MIRA INFORM REPORT

Report Date :

10.10.2008

IDENTIFICATION DETAILS

Name :	P.T. KARYA MEKAR DEWATAMALI
Registered Office :	Jalan Soekarno Hatta 174-174 A, Jombang, 61413, East Java
Country :	Indonesia
Date of Incorporation :	16.02.2000
Com. Reg. No.:	No. C-7442.HT.01.01.TH.2001
Legal Form :	Limited Liability Company
Line of Business :	Manufacturer of Sport Shoes

RATING & COMMENTS

MIRA’s Rating :

Ba

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

Maximum Credit Limit :	US$ 200,000.
Status :	Satisfactory
Payment Behaviour :	No Complaints
Litigation :	Clear

Name of Company

P.T. KARYA MEKAR DEWATAMALI

Address

Head Office & Factory

Jalan Soekarno Hatta 174-174 A

Jombang, 61413

East Java

Indonesia

Phone - (62-21) 851 434 (Hunting)

Fax - (62-21) 861009, 863079

Land Area - 8,000 sq. meters

Factory Space - 6,500 sq. meters

Region - Industrial Zone

Status - Rent

Date of Incorporation

16 February 2000

Legal Form

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

Company Reg.No.

The Ministry of Justice and Human Rights

No. C-7442.HT.01.01.TH.2001

Dated 15 May 2001

Company Status

Private National Company

Permit by the Government Department

The Department of Finance

NPWP No. 1.848.198.6-602

Related Company

None

CAPITAL AND OWNERSHIP

Capital Structure :

Authorized Capital : Rp. 2,000,000,000.-

Issued Capital : Rp. 500,000,000.-

Paid up Capital : Rp. 225,000,000.-

Shareholders/Owners

a. Mrs. Fransisca Lupi Purwatiningsih - Rp. 127,500,000.-

Address : Jl. Soekarno Hatta174-174 A

Desa Mojongapit, Jombang

East Java, Indonesia

b. Mr. John Pangalela Hiantoro - Rp. 47,000,000.-

Address : Jl. Darmo Permai Selatan 1/15

Rt. 002/Rw. 006, Dukuh Pakis

Surabaya, East Java

Indonesia

c. Ms Arimbi Hiantoro - Rp. 37,500,000.-

Address : Jl. Darmo Permai Selatan 1/15

Rt. 002/Rw. 006, Dukuh Pakis

Surabaya, East Java

Indonesia

d. Mr. Anton Brotosuseno Hiantoro - Rp. 37,500,000.-

Address : Jl. Merdeka No. 76, Rt. 01/Rw. 02

Desa Candimulyo, Jombang

East Java

Indonesia

BUSINESS ACTIVITIES

Lines of Business:

Sport Shoes Manufacturing

Production Capacity

Sport Shoes - 350,000 pairs p.a.

Total Investment

a. Owned Capital - Rp. 0.5 billion

b. Loan Capital - Rp. 1.0 billion

c. Total Investment - Rp. 1.5 billion

Started Operation

2001

Brand Name

LOGO, WOTSTAR, LOTTO, SPEED

Technical Assistance

None

Number of Employee

326 persons

Marketing Area

Domestic - 30%

Export - 70%

Main Customer

After markets and buyers in Taiwan, Hong Kong

Market Situation

Very Competitive

Main Competitors

a. P.T. KARYA MITRA BUDI SANTOSO

b. P.T. KARYA MUDA SHOES

c. P.T. UNIVERSAL WISESA INDUSTRY

d. P.T. SIANTAR MADJU

e. P.T. MEKAR ABADI

f. Etc.,

Business Trend

Growing

BANKER, AUDITOR & LITIGATION

Bankers :

a. P.T. Bank DANAMON INDONESIA Tbk

Jalan Soekarno Hatta

Jombang, East Java

Indonesia

b. P.T. Bank CENTRAL ASIA Tbk

Jalan Soekarno Hatta

Jombang, East Java

Indonesia

c. P.T. Bank EKONOMI

Surabaya Branch

East Java - Indonesia

Auditor :

Internal Auditor

Litigation :

No litigation record in our database

FINANCIAL FIGURE

Annual Sales (estimated) :

2004 – Rp. 10.5 billion

2005 – Rp. 11.3 billion

2006 – Rp. 12.0 billion

2007 – Rp. 15.5 billion

2008 – Rp. 8.7 billion (January-June)

Net Profit (estimated) :

2004 – Rp. 0.6 billion

2005 – Rp. 0.7 billion

2006 – Rp. 0.8 billion

2007 – Rp. 0.9 billion

2008 – Rp. 0.5 billion (January-June)

Payment Manner

Average

Financial Comments

Satisfactory

KEY EXECUTIVES

Board of Management :

Director - Mr. John Pangalela Hiantoro

Board of Commissioner :

Commissioner - Mrs. Fransisca Lupi Purwatiningsih

Signatories :

Director (Mr. Fransisca Lupi Purwatiningsih) which must be approved by the Board of Commissioner.

CAPABILITIES

Management Capability :

Good

Business Morality

Good

Credit Risk

Average

Credit Recommendation

Credit should be proceeded with monitor

Proposed Credit Limit

Small amount – periodical review

Maximum Credit Limit

US$ 200,000.- on the 90 days of payments

OVERALL PERFOMANCE

P.T. KARYA MEKAR DEWATAMALI (P.T. KMD) was established in Jombang, East Java on16 February 2000 with the authorized capital of Rp. 2,000,000,000 issued capital of Rp. 500,000,000 of which Rp. 225,000,000 was paid up. The founding shareholders of the company are Mrs. Fransisca Lupi Purwatiningsih, Ms Arimbi Hiantoro, his older brother Mr. John Pangalela Hiantoro and Mr. Anton Brotosuseno Hiantoro, they are Indonesian businessmen of Chinese origins. We have since never heard of any changes having occurred in the articles of association of the company to date. The deed of amendment was made by Mr. Aris Hendrawan Halim, SH, a public notary in Jakarta under Company Registration Number C-7442 HT.01.01.TH. 2001, dated May 15, 2001.

P.T. KMD has been operating since 2001 in the sport shoes industry, managing a plant located on a 8,000 sq.m. land plot at Jalan Soekarno Hatta 174-174 A, Jombang, East Java. The land was rent since 2001. The plant producing sport shoes of 350,000 pairs per annum. About 70% of the plant's production is exported by way of job orders like the LOTTO brand to Taiwan and Hong Kong and other countries. Besides, about 30% of its production of the LOGO, WOTSTAR and SPEED brands is also marketed in the country. The basic/auxiliary material in the form of leather is for the larger part imported and for a small part supplied from local production. The steep rupiah depreciation to the US$ and other strong foreign currencies has positively affected P.T. KMD's business, because some 70% of its production has been exported bringing in increased sales revenues in Rupiah. On the other hand, the protracted economic crisis also has adversely affected the company for having very highly pushed up the prices of basic material and production cost. P.T. KMD is classified as a medium sized company in the country dealing with sport shoes manufacturing of which the operation had been running slowly in the last five years.

In general, we observed that before the economic crisis striking Indonesia, the existing shoe manufacturing companies in Indonesia already encountered many problems like an over investment and low knowledge skill in the industry which caused many shoes manufacturing companies to stop operation before the economic crisis striking Indonesia. Besides that, Indonesian shoes producers also got strong competition from Vietnam, the new comer which may appear as the quite heavy competitor apart from the People's Republic of China.

The Realization Export of Indonesia Shoes and Components, 2001-2005

Years	Value (US$ )	Growth (%)
2001 2002 2003 2004 2005 2006	1,505,580,76 1,148,052,59 1,182,185,62 1,325,550,00 1,486,339,215 1,618,623.402	4,39% 9,96% 23,75% 2,97% 12,13% 8.90%

Source : Central Bureau of Statistic

Until this time P.T. KMD has not been registered with Indonesian Stock Exchange, so that they shall not obliged to announce their financial statement. We observed that total sales turnover of the company in 2004 amounted to Rp. 10.5 billion increased to Rp. 11.3 billion in 2005, to Rp. 12.0 billion in 2006 and to Rp 15.5 billion in 2007 with a net profit of Rp. 0.9 billion. As from January-June 2008 the sales turnover is amounted to Rp. 8.7 billion and the company has an estimated total net worth at least Rp. 2.5 billion. It is projected that total sales turnover of the company will increase at least 12% until 2008.

We observe that P.T. KMD is supported by financially fairly strong behind it. So far, we did not hear that 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. KMD is headed by Mr. John Pangalela Hiantoro (35), a businessman with more than 6 years of experience in sport shoes 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 did not hear 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.

P.T. KARYA MEKAR DEWATAMALI 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.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.48.72
UK Pound	1	Rs.82.17
Euro	1	Rs.65.90

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

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