NET EMPLOYEE BENEFITS EXPENSE EMPLOYEE BENEFIT LIABILITIES

154 Laporan Tahunan 2012 • Annual Report 2012 • PT. ERATEX DJAJA Tbk 155 Laporan Tahunan 2012 • Annual Report 2012 • PT. ERATEX DJAJA Tbk TAXATION continued 21

d. DEFERRED TAX ASSETS LIABILITIES

CONTINUING OPERATION DEFERRED TAX ASSETS - THE ENTITY: Employee benefit liabilities 2,919,422 2,723,314 2,723,314 302 300 Allowance for loss of impairment value of receivables 129,745 103,952 103,952 13 11 Allowance for loss of impairment value of investment 69,375 69,375 69,375 7 8 Allowance for loss of impairment value of inventories 1,543,850 981,878 981,878 160 108 Total deferred tax assets 4,662,392 3,878,519 3,878,519 482 427 DEFERRED TAX LIABILITIES - THE ENTITY: Fixed assets - 1,196,393 1,196,393 - 132 Intangible assets 245,315 275,103 275,103 25 30 Financial liability which measure a fair value 1,662,562 2,180,490 2,180,490 172 240 Net deferred tax assets 2,754,515 226,533 226,533 285 25 DISCONTINUING OPERATION Total deferred tax assets, net Note 4 192,019 103,668 103,668 20 11 Dec 31, 2012 Dec 31, 2011 Dec 31, 2011 Dec 31, 2012 Dec 31, 2011 Rp Rp Rp US US After quasi Before quasi After quasi

e. TAXES RECEIVABLE

The balances of taxes receivable as of December 31, 2012 and 2011 are as follows: year 2011 163,091 163,091 163,091 17 18 year 2012 111,155 - - 11 - Total Entity taxes receivable 274,246 163,091 163,091 28 18

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 amount of 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 amounting to Rp 338,283. For the SKPLB, the Entity applied for overbooking SKPKB above and the rest amount Rp 152,527 has been received by Entity on August 5, 2011. Dec 31, 2012 Dec 31, 2011 Dec 31, 2011 Dec 31, 2012 Dec 31, 2011 Rp Rp Rp US US After quasi Before quasi After quasi Overpayment of corporate income tax EMPLOYEE BENEFIT LIABILITIES The Entity provides benefits for its employees who achieve the retirement age of 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 table summarizes the components of net employee benefits expense recognized in the consolidated statements of income and amount for the employee benefit liability recognized in the consolidated statements of financial position as determined by an independent actuary, PT Bumi Dharma Aktuaria, in their reports dated January 13, 2013.

a. NET EMPLOYEE BENEFITS EXPENSE

Current service cost 1,856,044 1,106,215 1,106,215 197 126 Interest cost 947,199 920,699 920,699 100 105 Actuarial gain losses 1,264,545 779,843 779,843 134 89 Exchange difference due to translation of financial statements 2,755 914 914 Net employee benefits expense 1,535,943 1,247,985 1,247,985 163 142 Dec 31, 2012 Dec 31, 2011 Dec 31, 2011 Dec 31, 2012 Dec 31, 2011 Rp Rp Rp US US After quasi Before quasi After quasi 22 PT ERATEX DJAJA Tbk AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued For the years ended December 31, 2012 and 2011 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, 2012 and 2011 Expressed in thousands of Rupiah and in thousands of United States Dollars, unless otherwise stated

b. EMPLOYEE BENEFIT LIABILITIES

Present value of employee benefits obligation-vested 20,725,471 14,152,047 14,152,047 2,143 1,561 Unrecognized actuarial gain loss 9,047,783 3,258,790 3,258,790 935 360 Total employee benefit liabilities 11,677,688 10,893,257 10,893,257 1,208 1,201 Dec 31, 2012 Dec 31, 2011 Dec 31, 2011 Dec 31, 2012 Dec 31, 2011 Rp Rp Rp US US After quasi Before quasi After quasi Movement of provision for employee benefit liabilities during the years ended December 31, 2012 and 2011 are as follows: Balance at beginning of the year 10,893,257 10,755,350 10,755,350 1,201 1,186 Add: Net employee benefits expense during the year 1,535,943 1,247,985 1,247,985 163 142 Less: Utilization during the year 754,266 1,109,163 1,109,163 78 122 Exchange difference due to translation of financial statements 2,754 915 915 78 5 Balance at end of the year 11,677,688 10,893,257 10,893,257 1,208 1,201 The principal assumptions used in determining the employee benefit liabilities are as follows: Normal retirement age 55 55 55 Rate of interest per annum 5 7 7 Salary increases per annum 5 8 8 Mortality table TMI-2000 TMI-2000 TMI-2000 Dec 31, 2012 Dec 31, 2011 Dec 31, 2011 Dec 31, 2012 Dec 31, 2011 Rp Rp Rp US US After quasi Before quasi After quasi 2012 2011 2011 After quasi Before quasi 156 Laporan Tahunan 2012 • Annual Report 2012 • PT. ERATEX DJAJA Tbk 157 Laporan Tahunan 2012 • Annual Report 2012 • PT. ERATEX DJAJA Tbk NON-CONTROLLING INTERESTS SHARE CAPITAL Based on notarial deed No. 79 dated June 15, 2004 prepared by Aulia Taufani, S.H. formerly substitute of 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 on notarial deed No. 107 dated August 23, 2011 prepared by Sutjipto, S.H.,M.Kn., Public Notary in Jakarta, General Meeting of Shareholders agreed to convert Entitys loan to Radmet Concept Investment Limited amounted to US 2,816 or equivalent to Rp 24,038,237 into share capital. Accordingly the issued and fully paid-up share capital has been increased to Rp 73,156,237 consisting of 146,312,474 shares with nominal value of Rp 500 full Rupiah amount per shares. In 2010, issued and fully paid-up share capital was Rp 49,118,000 consisting of 98,236,000 shares with nominal value of Rp 500 full Rupiah amount per shares. 23 The account represents non-controlling interest in Subsidiaries namely PT Asiatex Garmindo and PT Eratex Garment as follows: Share capital 3,222,260 3,222,260 3,222,260 333 355 Accumulated losses 2,999,631 3,010,664 3,013,418 310 332 Total non-controlling interest in Subsidiaries net assets 222,629 211,596 208,842 23 23 Dec 31, 2012 Dec 31, 2011 Dec 31, 2011 Dec 31, 2012 Dec 31, 2011 Rp Rp Rp US US After quasi Before quasi After quasi 24 The composition of the Entitys shareholders as of December 31, 2012 are as follows: PT Buana Indah Garments 53,115,100 36.30 26,557,550 2,929 Radmet Concept Investment Limited 48,076,474 32.86 24,038,237 2,651 UOB Kay Hian Pte Ltd 13,475,000 9.21 6,737,500 743 PT Wakala Korpora Indonesia 10,500,000 7.18 5,250,000 579 Public holders 21,145,900 14.45 10,572,950 1,166 Total 146,312,474 100.00 73,156,237 8,068 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 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 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 in 1994, net of the amount transferred to share capital amounting to Rp 24,559,000. 25 PT ERATEX DJAJA Tbk AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued For the years ended December 31, 2012 and 2011 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, 2012 and 2011 Expressed in thousands of Rupiah and in thousands of United States Dollars, unless otherwise stated REVENUE Third parties: Export 462,175,896 248,595,816 49,069 28,336 Local 5,361,242 8,920,687 569 1,017 Total revenue 467,537,138 257,516,503 49,638 29,353 In 2012, sales transaction exceeding 10 of the total net sales were Rp 166,417,468 to VF Europe, Rp 128,662,490 to Ann Taylor and Rp 73,501,710 to Polo Ralph Laurent. In 2011, sales transaction exceeding 10 of the total net sales were Rp 107,167,867 to Ann Taylor, Rp 40,088,084 to Polo Ralph Laurent and Rp 26,459,856 to VF Europe. Dec 31, 2012 Dec 31, 2011 Dec 31, 2012 Dec 31, 2011 Rp Rp US US 26 COST OF REVENUE 27 Raw materials used 291,896,518 157,092,834 30,990 17,907 Direct labor 118,173,148 56,579,581 12,546 6,449 Manufacturing expenses Note 28 52,242,616 33,130,416 5,547 3,776 Goods in process inventory: At beginning of the year 15,897,256 4,732,664 1,736 526 At end of the year 22,843,119 15,897,256 2,362 1,736 Cost of goods manufactured 455,366,419 235,638,239 48,457 26,922 Finished goods inventory: At beginning of the year 21,971,822 11,223,304 2,396 1,248 At end of the year 34,359,718 21,971,822 3,553 2,396 Allowance for declining in value - - - - Exchange difference due to translation of financial statements 1,086,631 948,824 154 32 Total cost of revenue 444,065,154 225,838,545 47,146 25,742 In 2012, purchase transactions exceeding 10 of the total net purchases were made with Sierradale Pte Ltd for Rp 89,412,815. In 2011, the Entity did not have any purchase transactions exceeding 10 of the total net purchase. Dec 31, 2012 Dec 31, 2011 Dec 31, 2012 Dec 31, 2011 Rp Rp US US MANUFACTURING EXPENSES 28 Salary 8,471,558 5,836,231 899 665 Water and electricity 6,977,649 4,660,728 741 531 Power and coal 5,344,554 3,242,562 567 370 Depreciation and amortization 5,261,869 2,586,184 559 295 Handling charges 5,039,666 4,018,114 535 458 Repair and maintenance 3,797,983 2,029,797 403 231 Processing charges 3,622,890 1,364,221 385 156 Factory supplies 2,807,181 859,098 298 98 Transportation 986,586 1,494,430 105 170 Machine parts 883,739 574,020 94 65 Others 9,048,941 6,465,031 961 737 Total manufacturing expenses 52,242,616 33,130,416 5,547 3,776 Dec 31, 2012 Dec 31, 2011 Dec 31, 2012 Dec 31, 2011 Rp Rp US US 158 Laporan Tahunan 2012 • Annual Report 2012 • PT. ERATEX DJAJA Tbk 159 Laporan Tahunan 2012 • Annual Report 2012 • PT. ERATEX DJAJA Tbk SELLING EXPENSES 29 Freight 4,235,732 6,998,176 450 798 Handling charges 3,572,987 3,940,578 379 449 Transportation 1,779,495 1,097,859 189 125 Bank charges 694,235 681,437 74 78 Others 1,101,413 637,708 117 73 Total selling expenses 11,383,862 13,355,758 1,209 1,523 Dec 31, 2012 Dec 31, 2011 Dec 31, 2012 Dec 31, 2011 Rp Rp US US GENERAL AND ADMINISTRATION EXPENSES 30 CONTINUING OPERATION Salaries and wages 10,963,439 10,586,145 1,164 1,207 Professional fees 2,097,082 2,411,268 223 275 Employee benefit 1,535,943 1,247,985 163 142 Rental 705,440 470,013 75 54 Communication 580,032 619,169 61 71 Travel 529,645 370,241 56 42 Depreciation and amortization 376,779 546,434 40 62 Insurance 309,482 321,221 33 37 Bank charges 255,390 266,598 27 30 Others 2,128,915 3,468,057 226 395 Total general and administration expenses 19,482,147 20,307,131 2,068 2,315 Dec 31, 2012 Dec 31, 2011 Dec 31, 2012 Dec 31, 2011 Rp Rp US US BALANCE AND TRANSACTIONS WITH RELATED PARTIES 31 The Entity, in the ordinary course of business, has made various trade transactions with related parties including sales and purchases, which are conducted in the normal course of business and based 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 is as follows: Transactions with related parties used pricing policies and terms of the transaction as agreed by the parties. 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, 2012 and 2011 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, 2012 and 2011 Expressed in thousands of Rupiah and in thousands of United States Dollars, unless otherwise stated BALANCE AND TRANSACTIONS WITH RELATED PARTIES continued 31 Material related party balances are as follows: Short term loan: PT Ungaran Sari Garments 6,285,500 - - 650 - PT Buana Indah Garments - 6,347,600 6,347,600 - 700 Long term loan: PT Ungaran Sari Garments 77,360,000 72,544,000 72,544,000 8,000 8,000 PT Buana Indah Garments - 1,800,000 1,800,000 - 199 Total 83,645,500 80,691,600 80,691,600 8,650 8,899 Percentage of total liabilities 24.14 29.93 29.93