PT Ciputra Development Tbk And Subsidiaries

PT Ciputra Development TbkAnd SubsidiariesConsolidated Financial StatementsFor Nine Months Ended 30 September 2006 And 2005(Indonesian Currency)

PT CIPUTRA DEVELOPMENT Tbk AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF INCOMEFor Nine Months Ended 30 September 2006 and 2005(In Rupiah)Note 2006 2005REVENUES 2m,20Net sales 736,932,310,379 508,090,606,060Operating revenues 232,503,904,281 202,434,932,071Total 969,436,214,660 710,525,538,131COST OF SALES AND DIRECT COST 2m,21Cost of sales 428,506,177,160 308,018,808,800Direct cost 84,727,160,510 73,198,297,729Total 513,233,337,670 381,217,106,529GROSS PROFIT 456,202,876,990 329,308,431,602OPERATING EXPENSES 2m,22Selling 38,978,839,212 43,378,223,746General and administrative 151,547,129,746 129,533,182,133Total 190,525,968,958 172,911,405,879INCOME FROM OPERATIONS 265,676,908,032 156,397,025,723OTHER INCOME (CHARGES)Interest and other financing charges 2n ( 25,624,474,986 ) ( 24,037,034,229 )Loss on foreign exchange – net 2p ( 3,540,526,010 ) ( 552,872,100 )Interest income 20,717,339,610 8,697,946,480Gain (loss) on investments 2e 5,271,760,376 ( 3,096,839,888 )Equity in net income of associated companies 2e 18,980,851 1,248,357,986Others – net 16,844,725,770 13,861,120,999Other Income (Charges) – Net 13,687,805,611 ( 3,879,320,752 )INCOME BEFORE INCOME TAX 279,364,713,643 152,517,704,971INCOME TAX EXPENSES 2r,13Current ( 83,817,204,200 ) ( 44,070,860,797 )Deferred (725,984,711 ) ( 1,901,623,003 )Income Tax Expenses ( 84,543,188,911 ) ( 45,972,483,800 )INCOME FROM NORMAL ACTIVITIES 194,821,524,732 106,545,221,171EXTRAORDINARY ITEMS – NET OF TAX 2o,23,26 477,712,782,983 -INCOME BEFORE MINORITY INTERESTS 672,534,307,715 106,545,221,171MINORITY INTERESTS 2b,18 ( 106,447,273,740 ) ( 54,613,010,310 )NET INCOME 566,087,033,975 51,932,210,861EARNINGS PER SHARE 2v,24Income from operations 84 97Net income 178 32See accompanying Notes to Consolidated Financial Statements which are an integral part of the consolidated financial statements.3

PT CIPUTRA DEVELOPMENT Tbk AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (CAPITAL DEFICIENCY)For Nine Months Ended 30 September 2006 Dan 2005(In Rupiah)Transaction Stockholders’Difference in EquityAdditional Equity Changes Translation (Capital Deficiency)Note Capital Stock Paid-in Capital of Subsidiaries Adjustments Deficits – NetBalance, 1 January 2005 806,250,000,000 21,937,051,260 104,204,421,959 51,306,207,949 ( 1,207,971,609,160 ) ( 224,273,927,992 )Transaction difference in equity changes of a subsidiary 2e - - 33,027,947,845 - - 33,027,947,845Translation adjustment 2c - - - 4,847,412,326 - 4,847,412,326Net income - - - - 51,932,210,861 51,932,210,861Balance, 30 September 2005 806,250,000,000 21,937,051,260 137,232,369,804 56,153,620,275 ( 1,156,039,398,299 ) ( 134,466,356,960 )Balance, 1 January 2006 806,250,000,000 21,937,051,260 147,419,195,613 56,706,570,260 ( 1,128,740,563,211 ) ( 96,427,746,078 )Debt to equity conversion 26 1,153,638,456,000 - - - - 1,153,638,456,000Debt settlement through assets (investments in subsidiaries)transfer 1c,26 - - 67,589,397,132 ( 41,094,391,054 ) - 26,495,006,078Transaction difference in equity changes of subsidiaries 2e - ( 10,814,400,171 ) ( 10,197,150,620 ) - - ( 21,011,550,791 )Net income - - - - 566,087,033,975 566,087,033,975Balance, 30 September 2006 1,959,888,456,000 11,122,651,089 204,811,442,125 15,612,179,206 ( 562,653,529,236 ) 1,628,781,199,184See accompanying Notes to Consolidated Financial Statements which are an integral part of the consolidated financial statements.4

PT CIPUTRA DEVELOPMENT Tbk AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSFor Nine Months Ended 30 September 2006 and 2005(In Rupiah)2006 2005CASH FLOWS FROM OPERATING ACTIVITIESCash received from customers 726,065,861,525 1,003,177,133,002Cash received from (paid for):Contractors, suppliers and others ( 432,539,947,512 ) ( 429,542,976,427 )Income and other taxes ( 75,442,067,364 ) ( 50,672,391,652 )Salaries and employees’ benefit ( 65,890,761,693 ) ( 64,139,766,586 )Interest and others financial charges ( 30,074,193,237 ) ( 29,750,551,761 )Other operating expenses ( 97,156,218,657 ) ( 99,689,073,777 )Net Cash Provided by Operating Activities 24,962,673,062 329,382,372,799CASH FLOWS FROM INVESTING ACTIVITIESInterest income 20,717,339,610 8,688,341,302Withdrawal of restricted funds – net 10,359,508,518 9,153,245,429Acquisition of property and equipment ( 36,555,214,220 ) ( 145,665,802,543 )Increase (decrease) in investments – net ( 31,573,286,486 ) 13,009,450,335Capital contribution from minority party - 16,800,000,000Net Cash Used in Investing Activities ( 37,051,652,578 ) ( 98,014,765,477 )CASH FLOWS FROM FINANCING ACTIVITIESReceipt of bank loan 2,000,000,000 20,205,285,500Payment of:Bank loans ( 53,699,577,753 ) ( 58,601,824,000 )Related parties ( 2,891,939,594 ) ( 4,456,561,823 )Obligation under capital lease - ( 20,205,285,500 )Dividend payment to minority party ( 14,266,936,728 ) ( 23,743,168,710 )Net Cash Used in Financing Activities ( 68,858,454,075 ) ( 86,801,554,533 )NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ( 80,947,433,591 ) 144,566,052,789CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 389,959,331,492 179,292,485,012CASH AND CASH EQUIVALENTS AT END OF PERIOD 309,011,897,901 323,858,537,801Cash and cash equivalents at end of period consists of:Cash on hand 8,307,573,458 6,371,246,599Cash in banks 79,277,966,516 100,034,263,802Time deposits 177,426,357,927 147,153,027,400Bank Indonesia Certificates 44,000,000,000 70,300,000,000Total 309,011,897,901 323,858,537,801See accompanying Notes to Consolidated Financial Statements which are an integral part of the consolidated financial statements.5

PT CIPUTRA DEVELOPMENT Tbk AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSFor Nine Months Ended 30 September 2005 and 2004(In Rupiah)1. GENERALa. The Company’s EstablishmentPT Ciputra Development Tbk (the Company) was established on 22 October 1981 based on Notarial DeedNo. 22 of Hobropoerwanto, SH. The deed of establishment was ratified by the Minister of Justice in itsDecision Letter No. Y.A.5/417/9 dated 4 June 1982 and was published in the State Gazette No. 72,Supplement No. 1131 dated 7 September 1982.The Company’s Articles of Association has been amended for several times, most recently by Notarial DeedNo. 18 dated 3 March 2006 of Tse Min Suhardi, SH, as substitute of Notary Buntario Tigris Darmawa Ng,SH, concerning increase in issued and paid-in capital from Rp 806,250,000,000 to Rp 1,959,888,456,000, orin the amount of Rp 1,153,638,456,000 (2,307,276,912 shares), through debt to equity conversion of USD136,238,338 (see Notes 1b and 26). The changes have been reported to the Minister of Law and HumanRights of Republic Indonesia on 6 March 2006.According to Article 3 of the Company’s Articles of Association, the Company’s scope of activities is toengage in the development and sale of housing (real estate), office spaces, shopping centers and relatedfacilities and industrial estates, and to engage in various services related to the design, development andmaintenance of housing facilities, including but not limited to golf courses, family clubs, restaurants andother recreation centers and their related facilities.The Company’s head office is located at Prof. Dr. Satrio Street Kav. 6, Jakarta. Its real estate projects,namely Perumahan Citra I, II and V, are located in Kalideres, Jakarta.The Company started its commercial operations in 1984.b. Public Offering of the Company’s ShareThe Company has offered its shares to the public through the capital market totaling 50,000,000 shares withpar value of Rp 1,000 per share at the price of Rp 5,200 per share in 1994. In addition, the Company hasalso conducted a Limited Public Offering through Rights Issue I consisting of 250,000,000 shares with parvalue of Rp 500 per share at the price of Rp 1,400 per share in 1996. All the Company’s shares have beenlisted at the Jakarta and Surabaya Stock Exchange in 1994 and 1996, respectively.In 2000, the Company has declared 862,500,000 bonus shares (each holder of 20 existing shares entitled to23 new shares) from additional paid-in capital of Rp 431,250,000,000.On 29 March 2006, as the effective date of the Company’s debt composition plan, the Company has issued2,307,276,912 shares without pre-emptive rights to the creditors. The issuance of new shares was resultedfrom debt to equity conversion of USD 136,238,338 (see Notes 1a and 26).Therefore, up to 30 September 2006, total shares of the Company are 3,919,776,912 shares, including400,000,000 shares of the founding stockholders, with par value of Rp 500 per share.7

PT CIPUTRA DEVELOPMENT Tbk AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)For Nine Months Ended 30 September 2006 and 2005(In Rupiah)President DirectorDirectors: Candra Ciputra: Budiarsa SastrawinataRina Ciputra SastrawinataHarun HajadiJunita CiputraCakra CiputraTulus Santoso BrotosiswojoTanan Herwandi AntoniusAs of 30 September 2006 and 2005, the composition of Audit Committee is as follows:ChairmanMembers: Sindoro Purnomo Hadi: Cosmas BatubaraSony SubrataRemuneration paid to the Company’s and subsidiaries’ directors and commissioners for the nine monthsended 30 September 2006 and 2005 is amounting to Rp 15,048,946,677 and Rp 14,767,870,931,respectively.As of 30 September 2006 and 2005, the Company and its subsidiaries employed a total of 1,623 and 1,522employees, respectively.2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESa. The Basis of Measurement and Presentation of Consolidated Financial StatementsThe following consolidated financial statements are presented in accordance with generally acceptedaccounting principles in Indonesia, which consist of, among others, Statement of Financial AccountingStandards (SFAS) established by the Indonesian Institute of Accountants, Capital Market Supervisory Board(Bapepam) regulations No. VIII.G.7 (revised 2000) concerning “The Guidelines for Presentation of FinancialStatements” and Guidelines for Presentation and Disclosure of Financial Statements for Public ListedCompany Engaged in Real Estate Industry in accordance with circular letter of Head of Bapepam No. SE-02/PM/2002 dated 27 December 2002.The basis of measurement and presentation of the consolidated financial statements is historical cost basis,except for investments in certain securities, which are stated at fair value, inventories and land fordevelopment, which are stated at the lower of cost and net realizable value and investment in shares ofstock, which are accounted for under the equity method. The financial statements are prepared usingaccrual method, except for statements of cash flows.The consolidated balance sheets are prepared using the unclassified method in accordance with SFAS No.44 concerning “Accounting for Real Estate Development Activities”.The consolidated statements of cash flows are prepared using direct method by classifying cash flows intooperating, investing and financing activities.The reporting currency used in the preparation of these consolidated financial statements is IndonesianRupiah.b. Principles of ConsolidationThe consolidated financial statements include the accounts of the Company and subsidiaries as presentedin Note 1c.The consolidated financial statements have been prepared on the basis of entity concept. All significant intercompany accounts, transactions and profit/loss have been eliminated to reflect the financial position andresult of operations as a whole.9

PT CIPUTRA DEVELOPMENT Tbk AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)For Nine Months Ended 30 September 2006 and 2005(In Rupiah)c. Translation Adjustments of Foreign EntitiesThe accounts of Ciputra Development International Finance B.V., a subsidiary, domiciled in Amsterdam, theNetherlands, and PT Ciputra Liang Court, associated company, which is domiciled in Indonesia, were statedin Rupiah based on:Balance sheet accounts - Middle rate at balance sheet date (USD 1 at Rp 9,235 andRp 10,310 in 2006 and 2005, respectively)Income statement accounts - Average rate during the year (USD 1 at Rp 9,533 and Rp 9,738in 2006 and 2005, respectively).The resulting differences arising from the translation of the financial statements are presented as part ofstockholders’ equity.d. Cash EquivalentsCash equivalents consist of time deposits and Certificate of Bank Indonesia with maturity periods not morethan 3 months since the date of placement and not collateralized.e. Investments• Certain SecuritiesTradingIncluded in this classification are investments, which are purchased for immediate resale, normallycharacterized by the high frequency of purchase-and-sale transactions. These investments are made toearn immediate gain from the improvement in the short-term prices of the securities. Investments thatmeet this classification are recorded at fair value. The unrealized gain/loss at balance sheets date iscredited or charged to current operations. The fair value of securities sold determined using the weightedaverage method.• Mutual FundInvestment in mutual fund is stated at net assets value.• Investments in shares of stockInvestment in shares of stock wherein the Company has an ownership interest, directly and indirectly, of20% but not exceeding 50% are accounted for under the equity method, whereby the cost of investment isincreased or decreased by the Company’s share in the net earnings or losses of the associate companysince the acquisition date, and reduced by dividends received.If the associated company (which accounted for under equity method) or subsidiary sale its share orperform any transaction which could affect the associated company’s or subsidiary’s equity to the thirdparties, the Company’s net investments in associated company or subsidiary will be affected. TheCompany recognizes the changes to stockholders’ equity.Investments in shares of stock which its fair value are not readily determinable wherein the Companyhave ownership interest less than 20% are stated at acquisition cost.• PropertyInvestment in property is stated at cost.f. Allowance for Doubtful AccountsAllowance for doubtful accounts is provided based on a review of the condition of each debtor at the end ofperiod. The outstanding receivables are written-off against the respective allowance for doubtful accounts ordirectly from the account at the time management believes that these receivables are determined to bedefinitely uncollectible.10

PT CIPUTRA DEVELOPMENT Tbk AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)For Nine Months Ended 30 September 2006 and 2005(In Rupiah)g. Inventories and Land for DevelopmentInventories of land, residential houses and shop houses under construction and completed residentialhouses and shop houses are stated at the lower of cost or net realizable value. The cost is determined usingthe average method. Expenditures relating to land development and improvement including interests andforeign exchange losses on loans obtained to finance the acquisition, development and improvement of theland incurred prior to the completion stage are capitalized as part of the cost of the land.The inventories of the hotel and restaurant (foods, beverages and others) are stated at the lower of cost ornet realizable value. The cost is determined using the first-in, first-out method (FIFO).Land owned by the Company and subsidiaries for future development is classified as “Land forDevelopment”. Upon the commencement of development and construction of infrastructure, the carryingcost of land will be transferred to the inventories or the appropriate property account.h. Property and EquipmentProperty and equipment, except landrights, are stated at cost less accumulated depreciation. Landrights arestated at cost and not amortized. Depreciation is computed using the straight-line method based on theestimated useful lives of the assets as follows:Buildings : 20 – 40 yearsGolf course : 20 yearsFurniture and fixtures : 5 yearsTransportation equipment : 5 yearsProject and golf equipment : 5 yearsThe cost of repairs and maintenance is charged to operations as incurred; significant renewals andbetterments are capitalized. When assets are retired or otherwise disposed of, their costs and the relatedaccumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in thestatements of income for the period.i. Construction in ProgressConstruction in progress is presented under property and equipment and stated at cost. The expenditures,including the borrowing cost, to finance the development and construction of the projects are capitalized aspart of the cost of the construction in progress. Upon substantial completion of the projects and when theassets are ready for their intended use, the accumulated costs will be transferred to the appropriate propertyaccounts.j. Deferred ChargesAdvertising expenses incurred before the opening of a project were deferred and are being amortized over 5years using the straight-line method.Billboard expenses are amortized over 1-3 years using the straight-line method.k. Reserve for Replacement of Hotel and Club House Operating EquipmentReserve for replacement of hotel and club house operating equipment is determined based on the estimatedreplacement value of the lost or damaged items. The replacement cost of the lost or damaged items isrecorded as a deduction to the reserve accounts.l. Impairment of Assets ValueThe Company and subsidiaries conduct an evaluation to determine whether there is an indication for eventsor changes in circumstance which indicate that its carrying amount may not be fully recovered at eachreporting date. If any such indication exists, the Company and subsidiaries are required to determine theestimated recoverable value of all theirs assets and recognize the impairment in assets value as a loss inthe consolidated statements of income.11

PT CIPUTRA DEVELOPMENT Tbk AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)For Nine Months Ended 30 September 2006 and 2005(In Rupiah)m. Revenues and Expense RecognitionThe Company and subsidiaries recognize revenues from real estate sales using the full accrual method. Therevenue from real estate sales will be recognized in full if all the following conditions are met:• Sale of residential houses, shop houses and other types of buildings, and sales of land wherein the houseor building will be built by the seller. The conditions that should be met consist of:a. The sale is consummated;b. The collectibility of the sales price is reasonably assured;c. The receivable from the sale is not subject to future subordination against other loans which will beobtained by the buyer; andd. The seller has transferred to the buyer the usual risks and rewards of ownership through atransaction representing a sale in substance and the seller does not have a substantial continuinginvolvement with the property.• Sale of land wherein the building will be built by the buyer without the involvement of the seller (retail landsales). The conditions that should be met consist of:a. The payments received from the buyer have reached 20% of the agreed selling price and this amountis non-refundable;b. The collectibility of the sales price is reasonably assured;c. The receivable from the sale is not subject to future subordination against other loans which will beobtained by the buyer;d. The process of land development has been completed that the seller is not obliged to develop the lotssold or to construct amenities or other facilities applicable to the lots sold as provided in theagreement between the seller and the buyer or regulated by law; ande. The sale consists only of the lots of land, without any involvement of the seller in the construction ofthe buildings on the lots sold.If a real estate sale fails to meet all of the above conditions, revenue recognition is deferred and sale isrecognized using the deposit method until all of the conditions are fulfilled.The cost of the land sold is determined on the basis of the acquisition cost of the land plus otherexpenditures relating to its development. The cost of residential houses sold includes all the constructioncosts incurred.Lease rentals by the shopping center tenants, except for anchor tenants, are paid 1 to 5 years in advances,and are recorded under “Unearned Revenues”. These lease rentals are being amortized and recorded asrevenues on a monthly basis. Lease rentals by anchor tenants are paid on a monthly basis and the relatedrevenues earned from these rentals are likewise recognized on a monthly basis.Lease rentals of golf villa units are recognized as revenues based on the respective rental periods of the golfvilla units.The membership registration fees for golf and club house are recognized as revenues upon receipt. Thequarterly or more membership dues for golf and club house received in advance are presented under“Unearned Revenues” account and amortized as revenues based on the periods benefited.Expenses are recognized when incurred (accrual basis).n. Borrowing CostInterests and foreign exchange losses incurred on loans obtained to finance the acquisition, improvementand development of the land are capitalized as part of the cost of the inventories of land and land fordevelopment for real estate, and capitalized as part of the cost of property and equipment and constructionin progress for shopping centers and hotels. Upon the substantial completion of all activities related to thedevelopment of the land or the construction of the facilities and the related property is ready for its intendeduse, the capitalization of interests and foreign exchange losses ceases.o. Troubled Debts RestructuringNet gain on debts restructuring net of related tax effect is recognized in the income statement for the periodas incurred and classified as an extraordinary item, net of all contingent liabilities which arise from therestructuring.12

PT CIPUTRA DEVELOPMENT Tbk AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)For Nine Months Ended 30 September 2006 and 2005(In Rupiah)p. Foreign Currency Transactions and BalancesTransactions involving foreign currencies are recorded in Rupiah amounts at the rates of exchangeprevailing at the time the transactions are made. At balance sheet date, monetary assets and liabilitiesdenominated in foreign currencies are adjusted to Rupiah using the Bank Indonesia middle rate of exchangefor export bills prevailing at that date (30 September 2006: USD 1 = Rp 9,325 and 30 September 2005: USD1 = Rp 10,310).q. Transaction with Related partiesThe Company have transactions with related parties. Definition of related parties is in accordance with SFASNo. 7 concerning “Related Party Disclosure”.All transaction with related parties whether or not conducted at terms and conditions similar to those withthird parties are disclosed in the financial statements.r. Income TaxAll temporary differences arising between the tax bases of assets and liabilities and their carrying value forfinancial reporting purposes are recognized as deferred tax using liability method. Currently enacted taxrates are used to determine deferred income tax.Deferred tax assets relating to the fiscal losses carry forward are recognized to the extent that future taxableprofit will be available against it. Amendments to taxation obligations are recorded when an assessment isreceived or, if appealed against, when the results of the appeal are determined.Current tax is recognized based on taxable income for the year, in accordance with the current taxregulations.For revenues subject to final income tax, such as revenue of golf villa unit rental and shopping centersrental, no temporary difference between commercial and tax reporting purposes. If the carrying value ofassets and liabilities which related to the final income tax between commercial and tax reporting is different,it is not recognized as deferred tax assets or liabilities. Expense for tax purpose is recognized proportionallywith the income of the current period.s. Estimated Liabilities of Employee BenefitsShort-term employees’ benefits are recognized at undiscounted amounts when employees has renderedtheir service to the Company during an accounting period.Post employees’ benefits are recognized at measurable amounts using discount rate basis, when anemployee has rendered service to the Company during an accounting period. Liabilities and expenses aremeasured using actuarial techniques which include constructive obligation which arises from the Company’sinformal practices. In computing the liabilities, the benefits should be discounted by using projected unitcredit method.Termination benefits are recognized when, and only when, the Company has commitments to either:a. terminate an employee or group of employees before the normal retirement date; orb. provide termination benefits for employees who received offerings to have voluntary resignation.t. Use of EstimatesThe preparation of the consolidated financial statements is conformity with generally accepted accountingprinciples requires the Company and subsidiaries’ management to make estimates and assumptions thataffect the reported amounts of assets and liabilities at the date of the financial statements and the reportedamount of revenue and expenses during the reporting period. Actual results could be different from theseestimates.u. Segment InformationBusiness segment is reported as primary segment and geographical segment based on the location ofassets is reported as the secondary segment.13

PT CIPUTRA DEVELOPMENT Tbk AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)For Nine Months Ended 30 September 2006 and 2005(In Rupiah)v. Earning per ShareIncome from operation and net income per share are computed by dividing income from operation and netincome, respectively, with the weighted-average number of shares outstanding during the period,3,176,039,299 shares in 2006 and 1,612,500,000 shares in 2005.3. CASH AND CASH EQUIVALENTSThis account consists of:2006 2005Cash on hand - Rupiah 8,307,573,458 6,371,246,599Cash in BankRupiahPT Bank Central Asia Tbk 22,272,395,307 31,527,535,239PT Bank Mandiri (Persero) Tbk 10,602,895,556 10,841,577,522PT Bank NISP Tbk 7,914,778,325 6,479,805,709PT Bank Bukopin Tbk 7,821,199,939 9,333,338,318PT Bank Artha Niaga Kencana Tbk 6,976,947,828 5,064,162,300Citibank, N.A. - 10,361,253,508PT Bank Internasional Indonesia Tbk - 5,252,733,031PT Bank Danamon Indonesia Tbk - 5,232,232,929Others (each below Rp 5 billion) 21,018,571,752 12,699,072,819Sub-total 76,606,788,707 96,791,711,375US DollarOthers (each below USD 500,000)(2006: USD 289,245.03; 2005 USD 314,505.57) 2,671,177,809 3,242,552,427Total Cash in Banks 79,277,966,516 100,034,263,802Time DepositsRupiahPT Bank Internasional Indonesia Tbk 22.395.150.159 34,464,406,605PT Bank Niaga Tbk 18,628,922,692 10,425,000,000PT Bank NISP Tbk 13,284,833,896 8,679,896,145PT Bank Central Asia Tbk 10,000,000,000 -PT Bank Mayapada Tbk 8,500,000,000 5,000,000,000PT Bank Bukopin Tbk 7,500,000,000 24,300,000,000PT Bank Mega Tbk 6,000,000,000 14,533,598,751ABN Amro 5,000,000,000 -PT Bank Danamon Indonesia Tbk 2,581,575,000 10,625,000,000PT Bank Bumiputera Tbk 1,000,000,000 6,000,000,000PT Bank Permata Tbk - 17,444,045,505PT Bank Commonwealth - 5,000,000,000Others (each below Rp 5 billion) 5,500,000,000 6,000,000,000Sub-total 100,390,481,747 142,471,947,006US DollarMorgan Stanley Bank (USD 3,004,152.21) 27,743,364,129 -PT Bank Danamon Indonesia Tbk (USD 3,000,000) 27,705,000,000 -Union Bank of Switzerland (USD 2,216,635.9) 20,470,629,674 -Others (each below USD 500,000)(2006: USD 120,940.16; 2005: USD 454,033.02) 1,116,882,377 4,681,080,394Sub-total 77,035,876,180 4,681,080,394Total Time Deposits 177,426,357,927 147,153,027,400Bank Indonesia Certificates (SBI) 44,000,000,000 70,300,000,000Total 309,011,897,901 323,858,537,80114

امتدح الأستاذ علي عثمان حممدطه النائب الأول لرئيس جمهوريةالسودان الدور الذي تقوم به هيئةالإغاثة الإسالمية العاملية لدعم التنميةواخلدمات يف العديد من دول العاملالإسالمي.‏وبحث النائب الأول لدى لقائه بالأمنيالعام لهيئة الإغاثة الإسالمية العامليةمبكتبه بالقصر اجلمهوري باخلرطومد.‏ عدنان بن خليل باشا السبل الكفيلةبتعزيز الشراكة القائمة بني الهيئةواملجتمع املدين بالسودان اإضافة اإىلتطوير العالقة وتوسيع الربامج الإغاثيةيف خمتلف املجالت.‏وقد عبرب الأميني العام عن ‏شكروتقدير الهيئة للحكومة وللشعب السوداينعلى موقفهم الداعم دوماً‏ لأنشطة الهيئةوبراجمها املتعددة يف السودان.‏ وقالاإن الهيئة تضع يف اأولوياتها التوسع يف‏سفير خادم الحرمين الشريفين في الخرطوم يستقبل الأمين العام د.‏ عدنان باشااملشاريع الإغاثية مبا يخدم العالقاتالثنائية بينها وبني السودان.‏وعقب اللقاء مع ‏سعادة النائب الأولللرئيس السوداين اأدىل د.‏ عدنان باشابتصريح لوسائل الإعلالم السودانيةحتدث فيه عن ‏سبل تطوير العالقة وتقويةالربامج اخليرية والإغاثية والتنمويةوالجتماعية للهيئة بالسودان.‏ وقال:‏ ‏)اإنللهيئة مشاريع كثرة يف السودان،‏ ونفتخرباأننا نكفل حوايل 9 اآلف يتيم ويتيمة يفالسودان كما لنا مشاريع ‏صحية واإغاثية يفدارفور ويف مناطق متعددة من السودان.‏ونرجو من اهلل عز وجل اأن تتمكن الهيئةمن تطوير هذه املشاريع ودعمها وتقويةاأواصر التعاون بني السودان وهيئة الإغاثةالإسالمية العاملية(.‏لقاءات مهمةكما التقى الأميني العام بعدد مناملسوؤولني السودانيني،‏ وسعادة ‏سفرخادم احلرمني الشريفني يف اخلرطومالأستاذ فيصل بن حامد معال.‏وكان الأمني العام للهيئة د.‏ عدنان بنخليل باشا قد قام بزيارة للسودان يف عام‎1431‎ه بدعوة من احلكومة السودانيةاإلغاثة العدد 53 رمضان / شوال 1433 ه 17

PT CIPUTRA DEVELOPMENT Tbk AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)For Nine Months Ended 30 September 2006 and 2005(In Rupiah)6. TRANSACTION AND BALANCE WITH RELATED PARTIESIn the ordinary course of business, the Company and subsidiaries are engaged in financial transactions withrelated parties, wherein such transactions consist of expense charges and non-interest bearing cash borrowingwithout fixed repayment dates.Due to Characteristic Relation 2006 2005PT Ciputra Corpora Having the same stockholders and 54,103,797,225 54,103,797,225management with the CompanyPT Ciputra Adigraha Having the same stockholders and 6,810,368,375 -management with the CompanyPT Apratima Sejahtera Having the same stockholders and 867,659,290 5,320,157,234management with the CompanyTotal 61,781,824,890 59,423,954,459The percentage of due to related parties to total liabilities amounted to 3.4% and 1.3% as of 30 September 2006and 2005, respectively.7. INVENTORIESThe details of inventories are as follows:2006 2005Land lots 2,020,247,409,815 2,528,176,967,053Residential houses and shop-houses under construction 151,167,904,334 154,458,618,295Completed residential houses and shop-houses 188,060,679 2,382,745,943Foods, beverages and others 4,114,819,631 4,656,563,812Total 2,175,718,194,459 2,689,674,895,103Inventories of land lots represent a land area covering approximately 804 hectares and 980 hectares as of30 September 2006 and 2005, respectively.Movement of land lots is as follows:2006 2005Beginning balance 2,498,040,818,411 1,704,301,857,849AdditionsPurchase of land 246,962,620,032 493,588,617,820Reclassification from land for development - 558,998,222,909Interest capitalized 1,592,106,387 7,839,075,948DeductionsCharged to cost of sales ( 364,519,059,074 ) ( 236,550,807,473 )Transferred to the creditor ( 361,829,075,941 ) -Ending Balance 2,020,247,409,815 2,528,176,967,05316

PT CIPUTRA DEVELOPMENT Tbk AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)For Nine Months Ended 30 September 2006 and 2005(In Rupiah)Detail of land for development is as follows:2006 2005Projects Location In hectares In hectaresPerumahan Citra Jakarta 12 61CitraRaya Tangerang 603 597CitraIndah Bogor 19 11Segitiga Emas Jakarta - 3Total 634 672On 30 September 2006, land for development is excluded land for development of PT Cakradigdaya Lokarayaand PT Sarananeka Indahpancar amounting to Rp 381,744,725,993 since the financial statement of thosesubsidiaries are no longer consolidated into the Company’s financial statement (see Notes 1c and 26).In 2005, land for development of Rp 635,013,777,193 has been transferred to inventory of land lots and toproperty and equipment account amounting to Rp 558,998,222,909 and Rp 76,015,554,284, respectively (seeNotes 7 and 10).Total interests capitalized as part of the land for development for nine months ended 30 September 2006 and2005 amounted to Rp 2,857,611,864 and Rp 2,975,771,845, respectively. The related accumulated capitalizedinterests and foreign exchange losses into land for development amounting to Rp 261,112,942,300 andRp 582,848,514,856 as of 30 September 2006 and 2005, respectively.The management of the Company and subsidiaries believe that there are no changes in circumstances thatindicate material impairment of land for Development as of 30 September 2006 and 2005.10. PROPERTY AND EQUIPMENTThe details of property and equipment are as follows:2006Beginning Additions/ Deductions/ EndingBalance Reclassification Reclassification BalanceCostDirect ownershipLandrights 61,083,716,673 1,631,318,111 - 62,715,034,784Buildings 989,195,631,894 23,710,006,489 2,338,124,255 1,010,567,514,128Golf course 44,014,000,552 41,725,000 - 44,055,725,552Furniture and fixtures 72,567,474,054 9,876,082,116 1,314,129,490 81,129,426,680Transportation equipment 9,070,888,769 1,103,246,269 357,914,790 9,816,220,248Project and golf equipment 26,142,275,317 4,461,759,563 108,696,304 30,495,338,5761,202,073,987,259 40,824,137,548 4,118,864,839 1,238,779,259,968Construction in progressBuildings 149,690,584,547 - 145,862,892,378 3,827,692,169Total 1,351,764,571,806 40,824,137,548 149,981,757,217 1,242,606,952,137Accumulated DepreciationDirect ownershipBuildings 227,260,123,208 25,159,595,928 - 252,419,719,136Golf course 20,889,562,031 1,700,979,470 - 22,590,541,501Furniture and fixtures 40,071,801,270 8,024,065,693 2,400,000 48,093,466,963Transportation equipment 5,676,632,341 508,195,740 175,580,606 6,009,247,475Project and golf equipment 18,468,329,104 1,431,986,132 - 19,900,315,236Total 312,366,447,954 36,824,822,963 177,980,606 349,013,290,311Net Book Value 1,039,398,123,852 893,593,661,82618

PT CIPUTRA DEVELOPMENT Tbk AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)For Nine Months Ended 30 September 2006 and 2005(In Rupiah)2005Beginning Additions/ Deductions/ EndingBalance Reclassification Reclassification BalanceCostDirect ownershipLandrights 54,820,543,986 27,014,472 - 54,847,558,458Buildings 730,978,126,860 218,318,772,984 1,267,617,315 948,029,282,529Golf course 44,000,225,552 - - 44,000,225,552Furniture and fixtures 62,382,377,346 13,039,311,032 403,391,612 75,018,296,766Transportation equipment 8,923,138,898 497,746,334 298,943,746 9,121,941,486Project and golf equipment 11,423,930,017 712,629,156 - 12,136,559,173912,528,342,659 232,595,473,978 1,969,952,673 1,143,153,863,964Capital leaseShopping center building 89,086,644,082 - 89,086,644,082 -Construction in progressBuildings 165,583,768,344 4,992,304,088 - 170,576,072,432Total 1,167,198,755,085 237,587,788,066 91,056,596,755 1,313,729,936,396Accumulated DepreciationDirect ownershipBuildings 181,787,524,091 35,874,851,262 1,269,143,736 216,393,231,617Golf course 18,689,378,564 1,466,674,187 - 20,156,052,751Furniture and fixtures 41,847,580,408 9,268,613,642 274,531,632 50,841,662,418Transportation equipment 6,182,638,324 260,841,250 528,589,024 5,914,890,550Project and golf equipment 6,872,881,184 1,075,378,626 - 7,948,259,810255,380,002,571 47,946,358,967 2,072,264,392 301,254,097,146Capital leaseShopping center building 17,817,328,811 - 17,817,328,811 -Total 273,197,331,382 47,946,358,967 19,889,593,203 301,254,097,146Net Book Value 894,001,423,703 1,012,475,839,250The above landrights represent approximately 360.32 hectares with renewable Land Use Rights (HGB) underthe name of the Company and subsidiaries, which will expire on various dates between year 2010 and 2024. TheHGB is extendable upon expiry date.In 2006, construction in progress (CIP) is excluded of CIP owned by PT Ciputra Adigraha (CAG) amountingRp 144,796,404,525 since the CAG’s financial statements is no longer consolidated into the Company’s financialstatements (see Notes 1c and 26).Additions in property and equipment in 2005 mainly arise from the completion of building and infrastructureowned by PT Ciputra Surya Tbk (CS), namely Waterpark theme park, which was started its commercialoperation since August 2005. The acquisition cost of the asset is Rp 129,012,387,025, wherein part of itsamounting to Rp 76,015,554,284 is came from the reclassification of land for development (see Note 9).Depreciation charged to the operations for nine months ended 30 September 2006 and 2005 amounted to Rp33,799,877,895 and Rp 27,812,704,498, respectively.The cost of buildings includes net accumulated capitalized interest of Rp 544,687,165,367 as of 30 September2006 and 2005, respectively.As of 30 September 2006, property and equipment with total net book value of Rp 676,971,861,480 (76%) andRp 57,026,812,543 (65%) consisting of landrights, buildings, golf course and golf equipment owned by certainsubsidiaries such as PT Ciputra Sentra, PT Ciputra Semarang and CS are pledged as collateral for the loansand bonds payable (see Notes 11 and 17).Property and equipment, except for the land rights and golf course, are covered by insurance again risk of fireand other associated risk to certain insurance companies, among others, PT Asuransi Bintang Tbk, PT AsuransiAIU Indonesia, PT Asuransi Central Asia, PT Asuransi Aegis Indonesia, PT Asuransi Himalaya, PT AsuransiAstra Buana, PT Asuransi Allianz Utama and PT Fadent Mahkota Sahid under blanket policies with sum insuredabout USD 145,000 and Rp 2,081,572,725 as of 30 September 2006 and USD 119,402,500 andRp 63,935,650,000 as of 30 September 2005. The management believes that the insured amount is adequate tocover possible losses from such risk.19

PT CIPUTRA DEVELOPMENT Tbk AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)For Nine Months Ended 30 September 2006 and 2005(In Rupiah)The management of the Company and subsidiaries believe that there are no changes in circumstances thatindicate material impairment of the carrying amount of property and equipment as of 30 September 2006 and2005.11. BANK LOANSThis account represents loans obtained from:2006 2005PT Bank Mandiri (Persero) Tbk 136,500,000,000 161,500,000,000Syndicated loans• PT Ciputra Semarang (CSM) 69,165,968,560 88,652,728,400• PT Ciputra Surya Tbk (CS) 1,000,000,000 25,350,000,000PT Bank Tabungan Negara (Persero) 24,732,000,000 32,482,000,000PT Bank Harfa 1,911,120,627 -Total 233,309,089,187 307,984,728,400a. PT Bank Mandiri (Persero) TbkIn 2002, PT Ciputra Sentra (CSN), a subsidiary, obtained investment credit facility from PT Bank Mandiri(Persero) Tbk amounting to Rp 200 billion and bears annual interest at 19.5% for the first month andsubsequently will be adjusted to the respective market interest rate (in 2006: 14% and in 2005: 12%). Thisloan will be due on 31 December 2009.This loan is secured by land, inventories and accounts receivable of shopping center and hotel owned byCSN (see Notes 5 and 10). This loan was used to settle CSN’s loan to Morgan Stanley Emerging Markets,Inc. The repayment of the loan is based on quarterly basis.The loan repayment schedule is as follows:YearTotal Repayment2003 10,000,000,0002004 12,000,000,0002005 22,000,000,0002006 26,000,000,0002007 28,000,000,0002008 44,000,000,0002009 58,000,000,000Total 200,000,000,000Regarding to this loan, CSN is required to comply with several restrictions, among others, CSN is required toobtained prior written consent to:• distribute the dividend;• amend its article of association, the composition of management and stockholders; and• maintain the assets to debt ratio above 120% and debt to capital ratio not less than 233%.CSN has fulfilled the above requirements.b. Syndicated Loans – CSMOn 20 December 2004, CSM, a subsidiary, obtained syndicated loans facility from PT Bank Bukopin(Bukopin) and PT Bank Central Asia Tbk (BCA), with Bukopin act as an agent. Maximum loans facility fromeach bank is amounting Rp 50 billion, or Rp 100 billion in total. This loan was used to refinance the previoussyndicated loans and obligation under capital lease.20

PT CIPUTRA DEVELOPMENT Tbk AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)For Nine Months Ended 30 September 2006 and 2005(In Rupiah)The term period of the loan is 4.5 years or up to 20 June 2009, bears annual interest of 11% for the first 6months and subsequently will be reviewed on monthly basis (in 2006: 15.80% and 2005: 12.60%). Therepayment of the principal and interest are in quarterly basis.The loan repayment schedule is as follows:PeriodPercentage ToTotal Facility2005 10.50%2006 23.50%2007 28.00%2008 31.00%2009 7.00%Total 100.00%These loans are secured by land owned by CSM with total area approximately 16,453 sqm, which located inPekunden Village, Semarang, Central Java, including the related building and irremovable assets which areknown as Ciputra mall and hotel Semarang (see Note 10), fiduciary pledge on accounts receivable to thirdparties and personal guarantee by Mr. Cakra Ciputra.c. Syndicated Loans – CSOn 19 June 2003, CS, a subsidiary, obtained syndicated loans facility. These loans were used to refinancehouses and residential facilities/infrastructure, which had been previously financed by the bonds payable.Details of the loans are as follows:Plafond 2006 2005Bukopin 45,000,000,000 415,600,000 10,363,850,000PT Bank Negara Indonesia (Persero) Tbk (BNI) 45,000,000,000 415,600,000 10,363,850,000BCA 20,000,000,000 168,800,000 4,622,300,000PT Bank Bumiputera Tbk (Bumiputera) 10,000,000,000 - -Total 120,000,000,000 1,000,000,000 25,350,000,000Bukopin and BNI act as the facility and security agents, respectively. This syndicated loans facility will bedue in June 2006 (for Bumiputera) and June 2008 (for Bukopin, BNI and BCA). In 2005, CS had fully paid itsobligation to Bumiputera.These loans are secured by certain property and equipment owned by CS and its subsidiaries (see Note10), and unearned revenue from customers based on land and/or land and building purchase order madebetween CS and its subsidiaries with the customers (future collection). These loans bear annual interest at17.92% for the first month and subsequently will be adjusted to the respective market interest rate (in 2006:15.61%% - 16.02% and in 2005: 13.12% - 13.20%).Regarding to these loans, CS is required to comply with several restrictions, among others, CS is required toobtained prior written consent to:• amend its article of association/ the composition of directors and commissioners;• pledge its assets to others parties;• act as a guarantor of liabilities to other parties;• change its legal status; and• perform merger or acquisition.d. PT Bank Tabungan Negara (Persero)In 2002, PT Ciputra Residence (CR), a subsidiary, obtained working capital loan facility from PT BankTabungan Negara (Persero) (BTN) amounting to Rp 46.5 billion and bears annual interest at 19.5% for thefirst month and subsequently will be adjusted to the respective market interest rate (in 2006: 13% and 2005:13.5%). This loan will be due in April 2009 and secured by Building Use Rights of land with total areaapproximately 54 hectares, located at Cikupa District, Tangerang Regency, owned by CR (see Note 9).21

PT CIPUTRA DEVELOPMENT Tbk AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)For Nine Months Ended 30 September 2006 and 2005(In Rupiah)Regarding to this loan, CR is required to comply with several restrictions, among others, CR is required toobtained prior written consent to:• act as guarantor and or pledge its assets to other parties;• amend its article of association, the composition of management and stockholders;• perform merger or acquisition; and• distribute the dividend.e. PT Bank HarfaOn 23 June 2006, PT Ciputra Surabaya Padang Golf (CSPG), a subsidiary of CS, obtained investment loanfacility from PT Bank Harfa amounting to Rp 2 billion, which was used to purchase 40 units of golf car forCSPG’s operation. This loan will be due in 36 months and bears annual interest at 15.25%. The repaymentof principle and interest are on monthly basis, commenced in July 2006. This loan is secured bycorresponding assets.CSPG is required to comply with several restrictions in accordance to the loan agreement, among others,CSPG is not allowed to change its legal status, perform merger with other company or to amend its article ofassociation and the composition of management.12. OTHER ACCOUNTS PAYABLE – THIRD PARTIESThis account consists of:2006 2005Tenant’s deposits 18,651,678,500 19,817,757,697Debts under restructuring processPrinciple - 1,684,122,210,020Interest - 701,860,122,430Others 9,202,936,098 23,517,369,547Total 27,854,614,598 2,429,317,459,694Debts under restructuring process in 2005 consist of:PrincipalsInterestsUSD Rp RpNotes payable (Floating Rate Notes) 100,000,000 929,000,000,000 432,898,615,760Hillview Enterprise Inc., BVI(ex Bankers Trust International Plc.,London) 32,000,000 297,280,000,000 17,994,730,000Transferable Loans CertificateFacility (TLCF) 25,000,000 232,250,000,000 178,857,796,670Divestment payable• Hillview Enterprise Inc., BVI(ex NTUC Income InternationalPte., Ltd., Singapore) 23,127,590 214,855,311,100 68,680,970,000• Marco Polo Capital Ltd., BVI 1,155,748 10,736,898,920 3,428,010,000Total 181,283,338 1,684,122,210,020 701,860,122,430a. Notes Payable (Floating Rate Notes)In 1995, Ciputra Development International Finance B.V. (CDIF), Amsterdam, the Netherlands, a subsidiary,issued the “Guaranteed Floating Rate Notes Due 2000” (Notes) amounting to USD 100,000,000. TheseNotes would be redeemed at their principal on the last interest payment date, which were due in July 2000and bore annual interest at 2.3% above LIBOR payable semi-annually in advance. These Notes wereguaranteed by the Company and PT Ciputra Sentra (CSN), PT Ciputra Semarang (CSM), PT CiputraResidence (CR), PT Ciputra Surya Tbk (CS), PT Candrasa Pranaguna (CPG), PT Cakradigdaya Lokaraya(CDLR) and PT Cakrawala Respati (CWR), the subsidiaries, as Cross-Guarantor.22

PT CIPUTRA DEVELOPMENT Tbk AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)For Nine Months Ended 30 September 2006 and 2005(In Rupiah)These Notes had been listed in Stock Exchange of Singapore and Luxembourg.Related to the issuance of these Notes, the Company as guarantor also issued 400 put options, wherein theholders could request the Company to repurchase these Notes at the face value on the sixth payment dateof interests, which was due in July 1998. In January 1998, the holders had exercised the put optionstogether with the overdue interest.In Notes holders General Meeting which was held on 11 June 2004, the Notes holders resolved, amongothers, to approve the proposal of the Notes payable settlement as mentioned in Debts ReorganizationTerm Sheet submitted by the Company, and to establish a Steering Committee to represents the Notesholders in regard with the debt settlement plan.b. Hillview Enterprise Inc., BVIIn 1996, the Company entered into Rupiah and interest rate swap agreements with Bankers TrustInternational Plc., (BTI), London, to anticipate the change of the exchange and interest rate of the CD Bondsamounting to Rp 150 billion. Under these agreements, the Company agreed to receive Rp 117.15 billion andto pay USD 50,000,000, which was due on 6 August 2001. The Company also agreed to receive annualinterest with a fixed interest rate of the CD bonds at 18.75% and to pay the floating interest rate at 2.78%above 3 months time deposits in US Dollar at LIBOR with the same due date as the date of the CD Bondsinterest payment.In 2000, BTI and the Company agreed to terminate the swap agreement and it was agreed that theCompany’s payable to BTI was USD 32,000,000. If this payable was not paid by the Company up to 13December 2000, an interest would be charged on such amount up to the full payment of the payable.Based on Debt Sale and Purchase Agreement (DSPA) dated 30 March 2005, BTI has transferred the debtto Hillview Enterprise Inc. (Hillview).c. Transferable Loans Certificate FacilityIn 1996, CDIF issued “Transferable Loans Certificate Facility” amounting USD 25 million which arranged byPT Bank Indonesia Raya Tbk (suspended bank), Cook Island branch, and Societe’ Generale Asia Limited(SGAL), Singapore, with SGAL acted as an agent. These loans would be repaid after 3 years and boreannual interest at 1.90% above LIBOR for first 18 months and 2.25% above LIBOR for the next 18 months,which would be paid semi annually in advance. SGAL had an option to request for the earlier repayment, ifCDIF did not meet the agreed requirements. In 1998, SGAL had requested for the principle repayment,including the related interests and penalties.These loans were guaranteed by the Company, CSN, CS, CR, CPG, CWR, CDLR and CSM, thesubsidiaries. These loans were subsequently lent to PT Sarananeka Indahpancar, a subsidiary, with thesame term and condition applicable to CDIF.d. Divestment PayableIn 1997, the Company entered into a share purchase agreement with NTUC Income International Pte., Ltd.(NII), Singapore, and Pyrite Pte., Ltd. (Pyrite), Singapore, regarding the shares of PT Ciputra Adigraha(CAG), a subsidiary, totaling 19,000,000 shares and 9,500,000 shares, respectively, at price of USD23,127,590 and USD 10,826,123.50, respectively. Advance received from NII and Pyrite amounting to USD23,127,590 and USD 1,155,748, respectively.Based on Sales and Purchase Agreement (SPA) dated 5 November 2003, Pyrite transferred the purchaseright of CAG‘s shares to PT Samuel Financindo Advisory, which subsequently also transferred it to MarcoPolo Capital Ltd. on 25 June 2004.Based on SPA dated 30 March 2005, NII transferred the purchase right of CAG’s shares to Hillview.All of the payable above (point a to d) had been settled by the Company on 29 March 2006, as the effectivedate of debt composition plan (see Note 26).23

PT CIPUTRA DEVELOPMENT Tbk AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)For Nine Months Ended 30 September 2006 and 2005(In Rupiah)13. TAXES PAYABLETaxes payable consists of:2006 2005Estimated income tax payableSubsidiaries 42,202,332,421 17,555,786,692Other income taxes payableArticle 21 738,807,130 346,057,007Article 23 1,426,165,943 1,122,663,554Article 25 343,563,180 1,780,600,674Article 26 2,028,288,012 38,759,261Value-added tax 4,525,255,655 9,586,451,763Development tax I (PB I) 1,053,113,944 1,075,094,861Other taxes 496,839,638 -Total 52,814,365,923 31,505,413,812A reconciliation between income before income tax, as shown in the Consolidated Statements of Income, withestimated taxable income (loss) of the Company for nine months ended 30 September 2006 and 2005 is asfollows:2006 2005Income before income tax per ConsolidatedStatement of Income 279,364,713,643 152,517,704,971Extraordinary items 477,712,782,983 -Income of subsidiaries before income tax ( 189,663,952,106 ) ( 100,640,370,108 )Income before income tax of the Company 567,413,544,520 51,877,334,863Permanent differences:Representation 237,594,325 903,136,279Extraordinary items ( 603,264,178,431 ) -Equity in net loss (earnings) of subsidiariesand associated company ( 100,420,531,363 ) ( 43,868,306,652 )Interest income already subjected to finalincome tax ( 9,518,296 ) ( 11,344,142)Estimated taxable income (loss) of the Company ( 136,043,089,245 ) 8,900,820,348Total of uncompensated tax losses:Year 2001 ( 91,237,735,580 ) ( 91,237,735,580)Year 2004 ( 174,366,713,077 ) ( 174,366,713,077)Year 2005 ( 17,454,490,737 ) -Accumulated tax losses ( 419,102,028,639 ) ( 256,703,628,309 )The Company does not provide allowance for current income tax in 2006 and 2005 because still recordaccumulated tax losses.The estimated income tax payable and computation of provision for income tax of the subsidiaries for ninemonths ended 30 September 2006 and 2005 is as follows:2006 2005Provision for income tax – current periodProgressive rate 73,219,054,580 34,278,252,000Final rate 10,598,149,620 9,792,608,797Sub - total 83,817,204,200 44,070,860,797Prepayments of taxIncome tax article 25 31,016,722,159 16,722,465,308Final income tax 10,148,789,765 9,384,118,390Sub - total 41,165,511,924 26,106,583,69824

PT CIPUTRA DEVELOPMENT Tbk AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)For Nine Months Ended 30 September 2006 and 2005(In Rupiah)2006 2005Estimated income tax payableProgressive rate 42,202,332,421 17,555,786,692Final rate (presented under income taxpayable - article 23) 449,359,855 408,490,407Total 42,651,692,276 17,964,277,099Deferred TaxDeferred tax is computed based on the effect of temporary difference between book value of assets and liabilitiesaccording to the financial statements with tax basis for assets and liabilities. Details of deferred tax assets andliabilities of the Company and subsidiaries are as follows:2006Charged to1 January 2006 Profit and Loss 30 September 2006Deferred tax assetsTax losses 6,212,897,032 ( 1,474,477,017 ) 4,738,420,015Employees’ benefits 1,799,094,547 914,573,827 2,173,668,374Allowance for doubtful accounts 612,236,027 222,078,730 834,314,757Reserve for replacement of hotel operating equipment 342,556,432 155,485,345 498,041,777Total 8,966,784,038 ( 182,339,115 ) 8,784,444,923Deferred tax liabilitiesProperty and equipment 39,854,429,157 543,645,596 40,398,074,753Deferred Tax Liabilities – Net ( 30,887,645,119 ) ( 725,984,711 ) ( 31,613,629,830 )2005Charged to1 January 2005 Profit and Loss 30 September 2005Deferred tax assetsTax losses 9,239,514,639 ( 3,059,283,372 ) 6,180,231,267Employees’ benefits 1,211,424,871 409,398,508 1,620,823,379Allowance for doubtful accounts 708,339,263 56,142,920 764,482,183Reserve for replacement of hotel operating equipment 273,316,272 163,024,133 436,340,405Total 11,432,595,045 ( 2,430,717,811 ) 9,001,877,234Deferred tax liabilitiesProperty and equipment 39,537,927,338 ( 529,094,808 ) 39,008,832,530Deferred Tax Liabilities – Net ( 28,105,332,293 ) ( 1,901,623,003 ) ( 30,006,955,296 )14. ADVANCES FROM CUSTOMERSThis account represents deposits received from customers for sale of land and residential houses, and for legalprocess of the certificate of ownership. All of the advances are denominated in Rupiah.15. UNEARNED REVENUESThis account represents lease rental of shopping centers paid in advance from third parties. All of rentalrevenues are denominated in Rupiah.16. CONSTRUCTION COSTS PAYABLEThis account represents estimated liabilities to the contractors and suppliers for the remaining costs to completethe land, residential houses and shop-houses sold.25

PT CIPUTRA DEVELOPMENT Tbk AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)For Nine Months Ended 30 September 2006 and 2005(In Rupiah)17. BONDS PAYABLEThe detail of this account in 2006 and 2005 is as follows:2006 2005Ciputra Residence bonds (CR bonds) 350,129,500,000 350,129,500,000Ciputra Sentra bonds (CSN bonds) 160,043,500,000 160,043,500,000Total 510,173,000,000 510,173,000,000a. CR BondsOn 30 June 2003, CR, a subsidiary, entered into an agreement with Kerrisdale International Ltd.,(Kerrisdale) to issued Zero Coupon Bonds of Rp 350,129,500,000, which will be due in 8 years fromissuance date.The bondholders have an option to convert the bonds into CR’s shares during the period of bonds withconversion value of Rp 1,085 per share and CR has the option to redeem partly or entire bonds after thesettlement of its obligation to PT Bank Tabungan Negara (Persero), until the due date of bonds. The bondsare covered by land for development with area approximately 351 hectares owned by CR (see Note 9).Based on Sale and Purchase Agreement dated 19 December 2005, Kerrisdale has transferred all of thebonds, without any conditions, to Grovedale Capital Ltd., BVI.CR shall accomplish several restrictions according to the bonds agreement, among others, pertaining todividend distribution, changing of its article of association, changing the composition of managementand stockholders, and to deliver/acquire other indebtedness. In addition, CR is liable to maintain its debts toequity ratio not more than 100%.CR has fulfilled the requirements.b. CSN BondsIn 2002, CSN entered into an agreement with Morgan Stanley Emerging Markets, Inc. (MSEM) to issued 2bonds, which would be bought by MSEM as follows:• Zero Coupon Convertible Bonds and with nominal value of Rp 260,043,500,000, which will be due in 8years from issuance date. The bondholders have an option to convert the bonds into shares during theperiod of bonds, and CSN has the option to redeem partly or entire bonds after the settlement of itsobligation to PT Bank Mandiri (Persero) Tbk, until the due date of bonds. The bonds are guaranteed withSecond Ranked Collateral Right of SHGB No. 3227, together with building and infrastructure which arelocated in Grogol, West Jakarta, covering 41,365 sqm under CSN name, inventories and accountsreceivable of shopping center and hotel owned by CSN (see Notes 5 and 10).• Zero Coupon Mandatory Convertible Bond with nominal value of Rp 290,990,000,000, which would bedue in 1 year from issuance date. These bonds would be automatically converted into 18,186,875 sharesnot later than 30 days before due date of the bonds, after received an approval from the stockholders.On the same date, MSEM transferred these Convertible Bonds and Mandatory Convertible Bonds to KeyDynamic Resources Ltd. (KDRL).CSN shall accomplish several restrictions according to bonds agreement, among others, pertaining todividend distribution, changing of its article of association, changing the composition of management andstockholders, and to deliver/acquire other indebtedness to others parties. In addition, CSN is liable tomaintain its debts to equity ratio not more than 100%.CSN has fulfilled the requirements.On 2 February 2003, the CSN’s stockholders agreed to convert the Mandatory Convertible Bond to paid-incapital of KDRL for 18,186,875 shares.Based on Extraordinary Stockholders’ General Meeting of CSN, held on 24 March 2005, a part ofConvertible Bonds amounting to Rp 100 billion had been approved to be converted as paid-in capital ofKDRL for 6,250,000 shares with par value of Rp 1,000. Subsequently, the Company direct and indirectownership in CSN has been diluted from 37.35% to 33.07% (see Note 1c).26

PT CIPUTRA DEVELOPMENT Tbk AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)For Nine Months Ended 30 September 2006 and 2005(In Rupiah)18. MINORITY INTERESTSThis account represents the minority shareholders interests in the equity of the consolidated subsidiaries, asfollows:2006 2005PT Ciputra Surya Tbk and subsidiaries 671,825,400,252 547,142,517,969PT Subursejahtera Agungabadi 102,990,625,967 103,599,152,112PT Ciputra Sentra 71,072,529,172 67,575,581,468PT Buanasarana Sejatiindah 5,900,023,132 4,961,026,582PT Dimensi Serasi 4,479,815,876 4,480,088,877PT Penta Oktoneatama and subsidiary 1,328,489,741 1,179,455,197PT Ciputra Residence and subsidiaries 965,367,975 ( 19,927,489 )PT Ciputra Semarang 884,384,103 737,390,746PT Kharismasaka Pratama 638,490,393 638,865,393PT Citradimensi Serasi 586,395,198 586,470,198PT Ciputra Property and subsidiaries 452,210,611 429,588,998PT Citra Tumbuh Bahagia ( 80,325,546 ) ( 78,275,689 )PT Ciputra Adigraha - 163,626,447,253PT Putraindah Jasabangun - 448,037,877PT Sarananeka Indahpancar - 446,738,245PT Citra Adyapataka - 21,087,064PT Cakradigdaya Lokaraya - 21,023,109Jumlah 861,043,406,874 895,795,267,910The minority interests in net income (loss) of consolidated subsidiaries are Rp 106,447,273,740 and Rp54,613,010,310 for the nine months ended 30 September 2006 and 2005, respectively.19. CAPITAL STOCKThe stockholders and their respective stockholdings as of 30 September 2006 and 2005 are as follows:Number of SharesIssued and Percentage of AmountStockholders Fully Paid Ownership (Rp)PT Sang Pelopor 983,625,000 25,09% 491,812,500,000Artupic International B.V. 543,377,306 13,86% 271,688,653,000Hilliview Enterprises Inc. 352,742,928 9,00% 176,371,464,000Rollrick Holdings Ltd. 340,552,520 8,69% 170,276,260,000Mediaplus Investment Ltd. 291,902,160 7,44% 145,951,080,000Bayan Akochi* 13,975,000 0,35% 6,987,500,000Henk Wangitan* 3,158,350 0,08% 1,579,175,000Public (each below 5%) 1,390,443,648 35,49% 695,221,824,000Total 3,919,776,912 100.00% 1,959,888,456,0002006Number of SharesIssued and Percentage of AmountStockholders Fully Paid Ownership (Rp)PT Sang Pelopor 983,625,000 61,00% 491,812,500,000Bayan Akochi* 13,975,000 0,86% 6,987,500,000Henk Wangitan* 3,158,350 0,19% 1,579,175,000Public (each below 5%) 611,741,650 37,95% 305,870,825,000Total 1.612.500.000 100,00% 806.250.000.000*The Company’s commissioner272005

PT CIPUTRA DEVELOPMENT Tbk AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)For Nine Months Ended 30 September 2006 and 2005(In Rupiah)Based on Notarial Deed No. 18 dated 3 March 2006 of Tse Min Suhardi SH, as substitute of Notary BuntarioTigris Darmawa Ng, SH, the Company has issued 2,307,276,912 new shares without pre-emptive rights toArtupic International B.V. (543,377,306 shares), Hillview Enterprises Inc. (536,395,141 shares), Rollrick HoldingsLtd. (340,552,520 shares), Mediaplus Investments Ltd. (291,902,160 shares), Asiamark Pacific Ltd. (97,300,702shares), Finec Securities Ltd. (97,300,702 shares), Fine-C Capital Group Ltd. (48,650,351 shares), Marco PoloCapital Ltd. (11,245,510 shares) and Standard Chartered Bank (340,552,520 shares).The issuance of the shares above is in accordance with the Company’s debt composition plan, which becameeffective on 29 March 2006 (see Note 26).20. REVENUESThis account consists of:2006 2005Net salesLand lots 517,310,586,008 306,531,838,567Residential and shop-housesBuildings 122,742,589,045 106,805,148,473Land 96,879,135,326 94,753,619,020Sub-total 736,932,310,379 508,090,606,060Operating revenuesShopping centers 134,537,326,830 123,838,340,108Hotels 65,496,791,847 59,221,862,201Golf course 19,356,076,748 17,357,383,725Others 13,113,708,856 2,017,346,037Sub-total 232,503,904,281 202,434,932,071Total 969,436,214,660 710,525,538,13121. COST OF SALES AND DIRECT COSTThis account consists of:2006 2005Cost of salesLand lots 274,285,158,014 171,254,360,424Residential and shop-housesBuildings 63,987,118,086 71,468,001,327Land 90,233,901,060 65,296,447,049Sub-total 428,506,177,160 308,018,808,800Direct costShopping centers 39,058,637,069 29,928,815,967Hotels 29,821,682,458 29,919,775,754Golf course 12,236,427,420 11,278,031,452Others 3,610,413,563 2,071,674,556Sub-total 84,727,160,510 73,198,297,729Total 513,233,337,670 381,217,106,52928

PT CIPUTRA DEVELOPMENT Tbk AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)For Nine Months Ended 30 September 2006 and 2005(In Rupiah)22. OPERATING EXPENSESOperating expenses consist of:2006 2005SellingAdvertising and promotions 25,506,324,114 23,537,007,171Sales commissions 7,861,636,445 16,841,566,371Others 5,610,878,653 2,999,650,204Sub-total 38,978,839,212 43,378,223,746General and administrativeSalaries and employees’ benefits 65,124,049,600 57,961,127,290Depreciation 33,799,877,895 27,812,704,498Professional fees 6,923,480,701 9,589,101,275Representation 6,175,119,836 5,038,714,103Water and electricity 4,093,766,580 1,443,678,407Insurance 2,544,799,873 4,521,218,901Postage and telecommunication 2,137,522,444 2,715,353,050Maintenance 1,607,976,634 3,302,887,763Property tax 1,429,489,604 1,500,477,052Traveling expenses 1,076,837,137 2,141,059,303Others 26,634,209,442 13,506,860,491Sub-total 151,547,129,746 129,533,182,133Total 190,525,968,958 172,911,405,87923. EXTRAORDINARY ITEMSThis account represents gain on troubled debts restructuring of the Company in accordance with debtcomposition plan dated 29 March 2006 (see Note 26).24. BASIC EARNINGS PER SHAREThe computation of basic earnings per share as of 30 September 2006 and 2005 is follows:2006 2005Income from operations 265,676,908,032 156,397,025,723Net income 566,087,033,975 51,932,210,861Amount of outstanding shareBeginning of period 1,612,500,000 1,612,500,000Debt to equity conversion (weighted average) 1,563,539,299 -The weighted average of outstanding share 3,176,039,299 1,612,500,000Earnings per share – Income from operations 84 97Earnings per share – Net income 178 32As of 30 September 2006 and 2005, the Company does not have any securities that have a potential to bediluted.29

PT CIPUTRA DEVELOPMENT Tbk AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)For Nine Months Ended 30 September 2006 and 2005(In Rupiah)25. SIGNIFICANT AGREEMENTSa. Based on a joint operation agreement in 1996 and its latest amendment in 2003, entered into by andbetween PT Bumiindah Permaiterang (BIPT), a subsidiary of PT Ciputra Surya Tbk (CS), and PerumPerumnas (Perumnas), both parties agreed to engage in land acquisition, construction, marketing and salesof residential and commercial buildings in a land area covering approximately 115 hectares located atLakarsantri, Surabaya, whereas the location permit is obtained by Perumnas. BIPT, through CS, will providea land area approximately 47.92 hectares, and the rest will be provided by Perumnas. The construction,marketing and sales will be conducted by CS. As compensation, CS agreed to pay 15.14% of the proceedsfrom the minimum sales to Perumnas.Based on Fourth Amendment of the agreement dated 30 July 2003, effective from 31 December 2003 to 31December 2005, both parties also agree to engage in acquisition, construction, marketing and sales of landlocated at the above mentioned area. In addition, the compensation rate has been changed to 24.423%.Amount paid to Perumnas for the nine months ended 30 September 2006 is amounting Rp 3,211,684,567.b. PT Dimensi Serasi, a subsidiary, entered into a joint venture agreement in 1993 with Liang Court Holdings,Ltd., Singapore, and International Image Engineering Co., Ltd., British Virgin Islands, to form 2 foreigninvestment joint venture companies (PMA). The first PMA formed, named PT Ciputra Liang Court, isengaged in the construction, development and management of the condominium and apartment complexlocated at Prof. Dr. Satrio Street Kav.1, Jakarta. The second PMA company has not been established up to30 September 2006.c. CSN and CSM, the subsidiaries, entered into management and promotion agreements with Swiss PacificB.V. (SP), the Netherlands, and Club and Hotel International Management Company B.V. (CHIC), theNetherlands. As compensation, CSN and CSM agreed to pay SP, a fixed and incentive hotel managementcoordination fee equivalent to 0.5% of the gross revenues and 1.5% of the gross operating profit,respectively. In addition, CSN and CSM also agreed to pay CHIC a fixed and incentive hotel marketing andservice coordination fee equivalent to 2.5% of the gross revenues and 6% of the gross operating profit,respectively.Starting from 1 August 2005 SP transferred its rights and obligations to PT Swiss-Bellhotel InternationalIndonesia. Meanwhile, CHIC transferred its right and obligations to CHIC Limited, British Virgin Island, on 1November 2005.d. Based on a joint operation agreement dated 25 November 2004, entered into by CS and PT Taman Dayu(TD), both parties agree to cooperate and to develop the Taman Dayu project, located in Pandaan, EastJava. CS, among others, will organize and perform the management, operation, marketing and financialaspects of the project. Whereas, TD has an obligation to provide land which ready to be developed. Therevenue sharing is agreed at net selling price of land net of 2% commission. Expenses related on thosemarketing activities are borne by CS.26. DEBTS SETTLEMENT PLANThe Company had submitted the Suspension of Payment (PKPU) for certain debts to Commerce Court at theDistrict Court of Central Jakarta on 28 April 2005, which was approved by the shareholders on 12 January 2005.The principal amount of the debts is as follows (see Note 12):Type of Debt Amount (USD) CreditorGuaranteed Floating Rate Notes (FRN) 100,000,000 FRN Holders*Transferable Loans Certificate Facility (TLCF) 25,000,000 TLCF Holders**Swap Liability 32,000,000 Hillview Enterprises Inc., BVIDivestment Payable 23,127,590 Hillview Enterprises Inc., BVIDivestment Payable 1,155,748 Marco Polo Capital Ltd., BVITotal 181,283,338* The holders of the FRN are Rollrick Holding Ltd., Mediaplus Investment Ltd. and Standard Chartered Bank (including theirnominees) in the amount of USD 35 million, USD 30 million and USD 35 million, respectively.** The holders of the TLCF are Asiamark Pacific Ltd., Finec Securities Ltd. and Fine-C Capital Group Ltd. in the amount ofUSD 10 million, USD 10 million and USD 5 million, respectively.30

PT CIPUTRA DEVELOPMENT Tbk AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)For Nine Months Ended 30 September 2006 and 2005(In Rupiah)On 9 May 2005, the Company submitted a Debt Composition Plan to its creditors. Pursuant to the DebtComposition Plan, all interest, penalties and other accrued expenses shall be waived by the creditors, while thedebt principal shall be settled through the following scheme:DescriptionAmount (USD)Tranche IDebt to equity conversion 104,187,809Tranche II***Debt to equity conversion 32,095,529Debt settlement through assets transferred 45,000,000Total 181,283,338*** Transferred/managed by Artupic International B.V. (a special purpose vehicle of the creditors) on behalf of the creditors.The debt to equity conversion was executed at the exchange rate of Rp 8,465 per USD 1, with a conversionvalue of Rp 500 per share. As a result, the number of new shares to be issued to the creditors amounted to2,307,276,912 shares (which represents an increase of 58.86% of the Company’s share capital).In addition to the issue of shares, the following assets were relinquished by the Company to the followingcreditors for subsequent sale:• 20.45% share ownership in PT Ciputra Liang Court, an associated company• 99.98% share ownership in PT Cakradigdaya Lokaraya, a subsidiary• 99.94% share ownership in PT Citra Adyapataka, a subsidiary• 99.84% share ownership in PT Sarananeka Indahpancar, a subsidiary• 99.60% share ownership in PT Putraindah Jasabangun, a subsidiary• 39.90% share ownership in PT Ciputra Adigraha, a subsidiary• Two lots areas of land (each with an area of 7,874 sqm and 5,024 sqm, respectively) located at PerumahanCitra, JakartaOn 15 June 2005, the Debt Composition Plan was ratified by the Commerce Court at the District Court of CentralJakarta, with the Decision No. 02/PKPU/2005/PN.NIAGA.JKT.PST. On 29 March 2006, after the fulfillment ofconditions precedent as stated in the Debt Composition Plan, the process of the Company’s debt settlement wasdeclared effective.For the settlement of the aforementioned debt, the Company recorded the following:• Debt to equity conversionThe value of debt converted amounted to USD 136,283,338 (approximately Rp 1,226,072,210,020), throughthe issue of 2,307,276,912 new shares. On conversion date, the Company recorded an increase in sharecapital amounting to Rp 1,153,638,456,000 and a gain on debt restructuring of Rp 112,433,754,020.• Debt settlement through assets transferred and the write-off of accrued interestThe value of the debt settled through assets transferred amounted to USD 45,000,000 (approximately Rp418,050,000,000, while the value of accrued interest which was written-off amounted to USD 75,550,067(approximately Rp 701,860,122,430 and the value of the assets transferred amounted Rp 754,631,093,637.As a result, the Company recorded a gain on debt restructuring of Rp 365,279,028,793.Therefore, total gain on debts restructuring is amounting to Rp 477,712,782,813, and presented underExtraordinary Items account (see Note 23).27. ESTIMATED LIABILITIES ON EMPLOYEE BENEFITSThis account represents estimated liabilities on employee benefits based on Labor Law No. 13 year 2003 dated25 March 2003, which calculated by PT Rileos Pratama, independent actuarial.31

PT CIPUTRA DEVELOPMENT Tbk AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)For Nine Months Ended 30 September 2006 and 2005(In Rupiah)28. SEGMENT INFORMATIONa. Business segment information is as follows (in thousand of Rupiah):2006Shopping CentersReal Estate and Hotels Others ConsolidatedRevenuesExternal parties 736,932,310 200,034,118 32,469,786 969,436,214ResultSegment result 308,426,133 131,153,799 16,622,944 456,202,876Operating expenses 90,304,746 73,254,181 26,967,041 190,525,968Income (loss) from operation 218,121,387 57,899,618 ( 10,344,097 ) 265,676,908Financial charges - ( 25,624,474 ) - ( 25,624,474 )Loss on foreign exchange ( 3,342,309 ) ( 198,217 ) - ( 3,540,526 )Other income (expense) – net 41,116,956 2,839,179 ( 1,103,330 ) 42,852,805Income (loss) before income tax 255,896,034 34,916,106 ( 11,447,427 ) 279,364,713Income tax expense ( 71,483,141 ) ( 13,060,048 ) - ( 84,543,189 )Income (loss) from normal activities 184,412,893 21,856,058 ( 11,447,427 ) 194,821,524Extraordinary items 477,712,783 - - 477,712,783Income (loss) before minority interests 662,125,676 21,856,058 ( 11,447,427 ) 672,534,307Minority interests ( 106,428,711) - (18,562 ) ( 106,447,273 )Net income (loss) 555,696,965 21,856,058 ( 11,465,989 ) 566,087,034Other informationAssets 3,385,786,505 730,653,433 206,985,581 4,323,425,519Liabilities 1,137,137,464 517,930,748 178,861,947 1,833,930,1592005Shopping CentersReal Estate and Hotels Others ConsolidatedRevenuesExternal parties 508,090,606 183,060,202 19,374,730 710,525,538ResultSegment result 200,106,406 123,211,611 5,990,415 329,308,432Operating expenses 98,585,701 62,622,209 11,703,496 172,911,406Income (loss) from operation 101,520,705 60,589,402 ( 5,713,081 ) 156,397,026Financial charges - ( 24,037,244 ) - ( 24,037,244 )Income (loss) on foreign exchange ( 710,169 ) 157,297 - (552,872 )Other income (expense) – net 13,856,992 6,886,044 (32,241 ) 20,710,795Income (loss) before income tax 114,667,528 43,595,499 ( 5,745,322 ) 152,517,705Income tax expense ( 34,278,252 ) ( 11,340,487 ) (353,745 ) ( 45,972,484 )Income (loss) before minority interests 80,389,276 32,255,012 ( 6,099,067 ) 106,545,221Minority interests (45,615,047 ) ( 10,964,403 ) 1,966,440 ( 54,613,010 )Net income (loss) 34,774,229 21,290,609 ( 4,132,627 ) 51,932,211Other informationAssets 4,329,085,733 755,677,284 187,088,461 5,271,851,478Liabilities 3,803,711,514 549,497,113 157,313,940 4,510,522,567b. Geographical Segment (in thousand of Rupiah):2006 2005AssetsJakarta and surrounding 3,995,113,140 6,166,145,491Surabaya and surrounding 1,829,130,345 1,756,983,146Semarang 219,324,592 219,677,473Lampung 47,226,026 50,876,506Total 6,090,794,103 8,193,682,616Elimination ( 1,767,368,584 ) ( 2,921,831,138 )Net 4,323,425,519 5,271,851,47832

PT CIPUTRA DEVELOPMENT Tbk AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)For Nine Months Ended 30 September 2006 and 2005(In Rupiah)2006 2005LiabilitiesJakarta and surrounding 1,247,429,276 4,282,491,084Surabaya and surrounding 729,787,448 868,872,888Semarang 121,322,901 137,745,168Lampung 14,770,122 32,727,549Total 2,113,309,747 5,321,836,689Elimination ( 279,379,588 ) ( 811,314,122 )Net 1,833,930,159 4,510,522,567RevenuesJakarta and surrounding 339,036,607 293,514,701Surabaya and surrounding 533,579,795 354,764,557Semarang 65,887,994 62,246,280Lampung 30,931,818 -Total 969,436,214 710,525,538Net Income (Loss)Jakarta and surrounding 381,638,221 ( 31,990,990 )Surabaya and surrounding 155,527,625 68,358,946Semarang 17,698,751 18,269,264Lampung 11,222,437 ( 2,705,009 )Net 566,087,034 51,932,21129. SUBSEQUENT EVENTSa. On 12 October 2006, based on letter No. 402/CDC-CKC/Hh/X/06/CD, the Company has submitted thestatement of registration to Bapepam in connection with Limited Public Offering II (Right Issue II) toshareholders with pre-emptive right amounting to 2,449,860,570 new shares with par value of Rp 500 pershare and subscription price of Rp 500 per share.b. In accordance with the Company’s plan for Right Issue II, the Company’s authorized capital has beenincreased from Rp 2 trillion to Rp 5 trillion, consisted of 10 billion shares with par value of Rp 500 per share.The increase was approved in the Extraordinary Stockholders’ General Meeting (ESGM) dated 10November 2006, which was notarized by deed of No. 33 dated 10 November 2006 of Misahardi Wilamarta,SH. This increase has been approved by Ministry of Law and Human Rights of Republic of Indonesia in itsDecision Letter No. W7-02410.HT.01.04.TH.2006 dated 13 November 2006.c. On 9 October 2006, the Company has signed the Conditional Sale and Purchase Agreement (CSPA) withArtupic International B.V. (Artupic) to acquire 75,810,000 shares of PT Ciputra Adigraha (CAG) with parvalue of Rp 1,000 per share, which represents 39.9% of CAG’s total outstanding shares. The acquisitioncost is Rp 2,600 per share or totaling Rp 197,106,000,000. Upon the completion of the transaction, theeffective share ownership of the Company in CAG will increase from 27.85% to 67.75%.d. Based on CSPA dated 9 October 2006, the Company has agreed to acquire PT Ciputra Residence’s (CR)Convertible Bonds (CB) at par value of Rp 350,129,500,000 from Grovedale Capital Ltd (BVI) (Grovedale),with the acquisition cost of Rp 274,295,000,000. The CB can be converted into 322,700,000 CR shares atanytime with the nominal value of Rp 1,000 per share, which represents approximately 25% of enlargedshare capital of CR following the conversion of the CB. Upon the completion of the transaction, theCompany’s equity interests in CR will not be diluted and reminded at 99.99%.33

PT CIPUTRA DEVELOPMENT Tbk AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)For Nine Months Ended 30 September 2006 and 2005(In Rupiah)e. Based on CSPA dated 9 October 2006, the Company has agreed to acquire 24,436,875 shares of PTCiputra Sentra (CSN), with par value of Rp 1,000 per share, from Key Dynamic Resources Limited (BVI)(KDRL), which represents 44.89% of shares issued by CSN or 37.93% after CSN’s CB as mentioned belowhas been converted. Meanwhile, based on another CSPA at the same date, the Company also agreed toacquire CSN’s CB, with par value of Rp 160,043,500,000, from KDRL. The CB can be converted into10,002,719 CSN shares at anytime with the nominal value of Rp 1,000 per share, which representsapproximately 15.52% of enlarged share capital of CSN following the conversion of the CB. The acquisitioncost of CSN’s share is Rp 7,000 per share or totaling Rp 171,058,125,000, while the acquisition cost of CBis Rp 70,019,033,000. Currently, the effective share ownership of the Company in CSN is 33.07% and afterthe conversion of CB will decrease to 27.93%. Therefore, the acquisition of additional shares and CBconversion will increase the Company’s ownership in CSN up to 81.38%.30. RESTATEMENTS OF FINANCIAL STATEMENTSPreviously, the Consolidated Financial Statements of the Company for six months ended 30 June 2006 had beenreviewed by independent accountant (Limited Review). In connection with Right Issue II, these financialstatements were re-audited by an independent auditor (Full Audit). Meanwhile, the Financial Statements of PTCiputra Surya Tbk, a subsidiary, for nine months ended 30 September 2006, have also been revised.To accommodate those changes, the Company has made same adjustments in its Financial Statements for ninemonths ended 30 September 2006, which had been published before, as follows:Before RestatementAfter RestatementBalance Sheet – AssetsCash and cash equivalents 330,092,965,066 309,011,897,901Investments 121,234,859,103 122,229,492,224Total Assets 4,343,841,199,308 4,323,754,765,265Balance Sheet – Liabilities and Stockholders’ EquityLiabilitiesTax payable 52,672,777,322 52,814,365,923Accrued expenses 17,627,247,931 8,410,066,029Estimated liabilities on employee benefits - 9,217,181,902Total Liabilities 1,833,788,570,606 1,833,930,159,206Minority Interests 873,062,981,915 861,043,406,874Stockholders’ EquityAdditional in paid-capital ( 138,850,348,191 ) 11,122,651,089Deficits ( 404,472,082,353 ) ( 562,653,529,236 )Total Stockholders’ Equity 1,636,989,646,787 1,628,781,199,184Statements of IncomeOthers Income (Charges)Interest income 41,604,982,459 20,717,339,610Gain on investments 5,859,643,709 5,271,760,376Equity in net income of associated companies 1,737,343,156 18,980,851Loss on foreign exchange – net ( 239,304,149 ) ( 3,540,526,010 )Others – net 10,765,295,537 16,844,725,770Others income (expense) – net 34,103,486,026 13,687,805,611Income Before Income Tax 299,780,394,058 279,364,713,643Income Tax ExpensesCurrent ( 83,675,615,600 ) ( 83,817,204,200 )Income Tax Expenses ( 84,401,600,311 ) ( 84,543,188,911 )Income From Normal Activities 215,378,793,747 194,821,524,732Extraordinary Items – Net of Tax 627,685,782,263 477,712,782,983Income Before Minority Interests 843,064,576,010 672,534,307,715Minority Interests ( 118,796,095,152 ) ( 106,447,273,740 )Net Income 724,268,480,858 566,087,033,97531. COMPLETION OF THE CONSOLIDATED FINANCIAL STATEMENTSThe management of the Company is responsible for the preparation of the consolidated financial statements thatwere completed on 22 November 2006.34