MIRA INFORM REPORT

Report Date :

27.04.2013

IDENTIFICATION DETAILS

Name :	P.T. KHARISMA INDONESIA
Formerly Known as:	P.T. RAJAPAKSI ADYA PERKASA
Registered Office :	Jalan Raya Candi No. 20, Desa Kebonsari, Kecamatan Candi, Sidoarjo, 60000, East Java
Country :	Indonesia
Date of Incorporation :	07.03.1989
Com. Reg. No.:	No. AHU-AH.01.10-33356
Legal Form :	Limited Liability Company
Line of Business :	Sandal, Shoes and Component Manufacturing
No. of Employees :	375

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

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 – March 31^st 2013

Country Name	Previous Rating (31.12.2012)	Current Rating (31.03.2013)
Indonesia	B1	B1

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

Indonesia ECONOMIC OVERVIEW

Indonesia, a vast polyglot nation, grew an estimated 6.2% and 6.5% in 2010 and 2011, respectively. The government made economic advances under the first administration of President YUDHOYONO (2004-09), introducing significant reforms in the financial sector, including tax and customs reforms, the use of Treasury bills, and capital market development and supervision. During the global financial crisis, Indonesia outperformed its regional neighbors and joined China and India as the only G20 members posting growth in 2009. The government has promoted fiscally conservative policies, resulting in a debt-to-GDP ratio of less than 25%, a fiscal deficit below 3%, and historically low rates of inflation. Fitch and Moody's upgraded Indonesia's credit rating to investment grade in December 2011. Indonesia still struggles with poverty and unemployment, inadequate infrastructure, corruption, a complex regulatory environment, and unequal resource distribution among regions. The government in 2013 faces the ongoing challenge of improving Indonesia's insufficient infrastructure to remove impediments to economic growth, labor unrest over wages, and reducing its fuel subsidy program in the face of high oil prices.

Source : CIA

Name of Company

P.T. KHARISMA INDONESIA

Company Address

Head Office & Factory

Jalan Raya Candi No. 20

Desa Kebonsari, Kecamatan Candi

Sidoarjo, 60000

East Java

Indonesia

Phones - (62-31) 8056294, 8962216-18

Fax - (62-31) 8963358

E-mail - charisma-indo@indo.net.id

Website - http://www.kharismaindo.com

Land Area - 15,000 sq. meters

Building Space - 8,700 sq. meters

Region - Industrial Zone

Status - Owned

Date of Incorporation

a. 7 March 1989 as P.T. RAJAWALI SAKTI PERKASA

b. 26 November 1991 as P.T. RAJAPAKSI ADYA PERKASA

c. 25 January 2000 as P.T. KHARISMA INDONESIA

Legal Form

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

Company Reg. No.

The Ministry of Law and Human Rights

- No. AHU-01019.AH.01.02.TH.2009

Dated 7 January 2009

- No. AHU-AH.01.10-33356

Dated 18 October 2011

Company Status

National Private and Domestic Investment (PMDN) Company

Permit by the Government Department

The Department of Finance

NPWP No. 02.102.305.6-617.000

The Capital Investment Coordinating Board

- No. 292/III/PMDN/1991

Dated 5 April 1991

- No. 220/II/PMDN/1996

Dated 7 November 1996

Related Companies

a. P.T. SALIM BROTHERS PERKASA (Sport Shoes Manufacturing)

b. P.T. SURYA NUSA ABADI (Slipper Manufacturing)

CAPITAL AND OWNERSHIP

Capital Structure :

Authorized Capital : Rp. 10,000,000,000.-

Issued Capital : Rp. 4,000,000,000.-

Paid up Capital : Rp. 4,000,000,000.-

Shareholders/Owners :

a. Mr. Amin Salim - Rp. 3,960,000,000.-

Address : Jl. Raya Dharmahusada Inah AA/11

Kelurahan Sawahan, Kecamatan Sawahan

Surabaya, East Java

Indonesia

b. Mr. Tjandra Sasmitra - Rp. 40,000,000.-

Address : Jl. Dharmahusada Barat 2/124

Kelurahan Sawahan, Kecamatan Sawahan

Surabaya, East Java

Indonesia

BUSINESS ACTIVITIES

Lines of Business :

Sandal, Shoes and Component Manufacturing

Production Capacity :

a. Rubber Health Sandal & Shoes - 2,400,000 pieces p.a.

b. Rubber Sole - 2,000,000 pieces p.a.

Total Investment :

a. Equity Capital - Rp. 4.0 billion

b. Local Capital - Rp. 6.0 billion

c. Total Investment - Rp. 10.0 billion

Started Operation :

1994

Brand Name :

Kharisma Indonesia

Technical Assistance :

None

Number of Employee :

375 persons

Marketing Area :

Local - 60%

Export - 40%

Main Customer :

Sandal & Shoes Manufacturing

Market Situation :

Very Competitive

Main Competitors :

a. P.T. BUMI TEGAL ALUR PERMAI

b. P.T. INTI BERGAS INTERNATIONAL

c. P.T. SOLINDAH KITA

d. P.T. SUNG SHIN INDONESIA

e. P.T. TRIMUKTI WIRAPRATAMA

Business Trend :

Growing

BANKER, AUDITOR & LITIGATION

Bankers :

a. P.T. Bank CENTRAL ASIA Tbk

Jalan A. Yani 39 A

Sidoarjo, East Java

Indonesia

b. P.T. Bank MANDIRI Tbk

Jalan A. Yani No. 7

Sidoarjo, East Java

Indonesia

Auditor :

Internal Auditor

Litigation :

No litigation record in our database

FINANCIAL FIGURE

Annual Sales (estimated) :

2010 – Rp. 49.0 billion

2011 – Rp. 53.0 billion

2012 – Rp. 56.0 billion

Net Profit (estimated) :

2010 – Rp. 3.6 billion

2011 – Rp. 4.0 billion

2012 – Rp. 4.6 billion

Payment Manner :

Average

Financial Comments :

Satisfactory

KEY EXECUTIVES

Board of Management :

Director - Mr. Bambang Sugiono

General Manager - Mr. Alberto R. Redillas

Board of Commissioners :

Commissioner - Mr. Amin Salim

Signatories :

Director (Mr. Bambang Sugiono) which must be approved by Board of Commissioner

CAPABILITIES

Management Capability :

Good

Business Morality :

Good

OVERALL PERFORMANCE

Originally the company name P.T. RAJAWALI SAKTI PERKASA was established in Sidoarjo, East java on 7 March 1989 with the authorized capital of Rp. 800,000,000 wholly issued and paid up. The founding and shareholders of the company are Mr. Amin Salim and Mr. Budi Santoso both are Indonesian businessmen of Chinese descents. The company notary deed has been changed a couple of times. In November 1991 the company name was changed to P.T. RAJAPAKSI ADYA PERKASA. Later in January 2000 the company was changed to P.T. KHARISMA INDONESIA (P.T. KI). Then according to the latest revision of notary documents of Mr. Julia Seloadji, SH., No. 19 dated 5 October 2011 the company authorized capital was increased to Rp. 10,000,000,000 issued capital to Rp. 4,000,000,000 fully and paid up. On the same occasion Mr. Budi Santoso withdrew and replaced by Mr. Tjandra Sasmitra as new shareholder. With this time the composition of its shareholders has been changed to become Mr. Amin Salim (99%) and his young brother Mr. Tjandra Sasmitra (1%). The deed of amendments was approved by the Ministry of Law and Human Rights in its decision letter No. AHU-AH.01.10-33356 dated October 18, 2011.

We observe that Mr. Amin Salim and Mr. Tjandra Sasmitra is also business stakes owners of P.T. SALIM BROTHERS PERKASA engaged in the filed of sport shoes manufacturing and P.T. SURYA NUSA ABADI in sandal manufacturing.

P.T. KI started to be operating since 1994 engaged in the field of sandal, shoe and component manufacturing. The plant is located at Jalan Raya Candi No. 20, Sidoarjo, East Java standing on 15,000 sq. meters. The plant produces of rubber health sandal & shoe of 2,400,000 pieces and rubber sole (sandal) of 2,000,000 pieces respectively per annum. The plant produces of sandal and components for man, women, baby & kids, safety/military. P.T. KI supported with highly skilled & experienced workers and range of production facilities. The company has been trusted to produce / some of the world's renowned brands. P.T. KI is hand in hand manufacture of world class quality footwear with a wide-diverse products range from leather and non leather products;

§ Categorically

§ Pre-walkers / infants Shoes

§ Children Shoes

§ Sandals

§ Ladies Fashion Footwear

§ Safety / Work Boots

§ Waterproof Boots

§ Fire men Brigade Boots

Most of raw materials is obtained from locals and the rest imported from China, India and other countries. Besides most of the products is also supplied to sister company P.T. SALIM BROTHERS PERKASA engaged in sport shoes manufacturing and P.T. SURYA NUSA ABADI in sandal/slipper manufacturing. Some of the rubber sole is also supplied to P.T. SEPATU BATA Tbk, P.T. DWI NAGA SAKTI ABADI as well also exported to various Asian countries. We observe the operation of P.T. KI has been growing and developing well in the last three 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. If Indonesian shoes export value in 2005 reached US$ 1,428 million, rose to US$ 1,599 million in 2006 and rose again to US$ 1,637 million in 2007 to US$ 1,885 million in 2008, dropped to US$ 1,734 million in 2009 and increase to US$ 2,000 million in 2010. Footwear export in 2012 was encouraging about 10%. According Indonesian Footwear Association (Asprindo), shoes exports in 2011 reached US$ 3.1 billion. This figure is up 25% from last year's U.S. $ 2.5 billion. Eddy Widjanarko, ASI Chairman, explained that the increase in exports was driven ability of local manufacturers to meet demand, both producer large and small brands. However, the value of these export do not fit the previous set target of US$ 3.2 billion. Because, had some time bookings decreased approximately 10% -20% compared to the months typically. European fears of uncertain conditions make export demand was restrained. While footwear sales in the domestic market reached Rp. 24 trillion to Rp. 25 trillion. This figure is up 10% from 2010's Rp. 22 trillion. Footwear manufacturers still rely on moments of this year's New School Year and other religious holidays to boost sales.

It’s projected the Indonesian shoes export value will be increase in the next two years. P.T. KI is doing quite well in the above business, because whole of its production has been exported. The national shoes production and export value, as shown on the table below:

National Shoes Production and Exports Value 2005-2011

Year	Production (Million Pairs)	Million US$
2005	820,870	1,428
2006	822,624	1,599
2007	797,945	1,637
2008	771,144	1,885
2009	759,577	1,734
2010	779,500	2,500
2011	1,013,350	3,300

Source: Central Bureau of Statistic, processed

Until this time P.T. KI has not been registered with Indonesian Stock Exchange, so that they shall not obliged to announce their financial statement. The management of the company is very reclusive towards outsiders and rejected to disclose its financial condition. We observed that total sales turnover of the company in 2010 amounted to Rp. 49.0 billion rose to Rp. 53.0 billion in 2011 increased to Rp. 56.0 billion in 2012 and projected to go on rising by at least 5% in 2013. The operation in 2012 yielded an estimated net profit of at least Rp. 4.6 billion and the company has an estimated total networth of at least Rp. 10.0 billion. So far, we did not heard 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. KI is led by Mr. Bambang Sugiono (40) a professional manager with experience in sandal and component manufacturing and trading. The company's management is handled by professional staff in the above business. They have wide relations with private businessmen within and outside the country. So far, we did not hear that the management of the company being filed to the district court for detrimental cases or involved in any business malpractices. The company’s litigation record is clean and it has not registered with the black list of Bank of Indonesia. P.T. KHARISMA INDONESIA is sufficiently fairly good for business transaction.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.54.29
UK Pound	1	Rs.83.88
Euro	1	Rs.70.68

INFORMATION DETAILS

Report Prepared by :

MNL

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%)

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