MIRA INFORM REPORT

Report Date :

14.08.2007

IDENTIFICATION DETAILS

Name :	P.T. INDAH JAYA TEXTILE INDUSTRY

Registered Office :	Jalan Pajajaran XIV No. 62, Jatiuwung, Tangerang 15137, Banten Province

Country :	Indonesia

Date of Incorporation :	30 October 1962

Legal Form :	Limited Liability Company

Line of Business :	Garment (Towel) Manufacturing

RATING & COMMENTS

MIRA’s Rating :

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Maximum Credit Limit :	US$ 1,600,000

Status :	Satisfactory

Payment Behaviour :	Regular

Litigation :	Clear

Name of Company

P.T. INDAH JAYA TEXTILE INDUSTRY

Address

Head Office & Factory

Jalan Pajajaran XIV No. 62

Jatiuwung, Tangerang 15137

Banten Province

Indonesia

Phone - (62-21) 591 8888 (Hunting)

Fax. - (62-21) 591 8830

Land Area - 22,375 sq. meters

Building Area - 11,500 sq. meters

Region - Industrial Zone

Status - Owned

Date of Incorporation

30 October 1962

Legal Form

P.T. (Perseroan Terbatas) or Limited Liability Company

Company Reg. No.

The Ministry of Justice and Human Rights

No. Y.A. 5/319/4

Dated 3 June 1976

Company Status

Private and Domestic Investment (PMDN) Company

Permit by the Government Department

The Department of Industry

N0. 225/DJAI/IUT-3/NonFa/V/1984

Dated 29 May 1984

The Capital Investment Coordinating Board

No. 394/I/PMDN/1997

Dated 25 July 1997

Related Company

P.T. STAR RODA MULIA CYCLE (Bicycle Parts and Component Manufacturing)

CAPITAL AND OWNERSHIP

Capital Structure :

Authorized Capital : Rp. 16,212,000,000.-

Issued Capital : Rp. 16,212,000,000.-

Paid up Capital : Rp. 16,212,000,000.-

Shareholders/Owners :

a. Mr. J.F.B. Rimbing - Rp. 4,053,000,000.-

b. Mr. Eddy Pesik - Rp. 4,053,000,000.-

c. Mr. Johnny Pesik - Rp. 4,053,000,000.-

d. Mr. Tonny Pesik - Rp. 4,053,000,000.-

BUSINESS ACTIVITIES

Lines of Business:

Garment (Towel) Manufacturing

Production Capacity

a. Towels - 3,500 tons p.a.

b. Labels - 8 mill dozens p.a.

Total Investment

a. Equity Capital - Rp. 16.2 billion

b. Loan Capital - Rp. 25.0 billion

c. Total Investment - Rp. 41.2 billion

Started Operation

1962

Brand Name

None

Technical Assistance

None

Number of Employee

650 persons

Marketing Area

Export - 80%

Domestic - 20%

Main Customer

Buyers in the USA, France, Singapore, Middle East, Africa, etc.

Market Situation

Very Competitive

Main Competitors

a. P.T. TATAPUSAKA SENTOSA TEXTILE MILLS

b. P.T. KANASRITEX

c. P.T. WONDERFUL

d. P.T. TONIKITEX MANUFACTURING CORPORATION

e. P.T. TRUST INDONESIA

Business Trend

Growing

BANKER, AUDITOR & LITIGATION

Bankers :

a. P.T. Bank CENTRAL ASIA Tbk.

Jalan Asemka No. 27-30

Jakarta Barat

Indonesia

b. P.T. Bank MANDIRI Tbk.

Plaza Mandiri

Jalan Jend. Gatot Subroto Kav. 36-38

Jakarta Pusat

Indonesia

Auditor :

Internal Auditor

Litigation :

No litigation record in our database

FINANCIAL FIGURE

Annual Revenue (estimated) :

2004 – Rp. 90.0 billion

2005 – Rp. 100.0 billion

2006 – Rp. 108.0 billion

Net Profit (Loss) :

2004 – Rp. 6.3 billion

2005 – Rp. 7.0 billion

2006 – Rp. 7.5 billion

Payment Manner :

Promptly

Financial Comments :

Satisfactory

KEY EXECUTIVES

Board of Management :

President Director - Mr. Johnny Pesik

Directors - a. Mr. Eddy Pesik

b. Mr. J.E.B. Rimbing

Board of Commissioners :

President Commissioner - Mr. Tonny Pesik

Commissioners - a. Mr. Howard Tika

b. Mrs. Lina Warti Tirta

Signatories :

President Director (Mr. Johnny Pesik) or one of the Directors (Mr. Eddy Pesik or Mr. J.E.B. Rimbing) which must be approved by Supervisory Board.

CAPABILITIES

Management Capability :

Good

Business Morality

Good

Credit Risk

Above Average

Credit Recommendation

Credit should be extended under guarantee

Proposed Credit Limit

C.O.D. To small amount

Maximum Credit Limit

US$ 1,600,000 on 90 days D/A

OVERALL PERFOMANCE

P.T. INDAH JAYA TEXTILE INDUSTRY (P.T. IJTI) was established in October 1962 in Tangerang, Banten Province with an authorized capital of Rp. 25,000,000.- of Rp. 5,000,000.- was issued and paid up. The company was founded by Mr. Albert Leopold Ferdinand Rimbing, Mrs. Tie Khan Tjoe, Mr. Kho Tan I Lie, Mrs. Kartieni, all Indonesian businessmen of Chinese extraction and Mr. Poerwo Soebagio, an indigenous businessman as the original shareholders. The company’s notarial act was since revised a couple of times. In the 1980-s, the company’s authorized capital was increased to Rp. 50,000,000.- entirely issued and paid up. The latest in July 1997, the authorized capital was raised to Rp. 16,212,000,000.- entirely issued and paid up. Since then, the company’s shareholders have been listed as Mr. J.E.B. Rimbing Pesik, Mr. Eddy Pesik, Mr. Johnny Pesik and Mr. Tonny Pesik. They are an Indonesian business family of Chinese origins. The deed of amendment was made by Mrs. Lenny Budiman, SH., a public notary in Jakarta under Company Registration Number Y.A. 5/319/4, dated June 3, 1976. Mr. Eddy Pesik or Pesik family members is also the founding and shareholders of P.T. STAR RODA MULIA CYCLE operates in bicycle parts and component manufacturing.

P.T. IJTI at first was just a home industry managing a knitting workshop at Jalan Kebayoran Lama No. 55, South Jakarta. The home industry has been in operation since 1962 producing knitted undershirts and T-shirts of low to medium quality. In 1975 the company diversified operations into the production of bath towels for households and hotels. In 1985 the company launched another business diversification into the production of labels for towels, undershirts and T-shirts produced by the company itself. The company’s business kept growing fairly fast, particularly its bath towel industry. Since 1986 P.T. IJTI focused operations on just the production of bath towels and accompanying labels, discontinuing for the tie being its production of under-shirts and T-shirts. Then in 1990, P.T. IJTI plant had moved to Jalan Pajajaran XIV No. 62, Jatiuwung, Tangerang, Banten Province on a land of 22,375 sq. meters. In July 1997, P.T. IJTI has obtained Domestic Investment (PMDN) facility to increasing production capacity by produce towels of 3,500 tons and labels 8 mill dozens respectively per annum. The plant has absorbed an investment of Rp. 41.2 billion, come from owned capital of Rp. 16.2 billion and the rest is loans. Some 80% of towels products are exported to Singapore, Hong Kong, the USA, Europe Union, Bangladesh, Sri Lanka, Pakistan, India, Saudi Arabia, Australia, Afrika based on job orders. The rest 20% is marketed locally thorough dept store, textile grocery in Tanah Abang, Mangga Dua by using SHAPHELY, COTTON CLUB and TERRY PALMER brands, a bath towel of good quality quite well-known in the country.

The occurring of the economic crisis and sharp Rupiah depreciation against the US$ Dollar, Japanese Yen, EUR and other hard currencies has positive impact on P.T. IJTI's operation because some 80% of its products is exported. Besides, the prolonged economic crisis followed by fast rising local bank interest rates has also had a negative impact on the company's finances for having resulted in a swelling of the company’s debts out of control. Meanwhile, the local TPT (Textile and Textile Products) industries and other factors causing the declining competitive ability of the national TPT products are the increasing production costs, high interest rates, expensive customs office costs, illegal retributions, textile and garment machinery restructuring costs and the rising prices of production components (oil fuel prices and electric base tariffs).

Generally, demand for garment in the international market has been fluctuating in the last five years as evident from the figures of Indonesian garment export. According to the Central Bureau of Statistics (BPS) the Indonesian garments export in 2000 amounted to 370,300 tons (US$ 4,702.6 million), to 473,800 tons (US$ 4,476.7 million) in 2001, to 333,100 tons (US$ 3,887.2 million) in 2002 to 339,000 tons (US$ 4,037.9 million) in 2003 to 327.300 tons (US$ 4,351.9 million) in 2004 to 369.500 tons (US$ 4,967.0 million) in 2005 and to 89,900 tons (US$ 1,296.2 million) in 2006 (January-March). The Indonesia textile products export in 2000 amounted 1,365.1 tons (US$ 3,634.1 million), declined to 1,269.5 (US$ 3,198.9 million) in 2001, to 1,425.9 tons (US$ 3,075.9 million) in 2002 to 1,307.5 tons (US$ 3,064.6 million) in 2003 to 1,300.4 tons (US$ 3,354.6 million) in 2004 to 1,427.3 tons (US$ 3,704.0 million) in 2005 and to 362.3 (US$ 940.2 million) in 2006 (January-March). The export volume and value of the national TPT products in 2000 to 2005 are pictured on the following table.

Year	Garment		Textile Product
Year	(Thousand Ton)	(US$ Million)	(Thousand Ton)	(US$ Million)
2000	370.3	4,702.6	1,365.1	3,634.1
2001	473.8	4,476.7	1,269.5	3,198.9
2002	333.1	3.887.2	1,425.9	3,075.9
2003	339.9	4,037.9	1,307.5	3,064.6
2004	327.3	4,351.9	1,300.4	3,354.6
2005	369.5	4,967.0	1,427.3	3,704.0
2006*	89.9	1,296.2	362.3	940.2

*) January – March

Source : Central Bureau of Statistic

Until this time P.T. MGT has not been registered with Indonesian Stock Exchange, so that they shall not obliged to announce their financial statement. We observed that total revenue of the company in 2003 amounted to Rp. 215.0 billion increased to Rp. 225.0 billion in 2004 and to Rp. 230.0 billion in 2005. The operation in 2005 yielded an estimated net profit at least Rp. 10.0 billion and the company has an estimated total net worth at Rp. 123.0 billion. It is projected that total revenue of the company will be higher by at least 6% in 2006. Local and foreign debts used for working capital have puffed-up due to a very high bank interest rate.

Until this time P.T. IJTI has not been registered with Indonesian Stock Exchange, so that they shall not obliged to announce their financial statement. We observed that total revenue of the company in 2004 amounted to Rp. 90.0 billion increased to Rp. 100.0 billion in 2005 and to Rp. 108.0 billion in 2006. The operation in 2006 yielded an estimated net profit at least Rp. 7.5 billion and the company has an estimated total net worth at least Rp. 75.0 billion. It is projected that total sales turnover of the company will be higher by at least 6% in 2007. We observe that P.T. IJTI is supported by financially fairly strong behind it. So far, we have never heard of the company having been black listed by the Central Bank (Bank Indonesia). The company usually pays its debts punctually to suppliers.

The management of P.T. IJTI is led by Mr. Johnny Pesik (55) with 25 years of experience in towel manufacturing. The management of the company is handled by professional managers having wide relation with private businessmen within and outside the country and with the government sectors as well. We observed that management’s reputation in said business is fairly good. So far, we have never heard that the company’s management involved in a dirty business practice or detrimental cases that settled in the country. The company’s litigation record is clean and it has not registered with the black list of Bank of Indonesia.

PT. INDAH JAYA TEXTILE INDUSTRY is fairly good for business transaction. However, in view of the unstable economic condition in the country we recommend to treat prudently in extending a loan to the company.

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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