Company's Activities and Financial Position

Consolidated Income Statements

In 2006, the Company recorded a consolidated net sales value in the amount of USD 323.26 million, which was an increase of 8% from the previous year which was USD 299.31 million. The increase was mainly due to the average increase of chemical products selling prices and the contribution of net sales from property sector.

UIC and Albright & Wilson (Australia) Limited (AWAL) are still the biggest contributors for the net sales of the company, respectively 58.78% and 23.02% in the year 2006.

The high price of raw material and the entry of competitive products from China, particularly for phosphate business has forced the consolidated gross profit down from USD 45.37 million to USD 35.80 million.

In 2005, AWAL decided to discontinue the operation of its Phosphorous melting plant. Therefore such plant has been assessed as impaired.

Impairment loss and the relevant costs of employees restructuring amounting to USD 3.26 million was allocated to the year 2005. There was no loss due to the value decline and cost of restructuring for the year 2006, therefore the operating burden for the year 2006 was reduced by USD 2.90 million compared to the year 2005. As a result, the Company profit declined from USD 17.58 million last year to USD10.91 million in the year of 2006.

Net profit in 2006 declined for about 74.80% from USD 4.96 million in the year 2005 to USD 1.25 million. The strengthening of Rupiah against US Dollar resulted that the Company recorded an foreign exchange loss amounting to USD 4.64 million. On the other hand, the strengthening of the Rupiah and the decline of risk free rate for Rupiah recorded a profit in derivative instrument fair value of USD 5.41 million.

EBITDA in 2006 was recorded in the amount of USD 25.4 million or a decline of USD 5.5 million compared to previous year.

Consolidated Balance Sheets

Consolidated total asset per 31 December 2006 was USD 304.38 million, which showed an increase of USD 30.15 million compared to the previous year. The increase was mainly on the inventory and account receivable.

Real estate asset which consists of inventories of land for development and land under development, building under construction and inventories of office space as well as apartment unit are stated at the lower of cost or net realizable value. The construction of apartment complex performed by WG has increased the asset value of the real estate in 2006 by USD 4.99 million,

The decline in book value of fixed asset was mainly due to the depreciation during the year.

The Company and its Subsidiary recorded a surplus in tax payment amounting to USD 2.85 million which was recorded in “Other net non current asset” account.

The consolidated total liabilities in the year 2006 was recorded at USD 175.41 million or an increase in the amount of USD 27.86 million compared to the previous year.

There was an increase in the current liabilities in the amount of USD 22.97 million which was due to the increase of working capital. In the year 2006, WG obtained a loan facility with a credit limit of Rp 170 billion from PT Bank Niaga Tbk to finance the construction of apartment complex. PT Bank Central Asia Tbk has also grants UIC a loan for its working capital with a maximum limit of USD 30 million with a competitive interest rate.

The strengthening of Rupiah at the end of 2006 compared to end of 2005 has resulted in the Company recorded Rp 551 billion bonds in the amount of USD 60.75 million and USD 56.53 million respectively for the year 2006 and 2005.

Dividends and Market Capitalization

During General Shareholders Meeting held on July 19, 2006, the company distributed cash dividend in the amount of USD 1 million or equivalent to Rp 24 per share which was paid to the shareholders on the September 6, 2006. In the previous year, the company distributed cash dividend in the amount of USD 5.25 million or equivalent to Rp 130 per share which was paid to the shareholders on the 28th July 2005.

Dividend Policy : To provide an attractive return which amount of cash dividend will be adjusted according to the Company’s profit without neglecting the financial health of the Company and not lessening the authorities of the General Shareholders Meeting to determine otherwise in accordance with the regulations contained in the Company’s Articles of Association.

Since the year of 2001, the maximum cash dividend distributed to the shareholders has been 30% from the net profit of the related year.

With the closing share price of the Company in the year 2006 amounting to Rp 2.725 and at the end of 2005 in the amount of Rp 2.875, the market capitalization of the Company was Rp 1.05 trillion and Rp 1.10 trillion at the end of 2006 and 2005 respectively.