Smartnews. Performance Summary. Production. Revenue. December 2006

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1

Smartnews

December 2006

Performance Summary

304

628 4,708

4,657

855

722

797

571 -600

1,200

1,800

2,400

3,000

3,600

Dec-05

Dec-06

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Sales

Gross Margin

EBITDA

Net Income

During

2006,

the

Company

achieved record financial and

operational

performance.

Net

income increased by 106.4% to

Rp 628.0 billion compared to

Rp 304.2 billion in 2005. This

achievement was underpinned by

historical high CPO production of

490,870 tons, 6.4% increase over

last year.

As of December 31, 2006, total palm plantation hectarage of the Company was 118,050 hectares, which

include mature and immature, nucleus and plasma, as well as subsidiaries’ estates. Total area increased

by 15.1% compared to last year, signaling the successful roll-out for the expansion program of our

plantations.

Production

Description

Dec 2005

Dec 2006

Growth

CPO produced - ton

461,523

490,870

6.4%

PK produced - ton

97,715

103,911

6.3%

Oil extraction rate - %

23.21

23.38 0.7%

Kernel extraction rate - %

4.92

4.95 0.7%

CPO production increased by 6.4% to

490,870 tons and PK production increased

by 6.3% to 103,911 tons. This increase was

mainly due to the increase of nucleus FFB

production by 4.7% over last year to

1,575,069 tons, with FFB yield of 22.4 tons

per ha. Oil and kernel extraction rate has

slightly increased compared to last year.

Revenue

Sales Volume (in mn tons)

1,139 147 ₁₆₇ 1,103 -200 400 600 800 1,000 1,200

CPO Based PK Based

Dec-05

Dec-06

Total revenues grew by 1.1% to Rp 4,708.3

billion in 2006 from Rp 4,656.7 billion last year.

Revenue growth during this period was mainly

derived from the increase in average selling

prices. During 2006, the average international

CPO prices (FOB Belawan) went up by 10.7%

to US$ 415.8 per ton from US$ 375.6 per ton

last year. Our average selling price in Rupiah

increased

by

2.4%,

since

the

Rupiah

(2)

2 December 2005

December 2006

Products

Rp bn

%

Rp bn

%

Cooking Oil

416.12

9.0

492.79

10.5 Margarine

229.27

4.9

230.28

4.9 Total Branded

645.39

13.9

723.07

15.4 Refined Product *)

2,188.32

47.0 2,281.68

48.5 CPO and

non-refined product

1,756.25

37.7 1,655.03

35.1 Total Unbranded

3,944.57

84.7 3,936.71

83.6 Others

66.71

1.4

48.48

1.0 Total Sales

4,656.67

100.0 4,708.25

100.0 Product

wise,

our

CPO-based

product

experienced a slight decrease of 3.1% due to

lower trading volume. Whereas, PK-based

product enjoyed an increase in sales volume of

13.5%. Export sales accounted for 42.9% of

total sales almost the same with last year.

Sales of branded products showed an increase

of 12.0% to Rp 723.07 billion from Rp 645.39

billion last year. This increase largely came

from cooking oil segments which increased by

18.4%.

*) Starting 2006, sales to industrial consumer were categorized as unbranded refined product. The 2005 figures has been restated to reflect this change.

Meanwhile, sales of unbranded products slightly decreased by 0.2% to Rp 3,936.71 billion from Rp 3,944.57

billion last year.

Cost of goods sold

Cost of goods sold for 2006 slightly decreased by

2.1% to Rp 3,853.59 billion from Rp 3,934.35

billion for the same period last year. The lower cost

of goods sold was achieved as we used more of

our CPO as a materials of refinery.

3,934

_3,854

2,500

3,000

3,500

4,000

Dec-05

Dec-06

COGS (Rp billion)

Operating income

The Company’s operating income for 2006

increased by 45.2% to Rp 617.08 billion from

Rp 424.97 billion last year. This increase mainly

resulted from the increase in gross profit by 18.3%

to Rp 854.66 billion, and a decrease in operating

expenses by 20.1% in operating expenses to Rp

237.58 billion.

571 797 631 304 628 617 425 238

-200

400

600

800 1,000

Dec-05

Dec-06

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Operating income

EBITDA

Income before tax

Net income

EBITDA

EBITDA for 2006 increased by 39.6% to Rp 797.13 billion from Rp 570.93 billion last year, in line with the

increase in operating income.

Income before tax

The Company’s income before tax increased by 165.4% to Rp 630.76 billion for 2006 from Rp 237.69 billion

last year, mainly as a result of increasing operating income and a foreign exchange gain of Rp 113.21 billion

compared to a loss of Rp 114.80 billion last year.

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3 Assets

The Company’s total assets grew by 15.5% from

Rp 4,597.23 billion per December 31, 2005 to

Rp 5,311.93 billion per December 31, 2006.

The Company’s current assets increased by

11.2% from Rp 1,490.23 billion in December 31,

2005 to Rp 1,657.62 billion in December 31, 2006.

4,597

5,312

2,668

2,731

1,929

2,577

-2,000

4,000

6,000

Dec-05

Dec-06

R

p

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Assets

Liabilities

Shareholders' equity

Its non current assets increased by 17.6% from Rp 3,106.99 billion to Rp 3,654.32 billion. The increase

mainly resulted from the increase in immature plantations by more than 15,000 ha and the on-going

construction of a new refinery in South Kalimantan.

Liabilities

Total liabilities as of December 31, 2006 increased by 2.4% to Rp 2,731.40 billion from Rp 2,668.17 billion.

Of this amount, total bank debts as of December 31, 2006 was Rp 801.42 billion, including a new facility

obtained from WestLB AG, Singapore Branch amounting to US$ 40 million.

As of December 31, 2006, the debt to equity ratio stood at 1.06, while bank debts to EBITDA ratio was 1.01.

Shareholders’ equity

Shareholders’ equity at the end of 2006 increased sharply by 33.6% to Rp 2,577.21 billion from Rp 1,928.57

billion at the preceding year. As a result of its current net profit of Rp 628.01 billion for the year ended

December 31, 2006, the Company’s retained earnings returned to a positive position of Rp 163.78 billion.

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PT SINAR MAS AGRO RESOURCES AND TECHNOLOGY Tbk PT SINAR MAS AGRO RESOURCES AND TECHNOLOGY Tbk

DAN ANAK PERUSAHAAN AND ITS SUBSIDIARIES

Neraca Konsolidasi Consolidated Balance Sheets

31 Desember 2006 dan 2005 December 31, 2006 and 2005

2006 2005

Rp Rp

AKTIVA LANCAR CURRENT ASSETS

Kas dan setara kas 323,764,478,647 383,354,492,773 Cash and cash equivalents Investasi jangka pendek 12,878,291,667 1,908,371,995 Short-term investments

Piutang usaha Trade accounts receivable

Pihak yang mempunyai hubungan istimewa 81,117,513,717 44,194,760,039 Related parties Pihak ketiga 204,775,531,911 226,022,347,836 Third parties

Piutang lain-lain - pihak ketiga 32,394,210,966 41,063,337,436 Other receivables - third parties

Persediaan 710,274,557,791 636,460,972,225 Inventories

Biaya dibayar dimuka dan aktiva lancar lainnya 178,841,319,590 101,972,271,799 Prepaid expenses and other current assets Pajak Pertambahan Nilai dibayar dimuka - bersih 113,569,765,353 55,257,745,669 Prepaid Value Added Tax - net

JUMLAH AKTIVA LANCAR 1,657,615,669,642 1,490,234,299,772 TOTAL CURRENT ASSETS

AKTIVA TIDAK LANCAR NON CURRENT ASSETS

Piutang dari pihak yang mempunyai hubungan

istimewa 47,082,346,481 116,804,547,096 Due from related parties Aktiva pajak tangguhan - bersih 46,851,145,485 20,669,629,223 Deferred tax assets - net Investasi dalam saham pada perusahaan asosiasi 339,444,245,862 447,900,390,034 Investments in shares of associates

Tanaman perkebunan Plantations

Tanaman telah menghasilkan - setelah

dikurangi akumulasi amortisasi sebesar Mature plantations - net of accumulated Rp 241.235.516.732 tahun 2006 dan amortization of Rp 241,235,516,732 in 2006 Rp 197.089.438.644 tahun 2005 831,759,470,022 886,100,011,425 and Rp 197,089,438,644 in 2005 Tanaman belum menghasilkan 275,450,734,758 72,880,788,530 Immature plantations

Aktiva tetap - setelah dikurangi akumulasi Property, plant and equipment - net of accumulated penyusutan sebesar Rp 498.519.553.205 depreciation of Rp 498,519,553,205 in 2006 tahun 2006 dan Rp 416.320.570.514 tahun 2005 1,642,346,402,677 1,335,673,496,158 and Rp 416,320,570,514 in 2005

Aktiva tidak berwujud Intangible assets

Goodwill - bersih 36,757,819,240 39,509,810,211 Goodwill - net

Merek dagang - bersih 6,105,000,000 6,868,125,000 Brands and trademarks - net

Aktiva lain-lain Other assets

Taksiran tagihan pajak 105,009,555,102 51,673,558,254 Estimated claims for tax refund

Bibitan 32,975,297,419 25,384,306,797 Nursery

Biaya tangguhan hak atas tanah - bersih 19,507,681,330 16,252,061,111 Deferred landrights - net Biaya pengembangan piranti lunak - bersih 11,437,274,480 16,073,463,228 Software development costs - net Biaya ditangguhkan lainnya - bersih 8,854,244,280 1,356,565,323 Other deferred charges - net

Lain-lain 250,733,995,046 69,845,901,233 Others

Jumlah aktiva lain-lain 428,518,047,657 180,585,855,946 Total other assets

JUMLAH AKTIVA TIDAK LANCAR 3,654,315,212,182 3,106,992,653,623 TOTAL NON CURRENT ASSETS

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Neraca Konsolidasi Consolidated Balance Sheets

31 Desember 2006 dan 2005 (Lanjutan) December 31, 2006 and 2005 (Continued)

2006 2005

Rp Rp

KEWAJIBAN DAN EKUITAS LIABILITIES AND EQUITY

KEWAJIBAN LANCAR CURRENT LIABILITIES

Hutang bank jangka pendek 232,716,000,000 253,614,000,000 Short-term bank loans

Hutang usaha Trade accounts payable

Pihak yang mempunyai hubungan istimewa 286,413,605,873 279,013,905,109 Related parties

Pihak ketiga 153,400,248,199 152,853,150,178 Third parties

Hutang lain-lain Other payables

Pihak yang mempunyai hubungan istimewa 22,550,000,000 24,575,000,000 Related parties

Pihak ketiga 43,794,796,757 26,898,349,961 Third parties

Uang muka pelanggan - pihak ketiga 25,053,340,445 35,304,420,130 Advances from customers - third parties Biaya yang masih harus dibayar 41,566,979,722 72,337,660,396 Accrued expenses

Hutang pajak 16,487,898,957 13,466,355,307 Taxes payable

Bagian hutang jangka panjang yang akan jatuh

tempo dalam waktu satu tahun 267,650,033,148 172,485,625,065 Current maturities of long-term debts

JUMLAH KEWAJIBAN LANCAR 1,089,632,903,101 1,030,548,466,146 TOTAL CURRENT LIABILITIES

KEWAJIBAN TIDAK LANCAR NON CURRENT LIABILITIES

Kewajiban pajak tangguhan - bersih 132,039,370,724 107,119,160,876 Deferred tax liabilities - net

Cadangan imbalan pasti pasca-kerja 54,026,603,000 47,279,804,923 Defined post-employment benefits reserve Hutang jangka panjang - setelah dikurangi bagian

yang akan jatuh tempo dalam waktu satu tahun 533,767,357,564 400,929,415,812 Long-term debts - net of current maturities Hutang kepada pihak yang mempunyai hubungan

istimewa 921,929,324,702 1,082,290,455,631 Due to related parties

JUMLAH KEWAJIBAN TIDAK LANCAR 1,641,762,655,990 1,637,618,837,242 TOTAL NON CURRENT LIABILITIES

KELEBIHAN BAGIAN RUGI BERSIH EXCESS OF EQUITY IN NET

PERUSAHAAN ASOSIASI ATAS LOSSES OF AN ASSOCIATE

BIAYA PEROLEHAN 3,310,591,521 479,269,466 OVER COST

HAK MINORITAS ATAS AKTIVA MINORITY INTEREST IN NET

BERSIH ANAK PERUSAHAAN 10,000,000 10,000,000 ASSETS OF A SUBSIDIARY

EKUITAS EQUITY

Modal Saham - nilai nominal Rp 200 per saham Capital stock - Rp 200 par value per share

Modal dasar - 5.000.000.000 saham Authorized - 5,000,000,000 shares

Modal ditempatkan dan disetor

penuh - 2.872.193.366 saham 574,438,673,200 574,438,673,200 Issued and fully paid - 2,872,193,366 shares Tambahan modal disetor 1,662,472,039,200 1,662,472,039,200 Additional paid-in capital

Selisih kurs penjabaran 103,464,328,854 116,703,860,204 Difference in foreign currency translation Selisih transaksi perubahan ekuitas Difference arising from changes in subsidiaries'

anak perusahaan 68,077,476,883 24,703,013,824 equity

Selisih transaksi perubahan ekuitas Difference arising from changes in associated perusahaan asosiasi 16,972,153,478 26,467,936,017 companies' equity

Selisih nilai transaksi restrukturisasi entitas Difference arising from restructuring transactions sepengendali (11,987,787,393) (11,987,787,393) of entities under common control

Saldo laba (defisit) 163,777,846,990 (464,227,354,511) Retained earnings (deficit)

JUMLAH EKUITAS 2,577,214,731,212 1,928,570,380,541 TOTAL EQUITY

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Laporan Laba Rugi Konsolidasi Consolidated Statements of Income

Untuk Tahun-tahun yang Berakhir 31 Desember 2006 dan 2005 For the Years Ended December 31, 2006 and 2005

2006 2005

Rp Rp

PENDAPATAN USAHA 4,708,250,428,465 4,656,674,036,723 REVENUES

BEBAN POKOK PENJUALAN 3,853,587,961,684 3,934,352,681,895 COST OF GOODS SOLD

LABA KOTOR 854,662,466,781 722,321,354,828 GROSS PROFIT

BEBAN USAHA OPERATING EXPENSES

Penjualan 170,616,008,463 194,036,433,315 Selling

Umum dan administrasi 66,961,671,314 103,315,049,189 General and administrative Jumlah Beban Usaha 237,577,679,777 297,351,482,504 Total Operating Expenses

LABA USAHA 617,084,787,004 424,969,872,324 INCOME FROM OPERATIONS

PENGHASILAN (BEBAN) LAIN-LAIN OTHER INCOME (EXPENSES)

Laba (rugi) selisih kurs - bersih 113,214,158,878 (114,801,915,803) Gain (loss) on foreign exchange - net Pendapatan bunga 16,034,009,345 9,649,551,971 Interest income

Bagian atas laba bersih perusahaan

asosiasi - bersih 8,197,847,662 8,814,321,525 Equity in net profit of associates - net Beban bunga dan keuangan lainnya (133,700,596,927) (126,066,291,561) Interest and other financial charges

Loss on impairment of property, plant and Rugi penurunan nilai aktiva tetap (1,148,763,863) (81,218,388) equipment

Lain-lain - bersih 11,076,840,291 35,202,760,135 Miscellaneous - net

Penghasilan (Beban) Lain-lain - Bersih 13,673,495,386 (187,282,792,121) Other Income (Expenses) - Net

LABA SEBELUM PAJAK 630,758,282,390 237,687,080,203 INCOME BEFORE TAX

BEBAN (PENGHASILAN) PAJAK TAX EXPENSE (BENEFIT)

Kini 5,459,279,966 1,912,305,044 Current

Tangguhan (1,394,650,079) (68,428,573,197) Deferred

4,064,629,887 (66,516,268,153)

INCOME BEFORE PRE-ACQUISITION

LABA SEBELUM RUGI PRA-AKUISISI 626,693,652,503 304,203,348,356 LOSSES

RUGI PRA-AKUISISI - BERSIH 1,311,548,998 - PRE-ACQUISITION LOSSES - NET

LABA BERSIH 628,005,201,501 304,203,348,356 NET INCOME

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Laporan Perubahan Ekuitas Konsolidasi Consolidated Statements of Changes in Equity

Selisih Selisih

Transaksi Nilai

Selisih Perubahan Transaksi

Transaksi Ekuitas Restrukturisasi

Perubahan Perusahaan Entitas

Ekuitas Anak Asosiasi/ Sepengendali/

Tambahan Selisih Kurs Perusahaan/ Difference Difference

Modal Penjabaran/ Difference Arising from Arising from

Disetor/ Difference in Arising from Changes in Restructuring Saldo laba

Additional Foreign Changes in Associated Transactions of (Defisit)/

Modal Saham/ Paid-in Currency Subsidiaries' Companies' Entities Under Retained Earnings Jumlah Ekuitas/

Capital Stock Capital Translation Equity Equity Common Control (Deficit) Total Equity

Saldo per 1 Januari 2005 297,360,000,000 - 107,540,732,278 17,208,560,616 9,710,073,443 (11,987,787,393) (768,430,702,867) (348,599,123,923) Balance as of January 1, 2005 Konversi hutang menjadi

saham 277,078,673,200 - - - 277,078,673,200 Debt-to-equity conversion

Tambahan modal disetor - 1,662,472,039,200 - - - 1,662,472,039,200 Additional paid-in capital

Selisih kurs karena penjabaran laporan keuangan

perusahaan asosiasi - - 9,163,127,926 - - - - 9,163,127,926 Translation adjustment

Selisih transaksi perubahan Difference arising from changes in subsidiaries'

ekuitas anak perusahaan - - - 7,494,453,208 - - - 7,494,453,208 equity

Selisih transaksi perubahan Difference arising from changes in associated

ekuitas perusahaan asosiasi - - - - 16,757,862,574 - - 16,757,862,574 companies' equity

Laba bersih tahun berjalan - - - 304,203,348,356 304,203,348,356 Net income for the year

Saldo per 31 Desember 2005 574,438,673,200 1,662,472,039,200 116,703,860,204 24,703,013,824 26,467,936,017 (11,987,787,393) (464,227,354,511) 1,928,570,380,541 Balance as of December 31, 2005 Selisih kurs karena penjabaran

laporan keuangan

perusahaan asosiasi - - (13,239,531,350) - - - - (13,239,531,350) Translation adjustment

Selisih transaksi perubahan Difference arising from changes in subsidiaries'

ekuitas anak perusahaan - - - 43,374,463,059 - - - 43,374,463,059 equity

Selisih transaksi perubahan Difference arising from changes in associated

ekuitas perusahaan asosiasi - - - - (9,495,782,539) - - (9,495,782,539) companies' equity

Laba bersih tahun berjalan - - - 628,005,201,501 628,005,201,501 Net income for the year

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Laporan Arus Kas konsolidasi Consolidated Statements of Cash Flows

2006 2005

Rp Rp

ARUS KAS DARI AKTIVITAS OPERASI CASH FLOWS FROM OPERATING ACTIVITIES

Penerimaan kas dari pelanggan 4,673,127,484,159 4,602,134,069,551 Cash receipts from customers

Pembayaran kas untuk pemasok, kontraktor, Cash paid to suppliers, contractors, employees karyawan dan lainnya (4,134,189,275,877) (4,329,949,356,141) and others

Kas yang diperoleh dari operasi 538,938,208,282 272,184,713,410 Cash generated from operations Penerimaan tagihan pajak - bersih 26,228,166,274 7,976,580,284 Proceeds from claims for tax refund - net Pembayaran pajak penghasilan (48,146,018,258) (9,152,185,074) Payment of income taxes

Pembayaran beban bunga - bersih (141,418,046,650) (121,001,655,224) Payment of interest - net

Kas Bersih Diperoleh dari Aktivitas Net Cash Provided by Operating

Operasi 375,602,309,648 150,007,453,396 Activities

ARUS KAS DARI AKTIVITAS INVESTASI CASH FLOWS FROM INVESTING ACTIVITIES

Penurunan (penambahan) bersih investasi jangka Net decrease (increase) in short-term

pendek (10,969,919,672) 18,368,485,608 investments

Pembayaran untuk akuisisi anak perusahaan setelah Payment for acquisition of subsidiaries dikurangi saldo kas pada tanggal akuisisi (30,353,626,790) - net of cash balance at acquisition date Penurunan investasi pada perusahaan asosiasi - 450,000,000 Decrease in investments in associates

Penerimaan dividen 96,750,000,000 - Dividends received

Proceeds from sale of property, plant and Hasil penjualan aktiva tetap dan tanaman perkebunan 12,853,196,094 67,237,155,534 equipment and plantations

Perolehan aktiva tetap dan penambahan Acquisitions of property, plant and equipment tanaman perkebunan (474,685,088,300) (412,554,954,218) and additional plantation estates Penurunan bersih deposito berjangka

-pihak yang mempunyai hubungan istimewa - 217,717,441,664 Net decrease in time deposits - related party Kenaikan bersih bibitan (21,692,787,646) (18,371,540,410) Net increase in nursery

Penambahan biaya hak atas tanah (1,953,644,054) - Additional landrights cost

Penambahan biaya pengembangan piranti lunak - (2,479,293,135) Additional software development costs Penambahan investasi proyek pembangunan pabrik Additional investments in oil palm mill

minyak kelapa sawit (17,398,775,255) - construction projects

Penurunan (penambahan) bersih investasi proyek Net decrease (increase) in investment in plasma perkebunan plasma (1,922,478,282) 6,468,421,427 plantations project

Penambahan aktiva lain-lain (119,370,141,080) - Increase in other assets

Penambahan pembukaan lahan (52,477,726,046) (1,753,944,287) Additional land clearing

Kas Bersih Digunakan untuk Aktivitas Investasi (621,220,991,031) (124,918,227,817) Net Cash Used in Investing Activities

ARUS KAS DARI AKTIVITAS PENDANAAN CASH FLOWS FROM FINANCING ACTIVITIES

Penerimaan hutang bank jangka pendek - 252,982,000,000 Additional short-term loans Penambahan hutang jangka panjang 461,033,720,000 98,175,767,041 Additional long-term debts Pembayaran hutang jangka panjang (194,050,620,743) (101,721,629,120) Payments of long-term debts Penambahan hutang kepada pihak yang mempunyai

hubungan istimewa 792,918,598,000 280,275,600,000 Additional due to related parties Pembayaran hutang kepada pihak yang mempunyai

hubungan istimewa (873,873,030,000) (392,678,946,343) Payments of due to related parties Kas Bersih Diperoleh dari Aktivitas Pendanaan 186,028,667,257 137,032,791,578 Net Cash Provided by Financing Activities

KENAIKAN (PENURUNAN) BERSIH KAS DAN SETARA NET INCREASE (DECREASE) IN CASH AND CASH

KAS (59,590,014,126) 162,122,017,157 EQUIVALENTS

CASH AND CASH EQUIVALENTS AT BEGINNING

KAS DAN SETARA KAS AWAL TAHUN 383,354,492,773 221,232,475,616 OF THE YEAR

CASH AND CASH EQUIVALENTS AT END OF