PT TH Indo Plantations and its subsi ry Consolidated financial statements as of December 31, 2016 and for the year then ended with independent auditors’ reportPurwantono, Sungkoro & Surja Independent Auditors’ Report Report No. RPC-4322/PSS/2017 The Shareholders and the Board of Commissioners and Board of Directors ®T TH Indo Plantations and its subsidiary We have audited the accompanying consolidated financial statements of PT TH Indo Plantations (the Company") and its subsidiary, which comprise the consolidated statement of financial position as of December 31, 2016, and the consolidated statements of profit or loss and other 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's responsibility for the financial statements 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 error. Auditors’ responsibility Our responsibility is to express an opinion on such consotidated financial statements based on our augit. 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 cansolidated financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the consolidated 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 consolidated 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 internal control. An audit also includes evaluating the appropriateness of accounting olicies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We betleve that the audit evidence we have obtained is sufficient and appronriate to provide a basis for our aucit opinion,Independent Auditors’ Report (continued) Report No. RPC-4322/PSS/2017 (continued) Opinion In our opinion, the accompanying consolidated financial statements present fairly, in all materia! respects, the consolidated financial position of PT TH Indo Plantations and its subsidiary as of December 31, 2016, and their consolidated financial performance and cash flows for the year then ended, in accordance with Indonesian Financial Accounting Standards, Emphasis of matter As disclosed in the Note 4 to the accompanying consolidated financial statements, the Company restated its consolidated financial statements as of December 31, 2015 and 2014 and the years then ended due to early adoption of PSAK 16: Beerer piants, using revaliatian method. Our opinion is nat modified in respect of such matter, ono, Sungkoro & Surja Agung Poywanto Public|acchuntant Registration No. AP.O687PT THINDO PLANTATIONS AND ITS SUBSIDIARY CONSOLIDATED STATEMENT OF FINANCIAL POSITION As of December 31, 2016 {Expressed in thousands of Rupiah, unless otherwise stated) Notes ASSETS ‘CURRENT ASSETS Cash and cash equivalents 5 ‘Accounts receivables 6 Inventories, net 7 ‘Advances and prepayments 8 Prepaid taxes 160 Loan to related parties 9% Loan toa shareholder 8c ‘Coan to third parties 10 TOTAL CURRENT ASSETS NON-CURRENT ASSETS: Estimated ciaims for refundable taxes 16b Fixed assets and bearer plants, net 14 Intangible assets, net 2 Other non-current assets 3 ‘TOTAL NON-CURRENT ASSETS TOTAL ASSETS LIABILITIES AND EQUITY LIABILITIES, ‘CURRENT LIABILITIES Sales advances 4 Deposit from customers 15 Accounts payables, accruals, ‘and provisions w Taxes payable 16¢ Short-term bank loan 183 Current maturities of long-term bank loans 18b ‘Currant maturities of consumer finance liabilities 19 Loan from related parties 9e Loan from a third party 20 ‘TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Provision for employee service entitlements a Long-term bank loans - net of ‘current maturities 18 Consumer finance abilities -net of ‘current maturities ‘9 Deferred tax lebiliies 16 TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES “The accompanying nates to te consolidated anc 2016 90,085,851 56,889,653, 125,567,510 7,822,780 2.034586 660,042'719 3,783,031'526 23,200,000 4,748,751,628 7,817,300,088 5,471,826 64,187,889 7,886,920,803 12,635 684,426 158,069,702 $37,732,031 407,568,382 671,800,000 685,000,000 1,231,316 1,148,757:336 131,713,108 3,744,871 875 80,845,661 3,878,069,202 2,303,759 1,408,205,344 5,369,429,963 9,111,205,88 2018 As restated, Noto 4 58,470,192 271,308,277 ‘61,388,207 20,452,552 52,007,010 2,880,327,270 '3)859,505,747 62,641,600 7,166,098,655 68,468,348 7,891,679,062 7,783,380 124,791,253 7,592,722,073 1,309,998 2,798.843,772 764,257,038 200,634,341 817,086,036 514,549,584 252,583,998 '5,309,264,767 48,145,359 4,573,869,202 1,254,020,086 5,876,034,647 11,275,209,414 Jan 4, 2015) Dec 31, 2014 ‘As restated, Note 4 275,832,026 328,206,177 284,158,739 27,195,910 8814921,748 6,410,314,596 48,675,602 7,296,375,126 600,599, 124,313,770 7,468,965,187 13,879,279,783, 4,331,175 2,510,044,164 487,700,162 284,184,291 557,934,000 298,000,000 4,106,193,792 22,496,992 4,601,598,596 4,103,628,929 5,727,724,517 9,893,918,309 al statements rotes form an integral part ofthese consolidated nancial stalements, 1PT TH INDO PLANTATIONS AND ITS SUBSIDIARY CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued) As of December 31, 2016 (Expressed in thousands of Rupiah, unless otherwise stated) Equiry Share capita ‘Authorized, issued and fully paid - 324,000,000 shares vith par value Fip1,000 {in full amount) each 2 ‘Share premium Foreign exchange rate difference ‘on paid - up capital 23 Revaluation surplus it Other reserve 28 Accumulated deficits TOTAL EQUITY TOTAL LIABILITIES AND EQUITY 2016 324,000,000 1,063,368,000 51,914,984 4293,140.997 (1,480,328) (2:206,548,047) 3,524,985,588 12,635,681,428 2015 As restated, Note 4 324,000,000 1,063,368,000 51,914,964 3,678,695,248 5,178,926 (1,639,636,624) 3,483,521,514 14,758,820,928, Jan 4, 20151, Deo 31, 2014 As restated, Note 4 324,000,000 1,083,368,000 51,914,964 3.404.448.9358 (798,369,848) 4,045,361,474 13,879,279,783 ‘The accompanying notes tothe consolidated financial elatements nots frm an inlegrl prtof these consolidated financial statements 2PT TH INDO PLANTATIONS AND ITS SUBSIDIARY CONSOLIDATED STATEMENT OF PROFIT OR LOSS ‘AND OTHER COMPREHENSIVE INCOME For the Year Ended December 31, 2016 (Expressed in thousands of Rupiah, unless otherwise stated) Notes 2016 SALES 25 1,979,870.181 Cost oF SALES 28 (1,750,719,704) GROSS PROFIT 229,150,477 OPERATING EXPENSES: Seling and marketing expenses 7 (18,721,804) General and adminisratve expenses 28 (210,341:458) Other operating expences, net 2 125,767,158 TOTAL OPERATING EXPENSES (103,276,183) OPERATING PROFIT KLOSS) 125,874,204 OTHER INCOMENEXPENSES): Interest income 20 187:356.887 Final taxon interest income (250,685) 187,106,202 Finance costs a (738,080;108) OTHER EXPENSES, NET (648,973,907) LOSS BEFORE INCOME TAX (423,090,628) Corporate income tax expense 164 (213,595,006) LOSS FOR THE YEAR (636,694,928) OTHER COMPREHENSIVE INCOME ‘Other comarenensive income not tobe reclassified to proft or iss in subsequent periods Foreign exchange differences on translating of foreign subsiciay (21,296) (Loss}igain on remeasurement of defined benefit plans 2 (6863961) Related deterred income tax 2216985, Revaluation surplus 1" 912,304,330 Related deferred income tex " (228,076,085) ther comprehensive income forthe year 677,569,002 TOTAL COMPREHENSIVE INCOME/(LOSS) 40,864,074 2015 As restated, Note 4 1,996,234,656 (1,975,492,802) 19,741,854 (17,696,063) (192'889,063) (204,098,233) (414,683,259) (304,941,505) 210,054,898 (239.516) 209,815,382 (751,129,107) (541,313,725) (936,255,230) 2,729,208 3,286,171 (816,543) 518,810,958 304,287,145 (561,839,960) “The accompanying roles to the consolidated financial statements notes form an inagral pata these consolidated facial ‘statoments 3‘WVOUIREIs e=UeUy payemIosueD asou Jo ued esBeyU Ue UNO} SoU SIUBUA ’ es'sor'szs's ——Uuvo'eeseaz'z) —_(ozc‘ose's) Lee'ort'ese'y |. HOeMEG'IS ———_Ooo'eae"es0' ——and'a0d'ree 5 sos'zav'e9 (soszazea) : (6z's2) (es2'12) 62'088'229 (es6'ze8'9) vse'ezz'va9 Gezs'ves'ges) ——_—(@z6'ye9'8e0) - ris'izs'con's —(wza'sro'ses's) ——aze'eut's ave'seo'eus'e —- se6vle'ts ——ono'aee'ea0' ——ond‘ano'vee eeeiser 5 (exe v98 sov'ere'z pez'eze'z zy 1991166 azv'ewr'e 61z'00'600 : Gor'zzr'es0) sav'ioe'sto'r asr'erv'vov'c - -pe6'vis'ls §——on'ear'ea0": ——ano'oon'rze ase'errvore esrerrvore (ocs'ons'zse) ——(oes'008'z80) : sno'evr'ess, (ese'cas'sts) wec'ris'ts ——oo'gar'eao's ——ana'ono'wee ‘unto feideo urpred —winyuosd oeys———rendeo reo. wo cousioyip eleus. ‘bueyoxs ubo104 (peqeys esymueygo ssajun ‘1 ‘9102 ‘Le Jaquieoeg papue see, ALINDA NI SJONVHD 4O INSWALVLS GALVarOSNOO AMVIGISENS SLI CNY SNOLLVINVTd OGNI Hi Ld dmy Jo spuesnoyp ut passaidxg) -:UeUY paLenOSsUED a 0} SoroU BuyhuEGWODOE OU 9302 ‘1¢ soquie09q 0 se eouerea sridns voyeryenes wo 0}8U81, souovayip uonersuan fxprsans woo 189K 0 too ensuayestbo 180 1h 9130) 5807 (y 10n) parerso: se “shox ‘1s soqur990q Jo se souereg (ston) poise: "anjdins wonenena! wos 0801. ‘souorayp ogee Kplsans uBio (7 210N) pateyses se “109k 29110) ‘ou ansaa.du00 410 (9 210N) payee! 82 ak 2490) 8807 ( o10n) porers0s se “yioz "yg soquuooeq Jo se ooueres ( 210N) paiieas se 109K 241305 Suloot aneuaysuo9 2h 210N) poreysa: se 08h 2410} 507 (poupnewn) 102 Ye s9quios9q jo ee oouetegPT TH INDO PLANTATIONS AND ITS SUBSIDIARY CONSOLIDATED STATEMENT OF CASH FLOWS For the Year ended December 31, 2016 (Expressed in thousands of Rupiah, unless otherwise stated) Notes CASH FLOWS FROM OPERATING ACTIVITIES: Loss before income tax Adjustments to reconcile loss before income tax to net cash (used in)/provided by operating activti Depreciation of fixed assets and bearer plants ‘Amortization of intangible assets ‘Amortization of deferred charges. Loss in writen off bearer plants (Reversal)iallowance for impairment of receivables 6 ‘Allowance for impairment of inventory 7 Gain on revaluation 290 Finance costs 34 Interest income 30 Unrealized foreign exchange (gainY/loss Employee service entitlements expense 24 Changes in operating assets and liablities: ‘Accounts receivables, advances and prepayments Prepaid taxes Inventories ‘Account payables, accruals and provisions Sales advances Deposit from customers ‘Taxes payable Payment of employee service entitiements 2 Estimated claims for refundable taxes Corporate income tax payments tee Net cash (used in)/provided by operating activities CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of fixed assets 1" Increase/(decrease) in advance for purchase of fixed assets Additions cost of intangible assets 2 Additions cost of construction in progress 1" Additions cost of maintenance of channel 13 ‘Additions cost of bearer plants - immature plantations 11 Loan to related parties Loan to a shareholder Loan to third parties Interest income received 30 Net cash provided by/(used in) investing activities 2016 (423,099,623) 842,218,820 2,356,473 50,682,679 8,560,290 (1,037,349) 2,399,014 736,080,109 (187,356,887) 43,540,094 24,179,089 132,549,837 49,975,424 24,749,474 (10,606, 769) 196,759,704 (2,788,843,772) (204,805,486) (342,708) 68,468,348 (36,469,376) (1,482,945,638) (71,377,221) 10,955,020 (44,908) (150,462,720) (121,881,702) 2,220,284,551 (123,525,777) 39,441,500 187,358,887 2018 (As restated - Note 4) (936,255,230) 932,469,557 1,298,674 48,474,875, 38,949,660 1,858,086 10,494,436 (150,618,771) 751,129,107 (210,054,898) 305,053,655 28,980,830 172,586,726 (52,834,112) 102,770,432 94,183,711 @1,t77) (22,044,164) 6,450,050 (66,293) 2,808,721 (21,274,276) 1,103,779,599 (77,708,430) (28,638,163) (8,481,465) (220,161,174) (9,210,107) (100,426,839) 752,755,288 (1,777 666,560) (62,641,500) 210,054,898 (1,382,121,052) “The accompanying notes tothe consolidate financial statements noles form an integral part these conscliétad faneial statements 6PT TH INDO PLANTATIONS AND ITS SUBSIDIARY CONSOLIDATED STATEMENT OF CASH FLOWS (continued) For the Year Ended December 31, 2016 {Expressed in thousands of Rupiah, unless otherwise stated) Notes CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from bank loans Proceeds from consumer finance liabilities 19 Repayments of bank loans, net Decrease of loan from a related party (Decrease)jincrease in due to related parties Proceeds of loan from a third party 20 Increase of bank guarantee Finance costs paid 31 Net cash (used in)/provided by financing activities NET INCREASE/(DECREASE) IN CASH ON HAND AND IN BANKS, CASH ON HAND AND IN BANKS. AT BEGINNING OF YEAR CASH ON HAND AND IN BANKS. AT END OF YEAR 5 2016 313,995,640 3,535,075 (963,957,054) 896,173,338 (120,584,330) 131,713,108 (1,000,000) (736,080,109) (476, 2) 31,595,659 98,470,192 2018 1,403,791,286 (984,794,080) 252,583,998 99,541,108 (750,142,691) 10,979,619 (217,361,834) 275,832,026 ‘The accompanying notes tothe coneolidated financial slatamorts nots frm an integral part of these consolidated ancia! statements, 6