MIRA INFORM REPORT

Report Date :

26.12.2011

IDENTIFICATION DETAILS

Name :	P.T. ISTANA PALAPA KERTAS (P.T. ISPAK)
Registered Office :	Jalan Tanah Abang III No. 28 A-B, Jakarta Pusat, 10160
Country :	Indonesia
Date of Incorporation :	02.02.1977
Com. Reg. No.:	C-12517 HT.01.04.TH.2003
Legal Form :	Limited Liability Company
Line of Business :	Export Import and General Trading
No. of Employee:	62 persons

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$ 681,800
Status :	Moderate
Payment Behaviour :	No Complaints
Litigation :	Clear

NOTES :

Any query related to this report can be made on e-mail: infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – September 30, 2011

Country Name	Previous Rating (30.06.2011)	Current Rating (30.09.2011)
Indonesia	B1	B1

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

Full Name of Company

P.T. ISTANA PALAPA KERTAS (P.T. ISPAK)

Address

Head Office

Jalan Tanah Abang III No. 28 A-B

Jakarta Pusat, 10160

Indonesia

Phones - (62-21) 384 1001 (5 lines), 352 2149-50

Fax. - (62-21) 385 2712, 384 1250

E-mail - ispak@cbn.net.id

Website - http://www.ispak.co.id

Building Area - 3 storey

Building Space - 320 sq. meters

Region - Commercial Building

Status - Rent

Branch

Jalan Gula No. 1

Slompretan, Surabaya

East Java

Indonesia

Phone - (62-31) 3526 826, 352 9467

Fax - (62-31) 355 6802

Building Area - 2 storey

Building Space - 200 sq. meters

summary

Date of Incorporation :

2 February 1977

Legal Form :

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

Company Reg. No. :

The Ministry of Justice and Human Rights

No. C-12517 HT.01.04.TH.2003

Dated 5 June 2003

Company Status :

National Private Company

Permit by the Government Department :

The Directorate General of Tax

NPWP No. 01.108.138.7-028.000

Related Company :

P.T. AMESH INDAH INTERNATIONAL (Export Import of Steel and Iron, Chemical, Alumina Hydrate and Garment Products)

CAPITAL AND OWNERSHIP

Capital Structure :

Authorized Capital - Rp. 1,000,000,000.-

Issued Capital - Rp. 900,000,000.-

Paid up Capital - Rp. 900,000,000.-

Shareholders/Owners :

a. Mr. Viviek Hariram Mahtani - Rp. 300,000,000.-

Address : Jl. Arjuna No. 32

Tanjung Duren, Jakarta Barat

Indonesia

b. Mr. Harbindar Singh - Rp. 300,000,000.-

Address : Jl. Gunung Sahari VII C/4 A

Jakarta Pusat

Indonesia

c. Mr. Suresh Kishinchand Chandiramani - Rp. 300,000,000.-

Address : Jl. Merpati Block A-20, Kemayoran

Jakarta Pusat

Indonesia

BUSINESS ACTIVITIES

Lines of Business:

Export Import and General Trading

Production Capacity :

None

Total Investment :

None

Started Operation :

1977

Brand Name :

None

Technical Assistance :

None

Number of Employee :

62 persons

Marketing Area :

Export - 50%

Local - 50%

Main Customer :

Buyers in India, USA, Japan and local distributors

Market Situation :

Very Competitive

Main Competitors :

a. P.T. NAVSHANTI INDONESIA

b. P.T. NAR STAINLESS STEEL

c. P.T. ESSAR INDONESIA

d. P.T. AMES INDAH INTERNATIONAL

Business Trend :

Growing

BANKER, AUDITOR & LITIGATION

B a n k e r :

STANDARD CHARTERED Bank

Wisma Standard Chartered Bank

Jalan Jend. Sudirman No. 33 A

Jakarta Pusat

Indonesia

Auditor :

Internal Auditor

Litigation :

No litigation record in our database

FINANCIAL FIGURE

Annual Sales (estimated) :

2006 – Rp. 65.0 billion

2007 – Rp. 69.0 billion

2008 – Rp. 72.0 billion

Net Profit (estimated) :

2006 – Rp. 2.6 billion

2007 – Rp. 2.8 billion

2008 – Rp. 3.0 billion

Payment Manner :

Almost Promptly

Financial Comments :

Satisfactory

KEY EXECUTIVES

Board of Management :

President Director - Mr. Suresh Kishichand Chandriramani

Director - Mr. Viviek Hariram Mahtani

Board of Commissioners :

President Commissioner - Mr. Harbindar Singh

Commissioner - Mr. Hariram Mangharam Mahtani

Signatories :

President Director (Mr. Suresh Kishinchand Chandiramani) or the Director (Mr. Viviek Hariram Mahtani) which must be approved by Supervisory Board.

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$ 681,800 on 90 days D/A

OVERALL PERFOMANCE

P.T. ISTANA PALAPA KERTAS or abbreviated to P.T ISPAK, it was established in Jakarta in February 1977 with the authorized capital of Rp. 10,000,000 of which Rp. 2,000,000 was issued and fully paid up. The founding shareholders are Mr. Hariram Mangharam Mahtani and Mr. Harbinder Singh, both are Indonesian of Indian extraction. The articles of association of the company have frequently been revised. In April 1979, the authorized capital was raised to Rp. 50,000,000 of which Rp. 25,000,000 was issued and fully paid up. In February 1987, the authorized capital was increased to Rp. 125,000,000 entirely issued and paid up. In December 1993, the authorized capital of the company was raised to Rp. 750,000,000 of which Rp. 600,000,000 was issued and fully paid up and concurrently into the company entered a new shareholder namely Mr. Suresh Kishinchand Chandiramani.

The latest January 2003, the authorized capital was increased against to Rp. 1,000,000,000.- issued capital to Rp. 900,000,000.- entirely paid up. The deed of amendment was made by Mrs. Lindasari Bachroem, SH, a public notary in Surabaya and was approved by the Ministry of Law and Human Right in its Decision Letter No. C-12517 HT.01.04.TH. 2003, dated June 5, 2003.

The founder and the majority share owner of the company namely Mr. Hariram Mangharam Mahtani, an Indonesian businessman of Indian extraction, is also the founder and the majority business stake owner of P.T. AMESH INDAH INTERNATIONAL dealing with export import of steel and iron, chemical, alumina hydrate and garment products

P.T. ISPAK has been in operation since 1977 dealing with general trading and export import of gums & resins (gum resin, gum turpentine oil, dammar batu, gum benzoin), forestry products (gambier, seedlac, shellac), spices & agri produce and food products (cocoa beans, desiccated coconut, nutmegs, mace, cloves, cassia vera), edible oils & by products (margarine, soap noodles, palm oil, palm fatty acid, palm acid oil), glass & glass products (pharmaceutical division amber bottles and cosmetic bottles), chemical, dyestuff & food colors (soda ash, sodium sulphate, feldspars, castor oil, paraffir wax, caustic soda, dyestuff (disperse, reactive, direct acids and pigment), pulp, paper products & paper cones (paper cones, tissue paper, pulp, hand wood & soft wood) and engineering items (automobile 2 & 3 wheeler spare parts, bicycle spare parts, hand tools, engineering products).

The products being sold include chemical products for industries, garments, textiles, shoes, steels, agricultural and furniture products. The merchandise products are local and imported products. In local product trading, the company markets various products of local companies including Public Company (Perum) PERHUTANI, P.T. KRAKATAU STEEL, the SINAR MAS Group and others. Whereas, the imported products being traded by the company are motor vehicle spare parts of India, textile products of Japan, Korea and the USA. Besides, P.T. ISPAK has more focused its activities in trading of chemical products. The chemical products being sold by the company include dyestuffs, bulk drugs being imported from RR MEWANI & Co of India.

While chemical products for export markets, P.T. ISPAK sells gum resin, turpentine oil, gum copal and oleo pine resin. The export destination countries of the company products are Hong Kong, Singapore and European countries. The company also exports garment products, textile products, shoes, and furniture based on market demand. The operation of P.T.ISPAK has been running smoothly in the last five years in line with the operation networks and wide marketing networks.

Generally outlook, the steel industry in Indonesia has kept on declining since end 1997 under the impact of economic crisis battering Indonesia. The crisis caused the demand of steel products to drop because property sector, steel construction sector, automotive and other sectors using steel in the country have been in sluggish. In next five years demand for steel industry will rise 5% annually. The occurring of the prolonged economic crisis striking Indonesia since mid-1997 affected slow growth in Indonesian economic growth from minus (-13.01) in 1998 to 0.79% in 1999 and rose sharply to 4.92% in 2000. In 2001, the Indonesian economic growth dropped to 3.44% and surged to 4.37% in 2002, rose again to 4.87% in 2003 to 5.13% in 2004 to 5.78% in 2005, to 5.55% in 2006 and 6.31% in 2007. In the meantime, the inflation rate in 1998 amounted to 77.63% dropped to 2.01% in 1999 and increased to 9.35% in 2000. In 2001, the Indonesian inflation rate increased again to 12.55%, dropped to 10.03% in 2002 to 5.06% in 2003 and rose again to 6.40% in 2004 to 17.17% in 2005, to 6.60% in 2006 and 6.59% in 2007. Particular details is as shown on Indonesian several economic indicators as following table :

The Growth of Indonesian Several Economic Indicators 2003-2007

No.	Indicator	2003	2004	2005	2006	2007
1.	Economic Growth (%)	4.87	5.13	5.78	5.55	6.31
2.	Inflation (%)	5.06	6.40	17.17	6.60	6.59
3.	Gross growth based on constant price 1993 (billion Rp)	1,579,558.9	1,660,578.8	1,753,903.0	1,846,654	1,963,974
4.	Foreign Trade Balance (million US$)	24,142.3	25,614.6	27.202.7	39,733	30,367
5.	Export (million US$)	61,058	71,585	83,314	100,798	119,014
6.	Import (million US$)	32,551	46,525	58,329	61,065	88,647

Source : Central Bureau of Statistic

Until this time P.T. ISPAK 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 2006 amounted to Rp. 65.0 billion increased to Rp. 69.0 billion in 2007 to Rp. 72.0 billion in 2008. It is projected that total sales turnover of the company will be higher by at least 4% in 2009. We estimated the company has gained a net profit of Rp. 3.0 billion in 2008 and the company has an estimated total networth at least Rp. 4.0 billion. The financial condition of the company is backed up by financially strong and sound businessmen 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. ISPAK is headed by Mr. Suresh Kishinchand Chandiramani (50), a professional manager of Indian origins who experienced for more than 24 years in the field of export import, general trading. We observed that management’s reputation in said business is fairly good. The management of the company is handled by experienced professional manager having wide relation with private businessmen of home and overseas as well as with the government sectors. 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. ISTANA PALAPA KERTAS or ISPAK is fairly good for business transaction. However, in view of the global economic slowdown we recommend to treat prudently in extending a loan to the company.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.52.72
UK Pound	1	Rs.82.70
Euro	1	Rs.68.90

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	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
--	NB	New Business	--

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

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.