TAXATION continued
21
d. DEFERRED TAX ASSETS LIABILITIES
CONTINUING OPERATION
DEFERRED TAX ASSETS - THE ENTITY:
Employee benefit liabilities 2,723,314
2,688,838 300
299 Provision for declining in value of receivables
103,952 83,850
11 9
Provision for investment 69,375
69,375 8
8 Provision for declining in value of inventories
981,878 1,122,827
108 125
Total deferred tax assets 3,878,519
3,964,890 428
441 DEFERRED TAX LIABILITIES - THE ENTITY:
Fixed assets 1,196,393
1,158,860 132
129 Intangible assets
275,103 302,812
30 34
Financial liability which measure a fair value 2,180,490
- 240
-
Net deferred tax assets 226,533
2,503,218 25
278
DISCONTINUING OPERATION
Total deferred tax assets, net Note 4 103,668
104,011 11
12
Dec 31, 2011 Dec 31, 2010 Dec 31, 2011 Dec 31, 2010 Rp
Rp US
US
e. TAXES RECEIVABLE
The balances of taxes receivable as of December 31, 2011 and 2010 are as follows:
Overpayment of corporate income tax year 2009
- 338,283
- 38
year
2011
163,091 -
18 -
Total Entity taxes receivable 163,091
338,283 18
38 Total taxes receivable, Subsidiary
- 79,896
- 9
Total consolidated taxes receivable 163,091
418,179 18
47 f. TAX ASSESSMENTS
In 2011, the Entity received Underpayment Tax Assessment SKPKB on value added tax, income tax article 21 and income tax article 23 with overall amounted to Rp 185,755. Otherwise, the Entity also received Overpayment Tax Assessment
SKPLB for income tax dated June 16, 2011 and stated overpayment for the year 2009 amounted to Rp 338,283. For the SKPLB, the Entity applied for overbooking SKPKB above and the rest amounted to Rp 152,527 has received by Entity on
August 5, 2011.
In 2010, PT Asiatex Garmindo, Subsidiary received several tax assessments, including Underpayment Tax Assessment SKPKB dated August 29, 2010 for the year 2007 on value added tax amounted to Rp 16,593; Underpayment Tax
Assessment SKPKB dated August 29, 2010 for the year 2007 on Income Tax article 23 amounted to Rp 545,855; as well as Underpayment Tax Assessment SKPKB dated August 29, 2010 for the year 2007 on Income Tax article 26 amounted to Rp
205,336.
In 2011, PT Asiatex Garmindo, Subsidiary received several tax assessment, including Underpayment Tax Assessment SKPKB on income tax article 23 dated March 16, 2011 and stated underpayment on income tax article 23 for the year 2009
amounted to Rp 75,140 and Underpayment Tax Assessment SKPKB on value added tax dated March 16, 2011 and stated underpayment for the year 2009 amounted to Rp 549,377.
Dec 31, 2011 Dec 31, 2010 Dec 31, 2011 Dec 31, 2010 Rp
Rp US
US
EMPLOYEE BENEFIT LIABILITIES
The Entity provide benefits for their employees who achieve the retirement age at 55 based on the provisions of Labor Law No. 132003 dated March 25, 2003 with Projected Unit Credit Method. The benefits are unfunded.
The following tables summarize the components of net employee benefits expense recognized in the consolidated statements of income and amounts recognized in the consolidated statements of financial position for the employee benefit
liability as determined by an independent actuary, PT Bumi Dharma Aktuaria, in their reports dated January 13, 2012.
a. NET EMPLOYEE BENEFITS EXPENSE
Current service cost 1,106,215
958,198 126
106 Interest cost
920,699 895,826
105 100
Actuarial gain losses 779,843
615,153 89
68
Net employee benefits expense 1,247,071
1,238,871 142
138 Dec 31, 2011 Dec 31, 2010 Dec 31, 2011 Dec 31, 2010
Rp Rp
US US
22
NON-CONTROLLING INTERESTS
b. EMPLOYEE BENEFIT LIABILITIES
Present value of employee benefits obligation-vested
14,152,048 11,863,805
1,561 1,320
Unrecognized actuarial gain loss 3,258,790
1,108,455 360
124
Total employee benefit liabilities 10,893,257
10,755,350 1,201
1,196 Dec 31, 2011 Dec 31, 2010 Dec 31, 2011 Dec 31, 2010
Rp Rp
US US
Movement of provision for employee benefit liabilities during the years ended December 31, 2011 and 2010 are as follows:
Balance at beginning of the year 10,755,350
10,194,583 1,186
1,134 Add: Net employee benefits expense during the year
1,247,071 1,238,871
138 138
Less: Utilization during the year 1,109,163
678,104 123
76
Balance at end of the year 10,893,257
10,755,350 1,201
1,196
The principal assumptions used in determining the employee benefit liabilities are as follows: Normal retirement age
55 55
Rate of interest per annum 7
9.5 Salary increases per annum
5 8
Mortality table TMI-2000
TMI-2000
Dec 31, 2011 Dec 31, 2010
Dec 31, 2011 Dec 31, 2010
Rp Rp
US US
2011 2010
23
The account represents non-controlling interest due to investment in Subsidiaries, which is PT Asiatex Garmindo and PT Eratex Garment are as follows:
Share capital 3,222,260
3,222,260 355
358 Accumulated losses
3,013,418 3,222,260
332 358
Total non-controlling interest in Subsidiaries net assets
208,842 -
23 -
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
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
135 134
Laporan Tahunan 2011 Annual Report 2011 PT. ERATEX DJAJA Tbk
PT. ERATEX DJAJA Tbk Laporan Tahunan 2011 Annual Report 2011
SHARE CAPITAL
Based on notarial deed No. 79 dated June 15, 2004 prepared by Sutjipto, S.H., Public Notary in Jakarta, the Entitys authorized capital was increased to Rp 196,472,000 consisting of 392,944,000 shares with nominal value of Rp 500 full Rupiah amount
per shares. Based in notarial deed No. 107 dated Agust 23, 2011 prepared by Sutjipto, S.H.,M.Kn., Public Notary in Jakarta, General
Meeting of Shareholders to convert Entitys loan to Radmet Concept Investment Limited amounted to US 2,816 or equivalent to Rp 24,038,237 into share capital. For the changes, issued and fully paid-up shares has been increased to Rp 73,156,237
consist of 146,312,474 shares with nominal value of Rp 500 full Rupiah amount per shares. In 2010, issued and fully paid-up shares amounted to Rp 49,118,000 consist of 98,236,000 shares with nominal value of Rp 500 full Rupiah amount per shares.
24
ADDITIONAL PAID-IN CAPITAL, NET
Additional paid-in capital consists of premium on share capital which was received over the nominal value from sale of shares to the public, net of the amount transferred to share capital in 1994 of Rp 24,559,000.
REVENUE
Akun ini terdiri dari: The composition of the Entitys shareholders as of December 31, 2011 are as follows:
Radmet Concept Investment Limited 48,076,474
32.86 24,038,237
2,651 PT Buana Indah Garments
31,012,000 21.20
15,506,000 1,710
South Indonesian Holdings Ltd 22,103,100
15.11 11,051,550
1,219 PT Wakala Korpora Indonesia
10,500,000 7.18
5,250,000 579
Public holders 34,620,900
23.66 17,310,450
1,909
Total 146,312,474
100.00 73,156,237
8,068
The composition of the Entitys shareholders as of December 31, 2010 are as follows:
Eastern Cotton Mills Ltd 24,559,000
25.00 12,279,500
1,366 South Indonesian Holdings Ltd
22,103,100 22.50
11,051,550 1,229
PT Wakala Korpora Indonesia 10,500,000
10.69 5,245,800
583 Public holders
41,073,900 41.81
20,541,150 2,285
Total 98,236,000
100.00 49,118,000
5,463 Number of
Issued and Issued and
shares issued Percentage
paid-up capital paid-up capital
Shareholders and paid
of ownership amount Rp
amount US
Number of Issued and
Issued and shares issued
Percentage paid-up capital
paid-up capital Shareholders
and paid of ownership
amount Rp amount US
Third parties: Export
250,386,027 229,559,554
28,541 25,532
Local 8,984,927
3,550,706 1,024
395
Total revenue 259,370,954
233,110,260 29,565
25,927
In 2011, sales transaction that exceeded 10 of the total net sales amounted to Rp 107,167,867 was made to Ann Taylor, amounted to Rp 40,088,084 was made to Polo Ralph Laurent and amounted to Rp 26,459,856 was made to VF Europe. In 2010,
sales transaction that more than 10 from the total net sales amounted to Rp 68,291,509 was made to Ann Taylor, Rp 59,761,540 was made to Esprit Europe and Rp 34,386,029 was made to Philips Van Heusen.
Dec 31, 2011 Dec 31, 2010 Dec 31, 2011 Dec 31, 2010 Rp
Rp US
US
25
26
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
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
COST OF REVENUE
27
Raw materials used 157,930,340
141,509,321 18,002
15,739 Direct labor
56,881,223 68,564,888
6,484 7,627
Manufacturing expenses Note 28 33,307,044
30,587,912 3,797
3,402 Goods in process inventory:
At beginning of the year 5,401,156
4,561,261 616
507 At end of the year
15,746,340 5,401,156
1,795 601
Cost of goods manufactured 237,773,423
239,822,226 27,103
26,674
Finished goods inventory: At beginning of the year
10,756,124 17,335,436
1,206 1,928
At end of the year 21,724,580
10,756,124 2,476
1,196 Provision for declining in value
- 56,906
- 6
Others -
104,810 -
12
Total cost of revenue 226,804,967
246,353,633 25,853
27,400
In 2011 and 2010, the Entity do not have any purchase transactions that exceeded 10 of the total net purchase.
Dec 31, 2011 Dec 31, 2010 Dec 31, 2011 Dec 31, 2010
Rp Rp
US US
MANUFACTURING EXPENSES
28
Salary 5,867,345
5,826,075 669
648 Water and electricity
4,685,576 5,073,052
534 564
Handling charges 4,039,536
3,616,960 460
402 Power and coal
3,259,849 3,151,370
372 351
Depreciation and amortization 2,599,972
2,544,683 296
283 Repair and maintenance
2,040,618 1,531,871
233 170
Transportation 1,502,398
1,792,113 171
199 Processing charges
1,371,495 52,642
156 6
Machine parts 577,080
659,426 66
73 Factory supplies
863,678 1,044,096
98 116
Others 6,499,498
5,295,624 741
590
Total manufacturing expenses 33,307,044
30,587,912 3,797
3,402 Dec 31, 2011 Dec 31, 2010 Dec 31, 2011 Dec 31, 2010
Rp Rp
US US
SELLING EXPENSES
29 29
Freight 7,003,443
3,176,480 798
353 Handling charges
3,943,544 4,260,100
450 474
Transportation 1,098,685
1,070,270 125
119 Bank charges
681,950 1,231,558
78 137
Others 638,189
436,006 73
48
Total selling expenses 13,365,811
10,174,414 1,524
1,131 2011
2010 2011
2010 Rp
Rp US
US
137 136
Laporan Tahunan 2011 Annual Report 2011 PT. ERATEX DJAJA Tbk
PT. ERATEX DJAJA Tbk Laporan Tahunan 2011 Annual Report 2011
BALANCE AND TRANSACTIONS WITH RELATED PARTIES GENERAL AND ADMINISTRATION EXPENSES
30
CONTINUING OPERATION
Salaries and wages 10,578,385
11,297,881 1,206
1,257 Professional fees
2,409,500 3,454,694
275 384
Employee benefit 1,247,071
1,238,871 142
138 Communication
618,716 754,308
71 84
Depreciation and amortization 546,033
671,529 62
75 Rental
469,668 429,623
54 48
Travel 369,970
523,715 42
58 Insurance
320,985 465,349
37 52
Bank charges 266,402
326,111 30
36 Others
3,465,515 4,939,462
395 549
Total general and administration expenses 20,292,245
24,101,543 2,313
2,681
DISCONTINUING OPERATION
Amortizations -
1,133 -
Others -
25,268 -
3
Total general and administration expenses Note 4 -
26,401 -
3 Dec 31, 2011 Dec 31, 2010 Dec 31, 2011 Dec 31, 2010
Rp Rp
US US
31
The Entity, in the ordinary course of business, has various trade transactions with related parties including sales and purchases, which are conducted in the normal course of business and on normal terms and conditions. The nature of the relationship with
the related parties is generally that of Entities under common control and associated Entities. The nature of relationships with related parties were as follows:
Transactions with related parties used pricing policies and terms of the transaction as agreed by the parties. Material related party balances are as follows:
Short term loan:
PT Buana Indah Garments 6,347,600
- 700
-
Long term loan:
PT Ungaran Sari Garments 72,544,000
- 8,000
- PT Buana Indah Garments
1,800,000 -
199 -
Total 80,691,600
- 8,899
- Percentage of total liabilities
29.93
For the year ended December 31, 2011 and 2010, there were no sales and purchase transaction to related parties.
Dec 31, 2011 Dec 31, 2010
Dec 31, 2011 Dec 31, 2010 Rp
Rp US
US
PT Buana Indah Garments PT Ungaran Sari Garments
Shareholders and the same key management personnel as the Entity The same key management personnel as the Entity
Related Parties Relationships
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
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
ASSETS AND LIABILITIES IN FOREIGN CURRENCIES
32
As of December 31, 2011, the Entity and its Subsidiaries had monetary assets and liabilities in foreign currencies as follows:
CONTINUING OPERATION
ASSETS:
Cash and cash equivalents US
2 19,504
EURO 2,403
HKD 251
293,209 Trade receivables - third parties
US 4,688
42,513,645 SGD
10 69,545
Other receivables - third parties US
77 700,220
Advance payments US
329 2,983,429
EURO 3,275
Prepaid expenses US
28 250,321
HKD 4
4,823 Guarantee deposits
HKD 38
44,587
Total assets 46,884,964
Foreign currencies in thousand
Rupiah
LIABILITIES:
Short-term loans US
9,880 89,587,824
Trade payables - third parties US
2,323 21,066,889
EURO 272
HKD 145
169,003 Other payables
US 28
254,658 Accrued expenses
US 174
1,577,245 Long-term loans
US 6,038
54,754,039 Payable from related parties
US 8,700
78,891,600
Total liabilities 246,301,530
Liabilities over assets, net 199,416,566
As of December 31, 2010, the Entity and its Subsidiaries had monetary assets and liabilities in foreign currencies as follows:
CONTINUING OPERATION
ASSETS:
Cash and cash equivalents US
54 489,102
EURO 9
105,239 HKD
51 59,142
Trade receivables - third parties US
1,634 14,688,917
EURO 187
2,238,935 SGD
30 212,451
Other receivables - third parties US
62 557,434
EURO 984
Advance payments US
33 298,666
EURO 693
Tax receivables HKD
4 5,026
Prepaid expenses US
28 249,338
Guarantee deposits HKD
34 39,516
Total assets 18,945,443
Foreign currencies in thousand
Rupiah
139 138
Laporan Tahunan 2011 Annual Report 2011 PT. ERATEX DJAJA Tbk
PT. ERATEX DJAJA Tbk Laporan Tahunan 2011 Annual Report 2011
ASSETS AND LIABILITIES IN FOREIGN CURRENCIES continued
32
CONTINUING OPERATION
LIABILITIES:
Short-term bank borrowings US
12,981 116,712,796
EURO 206
2,466,195 HKD
390 450,709
Trade payables - third parties US
2,290 20,591,246
EURO 1
14,611 HKD
1,604 1,853,744
Other payables US
99 889,363
Accrued expenses US
74 663,870
HKD 29
33,407 Payable from related parties
US 2,816
25,322,530 Long-term loans
US 12,674
113,950,909
Total liabilities 282,949,380
Liabilities over assets, net 264,003,937
Foreign currencies in thousand
Rupiah
INFORMATION ON THE BUSINESS SEGMENT
Field of operations:
PT Eratex Djaja Tbk as the Parent Entity, operates in the integrated garment manufacturing, including garment making and other garment processing.
PT Asiatex Garmindo and PT Eratex Garment are the Subsidiaries which has no activities during 2011 and 2010. PT Eratex Hongkong Ltd, as a Subsidiary which operating in general trading.
ASA Partners Holdings Ltd, as a Subsidiary which has stated dissolved at December 14, 2011 Note 1.c.
33
REVENUE - INFORMATION BASED ON ENTITY: CONTINUING OPERATION
PT Eratex Djaja Tbk 248,851,168
226,499,577 28,366
25,192 PT Eratex Hongkong Ltd
10,519,786 6,610,683
1,199 735
Total 259,370,954
233,110,260 29,565
25,927
Elimination -
- -
-
Total 259,370,954
233,110,260 29,565
25,927
DISCONTINUING OPERATION
PT Eratex Djaja Tbk -
- -
-
Total -
- -
- 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
141 140
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
INFORMATION ON THE BUSINESS SEGMENT continued
33
REVENUE - INFORMATION BASED ON GEOGRAPHICAL TERRITORY:
CONTINUING OPERATION
Export 250,386,027
229,559,554 28,541
25,532 Local
8,984,927 3,550,706
1,024 395
Total 259,370,954
233,110,260 29,565
25,927
Elimination -
- -
-
Total 259,370,954
233,110,260 29,565
25,927
DISCONTINUING OPERATION
Local -
- -
-
Total -
- -
-
REVENUE - INFORMATION BASED ON PRODUCTS:
CONTINUING OPERATION
Garments 248,851,168
226,499,577 28,366
25,192 Others
10,519,786 6,610,683
1,199 735
Total 259,370,954
233,110,260 29,565
25,927
Elimination -
- -
-
Total 259,370,954
233,110,260 29,565
25,927
DISCONTINUING OPERATION
Textiles -
- -
-
Total -
- -
- Dec 31, 2011
Dec 31, 2010 Dec 31, 2011 Dec 31, 2010 Rp
Rp US
US
OPERATING INCOME LOSS - INFORMATION BASED ON ENTITY:
CONTINUING OPERATION
PT Eratex Djaja Tbk 5,955,329
48,191,715 697
5,360 PT Asiatex Garmindo
686,452 884,684
79 98
PT Eratex Hongkong Ltd 5,786,040
1,793,397 660
199
Total 855,741
47,283,002 98
5,259
Elimination 236,328
236,328 27
26
Total 1,092,068
47,519,330 125
5,285
DISCONTINUING OPERATION
PT Eratex Djaja Tbk -
26,401 -
3
Total -
26,401 -
3
INFORMATION ON THE BUSINESS SEGMENT continued
33
OPERATING INCOME LOSS - INFORMATION BASED ON PRODUCTS:
CONTINUING OPERATION
Garments 6,641,781
49,076,399 758
5,458 Others
5,786,040 1,793,397
660 199
Total 844,741
47,283,002 98
5,259
Elimination 236,328
236,328 27
26
Total 1,092,068
47,519,330 125
5,285
DISCONTINUING OPERATION
Textiles -
26,401 -
3
Total -
26,401 -
3
NET INCOME LOSS - INFORMATION BASED ON ENTITY:
CONTINUING OPERATION
PT Eratex Djaja Tbk 85,709,004
82,905,949 9,770
9,221 PT Asiatex Garmindo
623,591 34,293,167
71 3,814
PT Eratex Hongkong Ltd 811,003
590,812 92
66 PT Eratex Garment
7,511 39,898
1 4
Total 85,903,927 48,061,868
9,792 5,346
Elimination 1,298,888
227,068 150
25
Total 84,605,139 48,288,936
9,642 5,371
DISCONTINUING OPERATION
PT Eratex Djaja Tbk 18,731
211,869 2
24
Total 18,731
211,869 2
24
NET INCOME LOSS - INFORMATION BASED ON PRODUCTS:
CONTINUING OPERATION
Garments 85,085,413
48,612,782 9,699
5,407 Others
818,514 550,914
93 61
Total 85,903,927 48,061,868
9,792 5,346
Elimination 1,298,888
227,068 150
25
Total 84,605,039 48,288,936
9,642 5,371
DISCONTINUING OPERATION
Textiles 18,731
211,869 2
24
Total 18,731
211,869 2
24 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
143 142
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
MANAGEMENT RISK
The main financial risk encountered by the Entity are interest rate risk, liquidity risk, currency risk, and interest rate risk. The Entity try to minimize the potential negatif impact of the risks by using risk management.
a. Interest rate risk