Brought To You by Global Reports

00
Brought to you by Global Reports

Independent Auditors’ Report
Report No. 33396S
The Shareholders and Board of Directors

PT Indocement Tunggal Prakarsa Tbk.
We have audited the consolidated balance sheets of PT Indocement Tunggal Prakarsa

Tbk. and Subsidiaries as of December 31, 1999 and 1998, and the related consolidated
statements of income, changes in shareholders’ equity and cash flows for the years then
ended. These consolidated financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on these financial statements
based on our audits. We did not audit the consolidated financial statements of
PT Indotek Engico as of December 31, 1999, and of PT Wisma Nusantara
International and PT Indominco Mandiri as of December 31, 1999 and 1998. The
investments in these associated companies, which are accounted for in the consolidated
financial statements using the equity method, represent approximately 1.66% and
1.58% of the total consolidated assets as of December 31, 1999 and 1998, respectively,
while the related net equity share in net earnings of these associated companies
amounted to Rp 17,351,784,547 and Rp 25,706,221,841 in 1999 and 1998, respectively.
We conducted our audits in accordance with auditing standards established by the

36 Indonesian Institute of Accountants. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the financial position of PT Indocement Tunggal Prakarsa Tbk.
and Subsidiaries as of December 31, 1999 and 1998, and the results of their operations
and their cash flows for the years then ended in conformity with generally accepted
accounting principles.
As discussed in Notes 2d, 2p and 3 to the consolidated financial statements,

starting January 1, 1999, the Company and a certain subsidiary retroactively adopted the
provisions of the new Statements of Financial Accounting Standards (PSAK) No. 46,
"Accounting for Income Tax", and No. 50, "Accounting for Investments in Certain
Securities". In accordance with generally accepted accounting principles, the consolidated
financial statements as of and for the year ended December 31, 1998 have been restated to
reflect the retroactive effects of the said changes in accounting principles.
The accompanying consolidated financial statements have been prepared assuming that
the Company and its Subsidiaries will continue to operate as a going concern. Note 21
to the consolidated financial statements includes a summary of the effects that the
economic downturn in Indonesia has had on the Company and its Subsidiaries, as well
as the measures that they have implemented and plan to implement in response to
these economic events. As also mentioned in the same note, currently, the Indonesian

economy is still faced with lingering instability. Although in 1999 (particularly towards
the second semester of that year), there are already some positive indicators of
improving economic condition in Indonesia, at least on the macro level. Among others,
inflation level has already been brought down to a manageable level; economic
activities have improved and are increasing; interest rate has already been reduced to its
pre-crisis level; and the Rupiah has partially recovered vis-à-vis the US Dollar.
However, the Company and its Subsidiaries, as well as the cement industry as a whole,
is still affected by the current slump in the construction and real estate sectors.
The accompanying consolidated financial statements as of December 31, 1999 and
1998 include the effects of these economic events to the extent that they can be
determined and estimated. As further discussed in Note 13 to the consolidated
financial statements, the Company and a certain Subsidiary were not able to maintain
certain financial ratios required under their existing loan agreements and have taken a
standstill position and ceased all of their loan principal and interest payments.
No formal waiver for such non-compliance have been obtained from the creditors.
As of the date of this independent auditors’report, the Company and the said
Subsidiary are in the process of negotiating the terms and conditions of their
borrowings with the creditors and no definite terms have been established regarding
the settlement of these obligations. As such, all of the subject long-term loans were
reclassified and presented as part of current liabilities in the consolidated balance sheets
in accordance with generally accepted accounting principles. As a result of the matters
described, there is a significant uncertainty whether the Company and its Subsidiaries 37
will be able to continue as a going concern, and therefore, whether they will be able to
realize their assets and extinguish their liabilities in the normal course of business and
at the amounts stated in the consolidated financial statements. Resolution of the
current economic instability and/or further improvement of the economy depends on
the fiscal, monetary and other measures that have been and will be undertaken by the
government, actions which are beyond the Company and its Subsidiaries’ control, to
achieve economic recovery. It is not possible to determine the future effects that a
continuation of the current economic conditions may have on the Company’s and its
Subsidiaries’ liquidity and earnings, including the effects flowing through from their
investors, customers, suppliers, creditors and shareholders.
PRASETIO, UTOMO & CO.

License No. 98.2.0024
Drs. Adi Pranoto Leman

License No. 98.1.0060
February 18, 2000
Notice to Readers
The accompanying consolidated financial statements are intended to present the financial
position, results of operations and cash flows in accordance with accounting principles and
practices generally accepted in Indonesia and not with those of any other jurisdictions. The
standards, procedures and practices applied to audit such consolidated financial statements
are those generally accepted and applied in Indonesia.

PT Indocement Tunggal Prakarsa Tbk. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
December 31, 1999 and 1998
These consolidated financial statements are originally issued in Indonesian language
ASSETS
Notes 1999 1998
(As Restated - Note 3)
Rp Rp
CURRENT ASSETS
Cash and cash equivalent 2c,2f,4,6 869,980,602,924 84,094,783,367

Short-term investment - net 2d,3,20a 154,150,698,000 175,908,382,354
Accounts receivable 2e
Trade (net of allowance for doubtful
accounts of Rp 74,348,679,217 and
Rp 3,079,529,790 in 1999 and 1998) 5,22
Related parties 2f,6 9,317,028,371 141,978,725,677
Third parties 124,181,669,989 42,255,434,088
Non-trade (net of allowance for doubtful
accounts of Rp 2,186,202,250 in 1999)
Related parties 2f,6 49,505,290,147 75,853,415,396
Third parties 23,427,174,743 50,650,992,911
Inventories - net 2g,7 464,543,639,527 454,882,547,932
Advances and deposits 6 78,270,680,867 96,517,924,973
Prepaid taxes and expenses 2h,7 170,753,958,660 179,141,229,166
38 Total Current Assets 1,944,130,743,228 1,301,283,435,864
DEFERRED TAX ASSETS - Net 2p,3,12 299,436,181,916 530,258,684,381
LONG-TERM INVESTMENTS AND

ADVANCES TO INVESTEES 2b,6,8,21 319,560,811,775 268,870,648,337
PROPERTY, PLANT AND EQUIPMENT 2i,2j,2k,6,9,10,13

Carrying value 20e,20f 8,517,114,371,139 8,564,820,246,499
Accumulated depreciation, amortization and depletion (1,417,718,997,613) (1,269,158,209,492)
Net Book Value 7,099,395,373,526 7,295,662,037,007
OTHER ASSETS
Deferred charges - net 2l 48,347,246,201 55,790,091,352
Restricted cash in bank 20h 42,705,718,858 46,780,924,728
Deferred landright acquisition costs 2l 8,352,947,195 -
Goodwill - net 2b 6,073,638,342 7,995,569,303
Others - net 83,096,450,928 134,034,603,300
Total Other Assets 188,576,001,524 244,601,188,683
TOTAL ASSETS 16 9,851,099,111,969 9,640,675,994,272
See accompanying Notes to Consolidated Financial Statements which are an integral part of the consolidated financial statements.

CONSOLIDATED BALANCE SHEETS
December 31, 1999 and 1998 (continued)
LIABILITIES AND STOCKHOLDERS’ EQUITY

Notes 1999 1998
Rp Rp
CURRENT LIABILITIES
Short-term loan 2f,2o,6,10 5,000,000,000 5,000,000,000
Accounts payable
Trade 11
Related parties 2f,6 3,127,286,806 769,512,562
Third parties 55,995,517,042 82,493,283,008
Non-trade
Related parties 2f,6 88,149,036 14,044,523
Third parties 20d,20e 517,025,406,777 363,989,023,931
Accrued expenses 6,13,20h 778,464,751,735 323,741,270,605
Taxes payable 2p,12 28,644,039,734 21,223,381,035
Unearned income 2,573,103,988 3,054,490,661
Current maturities of long-term debts 2f,2o,6,13,21
Bank loans 6,960,950,213,937 7,767,528,251,205
Obligation under capital lease 2j 3,091,006,580 3,091,006,580
Other 6,248,000,000 –
Total Current Liabilities 8,361,207,475,635 8,570,904,264,110

39
LONG-TERM DEBTS - Net of Current Maturities 2f,2o,6,13,21
Other 9,372,000,000 –
DEFERRED GAIN ON SALE AND LEASEBACK

TRANSACTIONS - Net 2j 15,430,714,703 26,071,800,388
MINORITY INTERESTS IN NET ASSETS OF SUBSIDIARIES 339,472,374,531 378,353,120,157
SHAREHOLDERS' EQUITY
Capital stock - Rp 500 par value
Authorized - 4,000,000,000 shares
Issued - 2,414,453,320 shares 14 1,207,226,660,000 1,207,226,660,000
Additional paid-in capital 15 172,329,476,497 172,329,476,497
Foreign currency translation ajustments 2b 477,577,930,779 567,135,322,704
Differences arising from changes in subsidiary's equity 2b 19,310,551,854 (13,579,469,792)
Differences arising from restructuring transactions
among entities under common control 2b (1,496,514,575,077) (1,496,514,575,077)
Unrealized gains (losses) on available-for-sale securities 2d,3,21 (1,891,104,470) 4,595,125,960
Retained earnings
Appropriated 50,000,000,000 50,000,000,000
Unappropriated 697,577,607,517 174,154,269,325
Total Shareholders' Equity 1,125,616,547,100 665,346,809,617
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 9,851,099,111,969 9,640,675,994,272

CONSOLIDATED STATEMENTS OF INCOME
For the years ended December 31, 1999 and 1998
Notes 1999 1998

Rp Rp
NET REVENUES 2m,6,16,21 1,758,966,257,437 1,589,882,081,427
COST OF REVENUES 2m,16,17 1,123,912,968,562 973,973,559,716
GROSS PROFIT 635,053,288,875 615,908,521,711
OPERATING EXPENSES 2m,18

Delivery and selling 168,674,488,360 89,439,738,803
General and administratiive 95,437,416,124 89,502,084,266
Total Operating Expenses 264,111,904,484 178,941,823,069
INCOME FROM OPERATIONS 16 370,941,384,391 436,966,698,642
OTHER INCOME (CHARGES)

Foreign exchange gains (losses) - net 2k,2o,9,21 527,041,902,235 (1,082,100,373,287)
Interest income 4 73,570,981,447 46,491,961,168
40 Equity share in net earnings of investees - net 2b,8 15,781,029,118 31,798,016,552
Interest expense 2k,9,21 (254,538,347,386) (383,251,921,349)
Swap costs 2o,20h - (151,433,215,818)
Others - net 2b,2d,2i,
2j,2l,3 23,988,831,736 19,338,101,897
Other Income (Charges) - Net 385,844,397,150 (1,519,157,430,837)
INCOME (LOSS) BEFORE PROVISION

FOR INCOME TAX 756,785,781,541 (1,082,190,732,195)

CONSOLIDATED STATEMENTS OF INCOME
For the years ended December 31, 1999 and 1998 (continued)
Notes 1999 1998

Rp Rp
PROVISION FOR INCOME TAX 2p,3,12
Current 482,713,590 770,197,715
Deferred 229,802,762,832 (443,093,479,070)
Net Provision for Income Tax 230,285,476,422 (442,323,281,355)
INCOME (LOSS) BEFORE MINORITY

INTERESTS IN NET LOSSES (INCOME) OF SUBSIDIARIES 526,500,305,119 (639,867,450,840)
MINORITY INTERESTS IN NET LOSSES (INCOME) OF SUBSIDIARIES (3,076,966,927) 5,734,289,815
NET INCOME (LOSS) 523,423,338,192 (634,133,161,025)
NET INCOME (LOSS) PER SHARE 2q 216.79 (262.64)
41

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
Additional Foreign Currency Differences Arising

Paid-in Translation from Changes in
Notes Capital Stock Capital Adjustments Subsidiary's Equity
Rp Rp Rp Rp
Balance, January 1, 1998

(as previously reported) 1,207,226,660,000 172,329,476,497 264,320,063,030 –
Retroactive effects of changes
in accounting principles 2b,2d,2p,3 – – 3,032,294,269 (11,207,585,633)
Balance, January 1, 1998 (as restated) 1,207,226,660,000 172,329,476,497 267,352,357,299 (11,207,585,633)
As previously reported
Net loss – – – – –
Foreign currency translation adjustments 2b – – 298,250,718,218 –
Retroactive effects of changes in
accounting principles 2b,2d,2p,3 – – 1,532,247,187 (2,371,884,159)
As restated 2b,2d,2p,3 – – 299,782,965,405 (2,371,884,159)
Balance, December 31, 1998 (as restated) 1,207,226,660,000 172,329,476,497 567,135,322,704 (13,579,469,792)
Net income – – – –
Appreciation in market value of investments
42 in marketable securities 2d – – –
Realized gains on marketable securities 2d – – – –
Changes in Subsidiary's equity arising from the
decline in market value of its investments in
marketable securities 2b,2d – – – 32,890,021,646
Foreign currency translation adjustments (89,557,391,925) –
Balance, December 31, 1999 1,207,226,660,000 172,329,476,497 477,577,930,779 19,310,551,854

Differences Arising from
Restructuring Transactions Unrealized Gains (Losses)
Among Entities Under on Available-for-Sale Retained earnings
Common Control Securities Appropriated Unappropriated Total
Rp Rp Rp Rp Rp
(1,496,514,575,077) – 50,000,000,000 696,837,242,258 894,198,866,708
– (25,722,928,500) – 111,450,188,092 77,551,968,228

(1,496,514,575,077) (25,722,928,500) 50,000,000,000 808,287,430,350 971,750,834,936
– – – (1,052,750,649,261) (1,052,750,649,261)
– – – – 298,250,718,218
– 30,318,054,460 – 418,617,488,236 448,095,905,724
– 30,318,054,460 – (634,133,161,025) (306,404,025,319)
(1,496,514,575,077) 4,595,125,960 50,000,000,000 174,154,269,325 665,346,809,617

– – – 523,423,338,192 523,423,338,192
– 12,701,568,615 – – 12,701,568,615 43
– (19,187,799,045) – – (19,187,799,045)
– – – – (32,890,021,646)
– – – – (89,557,391,925)
(1,496,514,575,077) (1,891,104,470) 50,000,000,000 697,577,607,517 1,125,616,547,100

CONSOLIDATED STATEMENTS OF CASH FLOWS
1999 1998
(As Restated - Note 3
Rp Rp
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) 523,423,338,192 (634,133,161,025)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation, amortization and depletion 152,983,409,108 153,387,589,799
Minority interests in net income (losses) of Subsidiaries 3,076,966,927 (5,734,289,815)
Unrealized losses (gains) on foreign exchange (451,592,187,823) 1,337,232,363,818
Equity share in net earnings of investees - net (15,781,029,118) (31,798,016,552)
Dividend income from investments in shares of
stock accounted at cost method (6,485,000) (4,410,838,560)
Other non-cash items - net (26,510,429,503) 106,469,187,164
Changes in operating assets and liabilities:
Accounts receivable – net 123,279,466,722 24,743,525,569
Inventories - net (12,583,890,024) (207,121,270,770)
Advances and deposits 17,250,120,566 74,482,082,288
Prepaid taxes and expenses (2,266,486,374) (90,019,161,799)
Deferred tax assets - net 229,802,762,832 (443,093,479,070)
Other assets (14,480,763,582) (12,977,228,845)
44 Accounts payable 136,196,387,657 216,442,507,248
Accrued expenses 247,075,686,323 75,792,560,806
Taxes payable 13,191,839,223 5,581,468,040
Unearned income (557,498,227) (877,463,049)
Net Cash Provided by Operating Activities 922,501,207,899 563,966,375,247
CASH FLOWS FROM INVESTING ACTIVITIES

Proceeds from sales of short-term investments 67,349,274,615 10,455,228,176
Dividend income from investments in shares of stock
accounted for under the equity method 13,785,000,000 14,565,000,000
Proceeds from disposals of property and equipment 769,630,932 460,312,595
Dividend income from investments in shares of stock
accounted at cost method 6,485,000 4,410,838,560
Additions to long-term investments in shares of
stock and advances to investees (32,591,562,364) (15,681,429,091)
Additions to property, plant and equipment (189,147,761,067) (1,783,328,632,820)
Additions to short-term investments – (7,498,756,929)
Other investment activities – net 18,147,564,831 –
Net Cash Used in Investing Activities (121,681,368,053) (1,776,617,439,509)

CONSOLIDATED STATEMENTS OF CASH FLOWS
1999 1998
Rp Rp
CASH FLOWS FROM FINANCING ACTIVITIES
Payments of long-term debts (5,444,000,000) -
Net increase in long-term debts – 1,239,498,482,735
Net decrease in short-term loans – (463,129,866,451)
Net Cash Provided by (Used in) Financing Activities (5,444,000,000) 776,368,616,284
NET EFFECT OF CHANGES IN EXCHANGE

RATES ON CASH AND CASH EQUIVALENT (9,490,020,289) 30,818,471,225
NET INCREASE (DECREASE) IN CASH AND

CASH EQUIVALENT 785,885,819,557 (405,463,976,753)
CASH AND CASH EQUIVALENT AT

BEGINNING OF YEAR 84,094,783,367 489,558,760,120
CASH AND CASH EQUIVALENT AT

END OF YEAR 869,980,602,924 84,094,783,367
45
Supplemental cash flow information
Cash paid during the year for:
Income taxes 7,087,592,313 48,241,131,880
Interest – 478,343,431,236
Activities not affecting cash flows

Financing costs capitalized to construction
in progress 170,742,026,626 215,799,107,848
Acquisition of receivables through the
incurrence of long-term debts 20,415,000,000 –

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. General
PT Indocement Tunggal Prakarsa Tbk. (the Company) was incorporated in Indonesia on January 16, 1985 and its deed of
incorporation was approved by the Ministry of Justice on May 17, 1985. The Company’s articles of association has been amended
from time to time, the latest of which was covered by notarial deed No. 42 of Amrul Partomuan Pohan, S.H., dated August 21,
1997. The amendments made are primarily intended to align the Company’s articles of association with the new Corporate Law
No. 1, Year 1995. Such amendments were approved by the Ministry of Justice in its decision letters No. C2-
11.426.HT.01.04.TH.97 and No. C2-HT.01.04.A.23746 both dated November 4, 1997, and were published in State Gazette of the
Republic of Indonesia No. 24, Supplement No. 1689 dated March 24, 1998.
The Company started its commercial operations in 1985.
As stated in Article 3 of the Company’s article of association, the scope of its activities comprises of, among others, manufacture of
cement and building materials, food and beverages, textile, construction and trading.
The Company is domiciled in Jakarta, while its factories are located in Citeureup and Cirebon, West Java. The Company and its
Subsidiaries (the "Group") were a multibusiness group divided into Cement Business, as the Group core business, and Other Business.
The Cement Business mainly includes the operations of the eight integrated cement plants at its Citeureup – Bogor site, two
integrated cement plants at its Palimanan – Cirebon site with a combined annual capacity of 10.9 million tons, consisting of 10.7
million tons of portland cement and 0.2 million tons of specialty (white and oil well) cements, and its ready mix concrete
46 manufacturing subsidiary.
Other Business includes, among others, the operations of the Company-owned property, Wisma Indosemen, a 23 storey office
tower building with over 19,000 square meters of rentable space and two basement car parks and PT Wisma Nusantara
International, an equitized subsidiary which owns and operates a 30 storey office building with 26,108 square meters of rentable
space and President Hotel, a four star hotel with 315 rooms. The above mentioned buildings are located in Jakarta’s central
commercial district.
As of December 31, 1999, the members of the Company’s boards of commissioners and directors are as follows:
Commissioner Director
Soedono Salim - President Commissioner Sudwikatmono - President Director

Sutanto Djuhar - Commissioner Anthony Salim - Vice President Director
Johny Djuhar - Commissioner Ibrahim Risjad - Director
Kuntara - Commissioner Tedy Djuhar - Director
Andree Halim - Commissioner Iwa Kartiwa - Director
Tanto Koeswanto - Commissioner Soepardjo - Director
I Ketut Mardjana - Commissioner Daddy Hariadi - Director
Franciscus Welirang - Director
Benny S. Santoso - Director
As of December 31 1999, the Company and its subsidaries have a total of 7,096 permanent employees (unaudited).

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
2. Summary of Significant Accounting Policies
a. Basis of Consolidated Financial Statements

The consolidated financial statements have been prepared on the historical cost basis of accounting, except for inventories which are
valued at the lower of cost or net realizable value (market), certain short-term investments which are stated at market value, certain
investments in shares of stock which are accounted for under the equity method, and certain property, plant and equipment which
are stated at revalued amounts.
The consolidated statements of cash flows present cash receipts and payments classified into operating, investing and financing
activities, using the indirect method.
b. Principles of Consolidation
The consolidated financial statements include the accounts of the Company and the following Subsidiaries, in which the Company
owns, either directly or indirectly, more than 50% equity ownership:
Effective
Percentage of Ownership
Country
Principal Activity of Domicile 1999 1998
% %
Direct Subsidiaries
Indocement (Cayman Island) Limited Investment Cayman Island 100.00 100.00 47
Leamaat Omikron BV Financing Netherlands 100.00 100.00
PT Indomix Perkasa (Indomix) Ready mixed concrete Indonesia 99.99 99.99
PT Indocement Investama (Investama) Investment Indonesia 93.03 93.03
PT Dian Abadi Perkasa Cement distributor Indonesia 51.00 –
Indirect Subsidiary (through Investama)

PT Indo Kodeco Cement (IKC) Cement Indonesia 72.09 71.43
PT Dian Abadi Perkasa was established in 1999 and primarily acts as the Company’s main domestic distributor of bagged cement
(see Note 6).

The integrated cement plant of IKC has an installed capacity of 2.45 million tons of portland cement per annum. As of December 31,
1999, IKC is already in its trial production stage.
Since 1997, IKC changed its functional currency for recording and reporting purposes from Rupiah to US Dollar currency. The
management of IKC believes that such change is appropriate since its transactions are primarily US Dollar denominated.
For consolidation purposes, the accounts of foreign Subsidiaries and IKC are translated into Rupiah amounts on the following basis:
Balance sheet accounts - Middle rates of exchange as of balance sheet date (US$ 1 to Rp 7,100 and Rp 8,025
as of December 31 1999 and 1998, respectively; and NLG 1 to Rp 3,243.56 and
Rp 4,239.64 as of December 31, 1999 and 1998, respectively).
Profit and loss accounts - Average rates of exchange during the year (US$ 1 to Rp 7,929.60 and Rp 9,926.18
for the years ended December 31, 1999 and 1998, respectively; and NLG 1 to
Rp 3,911.08 and Rp 4,974.99 for the years ended December 31, 1999 and 1998, respectively).
The statements of cash flows of foreign Subsidiaries and IKC are translated using average exchange rates during the year. The
resulting net difference arising from the translations of balance sheet and profit and loss accounts is presented as "Foreign Currency
Translation Adjustments" under the Shareholders’ Equity section of the consolidated balance sheets.
The difference of the purchase price over the underlying fair value of the net assets of the acquired subsidiaries is booked as
48 "Goodwill" and amortized using the straight-line method over twenty (20) years, in view of the good future business prospect of the
investees.
All significant intercompany accounts and transactions have been eliminated.
Investments in which the Company or its Subsidiaries have ownership interests of at least 20% but not exceeding 50% are
accounted for under the equity method, whereby the costs of such investments are increased or decreased by the Company’s or
Subsidiaries’ equity shares in the net earnings (losses) of the investees since date of acquisition, and are reduced by dividends
received by the Company or Subsidiaries from the investees. The equity shares in net earnings (losses) of the investees are being
adjusted for the straight-line amortization, over a twenty-year period (in view of the good future business propects of the investees),
of the difference between the cost of such investments and the Company’s or Subsidiaries’ proportionate shares in the underlying
fair value of the net assets of investees at date of acquisition (goodwill).
All other investments are carried at cost (cost method).
In compliance with Statement of Financial Accounting Standards (PSAK) No. 38, "Accounting for Restructuring Transactions
Among Entities under Common Control", the differences between the costs / proceeds of net assets acquired / disposed in
connection with restructuring transactions among entities under common control compared to their net book values are recorded
and presented as "Differences Arising from Restructuring Transactions Among Entities under Common Control" under the
Shareholders’ Equity section of the consolidated balance sheets.
In compliance with PSAK No. 40, "Accounting for Changes in Subsidiary’s / Investee’s Equity", the difference between the carrying
amount of the Company’s investment in, and the value of the underlying net assets of the subsidiary / investee due to changes in the
latter’s equity which are not resulting from transactions between the Company and the related subsidiary / investee is recorded and
presented as "Differences Arising from Changes in Subsidiary’s Equity" under the shareholders’ equity section of the consolidated
balance sheets.
c. Cash Equivalents
Time deposits and other short-term investments with maturities of three months or less at the time of placement or purchase and
not pledged as collateral for loans are considered as "Cash Equivalents".

d. Short-Term Investments
Investments in equity securities listed in the stock exchanges, bonds and other investments with maturities of more than three
months but not exceeding one year are classified as "Short-term Investments".
The bonds, which are held-to-maturity, are stated at cost adjusted for amortization of premiums or accretion of discounts to
maturity.
Prior to 1999, investments in equity securities held available-for-sale were stated at the lower of aggregate cost or market value
determined at balance sheet date. Any unrealized loss on decline in market value was charged to current operations.
In accordance with PSAK No. 50, "Accounting for Investments in Certain Securities", starting January 1, 1999, equity securities
held available-for-sale are stated at market value. Any unrealized gains or losses on appreciation/decline in market value of the
equity securities are recorded and presented as "Unrealized Gains (Losses) on Available-for-Sale Securities" under the Shareholders’
Equity section of the consolidated balance sheets, which are credited or charged to operations upon realization. Accordingly, the
consolidated financial statements as of and for the year ended December 31, 1998 have been restated to reflect the retroactive effects
of the application of above mentioned PSAK (see Note 3).
e. Allowance for Doubtful Accounts

The Company and Subsidiaries provide allowance for doubtful accounts based on a review of the status of the individual receivable
accounts at the end of year.
f. Transactions with Related Parties 49

The Company and Subsidiaries have transactions with related parties. Related party relationship is defined under PSAK No. 7,
"Related Party Disclosures", as follows:
(1) enterprises that, through one or more intermediaries, control, or are controlled by, or are under common control
with, the reporting enterprise (including holding companies, subsidiaries and fellow subsidiaries);
(2) associated enterprises;
(3) individuals owning, directly or indirectly, an interest in the voting power of the reporting enterprise that gives them
significant influence over the enterprise, and close members of the family of any such individuals (close members of a
family are defined as those members who are able to exercise influence or can be influenced by such individuals, in
conjunction with their transactions with the reporting enterprise);
(4) key management personnel, that is, those persons having authority and responsibility for planning, directing and
controlling the activities of the reporting enterprise, including commissioners, directors and managers of the enterprise
and close members of the families of such individuals; and
(5) enterprises in which a substantial interest in the voting power is owned, directly or indirectly, by any person
described in (3) or (4), or over which such a person is able to exercise significant influence. This definition includes
enterprises owned by the commissioners, directors or major shareholders of the reporting enterprise and enterprises that
have a member of key management in common with the reporting enterprise.
All significant transactions with related parties, whether or not performed under normal prices and conditions similar to those with
non-related parties, are disclosed herein.

g. Inventories
Inventories are stated at the lower of cost or market value. Cost is determined using the average method. The Company and its
Subsidiaries provide allowance for inventory obsolescence based on a periodic review of the physical condition of the inventories.
h. Prepaid Expenses
Prepaid expenses are amortized over the periods benefited. Prepaid expenses which benefits extend beyond one year are presented
under "Other Non-current Assets" in the consolidated balance sheets.
i. Property, Plant and Equipment

Property, plant and equipment are stated at cost, except for certain assets revalued in accordance with government regulations, less
accumulated depreciation, amortization and depletion. Main machinery and equipment related to the production of cement are
depreciated using the unit-of-production method while all the other property, plant and equipment items are depreciated using the
straight-line method based on their estimated useful lives as follows:
Years
Land improvements; quarry; buildings and structures 8 – 30

Machinery and equipment 3 – 10
Leasehold improvements; furniture, fixtures and office
equipment; and tools and other equipment 2– 5
Transportation equipment 5– 8
50 Land are stated at cost and not depreciated (see item l).
Construction in progress is stated at cost. The accumulated costs will be reclassified to the appropriate property, plant and
equipment accounts when the construction is substantially completed and the asset is ready for its intended use.
The cost of maintenance and repairs is charged to operations as incurred; significant renewals and betterments as defined under
PSAK No. 16, "Property, Plant and Equipment", are capitalized. When assets are retired or otherwise disposed of, their carrying
values and the related accumulated depreciation, amortization or depletion are removed from the accounts and the resulting gains or
losses are credited or charged to current operations.
j. Leases
Lease transactions are accounted for under the capital lease method when the required capitalization criteria under PSAK No. 30,
"Accounting for Leases" are met. Otherwise, lease transactions are accounted for under the operating lease method. Assets under
capital lease (presented under "Property, Plant and Equipment" account in the consolidated balance sheets) are recorded based on
the present value of the lease payments at the beginning of the lease term plus residual value (option price) to be paid at the end of
the lease period. Depreciation of leased assets is computed based on methods and estimated useful lives that are in line with those of
the similar property, plant and equipment acquired under direct ownership.
Gain on sale-and-leaseback transactions is deferred and amortized using the same basis and methods as referred to above.

k. Capitalization of Borrowing Costs and Foreign Exchange Losses

In accordance with the revised PSAK No. 26, "Borrowing Costs", interest charges, foreign exchange differences on borrowings and
other costs incurred to finance the constructions or installations of the property, plant and equipment are capitalized. Capitalization
of these borrowing costs ceases when the construction or installation is substantially completed and the asset is ready for its intended use.
l. Deferred Charges
Expenditures which benefits extend over one year are deferred and amortized over the periods benefited using the straight-line method.
In accordance with PSAK No. 47, "Accounting for Land", starting January 1, 1999, costs incurred in connection with the
acquisitions/renewal of landrights, such as legal fees, land remeasurement fees, notarial fees, taxes and other expenses, are deferred
and amortized using the straight-line method over the legal term of the related landrights. The net book value of such costs are
presented as "Deferred Landright Acquisition Costs" in the consolidated balance sheets.
m. Revenue and Expense Recognition

Revenues are recognized as earned when the products are delivered and/or when services are rendered to customers. Cost and
expenses are generally recognized and charged to operations when these are incurred (accrual basis).
n. Retirement Benefits
The Company has a defined contribution retirement plan covering substantially all of its full time employees. Contributions
are funded and consist of the Company’s and the employees’ contributions computed at 10% and 5%, respectively, of the
employees’ pensionable earnings.
51
On the other hand, the Subsidiaries still operate the "pay-as-you-go" retirement benefits scheme. Retirement benefits are accrued
and/or charged to operations.
o. Foreign Currency Transactions and Balances

Transactions involving foreign currencies are recorded in Rupiah amounts at the middle rates of exchange prevailing at transaction
date. At balance sheet date, monetary assets and liabilities denominated in foreign currencies are adjusted to reflect the rates of
exchange prevailing at the last banking transaction date of the year, as published by Bank Indonesia, and any resulting gains or losses
are credited or charged to current operations, except for those capitalized under PSAK No. 26 (see item k).
For December 31, 1999 and 1998, the rates of exchange used, are as follows:
1999 1998
Rp Rp
US Dollar (US$1) 7,100.00 8,025.00
Japanese Yen (¥ 100) 6,947.41 7,000.49
Deutsche Mark (DEM 1) 3,654.68 4,776.93
Denmark Kroner (DKK 1) 958.89 1,254.69
Italian Lira (ITL 100) 369.15 482.45
Transactions in other foreign currencies are considered insignificant.

Swap agreements and forward exchange contracts were principally used by the Company and a certain subsidiary in the management
of their interest and foreign exchange rates exposures. Gains and losses arising from the difference between the contracted forward
rate and the prevailing (spot) rate at the inception of the contract were deferred and amortized over the period of the hedge using
the straight-line method. At balance sheet date, the related notional assets and liabilities denominated in foreign currencies
(presented under "Forward Exchange Contracts Receivable - Net" account) were adjusted to reflect the rates of exchange prevailing
at such date, and any resulting gains or losses were credited or charged to operations of the current year. Amounts to be paid or
received under the cross currency swap agreements were recognized as income or expense in the periods in which they accrue.
Hedging costs were recognized as expense when these are incurred.
p. Provision for Income Tax

Prior to 1999, the Company and Subsidiaries applied the taxes payable method in computing their provision for income tax. Under
this method, provision for income tax was computed on the basis of estimated taxable income for the year.
Starting January 1, 1999, the Company and a Subsidiary applied PSAK No. 46, "Accounting for Income Taxes", which requires for
the accounting of tax effects of the recovery of assets and settlement of liabilities at their carrying amounts, and the recognition and
measurement of deferred tax assets and tax liabilities for the expected future tax consequences of events recognized in the financial
statements, including tax loss carryforwards. The consolidated financial statements for the year ended December 31, 1998 have been
restated to reflect the retroactive effects of the application of this PSAK (see Note 3).
q. Net Income (Loss) per Share

Net income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares outstanding during
52 the period (2,414,453,320 shares).
3. Changes in Accounting Principles
As explained in Notes 2d and 2p, effective January 1, 1999, the Company and certain Subsidiaries retroactively applied PSAK No. 46,
"Accounting for Income Taxes", and PSAK No. 50, "Accounting for Investments in Certain Securities". Accordingly, the consolidated
financial statements as of and for the year ended December 31, 1998 were restated to reflect the retroactive effects of these
accounting changes.
A summary of consolidated financial statements as of and for the year ended December 31, 1998, before and after restatement, are
as follows:
Effects of Changes in
Accounting Principles
Add (Deduct)
As Previously Reported PSAK No. 46 PSAK No. 50 As Restated

Rp Rp Rp Rp
Total Assets 9,107,872,695,731 530,258,684,381 2,544,614,160 9,640,675,994,272
Total Liabilities 8,570,904,264,110 – – 8,570,904,264,110
Retained Earnings (Deficit)
- Unappropriated (355,913,407,003) 518,538,718,336 11,528,957,992 174,154,269,325
Total Shareholders’ Equity 139,698,935,665 523,103,259,792 2,544,614,160 665,346,809,617
Net Loss (1,052,750,649,261) 439,495,044,377 (20,877,556,141) (634,133,161,025)

The net effect of the non-adoption of PSAK No. 46 by certain Subsidiaries and investees is considered immaterial to the
consolidated financial statements.
4. Cash and Cash Equivalent
The details of cash and cash equivalent are as follows:
1999 1998
Rp Rp
Cash on hand 365,755,812 328,411,295
Cash in banks
Related Parties (see Note 6)
Rupiah accounts 81,112,537,081 49,655,124,659
US Dollar accounts (US$ 3,217,856 in 1999
and US$ 804,478 in 1998) 22,846,774,848 6,455,935,950
Third Parties
Rupiah accounts 34,661,615,643 6,775,896,444
US Dollar accounts (US$ 3,043,233 in 1999
and US$ 878,493 in 1998) 21,606,953,302 7,049,906,325
Other foreign currencies 326,408,052 309,461,954
53
Cash equivalent
Time deposits
Rupiah accounts 52,740,399,046 2,852,046,740
Third Parties
Rupiah accounts 653,966,353,500 10,668,000,000
US Dollar accounts (US$ 300,000
in 1999) 2,130,000,000 –
Other foreign currencies 223,805,640 –
Total 869,980,602,924 84,094,783,367
Interest rates per annum range from 9% to 48% in 1999 and 23% to 67.5% in 1998 for the Rupiah time deposits, and from 5.5%
to 13% in 1999 for the US Dollar time deposits.

5. Accounts Receivable – Trade
The details of trade receivables are as follows:
1999 1998
Rp Rp
Cement Business
PT Semen Tiga Roda Prasetya (STRP) 69,868,180,772 125,900,985,392
PT Pioneer Beton Industri 4,600,663,997 10,629,687,818
Indocement Singapore Pte. Ltd., 3,327,125,604 936,648,147
PT Indosahid Perdana – 3,402,495,883
Others (each below Rp 1.0 billion) 489,128,972 340,071,595
Sub-total 78,285,099,345 141,209,888,835

Other Businesses 900,109,798 768,836,842
Total 79,185,209,143 141,978,725,677

Less allowance for doubtful accounts
(see Note 6a) (69,868,180,772) –
54 Net 9,317,028,371 141,978,725,677
Third Parties
Cement Business 128,012,763,732 44,878,792,406
Other Businesses 649,404,702 456,171,472
Total 128,662,168,434 45,334,963,878

Less allowance for doubtful accounts (4,480,498,445) (3,079,529,790)
Net 124,181,669,989 42,255,434,088
An analysis of the changes in the balance of allowance for doubtful accounts follows:
1999 1998
Rp Rp
Balance at beginning of year 3,079,529,790 786,260,900
Provisions during the year 72,667,719,267 6,072,055,343
Receivables written-off during the year (1,398,569,840) (3,778,786,453)
Balance at end of year 74,348,679,217 3,079,529,790
Based on the review of the status of the individual receivable accounts at the end of the year, management is of the opinion
that the above allowance for doubtful accounts is sufficient to cover any possible losses from uncollectible accounts.

6. Transactions and Accounts with Related Parties
In the normal course of their business, the Company and its Subsidiaries engage in transactions and have contracts/agreements with
related parties. The significant transactions, contracts/agreements and related account balances with related parties are as follows:
a. The Company sells a substantial portion of its product to related parties. Net revenues derived from sales to related
parties accounted for 19.59% and 78.68% of the consolidated net revenues for the years ended December 31, 1999
and 1998, respectively, with details as follows:
1999 1998
Rp Rp
PT Semen Tiga Roda Prasetya (STRP) 163,837,900,056 1,010,908,376,803
PT Indosahid Perdana 114,098,112,706 202,136,897,436
Indocement Singapore Pte. Ltd. 58,778,415,915 29,148,863,273
PT Pioneer Beton Industri 7,716,864,795 8,217,683,288
PT Indo Clean Set Cement 138,374,040 534,484,559
Total 344,569,667,512 1,250,946,305,359
The related trade receivables arising from the above-mentioned sales transactions are shown as part of "Accounts
Receivable – Trade" in the consolidated balance sheets (see Note 5).
55
In mid 1999, STRP ceased to become the Company’s main distributor.
On April 26, 1999, PT Dian Abadi Perkasa (DAP), a subsidiary, entered into a distributorship agreement with
Company whereby DAP acts as the Company’s main distributor of bagged cement for domestic market, replacing STRP.
b. The Company and Subsidiaries have loans and time deposits placements, and also entered into forward exchange
contracts with PT Bank Central Asia (BCA). The Company and Subsidiaries also maintain current accounts with BCA
and PT Bank Risjad Salim Internasional (see Notes 4, 13 and 20h).
Until mid-December 1999, BCA is still considered as a related party.
c. The Company insures a major portion of its assets with PT Asuransi Central Asia (see Note 9).
d. The Company has lease transactions with PT Swadharma Indotama Finance (see Note 13).
e. The loan obtained by the Company from Marubeni Corporation is guaranteed by PT Mekar Perkasa (see Note 13).
f. The Company extended non-interest bearing advances to certain affiliated companies with no fixed repayment dates.
These advances are presented under "Accounts Receivable – Non trade (Related Parties)" account in the consolidated
balance sheets.

g. In 1999, the Company purchased non-interest bearing convertible bonds issued by PT Cibinong Center Industrial Estate, an
investee, amounting to Rp 40,064,000,000, which have no fixed maturity date. As of December 31, 1999, the carrying value of
this investment in bonds is presented as part of "Long-term Investments and Advances to Investees" account in the
consolidated balance sheets (see Note 8).
h. IKC entered into a mining agreement with PT Pama Indo Kodeco (PIK) whereby PIK agreed to develop and operate
a limestone, clay and laterite mine, and to supply the limestone, clay and laterite requirements of IKC for the operations
of its plant. As compensation, IKC pays PIK service fees based on its tonnage consumption of limestone, clay and
laterite. Service fees incurred amounted to US$ 2,339,200 and US$ 562,996 for the years ended December 31, 1999 and
1998, respectively. A portion of the said service fees incurred was capitalized to "Construction in Progress" since the raw
materials were used for trial production runs. The total outstanding payables as of December 31, 1999 and 1998 arising
from these transactions amounted to US$ 396,061 and US$ 245,313, respectively, and is shown under "Accrued
Expenses" in the consolidated balance sheets.
i. IKC entered into an agreement with PT Indotek Engico whereby the latter agreed to provide and undertake the
construction of a 20 km long pipeline at Tarjun, South Kalimantan, Indonesia. IKC has accepted the tender for the
execution of such works in the sum of US$ 3,770,000 (net of witholding tax). As of December 31, 1999 and 1998, the
total project related expenditure amounted to US$ 3,843,091 which is recorded as part of "Construction in Progress".
The balances of accounts with related parties arising from non-trade transactions are as follows:
1999 1998
56 Rp Rp
Accounts receivable
PT Semen Tiga Roda Prasetya (see Note 13c) 17,972,651,983 –
PT Mekar Perkasa 8,706,250,000 7,706,250,000
PT Indofood Sukses Makmur Tbk 5,733,207,115 5,815,777,049
PT Indolampung Perkasa 3,600,000,000 2,200,000,000
PT Mandara Medika Utama 3,285,500,000 5,000,000,000
Joint Operations Indomix-Indosipa 3,279,631,039 63,277,609
Employees 3,277,714,535 6,255,205,100
PT Indomulti Intisukses Industri 2,485,314,080 2,186,202,250
PT Polymax International 2,008,082,488 10,572,082,488
PT Gula Putih Mataram 1,000,000,000 2,200,000,000
PT Besland Pertiwi – 31,500,000,000
PT Sweet Indolampung – 2,200,000,000
Total 51,691,492,397 75,853,415,396
Less allowance for doubtful accounts (2,186,202,250) –
Net 49,505,290,147 75,853,415,396
Accounts payable
Various (each below Rp 1.0 billion) 88,149,036 14,044,523

An analysis of the changes in the balance of allowance for doubtful accounts follows:
1999 1998
Rp Rp
Balance at beginning of year – 6,571,600,000
Provisions during the year 2,186,202,250 –
Paid during the year – (6,571,600,000)
Balance at end of year 2,186,202,250 –
7. Inventories
Inventories consist of:

1999 1998
Rp Rp
Finished goods 43,007,533,804 27,224,094,215
Work in process 58,470,959,562 50,879,134,602
Raw materials 19,548,482,557 27,530,149,563
Fuel and lubricants 78,672,114,846 68,574,220,857
Spare parts 267,620,968,711 282,353,772,245
Materials in-transit and others 8,645,104,930 8,323,788,695 57
Total 475,965,164,410 464,885,160,177
Less allowance for inventory obsolescence (11,421,524,883) (10,002,612,245)
Net 464,543,639,527 454,882,547,932
Inventories are insured against fire and other risks based on a certain policy package (see Note 9). The inventories in the
Company‘s Plant-9 are used as collateral to the loans it obtained from PT Bank Mandiri (see Notes 10 and 13).
Finished goods and work in process inventories of IKC valued at Rp 3,268,211,650 and Rp 2,074,563,484 as of December 31,
1999, and Rp 3,114,729,608 and Rp 6,129,859,415 as of December 31, 1998, respectively, represent the outputs from its trial
production runs.

8. Long-Term Investments and Advances to Investees
This account consists of long-term investments and advances to certain investees. The details of this account are follows:
Accumulated
Equity in Net
Percentage Earnings Carrying
1999 of Ownership Cost (Losses) - Net Value
% Rp Rp Rp
Investments in Shares of Stock
PT Pioneer Beton Industri 50.00 18,445,157,441 (952,250,261) 17,492,907,180
PT Indotek Engico 50.00 500,000,000 7,866,895,250 8,366,895,250
Stillwater Shipping Corporation 50.00 105,500,000 5,006,514,598 5,112,014,598
PT Cibinong Center Industrial Estate 50.00 60,000,000 (60,000,000) –
PT Indominco Mandiri 35.00 38,493,328,526 (38,493,328,526) –
PT Wisma Nusantara International 33.98 93,750,000,000 61,286,484,062 155,036,484,062
PT Citra Marga Nusaphala Persada Tbk. 8.80 66,023,100,000 – 66,023,100,000
Other investees various 4,978,351,641 (464,787,500) 4,513,564,141
Sub-total 222,355,437,608 34,189,527,623 256,544,965,231
58 Advances
PT Pioneer Beton Industri 9,153,653,435
PT Indo Clean Set Cement 8,043,453,021
PT Cibinong Center Industrial Estate 3,036,102,940
PT Indotek Engico 81,137,148
Stillwater Shipping Corporation 2,637,500,000
Sub-total 22,951,846,544
Convertible Bonds (see Note 6)

Total 319,560,811,775

Accumulated
Equity in Net
Percentage Earnings Carrying
1998 of Ownership Cost (Losses) - Net Value
% Rp Rp Rp
Investments in Shares of Stock
PT Pioneer Beton Industri 50.00 18,445,157,441 856,750,000 19,301,907,441
PT Indotek Engico 50.00 500,000,000 7,127,463,239 7,627,463,239
Stillwater Shipping Corporation 50.00 105,500,000 4,768,269,766 4,873,769,766
PT Cibinong Center Industrial Estate 50.00 60,000,000 (60,000,000) –
PT Indominco Mandiri 35.00 38,493,328,526 (38,493,328,526) –
PT Wisma Nusantara International 33.98 93,750,000,000 58,459,131,526 152,209,131,526
PT Citra Marga Nusaphala Persada Tbk. 8.80 66,023,100,000 – 66,023,100,000
Other investees various 4,783,233,080 (464,787,500) 4,318,445,580
Sub-total 222,160,319,047 32,193,498,505 254,353,817,552
Advances
PT Indo Clean Set Cement 7,831,713,860
PT Indotek Engico 247,159,305
Stillwater Shipping Corporation 2,637,500,000 59
Sub-total 14,516,830,785
Total 268,870,648,337

The principal activities of the above investees are as follows:
Investee Country of Domicile Principal Business Activity

PT Pioneer Beton Industri Indonesia Production of ready mixed concrete
PT Indotek Engico Indonesia Construction engineering consultancy
Stillwater Shipping Corporation Liberia Shipping
PT Cibinong Center Industrial Estate Indonesia Development of industrial estates
PT Indominco Mandiri Indonesia Coal mining
PT Wisma Nusantara International Indonesia Hotel operations and office space
rental
PT Citra Marga Nusaphala Persada Tbk. Indonesia Operations of toll highway
PT Indo Clean Set Cement Indonesia Production of special cement
The details of equity in net earnings (losses) of investees, net of goodwill amortization, for the years ended December 31, 1999
and 1998 are as follows:
1999 1998
Rp Rp
PT Wisma Nusantara International 16,612,352,536 35,834,015,591
PT Indotek Engico 739,432,011 3,463,712,927
Stillwater Shipping Corporation 238,244,832 1,771,331,784
60 PT Pioneer Beton Industri (1,809,000,261) 856,750,000
PT Indominco Mandiri – (10,127,793,750)
Total 15,781,029,118 31,798,016,552
In 1999 and 1998, the Company received dividend income from PT Wisma Nusantara International amounting to
Rp 13,785,000,000 and Rp 14,565,000,000, respectively.
9. Property, Plant and Equipment
Property, plant and equipment consist of:

Additions/ Disposals/
1999 Beginning Balance Reclassifications Reclassifications Ending Balance
Rp Rp Rp Rp
Carrying Value
Land and land improvements 160,140,000,401 40,726,692,057 – 200,866,692,458
Leasehold improvements 1,962,180,836 (57,731,586) – 1,904,449,250
Quarry 45,250,525,922 10,582,555,325 – 55,833,081,247
Buildings and structures 718,989,389,603 5,553,016,813 1,196,471 724,541,209,945
Machinery and equipment 2,006,685,886,124 88,472,877,659 1,446,929,277 2,093,711,834,506
Transportation equipment 218,456,180,944 2,305,216,124 2,695,515,826 218,065,881,242
Furniture, fixtures and office
equipment 75,100,039,443 5,188,871,848 274,762,539 80,014,148,752
Tools and other equipment 25,966,362,778 3,195,114,759 244,162,499 28,917,315,038
Buildings under capital lease 42,019,726,200 – – 42,019,726,200
Construction in progress 5,270,249,954,248 (119,576,137,254) 79,433,784,493 5,071,240,032,501
Total 8,564,820,246,499 36,390,475,745 84,096,351,105 8,517,114,371,139

1999 Beginning Balance Reclassifications Reclassifications Ending Balance
Rp Rp Rp Rp
Accumulated Depreciation, Amortization
and Depletion
Land improvements 11,944,897,316 1,084,451,638 – 13,029,348,954
Leasehold improvements 1,690,942,975 93,127,315 – 1,784,070,290
Quarry 5,903,028,234 922,566,126 315,419 6,825,278,941
Buildings and structures 205,398,172,927 25,129,252,931 – 230,527,425,858
Machinery and equipment 811,106,575,593 76,860,764,879 – 887,967,340,472
Furniture, fixtures and office equipment 53,389,095,475 8,755,123,901 155,768,235 61,988,451,141
Buildings under capital lease 16,565,506,455 11,884,097,751 – 28,449,604,206
Total 1,269,158,209,492 151,170,127,104 2,609,338,983 1,417,718,997,613
Net Book Value 7,295,662,037,007 7,099,395,373,526
1998 Beginning Balance Reclassifications Reclassifications Ending Balance 61
Rp Rp Rp Rp
Carrying Value
Land and land improvements 140,336,139,107 19,803,861,294 – 160,140,000,401
Leasehold improvements 2,164,423,750 596,182,080 798,424,994 1,962,180,836
Quarry 25,653,193,322 19,597,332,600 – 45,250,525,922
Machinery and equipment 1,920,218,261,041 87,105,048,519 637,423,436 2,006,685,886,124
Buildings under capital lease 44,888,535,467 – 2,868,809,267 42,019,726,200
Construction in progress 2,642,487,705,587 2,717,323,680,154 89,561,431,493 5,270,249,954,248
Total 5,761,818,624,372 2,906,776,336,811 103,774,714,684 8,564,820,246,499
Accumulated Depreciation, Amortization

and Depletion
Land improvements 10,850,106,997 1,094,790,319 – 11,944,897,316
Leasehold improvements 1,668,946,930 478,032,548 456,036,503 1,690,942,975
Quarry 5,061,322,431 841,705,803 – 5,903,028,234
Machinery and equipment 727,013,979,883 84,273,488,990 180,893,280 811,106,575,593
Buildings under capital lease 15,425,781,300 2,402,631,627 1,262,906,472 16,565,506,455
Total 1,120,580,341,334 158,394,397,523 9,816,529,365 1,269,158,209,492
Net Book Value 4,641,238,283,038 7,295,662,037,007

Foreign currency translation adjustments amounting to (Rp 451,633,977,056) and Rp 968,745,915,892 as of December 31, 1999 and
1998, respectively, which mainly arise from the translation of IKC’s US Dollar financial statements into Rupiah, are presented as
part of "Additions/Reclassifications" in the above analysis of property, plant and equipment account.
Construction in progress consists of:

1999 1998
Rp Rp
Land under development 626,370,117 626,370,117

Buildings under construction 662,602,996,770 1,570,480,608,455
Machinery under installation 4,388,270,518,714 3,104,217,325,236
Others 19,740,146,900 594,925,650,440
Total 5,071,240,032,501 5,270,249,954,248
A significant portion of the above construction in progress represents the accumulated costs of IKC’s cement plant and related
facilities and infrastructure under construction (see Note 20f). As of December 31, 1999, the full completion and/or final
commissioning of the said cement plant is still on hold due to certain major technical problems noted during the cement plant’s trial
production runs. IKC is currently negotiating with its project suppliers and main contractors for the resolution of such problems.
62 The other major portion of the construction progress pertains to the accumulated costs of the Company’s cement plant (Plant 11) in
Citeureup (see Note 20e). This project has been fully completed and subsequently closed/reclassified to the appropriate property,
plant and equipment accounts in 2000.
Property, plant and equipment are used as collateral to secure short-term loans and long-term debts (see Notes 10 and 13).
Depreciation, amortization and depletion charges totalled to Rp 152,983,409,108 and Rp 153,387,589,799 for years ended
December 31, 1999 and 1998, respectively.
The Company and Subsidiaries insure their property, plant and equipment and inventories against losses by fire and other insurable
risks under several policies with insurance coverage totalling Rp 153,628,446,530 and US$ 1,615,153,770 as of December 31, 1999.
In management’s opinion, the said amount of insurance coverage is adequate to cover any possible losses that may arise from the
insured risks. About 71% of the aforesaid insurance coverage are insured with PT Asuransi Central Asia, a related party (see Note 6).
Financing costs capitalized to construction in progress amounted to Rp 170,742,026,626 and Rp 215,799,107,848 for years ended
December 31, 1999 and 1998, respectively. The total cumulative amount of financing costs capitalized to construction in progress as
of December 31, 1999 amounted to Rp 510,648,337,050.
The Company and Subsidiaries owned HGB (Hak Guna Bangunan) and HP (Hak Pakai) covering approximately 7,343 hectares of
land at several locations in Indonesia, with legal terms ranging from 8 to 30 years. Management is of the opinion that these titles of
landright ownership can be extended upon their expiration.
As of December 31, 1999, the title of ownership on the Company‘s land located at Citeureup, West Java, with a carrying value of
Rp 47,544,024,587 and covering approximately 1,349 hectares, is still in process. Total costs incurred in connection with the
processing of the said title of ownership amounted to Rp 8,352,947,195 and is presented as "Deferred Landrights Acquisition
Costs" in the consolidated balance sheets.

10. Short-Term Loans

Short-term loan represents working capital loan from PT Bank Mandiri (formerly under the name of PT Bank Pembangunan
Indonesia), which bears interest at annual rates of 34% in 1999 and ranging from 22% to 34% in 1998. This loan is collateralized
by inventories, and property, plant, and equipment (see Notes 7 and 9).
11. Accounts Payable – Trade
This account consists of the following:

1999 1998
Rp Rp
Cement Business
PT Pama Indo Kodeco 2,812,033,100 –
Total 3,127,286,806 769,512,562
Third Parties
Cement Business 55,995,517,042 82,493,283,008
Trade payables mostly arise from purchases of raw materials and other supporting materials. The main suppliers of the Company 63
are as follows:
Supplier Product
Topniche Gypsum
Anker Far East Coal
Veitscher Magnesitwerke V.C.M.H.H Firebricks
Refratechnik GmbH Firebricks
Didier Werke Firebricks
PT Fajar Mas Murni Paper Bag
Pertambangan Minyak dan Gas Negara Fuel
PT Sumberkencana Ekspressindo Iron Sand, Silica Sand and Pyrate Cynder
Magotteaux Co. Ltd Steel Ball

12. Taxes Payable
Taxes payable consists of:

1999 1998
Rp Rp
Income taxes
Article 21 4,780,675,417 2,389,958,752
Article 22 434,759,780 30,775,236
Article 23 4,293,302,826 601,513,084
Article 26 15,752,983,357 17,847,500,991
Corporate income tax 201,522,383 153,101,880
Value added tax 3,180,795,971 200,531,092
Total 28,644,039,734 21,223,381,035
A reconciliation between income (loss) before provision for income tax, as shown in the consolidated statements of income,
and estimated taxable income (fiscal loss) for the years ended December 31, 1999 and 1998 is as follows:
1999 1998
(As Restated–Note 3)
64 Rp Rp
Income (loss) before provision for income tax
per consolidated statements of income 756,785,781,541 (1,082,190,732,195)
Add (deduct):
Loss (income) of Subsidiaries before
provision for income tax - net (18,154,155,994) 8,586,434,868
Net income of Other Businesses already
subjected to final tax (18,107,917,617) (23,986,035,022)
Income (loss) before provision for income tax
attributable to the Company 720,523,707,930 (1,097,590,332,349)
Add (deduct) :
Timing differences (mainly consist of allowance
for doubtful accounts in 1999 and foreign
exchange losses in 1998) 81,600,051,899 (355,058,786,253)
Non-deductible expenses (mainly consist of
employees’ benefits, donations and
public relations expenses) 19,872,883,090 62,347,984,673
Equity in net earnings of investees (17,351,784,547) (39,297,728,518)
Income already subjected to final tax (60,775,323,141) (28,934,507,348)
Dividends (6,485,000) (4,410,838,560)
Gains on disposals of investments in equity
securities already subjected to final tax (19,351,209,045) (2,534,628,176)
Estimated taxable income (fiscal loss) of the
Company - current year 724,511,841,186 (1,465,478,836,531)
Tax loss carry forward from prior years (2,459,706,693,774) (1,014,236,628,538)
Tax corrections – 20,008,771,295
Total tax loss carry forward - end of year (1,735,194,852,588) (2,459,706,693,774)

Under existing tax regulations, the prescription period for tax loss carry forward is five years from the date the tax loss occurred.
The computation of the provision for income tax is as follows:
1999 1998
(As Restated–Note 3)
Rp Rp
Total tax loss carry forward (1,735,194,852,588) (2,459,706,693,774)
Provision for income tax - current

Company – –
Subsidiaries 482,713,590 770,197,715
Total provision for income tax - current 482,713,590 770,197,715
Provision for income tax - deferred

Company
Previous years’ fiscal losses compensated with
current year’s estimated taxable income 217,353,552,356 –
Depreciation of fixed assets (1,410,074,904) 3,060,792,243
Sale and leaseback transactions (326,359,060) 227,196,647 65
Fiscal losses – (433,641,019,572)
Allowances for doubtful accounts and
inventory obsolescence – (1,816,238,635)
Sub-total 215,617,118,392 (432,169,269,317)
Subsidiary 14,185,644,440 (10,924,209,753)
Total provision for income tax - deferred 229,802,762,832 (443,093,479,070)
Provision for Income Tax per

Consolidated Statements of Income
Current 482,713,590 770,197,715
Deferred 229,802,762,832 (443,093,479,070)
Net 230,285,476,422 (442,323,281,355)

The calculation of estimated corporate income tax payable (claims for tax refund) is as follows:
1999 1998
Rp Rp
Provision for Income Tax - current
Company – –
Subsidiaries 482,713,590 770,197,715
Total 482,713,590 770,197,715
Prepayments of Income Tax

Company 101,607,082,064 94,404,082,331
Subsidiaries 461,499,967 807,460,645
Total 102,068,582,031 95,211,542,976
Estimated Claims for Tax Refund

Company 101,607,082,064 94,404,082,331
Subsidiaries 180,308,760 190,364,810
Total 101,787,390,824 94,594,447,141

66
Estimated Corporate Income Tax Payable
Subsidiary 201,522,383 153,101,880
The above estimated claims for tax refund is presented under "Prepaid Taxes and Expenses" account in the consolidated
balance sheets.
The amount of estimated taxable income for 1999 that will be reported by the Company in its 1999 tax return will be based on
the related amount as shown above.
The Company’s estimated fiscal loss for 1998, as stated above, conforms with the related amount reported in the income tax returns
submitted to Tax Office.
In 1998, the Tax Office approved to refund a substantial portion of the Company’s 1997 claims for tax refund amounting to
Rp 88,693,535,771. In addition, the Company has also received several witholding tax assessments for 1997 and for the first six
months of 1998, which require the Company to pay additional tax and penalty totalling Rp 12,097,798,062. Out of the said total
amount of assessment , Rp 10,717,374,690 is contested by the Company. As of the independent auditors’ report date, the Tax Office
has not yet responded on the said tax protest filed by the Company.
The above-mentioned approved tax refund is paid in cash and received by the Company in 1999 in the amount of
Rp 33,381,140,741 (after offsetting the Company’s additional tax and penalty mentioned above and the Company’s outstanding
income tax payable Article 25 and penalty for fiscal year 1998).
In January 2000, the Tax Office approved to refund the Company’s 1998 claims for tax refund amounting to Rp 83,591,401,846.
During 1999 and the period from January 1, 2000 up to the independent auditors’ report date, the Company has also received
several witholding tax assessments for the second semester of 1998, whereby according to the Tax Office, the Company has to pay
additional tax and penalty totalling Rp 6,967,452,371. Out of the said total amount of assessment, Rp 5,698,564,853 will be
contested by the Company.

Furthermore, the Company’s corporate income tax for 1998 and 1997 had been examined by Tax Office. On February 3, 1999, the
Company contested the results of the Tax Office’s income tax examination for fiscal year 1997 amounting to Rp 318.5 billion. Up to
auditors’ report date, the Tax Office has not yet given any response on the said tax protest filed by the Company.
The deferred tax effects of the significant timing differences between commercial and fiscal reporting are as follows:
1999 1998
Rp Rp
Deferred Tax Assets
Company
Fiscal loss carried forward 520,558,455,778 737,912,008,132
Allowances for doubtful accounts and
inventory obsolescence 1,245,115,062 1,245,115,062
Sub-total 521,803,570,840 739,157,123,194
Subsidiary 7,242,319,500 22,514,233,800
Total 529,045,890,340 761,671,356,994
Deferred Tax Liabilities

Company
Property, plant and equipment 228,736,159,052 230,146,233,955
Sales and leaseback transactions 148,446,252 474,805,310 67
Sub-total 228,884,605,304 230,621,039,265
Subsidiary 725,103,120 791,633,348
Total 229,609,708,424 231,412,672,613
Deferred Tax Assets - Net 299,436,181,916 530,258,684,381
Management is of the opinion that the above deferred tax assets can be fully recovered through future taxable income.

13. Long-Term Debts
a. Bank Loans
Bank loans consist of the following:
1999 1998
Rp Rp
Rupiah:
PT Bank Central Asia (BCA) 95,241,057,709 95,241,057,709
PT Bank Mandiri (formerly under the name of
PT Bank Pembangunan Indonesia) 40,430,345,466 40,430,345,466
PT Bank Mitsubishi Buana (BMB) 20,000,000,000 20,000,000,000
Foreign currencies:
Syndicated offshore loan 2,175,440,000,000 2,458,860,000,000
The Export – Import Bank of Japan
(Japan Exim Bank) 931,788,767,459 938,937,606,242
Marubeni General Leasing Corporation (MGLC) 738,036,125,000 834,188,718,750
The Chase Manhattan Bank, New York (CMB) 710,000,000,000 802,500,000,000
Bank of America NT and SA,Taipei (BOA) 710,000,000,000 802,500,000,000
The Chase Manhattan South
East Ltd., Singapore (CMSE) 303,880,000,000 343,470,000,000
68 Fuji Bank Limited, Singapore (Fuji) 284,000,000,000 321,000,000,000
Yasuda Trust and Banking Co.,Ltd.,
Singapore (Yasuda) 248,500,000,000 280,875,000,000
Chase Investment Bank Limited (CIBL) 193,733,373,508 253,194,273,464
Bank of Tokyo - Mitsubishi Ltd.,
Singapore (BOTM) 177,500,000,000 200,625,000,000
The Tokai Bank Ltd., Singapore (Tokai) 177,500,000,000 200,625,000,000
Marubeni Corporation (Marubeni) 90,799,188,795 102,628,660,574
Export Finance and Insurance Corporation (EFIC) 64,101,356,000 72,452,589,000
Total 6,960,950,213,937 7,767,528,251,205
Less portions currently due

Rupiah 155,671,403,175 155,671,403,175
Foreign currencies 6,805,278,810,762 7,611,856,848,030
Total 6,960,950,213,937 7,767,528,251,205
Long-term portion – –

The balances of the above foreign currency denominated loans in their original currencies are as follows:
1999 1998
Syndicated offshore loan US$ 306,400,000 US$ 306,400,000
Japan Exim Bank ¥ 13,412,455,503 ¥ 13,412,455,503
MGLC US$ 103,948,750 US$ 103,948,750
CMB US$ 100,000,000 US$ 100,000,000
BOA US$ 100,000,000 US$ 100,000,000
CMSE US$ 42,800,000 US$ 42,800,000
Fuji US$ 40,000,000 US$ 40,000,000
Yasuda US$ 35,000,000 US$ 35,000,000
CIBL ITL 52,480,935,530 ITL 52,480,935,530
BOTM US$ 25,000,000 US$ 25,000,000
Tokai US$ 25,000,000 US$ 25,000,000
Marubeni US$ 12,788,618 US$ 12,788,618
EFIC US$ 9,028,360 US$ 9,028,360
The above indebtedness bear interest at the following annual rates:
1999 1998
Rupiah 17.87% to 41.00% 17.87% to 34.00%
US Dollar 4.93% to 10.48% 6.16% to 11.11% 69
Italian Lira 7.35% 7.35%
Japanese Yen 2.3% 2.3%
The loans from MGLC and Marubeni are used to finance the construction of the Company’s cement plant facility (Plant 10).
The Company obtained a loan facility from the Japan Exim Bank with maximum credit limit amounting to ¥ 14,984,029,840.
This facility is used to finance about 85% of the total cost of imported machinery and equipment relating to the construction of the
Company’s cement plant facility (Plant 11), as discussed in Note 20e.
IKC obtained US$ 345,000,000 syndicated offshore loan facilities arranged by Banque Nationale de Paris, The Fuji Bank Limited,
Korea Exchange Bank, and The Mitsubishi Bank Limited, which also act as the security agent, facility agent, insurance agent, and
technical agent, respectively. The said credit facilities are divided into four (4) tranches (A, B, C, and D) with the following terms:
• Tranches A and B amounting to US$ 117,240,000 and US$ 78,160,000, respectively, which will be repaid in fifteen
(15) semi-annual installments of US$ 7,816,000 and US$ 5,211,000, respectively, starting from January 20, 1999
until January 20, 2006.
• Tranches C and D amounting to US$ 72,477,194 and US$ 38,522,806, respectively. These tranches will be repaid
in fifteen (15) semi-annual installments; the first two of such installments being an aggregate of US$ 5,000,000 each prorated
between the two tranches, and the remaining thirteen (13) installments being an aggregate of US$ 7,769,231each prorated
between the two tranches.
These loan facilities, which bear interest at LIBOR (London Inter-bank Offered Rate) plus bank’s margin, shall only be used
specifically to finance the project construction costs, equipment and start-up costs, import duties and initial working capital of IKC.
The loans obtained by the Company from Fuji, CMB, BOA, Yasuda and BOTM also represent syndicated loans from various
financial institutions.

All the other loans, as enumerated below, are mostly obtained to finance the general fund requirements of the Company.
Name of Banks Security Date of Maturity

PT Bank Mandiri Plant 1, 2 and 9; and inventories December 25, 2000
of Plant 9
BCA (Rp 27.5 billion) Plant 1 – 5 March 25, 2001
BCA (+/- Rp 67.7 billion) Plant 1 – 5 December 12, 1998
BMB Negative pledge March 12, 2001
Fuji Negative pledge July 20, 1998
Syndicated off-shore loan Property, plant and equipment January 20, 2006
of IKC
Japan Exim Bank Plant 11 June 26, 2007
MGLC Plant 10 July 1, 2005
CMB Negative pledge May 19, 2002
BOA Negative pledge May 19, 2002
CMSE Negative pledge October 6, 2002
Yasuda Negative pledge September 12, 2001
CIBL Property, plant and equipment March 31, 2002
BOTM Negative pledge July 1, 2005
Tokai Negative pledge September 25, 2001
Marubeni Plant 10, corporate guarantee by July 1, 1999
70 PT Mekar Perkasa
EFIC Property, plant and equipment October 15, 2006
Certain loan agreements contain terms and conditions requiring the Company and the concerned Subsidiaries to obtain prior
written consent from the lenders with respect to changes in the Company’s and the concerned Subsidiaries’ legal status, the
composition of their board of directors and their capital structure; and incurrence of significant capital expenditures in excess of
certain specified amounts. In addition, the following financial ratios are required to be maintained:
– Ratio of consolidated total liabilities to consolidated tangible net worth should not be more than 3 : 1
– Ratio of consolidated total current assets to consolidated current liabilities should be at least 0.8 : 1
– Interest coverage ratio should be at least 2 : 1
– Consolidated tangible net worth will not at any time be less than Rp 1,500,000,000,000
As a result of the extraordinary Rupiah depreciation discussed in Note 21, as of December 31, 1999 and 1998, some of the above
required financial ratios are not maintained. Starting July 1998, the Company and Subsidiaries have taken a standstill position and
ceased all of their loan principal and interest payments. Up to the independent auditors’ report date, no formal waivers for such
non-compliance have been obtained from the creditors. As provided for in the covering loan agreements, such non-compliance with
the loan covenants render all of the subject loans immediately due and payable, and therefore, were reclassed and presented in the
consolidated balance sheets as part of current liabilities as of December 31, 1999 and 1998 in accordance with generally accepted
accounting principles.
Unpaid interest expenses amounted to Rp 734,496,182,746 and Rp 285,302,983,375 as of December 31, 1999 and 1998,
respectively, which are presented as part of "Accrued Expenses" in the consolidated balance sheets.
The Company and a Steering Committee representing the creditors are currently in the process of negotiating for the debt
restructuring (see Note 21).
b. Obligation Under Capital Lease

The Company has lease commitments covering certain buildings expiring in 1999. Obligation under capital lease are collateralized
by the related assets.

c. Others
On October 1, 1999, DAP entered into a "Transfer and Assignment of Contract Agreement" with CMB, whereby CMB agreed to
irrevocably sell, transfer, assign, grant and convey to DAP, without recourse, all of CMB’s rights on its loan receivables from STRP
for a total consideration of US$ 3.0 million, which shall be settled through an initial payment of US$ 800,000 and five (5) equal
semi-annual installments for the remaining balance. The agreement further provides that any collections made by DAP from the
aforesaid loan receivables transferred in excess of US$ 3.0 million shall be shared by DAP and CMB on a 50:50 basis. As of
December 31,1999, the balance of the long-term payable to CMB in connection with the said transaction amounted to US$ 2.2
million, which is scheduled to be paid as follows:
Year Installment Amount

2000 US $ 880,000
2001 880,000
2002 440,000
Total US $ 2,200,000
14. Capital Stock
The details of share ownership list based on share registrar are as follows:
Number of Shares 71
Issued and Percentage of
1999 Shareholder Fully Paid Ownership Amount
% Rp
PT Mekar Perkasa 1,390,955,104 57.60 695,481,552,000
Government of the Republic of
Indonesia 621,128,380 25.73 310,564,190,000
PT Kaolin Indah Utama 106,600,820 4.42 53,300,410,000
Public and cooperatives 295,769,016 12.25 147,880,508,000
Total 2,414,453,320 100.00 1,207,226,660,000
Number of Shares
Issued and Percentage of
1998 Shareholder Fully Paid Ownership Amount
% Rp
PT Mekar Perkasa 1,396,298,604 57.83 698,149,302,000
Government of the Republic of
Indonesia 621,128,380 25.73 310,564,190,000
PT Kaolin Indah Utama 106,600,820 4.42 53,300,410,000
Public and cooperatives 290,425,516 12.02 145,212,758,000
Total 2,414,453,320 100.00% 1,207,226,660,000
The Company’s shares are listed in Jakarta and Surabaya Stock Exchanges.
15. Additional Paid-In Capital
This account represents the excess of the amounts received or the carrying value of converted debentures and bonds over the par
value of the shares issued.

16. Segment Information
The information concerning the Company and Subsidiaries’ business segments are as follows:
1999 1998
Rp Rp
Net Revenues
Cement Business
Cement
Domestic 2,729,204,462,612 1,316,989,255,181
Export 248,828,519,000 258,420,184,000
Ready mixed concrete 15,952,659,714 17,792,672,106
Other Businesses 28,406,803,033 30,241,062,829
Total 3,022,392,444,359 1,623,443,174,116
Eliminations (1,263,426,186,922) (33,561,092,689)
Net 1,758,966,257,437 1,589,882,081,427
Cost of Revenues
72 Cement Business
Cement 2,343,590,378,847 962,817,608,029
Total 2,370,879,936,100 990,740,172,104
Eliminations (1,246,966,967,538) (16,766,612,388)
Net 1,123,912,968,562 973,973,559,716
Income (loss) from Operations

Cement Business
Cement 361,883,068,943 421,742,907,400
Ready mixed concrete (3,902,913,380) (1,541,997,601)
Total 371,067,574,750 436,966,698,642
Eliminations (126,190,359) –
Net 370,941,384,391 436,966,698,642
Identifiable Assets
Cement Business
Cement 10,296,527,918,509 9,977,392,988,358
Other Businesses 1,524,285,702,154 1,703,835,363,179
Total 11,946,522,573,144 11,808,969,244,316
Eliminations (2,095,423,461,175) (2,168,293,250,044)
Net 9,851,099,111,969 9,640,675,994,272

17. Cost of Revenues
The details of cost of revenues are as follows:

1999 1998
Rp Rp
Raw materials used 161,816,967,609 155,782,186,471
Direct labor 81,093,083,433 68,673,895,241
Fuel and power 476,042,573,134 436,472,385,052
Manufacturing overhead 258,772,061,935 202,056,584,416
Total Manufacturing Cost 977,724,686,111 862,985,051,180
Work in Process Inventory

At beginning of year 44,749,275,187 24,881,253,667
At end of year (56,396,396,078) (44,749,275,187)
Cost of Goods Manufactured 966,077,565,220 843,117,029,660
Finished Goods Inventory

At beginning of year 24,109,364,607 18,553,278,351
Others 5,481,334,742 (2,792,789,137)
At end of year (39,739,322,154) (24,109,364,607) 73
Cost of Goods Sold before Packing Cost 955,928,942,415 834,768,154,267
Packing Cost 156,352,976,549 128,566,348,888
Total Cost of Goods Sold 1,112,281,918,964 963,334,503,155
Cost of Services
Direct cost 9,382,298,829 8,698,904,367
Indirect cost 2,248,750,769 1,940,152,194
Total Cost of Services 11,631,049,598 10,639,056,561
Total Cost of Revenues 1,123,912,968,562 973,973,559,716

18. Operating Expenses
The details of operating expenses are as follows:
1999 1998
Rp Rp
Delivery and Selling Expenses
Provision for doubtful accounts 72,667,719,267 6,072,055,343
Delivery, loading and transportation 66,202,129,810 63,209,367,313
Salaries, wages and employees’ benefits 9,446,881,326 3,440,651,271
Repairs and maintenance 2,682,129,329 1,375,843,246
Depreciation 2,626,123,425 4,314,004,715
Advertising and promotions 2,594,932,323 1,795,958,575
Rental 2,207,554,335 1,191,916,117
Professional fees 1,911,502,570 576,402,863
Association and membership dues 1,613,757,882 2,358,376,701
Electricity and water 1,101,507,215 1,046,653,581
Miscellaneous (each below Rp 1.0 billion) 5,620,250,878 4,058,509,078
Total Delivery and Selling Expenses 168,674,488,360 89,439,738,803
74 General and Administrative Expenses

Salaries, wages and employees’ benefits 38,790,408,301 47,131,154,886
Professional fees 17,552,393,802 7,461,252,819
Public relations 9,857,389,162 3,939,506,483
Depreciation 6,297,187,150 7,606,800,868
Rental 3,701,405,146 4,741,857,779
Communication 2,590,842,869 3,616,131,936
Repairs and maintenance 1,937,802,536 1,312,257,150
Travelling and transportation 1,706,391,858 2,063,672,757
Advertising and promotions 1,704,006,488 1,452,147,638
Donations 1,185,460,213 976,697,132
Medical 1,400,784,601 1,487,113,673
Documentation 355,772,943 1,501,634,155
Miscellaneous (each below Rp 1.0 billion) 8,357,571,055 6,211,856,990
Total General and Administrative Expenses 95,437,416,124 89,502,084,266
Total Operating Expenses 264,111,904,484 178,941,823,069
19. Retirement Benefits
The Company has a defined contributory retirement plan covering substantially all of its full-time employees. Retirement
benefits charged to operations amounted to approximately Rp 5.2 billion and Rp 4.9 billion for the years ended December 31,
1999 and 1998, respectively.
The plan’s assets are administered by Dana Pensiun Karyawan Indocement Tunggal Prakarsa, the establishment of which was
approved by the Ministry of Finance on November 12, 1991, as amended by decree No. Kep-332/KM.17/1994 dated
December 1, 1994.

20. Significant Agreements
a. The Company has acquired Medium-Term Notes issued by PT Bank Tabungan Negara (Persero) amounting to
Rp 50 billion. The bonds, which bear interest at semi-annual rate of 1% above IRSOR (Indonesian Rupiah Swap
Offered Rate), will mature on August 2, 2000.
b. On March 20, 1998, the Company had a memorandum of understanding with PT Indonesia Air Transport to
form a charter hire airplane joint operations. In connection with this, total advances made by the
Company amounted to US$ 2,943,750 (equivalent to Rp 16,488,225,000) as of December 31, 1999 and 1998 for a
50% ownership of the airplane. These advances are shown as part of "Other Assets - Others – Net" in the
consolidated balance sheets.
c. On May 16, 1998, IKC entered into a sale and purchase agreement called "Senakin and Satui Coal Supply
Contract" with PT Arutmin Indonesia (AI) whereby IKC agreed to purchase, and AI agreed to supply, 70,000 tons
of Senakin coal and 38,500 tons of Satui coal at prices stated in the agreement. Total purchases made under this
contract totalled to US$ 517,676 and US$ 1,765,399 for the years ended December 31, 1999 and 1998, respectively.
d. IKC has an agreement with ABB Power Generation Services Pty Ltd., (ABB) whereby the latter agreed to provide
IKC with the technical documentation, station operational strategies and policies, and ancillary services.
As compensation, IKC pays ABB technical information fee determined based on certain agreed computation. Technical
information fees incurred amounted to US$ 1,410,383 and US$ 3,349,473 for the years ended December 31, 1999 and 1998,
respectively. The related payable arising from this transaction amounting to US$ 1,477,029 and US$ 1,934,442 as of 75
December 31, 1999 and 1998, respectively, is shown under "Account Payable - Non Trade" in the consolidated balance sheets.
e. The Company has outstanding contracts with Marubeni Corporation (Marubeni) and Kawasaki Heavy Industries
Limited (Kawasaki) for the construction and installation of its cement plant (Plant 11) in Citeureup, which will
have a production capacity of 2.45 million tons of portland cement per annum, at a total contract price of about
US$ 229 million. This project has been fully completed subsequently in 2000. The related contract payables
totalling to US$ 47,144,908 and US$ 40,790,149 as of December 31, 1999 and 1998, respectively, are presented
under "Account Payable - Non Trade" in the consolidated balance sheets. Relative to the above, on November 25, 1999,
Kawasaki has approved the Company’s proposal on the settlement of its contract payable to the former amounting to
US$ 23,585,214. Under the said approved settlement proposal, the Company shall pay the aforementioned liability in
eighteen monthly installments of US$ 572,609, and the remaining balance of US$ 13,278,252 to be paid in accordance with the
debt restructuring plan (see Note 13). The first installment was paid in December 1999.
f. IKC has an agreement with Marubeni whereby the latter undertakes the construction of a new cement plant for
US$ 167,632,870, and the supply of imported machinery and equipment for a total contract amount of US$ 209,945,000.
As of December 31, 1999 and 1998, the total project related expenditures amounted to US$ 347,264,633 and
US$ 345,142,482, respectively, which is recorded under "Construction in Progress". The project
is expected to be fully completed in 2000.
g. IKC entered into sale and purchase contracts with PT Bahari Cakrawala Sebuku (BCS) whereby IKC agreed to
purchase, and BCS agreed to supply, 150,000 tons of coal for the period from January 1999 to February 2000.
Total purchases made in 1999 amounted to US$ 2,550,488.

h. As of December 31 1997, the Company had various types of outstanding hedging contracts with several financial institutions.
Net aggregate receivables and payables on such hedging transactions amounted to US$ 379,453,411 and approximately Rp
2,030 billion, respectively. In March 1998, the Company also entered into various types of hedging contracts with Credit
Suisse First Boston (CSFB). The net aggregate receivables from those hedging contracts amounted to US$ 102,280,000, while
the related payables amounted to US$ 33,000,000 and Rp 645 billion.
All of the above hedging contracts were entered into by the Company in order to manage its interest and foreign
exchange exposures on some of its foreign currency denominated loans.
However, due to the Company’s declaration of a standstill position with respect to its loans as discussed in
Note 13, all of the above mentioned hedging contracts were pre-terminated as follows:
• On July 13, 1998, all of the hedging agreements with Chase Manhattan Asia Limited (CMAL) were pre-
terminated, resulting to a net payable of US$ 1,043,497.75 by the Company to CMAL. As of December 31, 1999,
this amount is still outstanding and recorded under "Accrued Expenses" account.
• On September 9, 1998, the Company and CSFB agreed to terminate and cancel all their hedging transactions.
In net final settlement, CSFB paid US$ 3,000,000 to the Company.
• On November 4, 1998, the hedging transaction with Morgan Stanley Asia Limited (MSAL) was cancelled, and
MSAL paid US$ 2,800,000 to the Company as final settlement.
76
The payments received from CSFB and MSAL were transferred to the Company’s escrow account in Bank of
America National Trust and Savings Association, Singapore Branch. Any withdrawals from the said escrow account
shall be approved by the Company and the Steering Committee representing the Company’s creditors.
Accordingly, the said escrow account is presented as "Restricted Cash in Bank" in the consolidated balance sheets.
The members of the above mentioned Steering Committee are Bank of America, The Bank of Tokyo-Mitsubishi,
Limited, Banque Nationale de Paris, Marubeni Corporation, The Chase Manhattan Bank, and Fuji Bank, Limited.
i. On October 4, 1999, PT Mekar Perkasa and PT Kaolin Indah Utama, the Company’s top two shareholders, have
entered into conditional agreements with Heidelberger Zement Group (HZ) whereby HZ, subject to, inter alia, a
successful debt restructuring, may take a direct or indirect interest in the Company based on terms and conditions
that may be agreed upon among the concerned parties.
j. On November 19, 1999, the Company signed a contract with Semt Pielstick (SEMT) for the supply of equipment
in connection with the rehabilitation of nine (9) engines of the power plant in Company’s Citeureup plant for a total
contract price of FRF 95,192,305. A down payment of FRF 18,586,219 is to be paid in three installments while the
remaining FRF 76,606,086 shall be paid partly in the form of sale of cement by the Company to SEMT through
Transclear S.A., and partly by drawing from the trustee account as referred to in the agreement (see Note 22).
Transclear S.A, which has been requested by SEMT to act on its behalf, has signed a Summary of Meeting with
the Company on November 11, 1999 for the purchase of cement valued at approximately US$ 5,130,000, which
represent about 38% of the amount to be paid by the Company as settlement for the above-mentioned supply contract.
k. In November 1999, the Company signed four technical assistance contracts with Centrales Diesel Export (CDE)
for technical assistance services relating to the rehabilitation, operation and maintenance of the power plant in the
Company’s Citeureup plant for an aggregate contract price of FRF 6,104,050. The payments of the contract price
are to be made by drawing from the trustee account as referred to in the agreements (see Note 22).

21. Economic Environment
Many Asia Pacific countries, including Indonesia, have experienced economic downturn brought about by the currency
devaluation in the region, which is characterized by extreme lack of liquidity and highly volatile exchange and interest
rates. Such adverse economic condition has also involved tightening of available credits, postponement of major
construction projects, general price increases of commodities and reduced economic activities. The postponements
and/or stoppage of major construction projects have significantly reduced the Company’s sales volume. In addition, the
volatility in exchange and interest rates had adversely affected the Company’s and Subsidiaries’ cost of funds, as well as
their capacity to service their debts, given that the balances of the Company’s and its Subsidiaries’ borrowings
denominated in foreign currencies have increased significantly in Rupiah terms, and interest rates on their Rupiah
denominated loans had likewise increased significantly. Consequently, the Company and IKC were unable to maintain
the required financial ratios, as specified in their existing loan agreements, and have defaulted on their loan principal
and interest payments (see Note 13). Furthermore, the effects of the adverse economic condition on the financial
conditions of the Company’s and its Subsidiaries’ customers have slowed down sales and increased credit risks inherent
in receivables from customers.
Currently, the Indonesian economy is still faced with lingering instability. Although, in 1999 (particularly towards the
second semester), there are already some positive indicators of improving economic condition in Indonesia, at least on
the macro level. Among others, inflation rate has been brought down to a manageable level; economic activities have
improved and are increasing; interest rate has been reduced to its pre-crisis level; and the Rupiah has partially recovered
vis-à-vis the US Dollar. However, the Company and its Subsidiaries, as well as the cement industry as a whole, is still
affected by the current slump in the construction and real estate sectors. 77
Furthermore, the Company has made substantial progress in its debt restructuring negotiations over the past year, by
reaching a board agreement with the Steering Committee of its creditors in 1999 regarding the framework of the
restructuring, which is expected to be concluded in the final documentation process in 2000. In this connection,
pursuant to the requirements and/or demands from the creditors, the Company and IKC are currently planning to
merge their operations.
As part of their continuing effort to respond and manage the adverse effects of the above-mentioned economic events,
the Company and its Subsidiaries have undertaken and are continuously implementing the following measures, among others:
a. Finalize the loan restructuring documentation;
b. Enhance export sales, which will further be boosted especially with the plan to have Heidelberger Zement, one of
the largest trading companies in the world, as one of the Company’s joint-controlling shareholders;
c. Consistently apply cost-cutting programs that were initiated in previous years, such as:
• Consumption of domestic products to the extent possible;
• Reduction of non-essential operating expenses, such as unnecessary foreign travelling, ceremonial expenses, etc; and
• Convertion of foreign currency denominated expenses into Rupiah currency.
d. Continuously review capital expenditures, investments and expansion plans;
e. Continuously apply dynamic and prudent treasury management; and
f. Assess the possibility to spin-off the non-core assets and businesses.

As of December 31,1999, the Company and its Subsidiaries, which use Rupiah as their functional currency, have assets and liabilities
denominated in foreign currencies as follows:
Equivalent in Rupiah
December 31, 1999 February 18, 2000
Foreign Currency (Balance Sheet Date) (Audit Report Date)
Rp Rp
Assets
in US Dollar US$ 15,460,867 109,772,155,700 114,487,720,135
in Japanese Yen ¥ 3,778,789 262,527,965 252,522,487
Total 110,034,683,665 114,740,242,622
Liabilities
in US Dollar US$ 297,017,897 2,108,827,068,700 2,199,417,527,285
in Japanese Yen ¥ 13,412,489,987 931,820,670,606 896,307,079,618
in Italian Lira ITL 52,480,935,530 193,733,373,509 198,456,657,707
in Deutsche Mark DEM 2,072,129 7,572,968,414 7,757,595,108
in Denmark Kroner DKK 784,747 752,486,051 771,743,742
Total 3,242,706,567,280 3,302,710,603,460
78 Net liabilities 3,132,671,883,615 3,187,970,360,838
As of December 31, 1999, assets and liabilities of foreign subsidiaries and IKC are as follows:
Equivalent in Rupiah
December 31, 1999 February 18, 2000
Foreign Currency (Balance Sheet Date) (Audit Report Date)
Rp Rp
Assets
in US Dollar US$ 507,089,162 3,600,333,050,200 3,754,995,244,610
in Netherlands Gulden NLG 25,872,822 83,920,050,526 85,965,814,562
Total 3,684,253,100,726 3,840,961,059,172
Liabilities
in US Dollar US$ 366,320,049 2,600,872,347,900 2,712,599,962,845
in Netherlands Gulden NLG 438,616,849 1,422,680,066,742 1,457,361,500,993
Total 4,023,552,414,642 4,169,961,463,838
Net liabilities 339,299,313,916 329,000,404,666

As shown in the table below, the Rupiah currency has fluctuated in value based on the average rates of exchange for export bills and
bank notes published by Bank Indonesia:
Foreign Currency February 18, 2000 December 31, 1999

Rp Rp
US Dollar (US$ 1) 7,405.00 7,100.00
Japanese yen (¥ 100) 6,682.63 6,947.41
Deutsche Mark (DEM 1) 3,743.78 3,654.68
Denmark Kroner (DKK 1) 983.43 958.89
Italia Lira (ITL 100) 378.15 369.15
Netherlands Gulden (NLG 1) 3,322.63 3,243.56
Had the assets and liabilities denominated in foreign currencies as of December 31, 1999 been reflected using the above average
rates of exchange as of February 18, 2000 (the independent auditors’ report date), the net foreign currency denominated liabilities
would have increased by approximately Rp 45 billion in Rupiah terms.
Resolution of the current economic instability and/or further improvement of the economy depend on the fiscal, monetary and
other measures that have been and will be undertaken by the government, actions which are beyond the Company and its
Subsidiaries’ control, to fully achieve economic recovery. It is not possible to determine the future effects that a continuation of the
current economic condition may have on the Company’s and its Subsidiaries’ liquidity and earnings, including the effects flowing
through from their investors, customers, suppliers, creditors and shareholders.
79
22. Subsequent Events
On January 17, 2000, the Company, SEMT and Natexis Banque London Branch (Natexis) entered into a trust agreement in
connection with the contracts mentioned in 20j and 20k. As required under the said agreement, the Company shall maintain a
trustee account with Natexis which shall have a minimum balance of FRF 18,000,000 at all times during the period starting from the
third month after the signing of the trust agreement until the twelfth month; then a minimum of FRF 9,000,000 for the succeeding
three months; and a minimum of FRF 2,200,000 for the remaining fifteen months or until all payments are made to SEMT, which
ever is earlier.

Corporate Information
Major Shareholders Professionals and Bankers

PT Mekar Perkasa Auditors
57.60% Prasetio, Utomo & Co.
Government of the Republic of Indonesia (A member of Arthur Andersen & Co.SC)
25.73% 25-28th Floor, Wisma 46, Kota BNI
Jl. Jenderal Sudirman Kav. 1
Share listing : all shares are listed on the Main Board of Jakarta 10220, Indonesia
the Stock Exchange in Indonesia – Reuters INTPJK
Corporate Lawyers
Corporate Address Hadiputranto, Hadinoto & Partners
8th Floor, Wisma Indosemen The Jakarta Stock Exchange Building
Jl. Jenderal Sudirman Kav. 70-71 Tower II, 21st Floor
Jakarta 12910, Indonesia Jl. Jenderal Sudirman Kav. 52-53
Phone : +62 21 2512121 Jakarta 12910, Indonesia
P.O.Box : 4018 Jakarta 10040
Facsimile : +62 21 2510066 Share Registrar
http://www.indocement.co.id PT Risjad Salim Registra
4th Floor, Sentral Plaza Building
80 Other Shareholder Information Jl. Jenderal Sudirman Kav. 47-48
Annual General Meeting Jakarta 12930, Indonesia
The Annual General Meeting of Shareholders will
be held on the 21st Floor, Wisma Indosemen, Major Bankers
Jl. Jenderal Sudirman Kav. 70-71 Marubeni Corporation
Jakarta 12910 The Chase Manhattan Bank, N.A.
On June 26, 2000 The Export-Import Bank of Japan
Bank of America
For further information, please contact : The Fuji Bank Limited
Corporate Secretariat Division The Yasuda Trust and Banking Company Ltd.
PT Indocement Tunggal Prakarsa Tbk. Export Finance and Insurance Corporation
8th Floor, Wisma Indosemen Bank Central Asia
Jl. Jenderal Sudirman Kav. 70-71 Bank Mandiri
Jakarta 12910, Indonesia
Phone : +62 21 2512121
Facsimile : +62 21 2510066
E-mail : [email protected]
Investor inquiries may be directed to :

Corporate Finance Division
PT Indocement Tunggal Prakarsa Tbk.
9th Floor, Wisma Indosemen
Jl. Jenderal Sudirman Kav. 70-71
Jakarta 12910, Indonesia
Phone : +62 21 2512121
Facsimile : +62 21 2510076/2512076
E-mail : [email protected]

00

Brought To You by Global Reports

Uploaded by

Copyright:

Available Formats

Brought To You by Global Reports

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Brought To You by Global Reports

Uploaded by

Copyright:

Available Formats

00

Brought to you by Global Reports

The Shareholders and Board of Directors

We have audited the consolidated balance sheets of PT Indocement Tunggal Prakarsa

We conducted our audits in accordance with auditing standards established by the

As discussed in Notes 2d, 2p and 3 to the consolidated financial statements,

Brought to you by Global Reports

PRASETIO, UTOMO & CO.

Drs. Adi Pranoto Leman

February 18, 2000

Brought to you by Global Reports

Cash and cash equivalent 2c,2f,4,6 869,980,602,924 84,094,783,367

38 Total Current Assets 1,944,130,743,228 1,301,283,435,864

DEFERRED TAX ASSETS - Net 2p,3,12 299,436,181,916 530,258,684,381

LONG-TERM INVESTMENTS AND

PROPERTY, PLANT AND EQUIPMENT 2i,2j,2k,6,9,10,13

Net Book Value 7,099,395,373,526 7,295,662,037,007

Total Other Assets 188,576,001,524 244,601,188,683

TOTAL ASSETS 16 9,851,099,111,969 9,640,675,994,272

Brought to you by Global Reports

LIABILITIES AND STOCKHOLDERS’ EQUITY

Total Current Liabilities 8,361,207,475,635 8,570,904,264,110

DEFERRED GAIN ON SALE AND LEASEBACK

MINORITY INTERESTS IN NET ASSETS OF SUBSIDIARIES 339,472,374,531 378,353,120,157

Total Shareholders' Equity 1,125,616,547,100 665,346,809,617

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 9,851,099,111,969 9,640,675,994,272

Brought to you by Global Reports

Notes 1999 1998

NET REVENUES 2m,6,16,21 1,758,966,257,437 1,589,882,081,427

COST OF REVENUES 2m,16,17 1,123,912,968,562 973,973,559,716

GROSS PROFIT 635,053,288,875 615,908,521,711

OPERATING EXPENSES 2m,18

Total Operating Expenses 264,111,904,484 178,941,823,069

INCOME FROM OPERATIONS 16 370,941,384,391 436,966,698,642

OTHER INCOME (CHARGES)

Other Income (Charges) - Net 385,844,397,150 (1,519,157,430,837)

INCOME (LOSS) BEFORE PROVISION

Brought to you by Global Reports

Notes 1999 1998

Net Provision for Income Tax 230,285,476,422 (442,323,281,355)

INCOME (LOSS) BEFORE MINORITY

MINORITY INTERESTS IN NET LOSSES (INCOME) OF SUBSIDIARIES (3,076,966,927) 5,734,289,815

NET INCOME (LOSS) 523,423,338,192 (634,133,161,025)

NET INCOME (LOSS) PER SHARE 2q 216.79 (262.64)

Brought to you by Global Reports

Additional Foreign Currency Differences Arising

Balance, January 1, 1998

As restated 2b,2d,2p,3 – – 299,782,965,405 (2,371,884,159)

Balance, December 31, 1999 1,207,226,660,000 172,329,476,497 477,577,930,779 19,310,551,854

Brought to you by Global Reports

(1,496,514,575,077) – 50,000,000,000 696,837,242,258 894,198,866,708

– (25,722,928,500) – 111,450,188,092 77,551,968,228

– 30,318,054,460 – 418,617,488,236 448,095,905,724

– 30,318,054,460 – (634,133,161,025) (306,404,025,319)

(1,496,514,575,077) 4,595,125,960 50,000,000,000 174,154,269,325 665,346,809,617

(1,496,514,575,077) (1,891,104,470) 50,000,000,000 697,577,607,517 1,125,616,547,100

Brought to you by Global Reports

Net Cash Provided by Operating Activities 922,501,207,899 563,966,375,247

CASH FLOWS FROM INVESTING ACTIVITIES