PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara...

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PT. Texmaco Perkasa Engineering, Tbk Annual Report 2014

Transcript of PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara...

Page 1: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

PT. Texmaco Perkasa Engineering, Tbk

Annual Report 2014

Page 2: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

ANNUAL REPORT 2014

PT. TEXMACO PERKASA ENGINERING, Tbk

Menara Mulia Lt.19 Suite 1901

Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930

Phone : 021 2520656

Fax : 021 5229380

Page 3: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

TABLE OF CONTENTS  

 

Information about the Company 2

Highlights of Financial Performance 3

Message From President Commissioner 4

Message to Share holders 6

Organization Chart 8

Management Report 9

Management Analysis and Discussion 14

Operational Information 17

Independent Auditor Report 22

PT. Texmaco Perkasa Engineering Tbk. – Annual Report 2014 1

Page 4: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Information about the Company

PT. Texmaco Perkasa Engineering Tbk was established based on Notarial Deed by Januar Tirtaamidjaja, S.H. No. 29 dated January 12, 1982, as approved by the Minister of Justice Decree No. C2-6030-HT.01.01Th. 84 dated October 24, 1984 and Published in State Gazette No. 30 dated April 12, 1991.

PT. Texmaco Perkasa Engineering Tbk is one of the Indonesian Company engaged in the Machinery and Services Industry in Engineering. The Company began Commercial Operations in 1984. The Company's Production is marketed locally and abroad.

Company’s Representative Office is in Menara Mulia, 19th Floor, Suite 1901, Jalan Jendral Gatot Subroto Kav. 9-11, Karet Semanggi, Setiabudi, South Jakarta 12930. The Company is domiciled in Karawang, West Java, with Factories located in Kendal, Central Java and Karawang, West Java. The Factory located in Karawang is in Kiara payung Village, Klari District, Karawang Regency, West Java Province. Building and Factory Buildings occupy 231,565 M2 of Land. The Company has a different Production Scope between Factory located in Karawang with Factory located in Kendal. The Factory in Karawang is engaged in Industrial Machinery, namely in the form of Automotive Components, Machinery Equipment, etc. Specialty Machinery & Equipment (SME) in the form of Textile Machines, Boilers etc. While the Factory in Kendal is engaged in Foundry and Industrial Machinery.

Some Products that have been widely known to the People of Indonesia are Perkasa Brand, Perkasa Trucks, Perkasa Buses, Weaving Looms, MPV Cars, Tractors and many other Industrial Products.

The following is the Business development report of PT. Texmaco Perkasa Engineering Tbk for 2014. The term Company is used in the entire report refer to PT. Texmaco Perkasa Engineering Tbk and its Subsidiaries.

PT. Texmaco Perkasa Engineering Tbk. – Annual Report 2014 2

Page 5: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Summary of Important Financial Data

The following table presents an overview of the Company's important financial data taken from the Company's financial statements for the years ended on December 31, 2014 which was Audited by Drs. Heroe, Pramono & PARTNERS .

31 December ( Rp. Million )

2014 2013 2012 2011 2010

Current Asset 90,755 74,130 89,747 56,364 41,870

Net Fixed Asset ( Book Value ) 280,914 283,860 287,404 319,228 48,591

Total Assets 690,378 685,297 1,419,561 1,396,220 1,416,756

Total Liabilities 2,905,763 2,849,665 2,413,085 2,297,126 2,287,096

Total Equity (2,215,384) (2,164,368)

(993,524)

(900,906) (870,340)

Sales Income 81,010 68,804 122,964 77,154 42,148

Gross Profit ( Loss ) 41,378 32,331 39,140

(13,519) 2,058

Operating Profit ( Loss ) (318 ) 5,396 20,025

(23,303)

(6,523)

Net Profit ( Loss ) (52,584) (510,835)

(96,267)

(37,188) 74,583

Net Profit ( Loss ) per share *) (25) (572)

(45)

(15) 36

Net Working Capital (2,539,194) (1,091,418) (851,357)

(832,459) (839,548)

Gross Profit Margin (%) 51,08 46,99 31,83 ( 17,52 ) 4,88

Net Profit Margin (%) (0,39) 7,84 16,29 (30,20) ( 15,48 )

Return on Asset (%) NA NA NA NA NA

Return on Equity (%) NA NA NA NA NA

Current Ratio (X) 0,03 0,06 0,10 0,06 0,05

Debt to Asset Ratio (X) 4,21 4,16 1,70 1,65 1,61

Debt to Equity Ratio (X) ( 1,31) (1,32) (2,43) (2,55) (2,63)

*) In Whole Rupiah 

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Page 6: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

FOREWORD OF PRESIDENT COMMISSIONER

To Shareholders,

On behalf of the Board of Commissioners, allow me on this good opportunity to express my highest appreciation to all members of the Board of Directors for their hard work so far.

The Global Economic Crisis that occurred in recent years had a sustainable impact on Economic growth. The year 2014 was full of challenges for the Indonesian Economy, due to the Economic conditions that still have not shown a significant recovery due to the limited Domestic Consumption along with the Government Budget cut and reduced Investment, making Economic growth slower compared to the previous year.

Indonesia's Economic growth experienced a slowdown and only reached 5 % compared to 2013 which reached 5.6%. The decline in World Oil Price caused a decline in Commodity Prices and caused a reduction in the value of Indonesian Exports. Rupiah weakened, reaching Rp 12,440 per US $ at the end of 2014 and Inflation reached 8.23%.

Amid the unfavorable Economic conditions, the Company's Net Sales increased from Rp 68.804 Billion in 2013 to Rp 81.010 Billion in 2014 or an increase of 18%.

In 2014 operations in our Casting division in Semarang, Central Java experienced an increase compared to the previous year. While our unit in Karawang is still trying to target new Customers and by improving performance because until now it has not been stable due to lack of availability of Working Capital and sufficient resources.

PT. Texmaco Perkasa Engineering Tbk. – Annual Report 2014 4

Page 7: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

It is an effort from Management to focus on the Casting Division in order to receive increased orders from Overseas Customers. Management believes that the Company is well-positioned to participate in and contribute to the Economic Development that continues to improve in this Country, after completing ongoing Restructuring and having an influence on financial issues and other resources.

On behalf of the Board of Commissioners, on this occasion we would also like to express our gratitude and high appreciation to the Board of Directors and Employees who have strived to find solutions for the Company's progress.

Also not to forget, We thank all Shareholders and other Parties for their patience and continuously support the Company's Management. May God Almighty always bestow His grace and provide guidance and success for all efforts in the years to come.

Glenny H Kairupan President Commissioner PT. Texmaco Perkasa Engineering Tbk. – Annual Report 2014 5

Page 8: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

MESSAGE TO SHAREHOLDERS

Dear Shareholders,

It is my honor as President Director of PT Texmaco Perkasa Engineering Tbk which I still lead and manage the Company through hard work and of course thanks to the continuous support of all Parties.

As we know that with the change of Government, it has influenced the Business Climate in Indonesia and this condition has caused the Company's Work Plan and Budget cannot be optimally achieved. Even so, we remain optimistic that the Work Plans and Programs that we have made to increase Company Revenues can still be achieved optimally.

As in the previous year the Company continued to focus on increasing Sales in the Foundry Division which had contributed greatly to the continuity of the Company. The Company will continue to rely on its Operations in the Casting Division in Semarang, which from year to year the volume of Exports increased, so that in 2014 the Company continued to produce Export orders.

Due to various unfavorable conditions our operating unit in Karawang is still trying to find New Customers, the lack of orders for unit in Karawang and the lack of adequate Working Capital facilities, decreasing orders along with the Group's Restructuring Process have become the stumbling block for the Company to realize its plans to grow.

However, the Management of PT. Texmaco Perkasa Engineering Tbk continues to strive to look ahead to be able to resolve the Restructuring problem and Capture Market Opportunities to increase revenue in the future.

Management has made the best effort to keep it operating, so the Company is able to get Working Capital before the Restructuring process is complete.

PT. Texmaco Perkasa Engineering Tbk. – Annual Report 2014 6

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Furthermore, Management continues to make cost savings as much as possible, looking at the Company's Current Operations, some of the less important lines are reduced and the available inventory is gradually reduced.

On this occasion, we also appreciate and thank for the support and Co-operation of Shareholders, Investors, Banks, Customers, Suppliers and all Employees for their contribution and dedication to PT. Texmaco Perkasa Engineering Tbk .

              Ir. Neflizon Abdullah President Director PT. Texmaco Perkasa Engineering Tbk. – Annual Report 2014 7

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Organisation

Mission : Providing the most complete solutions in the field of engineering and high quality engineering products and services with the best technology .

Vision :  To  be   a world‐class  Manufacturing  and  Engineering  Company  operating   in  indonesia            but giving global services  . 

ORGANIZATION CHART

 

                    

                  

PT. Texmaco Perkasa Engineering Tbk. – Annual Report 2014 8

Board of Directors 

 

Site Head 

Shop Manager 

Quality Control 

PPC  Store Head 

Accounting Head 

General Affairs 

Tax & MIS Head 

Marketing Manager 

 

Site Head 

Shop manager  Finance Manager  General Finance Manager 

Quality Control 

Store Head 

Accounting Head 

Marketing Team 

PPC 

Page 11: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Management Report

Industry Review

The long-term Vision of Indonesia's National Industrial Development is to become "a Strong Industrial Country in the World, "By 2020 Indonesia will become a new developing Industrial Country". This means that in that year National Industry Capability will be recognized by the International Community as a Structural basis for a strong Modern Economy and a Vehicle for Community-oriented Economy. Local Capital Goods and Machinery become the backbone for Industrial development in any Country. Facilities such as Machine Tools, Heavy Engineering and Foundry play an important role in future economic transformation towards the continuity of Business development. In Indonesia, Industry growth targeted in the Period 2010-2025 are estimated above 10% per year, where at this level the Industry's role in Indonesia's GDP can increase significantly.

PT. Texmaco Perkasa Engineering Tbk has made Strategic Investments in this Sector by building complete Facilities that can create products at Competitive Prices and with International Quality Standards. The Company's Operations from Metal Printing to Finished goods are to make Indonesia stand apart, thereby saving high Foreign Exchange through reducing Imports and also contributing to Foreign Exchange earnings through increased Exports.

Facilities and Manufacturing Capabilities of PT. Texmaco Perkasa Engineering Tbk in short are as follows:

 

Metal Casting Division (Foundry)

 

Foundry Division in Semarang Unit is one of the Largest and most Modern Facilities include two High-Pressure Molding Lines and three Jerks and squeeze Molding Lines capable of Producing High Quality Gray Iron and SG Iron Precision Castings of all Sizes. Products from this Facility meet stringent quality Standards from International Automotive Manufacturers. It has QS9000, ISO 9001 Accreditation and Australian Government Certification. In addition, the Company has begun implementing Six Sigma Strategies for Manufacturing and supply Castings to meet the requirements of various Industries both inside and outside Indonesia.

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Page 12: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

The Main Customers and Products that we provide are :

General Motors Indonesia-Braking Systems & Discs for Opel MPV General Electric Industrial Systems, Canada Locomotives such as CE & PE Frame Heads General Electric Transportation Systems, USA-Various Types of Vinidex Locomotive Castings, Australia - Ductile Iron Pipe Fittings Tyco Australia – High Pressure Pump House PT. Pertamina - Cooling Plate for Molding.

We are one of the Vendors that qualify for Local and International Customers. As a Supplier, we have maintained a good track record by ensuring the supply of good quality Products and timely delivery at competitive prices.

 

Machine Tools and Manufacturing Components

Machine Tools one of The Company's Business Unit produce a wide range of Lathe Tools including Conventional and CNC (Computer Numerically Controlled), Milling, Drilling and CNC Machining Center Boring Machines, and other Special Machines of various sizes for large volume production. In accordance with the strategic arrangements and availability of Working Capital, this product can be marketed Internationally.

Until this year, the Unit continued to be under minimal operation due to limited Working Capital and awaiting completion of Restructuring.

 

Heavy Fabrications:

The activities of this division include Fabrication, Machining and Assembly of Large and Heavy Equipment such as Heat Exchangers, Reactors and other Special Tools for Cement, Fertilizer, Petrochemicals, Power Plants, Mining and Sugar Industries.

The Company has the ability to fabricate various types of Metals such as Titanium, Stainless Steel, Alloy Steel and Carbon Steel. The Company also has a Titanium Work Shop. Customer Specifications are met by Products and Engineering, which are in line with International Codes and Standards.

Due to a lack of Capital Support and further development in Restructuring, the unit was forced to temporarily close its activities

PT. Texmaco Perkasa Engineering Tbk. – Annual Report 2014 10

Page 13: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Current situation

The delayed Restructuring coupled with the inability to increase Working Capital will continue to hamper the Company's future plans . The Company has taken appropriate measures to reduce costs as much as possible . This has maintained Operations with ordering efforts that can keep the engine running and in good condition until the Restructuring is complete .

Product Range

Bb

Casting Suspension Brake Components Engine Transmission Flywheel Diesel Engine Crankcase Cylinder Block

Components for use in the Industry Automotive

Heavy Equipment Pressure Vessel Reactors Tank and Storage Vessels Shell and Tube Heat Exchangers Process Columns Gas Turbine Parts

Factories and equipment for use in various industries, including : chemicals , sugar, cement, pulp and paper and rubber .

Machines Tools Computerized Numerical Control (CNC) Lathes

Conventional Lathes Drilling Machines Special Purpose Machines Boring Machines CNC Machining Centers Gantry T y p e CNC Milling GM

2030 for Dies & Mould High Speed Integral Spindle

Machine tools for the production of automotive engine components and engine components Etc .

6000 rpm 15000 rpm CNC Millingfor Dies & Mould

Servo Motor for CNC Machine Drive for High Speed Spindle Fleksibel Modular CNC Machine

F o r u s e i n v e r t i c a l o r h o r i z o n t a l

PT. Texmaco Perkasa Engineering Tbk. – Annual Report 2014 11

Business Field Products Applications

Page 14: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

     

CNC Milling

Special line Index Grinding machine or Index Rotary Table

Automotive Component

Clutch Housing Clutch Manifolds Steering Knuckles

Motorized Vehicle Parts

Marketing and Distribution

The Company continues to strive to market its products to the maximum both for Local Markets and Foreign Markets. Although the Economic Crisis in the Region had a negative impact on the Domestic Market, the Company saw a great opportunity in the Engineering Sector. With low Production Costs and Integrated Operations, the Company has obtained orders within the Country, Southeast Asian Countries and several other Countries.

The Company also plans to participate in several International Engineering Industry Exhibitions and Distribution and Marketing Networks.

Human Resources

To ensure the development of Human Resources Company has implemented new Technologies on an 

ongoing basis and to improve Expertise and Productivity, the Company has organized and planned 

Training Programs. Each Unit has a Technical Training Center managed by Experts who provide Training 

and teaching  with Classroom Systems and Work Training Practices in the field. For Models and Cost 

estimates, Software Modern designs such as B Jac have been used effectively. The Company has also 

developed Six Sigma directly to improve quality by working with GE. 

 

Environment

As a Domestic Company, the Company remains responsible for fully implementing Environmental Management Standards in Indonesia and has a strong commitment to Environmental Protection

PT. Texmaco Perkasa Engineering Tbk. – Annual Report 2014 12

Page 15: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Location and Type of Assets Value of more than 5% of Total Assets

The Company has several assets that are worth more than 5% of the total assets owned. These assets are located in two Factory Locations, namely in Kaliwungu, Central Java and Karawang, West Java. These Assets generally consist of Land, Machinery and Building.

Guaranteed Assets

TPE International Finance Company B.V., with the Company as Guarantor, issued Long-Term Notes. The said Promissory Notes are Secured by Land Assets and Immovable Assets (other than Inventories) owned by the Company located in Karawang - West Java, with a Land Area of 204,480 Square Meters

Dividend

The Company's Dividend Policy is to distribute an Annual Dividend of 15% of the Net Profit if the Net Income earned for the Fiscal Year is less than Rp. 10 billion; Dividends amounting to 20% of Net Income if the Net Income earned for the Fiscal Year is more than Rp. 10 Billion but less than Rp. 50 Billion; Dividends amounting to 30% of Net Income if the Net Income earned for the Financial Year is more than Rp.50 Billion.

The Company does not distribute Dividend for the 2014 Financial Year because the Company is still experiencing Loss.

Stock Price Performance

Effective from December 1, 2004 The Jakarta Stock Exchange suspended the Share Listing (Delisting) from the Exchange according to the BEJ letter No. S-1541 / BEJ-PSR / 10-2004 dated October 19, 2004. Since that date the Shares of the Company are no longer traded on The Exchange.

Subsidiary

The Company currently has one Subsidiary, namely TPE International Finance Company B.V. established under Dutch State Legislation and 100% owned by the Company. It functions as the Company's Financing Institution and has succeeded in issuing US$100 Million Guaranteed Secured Floating Rate Notes (FRN). In connection with the FRN Debt Restructuring Scheme, the Company is currently in the process of submitting a Transfer of Domicile of the Company from Netherlands.

PT. Texmaco Perkasa Engineering Tbk. – Annual Report 2014 13

Page 16: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Management Analysis and Discussion

Review

The Company in carrying out its Business Activities which is divided into four divisions, namely Foundry division, Textile Machinery, Heavy Equipment and Fabrication divisions & Machine Tools division.

Important Financial Data

Like the previous year, the lack of Working Capital facilities had a severe impact on the Company's Financial Performance. Due to limited Working Capital, the Company cannot take advantage of opportunities from several Orders and Business Opportunities. Management is doing its best and working on adequate Working capital, this effort is taken in anticipation of the Restructuring that has not been completed so that the Company's performance has not improved.

The following Financial analysis is based on the Consolidated Financial Statements of the Company and its Audited Subsidiaries.

Business Results of the Company

Net sales

The Company's Net Sales reached Rp. 81 Billion during 2014 increased by around 18% compared to Net Sales in 2013 of Rp. 68 Billion, Export Value this year experienced an increase and Export Sales recorded at Rp. 70.1 Billion or up Rp. 19.8 Billion compared to the previous year's net Export Sales of Rp. 50.23 Billion and Local Sales amounted to Rp. 10.90 Billion decreased by Rp. 7.6 Billion compared to the previous year's Sales of Rp. 18.56 Billion.

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Page 17: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Gross Profit

The Company's Gross Profit in 2014 was Rp. 41.37 Billion, compared to Gross Profit of the Year2013 amounting to Rp. 32.33 Billion.

Operating Profit

The Company's Operating Profit in 2014 was Rp. 3.18 Billion, compared to Operating Income for the year 2013 amounting to Rp. 5.39 Billion.

Net Loss

The Company's Net Loss in 2014 was Rp. 51.016 Billion, compared to the Net Loss in 2013 of

Rp. 1.170,844 Billion.

Auditor's Opinion

The Independent Auditor did not give an Opinion on the Consolidated Financial Statements of the Year 2014 regarding the existence of significant uncertainty regarding the Company's ability to maintain its Business continuity.

Economy Crisis

The Design Industry and the Infrastructure Sector are heavily affected in this Economic Crisis which has a negative impact. Even so Investors have begun to have a sense of confidence back in Indonesia and several Projects sponsored by the Private and Government will be restarted, the Domestic Engineering Sector has also improved. The situation as before has impacted the Company's Performance. Meanwhile, the Company has established itself as a Supplier of reliable Heavy Equipment on the International Market.

Raw Material

The Company uses several types of Steel obtained from various Domestic and Foreign Suppliers. The delay in receiving Raw Materials and the sharp difference in Purchase prices can affect the smoothness of the Production process can directly affect the Profitability and Performance

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Financial Restructuring

The Economic Crisis in the Region and the decline in the Local Currency Exchange Rate against Foreign Currencies and the increasingly difficult to obtain Working Capital Facilities have had an impact on the Company's Performance.

The Company's Debt to the Indonesian Bank Restructuring Agency (IBRA) was transferred to PT. Jaya Perkasa Engineering (JPE) and in August 2002, the Company and JPE entered into an Individual Restructuring Agreement (IRA).

The entire process of Restructuring of the Company's Debts to JPE has been completed with several conditions that must be fulfilled (Conditions Precedent and Conditions Subsequent) and is currently in the implementation stage.

On December 27, 2002, through EGM, the Company obtained approval from the Shareholders on the plan to increase the Company's Capital in connection with the conversion of its Debt into Capital in accordance with the IRA. The completion of the Restructuring Process is expected to provide stability in the Company's Financial condition. 

Subsidiary

The Company's Financial Statements for the Period ended December 31, 2005 are consolidated Financial Statements with Subsidiaries, TPE International Finance B.V.

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Page 19: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Company Information

Date of Establishment : January 12, 1982

Listing of shares on the Jakarta Stock Exchange

1. Public Offering in February 1993

Listing 21 Million Shares on March 11, 1993 on the Jakarta Stock Exchange.

2. Limited Public Offering-I in December 1993

On December 22, 1993, 84 million shares were listed on the Jakarta Stock Exchange, resulting in the total shares of the Company listed on the Jakarta Stock Exchange to 105 million shares.

3. Stock split in April 1995

With the stock split, since April 4, 1995 the number of shares The company listed on the Jakarta Stock Exchange was 210 million .

4. Bonus Shares and Dividend Shares in April 1995

The Company has distributed Bonus Shares and Dividend Shares totaling 33.6 Million Shares on April 17, 1995. Thus the number of the Company's Shares listed on the Jakarta Stock Exchange after the distribution of Bonus Shares and Dividend Shares is 243.6 Million Shares .

5. Limited Public Offering II in November 1997

The Company has made a Limited Public Offering II of 1,802.64 Million Shares which were listed on the Jakarta Stock Exchange on November 21, 1997. As such, the number of Shares listed on the Jakarta Stock Exchange became as many as 2,046.24 Million shares .

6. Suspension of Securities Listing

Delisting of the Securities Listing from the Jakarta Stock Exchange effective from the 1st December 2004 .

PT. Texmaco Perkasa Engineering Tbk. – Annual Report 2014 17

Page 20: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Debt to Share Conversion

On May 31, 2016 Nur Aziz, et al had submitted PKPU against the Company. Then based on the Judgement by Central Jakarta Commercial Court No.54 / Pdt.Sus-PKPU / 2016 / PN.Niaga.Jkt.Pst. dated June 20, 2016 the Company stated in PKPU (Postponement of Debt Payment Obligations).

Then on March 15, 2017 Creditors Meeting was held with an Agenda of Peace Plan proposed by Debtors as well as Voting for the Peace Plan with a result of 78.28% Separatist Creditors and 89.5% Unsecured Creditors agreeing to the Composition Plan. The Judge stated the validity of the Composition Plan was carried out between Debtors and Creditors, as agreed upon on March 15, 2017.

On March 24, 2017 one of the Creditors has appealed to the M.A, which has rejected the cassation application number: 807 K / Pdt.Sus-Pailit / 2017. On January 23, 2018.

Thus the Company will issue Shares in accordance with the Restructuring Agreement which has been approved and decided by the Panel of Judges of the Commercial Court in Central Jakarta District Court TPE Judgment No: 54 / Pdt.Sus-PKPU / 2016 / PN.Niaga JKT. PST. dated June 20, 2016.

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Page 21: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Capital Structure as at 31 December 2014

Authorized Capital Rp. 7,775,712,000,000, Nominal per share of Rp. 500, - The issued and paid up capital is Rp 1,023,120,000,000, Additional paid-in capital is Rp. 1,005,816,912,571, ‐ 

Shareholders PT. Multikarsa Investama 56.84% Multi Tree Ltd. B.V.I 12.85% Standard Chartered Bank 6.746% Public 30.31% Board of Commissioners President Commissioner : Glenny H Kairupan Independent Commissioner : Djunaedi Faizin (Deceased on 19 February 2017) 

Board of Directors President Director : Ir. Neflizon Abdullah Director : Ir. Victor Benedictus Director : Irajendren

Company Business Activities Includes activities in the Manufacturing of industrial Machinery, Heavy Equipment and Manufacturing and Engineering Services.

Subsidiary

TPE International Finance Company B.V. Representative office Menara Mulia Suite 1901, 19 th Floor Jl. Jend. Gatot Subroto, Kav. 9-11 Karet Semanggi, Setiabudi Jakarta 12930, Indonesia Tel : (62-21) 252-0656 Fax : (62-21) 522-9380

Registered Office Kiara Payung Village Klari District, Karawang, West Java, Indonesia Tel : (62-267) 432-309 Fax : (62-267) 432-312

PT. Texmaco Perkasa Engineering Tbk. – Annual Report 2014 19

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Factory Facilities

   Factory1 Factory 2 Jl. Raya Kaliwungu Desa Kiara Payung Km.19, Kendal , Kecamatan Klari , Semarang Karawang Jawa Tengah Jawa Barat Indonesia Indonesia Tel : (62-24) 8660-150 Tel : (62-267) 432-309 Fax : (62-24) 8661-234 Fax: (62-267) 432-312

Securities administration Bureau

PT. Texmaco Perkasa Engineering Tbk

  Menara Mulia Suite 1901, 19 th Floor

Jln. Jend. Gatot Subroto Kav. 9-11

Jakarta Selatan 12930

Tel: (62-21) 252-0656

Fax: (62-21) 522-9380

Registered Public Accountant Office

Drs. Heroe , Pramono & Rekan

Jl. Prof. DR. Supomo , S.H. No. 3

Jakarta 12870

Tel : (62-21) 830-3044

Fax : (62-21) 829-5575

PT. Texmaco Perkasa Engineering Tbk. – Annual Report 2014 20

Page 23: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

The Annual Report and the Financial Statements and other relevant information are the responsibility of the management of PT. Texmaco Perkasa Engineering Tbk and guaranteed the correctness by all Members of the Board of Directors and Board of Commissioners by affixing their respective signatures below :

Glenny H Kairupan Ir. Neflizon Abdullah President Commissioner President Director

Djunaedi Faizin Ir. Victor Benedictus Independent Commissioner Director (Deceased on 19 Feb 2017)

                          Irajendren Director

PT. Texmaco Perkasa Engineering Tbk. – Annual Report 2014 21

Page 24: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

INDEPENDENT

AUDITOR REPORT

2014

PT. Texmaco Perkasa Engineering Tbk. – Annual Report 2014 22

Page 25: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

DECEMBER 31, 2014 AND 2013

AND SUBSIDIARY COMPANY

PT TEXMACO PERKASA ENGINEERING Tbk

INDEPENDENT AUDITORS' REPORT

AND

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED

Page 26: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Table of Contents

Directors' Statement of Responsibility for Consolidated Financial Statements

for the years Ended December 31, 2014 and 2013

Independent Auditors' Report 1 - 3

Consolidated Statement of Financial Position as of December 31, 2014 and 2013 4 - 5

6

Consolidated Statement of Changes in Equity for The Years Ended December 31, 2014 and 2013 7

Consolidated Statement of Cash Flows for The Years Ended December 31, 2014 and 2013 8

Notes to the Consolidated Financial Statement as of December 31, 2014 and 2013 9 - 60

PT TEXMACO PERKASA ENGINEERING Tbk

AND SUBSIDIARY COMPANY

Consolidated Statement of Profit or Loss and Other Comprehensive Income for The Years Ended

December 31, 2014 and 2013

Page 27: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021
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Page 30: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021
Page 31: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Report No. : LT / 102 / HPR-5 / XI / 2015

Page :4

A S S E T S Notes 2 0 1 4 2 0 1 3

Rp Rp

CURRENT ASSETS

Cash and cash equivalents 2c,2d,2e,3,33,34 30.644.768.715 30.981.633.782

Trade accounts receivable 2d,2f,4,33,34

Related parties 2.834.217.208 5.547.725.657

Third parties 38.455.122.591 25.514.574.888

Other receivables 4.363.990.502 2.388.694.298 Stock Inventories 2g,5

9.985.890.688 5.484.806.917

Advances 6 1.175.094.476 770.642.836

Prepaid taxes 7 3.296.281.930 3.442.160.185

Total Current Assets 90.755.366.110 74.130.238.563

NON CURRENT ASSETS

Other receivables related parties 2d,8,33

114.301.933.804 123.758.753.347

Restricted Bank Account 2d,3,33

- -

Stock Investment 2k,9

- -

Deferred Tax Assets 2o,31 204.406.389.708 202.838.368.447

Fixed assets 2i, 2j, 10

2i, 2j, 10 280.914.893.341 283.860.541.308

Other assets net 11 - 709.220.851

Total non current assets 599.623.216.853 611.166.883.953

TOTAL ASSETS 690.378.582.963 685.297.122.516

PT TEXMACO PERKASA ENGINEERING Tbk AND SUBSIDIARY COMPANY

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS OF DECEMBER 31, 2014 AND 2013

(Expressed in Rupiah, unless otherwise stated)

(Net of allowance of Rp26.066.562.773,- and

Rp21.464.581.731,- respectively in 2014 and 2013)

(Net of allowance of Rp3,068,959,357, -

respectively in 2014 and 2013)

(Net of accumulated depreciation of

Rp428,087,349,393, and Rp424,329,160,021,

respectively in 2014 and 2013)

(Net after deducting the allowance for obsolete

inventories amounting to Rp266,675,758,236, -

respectively in 2014 and 2013, -)

(Net of allowance for doubtful accounts -

amounting to Rp9,471,517,291 and

Rp6,841,926,810, respectively in 2014 and 2013)

(Net impairment the investment value of

Rp933,253,905,648, respectively, in 2014 and

2013)

See notes to the consolidated financial statements which are

integrated part of the overall financial statements

Page 32: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Report No. : LT / 102 / HPR-5 / XI / 2015

Page : 5

LIABILITIES AND EQUITY Notes 2 0 1 4 2 0 1 3

Rp Rp

SHORT-TERM LIABILITIES

Bank loans 2c,12,34,35b 26.671.957.120 26.133.801.072

Notes payable 13,34,35b 165.459.200.000 162.151.020.000

Trade accounts payable 2d,14,33,34

Third parties 34.038.092.699 28.291.531.040

Related parties 13.825.564.217 13.825.564.217

Other payables 15 6.411.528.682 7.333.513.755

Taxes payable 2o,16 9.682.528.811 9.387.449.705

Accrued expenses 17 14.713.150.737 14.794.530.114

Interest payable 18,34 81.410.111.343 79.325.429.300

Current maturities of long-term liabilities 2d,2j,34,35b

Finance lease 19 6.785.169.110 6.657.971.813

Long-term loans 20 833.867.572.961 817.648.058.427

Total Short-Term Liabilities 1.192.864.875.680 1.165.548.869.443

NON CURRENT LIABILITIES

Accrued interest 18,34 21.881.308.641 21.439.812.784

Post-employment benefits obligations 2n,,36 3.271.322.852 3.359.976.922

Deferred tax liabilities 2o,31 - -

Other payable related parties 2d,33 272.541.914.929 271.258.081.446

Long term loan 2d,20,34,35b 124.703.720.518 122.658.612.562

Long term notes 2c,2d,21,34,35b 1.290.500.000.000 1.265.400.000.000

Total Non Current Liabilities 1.712.898.266.940 1.684.116.483.714

EQUITY (EQUITY DEFFICIENCIES)

Capital stock 22

1.023.120.000.000 1.023.120.000.000

Additional paid-in capital - Net 23 1.005.816.912.571 1.005.816.912.571

Deficit (4.244.321.472.228) (4.193.305.143.212)

Total Equity (Equity Deficiencies) (2.215.384.559.657) (2.164.368.230.641)

TOTAL LIABILITIES AND EQUITY

(EQUITY DEFFICIENCIES) 690.378.582.963 685.297.122.516

See notes to the consolidated financial statements which are

integrated part of the overall financial statements

Authorized capital of Rp.7.775.712.000,000, - divided

into 8,184,960,000 series A share in nominal value of

Rp.500, - and 73,664,640,000 series B share nominal

Rp.50, - in 2014 and 2013

PT TEXMACO PERKASA ENGINEERING Tbk AND SUBSIDIARY COMPANY

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

The issued and fully paid capital of 2,046,240,000

Series A shares in 2014 and 2013

AS OF DECEMBER 31, 2014 AND 2013

(Expressed in Rupiah, unless otherwise stated)

Page 33: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Report No. : LT / 102 / HPR-5 / XI / 2015

Page : 6

Notes 2014 2013

Rp Rp

NET SALES 2d,2m,24,33 81.010.003.797 68.804.817.275

COST OF GOODS SOLD 2d,2g,2m,25,26,33 (39.631.327.530) (36.473.428.982)

GROSS PROFIT / (LOSS) 41.378.676.267 32.331.388.293

OPERATING EXPENSES 2m,27

Selling expenses 1.067.882.528 5.020.069.909

General and administrative expenses 40.629.294.659 21.915.075.739

Total Operating Expenses (41.697.177.187) (26.935.145.648)

OPERATING PROFIT / (LOSS) (318.500.920) 5.396.242.645

OTHER INCOME / (EXPENSES)

Interest income 28 11.678.113 20.915.574

Tax penalties (26.084.469) (45.047.992)

Interest expense and bank administration 29 (710.240.761) (737.548.864)

Gain (Loss) on foreign exchange rates - net 2c,30,34 (42.479.469.838) (490.997.212.412)

(Allowances) recoveries receivable /advances (11.563.524.723) (26.922.536.538)

Others -Net 2.471.569.353 2.147.117.604

Other income (expenses) - Net (52.296.072.325) (516.534.312.628)

PROFIT / (LOSS) BEFORE SUBSIDIARY (52.614.573.245) (511.138.069.983)

PROFIT(LOSS) FOR THE SUBSIDIARY 30.222.967 303.313.356

PROFIT / (LOSS) BEFORE TAX (52.584.350.278) (510.834.756.627)

INCOME TAX EXPENSES 2o,31 1.568.021.262 273.244.620.030

NET PROFIT / (LOSS) FOR THE CURRENT YEAR (51.016.329.016) (237.590.136.597)

Other Comprehensive Income / Expenses - (933.253.905.648)

TOTAL COMPREHENSIVE PROFIT / (LOSS) (51.016.329.016) (1.170.844.042.245)

Profit / (Loss) attributable to:

Owners of The Company (51.016.329.016) (1.170.844.042.245)

Non-controlling interests - -

(51.016.329.016) (1.170.844.042.245)

Total Comprehensive Profit / (Loss) - attributable to:

Owners of The Company (51.016.329.016) (1.170.844.042.245)

Non-controlling interests - -

(51.016.329.016) (1.170.844.042.245)

NET PROFIT / (LOSS) PER SHARE 2p,32 (25) (572)

See notes to the consolidated financial statements which are

integrated part of the overall financial statements

PT TEXMACO PERKASA ENGINEERING Tbk

AND SUBSIDIARY COMPANY

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE YEARS ENDED OF DECEMBER 31, 2014 AND 2013

(Expressed in Rupiah, unless otherwise stated)

Page 34: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Report No. : LT / 102 / HPR-5 / XI / 2015

Page : 7

Additional capital Non Controling Total

Notes Capital stockPaid - net

Unappropriated Appropriated Total Interest Equity

Balance as of December 31, 2012 1.023.120.000.000 1.005.816.912.571 (3.023.679.100.967) 1.218.000.000 (993.524.188.396) - (993.524.188.396)

Comprehensive loss for the current year - - (1.170.844.042.245) - (1.170.844.042.245) - (1.170.844.042.245)

Balance as of December 31, 2013 1.023.120.000.000 1.005.816.912.571 (4.194.523.143.212) 1.218.000.000 (2.164.368.230.641) - (2.164.368.230.641)

Comprehensive loss for the current year - - (51.016.329.016) - (51.016.329.016) - (51.016.329.016)

Balance as of December 31, 2014 1.023.120.000.000 1.005.816.912.571 (4.245.539.472.228) 1.218.000.000 (2.215.384.559.657) - (2.215.384.559.657)

See notes to the consolidated financial statements which are

integrated part of the overall financial statements

PT TEXMACO PERKASA ENGINEERING Tbk

AND SUBSIDIAR COMPANY

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013

(Expressed in Rupiah, unless otherwise stated)

Profit Balance / (Loss)

Page 35: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Report No. : LT / 102 / HPR-5 / XI / 2015

Page : 8

2 0 1 4 2 0 1 3

Rp Rp

CASH FLOWS FROM OPERATING ACTIVITIES

Receipt from customers 79.330.450.600 89.052.859.647

Payments to suppliers (41.814.192.632) (36.397.302.146)

Payment of operating expenses (4.012.755.527) (5.237.544.520)

Tax receipts (payments) (1.360.012.904) (3.240.735.090)

Interest income 11.678.113 20.915.574

Other income / expenses 1.030.868.000 1.131.254.646

Payment of salaries, wages and benefits (13.807.416.005) (13.795.131.157)

Bank administrative Expenses (124.095.996) (137.216.441)

Net cash flow from operating activities 19.254.523.649 31.397.100.513

CASH FLOWS FROM INVESTING ACTIVITIES

Addition of fixed assets (225.920.000) (729.871.833)

Net cash flow used for investing activities (225.920.000) (729.871.833)

CASH FLOWS FROM FINANCING ACTIVITIES

Receivables from related parties (17.484.767.556) (36.863.046.971)

Debt to related parties (2.092.321.355) (2.561.218.744)

Net cash flow available from / (used for) financing activities (19.577.088.911) (39.424.265.715)

NET INCREASE / (DECREASE) IN CASH (548.485.262) (8.757.037.035)

Effect of changes in exchange rates on cash and cash equivalents 211.620.195 6.302.147.011

CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 30.981.633.782 33.436.523.806

CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 30.644.768.715 30.981.633.782

See notes to the consolidated financial statements which are

integrated part of the overall financial statements

PT TEXMACO PERKASA ENGINEERING Tbk AND SUBSIDIARY COMPANY

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013

(Expressed in Rupiah, unless otherwise stated)

Page 36: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Report No. : LT/102/HPR-5/XI/2015 Page : 9

PT TEXMACO PERKASA ENGINEERING Tbk AND SUBSIDIARY COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2014 AND 2013

(Expressed in Rupiah, unless otherwise stated)

1. GENERAL

a. Establishment and General Information

PT Texmaco Perkasa Engineering Tbk (Company), was established within the framework of the Domestic

Investment Law No. 6 of 1968 as amended by. Law No. 12 of 1970 based on Notarial deed by Januar Tirtaamidjaja, SH in Jakarta No. 29 dated January 12, 1982. The deed of establishment was approved by the Minister of Justice in decision letter No. C2-6030-HT.01.01.Th.84 dated October 24, 1984 and published in State Gazette No. 30 dated April 12, 1991, Supplement No. 1040. The Articles of Association of the Company have been amendment several times, most recently with the Notarial deed in Jakarta from Notary Sutjipto, SH No. 92 dated December 27, 2002. This amendment was approved by the Minister of Justice and Human Rights of the Republic of Indonesia Number: C-10696 HT.01.04.TH.2003 dated May 14, 2003.

In accordance with Article 3 of the Company's Articles of Association, the scope of the company’s activities mainly cover business and services technique and engineering. The company is domiciled in Karawang, West Java, with factories located in Kendal, Central Java and Karawang, West Java. The Company's representative office is located at Menara Mulia Building, Suite 1901, 19th Floor, JL.Jend. Gatot Subroto Kav. 9-11, Karet Semanggi, Setiabudi, Jakarta 12930.

The company commenced commercial operations in 1984. The Company's products are marketed both at local and export.

The company is one of the group of companies owned by the Texmaco Group.

Company management according to Deed No. 88 concerning Statement of Meeting Resolutions dated November 20, 2014 by Aryanti Artisari, S.H, M.Kn. notary in Jakarta as follows:

President Commissioner : Glenny Humphrey Kairupan Independent Commissioner : Djunaedi Faizin

President Director : Ir. Neflizon Abdullah Director : Irajendren Director : Ir. Victor Benedictus

The number of permanent employees of the Company and subsidiary as of December 31, 2014 and 2013 were 383 and 290 respectively

b. Subsidiary Company

Year 2014

The company has, directly or indirectly, hold the shares of the following subsidiary:

Year of Total Ownership commercial Assets

Subsidiary Domicile Business type percentage operation December 31, 2014 TPE International Finance Company B.V (TPE B.V) Netherlands Financial services 100 % 1997 Rp. 1,296,023,873,615

Page 37: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Report No. : LT/102/HPR-5/XI/2015

Page : 10

PT TEXMACO PERKASA ENGINEERING Tbk AND SUBSIDIARY COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2014 AND 2013

(Expressed in Rupiah, unless otherwise stated)

1. GENERAL (Continued)

b. Subsidiary Company (Continued)

Year 2013

Year Amount

Percentage operations Asset Subsidiary Domicile Type of business ownership commercial December 31, 2013

TPE International Finance Company B.V (TPE B.V) Netherlands Financial services 100 % 1997 Rp. 1,269,874,195,779

TPE BV was founded in 1997.

As part of the restructuring scheme approved by the creditor, the domicile of TPE International Company B.V. transferred from the Netherlands to Mauritius. Currently the legal settlement of new bonds is being prepared. Until the completion of the examination has not been realized.

c. Company Public Offering

On December 21, 1992, the Company obtained notification of the effectiveness of the Share Registration from the Chairman of the Capital Market Supervisory Agency (BAPEPAM) with his letter No. S-2002 / PM / 1992 concerning to make a public offering of 1,000,000 shares with a nominal value of Rp 1,000 per share at an offer price of Rp 4,800 per share.

On November 26, 1993, the Company obtained notification of the effectiveness of the Share Registration from the Chairman of BAPEPAM No. S-2028 / PM / 1993 concerning to offer shares to shareholders 84,000,000 shares with a nominal value of Rp 1,000 per share on the basis of calculating four new shares for every five shares held by shareholders.

On December 23, 1994, the Company obtained notification of the effectiveness of the Company's Registration Statement from the Chairman of BAPEPAM No. S-2067 / PM / 1994 concerning changes in the nominal value of shares from Rp. 1,000 to Rp. 500 per share.

On November 4, 1997, the Company received notification of the effectiveness of the Company's Registration Statement from the Chairman of BAPEPAM No. S-2555 / PM / 1997 concerning to issue a Limited Public Offering II to shareholders with Pre-emptive Rights amounting to 1,802,640,000 shares with a nominal value of Rp 500 per share on the basis of calculating thirty-seven new shares for every five shares held by shareholders.

The Jakarta Stock Exchange has decided to delist on October 19, 2004. The delisting was effective from December 1, 2004.

Page 38: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Report No. : LT/102/HPR-5/XI/2015 Page : 11

PT TEXMACO PERKASA ENGINEERING Tbk AND SUBSIDIARY COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2014 AND 2013

(Expressed in Rupiah, unless otherwise stated)

2. ACCOUNTING POLICIES The consolidated financial statements are prepared based on the Financial Accounting Standards in Indonesia and approved by the Board of Directors on November 30, 2015.

The following are significant accounting policies adopted in preparing the consolidated financial statements.

a. Presentation of Consolidated Financial Statements

The reporting currency used in the preparation of the consolidated financial statements is Indonesian Rupiah (Rp).

The consolidated financial statements are prepared using accounting principles and practices generally accepted in Indonesia.

The consolidated financial statements are prepared based on the historical value principle, except for certain accounts which are prepared on the basis of other measurements as described in the accounting policies of each account.

The consolidated statements of cash flows are prepared using the direct method by classifying cash flows into operating, investing and financing activities.

The preparation of the consolidated financial statements in accordance with the Indonesian Financial Accounting Standards requires management to make estimates and assumptions that affect the number of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the amount of revenues and expenses during the reporting period. Actual results may differ from the estimated amount

b. Principles of Consolidation

The consolidated financial statements include the financial statements of the Company and subsidiary with ownership of more than 50%, both directly and indirectly. Balances and transactions including unrealized gains / losses between Companies are eliminated to reflect the financial position and results of operations of the Company and subsidiary as a business entity.

Subsidiary share purchase transactions conducted in the context of reorganizing entities within the same business group are restructuring transactions between entities under common control. The difference between the acquisition price and the book value of a subsidiary of a restructuring transaction between entities under common control is recorded in the account "Difference in Value of Restructuring Transactions of Entities Under Common Control" which is presented as an element of Equity. The difference in minority ownership (the difference between the transfer price and the net assets of a subsidiary), because the amount is not significant, is credited to the operations presented in the financial statements at the time the acquisition occurs.

c. Transactions and Translation of Financial Statements in Foreign Currencies

Bookkeeping of the Company and subsidiary, except TPE BV is held in Rupiah. Transactions during the current year in foreign currencies are recorded at the rates of exchange prevailing at the time the transactions are made. On balance sheet date, monetary assets and liabilities denominated in foreign currencies are translated to reflect the rates of exchange prevailing at that date. The resulting foreign exchange gain or loss is credited or charged to the income statement for the year.

Page 39: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Report No. : LT/102/HPR-5/XI/2015 Page : 12

PT TEXMACO PERKASA ENGINEERING Tbk AND SUBSIDIARY COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2014 AND 2013

(Expressed in Rupiah, unless otherwise stated)

2. ACCOUNTING POLICIES (Continued)

c. Transactions and Translation of Financial Statements in Foreign Currencies (Continued)

Bookkeeping of TPE BV is held in the Netherlands Guilders. For the purpose of presenting the consolidated financial statements, all assets and liabilities of TPE BV are translated using the middle rate of export bills issued by Bank Indonesia at the balance sheet date.Revenues and expenses are translated using the average exchange rate for the current period. Adjustments to the results of the translation are credited to the current operation.

d. Related Party Transactions

Related parties are:

1) Companies either directly or through one or more intermediaries, control or are controlled by, or are under common control, with the Company (including holding companies, subsidiary and fellow subsidiary);

2) Associated companies;

3) Individuals who have, either directly or indirectly, an interest in voting rights in the Company that has a

significant effect, and close family members of such individuals (which is meant by their immediate family members who can be expected to influence or influence such individuals in their transactions with Company);

4) Key employees, namely those who have the authority and responsibility to plan, lead and control the

activities of the Company, which include commissioners, directors and managers of the Company and close family members of such people; and

5) A company in which a substantial interest in voting rights is owned directly or indirectly by each person

described in item (3) or (4), or each person has a significant influence on the Company. This includes companies that have the same key management members as the company.

All transactions with related parties, whether or not carried out with interest rates or prices, the same terms and conditions as those made with third parties, are disclosed in the consolidated financial statements.

e. Cash and cash equivalents

Cash and cash equivalents consist of cash, banks and all investments with maturities of three months or less from the date of acquisition and which are not guaranteed and restricted in use

f. Accounts receivable

Trade accounts are recorded in gross amounts less allowance for doubtful accounts. The Company provides allowance for doubtful accounts based on a review of the individual receivable accounts at the end of the year.

g. Inventories

Inventories are stated at cost or net realizable value, whichever is lower. Cost is determined by the weighted average method.

Page 40: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Report No. : LT/102/HPR-5/XI/2015 Page : 13

PT TEXMACO PERKASA ENGINEERING Tbk AND SUBSIDIARY COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2014 AND 2013

(Expressed in Rupiah, unless otherwise stated)

2. ACCOUNTING POLICIES (Continued)

g. Inventories (Continued) Allowance for inventory that is obsolete or slow moving is determined based on estimates of the state of each type of inventory.

PSAK No. 14 (Revised 2008) - Inventories In September 2008, the Indonesian Institute of Accountants (IAI) issued a revised accounting standard for inventory in place of PSAK No. 14 - Inventory.

Fundamental changes to the revised standard include the Company must use the same cost formula for all inventories which have the same properties and uses and purchase of inventory with Deferred settlement terms, the difference between the purchase price for normal credit terms and the amount paid recognized as interest expense during the financing period.

The company is currently evaluating the impact of the implementation of these standards on financial statements.

h. Prepaid expenses

Prepaid expenses are amortized over the benefit of each cost using the straight-line method.

i. Fixed Assets - Direct Ownership

Fixed assets, except for certain assets that are revalued, are stated at cost less accumulated depreciation. Certain assets have been revalued based on the results of an assessment conducted by an independent appraiser in accordance with applicable government regulations. Increase in asset value because the revaluation is credited on the difference in revaluation of fixed assets in the equity account.

Depreciation is calculated using the straight-line method, based on the estimated economic useful lives of the assets, as follows

The useful life % per year

Building and infrastructure 20 (years) 5 Machinery and equipment 10 – 16 6.25 - 10 Vehicles and office equipment 5 20

In accordance with the Statement of Financial Accounting Standards, No. 47, "Accounting for Land", acquisition of land after January 1, 2000 is stated based on acquisition costs and not depreciated. Certain costs related to the acquisition or extension of land ownership rights are deferred and amortized over the period of the land rights. Before January 1, 2000, land rights were stated based on acquisition costs and not depreciated. Included in the cost are costs related to the acquisition or extension of land ownership rights.

Page 41: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Report No. : LT/102/HPR-5/XI/2015 Page : 14

PT TEXMACO PERKASA ENGINEERING Tbk AND SUBSIDIARY COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2014 AND 2013

(Expressed in Rupiah, unless otherwise stated)

2. ACCOUNTING POLICIES (Continued)

i. Fixed Assets - Direct Ownership (Continued) If the carrying value of an asset exceeds the estimated recoverable amount, the value is reduced to the recoverable amount, which is determined as the highest value between the net selling value and the value in use.

Maintenance and repair costs are charged to the consolidated statement of income when incurred, expenditures that extend the useful life or provide future economic benefits in the form of increased capacity, quality of production or improvement in performance standards are capitalized. Fixed assets that are no longer used or sold, are excluded from the group of fixed assets and their accumulated depreciation. The gain or loss from the sale of property, plant and equipment is recorded in the consolidated statement of income for the year.

Assets in progress are stated at cost. Such costs include borrowing costs incurred during the construction period arising from the debt used to construct the asset. The accumulated acquisition costs will be transferred to the respective fixed assets when completed and ready for use.

Application of PSAK No. 16 (Revised 2007) - Fixed Assets In 2007, the Indonesian Institute of Accountants (IAI) issued a revision of PSAK No. 16 (Revised 2007) - Fixed Assets which resulted in the possibility of changes in Accounting policies. This PSAK is effective for the preparation of financial statements beginning on or after January 1, 2008.

In accordance with PSAK No. 16 (Revised 2007) - Fixed Assets, the Company is required to choose between the cost method or revaluation method as an accounting policy to measure acquisition costs. The company chose to use the cost method, so that there was no change in accounting policy for the application of PSAK No. 16 (Revised 2007).

j. Financing Lease

Financing leases are classified as capital leases if they meet the following criteria:

1) Lease has the option right to purchase leased assets at the end of the lease term at a price agreed

upon at the time of the start of the finance lease agreement.

2) All periodic payments by the Lease added the residual value can cover the return on acquisition of finance leased capital goods and interest as the profit of the finance leasing company.

3) The minimum lease period is two years

Financing leases that do not meet the above criteria are classified as operating lease transactions.

Assets and liabilities for finance leases are recorded at the cash value of all payments for finance leases added residual value (option price). Leased assets are depreciated using the method and based on the estimated useful lives of the same as direct ownership property (see accounting policy regarding property, plant and equipment).

Page 42: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Report No. : LT/102/HPR-5/XI/2015 Page : 15

PT TEXMACO PERKASA ENGINEERING Tbk AND SUBSIDIARY COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2014 AND 2013

(Expressed in Rupiah, unless otherwise stated)

2. ACCOUNTING POLICIES (Continued)

k. Stock Investment

Investment with ownership of 20% to 50%, either directly or indirectly, is stated at cost, added or subtracted by the associate's profit or loss from the acquisition of the percentage of ownership and reduced by dividends received by the equity method. If there is a permanent decline in value, the carrying amount is reduced to recognize the decrease determined for each investment individually.

The equity value of a subsidiary that is part of an investor company after a subsidiary equity change transaction is greater than the equity value of a subsidiary that is part of the investor's company before the equity change transaction of the subsidiary, then when the investment is released, the transaction difference is recognized as an expense in the period the same at the time the loss is recognized.

l. Deferred Fees

Based on capital market regulations No. 06 / PM / 2000 dated March 13, 2000 which became effective from January 1, 2000, the cost of issuing equity securities is presented as a debit balance in the paid up capital account. Previously, such costs were deferred and amortized using the straight-line method based on the useful life of 5 years. The Company has implemented the regulation and therefore the Company reversed the imposition of share issuance costs from the initial profit balance in early 1999 of Rp. 2,001,420,387.

Costs incurred in the acquisition of Long-Term Pay Notes are deferred and amortized based on the straight-line method over a period of 60 months in accordance with the term of the loan repayment.

m. Revenue and Expense Recognition

Local sales are recognized when delivering goods to customers, while export sales are recognized when the goods are shipped (FOB Shipping Point). Expenses are recognized according to benefits in the year (accrual basis).

n. Post-Employment Benefits Obligations

Employee rights for severance pay, work period awards and compensation in the Company are recognized on the accrual basis. Estimated liabilities recognized relate to services provided by employees up to the balance sheet date and are calculated in accordance with Law No. 13 dated March 25, 2003. Recognition of the obligation is estimated for employee compensation for termination of employment and determination of severance pay, work period pay and Company compensation is the application of accounting policies in accordance with PSAK No. 24 (revised 2004) concerning Employee Benefits which became effective from 1 July 2004. With the adoption of this accounting policy, the estimated liabilities for severance pay, long service pay and compensation in the Company have been recorded in the "Post-Employment Benefits Obligation" account previously in the "Estimated Obligation" account.

Based on management letter no. 015/02 / HRD-TPE / XI / 2003 dated November 3, 2003 concerning laying off employees and Directors Decree No. 0092 / DIR / TPE-Krw / III / 2004 dated March 29, 2004 concerning termination in mass employees of PT. Texmaco Perkasa Engineering Tbk, Karawang.

Page 43: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Report No. : LT/102/HPR-5/XI/2015 Page : 16

PT TEXMACO PERKASA ENGINEERING Tbk AND SUBSIDIARY COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2014 AND 2013

(Expressed in Rupiah, unless otherwise stated)

2. ACCOUNTING POLICIES (Continued)

n. Post-Employment Benefits Obligations (Continued) The decree was approved by the Indonesian Ministry of Manpower and Transmigration, Registrar's Office of the Central Dispute Settlement Committee Number: 1409/1278 / 255-8 / X / PHK / 8-2004 dated August 26, 2004 and Number: 2023/1848 / 110-8 / XI / PHK / 11-2004 dated 30 November 2004.

o. Income tax

The Company and subsidiary calculate income tax based on the Statement of Financial Accounting Standards (PSAK) No. 46, "Accounting for Income Tax".

Current tax expense is determined based on taxable income in the relevant period which is calculated based on the applicable tax rate.

Deferred tax assets and liabilities are recognized for future tax consequences arising from differences in the carrying amounts of assets and liabilities according to financial statements on the basis of the taxation of assets and liabilities. Deferred tax liabilities are recognized for all taxable temporary differences and deferred tax assets are recognized for deductible temporary differences. As long as it is possible to use it to reduce taxable income in the future. Deferred tax assets and liabilities are not recognized on the basis of temporary differences arising from goodwill (negative goodwill) or at the initial recognition of assets and liabilities of a transaction that is not a business combination and does not affect both accounting profit and fiscal profit.

Deferred tax is measured using tax rates that have been enacted or substantively enacted at the balance sheet date. Deferred tax is charged or credited in the income statement unless deferred tax is charged or credited directly to equity.

Deferred tax assets and liabilities are presented on the balance sheet on a compensation basis in accordance with the presentation of current tax assets and liabilities.

p. Earnings / Loss per Share

Basic earnings / loss per share is calculated by dividing residual net income / loss by the number of weighted average shares outstanding during the year.

Diluted earnings / loss per share are not presented because the Company does not issue potential dilutive ordinary shares.

q. Use of Estimates

The preparation of consolidated financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the amount of revenues and expenses during the reporting period. Actual results may differ from the estimated amount.

Page 44: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Report No. : LT/102/HPR-5/XI/2015 Page : 17

PT TEXMACO PERKASA ENGINEERING Tbk AND SUBSIDIARY COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2014 AND 2013

(Expressed in Rupiah, unless otherwise stated)

2. ACCOUNTING POLICIES (Continued)

r. Debt Restructuring

The impact of debt restructuring through modification of requirements without transferring assets or giving shares is recorded prospectively from the time the restructuring is carried out. Gain on debt restructuring is not recognized, except if the carrying amount of the debt (including interest and penalties) exceeds the amount of the principal and future cash payments specified in the new requirements, regardless of its cash value. Gain on debt restructuring, after calculating restructuring expenses and related income tax, is recognized in the income statement in the period of the restructuring and presented as extraordinary items.

s. Segment Information

Segment information of the Company and subsidiary is presented according to business segmentation.

A business segment is a distinguishable component and produces a product or service that is different according to the division of industry or a group of different products or services, especially for customers outside the Company's entity. For the time being. The company and subsidiary run one business segment, namely the production of textile machinery, heavy equipment, machine tools and automotive components

t. Impairment of Asset Value Statement of Financial Accounting Standards (PSAK) No. 48 concerning "Impairment of Assets" which requires management to determine the estimated amount of recoverable amount of an asset if there is an indication that the asset will potentially decrease in value. If the amount that can be recovered from an asset is less than its carrying value, management must recognize the impairment loss of the asset and be charged as a loss for the current year.

Page 45: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Report No. : LT / 102 / HPR-5 / XI / 2015

Page : 18

3. CASH AND CASH EQUIVALENTS

This account consists of:

2 0 1 4 2 0 1 3

Rp Rp

Cash

Rupiah 216.010.146 231.490.968

Foreign currency 69.691.654 86.028.982

Total Cash on Hand 285.701.800 317.519.950

Bank

Related parties

Rupiah

PT Bank Putera Multikarsa 1.534.015.502 1.534.015.502

United States Dollar

PT Bank Putera Multikarsa 1.434.943.855 1.434.943.855

Third parties

Rupiah

PT Bank Negara Indonesia (Persero) Tbk 181.104.107 535.627.941

PT Bank Central Asia Tbk 5.884.729 6.184.729

PT Bank Internasional Indonesia Tbk 4.393.353 4.393.353

PT Bank Sumitomo Niaga 95.537 95.537

PT Bank Mandiri - 290.464

PT Bank BSI 96.918.943 41.958.969

PT Bank BRI 10.521.853 23.455.834

Sub Total Bank Account Rupiah 298.918.522 612.006.827

United States Dollar

PT Bank Negara Indonesia (Persero) Tbk 29.935.589.139 29.927.527.494

PT Bank Internasional Indonesia Tbk 35.966.835 35.966.835

PT Bank Sumitomo Niaga 80.495.795 80.495.795

PT Bank Central Asia 4.490.680 4.863.880

Bank BSI 3.605.944 3.253.001

Sub Total Bank Account US Dollar 30.060.148.393 30.052.107.005

Total Cash in Bank Account 33.328.026.272 33.633.073.189

Time deposit

Related party

Rupiah

PT Bank Putera Multikarsa 100.000.000 100.000.000

33.713.728.072 34.050.593.139

Restricted Bank Account (Note 33) (3.068.959.357) (3.068.959.357)

Total Cash & Cash Equivalents Net 30.644.768.715 30.981.633.782

PT TEXMACO PERKASA ENGINEERING Tbk AND SUBSIDIARY COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(Expressed in Rupiah, unless otherwise stated)

(Continued)

The Indonesian government through the Indonesian Bank Restructuring Agency (IBRA) suspended of PT Bank Putera

Multikarsa operating license on January 28, 2000. As a result, cash balances at these banks were presented as part of bank

accounts that were restricted in their use of non-current assets.

Page 46: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Report No. : LT / 102 / HPR-5 / XI / 2015

Page : 19

3. CASH AND CASH EQUIVALENTS (continued)

4. TRADE ACCOUNTS RECEIVABLE

The number of accounts receivable based on customers is as follows:

2 0 1 4 2 0 1 3

Rp Rp

Related parties

PT Citra Indah Textile 6.007.001.807 6.007.001.807

PT Texmaco Taman Synthetics 4.341.726.188 4.341.726.188

PT Bima Peranan Busana 505.305.799 505.305.799

PT Devrindo Widya 120.708.761 120.708.761

PT Wastra Indah 8.235.053 8.235.053

PT Texmaco Jaya Tbk (Under Liquidation) 2.552.000 2.552.000

PT Saritex Jaya Swasti 2.070.775 2.070.775

Total (Notes 33) 10.987.600.382 10.987.600.382

Less allowance for doubtful accounts (8.153.383.174) (5.439.874.725)

Net amount 2.834.217.208 5.547.725.657

Details of the age of receivables calculated from the date of invoice are as follows:

2 0 1 4 2 0 1 3

Rp Rp

Up to 1 month - -

> 1 month - 3 months - -

> 3 months - 6 months - -

> 6 months - 1 year - -

> 1 year 10.987.600.382 10.987.600.382

Total 10.987.600.382 10.987.600.382

(Continued)

PT TEXMACO PERKASA ENGINEERING Tbk AND SUBSIDIARY COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(Expressed in Rupiah, unless otherwise stated)

As of December 31, 2014 and 2013, management made a policy of provision for used restricted bank accounts of 100%.

The balance of trade accounts receivable and trade payables to related parties as of December 31, 2014 and 2013 are

presented net (net off).

In 2014 and 2013, management made a policy to provide allowance for doubtful accounts for related party receivables that have

no transactions and experience financial difficulties due to declining business activities.

Page 47: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Report No. : LT / 102 / HPR-5 / XI / 2015

Page : 20

4. ACCOUNTS RECEIVABLE TRADE (continued)

Third parties

2 0 1 4 2 0 1 3

Rp Rp

Local 6.813.069.831 5.531.568.843

Export 32.960.186.877 21.385.058.130

39.773.256.708 26.916.626.973

Less allowance for doubtful accounts (1.318.134.117) (1.402.052.085)

Net amount 38.455.122.591 25.514.574.888

Details of the age of receivables calculated from the date of invoice are as follows:

2 0 1 4 2 0 1 3

Rp Rp

Up to 1 month 13.515.725.895 7.221.061.951

> 1 month - 3 months 17.470.550.178 10.917.812.712

> 3 months - 6 months - 5.811.761.359

> 6 months - 1 year 895.731.373 214.126.213

> 1 year 7.891.249.262 2.751.864.738

Total 39.773.256.708 26.916.626.973

The mutation in the allowance for doubtful accounts is as follows:

2 0 1 4 2 0 1 3

Rp Rp

Opening balance of the period 6.841.926.810 1.383.972.003

Changes during the current period

Addition / (recovery) net allowance 2.629.590.481 5.457.954.807

End of period balance 9.471.517.291 6.841.926.810

Management also believes that there is no risk that is significantly concentrated on receivables from third parties.

PT TEXMACO PERKASA ENGINEERING Tbk AND SUBSIDIARY COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(Expressed in Rupiah, unless otherwise stated)

Trade accounts receivable to third parties in foreign currencies amounted to US $ 2,649,532.71.- in 2014 and US $ 2,032,071. in

2013 (see Note 34).

The Company's management believes that the allowance for doubtful accounts is adequate to cover possible losses arising from

uncollectible receivables.

(Continued)

Page 48: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Report No. : LT / 102 / HPR-5 / XI / 2015

Page : 21

5. INVENTORIES

Inventories consists of:

2 0 1 4 2 0 1 3

Rp Rp

Goods in Transit 236.516.379.362 236.516.379.362

Goods in process 4.668.126.612 4.346.519.622

Raw materials (not including scrap supplies) 25.528.701.605 21.730.391.605

Auxliary Materials 5.019.180.162 5.340.766.857

Finished goods 4.929.261.183 4.226.507.707

total 276.661.648.924 272.160.565.153

Allowance for obsolescence (266.675.758.236) (266.675.758.236)

Net value 9.985.890.688 5.484.806.917

The mutation of the allowance for obsolete inventory is as follows:

2 0 1 4 2 0 1 3

Rp Rp

Initial balance of the period 266.675.758.236 266.675.758.236

Addition (recovery) of current year allowance - -

End of period balance 266.675.758.236 266.675.758.236

Scrap is the remaining raw material obtained during production that can still be used further

Raw materials in the trip are raw materials in the bonded area at the location of the company's factory.

.

6. ADVANCES

2 0 1 4 2 0 1 3

Rp Rp

Import 1.476.705.980 1.081.050.980

Local 534.414.641 534.414.641

2.011.120.621 1.615.465.621

Less allowance for advances (836.026.145) (844.822.785)

Total 1.175.094.476 770.642.836

Management makes a policy to make provision for obsolescence on the value of inventories that are more than 2 years,

between 25% to 100%.

Management believes that the allowance for obsolescence is sufficient to cover the possibility of a decrease in inventory value.

PT TEXMACO PERKASA ENGINEERING Tbk AND SUBSIDIARY COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(Expressed in Rupiah, unless otherwise stated)

As of December 31, 2014 and 2013 the Company did not insure inventories from possible losses from risks that might be

experienced by the Company.

This account represents advances for the purchase of raw materials, auxiliary materials and spare parts, with details as follows:

(Continued)

Page 49: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Report No. : LT / 102 / HPR-5 / XI / 2015

Page : 22

7. PREPAID TAXES

This account consists of:

2 0 1 4 2 0 1 3

Rp Rp

Income tax Article 28 A 708.133.942 708.133.942

Value Added Tax Compensated 2.588.147.988 2.734.026.243

Total 3.296.281.930 3.442.160.185

8. OTHER RECEIVABLES FROM RELATED PARTIES

This account consists of (see Note 33):

2 0 1 4 2 0 1 3

Rp Rp

PT Bridgeport Perkasa Machine Tools 20.892.751.289 20.812.592.300

PT Perkasa Indo Baja 16.224.578.177 14.905.884.555

PT Perkasa Indo Steel 7.678.187.029 7.678.187.029

PT Raja Busana Mahameru 3.201.103.177 3.201.103.177

PT Perkasa Heavyndo Engineering 188.560.614 372.388.714

Texmaco DPS International School 830.000.000 830.000.000

PT Texmaco Micro Indo Utama 870.173.937 870.173.937

PT Sarasa Daycrown Industry 46.905.930 46.905.930

PT Wahana Jaya Perkasa 29.734.995 29.734.995

PT Multikarsa Investama 89.146.501.429 75.644.331.348

Best & Crompton Engg. Ltd. India - 11.371.567.000

E-Tech Manufacturing - 110.400.000

Green Bridge International Pte, Ltd, Singapore - 7.803.725.000

PT Elok Prima Mitra Busana 1.260.000.000 1.260.000.000

Factory Systems Pte, Ltd. Singapore - 286.341.093

140.368.496.577 145.223.335.078

Less allowance for doubtful accounts (26.066.562.773) (21.464.581.731)

Net balance 114.301.933.804 123.758.753.347

Details of the age of other receivables are calculated from the date of the transaction as follows:

2 0 1 4 2 0 1 3

Rp Rp

Up to 1 month 1.242.267.062 14.629.200

> 1 month - 3 months 5.187.817.944 3.456.618.100

> 3 months - 6 months 5.731.144.518 18.988.534.390

> 6 months - 1 year 5.443.713.665 16.239.885.069

> 1 year 122.763.553.388 106.523.668.319

Total 140.368.496.577 145.223.335.078

(Expressed in Rupiah, unless otherwise stated)

PT TEXMACO PERKASA ENGINEERING Tbk AND SUBSIDIARY COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

AS OF DECEMBER 31, 2014 AND 2013

Page 50: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Report No. : LT / 102 / HPR-5 / XI / 2015

Page : 23

8. OTHER RECEIVABLES FROM RELATED PARTIES (continued)

9. INVESTMENT IN ASSOCIATED COMPANY

. before

capital change

Rp

Company ownership of PHE 500.000.000.000

Other paid-up capital until December 31, 2001 1.410.150.819.330

Difference in restructuring transaction between entities under common control (1.536.721.479)

Cost of acquisition 1.908.614.097.851

Part of accumulated losses up to 2001 (720.867.047.239)

1.187.747.050.612

Loss of PHE until September 2002 (254.493.144.964)

933.253.905.648

Loss of PHE until 2003 -

Company ownership of PHE before capital changes 933.253.905.648

This account is a loan given to related parties. The loan provided is not subject to interest, collateral and the date of repayment

has not been determined.

The balance of other receivables and other payables from related parties as of December 31, 2014 and 2013 are presented net

(net off).

PT TEXMACO PERKASA ENGINEERING Tbk AND SUBSIDIARY COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

AS OF DECEMBER 31, 2014 AND 2013

(Expressed in Rupiah, unless otherwise stated)

Based on the debt restructuring agreement between the Company and PT Jaya Perkasa Engineering which was notarized by

the notary deed of Dr. H. Anwar Anwar, SH, SpN, a substantial percentage of equity has been decreased in PT Perkasa

Heavyndo Engineering (PHE) from 99.99% to 10%. The restructuring agreement was ratified at the Extraordinary General

Meeting of Shareholders of PT Texmaco Perkasa Engeneering on December 27, 2002, which was confirmed by Notary Sutjipto,

SH No. 91 December 27, 2002. The initial investment value of Rp 1,187,747,050,612 was the company's investment book value

as of December 31, 2001 before consolidation, the difference in value change resulting from changes in equity value of Rp

975,360,192,203 was recorded in the financial statements as difference in value changes in equity transactions of PT Perkasa

Heavyndo Engineering - a Subsidiary and in 2004 are presented net off with stock investments, calculations as follows:

In 2014 and 2013, management made a policy to provide allowance for doubtful accounts for related party receivables that have

no transactions and experience financial difficulties due to declining business activities.

This account represents investments in associated companies with the cost method as of December 31, 2014 and 2013 as

follows:

In 2013 the Company reduced its investment value to nil, because financial statements of PT Perkasa Heavyndo Engineering

(unaudited) experienced a deficiency of equity.

Share ownership in associates in 2014 and 2013 was a net off of changes in equity of 2002 subsidiaries from ownership of

99.99% to 10%.

Page 51: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Report No. : LT / 102 / HPR-5 / XI / 2015

Page : 24

9. INVESTMENT IN ASSOCIATED COMPANY (Continued)

After

capital change

Rp

Company ownership of PHE prior to additional paid-in capital 933.253.905.648 -

Difference in value of transaction changes in equity of a Subsidiary from 99.99% to 100% 975.360.192.203 -

Price of acquisition of investment as at 31 December 2003 1.908.614.097.851

Reclassification with the balance of the difference in transactions of changes in equity of subsidiaries (975.360.192.203) -

933.253.905.648

Decrease in investment value because the associated companies experience equity deficiency (933.253.905.648)

Stock Investment Balance Nihil

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

PT TEXMACO PERKASA ENGINEERING Tbk AND SUBSIDIARY COMPANY

Based on the Shareholders' Decree as stated in deed number 149 dated March 23, 2000, made by Haji Muhammad Afdal

Gazali, SH Notary in Jakarta, PT Wahana Komponindo Perkasa domiciled in Jakarta has been dissolved and PT

PricewaterhouseCoopers FAS has been appointed as its liquidator. Profit and loss on the liquidation of the associated company

is recognized when all receipts have been realized from the proceeds of liquidation. Based on the resolution of the shareholders

of PT Wahana Komponindo Perkasa dated July 8, 2002 it was stated that the remaining assets of PT Wahana Komponindo

Perkasa amounted to Rp. 144,617,666 which was prepaid taxes VAT- input. PT PricewaterhouseCoopers FAS is processing the

disbursement of the balance, after deducting related costs such as a notary, consultant and other remaining funds will be

transferred to the account of each shareholder according to the portion. Based on the above, the investment balance of PT

Wahana Komponindo Perkasa was stated at Rp. Nil at the end of 2003. Until the completion of the 2014 audit the process was

not yet completed.

AS OF DECEMBER 31, 2014 AND 2013

(Expressed in Rupiah, unless otherwise stated)

(Continued)

Page 52: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Report No. : LT / 102 / HPR-5 / XI / 2015

Page : 25

10. FIXED ASSETS

Y e a r 2 0 1 4

Opening Addition Disposal Reclasification Closing

Rp Rp Rp Rp Rp

ACQUISITION COST

DIRECT OWNERSHIP

Land 18.794.384.995 - - - 18.794.384.995

Building and infrastructure 77.195.148.846 - - - 77.195.148.846

Machinery and equipment 609.959.034.110 787.378.887 - - 610.746.412.997

Motor vehicle 589.398.530 - - - 589.398.530

Office equipment 1.651.734.848 25.162.518 - - 1.676.897.366 -

Total acquisition Cost 708.189.701.329 812.541.405 - - 709.002.242.734

ACCUMULATED DEPRECIATION

DIRECT OWNERSHIP

Building and infrastructure 50.112.124.046 3.069.331.761 - - 53.181.455.807

Machinery and equipment 372.264.908.318 592.541.522 - - 372.857.449.840

Motor vehicle 458.728.905 46.118.691 - - 504.847.596

Office equipment 1.493.398.752 50.197.398 - - 1.543.596.150

Total accumulated depreciation 424.329.160.021 3.758.189.372 - - 428.087.349.393

Book value 283.860.541.308 280.914.893.341

Y e a r 2 0 1 3

Opening Addition Disposal Reclasification Closing

Rp Rp Rp Rp Rp

ACQUISITION COST

DIRECT OWNERSHIP

Land 18.794.384.995 - - - 18.794.384.995

Building and infrastructure 77.195.148.846 - - - 77.195.148.846

Machinery and equipment 609.315.248.465 643.785.645 - - 609.959.034.110

Motor vehicle 589.398.530 - - - 589.398.530

Office equipment 1.565.648.660 86.086.188 - - 1.651.734.848 -

Total acquisition Cost 707.459.829.496 729.871.833 - - 708.189.701.329

ACCUMULATED DEPRECIATION

DIRECT OWNERSHIP

Building and infrastructure 46.576.670.808 3.535.453.238 - - 50.112.124.046

Machinery and equipment 371.645.258.956 619.649.362 - - 372.264.908.318

Motor vehicle 383.277.603 75.451.302 - - 458.728.905

Office equipment 1.450.079.539 43.319.213 - - 1.493.398.752 -

Total accumulated depreciation 420.055.286.906 4.273.873.115 - - 424.329.160.021

Book value 287.404.542.590 283.860.541.308

(Continued)

PT TEXMACO PERKASA ENGINEERING Tbk AND SUBSIDIARY COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(Expressed in Rupiah, unless otherwise stated)

Page 53: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Report No. : LT / 102 / HPR-5 / XI / 2015

Page : 26

10. FIXED ASSETS (Continued)

Depreciation expenses are allocated as follows:

2 0 1 4 2013

Rp Rp

Direct ownership

Manufacturing costs 3.661.873.283 4.155.102.600

Operating expenses 96.316.089 118.770.515

Total 3.758.189.372 4.273.873.115

AS OF DECEMBER 31, 2014 AND 2013

(Expressed in Rupiah, unless otherwise stated)

(Continued)

Building & infrastructure assets and machinery & equipment in unit's Kerawang from 2004 to 2010 were recorded on other assets because

there was no production and were not depreciated, so the depreciation expense was Rp 250,061,857,620 - not booked and starting in

2011 these assets are returned to productive assets and depreciated.

The company has not calculated the impact of the decline in the value of fixed assets due to the cessation of operations at the Karawang

plant and most of them at the Kaliwungu plant. Based on the results of a review of the status of the accounts of each type of fixed assets at

the end of 2014 and 2013, the Company's Management believes that there was no impairment in the value of the Company's fixed assets

for the years ended 31 December 2014 and 2013.

The company has several plots of land located in Karawang and Kendal with legal rights are in the form of Building Usage Rights (HGB)

with a term of 20 years which will expired within 2007 to 2027. Management believes that there are no problems with the extension of land

rights because all land is legally acquired and supported by sufficient evidence of ownership.

As of December 31, 2014 and 2013 the Company did not insure property, plant and equipment direct ownership of possible fire losses and

other risks.

PT TEXMACO PERKASA ENGINEERING Tbk AND SUBSIDIARY COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Page 54: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Report No. : LT / 102 / HPR-5 / XI / 2015

Page : 27

11. OTHER ASSETS NET

Net balance of non-productive fixed assets up to 2003 as of December 31, 2014 and 2013 are as follows:

2 0 1 4 Opening Addition Disposal Reclasification Close

Rp Rp Rp Rp Rp

ACQUISITION COST

DIRECT OWNERSHIP

Motor vehicle 260.331.616 - - - 260.331.616

Office equipment 2.955.517.453 - - - 2.955.517.453

3.215.849.069 - - - 3.215.849.069

FINANCING RETAIL ASSETS

Machinery and equipment 1.555.174.015 - - - 1.555.174.015

Motor vehicle 1.630.201.900 - - - 1.630.201.900

Office equipment 799.979.544 - - - 799.979.544

3.985.355.459 - - - 3.985.355.459

Total 7.201.204.528 7.201.204.528

ACCUMULATED DEPRECIATION

DIRECT OWNERSHIP

Motor vehicle 260.331.616 - - - 260.331.616

Office equipment 2.654.238.530 301.278.923 - - 2.955.517.453

2.914.570.146 301.278.923 - - 3.215.849.069

FINANCING RETAIL ASSETS

Machinery and equipment 1.196.086.254 359.087.761 - - 1.555.174.015

Motor vehicle 1.581.347.733 48.854.167 - - 1.630.201.900

Office equipment 799.979.544 - - - 799.979.544

3.577.413.531 407.941.928 - - 3.985.355.459

Total 6.491.983.677 709.220.851 - - 7.201.204.528

Book value 709.220.851 -

PT TEXMACO PERKASA ENGINEERING Tbk AND SUBSIDIARY COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(Expressed in Rupiah, unless otherwise stated)

(Continued)

Page 55: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Report No. : LT / 102 / HPR-5 / XI / 2015

Page : 28

11. OTHER ASSETS NET (continued)

2 0 1 3 Opening Addition Disposal Reclasification Close

Rp Rp Rp Rp Rp

ACQUISITION COST

DIRECT OWNERSHIP

Motor vehicle 260.331.616 - - - 260.331.616

Office equipment 2.955.517.453 - - - 2.955.517.453

3.215.849.069 - - - 3.215.849.069

FINANCING RETAIL ASSETS

Machinery and equipment 1.555.174.015 - - - 1.555.174.015

Motor vehicle 1.630.201.900 - - - 1.630.201.900

Office equipment 799.979.544 - - - 799.979.544

3.985.355.459 - - - 3.985.355.459

Total 7.201.204.528 7.201.204.528

ACCUMULATED DEPRECIATION

DIRECT OWNERSHIP

Motor vehicle 260.331.616 - - - 260.331.616

Office equipment 2.654.238.530 - - - 2.654.238.530

2.914.570.146 - - - 2.914.570.146

FINANCING RETAIL ASSETS

Machinery and equipment 1.196.086.254 - - - 1.196.086.254

Motor vehicle 1.581.347.733 - - - 1.581.347.733

Office equipment 799.979.544 - - - 799.979.544

3.577.413.531 - - - 3.577.413.531

Total 6.491.983.677 - - - 6.491.983.677

Book value 709.220.851 709.220.851

Based on Management letter no. 015/02 / HRD-TPE / XI / 2003 dated November 3, 2003 concerning lay off and letter of Directors No.

0092 / DIR / TPE-Krw / III / 2004 dated March 29, 2004 concerning mass employment termination of PT Texmaco Perkasa Engineering

Karawang, the Company stopped its commercial operations for PT. Texmaco Perkasa Engineering Karawang, so that the fixed assets of

the Company were not operated and not depreciated , and recorded on other asset accounts (net).

(Continued)

PT TEXMACO PERKASA ENGINEERING Tbk AND SUBSIDIARY COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(Expressed in Rupiah, unless otherwise stated)

Page 56: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Report No. : LT / 102 / HPR-5 / XI / 2015

Page : 29

12. BANK LOANS

The details of bank loans as at 31 December 2014 and 2013 are as follows:

2 0 1 4 2 0 1 3

Rp Rp

L / C facilities

PT Bank Sumitomo Niaga US$ 1.771.048 22.031.837.120 21.587.304.072

Deutsche Bank US$ 373.000 4.640.120.000 4.546.497.000

Total 26.671.957.120 26.133.801.072

Interest rates during the year:

Rupiah 18% 18%

United States Dollar 10 – 10,5 % 10 – 10,5 %

13. NOTES PAYABLE

2 0 1 4 2 0 1 3

Rp Rp

Third parties

Rupiah

PT Asia Kapitalindo Sekuritas 1.500.000.000 1.500.000.000

United States Dollar

Trustee - BT US$ 4,500,000 55.980.000.000 54.850.500.000

Sanwa Bank US$ 3,000,000 37.320.000.000 36.567.000.000

SK Keris US$ 5,680,000 70.659.200.000 69.233.520.000

Total 165.459.200.000 162.151.020.000

PT TEXMACO PERKASA ENGINEERING Tbk AND SUBSIDIARY COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(Expressed in Rupiah, unless otherwise stated)

(Continued)

This account represents short-term and medium-term notes payable in Rupiah and US Dollar with the following details:

The company has failed to pay the above notes and interest notes of US $ 28,286,857.25 and Rp 5,709,750,000.- in 2014

and US $ 27,299,812.62 and Rp 5,439,750,000 in 2013.

Based on the debt settlement agreement no. 11 dated April 14, 2000, between the Company and SK Keris as one of the

arranger of the notes payable, the Company is obliged to repay the principal debt plus interest as the principle in 2 (two)

installments namely 50% paid on December 31, 2004 and the remainder as of December 31, 2005 with an interest rate of

2% above LIBOR.

This loan is a Letter of Credit facility from Bank Sumitomo Niaga amounting to US $ 1,771,048 which matured in 1998 and

from Deutsche Bank amounting to US $ 373,000 which has matured in 2000. The company has failed to pay the principal

and interest on the facility from Bank- the banks were US $ 4,642,862.40 and US $ 921,310.- in 2014 and US $

4,456,902.36 and US $ 882.145.- in 2013.

The restructuring scheme that was made in 2002 through the Jakarta Initiative has yet to be realized and at present the

Company intends to restart the process of direct negotiations with creditors over the outstanding loans of PT Bank

Sumitomo Niaga and Deutsche Bank (Note 35b). Therefore, interest costs amounted to US $ 2,871,814.40.- and US $

548,310.- for the year 2014 and US $ 2,685,854.36 and US $ 509,145.- for the year 2013 that was not recorded.

Page 57: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Report No. : LT / 102 / HPR-5 / XI / 2015

Page : 30

13. NOTES PAYABLE (Continued)

14. ACCOUNTS PAYABLE TRADE

2 0 1 4 2 0 1 3

Rp Rp

Third parties

Domestic suppliers 6.823.023.987 4.754.386.702

Overseas suppliers 27.215.068.712 23.537.144.338

34.038.092.699 28.291.531.040

Related parties

PT Wahana Perkasa Auto Jaya 8.622.876.868 8.622.876.868

PT Wisma Karya Prasetya (Under Liquidation) 2.956.459.690 2.956.459.690

PT Texmaco Micro Indo Utama 415.981.022 415.981.022

PT Asia Pacific Fibers Tbk (PT Polysindo Eka Perkasa Tbk) 8.134.500 8.134.500

PT Bridgeport Perkasa Machine Tools 1.043.719.427 1.043.719.427

PT Perkasa Indobaja 274.193.711 118.795.699

PT Perkasa Heavyndo Engineering 504.198.999 659.597.011

(Notes 33) 13.825.564.217 13.825.564.217

Total 47.863.656.916 42.117.095.257

Details of debt age calculated from the date of the transaction are as follows:

2 0 1 4 2 0 1 3

Rp Rp

Up to 1 month 463.227.602 502.496.132

> 1 month - 3 months 165.087.458 -

> 3 months - 6 months - -

> 6 months - 1 year - -

> 1 year 47.235.341.856 41.614.599.125

Total 47.863.656.916 42.117.095.257

The restructuring scheme that was made in 2002 through the Jakarta Initiative has yet to be realized and at present the

Company intends to restart the direct negotiation process with creditors on the balance of PT Asia Kapitalindo Securitas,

Trustee - BT, Sanwa Bank and SK Keris notes payable (Note 35b) . Therefore, interest costs from 2003 to 2014

amounted to US $ 15,106,857.25 and Rp 4,209,750,000, and interest costs from 2003 to 2013 amounted to US $

14,119,812.62, and Rp. 3,939,750,000, - which occurred not recorded.

This account consists of obligations to suppliers arising from the purchase of raw materials, service materials with a

payment period of 90 days. The details of this account are as follows:

PT TEXMACO PERKASA ENGINEERING Tbk AND SUBSIDIARY COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(Expressed in Rupiah, unless otherwise stated)

(Continued)

Page 58: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Report No. : LT / 102 / HPR-5 / XI / 2015

Page : 31

14. ACCOUNTS PAYABLE TRADE (Continued)

Details of trade payables by currency are as follows:

2 0 1 4 2 0 1 3

Rp Rp

Third parties RP 6.823.023.987 4.754.386.702

US$ 27.215.068.712 23.537.144.338

34.038.092.699 28.291.531.040

Related parties RP 13.825.564.217 13.825.564.217

Total 47.863.656.916 42.117.095.257

15. OTHER PAYABLES

This account consists of:

2 0 1 4 2 0 1 3

Rp Rp

Customer advances 2.115.326.104 2.117.528.491

Other clearance 4.296.202.578 5.215.985.264

Total 6.411.528.682 7.333.513.755

16. TAXES PAYABLE

2 0 1 4 2 0 1 3

Rp Rp

Income tax (article 21) 422.895.492 398.321.741

Income tax (article 23) 1.233.529.958 1.215.495.132

Value-added tax 2.002.137.558 1.985.281.168

Land and building taxes 6.006.231.334 5.788.351.664

Tax penalties and taxes interest / (article 25/29) 17.734.469 -

Total 9.682.528.811 9.387.449.705

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(Expressed in Rupiah, unless otherwise stated)

(Continued)

PT TEXMACO PERKASA ENGINEERING Tbk AND SUBSIDIARY COMPANY

Page 59: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Report No. : LT / 102 / HPR-5 / XI / 2015

Page : 32

17. ACCRUED EXPENSES

Consists of :

2 0 1 4 2 0 1 3

Rp Rp

Customs 4.891.255.120 5.072.476.880

Cooperative 4.497.338.478 4.496.867.766

Insurance 1.970.048.177 1.970.048.177

Bapepam & LK 1.368.942.000 1.368.942.000

Astek 525.564.957 521.193.286

Professional services 520.750.000 425.750.000

Others 939.252.005 939.252.005

Total 14.713.150.737 14.794.530.114

18. INTEREST PAYABLE

Consists of :

2 0 1 4 2 0 1 3

Rp Rp

Short term debt interest

PT Jaya Perkasa Engineering

Debt Tranche 1 US$ 502,737.66 6.254.056.490 6.127.869.338

FRN Holder US$ 3,962,083.00 49.288.312.520 48.293.829.687

Bank Permata (previously Bank Universal) 7.766.666.667 7.166.666.667

SK Keris US$ 1,450,247.24 18.041.075.666 17.677.063.608

Interest Payable for Notes Payable 60.000.000 60.000.000

Sub Total 81.410.111.343 79.325.429.300

Long-term debt interest

PT Jaya Perkasa Engineering

Debt Tranche 2 US$ 1,508,212.86 18.762.167.978 18.383.606.551

Debt Tranche 3 US$ 250,734.78 3.119.140.663 3.056.206.233

Sub Total 21.881.308.641 21.439.812.784

Total 103.291.419.984 100.765.242.084

PT TEXMACO PERKASA ENGINEERING Tbk AND SUBSIDIARY COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(Expressed in Rupiah, unless otherwise stated)

(Continued)

Page 60: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Report No. : LT / 102 / HPR-5 / XI / 2015

Page : 33

19. LEASE DEBT

Consists of :

Finance Leasing Company Type of Assets 2014 2013

PT Orix Indonesia Finance US$ 362,414.83 Factory Machines 4.508.440.485 4.417.474.363

US$ 144,347.31 Office equipment 1.795.680.536 1.759.449.362

PT Efficorp Securitas Vehicle 481.048.089 481.048.089

Total 6.785.169.110 6.657.971.813

Payments due in year

2000 2.808.763.279 2.759.560.730

2001 3.567.873.073 3.498.595.042

2002 1.306.661.819 1.283.382.328

2003 79.725.351 79.725.351

The minimum payment amount for a finance lease 7.763.023.522 7.621.263.451

Less interest (977.854.412) (963.291.638)

Leases Debt Net 6.785.169.110 6.657.971.813

Minimum lease

Payment Interest rate Due date Interest rate Due date

USD 144.347,31 SIBOR + 2,25 % Agustus 1999 SIBOR + 2,75 % Desember 2002

USD 231.867,36 SIBOR + 2,25 % April 2001 SIBOR + 2,75 % Desember 2002

USD 130.547,47 SIBOR + 2,25 % J u n i 2001 SIBOR + 2,75 % Desember 2001

The obligation for finance leases is guaranteed by the finance lease assets in question. This finance lease agreement

limits the Company, among others, in selling and transferring finance leasing assets.

Future minimum lease payment in the finance lease agreement as of December 31, 2014 and 2013 after the restructuring

is as follows:

The restructuring scheme that was made in 2002 through the Jakarta Initiative has yet to be realized and at present the

Company intends to restart the process of direct negotiations with creditors over the balance of the debt financing leases

of PT Orix Indonesia Finance and PT Efficorp Securitas (Note 35b). In 2014 and 2013, the Company failed to pay the

principal and interest on the finance leases of PT Orix Indonesia Finance and PT Efficorp Sekuritas amounting to US $

564,781.16 and Rp 737,145,892. Therefore, interest costs of US $ 58,019.02 and Rp. 256,097,703 which occurred until

2002 as of December 31, 2014 and 2013 were not recorded.

In 1999, management reached an agreement with PT Orix Indonesia Finance to restructure all of its debts. The following

is an explanation of the principal of the finance lease agreement before and after the restructuring.

Before restructuring After restructuring

PT TEXMACO PERKASA ENGINEERING Tbk AND SUBSIDIARY COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(Expressed in Rupiah, unless otherwise stated)

(Continued)

Page 61: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Report No. : LT / 102 / HPR-5 / XI / 2015

Page : 34

20. LONG-TERM LOANS CURRENT PORTION

Consists of :

2 0 1 4 2 0 1 3

Rp Rp

Related parties

PT Jaya Perkasa Engineering

Debt Tranche 1 US$ 14,363,932.20 178.687.316.568 175.081.969.586

Debt Tranche 2 US$ 43,091,796.59 536.061.949.580 525.245.908.636

Debt Tranche 3 US$ 7,163,851.03 89.118.306.813 87.320.180.205

803.867.572.961 787.648.058.427

One-year maturity of US $ 64,619,579.82 803.867.572.961 787.648.058.427

Related parties long-term loans - -

Bank loans that are not transferred to IBRA

Third parties

Rupiah

PT Bank Permata (previously PT Bank Universal Tbk) 30.000.000.000 30.000.000.000

Letter of Credit Facilities

United States Dollar

Mizuho (ex Liability L/C PT Bank

Societe Generale) JPY ¥ 33,588,128 121.202.198.480 118.756.720.038

Japan Yen

Mizuho (ex hutang L/C PT Bank

Societe Generale) JPY ¥ 33,588,128 3.501.522.038 3.901.892.524

154.703.720.518 152.658.612.562

Due in one year 30.000.000.000 30.000.000.000

Long-term bank loans are not transferred to IBRA 124.703.720.518 122.658.612.562

Long-term loans - Net 124.703.720.518 122.658.612.562

Loans restructured by IBRA

The MRA is the implementation of the Texmaco Group debt restructuring pattern as a whole based on the approval of the

Financial Sector Policy Committee ("KKSK") No Kep.03 / KKSK / 10/2000, dated October 2, 2000, No. Kep.01 / K.KKSK /

03/2001, March 20, 2001 and No. Kep.01 / K.KKSK / 04/2001 dated April 11, 2001.

Based on the "Memorandum of Understanding on the Agreement on the Basic Principles for the Restructuring of

Texmaco" (MOU) which was notarized by Notary Bambang Sularso, SH No. 15 September 29, 2000, Marimutu Sinivasan

who directly and / or indirectly controlled and / or owned a majority stake in the Company and its subsidiaries, and IBRA

approved the restructuring model for the obligations of Texmaco (Texmaco) business groups, including the obligations of

the Company and subsidiaries to IBRA (Note 35b).

The MOU dated September 29, 2000 was replaced by the Master Restructuring Agreement (MRA) for Texmaco Group

dated May 23, 2001 by Notary Olvia Afianty SH, which was subsequently amended by First Amendment MRA No. 5 dated

September 21, 2001 and was last amended by Second Amendment MRA No. 12 dated January 18, 2002, whose

contents, among others, extended the period of completion of Precedent Conditions to 360 days, namely until May 22,

2002.

PT TEXMACO PERKASA ENGINEERING Tbk AND SUBSIDIARY COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(Expressed in Rupiah, unless otherwise stated)

(Continued)

Page 62: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Report No. : LT / 102 / HPR-5 / XI / 2015

Page : 35

20. LONG-TERM LOANS CURRENT PORTION (Continued)

Long term loan principal

The loan principal is in accordance with the restructuring US$ 169,688,802.82 1.628.164.074.380

Less:

Debt converted to additional paid-in capital

PT Jaya Perkasa Engineering US$ 105,069,223.00 1.008.139.194.685

US$ 64,619,579.82 620.024.879.695

Exchange rate difference 42.325.834.495

Loans are restructured into long-term loans US$ 64,619,579.82 577.699.045.200

(Continued)

Information regarding the payment of principal Long Term Loan to PT Jaya Perkasa Engineering is as follows:

The debt restructuring pattern contained in the MRA is basically debt The companies in Texmaco Group are transferred

based on the debt restructuring program with the Indonesian Bank Restructuring Agency (IBRA) to 2 (two) holding

companies that have been formed, namely PT Jaya Perkasa Engineering , for companies engaged in the Engineering

industry and PT Bina Prima Perdana, for companies engaged in the textile industry.

Based on the notary deed Dr. H Teddy Anwar SH, Spn, No. 86 September 20, 2002 concerning PT Texmaco Perkasa

Engineering Tbk's debt restructuring to PT Jaya Perkasa Engineering which was attended by Marimutu Sinivasan as

President Director of PT Texmaco Perkasa Engineering Tbk, Alfred Ferdinand Imanuel Inkiriwang as President Director of

PT Jaya Perkasa Engineering and Adang Ruchiatna P, representing Kiagooshusoiny GA as commissioner of PT Jaya

Perkasa Engineering has reached an agreement to restructure all of its debts through the signing of the Restructuring

Agreement as follows:

Based on the loan restructuring agreement with PT Jaya Perkasa Engineering, the Company's total debt approved for

restructuring amounted to US $ 54,734,744.80 and Rp 1,102,984,193,596, which was equivalent to US $ 169,688,802.82.

From the total debt amounting to US $ 33,033,682.92 and Rp 691,181,014,141 equivalent to US $ 105,069,223 converted

into the Company's investment, the remaining US $ 64,619,579.82 was restructured into a long-term loan.

AND SUBSIDIARY COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(Expressed in Rupiah, unless otherwise stated)

PT TEXMACO PERKASA ENGINEERING Tbk

Page 63: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Report No. : LT / 102 / HPR-5 / XI / 2015

Page : 36

20. LONG-TERM LOANS CURRENT PORTION (Continued)

Loans restructured by IBRA (continued)

a. Payment of loan principal

Debt Tranche Debt Tranche Debt Tranche Due date

1 2 3

(US $) (US $) (US $)

3.590.983,05 4.309.179,66 716.385,10 31 Desember 2006

3.590.983,05 4.309.179,66 716.385,10 31 Desember 2007

3.590.983,05 6.463.769,49 1.074.577,65 31 Desember 2008

3.590.983,05 8.618.359,32 1.432.770,21 31 Desember 2009

- 10.772.949,14 1.790.962,76 31 Desember 2010

- 8.618.359,32 1.432.770,21 31 Desember 2011

Total 14.363.932,20 43.091.796,59 7.163.851,03

b. Interest rate

Loans in currency Interest rate

United States Dollar

Debt Tranche 1 1 % – 3,5 % Period every 6 (six) months between June 30, 2001 -

30-Jun-03

SIBOR + 1 % Period every 6 (six) months between December 1, 2003 -

31-Des-09

SIBOR + 1 % Period every 6 (six) months between June 30, 2010 -

31-Des-11

Debt Tranche 2 1 % – 3,5 % Period every 6 (six) months between June 30, 2001 -

30-Jun-03

SIBOR + 3 % Period every 6 (six) months between 31 December 2003 -

31-Des-09

SIBOR + 3 % Period every 6 (six) months between June 30, 2010 -

31-Des-11

Debt Tranche 3 1 % – 3,5 % Period every 6 (six) months between June 30, 2001 -

30-Jun-03

SIBOR + 1 % Period every 6 (six) months between 31 December 2003 -

31-Des-09

SIBOR + 1 % Period every 6 (six) months between June 30, 2010 -

31-Des-11

(Expressed in Rupiah, unless otherwise stated)

(Continued)

PT Jaya Perkasa Engineering

Period

Under the Restructuring Agreement No. 56 dated September 20, 2002, the Company recalculated the interest and

principal outstanding. The loan principal and interest from the amount recalculated with the interest reserved in the

December 31, 2002 financial statements amounting to Rp 285,033,325,681, were charged to extraordinary items in the

2002 income statement.

PT TEXMACO PERKASA ENGINEERING Tbk AND SUBSIDIARY COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

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Report No. : LT / 102 / HPR-5 / XI / 2015

Page : 37

20. LONG-TERM LOANS (Continued)

Loans restructured by IBRA (continued)

Bank loans that are not transferred to IBRA

PT Bank Permata (formerly PT Bank Universal, Tbk)

Mizuho International Plc

PT TEXMACO PERKASA ENGINEERING Tbk AND SUBSIDIARY COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(Expressed in Rupiah, unless otherwise stated)

(Continued)

On September 27, 2002, the Company entered into an agreement with PT Bank Societe Generale Indonesia and Mizuho

International Plc to transfer US $ 9,742,942 and ¥ 33,588,128 letter of credit facilities from PT Bank Societe Generale

which were due in 1998 to Mizuho International Plc. The company has failed to pay the principal and interest on the facility

amounting to US $ 14,964,364 and ¥ 43,684,460 to 2003. From 2004 to 2014 interest fees were not calculated and not

recorded.

The restructuring scheme that was made in 2002 through the Jakarta Initiative cannot yet be realized and at present the

Company intends to restart the process of direct negotiations with creditors over the balance of long-term loans of PT

Bank Permata and Mizuho International Plc (Note 35b). Therefore, interest on the balance of Mizuho International Plc's

long-term loans amounting to US $ 5,221,422 and ¥ 10,096,332 which occurred until 2002 is not recorded. From 2003 to

2014, interest costs were not calculated and not recorded.

The Indonesian Bank Restructuring Agency (IBRA) issued a statement of negligence (Default Notice) No. Prog-2244 /

BPPN / 0204 dated 26 February 2004 addressed to PT Jaya Perkasa Engineering. In the letter it was stated that PT Jaya

Perkasa Engineering, which was the holding company of engineering, had failed to pay the Exchangeable Bond (EB)

coupons issued to IBRA due on August 18, 2003.

As stated in the default notification letter, if until after 21 days after the letter is received, the payment has not been carried

out, then all provisions in the "Amendment and Restated Exchangeable Bond Subscription Agreement (AREBSA)"

agreement made between PT Jaya Perkasa Engineering (JPE) with IBRA declared to be over, IBRA and / or the

successor of IBRA can collect all the obligations of the holding company at once, including but not limited to implementing

the exchange option for PT Jaya Perkasa Engineering (JPE) assets in the form of all claims against PT Subsidiaries Jaya

Perkasa Engineering (JPE). All obligations including coupons must be paid 30 days after 21 days have passed. Until the

completion of the examination, IBRA has not implemented further action.

Until now, all debts transferred to PT Jaya Perkasa Engineering (JPE) have been handled by the IBRA Settlement Team.

The IBRA Settlement Team is still in the process of identifying loans to be transferred to PT Perusahaan Pengelola Asset

(PT PPA). (Note 35b).

Since the restructuring in 2002, the Company has not reserved interest based on loan restructuring agreements

transferred to PT Jaya Perkasa Engineering as of December 31, 2014 and 2013 amounting to US $ 34,866,112.84 and

US $ 33,060,831.04.

Based on the settlement agreement between the Company and Bank Permata (formerly Bank Universal) for a loan of Rp

30,000,000,000 guaranteed by personal guarantees from Marimutu Sinivasan, the Company's shares and PT Asia Pacific

Fibers Tbk (formerly PT Polysindo Eka Perkasa Tbk). The company must repay the loan on December 1, 2006 with an

interest rate of 2% per year.

Page 65: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Report No. : LT / 102 / HPR-5 / XI / 2015

Page : 38

21. NOTES PAYABLE LONG TERM

Consists of :

2 0 1 4 2 0 1 3

Rp Rp

United States Dollar

Note payable to Syndicate Co-ordinated- BD 1.244.000.000.000 1.218.900.000.000

Sumitomo Finance (Asia) Limited US $ 100,000,000 1.244.000.000.000 1.218.900.000.000

Rupiah

PT Efficorp Sekuritas 36.500.000.000 36.500.000.000

PT Asuransi Prima Perkasa Indonesia 10.000.000.000 10.000.000.000

(Notes 33) 46.500.000.000 46.500.000.000

1.290.500.000.000 1.265.400.000.000

Deferred loan issuance expenses - -

1.290.500.000.000 1.265.400.000.000

Less short-term notes are net after

deferred loan emissions - -

Total 1.290.500.000.000 1.265.400.000.000

PT TEXMACO PERKASA ENGINEERING Tbk

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(Expressed in Rupiah, unless otherwise stated)

(Continued)

AND SUBSIDIARY COMPANY

In May 1997, a subsidiary, TPE BV with the Company as a guarantor, issued a long-term notes payable of US $

100,000,000 coordinated by Sumitomo Finance (Asia) Limited, with an interest rate of 3% above six-month LIBOR for

deposits in US Dollars Union. These notes will mature on May 30, 2002. The notes payable are secured by the

Company's movable (other than inventory) and immovable assets located in Karawang on a pari-passu basis (Notes 4

and 10).

The loan agreement mentioned above includes certain requirements that cancel the Company to add debt to increase

liens for its assets, make payments or distribution to shareholders exceeding 40% of current year's net income, sell assets

or shares, make certain transactions with related parties, release subsidiaries, merge business and others. The

agreement also included conditions of default (default), risks of breach of agreement and insolvency conditions. Failure to

pay interest at maturity is also categorized as a default condition.

The restructuring scheme that was made in 2002 through the Jakarta Initiative has yet to be realized and at present the

Company intends to restart the negotiation process directly with creditors over the balance of syndicated notes payable

coordinated by Sumitomo Finance (Asia) Limited (Note 35b)

In 2014 and 2013, TPE BV was unable to make unpaid interest payments due on this notes amounting to US $

96,770,157 and US $ 93,502,812. US $ 92,808,074.- and US $ 89,540,729.-.

Page 66: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Report No. : LT / 102 / HPR-5 / XI / 2015

Page : 39

21. NOTES PAYABLE LONG TERM (Continued)

Until the completion of the examination, the scheme has not been implemented.

22. CAPITAL STOCK

Percentage

Ownership Amount of Capital

Shareholders Number of shares % Shares (Rp)

Series A shares

PT Multikarsa Investama 1.163.024.711 56,84 581.512.355.500

Multi Tree Ltd. B V I 262.930.608 12,85 131.465.304.000

Standard Chartered Bank, Hong Kong A / C 138.047.900 6,75 69.023.950.000

Public (each under 5%) 482.236.781 23,56 241.118.390.500

Total 2.046.240.000 100 1.023.120.000.000

PT TEXMACO PERKASA ENGINEERING Tbk AND SUBSIDIARY COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The company as guarantor of the US $ 100,000,000 TPE International Company BV notes payable (Floating Rate Notes

US $ 100,000,000) had a meeting with the holders of the notes (FRN Holder) on September 20, 2002, based on the

results of the meeting. FRN Holder has given approval for the "Concensual Debt Restructuring Plan" submitted by the

Company with a partial loan scheme to be included in equity participation and partly in the form of New Secured Floating

Rate Notes (New SFRN) to be paid by the Company from 2006 to 2011 In the 2002 financial statements the notes were

classified as long-term liabilities (Note 35b).

Based on the October 2002 In-Principle Restructuring Agreement between the Company and PT Efficorp Securitas and

PT Asuransi Prima Perkasa Indonesia an agreement was made to restructure the Company's long-term notes payable in

accordance with the "Concensual Debt Restructuring Plan" submitted by the Company with condition precedent fulfillment

requirements which requires both parties to obtain all the necessary approvals, and in the 2002 financial statements the

notes are classified as long-term notes (Note 35b). In 2014 and 2013, the Company failed to pay the principal and interest

on the long-term notes of PT Efficorp Securitas and PT Asuransi Prima Perkasa Indonesia which occurred up to 2003

amounting to Rp 91,711,875,000.

AS OF DECEMBER 31, 2014 AND 2013

(Expressed in Rupiah, unless otherwise stated)

(Continued)

The restructuring scheme that was made in 2002 through the Jakarta Initiative has yet to be realized and currently the

Company intends to restart the direct negotiation process with creditors on the balance of long-term notes of PT Efficorp

Securitas and PT Asuransi Prima Perkasa Indonesia (Note 35b). Therefore, the interest costs of Rp.41,611,875,000 and

Rp.3,600,000,000 each which occurred until 2003 were not recorded.

The composition of the Company's shareholdings based on the Securities Administration Bureau PT Datindo Entrycom as

of December 31, 2014 and 2013 are as follows:

Year 2014

Page 67: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Report No. : LT / 102 / HPR-5 / XI / 2015

Page : 40

22. SHARE CAPITAL (continued)

Percentage

Ownership Amount of Capital

Shareholders Number of shares % Shares (Rp)

Series A shares

PT Multikarsa Investama 1.163.024.711 56,84 581.512.355.500

Multi Tree Ltd. B V I 262.930.608 12,85 131.465.304.000

Public (each under 5%) 620.284.681 30,31 310.142.340.500

Total 2.046.240.000 100 1.023.120.000.000

2 0 1 4 2 0 1 3

Lembar Lembar

Management

Rippon Dwi (President Commissioner) - 25.335

23. ADDITIONAL PAID UP CAPITAL - NET

Is as follows :

2 0 1 4 2 0 1 3

Rp Rp

Stock sales Company in public offerings to

public in 1993 for issuing 1,000 shares 4.800.000.000 4.800.000.000

Recorded as paid up capital (1.000.000.000) (1.000.000.000)

Stock premium balance December 31, 1993 3.800.000.000 3.800.000.000

Distribution of bonus shares December 27, 1994 (3.150.000.000) (3.150.000.000)

Stock premium balance December 31, 2001 650.000.000 650.000.000

Stock issuance costs deferred (2.972.289.217) (2.972.289.217)

(2.322.289.217) (2.322.289.217)

Additional new paid-up capital 1.008.139.201.788 1.008.139.201.788

Additional Paid-in Capital - Net 1.005.816.912.571 1.005.816.912.571

PT TEXMACO PERKASA ENGINEERING Tbk AND SUBSIDIARY COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(Expressed in Rupiah, unless otherwise stated)

(Continued)

Year 2013

Increased in additional paid-up capital originating from long-term debt converted to equity based on the Restructuring

Agreement dated September 20, 2002 between the Company and PT Jaya Perkasa Engineering and the conversion was

approved by the Extraordinary General Meeting of Shareholders on December 27, 2002 which was notified by Sutjipto SH,

Notary No. 92 on the same date and has been approved by the Republic of Indonesia Minister of Justice and Human

Rights Number: C-10696 HT.01.04.TH.2003 dated May 14, 2003. Entry into of this agreement is still awaiting for the

issuance of shares and completness of various other conditions will hapen future such of guarantees, mortgages and

others.

Page 68: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Report No. : LT / 102 / HPR-5 / XI / 2015

Page : 41

24. OPERATING REVENUES

Details of the Company's net sales based on the main product groups are as follows;

2 0 1 4 2 0 1 3

Rp Rp

Engine spareparts 81.010.003.797 68.804.817.275

Net sales 81.010.003.797 68.804.817.275

Details of the Company's net sales based on customers are as follows:

2 0 1 4 2 0 1 3

Rp Rp

Third parties

Export 70.106.065.698 50.237.499.774

Local 10.903.938.099 18.567.317.501

81.010.003.797 68.804.817.275

Related parties (Notes 33) - -

Net sales 81.010.003.797 68.804.817.275

Sales made to related parties in 2014 and 2013 were nil% (Note 33).

Details of buyers with a net selling value exceeding 10% of the Company's sales are as follows:

2 0 1 4 2 0 1 3 2 0 1 4 2 0 1 3

Rp Rp % %

Customer

GE Transportation System USA 22.057.658.621 17.601.539.208 27,23 25,58

General Electric Mexico 40.546.993.716 28.945.094.394 50,05 42,07

Total 62.604.652.337 46.546.633.602 77,28 67,65

Total Percentage of total sales

PT TEXMACO PERKASA ENGINEERING Tbk AND SUBSIDIARY COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(Expressed in Rupiah, unless otherwise stated)

(Continued)

Page 69: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Report No. : LT / 102 / HPR-5 / XI / 2015

Page : 42

25. COST OF GOODS SOLD

The details of the cost of goods sold are as follows:

2 0 1 4 2 0 1 3

Rp Rp

Raw materials and auxiliary materials used 21.191.234.625 23.040.196.581

Direct labor wages 6.113.109.228 4.875.597.191

Direct production cost (fabrication) (Notes 26) 13.351.344.143 9.013.442.754

Total production costs 40.655.687.996 36.929.236.526

Inventory of goods in process

Beginning 827.641.268 1.357.315.508

Ending (1.149.248.258) (827.641.268)

Cost of production 40.334.081.006 37.458.910.766

Finished goods

Beginning 1.996.846.234 1.011.364.450

Ending (2.699.599.710) (1.996.846.234)

Cost of goods sold 39.631.327.530 36.473.428.982

Details of suppliers that exceed 10% of the Company's purchases are as follows:

2 0 1 4 2 0 1 3 2 0 1 4 2 0 1 3

Rp Rp % %

PT Krakatau Steel 2.480.310.000 - 10,05 -

Richards Bay Iron and Titanium 13.379.399.040 6.062.587.020 54,24 25,16

PT Sinarindo Megah Perkasa - 5.340.520.360 0,00 22,16

Total 15.859.709.040 11.403.107.380 64,29 47,32

26. DIRECT PRODUCTION COST

Details of direct production cost are as follows:

2 0 1 4 2 0 1 3

Rp Rp

Electricity, water and telephone 3.422.935.337 2.498.567.088

Building maintenance costs 421.908.565 738.700.456

Machine maintenance costs 1.484.380.695 1.554.648.130

Insurance fee 18.427.601 10.320.421

Import clearance fee 4.300.599.202 -

Building depreciation costs 3.069.331.761 3.535.453.238

Machine depreciation costs 592.541.522 619.649.362

Transportation costs 41.219.460 56.104.059

Total 13.351.344.143 9.013.442.754

AS OF DECEMBER 31, 2014 AND 2013

(Expressed in Rupiah, unless otherwise stated)

(Continued)

AND SUBSIDIARY COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Supplier Percentage of total purchasesTotal

PT TEXMACO PERKASA ENGINEERING Tbk

Page 70: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Report No. : LT / 102 / HPR-5 / XI / 2015

Page : 43

27. OPERATING EXPENSES

Details of operating expenses are as follows:

2 0 1 4 2 0 1 3

Rp Rp

Marketting expenses

Export 600.533.405 3.284.811.555

Marketing and advertising 346.170.000 1.421.729.786

Transportation 121.179.123 313.528.568

1.067.882.528 5.020.069.909

General and Administrative Expenses

Salary, wages and benefits 7.751.225.852 8.898.712.792

property tax 442.892.818 667.913.966

Depreciation 96.316.089 118.770.515

Amortization of other assets 709.220.851 -

Repair and maintenance 876.891.058 655.102.841

Professional services 50.000.000 45.000.000

Postal and telephone expenses 241.776.889 230.997.541

Office expenses 80.056.340 69.982.675

Official travel 1.476.792.781 1.676.829.869

Others 28.516.047.777 9.551.765.540

40.629.294.659 21.915.075.739

Total 41.697.177.187 26.935.145.648

28. INTEREST INCOME

2 0 1 4 2 0 1 3

Rp Rp

Current Accounts 11.678.113 20.915.574

Total 11.678.113 20.915.574

29. INTEREST EXPENSES AND BANK ADMINISTRATION

2 0 1 4 2 0 1 3

Rp Rp

Bank loan interest expense 600.000.000 603.428.897

Bank Administration 110.240.761 134.119.967

Total 710.240.761 737.548.864

Other general & administrative expenses in 2014 and 2013 were Rp. 28,516,047,777 and Rp. 9.551,765,540, including

research & development costs of Rp. 27,918,933,003 and Rp. 7,953,740,000.

PT TEXMACO PERKASA ENGINEERING Tbk AND SUBSIDIARY COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(Expressed in Rupiah, unless otherwise stated)

(Continued)

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Report No. : LT / 102 / HPR-5 / XI / 2015

Page : 44

30. BENEFITS (LOSSES) FOREIGN EXCHANGE CURSES - NET

2 0 1 4 2 0 1 3

Rp Rp

Profit / (loss) on the transaction rate (2.280.413.368) 15.099.338.903

(Loss) exchange rate as balance sheet date (40.199.056.470) (506.096.551.315)

Total Net (42.479.469.838) (490.997.212.412)

31. INCOME TAX

2 0 1 4 2 0 1 3

Rp Rp

Current tax

Company - -

Subsidiary - -

Sub Amount - -

Deferred tax

Company 1.568.021.262 273.244.620.030

Subsidiary - -

Sub Amount 1.568.021.262 273.244.620.030

Total 1.568.021.262 273.244.620.030

Current tax

2 0 1 4 2 0 1 3

Rp Rp

Profit / (Loss) before tax according to the consolidated statement of income (52.584.350.278) (1.444.088.662.275)

Profit / Loss of a subsidiary (30.222.967) (303.313.356)

Profit / (Loss) before Company tax (transferred) (52.614.573.245) (1.444.391.975.631)

Temporary differences:

Differences in commercial and fiscal depreciation (12.403.990.134) (13.794.865.797)

Payment / expenses employee benefits (88.654.070) (372.929.839)

Allowance for accounts receivable 11.563.524.723 26.922.536.538

Investment loss expense - 933.253.905.648

(929.119.481) 946.008.646.550

(Expressed in Rupiah, unless otherwise stated)

PT TEXMACO PERKASA ENGINEERING Tbk AND SUBSIDIARY COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(Continued)

As of December 31, 2014 and 2013, monetary assets and liabilities in the Company's foreign currency were translated into

Rupiah at the middle rate of Bank Indonesia, resulting in the following net losses / gains on foreign exchange differences:

The reconciliation between loss before tax according to the consolidated statements of income and tax losses is as

follows:

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Report No. : LT / 102 / HPR-5 / XI / 2015

Page : 45

31. INCOME TAX (continued)

Current Tax (continued)

Permanent difference:

Tax penalties 26.084.469 45.047.992

Interest income (11.678.113) (20.915.574)

Others 258.783.685 788.761.590

273.190.041 812.894.008

Tax on currenty year (53.270.502.685) (497.570.435.073)

Tax loss year 2013 (497.570.435.073) -

Tax loss year 2012 (78.661.799.919) (78.661.799.919)

Tax loss year 2011 (10.167.835.545) (10.167.835.545)

Tax loss year 2008 - (314.233.666.482)

Total Tax losses that have not been compensated (639.670.573.222) (900.633.737.019)

Deferred Tax

AND SUBSIDIARY COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(Expressed in Rupiah, unless otherwise stated)

(Continued)

PT TEXMACO PERKASA ENGINEERING Tbk

Deferred tax is calculated based on the effect of temporary differences between the carrying amounts of assets and

liabilities according to the report and the tax bases of assets and liabilities. The details of the Company and its

subsidiaries' deferred tax obligations are as follows:

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Report No. : LT / 102 / HPR-5 / XI / 2015

Page : 46

31. INCOME TAX (continued)

Deferred Tax (continued)

Charged Charged

(credited) (credited)

Description December 31 to report December 31 to report December 31

2012 profit and loss 2013 profit and loss 2014

Rp Rp Rp Rp Rp

Deferred tax liability:

Difference in depreciation

commercial and tax (72.117.076.181) (3.448.716.449) (75.565.792.630) (3.100.997.534) (78.666.790.164)

Employee benefit costs 933.226.691 (93.232.460) 839.994.231 (22.163.518) 817.830.714

Allowance for accounts receivable 344.044.446 6.730.634.135 7.074.678.581 2.890.881.180 9.965.559.761

Investment loss expenses - 233.313.476.412 233.313.476.412 - 233.313.476.412

Adjustment

Finance lease expenses 433.553.461 - 433.553.461 - 433.553.461

Depreciation of fixed assets - 36.742.458.392 36.742.458.392 1.800.301.132 38.542.759.524

Net amount (70.406.251.583) 273.244.620.030 202.838.368.447 1.568.021.262 204.406.389.708

PT TEXMACO PERKASA ENGINEERING Tbk AND SUBSIDIARY COMPANY

As of December 31, 2014 and 2013, the Company suffered accumulated tax losses amounting to Rp 639,670,573,222 and

Rp.900,633,737,019, which can be compensated with taxable income for the next five years.

Recognition of the Company's deferred tax assets based on management's estimates of future results including estimates of the

level of production and commodity prices of the Company's products, time and development of the Company's deferred tax

obligations and tax planning strategies. In 2002 there was a decrease in the value of equity of the Company at PT. Perkasa

Heavyndo Engineering which was originally 99.99% to 10.00% (see note 9) so that the deferred tax was not taken into account.

(Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(Expressed in Rupiah, unless otherwise stated)

Page 74: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Report No. : LT / 102 / HPR-5 / XI / 2015

Page : 47

31. INCOME TAX (continued)

Deferred Tax (continued)

2 0 1 4 2 0 1 3

Rp Rp

Profit / (loss) before tax according to the consolidated statement of income (52.584.350.278) (1.444.088.662.275)

Profit / Loss before tax of subsidiary (30.222.967) (303.313.356)

Loss before tax of Company (52.614.573.245) (1.444.391.975.631)

Income tax with a 25% tax rate 13.153.643.311 361.097.993.908

Tax profit (loss) not recognized as

Deferred tax assets (13.317.625.671) (124.392.608.768)

Effect of tax on expenses (income) that cannot be obtained

calculated according to tax:

- Interest income 2.919.528 5.228.894

- Tax penalties (6.521.117) (11.261.998)

- Other (64.695.921) (197.190.398)

(232.279.870) 236.502.161.638

Adjustment depreciation of productive assets 1.800.301.132 36.742.458.392

Corporate tax income 1.568.021.262 273.244.620.030

Subsidiary tax expense - -

Amount of Tax Expense 1.568.021.262 273.244.620.030

(Continued)

PT TEXMACO PERKASA ENGINEERING Tbk

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(Expressed in Rupiah, unless otherwise stated)

The reconciliation between the tax expenses and the pre-tax accounting loss with the applicable tax rate is as follows:

AND SUBSIDIARY COMPANY

Page 75: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Report No. : LT / 102 / HPR-5 / XI / 2015

Page : 48

32. LOSS PER SHARE

Year 2014

Common stock

and equivalent Assumption

common stock full dilution

Rp Rp

The number of weighted average shares outstanding 2.046.240.000 2.046.240.000

Common stock equivalents assuming the stock option has been converted - 9.250.111.147

Amount (full sheet) 2.046.240.000 11.296.351.147

Net loss (51.016.329.016) (51.016.329.016)

Reduced: Share dividend - -

Net income used in calculating earnings per share (51.016.329.016) (51.016.329.016)

Loss per share (25) (5)

Year 2013

Common stock

and equivalent Assumption

common stock full dilution

Rp Rp

The number of weighted average shares outstanding 2.046.240.000 2.046.240.000

Common stock equivalents assuming the stock option has been converted - 9.250.111.147

Amount (full sheet) 2.046.240.000 11.296.351.147

Net loss (1.170.844.042.245) (1.170.844.042.245)

Reduced: Share dividend - -

Net income used in calculating earnings per share (1.170.844.042.245) (1.170.844.042.245)

Loss per share (572) (104)

(Expressed in Rupiah, unless otherwise stated)

(Continued)

PT TEXMACO PERKASA ENGINEERING Tbk AND SUBSIDIARIES COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

Page 76: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Report No. : LT / 102 / HPR-5 / XI / 2015

Page : 49

33. RELATED PARTIES INFORMATION

This account consists of

2 0 1 4 2 0 1 3 2 0 1 4 2 0 1 3

Rp Rp % %

Restricted Bank Account

Rupiah

Bank Putera Multikarsa 1.534.015.502 1.534.015.502 0,22220 0,22385

Foreign currency

Bank Putera Multikarsa 1.434.943.855 1.434.943.855 0,20785 0,20939

Time deposit 100.000.000 100.000.000 0,01448 0,01459

3.068.959.357 3.068.959.357 0,44453 0,44783

Allowance for bank balances

restricted usage (3.068.959.357) (3.068.959.357) (0,44453) (0,44783)

T o t a l - - - -

Accounts receivable

PT Citra Indah Textile 6.007.001.807 6.007.001.807 0,87010 0,87655

PT Texmaco Taman Synthetics 4.341.726.187 4.341.726.187 0,62889 0,63355

PT Bima Peranan Busana 505.305.799 505.305.799 0,07319 0,07374

PT Devrindo Widya 120.708.761 120.708.761 0,01748 0,01761

PT Wastra Indah 8.235.053 8.235.053 0,00119 0,00120

PT Texmaco Jaya Tbk (under liquidation) 2.552.000 2.552.000 0,00037 0,00037

PT Saritex Jaya Swasti 2.070.775 2.070.775 0,00030 0,00030

10.987.600.382 10.987.600.382 1,60333 1,60333

Allowance for doubtful accounts (8.153.383.174) (5.439.874.725) (1,18976) (0,79380)

T o t a l 2.834.217.208 5.547.725.657 0,41053 0,80954

PT TEXMACO PERKASA ENGINEERING Tbk AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(Expressed in Rupiah, unless otherwise stated)

(Continued)

Percentage of

total assets / liabilities /

income / expense

concerned

Balance

as of December 31, 2014 and 2013

Page 77: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Report No. : LT / 102 / HPR-5 / XI / 2015

Page : 50

33. RELATED PARTIES INFORMATION (continued)

2 0 1 4 2 0 1 3 2 0 1 4 2 0 1 3

Rp Rp % %

Other receivables

PT Bridgeport Perkasa Machine Tools 20.892.751.289 20.812.592.300 3,02627 3,03702

PT Perkasa Indo Baja 16.224.578.177 14.905.884.555 2,35010 2,17510

PT Perkasa Indo Steel 7.678.187.029 7.678.187.029 1,11217 1,12042

PT Raja Busana Mahameru 3.201.103.177 3.201.103.177 0,46367 0,46711

PT Perkasa Heavyndo Engineering 188.560.614 372.388.714 0,02731 0,05434

PT Texmaco Micro Indo Utama 870.173.937 870.173.937 0,12604 0,12698

Texmaco DPS International School 830.000.000 830.000.000 0,12022 0,12112

PT Sarasa Daycrown Industry 46.905.930 46.905.930 0,00679 0,00684

PT Wahana Jaya Perkasa Tbk 29.734.995 29.734.995 0,00431 0,00434

PT Multikarsa Investama 89.146.501.429 75.644.331.348 12,91270 11,03818

E-Tech Manufacturing - 110.400.000 - 0,01611

Factory Systems Pte, Ltd. Singapore - 286.341.093 - 0,04178

PT Elok Prima Mitra Busana 1.260.000.000 1.260.000.000 0,18251 0,18386

Best & Crompton Engg. Ltd, India - 11.371.567.000 - 1,65936

Green Bridge International Pte.Ltd, Singapore - 7.803.725.000 - 1,13874

140.368.496.577 145.223.335.078 20,33210 21,19130

Allowance for doubtful accounts (26.066.562.773) (21.464.581.731) (3,77569) (3,13216)

T o t a l 114.301.933.804 123.758.753.347 16,55641 18,05914

Account payable

PT Wahana Perkasa Auto Jaya 8.622.876.868 8.622.876.868 1,24901 1,25827

PT Wisma Karya Prasetya (Under Liquidation) 2.956.459.690 2.956.459.690 0,42824 0,43141

PT Texmaco Micro Indo Utama 415.981.022 415.981.022 0,06025 0,06070

PT Bridgeport Perkasa Machine Tools 1.043.719.427 1.043.719.427 0,15118 0,15230

PT Perkasa Indobaja 274.193.711 118.795.699 0,03972 0,01733

PT Perkasa Heavyndo Engineering 504.198.999 659.597.011 0,07303 0,09625

PT Asia Pacific Fibers Tbk

(PT Polysindo Eka Perkasa Tbk) 8.134.500 8.134.500 0,00118 0,00119

T o t a l 13.825.564.217 13.825.564.217 2,00261 2,01746

as of December 31, 2014 and 2013 income / expense

concerned

total assets / liabilities /

PT TEXMACO PERKASA ENGINEERING Tbk AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(Expressed in Rupiah, unless otherwise stated)

(Continued)

Percentage of

Balance

Page 78: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Report No. : LT / 102 / HPR-5 / XI / 2015

Page : 51

33. RELATED PARTIES INFORMATION (continued)

2 0 1 4 2 0 1 3 2 0 1 4 2 0 1 3

Rp Rp % %

Other debts

PT Jaya Perkasa Engineering 86.861.876.131 86.861.876.131 12,58177 12,67507

PT Wastra Indah 63.267.782.228 63.267.782.228 9,16422 9,23217

PT Wisma Karya Prasetya (Under Liquidation) 39.407.292.576 38.513.550.987 5,70807 5,61998

PT Asia Pacific Fibers Tbk

(PT Polysindo Eka Perkasa Tbk) 31.725.623.703 31.535.793.510 4,59540 4,60177

PT Texmaco Jaya Tbk (Under Liquidation) 28.103.527.130 28.097.527.130 4,07074 4,10005

PT Bima Peranan Busana 7.050.718.755 7.050.718.755 1,02128 1,02886

Coastal Group Ltd (Sales Advance) 9.627.950.440 9.433.688.739 1,39459 1,37658

PT Wahana Perkasa Auto Jaya 2.740.538.673 2.740.538.673 0,39696 0,39991

PT Texmaco Taman Synthetic 2.649.540.415 2.649.540.415 0,38378 0,38663

PT Saritex Jaya Swasti 986.685.000 986.685.000 0,14292 0,14398

PT Multikarsa Investama - - - -

PT Kreasi Kekar Dinamika 120.379.878 120.379.878 0,01744 0,01757

T o t a l 272.541.914.929 271.258.081.446 39,47716 39,58254

Note payable

PT Efficorp Sekuritas 36.500.000.000 36.500.000.000 5,28695 5,32616

PT Asuransi Prima Perkasa Indonesia 10.000.000.000 10.000.000.000 1,44848 1,45922

T o t a l 46.500.000.000 46.500.000.000 6,73543 6,78538

Sales

PT Wahana Perkasa Auto Jaya - - - -

PT Perkasa Heavyndo Engineeering - - - -

T o t a l - - - -

Cost of goods sold - - - -

T o t a l - - - -

total assets / liabilities /

as of December 31, 2014 and 2013 income / expense

concerned

PT TEXMACO PERKASA ENGINEERING Tbk AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(Expressed in Rupiah, unless otherwise stated)

(Continued)

Percentage of

Balance

Page 79: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Report No. : LT / 102 / HPR-5 / XI / 2015

Page : 52

33. RELATED PARTIES INFORMATION (continued)

a. Nil% is sales to related parties (Note 4).

b.

c.

Nature of Special Relationships

The nature of the Company's special relationship with related parties are as follows:

a. Companies whose shareholders are the same as the main shareholders of the Company and subsidiaries.

PT Asia Pacific Fibers Tbk

(PT Polysindo Eka Perkasa Tbk) Purchases, sales, loans

PT Texmaco Taman Synthetics Purchases, sales, loans

PT Perkasa Indobaja Purchases, sales, loans

PT Texmaco Jaya Tbk (Under Liquidation) Purchases, sales, loans

PT Wastra Indah Purchases, sales, loans

PT Bima Peranan Busana Purchases, sales, loans

PT Bank Putera Multikarsa Loan

Polysindo (USA) Inc. USA Purchase

Polysindo (Japan) Inc. Japan Purchase

Polysindo Ltd. Singapore Purchase

PT Waniaindah Busana Tbk

(formerly PT Indosteel Tbk) Machine purchase

PT Asuransi Prima Perkasa Int' Loan

Sekolah Tinggi Teknologi Texmaco Sales

PT Texmaco Micro Indo Utama Purchases, sales

PT Wahana Perkasa Auto Jaya Purchases, sales

PT Wahana Jaya Perkasa Tbk Loan

Dana Pensiun Texmaco Group Loan

PT Wisma Karya Prasetya (Under Lquidation) Purchases, loans

PT Raja Busana Mahameru Sales

PT Saritex Jaya Swasti Sales

PT Devrindo Widya Sales

In its business activities, the Company and its subsidiaries conduct certain transactions with related parties in 2014 and 2013 as

follows:

In its business activities, the Company and its subsidiaries also entered into purchases of raw materials and auxiliary materials

with related parties totaling Rp 21,890,000 and Rp. Zero, which constituted 0.09% and 0% of the purchases (Notes 14 and 25 )

Accounts receivable and payable to related parties represent interest-free and unsecured current account balances which

arise, among other things, from advances and expenses of the Company with related parties paid in advance or otherwise.

TransactionsNature of relationship

Affiliated company

Affiliated company

Affiliated company

Affiliated company

Affiliated company

Affiliated company

Affiliated company

Affiliated company

Affiliated company

Affiliated company

Affiliated company

Affiliated company

Affiliated company

Affiliated company

Affiliated company

Affiliated company

Affiliated company

Affiliated company

Affiliated company

Affiliated company

Affiliated company

AS OF DECEMBER 31, 2014 AND 2013

(Expressed in Rupiah, unless otherwise stated)

PT TEXMACO PERKASA ENGINEERING Tbk AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

Page 80: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Report No. : LT / 102 / HPR-5 / XI / 2015

Page : 53

33. RELATED PARTIES INFORMATION (continued)

b. Companies that are part of the management or management are the same as the Company and subsidiaries.

PT Citra Indah Textil Purchases, sales

PT Eficorp Sekuritas Loan

Reksadana DUIT Loan

PT Perkasa Indosteel Loan

PT Bridgeport Perkasa Machine Tools Sales

c. PT Perkasa Heavyndo Engineering is an associate company.

Nature of relationship Transactions

Affiliated company

Affiliated company

AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Affiliated company

Affiliated company

Affiliated company

AS OF DECEMBER 31, 2014 AND 2013

(Expressed in Rupiah, unless otherwise stated)

(Continued)

PT TEXMACO PERKASA ENGINEERING Tbk

Page 81: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Report No. : LT / 102 / HPR-5 / XI / 2015

Page : 54

34. ASSETS AND MONETARY LIABILITIES IN FOREIGN CURRENCY

As of December 31, 2014 and 2013 the Company and subsidiaries have monetary assets and liabilities in foreign currencies as follows:

Currency equivalent Currency equivalent

A s s e t foreign Rupiah foreign Rupiah

Cash and cash equivalents USD 2.422.012,87 30.129.840.047 2.471.765,17 30.128.345.626

NLG 2.000,00 9.991.967 2.000,00 9.790.361

Accounts receivable

- Third parties USD 2.649.532,71 32.960.186.877 2.032.071,00 21.385.058.130

Other receivables

- Related parties USD 1.244.100,00 15.476.604.000 1.244.100,00 15.164.334.900

- Third parties NLG 10.402.159,26 51.969.020.560 10.402.159,26 50.920.449.486

Total assets 130.545.643.451 117.607.978.503

Obligations

Bank loan USD 2.144.048,00 26.671.957.120 2.144.048,00 26.133.801.072

Notes Payable short term USD 13.180.000,00 163.959.200.000 13.180.000,00 160.651.020.000

Account payable

- Third parties USD 2.187.706,49 27.215.068.712 1.931.015,21 23.537.144.338

Other debts

- Third party NLG 2.000,00 9.991.967 2.000,00 9.790.361

- Related parties USD 773.951,00 9.627.950.440 773.951,00 9.433.688.739

Accued and accrued interest USD 7.674.015,54 95.464.753.318 7.674.015,54 93.538.575.417

Finance lease debt USD 506.762,14 6.304.121.022 506.762,14 6.176.923.724

Notes Payable Long term USD 100.000.000,00 1.244.000.000.000 100.000.000,00 1.218.900.000.000

Long-term bank loan USD 74.362.521,82 925.069.771.441 74.362.521,82 906.404.778.464

JPY 33.588.128,00 3.501.522.038 33.588.128,00 3.901.892.524

Total of liabilities 2.501.824.336.058 2.448.687.614.640

Total Obligations - Net 2.371.278.692.607 2.331.079.636.137

As of December 31, 2014 and 2013, the middle rate of Bank Indonesia was as follows:

2 0 1 4 2 0 1 3

Foreign currency Rp Rp

EUR 1 15.133,27 16.821,44

USD 1 12.440,00 12.189,00

JPY 1 104,2488 116,1688

NLG 1 4.995,98 4.895,18

The Company and its subsidiaries posted a net loss on foreign exchange of Rp 42,479,469,838, - in 2014 and amounting to Rp 490,997,212,412 in

2013 (Note 30).

2 0 1 4 2 0 1 3

(Continued)

PT TEXMACO PERKASA ENGINEERING Tbk AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(Expressed in Rupiah, unless otherwise stated)

Page 82: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Report No. : LT / 102 / HPR-5 / XI / 2015

Page : 55

35. DEBT RESTRUCTURING

a. Debt restructuring at the Indonesian Bank Restructuring Agency (IBRA)

The following is a restructuring scheme that has been approved in the MRA, including:

*

* The composition of ownership of NewEngCo is 100% owned by the founding shareholders.

*

*

* Both parties will make arrangements for management and control of NewCo and NewCo assets and subsidiaries.

* Completion of obligations under this restructuring scheme expires / expires in 2011.

* IBRA will appoint an independent financial controller to conduct cash monitoring of the Texmaco group company.

PT TEXMACO PERKASA ENGINEERING Tbk

AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(Expressed in Rupiah, unless otherwise stated)

(Continued)

IBRA and the Texmaco Group will form 2 new companies (NewCo), one for the textile division (NewTexCo) and one for the

engineering division (NewEngCo).

IBRA will transfer all bills to each NewCo and for the transfer NewCo will issue a Secured Guaranteed Exchangeable Bond to

IBRA.

The founding shareholders will transfer the Core Assets and Non Core Assets to each NewCo and for the transfer NewCo will

issue the Subordinated Exchangeable Bond to the founding shareholders.

Both parties will make an Implementation Agreement (Implementation Agreement) for the implementation of the basic terms

and conditions of restructuring.

Based on the "Memorandum of Understanding on the Agreement on the Basic Principles for Restructuring of Texmaco"

(MOU) which was notarized by Notary Bambang Sularso, SH No. 15 September 29, 2000, Marimutu Sinivasan (MS), who

directly and / or indirectly controlled and / or owned majority shares of the Company and subsidiaries, and IBRA approved the

restructuring model of the Texmaco (Texmaco) business group's obligations, including the obligations of the Company and

entities child, to IBRA. The restructuring of Texmaco includes changes in repayment requirements and interest delays. Based

on the MOU, all the obligations of the Company and subsidiaries will be transferred to the holding company (Newco) which

will issue exchangeable bonds to IBRA within the period of repayment from 2008 to 2011, while the Company and

subsidiaries will issue subordinated exchagenable or convertible bonds bonds) to Newco in the amount of the total liabilities of

the Company and its subsidiaries to IBRA based on the Transfer Assets Price covered by the MOU.

In connection with the MOU, in 2001 all the obligations of the Company and subsidiaries were classified as long-term

liabilities.

On April 11, 2001, the Financial Sector Policy Committee (KKSK) approved the process of restructuring Texmaco as a follow-

up to Decree No. KKSK. Kep 01 / K.KKSK / 03/2001 dated March 20, 2001 which stipulated, among others, that the Texmaco

engineering business sector was included in the category of core assets in the process of restructuring Texmaco.

Based on Notarial deed Olvia Afiaty, SH No. 9 April 18, 2001, PT Jaya Perkasa Engineering (JPE) was established as a

holding company owned by Marimutu Sinivasan to settle the obligations of all Texmaco Group Engineering obligations,

including the Company and several subsidiaries to IBRA in connection with the signing of the MOU.

The MOU dated September 29, 2000 was replaced by the Master Restructuring Agreement (MRA) for Texmaco Group dated

May 23, 2001, which was subsequently amended by First Amendment MRA No. 5 dated September 21, 2001 and was last

amended by Second Amendment MRA No. 12 dated January 18, 2002, whose contents, among others, extended the period

of completion of Precedent Conditions to 360 days, namely until May 22, 2002.

Page 83: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Report No. : LT / 102 / HPR-5 / XI / 2015

Page : 56

35. DEBT RESTRUCTURING (Continued)

b. Debt restructuring at the National Bank Restructuring Agency (IBRA) (continued)

- The implementation of the above restructuring scheme that has been implemented is:

- The company group has formed New Engg Co, namely PT Jaya Perkasa Engineering.

- Cash monitoring.

- The company and PT Jaya Perkasa Engineering signed a Restructuring Agreement on September 20, 2002.

-

c. The restructuring process through the Jakarta Initiative

Proposals that have been proposed by management to restructure loans to creditors are as follows:

Converted to capital 78% of obligations

New obligations 22% of obligations

Interest rate 1% above SIBOR

Time period 2005 to 2011

The Company obtained the approval of the shareholders through the EGMS on December 27, 2002 for the addition of the

Company's capital in connection with the conversion of its debt into capital in accordance with the Restructuring Agreement.

In 2014 and 2013 the Company experienced a shortage of working capital, so the Company could not move at a level that

would allow it to reach the targeted production level. This has caused the Company to be unable to fulfill the terms and

conditions of the Individual Restructuring Agreement, therefore there has been no major progress with regard to the results of

the restructuring. The restructuring scheme that has been approved by creditors is still in the implementation process.

Until now, all debts transferred to PT Jaya Perkasa Engineering (JPE) have been handled by the IBRA Settlement Team. The

IBRA Settlement Team is still in the process of identifying loans to be transferred to PT Perusahaan Pengelola Asset (PT

PPA).

The restructuring scheme that was made in 2002 through the Jakarta Initiative has yet to be realized and at present the

Company intends to restart the negotiation process directly with its creditors as explained in notes 12, 13, 19, 20 and 21.

The restructured loans through Prakarsa Jakarta consist of secured loans of US $ 100,000,000, and unsecured loans totaling

Rp 133,790,701,621, US $ 19,386,990 and JPY ¥ 33,588,128.

Based on the Minutes of Meeting on March 21, 2002 sponsored by the Jakarta Initiative with the results of creditors who

agreed 74.70%, disagree 14.9% and abstain 4%, and management is required to negotiate with each creditor bilaterally to

explain more continued with the management proposal.

The Company has signed an In-Principle Restructuring Agreement with PT Eastern Finance Corporation in October 2002 on

the balance of notes payable of Rp. 36,500,000,000 and has also signed an In-Principle Restructuring Agreement with PT

Asuransi Prima Perkasa International for outstanding balance of Rp. 10,000,000,000 and loans to Mizuho with a balance of

Rp 89,642,507,482 with the scheme of restructuring scheme as follows:

PT TEXMACO PERKASA ENGINEERING Tbk AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(Expressed in Rupiah, unless otherwise stated)

(Continued)

Page 84: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Report No. : LT / 102 / HPR-5 / XI / 2015

Page : 57

35. DEBT RESTRUCTURING (Continued)

c. The restructuring process through the Jakarta Initiative (continued)

Converted to capital 78% of obligations

New obligations 22% of obligations

Interest rate 1% above SIBOR

Time period 2006 to 2011

*

*

36. OBLIGATIONS OF POST-EMPLOYMENT BENEFITS

37. COMMITMENTS

a.

The effective entry into force of the above agreements is still awaiting other equipment including various conditions precedent

and conditions subsequent.

Effective in 2005 the Statement of Financial Accounting Standards (PSAK) number 24 (revised 2004) was implemented,

which requires the Company to record employee employee benefits.

Based on PSAK No. 24 (revision 24) concerning employee benefits, requires the Company to recognize work obligations,

including post-employment benefits (Defined Benefit Program).

Accounting for defined benefit programs requires actuarial assumptions by using the projected unit credit method to determine

the present value of defined benefit obligations, current related service costs and past service costs.

The balance of the post-employment benefits obligation as of December 31, 2014 and 2013 amounted to Rp 3,271,322,852,

and Rp. 3,359,976,922, respectively, which was calculated and recorded until 2002.

Since 2003 until this report was published, management has not calculated and recorded the amount of work in return as

required in the PSAK on the Company's financial statements.

The company entered into an agreement with GDW. Werkzeugmaschinen Herzogenaurach Gmbh where the party will

provide technical know-how in producing Modular Lathe System 250 and 350. The company will pay DM 370,000 in three

installments as stated in the agreement.

The restructuring of long-term notes payable (FRN) of US $ 122 million consisted of principal debt of US $ 100 million and

interest of US $ 22 million. FRN creditors agreed to restructure the FRN debt into new FRN debt with a loan principal of US $

51.1 million (41.9% of FRN debt). FRN creditors have agreed to convert debt into investments (debt equity swap) for the rest

of the restructured FRN debt of US $ 70.9 million (58.1% of FRN debt).

At the Holders Floating Rate Notes (FRN) on September 20, 2002, which was attended by 77% of FRN holders approved the

"Congengual Debt Restructuring Plan" submitted by the Company was 97.4%. At present the Company is preparing a legal

process for documents with the approval of the FRN Holders.

AS OF DECEMBER 31, 2014 AND 2013

(Expressed in Rupiah, unless otherwise stated)

(Continued)

PT TEXMACO PERKASA ENGINEERING Tbk AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Prakarsa Jakarta informal meeting organizers discussing unsecured loans and secured loans (Floating Rates Notes Holders)

approved a restructuring proposal. The company and creditors have agreed to the restructuring scheme as follows:

Page 85: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Report No. : LT / 102 / HPR-5 / XI / 2015

Page : 58

37. COMMITMENTS (continued)

b.

c.

d.

Equivalent

US $ Rp

Balance as of December 31, 2013 773.951 9.433.688.739

Exchange rate difference - 194.261.701

Balance as of December 31, 2014 773.951 9.627.950.440

This amount is recorded in other accounts payable to the entity (Note 33).

38. BUSINESS SEGMENT INFORMATION

Information about the Company's business segments is as follows:

2 0 1 4 2 0 1 3

Rp Rp

Information by Geographical Area

Net sales :

Export 70.106.065.698 50.237.499.774

Domestic 10.903.938.099 18.567.317.501

Total 81.010.003.797 68.804.817.275

Information by Product Type

Net sales :

Engine spareparts 81.010.003.797 68.804.817.275

Cost of goods sold

Engine spareparts 39.631.327.530 36.473.428.982

Profit / (Loss) Business

Engine spareparts 41.378.676.267 32.331.388.293

PT TEXMACO PERKASA ENGINEERING Tbk

The company entered into an agreement with MS. Machinery and System S.r.l. Italy, where the party will provide technical

assistance Technical know-how in producing Continuous Rotary Screen Printing machines. The company will pay a certain

amount of technical assistance and royalties as stated in the agreement.

The company entered into an engineering cooperation agreement with ICBT Diedrichs. France, to produce weaving

machines. The company will pay a certain amount of technical assistance (technical know-how) as stated in the agreement.

The company entered into an agreement with Coastal Group Limited. South Africa, in connection with implementing a turnkey

textile plant in Hammarsdale, Durban. South Africa is US $ 24,920,000 with Commonwealth Holding Pte, Ltd, Singapore (a

related party) as an intermediary. The company is in the process of supplying and installing textile machinery and has

received advances in accordance with the agreement. As of the balance sheet date, reports on changes in advances received

by the Company from Coastal Group Limited are as follows:

AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(Expressed in Rupiah, unless otherwise stated)

(Continued)

Page 86: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Report No. : LT / 102 / HPR-5 / XI / 2015

Page : 59

39. FINANCIAL RISK MANAGEMENT

* Operating income of Rp. 318,500,920 and Rp. 5,396,242,645.

* Net loss of Rp. 51,016,329,016 and Rp. 1,170,844,042,245.

* The deficit was Rp 4,244,321,472,228, and Rp. 4,193,305,143,212, - as a result of successive losses in operations.

* Negative working capital of Rp. 1,102,109,509,570 and Rp. 1,091,418,630,880.

1.

2.

3.

PT TEXMACO PERKASA ENGINEERING Tbk AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

In connection with the above, the Company and subsidiaries have continued or plan to carry out a number of actions including:

The company continually saves costs by reducing several possible posts to be reduced, so that the Company can survive

until now with the company's assets that are still productive.

The company strives continuously and consistently to collaborate with strategic investors who share the same vision with

current management.

The company strives to maintain and improve its foundry operations (Foundry Division) which has contributed to maintaining

the company's operations, while maintaining cooperation and relationships with General Electric Transportation System (USA)

and General Electric Industrial Systems (Canada), TYCO Australia and Komatsu to continue developing new company

products.

As explained in Notes 12, 13, 19, 20, 21 and 35 financial statements up to the auditor's report date, the Company and subsidiaries

are still negotiating with their creditors to restructure their loans, management believes that negotiations will produce positive

results, namely granting lower interest rates and other aspects involving extension of time and reduction in loan value.

The foregoing creates uncertainty regarding the ability of the Company and its subsidiaries to maintain viability and significant

uncertainty whether the Company and subsidiaries will be able to realize assets and settle payment of liabilities in normal business

and at the values stated in the consolidated financial statements. The consolidated financial statements do not include adjustments

that originate from this uncertainty. The accompanying consolidated financial statements are prepared assuming that the Company

and its subsidiaries will continue their business as entities capable of sustaining viability, and do not include any adjustments as a

result of uncertainty about the survival of the Company.

Furthermore, economic development has significantly affected the Company's 2014 and 2013 financial statements as reflected by:

As a result of the problems mentioned above, there is significant uncertainty regarding the Company's ability to continue its

business and whether it will be able to realize its assets and settle its obligations in the normal course of business and the amount

stated in the consolidated financial statements. The consolidated financial statements are prepared with the assumption that the

Company and its subsidiaries are capable of sustaining their survival and do not include adjustments that may arise from these

uncertainties.

The government has tried to attract new investors and concentrate on building basic infrastructure that provides great opportunities

for the company. With the existence of a number of new investments in the manufacturing industry, it is hoped that it can increase

the demand for capital goods and machinery that can provide adequate contributions to the utilization of the capacity of machinery

in the PT. Texmaco Perkasa Engineering Tbk.

(Continued)

(Expressed in Rupiah, unless otherwise stated)

Page 87: PT. Texmaco Perkasa Engineering, TbkANNUAL REPORT 2014 PT. TEXMACO PERKASA ENGINERING, Tbk Menara Mulia Lt.19 Suite 1901 Jl. Jendral Gatot Subroto Kav 9-11 Jakarta 12930 Phone : 021

Report No. : LT / 102 / HPR-5 / XI / 2015

Page : 60

39. FINANCIAL RISK MANAGEMENT (continued)

4.

5.

40. OTHER IMPORTANT INFORMATION

The new / revised accounting standards relevant to the company's operations, published and effective in 2015 are:

- PSAK No. 1 (revised 2013): Presentation of financial statements

- PSAK No. 4 (revised 2013): Separate financial statements

- PSAK No. 15 (revised 2013): Investment in associates and joint ventures

- PSAK No. 24 (revised 2013): Employee benefits

- PSAK No. 46 (revised 2014): Income tax

- PSAK No. 48 (revised 2014): Decline in asset value

- PSAK No. 50 (revised 2014): Financial instruments; presentation

- PSAK No. 55 (revised 2014): Financial instruments; recognition and measurement

- PSAK No. 60 (revised 2014): Financial instruments; disclosure

- PSAK No. 65: Consolidated financial statements

- PSAK No. 66: Joint arrangements

- PSAK No. 67: Disclosure of interests in other entities

- PSAK No. 68: Measurement of fair value

The company is still evaluating the possible impact of the issuance of these financial accounting standards.

41. RESPONSIBILITY FOR COMPLETION OF THE CONSOLIDATED FINANCIAL STATEMENTS

The company continues to strive to continue the restructuring process to overcome funding barriers, so that it can support

capital and achieve company goals in the future.

The recovery of the economy to a healthy and stable condition is highly dependent on fiscal and monetary policies that the

Government continues to strive to make healthy economies - an act that is beyond the Company's control. Therefore it is not

possible to determine the impact of future economic conditions on the liquidity and income of the Company and its subsidiaries,

including the impact of the flow of funds from customer and supplier investors to and from the Company and subsidiaries.

The Company's management is responsible for the preparation of the Company's financial statements and has agreed to publish

the 2014 financial statements of the Company on November 30, 2015.

The company will strive to increase local and international market share by improving quality production, timely delivery and

competitive pricing.

AS OF DECEMBER 31, 2014 AND 2013

(Expressed in Rupiah, unless otherwise stated)

(Continued)

PT TEXMACO PERKASA ENGINEERING Tbk AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS