MIRA INFORM REPORT

Report Date :

28.04.2014

IDENTIFICATION DETAILS

Name :	P.T. UNGARAN SARI GARMENTS

Registered Office :	Sentra Mulia Building, 11th Floor Suite 1112 A, Jalan H.R. Rasuna Said Kav. X-6 No. 8 Jakarta Selatan, 12940

Country :	Indonesia

Date of Incorporation :	01.10.1985

Com. Reg. No.:	AHU-38627.AH.01.02.TH.2008

Legal Form :	Limited Liability Company

Line of Business :	Manufacturing of Garments

No of Employees :	6,041 persons

RATING & COMMENTS

MIRA’s Rating :

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 – September 30, 2013

Country Name

Previous Rating

(30.09.2013)

Current Rating

(01.12.2013)

Indonesia

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

INDONESIA - ECONOMIC OVERVIEW

Indonesia, a vast polyglot nation, has grown strongly since 2010. During the global financial crisis, Indonesia outperformed its regional neighbors and joined China and India as the only G20 members posting growth. The government has promoted fiscally conservative policies, resulting in a debt-to-GDP ratio of less than 25% 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 also faces the challenges of quelling labor unrest and reducing fuel subsidies in the face of high oil prices.

Source : CIA

BASIC SEARCH

Name of Company :

P.T. UNGARAN SARI GARMENTS

Address :

Head Office

Sentra Mulia Building, 11^th Floor Suite 1112 A

Jalan H.R. Rasuna Said Kav. X-6 No. 8

Jakarta Selatan, 12940

Indonesia

Phones - (62-21) 5229344, 5220605, 5227260

Fax - (62-21) 5229366, 5222015, 5266568

E-mail - sniff@indosat.net.id

Building Area - 12 storey

Office Space - 400 sq. meters

Region - Commercial

Status - Rent

Factory

Jalan Pangeran Diponegoro No. 235

Desa Genuk, Ungaran

Semarang, 50512

Central Java

Indonesia

Phones - (62-24) 921113, 921442

Fax - (62-24) 921443

Land Area - 25,000 sq. meters

Building Area - 22,300 sq. meters

Region - Industrial Zone

Status - Owned

Date of Incorporation :

a. 24 September 1975 as P.T. UNGARAN GARMENTS

b. 01 October 1985 as P.T. UNGARAN SARI GARMENTS

Legal Form :

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

Company Reg. No. :

The Ministry of Law and Human Rights

- No. C2-264 HT.01.01.TH.86

Dated 15 January 1986

- No. AHU-38627.AH.01.02.TH.2008

Dated 07 July 2008

Company Status :

Foreign Investment (PMA) Company

Permit by the Government Department :

a. The Department of Finance

NPWP No. 01.139.605.8-505.000

b. The Department of Industry

- No. 620/T/Industri/1997

Dated 17 December 1997

- No. 506/T/Industri/2006

Dated 8 June 2006

c. The Capital Investment Coordinating Board

- No. 84/V/PMA/2006

Dated 10 May 2006

- No. 1191/III/PMA/2007

Dated 16 August 2007

Related Company :

a. P.T. CITRA ABADI SEJATI (Garment Manufacturing)

b. P.T. ERATEX DJAJA Tbk (Integrated Textile Industry)

CAPITAL AND OWNERSHIP

Capital Structure :

Authorized Capital : Rp. 200,000,000,000.-

Issued Capital : Rp. 62,700,000,000.-

Paid up Capital : Rp. 62,700,000,000.-

Shareholders/Owners :

a. Mrs. Lila of Indonesia - Rp. 19,855,000,000.-

Address : Jl. Mataram No. 3

Kelurahan Petisah Tengah, Medan,

North Sumatra

Indonesia

b. Mr. Marimutu Maniwanen - Rp. 19,855,000,000.-

Address : Apartment Semanggi unit 7-06

Petamburang, Jakarta Pusat

Indonesia

c. Ms. Jeanne Hema Manimaren - Rp. 6,618,400,000.-

Address : 182 Kent Avenue Bridgeport

Connecticut

USA

d. Ms. Marissa Jeanne Maren - Rp. 6,618,300,000.-

Address : 182 Kent Avenue Bridgeport

Connecticut

USA

e. Mr. Daniel James Manimaren of the USA - Rp. 6,618,300,000.-

Address : Jl. Address : 182 Kent Avenue Bridgeport

Connecticut

USA

f. Mr. Slamet Nugroho - Rp. 3,135,000,000.-

Address : Jl. Pinguin VII Block CM No. 11

Pondok Aren, Tangerang

Jakarta Barat, Indonesia

BUSINESS ACTIVITIES

Lines of Business :

Garment Manufacturing

Production Capacity :

Garment (Shirts, Blouses, Jacket, Dresses) - 1,005,540 dozen p.a.

Total Investment :

a. Equity Capital - Rp. 62.7 billion

b. Loan Capital - None________

c. Total Investment - Rp. 62.7 billion

Started Operation :

1977

Brand Name :

Ungaran Sari Garment

Technical Assistance :

None

Number of Employee :

6,041 persons

Marketing Area :

Local - 10%

Export - 90%

Main Customer :

Buyers in the USA and Europe Union

Market Situation :

Very Competitive

Main Competitors :

a. P.T. BUSANA REMAJA AGRACIPTA

b. P.T. BINTANG ADI BUSANA

c. P.T. MASTERINDO JAYA ABADI

d. P.T. METRO GARMENT, Etc

Business Trend :

Growing

BANKER, AUDITOR & LITIGATION

Bankers :

a. P.T. Bank NEGARA INDONESIA Tbk

Wisma 46-Kota BNI

Jalan Jend. Sudirman Kav. 1

Jakarta Pusat

Indonesia

b. P.T. Bank MANDIRI Tbk

Plaza Mandiri

Jalan Jend. Gatot Subroto Kav. 36-38

Jakarta Selatan

Indonesia

Auditor :

Internal Auditor

Litigation :

No litigation record in our database

FINANCIAL FIGURE

Annual Sales (estimated) :

2011 – Rp. 835.0 billion

2012 – Rp. 850.0 billion

2013 – Rp. 865.0 billion

Net Profit (estimated) :

2011 – Rp. 50.1 billion

2012 – Rp. 55.2 billion

2013 – Rp. 60.5 billion

Payment Manner :

Average

Financial Comments :

Satisfactory

KEY EXECUTIVES

Board of Management :

President Director - Mr. Marimutu Maniwanen

Director - Mr. Haji Slamet Nugroho

Board of Commissioners :

President Commissioner - Mr. Ibrahim Zarkasi

Commissioners - a. Mrs. Wanistri

b. Mr. Santanamani

Signatories :

President Director (Mr. Marimutu Maniwanen) or the Director (Mr. Haji Slamet Nugroho) which must be approved by Board of Commissioner

CAPABILITIES

Management Capability :

Good

Business Morality :

Good

OVERALL PERFORMANCE

Initially named P.T. UNGARAN GARMENTS, it was established in Ungaran, Central Java based on notary deed of Mr. RM. Soeprapto, SH., No. 99 dated 24 September 1975 with the authorized capital of Rp. 1,100,000,000 of which Rp. 275,000,000 was wholly issued and paid up. The founding shareholders are Mr. Marimutu Ganesan, the late Mr. Marimutu Manimaren (died in August 2003), both are Indonesian businessmen of Indian extraction, and Mr. Pungki Nursenisidi, an indigenous businessman. The articles of association of the company have frequently been revised. In October 1985, the company renamed to P.T. UNGARAN SARI GARMENT (P.T. USG). Based on notary deed of Mr. J. Tirtaamidjaja, SH., No. 22 dated 7 March 1997, the authorized capital of the company was increased to Rp. 2,000,000,000 of which Rp. 1,162,000,000 was wholly issued and paid up and concurrently the shareholders of P.T. USG were Mr. Marimutu Sanivasan, the late Mr. Marimutu Manimaren and Mr. Haji Slamet (Pong) Nogroho. Later based on notary deed of Mrs. Nurul Hidayati, SH., No. 41 dated 30 June 1999, the company’s authorized capital was increased to Rp. 75,000,000,000 of which Rp. 29,700,000,000 was wholly issued and paid up. At the same time, the shareholders of P.T. USG were the late Mr. Marimutu Manimaren, Mr. Kalindas, Mr. Slamet Nugroho and Mrs. Lita. Then based on notary deed of Mrs. Nurul Hidayati, SH., No. 07 dated 17 May 2006 the authorized capital was increased to Rp. 200,000,000,000 issued capital to Rp. 62,700,000,000 fully and paid up.

On the same occasion, Mr. Kalindas pulled out and into the company entered three new shareholders, namely Ms. Jeanne Hema Manimaren, Ms. Marissa Jeanne Maren and Mr. Daniel James Manimaren, all of the USA. Concurrently the company status was converted into Foreign Investment (PMA) company facility.

Then based on notary deed of Mrs. Dewantari Handayani, SH., No. 012 dated 20 June 2008 the board of directors and the board of commissioner reappointed to lead and runs of the company’s operation. The deed of amendment was approved by the Ministry of Law and Human Right in its Decision Letter No. AHU-38627.AH.01.02.TH.2008, dated July 07, 2008.

We see that Ms. Jeanne Hema Manimaren, Ms. Marissa Jeanne Maren and Mr. Daniel James Manimaren all are the son of the late Mr. Marimutu Manimaren and they are now lived and has been American citizen of India descent. Besides, their family like Mr. Maimutu Maniwanen and Mr. Marimutu Sinivasan and family members is also the majority business stakes owner of the TEXMACO Group members, a business group having serious financial difficulties with in five years.

P.T. USG obtained a Foreign Investment Company (PMA) facility to deal with garment manufacturing. Its plant is located in Gemuk village, Jalan Diponegoro No. 235, Ungaran, Central Java on a land of 2.5 hectares having been in operation since 1977. The plant has been expanded for a couple of times to increase its production capacity. According to its license, the company has annual garment production capacity of 1,005,540 dozen of shirts, blouses, dresses and jackets. The construction of the plant has absorbed an investment of Rp. 62.7 billion originally coming from owned capital. About 85% of the textile materials required by the plant is supplied by P.T. USG's sister companies within the TEXMACO Group with the rest being imported or supplied by foreign buyers of its production. About 90% of the company products are exported to various countries while Japan, the USA the Netherlands, Germany, the UK, Italy, France and others. Meanwhile the rest of 10% is marketed locally among supermarket management and others.

The range of garments includes both Men's and Women's dress and causal shirts, blouses, pants, shorts, skirts, dresses, blazers and suits, athletic wear, jeans wear, golfwear, and outerwear jacket, and vests. Customers include A&F, Adidas, Ann Taylor, Calvin Klein, Chaps, Esprit, Jones, Liz Claiborne Macys, Marks & Spencer, Nike, Nygard, Polo Ralph Lauren, PVH, Talbots, Tommy Hilfiger and others. The global 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). We observe the operation of P.T. USG has been growing slowly in the last three years.

The textile and textile product (TTP) industry is one of the industries that has contrived to with stand the protracted global economic crisis. At a time when the average national industrial utilization rate fell to under 20% in 2008, TTP plants on the other hand were operating at an utilization rate of above 81.6%. This was attributable to the ability of textile and garment producers to maintain the utilization rate of plants at a high level by aggressively stepping up exports.

According to the Central Bureau of Statistics (BPS) the Indonesian garments export in 2002 amounted to 333,100 tons (US$ 3,887.2 million) 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 to 399,600 tons (US$ 5,608.1 million) in 2006, to 399,800 tons (US$ 5,712.9 million) in 2007 rose to 417,600 tons (US$ 6,092.2 million) in 2008 declined to 393.400 tons (US$ 5,735.6 million) in 2009 and 445,200 tons (US$ 6,598.0 million) in 2010 rose to 450.9 ton (7,801.5 million) in 2011 decline to 450,200 tons (US$ (7,304.8 million) in 2012.

The Indonesia textile products export in 2002 amounted to 1,425.9 tons (US$ 3,075.9 million) 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 to 1,477.8 tons (US$ 3,908.6 million) in 2006 to 1,473.6 tons (US$ 4,178.0 million) in 2007 decrease to 1,312.2 tons (US$ 4,127.9 million) in 2008 rose to 1,369.6 tons (US$ 3,602.8 million) in 2009 and to 1,525.9 tons (US$ 4,721.8 million) in 2010 decreased to 1,493.3 tons (5,563.3 million) in 2011 increase to 1,508.5 tons (US$ 5,278.1 million) in 2012.

The domestic textile producers are pessimism the textile export in 2009 could match the export numbers in 2008. The blow of the global economic crisis is resulted in the reduced of demand from the export destination countries like the United States (U.S.), Japan, and European Union region. While this year’s the exports expected fall into US$ 9.7 billion. The Chairman of the Indonesian Textile Association (API), Mr. Benny Soetrisno said that the decline in global purchasing power caused of the demand in the Indonesian textile products could not be able to grow as tight as 2008. The export volume and value of the national TPT products in 2002 to 2012 are pictured on the following table.

Year

Garment

Textile Products

(Thousand Ton)

(US$ Million)

(Thousand Ton)

(US$ Million)

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

333.1

339.9

327.3

369.5

399.6

399.8

417.6

393.4

445.2

450.9

350.2

3,887.2

4,037.9

4,351.9

4,967.0

5,608.1

5,712.9

6,092.2

5,735.6

6,598.0

7,801.5

7,304.8

1,425.9

1,307.5

1,300.4

1,427.3

1,477.8

1,473.6

1,312.2

1,369.6

1,525.9

1,493.3

1,508.5

3,075.9

3,064.6

3,354.6

3,704.0

3,908.6

4,178.0

4,127.9

3,602.8

4,721.8

5,563.3

5,278.1

Until this time P.T. USG has not been registered with Indonesian Stock Exchange, so that they had not obliged to announce their financial statement. The management of P.T. USG is very reclusive towards outsiders and rejected to disclose its financial condition. We observed that total revenue of the company in 2011 amounted to Rp. 835.0 billion rose to Rp. 850.0 billion in 2012 increased to Rp. 865.0 billion in 2013 and projected to go on rising by at least 3% in 2014. The operation in 2013 yielded an estimated net profit of at least Rp. 60.5 billion and the company has an estimated total net worth of at least Rp. 178.0 billion. The punctual payment habit of the company ranging from 1 to 3 months is running smoothly. So far, we did not heard that the company having been black listed by the Central Bank (Bank Indonesia).

The management of P.T. USG is led by Mr. Marimutu Maniwanen (59), a businessman with wide experience in various businesses especially in the TEXMACO Group. Mr. M. Maniwanen serves as the President Director of Busana Apparel Group. Mr. Maniwanen is one of the most successful entrepreneurs with vast experience for more than 30 years in textile and apparel industry. In the earlier part of his career, Mr. Maniwanen was involved in setting up PT. Apac Inti Corporation, one of the largest textile mills in Indonesia which focuses on spun yarns and fabrics. He also plays an active role in the Apparel Association of Indonesia.

In his daily activities, he is supported by Mr. Slamet (Pong) Nugroho (72) as the director. The management of the company is supported by a team of professional managers having wide relation with overseas and national private businessmen as well as with the government sectors. 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. UNGARAN SARI GARMENTS is sufficiently fairly good for business transaction.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs. 61.11
UK Pound	1	Rs.102.70
Euro	1	Rs. 84.52

INFORMATION DETAILS

Analysis Done by :	RSM

Report Prepared by :	DPT

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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