MIRA INFORM REPORT

Report Date :

07.03.2011

IDENTIFICATION DETAILS

Name :	P.T. KSW BATAM
Registered Office :	Ladtrade Industrial Park Block G Lot 1-4, Jalan Sei Binti Tanjung Uncang, Sagulung, Kepulauan Riau, Batam 29432
Country :	Indonesia
Date of Incorporation :	08.12.2004
Com. Reg. No.:	No. AHU-91259.ah.01.02.Tahun 2008
Legal Form :	Limited Liability Company
Line of Business :	Safety Shoe Manufacturing

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$ 5,600,000
Status :	Satisfactory
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 – December 31, 2010

Country Name	Previous Rating (30.09.2010)	Current Rating (31.12.2010)
Indonesia	b1	b1

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

Name of Company

P.T. KSW BATAM

company Address

Head Office & Factory

Ladtrade Industrial Park Block G Lot 1-4

Jalan Sei Binti Tanjung Uncang

Sagulung, Kepulauan Riau

Batam 29432

Indonesia

Phone - (62-778) 392777 (hunting)

Fax. - (62-778) 393777

Email - kswbatam@kingsafetywear.com

Website - http://www.kingsafetywear.com

Land Area - 30,000 sq. meters

Office Space - 12,500 sq. meters

Region - Industrial Estate

Status - Rent

Date of Incorporation

08 December 2004

Legal Form

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

Company Reg.No.:

No. AHU-91259.ah.01.02.Tahun 2008

Dated 28 November 2008

Company Status

Foreign Investment Company (PMA)

Permit by the Government Department

a. The Capital Investment Coordinating Board

No. 828/I/PMA/2004

Dated 23 November 2004

b. The Department of Finance

NPWP No.02.437.167.6-215.000

TDP No. 041011903559

Related Company

The KING’S SAFETY WEAR Group Member

CAPITAL AND OWNERSHIP

Capital Structure :

Authorized Capital - US$. 8,000,000.- (Rp. 71,864,000,000.-)

Issued Capital - US$. 8,000,000.- (Rp. 71,864,000,000.-)

Paid Up Capital - US$. 8,000,000.- (Rp. 71,864,000,000.-)

Shareholders/Owners :

a. KING’S SAFETYWEAR INDONESIA Pte. Ltd. - US$. 7,999,000.- (99.99%)

Address : 22 Defu Lane 1,

Defu Industrial Estate

Singapore 539493

b. Mr. Chan Sian Lek - US$ 1,000.- ( 0.01%)

Address : 70 Sommerville Road

Singapore 358301

Passport No. S 1456029 G

BUSINESS ACTIVITIES

Lines of Business :

Safety Shoe Manufacturing

Production Capacity :

Safety Shoes – 1,250,000 pairs p.a.

Total Investment :

a. Equity Capital - US$. 8.0 million

b. Loan Capital - US$. 4.0 million

c. Total Investment - US$. 12.0 million

Started Operation :

February 2005

Brand Name :

KING’S SAFETY SHOES

Technical Assistance :

KING’S SAFETYWEAR INDONESIA Pte. Ltd.

Number of Employee :

560 persons

Marketing Area :

a. Export - 90%

b. Local - 10%

Main Customer :

Buyers in Asia, Europe and USA

Market Situation :

Very Competitive

Main Competitors :

a. P.T. OSHA ASIA

b. P.T. HENGTRACO PROTECSINDO

c. P.T. GRAND SHOE INDUSTRY

d. P.T. MITRA GABATA DINAMIKA

e. Etc.

Business Trend :

Growing

BANKER, AUDITOR & LITIGATION

Bankers :

a. P.T. Bank UOB INDONESIA

Batam Branch

Batam 29432

b. P.T. Bank MANDIRI Tbk.

Batam Branch

Batam 29432

Auditor :

Internal Auditor

Litigation :

No litigation record in our database

FINANCIAL FIGURE

Annual Sales (Estimated) :

2007 – Rp. 230.0 billion

2008 – Rp. 280.0 billion

2009 – Rp. 340.0 billion

2010 – Rp. 408.0 billion

Net Profit (Estimated) :

2007 – Rp. 18.4 billion

2008 – Rp. 22.5 billion

2009 – Rp. 27.0 billion

2010 – Rp. 32.0 billion

Payment Manner :

Average

Financial Comments :

Satisfactory

KEY EXECUTIVES

Board of Management :

Director - Mr. Chan Sen Meng

Board of Commissioners :

Commissioner - Mr. Teo Mui Kwang

Signatories :

The Directors (Mr. Chan Seng Meng) which must be approved by the Commissioner (Mr. Teo Mui Kwang)

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$ 5,600,000.- on the 90 days of payments

OVERALL PERFORMANCE

P.T. KSW BATAM was established in Batam (Kepulauan Riau) on 8 December 2004 with the authorized capital of US$ 4,000,000.- of which US$ 1,000,000.- was issud and fully paid up. The founding shareholders of the company are KING’S SAFETYWEAR INDONESIA Pte., Ltd., of Singapore (99.9%) and Mr. Chan Sian Lek, a businessman of Singapore. The Articles of Association was made by Mr. Soehendro Gautama, SH., a public notary in Batam under Company Registration Number C-03946.HT.01.01.TH. 2005, dated February 16, 2005.

In September 2008 the authorized capital was raised to US$ 8,000,000.- entirely was issued and fully paid up. The shareholder’s structure of the company are KING’S SAFETYWEAR INDONESIA Pte., Ltd., (99.99%) and Mr. Chan Sian Lek (0.01%). The deed of amendment was made by Mr. Soehendro Gautama, SH., a public notary in Batam under Company Registration Number AHU-91259.AH.01.02.Tahun 2008, dated November 28, 2008. No changes have been effected in term of its shareholding composition and capital structures to date.

KING’S SAFETYWEAR INDONESIA Pte., Ltd., a member of the KING’S SAFETYWEAR Group, a company group mainly dealing with industry and trading of safety shoes, based in 22 Defu Lane 1, Defu Industrial Estate, Singapore 539493. The company is also established another company in Jakarta named P.T. KIN’S SAFETYWEAR is engaged in safety shoe manufacturing.

P.T. KSW BATAM has been in operation since early 2005 dealing with safety shoe manufacturing by managing a plant doubling as its head office located in Latrade Industrial park Block G Lot 1-4, Jalan Sei Binti, Tanjung Uncang, Sagulung, Batam. The plant has annual production of 1,250,000 pairs of safety shoes. The plant has absorbed an investment of US$ 4.0 million come from company capital of US$. 1.0 million and the balance from loans. Miss Irawati, a senior staff of P.T. KSW BATAM said that a large extent of the company’s products are exported to its subsidiary companies of the KING’S SAFETYWEAR Group spreading in overseas under King’s brand. The operation of the company has been increasing since its operation in early 2005 and estimated to be growing in the coming years. However, the company’s products have to compete tightly with similar products being sold in domestic and international markets. P.T. KSW BATAM is classified as a large sized company in the country dealing with safety shoe industry.

Generally, demand for safety shoes has been increasing by 5% to 6% the last five years in which it had drastically been decreasing s the impact of the economic crisis in the country in 1997. However, the competition is very tight on account of lots of similar companies dealing with safety shoe manufacturing such as P.T. OSHA ASIA, P.T. HENGTRACO PROTECSINDO, P.T. GRAND SHOE INDUSTRY, P.T. MITRA GABATA DINAMIKA and others. Beside in domestic markets, the safety shoes of the company are also exported to Asia, Europe and the USA. The business position of P.T. KSW BATAM is favorable for having established wide marketing networks within and outside the country. Besides, he company is backed up by its holding company KING’S SAFETYWEAR INDONESIA Pte., Ltd., based in Singapore.

The company is neither public listed nor bond issued company. Therefore, the company has no obligation to publish financial statements publicly. The management strongly rejected to disclose its financial condition, but we estimated that total sales turnover of P.T. KSW BATAM in 2008 amounted to Rp. 280.0 billion increased to Rp. 340.0 billion in 2009 rose again to Rp. 408.0 billion in 2010 and projected to be rising by at least 10% in 2011. The operation of the company in 2010 is estimated to have gained a net profit of Rp. 32.0 billion with a total net worth of Rp. 120.0 billion. So far we did not hear that P.T. KSW BATAM has been black listed by Bank Indonesia (Central Bank) or having detrimental cases being settled in local district court. Payment condition for domestic and overseas suppliers is good with the credit payment system of 1 month to 3 months.

The management of the company is headed by Mr. Chan Sen Meng (55), a businessman of Singapore with more than 21 years experience in safety shoe manufacturing and trading. He is also one of top-figure of KING’S SAFETYWEAR INDONESIA Pte., Ltd. The management is handled by experienced professional managers from Singapore and Indonesia having wide relation with private businessmen of hoe and overseas as well as with the government sectors. So far, we did not hear that P.T. KSW BATAM has been involved in business malpractices. P.T. KSW BATAM is appraised to be good for normal business transaction.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.44.99
UK Pound	1	Rs.73.24
Euro	1	Rs.62.80

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

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