04/2008}

^{Street : 59 HILLVIEW AVENUE}

^#06-03

^{HILLINGTON GREEN}

^{Town: SINGAPORE}

^{Postcode: 669616}

^{Country: Singapore}

^{AKIO KOMURA TF7070979 Director}

^{Appointed on : 01/08/2008}

^{Street : 2-39-3 NAKAZAWA ASAHI-KU}

^{YOKOHAMA CITY}

^{Town: KANAGAWA}

^{Postcode: -}

^{Country: Japan}

FORMER DIRECTOR(S)

^{SUSUMU OGASAWARA MN4141728}

^{EIICHI HOSOSHIMA MN7998024}

^{YOSHIHISA HAYASHI TF3251748}

^{TSUNEO KAITO TZ0147754}

^{TATSUAKI AIBA TG0926761}

ACTIVITY(IES)

^{MACHINE TOOLS - ACCESSORIES Code: 13250}

^{METAL WORKING MACHINERY Code: 13940}

^{IMPORTERS And EXPORTERS Code: 11760}

^{BASED ON ACRA'S RECORD}

^{1) MANUFACTURE & REPAIR MACHINERY & MACHINE-TOOLS-METAL CUTTING TYPES (EG LATHES)}

CHARGES

^{Date : 07/10/1999}

^{Comments : CHARGE NO : 199904325 (DISCHARGED)}

^{AMOUNT SECURED : 0.00 AND ALL MONIES OWING}

^{CHARGEE(S) : THE DEVELOPMENT BANK OF SINGAPORE LIMITED}

^{Date : 07/10/1999}

^{Comments : CHARGE NO : 199904324 (DISCHARGED)}

^{AMOUNT SECURED : 0.00 AND ALL MONIES OWING}

^{CHARGEE(S) : THE DEVELOPMENT BANK OF SINGAPORE LIMITED}

PREMISES/PROPERTY INFORMATIONS

^{Date : 20/05/2008}

^{Tax rate : 10}

^{Site Address : 2 GUL AVENUE}

^{Postcode : 629649}

^{Country : Singapore}

^{Annual Value : 1,729,000}

* TAX RATE OF 4% MEANS THE ADDRESS (I.E RESIDENTIAL PROPERTY) IS OWNER OCCUPIED.

* TAX RATE OF 10% MEANS THE ADDRESS (I.E RESIDENTIAL PROPERTY) IS PARTIALLY OR FULLY RENTED OUT BY THE OWNER/OWNED BY COMPANY.

* FOR PROPERTIES OTHER THAN RESIDENTIAL PROPERTIES REGARDLESS RENTED OUT OR NOT, THE TAX RATE IS 10% (I.E INDUSTRIAL AND COMMERCIAL PROPERTY).

* ANNUAL VALUE IS THE ESTIMATED ANNUAL RENT THE PROPERTY CAN FETCH IF IT WERE RENTED OUT. THE ANNUAL VALUE IS DETERMINED IN THE SAME MANNER REGARDLESS OF WHETHER THE PROPERTY IS LET-OUT, OWNER-OCCUPIED OR VACANT.

BANKERS

^{DBS BANK LTD.}

^{BANK OF TOKYO-MITSUBISHI LTD}

SHAREHOLDERS(S)

^{MAKINO MILLING MACHINE CO LTD 1,641,377 Company}

^{Street : 3-19 NAKANE 2-CHOME MEGURO-KU}

^{Town : TOKYO}

^{Postcode : 152}

^{Country : Japan}

HOLDING COMPANY

^{MAKINO MILLING MACHINE CO LTD UF05641K % : 100}

SUBSIDIARY(IES)

^{MAKINO (CHINA) CO LTD}

^{MAKINO INDIA) PTE LTD}

^{MAKINO (THAILAND) CO LTD}

PAYMENT HISTORY AND EXPERIENCES

^{Trade Morality : AVERAGE}

^{Liquidity : SUFFICIENT}

^{Payments : REGULAR}

^{Trend : UPWARD}

^{Financial Situation : AVERAGE}

LITIGATION(S)

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

^{Case Number: DCS03530/1997}

Defendant MAKINO ASIA PTE LTD ROC # : 197300960K

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

^{Case Number: MCS23805/19973}

Defendant MAKINO ASIA PTE LTD ROC # : 197300960K

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

^{Case Number: MCS20695/1997}

Defendant MAKINO ASIA PTE LTD ROC # : 197300960K

FINANCIAL ELEMENTS

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

^{Date Account Lodged: 10/09/2007}

^{Balance Sheet Date: 31/03/2007 31/03/2006}

^{Number of weeks: 52 52}

^{Consolidation Code: CONSOLIDATED CONSOLIDATED}

^{--- ASSETS ---}

^{Preliminary Exp 438,756 2,670,100}

^{Tangible Fixed Assets: 89,760,174 81,937,819}

^{Total Fixed Assets: 90,198,930 84,607,919}

^{Inventories: 77,378,590 57,271,382}

^{Receivables: 142,607,732 142,290,076}

^{Cash,Banks, Securitis: 30,597,885 13,473,838}

^{Other current assets: 9,420,381 5,468,799}

^{Total Current Assets: 260,004,588 218,504,095}

^{TOTAL ASSETS: 350,203,518 303,112,014}

^{--- LIABILITIES ---}

^{Equity capital: 13,626,377 13,626,377}

^{Reserves: -594,592 -436,376}

^{Profit & lost Account: 189,838,289 142,635,915}

^{Total Equity: 202,870,074 155,825,916}

^{L/T deffered taxes: 6,990,978 6,971,444}

^{Other long term Liab.: 58,925 102,697}

^{Total L/T Liabilities: 7,049,903 7,074,141}

^{Trade Creditors: 118,943,630 85,049,215}

^{Short term liabilities: 37,527 40,879}

^{Due to Bank: 36,949,810}

^{Provisions: 1,448,063 253,080}

^{Other Short term Liab.: 18,286,770 12,265,218}

^{Prepay. & Def. charges: 1,567,551 5,653,755}

^{Total short term Liab.: 140,283,541 140,211,957}

^{TOTAL LIABILITIES: 147,333,444 147,286,098}

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

^{Net Sales 412,546,170 345,298,382}

^{Purchases,Sces & Other Goods: 315,270,838 262,010,355}

^{Gross Profit: 97,275,332 83,288,027}

^{NET RESULT BEFORE TAX: 48,386,233 43,700,108}

^{Tax : 1,183,859 1,427,633}

^{Net income/loss year: 47,202,374 42,272,475}

^{Interest Paid: 1,522,451 1,123,472}

^{Depreciation: 6,563,602 4,810,181}

^{Directors Emoluments: 1,688,210 1,576,456}

^{Wages and Salaries: 27,311,962 24,439,962}

RATIOS

^{31/03/2007 31/03/2006}

^{Net result / Turnover(%): 0.11 0.12}

^{Stock / Turnover(%): 0.19 0.17}

^{Net Margin(%): 11.44 12.24}

^{Return on Equity(%): 23.27 27.13}

^{Return on Assets(%): 13.48 13.95}

^{Net Working capital: 119721047.00 78292138.00}

^{Cash Ratio: 0.22 0.10}

^{Quick Ratio: 1.23 1.11}

^{Current ratio: 1.85 1.56}

^{Receivables Turnover: 124.44 148.35}

^{Leverage Ratio: 0.73 0.95}

^{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)}

^{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 30.19% FROM S$155,825,916 IN FY 2006 TO S$202,870,074 IN FY 2007. THIS WAS DUE TO HIGHER ACCUMULATED PROFIT OF S$189,838,289 (2006: S $142,635,915); A RISE OF 33.09% FROM THE PRIOR FINANCIAL YEAR.}

^LEVERAGE:

^{IN THE SHORT-TERM, SUBJECT WAS LARGELY FINANCED BY TRADE CREDITORS WHICH MADE UP 84.79% (2006: 60.66%) OF THE TOTAL CURRENT LIABILITIES AND AMOUNTED TO S$118,943,630 (2006: S$85,049,215). THE BREAKDOWN WAS AS FOLLOWS:}

^{*OUTSIDE PARTIES - 2007: S$13,125,854 (2006: S$17,265,380)}

^{*HOLDING COMPANY - 2007: S$77,625,638 (2006: S$54,991,950)}

^{*RELATED COMPANIES - 2007: S$28,192,138 (2006: S$12,791,885)}

^{*SUBSIDIARIES - 2007: - (2006: -)}

^{AMOUNT DUE TO BANKS OF NIL (2006: S$36,949,810) CONSISTED OF:}

^{*BANK LOANS - 2007: NIL (2006: S$36,426,000)}

^{*CURRENT PORTION OF LONG-TERM LOANS - 2007: NIL (2006: S$523,810)}

^{IN ALL, LEVERAGE RATIO FELL FROM 0.95 TIMES TO 0.73 TIMES AS A RESULT OF A GREATER RISE IN TOTAL EQUITY THAN 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 1.85 TIMES, UP FROM 1.56 TIMES AND QUICK RATIO IMPROVED TO 1.23 TIMES FROM 1.11 TIMES IN FY 2006.}

^{SIMILARLY, NET WORKING CAPITAL IMPROVED BY 52.92% FROM S$78,292,138 IN FY 2006 TO S$119,721,047.}

^{CASH AND CASH EQUIVALENTS COMPRISED OF:}

^{*CASH AT BANK - 2007: S$29,986,197 (2006: S$12,210,152)}

^{*CASH ON HAND - 2007: S$127,390 (2006: S$169,987)}

^{*FIXED DEPOSITS - 2007: S$484,298 (2006: S$1,093,699)}

^{PROFITABILITY:}

^{REVENUE POSTED AN INCREASE OF 19.48% FROM S$345,298,382 IN FY 2006 TO S$412,546,170 AND NET PROFIT ROSE BY 11.66% TO S$47,202,374 (2006: S$42,272,475). HENCE, NET MARGIN FELL TO 11.44% (2006: 12.24%).}

^REVENUE:

^{*SALE OF FINISHED GOODS - 2007: S$349,299,714 (2006: S$301,325,727)}

^{*RENDERING OF SERVICES AND SALES OF PARTS - 2007: S$63,246,456 (2006: S$43,972,655)}

^{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 AT 32.78 TIMES (2006: 39.89 TIMES).}

^{NON-CURRENT ASSETS:}

^{THE FOLLOWING ITEMS WERE CLASSIFIED UNDER PRELIMINARY:}

^{*LOAN TO RELATED PARTY - 2007: S$356,064 (2006: S$633,004)}

^{*DEFERRED DEVELOPMENT EXPENDITURE - 2007: S$82,692 (2006: S$2,037,096)}

^{NOTES TO THE FINANCIAL STATEMENTS:}

^{BANK OVERDRAFTS AND LOANS}

^{THE BANK LOANS WERE UNSECURED, REPAYABLE ON DEMAND AND BORE INTEREST AT AN AVERAGE RATE OF 3.99% PER ANNUM. THE BANK LOANS WERE FULLY REPAID DURING THE FINANCIAL YEAR.}

^{CONTINGENT LIABILITIES}

^{PERFORMANCE GUARANTEES (UNSECURED) - 2007: S$6,615,946 (2006: S$3,311,495)}

BACKGROUND/OPERATION

^{SUBJECT WAS INCORPORATED IN THE REPUBLIC OF SINGAPORE ON 23/05/1973 AS A PRIVATE COMPANY LIMITED BY SHARES AND WAS FORMERLY KNOWN AS "LEBLOND MAKINO ASIA PTE LTD".}

^{SUBSEQUENTLY ON 07/05/1992, SUBJECT CHANGED TO ITS PRESENT NAMESTYLE AS "MAKINO ASIA PTE LTD" AND WAS TRADING AS A LIMITED PRIVATE COMPANY.}

^{THE COMPANY HAS AN ISSUED AND PAID-UP CAPITAL OF 1,641,377 SHARES OF A VALUE OF S$13,626,377.}

^{PRINCIPAL ACTIVITIES:}

^{SUBJECT IS REGISTERED WITH THE ACCOUNTING & CORPORATE REGULATORY AUTHORITY (ACRA) TO BE PRINCIPALLY ENGAGED IN THE BUSINESS OF:}

^{1) MANUFACTURE & REPAIR MACHINERY & MACHINE-TOOLS-METAL CUTTING TYPES (EG LATHES)}

^{2) IRON AND STEEL FOUNDRIES}

^{THE COMPANY IS LISTED IN THE SINGAPORE LOCAL DIRECTORY UNDER THE CLASSIFICATION OF: METAL WORKING MACHINERY.}

^{DURING THE FINANCIAL YEAR UNDER REVIEW, THE PRINCIPAL ACTIVITIES OF THE COMPANY ARE THOSE RELATING TO MANUFACTURING AND SALE OF MACHINE TOOLS AND INVESTMENT HOLDING. THE GROUP'S PRINCIPAL ACTIVITIES ARE THE DESIGN, MANUFACTURE AND SALE OF MACHINE TOOLS.}

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

^{SUBJECT IS GENERALLY KNOWN AS AN INDUSTRY LEADER FOR MACHINE TOOLS AND THE LARGEST MACHINE TOOL BUILDER IN SINGAPORE. SUBJECT ENLARGED ITS MARKET IN THE ASIA REGION DURING THE MID-EIGHTIES. IT FURTHER EXPANDED TO THE SOUTHERN CHINA AND INDIA IN 1991 AND 1995 RESPECTIVELY. EARLY THIS YEAR, THE PHILIPPINES SALES LIAISON OFFICE WAS ESTABLISHED.}

^{IT HAS BRANCHES AND SALES OFFICES IN INDIA, CHINA, INDONESIA, MALAYSIA, PHILIPPINES AND THAILAND.}

^{IT HAS BUSINESS PARTNERS IN MALAYSIA & HONG KONG.}

^{SUBJECT ENGAGES IN THE FOLLOWING ACTIVITIES:}

^{* MANUFACTURE OF CNC MILLING MACHINES}

^{* MANUFACTURE OF CNC VERTICAL MACHINING CENTERS}

^{* MANUFACTURE OF CNC WIRE-CUT MACHINES}

^{* MANUFACTURE OF CNC EDM MACHINES}

^{* MANUFACTURING AND REGIONAL MARKETING OF MACHINING CENTERS CNC COPY MILLING MACHINE, CNC DIGITIZER, CNC GRAPHITE MILLING MACHINE, HIGH PRECISION CONVENTIONAL MILLING MACHINE, MAKINO MACHINING COMPLEX (MMC), FMS (FLEXIBLE MANUFACTURING SYSTEM),ETC.}

^{* DEVELOP AND DELIVER TURNKEYS AND SYSTEMS}

^{* SPINDLE & SPINDLE ASSEMBLIES}

^{PRODUCTS AND SERVICES:}

^{* MACHINE TOOLS}

^{* PRECISION PARTS}

^{SOME EXAMPLES INCLUDE:}

^{* BORING MACHINES}

^{* BORING MACHINES: JIG}

^{* DIGITIZERS}

^{* ELECTRICAL DISCHARGE MACHINES}

^{* LATHES}

^{* LATHES: ENGINE}

^{* MACHINE TOOLS}

^{* MACHINING CENTRES}

^{* METAL WORKING MACHINES}

^{* MILLING MACHINES}

^{* MILLING MACHINES: CNC}

^{* MILLING MACHINES: COPY}

^{* MILLING MACHINES: PROFILE}

^{* MILLING MACHINES: VERTICAL}

^{* WIRE CUTTING MACHINES}

^{BUSINESS RELATIONSHIP WITH:}

^{* PREMAC TOOLS PVT. LTD. (BANGALORE, INDIA)}

^{BRAND NAMES:}

^{* LEBLOND MAKINO, LATHES}

^{* MAKINO, CNC MILLING MACHINES, EDM, WIRE-CUT, COPY & GRAPHITE}

^{MILLING MACHINES}

^{* SOFTEK, INDUSTRIAL SOFTWARE}

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

^{* SINGAPORE MANUFACTURERS' FEDERATION}

^{* JAPANESE CHAMBER OF COMMERCE & INDUSTRY}

^{* MACHINE TOOL CLUB}

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

^{IMPORT COUNTRIES:}

^{* UNITED STATES}

^{* EUROPE}

^{* JAPAN}

^{EXPORT COUNTRIES:}

^{* SOUTHEAST ASIA REGION}

^{* INDIA}

^{* MALAYSIA}

^{* CHINA}

^{NO OTHER TRADE INFORMATION WAS AVAILABLE.}

^{THE COMPANY IS A SUBSIDIARY OF MAKINO MILLING MACHINE CO LTD, INCORPORATED IN JAPAN, WHICH IS ALSO THE COMPANY'S ULTIMATE HOLDING COMPANY.}

^{NO. OF EMPLOYEES:}

^{* GROUP - 2006: NA (2005: 801; 2004: 592; 2002: 473; 2001: 444;}

^{2000: 406)}

^{* COMPANY - 2006: NA (2005: NA (2004: NA; 2002: 473; 2001: 436;}

^{2000: 393)}

^{REGISTERED AND BUSINESS ADDRESSES:}

^{2 GUL AVENUE}

^{SINGAPORE 629649}

^{DATE OF CHANGE OF ADDRESS: -}

^{- REGIONAL HEAD OFFICE CUM MANUFACTURING PLANT}

^{- OWNED PREMISE}

^WEBSITE:

^{http://www.makino.com.sg}

^{http://www.makino.com}

^EMAIL:

^{makinoasia@makino.com.sg}

^{hr@makino.com.sg}

^{manjit@makino.com.sg}

MANAGEMENT

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

^{1) SHUN MAKINO, A JAPANESE}

^{- BASED IN JAPAN.}

^{2) DR MOH CHONG TAU, A SINGAPOREAN}

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

^{3) KUMBAKONAM SUBRAMANIAM SANKARAN, A SINGAPOREAN}

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

^{4) FUMIYOSHI MATSUBARA, A JAPANESE}

^{- BASED IN JAPAN.}

^{5) MATSUNAGA KAZUHIKO, A JAPANESE}

^{- BASED IN SINGAPORE.}

^{6) AKIO KOMURA, A JAPANESE}

^{- BASED IN JAPAN.}

^{7) KIKKAWA YASUHIKO, A JAPANESE}

^{- 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.

MANUFACTURING SECTOR

PAST PERFORMANCE

THE MANUFACTURING SECTOR ROSE BY 12.0% IN 1Q 2008, SIGNIFICANTLY HIGHER THAN THE 0.2% GROWTH IN 4Q 2008. IT WAS BOOSTED BY THE BIOMEDICAL MANUFACTURING CLUSTER WHICH EXPANDED 49.0%.

THE BIOMEDICAL MANUFACTURING CLUSTER EXPANDED SIGNIFICANTLY, REVERSING THE 25.0% DECLINE IN OUTPUT IN 4Q 2007.

THE ELECTRONICS, TRANSPORT ENGINEERING AND CHEMICALS CLUSTERS GREW SLOWER AT 4.6%, 4.0% AND 1.1% RESPECTIVELY WHILE THE PRECISION ENGINEERING CLUSTER DIPPED BY 1.7%. PHARMACEUTICALS OUTPUT ROSE SUBSTANTIALLY BY 52.0% WITH HIGHER VALUE ACTIVE PHARMACEUTICAL INGREDIENTS PRODUCED IN THE MAJOR PLANTS.

THE MEDICAL TECHNOLOGY SEGMENT ALSO ROSE BY 21.0% WITH HIGHER PRODUCTION TO MEET DELIVERIES OF VARIOUS MEDICAL DEVICES AND APPLIANCES IN THE US AND EUROPEAN MARKETS.

NEWS

CAUTIOUS OPTIMISM OVER RISE IN JULY’S PMI

THE ECONOMY RECEIVED A SPOT OF GOOD NEWS YESTERDAY WITH AN EARLY INDICATOR SHOWING THAT A REBOUND IN THE KEY MANUFACTURING SECTOR MAY BE GATHERING MOMENTUM.

THE PURCHASIGN MANAGERS’ INDEX (PMI) ROSE ONE POINT TO 51.6 FOR JULY, SHOWING A SECOND STRAIGHT MONTH OF GROWTH IN FACTORY ACTIVITY. A READING ABOVE 50 SIGNALS AN EXPANSION WHILE ONE BELOW SUGGESTS CONTRACTION.

JULY’S READING WAS THE HIGHEST SINCE LAST NOVEMBER AND WAS DRIVEN BY STRONGER DOMESTICS ORDERS, PRODUCTION AND INVENTORY OF RAW MATERIALS AND MANUFACTURING INTERMEDIATES.

BUT WHILE IT WAS ENCOURAGING, ANALYSTS REMAIN CAUTIOUS, CITING GATHERING CLOUDS OVER THE GLOBAL ECONOMY. THEY ALSO NOTE THAT BEYOND THE PMI FIGURE, THERE WERE WORRYING INDICATIONS AMONG SUB-INDICES. THE EMPLOYMENT INDEX, FOR EXAMPLE, DIPPED FURTHER INTO NEGATIVE TERRITORY, WHERE IT HAS BEEN FOR THE PAST SEVEN MONTHS, WITH A READING OF 48.7.

LAST MONTH’S PMI IS UNEXPECTEDLY BETTER BUT I’M NOT VERY SURE HOW MUCH JOY WE SHOULD TAKE IN IT,” SAID OCBC BANK ECONOMIST SELENA LING. “WHILE IT’S QUITE ENCOURAGING TO SEE A SECOND MONTH OF EXPANSION, IT RUNS AGAINST THE CURRENT GLOBAL MANUFACTURING SENTIMENT.

INDUSTRIAL OUTPUT SHRANK SHARPLY IN APRIL AND MAY BEFORE CLOCKING UP A MODEST RECOVERY IN JUNE.

LAST MONTH’S PMI SUGGESTS THAT POSITIVE MOMENTUM IS BUILDING. “THE INCREASE COULD IMPLY A ‘NOT-TOO-BAD’ OUTLOOK FOR THE MANUFACTURING ECONOMY,” SAID MS JANICE ONG, EXECUTIVE DIRECTOR OF THE SINGAPORE INSTITUTE OF PURCHASING AND MATERIALS MANAGEMENT, WHICH COMPILES THE MONTHLY INDEX.

BUT ANALYSTS NOTED THAT THE SECTOR WILL NEED A REALLY ROBUST EFFORT TO BEAT LAST JULY’A OUTPUT, WHICH WAS THE HIGHEST FOR THE WHOLE OF LAST YEAR.

INDICATIONS FROM ELSEWHERE IN THE WORLD LEND LITTLE COMFORT. A SIMILAR INDICATOR IN THE US HAS SLIPPED TO THE 50 POINT THRESHOLD BETWEEN EXPANSION AND CONTRACTION, WHILE THOSE FOR EUROPE AND CHINA HAVE GONE INTO NEGATIVE TERRITORY.

ECONOMISTS ALSO QUERIED THE DRIVERS FOR LAST MONTH’S PMI, NOTING THAT DOMESTIC ORDERS AND INVENTORY ACCUMULATION ARE NOT CLEAR SIGNS FOR AN UPCYCLE. EXPORT ORDERS, USUALLY A MORE IMPORTANT FACTOR, CONTRACTED AGAIN LAST MONTH.

CIMB-GK ECONOMIST SONG SENG WUN WAS CONCERNED THAT THE ELECTRONICS INDEX, WHICH CAME IN AT 51.1, HAD SLIPPED. “THIS IS NOT GOOD WHEN WE ARE HEADING TOWARDS THE PEAK PRODUCTION PERIOD.” SAID MR SONG, WHO ALSO NOTED THAT THE ELECTRONICS EMPLOYMENT INDEX, AT 43.8, WAS AT ITS LOWEST SINCE DECEMBER 2001.

“MANUFACTURING NUMBERS IN THE COMING MONTHS WILL BE VOLATILE, POSSIBLY WEAKENING RATHER THAN REBOUNDING STRONGLY GOING INTO PEAK PRODUCTION MONTHS,” SAID MR SONG.

OUTLOOK

THE MANUFACTURING SECTOR IS CAUTIOUS ABOUT BUSINESS CONDITIONS FOR THE PERIOD ENDING SEPTEMBER 2008. A NET WEIGHTED BALANCE OF 7% OF MANUFACTURERS FORECAST SLOWER BUSINESS IN THE COMING MONTHS. A WEIGHTED BALANCE OF 67% OF MANUFACTURERS FORECAST BUSINESS TO REMAIN THE SAME IN THE COMING MONTHS, GIVING A TOTAL WEIGHTED 80% OF FIRMS EXPECTING THE OUTLOOK TO IMPROVE OR REMAIN THE SAME IN THE COMING MONTHS.

SENTIMENTS IN THE GENERAL MANUFACTURING CLUSTER ARE THE MOST UPBEAT, WITH A NET WEIGHTED BALANCE OF 11% OF FIRMS IN THE CLUSTER EXPECTING BUSINESS TO IMPROVE IN THE MONTHS ENDING SEPTEMBER 2008, OVER THE SEASONALLY WEAKER FIRST QUARTER. MANUFACTURERS IN THIS CLUSTER SUPPLYING TO THE CONSTRUCTION INDUSTRY ALSO EXPECT DEMAND TO HOLD UP.

THE BIOMEDICAL MANUFACTURING CLUSTER HAS THE WEAKEST OUTLOOK FOR THE SAME PERIOD. THIS IS LARGELY DUE TO THE PHARMACEUTICALS SEGEMENT, WHICH ANTICIPATES SLOWER BUSINESS IN THE COMING MONTHS.

THE TRANSPORT ENGINEERING CLUSTER IS THE MOST POSITIVE. SHIPYARDS’ ORDER BOOKS REMAIN STRONG, WITH RIG BUILDERS EXPECTING DEMAND FOR OIL RIGS TO INCREASE IN VIEW OF HIGH OIL PRICES, AND BOTH THE SHIP REPAIR AND CONVERSION MARKET REMAINING FAVOURABLE.

EXTRACTED FROM: MINISTRY OF TRADE AND INDUSTRY, SINGAPORE

EDB SINGAPORE

THE STRAITS TIMES

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.43.79
UK Pound	1	Rs.80.05
Euro	1	Rs.64.56

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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