WP No : K-PPE-5

MSId Prepared By :
Date :
BS
January 31, 2018

Reviewer : DG
Date : February 2, 2018
CLIENT : PT ABC Tbk Manager : JM
BALANCE DATE : December 30, 2017 Date : February 5, 2018
SUBJECT : Memo on Assessment of Impairment of Property, Plant and Equipment

OBJECTIVE:
To determine if there is indicator of impairment on the Company's Property, Plant and Equipment and to determine whether policy set is in
accordance with the provisions of the Indonesian Financial Accounting Standards (PSAK) 48, Impairment of Nonfinancial Assets.

BACKGROUND:

Based on PSAK 48 “Accounting for Impairment of Assets”, paragraph 6, “An asset is impaired when the carrying amount of the asset exceed its
recoverable amount. The reduction of the value of an asset is recognized as a loss in current operations. The Company assesses, at each balance
sheet date the indication of asset impairment. If there is any indication of that, the Company should estimate the recoverable amount. If the
recoverable amount is less than carrying amount, the carrying amount should be reduced to its recoverable amount. The reduction is recorded as
impairment loss and recognized as an expense. After recognition, the depreciation for the asset is adjusted in future year.”

PROCEDURES PERFORMED:
1. Inquired with the management the Company's policy on assessing impairment of its Property, Plant and Equipment.
2. Performed validation through observation and inspection of other available information; including plantation site visit.
3. Determined whether policy is in accordance with PSAK 48.
4. Noted any exceptions.

RESULTS:
No Criteria of Impairment Criteria fulfill? (Yes/No)
1 The technology, market, economic condition or legal in the company’s environment or market, which good or No
service distributed into is produced by the related asset, will be or have been degenerated significantly. The
technology, market, economic condition or legal in the company’s environment or market, which good or
service distributed into is produced by the related asset, will be or have been degenerated significantly.

2 The recoverable amount of an asset decreases significantly for certain periods and exceeds the decrease in No
asset value due to regular depreciation. See below fair values
3 There is evidence for obsolescence or unusable asset. No
4 There are significant changes that will or has been happened that could affect the useful life of asset. No
5 There is internal report about economic condition of an asset which is below or worse than expected. No
6 Actual cash flow is materially lower compared with estimated cash flow. No

Summary of the items noted were as follows:

The Company's Property, Plant and Equipment whose fair values are expected to be different from carrying values.

Based on test of additions and physical inspection of Property, Plant and Equipment, all items tested and vouched were valid, existing and properly
classified as part of the Company's Property, Plant and Equipment. Refer to test of additions at K-PPE___ and physical inspection at K-PPE-__.

Valuations were made on the basis of recent market transactions on arm’s length terms. Fair value is determined by reference to market-based
evidence. An appraisal report was made by _______________ dated 25 September 2017. Comparison of fair values and carrying values as of
December 31, 2017 is as follows:

Fair Value
Original Amount in Book Value Difference
MYR Rate in MYR IDR Equivalent
Land 1,430,000 3,550 5,076,500,000 2,000,000,000 3,076,500,000
Buildings & Machinery 80,375,000 3,550 285,331,250,000 203,023,881,295 82,307,368,705
Total 81,805,000 290,407,750,000 205,023,881,295 85,383,868,705

The Company’s management believes that there is no impairment in values of the aforementioned Property, Plant and Equipment as of December
31, 2017.

None of the above impairment indicators are present, hence, no impairment testing is performed.

CONCLUSION:
Based on the procedures performed, we conclude that Property, Plant and Equipment account as of December 31, 2017 is properly carried at
appropriate amount.