SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
o. Taxation
Under PSAK No.46, current tax expenses will be determined based on profit subject to tax for the current period and calculated using the currently applying tax rates.
Deferred tax assets and liabilities are recognized for temporary differences between the financial and the tax bases of assets and liabilities at each reporting date. Future tax benefits, such as the carry-forward of unused tax losses, are also recognized
to the extent that realization of such benefits is probable. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is
realized or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the statements of financial position date.
Amendments to tax obligations are recorded when an assessments is received or, if appealed against by the Entity, when the result of the appeal is determined.
Indonesian tax regulations do not apply a concept of consolidated tax returns. Therefore, the tax balances in the consolidated financial statements represent the combination of the Entity’s and its Subsidiaries tax position.
p. Employee Benefit Liabilities
The Entity recognizes an unfunded employee benefit liability in accordance with Labor Law No. 132003 dated March 25, 2003 “the Law”. Before January 1, 2005, the Entity recognized employee benefits obligations based on the actuary
assessment under PSAK No.24 Cost Benefit Pension Accounting published in 1994. Under PSAK No. 24 Revised 2004, Employee Benefit, the cost of providing employee benefit under the Law is determined
using the projected unit credit actuarial valuation method based on projected unit credit. Actuarial gains and losses are recognized as income or expense when the net cumulative unrecognized actuarial gains and losses for each individual plan at
the end of the previous reporting year exceeded 10 of the defined benefit obligation and 10 of the fair value of plan assets. These gains or losses are recognized on a straight-line method of the expected average remaining working lives of
the employees. Further, past-service costs arising from the introduction of a defined benefit plan or changes in the benefit payable of an existing plan are required to be amortized over the period until the benefits concerned become vested.
q. Discontinuing Operation
The discontinuing of operation for an unknown period of time and unknown management plan for the future to continue its operation in textile industry since its inability to compete in international or local market, the increase of transportation costs,
increase of world oil prices and raw material cotton, where the Entitys division activities can be separated operationally and the purpose of financial statement reporting in the Entity and its Subsidiaries as a whole, have to be calculated in accordance
with PSAK No.58 Revised 2009 on Non-Current Assets, Held for Sale and Discontinued Operations. PSAK No.58 Revised 2009 obligate the financial statements prepared in the period where required the financial statements prepared in the
period in which there are plans to discontinue actions preliminary disclosure must be included in the information related to discontinued operation.
In order to disclose asset valuation, liabilities, income, expenses, gains, losses and cash flows of discontinued operation in accordance with PSAK revealed that those elements of financial statement can be directly attributed to the discontinued
operation, if those elements will be sold, left out, expended or eliminated by the time the discontinuing process of operation has finished. In reverse, foresaid elements considered being used continually after the discontinuing process cannot be
included in the discontinued operation classification. Comparative information on the prior year should be presented to distinguish between continued and discontinued operation.
r. Basic Earnings Per Share
In accordance with PSAK No. 56, Earning Per Share, net income loss from normal operations per share and net income loss per share are computed by dividing the respective income loss with the weighted average number of shares
outstanding during the year. Earnings per share calculations are based on 118,267,864 shares and 98,236,000 shares for the year ended December 31, 2011 and December 31, 2010.
02
s. Segment Information
In accordance with PSAK No. 5 Revised 2009,Operating Segments, business segments provide information of products or services that are subjected to risks and returns that are different from those of other business segments. Geographical
segments provide information of products or services within a particular economic environment that are subject to risks and returns that are different from those of components operating in other economic environments.
Revenue, expense, assets and liabilities segments are determined before intra-group balances and transactions within the group are eliminated as part of the consolidation process.
t. Changes of Accounting Policies
The followings are amendments of accounting standards, changes and interpretations, which become effective starting January 1, 2011 and relevant to Entity and its Subsidiary:
- PSAK No. 1 Revised 2009, Presentation of Financial Statements. - PSAK No. 2 Revised 2009, Statement of Cash Flows.
- PSAK No. 3 Revised 2010, Interim Financial Statements. - PSAK No. 4 Revised 2009, Consolidated and Separate Financial Statements.
- PSAK No. 5 Revised 2009, Operating Segments. - PSAK No. 7 Revised 2010, Related Party Disclosures.
- PSAK No. 8 Revised 2010, Subsequent Events After Reporting Period. - PSAK No. 19 Revised 2010, Intangible Assets.
- PSAK No. 23 Revised 2010, Revenue. - PSAK No. 25 Revised 2009, Accounting Policies, Changes in Accounting Estimates and Errors.
- PSAK No. 48 Revised 2009, Declining in Value of Assets. - PSAK No. 58 Revised 2009, Non-Current Assets, Held for Sale and Discontinued Operations.
- ISAK No. 14 Revised 2010, Intangible Assets. - ISAK No. 17 , Interim Financial Statements and Declining in Value.
Effect of the accounting policies changes in Entity and its Subsidiaries in respect of whether the implementation of the above new accounting standards are insignificant, except for this area:
Presentation of Financial Statements
Entity and its subsidiaries implemented PSAK No 1 Revised 2009, Presentation of Financial Statements, which effective started January 1, 2011. Significant changes of accounting standards to Entity and its Subsidiaries are as follows:
- The consolidated financial statements comprise of consolidated statements of financial position, consolidated statements of comprehensive income, consolidated statements of changes in equity capital deficiency, consolidated
statements of cash flows and notes to consolidated financial statements. Whilst, previously, the consolidated financial statements comprise of consolidated balance sheets, consolidated statement of income, consolidated statement of
changes in equity capital deficiency, consolidated statement of cash flows and notes to consolidated financial statements.
- Non-controlling interest is presented within equity, previously minority interest is presented separately between the liabilities and equities.
02
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
PT ERATEX DJAJA Tbk AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
continued
For the years ended December 31, 2011 and 2010 Expressed in thousands of Rupiah and in thousands of United States Dollars, unless otherwise stated
115 114
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PT. ERATEX DJAJA Tbk Laporan Tahunan 2011 Annual Report 2011
PT ERATEX DJAJA Tbk AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
continued
For the years ended December 31, 2011 and 2010 Expressed in thousands of Rupiah and in thousands of United States Dollars, unless otherwise stated
03
SOURCE OF ESTIMATION UNCERTAINTY
Judgments
The preparation of the financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the end of the
reporting period. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset and liability affected in future periods.
The following judgments are made by management in the process of applying the accounting policies that have the most significant effects on the amounts recognized in the financial statements.
Classification of financial assets and financial liabilities
The Entity determines the classifications of certain assets and liabilities as financial assets and financial liabilities by judging if they meet the definition set forth in PSAK No. 55 Revised 2006. Accordingly, the financial assets and financial liabilities are
accounted for in accordance with the Entitys accounting policies disclosed in Note 2.g.
Income tax
Significant judgment is involved in determining the provision for corporate income tax. There are certain transactions and computation for which the ultimate tax determination is uncertain during the ordinary course of business. The Entity
recognizes liabilities for expected corporate income tax issues based on estimates of whether additional corporate income tax will be due.
Estimates and Assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial
periodyear are disclosed below. The Entity based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments may change due to market
changes or circumstances arising beyond the control of the Entity. Such changes are reflected in the assumptions when they occur.
Pension and employees benefits
The determination of the Entitys 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, future annual salary increase, annual employee turnover rate, disability rate, retirement age and mortality rate.
Actual results that differ from the Entitys assumptions are recognized immediately in the profit or loss as and when they occurred. While the Entity believes that its assumptions are reasonable and appropriate, significant differences in the
Entitys actual experiences or significant changes in the Entitys in the Entitys assumptions may materially affect its estimated liabilities for pension and employees benefits and net employee benefits expenses. The carrying amount of the
Entitys estimated liabilities for employee benefits as of December 31, 2011 amounted to Rp 10,893,257, December 31, 2010 amounted to Rp 10,755,350 and January 1, 2010 amounted to Rp 10,194,583. Note 22.
Depreciation of fixed assets
The costs of fixed assets are depreciated on a straight-line method over their estimated useful lives. Management estimates the useful lives of these fixed assets to be within 10 to 25 years. These are common life expectancies applied in the
industries where the Entity conducts its businesses. 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. The net carrying amount of the Entitys fixed assets as of December 31, 2011 amounted to Rp 33,638,279, December 31, 2010 amounted to Rp 31,628,427 and January 1, 2010 amounted to Rp 34,330,004.Note 12.
Financial instrument
The Entity and its Subsidiaries carry certain financial assets and liabilities at fair value, which requires the use of accounting estimates. While significant components of fair value measurement were determined using verifiable objective evidences,
the amount of changes in fair value would differ if the Entity and its Subsidiaries utilized a different valuation methodology. Any changes in a fair value of these financial assets and liabilities would directly affect the Entitys comprehensive profit or
loss.
The carrying amount of financial liability carried at fair value in the consolidated statement of financial position as of December 31, 2011 amounted to US 7.000 or equivalent to Rp 63,476,000, Desember 31, 2010 and January 1, 2010
amounted to nil Note 19. Based on Circular Resolutions in Lieu of Board of Commissioners Meeting of PT Eratex Djaja Tbk on July 14, 2008, the Entitys
President Director gained authority to discontinue the operation of textile division and announce that discontinuing. The textile division operation has been stopped for unlimited period of time, in terms of decreasing economic stability, prospect of the
current business and the loss occurred in effect of the whole Entitys performance.
The operation of textile division was officially discontinued in August 2008. The main classifications of assets and liabilities of the discontinued operations are listed below:
04
DISCONTINUING OPERATION
ASSETS
Trade receivables - third parties, net Note 6 -
- -
- Other receivables - third parties, net Note 7
- 25,440
- 3
Inventories, net Note 8 157,632
157,632 17
18 Deferred tax assets Note 21d
103,668 104,011
11 12
Fixed assets, net Note 12 7,022,795
7,022,795 775
781 Intangible assets, net Note 13
- 279
- Guarantee deposits
250,000 250,000
27 27
Total 7,584,095
7,560,157 831
841
LIABILITIES
Trade payables - third parties Note 15 -
191,793 -
21 Other payables - third parties Note 16
- 13,636
- 2
Total -
205,429 -
23
REVENUE
Operating expenses Notes 30 -
26,401 -
3
Operating loss -
26,401 -
3
OTHER INCOME EXPENSES
Interest income -
477 -
Foreign exchange gain, net 6,709
5,121 1
1 Gain on disposal of fixed assets
- 55,900
- 6
Provision for declining in receivables value 25,440
8,155 3
1 Others, net
- 20,000
- 2
Total other expenses, net 18,731
33,343 2
4 Income before corporate income tax
18,731 6,941
2 1
Income tax expense -
218,811 -
24
Rp Rp
US US
Dec 31, 2011 Dec 31, 2010 Dec 31, 2011 Dec 31, 2010
NET INCOME LOSS 211,869
2 24
18,731
PT ERATEX DJAJA Tbk AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
continued
For the years ended December 31, 2011 and 2010 Expressed in thousands of Rupiah and in thousands of United States Dollars, unless otherwise stated
117 116
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PT. ERATEX DJAJA Tbk Laporan Tahunan 2011 Annual Report 2011
PT ERATEX DJAJA Tbk AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
continued
For the years ended December 31, 2011 and 2010 Expressed in thousands of Rupiah and in thousands of United States Dollars, unless otherwise stated
CASH AND CASH EQUIVALENTS
04 05
CONTINUING OPERATION
Cash on hand 91,675
149,662 10
17
Cash in banks: Rupiah:
The Hongkong and Shanghai Banking Corporation Ltd 1,914,336
149,277 211
17 PT Bank Mandiri Persero Tbk
17,925 47,601
2 5
PT Bank Tabungan Pensiunan Nasional Tbk 10,370
- 1
- PT Bank Central Asia Tbk
676 10,960
1 US Dollar:
The Hongkong and Shanghai Banking Corporation Ltd 12,160 12,396
1 1
PT Bank Mandiri Persero Tbk 7,236
464,760 1
52 Others
107 -
- PT Bank DBS Indonesia
- 11,947
- 1
Euro: The Hongkong and Shanghai Banking Corporation Ltd
2,403 105,239
12 HK Dollar:
The Hongkong and Shanghai Banking Corporation Ltd 290,175
- 32
-
Total cash equivalents 2,255,388
802,180 249
89 Total cash and cash equivalents
2,347,063 951,842
259 106
There is no balance of cash and cash equivalents to related parties.
Rp Rp
US US
Dec 31, 2011 Dec 31, 2010 Dec 31, 2011 Dec 31, 2010
TRADE RECEIVABLES - THIRD PARTIES
This account consists of:
06
CONTINUING OPERATION
Export sales 42,583,191
17,140,303 4,696
1,906 Local sales
201,689 277,984
22 31
Total trade receivables - third parties 42,784,880
17,418,287 4,718
1,937 Less: Provision for declining in value
- -
- -
Total trade receivables - third parties, net 42,784,880
17,418,287 4,718
1,937
DISCONTINUING OPERATION
Local sales 615,107
615,107 68
68
Total trade receivables - third parties 615,107
615,107 68
68 Less: Provision for declining in value
615,107 615,107
68 68
Total trade receivables - third parties, net Note 4 -
- -
- Dec 31, 2011 Dec 31, 2010 Dec 31, 2011 Dec 31, 2010
Rp Rp
US US
TRADE RECEIVABLES - THIRD PARTIES continued
Details of trade receivables from third parties are as follows:
Aging analysis of trade receivables from third parties since issuance of invoices are as follows:
06
CONTINUING OPERATION
Export customers 42,138,534
17,140,303 4,647
1,906 PT Dwi Putra Sakti
201,689 224,605
22 25
Other customers below Rp 500,000 each 444,657
53,379 49
6
Total
DISCONTINUING OPERATION
Mr. Deddy 606,952
606,952 67
67 Other customers below Rp 500,000 each
8,155 8,155
1 1
Total Note 4 615,107
615,107 68
68 Dec 31, 2011 Dec 31, 2010 Dec 31, 2011 Dec 31, 2010
Rp Rp
US US
42,784,880 17,418,287
4,718 1,937
CONTINUING OPERATION
Less than 1 month 30,405,166
12,135,134 3,353
1,350 1 - less than 3 months
12,379,714 4,743,309
1,365 528
3 - less than 6 months -
539,844 -
60 More than 12 months
- -
- -
Total
DISCONTINUING OPERATION
1 - less than 3 months -
- -
- 3 - less than 6 months
- -
- -
More than 12 months 615,107
615,107 68
68
Total Note 4 615,107
615,107 68
68 Dec 31, 2011 Dec 31, 2010 Dec 31, 2011 Dec 31, 2010
Rp Rp
US US
42,784,880 17,418,287
4,718 1,937
Details of trade receivables from third parties based on currency are as follows:
CONTINUING OPERATION
Rupiah 201,690
277,984 22
31 Foreign currencies
42,583,190 17,140,303
4,696 1,906
Total
DISCONTINUING OPERATION
Rupiah 615,107
615,107 68
68
Total Note 4 615,107
615,107 68
68 Dec 31, 2011 Dec 31, 2010 Dec 31, 2011 Dec 31, 2010
Rp Rp
US US
42,784,880 17,418,287
4,718 1,937
PT ERATEX DJAJA Tbk AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
continued
For the years ended December 31, 2011 and 2010 Expressed in thousands of Rupiah and in thousands of United States Dollars, unless otherwise stated
119 118
Laporan Tahunan 2011 Annual Report 2011 PT. ERATEX DJAJA Tbk
PT. ERATEX DJAJA Tbk Laporan Tahunan 2011 Annual Report 2011
PT ERATEX DJAJA Tbk AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
continued
For the years ended December 31, 2011 and 2010 Expressed in thousands of Rupiah and in thousands of United States Dollars, unless otherwise stated
TRADE RECEIVABLES - THIRD PARTIES continued
Movement in provision for declining in value is as follows:
In 2011, these receivables are not pledged as collateral for any loan. Whereas on December 31, 2010, receivables used as collateral for bank loan Note 19.
Management believes that the provision for declining in value on trade receivables is adequate to cover possible losses on uncollectible accounts.
06
DISCONTINUING OPERATION
Balance at beginning of the year 615,107
606,952 68
67 Add: Provision during the year
- 8,155
- 1
Less: Receivables payment -
- -
-
Balance at end of the year Note 4 615,107
615,107 68
68 Dec 31, 2011 Dec 31, 2010
Dec 31, 2011 Dec 31, 2010 Rp
Rp US
US
OTHER RECEIVABLES - THIRD PARTIES
This account consists of:
07
CONTINUING OPERATION
Temporary advances 123,965
473,293 14
52 Others
610,718 442,440
67 49
Total other receivables - third parties 734,683
915,733 81
101
Less: Provision for declining in value Balance at beginning of the year
335,401 320,505
37 35
Add: Provision during the year 52,349
28,797 6
2 Add less: Foreign exchange revaluation
2,617 13,902
1
Balance at end of year 390,367
335,400 43
36 Total other receivables - third parties, net
344,316 580,333
38 65
DISCONTINUING OPERATION
Others 25,440
25,440 3
3
Total other receivables - third parties 25,440
25,440 3
3
Balance at beginning of the year -
- -
- Add: Provision during the year
25,440 -
3 -
Less: Write off receivables -
- -
-
Balance at end of year 25,440
- 3
- Total other receivables - third parties Note 4
- 25,440
- 3
Management believes that the provision for declining in value on other receivables is adequate to cover possible losses on uncollectible accounts.
Rp Rp
US US
Dec 31, 2011 Dec 31, 2010 Dec 31, 2011 Dec 31, 2010
INVENTORIES
This account consist of:
08
CONTINUING OPERATION
Finished goods 21,724,580
10,756,124 2,396
1,196 Goods in process
15,746,340 5,401,156
1,736 601
Raw materials 31,307,079
19,869,451 3,452
2,210 Sundry stores
10,493,412 8,099,231
1,157 901
Inventory in transit 3,090,413
10,829,496 341
1,205
Total inventories 82,361,824
54,955,458 9,083
6,113 Less: Provision for declining in value
3,927,511 4,491,308
433 500
Total inventories, net 78,434,313
50,464,150 8,650
5,613
DISCONTINUING OPERATION
Sundry stores 297,232
297,232 33
33
Total inventories 297,232
297,232 33
33 Less: Provision for declining in value
139,600 139,600
15 16
Total inventories, net Note 4 157,632
157,632 17
18 D
Rp Rp
US US
ec 31, 2011 Dec 31, 2010 Dec 31, 2011 Dec 31, 2010
Movements in provision for declining in value of inventories are as follows:
Details of provision for the declining in value of inventories as of statements of financial position dates are as follows:
CONTINUING OPERATION
Raw materials 1,944,546
2,556,866 214
285 Finished goods
1,982,965 1,934,442
219 215
Total provision for declining in value 3,927,511
4,491,308 433
500
DISCONTINUING OPERATION
Sundry stores 139,600
139,600 15
16
Total provision for declining in value Note 4 139,600
139,600 15
16 Dec 31, 2011 Dec 31, 2010 Dec 31, 2011 Dec 31, 2010
Rp Rp
US US
CONTINUING OPERATION
Balance at beginning of the year 4,491,308
203,356 495
23 Add: Provision during the year
768,308 4,287,952
85 477
Less: Utilization of provision during the year 1,332,105
- 147
-
Balance at end of the year 3,927,511
4,491,308 433
500
DISCONTINUING OPERATION
Balance at beginning of the year 139,600
139,600 15
16 Add: Provision during the year
- -
- -
Less: Utilization of provision during the year -
- -
-
Balance at end of the year Note 4 139,600
139,600 15
16 Dec 31, 2011 Dec 31, 2010 Dec 31, 2011 Dec 31, 2010
Rp Rp
US US
PT ERATEX DJAJA Tbk AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
continued
For the years ended December 31, 2011 and 2010 Expressed in thousands of Rupiah and in thousands of United States Dollars, unless otherwise stated
121 120
Laporan Tahunan 2011 Annual Report 2011 PT. ERATEX DJAJA Tbk
PT. ERATEX DJAJA Tbk Laporan Tahunan 2011 Annual Report 2011
PT ERATEX DJAJA Tbk AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
continued
For the years ended December 31, 2011 and 2010 Expressed in thousands of Rupiah and in thousands of United States Dollars, unless otherwise stated
INVENTORIES continued
Inventories as of December 31, 2011 have been insured for fire and other risks for a total coverage of Rp 38 Billion full Rupiah amount for 2011 and Rp 35 Billion full Rupiah amount for 2010.
Management believes that this insurance is adequate to cover the possibility of losses. As on December 31, 2011, these inventories are not pledged as collateral for any loan. Whereas as on December 31, 2010,
inventories used as collateral for bank loan Note 19. Management believes that the provision for declining in value is adequate to cover the possible losses due to decrease in value
of inventory.
08
ADVANCE PAYMENTS
This account consists of:
09
CONTINUING OPERATION
Raw materials and sundry stores 1,823,739
114,642 201
13 Machinery
1,068,942 -
118 -
Others 631,414
552,209 70
61
Total advance payments 3,524,095
666,851 389
74 Dec 31, 2011 Dec 31, 2010
Dec 31, 2011 Dec 31, 2010 Rp
Rp US
US
PREPAID EXPENSES
This account consist of:
10
CONTINUING OPERATION
Insurance 82,368
48,565 9
5 Others
837,580 940,223
92 104
Total prepaid expenses 919,948
988,788 101
109 Dec 31, 2011 Dec 31, 2010 Dec 31, 2011 Dec 31, 2010
Rp Rp
US US
LONG-TERM INVESTMENTS
The balances of long-term investments as of December 31, 2011 and 2010 are as follows:
11
Investment in associates at cost:
PT Pasifik Marketama less than 20 277,500
277,500 31
31 Less: Provision for declining in value of investment
277,500 277,500
31 31
Total long-term investments -
- -
-
The Entity has also invested shares in PT Pasifik Marketama, which is engaged in the marketing of garment products.
Dec 31, 2011 Dec 31, 2010 Dec 31, 2011 Dec 31, 2010
Rp Rp
US US
FIXED ASSETS
12
CONTINUING OPERATION
2011 MOVEMENTS
ACQUISITION COST:
Direct ownership: Land leasehold
8,857 -
- -
8,857 Buildings and structures
8,508,164 126,000
- -
8,634,164 Machineries and equipment
38,752,829 4,554,325
- -
43,307,154 Vehicles
2,825,729 -
108,500 -
2,717,229 Furniture and fixtures
7,903,224 344,384
- -
8,247,608
Sub-total 57,998,803
5,024,709 108,500
- 62,915,012
Total acquisition cost 57,998,803
5,024,709 108,500
- 62,915,012
ACCUMULATED DEPRECIATION:
Direct ownership: Land leasehold
3,834 -
- -
3,834 Buildings and structures
3,358,982 340,747
- -
3,699,729 Machineries and equipment
15,028,668 2,077,263
- -
17,105,932 Vehicles
1,978,087 157,129
108,500 -
2,026,715 Furniture and fixtures
6,000,805 439,718
- -
6,440,523
Total accumulated depreciation 26,370,376
3,014,857 108,500
- 29,276,733
NET BOOK VALUE 31,628,427
33,638,279 EQUIVALENT US
3,518 3,710
DISCONTINUING OPERATION
2011 MOVEMENTS
AT COST OR REVALUATION:
Land leasehold 47,663
- -
- 47,663
Buildings and structures 10,557,306
- -
- 10,557,306
Machineries and equipment 7,625,470
- -
- 7,625,470
Vehicles 1,292,986
- -
- 1,292,986
Furniture and fixtures 1,144,663
- -
- 1,144,663
Sub-total 20,668,088
- -
- 20,668,088
Total acquisition cost 20,668,088
- -
- 20,668,088
ACCUMULATED DEPRECIATION:
Land leasehold 20,633
- -
- 20,633
Buildings and structures 5,182,642
- -
- 5,182,642
Machineries and equipment 6,185,970
- -
- 6,185,970
Vehicles 1,155,340
- -
- 1,155,340
Furniture and fixture 1,100,708
- -
- 1,100,708
Total accumulated depreciation 13,645,293
- -
- 13,645,293
NET BOOK VALUE Note 4 7,022,795
7,022,795 EQUIVALENT US
781 774
Balance Reclassification
Balance Jan 1, 2011
Additions Disposals
correction Dec 31, 2011
Balance Reclassification
Balance Jan 1, 2011
Additions Disposals
correction Dec 31, 2011
PT ERATEX DJAJA Tbk AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
continued
For the years ended December 31, 2011 and 2010 Expressed in thousands of Rupiah and in thousands of United States Dollars, unless otherwise stated
123 122
Laporan Tahunan 2011 Annual Report 2011 PT. ERATEX DJAJA Tbk
PT. ERATEX DJAJA Tbk Laporan Tahunan 2011 Annual Report 2011
PT ERATEX DJAJA Tbk AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
continued
For the years ended December 31, 2011 and 2010 Expressed in thousands of Rupiah and in thousands of United States Dollars, unless otherwise stated
FIXED ASSETS continued
12
CONTINUING OPERATION
2010 MOVEMENTS
ACQUISITION COST:
Direct ownership: Land leasehold
289,068 -
280,211 -
8,857 Buildings and structures
9,373,468 29,050
894,354 -
8,508,164 Machineries and equipment
38,157,144 595,685
- -
38,752,829 Vehicles
2,829,069 -
3,340 -
2,825,729 Furniture and fixtures
7,904,358 110,826
111,960 -
7,903,224
Sub-total 58,553,107
735,561 1,289,865
- 57,998,803
Total acquisition cost 58,553,107
735,561 1,289,865
- 57,998,803
ACCUMULATED DEPRECIATION:
Direct ownership: Land leasehold
111,642 -
107,808 -
3,834 Buildings and structures
3,722,995 354,361
718,374 -
3,358,982 Machineries and equipment
13,038,692 1,989,976
- -
15,028,668 Vehicles
1,798,465 182,962
3,340 -
1,978,087 Furniture and fixtures
5,551,309 558,292
108,796 -
6,000,805
Total accumulated depreciation 24,223,103
3,085,591 938,318
- 26,370,376
NET BOOK VALUE 34,330,004
31,628,427 EQUIVALENT US
3,652 3,518
DISCONTINUING OPERATION
2010 MOVEMENTS
AT COST OR REVALUATION: ACQUISITION COST:
Land leasehold 47,663
- -
- 47,663
Buildings and structures 10,557,306
- -
- 10,557,306
Machineries and equipment 7,625,470
- -
- 7,625,470
Vehicles 1,409,823
- 116,837
- 1,292,986
Furniture and fixtures 1,144,663
- -
- 1,144,663
Sub-total 20,784,925
- 116,837
- 20,668,088
Total acquisition cost 20,784,925
- 116,837
- 20,668,088
ACCUMULATED DEPRECIATION:
Land leasehold 20,633
- -
- 20,633
Buildings and structures 5,182,642
- -
- 5,182,642
Machineries and equipment 6,185,970
- -
- 6,185,970
Vehicles 1,270,577
- 115,237
- 1,155,340
Furniture and fixture 1,100,708
- -
- 1,100,708
Total accumulated depreciation 13,760,530
- 115,237
- 13,645,292
NET BOOK VALUE Note 4 7,024,395
7,022,795 EQUIVALENT US
747 781
Balance Reclassification
Balance Jan 1, 2010
Additions Disposals
correction Dec 31, 2010
Balance Reclassification
Balance Jan 1, 2010
Additions Disposals
correction Dec 31, 2010
FIXED ASSETS continued
12
Disposal represent sales of fixed assets, which can be summarized as follows:
Depreciation expenses for the years ended December 31, 2011 and 2010 are Rp 3,014,857 and Rp 3,085,591, respectively, with the following allocations:
INTANGIBLE ASSETS
This account consists of:
13
CONTINUING OPERATION
ACQUISITION COST:
Software 1,820,959
1,820,959 201
203 Land-rights
113,140 112,861
13 13
Total acquisition cost 1,934,099
1,933,820 214
216 ACCUMULATED AMORTIZATION:
Software 742,976
617,485 82
69 Land-rights
31,065 25,407
3 3
Total accumulated amortization 774,041
642,892 86
72 BOOK VALUE
1,160,058 1,290,928
128 144
Dec 31, 2011 Dec 31, 2010 Dec 31, 2011 Dec 31, 2010
Rp Rp
US US
CONTINUING OPERATION
Net book value of disposals -
351,547 -
39 Sales price
37,500 12,729,973
4 1,416
Gain on disposals of fixed assets 37,500
12,378,426 4
1,377
DISCONTINUING OPERATION
Net book value of disposals -
1,600 -
Sales price -
57,500 -
6
Loss on disposals of fixed assets Note 4 -
55,900 -
6 Dec 31, 2011 Dec 31, 2010 Dec 31, 2011 Dec 31, 2010
Rp Rp
US US
Dec 31, 2011 Dec 31, 2010 Dec 31, 2011 Dec 31, 2010 Rp
Rp US
US
CONTINUING OPERATION
Cost of revenue 2,555,776
2,500,614 282
278 General and administration expenses
459,081 584,977
51 65
Total 3,014,857
3,085,591 332
343
Fixed assets as of December 31, 2011 and 2010 have been insured for fire and other risks for a total coverage of Rp 75 Billion full Rupiah amount for the year 2011 and Rp 84 Billion full Rupiah amount for the year 2010. Management believes that this
insurance is adequate to cover the possibility of losses. Fixed assets land and building are pledged as collateral for long-term loan from related party Note 20.
PT ERATEX DJAJA Tbk AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
continued
For the years ended December 31, 2011 and 2010 Expressed in thousands of Rupiah and in thousands of United States Dollars, unless otherwise stated
125 124
Laporan Tahunan 2011 Annual Report 2011 PT. ERATEX DJAJA Tbk
PT. ERATEX DJAJA Tbk Laporan Tahunan 2011 Annual Report 2011
PT ERATEX DJAJA Tbk AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
continued
For the years ended December 31, 2011 and 2010 Expressed in thousands of Rupiah and in thousands of United States Dollars, unless otherwise stated
INTANGIBLE ASSETS continued
This account consists of:
13
DISCONTINUING OPERATION
ACQUISITION COST:
Land-rights 22,382
22,661 2
2
Total acquisition cost 22,382
22,661 2
2 ACCUMULATED AMORTIZATION:
Land-rights 22,382
22,382 2
2
Total accumulated amortization 22,382
22,382 2
2 BOOK VALUE Note 4
- 279
- Dec 31, 2011 Dec 31, 2010
Dec 31, 2011 Dec 31, 2010 Rp
Rp US
US
SHORT-TERM LOANS
This account consists of:
The Hongkong and Shanghai Banking Corporation Limited
The Hongkong and Shanghai Banking Corporation Limited, Jakarta Branch HSBC provided trade and working capital financing facilities which have been restructured on June 25, 2010. This restructuring credit facility has been extended with Amendment
to Corporate Facility Agreement No: JAK110197U110223 which effective until May 31, 2011. In the Amendment of restructuring credit facilities No: JAK110197U110223, the Entity obtained a short-term loan facilities as
follows: • Overdraft I with a limit of US 600 with best lending rate minus 7.75 per annum;
• Overdraft III with a limit of US 700 with best lending rate minus 5 per annum; • Combined Limit CBL I with a limit of US 8,400 with best lending rate minus 5 per annum;
• Exposure Risk Limit with a limit of US 400; • Irregular Installment Loan 4 with a limit of US 1,800 with best lending rate minus 5 per annum.
14
CONTINUING OPERATION
The Hongkong and Shanghai Banking Corp Ltd 62,383,824
95,657,136 6,880
10,639 Gillespie International Limited
27,204,000 -
3,000 -
PT Bank DBS Indonesia -
23,972,564 -
2,666
Total short-term loans 89,587,824
119,629,700 9,880
13,305 Dec 31, 2011 Dec 31, 2010 Dec 31, 2011 Dec 31, 2010
Rp Rp
US US
PT Bank DBS Indonesia
In 2006, PT Bank DBS Indonesia provided facilities for trade finance with a limit of US 6,000, outstanding balances as of December 31, 2010 amounted to US 2,316 or equivalent to Rp 20,826,961. Entity also obtain revolving loan facility from PT
Bank DBS Indonesia with a limit of US 3,000, outstanding balances as of December 31, 2010 amounted to US 349 or equivalent to Rp 3,145,603.
Interest rate was charged 8 per annum. On June 28, 2011, PT Bank DBS Indonesia has transferred the entire loan, including all rights, interests, and any benefits arising
to The Hongkong and Shanghai Banking Corporation Limited in the principal amount outstanding of US 2,666 and interest expense amount outstanding of US 783, so the total amount of the transferred loans was US 3,449.
SHORT-TERM LOANS continued
14
The Hongkong and Shanghai Banking Corporation Limited continued
Based on Transfer Notice Letter dated November 14, 2011, The Hongkong and Shanghai Banking Corporation Limited has transferred the entire loan amounted to US 24,427 and US 3,449 which taken over from PT Bank DBS Indonesia, including all
rights, interests, and any benefits arising to Gillespie International Limited. The Entity still obtain credit facility from The Hongkong and Shanghai Banking Corporation Limited which all of it is guaranteed by
PT Ungaran Sari Garments related party according to Guarantee and Indemnity Agreement Limited Amount dated June 20, 2011.
Based on Agreement above, The Hongkong and Shanghai Banking Corporation Limited give credit facility to the entity with a limit of US 5,000.
Based on Credit Facility Agreement No JAK110288U101216 of The Hongkong and Shanghai Banking Corporation Limited, PT Citra Abadi Sejati and PT Ungaran Sari Garments requesting to temporarily allocate the Combined Limit facility with a limit of
US 3,500 to Entity. The use of this facility by the Entity is also guaranteed by the Guarantee and Indemnity Agreement mentioned above.
Interest rate of the new credit facility is best lending rate minus 5.
Gillespie International Limited
Based on loan transferred from The Hongkong and Shanghai Banking Corporation Limited with a total value of US 27,876, Gillespie International Limited made a Major Debt Restructuring Agreement with the Entity that signed on November 24, 2011.
In Major Debt Restructuring Agreement, Entity obtain facilities as follows: • Gillespie International Limited forgives loan amounted to US 9,876.
• Tranche A loan amounted to US 8,000 with interest rate LIBOR+3. Term of this loan is six years and will be due on November 30, 2017.
Collateral for Tranche A Loan are as follows: a. Mortgage over land and building factory at Jl. Soekarno Hatta No 23 Probolinggo, East Java - Indonesia, under land
certificate HGB no 1 Curahgrinting and HGB no 1 Kanigaran for the amount of US 15,000 registered under the name of PT Eratex Djaja Tbk.
b. Fiduciary transfer of ownership over machineries and equipments listed in borrowers fixed asset list as per the Audited Financial Report of the Borrowers as of December 31, 2010 for the amount of US 5,000.
• Tranche B convertible loan amounted to US 3,000, non interest bearing. Term of this loan is one year and will be due on November 20, 2012.
• Tranche C convertible loan amounted to US 7,000, non interest bearing. Term of this loan is five years and will be due on November 20, 2016 Note 19.
Outstanding short term loan of Gillespie International Limited as of December 31, 2011 and 2010 amounted to US 3,000 or equivalent to Rp 27,204,000 and nil.
On December 14, 2011 Gillesspie International Limited made a Sale and Purchase Agreement related to Tranche A loan of the Entity with PT Ungaran Sari Garments Note 20.
No collateral is pledged for Tranche B and Tranche C loans.
PT ERATEX DJAJA Tbk AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
continued
For the years ended December 31, 2011 and 2010 Expressed in thousands of Rupiah and in thousands of United States Dollars, unless otherwise stated
127 126
Laporan Tahunan 2011 Annual Report 2011 PT. ERATEX DJAJA Tbk
PT. ERATEX DJAJA Tbk Laporan Tahunan 2011 Annual Report 2011
PT ERATEX DJAJA Tbk AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
continued
For the years ended December 31, 2011 and 2010 Expressed in thousands of Rupiah and in thousands of United States Dollars, unless otherwise stated
TRADE PAYABLES - THIRD PARTIES continued TRADE PAYABLES - THIRD PARTIES
This account represents payables for the purchase of raw and other materials as follows:
Details of trade payables - third parties based on currency:
15
CONTINUING OPERATION
Winnitex Investment Co Ltd 6,002,531
428,203 662
48 Sierradale Pte Ltd
5,179,813 -
571 -
Far East 3,598,237
- 397
- Lai Tak
1,246,745 -
137 -
YKK Zipper Indonesia 1,146,705
654,691 126
73 Coats Rejo Indonesia
1,088,597 555,573
120 62
China Dyeing 372,415
681,391 41
76 CV. Surya Jaya
160,204 577,711
18 64
Avery Dennisson 20,773
2,336,169 2
260 SML Jakarta
16,678 651,493
2 72
Perfecta HK Ltd -
2,433,373 -
271 Brothers Machine
- 1,006,101
- 112
Duerkopp China -
660,839 -
74 MS Abadi etc
- 579,453
- 64
Surya Sinar Indah -
569,926 -
63 Suntex Co Ltd
- 567,519
- 63
Other suppliers below Rp 500,000 each 5,661,681
17,070,586 624
1,899
Total 24,494,379
28,773,028 2,700
3,200
DISCONTINUING OPERATION
Other suppliers below Rp 500,000 each -
191,793 -
21
Total Note 4 -
191,793 -
21 Dec 31, 2011 Dec 31, 2010
Dec 31, 2011 Dec 31, 2010 Rp
Rp US
US
CONTINUING OPERATION
Post dated cheque 799,360
5,735,179 88
638 Local suppliers
5,813,902 4,810,420
641 535
Foreign suppliers 17,881,117
18,227,429 1,972
2,027
Total trade payables - third parties 24,494,379
28,773,028 2,701
3,200
DISCONTINUING OPERATION
Local suppliers -
191,793 -
21
Total trade payables - third parties Note 4 -
191,793 -
21 Dec 31, 2011 Dec 31, 2010
Dec 31, 2011 Dec 31, 2010 Rp
Rp US
US
15
Detail of trade payable - third parties based on currency are as follows:
No collateral is pledge for trade payables to third parties.
OTHER PAYABLES - THIRD PARTIES
16
17
ACCRUED EXPENSES
CONTINUING OPERATION
Temporary receipts 254,658
17,110 28
2 Dividend
178,694 178,693
20 20
Others -
1,862,450 -
207
Total other payables - third parties 433,352
2,058,253 48
229
DISCONTINUING OPERATION
Others -
13,636 -
2
Total other payables - third parties Note 4 -
13,636 -
2 Dec 31, 2011 Dec 31, 2010 Dec 31, 2011 Dec 31, 2010
Rp Rp
US US
CONTINUING OPERATION
Rupiah 3,258,215
6,313,426 359
702 Foreign currencies
21,236,164 22,459,602
2,342 2,498
Total 24,494,379
28,773,028 2,701
3,200
DISCONTINUING OPERATION
Rupiah -
191,793 -
21
Total Note 4 -
191,793 -
21 Dec 31, 2011 Dec 31, 2010 Dec 31, 2011 Dec 31, 2010
Rp Rp
US US
CONTINUING OPERATION
Wages and allowances 4,067,121
2,122,163 449
236 Interest expenses
874,810 12,343,042
96 1,373
Processing charges 162,835
775,581 18
86 Sales commission
174,762 163,804
19 18
Others 1,156,494
1,559,512 128
173
Total accrued expenses 6,436,022
16,964,102 710
1,887 Dec 31, 2011 Dec 31, 2010 Dec 31, 2011 Dec 31, 2010
Rp Rp
US US
PT ERATEX DJAJA Tbk AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
continued
For the years ended December 31, 2011 and 2010 Expressed in thousands of Rupiah and in thousands of United States Dollars, unless otherwise stated
129 128
Laporan Tahunan 2011 Annual Report 2011 PT. ERATEX DJAJA Tbk
PT. ERATEX DJAJA Tbk Laporan Tahunan 2011 Annual Report 2011
PT ERATEX DJAJA Tbk AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
continued
For the years ended December 31, 2011 and 2010 Expressed in thousands of Rupiah and in thousands of United States Dollars, unless otherwise stated
This account consists of:
This account consists of:
CONSUMER FINANCE PAYABLE
LONG-TERM LOANS
18
Total financing 205,590
19,316 23
2 Less : interest expenses
29,587 3,253
3
Current financing value 176,003
16,063 19
2
Current maturities portion 64,001
16,063 7
2 Total long-term portion, net
112,002 -
12 -
The Entity obtained loans from PT Astra Sedaya Finance to purchase vehicle amounted of Rp 205,590 with interest rates 5.6 per annum. This financing will be due in September 2014.
Dec 31, 2011 Dec 31, 2010 Dec 31, 2011 Dec 31, 2010 Rp
Rp US
US
19
Gillespie International Limited Carrying amount US 7,000
63,476,000 -
7,000 -
Less: unamortised discount expense US 962 8,721,961
- 962
-
Fair value US 6,038 54,754,039
- 6,038
-
The Hongkong and Shanghai Banking Corp Ltd -
113,950,909 -
12,674
Total loans 54,754,039
113,950,909 6,038
12,674 Dec 31, 2011 Dec 31, 2010 Dec 31, 2011 Dec 31, 2010
Rp Rp
US US
The Hong Kong and Shanghai Banking Corporation Limited
The Entity entered into a credit agreement with The Hongkong and Shanghai Banking Corporation Limited, Jakarta Branch. In 2006, the Entity entered into a new agreement with The Hongkong and Shanghai Banking Corporation Limited, Jakarta
Branch HSBC to reschedule the repayment of Club Deal Loan to HSBC and to include PT Eratex Garment, Subsidiary as a new borrower. On June 25, 2010 the Entity obtained approval for credit facility restructuring from HSBC and it has been extended
with Amendment to Corporate Facility Agreement No: JAK110197U110223 with total amount to US 12,027.
The entire loan has been transferred to Gillespie International Limited on November 12, 2011. Outstanding balance HSBC as of December 31, 2011 and 2010 amounted to nil and US 12, 673 or equivalent to Rp 113, 950,
909, respectively.
Gillespie International Limited
In Gillespie International Limited Agreement, the Entity obtain long term loan Tranche C amounted to US 7,000 which will due in November 20, 2016.
Based on payment schedule, Tranche C loan payment will be starting on November 20, 2014 amounted to US 1,000, so theres no current maturity portion of long term loan and non interest bearing loan. The next four payment will be paid on semi annual
basis amounted to US 1,500, respectively. Outstanding long term loan of Gillespie International Limited as of December 31, 2011 and 2010 amounted to US 6,038 or
amounted to Rp 54,754,038 after less by unamortized discount expense and nil. Assumption of discount rate is LIBOR +3 which is based on interest rate on a similar loan Tranche A Loan taken over by PT.
Ungaran Sari Garments. No collateral is pledged for Tranche C loan.
20
PAYABLES TO RELATED PARTIES
SHORT TERM LOAN: PT Buana Indah Garments
6,347,600 -
700 -
Sub total 6,347,600
- 700
- LONG TERM LOAN:
PT Ungaran Sari Garments 72,544,000
- 8,000
- PT Buana Indah Garments
1,800,000 -
199 -
Eastern Cotton Mills Ltd -
8,991,000 -
1,000 Genaire Enterprises Inc
- 16,331,530
- 1,816
Director -
1,785,949 -
199
Sub total 74,344,000
27,108,479 8,199
3,015 Total loan
80,691,600 27,108,479
8,899 3,015
On 2010, the entity has a loan from the shareholders, which are Eastern Cotton Mills Ltd and Genaire Enterprise Inc. which total to US 1,000 and US 1,816 each.
Dec 31, 2011 Dec 31, 2010 Dec 31, 2011 Dec 31, 2010 Rp
Rp US
US
PT ERATEX DJAJA Tbk AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
continued
For the years ended December 31, 2011 and 2010 Expressed in thousands of Rupiah and in thousands of United States Dollars, unless otherwise stated
131 130
Laporan Tahunan 2011 Annual Report 2011 PT. ERATEX DJAJA Tbk
PT. ERATEX DJAJA Tbk Laporan Tahunan 2011 Annual Report 2011
PT ERATEX DJAJA Tbk AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
continued
For the years ended December 31, 2011 and 2010 Expressed in thousands of Rupiah and in thousands of United States Dollars, unless otherwise stated
Eastern Cotton Mills Ltd dan Genaire Enterprises Inc transferred their loan to Radmet Concept Investment Limited based on Sale and Purchase and Assignment Agreement dated June 15, 2011.
The loan that transferred to Radmet Concept Investment Limited consist of: • Eastern Cotton Mills Ltd loan amounted to US 1,000
• Genaire Enterprises Inc loan amounted to US 1,816 Based on Deed no 107 dated Agust 23, 2011 the general meeting of entity’s shareholders approved loan conversion of Radmet
Concept Investment Limited amounted to US 2,816 or equivalent to Rp 24,083,237 to share capital Note 24.
PT Ungaran Sari Garments
On December 14, 2011, PT Ungaran Sari Garments took over Entity’s Tranche A loan from Gillespie International Limited. Upon the loan transferred, Entity signed Credit Facility Agreement with PT Ungaran Sari Garments dated December 27, 2011. In the
Agreement, the Entity obtained loan amounted to US 8,000 with interest rate LIBOR+3. Term of this loan is six years and will be due on November 30, 2017.
Based on payment schedule, installment will be paid each year and payment start on November 30, 2013 amounted to US 1,600.
Collateral for this loan are as follows: • Mortgage over land and building factory at Jl. Soekarno Hatta No 23 Probolinggo, East Java - Indonesia, under land
certificate HGB no 1 Curahgrinting and HGB no 1 Kanigaran for the amount of US 15,000 registered under the name of PT Eratex Djaja Tbk.
Outstanding of PT Ungaran Sari Garments long term loan as of December 31, 2011 and 2010 amounted to US 8,000 or equivalent to Rp 72,544,000 and nil, respectively.
PT Buana Indah Garments
Short term loan: The Entity obtained loan at December 21, 2011 from PT Buana Indah Garments amounted to US 700 with interest rate
4.5. Term of this loan will be due in February 20, 2012. Outstanding short term loan of PT Buana Indah Garments as of December 31, 2011 and 2010 amounted to US 700 or
equivalent to Rp 6,347,600 and nil, respectively.
TAXATION continued PAYABLES TO RELATED PARTIES continued
20 21
c. CORPORATE INCOME TAX