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POLY Annual+Report 2013
POLY Annual+Report 2013
Corporate Office:
Tel: + 62 21 57938555
Fax: + 62 21 57938565
Email: coporate@apf.co.id
Manufacturing facilities:
www.asiapacificfibers.com
ANNUAL REPORT
Asia Pacific Fibers
PT Asia Pacific Fibers Tbk (formerly PT Polysindo Eka Perkasa Tbk), established in 1984, is a leading
polyester manufacturer in Indonesia. Its manufacturing operations span the entire polyester production
chain, from raw materials to end products, ensuring quality and consistency. PT Asia Pacific Fibers is the
only integrated producer of polyester in Indonesia. The manufacturing facility for PTA, continuous polymer,
and staple fiber is located in Karawang, West Jawa. Filament yarn, produced at the largest yarn facility in
Indonesia, is located in Kendal, Central Jawa.
PT Asia Pacific Fibers’ current products include Purified Terephthalic Acid (PTA), polyester chips, polyester
staple fiber, polyester filament yarn, and performance fabrics. The Company´s products are marketed and
sold both in domestic and international markets.
The following is the report on the business performance of PT Asia Pacific Fibers Tbk in 2013. The term
“Company” used throughout the report refers to PT Asia Pacific Fibers Tbk and all its subsidiaries. The term
“APF” refers to PT Asia Pacific Fibers Tbk as a stand-alone entity, while the term “Texmaco Jaya” refers
exclusively to PT Texmaco Jaya Tbk.
st
The following table sets forth the financial highlights of the Company for the years ended 31 December
2009 to 2013.
The Company’s current auditors are Drs. Hendrawinata Eddy & Siddhartha (Indonesian Member firm of
Kreston International)
Notes:
(1)
Current Assets minus Current Liabilities
(2)
As Restated
Dear Shareholders,
The polyester industry witnessed a global down cycle in 2013 triggered by the over capacity of PTA in Asia,
mainly led by China. Polyester chain margins continued to remain depressed throughout the year primarily
driven by crash in PTA margins. Addition of huge extra capacity in PTA and polyester led to lower operating
rates worldwide. These factors coupled with a slowdown in consumption leading to stiff price competition
and a sharp fall in margins. Overall growth of polyester production has experienced a slower phase growing
at 4.6% and 5.5% year on year in 2012 and 2013 respectively. We expect that 2014 should end up being a
pivotal year of change in terms of polyester growth for fibers, PET and film.
The performance of PT Asia Pacific Fibers Tbk (the “Company”) during the 2013 has been severely affected
by the above factors leading to a significant drop in profitability. EBITDA for the year dipped to US$9.57
million on sales of US$565 million. Nonetheless, the Company was able to operate both its Karawang and
Kendal plants at optimum capacity through the year primarily supported by sustained domestic market
demand and its strong customer base. The Company increased its supply of its PSF and PFY products to
domestic market catering to over 200 downstream units and continued to provide essential raw material
to the textiles and clothing sector in Indonesia.
Despite the difficult business conditions, the Company is firmly moving ahead in its strategic objective to
emerge as a “Product Company”. Towards this end, the Company successfully completed the “Automotive
Yarn” project at its Kendal unit, with financial assistance from its majority creditors/shareholders, Damiano
Investments BV. This project will enable the Company to diversify into specialty and value added products
catering to niche markets.
The global economic recovery has been much slower in 2013 than expected. While the US economy has
strengthened and European economics are showing signs of escaping from their credit crisis, emerging
market economies have started slowing down. The global economic environment has become more
uncertain on account of this shift in the economic landscape. In line with this sluggish global economic
growth and heightened volatility in the financial markets, commodity prices have continued their
downward trend, confirming the end of the commodity super-cycle.
Indonesia's economy, Southeast Asia's largest, grew at its slowest pace in four years in 2013, but still
managed to beat expectations and showed signs of improvement despite being hard hit by emerging
market turmoil. Gross Domestic Product (GDP) moderated to 5.78% in 2013 from an average growth of
6.3% over the previous 3 years, as investments decelerated sharply. Another major challenge faced by the
country during the year was surging inflation driven by a fuel price hike and a jump in food prices.
Indonesian inflation rates hit a high of 8.4% in the year 2013 against the central bank’s target of 5.5%.
However, private consumption continued to remain robust, expanding by 5.3% and contributing to half of
the growth in GDP on the expenditure side. This private consumption growth represented a significant
driving force for the Indonesian economy.
Due to the sharp decline in commodity prices globally and the economic slow down, Indonesia’s exports in
value terms have fallen for a second year in a row, to US$182.57 billion in 2013 from US$190.02 billion (-
3.92%) with the textiles sector accounted for US$13.06 billion (7.15% of total exports). On the other hand,
Indonesian imports for the year declined to US$186.63 billion from US$191.69 billion (-2.64%) with the
import of capital goods falling significantly by 17.35% indicating a slowdown in capital formation needed to
boost domestic production.
During 2013, the Company continued its efforts to restructure its secured debts bilaterally with its secured
creditors and PT Perusahaan Pengelola Aset (Persero) (PPA). In the process, the Company has recently
submitted an updated Restructuring Proposal and sought the help of Ministry of Finance of the
Government of Indonesia to resolve the issue very soon. If this restructuring can be completed, the
Company will be in a strong position to significantly improve its financial standing and will be able to
implement its long-term growth plans.
We thank Mr. Masjhud Ali, who served as Director of the Company from 2002, and has retired from Board
of Directors of the Company in June 2013.We also welcome Mr. Bonar Firman Hasiholan Sirait has been
appointed as Director in the Annual General Meeting of the Shareholders held on 13 thJune 2013. The Board
of Commissioners wishes to place on record its appreciation to Mr. Masjhud Ali for his contribution to the
Company during his tenure and welcome Mr. Bonar as Director.
The Board of Commissioners also wishes to extend their appreciation to the Board of Directors and all the
employees of the Company for their commitment and dedication throughout 2013, which was a
challenging year where the Company continued to strengthen its strategic market position, whilst seeking
secured debt-restructuring solutions. The Company continued to improve its corporate governance
standards and ensure compliance with the various regulations and requirements promulgated by
BAPEPAM and BEI.
Finally, we wish to acknowledge our sincere gratitude to our customers, suppliers, and shareholders for
their continued support and the confidence they have entrusted to the Company in this critical transition
period.
Dear Shareholders:
Moderating investment, sluggish external demand and ending of a commodity boom curtailed growth in
Southeast Asia’s biggest economy in 2013. Amidst heightened volatility in the financial market and slower
Global economic recovery, Indonesia’s economic growth recorded its slowest pace in four years.
Indonesia’s GDP grew 5.78% as compared to 6.23% in the previous year. Growth in fixed investments
slowed to 4.7% in 2013 after a strong growth of about 9% annually in 2010- 2012. This clearly reflected the
impact of higher interest rates and weakening of the currency value on the investment front. However,
Indonesia’s domestic consumption continued to remain resilient, strongly contributing to the GDP growth.
Indonesia has also been hard hit by slowing demand for its key commodities exports, particularly from
China due to its economic slowdown as well as the fall in commodity prices world over. Country’ exports
has declined for a second successive year to US$182.57 billion as compared to US$190.02 billion, down by
3.92% from last year. Imports also had declined US$186.63 billion in 2013, registering a drop of 2.64% from
the previous year. Trade deficit had widened to a record level of US$4.10 billion for the full year 2013,
following US$1.70 billion deficit in 2012. A large current account deficit, surging inflation after withdrawal
of fuel subsidy, which hit a record high of 8.4% had added to the pressure on the economic growth. The
Indonesian rupiah, as a result of worsening fundamentals and concerns over the risk of capital outflows
triggered by the U.S. Fed tapering, weakened to 12,171 rupiahs per dollar at the end of 2013, compared to
9,793 rupiah at the end of 2012- fall of over 25%
To shore up the economy and to lift the battered currency, Bank of Indonesia raised its benchmark rate by
175 basis points since June to the current 7.5%. Jakarta stock exchange plummeted from a record high of
over 5000 to below 4000 mark in September, currently recovered to 4870.
Year 2013 was a very challenging for the trade and business in general and for Polyester sector in particular
where it undergone very turbulent period. The Global economic slowdown had an impending and
prolonged impact on the demand that has been further exacerbated by the excessive supply due to over
capacity of PTA, Polyester Fiber and Filament yarn in Asia, mainly led by China. This has triggered a global
down-cycle in the polyester chain, which has been lasting for an abnormally longer period and where many
of the Asian and Global manufacturers suffered considerably. The product spreads across the polyester
value chain continued to remain depressed due to stiff competition and the softening trend in cotton and
Rayon prices during the year.
Polyester and Raw material chain apparently reflect the current uncertainty and slow down of the global
economy and the overall growth of polyester production has slowed down in the past two years 2012 and
2013. With the effective capacity of about 17 million tons added in the last two years, PTA operating
dropped to 76% in 2013 from 90.2% and likely to fall below 74% in 2014 with rationalization of the regional
capacities. Polyester polymer production reaching 61.68 million tons, a growth of 3.2 million tons or 5.5%
in the year 2013, marginally improved from4.6% in 2012 as the global economy recovered in the second
half of 2013. Longer-term growth rates are trending better with over 6% look impressive compared with
other major petrochemical related business sectors.
On the other hand, domestic market continued to grow, strongly driven by the sustained domestic demand
with per-capita consumption rose to 6.84 Kg in 2013 from 6.22 Kg for the previous year. While the
domestic demand for polyester staple fiber increased by 12%, overshooting the production increase of 5%
in 2013, leading to significant increase in imports. The filament yarn demand rose by 6%, while the increase
in production was only 3% in 2013. With the imbalance in the Demand/supply gap of both Fiber and
Filament yarn, Domestic polyester upstream sector had resorted to capacity expansion aimed at making
Indonesia self sufficient in PSF & PFY and to provide import substitution primarily. Cheap imports of fiber
and Filament yarn in the past have brought pressure on the domestic prices and the industry is taking
appropriate trade remedies in terms of anti-dumping duties to overcome this problem. Supported by a
fairly good and sustained economic growth of 5.78% in 2013 and projected growth of 5.7% in 2014 with
the inflation under check, the consumer confidence level continues to remain robust boosting the
domestic consumption. The per capita consumption of textiles is projected to move up to 7.2 Kg in 2014
with corresponding increase in polyester consumption.
Textile exports in value terms had increased to US$13.12 billion (4.5% increase) in 2013 as compared to
US$12.56 billion in 2012, while the total volume of textile exports increased significantly by 13.2%, mainly
driven by yarn and fabrics exports. Whereas, textile imports in 2013 has fallen by 9% resulting in a net
trade surplus of US$5.90 billion in 2013, significantly contributing to the trade account balance.
Company Performance
The Company’s performance was significantly impacted by the down turn in the polyester chain margins,
triggered by unprecedented fall in PTA spreads coupled with rising energy costs and high inflation prevailed
during the year 2013; Slow recovery of global economy, highly volatile financial markets leading to tight
liquidity have further dampened the demand outlook. Despite the adverse trade conditions, the Company
was able to operate both of its plants at optimum capacity with high standards of efficiency, primarily
supported by the sustained demand from its customer base. The Company has posted a sales turn over of
US$572 million as compared to US$600 million in the previous year. Despite increased volume of
production and sales, the total sales revenue declined due to drop in selling prices for all products due to
fall in PTA prices and margins during the year. The company has therefore ended the year with an
operating loss of US$19.85 million as compared to the operating loss of US$23.51 million for the previous
year. Reduced operating loss during the year was primarily on account of foreign exchange gain of
US$31.41 million consequent to steep fall in Rupiah value. The Company’s EBITDA for the year 2013 has,
therefore, fallen significantly to US$9.57million as compared to an EBITDA of US$35.86 million for 2012.
Performance fabric division of the Company continue to sustain its good performance during the year 2013
by achieving sales revenue of US$13.69 million with an EBITDA of US$1.57 million.
Despite the tough business conditions and tight cash flow situation, the Company continued to move
towards its committed strategic direction of product and market diversification with its focused Capex
investments for specialty and value added products. We are pleased to inform that the Company has
successfully completed and commissioned its “Automotive Yarn Project” at its Kendal unit in November
2013. The Company has also taken up certain critical de-bottlenecking of its Polymer and Fiber Plants at
Karawang with a view to optimize its capacity and to go in for specialty polymer and fiber. With the
benefits of the on going Capex projects accruing to the Company effective 2014, the Company expects to
gain significant contribution to its future earnings.
Global economy is expected to grow by 3.7% in 2014 and 3.9% in 2015, primarily due to recovery in
advanced economies and the emerging economies to expand by 5.10% and 5.4% respectively. Indonesian
economy is projected to grow moderately at 5.3% - 5.5% in 2014 and 2015 and the growth will be primarily
driven by strong domestic consumptions and modest increase in exports to its major trading partners. The
Indonesian rupiah (IDR) is likely to remain under pressure in early 2014 amid uncertainty over the election
results and U.S. Fed tapering.
Domestic environment for manufacturing sectors expect to pass through a tough phase with the proposed
hike in energy and manpower costs. Both Gas prices and Electricity tariff are slated for a significant
increase in 2014 putting pressure on cost competitiveness of the domestic manufacturers. Industry is
taking up the matter with the ministry for phasing out the hike over a period of time instead at one go.
With regard to polyester upstream sector, with the additional capacity of Fiber and Filament yarn going on
stream, domestic market is expected to face a stiff price competition for commodity products. However,
the Company with its strong customer base, and with a diversified product mix is firmly placed to remain
competitive and maintain its leadership position.
The delay in finding a solution to its long pending secured debt restructuring continues to remain a set
back to carry out its growth plans. To expedite the process, the Company has recently submitted an
updated restructuring plan with alternate option to its secured creditors that are under active
consideration. Post restructure, the Company will have a sound and healthy financial base with its debts
brought down to sustainable levels. This would in turn enable the company to raise finance from market to
meet its short and long terms investments to fund its growth plans. All of these efforts will improve the
performance of the Company significantly, and to reposition it to the forefront of the polyester industry
and retain its strategic and leadership position.
We would like to take this opportunity to express our sincere gratitude to our Shareholders, Customers,
Suppliers, Bankers, and Employees who continue to support the Company during this challenging period
and continue to sustain our strategic position in the polyester industry.
V. Ravi Shankar
President Director
In accordance with its Articles of Association, Asia Pacific Fibers is managed by a Board of Directors under
the supervision of a Board of Commissioners. The members of the Board of Commissioners and the Board
of Directors are chosen and appointed by the shareholders of APF at the Annual General Meeting. The
Articles of Association permit the President Director to act alone, or where the President Director is unable
to act, any two directors to represent and act on behalf of the Board of Directors.
Robert Clive Appleby 51 President Commissioner of APF since 2007. Director and
Chief Investment officer of Asia Debt Management
Hongkong Limited (ADM). Prior to joining ADM, he was a
Managing Director of the Asian Fixed Income Division at
Credit Agricole Indosuez specializing in structured Asian
Debt.
Bonar Firman Hasiholan Sirait 66 Director of APF since 2013. He holds post-graduate degree in
Economics from University of Indonesia and completed Ph.D
in Economics from the same University. He also attended
various advanced management courses on HRD, Business re-
engineering, Personal management, Strategic Management
etc., in Singapore, Malaysia, France, Switzerland and Canada.
He was heading the HRD of APF since 2004 as a Senior Vice
President and was head of HRD of Texmaco Group since 1993.
Prior to that he was Personnel Director in Bata Shoes
Company.
Peter Vinzenz Merkle 56 Director of APF since 2007. He joined APF in 2000 as head of
the Karawang unit producing PTA, Polymer, and Fiber. Prior to
joining APF, he worked in various renowned chemical and fiber
companies such as Trevira Group and Hoechst AG as the head
of their R&D and Technology Development Divisions. He has
an MS in Chemical Engineering from University of Stuttgart,
Germany, specializing in polymer processing and
environmental technologies.
Board of Commissioner
• ROBERT C. APPLEBY
• CHRISTOPHER ROBERT BOTSFORD
• ROBERT McCARTHY
• KAMUN CHEONG
• TIMBUL THOMAS LUBIS
• DONO ISKANDAR D.
President Director
V. RAVI SHANKAR
Polyester and raw material chain continued to reflect the uncertainty of the global economy. Overall
growth of polyester production has slowed down to 5.50% in 2013. The softening of cotton price due to its
increased production and supplies and depressed PTA margins have impacted the performance of
Polyester industry globally. Polyester production growth in 2013 has certainly slowed to reflect the
economic conditions but the industry continues to add significant capacity with over 12-16 million tons of
new Fiber and Filament Yarn capacities still being added in the 2013-2017 timeframe, most of which again
is being built in Asia. With the rationalization of capacity and maintaining the utilization rate of PTA
production, the PTA margin is expected to improve from 2014 with the resultant margin improvement in
Polyester products.
Global petroleum prices have been less volatile during 2013 and the price has increased from a level of
USD 91.8/barrel (WTI) to USD 98.1/barrel in 2013. It is now hovering around USD 100/barrel level. The
Company’s primary raw material, Paraxylene and MEG price of which remained at a high level during 2013
without a corresponding increase in the finished polyester products due to resistance to price increase in
the downstream. The price levels of Paraxylene and MEG are expected to soften in 2014 from Q2 with
increased supply position along with improvement in PTA margin over Paraxylene.
Domestic market continued to remain strong with the increase in the per capita consumption of textile
products from 6.22 kgs in 2012 to 6.84 kgs in 2013. Domestic demand for both polyester staple fiber and
filament yarn increased significantly by 11.8% and 6.6% respectively in the year 2013 over previous year.
The import of staple fiber has also increased considerably during 2013 by 25% and filament yarn imports
increased by 8.4% over previous year. The increase in the imports is exerting pressure on the domestic
selling price and consequently margins. The domestic demand for polyester is expected to grow in the near
term, prices and margins will be under pressure due to stiff competition and cheap imports from China and
Malaysia.
Filament Yarn
In 2013, global polyester filament yarn production was estimated at 28.32 million tons as compared to
27.10 million tons in 2012, thus registering a growth of around 4.5%. The Company’s filament yarn
production continues to remain at optimum levels with increased value added and specialty yarn
production.
Performance Fabric
The performance fabric division continued to operate through a production tolling arrangement with its
erstwhile subsidiary, Texmaco Jaya. Even after the bankruptcy of PT Texmaco Jaya, the tolling
arrangements continued with the approval of the commercial court. The production and sales of
performance fabrics optimized during the year 2013.
Product Range
Human Resources
Asia Pacific Fibers recognizes that human resources are the core assets of the company and continuously
strives to nurture and develop the talents and skills to keep pace with the advancement in technology and
changing Customer needs. The needy employees are put on specialized training to upgrade their skill levels
with a view to provide career growth opportunities. A well-structured employees’ retention scheme based
on performance appraisal is in place to boost the motivation of the employees. The Company has also
recently implemented Health Insurance Scheme for its core employees. The employees are encouraged to
participate in collective decision-making process through well-established communication channels across
the organization and contribute to value creation. The Company endeavors to maintain harmonious
industrial relations and implemented a number of welfare measures such as education, health, and social
security to improve their social status. The Company has also formulated and implemented an Employee
Stock Option Plan to reward performance and promote a sense of belongingness amongst the employees.
Environment
With its strong commitment to environmental safety and protection, the Company is strictly adhering to
stringent emission norms of its effluents. The Company is fully compliant to all applicable environmental
standards of Indonesia, with Badan Pengendali Lingkungan (Bapedal) as its regulating authority. The
Company also installed and commissioned 100% waste recycling facility at Karawang (“Glycolysis”) to
convert all its waste into ‘green label products’ and to ensure ZERO waste from its production facilities.
In view of its tight working capital position and non completion of secured debt restructuring,
In January 2012, the Company sought and obtained approval of its unsecured creditors for extension 3
years time and re-schedule principal repayments commencing from February 2015 instead of February
2012. The majority New Note holders have approved the above request by the Company in their meeting
th
held on 16 January 2012 in Singapore. Due to tight cash flow situation, the Company sought and
obtained the approval of its unsecured creditors for capitalizing the interest on New Notes for the last 2
quarters ending in August and November 2013.
The Company has four subsidiaries: PT Texmaco Jaya Tbk. (Bankrupt – under liquidation), Polysindo
International Finance Company BV. (PIFC), Polysindo Mauritius Ltd., and PT Eastindo Polymertama
(Eastindo).
In the meantime, the Court has approved continued operation of its Fleece division as a going concern with
a view to maintain the value of the bankrupt assets. In accordance with the Court approval and pursuant to
the tolling agreement between the team of curators and PT Asia pacific Fibers, the Fleece division
continued to be operated on tolling basis.
Polysindo International Finance Company BV. (PIFC) and Polysindo (Mauritius) Ltd.
Polysindo International Finance Company BV (PIFC) and Polysindo (Mauritius) Ltd. are wholly owned
subsidiaries of PT. Asia Pacific Fibers Tbk and act as financing vehicle for APF. The double taxation treaty
between Indonesia and Mauritius has expired, hence APF intends to wind-up Polysindo (Mauritius) Ltd.
PT EastindoPolymertama (Eastindo)
Eastindo was originally formed to implement the expansion of PTA and polymer production in Karawang
which was later implemented through APF. As Eastindo has not engaged in any manufacturing activity, the
Company is planning to wind up PT Eastindo Polymertama.
Overview
The revenue of the company is derived from the sale of filament yarn, staple fiber, polyester chips, and
performance fabrics, both in domestic and export markets. Total sales in 2013 have decreased from the
previous year mainly due to drop in selling prices of filament yarn and staple fiber. The price drop on
account of declining polyester chain margins has caused drop in the sales revenue for the year. The rupiah
weakened drastically during the year and closed at Rp. 12,189 per USD as at 31 st December 2013,
compared to Rp. 9,670 per USD in 2012.
Pursuant to the Indonesian accounting standards 10 (PASK 10), the Company had changed the reporting
currency from IDR to USD with effect from 1st January 2012 and had accordingly published the financial
statements in US Dollar. Consequently the assets and liabilities of the Company was recalculated and
restated wherever necessitated.
Results of Operations
In 2013, net sales revenue was USD 565.14 million as compared to USD 599.33 million in 2012. The decline
in net sales in 2013 was primarily on account of drop in in the selling prices for polyester filament yarn and
staple fiber during the year. The drop in selling prices was on account of significant reduction in polyester
chain margins triggered by falling PTA prices and margins. Export sales were USD 87.159 million or 15.40%
of the net sales, and domestic sales were USD 477.99 million accounting for 84.60% of the net sales. Other
operational revenue was USD 6.60 million, realized through the sale of recycle products, indirect materials
and waste/scrap.
Net Income
The Company incurred net loss of USD 30.06 million in 2013, as compared to a net loss of USD 32.12
million in 2012. However, the Company posted an EBITDA of USD 9.57 million in 2012, compared to an
EBITDA of USD 36.84 million in 2012.
Business Risks
Polyester and raw material chain continued to reflect the uncertainty of the global economy and the
anticipation of likely demand growth in the major economies like China and India. Overall growth of
Debt Restructuring
The secured debt restructuring has not yet been completed, as the Company still awaits a response from
the PPA/MoF. Damiano Investments BV, the majority shareholders is also the majority holders of secured
debt, other than the PPA/MoF portion. Damiano Investments BV continued to provide working capital
loans and a Letter of Credit facility for the procurement of raw materials. This has helped the Company to
maintain optimum capacity utilization of the Company’s production facilities.
Corporate Governance
The Company has complied with the various statutory requirements of Indonesian Corporate Law, Capital
Market Law, and Stock Exchange Regulations.
The Board of Commissioners is represented by eminent people in the field of Finance, Economics, and Law,
in addition to the majority shareholders’ representatives. The Board of Commissioners meets on a
quarterly basis to review the operations of Board of Directors and the Company.
The Board of Directors of the Company meets frequently to review the operations of the Company and to
discuss and finalize important issues.
The Company’s Internal Audit Department is headed by Mr. YohanesBaptis Galuh Adjar Pamungkas, ably
assisted by experienced staff members. Internal audits on various functions are conducted concurrently
and the audit reports are being reviewed by the Independent Commissioner and the Board of Directors
periodically to ensure remedial actions.
The Company has a “Corporate Secretarial Department” headed by Mr. Tunaryo, and is being ably assisted
by experienced staff in the field of finance and legal affairs.
The Company has been disclosing material information to the shareholders, stakeholders, and the public.
The Company will continue to strive to bring more transparency and fairness in its reporting to its
shareholders, stakeholders, and the public.
Corporate Social Responsibility (CSR)
The Company has been continuosly and consistently participating in the community development
programme through its Corporate Social Responsibility Programmes (CSR) over the past several years as a
part of its commitment to create a value for society. APF has been actively involved, as a part of its social
obligation to create a better community and environment in and around its operational facilities. APF’s
major intiatives are in the field of education, health, environmental control, civic amenities, infrastructure
and development of vocational skills. APF has been carrying out these CSR activities on a more channelised
Education Programmes:
a. Construction of elementary school building in the Blendung Village, Klari, Karawang district.
b. Distribution of scholarships to students in Karawang and Kaliwungu region.
c. Contruction of educational facilities for pre-schooling (PAUD) in Cibuaya, Karawang, Madrasah
Ibtidaiyah in Cimahi and Tunggakjati, Karawang, and Primary School in Karanganyar, Karawang.
Environmental aspects:
a. “Go Green” movement in coordination with the University of Jenderal Sudirman Purwokerto
b. Planting of teakwood trees in Kaliwungu region.
Humanitarian Relief:
a. Renovation.reconstruction of flood effected schools Mangkang Kulon, Kendal.
b. Relief assistance to disaster effected people in Megelang and Padang.
c. Remodelling House for disanvantaged familied in Sumberejo, kaliwungu, Kendal.
Based on the notaries deed of Aryanti Artisari, SH, M.Kn. No 107 dated February 23, 2012, the
stockholders agreed to used their option right regarding the Management Employee Stock Option
Programme (MESOP). It was connected with the notarial deed of Sutjipto, SH No. 91 dated March
24, 2009 regarding the issuance of 118,845,397 new authorized shares series ‘C’ (5% of issued and
paid-up capital) without preemptive rights at par value of Rp 40 each. The execution price at March
5, 2012 is Rp 45 each, and the shares have been fully paid-up on February 20, 2012 and February 21,
2012. The shares also registered in the Indonesian Stock Exchange through announcement No. Peng-
P-00032/BEI.PPR/03-2012 dated March 5, 2012 and No. Peng-P-00033/BEI.PPR/03-2012 dated
March 7, 2012.
The Company obtained the approval for the change of name to PT Asia Pacific Fibers Tbk from
Minister of Justice on 10th November 2009 and Indonesian Investment Coordinating Board/BKPM on
2nd December 2009.
Serie C
Authorized Capital Rp 166,968,960,000
Nominal Value per share Rp 40
Paid-up Capital Rp 91,042,293,920
Shareholders
Damiano Investment 51.65%
KYOA Investment Limited 6.04%
PT. Multikarsa Investama* 5.26%
Public 37.05%
* Shares transferred by PT. Multikarasa Investama to PT. Bina Prima Perdana under IBRA restructuring. Registration
with Indonesia Stock Exchange yet to be completed.
Board of Directors
President Director Vasudevan Ravi Shankar
Director Bonar Firman Hasiholan Sirait
Director Seeniappa Jegatheesan
Director Peter Vinzenz Merkle
Company’s Activities
Engaged in the production of PTA, Polymer, Polyester Fiber, Filament Yarn, and Synthetic Fabrics.
Representative Office
The East 35th Floor, Unit 5-6-7
Jl. DR. Ide Anak Agung Gde Agung Kav. E3.2 No. 1
Jakarta 12950
Tel : (62-21) 579-38555
Fax : (62-21) 579-38565
Registered Office
Jl. Raya Kaliwungu Km. 19
Kaliwungu, Kendal,
Central Java - Indonesia
Tel : (62-24) 8660272
Fax : (62-24) 8660275
Manufacturing Facilities
Plant 1: Plant 2:
Desa Kiara Payung, Jl. Raya Kaliwungu Km. 19
Klari, Karawang Kaliwungu, Kendal,
West Java - Indonesia Central Java - Indonesia
Tel : (62-267) 431971 Tel : (62-24) 8660272
Fax : (62-267) 431975 Fax : (62-24) 8660275
We, the undersigned, certify that all the information in the Annual Report of PT Asia Pacific Fibers
Tbk. 2013, is complete and we are fully responsible for the accuracy of the contents.
Schedule
Declare that :
l. We are responsible for the preparation and presentation of the consolidated financial statements of PT Asia
Pacifrc Fibers Tbk and its Subsidiaries;
2. The consolidated financial statements of PT Asia Pacific Fibers Tbk and its Subsidiaries have been prepared
and presented in accordance with the Indonesian Financial Accounting Standards;
3. a. All information in the consolidated financial statements of PT AsiaPacific Fibers Tbk and its Subsidiaries
have been disclosed in a complete and truthful manner;
b. The consolidated financial statement of PT Asia Pacific Fibers Tbk and its Subsidiaries do not contain any
incorrect information or material fact, nor do they omit information or material fact;
4. We are responsible for PT Asia Pacific Fibers Tbk and its Subsidiaries' intemal contol system.
tu,{i;/*
PT.
No : 053al}2lISS/IIVl4
We have audited the accompanying consolidated financial statements of PT Asia Pasific Fibers Tbk
(the "Company") and its subsidiaries, which comprise the consolidated statement of financial position as of
December 31, 2013, and the consolidated statements of comprehensive income, changes in equity and cash flows
for the year then ended, and a summary of significant accounting policies and other explanatory information.
Management is responsible for the preparation and fair presentation of such consolidated financial statements in
accordance with Indonesian Financial Accounting Standards, and for such internal control as management
determines is necessary to enable the preparation of consolidated financial statements that are free from material
misstatement, whether due to fraud or enor.
Auditor's responsibility
Our responsibility is to express an opinion on such consolidated financial statements based on our audit. We
conducted our audit in accordance with Standards on Auditing established by the Indonesian Institute of Certified
Public Accountants. Those standards require that we comply with ethical requirements and plan and perform the
audit to obtain reasonable assurance about whether such consolidated financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the
risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk
assessments, the auditors consider internal control relevant to the entity's preparation and fair presentation of the
financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity's intemal control. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made
by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
Opinion
In our opinion, the accompanying consolidated financial statements present fairly, in all material
respects, the consolidated financial position of PT Asia Pasific Fibers Tbk and its subsidiaries as of
31 December 2013, and their consolidated financial performance and cash flows for the year then ended, in
accordance with Indonesian Financial Accounting Standards.
- ::i:se: 1095rr141Yi "L/?ALL l*ice nse: L2L2/ V\M.L/ 2A tL License: L22A / WM.U ZALL
:- ._rc!mo Sentral 3rd floor lntiland Tower 18tt- floor Kreston Building
- r-i.R. Rasuna Said Blok X-2 Kav" 5 Ji. Jend" $udirntan Kari. 32 Jl. Palang h4erah No. 40
- e i aila 1-2S50. lndonesia Jakarta l-0220. lndonesia Medan 20111. lndonesia
-: , : 62-21- 5290 0918 Tel.: 62'21 571- 2000 Tet.: 62-61 455 7925, 4L5 7295
:a.r. : 62-215290 0917 Fax": 62-21 570 6118, 57i- 1818 Fax.: 62-6L 451- 3l-59
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Page2
Emphasis of matter
The accompanying consolidated financial statements have been prepared assuming the Company and its
Subsidiaries will continue as a going concern. As disclosed in Note 2tothe consolidated financial itatements, as
of December 31,2013, the Company and its Subsidiaries had capital deficiency of US$ 827,900,780, while the
current liabilities exceeded its total of the assets by US$ 779,279,088. The Company and its Subsidiaries, current
liabilities as of December 31,2013 of US$ 965,681,551. or 85Vo of total current liabilities represent the secured
debts. Currently, the operations of the Company's facility in Karawang is still used the energy supplied by
PT Wismakarya Prasetya. On October 22, 2013, the Supreme Court has been declared the bankruptcy of
PT Wismakarya Prasetya. However, the Court has decided to keep PT Wismakarya Prasetya as a going .onr".n ut
it is supplying the energy requirement of the Company's facility in Karawang.In addition, based on thi agreement
dated November 16,2006, the Company has purchase advance balance as of December 31,2013 amounting to
US$ 30,499,214 from PT Wismakarya Prasetya. During the year 2014, the Company has reported this mattei to
curator of PT Wismakarya Prasetya. In the other that, as of the date of this report, one of the Company's secured
creditors is PT Perusahaan Pengelola Assets (PPA) (26Eo) has not yet given its approval on the resiruciuring plan
proposed by the Company. However, Damiano Investments BV., Netherland, a majority shareholder of ttte
Company (51.65Ea ownership) and majority secured debt holder (69Vo) provided working capital loan facility
totaling US$ 17,340,000 and letter of credit facility of US$ 87,910,672 for raw material procurement. Damiano
Investments BV., Netherland, still provides the requisite funds for the Company's expenses in subsequent year
through its Third Loan Agreement. The Company's management also continues to exert effort and expecis to
obtain the resolution of the secured debt restructuring in order for the Company to obtain working capital from
banks. The consolidated financial statements do not include adjustments that might result from the outcome of this
uncertainty.
Other matter
Our audit of the accompanying consolidated financial statements of the Company and its Subsidiaries as of
December 31, 2013 and for the year then ended was performed for the purpose of forming an opinion on such
consolidated financial statements taken as a whole. The accompanying financial information of PT Asia pacific
Fibers Tbk (parent entity only), which comprises the statement of financial position as of Decemb er 37, 2013, and,
the statements of comprehensive income, changes in equity and cash flows for the year then ended (collectively
referred to as the "Parent Entity Financial Information"), which is presented as a supplementary information to the
accompanying consolidated financial statements, is presented for the purpose of additional analysis and is not a
required part of the accompanying consolidated financial statements under Indonesian Financial Accounting
Standards. The Parent Entity Financial Information is the responsibility of management and was derived from and
relates directly to the underlying accounting and other records used to prepare the accompanying consolidated
financial statements. The Parent Entity Financial Information has been subjected to thJ auditing procedures
applied in the audit of the accompanying consolidated financial statements in accordance with Standards on
Auditing established by the Indonesian Institute of Certified Public Accountants. In our opinion, the parent Entity
Financial Information is fairly stated, in all material respects, in relation to the accompanying consolidated
financial statements taken as a whole.
The accompanying consolidated financial statements are intended to present the consolidated financial positions, results of
operations, and consolidated cash flows in accordance with accounting principles and practices generally accepted in
Indonesia and not that of any otherjurisdictions. The standards, procedures and practices to audit such consolidated financial
statements are those generally accepted and applied in Indonesia.
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
December 31, 2013 and 2012
CURRENT ASSETS
Cash and cash equivalents 3f,g,5 5,101,421 9,793,989
Trade receivables, net after allowance for
impairment of US$ 15,657,945 in 2013
and 2012
Third parties 3f,h,i,6 51,867,585 57,988,028
Related parties 3f,h,i,6 22,046,308 27,789,291
Other receivables, net after allowance for
impairment of US$ 36,721,575 in 2013
and 2012
Third parties 3f,h,i,7 3,355,148 3,300,907
Other current financial assets 3f,h,i,8 9,158,563 7,720,808
Inventories 3j,9 86,227,237 79,954,633
Purchase advances
Third parties 10 37,362,097 34,605,192
Related party 10 54,799 –
Prepaid taxes 3u,26a 18,903,911 14,786,048
Prepaid expenses 3k,11 1,691,803 1,101,627
NON–CURRENT ASSETS
Non-trade receivables from related parties, net
after allowance for impairment of
US$ 111,992,653 in 2013 and 2012 3f,h,i,12 24,836,407 32,474,040
Other non-current financial assets 3f,h,i,13 1,029,093 1,113,711
Property, plant and equipment, net after
accumulated depreciation of US$ 1,714,202,396
in 2013 and US$ 1,658,522,816 in 2012 3l,m,o,14 82,224,751 129,394,646
Intangible Assets 3n,o,15 12,087 12,750
Deferred tax assets 3u,26d 9,620,194 3,216,621
The accompanying notes to the consolidated financial statements are an integral part
of the consolidated financial statements
1
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Continued)
December 31, 2013 and 2012
CURRENT LIABILITIES
Trade payables
Third parties 3q,16 33,115,314 22,942,334
Related party 3q,16 – 7,150
Accrued expenses 3q,17 36,967,461 43,319,170
Taxes payable 3u,26b 1,741,319 1,751,095
Bank Loans 3q,18 87,910,672 78,752,462
Secured Debts 3q,19 965,681,557 1,000,263,703
Current portion of long-term liabilities:
Credit financing payables 3p,q,22 30,572 64,651
Other short-term financial liabilities 3q,23 6,323,597 4,150,965
NON–CURRENT LIABILITIES
Borrowing from Other Financial
Institutions :
Unsecured Debts and Notes Payable 3q,20 22,624,894 22,169,338
Working capital loans 3q,21 17,340,000 17,340,000
Credit financing payables 3p,q,22 27,132 55,535
Deferred revenues 3s,24 237,652 –
Long-term employee benefit liabilities 3t,25 9,392,014 10,274,737
The accompanying notes to the consolidated financial statements are an integral part
of the consolidated financial statements
2
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Continued)
December 31, 2013 and 2012
EQUITY (DEFICIENCY)
Share Capital
Authorized 12,357,255,040 shares at Rp 10,000
par value per Series A, Rp 1,000 par value
per Series B and Rp 40 par value per Series C
in 2013 and 2012
Issued and paid up 219,696,000 Series A and
2,276,057,347 Series C in 2013 and 2012 27 635,689,316 635,689,316
Additional paid-in capital 3v,28 624,344,507 624,344,507
Other components of equity 1c (21,339) (21,339)
Retained earnings (accumulated deficit)
Appropriated 29 2,345,301 2,345,301
Unappropriated (2,090,258,565) (2,060,196,634)
The accompanying notes to the consolidated financial statements are an integral part
of the consolidated financial statements
3
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the years ended December 31, 2013 and 2012
REVENUES
Net sales 3w,33 565,142,440 599,330,876
Other operating revenues 3w,34 6,604,835 1,200,875
Total revenues 571,747,275 600,531,751
722,105 (17,532,078 )
The accompanying notes to the consolidated financial statements are an integral part
of the consolidated financial statements
4
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the years ended December 31, 2013 and 2012
Balance as of December 31, 2011 635,165,191 624,325,603 (21,339) 2,345,301 (2,028,077,823) (766,263,067)
Balance as of December 31, 2012 635,689,316 624,344,507 (21,339) 2,345,301 (2,060,196,634) (797,838,849)
Balance as of December 31, 2013 635,689,316 624,344,507 (21,339) 2,345,301 (2,090,258,565) (827,900,780)
The accompanying notes to the consolidated financial statements are an integral part
of the consolidated financial statements
5
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31, 2013 and 2012
The accompanying notes to the consolidated financial statements are an integral part
of the consolidated financial statements
6
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
1. G E N E R A L
PT Asia Pacific Fibers Tbk (“the Company”) manufacturing of chemical and synthetic fiber,
weaving and knitting, and other activities related to the textile industry. The Company has 2 (two)
manufacturing plants, and marketed its product in both domestically and internationally, including
Europe, United States of America, Asia, Australia and the Middle East.
PT Asia Pacific Fibers Tbk was established within the framework of Domestic Capital Investment
Law No. 6 year 1968 as amended by Law No. 12 year 1970 based on notarial deed No. 22 dated
February 15, 1984 of Januar Tirtaamidjaja, S.H., public notary in Jakarta. The above laws were
subsequently amended by the Limited Liability Company Law of Republic of Indonesia No. 40
year 2007 dated August 16, 2007. The deed of establishment was approved by the Minister of
Justice of Republic of Indonesia based on decision letter No. C2–6107.HT.01.01.TH.84 dated
October 26, 1984 and was published in Supplement No. 3247 of State Gazette No. 72 dated
September 7, 1990.
The Article of Association has been amended based on notarial deed No. 92 dated March 24, 2009
of Sutjipto, S.H., notary in Jakarta to adjust the Company’s Article of Association with Bapepam-
LK No. IX.J.1 dated May 14, 2008 concerning the Principles of Association of Public Offering of
Conduct Equity Securities and Public Companies. The deed of establishment was approved by the
Minister of Justice of Republic of Indonesia based on decision letter No. AHU-
0052618.AH.01.09.Tahun 2009 dated August 14, 2009.
The Articles of Association have been amended based on notarial deed No. 50 dated September 10,
2009 of Sutjipto, S.H., public notary in Jakarta, concerning the change in the Company’s name
from PT Polysindo Eka Perkasa Tbk to PT Asia Pacific Fibers Tbk. The deed was approved by the
Minister of Law and Human Rights of the Republic Indonesia based on his decision letter
No. AHU-54294.AH.01.02.Tahun 2009 dated November 10, 2009 and the publishment in
Supplement No. 21449 of State Gazette No. 77 dated September 24, 2010.
The Articles of Association have been amended several times. The latest amendment of the
Company’s Articles of Association was based on the notarial deed No. 107 dated
February 23, 2012 of Aryanti Artisari, S.H., M.Kn., public notary in Jakarta, concerning the
implemented the Management Employee Stock Option Programme (MESOP) based on the Capital
Market and Financial Institution Supervisory Agency (BAPEPAM-LK)’s Regulation No. IX.D.4.
The deed was approved by the Minister of Law and Human Rights of Republic Indonesia based on
his decision letter No. AHU-0018443.AH.01.09.Tahun 2012 dated February 29, 2012.
On February 4, 2011, the Company obtained the approval from Chairman of the Capital
Investment Coordinating Board (BKPM) in his letter No. 2/B/II/PMDN/2011 with regard to the
cancellation of approval from Chairman of the Capital Investment Coordinating Board (BKPM) in
his letter No. 249/II/PMDN.1997 dated December 2, 1997.
7
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
1. G E N E R A L (Continued)
Further, the Company has received the approval of Chairman of the Capital Investment
Coordinating Board (BKPM) for the expansion of the Fibre capacity in Karawang side through the
approval letter No. 2/B/II/PMDN/2011 dated February 24, 2011. This project has started in the
second quarter of 2012.
In accordance with Article 3 of Company’s Article of Association, the Company’s objectives and
scope of activities is mainly to engage in the manufacturing of chemical and synthetic fiber,
weaving and knitting, and other activities related to the textile industry. The Company is domiciled
in Kendal, Central Java with its plants located in Kendal, Central Java and Karawang, West Java.
The Company’s representative office is located at The East Building, 35th Floor, Jl. DR. Ide Anak
Agung Gde Agung (formerly Jalan Lingkar Mega Kuningan) Kav. E-3.2 No. 1, Jakarta. The
Company started its commercial operations in 1986.
The Company has many ongoing social activities in the local environs of its two plant location in
Semarang and Karawang which the purpose of this activity is to improve the livelihood of the
surrounding communities. In order to carry out these programmes more effectively, the Company
has established a foundation “Yayasan Asia Pacific Fibre” on January 15, 2010. The deed was
approved by the Minister of Justice and Human Rights of Republic of Indonesia based on decision
letter No. AHU-960.AH.01.04.Tahun 2010 dated March 15, 2010.
b. Public Offering of Shares, Notes Payable of the Company and its Subsidiaries
• On December 14, 1990, the Company offered 12,000,000 shares to the public through Jakarta
and Surabaya Stock Exchanges, now known as Indonesian Stock Exchange.
• On October 8, 1993, the Company obtained the notice of effectivity from the Chairman of
Capital Market Supervisory Agency (BAPEPAM), in his letter No. S-1738/PM/1993, for its
limited offering of 184,000,000 shares through rights issue with preemptive rights to
stockholders. These shares were listed in Jakarta and Surabaya Stock Exchanges on November
1, 1993.
• On December 15, 1994, the Company obtained the notice of effectivity from the Chairman of
BAPEPAM, in his decision letter No. S-2027/PM/1994, for the change of par value from
Rp 1,000 to Rp 500 per share.
8
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
1. GENERAL (Continued)
b. Public Offering of Shares, Notes Payable of the Company and its Subsidiaries (Continued)
• On May 20, 1996, the Company obtained the notice of effectivity from the Chairman of
BAPEPAM, in his decision letter No. S-778/PM/1996, for its offering of 1,104,000,000 shares
through rights issue II with preemptive rights to stockholders. These shares were listed in
Jakarta and Surabaya Stock Exchanges on June 10, 1996.
• On December 11, 1997, the Company obtained the notice of effectivity from the Chairman of
BAPEPAM, in his decision leter No. S-2844/PM/1997, for its offering of 2,185,920,000 shares
through rights issue III with preemptive rights to stockholders. These shares were listed in
Jakarta and Surabaya Stock Exchanges on January 5, 1998.
• In 1994, the Company issued US$ 125,000,000 Unsecured Senior Notes which are listed in
Luxembourg. In 1996, the Company offered to the holders of said unsecured notes to exchange
their notes with US$ 125,000,000 Guaranteed Senior Notes issued by PIFC with the Company
as the guarantor. These notes were listed in Luxembourg Stock Exchange.
• In 1996, PIFC, with the Company as a guarantor, also issued US$ 50,000,000 Secured Floating
Rate Notes and US$ 260,000,000 Guaranteed Secured Notes which were listed in Luxembourg
Stock Exchange.
• In 1997, PIFC, with the Company as a guarantor, issued US$ 250,000,000 Guaranteed Secured
Notes which were listed in Luxembourg Stock Exchange.
• Since January 2000, the above notes issued by PIFC were delisted from Luxembourg Stock
Exchange.
• Beginning of December 2004, all of the Company’s outstanding shares totaling 4,393,920,000
shares were suspended regarding the bankruptcy proceeding against the Company and delay in
submitting the required consolidated financial statements. The Company’s shares were still
suspended after the Company removes their bankruptcy. However, the Company took efforts
to remove its suspension which includes submitting Company’s future plan of actions. Further
in July 2006, all of the Company’s shares resumed trading.
• In 2006, The Company converted the unsecured debt amounted to 43,144,238,750 shares as
part of the implementation of Composition Plan which have been approved and ratified by the
Commercial Court. Based on the condition issued by Indonesian Stock Exchange, the new
shares can not be traded for 1 (one) year. Further in October 2007, the new Company’s shares
were traded.
9
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
1. GENERAL (Continued)
b. Public Offering of Shares, Notes Payable of the Company and its Subsidiaries (Continued)
• On October 10, 2008, the Subsidiary’s shares (PT Texmaco Jaya Tbk) have been delisted from
the Indonesian Stock Exchange based on its letter No. S-04741/BEI.PSR/09/2008 and
Peng-004/BEI.PSR/DEL/09-2008 due to the suspension of trading shares and going concern
problem of the Subsidiary.
• Since December 2, 2009, the Company’s shares in Indonesian Stock Exchange have been
changed with the new Company’s name.
• Based on the Extraordinary General Stockholders Meeting (RUPSLB) held on March 24, 2009
and based on notarial deed No. 91 dated March 24, 2009 of Sutjipto, S.H., public notary in
Jakarta, the stockholders approved the issuance of 118,845,397 new authorized shares series C
(5% of issued and paid-up capital) without preemptive rights, for providing stock options to
the Company’s management and employees (Management Employee Stock Option
Programme / MESOP). The notarial deed was approved by the Minister of Justice of Republic
of Indonesia based on his decision letter No. AHU-0052619.AH.01.09.Tahun 2009 dated
August 14, 2009. As per the Company’s schedule that was reported to Indonesian Stock
Exchange dated March 17, 2009, its programme has been implemented at the latest period
(February 1, 2012).
Further, based on the notarial deed No. 107 dated February 23, 2012 of Aryanti Artisari, S.H.,
M.Kn., public notary in Jakarta, the Management Employee Stock Option Programme /
MESOP) has been implemented with the execution price of Rp 45 each. All shares under
MESOP have been fully paid up through the Company’s bank accounts dated February 20 and
21, 2012. It has been registered in the Indonesian Stock Exchange through announcement No.
Peng-P-00032/BEI.PPR/03-2012 dated March 5, 2012 and No. Peng-P-00033/BEI.PPR/03-
2012 dated March 7, 2012.
10
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
1. G E N E R A L (Continued)
b. Public Offering of Shares, Notes Payable of the Company and its Subsidiaries (Continued)
• Based on the Extraordinary General Stockholders Meeting (RUPSLB) held on June 18, 2012
and based on the notarial deed No. 88 dated June 18, 2012 of Aryanti Artisari, S.H., M.Kn.,
public notary in Jakarta, the stockholders approved the issuance of 74,872,600 new authorized
shares series C (3% of issued and paid-up capital) without preemptive rights, for providing
stock options to the Company’s management and employees (Management Employee Stock
Option Programme / MESOP). Up to December 31, 2013, the Company has not issued shares
under this scheme. The Company has sent a letter No. 118/APF-CS/XII/2013 dated December
19, 2013 to OJK for the extension of period till June 30, 2014 due to current market
conditions.
c. Consolidated Subsidiaries
*) Not applicable due to PT Texmaco Jaya Tbk (TJ) and PT Texmaco Graha Busana (TGB)
deconsolidation.
• In 2001, the Company acquired 10,000 shares which represent 100% ownership in Polysindo
(Mauritius) Ltd. The shares were acquired for the amount of US$ 10,000. The difference
between the acquisition cost and the net assets of PML amounted to Rp 221,924,188
(equivalent to US$ 21,339) was recorded as “difference on restructuring among companies
under common control” account as part of the other component equity in the consolidated
statements of financial position.
11
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
1. G E N E R A L (Continued)
• There were no transactions between the Company and Polysindo (Maurutius) Ltd and
Polysindo International Finance Company BV during 2013 and 2012. The Company intends to
close the operation of its subsidiaries along with the restructuring of the Company.
• Since April 2008, PT Texmaco Jaya Tbk (TJ) operations (Fleece division) are conducted by
the Company with tolling basis.
• Since the second semester of 2004, PT Texmaco Graha Busana has halted its business
operations.
The composition of the Company’s board of commissioners and directors as of December 31,
2013 and 2012 are as follows :
2013 2012
Board of Commissioners :
President Commissioner : Mr. Robert Clive Appleby Mr. Robert Clive Appleby
Independent Commissioners : Mr. Dono Iskandar Djojosubroto Mr. Dono Iskandar Djojosubroto
Mr. Timbul Thomas Lubis S.H. Mr. Timbul Thomas Lubis S.H.
Commissioners : Mrs. Cheong Kamun Mrs. Cheong Kamun
Mr. Christopher Robert Botsford Mr. Christopher Robert Botsford
Mr. Robert Mc Carthy Mr. Robert Mc Carthy
Board of Directors :
President Director : Mr. Vasudevan Ravi Shankar Mr. Vasudevan Ravi Shankar
Directors : Mr. Bonar Firman Hasiholan Mr. Masjhud Ali
Sirait
Mr. Seeniappa Jegatheesan Mr. Seeniappa Jegatheesan
Mr. Peter Vinzenz Merkle Mr. Peter Vinzenz Merkle
Mr. Masjhud Ali, one of the Directors of the Company, was resigned from the Board of
Directors based on the notarial deed of Aryanti Artisari, S.H., M.Kn. No. 66 dated June 13,
2013.
• To comply with BAPEPAM regulation No. IX.1.5 regarding the forming and work guidance
of Audit Committee, the Board of Commissioners has formed Audit Committee.
12
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
1. G E N E R A L (Continued)
The members of the Company’s Audit Committee as of December 31, 2013 and 2012 are as
follows :
• The Company’s corporate secretary as of December 31, 2013 and 2012 is Mr. Tunaryo.
• In February 2009, the Company formed an internal audit department to comply with
BAPEPAM-LK regulation. The head of internal audit is Mr. Yohanes Baptis Galuh Adjar
Pamungkas.
• As at December 31, 2013, the Company had 3,063 permanent employees (2012 : 3,507
permanent employees). And as at December 31, 2013 and 2012, the Subsidiaries do not have
permanent employees.
The consolidated financial statements of PT Asia Pacific Fibers Tbk were authorized by the Board
of Directors on March 17, 2014.
a. Going Concern
Polyester and raw material chain continued to reflect the uncertainty of the global economy and the
anticipation of likely demand growth in the major economies like China and India. Overall growth
of polyester production has slowed down to just 4.60% and 5.50% in 2012 and 2013. PTA margins
continue to remain depressed through the year and hit the bottom by the end of the year. Huge
capacity additions in PTA, Polyester fiber and filament led to lower operating rates world wide
putting further downward pressure on polyester chain margins. Cotton prices also remained soft
through out the season with increased production and supply. These factors have impacted the
performance of Polyester Industry globally. Global economic downturns driven by European debt
concerns and US economic concerns continued to impact the Global textile trade leading to
sluggish demand outlook.
13
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
This dampened market conditions and uncertainty have severely impacted the performance of
polyester industry globally and in Indonesia as well. Despite the market conditions, the Company
continues to operate its plant to its near full capacity supported by its strong customer base and the
sustained demand from domestic market. The Company has also carried out its committed Capex
investment plans and completed the strategically important project of “Automotive Yarn” during
the year 2013. Damiano Investments BV., Netherland has been providing the requisite funds for
the above-mentioned capital expenditure through III Loan facility, besides increasing its working
capital funding to US$ 92 million from US$ 84 million.
While the Paraxylene supply position has been balanced-to-tight and continued to be the star
performer in the chain with high operating rates at 89% global average. PTA market remained
depressed due to huge capacity additions and the margins nose dived to hit the new bottom by the
end of the year. Consequently, the selling prices of PSF and PFY were under pressure during the
year and margins squeezed to the lowest levels through the year. Hence the sales revenue has
dropped significantly to US$ 571 million as compared to US$ 600 million for the previous year,
despite increase in volume of production and sales.
The hike in the cost of gas, electricity and manpower had a cascading effect on the cost of
productions that further dented the profitability of the Company. However, the Performance
Fabrics division of the Company continued to improve its performance during 2013 by achieving
sales revenue of US$ 13.69 million with an EBITDA of US$ 1.57 million. The consolidated
EBITDA, however, dipped to US$ 9.55 million from the previous level of US$ 36 million. With
the result of lower profitability cash flow position remained extremely tight through the year.
Prudent working capital management has helped the Company to tide over tough phase and
operate the plants at optimum capacity. To tide over the difficult cash flow situation, Damiano
Investments BV has provided additional working capital by increasing the letter of credit facility
up US$ 92 million. To augment its working capital requirements, the Company continued with the
pre-finance facility from the market.
Due to the tight cash flow situation caused by significant dip in the earnings, Company could not
service of interest to its unsecured creditors (New Notes) fully during the year; Interest amounts
due for the quarter ended August 15, 2013 and November 15, 2013 to unsecured creditors were
capitalized as per the approval from the majority of the creditors.
14
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
PTA margins are expected to recover in 2014, and stage further recovery beyond 2015 with the
anticipated rationalization of PTA capacities, softness in PX supply and price coupled with
improved downstream consumption. Despite fluctuations in the price, polyester sector will grow
over 6.00% in the next 3 years. Strengthening of cotton prices due to anticipated shortfall in
production would help stabilizing the polyester prices and demand during the year.
The Company with its capability to increase the volume of specialty products and cost effective
production of commodity products, will be able to face the competition and sustain its market
share besides making entry into new market segments. This will enable the Company to sustain its
financial performance on a longer term.
The Company has submitted a revised Secured Debt Restructuring Plan (SDRP) to PT Perusahaan
Pengelola Asset (PPA) on February 10, 2014 updated with the current conditions of the Company.
The major terms of the revised Secured Debt Restructuring Plan (SDRP) are as follows:
• The allocation of New debt is based on the principal value of debt as at September 30, 2013
(Non- US$ loans are converted into US$ at the BI exchange rates of September 2013)
• Interest on New Notes Interest shall be payable on the New Notes quarterly in arrears and
calculated on the outstanding principal amount of the New Notes
during the quarter at the per annum rates shown in the table below:
15
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
• Debt Restructuring New Secured Debt will be exchanged at 8.224 Cents per US$1. The
Company will issue further shares of 3,038,067,822 representing
54.90% of the post diluted shares, taking into account the MSOP
shares issued by the Company in 2012. Out of which
2,818,371,822equity shares representing 50.93% will allotted to
Secured Creditors through the Debt/Equity swap as proposed in the
SDRP.
Until March 2014, the Company is still waiting the response from PT Perusahaan Pengelola Aset
(PPA) regarding the new SDRP. Upon completion of this restructuring, and the consequent
reorganization of its consolidated statements of financial position, the Company is confident of
securing a formal working capital lending from a conventional banking sources.
PT Wismakarya Prasetya (WKP), which is supplying 100% energy requirement of the Company’s
facility at Karawang, has been declared bankrupt effective on October 22, 2013 by the Supreme
Court, Jakarta as per its verdict no:440k/Pdt.sus. PAILIT/2013 dated October 22, 2013, based on
the debt claim filed by its creditors. However, the Court has decided to keep WKP as a going
concern as it is supplying the energy requirement of Karawang facility vide its decision vide no:
440K/PDT.SUS/PAILIT/2013 j.o. No : 05/Pdt.sus/PKPU/2013/PN.Niaga.Jkt.Pst. dated on
February 13, 2014. The Company is in the process entering into a rental agreement of WKP
facilities with the curator of PT WKP to ensure uninterrupted supply of power, steam and gas. APF
will continue to operate and maintain the power plant with proper upkeep of the facilities of WKP.
In addition, the Company and its Subsidiaries’ consolidated financial condition in 2013 showed the
following :
In 2013, there was a significant improvement in the capacity utilization of APF facilities in
Karawang and Semarang. It achieved a capacity utilization level of more than 95% in both the
facilities.
16
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
In the meantime, the Court has approved continued operation of its Fleece division as a going
concern with a view to maintain the value of the bankrupt assets. In accordance with the Court
approval and pursuant to the tolling agreement between the team of curators and PT Asia Pacific
Fibers Tbk, the Fleece division continued to be operated on tolling basis.
Pursuant to PSAK 10 (revised 2010), the Company and its Subsidiaries have determined US Dollar
as its functional currency as predominant financial transaction such as Sales, Purchases, Pricing
etc., are transacted in US Dollar currency. Hence the Company and its Subsidiaries have chosen to
prepare and present its consolidated financial statements in US Dollar currency effective January
2012. The consolidated financial statements was prepared in accordance with the guidelines
provided under PSAK 10 paragraph 27-34 and paragraph 61-62 and recalculated/ restated its assets
and liabilities wherever required.
The accompanying consolidated financial statements have been prepared on a going concern basis,
and do not include any adjustment that might result from the outcome of these uncertainties.
Related effects will be reported in the consolidated financial statements as they become known and
can be estimated. To date, the Company, in running its operations is supported through the letter of
credit facility and other working capital loans from Damiano Investments BV., Netherland and
through the confidence and support of its suppliers and customers.
In addition, Damiano Investments BV., Netherlands confirmed that it will provide the assistance to
the Company in obtaining letter of credit facilities until such time that the Company can secure a
credit facility from banks on its own. Damiano Investments BV., Netherland has also provided the
requisite funds for the Company’s capital expenses programs in 2012 through its III Loan
agreement.
17
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
b. Debt Restructuring
The Company has executed the restructuring agreement with the unsecured creditors as approved
by the creditors and ratified by the Court. Accordingly, the total unsecured loans after the
restructuring stands at US$ 18,670,630 plus unpaid capitalized interest until November 2013 of
US$ 3,954,264 or amounted to US$ 22,624,894. The Company has also submitted restructuring
proposal to the secured creditors (SDRP). In March 2007, the Company reissued the SDRP
Proposal to all of its secured creditors, including PPA, as the earlier SDRP proposal has time
barred. However, no response has been received from PT Perusahaan Pengelola Aset (PPA) on the
proposal. The proposal has the support of Damiano Investment BV., Netherland, the majority
holder of the other secured debts of the Company. Subsequently on the Company has submitted a
revised Secured Debt Restructuring to PPA and other Secured Creditors updated with the current
conditions of the industry and the Company’s performance levels. The summary of the revised
terms of the SDRP was indicated above.
The Company has taken all the required corporate actions towards the implementation of the
Composition Plan (“Peace Plan”) as approved by the unsecured creditors of the Company and
ratified by the Commercial Court. The steps involve the issuance of the new debts secured or
unsecured in exchange of the old unsecured debts and issuance of shares for the reduction of the
principal amount of debts as per the terms of the Composition Plan. The Company has reduced its
unsecured debts as per the Composition Plan and increased its share capital as additional capital
pending allotment to the creditors. The Company has appointed The Hongkong and Shanghai
Banking Corporation Limited, Hong Kong to act as its Fiscal Agent, Paying Agent and Trustees
for its new unsecured notes which are euro-cleared.
In January 2012, the Company sought and got the approval of its Unsecured New Note Holders for
the extension of its maturity from February 2012 to February 2015. The details as of December 31,
2013 are as below:
18
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
c. Economic Condition
Amid continued Global financial turmoil and uncertainty, Indonesia’s GDP growth fell to 5.80% in
2013 as against 6.20% in 2012. There was a sharp decline in the exports in 2013, which stood at
US$ 182.57 billion as against the exports of US$ 190.02 billion in 2012. The inflation in 2013 shot
upto 8.37% from 4.32% in 2012. The main reason for the high inflation rate was the removal of
subsidy for oil. Despite slower global growth and continued uncertainty in the global financial
market, Indonesia’s economic growth remained better than other countries in ASEAN. Indonesia's
resilience to the global economic slowdown and its strong growth in domestic consumption driving
the robust economic growth, have made it an attractive destination for foreign
investments.Indonesia has posted a negative annual trade deficit in 2013 with imports at US$ 186.6
billion and exports of US$ 182.6 billion. This has put an enormous pressure on rupiah coupled
with high inflation rate resulting in rupiah depreciating by 26% during the year. The exchange rate
of Rupiah vis-a-vis US$ which stood at Rp 9,670 in 2012 depreciated to Rp 12,189 at the end of
2013. However, it is also to be noted that almost all countries witnessed a sharp depreciation of
their currency against US$ during this year.
The economic outlook for Indonesia in 2014 remains positive despite a weak global economy, but
maintaining strong investment growth is vital. The World Bank projects a marginal rise in GDP in
2014. This projection assumes that domestic consumption and investment growth remain strong,
while improving growth in Indonesia’s major trading partners supports a modest recovery in
exports. The inflation seems to have come under control with tight control over the prices of
essential commodities in the beginning of 2014 and as result inflation eased to around 5% level in
the first quarter of 2014.
However, domestic environment for manufacturing sectors expect to undergo a tough phase with
the looming escalatory trend on two major fronts viz., manpower and energy. Both Gas prices and
Electricity tariff have increased in 2013 and are bound to increase further in 2014 and beyond.
These factors will add to the pressure on cost competitiveness of the domestic manufacturers.
19
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
The consolidated financial statements of PT Asia Pacific Fibers Tbk have been prepared in
accordance with the Indonesian Financial Accounting Standards (“SAK”) comprising of the
Statements of Financial Accounting Standards (“PSAK”) and its Interpretation Financial
Accounting Standards (“ISAK”), and Financial Institution Suprvisory Agency (BAPEPAM-LK)’s
Regulation No. VIII.G.7 regarding the Presentations and Disclosures of Financial Statements of
listed entity, enclosed in the decision letter No. KEP-347/BL/2012 and the Circular Letter No. SE-
17/BL/2012. The consolidated financial statements are in compliance with the applicable SAK
without exception.
The consolidated financial statements for the years ended December 31, 2013 and 2012 have been
prepared in accordance with PSAK No. 1 (Revised 2009), “Presentation of Financial Statements”.
In accordance with PSAK No. 1 (Revised 2009), the consolidated statement of comprehensive
income has been presented in the consolidated financial statements. The Company and its
Subsidiaries have been elected to present all items of income and expense in the single statement.
And in relation to the PSAK No. 4 (Revised 2009), “Consolidated and Separate Financial
Statements”, the Company has measured investment in subsidiaries using cost method.
As of August 19, 2011, the Commercial Court had declared that the Subsidiary (PT Texmaco Jaya
Tbk) is bankruptcy and insolvency effective on September 26, 2011. Effective this period, the
Subsidiary becomes subject to the control of the Court, and causing the Company loss its controls.
The consolidated financial statements have been prepared on the historical cost basis of
accounting, except for the certain accounts are prepared based on the other measurement that are
more fully described in the accounting policies below. The consolidated financial statements are
prepared under the accrual basis of accounting, except for the statement of cash flows.
The consolidated statements of cash flows are prepared using the direct method and present the
sources and uses of cash and cash equivalents according to operating, investing and financing
activities. Cash and cash equivalents consist of cash on hand, cash in banks and deposits with
original maturitites of 3 (three) months or less.
The reporting currency used in preparation of the consolidated financial statements is US Dollar,
which is also the Company’s functional and presentation currency. All figures presented in the
consolidated financial statements are stated at absolute amounts of US Dollar (“US$”), unless
otherwise specified.
b. Principles of Consolidation
The consolidated financial statements incorporate the financial statements of the Company and
entities controlled by the Company (its subsidiaries). Control is achieved where the Company has
the power to govern the financial and operating policies of an entity so as to obtain benefits from
its activities.
20
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
The results of subsidiaries acquired or disposed of during the year are included in the consolidated
statement of comprehensive income from the effective date of acquisition and up to the effective
date of disposal, as appropriate.
Where necessary, adjustments are made to the financial statements of the subsidiaries to bring the
accounting policies used in line with those used by the Company.
All intra-group transactions, balances, income and expenses are eliminated on consolidation.
Non-controlling interests in subsidiaries are identified separately and presented within equity.
Effective January 1, 2011, the interest of non-controlling shareholders maybe initially measured
either at fair value or at the non-controlling interests’ proportionate share of the fair value of the
acquiree’s identifiable net asset. The choice of measurement is made on acquisition by acquisition
basis.
Subsequent to acquisition, the carrying amount of non-controlling interests is the amount of those
interests at initial recognition plus non-controlling interests’ share of subsequent changes in equity.
Total comprehensive income is attributed to non-controlling interests even if this results in the
non-controlling interests having a deficit balance.
Changes of the Company interests in subsidiaries that do not result in a loss of control are
accounted for as equity transactions. The carrying amounts of the Company and its subsidiaries
interests and the non-controlling interests are adjusted to reflect the changes in their relative
interests in the subsidiaries. Any difference between the amount by which the non-controlling
interests are adjusted and the fair value of the consideration paid or received is recognized directly
in equity and attributable to owners of the Company.
According to PSAK No. 4 (Revised 2009), when the Company losses control of a Subsidiary, the
Company should derecognizes the assets (including any goodwill) and liabilities of the Subsidiary
at their carrying amount at the date when the control is lost. Also, derecognizes the carrying
amount of any non-controlling interests in the former Subsidiary at the date when control is lost
(including any component of other comprehensive income attributable to them).
21
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
The Company has carried forward and opted to present as a separate item within equity, the
remaining balance related to the effect of prior year’s capital transactions of the Subsidiary with
third parties.
Items included in the financial statements of each of the Company and its Subsidiaries are
measured using the currency of the primary economic environment in which the entity
operates (“functional currency”).
The consolidated financial statements are presented in US Dollar, which is the functional and
presentation currency of the Company and its Subsidiaries.
Foreign currency transactions are translated into US Dollar using the exchange rates prevailing
at the dates of the transactions. At each reporting date, monetary assets and liabilities
denominated in foreign currencies are translated into US Dollar using the closing exchange
rate. Exchange rate used as benchmark is the rate which is issued by Bank Indonesia.
Foreign exchange gains and losses resulting from the settlement of such transactions and from
the translation at period-end exchange rates of monetary assets and liabilities denominated in
foreign currencies are recognized in the consolidated statement of comprehensive income.
22
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
The Company and its Subsidiaries enters into transactions with related parties as defined in PSAK
7 (Revised 2010) “Related Party Disclosure”. Related party is principally defined as follows:
(i) A person or a close member of that person’s family is related to a reporting entity if that
person:
• Has control or joint control over the reporting entity.
• Has significant influence over the reporting entity.
• Is a member of the key management personnel of the reporting entity or of a parent of
reporting entity.
(ii) An entity is related to a reporting entity if any of the following conditions applies :
• The entity and the reporting entity are members of the same group (which means that each
parent, subsidiary and fellow subsidiary is related to the others).
• One entity is an associate or joint venture of the other entity (or an associate or joint
venture of a member of a group of which the other entity is a member).
• Both entities are joint ventures of the same third party.
• One entity is a joint venture of a third entity and the other entity is an associate of the third
entity.
• The entity is a post-employment defined benefit plan for the benefit of employees of either
the reporting entity or an entity related to the reporting entity. If the reporting entity is
itself such a plan, the sponsoring employers are also related to the reporting entity.
• The entity is controlled or jointly controlled by a person identified in (i).
• A person identified in (i) has significant influence over the entity or is a member of the key
management personnel of the entity (or of a parent of the entity).
All significant transactions and balances with related parties, whether or not conducted under
normal terms and conditions similar to those with third parties are disclosed in Note 41.
The revision of SFAS 60, “Financial Instrument : Disclosure” with an effective date January 1,
2013 did not result in changes to the Company and its Subsidiaries’ accounting policies and had no
effect on the amounts reported for current period or prior financial years.
The revision to SFAS 38, “Business Combination on Entities under Common Control” and IFAS
21, “Agreements for Construction for Real Estate” with an effective date January 1, 2013 will not
impact or not relevant to the consolidated financial statements. The implementation of IFAS 21,
“Agreements for Construction for Real Estate” which would previously have been mandatorily
applied have been postponed until further notice by the Indonesian Financial Accounting Standards
Board.
23
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
Discussed below are the impacts on the consolidated financial statements of these new and revised
accounting standards.
• IFAS 21 : Agreements for Construction for Real Estate. This Interpretation applies to the
accounting for revenue and associated expenses by entities that undertake the construction of
real estate directly or through subcontractors. Agreements in the scope of this Interpretation are
agreements for the construction of real estate. In addition to the construction of real estate,
such agreements may include the delivery of other goods or services.
f. Financial assets
Non derivatives financial assets are classified into the following categories: financial assets at fair
value through profit or loss, loans and receivables, held-to-maturity investments and available-for-
sale financial assets. The classification depends on the purpose for which the financial assets were
acquired. Management determines the classification of its financial assets at initial recognition.
Regular purchases and sales of financial assets are recognized on their trade date. Financial assets
that are not carried at fair value through profit or loss are initially recognized at fair value plus the
transaction cost. Financial assets carried at fair value through profit or loss is initially recognized at
fair value and transaction costs are expensed in the consolidated statements of comprehensive
income. Financial assets are derecognised when the contractual rights to the cash flows from the
asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which
substantially all the risks and rewards of ownership of the financial asset are transferred. Any
interest in such transferred financial assets that is created or retained by the Company and its
Subsidiaries are recognised as a separate asset or liability.
24
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
Financial assets and liabilities are offset and the net amount presented in the consolidated
statements of financial position when, and only when, the Company and its Subsidiaries have a
legal right to offset the amounts and intends either to settle them on a net basis or to realise the
asset and settle the liability simultaneously.
Loans and receivables are non-derivative financial assets with fixed or determinable payments that
are not quoted in the active market. They arise when the Company and its Subsidiaries provide
money, goods or services directly to a debtor with no intention of trading the receivables. They are
included in current assets, except for maturities greater than 12 months after the end of reporting
period. These are classified as non-current assets.
Loans and receivables are subsequently measured at amortized cost using the effective interest
method, less impairment loss, if any. Any change in their value is recognized in the consolidated
statements of comprehensive income. Impairment loss is provided when there is objective evidence
that the Company and its Subsidiaries will not be able to collect all amounts due to it in accordance
with the original terms of the receivables. The amount of the impairment loss is determined as the
difference between the assets’ carrying amount and the present value of estimated cash flows.
The Company and its Subsidiaries’ financial assets categorized as loans and receivables are
presented as Cash and Cash Equivalents, Trade Receivables, Other Receivables, Other Current
Financial Assets, Non-trade Receivables from Related Parties, and Other Non-Current Financial
Assets in the consolidated statement of financial position.
All income and expenses, including impairment losses, relating to financial assets that are
recognized and presented as part of finance costs in the consolidated statement of comprehensive
income.
Non-compounding interest, dividend income and other cash flows resulting from holding financial
assets are recognized in consolidated profit or loss when earned, regardless of how the related
carrying amount of financial assets is measured.
Cash and cash equivalents comprise cash balances and call deposits with maturities of three
months or less from the acquisition date that are not subject to an insignificant risk of changes in
their fair value, and are used by the Company and its Subsidiaries in the management of its short-
term commitments.
25
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
Trade receivables are amounts due from customers for product sold performed in the ordinary
course of business. If collection is expected in one year or less (or in the normal operating cycle of
the business if longer), they are classified as current assets. If not, they are presented as non-current
assets.
Non-trade receivables from related parties are receivables balance reflecting loan given to related
parties of the Company and its Subsidiaries.
Trade and non-trade receivables are recognized initially at fair value and subsequently measured at
amortized cost using the effective interest method, if the impact of discounting is significant, less
any provision for impairment.
Collectability of trade and non-trade receivables is reviewed on an ongoing basis. Debts which are
known to be uncollectible are written off by reducing the carrying amount directly. An allowance
account is used when there is objective evidence that the Company and its Subsidiaries will not be
able to collect all amounts due according to the original terms of the receivables.
Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or
financial reorganization and default or delinquency in payments are considered indicators that the
trade receivable is impaired. The amount of the impairment allowance is difference between the
asset’s carrying amount and the present value of estimated future cash flows, discounted at the
original effective interest rate. Cash flows relating to short-term receivables are not discounted if
the effect of discounting is immaterial.
The amount of the impairment loss is recognized in the consolidated statement of comprehensive
income within “general and administrative expenses”. When a trade and non-trade receivables for
which an impairment allowance had been recognized becomes uncollectible in a subsequent
period, it is written off against the allowance account. Subsequent recoveries of amounts
previously written off are credited against “miscellaneous income (expense), net” in the
consolidated statement of comprehensive income.
A financial asset not classified as at fair value through profit or loss is assessed at each reporting
date to determine whether there is objective evidence that it is impaired. A financial asset is
impaired if there is objective evidence of impairment as a result of one or more events that
occurred after the initial recognition of the asset, and that loss event had an impact on the estimated
future cash flows of that asset that can be estimated reliably.
26
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
Objective evidence that financial assets are impaired includes default or delinquency by a debtor,
restructuring of an amount due to the Company and its Subsidiaries on terms that the debitur would
not consider otherwise, indications that a debtor or issuer will enter bankruptcy, adverse changes in
the payment status of borrowers or issuers, economic conditions that correlate with defaults or the
disappearance of an active market for a security.
The Company and its Subsidiaries considers evidence of impairment for financial assets (loans and
receivables) measured at amortized cost both at specific asset level and collective level. All
individually significant assets are assessed for specific impairment. Those found not to be
specifically impaired are then collectively assessed for any impairment that has been incurred but
not yet identified. Assets that are not individually significant are collectively assessed for
impairment by grouping together assets with similar risk characteristics.
In assessing collective impairment, the Company and its Subsidiaries uses historical trends of the
probability of default, the timing of recoveries and the amount of loss incurred, adjusted for
management’s judgment as to whether current economic and credit conditions are such that the
actual losses are likely to be greater or lesser than suggested by historical trends.
An impairment loss in respect of a financial asset measured at amortized cost is calculated as the
difference between its carrying amount and the present value of the estimated future cash flows
discounted at the asset’s original effective interest rate. Losses are recognized in the consolidated
statements of comprehensive income and reflected in an impairment account against loans and
receivables. Interest on the impaired asset continues to be recognized. When an event occurring
after the impairment was recognized causes the amount of impairment loss to decrease, the
decrease in impairment loss is reversed through consolidated statements of comprehensive income.
j. Inventories
Inventories are carried at the lower of cost and net realizable value. Cost of inventories is
determined using on the average method, and includes expenditure incurred in acquiring the
inventories, production or conversion costs, and other costs incurred in bringing them to their
existing location and condition. In the case of manufactured inventories and work in progress, cost
includes an appropriate share of production overheads based on normal operating capacity. Net
realizable value is the estimated selling price in the ordinary course of business less the estimated
costs of completion and the estimated costs necessary to make the sale.
27
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
j. Inventories (Continued)
A provision for impairment regarding the obsolete and slow moving inventory is determined on the
basis of estimated future usage or sale of individual inventory items. The amount of any write-
down of inventories to net realizable value and all losses of inventories are recognized as an
expense in the period the write-down or loss occurs. The amount of any reversal of any write-down
of inventories, arising from an increase in net realizable value, is recognized as a reduction in the
amount of inventories recognized as an expense in the period in which the reversal occurs.
k. Prepaid Expenses
Prepaid expenses are charged to operations over the periods benefit using the straight-line method.
Items of property, plant and equipment are measured at cost, less accumulated depreciation and
any accumulated impairment losses, if any, since the Company and its Subsidiaries adopt the cost
model.
Cost includes expenditure that is directly attributable to the acquisition of the asset.
When parts of an item of property, plant and equipment have different useful lives, they are
accounted for as separate items (major components) of property, plant and equipment.
Any gain or loss on disposal of an item of property, plant and equipment (calculated as the
difference between the net proceeds from disposal and the carrying amount of the item) is
recognized in the consolidated statements of comprehensive income.
Subsequent expenditure is capitalized only when it is probable that the future economic benefits
associated with the expenditure will flow to the Company and its Subsidiaries. Ongoing repairs and
maintenance are expensed as incurred.
Items of property, plant and equipment are depreciated from the date they are available for use or,
in respect of self-constructed assets, from the date that the asset is completed and ready for use.
Depreciation is calculated to write off the cost of items of property, plant and equipment less their
estimated residual values using the straight-line basis over their estimated useful lives.
Depreciation is generally recognized in the consolidated statements of comprehensive income,
unless the amount is included in the carrying amount of another asset.
28
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
Depreciation methods, useful lives and residual values are reviewed at each reporting date and
adjusted if appropriate.
Depreciation is recognized on straight-line basis to write down the depreciable amount of property,
plant and equipment, except land. The estimated useful lives are as follows:
Years
Initial legal costs incurred to obtain legal rights are recognized as part of the acquisition cost of the
land, and these costs are not depreciated. Cost related to renewal of land rights are recognized as
intangible assets and amortized during the period of the land rights.
m. Contruction in Progress
Construction in progress is stated at cost and presented as part of property, plant and equipment.
The accumulated cost will be reclassified to the appropriated property, plant and equipment
account when the construction is substantially completed and the asset is ready for its intended use.
n. Intangible asset
The certain cost associated with the renewal of legal titles on the landrights are deferred and
amortized during twenty (20) years, effective since April 2012.
The Company and its Subsidiaries’ property, plant and equipment and intangible assets are tested
for impairment whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable.
For purposes of assessing impairment, assets are grouped at the lowest levels for which there are
separately identifiable cash flows. An impairment loss is recognized for the amount by which the
asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of
an asset’s net selling price and value in use.
29
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
p. Leases
Determination whether an arrangement is, or contains, a lease is made based on the substance of
the arrangement and assessment of whether fulfillment of the arrangement is dependent on the use
of a specific asset or assets, and the arrangement convey a right to use the asset.
Leases in which a significant portion of the risks and rewards of ownership are retained by the
lessor are classified as operating leases, Payments made under operating lease (net of any
incentives received from the lessor) are charged to consolidated statement of comprehensive
income on a straight-line basis over the term of the lease.
Each lease payment is allocated between the liability and finance charges so as to achieve a
effective rate on the finance balance outstanding. The corresponding rental obligations, net of
finance charges, are included in “Credit Financing Payables”. The interest element of the finance
cost is charged to the consolidated statement of comprehensive income over the lease period so as
to produce an effective interest rate on the remaining balance of the liability for each period.
q. Financial Liabilities
The Company and its Subsidiaries initially recognizes liabilities on the date that they are
originated. All other financial liabilities are recognized initially on the trade date, which is the date
that the Company and its Subsidiaries becomes a party to the contractual provisions of the
instrument.
The Company and its Subsidiaries classify non-derivative financial liabilities into the other
financial liabilities category which comprise Trade Payables, Accrued Expenses, Bank Loans,
Secured Debts, Other Short-term Financial Liabilities, and Borrowing from Other Financial
Institution (such as : Credit Financing Payables, Unsecured Debts and Notes Payables and
Working Capital Loans). Such financial liabilities are recognized initially at fair value less any
directly attributable transaction costs. Subsequent to initial recognition, these financial liabilities
are measured at amortized cost; any difference between the proceeds (net of transaction costs) and
the redemption value is recognized in the consolidated statement of comprehensive income over
the period of the borrowings using the effective interest method.
Bank Loans, Secured Debts, Borrowing from Other Financial Institution are raised for support of
short-term funding of operations.
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary
course of business from suppliers. Accounts payable are classified as current liabilities if payment
is due within one year or less (or in the normal operating cycle of the business if longer). If not,
they are presented as non-current liabilities.
The Company and its Subsidiaries derecognizes a financial liability when its contractual
obligations are discharged, cancelled or expire.
30
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
Fair value is defined as the amount at which the financial instruments could be exchanged in a
current transaction between knowledgeable, willing parties in an arm’s length transaction, other
than in a forced sale or liquidation. Fair values are obtained from quoted prices, discounted cash
flow models, as appropriate.
The fair values less any estimated credit adjustments for financial assets and liabilities with a
maturity of less than one year are assumed to approximate to their fair values. The fair value of
financial liabilities for disclosure purposes is estimated by discounting the future contractual cash
flows at the current market interest rate available to the entity for similar financial instruments.
s. Government Grant
Government grants are assistance by government in the form of transfers of resources to an entity
in return for past or future compliance with certain conditions relating to the operating activities of
the entity.
And the grants related to assets are government grants whose primary condition is that an entity
qualifying for them should purchase, construct or otherwise acquire long-term assets.
A Government grant is recognized only when there is reasonable assurance that the entity will
comply with any conditions attached to the grant and the grant will be received.
There are two broad approaches to the accounting for government grants : the capital approach,
under which a grant is recognized outside the consolidated statement of comprehensive income,
and the income approach, under which a grant is recognized in the consolidated statement of
comprehensive income over one or more period.
The Company adopts the income approach model and they recognized a government grants
through deferred income. It will be amortized as income over the period necessary to match them
with related cost of property, plant and equipments, for which they are intended to compensate, on
a systematic basis (20 years).
t. Employees’ Benefit
Short-term employee benefits are recognized when they accrue to the employees.
31
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
Post-employment benefits such as retirement, severance and service payments are calculated
based on Labour Law No. 13/2003 (“Law 13/2003”). In accordance with Law 13/2003, the
Company and its Subsidairies have further payment obligations if the benefits provided by the
existing plan do not adequately cover the obligations under Law 13/2003.
A defined benefit plan is a post-employment benefit plan other than a defined contribution
plan. The Company and its Subsidiaries’ net obligation in respect of defined benefit plans is
calculated separately for each plan by estimating the amount of future benefit that employees
have earned in return for their service in the current and prior periods. That benefit is
discounted to determine its present value. Any unrecognized past service costs and the fair
value of any plan assets are deducted.
Typically, defined benefit plans define an amount of pension benefit that an employee will
receive on retirement, usually dependent on one or more factors such as age, years of service
and compensation.
The present value of the defined benefit obligation is determined by discounting the estimated
future cash outflows using interest rates of Government Bonds (considering currently there is
no deep market for high-quality corporate bonds) that are denominated in the currency in
which the benefits will be paid, and that have terms to maturity approximating to the terms of
the related pension obligation.
Actuarial gains and losses arising from experience adjustments and changes in actuarial
assumptions charged or credited to consolidated statement of comprehensive income in the
period in which they arise. The accumulated unrecognized actuarial gains and losses that
exceed 10% of the present value of the entity’s defined benefit obligations is recognized on a
straight-line basis over the expected average remaining working lives of the participating
employees.
32
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
The Company and its Subsidiaries shall recognize termination benefits as a liability and an
expense when, and only when, the Company and its Subsidiaries are demontrably committed
to either, terminate the employment of employee before the normal retirement date, or provide
termination benefits as a result of an offer made in order to encourage voluntary redundancy
based on a detailed formal plan and without realistic possibility of withdrawal. Where
termination beenfits fall due more than 12 months after the reporting period, they should be
discounted using the discount rate.
(iv) Bonus
The Company and its Subsidiaries recognized a liability and an expense for bonuses based on a
formula that takes into consideration the profit attributable to the Company and its
Subsidiaries’ shareholder after certain adjustments. The Company and its Subsidiaries
recognized a provision where contractually obliged or where there is a past practice that has
created a constructive obligation.
u. Income Tax
The income tax expense comprises current and deferred income tax. Tax is recognized in the
consolidated statements of comprehensive income account, except to the extent that it relates to
items recognized directly to equity and other comprehensive income.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively
enacted at the reporting date. Management periodically evaluates positions taken in tax returns
with respect to situations in which applicable tax regulation is subject to interpretation. It
establishes provision where appropriate on the basis of amounts expected to be paid to the tax
authorities.
Deferred income tax is recognized, using the consolidated statements of financial position method,
on temporary differences arising between the tax bases of assets and liabilities and their carrying
amounts in the consolidated financial statements. Deferred income tax is determined using tax
rates that have been enacted or substantially enacted as at reporting period and is expected to apply
when the related deferred income tax asset is realized or the deferred income tax liability is settled.
33
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
Deferred income tax assets are recognized only to the extent that it is probable that future taxable
profit will be available against which the temporary differences can be utilized.
Amendments to tax obligations are recorded when an assessment is received or, for assessment
amounts appealed against by the Company and its Subsidiaries, when : (1) the result of the appeal
is determined, unless there is significant uncertainty as to the outcome of such appeal, in which
case the impact of the amendment of tax obligations based on an assessment is recognized at the
time making such appeal, or (2) at the time based on knowledge of developments in similar cases
involving matters appealed by the Company and its Subsidiaries, based on rulings by the Tax
Court or the Supreme Court, that a positive outcome of the Company and its Subsidiaries’ appeals
is adjudged to be significantly uncertain, in which event the impact of an amendment of tax
obligations based on the assessment amounts appealed is recognized.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to
offset current tax assets against current tax liabilities and when the deferred income taxes assets
and liabilities relate to income taxes levied by the same taxation authority on either the same
taxable entity or different taxable entities where there is an intention to settle the balances on a net
basis.
Expenses related to the issuance of the Company’s shares to the public were deferred and
amortized over a ten-year period using the straight-line method. In 1997, the Company opted to
amortize the remaining balance of this account over five years. Based on BAPEPAM’s decision
letter KEP-No.06/PM/2000 dated March 13, 2000, the share issuance costs were retroactively
recorded into “Additional Paid-in Capital”.
Revenue comprises the fair value of the consideration received or receivable for the sale of goods
in the ordinary course of the Company and its Subsidiaries’ activities. Revenue is shown net of
value-added tax, returns, rebates and discounts.
The Company and its Subsidiaries recognizes revenue when the amount of revenue can be reliably
measured; it is probable that future economic benefits will flow to the entity; and when specific
criteria have been met for each of the Company and its Subsidiaries’ activities as described below.
The Company and its Subsidiaries bases its estimates on historical results, taking into
consideration the type of customer, the type of transaction and the specifics of each arrangement.
34
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the
entity and the revenue can be reliably measured. The following specific recognition criteria must
also be met before revenue is recognized:
(i) Sale of goods – Revenue is recognized when the risks and rewards of ownership of the goods
have passed to the buyer, i.e. generally when the goods are delivered to the customers.
(ii) Interest income – Revenue is recognized as the interest accrues taking into account the
effective yield of the asset.
Expenses are recognized upon utilization of the service or at the date they are incurred.
Basic earnings per share are calculated by dividing the profit (loss) attributable to the equity
holders of the Company by the weighted average number of ordinary shares outstanding during the
period.
Diluted earning per share is calculated by adjusting the weighted average number of ordinary
shares outstanding.
y. Segment Information
Operating segments are reported in a manner consistent with the internal reporting provided to the
chief operating decision-maker. The chief operating decision-maker, who is responsible for
allocating resources and assessing performance of the operating segments, has been identified as
Board of Director that makes strategic decisions.
1. that engages in business activities from which it may earn revenue and incur expenses
(including revenue and expenses relating to the transaction with other components of the
same entity).
2. whose operating results are reviewed regularly by the entity’s chief operating decision maker
to make decision about resources to be allocated to the segments and assess its performance.
3. for which discrete financial information is available.
35
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
The preparation of the consolidated financial statements in conformity with PSAK requires
management to make judgments, estimates and assumptions that affect the application of accounting
policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ
from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognized in the period in which the estimates are revised and
in any future periods affected.
The estimates and assumptions that have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next 12 months are addressed below.
Functional currency
The functional currency of the Company and its Subsidiaries are the currency of the primary economic
environment in which each entity operates. The Company and its Subsidiaries consider some factors in
determining its functional currency, among others, the currency that mainly influences the revenue,
cost and financing activities, and the currency in which receipts from operating activities are usually
retained.
Based on the economic substance of the underlying circumstances relevant to the Company and its
Subsidiaries, the functional currency has been determined to be United States Dollar (US$), as this
reflected the fact that majority of the Company and its Subsidiaries’ operational businesses are
influenced by pricing in internationally commodity markets with a United States’ economic
environment (US$).
The Company and its Subsidiaries performs regular review of the age and status of its receivables,
designed to identify accounts with objective evidence of impairment and provides these with the
appropriate allowance for impairment losses. The review is accomplished using a combination of
specific and collective assessment approaches, with the impairment losses being determined for each
risk grouping identified by the Company and its Subsidiaries. The amount and timing of recorded
expenses for any period would differ if the Company and its Subsidiaries made different judgments or
utilized different methodologies.
As of December 31, 2013 and 2012, total allowance for impairment losses recognized on the Company
and its Subsidiaries’s receivables amounted to US$ 164,372,173 (see Notes 6, 7 and 12).
In determining the net realizable value (NRV) of inventories, the Company and its Subsidiaries
consider inventory obsolescence, damages, physical deterioration, changes in price levels, changes in
consumer demands, or other causes to identify inventories which are to be written down to NRV. The
Company and its Subsidiaries adjusts the cost of inventories to recoverable amount at a level
considered adequate to reflect market decline in the value of the inventories. As of December 31, 2013
and 2012, there is no allowance for impairment losses recognized on the Company and its Subsidiaries’
inventories (see Note 9).
36
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
PSAK requires that an impairment review be performed on property, plant and equipment and
intangible assets when events or changes in circumstances indicate that the carrying amount may not
be recoverable. Determining the net recoverable amount of assets requires the estimation of cash flows
expected to be generated from the continued use and ultimate disposition of such assets. While it is
believed that the assumptions used in the estimation of fair values reflected in the financial statements
are appropriate and reasonable, significant changes in these assumptions may materially affect the
assessment of recoverable amounts and any resulting impairment loss could have a material adverse
impact on the results of operations.
As of December 31, 2013 and 2012, there was no allowance for impairment losses recognized on the
Company and its Subsidiaries’ property, plant and equipment and intangible assets (see Notes 14 and
15).
The present value of the pension obligations depends on a number of factors that are determined on an
actuarial basis using a number of assumptions. The assumptions used in determining the net
cost/(income) for pensions include the discount rate and future salary increase. Any changes in these
assumptions will have an impact on the carrying amount of pension obligations.
The discount rate is interest rate that should be used to determine the present value of estimated future
cash outflows expected to be required to settle the pension obligations. In determining the appropriate
discount rate, the Company and its Subsidiaries consider the interest rates of government bonds that are
denominated in the currency in which the benefits will be paid and that have terms to maturity
approximating the terms of the related pension obligation. For the rate of future salary increases, the
Company and its Subsidiaries collect all historical data relating to changes in base salaries and adjusts
it for future business plans.
Other key assumptions for pension obligations are based in part on current market conditions.
Additional information is disclosed in Note 25.
Management uses valuation techniques in measuring the fair value of financial instruments where
active market quotes are not available. In applying the valuation techniques, management makes
maximum use of market inputs, and uses estimates and assumptions that are, as far as possible,
consistent with observable data that market participants would use in pricing the instrument. Where
applicable data is not observable, management uses its best estimate about the assumptions that market
participants would make. These estimates may vary from the actual prices that would be achieved in an
arm’s length transaction at the reporting date.
37
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
Determining the provision for corporate income tax requires significant judgment by management.
There are certain transactions and computation for which the ultimate tax determination is uncertain
during the ordinary course of business. The Company and its Subsidiaries recognize liabilities for
expected corporate income tax issues based on estimates of whether additional corporate income tax
will be due. Where the final tax outcome of these matters is different from the amount that are initially
recorded, such differences will have an impact on the current and deferred tax assets and liabilities in
the period in which such determination is made.
The Company and its Subsidiaries conducted a review of the carrying amount of deferred tax assets at
every reporting period and reduce the value of such assets by as much as possible cannot be realized,
where the availability of taxable income allow to use all or part of the deferred tax assets. The
Company and its Subsidiaries’ review on the recognition of deferred tax assets for deductible
temporary difference can be deductible based on the level and timing from the estimated taxable
income for the next reporting period. The estimation is based on the achievement of the Company and
its Subsidiaries in the past and future expectation toward income and expenses, as well as with the tax
planning strategies in the future. But there is no certainty that the Company and its Subsidiaries can
generate sufficient taxable income to allow use of part or all of these deferred tax assets.
Cash on hand :
Rupiah 46,205 37,789
European Euro 3,343 8,315
US Dollar 28,177 27,650
Singapore Dollar 6,260 6,644
Norwegian Krone 173 170
84,158 80,568
Cash in banks :
Third Parties :
Deutsche Bank, Jakarta
US Dollar account 2,658,800 7,780,057
Rupiah account 1,549,669 935,461
38
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
5,017,263 9,713,421
• All accounts in banks earn interest at floating rates based on the offered rate from each bank.
• The Company and its Subsidiaries do not have related party relationship with the banks where cash
and cash equivalents are placed.
• In 2013, the Company’s cash on hand were not covered by insurance, and in 2012, the Company’s
cash on hand were covered by insurance with PT Asuransi Rama Satria Wibawa against direct loss
or damage to the cash and cheque of Rp 3,900,000,000 (equivalent to US$ 403,309), respectively.
• The maximum exposure to credit risk at the end of the reporting period is the carrying amount of
each class of cash and cash equivalents is disclosed in Note 47.
6. TRADE RECEIVABLES
Third parties :
2013 2012
US$ US$
39
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
Due to the short-term nature of trade receivables from third parties, their carrying amount
approximates their fair values.
2013 2012
US$ US$
As of December 31, 2013, trade receivable of US$ 129,854 (2012 : US$ 92,537) were past due but not
impaired. These relate to a number of individual customers for whom there is no recent history of
default.
The details of trade receivables from third parties based on currencies are as follows :
2013 2012
US$ US$
Rupiah
Rp 2,467,263,482 in 2013 and
Rp 2,019,778,766 in 2012 202,417 208,871
All amounts of trade receivables from third parties do not bear any interest and have been reviewed for
indication of impairment. Based on the review of the status of individual trade receivables from third
parties, the Company and its Subsidiaries’ management determined that the trade receivables from third
parties are not impaired.
The maximum exposure to credit risk at the reporting date is the carrying value of each class of
receivable is disclosed in Note 47.
40
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
Related parties :
2013 2012
US$ US$
Due to the short-term nature of trade receivables from related parties, their carrying amount
approximates their fair values.
2013 2012
US$ US$
Up to 1 month – –
> 1 month – 3 months – –
> 3 months – 6 months – –
> 6 months – 1 year – –
> 1 year 37,704,253 43,447,236
Changes in the allowance for impairment from related parties are as follows :
2013 2012
US$ US$
41
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
The details of trade receivables from related parties based on currencies are as follows :
2013 2012
US$ US$
Rupiah
Rp 268,722,447,174 in 2013 and 2012 22,046,308 27,789,291
All amounts of trade receivables from related parties do not bear any interest and have been reviewed
for indication of impairment. Based on the review of the status of the trade receivables from related
parties, management believes that the carrying value is a reasonable approximation of fair value. The
impairment was not provided since the related party, PT Multikarsa Investama, is under debt
restructuring and the settlement of the receivables from related parties will be done when the debt
restructuring is completed.
The maximum exposure to credit risk at the reporting date is the carrying value of each class of
receivable is disclosed in Note 47.
In 2013 and 2012, all trade receivables are used as collateral for the Company’s bank loans and
working capital loans that were received from Damiano Investments BV., Netherland (Notes 18 and
21).
7. OTHER RECEIVABLES
2013 2012
US$ US$
Third parties :
Receivables from purchase discounts 1,039,025 646,363
MESOP Receivables 224,779 341,499
Insurance claims 297,082 –
Receivables from import clearance 95,990 144,976
Receivables from employees 53,204 33,612
Interest receivables on time deposits 553 4,486
Others 267,541 369,615
1,978,174 1,540,551
42
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
2013 2012
US$ US$
Other receivables from these above companies represent the loans and advances for working capital
purposes. The loans and advances are not subject to interest and have no terms of repayment. Until
now, these companies are unable to pay their payables to the Company and its Subsidiaries due to their
financial difficulties. Most of the companies have already stopped operations and are still under the
restructuring program with PT Perusahaan Pengelola Asset (PPA). As of March 31, 2014, the debt
restructuring program has not yet been completed.
43
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
MESOP receivables are due to loans given to selected employees for purchasing the Company’s shares
on the MESOP programme (Note 27). These amounts are being recovered from the employees during
1 (one) period.
Other receivables from employees represent advances to employees. These advances are not subject to
interest and the payments are made based on the terms of the repayment schedule.
Due to the short-term nature of other receivables, their carrying amount approximates their fair values.
2013 2012
US$ US$
Rupiah
Rp 19,475,029,024 in 2013 and
Rp 20,275,727,220 in 2012 1,597,754 2,096,766
All amounts of other receivables have been reviewed for indication of impairment. Based on the
review of the status of individual other receivables, the Company and its Subsidiaries’ management
believe that the impairment of other receivables are adequate to cover possible losses on uncollectible
other receivables.
The maximum exposure to credit risk at the reporting date is the carrying value of each class of
receivable is disclosed in Note 47.
44
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
2013 2012
US$ US$
Time deposits :
Third party :
Deutsche Bank, Jakarta 328,165 827,301
Security deposits :
Third parties :
Security deposit for electricity 143,982 181,489
Security deposit for rental 42,894 51,357
Others 4,568 5,758
191,444 238,604
a. Time Deposits
45
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
Based on the purchase and sale gas agreement No. 001016.PK/HK.02/USH/2010 between the
Company, PT Perusahaan Gas Negara (Persero) and PT Wismakarya Prasetya (under bankruptcy),
the Company should provide the bank guarantee for gas supplies equivalent to approximately two
months consumption value and the balance of gas.
The Company provided the bank guarantee (SBLC) through Deutsche Bank, Jakarta for an amount
equal to US$ 5,777,094 plus Rp 16,498,800,000 (equivalent to US$ 7,130,675) in 2013 and
US$ 3,793,043 plus Rp 16,498,800,000 (equivalent to US$ 5,499,227) in 2012 representing two
(2) month’s consumption. The bank guarantees still have terms of three (3) and nine (9) months
after the reporting date and will due on March 31, 2014 and September 30, 2014. In order to obtain
the SBLC, the Company deposited an amount equal to US$ 8,638,954 and US$ 6,654,903 as of
December 31, 2013 and 2012 in Deutsche Bank, Hong Kong as collateral through Kyoa account.
The collateral represents approximately 120% of SBLC amount for Rupiah portion.
Due to the short-term nature of other current financial assets, their carrying amount approximates their
fair values.
The details of other current financial assets based on currencies are as follows :
2013 2012
US$ US$
Rupiah
Rp 6,248,315,332 in 2013 and
Rp 10,248,315,332 in 2012 512,619 1,059,805
The maximum exposure to credit risk at the reporting date is the carrying value of each class of other
current financial assets is disclosed in Note 47.
46
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
9. INVENTORIES
2013 2012
US$ US$
Based on the review of the physical condition of the inventories at the end of each year, the
management believes that no allowance for impairment is deemed necessary.
As at December 31, 2013 and 2012, the inventories are covered by insurance with PT Asuransi
Indrapura against fire loss and other risks totaling US$ 84,500,000 and US$ 79,500,000, respectively,
which in the opinion of the management is adequate to cover losses arising from such risks.
Further, on February 21, 2014, the Company changes their inventory’s insurance from PT Asuransi
Indrapura to marine cargo stock throughput insurance PT Talisman Insurance Brokers against fire loss
and other risks totalling US$ 86,500,000, which in the opinion of the management is adequate to cover
losses arising from such risks.
In 2013 and 2012, all inventories were used as collateral for the Company’s bank loans and working
capital loans that were received from Damiano Investments BV., Netherland (Notes 18 and 21).
Third parties :
Purchase of turbines’ spareparts 2,865,647 1,109,367
Purchase of inventories and operational 3,427,467 4,680,032
Purchase of property, plant and equipments 569,769 1,865,844
6,862,883 7,655,243
47
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
Related party :
PT Texmaco Jaya Tbk (under bankruptcy) 54,799 –
In 2013, total purchases advance of property, plant and equipments of US$ 569,769 (equivalent to
Rp 5,926,790,296) represents the balance in connection with the purchases of machineries and
equipments with total amounts of US$ 193,110 (equivalent to Rp 1,993,827,786) in filament yarn
division and the purchases of fiber machineries and equipments for expansion with total amounts of
US$ 376,659 (equivalent to Rp 3,932,962,510). The machineries and equipments will be received in
2014.
In 2012, total purchases advance of property, plant and equipments of US$ 1,865,844 (equivalent to
Rp 17,513,121,317) represents the balance in connection with the purchases of machineries and
equipments with total amounts of US$ 1,055,555 (equivalent to Rp 10,065,798,027) in filament yarn
division and the purchases of fiber machineries and equipments for expansion with total amounts of
US$ 810,289 (equivalent to Rp 7,447,323,290). The machineries and equipments had been received in
2013.
The payment made by the Company to PT Texmaco Jaya Tbk (under bankruptcy) in excess of the
payment for tolling expenses and was treated as advance payment for tolling expense in the next
month.
The payment made by the Company to PT Wismakarya Prasetya (under bankruptcy) in excess of the
invoice amount in treated as advance payment to PT Wismakarya Prasetya (under bankruptcy) in line
with the agreement between PT Wismakarya Prasetya (under bankruptcy) and the Company on
November 16, 2006, and the working capital provided to PT Wismakarya Prasetya in the past for the
payment of its old dues to PT Perusahaan Gas Negara (PGN) or PT Perusahaan Listrik Negara (PLN)
and taxation. The Company has lodged its claims with the curator for the dues amounting to
Rp 279,593,977,457 of principal value and Rp 206,051,448,529 towards interest amount. It will be
discussed with the curator.
48
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
2013 2012
US$ US$
Non-trade receivables from PT Multikarsa Investama represent the cash receipts from AR International
Limited, Hong Kong of Rp 51,421,394,625 (equivalent to US$ 4,218,672 in 2013 and US$ 5,317,621
in 2012) for the refund on the Company’s advances for the purchase of property, plant and equipment
(machinery and equipment). The remaining balance of US$ 26,169,676 and US$ 32,708,360,
respectively as of December 31, 2013 and 2012 represents advance payments for salary and other
expenses.
2013 2012
US$ US$
Based on the review of the status of the non-trade receivables from related parties, management
believes that the carrying value is a reasonable approximation of fair value. The impairment was not
provided with properly since the related party, PT Multikarsa Investama, is under the debt restructuring
and the settlement of the non-trade receivables from related parties will be done when the debt
restructuring is completed.
The details of non-trade receivables from related parties based on currencies are as follows :
2013 2012
US$ US$
49
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
2013 2012
US$ US$
PT Bank Dharmala
Rupiah account 2,221 2,799
As the Company and its Subsidiaries ire under restructuring process with the Indonesian Bank
Restructuring Agency (IBRA), the aggregate balances of cash in banks were restricted by IBRA.
The Indonesian government through the Indonesian Bank Restructuring Agency (IBRA) suspended the
bank operating licences of PT Bank Putera Multikarsa, a related party, on January 28, 2000; PT Bank
Dharmala, PT Bank Asia Pacific and PT Bank Papan Sejahtera on March 13, 1999; and PT Bank
Umum Nasional on August 21, 1998. As a result, the balance of banks as of December 31, 2013 and
2012 amounting to US$ 1,029,093 and US$ 1,113,711, respectively, is shown as other non-current
financial assets in the consolidated statements of financial position.
The Company and its Subsidiaries’ management determined that the restricted cash in banks do not
need impaired, because the outstanding balance of restricted cash in banks will be settled upon loan
repayment or upon completion of the restructuring program with the creditors and PPA. The net
carrying value of restricted cash in banks is considered a reasonable approximation of fair value.
50
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
2013 2012
US$ US$
Direct acquisition :
Carrying cost 1,786,149,814 1,784,685,143
Accumulated depreciation (1,714,202,396) (1,658,522,816)
Direct acquisition :
Carrying cost :
Land 15,529,702 – – – 15,529,702
Building and improvement 47,221,395 – – – 47,221,395
Machinery and equipment 1,713,914,123 88,288 – 1,352,882 1,715,355,293
Transportation equipment 5,145,934 23,142 – – 5,169,076
Office equipment 2,873,989 359 – – 2,874,348
–
1,784,685,143 111,789 – 1,352,882 1,786,149,814
Accumulated depreciation :
Building and improvement 41,285,642 1,694,160 – – 42,979,802
Machinery and equipment 1,609,530,729 53,883,012 – – 1,663,413,741
Transportation equipment 4,849,748 98,566 – – 4,948,314
Office equipment 2,856,697 3,842 – – 2,860,539
Carrying cost :
Land 15,529,702 – – – 15,529,702
Building and improvement 47,221,395 – – – 47,221,395
Machinery and equipment 1,699,859,778 3,864,156 – 10,190,189 1,713,914,123
Transportation equipment 5,038,480 107,454 – – 5,145,934
Office equipment 2,855,448 18,541 – – 2,873,989
–
1,770,504,803 3,990,151 – 10,190,189 1,784,685,143
51
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
Accumulated depreciation :
Building and improvement 39,518,357 1,767,285 – – 41,285,642
Machinery and equipment 1,541,723,603 67,807,126 – – 1,609,530,729
Transportation equipment 4,756,473 93,275 – – 4,849,748
Office equipment 2,854,123 2,574 – – 2,856,697
Construction in progress :
2013 2012
US$ US$
Depreciation expenses is allocated to :
Direct acquisition :
Manufacturing expense (Note 36) 55,577,173 69,574,411
General and administrative expenses (Note 38) 102,407 95,849
The Company own several pieces of land located in Karawang and Kendal amounted to 754,905
square meters with certificate Building Use Right (Hak Guna Bangunan or HGB) for a period of 20 –
30 years which will be expired between 2006 and 2032. For the ownership certificate of the land were
located in Semarang of 78,111 square meters have been extended up to November 29, 2027.
Management believes that there will be no difficulty in the extension of the certificate of landrights
since all the landrights were acquired legally and supported by sufficient evidence of ownership.
The part of the Company’s land in Karawang, with the certificate Building Use Right (HGB) No. 13 of
33,630 square meters and with the certificate Building Use Right (HGB) No. 14 of 35,380 square
meters, are pledged to PT Bank Negara Indonesia (BNI) and PT Bina Prima Perdana (BPP) towards
secured debts’ PT Texmaco Jaya Tbk (in bankruptcy) (Note 44).
52
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
The part of additional machinery and equipment amounted to US$ 932,483 (equivalent to
Rp 8,519,168,000) represent the expenditure for overhaul PTA machinery and will be extended the
useful lives of machinery and equipment of three (3) years.
As of December 31, 2012, the construction in progress for machinery and equipment of US$ 3,232,319
are connected with the increasing of the Company’s filament yarn. Up to December 31, 2013, the
Company has reclassified the part of them to property, plant and equipments with totaling of US$
1,352,882, and the remaining balance of US$ 1,879,437 has not been constructed, and will be
completed in 2014 together with the new construction in progress in 2013.
As of December 31, 2013, the construction in progress for machinery and equipment of
US$ 10,277,333, consist of the remaining balance in the contruction in progress for machinery and
equipment in 2012 with totaling of US$ 1,879,437 and the addition during the year 2013 with totaling
of US$ 8,397,896, are connected with the increasing of the Company’s filament yarn and fiber
capacity. Up to December 31, 2013, the total percentage of completion for this project is approximately
75% and will be completed in 2014. Management believes that there is no impediment to the
completion of the contruction in progress.
Management believes that the estimated recoverable amounts of property, plant and equipment exceed
their carrying values and, hence, no impairment of property, plant and equipment should be recorded as
at the statement of financial position date.
The fair value of land (762,538 sqm) based on NJOP (Tax Object Market Value) is
Rp 236,736,440,000 (equivalent to US$ 19,422,138) and the fair value of building (210,582 sqm)
based on NJOP is Rp 146,271,550,000 (US$ 12,000,291).
Based in the appraisal’s report of KJPP Nirboyo A., Dewi A. & Rekan dated September 3, 2013, total
market value of the Company’s property, plant and equipment were US$ 834,183,454 with the
liquidation value of US$ 474,205,723.
Based on the appraisal’s report of KJPP Wilson and Rekan dated January 30, 2012, total market value
of the Company’s land, building and improvement were Rp 444,212,000,000. And based on the
appraisal’s report of Nirboyo A., Dewi A. & Rekan dated January 19, 2012, total market value of
machinery and transportation equipment in Karawang is US$ 274,860,902.
The valuation, which conforms to International Valuation Standards, was determined by reference to
recent market transactions on arm’s length terms. Appraisal method used is Market Data Approach
Methods. Elements used in data comparison process to determine assets’ fair value are as follows :
53
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
As of December 31, 2013 and 2012, total acquisition cost of fully depreciated property, plant and
equipment is amounted to US$ 1,066,237,056 and US$ 742,492,712, respectively, but the Company is
still using these assets in their operations.
All of the Company’s property, plant and equipment, except land were insured with PT Asuransi Rama
Satria Wibawa as lead Insurance Company from loss and other risks including earthquake valuing in
total US$ 605,070,000 plus Rp 134,000,000 as of December 31, 2013 and US$ 605,070,000 plus
Rp 609,000,000 as of December 31, 2012, respectively. The Company’s management, the sum insured
as stated above is adequate to cover possible losses arising from such risks.
In 2013 and 2012, all land, machinery and equipment are used as collateral for the secured bond
holders and working capital loans from PT Bina Prima Perdana (BPP) / PT Perusahaan Pengelola
Asset (PPA) and Damiano Investments BV., Netherland, respectively (Notes 19 and 21).
Intangible assets represent legal cost associated with the acquisition of landrights for land located at
Bandung (166 square meters) and is amortized over the useful life (Hak Guna Bangunan) of 20 years.
As of December 31, 2013 and 2012, the management believes that there was no indication of
impairment for intangible assets.
54
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
Third parties :
2013 2012
US$ US$
A summary of the aging of trade payables to third parties based on the date of invoice is as follows :
2013 2012
US$ US$
The details of trade payables to third parties based on currencies are as follows :
2013 2012
US$ US$
Rupiah
Rp 40,311,478,552 in 2013 and
Rp 30,425,613,348 in 2012 3,307,201 3,146,392
European Euro
EUR 388,986 in 2013 and
EUR 284,392 in 2012 536,821 376,738
Japan Yen
Yen 7,433,538 in 2013 and
Yen 4,780,473 in 2012 70,847 55,368
55
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
2013 2012
US$ US$
Singapore Dolar
SGD 51,618 in 2013 and
SGD 27,904 in 2012 40,773 22,817
Krona Swedish
SEK 52,758 in 2013 and
SEK 5,128,579 in 2012 8,217 789,041
Swiss Franc
CHF 138,304 in 2013 155,809 –
Related party :
2013 2012
US$ US$
A summary of the aging of trade payables to related party based on the date of invoice is as follows :
2013 2012
US$ US$
Up to 1 month – 7,150
The details of trade payables to related party based on currencies are as follows :
2013 2012
US$ US$
Rupiah
Rp 69,142,248 in 2012 – 7,150
56
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
Trade payables to local and foreign suppliers represent payables for purchase of raw materials and
indirect materials. These are non-interest bearing with clear terms of repayment.
Due to their short-term nature, their carrying amount of trade payables approximates their fair value.
The accrued interest of certain secured debts represent interest expenses accrued from the year 2001
and 2002, while all the unpaid and accrued interest up to 2000 according to the MOA had been waived.
The interest expense after the year 2002 has not been recorded by the Company due to the restructuring
process that has not yet been completed (Note 19).
2013 2012
US$ US$
Rupiah
Rp 419,413,686,457 in 2013 and
Rp 413,168,541,805 in 2012 34,409,195 42,726,840
United States Dollar 2,558,266 592,330
Due to their short-term nature, their carrying amount of accrued expenses approximates their fair value.
57
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
Related Party :
Damiano Investment BV., Netherland 87,910,672 78,752,462
According to the loan agreement dated March 3, 2006 and its amendment dated August 31, 2006
between the Company (Borrower), and Damiano Investments BV., Netherland (Lender), and PT
Ferrier Hodgson (Monitoring Agent), the lender agreed to provide the Letter of Credit facility in the
aggregate principal amount of US$ 50,000,000. Accordingly, the Company can also use the lender
name as guarantor for opening Letter of Credit in Barclays Bank Plc, Hongkong (Barclays). In
addition, the Company should pay a financing fee of 2.25% per month on the aggregate amounts of the
facility in Barclays to Damiano Investments BV., Netherland.
Based on the amendment loan agreement dated January 1, 2009 between the Company (Borrower), and
Damiano Investments BV., Netherland (Lender), and PT Ferrier Hodgson (Monitoring Agent), from
April 3, 2009 onwards, any and all references to “Barclays Letter of Credit Facility” shall be moved to
“Deutsche Bank AG : Letter of Credit Facility”. The fee charges by Damiano Investments BV.,
Netherland on this facility was 1.25% per month.
The Letter of Credit facility always changed based on the Company’s requirements for purchasing of
raw materials. Based on the recent amendment loan agreement dated April 8, 2011 between the
Company (Borrower) and Damiano Investments BV., Netherland (Lender), and PT Ferrier Hodgson
(Monitoring Agent), the lender agreed to increase the Letter of Credit facility in the aggregate principal
amount from US$ 50,000,000 to US$ 80,000,000.
Further, based on the recent amendment loan agreement on July 2012 between the Company
(Borrower) and Damiano Investments BV., Netherland (Lender), and PT Ferrier Hodgson (Monitoring
Agent), the lender agreed to increase the Letter of Credit facility in the aggregate principal amount
from US$ 80,000,000 to US$ 100,000,000.
The availability of facility as of December 31, 2013 and 2012 were US$ 92,020,243 and
US$ 84,019,693, respectively. And the letter of credit is used by the Company to purchase of raw
materials totaling US$ 87,910,672 in 2013 and US$ 78,752,462 in 2012, respectively. This is a
revolving facility. All bank loans are denominated in US Dollar.
For the years ended December 31, 2013 and 2012, a fee on Bank Loan has been recognized in the
amount of US$ 12,393,979 and US$ 13,969,873, respectively, and is presented as part of finance costs
accounts in the consolidated statements of comprehensive income (Note 39).
All bank loans from Damiano Investments BV., Netherland are collateralized by the Company’s trade
receivables and inventories (Notes 6 and 9).
Due to their short-term nature, their carrying amount of bank loans approximates their fair value.
58
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
Bonds :
13% Guaranteed Secured Notes 122,526,000 122,526,000
Secured Floating Rate Notes 50,000,000 50,000,000
9.375% Guaranteed Secured Notes 250,000,000 250,000,000
11.375% Guaranted Secured Notes 260,000,000 260,000,000
682,526,000 682,526,000
165,702,418 199,641,409
Banks
Damiano Investments BV., Netherland
(Ex. PT Bank Finconesia)
EUR 7,471,539 10,311,104 9,897,556
Damiano Investments BV., Netherland
(Ex. Union Europeene de CIC, Singapore)
EUR 5,941,395 8,199,428 7,870,573
Damiano Investments BV., Netherland
(Ex. Credit Agricole Indosuez, Singapore) 12,117,088 12,117,088
Damiano Investments BV., Netherland
(Ex. Bangkok Bank, Singapore) 3,303,097 3,303,097
33,930,717 33,188,314
83,522,422 84,907,980
59
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
On November 30, 2001, the Company entered into Definitive Memorandum of Agreement (MOA)
with the noteholders regarding the restructuring plan of the Company. However, it has not yet been
executed by the Company and the MOA and automatically terminated. On March 14, 2007 and July
2007, the Company has issued a new Secured Debt Restructure Proposal (SDRP) to its secured
creditors for the restructure of its Secured debts including the bonds, but the approval from the secured
creditors, particularly from PPA (26% of total secured debt) has not given. And, Damiano Investments
BV., Netherland currently hold approximately 93% of the secured bonds and banks has been approved
the new Secured Debt Restructure Proposal. Further, on February 10, 2014, the Company has
submitted a revised Secured Debt Restructuring Plan (SDRP) to PPA (Note 2a).
In November 2010 and December 2010, PPA announced a “Sale of Texmaco Assets and Shares”
programme which includes the fixed assets held as security by PPA in the Company-Semarang’s site.
However for some reasons, the programme was later called off and cancelled.
The Company issued US$ 125,000,000 Unsecured Senior Notes in June 1994 carrying an interest
rate of 13% per annum. The notes are due for repayment in 2001. In May 1996, the Company
offered to the holders of the said unsecured notes to exchange their notes with 13% Guaranteed
Senior Notes due in 2001 which were listed in Luxembourg Stock Exchanges and issued by PIFC
with the Company as the guarantor.
All holders of the unsecured notes exchanged their notes with the new secured notes except for the
holders of unsecured notes amounting to US$ 2,474,000. In August 1997, the Company paid part
of the 13% Unsecured Senior Notes amounting to US$ 1,250,000.
In February 1996, PIFC, with the Company as a guarantor, issued the US$ 50,000,000 Secured
Floating Rate Notes which were listed in Luxembourg Stock Exchanges with carrying an interest
rate of 3% above LIBOR and were due in 1999.
In July 1997, PIFC, with the Company as a guarantor, issued the US$ 250,000,000 Guaranteed
Secured Notes due in 2007 which were listed in Luxembourg Stock Exchange with carrying an
interest rate of 9.375% per annum. The proceeds from issuance of these notes were used to finance
a portion of phase I of the Company’s expansion program.
60
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
In June 1996, PIFC, with the Company as a guarantor, issued the US$ 260,000,000 Guaranteed
Secured Notes due in 2006 which were listed in Luxembourg Stock Exchange. The notes carry an
interest rate of 11.375% per annum. The proceeds from issuance of these notes were used to pay
off other debts and loans.
Currently all these notes have been delisted from Luxembourg Stock Exchanges and are secured by
liens of the collateral, which consist of real property, moveable assets (other than inventories) and
proceeds of collateral on a pari-passu basis with the other notes payable and obligations of the
Company (Note 14).
Loans to PT Bina Prima Perdana (BPP) represent loans from PT Bank Negara Indonesia (Persero) Tbk
which had been defaulted and transferred to IBRA. Further, pursuant to debt restructuring scheme in
Master Restructuring Agreement (MRA) dated May 23, 2001, in 2002 the Company’s debts to IBRA
have been transferred to BPP. For this transfer, BPP issued Exchangeable Bond (EB) to IBRA. But, on
February 26, 2004, IBRA issued a letter of default notice to PT Bina Prima Perdana. The letter stated
that PT Bina Prima Perdana as the textile holding company had failed to pay the Exchangeable Bond
(EB) coupons due on August 18, 2003.
The Company did not recognize the interest expenses on secured debts since 2002 since the Company
is under restructuring process, and the interest payable will not be counted. As of December 31, 2013
and 2012, the Company had interest payable of Rp 380,648,007,290 (equivalent to US$ 31,228,813 in
2013 and US$ 39,363,806 in 2012) and was presented as part of accrued expenses in the consolidated
statements of financial position (Note 17).
2013 2012
US$ US$
European Euro
(EUR 15,688,979 in 2013 and 2012) 19,683,400 20,783,207
Japan Yen
(JPY 3,001,711,400 in 2013 and 2012) 28,608,189 34,756,139
Swiss Franc
(CHF 45,902 in 2012) – 50,302
61
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
2013 2012
US$ US$
Rupiah
(Rp 1,341,051,955,403 in 2013 and
Rp 1,344,552,714,414 in 2012) 110,021,491 139,043,714
Due to their short-term nature, their carrying amount of secured debts approximates their fair value.
The Company has taking steps to implement the Composition Plan (Rencana Perdamaian) as approved
by the unsecured creditors of the Company and ratified by the Commercial Court. On
September 29, 2006, the unsecured creditors comprising of Banks, PT Bina Prima Perdana, Leasing,
and Notes stand at US$ 18,670,630 was restructured into Fixed Rate Notes under custodian of The
Hongkong and Shanghai Banking Corporation Limited, Hong Kong.
As of December 31, 2013 and 2012, the total restructured unsecured debt were US$ 22,624,894 and
US$ 22,169,338, respectively which are comprising of principal notes at US$ 18,670,630 plus unpaid
capitalized interest of 3,954,264 in 2013 and US$ 3,498,708 in 2012.
Based on the Minutes of Noteholders’ Meeting between the Company (Borrower) and The Hongkong
and Shanghai Banking Corporation Limited (Noteholder) dated January 30, 2009, the Noteholder shall
defer the redemption dated of the unsecured debt and notes payable for 3 (three) years by revoking and
replacing the table of redemption dates below :
2012 5.00%
2013 17.50%
2014 17.50%
2015 17.50%
2016 20.00%
2017 22.50%
62
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
Further, based on the Minutes of Noteholders’ Meeting between the Company (Borrower) and The
Hongkong and Shanghai Banking Corporation Limited (Noteholder) dated January 16, 2012, the
Noteholder shall defer the redemption dated of the unsecured debt and notes payable for 3 (three) years
by revoking and replacing the table of redemption dates below :
2015 5.00%
2016 17.50%
2017 17.50%
2018 17.50%
2019 20.00%
2020 22.50%
For the years ended December 31, 2013 and 2012, the interest charges on the unsecured debts were
US$ 905,439 and US$ 885,278, respectively, and are presented as part of finance costs accounts in the
consolidated statements of comprehensive income (Note 39).
The fair value of long-term financial liabilities have been determined by calculating their present value
at the consolidated statements of financial position date, using fixed effective market interest rates
available to the Company. No fair value changes have been included in consolidated statements of
comprehensive income for the period as financial liabilities are carried at amortized cost in the
consolidated statements of financial position.
Related Party :
Damiano Investments BV., Netherland 17,340,000 17,340,000
Based on the Working Capital Loan Agreement between the Company and Damiano Investments BV.,
Netherland dated June 1, 2006, Damiano Investments BV., Netherland has provided the working
capital loans facility for the Company. The interest chargeable on this loan is 9% per annum till the
implementation of the Composition Plan. Upon implementation of the Composition Plan, the rate of
interest is as per the terms of the “New Notes / Loan restructure”. The working capital loan shall be
repayable on the earlier of 5 (five) years from the date of this agreement.
Based on the second amendment of working capital loan agreement dated June 1, 2011, the repayment
date has been extended from 5 (five) years to be 7 (seven) years.
63
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
Further, based on the third amendment of third working capital loan agreement dated August 1, 2013,
the repayment date has been re-extended from 7 (seven) years to be 9 (nine) years.
1st Loan :
In 2006, the Company obtains the working capital loan from Damiano Investments BV., Netherland
amounted to US$ 15,000,000, and was repaid by the Company in 2011.
2nd Loan :
Damiano Investments BV., Netherland has provided US$ 10,687,669.23 as working capital loans to
the Company with interest rate of 15% per annum. The part of these working capital loans with
totalling of US$ 6,777,924.23 have been repaid by the Company in 2011 while the remaining balance
of US$ 3,909,745 was repaid by the Company in 2012.
Damiano Investments BV., Netherland has also provided US$ 3,336,000 as advances. Based on the
termination agreement dated January 1, 2008, Damiano Investments BV., Netherland agreed to
reclassify the advances into a working capital loan agreement. It has been repaid by the Company in
2012.
Based on the termination deed dated January 1, 2008, Damiano Investments BV., Netherland also
agreed to reclassify outstanding amounts of principal and its interest from Catora’s pre-financing
facility amounting to US$ 4,000,000 and US$ 2,399,255, respectively into a working capital loan
agreement. It has been repaid by the Company in 2012.
Based on the loan agreement dated August 14, 2008 and September 19, 2008, the Company obtained
additional working capital loan from Damiano Investments BV., Netherland amounting to
US$ 700,000 and US$ 155,000, respectively. It has been repaid by the Company in 2012.
3rd Loan :
During the year 2011, Damiano Investments BV., Netherland has provided US$ 8,500,000 as part of
the Company’s capital expenditure. The part of these working capital loans of US$ 4,100,000 have
been repaid by the Company in 2012, while the remaining balance of US$ 4,400,000 is still
outstanding as of December 31, 2013.
During the year 2012, Damiano Investments BV., Netherland has also provided US$ 12,940,000 as
part of the Company’s capital expenditure. It was still outstanding as of December 31, 2013.
64
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
For the years ended December 31, 2013 and 2012, the interest charge on the working capital loans
from Damiano Investments BV., Netherland were US$ 2,885,174 and US$ 2,936,962, respectively,
and are presented as part of finance costs accounts in the consolidated statements of comprehensive
income (Note 39).
The fair value of long-term financial liabilities have been determined by calculating their present value
at the consolidated statements of financial position date, using fixed effective market interest rates
available to the Company. No fair value changes have been included in consolidated statements of
comprehensive income for the period as financial liabilities are carried at amortized cost in the
consolidated statements of financial position.
In 2013 and 2012, working capital loans from Damiano Investments BV., Netherland are collateralized
by the Company’s trade receivables, inventories and property, plant and equipments as collateral
(Notes 6, 9 and 14).
Based on agreement dated May 24, 2010, the Company obtained a credit financing from PT Staco
Estetika Sedaya Finance for purchasing of a car (Toyota Fortuner) amounting to Rp 513,000,000 with
effective interest rate of 12.83% per annum, repayable in monthly installments from May 28, 2010 up to
April 28, 2013. As of December 31, 2013 and 2012, the outstanding credit financing payable balances
were Rp Nil (equivalent to US$ Nil) and Rp 67,160,963 (equivalent to US$ 6,946), respectively.
65
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
Based on agreement dated December 14, 2010, the Company obtained a credit financing from
PT Andalan Finance Indonesia for purchasing of a car (Toyota Innova) amounting to Rp 137,547,400
with effective interest rate of 10.04% per annum, repayable in monthly installments from
December 10, 2010 up to November 10, 2013. As of December 31, 2013 and 2012, the outstanding
credit financing payable balances were Rp Nil (equivalent to US$ Nil) and Rp 46,118,818 (equivalent
to US$ 4,769), respectively.
Based on agreement dated December 14, 2010, the Company obtained a credit financing from
PT Andalan Finance Indonesia for purchasing of a car (Toyota Innova) amounting to Rp 137,547,400
with effective interest rate of 10.04% per annum, repayable in monthly installments from
December 10, 2010 up to November 10, 2013. As of December 31, 2013 and 2012, the outstanding
credit financing payable balances were Rp Nil (equivalent to US$ Nil) and Rp 46,118,818 (equivalent
to US$ 4,770, respectively
Based on agreement dated December 14, 2010, the Company obtained a credit financing from
PT Andalan Finance Indonesia for purchasing of a car (Toyota Fortuner) amounting to Rp 346,385,800
with effective interest rate of 10.03% per annum, repayable in monthly installments from December 10,
2010 up to November 10, 2013. As of December 31, 2013 and 2012, the outstanding credit financing
payable balances were Rp Nil (equivalent to US$ Nil) and Rp 116,130,040 (equivalent to US$ 12,009),
respectively.
Based on agreement dated June 16, 2011, the Company obtained a credit financing from PT Astra
Sedaya Finance for purchasing of a car (Isuzu Elf) amounting to Rp 185,598,390 with effective interest
rate of 10.24% per annum, repayable in monthly installments from July 19, 2011 up to June 19, 2014.
As of December 31, 2013 and 2012, the outstanding credit financing payable balances were
Rp 35,006,686 (equivalent to US$ 2,872) and Rp 99,884,706 (equivalent to US$ 10,329), respectively.
Based on agreement dated June 20, 2011, the Company obtained a credit financing from PT Astra
Sedaya Finance for purchasing of a car (Toyota Avanza) amounting to Rp 119,640,000 with effective
interest rate of 10.74% per annum, repayable in monthly installments from July 22, 2011 up to June 22,
2014. As of December 31, 2013 and 2012, the outstanding credit financing payable balances were
Rp 22,695,944 (equivalent to US$ 1,862) and Rp 64,605,671 (equivalent to US$ 6,681), respectively.
Based on agreement dated July 30, 2012, the Company obtained a credit financing from PT Toyota
Astra Finance Services for purchasing of a car (Toyota Innova) amounting to Rp 186,160,000 with
effective interest rate of 10.24% per annum, repayable in monthly installments from July 24, 2012 up to
June 24, 2015. As of December 31, 2013 and 2012, the outstanding credit financing payable balance
were Rp 103,954,564 (equivalent to US$ 8,529) and Rp 160,872,118 (equivalent to US$ 16,637),
respectively.
Based on agreement dated July 30, 2012, the Company obtained a credit financing from PT Toyota
Astra Finance Services for purchasing of a car (Toyota Innova) amounting to Rp 227,400,000 with
effective interest rate of 10.24% per annum, repayable in monthly installments from July 24, 2012 up to
June 24, 2015. As of December 31, 2013 and 2012, the outstanding credit financing payable balance
were Rp 126,977,544 (equivalent to US$ 10,417) and Rp 196,507,062 (equivalent to US$ 20,321),
respectively.
66
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
Based on agreement dated November 12, 2012, the Company obtained a credit financing from
PT Andalan Finance Indonesia for purchasing of a car (Toyota Innova) amounting to Rp 221,250,000
with effective interest rate of 9.14% per annum, repayable in monthly installments from
November 19, 2012 up to October 19, 2015. As of December 31, 2013 and 2012, the outstanding credit
financing payable balance were Rp 141,291,917 (equivalent to US$ 11,592) and Rp 208,935,649
(equivalent to US$ 21,607), respectively.
Based on agreement dated November 12, 2012, the Company obtained a credit financing from
PT Andalan Finance Indonesia for purchasing of a car (Toyota Innova) amounting to Rp 160,950,000
with effective interest rate of 10.24% per annum, repayable in monthly installments from
December 3, 2012 up to December 3, 2015. As of December 31, 2013 and 2012, the outstanding credit
financing payable balance were Rp 107,078,228 (equivalent to US$ 8,785) and Rp 155,855,000
(equivalent to US$ 16,117), respectively.
Based on agreement dated September 14, 2013, the Company obtained a credit financing from PT Astra
Sedaya Finance for purchasing of a car (Toyota Innova) amounting to Rp 180,078,500 with effective
interest rate of 10.18% per annum, repayable in monthly installments from September 14, 2013 up to
September 14, 2017. As of December 31, 2013, the outstanding credit financing payable balances was
Rp 166,349,428 (equivalent to US$ 13,647), respectively.
The interest expenses incurred on this credit financing for the years ended December 31, 2013 and 2012
were Rp 103,337,921 (equivalent to US$ 9,951) and Rp 118,812,998 (equivalent to US$ 12,287),
respectively, and is shown as part of the finance costs accounts in the consolidated statements of
comprehensive income (Note 39).
The fair value of long-term financial liabilities have been determined by calculating their present value
at the consolidated statements of financial position date, using fixed effective market interest rates
available to the Company. No fair value changes have been included in consolidated statements of
comprehensive income for the period as financial liabilities are carried at amortized cost in the
consolidated statements of financial position.
67
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
The details of other short-term financial liabilities based on currencies are as follows :
2013 2012
US$ US$
Rupiah
Rp 9,546,144,873 in 2013, and
Rp 18,295,341,577 in 2012 783,177 1,891,973
United States Dollar 5,540,420 2,258,992
Due to their short-term nature, their carrying amount of other short-term financial liabilities
approximates their fair value.
Net 237,652 –
Deferred revenue represents the government grant related to purchase of machinery EFK Multi Spindel
Texturing and EFK Coolflex with totaling of Rp 37,629,356,188 (equivalent to US$ 3,972,862). The
machinery was located at Semarang, Central Java.
The government grant is based on the Letter of Agreement to give the grant for Revitalization
Programme and Industrial Growth through Restructuring of machinery / industry equipment TPT, and
also IAK from the Ministry of Industry No. 0043/BIM.5/SPPB-TL/A/5/2013 dated May 10, 2013,
which stated that the Company obtain the grant for purchasing of machinery amounting to Rp
2,388,181,818 (equivalent to US$ 246,027). And its government grant will be amortized over the
useful life of machinery (20 years).
68
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
On June 20, 2000, the Ministry of Manpower issued Decree No. KEP-150/Men/2000 regarding the
settlement of work dismissal and determination of separation, appreciation and compensation payment
to employees, which requires companies to pay their employees gratuity and compensation benefits in
case of employees resignation based on the employee’s number of years of service and salaries
provided the conditions set forth in the decree are met. In April 2003, the Government of the Republic
Indonesia issued Labour Law No. 13/2003 replacing the Decree No. KEP-150/Men/2000.
The Company has defined benefit pension plans covering substantially all of their eligible permanent
employees. The balances of long-term employee benefit liabilities as of December 31, 2013 and 2012,
of US$ 9,392,014 and US$ 10,274,737, respectively are calculated by independent actuary on a yearly
basis, as set out in their reports dated March 10, 2014.
The amounts recognized in the consolidated statements of financial position are determined as follows:
2013 2012
US$ US$
The movements in the present value of unfunded obligation over the year are as follows:
2013 2012
US$ US$
As of December 31, 2013 and 2012, all of defined benefit obligation is unfunded obligation so there is
no fair value of plan assets.
69
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
The amounts recognized in the consolidated statements of comprehensive income are as follows:
2013 2012
US$ US$
The movements in the net liability recognized in the consolidated statements of financial position are
as follows :
2013 2012
US$ US$
Beginning of the year 10,274,737 8,561,749
Foreign exchange translation (2,123,396) (533,007)
Benefits payment (746,691) (491,632)
Amount charged to income 1,987,364 2,737,627
Assumptions regarding future mortality experience are set based on actuarial advice in accordance with
published statistics and experience in each territory. In Indonesia, the mortality assumptions used are
based on Mortality Table in Indonesia 2011 (“TMI 2011”).
Management reviewed the assumptions used and is of the opinion that the assumptions are reasonable.
Management believes that the provision for severance provided is adequate to cover the potential
liability required by Labour Law No. 13/2003.
70
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
The sensitivity of the present value of defined benefit obligation and current service cost to changes in
the weighted principal assumptions of 1% is as follows :
Historical information of present value of unfunded obligation and experience adjustment on plan
liabilities was as follows :
Present value of defined benefit obligation 9,975,563 18,296,212 15,100,623 12,809,715 8,143,997
Fair value of plan assets ─ ─ ─ ─ ─
26. TAXATION
a. Prepaid Taxes
2013 2012
US$ US$
Overpayment of corporate income tax
2011 – 3,988,440
2012 4,911,387 4,911,387
2013 6,314,637 –
Value added Tax 7,677,887 5,886,221
Total 18,903,911 14,786,048
71
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
b. Taxes Payable
2013 2012
US$ US$
Income tax article 21 148,072 127,291
Income tax article 23 42,141 61,260
Income tax article 26 131,687 143,125
Value added tax 1,419,419 1,419,419
2013 2012
US$ US$
(191,736,202 ) (50,229,622 )
Timing differences :
Depreciation expense of property, plant and
Equipment 26,858,983 36,996,057
Intangible assets 662 (12,750 )
Amortization of deferred charges (124,977) (131,555 )
Amortization of deferred revenues (237,652) –
Long-term employee benefits liabilities (882,723) 1,712,988
25,614,293 38,564,740
72
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
2013 2012
US$ US$
Prepaid taxes :
Income tax article 22 (6,314,637) (4,903,200)
Income tax article 23 – (8,187)
73
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
Timing differences :
Depreciation expense of
property, plant and
equipment 210,723,143,923 7,846 26,858,983 26,858,983
Intangible assets 6,000,000 9,063 662 662
Amortization of deferred
Charges (280,300,579 ) 2.243 (124,977) (124,977)
Amortization of deferred
revenue (2,306,882,012 ) 9,707 (237,652) (237,652)
Long-term employee benefits
liabilities 15,122,550,807 17,132 (882,723) (882,723)
Prepaid taxes :
Income tax article 22 (62,688,150,967) 9,927 (6,314,637) (6,314,637)
Estimated overpayment of
corporate income tax (62,688,150,967) (6,314,637) (6,314,637)
74
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
Prepaid taxes :
Income tax article 22 (44,580,486,515) 9,092 (4,903,200) (4,903,200)
Income tax article 23 (78,750,000) 9,618 (8,187) (8,187)
Total prepaid taxes (44,659,236,515) (4,911,387) (4,911,387)
Estimated overpayment of
corporate income tax (44,659,236,515) (4,911,387) (4,911,387)
The estimated taxable loss for the year ended December 31, 2012 as reported in the 2012 corporate
income tax return amounted to Rp 518,648,726,687, and the tax return was submitted to the tax
office in April 2013.
75
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
In these financial statements, the amount of taxable income is based on preliminary calculations, as
the Company has not yet submitted its corporate income tax returns.
The calculation of deferred tax assets and deferred tax liabilities with the maximum tax tariff of
25% in 2013 and 2012 are as follows :
2 0 1 3
Credited (charged)
to the statements of
comprehensive
As of Income As of
December 31, 2012 for the year December 31, 2013
US$ US$ US$
2 0 1 2
Credited (charged)
to the conosolidated
statements of
As of comprehensive As of
December 31, 2011 income for the year December 31, 2012
US$ US$ US$
76
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
There are no income tax charged/(credited) relating to other comprehensive income during the
year.
The recognition of the Company and its Subsidiaries’ deferred tax assets is based on
management’s estimates of the results of future operations including an estimate of output levels
and commodity prices for the Company and its Subsidiaries’ products, the timing and extent of the
reversal of certain of the Company and its Subsidiaries’s deferred tax liabilities, and certain tax
planning strategies. Based on these estimates, management believes that the Company and its
Subsidiaries will not realize its deferred tax asset from fiscal loss carry forward. Accordingly, the
management had made a valuation allowance of US$ 90,978,588 and US$ 49,903,636 as at
December 31, 2013 and 2012, respectively.
The basis supporting recognition of the deferred tax assets is reviewed regularly by management.
• A reconciliation between the total tax expense (income) and the amounts computed by
applying the effective tax rate to profit (loss) before income tax is as follows :
2013 2012
US$ US$
77
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
– –
Deferred tax income (expense) :
The Company 6,403,573 9,641,186
Subsidiaries – –
6,403,573 9,641,186
a. Company
• On December 5, 2013, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor
Pelayanan Pajak Wajib Pajak Besar Dua) issued a Value Added Tax assessment letter for
fiscal period September 2012. Based on the Indonesian Tax Authorities letter No.
00007/407/12/092/13, the Company had an overpayment of Rp 12,123,297,247. The
overpayment of Corporate Income Tax has been received on December 30, 2013.
• On June 3, 2013, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor
Pelayanan Pajak Wajib Pajak Besar Dua) issued a Corporate Income Tax assessment letter
for fiscal year 2011. Based on the Indonesian Tax Authorities letter No.
00043/406/11/092/13, the Company had an overpayment of Rp 36,185,444,544. The
overpayment of Corporate Income Tax has been compensated in July 2013 with the other
tax liabilities for fiscal year 2011 with totalling amount of Rp 272,501,798. And the
remaining of its overpayment amounted to Rp 35,912,942,746 were received on July 10,
2013. Further on August 27, 2013, the Company submits the objection letter to the
Indonesian Tax Authorities regarding the tax correction on allowance for impairment
expenses in PT Texmaco Jaya Tbk amounted to Rp 1,100,061,519,201. Until the date of
report finished, the result has not determined yet.
• On June 3, 2013, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor
Pelayanan Pajak Wajib Pajak Besar Dua) issued an Income Tax Article 21 assessment
letter for fiscal year 2011. Based on the Indonesian Tax Authorities letter No.
00034/201/11/092/13, the Company had additional tax liability of Rp 120,326,000. The
tax liability had been compensated in July 2013 with the overpayment of 2011 Corporate
Income Tax.
78
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
a. Company (Continued)
• On June 3, 2013, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor
Pelayanan Pajak Wajib Pajak Besar Dua) issued a Value Added Tax assessment letter for
fiscal period January 2011. Based on the Indonesian Tax Authorities letter No.
00268/207/11/092/13, the Company had additional tax liability of Rp 2,000,000. The tax
liability had been compensated in July 2013 with the overpayment of 2011 Corporate
Income Tax.
• On June 3, 2013, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor
Pelayanan Pajak Wajib Pajak Besar Dua) issued a Value Added Tax assessment letter for
fiscal period February 2011. Based on the Indonesian Tax Authorities letter No.
00206/507/11/092/13, the Company had no additional tax liability.
• On June 3, 2013, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor
Pelayanan Pajak Wajib Pajak Besar Dua) issued a Value Added Tax assessment letter for
fiscal period March 2011. Based on the Indonesian Tax Authorities letter No.
00269/207/11/092/13, the Company had additional tax liability of Rp 7,360,000. The tax
liability had been compensated in July 2013 with the overpayment of 2011 Corporate
Income Tax.
• On June 3, 2013, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor
Pelayanan Pajak Wajib Pajak Besar Dua) issued a Value Added Tax assessment letter for
fiscal period April 2011. Based on the Indonesian Tax Authorities letter No.
00270/207/11/092/13, the Company had additional tax liability of Rp 2,000,000. The tax
liability had been compensated in July 2013 with the overpayment of 2011 Corporate
Income Tax.
• On June 3, 2013, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor
Pelayanan Pajak Wajib Pajak Besar Dua) issued a Value Added Tax assessment letter for
fiscal period May 2011. Based on the Indonesian Tax Authorities letter No.
00271/207/11/092/13, the Company had additional tax liability of Rp 4,163,200. The tax
liability had been compensated in July 2013 with the overpayment of 2011 Corporate
Income Tax.
• On June 3, 2013, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor
Pelayanan Pajak Wajib Pajak Besar Dua) issued a Value Added Tax assessment letter for
fiscal period June 2011. Based on the Indonesian Tax Authorities letter No.
00272/207/11/092/13, the Company had additional tax liability of Rp 6,219,186. The tax
liability had been compensated in July 2013 with the overpayment of 2011 Corporate
Income Tax.
79
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
a. Company (Continued)
• On June 3, 2013, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor
Pelayanan Pajak Wajib Pajak Besar Dua) issued a Value Added Tax assessment letter for
fiscal period July 2011. Based on the Indonesian Tax Authorities letter No.
00273/207/11/092/13, the Company had additional tax liability of Rp 10,336,080. The tax
liability had been compensated in July 2013 with the overpayment of 2011 Corporate
Income Tax.
• On June 3, 2013, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor
Pelayanan Pajak Wajib Pajak Besar Dua) issued a Value Added Tax assessment letter for
fiscal period September 2011. Based on the Indonesian Tax Authorities letter No.
00274/207/11/092/13, the Company had additional tax liability of Rp 3,305,000. The tax
liability had been compensated in July 2013 with the overpayment of 2011 Corporate
Income Tax.
• On June 3, 2013, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor
Pelayanan Pajak Wajib Pajak Besar Dua) issued a Value Added Tax assessment letter for
fiscal period October 2011. Based on the Indonesian Tax Authorities letter No.
00275/207/11/092/13, the Company had additional tax liability of Rp 8,839,600. The tax
liability had been compensated in July 2013 with the overpayment of 2011 Corporate
Income Tax.
• On June 3, 2013, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor
Pelayanan Pajak Wajib Pajak Besar Dua) issued a Value Added Tax assessment letter for
fiscal period November 2011. Based on the Indonesian Tax Authorities letter No.
00276/207/11/092/13, the Company had additional tax liability of Rp 65,453,976. The tax
liability had been compensated in July 2013 with the overpayment of 2011 Corporate
Income Tax.
• On June 3, 2013, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor
Pelayanan Pajak Wajib Pajak Besar Dua) issued a Value Added Tax assessment letter for
fiscal period December 2011. Based on the Indonesian Tax Authorities letter No.
00277/207/11/092/13, the Company had additional tax liability of Rp 42,498,756. The tax
liability had been compensated in July 2013 with the overpayment of 2011 Corporate
Income Tax.
• On June 3, 2013, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor
Pelayanan Pajak Wajib Pajak Besar Dua) issued a Value Added Taxes assessment letter
for fiscal period July 2012. Based on the Indonesian Tax Authorities letter No.
00055/407/11/092/13, the Company had an overpayment of Rp 12,006,437,648. The
overpayment of Value Added Taxes has been received on December 11, 2013.
80
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
a. Company (Continued)
• On June 3, 2013, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor
Pelayanan Pajak Wajib Pajak Besar Dua) issued an Income Tax Article 21 assessment
letter for fiscal year 2011. Based on the Indonesian Tax Authorities letter No.
00010/543/11/092/13, the Company had no additional tax liability.
• On June 3, 2013, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor
Pelayanan Pajak Wajib Pajak Besar Dua) issued an Income Tax Article 23 assessment
letter for fiscal year 2011. Based on the Indonesian Tax Authorities letter No.
00023/503/11/092/13, the Company had no additional tax liability.
• On June 3, 2013, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor
Pelayanan Pajak Wajib Pajak Besar Dua) issued an Income Tax Article 4(2) assessment
letter for fiscal year 2011. Based on the Indonesian Tax Authorities letter No.
00025/540/11/092/13, the Company had no additional tax liability.
• On June 3, 2013, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor
Pelayanan Pajak Wajib Pajak Besar Dua) issued an Income Tax Article 26 assessment
letter for fiscal year 2011. Based on the Indonesian Tax Authorities letter No.
00018/504/11/092/13, the Company had no additional tax liability.
• On May 30, 2013, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor
Pelayanan Pajak Wajib Pajak Besar Dua) issued an Income Tax Article 26 assessment
letter for fiscal period July 2012. Based on the Indonesian Tax Authorities letter No.
00005/104/12/092/13, the Company had additional tax liability of Rp 12,747,875. The tax
liability was paid on June 7, 2013.
• On November 7, 2012, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor
Pelayanan Pajak Wajib Pajak Besar Dua) issued an Income Tax Article 26 assessment
letter for fiscal period March 2012. Based on the Indonesian Tax Authorities letter
No. 00004/104/12/092/12, the Company had additional tax liability of Rp 20,905,432. The
tax liability was paid on November 28, 2012.
• On September 5, 2012, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor
Pelayanan Pajak Wajib Pajak Besar Dua) issued a Value Added Tax assessment letter for
fiscal period August 2011. Based on the Indonesian Tax Authorities letter
No. 00028/407/11/092/12, the Company had an overpayment of Rp 17,500,076,809. The
overpayment of Value Added Tax was received on September 27, 2012.
• On May 30, 2012, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor
Pelayanan Pajak Wajib Pajak Besar Dua) issued an Income Tax Article 23 assessment
letter for fiscal year 2010. Based on the Indonesian Tax Authorities letter No.
000108/503/10/511/12, the Company had no additional tax liability.
81
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
a. Company (Continued)
• On May 30, 2012, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor
Pelayanan Pajak Wajib Pajak Besar Dua) issued an Income Tax Article 21 assessment
letter for fiscal year 2010. Based on the Indonesian Tax Authorities letter No.
000152/501/10/511/12, the Company had no additional tax liability.
• On May 30, 2012, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor
Pelayanan Pajak Wajib Pajak Besar Dua) issued an Income Tax Article 4(2) assessment
letter for fiscal year 2010. Based on the Indonesian Tax Authorities letter No.
000109/540/10/511/12, the Company had no additional tax liability.
• On May 22, 2012, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor
Pelayanan Pajak Wajib Pajak Besar Dua) issued an Income Tax Article 26 assessment
letter for fiscal year 2010. Based on the Indonesian Tax Authorities letter No.
000075/504/10/092/12, the Company had no additional tax liability.
• On May 22, 2012, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor
Pelayanan Pajak Wajib Pajak Besar Dua) issued a Corporate Income Tax assessment letter
for fiscal year 2010. Based on the Indonesian Tax Authorities letter No.
00033/406/10/092/12, the Company had an overpayment of Rp 35,914,770,914. The
overpayment of Corporate Income Tax has been compensated in June 2012 with the other
tax liabilities for fiscal year 2010 with totalling amount of Rp 2,740,502,844. And the
remaining of its overpayment amounted to Rp 33,174,268,070 were received on June 27,
2012. Further on July 24, 2012, the Company submits the objection letter to the Indonesian
Tax Authorities regarding the tax correction of interest expenses on bank loans amounted
to Rp 2,019,141,457. Until the date of report finished, the result has not determined yet.
• On May 22, 2012, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor
Pelayanan Pajak Wajib Pajak Besar Dua) issued an Income Tax Article 23 assessment
letter for fiscal year 2010. Based on the Indonesian Tax Authorities letter No.
00032/203/10/092/12, the Company had additional tax liability of Rp 2,340,007,727. The
tax liability had been compensated in June 2012 with the overpayment of 2010 corporate
income tax.
• On May 22, 2012, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor
Pelayanan Pajak Wajib Pajak Besar Dua) issued an Income Tax Article 21 assessment
letter for fiscal year 2010. Based on the Indonesian Tax Authorities letter No.
00021/201/10/092/12, the Company had additional tax liability of Rp 90,627,692. The tax
liability had been compensated in June 2012 with the overpayment of 2010 corporate
income tax.
82
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
a. Company (Continued)
• On May 22, 2012, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor
Pelayanan Pajak Wajib Pajak Besar Dua) issued an Income Tax Article 4(2) assessment
letter for fiscal year 2010. Based on the Indonesian Tax Authorities letter No.
00016/240/10/092/12, the Company had additional tax liability of Rp 236,944,163. The
tax liability had been compensated in June 2012 with the overpayment of 2010 corporate
income tax.
• On May 22, 2012, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor
Pelayanan Pajak Wajib Pajak Besar Dua) issued a Value Added Tax assessment letter for
fiscal period December 2010. Based on the Indonesian Tax Authorities letter
No. 00013/277/10/092/12, the Company had additional tax liability of Rp 10,742,872. The
tax liability had been compensated in June 2012 with the overpayment of 2010 corporate
income tax.
• On May 22, 2012, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor
Pelayanan Pajak Wajib Pajak Besar Dua) issued a Value Added Tax assessment letter for
fiscal period December 2010. Based on the Indonesian Tax Authorities letter
No. 00278/207/10/092/12, the Company had additional tax liability of Rp 55,069,976. The
tax liability had been compensated in June 2012 with the overpayment of 2010 corporate
income tax.
• On September 30, 2010, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor
Pelayanan Pajak Wajib Pajak Besar Dua) issued an Income Tax Article 26 assessment
letter for fiscal year 2006. Based on the Indonesian Tax Authorities letter
No. 00015/204/06/092/10, the Company had an overpayment of Income Tax Article 26 of
Rp 8,844,864,229. In the other that, the Company also received the interest of Rp
4,245,534,829, the totaling of Rp 13,090,399,058 had been received on November
24, 2010. Direktorat Jenderal Pajak has filed a Review Petition (PK) against the verdict of
refund. If Review Petition is accepted and approved, the Company has to refund the above
amount along with accrued interest. But until the date of report finished, the result has not
been determined yet.
• On April 21, 2010, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor
Pelayanan Pajak Wajib Pajak Besar Dua) issued an Income Tax Article 26 assessment
letter for fiscal year 2008. Based on the Indonesian Tax Authorities letter No.
00014/204/08/092/10, the Company had additional tax liability of Rp 20,552,395,501. The
tax liability had been compensated in May 2010 with the overpayment of 2008 corporate
income tax. And based on the decision from Indonesian Tax Court No. KEP-
00127/WPJ.19/KP.0203/2012, the Company had an overpayment of Income Tax Article
26 of Rp 20,544,225,183. The overpayment of Income Tax Article 26 had been received
on August 31, 2012.
83
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
a. Company (Continued)
• On April 21, 2010, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor
Pelayanan Pajak Wajib Pajak Besar Dua) issued an Income Tax Article 23 assessment
letter for fiscal year 2008. Based on the Indonesian Tax Authorities letter No.
00023/203/08/092/10, the Company had additional tax liability of Rp 2,019,141,457. The
tax liability had been compensated in May 2010 with the overpayment of 2008 corporate
income tax. Further on July 7, 2010, the Company submits the objection letter to the
Indonesian Tax Authorities.Until the date of report finished, the result has not determined
yet.
• On April 21, 2010, the Indonesian Tax Authorities (Direktorat Jenderal Pajak Kantor
Pelayanan Pajak Wajib Pajak Besar Dua) issued an Income Tax Article 21 assessment
letter for fiscal year 2008. Based on the Indonesian Tax Authorities letter No.
00019/201/08/092/10, the Company had additional tax liability of Rp 901,815,396. The
tax liability had been compensated in May 2010 with the overpayment of 2008 corporate
income tax. Further on July 7, 2010, the Company submits the objection letter to the
Indonesian Tax Authorities.Until the date of report finished, the result has not determined
yet.
g. Administration
• It is noted that Value Added Taxes for the fiscal period October 2012 up to June 2013 and the
2012 Corporate Income Tax is under examined by the Tax Authorities, and until the date of
report finished, the result has not yet been determined.
• Under the taxation laws of Indonesia, the Company and its Subsidiaries submits tax returns on
the basis of self assessment. Under prevailing regulations the Director General of Tax (“DGT”)
may assess or amend taxes within a certain period. For the fiscal years of 2007 and before, this
period is within 10 (ten) years of the time the tax become due, but not later than 2013, while
for the fiscal years of 2008 and onwards, the period is within 5 (five) years of the time the tax
becomes due.
• The Company and its Subsidiaries’ management believe that the Company and its Subsidiaries
have complied with the prevailing tax regulations.
84
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
Pursuant to the notarial deed of Januar Tirtaamidjaja, S.H., No. 22 dated February 15, 1984, the
authorized capital amounts to Rp 15,000,000,000 consisting of 600 shares with a par value of
Rp 25,000,000 each. Issued and fully paid-up capital amounts to Rp 7,500,000,000 (equivalent to
US$ 6,710,179) or consist of 300 shares.
Pursuant to the General Shareholders Meeting with notarial deed of Aulia Taufani, S.H., No. 100 dated
December 27, 2002, the shareholders agreed to approve the changes in the Company’s Articles of
Association to increase the authorized capital from Rp 8,500,000,000,000 to become
Rp 16,000,000,000,000 and issued and paid-in capital from Rp 2,196,960,000,000 to become
Rp 4,174,224,000,000.
Pursuant to the notarial deed of Aulia Taufan, S.H., No. 12 dated July 4, 2006 regarding the
amendment of the Company’s Article of Association and the Extraordinary Shareholders’ Meeting
with notarial deed of the same notary No. 111 dated June 21, 2006, the shareholders approved the
following :
• The authorized capital of the Company amounts to Rp 16,000,000,000,000 and issued and fully
paid up capital amounts to Rp 4,174,224,000,000.
• The allocation of 83,484,480,000 new shares (series C) par value Rp 2 each with to regard to the
debt to equity conversion. The new shares of 43,144,238,750 shares for the unsecured creditors
and new working capital lender and 40,340,241,250 shares for secured creditors.
• To record the paid in capital in excess of par value from debt to equity conversion of
Rp 5,574,513,535,500 (equivalent to US$ 618,017,022).
The deed was approved by the Minister of Justice and Human Right in his decision letter
No. C-25038 HT.01.04.TH.2006 dated August 28, 2006 and registered in the Department of Industry
and Trade under No. 233/BH-1/IX/2006 dated September 1, 2006.
As of December 31, 2006, the authorized capital of the Company amounted to Rp 16,000,000,000,000
consisting of 247,145,100,800 shares with the following classifications.
Issued and fully paid up capital was Rp 2,283,248,477,500 consisting of Series A of 4,393,920,000
shares, and Series C of 43,144,238,750 shares.
In February 2008, the Company amended its Articles of Association in connection with the reverse
stock split with ratio 20 : 1. Based on the notarial deed of Sutjipto S.H., No. 91 dated
February 21, 2008 regarding the changes of the Articles of Association, the authorized capital of the
Company amounts to Rp 16,000,000,000,000 consisting of 12,357,255,040 shares with following
classifications:
85
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
The composition of stockholders as of February 21, 2008 based on notarial deed is as follows :
The deed was approved by the Minister of Justice and Human Rights in his decision letter
No. AHU-10588.AH.01.02 Tahun 2008 dated March 3, 2008.
Based on the Extraordinary General Stockholders Meeting (RUPSLB) held on March 24, 2009 and
based on notarial deed No. 91 dated March 24, 2009 of Sutjipto, S.H., notary in Jakarta, the
stockholders approved the issuance of 118,845,397 new authorized shares series C (5% of issued and
paid-up capital) without preemptive rights in the framework of Grant Date I of stock options
programme to the Company’s management and employees (Management Employee Stock Option
Programme / MESOP). The notarial deed was approved by the Minister of Law of the Republic of
Indonesia based on his decision letter No. AHU-0052619.AH.01.09.Tahun 2009 dated
August 14, 2009. Based on the Company’s schedule that was reported to PT Bursa Efek Indonesia
dated March 17, 2009, this program will be implemented on the period below :
86
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
Based on the notarial deed of Aryanti Artisari, S.H., M.Kn. No. 107 dated February 23, 2012, the
stockholders approved the exercise proce for the first stock option programme of Rp 45 per share. On
March 5, 2012, the Company issued 118,845,397 new authorized shares series C with par value of
Rp 40 each or totaling Rp 4,753,815,880 (equivalent to US$ 524,125). The deed was approved by the
Minister of Law and Human Rights in his decision letter No. AHU-0018443.AH.01.09.Tahun 2012
dated February 29, 2012.
The composition of stockholders as of December 31, 2012, 2011 and 2010 based on the stockholder’s
list issued by the Stock Administrative Office, PT Datindo Entrycom, of listed shares of the Company
is as follows :
2013
Numbers of Percentage of Total
Stockholders Shares Ownership Rp US$
%
Shares Series A:
Shares Series B: – – – –
Shares Series C:
2012
Numbers of Percentage of Total
Stockholders Shares Ownership Rp US$
%
Shares Series A:
87
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
2012
Numbers of Percentage of Total
Stockholders Shares Ownership Rp US$
%
Shares Series B: – – – –
Shares Series C:
Unsettled shares series C represent the creditors that have not exchanged with the new shares (through
The Hongkong and Shanghai Banking Corporation Limited, Hong Kong – the custodian). These
shareholders’ name is not yet registered in PT Datindo Entrycom (share administrator).
Further, based on the Extraordinary General Stockholders Meeting (RUPSLB) held on June 18, 2012
and based on notarial deed No. 88 dated June 18, 2012 of Aryanti Artisari, S.H., M.Kn., notary in
Jakarta, the stockholders approved the issuance of 74,872,600 new authorized shares series C (3% of
issued and paid-up capital) without preemptive rights in the framework of Grant Date II of stock
options programme to the Company’s management and employees (Management Employee Stock
Option Programme / MESOP). The Company’s schedule that was reported to PT Bursa Efek Indonesia
dated March 17, 2012 is as follows :
Until the date of report finished, it has not yet been implemented due to the share market conditions.
According to notarial deed of DR. H. Teddy Anwar, S.H., Spn. No. 111 dated August 16, 2002, the
part of PT Multikarsa Investama’s shares of 2,454,081,290 (or after reverse stock 122,704,064 shares)
were sold to PT Bina Prima Perdana. However, based on the data issued by PT Datindo Entrycom, the
shares are still registered under the name of PT Multikarsa Investama.
88
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
As of December 31, 2013 and 2012, the shares owned by the public included those owned by the
directors of the Company are as follows :
2013 2012
As per the Composition Proposal (Rencana Perdamaian) the Company is issuing 16,780,718,747
shares series C to unsecured creditors and 26,363,520,000 shares series C for Damiano Investments
BV., Netherland in regard to debt to equity conversion of Rp 5,660,802,013,000.
Further, based on the amendment of the Company’s Articles of Association dated July 4, 2006 by
notarial deed No. 12 of Aulia Taufani, S.H., the Company has recognized the advances for future stock
subscription of Rp 5,660,802,013,000 as issued and paid-in capital amounting to Rp 86,288,477,500
and as additional paid-in capital amounting to Rp 5,574,513,535,500 (equivalent to US$ 618,017,022).
89
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
Futher, through the framework of Grant Date I of stock options programme in February 23, 2012, the
Company received Rp 5,348,042,865 for the issuance of 118,845,397 new authorized shares series C,
with a nominal value amounting to Rp 40 per share. The conversion rate of US$ 1 is Rp 9,070.
Under Indonesian Limited Company Law, the Company is required to set up a statutory reserve
amounting to at least 20% of the Company’s issued and paid up capital.
And, based on the annual general stockholders’ meeting as stated in notarial deed No. 351 dated June
23, 1997 and No. 402 dated June 24, 1996 of Adam Kasdarmadji SH, notary public in Jakarta, the
stockholders agreed to appropriate a general reserve aggregating Rp 8,280,000,000 (equivalent to
US$ 2,345,301) from retained earnings in accordance with article 61 of the Corporate Law No. 1 year
1995 for Limited Liability Companies. In 2013 and 2012, the Company was exempted from reserving
additional amounts due to its accumulated deficit.
2013 2012
US$ US$
90
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
2013 2012
US$ US$
2013 2012
US$ US$
2013 2012
91
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
e. Information concerning the classification of securities for diluted earning per share
Options granted to employees are considered to be potential ordinary shares and have been
included in the determination of diluted earning per share to the extent to which they are dilutive.
A calculation is done to determine the number of shares that could have been acquired at fair value
(determined as the average market share price of the Company’s shares) based on the monetary
value of the subscription rights attached to outstanding share options. The number of shares
calculated as above is compared with the number of shares that would have been issued assuming
the exercise of the share options. The options have not been included in the determination of basic
earning (loss) per shares.
This account represents the settlement of insurance claim on inventory loss from damage or theft, and
also the settlement of insurance claim on the Company’s property, plant and equipments who suffered
losses due to floods. The settlement received by the Company in 2013 and 2012 amounting to
US$ 651,761 (equivalent to Rp 6,948,504,974) and US$ 1,667,691 (equivalent to Rp 14,963,001,657),
respectively.
Local
Fibre 230,400,456 218,908,889
Yarn 203,915,018 220,424,369
Chips 31,313,650 46,116,172
Fleece (Knitting) 11,816,680 10,298,045
Bonded (Coating) – 67,368
Others 539,448 1,726,343
477,985,252 497,541,186
92
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
Export
Yarn 70,229,940 75,079,171
Fibre 9,111,724 7,540,421
Chips 6,032,030 17,048,390
Fleece (Knitting) 1,273,533 877,827
PTA 103,750 –
Others 406,211 1,243,881
87,157,188 101,789,690
In 2013 and 2012, net sales of fleece (knitting) and bonded (coating) were US$ 13,090,213 and
US$ 11,243,240, respectively consists of sales to third parties. The product is manufactured by
PT Texmaco Jaya Tbk (under bankruptcy) based on the tolling basis.
In 2013 and 2012, no sales were earned from sales to related parties.
In 2013 and 2012, no sales to third parties exceeded 10% of the operating revenues.
In 2013 and 2012, other operating revenues of fleece, bonded and garment were US$ 611,642 and
US$ 83,216 represents the other operating revenues to third parties. The product is manufactured by
PT Texmaco Jaya Tbk (under bankruptcy) based on the tolling basis.
In 2013 and 2012, no other operating revenues were earned from related parties.
In 2013 and 2012, no sales to third parties exceeded 10% of the operating revenues.
93
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
Raw materials
At beginning of year 19,078,632 28,114,454
Purchases 394,796,044 384,877,731
Indirect materials
At beginning of year 20,014,977 17,702,072
Purchases 55,780,776 57,631,156
Work in process
At beginning of year 6,073,039 6,781,122
At end of year (6,908,098) (6,073,039)
Finished goods
At beginning of year 34,787,985 35,079,711
At end of year (33,734,489) (34,787,985)
In 2013 and 2012, total raw material and indirect material used included the raw material used for
fleece (knitting) and bonded (coating) product after eliminated intercompany account were US$
2,407,895 and US$ 3,145,012, respectively.
94
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
In 2013, purchases from third parties exceeded 10% of total purchases are as follows :
2013
US$ Percentage
In 2012, purchases from third parties exceeded 10% of total purchases are as follows :
2012
US$ Percentage
In 2013, the processing fee (tolling) of US$ 2,946,051 represent the processing fee to PT Texmaco
Jaya Tbk (under bankruptcy) amounting to US$ 782,440, PT Multikarsa Investama amounting to
US$ 2,145,231, and other parties amounting to US$ 18,380. And in 2012, the processing fee (tolling)
of US$ 3,003,021 represent the processing fee to PT Texmaco Jaya Tbk (under bankruptcy) amounting
to US$ 763,471, PT Multikarsa Investama amounting to US$ 2,223,148, and other parties amounting
to US$ 16,402 (Note 41).
In 2013 and 2012, rental expenses to PT Texmaco Jaya Tbk (under bankruptcy) were US$ 180,857 and
US$ 201,348, respectively (Note 41).
95
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
96
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
Finance costs :
Interest expense from working capital loan (Note 21) (2,885,174) (2,936,962)
Interest expense from unsecured debts and
notes payable (Note 20) (905,439) (885,278)
Interest expense from credit financing payables
(Note 22) (9,951) (12,287)
Finance Income :
Interest income from current accounts and
time deposits 31,989 31,754
The Company is controlled by Damiano Investments BV. (domiciled in Netherland) which owns
1,289,079,472 of the Company’s shares (51.65%). The ultimate parent of the Company is ADM
Capital and Spinnaker Capital Group, which are incorporated and domiciled in Hong Kong and United
Kingdom, respectively.
97
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
Nature of Nature of
Name of related parties relationship Transactions
In the normal course of business, the Company and its Subsidiaries entered into certain business and
financial transactions with its related parties. These transactions are normally made at normal price and
conditions as of they were done with non-related parties. These transactions are as follows :
Percentage to total
Assets/ Liabilities
/Expenses
2013 2012 2013 2012
US$ US$ % %
• Manufacturing expenses to related parties accounted for 0.52% and 0.50% for the years ended
December 31, 2013 and 2012, respectively (Note 36).
98
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
The details of processing fee (tolling) and rental expenses to related parties are as follows :
2013 2012
US$ US$
Key management personnel of the Company are the Boards of Commissioners and Directors as
detailed in Note 1d.
Compensation representing salary was given to the Company’s Commissioners and Directors for
the years ended December 31, 2013 and 2012 amounting to Rp 6,847,043,568 and
Rp 6,940,860,309, respectively. No contribution to retirement benefits, entitlement benefits and
any other special benefits were given during the year 2013 and 2012.
On April 1, 2008, the Company arranged the tolling / rental agreement with PT Texmaco Jaya Tbk for
a period of twelve (12) months and can be renewed. This agreement is prepared because the
Subsidiary does not have the necessary working capital to service the orders from its customers. Based
on this agreement, the Company should pay the conversion charges that consisting of tolling fee,
building and machinery rental to PT Texmaco Jaya Tbk each month. The tolling fees are calculated
based on the production results.
On August 3, 2009, the Company arranged the amendment of tolling agreement with PT Texmaco
Jaya Tbk for a period of three (3) months and can be renewed. Based on this agreement, the Company
should pay the tolling fee of US$ 1.20 per yard with the minimum production results of 100,000 yards
to PT Texmaco Jaya Tbk each month. And on October 23, 2009, the Company renewed the tolling /
rental agreement for seven (7) months from November 1, 2009 up to June 30, 2010.
99
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
On July 15, 2010, the Company arranged the amendment of tolling agreement with PT Texmaco Jaya
Tbk for fifthteen (15) months from July 1, 2010 up to September 30, 2011 and can be renewed. Based
on this agreement, the Company should pay the tolling fee of US$ 1.20 per yard for the contract
period from July 1, 2010 up to September 30, 2010, and US$ 0.75 per yard for the contract period
from October 1, 2010 up to September 30, 2011.
On January 10, 2011, the Company arranged the amendment of tolling agreement with PT Texmaco
Jaya Tbk for five (5) years from January 1, 2011 up to December 30, 2016 and can be renewed for
three (3) years later. Based on this agreement, the Company should pay the tolling fee of US$ 0.30 per
kgs and at least US$ 50,000 per month.
Further, based on the latest amendment of tolling agreement with PT Texmaco Jaya Tbk (under
bankruptcy) dated March 23, 2012, the Company agreed to pay the tolling fee of US$ 0.30 per kgs and
subject to minimum fee of US$ 64,000 per month.
• Based on the land rental agreement dated June 15, 2009 between the Company and PT Texmaco
Jaya Tbk (under bankruptcy), the Company agreed to rent the land for 950 meters of gas pipe,
1,500 meters of water pipe, 800 meters of water pump facility and 1,000 meters of electricity
cable. This agreement is valid for thirty (30) years from January 1, 2010 up to December 31,
2040. As consequently, the Company should pay the rental expenses amounted to Rp 100,000,000
per month.
• Based on the warehouse rental agreement dated March 30, 2011 between the Company and
PT Texmaco Jaya Tbk (under bankruptcy), the Company agreed to rent the warehouse for ten (10)
months from March 1, 2011 up to December 31, 2011. Based on the amendment agreement dated
June 28, 2012, December 28, 2012 and July 1, 2013, the Company agreed to extent the warehouse
rental up to December 31, 2013. Further, on January 1, 2014, this agreement has been extended
till June 30, 2014. As consequently, the Company should pay the rental expenses amounted to
Rp 43,200,000 per month.
• Based on the warehouse rental agreement dated November 17, 2011 between the Company and
PT Texmaco Jaya Tbk (under bankruptcy), the Company agreed to rent the warehouse for three
(3) months from November 17, 2011 up to February 17, 2012. Based on the amendment
agreement dated February 15, 2012 and August 16, 2012, the Company agreed to extent the
warehouse rental up to June 30, 2013. As consequently, the Company should pay the rental
expenses amounted to Rp 9,000,000 per month. As of June 30, 2013, this agreement has been
terminated.
100
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
• Based on the warehouse rental agreement dated January 2, 2012 between the Company and
PT Texmaco Jaya Tbk (under bankruptcy), the Company agreed to rent the Coating’s warehouse
for one (1) years from January 2, 2012 up to December 31, 2012. Based on the amendment
agreement dated November 28, 2012 and June 1, 2013, the Company agreed to extent the
warehouse rental up to November 30, 2013. Further, based on the latest amendment agreement
dated November 29, 2013, the Company agreed to extent the warehouse rental up to May 31,
2014. As consequently, the Company should pay the rental expenses amounted to Rp 5,000,000
per month.
• Based on the warehouse rental agreement dated November 28, 2012 between the Company and
PT Texmaco Jaya Tbk (under bankruptcy), the Company agreed to rent the chiller machinery for
one (1) years from January 1, 2013 up to December 31, 2013. Based on the amendment
agreement dated January 1, 2014, the Company agreed to extent the rental of the chiller
machinery up to December 31, 2014. As consequently, the Company should pay the rental
expenses amounted to Rp 5,000,000 per month. It is pending approval by curator of PT Texmaco
Jaya Tbk (under bankruptcy).
Based on the rental agreement dated August 1, 2011 between the Company and PT Texmaco Taman
Synthetics, the Company agreed to rent the laboratory equipments for five (5) years from
August 1, 2011 up to July 31, 2015. As consequently, the Company should pay the rental expenses
amounted to Rp 99,000,000 per month.
The Company and PT Wismakarya Prasetya (WKP) are operationally integrated as the production of
electricity and steam are consumed only by the Company. Since 2004, the Company has been
providing working capital support to WKP for the payment of old dues to PGN, PLN and Tax.
Subsequent to the change of majority shareholders of the Company in 2006, the Company has entered
into an agreement with WKP for the sale purchase of electricity, steam and gas on August 14, 2006.
The Company has offered to increase the price of electricity and steam in line with the increase in the
price of gas, vide its letter in April 22, 2010. Additionally, the Company would incur the cost of
maintenance of turbines as per the standard running hours. The Company should pay the monthly
electricity, steam and gas based on their consumption. Additionally, the Company would incur the
cost of maintenance of turbines as per the standard running hours as a part of cost of purchase of
electricity. This agreement is valid for a period of 5 years, and due on April 22, 2015. The Company
has also fully provided for the Bank guarantee through SBLC for an amount of US$ 5,777,094 and
Rp.16,498,800,000 as of December 31, 2013 equivalent to two (2) months consumption of gas, as
required by the Gas Supply Contract of PGN. The contract for the supply of gas to WKP is due for
extension by end of March 2013. The contract has been extended till March 2018.
101
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
The Company and PT Wismakarya Prasetya (WKP) are engaged in the commercial discussion for
finalizing the prices to be effective from January 1, 2013. WKP has made claims for the past period
which are not commercially viable. In order to firm up the claim on WKP arising on account of sales
advance, the Company has filed a legal suit through Karawang Court and issued a Default Notice to
WKP on December 14, 2012 as per the agreement entered into between the Company
(Polysindo/APF) and WKP on November 16, 2006. WKP has also confirmed their dues to the
Company as at the end of the year 2012.
Beside that, based on the correspondence letter dated March 27, 2013, the Company agreed to pay the
extra charges amounted to US$ 250,000 per month for 6 (six) months. Accordingly, the Company has
paid US$ 250,000 per month beginning April 2013 untill June 2013 for 3 (three) months. PT
Wismakarya Prasetya (WKP), which is supplying 100% energy requirement of the Company’s facility
at Karawang, has been declared bankrupt effective on October 22, 2013 by the Supreme Court, Jakarta
as per its verdict no:440k/Pdt.sus. PAILIT/2013 dated October 22, 2013, based on the debt claim filed
by its creditors. However, the Court has decided to keep WKP as a going concern as it is supplying the
energy requirement of Karawang facility vide its decision vide no: 440K/PDT.SUS/PAILIT/2013 j.o.
No : 05/Pdt.sus/PKPU/2013/PN.Niaga.Jkt.Pst. dated on February 13, 2014. The Company is in the
process entering into a rental agreement of WKP facilities with the curator of PT WKP to ensure
uninterrupted supply of power, steam and gas. The Company will continue to operate and maintain the
power plant with proper upkeep of the facilities of WKP.
43. COMMITMENT
The capital expenditure committed but not yet inccurred as of December 31, 2013 is approximately
US$ 3.41 million.
Amount outstanding above is relating to commitment made by the Company in development and
increase in the Company’s filament yarn and fiber capacity. The commitment has to be exercised
at the year 2014.
The Company leases various warehouse under non-cancellable operating lease agreements. The
lease terms are between 1 (one) year up to thirty (30) years, and the majority of lease agreements
are renewable at the end of the lease period.
102
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
Period of
Counterparties Leased items agreement Amount (Rp)
The future aggregate minimum lease payment under non-cancellable operating leases are as
follows :
2013 2012
US$ US$
44. CONTINGENCIES
• The Directorat Jenderal Pajak has filed a Review Petition against the verdict of the tax court for the
refund of Rp 13,090,399,058 on November 24, 2010. If the Review Petition filed by the Directorat
Jenderal Pajak is won, then the entire refund amount became payable along with the accrued
interest till the date of refund. Until the date of report finished, the result has not been determined
yet.
103
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
• Effective August 19, 2011, one of Subsidiary (PT Texmaco Jaya Tbk) becomes subject to the
control of Court, causing the Company to lose its control. The Count has already set a Supervisory
Judge and curator team to maintain and monitor the operation of bankruptcy assets and cash flows
of the Subsidiary. Net liabilities at the date of lost its control is Rp 656,593,951,279. PT Asia
Pacific Fibers Tbk as parent Company do not have obligation regarding the creditors’ payables of
Subsidiary
• Based on the correspondence letter from PT Bina Prima Perdana dated August 8, 2011, PT Bina
Prima Perdana claims from the Company being the guarantor of the Subsidiary’s loans from Bank
Dharmala and Bank Arya. However, the management of the Company mentioned that the above
guarantees (promissory note) were not registered by PT Bina Prima Perdana during the debt
verification by the curator of PT Asia Pacific Fibers Tbk (formerly PT Polysindo Eka Perkasa Tbk)
during its bankruptcy process in 2005, and consequently, the above claims of PT Bina Prima
Perdana were not valid. In addition, the restructuring process of unsecured debt in PT Asia Pacific
Fibers Tbk has been completed.
• The Company’s land certificates with HGB No. 13 and HGB No. 14 located in Kiara Payung, Kec.
Klari, Karawang have been pledged to PT Bank Negara Indonesia/ PT Bina Prima Perdana in
respect of secured debts of PT Texmaco Jaya Tbk (under bankruptcy). PT Bina Prima Perdana has
claimed with its letter dated February 21, 2013 amounted to Rp 19 billion from the Company for
the release of the pledge. This is under discusson with PT Bina Prima Perdana (Note 14).
Management has determined the operating segments based on the information reviewed by the Board
of Director for the purposes of allocating resources and accessing performance of the Company and its
Subsidiaries.
The Board of Director considers the business from both a geographic and product perspective.
Geographically, management considers the performance in Indonesia, Asia, America, Europe,
Australia and Africa. From a product perspective, management separately considers the business
segment are as follows :
Although the weaving and knitting segment does not meet the quantitative thresholds required by
SFAS 5 for reportable segments, management has conclude that this segment should be reported, as it
is closely monitored by the strategic steering committee as a potential growth and is expected to
materially contribute the Company’s revenue in the future.
104
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
Chemical Weaving
Industry and and
2013 Synthetic fibre Knitting Others Elimination Total
US$ US$ US$ US$ US$
SEGMENT SALES :
External sales
Local 472,173,930 12,416,157 − − 484,590,087
Export
Europe 40,372,801 95,920 − − 40,468,721
America 24,409,910 − − − 24,409,910
Africa 12,200,180 25,843 − − 12,226,023
Asia 6,883,295 1,151,770 − − 8,035,065
Australia 2,017,469 − − − 2,017,469
STATEMENT OF FINANCIAL
POSITION :
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PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
Chemical Weaving
Industry and and
2013 Synthetic fibre Knitting Others Elimination Total
US$ US$ US$ US$ US$
SEGMENT SALES :
OTHER INFORMATION :
Chemical Weaving
Industry and and
2012 Synthetic fibre Knitting Others Elimination Total
US$ US$ US$ US$ US$
SEGMENT SALES :
External sales
Local 488,293,432 10,448,629 − − 498,742,061
Export
Asia 35,709,104 691,483 − − 36,400,587
America 28,909,074 − − − 28,909,074
Europe 16,744,050 186,344 − − 16,930,394
Australia 11,259,124 − − − 11,259,124
Africa 8,290,511 − − − 8,290,511
Total Export 100,911,863 877,827 − − 101,789,690
Inter segment sales 216,141,901 − − (216,141,901) −
Total segment sales 805,347,196 11,326,456 − (216,141,901) 600,531,751
106
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
Chemical Weaving
Industry and and
2012 Synthetic fibre Knitting Others Elimination Total
US$ US$ US$ US$ US$
STATEMENT OF FINANCIAL
POSITION :
OTHER INFORMATION :
The following table shows the carrying amount of segment non-current assets and additions to
property, plant and equipment by geographical area in which the assets are located :
The Company has assets and liabilities denominated in foreign currencies as follows:
2 0 1 3 2 0 1 2
Foreign Equivalent in Foreign Equivalent in
Currency US$ Currency US$
Assets :
Trade receivables :
Third parties IDR 2,467,263,482 202,417 2,019,778,766 208,871
Related parties IDR 268,722,447,174 22,046,308 268,722,447,174 27,789,291
107
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
2 0 1 3 2 0 1 2
Foreign Equivalent in Foreign Equivalent in
Currency US$ Currency US$
Assets :
Liabilities
Trade payables :
Third parties IDR 40,311,478,552 3,307,201 30,425,613,348 3,146,392
YEN 7,433,538 70,847 4,780,473 55,368
SGD 51,618 40,773 27,904 22,817
GBP 10,444 17,220 – –
EUR 388,986 536,821 284,392 376,738
SEK 52,758 8,217 5,128,579 789,041
CHF 138,304 155,809 – –
Monatary assets and liabilities mentioned above are translated using Bank Indonesia closing rate as at
December 31, 2013 and 2012.
108
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
The Company and its Subsidiaries have exposure to the following risks from its use of financial
instruments:
• Credit Risk
• Liquidity Risk
• Market Risk
This note presents information about the Company and its Subsidiaries’ exposure to each of the above
risks, the Company and its Subsidiaries’ objectives, policies and processes for measuring and
managing risks, and the Company and its Subsidiaries’ management of capital. The main purpose of
the Company and its Subsidiaries’ dealings in financial instruments is to fund their respective
operations and capital expenditures. The Company and its Subsidiaries do not actively engage in the
trading of financial assets for speculative purposes nor does it write options. The BOD has overall
responsibility for the establishment and oversight of the Company and its Subsidiaries’ risk
management framework. The BOD is also responsible for developing and monitoring the Company
and its Subsidiaries’ risk management policies.
The Company and its Subsidiaries’ risk management policies are established to identify and analyze
the risks faced by the Company and its Subsidiaries, to set appropriate risk limits and controls, and to
monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to
reflect changes in market conditions and the Company and its Subsidiaries’ activities. All risks faced
by the Company and its Subsidiaries are incorporated in the annual operating budget. Mitigating
strategies and procedures are also devised to address the risks that inevitably occur so as not to affect
the Company and its Subsidiaries’ operations and forecasted results. The Company and its
Subsidiaries, through its training and management standards and procedures, aims to develop a
disciplined and constructive control environment in which all employees understand their roles and
obligations.
The BOD performs oversight role over financial reporting functions, specifically in the areas of
managing credit, liquidity, market and other risks of the Company and its Subsidiaries. The BOD
undertakes reviews of risk management controls and procedures and ensures the integrity of internal
control activities which affect the financial reporting system of the Company and its Subsidiaries.
a. Credit Risks
Credit risk represents the risk of loss the Company and its Subsidiaries would incur if customers
and counterparties fail to perform their contractual obligations.
Financial information on the Company and its Subsidiaries’ maximum exposure to credit risk as of
December 31, 2013 and 2012, without considering the effects of collaterals and other risk
mitigation techniques, is presented below:
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PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
2013 2012
US$ US$
The management evaluates the financial condition of the banking industry and bank
deposits/investments are maintained with reputable banks only. For banks, only independently
rated parties with a minimum rating of “A” are accepted. The credit quality can be assessed by
reference to external credit ratings are as follows :
2013 2012
US$ US$
- Pefindo :
idAAA 413,094 409,298
idAA+ 190,657 214,345
5,017,263 9,713,421
Majority of the Company and its Subsidiaries’ credit risk on receivables is attributed to its
activities influenced mainly by the individual characteristics of each customer and non-interest
bearing advances made to the Company and its Subsidiaries with similar operations. The
demographics of the Company and its Subsidiaries’ customer base, including the default risk
of the industry and regions in which customers operate, has an influence on credit risk.
110
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AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
In respect of trade receivables, the Company and its Subsidiaries are not exposed to any
significant credit risk exposure to any single counterparty or any group of counterparties
having similar characteristics. Trade receivables consist of a large number of customers. Based
on historical information, the customer default rates in the settlement of receivables is low due
to the settlement from customers are normally received by the Company and its Subsidiaries
with in the credit term. Moreever, some of export sales are on cash before delivery or a portion
of the sales are collected a front (prefinance). Thus, the management noted that the outstanding
of trade receivables have not impaired.
The Board of Director has established a credit policy under which each advanced amount
requested by new customer/counterparties is analyzed individually for creditworthiness before
standard credit terms and conditions are granted. The Company and its Subsidiaries’ review
includes the requirements of updated credit application documents, credit verifications through
the use of no negative record requests and list of blacklisted accounts, and analyses of financial
performance to ensure credit capacity. The status of each account is first checked before
advances are approved.
The credit quality of financial assets that are neither past due or impaired, and past due but not
impaired can be assessed by reference to historical information about counterparty default
rates.
2013 2012
Gross Amount Impairment Gross Amount Impairment
Counterparties without
external credit rating :
Group 1 51,737,731 – 57,895,491 –
Group 2 129,854 – 92,537 –
Group 3 37,704,253 15,657,945 43,447,236 15,657,945
111
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
Based on historical default rates, the Company and its Subsidiaries believe that no impairment
allowance is necessary in respect of receivables in Group 1 and Group 2 not past due or past
due can be collected.
In respect of other receivables, the Company and its Subsidiaries are not exposed to any
significant credit risk exposure to any single counterparty or any group of counterparties
having similar characteristics. Based on historical information about customer default rates,
management consider the credit quality of other receivables in Group 1 and Group 2 have not
impaired.
The credit quality of financial assets that are neither past due or impaired, and past due but not
impaired can be assessed by reference to historical information about counterparty default
rates.
2013 2012
Gross Amount Impairment Gross Amount Impairment
Counterparties without
external credit rating :
Group 1 1,753,395 – 1,199,052 –
Group 2 224,779 – 341,499 –
Group 3 38,098,549 36,721,575 38,481,931 36,721,575
Non-trade receivables from related party represent the receivables from PT Multikarsa
Investama (related party). The Company and its Subsidiaries’ management stated that there is
no impairment indication that could be counted from the estimated cash flow in the future, due
to PT Multikarsa Investama is still in the debt restructuring process with PT Perusahaan
Pengelola Aset (PPA). In addition, the said value will be suitably adjusted at the time of
restructuring.
112
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
The Company and its Subsidiaries’ management noted that there is no impairment indication
in the restricted cash in banks that could be counted from the estimated cash flow in the future,
due to the Company and its Subsidiaries are still in the debt restructuring process with PT
Perusahaan Pengelola Aset (PPA). In addition, the said amount will be suitably adjusted at the
time of restructuring.
b. Liquidity Risk
Liquidity risk pertains to the risk that the Company and its Subsidiaries will encounter difficulty in
meeting obligations associated with financial liabilities that are settled by delivering cash or
another financial asset.
The Company and its Subsidiaries manage liquidity risk by forecasting projected cash flows and
maintaining a balance between continuity of funding and flexibility. Treasury controls and
procedures are in place to ensure that sufficient cash is maintained to cover daily operational and
working capital requirements.
Management closely monitors the Company and its Subsidiaries’ future and contingent obligations
and sets up required cash reserves as necessary in accordance with internal requirements.
The following are the contractual maturities of financial liabilities, including estimated interest
payments and excluding the impact of netting agreements of the Company and its Subsidiaries:
113
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AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
c. Market Risks
Market risk is the risk that changes in market prices, such as interest rates, foreign exchange rates,
and other market prices will affect the Company and its Subsidiaries’ income or the value of its
holdings of financial instruments. The objective of market risk management is to manage and
control market risk exposures within acceptable parameters, while optimizing the return.
The Company and its Subsidiaries are subject to various market risks, including risks from interest
rates, and currency exchange rates.
Interest rate risk is the impact of rate changes on interest bearing assets and liabilities. The
interest risk exposure is mainly from changes in fixed rate and floating interest rates. When
considered appropriate, in order to manage the interest rate risk, interest rate swaps are entered
into to mitigate the fair value risk relating to fixed-interest assets or liabilities and the cash
flow risk related to variable interest rate assets and liabilities.
The Company and its Subsidiaries’ policy are to minimize interest rate risk exposure on long-
term financing. Longer-term borrowings are therefore usually at fixed rates. At December 31,
2013 and 2012, the Company and its Subsidiaries have applied the fixed interest rates for their
loans to banks, third parties and related parties, so there is no interest rate risk esposure in the
Company and its Subsidiaries.
114
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
Most of the Company and its Subsidiaries’ transactions are carried out in other currencies.
Exposure to currency exchange rates arise from the Company and its Subsidiaries’ operational
activities, which are denominated in Indonesian Rupiah and currencies other than United
States Dollar.
The Company and its Subsidiaries are aware of the market risk due to foreign exchange
fluctuation. Management has set up a policy to require Company and its Subsidiaries to
manage their foreign exchange risk against their functional currency. There are no specific
arrangements to reduce such risk exposures through derivatives and other hedging instruments.
Foreign exchange risk arises when future commercial transactions or recognized assets or
liabilities are denominated in a currency that is not the Company and its Subsidiaries’
functional currency.
To mitigate the Company and its Subsidiaries’ exposure to foreign currency risk, the Company
and its Subsidiaries actively monitors the foreign currency movements and together with
principal to manage the impact of the foreign exchange fluctuations. Foreign currency
denominated financial assets and liabilities, translated into United States Dollar at the middle
rate, are stated in Assets and Liabilities in Foreign Currency (Note 46).
The management believes that the Company and its Subsidiaries are naturally hedged against
foreign exchange risk. The risk is measured using cash flow forecasts with sensitivity analysis.
The table below summarizes the sensitivity analysis to the possibility changes of foreign
exchange rates, with considering all other factors are held constant, to the consolidated
statements of comprehensive income for the year ended December 31, 2013 :
2013
US$
Net (2,940,994)
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PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
Management conducted a survey among banks to get an estimate on exchange rate of foreign
currencies until the reporting date. The estimate changes of foreign exchange rate are increased
by 1.96% for Japanese Yen and 0.37% for Great British Poundsterling. And the estimate
changes of foreign exchange rate are decreased by 2.13% for Indonesian Rupiah, 0.86% for
European Euro, 0.25% for Singapore Dollar, 0.76% for Krona Swedish, and 0.81% for Swiss
Franc if compared with the exchange rate on December 31, 2013.
The Company and its Subsidiaries’ policy is to manage the financial assets denominated in
foreign currencies are available to settle the financial liabilities denominated in foreign
currencies. At December 31, 2013, the financial liabilities denominated in foreign currencies
are in excess of financial assets denominated in foreign currencies at amount of
US$ 152,676,001 due to unrestructured long-term secured debts are shown in their full value.
If the above mentioned secured debts denominated in Indonesian Rupiah and currencies other
than US Dollar are not considered, there are no excess of financial liabilities over the assets.
This is a manageable level as the loans are repayable over a period of time.
Financing Arrangements
The Company has letter of credit facility from Deutsche Bank totaling of US$ 100,000,000. The
facility is available on various periods up to March 31, 2014. As of December 31, 2013, the unused
portion was US$ 7,979,757.
The fair value of financial assets and financial liabilities must be estimated for recognition and
measurement or for disclosure purposes.
PSAK No. 60, “Financial Instruments : Disclosures” requires disclosure of fair value measurements
by level of the following fair value measurement hierarchy :
1. Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1).
The fair value of financial instrument traded in active markets is based on quoted market prices at
the reporting date. The quoted market price used is the current bid price, while financial liabilities
use ask price.
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AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
2. Inputs other than quoted prices included within level 1 that are observable for the assets or liability,
either directly (as prices) or indirectly (derived from prices) (level 2), and
The fair value of financial instruments that are not traded in active market (such as derivative over-
the-counter) is determined using valuation techniques. These valuation techniques maximize the
use of observable market data where it is available and rely as little as possible on estimates. If all
significant inputs required to fair value an instrument are observable, the instrument is included in
level 2.
3. Inputs for the asset and liability that are not based on observable market data (unobservable inputs)
(level 3).
If one or more of the significant inputs is not based on observable market data, the instrument is
included in level 3.
(a) The use of quoted market prices or dealer quotes for similar instruments, and
(b) Other techniques, such as discounted cash flow analysis, are used to determine fair value for the
remaining financial instruments.
The Company and its Subsidiaries’ financial assets and liabilities that are measured and recognized
using the fair value measurement of level 2 and 3.
The fair values of financial assets and liabilities together with the carrying amounts are as follows:
Financial assets :
Current Assets :
Cash and cash equivalents 5,101,421 5,101,421 9,793,989 9,793,989
Trade receivables, net 73,913,893 73,913,893 85,777,319 85,777,319
Other receivables, net 3,355,148 3,355,148 3,300,907 3,300,907
Other current financial assets 9,158,563 9,158,563 7,720,808 7,720,808
Non-current assets :
Non-trade receivables from
related parties 24,836,407 24,836,407 32,474,040 32,474,040
Other non-current financial
Assets 1,029,093 1,029,093 1,113,711 1,113,711
117
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
Financial liabilities :
Current Liabilities:
Trade payables 33,115,314 33,115,314 22,949,484 22,949,484
Accrued expenses 36,967,461 36,967,461 43,319,170 43,319,170
Bank Loans 87,910,672 87,324,406 78,752,462 78,563,511
Secured Debts 965,681,557 965,681,557 1,000,263,703 1,000,263,703
Current portion of long-
term liabilities:
Credit financing payables 30,572 30,572 64,651 64,651
Other short-term
financial liabilities 6,323,597 6,323,597 4,150,965 4,150,965
Non-current:
Unsecured Debts
and Notes Payable 22,624,894 20,476,087 22,169,338 20,541,883
Working capital loans 17,340,000 16,665,315 17,340,000 17,034,668
Credit financing payables 27,132 27,132 55,535 55,535
Short-term financial assets and liabilities with remaining maturities of one (1) year or less (cash and
cash equivalents, trade receivables, other receivables, other current financial assets, trade payables,
accrued expenses, and other short-term financial liabilities). The net carrying value of these financial
assets and liabilities is considered a reasonable approximation of their fair value due to their short-term
maturities.
Long-term fixed-rate financial instruments with remaining maturities over one (1) years. The fair value
of these financial assets and liabilities is determined by discounting future cash flows using applicable
interest rates from observable current market transactions for instruments with similar terms, credit risk
and remaining maturities.
Based on the above different level from fair value hierarchy, the following table represents the
Company’s assets and liabilities that are measured at fair value as of December 31, 2013 and 2012:
December 31, 2 0 1 3
Level 1 Level 2 Level 3 Total
US$ US$ US$ US$
Financial assets :
Current Assets :
Cash and cash equivalents – 5,101,421 – 5,101,421
Trade receivables, net – 73,913,893 – 73,913,893
Other receivables, net – 3,355,148 – 3,355,148
Other current financial assets – 9,158,563 – 9,158,563
Carried forward – 91,529,025 – 91,529,025
118
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AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
December 31, 2 0 1 3
Level 1 Level 2 Level 3 Total
US$ US$ US$ US$
Non-current assets :
Non-trade receivables from
related parties – – 24,836,407 24,836,407
Other non-current financial
Assets – – 1,029,093 1,029,093
Financial liabilities :
Current Liabilities:
Trade payables – 33,115,314 – 33,115,314
Accrued expenses – 36,967,461 – 36,967,461
Bank Loans – 87,324,406 – 87,324,406
Secured Debts – – 965,681,557 965,681,557
Current portion of long-
term liabilities:
Credit financing payables – 30,572 – 30,572
Other short-term
financial liabilities – 6,323,597 – 6,323,597
Non-current:
Unsecured Debts
and Notes Payable – 20,476,087 – 20,476,087
Working capital loans – 16,665,315 – 16,665,315
Credit financing payables – 27,132 – 27,132
December 31, 2 0 1 2
Level 1 Level 2 Level 3 Total
US$ US$ US$ US$
Financial assets :
Current Assets :
Cash and cash equivalents – 9,793,989 – 9,793,989
Trade receivables, net – 85,777,319 – 85,777,319
Other receivables, net – 3,300,907 – 3,300,907
Other current financial assets – 7,720,808 – 7,720,808
119
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AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
December 31, 2 0 1 2
Level 1 Level 2 Level 3 Total
US$ US$ US$ US$
Non-current assets :
Non-trade receivables from
related parties – – 32,474,040 32,474,040
Other non-current financial
Assets – – 1,113,711 1,113,711
Financial liabilities :
Current Liabilities:
Trade payables – 22,949,484 – 22,949,484
Accrued expenses – 43,319,170 – 43,319,170
Bank Loans – 78,563,511 – 78,563,511
Secured Debts – – 1,000,263,703 1,000,263,703
Current portion of long-
term liabilities:
Credit financing payables – 64,651 – 64,651
Other short-term
financial liabilities – 4,150,965 – 4,150,965
Non-current:
Unsecured Debts
and Notes Payable – 20,541,883 – 20,541,883
Working capital loans – 17,034,668 – 17,034,668
Credit financing payables – 55,535 – 55,535
The following table presents the changes in Level 3 instruments are as follows :
Non-trade Other
receivables non-current
from related financial Secured
parties assets debts Total
US$ US$ US$ US$
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AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
The Company and its Subsidiaries’ objective when managing capital is to safeguard the Company and
its Subsidiaries’ ability to continue as a going concern in order to provide returns for shareholders and
benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.
The Company and its Subsidiaries actively and regularly reviews and manages its capital structure to
ensure optimal capital structure and shareholder returns, taking into consideration the future capital
requirements and capital deficiency of the Company and its Subsidiaries, prevailing and projected
profitability, projected operating cash flows, projected capital expenditures and projected strategic
investment opportunities. In order to maintain or adjust the capital structure, the Company and its
Subsidiaries may from time to time adjust the amount of issue new shares or increase/reduce debt
levels.
Consistent with others in the industry, the Company and its Subsidiaries monitor capital on the basis of
the gearing ratio. The gearing ratio as of December 31, 2013 and 2012 are as follows :
2013 2012
US$ US$
The total borrowings include the unrestructured secured debts of US$ 965,681,557. The Company
endevours to restructure this debt to a sustainable level and for which the negotiations are underway
with its secured creditors including PPA/BPP. If the proposal of the Company which includes debt to
equity swap and waiver of the past interest amounts is accepted by its creditors, it will considerably
improve the capital gearing structure of the Company and its Subsidiaries.
The Indonesian Institute of Accountants (“IIA”) has issued new or revision of the following the
Indonesian Financial Accounting Standards (“PSAK”) and its interpretation (“ISAK”). The accounting
standards which will be effective or applicable on the Company and its Subsidiaries’ financial
statements covering periods beginning on or after January 1, 2014:
121
PT ASIA PACIFIC FIBERS Tbk
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2013 and 2012
The Company and its Subsidiaries’ management is currently evaluating the possible impact on these
new and revised accounting standards and interpretations on its consolidated financial statements.
Certain accounts in the 2012 consolidated financial statements have been reclassified in line with the
presentation of the 2013 consolidated financial statements. The details is a follows :
The Company published consolidated financial statements. The supplementary financial information of
PT Asia Pacific Fibers Tbk (Parent Entity only) in schedule 1 until schedule 6 that has been prepared
in order to analyse Parent Entity only’s result of operations. The following supplementary financial
information of PT Asia Pacific Fibers Tbk (Parent Entity only) should be read in conjuction with the
consolidated financial statements of PT Asia Pacific Fibers Tbk and its Subsidiaries.
122
Schedule -1
2013 2012
US$ US$
ASSETS
CURRENT ASSETS
Cash and cash equivalents 5,080,845 9,773,413
Trade receivables, net after allowance for
impairment of US$ 15,657,945 in 2013
and 2012
Third parties 51,867,585 57,988,028
Related parties 22,046,308 27,789,291
Other receivables, net after allowance for
impairment of US$ 36,721,575 in 2013
and 2012
Third parties 3,355,148 3,300,907
Other current financial assets 9,158,563 7,720,808
Inventories 86,227,237 79,954,633
Purchase advances
Third parties 37,362,097 34,605,192
Related party 54,799 –
Prepaid taxes 18,903,911 14,786,048
Prepaid expenses 1,691,803 1,101,627
NON–CURRENT ASSETS
Non-trade receivables from related parties, net
after allowance for impairment of
US$ 111,997,893 in 2013 and 2012 27,501,952 35,139,585
Other non-current financial assets 1,029,093 1,113,711
Property, plant and equipment, net after
accumulated depreciation of US$ 1,714,202,396
in 2013 and US$ 1,658,522,816 in 2012 82,224,751 129,394,646
Intangible Assets 12,087 12,750
Investment in subsidiaries 31,170 31,170
Deferred tax assets 9,620,194 3,216,621
2013 2012
US$ US$
LIABILITIES AND EQUITY (DEFICIENCY)
CURRENT LIABILITIES
Trade payables
Third parties 33,115,314 22,942,334
Related party – 7,150
Accrued expenses 36,967,461 43,319,170
Taxes payable 1,741,319 1,751,095
Bank Loans 87,910,672 78,752,462
Secured Debts 965,681,557 1,000,263,703
Current portion of long-term liabilities:
Credit financing payables 30,572 64,651
Other short-term financial liabilities 6,248,666 4,076,034
NON–CURRENT LIABILITIES
Borrowing from Other Financial
Institutions :
Unsecured Debts and Notes Payable 22,624,894 22,169,338
Working capital loans 17,340,000 17,340,000
Credit financing payables 27,132 55,535
Deferred revenues 237,652 –
Long-term employee benefit liabilities 9,392,014 10,274,737
2013 2012
US$ US$
LIABILITIES AND EQUITY (DEFICIENCY)
EQUITY (DEFICIENCY)
Share Capital
Authorized 12,357,255,040 shares at Rp 10,000
par value per Series A, Rp 1,000 par value
per Series B and Rp 40 par value per Series C
in 2013 and 2012
Issued and paid up 219,696,000 Series A and
2,276,057,347 Series C in 2013 and 2012 635,689,316 635,689,316
Additional paid-in capital 624,344,507 624,344,507
Retained earnings (accumulated deficit)
Appropriated 2,345,301 2,345,301
Unappropriated (2,087,528,834) (2,057,466,903)
2013 2012
US$ US$
REVENUES
Net sales 565,142,440 599,330,876
Other operating revenues 6,604,835 1,200,875
Total revenues 571,747,275 600,531,751
722,105 (17,532,078 )
Retained earnings
(accumulated deficit)
Additional Total equity
Share Capital paid-in capital Appropriated Unappropriated (deficiency)
2013 2012
US$ US$