CR PT Samudera Mulia Abadi

26/4/2016

PT XXXX Page 1 of 12 No. 006/CORFIN-MND/IV/2016

CREDIT REVIEW

Borrower : “XXXXXX”

Affiliated to: -

Economy Sector Description : Mining

Industry Group : Gold

Industry Description : Kontraktor Utama

Oustanding Exposure : IDR 1,000,000,000,00,-

Proposed Amount : IDR 6,896,000,000,00,-

Total Exposure : IDR 7,896,000,000,00,-

Summary of Credit:

A lease application using Direct Finance facilities.

Structure I :

Direct Finance on – 2 Units of Komatsu Motor Grader GD7005-5 Brand New. The

details are : (i) Total Acqusition Cost, IDR 7,700,000,000,00 (Incl VAT),-; (ii) Total

Financed Amount, IDR 6,160,000,000,00,- (80%), (iii) interest rate will be postulate on

15.85% p.a effective rate, in Advance, fixed. (iv) lenght of installment is 24 Months; (v)

and installment will be valued at IDR 297,246,000,00,-.

Structure II :

Direct Finance on – 1 Unit of Volvo Vibratory Soil Compactor SD110 (New). The details

are : (i) Total Acquisition Cost, IDR 920,000,000,00,- (Incl VAT); (ii) Total Finance

Amount, IDR 736,000,000,00,- (80%); (iii) interest rate will be postulate on 16% pa

effective rate, in Advance, Fixed. (iv) lenght of installment is 24 months; (v) and

installment will be valued at IDR 35,563,000,00,-

Risk Concern :

Customer :

Refers to establishment of XXX (hereinafter referred to “XXX”), presently has running

gold mining project in providing service of loading and hauling. Having much

redemption with J-Resources, XXX and PT Meares Soputan Mining (hereinafter referred

to “XXX”), both parties have agreed that the project will announce

Name % Stock Sheet Amount

Mr. Welly Leiden Mangarek 52.0% 1,040 1,040,000,000

Mr. Wilson Nicolas S 48.0% 960 960,000,000 Figure 1 According to Drs. ArieXXXn Auly Independent Auditor Report for Financial Report 2015

Line of Business :

Toka Tindung Gold Mine

Situated about 35 kilometers northeast of Manado

on the island of Sulawesi, the gold mine has one

pit to the north of the site and four XXXller pits

to the south. Toka Tindung has a current total of

1.75 million ounces of gold, of which 1.1 million

Figure 2 Toka Tindung Gold Mine

26/4/2016


ounces will be mined. Lessee’s work includes loading and hauling ore from the pits to the

processing plant for treatment and stockpiling waste material in neraby individual dumps

and disposal areas. XXX also clearing and preparing the ground for construction bases

and mining locations and building anything related about mining operational as stated in

letter of intent between both parties.

Collateral: Loan-to-value ratio of this leased object valued at 80% while CCR is around 1.25x.

Cummins has a medium marketability due to brand and type. And the total exposure of

lessee is rapidly increase up to 589.60% while the installment rating is up into 579.63%.

total exposure of this request is valued at IDR 7,896,000,000 while the installment is

adding up to IDR 381,778,000,00,-

Purpose :

The purpose of this request is to acquittance and purchase of the machine and will be

directly used to lessee’s operational business.

Risk Mitigations :

These points are mitigating the credit risk :

Bussiness-Cycle in a Nutshell

Figure 3 Map of XXX Toka Tindung Gold Mining Project (Source : Archi Indonesia)

The Toka Tindung Project is located on the northern tip of the island of Sulawesi,

Indonesia, approximately 35 km northeast of the regional capital of Manado. The Project

is bordered by the Malucca and Celebes seas. The Toka Tindung operation has favorable

cost structure due to its geological, mining and processing factors, competitive input

costs, skilled Indonesian workforce, and silver credit byproduct. We are planning to

increase throughput capacity of Toka Tindung Project through continuous optimization

programs. There are several optimization programs currently under consideration such as

processing alternative material with lower grade, which can be done by Crusher Fine

Screen method and plant expansion. Processing plant at Toka Tindung started its

operation since April 2011 with installed capacity of 1.7 Mtpa. Through running

Month Product Customer Exposure % Up Installment % Up

Mar 2016 Finance Lease PT SMA 1,000,000,000.00 48,969,000.00

Apr 2016 Finance Lease PT SMA 6,896,000,000.00 589.60% 332,809,000.00 579.63%

This Request

26/4/2016


optimization initiative, the plant now operates with 2.0 Mtpa capacity. For maintaining

growth, the management is studying several different scenarios with objective to increase

the gold production by 10-20k oz annually and to accelerate processing plan of 14 mt of

lower grade ore. Archi plans to increase Toka Tindung Project gold production to reach

180-200k oz per annum in 2016 and achieve improvement in economies of scale. XXX

entered into a Contract of Work (CoW) with the Indonesian Government on 2 December

1986 for the general survey, exploration, feasibility study, construction and operation in

areas within the concession area. The work area covers approximately 8,969 hectares.

With commercial production commenced in 2011, XXX’s CoW term is for 20 years and

is valid until 5 March 2031.

Business Condition(s) :

As the contract between PT

Meares Soputan Mining and

XXX setting out the terms

and conditions for the

provision of Load and Haul

mining services, both parties

agree that the agreement is

necessary to cover

commercial, operational,

technical terms of the

services rendered to the

copany for the project

planning, mobilisation,

procurement and

commencement of site

survey and supervision

activities prior to the

contract being executed. As

the lessee work as

contractor, they should’ve

been warned about the gold reserves and the gold price as they will be paid by the selling

process by the way. The picture in the left side mention that the global price and changing

rate is slightly change due to international volatility. In the last two months were noted as

the highest price compare to last six months global price review. Lately, few term and

conditions might be affected the company operational as we sourced up from few trusted

source :

- The EIA (Environmental Impact Assessment) which constantly make several damage

around the mining site. Mining tailings will potentially contaminate the environment

and negatively effect people’s health. The conversion of agricultural and forest land

+/- 8000 hectares for XXX, is really losses for agricultural and the forest sectors,

especially on the background of climate change;

- XXX has also taken an aggressive approach to procuring the land it needs for the

mine site and associated infrastructure. In June 2006, the company reported that "all

land purchases necessary to commence production have been completed ahead of

schedule". Not all the landowners were prepared to give up without a struggle: NGOs

-8.00%

-6.00%

-4.00%

-2.00%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

950.00

1,000.00

1,050.00

1,100.00

1,150.00

1,200.00

1,250.00

1,300.00

Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16

26/4/2016


report there are currently at least five land dispute cases between local people and

XXX

Customer :

Lessee is a regular player in its field. Previously, they have running some projects along

with J Resources. Since they get some offers from specific party, they already granted

long-term contract with XXX to load and hauling of gold mining site in North Sulawesi.

They also have a relationship with any other financial company such as SAN Finance and

Buana Finance and knowing that they have been amounted by Bank Mandiri lately.

Facility O/S Principal Installment Paid of inst Max.OVD Freq. Status

DF 1,081,078,461.00 107,262,598.00 14x 51 days 6x Live/Not good

DF 497,038,018.00 61,504,000.00 16x 33 days 10x Live/ Not good

DF 107,262,598.00 61,504,000.00 16x 0 0 Live

SLB 6,973,031,346.00 302,822,000.00 0x 0 0 Live

Total 8,658,410,423.00 533,092,598.00

PT. Samudera Mulia Abadi

In the beginning of 2016, lessee has granted refinancing facility from Buana

Finance with huge number compare to any other request for several finance

company. The request is valued at IDR 7 Billion and installment around IDR 300

million for 12 units truck and 2 units heavy equipment;

As we checked up through various channel, the repayment of lessee in such

finance company are merely not good; Total installment in Buana Finance IDR 533.092.598,-. Total Outstanding

Principal IDR 8.6 billion;

In SANF lessee has 2 mature contracts in October 2015 for Komatsu D85

Bulldozer and Vibratory roller BW211. Payment record is not good. Max OVD

43 days. Overdue happened every month until mature in October 2015. for

any consideration, lessee’s asset in SANF are still in charge for fully paid of

late charge.

Collateral :

The asset(s) proposed will be usage in Toka Tindung, Manado, North Sulawesi in one of

the gold mining site. The loan-to-value of lease proposed is 80% according to acquisition

cost in offering letter. But, due to checking market value used comparison test we

checked up from various dealers with various province and CCR is about 1.25x.

Capital : The lessee had manages 96.55% of owned

asset and the under lease valued at 3.45%.

They initially took higher procentage of leased

asset composition related on this request. In

program that use sales and lease back facilities,

lessee normally must provide collateral as a

means of guaranteeing their loan rather than

group solidarity guarantees. Recommended

collateral value is 75% of the value of the loan,

with a minimum level of equivalent to at least

65% of the loan.

Here is the detail of asset composition

manages by lessee with the following items :

0

10

20

30

40

50

60

Leased Owned

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

Number of

Unit

Percentage

26/4/2016


As stated in the list asset composition, actually for doing few projects lessee are quite

strong enough. With a number of lessee’s total asset, practically it will helps lessee’s

productivity in mining site and expected reaching loading and hauling targets. But, more

than 70% are still under lease, and half of the huge number are Articulated Dump Truck

(ADT) Volvo which classified as under leased in Bank Mandiri. And the total installment

of lessee also is very imppresive, yet it might be the highest exposure and highest

obligation that lessee must covering up.

Project Details PT XXX was a company

established on June 25th,

2007 in field of general

trading and mining

contractor. Since economic

downturn and slower

international demand in

coal, the development and

level of Indonesian

economic becoming much

better continously. This

economic condition has

caused the positive impact

to the increasing of

infrastructure in Indonesia. Along with XXX, lessee has granted to hauling and loading

the outcome of gold mining in Toka Tindung site. The term of contract is reviewed by the

future date according to agreement from both parties.

Schedule Rates - Mining

Description UoM Rate-

IDR/UoM

Qty (BCM) Item in Total IDR

Exacavate, Load Haul

(<1500m) and dump blasted

ore from Toka pit to

stockpiles

Bcm 37.229

4.249.652 158.210.296.039

Leased Owned

1 JCB Ligting Tower 10 Units 10 0 MPM Finance 48,969,000.00 1/24 0 Days

2 Excavator Hitachi ZX200 2008 1 Unit 0 1 - - - Null

3 Excavator Komatsu PC200 2010 1 Unit 0 1 - - - Null

4 Excavator Hitachi ZX200 2011 2 Units 0 2 - - - Null

5 Excavator Hitachi ZX200 2012 2 Units 0 2 - - - Null

6 Dozer John Deere 2012 1 Unit 0 1 - - - Null

7 Excavator Komatsu PC300-8 2013 1 Unit 0 1 - - - Null

8 Dozer Caterpillar D6R-XL 2013 1 Unit 0 1 - - - Null

9 Motor Grader Caterpillar 120K 2013 1 Unit 0 1 - - - Null

10 Compactor Bomag 10T 2013 3 Units 0 3 - - - Null

11 Excavator Hitachi ZX 200 2014 6 Units 0 6 - - - Null

12 Excavator Hitachi Long Arm 2014 1 Unit 0 1 - - - Null

13 Excavator Volvo EX210 B 2015 1 Unit 1 0 Buana Finance 131,138,031.00 15/24 Null

14 Compactor Volvo SD110B 2015 1 Unit 1 0 Buana Finance 54,467,000.00 7/24 Null

15 ADT Volvo 2015 35 Units 35 0 Bank Mandiri 6,000,000,000.00 1/36 Null

1 Motor Grader Komatsu GD7005-5 2 Units 2 0 MPM Finance 297,246,000.00 0/36 Null

2 Volvo Vibratory Soil Compactor SD110 1 Unit 1 0 MPM Finance 35,563,000.00 0/36 Null

50 20

71.43% 28.57%

RemarkInstallmentNo Asset Description Finance CompanyQtyStatus

Posisi Tenor

Heavy Equipment

This Request

Grand Total 70 Units

26/4/2016





stockpiles

Bcm 37.366 10.095.521 377.227.952.595



ore from Southern pits to

stockpiles

Bcm 36.271 1.911.779 69.341.960.875



ore from Souther pits to

waste rock storage areas

Bcm 36.271 19.081.256 692.094.328.800

Total 147,137 35,338,208 1,296,874,538,309

Bill of Quantities – Over Haul

Description UoM Rate-

IDR/UoM

Qty (BCM) Item in Total

IDR

Exacavate, Loadm Haul



stockpiles

bcm 8,212

4.249.652 12.077.418.621




stockpiles

Bcm 8,212 10.095.521 125.112.874.666



ore from Southern pits to

stockpiles

Bcm 8,212 1.911.779 5.187.208.819



ore from Souther pits to

waste rock storage areas

Bcm 8,212 19.081.256 230.484.468.893

Total 32,848 35,338,208 372,861,970,999

Bill of Quantities – Lump Sums

Description Qty Item in Total IDR

Mobilisation 1 20.530.698.529

Demobilisation and

disestablishment

1 6.843.566.176

Total 2 27,374,264,705

**there is no proof and evidence of lessee’s production capacity due to lessee are willing to keep

it intentionally left blank**

26/4/2016


Financial Highlight :

Trend Analysis of Financial Report

Concern :

Breaking Down Lessee’s Financial Report

a. Given that the debt/equity ratio measures a company’s debt relative to the total value of

its stock, it is most often used to gauge the extent to which a company is taking on debts

as a means of leveraging (attempting to increase its value by using borrowed money to

fund various projects). A high debt/equity ratio generally means that a company has been

aggressive in financing its growth with debt. Aggressive leveraging practices are often

associated with high levels of risk. This may result in volatile earnings as a result of the

additional interest expense.

b. Another important point to consider when assessing D/E ratios is that the “Total

Liabilities” portion of the formula may often be determined in a variety of ways by

lessee. In some cases, companies will only incorporate debts (like loans and debt

securities) into the liabilities portion of the formula, while omitting other kinds of

liabilities (unearned revenue, etc.). In other cases, companies may calculate D/E in an

even more specific way, including only long-term debts and excluding short-term

debts and other liabilities.

c. Review of Financial Ratio

0.00%

50.00%

100.00%

150.00%

200.00%

250.00%

300.00%

2015 2014 2013

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

Current Ratio

Cash Ratio

Quick Ratio

Debt/Asset Ratio

Equity/Asset Ratio

Debt/Equity Ratio

ROA

ROE

GPM

NPM

Figure 4 According to Financial Report : Lessee's financial health is remain downturn for the

annual report in 2015

http://www.investopedia.com/terms/s/stock.asp

http://www.investopedia.com/terms/r/risk.asp

http://www.investopedia.com/terms/i/interest.asp

http://www.investopedia.com/terms/d/debtsecurity.asp

http://www.investopedia.com/terms/d/debtsecurity.asp

http://www.investopedia.com/terms/u/unearnedrevenue.asp

http://www.investopedia.com/terms/l/longtermdebt.asp

http://www.investopedia.com/terms/s/shorttermdebt.asp

http://www.investopedia.com/terms/s/shorttermdebt.asp

26/4/2016


Liquidity

Current Ratio Total Asset Lancar 4,513,004,979.00 14,105,629,531.68 9,276,347,164.64

Kewajiban Lancar 4,029,109,351.00 112.01% 5,387,848,785.36 261.80% 4,538,262,364.17 204.40%

Working CapitalTotal Asset Lancar 4,513,004,979.00 14,105,629,531.68 9,276,347,164.64

- Kewajiban Lancar 4,029,109,351.00 483,895,628.00 5,387,848,785.36 8,717,780,746.32 4,538,262,364.17 4,738,084,800.47

Cash RatioKas + Efek 2,263,933,657.00 56.19% 848,923,109.87 15.76% 674,920,000.34 14.87%

Kewajiban Lancar 4,029,109,351.00 5,387,848,785.36 4,538,262,364.17

Quick RatioKas + Efek + Piutang 6,513,004,979.00 161.65% 13,001,311,593.17 241.31% 9,776,347,164.64 215.42%

Kewajiban Lancar 4,029,109,351.00 5,387,848,785.36 4,538,262,364.17

Solvency

Debt/Asset RatioTotal Kewajiban 4,029,109,351.00 11.91% 14,259,104,389.19 34.97% 18,336,263,053.00 48.99%

Total Asset 33,817,600,732.00 40,779,718,854.86 37,432,026,339.62

Equity/Asset RatioEkuiti 27,788,491,381.00 26,520,614,465.66 65.03% 19,095,763,286.62 51.01%

Total Asset 33,817,600,732.00 82.17% 40,779,718,854.86 37,432,026,339.62

Debt/Equity RatioTotal Kewajiban 4,029,109,351.00 13.53% 14,259,104,389.19 53.77% 18,336,263,053.00 48.99%

Ekuiti 29,788,491,381.00 26,520,614,465.66 37,432,026,339.62

Profitability

Return on Asset

Total Asset 33,817,600,732.00 40,779,718,854.86 37,432,026,339.62

Laba Sebelum Pajak 1,767,876,915.00 9,663,325,458.36 7,948,040,351.62

Pajak Penghasilan 0.00 2,238,474,279.19 1,732,170,768.00

Laba Setelah Pajak 1,767,876,915.00 7,424,851,179.17 6,215,869,583.62

ROA 5.23% 18.21% 16.61%

Return on Equity

Laba Setelah Pajak 1,767,876,915.00 7,424,851,179.17 6,215,869,583.62

Total Ekuiti 26,520,614,466.00 500,000,000.00 19,095,763,286.62

ROE 6.67% 1484.97% 32.55%

Gross Profit Margin

Penjualan/Pendapatan 23,612,893,529.00 32,691,083,425.91 30,164,690,311.90

Beban Operasional 21,845,016,613.00 23,027,757,967.55 22,216,649,960.28

Laba Kotor/Penjualan 1,767,876,915.00 9,663,325,458.36 7,948,040,351.62

GPM 7.49% 29.56% 26.35%

Net Profit MarginLaba Setelah Pajak (EAT) 1,767,876,915.00 7,424,851,179.17 6,215,869,583.62

Penjualan/Pendapatan 23,612,893,529.00 32,691,083,425.91 30,164,690,311.90

NPM 7.49% 22.71% 20.61%

2015 2014 2013

2015 2014 2013

2015 2014 2013

d. Detailed Ratio Analysis

Liquidity ratios measure a company’s ability

to meet its maturing short-term obligations.

In other words, can a company quickly

convert its assets to cash without a loss in

value if necessary to meet its short-term

obligations? Favorable liquidity ratios are

critical to a company and its creditors within

a business or industry that does not provide

a steady and predictable cash flow. They are

also a key predictor of a company’s ability to

make timely payments to creditors and to

continue to meet obligations to lenders when

faced with an unforeseen event.

Benchmarking 2015 2014 2013

Current Ratio 112.01% 261.80% 204.40%

Cash Ratio 56.19% 15.76% 14.87%

Quick Ratio 161.65% 241.31% 215.42%

Debt/Asset Ratio 11.91% 34.97% 48.99%

Equity/Asset Ratio 82.17% 65.03% 51.01%

Debt/Equity Ratio 13.53% 53.77% 48.99%

ROA 5.23% 18.21% 16.61%

ROE 6.67% 28.00% 32.55%

GPM 7.49% 29.56% 26.35%

NPM 7.49% 22.71% 20.61%

Figure 5 Benchmarking of Three-Year Comparison of XXX Financial Report (Audited)

26/4/2016


Current Ratio. a higher number is

preferred because it indicates a strong

ability to service short term obligation. The

composition of current assets is a key

factor in the evaluation of this ratio.

Depending on the type of business or

industry, current assets may include slow-

moving inventories that could potentially

affect analysis of a company’s liquidity

how long could it potentially take to

convert raw materials and inventory into

finished products.

Figure 6 The current ratio for XXX is 112.01% which compared to the baseline of 204.40% indicates the company’s ability to service short-term obligations is satisfactory.

Quick Ratio. This ratio, also known as the

acid test ratio, measures immediate

liquidity – the number of times cash,

accounts receivables, and marketable

securities cover short-term obligations. A

higher number is preferred because it

suggests a company has a strong ability to

service short-term obligations. This ratio is

a more reliable variation of the current ratio

because inventory, prepaid expenses and

other less liquid current assets are removed

from the calculations.

Figure 7 the quick ratio for XXX is 1.61 which compared to the baseline 2.15 indicates the company's ability to service short-term obligations is strong. but, the lowered number previous annual-measurement must be Watchlist

Return on Equity (ROE). this ratio

expresses the rate of return on equity

capital employed and measures the ability

of a company’s management to realize an

adequate return on the capital invested by

the owners in a company. A higher number

is preferred for this commonly analyzed

ratio.

Figure 8 the percent raye of ROE for XXX is 6.67%, which compared to the baseline of 32.55% indicates management may not be effectively managing the profits earned based on the owners investment in the company

Three-Year Comparison

0.00%

50.00%

100.00%

150.00%

200.00%

250.00%

300.00%2015

20142013

Current Ratio

Three-Year of Comparison on Debt Equity Ratio

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

2015

20142013

ROE

Three-Year Comparison

0.00%

50.00%

100.00%

150.00%

200.00%

250.00%

2015

20142013

Quick Ratio

26/4/2016


Return on Assets (ROA). This ratio

measures how effectively a company’s assets

are being used to generate profits. It is one of

the most important ratios when evaluating

the success of a business. A higher number

reflects a well managed company with a

healthy return on assets. Heavily depreciated

assets, a large number of intangible assets, or

any unusual income or expenses can easily

distort this calculation.

Figure 9 The percent raye of ROA for XXX is 5.23% which compared to the baseline of 16.61% indicate that there is a need for improvement in this area to ensure the company can remain competitive and continue to operate successfully

Debt to Total Assets. This ratio measures

what proportion of debt a company is

carrying relative to its assets. A ratio value

greater than one indicates a company has

more debt than assets. Naturally, companies

and creditors prefer a lower number.

Figure 10 The debt total assets for XXX is 11.91%, which compared to the baseline of 48.99% indicates the company should be able to withstand losses without harming creditor interests or could obtain additional financing if desired.

Debt to Equity. This measures the financial

leverage of a company by indicating what

proportion of debt and equity a company is

using to finance its assets. A lower number

suggests there is both a lower risk involved

for creditors and strong, long-term, financial

security for a company.

Figure 11 The debt to equity ratio for XXX is 13.53%, which compared to the baseline of 48.99% indicates a solid performance in this area for the company. But, regularly slowdown due to lower assets owned by the company.


0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

2015

20142013

Debt/Equity Ratio


0.00%

5.00%

10.00%

15.00%

20.00%

2015

20142013

ROA


0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

2015

20142013

Debt/Asset Ratio

26/4/2016


Cashflow:

Real average monthly incoming balance, based on BCA bank account statement is IDR

8,086,836,329.29,- (on January till March 2016).

Monthly obligation to this lessee at around IDR 6,567,383,031 ,- (include this request).

Based on income from bank account lessee has very limited cash flow. This bank

account not reflective all of lessee’s revenue.

DSR of this request based on bank account is around 0.98xx

Recommendations :

Fully addressing the challenges of identified above will require broad recommendation.

Based on the analysis of this brief, risks not recommended with the following reasons :

- Total Exposure of this request is valued at IDR 7,896,000,000,00,- (highest

exposure) with bigger obligation compare to previous request.

- Having such late payment of receivable of in J-Resources Bolaang Mongondow

and Sago Prima Pratama;

- DSR of this request is valued at 0.99xx

Review,

XXXXXXXXXX XXXXXXXXXX

MSHE Credit Analyst MSHE Credit Manager

Approved Declined

XXXXXXXXX

Director Corfin

Jan-16 10,050,000,000.00 16,056,342,027.43

Feb-16 8,664,000,000.00 16,024,287,485.93

Mar-16 5,546,508,987.88 7,122,522,797.23

Total 24,260,508,987.88 39,203,152,310.59

Average monthly 8,086,836,329.29 13,067,717,436.86

Period Credit Closing Balance

26/4/2016


Documents

CR PT Samudera Mulia Abadi