Establish the basis for next growth in front of new era of competition, while keep challenging to further operational excellence and CS improvement

Transkripsi

1 2015 ANNUAL REPORT

2 Establish the basis for next growth in front of new era of competition, while keep challenging to further operational excellence and CS improvement

3 01 ANNUAL REPORT 2015 PT Asahimas Flat Glass Tbk TABLE OF CONTENTS FINANCIAL HIGHLIGHTS STATEMENT OF COMPREHENSIVE INCOME STATEMENT OF FINANCIAL POSITION (BALANCE SHEET) COMPOSITION OF 2015 NET SALES VALUE KEY FINANCIAL RATIOS PT ASAHIMAS FLAT GLASS TBK (AMFG)'S SHARE INFORMATION BOARD OF COMMISSIONERS' REPORT BOARD OF COMMISSIONERS' SUPERVISION ASSESSMENT OF THE COMMITTEE PERFORMANCE UNDER BOARD OF COMMISIONERS ASSESSMENT OF THE BOARD OF DIRECTORS' PERFORMANCE A VIEW ON THE COMPANY'S BUSINESS PROSPECTS BOARD OF COMMISSIONERS' COMPOSITION APPRECIATION TO STAKEHOLDERS BOARD OF DIRECTORS' REPORT THE COMPANY'S PERFORMANCE CHALLENGES BUSINESS STRATEGY BUSINESS PROSPECTS GOOD CORPORATE GOVERNANCE IMPLEMENTATION BOARD OF DIRECTORS' COMPOSITION APPRECIATION TO STAKEHOLDERS COMPANY PROFILE THE COMPANY'S NAME AND ADDRESS THE COMPANY'S BRIEF HISTORY THE COMPANY'S BUSINESS ACTIVITIES AND PRODUCTS THE COMPANY'S ORGANIZATIONAL STRUCTURE MISSION AND VISION BOARD OF COMMISSIONERS AND BOARD OF DIRECTORS BOARD OF COMMISSIONERS AND BOARD OF DIRECTORS APPOINTMENT IN 2015 BOARD OF COMMISSIONERS' PROFILE BOARD OF DIRECTORS' PROFILE CHANGES IN THE COMPOSITION OF BOARD OF COMMISSIONERS AND BOARD OF DIRECTORS AFTER THE REPORTING PERIOD HUMAN RESOURCES AND DESCRIPTION OF ITS DEVELOPMENT SHAREHOLDER INFORMATION AND SHARE OWNERSHIP PERCENTAGE INFORMATION ON ULTIMATE SHAREHOLDER AND CONTROLLING SHAREHOLDER COMPANY STRUCTURE UP TO ULTIMATE SHAREHOLDER AS OF DECEMBER 31, 2015 SUBSIDIARIES CHRONOLOGY OF SHARE LISTING AND CHANGES IN THE NUMBER OF SHARES CAPITAL MARKET SUPPORTING INSTITUTIONS AND PROFESSIONS AWARDS AND CERTIFICATIONS MANAGEMENT'S DISCUSSION AND ANALYSIS OPERATIONAL REVIEW BY BUSINESS SEGMENT FINANCIAL PERFORMANCE ANALYSIS SOLVENCY ACCOUNTS RECEIVABLE COLLECTIBILITY CAPITAL STRUCTURE AND MANAGEMENT POLICY ON CAPITAL STRUCTURE MATERIAL BINDING FOR CAPITAL GOODS INVESTMENT MATERIAL INFORMATION AND FACTS AFTER THE REPORTING PERIOD BUSINESS PROSPECTS COMPARISON BETWEEN PROJECTION AT THE BEGINNING OF FINANCIAL YEAR WITH THE ACHIEVED RESULTS THE COMPANY'S TARGETS IN 2016 MARKETING DIVIDEND POLICY DIVIDEND PAYMENT REALIZATION OF THE USE OF PROCEEDS FROM THE IPO MATERIAL INFORMATION ON INVESTMENT, EXPANSION, DIVESTMENT, ACQUISITION OR DEBT/CAPITAL RESTRUCTURING AMENDMENTS TO LAWS AND REGULATIONS CHANGES IN ACCOUNTING POLICY CORPORATE GOVERNANCE BOARD OF COMMISSIONERS BOARD OF DIRECTORS GENERAL MEETING OF SHAREHOLDERS AUDIT COMMITTEE NOMINATION AND REMUNERATION COMMITTEE RISK MANAGEMENT AND INSURANCE COMMITTEE DISCIPLINE AND COMPLIANCE COMMITTEE CORPORATE SECRETARY CORPORATE INTERNAL AUDIT INTERNAL CONTROL SYSTEM RISK MANAGEMENT SYSTEM SIGNIFICANT CASE ADMINISTRATIVE SANCTIONS CODE OF CONDUCT AND CORPORATE CULTURE SHARE OWNERSHIP PROGRAM WHISTLE BLOWING SYSTEM CORPORATE SOCIAL RESPONSIBILITY & ENVIRONMENT ENVIRONMENTAL RESPONSIBILITY EMPLOYMENT PRACTICES OCCUPATIONAL HEALTH AND SAFETY SOCIAL DEVELOPMENT AND COMMUNITY EMPOWERMENT OTHER SOCIAL AIDS PROGRAMS THE COMPANY'S PRODUCT LIABILITY CUSTOMER COMPLAINTS FACILITY, NUMBER AND HANDLING STATEMENT OF THE BOARD OF COMMISSIONERS AND THE BOARD OF DIRECTORS ON THE RESPONSIBILITY FOR THE 2015 ANNUAL REPORT FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS' REPORT

4 PT Asahimas Flat Glass Tbk ANNUAL REPORT FINANCIAL HIGHLIGHTS STATEMENT OF COMPREHENSIVE INCOME AND OTHER COMPREHENSIVE INCOME For the years ending December 31 ((in million Rupiah, unless specially stated.) 2013* 2014* 2015 Net Sales 3,216,480 3,672,186 3,665,989 Cost of Sales (2,488,570) (2,760,739) (2,868,674) Gross Profit 727, , ,315 Expenses (298,535) (348,453) (368,623) Operating Profit 429, , ,692 Finance Income 21,378 42,169 35,571 Profit Before Income Tax 450, , ,263 Income Tax Expense (112,395) (141,011) (122,917) Profit 338, , ,346 Other Comprehensive Loss (66,874) (21,845) (17,843) Total Comprehensive Income 271, , ,503 Total number of Outstanding Shares (Million) Operating Profit Per Share (in full Rupiah) 989 1, Earnings Per Share (in full Rupiah) 780 1, Nominal Value Per Share (in full Rupiah) Net Sales (in billion Rupiah) Operating Profit (in billion Rupiah) 4,000 3,000 3,216 3,672 3, , , * 2014* * 2014* 2015 * As restated

5 03 ANNUAL REPORT 2015 PT Asahimas Flat Glass Tbk FINANCIAL HIGHLIGHTS STATEMENT OF FINANCIAL POSITION (BALANCE SHEET) As of December 31 (in million Rupiah) Assets 2013* 2014* 2015 Current Assets 1,980,116 2,263,728 2,231,181 Investment at Equity method 1,575 1,575 1,575 Fixed Assets, Net 1,478,147 1,530,836 1,822,896 Deferred Tax Assets 72,445 79,954 75,378 Other Non-Current Assets, Net 29,401 70, ,245 Total Assets 3,561,684 3,946,125 4,270,275 Liabilities and Equity 2013* 2014* 2015 Current Liabilities Bank Loans Current Liabilities 473, , ,376 Total Current Liabilities 473, , ,376 Non-Current Liabilities Employees Benefit Obligation 393, , ,676 Total Non-Current Liabilities 393, , ,676 Total Liabilities 867, , ,052 Equity 2,693,853 3,101,440 3,390,223 Total Liabilities and Equity 3,561,684 3,946,125 4,270,275 Net Working Capital 1,506,156 1,865,490 1,751,805 Total Assets (in billion Rupiah) Total Equity (in billion Rupiah) 4,500 4,000 3,500 3,000 3,562 3,946 4,270 3,500 3,000 2,500 2,694 3,101 3,390 2,500 2,000 2,000 1,500 1,000 1,500 1, * 2014* * 2014* 2015 * As restated

6 PT Asahimas Flat Glass Tbk ANNUAL REPORT FINANCIAL HIGHLIGHTS COMPOSITION OF THE 2015 NET SALES VALUE KEY FINANCIAL RATIOS In % (percentage) EXPORT DOMESTIC 2013* 2014* 2015 Gross Profit to Net Sales % Operating Profit to Net Sales % Operating Profit to Equity Operating Profit to Total Assets AUTOMOTIVE GLASS FLAT GLASS Profit to Total Assets Profit to Equity % Current Assets to Current Liabilities % Total Liabilities to Equity Total Liabilities to Total Assets PT ASAHIMAS FLAT GLASS TBK (AMFG)'S SHARE INFORMATION Total Listed Shares : 434,000,000 Period : January - December 2015 Quarter Highest Price (Rp) Lowest Closing Transaction Volume (Unit) Market Capitalization in million (Rp) I , , , ,040, ,341,800 II , , , ,056, ,113,950 III , , , ,758, ,517,200 IV , , , ,515, ,842,700 Period : January - December 2014 Quarter Highest Harga (Rp) Lowest Closing Transaction Volume (Unit) Market Capitalization in million (Rp) I 7,100 6,425 7, ,400 3,081,400 II 7,300 6,700 7, ,400 3,103,100 III 8,825 6,550 7,450 2,657,800 3,233,300 IV 8,175 6,250 8,050 17,987,500 3,493,700 * As restated

7 05 ANNUAL REPORT 2015 PT Asahimas Flat Glass Tbk BOARD OF COMMISSIONERS' REPORT Dear Shareholders, We are grateful to God Almighty and feel pleased to have accomplished our supervisory duties on the Board of Directors' performance in carrying out the Company's management in The economic slowdown in 2015 was a reasonably tough challenge for the industry players. National economic condition was strongly influenced by the global economic condition that was still filled with uncertainties. The protracted plan to increase interest rate by the Fed and China's deteriorating economic condition were also a concern for the Indonesian economy. Those external factors directly affected on a decrease in non-oil exports and a significant depreciation of Rupiah, which in turn adversely affected the Company's market share in the property and automotive sectors as demands in these two sectors also decreased in BOARD OF COMMISSIONERS' SUPERVISION Throughout 2015, the Board of Commissioners carried out our supervisory function on the policies concerning the Company's operations. The Board of Commissioners enhanced our supervision by conducting Board of Commissioners meetings and our joint meetings with the Board of Directors, providing advices on policies and business strategies undertaken by the Board of Directors, and continuing to oversee and review the implementation of such advices. In order to improve the effectiveness of Committee's performance under the Board of Commissioners, in 2015, we exercised restructuring of the Committees, i.e. Risk Management Committee position was changed from under the Board of Commissioners to become under the Board of Directors; Compliance Committee under the Board of Commissioners was merged with Disciplinary Committee under the Board of Directors to become Discipline and Compliance Committee under the Board of Directors; and Executive Committee was dissolved. The Board of Commissioners also made amendment to Nomination and Remuneration Committee in order to comply with Otoritas Jasa Keuangan (OJK) Regulation No. 34/POJK.04/2014 by, among others, appointing an independent Commissioner as Chairman of the Committee. PERFORMANCE ASSESSMENT OF COMMITTEES UNDER THE BOARD OF COMMISSIONERS The Committees under the Board of Commissioners has done a very good job in their functions. Audit Committee and Nomination and Remuneration Committee have reported their duties and responsibilities on a regular basis. These Committees have assisted the Board of Commissioners in overseeing the Company's operations, including the Board of Directors performance, by, among others, ensuring the Company's compliance to Good Corporate Governance (GCG) and prevailing regulations. The Board of Commissioners also continuously evaluates the Company's GCG implementation based on ASEAN Corporate Governance Scorecard and views that the Company's GCG implementation in 2015 has been improved. The Board of Commissioners has received and reviewed the Board of Directors' report and the Company's financial statements for the year ended December 31, 2015 audited by Public Accountants Firm Siddharta Widjaja & Partners (a member firm of KPMG International). The Board of Commissioners views that the financial statements are already in accordance with the Statements of Financial Accounting Standards (SFAS) and capital market regulations. In the 2015 financial year, the Board of Commissioners carried out its duties by performing the following: i. supervising and advising the Board of Directors concerning their policies; ii. restructuring the Committees under the Board of Commissioners including approving the Committees' Charter; iii. giving approval on the Board of Directors' actions that should be approved by the Board of Commissioners, iv. carrying out the mandates given by the General Meeting of Shareholders (GMS) for: determining the amount of remuneration for each member of the Board of Commissioners and Board of Directors by considering the limits as has been set out in the Annual GMS; appointing Public Accountants Firm to audit the Company's books for the 2015 financial year and determining the honorarium and other requirements. v. approving the Annual Budget including the 2015 CSR budget. vi. examining the recommendations made by the Audit Committee and the Nomination and Remuneration Committee. ASSESSMENT OF THE BOARD OF DIRECTORS' PERFORMANCE The impact of the global economic slowdown still engulfed throughout 2015, leading to a decline in the demand for the Company's products both in the property and automotive sectors in the domestic market. These two sectors are the major market of the Company's business. However, the Board of Commissioners views that the Board of Directors has properly sustained the Company's positive performance in The Board of Directors' performance is reflected in the financial statements of the 2015 financial year where despite the economic downturn, the Company still managed to record Rp 3,67 trillion net sales and Rp429 billion operating profit, although the figures were lower than those achieved in 2014.

8 PT Asahimas Flat Glass Tbk ANNUAL REPORT BOARD OF COMMISSIONERS' REPORT Our appreciation goes to the Board of Directors for their effort in the construction of a new flat glass factory in Cikampek, West Java, which has been implemented according to the planned schedule. The Board of Commissioners hopes the factory construction can be completed on time and within the pre-determined budget. VIEWS ON THE COMPANY'S PROSPECTS The Board of Commissioners hopes the business prospects in 2016 will be better compared to A series of Government policies launched in mid-2015 to stimulate the economic growth is expected to bring positive impacts. Based on the macro data we collected, the economic growth in 2016 is projected at the level of 5.5% with inflation rate maintained at the level of 4.7% and rupiah exchange rate assumption against US Dollar amounting to Rp13,400 per USD, while BI Rate is expected to decline about 25 bps to 50 bps. The above indicators are expected to have a positive influence on the property and automotive markets, two major markets of the Company's products, and will certainly strengthen the Company's business performance in Furthermore, in welcoming the ASEAN Economic Community (AEC) in early 2016, the Board of Commissioners requests the Board of Directors to continually improve its efficiency and competitiveness as well as continously make innovations so that the Company's products can be more competitive in domestic and international markets. The Board of Commissioners has examined and approved the business projections prepared by the Board of Directors in the 2016 Annual Budget and views that the business projection is presented in a proper and reasonable manner and can be realized in accordance with the planned targets. COMPOSITION OF THE BOARD OF COMMISSIONERS The Annual General Meeting of Shareholders (AGMS) held on June 5, 2015, approved the change of composition of the Board of Commissioners. Masahiro Takeda was elected as Vice President Commissioner replacing Kimikazu Ichikawa and Tjahjana Setiadhi was elected as Commissioner replacing Andi Purnomo, each will serve for the term of office ended up to the closing of the Company's 2016 AGMS. The Board of Commissioners would like to thank Kimikazu Ichikawa and Andi Purnomo for having done a good job. The Company's Board of Commissioners is composed of six (6) members and this composition has complied with OJK Regulation No. 33/POJK.04/2014. Detailed composition and profile of the Board of Commissioners can be seen on the pages describing the Board of Commissioners and Board of Directors' composition. APPRECIATION TO STAKEHOLDERS On this occasion, the Board of Commissioners would like to thank all stakeholders for their assistance and cooperation which have enabled us to carry out our supervisory function and ensure a consistent implementation of Good Corporate Governance in the Company. Our deep appreciation also goes to the Board of Directors, Management and all employees who have worked hard and demonstrated an exceptional dedication in realizing the mission and vision of the Company. Hopefully, the support given to the Company will sustain in the coming years. Closing our Report, we hope that all our measures and efforts are always blessed by God Almighty. Board of Commissioners TAN PEI LING President Commissioner MASAHIRO TAKEDA Vice President Commissioner TJAHJANA SETIADHI Commissioner TAKEO TAKEI Commissioner BENYAMIN SUBRATA Independent Commissioner HIDEYA TANAKA Independent Commissioner

9 07 ANNUAL REPORT 2015 PT Asahimas Flat Glass Tbk BOARD OF DIRECTORS' REPORT MAMPEI CHIYODA, President Director E. DAVID SATRIA SOETEDJA, Vice President Director Dear distinguished Shareholders, 2015 was a year filled with challenges for the Company in terms of the global and national economic conditions. Indonesia's economy in 2015 grew 4.79%, a slight decrease compared with the 5.02% growth in Indonesian economic downturn in 2015 impacted on the weakening of the people's purchasing power, which in turn affected the property and automotive sectors, the major markets for the Company's products. Nevertheless, despite the economic downturn, we are grateful that the Company was still able to record a positive result in COMPANY'S PERFORMANCE The decreasing commodity and mining prices in the global market in 2015 and Indonesia's position as one of the exporting countries contributed to the weakening of the people's purchasing power at home. This was shown by declining sales in the property and automobile markets, the major markets of the Company's products. The Company recorded Rp3.67 trillion net sales in 2015 or Rp6 billion lower than the net sales in The Company's Flat Glass Business Unit in 2015 recorded Rp 2.67 trillion net sales, or grew 5%, while the Automotive Glass Business Unit recorded Rp1 trillion net sales or decreased by 12% compared to This decrease was primarily due to the declining car sales in the country that affected the demand for the Company's automotive glass. In 2015, the Company's domestic sales amounted to Rp2.14 trillion or decreased by 10% compared to 2014, while the export sales reached Rp1.52 trillion, a 18% increase compared to The Company, equipped with the right marketing strategy and marketing network, managed to increase its export sales to compensate for the decline in the domestic sales. In addition, the strengthening exchange rate of USD against the Rupiah also contributed positively to the Company's export sales.

10 PT Asahimas Flat Glass Tbk ANNUAL REPORT BOARD OF DIRECTORS' REPORT In 2015, there was a hike in several domestic cost components, i.e. an increase in provincial minimum wage (UMP), raw material cost and transportation cost. The increase in these costs during the economic slowdown was one of the factors leading to a decrease in the Company's performance. This can be observed from the breakdown of the Company's performance in 2015 compared to 2014 as follows: 1. Gross profit amounted Rp797 billion or declined by 13% compared to 2014 amounting to Rp 911 billion. 2. Gross profit margin was 22% or down 25% compared to Operating profit amounted to Rp429 billion or declined by 24% compared to 2014 amounting to Rp 563 billion. 4. Operating profit margin was 12% or down 15% compared to Income was to Rp341 billion or decreased by 26% compared to 2014 amounting to Rp 464 billion. In 2014, the Company announced Information Disclosure to the public in connection with the Company's plan to build a new Flat Glass Factory in Cikampek, West Java, with a total production capacity of 210,000 tons per year and USD154.9 million investment value. The factory construction commenced in late 2014 and was on +66% progress by end of The construction was targeted for completion in the second half of The Company expects the factory construction can run well in accordance with the planned schedule and budget. CHALLENGES In the course of realizing its business and operational targets in 2015, the Company encountered several challenges which were mainly related to external conditions. The challenges were as follows: 1. Slowdown in the growth of the construction and automotive sectors resulted from the economic downturn at home & overseas; 2. Increase in labor costs due to rising UMP (Regional Minimum Wage) & UMSK (City/Regency Minimum Wage); 3. Increase in the cost of imported raw materials; 4. Increase in the distribution and transportation cost; 5. Increase in glass imports resulted in a stringent competition in the domestic market. BUSINESS STRATEGIES In addressing the challenges faced in 2015, the Company made every effort to maintain its performance. The policies carried out in 2015 were as follows: 1. Strategic Cost Reduction: Productivity enhancement; Cost production efficiency; Avoiding inefficiency. 2. Adjusted the selling price of the Company's products. 3. Increased export sales volume. 4. Continued to improve supply chain quality and became a supplier that was able to provide solutions to optimize the assets of AGC Group. 5. Participated actively in Business Association activities to give input on the industry conditions and the associated various policies. BUSINESS PROSPECT Entering 2016, the Company will continue to observe economic conditions both at home and abroad. Based on the macroeconomic basic assumptions used as the basis to prepare the 2016 State Budget Plan, the Government has targeted a 5.5% economic growth in 2016 and 4.7% inflation assumption. Bank Indonesia rate has also indicated a downward trend in early In addition, the government's plan to accelerate infrastructure development in all parts of Indonesia is expected to run according to the plan. The Company expects all these indicators can be positively correlated to the Company's performance. Bank Indonesia's policy on BI rate reduction is also expected to stimulate the property and automotive sectors in 2016, which in turn will encourage a stronger growth of the Company's business.

11 09 ANNUAL REPORT 2015 PT Asahimas Flat Glass Tbk BOARD OF DIRECTORS' REPORT The Company must remain aware of the potential slowdown in the China's economy, which is projected to grow on a slower pace in 2016 and likely to affect the global economy as well as bring a direct impact on the Company's export performance in The Company will continue the efforts to improve its performance. CORPORATE GOVERNANCE IMPLEMENTATION The Company continuously strives to comply with Good Corporate Governance (GCG) Roadmap issued at the beginning of 2014 and Corporate Governance Manual for Issuers and Public Companies issued by Otoritas Jasa Keuangan (OJK) in Throughout 2015, some improvements were made, among others: the mechanism and process of GMS announcement and holding were adapted to the prevailing regulation and mechanism of GMS order. In addition, the Company also completed Board of Commissioners Manual, Board of Directors Manual and Nomination and Remuneration Committee Manual in The Company also adjusted its Website, a major gateway for stakeholders to access the Company's information, to comply with OJK Regulation. In order to ensure an effective GCG implementation, in 2015 the Company made adjustments to the Committees under the Board of Directors. Disciplinary Committee under Board of Directors was developed into the Disciplinary and Compliance Committee. The Board of Directors also added 1 (one) new Committee, i.e. Risk Management and Insurance Committee. The Company expects the adjustments to the Committees will encourage a more proper and effective implementation of GCG in the Company. Detailed information on this GCG implementation can be found in the Corporate Governance chapter. BOARD OF DIRECTORS' COMPOSITION The Annual General Meeting of Shareholders (AGMS) on June 5, 2015 at the Hotel Holiday Inn Jakarta Kemayoran decided to approve the change to the Board of Directors, i.e: to appoint E. David Satria Soetedja as Vice President Director replacing Tjahjana Setiadhi; to appoint Sadayoshi Shinotsuka, Michitaka Goto and Mohamad Amien respectively as Director for the term of office up to the closing of the AGMS in The AGMS also reappointed other Directors who finished his term of office in 2015 with a term of office up to the closing of the 2017 AGMS. The Board of Directors extends our thanks and appreciation to Tjahjana Setiadhi, Yoshiki Inoue and Yasushi Kawamoto for having done a good job in executing their duties. The number and composition of the Board of Directors are already in accordance with the OJK regulation No. 33/POJK.04/2014. Complete details on the composition and profile of the Board of Directors can be found in the chapter describing about the Board of Commissioners and Board of Directors composition. APPRECIATION TO STAKEHOLDERS On behalf of the Board of Directors, we would like to express our sincere thanks and appreciation to all employees and partners who have contributed to the Company's sustained development up to date. Our gratitude is also extended o for the support of all Customers, Suppliers, Principals, Shareholders, Board of Commissioners, committees and all Stakeholders. The Board of Directors expects this strong cooperation can be continuously enhanced in order to make changes and improvements for us all on an ongoing basis. Board of Directors MAMPEI CHIYODA President Director E. DAVID SATRIA SOETEDJA Vice President Director

12 PT Asahimas Flat Glass Tbk ANNUAL REPORT BOARD OF DIRECTORS 1. MAMPEI CHIYODA, President Director E. DAVID SATRIA SOETEDJA, Vice President Director 3. NAOMASA TANIGUCHI, Director MITSUHIRO YOSHIKADO, Director 5. SADAYOSHI SHINOTSUKA, Director 6. PRASETYO AJI, Director 7. TJIO FERRY SUSANTO, Director 8. MICHITAKA GOTO, Director 9. MOHAMAD AMIEN, Director 10. TATSUO SUGIYAMA, Director 11. RUSLI PRANADI, Independent Director

13 11 ANNUAL REPORT 2015 PT Asahimas Flat Glass Tbk COMPANY PROFILE THE COMPANY'S NAME AND ADDRESS Head Office & Factory in Jakarta Jl. Ancol IX/5, Ancol Barat Jakarta Utara 14430, Indonesia Tel : (62-21) ( 8 lines ) Fax : (62-21) , Website : Head Office & Factory in Sidoarjo Desa Tanjungsari, Kecamatan Taman Kabupaten Sidoarjo Jawa Timur, Indonesia Tel : (62-31) , Fax : (62-31) , Head Office & Factory in Cikampek Bukit Indah Industrial Park, Sektor IA Blok J-L, Cikampek Jawa Barat, Indonesia Tel : (62-264) ( hunting) Fax : (62-264)

14 PT Asahimas Flat Glass Tbk ANNUAL REPORT COMPANY PROFILE BRIEF HISTORY OF THE COMPANY A. Establishment The Company is a Foreign Investment Company (PMA) that was established under the name PT Asahimas Flat Glass Co. Ltd based on Notarial Deeds No.4 dated October 7, 1971, and No. 9 dated January 6, 1972 passed before Koerniatini Karim, Notary in Jakarta. The Deeds were already approved by the Minister of Justice of the Republic of Indonesia by virtue of Decree No.J.A.5/5/19 dated January 17, 1972 and published in the State Gazette No. 18 dated March 3, 1972 and its Supplement No. 83/1972. B. Amendments to Articles of Association The Company's Articles of Association have been amended several times, i.e. the Changed of the Company's name from PT Asahimas Flat Glass Co., Ltd., to become PT Asahimas Flat glass Tbk based on Notarial Deed no. 73 dated June 26, 1998 that was passed before Amrul Partomuan Pohan SH, LL.M, notary in Jakarta, and approved by Indonesian Ministry of Justice with the Decree no. C HT Th.98 dated August 25, 1998 and published in the State Gazette no dated November 24, 1998, Supplement No. 94/1998. The expansion of the Company's business activity in the glass industry and export import, as set forth in Notarial Deed No. 54 dated May 28, 2003 executed before Amrul Partomuan Pohan SH, LL.M, Notary in Jakarta, and was approved by the Minister of Law and Human Rights of the Republic of Indonesia by virtue of Decree No. C HT TH.2003 dated June 24, 2003 and was published in the State Gazette No dated August 26, 2003 and its supplement No. 68/2003. The Company's Articles of Association were already adjusted to Law No. 40/2007 regarding Limited Liability Companies as set forth in Notarial Deed No. 1, dated July 1, 2008 passed before Dr. Amrul Partomuan Pohan SH, LL.M, notary in Jakarta and approved by the Minister of Law and Human Rights of the Republic of Indonesia by virtue of Decree No. AHU AH year 2008 dated July 17, 2008, published in the State Gazette No. 84 dated October 17, 2008 and its supplement No /2008. The Company's Articles of Association were already adjusted to Bapepam & LK Regulation No. IX.J.1 concerning Main Substances of Articles of Association of the Company Performing Public Offering of Equity Security and Publicly Listed Company as set forth in the Notarial Deed No. 19, dated February 27, 2009 passed before Dr. Amrul Partomuan Pohan SH, LL.M, notary public in Jakarta and approved by the Minister of Justice and Human Rights of the Republic of Indonesia by virtue of Decree No. AHU-.AH Year 2009 dated March 19, 2009, published in the State Gazette No. 36/2009 and its supplement No. 317/2009. The most recent amendment to the Company's Articles of Association was set forth in the Notarial Deed No. 45 dated June 5, 2015 by Dr. Irawan Soerodjo SH. MSi. regarding amendments to and representation of the Company's Articles of Association, including to comply with Otoritas Jasa Keuangan, The Deed was already approved by the Minister of Law and Human Rights No. AHU-AH dated June 30, 2015, while the publication of the Deed in the State Gazette was still under process. C. Change of Status to become Public Company Based on the Statement Letter of the Chairman of Capital Market Supervisory Agency ( Bapepam ) No. S-1323/PM/1995 dated October 18, 1995, the Company initiated public offering of 86,000,000 shares and since December 18, 2000 all of the Company's shares have been listed on Bursa Efek Jakarta (now Bursa Efek Indonesia). THE COMPANY'S BUSINESS ACTIVITIES AND PRODUCTS Based on its Articles of Association, the Company's intention and objectives are to establish and run glass industry as well as export-import and quality certification of glass. The Company's products are divided into 2 categories: Flat Glass including Mirror Glass Safety Glass including Automotive Glass

15 13 ANNUAL REPORT 2015 PT Asahimas Flat Glass Tbk COMPANY PROFILE THE COMPANY S ORGANIZATIONAL STRUCTURE Board of Commissioners Nomination & Remuneration Committee Audit Committee Board of Directors Risk Management & Insurance Committee Discipline & Compliance Committee Internal Audit Patikkos Siahaan Corporate Secretary Christoforus Flat Glass General Division Corporate Automotive Glass General Division Purchase & Logistic Center E. David Satria Soetedja Corporate Affairs Christoforus Sales & Marketing Center Andreas S. Wirawan Engineering Center Andreas Andre Corporate MIS Dadang Sudrajat Quality Assurance Center Sutrisno Sales & Marketing Center M. Amien Corporate Control & Finance Bama S. Hadi Cikampek Factory Samuel N. Setyono Production Planning & Order Control Office M. Amien Corporate HRD & Administration Tjio Ferry Susanto Quality Assurance Office Sander Liberti Sembiring Corporate HSE Coordination E. David Satria Soetedja Jakarta Factory Richard Andre S. Sidoarjo Factory Lilik Roesianto

16 PT Asahimas Flat Glass Tbk ANNUAL REPORT COMPANY PROFILE VISION AND MISSION To build the world a better place for living To become a respectable manufacturer and global supplier of glass and its related products. The Company's Values of Conduct 1. Pioneering Spirit 2. Honesty and Sincerity 3. Cooperation Spirit 4. Creative Thinking 5. Responsible MISSION VISION BOARD OF COMMISIONERS AND BOARD OF DIRECTORS BOARD OF COMMISSIONERS AND BOARD OF DIRECTORS APPOINTMENT IN 2015 Composition of the Board of Commissioners and the Board of Directors based on Notarial deed No.44 dated June 5, 2015 by Dr.Irawan Soerodjo SH, Msi is as follows: Board of Commissioners: President Commissioner : TAN PEI LING Vice President Commissioner : MASAHIRO TAKEDA Commissioner : TJAHJANA SETIADHI Commissioner : TAKEO TAKEI Independent Commissioner : BENYAMIN SUBRATA Independent Commissioner : HIDEYA TANAKA Masahiro Takeda, Vice President Commissioner Started his career at Asahi Glass Co., Ltd., Japan (AGC) in 1982 and was appointed as Vice President Commissioner based on the Company's Annual GMS (AGMS) dated July 5, 2015 replacing Kimikazu Ichikawa. Tjahjana Setiadhi, Commissioner Started his career at the Company in 1976 and was appointed as Commissioner based on the Company's AGMS dated June 5, 2015 replacing Andi Purnomo. E. David Satria Soetedja, Vice President director Started his career at the Company in1982 and was appointed as Vice President Commissioner based on the Company's AGMS dated July 5, 2015 replacing Tjahjana Setiadi. Director President Director Vice President Director Director Director Director Director Director Director Director Director Independent Director : MAMPEI CHIYODA : E. DAVID SATRIA SOETEDJA : NAOMASA TANIGUCHI : MITSUHIRO YOSHIKADO : SADAYOSHI SHINOTSUKA : PRASETYO AJI : TJIO FERRY SUSANTO : MICHITAKA GOTO : MOHAMAD AMIEN : TATSUO SUGIYAMA : RUSLI PRANADI Sadayoshi Shinotsuka, Director Started his career at the Asahi Glass Co., Ltd. Japan (AGC) in 1986 and was appointed as Director based on the Company's AGMS dated July 5, 2015 replacing Yoshiki Inoue. Michitaka Goto, Director Started his career at the Asahi Glass Co.,Ltd.,Jepang (AGC) in 1990 and was appointed as Director based on the Company's AGMS dated July 5, 2015 replacing Yasushi Kawamoto. Mohamad Amien, Director Started his career at the Company in1990 and was appointed as Director based on the Company's AGMS dated July 5, 2015 replacing E. David Satria Soetedja.

17 15 ANNUAL REPORT 2015 PT Asahimas Flat Glass Tbk COMPANY PROFILE BOARD OF COMMISSIONERS' PROFILE Tan Pei Ling, President Commissioner Indonesian citizen, born in Jakarta in Graduated from the University of Portland, Oregon, USA and earned Bachelor of Business Administration in Started his career at PT Rodamas in Served as the Company's Commissioner from 1989 to His first appointment as President Commissioner was legally based on resolution of the AGMS held on June 6, 2008 replacing Tan Siong Kie. He is affiliated with the Company's shareholder by serving as Commissioner of PT Rodamas, one of the Company's majority shareholders. Masahiro Takeda, Vice President Commissioner Japanese citizen, born in Japan in Graduated from the Faculty of Law of Osaka University, Japan. He has been working with Asahi Glass Co.Ltd, Japan (AGC) since 1982 up to the present. His first appointment as President Commissioner was legally based on the Company's AGMS dated June 5, 2015 replacing Kimikazu Ichikawa. He is affliated with the Company's shareholder as employee of Asahi Glass Co Ltd, Japan, one of the Company's majority shareholders. Tjahjana Setiadhi, Commissioner Indonesian citizen, born in Cirebon in Graduated from the Faculty of Physical Engineering, Institut Teknologi Bandung (ITB). Joined the Company in 1976, served as Director of the Company from 1997 to 2010.and as Vice President Director up to His first appointment as the Company's Commissioner was legally based on the AGMS dated June 5, 2015 replacing Andi Purnomo. He is not affiliated with members of the Company's Board of Directors, Board of Commissioners and shareholders. Takeo Takei, Commissioner Japanese citizen, born in Tokyo in Graduated from Hitotsubashi University, majoring in Economics, in 1984 and earned Master of Business Administration from University Michigan Ann Arbor in He has joined AGC since 1984 up to the present. His first appointment as President Commissioner was legally based on the Company's AGMS dated June 22, 2012 replacing Masahiro Takeda. He is affliated with the Company's shareholder as the employee of Asahi Glass Co. Ltd, Japan, one of the Company's majority shareholders. Benyamin Subrata, Independent Commissioner Indonesian citizen, born in Jakarta in Graduated from the University of Sussex, majoring in Mechanical Engineering in He joined GUnungSweu Group in 1983, handled Construction business, property, finance, ritel, manufacture, minings and elecricity. Currently, he also serves in several other companies including as President Commissioner of PT Puri Usaha Kencana and PT Puru Energi kencana and also as Commissioner of PT Intidaya Prima Kencana. His first appointment as the Company's Independent Commissioner was legally based on the Company's EGMS dated November 9, He is not affiliated with members of the Company's Board of Directors, Board of Commissioners and shareholders.

18 PT Asahimas Flat Glass Tbk ANNUAL REPORT COMPANY PROFILE Hideya Tanaka, Independent Commissioner Japanese citizen, born in Chiba, Japan in Graduated from Nagoya Institute of Technology, Faculty of Mechanical Engineering in Currently, he also serves as President Director of PT Panel Bakti Sinarindo. His first appointment as Independent Commissioner was legally based on the Company's AGMS dated November 9, He is not affiliated with members of the Company's Board of Directors, Board of Commissioners and shareholders. Trainings attended by Board of Commissioners Members On October 2, 2015, several members of the Company's Board of Commissioners attended Competition Law Training Seminar organized by AGC Japan in Jakarta. BOARD OF DIRECTORS' PROFILE Mampei Chiyoda, President Director Japanese citizen, born in Kyoto, Japan, in Graduated from Faculty of Economics, Tohku University, Japan, in He has been working with Asahi Glass Co., Ltd., Japan since 1986 up to the present. His first appointment as President Director was legally based on the Company's AGMS dated May 31, 2013 replacing Masato Oe. He is not affiliated with members of the Company's Board of Directors, Board of Commissioners and shareholders. As President Director, he is responsible for leading and coordinating activities and duties of the Board of Directors members in general. E. David Satria Soetedja, Vice President Director Indonesian citizen, born in Jakarta in Graduated from Trisakti University, majoring in Mechanical Engineering in He has been working with the Company since 1985 up to the present. His first appointment as Vice President Director was legally based on the Company's AGMS dated June 5, 2015 replacing Tjahjana Setiadi. He is not affiliated with members of the Company's Board of Directors, Board of Commissioners and shareholders. As Vice President Director, he is responsible for helping organize activities and duties of the Company's Board of Directors members in general. He is also responsible for overseeing Purchase & Logistic Center and Corporate Health Safety & Environment activities. Naomasa Taniguchi, Director Japanese citizen, born in Shiga, Japan Graduated from School of Engineering, Kyoto University, in He has been working with Asahi Glass Co., Ltd., Japan since 1988 up to the present. His first appointment as Vice President Director was legally based on the Company's AGMS dated June 20, 2014 replacing Takashi Hirorutsu. He is affliated with the Company's shareholder as the employee of Asahi Glass Co. Ltd, Japan, one of the majority shareholders. As Director, he is responsible for managing and overseeing the activities of Automotive Glass Business Unit that is located in Cikampek.

19 17 ANNUAL REPORT 2015 PT Asahimas Flat Glass Tbk COMPANY PROFILE Mitsuhiro Yoshikado, Director Japanese citizen, born in Kochi, Japan Graduated from Kochi National College of Technology in He has been working the Asahi Glass Co. Ltd., Japan since 1982 up to the present. His first appointment as Director was legally based on the Company's AGMS dated May 31, 2013 replacing Mampei Chiyoda. He is affliated with the Company's shareholder as the employee of Asahi Glass Co., Ltd, Japan, one of the Company's majority shareholders. As Director, he is responsible for managing Flat Glass Business Unit in Jakarta. Sadayoshi Shinotsuka, Director Japanese citizen, born in Chiba, Japan Graduated from Kisarazhu National College of Technology in He has been working with Asahi Glass Co Ltd., Japan since 1986 up to the present. His first appointment as Director was legally based on the Company's AGMS dated June 5, 2015 replacing Yoshiki Inoue. He is affliated with the Company's Shareholder as the employee of Asahi Glass Co. Ltd, Japan, one of the Company's majority shareholders. As Director, he is responsible for overseeing and carrying out the activities of Flat Glass Factory construction in Cikampek. Prasetyo Aji, Director Indonesian citizen, born in Rembang, Central Java in Graduated from Institut Teknologi Sepuluh Nopember (ITS) Surabaya, majoring in Chemical Engineering in He has been working with the Company since 1986 up to the present. His first appointment as Director was based on the Company's EGMS dated June 3, 2005 replacing Soleh Dagusthani. He is not affiliated with members of the Company's Board of Directors, Board of Commissioners and shareholders. As Director, he is responsible for managing and overseeing the activities of Automotive Glass Business Unit which is located in Cikampek and helping in the Flat Glass Factory construction project in Cikampek. Tjio Ferry Susanto, Director Indonesian citizen, born in Jombang, in Graduated from Petra Christian University.. He has been working with the Company since 1986 up to the present. His first appointment as Director was legally based on the Company's AGMS dated June 24, He is not affiliated with members of the Company's Board of Directors, Board of Commissioners and shareholders. As Director, he is responsible for managing and overseeing the activities of Flat Glass Business Unit located in Sidoarjo and Corporate HRD & Administration and Corporate MIS. Michitaka Goto, Director Japanese citizen, born in Oita, Japan Graduated from Kyushu University in He has been working with Asahi Glass Co., Ltd., Japan since 1990 up to the present. His first appointment as Director was legally based on the Company's AGMS dated June 5, He is affliated with the Company's Shareholder as the employee of Asahi Glass Co. Ltd, Japan, one of the Company's majority shareholders. As Director, he is responsible for managing and overseeing the Company's financial activities.

20 PT Asahimas Flat Glass Tbk ANNUAL REPORT COMPANY PROFILE Mohamad Amien, Director Indonesian citizen, born in Pagar Alam, Palembang in Graduated from Trisakti University, majoring in Electrical engineering in He has been working with the Company since 1990 up to the present. His first appointment as Director was based on the Company's AGMS dated June 5, 2015 replacing David Satria Soetedja. As Director, he is responsible for managing flat glass sales and marketing activities. He is also responsible for Flat Glass and Automotive Glass quality assurance. Tatsuo Sugiyama, Director Japanese citizen, born in Japan in Graduated from Nagoya University in 1986 and earned his Master of Chemical Engineering. He has been working with Asahi Glass Co., Ltd., Japan since 1990 up to the present. His first appointment as Director was legally based on the Company's AGMS dated June 20, 2014 replacing Hiroaki Aimu. He is affliated with the Company's shareholder as the employee of Asahi Glass Co., Ltd., Japan, one of the Company's majority shareholders. As Director, he for responsible in acting as a liaison of Asahi Glass Co Ltd., Japan, the Company's majority shareholder, with the Company. Rusli Pranadi, Independent Director Indonesian citizen, born in Jakarta in Graduated from STIE (School of Economics), majoring in Accountancy in 1993 and passed the State Examination for Accountant Profession in 1995 and earned State Register as an Accountant numbered D He has been joining with the Company since 1981 up to the present. His first appointment as Director was based on the Company's AGMS dated June 24, 2011 and was appointed a Independent Director based on the Company's AGMS dated June 20, He is not affiliated with members of the Company's Board of Directors, Board of Commissioners and shareholders. As Independent Director, he is responsible for managing and overseeing Corporate Affairs activities. Training attended by the Board of Directors Throughout 2015, several members of the Board of Directors attended various trainings, workshops, seminars as follows: No Name Position Training Materials Venue & Time Organizer 1 Mampei Chiyoda President Director Global Leadership Session, To Level - Up Management Skill Japan, 1-2 December 2015 Asahi Glass Co.Ltd., Japan 2 Naomasa Taniguchi Director Protecting Your Brand with Trademark Cikampek, 7 April 2015 Asahi Glass Co.Ltd., Japan 3 Naomasa Taniguchi Director Quality Management System Jakarta, 12 November 2015 Asahi Glass Co.Ltd., Japan 4 Rusli Pranadi Independent Director Corporate Governance Jakarta, August 2015 Otoritas Jasa Keuangan 5. Several BOD members Director ISO Jakarta, 12 November 2015 BSI Group 6. Several BOD members Director Competition Law Training Seminar Jakarta, 12 October 2015 Asahi Glass Co.Ltd., Japan

21 19 ANNUAL REPORT 2015 PT Asahimas Flat Glass Tbk COMPANY PROFILE CHANGES TO THE BOARD OF COMMISSIONERS AND BOARD OF DIRECTORS COMPOSITION AFTER THE FINANCIAL Up to the end of the financial year and the time limit for the 2015 Annual Report submission, there was no change to the Company's Board of Commissioners and/or Board of Directors. HUMAN RESOURCES AND HR DEVELOPMENT In line with the Company's vision "To become a respectable manufacturer and global supplier of glass and its related products", the Company should have human resources (HR) that are competent, qualified and fit with its business needs. The Company believes that human resources are the main asset in supporting its business success, as reflected in the manual business policy: "Employees are the Source of the Company's Strength". As the Company's assets, employees must be able to uphold the values that have been fostered by the founders of the Company, namely: The Pioneering Spirit, Honesty and Sincerity, The Spirit of Cooperation, Creative Thinking and Be Responsible. The Company believes that implementation of the noble values will generate reliable human resources and produce high quality products and services in realizing customer satisfaction. Competency Development In realizing those expectations, the Company through Training and Monozukuri Center (TMC) under the Corporate HR and Administration has arranged and implemented an integrated and sustainable human resource development program through a number of activities that have been arranged in the syllabus materials made by TMC, which consisting of continuous coaching, training and development programs related to ability, knowledge and leadership. Such activities are expected to improve human resource capabilities and prepare the Company's future leaders. In 2015, the Company conducted several human resource development programs, among others: 1. Performing Group Improvement Activities (GIA) as a tool to achieve Key Performance Indicator (KPI) for the employees. This event was attended by all employees. GIA is divided into three (3) activities, namely: (i) Kaizen Theme Activity (ii) Innovation Theme Activity (iii) Asahimas Improvement System Several groups were selected to represent the Company to participate in the Kaizen Convention activities in several automotive companies in Indonesia. In addition, the Company also sent representatives to participate in the Kaizen competition in Japan, which was attended by all representatives of the AGC Kaizen Group of several countries. 2. Conducting training to increase technical skills of employees guided by experienced staff both local and expatriate. To support the training, the Company has in place Skill Simulator facilities related to the production and the supporting equipment, to facilitate the employees in the learning process. In 2015, the training was focused to support the construction of the new flat glass in Cikampek.

22 PT Asahimas Flat Glass Tbk ANNUAL REPORT COMPANY PROFILE 3. Continuous trainings starting from recruitment up to retirement preparation with a view to enhance knowledge, skills and motivation of employees. The Basic Discipline Training was provided for new employees to strengthen disciplinary culture in the Company. 4. Attended training, workshops and seminars at home and abroad on the basis of management, communication, finance, quality, human resources, supply chain management, and others. 5. To increase awareness of Occupational Health and Safety (K3) for all employees, the Company provided trainings through Safety Hazard Simulator, Safety Patrol Simulator for line managers. The Company periodically sent its line managers to Japan to participate in the Safety Training of Key Persons organized by AGC Japan. This training was very valuable for the employees because they could enjoy benefits not only at work but also in everyday life. The Company regularly provided training to deal with emergencies such as fire, earthquake, tsunami, and others. 6. The Company continued to provide leadership training at every position level in the Company. This activity aims to prepare a cadre of the Company's future leaders through activities such as Team Building, Outbound and Leadership training. 7. The Company also paid attention to the employees entering retirement by giving independent business training and retirement preparation. The training aimed to give the Company's retiring employees adequate mental and skill preparation for their retirement. All activities were carried out at each factory of the Company in Jakarta, Sidoarjo and Cikampek. The Company believes that a harmonious relationship between the Company and employees is one of the main factors to support its business progress. As of December 31, 2015, the number of the Company's permanent employees was 2,789 persons. SHAREHOLDERS NAME AND SHAREHOLDING PERCENTAGE Shareholders with 5% or above share ownership as of 31 December No. Name Total Share 1 Asahi Glass Co.,Ltd., Japan 190,359,000 2 PT Rodamas, Indonesia 177,758,700 Percentage 43.86% 40.96% Shareholdings by Members of the Board of Directors and Board of Commissioners As of December 31, 2015 As of December 31, 2015, there was no member of the Board of Commissioners who owned the Company's shares, while a member of the Board of Directors namely Mitsuhiro Yoshikado, the Company's Director, owned 20,000 shares or 0.005% of the total issued shares. Public Shareholders, Each with Less Than 5% Share Ownership As of December 31, 2015, public shareholders, each with less than 5% share ownership, amounted to 688 shareholders or 15.18% consisting of legal entities and individuals both at home and from abroad. INFORMATION ON MAJORITY SHAREHOLDER AND CONTROLLING SHAREHOLDER 1. Asahi Glass Co., Ltd. ("AGC") AGC, the owner of 43.86% shares in the Company, is domiciled in Marunouchi, Chiyoda-ku, Tokyo Japan. AGC is a public company in Japan, which was listed on the Tokyo Stock Exchange and Osaka Stock Exchange. Established in 1907, the Company has evolved into the most prominent multinational glass producer in the world market for building glass, automotive glass, display glass and other related products. At present, aside from glass industry, AGC Group also engages in fluorine chemical, electronics and energy development industries. AGC Group has global networks and affiliations spreading across more than 30 countries. 2. PT Rodamas PT Rodamas, the owner of 40.96% shares in. the Company, is domiciled on Jalan Let. Jend. S. Parman Kav 32-34, Slipi, Jakarta 11480, Indonesia. Established in 1955, PT Rodamas engages in various lines of business in Indonesia with a focus on the manufacturing industry and the distribution of industrial and consumer products. Rodamas Group controls a vast and important marketing network spreading all over the country and covering various fields such as consumer products, building materials, chemical products, packaging and glass cutter.