MIRA INFORM REPORT

Report Date :

04.10.2014

IDENTIFICATION DETAILS

Name :	P.T. SMART TBK

Registered Office :	Sinar Mas Land Plaza, Tower II, 28^th – 30^th Floor, Jl. M.H. Thamrin No. 51, Gondangdia, Menteng, Jakarta 10350

Country :	Indonesia

Financials (as on) :	2013

Date of Incorporation :	14.05.1999

Com. Reg. No.:	AHU-AH.01.10-18251

Legal Form :	Public Listed Company

Line of Business :	· Integrated Crude Palm Oil Refinery · Investment Holding

No of Employees :	19,363

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 :	Slow but correct
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 – June 1, 2014

Country Name

Previous Rating

(31.03.2014)

Current Rating

(01.06.2014)

Indonesia

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, 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. SMART TBK

Address:

Head Office

Sinar Mas Land Plaza, Tower II, 28^th – 30^th Floor

Jl. M.H. Thamrin No. 51

Gondangdia, Menteng

Jakarta 10350

Indonesia

Phones - (62-21) 318 1388 (Hunting)

Fax - (62-21) 318 1389

E-mail - investor@smart-corp.com

Website - http://www.smart-corp.com

Building Area - 28 storey

Office Space - 1,200 sq. meters

Region - Commercial

Status - Rent

Factories

a. Jl. Rawa Teratai II/8

Kawasan Industri Pulogadung

Jakarta Timur

Indonesia

Phones - (62-21) 4601672, 4609010

Fax - (62-21) 4602134

b. Jl. Rungkut Industri Raya No. 19

Rungkut Industrial Estate

Surabaya, East Java

Indonesia

Phones - (62-31) 8439861 (hunting)

Fax - (62-31) 8438671

c. Jl. Rungkut Industri I No. 34

Rungkut Industrial Estate

Surabaya, East Java

Indonesia

Phones - (62-31) 8420020 (hunting)

Fax - (62-31) 8420017

d. Jl. Belmera Baru

Belawan III, Belawan

North Sumatra

Indonesia

Phones - (62-61) 6941162 (hunting)

Fax - (62-61) 6941898

Date of Incorporation:

a. 18 June 1962 as PT. Maskapai Perkebunan SUMCAMA PADANG HALABAN

b. 10 September 1991 as PT. SMART CORPORATION

c. 13 August 1997 as PT. SMART CORPORATION Tbk

d. 14 May 1999 as PT. SMART Tbk

Legal Form:

P.T. Tbk (Perseroan Terbatas Terbuka) or Public Listed Company

Company Reg. No.:

The Ministry of Law and Human Rights

a. No. J.A.5/115/3

Dated 29 August 1963

b. No. AHU-53268.AH.01.02.Tahun 2008

Dated 21 August 2008

c. No. AHU-AH.01.10-18251

Dated 20 July 2010

Company Status:

Domestic Investment Company (PMDN)

Permit by the Government Department:

a. The Department of Finance

- NPWP No. 01.000.183.2-092.000

- No. Kep/41/Mekuin/7/1970

Dated 15 July 1970

b. The Capital Investment Coordinating Board

- No. 6/V/1985

Dated 28 March 1985

- No. 1174/II/PMDN/1991

Dated 27 December 1991

- No. 167/II/PMDN/1992

Dated 17 December 1992

- No. 34/II/PMDN/1993

Dated 26 February 1993

- No. 107/II/PMDN/1993

Dated 15 June 1993

- No. 60/II/PMDN/1994

Dated 21 February 1994

- No. 40/II/PMDN/1998

Dated 20 May 1998

- No. 56/II/PMDN/1998

Dated 18 August 1998

- No. 108/III/PMA/2003

Dated 27 June 2003

- No. 77/II/PMDN/2006

Dated 24 August 2006

Related /Affiliated Company :

A Member Company of the SINAR MAS Group

CAPITAL AND OWNERSHIP

Capital Structure :

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

Issued Capital - Rp. 574,439,000,000.-

Paid up Capital - Rp. 574,439,000,000.-

Shareholders (per 31 Dec. 2013) :

a. P.T. PURIMAS SASMITA - Rp. 558,380,000,000.- (97.20%)

b. Publics - Rp. 16,059,000,000.- ( 2.80%)

BUSINESS ACTIVITIES

Lines of Business :

a. Integrated Crude Palm Oil Refinery

b. Investment Holding

Production Capacity :

A. Initial Units

a. Crude Palm Oils - 132,680 tons p.a.

b. Palm Kernel Oils - 80,880 tons p.a.

c. Pellets - 28,620 tons p.a.

d. Cooking Oils - 480,000 tons p.a.

e. Oleins - 270,200 tons p.a.

f. Stearines - 117,000 tons p.a.

g. Margarines - 57,300 tons p.a.

h. Plastic Sheet Films - 480 tons p.a.

i. Plastic Bottles - 7,700 tons p.a.

B. Expansion Units

a. Crude Palm Oils - 34,800 tons p.a.

b. Palm Kernel Meals - 40,020 tons p.a.

c. Margarine - 33,000 tons p.a.

Total Investment :

A. Initial Units

a. Equity Capital - Rp. 228.6 billion

b. Reinvested Profit - Rp. 19.8 billion

c. Loan Capital - Rp. 210.0 billion

d. Total Investment - Rp. 458.4 billion

B. Expansion Units

a. Equity Capital - None

b. Reinvested Profit - Rp. 86.0 billion

c. Loan Capital - Rp. 129.0 billion

d. Total Investment - Rp. 215.0 billion

Started Operation :

1962

Brand Name :

SMART Tbk

Technical Assistance :

None

Number of Employee :

19,363 persons

Marketing Area :

Local/Domestic - 42.6%

Export - 57.4%

Main Customer :

Wholesaler and Importer of Palm Oil, Soaps, Margarines, Supermarkets, etc

Market Situation :

Very Competitive

Main Competitors :

a. PT. Wilmar Corporation

b. PT. Bituang Manado Oil (Bimoli)

c. PT. Musim Semi Mas

d. PT. Sayap Mas Utama

Business Trend :

Fluctuating

BANKER, AUDITOR & LITIGATION

Bankers :

a. P.T. Bank SINAR MAS Tbk

b. P.T. Bank INTERNASIONAL INDONESIA Tbk

c. P.T. Bank PAN INDONESIA Tbk

d. P.T. Bank MANDIRI Tbk

e. P.T. Bank NEGARA INDONESIA Tbk

f. P.T. Bank CENTRAL ASIA Tbk

Auditor :

Mulyamin Sensi Suryanto & Lianny (a member of Moore Stephens)

Litigation :

No litigation record in our database

FINANCIAL FIGURE

Annual Sales :

2009 – Rp. 14,201 billion

2010 – Rp. 20,265 billion

2011 – Rp. 31,676 billion

2012 – Rp. 27,526 billion

2013 – Rp. 23,935 billion

Net Profit :

2009 – Rp. 748 billion

2010 – Rp. 1,261 billion

2011 – Rp. 1,786 billion

2012 – Rp. 2,152 billion

2013 – Rp. 893 billion

Payment Manner :

Average

Financial Comments :

Satisfactory

KEY EXECUTIVES

Board of Management :

President Director - Mr. Jo Daud Dharsono

Vice President Directors - a. Mr. Budi Wijana

b. Mr. Edy Saputra Suradja

Directors - a. Mr. Ir. Lukmono Sutarto

b. DR. Ing. Gianto Widjaja

c. Mr. Jimmy Pramono

Board of Commissioners :

President Commissioner - Mr. Franky Oesman Widjaja

Vice President Commissioners - a. Mr. Muktar Widjaja

b. Mr. Simon Lim

Commissioners - a. Mr. Rachmad Gobel

b. Mr. Rafael Buhay Conception, Jr.

c. Prof. DR. Teddy Pawira

d. Prof. DR. Susiyati B. Hirawan

e. Drs. Endro Agung Partoyo

f. Prof. Hikmahanto Juwana, SH.

Signatories :

President Director (Mr. Jo Daud Dharsono) or one of the Vice PresidentDirectors (Mr. Budi Wijana or Mr. Edy Saputra Suradja) and or one of the directors (Mr. Ir. Lukmono Sutarto, DR. Ing. Gianto Wijaja or Mr. Jimmy Pramono) which must be approved by Board of Commissioners (Mr. Franky Oesman Widjaja, Mr. Muktar Widjaja and Mr.Simon Lim)

CAPABILITIES

Management Capability :

Good

Business Morality :

Satisfactory

OVERALL PERFORMANCE

The company originally named P.T. Maskapai Perkebunan SUMCAMA PADANG HALABAN set-up in June 1962 with an authorized capital of Rp. 17,647,000.- wholly issued and paid-up. Founders and original shareholders are N.V. SUMATRA CAOUTCHOUC MAATSCHAPPY of Belgium, Mr. Raden Soewarso Tirtowiogjo and Mr. Raden Hidajat Soerijanatamihardja, they are indigenous businessmen. In 1985, its whole shareholders pulled out and replaced by P.T. SADANG MAS (a private company). In September 1991, it renamed to P.T. SINAR MAS AGRO RESOURCES AND TECHNOLOGY CORPORATION abbreviated P.T. SMART CORPORATION. In October 1992, parts of its shares were released to the public through the Jakarta Stock Exchange (BEJ). In August 1997 quoted the authorized capital was raised to Rp 1,000,000,000,000.-, issued and paid up capital to Rp 252,000,000,000.- and by the same time the word Tbk. (Terbuka) was added behind the name to comply with new law on public listed company so that the company named P.T. SMART CORPORATION Tbk. In May 2000 the issued capital was raised to Rp 297,360,000,000.- entirely paid up.

In May 1999 the company was renamed P.T. SMART Tbk., and in May 2008 the issued capital was raised to Rp. 574,439,000,000.- and fully paid up. As of 31 December 2012, the shareholders of the company are P.T. PURIMAS SASMITA is a private company (97.20%) and Publics (2.80%). P.T. PURIMAS SASMITA is a member of the SINAR MAS Group, a major business group in the country of which is headed by the Widjaja family.

P.T. SMART Tbk started with operation in 1962 in integrated palm-based plantation. P.T. SCT started with operation in 1962 in integrated oil palm plantation. The plantation and its CPO processing factory were taken over from its ex foreign partner N.V. SUMATRA CAOUTCHOUC MAATSCHAPPIJ of Belgium. Later in 1991, P.T. SMART Tbk took over all of its sister company P.T. MULYOREDJO INDUSTRIAL COMPANY's assets and activity in refining and manufacturing of cooking oil, margarine and edible oils located in Surabaya, East Java.

In 1992, P.T. SMART Tbk has also taken over all of P.T. KUNCI MAS WIJAYA's assets and business activity which is dealing with cooking oil refinery in Jakarta. The company manages a crude palm oil (CPO) and palm kernel oil (PKO) processing plant located in Labuhan Batu North Sumatra, 1 unit processing plant in Belawan (North Sumatra), 1 processing plants in Jakarta and 2 others in Surabaya, East Java. The above all plants produce cooking oil and edible fat like margarine, stearine and olein. The company owns and manages plantations, mills and refineries which manufacture branded and unbranded cooking oil, banded margarine and shortening. P.T. SMART Tbk products are divided into three categories retail, Industrial and Bulk. Retail products are designed for household consumption. Industrial products are aimed at supplying noodle factories, confection factories, bakeries, fast food chains, hotels, hospitals, restaurants and so forth. The later category fetches the premium gross margin as customer requirements are tailor-made to specifications. The branded products cater not only for local but also for international consumption. Finally, Bulk products are unbranded and unpacked goods targeted for mass consumption. P.T. SMART Tbk's cooking products are wholly distributed under FILMA and KUNCI MAS brands, while its margarine products are marketed under PALMBOOM, PUSAKA, PALMVITA, MAESTRO, MENARA EIFEL, RED ROSE, SUNFRY, DELICIO, DELICOA and MITRA brands. Most of the company’s products is distributed locally and distributed by its sister company P.T. INTERMAS TATA TRADING.

P.T. SMART Tbk., also has ownership interest of more than 50% in the following subsidiaries which are engaged in cultivation of oil plantation and operation of mill, organic chemical industry, transportation and oleo chemical industry. The table of P.T. SMART Tbk’s subsidiary companies shall be as follows:

Subsidiary Company (Direct Ownership)	Line of Business and Status of Operations	PT. SMART’s Shares (%)	Domicile	T. Asset as of 31 Dec. 2013 (Rp)
PT. Krena Duta Agroindo	Cultivation of Oil Plantation and Operation of mill	100	Jakarta	1,379,616
PT. Maskapai Perkebunan Leidong West Indonesia	Cultivation of Oil Plantation and Operation of mill	100	Jakarta	165,253
PT. Berau Sarana Jaya	Cultivation of Oil Plantation	100	Samarinda	659
PT. Perusahaan Perkebunan Panigoran	Cultivation of Oil Plantation	100	Jakarta	8,289
PT. Sangatta Andalan Utama	Cultivation of Oil Plantation	100	Samarinda	--
PT. Satya Kisma Usaha	Cultivation of Oil Plantation and Operation of mill	100	Jakarta	401,608
PT Rama Flora Sejahtera	Cultivation of Oil Plantation	100	Pekanbaru	26
PT. Tapian Nadengan	Cultivation of Oil Plantation and Operation of mill	100	Jakarta	2,763,109
PT. Alam Sumber Rahmat	Cultivation of Oil Plantation	90	Batam	298
PT. Pelangi Sungai Siak	Cultivation of Oil Plantation	85	Jakarta	460
PT. Pratama Ronaperintis	Investment Holding	70	Jakarta	686
PT. Langgeng Subur	Cultivation of Ornamental Plants	100	Jakarta	1,356
PT. Nabati Energi Mas	Organic Chemical Industry	100	Jakarta	808
PT. Propetindo Prima	Transportation Company	100	Kota Baru	222,869
PT. Soci Mas	Oleo Chemical Industries	99	Mdan	1,492,129

Besides, P.T. SMART Tbk., has ownership interest of less than 50% in the following associates which are engaged in production and sales of sees, aerial fertilizing, transportation and trading of bottled drinking water. The table of P.T. SMART Tbk’s associated companies shall be as follows:

Company	Domicile	Principal Activities	Year of Incorporation	PT. SMART’s Shares (%)
PT. Hortimart Agrogemilang	Malang	Production and sale of seeds	1990	39.10
PT. Sianr Mas Super Air	Jakarta	Aerial fertilizing	1997	35.00
PT. Trans Indojya Mas	Jakarta	Transportation	1988	34.62
PT. Universal transindo Mas	Jakarta	Transportation	2003	34.62
PT. Super Wahana Tehno	Jakarta	Trading of bottled drinking water	2006	50.00

During the first semester of 2014, FFB production grew by a healthy 9% to 1.53 million tons compared to the corresponding period last year, followed by an increase in CPO and PK production to 376,097 tons and 89,555 tons, respectively. Oil extraction rate and kernel extraction rate stood at 22.85% and 5.44%, respectively.

Description	YTD June 2013	YTD June 2014	Growth
FFB produced – tons	1,402,314	1,525,182	8.8%
CPO produced – tons	345,887	376,097	8.7%
PK produced – tons	80,190	89,555	11.7%
Oil extraction rate - %	22.88	22.85	-0.03%
Kernel extraction rate - %	5.30	5.44	0.14%

According to financial statement that sales turnover of P.T. SMART Tbk in 2011 amounted at Rp. 31,676 billion with a net profit of Rp. 1,786 billion declined to Rp. 27,562 billion with a net profit of Rp. 2,152 billion in 2012 and dropped again to Rp. 23,935 billion with a net profit of Rp. 893 billion in 2013. Up to present, we have yet to gain the statement of income of P.T. SMART Tbk., in fiscal 2014. However, we estimated that as per 30 June 2014, its sales turnover was Rp. 17,430 billion with a net profit of Rp. 650 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 company usually pays its debts punctually to suppliers. The financial highlight of the company as of 31 December 2010, 2011, 2012 and 2013 (expressed in billion IDR) are below:

DESCRIPTION	2013	2012	2011	2010
STATEMENTS OF INCOME (Rp billion)
Net Sales	23,935	27,562	31,676	20,265
Gross Profit	4,121	6,525	7,522	3,137
Earnings before interest, taxes, and depreciation	2,395	3,651	2,963	2,151
Net Profit	893	2,152	1,786	1,261
BALANCE SHEETS (Rp billion)
Total assets	18,381	16,247	14,722	12,476
Total liabilities	11,896	7,308	7,386	6,500
Equity attributable to owners of the Company	6,479	8,934	7,331	5,830

The management is led by Mr. Jo Daud Dharsono (58), he was appointed as the president director of the Company on 15 May 2008. He graduated rom the Economic Faculty of Trisakti University Jakarta, majoring in Accounting, in 1984. In daily activities he is assisted by two vice president directors namely Mr. Budi Wijana (56) and Mr. Edy Saputra Suradja (54), and three directors namely Mr. Ir. Lukmono Sutarto (61), DR. Ing. Gianto Widjaja (63) and Mr. Jimmy Pramono (61). But, we believe that the prime mover of the company is Dr. Eka Tjipta Widjaja AKA Oei Ek Tjhong (89) who is also prime mover of the SINAR MAS Group and his sons namely Mr. Franky Oesman Widjaja (56), and Mr. Muktar Widjaja (60). The management is well-experienced and run by professional manager in oil palm plantation and processing and cooking oil trading and other edible oil distribution. They have wide relations with home and overseas private businessmen as well as with high-ranking government officials. So far, we did not hear that the management of the company having been filed to the court for detrimental cases or involved in business malpractices.

We appraise P.T. SMART Tbk to be quite good for business transactions. But in view of the country's unstable economic condition, we recommend to treat prudently in extending a new loan to the company.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.61.75
UK Pound	1	Rs.100.07
Euro	1	Rs.77.95

INFORMATION DETAILS

Analysis Done by :	DIV

Report Prepared by :	SMN

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