coonn tteenntss - asia pacific fibers · coonn tteenntss company description 3 financial highlights...
TRANSCRIPT
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Company Description 3
Financial Highlights 4
Message from the President Commissioner 5
Message to Shareholders 7
Management of the Company 11
Management Report 14
Management Discussion and Analysis 20
Corporate Governance 22
Corporate Information 24
Independent Auditor Report 30
2 Annual Report 2011
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3 Annual Report 2011
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PT Asia Pacific Fibers Tbk (formerly PT Polysindo Eka Perkasa Tbk), established in 1984, is a leading polyester manufacturer in Indonesia. Its manufacturing operations span the entire polyester production chain, from raw-materials to end products, ensuring quality and consistency. PT Asia Pacific Fibers is the only integrated producer of polyester in Indonesia. The manufacturing facility for PTA, continuous polymer, and staple fiber is located in Karawang, West Jawa. Filament yarn, produced at the largest yarn facility in Indonesia, is located in Semarang, Central Jawa. PT Texmaco Jaya (a subsidiary) has been declared bankcrupt in August 2011.
PT Asia Pacific Fibers’ current products include Purified Terephthalic Acid (PTA), polyester chips, polyester staple fiber, polyester filament yarn, and performance fabrics. The Company´s products are marketed and sold both in domestic and international markets. The following is the report on the business performance of PT Asia Pacific Fibers Tbk in 2010. The term “Company” used throughout the report refers to PT Asia Pacific Fibers Tbk and all its subsidiaries. The term “APF” refers to PT Asia Pacific Fibers Tbk as a stand-alone entity, while the term “Texmaco Jaya” refers exclusively to PT Texmaco Jaya Tbk.
4 Annual Report 2011
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The following table sets forth the financial highlights of the Company for the years ended 31st December 2006 to 2011.
The Company’s current auditors are Drs. Hendrawinata Eddy & Siddhartha (Indonesian Member firm of Kreston International).
(in million Rupiah)
31st
December
2011 2010 2009 2008 (2)
2007 2006
Current Assets
Fixed Assets-Net
Total Assets
Liabilities
Equity
Net Sales
Gross Profit
Operating Profit
Net Income
Net Working Capital (1)
Profit per Share-Net Rp
Gross Profit Margin %
Net Profit Margin %
Return on Investment %
Return on Equity %
Current Ratio
Debt to Total Assets
Debt to Equity
2,100,374
1,225,118
3,683,206
11,025,252
(7,342,047)
5,577,223
390,554
105,129
610,313
(8,485,801)
257
0.07
0.11
16.6
NA
0.2
2.99
(1.50)
2,124,483
1,815,536
3,988,442
11,900,692
(7,912,251)
4,455,449
331,393
14,196
334,977
(9,096,346)
141
0.7
0.8
8.4
NA
0.2
2.98
(1.50)
1,423,994
2,290,009
4,569,624
12,449,681
(7,880,058)
3,511,507
(43,902)
(314,297)
1,182,788
(10,226,269)
(498)
(1.3)
33.7
25.9
NA
0.1
2.72
(1.58)
1,235,848
2,802,157
4,912,990
13,979,999
(9,067,010)
3,740,569
(217,811)
(518,217)
(2,120,676)
(11,798,530)
(245)
(5,8)
(56,7)
(43.1)
NA
0.1
2.85
(1.54)
1,428,603
3,314,897
5,448,182
12,390,402
(6,942,220)
3,639,104
(140,260)
(430,141)
(892,609)
(10,156,076)
(19)
(3,8)
(24.4)
(14,5)
NA
0.1
2.30
(1,81)
1,298,542
3,865,702
5,848,629
11,897,173
(6,048,543)
3,060,830
(439,075)
(666,126)
(25,430)
(9,771,645)
(1)
(14.0)
(1.0)
(0.4)
NA
0.1
2.03
(2.0)
Notes: (1)
Current Assets minus Current Liabilities (2)
As Restated
5 Annual Report 2011
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Dear Esteemed Shareholders, Despite several challenges faced, Asia Pacific Fibers Tbk (APF) was able to sustain a consistently strong performance in 2011 with an EBITDA of $77.7 million on sales of $635 million, driven by robust market conditions for Polyester primarily influenced by the unprecedented peaks in the cotton trade leading to sharp rise in PTA and polyester prices. However the prices have softened in the second semester and settled down to normal levels by end of the year. The Company was able to maintain high operating rates to the near full capacity of both its plants through the year supported by enhanced working capital assistance from our majority creditors/shareholders. The Company continued to maintain its market leadership positions in domestic market for its products PSF and PFY and play a crucial role in providing essential raw material to the downstream Textiles and Clothing sector in Indonesia. Although the Company could not find a restructuring solution to its secured debts yet, notable progress is made during the year by engaging in continuous dialogue with most of its secured creditors and proposed alternate restructuring options for their consideration. The Company is closely working on this and is hopeful of reaching a restructuring solution to its secured debt during the current year and may be able to implement its growth plans.
Indonesian economy grew last year at its fastest pace since 1997-98 Asian crises, with the country’s vast domestic market helping to shield it from the global economic turmoil battering its more export-oriented neighbors. GDP expanded 6.50% in 2011, affirming Indonesia’s position as one of Asia’s fastest growing economies and highlighting its appeal to Investors. Foreign direct investments in Indonesia grew by 20% to a record $20 billion last year as Companies invested in areas such as coal mines and automotive plants to tap the country’s vast natural resources and 240 million-strong consumer market. FDI is likely to remain robust over the medium term after Moody’s Investors Service and Fitch Ratings recently upgraded Indonesia’s credit rating to investment grade. Indonesia’s stable growth Exports hit a record of $203.6 billion with the textiles sector accounted for $13.67 billion (8.20% of total exports). Indonesia’s stable growth also stands out in comparison to more volatile and disappointing results from export-dependent neighbors such as the Philippines and Singapore, highlighting the resilience of its domestic market. With the inflation under check, the domestic consumption is expected to get a boost supported by stable exchange rate and improving employment rates.
6 Annual Report 2011
In the absence of any solution to its secured debt restructuring, the Company is still constrained to access the financial markets to raise resources to meet it is long term and short term funding. Despite these constraints, the Company embarked on certain strategic Capex investments with a financial assistance from its majority creditors/shareholders, to expand its fiber capacity and to diversify into specialty and value added products catering to niche markets. We are pleased to state that the fiber expansion project of 54,000MT per annum is already on stream by end of 1st quarter 2012 and also installed a 100% waste recycling facility at Karawang Poly plant in line with its commitment towards environmental conservation and sustainability. Mr. Antonitris had resigned from Board of Commissioners of the Company and his resignation will be placed in the ensuing Annual General Meeting of the shareholders for approval. The Board of Commissioners wishes to place on record its appreciation of his service and contribution to the Company during his tenure. The Commissioners wish to extend their appreciation to the Directors and all APF employees for their continued efforts and dedication throughout 2011 which can be deemed a year where the company continued to seek restructuring solutions whilst strengthening its strategic market position. The Company continued to improve its corporate governance standards and complied with the various regulations and requirements by BAPEPAM and IDX. We also wish to acknowledge our sincere gratitude to our customers, suppliers, and shareholders for their continued support and the confidence they have entrusted to the Company in this critical transition period.
Robert Clive Appleby President Commissioner
7 Annual Report 2011
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Dear Shareholders: Indonesia’s GDP growth has been remarkably stable and robust affirming its position as one of Asia’s fastest growing economies and will remain as a beacon of growth in a world where growth is scarce. In the midst of sluggish economic recovery in the developing countries and the European debt crisis, Indonesia was able demonstrate its economic robustness by achieving a GDP growth of 6.5% in 2011, surpassing the growth of 6.1% registered in 2010. Corresponding to the increased investment, manufacturing industry grew by 6.1% (YoY), offsetting the growth in the extractive sectors such as mining. The expansion of manufacturing industry has boosted the employment potential in organized sector and consequently, unemployment rate fell to 6.6% in 2011 as compared to 7.7% in 2010. The non-oil sector grew at 6.9%. Per capita GDP grew 13.8%, from Rp 27.1 million (US$3,010.1) to Rp 30.8 million (US$3,542.9). On the other hand the CPI inflation rate for 2011 remained under control at 3.79%. In the midst of sluggish economic and trade conditions and the commodity price corrections in the global market, Indonesia’s export performance remained solid. Export grew by 29% during 2011. Total exports in 2011 increased to US$203.6 billion, compared to US$157.78 billion in 2010. Export of oil and gas also increased by 48.34% over 2010 to US$41.59 billion, mainly due to increase in international prices of crude oil. The Imports continued to rise rapidly (30.7% in 2001) as a consequence of accelerated economic activity. It still remains within a relatively safe and healthy limit as it is more associated with the imported raw materials and capital goods to spur increased production capacity. Amid uncertainty over resolution of the debt crisis in Europe and the economic slowdown in the United States with their spillover effects on some of major emerging markets, Indonesia's balance of payments maintained quite robust in 2011 with a US$11.9 billion surplus, even though down from the 2010 surplus of US$30.3 billion. Consequently, international reserves widened to US$110.1 billion at the end of 2011 from US$96.2 billion at the end of 2010, which was equivalent to 6.4 months of imports and servicing of official external debt. The quality of Capital inflow structure is significantly improving with the increased foreign direct investment (FDI) exceeded portfolio investments. FDI is likely remain robust over the medium term after Moody’s Investor Service and Fitch Ratings recently upgraded Indonesia’s credit rating to investment grade. Surplus balance of payments was also reflected by a relatively stable and less volatile rupiah. Bank Indonesia has reduced the BI rate to 6.0% from 6.5% during the year and further reduced by 25 basis point in March 2012.
8 Annual Report 2011
Polyester Industry: Global and Domestic Trends After a strong recovery in 2010, the Polyester industry continued to remain buoyant in the first half of 2011 triggered by the exceptional peaks in the cotton trade with the prices reached unprecedented levels. This was followed by a rapid normalization in the second half of the year throwing exciting challenges. The year 2011 was a strong year for polyester industry from a production stand point as well, with an overall polymer production reaching 56 million tons, an increase of 3.5 million tones or 6.8% over the previous year. Over the longer term global polyester polymer production is forecast to reach just below 100 million tons by 2020, implying a stable longer term growth rate of around 6%. Global polyester staple fiber production was estimated to be 14.5 million tons in 2011, as compared to 13.55 million tons in 2010, and filament yarn production was estimated to be 25.08 million tons, as compared to 23.16 million tons in 2010, registering a growth rate of 7% and 8.3% respectively. However, the growth projection of polyester fiber is estimated to be at 6-6.5% on a longer term backed by sustained domestic consumption growth in Asia and other emerging regions despite the negative impacts of the on-going financial crisis in western economies. Any longer term shortages of cotton would only add further upside to the projected growth. Domestic market continued to remain strong with the per capita consumption increased to 6.3 Kgs in 2011 from 5.70 Kgs in 2010. Domestic demand for both polyester staple fiber and filament yarn increased significantly (around 18%) in the year 2011. There was a shortage of fiber supply in domestic market which was met by increased volume of imports. Import of both fiber and yarn increased significantly to meet the higher demand in the domestic market. Supported by a strong and sustained economic growth of 6.5% in 2011 and the inflation under check, the consumer confidence level remain all time high boosting the domestic consumption. Textile exports from Indonesia increased in 2011 to US$13.67 billion as compared to US$11.51 billion in 2010. The increase was mainly due to price factor and there was drop in volume of exports by 5.4% in 2011. Whereas, import of textiles surged significantly to US$8.64 million in 2011 as compared to US$6.23 million in 2010, registering an increase of 38.7%. This was mainly due to 57% increase in fiber imports during the year. Polyester chain margins remained at high levels despite volatility in raw material price movements, during the first half of the year but have rapidly fallen to normal levels in the second semester with the softening of cotton prices. With the crude and naphtha prices continued to remain strong putting pressure on the margins on petro chemical value chain.
9 Annual Report 2011
Company Performance The Company sustained its high performance during the year 2011 despite challenges faced all through. The Company was able to deliver strong performance in terms of profitability, productivity, market share, and operational efficiencies. With the continued working capital support from its majority secured creditors, the Company was able to achieve sales of Rp 5,577 trillion (US$635 million) as compared to Rp 4,455 trillion (US$489 million) in 2010, registering a growth of 25%. The operating profit of the Company rose to Rp 105.13 billion in 2011 as compared to Rp 14.20 billion in 2010. The company posted an EBITDA of US$77.7 million for 2011 as compared to US$68.2 million for 2010 registering a growth of 14%. The improved profitability is mainly due to high PTA margin maintained during major part of the year coupled with the near full capacity utilization of both its plants. We are pleased to inform that the Company added some key specialty and value added products to its existing portfolio as a result of its capex investments during the past two years which has contributed to the improved performance during the year. The fiber expansion project at Karawang with a capacity of 54,000 MT per annum was completed in the first quarter of 2012 and is operational effective April 2012. In line with the Company’s commitment towards sustainability and environmental conservation, a 100% waste recycling facility was commissioned at Karawang Poly Plant which would enable the Company to produce “Green Label Products”. With the benefits of these capex projects effective 2012, the Company expects to gain significant contribution to its future earnings.
Outlook Amidst the global economic slowdown, the Indonesian economy is predicted to grow above 6.3% - 6.7% in 2012, or slightly lower than in 2011 due to sluggish growth in exports. Investment growth rate which reached 7.7% in 2011 is expected to grow even higher in 2012 at 9.7% - 10.1%. Vigorous investment will eventually enhance purchasing power thereby boosting household consumption growth. There also will be serious challenges confronting 2012 in terms of inadequate infrastructure and the need for improvement in the investment climate. The proposed hike in electricity rates and the expected increase in gas prices by PGN during the year 2012 will have a cascading effect on the production costs. The Company has, however, taken a series of cost-saving initiatives, especially in energy saving areas, to offset these cost increases. The Company will continue with its strategic capex investment proposals as planned earlier These projects are strategically important to strengthen its leadership position, to move from highly competitive basic products to value
10 Annual Report 2011
added/specialty products thereby gaining entry into high growth and niche segments such as automotive, hygiene and healthcare, technical textiles and non-woven. The Company proposes to approach its existing financial creditors, Banks and institutions for long term borrowings to meet its Capex investments. Although the Company could not reach a solution towards its secured debt restructuring during the year, a notable progress is made in terms of its continuous engagement in discussions with most of its secured creditors. The Company has presented alternate restructuring options to its secured creditors which are under active consideration. The Company is closely following up the matter and is hopeful of reaching a solution at the earliest possible time. This, in turn, will allow for a more conventional bank financing for its working capital needs and to raise finance from market at competitive rates to meet its short term and long term investments. All of these efforts will improve the performance of the Company significantly, and to reposition it to the forefront of the polyester industry worldwide. As a part of Company’s commitment to the Employees, the Company has implemented the ESOP programme in early 2012. We would like to take this opportunity to express our sincere gratitude to our Shareholders, Customers, Suppliers, Bankers, and Employees who continue to support the Company during this crucial stage of restructuring and re-emergence as a prominent leader in the manufacture of high quality polyester products.
V. Ravi Shankar President Director
11 Annual Report 2011
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Commissioners and Directors In accordance with its Articles of Association, APF is managed by a Board of Directors under the supervision of a Board of Commissioners. The members of the Board of Commissioners and the Board of Directors are chosen and appointed by the shareholders of APF at the Annual General Meeting. The Articles of Association permit the
President Director to act alone, or where the President Director is unable to act, any two directors to represent and act on behalf of the Board of Directors. The Current members of the Board of Commissioners of APF are as follows: Name Age Principal Occupation
Robert Clive Appleby 49 President Commissioner of APF since 2007.
Director and Chief Investment officer of Asia Debt Management Hongkong Limited (ADM). Prior to joining ADM, he was a Managing Director of the Asian Fixed Income Division at Credit Agricole Indosuez specializing in structured Asian Debt.
Antonitris 45 Commissioner of APF since September 2009.
He graduated from the Faculty of Economics,
University of Indonesia, and also obtained an MBA from Melbourne Business School, Australia. He is now working at Spinnaker Capital (Asia) Pte Ltd, Jakarta.
Prior to joining Spinnaker Capital, he worked at Arthur Anderson and Deloitte Indonesia in their Corporate Finance Divisions.
12 Annual Report 2011
Christopher Robert Botsford 50 Commissioner of APF since 2007. Chief Executive Officer and Director of Asia
Debt Management Hongkong Limited (ADM). Prior to establishing ADM, he ran the Asia-
Pacific regional debt and derivatives operations for Republic National Bank of New York which provided hedging and other debt management structures to regional users.
Robert McCarthy 57 Commissioner of Polysindo since June 2008.
He holds a Master in Business Administration from Yale School of Management, and a Masters Degree in Medieval History from Columbia University. He manages distressed investments for the Spinnaker Funds. He was founding director of Morgan Grenfell and worked as director of Deutsche Bank.
Timbul Thomas Lubis SH, LLM 59 Commissioner of APF since 1990, Partner of Lubis Ganie & Surowidjojo Law Firm
since 1982. He is a graduate of University of
Indonesia and University of Washington Law School.
Dono Iskandar Djojosubroto 67 Commissioner of Polysindo since February
2008. He holds a degree from University of Indonesia and MA & PhD in Economics from The University of Illinois, USA. Previously he worked as the Secretary General of the Minister of Finance, Deputy Governor of Bank Indonesia, and Executive Director representing twelve Asian Countries in the
IMF. He was also a member of Board of Commissioners and Supervisory Board in various Government Institutions, such as PT Jasindo, PT Jasa Marga, Bank BRI and Bank BTN.
13 Annual Report 2011
The Current members of the Board of Directors of APF are as follows: Name Age Principal Occupation V. Ravi Shankar 48 President Director of APF since 2002. He is a
graduate of Production Engineering. He has also completed Advanced Management Programme from Harvard University in 2004. Prior to joining APF, he managed the Textiles
Division of the subsidiary Company of APF and also worked in a machinery manufacturing company in Indonesia and India.
Masjhud Ali, MBA 70 Director of APF since 2002. Prior to joining
APF, he was Director of PT Bank Pembangunan Indonesia (Bapindo) and was a Director in Bank Putera.
S. Jegatheesan 62 Director of APF since 2002. He is a graduate in
Electrical Engineering and has been with APF
since 1989. Prior to joining APF, he was General Manager of a yarn producing company and worked as Project Manager for an engineering company in India.
Peter Vinzenz Merkle 54 Director of APF since 2007. He joined APF in
2000 as head of the Karawang unit producing PTA, Polymer, and Fiber. Prior to joining APF, he worked in various renowned chemical and fiber companies such as Trevira Group and Hoechst AG as the head of their R&D and
Technology Development Divisions. He has an MS in Chemical Engineering from University of Stuttgart, Germany, specializing in polymer processing and environmental technologies.
14 Annual Report 2011
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An Overview of Polyester Industry
The Year 2011 was a year of exciting challenges for the polyester industry. The market remained buoyant during the first semester of the year led by the exceptional peaks in the cotton prices, rapidly followed by normalization in the second half of the year. Global petroleum prices exhibited a narrow volatility through the year 2011 and remained relatively stable within a range of US$86 – US$109/barrel (WTI) averaged at
US$95/barrel. Therefore prices of the Company’s primary raw materials, Paraxylene and MEG, rose steadily in 2011 driven by crude and naphtha prices strongly backed by tight supply situation. The trend continued into the year 2012 as well with the supply situation expected to be still tighter.
The year 2011 was a strong year for polyester industry from a production standpoint with an overall global growth in polymer of around 3.50 million tones or 6.8%,
which is basically at a normal trend line growth with the total production reaching around 56 million tones. On the longer term global polyester polymer is forecast to reach just less than 100 million tonnes by 2020; this implies a stable longer term growth rate of around 6%. Polyester fiber growth is also forecast at 6-6.5% on a longer term backed by sustained domestic consumption growth in Asia and other emerging regions despite negative impacts of the western economies. A further upside in Polyester demand is possible in the event of cotton shortages as predicted by experts. Total Indonesian exports of all goods reached US$203.62 billion in 2011, as compared to US$157.78 billion in 2010. In 2011, exports of textile products accounted for US$13.67 billion, as compared to US$11.32 billion in 2010. The increase in textile exports in year 2011 was mainly contributed by increased prices.
Domestic market continued to remain strong with the per capita consumption increased to 6.3 Kgs in 2011 from 5.70 Kgs in 2010. Domestic demand for both polyester staple fiber and filament yarn increased significantly (around 18%) in the year 2011. There was a shortage of fiber supply in domestic market which was met by increased volume of imports. Import of both fiber and yarn increased significantly to meet the higher demand in the domestic market. Supported by a strong and sustained economic growth of 6.5% in 2011 and the inflation under check, the consumer confidence level remain all time high boosting the domestic consumption. As noted above, Polyester demand, both in domestic and for export markets, are
projected to remain resilient despite the economic crisis in Europe
and the fluctuations in the price trend.
15 Annual Report 2011
PTA (Pure Therephthalic Acid) & Polymer
The production of PTA in 2011 increased by around 7%, strongly supported by the demand from the polyester chain and roughly in line with the growth in new capacity. Global PTA production reached 46.6 million tonnes in 2011 and forecast to at a rate of 6.5% on a longer term. Polymer production also increased almost in the same proportion at 6.8% to reach a total production of 56 million tonnes in 2011.
Staple Fiber
Global polyester staple fiber production in 2011 was estimated to be 14.50 million tons as compared to 13.55 million tons in 2010, registering a growth of 7% over 2010. The Company’s staple fiber production in the year 2011 was higher than 2010 levels due to strong domestic demand for its products.
Filament Yarn
In 2011, global polyester filament yarn production was estimated at 25.08 million tons as compared to 23.16 million tons in 2010, thus registering a growth of over 8.3%. The Company’s filament yarn sales continue to remain at optimum levels driven by strong market demand.
Performance Fabric
The performance fabric division continued to operate through a production tolling arrangement with its subsidiary, Texmaco Jaya. Even after the bankruptcy of PT Texmaco Jaya, the tolling arrangements continued with the approval of the commercial court.
16 Annual Report 2011
Product Range
The Company’s product range includes:
Product Type Utilization
1. PTA (Purified Terephthalic Acid) Manufacture of Polyester Chips
2. Polyester Chips Semi-Dull Super Bright Optical Bright
Polyester Filament yarn/staple fiber Filament yarn/ staple fiber Polyester staple fiber Filament yarn
3. Polyester Staple Fiber Normal Spun Yarn Non Woven Fiber Fill
4. Polyester Filament Yarn Normal Micro Filament Hi filament Differential Shrinkage
Tailored Clothing - Formal and Casual Super fine apparel fabrics with cotton
tencel free Fine apparel fabrics Fine apparel fabrics
5. Performance Fabrics High
Performance
Fabrics
Sprotswear, winter clothing, outdoor
wear
Marketing Distribution
APF continues its efforts to maintain its leadership position in the domestic market and increase its share for its products filament yarn and staple fiber. The Company also strives to strengthen its market position and expand its presence into specialty, value added and performance related segments with distinguished products with multi segment market potential. While emphasis is given to drive these products in the domestic market segments, APF endeavors to develop export markets globally to optimize sales and products with the focus on the development of specialty products
for developed markets. These specialty products require increased marketing efforts, particularly in Europe and North America.
Human Resources
The Company has continuously optimized its work force in line with capacity utilization of its facilities. The Company continues to maintain good relations with its workforce and Unions. The Company also has designed its Human Resources Strategy to be in line with the changes in the external and internal environment. The Company is implementing a management incentive scheme and an Employee Stock Option Plan to reward performance and improve career paths for all of its employees.
17 Annual Report 2011
Environment
With its strong commitment to environmental safety and protection, the Company is strictly adhering to stringent emission norms of its effluents. The Company is fully compliant to all applicable environmental standards of Indonesia, with Badan Pengendali Lingkungan (Bapedal) as its regulating authority. The Company also installed and commissioned 100% waste recycling facility at Karawang (“Recycle”) to convert all its waste into ‘green label products’ and to ensure ZERO waste from its production facilities.
Locaction & Type of Assets Work more than 5% of Total Assets
The Company has certain assets whose values exceed 5% of the Company’s total assets. For APF, these assets, which essentially consist of land, machinery and buildings, including the PTA Plant, Polymer facilities, fiber line and yarn equipment, and are located in two manufacturing facilities in Kaliwungu, in Central Java, and Karawang, in West Java.
Hypothecated Fixed Assets
APF has production facilities at Karawang and Kaliwungu. Land totaling 15.9 hectares, with buildings, plant and equipment and located in Kaliwungu facilities, are
hypothecated to IBRA (Indonesia Bank Restructuring Agency). Land totaling 26.62 hectares, with buildings, and production facilities at Karawang are secured to the Company’s guaranteed Secured Notes.
Dividend Policy
APF has historically paid an annual dividend after approval of the Company’s shareholders at the Annual General Meeting of the shareholders. However in view of the current financial situation, APF has not declared a dividend for 2011.
18 Annual Report 2011
Stock Price Performance
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
2011
Highest
Lowest
Volume
2010
Highest
Lowest
Volume
(Rp)
(Rp)
(Shares)
(Rp)
(Rp)
(Shares)
245
170
4.343.500
154
107
154.188.500
540
180
38.711.200
152
59
389.502.500
810
365
70.257.100
130
110
128.628.500
590
310
33.241.900
370
119
313.177.000
Restructuring Status & Financing Activities
The secured debt restructuring is not yet completed as APF still awaits a response from the PPA. Damiano Investments BV, the majority shareholder is also the majority holder of secured debts other than the PPA portion. Damiano Investments BV has provided a working capital and Letter of Credit facilities for the procurement of raw materials.
This has helped considerably the Company’s ability to maintain optimum capacity utilization of its production facilities. Damiano Investments BV have also extended Capex loan to fund its capital expenditure plans for up gradation of equipments and expansion PSF and Polymer capacities.
In January 2012, the Company sought and obtained approval of its unsecured creditors for extension 3 years time and re-schedule principal repayments commencing from
February 2015 instead of February 2012 as approved earlier. The majority New Note holders have approved the above request by the Company in their meeting held on 16th January 2012 at Singapore.
The Company has four subsidiaries: PT Texmaco Jaya Tbk. (Texmaco Jaya), Polysindo International Finance Company BV. (PIFC), Polysindo Mauritius Ltd., and PT Eastindo Polymertama (Eastindo).
PT Texmaco Jaya Tbk (Texmaco Jaya)
PT Texmaco Jaya’s production facility consists of weaving, knitting, dying, and finishing equipment of Fashion Fabrics and Performance Fabrics. The Fashion Fabric division is not in operation due to lack of working capital. APF owns 92% shares of Texmaco Jaya. The shares were delisted from IDX effective 10th October 2008.
During 2010, one of the unsecured creditors of PT Texmaco Jaya, PT Hanil Bakrie Finance had filed a bankruptcy petition against the
19 Annual Report 2011
Company in the commercial court Jakarta. The Company, in response to the petition, had requested for a suspension of payment of debt obligation (PKPU) and got approval from the majority creditors and Court for the same. The Company had also obtained extension of time for the suspension of payment process (PKPU) up to 4th July 2011.
During the period, PT Texmaco Jaya Tbk identified and held negotiations with the
prospective investors to support and participate in the peace plan proposed by the
Subsidiary. Despite prolonged negotiations with several investors, none of them came
forward with a commitment to invest in PT Texmaco Jaya Tbk and bail out the
Subsidiary from bankruptcy. In the absence of any investor, PT Texmaco Jaya Tbk could
not finalize the composition plan within the time stipulated by the Court.
Consequent to this, the Commercial Court of Jakarta declared PT Texmaco Jaya Tbk
bankrupt pursuant to section 230 (1) and 285 (3) of the Indonesian Bankruptcy law 37
0f 2004 and delivered its verdict on 19th August 2011 as per Court order
10/PKPU/2010/PN.NIAGA.JKT.PST. Jo No: 71/PAILIT/2010/PN.NIAGA.JKT.PST. The
Court also appointed Dr. MARSUDIN NAINGGOLAN as the supervisory Judge and a
team of Receivers (Curators) to monitor and enforce the liquidation process as per the
law.
Polysindo International Finance Company BV. (PIFC) and Polysindo (Mauritius) Ltd.
Polysindo International Finance Company BV (PIFC) and Polysindo (Mauritius) Ltd. are wholly owned subsidiaries of PT. Asia Pacific Fibers Tbk and act as financing vehicle for APF. The double taxation treaty between Indonesia and Mauritius has expired, hence APF intends to wind-up Polysindo (Mauritius) Ltd.
PT Eastindo Polymertama (Eastindo)
Eastindo was originally formed to implement the expansion of PTA and polymer production in Karawang which was later implemented through APF. As Eastindo has not engaged in any manufacturing activity, the Company is planning to wind up
PT Eastindo Polymertama.
20 Annual Report 2011
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Overview
The revenue of the company is derived from the sale of filament yarn, staple fiber, polyester chips, and performance fabrics, both in domestic and export markets. Total sales in 2011 were increased from the previous year due to increases in sales volumes and selling prices for all products during the year. Selling prices of finished products moved up significantly above the raw material price movement resulting in improvement in margin for finished goods. The rupiah fluctuated during the year from 8,508 to 9,170 and closed at Rp 9,068/US$ as of 31st December 2011, compared to Rp 8,991/US$ in 2010.
Results of Operations
In 2011, net sales revenue was Rp 5,577 trillion, as compared to Rp 4,455 trillion in 2010. The increase in net sales in 2011 was primarily on account of increases in the sales prices for all products during the year and
the higher volume of sales. Export sales were Rp 1,180.12 billion or, 21.16% of the net sales, and domestic sales were Rp 4,397.10 trillion or 78.84% of the net sales. Other operational revenue was Rp 4.67 billion, realized through the sale of indirect materials.
Gross Profit/ (Loss)
The Company posted a Gross profit of Rp 390.55 billion in 2011, as compared to a loss of Rp 331.39illion in 2010. This improvement in profit was mainly due to due to better price realization and margins for all products in 2010 driven by strong demand for polyester in the market.
Operating Profit / (Loss)
The operating profit in 2011 was Rp 105.13 billion as compared to Rp 14.20 billion in 2010. Selling and General Administrative overhead in the year 2011 was Rp 285.42 billion as compared to Rp 317.20 billion in 2010. The decrease in the selling and administrative overhead was mainly due to reduction in export sales volume during the year 2011.
Net Income
The Company posted net income of Rp 610.31 billion in 2011, as compared to a net income of Rp 334.98 billion in 2010. The increase in net income in 2011 was due to the
gain of Rp 656.59 billion derived from disposal of its subsidiary
21 Annual Report 2011
company PT Texmaco Jaya consequent to its bankruptcy. The weakening of Rupiah from Rp 8,991/USD in 2010 to Rp 9,068/USD in 2011 has resulted in an exchange loss of Rp 83.9 billion as compared to exchange gain of Rp 391.4 billion in 2010. However, the Company posted an EBITDA of US$77.7 million in 2011, compared to an EBITDA of US$68.3 million in 2010.
Auditor’s Opinion
The Independent Accountants have expressed a clean opinion on the Financial of the Company for the year ended 31st December 2011.
Business Risks
The year 2011 began with a buoyant and exciting traverse for the polyester industry due to unprecedented peaks in cotton prices leading to sharp rise in PTA and polyester prices, followed by a swift normalization in the second semester of the year 2011. Polyester chain margins remained at high levels despite volatility in raw material price movements, during the first half of the year but have rapidly fallen to normal levels in the second semester with the softening of cotton prices. With the crude and naphtha prices continued to remain strong putting pressure in the margins on petro chemical chain. Currently the Oil price (WTI Crude) is hovering above US$100/barrel. While pricing typically trends with oil prices, in recent months the price for PX has “broken loose” of this linkage and is tracking more to industry supply/demand. PX supply has been balanced to tight during the year 2011 and forecast to remain tighter during 2012 and the prices are expected to remain strong for the major part of the year. The Company is still depending on pre-financing arrangements, in addition to the working capital facility provided by the majority owner, for the procurement of raw materials and in the absence of a conventional source of working capital through normal banking channels. A formal working capital loan through a bank will be possible only when the secured debt is restructured.
Debt Restructuring
The secured debt restructuring has not yet been completed, as the Company still awaits a response from the PPA. Damiano Investments BV, the majority shareholders is also the majority holders of secured debt, other than the PPA portion. Damiano Investments BV continued to provide working capital loans and a Letter of Credit facility for the procurement of raw materials. This has helped the Company to maintain optimum capacity utilization of the Company’s production facilities. Damiano Investment BV. have also extended capex loan to fund its capital expenditure plan for upgradation of equipment and expansion of PSF and polymer capacities. In view of its tight working capital position and non completion of secured debt restructuring, in January 2012, Asia Pacific Fibers
22 Annual Report 2011
(APF) sought and received the approval of its unsecured creditors for extension of the principal repayment schedule by 3 years and the first installment will be due on due on 15th February 2015.
Corporate Governance
The Company has complied with the various statutory requirements of Indonesian Corporate Law, Capital Market Law, and Stock Exchange Regulations. The Board of Commissioners is represented by eminent people in the field of Finance, Economics, and Law, in addition to the majority shareholders’ representatives. The Board of Commissioners meets on a quarterly basis to review the operations of Board of Directors and the Company. The Board of Directors of the Company meets frequently to review the operations of the Company and to discuss and finalize important issues. The Company’s Internal Audit Department is headed by Mr. Yohanes Baptis Galuh Adjar Pamungkas, ably assisted by experienced staff members. Internal audits on various functions are conducted concurrently and the audit reports are being reviewed by the Independent Commissioner and the Board of Directors periodically to ensure remedial actions. The Company has a “Corporate Secretarial Department” headed by Mr. Tunaryo, and is being ably assisted by experienced staff in the field of finance and legal affairs. The Company has been disclosing material information to the shareholders, stakeholders, and the public. The Company will continue to strive to bring more transparency and fairness in its reporting to its shareholders, stakeholders, and the public.
Corporate Social Responsibility (CSR)
It is our commitment and conviction that for a company to sustain its growth and success over time and create stakeholders value, it must also share its success and create value for society. We, at APF, deem it as our social obligation to fulfill this duty to help create a better community and environment around us. In order to facilitate the process of this inclusive development of the community and to integrate with the sustainable economic development of the Country, APF actively participate in the community development focusing on the urging needs of the surrounding community. Our major initiatives are in the field of education, health, environmental control, civic amenities, infrastructure and development of vocational skills. Our corporate philosophy is to create employment opportunity to local by providing requisite
education and vocational training. The Company has established a foundation “Yayasan Asia Pacific Fibre” for the purpose of carrying
23 Annual Report 2011
out these CSR activities on a more channelized and focused manner. Some of the major ongoing activities and initiatives are given below: Education Programs
a. Construction of Elementary School building in the Blendung Village, Klari, Karawang District
b. Distribution of scholarships to students in Karawang and Kaliwungu region
Health care program a. Providing free medical treatment and medicines to the needy people in
Sumberejo and Nolokerto, Kaliwungu, Kendal b. Construction of building to house the primary health centre for in
patients at Klari, Karawang Religious and cultural activities
a. Construction of boarding school for religious studies, prayer halls and facilities at Karawang and Kaliwungu
b. Actively supporting religious and cultural activities in the region to impove social harmony
Environmental aspects a. “Go Green” movement in coordination with the University of Jenderal
Sudirman Purwokerto b. Planting of teakwood trees in Kaliwungu region
Humanitarian relief a. Renovation/reconstruction of flood effected schools Mangkang Kulon,
Semarang b. Relief assistance to disaster effected people in Magelang and Padang
Social and Economic empowerment a. Financial assistance to small scale/ cottage industries in the region b. Promotion of fiber waste processing units in the region to provide self
employment to local people
24 Annual Report 2011
CCoorrppoorraattee
IInnffoorrmmaattiioonn
Date of Incorporation February 15th, 1984 Listing on the Indonesia Stock Exchange 1. Public Offering in February 1991
Partial Listing of 24,000,000,000 shares on 12
March 1991 on the Jakarta and Surabaya Stock
Exchanges.
2. Company Listing in January 1992
Company listed 68,000,000 shares on 3 January
1992 on the Jakarta and Surabaya Stock Exchanges.
The Company’s total number of listed shares was
92,000,000.
3. Rights Issue Offering in October 1993
Between November 1, 1993 and January 3, 1994,
the Company launched the first Rights Issue
Offering of 184,000,000 shares. After the rights
issued, the number of issued shares of the
company increased to 276,000,000.
4. Stock Splits in March 1995
With the stock splits on 27 March 1995 respectively, a total of 552,000,000.
5. Bonus issue and dividend shares in April 1995
On 12 April 1995 and 17 April 1995, respectively, a total of 552,000,000 bonus
and dividend share were listed on Jakarta and Surabaya Stock Exchanges. The
total number of listed on both Jakarta and Surabaya Stock Exchanges amounted
to 1,104,000.000.
6. Rights Issue Offering II in June 1996
With the second Right Issue Offering on 10 June 1996, 1,104,000,000 shares were
listed on Jakarta and Surabaya Stock Exchanges, which gives a total of
2,208,000,000 shares listed on the Stock Exchange Houses.
7. Rights Issue Offering III in December 1997
The third Rights Issue Offering on 24 December 1997 launched a sum of
2,185,920,000 shares on Jakarta and Surabaya Stock Exchanges. Thus, after the
completion of rights Issue III, the Company’s total number of listed shares is
4,393,920,000.
8. Debt to Equity Swap in September 2006
APF has received approval from Department of Justice and Human Right for the
issue of 43,144,238,750 shares to its unsecured creditor as a part of debt to
equity swap as approved by Jakarta Commercial Court. Out of that as on
31st December 2006, APF has allotted 36,093,831,290 shares to
25 Annual Report 2011
unsecured creditors who have made their claim with the Company. APF has also
received approval from Department of Justice and Human Right for the
40,340,241,250 shares to be issued to its secured creditors as per Secured Debt
Restructure Proposal (“SDRP”). APF has not allotted any shares so far as at 31st
December 2007.
9. Reverse Stock in February 2008
The Company has amended its Articles of Association in connection with the
reverse stock split with ratio 20:1. And based on notarial deed of Sutjipto SH No.
91 dates February 21, 2008 about the changes of Articles of Association, the
authorized capital of the Company amounts to Rp 16,000,000,000,000 consisting
of 12,357,255,040 shares. The deed was approved by Minister of Justice and
Human Rights in its decision letter No. AHU-10588.AH.01.02 Year 2008 dated
March 3, 2008.
10. The Company obtained the approval of the shareholders of the Company in the
Extra Ordinary General Meeting of Shareholders held on 24th March 2009, the
issuance of 5% (118,845,397 shares) of Issued and Paid-up capital of series ‘C’
share without preemptive right, for providing stock option to the Company
management and employees (Management Employee Stock Option Programme).
11. The Company obtained the approval for the change of name to PT Asia Pacific
Fibers Tbk from Minister of Justice on 10th November 2009 and Indonesian
Investment Coordinating Board/BKPM on 2nd December 2009.
12. Based on the notarial deed of Aryanti Artisari, SH, M.Kn. No 107 dated
February 23, 2012, the stockholders agreed to use their option right regarding
the Management Employee Stock Option Programme (MESOP). It was connected
with the notarial deed of Sutjipto, SH No. 91 dated March 24, 2009 regarding the
issuance of 118,845,397 new authorized shares series C (5% of issued and paid-
up capital) without preemptive rights at par value of Rp 40 each. The execution
price at March 5, 2012 is Rp 45 each, and the shares have been fully paid-up on
February 20, 2012 and February 21, 2012. The shares also registered
in the Indonesian Stock Exchange through announcement No.
Peng-P-00032/BEI.PPR/03-2012 dated March 5, 2012 and No.
Peng-P-00033/BEI.PPR/03-2012 dated March 7, 2012.
26 Annual Report 2011
Total Structure listed on Indonesia Stock Exchange as of 31 December 2011
2,376,907,937
Capital Structure as 31 December 2011
Serie A
Authorized Capital Rp 8,500,000,000,000
Nominal Value per share Rp 10,000
Paid-up Capital Rp 2,196,960,000,000
Serie C
Authorized Capital Rp 166.968.960.000
Nominal Value per share Rp 40
Paid-up Capital Rp 86.288.478.000
Shareholders
Damiano Investment 60.04%
PT. Multikarsa Investama* 5.53%
Public 34.43%
* Shares transferred by PT. Multikarasa Investama to PT. Bina Prima Perdana under IBRA
restructuring. Registration with Indonesia Stock Exchange yet to be completed.
27 Annual Report 2011
Board of Commissioners
President Commissioner Robert Clive Appleby
Commissioner Antonitris
Commissioner Robert McCarthy
Commissioner Christopher Robert Botsford
Independent Commissioner Dono Iskandar Djojosubroto
Independent Commissioner Timbul T. Lubis, SH, LLM Board of Directors
President Director Vasudevan Ravi Shankar
Director Drs. Masjhud Ali, MBA
Director Seeniappa Jegatheesan
Director Peter Vinzenz Merkle
Company’s Activities
Engaged in the production of PTA, Polymer, Polyester Fiber, Filament Yarn, and
Synthetic Fabrics. Production Capacity as of 31 December 2011
Purified Terephthalic Acid (PTA) 340.000 tons/year
Polyester Chips 330.400 tons/year
Polyester Staple Fiber 140.000 tons/year
Polyester Filament Yarn 140.000 tons/year
Performace Fabric 18.000.000 yards/year
Representative Office The East 35th Floor, Unit 5-6-7 Jl. Lingkar Mega Kuningan Kav. E3.2 No. 1 Jakarta 12950 Tel : (62-21) 579-38555 Fax : (62-21) 579-38565 Registered Office Desa Nolokerto Kecamatan Kaliwungu, Kendal Tel : (62-24) 8660272 Fax : (62-24) 8660275
28 Annual Report 2011
Manufacturing Facilities
Plant 1: Plant 2: Kiara Payung Vilage, Jl. Raya Kaliwungu Km. 19 Klari District, Karawang Kendal, Semarang West Java - Indonesia Central Java - Indonesia Tel : (62-267) 431971 Tel : (62-24) 8660272 Fax : (62-267) 431970 Fax : (62-24) 8660275 Share Registrar PT. Datindo Entrycom Wisma Dinners Club Anex Jl. Jend. Sudirman 34-35 Jakarta 10220 Registered Public Accountant Drs. Hendrawinata, Eddy & Siddharta (Indonesian Member of Kreston International) Intiland Tower 18th Floor Jl. Jend. Sudirman 32 Jakarta 10220, Indonesia Tel : (62-21) 5712000 Fax : (62-21) 5706118, 5711818
29 Annual Report 2011
The Annual Report and The accompanying financial statements and related financial information, are the responsibility of the Management of PT Asia Pacific Fibers Tbk and have been approved by members of the Board of Directors and The Board of Commissioners whose
signatures appear below.
Robert Clive Appleby President Commissioner
Vasudevan Ravi Shankar President Director
Antonitris Commissioner
Drs. Masjhud Ali MBA
Director
Christopher Robert Botsford
Commissioner
Seeniappa Jegatheesan
Director
Robert McCarthy
Commissioner
Peter Vinzenz Merkle Director
Timbul Thomas Lubis, SH LLM
Independent Commissioner
Dono Iskandar Djojosubroto Independent Commissioner
INDEPENDENT AUDITOR
REPORT
Consolidated Financial Statements and Independent Auditors’ Report PT Asia Pacific Fibers Tbk And Its Subsidiaries December 31, 2011 and 2010
CONTENTS
Board of Directors’ Statement
Independent Auditors’ Report
Page
Consolidated Financial Statements
Consolidated Statements of Financial Position 1 Consolidated Statements of Comprehensive Income 4 Consolidated Statements of Changes in Equity 6 Consolidated Statements of Cash Flows 7 Notes to Consolidated Financial Statements 9 Schedule
Supplementary Financial Information 1 – 7
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
December 31, 2011, December 31, 2010 and January 1, 2010
The accompanying notes to consolidated financial statements are an integral part
of the consolidated financial statements
1
A S S E T S
Notes
December 31,
2 0 1 1
December 31,
2 0 1 0
(As Restated)
January 1,
2 0 1 0
(As Restated)
Rp Rp Rp
CURRENT ASSETS
Cash and cash equivalents 3g,h,5 31,177,273,662 87,892,873,462 62,235,591,207 Short-term investments 3g,h,6 3,000,000,000 1,000,000,000 3,500,000,000
Trade receivables, net after
allowance for impairment of Rp 141,986,246,529 in 2011 and
Rp 61,489,504,295 in 2010
Third parties 3g,h,7 454,265,227,439 422,111,905,807 280,404,228,582 Related parties 3g,h,7 268,722,447,175 268,722,447,175 268,722,447,175
Other receivables, net after
allowance for impairment of Rp 330,163,685,573 in 2011 and
Rp 510,737,395,134 in 2010
Third parties 3g,h,8 22,937,261,126 4,431,384,634 5,039,837,125 Inventories 3i,9 795,058,287,598 462,112,098,195 463,121,064,042
Purchase advances 10 343,195,422,233 291,068,826,915 246,425,188,396
Prepaid taxes 3t,23a 119,411,500,545 126,510,220,118 86,654,752,801 Prepaid expenses 3j,11 10,588,262,122 8,241,335,214 7,588,226,644
Advances for investment in
a joint venture 3g,h,12 − − 5,914,525,920 Other current assets 3g,h,13 52,018,685,430 26,473,126,432 2,229,884,332
Total current assets 2,100,374,367,330 1,698,564,217,952 1,431,835,746,224
NON–CURRENT ASSETS
Non-trade receivables from related
parties, net after allowance for impairment of
Rp 1,015,033,871,667 in 2011
and Rp 50,101,533,106 in 2010 3g,h,14 317,368,061,827 425,918,780,239 426,365,868,504 Restricted cash in banks 3g,h,15 10,345,623,643 17,129,600,731 17,650,828,516
Property, plant and equipment, net
after accumulated depreciation of Rp 8,573,556,432,737
in 2011 and
Rp 8,977,105,835,012 in 2010 3k,l,m,n,16 1,255,117,683,754 1,775,584,133,376 2,250,057,296,771 Deferred tax assets 3t,23d − 31,293,233,848 35,479,503,828
Total non–current assets 1,582,831,369,224 2,249,925,748,194 2,729,553,497,619
TOTAL ASSETS 3,683,205,736,554 3,948,489,966,146 4,161,389,243,843
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Continued)
December 31, 2011, December 31, 2010 and January 1, 2010
The accompanying notes to consolidated financial statements are an integral part
of the consolidated financial statements
2
LIABILITIES AND EQUITY (DEFICIENCY)
Notes December 31,
2 0 1 1
December 31,
2 0 1 0
(As Restated)
January 1,
2 0 1 0
(As Restated)
Rp Rp Rp
CURRENT LIABILITIES
Bank Loans 3p,17 637,839,711,337 431,987,380,441 408,047,983,987 Secured Debts 3p,18 9,185,233,096,043 9,107,034,576,501 9,435,139,803,808
Short term loans 3p,19 − 324,161,880,678 333,553,849,154
Notes payable 3p,20 − 182,150,784,488 188,752,488,371
Trade payables Third parties 3p,21 215,808,272,379 223,080,294,936 381,749,984,520
Liabilities for purchase of property,
plant and equipment 3p,22 − 274,011,964 286,476,750
Taxes payable 3t,23b 17,567,520,945 22,684,826,196 22,993,119,491
Accrued expenses 3p,24 413,557,919,140 695,686,772,082 747,446,678,605 Current maturity of long-term
liabilities:
Working capital loans 3p,26 77,078,000,000 38,958,003,000 3,451,313,400 Obligation under finance lease 3p,27 − 38,670,122,950 40,429,224,305
Credit financing payables 3p,28 517,187,846 475,480,013 156,641,665 Other current liabilities 3p,29 38,573,261,263 155,665,338,586 146,167,238,196
Total current liabilities 10,586,174,968,953 11,220,829,471,835 11,708,174,802,252
NON–CURRENT LIABILITIES
Long-term liabilities - net of current maturity :
Unsecured Debts and Notes
Payable 3p,25 198,997,359,748 189,504,468,044 190,289,560,544 Working capital loans 3p,26 131,486,000,000 326,174,259,309 341,012,487,762
Credit financing payables 3p,28 440,023,412 696,228,253 154,802,097 Employees’ benefit liabilities 3r,30 77,637,935,506 73,633,912,844 59,867,946,890
Deferred tax liabilities 3t,23d 30,516,083,167 89,854,542,024 150,181,963,385
Total non–current liabilities 439,077,401,833 679,863,410,474 741,506,760,678
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Continued)
December 31, 2011, December 31, 2010 and January 1, 2010
The accompanying notes to consolidated financial statements are an integral part
of the consolidated financial statements
3
LIABILITIES AND EQUITY (DEFICIENCY)
December 31, December 31, January 1,
Notes 2 0 1 1 2 0 1 0
(As Restated)
2 0 1 0
(As Restated)
Rp Rp Rp
EQUITY (DEFICIENCY)
Capital stock Authorized 12,357,255,040
shares at Rp 10,000 par value
per Series A, Rp 1,000 par value per per Series B and
Rp 40 par value per Series C
in 2011 and 2010 Issued and paid up 219,696,000
Series A and 2,157,211,950
Series C in 2011 and 2010 31 2,283,248,477,500 2,283,248,477,500 2,283,248,477,500 Additional paid-in capital 3o,32 5,586,506,149,053 5,586,506,149,053 5,586,506,149,053
Other components of equity 12,075,095,048 12,232,185,356 11,119,632,355
Retained earnings (accumulated deficit)
Appropriated 33 8,280,000,000 8,280,000,000 8,280,000,000
Unappropriated (15,232,156,355,833) (15,701,308,253,547) (16,036,148,144,398 )
Equity attributable to the owners of the Company (7,342,046,634,232) (7,811,041,441,638) (8,146,993,885,490 )
Non-controlling interests 34 − (141,161,474,525) (141,298,433,597 )
Total equity (deficiency) (7,342,046,634,232) (7,952,202,916,163) (8,288,292,319,087 )
TOTAL LIABILITIES AND
EQUITY (DEFICIENCY) 3,683,205,736,554 3,948,489,966,146 4,161,389,243,843
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the years ended December 31, 2011 and 2010
The accompanying notes to consolidated financial statements are an integral part
of the consolidated financial statements
4
Notes 2 0 1 1 2 0 1 0
(As Restated)
Rp Rp OPERATING REVENUES
Net sales 3s,37 5,577,223,233,050 4,455,449,431,196
Other operating revenues 3s,38 4,673,888,541 6,156,168,450
Total operating revenues 5,581,897,121,591 4,461,605,599,646
COST OF GOODS SOLD 3s,39 (5,191,343,118,311 ) (4,130,212,671,366)
GROSS PROFIT 390,554,003,280 331,392,928,280
OPERATING EXPENSES
Selling expenses 3s,41 (120,468,271,917 ) (152,628,533,572) General and administrative expenses 3s,42 (164,956,335,861 ) (164,568,310,006)
Total operating expenses (285,424,607,778 ) (317,196,843,578)
PROFIT FROM OPERATIONS 105,129,395,502 14,196,084,702
OTHER INCOME (CHARGES) Interest income 3s,43 185,188,989 239,465,297
Gain on sale of property, plant and equipment 3s,16 − 763,636,367
Insurance claim settlement, net 35 755,425,253 3,912,505,783
Gain (loss) on foreign exchange transactions, net 3c (83,939,034,346 ) 391,404,862,775
Depreciation expenses of unused property, plant and equipment
16
−
(4,598,949,895
)
Loss on investment in joint venture 12 − (5,914,525,920)
Interest expense and bank charges 44 (142,803,764,229 ) (125,722,745,041)
Miscellaneous income, net 45 6,804,776,757 4,555,364,474
Total other income (charges), net (218,997,407,576 ) 264,639,613,840
PROFIT (LOSS) BEFORE INCOME TAX (113,868,012,074 ) 278,835,698,542
TAX INCOME (EXPENSE) 3t Current period 23c − –
Deferred 23d 59,286,095,421 56,141,151,381
Total tax income 59,286,095,421 56,141,151,381
Profit (loss) from continuing operations (54,581,916,653 ) 334,976,849,923
Profit from discontinued operations 46 8,301,337,613 –
Gain from disposal of Subsidiary 3b,46 656,593,951,279 −
Profit from discountinued operations 664,895,288,892 −
NET PROFIT FOR THE YEAR 610,313,372,239 334,976,849,923
Net profit attributable to :
Owners of the Company 609,369,397,980 334,839,890,851
Non-controlling interests 943,974,259 136,959,072
Total net profit for the year 610,313,372,239 334,976,849,923
EARNING PER SHARE 3u,36 257 141
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Continued)
For the years ended December 31, 2011 and 2010
The accompanying notes to consolidated financial statements are an integral part
of the consolidated financial statements
5
Notes 2 0 1 1 2 0 1 0
(As Restated)
Rp Rp
NET PROFIT FOR THE YEAR 610,313,372,239 334,976,849,923
OTHER COMPREHENSIVE INCOME
Foreign currency translation 3c (209,453,744) 1,112,553,001
Related income tax 3t,23e 52,363,436
Total other comprehensive income, net of tax (157,090,308) 1,112,553,001
TOTAL COMPREHENSIVE INCOME
FOR THE YEAR
610,156,281,931
336,089,402,924
TOTAL COMPREHENSIVE INCOME
ATTRIBUTABLE TO :
Owners of the Company 609,212,307,672 335,952,443,852 Non-controlling interests 943,974,259 136,959,072
Total comprehensive income 610,156,281,931 336,089,402,924
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(defi
cien
cy)
att
rib
uta
ble
to t
he
ow
ners
of
the
Com
pa
ny
Non
-Con
troll
ing
Inte
res
t
Tota
l eq
uit
y
(defi
cien
cy)
Rp
Rp
Rp
Rp
Rp
R
p
R
p
R
p
R
p
R
p
Bal
ance
as
of
Dec
ember
31,
2009
2
,283,2
48,4
77,5
00
5,5
86,5
06,1
49,0
53
(4
,950,0
19,1
00 )
11,3
41,5
56,5
43
(2
21
,924
,188 )
8,2
80
,000
,000
(15,6
29,4
97,7
70
,817
) (7
,745,2
93,5
31,0
09)
(134,7
64,3
78,0
04 )
(7,8
80,0
57,9
09,0
13)
E
ffec
t of
Fir
st T
ime
Adopti
on o
f
S
FA
S 5
0 (
Rev
ised
200
6)
and
S
FA
S 5
5 (
Rev
ised
200
6)
3f
–
–
–
–
–
–
(3
61,7
48,2
08
,237
) (3
61,7
48,2
08,2
37
) (6
,534,0
55,5
93 )
(368,2
82,2
63,8
30
)
Pri
or
yea
rs’
adju
stm
ents
50
–
–
4,9
50,0
19,1
00
–
–
–
(4
4,9
02,1
65
,344
) (3
9,9
52,1
46,2
44)
–
(3
9,9
52,1
46,2
44)
Bal
ance
as
of
Januar
y 1
, 2010
(
As
Res
tate
d)
2
,283,2
48,4
77,5
00
5,5
86,5
06,1
49,0
53
–
11,3
41,5
56,5
43
(2
21
,924
,188 )
8,2
80
,000
,000
(16,0
36,1
48,1
44
,398
) (8
,146,9
93,8
85,4
90)
(141,2
98,4
33,5
97 )
(8,2
88,2
92,3
19,0
87)
Oth
er c
om
pre
hen
sive
inco
me
–
–
–
1,1
12,5
53,0
01
–
–
–
1,1
12,5
53,0
01
–
1,1
12,5
53,0
01
Pro
fit
for
the
yea
r
–
–
–
–
–
–
33
4,8
39,8
90
,851
334,8
39,8
90,8
51
136,9
59,0
72
334,9
76,8
49,9
23
Bal
ance
as
of
Dec
ember
31,
2010
(
As
Res
tate
d)
2
,283,2
48,4
77,5
00
5,5
86,5
06,1
49,0
53
–
12,4
54,1
09,5
44
(2
21
,924
,188 )
8,2
80
,000
,000
(15,7
01,3
08,2
53
,547
) (7
,811,0
41,4
41,6
38)
(141,1
61,4
74,5
25 )
(7,9
52,2
02,9
16,1
63)
Oth
er c
om
pre
hen
sive
inco
me
–
–
–
(1
57,0
90,3
08)
–
–
–
(157,0
90,3
08
) –
(157,0
90,3
08
)
Pro
fit
for
the
yea
r
–
–
–
–
–
–
60
9,3
69,3
97
,980
609,3
69,3
97,9
80
9
43,9
74,2
59
610,3
13,3
72,2
39
Rec
lass
ifie
d d
ue
to l
ost
of
contr
ols
46
–
–
–
–
–
–
(1
40,2
17,5
00
,266
) (1
40,2
17,5
00,2
66)
140,2
17,5
00,2
66
–
Bal
ance
as
of
Dec
ember
31,
2011
2
,283,2
48,4
77,5
00
5,5
86,5
06,1
49,0
53
–
12,2
97,0
19,2
36
(2
21
,924
,188 )
8,2
80
,000
,000
(15,2
32,1
56,3
55
,833
) (7
,342,0
46,6
34,2
32)
–
(7
,342,0
46,6
34,2
32)
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31, 2011 and 2010
The accompanying notes to consolidated financial statements are an integral part
of the consolidated financial statements
7
2 0 1 1 2 0 1 0
Rp Rp
CASH FLOWS FROM OPERATING ACTIVITIES
Receipt from customers 5,673,816,758,805 4,571,801,149,332
Payment to suppliers (1,067,788,023,128 ) (1,266,559,784,992 )
Payment of salaries (136,621,636,479 ) (135,561,458,905 )
Other operating cash payments, net (308,982,916,599 ) (544,180,971,694 )
Cash provided by operations 4,160,424,182,599 2,625,498,933,741
Interest received 180,331,211 252,699,933
Interest expense and bank charges paid (138,419,839,803 ) (122,398,599,984 )
Cash receipt from insurance claim settlement 1,101,259,119 989,928,087
Payment of income tax (102,802,042,218 ) (8,463,579,257 )
Refund of income tax 64,828,470,645 65,773,176,658
Net cash provided by operating activities 3,985,312,361,553 2,561,652,559,178
CASH FLOWS FROM INVESTING ACTIVITIES
Payment to acquire property, plant and equipment (80,771,119,003 ) (32,157,279,361 )
Proceed from sale of property, plant and equipment − 572,727,273
Increase of other current assets (24,322,087,086 ) (24,127,214,000 )
Payment of non-trade receivables from related parties (24,713,231,369 ) (147,401,627,178 )
Payment of other receivables (6,047,211,930 ) −
Increase of short-term investments (2,000,000,000 ) −
Net cash used in investing activities (137,853,649,388 ) (203,113,393,266 )
CASH FLOWS FROM FINANCING ACTIVITIES
Payment of bank loans (3,759,896,128,247 ) (2,349,271,697,000 )
Receipt of working capital loans 74,474,100,000 35,653,947,627
Payment of working capital loans (227,601,948,781 ) −
Receipt of credit financing payables 305,238,390 −
Payment of credit financing payables (519,739,797 ) (274,216,087 )
Net cash used in financing activities (3,913,238,478,435 ) (2,313,891,965,460 )
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS
(65,779,766,270
)
44,647,200,452
EFFECT OF FOREIGN EXCHANGE RATE 9,368,132,922 (18,989,918,197 )
BALANCE OF UNCONSOLIDATED SUBSIDIARY
(Note 46)
(303,966,452
)
−
CASH AND CASH EQUIVALENTS
AT BEGINNING OF YEAR
87,892,873,462
62,235,591,207
CASH AND CASH EQUIVALENTS
AT END OF YEAR
31,177,273,662
87,892,873,462
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
For the years ended December 31, 2011 and 2010
The accompanying notes to consolidated financial statements are an integral part
of the consolidated financial statements
8
2 0 1 1 2 0 1 0
Rp Rp
ADDITIONAL SCHEDULE OF NON–CASH
INVESTING AND FINANCING ACTIVITIES :
Acquired of property, plant and equipment direct
acquisition through credit financing payables 408,913,636 2,306,323,363
Capitalization of interest expenses to unsecured debts
and notes payable 7,620,301,967 7,619,182,985
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2011 and 2010
9
1. G E N E R A L
a. Establishment and General Information
PT Asia Pacific Fibers Tbk (“the Company”) was established within the framework of the Domestic Capital Investment Law No. 6 year 1968, as amended by Law No. 12 year 1970 based on notarial deed No. 22 dated February 15, 1984 of Januar Tirtaamidjaja, SH, notary public in Jakarta. The above Laws were subsequently amended by the Limited Liability Company Law of Republic of Indonesia No. 40 year 2007 dated August 16, 2007. The deed of establishment was approved by the Minister of Justice of the Republic of Indonesia based on decision letter No. C2–6107.HT.01.01.TH.84 dated October 26, 1984 and was published in Supplement No. 3247 of State Gazette No. 72 dated September 7, 1990. The Article of Association has been amended based on notarial deed No. 92 dated March 24, 2009 of Sutjipto, SH, notary in Jakarta to adjust the Company’s Article of Association with Bapepam-LK No. IX.J.1 dated May 14, 2008 concerning the Principles of Association of Public Offering of Conduct Equity Securities and Public Companies. The deed of establishment was approved by the Minister of Justice of the Republic of Indonesia based on decision letter No. AHU-0052618.AH.01.09.Tahun 2009 dated August 14, 2009. The Articles of Association have been amended several times. The latest amendment of the Company’s Articles of Association was based on notarial deed No. 50 dated September 10, 2009 of Sutjipto, SH, notary public in Jakarta, concerning the change in the Company’s name from PT Polysindo Eka Perkasa Tbk to PT Asia Pacific Fibers Tbk. The deed was approved by the Minister of Justice and Human Rights of the Republic Indonesia based on his decision letter No. AHU-54294.AH.01.02.Tahun 2009 dated November 10, 2009 and the publishment in Supplement No. 21449 of State Gazette No. 77 dated September 24, 2010. On February 4, 2011, the Company obtains the approval from the Chairman of the Capital Investment Coordinating Board (BKPM) in his letter No. 2/B/II/PMDN/2011 with regard to the cancellation of approval from the Chairman of the Capital Investment Coordinating Board (BKPM) in his letter No. 249/II/PMDN.1997 dated December 2, 1997. Further, the Company has received the approval of the Chairman of the Capital Investment Coordinating Board (BKPM) for the expansion of the Fibre capacity in Karawang side through the approval letter No. 2/B/II/PMDN/2011 dated February 24, 2011. This project is scheduled to begin in the second quarter of 2012. In accordance with Article 3 of the Company’s Articles of Association, the scope of the Company’s activities are mainly to engage in the manufacturing of chemical and synthetic fiber, weaving and knitting, and other activities related to the textile industry. The Company is domiciled in Kendal, Central Java with its plants located in Kendal, Central Java and Karawang, West Java. The Company’s representative office is located at East Building, 35th Floor, Jl. Lingkar Mega Kuningan Kav. E-3 No. 1, Jakarta. The Company started its commercial operations in 1986. The Company’s products are marketed both domestically and internationally, including Europe, United States of America, Asia, Australia and the Middle East.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
10
1. G E N E R A L (Continued) a. Establishment and General Information (Continued)
The Company has many ongoing social activities in the local environs of its two plant location in Semarang and Karawang which the purpose of this activity is to improve the livelihood of the surrounding communities. In order to carry out these programes more effectively, the Company has established a foundation, “Yayasan Asia Pacific Fibre” on January 15, 2010. The deed was approved by the Minister of Justice and Human Rights of the Republic Indonesia based on decision letter No. AHU-960.AH.01.04.Tahun 2010 dated March 15, 2010.
b. Public Offering of Shares, Notes Payable of the Company and its Subsidiaries
• On December 14, 1990, the Company offered 12,000,000 shares to the public through the Jakarta and Surabaya Stock Exchanges, now known as Indonesian Stock Exchange.
• On October 8, 1993, the Company obtained the notice of effectivity from the Chairman of the Capital Market Supervisory Agency (BAPEPAM), in his letter No. S-1738/PM/1993, for its limited offering of 184,000,000 shares through rights issue with preemptive rights to stockholders. These shares were listed in the Jakarta and Surabaya Stock Exchanges on November 1, 1993.
• On December 15, 1994, the Company obtained the notice of effectivity from the Chairman of BAPEPAM, in his decision letter No. S-2027/PM/1994, for the change of par value from Rp 1,000 to Rp 500 per share.
• On May 20, 1996, the Company obtained the notice of effectivity from the Chairman of BAPEPAM, in his decision letter No. S-778/PM/1996, for its offering of 1,104,000,000 shares through rights issue II with preemptive rights to stockholders. These shares were listed in the Jakarta and Surabaya Stock Exchanges on June 10, 1996.
• On December 11, 1997, the Company obtained the notice of effectivity from the Chairman of BAPEPAM, in his decision leter No. S-2844/PM/1997, for its offering of 2,185,920,000 shares through rights issue III with preemptive rights to stockholders. These shares were listed in the Jakarta and Surabaya Stock Exchanges on January 5, 1998.
• In 1994, the Company issued US$ 125,000,000 Unsecured Senior Notes which are listed in Luxembourg. In 1996, the Company offered to the holders of the said unsecured notes to exchange their notes with US$ 125,000,000 Guaranteed Senior Notes issued by PIFC with the Company as the guarantor. These notes were listed in the Luxembourg Stock Exchange.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
11
1. G E N E R A L (Continued) b. Public Offering of Shares, Notes Payable of the Company and its Subsidiaries (Continued)
• In 1996, PIFC, with the Company as a guarantor, also issued US$ 50,000,000 Secured Floating Rate Notes and US$ 260,000,000 Guaranteed Secured Notes which were listed in the Luxembourg Stock Exchange.
• In 1997, PIFC, with the Company as a guarantor, issued US$ 250,000,000 Guaranteed Secured Notes which were listed in the Luxembourg Stock Exchange.
• Prior to January 2000, the above notes issued by PIFC were delisted from Luxembourg Stock Exchange.
• Beginning December 2004, all of the Company’s outstanding shares totaling 4,393,920,000 shares were suspended regarding the the bankruptcy proceeding against the Company and delay in submitting the required consolidated financial statements. The Company’s shares were still suspended after the Company remove their bankruptcy. However, the Company took efforts to remove its suspension which includes submitting Company’s future plan of actions. Further in July 2006, all of the Company’s shares resumed trading.
• In 2006, The Company converted the unsecured debt amounted to 43,144,238,750 shares as part of the implementation of Composition Plan which have been approved and ratified by the Commercial Court. Based on the condition issued by Indonesian Stock Exchange, the new shares can not be traded for 1 (one) year. Further in October 2007, the new Company’s shares were traded.
• Based on the Extraordinary General Stockholders Meeting (RUPSLB) held on February 21, 2008, the stockholders approved the reverse stock split (split down) with a ratio of 20:1 wherein 20 old shares will become 1 new share. Reverse stock splits are conducted for the Company’s shares to be more liquid and in line with the Company’s performance. Due to the changes in the Company’s number of shares and par value, the Company amended its Articles of Association and the notarial deed regarding the changes of the Company’s Article of Association had been approved by the Minister of Justice and Human Rights on March 3, 2008.
• Further, based on the notarial deed of Sutjipto, SH, No. 122 dated February 27, 2008 regarding shares purchase as the result of reverse stock split named PT Trimegah Securities Tbk as “Stand by Buyer”. In addition, all shares from reverse stock were traded on March 14, 2008.
• On October 10, 2008, the Subsidiary’s shares (PT Texmaco Jaya Tbk) have been delisted from the Indonesian Stock Exchange based on its letter No. S-04741/BEI.PSR/09/2008 and Peng-004/BEI.PSR/DEL/09-2008 due to the suspension of the trading shares and going concern problem of the Subsidiary.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
12
1. G E N E R A L (Continued) b. Public Offering of Shares, Notes Payable of the Company and its Subsidiaries (Continued)
• Based on the Extraordinary General Stockholders Meeting (RUPSLB) held on March 24, 2009 and based on notarial deed No. 91 dated March 24, 2009 of Sutjipto, SH, notary in Jakarta, the stockholders approved the issuance of 118,845,397 new authorized shares series C (5% of issued and paid-up capital) without preemptive rights, for providing stock options to the Company’s management and employees (Management Employee Stock Option Programme / MESOP). The notarial deed was approved by the Minister of Justice of the Republic of Indonesia based on his decision letter No. AHU-0052619.AH.01.09.Tahun 2009 dated August 14, 2009. As per the Company’s schedule that was reported to Indonesian Stock Exchange dated March 17, 2009, its programe will be implemented at the latest period (February 1, 2012). Further, based on the notarial deed No. 107 dated February 23, 2012 of Aryanti Artisari, S.H., M.Kn., notary in Jakarta, the Management Employee Stock Option Programme / MESOP) has been implemented with the execution price of Rp 45 each. All shares under MESOP have been fully paid up through the Company’s bank accounts dated February 20 and 21, 2012. It has been registered in the Indonesian Stock Exchange through announcement No. Peng-P-00032/BEI.PPR/03-2012 dated March 5, 2012 and No. Peng-P-00033/BEI.PPR/03-2012 dated March 7, 2012.
• Since December 2, 2009, the Company’s shares in the Indonesian Stock Exchange have been changed with the new Company’s name.
c. Consolidated Subsidiaries
The Company has ownership interest of more than 50%, directly or indirectly, in the following subsidiaries :
Commercial Percentage of Total Assets
Subsidiaries Domicile Nature of Business Operations Ownership 2011 2010
% Rp Rp
(in million) (in million)
PT Texmaco Jaya Tbk (TJ) Karawang Trading, weaving,
knitting and
processing
1972 92.00 *) 228,735
PT Texmaco Graha Busana Trading of textile and 1994 91.08 *) 167
(TGB)-99% owned by TJ Jakarta producing ready to wear garments and
accessories
Polysindo International
Finance Company BV. (PIFC)
Netherlands Financial services 1994 100.00 6,884,590 6,826,131
Polysindo (Mauritius) Ltd.
(PML)
Republic of
Mauritius
Financial services Pre-
operating
100.00 – –
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
13
1. G E N E R A L (Continued) c. Consolidated Subsidiaries (Continued)
*) Not applicable due to PT Texmaco Jaya Tbk (TJ) and PT Texmaco Graha Busana (TGB)
deconsolidation (Note 46).
• In 2001, the Company acquired 10,000 shares which represent 100% ownership in Polysindo (Mauritius) Ltd. The shares were acquired for the amount of US$ 10,000. The difference between the acquisition cost and the net assets of PML amounted to Rp 221,924,188 was recorded as “difference on restructuring among companies under common control” account as part of the other components equity in the consolidated statements of financial position.
• There were no transactions between the Company and Polysindo (Maurutius) Ltd and Polysindo International Finance Company BV. during 2011 and 2010. The Company intends to close the operation of its subsidiaries along with the restructure of the Company.
• Since April 2008, PT Texmaco Jaya Tbk (TJ) operations (Fleece division) are conducted by the Company with tolling basis.
• Since the second semester of 2004, PT Texmaco Graha Busana has halted its business operations.
• The Company’s immediate parent Company is Damiano Investments BV., incorporated in Netherland.
d. Employees, Directors and Commissioners
• The members of the Company’s board of commissioners and directors as of December 31, 2011 and 2010 are as follows : 2 0 1 1 2 0 1 0
Board of Commissioners :
President Commissioner : Mr. Robert Clive Appleby : Mr. Robert Clive Appleby
Independent Commissioners : Mr. Dono Iskandar Djojosubroto : Mr. Dono Iskandar Djojosubroto Mr. Timbul Thomas Lubis SH Mr. Timbul Thomas Lubis SH
Commissioners : Mr. Antonitris : Mr. Antonitris
Mr. Christopher Robert Botsford Mr. Christopher Robert Botsford
Mr. Robert Mc Carthy Mr. Robert Mc Carthy
Board of Directors :
President Director : Mr. Vasudevan Ravi Shankar : Mr. Vasudevan Ravi Shankar
Directors : Mr. Masjhud Ali : Mr. Masjhud Ali
Mr. Seeniappa Jegatheesan Mr. Seeniappa Jegatheesan Mr. Peter Vinzenz Merkle Mr. Peter Stanley Grant
Mr. Peter Vinzenz Merkle
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
14
1. G E N E R A L (Continued) d. Employees, Directors and Commissioners (Continued)
Mr. Peter Stanley Grant, one of the Directors of the Company, resigned from the Board of Directors based on the resolution passed at the Extraordinary Shareholder’s Meeting held on February 10, 2011.
• Audit Committee is appointed based on BAPEPAM regulation No. IX.1.5 regarding the forming and work guidance audit committee to comply with BAPEPAM-LK regulation Board of Commissioners has formed Audit Committee. The members of the Company’s Audit Committee as of December 31, 2011 and 2010 are as follows : Chairman : Mr. Timbul Thomas Lubis, SH Member : Mr. Drs. Heroe Pramono
Mr. Djati Suara
• The Company’s corporate secretary as of December 31, 2011 and 2010 is Mr. Tunaryo.
• In February 2009, the Company formed an internal audit department based on BAPEPAM-LK regulation. The head of internal audit is Mr. Yohanes Baptis Galuh Adjar Pamungkas.
• The total number of the Company’s permanent employees as of December 31, 2011 and 2010 were 3,366 and 3,158 persons, respectively (unaudited). As of December 31, 2011 and 2010, the Subsidiary’s permanent employees were Nil and 238 persons, respectively (unaudited).
• Compensation representing salary was given to Commissioners and Directors for the years ended December 31, 2011 and 2010 amounted to Rp 5,182,030,423 and Rp 6,216,295,241, respectively. No contribution to retirement benefits, entitlement benefits and any other special benefits were given during the year 2011 and 2010.
2. GOING CONCERN, DEBT RESTRUCTURING AND ECONOMIC CONDITIONS a. Going Concern
The buoyancy in the Polyester Industry which began in the year 2010 continued though the third quarter of 2011. The two main factors for the strong performance of the Company in 2011 were the demand for PTA remained high and high selling price realization for its finished goods as cotton was in short supplies during this period.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
15
2. GOING CONCERN, DEBT RESTRUCTURING AND ECONOMIC CONDITIONS (Continued) a. Going Concern (Continued)
The Company benefitted most by producing PTA in this period. The raw material, Paraxylene and MEG prices spiked in 2011 from 2010 levels considerably. The domestic market growth of polyester exceeded industry forecast in 2011. This was mainly due to shortage of cotton on account of low crops in 2010 and the resultant very high price of cotton. The Company operated its plant to its near full capacity. The Company has also initiated further capital expenditure programme of around US$ 17 million during 2011 for increase the volume staple fiber to take advantage of growth in the spun yarn industry and filament yarn and also value added products. Some of the projects initiated in the previous year have come on stream and are yielding the desired results. Damiano Investments BV., Netherland has been providing the requisite funds for the above mentioned capital expenditure through Third Loan Agreement. With the spurt in the selling price and the savings in the costs levels in 2011, the Company could achieve a sales turnover of around US$ 634 million and cash profit of around US$ 78 million registering a growth of over 30% in the sales revenue and higher Cash profits over 2010 levels. The working capital applications have also increased significantly with the increased sales revenue and higher raw material price levels. Damiano Investments BV., Netherland continued to support the Company with the letter of credit working capital of around US$ 80 million. Though the Company continued with the prefinance facility for bridging the high procurement levels, it could successfully eliminate the high cost source of pre-finance. As the working capital remained tight, Company sought and received the approval of its unsecured creditors for the capitalization of the interest due on the New Notes. Damiano Investments BV., Netherland has also charged a reasonable fee on the letter of credit facility provided by them for the year 2011 (18%). The demand for polyester products is expected to remain strong in the near future. However, with the easing of price of cotton from the last quarter of 2011, the margin levels for the polyester fiber will come under pressure and remain at the normal levels in the future. From the second quarter of 2012, the fiber expansion is expected to come on stream and barring unforeseen circumstances, the Company is expected to perform well in the year 2012 with the continued support of its majority shareholders and with the buoyant market conditions.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
16
2. GOING CONCERN, DEBT RESTRUCTURING AND ECONOMIC CONDITIONS (Continued) a. Going Concern (Continued)
Until March 2012, the Secured Debt Restructuring Plan (SDRP) is not approved by, particularly by PT Persusahaan Pegelola Asset (PPA) which owned about 28% of the total secured debt as some of the terms under the SDRP are not agreed by PPA. The Company and its majority stake holders continue to request PT PPA for its consent to the restructuring of its secured debt. Upon completion of this restructuring, and the consequent reorganization of its consolidated statements of financial position, the Company is confident of securing a formal working capital lending from a conventional banking sources. The major terms of the Secured Debt Restructuring Plan (SDRP) are as follows: Proposed Restructuring Date July 1, 2007 Interest on New Notes Interest shall be payable on the New Notes quarterly in arrears and
calculated on the outstanding principal amount of the New Notes during the quarter at the per annum rates shown in the table below :
Yr1 Yr2 Yr3 Yr4 Yr5 Yr6 Yr7 Yr8 Yr9 0.0% 2.0% 2.0% 2.0% 4.0% 4.0% 4.0% 4.0% 4.0%
Amortisation Principal repayment shall be made at the end of each 12-month period
beginning on the fourth anniversary of the Restructuring Date. The amount payable shall be equal to the percentages of the restructured principal amount shown in the table below:
Yr1 Yr2 Yr3 Yr4 Yr5 Yr6 Yr7 Yr8 Yr9 0% 0% 0% 5.0% 17.5% 17.5% 17.5% 20.0% 22.5%
Debt Restructuring New Secured Notes will be exchanged at 10.73 Cents per US$ 1.
40.90% of the expanded equity will be allotted to the Secured Creditors as per the Debt /Equity swap indicated in the SDRP
In addition, the Company and its Subsidiaries’ consolidated financial condition in 2011 showed the following :
• Total comprehensive income amounting to Rp 610,156,281,931. In total comprehensive income includes unrealized loss on foreign exchange transactions from continuing operations of Rp 74,570,901,424 and unrealized gain on foreign exchange transactions from discountinued operations of Rp 23,295,545,656.
• Negative working capital amounting to Rp 8,485,800,601,623.
• Capital deficiency amounting to Rp 7,342,046,634,232.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
17
2. GOING CONCERN, DEBT RESTRUCTURING AND ECONOMIC CONDITIONS (Continued) a. Going Concern (Continued)
Subsidiary’s Operations (PT Texmaco Jaya Tbk): On October 20, 2010, PT Hanil Bakrie Finance Company submitted its bankruptcy proposal at the Central Jakarta’s Commercial Court (Pengadilan Niaga Jakarta Pusat) with registered No. 71/PAILIT/2010/PN. NIAGA.JKT.PST due to non fulfillment of the obligation by PT Texmaco Jaya Tbk based on the Sale and Purchase Agreement which is stated in notarial deed No. 2 dated January 6, 2003. Accordingly the outstanding amount of US$ 1.68 million is repayable before February 15, 2007. Between 2004 up to 2008, PT Texmaco Jaya Tbk had repaid amounting to US$ 0.71 million and the balance is still outstanding. However up to now, PT Texmaco Jaya Tbk has not fulfilled its obligation. On November 15, 2010, PT Texmaco Jaya Tbk has applied for Suspension of Payment (PKPU) to the Commercial Court in order to present a Peace Plan for the restructure of its loans. Commercial Court in its decision letter No. W10/U1/10507.Pdt.02.XI.2010.03 dated November 24, 2010 to granted the request for Suspension of Payment (“PKPU”) providing the temporary postponement of debt obligation payment (“PKPUS”) for 45 days, commencing on November 24, 2010. With the approval of its creditors, the court further granted extension of time for a period of 180 days time (up to end June 2011) to PT Texmaco Jaya Tbk to submit the final Peace Plan to its creditors. During the period, PT Texmaco Jaya Tbk identified and held negotiations with the prospective investors to support and participate in the peace plan proposed by the Subsidiary. Despite prolonged negotiations with several investors, none of them came forward with a commitment to invest in PT Texmaco Jaya Tbk and bail out the Subsidiary from bankruptcy. In the absence of any investor, PT Texmaco Jaya Tbk could not finalize the composition plan within the time stipulated by the Court. Consequent to this, the Commercial Court of Jakarta declared PT Texmaco Jaya Tbk bankrupt on pursuant to section 230 (1) and 285 (3) of the Indonesian Bankruptcy law 37 0f 2004 and delivered its verdict on 19th August 2004 as per Court order 10/PKPU/2010/PN.NIAGA.JKT.PST. Jo No: 71/PAILIT/2010/PN.NIAGA.JKT.PST. The Court also appointed Dr. MARSUDIN NAINGGOLAN as the supervisory Judge and a team of Receivers (Curators) to monitor and enforce the liquidation process as per the law. Subsequently, the Curators had conducted debt verification and registration process as per the provisions of the law and the final registered debt is as follows:
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
18
2. GOING CONCERN, DEBT RESTRUCTURING AND ECONOMIC CONDITIONS (Continued) a. Going Concern (Continued)
Subsidiary’s Operations (PT Texmaco Jaya Tbk) (Continued) :
Sl No Details Amounts in Rupiah No of Creditors
1 Preferred Creditors 15,478,161,747.06 4
2 Secured Creditors 602,914,924,862.14 3
3 Unsecured Creditors 1,515,354,797,944.92 47
Total 2,133,747,884,554.12 54
Subsequent to completion of debt verification, the Court had declared PT Texmaco Jaya Tbk insolvent and ordered liquidation of the bankrupt estate – vide Court order no 71/PAILIT/2010/PN.NIAGA.JKT.PST dated September 26, 2011. As the Fleece division was still operating under tolling arrangement by its parent Company (PT Asia Pacific Fibers Tbk), the Court had approved continued operation of fleece division at Karawang with a view to maintain the value of the bankrupt assets. The operation and the cash flow of PT Texmaco Jaya are monitored by the team of receivers appointed by the Court. Accordingly, the Company continues to operate the fleece division through Tolling/Rental Agreement. The accompanying consolidated financial statements have been prepared on a going concern basis, and do not include any adjustment that might result from the outcome of these uncertainties. Related effects will be reported in the consolidated financial statements as they become known and can be estimated. To date, the Company, in running its operations is supported through the letter of credit facility and other working capital loans from Damiano Investments BV., Netherland and through the confidence and support of its suppliers and customers. In addition, Damiano Investments BV., Netherlands confirmed that it will provide the assistance to the Company in obtaining letter of credit facilities until such time that the Company can secure a credit facility from banks on its own. Damiano Investments BV., Netherland has also provided the requisite funds for the Company’s capital expenses programmes in 2010 through its Third Loan Agreement. The bankruptcy / liquidation of PT Texmaco Jaya Tbk will have little impact on the operations of PT Asia Pacific Fibers Tbk now as the operations of PT Texmaco Jaya Tbk had stopped since year 2004. Moreover, PT Asia Pacific Fibers Tbk has no obligations to the creditors of PT Texmaco Jaya Tbk.
b. Debt Restructuring
The following are the salient features of the “Unsecured Restructure Proposal” of the Company:
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
19
2. GOING CONCERN, DEBT RESTRUCTURING AND ECONOMIC CONDITIONS (Continued) b. Debt Restructuring (Continued)
(i) New Principal amount to be restructured to 2.961%.
(ii) Interest and penalty will be waived.
(iii) The restructured principal amount will be repaid over a period of 9 years.
(iv) The unsecured creditors will get on equity ownership of 19.2% of diluted equity shares of the Company.
(v) The rate of interest will be 2% p.a. progressing to 4% p.a. The Company has executed the restructuring agreement with the unsecured creditors as approved by the Creditors and ratified by the Court. Accordingly, the total unsecured loans after the restructuring stands at US$ 18,670,630 plus unpaid capitalized interest for 2011 of US$ 3,274,381 or amounted to US$ 21,945,011. The Company has also submitted restructuring proposal to the secured creditors (SDRP). Further, in March 2007, the Company reissued the SDRP proposal to all of its secured creditors, including PPA, as the earlier SDRP proposal has time barred. However, no response has been received from PPA on the proposal. The proposal has the support of Damiano Investment BV., Netherland, the majority holder of the other secured debts of the Company. The Company has taken all the required corporate actions towards the implementation of the Composition Plan (“Peace Plan”) as approved by the unsecured creditors of the Company and ratified by the Commercial Court. The steps involve the issuance of the new debts secured or unsecured in exchange of the old unsecured debts and issuance of shares for the reduction of the principal amount of debts as per the terms of the Composition Plan. The Company has reduced its unsecured debts as per the Composition Plan and increased its share capital as additional capital pending allotment to the creditors. The Company has appointed The Hongkong and Shanghai Banking Corporation Limited, Hong Kong to act as its Fiscal Agent, Paying Agent and Trustees for its new unsecured notes which are eurocleared. In January 2012, the Company also sought and got the approval of its Unsecured New Note Holders for the extension of its maturity from February 2012 to February 2015. PT Perusahaan Pengelola Asset (PPA) announced a sale programme of Texmaco Group assets and shares, including that of the Semarang site of Company and Subsidiary (TJ), in December 2010. However the programme was later cancelled and called off. PT Asia Pacific Fibers Tbk has been in active discussion with PPA for the restructure of the Company and awaiting their response of PPA in this regard.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
20
2. GOING CONCERN, DEBT RESTRUCTURING AND ECONOMIC CONDITIONS (Continued) c. Economic Condition
Indonesia’s economy grew in 2011 at its fastest pace since the 1997-1998 Asian crisiss, with the country’s vast domestic market helping to shield it from the global economic turmoil battering its more export-oriented neighbours. The GDP expanded 6.5% in 2011, affirming Indonesia’s position as one of Asia’s fastest-growing economies and highlighting its appeal to its investors. Foreign Direct Investment grew 20% to a record level of US$ 20 billion in 2011 indicating the investors’ confidence in the country. FDI is likely to remain robust over the medium term after Moody’s Investors Service and Fitch Ratings recently upgraded Indonesia’s credit rating to investment grade. With inflation reasonably under check and the strong rupiah vis-à-vis US$ will leave the general public with a reasonable disposable income which can boost the domestic consumption. Indonesian exports in 2011 grew substantially to US$ 203.6 billion as compared to US$ 157.8 billion in 2010. The main non oil contributors are CPO followed by rubber, textiles and electronic. The rupiah remained strong throughout 2011 and closed at Rp. 9,068 per US$ as compared to Rp 8,991 per US$ as at December 2010. There are indications that the fuel and power costs are slated to increase in 2012 which will trigger the inflationary trend. These increases will also affect adversely the margins of the company. The other major economies in Asian region-India and China have already downsized its GDP growth estimated for 2012 with slowing down of these economies. The financial crisis in EU Zone will also impact all Asian economies.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The significant accounting policies that have been used by the Company and its Subsidiaries in the preparation of these consolidated financial statements are summarized in subsequent paragraphs. a. Basis of Preparation of Consolidated Financial Statements
The Company and its Subsidiaries’ consolidated financial statements have been prepared in accordance with the Indonesian Financial Accounting Standards (“PSAK”) and its interpretations (“ISAK”) established by the Indonesian Institute of Accountants (IIA), Regulation No. VIII G.7 of BAPEPAM AND LK regarding the Guidelines on Presentation of Financial Statements included in Appendix of the Decree of the Chairman of the Capital Market and Financial Institutions Supervisory Agency (Bapepam-LK) No. KEP-06/PM/2000 dated March 13, 2010 and the Circular Letter No. SE-02/PM/2002 regarding Guidelines on Presentation and Disclosures of Financial Statements for Publicly Listed Manufacturing Companies and the Decision Letter No. KEP-554/BL/2010 regarding the changes of the Regulation No. VIII.G.7.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
21
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) a. Basis of Preparation of Consolidated Financial Statements (Continued)
The Company and its Subsidiaries’ consolidated financial statements are in compliance with the applicable PSAK without exception. The Company and its Subsidiaries’ consolidated financial statements for the year ended December 31, 2011 have been prepared in accordance with PSAK No. 1 (Revised 2009), “Presentation of
Financial Statements”. In accordance with PSAK No. 1 (Revised 2009), the consolidated statements of comprehensive income has been presented in these consolidated financial statements. The Company and its Subsidiaries have been elected to present all items of income and expense in the single statement. As of December 31, 2010 and January of 1, 2010, the non-controlling interests of Rp 141,161,474,525 and Rp 141,298,433,597, respectively have been reclassified as part of the equity. Accordingly, the consolidated statements of financial position of the Company and its Subsidiaries as of December 31, 2010 and January 1, 2010 have been restated. As of August 19, 2011, the Commercial Court had declared that the Subsidiary (PT Texmaco Jaya Tbk) is bankruptcy and insolvency effective on September 26, 2011. Effective this period, the Subsidiary becomes subject to the control of the Court, and causing the Company loss its controls. Consequently, the total comprehensive income from Subsidiary up to August 19, 2011 is classified as “Discountinued Operations” and the outstanding of non-controlling interests balance from Subsidiary of Rp 140,217,500,266 has been written-off from the consolidated statements of financial position and adjusted into retained earnings (accumulated deficit). In relation to the PSAK No. 4 (Revised 2009), “Consolidated and Separate Financial
Statements”, the Company has measured investment in subsidiaries using cost method, which were previously accounted for using equity method. The Company and its Subsidiaries’ consolidated financial statements have been prepared on the historical cost basis of accounting, except for the certain accounts are prepared based on the other measurement that are more fully described in the accounting policies below. The consolidated financial statements are prepared under the accrual basis of accounting, except for the consolidated statements of cash flows. The consolidated statements of cash flows have been prepared using the direct method, present receipts and disbursements of cash and cash equivalents classified operating, investing and financing activities. The reporting currency used in the preparation of these consolidated financial statements is Indonesian Rupiah. All figures presented in the notes to the Company and its Subsidiaries’ consolidated financial statements are expressed in fully Rupiah amounts, unless otherwise stated.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
22
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) b. Principles of Consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries). Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The results of subsidiaries acquired or disposed of during the year are included in the consolidated statements of comprehensive income from the effective date of acquisition and up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of the subsidiaries to bring the accounting policies used in line with those used by the Company. All intra-group transactions, balances, income and expenses are eliminated on consolidation. Non-controlling interests in subsidiaries are identified separately and presented within equity. Effective January 1, 2011, the interest of non-controlling shareholders maybe initially measured either at fair value or at the non-controlling interests’ proportionate share of the fair value of the acquiree’s identifiable net asset. The choice of measurement is made on acquisition by acquisition basis. Subsequent to acquisition, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus non-controlling interests’ share of subsequent changes in equity. Total comprehensive income is attributed to non-controlling interests even if this results in the non-controlling interests having a deficit balance. Previously, the non-controlling interest is measured on initial recognition at the non-controlling interests’ proportionate share in the historical cost of the identifiable net assets of the acquiree. Where the losses applicable to the non-controlling interests exceed their interest in the equity of the subsidiary, the excess and any further losses attributable to the non-controlling interest are charged against the majority interest except to the extent that the non-controlling interest has a binding obligation to, and is able to, make good the losses. Changes of the Company interests in subsidiaries that do not result in a loss of control are accounted for as equity transactions. The carrying amounts of the Company and its subsidiaries interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributable to owners of the Company. According to PSAK No. 4 (Revised 2009), when the Company losses control of a Subsidiary, the Company should derecognizes the assets (including any goodwill) and liabilities of the Subsidiary at their carrying amount at the date when the control is lost. Also, derecognizes the carrying amount of any non-controlling interests in the former Subsidiary at the date when control is lost (including any component of other comprehensive income attributable to them).
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
23
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) b. Principles of Consolidation (Continued)
The Company has carried forward and opted to present as a separate item within equity, the remaining balance related to the effect of prior year’s capital transactions of the subsidiary with third parties.
c. Foreign Currency Transaction and Balances The Company and its Subsidiaries’ books and records are maintained in Indonesian Rupiah. Transactions involving foreign currencies are recorded at the rates of exchange prevailing at the date of the transactions. Monetary assets and liabilities denominated in foreign currencies at consolidated statements of financial position date are translated into Rupiah at the middle rate of Bank Indonesia at that date as follows : Foreign currency December 31, 2011 December 31, 2010 Rp Rp US$ 1 9,068 8,991 JPY 1 117 110 HKD 1 1,167 1,155 NOK 1 1,313 1,330 CHF 1 9,636 9,600 SGD 1 6,974 6,981 GBP 1 13,969 13,894 EUR 1 11,739 11,956 Gains or losses arising from foreign exchange transactions are credited or charged to the consolidated statements of comprehensive income in the current period. The financial statements of Subsidiaries domiciled outside of Indonesia, i.e. PIFC and PML, maintain their accounting records in US Dollar. For consolidation purposes, the financial statements of foreign domiciled subsidiaries are translated into Rupiah as follows :
• Accounts in the Statements of financial position, except for equity accounts, are translated at the exchange rate as of the consolidated statements of financial position date.
• Profit and loss items are translated at the average rates of exchange for the year. The difference resulting from translation is presented net of tax as part of other comprehensive income in the consolidated statements of comprehensive income.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
24
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) d. Transactions with Related Parties
The Company and its Subsidiaries enters into transactions with related parties as defined in PSAK 7 (Revised 2010) “Related Party Disclosure”. Related party is principally defined as follows: (i) A person or a close member of that person’s family is related to a reporting entity if that
person :
• Has control or joint control over the reporting entity ;
• Has significant influence over the reporting entity ; or
• Is a member of the key management personnel of the reporting entity or of a parent of reporting entity.
(ii) An entity is related to a reporting entity if any of the following conditions applies :
• The entity and the reporting entity are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others).
• One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member).
• Both entities are joint ventures of the same third party.
• One entity is a joint venture of a third entity and the other entity is an associate of the third entity.
• The entity is a post-employment defined benefit plan for the benefit of employees of either the reporting entity or an entity related to the reporting entity. If the reporting entity is itself such a plan, the sponsoring employers are also related to the reporting entity.
• The entity is controlled or jointly controlled by a person identified in (i).
• A person identified in (i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity).
All significant transactions and balances with related parties, whether or not conducted under normal terms and conditions similar to those with third parties are disclosed in Note 47.
e. New Accounting Standards to Existing Standards
In 2011, the Company and its Subsidiary adopted for the first time the following revised accounting standards which are mandatory for accounting periods beginning on or after January 1, 2011 :
PSAK 1 (Revised 2009) : Presentation of Financial Statements PSAK 2 (Revised 2009) : Statements of Cash Flows PSAK 3 (Revised 2010) : Interim Financial Reporting PSAK 4 (Revised 2009) : Consolidated and Separate Financial Statements PSAK 5 (Revised 2009) : Operating Segments PSAK 7 (Revised 2010) : Related Party Disclosures PSAK 8 (Revised 2010) : Events After the Reporting Period
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
25
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) e. New Accounting Standards to Existing Standards (Continued)
PSAK 23 (Revised 2010) : Revenue PSAK 25 (Revised 2009) : Accounting Policies, Changes in Accounting Estimates and
Errors PSAK 48 (Revised 2009) : Impairment of Assets PSAK 57 (Revised 2009) : Provisions, Contingent Liabilities and Contingent Assets PSAK 58 (Revised 2009 : Non Current Assets, Held for Sale and Discontinued
Operations. Discussed below are the impacts on the consolidated financial statements of these revised accounting standards. (i) PSAK 1 (Revised 2009) : Presentation of Financial Statements. PSAK 1 regulates
presentation of consolidated financial statements that is among others, the objective, component of consolidated financial statements, characteristic of consolidated financial statements, such as, fair presentation and compliance with PSAK, going concern, accrual basis, materiality and aggregate, offseting, reporting frequency, comparative information, and consistency. Also introduces new disclosures such as, among others, judgments and estimations, capital management, other comprehensive income, departures from accounting standards and other disclosures.
(ii) PSAK 2 (Revised 2009) : Statements of Cash Flows. PSAK 2 requires the provision for
information about the historical changes in cash and cash equivalents of an entity by mean of a consolidated statements of cash flows which classified as a cash flow during the period from operating, investing and financing activities. Also, this standard requires to present the effect of net foreign exchange differences from cash and cash equivalent separately from operating, investing and financing activities. Further, the entity are also recommended to prepare the consolidated statements of cash flows using the direct method.
(iii) PSAK 3 (Revised 2010) : Interim Financial Reporting. PSAK 3 prescribes minimum
presentation of interim financial statements, and also the principles of recognition and measurement in the full set or condensed set interim consolidated financial statements. When a full set of consolidated financial statements are presented in the interim financial report, the form and content of those interim consolidated financial statements is required to conform to the requirement of PSAK 1 for a complete set of consolidated financial statements.
(iv) PSAK 4 (Revised 2009) : Consolidated and Separate Financial Statements. PSAK 4
requires when the Company publish a consolidated financial statements, so the parent Company presents its financial statements as the supplementary information in the consolidated financial statements, and parent Company’s investment in subsidiary is accounted for using the cost method.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
26
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) e. New Accounting Standards to Existing Standards (Continued)
(v) PSAK 5 (Revised 2009) : Operating Segments. PSAK 5 requires the entities to disclose the
information that enables for users of consolidated financial statements to evaluate the nature and impact of consolidated financial statements and its effects to business activities. Standard also improve the definition of operating segments and the procedures used to identify and report the operating segments. Standard requires the "management approach" that used in the presentation of segment information using the same base as well as in the internal reporting. It is not cause the additional presentation of the reported segment. The operating segment was reported in consistent with the internal reporting provided to operational decision-makers. In this case, the operational decision-makers are Board of Directors
(vi) PSAK 7 (Revised 2010) : Related Party Disclosures. PSAK 7 requires disclosure of related
party relationships, transactions and outstanding balances including commitments, in the consolidated financial statements. Standard also provide an explanation that members of key management personnel is a related party, thereby necessitating disclosures of key management personnel compensation for each category.
(vii) PSAK 8 (Revised 2010) : Events After the Reporting Period. PSAK 8 is to prescribe when
an entity should adjust its consolidated financial statements for events after the reporting period and the disclosures that an entity should give about the date when the consolidated financial statements were authorized for issue and about events after the reporting period. An entity should not prepare its consolidated financial statements on a going concern basis if events after the reporting period indicate that the going concern assumption is not appropriate.
(viii) PSAK 23 (Revised 2010) : Revenue. PSAK 23 identifies the circumtances in which the
criteria on revenue recognition will be met and, therefore, revenue may be recognized, and prescribes the accounting treatment of revenue arising from certain types of transactions and events, and also provides practival guidance on the application of the criteria on revenue recognition.
(ix) PSAK 25 (Revised 2009) : Accounting Policies, Changes in Accounting Estimates and
Errors. PSAK 25 prescribes the criteria for selecting and changing accounting policies, together with the treatment and disclosure of changing in accounting policies, changes in accounting estimates and correction of errors. This standard results in the inclusion of new disclosures in the notes to consolidated financial statements, such as the adoption of new and revised standards and interpretations.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
27
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) e. New Accounting Standards to Existing Standards (Continued)
(x) PSAK 48 (Revised 2009) : Impairment of Assets. PSAK 48 prescribes the procedures to be
employed by an entity to ensure that its assets are carried at no more than their recoverable amount. An asset is carried at more than its recoverable amount if its carrying amount exceeds the amount to be recovered through use or sale of the asset. If this is the case, the asset is describes as impaired and this revised PSAK requires the entity to recognize an impairment loss. This revised PSAK also specifies when an entity should reverse an impairment loss and prescribes disclosures.
(xi) PSAK 57 (Revised 2009) : Provisions, Contingent Liabilities and Contingent Assets. The
revised PSAK is applied prespectively and provides that appropriate recognition criteria and measurement bases are applied to provisions, contingent liabilities and contingent assets and to ensure that sufficient information is disclosed in the notes to the consolidated financial statements to enable users to understand the nature, timing and amount related to the informations. Provisions are recognized when the entity has a present obligation (legal or constructive) where, as a result of a post event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
(xii) PSAK 58 (Revised 2009) : Non Current Assets, Held for Sale and Discontinued Operations.
PSAK 58 is to prescribe when the entity intends to sell a non-current asset, and if sale within 12 months is highly probable, the asset is classified as “held for sale” and presented separately in the consolidated statements of financial position. Liabilities are classified as “held for sale” and presented as such in the consolidated statements of financial position if they are directly associated with a disposal group. Assets classified as”held for sale” are measured at the lower of their carrying amounts immediately prior to their classification as held for sale and their fair value less costs to sell. However, some “held for sale” assets such as financial assets or deferred tax assets, continue to be measured in accordance with the entity’s accounting policy for those assets. Any profit or loss arising from the sale or remeasurement of discontinued operations is presented in a single amount in the statements of comprehensive income. This amount, which comprises the post-tax profit or loss of discountinued operations and the post-tax gain or loss resulting from the measurement and disposal of assets classified as held for sale.
The adoption of the following revised standards and interpretations did not have any significant impact on the financial statements.
• PSAK 12 (Revised 2009) – Interests in Joint Venture.
• PSAK 15 (Revised 2009) – Investments in Associates.
• PSAK 19 (Revised 2010) – Intangible Assets.
• ISAK No. 7 – Consolidation – Special Purpose Entities.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
28
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) e. New Accounting Standards to Existing Standards (Continued)
• ISAK No. 9 – Changes in Existing Decommissioning, Restoration and Similar Liabilities.
• ISAK No. 10 – Customer Loyalty Programs.
• ISAK No. 11 – Distributions of Non-Cash Assets to Owners.
• ISAK No. 12 – Jointly Controlled Entities : Non-Monetary Contribution by owners.
• ISAK No. 14 – Intangible Assets – Web site Cost.
• ISAK No. 17 – Interim Financial Reporting and Impairment
f. Financial Instruments
Effective January 1, 2010, the Company and its Subsidiaries’ adopted the PSAK 50 (Revised 2006), Financial Instruments : Presentation and Disclosures and PSAK 55 (Revised 2006), Financial Instruments : Recognition and Measurement. Discussed below are the impacts on the consolidated financial statements of these revised accounting standards. (i) PSAK 26 (Revised 2008), Borrowing Costs, which contains the accounting treatment for
borrowing costs and requires the entity to capitalize borrowing costs directly attributable to the acquisition, construction of qualifying assets as part of the cost of that asset. This standard also requires entities to recognize other borrowing costs as an expense. This standard had no impact on the consolidated financial statements since it is the Company and its Subsidiaries’ policy to capitalize interest on qualifying assets.
(ii) PSAK 50 (Revised 2006), Financial Instruments: Presentation and Disclosure. PSAK 50 is
intended to enhance consolidated financial statements users’ understanding of the significance of financial instruments to the entity’s financial position, performance and cash flows. These standards addresses this in the following ways: a. Clarifying the classification of a financial instrument issued by an enterprise as a liability
or as equity - Financial instruments are classified, from the perspective of the issuer, as financial assets, financial liabilities and equity instruments. Compound financial instruments may contain both a liability and an equity component.
Interest, dividends, losses and gains relating to financial liabilities are recognized as income or expense in consolidated statements of comprehensive income. Distributions to holders of equity instruments are debited directly to equity, net of any related income tax benefit.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
29
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) f. Financial Instruments (Continued)
b. Prescribing strict conditions under which assets and liabilities may be offset in the
statements of financial position - Financial assets and financial liabilities are offset when and only when there is a legally enforceable right to set off and the entity intends to settle on a net basis.
c. Requiring a broad range of disclosures about financial instruments, including
information as to their fair values – PSAK 50 requires disclosure about factors that affect the amount, timing and certainty of an entity and subsidiaries’ future cash flows relating to financial instruments and the accounting policies applied to those instruments. It also requires disclosure about the nature and extent of an entity’s use of financial instruments, the business purposes they serve, the risks associated with them, and management’s policies for controlling those risks.
(iii) PSAK 55 (Revised 2006), Financial Instruments: Recognition and Measurement. PSAK 55
prescribes principles for recognizing and measuring the different types of financial instruments. � Recognition – PSAK 55 requires that all financial assets and all financial liabilities be
recognized in the consolidated statements of financial position, including derivatives. A financial asset or liability is recognized when the entity becomes a party to the instrument contract.
� Measurement – Financial assets and liabilities are initially recognized at cost. Subsequent
measurement depends on the category of the financial instrument. It can be measured either at amortized cost using the effective interest method or at fair value. If there is objective evidence of impairment, the carrying amount of the asset is reduced and an impairment loss is recognized.
In adopting PSAK 50 and PSAK 55, the Company and its Subsidiaries identified the following transaction adjustments in accordance with Technical Bulletin No. 4 concerning the transition provision for the First Adoption of PSAK 50 (Revised 2006) and PSAK 55 (Revised 2006) as issued by the Indonesian Institute of Accountants. As at January 1, 2010, the Company and its Subsidiaries determined any possibility impairment of financial instruments based on conditions existing at that date. Any difference between this impairment and the impairment calculated based on previous applicable accounting principles is adjusted to the retained earnings (accumulated deficit) as at January 1, 2010. The difference between the two balances based on the old and new approach for impairment computation amounting to Rp 368,282,263,830 was credited to the opening balance of Retained Earning (accumulated deficit) as at January 1, 2010. The Company and its Subsidiaries’ management believes that the impairment of other receivables can not be realized, therefore the deferred tax assets arising from the impaiment of other receivables were not recognized.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
30
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) f. Financial Instruments (Continued)
Details of adjustment of such allowance are as follows : January 1, 2010 Rp
Other receivables (Note 8) : From the Company 286,606,568,916 From the Subsidiary Owners of the Company 75,141,639,321 Non-controlling interest 6,534,055,593
81,675,694,914
Total Effect of First Time Adoption of SFAS 50 (Revised 2006) and SFAS 55 (Revised 2006)
368,282,263,830
g. Financial Assets
Financial assets include cash and other financial instruments. Financial assets, other than hedging instruments, are classified into the following categories: financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments and available-for-sale financial assets. Financial assets are assigned to the different categories by management on initial recognition, depending on the purpose for which the investments were acquired. The designation of financial assets is re-evaluated at every reporting date at which date a choice of classification or accounting treatment is available, subject to compliance with specific provisions of applicable accounting standards. Regular purchases and sales of financial assets are recognized on their trade date. All financial assets that are not classified as at fair value through profit or loss are initially recognized at fair value plus any directly attributable transaction costs. Financial assets carried at fair value through profit or loss is initially recognized at fair value and transaction costs are expensed in the consolidated statements of comprehensive income. Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in the active market. They arise when the entity provides money, goods or services directly to a debtor with no intention of trading the receivables. They are included in current assets, except for maturities greater than 12 months after the consolidated statements of financial position date which are classified as non-current assets. Loans and receivables are subsequently measured at amortized cost using the effective interest method, less impairment loss, if any. Any change in their value is recognized in the consolidated statements of comprehensive income.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
31
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) g. Financial Assets (Continued)
Impairment loss is provided when there is objective evidence that the entity will not be able to collect all amounts due to it in accordance with the original terms of the receivables. The amount of the impairment loss is determined as the difference between the assets’ carrying amount and the present value of estimated cash flows. The Company and its Subdiaries’s financial assets categorized as loans and receivables, are presented as Cash and Cash Equivalents, Short-term Investments, Trade Receivables, Other Receivables, Non-trade receivables from Related Parties, Other Current Assets and Restricted Cash in Banks in the consolidated statements of financial position. Cash and cash equivalents are defined as cash on hand, demand deposits and short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to insignificant risk of changes in value. All income and expenses, including impairment losses, relating to financial assets that are recognized and presented as part of interest expense and bank charges and general and administrative expenses in the consolidated statements of comprehensive income. Non-compounding interest, dividend income and other cash flows resulting from holding financial assets are recognized in profit or loss when earned, regardless of how the related carrying amount of financial assets is measured. Derecognition of financial assets occurs when the rights to receive cash flows from the financial instruments expire or are transferred and are substantially all of the risks and rewards of ownership have been transferred.
h. Impairment of financial assets
The entity assesses at each consolidated statements of financial position dates whether there is any objective evidence that a financial asset or a group of financial assets is impaired. For loans and receivables carried at amortized cost, the entity first assesses whether objective evidence of impairment exists individually significant, or collective for financial assets that are not individually significant. If the entity determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, the asset is included in a group of financial assets with similar credit risk characteristics and collectively assessed for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be, recognized are not included in a collective assessment of impairment.
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AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
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3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) h. Impairment of financial assets (Continued)
If there is objective evidence that an impairment loss has occurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future expected credit losses that have not yet been incurred). The present value of the estimated future cash flows is discounted at the financial asset’s original effective interest rate. If a loan has a variable interest rate, the discount rate for measuring impairment loss is the current effective interest rate. The carrying amount of the financial asset is reduced through the use of an allowance for impairment account and the amount of the loss is recognized in the consolidated statements of comprehensive income. Interest income continues to be accrued on the reduced carrying amount based on the original effective interest rate of the financial asset. Loans and receivables, together with the associated allowance, are written off when there is no realistic prospect of future recovery and all collateral has been realized or has been transferred to the entity. If, in a subsequent year, the amount of the estimated impairment loss increases or decreases because of an event occurring after the impairment was recognized, the previously recognized impairment loss is increased or reduced by adjusting the allowance for impairment account. If a future write-off is later recovered, the recovery is recognized in the consolidated statements of comprehensive income.
i. Inventories
Finished goods, work in process, raw materials and indirect materials are carried at the lower of cost and net realizable value. Cost is determined by the average method. Cost includes all expenses directly attributable to the manufacturing process as well as suitable portions of related production overheads, based on normal operating capacity. Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. An allowance for impairment is determined on the basis of estimated future usage or sale of individual inventory items. The amount of any write-down of inventories to net realizable value and all losses of inventories are recognized as an expense in the period the write-down or loss occurs. The amount of any reversal of any write-down of inventories, arising from an increase in net realizable value, is recognized as a reduction in the amount of inventories recognized as an expense in the period in which the reversal occurs.
j. Prepaid Expenses
Prepaid expenses are charged to operations over the periods benefited using the straight-line method.
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AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
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3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) k. Property, Plant and Equipment
Initially, an item of property, plant and equipment is measured at its cost, which comprises its purchase price and any cost directly attributable to bringing the assets to the location and condition necessary for it to be capable of operating in the manner intended by management, and also include the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located.
Subsequent expenditures such as replacement and major inspection are added to the carrying amount of the asset when it is probable that future economic benefits will flow to the entity and the cost of the item can be measured reliably. The carrying amount of those parts that are replaced or any remaining carrying amounts of the cost of the previous inspection is derecognized. The costs of day-to-day servicing of an asset are recognized as an expense in the period in which they are incurred.
Depreciation is recognized on straight-line basis to write down the depreciable amount of property, plant and equipment, except land. The estimated useful lives of the assets are as follows:
Years
Buildings and improvement 20 Machinery and equipment 10-20
Transportation 5 Office equipment 5 Store equipment 5 Land is stated at cost and is not depreciated. Certain cost associated with the acquisition or renewal of legal titles on the landrights are deferred and amortized using the straight-line method over the legal term of the landrights or economic life of the land, whichever is shorter. These deferred costs are presented under “Deferred Charges for landrights” in the consolidated statements of financial position.
The residual values, useful lives and depreciation method are reviewed at each reporting date to ensure that such residual values, useful lives and depreciation method are consistent with the expected pattern of economic benefits from those assets.
Depreciation of an asset begins when it is available for use, i.e. when it is in the location and condition necessary for it to be capable of operating in the manner intended by management. Depreciation does not cease when the assets become idle or is retired from active use unless the asset is fully depreciated. Fully depreciated assets are retained in the accounts until they are no longer in use and no further charge for depreciation is made in respect of those assets.
When an asset is disposed of or when no future economic benefits are expected from its use or disposal, the cost and accumulated depreciation and impairment losses, if any, are removed from the accounts. Any resulting gains or losses from derecognition of an item of property, plant and equipment is included in the consolidated statements of comprehensive income.
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AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
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3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) k. Property, Plant and Equipment (Continued)
The Company and its Subsidiaries’ property, plant and equipment are carried at cost less accumulated depreciation and accumulated impairment losses, if any, since the Company and Subsidiaries adopt the cost method.
l. Contruction in Progress
Construction in progress is stated at cost and presented as part of property, plant and equipment. The accumulated cost will be reclassified to the appropriate property, plant and equipment account when the contruction is substantially completed and the asset is ready for its intended use.
m. Impairment of Non-financial assets
The Company and its subsidiaries’ property, plant and equipment are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. For purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s net selling price and value in use.
n. Leases
Based on PSAK 30 (Revised 2007), the determination of whether an arrangement is, or contains a lease is based on the substance of the arrangement at inception date and whether the fulfillment of the arrangement is dependent on the use of a specific asset and the arrangement conveys a right to use the asset. Under this revised PSAK, leases that transfer substantially to the lessee all the risks and rewards incidental to ownership of the leased item are classified as finance leases. Moreover, leases which do not transfer substantially all the risks and rewards incidental to ownership of the leased item are classified as operating leases. Under a finance lease, the entity shall recognize assets and liabilities in consolidated statements of financial position at amounts requal to the fair value of the leased property or, if lower, the present value of the minimum lease payments, each determined at the inception of the lease. Minimum lease payments shall be apportioned between the finance charge and the reduction of the outstanding liability. The finance charge shall be allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability. The contingent rents shall be charged as expenses in the periods in which they are incurred. The finance charges are reflected in the consolidated statements of comprehensive income.
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AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
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3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) n. Leases (Continued)
Capitalised leased assets (presented under the account of property, plant and equipment) are depreciated over the shorter of the estimated useful life of the assets and the lease term, if there is no reasonable certainty that the entity will obtain ownership by the end of the lease term. Leases, which do not transfer substantially all the risks and benefits of ownership of the asset, are classified as operating leases. Operating lease payments are recognized as expense in the consolidated statement of comprehensive income on straight-line basis over the lease term. Associated costs, such as maintenance and insurance, are expensed as incurred. The entity determine whether an arrangement is, or contains a lease based on the substance of the arrangement is dependent on the use of a specific asset or assets and arrangement conveys a right to use the asset.
o. Deferred Charges
Expenses related to the issuance of the Company’s shares to the public were deferred and amortized over a ten-year period using the straight-line method. In 1997, the Company opted to amortize the remaining balance of this account over five years. Based on BAPEPAM’s decision letter KEP-No.06/PM/2000 dated March 13, 2000, the share issuance costs were retroactively recorded into “Additional Paid-in Capital”.
p. Financial Liabilities
Financial liabilities include Bank Loans, Secured Debts, Short-term Loans, Notes Payable, Trade Payables, Other Current Liabilities, Liabilities for purchase of property, plant and equipments, Accrued Expenses, Credit Financing Payables, Unsecured Debts and Notes Payables, Working Capital Loans and Obligation under finance lease, which are measured at amortized cost using the effective interest rate method. Financial liabilities are recognized when the entity becomes a party to the contractual terms of the instrument. All interest-related charges are recognized as an expense in the consolidated statements of comprehensive income. Bank Loans, Secured Debts, Short-term Loans, Notes Payable, Unsecured Debts and Notes Payables, and Working Capital Loans are raised for support of short-term funding of operations. They are recognized at proceeds received, net of direct issue costs. Credit financing payables and Obligation under Finance Lease are measured at initial value less the capital element of lease repayments.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
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3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) p. Financial Liabilities (Continued)
Trade Payables, Other Current Liabilities, Liabilities for Purchase of Property, Plant and Equipments, and Accrued Expenses are initially recognized at their fair value and subsequently measured at amortized cost less settlement payments. Financial liabilities are derecognized from the consolidated statements of financial position only when the obligations are extinguished either through discharge, cancellation or expiration.
q. Determination of Fair Value
Fair value is defined as the amount at which the financial instruments could be exchanged in a current transaction between knowledgeable, willing parties in an arm’s length transaction, other than in a forced sale or liquidation. Fair values are obtained from quoted prices, discounted cash flow models, as appropriate. The face values less any estimated credit adjustments for financial assets and liabilities with a maturity of less than one year are assumed to approximate to their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate available to the entity for similar financial instruments.
r. Employees’ Benefit Liabilities
Employee entitlements to service and compensation payments relating to the employee’s separation, gratuity and compensation are recognized. A provision is made for the estimated liability as of the consolidated statements of financial position date and is calculated based on the Manpower Law No. 13/2003 issued by the Government of Republic Indonesia in April 2003. The cost of providing post-employment benefit is determined using the Projected Unit Credit Method. The accumulated unrecognized actuarial gains and losses that exceed 10% of the present value of the entity’s defined benefit obligations is recognized on a straight-line basis over the expected average remaining working lives of the participating employees. Past service cost is recognized immediately to the extent that the benefits are already vested, and otherwise is amortized on a straight-line basis over the average period until the benefits become vested. The benefit obligation recognized in the consolidated statements of financial position represents the present value of the defined benefit obligation, as adjusted for unrecognized actuarial gains and losses and unrecognized past service cost.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
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3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) s. Revenue and Expense Recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the entity and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognized:
(i) Sale of goods – Revenue is recognized when the risks and rewards of ownership of the goods have passed to the buyer, i.e. generally when the goods are delivered to the customers.
(ii) Interest income – Revenue is recognized as the interest accrues taking into account the effective yield of the asset.
(iii) Gain on sale of property, plant and equipment – Revenue is recognized when the title to the assets is transferred to the buyer or when the collectibility of the entire sales price is reasonably measured.
Revenue is measured by reference to the fair value of consideration received or receivable by the entity for goods supplied.
Expenses are recognized upon utilization of the service or at the date they are incurred. t. Income Tax
Income tax is computed on the basis of taxable income for the period. Deferred income tax is provided for the timing differences in the recognition of income and expenses for financial reporting and income tax purpose. The accounting treatment is in conformity with the Statement Financial Accounting Standard (SFAS) No. 46 concerning Accounting for Income Taxes.
Deferred tax is accounted for using the current tax rate or substantially applicable tax rate at the consolidated statements of financial position date. Deferred tax are charged or credited to the consolidated statements of comprehensive income in the current period.
u. Basic Net Profit per Share
Basic profit per share is computed by dividing net profit by the weighted average number of shares outstanding during the year. The weighted average number of shares as of December 31, 2011 and 2010 was 2,376,907,950 shares, in both years.
v. Segment Information
Segment information is presented based upon identifiable operating segments. An operating segment is a component of an entity :
1. that engages in business activities from which it may earn revenue and incur expenses (including revenue and expenses relating to the transaction with other components of the same entity) ;
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
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3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) v. Segment Information (Continued)
2. whose operating results are reviewed regularly by the entity’s chief operating decision maker
to make decision about resources to be allocated to the segments and assess its performance ; and
3. for which discrete financial information is available.
4. ESTIMATION UNCERTAINTY
The preparation of the consolidated financial statements in conformity with Indonesian Financial Accounting Standard required management to make judgments, estimates and assumption that effect the application of accounting policies and amounts reported in the consolidated financial statements. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an on going basis. Revisions to accounting estimates are recognized in the period in with the estimates are revised and in the future period effected. Information about critical judgments and estimates in applying accounting policies that have the most significant effect on the amounts recognized in the consolidated financial statements are as follows : Impairment
An impairment loss is recognized for the amount by which the assets or cash-generating unit’s carrying amount exceeds its recoverable amount. To determine the recoverable amount, management estimates expected future cash flows from each cash-generating unit and determines a suitable interest rate in order to calculate the present value of those cash flows. In the process of measuring expected future cash flows management makes assumptions about future operating results. These assumptions relate to future events and circumstances. The actual results may vary, and may cause significant adjustments to the Company and Subsidiaries’ assets within the next financial year. In most cases, determining the applicable discount rate involves estimating the appropriate adjustment to market risk and the appropriate adjustment to asset-specific risk factors. Pension and employees’ benefit The determination of the Company and its Subsidiaries’ obligations and cost for pension and employee benefits liabilities is dependent on its selection of certain assumptions used by the independent actuaries in calculating such amounts. Those assumptions include among others, discount rates, annual salary increase rate, annual employee turn-over rate, disability rate, retirement age and mortality rate.
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AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
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4. ESTIMATION UNCERTAINTY (Continued) Actual results that differ from the Company and its Subsidiaries’ assumptions which effects are more than 10% of the defined benefit obligations are deferred and being amortized on a straight-line basis over the expected average remaining service years of the qualified employees. While the Company and its Subsidiaries believe that its assumptions are reasonable and appropriate, significant differences in the actual results or significant changes in the Company and its Subsidiaries’ assumptions may materially affect its estimated liabilities for pension and employee benefits and net employee benefit expense. Useful lives and depreciation of property, plant and equipments
Management determined the estimates the useful lives of these property, plant and equipment and depreciation expense based on the expected utility of the assets. These are common life expectancies applied in the industries where the Company and its Subsidiaries conducts its business. Actual results may vary due to technical obsolescence. Changes in the expected level of usage and technological development could impact the economic useful lives and the residual values of these assets, and therefore future depreciation charges could be revised. Fair value of financial instruments Management uses valuation techniques in measuring the fair value of financial instruments where active market quotes are not available. In applying the valuation techniques, management makes maximum use of market inputs, and uses estimates and assumptions that are, as far as possible, consistent with observable data that market participants would use in pricing the instrument. Where applicable data is not observable, management uses its best estimate about the assumptions that market participants would make. These estimates may vary from the actual prices that would be achieved in an arm’s length transaction at the reporting date.
5. CASH AND CASH EQUIVALENTS
2 0 1 1 2 0 1 0 Rp Rp Cash on hand : Rupiah 380,467,288 371,157,705 US Dollar 305,003,811 297,715,747 Singapore Dollar 57,615,945 19,989,884 Euro European 27,559,862 6,468,082 Norwegian Krone 1,455,663 1,474,349
772,102,569 696,805,767
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AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
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5. CASH AND CASH EQUIVALENTS (Continued) 2 0 1 1 2 0 1 0 Rp Rp Cash in banks : Third Parties :
Deutsche Bank Rupiah account 10,280,801,879 11,470,996,970 US Dollar account 13,127,799,840 66,609,289,906
PT Bank CIMB Niaga Tbk Rupiah account 1,623,533,799 926,269,108 US Dollar account 782,916,521 109,599,211
PT Bank Central Asia Tbk Rupiah account 543,981,441 447,142,449 US Dollar account 2,660,593,367 6,410,904,786
PT Bank Negara Indonesia (Persero) Tbk Rupiah account 1,385,544,246 1,188,166,093 US Dollar account − 15,204,141
PT Bank Mandiri Tbk Rupiah account − 10,429,794
PT Bank Rakyat Indonesia Tbk Rupiah account − 8,065,237
30,405,171,093 87,196,067,695
Total 31,177,273,662 87,892,873,462
• Cash in banks generally earn interest at rates based on daily bank deposit rates with rates ranging from 0.50% to 3.25% per annum for Rupiah accounts and 0.20% to 0.75% per annum for US Dollar accounts in 2011 and 2010.
• No cash and cash equivalents are placed with the related parties.
6. SHORT TERM INVESTMENTS
2 0 1 1 2 0 1 0 Rp Rp
Third party : Deutsche Bank, Jakarta 3,000,000,000 1,000,000,000
• In 2011, time deposit with Deutsche Bank, Jakarta of Rp 2,000,000,000 represents one year time deposit with interest rate of 5.80% per annum, due on December 10, 2012.
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AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
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6. SHORT TERM INVESTMENTS (Continued)
• In 2011, time deposit with Deutsche Bank, Jakarta of Rp 1,000,000,000 represents one year time deposit with interest rate of 6.25% per annum, due on May 20, 2012.
• In 2010, time deposit with Deutsche Bank, Jakarta of Rp 1,000,000,000 represents one year time deposit with interest rate of 6.25% per annum, due on May 18, 2011. The time deposit is liquidated on May 18, 2011.
• No short-term investments are placed with the related parties.
7. TRADE RECEIVABLES
This account consists of : Third parties : 2 0 1 1 2 0 1 0 Rp Rp Local debtors 402,220,760,561 433,723,129,561 Foreign debtors 52,044,466,878 49,878,280,541
Total 454,265,227,439 483,601,410,102 Less : Allowance for impairment − (61,489,504,295)
Net 454,265,227,439 422,111,905,807
A summary of the aging of trade receivables from third parties based on the date of invoice is as follows : 2 0 1 1 2 0 1 0 Rp Rp
Up to 1 month 346,873,104,949 333,253,690,703 > 1 month – 3 months 106,326,774,872 86,776,831,570 > 3 months – 6 months 231,312,702 2,081,383,534 > 6 months – 1 year 154,718,271 − > 1 year 679,316,645 61,489,504,295
Total 454,265,227,439 483,601,410,102
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
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7. TRADE RECEIVABLES (Continued) Changes in the allowance for impairment from third parties are as follows : 2 0 1 1 2 0 1 0 Rp Rp Beginning balance 61,489,504,295 60,376,201,419 Balance of unconsolidated subsidiary (61,489,504,295) − Movement during the year : Addition − 1,294,556,295 Deduction − (181,253,419)
Ending balance − 61,489,504,295
Trade receivables from third parties are short-term and non interest bearings. All amounts of trade receivables from third parties have been reviewed for indication of impairment. Based on the review of the status of individual trade receivables from third parties as of December 31, 2011, the Company’s managements believe that there is no requirement of allowance for impairment as the amounts are fully collectible. And based on the review of the status of individual trade receivables from third parties as of December 31, 2010, the Company and Subsidiaries’ managements believe that the impairment of trade receivables from third parties are adequate to cover possible losses on uncollectible receivables from third parties because of the financial difficulties of the Subsidiary’ customers. Additions in allowance for impairment in 2010 of Rp 1,294,556,295 was due to additional uncollectible receivables from third parties, and are presented as part of general and administrative expenses in the consolidated statements of comprehensive income (Note 42).
Deduction in allowance for impairment in 2010 of Rp 181,253,419 was a reversal of allowance for impairment due to the difference of foreign exchange rate.
The net carrying value of trade receivables from third parties is considered a reasonable approximation of fair value. The details of trade receivables from third parties based on currencies are as follows : 2 0 1 1 2 0 1 0 Rp Rp Rupiah 102,616,673 57,478,608,468 United States Dollar US$ 50,084,099 in 2011 and US$ 47,394,372 in 2010 454,162,610,766 426,122,801,634
Total 454,265,227,439 483,601,410,102
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AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
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7. TRADE RECEIVABLES (Continued) Related parties : 2 0 1 1 2 0 1 0 Rp Rp PT Multikarsa Investama 268,722,447,175 268,722,447,175 PT Texmaco Jaya Tbk (under bankruptcy) 141,986,246,529 −
Total 410,708,693,704 268,722,447,175 Less : Allowance for impairment (141,986,246,529) −
Net 268,722,447,175 268,722,447,175
A summary of the aging of trade receivables from related parties based on the date of invoice is as follows : 2 0 1 1 2 0 1 0 Rp Rp Up to 1 month – – > 1 month – 3 months – – > 3 months – 6 months – – > 6 months – 1 year – – > 1 year 410,708,693,704 268,722,447,175
Total 410,708,693,704 268,722,447,175
Changes in the allowance for impairment of trade receivables from related parties are as follows : 2 0 1 1 2 0 1 0 Rp Rp Beginnning balance – – Movement during the year : Addition 141,986,246,529 – Deduction – –
Ending balance 141,986,246,529 –
Trade receivables from related parties are short-term and non interest bearings. Additions in allowance for impairment in 2011 of Rp 141,986,246,529 due to the impairment loss on uncollectible trade receivables from PT Texmaco Jaya Tbk (under bankruptcy), and has been eliminated with the discountinued operations financial statements from Subsidiary (Note 46).
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AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
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7. TRADE RECEIVABLES (Continued) Based on the review of the status of the trade receivables from related parties, management believes that the carrying value is a reasonable approximation of fair value. The impairment was not provided since the related party, PT Multikarsa Investama, is under debt restructuring program and the settlement of the receivables from related party will be done when the debt restructuring is completed. The details of trade receivables from related parties based on currencies are as follows : 2 0 1 1 2 0 1 0 Rp Rp
Rupiah 410,708,693,704 268,722,447,175
In 2011, all trade receivables are used as collateral for the Company’s bank loans and working capital loans that were received from Damiano Investments BV., Netherland (Notes 17 and 26). And in 2010, all trade receivables are used as collateral for the Company’s bank loans, working capital loans and the Subsidiary’s short-term loans that were received from Damiano Investments BV., Netherland
(Notes 17, 19 and 26).
8. OTHER RECEIVABLES
2 0 1 1 2 0 1 0 Rp Rp Third parties : Receivables from purchase discounts 2,043,148,647 −
Receivables from import clearance 1,724,449,726 1,044,521,903 Receivables from employees 347,153,332 840,738,253 Interest receivables on time deposit 6,663,333 1,805,556 Others 2,646,971,303 2,544,318,922
6,768,386,341 4,431,384,634
Other third parties : Operational Advances to : PT Wastra Indah 142,286,940,254 164,073,551,252 PT Texmaco Perkasa Engineering Tbk 51,203,593,031 79,623,239,633 PT Wahana Perkasa Auto Jaya 50,169,696,654 50,799,463,564 PT Sumatex Subur 28,706,321,888 34,267,515,040 PT Texmaco Taman Synthetics 28,024,019,799 37,072,146,707 Drapper Texmaco Inc. Co., United States of America 18,567,339,814 18,567,339,814 Norfil Ltd., England 6,547,165,191 6,547,165,191 PT Bina Prima Perdana 4,678,110,000 – PT Jaya Perkasa Engineering 4,283,000,000 – Commonwealth Holdings Pte. Ltd., Singapore 4,467,327,421 4,467,327,421
Carried forward 338,933,514,052 395,417,748,622
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
45
8. OTHER RECEIVABLES (Continued) 2 0 1 1 2 0 1 0 Rp Rp Brought forward 338,933,514,052 395,417,748,622
PT Wismakarya Prasetya 1,756,450,000 – PT Perkasa Heavyndo Engineering 1,749,533,856 1,883,533,856 PT Raja Busana Mahameru 1,231,274,473 30,776,633,189 PT Supermitory Utama Tbk 839,820,513 2,582,676,075 PT Saritex Jaya Swasti 653,265,000 6,634,990,433 PT Kreasi Kekar 448,500,000 448,500,000 PT Devrindo Widya 228,680,000 332,282,365 PT Perkasa Indobaja 142,205,928 912,938,896 PT Perkasa Indosteel 119,820,512 1,555,808,912 PT Wahana Jaya Perkasa 99,820,513 99,820,513 PT Sarana Daycrown Industri 99,820,511 99,820,511 PT Bina Peranan Busana 21,000,000 21,000,000 PT Kreasi Indah Textile 8,855,000 18,250,000 PT Mutiara Persada Inti − 29,050,809,556 Polysindo (UK) Ltd., England − 22,217,242,613 Coastal Group Ltd., South Africa − 7,799,959,893 PT Ungaran Sari Garments − 2,781,057,537 Polysindo (USA) Inc., United States of America − 2,393,687,182 PT Elok Prima Mitra Busana − 1,959,468,888 PT Citra Abadi Sejati − 1,354,384,678 PT Cipta Busana Jaya − 878,647,275 PT Citra Indah Textile − 728,716,157 PT Busana Perkasa Garments − 411,585,107 PT Mahkota Indah Sentosa − 377,832,876
Total 346,332,560,358 510,737,395,134 Less : Allowance for impairment (330,163,685,573) (510,737,395,134)
Net 16,168,874,785 −
Total other receivables 22,937,261,126 4,431,384,634
Other receivables from the above companies represent the loans and advances for working capital purposes. The loan and advances are not subject to interest and have no terms of repayment. Until now, these companies above are unable to pay their payables to the Company and its Subsidiaries due to their financial difficulties. Some of the companies have already stopped operations and are still under the restructuring program with PT Perusahaan Pengelola Asset (PPA). As of March 2012, the debt restructuring process has not yet been completed.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
46
8. OTHER RECEIVABLES (Continued) Changes in the allowance for impairment are as follows : 2 0 1 1 2 0 1 0 Rp Rp Beginning balance 510,737,395,134 147,254,392,372Effect of First Time Adoption of SFAS 50 (Revised 2006) and SFAS 55 (Revised 2006) – 368,282,263,830 Balance of unconsolidated subsidiary (180,299,495,716) – Movement during the year : Addition – 303,000,000 Deduction (274,213,845) (5,102,261,068)
Ending balance 330,163,685,573 510,737,395,134
Additions in allowance for impairment in 2010 of Rp 303,000,000 was recognized due to additional uncollectible other receivables, and are presented as part of the general and administrative expenses in the consolidated statements of comprehensive income (Note 42). Deductions in allowance for impairment in 2011 of Rp 274,213,845, was a reversal of allowance for impairment due to the collectible, and are presented as part of the miscellaneous income, net in the consolidated statements of comprehensive income (Note 45). Deductions in allowance for impairment in 2010 of Rp 5,102,261,068, was a reversal of allowance for impairment due to the difference of foreign exchange rate. Other receivables from employees represent advances to employees. These advances are not subject to interest and the payments are made based on terms of repayment schedule. All amounts of other receivables have been reviewed for indication of impairment. Based on the review of the status of individual other receivables, the Company and its Subsidiaries’ managements believe that the impairment of other receivables are adequate to cover possible losses on uncollectible other receivables. The details of other receivables based on currencies are as follows :
2 0 1 1 2 0 1 0 Rp Rp Rupiah 352,546,420,272 403,006,361,000
United States Dollars US$ 61,152 in 2011 and US$ 12,474,966 in 2010 554,526,427 112,162,418,768
Total 353,100,946,699 515,168,779,768
The net carrying value of other receivable are considered a reasonable approximation of fair value.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
47
9. INVENTORIES
2 0 1 1 2 0 1 0 Rp Rp Finished goods 318,102,818,554 178,376,709,962 Work in process 61,491,214,627 43,375,132,437 Raw materials 254,941,869,304 95,368,506,633 Indirect materials 160,522,385,113 144,991,749,163
Total 795,058,287,598 462,112,098,195 Less : Allowance for impairment – –
Net 795,058,287,598 462,112,098,195
Based on the review of the physical condition of the inventories at the end of each year, the Company and its Subsidiaries’ management believes that no allowance for impairment is deemed necessary. As at December 31, 2011 and 2010, the Company’s inventories were covered by insurance with PT Asuransi Rama Satria Wibawa against fire loss and other risks totaling of US$ 68,000,000 and US$ 51,000,000, respectively, which in the opinion of the management were adequate to cover losses arising from such risks. As at December 31, 2010, the Subsidiaries’ inventories were not covered by insurance against fire loss and other risks. In 2011, all inventories were used as collateral for the Company’s bank loans and working capital loans that were received from Damiano Investments BV., Netherland (Notes 17 and 26). And in 2010, all inventories were used as collateral for the Company’s bank loans, working capital loans and the Subsidiary’s short-term loans received from Damiano Investments BV., Netherland (Notes 17, 19 and 26).
10. PURCHASE ADVANCES
2 0 1 1 2 0 1 0 Rp Rp Third parties : Purchase of property, plant and equipments 49,537,553,869 25,721,389,072 Purchase of inventories 40,759,776,124 30,598,633,412 Purchase of turbine’s spareparts 7,806,751,861 1,143,761,941
98,104,081,854 57,463,784,425
Other third party : PT Wismakarya Prasetya 245,091,340,379 233,605,042,490
Total 343,195,422,233 291,068,826,915
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
48
10. PURCHASE ADVANCES (Continued) In 2011, total purchases advance of property, plant and equipments of Rp 49,537,553,869 represents the balance in connection with the purchases machineries and equipments with total amounts of Rp 16,717,469,383 in filament yarn division and the purchases of fiber machineries and equipments for expansion with total amounts of Rp 32,820,084,486. The machineries and equipments will be received in 2012. And in 2010, total purchase advances of property, plant and equipments of Rp 25,721,389,072 represent the balance in connection with the purchases of machineries and equipments with total amounts of Rp 5,466,999,072 in filament yarn division and the expansion for Batch Poly (chips) with total amounts of Rp 20,254,390,000. The machineries and equipments had been received in April 2011 and May 2011. The payment made by the Company to PT Wismakarya Prasetya in excess of the invoice amount in treated as advance payment to PT Wismakarya Prasetya in line with the agreement between PT Wismakarya Prasetya and the Company on November 16, 2006.
11. PREPAID EXPENSES
2 0 1 1 2 0 1 0 Rp Rp Prepaid insurance 9,809,638,122 7,830,955,214 Prepaid rent 778,624,000 410,380,000
Total 10,588,262,122 8,241,335,214
12. ADVANCES FOR INVESTMENT IN A JOINT VENTURE
This account consist of advances for the Company’s investment in land to be used for a joint venture project between the Company and Eastman Kodak Company, USA to manufacture special types of polyester chips and fiber in Karawang - West Java. Total advances represents 17% of the joint venture’s subscribed capital. However the necessity for continuing with the joint venture is being assessed by both joint venture partners. As there is no possibility of the start-up this venture, it is thought fit to provide impairment for this equivalent amount in 2010.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
49
13. OTHER CURRENT ASSETS 2 0 1 1 2 0 1 0 Rp Rp Bank guarantee 49,725,555,298 24,239,736,000 Security deposit for electricity 1,755,000,000 1,755,000,000 Security deposit for rental 492,950,729 433,211,029 Others 45,179,403 45,179,403
Total 52,018,685,430 26,473,126,432
Based on the purchase and sale gas agreement No. 001016.PK/HK.02/USH/2010 between the Company, PT Perusahaan Gas Negara (Persero) and PT Wismakarya Prasetya, the Company should provide the bank guarantee for gas supplies equivalent to approximately two months consumption value and the balance of gas. As of December 31, 2011 and 2010, the Company provided the bank guarantee (SBLC) through Deutsche Bank, Jakarta for an amount equal to US$ 2,915,282 plus Rp 14,248,812,000 (or equivalent with 4,486,611) and US$ 1,466,368 plus Rp 7,124,400,000 (or equivalent with US$ 2,258,760), respectively representing 2 month’s consumption. The bank guarantees have terms of 9 (nine) months and will due on September 30, 2012. In order to obtain the SBLC, the Company deposited an amount equal to US$ 5,483,630 and US$ 2,696,000 as of December 31, 2011 and 2010 in Deutsche Bank, Hong Kong as collateral through Kyoa account. The collateral represents approximately 120% of SBLC amount. The details of other current assets based on currencies are as follows : 2 0 1 1 2 0 1 0 Rp Rp
Rupiah 2,237,815,332 2,233,390,432
United States Dollar (US$ 5,489,730 in 2011 and US$ 2,696,000 in 2010) 49,780,870,098 24,239,736,000
Total 52,018,685,430 26,473,126,432
14. NON-TRADE RECEIVABLES FROM RELATED PARTIES
2 0 1 1 2 0 1 0 Rp Rp PT Texmaco Jaya Tbk (under bankruptcy) 964,932,338,561 −
PT Multikarsa Investama 367,469,594,933 476,020,313,345
Total 1,332,401,933,494 476,020,313,345 Less : Allowance for impairment (1,015,033,871,667) (50,101,533,106)
Net 317,368,061,827 425,918,780,239
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
50
14. NON-TRADE RECEIVABLES FROM RELATED PARTIES (Continued) Receivables from PT Multikarsa Investama derived from the cash receipts from AR International Limited, Hong Kong of Rp 51,421,394,625 due to refund on advances for purchase of property, plant and equipment (machinery and equipment) and the remaining balance represent advance payments for expenses of Rp 316,048,200,308 and Rp 424,598,918,720 as of December 31, 2011 and 2010 respectively represent advance payments for salary and other expenses. Changes in the allowance for impairment are as follows : 2 0 1 1 2 0 1 0 Rp Rp
Beginning balance 50,101,533,106 50,101,533,106 Movement during the period : Addition 964,932,338,561 – Deduction – –
Ending balance 1,015,033,871,667 50,101,533,106
Addition in allowance for impairment in 2011 of Rp 964,932,338,561 were recognized as additional of allowance for impairment due to the uncollectible non-trade receivables from PT Texmaco Jaya Tbk (under bankruptcy), and and has been eliminated with the discountinued operations financial statements from Subsidiary (Note 46). Based on the review of the status of the non-trade receivables from related parties, management believes that the carrying value is a reasonable approximation of fair value. The impairment was not provided since the related party, PT Multikarsa Investama, is under debt restructuring program and the settlement of the due from related parties will be done when the debt restructuring is completed. The details of non-trade receivables from related parties based on currencies are as follows : 2 0 1 1 2 0 1 0 Rp Rp
Rupiah 1,332,401,933,494 476,020,313,345
15. RESTRICTED CASH IN BANKS
2 0 1 1 2 0 1 0 Rp Rp IBRA (PPA) : PT Bank Dharmala Rupiah account 27,066,834 64,056,133
Carried forward 27,066,834 64,056,133
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
51
15. RESTRICTED CASH IN BANKS (Continued) 2 0 1 1 2 0 1 0 Rp Rp Brought forward 27,066,834 64,056,133
PT Bank Putera Multikarsa Rupiah account 3,894,435,991 5,569,629,066 US Dollar account 6,368,731,161 11,440,674,287
PT Bank Papan Sejahtera Rupiah account 37,356,312 37,356,312
PT Bank Umum Nasional US Dollar account 17,477,845 17,329,433
PT Bank Asia Pacific Rupiah account 555,500 555,500
Total 10,345,623,643 17,129,600,731
As the Company and Subsidiary are under restructuring process with the Indonesian Bank Restructuring Agency (IBRA), the aggregate balances of cash in banks were restricted by IBRA. The Indonesian government through IBRA suspended the bank operating licences of PT Bank Putera Multikarsa, a related party, on January 28, 2000, PT Bank Dharmala, PT Bank Asia Pacific and PT Bank Papan Sejahtera on March 13, 1999; and PT Bank Umum Nasional on August 21, 1998. As a result, the balance of cash as of December 31, 2011 and 2010 amounting to Rp 10,345,623,643 and Rp 17,129,600,731, respectively, is shown as restricted cash in banks under non-current assets in the 2011 and 2010 consolidated statements of financial position. Deduction in 2011 represents the deduction of restricted cash in banks which financial statements were no longer consolidated in 2011 due to the Subsidiary (PT Texmaco Jaya Tbk) is stated at bankruptcy and insolvency so it caused that the Company have lost of control (Note 46). The Company and its Subsidiaries’ management determined that the restricted cash in banks do not need impaired, because the outstanding balance of restricted cash in banks will be settled upon the Company and its Subsidiaries’ loans repayment or upon completion of the restructuring program with creditors and PPA. The net carrying value of the restricted cash in banks is considered a reasonable approximation of fair value.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
52
16. PROPERTY, PLANT AND EQUIPMENT 2 0 1 1 2 0 1 0 Rp Rp
Carrying cost : Direct acquisition 9,800,327,704,159 10,706,451,678,368 Assets under finance lease − 30,142,094,300
Total carrying cost 9,800,327,704,159 10,736,593,772,668
Accumulated depreciation : Direct acquisition 8,573,556,432,737 8,946,963,740,712 Assets under finance lease − 30,142,094,300
Total accumulated depreciation 8,573,556,432,737 8,977,105,835,012
Book value 1,226,771,271,422 1,759,487,937,656
Contruction in progress 28,346,412,332 16,096,195,720
Total 1,255,117,683,754 1,775,584,133,376
The details of property, plant and equipment are as follows : Direct acquisition : 2 0 1 1 Changes during the current period
Beginning Addition Deduction Reclassification Ending
(As Restated) Rp Rp Rp Rp Rp
Carrying cost : Land 111,712,279,573 – 74,863,284,378 – 36,848,995,195
Building and improvement 218,670,462,740 1,902,915,564 94,149,737,607 – 126,423,640,697 Machinery and equipment 10,316,220,766,066 50,112,277,471 774,373,118,009 16,096,195,720 9,608,056,121,248
Transportation equipment 25,122,643,741 408,913,636 8,158,435,806 – 17,373,121,571 Office equipment 29,946,833,126 600,000 18,321,607,678 – 11,625,825,448 Store equipment 4,778,693,122 – 4,778,693,122 – –
10,706,451,678,368 52,424,706,671 974,644,876,600 16,096,195,720 9,800,327,704,159
Accumulated depreciation : Building and improvement 165,970,749,814 8,820,489,737 74,732,397,611 – 100,058,841,940 Machinery and equipment 8,724,196,785,856 496,770,912,045 773,946,248,606 – 8,447,021,449,295
Transportation equipment 22,094,603,589 809,704,214 8,040,699,681 – 14,863,608,122 Office equipment 29,922,908,331 8,863,217 18,319,238,168 – 11,612,533,380 Store equipment 4,778,693,122 – 4,778,693,122 – –
8,946,963,740,712 506,409,969,213 879,817,277,188 – 8,573,556,432,737
Book value 1,759,487,937,656 1,226,771,271,422
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
53
16. PROPERTY, PLANT AND EQUIPMENT (Continued) Changes during the period (As Restated)
2 0 1 0 Beginning Addition Deduction Reclassification Ending Rp Rp Rp Rp Rp
Carrying cost : Land 111,712,279,573 – – – 111,712,279,573
Building and improvement 218,670,462,740 – – – 218,670,462,740 Machinery and equipment 10,302,849,214,879 13,371,551,187 – – 10,316,220,766,066
Transportation equipment 23,602,511,287 2,671,632,454 1,151,500,000 – 25,122,643,741 Office equipment 29,928,933,126 17,900,000 – – 29,946,833,126 Store equipment 4,778,693,122 – – – 4,778,693,122
10,691,542,094,727 16,061,083,641 1,151,500,000 – 10,706,451,678,368
Accumulated depreciation : Building and improvement 155,760,850,234 10,209,899,580 – – 165,970,749,814
Machinery and equipment 8,228,272,341,404 495,924,444,452 – – 8,724,196,785,856 Transportation equipment 22,769,194,569 476,909,020 1,151,500,000 – 22,094,603,589 Office equipment 29,903,718,627 19,189,704 – – 29,922,908,331
Store equipment 4,778,693,122 – – – 4,778,693,122
8,441,484,797,956 506,630,442,756 1,151,500,000 – 8,946,963,740,712
Book value 2,250,057,296,771 1,759,487,937,656
Assets under finance lease : Changes during the current period 2 0 1 1 Beginning Addition Deduction Reclassification Ending
Rp Rp Rp Rp Rp Carrying cost :
Machinery and equipment 30,142,094,300 – 30,142,094,300 – –
30,142,094,300 – 30,142,094,300 – –
Accumulated depreciation : Machinery and equipment 30,142,094,300 – 30,142,094,300 – –
30,142,094,300 – 30,142,094,300 – –
Book value – –
Changes during the current period
2 0 1 0 Beginning Addition Deduction Reclassification Ending Rp Rp Rp Rp Rp
Carrying cost : Machinery and equipment 30,142,094,300 – – – 30,142,094,300
30,142,094,300 – – – 30,142,094,300
Accumulated depreciation :
Machinery and equipment 30,142,094,300 – – – 30,142,094,300
30,142,094,300 – – – 30,142,094,300
Book value – –
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
54
16. PROPERTY, PLANT AND EQUIPMENT (Continued) Construction in progress : 2 0 1 1 Changes during the current period
Beginning Addition Deduction Reclassification Ending
Rp Rp Rp Rp Rp
Carrying cost : Machinery and equipment 16,096,195,720 28,346,412,332 – 16,096,195,720 28,346,412,332
2 0 1 0 Changes during the current period
Beginning Addition Deduction Reclassification Ending
Rp Rp Rp Rp Rp
Carrying cost :
Machinery and equipment – 16,096,195,720 – – 16,096,195,720
Deduction on the property, plant and equipment represents sale of transportation equipment as follows: 2 0 1 1 2 0 1 0 Rp Rp Book value – – Selling price – 763,636,367
Gain on sale of property, plant and equipment – 763,636,367
2 0 1 1 2 0 1 0 Rp Rp Depreciation expenses are allocated to : Direct acquisition : Continued operations : Manufacturing expense (Note 40) 502,656,246,277 501,535,394,142 General and administrative expenses (Note 42) 798,585,385 496,098,719 Other income (charges) − 4,598,949,895
503,454,831,662 506,630,442,756
Discountinued operations (Note 46) : Manufacturing expense 111,647,141 −
General and administrative expenses 19,982,046 −
Other income (charges) 2,823,508,364 −
2,955,137,551 −
Total 506,409,969,213 506,630,442,756
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
55
16. PROPERTY, PLANT AND EQUIPMENT (Continued) In 2011 and 2010, the Company own several pieces of land located in Karawang, Kendal and Pemalang amounted to 751,357.40 and 1,265,486.40 square meters, respectively with certificate Building Use Right (Hak Guna Bangunan or HGB) for a period of 20 – 30 years which will be expired between 2006 and 2029. For the ownership certificate of the land were located in Semarang of 78,111 square meters have been extended up to November 29, 2027. Management believes that there will be no difficulty in the extension of the certificate of landrights since all the landrights were acquired legally and supported by sufficient evidence of ownership. In 2002 and 2001, the addition of land of Rp 220,685,580 and Rp 1,753,645,426 consist of land located in Semarang of 24,120 square meters and in Karawang 1,962.60 square meters. The ownership certificate processing of the land is still in progress. Deduction in 2011 represents the deduction of property, plant and equipments which financial statements were no longer consolidated in 2011 due to the Subsidiary (PT Texmaco Jaya Tbk) is stated at bankruptcy and insolvency so it caused that the Company have lost of control (Note 46). Machinery and equipment construction in progress as of December 31, 2011 of Rp 28,346,412,332 are connected with the increasing of the Company’s filament yarn and fiber capacity. Up to December 31, 2011, the percentage of completion for this project is approximately 74% and will be completed in 2012. Management believes that there is no impediment to the completion of the contruction in progress. Machinery and equipment construction in progress as of December 31, 2010 of Rp 16,096,195,720 are connected with the Company’s development in the new product yarn (SILKRA’s branded) and the Company’s Batch Poly capacity. These have been completed in August 2011 and December 2011, respectively. As of December 31, 2011 and 2010, all of the Company and its Subsidiaries’ property, plant and equipment, except land were insured with PT Asuransi Rama Satria Wibawa from loss and other risks including earthquake valuing in total US$ 561,520,000 and US$ 571,850,000 plus Rp 2,813,350,000, respectively. The Company and its Subsidiaries’ management, the sum insured as stated above is adequate to cover possible losses arising from such risks. As of December 31, 2011, the fair value of land (762,538 sqm) based on NJOP (Tax Object Market Value) is Rp 228,498,206,000 and the fair value of building (210,582 sqm) based on NJOP is Rp 145,565,456,000. And as of December 31, 2010, the fair value of land (1,119,661 sqm) based on NJOP (Tax Object Market Value) is Rp 315,500,995,000 and the fair value of building (375,458 sqm) based on NJOP is Rp 235,422,046,000. Based on the appraisal’s report of KJPP Wilson and Rekan dated January 30, 2012, total market value of the Company’s land, building and improvement were Rp 444,212,000,000. And based on the appraisal’s report of Nirboyo A., Dewi A. & Rekan dated January 19, 2012, total market value of machinery and transportation equipment in Karawang is US$ 274,860,902 (equivalent to Rp 2,492,438,659,336).
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
56
16. PROPERTY, PLANT AND EQUIPMENT (Continued) Based on the appraisal’s report of Nirboyo A., Dewi A. & Rekan dated January 20, 2010, total market value of the Company’s property, plant and equipment (except for office equipments) are US$ 591,782,199. In 2011, All of the Company’s land, machinery and equipment are used as collateral for secured bond holders and working capital loans from Damiano Investments BV., Netherland and PT Bina Prima Perdana (BPP) / PT Perusahaan Pengelola Asset (PPA) (Notes 18 and 26). And in 2010, All of the Company and Subsidiaries’ land, machinery and equipment are used as collateral for the secured bond holders, working capital loans and notes payable from Damiano Investments BV., Netherland and PT Bina Prima Perdana (BPP) / PT Perusahaan Pengelola Asset (PPA) (Notes 18, 20 and 26).
17. BANK LOANS
2 0 1 1 2 0 1 0 Rp Rp Related Party : Damiano Investment BV., Netherland (US$ 70,339,624 in 2011 and US$ 48,046,644 in 2010) 637,839,711,337 431,987,380,441
According to the amendment loan agreement dated March 3, 2006 and August 31, 2006 between the Company (Borrower), and Damiano Investments BV., Netherland (Lender), and PT Ferrier Hodgson (Monitoring Agent), the lender agreed to provide the Letter of Credit facility in the aggregate principal amount of US$ 50,000,000. Accordingly, the Company can also use the lender name as guarantor for opening Letter of Credit in Barclays Bank Plc, Hongkong (Barclays). In addition, the Company should pay a financing fee of 2.25% per month on the aggregate amounts of the facility in Barclays to Damiano Investments BV., Netherland. Further, based on the amendment loan agreement dated January 1, 2009 between the Company (Borrower), and Damiano Investments BV., Netherland (Lender), and PT Ferrier Hodgson (Monitoring Agent), from April 3, 2009 onwards, any and all references to “Barclays Letter of Credit Facility” shall be moved to “Deutsche Bank AG : Letter of Credit Facility”. The fee charges by Damiano Investments BV., Netherland on this facility was 1.50% per month. The Letter of Credit facility always changed based on the Company’s requirements for purchasing of raw materials. Based on the last amendment loan agreement dated April 8, 2011 between the Company (Borrower) and Damiano Investments BV., Netherland (Lender), and PT Ferrier Hodgson (Monitoring Agent), the lender agreed to increase the Letter of Credit facility in the aggregate principal amount from US$ 50,000,000 to US$ 80,000,000.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
57
17. BANK LOANS (Continued) The availability of facility as of December 31, 2011 and 2010 were US$ 76,934,921 and US$ 50,717,707, respectively. And the letter of credit is used by the Company to purchase of raw materials totaling US$ 70,339,624 (equivalent to Rp 637,839,711,337) in 2011 and US$ 48,046,644 (equivalent to Rp 431,987,380,441) in 2010, respectively. For the years ended December 31, 2011 and 2010, a fee on Bank Loan has been recognized in the amount of Rp 91,061,129,517 and Rp 73,156,430,350, respectively, and is presented as part of interest expense and bank charges accounts in the consolidated statements of comprehensive income (Note 44). All bank loans from Damiano Investments BV., Netherland are collateralized by the Company’s trade receivables and inventories (Notes 7 and 9). The fair value of these short-term financial liabilities is not individually determined as the carrying amount is considered a reasonable approximation of fair value.
18. SECURED DEBTS 2 0 1 1 2 0 1 0 Rp Rp Bonds : A. 13% Guaranteed Secured Notes US$ 122,526,000 1,111,065,768,000 1,101,631,266,000 B. US$ 50,000,000 Secured Floating Rate Notes 453,400,000,000 449,550,000,000 C. 9.375% Guaranteed Secured Notes US$ 250,000,000 2,267,000,000,000 2,247,750,000,000 D. 11.375% Guaranted Secured Notes US$ 260,000,000 2,357,680,000,000 2,337,660,000,000
6,189,145,768,000 6,136,591,266,000
PT Bina Prima Perdana
PT Bank Negara Indonesia (Persero) Tbk Rupiah 1,302,583,907,331 1,302,583,907,331 US$ 29,055,834 263,478,302,712 261,241,003,494 EUR 849,872 9,976,649,920 10,160,902,370 YEN 3,001,711,400 350,609,346,911 331,044,642,263
1,926,648,206,874 1,905,030,455,458
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
58
18. SECURED DEBTS (Continued) 2 0 1 1 2 0 1 0 Rp Rp Banks
Damiano Investments BV., Netherland (Ex. PT Bank Finconesia) EUR 7,471,539 87,708,321,891 89,328,151,552
Damiano Investments BV., Netherland (Ex. Union Europeene de CIC, Singapore) EUR 5,941,395 69,745,974,836 71,034,069,241
Damiano Investments BV., Netherland (Ex. Credit Agricole Indosuez, Singapore) US$ 12,117,088 109,877,757,060 108,944,741,260
Damiano Investments BV., Netherland (Ex. Bangkok Bank, Singapore) US$ 3,303,097 29,952,487,042 29,698,148,543
297,284,540,829 299,005,110,596
Tim Pemberesan (TP) PT Bank Negara Indonesia (Persero) Tbk US$ 78,628,322 713,001,627,708 706,947,246,882 Rupiah 41,968,807,083 41,968,807,083 EUR 1,426,173 16,741,818,216 17,051,019,567 CHF 45,902 442,327,333 440,670,915
772,154,580,340 766,407,744,447
Total 9,185,233,096,043 9,107,034,576,501
On November 30, 2001, the Company entered into Definitive Memorandum of Agreement (MOA) with the noteholders regarding the restructuring plan of the Company. However, it has not yet been executed by the Company, and the MOA automatically terminated. However, on March 14, 2007, the Company has issued a new SDRP (Secured Debt Restructure Proposal) to its secured creditors for the restructure of its Secured debts including the bonds. Up to March 2012, the Company has not obtained the approval from the secured creditors, particularly from PPA (28% of total secured debt) has not given their decision on restructuring settlement. In July 2007, the Company submitted a Secured Debt Restructure Plan (SDRP) to its secured creditors comprising of secured bond holders and PPA. However, PPA has not approved this SDRP till March 2012, though the same is being supported by Damiano Investments BV., Netherland. Damiano Investments BV., Netherland currently hold approximately 93% of the secured bonds and banks, other than PPA. In November 2010 and December 2010, PPA announced a “Sale of Texmaco Assets and Shares” programme which includes the fixed assets held as security by PPA in the Company-Semarang’s site. However for some reasons in December 2010, the programme was called-off and cancelled.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
59
18. SECURED DEBTS (Continued) A. 13% Guaranteed Secured Notes, US$ 122,526,000.
The Company issued US$ 125,000,000 Unsecured Senior Notes in June 1994 carrying an interest rate of 13% per annum. The notes are due for repayment in 2001. In May 1996, the Company offered to the holders of the said unsecured notes to exchange their notes with 13% Guaranteed Senior Notes due in 2001 which were listed in Luxembourg Stock Exchanges and issued by PIFC with the Company as the guarantor. All holders of the unsecured notes exchanged their notes with the new secured notes except for the holders of unsecured notes amounting to US$ 2,474,000. In August 1997, the Company paid part of the 13% Unsecured Senior Notes amounting to US$ 1,250,000.
B. Secured Floating Rates Notes, US$ 50,000,000.
In February 1996, PIFC, with the Company as a guarantor, issued the US$ 50,000,000 Secured Floating Rate Notes which were listed in Luxembourg Stock Exchanges with carrying an interest rate of 3% above LIBOR and were due in 1999.
C. 9.375% Guaranteed Secured Notes, US$ 250,000,000.
In July 1997, PIFC, with the Company as a guarantor, issued the US$ 250,000,000 Guaranteed Secured Notes due in 2007 which were listed in Luxembourg Stock Exchange with carrying an interest rate of 9.375% per annum. The proceeds from issuance of these notes were used to finance a portion of phase I of the Company’s expansion program.
D. 11.375% Guaranteed Secured Notes, US$ 260,000,000.
In June 1996, PIFC, with the Company as a guarantor, issued the US$ 260,000,000 Guaranteed Secured Notes due in 2006 which were listed in Luxembourg Stock Exchange. The notes carry an interest rate of 11.375% per annum. The proceeds from issuance of these notes were used to pay off other debts and loans.
Currently all these notes have been delisted from Luxembourg Stock Exchanges and are secured by liens of the collateral, which consist of real property, moveable assets (other than inventories) and proceeds of collateral on a pari-passu basis with the other notes payable and obligations of the Company (Note 16). Loans to PT Bina Prima Perdana (BPP) represent loans from PT Bank Negara Indonesia (Persero) Tbk which had been defaulted and transferred to IBRA. Further, pursuant to debt restructuring scheme in Master Restructuring Agreement (MRA) dated May 23, 2001, in 2002 the Company’s debts to IBRA have been transferred to BPP. For this transfer, BPP issued Exchangeable Bond (EB) to IBRA. But, on February 26, 2004, IBRA issued a letter of default notice to PT Bina Prima Perdana. The letter stated that PT Bina Prima Perdana as the textile holding company had failed to pay the Exchangeable Bond (EB) coupons due on August 18, 2003.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
60
18. SECURED DEBTS (Continued) The Company did not recognize the interest expenses on secured debts since 2004 since the Company is under restructuring process, and the interest payable will not be counted. As of December 31, 2011 and 2010, the interest payable of Rp 380,648,007,290 was presented as part of accrued expenses in the consolidated statements of financial position. The breakdown of secured debts by currency is as follows: 2 0 1 1 2 0 1 0 Rp Rp United States Dollar (USD 805,630,342 in 2011 and 2010) 7,305,455,942,522 7,243,422,406,179 European Euro (EUR 15,688,978 in 2011 and 2010) 184,172,764,863 187,574,142,730 Japan Yen (JPY 3,001,711,400 in 2011 and 2010) 350,609,346,911 331,044,642,263 Swiss Franc (CHF 45,902 in 2011 and 2010) 442,327,333 440,670,915 Rupiah 1,344,552,714,414 1,344,552,714,414
Total 9,185,233,096,043 9,107,034,576,501
The fair value of these short-term financial liabilities is not individually determined as the carrying amount is considered a reasonable approximation of fair value.
19. SHORT–TERM LOANS
2 0 1 1 2 0 1 0 Rp Rp Working capital loan facility : PT Bina Prima Perdana : PT Bank Negara Indonesia (Persero) Tbk Hong Kong Branch (US$ 18,587,500) − 167,120,212,500
Pekalongan Branch − 53,122,755,829
Karawang Branch − 88,695,795
PT Bank Dharmala − 8,000,000,000
Carried forward − 228,331,664,124
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
61
19. SHORT–TERM LOANS (Continued) 2 0 1 1 2 0 1 0 Rp Rp Working capital loan facility (Continued)
PT Bina Prima Perdana (Continued)
Brought forward − 228,331,664,124
PT Bank Putera Multikarsa − 1,197,490,480
Catora International BV., Netherlands, (US$ 400,000 in 2010)
−
3,596,400,000
Damiano Investments BV., Netherlands, (US$ 200,000 in 2010)
−
1,798,200,000
Total working capital loans − 234,923,754,604
Letter of Credit facility :
PT Bina Prima Perdana : PT Bank Duta − 28,175,026,153
PT Bank Putera Multikarsa (US$ 1,670,669.38) − 15,020,988,397
Total − 43,196,014,550
Others :
PT Bank Sumitomo Mitsui Indonesia (US$ 1,906,484) − 17,141,197,649
PT Bank Negara Indonesia (Persero) Tbk (US$ 198,595 and Rp 27,115,346,119) − 28,900,913,875
Jumlah lain-lain − 46,042,111,524
Total letter of credit facility − 89,238,126,074
Total − 324,161,880,678
Loans to PT Bina Prima Perdana (BPP) represent loans to PT Bank Negara Indonesia (Persero) Tbk, PT Bank Dharmala and PT Bank Putera Multikarsa which have been default and transferred to IBRA. Pursuant to the debt restructuring scheme of the Master Restructuring Agreement (MRA) dated May 23, 2001, the Subsidiaries’ debts to IBRA are to transferred to BPP in 2002. For this transfer, BPP issued Exchangeable Bond (EB) to IBRA.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
62
19. SHORT–TERM LOANS (Continued) On November 30, 2001, the Subsidiary entered into Definitive Memorandum of Agreement (MOA) with the bondholders and IBRA for restructuring plan of Subsidiary. However, it has not yet been executed by the Subsidiary and the MOA could be automatically terminated. On February 26, 2004, IBRA issued a letter of default notice to PT Bina Prima Perdana. The letter stated that PT Bina Prima Perdana as the textile holding company has failed to pay the Exchangeable Bond (EB) coupons due on August 18, 2003. On February 27, 2004, IBRA was dissolved by the Government. The outstanding or unfinished affairs under the handling of IBRA were transferred to a company called PT Perusahaan Pengelola Assets (Assets Management Company) for further management and restructuring process under the supervision of the Ministry of Finance. The significant information relating to the loans are as follows : a. Working Capital Loan Facility
PT Bank Negara Indonesia (Persero) Tbk (BNI) The Subsidiary did not recognize the interest expense incurred from the short-term loan from PT Bank Negara Indonesia (Persero) Tbk (BNI) since 2004 due to the Subsidiary is under the restructuring process, and the interest payables will not be counted. As of December 31, 2010, the Subsidiary has interest payables of amounting to Rp 50,280,187,912 plus US$ 9,031,692.27, and was presented as part of accrued expenses in the consolidated statements of financial position. PT Bank Dharmala The Subsidiary did not recognize the interest expense incurred from the short-term loan from PT Bank Dharmala since 2004 due to the Subsidiary is under the restructuring process, and the interest payables will not be counted. As of December 31, 2010, the Subsidiary has interest payables of Rp 7,856,714,054, and was presented as part of accrued expenses in the consolidated statements of financial position. PT Bank Putera Multikarsa The Subsidiary did not recognize the interest expense incurred from the short-term loan from PT Bank Putera Multikarsa since 2004 due to the Subsidiary is under the restructuring process, and the interest payables will not be counted. As of December 31, 2010, the Subsidiary has interest payable of Rp 98,149,297, and was presented as part of accrued expenses in the consolidated statements of financial position.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
63
19. SHORT–TERM LOANS (Continued) a. Working Capital Loan Facility (Continued)
Catora International BV., Netherlands On January 27, 2006, the Subsidiary obtained a short term working capital loan facility amounting US$ 500,000 from Catora International B.V., Netherlands (“CIBV.”) for the purchase of raw materials (import and local) and to meet some of critical operational expenses such as wages, electricity etc. This facility bears interest rate 18% p.a. with the final repayment due on August 31, 2006, and is secured by inventories under fiduciary in favour of CIBV. at a minimal amount of US$ 750,000. The facility had been amended on August 2006 to provide the Subsidiary with total credit facility up to US$ 750,000 and the final repayment due on May 31, 2007. During 2007, the Company has paid US$ 200,000 on August 14, 2007 and US$ 100,000 on September 13, 2007. During 2008, the Subsidiary has paid US$ 50,000 on April 9, 2008. Subsequently, the loan was assigned in favour of Mr. Marimutu Sinivasan as per the assignment agreement dated July 29, 2008. As of December 31, 2010, the Subsidiary has not paid the remaining working capital loan amounting to US$ 400,000 which is already due because of financial difficulties and cash flow problem. This agreement has not yet been renewed. As of December 31, 2010, the Subsidiary has interest payables were US$ 149,946 (equivalent with Rp 1,348,164,450), and was presented as part of accrued expenses in the consolidated statements of financial position. For the period ended August 19, 2011, interest expense of short-term loans from Catora International BV., Netherland amounted to US$ 51,333 (equivalent to Rp 425,399,333) and was presented as part of discountinued operations financial statements from Subsidiary (Note 46). And for the year ended December 31, 2010, interest expense of short-term loans from Catora International BV., Netherland amounted to US$ 81,111 (equivalent to Rp 736,238,222) and was presented as part of interest expenses and bank charges in the consolidated statements of comprehensive income (Note 44). Damiano Investment BV., Netherlands Based on the loan agreement dated January 8, 2008 among the Subsidiary (Borrower), Damiano Investments BV., Netherland (Lender), and PT Ferrier Hodgson (Monitoring Agent), the lender agreed to provide working capital loan facility in the aggregate principal amount of US$ 1,000,000. The interest chargeable in this loan is 25% per annum, repayable in six (6) months after the date of execution or due on August 2008. On August 14, 2008 and September 1, 2008, the Subsidiary has paid US$ 700,000 and US$ 100,000 respectively. As of December 31, 2011 and 2010, the Subsidiary has not paid the remaining balance of US$ 200,000 respectively due to financial difficulties or cash flow problem.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
64
19. SHORT–TERM LOANS (Continued) a. Working Capital Loan Facility (Continued)
Damiano Investment BV., Netherlands (Continued) As of December 31, 2010, the Subsidiary has interest payables were US$ 174,194 (equivalent with Rp 1,566,177,417), and was presented as part of accrued expenses in the consolidated statements of financial position. For the period ended August 19, 2011, interest expense on short-term loans from Damiano Investment BV., Netherland amounted to US$ 35,645 (equivalent to Rp 287,763,423) and was presented as part of discountinued operations financial statements from Subsidiary (Note 46). And for the year ended December 31, 2010, interest expense on short-term loans from Damiano Investment BV., Netherland amounted to US$ 56,327 (equivalent to Rp 553,146,917) and was presented as part of interest expenses and bank charges in the consolidated statements of income (Note 44).
b. Letter of Credit Facility
PT Bank Negara Indonesia (Persero) Tbk (BNI) In August 2000, the Subsidiary obtained Letter of Credit facilities from PT Bank Negara Indonesia (Persero) Tbk (BNI) with a maximum credit of US$ 100,000,000 for importing raw materials, supplies and consumable goods for textile and chemical industries. The Letter of Credit Facility provided by BNI guaranteed by IBRA, was stopped by BNI in March 2003. The Subsidiary did not recognize the interest expense incurred from the short-term loan from PT Bank Negara Indonesia (Persero) Tbk (BNI) since 2004 due to the Subsidiary is under the restructuring process, and the interest payables will not be counted. As of December 31, 2010, the Subsidiary had interest payables of Rp 17,414,256,284 plus US$ 56,730.30, respectively, and was presented as part of accrued expenses in the consolidated statements of financial position. PT Bank Duta and PT Bank Sumitomo Mitsui Indonesia The Subsidiary did not recognize the interest expense incurred from the short-term loan from PT Bank Duta and PT Bank Sumitomo Mitsui Indonesia since 2004 due to the Subsidiary is under the restructuring process, and the interest payables will not be counted. As of December 31, 2010, the Subsidiary had interest payables of Rp 22,512,136,671 plus US$ 89,072.89, and was presented as part of accrued expenses in the consolidated statements of financial position. The Letter of Credit facilities from PT Bank Duta and PT Bank Sumitomo Mitsui Indonesia are categorized as BPPN/PPA secured debt.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
65
19. SHORT–TERM LOANS (Continued) b. Letter of Credit Facility (Continued)
PT Bank Putera Multikarsa The Subsidiary did not recognize the interest expense incurred from the short-term loan from PT Bank Putera Multikarsa since 2004 due to the Subsidiary is under restructuring process, and the interest payables will not be counted. As of December 31, 2010, the Subsidiary had interest payables of US$ 73,997.97, and was presented as part of accrued expenses in the consolidated statements of financial position. The letter of credit facilities from PT Bank Putra Multikarsa is categorized as BPPN/PPA unsecured debt.
Deduction in 2011 represents the deduction of short-term loans which financial statements were no longer consolidated in 2011 due to the Subsidiary (PT Texmaco Jaya Tbk) is stated at bankruptcy and insolvency so it caused that the Company have lost of control (Note 46). The fair value of these short-term financial liabilities is not individually determined as the carrying amount is considered a reasonable approximation of fair value. The above short-term loans are collateralized by the Subsidiary’s trade receivables, inventories, property, plant and equipment, personal guarantees of the directors of the Subsidiary, and a pledge of 5,000,000 shares of the Subsidiary (Notes 7, 9 and 16).
20. NOTES PAYABLE
2 0 1 1 2 0 1 0 Rp Rp PT Bina Prima Perdana : US Dollar (US$ 5,000,000) – 44,955,000,000 Rupiah – 37,026,286,647
– 81,981,286,647
Others : US Dollar (US$ 11,141,085) – 100,169,497,841
Total – 182,150,784,488 Less : currently maturing of notes payable – (182,150,784,488 )
Long-term notes payable – –
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
66
20. NOTES PAYABLE (Continued)
2 0 1 1 2 0 1 0 Rp Rp Discounted interest rate : Rupiah – 18.75% US Dollar – 10.50% Due to the suspension of the bank operations as noteholders in 1999, the loans have been transferred to IBRA for administration. Pursuant to the debt restructuring scheme of the Master Restructuring Agreement (MRA) dated May 23, 2001, the Subsidiary’s debts to IBRA are to be transferred to a new holding company (NewCo), BPP in 2002. For this transfer, PT Bina Prima Perdana issued Exchangeable Bond (EB) to IBRA. The above notes payable are unsecured. The arranger of the notes payable is PT Asia Kapitalindo Securities. On February 26, 2004, IBRA issued a letter of default notice to PT Bina Prima Perdana. The letter stated that PT Bina Prima Perdana as the textile holding company has failed to pay the Exchangeable Bond (EB) coupons due on August 18, 2003. On February 27, 2004, IBRA was dissolved by the Government. The outstanding or unfinished affairs under the handling of IBRA were transferred to a company called PT Perusahaan Pengelola Assets (Assets Management Company) for further management and restructuring process under the supervision of the Ministry of Finance. The Subsidiary did not recognize the interest expense incurred from the notes payable since 2004 due to the Subsidiary is under restructuring process, and the interest payables will not be counted. As of December 31, 2010, the Subsidiary has interest payables of US$ 732,349 plus Rp 3,082,246,608, and was presented as part of accrued expenses in the consolidated statements of financial position. Deduction in 2011 represents the deduction of notes payable which financial statements were no longer consolidated in 2011 due to the Subsidiary (PT Texmaco Jaya Tbk) is stated at bankruptcy and insolvency so it caused that the Company have lost of control (Note 46). The above notes payable are collateralized by the Subsidiary’s property, plant and equipment (Note 16). The fair value of these short-term financial liabilities is not individually determined as the carrying amount is considered a reasonable approximation of fair value.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
67
21. TRADE PAYABLES
This account consist of :
Third parties : 2 0 1 1 2 0 1 0 Rp Rp Local suppliers 146,206,580,414 110,708,669,156 Foreign suppliers 69,601,691,965 112,371,625,780
Total 215,808,272,379 223,080,294,936
A summary of the aging of trade payables to third parties based on the date of invoice is as follows : 2 0 1 1 2 0 1 0 Rp Rp Up to 1 month 173,755,827,533 140,797,703,928 > 1 month – 3 months 25,492,631,181 22,153,838,109 > 3 months – 6 months 3,230,837,254 4,763,942,026 > 6 months – 1 year 4,464,633,683 3,833,188,907 > 1 year 8,864,342,728 51,531,621,966
Total 215,808,272,379 223,080,294,936
The details of trade payables to third parties based on currencies are as follows : 2 0 1 1 2 0 1 0 Rp Rp Rupiah 35,088,919,356 117,868,634,044 United States Dollar (US$ 19,653,155 in 2011 and US$ 11,091,004 in 2010) 178,214,810,634 99,719,215,335 European Euro (EUR 136,455 in 2011 and EUR 419,905 in 2010)
1,601,842,214
5,020,384,712
Singapore Dolar (SGD 32,654 in 2011 and SGD 20,022 in 2010) 227,728,473 139,772,963 Japan Yen (Yen 3,779,861 in 2011 and Yen 1,431,156 in 2010) 442,243,747 157,427,188
Carried forward 215,575,544,424 222,905,434,242
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
68
21. TRADE PAYABLES (Continued) 2 0 1 1 2 0 1 0 Rp Rp Brought forward 215,575,544,424 222,905,434,242
Great British Poundsterling (GBP 16,660 in 2011 and GBP 11,788 in 2010)
232,727,955
163,781,365
Swiss Franc (CHF 1,154 in 2010) − 11,079,329
Total 215,808,272,379 223,080,294,936
Trade payables to third parties local and foreign suppliers represent payables for purchase of raw materials and indirect materials. These are non-interest bearing with clear terms of repayments. The fair value of these short-term financial liabilities is not individually determined as the carrying amount is considered a reasonable approximation of fair value. There are no collateral on the trade payables.
22. LIABILITIES FOR PURCHASE OF PROPERTY, PLANT AND EQUIPMENT
This account represents liabilities for purchase of machinery in relation to the Subsidiary’s project expansion : 2 0 1 1 2 0 1 0 Rp Rp Third party : Juki Singapore Pte. Ltd., Singapore (US$ 30,476) − 274,011,964
Deduction in 2011 represents the deduction of liabilities for purchase of property, plant and equipment which financial statements were no longer consolidated in 2011 due to the Subsidiary (PT Texmaco Jaya Tbk) is stated at bankruptcy and insolvency so it caused that the Company have lost of control (Note 46). The fair value of these short-term financial liabilities is not individually determined as the carrying amount is considered a reasonable approximation of fair value.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
69
23. TAXATION
a. Prepaid Taxes
2 0 1 1 2 0 1 0 Rp Rp Overpayment of corporate income tax 2008 − 939,157,520
2009 − 19,081,272,984
2010 35,940,392,206 36,127,382,770 2011 36,167,173,650 −
Value added Tax 47,303,934,689 70,362,406,844
Total 119,411,500,545 126,510,220,118
b. Taxes Payable
2 0 1 1 2 0 1 0 Rp Rp Income tax article 21 944,064,792 2,184,914,372 Income tax article 23 585,759,082 1,096,242,154 Income tax article 26 2,311,914,393 2,331,116,769 Income tax article 4(2) − 14,072,093
Value added tax 13,725,782,678 15,110,236,740 Tax Penalty − 1,948,244,068
Total 17,567,520,945 22,684,826,196
c. Corporate Income Tax
A reconciliation between profit (loss) before income tax as shown in the statements of comprehensive income and estimated taxable profit (loss) which was calculated by the Company for the years ended December 31, 2011 and 2010 are as follows : 2 0 1 1 2 0 1 0 Rp Rp Profit (loss) before income tax as per consolidated Statements of comprehensive income (113,868,012,074) 278,835,698,542 Profit before income tax of the Subsidiaries − (5,898,258,382)
Elimination with discountinued operations (1,110,367,644,627) −
Profit (loss) before income tax of the Company (1,224,235,656,701) 272,937,440,160
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
70
23. TAXATION (Continued)
c. Corporate Income Tax (Continued) 2 0 1 1 2 0 1 0 Rp Rp Fiscal adjustments consisted of : Permanent difference : Non deductible expenses/(non taxable income) : Allowance for impairment (274,213,845) 303,000,000 Entertainment and representation 933,029,594 995,746,157 Donation 173,275,000 1,330,326,800 Tax expense 21,806,504,613 19,984,675,315 Payables’ written-off (3,095,834,930) (2,857,939,005) Interest income (185,188,989) (232,252,259)
19,357,571,443 19,523,557,008
Timing differences : Depreciation expense of property, plant and equipment 218,295,231,725 228,903,442,854 Amortization of deferred charges (310,582,360) (326,928,800) Employees’ Benefit Liabilities 19,159,732,318 12,733,171,392
237,144,381,683 241,309,685,446
Estimated taxable profit (loss) for the year before fiscal loss carry forward (967,733,703,575) 533,770,682,614 Fiscal loss carry forward (1,572,588,299,302) (2,115,037,888,998)
Total estimated accumulated taxable loss (2,540,322,002,877) (1,581,267,206,384)
Estimated corporate income tax – –
Prepaid taxes : Income tax article 22 (36,167,173,650) (35,940,392,206)
Estimated overpayment of corporate income tax of the Company (36,167,173,650) (35,940,392,206)
Estimated overpayment of corporate income tax of the Subsidiaries – (186,990,564)
Taxable profit for the year ended December 31, 2010 as reported in the 2010 corporate income tax return amounted to Rp 548,419,183,287. For this discrepancy, the Company did not make any correction to the corporate income tax return.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
71
23. TAXATION (Continued)
d. Deferred Tax The calculation of deferred tax assets and deferred tax liabilities with the maximum tax tariff of 25% in 2011 and 2010 are as follows :
2 0 1 1 Credited (charged)
to the consolidated statements of As of comprehensive As of
December 31, 2010 income Deconsolidation December 31, 2011
Rp Rp Rp Rp
Deferred tax assets (liabilities) : The Company :
Accumulated taxable loss 395,316,801,596 239,763,699,123 − 635,080,500,719
Valuation allowance (395,316,801,596) (239,763,699,123) − (635,080,500,719)
Depreciation expense of property, plant and equipment (106,405,425,764
) 54,573,807,932
− (51,831,617,832 )
Amortization of deferred charges 1,931,332,943 (77,645,590) − 1,853,687,353
Employees’ benefit liabilities 14,619,550,797 4,789,933,079 − 19,409,483,876
Total – the Company (89,854,542,024) 59,286,095,421 − (30,568,446,603)
The Subsidiaries :
TJ 31,129,463,036 (2,983,656,808) (28,145,806,228) −
TGB 163,770,812 − (163,770,812) −
Foreign Subsidiaries − 52,363,436 − 52,363,436
Total – the Subsidiaries 31,293,233,848 (2,931,293,372) (28,309,577,040) 52,363,436
Total deferred tax liabilities – net (58,561,308,176) 56,354.802,049 (28,309,577,040) (30,516,083,167)
2 0 1 0 Credited (charged) to the consolidated
statements of As of comprehensive As of
December 31, 2009 Income December 31, 2010
Rp Rp Rp
Deferred tax assets (liabilities) : The Company :
Accumulated taxable loss 615,881,612,845 (220,564,811,249) 395,316,801,596 Valuation allowance (615,881,612,845) 220,564,811,249 (395,316,801,596 )
Depreciation expense of property, plant and equipment (163,631,286,477
) 57,225,860,713
(106,405,425,764
)
Amortization of deferred charges 2,013,065,143 (81,732,200) 1,931,332,943
Employees’ benefit liabilities 11,436,257,949 3,183,292,848 14,619,550,797
Total – the Company (150,181,963,385) 60,327,421,361 (89,854,542,024 )
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
72
23. TAXATION (Continued)
d. Deferred Tax (Continued) 2 0 1 0 Credited (charged)
to the consolidated statements of
As of comprehensive income As of December 31, 2009 for the year December 31, 2010
Rp Rp Rp
The Subsidiaries : TJ 35,315,733,016 (4,186,269,980) 31,129,463,036
TGB 163,770,812 − 163,770,812
Total – the Subsidiaries 35,479,503,828 (4,186,269,980) 31,293,233,848
Total deferred tax liabilities – net (114,702,459,557) 56,141,151,381 (58,561,308,176 )
Deduction in 2011 represents deduction of deferred tax assets which financial statements were no longer consolidated in 2011 due to the Subsidiary (PT Texmaco Jaya Tbk) is stated at bankruptcy and insolvency so it caused that the Company have lost of control (Note 46). The recognition of the Company and its Subsidiaries’ deferred tax assets is based on management’s estimates of the results of future operations including an estimate of output levels and commodity prices for the Company and its Subsidiaries’ products, the timing and extent of the reversal certain of the Company and its Subsidiaries’ deferred tax liabilities, and certain tax planning strategies. Based on these estimates, management believes that the Company will not realize its deferred tax asset arising from accumulated taxable loss. Accordingly, the management had made a valuation allowance of Rp 635,080,500,719 and Rp 395,316,801,596 at December 31, 2011 and 2010, respectively.
• A reconciliation between the total tax expense (income) and the amounts computed by applying the effective tax rate to loss before income tax is as follows : 2 0 1 1 2 0 1 0 Rp Rp
Profit (loss) before income tax as per consolidated statements of comprehensive income (113,868,012,074) 278,835,698,542 Profit before income tax of the Subsidiaries − (5,898,258,382)
Elimination with discountinued operations (1,110,367,644,627) −
Profit (loss) before income tax of the Company (1,224,235,656,701) 272,937,440,160
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
73
23. TAXATION (Continued)
d. Deferred Tax (Continued)
2 0 1 1 2 0 1 0 Rp Rp
Tax loss (benefit) at tax rate 25% (306,058,914,175) 68,234,360,040
Taxable profit (loss) at tax rate 25% 241,933,425,893 (133,442,670,653)
Tax effect of non-deductible expense (non-taxable income) 4,839,392,861 4,880,889,252
Tax income of the Company (59,286,095,421) (60,327,421,361) Tax expense of the Subsidiaries − 4,186,269,980
Total tax income – from continuing operations (59,286,095,421 ) (56,141,151,381) Total tax expense – from discountinued operation (Note 46) 2,983,656,808
−
Total tax income – from Foreign Subsidiaries (52,363,436) –
Total tax income (56,354,802,049) (56,141,151,381)
e. Tax Income (Expense)
2 0 1 1 2 0 1 0 Rp Rp Continuing operations : Current income tax : The Company – – Subsidiaries – –
– –
Deferred tax income (expense) : The Company 69,804,825,950 60,327,421,361 Subsidiaries – (4,186,269,980)
69,804,825,950 56,141,151,381
Total tax income – from continuing operations 59,286,095,421 56,141,151,381 Total tax expense – from discountinued operations (Note 46)
(2,983,656,808
)
–
Total tax income – from Foreign Subsidiaries 52,363,436 –
Total tax income 56,354,802,049 56,141,151,381
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
74
23. TAXATION (Continued)
f. Tax Assessment Letter
a. Company
• On November 24, 2011, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor Pelayanan Pajak Wajib Pajak Besar Dua) issued a Value Added Tax assessment letter for fiscal period November 2010. Based on the Indonesian Tax Authorities letter No. 00058/407/10/092/11, the Company had an overpayment of Rp 10,359,423,414. The overpayment of Value Added Tax has been compensated in December 2011 with the November 2010 Value Added Tax liability amounted to Rp 48,621,160. And the remaining of its overpayment amounted to Rp 10,310,802,254 had been received on December 19, 2011.
• On November 24, 2011, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor Pelayanan Pajak Wajib Pajak Besar Dua) issued a Value Added Tax assessment letter for fiscal period October 2010. Based on the Indonesian Tax Authorities letter No. 00026/207/10/092/11, the Company had additional tax liability of Rp 48,621,160. The tax liability had been compensated in December 2011 with the overpayment of November 2010 value added tax.
• On August 24, 2011, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor Pelayanan Pajak Wajib Pajak Besar Dua) issued a Value Added Tax assessment letter for fiscal period September 2010. Based on the Indonesian Tax Authorities letter No. 00051/407/10/092/11, the Company had an overpayment of Rp 8,767,928,486. The overpayment of Value Added Tax has been compensated in September 2011 with the other tax liabilities for fiscal year 2009 with totalling amount of Rp 8,712,581. And the remaining of its overpayment amounted to Rp 8,759,215,905 had been received on September 20, 2011.
• On August 24, 2011, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor Pelayanan Pajak Wajib Pajak Besar Dua) issued a Value Added Tax assessment letter for fiscal period August 2010. Based on the Indonesian Tax Authorities letter No. 00021/207/10/092/11, the Company had additional tax liability of Rp 26,108,522. The tax liability had been paid on September 9, 2011.
• On August 24, 2011, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor Pelayanan Pajak Wajib Pajak Besar Dua) issued a Value Added Tax assessment letter for fiscal period July 2010. Based on the Indonesian Tax Authorities letter No. 00020/507/10/092/11, the Company had no additional tax liability.
• On August 24, 2011, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor Pelayanan Pajak Wajib Pajak Besar Dua) issued a Value Added Tax assessment letter for fiscal period June 2010. Based on the Indonesian Tax Authorities letter No. 00019/507/10/092/11, the Company had no additional tax liability.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
75
23. TAXATION (Continued)
f. Tax Assessment Letter (Continued)
a. Company (Continued)
• On August 24, 2011, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor Pelayanan Pajak Wajib Pajak Besar Dua) issued a Value Added Tax assessment letter for fiscal period May 2010. Based on the Indonesian Tax Authorities letter No. 00018/507/10/092/11, the Company had no additional tax liability.
• On May 18, 2011, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor Pelayanan Pajak Wajib Pajak Besar Dua) issued a Value Added Tax assessment letter for fiscal period April 2010. Based on the Indonesian Tax Authorities letter No. 00035/407/10/092/11, the Company had an overpayment of Rp 13,552,130,826. The overpayment of Value Added Tax has been compensated in May 2011 with the other tax liabilities for fiscal year 2010 with totalling amount of Rp 99,079,275. And the remaining of its overpayment amounted to Rp 13,453,051,551 had been received on June 9, 2011.
• On May 18, 2011, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor Pelayanan Pajak Wajib Pajak Besar Dua) issued a Value Added Tax assessment letter for fiscal period March 2010. Based on the Indonesian Tax Authorities letter No. 00010/207/10/092/11, the Company had an additional tax liability of Rp 1,621,560. The tax liabilities had been paid on December 9, 2011.
• On April 28, 2011, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor Pelayanan Pajak Wajib Pajak Besar Dua) issued an Income Tax Article 21 assessment letter for fiscal year 2009. Based on the Indonesian Tax Authorities letter No. 00018/501/09/511/11, the Company had no additional tax liability.
• On April 28, 2011, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor Pelayanan Pajak Wajib Pajak Besar Dua) issued an Income Tax Article 23 assessment letter for fiscal year 2009. Based on the Indonesian Tax Authorities letter No. 00008/503/09/511/11, the Company had no additional tax liability.
• On April 26, 2011, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor Pelayanan Pajak Wajib Pajak Besar Dua) issued an Income Tax Article 4 (2) assessment letter for fiscal year 2009. Based on the Indonesian Tax Authorities letter No. 00018/540/09/511/11, the Company had no additional tax liability.
• On March 28, 2011, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor Pelayanan Pajak Wajib Pajak Besar Dua) issued a Corporate Income Tax assessment letter for fiscal year 2009. Based on the Indonesian Tax Authorities letter No. 00006/406/09/092/10, the Company had an overpayment of Rp 18,732,214,019. The overpayment of Corporate Income Tax has been compensated in May 2011 with the other tax liabilities for fiscal year 2009 with totalling amount of Rp 4,445,402,669. And the remaining of its overpayment amounted to Rp 14,286,811,350 had been received on May 31, 2011.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
76
23. TAXATION (Continued)
f. Tax Assessment Letter (Continued) a. Company (Continued)
• On March 28, 2011, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor Pelayanan Pajak Wajib Pajak Besar Dua) issued an Income Tax Article 21 assessment letter for fiscal year 2009. Based on the Indonesian Tax Authorities letter No. 00019/201/09/092/11, the Company had additional tax liability of Rp 175,063,304. The tax liability had been compensated in May 2011 with the overpayment of 2009 corporate income tax.
• On March 28, 2011, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor Pelayanan Pajak Wajib Pajak Besar Dua) issued an Income Tax Article 23 assessment letter for fiscal year 2009. Based on the Indonesian Tax Authorities letter No. 00011/203/09/092/11, the Company had additional tax liability of Rp 247,399,209. The tax liability had been compensated in May 2011 with the overpayment of 2009 corporate income tax.
• On March 28, 2011, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor Pelayanan Pajak Wajib Pajak Besar Dua) issued an Income Tax Article 26 assessment letter for fiscal year 2009. Based on the Indonesian Tax Authorities letter No. 00005/204/09/092/11, the Company had additional tax liability of Rp 1,470,055,683. The tax liability had been compensated in May 2011 with the overpayment of 2009 corporate income tax.
• On March 28, 2011, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor Pelayanan Pajak Wajib Pajak Besar Dua) issued an Income Tax Article 4 (2) assessment letter for fiscal year 2009. Based on the Indonesian Tax Authorities letter No. 00008/240/09/092/11, the Company had additional tax liability of Rp 989,042,079. The tax liability had been compensated in May 2011 with the overpayment of 2009 corporate income tax.
• On March 28, 2011, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor Pelayanan Pajak Wajib Pajak Besar Dua) issued a Value Added Tax assessment letter for fiscal year 2009. Based on the Indonesian Tax Authorities letter No. 00008/277/09/092/11, the Company had additional tax liability of Rp 29,348,684. The tax liability had been compensated in May 2011 with the overpayment of 2009 corporate income tax.
• On March 28, 2011, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor Pelayanan Pajak Wajib Pajak Besar Dua) issued a Value Added Tax assessment letter for fiscal period December 2009. Based on the Indonesian Tax Authorities letter No. 00112/207/09/092/11, the Company had additional tax liability of Rp 6,453,266. The tax liability had been compensated in May 2011 with the overpayment of 2009 corporate income tax.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
77
23. TAXATION (Continued)
f. Tax Assessment Letter (Continued) a. Company (Continued)
• On March 28, 2011, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor Pelayanan Pajak Wajib Pajak Besar Dua) issued a Value Added Tax assessment letter for fiscal period February 2009. Based on the Indonesian Tax Authorities letter No. 00111/207/09/092/11, the Company had additional tax liability of Rp 12,784,716. The tax liability had been compensated in May 2011 with the overpayment of 2009 corporate income tax.
• On March 28, 2011, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor Pelayanan Pajak Wajib Pajak Besar Dua) issued a Value Added Tax assessment letter for fiscal period January 2009. Based on the Indonesian Tax Authorities letter No. 00110/207/09/092/11, the Company had additional tax liability of Rp 1,332,826. The tax liability had been compensated in May 2011 with the overpayment of 2009 corporate income tax.
• On February 16, 2011, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor Pelayanan Pajak Wajib Pajak Besar Dua) issued a Value Added Tax assessment letter for fiscal period February 2010. Based on the Indonesian Tax Authorities letter No. 00021/407/10/092/11, the Company had an overpayment of Rp 13,416,773,900. The overpayment of Value Added Tax has been compensated in February 2011 with the other tax liabilities for fiscal year 2010 with totalling amount of Rp 291,202,973. And the remaining of its overpayment amounted to Rp 13,125,570,927 had been received on February 25, 2011.
• On February 16, 2011, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor Pelayanan Pajak Wajib Pajak Besar Dua) issued a Value Added Tax assessment letter for fiscal period January 2010. Based on the Indonesian Tax Authorities letter No. 00003/207/10/092/11, the Company had additional tax liability of Rp 66,860,404. The tax liability had been compensated in February 2011 with the overpayment of February 2010 Value Added Tax.
• On September 30, 2010, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor Pelayanan Pajak Wajib Pajak Besar Dua) issued an Income Tax Article 26 assessment letter for fiscal year 2006. Based on the Indonesian Tax Authorities letter No. 00015/204/06/092/10, the Company had an overpayment of income tax article 26 of Rp 8,844,864,229. In the other that, the company also received the interest of Rp 4,245,534,829. Its totaling of Rp 13,090,399,058 had been received on November 24, 2010. The Indonesian Tax Authorities (Direktorat Jenderal Pajak) have filed a Review Petition (PK) against the verdict of refund. If Review Petition is accepted and approved, the Company has to refund the above amount along with accrued interest. But until the date of report finished, the result has not been determined yet.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
78
23. TAXATION (Continued)
f. Tax Assessment Letter (Continued)
a. Company (Continued)
• On April 21, 2010, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor Pelayanan Pajak Wajib Pajak Besar Dua) issued an Income Tax Article 26 assessment letter for fiscal year 2008. Based on the Indonesian Tax Authorities letter No. 00014/204/08/092/10, the Company had additional tax liability of Rp 20,552,395,501. The tax liability had been compensated in May 2010 with the overpayment of 2008 corporate income tax. Further on July 7, 2010, the Company submits the objection letter to the Indonesian Tax Authorities. Until the date of report finished, the result has not determined yet.
• On April 21, 2010, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor Pelayanan Pajak Wajib Pajak Besar Dua) issued an Income Tax Article 23 assessment letter for fiscal year 2008. Based on the Indonesian Tax Authorities letter No. 00023/203/08/092/10, the Company had additional tax liability of Rp 2,019,141,457. The tax liability had been compensated in May 2010 with the overpayment of 2008 corporate income tax. Further on July 7, 2010, the Company submits the objection letter to the Indonesian Tax Authorities. Until the date of report finished, the result has not determined yet.
• On April 21, 2010, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor Pelayanan Pajak Wajib Pajak Besar Dua) issued an Income Tax Article 21 assessment letter for fiscal year 2008. Based on the Indonesian Tax Authorities letter No. 00019/201/08/092/10, the Company had additional tax liability of Rp 901,815,396. The tax liability had been compensated in May 2010 with the overpayment of 2008 corporate income tax. Further on July 7, 2010, the Company submits the objection letter to the Indonesian Tax Authorities. Until the date of report finished, the result has not determined yet.
g. Administration
• It is noted that value added taxes for fiscal period December 2010 up to August 2011 is under examination by the Tax Authorities, and until the date of report finished, the result has not been determined yet.
• Under the taxation laws of Indonesia, the Company submits tax returns on the basis of self assessment. The tax authorities may access or amend taxes within 5 years of the taxes becoming payable.
• On September 23, 2008, the Government of the Republic of Indonesia approved the new revised Income Tax law effective January 1, 2009. The revision includes among others, changes the effective tax rate from 30% in 2008 to 28% in 2009, and to 25% in 2010.
In addition to the impact on the current income tax for 2009, the revision will also impact the deferred income tax previously set up to reflect the reduction in effective tax rate.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
79
24. ACCRUED EXPENSES 2 0 1 1 2 0 1 0 Rp Rp Interest 381,616,791,445 654,113,644,431 Electricity 18,663,345,797 21,916,392,167 Transportation 6,783,594,689 8,305,844,335 Salary 3,173,520,697 8,652,370,380 Rent 1,212,470,894 1,097,865,207 Others 2,108,195,618 1,600,655,562
Total 413,557,919,140 695,686,772,082
The accrued interest of certain secured debts, short-term loans and notes payable represent interest expenses accrued from the year 2001, 2002 and 2003, while all the unpaid and accrued interest up to 2000 according to the MOA had been waived. The interest expense after the year 2003 has not been recorded by the Company and its Subsidiaries due to the restructuring process that has not yet been completed. In February 2010, PT Perusahaan Listrik Negara (Persero) had filed a petition in The Hight Court of Central Java (Pengadilan Tinggi Jawa Tengah) to the Subsidiary for the recovery of their outstanding amounting to Rp 2,821,800,525 on electricity bill for December 2003 up to September 2004. Until August 19, 2011, the outstanding payable has not yet paid by the Subsidiary. Deduction in 2011 represents the deduction of accrued expenses which financial statements were no longer consolidated in 2011 due to the Subsidiary (PT Texmaco Jaya Tbk) is stated at bankruptcy and insolvency so it caused that the Company have lost of control (Note 46). The details of accrued expenses based on currencies are as follows : 2 0 1 1 2 0 1 0 Rp Rp
Rupiah 411,036,714,332 517,758,001,414 United States Dollar (US$ 278,033 in 2011 and US$ 19,789,653 in 2010)
2,521,204,808
177,928,770,668
Total 413,557,919,140 695,686,772,082
The fair value of these short-term financial liabilities is not individually determined as the carrying amount is considered reasonable approximation of fair value.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
80
25. UNSECURED DEBTS AND NOTES PAYABLE 2 0 1 1 2 0 1 0 Rp Rp
The Hongkong and Shanghai Banking Corporation Limited (US$ 21,945,011 in 2011 and US$ 21,077,129 in 2010) 198,997,359,748 189,504,468,044
The Company has taking steps to implement the Composition Plan (Rencana Perdamaian) as approved by the unsecured creditors of the Company and ratified by the Commercial Court. On September 29, 2006, the unsecured creditors comprising of Banks, PT Bina Prima Perdana, Leasing, and Notes stand at US$ 18,670,630 was restructured into Fixed Rates Notes under custodian of The Hongkong and Shanghai Banking Corporation Limited, Hong Kong. As of December 31, 2011 and 2010, the total restructured unsecured debt were US$ 21,945,011 (equivalent to Rp 198,997,359,748) and US$ 21,077,129 (equivalent to Rp 189,504,468,044), respectively which are comprising of principal notes at US$ 18,670,630 (equivalent to Rp 169,305,272,840 for the year ended December 31, 2011 and Rp 167,867,634,330 for the year ended December 31, 2010) plus unpaid capitalized interest of US$ 3,274,381 (equivalent to Rp 29,692,086,908) in 2011 and US$ 2,406,499 (equivalent to Rp 21,636,833,714) in 2010. The notes are repayable over a period of 9 years from the date of restructure as below :
Years Rate of return
2009 5.0% 2010 17.5% 2011 17.5% 2012 17.5% 2013 20.0% 2014 22.5%
The interest rate for the restructured debt is as below :
Years Interest Rate
2006 2% p.a. 2007 2% p.a. 2008 2% p.a. 2009 and onwards 4% p.a.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
81
25. UNSECURED DEBTS AND NOTES PAYABLE (Continued)
Based on the Minutes of Noteholders’ Meeting between the Company (Borrower) and The Hongkong and Shanghai Banking Corporation Limited (Noteholder) dated January 30, 2009, the Noteholder shall defer the redemption dated of the unsecured debt and notes payable for 3 (three) years by revoking and replacing the table of redemption dates below :
Years Rate of return
2012 5.0% 2013 17.5% 2014 17.5% 2015 17.5% 2016 20.0% 2017 22.5%
Further, based on the Minutes of Noteholders’ Meeting between the Company (Borrower) and The Hongkong and Shanghai Banking Corporation Limited (Noteholder) dated December 23, 2011, the Noteholder shall defer the redemption dated of the unsecured debt and notes payable for 3 (three) years by revoking and replacing the table of redemption dates below :
Years Rate of return
2015 5.0% 2016 17.5% 2017 17.5% 2018 17.5% 2019 20.0% 2020 22.5%
All unsecured debts and notes payable are denominated in US Dollar.
For the years ended December 31, 2011 and 2010, the interest charges on the unsecured debts were Rp 7,554,663,403 and Rp 7,403,114,841, respectively, and are presented as part of interest expense and bank charges in the consolidated statements of comprehensive income (Note 44).
The fair value and the carrying amount of the long-term financial liabilities are as follows :
Fair value Carrying amount Rp Rp
The Hongkong and Shanghai Banking Corporation Limited As of December 31, 2011 181,540,893,506 198,997,359,748 As of December 31, 2010 169,659,438,050 189,504,468,044
The fair value of long-term financial liabilities have been determined by calculating their present value at the consolidated statements of financial position date, using fixed effective market interest rates available to the Company. No fair value changes have been included in consolidated statements of comprehensive income for the period as financial liabilities are carried at amortized cost in the consolidated statements of financial position.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
82
26. WORKING CAPITAL LOANS
2 0 1 1 2 0 1 0 Rp Rp Related Party : Damiano Investments BV., Netherland (US$ 23,000,000 in 2011 and US$ 40,610,862 in 2010) 208,564,000,000 365,132,262,309 Less : Current maturity of long-term liabilities (77,078,000,000 ) (38,958,003,000 )
Long-term liability – net of current maturity 131,486,000,000 326,174,259,309
According to the Composition Plan approved by the creditors, Damiano Investments BV., Netherland has provided US$ 15,000,000 working capital loans for the Company. The interest chargeable on this loan is 9% per annum till the implementation of the Composition Plan. Upon implementation of the Composition Plan, the rate of interest and repayment of the principal amount are as per the terms of the “New Notes / Loan restructure”. The working capital loans have been fully paid by the Company during 2011. In addition to the above working capital loan, Damiano Investments BV., Netherland has also provided US$ 10,687,669.23 as working capital loans to the Company with interest rate of 15% per annum. The part of these working capital loans with totalling of US$ 6,777,924.23 have been repaid by the Company in 2011. Damiano Investments BV., Netherland has also provided US$ 3,336,000 as advances. Based on the termination agreement dated January 1, 2008, Damiano Investments BV., Netherland agreed to reclassify the advances into a working capital loan agreement. Based on the termination deed dated January 1, 2008, Damiano Investments BV., Netherland also agreed to reclassify outstanding amounts of principal and its interest from Catora’s pre-financing facility amounting to US$ 4,000,000 and US$ 2,399,255, respectively into a working capital loan agreement. Based on the third loan agreement dated August 14, 2008 and September 19, 2008, the Company obtained additional working capital loan from Damiano Investments BV., Netherland amounting to US$ 700,000 and US$ 155,000, respectively.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
83
26. WORKING CAPITAL LOANS (Continued) During the year 2009, Damiano Investments BV., Netherland has also provided US$ 1,625,000 as a part of the Third Loan Agreement. The part of these short-term working capital loans with totaling of US$ 1,257,839 have been repaid by the Company in the 2009 while the remaining balance of US$ 367,161 was repaid by the Company in 2010.
During the year 2010, Damiano Investments BV., Netherland has also provided US$ 4,333,000 as part of the Third Loan Agreement for the Company’s capital expenditure. It has been repaid by the Company during February 2011 until June 2011. During the year 2011, Damiano Investments BV., Netherland has also provided US$ 8,500,000 as part of the Third Loan Agreement for the Company’s capital expenditure. It will be repaid by the Company in December 2012. All working capital loans are denominated in US Dollar. For the years ended December 31, 2011 and 2010, the interest charge on the working capital loans from Damiano Investments BV., Netherland were Rp 40,178,444,642 and Rp 39,470,011,450, respectively, and are presented as part of interest expense and bank charges in the consolidated statements of comprehensive income (Note 44). The fair value and the carrying amount of the long-term financial liabilities are as follows :
Fair value Carrying amount Rp Rp
Damiano Investments BV., Netherland
December 31, 2011 : Current maturity of long-term liabilities 75,009,509,860 77,078,000,000 Long-term liability – net of current maturity 122,055,330,344 131,486,000,000
December 31, 2010 : Current maturity of long-term liabilities 38,632,756,444 38,958,003,000 Long-term liability – net of current maturity 309,784,959,246 326,174,259,309 The fair value of long-term financial liabilities have been determined by calculating their present value at the consolidated statements of financial position date, using fixed effective market interest rates available to the Company. No fair value changes have been included in consolidated statements of comprehensive income for the period as financial liabilities are carried at amortized cost in the consolidated statements of financial position. In 2011, working capital loans from Damiano Investments BV., Netherland are collateralized by the Company’s trade receivables, inventories and property, plant and equipments as collateral (Notes 7, 9 and 16). And in 2010, working capital loans from Damiano Investments BV., Netherland are collateralized by the Company’s trade receivables and inventories as collateral (Notes 7 and 9).
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
84
27. OBLIGATION UNDER FINANCE LEASE
Lessors Type of asset 2 0 1 1 2 0 1 0 Rp Rp
PT Perjahl Leasing Indonesia Machinery – 11,092,358,618 PT Piranti Mulia Bisnisindo Machinery – 10,476,194,790 PT Hanil Bakrie Finance Corporation Machinery – 8,723,702,065 PT Koexim Mandiri Finance Machinery – 5,415,629,769 PT GE Astra Finance Machinery – 2,962,237,708
Total – 38,670,122,950
Less : Current maturity of long-term liabilities – (38,670,122,950)
Long-term liability – net of current maturity – –
As of December 31, 2010, the interest rate and lease period are as follows :
Lessor Interest rate Period ended
PT Hanil Bakrie Finance Corporation SIBOR + 2 % 2007 PT Koexim Mandiri Finance SIBOR + 2,55% 2004 PT Perjahl Leasing Indonesia SIBOR + 2,8125% 2003 PT Piranti Mulia Binisindo SIBOR + 2% 2005 PT GE Astra Finance SIBOR + 4,75% for 1999
SIBOR + 2,75% from 2000 until 2002
2002
The future minimum lease payments under finance lease as of December 31, 2011 and 2010 are as follows :
2 0 1 1 2 0 1 0 Rp Rp
Total minimum lease payments – 43,978,549,340 Less : amount representing interest – (5,308,426,390)
Obligation under finance lease – 38,670,122,950 Less : Current maturity of long-term liabilities – (38,670,122,950)
Long-term liability – net of current maturity – –
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
85
27. OBLIGATION UNDER FINANCE LEASE (Continued) In 2007, PT Koexim BDN Finance (formerly PT Koexim Mandiri Finance) had filed a petition to the Hight Jakarta Court for recovery of leased equipment. In 2010, PT Hanil Bakrie Finance Corporation with PT Koexim BDN Financing (Formerly PT Koexim Mandiri Finance) had filed a petition to the District Jakarta Court. And on August 19, 2011, the Commercial Court of Central Jakarta declared that the Subsidiary (PT Texmaco Jaya Tbk) is in state of bankruptcy and insolvency. Deduction in 2011 represents the deduction of obligation under finance lease which financial statements were no longer consolidated in 2011 due to the Subsidiary (PT Texmaco Jaya Tbk) is stated at bankruptcy and insolvency so it caused that the Company have lost of control (Note 46). The fair value of these obligation under finance lease is not individually determined as the the carrying amount is considered a reasonable approximation of fair value. The details of obligation under capital lease based on currencies are as follows : 2 0 1 1 2 0 1 0 Rp Rp United States Dollar (US$ 4,300,981 in 2010) – 38,670,122,950
28. CREDIT FINANCING PAYABLES 2 0 1 1 2 0 1 0 Rp Rp Credit financing payables: PT Andalan Finance Indonesia 414,935,216 601,574,600 PT Astra Sedaya Finance 289,934,102 79,245,841 PT Staco Estetika Sedaya Finance 252,341,940 415,331,575 PT Toyota Astra Financial Service − 75,556,250
Total credit financing payables 957,211,258 1,171,708,266
Less : current maturity of credit financing payables : PT Andalan Finance Indonesia (206,567,540) (186,639,384) PT Staco Estetika Sedaya Finance (185,176,985) (163,234,379) PT Astra Sedaya Finance (125,443,321) (50,050,000) PT Toyota Astra Financial Service − (75,556,250)
Total current maturity of credit financing payables (517,187,846) (475,480,013)
Credit financing payables – net of current maturity 440,023,412 696,228,253
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
86
28. CREDIT FINANCING PAYABLES (Continued) Based on agreement dated August 5, 2008, the Company obtained a credit financing from PT Astra Sedaya Finance for purchasing of a car (Honda All New CRV) amounting to Rp 200,200,000 with interest rate of 8.25% per annum, repayable in monthly installments from August 30, 2008 up to July 30, 2012. As of December 31, 2011 and 2010, the outstanding credit financing payable balances were Rp 29,195,845 and Rp 79,245,841, respectively. Based on agreement dated December 28, 2009, the Company obtained a credit financing from PT Toyota Astra Financial Services for purchasing of a car (Toyota Innova) amounting to Rp 164,850,000 with interest rate of 6.00% per annum, repayable in monthly installments from December 30, 2009 up to November 30, 2011. As of December 31, 2011 and 2010, the outstanding credit financing payable balances were Rp Nil and Rp 75,556,250, respectively. Based on agreement dated May 24, 2010, the Company obtained a credit financing from PT Staco Estetika Sedaya Finance for purchasing of a car (Toyota Fortuner) amounting to Rp 513,000,000 with effective interest rate of 12.83% per annum, repayable in monthly installments from May 28, 2010 up to April 28, 2013. As of December 31, 2011 and 2010, the outstanding credit financing payable balances were Rp 252,341,940 and Rp 415,331,575, respectively. Based on agreement dated December 14, 2010, the Company obtained a credit financing from PT Andalan Finance Indonesia for purchasing of a car (Toyota Innova) amounting to Rp 137,547,400 with effective interest rate of 10.04% per annum, repayable in monthly installments from December 10, 2010 up to November 10, 2013. As of December 31, 2011 and 2010, the outstanding credit financing payable balances were Rp 91,836,615 and Rp 133,141,400, respectively. Based on agreement dated December 14, 2010, the Company obtained a credit financing from PT Andalan Finance Indonesia for purchasing of a car (Toyota Innova) amounting to Rp 137,547,400 with effective interest rate of 10.04% per annum, repayable in monthly installments from December 10, 2010 up to November 10, 2013. As of December 31, 2011 and 2010, the outstanding credit financing payable balances were Rp 91,836,615 and Rp 133,141,400, respectively Based on agreement dated December 14, 2010, the Company obtained a credit financing from PT Andalan Finance Indonesia for purchasing of a car (Toyota Fortuner) amounting to Rp 346,385,800 with effective interest rate of 10.03% per annum, repayable in monthly installments from December 10, 2010 up to November 10, 2013. As of December 31, 2011 and 2010, the outstanding credit financing payable balances were Rp 231,261,986 and Rp 335,291,800, respectively. Based on agreement dated June 16, 2011, the Company obtained a credit financing from PT Astra Sedaya Finance for purchasing of a car (Isuzu Elf) amounting to Rp 185,598,390 with effective interest rate of 10.24% per annum, repayable in monthly installments from July 19, 2011 up to June 19, 2014. As of December 31, 2011, the outstanding credit financing payable balance was Rp 158,471,324.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
87
28. CREDIT FINANCING PAYABLES (Continued) Based on agreement dated June 20, 2011, the Company obtained a credit financing from PT Astra Sedaya Finance for purchasing of a car (Toyota Avanza) amounting to Rp 119,640,000 with effective interest rate of 10.74% per annum, repayable in monthly installments from July 22, 2011 up to June 22, 2014. As of December 31, 2011, the outstanding credit financing payable balance was Rp 102,266,933. The interest expenses incurred on this credit financing for the years ended December 31, 2011 and 2010 were Rp 136,723,195 and Rp 74,093,904, respectively, and is shown as part of the interest expense and bank charges in the consolidated statements of comprehensive income (Note 44). The fair value of the long-term financial liabilities – credit financing payables as of December 31, 2011 and 2010 have been determined by calculating their present value at the consolidated statements of financial position date, using fixed effective market interest rates available to the Company. No fair value changes have been included in consolidated statements of comprehensive income for the period as financial liabilities are carried at amortized cost in the consolidated statements of financial position.
29. OTHER CURRENT LIABILITIES
2 0 1 1 2 0 1 0 Rp Rp Third parties : Advance receipt from customers 16,758,187,956 24,024,047,064 Freight 7,358,516,613 16,023,169,568 Insurance 3,560,869,965 12,024,244,707 Advance receipt for pensiun 2,256,989,205 40,345,843,127 Others 8,638,697,524 8,788,133,170
38,573,261,263 101,205,437,636
Other third parties : PT Citra Indah Textile − 39,491,541,493
PT Bima Peranan Busana − 13,653,484,229
PT Perkasa Heavyndo Engineering − 1,062,557,586
PT Waniaindah Busana Tbk − 128,200,000
PT Texmaco Micro Indoutama − 80,457,768
PT Kreasi Kekar − 43,659,874
− 54,459,900,950
Total 38,573,261,263 155,665,338,586
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
88
29. OTHER CURRENT LIABILITIES (Continued) Deduction in 2011 represents the deduction of other current liabilities which financial statements were no longer consolidated in 2011 due to the Subsidiary (PT Texmaco Jaya Tbk) is stated at bankruptcy and insolvency so it caused that the Company have lost of control (Note 46). The fair value of these short-term financial liabilities is not individually determined as the carrying amount is considered reasonable approximation of fair value.
30. EMPLOYEES’ BENEFIT LIABILITIES On June 20, 2000, the Ministry of Manpower issued Decree No. KEP-150/Men/2000 regarding the settlements of work dismissal and determination of separation, appreciation and compensation payment by entities, which requires companies to pay their employees gratuity and compensation benefits in case of employees resignation based on the employee’s number of years of service and salaries provided the conditions set forth in the decree are met. In April 2003 The Government of the Republic Indonesia issued Labour Law No. 13/2003 replacing the Decree No. KEP-150/Men/2000. In relation to this, as of December 31, 2011 and 2010, the Company has recorded employees’ benefit liabilities as follows. Amounts recognized in consolidated statements of comprehensive income in respect of the employees’ benefits are as follows : 2 0 1 1 2 0 1 0
Rp Rp Current service cost 11,549,756,128 10,608,116,016 Interest costs 8,726,173,129 6,492,026,116 Past service cost 2,105,357,669 1,665,322,019 Losses on curtailments and settlements 717,541,289 440,035,650
Total (Note 42) 23,098,828,215 19,205,499,801
The amounts included in the consolidated statements of financial position arising from the Company’s obligation in respect of the employees’ benefits is as follows : 2 0 1 1 2 0 1 0 Rp Rp Present value of obligations 136,932,453,215 115,172,146,697 Unrecognized past service cost (17,735,309,474) (19,840,667,143) Unrecognized actuarial losses (41,559,208,235) (21,697,566,710)
Net liability 77,637,935,506 73,633,912,844
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
89
30. EMPLOYEES’ BENEFIT LIABILITIES (Continued) Movements in the net liability recognized in consolidated statements of financial position are as follows : 2 0 1 1 2 0 1 0 Rp Rp Beginning of the year 73,633,912,844 59,867,946,890 Balance of unconsolidated subsidiary (14,139,865,271 ) −
Benefits payment (4,954,940,282 ) (5,439,533,847 ) Amount charged to income 23,098,828,215 19,205,499,801
Ending of the year 77,637,935,506 73,633,912,844
The above actuarial assessment was made by PT Sienco Aktuarindo Utama as at December 31, 2011 and 2010 using the following assumptions : Discount rate : 6.90% p.a. in 2011 and 8.90% p.a. in 2010 Mortality rate : The 1980 Commissioners’ Standard Ordinary Mortality Table. Salary growth rate : 8% p.a. in 2011 and 2010 Normal retirement age : 10% in 20 years old and decline until 54 years old Probability of resigned : 1% of mortality rate Fund method : Projected Unit Credit Method Management had reviewed the assumptions used and is in the opinion that the assumptions are reasonable and believed that the provision for severance provided is adequate to cover the potential liability required by Labour Law No. 13/2003.
31. CAPITAL STOCK Pursuant to the notarial deed of Januar Tirtaamidjaja, SH, No. 22 dated February 15, 1984, the authorized capital amounts to Rp 15,000,000,000 consisting of 600 shares with a par value of Rp 25,000,000 each. Issued capital amounts to Rp 7,500,000,000 or 300 shares and fully paid up capital amounts to Rp 1,500,000,000 or 60 shares. Pursuant to the General Shareholders Meeting with notarial deed of Aulia Taufani, SH, No. 100 dated December 27, 2002, the shareholders agreed to approve the changes in the Company’s Articles of Association to increase the authorized capital from Rp 8,500,000,000,000 to become Rp 16,000,000,000,000 and issued and paid-in capital from Rp 2,196,960,000,000 to become Rp 4,174,224,000,000. Pursuant to the notarial deed of Aulia Taufan, SH, No. 12 dated July 4, 2006 regarding the amendment of the Company’s Article of Association and the Extraordinary Shareholders’ Meeting with notarial deed of the same notary No. 111 dated June 21, 2006, the shareholders approved the following :
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
90
31. CAPITAL STOCK (Continued)
• The authorized capital of the Company amounts to Rp 16,000,000,000,000 and issued and fully paid up capital amounts to Rp 4,174,224,000,000.
• The allocation of 83,484,480,000 new shares (series C) par value Rp 2 each with to regard to the debt to equity conversion. The new shares of 43,144,238,750 shares for the unsecured creditors and new working capital lender and 40,340,241,250 shares for secured creditors.
• To record the paid in capital in excess of par value from debt to equity conversion of Rp 5,574,513,535,500.
The deed was approved by the Minister of Justice and Human Right in his decision letter No. C-25038 HT.01.04.TH.2006 dated August 28, 2006 and registered in the Department of Industry and Trade under No. 233/BH-1/IX/2006 dated September 1, 2006. As of December 31, 2006, the authorized capital of the Company amounted to Rp 16,000,000,000,000 consisting of 247,145,100,800 shares with the following classifications.
• Series A of 17,000,000,000 shares with par value of Rp 500 each.
• Series B of 146,660,620,800 shares with par value of Rp 50 each.
• Series C of 83,484,480,000 shares with par value of Rp 2 each. Issued and fully paid up capital was Rp 2,283,248,477,500 consisting of Series A of 4,393,920,000 shares, and Series C of 43,144,238,750 shares. In February 2008, the Company amended its Articles of Association in connection with the reverse stock split with ratio 20 : 1. Based on the notarial deed of Sutjipto SH No. 91 dated February 21, 2008 regarding the changes of the Articles of Association, the authorized capital of the Company amounts to Rp 16,000,000,000,000 consisting of 12,357,255,040 shares with following classifications :
• Series A of 850,000,000 shares with par value of Rp 10,000 each.
• Series B of 7,333,031,040 shares with par value of Rp 1,000 each.
• Series C of 4,174,224,000 shares with par value of Rp 40 each. The deed was approved by the Minister of Justice and Human Rights in his decision letter No. AHU-10588.AH.01.02 Tahun 2008 dated March 3, 2008. Issued and fully paid in capital amounted to Rp 4,174,224,000,000 (26%) consist of :
• 219,696,000 shares with par value of Rp 10,000 each or totaling Rp 2,196,960,000,000.
• 1,890,975,522 shares with par value of Rp 1,000 each or totaling Rp 1,890,975,522,000.
• 2,157,211,950 shares with par value of Rp 40 each or totaling Rp 86,288,478,000.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
91
31. CAPITAL STOCK (Continued) The composition of stockholders as of February 21, 2008 based on notarial deed is as follows : Numbers of Percentage of Stockholders Shares ownership Total % Rp Shares Series A 219,696,000 5.15 2,196,960,000,000Shares Series B 1,890,975,522 44.30 1,890,975,522,000Shares Series C 2,157,211,950 50.55 86,288,478,000
Total 4,267,883,472 100.00 4,174,224,000,000
Based on the Extraordinary General Stockholders Meeting (RUPSLB) held on March 24, 2009 and based on notarial deed No. 91 dated March 24, 2009 of Sutjipto, SH, notary in Jakarta, the stockholders approved the issuance of 118,845,397 new authorized shares series C (5% of issued and paid-up capital) without preemptive rights, for providing stock options to the Company’s management and employees (Management Employee Stock Option Programme / MESOP). The notarial deed was approved by the Minister of Justice of the Republic of Indonesia based on his decision letter No. AHU-0052619.AH.01.09.Tahun 2009 dated August 14, 2009. Based on the Company’s schedule that was reported to PT Bursa Efek Indonesia dated March 17, 2009, these programme will be implemented in the period as follows :
Period Implementation Period
I 5 (five) trading days starting from April 1, 2009 II 5 (five) trading days starting from October 1, 2009 III 5 (five) trading days starting from April 1, 2010 IV 5 (five) trading days starting from October 1, 2010 V 5 (five) trading days starting from April 1, 2011 VI 5 (five) trading days starting from October 3, 2011 VII 5 (five) trading days starting from February 1, 2012
It has been implemented on March 5, 2012 based on the notarial deed of Aryanti Artisari, SH, M.Kn. No. 107 dated February 23, 2012. The deed was approved by the Minister of Justice and Human Rights in his decision letter No. AHU-0018443.AH.01.09.Tahun 2012 dated February 29, 2012 (Note 55). The composition of stockholders as of December 31, 2011 and 2010 based on the stockholder’s list issued by the Stock Administrative Office, PT Datindo Entrycom, of listed shares of the Company is as follows :
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
92
31. CAPITAL STOCK (Continued) 2 0 1 1 Numbers of Percentage of Total Stockholders Shares ownership Rp % Shares Series A: PT Multikarsa Investama 131,394,719 5.53 1,313,947,195,000Public (below 5% each) 88,301,281 3.71 883,012,805,000
219,696,000 9.24 2,196,960,000,000
Shares Series B: – – –
Shares Series C: Damiano Investments BV., Netherland 1,427,211,220 60.04 57,088,448,800Others 526,952,223 22.17 21,078,088,900Unsettled 203,048,507 8.55 8,121,939,800
2,157,211,950 90.76 86,288,477,500
Total 2,376,907,950 100.00 2,283,248,477,500
2 0 1 0 Numbers of Percentage of Total Stockholders Shares ownership Rp % Shares Series A: PT Multikarsa Investama 131,394,719 5.53 1,313,947,195,000Public (below 5% each) 88,301,281 3.71 883,012,805,000
219,696,000 9.24 2,196,960,000,000
Shares Series B: – – –
Shares Series C: Damiano Investments BV., Netherland 1,436,211,220 60.42 57,448,448,800Others 517,952,223 21.79 20,718,088,900Unsettled 203,048,507 8.55 8,121,939,800
2,157,211,950 90.76 86,288,477,500
Total 2,376,907,950 100.00 2,283,248,477,500
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
93
31. CAPITAL STOCK (Continued) Unsettled shares series C represent the creditors that have not exchanged with the new shares (through the Hongkong and Shanghai Banking Corporation Limited – the custodian). These shareholders’ name is not yet registered in PT Datindo Entrycom (share administrator). According to notarial deed of DR. H. Teddy Anwar, SH. Spn. No. 111 dated August 16, 2002, the part of PT Multikarsa Investama’s shares of 2,454,081,290 (or after reverse stock 122,704,064 shares) were sold to PT Bina Prima Perdana. However, based on the data issued by PT Datindo Entrycom, the shares are still registered under the name of PT Multikarsa Investama. Mr. Seeniappa Jegatheesan, director of the Company for 2011 and 2010, has ownership of 2,388 shares of the paid-in capital. The new shares series C (2,157,211,950 shares), are issued as the results of the debt to equity conversion had been traded in the Indonesian Stock Exchange since October 1, 2007.
32. ADDITIONAL PAID-IN CAPITAL 2 0 1 1 2 0 1 0 Rp Rp Paid-in capital in excess of par value from Public offering in 1990 25,800,000,000 25,800,000,000 Shares issuance cost (13,807,386,447) (13,807,386,447)
Subtotal 11,992,613,553 11,992,613,553 Paid-in capital in excess of par value from Conversion of debt to equity in 2006 5,574,513,535,500 5,574,513,535,500
Total 5,586,506,149,053 5,586,506,149,053
As per the Composition Proposal (Rencana Perdamaian) the Company is issuing 16,780,718,747 shares series C to unsecured creditors and 26,363,520,000 shares series C for Damiano Investments BV., Netherland in regard to debt to equity conversion of Rp 5,660,802,013,000. Further, based on the amendment of the Company’s articles of association dated July 4, 2006 by notary deed No. 12 of Aulia Taufani, SH, the Company has recognized the advance for future stock subscription of Rp 5,660,802,013,000 as issued and paid-in capital amounted to Rp 86,288,477,500 and as additional paid-in capital amounted to Rp 5,574,513,535,500.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
94
33. APPROPRIATION FOR GENERAL RESERVE Based on the annual general stockholders’ meeting as stated in notarial deed No. 351 dated June 23, 1997 and No. 402 dated June 24, 1996 of Adam Kasdarmadji SH, notary public in Jakarta, the stockholders agreed to appropriate a general reserve aggregating to Rp 8,280,000,000 from retained earnings in accordance with article 61 of the Corporate Law No. 1 year 1995 for Limited Liability Companies. In 2011 and 2010, the Company was exempted from reserving additional amounts due to its accumulated deficit.
34. NON-CONTROLLING INTERESTS
In 2011 and 2010, the non-controlling interest represents the non-controlling interest in net assets of Subsidiary derived from :
Balance as of Equity in net Balance as of
December 31,
2010
Profit of
Subsidiary
Written-off due
to lost control
December 31,
2011
Rp Rp Rp Rp
Non-controlling interests
(8% ownership in
PT Texmaco Jaya Tbk (141,161,474,525) 943,974,259 140,217,500,266 −
Balance as of Equity in net profit Balance as of
January 1, 2010 of Subsidiary December 31, 2010
Rp Rp Rp
Non-controlling interests
(8% ownership in
PT Texmaco Jaya Tbk (141,298,433,597) 136,959,072 (141,161,474,525)
Deduction in 2011 represents the deduction of non-controlling interests which financial statements were no longer consolidated in 2011 due to the Subsidiary (PT Texmaco Jaya Tbk) is stated at bankruptcy and insolvency so it caused that the Company have lost of control. Consequently, the amount has been written-off from the consolidated statements of financial position and adjusted to retained earning (accumulated deficit).
35. INSURANCE CLAIM SETTLEMENT, NET
• This account represents the settlement of insurance claim on inventory loss from damage or inventory loss from theft. The settlement received by the Company in 2011 and 2010 amounting to Rp 755,425,253 and Rp 3,912,505,783, respectively.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
95
36. BASIC NET PROFIT PER SHARE 2 0 1 1 2 0 1 0 Rp Rp Weighted average number of shares outstanding 2,376,907,950 2,376,907,950Net profit for computing the earnings per share 610,313,372,239 334,976,849,923 Basic net profit per share 257 141
37. NET SALES
2 0 1 1 2 0 1 0 Rp Rp Local Yarn 1,909,504,926,661 1,497,045,636,355 Fibre 1,971,954,154,015 1,462,683,852,276 Chips 491,565,571,862 419,610,560,478 Fleece (Knitting) 18,132,138,775 7,232,632,142 Bonded (Coating) 1,744,343,436 – Others 4,200,966,101 2,542,385,738
4,397,102,100,850 3,389,115,066,989
Export Yarn 915,855,123,426 840,406,886,152 Fibre 108,085,709,087 95,320,757,623 Fleece (Knitting) 12,003,304,053 10,888,875,360 Chips 104,395,872,630 64,408,933,664 PTA 39,219,695,987 55,300,955,040 Bonded (Coating) 561,427,017 7,956,368
1,180,121,132,200 1,066,334,364,207
Total 5,577,223,233,050 4,455,449,431,196
In 2011 and 2010, net sales of fleece, bonded and garment were Rp 32,441,213,281 and Rp 18,178,206,884, respectively consists of sales to third parties. The product is manufactured by PT Texmaco Jaya Tbk (under bankruptcy) based on the tolling basis. In 2011 and 2010, no sales were earned from sales to related parties. In 2011 and 2010, no sales to third parties exceeded 10% of the operating revenues.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
96
38. OTHER OPERATING REVENUES
2 0 1 1 2 0 1 0 Rp Rp Indirect materials damage 2,237,655,637 4,972,687,954 Product non-standard and others 2,436,232,904 1,183,480,496
Total 4,673,888,541 6,156,168,450
In 2011 and 2010, other operating revenues of fleece, bonded and garment were Rp 950,229,762 and Rp 1,183,480,496, respectively represent the other operating revenues to third parties. The product is manufactured by PT Texmaco Jaya Tbk (under bankruptcy) based on the tolling basis. In 2011 and 2010, no sales were earned from sales to related parties. In 2011 and 2010, no sales to third parties exceeded 10% of the operating revenues.
39. COST OF GOODS SOLD 2 0 1 1 2 0 1 0 Rp Rp Raw materials used 3,672,391,133,526 2,574,384,087,292 Direct labour 75,657,541,860 74,138,354,796 Manufacturing expense (Note 40) 1,600,066,004,148 1,494,954,178,131
Total manufacturing cost 5,348,114,679,534 4,143,476,620,219
Work in process At beginning of year 43,375,132,437 45,066,289,569 At end of year (61,491,214,627) (43,375,132,437)
Cost of goods manufactured 5,329,998,597,344 4,145,167,777,351
Finished goods At beginning of year 178,376,709,962 145,296,009,825 Purchases 1,070,629,559 18,125,594,152 At end of year (318,102,818,554) (178,376,709,962)
Cost of goods sold 5,191,343,118,311 4,130,212,671,366
In 2011 and 2010, raw material used included the raw material used for fleece, bonded and garment product were Rp 2,691,635,441 and Rp 8,160,290,605, respectively. In 2011 and 2010, no purchases from related party.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
97
39. COST OF GOODS SOLD (Continued) In 2011, purchases from third parties exceeded 10% of total purchases are as follows : 2 0 1 1 Rp Percentage
PT Cipta Karya Persada 1,401,115,819,978 32.34% PT Polychem Indonesia 995,286,186,528 22.97% Kolmar Petrochemicals AG, Switzerland 864,533,325,752 19.96% In 2010, purchases from third parties exceeded 10% of total purchases are as follows : 2 0 1 0 Rp Percentage
Kolmar Petrochemicals AG, Switzerland 843,553,991,778 28.66% PT Cipta Karya Persada 757,957,408,160 25.75% PT Polychem Indonesia 640,590,376,932 21.76%
40. MANUFACTURING EXPENSES 2 0 1 1 2 0 1 0 Rp Rp
Depreciation expense of property, plant and equipment (Note 16)
502,656,246,277
501,535,394,142
Indirect materials 468,832,467,906 437,837,934,567 Electricity and gas 471,496,246,793 432,101,629,875 Freight 56,486,548,059 45,878,191,743 Processing fee (tolling) 21,319,629,246 18,414,449,509 Rental 19,097,030,479 16,700,296,422 Repair and maintenance 18,931,653,066 14,917,028,808 Insurance 8,084,094,174 7,338,079,221 Others 33,162,088,148 20,231,173,844
Total 1,600,066,004,148 1,494,954,178,131
In 2011, processing fee (tolling) of Rp 21,319,629,246 represent the processing fee to PT Texmaco Jaya Tbk (under bankruptcy) amounted to Rp 1,964,544,819, PT Multikarsa Investama amounted to Rp 19,154,680,113 and other parties amounted to Rp 200,404,314. And in 2010, processing fee (tolling) of Rp 18,414,449,509 represents the processing fee to PT Multikarsa Investama (Note 47).
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
98
41. SELLING EXPENSES 2 0 1 1 2 0 1 0 Rp Rp Export charges 46,661,178,057 65,167,592,420 Freight 43,138,746,528 43,171,035,948 Marketing expenses 26,086,114,253 42,055,866,702 Advertising and promotion 163,472,625 285,464,360 Others 4,418,760,454 1,948,574,142
Total 120,468,271,917 152,628,533,572
42. GENERAL AND ADMINISTRATIVE EXPENSES
2 0 1 1 2 0 1 0 Rp Rp Salaries, wages and benefits 68,805,923,743 65,570,824,861 Employees’ benefits (Note 30) 23,098,828,215 19,205,499,801 Tax expenses 22,554,257,427 20,793,495,368 Business traveling expenses 10,105,942,803 10,482,279,166 Professional fees 7,842,431,490 9,089,565,594 Rent 6,693,625,053 6,738,025,687 Communication 4,164,471,558 3,992,603,096 Stationery 2,330,130,408 3,318,422,181 Donation and Corporate Social Responsibility 2,134,875,000 1,330,326,800 Repairs and maintenance 1,302,463,878 1,516,283,825 Entertainment and representation 1,028,679,594 1,066,187,320 Depreciation expense of property, plant and equipment (Note 16) 798,585,385 496,098,719 Electricity and water 705,664,631 938,511,609 Insurance 159,580,031 524,153,639 Allowance for impairment (Notes 7 and 8) – 1,597,556,295 Others 13,230,876,645 17,908,476,045
Total 164,956,335,861 164,568,310,006
43. INTEREST INCOME
2 0 1 1 2 0 1 0 Rp Rp
Interest from current account and time deposits 185,188,989 239,465,297
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
99
44. INTEREST EXPENSE AND BANK CHARGES 2 0 1 1 2 0 1 0 Rp Rp Interest expense on : Working capital loans (Note 26) 40,178,444,642 39,470,011,450 Unsecured debts and notes payable (Note 25) 7,554,663,403 7,403,114,841 Short term loans (Note 19) − 1,289,385,139
Credit financing payables (Note 28) 136,723,195 74,093,904
Total interest expense 47,869,831,240 48,236,605,334 Fee on bank loans (Note 17) 91,061,129,517 73,156,430,350 Bank charges 3,872,803,472 4,329,709,357
Total 142,803,764,229 125,722,745,041
45. MISCELLANEOUS INCOME, NET 2 0 1 1 2 0 1 0 Rp Rp Payables’ written-off 3,095,834,930 3,300,834,607 Rebate on purchasing chemicals 1,561,609,258 1,058,169,021 Collectible of prior year’s impairment (Note 8) 274,213,845 −
Payables recognized from PKPU’s verification − (485,439,510)
Others 1,873,118,724 681,803,356
Total 6,804,776,757 4,555,367,474
46. DISCOUNTINUED OPERATIONS On August 19, 2011, the Commercial Court of Central Jakarta declared that PT Texmaco Jaya Tbk (Subsidiary) is in state of bankruptcy and insolvency. Effective this period, the Subsidiary becomes subject to the control of the Court, causing the Company loss its control in the Subsidiary. The Court has been appointed team curator for saving the asset value of the bankruptcy and monitor the Subsidiary’s operations and cash flows. In accordance with PSAK No. 4 (Revised 2009), if the Company losses control of a Subsidiary, therefore the Company should derecognizes the assets and liabilities of the Subsidiary at the their carrying amounts at the date when control is lost and derecognizes the carrying amount of any non-controlling interests in the former Subsidiary at the date when control is lost.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
100
46. DISCOUNTINUED OPERATIONS (Continued) Revenue and expenses, gains and losses relating to the discountinuation of this Subsidiary have been eliminated from profit or loss of the Company’s continuing operations and are shown as a single line item on the face of the consolidated statements of comprehensive income. PT Texmaco Jaya’s operating profit or loss until the loss of control on August 19, 2011 are summarized as follows : 2 0 1 1 Rp Operating revenues −
Cost of goods sold (3,020,370,741)
Gross loss (3,020,370,741 )
Operating expenses : Selling expenses (17,320,754 ) General and administrative expenses (5,445,677,285 )
Total operating expenses (5,462,998,039)
Loss from operations (8,483,368,780)
Other income (charges) : Interest income 2,280,014 Gain on foreign exchange transactions 23,295,545,656 Depreciation expenses of unused property, plant and equipment (Note 16) (2,823,508,364) Interest expense and bank charges (731,248,134) Miscellaneous income, net 25,294,029
Total other income, net 19,768,363,201
Profit before income tax 11,284,994,421 Tax expenses (Note 23e) (2,983,656,808)
Total comprehensive income for the year 8,301,337,613
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
101
46. DISCOUNTINUED OPERATIONS (Continued) The carrying amounts of assets and liabilities in PT Texmaco Jaya Tbk (under bankruptcy) as of August 19, 2011 are as follows : As of August 19, 2011 Rp Current assets : Cash and cash equivalents 303,966,452 Other receivables 196,758,067 Inventories 2,845,608,129 Purchase advances 423,489,363 Prepaid taxes 339,495,152
Total current assets 4,109,317,163
Non-current assets : Non-trade receivables from related party 85,489,206,408 Restricted cash in banks 6,591,339,242 Property, plant and equipment, net 134,791,745,656 Deferred tax assets 28,309,577,041
Total non-current assets 255,181,868,347
TOTAL ASSETS 259,291,185,510
Current liabilities : Short-term loans 314,218,794,246 Notes payable 175,161,697,557 Trade payables 44,718,432,196 Liabilities for purchase of property, plant and equipment 260,815,747 Taxes payable 2,984,313,824 Accrued expenses 199,290,216,311 Current portion of obligation under finance lease 36,807,798,043 Other current liabilities 128,303,203,594
Total current liabilities 901,745,271,518
Non-current liabilities : Employees’ benefit liabilities 14,139,865,271
Total non-current liabilities 14,139,865,271
TOTAL LIABILITIES 915,885,136,789
TOTAL NET LIABILITIES (656,593,951,279 )
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
102
46. DISCOUNTINUED OPERATIONS (Continued) The financial statements of PT Texmaco Jaya Tbk (Subsidiary) for the period January 1, 2011 up to August 19, 2011 were complied by the Subsidiary (Unaudited). Since the Company losses control of a subsidiary (PT Texmaco Jaya Tbk), the Company recognized the net liabilities of the Subsidiary totaling of Rp 656,593,951,279 as gain on disposal of Subsidiary and were presented after the taxation in the consolidated statements of comprehensive income. Until now, the progress of the curator team is completing the debt verification and in the near future, they will make a tender to sell the Subsidiary’s property, plant and equipments that was consists of factory’s machineries and equipments in Pemalang. The bankruptcy or liquidation of Subsidiary (PT Texmaco Jaya Tbk) will have little impact to PT Asia Pacific Fibers Tbk (parent Company) now, as the operations of the Subsidiary had stopped since year 2004. However, with the existence of net liabilities in Subsidiary and disposal of Subsidiary, PT Asia Pacific Fibers Tbk as parent Company do not have an liabilities regarding the settlement of the Subsidiary’s liabilities to the other creditors, and also the Company do not get the gain regarding the disposal of Subsidiary in the future.
47. NATURE AND TRANSACTION WITH RELATED PARTIES
Nature of relationships and transaction with related parties : Nature of Name of related parties relationship Transaction Damiano Investments BV., Netherland Stockholder Loans, shareholder PT Multikarsa Investama Stockholder Tolling arrangement PT Texmaco Jaya Tbk (under bankruptcy) Affiliated Company Loans, tolling arrangement Related Parties Transactions In the normal course of business, the Company and Subsidiaries entered into certain transactions with related parties, including the followings : Percentage to total
Assets/ Liabilities
Revenue/Expenses
2 0 1 1 2 0 1 0 2011 2010
Rp Rp % %
Trade receivables 268,722,447,175 268,722,447,175 7.29 6.80
Non-trade receivables from
related parties 317,368,061,827
425,918,780,239
8.61
10.79
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
103
47. NATURE AND TRANSACTION WITH RELATED PARTIES (Continued)
Related Parties Transactions (Continued) Percentage to total
Assets/ Liabilities
Revenue/Expenses
2 0 1 1 2 0 1 0 2011 2010
Rp Rp % %
Bank loans 637,839,711,337 431,987,380,441 5.79 3.63
Secured debts 6,024,541,854,608 5,840,580,166,660 54.64 49.08
Accrued expenses 968,784,155 74,234,451,831 0.00 0.62
Working capital loans 208,564,000,000 365,132,262,309 1.89 3.07
Manufacturing expense 21,119,224,932 18,414,449,509 0.37 0.45
48. ASSETS AND LIABILITIES IN FOREIGN CURRENCY The Company and Subsidiaries’ financial assets and liabilities in foreign currencies as of December 31, 2011 and 2010, are as follows :
2 0 1 1 2 0 1 0
Foreign Equivalent in Foreign Equivalent in Currency Rupiah Currency Rupiah
Rp Rp
Assets :
Cash and cash equivalents US$ 1,861,084 16,876,313,539 8,168,470 73,442,713,791
SGD 8,262 57,615,945 2,863 19,989,884
EUR 2,348 27,559,862 541 6,468,082
NOK 1,108 1,455,663 1,108 1,474,349
Trade receivables :
Third parties US$ 50,084,099 454,162,610,766 47,394,372 426,122,801,634
Other receivables US$ 61,152 554,526,427 12,474,966 112,162,418,768
Other current assets US$ 5,489,730 49,780,870,098 2,696,000 24,239,736,000
Restricted cash in bank US$ 704,258 6,386,209,006 1,274,386 11,458,003,720
Total assets 527,847,161,306 647,453,606,228
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
104
48. ASSETS AND LIABILITIES IN FOREIGN CURRENCY (Continued)
2 0 1 1 2 0 1 0 Foreign Equivalent in Foreign Equivalent in
Currency Rupiah Currency Rupiah
Rp Rp
Liabilities
Bank loans US$ 70,339,624 637,839,711,337 48,046,644 431,987,380,441
Secured Debts US$ 805,630,342 7,305,445,942,522 805,630,342 7,243,422,406,179
EUR 15,688,978 184,172,764,863 15,688,978 187,574,142,730
YEN 3,001,711,400 350,609,346,911 3,001,711,400 331,044,642,262
CHF 45,902 442,327,333 45,902 440,670,916
Short-term loan US$ − − 22,963,248 206,462,566,302
Notes payable US$ − − 16,141,085 145,124,497,841
Trade payables :
Third parties US$ 19,653,155 178,214,810,634 11,091,004 99,719,215,335
YEN 3,779,861 442,243,747 1,431,156 157,427,188
SGD 32,654 227,728,473 20,022 139,772,963 GBP 16,660 232,727,955 11,788 163,781,365
EUR 136,455 1,601,842,214 419,905 5,020,384,712
CHF − − 1,154 11,079,329
Liabilities for Purchasing Property, Plant and
Equipment US$ − − 30,476 274,011,964
Accrued expenses US$ 278,033 2,521,204,808 19,789,653 177,928,770,668
Unsecured Debts and Notes
Payable
US$ 21,945,011 198,997,359,748
21,077,129 189,504,468,044
Working capital loan US$ 23,000,000 208,564,000,000 40,610,862 365,132,262,309
Obligation under finance lease US$ − − 4,300,981 38,670,122,950
Other current liabilities US$ 3,151,011 28,573,367,192 3,656,241 32,873,261,972
Total liabilities (9,097,885,377,737) (9,455,650,865,470)
Net liabilities (8,570,038,216,431) (8,808,197,259,242)
49. SEGMENT INFORMATION
In prior years, the segment information reported was based on business and geographical segments. However, effective January 1, 2011, the new standard requires that operating segments be identified based on the information reviewed by the chief operating decision maker, which is used for the purpose of resources allocation and assessment of their operating segments performance.
The Company and Subsidiaries’ reportable segments under PSAK 5 (Revised 2009) are based on their operating division ; which is similar to the business segment under the previous standard :
1. Chemical industry and synthetic fibre 2. Weaving and knitting 3. Textile and trading 4. Finance Service
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
105
49. SEGMENT INFORMATION (Continued) The following are segment information based on the operating divisions. Amounts reported for the prior year have been restated to conform to the requirements of PSAK 5 (Revised 2009) :
Chemical Weaving Textile Industry and and and Finance
2011 Synthetic fibre knitting Trading Service Elimination Total
(In Thousands Rupiah) Rp 000 Rp 000 Rp 000 Rp 000 Rp 000 Rp 000
SEGMENT SALES :
External sales Local 4,380,949,278 20,826,712 − − − 4,401,775,990
Export 1,167,556,401 12,564,731 − − − 1,180,121,132
Inter segment sales 2,009,782,637 217,800 − − (2,010,000,437) −
Total segment sales 7,558,288,316 33,609,243 − − (2,010,000,437) 5,581,897,122
RESULT
Segment result 390,554,003
Unallocated operating expenses (285,424,608)
Profit from operations 105,129,395
Other charges, net (218,997,407)
Loss before income tax (113,868,012)
Tax income 59,286,095
Loss from continuing operations (54,581,917)
Profit from discountinued
operation
8,301,338
Gain from disposal of Subsidiary
656,593,951
Net profit for the period 610,313,372
Other comprehensive income (157,090)
Total comprehensive income 610,156,282
STATEMENTS OF FINANCIAL POSITION :
Segment assets (3,691,174,745) (16,288,068) − (6,884,589,967) 6,908,847,043 (3,683,205,737)
Segment liabilities 10,993,824,773 20,258,019 − 6,909,256,545 (6,898,086,966) 11,025,252,371
OTHER INFORMATION :
Capital expenditures (80,755,719) (15,400) − − − (80,771,119)
Depreciation and amortization (503,399,598) (55,234) (2,955,138) − − (506,409,970)
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
106
49. SEGMENT INFORMATION (Continued)
Chemical Weaving Textile
industry and and and Finance 2010 synthetic fibre knitting Trading Service Elimination Total
(In Thousands Rupiah) Rp 000 Rp 000 Rp 000 Rp 000 Rp 000 Rp 000
SEGMENT SALES :
External sales Local 3,386,806,380 8,459,581 – – – 3,395,265,961
Export 1,055,437,532 10,902,107 – – – 1,066,339,639 Inter segment sales 1,622,317,294 – – – (1,622,317,294) –
Total segment sales 6,064,561,206 19,361,688 – – (1,622,317,294) 4,461,605,600
RESULT Segment result 331,392,928
Unallocated operating expenses (317,196,844)
Profit from operations 14,196,084 Other income, net 264,639,614
Profit before income tax 278,835,698
Tax income 56,141,151
Net profit for the period 334,976,849
Other comprehensive income 1,112,553
Total comprehensive income 336,089,402
STATEMENTS OF FINANCIAL
POSITION :
Segment assets (4,981,712,833) (6,786,485) (228,734,601) (6,826,130,171) 8,094,874,124 (3,948,489,966)
Segment liabilities 10,965,130,909 10,657,558 2,034,164,805 6,850,587,296 (7,959,847,686) 11,900,692,882
OTHER INFORMATION :
Capital expenditures (32,157,279) – – – – (32,157,279)
Depreciation and amortization (501,766,788) (4,863,655) – – – (506,630,443)
The Company and its Subsidiaries’ operations are located in five (5) principal geographical areas. Processing of chemical industry, synthetic fibre and Weaving and knitting divisions are located in Indonesia.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
107
49. SEGMENT INFORMATION (Continued) Sales by geographical market The following table shows the distribution of the Company and its Subsidiaries’ sales from external customers by geographical market, regardless of where the goods were produced : 2 0 1 1 2 0 1 0 Rp 000 Rp 000 Indonesia 4,401,775,990 3,395,265,961 Asia 475,800,284 368,642,422 America 343,447,850 440,283,219 Europe 214,393,046 192,344,228 Australia 76,647,326 38,255,286 Africa 69,832,626 26,814,484
Total 5,581,897,122 4,461,605,600
The following table shows the carrying amount of segment non-current assets and additions to property, plant and equipment by geographical area in which the assets are located :
Carrying amount non-current assets Additions to property, plant and equipment
December 31, December 31, January 1, December 31, December 31,
2 0 1 1 2 0 1 0 2 0 1 0 2 0 1 1 2 0 1 0
Rp 000 Rp 000 Rp 000 Rp 000 Rp 000
Indonesia 1,582,831,369 2,249,925,748 2,729,553,498 80,801,119 32,157,279
50. RESTATEMENT OF THE PRIOR YEARS’ CONSOLIDATED FINANCIAL STATEMENTS
The management makes adjustments to correct the followings : a. The additional shares issuance cost on the Subsidiary (PT Texmaco Jaya Tbk) amounted to
Rp 4,950,019,100. b. The overstated of book value on prior years’ property, plant and equipment of the Subsisiary
(PT Texmaco Jaya Tbk) amounted to Rp 39,952,146,244 with details below.
• Land amounted to Rp 1,630,736,937.
• Building amounted to Rp 5,527,493,699.
• Machineries amounted to Rp 32,793,915,608. According to PSAK No. 25, the total amount of correction of errors amounted to Rp 44,902,165,344 that related to prior period should be reported by adjusting the opening balance of unappropriate retained ernings (accumulated deficit) and as part of the equity attributable to the owners of the Company.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
108
50. RESTATEMENT OF THE PRIOR YEARS’ CONSOLIDATED FINANCIAL STATEMENTS (Continued) The summary of the restatement of accounts are as follows :
As previously Reported
As Restated
Rp Rp Property, plant and equipments : As of January 1, 2010 2,290,009,443,015 2,250,057,296,771 As of December 31, 2010 1,815,536,279,620 1,775,584,133,376 Accumulated deficit – unappropriated : As of January 1, 2010 15,976,645,979,054 16,021,548,144,398 As of December 31, 2010 15,641,806,088,203 15,686,708,253,547
51. COMMITMENTS AND CONTINGENCIES
• The Directorat Jenderal Pajak has filed a Review Petition against the verdict of the tax court for the refund of Rp 13,090,399,058 on November 24, 2010. If the Review Petition filed by the Directorat Jenderal Pajak is won, then the entire refund amount became payable along with the accrued interest till the date of refund. Until the date of report finished, the result has not been determined yet.
• Effective August 19, 2011, one of Subsidiary (PT Texmaco Jaya Tbk) becomes subject to the control of Court, causing the Company to lose its control. The Count has already set a Supervisory Judge and curator team to maintain and monitor the operation of bankruptcy assets and cash flows of the Subsidiary. Net liabilities at the date of lost its control is Rp 656.593.951.279. PT Asia Pacific Fibers Tbk as parent Company do not have obligation regarding the creditors’ payables of Subsidiary.
• Based on the correspondence letter from PT Bina Prima Perdana dated August 8, 2011, PT Bina Prima Perdana claims the Company regarding the guarantor of the Subsidiary’s loans. However, the management of the Company mentioned that the above guarantees (promissory note) were not registered by PT Bina Prima Perdana during the debt verification by the curator of PT Asia Pacific Fibers Tbk (formerly PT Polysindo Eka Perkasa Tbk) during its bankruptcy process in 2005, and consequently, the above claims of PT Bina Prima Perdana were not valid. In addition, the restructuring process of unsecured debt in PT Asia Pacific Fibers Tbk has been completed.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
109
52. SIGNIFICANT AGREEMENT Tolling Agreement with PT Texmaco Jaya Tbk (under bankruptcy) On April 1, 2008, the Company arranged the tolling / rental agreement with PT Texmaco Jaya Tbk for a period of twelve (12) months and can be renewed. This agreement is prepared because PT Texmaco Jaya Tbk does not have the necessary working capital to service the orders from its customers. Based on this agreement, the Company should pay the conversion charges that consisting of tolling fee, building and machinery rental to PT Texmaco Jaya Tbk each month. The tolling fees are calculated based on the production results. On August 3, 2009, the Company arranged the amendment of tolling agreement with PT Texmaco Jaya Tbk for a period of three (3) months and can be renewed. Based on this agreement, the Company should pay the tolling fee of US$ 1.20 per yard with the minimum production results of 100,000 yards to PT Texmaco Jaya Tbk each month. And on October 23, 2009, the Company renewed the tolling / rental agreement for seven (7) months from November 1, 2009 up to June 30, 2010. On July 15, 2010, the Company arranged the amendment of tolling agreement with PT Texmaco Jaya Tbk for fifthteen (15) months from July 1, 2010 up to September 30, 2011 and can be renewed. Based on this agreement, the Company should pay the tolling fee of US$ 1.20 per yard for the contract period from July 1, 2010 up to September 30, 2010, and US$ 0.75 per yard for the contract period from October 1, 2010 up to September 30, 2011. Further, based on the latest amendment of tolling agreement with PT Texmaco Jaya Tbk dated January 10, 2011, the Company agreed to extend for five (5) years from January 1, 2011 up to December 30, 2016 and can be renewed for three (3) years later. Based on this agreement, the Company should pay the tolling fee of US$ 0.30 per kgs and at least US$ 50,000 per month. Warehouse Agreement with PT Texmaco Jaya Tbk (under bankruptcy) Based on the land rental agreement dated June 15, 2009 between the Company and PT Texmaco Jaya Tbk (under bankruptcy), the Company agreed to rent the land for 950 meters of gas pipe, 1,500 meters of water pipe, 800 meters of water pump facility and 1,000 meters of electricity cable. This agreement is valid for thirty (30) years from January 1, 2010 up to December 31, 2040. As consequently, the Company should pay the rental expenses amounted to Rp 100,000,000. Based on the warehouse rental agreement dated March 30, 2011 between the Company and PT Texmaco Jaya Tbk (under bankruptcy), the Company agreed to rent the warehouse for ten (10) months from March 1, 2011 up to December 31, 2011. As consequently, the Company should pay the rental expenses amounted to Rp 43,200,000 per month. Based on the warehouse rental agreement dated November 17, 2011 between the Company and PT Texmaco Jaya Tbk (under bankruptcy), the Company agreed to rent the warehouse for three (3) months from November 17, 2011 up to February 17, 2012. As consequently, the Company should pay the rental expenses amounted to Rp 9,000,000 per month.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
110
52. SIGNIFICANT AGREEMENTS (Continued) Warehouse Agreement with PT Texmaco Taman Synthetics Based on the rental agreement dated August 1, 2011 between the Company and PT Texmaco Taman Synthetics, the Company agreed to rent the laboratory equipments for five (5) years from August 1, 2011 up to July 31, 2015. As consequently, the Company should pay the rental expenses amounted to Rp 99,000,000 per month.
Gas Turbine with PT Wismakarya Prasetya Based on the agreement dated August 14, 2006 between the Company and PT Wismakarya Prasetya regarding purchase of electric power, steam and gas and based on the Minutes of Meeting on April 22, 2010 regarding power purchase price, the Company agrees to increase the power purchase price due to Natural gas price increases from PT Perusahaan Gas Negara (Persero). The Company should pay the monthly electricity, steam and gas based on their consumption. Additionally, the Company would incur the cost of maintenance of turbines as per the standard running hours as a part of cost of purchase of electricity. This agreement is valid for a period of 5 years, and due on April 22, 2015.
53. FINANCIAL RISK MANAGEMENT The Company is exposed to various risks in relation to financial instruments, while the Subsidiaries are not exposed to such risks anymore because since the second semester of 2004, the Subsidiary has discontinued its business operations and on August 19, 2011, the Commercial Court of Central Jakarta declared that the subsidiary (PT Texmaco Jaya Tbk) is in state of bankruptcy and insolvency so the curator team will keep the bankruptcy assets and monitor the Subsidiary’s operational and cash flows, and the Company as parent Company has lost its control over the Subsidiary. The main types of risks are market risk, credit risk and liquidity risk. The Company’s risk management focuses on actively securing the Company’s short-to medium-term cash flows by minimizing the exposure on financial markets The Company does not actively engage in the trading of financial assets for speculative purposes nor does it take options. The most significant financial risks to which the Company is exposed to are described below. a. Market Risk
The Company is exposed to market risk through its use of financial instruments and specifically to currency risk and interest risk which result from both their operating and investing activities.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
111
53. FINANCIAL RISK MANAGEMENT (Continued) a. Market Risk (Continued)
(a) Foreign Currency Risk
Most of the Company’s transactions are carried out in the other currencies. Exposure to currency exchange rates arise from the Company’ sales and purchases are denominated in United States Dollars (US$) and currencies other than Indonesian rupiah. The Company also holds United States Dollar-denominated cash and cash equivalents. To mitigate the Company’s exposure to foreign currency risk, non-Indonesian rupiah cash flows are monitored. Foreign currency denominated financial assets and liabilities, translated into Indonesian Rupiah at the middle rate at the consolidated statements of financial position date, and the details are stated in Financial Assets and Liabilities in Foreign Currency (Note 48). The Company’s policy is to manage the financial asssets denominated in foreign currencies are available to settle the financial liabilities denominated in foreign currencies. At December 31, 2011, the financial liabilities denominated in foreign currencies are in excess of financial assets denominated in foreign currencies at amount of Rp 8,570,038,216,431. It due to the Company’s secured debts around of Rp 7,840,670,381,629 has not yet restructured. If the above mentioned are not considered, the excess of financial liabilities over the assets will be around Rp 729,367,834,802. This is a manageable level as the loans are repayable over a period of time.
(b) Interest Rate Risk
The Company’s policy is to minimize interest rate risk exposure on long-term financing. Longer-term borrowings are therefore usually at fixed rates. At December 31, 2011, the Company have applied the fixed interest rate for their loans from bank, third parties and related parties. Hence there is no interest rate risk for the Company.
b. Credit Risk
Credit risk is the risk that counterparty fails to discharge an obligation to the Company. The Company is exposed to this risk for various financial instruments, for example by granting receivables and advances to customers and related parties.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
112
53. FINANCIAL RISK MANAGEMENT (Continued) b. Credit Risk (Continued)
The Company continuously monitors defaults of customers and other counterparties, identified either individually or by group, and incorporate this information into its credit risk controls. The Company’s policy is to deal only with creditworthy counterparties. In addition, for a certain proportion of sales, advance payments are received to mitigate risks. The Company’s maximum exposure to credit risk is limited to the carrying amount of the financial assets as shown on the face of the consolidated statements of financial position, as summarized below. 2 0 1 1 Rp Cash and cash equivalents 31,177,273,662 Short-term investments 3,000,000,000 Trade receivables, net 722,987,674,614Other receivables, net 22,937,261,126 Other current assets 51,998,685,430 Non-trade receivable from related parties, net 317,368,061,827 Restricted cash in banks 10,345,623,643
Total financial assets 1,159,814,580,302
(a) Cash and cash equivalents and short-term investments
The credit risk for cash and cash equivalents and short-term investment are considered negligible, since the counterparties are reputable banks with high quality external credit ratings. The Company actively monitoring the cash and bank balances on weekly basis
(b) Trade receivables In respect of trade receivables, the Company is not exposed to any significant credit risk exposure to any single counterparty or any group of counterparties. The Company’s trade receivables consist of many customers. Based on historical information, the customer default rates in the settlement of receivables is low due to the settlement from customers are normally received by the Company with in the credit term. Moreever, the Company’s significant portion of the sales are on cash before delivery or a portion of the sales are collected a front (prefinance). Thus, the Company’s management noted that the outstanding of trade receivables have not impaired.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
113
53. FINANCIAL RISK MANAGEMENT (Continued) b. Credit Risk (Continued)
(b) Trade receivables (Continued)
PT Adetex owes the Company of Rp 682 million which is due for more than 12 months. Currently an arrangement for tolling is being organised with them to adjust the above receivables from them.
(c) Other receivables In respect of other receivables, the Company is not exposed to any significant credit risk exposure to any single counterparty or any group of counterparties. Based on historical information about customer default rates, management consider the credit quality of other receivables have not impaired.
(d) Non-trade receivables from related parties Non-trade receivables from related party represent the receivables from PT Multikarsa Investama (related party). The Company’s management stated that there is no impairment indication that could be counted from the estimated cash flow in the future, due to PT Multikarsa Investama is still in the debt restructuring process with PT Perusahaan Pengelola Aset (PPA). In addition, the said value will be suitably adjusted at the time of restructuring.
(e) Restricted Cash in Banks The Company’s management noted that there is no impairment indication that could be counted from the estimated cash flow in the future, due to the Company is still in the debt restructuring process with PT Perusahaan Pengelola Aset (PPA). In addition, the said amount will be suitably adjusted at the time of restructuring.
c. Liquidity Risk
Liquidity risk is the risk that the Company’s ability to meet its obligations when they fall due. The risk is inherent in the Company’s operational and can be affected by a range of institution-specific and market-wide events. In the normal course, the Company manages its liquidity needs by carefully monitoring scheduled debt servicing payments for current financial liabilities as well as other cash outflows on a day-to-day business. Liquidity needs are monitored in various time bands, on a day-to-day and week-to-week basis, as well as on the basis of a rolling 90-day projection.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
114
53. FINANCIAL RISK MANAGEMENT (Continued) c. Liquidity Risk (Continued)
The current financial dues including the bank loans for the procurement of raw materials, of the Company are fully covered by the current assets of the Company which can be converted into cash within a short period. The other long-term loans have fixed interest servicing and repayment schedule, which are fully budgeted in the 3 (three) monthly cash flow estimates. The Company does not have any over due liability either short-term or long-term, except for secured debts that is still under the restructuring process As at December 31, 2011, the Company’s financial liabilities are presented below. 2 0 1 1 Rp Bank loans 637,839,711,337 Secured debts 9,185,233,096,043 Trade payables 215,808,272,379 Accrued expenses 413,557,919,140 Credit financing payables 957,211,258 Working capital loans 208,564,000,000 Unsecured debts and notes payable 198,997,359,748 Other current liabilities 38,573,261,263
Total financial liabilities 10,899,530,831,168
54. CAPITAL MANAGEMENT POLICIES
The objective when managing capital is to safeguard the Company and Subsidiaries’ ability to continue as a going concern, and to ensure optimal capital structure and shareholder returns. The gearing ratios as at December 31, 2011 and 2010 are as follows : 2 0 1 1 2 0 1 0 Rp Rp
Total borrowings 10,230,634,167,128 10,599,971,352,461 Less : Cash and cash equivalents (31,177,273,662 (87,892,873,462 ) Short-term investments (3,000,000,000) (1,000,000,000) Restricted cash in banks (10,345,623,643) (17,129,600,731)
Net debt 10,186,111,269,823 10,493,948,878,268
Total deficiency (7,342,046,634,232) (7,952,202,916,163)
Gearing ratio (139% ) (133% )
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
115
54. CAPITAL MANAGEMENT POLICIES (Continued) The total borrowings include the unrestructured secured debts of approximately Rp 9.185 trillion. The Company endevours to restructure this debt to a sustainable level and for which the negotiations are underway with its secured creditors including PPA/BPP. If the proposal of the Company which includes debt to equity swap and waiver of the past interest amounts is accepted by its creditors, it will considerably improve the capital gearing structure of the Company.
55. EVENTS AFTER THE REPORTING PERIOD
• Based on the warehouse rental agreement dated January 2, 2012 between the Company and PT Texmaco Jaya Tbk (under bankruptcy), the Company agreed to rent the chiller machinery for one (1) years from January 2, 2012 up to December 31, 2012. As consequently, the Company should pay the rental expenses amounted to Rp 5,000,000 per month.
• Based on the notarial deed of Aryanti Artisari, SH, M.Kn. No 107 dated February 23, 2012, the stockholders agreed to used their option right regarding the Management Employee Stock Option Programme (MESOP). It was connected with the notarial deed of Sutjipto, SH No. 91 dated March 24, 2009 regarding the issuance of 118,845,397 new authorized shares series C (5% of issued and paid-up capital) without preemptive rights at par value of Rp 40 each. The execution price at March 5, 2012 is Rp 45 each, and the shares have been fully paid-up on February 20, 2012 and February 21, 2012. The shares also registered in the Indonesian Stock Exchange through announcement No. Peng-P-00032/BEI.PPR/03-2012 dated March 5, 2012 and No. Peng-P-00033/BEI.PPR/03-2012 dated March 7, 2012. The composition of stockholders as of March 5, 2012 is as follows :
Numbers of Percentage of Total Stockholders Shares ownership Rp % Shares Series A:
PT Multikarsa Investama 131,394,719 5.26 1,313,947,195,000Public (below 5% each) 88,301,281 3.54 883,012,805,000
219,696,000 8.80 2,196,960,000,000
Shares Series B: – – –
Shares Series C:
Damiano Investments BV., Netherland 1,434,255,172 57.47 57,370,206,880Others 537,605,796 21.54 21,504,231,840MESOP 118,845,397 4.76 4,753,815,880Unsettled 185,350,982 7.43 7,414,039,280
2,276,057,347 91.20 91,042,293,880
Total 2,495,753,347 100.00 2,288,002,293,880
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
116
56. PRONOUNCEMENT OF NEW ACCOUNTING STANDARDS a. The Indonesian Institute of Accountants (“IIA”) has issued new or revision of the following the
Indonesian Financial Accounting Standards (“PSAK”) and its interpretation (“ISAK”). The accounting standards which will be effective or applicable on the Company financial statements covering periods beginning on or after January 1, 2012 :
• PSAK 10 (Revised 2010) – The Effects of changes in Foreign Exchange Rates.
• PSAK 16 (Revised 2011) – Property, Plant and Equipment
• PSAK 18 (Revised 2010) – Accounting and Reporting by Retirement Benefit Plans.
• PSAK 24 (Revised 2010) – Employee Benefits.
• PSAK 26 (Revised 2011) – Borrowing Costs
• PSAK 28 (Revised 2011) – Accounting for Casuality Insurance Contract
• PSAK 30 (Revised 2011) – Leases
• PSAK 33 (Revised 2011) – Stripping Cost Activity and Environmenal Management in the
Public Mining
• PSAK 34 (Revised 2010) – Construction Contracts.
• PSAK 36 (Revised 2011) – Accounting for Life Insurance Contract
• PSAK 45 (Revised 2010) – Financial Reporting for Non-Profit Organization
• PSAK 46 (Revised 2010) – Income Taxes.
• PSAK 50 (Revised 2010) – Financial Instruments : Presentation.
• PSAK 53 (Revised 2010) – Share-based Payment.
• PSAK 55 (Revised 2011) – Financial Instruments : Recognition and Measurement
• PSAK 56 (Revised 2011) – Earnings per shares
• PSAK 60 – Financial Instruments : Disclosures.
• PSAK 61 – Accounting for Government Grants and Disclosure of
Government Assistance.
• PSAK 62 – Insurance Contract
• PSAK 63 – Financial Reporting in Hyperinflationary Economies.
• PSAK 64 – Exploration and evaluation of Mineral Resources
• ISAK 13 – Hedge of Net Investment in Foreign Operation.
• ISAK 15 – The Limit on a Defined Benefit Asset, Minimum Funding
Requirements and their Interaction.
• ISAK 16 – Services Concession Arrangements
• ISAK 18 – Government Assistance – No Specific Relation to Operating
Activities.
• ISAK 19 – Applying the restatement approach in PSAK 63 : Financial
Reporting in Hyperinflationary Economies
• ISAK 20 – Income Taxes – Changes in the Tax Status of an Entity or its
Shareholders.
• ISAK 22 – Service Concession Arrangements : Disclosures
• ISAK 23 – Operating Leases – Incentives
• ISAK 24 – Evaluating the Substance of Transactions involving the Legal
Form of a Lease
• ISAK 25 – Land Rights
• ISAK 26 – Reassessment of Embedded Derivatives
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2011 and 2010
117
56. PRONOUNCEMENT OF NEW ACCOUNTING STANDARDS (Continued) b. The Indonesian Institute of Accountants (“IIA”) has issued new or revision of the following the
Indonesian Financial Accounting Standards (“PSAK”) and its interpretation (“ISAK”). The accounting standards which will be effective or applicable on the Company financial statements covering periods beginning on or after January 1, 2013 :
• ISAK 21 – Agreements for the Constructions of Real Estate
The Company’s management is currently evaluating the possible impact on these new or revised accounting standards and interpretations on its consolidated financial statements.
57. SUPPLEMENTARY FINANCIAL INFORMATION
The Company published consolidated financial statements. The supplementary financial information of PT Asia Pacific Fibers Tbk (Parent Company only) in schedule 1 until schedule 7 that has been prepared in order to analyse parent Company only’s result of operations. The following supplementary financial information of PT Asia Pacific Fibers Tbk (Parent Company only) should be read in conjuction with the consolidated financial statements of PT Asia Pacific Fibers Tbk and its Subsidiaries. According to PSAK No. 4 (Revised 2009), parent Company has measured the investment in subsidiary using the cost method, which was previously measured using the equity method. With the adoption of PSAK No. 4 resulted the adjustment of Rp 1,929,673,610,257 which is recorded in the beginning of accumulated deficits in 2010.
58. PRESENTATION AND RESPONSIBILITY OF THE CONSOLIDATED FINANCIAL
STATEMENTS
The Company’s directors are responsible for the preparation and presentation of the consolidated financial statements that was completed and authorized for issue on March 21, 2012.
Schedule -1
SUPPLEMENTARY FINANCIAL INFORMATION
PT ASIA PACIFIC FIBERS Tbk
(PARENT COMPANY ONLY)
STATEMENTS OF FINANCIAL POSITION
December 31, 2011, December 31, 2010 and January 1, 2010
A S S E T S
December 31,
2 0 1 1
December 31,
2 0 1 0
(As Restated)
January 1,
2 0 1 0
(As Restated)
Rp Rp Rp
CURRENT ASSETS
Cash and cash equivalents 30,990,690,495 87,356,159,090 61,535,283,406
Short term investments 3,000,000,000 1,000,000,000 3,500,000,000
Trade receivables, net after allowance for
impairment of Rp 141,986,246,529
in 2011 and Rp Nil in 2010
Third parties 454,265,227,439 422,111,905,807 279,109,672,287
Related parties 268,722,447,175 410,708,693,704 410,708,693,704
Other receivables, net after allowance for
impairment of Rp 330,163,685,573
in 2011 and Rp 330,437,899,419 in 2010
Third parties 22,937,261,126 4,115,422,435 5,180,509,523
Inventories 795,058,287,598 458,311,330,390 457,252,353,016
Purchase advances 343,195,422,233 290,672,668,878 245,937,124,918
Prepaid taxes 119,411,500,545 124,902,276,343 84,688,222,794
Prepaid expenses 10,588,262,122 7,830,955,214 6,657,155,331
Advances for investment in a joint venture − − 5,914,525,920
Other current assets 52,018,685,430 26,473,126,432 2,189,069,332
Total current assets 2,100,187,784,163 1,833,482,538,293 1,562,672,610,231
NON–CURRENT ASSETS
Non-trade receivables from related parties,
net after allowance for impairment of
Rp 1,015,374,640,487 in 2011 and
Rp 50,234,341,481 in 2010 341,518,011,387 1,301,732,278,186 1,297,995,314,444
Restricted cash in banks 10,345,623,643 10,291,395,798 10,579,437,205
Investment in subsidiaries 293,709,800 168,193,709,800 168,193,709,800
Property, plant and equipment, net after
accumulated depreciation of
Rp 8,573,556,432,737 in 2011 and
Rp 8,070,101,601,075 in 2010 1,255,117,683,754 1,677,799,396,413 2,147,549,051,438
Total non–current assets 1,607,275,028,584 3,158,016,780,197 3,624,317,512,887
TOTAL ASSETS 3,707,462,812,747 4,991,499,318,490 5,186,990,123,118
Schedule -2
SUPPLEMENTARY FINANCIAL INFORMATION
PT ASIA PACIFIC FIBERS Tbk
(PARENT COMPANY ONLY)
STATEMENTS OF FINANCIAL POSITION (Continued)
December 31, 2011, December 31, 2010 and January 1, 2010
LIABILITIES AND EQUITY (DEFICIENCY)
December 31,
2 0 1 1
December 31,
2 0 1 0
(As Restated)
January 1,
2 0 1 0
(As Restated)
Rp Rp Rp
CURRENT LIABILITIES
Bank Loans 637,839,711,337 431,987,380,441 408,047,983,987
Secured Debts 9,185,233,096,043 9,107,034,576,501 9,435,139,803,808
Trade payables
Third parties 215,808,272,379 178,428,588,562 337,456,069,142
Related party − 1,218,619,613 −
Taxes payable 17,567,520,945 18,337,551,362 19,852,961,889
Accrued expenses 413,557,919,140 491,360,573,180 540,447,343,900
Current maturity of long-term
liabilities:
Working capital loans 77,078,000,000 38,958,003,000 3,451,313,400
Credit financing payables 517,187,846 475,480,013 156,641,665
Other current liabilities 37,870,049,132 43,279,993,064 32,608,169,328
Total current liabilities 10,585,471,756,822 10,311,080,765,736 10,777,160,287,119
NON–CURRENT LIABILITIES
Long-term liabilities- net of
current maturity :
Unsecured Debts and Notes Payable 198,997,359,748 189,504,468,044 190,289,560,544
Working capital loans 131,486,000,000 326,174,259,309 341,012,487,762
Credit financing payables 440,023,412 696,228,253 154,802,097
Employees’ benefit liabilities 77,637,935,506 58,478,203,188 45,745,031,796
Deferred tax liabilities 30,568,446,603 89,854,542,024 150,181,963,385
Total non–current liabilities 439,129,765,269 664,707,700,818 727,383,845,584
Schedule -3
SUPPLEMENTARY FINANCIAL INFORMATION
PT ASIA PACIFIC FIBERS Tbk
(PARENT COMPANY ONLY)
STATEMENTS OF FINANCIAL POSITION (Continued)
December 31, 2011, December 31, 2010 and January 1, 2010
LIABILITIES AND EQUITY (DEFICIENCY)
December 31,
2 0 1 1
December 31,
2 0 1 0
(As Restated)
January 1,
2 0 1 0
(As Restated)
Rp Rp Rp
EQUITY (DEFICIENCY)
Capital stock
Authorized 12,357,255,040 shares at
Rp 10,000 par value per Series A,
Rp 1,000 par value per Series B and
Rp 40 par value per Series C
in 2011 and 2010
Issued and paid up 219,696,000
Series A and 2,157,211,950
Series C in 2011 and 2010 2,283,248,477,500 2,283,248,477,500 2,283,248,477,500
Additional paid-in capital 5,586,506,149,053 5,586,506,149,053 5,586,506,149,053
Retained earnings
(accumulated deficit)
Appropriated 8,280,000,000 8,280,000,000 8,280,000,000
Unappropriated (15,195,173,335,897) (13,862,323,774,617 ) (14,195,588,636,138)
Total equity (deficiency)
attributable to the owners
of the Company
(7,137,138,709,344
)
(5,984,289,148,064
)
(6,317,554,009,585
)
TOTAL LIABILITIES AND
EQUITY (DEFICIENCY) 3,707,462,812,747 4,991,499,318,490 5,186,990,123,118
Schedule -4
SUPPLEMENTARY FINANCIAL INFORMATION
PT ASIA PACIFIC FIBERS Tbk
(PARENT COMPANY ONLY)
STATEMENTS OF COMPREHENSIVE INCOME
For the years ended December 31, 2011 and 2010
2 0 1 1 2 0 1 0
(As Restated)
Rp Rp
OPERATING REVENUES
Net sales 5,577,223,233,050 4,455,449,431,196
Other operating revenues 4,673,888,541 6,254,259,196
Total operating revenues 5,581,897,121,591 4,461,703,690,392
COST OF GOODS SOLD (5,194,841,458,938 ) (4,132,801,446,187)
GROSS PROFIT 387,055,662,653 328,902,244,205
OPERATING EXPENSES
Selling expenses (120,468,271,917 ) (151,230,661,906)
General and administrative expenses (164,956,335,861 ) (152,914,237,900)
Total operating expenses (285,424,607,778 ) (304,144,899,806)
PROFIT FROM OPERATIONS 101,631,054,875 24,757,344,399
OTHER INCOME (CHARGES)
Interest income 185,188,989 232,252,259
Insurance claim settlement, net 755,425,253 3,912,505,783
Gain (loss) on foreign exchange transactions, net (83,939,034,346 ) 369,581,472,402
Interest expense and bank charges (142,803,764,229 ) (124,400,348,814)
Miscellaneous income (expense), net (1,100,064,527,243 ) 4,196,012,778
Gain on sale of property, plant and equipment – 572,727,273
Loss on investment in joint venture – (5,914,525,920)
Total other income (charges), net (1,325,866,711,576 ) 248,180,095,761
PROFIT (LOSS) BEFORE INCOME TAX (1,224,235,656,701 ) 272,937,440,160
TAX INCOME (EXPENSE)
Current period – –
Deferred 59,286,095,421 60,327,421,361
Total tax income 59,286,095,421 60,327,421,361
NET PROFIT (LOSS) FROM CONTINUING OPERATIONS (1,164,949,561,280 ) 333,264,861,521
Loss from disposal of Subsidiary (167,900,000,000 ) –
TOTAL COMPREHENSIVE INCOME (LOSS)
FOR THE YEAR
(1,332,849,561,280
) 333,264,861,521
BASIC EARNING (LOSS) PER SHARE (561 ) 141
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17
)(5
,984
,289
,148
,064
)
To
tal
com
pre
hen
sive
loss
fo
r th
e yea
r
–
–
–
–
–
–
(1,3
32
,84
9,5
61
,28
0 )
(1,3
32
,849
,561
,280
)
Bal
ance
as
of
Dec
emb
er 3
1,
20
11
2,2
83
,24
8,4
77
,50
0
5,5
86,5
06,1
49,0
53
–
–
–
8,2
80,0
00,0
00
(15
,19
5,1
73
,33
5,8
97
)(7
,317
,138
,709
,344
)
Schedule -6
SUPPLEMENTARY FINANCIAL INFORMATION
PT ASIA PACIFIC FIBERS Tbk
(PARENT COMPANY ONLY)
STATEMENTS OF CASH FLOWS
For the years ended December 31, 2011 and 2010
2 0 1 1 2 0 1 0
Rp Rp
CASH FLOWS FROM OPERATING ACTIVITIES
Receipt from customers 5,673,816,758,805 4,570,849,739,332
Payment to suppliers (1,067,788,023,128 ) (1,266,227,673,615 )
Payment of salaries (136,621,636,479 ) (127,789,231,195 )
Other operating cash payments, net (308,935,167,494 ) (551,713,916,480 )
Cash provided by operations 4,160,471,931,704 2,625,118,918,042
Interest received 180,331,211 247,828,786
Interest expense and bank charges paid (138,419,839,803 ) (122,261,988,548 )
Cash receipt from insurance claim settlement 1,101,259,119 989,928,087
Payment of income tax (102,802,042,218 ) (8,463,579,257 )
Refund of income tax 64,828,470,645 65,955,290,106
Net cash provided by operating activities 3,985,360,110,658 2,561,586,397,216
CASH FLOWS FROM INVESTING ACTIVITIES
Payment to acquire property, plant and equipment (80,771,119,003 ) (32,157,279,361 )
Proceed from sale of property, plant and equipment − 572,727,273
Increase of short-term investments (2,000,000,000 ) −
Payment of non-trade receivables from related parties (24,713,231,369 ) (147,208,316,171 )
Payment of other receivables (6,047,211,930 ) −
Increase of other current assets (24,322,087,086 )) (24,127,214,000 )
Net cash used in investing activities (137,853,649,388 ) (202,920,082,259 )
CASH FLOWS FROM FINANCING ACTIVITIES
Payment of bank loans (3,759,896,128,247 ) (2,349,271,697,000 )
Receipt of working capital loans 74,474,100,000 35,653,947,627
Payment of working capital loans (227,601,948,781 ) −
Receipt of credit financing payables 305,238,390 −
Payment of credit financing payables (519,739,797 ) (274,216,087 )
Net cash used in financing activities (3,913,238,478,435 ) (2.313.891.965.460 )
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS
(65,732,017,165
)
44,774,349,498
EFFECT OF FOREIGN EXCHANGE RATE 9,366,548,570 (18,953,473,814 )
CASH AND CASH EQUIVALENTS
AT BEGINNING OF YEAR
87,356,159,090
61,535,283,406
CASH AND CASH EQUIVALENTS
AT END OF YEAR
30,990,690,495
87,356,159,090
Schedule -7
SUPPLEMENTARY FINANCIAL INFORMATION
PT ASIA PACIFIC FIBERS Tbk
(PARENT COMPANY ONLY)
STATEMENTS OF CASH FLOWS (Continued)
For the years ended December 31, 2011 and 2010
2 0 1 1 2 0 1 0
Rp Rp
ADDITIONAL SCHEDULE OF NON–CASH
INVESTING AND FINANCING ACTIVITIES :
Acquired of property, plant and equipment direct
acquisition through credit financing payables 408,913,636 2,166,176,545
Capitalization of interest expenses to unsecured debts
and notes payable 7,620,301,967 7,619,182,985