pt integra indocabinet tbk - integra … integra indocabinet tbk ("the company") and the...

Effective Date : June 14, 2017Public Offering Period : June 15 - 16, 2016Allotment Date : June 19, 2017Electronic Distribution Date : June 20, 2017Subscription Fund Refund Date : June 20, 2017Listing Date on the Indonesia Stock Exchange : June 21, 2017

THE OTORITAS JASA KEUANGAN (THE "OJK") NEITHER GIVES ITS APPROVAL OR DISAPPROVAL OF THE SECURITIES NOR DOES THE OJK CONFIRM THEACCURACY OR COMPLETENESS OF THE CONTENTS OF THIS PROSPECTUS. ANY STATEMENT CONTRADICTING THE ABOVE SHALL CONSTITUTE AN UNLAWF ULACT. THIS PROSPECTUS IS IMPORTANT AND NEEDS IMMEDIATE ATTENTION. WHEN THERE ARE DOUBTS ON THE ACTION TO BE TAKEN, PROSPECTIVEINVESTORS SHOULD SEEK PROFESSIONAL ADVICE.

PT INTEGRA INDOCABINET TBK ("THE COMPANY") AND THE JOINT LEAD UNDERWRITERS ARE FULLY RESPONSIBLE FOR THE ACCURACY OF ALL MATERIALINFORMATION, OR FACTS, AND THE TRUTHFULNESS OF OPINIONS CONTAINED IN THIS PROSPECTUS.

PT INTEGRA INDOCABINET TBKMain Business Activities:

Production of wooden furniture and other wooden products, forestry concessions, as well asretail and distribution of furniture and home decorations through the Group.

Domiciled in East Java, IndonesiaHead Office:

Betro Village, Sedati DistrictSidoarjo 61253 – Indonesia

Phone: +62 31 8910434, +62 31 8910435, +62 31 8910436Facsimile: +62 31 8911391

E-mail: [email protected]: www.integrafurniture.co.id

INITIAL PUBLIC OFFERINGThe Company is offering 1,250,000,000 new shares comprising of ordinary registered shares (the "Offering Shares"), representing 20.0% of the issued and fullypaid-in capital of the Company immediately after completion of the Initial Public Offering (as defined herein), with a nominal value of Rp100 per share, that will beoffered to the Public at an offering price of Rp260 per share (the "Initial Public Offering"), to be paid in full upon submission of the Share Subscription ApplicationForm ("FPPS"). The aggregate amount to be raised in the Initial Public Offering is Rp325,000,000,000. The exercise price of the ESA Shares (as defined herein)shall be the same with the offering price.

The Offering Shares offered comprise entirely of new shares from the Company’s portfolio, and shall provide the shareholders with the same and equal rights inall matters with the other ordinary registered shares of the Company that have been issued and fully paid, including the right to receive dividend distributions, theright to cast a vote in a general meeting of the shareholders of the Company (the "Shareholders"), the right to receive bonus share distributions and preemptiverights.

Pursuant to the Deed of Minutes of the Extraordinary General Meeting of Shareholders No. 17 dated March 7, 2017, drawn up before Fathiah Helmi, S.H., aNotary in Jakarta, and Directors Decree Letter No. 006/ITG/03/2017 dated March 8, 2017, the Company adopted (a) the employee shares ownership programthrough the Employee Stock Allocation (the "ESA") program by allocating 0.5% of the Offering Shares representing 6,250,000 Offering Shares to its employeesand (b) the Management and Employee Stock Option Program (the "MESOP") and allocated up to 3.0% of the issued and fully paid-in capital of the Companyimmediately after the completion of the Initial Public Offering, representing 187,500,000 shares. Further details relating to the ESA and the MESOP are set out inChapter I of this Prospectus.

JOINT LEAD UNDERWRITERS

PT BAHANA SEKURITAS PT BCA SEKURITAS PT DBS VICKERS SEKURITAS INDONESIA

UNDERWRITERSPT Bosowa Sekuritas ● PT Dhanawibawa Sekuritas Indonesia ● PT Erdhika Elit Sekuritas ● PT KGI Sekuritas Indonesia ●

PT Magenta Kapital Sekuritas Indonesia ● PT Phillip Sekuritas Indonesia ● PT Profindo Sekuritas Indonesia ● PT Yulie Sekurindo Tbk

The Offering Shares will be listed on the Indonesia Stock Exchange (the "IDX").The Joint Lead Underwriters and the Underwriters will fully underwrite the Company’s Initial Public Offering.

THE MAIN RISK THAT THE COMPANY IS EXPOSED TO IS RELATING TO LAWS AND REGULATIONS. A COMPLETE DESCRIPTION OF THE BUSINESS RISKS IS SETOUT IN CHAPTER VI OF THIS PROSPECTUS RELATING TO THE RISK FACTORS.

THE COMPANY WILL NOT ISSUE A COLLECTIVE SHARE CERTIFICATE IN THIS INITIAL PUBLIC OFFERING, HOWEVER, THE OFFERING SHARES WILL BEDISTRIBUTED ELECTRONICALLY AND ADMINISTERED IN THE COLLECTIVE DEPOSITORY OF PT KUSTODIAN SENTRAL EFEK INDONESIA ("KSEI").

THE COMPANY CANNOT GUARANTEE THAT THERE WILL BE AN ACTIVE TRADING MARKET FOR ITS SHARES OR THAT THE LIQUIDITY OF THE SHARES WOULD BESUSTAINED. THERE IS THEREFORE A RISK THAT THERE WILL NOT BE A LIQUID MARKET FOR THE OFFERING SHARES DUE TO, AMONG OTHERS, THE LIMITEDNUMBER OF THE COMPANY’S SHAREHOLDERS.

This Prospectus is issued in Jakarta on June 15, 2017

PRELIMIN

ARY PROSPECTU

S OF THE IN

ITIAL PUBLIC O

FFERING

OF PT IN

TEGRA IN

DOCABIN

ET TBK 2017

The Company filed a Registration Statement, in connection with the Initial Public Offering, with theOJK through letter No. 011/ITG/04/2017 dated April 5, 2017, in accordance with the requirementsset out by the Law of the Republic of Indonesia No. 8 of 1995 regarding the Capital Market,Supplement No. 3608 which was published in the State Gazette of the Republic of Indonesia No.64 of 1995, and the implementing regulations thereof (the "Capital Market Law").

The Offering Shares in this Initial Public Offering are intended to be listed on the IDX in accordancewith the Securities Registration Preliminary Agreement entered into between the Company and theIDX on April 3, 2017, following the satisfaction of the securities registration requirements set by theIDX. In the event the Company fails to satisfy the registration requirements set by the IDX, theInitial Public Offering shall be null and void and the subscription funds paid will be refunded to thesubscribers in accordance with the requirements under the Capital Market Law and Regulation No.IX.A.2.

All capital market supporting professionals and institutions participating in this Initial Public Offeringare fully responsible for the data presented in this Prospectus to the extent of their respective rolesin accordance with the prevailing laws and regulations in the Republic of Indonesia, as well as theirrespective codes of ethics, norms and professional standards.

Without the written approval from the Company and the Joint Lead Underwriters, no Affiliated Party(as defined herein) may provide any information or issue any statement in relation to information inconnection with this Initial Public Offering that is not disclosed in this Prospectus.

All capital market supporting professionals and institutions participating in the Initial Public Offeringare not Affiliated Parties of the Company, within the meaning set out in the Capital Market Law.The information on any affiliation between the capital market supporting professionals andinstitutions is available in Chapter XIV of this Prospectus.

PT Bahana Sekuritas, PT BCA Sekuritas and PT DBS Vickers Sekuritas Indonesia as the JointLead Underwriters are not directly or indirectly affiliated with the Company. The information on anyaffiliation between the Joint Lead Underwriters and Underwriters and the Company is available inChapter XIV of this Prospectus.

THIS INITIAL PUBLIC OFFERING IS NOT REGISTERED UNDER ANY LAWS ANDREGULATIONS OTHER THAN THOSE PREVAILING IN INDONESIA. NOTHING IN THISPROSPECTUS OR THE OTHER DOCUMENTS PREPARED IN CONNECTION WITH THISINITIAL PUBLIC OFFERING CONSTITUTES AN OFFER TO SUBSCRIBE FOR THE OFFERINGSHARES IN ANY JURISDICTION OUTSIDE INDONESIA UNLESS SUCH OFFER DOES NOTCONTRADICT OR CONSTITUTE A VIOLATION UNDER THE PREVAILING LAWS ANDREGULATIONS OF SUCH JURISDICTIONS.THE COMPANY HAS DISCLOSED ALL INFORMATION THAT IS REQUIRED TO BEDISCLOSED TO THE PUBLIC AND THERE IS NO OTHER INFORMATION, THE OMISSION OFWHICH WOULD MAKE ANY STATEMENT IN THIS PROSPECTUS MISLEADING.

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TABLE OF CONTENTS

TABLE OF CONTENTS ................................................................................................................................. iDEFINITIONS AND ABBREVIATIONS........................................................................................................iiiINDUSTRY TERMS ...................................................................................................................................... xiCOMPANY NAMES ABBREVIATION .......................................................................................................xiiiSUMMARY .................................................................................................................................................. xivI. PUBLIC OFFERING ............................................................................................................................1II. USE OF PROCEEDS FROM THE INITIAL PUBLIC OFFERING ....................................................8III. STATEMENT OF INDEBTEDNESS .................................................................................................10IV. KEY FINANCIAL HIGHLIGHTS .......................................................................................................20V. MANAGEMENT'S DISCUSSIONS AND ANALYSIS ......................................................................24VI. RISK FACTORS ................................................................................................................................47VII. SIGNIFICANT EVENT OCCURING SUBSEQUENT TO THE DATE OF INDEPENDENT

AUDITOR'S REPORT .......................................................................................................................53VIII. DESCRIPTION OF THE COMPANY, BUSINESS ACTIVITIES, TRENDS AND PROSPECTS...54

1. BRIEF HISTORY OF THE COMPANY .............................................................................................. 542. APPROVAL TO CONDUCT AN INITIAL PUBLIC OFFERING ............................................................... 613. THE COMPANY'S SHAREHOLDING DEVELOPMENT........................................................................ 614. THE COMPANY’S SHAREHOLDERS............................................................................................... 635. ORGANIZATIONAL STRUCTURE.................................................................................................... 676. THE COMPANY’S OWNERSHIP STRUCTURE ................................................................................. 687. THE COMPANY'S ASSOCIATION BY WAY OF MANAGEMENT AND SUPERVISION ............................. 698. MANAGEMENT AND SUPERVISION OF THE COMPANY ................................................................... 699. HUMAN RESOURCES ................................................................................................................... 7910. DESCRIPTION OF DIRECT SUBSIDIARIES AND INDIRECT SUBSIDIARY ............................................ 8711. LIST OF THE COMPANY’S ASSETS PLEDGED AS COLLATERAL ................................................... 12012. AFFILIATED TRANSACTIONS ...................................................................................................... 12013. MATERIAL TRANSACTIONS AND AGREEMENTS WITH THIRD PARTIES.......................................... 12314. INSURANCE............................................................................................................................... 13215. INTELLECTUAL PROPERTY RIGHTS ............................................................................................ 13316. CURRENT LEGAL PROCEEDINGS FACED BY THE COMPANY, THE COMPANY'S BOARD OF

COMMISSIONERS AND DIRECTORS ............................................................................................ 13317. BUSINESS ACTIVITIES AND PROSPECTS .................................................................................... 133

IX. INDUSTRY OVERVIEW ..................................................................................................................154X. EQUITY ............................................................................................................................................164XI. DIVIDEND POLICY .........................................................................................................................165XII. TAXATION .......................................................................................................................................166XIII. UNDERWRITING.............................................................................................................................169XIV. CAPITAL MARKET SUPPORTING INSTITUTIONS AND PROFESSIONALS ..........................171XV. LEGAL OPINION.............................................................................................................................177

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XVI. INDEPENDENT AUDITOR'S REPORT AND THE COMPANY'S CONSOLIDATED FINANCIALSTATEMENTS.................................................................................................................................178

XVII. IMPORTANT PROVISIONS IN THE COMPANY’S ARTICLES OF ASSOCIATION AND OTHERIMPORTANT PROVISIONS IN RELATION TO THE SHAREHOLDERS ....................................179

XVIII. TERMS OF SHARE SUBSCRIPTION ...........................................................................................218XIX. DISTRIBUTION OF PROSPECTUS AND SHARE SUBSCRIPTION FORM ..............................226

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DEFINITIONS AND ABBREVIATIONSThe abbreviations and terms used in this Prospectus shall have the meaning assigned to them asdescribed in the following table:

Abridged Prospectus Refers to the summary of the Preliminary Prospectus.

Account Holder Refers to the party whose name is registered as the holder of asecurities account and/or a securities sub-account with KSEI, whichmay be Custodian Banks and/or Securities Companies.

Affiliate Refers to affiliates as defined under Article 1 Number 1 of the CapitalMarket Law:a. has family relationships through marriage or descent up to the

second degree, horizontally and vertically;b. is an employee, director or commissioner of such party;c. has one or more common directors or commissioners;d. directly or indirectly, controls or is controlled by such company;e. is under common control, whether directly or indirectly; orf. is a principal shareholder of such party.

AffiliatedParties/Companies

Refers to a party which is an Affiliate of the Company.

Allotment ConfirmationForm or FKPS

Refers to the Allotment Confirmation Form under the name of asubscriber, which serves as proof of ownership of the Offering Sharessold by the Company in the Primary Market.

Allotment ConfirmationForm Distribution Date

Refers to the date on which the Allotment Confirmation Forms orFKPS are distributed, which shall also be the date of the electronicdistribution of the Offering Shares to the subscribers’ accounts.

Allotment Date Refers to the date agreed upon by the Company and the Joint LeadUnderwriters, which shall be no later than two Business Days followingthe closing of the Public Offering Period set forth in the Prospectus.

Allotment Manager Refers to the Joint Lead Underwriter which is responsible for theallotment of shares if the subscriptions of the shares exceed thenumber of shares offered in this Initial Public Offering, in accordancewith the requirements set forth in Regulation No. IX.A.7.

Articles of Association Refers to the Company’s Deed of Establishment and Articles ofAssociation.

Bapepam & LK Refers to the abbreviation of Badan Pengawas Pasar Modal danLembaga Keuangan or the Capital Market and Financial InstitutionSupervisory Agency as defined in Article 3 paragraph 1 of the CapitalMarket Law (presently known as the OJK as defined under theDefinition and Abbreviations section of this Prospectus).

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Business Day Refers to business days in Indonesia generally, excluding Saturdayand Sunday, and the days determined as national holidays by theGovernment.

Capital Market Law or CML Refers to Law of the Republic of Indonesia No. 8 of 1995 datedNovember 10, 1995 relating to the Capital Market, which waspublished in the State Gazette of the Republic of Indonesia No. 64 of1995, Supplement No. 3608.

Calendar Day Refers to each day in one year according to the Gregorian Calendarwith no exception, including Saturday, Sunday and national holidayswhich may be stipulated from time to time by the Government or anordinary Business Day, which, as a result of certain conditions, isstipulated by the Government as a non-Business Day.

Collective Custody Refers to the custodial service of securities jointly owned by more thanone party, whose interests are represented by KSEI.

Companies Law Refers to the Law of the Republic of Indonesia No. 40 of 2007 datedAugust 16, 2007, relating to the Limited Liability Companies, whichwas published in the State Gazette of the Republic of Indonesia No.106 of 2007, Supplement No. 4756.

Director Refers to a member of the board of directors of an entity.

E-commerce Refers to electronic commerce, which is defined as the distribution,purchase, sale, and marketing of goods and services via electronicsystems such as the Internet, websites or other computer networks.

Effective Statement Refers to the satisfaction of all requirements pertaining to theRegistration Statement in accordance with the provisions of Number 4Regulation No. IX.A.2 Annex to the Decree of Bapepam & LKChairman Number: Kep-122/BL/2009 dated May 29, 2009, asdescribed below:a. on the basis of elapsed time as set forth below:

i 45 days from the date that the OJK receives the completeRegistration Statement; or

ii. 45 days from the date that the last amendment filed by theCompany or requested by the OJK is satisfied; or

b. on the basis of a declaration of Effective Statement from the OJKstating that no further changes and/or additional information isrequired.

EU Refers to the European Union.

Exchange Day Refers to every day that the IDX undertakes securities tradingtransaction activities.

GMS Refers to the general meeting of shareholders.

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Government Refers to the Government of the Republic of Indonesia

Indirect Subsidiary Refers to entities which are indirectly controlled through a Subsidiary.

Indonesia Stock Exchangeor the IDX

Refers to PT Bursa Efek Indonesia, a limited liability companydomiciled in Jakarta, where the Company’s shares are expected to belisted.

Initial Public Offering orPublic Offering

Refers to the offering of the Offering Shares by the Company to thePublic, pursuant to the terms and conditions set out in the SharesUnderwriting Agreement and the procedures set out in the CapitalMarket Law and the prevailing regulations.

Issue Refers to the share offering performed by the Company or traded tothe public through the Initial Public Offering in order to be listed andtraded on the IDX.

Joint Lead Underwriters Refers to the parties responsible for the management, organizationand implementation of the Initial Public Offering, which in this caseshall be PT Bahana Sekuritas, PT BCA Sekuritas and PT DBS VickersSekuritas Indonesia.

KSEI Refers to PT Kustodian Sentral Efek Indonesia, domiciled in Jakarta,which is a Depository and Settlement Institution responsible for theadministration of shares in a share offering pursuant to the SharesRegistration in the Collective Depository Agreement.

Listing Date Refers to the listing date of the shares to be traded on the IDX, whichshall be a date no later than one business day after the distributiondate set out in the Prospectus.

Ministry of Law and HumanRights

Refers to the Ministry of Law and Human Rights of the Republic ofIndonesia (previously known as the Department of Justice and HumanRights of the Republic of Indonesia, Department of Justice of theRepublic of Indonesia or Department of Law and Regulations of theRepublic of Indonesia or other names).

MoLHR Refers to the Minister of Law and Human Rights of the Republic ofIndonesia (previously known as the Minister of Justice of the Republicof Indonesia, Minister of Law and Regulations and/or other names).

Offering Period Refers to the period in which the subscription of the Offering Sharesmay be conducted and the FPPS may be submitted by the public tothe Joint Lead Underwriters, Underwriters and/or Selling Agents setout in the Prospectus and FPPS, except in the event that such offeringperiod is shortened, in accordance with the prevailing law andregulations.

Offering Price Refers to the price of the Offering Shares in the Initial Public Offering,

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the amount of which shall be determined and agreed by the Companyand the Joint Lead Underwriters.

Offering Shares Refers to the ordinary registered shares to be offered and sold to thePublic through the Initial Public Offering, which shall be listed on theIDX.

OJK Refers to the Otoritas Jasa Keuangan, an independent institutionreplacing Bapepam and LK, which has the function, responsibilitiesand authority to regulate, supervise, examine and investigate as setout in the Law No. 21 of 2011 concerning the Financial ServicesAuthority which duties and responsibilities include the regulation andsupervision of financial service activities in banking, capital market,insurance, pension fund, public offering, financing institutions andother financial institutions.

OJK Regulation No. 7 of2017

Refers to OJK Regulation No. 7/POJK.04/2017 in relation to theRegistration Statement Documents In the Framework of PublicOffering of Equity Related Securities, Debt and/or Sukuk RelatedSecurities.


Refers to OJK Regulation No. 8/POJK.04/2017 in relation to the Formand Contents of Prospectus and Abridged Prospectus for the PublicOffering of Equity Related Securities.


Refers to OJK Regulation No. 30/POJK.04/2015 in relation to theReport on Realization of Use of Proceeds from Public Offerings.


Refers to OJK Regulation No. 32/POJK.04/2014 in relation to the Planand Organization of General Meeting of Shareholders of PublicCompanies which has been amended to become OJK Regulation No.10/POJK.04/2017.


Refers to OJK Regulation No. 33/POJK.04/2014 in relation to theDirectors and Board of Commissioners of Issuers or PublicCompanies.


Refers to OJK Regulation No. 34/POJK.04/2014 in relation to theNomination and Remuneration Committee of Issuers or PublicCompanies.


Refers to OJK Regulation No. 35/POJK.04/2014 in relation to theCorporate Secretary of Issuers or Public Companies.


Refers to OJK Regulation No. 55/POJK.04/2015 dated in relation tothe Establishment and Working Guidelines of Audit Committee.


Refers to OJK Regulation No. 56/POJK.04/2015 in relation to theEstablishment and Working Guidelines of Audit Committee.

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Option Life Refers to the period of validity for stock options which have beenissued, which a holder of the stock options may exercise prior toexpiry, in each exercise period determined by the Company inaccordance with the prevailing laws and regulations applicable in thecapital market.

Payment Date Refers to the date of payment of proceeds from the Initial PublicOffering in the primary market, which shall be paid by the Underwritersto the Company through the Joint Lead Underwriters, includingpayment for the unsubscribed Offering Shares purchased by theUnderwriters in accordance with their respective underwriting portions.Payment for the Offering Shares must be paid before the delivery ofthe shares. Provisions regarding these dates are set out in Bapepam-LK Regulation no. IX.A.2 in relation to the Registration Procedures forInitial Public Offering.

Preliminary Offering Refers to direct and indirect solicitation of Offering Shares using thePreliminary Prospectus immediately subsequent to the announcementof the Abridged Prospectus in the newspapers to, among others,assess the Public’s interest in the Offering Shares obtainingindications of interests for the number of Offering Shares to besubscribed based on the estimated Offering Price.

Preliminary Prospectus Refers to the written document containing all information in theProspectus submitted to the OJK as part of the RegistrationStatement, except the information concerning the amount, OfferingPrice, underwriting or other matters in relation to the requirements ofthe Offering that cannot yet be determined.

Prospectus Refers to the final written document issued in relation to the InitialPublic Offering for the purposes of soliciting purchases for the OfferingShares.

Public Refers to any individual, entity and/or legal entity, whether Indonesianor foreign, whether residing or legally domiciled in or outside theRepublic of Indonesia.

Public Offering Counter Refers to the venue where the Public Offering takes place during thepublic offering period, where prospective buyers or subscribers of theOffering Shares are able to obtain the Prospectus and FPPS andsubmit the completed FPPS, other than the offices of the Joint LeadUnderwriters and Underwriters.

Public Offering Timetable Refers to the Initial Public Offering timetable to be collectivelydetermined by the Company and the Joint Lead Underwriters in theAddendum to the Shares Underwriting Agreement.

Refund Date Refers to the date on which the subscription payments of the OfferingShares are refunded by the Joint Lead Underwriters through theUnderwriters to subscribers whose subscriptions are unfulfilled,

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whether in whole or in part, as a result of allotment, or in the event thatthe Initial Public Offering is postponed or canceled. Subscription fundsmust be returned by the Allotment Manager or selling agent to thesubscribers, no later than 2 (two) working days after the allotment dateor after the date of the announcement of such postponement orcancellation. Provisions regarding these dates are set out inBapepam-LK Regulation no. IX.A.2 in relation to the RegistrationProcedures for Initial Public Offering.

Registration Statement Refers to the documents which must be submitted to the OJK by theCompany, in relation to Initial Public Offering.

Regulation No. VIII.G.12 Refers to Bapepam Regulation Number. VIII.G.12 Annex to theDecree of Bapepam Chairman No. Kep-17/PM/2004 dated April 13,2014, in relation to the Guidelines on Audit by Accountant onSecurities Subscription and Allotment or Distribution of Bonus Shares.

Regulation No. IX.A.2 Refers to Bapepam-LK Regulation No. IX.A.2 Annex to the Decree ofBapepam-LK Chairman Number: KEP-122/BL/2009 dated May 29,2009, in relation to the Registration Procedures of a Public Offering.

Regulation No. IX.A.7 Refers to Bapepam-LK Regulation No. IX.A.7 Annex to the Decree ofBapepam-LK Chairman Number: Kep691/BL/2011 dated December30, 2011, in relation to the Securities Subscription and Allotment in aPublic Offering.

Regulation No. IX.A.8 Refers to Bapepam & LK Regulation No. IX.A.8 Annex to the Decreeof Bapepam & LK Chairman No. Kep-41/BEI/012000 dated October27, 2000, in relation to the Preliminary Prospectus.

Regulation No. IX.E.1 Refers to Bapepam-LK Regulation No. IX.E.1 Annex to the Decree ofBapepam-LK Chairman Number: Kep-412/BL/2009 dated November25, 2009, in relation to the Affiliated Transactions and Conflict ofInterest on Certain Transactions.

Regulation No. IX.E.2 Refers to Bapepam-LK Regulation No. IX.E.2 Annex to the Decree ofBapepam-LK Chairman Number: Kep-614/BL/2011 dated November25, 2009, in relation to Material Transactions and Changes of MainBusiness Activities.

Regulation No. IX.J.1 Refers to Bapepam-LK Regulation No. IX.J.1 Annex to the Decree ofBapepam-LK Chairman Number: Kep-179/BL/2008 dated May 14,2008, in relation to the Main Provisions of Articles of Association ofCompanies Conducting Equity Securities Public Offering and PublicCompanies.

Rupiah or Rp Refers to Indonesian Rupiah, the lawful currency of the Republic ofIndonesia.

Share Purchase Refers to the register containing the names of subscribers of the

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Application List or DPPS Offering Shares and the amount of Offering Shares subscribed,prepared based on the Share Subscription Application Form preparedby each of the Selling Agents and/or Underwriters based on the orderof subscriptions.

Share Registrar Refers to the party appointed by the Company to undertake theadministration of the Offering Shares in this Initial Public Offering,which for this purpose shall be PT Datindo Entrycom, domiciled inJakarta.

Share SubscriptionApplication Form or FPPS

Refers to the original Share Subscription Application Form which shallbe made in five copies, each of which shall be completely filled in,signed by the prospective buyers or subscribers and submitted by theprospective buyers or subscribers to the Selling Agents and/orUnderwriters to subscribe for the Offering Shares.

Shareholder Register or SR Refers to the shareholder register issued by KSEI, which containsinformation in relation to the share ownership administered in theCollective Depository at KSEI based on the data provided by theAccount Holders to KSEI.

Shares UnderwritingAgreement

Refers to the Deed of the Company’s Shares Underwriting AgreementNo. 64 dated March 23, 2017, read together with Amendment I of theShares Underwriting Agreement of the Company’s Public Offering No.1 dated May 2, 2017 and Amendment II of the Shares UnderwritingAgreement of the Company’s Public Offering No. ● dated June 8,2017, all drawn up before Fathiah Helmi, S.H., a Notary in Jakarta.

Subsidiary Refers to an entity (i) which is the Company owns more than 50.0%(fifty percent) of either directly or indirectly; and (ii) whose financialstatements are consolidated with the Company based on theIndonesian Generally Accepted Accounting Principles (“PSAK”).

The Company Refers to PT Integra Indocabinet Tbk

UMR Refers to Upah Minimum Regional, or Regional Minimum Wage

Underwriters Refers to limited liability companies entering into an agreement withthe Company to undertake the Initial Public Offering on behalf of theCompany, to fully underwrite the sale of the Offering Shares andundertake the payment of proceeds from the Initial Public Offering tothe Company through the Joint Lead Underwriters in accordance withtheir respective underwriting portions, with due considerations to theterms and conditions set forth in Article 5 paragraph (2) and Article 12paragraph (2) of the Shares Underwriting Agreement.

US Refers to the United States of America.

USD Refers to the United States Dollar or US Dollar, the lawful currency ofthe United States of America.

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Vesting Period Refers to the vesting period which commences from the issuance ofthe stock options, whereby during the vesting period the holders of thestock options are not able to exercise their stock options until the endof the vesting period.

Written Confirmation Refers to the confirmation letter on share ownership issued by KSEIand/or Custodian Banks and/or Securities Company (which in thiscase shall be the Joint Lead Underwriters or Underwriters or SellingAgents) for the benefit of the Account Holders in the SecondaryMarket.

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INDUSTRY TERMSCase goods Refers to furniture with compartments for storage.

Dry sawn timber Refers to sawn timber that has been dried in the kiln dry dryingprocess.

FLEGT Refers to the Forest Law Enforcement, Governance and Trade, a EUbody that enforces laws/regulations on forest products Governanceand Trade with the objective of combating illegal logging.

FSC Refers to the Forest Stewardship Council, an international non-profitorganization dedicated to promote responsible and eco-friendly forestmanagement. The FSC does this by setting standards on forestproducts, along with certifying and labeling forest products as eco-friendly.

Gesso Refers to a white paint mixture consisting of a binder mixed with chalk,gypsum, pigment, or any combination of these. It is used to coatsurfaces as an absorbent primer coat substrate for painting.

Kiln dry Refers to the timber drying system used to reduce moisture in wood.

Saw mill Refers to the facility where sawing of timber log is performed.

Sawn timber Refers to sawn timber logs.

SVLK Refers to the Sistem Verifikasi Legalitas Kayu (the "SVLK") or TimberLegality Assurance Verification System, a tracking system designed ona multi-stakeholders basis to ensure the legality of sources of woodthat are distributed and traded in Indonesia, to ensure the wood andthe wood materials are sourced from or originated from sources withorigin and management in satisfaction of legal requirements.

The Global Forest andTrade Network ( the"GFTN")

Refers to one of the leading initiatives by the World Wildlife Fund (the"WWF"), a leading organization in wildlife conservation andendangered species, to combat illegal logging and drive improvementsin forest management while transforming the global marketplace into aforce for saving the world’s forests.

Tropical Forest Trust (the"TFT")

Refers to an organization based in the United States of America, whichassists its member firms to manage their production and supply chainprocesses, particularly in the aspect of raw material supply, in an eco-friendly manner. TFT also cooperates with various suppliers, Non-Governmental Organizations (the "NGOs") and regulators to resolvevarious complicated issues.

Veneer Refers to a thin layer of fine wood having approximately 3 mmthickness that is generally applied as an outer layer of a wood panel.

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Wet sawn timber Refers to sawn timber that is not yet been dried in the kiln dry dryingprocess.

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COMPANY NAMES ABBREVIATION

AMS PT Alam Mentari Sejahtera

Belayan PT Belayan River Timber

DEU PT Duta Emerald Utama

IIL PT Integra Indo Lestari

The Group All companies included in the Company's business, including DirectSubsidiaries and Indirect Subsidiary

ISA PT Intergreen Sinergy Alam

Integriya PT Integriya Dekorindo

Intera PT Intera Indonesia

Interkayu PT Interkayu Mandiri

Interkraft PT Interkraft

Intertrend PT Intertrend Utama

Narkata PT Narkata Rimba

SMA PT Sinergy Mentari Alam

WII PT WoodOne Integra Indonesia

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SUMMARYThe following summary is prepared based on the facts and judgments that are considered material bythe Company, which constitutes an integral part of this Prospectus and should be read together withother information, including the consolidated financial statements and notes to the consolidated financialstatements of the Company in this Prospectus. The Company's financial information is prepared inRupiah and in accordance with Financial Accounting Standards in Indonesia.

1. BRIEF HISTORY OF THE COMPANY

The Company was established under the name of PT Integra Indocabinet pursuant to the Deed ofEstablishment of the Limited Liability Company PT Integra Indocabinet No. 147 dated May 19, 1989,drawn up before Soetjpto, S.H., a Notary in Surabaya, which was approved by the MoLHR of theRepublic of Indonesia by Decree No. C2-320.HT.01.01.TH.90 dated January 20, 1990, and registeredin the registry of the Surabaya District Court under No. 180/1990 dated February 21, 1990 (the "Deedof Establishment").

The Company’s Articles of Association has been amended several times to conform to the CompaniesLaw, as set out in the Deed of Minutes of Extraordinary General Meeting of Shareholders of PT IntegraIndocabinet No. 2 dated May 5, 2008, which was drawn up before Choiriyah, S.H., a Notary in Sidoarjo,and approved by the MoLHR of the Republic of Indonesia (by Decree No. AHU-47493.AH.01.02.Tahun2008 dated August 4, 2008, and registered in the Company Register in accordance with the CompaniesLaw under No. AHU-0066588.AH.01.09.Tahun 2008 dated August 4, 2008 (the "Deed No. 2/2008").

The latest amendment to the Company’s Articles of Association was as set out in the Deed of Minutesof Extraordinary General Meeting of Shareholders of PT Integra Indocabinet No. 17 dated March 7,2017, which was drawn up before Fathiah Helmi, S.H., a Notary in Jakarta, and (i) approved by theMoLHR by Decree No. AHU-0005787.AH.01.02.TAHUN 2017 dated March 8, 2017, and (ii) receivedand registered in the database of the Legal Entity Administration System of the Ministry of Law andHuman Rights each under No. AHU-AH.01.03-0116016 (for the amendment of the Company’s Articlesof Association) and No. AHU-AH.01.03-0116017 for the change of information/ particulars of theCompany dated March 8, 2017, and which was registered in the Company Register under No. AHU-0005787.AH.01.02.TAHUN 2017 dated March 8, 2017, and among others, set out the approval of theShareholders on (i) the amendment of the Articles of Association in its entirety to conform to theprevailing capital markets laws and regulations; (ii) the change of the Company’s status from a privatecompany to a public company; (iii) the issuance of new shares from portfolio to be offered to the Publicin the public offering; (iv) the issuance of new shares from the Company's portfolio issued to the Publicincluding the allocation of new shares in the Company to be issued under the ESA program and (v) theissuance of new shares pursuant to the implementation of the MESOP (the "Deed No. 17/2017").

The Group commenced operations with the establishment of PT Integra Indocabinet in 1989. TheCompany initially produced wooden and plastic CD racks that were exported to the US. With its growingexperience in the production process, the Company invested in machinery to produce simple furnitureand its business grew rapidly. In 1993, the Company established Intertrend, to serve the high growthmarket of outdoor furniture, and subsequently established Interkraft in 2002 in response to the highdemand for fully-assembled and case goods furniture. To secure its raw materials sources, theCompany decided to invest in the forestry concession business by acquiring Belayan and Narkata in2012 and 2011. In 2012, the Company established Intera to produce wooden building components andrattan-based furniture. After considering the business prospects of the retail furniture industry inIndonesia, the Company established Integriya in 2013 to operate its furniture retail and distribution

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activities for the domestic market. In 2015, the Company together with WoodOne International Ltdestablished an Indirect Subsidiary, WII, through a Subsidiary Interkayu to engage in the business ofwooden door production.

Currently, the Company is one of the largest integrated wooden products manufacturers in Indonesia.The Group is based in Sidoarjo, East Java, and consists of eight companies, which includes fivemanufacturing companies, one distribution company, and two forestry concession companies. TheGroup is vertically integrated, with both raw material sourcing and manufacturing business arms.

2. BUSINESS ACTIVITIES

Pursuant to the provisions of Article 3 of Deed No. 17/2017, the Company's aims and objectives are toengage in industrial, trade and service businesses.

In order to achieve the aforementioned aims and objectives, the Company may carry out the followingbusiness activities:

Main Business Activities:

1. To engage in industrial activities, including among others, the furniture, wood, and cork productbusiness, the bamboo and rattan wickerwork business as well as other similar businesses.

2. To: -(a) engage in trade, including export-import and domestic, of products produced

independently or by other parties that are marketed by the Company;(b) act as a wholesaler, purveyor, supplier, franchisee, commission house and other related

business activities;(c) act as a distributor, agent and representative of other domestic and international

enterprises; and(d) trade of the industrial products referred to above.

3. To provide services, except for legal and tax services.

Supporting Business Activities:

Creative business activities relating to graphic design, interior design, product design, industrial design,corporate identity consulting, market research as well as packaging services.

Current Main Business Activities:

The Company is currently focused on the production of wooden furniture and other wooden products,forestry concession, furniture distribution as well as home decorations through the Group.

Competitive Advantages

The Company believes that it has certain advantages that may help it to compete for a bigger marketshare. Some of these competitive advantages are as follows:

1. An integrated business spanning forestry concession, furniture production as well as retail anddistribution;

2. Ability to produce high quality knock-down furniture;3. Presence of supporting divisions;

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4. Support from shareholders and an experienced management team;5. Vast marketing network and strong relationships with customers;6. Access to supply of raw materials.

Further information in relation to the competitive advantages is presented in Chapter IX of thisProspectus.

Business Competition

Based on data issued by Statistics Indonesia (the "Badan Pusat Statistik"), there were approximately965 wooden furniture manufacturers in Indonesia in 2014. Out of these 965 wooden furnituremanufacturers, approximately 263 or 27.3% could be categorized as large scale manufacturers withtotal production facilities areas of more than 2.5 hectares and production capacities of more than 10containers per month. The above data indicates that the wooden furniture manufacturing sector inIndonesia is very large and fragmented, with many small-scale production facilities supporting the needof local communities and rural areas. (Source: Euromonitor International Limited, Manufacturing andDistribution of Wooden Furniture and Building Components, March 2017).

Based on Euromonitor International Limited (“Euromonitor”)’s report which was issued in March 2017,the Group had the highest market share in the furniture manufacturing industry in Indonesia.

Business Strategies

The Company aims to improve synergies among Subsidiaries and secure available marketopportunities. The Company's business strategies are, among others:

1. Increasing raw material uptake through the Company’s forestry concessions;2. Optimization of production processes;3. Development of retail and distribution networks.

Business Trends and Prospects

According to the World Bank, the Indonesian economy continues to demonstrate its strength, with aprojected GDP growth of 5.1% in 2016. Private consumption and public capital expenditures areprojected to be the main drivers of the Indonesian economy in 2016. Continuous policy reform may helpease the impact of declining global demand and money market volatility. Faced with a persistentdownturn in the commodity sector, Indonesia has an opportunity to develop its production and servicesectors. The World Bank projected a GDP growth of 5.3% in 2017, while private consumption isestimated to increase slightly.

The increase in consumer spending is primarily driven by the growing middle-class. Based on data fromBadan Pusat Statistik and Euromonitor’s report, Indonesian consumers have increased their annualspending on furniture, furnishings, carpets and other floor coverings from Rp16,070.2 billion in 2014 toRp17,891.1 billion in 2016. Euromonitor also estimated that the Indonesian consumer expenditure onfurniture and furnishings, carpets and other floor coverings will increase to Rp21,012.4 billion in 2020,driven by the increase in affluent middle-class households, rapid urbanization and low-cost governmenthousing projects.

The US is one of the largest markets for the Company’s products. Based on data from Euromonitor, USconsumer expenditure on furniture and furnishings, carpets and other floor coverings continues to

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increase, with a compounded annual growth rate of 3.6% from 2014 to 2016. The 3.6% growth in 2016from the previous year is a positive indicator for household expenditure in the US. The sustainablegrowth over the historical period suggests that the US working class population is paying attention totheir homes and frequently remodeling the interiors of their homes.

Based on the report from Euromonitor, consumer expenditure on wooden furniture in the US grew fromUSD48.5 billion in 2014 to USD53.1 billion in 2016. This USD53.1 billion expenditure on woodenfurniture represented more than half of the total expenditure on furniture of USD87.8 billion recorded in2016, illustrating the popularity of wood as the material of choice for furniture among US consumers.The popularity of wooden furniture among consumers in the US is a trend which is expected to gainfurther traction going forward. The expected increase in expenditure on wooden furniture is attributed tothe strengthening demand for housing, rise in residential construction activities and discretionaryspending increases. Based on Euromonitor’s research, interior designers and consumers alike areopting for wooden furnishing items for a classier natural look. The US consumers do not look at furnitureas a long term investment or something to be kept as an antique. They tend to conduct frequentremodeling and change the décor of their homes.

Further information in relation to business prospects is presented in Chapter VIII of this Prospectus.

3. DESCRIPTION OF SIGNIFICANT SUBSIDIARIES

As of the date of this Prospectus, the Company owns seven Subsidiaries with an interest of more than50.0%, as follows:

No Subsidiary Line of Business Percentage ofOwnership

Year ofInitial

InvestmentLocation ofOperations

OperationalInformation

1. Intertrend Industrial and trade ofindustrial products

99.0% directownership bythe Company

2012 Sidoardjo,East Java

Operating

2. Interkraft Trade, development,mining, industrial,agriculture,transportation, printingand services



Operating

3. Interkayu Services 80.0% directownership bythe Company


Operating

4. Belayan Forestry, industrial,trade, import andagency


2012 Samarinda,East

Kalimantan

Operating

5. Narkata Forestry, industrial,trade, import andagency


2011 Samarinda,East

Kalimantan

Operating

6. Intera Industrial, services,trade, development,transportation,agriculture, livestock,fishery, plantation,forestry and mining



Operating

7. Integriya Trade and services 99.0% directownership bythe Company


Operating

4. INITIAL PUBLIC OFFERING

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Total Offering Shares : 1,250,000,000 Offering Shares, or 20.0% of the Company’sissued and fully paid-in capital immediately following thecompletion of the Initial Public Offering

Nominal Value : Rp100Offering Price : Rp260 per Offering Share, which shall be paid in full upon

submission of the FPPSTotal Public Offering : Rp325,000,000,000Estimated Offering Period : June 15 - 16, 2017Estimated Listing Date on the

IDX: June 21, 2017

The Company hereby conducts an Initial Public Offering of 1,250,000,000 Offering Shares consisting ofnew ordinary registered shares, representing 20.0% of its issued and fully paid-in capital immediatelyfollowing the completion of the Initial Public Offering, with a nominal value of Rp100 per Offering Share,that will be offered to the public at an Offering Price of Rp260 per Offering Share, to be paid in full uponsubmission of the FPPS. The aggregate amount to be raised in the Initial Public Offering isRp325,000,000,000.

Pursuant to the Deed of Minutes of the Extraordinary General Meeting of Shareholders of PT IntegraIndocabinet No. 13 dated September 7, 2016, drawn up before Dina Chozie, S.H., substitute of FathiahHelmi, S.H., a Notary in Jakarta, the Company's latest capital structure and shareholder composition asof the date of this Prospectus are as follows:

Share capitalcomprising of ordinary registered shareswith a nominal value of Rp100 per share

Description Number of Shares Total Nominal Value (Rp) %Authorized Capital 20,000,000,000 2,000,000,000,000Issued and Fully paid-in capital- PT Integra Indo Lestari 4,956,950,000 495,695,000,000 99.14- PT Sinergy Mentari Alam 43,050,000 4,305,000,000 0.86Total Issued and Fully paid-in capital 5,000,000,000 500,000,000,000 100.00Shares in Portfolio 15,000,000,000 1,500,000,000,000 -

Upon subscription of all the Offering Shares offered by the Company in this Initial Public Offering, theCompany's capital structure and shareholder composition prior to and immediately following thecompletion of the Initial Public Offering on a pro forma basis shall be as follows:


DescriptionPrior to the Initial Public Offering Subsequent to the Initial Public Offering

Number ofShares

Total Nominal Value(Rp) % Number of

SharesTotal Nominal Value

(Rp) %

Authorized Capital 20,000,000,000 2,000,000,000,000 20,000,000,000 2,000,000,000,000Issued and Fully paid-in capital- PT Integra Indo Lestari 4,956,950,000 495,695,000,000 99.14 4,956,950,000 495,695,000,000 79.31- PT Sinergi Mentari Alam 43,050,000 4,305,000,000 0.86 43,050,000 4,305,000,000 0.69- Public * - - - 1,250,000,000 125,000,000,000 20.00Total Issued and Fully paid-incapital

5,000,000,000 500,000,000,000 100.00 6,250,000,000 625,000,000,000 100.00

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Number ofShares

Total Nominal Value(Rp) % Number of


(Rp) %

Shares in Portfolio 15,000,000,000 1,500,000,000,000 13,750,000,000 1,375,000,000,000* including the ESA Program

In conjunction with the listing of 1,250,000,000 Offering Shares consisting of new ordinary registeredshares, the Company, on behalf of the founding Shareholders, shall also list 5,000,000,000 of theCompany's shares that were previously issued prior to the Initial Public Offering. Therefore, the totalnumber of shares to be listed on the IDX shall be 6,250,000,000 shares, representing 100.0% of thetotal issued and fully paid-in capital immediately following the completion of the Initial Public Offering.

In accordance with the resolution of the GMS, the Company shall implement the ESA and the MESOP.

Employee Stock Allocation (ESA) Program

Pursuant to the Deed of Minutes of the Extraordinary General Meeting of Shareholders No. 17 datedMarch 7, 2017, drawn up before Fathiah Helmi, S.H., a Notary in Jakarta and Regulation No. IX.A.7, ithas been resolved that up to 10.0% of the number of shares offered in a public offering of shares maybe allocated to the Company's employees in a public offering of shares.

Pursuant to the Company’s Directors Decree Letter No. 006/ITG/03/2017 dated March 8, 2017, inrelation to the Employee Share Ownership program through the ESA program, it has been decided that0.5% of the Offering Shares, representing 6,250,000 Offering Shares, shall be allocated to the ESAprogram (the "Award Shares"). The implementation of the ESA program shall comply with theprovisions set forth in Regulation No. IX.A.7. The exercise price of the Award Shares shall be the sameas the Offering Price.

Under the ESA program, Award Shares shall be awarded to the Company's qualifying employees (eachan "ESA Program Participant" and collectively, the "ESA Program Participants"), the quantum whichshall be determined by the Board of Directors having due consideration of the performance,contributions and roles of each ESA Program Participant to the Company. Award Shares will beawarded free of charge by the Company to all ESA Program Participants. The Award Shares are part ofthe Offering Shares in the Company's Initial Public Offering.

Upon subscription of all the Offering Shares and the implementation of the ESA program in this InitialPublic Offering, the Company's capital structure and shareholder composition prior to and immediatelyfollowing the completion of the Initial Public Offering on a pro forma basis shall be as follows:

Share capitalconsisting of ordinary registered shareswith a nominal value of Rp100 per share

DescriptionPrior to the Initial Public Offering Subsequent to the Initial Public Offering and ESA

Program ImplementationNumber of


(Rp) % Number ofShares

Total Nominal Value(Rp) %

Authorized Capital 20,000,000,000 2,000,000,000,000 20,000,000,000 2,000,000,000,000Issued and Fully paid-incapital- PT Integra Indo Lestari 4,956,950,000 495,695,000,000 99.14 4,956,950,000 495,695,000,000 79.31- PT Sinergi Mentari Alam 43,050,000 4,305,000,000 0.86 43,050,000 4,305,000,000 0.69- Public - - - 1,243,750,000 124,375,000,000 19.90- ESA Program - - - 6,250,000 625,000,000 0.10Total Issued and Fullypaid-in capital

5,000,000,000 500,000,000,000 100.00 6,250,000,000 625,000,000,000 100.00

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(Rp) % Number ofShares


Shares in Portfolio 15,000,000,000 1,500,000,000,000 13,750,000,000 1,375,000,000,000

Management and Employee Stock Option Program (MESOP)

The stock options granted to participants of the MESOP (the "Stock Options") may be exercised topurchase up to 187,500,000 shares of the Company, representing up to 3.0% of the Company’s totalissued and paid-in capital following the completion of the Initial Public Offering, which shall be issuedfrom the Company’s portfolio.

MESOP Exercise Periods

The Stock Options under the MESOP shall be issued in three phases, namely:Phase I 30.0% of the total Stock Options to be issued under the MESOP shall be issued by no

later than 60 days subsequent to the the Listing Date.Phase II 30.0% of the total Stock Options to be issued under the MESOP shall be issued on

the first anniversary of the Listing Date.Phase III 40.0% of the total Stock Options to be issued under the MESOP shall be issued on

the second anniversary of the Listing Date.

Stock Options shall be issued with an Option Life of five years commencing on the issue date, and shallbe subject to a vesting period of one year commencing on the issue date.

Upon the subscription of all of the Offering Shares, and when the Award Shares are fully awarded andall the Stock Options available under the MESOP are granted and exercised, the Company's capitalstructure and shareholder composition prior to and immediately following the Initial Public Offering on apro forma basis shall be as follows:


DescriptionPrior to the Initial Public Offering Subsequent to the Initial Public Offering, ESA Program

Implementation and MESOP ImplementationNumber of

SharesTotal Nominal

Value (Rp) % Number of Shares Total Nominal Value(Rp) %

Authorized Capital 20,000,000,000 2,000,000,000,000 20,000,000,000 2,000,000,000,000Issued and Fully paid-in capital- PT Integra Indo Lestari 4,956,950,000 495,695,000,000 99.14 4,956,950,000 495,695,000,000 77.00- PT Sinergi Mentari Alam 43,050,000 4,305,000,000 0.86 43,050,000 4,305,000,000 0.67- Public - - - 1,243,750,000 124,375,000,000 19.32- ESA Program - - - 6,250,000 625,000,000 0.10- MESOP 187,500,000 18,750,000,000 2.91Total Issued and Fully paid-incapital

5,000,000,000 500,000,000,000 100.00 6,437,500,000 643,750,000,000 100.00


Further information in relation to the ESA program and MESOP is presented in Chapter I of thisProspectus.

5. USE OF PROCEEDS

xxi

Proceeds from the Initial Public Offering, after deducting the aggregate estimated expenses incurred inrelation to the Initial Public Offering, shall be used for the following purposes:

Approximately 90.0% of the net proceeds from the Initial Public Offering shall be used by the Groupto finance capital expenditures, namely: the procurement of machinery and equipments, theacquisition of land and the opening of retail outlets.;

The remaining shall be used by the Group as working capital, for, among others, financing theprocurement of raw materials and payment of, among others, trade payables, production costs and,marketing expenses.

Further information in relation to the Use of Proceeds is presented in Chapter II of this Prospectus.

6. RISK FACTORS

The business and general risks presented below have been prepared based on the order of significanceof the impact of each risks to the Company, from the most significant to the least significant:

A. MAIN RISK WITH SIGNIFICANT IMPACT TO THE COMPANY’S BUSINESS SUSTAINABILITY1. Risk relating to laws and regulations

B. BUSINESS RISKS1. Risk relating to foreign exchange fluctuations for the Company;2. Risk relating to the supply of raw materials3. Risk relating to fire at production facilities4. Risk relating to the increase in the regional minimum wage levels5. Risk relating to dependence on major customers6. Risk relating to business competition7. Risk relating to technological advancement

C. GENERAL RISKS1. Risk relating to macroeconomic and global economic condition2. Risk relating to the benchmark interest rate for loans3. Risk relating to claims or legal suits

D. RISK FACTORS FOR INVESTORS1. Risk relating to the fluctuation of the Company's share price2. Risk relating to foreign exchange rate fluctuations for foreign investors3. Risk relating to the Company’s shares liquidity4. Risk relating to the Company ability to pay dividends5. Risk relating to minority share ownership

Further information in relation to Risk Factors is presented in Chapter VI of this Prospectus.

7. KEY FINANCIAL HIGHLIGHTS

The following table presents the Company’s key consolidated financial highlights. The figures presentedin the Company's key consolidated financial highlights are derived from the consolidated statement offinancial position as of December 31, 2016, 2015 and 2014, and the consolidated statement of profit orloss and other comprehensive income, consolidated statement of changes in equity and consolidatedstatement of cash flows for the years ended on December 31, 2016, 2015 and 2014, which were

xxii

audited by Teramihardja, Pradhono & Chandra (Rödl & Partner), Registered Public Accountants, withunmodified opinion and an emphasis of matter in relation to the change in the functional currency of theCompany and certain Subsidiaries from USD to Rupiah.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

Description As of December 312014 2015 2016

ASSETSTotal Current Assets 714,878,444,636 1,012,072,609,385 1,327,702,268,541Total Non-Current Assets 806,286,081,517 1,002,399,912,722 1,754,171,941,954TOTAL ASSETS 1,521,164,526,153 2,014,472,522,107 3,081,874,210,495LIABILITIES AND EQUITYTotal Current Liabilities 722,558,940,311 949,247,290,491 1,101,358,728,673Total Non-Current Liabilities 202,247,213,669 358,242,003,734 550,482,499,996Total Equity 596,358,372,173 706,983,227,882 1,430,032,981,826TOTAL LIABILITIES AND EQUITY 1,521,164,526,153 2,014,472,522,107 3,081,874,210,495

CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME

Description For the years ended on December 312014 2015 2016

Net Sales 996,105,258,868 1,118,696,671,711 1,323,388,979,039Cost of Goods Sold 836,916,693,334 876,991,059,336 865,229,995,699Gross Profit 159,188,565,534 241,705,612,375 458,158,983,340Profit Before Tax Benefit (Expense) 22,384,127,643 42,938,779,264 195,081,224,522Profit for the Year 15,442,643,888 38,531,306,157 141,081,224,018Total Other Comprehensive Income 19,277,390,875 90,512,855,709 647,991,100,057

KEY CONSOLIDATED FINANCIAL RATIOS


Growth Ratios (%)Net sales 15.20 12.31 18.30Gross profit (0.31) 51.84 89.55Profit before income tax benefit (expense) (55.48) 91.83 354.32Profit for the year (70.29) 149.51 266.15Comprehensive income for the year (92.74) 369.53 615.91

Operating Ratios (%)Profit before income tax benefit (expense) to net sales 2.25 3.84 14.74Profit before income tax benefit (expense) to total assets 1.47 2.13 6.33Profit before income tax benefit (expense) to equity 3.75 6.07 13.64Comprehensive income for the year to net sales 1.94 8.09 48.96Comprehensive income for the year to total assets 1.27 4.49 21.03Comprehensive income for the year to equity 3.23 12.80 45.31

Financial Ratios (x)Current assets to current liabilities 0.99 1.07 1.21Non-current liabilities to equity 0.34 0.51 0.38Interest-bearing debt to equity 1.23 1.53 0.88Interest-bearing debt to total assets 0.48 0.54 0.41Total liabilities to equity 1.55 1.85 1.16Total liabilities to total assets 0.61 0.65 0.54

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EBITDA/interest expense on loans 2.19 2.53 3.54Return on total assets (ROA) (%) 1.02 1.91 4.58Return on equity (ROE) (%) 2.59 5.45 9.87

FINANCIAL RATIOS REQUIRED IN LOAN AGREEMENTS OR OTHER LIABILITIES AND THEIRCOMPLIANCE

Financial Ratios Required in the Loan Agreements or Other Liabilities The Company's Financial Ratios asof December 31, 2016

Current ratio (minimum 1x) 1.21xTotal liabilities to equity (maximum 3x) 1.16xDebt Service Coverage Ratio (DSCR) (minimum 1x) 2.85xGearing ratio/interest-bearing debt to equity (maximum 1.25x) 0.88xInterest Service Coverage Ratio (minimum 1x) 3.54xReceivables and inventories to total working capital (minimum 110.0%) 119..07%

8. DIVIDEND POLICY

The Company plans to distribute cash dividends at least once every year. The amount of dividend islinked to the Company’s profit for the relevant fiscal year, with due consideration given to theCompany’s financial soundness and without prejudice to the rights of the shareholders in a GMS todetermine otherwise in accordance with the provisions of the Company's Articles of Association.

Any proposal, amount and payment of dividends shall be authorized by the Board of Commissionersand Directors of the Company and shall be subject to the approval of GMS. The amount of dividends issubject to a number of factors, including but not limited to, net profit, reserve availability, capitalexpenditure requirements, operating results and cash balance. The above factors will ultimately dependon a number of conditions, including but not limited to, the successful implementation of business andfinancial strategies, which are affected by competition and regulation, general economic conditions andother conditions that are specific to the Company or the Company’s business. Most of the above factorsreferred to above are beyond the Company's control.

Taking into consideration the above factors, the Company's management intends to propose to theAnnual GMS to resolve that the payout ratio of cash dividends to total net profit be set at a maximum of35.0%, effective from the fiscal year of 2017.

Further information in relation to the Company's dividend policy is presented in Chapter XII of thisProspectus.

1

I. PUBLIC OFFERINGThe Company hereby conducts an Initial Public Offering of 1,250,000,000 Offering Shares, representing20.0% of the issued and fully paid-in capital of the Company immediately after completion of the InitialPublic Offering, with a nominal value of Rp100 per share, that will be offered to the Public at an OfferingPrice of Rp260 per share, to be paid in full upon submission of the FPPS. The aggregate amount to beraised in the Initial Public Offering is Rp325,000,000,000.

The Offering Shares comprise entirely of new ordinary registered shares from the Company's portfolio,which when issued, shall rank pari passu in all respects with the existing issued and paid-in shares of theCompany, including the right to receive dividends, the right to vote at a GMS, the right to receive bonusshares and preemptive rights.

Pursuant to the Deed of Minutes of the Extraordinary General Meeting of Shareholders of PT IntegraIndocabinet No. 17 dated March 7, 2017, drawn up before Fathiah Helmi, S.H., a Notary in Jakarta, andDirectors Decree Letter No. 006/ITG/03/2017 dated March 8, 2017, the Company adopted (a) theemployee shares ownership program through the ESA program by allocating 0.5% of the OfferingShares representing 6,250,000 Offering Shares to its employees and (b) the MSEOP and allocated up to3.0% of the issued and fully paid-in capital of the Company immediately after the completion of the InitialPublic Offering, representing 187,500,000 shares.

PT INTEGRA INDOCABINET TBK

Main Business Activities:Production of wooden furniture and other wooden products, forestry concessions, as well as retail and

distribution of furniture and home decorations through the Group.

Domiciled in East Java, Indonesia

Head Office:Betro Village, Sedati DistrictSidoarjo 61253 – Indonesia

Phone: +62 31 8910434, +62 31 8910435, +62 31 8910436Facsimile: +62 31 8911391

E-mail: [email protected]: www.integrafurniture.co.id

THE MAIN RISK THAT THE COMPANY IS EXPOSED TO IS RELATING TO LAWS ANDREGULATIONS. A COMPLETE DESCRIPTION OF THE BUSINESS RISKS IS SET OUT INCHAPTER VI OF THIS PROSPECTUS RELATING TO THE RISK FACTORS.

THE COMPANY WILL NOT ISSUE A COLLECTIVE SHARE CERTIFICATE IN THIS INITIALPUBLIC OFFERING, HOWEVER, THE OFFERING SHARES WILL BE DISTRIBUTED

2

ELECTRONICALLY AND ADMINISTERED IN THE COLLECTIVE DEPOSITORY OF PTKUSTODIAN SENTRAL EFEK INDONESIA ("KSEI").

THE COMPANY CANNOT GUARANTEE THAT THERE WILL BE AN ACTIVE TRADINGMARKET FOR ITS SHARES OR THAT THE LIQUIDITY OF THE SHARES WOULD BESUSTAINED. THERE IS THEREFORE A RISK THAT THERE WILL NOT BE A LIQUID MARKETFOR THE OFFERING SHARES.

Capital Structure and Shareholder composition

Pursuant to the Deed of Minutes of the Extraordinary General Meeting of Shareholders of PT IntegraIndocabinet No. 13 dated September 7, 2016, drawn up before Dina Chozie, S.H., substitute of FathiahHelmi, S.H., a Notary in Jakarta, the Company's latest capital structure and shareholder composition asof the date of this Prospectus are as follows:


Description Number of Shares Total Nominal Value (Rp) %Authorized Capital 20,000,000,000 2,000,000,000,000Issued and Fully paid-in capital- PT Integra Indo Lestari 4,956,950,000 495,695,000,000 99.14- PT Sinergi Mentari Alam 43,050,000 4,305,000,000 0.86Total Issued and Fully paid-in capital 5,000,000,000 500,000,000,000 100.00Shares in Portfolio 15,000,000,000 1,500,000,000,000

Public Offering

Upon subscription of all the Offering Shares offered by the Company in this Initial Public Offering, theCompany's capital structure and shareholder composition prior to and immediately following thecompletion of the Initial Public Offering on a pro forma basis shall be as follows:



Number ofShares

Total NominalValue (Rp) % Number of


(Rp) %

Authorized Capital 20,000,000,000 2,000,000,000,000 20,000,000,000 2,000,000,000,000Issued and Fully paid-in capital- PT Integra Indo Lestari 4,956,950,000 495,695,000,000 99.14 4,956,950,000 495,695,000,000 79.31- PT Sinergi Mentari Alam 43,050,000 4,305,000,000 0.86 43,050,000 4,305,000,000 0.69- Public * - - - 1,250,000,000 125,000,000,000 20.00Total Issued and Fully paid-in capital 5,000,000,000 500,000,000,000 100.00 6,250,000,000 625,000,000,000 100.00Shares in Portfolio 15,000,000,000 1,500,000,000,000 13,750,000,000 1,375,000,000,000*including the ESA Program

In accordance with the resolution of the GMS, the Company shall implement the ESA program and theMESOP.

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A. ESA

Pursuant to the Deed of Minutes of the Extraordinary General Meeting of Shareholders No. 17 datedMarch 7, 2017, drawn up before Fathiah Helmi, S.H., a Notary in Jakarta and Regulation No. IX.A.7, ithas been resolved that up to 10.0% Offering Shares may be allocated to the Company's employees in apublic offering of shares.

Pursuant to the Company’s Directors Decree Letter No. 006/ITG/03/2017 dated March 8, 2017, inrelation to the Employee Share Ownership Program through the ESA program, it has been decided that0.5% of the Offering Shares, representing 6,250,000 shares, shall be allocated the ESA program asAward Shares. The implementation of the ESA program shall comply with the provisions set forth inRegulation No. IX.A.7. The exercise price of the Award Shares shall be the same as the Offering Price.

Under the ESA program, Award Shares shall be awarded to ESA Program Participants, the quantum OFwhich shall be determined by the Board of Directors having given due consideration to the performance,contributions and roles of each ESA Program Participant to the Company. Award Shares will be awardedfree of charge by the Company to all ESA Program Participants. The Award Shares are part of theOffering Shares in the Company's Initial Public Offering.

The main objectives of the ESA program are as follows:1. to instill a sense of belonging and loyalty amongst the Company’s employees;2. to encourage employees to participate in improving the Company's performance;3. to promote work productivity, maintain work discipline and to set a good example to new employees;

and4. to maintain the Company’s work values and culture.

ESA Program Participant

Employees who satisfy the following criteria are eligible to participate in the ESA program:- employees holding certain positions, as determined by the Company;- employees who have been actively employed up to the date of the Effective Statement from the OJK

on the Company’s Initial Public Offering Registration Statement.- employees who have achieved certain performance targets in accordance with the performance

evaluation standards set by the Company; andemployees who are not subject to any administrative sanction following the implementation, and

during the course of, the ESA program.

A total number of up to 451 employees of the Group will be included in the ESA program. Thesubscription and payment of ESA shares will be made by the Company during the offering period inaccordance with the schedule of the Company’s Initial Public Offering. The parties for the administrationof the ESA program are the human resources division, the finance division and the corporate secretary.

ESA Program Terms and Conditions

1. The ESA program shall be administered in conjunction with the Company’s Initial Public Offering.2. The terms and conditions of the ESA program are as follows:

a. Award Shares shall be granted to all ESA Program Participants who have satisfied the criteriaset forth in point A.3 of the decision letter, and shall be granted in the name of each participants.

b. The Award Shares allocation shall be based on the salary, position and number of years ofservice, performance of the ESA Program Participants.

c. Award Shares are subject to a lock-up period of 24 months subsequent to the Listing Date.

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d. If an employee resigns or is terminated during the lock-up period, his/her rights over the AwardShares shall be void.

e. If participating employees are subject to administrative sanctions during the lock-up period, theirrights over the Award Shares shall be void and such rights shall be available for allocation toother eligible participants.

f. The Award Shares shall be granted free of charge to the ESA Program Participants.

Shares acquired by employees pursuant to the ESA program shall have the same and equal rights asthe Company's other shareholders. Such rights include:a. Attending and voting at a GMS;b. Participating in the distribution of the residual assets of the Company in the event of its liquidation;c. Exercising other rights in accordance with the Companies Law.

The cost related to the ESA program shall be recognized as the Company's expenses, the amount ofwhich shall be equal to the total price of all Award Shares in the ESA program. Costs incurred withrespect to the ESA program shall be borne by the Company and financed using the Company's cashreserves.- The allocated costs of Award Shares shall be 6,250,000 shares, which is calculated based on the

Offering Price of Rp260 per share or a total of Rp1,625,000,000. Income tax on Award Shares shallbe imposed in accordance with the prevailing tax regulations.

Upon subscription of all the Offering Shares and the implementation of the ESA program in this InitialPublic Offering, the Company's capital structure and shareholder composition prior to and immediatelyfollowing the completion of the Initial Public Offering on a pro forma basis shall be as follows:




SharesTotal Nominal

Value (Rp) % Number of Shares Total Nominal Value(Rp) %

Authorized Capital 20,000,000,000 2,000,000,000,000 20,000,000,000 2,000,000,000,000Issued and Fully paid-in capital- PT Integra Indo Lestari 4,956,950,000 495,695,000,000 99.14 4,956,950,000 495,695,000,000 79.31- PT Sinergi Mentari Alam 43,050,000 4,305,000,000 0.86 43,050,000 4,305,000,000 0.69- Public - - - 1,243,750,000 124,375,000,000 19.90- ESA Program - - - 6,250,000 625,000,000 0.10Total Issued and Fully paid-incapital

5,000,000,000 500,000,000,000 100.00 6,250,000,000 625,000,000,000 100.00


The ESA program shall be administered in conjunction with the Company's Initial Public Offering and theESA Program Participants shall be obligated to sign and agree with the terms and conditions of the ESAprogram.

Tax Aspects of the ESA Program

The costs of the ESA program represent the remuneration received by the ESA Program Participants,and therefore shall be subject to Income Tax Article 21, which shall be imposed on the ESA ProgramParticipants.

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Subsequently, upon expiry of the lock-up period under the ESA program, the ESA Program Participantsare allowed to sell such shares through the IDX or outside the IDX, and the following tax provisions shallapply on such sales:a. Sales executed through the IDX shall be subject to a final tax of 0.1% of the transaction value.b. Sale of shares executed outside the IDX shall be subject to tax, which shall be calculated based on

the capital gain received by the participant at a progressive tax rate in accordance with theprevailing tariff.

B. Management and Employee Stock Option Program (the "MESOP")

Stock Options may be exercised to purchase up to 187,500,000 shares of the Company, representing upto 3.0% of the Company’s total issued and paid-in capital following the completion of the Initial PublicOffering, which shall be issued from the Company’s portfolio.

Employees who satisfy the following criteria are eligible to participate in the MESOP:a. Management, consisting of the active members of the Directors and Board of Commissioners on the

issuance of the stock options, with the exception of Independent Commissioners.b. Senior employees as determined by the Directors, i.e. a senior manager with tenure of at least 10

years, an assistant general manager with tenure of at least two years and a general manager.

MESOP participants are eligible to receive stock options in every phase that shall be determined by theCompany's Directors on the fourteenth Business Day prior to the distribution date of the stock options ofeach phase.

The source of funds for the implementation of the MESOP should come from the MESOP participants.

All of the ordinary registered shares which have been issued and fully paid, including the Offering Sharesand shares purchased upon the exercise of stock options from the MESOP shall have the same andequal rights in all matters, including the right to receive dividend distribution, the right to cast vote in aGMS, the right to receive bonus share distribution and preemptive rights as set out in the CompaniesLaw and Capital Market Law.

The Company’s shares issued upon the exercise of the stock options pursuant to the MESOP will belisted on the IDX.

MESOP Exercise Phases

The stock options under the MESOP shall be issued in three phases, namely:Phase I 30.0% of the total Stock Options to be issued under the MESOP shall be issued by no

later than 60 days subsequent to the Listing Date.Phase II 30.0% of the total Stock Options to be issued under the MESOP shall be issued on the

first anniversary of the Listing Date.Phase III 40.0% of the total Stock Options to be issued under the MESOP shall be issued on the

second anniversary of the Listing Date.

The MESOP will be implemented in accordance with Listing Regulation No. I-A, Annex II to the Decreeof the Directors of PT Bursa Efek Indonesia No. Kep-00001/BEI/01-2014 dated January 20, 2014. TheMESOP will be administered by the Directors under the supervision of the Board of Commissioners andshall be reported in the GMS.

• Stock Options issued pursuant to the MESOP may be used to purchase shares in the Company for aperiod of five years from the Option Life.

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• Each option may be used to purchase one new share in the Company, which shall be issued fromthe Company's Portfolio, upon payment of the exercise price in full.

• The Stock Options shall be subject to a Vesting Period of one year from their date of grant. StockOption holders will not be able to exercise their options to buy Shares in the Company until theVesting Period has expired.

• Upon expiry of the Vesting Period, Stock Option holders will have the right to exercise their optionsto buy new shares in the Company during an exercise window, which will be for a period of up to 30Exchange Days. The Company will open up to two exercise windows in a year.

The procedures and practices of the ESA program and the MESOP shall be determined by the Directorsin accordance with the prevailing laws and regulations.

MESOP Exercise Price

The exercise price will be determined in accordance with the provisions of point V.2.2 of the ListingRegulation I-A, Annex I to the Decree of the Directors of PT Bursa Efek Jakarta No. Kep-305/BJ/07-2004dated July 19, 2004, which shall be not less than, 90.0% of the average closing price of the Company'sshares on the IDX during the 25 consecutive Exchange Days immediately preceding the date of thenotice given by the Company of the exercise period in relation to MESOP.

Tax Aspect of the MESOP

There is no tax aspect that is applicable to the Company or the MESOP participants receiving StockOptions. If, subsequent to the lock-up period, the MESOP participants exercise their rights to purchaseshares by paying the exercise price, and sell the shares acquired pursuant to the exercise of such StockOptions, the following tax regulations shall apply:a) Sales executed through the IDX shall be subject to a final tax of 0.1% of the transaction value.b) Sale of shares executed outside the IDX shall be subject to tax, which shall be calculated based on

the capital gain received by the MSEOP participant at a progressive tax rate in accordance with theprevailing tariff.

Upon subscription of all the Offering Shares and the implementation of the ESA program and theMESOP in this Initial Public Offering, the Company's capital structure and shareholder composition priorto and immediately following the completion of the Initial Public Offering on a pro forma basis shall be asfollows:



Program and the MESOPNumber of

SharesTotal Nominal

Value (Rp) % Number of Shares Total NominalValue (Rp) %

Authorized Capital 20,000,000,000 2,000,000,000,000 20,000,000,000 2,000,000,000,000Issued and Fully paid-in capital- PT Integra Indo Lestari 4,956,950,000 495,695,000,000 99.14 4,956,950,000 495,695,000,000 77.00- PT Sinergi Mentari Alam 43,050,000 4,305,000,000 0.86 43,050,000 4,305,000,000 0.67- Public - - - 1,243,750,000 124,375,000,000 19.32- ESA Program - - - 6,250,000 625,000,000 0.10- MESOP 187,500,000 18,750,000,000 2.91Total Issued and Fully paid-incapital

5,000,000,000 500,000,000,000 100.00 6,437,500,000 643,750,000,000 100.00

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Program and the MESOPNumber of

SharesTotal Nominal

Value (Rp) % Number of Shares Total NominalValue (Rp) %


Listing of the Company's Shares on the IDX

Simultaneous with the listing of the Offering Shares, the Company, on behalf of the foundingShareholders, will also list 5,000,000 shares which were issued prior to the Initial Public Offering.Accordingly, the total number of shares that will be listed by the Company on the IDX will be up to6,250,000,000 shares or 100.0% of the Company's total issued and fully paid-in capital immediatelyfollowing the completion of the Initial Public Offering.

THE COMPANY HAS NO INTENTION TO ISSUE AND/OR LIST NEW SHARES OR OTHERCONVERTIBLE SECURITIES OTHER THAN THE STOCK OPTIONS OFFERED THROUGH THEMESOP, WITHIN A PERIOD OF 12 MONTHS SUBSEQUENT TO THE EFFECTIVE DATE OF THEREGISTRATION STATEMENT.

THE COMPANY’S SHAREHOLDERS, IIL AND SMA, HEREBY DECLARE THAT THEY WILL NOTSELL THEIR SHARES IN THE COMPANY FOR A PERIOD OF SIX MONTHS FROM THE EFFECTIVEDATE OF THE REGISTRATION STATEMENT.

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II. USE OF PROCEEDS FROM THE INITIAL PUBLIC OFFERINGProceeds from the Initial Public Offering, after deducting the aggregate estimated expenses incurred inrelation to the Initial Public Offering, shall be used for the following purposes:

Approximately 90.0% of the net proceeds from the Initial Public Offering will be used by the Group tofinance capital expenditures, namely: the procurement of machinery and equipment, in line with theGroup’s business development, the acquisition of land and the opening of retail outlets. The capitalexpenditure will be made in the Group’s manufacturing and retail and distribution segments. Theplanned capital expenditure in the manufacturing segment which will be undertaken by the Group,including Intertrend and/or Interkraft and or new subsidiary(ies) that have not been established at thedate of this Prospectus, includes procuring land, factory and production machinery for the productionof new products, such as wooden flooring, floor base and wooden blinds. The location of the plant isintended to be in close proximity to the Group’s existing plants in the Sidoarjo and Lamongandistricts. The types of machinery required include rotary, clipper, cross cut, molding, finger joint,finishing and conveyor engines. Some of the machinery will be purchased from local companies andsome will be imported from the People's Republic of China. These new products have a relativelylarge market in the US, the People's Republic of China, and European countries. The Company’sand/or its Subsidiaries’ customers in the US and the People's Republic of China are potentialcustomers for these new products.

Capital expenditure in the retail and distribution segment, which will be made through Integriya, isintended to expand the business through the opening of retail outlets in major cities such as GreaterJakarta, Bandung, Surabaya, Makassar and Denpasar. In addition, the Company will also purchaseland and buildings in Greater Jakarta which will be used as a distribution center that will supportretail and distribution sellers for, in particular, the Jakarta area as well as the western part ofIndonesia in general. The Company believes in the potential purchasing power and consumerappetite in these cities based on consumer profiling and expects that the demand for the Company'sproducts will be sufficiently high.

The remaining proceeds will be used by the Group as working capital, among others, to financeprocurement of raw materials, payment of trade payables, production costs, marketing expenses,and others.

Transfer of proceeds from the Initial Public Offering to the Subsidiaries of the Company shall be made inthe form of additional paid-in capital by the Company in the Subsidiaries.

If the proceeds from the Initial Public Offering have not been fully utilized, temporary placement of suchproceeds shall be made by the Company having regard to the security and liquidity of such placement,and such placement shall generate a fair financial return to the Company and comply with the prevailinglaws and regulations.

If the net proceeds from the Initial Public Offering is insufficient for the above intended uses, theCompany has other financing options based on its financial ratios, such as its internal cash flows, bankloans and/or bonds to finance its intended use of proceeds.

Pursuant to OJK Regulation No. 30 of 2015, the Company is required to submit a report regarding theuse of proceeds from the Public Offering to the OJK periodically, i.e. every six months, until all theproceeds from the Public Offering has been utilized. If the Company intends to change the planned useof proceeds, the Company shall inform the OJK of the plan and reason for such change of use of

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proceeds from the Initial Public Offering as well as announce the GMS agenda to the OJK and seek theapproval from GMS.

If any transaction to be entered into by the Company using the net proceeds of the Initial Public Offeringis for an affiliated party transaction, a transaction involving conflict of interests or a material transaction,the Company is required to comply with the provisions set forth in Regulation No. IX.E.1 and/orRegulation No. IX.E.2.

In accordance with the OJK Regulation No. 8 of 2017, the total cost incurred by the Company in relationto the Initial Public Offering is approximately 3.89% of the net proceeds from the Initial Public Offeringand comprises: Underwriting fee of approximately 0.25%; Management fee of approximately 1.25%; Selling fee of approximately 0.25%; Professional fees of approximately 0.94%, which comprise of: public accountant fee of approximately

0.22%, legal counsel fee of approximately 0.68%, and notary fee of approximately 0.04%. Institutional fees of approximately 0.05%, which comprise of: share registrar fee of approximately

0.05%. Other fees (registration statement to the OJK, registration fee to KSEI, listing fee on the IDX,

printing, advertisement, public exposure and others) of approximately 1.15%

THE COMPANY HEREBY DECLARES THAT THE IMPLEMENTATION OF THE USE OF PROCEEDSFROM THE INITIAL PUBLIC OFFERING WILL MEET ALL PREVAILING CAPITAL MARKETSREGULATIONS.

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III. STATEMENT OF INDEBTEDNESSAs of December 31, 2016, the Company had total liabilities of Rp1,651,841,228,669, consisting ofcurrent liabilities of Rp1,101,358,728,673, and non-current liabilities of Rp550,482,499,996. The figuresare derived from the consolidated balance sheet of the Company as of December 31, 2016, which wasaudited by Teramihardja, Pradhono & Chandra (Rödl & Partner), Registered Public Accountants, with anunmodified opinion and an emphasis of matter in relation to the change in the functional currency fromUSD to Rupiah in its report signed by Agustina Felisia.

(in Rupiah)Description As of December 31, 2016Current LiabilitiesBank and Non-Bank Financial Institution Loans 907,825,110,478Trade Payables 72,604,179,566Other Payables 5,654,871,991Accrual Expenses 11,449,731,647Taxes Payable 43,462,855,487Advance from Customers 24,792,817,188Current Maturities of Long-Term Liabilities

Bank and Non-Bank Financial Institution Loans 26,475,634,258Obligation Under Finance Lease 9,093,528,058

Total Current Liabilities 1,101,358,728,673Non-Current LiabilitiesLong-term Liabilities, Net of Current Maturities

Bank and Non-Bank Financial Institution Loans 160,818,401,206Obligation Under Finance Lease 9,039,813,743

Other Payables 141,314,372,925Deferred Tax Liabilities 212,078,470,513Employee Benefits Liabilities 27,231,441,609Total Non-Current Liabilities 550,482,499,996Total Liabilities 1,651,841,228,669

1. Current Liabilities

a. Bank and Non-Bank Financial Institution Loans

The outstanding balance of the Company's bank loans was Rp907,825,110,478. The breakdown of theCompany's short-term bank loans is as follows:

(in Rupiah)Description As of December 31, 2016The CompanyThird Parties

EximExport Working Capital Credit Facility I 198,630,000,000Export Working Capital Credit Facility II 70,000,000,000Export Working Capital Credit Facility II 66,725,000,000

Sub-total 335,355,000,000SubsidiariesThird Parties

EximWorking Capital Credit Facility 240,067,000,000

The Hongkong and Shanghai Banking Corporation LimitedCombined Limit Facility I 94,052,000,000Combined Limit Facility II 85,000,000,000Overdraft 2,483,007,187

PT Bank Negara Indonesia (Persero) TbkOverdraft 96,492,611,291

PT Bank ICBC Indonesia 32,877,892,000

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(in Rupiah)Description As of December 31, 2016

PT Bank Mizuho Indonesia 21,497,600,000Sub-total 572,470,110,478Total 907,825,110,478

The Company

In December 2010, the Company obtained credit facilities from Lembaga Pembiayaan Ekspor Indonesia,which is also known as Exim, including an export working capital credit facility I ("KMKE I") of up toUSD15,000,000 and an export bill negotiation facility ("NEW") of up to USD1,000,000 denominated inRupiah currency at the exchange rate prevailing at the time of drawdown.

In October 2011, the Company obtained an additional export working capital credit facility II ("KMKE II")of up to Rp70 billion from Exim. In September 2012, the Company obtained an additional export workingcapital credit facility ("KMKE III") of up to USD5,000,000 (or equivalent to Rp65 billion) from Exim.

In 2016, each of the facilities bore an annual interest rate of 10.0% and 5.8% per annum for loansdenominated in Rupiah and USD respectively. These facilities will be due on December 22, 2017. Thefacilities are collateralized with certain of the Company’s fixed assets, trade receivables and inventories,as well as secured by personal guarantees of certain Directors.

Subsidiaries

Since 2013, Belayan has had in place a working capital credit facility from Exim of up to Rp80 billion,which is used to finance Belayan’s working capital. This facility has a one year tenure and bore aninterest rate of 10.0% per annum in 2016. This facility has been renewed until December 22, 2017. As ofDecember 31, 2016, the outstanding balance under the working capital credit facility amounted to Rp80billion.

On December 5, 2016, Belayan obtained a second export working capital credit facility of up to Rp150billion from Exim. This facility bears an annual interest rate of 10.0% per annum. As of December 31,2016, the outstanding balance under the working capital credit facility amounted to Rp100,067,000,000.

On September 7, 2016, Intera obtained a transactional export working capital credit facility from Exim ofup to Rp79 billion, with a tenure of one year and an interest rate of 10.0% per annum. As of December31, 2016, the outstanding balance of this facility amounted to Rp60 billion.

Under the abovementioned facilities, the Company must obtain prior approvals for: amending the Articles of Association of the Company or changing the Company’s status; consolidating the business, investing in or buying shares of another company; conducting any merger or acquisition, except in accordance with government policy; and distributing dividends or business profit in any form and in any amount to the shareholders.

The Company is also required to maintain the debt-to-equity ratio at no more than eight times.

The Company has obtained written approval from Exim No. BS.0090/PBS /04/2017 dated April 28, 2017in relation to the negative covenants disclosed above to undertake the Initial Public Offering.

In addition, there was a change in Credit Agreement No. 64 dated December 22, 2010, Article 14,regarding matters that must be implemented by the Company in order to be able to conduct the InitialPublic Offering, as follows:

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1) The Company has to report to Exim any of the following corporate actions to Exim at least sevenworking days prior to such action:- lending money to anyone including affiliated companies except as a result of normal

business;- amending the Company’s Articles of Association or changing the status of the Company;- changing or allowing the Company’s capital structure to be changed; and- paying dividends or operating profit in any form and in any amount to its shareholders,

except in order to improve the Company's capital structure.2) Allowing any and all other actions required or performed by the Company in connection with the

implementation of the Initial Public Offering so long as it does not affect the operational activitiesof the Company and its ability to comply with the covenants and financial obligations to Exim.

In 2009, Intertrend obtained from the The Hongkong and Shanghai Banking Corporation Limited acombined limit facility comprising an export packing credit and loan against export facility of up toUSD2,500,000 and a treasury facility of up to USD50,000. In October 2010, Intertrend obtained anadditional document against acceptance facility which is included in the combined limit facility. In 2015,Intertrend amended the combined limit credit facility, increasing the available facility to USD7,000,000and treasury facility to USD400,000 and obtained an additional credit facility in the form of the combinedlimit facility 2 for export packing credit and loan against export facility of up to Rp85 billion and anoverdraft facility of up to Rp2.5 billion.

The credit facilities bore an annual interest rate of 6.0% for loans denominated in USD and 12.5% forloan denominated in Rupiah in 2016. These facilities were due on November 2, 2016. The credit facilitieshave been fully repaid with the proceeds from the working capital credit facility and term loan from PTBank Negara Indonesia (Persero) Tbk (the "BNI") on March 2, 2017. These facilities collateralized byIntertrend’s certain inventories and personal guarantees of Hendro Rusli, Halim Rusli and Widjaja Karli.

Intertrend is required to comply with several restrictions, among others, Intertrend must obtain, priorapproval for:

distributing dividend or capital to the shareholders or Directors. pledging or mortaging moveable asset, any mortage right or guarantee right for property or

income. granting loans or liability. granting loans to another company or other people except for business practice. maintaining the financial ratios as follows:

a. minimum current ratio one time.b. maximum gearing ratio 1.25 times.c. minimum interest service coverage ratio one time.

On October 29, 2012, Interkraft obtained a working capital credit facility from BNI in the form ofoverdrafts and revolving loan facility of up to Rp20 billion and Rp50 billion, respectively. This facility isused for Interkraft’s working capital and refinancing requirements. Interkraft also obtained export creditand foreign exchange line facilities of up to USD5,000,000 and USD1,000,000, respectively. OnDecember 10, 2015, Interkraft amended its credit facility into a revolving working capital facility of up toRp77 billion. In December 22, 2016, Interkraft amended its revolving loan facility to an overdraft facility ofup to Rp97 billion. On March 2, 2017, Interkraft obtained a revolving loan facility from BNI with amaximum amount of Rp78 billion for working capital.

These facilities bore an interest rate of 11.5% per annum in 2016. These facilities will be due onDecember 19, 2017 and are collateralized by certain accounts receivable, inventory and fixed assets of

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Interkraft, a corporate guarantee from Interkraft, as well as personal guarantees from Widjaja Karli, HalimRusli and Hendro Rusli.

On March 2, 2017, Intertrend obtained a working capital credit facility and term loan from BNI of up toRp205 billion and Rp35 billion respectively which will be used as additional working capital including therepayment of the credit facility from The Hongkong and Shanghai Banking Corporation Limited.

Interkraft is required to comply with several restrictions, including obtaining prior approval for: changing the Company’s legal status and its Articles of Association; using the Company’s funds which are funded by the bank’s credit facility for purposes not in the

ordinary course of business; selling or pledging the company’s asset to other parties; distributing operating profit and dividend to the shareholders; conducting merger, acquisition, or reorganization or investing in another company; changing the scope of business; withdrawing the paid-in capital; maintain the financial ratios as follows:

a. minimum current ratio 1 time;b. maximum debt to equty ratio 2.5 times;c. minimum debt to service coverage ratio 100.0%; andd. minimum receivables and inventories ratio to working capital credit facility ratio 110.0%.

With regard to the negative covenants from BNI as mentioned above, the Company has obtained awritten approval from BNI No. LMC2/2.5/354/R dated April 25, 2017 (See Note 30) to pay dividends.

In 2014, Intertrend obtained a credit facility from PT Bank ICBC Indonesia in the form of a pre-exportfinancing non-LC of up to USD2,500,000. This facility bore an annual interest rate of 5.8% for loansdenominated in USD in 2016 and 12.8% for loans denominated in Rupiah in 2016. This facility will bedue on September 26, 2017. This facility was collateralized with certain of Intertrend’s certain inventoriesand trade receivables as well as personal guarantees of Halim Rusli, Hendro Rusli and Widjaja Karli.

On December 15, 2016, Interkayu obtained a revolving loan facility from PT Bank Mizuho Indonesia ofup to USD2,000,000 for a one-year tenure. This facility bore an interest rate at 2.0% per annum. As ofDecember 31, 2016, the outstanding balance under this facility amounted to USD1,600,000.

b. Trade Payables

As of December 31, 2016, the outstanding balance of the Company's trade payables wasRp72,604,179,566. The breakdown of the Company's trade payables as of December 31, 2016 is asfollows:

(in Rupiah)Description As of December 31, 2016Third PartiesImport

Gold Year Industrial Ltd. 4,043,230,631Akzo Nobel Coating Vietnam, Ltd 2,372,704,561Others (each below Rp2 billion) 5,182,461,547

Sub-total 11,598,396,739Local

PT Propan Raya ICC 6,142,722,044PT Karya Agung Abadi 3,119,018,168PT Jatisari 2,134,155,730

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(in Rupiah)Description As of December 31, 2016

Others (each below Rp2 billion) 49,609,886,885Sub-total 61,005,782,827Total 72,604,179,566

Based on currency

(in Rupiah)Description As of December 31, 2016Rupiah 66,677,460,803USD 5,926,718,763Total 72,604,179,566

Based on age

(in Rupiah)Description As of December 31, 20161 – 30 days 52,409,181,12231 – 60 days 7,534,637,49061 – 90 days 3,999,228,604> 90 days 8,661,132,350Total 72,604,179,566

Trade payable is payable without collateral and interest.

b. Other Payables

As of December 31, 2016, the outstanding balance of the Company's other payables wasRp146,969,244,916. The breakdown of the Company's other payables as of December 31, 2016 is asfollows:

(in Rupiah)Description As of December 31, 2016Related Party

PT Integra Indo Lestari ("ILL") 141,314,372,925Third Parties

Synergy Alam Corporation 1,680,353,625Others (each below Rp1 billion) 3,974,518,366

Total 146,969,244,916

Based on the loan agreeements dated December 23, 2015 between Intertrend, Narkata, Belayan,Integriya, and IIL, IIL agreed to grant a loan facility of up to Rp20 billion, Rp17.1 billion, Rp42.5 billion,and Rp67.9 billion to Intertrend, Narkata, Belayan and Integriya respectively. The loan bore an interest of12.0% per annum and was due on December 31, 2016.

On March 1, 2016, the Company obtained a loan from Synergy Alam Corporation (the "SAC") of up toRp34,734,666,370. The loan bears no interest and has a maturity date of January 31, 2017. OnDecember 31, 2016, the outstanding balance of other payables to SAC amounted to Rp1,680,353,625.

c. Taxes Payable

As of December 31, 2016, the outstanding balance of the Company's taxes payable wasRp43,462,855,487. The breakdown of the Company's taxes payable as of December 31, 2016 is asfollows:

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(in Rupiah)Description As of December 31, 2016The CompanyIncome Tax

Article 4 (2) 37,772,400Article 15 32,996,923Article 21 200,201,642Article 22 37,714,275Article 23 96,795,164Article 29 of 2016 20,765,451,078

Sub-total 21,170,931,482SubsidiaryValue Added Tax 2,107,191,979Income Tax

Article 4 (2) 53,182,936Article 15 18,207,666Article 21 46,943,458Article 22 39,566,409Article 23 331,309,261Article 25 325,531,399Article 29 of 2016 19,138,174,147Article 29 of 2015 231,816,750

Sub-total 22,291,924,005Total 43,462,855,487

d. Advance from Customers

As of December 31, 2016, the outstanding balance of the Company's advance from customers wasRp72,604,179,566. The breakdown of the Company's advance from customers as of December 31, 2016is as follows:

(in Rupiah)Description As of December 31, 2016Third Parties

PT Karya Cipta Sukses Anugerah 7,008,142,782PT Karya Cipta Sukses Selaras 3,941,889,521PT Pakuwon Permai 2,998,550,728Condor Manufacturing Furniture Ltd. 2,814,789,465Casana Furniture Corporation 2,339,294,100Broyhill Furniture Industries, Inc. 1,465,100,000Others (each below Rp1 billion) 4,225,050,592Total 24,792,817,188

2. Non-Current Liabilities

a. Long-Term Bank and Non-Bank Financial Institution Loans

(in Rupiah)Description As of December 31, 2016The CompanyThird Parties

EximTransactional export working capital credit facility 54,000,000,000Export investment credit facility IV 27,747,548,069

PT BCA Finance 894,179,470PT Orix Indonesia Finance 163,960,968Sub-total 82,805,688,507

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Description As of December 31, 2016

SubsidiariesThird Parties

PT Bank Negara Indonesia (Persero) Tbk 98,933,333,331PT BCA Finance 4,230,106,575PT Equity Finance Indonesia 949,424,587PT Astra Sedaya Finance 188,180,895PT Chandra Sakti Utama Leasing 187,301,569

Sub-total 104,488,346,957Total 187,294,035,464Current Maturities (26,475,634,258)Long-term portion 160,818,401,206

The Company

In November 2015, the Company obtained a transactional export working capital credit facility and anexport investment credit facility IV of up to Rp54,000,000,000 and Rp46,000,000,000, respectively.These facilities will be due in November 2019.

In 2016, these facilities bore interest rates of 6.6% per annum for loan denominated in USD, and 10.0%per annum for loan denominated in Rupiah. The facilities are collateralized with certain of the Company’sfixed assets, trade receivables, inventories, as well as personal guarantees from certain Directors.

From 2014 to 2016, the Company entered into agreements for the ownership of a vehicle with PT BCAFinance which was payable in monthly installments from 2017 to 2019. This facility bore an interest rateof 2.4% to 5.7% per annum in 2016.

In 2016, the Company entered into a loan agreement for a vehicle with PT Orix Indonesia Finance whichwas payable in monthly installments until 2019. This facility bears a interest rate of 7.4% per annum.

Subsidiaries

In 2015, Interkraft obtained an investment credit facility from BNI of up to Rp112,000,000,000. This wasused for the construction of factories and the purchase of production machinery in Lamongan.

This facility is to be paid in 60 monthly installments after the grace period and will be payable until June16, 2021. This facility was collateralized with the same collateral as that of the short-term loan facilitiesand bears interest rate of 11.5% per annum.

In 2014 to 2016, Intertrend, Interkraft, Belayan and Intera, entered into loan agreements for vehicles withPT BCA Finance which is payable in monthly installments until 2019. These facilities bore an interestrate of 3.1%, per annum in 2016.

In 2014, Narkata obtained heavy equipment ownership credit facility from PT Equity Finance Indonesiawhich is to be repaid in monthly installments until 2018. This facility bore an interest rate of 9.14% perannum in 2016.

In 2016, Interkayu entered into an agreement for the ownership of vehicle with PT Astra Sedaya Financewhich is to be repaid in monthly installments until 2018 and bore an interest rate of 4.69% per annum in2016.

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In 2016, Narkata obtained heavy equipment ownership credit facility from PT Chandra Sakti UtamaLeasing which is to be repaid in monthly installments until 2019. This facility bore an interest rate of 5.5%per annum in 2016.

Compliance with Credit Terms and Conditions

As of December 31, 2016, the Group has either complied with all of the terms of the above-mentionedloan agreements as set out in the respective loan agreements or obtained necessary waivers asrequired.

b. Capital Lease Payables

As of December 31, 2016, the outstanding balance of the Company's capital lease payables wasRp18,133,341,801, comprising of short-term and long-term capital lease payables of Rp9,093,528,058and Rp9,039,813,743, respectively, as detailed below:

(in Rupiah)Description As of December 31, 20162017 9,626,360,3992018 9,268,715,6222019 1,454,168,000Total minimum payment 20,349,244,021Less future finance cost 2,215,902,220Present value of future minimum lease payments 18,133,341,801Less current maturities 9,093,528,058Long-term portion 9,039,813,743

The Group entered into a finance lease agreements with PT Orix Indonesia Finance, PT BFI FinanceIndonesia Tbk, PT Equity Finance Indonesia and PT Chandra Sakti Utama Leasing, PT BCA Finance,and PT Astra Sedaya Finance, the terms of these finance leases range from 24 to 48 months.

c. Employee Benefits Liabilities

As of December 31, 2016, the outstanding balance of the Company's employee benefits liabilities wereRp27,231,441,609. The breakdown of the Company's employee benefits liabilities as of December 31,2016 is as follows:

(in Rupiah)Description As of December 31, 2016Balance at beginning of year 19,627,280,409Current service cost 6,092,118,492Interest cost 1,766,455,237Actuarial gain due to change in financial assumption (254,412,529)Balance at end of year 27,231,441,609

The Group recognized a provision for unfunded employee benefits to employees who reach retirementage in accordance with the Law No. 13/2003 dated March 25, 2003. In the management's opinion, thepost-employment benefits estimate referred to above is sufficient to cover the Company's post-employment benefits.

The calculation of the post-employment benefits as of December 31, 2016, was performed based onactuarial calculation by an independent actuary, PT Dian Artha Tama, with its reports dated February 24,2017, using the "Projected Unit Credit" method and based on the following assumptions:

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2016Retirement age 55 yearsAnnual rate of increase in salary 5.0%Mortality table TMI – III (2011)Annual discount rate 8.4%Disability rate 0.02%Rate of resignation 5.0% per annum in 18 years old and decrease gradually

up to 0% per annum in 55 years old.

d. Deferred Tax Liabilities

The breakdown of the Company’s deferred tax liabilities as of December 31, 2016, is as follows:

(in Rupiah)Description As of December 31, 2016The CompanyEmployee benefits (3,525,730,188)Financial lease 1,803,930,349Revaluation surplus of fixed assets 134,809,501,346Trade receivables (64,715,020)Sub-total 133,022,986,487SubsidiariesEmployee benefits (2,927,483,171)Fixed assets 2,595,491,120Revaluation surplus of fixed assets 79,465,470,263Trade receivables (77,994,186)Sub-total 79,055,484,026Total 212,078,470,513

THE MANAGEMENT HEREBY DECLARES THAT THERE ARE NO VIOLATIONS OF THE TERMS OFTHE CREDIT AGREEMENTS ENTERED INTO BY THE COMPANY OR ITS SUBSIDIARIES THATMAY HAVE A MATERIAL IMPACT ON THE COMPANY AS A GOING CONCERN, INCLUDING THEEXPLANATION OF THE TERMS OF THE CREDIT AGREEMENTS INFRINGEMENT, AND ACTIONSWHICH HAVE BEEN OR WILL BE TAKEN BY THE COMPANY OR THE SUBSIDIARIES INCLUDINGTHE LATEST DEVELOPMENT ON NEGOTIATION IN THE FRAMEWORK OF CREDITRESTRUCTURING.\

FROM DECEMBER 31, 2016, BEING THE DATE OF THE INDEPENDENT AUDITOR'S REPORT ONTHE COMPANY'S CONSOLIDATED FINANCIAL STATEMENTS, TO APRIL 28, 2017, AND FOR THEYEAR ENDED ON DECEMBER 31, 2016 AND FROM THE DATE OF THE INDEPENDENTAUDITOR’S REPORT UP TO THE EFFECTIVE DATE OF THE REGISTRATION STATEMENT, THEMANAGEMENT, HEREBY DECLARES THAT THERE HAS NOT BEEN ANY NEGLIGENT CONDUCTBY THE COMPANY OR ITS SUBSIDIARIES IN THE GROUP FOR THE PAYMENT OF PRINCIPALAMOUNT AND/OR INTEREST, INCLUDING THE LATEST DEVELOPMENT ON NEGOTIATION INTHE FRAMEWORK OF CREDIT RESTRUCTURING.

ALL OF THE COMPANY'S CONSOLIDATED LIABILITIES AS OF DECEMBER 31, 2016, HAVE BEENDISCLOSED IN THIS PROSPECTUS. AS OF THE DATE OF THIS PROSPECTUS, THE COMPANYHAS PAID ALL OF ITS CONSOLIDATED LIABILITIES THAT ARE DUE. THERE ARE NOLIABILITIES THAT ARE DUE BUT NOT YET PAID BY THE COMPANY.

FROM DECEMBER 31, 2016, TO BEING THE DATE OF THE INDEPENDENT AUDITOR'S REPORTON THE COMPANY'S CONSOLIDATED FINANCIAL STATEMENTS, TO APRIL 28, 2017, AND FORTHE YEAR ENDED ON DECEMBER 31, 2016, AND FROM THE DATE OF THE INDEPENDENTAUDITOR’S REPORT UP TO THE EFFECTIVE DATE OF THE REGISTRATION STATEMENT, THE

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COMPANY DOES NOT HAVE ANY OTHER LIABILITIES AND COMMITMENTS OTHER THAN THELIABILITIES ARISING IN THE ORDINARY COURSE OF BUSINESS AND THE LIABILITIES THATHAVE BEEN STATED ON AND DISCLOSED IN THE CONSOLIDATED FINANCIAL STATEMENTSAND THIS PROSPECTUS.

THE MANAGEMENTHEREBY REPRESENTS THAT THE GROUP HAS THE ABILITY TO MEET THELIABILITIES DISCLOSED IN THE FINANCIAL STATEMENTS AND PRESENTED IN THISPROSPECTUS AS THEY FALL DUE.

THERE ARE NO NEGATIVE COVENANTS IN EACH OF THE LIABILITIES WHICH THE GROUP IS INTHE PROCESS OF GETTING APPROVAL FOR FROM THE CREDITORS.

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IV. KEY FINANCIAL HIGHLIGHTSThe following table presents the Company’s key consolidated financial highlights. The figures in theCompany's key consolidated financial highlights are derived from the Company's consolidatedstatements of financial position as of December 31, 2016, 2015 and 2014, the Company's consolidatedstatements of profit or loss and other comprehensive income, as well as the Company's statements ofchanges in equity and statements of cash flows for the years ended on December 31, 2016, 2015 and2014, all of which were audited by Teramihardja, Pradhono dan Chandra (Rödl & Partner), RegisteredPublic Accountants, with an unmodified opinion and an emphasis of matter in relation to the change inthe functional currency of the Company and certain Subsidiaries from USD to IDR.

The figures in the Company's key consolidated financial highlights for the consolidated statement offinancial position as of December 31 2016, 2015, and 2014, the consolidated statement of profit or lossand other comprehensive income, consolidated statement of changes in equity and consolidatedstatement of cash flows for the years ended on December 31, 2016, 2015, and 2014, which were auditedby Teramihardja, Pradhono and Chandra (Rödl & Partner), Registered Public Accountants. The auditor'sreport dated April 28, 2017, which was unmodified and signed by Agustina Felisa, and with an emphasisof matter in relation to the change in the functional currency of the Company and certain Subsidiariesfrom USD to IDR. The change of the Company's and its Subsidiaries’ functional currency was inaccordance with PSAK 10 (Revised 2010) on "The Effects of Changes in Foreign Exchange Rates,"which required the restatement of the accompanying consolidated financial statements as of December31, 2015, 2014, and January 1, 2014/December 31, 2013, attached herein, by the Group as required bythe Indonesian Financial Accounting Standard in its report signed by Agustina Felisia.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

(In Rupiah)Description December 31,

2012* 2013* 2014 2015 2016ASSETSCURRENT ASSETSCash and cash equivalents 22,385,586,066 20,371,538,807 27,003,675,052 116,330,998,235 30,449,572,479Trade receivables - third parties,

net 70,698,364,436 92,894,763,711 126,453,215,078 103,254,127,607 187,911,663,923Other receivables

Related Parties - - - 5,705,000,000 9,705,000,000Third Parties 42,996,597,049 35,249,397,253 85,975,091,310 83,975,605,783 69,537,812,441

Inventories 352,257,331,533 402,841,557,735 370,729,131,373 575,780,894,734 893,017,247,860Prepaid taxes 29,400,020,110 33,970,988,735 53,483,073,353 86,641,875,124 57,865,781,855Prepaid expenses 999,918,298 1,450,140,674 8,185,548,964 8,155,804,028 11,996,020,252Advances for purchase 8,907,642,620 28,192,884,873 38,666,930,986 29,251,710,800 64,658,888,752Estimated claim for tax refund - 5,411,964,756 4,381,778,520 2,976,593,074 2,560,280,979Total Current Assets 527,645,460,112 620,383,236,544 714,878,444,636 1,012,072,609,385 1,327,702,268,541

NON-CURRENT ASSETSOther Receivables 29,582,959,231 21,570,000,000 - - -Advances for purchases 9,024,662,880 11,671,494,154 49,233,418,595 32,135,724,826 83,412,735,768Deferred tax assets 1,536,037,153 180,186,768 200,573,224 1,557,777,573 3,112,995,737Fixed assets - net 333,978,074,919 674,898,324,892 745,755,613,017 954,784,745,618 1,642,859,190,372Investment properties - - - 5,334,000,000 15,880,000,000Other assets 8,878,057,916 20,312,497,858 11,096,476,681 8,587,664,705 8,907,020,077Total Non-Current Assets 382,999,792,099 728,632,503,672 806,286,081,517 1,002,399,912,722 1,754,171,941,954TOTAL ASSETS 910,645,252,211 1,349,015,740,216 1,521,164,526,153 2,014,472,522,107 3,081,874,210,495

LIABILITIES AND EQUITYCURRENT LIABILITIESBank and non-bank financial

institution loans 415,239,245,747 496,693,792,132 592,878,060,190 766,860,659,223 907,825,110,478Trade payables - third parties 69,865,118,194 66,452,956,850 77,986,237,180 92,080,340,642 72,604,179,566Other Payables

Third Parties 48,266,485,620 21,590,212,524 2,203,632,409 11,607,525,581 5,654,871,991Accrual Expenses 3,385,317,716 4,938,478,582 13,492,332,427 24,607,397,552 11,449,731,647Taxes payable 1,752,387,794 3,836,129,976 1,307,234,867 5,171,757,786 43,462,855,487

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(In Rupiah)Description December 31,

2012* 2013* 2014 2015 2016Advance from customers 9,588,843,800 14,927,158,259 9,153,927,568 25,429,552,176 24,792,817,188Current maturities of long-term

liabilitiesBank and non-bank financial

institution loans - 105,413,649,771 10,647,141,064 14,666,943,669 26,475,634,258Obligation under finance lease 12,074,759,190 11,718,343,431 14,890,374,606 8,823,113,862 9,093,528,058

Total Current Liabilities 560,172,158,061 725,570,721,525 722,558,940,311 949,247,290,491 1,101,358,728,673

NON-CURRENT LIABILITIESLong-term liabilities - net of

current maturitiesBank and non-bank financial

institution loans 115,674,836,249 9,477,036,251 2,896,321,840 198,219,164,268 160,818,401,206Obligation under finance lease 12,723,471,939 5,103,256,605 19,039,788,936 11,072,193,969 9,039,813,743

Other payablesRelated party - 76,122,623,993 94,510,018,600 82,600,391,671 141,314,372,925Third parties - - 20,470,000,000 620,400,000 -

Deferred tax liabilities 2,343,184,510 47,058,929,941 49,276,052,995 46,102,573,417 212,078,470,513Employee benefits liabilities 7,329,925,957 12,656,690,603 16,055,031,298 19,627,280,409 27,231,441,609

Total Non-Current Liabilities 138,071,418,655 150,418,537,393 202,247,213,669 358,242,003,734 550,482,499,996TOTAL LIABILITIES 698,243,576,716 875,989,258,918 924,806,153,980 1,307,489,294,225 1,651,841,228,669

(In Rupiah)

Description December 31,2012* 2013* 2014 2015 2016

EQUITYEquity attributable to the

equity holders of the parentcompany

Share capital - par value ofRp100 per share in 2016, andRp1,000,000 per share in2015, 2014, 2013 and 2012Authorized capital -20,000,000,000 shares in2016, 250,000 shares in2015, 2014, 2013 and 2012Issued and fully paid-in capital- 5,000,000,000 shares in2016, 195,000 shares in2015, and 100,000 shares in2014, 2013 and 2012 100,000,000,000 100,000,000,000 100,000,000,000 195,000,000,000 500,000,000,000

Additional paid-in capital 24,045,697,456 24,045,697,456 119,045,697,456 24,045,697,456 25,093,405,789Exchange difference due to

translation of financialstatements 51,230,102,645 100,627,151,865 105,769,457,388 141,425,224,187 141,425,224,187

Revaluation surplus of fixedassets – net - 159,897,200,803 155,811,192,447 139,866,947,544 640,440,950,720

Differences equity transactionswith non-controlling interest - 510,692,166 510,692,166 510,692,166 1,763,749,431

Retained earnings 29,330,511,387 77,972,229,567 95,450,012,909 165,264,491,867 95,685,208,599Sub-total 204,606,311,488 463,052,971,857 576,587,052,366 666,113,053,220 1,404,408,538,726Non-controlling interest 7,795,364,007 9,973,509,441 19,771,319,807 40,870,174,662 25,624,443,100TOTAL EQUITY 212,401,675,495 473,026,481,298 596,358,372,173 706,983,227,882 1,430,032,981,826TOTAL LIABILITIES ANDEQUITY 910,645,252,211 1,349,015,740,216 1,521,164,526,153 2,014,472,522,107 3,081,874,210,495Note: * audited by Teramihardja, Pradhono & Chandra (Rödl & Partner), Registered Public Accountants, with an unmodified opinion and an emphasis ofmatter in relation to the change in the functional currency of the Company and certain Subsidiaries from USD to IDR

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

(In Rupiah)Description For the year ended on December 31

2012* 2013* 2014 2015 2016Net sales 723,531,096,947 864,661,692,442 996,105,258,868 1,118,696,671,711 1,323,388,979,039Cost of goods sold (582,772,257,482) (704,985,562,063) (836,916,693,334) (876,991,059,336) (865,229,995,699)GROSS PROFIT 140,758,839,465 159,676,130,379 159,188,565,534 241,705,612,375 458,158,983,340Selling expenses (21,648,505,013) (27,648,289,202) (33,182,814,062) (45,714,062,523) (64,638,717,267)General and administrative expenses (40,260,227,644) (48,039,070,893) (51,363,844,019) (79,944,456,088) (110,012,317,898)

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(In Rupiah)Description For the year ended on December 31

2012* 2013* 2014 2015 2016Gain (loss) on foreign exchange - net (26,456,260,155) 8,963,473,651 6,055,309,186 7,297,546,317 9,466,292,727Interest Expense (32,837,339,068) (49,706,414,160) (61,416,255,732) (67,307,212,559) (105,943,138,891)Bank administration charges (1,718,752,959) (1,338,508,018) (1,212,791,628) (3,090,609,915) (2,138,867,004)Interest income 290,304,006 218,342,270 222,261,844 749,969,374 893,970,605Gain (loss) on disposal of fixed assets 253,931,509 308,662,122 (3,074,840,894) (18,890,632,216) (990,036,967)Miscellaneous - net 4,186,870,067 7,839,421,719 7,168,537,414 8,132,624,499 10,285,055,877PROFIT BEFORE TAX BENEFIT(EXPENSE)

22,568,860,208 50,273,747,868 22,384,127,643 42,938,779,264 195,081,224,522

TAX BENEFIT (EXPENSE)Current (6,533,125,501) (6,393,105,871) (5,636,464,967) (13,771,265,405) (58,549,280,250)Deferred 644,776,129 8,089,283,657 (1,305,018,788) 9,363,792,298 4,549,279,746Total tax benefit (expense) - net (5,888,349,372) 1,696,177,786 (6,941,483,755) (4,407,473,107) (54,000,000,504)PROFIT FOR THE YEAR 16,680,510,836 51,969,925,654 15,442,643,888 38,531,306,157 141,081,224,018OTHER COMPREHENSIVE INCOME(LOSSES)Items that can be reclassified to profit or lossExchange difference due to translation of

financial statements 51,306,485,249 49,649,197,169 8,144,944,662 51,980,001,268 -Items that will not be reclassified to profit or

lossIncrease (decrease) on revaluation of fixed

assets - net - 160,497,231,388 (4,073,415,308) - 506,719,066,642Remeasurement on employee benefits

liabilities - net - 3,373,972,847 (236,782,367) 1,548,284 190,809,397Total other comprehensive income 51,306,485,249 213,520,401,404 3,834,746,987 51,981,549,552 506,909,876,039TOTAL COMPREHENSIVE INCOME FOR

THE YEAR 67,986,996,085 265,490,327,058 19,277,390,875 90,512,855,709 647,991,100,057

Profit for the year attributable to:Owners of the parent company 14,642,836,618 51,149,733,145 14,738,392,771 37,891,275,532 140,696,905,072Non-controlling interest 2,037,674,218 820,192,509 704,251,117 640,030,625 384,318,946

TOTAL 16,680,510,836 51,969,925,654 15,442,643,888 38,531,306,157 141,081,224,018Total comprehensive income for the year

attributable to:Owners of the parent company 67,469,132,467 263,791,391,139 18,534,080,509 89,526,000,854 645,499,410,623Non-controlling interest 517,863,618 1,698,935,919 743,310,366 986,854,855 2,491,689,434

TOTAL 67,986,996,085 265,490,327,058 19,277,390,875 90,512,855,709 647,991,100,057BASIC EARNINGS PER SHARE 6.97 24.36 7.02 11.05 43.31DIVIDEND PER SHARE - - - - 42.90

Note: * audited by Teramihardja, Pradhono & Chandra (Rödl & Partner), Registered Public Accountants, with an unmodified opinion and an emphasis ofmatter in relation to the change in the functional currency of the Company and certain Subsidiaries from USD to IDR

KEY CONSOLIDATED FINANCIAL RATIOS

Description For the year ended on December 312012 2013 2014 2015 2016

Growth Ratios (%)Net Sales 98.19 19.51 15.20 12.31 18.30Gross profit 89.85 13.44 (0.31) 51.84 89.55Profit before income tax benefit (expense) 77.90 122.76 (55.48) 91.83 354.32Profit for the year 79.00 211.56 (70.29) 149.51 266.15Comprehensive Income for the year 629.58 290.50 (92.74) 369.53 615.91

Operating Ratios (%)Profit before income tax benefit (expense) to net sales 3.12 5.81 2.25 3.84 14.74Profit before income tax benefit (expense) to total assets 2.48 3.73 1.47 2.13 6.33Profit before income tax benefit (expense) to equity 10.63 10.63 3.75 6.07 13.64Comprehensive income for the year to net sales 9.40 30.70 1.94 8.09 48.96Comprehensive income for the year to total assets 7.47 19.68 1.27 4.49 21.03Comprehensive income for the year to equity 32.01 56.13 3.23 12.80 45.31

Financial Ratios (x)Current assets to current liabilities 0.94 0.86 0.99 1.07 1.21

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Description For the year ended on December 312012 2013 2014 2015 2016

Non-current liabilities to equity 0.65 0.32 0.34 0.51 0.38Interest-bearing debt to equity 2.62 1.49 1.23 1.53 0.88Total liabilities to equity 3.29 1.85 1.55 1.85 1.16Total liabilities to total assets 0.77 0.65 0.61 0.65 0.54EBITDA/interest expense on loans 2.64 2.95 2.19 2.53 3.54

Financial Ratios Required in Loan Agreements or Other Liabilities and Their Compliance

Financial Ratios Required in the Loan Agreements or Other Liabilities The Company's Financial Ratiosas of December 31, 2016

Current ratio (minimum 1x) 1.21xTotal liabilities to equity (maximum 3x) 1.16xDebt Service Coverage Ratio (DSCR) (minimum 1x) 2.85xGearing ratio/interest-bearing debt to equity (maximum 1.25x) 0.88xInterest Service Coverage Ratio (minimum 1x) 3.54xReceivables and inventories to total working capital (minimum 110.0%) 119.07%

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V. MANAGEMENT'S DISCUSSIONS AND ANALYSISThe management’s discussions and analysis on financial condition and operating results presented inthis section must be read together with the Company's consolidated financial statements for the fiscalyears ended on December 31, 2016, 2015, and 2014, and related notes, which are presented in"Independent Auditor's Report and the Company's Consolidated Financial Statement". The discussionsand analysis presented below contain forward-looking statements that are subject to a certain level ofrisks and uncertainties. The Company’s future consolidated financial and operating results may differsignificantly with the projections contained in these forward-looking statements. Factors that may causesignificant differences from the projections contained in these forward-looking statements are discussedin, but not limited to, the following discussions and other related sections in this Prospectus, particularly"Risk Factors".

The following discussions have been prepared based on the Company's consolidated statement offinancial position as of December 31, 2016, 2015, and 2014, and consolidated statement of profit or lossand comprehensive income for the years ended on December 31, 2016, 2015, and 2014. TheCompany's consolidated financial statement as of December 31, 2016, 2015, and 2014, were audited byTeramihardja, Pradhono & Chandra (Rödl & Partner), Registered Pubic Accountants, with an unmodifiedopinion and an emphasis of matter in relation to the change of the functional currency of the Companyand certain Subsidiaries from USD to Rupiah in its report signed by Agustina Felisa dated April 28, 2017.

1. OVERVIEW

The Company was established under the name of PT Integra Indocabinet pursuant to the Deed ofEstablishment of the Limited Liability Company PT Integra Indocabinet No. 147 dated May 19, 1989,drawn up before Soetjpto, S.H., a Notary in Surabaya, which was approved by the Minister of Justiceand Human Rights of the Republic of Indonesia under Decree No. C2-320.HT.01.01.TH.90 datedJanuary 20, 1990, and was registered in the registry of the Surabaya District Court under No. 180/1990dated February 21, 1990 (the "Deed of Establishment").

The latest amendment to the Company's Articles of Association was set out in the Deed of Minutes ofExtraordinary General Meeting of Shareholders of PT Integra Indocabinet No. 17 dated March 7, 2017,drawn up before Fathiah Helmi, S.H., a Notary in Jakarta, which was (i) approved by the MoLHR underDecree No. AHU-0005787.AH.01.02.TAHUN 2017 dated March 8, 2017, and was (i) received andregistered in the database of the Legal Entity Administration System of the Ministry of Law and HumanRights, each under No. AHU-AH.01.03-0116016 (for the amendment of the Company’s Articles ofAssociation) and No. AHU-AH.01.03-0116017 (for the Company's data change) dated March 8, 2017,and was registered in the Company Register under No. AHU-0005787.AH.01.02.TAHUN 2017 datedMarch 8, 2017, which, among others, set out the approval of the Shareholders on (i) the amendment ofthe Articles of Association in its entirety to conform to the prevailing laws and regulations in the capitalmarket; (ii) the change of the Company’s status from a private company to a public company; (iii) theissuance of the Offering Shares from the portfolio; (iv) the issuance of new shares from the Company'sportfolio issued pursuant to the allocation of new shares in the Company to be issued under the ESAprogram and (v) the issuance of new shares pursuant to the MESOP (the "Deed No. 17/2017").As set forth in the Deed No. 17/2017, the Company's aims and objectives are to engage in the industrial,trade and service businesses.



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1. To engage in industrial businesses, among others, furniture and wood, wood and cork products,and bamboo and rattan wickerwork industries and other similar industries.

2. To engage in trade, including export-import, inter-island and local trade, of products producedindependently or by other parties that are marketed by the Company; act as a wholesaler,purveyor/supplier, franchisee, and commission house and other related business activities; act as adistributor, agent and representative of other domestic and international enterprises; and trade ofthe industrial products referred to above.

3. To engage in services business, except for legal and tax services.


Creative business activities relating to the creation of graphic design, interior design, product design,industrial design, corporate identity consulting, market research service and product packaging services,and packaging services.


The Company’s current business activities are focused on the of production of wood-based furniture andother wooden products, forestry concession and furniture distribution, as well as home decorationsthrough the Group.

2. FACTORS AFFECTING THE COMPANY'S FINANCIAL CONDITION AND RESULTS

The Company’s business activities and operations are affected by a number key factors, such as:

a. Foreign exchange rate fluctuationsThe Company's export revenue is denominated in USD, whereas the majority of its expenses isdenominated in Rupiah. Pursuant to Bank Indonesia Regulation No. 17/3/PBI/2015 concerningMandatory Use of Rupiah Within the Jurisdiction of the Republic of Indonesia, the Company'stransactional currency for domestic transactions such as payment of salaries and wages,procurement of materials from domestic companies and other operating expenses is Rupiah. TheCompany's consolidated financial statements are prepared in Rupiah. Therefore, any fluctuation inthe exchange rate between the USD and the Rupiah will affect the accounting of the Company'sexport revenue in the Company's consolidated financial statements, which may result in fluctuationsof the Company's export revenue and profit, which are recorded in Rupiah.

b. Business competitionThe Group faces business competition from domestic and international companies. In response tosuch business competition, the Company implements promotional and marketing programs,including the offering of competitive sales prices to maintain its customer base. Although an increasein promotional and marketing costs may result in lower profit as a result of increased costs, theCompany seeks to implement its promotional and marketing programs in an efficient and effectivemanner to minimize the increase of costs.

c. Increase in production costAny increase of the regional minimum wage, the price of fuel used for product transportation,electricity cost and raw material cost (although historically, the price of wood raw materials arerelatively stable) may increase production cost and consequently lower the Company's profit if suchincrease in production cost is not offset by an increase in sales price.

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d. Loan interest rateThe interest rate risk of the Company primarily comes from bank and non-bank financial institutionloans obtained by the Company as the fair value of future cash flows may fluctuate arising from thechanges in market interest rates. The Company manages this risk by constantly monitoring theprevailing market interest rates movements and managing the availability of cash flows used torepay loans and working capital.

3. SIGNIFICANT ACCOUNTING POLICY CHANGE

Starting from January 1, 2016, the Group’s functional currency, according to its expenses and financingactivities, was Indonesian Rupiah. Thus, the recording of the Group’s financial statements changed fromUSD to IDR.

In accordance with PSAK 10, when there is a change in an entity’s functional currency, the entity shallapply the translation procedures applicable to the new functional currency prospectively from the date ofthe change of functional currency, which in the case of the Group is effective since January 1, 2016.Hence, the Group has translated its consolidated financial statements as of and for the year ended onDecember 31, 2015 and financial statements for prior periods that were issued in USD to IDR using thefollowing procedures:1) Assets and liabilities for each consolidated statement of financial position presented (i.e. including

comparatives) were translated at the closing exchange rate at the date of that consolidatedstatement of financial position;

2) Income and expenses for each consolidated statement of profit and other comprehensive income orseparate income statement presented (i.e. including comparatives) shall be translated at therelevant exchange rates at the dates of the transactions; and

3) All resulting exchange differences were recognized in other comprehensive income.

The following are the financial ratios which were affected by the change of the Company’s accountingpolicy:

2015 2014Before Translation After Translation Before Translation After Translation

ROA 2.13% 1.91% 1.07% 1.02%ROE 6.02% 5.45% 2.72% 2.59%

4. OPERATING SEGMENTS

Management monitors the operating results of its business units separately for the purpose of makingdecisions about resource allocation and to assess performance. Segment performance is evaluatedbased on operating profit or loss and measured consistently against operating profit or loss in theconsolidated financial statement.

Transfer prices between legal entities and segments are determined in a manner similar to transactionswith third parties.

The following table presents information regarding the Group’s operating segments:

(In Rupiah)Manufacturing Forestry Retail &

Distribution Elimination Total

For the year ended on December 31, 2016Sales

Export 1,026,540,465,068 - - - 1,026,540,465,068Local 305,849,159,828 246,350,857,933 36,204,535,529 (291,556,039,319) 296,848,513,971

Total sales 1,332,389,624,896 246,350,857,933 36,204,535,529 (291,556,039,319) 1,323,388,979,039

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Manufacturing Forestry Retail &Distribution Elimination Total

Reportable segmentoperating profit 381,358,174,212 63,423,900,972 11,490,391,916 1,886,516,240 458,158,983,340Profit for the year 248,537,160,026 14,994,971,389 (9,644,396,316) (112,806,511,081) 141,081,224,018

(In Rupiah)Manufacturing Forestry Retail & Distribution Elimination Total


Export 934,570,856,734 - - - 934,570,856,734Local 83,967,126,076 116,215,944,705 15,690,047,060 (31,747,302,864) 184,125,814,977

Total sales 1,018,537,982,810 116,215,944,705 15,690,047,060 (31,747,302,864) 1,118,696,671,711Reportable segmentoperating profit 198,860,792,892 37,425,651,556 4,459,787,060 959,380,867 241,705,612,375Profit for the year 37,322,106,952 3,597,223,987 (1,698,020,145) (690,004,637) 38,531,306,157

(In Rupiah)Manufacturing Forestry Retail & Distribution Elimination Total


Export 693,677,348,752 - - - 693,677,348,752Local 165,867,214,698 201,117,894,571 10,501,664,547 (75,058,863,700) 302,427,910,116

Total sales 859,544,563,450 201,117,894,571 10,501,664,547 (75,058,863,700) 996,105,258,868Reportable segmentoperating profit 114,205,488,236 40,516,673,349 3,000,749,113 1,465,654,836 159,188,565,534Profit for the year 8,803,266,034 5,896,324,888 786,265,898 (43,212,932) 15,442,643,888

The following sets out the detailed production capacity of the Group's manufacturing activities:

2014 2015 2016FurnitureInstalled Capacity (m3) 17,763 23,450 35,044Production Volume (m3) 12,588 15,578 16,155Utilization (%) 70.9 66.4 46.1

Building ComponentInstalled Capacity (m3) 17,558 35,558 133,338Production Volume (m3) 15,918 18,120 57,008Utilization (%) 90.7 51.0 42.8Source: The Company's Management

Sales

In 2016, sales in the manufacturing, forestry and retail & distribution segments were 100.68%, 18.62%and 2.74% of total consolidated sales, respectively, before eliminating sales arising from inter-companytransactions within the Company.

In 2015, sales of the manufacturing, forestry and retail & distribution segments were 91.05%, 10.39%and 1.40% of total consolidated sales, respectively, before eliminating sales arising from inter-companytransactions within the Company.

In 2014, sales of the manufacturing, forestry and retail & distribution segments were 86.29%, 20.19%and 1.05% of total consolidated sales, respectively, before eliminating sales arising from inter-companytransactions within the Company.

The contribution of the manufacturing segment to the total revenue for the year grew by 9.63% and4.76% in 2016 and 2015, respectively, due to an increase in the export of building components as wellas an increase in the sales of local building components, knock-down furniture and set-up furniture.

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The contribution of the forestry segment to the total revenue for the year grew by 8.23% and -9.80% in2016 and 2015, respectively, due to an increase in timber sales in 2016 while in 2015 the Company wasunable to move timber from logging sites to warehouses due to the drying rivers.

Gross profit

In 2016, gross profit from the manufacturing, forestry and retail & distribution segments were respectively83.24%, 13.84% and 2.51% of the consolidated gross profit, respectively, before eliminating sales arisingfrom inter-company transactions within the Company.



The contribution of the manufacturing segment to the gross profit grew by 0.96% and 10.53% in 2016and 2015, respectively, due to improved efficiency in aspects such as the utilization of waste wood asraw material for furniture production, an increase in product prices due to their improved colour anddesign, reduced sale of low margin products such as rattan baskets and reduced prices in raw materialsespecially for paint and medium density fiberboards.

The contribution of the forestry segment to the gross profit decreased by -1.64% and -9.97% in 2016 and2015, respectively, due to the fact that the manufacturing segment experienced a more significantincrease, causing the gross profit of the forestry sector to decrease from year to year.

Profit for the year

Profit for the year in the manufacturing, forestry and retail & distribution segments in 2016 was 176.17%,10.63% and -6.84% of consolidated profit in 2016, respectively, before eliminating sales arising frominter-company transactions within the Company.

Profit for the year in the manufacturing, forestry and retail & distribution sectors were 96.86%, 9.34% and-4.41% of consolidated profit in 2015, respectively, before eliminating sales arising from inter-companytransactions within the Company.

Profit for the year in the manufacturing, forestry and retail & distribution sectors were 57.01%, 38.18%and 5.09% of consolidated profit in 2014, respectively, before eliminating sales arising from inter-company transactions within the Company.

The contribution of the manufacturing segment to the profit for the year grew by 79.30% and 39.86% in2016 and 2015, respectively, due to increase in the export of building component as well as an increasein the sales of local building component, knock-down furniture and set-up furniture as well as improvedmanufacturing efficiency.

The contribution of the forestry segment to the profit for the year in the grew by 1.29% and -28.85% in2016 and 2015, respectively, due to the fact that in 2015 the Company was unable to move the logs fromthe logging site to the warehouses due to the drying rivers.

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The contribution of the retail & distribution segment to the profit for the year decreased by -2.43% and -9.50% in 2016 and 2015, respectively, as the new retail store just commenced its commercial operationin mid-2016, resulting to unmaximized sales and unable to cover its operational expenses.

Production Volume

In 2016, 2015 and 2014, the production volume of furniture in the manufacturing sector was 16,155m3,15,578m3 and 12,588m3, respectively. The production volume from the manufacture of buildingcomponent in 2016, 2015 and 2014 were 57,008m3, 18,120m3 and 15,918m3, respectively. The year-on-year increase of the Company's production volume was in line with the increase in sales of theCompany.

5. FINANCIAL ANALYSIS

The following table presents detailed information on the Company's consolidated operating results for theyears ended on December 31, 2016, 2015 and 2014.

I. CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVEINCOME

(In Rupiah)

Description For the year ended on December 312014 2015 2016

Net Sales 996,105,258,868 1,118,696,671,711 1,323,388,979,039Cost of Goods Sold (836,916,693,334) (876,991,059,336) (865,229,995,699)GROSS PROFIT 159,188,565,534 241,705,612,375 458,158,983,340Selling expenses (33,182,814,062) (45,714,062,523) (64,638,717,267)General and Administrative Expenses (51,363,844,019) (79,944,456,088) (110,012,317,898)Gain (loss) on foreign exchange - net 6,055,309,186 7,297,546,317 9,466,292,727Interest Expense (61,416,255,732) (67,307,212,559) (105,943,138,891)Bank charges (1,212,791,628) (3,090,609,915) (2,138,867,004)Interest Income 222,261,844 749,969,374 893,970,605Gain (loss) on disposal of fixed assets (3,074,840,894) (18,890,632,216) (990,036,967)Others - net 7,168,537,414 8,132,624,499 10,285,055,877PROFIT BEFORE INCOME TAX BENEFIT (EXPENSE) 22,384,127,643 42,938,779,264 195,081,224,522INCOME TAX BENEFITCurrent (5,636,464,967) (13,771,265,405) (58,549,280,250)Deferred (1,305,018,788) 9,363,792,298 4,549,279,746Total income tax benefit (expense) - net (6,941,483,755) (4,407,473,107) (54,000,000,504)PROFIT FOR THE YEAR 15,442,643,888 38,531,306,157 141,081,224,018OTHER COMPREHENSIVE INCOME (LOSSES)Items that will be reclassified to profit or lossExchange difference due to translation of financial

statements 8,144,944,662 51,980,001,268 -Items that will not be reclassified to profit or lossIncrease (decrease) in revaluation of fixed assets - net (4,073,415,308) - 506,719,066,642Remeasurement of employment benefit liabilities - net (236,782,367) 1,548,284 190,809,397Total other comprehensive income 3,834,746,987 51,981,549,552 506,909,876,039COMPREHENSIVE INCOME FOR THE YEAR 19,277,390,875 90,512,855,709 647,991,100,057TOTAL COMPREHENSIVE INCOME FOR THE YEARProfit for the year attributable to:

Owners of the Parent Entity 14,738,392,771 37,891,275,532 140,696,905,072Non-Controlling Interest 704,251,117 640,030,625 384,318,946

TOTAL 15,442,643,888 38,531,306,157 141,081,224,018Total comprehensive income for the year attributable to:

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(In Rupiah)


Owners of the Parent Entity 18,534,080,509 89,526,000,854 645,499,410,623Non-Controlling Interest 743,310,366 986,854,855 2,491,689,434

TOTAL 19,277,390,875 90,512,855,709 647,991,100,057

a. Sales

(in Rupiah)


ExportManufacturing

Set up 327,096,040,847 350,221,293,510 267,053,092,822Knock down 256,001,267,435 416,683,027,524 418,967,408,786Building component 110,580,040,470 167,666,535,700 340,519,963,460

LocalForestry concession 158,957,217,136 99,275,479,857 118,969,161,162Manufacturing

Building component 63,824,719,180 30,341,129,993 55,164,420,728Set up 51,399,186,051 31,587,051,709 46,669,671,418Knock down 20,082,143,458 7,234,302,646 39,967,556,609

Retail & distribution 8,164,644,291 15,687,850,772 36,077,704,054Total 996,105,258,868 1,118,696,671,711 1,323,388,979,039

Year Ended on December 31, 2016 compared to the Year Ended on December 31, 2015

The net sales of the Company for the year ended on December 31, 2016 increased by Rp204,692,307,329 or 18.3%, from Rp1,118,696,671,711 in the year ended on December 31, 2015, toRp1,323,388,979,039. This increase was mainly due to an increase in export sales volume in themanufacturing segment, particularly in the volume of local building components, knock-down and set-upfurniture.


The net sales of the Company for the year ended on December 31, 2015 amounted toRp1,118,696,671,711, an increase of Rp122,591,412,843 or 12.3% compared to sales for the yearended on December 31, 2014, which amounted to Rp996,105,258,868. The increase in net sales wasdriven by an increase in furniture sales volume for both export and domestic sales. However, local salesdecreased as the delivery of products by Belayan and Narkata, which are engaged in the forestrybusiness, was hampered by the drying rivers.

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b. Gross Profit


The gross profit of the Company for the year ended on December 31, 2016 increased byRp216,453,370,965 or 89.6%, from Rp241,705,612,375 in the year ended on December 31, 2015, toRp458,158,983,340. The increase in gross profit was due to improved manufacturing efficiency and thestart of Integriya’s operational activities to generate better gross profit.

Improved manufacturing efficiency was the result of a number of factors, including the utilization of wastewood as raw material for furniture production, an increase in selling prices due to attractive colors anddesigns, reduced sale of low margin products such as rattan baskets and reduced raw materials pricesespecially for paint and medium density fiberboards. Meanwhile, the increase of gross profit in the retailsegment is marked by the start of Thema Home's retail outlet in the first half of 2016, where theCompany, through Integriya, sells furniture products and home accessories at retail price level.


The gross profit of the Company for the year ended on December 31, 2015 increased byRp82,517,046,841 or 51.8% from Rp159,188,565,534 in the year ended on December 31, 2014, toRp241,705,612,375. The increase in gross profit was mainly due to an increase in sales volume of theGroup entities that are engaged in manufacturing and retail & distribution, which generally have higherprofit margins compared to the other business segments.

c. General and Administrative Expenses


The general administrative expenses of the Company for the year ended on December 31, 2016increased by Rp30,067,861,810 or 37.6%, from Rp79,944,456,088 in the year ended on December 31,2015, to Rp110,012,317,898. The increase in general and administrative expenses was mainly due to anincrease in salary expense of Rp9,257,707,471 (or 31.9%), an increase in management fee byRp6,423,287,328 (or 101.4%), an increase in insurance cost by Rp2,730,743,911 (or 80.4%), and anincrease in the Company's income tax expense by Rp1,926,823,099 (or 21.2%).

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The general administrative expenses of the Company for the year ended on December 31, 2015increased by Rp28,580,612,069 or 55.6% from Rp51,363,844,019 in the year ended on December 31,2014, to Rp79,944,456,056. The increase in general and administrative expenses was mainly due to anincrease in salary expense by Rp4,128,814,189 (or 16.6%), an increase in management fee byRp2,464,224,540 (or 63.7%), an increase in depreciation expense by Rp3,711,391,479 (or 148.0%), andan increase in the Company's income tax expense by Rp7,391,716,805 (or 434.5%).

d. Gain (loss) on foreign exchange - net


The gain on foreign exchange of the Company for the year ended on December 31, 2016 increased byRp2,168,756,410 or 29.7%, from Rp7,297,546,317 in the year ended on December 31, 2015, toRp9,466,292,727. The increase was mainly due to the depreciation of the Rupiah against the USD,which resulted in an increase in trade receivables denominated in USD that was partially offset by anincrease in bank and non-bank financial institutions loans denominated in USD, resulting in a higher gainon foreign exchange in 2016 compared to 2015.


The gain on foreign exchange of the Company for the year ended on December 31, 2015 increased byRp1,242,237,131 or 20.5%, from Rp6,055,309,186 in the year ended on December 31, 2014, toRp7,297,546,317. The increase in the Company's net gain on foreign exchange was due to theappreciation of Rupiah against USD as the Company recorded a decrease in total bank and non-bankfinancial institutions loans denominated in USD.

e. Interest Expense


The interest expense of the Company for the year ended on December 31, 2016 increased byRp38,635,926,332 or 57.4%, from Rp67,307,212,559 in the year ended on December 31, 2015, toRp105,943,138,891. The increase was mainly due to significant increase in bank and non-bank financialinstitutions loans for working capital financing requirements as a result of the depreciation of the Rupiahagainst the USD.


The interest expense of the Company for the year ended on December 31, 2015 increased byRp5,890,956,9827 or 9.6%, from Rp61,416,255,732 in the year ended on December 31, 2014, toRp67,307,212,559. The increase was mainly due to additional bank and non-bank financial institutionsloans for the financing of the Company's factory construction project.

f. Gain (loss) on disposal of fixed assets


The loss on disposal of fixed assets of the Company for the year ended on December 31, 2016decreased by Rp17,900,595,249 or 94.8%, from Rp18,890,632,216 in the year ended on December 31,

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2015, to Rp990,036,967. Loss on disposal of fixed assets decreased significantly as there were nosignificant disposals of fixed assets in 2016.


The loss on disposal of fixed assets of the Company for the year ended on December 31, 2015increased Rp15,815,791,322 or 514.4%, from Rp3,074,840,894 in the year ended on December 31,2014, to Rp18,890,632,216. The increase in loss on disposal of fixed assets was mainly due to the saleof a manufacturing Subsidiary’s factory for relocation to a new site.

g. Other comprehensive income (losses)


The other comprehensive income of the Company for the year ended on December 31, 2016 increasedby Rp454,928,326,487 or 875%, from Rp51,981,549,552 in the year ended on December 31, 2015, toRp506,909,876,039. The increase was mainly due to the revaluation of fixed assets conducted by theCompany in 2016.


The other comprehensive income of the Company for the year ended on December 31, 2015 increasedby Rp48,146,802,566 or 1,256%, from Rp3,834,746,987 in the year ended on December 31, 2014, toRp51,981,549,552. The increase in other comprehensive income was due to the translation adjustmentsresulting from the translation of the Company's financial statements.

h. Comprehensive income for the year


As a result of the reasons above, the comprehensive income for the year of the Company for the yearended on December 31, 2016 increased by Rp557,478,244,348 or 616%, from Rp90,512,855,709 in theyear ended on December 31, 2015, to Rp647,991,100,057.


As a result of the reasons above, the comprehensive income for the year of the Company for the yearended on December 31, 2015 increased by Rp71,235,464,834 or 370.0%, from to Rp19,277,390,875 inthe year ended on December 31, 2014, to Rp90,512,855,709.

II. CONSOLIDATED STATEMENT OF FINANCIAL POSITION

(In Rupiah)

Description December 312014 2015 2016

Total Assets 1,521,164,526,153 2,014,472,522,107 3,081,874,210,495Total Liabilities 924,806,153,980 1,307,489,294,225 1,651,841,228,669Total Equity 596,358,372,173 706,983,227,882 1,430,032,981,826

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A. Assets

(In Rupiah)


ASSETSCURRENT ASSETSCash and cash equivalents 27,003,675,052 116,330,998,235 30,449,572,479Trade receivables - third parties, net 126,453,215,078 103,254,127,607 187,911,663,923Other receivables

Related Parties - 5,705,000,000 9,705,000,000Third Parties 85,975,091,310 83,975,605,783 69,537,812,441

Inventories 370,729,131,373 575,780,894,734 893,017,247,860Prepaid taxes 53,483,073,353 86,641,875,124 57,865,781,855Prepaid expenses 8,185,548,964 8,155,804,028 11,996,020,252Advances for purchases 38,666,930,986 29,251,710,800 64,658,888,752Estimated claim for tax refund 4,381,778,520 2,976,593,074 2,560,280,979Total Current Assets 714,878,444,636 1,012,072,609,385 1,327,702,268,541

NON-CURRENT ASSETSAdvances for purchases 49,233,418,595 32,135,724,826 83,412,735,768Deferred tax assets 200,573,224 1,557,777,573 3,112,995,737Investment properties - 5,334,000,000 15,880,000,000Fixed assets - net 745,755,613,017 954,784,745,618 1,642,859,190,372Other assets 11,096,476,681 8,587,664,705 8,907,020,077Total Non-Current Assets 806,286,081,517 1,002,399,912,722 1,754,171,941,954TOTAL ASSETS 1,521,164,526,153 2,014,472,522,107 3,081,874,210,495

December 31, 2016 compared to December 31, 2015

The total assets of the Company for the year ended on December 31, 2016 increased byRp1,067,401,688,388 or 53.0%, from Rp2,014,472,522,107 in the year ended on December 31, 2015, toRp3,081,874,210,495. The increase was mainly due to an increase in inventory, an increase in rawmaterial inventory, and an increase in fixed assets due to a revaluation of fixed asset.


The total assets of the Company for the year ended on December 31, 2015 increased byRp493,307,995,954 or 32.4%, from Rp1,521,164,526,153 in the year ended on December 31, 2014, toRp2,014,472,522,107. The increase was mainly due to an increase in inventory and an increase in net

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fixed assets relating to the construction of a Subsidiary's factory in Lamongan, which would have higherproduction capacity. The factory construction was completed in 2015.

a. Cash and Cash Equivalents


The total cash and cash equivalents of the Company for the year ended on December 31, 2016decreased by Rp85,881,425,756 or 74.0%, from Rp116,330,998,235 in the year ended on December 31,2016, to Rp30,449,572,479. The decrease was mainly due to procurement of raw materials at the end of2016.


The total cash and cash equivalents of the Company for the year ended on December 31, 2015increased by Rp89,327,323,183 or 330.8%, from Rp27,003,675,052 in the year ended on December 31,2014, to Rp116,330,998,235. The increase was due to an increase in savings in USD and placement ofproceeds from disposal of fixed assets conducted at the end of 2015 in time deposits in Bank BNI.

b. Trade Receivables - Third Parties, net


The total net trade receivables, from third parties, of the Company for the year ended on December 31,2016 increased by RpRp84,657,536,316 or 82.0%, from Rp103,254,127,607 in the year ended onDecember 31, 2015, to Rp187,911,663,923.The increase was mainly due to an increase in tradereceivables from the Company's export customers, which was in line with an increase in the Company'sexport sales.


The total net trade receivables, from third parties, of the Company for the year ended on December 31,2015 decreased by Rp23,199,087,471 or 18.4%, from Rp126,453,215,078 in the year ended onDecember 31, 2014, to Rp103,254,127,607. The decrease was mainly due to a decrease in tradereceivables from the Company's domestic customers as a result of a decrease in wood sales by theCompany.

c. Inventories


The total inventories of the Company for the year ended on December 31, 2016 increased byRp317,236,353,126 or 55.0%, from Rp575,780,894,734 in the year ended on December 31, 2015, toRp893,017,247,860. The increase was mainly due to an increase in the Company's raw materials andsupplies, and finished goods stored in preparation for sales in early 2017.


The total inventories of the Company for the year ended on December 31, 2015 increased byRp205,051,763,361 or 55.3%, from Rp370,729,131,373 in the year ended on December 31, 2014,Rp575,780,894,734. The increase was mainly due to an increase in the Company's raw materials andsupplies to meet the increasing production requirements that were in line with the increase in sales.

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d. Advances for purchase of current assets


The total advances for purchase of current assets of the Company for the year ended on December 31,2016 increased by Rp35,407,177,952 or 121.0%, from Rp29,251,710,800 in the year ended onDecember 31, 2015, to Rp64,658,888,752. The increase was mainly due to increased advances paid bythe Company for the purchase of wood raw materials as a result of an increased purchase of rawmaterials to meet production requirements.

e. Total Current Assets


The total assets of the Company for the year ended on December 31, 2016 increased byRp315,629,659,156 or 31.2%, from Rp1,012,072,609,385 in the year ended on December 31, 2015, toRp1,327,702,268,541. The increase was mainly due to the increase in inventories and raw materialinventories.


The total assets of the Company for the year ended on December 31, 2015 increased byRp297,194,164,749 or 41.6%, from Rp714,878,444,636 in the year ended on December 31, 2014, toRp1,012,072,609,385. The increase was mainly due to the increase in inventories.

f. Fixed assets – net


The net fixed assets of the Company for the year ended on December 31, 2016 increased byRp688,074,444,754 or 72.1%, from Rp954,784,745,618 in the year ended on December 31, 2015, toRp1,642,859,190,372. The increase was mainly due to the revaluation on fixed assets for the Company'sland and building in Sidoarjo and Lamongan, which resulted in an increase of fixed assets byRp591,090,336,931.


The net fixed assets of the Company for the year ended on December 31, 2015 increased byRp209,029,132,601 or 28.0%, from Rp745,755,613,017 in the year ended on December 31, 2014, toRp954,784,745,618. The increase was mainly due to purchase and construction of new land andbuilding for the Company's production facility in Lamongan.

g. Advances for purchase of non-current assets


The total advances for purchase of non-current assets of the Company for the year ended on December31, 2016 increased by Rp51,277,010,942 or 159.0%, from Rp32,135,724,826 in the year ended onDecember 31, 2015, to Rp83,412,735,768. The increase was mainly due to advances paid by theCompany for the purchase of land and building in Buduran, Sidoarjo.

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The total advances for purchase of non-current assets of the Company for the year ended on December31, 2015 decreased by Rp17,097,693,769 or 34.7%, from Rp49,233,418,595 in the year ended onDecember 31, 2014, to Rp32,135,724,826. The decrease was mainly due to the reclassification ofadvances for purchase of land in Lamongan into the Company's fixed assets.

h. Total Non-current Assets


The total non-current assets of the Company for the year ended on December 31, 2016 increased byRp751,772,029,232 or 75.0%, from Rp1,002,399,912,722 in the year ended on December 31, 2015, toRp1,754,171,941,954. The increase was mainly due to the increase in fixed assets - net due to therevaluation on fixed assets.


The total non-current assets of the Company for the year ended on December 31, 2015 increased byRp196,113,831,205 or 24.32%, from Rp806,286,081,517 in the year ended on December 31, 2014, toRp1,002,399,912,722. The increase was mainly due to the establishment of its Subsidiary’s productionfacility in Lamongan with bigger production capacity in 2015.

B. Liabilities

(In Rupiah)


CURRENT LIABILITIESBank and non-bank financial institution loans 592,878,060,190 766,860,659,223 907,825,110,478Trade payables - third parties 77,986,237,180 92,080,340,642 72,604,179,566Other payables

Third parties 2,203,632,409 11,607,525,581 5,654,871,991Accrual expenses 13,492,332,427 24,607,397,552 11,449,731,647Taxes payable 1,307,234,867 5,171,757,786 43,462,855,487Advances from customers 9,153,927,568 25,429,552,176 24,792,817,188Current maturities of long-term liabilities

Bank and non-bank financial institution loans 10,647,141,064 14,666,943,669 26,475,634,258Obligation under finance lease 14,890,374,606 8,823,113,862 9,093,528,058

Total Current Liabilities 722,558,940,311 949,247,290,491 1,101,358,728,673NON-CURRENT LIABILITIESLong-term liabilities - net of current maturities

Bank and non-bank financial institution loans 2,896,321,840 198,219,164,268 160,818,401,206Obligation under finance lease 19,039,788,936 11,072,193,969 9,039,813,743

Other payablesRelated party 94,510,018,600 82,600,391,671 141,314,372,925Third parties 20,470,000,000 620,400,000 -

Deferred tax liabilities 49,276,052,995 46,102,573,417 212,078,470,513Employee benefits liabilities 16,055,031,298 19,627,280,409 27,231,441,609Total Non-Current Liabilities 202,247,213,669 358,242,003,734 550,482,499,996TOTAL LIABILITIES 924,806,153,980 1,307,489,294,225 1,651,841,228,669

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The total liabilities of the Company for the year ended on December 31, 2016 increased byRp344,351,934,444 or 26.3%, from Rp1,307,489,294,225 in the year ended on December 31, 2015, toRp1,651,841,228,669. The increase was mainly due to an increase in bank loans and non-bank financialinstitution loans, which were used to finance the Company's working capital requirements, an increase inother payables to related parties, and an increase in deferred tax liabilities.


The total liabilities of the Company for the year ended on December 31, 2015 increased byRp382,683,140,245 or 41.4%, from Rp924,806,153,980 in the year ended on December 31, 2014, toRp1,307,489,294,225. The increase was mainly due to an increase in bank loans and non-bank financialinstitution loans, which were used to finance the construction of Interkraft’s factory and the Company'sworking capital requirements.

a. Taxes payable


The total taxes payable of the Company for the year ended on December 31, 2016 increased byRp38,291,097,701 or 740.0%, from Rp5,171,757,786 in the year ended on December 31, 2015, toRp43,462,885,487. The increase was mainly due to an increase in the Company's corporate income taxpayable for the year 2016, which was in line with the increase in the Company's profit.


The total taxes payable of the Company for the year ended on December 31, 2015 increased byRp3,864,522,919 or 295.6%, from Rp1,307,234,867 in the year ended on December 31, 2014, toRp5,171,757,786. The increase was mainly due to an increase in the Company's corporate income taxpayable for the year 2015, which was in line with the increase in the Company's profit.

b. Bank and Non-Bank Financial Institution Loans

All of the Company’s bank and non-bank financial institution loans are extended by domestic financialinstitutions. Further information is presented in Chapter III in this Prospectus regarding Statement ofIndebtedness.


The total bank loans and non-bank financial institution loans of the Company for the year ended onDecember 31, 2016 increased by Rp115,372,378,782 or 11.8%, from Rp979,746,767,160 in the yearended on December 31, 2015, to Rp1,095,119,145,942. The increase was due to an increase in bankloan facilities and loans from non-bank financial institutions taken for financing working capitalrequirements which was the result of the depreciation of the Rupiah against the USD.


The total bank loans and non-bank financial institution loans of the Company for the year ended onDecember 31, 2015 increased by Rp373,325,244,066 or 61.6%, from Rp606,421,523,094 in the yearended on December 31, 2014, to Rp979,746,767,160. The increase was due to additional bank loan

39

facilities and loans from non-bank financial institutions taken by the Company to finance its factoryconstruction project.

c. Deferred Tax Liabilities


The total deferred tax liabilities of the Company for the year ended on December 31, 2016 increased byRp165,975,897,096 or 360.0%, from Rp46,102,573,417 in the year ended on December 31, 2015, toRp212,078,470,513. The increase was mainly due to deferred tax liabilities arising from gain onrevaluation of fixed assets as a result of the revaluation of land and building conducted by the Companyin 2016.


The total deferred tax liabilities of the Company for the year ended on December 31, 2015 decreased byRp3,173,479,578 or 6.4%, from Rp49,276,052,995 in the year ended on December 31, 2014, toRp46,102,573,417. The decrease was mainly due to a decrease in deferred tax liabilities arising fromgain on revaluation of fixed assets, which decreased due to the disposal of the Company’s fixed assets.

d. Total Current Liabilities


The total current liabilities of the Company for the year ended on December 31, 2016 increased byRp152,111,438,182 or 16.0%, from Rp949,247,290,491 in the year ended on December 31, 2015, toRp1,101,358,728,673. The increase was mainly due to the increase in bank and non-bank financialinstitution loans which was the result of the depreciation of the Rupiah against the USD.


The total current liabilities of the Company for the year ended on December 31, 2015 increased byRp226,688,350,180 or 31.4%, from Rp722,558,940.311 in the year ended on December 31, 2014, toRp949,247,290,491. The increase was mainly due to additional bank and non-bank financial institutionloans taken by the Company to finance the construction of Interkraft’s factory and for its working capitalrequirements.

e. Total Non-current Liabilities


The total non-current liabilities of the Company for the year ended on December 31, 2016 increased byRp192,240,496,262 or 51.7%, from Rp358,242,003,734 in the year ended on December 31, 2015, toRp550,482,499,996. The increase was mainly due to the increase in other payables – related partieswhich were used to finance the Company’s working capital and the increase of deferred tax liabilities.


The total non-current liabilities of the Company for the year ended on December 31, 2015 increased byRp155,994,790,065 or 77.1%, from Rp202,247,213,669 in the year ended on December 31, 2014, toRp358,242,003,734. The increase was mainly due to additional bank and non-bank financial institution

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loans taken by the Company which were used to finance the construction of Interkraft’s factory and for itsworking capital requirements.

C. Equity

(In Rupiah)


EQUITYEquity attributable to owners of parent entityShare Capital - par value of Rp100 per share in 2016,

and Rp1,000,000 per share in 2015 and 2014Authorized capital – 20,000,000,000 shares in 2016,250,000 shares in 2015 and 2014Issued and Fully paid-in capital – 5,000,000,000shares in 2016, 195,000shares in 2015 and 100,000 shares in 2014 100,000,000,000 195,000,000,000 500,000,000,000

Additional paid-in capital 119,045,697,456 24,045,697,456 25,093,405,789Exchange difference due to translation of financial

statements 105,769,457,388 141,425,224,187 141,425,224,187Revaluation surplus of fixed assets - net 155,811,192,447 139,866,947,544 640,440,950,720Differences equity transactions with non-controlling

interest 510,692,166 510,692,166 1,763,749,431Retained earnings 95,450,012,909 165,264,491,867 95,685,208,599Sub-total 576,587,052,366 666,113,053,220 1,404,408,538,726Non-controlling interests 19,771,319,807 40,870,174,662 25,624,443,100TOTAL EQUITY 596,358,372,173 706,983,227,882 1,430,032,981,826


The total equity of the Company for the year ended on December 31, 2016 increased byRp723,049,753,944 or 102.3%, from Rp706,983,227,882 in the year ended on December 31, 2015, toRp1,430,032,981,826. The increase in total equity was due to an increase in the Company's additionalpaid-in capital from Rp195,000,000,000 to Rp500,000,000,000, or an increase of Rp305,000,000,000,and an increase in gain on revaluation of the Company's fixed assets by Rp500,574,003,176.


The total equity of the Company for the year ended on December 31, 2015 increased byRp110,624,855,709 or 18.6%, from Rp596,358,372,173 in the year ended on December 31, 2014, toRp706,983,227,882. The increase was mainly due to an increase in translation adjustments byRp35,655,766,799, an increase in retained earnings from the Company's operating activities byRp69,814,478,958, and an increase in non-controlling interest by Rp21,098,854,855 due to additionalpaid-in capital from non-controlling interests.

III. CONSOLIDATED FINANCIAL RATIOS

Growth and Financial Ratios


LiquidityCurrent ratio (x) 0.99 1.07 1.21LeverageInterest-bearing debt to equity ratio (x) 1.23 1.53 0.88Rate of Return

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Return on Assets (ROA) (%) 1.02 1.91 4.58Return on Equity (ROE) (%) 2.59 5.45 9.87

a. Liquidity

The level of liquidity reflects the Company's ability to meet its current liabilities, which can be measuredby the current ratio. Current ratio is calculated by comparing total current assets to total current liabilities.

The Company's current ratio as of December 31, 2014, 2015, and 2016, were 0.99x, 1.07x, and 1.21x,respectively.

The Company's continuously improving current ratio from 2014 to 2016 was due to an increase in currentassets, i.e., inventories.

b. Leverage

Leverage reflects the proportion of the Company's funding from debt and equity that is used foroperational activities and business expansion. Leverage is measured by the debt-to-equity ratio, which iscalculated by comparing total interest-bearing debt to total equity.

The Company's debt-to-equity ratio as of December 31, 2014, 2015, and 2016, were 1.23x, 1.53x, and0.88x, respectively.

The Company's debt-to-equity ratio from 2014 to 2015 showed an increasing trend, mainly due to anincrease in bank loans and non-bank financial institution loans. The Company's leverage in 2016increased, due to an increase in additional paid-up capital from shareholders and an increase in theCompany's gain on revaluation.

c. Return on Assets

Return on assets reflects the ability of the Company's productive assets to generate net income, which iscalculated by comparing comprehensive income to total assets.

The Company's return on assets for the years ended on December 31, 2014, 2015 and 2016, were1.0%, 1.9% and 4.6%, respectively.

Return on assets has increased due to an increase in profit as well as assets, such as inventories, inconnection with the Company's business expansion.

d. Return on Equity

Return on assets reflects the Company's ability to generate net income, which is calculated bycomparing comprehensive income to total equity.

The Company's return on equity for the years ended on December 31, 2014, 2015 and 2016 were 2.6%,5.5% and 9.9%, respectively.

The Company's return on equity continued to increase due to the Company’s profit for the year, whichincreased year on year.

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IV. CONSOLIDATED STATEMENT OF CASH FLOWS ANALYSIS

Liquidity and Funding Sources

As of December 31, 2016, the Company had cash and cash equivalents amounting to Rp30,449,572,479and unutilized facilities amounting to Rp200,915,008,122.

Over the past three years, the Company's main sources of liquidity were cash flow from operatingactivities and financing activities through debt. The use of the Company's main funds is to financeworking capital and capital expenditure in connection with capacity expansion and businessdevelopment. The Company regularly evaluates its capital requirements relating to cash flows fromoperations, the Company's expansion plans and market conditions. If the Company does not generatesufficient cash flow from operations, the Company still has other funding sources such as debt or equityfinancing.

The Company’s subsidiaries are not restricted from transferring funds to the Company. As such, they areable to provide loans to the Company when required in accordance with Companies Law.

The following table sets forth the information on the Company's cash flows for the years ended onDecember 31, 2014, 2015 and 2016:

(In Rupiah)


CASH FLOWS FROM OPERATING ACTIVITIESReceipts from customers 956,773,576,810 1,158,171,383,790 1,238,094,707,735Cash payments to suppliers, directors, employees, and

other operational expenses (886,162,863,406) (1,076,278,614,083) (1,312,603,447,919)Net cash flows provided by (used in) operating

activities 70,610,713,404 81,892,769,707 (74,508,740,184)Financial income 222,261,844 749,969,374 893,970,605Financial expense (62,629,047,360) (82,331,104,454) (108,082,005,895)Payment of taxes (8,291,031,939) (9,877,880,616) (22,814,825,939)Receipt from taxes 1,030,186,236 1,405,185,446 416,312,095Others – net 7,168,537,414 8,132,624,499 10,377,755,877Net cash flows provided by (used in) operating

activities 8,111,619,599 (28,436,044) (193,717,533,441)CASH FLOWS FOR INVESTING ACTIVITIESPayment of advances for purchase of fixed assets (37,561,924,441) (25,755,962,630) (57,108,698,965)Acquisition of investment properties - (5,334,000,000) -Acquisition of fixed assets (102,242,573,593) (202,720,270,784) (87,507,070,769)Acquisition of other assets (2,582,803,591) (3,886,429,256) (3,498,403,976)Proceeds from disposal of fixed assets 29,341,546,559 30,501,435,185 10,462,930,601Net cash flows used in investing activities (113,045,755,066) (207,195,227,485) (137,651,243,109)CASH FLOWS FROM FINANCING ACTIVITIESPayment of bank and non-bank financial institution

loans(879,788,730,499) (1,146,954,528,710) (2,011,273,248,985)

Additional of bank and non-bank financial institutionloans

867,031,483,997 1,473,867,038,596 2,047,335,308,620

Payment of obligation under finance lease (16,774,083,449) (18,394,852,126) (11,624,734,676)Additional of obligation under finance lease - - 3,169,896,192Addition (payment) of other payables 38,857,394,607 (32,379,626,929) 58,713,981,254Additional paid-in capital 95,000,000,000 - 90,500,000,000Additional (divestment) paid-in capital from non-

controlling interest 9,054,500,000 20,112,000,000 (16,692,046,113)Net cash flows provided by financing activities 113,380,564,656 296,250,030,831 160,129,156,292Net increase (decrease) in cash and cash 8,446,429,189 89,026,367,302 (171,239,620,258)

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(In Rupiah)


equivalents and overdraftNet effect of exchange rates changes on cash and

cash equivalents (1,027,158,027) 1,763,848,000 2,232,977,883Exchange difference due to translation of financial

statements (3,241,778,034) (7,570,997,031) -Cash and cash equivalents and overdraft at

beginning of the year 13,083,884,977 17,261,378,105 100,480,596,376Cash and cash equivalents and overdraft at end of

the year 17,261,378,105 100,480,596,376 68,526,045,999

Net Cash Flows Provided by (Used in) Operating Activities

Net cash flows used in operating activities for the year ended on December 31, 2016 amounted toRp193,717,533,441. Cash flows provided by operating activities were generated from cash receipts fromcustomers amounting to Rp1,238,094,707,735, finance income amounting to Rp893,970,605, taxrefunds amounting to Rp416,312,095, and others amounting to Rp10,377,755,877. Cash flows used inoperating activities were used for, among others, cash payments to suppliers, Directors and employees.Other operating expenses amounting to Rp1,312,603,447,919, finance cost amounting toRp108,082,005,895, and tax payments amounting to Rp22,814,825,939.

Net cash flows used in operating activities for the year ended on December 31, 2015 amounted toRp28,436,044. Cash flows from operating activities were generated from cash receipts from customersamounted to Rp1,158,171,383,790, finance income amounted to Rp749,969,374, tax refunds amountedto Rp1,405,185,446, and others amounted to Rp8,132,624,499. Cash flows used in operating activitieswere used for, among others, cash payments to suppliers, Directors and employees, and other operatingexpenses amounted to Rp1,076,278,614,083, finance cost amounted to Rp82,331,104,454, and taxpayments amounted to Rp9,877,880,616.

Net cash flows used in operating activities for the year ended on December 31, 2014 amounted toRp8,111,619,599. Cash flows from operating activities were generated from cash receipts fromcustomers amounting to Rp956,773,576,810, finance income amounting to Rp222,261,844, tax refundsamounting to Rp1,030,186,236, and others amounting to Rp7,168,537,414. Cash flows used in operatingactivities were used for, among others, cash payments to suppliers, Directors and employees. and otheroperating expenses amounting to Rp886,162,863,406, finance cost amounting to Rp62,629,047,360,and tax payments amounting to Rp8,291,031,939.

Net cash used in investing activities

Net cash flows used in investing activities for the year ended on December 31, 2016 amounted toRp137,651,243,109. Cash flows from investing activities were generated from disposal of fixed assetsamounting to Rp10,462,930,601. Cash flows used in investing activities were used for acquisition of fixedassets, amounting to Rp87,507,070,769, acquisition of other assets amounting to Rp3,498,403,976, andpayment of advances to purchase fixed assets amounting to Rp57,108,698,965.

Net cash flows used in investing activities for the year ended on December 31, 2015 amounting toRp207,195,227,485. Cash flows provided by investing activities were generated from disposal of fixedassets, amounting to Rp30,501,435,185. Cash flows used in investing activities were used for acquisitionof fixed assets amounting to Rp202,720,270,784, acquisition of other assets amounting toRp3,886,429,256, acquisition of investment properties amounting to Rp5,334,000,000 and payment ofadvances to purchase fixed assets amounting to Rp25,755,962,630.

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Net cash flows used in investing activities for the year ended on December 31, 2014 amounted toRp113,045,755,066. Cash flows provided by investing activities were generated from disposal of fixedassets amounting to Rp29,341,546,599. Cash flows used in investing activities were used for acquisitionof fixed assets amounting to Rp102,242,573,593, acquisition of other assets amounting toRp2,582,803,591, and payment of advances to purchase fixed assets amounting to Rp37,561,924,441.

Net cash provided by financing activities

Net cash flows from financing activities for the year ended on December 31, 2016 amounting toRp160,129,156,292. Cash flows from financing activities were generated from addition of bank loans andnon-bank financial institution loans amounting to Rp2,047,335,308,620 and additional paid-in capitalamounting to Rp90,500,000,000, addition of lease payables of Rp3,169,896,192, and addition of otherpayables amounting to Rp58,713,981,254. Cash flows used in financing activities consisted of paymentof bank loans and non-bank financial institution loans amounting to Rp2,011,273,248,985, payment oflease payables amounting to Rp11,624,7334,676, and divestment by non-controlling interest amountingto Rp16,692,046,113.

Net cash flows from financing activities for the year ended on December 31, 2015 amounted toRp296,250,030,831. Cash flows provided by financing activities were generated from payment of bankloans and non-bank financial institution loans amounting to Rp1,473,867,038,596, additional paid-incapital from non-controlling interest amounting to Rp20,112,000,000. Cash flows used in financingactivities consisted of payment of bank loans and non-bank financial institution loans amounting toRp1,146,954,528,710, payment of lease payables amounting to Rp18,394,852,126, and payment ofother payables amounting to Rp32,379,629,929.

Net cash flows from financing activities for the year ended on December 31, 2014 amounted toRp113,380,564,656. Cash flows provided by financing activities were generated from payment of bankloans and non-bank financial institution loans amounting to Rp867,031,483,997, addition of otherpayables amounting to Rp38,857,394,607, additional paid-in capital amounting to Rp95,000,000,000,and additional paid-in capital from non-controlling interest amounting to Rp9,054,500,000. Cash flowsused in financing activities consisted of payment of bank loans and non-bank financial institution loansamounting to Rp879,788,730,499, and payment of lease payables amounting to Rp16,774,083,449.

V. CAPITAL EXPENDITURES

The Group spent approximately Rp135,951 billion in 2014, Rp261,867 billion in 2015 and Rp106,460billion in 2016 on capital expenditures, which are detailed below:

2014 2015 2016Rp million % Rp million % Rp million %

Manufacturing 120,777 88.8 204,658 78.2 80,189 75.6Forest Concession 14,634 10.8 18,407 7.0 7,237 6.8Retail and Distribution 540 0.4 38,802 14.8 18,614 17.6Total Capital Expenditures 135,951 100.0 261,867 100.0 106,040 100.0Source: The Company's Audited Consolidated Financial Statements as of December 31, 2016, 2015 and 2014, and estimates prepared bythe Company's management.

The capital expenditures of the Group from 2014 to 2016 were mainly utilized to increase productioncapacity of the furniture manufacturing facility from 17,763 m3 in 2014 to 35,044 m3 in 2016, as well asthe production capacity of the building component manufacturing facility from 17,558 m3 in 2014 to133,338 m3 in 2016. Additional production capacity in the furniture manufacturing facility mainly resulted

45

from the construction of a new factory owned by Interkraft to replace its previous factory that was lost ina fire in 2014. In addition, the Company also increased the production capacity of its building componentmanufacturing facility due to the high demand for building component from customers.

Capital expenditures for the retail and distribution segments had increased significantly in 2015 and 2016as a result of the construction of Thema Home, the Company’s first retail store, and the warehouse forfurniture under the brand THEMA to be sold in Indonesia.

The Company does not have specific commitment for the procurement of capital goods investments ofmaterial value in the future.

VI. RISK MANAGEMENT

The Company is committed to implementing proper risk management to its business in order to maintainits current performance. The Company understands that risks are an inherent part of the Company’soperations, including risks that are beyond the Company's control. Therefore, such risks need to bemanaged in an integrated and sustainable manner as part of a good corporate governance framework.

As part of the Company’s commitment to implement risk management, the Company has established anInternal Audit Unit (the "IAU"), which reports directly to the President Director. The establishment of theInternal Audit Unit is one of the early steps taken by the management towards implementing anintegrated risk management framework in the future.

In addition, some of the management initiatives implemented by the Company in the past few years areas follows:- To mitigate against the risk of government regulations, the Company endeavors to anticipate the

possibility of changes in regulations by adjusting the Company's internal policies to comply with theprevailing regulations and by setting policies that minimize the impacts of unfavorable externalconditions. The Company will continue to maintain its FSC and SVLK certifications and produce itswooden products in an environmentally friendly manner to comply with the rules and regulationsrelating to wooden and forestry products that are applicable in the US, EU and other countries at alltimes.

- To mitigate against the risk of fluctuations in foreign exchange rates, the Company continuouslyendeavors to monitor such fluctuation and adjust the Group's financial projection to anticipate thepossible negative impacts of fluctuations in foreign exchange rates to the Group. A portion of theCompany's bank loans is also denominated in foreign currency which serves as an in-built hedgingmechanism for the Company.

- To mitigate against the interest rate risk for loans, primarily loans for working capital and investmentpurposes that have various variable interest rates, the management reviews the various interestrates offered by creditors to obtain favorable interest rates before making a decision to engage indebt agreement.

- To mitigate against the risk of availability of raw materials, the Company maintains its raw materialinventory at a level that is sufficient for in accordance with the Company’s production requirements.By purchasing raw materials in large quantities, the Company is able to select wooden raw materialswith the best quality, thus enabling the Company to produce premium products for its customers. Inaddition, to anticipate bad weather condition that may affect the transportation of raw materials, theCompany has built saw mills used for sawing timber logs within close proximity of the concessionforest. Therefore, the sawn timber can be transported by land as well as by the river.

- To mitigate against the risk of fire in production facilities, the Company actively monitors, maintainsand improves its operating efficiency and minimizes the environmental impacts of its operations andmaintains proper health and safety standards. The Group has adequate insurance policies for theprotection of the Company's production facilities from fire incidents. In addition, the Company also

46

conducts proper training to its employees fire safety, and proper fire response facilities and training.The Group has designed its buildings in a manner which minimizes the risk of fire spreading to theentire production facilities, namely, by assigning a 10-meter distance between factory buildings, aswell as using non-flammable lights and installing sprinklers in all factory buildings.

- To mitigate against the risk of regional minimum wage increase, the Company prepares a projectionof wage increase and determines the right strategies to minimize the impact of wage increasefollowing the issuance of Government Regulation No. 78 of 2015 on Remuneration, which regulatesthe formula to determine annual wage increase. In addition, the Company has relocated Intercraft’sproduction facility to a bigger facility in Lamongan, East Java, which has a regional minimum wagewhich is lower than Sidoarjo.

- To mitigate against the risk of reliance on main customers, the Group maintains long-term goodrelationships with its main customers. The Group endeavors to satisfy qualifications and requests ofthe main customers by ensuring the quality of all of it's products through the implementation ofproper Standard Operating Procedures and Quality Assurance.

- To mitigate against the risk of business competition, the Company continues to endeavors toimprove its product quality, expand its distribution network and maintain a competitive price edge inthe market. Through such measures, the Company hopes to maintain the loyalty of its customers,and thereby maintain and improve its financial performance from year to year.

In addition, after its conversion into a public company, the Company will comply with OJK and IDXregulations by implementing procedures such as the appointment of Independent Commissioners,establishment of an Audit Committee, and other procedures to protect the interests of minorityshareholders.

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VI. RISK FACTORSAn investment in the Company’s shares involves risks. Before making an investment decision in theOffering Shares by the Company in this Initial Public Offering, prospective investors are warned thatthese risks may involve the Company, the environment in which it operates, the Company's shares andgeneral social, economic, political and regulatory conditions in Indonesia. Therefore, prospectiveinvestors are expected to read, understand, and consider all information presented in this Prospectus,including information related to the Company's business risk exposures in carrying out its businessactivities, before making an investment decision. All business and general risks presented in thisProspectus may have a material and negative impact on the Company's business activities, cash flows,operating performance, financial performance or prospects, and may have a direct impact on theCompany’s share price, which may result in potential investors losing all or part of their investment.Business and general risks which are not yet known to the Company or those deemed immaterial mayalso affect the Company’s business activities, cash flows, operating performance, financial performanceor prospects.

The following discussion on business risks contains forward-looking statements which relate to eventsand financial performance in the future. In general, an investment in the securities of companies based indeveloping countries such as Indonesia involve risks that do not generally apply to an investment insecurities of companies based in developed countries. Any changes in the global economic, social andpolitical conditions may put downward pressures on the trading price and value of the Company’s sharesand expose investors to risk of loss on investments.

The main and general risks described in the following discussion are risks that are material to theCompany. These risks have been prepared in order of the significance of their impact to the Company’soperating and financial performance, there is no assurance that risks that rank lower in significance ofimpact will not have material adverse effects on the Company’s business activities, cash flows,operational performance, financial performance or business prospects.

6.1. RISKS WITH SIGNIFICANT IMPACT TO THE COMPANY'S BUSINESS SUSTAINABILITY

Risk relating to laws and regulations

Regulations issued by the Indonesian government agencies, in particular the regulations issued by theMinistry of Forestry, Ministry of Environment, Department of Trade, Department of Industry, Departmentof Finance, Department of Manpower and Transmigration, as well as regulations issued by foreigngovernments, may affect how the Group carries out its business activities.

The Group is required to comply with the prevailing regulations in carrying out their productionprocesses, marketing activities and distribution of products. The regulations govern issues related toproduct, environment, health, manpower, tax and safety standards. The Group is also required to complywith regulations relating to licensing requirements, trade practices, price setting and tax. Failure tocomply with new regulations or amendments, as well as the respective interpretations andimplementations of these regulations or amendments, or failure to comply with amendments to theinterpretations and implementations of such regulations may have material adverse impact to theGroup's business activities and operating performance. In addition, the Group's failure to comply with theprevailing regulations may result in the imposition of civil sanctions, including fines, penalties or productrecalls, and other criminal sanctions.

Risks may arise from regulations issued by the local governments, in particular regulations relating toforestry concessions and wooden products, such as export taxes on veneers and export bans on raw

48

materials, and from regulations issued by foreign governments, such as import bans on the Group'sproduct types, which may adversely affect the Group's price competitiveness and revenue.

For instance, the US government has enforced a policy to impose import duties on Chinese furnitureproducts since 2005 as a result of a decision by the US International Trade Commission’s (the "USITC").This decision was motivated by the belief that Chinese furniture producers had carried out dumpingpractices on exports to the US. As a result, Chinese furniture products have become less competitive interms of price, prompting a significant decline in sales of Chinese furniture products. Although at presentthe US government is not enforcing any tariff policy on Indonesian furniture products, the enforcement ofsuch policy in future may result in a significant impact on the Company’s sales. In addition, the USITC isin the midst of reviewing its tariff policy. Should the USITC decide to lower or remove the import dutytariff on Chinese furniture products, sales of Chinese furniture products to the US market may increaseand therefore impact sales of Indonesian furniture products, including the Company’s sales to the USmarket.

In addition to the US government regulations, the Company may also be affected by the EU rules andregulations on the trade of wooden products. In May 2016, the EU’s FLEGT has decided that Indonesiawould become the first country in the world qualified to issue FLEGT licenses following theacknowledgement of the Timber Legality Certificate or Sertifikat Legalitas Kayu (the "SLK") issued by theSVLK as a FLEGT License. The Company currently possesses the SVLK certificate and therefore hasmet the FLEGT requirements to export furniture products to the EU market. However, should theCompany fail to maintain the SVLK certificate, or should the Company fail to meet new EU regulations inthe future, the Company's ability to sell its products to the EU market may be adversely affected whichmay result in a decline of the Company's sales.

6.2. MATERIAL RISK FACTORS

Risk relating to foreign exchange rate fluctuations for the Company

The Company's export revenue and expenses are primarily denominated in USD and Rupiahrespectively. In accordance with Bank Indonesia Regulation No. 17/3/PBI/2015 concerning theMandatory Use of Rupiah Within the Jurisdiction of the Republic of Indonesia, the Company'stransactional currency for domestic transactions such as payment of salaries and wages, procurement ofmaterials from domestic companies and other operating expenses is Rupiah. The Company'sconsolidated financial statements are prepared in Rupiah. Therefore, any fluctuation in the USD/IDRexchange rate may affect the accounting of the Company's export revenue and profit in the Company'sconsolidated financial statements. For instance, any significant appreciation of Rupiah against USD mayresult in a decrease of the Company's export revenue recorded in its financial statements, and thereforemay have material adverse impact to the Company’s financial performance.

Risk relating to the supply of raw materials

The Group internally sources for logs and timber from Narkata and Belayan, as well as externallythrough third parties. There is no assurance that the supply of raw materials will always be available tomeet the demand and specifications required by the Group. Risks may arise from factors that are beyondthe control of the Group. Majority of logs and timber produced from the forestry concessions in EastKalimantan are transported via the rivers in the concession to the ports located next to Narkata andBelayan. The occurrence of the El Nino phenomenon or the La Nina phenomenon may also impact thesupply or logs and timber since the transportation of logs and timber are affected by the rise or fall ofwater levels in rivers. In addition, adverse sea conditions may also hamper the transportation of logs andtimber from the ports in East Kalimantan to the Group’s productions facilities in Sidoarjo, East Java. Inthe long term, if the Group fails to manage their internal sources or is unable to secure adequate

49

supplies of raw materials from external sources, there may be an adverse material impact to the Group'sbusiness activities, financial performance, business performance and prospects.

Risk relating to fire at production facilities

The Group's production facilities are highly susceptible to fire due to the nature of the raw materials andproduction processes involved. The dry kiln and boiler areas may be susceptible to fire if not properlymaintained or operated as these areas are actively utilized. In addition, the finishing areas may also besusceptible to fire as these areas contain a significant amount of flammables such as dry timber, paint,glue, and other chemicals. If fires that break out in the Group's production facilities are not immediatelydealt with or contained, they may cause significant damage to the Group's production facilities whichmay have an adverse impact to the Group's financial and operational performance.

Risk relating to the increase in the regional minimum wage level

The regional minimum wage in Sidoarjo has increased significantly during the last few years, from Rp1.3million in 2012, Rp1.7 million in 2013, Rp2.2 million in 2014, Rp2.7 million in 2015, and Rp3.0 million in2016. This represents an increase of 37.4% from 2012 to 2013, 27.3% from 2013 to 2014, 23.5% from2014 to 2015, and 12.4% from 2015 to 2016. The Group has experienced significant increase in laborcost during the past few years as a result of increased salary expense stemming from more than 6,000employees. If the regional minimum wage continues to increase from year to year, the Group may haveto increase the price of its products, which may have an adverse impact to its price competitivenesscompared to its competitors from Indonesia and other countries.

Risk relating to dependence on major customers

On a consolidated basis, the Group does not have any customers contributing more than 20.0% of theGroup’s total consolidated sales. While no single major customer dominates the Group's sales at theconsolidated level, there are several major customers with fairly significant contributions to the Group'ssales. In the event that several of the Group's major customers reduce or stop their purchases from theGroup at or around the same time, there may be a significant decrease in the Group's sales.

Risk relating to business competition

Majority of the Group's competitors are from Vietnam and Malaysia. The Group has to be able tomaintain their competitiveness in terms of price, product design, quality and production capacity. If theGroup is unable to maintain its competitiveness, the Company’s revenue may decrease and this mayhave an adverse impact on the Group's financial performance.

While the Group has established policies for the purposes of maintaining their reputation, the quality oftheir products, and relationships with customers, and implementing marketing strategies to secure newprojects at reasonable prices, there is a risk that the Group may lose its market share to its competitors,which may have adverse impact to the Group's financial performance.

Risk relating to technological advancement

Technological advancements have the potential to affect competitive landscape as it may enhance thecompetitiveness of firms that are able to take advantage of such technological advancements and mayalso reduce the competitiveness of companies which are less able or slow to adapt.

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While the Group's operations are labor intensive, machinery and technology is also required to efficientlyproduce furniture and building components. Should the Group's competitors be able to adopt newtechnology more quickly, the Group may lose its ability to price its products competitively.

6.3. GENERAL RISK FACTORS

Risk relating to macroeconomic and global economic conditions

Macroeconomic or global economic conditions have an influence on the performance of companiesoperating in Indonesia, including the Company. The strengthening or weakening of the economy maydirectly affect the level of demand and supply for retail products in the country. In addition, it mayindirectly affect countries that trade with the country undergoing changes in economic condition.Accordingly, if there is a change in the economic condition of Indonesia and countries that trade withIndonesia, it may have an impact on the financial performance of the Group.

Risk relating to the benchmark interest rate for loans

The interest rate risk of the Group primarily arises from loans for working capital and investmentpurposes. These loans have various variable interest rates, indicating the Group to the fair value ofinterest rate risk. Increased lending rates will therefore also have significant adverse impact to theCompany's performance.

Risk relating to claims or legal suits

The Group may be exposed to disputes and legal proceedings in the course of conducting their businessactivities, including those relating to the Group's products, employee claims, labor disputes or contractualdisputes or any other disputes that may have material and adverse impact on the Group's reputation,operational and financial condition. The Group is not currently involved in legal disputes or materialinvestigations by the Government and the Group is not aware of any ongoing material claims or legalproceedings. In the event that the Group is engaged in a material and prolonged dispute or legalproceeding, there is no assurance that the outcome of such proceeding will be favorable and thesettlement or outcome of such proceeding may adversely affect the financial condition of the Group. Inaddition, any litigation or legal proceeding may result in substantial court cost and the time and attentionof the Group's management, which may have a material adverse impact on the Group's financialperformance.

6.4. RISK FACTORS FOR INVESTORS

Risk relating to the fluctuation of the Company's share price

The market price of the Company's shares subsequent to the Initial Public Offering may be volatile andcould fluctuate significantly. The market price of the Company's shares may also be traded at a pricelower than the Offering Price, as determined during the preliminary offering process and pursuant to theagreement between the Company and the Joint Lead Underwriters. The fluctuation in the Company’sshare price may be the result of one or more of the following factors: differences between the actual financial and operating performance of the Company and those

expected by investors and analysts; changes in securities analysts’ recommendations or perceptions or estimates of the Company's

and Indonesia's performance; disclosure of information on material transactions by the Company;

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changes in the condition of the Indonesian Capital Markets as a result of domestic factors or theinfluence of the international capital markets;

changes in the macroeconomic, industry, political and social conditions in Indonesia; and the Company's involvement in legal proceedings or disputes.

Risk relating to foreign exchange rate fluctuations for foreign investors

Fluctuations in the exchange rates between Rupiah and other currencies may affect the foreign currencyequivalent value of the Rupiah price of investments made by foreign investors. Such fluctuations mayalso affect the amounts that the foreign investors will receive in foreign currency upon conversion of anycash dividends or other distributions paid in Rupiah by the Company, and any Rupiah-denominatedproceeds from any sale of the Company’s shares.

Risk relating to the Company’s shares liquidity

There is no assurance that a market for the Company's shares will develop or, if the market for theCompany's shares develops, that the Company's shares will be liquid. The Indonesian capital market isrelatively less liquid and more volatile relative to the capital markets of developed countries. Prices inIndonesian capital market are also relatively more unstable compared to other capital markets.Therefore, the Company can not predict that the Company's liquidity of shares will be maintained.

There may be a risk of delay in the ability to sell and trade on the IDX. As such, there is no assurancethat the Shareholders will be able to sell their shares at a certain price or time that the shareholders willbe able to do so in a more liquid stock market or at all.

Risk relating to the Company’s ability to pay dividends

The dividend payout will be determined based on the GMS by considering several factors includingretained earnings, financial condition, cash flow, working capital requirements, capital expenditures,contractual agreements and expenses related to the expansion plan of the Company. In addition, fundingneeds for future business development plan as well as the risk of losses recorded in the financialstatements may influence the Company's decision in the payment of dividends.

There is no assurance that the Company will be able to pay dividends or that the Directors of theCompany will announce the distribution of dividends.

Risk relating to minority share ownership

The obligations of the Company and majority shareholders of the Subsidiaries, Board of Commissionersand Board of Directors under Indonesian law with respect to minority shareholders may be more limitedthan those in other jurisdictions. Consequently, minority shareholders in Indonesia may not be able toprotect their interests under current Indonesian law to the same extent as shareholders and companiesdomiciled in other countries. Principles of corporate law that apply to the Group relating to matters suchas the validity of corporate procedures, the fiduciary duties of management, commissioners, directorsand controlling shareholders, and the rights of minority shareholders are governed by the CompaniesLaw and the Articles of Association of each of the Group entities.

Such principles of law may differ from those that would apply if the Group entities were incorporated in ajurisdiction other than Indonesia. In particular, concepts relating to the fiduciary duties of managementhave yet been tested in Indonesian courts. Derivative actions brought in connection with the activities ofdirectors and commissioners are rarely brought on behalf of companies or tested in Indonesian courts. In

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addition, minority shareholders’ rights have only been defined since 1995 and have yet been enforced inpractice. Even if a particular conduct was actionable under Indonesian law, the absence of judicialprecedence could make the prosecution of such conduct under civil proceedings considerably moredifficult. Accordingly, there is no assurance that legal rights or remedies of minority shareholders will beequal or similar to those available in other jurisdictions with sufficient protection of minority shareholderinterest.

6.5. RISK MITIGATION

The success of the Company's activities is predicated on the proper management of its business risks.The Company’s Management recognises the importance of risk management in achieving objectives setout by the Company. Therefore, the Company has established risk management procedures to mitigatesuch risks. Description of the risk mitigation measures undertaken by the Company are disclosed inChapter V of this Prospectus.

MANAGEMENT OF THE COMPANY HEREBY REPRESENTS THAT ALL MATERIAL RISKS FACEDBY THE COMPANY IN CARRYING OUT ITS BUSINESS ACTIVITIES HAVE BEEN DISCLOSED ANDTHE BUSINESS AND GENERAL RISKS HAVE BEEN PRESENTED IN THIS PROSPECTUS IN THEORDER OF SIGNIFICANCE OF THE IMPACT OF EACH RISKS TO THE COMPANY'S FINANCIALPERFORMANCE.

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VII. SIGNIFICANT EVENT OCCURING SUBSEQUENT TO THEDATE OF INDEPENDENT AUDITOR'S REPORT

There has been no significant event which has a material adverse impact on the financial condition andresults of operation of the Company which has occurred after the date of the independent auditor's reportdated April 28, 2017 to the consolidated financial statements for the year ended on December 31, 2016audited by Teramihardja, Pradhono and Chandra (Rödl & Partner), Registered Public Accountants. Theauditor's report dated April 28, 2017, which was unmodified and signed by Agustina Felisa, and with anemphasis of matter in relation to the change in the functional currency of the Company and certainSubsidiaries from USD to IDR.

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VIII. DESCRIPTION OF THE COMPANY, BUSINESS ACTIVITIES,TRENDS AND PROSPECTS

1. Brief History of the Company

The Company was established under the name of PT Integra Indocabinet pursuant to the Deed ofEstablishment of the Limited Liability Company PT Integra Indocabinet No. 147 dated May 19, 1989,drawn up before Soetjpto, S.H., a Notary in Surabaya, which was approved by the Minister of Law andHuman Rights (formerly known as the Minister of Justice and Human Rights) (the "MoLHR") of theRepublic of Indonesia by Decree No. C2-320.HT.01.01.TH.90 dated January 20, 1990, and registered inthe registry of the Surabaya District Court under No. 180/1990 dated February 21, 1990 (the "Deed ofEstablishment").

The Company’s Articles of Association has been amended several times to conform to the CompaniesLaw, as set out in the Deed of Minutes of Extraordinary General Meeting of Shareholders of PT IntegraIndocabinet No. 2 dated May 5, 2008, which was drawn up before Choiriyah, S.H., a Notary in Sidoarjo,and approved by the MoLHR (by Decree No. AHU-47493.AH.01.02.Tahun 2008 dated August 4, 2008,and registered in the Company Register in accordance with the Companies Law under No. AHU-0066588.AH.01.09.Tahun 2008 dated August 4, 2008 (the "Deed No. 2/2008").

The Company changed its shares nominal value to Rp100 per share as stated in the Deed of Minutes ofExtraordinary General Shareholders of PT Integra Indocabinet No. 13 dated September 7, 2016, drawnup before Dina Chozie, S.H., substitute of Fathiah Helmi, S.H., a Notary in Jakarta.

The latest amendment to the Company’s Articles of Association was as set out in the Deed of Minutes ofExtraordinary General Meeting of Shareholders of PT Integra Indocabinet No. 17 dated March 7, 2017,which was drawn up before Fathiah Helmi, S.H., a Notary in Jakarta, and (i) approved by the MoLHR byDecree No. AHU-0005787.AH.01.02.TAHUN 2017 dated March 8, 2017, and (ii) received and registeredin the database of the Legal Entity Administration System of the Ministry of Law and Human Rights eachunder No. AHU-AH.01.03-0116016 (for the amendment of the Company’s Articles of Association) andNo. AHU-AH.01.03-0116017 for the change of information/ particulars of the Company dated March 8,2017, and which was registered in the Company Register under No. AHU-0005787.AH.01.02.TAHUN2017 dated March 8, 2017, and among others, set out the approval of the Shareholders on (i) theamendment of the Articles of Association in its entirety to conform to the prevailing capital markets lawsand regulations; (ii) the change of the Company’s status from a private company to a public company;(iii) the issuance of new shares from portfolio to be offered to the Public in the public offering; (iv) theissuance of new shares from the Company's portfolio issued to the Public including the allocation of newshares in the Company to be issued under the Employee Stock Allocation (ESA) program and (v) theissuance of new shares pursuant to the MESOP implementation (the "Deed No. 17/2017").

As set forth in the Deed No. 17/2017, the Company's aims and objectives are to engage in the industrial,trade and service businesses.


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1. To engage in industrial activities, including among others, the furniture, wood, and cork productbusiness, the bamboo and rattan wickerwork business as well as other similar businesses.

2. To: -(a) engage in trade, including export-import and domestic, of products produced independently

or by other parties that are marketed by the Company;(b) act as a wholesaler, purveyor, supplier, franchisee, commission house and other related

business activities;(c) act as a distributor, agent and representative of other domestic and international

enterprises; and(d) trade of the industrial products referred to above.

3. To provide services, except for legal and tax services.


Creative business activities relating to graphic design, interior design, product design, industrial design,corporate identity consulting, market research as well as packaging services.


The Company is currently focused on the production of wooden furniture and other wooden products,forestry concession, furniture distribution as well as home decorations, through the Group.

The Group commenced operations with the establishment of PT Integra Indocabinet in 1989. TheCompany initially produced wooden and plastic CD racks that were exported to the US. With its growingexperience in the production process, the Company invested in machinery to produce simple furnitureand its business grew rapidly. In 1993, the Company established Intertrend to serve the high growthmarket of outdoor furniture, and subsequently established Interkraft in 2002 in response to the highdemand for fully-assembled and case goods furniture. To secure its raw materials sources, the Companydecided to invest in the forestry concession business by acquiring Belayan and Narkata in 2012 and2011. In 2012, the Company established Intera to produce wooden building components and rattan-based furniture. After considering the business prospects of the retail furniture industry in Indonesia, theCompany established Integriya in 2013 to operate its furniture retail and distribution activities for thedomestic market. In 2015, the Company together with WoodOne International Ltd established an IndirectSubsidiary, WII, through a Subsidiary, Interkayu, to engage in the business of wooden door production.

Currently, the Company is one of the largest integrated wooden products manufacturers in Indonesia.The Company is based in Sidoarjo, East Java, and consists of eight companies, which includes fivemanufacturing companies, one distribution company, and two forestry concession companies. Thecompany is vertically integrated, with both raw material sourcing and a manufacturing business arm.

Major Events in The Company in the Last Three Years

In 2015, Interkraft relocated its production facility to Lamongan, East Java to increase its productioncapacity from 3,544 m3 per year to 7,088 m3 per year. In addition, Intera also expanded its productionline for the manufacturing building component products and increased its production capacity to a 64,500m3 per year in 2015.

In 2016, the Company increased its production capacity to produce wooden furniture products from9,844 m3 per year to 16,144 m3 per year and building component products from 8,600 m3 per year to

56

43,000 m3 per year. Also in 2016, Integriya opened Thema Home's first retail store in Surabaya with atotal sales area of 2,500 m2.

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Material Licenses

The Company has secured the following principal licenses and/or approvals required to carry out itsbusiness activities:

No. LICENSE/DATE/AUTHORIZEDINSTITUTION VALIDITY DESCRIPTION

1. Large Trading Business Permit (the "SIUP") No.510/32-PJ/404.6.2/2016 dated January 11, 2016,issued by the Head of Integrated LicensingService Agency of Sidoarjo Regency.

January 18, 2021 Net Assets: Rp195,000,000,000.-Business Activities (according to KBLI or (KlasifikasiBaku Lapangan Usaha Indonesia or IndonesianStandard Business Classification, previously known asKLUI): Trade (47591, 47521, 47526)Main Merchandise & Trade Service: Trade ofBox/Cabinets made of Wood, Rattan, Iron, Glass,Fabric, Home and Office Appliances and Equipment,sofas, plywood and processed wood.

2. Industrial Business Permit No.503/59/404.3.7/2007 dated July 4, 2007, issuedby the Head of Capital Investment and LicensingAgency of Sidoarjo Regency.

As long as theCompany

continues tooperate

Type of Industry: Furniture and Wood Industry (KLUI36101)Industry Commodity: Wooden Table, CD Racks,Drawers and Bedroom FurnitureInstalled Capacity: 600 x 40 UnitsTotal Investment: Rp38,761,000,000.-

3. Industrial Business Permit No.P2T/066/16.04/V/2011 dated May 19, 2011, joRevised License no. P2T/1/16.06/02/1/2016dated January 22, 2016, issued by the Head ofCapital Investment Agency of East JavaProvince.


continues tooperate

Type of Industry: Furniture and Wood Industry (KBLI31001)Industry Commodity: Wooden Table, CD Racks,Drawers and Bedroom FurnitureInstalled Capacity: 1,200,000 Units and 1,350,000UnitsTotal Investment: Rp290,009,636,000.-

4. Industrial Business Permit No.503/57/404.3.7/2005 dated July 29, 2005, issuedby the Head of Capital Investment and LicensingAgency of Sidoarjo Regency.


continues tooperate

Type of Industry: Rattan and/or bamboo furnitureIndustry (KLUI 36102)Industry Commodity: Furniture and home furniture andfixtures and rattanInstalled Capacity: 130,000 UnitsTotal Investment: Rp3,908,364,000.-

5. Industrial Business Permit No.503/110/404.3.7/2007 dated November 15, 2007,issued by the Head of Capital Investment andLicensing Agency of Sidoarjo Regency.


continues tooperate

Type of Industry: Plywood industry (KBLI 20211)Industry Commodity: Other plywood (Sauce tree,Albizia chinensis)Installed Capacity: 2,000 m3/yearTotal Investment: Rp9,000,000,000.-

6. Industrial Business Permit No.P2T/090/16.02/IX/2011 dated September 27,2011, issued by the Head of Capital InvestmentAgency of East Java Province on behalf of theGovernor of East Java


continues tooperate

Type of Industry: Laminated plywood industry,including decorative plywood, wooden buildingcomponent industry and firewood and wooden pelletindustry (KBLI 16221 and 16295).Installed Capacity: 200,000 Units, 10,000 m3, 27,000m3 and 3,000 m3 per year.Total Investment: Rp92,270,000,000.-

7. Permanent Industry Business Permit No.182/Eanwil.13/AI/IZ.00.03/II/93 dated February 4,1993, issued by the Head of Department ofIndustry Regional Office of East Java Province.


continues tooperate

Type of Industry: Wooden cabinets/box (KKI 33211)Industry Commodity: Radio cassette cabinet and videocassette cabinetInstalled Capacity: 350,000 Units and 350,000 UnitsTotal Investment: Rp2,128,943,188.-

8. Importer Identification Number - Producer (AngkaPengenal Importir-Produsen, the "API-P") No.131500415-P dated March 7, 2016, signed by theHead of Capital Investment Agency of East JavaProvince.

As long as theimporter carries out

its businessactivities, subject toregistration every

five years.

Type of Business: Wooden furniture industry,laminated plywood industry, including decorativeplywood, wooden building component industry andfirewood and wooden pellet industry.

9. Expansion Permit on the Forest Product PrimaryIndustry Business Permit No. SK.4585/Menhut-VI/BPPHH/2009 dated July 27, 2009, read


continues to

Type of Industry: Sawmill with a productioncapacity of 51,000 m3/year and laminated veneerlumber with a production capacity of 6,000 m3/year.

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together with the Decree of Minister of Forestry ofthe Republic of Indonesia No. SK.57/Menhut-II/2014 dated January 20, 2016, issued by theMinister of Forestry of the Republic of Indonesia.

operate Total Investment: Rp64,125,000,000

10. Designated Export Production CompanyIdentification No. 221/DIRJEN-IKAH/PET/IX/1999dated September 30, 1999, issued by theDirector General of the Department of Industryand Trade of the Republic of Indonesia.

As long as thecompany is

engaged in therelevant commodity

businesses

Type of Industry: Wooden finished goods.

As of the date of this Prospectus, the Subsidiaries have secured the following principal licenses and/orapprovals required to carry out their business activities from the relevant authorities:


Intertrend1. Trading Business Permit No. 510/902-

PJ/404.6.2/2015 dated October 29, 2015,issued by the Head of IntegratedLicensing Service Agency of SidoarjoRegency.

October 4, 2020 Institution: SupplierBusiness Activities (according to KBLI): Trade (46636, 46491)Main Merchandise & Trade Service: Trade of molding/profileprocessed wood and furniture.

2. Importer-Producer Identity Number(Angka Pengenal Impor-Produsen, the"API-P") based on API-P No. 131500733-P dated March 3, 2016, signed by theHead of Capital Investment Agency onbehalf of the Minister of Trade.

As long as theimporter carriesout its business

activities,subject to

registrationevery five years.

Type of Business: Wooden furniture industry, molding andbuilding material component industry, wooden buildingcomponent industry.

3. Forest Product Primary Industry BusinessPermit based on the Decree of Minister ofForestry No. SK.4586/Menhut-VI/BPPHH/2009 concerning the Renewalof Forest Product Primary IndustryBusiness Permit under the name of ITT inEast Java Province dated July 27, 2009,issued by the Department of Forestry.

As long as thecompany

continues tooperate

Factory Location Jl. Industri No. 28 Buduran, Sidoarjo Regency,East Java Province.Type of Industry: SawmillLicense Capacity: 18,000 m3/year

4. Principal License for Amendment ofDomestic Capital Investment No.01/3515/IP-PB/PMDN/2016 datedFebruary 16, 2016, issued by the Head ofIntegrated Licensing Service Agency ofSidoarjo Regency.

- Address: Jl. Industri 28 Buduran, Sidoarjo Regency.Type of Industry: Wooden furniture industry (KLUI 36101),molding and building material component (KLUI 20220).Industry Commodity: Wooden table and chair, molding/dowel,wood working for building materialInstalled Capacity: 9,000 m3 for wooden table and chair and 60containers/year for molding/dowel, and wood working for buildingmaterial.Total investment: Rp2,900,000,000 for wooden table and chairand rp1,179,130,000 for molding/dowel, and wood working forbuilding material.

5. Principal License for Amendment ofDomestic Capital Investment No.02/3515/IP-PB/PMDN/2016 datedFebruary 19, 2016, issued by the Head ofIntegrated Licensing Service Agency ofSidoarjo Regency.

- Address: Jl. Industri No. 28, RT 010/ RW 003, Sukorejo Village,Buduran District, Sidoarjo Regency, East Java.Type of Industry: Wooden building component industry (KBLI16221)Industry Commodity: Molding/dowel, wood working for buildingmaterialTotal Investment: Rp4.864.200.000

Interkraft1. Trading Business Permit No.

510/20/404.6.2/2015 dated October 1,2015

October 1, 2020 Business Activities (according to KBLI): Service (70209)Main Merchandise/Trade Service: Business and ManagementConsulting Services

2. Legalization of Branch Trading Business November 17, Business Activities (according to KBLI): Trade of products and

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Permit No. 4419/13-18/SIUP-K/XI/2016.P1 dated November 28, 2016,issued by the Head of Capital Investmentand Licensing Agency of LamonganRegency on behalf of the LamonganRegent.

2021 services (4649)Type of Main Trade Products/Services: Trade of furniture,wooden, steel and glass cabinet/box, and wooden home furnitureand fixtures and wooden office furniture and fixtures, freightservices.

3. Importer Identification Number - Producer("Angka Pengenal Importir-Produsen, the"API-P") No. 131500416-P dated February5, 2016, issued by the Head of CapitalInvestment Agency of the East JavaProvince as the Administrator ofIntegrated Licensing Services Unit onbehalf of the Minister of Trade.




Type of Business: Wooden furniture industry

4. Registered Exporter of Forest IndustryProducts No. 02.ET-01.13.1487 datedDecember 6, 2013, issued by theCoordinator and Executor of TradeService Unit on behalf of the Minister ofTrade.

December 6,2018

Related to the export of forest industry products for woodenfurniture

5. Principal License of Expansion No.27/35/IP-PL/PMDN/2015 dated November10, 2015, issued by the Head of CapitalInvestment Agency of the East JavaProvince on behalf of the East JavaGovernor.

- Project Address: Jl. Raya Jombang-Babat, DradahlumbangVillage, Kedungpring District, Lamongan, East Java.Type of Products/Services: Bedroom furniture and officefurniture, among others tables, chairs, cabinets (KBLI 31001)Total Investment: Rp65,000,000,000.

6. License for Domestic Capital InvestmentExpansion No. 27/35/IU-PL/PMDN/2015dated December 15, 2015, issued by theHead of Capital Investment Agency of theEast Java Province on behalf of the EastJava Governor.

- Project Address: Jl. Raya Jombang-Babat, DradahlumbangVillage, Kedungpring District, Lamongan Regency, East JavaProvince.Type of Products/Services: Bedroom furniture and officefurniture, among others tables, chairs, cabinets (KBLI 31001)Total Investment: Rp65.000.000.000

Interkayu1. Trading Business Permit No.

510/20/404.6.2/2015 dated October 1,2015, issued by the Officer on Duty onbehalf of The Head Integrated LicensingService Agency of Sidoarjo Regency

October 1, 2020 Business Activities (according to KBLI): Trade (47591) andservices (49431)Main Merchandise/Trade Service: Trade of wooden furniture,wooden, steel and glass cabinet/box, and wooden home furnitureand fixtures and wooden office furniture and fixtures, freightservices.

Belayan1. Trading Business Permit No.

503/00219/17-01/PB/BPPTSP-C/X/2014dated October 2, 2014, issued by theHead of Integrated Licensing ServiceAgency of Samarinda City

October 2, 2019 Type of Industry: Natural forest cultivation (KBLI 02120)Main Merchandise/Trade Service: Forest development product(Hasil Pengelolaan Hutan, the "HPH")Institution: Export/Import

2. Renewal of Forest Concession Rights toBelayan based on the Decree of Ministerof Forestry and Plantation No. 853/Kpts-VI/1999 dated October 11, 1999, issuedby the Minister of Forestry and Plantationof the Republic of Indonesia

55 years sinceAugust 5, 1995.

Forest concession right for a forest area of ±97,500 hectareslocated in the Senyiur Hulu river groups, Sungai Len - SungaiBelayan, East Kalimantan, for a period of 55 years.

3. Decision of the Minister of Forestry andPlantation No. 853/Kpts-VI/1999concerning the Renewal of ForestConcession Right to BRT in EastKalimantan Province dated May 22, 2014.

55 years sinceMay 22, 2014.

-

Narkata1. Business Permit for Timber Forest

Product Utilization in Natural Forest45 (forty five)years since

Business permit for timber forest product utilization in naturalforest with total work permit area of ±65.925 hectare, consisting

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(previously Forest Concession Rights)based on the Decree of the Minister ofForestry of the Republic of Indonesia No.SK.116/MENHUT-II/2014 concerningAmendment to the Decree of the Ministerof Forestry of the Republic of IndonesiaNo. SK.278/MENHUT-II/2008 datedAugust 12, 2008.

March 28, 2009. of boundary result area of 42,356.40 hectare, and expansion ofwork area totaling ±23,569 hectare, with permanent productionforest area of ±9,400 hectare, limited production forest area of±56,525 hectare.

2. Large Trading Business Permit No.503/00218/17-01/PB/BPPTSP-C/IX/2014dated September 30, 2014, issued by theHead of Integrated Licensing ServiceAgency of Samarinda City

September 30,2019

Type of Industry: Natural forest cultivation (KBLI 02120)Main Merchandise/Trade Service: Forest development product(HPH)Institution: Export/Import

Intera1. Trading Business Permit No. 510/333-

317/404.6.2/2015 dated May 7, 2015,issued by the Head of IntegratedLicensing Service Agency of SidoarjoRegency.

July 4, 2017 Net Assets: Rp10,200,000,000Business Activities (according to KBLI): Trade (47591, 46491,46639)Main Merchandise/Trade Service: Trade of furniture made ofwood, rattan, banana leaf-sheath, processed wood, plywood, andbarecore.

2. New Industry Registration No.503/02/404.6.2/2013 dated January 21,2013, issued by the Head of IntegratedLicensing Service Agency of SidoarjoRegency.

- Type of Industry: Furniture and Wood Industry (KBLI 31001)Industry Commodity: Furniture made of wood and rattan, bamboohandicraft, pulp and banana leaf-sheath.Installed Capacity: 375,000 piecesTotal Investment: 200,000,000,000

3. Industry Business Permit No.3/35/IU/PMDN/2017 dated February 20,2017, issued by the Head of CapitalInvestment and Single Window IntegratedService Agency of the East Java Province.

As long as thecompany isoperating

Lines of Business: Wood, plywood, laminated wood industry,including plywood, wooden furniture industry, and rattan andbamboo wickerwork industry.Type of Products: Advanced wood processing industry, amongothers, barecore, gesso and rattan handicraft (KBLI 16212 andKBLI 16291).Capacity: 60,000 m3 and 200,000 pcs per year.

4. API-P No. 131501562-P dated May 13,2016, signed by the Head of CapitalInvestment Agency of East Java Province.




Type of Business: Timber and wooden furniture industry

5. Registered Exporter of Forest IndustryProducts No.No. 02.ET-D1.13.0222 dated August 25,2015, issued on behalf of the Minister ofTrade of the Republic of Indonesia,Coordinator and Executor of IntegratedTrade Service Unit I.

January 31,2018

Granted recognition as ETPIK (registered forestry industrialproduct exporter) for processed wood, barecore, plywood,furniture, and wooden & rattan handicrafts.

Integriya1. Trading Business Permit No. 510/153-

124/404.6.2/2016 dated March 8, 2016,issued by the Head of IntegratedLicensing Service Agency of SidoarjoRegency.

April 9, 2018 Net Assets: Rp20,200,000,000Business Activities (according to KBLI):Trade (46411, 46412, 46413, 46414, 46419, 46421, 46207,46208, 46491, 46914, 46631, 46632, 46633, 46635, 46636,46900) and Services (82920, 49431)Main Merchandise/Trade Service:Trade of home equipment, office equipment, home furniture,office furniture, products made of plastic, rubber, leather, fur,wood, metal, glass, mirror, hay, esparto grass, cork, charcoal,wickerwork, basket, paper, textile, wool, fine animal fur, artificialflowers, fowl feathers, umbrella, ceramics, accessories,ornaments, kitchen and home equipment made of porcelain,rubber, plastic, ceramics, glass, crystal, metal, ceramic statuesand products, manufactured products, artworks, collectibles,antiques, dry flower, various home appliances, bag & packagingproducts, media player, hair & beauty equipment andaccessories, stationery and office equipment, healthy product,

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bedroom furnishings, trolley, lightings and accessories, carpentrytools/machinery, garden tools, signage/signboard/displays,wallpaper, plastic, wood, vinyl chloride floor covering, carpentryand building products, weight scale, cleaning equipment, packingservice, freight delivery & transportation, freight forwardingservice.

2. Importer Identification Number - General(Angka Pengenal Importir - Umum, the"API-U")No. 131501889-P dated May 2, 2016,signed by the Head of Capital InvestmentAgency of East Java Province.




Type of Products: Trade of home equipment, office equipment,home furniture, office furniture, products made of plastic, rubber,leather, fur, wood, metal, glass, mirror, hay, esparto grass, cork,charcoal, wickerwork, basket, paper, textile, wool, fine animal fur,artificial flowers, fowl feathers, umbrella, ceramics, accessories,ornaments, kitchen and home equipment made of porcelain,rubber, plastic, ceramics, glass.

WII1. Importer Identification Number - Producer

(API-P) as set out in API-P Certificate No.131512432-B dated June 27, 2016,signed by the Head of Capital InvestmentAgency.




Type of Industry: Wooden building component industry (KBLI16221)Company Address: Jalan Raya Industri No. 578 RT.013,RW.007, Betro, Sedati, Sidoarjo 61253

2. Principal License of Foreign CapitalInvestment based on BKPM DecisionLetter No. 524/1/IP/PMA/2016 datedFebruary 25, 2016, signed by the Head ofCapital Investment Agency.

Three years Lines of Business: Wooden building component industry (KBLI16221)Type of Products: Wood sills, wood trim, wooden door, woodplinth

2. Approval to Conduct an Initial Public Offering

The Company has obtained Shareholders' approval to conduct an Initial Public Offering as set out inDeed No. 17/2017. The Group has also obtained the necessary waivers to waive the negative covenantson dividend distributions and the implementation of the Initial Public Offering as stated in (i) BNI No.LMC2/2.5/286/R dated April 3, 2017 regarding Approval and Support of Initial Public Offering of PTIntegra Indocabinet; (ii) BNI Letter No. LMC2/2.5/354/R dated April 25, 2017 regarding Approval andSupport of Initial Public Offering of PT Integra Indocabinet and (iii) Exim Letter No.BS.0090/PBS/04/2017 dated April 28, 2017 regarding the Agreement on the Amendment of Terms andConditions.

3. The Company's Shareholding Development

2015

The Company's capital structure and shareholder composition based on the Deed of MeetingResolutions of PT Integra Indocabinet No. 74 dated April 27, 2015, drawn up before Siti Nurul Yuliami,S.H., M.Kn., a Notary in Surabaya, were as follows:

Share capitalcomprising of ordinary registered shares

with a nominal value of Rp1,000,000 per share

Description Number ofShares


Authorized Capital 250,000 250,000,000,000Issued and Fully Paid-In Capital- PT Integra Indo Lestari 192,950 192,950,000,000 98.95- PT Sinergy Mentari Alam 2,050 2,050,000,000 1.05

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Total Issued and Fully Paid-In Capital 195,000 195,000,000,000 100.0Shares in Portfolio 55,000 55,000,000,000 -

100.0% or 195,000 shares of the nominal value of each shares which have been placed in the Companyas mentioned above, or amounting to Rp195,000,000,000.00, were fully paid by each of theShareholders in the form of cash deposit.

2016

The Company's capital structure and shareholder composition based on the Deed of MeetingResolutions of PT Integra Indocabinet No. 13 dated June 30, 2016, drawn up before Dyah AyuAmbarwati, S.H., M.Kn., a Notary in Pasuruan Regency, were as follows:





Authorized Capital 409,500 409,500,000,000Issued and Fully Paid-In Capital- PT Integra Indo Lestari 405,195 405,195,000,000 98.95- PT Sinergy Mentari Alam 4,305 4,305,000,000 1.05Total Issued and Fully Paid-In Capital 409,500 409,500,000,000 100.0Shares in Portfolio 409,500 409,500,000,000 -

100.0% or 409,500 shares of the nominal value of each shares which have been placed in the Companyas mentioned above, or amounting to Rp409,500,000,000.00, were fully paid by each of theShareholders as the result of the shares dividend distribution issued by the Company to theShareholders.

The Company's capital structure and shareholder composition based on the Deed of MeetingResolutions of PT Integra Indocabinet No. 12 dated August 25, 2016, drawn up before Dyah AyuAmbarwati, S.H., M.Kn., a Notary in Pasuruan Regency, were as follows:





Authorized Capital 500,000 500,000,000,000Issued and Fully Paid-In Capital- PT Integra Indo Lestari 495,695 495,695,000,000 99.14- PT Sinergy Mentari Alam 4,305 4,305,000,000 0.86Total Issued and Fully Paid-In Capital 500,000 500,000,000,000 100.0Shares in Portfolio - - -

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100.0% or 500,000 shares of the nominal value of each shares which have been placed in the Companyas mentioned above, or amounting to Rp500,000,000,000.00, were fully paid by each of theShareholders in the form of cash deposit as stated in the consolidated financial statements datedDecember 31, 2016, 2015 and 2014 which were audited by Teramihardja, Pradhono & Chandra (Rödl &Partner), Registered Public Accountants, an independent auditor.

The Company changed the nominal value of its shares to Rp100 per share as stated in the Deed ofMinutes of Extraordinary General Shareholders of PT Integra Indocabinet No. 13 dated September 7,2016, drawn up before Dina Chozie, S.H., substitute of Fathiah Helmi, S.H., a Notary in Jakarta.

The Company's latest capital structure and shareholder composition as of the date of this Prospectus,pursuant to the Deed of Minutes of the Extraordinary General Meeting of Shareholders of PT IntegraIndocabinet No. 13 dated September 7, 2016, drawn up before Dina Chozie, S.H., substitute of FathiahHelmi, S.H., a Notary in Jakarta, are as follows:




Authorized Capital 20,000,000,000 2,000,000,000,000Issued and Fully Paid-In Capital- PT Integra Indo Lestari 4,956,950,000 495,695,000,000 99.14- PT Sinergy Mentari Alam 43,050,000 4,305,000,000 0.86Total Issued and Fully Paid-In Capital 5,000,000,000 500,000,000,000 100.0Shares in Portfolio 15,000,000,000 1,500,000,000,000 -

The entire 5,000,000,000 shares with a nominal value per share of the Company’s issued shares referred toabove, amounting to Rp500,000,000,000.00, have been paid in full by each of the Shareholders.

As of the date of this Prospectus, there are no changes to the Company's capital structure and shareholdercomposition.

4. The Company’s Shareholders

A. PT Integra Indo Lestari (the "IIL")

IIL holds 4,956,950,000 shares, or 99.1% of the Company’s total issued and fully paid-in capital.

Deed of Establishment and Amendments Thereto

IIL was established pursuant to the Deed of Establishment of a Limited Liability Company PTIntegra Indo Lestari No. 22 dated December 15, 2011, drawn up before Siti Nurul Yuliami, S.H.,M.Kn., a Notary in Surabaya, which was approved by the MoLHR by Decree No. AHU-02030.AH.01.01.Tahun 2012 dated January 12, 2012, and registered in the Company Register inaccordance with the Companies Law under No. AHU-0003255.AH.01.09.Tahun 2012 datedJanuary 12, 2012, and announced in the Supplement No. 9149, State Gazette of the Republic ofIndonesia No. 32 dated April 19, 2013 (the "IIL's Deed of Establishment").

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IIL’s Articles of Association has been amended several times, and the last amendment was madebased on the Deed of Meeting Resolutions No. 11 dated August 25, 2016, drawn up before DyahAyu Ambarwati, S.H., M.Kn., a Notary in Pasuruan Regency. The deed of which was approved andreported to the MoLHR and registered in the Legal Entity Administration System database of theMinistry of Law and Human Rights under (i) Decree No. AHU-0015502.AH.01.02.TAHUN 2016dated August 29, 2016, and (ii) the Receipt of Notification No. AHU-AH.01.03-0075424 datedAugust 29, 2016, and registered in the Company Register in accordance with the Companies Lawunder No. AHU-0100371.AH.01.11.TAHUN 2016 dated August 29, 2016, (the "Deed No. 11/2016").

Management and Supervision

The composition of IIL’s Board of Commissioners and Directors as set out in the Deed ofShareholder Resolutions of IIL No. 10 dated September 2, 2016, drawn up before Dyah AyuAmbarwati, S.H., M.Kn., a Notary in Pasuruan Regency, which was reported to the MoLHR andregistered in the Legal Entity Administration System database of the Ministry of Law and HumanRights under Receipt of Notification of Company Data Change No. AHU-AH.01.01.03-0079879dated September 14, 2016, and registered in the Company Register in accordance with theCompanies Law under No. AHU-0107033.AH.01.11.TAHUN 2016 dated September 14, 2016, is asfollows:

Board of CommissionersCommissioner : Meity Lin-lin

DirectorsPresident Director : Widjaja KarliDirector : Stephanie Kane Ilham


Based on the Deed No. 11/2016, the capital structure and shareholder composition of IIL are asfollows:





Authorized Capital 366,000 366,000,000,000Issued and Fully Paid-In Capital- PT Alam Mentari Sejahtera 128,100 128,100,000,000 35.0- PT Duta Emerald Utama 91,500 91,500,000,000 25.0- PT Sinergy Mentari Alam 146,400 146,400,000,000 40.0Total Issued and Fully Paid-In Capital 366,000 366,000,000,000 100.0Shares in Portfolio - - -

Line of Business

Pursuant to IIL’s Deed of Establishment, the aims and objectives of IIL are to engage in thefollowing lines of business: industry, service, trade, construction, transportation, agriculture, animalhusbandry, fisheries, plantation, forestry and mining.

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To achieve the aims and the objectives referred to above, IIL may carry out the following businessactivities:a. To engage in industrial activities;b. To engage in the provision of services;c. To engage in general trade, at company’s own risk or on behalf of other parties, including export-

import trade and inter-island trade, as well as to act as an agent, purveyor, wholesaler,distributor, or supplier;

d. To provide construction services as a general contractor, including, among others, real estate,office buildings, plants, buildings, bridges, irrigations, electricity, phone, water, gas and otherinstallations related to construction works, including construction planning, implementation andmonitoring.

e. To engage in freight and transportation services; andf. To engage in agriculture, animal husbandry, fisheries, plantation, forestry and mining.

IIL’s main business activities currently focus on management services in the areas of informationtechnology, human resources and financial development.

Key Financial Highlights

(in Rupiah)December 31, 2016

Total Assets 682,268,049,666Total Liabilities 250,934,550,068Equity 431,333,499,598Revenue 21,417,461,000Operating Profit 398,597,050Profit for the Year 216,172,867,211

A. PT Sinergi Mentari Alam (the "SMA")

SMA holds 43,050,000 shares, or 0.9% of the Company’s total issued and fully paid-in capital.

Deed of Establishment and Amendments Thereto

SMA was established pursuant to the Deed of Establishment of a Limited Liability Company PTSinergy Mentari Alam No. 206 dated October 31, 2011, drawn up before Sylvia Gunawan, S.H.,M.Kn., a Notary in Sidoarjo Regency, which was approved by the MoLHR by Decree No. AHU-55614.AH.01.01.Tahun 2011 dated November 15, 2016, and was registered in the CompanyRegister in accordance with the Companies Law under No. AHU-0092225.AH.01.09.Tahun 2011dated November 15, 2011 (the "SMA’s Deed of Establishment").

SMA’s Articles of Association has been amended several times, and the last amendment was madebased on the Deed of Meeting Resolutions of SMA No. 8 dated August 25, 2016, drawn up beforeDyah Ayu Ambarwati, S.H., M.Kn., a Notary in Pasuruan Regency. The deed of which was reportedto the MoLHR and registered in the Legal Entity Administration System of the Ministry of Law andHuman Rights under Receipt of Notification of Amendment to SMA’s Articles of Association No.AHU-AH.01.03-0075426 dated August 29, 2016, and registered in the Company Register inaccordance with the Companies Law under No. AHU-0100374.AH.01.11.TAHUN 2016 datedAugust 29, 2016, (the "Deed No. 8/2016").

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The composition of SMA’s Board of Commissioners and Directors as set out in the Deed ofEstablishment of SMA are as follows:

Board of CommissionersCommissioner : Stephanie Kane Ilham

DirectorsDirector : Fransiskus Budi Laksono


Based on the Deed No. 8/2016, the capital structure and shareholder composition of SMA are asfollows:

Share capitalwith a nominal value of Rp500,000 per share



Authorized Capital 200,000 100,000,000,000Issued and Fully Paid-In Capital- PT Intergreen Sinergy Alam 93,264 46,632,000,000 58.0- Halim Rusli 67,536 33,768,000,000 42.0Total Issued and Fully Paid-In Capital 160,800 80,400,000,000 100.0Shares in Portfolio 39,200 19,600,000,000 -

Line of Business

Pursuant to SMA’s Deed of Establishment, the aims and objectives of SMA are to engage in trade,ground transportation services, construction services and industrial activities.

To achieve the aims and objectives referred to above, SMA may carry out the following businessactivities:a. To carry import and export trade as well as domestic trade for products produced independently

or by other companies;b. Act as a wholesaler, supplier, purveyor, franchisee or other similar roles;c. Act as a distributor, agent and representative of other domestic and international companies;d. To engage in transportation activities, including freight, container, tracking trailer, and other

related businesses;e. To engage in passenger transportation using bus, sedan, and other ground transportation

modes;f. To engage in the provision of services, except for legal and tax services.g. To engage in heavy equipment leasing and machinery leasing services;h. To engage in motor vehicle operating and capital leases and other related businesses;i. To engage in freight forwarding, packaging and warehousing (except veem) business, which

includes warehousing and other related businesses;j. To provide construction services as a general contractor, including the construction of real

estate, industrial estate, buildings, apartments, office buildings and hospitals;

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k. To act as a developer, providing construction planning, implementation, monitoring, landacquisition, land opening, back filing and leveling services;

l. To undertake the construction and renovation of buildings, fields, bridges, roads, parks, irrigationdams, airports, including the installation of piles/pipes, concrete components, pre-cast concrete,railway sleepers, other concrete products and other related businesses; and

m. To engage in manufacturing of motor vehicle spare parts, wood works and furniture, includingmanufacturing and design, sawing, drying, veneer (mini plywood), molding and saw milling

SMA is currently a non-operating holding company.


(in Rupiah)December 31, 2016

Total Assets 151,955,637,104Total Liabilities 1,138,450,000Equity 80,400,000,000Revenue -Operating Profit (5,128,212)Profit for the Year 70,367,750,000

5. Organizational Structure

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6. The Company’s Ownership Structure

The following sets out the chart of the Company's ownership structure as of the date of this Prospectus.

As of the date of this Prospectus, SMA has indirect ownership in the Company through IIL which is the major shareholder of the Company which has 4,956,950,000shares in the Company or approximately 99.14% of the nominal value of the shares placed in the Company. The Company's controlling Shareholder is IIL.

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7. The Company's Association by Way of Management and Supervision

The Company’s association by way of management and supervision of the Subsidiaries are as follows:

Name TheCompany Intera Integriya Interkayu Interkraft Intertrend Narkata Belayan

Hendro Rusli PC C - - D - D DStephanie KaneIlham

C - PD - - - - -

Bing HartonoPoernomosidi

IC - - - - - - -

Heri Sunaryadi IC - - - - - - -Halim Rusli PD PD - - C C VPD VPDMeity Lin-lin VPD - D PC - PD - -Sjany Tjandra D - C D PD - - -Widjaja Karli D D - - - D C CWang Sutrisno ID - - - - - - -Sandy Angdjaja - - - C - - - -Untung Iskandar - - - - - - PD PDAndreas NugrohoAdi

- - - - - - D D

Note:PC : President CommissionerC : CommissionerIC : Independent CommissionerPD : President DirectorVPD: Vice President DirectorD : DirectorID : Independent Director

8. Management and Supervision of the Company

Article 15 paragraph 11 read together with Article 18 paragraph 14 of the Deed No. 17/2017 states thatthe Board of Commissioners and Board of Directors of the Company shall be appointed for a tenure offive years or until the closing of the Annual GMS at the end of one period unless otherwise specified inthe GMS.

The composition of Board of Commissioners and Board of Directors composition have complied withOJK Regulation No. 33 of 2014, pursuant to Deed No. 17/2017. The composition of the Company'sBoard of Commissioners and Board of Directors as of the date of this Prospectus are as follows:

Board of CommissionersPresident Commissioner : Hendro RusliCommissioner : Stephanie Kane IlhamIndependent Commissioner : Bing Hartono PoernomosidiIndependent Commissioner : Heri Sunaryadi

DirectorsPresident Director : Halim RusliVice President Director : Meity Lin-linDirector of Operations : Sjany TjandraMarketing Director : Widjaja KarliFinance Director (IndependentDirector)

: Wang Sutrisno

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Roles and Responsibilities of Board of Commissioners

The Board of Commissioners is responsible for overseeing the implementation of the Company'sstrategies and also oversees the Directors to ensure the implementation of transparency andaccountability in the management of the Company. The Independent Commissioner is primarilyresponsible for ensuring the implementation of good corporate governance principles within theCompany. In conducting his duties, the Independent Commissioner shall lead the Board ofCommissioners in overseeing and advising the Directors effectively in order to improve the performanceof the Company, and take appropriate risks taking into consideration the Company's business objectivesin generating profits for shareholders and ensuring transparency and balanced disclosure in theCompany's financial statements.

Roles and Responsibilities of Directors

1. The Directors shall be entitled to represent the Company on all matters and events, with theauthority to enter into binding agreements with other parties, and shall also be entitled to carry out allmatters on management and ownership, except for:a. Receiving or granting medium / long term loans, in an amount that exceeds the limit which is

determined by the Board of Commissioners from time to time, with or without guarantee, exceptfor loans or receivables arising from business transactions.

b. Binding the Company as a guarantor for loans exceeding an amount determined by the Board ofCommissioners from time to time.

c. Selling, transferring or releasing of immovable properties, including land rights or companies inan amount which exceeds the limit determined by the Board of Commissioners from time to time.

d. Collateralizing or pledging the Company’s assets in an amount which exceeds the limitdetermined by the Board of Commissioners from time to time.

e. Participating in, releasing part or all of the investment or establishing a new company which isnot in the course of credit rescue in accordance with the prevailing laws and regulations, in anamount which exceeds the limit determined by the Board of Commissioners from time to time.

2. The Directors shall have the right and authority to act for and on behalf of the Directors and torepresent the Company

All members of the Company’s Directors have satisfied the qualifications of members of Directors set outin the prevailing laws and regulations, in particular the prevailing capital market laws and regulations.

The brief profile of each member of the Company's Board of Commissioners and Directors is as follows:

Board of Commissioners

Hendro RusliPresident Commissioner

Indonesian Citizen, 50 years old, born in Tangerang, April 28, 1967.

Mr. Rusli has served as the Company's President Commissioner since2016. Mr. Rusli presently serves as a Director of Interkraft since 2016,a Director of Belayan since 2016, a Director of Narkata since 2016, anda Commissioner of Intera since 2016. Mr. Rusli previously served asthe President Commissioner of Intertrend (from 2013 to 2016), aDirector of Intertrend (from 1998 to 2013), and a Director of CV JatiRimba (from 1992 to 1998).

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Stephanie Kane IlhamCommissioner

Indonesian Citizen, 49 years old, born in Ambon, March 1, 1968.

Ms. Ilham earned her Bachelor’s Degree in Marketing andManagement from Stamford College Singapore, Singapore, in 1985.

She has served as the Company's Commissioner since 1993. She hasserved as the President Director of Integriya since 2016. Shepreviously served as a Director in the Company (from 1991 to 1993).

Bing Hartono PoernomosidiIndependent Commissioner

Indonesian Citizen, 59 years old, born in Surabaya, May 4, 1958.

Mr. Poernomosidi earned his Bachelor of Economics from AirlanggaUniversity, Surabaya, in 1984.

He has served as the Company's Independent Commissioner since2016. Presently serving as a Director of PT Poernomosidi StrategicConsulting (PSC) since 2007. Mr. Poernomosidi previously served asthe Managing Partner of Prasetio, Sarwoko & Sandjaja - Ernst &Young, Surabaya (from 2002 to 2006), Managing Partner of Hanadi,Sarwoko & Sandjaja - Ernst & Young, Surabaya (from 2000 to 2002),President Director of PT Jaya Pari Steel Tbk (from 1996 to 2000),Manager in Prasetio Utomo & Co. - Arthur Andersen & Co., SC (from1990 to 1995), Professional Staff in Prasetio Utomo & Co. - ArthurAndersen & Co., SC (from 1984 to1990).

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Heri SunaryadiIndependent Commissioner

Indonesian Citizen, 52 years old, born in Jember, June 26, 1965.

Mr. Sunaryadi earned his Bachelor of Agriculture from Institut PertanianBogor, Bogor in 1987.

He has served as the Company's Independent Commissioner since2016. Mr. Sunaryadi previously served as a Commissioner of PTTelekomunikasi Selular (from 2015 to 2016), a Director of PTTelekomunikasi Indonesia (Persero) Tbk (from 2014 to 2016), thePresident Director of PT Sentral Efek Indonesia (Persero) (from 2013to 2014), the President Director of PT Bahana Pembinaan UsahaIndonesia (Persero) (from 2009 to 2013), the President Commissionerof PT Bahana Artha Ventura (from 2012 to 2013), a Commissioner ofPT Bahana Artha Ventura (from 2009 to 2012), a Commissioner of PTSarana Jatim Ventura (from 2010 to 2011), a Commissioner of PTBahana Artha Ventura (from 2009 to 2012), a Commissioner of PTMitra Tani Dua Tujuh (from 2010 to 2011), a Commissioner of PTKustodian Sentral Efek Indonesia (Persero) (from 2009 to 2012), thePresident Director of PT Bahana Securities (from 2007 to 2009), aDirector of PT Bahana Securities (from 1998 to 2007), the Equity SalesDivision Manager of PT Astra Securities (from 1997 to 1998), a HumanResources Manager of PT Astra Credit Companies (from 1995 to1997), and began his career in PT Astra International (from 1988 to1995).

Directors

Halim RusliPresident Director

Indonesian Citizen, 55 years old, born in Tangerang, Banten, March 29,1962.

Mr. Rusli earned his Bachelor of Business Administration from RedlandsUniversity, US in 1985.

He has served as the Company's President Director since 1989. Atpresent, Mr. Rusli also serves as the Vice President Director of Narkatasince 2016, Vice President Director of Belayan since 2016, aCommissioner of WII since 2015, a Commissioner of Intertrend since2016, a Commissioner of Interkraft since 2016, the President Director ofIntera since 2016. Mr. Rusli previously served as a Director of Integriya(from 2013 to 2016), a Commissioner of Belayan (from 2008 to 2016), aCommissioner of Narkata (from 2008 to 2016), the Production Managerof PT Ria Star (from 1985 to 1988).

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Meity Lin-linVice President Director

Indonesian Citizen, 47 years old, born in Mataram, December 26, 1969.

Ms. Lin-lin earned her Bachelor’s Degree from Airlangga WidyaMandala University, Surabaya, in 1989.

She has served as the Company's Vice President Director since 2016.At present, Ms. Lin-lin also serves as the President Director of Intertrendsince 2013, a Director of Integriya since 2016. She has previouslyserved as a Commissioner of Integriya (from 2013 to 2016), and beganher career in PT Aetna Life Indonesia (from 1989 to 2000).

Sjany TjandraOperations Director

Indonesian Citizen, 52 years old, born in Jakarta, April 30, 1965.

Ms. Tjandra earned her Bachelor of Science in Accounting from SanFrancisco State University, US in 1988.

She has served as the Company's Marketing Director since 1991. Atpresent, Ms. Tjandra also serves as a Commissioner of Integriya since2016, and a Director of Interkraft since 2012. She has previously servedas the Branch Head of Expeditor International (from 1991 to 1993),Personal Assistant for General Manager of Singapore Airlines (from1989 to 1991), Finance Supervisor of PT Multipolar (from 1988 to 1989),Treasury Staff of PT Bangkok Bank (1988).

Widjaja KarliMarketing Director

Indonesian Citizen, 51 years old, born in Tangerang, September 24,1965.

Mr. Karli earned his Bachelor of Science in Marketing from SanFrancisco State University, US in 1988.

He has served as the Company's Director since 1991. At present, Mr.Karli also serves as a Commissioner of Belayan since 2016, aCommissioner of Narkata since 2016, a Director of Intertrend since2016, the President Director of WII since 2015, a Director of Intera since2012. He previously served as a Director of Belayan (from 2014 to2016), a Director of Narkata (from 2014 to 2016), a Director of Interkraft(from 2002 to 2012), a Commissioner of Intertrend (from 1999 to 2012),a Marketing Manager of Citibank (from 1989 to 1991), an AccountOfficer of Bank Bali (from 1988 to 1989).

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Wang SutrisnoFinance Director (Independent Director)

Indonesian Citizen, 45 years old, born in Surabaya, September 30,1971.

Mr. Sutrisno earned his Bachelor of Economics from Universitas KristenPetra, Surabaya, in 1994, and Master of Business Management fromOklahoma State University, US in 1998.

He has served as the Company's Director since 2016. He previouslyserved as a Director of PT Integra Indo Lestari (from 2011 to 2016), aDirector of PT Anak Jaya Bapak Sejahtera (from 2002 to 2011),Department Head of Universitas Kristen Petra (from 1994 to 2002).

Certain members of the Board of Commissioners and Directors of the Company are related parties:Halim Rusli, Hendro Rusli and Widjaja Karli are siblings. Stephanie Kane Ilham, Meity Lin-lin, and SjanyTjandra are the wives of Halim Rusli, Hendro Rusli, and Widjaja Karli respectively.

Members of the Board of Commissioners and Directors shall meet at least once a month, with aminimum quorum of two members of the Board of Commissioners and two of the Directors.

Nomination and Remuneration Committee

The basis for the determination of the remuneration for the Directors is determined by Shareholdersresolution. The Shareholders' Resolution is submitted to the Board of Commissioners for considerationtogether with the recommendations of the Nomination and Remuneration Committee.

The determination of remuneration of the Board of Commissioners is solely determined by Shareholdersresolution to avoid any conflicts of interest.

The total remuneration of salaries and benefits paid by the Company to the Board of Commissioners wasRp1,700,098,968 as at the year ended on December 31, 2016, Rp1,426,622,976 as at the year endedon December 31, 2015, and Rp1,383,668,220 as at the year ended on December 31, 2014. Totalremuneration of salaries and benefits paid by the Company to the Directors was Rp2,441,433,232 as atthe year ended on December 31, 2016, Rp2,116,190,448 as at the year ended on December 31, 2015,and Rp1,930,388,804 as at the year ended on December 31, 2014.

Pursuant to the OJK Regulation No. 34 of 2014, the Company is required to establish a Nomination andRemuneration function. In order to comply with the provisions of OJK Regulation No. 34 of 2014 referredto above, the Company’s Board of Commissioners undertake the Nomination and Remunerationfunctions as set out in the Board of Commissioners Guideline to the Implementation of Nomination andRemuneration Function dated March 26, 2015.

Roles and Responsibilities

1. Act independently in performing their duties;2. Provide recommendations on:

a. The composition of the Board of Directors and/or the Board of Commissioners;b. Policies and criteria in connection with the nomination process; andc. Performance evaluation policies for the Board of Directors and/or the Board of Commissioners.

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3. Conduct performance appraisal of the Board of Directors and/or the Board of Commissioners basedon the benchmarks that have been prepared as evaluation materials;

4. Provide recommendations on the capacity building program for the Board of Directors and/or theBoard of Commissioners;

5. Nominate candidates who fulfill the requirements as members of the Board of Directors and/ormembers of the Board of Commissioners to be submitted to the GMS;

6. Provide recommendations on:a. Remuneration structure;b. Remuneration policy; andc. The amount of remuneration.

7. Conduct a performance appraisal and, in connection with the results of the performance appraisal,determine the amount of remuneration to be received by each member of the Board of Directorsand/or the Board of Commissioners.

Corporate Secretary

Pursuant to the OJK Regulation No. 35 of 2014 read together with Decision of the Directors of PT BursaEfek Jakarta No. Kep.305/BEJ/07-2004, and pursuant to the Appointment Letter dated March 1, 2017,the Company has appointed Mr. Wang Sutrisno as Corporate Secretary.

Wang Sutrisno

Indonesian Citizen, 45 years old, born in Surabaya, September 30, 1971.

Mr. Sutrisno earned his Bachelor of Economics from Universitas Kristen Petra, Surabaya, in 1994, andMaster of Business Management from Oklahoma State University, US in 1998.

He has served as the Company's Corporate Secretary since March 1, 2017. He has also served as aDirector of the Company since 2016. He previously served as a Director of PT Integra Indo Lestari(2011-2016), as a Director of PT Anak Jaya Bapak Sejahtera (2002-2011), and as a department head ofUniversitas Kristen Petra (1994-2002).

As a commitment to transparency for all stakeholders, the Company has appointed him to undertake thefollowing roles:a. Ensure the Company’s compliance with the prevailing laws and regulations and proper

implementation of Good Corporate Governance (the "GCG");b. Undertake the Corporate legal affairs function and ensure legal compliance;c. Undertake and implement the Corporate Social Responsibility (the "CSR") Policies;d. Keep abreast of the developments in the capital markets, in particular the prevailing laws and

regulations in the capital markets;e. Provide any information required by investors with regard to the Company’s condition;f. Provide advice to the Company’s Directors to comply with the provisions of the Capital Market Law

and the implementing regulations thereof; andg. Act as a liaison and contact person between the Company and the OJK and the Public.

The Company’s Corporate Secretary may be contacted at the following:Name : Wang SutrisnoPosition : Corporate secretaryAddress : Betro Village, Sedati District, Sidoarjo, 61253Phone : +62 31 8910434, +62 31 8910435, +62 31 8910436Email : [email protected]

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Audit Committee

Pursuant to the OJK Regulation No. 55 of 2015, which requires every public company to establish anAudit Committee and based on Letter No. 003/ITG/03/2017 dated March 1, 2017, the Company's Boardof Commissioners has agreed to pass a resolution to appoint the following members to the Company’sAudit Committee:Chairman : Bing Hartono PoernomosidiMember : Kristina Yunita WMember : Beny Bachtiar

The tenure of an Audit Committee member is five years and may not be longer than the tenure of theBoard of Commissioners of the Company.

Meetings of members of the Audit Committee and Board of Commissioners shall occur at least once amonth, with a minimum quorum of two members of the Audit Committee and two members of the Boardof Commissioners.

Bing Hartono Poernomosidi

Indonesian Citizen, 59 years old, born in Surabaya, May 4, 1958.

Mr. Poernomosidi earned his Bachelor of Economics from Airlangga University, Surabaya, in 1984.

He has served as the Company's Independent Commissioner since 2016. He has served as a Director ofPT Poernomosidi Strategic Consulting (PSC) since 2007. Mr. Poernomosidi previously served as themanaging partner of Prasetio, Sarwoko & Sandjaja - Ernst & Young, Surabaya (2002 - 2006), managingpartner of Hanadi, Sarwoko & Sandjaja - Ernst & Young, Surabaya (2000 - 2002), president director ofPT Jaya Pari Steel Tbk (1996 – 2000), manager in Prasetio Utomo & Co. - Arthur Andersen & Co., SC(1990-1995), and professional staff in Prasetio Utomo & Co. - Arthur Andersen & Co., SC (1984-1990).

Kristina Yunita W

Indonesian Citizen, 40 years old, born in Surabaya, June 25, 1976.

Ms. Yunita earned her Bachelor’s Degree from Widya Mandala Catholic University, Surabaya, in 1998.

She has served as IIL’s General Manager since 2011. She previously served as the General Manager ofPT Anak Jaya Bapak Sejahtera (from 2007 to 2011), a manager of PT Sariguna Primatirta (from 2006 to2007), a manager of PT Samator (from 2002 to 2006), a supervisor of PT Sama Satya Pasifik (from 1999to 2002), and a staff of PT Mitra Dharma Laksana (from 1998 to 1999).

Beny Bachtiar

Indonesian Citizen, 34 years old, born in Bondowoso, October 16, 1982.

Mr. Bachtiar earned his Bachelor of Economics from Surabaya University, Surabaya, in 2006.

He has served as IIL’s Supervisor since 2011. He previously served as a supervisor of PT Anak JayaBapak Sejahtera (from 2009 to 2011), a supervisor of PT Atomtech International (from 2008 to 2009), astaff of PT Barindo Anggun Industri (from 2007 to 2008), and a staff of PT Toppac Purna Cipta (from2006 to 2007).

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Objectives:

The Audit Committee’s duties and responsibilities are to provide a professional and independent opinionto the Board of Commissioners with respect to the supervisory function undertaken by the Board ofCommissioners.

Roles and Responsibilities

a. Review the financial information to be issued by the Company to the public and/or authorities,including, among others, financial statements, projections and other reports related to theCompany's financial information;

b. Review the Company's compliance with the prevailing laws and regulations applicable to theCompany's activities;

c. Provide an independent opinion in the event of difference of opinion between the managementand the accountant on the services provided;

d. Provide recommendations to the Board of Commissioners on the appointment of accountantsbased on independence, scope of engagement and fee;

e. Review the audit implementation conducted by the internal auditor and supervise theimplementation of follow-up action by the Directors on the internal auditor's findings;

f. Review the risk management implementation activities undertaken by the Directors, in the eventthat the Company does not have a risk monitoring function under the Board of Commissioners;

g. Review complaints related to the Company's financial reporting and accounting processes;h. Review and provide advice to the Board of Commissioners related to potential conflicts of interest

in the Company;i. Maintain the confidentiality of the Company's documents, data and information.

Authorities

a. Access the Company's documents, data and information regarding employees, funds, assets, andresources as required;

b. Directly communicate with employees, including the Directors and the parties undertaking theinternal audit and risk management functions as well as the accountant with respect to the dutiesand responsibilities of the Audit Committee;

c. Engage independent parties outside the Audit Committee to assist with the implementation of itsduties (if necessary); and

d. Undertake other authorities granted by the Board of Commissioners.

Internal Audit Unit

Pursuant to the OJK Regulation No. 56 of 2015, and the Appointment Letter No. 002/ITG/03/2017 datedMarch 1, 2017, the Company has established an IAU. The Company has also established an IAUcharter, which was ratified by the Board of Commissioners and Directors on March 1, 2017. The IAUcharter sets out the guidelines of the IAU. The composition of the IAU as of the date of this Prospectus isas follows:

Chairman : Tjio LinawatiMember : Felicia Huliana Widharma BasirMember : Erwin Herman Susilo

Tjio Linawati

Indonesian Citizen, 50 years old, born in Surabaya, January 22, 1967.

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Ms. Linawati earned her Associate Degree in Accounting from Surabaya University, Surabaya, in 1988.

Ms. Linawati has served as IIL’s Financial Controller since 2015. She previously served as theCompany's finance manager (from 2011 to 2015), the Company's finance staff (from 1991 to 2011), andfinance staff of PT Super Viktorindo (from 1989 to 1991).

Felicia Huliana Widharma Basir

Indonesian Citizen, 35 years old, born in Jakarta, February 23, 1982

Ms. Basir earned her Bachelor Degree in Accounting from Pelita Harapan University, Tangerang in 2004.

Ms. Basir has served as IIL’s financial supervisor since 2011. She previously served as the Company’ssupervisor (from 2010 to 2011), a supervisor of PT Smart Business Solution (from 2008 to 2009), a staffof PT Adhika Mekar Abadi (from 2006 to 2007) and a staff of PT Young Industry Indonesia (from 2004 to2006).

Erwin Herman Susilo

Indonesian Citizen, 38 years old, born in Tuban, February 16, 1979

Mr. Susilo earned his Associate Degree in Accounting from STIE Perbanas, Surabaya in 2002

Mr. Susilo has served as IIL’s Supervisor since 2011. He previously served as supervisor of PT Maspion(from 2006 to 2011), a staff of PT Sinar Sosro (from 2004 to 2006), a staff of PT Resort Tuban Tropis(from 2003 to 2004) and a staff of Public Accounting Firm Soegeng Sutedjo (from 2002 to 2003).

Objectives:

Provide an independent opinion and ensure the efficiency and effectiveness of internal control systemsby conducting audits, reviews, as well as analysis and recommendations relating to the auditeddepartment/activities.

Roles and Responsibilities:

1. Prepare and implement the annual audit plan;2. Test and evaluate the implementation of internal control and risk management system in accordance

with the Company’s policies;3. Conduct testing and assess the efficiency and effectiveness of finance, accounting, operations,

human resources, marketing, information technology and other activities;4. Provide recommendations for improvements and objective information concerning the audited

activities to all levels of management;5. Prepare audit reports and submit such reports to the President Director and the Board of

Commissioners;6. Monitor, analyze and report the implementation of follow-up actions with respect to the

recommendations made;7. Cooperate with the Audit Committee;8. Develop programs to evaluate the quality of internal audit activities.9. Conduct special audit if required, as approved and assigned by the President Director.

Authorities:

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1. Access all relevant information concerning the Company in connection with its duties and functions;2. Communicate directly with the Board of Directors, Board of Commissioners, and/or Audit Committee

and members of the Board of Directors, Board of Commissioners, and/or Audit Committee;3. Conduct periodic and ad hoc meetings with the Board of Directors, Board of Commissioners and/or

Audit Committee; and4. Coordinate with the external auditor in all relevant activities.

The tenure of the members of the Internal Audit Unit shall be five years and may not be longer than thetenure of the Board of Commissioners of the Company.

Members of the Internal Audit Unit and the Board of Commissioners shall meet at least once a month,with a minimum quorum of two members of the Internal Audit Unit and two members of the Board ofCommissioners.

9. Human Resources

The Company recognizes that its human resources is important for sustainable business development.Therefore, the Company makes every effort to focus on improving the quality of its human resourcesthrough education, training, development programs, as well as welfare maintenance and services for allemployees, across technical and managerial functions.

In order to improve the productivity of its employees, in addition to internal training, the Company alsoenrolls its employees in local and international seminars, workshops or courses that are relevant to theirrespective fields.

The Company's employees are amongst its most valuable assets. The Company therefore believes thatit should provide resources to allow them to perform at their best potential.

The majority of the Company's employees are unskilled. However, the Company employs some skilledpersons in areas where skilled labor is necessary. It is unlikely that business continuity will be adverselyaffected should any of the Company's employees leave the Company.

The Company's employees have established a labor union for the period from 2015 to 2018. The LaborUnion has been acknowledged by the Indonesian Timber and Forestry Labor Union Federation -Confederation of All Indonesia Trade Unions by Decision Letter No. KEP.02/ORG/1304/KAHUT/X/2016dated May 7, 2015. The Company has also established a Collective Labor Agreement withPUK.SP.KAHUT.SPSI PT Integra Indocabinet dated July 29, 2016, which is valid up to August 31, 2018,and has been ratified by the Head of Social and Manpower Agency of Sidoarjo Regency by DecisionLetter No. KEP.188/898/404.3.3/VIII/2016 dated August 22, 2016, with mandatory re-registration onAugust 31, 2018.

The following tables present employee compositions, including the Directors based on status, education,position and age.

Employee Composition by Employment Status

The composition of our employee base by employment status is as follows:

DescriptionDecember 31 March

31, 20172014 2015 2016The Company:

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31, 20172014 2015 2016Permanent Employees 341 340 1,089 1,131Contract Employees 2,719 2,821 1,968 1,658Total employees of the Company 3,060 3,161 3,057 2,789Subsidiaries:Intertrend:Permanent Employees 185 176 427 428Contract Employees 989 1,154 1,078 1,494Total Employees of Intertrend 1,174 1,330 1,505 1,922Interkraft:Permanent Employees 143 142 346 353Contract Employees 870 827 837 733Total Employees of Interkraft 1,013 969 1,183 1,086Interkayu:Permanent Employees - 2 2 2Contract Employees - - - -Total Employees of Interkayu - 2 2 2Belayan:Permanent Employees 171 168 205 199Contract Employees 87 145 276 59Total Employees of Belayan 258 313 481 258Narkata:Permanent Employees 80 80 81 87Contract Employees 42 61 63 45Total Employees of Narkata 122 141 144 132Intera:Permanent Employees 9 70 119 132Contract Employees 22 229 528 583Total Employees of Intera 31 299 647 715Integriya:Permanent Employees 20 27 119 120Contract Employees 8 16 24 36Total Employees of Integriya 28 43 143 156Total 5,686 6,258 7,162 7,060

Employee Composition by Education Level

The composition of our employee base by education level is as follows:


31, 20172014 2015 2016The Company> Master's Degree 2 2 3 3Bachelor's Degree 170 183 180 155Diploma 111 120 119 114< High School and Equivalent 2,777 2,856 2,755 2,517Total employees of the Company 3,060 3,161 3,057 2,789Subsidiaries:Intertrend:> Master's Degree - - - -

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31, 20172014 2015 2016Bachelor's Degree 133 152 356 373Diploma 59 59 70 170< High School and Equivalent 982 1,119 1,079 1,379Total Employees of Intertrend 1,174 1,330 1,505 1,922Interkraft:> Master's Degree - - - -Bachelor's Degree 116 118 213 213Diploma 47 46 64 64< High School and Equivalent 850 805 906 809Total Employees of Interkraft 1,013 969 1,183 1,086Interkayu:> Master's Degree - - - -Bachelor's Degree - 2 2 2Diploma - - - -< High School and Equivalent - - - -Total Employees of Interkayu - 2 2 2Belayan:> Master's Degree 2 2 2 2Bachelor's Degree 34 35 38 38Diploma 2 3 7 7< High School and Equivalent 220 273 434 211Total Employees of Belayan 258 313 481 258Narkata:> Master's Degree 2 2 2 2Bachelor's Degree 26 27 27 27Diploma 4 5 6 6< High School and Equivalent 90 107 109 97Total Employees of Narkata 122 141 144 132Intera:> Master's Degree - - - -Bachelor's Degree 9 62 108 110Diploma - 22 31 51< High School and Equivalent 22 215 508 554Total Employees of Intera 31 299 647 715Integriya:> Master's Degree - - - -Bachelor's Degree 14 24 76 85Diploma 4 6 23 27< High School and Equivalent 10 15 44 44Total Employees of Integriya 28 43 143 156Total 5,686 6,258 7,162 7,060

Employee Composition by Position

The composition of our employee base by position is as follows:


31, 20172014 2015 2016The Company

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31, 20172014 2015 2016Director 3 3 5 5General Manager/Assistant General Manager 5 6 9 9Senior Manager/ Manager 20 23 37 37Assistant Manager 26 27 24 24Supervisor/Coordinator 42 47 52 52Foreman 103 107 107 107Staff/Administrator 96 116 112 112Line Leader/Operator/Laborer 2,765 2,832 2,711 2,443Total employees of the Company 3,060 3,161 3,057 2,789Subsidiaries:Intertrend:Director 1 1 2 2General Manager/Assistant General Manager 1 1 1 1Senior Manager/ Manager 17 16 20 18Assistant Manager 3 9 6 26Supervisor/Coordinator 22 23 77 35Foreman 58 74 22 96Staff/Administrator 29 25 - 42Line Leader/Operator/Laborer 1,043 1,514 1,419 1,702Total Employees of Intertrend 1,174 1,663 1,545 1,922Interkraft:Director 1 1 2 2General Manager/Assistant General Manager 2 2 3 3Senior Manager/ Manager 13 12 20 20Assistant Manager 16 14 29 29Supervisor/Coordinator 21 21 68 68Foreman 68 64 65 65Staff/Administrator 55 51 64 64Line Leader/Operator/Laborer 837 804 932 835Total Employees of Interkraft 1,013 969 1,183 1,086Interkayu:Director - 2 2 2General Manager/Assistant General Manager - - - -Senior Manager/ Manager - - - -Assistant Manager - - - -Supervisor/Coordinator - - - -Foreman - - - -Staff/Administrator - - - -Line Leader/Operator/Laborer - - - -Total Employees of Interkayu - 2 2 2Belayan:Director 3 3 3 3General Manager/Assistant General Manager 2 2 1 1Senior Manager/ Manager 10 10 13 13Assistant Manager - - - -Supervisor/Coordinator 9 9 11 11Foreman - - - -Staff/Administrator 52 55 73 64Line Leader/Operator/Laborer 182 234 380 166Total Employees of Belayan 258 313 481 258

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31, 20172014 2015 2016Narkata:Director 3 3 3 3General Manager/Assistant General Manager 2 2 2 2Senior Manager/ Manager 3 3 3 3Assistant Manager - - - -Supervisor/Coordinator 8 8 8 8Foreman - - - -Staff/Administrator 34 34 34 28Line Leader/Operator/Laborer 72 91 94 88Total Employees of Narkata 122 141 144 132Intera:Director 1 1 2 2General Manager/Assistant General Manager - - 1 1Senior Manager/ Manager 3 7 8 8Assistant Manager - 11 10 10Supervisor/Coordinator 2 8 21 21Foreman - - 15 15Staff/Administrator 3 39 50 50Line Leader/Operator/Laborer 22 232 540 608Total Employees of Intera 31 299 647 715Integriya:Director 1 1 2 2General Manager/Assistant General Manager - 2 5 5Senior Manager/ Manager 3 4 9 9Assistant Manager 1 - 15 15Supervisor/Coordinator 5 7 21 21Foreman - - - -Staff/Administrator 8 15 91 104Line Leader/Operator/Laborer 10 14 - -Total Employees of Integriya 28 43 143 156Total 5,686 6,258 7,162 7,060

Employee Composition by Age

The composition of our employee base by age is as follows:


31, 20172014 2015 2016The Company>= 50 years 54 55 55 5540 - 49 years 284 298 418 40830 - 39 years 578 565 564 55420 - 29 years 2,109 2,195 1,999 1,75118 - 19 years 35 48 21 21Total employees of the Company 3,060 3,161 3,057 2,789Subsidiaries:Intertrend:>= 50 years 4 4 5 540 - 49 years 43 43 51 5330 - 39 years 156 196 282 444

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31, 20172014 2015 201620 - 29 years 925 1,035 1,021 1,25418 - 19 years 46 52 146 166Total Employees of Intertrend 1,174 1,330 1,505 1,922Interkraft:>= 50 years 5 5 5 540 - 49 years 34 28 46 4630 - 39 years 168 156 259 25920 - 29 years 779 754 811 71418 - 19 years 27 26 62 62Total Employees of Interkraft 1,013 969 1,183 1,086Interkayu:>= 50 years - 1 1 140 - 49 years - 1 1 130 - 39 years - - - -20 - 29 years - - - -18 - 19 years - - - -Total Employees of Interkayu - 2 2 2Belayan>= 50 years 23 23 23 2140 - 49 years 43 44 50 4730 - 39 years 73 72 91 7220 - 29 years 114 162 282 9018 - 19 years 5 12 35 28Total Employees of Belayan 258 313 481 288

Narkata>= 50 years 18 18 19 1940 - 49 years 30 32 33 3330 - 39 years 36 35 34 3420 - 29 years 37 55 56 4418 - 19 years 1 1 2 2Total Employees of Narkata 122 141 144 132Intera>= 50 years 1 3 7 740 - 49 years 1 27 28 2830 - 39 years 8 52 111 13920 - 29 years 21 196 473 51318 - 19 years - 19 28 28Total Employees of Intera 31 299 647 715Integriya>= 50 years 1 1 2 240 - 49 years 1 2 11 1130 - 39 years 6 9 35 3520 - 29 years 20 31 88 10118 - 19 years - - 7 7Total Employees of Integriya 28 43 143 156Total 5,686 6,258 7,162 7,060

Employee Composition by Business Activities

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The composition of our employee base by business activities is as follows:


31, 20172014 2015 2016The CompanyManufacturing 3,060 3,161 3,057 2,789Total employees of the Company 3,060 3,161 3,057 2,789Subsidiaries:Intertrend:Manufacturing 1,174 1,330 1,505 1,922Total Employees of Intertrend 1,174 1,330 1,505 1,922Interkraft:Manufacturing 1,013 969 1,183 1,086Total Employees of Interkraft 1,013 969 1,183 1,086Interkayu:Non-operating Holding Company - 2 2 2Total Employees of Interkayu - 2 2 2BelayanForestry Concession 258 313 275 288Total Employees of Belayan 258 313 275 288NarkataForestry Concession 122 141 144 132Total Employees of Narkata 122 141 144 132InteraManufacturing 31 299 647 715Total Employees of Intera 31 299 647 715IntegriyaRetail & Distribution 28 43 143 156Total Employees of Integriya 28 43 143 156Total 5,686 6,258 6,956 7,060

Employee Composition by Location

The composition of our employee base by location is as follows:


31, 20172014 2015 2016The CompanyEast Java 3,060 3,161 3,057 2,789Total employees of the Company 3,060 3,161 3,057 2,789Subsidiaries:Intertrend:East Java 1,174 1,330 1,505 1,922Total Employees of Intertrend 1,174 1,330 1,505 1,922Interkraft:East Java 1,013 969 1,183 1,086Total Employees of Interkraft 1,013 969 1,183 1,086Interkayu:East Java - 2 2 2Total Employees of Interkayu - 2 2 2Belayan

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31, 20172014 2015 2016East Kalimantan 258 313 275 288Total Employees of Belayan 258 313 275 288NarkataEast Kalimantan 122 141 144 132Total Employees of Narkata 122 141 144 132InteraEast Java 31 299 647 715Total Employees of Intera 31 299 647 715IntegriyaEast Java 28 43 143 156Total Employees of Integriya 28 43 143 156Total 5,686 6,258 6,956 7,060

Foreign Labor

As of the date of this Prospectus, the Group has five foreign workers as shown in the table below:

Name Position Nationality IMTA ExpiryDate KITAS Expiry

Date Description

Joel LimLin

QualityControlManager

Philippines No.569/329/01.5.77/2017

April 30,2018

2C21CD0292-R April 30,2018

Company

RudolfWilhem

ProductionEngineer

Germany No.569/7665/404.3.3/2015

October24, 2017

2C21CD1615-Q October24, 2017

Company

AlbertFonga

MechanicalEngineer

Italy No.559/5166/404.3.3/2015

August 2,2017

2C21CD1091-Q August2,2017

Company

TomoyukiMiyauchi

FinanceDirector

Japan No.569/60/404.5.15/2017

May 7,2018

2C11CD0539-Q June 7,2017

WII

IkuoMotoyama

Research andDevelopmentManager

Japan No.569/59/404.5.15/2017

May 7,2018

2C11CD0538-Q June 7,2017

WII

Social Welfare

The Company provides various welfare programs and facilities for all permanent and contract employeesas well as their families. The facilities and programs include:- Worker Social Security Agency programs;- Pension plans;- Religious holiday allowances;- Medical service and Health Care and Social Security Agency programs;- Social donations (for celebration and bereavement);- Recreational activities;- Telecommunication allowance (for select employees);- Educational allowance for the employees’ children with good performance records;- Loyalty rewards for employees with more than five years of service;

The Company’s employee compensation, welfare and facility programs are in compliance with theprovisions and regulations of the Department of Manpower, including provisions and regulations relatingto the applicable minimum wage.

Internal Control System

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The Company fully believes that to oversee its operations and secure its wealth, an internal controlsystem is required as a tool. The Company’s internal control system comprises the relevant riskmanagement policies and procedures to effectively perform the control function while minimizing therisks that may arise.

The Company has conducted various supervisory activities, both strategic and routine, in accordancewith the Annual Work Program (“PKPT”), including: Preparation of Self Assessment Guidelines for Good Corporate Governance (GCG) implementation,

and implementation of its self assessment. Preparation of Risk Based Audit Guidelines. Tasking external auditors as counterparties in internal control activities. Monitoring the follow-up of audit findings by the internal control staff and the external auditor (public

accounting firm). Improving the quality of the internal control system’s staff through education, seminars and

workshops. Maintaining the independence of the internal control system, which reports directly to the Directors.

There can be no assurance that this internal control system will reduce risk of fraud or other risks.However, the Company is committed to continuously improving its internal control system.

10. Description of Direct Subsidiaries and Indirect Subsidiary

As of the date of this Prospectus, the Company has direct and indirect ownerships in seven Subsidiariesand one Indirect Subsidiary as follows:

A. Description of Direct Subsidiaries

As of the date of this Prospectus, the Company has seven Direct Subsidiaries, in which it has more than50.0% shareholding. These include:

No. Subsidiary Line of Business Percentage ofOwnership

Year ofInitial



1. Intertrend Industry and trade ofindustrial products

99.0% directownership by theCompany


Operating

2. Interkraft Trade, construction,mining, industry,agriculture,transportation, printingand service



Operating

3. Interkayu Service 80.0% directownership by theCompany


Operating

4. Belayan Forestry, industry,trade, import andagency


2012 Samarinda,East

Kalimantan

Operating

5. Narkata Forestry, industry,trade, import andagency


2011 Samarinda,East

Kalimantan

Operating

6. Intera Industry, service, trade,construction,transportation,agriculture, animal



Operating

88

No. Subsidiary Line of Business Percentage ofOwnership

Year ofInitial



husbandry, fisheries,plantation, forestry andmining.

7. Integriya Trade and service 99.0% directownership by theCompany


Operating

The following sets out the contributions of each Direct Subsidiary in relation to income, profit before tax,total assets and total liabilities from the consolidated financial statements of the Company for the yearended on December 31, 2016 as follows:

(in Rupiah)

Name of Company Contribution toRevenue

Contribution toProfit (Loss)Before Tax

Contribution toTotal Assets

Contribution toTotal Liabilities

The Company 721,991,285,692 226,082,727,426 1,748,598,784,324 715,964,754,853Intertrend 268,280,536,674 33,617,011,508 643,789,530,229 310,904,984,135Interkraft 128,376,213,013 7,085,070,404 551,351,273,799 282,929,357,109Interkayu 77,000,321,155 (2,242,692,473) 75,866,792,817 44,449,499,492Belayan 185,006,814,595 8,447,098,068 322,969,591,993 240,180,865,944Narkata 61,344,043,338 11,938,939,766 123,485,183,728 68,490,816,246Intera 136,741,268,362 34,712,415,959 171,087,267,570 113,015,861,751Integriya 36,204,535,529 (11,752,835,055) 105,934,757,320 96,351,811,009Elimination (291,556,039,319) (112,806,511,081) (661,208,971,285) (220,446,721,870)Total Consolidated Amount 1,323,388,979,039 195,081,224,522 3,081,874,210,495 1,651,841,228,669

A1. Intertrend

Establishment and Business Activities

Intertrend, domiciled in Sidoarjo Regency, is a limited liability company established in the Republic ofIndonesia. Intertrend was established under the Deed of Limited Liability Company Intertrend No. 04dated March 4, 1993, as subsequently revised by the Deed No. 52 dated July 27, 1995, and Deed No.49 dated January 23, 1996, drawn up before Ida Yudayati, S.H., a Notary in Sidoarjo. Theaforementioned deeds were approved by the Minister of Justice of the Republic of Indonesia underDecree No. 02-5.886.HT.01.01.TH.96 dated March 6, 1996, registered in the registry of Surabaya DistrictCourt Administration Office under No. 1222/1996, Administrator of Surabaya District Court dated July 30,1996.

Intertrend’s Articles of Association has been amended several times, and the most recent amendmentwas made based on the Deed of Meeting Resolutions No. 8 dated September 2, 2016, drawn up beforeDyah Ayu Ambarwati, S.H., M.Kn., a Notary in Pasuruan Regency. The deed was approved and reportedto the MoLHR and registered in the Legal Entity Administration System database of the Ministry of Lawand Human Rights under (i) Letter of Approval on Amendment to Intertrend’s Articles of Association No.AHU-0016497.AH.01.02.Tahun 2016 dated September 14, 2016, and registered in the CompanyRegister in accordance with the Companies Law under No. AHU-0106811.AH.01.11.Tahun 2016 datedSeptember 14, 2016, and (ii) the Receipt of Notification of Amendment to Articles of Association No.AHU-AH.01.03-0079734 dated September 14, 2016, (the "Intertrend’s Articles of Association").

Intertrend is domiciled at Jl. Industri No. 28, RT 010/ RW 003, Sukorejo Village, Buduran District,Sidoarjo Regency, East Java.

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The aims and objectives of Intertrend as set out in the Deed of Minutes of Extraordinary General Meetingof Shareholders of the Limited Liability Company Intertrend No. 10 dated March 10, 2008, drawn upbefore Choiriyah, S.H., a Notary in Sidoarjo, approved by the MoLHR and registered in the Legal EntityAdministration System database of the Ministry of Law and Human Rights under the Letter of Approvalon Amendment to Intertrend’s Articles of Association AHU-24133.AH.01.02.Tahun 2008 and registeredin the Company Register in accordance with the Companies Law under No. AHU-0035344.AH.01.09Tahun 2008 dated May 9, 2008, are to engage in industrial activities and trade of industrial products. Toachieve the aforementioned aims and objectives, Intertrend may carry out the following businessactivities:a. Operate a company engaged in industrial activities, by incorporating and operating the furniture

industry business; andb. Trade the industrial products referred to above, both in the domestic and international markets

through export, and other business activities related to the business activities referred to above.

Intertrend's current business activities focus on the production of wood-based furniture and other wood-based building component products with market focus on in the US and countries in the EU such asGermany, France and Netherlands.


Pursuant to Intertrend's Articles of Association, the composition of the Board of Commissioners andBoard of Directors of Intertrend are as follows:

Board of CommissionersCommissioner : Halim Rusli

DirectorsPresident Director : Meity Lin-linDirector : Widjaja Karli

Capital Structure and Shareholder Composition

Based on Intertrend’s Articles of Association, its capital structure and shareholder composition are asfollows:

DescriptionNominal Value Rp1.000.000.- per share Percentage of

Ownership (%)Number ofShares

Total Nominal Value (Rp)

Authorized Capital 155,006 155,006,000,000Issued and Fully paid-in capitalThe Company 154,096 154,096,000,000 99.42PT Duta Emerald Utama 910 910,000,000 0.58Issued and Fully paid-in capital 155,006 155,006,000,000 100Total Shares in Portfolio - -


The following table presents Intertrend's key financial highlights derived from Intertrend’s financialstatements as of and for the years ended on December 31, 2016, 2015 and 2014.

Intertrend's consolidated financial statements as of December 31, 2016, 2015, and 2014, and for theyears ended on those dates were audited by Teramihardja, Pradhono & Chandra, Registered Public

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Accountans, an independent auditor, based on the auditing standards set out by Indonesian Institute ofPublic Accountant (the "IAPI"). The auditor's report dated April 28, 2017, which was unmodified andsigned by Agustina Felisa, with an emphasis of matter in relation to the change in the functional currencyof the Company and certain Subsidiaries from USD to IDR.

(In Rupiah)


Statements of Financial PositionCurrent Assets 204,545,854,980 256,140,861,752 304,008,771,450Non-Current Assets 105,824,741,280 137,540,081,575 339,780,758,779Total Assets 310,370,596,260 393,680,943,327 643,789,530,229Current Liabilities 171,455,971,487 222,012,368,521 264,509,814,883Non-Current Liabilities 12,249,962,088 13,450,833,567 46,395,169,252Total Liabilities 183,705,933,575 235,463,202,088 310,904,984,135Share Capital 35,000,000,000 55,000,000,000 155,006,000,000Additional Paid-in Capital 20,000,000,000 - -Revaluation Surplus of Fixed Assets - net 35,615,727,069 29,739,826,595 115,574,793,802Exchange Difference Due to Translation of Financial

Statements15,137,118,402 34,619,020,345 34,619,020,345

Retained Earnings 20,911,817,214 38,858,894,299 27,684,731,947Total Equity 126,664,662,685 158,217,741,239 332,884,546,094Total Liabilities and Equity 310,370,596,260 393,680,943,327 643,789,530,229

a. Non-Current Assets


Intertrend's total non-current assets as of December 31, 2016 increased by 147.0%, orRp202,240,677,204, from Rp137,540,081,575 as of December 31, 2015 to Rp339,780,758,779. Theincrease was mainly due to the revaluation of fixed assets conducted by Intertrend.

b. Total Assets


Intertrend’s total assets as of December 31, 2016 increased by 63.5% or Rp250,108,585,902, fromRp393,6980,943,327 as of December 31, 2015 to Rp643,789,530,229. The increase was mainly due tothe revaluation of fixed assets conducted by Intertrend and an increase in advances for purchase of fixedassets.

c. Non-Current Liabilities


Intertrend’s total non-current liabilities as of December 31, 2016 increased by 244.9% orRp32,944,355,685, from Rp13,450,833,567 as of December 31, 2015 to Rp46,395,169,252. Theincrease was mainly due to an increase in deferred tax liabilities arising from revaluation of fixed assets.

d. Total Liabilities


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Intertrend’s total liabilities as of December 31, 2016 increased by 32.0% or Rp75,441,782,047, fromRp235,463,202,088 as of December 31, 2015 to Rp310,904,984,135. The increase was mainly due tothe revaluation of fixed assets conducted by Intertrend, an increase in lease payables and an increase inbank loans, which were in line with Intertrend's growing operational activities.

e. Total Equity


Intertrend’s total equity as of December 31, 2016 increased by 110.4% or Rp174,666,804,855, fromRp158,217,741,329 as of December 31, 2015 to Rp332,884,546,094. The increase was mainly due toadditional paid-in capital from Intertrend’s shareholders and the revaluation of fixed assets conducted byIntertrend in 2016.

(In Rupiah)


STATEMENTS OF PROFIT OR LOSS AND OTHERCOMPREHENSIVE INCOME

Net Sales 167,298,304,160 248,524,196,112 268,280,536,674Gross Profit 30,848,733,896 63,586,153,440 80,157,562,138Net Income 3,760,741,092 17,195,194,080 23,901,670,068Total Comprehensive Income for the Year 3,779,689,754 31,553,078,554 110,660,804,855

a. Net sales


Intertrend’s net sales for the year ended on December 31, 2015 increased by 48.6% orRp81,225,891,952, from Rp167,298,304,160 for the year ended on December 31, 2014 toRp248,254,196,112. The increase in net sales was mainly due to an increase of export sales volume andan increase in new international and local customers.

b. Gross profit


Intertrend’s gross profit for the year ended on December 31, 2015 increased 106.1% orRp32,737,419,544, from Rp30,848,733,896 for the year ended on December 31, 2014 toRp63,586,153,440. The increase in gross profit was mainly due to more efficient use of raw materialsand an increase in sales volume, resulting in lower fixed manufacturing costs as a result of theeconomies of scale.

c. Profit for the year


For the abovementioned reasons, Intertrend’s profit for the year ended on December 31, 2016 increasedby 39.0% or Rp6,706,475,988, from Rp17,195,194,080 for the year ended on December 31, 2015 toRp23,901,670,068.


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For the abovementioned reasons, Intertrend’s profit for the year ended on December 31, 2015 increasedby 357.2% or Rp13,434,452,988, from Rp3,760,741,092 for the year ended on December 31, 2014 toRp17,195,194,080.

d. Total comprehensive income for the year

Year Ended December 31, 2016 compared to the Year Ended on December 31, 2015

Intertrend’s comprehensive income for the year ended on December 31, 2016 increased by 250.7% orRp79,107,726,301, from Rp31,553,078,554 for the year ended on December 31, 2015 toRp110,660,804,855. The increase in comprehensive income for the year was mainly due to an increasein gain on revaluation of fixed assets.

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Intertrend’s comprehensive income for the year ended on December 31, 2015 increased by 734.8% orRp27,773,388,800, from Rp3,779,680,754 for the year ended on December 31, 2014 toRp31,553,078,554. The increase in comprehensive income for the year was mainly due to an increase inexport sales volume and an increase in translation adjustments in 2015.

A2. Interkraft


Interkraft, domiciled in Sidoarjo Regency, is a limited liability company established under the laws andregulations in the Republic of Indonesia. Interkraft was established under the Deed of Limited LiabilityCompany Interkraft No. 12 dated January 8, 2002, drawn up before Ida Yudyati, S.H., a Notary inSidoarjo. The aforementioned deed was approved by the Minister of Justice of the Republic of Indonesiaunder Decree No. C-05345 HT.01.01.TH.2002 dated April 2, 2002, registered in the Company Registerin accordance with the requirements of Mandatory Company Registration Law in the CompanyRegistration Office of Sidoarjo Regency under No. 92/BH.1317/VI/2002 dated June 20, 2002 and wasannounced in the State Gazette of the Republic of Indonesia No. 88 dated November 4, 2003,Supplement No. 11130 of 2003.

Interkraft’s Articles of Association has been amended several times, and the most recent amendmentwas made based on the Deed of Meeting Resolutions No. 5 dated June 30, 2016, drawn up before DyahAyu Ambarwati, S.H., M.Kn., a Notary in Pasuruan Regency. The deed was approved and reported tothe MoLHR and registered in the Legal Entity Administration System database of the Ministry of Law andHuman Rights under (i) Letter of Approval on Amendment to the Articles of Association of Interkraft, aLimited Liability Company No. AHU-0013760.AH.01.02.Tahun 2016 dated August 1, 2016, andregistered in the Company Register in accordance with the Companies Law under No. AHU-0089204.AH.01.11.Tahun 2016 dated August 1, 2016, and (ii) the Receipt of Notification of Amendmentto Articles of Association of Interkraft No. AHU-AH.01.03-0068172 dated August 1, 2016, and registeredin the Company Register in accordance with the Companies Law under No. AHU-0089204.AH.01.11.TAHUN 2016 dated August 1, 2016.

Interkraft is domiciled at Jl. Rajawali Industri, Betro Village, Sedati District, Sidoarjo Regency, East Java.

The aims and objectives of Interkraft as set forth in Article 3 of Interkraft’s Articles of Association, whichare set out in the Deed of Minutes of Extraordinary General Meeting of Shareholders of Interkraft No. 09dated March 10, 2008, drawn up before Choiriyah, S.H., a Notary in Sidoarjo, which was approved bythe MoLHR and registered in the Legal Entity Administration System database of the Ministry of Law andHuman Rights under the Letter of Approval on Amendment to Interkraft’s Articles of Association AHU-24037.AH.01.02.Tahun 2008 dated May 8, 2008, and registered in the Company Register in accordancewith the Companies Law under No. AHU-0035194.AH.01.09.Tahun 2008 dated May 8, 2008, are toengage in trade, construction, mining, industrial, agriculture, transportation, printing and services. Toachieve the aforementioned aims and objectives, Interkraft may carry out the following businessactivities:a. Engage in general trade, including local, inter-island, import and export trades, vendor, supplier,

wholesaler, distributor and agency, whether such businesses are conducted on Interkraft's own riskand gain(loss) or based on a commission from other parties on such parties’ gains (losses);

b. Engage in general construction, including real estate, act as a contractor for buildings, roads,bridges, irrigations, electrical and water installations, building repair, maintenance or renovation;

c. Engage in general mining, among others, gold, coal, sandstone, and lime mining, exploration andexploitation of mineral water, nickel, lead and metal, iron and iron ore, drilling, excavation of stone

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mine, clay, granite, limestone and sand by conducting drilling, processing and marketing theproducts;

d. Engage in industrial, among others, garment, furniture, building material, food and beverage,chemical, and wood industries, including forest crop industry, plywood sawmill industry;

e. Engage in agriculture, such as crops, including but not limited to, chocolate, coffee, oil palm, rubber,cotton, tea, tobacco plantations, forestry, and others;

f. Engage in the transportation business, both ground and river transportation, for passenger andgoods using trucks, buses, and other vehicles;

g. Engage in the printing business, including binding, publishing, photocopy, reproduction, cartonage,graphic design;

h. Engage in the services business in general, including advertising, entertainment, managementservice, consulting for manpower services, except legal and tax services.

Interkraft's current business activities focus on the production of wood-based furniture for both local andexport markets.


Based on the Deed No. 9 dated September 2, 2016, drawn up before Dyah Ayu Ambarwati, S.H., M.Kn.,a Notary in Pasuruan Regency, which was reported to the MoLHR and registered in the Legal EntityAdministration System database of the Ministry of Law and Human Rights under Receipt of Notificationof Company Data Change No. AHU-AH.01.03-0079877 dated September 14, 2016, and registered in theCompany Register in accordance with the Companies Law under No. AHU-0107029.AH.01.11.Tahun2016 dated September 14, 2016, the composition of the Board of Commissioners and the Board ofDirectors of Interkraft are as follows:

Board of CommissionersCommissioner : Halim Rusli

DirectorsPresident Director : Dra. Sjany TjandraDirector : Hendro Rusli


Based on the Deed of Meeting Resolutions No. 5 dated June 30, 2016, drawn up before Dyah AyuAmbarwati, S.H., M.Kn., a Notary in Pasuruan Regency, which was approved by the MoLHR andregistered in the Legal Entity Administration System database of the Ministry of Law and Human Rightsunder Letter of Approval on Amendment to Interkraft’s Articles of Association No. AHU-0013760.AH.01.02.Tahun 2016 dated August 1, 2016, and registered in the Company Register inaccordance with the Companies Law under No. AHU-0089204.AH.01.11.Tahun 2016 dated August 1,2016, Interkraft's capital structure and shareholder composition are as follows:




Authorized Capital 118,000 118,000,000,000Issued and Fully paid-in capitalThe Company 116,820 116,820,000,000 99PT Alam Mentari Sejahtera 1,180 1,180,000,000 1Issued and Fully paid-in capital 118,000 118,000,000,000 100Total Shares in Portfolio - -

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The following table presents Interkraft's key financial highlights derived from Interkraft’s financialstatements as of and for the years ended on December 31, 2016, 2015 and 2014.

Interkraft's consolidated financial statements as of December 31, 2016 and 2014, and the years thenended were audited by Teramihardja, Pradhono & Chandra, Registered Public Accountants, anindependent auditor, based on the auditing standards set out by IAPI, with unmodified opinion and anemphasis of matter in relation to the change in the functional currency from USD to Rupiah and weresigned by Agustina Felisia.

Interkraft's consolidated financial statements as of December 31, 2015, and for the year ended on thosedates were audited by the Public Accounting Firm Herman, Dody, Tanumihardja & Rekan, anindependent auditor, based on the auditing standards set out by IAPI, with unmodified opinion and weresigned by Ahmad Nadhif.

(In Rupiah)


Statements of Financial PositionCurrent Assets 115,066,660,768 209,113,920,637 187,912,658,231Non-Current Assets 114,858,607,080 219,093,611,159 363,438,615,568Total Assets 229,925,267,848 428,207,531,796 551,351,273,799Current Liabilities 84,224,819,401 173,945,166,616 163,829,618,421Non-Current Liabilities 11,074,807,503 104,820,279,675 119,099,738,688Total Liabilities 95,299,626,904 278,765,446,291 282,929,357,109Share Capital 20,000,000,000 65,000,000,000 118,000,000,000Additional Paid-in Capital 45,000,000,000 - I.Revaluation Surplus of Fixed Assets - net 27,318,750,040 - 114,912,116,985Exchange Difference Due to Translation of Financial

Statements12,931,049,426 27,966,942.779 27,966,942,779

Retained Earnings 29,375,841,478 56,475,142,726 7,542,856,926Total Equity 134,625,640,944 149,442,085,505 268,421,916,690Total Liabilities and Equity 229,925,267,848 428,207,531,796 551,351,273,799

a. Current Assets


Interkraft’s total current assets as of December 31, 2015 increased by 81.7% or Rp94,047,259,869, fromRp115,066,660,768 as of December 31, 2014 to Rp209,113,920,637. The increase was mainly due toan increase in cash and cash equivalent, inventories, and advances for procurement of raw materials tobe used for production.

b. Non-Current Assets


Interkraft’s total non-current assets as of December 31, 2016 increased by 65.9% orRp144,345,004,409, from Rp219,093,611,159 as of December 31, 2015 to Rp363,438,615,568. Theincrease was mainly due to the revaluation of fixed assets conducted by Interkraft.

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Interkraft’s total non-current assets as of December 31, 2015 increased by 90.8% orRp104,235,004,079, from Rp114,858,607,080 as of December 31, 2014 to Rp219,093,611,159. Theincrease was mainly due to an acquisition of fixed assets in the form of land and buildings in Lamonganto expand Interkraft’s factory and office.

c. Total Assets


Interkraft’s total assets as of December 31, 2015 increased by 86.2% or Rp198,282,263,948, fromRp229,925,267,848 as of December 31, 2014 to Rp428,207,531,796. The increase was mainly due toan increase in Interkraft’s advances for import purchases for production requirements and acquisition offixed assets in the form of land and building to expand Interkraft’s factory and office.

d. Current Liabilities


Interkraft’s total current liabilities as of December 31, 2015 increased by 106.5% or Rp89,720,347,215,from Rp84,224,819,401 as of December 31, 2014 to Rp173,945,166,616. The increase was mainly dueto additional bank loans taken by Interkraft from BNI, which Interkraft used to finance working capital andinvestments.

e. Non-Current Liabilities


Interkraft’s total non-current liabilities as of December 31, 2015 increased by 846.5% orRp93,745,472,172, from Rp11,074,807,503 as of December 31, 2014, to Rp104,820,279,675. Theincrease was mainly due to additional bank loans taken by Interkraft from BNI, which Interkraft used tofinance working capital and investments.

f. Total Liabilities


Interkraft’s total liabilities as of December 31, 2015 increased by 192.5% or Rp183,465,819,387, fromRp95,299,626,904 as of December 31, 2014 to Rp278,765,446,291. The increase was mainly due toadditional bank loans taken by Interkraft from BNI, which Interkraft used to finance working capital andinvestments.

g. Total Equity


Interkraft’s total equity as of December 31, 2016 increased by 79.6% or Rp118,979,831,185, fromRp149,442,085,505 as of December 31, 2015 to Rp268,421,916,690. The increase was mainly due toadditional paid-in capital from Interkraft’s shareholders and the revaluation of fixed assets.

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(In Rupiah)


STATEMENTS OF PROFIT OR LOSS ANDOTHER COMPREHENSIVE INCOME

Net Sales 129,023,230,860 121,776,670,080 128,376,213,013Gross profit 17,136,022,382 24,953,675,184 50,840,246,251Profit (loss) for the year 1,916,040.180 (2,273,385,744) 4,224,645,855Total Comprehensive Income for the Year 1,572,148,590 12,725,813,529 118,979,831,185

a. Gross profit


Interkraft’s gross profit for the year ended on December 31, 2016 increased by 103.7% orRp25,886,571,067, from Rp24,953,675,184 for the year ended on December 31, 2015 toRp50,840,246,251. The increase in gross profit was mainly due to an increase in Interkraft’s sales by5.4% and production cost efficiency.


Interkraft’s gross profit for the year ended on December 31, 2015 increased by 45.6% orRp7,817,652,802, from Rp17,136,022,382 for the year ended on December 31, 2014 toRp24,953,675,184. The increase in gross profit was mainly due to increased production cost efficiency.

b. Profit for the year


For the abovementioned reasons, Interkraft’s profit for the year ended on December 31, 2016 increasedby 285.8% or Rp6,498,031,599, from a loss of (Rp2,273,385,744) for the year ended on December 31,2015 to Rp4,224,645,855.


For the abovementioned reasons, Interkraft’s profit for the year ended on December 31, 2015 decreasedby 218.7% or Rp4,189,425,924, from Rp1,916,040,180 for the year ended on December 31, 2014 to aloss of (Rp2,273,385,744).

c. Total comprehensive income for the year


Interkraft’s comprehensive income for the year ended on December 31, 2016 increased by 835.0% orRp106,254,017,656, from Rp12,725,813,529 for the year ended on December 31, 2015 toRp118,979,831,185. The increase in comprehensive income for the year was mainly due to an increasein gain on revaluation of fixed assets.


Interkraft’s comprehensive income for the year ended on December 31, 2015 increased by 709.5% orRp11,153,664,939, from Rp1,572,148,590 for the year ended on December 31, 2014 to

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Rp12,725,813,529. The increase in comprehensive income for the year was mainly due to an increase intranslation adjustments in 2015.

A3. Interkayu


Interkayu, domiciled in Sidoarjo Regency, is a limited liability company established under the laws andregulations in the Republic of Indonesia. Interkayu was established under the Deed of Limited LiabilityCompany Interkayu No. 5 dated August 19, 2015, drawn up before Dyah Ayu Ambarwati, S.H., M.Kn., aNotary in Pasuruan Regency. The deed was approved by the MoLHR by Decree No. AHU-2455440.AH.01.01.Tahun 2015 dated September 10, 2015. The deed was registered in the CompanyRegister in accordance with the Companies Law under No. AHU-3552084.AH.01.11.TAHUN 2015 datedSeptember 10, 2015 (the "Interkayu’s Deed of Establishment").

Interkayu is domiciled at Jl. Raya Industri No. 678, RT 013/ RW 07, Sukorejo Village, Sedati District,Sidoarjo Regency, East Java. No. Phone: (031) 891 0434 Fax: (031) 891 1391.

The aims and objectives of Interkayu as set forth in Article 3 of Interkayu’s Deed of Establishment are toengage in services. To achieve the aforementioned aims and objectives, Interkayu may carry out thefollowing business activities:a. Engage in the provision of services for the planning, coordination, consolidation, development,

control, and management of share ownership and operational activities of other companies;b. Engage in other service business related to administration of company management, facility and

finance; andc. Engage in construction and establishment of companies.

Interkayu is currently a non-operating holding company for a Indirect Subsidiary.


Based on the Deed of Shareholders Resolutions of Interkayu No. 12 dated September 2, 2016, drawn upbefore Dyah Ayu Ambarwati, S.H., M.Kn., a Notary in Pasuruan Regency, reported to the MoLHR,registered in the Legal Entity Administration System database of the Ministry of Law and Human Rightsunder the Receipt of Notification of Company Data Change No. AHU-AH.01.03-0079878 datedSeptember 14, 2016, and registered in the Company Register in accordance with the Companies Lawunder No. 0107030.AH.01.11.Tahun 2016 dated September 14, 2016, the composition of the Board ofCommissioners and the Board of Directors of Interkayu are as follows:

Board of CommissionersPresident Commissioner : Meity Lin-linCommissioner : Sandy Angdjaja

DirectorsDirector : Dra. Sjany Tjandra


Based on Interkayu's Deed of Establishment, its capital structure and shareholder composition were asfollows:

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Authorized Capital 16,560 16,560,000,000.00Issued and Fully paid-in capitalThe Company 13,248 13,248,000.00 80.0Sandy Angdjaja 3,312 3,312,000.00 20.0Issued and Fully paid-in capital 16,560 16,560,000,000.00 100.0Total Shares in Portfolio - -


The following table presents Interkayu’s key financial highlights derived from Interkayu’s financialstatements as of and for the years ended on December 31, 2016 and 2015.

Interkayu's financial statements as of December 31, 2016, and for the year ended on this date wereaudited by Teramihardja, Pradhono & Chandra, Registered Public Accountants, an independent auditor,based on the auditing standards set out by IAPI, with unmodified opinion and were signed by Pradhono.

Interkayu's financial statements as of December 31, 2015 and for the period from its establishment untilDecember 31, 2015 were unaudited.

(In Rupiah)

Description December 312015* 2016

Statements of Financial PositionCurrent Assets 22,189,188,703 56,748,445,398Non-Current Assets 13,667,744,193 19,118,347,419Total Assets 35,856,932,896 75,866,792,817Current Liabilities 2,496,168,261 43,781,862,913Non-Current Liabilities - 667,636,579Total Liabilities 2,496,168,261 44,449,499,492Share Capital 16,560,000,000 16,560,000,000Additional Paid-in Capital - 41,200,000Retained Earnings (Deficit) 244,818 (994,153,387)Non-Controlling Interest 16,800,519,817 15,810,246,712Total Equity 33,360,764,635 31,417,293,325Total Liabilities and Equity 35,856,932,896 75,866,792,817*note: unaudited

a. Current Assets


Interkayu’s total current assets as of December 31, 2016 increased by 155.8% or Rp23,559,256,695,from Rp22,189,188,703 as of December 31, 2015 to Rp56,748,445,398. The increase was mainly due toan increase in trade receivables, inventories and advances for purchases from WII, a subsidiary, whichbegan commercial operations in March 2016.



Interkayu’s total non-current assets as of December 31, 2016 increased by 39.9% or Rp5,450,603,226,from Rp13,667,744,193 as of December 31, 2015 to Rp19,118,347,419. The increase was mainly due to

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investing activities, in the form of advances for purchases and acquisition of fixed assets to support theoperational activities of WII, a subsidiary.

c. Total Assets


Interkayu’s total assets as of December 31, 2016 increased by 111.6% or Rp40,009,859,921, fromRp35,856,932,896 as of December 31, 2015 to Rp75,886,792,817. The increase was mainly due to anincrease in trade receivables, inventories, advances for purchases and the acquisition of fixed assets inconnection with the operational activities of WII, a subsidiary, which began commercial operations inMarch 2016.


December 31, 2016,compared to December 31, 2015

Interkayu’s total current liabilities as of December 31, 2016 increased by 1,654.0% or Rp31,285,694,652,from Rp2,496,168,261 as of December 31, 2015 to Rp43,781,862,913. The increase was mainly due toadditional bank loans of USD1,600,000 taken by Interkayu, which was used to finance working capital,and an increase in trade payables in connection with procurement of raw materials.

e. Total Liabilities

December 31, 2016 compared to as of December 31, 2015

Interkayu’s total liabilities as of December 31, 2016 increased by 1,680.7% or Rp41,953,331,231, fromRp2,496,168,261 as of December 31, 2015 to Rp44,449,499,492. The increase was mainly due toadditional bank loans of USD1,600,000 taken by Interkayu, which was used to finance working capital,and an increase in trade payables in connection with procurement of raw materials.

(In Rupiah)

Description For the years ended on December 312015 2016

STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVEINCOME

Net Sales - 77,000,321,155Gross Profit - 4,098,706,636Net Income 764,635 (1,984,671,310)Total Comprehensive Income for the Year 764,635 (1,984,671,310)

f. Profit for the year


For the abovementioned reasons, Interkayu’s profit for the year ended on December 31, 2016 decreasedby 259.7% or Rp1,985,435,945, from Rp764,635 for the year ended on December 31, 2015 to a loss of(Rp1,984,671,310).

A4. Belayan


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Belayan, domiciled in Samarinda City, is a limited liability company established under the laws andregulations in the Republic of Indonesia. Belayan was established under the Deed of a Limited LiabilityCompany PT Samarinda Forest Development Company No. 13 dated January 31, 1972, drawn upbefore Mohamad Ali, S.H., a Notary in Jakarta. The aforementioned deed was approved by the Ministerof Justice (currently the Minister of Law and Human Rights) of the Republic of Indonesia under DecreeNo. Y.A.5/545/5 dated December 23, 1977.

Belayan changed its name from PT Samarinda Forest Development Company to Belayan pursuant tothe Deed of Amendment to PT Samarinda Forest Development Company No. 12 dated October 24,1977, drawn up before Mohamad Ali, S.H., a Notary in Jakarta, which was approved by the Minister ofJustice of the Republic of Indonesia under decree No. Y.A.5/545/5 dated December 23, 1977.

Belayan’s Articles of Association has been amended several times, and the most recent amendment wasmade based on the Deed of Shareholder Resolutions of Belayan No. 4 dated July 21, 2016, drawn upbefore Dyah Ayu Ambarwati, S.H., M.Kn., a Notary in Pasuruan Regency. The deed was (i) approved bythe MoLHR under Decree No. AHU-0013769.AH.01.02.Tahun 2016 dated August 1, 2016, and wasregistered in the Company Register in accordance with the Companies Law under No. AHU-0089273.AH.01.11.Tahun 2016 dated August 1, 2016; and (ii) reported to the MoLHR and registered inthe Legal Entity Administration System of the Ministry of Law and Human Rights under Receipt ofNotification of Amendment to Belayan’s Articles of Association No. AHU-AH.01.03-0068218 datedAugust 1, 2016, and registered in the Company Register in accordance with the Companies Law underNo. AHU-0089273.AH.01.11.TAHUN 2016 dated August 1, 2016.

Belayan is domiciled at Jl. Pelita Perum. Pesona Mahakam Ruko No. 9 Harapan Baru, Loa Janan IlirDistrict, Samarinda City, East Kalimantan.

The aims and objectives of Belayan as set forth in Article 3 of Belayan’s Articles of Association, whichare set out in the Deed of Resolutions of General Meeting of Shareholders No. 221 dated May 18, 2009,drawn up before Hestyani Hassan, S.H., M.Kn., a Notary in Jakarta, are to engage in the forestry,industrial, trade, import and agency business. To achieve the aforementioned aims and objectives,Belayan may carry out the following business activities:a. Engage in forestry and forest exploitation business;b. Engage in forest product utilization and processing industry business;c. Trade forest products in domestic and international markets;d. Import materials/equipment and machinery required for a forestry business;e. Serve as an agent/representative of other domestic and international companies that are related to

forestry.

Belayan’s current business activity is to focus on natural forestry concessions that produce logs.


Based on the Deed of Resolutions of General Meeting of Shareholders of Belayan No. 16 datedSeptember 5, 2016, drawn up before Dyah Ayu Ambarwati, S.H., M.Kn., a Notary in Pasuruan Regency,which was reported as proven by the Receipt of Notification of Company Data Change No. AHU-AH.01.03-0079881 dated September 14, 2016, and registered in the Company Register in accordancewith the Companies Law under No. AHU-0107040.AH.01.11.TAHUN 2016 dated September 14, 2016,the composition of the Board of Commissioners and the Board of Directors of Belayan are as follows:

Board of CommissionersCommissioner : Widjaja Karli

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DirectorsPresident Director : Dr. Untung IskandarVice President Director : Halim RusliDirector : Ir. Andreas Nugroho AdiDirector : Hendro Rusli


Based on the Deed of Resolutions of General Meeting of Shareholders of Belayan No. 16 datedSeptember 5, 2016, drawn up before Dyah Ayu Ambarwati, S.H., M.Kn., a Notary in Pasuruan Regency,its capital structure and shareholder composition are as follows:




Authorized Capital 679,070 67,907,000,000Issued and Fully paid-in capitalThe Company 672,280 67,228,000,000 99PT Integra Indo Lestari 6,790 679,000,000 1Issued and Fully paid-in capital 679,070 67,907,000,000 100Total Shares in Portfolio - -


The following table presents Belayan's key financial highlights derived from Belayan’s financialstatements as of and for the years ended on December 31, 2016, 2015 and 2014.

Belayan's financial statements as of December 31, 2016, and the year ended on those dates wereaudited by Teramihardja, Pradhono & Chandra, Registered Public Accountants, an independent auditor,based on the auditing standards set out by IAPI, with unmodified opinion and were signed by Pradhono.

Belayan's financial statements as of December 31, 2015 and 2014, and the years ended on those dateswere audited by Teramihardja, Pradhono & Chandra, Registered Public Accountants, an independentauditor, based on the auditing standards set out by IAPI, with unmodified opinion and were signed byAgustina Felisia.

(In Rupiah)


Statements of Financial PositionCurrent Assets 131,409,493,179 252,404,109,153 227,619,306,563Non-Current Assets 124,663,128,438 112,365,296,252 95,350,285,430Total Assets 256,072,621,617 364,769,405,405 322,969,591,993Current Liabilities 170,971,920,547 281,037,790,923 235,630,093,508Non-Current Liabilities 13,078,682,309 9,449,115,748 4,550,772,436Total Liabilities 184,050,602,856 290,486,906,671 240,180,865,944Share Capital 56,407,000,000 56,407,000,000 67,907,000,000Additional Paid-in Capital - - 938,000,000Retained Earnings 15,615,018,761 17,875,498,734 13,943,726,049Total Equity 72,022,018,761 74,282,498,734 82,788,726,049Total Liabilities and Equity 256,072,621,617 364,769,405,405 322,969,591,993

a. Current Assets


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Belayan’s total current assets as of December 31, 2015 increased by 92.1% or Rp120,994,615,974, fromRp131,409,493,179 as of December 31, 2014 to Rp252,404,109,153. The increase was mainly due toan increase in inventories and other receivables.

b. Total Assets


Belayan’s total assets as of December 31, 2015 increased by 42.5% or Rp108,696,783,788, fromRp256,072,621,617 as of December 31, 2014 to Rp364,769,405,405. The increase was mainly due toan increase in inventories, other receivables and acquisition of fixed assets.

c. Current Liabilities


Belayan’s total current liabilities as of December 31, 2016 increased by 64.4% or Rp110,065,870,376,from Rp170,971,920,547 as of December 31, 2014 to Rp281,037,790,923. The increase was due to anadditional bank loan taken by Belayan from Exim and an increase in other payables to shareholders tofinance working capital.

d. Total Liabilities


Belayan’s total liabilities as of December 31, 2015 increased by 57.8% or Rp106,436,303,815, fromRp184,050,602,856 as of December 31, 2014 to Rp290,486,906,671. The increase was due to anadditional bank loan taken by Belayan from Exim and an increase in other payables to shareholders tofinance working capital.

(In Rupiah)


STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOMENet Sales 148,575,681,064 97,959,037,234 185,006,814,595Gross Profit 26,845,498,546 30,127,882,538 44,206,818,317Net Income 2,691,920,183 2,108,141,617 6,174,712,818Total Comprehensive Income for the Year 2,881,293,716 2,260,479,973 7,568,227,315

a. Net sales


Belayan’s net sales for the year ended on December 31, 2016 increased by 88.9% orRp87,047,777,361, from Rp97,959,037,234 for the year ended on December 31, 2015 toRp185,006,814,595. The increase in net sales was mainly due to an increase in Belayan's sales oftimber in 2016.


Belayan’s net sales for the year ended on December 31, 2015 decreased by 34.1% orRp50,616,643,830, from Rp148,575,681,064 for the year ended on December 31, 2014 to

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Rp97,959,037,234. The decrease in net sales in 2015 was mainly due to reduced ability to transport logsfrom the logging site to the warehouse as the rivers had dried up.

b. Gross profit


Belayan’s gross profit for the year ended on December 31, 2016 increased by 46.7% orRp14,078,935,779, from Rp30,127,882,538 for the year ended on December 31, 2015 toRp44,206,818,317. The increase in gross profit was mainly due to an increase in sales and lower campoverhead cost.



For the abovementioned reasons, Belayan’s profit for the year ended on December 31, 2016 increasedby 192.9% or Rp4,066,571,202, from Rp2,108,141,617 for the year ended on December 31, 2015 toRp6,174,712,818.

d. Total comprehensive income for the year


Belayan’s comprehensive income for the year ended on December 31, 2016 increased by 234.8% orRp5,307,747,342, from Rp2,260,479,973 for the year ended on December 31, 2015 to Rp7,568,227,315.

A5. Narkata


Narkata, domiciled in Samarinda, is a limited liability company established under the laws andregulations in the Republic of Indonesia. Narkata was established under the Deed of a Limited LiabilityCompany Narkata No. 8 dated June 13, 1978, as subsequently amended by the Deed of AmendmentNo. 3 dated March 6, 1979, drawn up before Mohamad Ali, S.H., a Notary in Jakarta. Theaforementioned deeds were approved by the Minister of Justice of the Republic of Indonesia underDecree No. Y.A.5/125/12 dated April 3, 1979, and was registered in the registry of the Jakarta DistrictCourt, each under No. 2438 and No. 2439, respectively, dated June 2, 1979 and was announced in theState Gazette of the Republic of Indonesia No. 74 dated September 14, 1979, Supplement No. 502.

Narkata’s Articles of Association has been amended several times, and the most recent amendment wasmade based on the Deed of Resolutions of General Meeting of Shareholders of Narkata No. 5 dated July21, 2016, drawn up before Dyah Ayu Ambarwati, S.H., M.Kn., a Notary in Pasuruan Regency. The deedof which was (i) approved by the MoLHR under Decree No. AHU-0013768.AH.01.02.Tahun 2016 datedAugust 1, 2016; and (ii) reported to the MoLHR and registered in the Legal Entity Administration Systemof the Ministry of Law and Human Rights under Receipt of Notification of Amendment to Narkata’sArticles of Association No. AHU-AH.01.03-0068217 dated August 1, 2016, and registered in theCompany Register in accordance with the Companies Law under No. AHU-0089272.AH.01.11.Tahun2016 dated August 1, 2016.

Narkata is domiciled at Jl. Pelita Perum. Pesona Mahakam Ruko No. 9, RT 28, Harapan Baru, LoaJanan Ilir District, Samarinda City, East Kalimantan.

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The aims and objectives of Narkata as set forth in Article 3 of Narkata’s Articles of Association, which areset out in the Deed of Resolutions of General Meeting of Shareholders of Narkata No. 10 dated April 27,2009, drawn up before Hestyani Hassan, S.H., M.Kn., a Notary in Jakarta, are to engage in the forestry,industrial, trade, import and agency business. To achieve the aforementioned aims and objectives,Narkata may carry out the following business activities:a. Engage in forestry and forest exploitation business;b. Engage in the forest product utilization and processing industry business;c. Trade forest products in domestic and international markets;d. Import materials/equipment and machinery required for a forestry business;e. Serve as an agent/representative of other domestic and international companies that are related to

forestry.

Narkata’s current business activity is to focus on natural forestry concessions that produce logs.


Based on the Deed of Shareholders Resolutions of Narkata No. 17 dated September 5, 2016, drawn upbefore Dyah Ayu Ambarwati, S.H., M.Kn., a Notary in Pasuruan Regency, reported to the MoLHR,registered in the Legal Entity Administration System of the Ministry of Law and Human Rights underReceipt of Notification of Amendment to Narkata’s Articles of Association No. AHU-AH.01.03-0079888dated September 14, 2016, and registered in the Company Register in accordance with the CompaniesLaw under No. AHU-0107048.AH.01.11.TAHUN 2016 dated September 14, 2016, the composition of theBoard of Commissioners and the Board of Directors of Narkata are as follows:

Board of CommissionersCommissioner : Widjaja Karli

DirectorsPresident Director : Dr. Untung IskandarVice President Director : Halim RusliDirector : Andreas Nugroho AdiDirector : Hendro Rusli


Based on the Deed of Shareholders Resolutions of Narkata No. 17 dated September 5, 2016, drawn upbefore Dyah Ayu Ambarwati, S.H., M.Kn., a Notary in Pasuruan Regency, its capital structure andshareholder composition were as follows:

DescriptionNominal Value Rp100.0.- per share Percentage of



Authorized Capital 445,000 44,500,000,000Issued and Fully paid-in capitalThe Company 440,550 44,055,000,000 99.00PT Alam Mentari Sejahtera 4,450 445,000,000 1.00Issued and Fully paid-in capital 445,000 44,500,000,000 100.00Total Shares in Portfolio - -


106

The following table presents Narkata's key financial highlights derived from Narkata’s financialstatements as of and for the years ended on December 31, 2016, 2015 and 2014.

Narkata's financial statements as of December 31, 2016, and the year ended on those dates wereaudited by Teramihardja, Pradhono & Chandra, Registered Public Accountants, an independent auditor,based on the auditing standards set out by IAPI, with unmodified opinion and were signed by Pradhono.

Narkata's financial statements as of December 31, 2015 and 2014, and for the years ended on thosedates were audited by Teramihardja, Pradhono & Chandra, Registered Public Accountants, anindependent auditor, based on the auditing standards set out by IAPI, with unmodified opinion and weresigned by Agustina Felisia.

107

(In Rupiah)


Statements of Financial PositionCurrent Assets 61,197,240,074 67,510,556,818 89,993,658,770Non-Current Assets 29,003,174,785 32,779,231,078 33,491,524,958Total Assets 90,200,414,859 100,289,787,896 123,485,183,728Current Liabilities 43,842,023,026 52,824,609,496 67,512,768,518Non-Current Liabilities 2,379,459,456 1,934,862,778 978,047,728Total Liabilities 46,221,482,482 54,759,472,274 68,490,816,246Share Capital 30,000,000,000 30,000,000,000 44,500,000,000Additional Paid-in Capital - - 220,000,000Retained Earnings 13,978,932,377 15,530,315,622 10,274,367,482Total Equity 43,978,932,377 45,530,315,622 54,994,367,482Total Liabilities and Equity 90,200,414,859 100,289,787,896 123,485,183,728

a. Current Assets


Narkata’s total current assets as of December 31, 2016 increased 33.3% or Rp22,483,101,952, fromRp67,510,556,818 as of December 31, 2015 to Rp89,993,658,770. The increase was mainly due to anincrease in trade receivables and this was offset with a decrease in inventories. The increase in tradereceivables was due to an increase in sales to customers.

b. Non-Current Liabilities


Narkata’s total non-current liabilities as of December 31, 2016 decreased by 49.5% or Rp956,815,050,from Rp1,934,862,778 as of December 31, 2015 to Rp978,047,728. The decrease was mainly due to therepayment of non-bank financial institutions loans of an amount greater than that of the additional loanstaken in 2016, and a decrease in post-employment benefit obligation.


STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOMENet Sales 52,542,213,507 18,256,907,471 61,344,043,338Gross Profit 12,591,901,356 7,297,769,018 19,217,082,655Profit for the year 3,204,404,705 1,489,082,371 8,820,258,570Total Comprehensive Income for the Year 3,344,758,137 1,551,383,245 9,244,051,860

a. Net Sales


Narkata’s net sales for the year ended on December 31, 2016 increased by 236.0% orRp43,087,135,867, from Rp18,256,907,471 for the year ended on December 31, 2015 toRp61,344,043,338. The increase in net sales was mainly due to an increase in Narkata's sales of timberin 2016. In 2015, net sales decreased as delivery was hampered by the drying up of the river thatNarkata used as a distribution channel.

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Narkata’s net sales for the year ended on December 31, 2015 decreased by 65.3% orRp34,285,306,036, from Rp52,542,213,507 for the year ended on December 31, 2014 toRp18,256,907,471. The decrease in net sales was mainly due to Narkata not being able to transport logsfrom the logging site to the warehouse as the rivers had dried up.

b. Gross profit

Year Ended on December 31, 2016, compared to the Year Ended on December 31, 2015

Narkata’s gross profit for the year ended on December 31, 2016 increased by 163.3% orRp11,919,313,637, from Rp7,297,769,018 for the year ended on December 31, 2015 toRp19,217,082,655. The increase in gross profit was mainly due to a decrease in camp overhead cost.


Narkata’s gross profit for the year ended on December 31, 2015 decreased by 42.0% orRp5,294,132,338, from Rp12,591,901,356 for the year ended on December 31, 2014 toRp7,297,769,018. The decrease in gross profit was mainly due to a decrease in net sales as Narkatawas unable to transport logs from the logging site to the warehouse as the rivers had dried up.



For the abovementioned reasons, Narkata’s profit for the year ended on December 31, 2016 increasedby 492.3% or Rp7,331,176,199, from Rp1,489,082,371 for the year ended on December 31, 2015 toRp8,820,258,570.


For the abovementioned reasons, Narkata’s profit for the year ended on December 31, 2015 decreasedby 53.5% or Rp1,715,322,334, from Rp3,204,404,705 for the year ended on December 31, 2014 toRp1,489,082,371.

d. Total Comprehensive Income for the Year


Narkata’s total comprehensive income for the year ended on December 31, 2016 increased by 495.9%or Rp7,692,668,615, from Rp1,551,383,245 for the year ended on December 31, 2015 toRp9,244,051,860. The increase in total comprehensive income for the year was mainly due to anincrease in timber sales in 2016.


Narkata’s total comprehensive income for the year ended on December 31, 2016 decreased by 53.6% orRp1,793,374,892, from Rp3,344,758,137 for the year ended on December 31, 2014 to Rp1,551,383,245.The decrease in total comprehensive income for the year was mainly due to a decrease in net salesbecause Narkata was unable to transport logs from the logging site to the warehouse as the rivers haddried up.

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A6. Intera


Intera, domiciled in Sidoarjo, is a limited liability company established under the laws and regulations inthe Republic of Indonesia. Intera was established under the Deed of a Limited Liability Company InteraNo. 3 dated June 1, 2012, drawn up before Siti Nurul Yuliami, S.H., M.Kn., a Notary in Surabaya. Theaforementioned deed was approved by the Minister of Justice of the Republic of Indonesia under DecreeNo. AHU-56566.AH.01.01.Tahun 2012 dated November 5, 2012, and registered in the CompanyRegister in accordance with the Mandatory Company Registration Law under No. AHU-0095978.AH.01.09.Tahun 2012 dated November 5, 2012 and was announced in the State Gazette of theRepublic of Indonesia No. 45 dated June 4, 2013, Supplement No. 63350.

Intera’s Articles of Association has been amended several times, and the most recent amendment wasmade based on the Deed of Resolutions of General Meeting of Shareholders No. 21 dated September23, 2016, drawn up before Dyah Ayu Ambarwati, S.H., a Notary in Pasuruan Regency, with respect tothe change in Intera’s aims and objectives. The deed was approved by the MoLHR under Decree No.AHU-0018803.AH.01.02.Tahun 2016 dated October 13, 2016, and registered in the Company Registerin accordance with the Companies Law under No. AHU-0120991.AH.01.11.Tahun 2016 dated October13, 2016, (the "Deed No. 21/2016").

Intera is domiciled at Jl. Rajawali Blok Industri 678, Betro Village, Sedati District, Sidoarjo Regency, EastJava.

The aims and objectives of Intera as set out in Article 3 of the Articles of Association set forth in Deed21/2016 are to engage in industrial, service, trade, construction, transportation, agriculture, animalhusbandry, fisheries, plantation, forestry and mining.

To achieve the aims the objectives referred to above, Intera may carry out the following businessactivities:a. engage in industrial activities, such as (i) the wood, barecore, gesso, plywood processing industry,

(ii) the wood furniture and processed wood furniture industries and (iii) the rattan handicraft industry.b. To engage in the service business;c. To engage in general trade, both at the Company's own risk or based on commission on behalf of

other parties, including export-import trade, inter-island trade, and to act as an agent, a purveyor,wholesaler, distributor, supplier;

d. To engage in contractor work, general contractor of all construction works, including, among others,real estate, office buildings, plants, buildings, bridges, irrigations, electricity, phone, water, gas andother installations related to construction works, including construction planning, implementation andmonitoring.

e. To engage in general transportation business, both passenger and freight;f. To engage in agriculture, animal husbandry, fisheries, plantation, forestry and mining.

Intera's current business activity focuses on the production of furniture made from wood and rattan andother wooden products including barecore especially for export markets.


Based on the Deed of Shareholders Resolutions of Intera No. 7 dated September 2, 2016, drawn upbefore Dyah Ayu Ambarwati, S.H., M.Kn., a Notary in Pasuruan Regency, the composition of the Boardof Commissioners and the Board of Directors of Intera are as follows:

110

Board of CommissionersCommissioner : Hendro Rusli

DirectorsPresident Director : Halim RusliDirector : Widjaja Karli


Based on the Deed of Shareholders Resolutions of Intera No. 7 dated September 2, 2016, drawn upbefore Dyah Ayu Ambarwati, S.H., M.Kn., a Notary in Pasuruan Regency, its capital structure andshareholder composition are as follows:




Authorized Capital 22,600 22,600,000,000Issued and Fully paid-in capitalThe Company 22,374 22,374,000,000 99PT Alam Mentari Sejahtera 226 226,000,000 1Issued and Fully paid-in capital 22,600 22,600,000,000 100Total Shares in Portfolio - -


The following table presents Intera's key financial highlights derived from Intera’s financial statements asof and for the years ended on December 31, 2016, 2015 and 2014.

Intera's financial statements as of December 31, 2016, and the year then ended were audited byTeramihardja, Pradhono & Chandra, Registered Public Accountants, an independent auditor, based onthe auditing standards set out by IAPI, with unmodified opinion and were signed by Pradhono.

Intera's financial statements as of December 31, 2015, and the year then ended were audited byTeramihardja, Pradhono & Chandra, Registered Public Accountants, an independent auditor, based onthe auditing standards set out by IAPI, with unmodified opinion and were signed by Agustina Felisia.

(In Rupiah)


Statements of Financial PositionCurrent Assets 38,342,000,853 28,441,912,499 133,891,366,968Non-Current Assets 97,297,950 14,848,855,886 37,195,900,602Total Assets 38,439,298,803 43,290,768,385 171,087,267,570Current Liabilities 27,455,954,333 30,023,676,766 107,624,108,570Non-Current Liabilities - 249,166,555 5,391,753,181Total Liabilities 27,455,954,333 30,272,843,321 113,015,861,751Share Capital 50,000,000 10,200,000,000 22,600,000,000Additional Paid-in Capital 10,150,000,000 - 51,500,000Revaluation Surplus of Fixed Assets - net - - 7,909,500,000Retained earnings 783,344,470 2,817,925,064 27,510,405,819Total Equity 10,983,344,470 13,017,925,064 58,071,405,819Total Liabilities and Equity 38,439,298,803 43,290,768,385 171,087,267,570

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a. Current Assets


Intera’s total current assets as of December 31, 2016 increased by 370.8% or Rp105,449,454,469, fromRp28,441,912,499 as of December 31, 2015 to Rp133,891,366,968. The increase was mainly due to anincrease in inventories in 2016, in line with an increase in export sales.



Intera’s total non-current assets as of December 31, 2016 increased by 150.5% or Rp22,347,044,716,from Rp14,848,855,886 as of December 31, 2015 to Rp37,195,900,602. The increase was mainly due toincreased investment activities in the form of acquisition of fixed assets, i.e. machinery and equipment tosupport operational activities, and the revaluation of Intera’s investment property in the form of land inLamongan.


Intera’s total non-current assets as of December 31, 2015 increased by 15,161.2% orRp14,751,557,936, from Rp97,297,950 as of December 31, 2014 to Rp14,848,855,886. The increasewas mainly due to the purchase of machinery and a motor vehicle in 2015.

c. Total Assets


Intera’s total assets as of December 31, 2016 increased by 295.2% or Rp127,796,499,185, fromRp43,290,768,385 as of December 31, 2015 to Rp171,087,267,570. The increase was mainly due to anincrease in inventories in 2016, which was in line with an increase in export sales and investmentactivities in the form of acquisition of fixed assets, i.e. machinery and equipment to support itsoperational activities, and revaluation of Intera’s investment property in the form of land in Lamongan.



Intera’s total current liabilities as of December 31, 2016 increased by 258.5% or Rp77,600,431,804, fromRp30,023,676,766 as of December 31, 2015 to Rp107,624,108,570. The increase was mainly due toadditional bank loans taken by Intera from Exim, which Intera used to finance its working capital.



Intera’s total non-current liabilities as of December 31, 2016 increased by 2,063.9% or Rp5,142,586,626,from Rp249,166,555 as of December 31, 2015 to Rp5,391,753,181. The increase was mainly due to anincrease in lease payables in connection with acquisition of fixed assets and the deferred tax liabilitiesarising from revaluation of fixed assets.

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Intera’s total liabilities as of December 31, 2016 increased by 273.3% or Rp82,743,018,430, fromRp30,272,843,321 as of December 31, 2015 to Rp113,015,861,751. The increase was mainly due toadditional bank loans taken by Intera from Exim, which Intera used to finance its working capital, and anincrease in lease payables in connection with acquisition of fixed assets and the deferred tax liabilitiesarising from revaluation of fixed assets.

g. Total Equity


Intera’s total equity as of December 31, 2016 increased from 346.1% or Rp45,053,480,755, fromRp13,017,925,064 as of December 31, 2015 to Rp58,071,405,819. The increase was mainly due to anincrease in additional paid-in capital and gain on revaluation of investment properties.

(In Rupiah)


STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOMENet Sales 9,220,517,750 29,412,434,934 136,741,268,362Gross Profit 722,826,798 4,125,838,264 44,670,032,914Profit for the year 354,878,427 2,034,580,594 25,822,615,715Total Comprehensive Income for the Year 354,878,427 2,034,580,594 25,792,480,755

a. Net Sales


Intera’s net sales for the year ended on December 31, 2016 increased by 364.9% orRp107,328,833,428, from Rp29,412,434,934 for the year ended on December 31, 2015 toRp136,741,268,362. The increase in net sales was mainly due to an increase in sales volume and newcustomers.


Intera’s net sales for the year ended on December 31, 2015 increased by 219.0% or Rp20,191,917,184,from Rp9,220,517,750 for the year ended on December 31, 2014 to Rp29,412,434,934. The increase innet sales was mainly due to an increase in sales volume and new customers.

b. Gross profit


For the abovementioned reasons, Intera’s gross profit for the year ended on December 31, 2016increased by 982.7% or Rp40,544,194,650, from Rp4,125,838,264 for the year ended on December 31,2015 to Rp44,206,818,317.

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For the abovementioned reasons, Intera’s gross profit for the year ended on December 31, 2015increased by 470.8% or Rp3,403,011,466, from Rp722,826,798 for the year ended on December 31,2014 to Rp4,125,838,264.



Intera’s profit for the year ended on December 31, 2016 increased by 1,169.2% or Rp23,788,035,121,from Rp2,034,580,594 for the year ended on December 31, 2015 to Rp25,822,615,715. The increase inprofit was due to an increase in export sales.


Intera’s profit for the year ended on December 31, 2015 increased by 473.3% or Rp1,679,702,167, fromRp354,878,427 for the year ended on December 31, 2014 to Rp2,034,580,594. The increase in profitwas due to an increase in export sales.

d. Total Comprehensive Income for the Year


Intera’s total comprehensive income for the year ended on December 31, 2016 increased by 1,096.0%or Rp23,757,900,161, from Rp2,034,580,594 for the year ended on December 31, 2015 toRp25,792,480,755. The increase in total comprehensive income was due to an increase in export salesand revaluation of fixed assets.

A7. Integriya


Integriya, domiciled in Sidoarjo Regency, is a limited liability company established under the laws andregulations in the Republic of Indonesia. Integriya was established under the Deed of a Limited LiabilityCompany Integriya No. 48 dated March 25, 2013, drawn up before Siti Nurul Yuliami, S.H., a Notary inSurabaya. The Deed was approved by the MoLHR under Decree No. AHU-17886.AH.01.01. Tahun 2013dated April 8, 2013, and registered in the Company Register in accordance with the Companies Lawunder No. AHU-0030465.AH.01.09. Tahun 2013 dated April 8, 2013 and was announced in the StateGazette of the Republic of Indonesia No. 91452/2013 dated September 6, 2013, Supplement No. 72.Integriya’s Articles of Association has been amended several times, and the most recent amendmentwas made based on the Deed of Meeting Resolutions of Integriya No. 75 dated April 27, 2015, drawn upbefore Siti Nurul Yuliami, S.H., a Notary in Surabaya. The deed was approved by the MoLHR underDecree No. AHU-0934618.AH.01.02. Tahun 2015, and registered in the Company Register inaccordance with the Companies Law under No. 3500776.AH.01.11. Tahun 2015 dated May 5, 2015.

Intera is domiciled at Jl. Industri No. 28, RT 010/ RW 003, Sukorejo Village, Buduran District, SidoarjoRegency, East Java.

The aims and objectives of Integriya as set forth in Article 3 of Integriya’s Articles of Association, whichare set out in the Deed of Establishment of a Limited Liability Company of Integriya No. 48 dated March25, 2013, drawn up before Siti Nurul Yuliami, S.H., a Notary in Surabaya are to engage in trade and

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services businesses. To achieve the aforementioned aims and objectives, Integriya may carry out thefollowing business activities:a. Trade;

i. To carry out import and export trade, inter-island or regional trade, and local trade for productsproduced independently or by other companies;

ii. To act as a distributor, agent and representative of other entities or companies, both domesticand international;

iii. To act as wholesaler, supplier, purveyor and commission house;b. Services;

i. To engage in the provision of services;ii. Product packaging and delivery services;iii. Transportation services;

Integriya’s current business activity focuses on retail and distribution of furniture and home decorationsfor local markets.


Based on the Deed of Shareholders Resolutions No. 11 dated September 2, 2016, drawn up beforeDyah Ayu Ambarwati, S.H., M.Kn., a Notary in Pasuruan Regency, which was reported to the MoLHR,registered in the Legal Entity Administration System database of the Ministry of Law and Human Rightsunder the Receipt of Notification of Company Data Change No. AHU-AH.01.03-0079872 datedSeptember 14, 2016, and registered in the Company Register in accordance with the Companies Lawunder No. AHU-0107024.AH.01.11.Tahun 2016 dated September 14, 2016, the composition of theBoard of Commissioners and the Board of Directors of Integriya are as follows:

Board of CommissionersCommissioner : Sjany Tjandra

DirectorsPresident Director : Stephanie Kane IlhamDirector : Meity Lin-lin


Based on the Deed of the Meeting Resolutions of Integriya No. 75 dated April 27, 2015, drawn up beforeSiti Nurul Yuliami, S.H., M.Kn., a Notary in Surabaya, Integriya's capital structure and shareholdercomposition were as follows:

DescriptionNominal Value Rp100.00.- per share Percentage of



Authorized Capital 202,000 20,200,000,000Issued and Fully paid-in capitalThe Company 199,980 19,998,000,000 99PT Integra Indo Lestari 2,020 202,000,000 1Issued and Fully paid-in capital 202,000 20,200,000,000 100Total Shares in Portfolio - -


The following table presents Integriya's key financial highlights derived from the consolidated financialstatements as of and for the years ended on December 31, 2016, 2015 and 2014.

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Integriya's financial statements as of December 31, 2016, and for the years ended on those dates wereaudited by Teramihardja, Pradhono & Chandra, Registered Public Accountants, an independent auditor,based on the auditing standards set out by IAPI, with unmodified opinion and were signed by Pradhono.

Integriya's financial statements as of December 31, 2015, and for the years ended on those dates wereaudited by Teramihardja, Pradhono & Chandra, Registered Public Accountants, an independent auditor,based on the auditing standards set out by IAPI, with unmodified opinion and were signed by AgustinaFelisia.

(In Rupiah)

Description December 312014* 2015 2016

Statements of Financial PositionCurrent Assets 37,371,448,285 28,254,113,395 42,135,285,100Non-Current Assets 5,185,045,309 45,394,219,217 63,799,472,220Total Assets 42,556,493,594 73,648,332,612 105,934,757,320Current Liabilities 21,538,943,192 54,264,836,999 95,930,848,404Non-Current Liabilities - 63,965,356 420,962,605Total Liabilities 21,538,943,192 54,328,802,355 96,351,811,009Share Capital 50,000,000 20,200,000,000 20,200,000,000Additional Paid-in Capital 20,150,000,000 - -Retained Earnings (Deficit) 817,550,402 (880,469,743) (10,617,053,689)Total Equity 21,017,550,402 19,319,530,257 9,582,946,311Total Liabilities and Equity 42,556,493,594 73,648,332,612 105,934,757,320* unaudited

a. Current Assets


Integriya’s total current assets as of December 31, 2016 increased by Rp13,881,171,705 or 49.1%, fromRp28,254,111,395 as of December 31, 2015 to Rp42,135,285,100. The increase was mainly due to anincrease in inventories and trade receivables in line with an increase in sales.



Integriya’s total non-current assets as of December 31, 2016 increased by Rp18,405,253,003 or 40.6%,from Rp45,394,219,217 as of December 31, 2015 to Rp63,799,472,220. The increase was mainly due tothe purchase of office furniture and fixtures and motor vehicles.


Integriya’s total non-current assets as of December 31, 2015 increased by Rp40,209,173,908 or 775.5%,from Rp5,185,045,309 as of December 31, 2014 to Rp45,394,219,217. The increase was mainly due toan increase in fixed assets in connection with the construction of additional stores.

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c. Total Assets


Integriya’s total assets as of December 31, 2016 an increased by Rp32,286,424,708 or 43.8%, fromRp73,648,332,612 as of December 31, 2015 to Rp105,934,757,320. The increase was mainly due to anincrease in inventory, trade receivables and fixed assets resulting from the purchase of office furnitureand fixtures and motor vehicles.


Integriya’s total assets as of December 31, 2015 increased by Rp31,091,839,018 or 73.1%, fromRp42,556,493,594 as of December 31, 2014 to Rp73,648,332,612. The increase was mainly due to anincrease in fixed assets in connection with the construction of additional stores.



Integriya’s total current liabilities as of December 31, 2016 increased by Rp41,666,011,405 or 76.8%,from Rp54,264,836,999 as of December 31, 2015 to Rp95,930,848,404. The increase was mainly due toadditional loans taken by Integriya from related parties, which was used to finance its working capital.

December 31, 2015, compared to December 31, 2014

Integriya’s total current liabilities as of December 31, 2015 increased by Rp32,725,893,807 or 151.9%,from Rp21,538,943,192 as of December 31, 2014 to Rp54,264,836,999. The increase was mainly due toadditional loans taken by Integriya from related parties, which was used to finance its working capital.



Integriya’s total non-current liabilities as of December 31, 2016 increased by Rp356,997,249 or 558.1%,from Rp63,965,356 as of December 31, 2015 to Rp420,962,605. The increase was mainly due to anincrease in post-employment benefit obligations arising from additional employees from the opening ofnew stores.



Integriya’s total liabilities as of December 31, 2016 increase of Rp42,023,008,654 or 77.4%, fromRp54,328,802,355 as of December 31, 2015 to Rp96,351,811,009. The increase was mainly due toadditional loans taken by Integriya from related parties, which was used to finance its working capital.


Integriya’s total liabilities as of December 31, 2015 increased by Rp32,789,859,163 or 152.2%, fromRp21,538,943,192 as of December 31, 2014 to Rp54,328,802,355. The increase was mainly due toadditional loans taken by Integriya from related parties, which was used to finance its working capital.

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g. Total Equity


Integriya’s total equity as of December 31, 2016 decreased by Rp9,736,583,946 or 50.4%, fromRp19,319,530,257 as of December 31, 2015 to Rp9,582,946,31. The decrease was mainly becauseIntegriya still suffered from losses in 2016.

(In Rupiah)


STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOMENet Sales 10,501,664,54

715,690,047,060 36,204,535,529

Gross Profit 3,000,749,113 4,459,787,060 11,490,391,916Profit for the year 786,265,898 (1,698,020,145) (9,644,396,316)Total Comprehensive Income (Loss) for the Year 786,265,898 (1,698,020,145) (9,736,583,946)

a. Net Sales


Integriya’s net sales for the year ended on December 31, 2016 increased by Rp20,514,488,469 or130.8%, from Rp15,690,047,060 for the year ended on December 31, 2015 to Rp36,204,535,529. Theincrease in net sales was mainly due to the opening of new stores that increased Integriya’s sales in2016.


Integriya’s net sales for the year ended on December 31, 2015 increased by Rp5,188,382,513 or 49.4%,from Rp10,501,664,547 for the year ended on December 31, 2014 to Rp15,690,047,060. The increase innet sales was mainly due to the reduction of sales discount offered to customers.

b. Gross profit


For the abovementioned reasons, Integriya’s gross profit for the year ended on December 31, 2016increased by Rp7,030,604,856 or 157.6%, from Rp4,459,787,060 for the year ended on December 31,2015 to Rp11,490,391,916. The increase in gross profit was due to an increase in sales due to theopening of new stores.


For the abovementioned reasons, Integriya’s gross profit for the year ended on December 31, 2015increased by Rp1,459,037,947 or 48.6%, from Rp3,000,749,113 for the year ended on December 31,2014 to Rp4,459,787,060. The increase in gross profit was mainly due to an increase in sales as a resultof a reduction in sales discounts offered to customers.

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Integriya’s loss for the year ended on December 31, 2016 increased by Rp7,946,376,171 or 468.0%,from Rp1,698,020,145 for the year ended on December 31, 2015 to Rp9,644,396,316. The increase inloss for the year was mainly due to an increase in salary expenses resulting from additional newemployees and an increase in interest expense.


Integriya’s loss for the year ended on December 31, 2015 decreased by Rp2,484,286,043 or 316.0%,from Rp786,265,898 for the year ended on December 31, 2014 to Rp1,698,020,145. The decrease inprofit for the year was mainly due to an increase in operating expenses in connection with Integriya’sbusiness development plan.

B. Description of Indirect Subsidiary

As of the date this Prospectus, the Company has one Indirect Subsidiary, in which the Company has50.0% indirect shareholding, as described below:

No. Company Name Line of Business Percentage ofOwnership

Year of InitialInvestment


1. WII Door and equipmentmanufacturing

50.0% indirectownership through

Interkayu

2015 Operating

B.1. WII


WII, domiciled in Sidoarjo Regency, is a limited liability company established under the laws andregulations in the Republic of Indonesia, and was first established under the name of PT InterkreasiIntegra Indonesia based on the Deed of Establishment of a Limited Liability Company PT InterkreasiIntegra Indonesia No. 3 dated March 16, 2015, drawn up before Dyah Ayu Ambarwati, S.H., M.Kn., aNotary in Pasuruan Regency. The Deed was approved by the MoLHR under Decree No. AHU-2436632.AH.01.01.Tahun 2015 dated April 29, 2015, concerning the Approval of Establishment of aLegal Entity dated April 29, 2015, and was registered in the Company Register in accordance with theCompanies Law under No. AHU-3498775.AH.01.11.Tahun 2015 dated April 29, 2015.

Pursuant to the Deed of Meeting Resolutions of PT Interkreasi Integra Indonesia No. 10 dated December28, 2015, drawn up before Dyah Ayu Ambarwati, S.H., M.Kn., a Notary in Pasuruan Regency, WIIchanged its name from PT Interkreasi Integra Indonesia to WII. The Deed was: (i) approved by theMoLHR under Decree No. AHU-0949103.AH.01.02.Tahun 2015 dated December 30, 2015, (ii)registered in the Company Register in accordance with the Companies Law No. AHU-3599707.AH.01.11.Tahun 2015 dated December 30, 2015, (iii) received and recorded in the database ofthe Legal Entity Administration System of the Ministry of Law and Human Rights under the Receipt ofNotification of Amendment to WII’s Articles of Association No. AHU-AH.01.03-0992229 dated December30, 2015; and (iv) received and registered in the Legal Entity Administration System of the Ministry ofLaw and Human Rights under Receipt of Notification of WII's Company Data Change No. AHU-AH.01.03-0992230 dated December 30, 2015.

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WII’s Articles of Association has been amended several times, and the most recent amendment was setout in the Deed of Meeting Resolutions of PT Interkreasi Integra Indonesia No. 10, dated December 28,2015, drawn up before Dyah Ayu Ambarwati, S.H., M.Kn., a Notary in Pasuruan Regency.

WII is domiciled at Jl. Raya Industri No. 678, RT 13/ RW 7, Sukorejo Village, Buduran District, SidoarjoRegency, East Java.

The aims and objectives of WII as set out in Article 3 of WII’s Articles of Association set forth in the Deedof Meeting Resolutions of PT Interkreasi Integra Indonesia No. 10 dated December 28, 2015, drawn upbefore Dyah Ayu Ambarwati, S.H., M.Kn., a Notary in Pasuruan Regency, are to engage inmanufacturing. To achieve the aims the objectives referred to above, WII may carry out the followingbusiness activities:

a. To engage in manufacturing of doors and its accessories, particularly but not limited to woodendoors and accessories;

b. To engage in WII’s product sales, both domestic and international (export);c. To engage in the installation of, and monitoring of the installation of, WII’s products.

WII's current business activities focus on the production of wooden doors and frames for local and exportmarkets.


Pursuant to the Deed of Meeting Resolutions of PT Interkreasi Integra Indonesia No.10, dated December28, 2015, drawn up before Dyah Ayu Ambarwati, S.H., M.Kn., a Notary in Pasuruan Regency, thecomposition of the Board of Commissioners and the Board of Directors of WII are as follows:

Board of CommissionersPresident Commissioner : Yusho NakamotoCommissioner : Halim Rusli

DirectorsPresident Director : Widjaja KarliVice President Director : Hiroyuki KawadoDirector : Sandy AngdjajaDirector : Tomoyuki Miyauchi


Pursuant to the Deed of Meeting Resolutions of PT Interkreasi Integra Indonesia No.10, dated December28, 2015, drawn up before Dyah Ayu Ambarwati, S.H., M.Kn., a Notary in Pasuruan Regency, the capitalstructure and shareholder composition of WII are as follows:

No. Name of ShareholderNumber of Shares Total Nominal Value (in Rupiah) Total Nominal

Value of A SeriesShares + B SeriesShares (in Rupiah)

%A Series B Series A Series Shares,Nominal Value ofRp1,000,000.00

B Series SharesRp1,014,492.75

Authorized Capital 16,560 16,560 16,560,000,000 16,800,000,000 33,360,000,000Issued Capital

1. Interkayu 16,560 - 16,560,000,000 - 16,560,000,000 49.642. WoodOne International Limited - 16,560 - 16,800,000,000 16,800,000,000 50.36Total Paid-in Capital 16,560 16,560 16,560,000,000 16,800,000,000 33,360,000,000 100.0Total Shares in Portfolio - - - - -

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11. List of the Company’s Assets Pledged as Collateral

Up to the issuance of this Prospectus, the locations of the Company’s fixed assets pledged as collateralare as follows:

No. Location Proof ofOwnership

CertificateIssuance Date

Expiry Date Area(M²) Description

1. Betro Village,Sedati District,SidoarjoRegency, EastJava Province.

Right to BuildCertificate (the"SHGB") No.67/Betro

July 13, 1992 July 12, 2022 9,475 As of the date of this Prospectus,SHGB No. 67/Betro is pledged ascollateral to Exim.


SHGB No.261/Betro

May 19, 1997 September24, 2023

3,540 As of the date of this Prospectus,SHGB No. 261/Betro is pledged ascollateral to Exim.


SHGB No.262/Betro

May 19, 1997 September24, 2023

3,495 As of the date of this Prospectus,SHGB No. 262/Betro is pledged ascollateral to Exim.


SHGB No.288/Betro

April 10, 2007 April 3, 2027 57,463 As of the date of this Prospectus,SHGB No. 288/Betro is pledged ascollateral to Exim.

5. GemurungVillage,GedanganDistrict, SidoarjoRegency, EastJava Province.

SHGB No.806/Gemurung

February 8, 2006 February 6,2026

63,053 As of the date of this Prospectus,SHGB No. 806/Gemurung ispledged as collateral to Exim.

6. GemurungVillage,GedanganDistrict, SidoarjoRegency, EastJava Province.

SHGB No.807/Gemurung

February 8, 2006 February 6,2026

60,000 As of the date of this Prospectus,SHGB No. 807/Gemurung ispledged as collateral to Exim.

12. Affiliated Transactions

In the normal course of business, the Company conducts transactions at arm's length with AffiliatedParties in connection with its operations.

The following sets out the transactions between the Company and its Affiliated Parties:

Lease Agreement

1. Lease Agreement No. SS/16/10/010 dated October 1, 2016, privately arranged and duly stamped,between the Company and Interkayu (the "Agreement"). Pursuant to the Agreement, the Companyagrees to lease its building to Interkayu to be used as an office located at Raya Industri No. 678 RT.013/ RW.007, Betro Village, Sedati District, Sidoarjo Regency, East Java The Agreement is effectivefrom October 1, 2016, up to October 1, 2017 with a room rental rate of Rp10,000,000 per annum.During the term of the Agreement, the parties are prohibited from subletting the leased space to otherthird parties. Any disputes that may arise from this Agreement shall be resolved amicably between theparties.

2. Lease Agreement No. SS/15/10/007 dated October 2, 2015, privately arranged and duly stamped,between the Company and ISA (the "Agreement"). Pursuant to the Agreement, the Company agrees

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to lease its building to ISA to be used as an office located at Raya Industri No. 678 RT. 013/ RW.007,Betro Village, Sedati District, Sidoarjo Regency, East Java with a room rental rate of Rp1,000,000 perannum. The agreement is effective from October 3, 2015, up to October 2, 2017, and may be extendedby submitting a written notice by no later than one month prior to the expiry of the Agreement. Duringthe term of the Agreement, the parties are prohibited from subletting the leased space to other thirdparties. Any disputes that may arise from this Agreement shall be resolved amicably between theparties.

3. Lease Agreement No. SS/16/05/006 dated May 3, 2016, privately arranged and duly stamped, betweenthe Company and Intera (the "Agreement"). Pursuant to the Agreement, the Company agrees to leaseits building to Intera to be used as an office located at Raya Industri No. 678, Betro Village, SedatiDistrict, Sidoarjo Regency, East Java with a room rental rate of Rp1,000,000 per annum. Theagreement is effective from June 1, 2016, up to May 31, 2018, and may be extended by submitting awritten notice by no later than one month prior to the expiry of the Agreement. During the term of theAgreement, the parties are prohibited from subletting the leased space to other third parties. Anydisputes that may arise from this Agreement shall be resolved amicably between the parties.

4. Lease Agreement No. SS/15/09/006 dated September 9, 2015, privately arranged and duly stamped,between the Company and Intera (the "Agreement"). Pursuant to the Agreement, the Company agreesto lease its building to Intera to be used as an office located at Raya Industri No. 678, Betro Village,Sedati District, Sidoarjo Regency, East Java with a room rental rate of Rp1,000,000 per annum. Theagreement is effective from September 9, 2015, up to September 8, 2017, and may be extended bysubmitting a written notice by no later than one month prior to the expiry of the Agreement. During theterm of the Agreement, the parties are prohibited from subletting the leased space to other third parties.Any disputes that may arise from this Agreement shall be resolved amicably between the parties.

5. Lease Agreement No. SS/16/10/010 dated October 5, 2015, privately arranged and duly stamped,between the Company and Interkraft (the "Agreement"). Pursuant to this Agreement, Interkraft agreesto lease its land owned under (i) Right to Build (Hak Guna Bangunan, "HGB") Certificate No. 66 with atotal area of 11,190 m2 and (ii) HGB Certificate No. 222 with a total area of 7,482 m2, both of which arelocated in Betro Village, Sedati District, Sidoarjo, East Java, to the Company to be used by theCompany or its Subsidiaries to carry out their trade and/or warehouse business with a room rental rateof Rp6,000,000 per annum during the term of the Agreement. The Agreement is valid for five years,effective from October 5, 2015, up to October 4, 2020. During the term of the Agreement, the Companyis entitled to sublet the leased object or transfer a portion or all of the lease rights to other parties withprior written consent from Interkraft. With respect to this Agreement and all the consequences thereof,the parties agree to select the Sidoarjo District Court Secretariat as a permanent and continuingdomicile.

6. Lease Agreement No. SS/15/11/008 dated November, 2015, privately arranged and duly stamped,between the Company and SMA (the "Agreement"). Pursuant to the Agreement, the Company agreesto lease its building to SMA to be used as an office located at Raya Industri No. 678, Betro Village,Sedati District, Sidoarjo Regency, East Java with a room rental rate of Rp1,000,000 per annum. Theagreement is effective from November 4, 2015, up to November 3, 2017, and may be extended bysubmitting a written notice by no later than one month prior to the expiry of the Agreement. During theterm of the Agreement, the parties are prohibited from subletting the leased space to other third parties.Any disputes that may arise from this Agreement shall be resolved amicably between the parties.

7. Deed of Lease Agreement No. 1 dated July 15, 2016, drawn up before Dyah Ayu Ambarwati, S.H., aNotary in Pasuruan Regency, by and between the Company and WII (the "Agreement"). Pursuant tothis Agreement, the Company agrees to lease its land owned under (i) HGB Certificate No. 261 with atotal area of 1,914 m2 and (ii) HGB Certificate No. 262 with a total area of 2,898 m2, both of which are

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located in Betro Village, Sedati District, Sidoarjo, East Java, and all the buildings thereon to WII, whichshall be used as office and factory by WII with a land rental rate of Rp189,000,000 per month. TheAgreement is effective from June 1, 2016, up to May 30, 2017. During the term of the Agreement, WII isnot entitled to sublet the leased object or transfer a portion or all of the lease rights to other parties withprior written consent from the Company. With respect to this Agreement and all the consequencesthereof, the parties agree to select the Sidoarjo District Court Secretariat as a permanent andcontinuing domicile.

8. Lease Agreement dated February 22, 2016, privately arranged and duly stamped, between theCompany and WII (the "Agreement"). Pursuant to this Agreement, the Company agrees to lease itsland owned under (i) HGB Certificate No. 261 with a total area of 1,914 m2 and (ii) HGB Certificate No.222 with a total area of 7,482 m2, both of which are located in Betro Village, Sedati District, Sidoarjo,East Java, to the Company to be used by the Company or its Subsidiaries to carry out their trade and/orwarehouse business with a land rental rate of Rp189,000,000 per month or totaling to Rp567,000,000.The Agreement is valid for five years, effective from October 5, 2015, up to October 4, 2020. During theterm of the Agreement, the Company is entitled to sublet the leased object or transfer a portion or all ofthe lease rights to other parties with prior written consent from Interkraft. With respect to this Agreementand all the consequences thereof, the parties agree to select the Sidoarjo District Court Secretariat as apermanent and continuing domicile.

Loan Agreements

1. Loan Agreement and Promissory Notes dated December 23, 2015, privately arranged and dulystamped, between Belayan and IIL (the "Agreement"). Pursuant to the Agreement, IILagrees togrant a loan to Belayan up to a maximum sum of Rp42,500,000,000, which shall be used to financeworking capital subject to the terms and conditions of this Agreement. The applicable interest rate is12.0% per annum. The Agreement is valid from January 1, 2016, up to December 31, 2016, andmay be extended upon the mutual agreement of both parties. With respect to this Agreement, theparties agree to choose the Sidoarjo District Court Secretariat as a choice of forum for disputeresolution. The parties are in the process of extending the Agreement. The parties remain subject tothe Agreement and continue to perform their rights and obligations pursuant to this Agreement.

2. Loan Agreement and Promissory Notes dated December 23, 2015, privately arranged and dulystamped, between Integriya and IIL (the "Agreement"). Pursuant to the Agreement, IIL agrees togrant a loan to Integriya up to a maximum sum of Rp67,900,000,000, which shall be used to financeworking capital subject to the terms and conditions of this Agreement. The applicable interest rate is12.0% per annum. The Agreement is valid from January 1, 2016, up to December 31, 2016, andmay be extended upon the mutual agreement of both parties. With respect to this Agreement, theparties agree to choose the Sidoarjo District Court Secretariat as a choice of forum for disputeresolution. The parties are in the process of extending the Agreement. The parties remain subject tothe Agreement and continue to perform their rights and obligations pursuant to this Agreement.

3. Loan Agreement and Promissory Notes dated December 23, 2015, privately arranged and dulystamped, between Intertrend and IIL (the "Agreement"). Pursuant to the Agreement, IIL agrees togrant a loan to Intertrend up to a maximum sum of Rp20,000,000,000, which shall be used tofinance working capital subject to the terms and conditions of this Agreement. The applicableinterest rate is 12.0% per annum. The Agreement is valid from January 1, 2016, up to December31, 2016, and may be extended upon the mutual agreement of both parties. With respect to thisAgreement, the parties agree to choose the Sidoarjo District Court Secretariat as a choice of forumfor dispute resolution. The parties are in the process of extending the Agreement. The partiesremain subject to the Agreement and continue to perform their rights and obligations pursuant tothis Agreement.

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4. Loan Agreement and Promissory Notes dated December 23, 2015, privately arranged and dulystamped, between Narkata and IIL (the "Agreement"). Pursuant to the Agreement, IIL agrees togrant a loan to Narkata up to a maximum sum of Rp17,100,000,000, which shall be used to financeworking capital subject to the terms and conditions of this Agreement. The applicable interest rate is12.0% per annum. The Agreement is valid from January 1, 2016, up to December 31, 2016, andmay be extended upon the mutual agreement of both parties. With respect to this Agreement, theparties agree to choose the Sidoarjo District Court Secretariat as a choice of forum for disputeresolution. The parties are in the process of extending the Agreement. The parties remain subject tothe Agreement and continue to perform their rights and obligations pursuant to this Agreement.

5. Loan Agreement and Promissory Notes dated December 23, 2015, privately arranged and dulystamped, between Integriya and the Company (the "Agreement"). Pursuant to the Agreement, theCompany agrees to grant a loan to Integriya up to a maximum sum of Rp17,100,000,000, whichshall be used to finance working capital subject to the terms and conditions of this Agreement. Theapplicable interest rate is 12.0% per annum. The Agreement is valid from January 1, 2016, up toDecember 31, 2016, and may be extended upon the mutual agreement of both parties. With respectto this Agreement, the parties agree to choose the Sidoarjo District Court Secretariat as a choice offorum for dispute resolution. The parties are in the process of extending the Agreement. The partiesremain subject to the Agreement and continue to perform their rights and obligations pursuant tothis Agreement.

13. Material Transactions and Agreements with Third Parties

In carrying out their business activities, the Group has prepared and entered into the following materialagreements with third parties:

No. Subject Description1. Title of Agreement Deed of Export Investment Credit Agreement No. 66 dated December 22, 2010, drawn up

before Raden Ayu Poppy Darmawan, S.H., a Notary in Jakarta, which has been amendedseveral times and was last amended by the Deed of Ninth Amendment to the ExportInvestment Credit Agreement No. 20 dated December 7, 2015, drawn up before JuliaSeloadji, S.H., a Notary in Surabaya (the "Agreement").

The Parties - Exim (the "Creditor"); and- The Company (the "Debtor")jointly referred to as the "Parties."

Object of theAgreement

Credit Facilities extended to the Debtor in the form of:a. Export Investment Credit Facility I (the "KIE I");b. Export Investment Credit Facility II (the "KIE II");c. Export Investment Credit Facility III (the "KIE III"); andd. Export Investment Credit Facility IV (the "KIE IV").The funds shall be used for the following purposes:a. KIE I to finance acquisition of assets, including to repay the aflopend/working capital

credit facility from Bank BNI and the Long-Term Credit Facility from Bank BNI torefinance the assets of the Debtor’s subsidiaries.

b. To finance the procurement of machinery and equipment, to refinance theconstructions of the warehouse, Kiln Dry Chamber, and the equipment under thename of the Debtor and its Subsidiaries;

c. KIE III to refinance the construction of the Building Component Unit and theequipment under the Debtor's name; and

d. To finance the refinancing of investment credit used for the procurement of machineryand other equipment.

The Principal and The principal and interest of the Credit Facilities granted by the Creditor to the Debtor are

124

No. Subject DescriptionInterest of the CreditFacility

set out below:a. KIE I Facility totaling USD14,493,500.41, subject to an interest rate of 6.4% per

annum;b. KIE II Facility totaling USD5,000,000, subject to an interest rate of 6.4% per annum;c. KIE III Facility totaling USD3,100,000, subject to an interest rate of 6.6% per annum;

andd. KIE IV Facility totaling Rp46,000,000,000, subject to an interest rate of 10.0% per

annum;

Term and Extension The Credit Facilities granted by the Creditor to the Debtor are under the following terms:a. KIE I and KIE II Facilities for a term of 4 years, commencing on December 22, 2010;b. KIE III Facility for a term of 4 years, commencing on October 18, 2011; andc. KIE IV Facility for a term of 4 years, commencing on March 27, 2015.

As of the date of this Prospectus, the Debtor and Creditor are in the process of signing anextension of the Credit Facilities Agreement signed by and between the Company andExim.

Collateral The Credit Facilities granted by the Creditor to the Debtor are secured with the Group'sassets as collateral as described below:a. Fiduciary lien on all of the Debtor's trade receivables from third parties, with a

collateral value of Rp150,000,000,000.00;b. Fiduciary lien on all of the Debtor's inventories in the form of raw materials, work in

process, supplies, and finished goods for furniture production, with a collateral valueof Rp350,000,000,000.00;

c. Fiduciary lien on Narkata’s heavy equipment, with a collateral value ofRp16,575,000,000.00;

d. Plots of land owned by the Debtor under the following proofs of ownership:(i) Right to Build Certificate (the "SHGB") No. 67/Desa Betro, with a total area of

9,475 m2;(ii) SHGB No. 261/Desa Betro, with a total area of 3,540 m2;(iii) SHGB No. 262/Desa Betro, with a total area of 3,495 m2;(iv) SHGB No. 288/Desa Betro, with a total area of 57,463 m2;which are entirely located in the East Java Province, Sidoarjo Regency, SedatiDistrict, Betro Village, or locally known as Jalan Raya Betro No. 678;

e. Plots of land owned by the Debtor under the following proofs of ownership:(i) SHGB No. 806/Desa Gemurung, with a total area of 63,053 m2;(ii) SHGB No. 807/Desa Gemurung, with a total area of 60,000 m2;both of which are entirely located in the East Java Province, Sidoarjo Regency,Gedangan District, Gemurung Village, or locally known as Jalan Raya Betro No. 678;

f. Fiduciary lien on all Belayan’s inventories in the form of timber stored or located inLoa Buah, Samarinda, Mamahak Village, Kutai Barat Regency, East Kalimantan, witha collateral value of Rp150,000,000,000.00; and

g. Fiduciary lien on all Narkata’s inventories in the form of timber stored or located inLoa Duri Ulu Village, PO. Box 1182, RT01/RW01, Loa Janan, Samarinda Seberang,Samarinda, East Kalimantan, with a collateral value of Rp50,000,000,000.

Assignment N/ACovenants andEncumbrances

For as long as the Debtor has payment obligations to the Creditor, then, the Debtor isprohibited from conducting the following without prior written consent from the Creditor:1. Conducting a merger or acquisition, except if required under government policy.2. Conducting sales or transfers of or relinquishing rights over the Debtor's assets,

except if carried out in the normal course of business or if required under governmentpolicy.

3. Obtaining new debts resulting in the Debtor being indebted directly or indirectly,except if carried out in the normal course of trade transactions.

4. Expanding or restricting the Debtor's business;5. Using the Credit Facilities set out in the Agreement other than for the purpose of

Credit Facilities set out in Article 5 of this Agreement.6. Filing a petition and/or commissioning other parties to file a petition for bankruptcy or

suspension of debt payment obligation before the court of law.

125

No. Subject Description7. Selling or transferring in any way whatsoever or releasing a portion or all of the

Debtor’s assets, except if carried out in the Debtor's normal course of business.8. Entering into transactions with any party, not exclusively limited to the Debtor's

affiliated companies, in a manner inconsistent with common trade practices.9. Lending money to any party whatsoever, including but not limited to its affiliated

companies, except if carried out in the Debtor's normal course of business.10. Transferring a portion or all the Debtor’s rights and/or liabilities over credit facilities to

other parties.11. Conducting a business consolidation, making capital investments or acquiring shares

of other companies;12. Amending the Debtor's Articles of Association or changing the Debtor's status;13. Distributing dividends or profit shares in any form whatsoever in any amount

whatsoever to its shareholders, except if carried out in order to increase the Debtor’scapital structure.

14. Changing or allowing its capital structure to be changed.15. Changing the composition of the Debtor's shareholders16. Changing the compositions of management, for example the Board of Commissioners

or the Board of Directors.17. Acting as a guarantor or surety in any form or under any name whatsoever and/or

guaranteeing or pledging the Debtor's assets as collateral to other parties.18. Entering into any commitment that may cause any impediment to the Debtor's ability

to meet its obligations to the Creditor.

Unilateral Termination N/AGoverning Laws This agreement is subject to and construed with the prevailing laws in the Republic of

Indonesia.

Dispute Settlement South Jakarta District Court in Jakarta.

2. Title of Agreement Deed of Export Investment Credit Agreement No. 64 dated December 22, 2010, drawn upbefore Raden Ayu Poppy Darmawan, S.H., a Notary in Jakarta, which has been amendedseveral times and was last amended by the Deed of Eight Amendment to the ExportWorking Capital Credit Agreement No. 19 dated December 7, 2015, drawn up before JuliaSeloadji, S.H., a Notary in Surabaya.

The Parties - Exim (the "Creditor"); and- The Company (the "Debtor")jointly referred to as the "Parties."


Credit Facilities are extended to the Debtor in the form of:a. Export Working Capital Credit Facility I (the "KMKE I");b. Export Working Capital Credit Facility II (the "KMKE II");c. Export Working Capital Credit Facility III (the "KMKE III");d. Export Working Capital Credit Facility IV (the "KMKE IV");e. Export Working Capital Credit Facility V (the "KMKE V"); andf. Export Working Capital Credit Facility VI (the "KMKE VI");The funds shall be used for the following purposes:a. KMKE I Facility to finance the Debtor's working capital;b. KMKE II Facility to finance the Debtor's working capital;c. KMKE III Facility to finance contracts/purchase orders/other documents that are

acceptable, which demonstrates requests for procurement of furniture products;d. KMKE IV Facility to finance the Debtor's and its business group's (Narkata and

Belayan) working capital for sales to third parties (non-affiliate);e. KMKE V Facility to finance the working capital for the furniture industry;f. KMKE VI Facility to compensate the unrealized timber sales revenue from the

Debtor's and or its business group’s (Belayan and Narkata) buyers.

The Principal andInterest of the CreditFacility

The principal and interest of the Credit Facilities granted by the Creditor to the Debtor areset out below:a. KMKE I Facility up to a principal amount of USD15,000,000.00, subject to an interest

rate of 6.1% per annum;b. KMKE II Facility up to a principal amount of USD5,000,000.00, subject to an interest

126

No. Subject Descriptionrate of 10.0% per annum;

c. KMKE III Facility up to a principal amount of Rp70,000,000,000.00, subject to aninterest rate of 6.1% per annum;

d. KMKE IV Facility up to a principal amount of Rp80,000,000,000.00, subject to aninterest rate of 10.0% per annum;

e. KMKE V Facility up to a principal amount of Rp54,000,000,000.00, subject to aninterest rate of 10.0% per annum;

f. KMKE VI Facility up to a principal amount of Rp100,000,000,000.00, subject to aninterest rate of 10.0% per annum;

Term and Extension The Credit Facilities are granted by the Creditor to the Debtor under the following terms:a. The KMKE Facility I has been extended for a period of 12 months, commencing on

December 22, 2015, up to December 22, 2016, and may be extended in the term andprocedures agreed by the Creditor and Debtor;

b. The KMKE Facility II has been extended for a period of 12 months, commencing onDecember 22, 2015, up to December 22, 2016, and may be extended in the term andprocedures agreed by the Creditor and Debtor;

c. The KMKE Facility III has been extended for a period of 12 months, commencing onDecember 22, 2015, up to December 22, 2016, and may be extended in the term andprocedures agreed by the Creditor and Debtor;

d. The KMKE Facility IV has been extended for a period of 12 months, commencing onDecember 22, 2015, up to December 22, 2016, and may be extended in the term andprocedures agreed by the Creditor and Debtor;

e. The KMKE Facility V has been extended for a period of 12 months up to May 20,2018, and may be extended in the term and procedures agreed by the Creditor andDebtor;

f. The KMKE Facility VI has been extended for a period of 12 months, commencing onDecember 7, 2015, up to December 7, 2016, and may be extended in the term andprocedures agreed by the Creditor and Debtor;

Collateral The Credit Facilities granted by the Creditor to the Debtor are secured with the Group'sassets as collateral as described below:a. Fiduciary lien on all of the Debtor's trade receivables from third parties, with a

collateral value of Rp150,000,000,000.00;b. Fiduciary lien on all of the Debtor's inventories in the form of raw materials, work in

process, supplies, and finished goods for furniture production, with a collateral valueof Rp350,000,000,000.00;

c. Fiduciary lien on Narkata’s heavy equipment, with a collateral value ofRp16,575,000,000.00 (sixteen billion five hundred seventy five million Rupiah);

d. Plots of land owned by the Debtor under the following proofs of ownership:(i) Right to Build Certificate (the "SHGB") No. 67/Desa Betro, with a total area of

9,475 m2;(ii) SHGB No. 261/Desa Betro, with a total area of 3,540 m2;(iii) SHGB No. 262/Desa Betro, with a total area of 3,495 m2;(iv) SHGB No. 288/Desa Betro, with a total area of 57,463 m2;which are entirely located in the East Java Province, Sidoarjo Regency, SedatiDistrict, Betro Village, or locally known as Jalan Raya Betro No. 678;

e. Plots of land owned by the Debtor under the following proofs of ownership:(i) SHGB No. 806/Desa Gemurung, with a total area of 63,053 m2;(ii) SHGB No. 807/Desa Gemurung, with a total area of 60,000 m2;both of which are entirely located in the East Java Province, Sidoarjo Regency,Gedangan District, Gemurung Village, or locally known as Jalan Raya Betro No. 678;

f. Fiduciary lien on all Belayan’s inventories in the form of timber stored or located inLoa Buah, Samarinda, Mamahak Village, Kutai Barat Regency, East Kalimantan, witha collateral value of Rp150,000,000,000.00 (one hundred fifty billion Rupiah); and

g. Fiduciary lien on all Narkata’s inventories in the form of timber stored or located inLoa Duri Ulu Village, PO. Box 1182, RT01/RW01, Loa Janan, Samarinda Seberang,Samarinda, East Kalimantan, with a collateral value of Rp50,000,000,000.00 (fiftybillion Rupiah).

Assignment N/A

127

No. Subject DescriptionCovenants andEncumbrances

For as long as the Debtor has payment obligations to the Creditor, then, the Debtor isprohibited from conducting the following without prior written consent from the Creditor:1. Conducting a merger or acquisition, except if required under government policy.2. Conducting sales or transfers of or relinquishing rights over the Debtor's assets,

except if carried out in the normal course of business or if required under governmentpolicy.

3. Obtaining new debts resulting in the Debtor being indebted directly or indirectly,except if carried out in the normal course of trade transactions.

4. Expanding or restricting the Debtor's business;5. Using the Credit Facilities set out in the Agreement other than for the purpose of

Credit Facilities set out in Article 5 of this Agreement.6. Filing a petition and/or commissioning other parties to file a petition for bankruptcy or

suspension of debt payment obligation before the court of law.7. Selling or transferring in any way whatsoever or releasing a portion or all of the

Debtor's assets, except if carried out in the Debtor's normal course of business.8. Entering into transactions with any party, not exclusively limited to the Debtor's

affiliated companies, in a manner inconsistent with common trade practices.9. Lending money to any party whatsoever, including but not limited to its affiliated

companies, except if carried out in the Debtor's normal course of business.10. Transferring a portion or all the Debtor's rights and/or liabilities over credit facilities to

other parties.11. Conducting a business consolidation, making capital investments or acquiring shares

of other companies;12. Amending the Debtor's Articles of Association or changing the Debtor's status;13. Distributing dividends or profit shares in any form whatsoever in any amount

whatsoever to its shareholders, except if carried out in order to increase the Debtor'scapital structure.

14. Changing or allowing its capital structure to be changed.15. Changing the composition of the Debtor's shareholders and/or the Debtor’s

management (Board of Commissioners and/or Directors).16. Acting as a guarantor or surety in any form or under any name whatsoever and/or

guaranteeing or pledging the Debtor's assets as collateral to other parties.17. Entering into any commitment that may cause any impediment to the Debtor's ability

to meet its obligations to the Creditor.

Unilateral Termination N/AGoverning Laws This agreement is subject to and construed with the prevailing laws in the Republic of

Indonesia.

Dispute Settlement South Jakarta District Court in Jakarta.

The Parties 1. BNI ("Bank"); and2. Interkraft ("Debtor").


Working Capital Credit, Investment Credit and Export Bill Negotiation Facilities.


The Amount of Facilitya. Working Capital Facility: up to a maximum of Rp97,000,000,000.-b. Investment Credit Facility: up to a maximum of Rp112,000,000,000.-c. Export Bill Negotiation Facility: up to a maximum of USD5,000,000.00d. Working Capital Facility (New): up to a maximum of Rp78,000,000,000.-

Interest of the Facility11.0% per annum.

Term and Extension e. Investment Credit Facility: up to June 16, 2022;f. Working Capital Credit Facility: up to December 19, 2017;

Collateral a. 2 plots of land and the plants and warehouse thereon located in Rajawali Industri,Betro Village, Sedati District, Sidoarjo Regency, East Java, under the name ofInterkraft.

128

No. Subject Descriptionb. 55 plots of land and the plants and offices therefore, which constructions are in

progress, and other equipment, machinery and equipment therein, located at Jl.Jombang Km.11, Dradahlumbing Village, East Java, under the name of Interkraft;

c. Inventory as of September 30, 2016.

Assignment Any assignment of Credit Agreement requires the Bank’s written approval.

Covenants andEncumbrances

For as long as Interkraft has not fully paid its debts and/or the use of Facilities is notcompleted, Interkraft is prohibited from conducting any of the following without the Bank’swritten consent:a. Conducting a merger, or consolidation with other companies.b. Conducting an acquisition/takeover of assets owned by third parties.c. Changing Interkraft's shareholder composition. A change of management

composition solely for administrative purposes shall only require notification to theBank.

d. Making capital investment or acquiring shares of other companies;e. Allowing any other party to use Interkraft for the other party’s business activities.f. Changing the legal form and status of the company, amending its Articles of

Association (except to increase the company's capital), or transferring the receipts ofpayment of shares or the company's shares among shareholders or other partiesresulting in a change of ultimate shareholder.

g. Paying all or a portion of the company's debts to shareholders and/or affiliatedcompanies that have not or have been assigned as a Sub-Ordinated Loan to theBank’s Credit Facilities.

h. Extending loans to any party whatsoever, including shareholders, except if suchloans are extended in the course of trade transactions that are directly related toInterkraft’s business.

i. Obtaining new credit facilities from other banks or other financial institutions(including bond issue).

j. Obtaining lease facilities from any leasing company or making investmentsin/acquire fixed assets in a sum exceeding 10.0% of the company's total assets.

k. Using the funds for purposes other than the business activities financed by the creditfacilities from the Bank.

l. Selling or pledging the company’s assets financed by the Bank and/or assetspledged as collateral to the Bank.

m. Binding itself as a guarantor or pledging assets that have been pledged as collateralby Interkraft to the Bank to any other parties in any forms and intentions whatsoever.

n. Pledging or in any other way charging an encumbrance to the company's shares toany other parties.

o. Changing its business line.p. Opening any new business that is not related to the existing business.q. Liquidating the company or filing a petition for bankruptcy.r. Conducting interfinancing among its business group, unless this is carried out in the

course of improving the group's business and financial performance.s. Entering into non-arm's length agreements and transactions, including but not

limited to:g. Entering into or canceling contracts or agreements that have a significant impact

on IKF with other parties and/or affiliates, which may affect IKF’s businessactivities.

h. Entering into any cooperation that may have a negative impact on IKF’sbusiness activities and may threaten IKF as a going concern.

i. Entering into any transaction with other parties, whether individual orenterprise, including but not limited to its affiliated companies, in manners thatare not consistent with fair and common practices, and conductingprocurement at a higher price and sales at a lower price compared to themarket price.

t. Handing over or transferring all or a portion of IKF’s rights and obligations that arisefrom the Credit Agreements and/or Collateral documents to other parties.

Waiver for negativecovenants and

In connection with the negative covenants of PT Bank Negara Indonesia (Persero) Tbk asdisclosed above, the Company has obtained written approval from PT Bank Negara

129

No. Subject Descriptioncharges Indonesia (Persero) Tbk No. LMC2/2.5/ 354/R dated April 25, 2017 (see Note 30) for the

distribution of dividend.Unilateral Termination N/AGoverning Laws Laws of the Republic of IndonesiaDispute Settlement Central Jakarta District Court

3. Title of Agreement Additional Credit Facility Approval Letter No. LMC2/2.5/054/R dated March 2, 2017.

The Parties 1. BNI (the "Bank"); and2. Intertrend (the "Debtor").


Working Capital Credit Facility and Term-Loan Working Capital Credit FacilityThe facilities shall be used for the following purposes:j. Additional working capital for the furniture industry business, including the takeover

of Intertrend’s credit facilities from HSBC, up to a maximum ofRp85,000,000,000.00 and USD 7,000,000.00;

k. Additional working capital for the furniture industry business, including the takeoverof Intertrend’s credit facilities from HSBC, up to a maximum of USD 2,500,000.00;


The Amount of Facilityl. Working Capital Facility: up to a maximum of Rp190,000,000,000.-m. Term Loan Working Capital Credit Facility: up to a maximum of Rp35,000,000,000.-n. Working Capital Facility: up to a maximum of Rp15,000,000,000.-

Interest of the Facility11.0% per annum.

Term and Extension o. Working Capital Credit Facility: up to December 19, 2017; andp. Term Loan Working Capital Credit Facility: 36 months commencing on the signing

date of the Credit Agreement.

Collateral N/AAssignment Any assignment of Credit Agreement requires the Bank’s written approval.Covenants andEncumbrances

For as long as Intertrend has not fully paid its debts and/or the use of Facilities is notcompleted, Intertrend is prohibited from conducting any of the following without the Bank’swritten consent:a. Conducting a merger, or consolidation with other companies.b. Conducting an acquisition/takeover of assets owned by third parties.c. Changing Intertrend's shareholder composition. A change of management

composition solely for administrative purposes shall only require notification to theBank.

d. Making capital investment or acquire shares of other companies;e. Allowing any other party to use Intertrend for the other party’s business activities.f. Changing the legal form and status of the company, amending its Articles of

Association (except to increase the company's capital), transferring the receipts ofpayment of shares or the company's shares among shareholders or other partiesresulting in a change of ultimate shareholder.

g. Paying all or a portion of the company's debts to shareholders and/or affiliatedcompanies that have not or have been assigned as a Sub-Ordinated Loan to theBank’s Credit Facilities.

h. Extending loans to any party whatsoever, including shareholders, except if suchloans are extended in the course of trade transactions that are directly related toIntertrend’s business.

i. Obtaining new credit facilities from other banks or other financial institutions(including bond issue).

j. Obtaining lease facilities from any leasing company or making investments in oracquiring fixed assets in a sum exceeding 10.0% of the company's total assets.

k. Using the fund for purposes other than the business activities financed by the creditfacilities from the Bank.

130

No. Subject Descriptionl. Selling or pledging the company’s assets financed by the Bank and/or assets

pledged as collateral to the Bank.m. Binding itself as a guarantor, pledging assets that have been pledged as collateral

by Intertrend to the Bank to any other parties in any forms and intentionswhatsoever.

n. Pledging or in any other way charging an encumbrance to the company's shares toany other parties.

o. Changing its business line;p. Opening any new business that is not related to the existing business.q. Liquidating the company and filing a petition for bankruptcy.r. Conducting inter-financing among its business group, unless in the course of

improving the group's business and financial performance.s. Entering into non-arm's length agreements and transactions, including but not

limited to:q. Entering into or canceling contracts or agreements that may have significant

impact on Intertrend with other parties and/or affiliates, which may affectIntertrend’s business activities.

r. Entering into any cooperation that may have negative impact on Intertrend’sbusiness activities and threaten Intertrend as a going concern.

s. Entering into any transaction with other parties, whether an individual or anentity, including but not limited to its affiliated companies, in a manner that is notconsistent with fair and common practices, and conducting procurement at ahigher price and sales at a lower price compared to the market price.

t. Handing over or transferring all or a portion of Intertrend’s rights and obligation thatarise from the Credit Agreements and/or Collateral documents to other parties.

Unilateral Termination N/AGoverning Laws Laws of the Republic of IndonesiaDispute Settlement Central Jakarta District Court

4. Title of Agreement Credit Offer Letter No. 0137/CCB-RO/ICBC/IX/2016 dated September 7, 2016.The Parties 1. PT Bank ICBC Indonesia (the "Bank"); and

2. Intertrend (the "Debtor").


Non-L/C pre-export financing facility


USD2,500,000Subject to an interest rate of 5.8% per annum

Term and Extension September 26, 2016 up to September 26, 2017

Collateral - FTO guarantee on current and future inventories with a total value ofUSD1,000,000.-

- FTO guarantee on current and future trade receivables with a total value ofUSD3,125,000.-


Events requiring written notification to the Bank no later than 30 days after the occurrenceof such events are as follows:- Receiving additional loans from third parties;- All forms of dividend payments;- Changing the form of legal entity, making amendments to the Articles of

Association, changing the compositions of the Board of Commissioners and theBoard of Directors;

- Disposing of substantial assets, if such disposal exceeds 20.0% of total assets.- Changing the shareholder composition.

Events requiring written approval from the Bank are as follows:- Granting loans or guarantees to other parties.

131

No. Subject Description- Conducting a consolidation, merger, or acquisition or making new investments or

placements of equity in other businesses.- Changing its line of business and business activities

Unilateral Termination N/AGoverning Laws Laws of the Republic of IndonesiaDispute Settlement N/A

5. Title of Agreement Credit Facility Agreement No. 939/MA/MHZ/1216 dated December 15, 2016, privatelyarranged and duly stamped.

The Parties i. WII; andii. PT Bank Mizuho Indonesia (the "Bank")


Pursuant to the WII Credit Agreement, WII obtained an Uncommitted Revolving CreditFacility (the "Revolving Credit Facility").

The purpose of the Revolving Credit Facility is to finance WII’s working capital.


Revolving Credit Facility Principal AmountUS$2,000,000.

Interest Rate of the Revolving Credit Facility0.8% per annum.

Term and Extension The availability period of the Revolving Credit Facility commences from December 15,2016, up to December 15, 2017.

Collateral The Revolving Credit Facility is secured by letters of guarantee or other letters issued byWood One International Ltd, all of which shall be in the form of original documents legallyand duly signed. Such letters of guarantee shall be unconditional and irrevocable andprepared in the form approved by the Bank.


WII agrees that as long as WII has outstanding loans that must be paid to the Bankpursuant to the Revolving Credit Facility Agreement, and for as long as the RevolvingCredit Facility Agreement is valid, WII is prohibited from conducting any of the followingwithout prior written consent from the Bank:a. Allowing WII's shares to be pledged, sold, transferred, collateralized, or

encumbered in any way whatsoever;b. Changing WII’s structure or legal status;c. Liquidating WII's current company structure applicable to carry out its business

activities, or undertaking any steps for the purpose of causing bankruptcy, placingWII under custodianship, suspending debt payment obligations (imposingmoratoriums), undergoing dissolution, liquidation, or settlement, or other similaractions related to WII;

d. Changing its shareholder composition; ande. Making significant change to WII's business since the signing date of this Revolving

Credit Facility Agreement.Unilateral Termination N/AGoverning Laws Laws of the Republic of Indonesia

Dispute Settlement Central Jakarta District Court

6. Title of Agreement Financing Approval Letter No. BS.02.03/PBS/09/2016 dated September 7, 2016The Parties a. Exim; and

b. Intera (the "Debtor")Object of theAgreement

Transactional Export Working Capital Facility, sub-limit of Export Bill Negotiation Facilities


Rp60,000,000,000Interest: 10.00 per annum.

Term and Extension The term of the Facility is 1 year since the signing date of the credit facility.Collateral a. Fiduciary lien on all Intera’s inventories with a collateral value of

132

No. Subject DescriptionRp36,100,000,000.-

b. Fiduciary lien on all Intera’s third party trade receivables with a collateral value ofRp5,700,000,000.-

c. A mortgage right amounting to Rp9,930,000,000.- on Intera’s HGB Certificate No.10, 12, 55, 86, and 102, located in Jl. Raya Bojonegoro, Jombang KM. 11.

d. Fiduciary lien on existing machinery and equipment, i.e. the machinery andequipment owned by Intera with a collateral value of Rp6,900,000,000.


Among others:a. Conducting mergers, acquisitions and sales or releases of rights over the Debtor's

assets, except in the normal course of business.b. Selling or transferring in any way whatsoever or releasing a portion of or all of the

Debtor’s assets, except in the Debtor's normal course of business.c. Distributing dividends may be allowed, however, the Debtor is required to submit a

written notification to the creditor by no later than 14 days subsequent to thedividend distributor, provided that the Debtor generates profit and has noinstallment and interest arrears to the creditor during the respective fiscal period.

d. Changing the Debtor’s shareholder and management compositions.Unilateral Termination N/AGoverning Laws Laws of the Republic of Indonesia

Dispute Settlement N/A

The Group has also obtained the necessary waivers in relation to the negative covenants on dividenddistributions and the implementation of the Initial Public Offering as stated in (i) BNI Letter No.LMC2/2.5/120/R dated June 8, 2017 regarding Approval on Change of Credit Facility Terms; (Ii) BNILetter No. LMC2/2.5/121/R dated June 8, 2017 regarding Approval on Change of Credit Facility Terms;(iii) Exim Letter No. BS.0090/PBS/04/2017 dated April 28, 2017 regarding the Agreement on theAmendment of Terms and Conditions and (iv) Exim Letter No. BS.0291/PBS/12/2016 dated December 5,2016.

14. Insurance

The Company's insurance policies are as follows:

No. Policy No. Name of theInsurer

Name of theInsured Insured Object Sum Insured Valid Up to

1. Industrial All RisksCover Note No.

03/440/VII/ASEI/SBY

PT AsuransiAsei Indonesia

(as Leader)

The Company Office, Warehouse,Production andDoor Production

Operations

Rp204,900,520,000.00 July 25, 2016 up to July25, 2017


03/441/VII/ASEI/SBY


(as Leader)

The Company Office, Warehouse,Production andDoor Production

Operations

Rp198,041,503,761.00 July 25, 2016 up to July25, 2017


03/442/VII/ASEI/SBY


(as Leader)

The Company Inventories Rp87,500,000,000.00 July 25, 2016 up to July25, 2017

4. Policy No. 01-PAR-00027-000-11-2014

PT AsuransiRaksa Pratikara

The Company Machinery andaccessories

Rp2,566,541,000.00 November 5, 2014 up toNovember 5, 2017

5. Policy No. 01-PAR-00027-000-11-2014


The Company Machinery Rp2,566,541,000.00 January 29, 2015 up toJanuary 29, 2018

6. Policy No. 01-PAR-00078-000-01-2015


The Company Machinery Rp936,140,700.00 January 29, 2015 up toJanuary 29, 2018

The Company is not affiliated with the insurance companies (insurers) referred to above. The total suminsured is sufficient to cover losses that may arise in relation to the insured facilities and infrastructures.

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The Company believes that insurance coverage on the Company's material assets is sufficient to replacethe insured objects or to cover the insured risks. The Company is not in default and has never receivedany warnings and/or reprimands in connection with to the insurance policies disclosed above.

15. Intellectual Property Rights

The Company owns and/or is in the process of registering the following intellectual property rights:

Brand

No. Registration/Application Protection Period DescriptionNumber Date Brand Etiquette Class1. IDM000477259 November 26,

2013INTERA 20 Up to November 26, 2023 Black, White

2. IDM000506767 September16, 2013

INTEGRAGROUP

20 September 16, 2023 Green, Brown,White, Blue

16. Current Legal Proceedings Faced by the Company, the Company's Board of Commissionersand Directors

As of the date of this Prospectus, the Company and each member of the Company’s Board ofCommissioners and Directors have never been declared bankrupt and are not involved in any civil orcriminal proceedings, disputes cases in any court of law and/or arbitral institution either in Indonesia oroutside Indonesia, administrative disputes with authorized government institutions including disputes withrespect to tax obligations, disputes related to labor dispute/industrial relations as well as any disputewhich could materially affect the Company’s business activities, the Company’s continuity or the InitialPublic Offering.

As of the date of this Prospectus, there are no legal notices served to the Company, and each memberof the Company's Board of Commissioners and Board of Directors, which may potentially develop intolegal proceedings.

17. Business Activities and Prospects

17.1. Preface

The Group commenced operations with the establishment of PT Integra Indocabinet in 1989. TheCompany initially produced wooden and plastic CD racks that were exported to the US. With its growingexperience in the production process, the Company invested in machinery to produce simple furnitureand its business grew rapidly. In 1993, the Company established Intertrend, to serve the high growthmarket of outdoor furniture, and subsequently established Interkraft in 2002 in response to the highdemand for fully-assembled and case goods furniture. To secure its raw materials sources, the Companydecided to invest in forestry concessions by acquiring Belayan and Narkata in 2012 and 2011. In 2012,the Company established Intera to produce wooden building components and rattan-based furniture.After considering the business prospects of the retail furniture industry in Indonesia, the Companyestablished Integriya in 2013 and commenced its furniture retail and distribution activities for thedomestic market. In 2015, the Company together with WoodOne International Ltd established an IndirectSubsidiary, WII, through a Subsidiary Interkayu to engage in the business of wooden door production.

Currently, the Company is one of the largest integrated wooden products manufacturer in Indonesia. TheGroup is based in Sidoarjo, East Java, and consists of eight companies, which includes five

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manufacturing companies, one distribution company, and two forestry concession companies. Thecompany is vertically integrated, with both a raw material and a manufacturing business arm.

The Group’s main products are indoor and outdoor furniture for homes, offices, and hotels. At present,the Company also manufactures wooden doors, wooden window frames, and other wooden and rattanproducts.

The Group has two production facilities, one located in Sidoarjo with a total area of 330,000 m2 andanother in Lamongan with a total area of 80,000 m2. In 2008, the Company acquired two forestryconcessions in East Kalimantan of more than 170,000 hectares to secure raw material sources. Theforestry concession companies are able to produce 90,000 m3 timber logs annually. The Company haspositioned itself as one of the local companies with international and domestic accreditations. TheCompany caters to both international and domestic customers. The Company produces premium qualityfurniture for both international and domestic customers.

17.2. Products and Business Activities

The Company’ and its Subsidiaries’ operations consist of three lines of business: the manufacture ofwooden furniture and building components, forestry concession, and furniture retail and distribution.

a. Manufacturing

The detailed information on the Group’s manufacturing business as of the date of this Prospectus is asfollows:

Description The Company lntertrend lnterkraft Intera WII*Factory Location Sidoarjo, East Java Sidoarjo, East Java Lamongan, East

JavaSidoarjo, East Java Sidoarjo, East

JavaYear ofEstablishment

1989 1993 2002 2012 2016

Export Percentage ±80.0% ±90.0% ±95.0% ±95.0% ±80.0%Factory Area ±250,000 m2 ±80,000 m2 ±80,000 m2 ±8,000 m2 ±6,000 m2

Types of MainProducts

Indoor KD, Casegoods, Panel Furniture,Building Components

Garden and IndoorFurniture, BuildingComponents

Bedroom/CasegoodsHotel Projects

Barecore and RattanFurniture

Door

Certification - FSC- Sistem Verifikasi

Legalitas Kayu(SVLK) or TimberLegality VerificationSystem

- The Global Forestand Trade Network(GFTN)

- ISO 9001:2008

- FSC- Sistem Verifikasi

Legalitas Kayu(SVLK) orTimber LegalityVerificationSystem

- The GlobalForest andTrade Network(GFTN)

- Tropical ForestTrust (TFT)

- ISO 9001:2008

- SistemVerifikasiLegalitasKayu (SVLK)or TimberLegalityVerificationSystem

- Sistem VerifikasiLegalitas Kayu(SVLK) or TimberLegalityVerificationSystem

- IKEA Way onPurchasingProducts,Materials andServices (IWAY)

- SistemVerifikasiLegalitasKayu (SVLK)or TimberLegalityVerificationSystem

Note: *A Subsidiary of the Subsidiary, Interkayu.

The Group also manufactures customized furniture and doors, as well as building components for hotels,property developers of apartment and condomium projects and government projects (such as affordablerental apartments, schools and others). The Group's main customers under this category include: TargetUSA, DMI Furniture Inc. (redistributed through Amazon.com, Wayfair.com and Walmart.com), AmericanWoodcrafter, Rooms To Go, Canadian Tire Corp., China National Forest and P.K.F Global Limited (forbuilding components and doors).

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The following sets out the sales breakdown of the Group's manufacturing operating segment1:

Description The year ended on December 312012 2013 2014 2015 2016

Rp million % Rp million % Rp million % Rp million % Rp million %

Knock-down furniture 185,686.51 27.7 211,770.04 26.6 276,083.42 32.1 423,917.34 41.6 459,054.22 34.5

Fully-assembled furniture 340,058.48 50.7 378,811.15 47.5 351,627.41 40.9 383,383.64 37.6 377,082.37 28.3

Building Components and others 144,501.30 21.6 206,139.33 25.9 231,833.75 27.0 211,237.02 20.7 496,253.05 37.2Total Sales from the

Manufacturing OperatingSegment2 670,246.29 100.0 796,720.52 100.0 859,544.58 100.0 1,018,538.00 100.0 1,332,389.64 100.0

Notes:1) The breakdown of the Company’ and its Subsidiaries’ manufacturing operation segment has been restated based on the estimates of the Company'smanagement.2) Total sales generated from the manufacturing operation segment in accordance with notes No. 29 to the Company's audited consolidated financialstatements.

As of the date of this Prospectus, the Company’s order book for wooden furniture and buildingcomponents in 2017, including orders which have been fulfilled, amounts to Rp996.19 billion.

The following sets out the detailed production capacity of the Group's manufacturing activities:

2014 2015 2016FurnitureInstalled Capacity (m3) 17,763 23,450 35,044Production Volume (m3) 12,588 15,578 16,155Utilization (%) 70.9 66.4 46.1

Building ComponentInstalled Capacity (m3) 17,558 35,558 133,338Production Volume (m3) 15,918 18,120 57,008Utilization (%) 90.7 51.0 42.8Source: The Company's Management

Since 2015, the Company has also started to produce sofa products that are marketed under the Vittoriobrand in Thema Home retail stores and hotel projects. As of the date of this Prospectus, the majority ofthe Company's sofa products are still imported. However, the Company plans to increase and develop itsown sofa products in the future, whether directly or through its Subsidiaries.

To support its production activities, the Company owns and utilizes a number of supporting facilities suchas electricity generators, waste treatment facilities, dust collectors and biomass machinery that aredesigned to meet its production requirements.

Below is a diagram that presents the manufacturing process of the Group:

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The following is a description of the Group’s production process in general:The Company’s production process begins with the wood logging phase which is summarized as follows:1. Log yard: rough timber in the form of logs from the logging area are collected in the log yard;2. Saw Mill process: the logs are then sawn according to the required dimensions;3. Wet sawn timber warehouse: sawn timber that has not been dried are stored in the warehouse;4. Kiln Drying Process: sawn timber are dried in the drying oven for two to eight weeks, depending on

the type and thickness of the wood; and5. Dry sawn timber warehouse: dry sawn timber is stored in the dry sawn timber warehouse to be used

in the next phase of the production process.

The Group may also purchase wet sawn timber from other suppliers instead of producing its own. TheCompany may therefore conduct the kilndrying process immediately after purchasing wet sawn timberfrom other suppliers.

The Group produces and sells fully-assembled wooden furniture as well as knock-down woodenfurniture. In addition, the Group also produces and sells building components that may be used toproduce other wooden products. the following is a description of the Group’s production processes forthe fully-assembled furniture, knock-down furniture and building components.

Production process for fully-assembled furniture:1. Processing: dry sawn timber from the dry sawn timber warehouse is cut and joined

according to the required dimensions and specifications;2. Sanding: components of the finished goods are sanded to refine the wood surface;3. Assembling: components of finished goods are assembled into finished goods;4. Final sanding: fully-assembled finished goods are further sanded to ensure smooth wood

surface;5. Finishing: finishing touches such as painting and coating are made to the finished goods;6. Packing: finished goods are packed in cardboard and ready to be delivered to buyers; and7. Finished Goods Warehouse: packed finished goods sent to warehouses for onward delivery

to buyers.

Production process for knock-down furniture:1. Processing: dry sawn timber from the dry sawn timber warehouse is cut and joined according to

the required dimensions and specifications;2. Final sanding: Components of finished goods are sanded to ensure smooth wood surface;3. Finishing: finishing touches such as painting and coating are made to the finished goods;4. Packing: finished goods are packed in cardboard boxes; and5. Finished Goods Warehouse: packed finished goods sent to warehouses for onward delivery to

buyers.

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Production process for building components:1. Processing: dry sawn timber from the dry sawn timber warehouse is cut and joined according to

the required dimensions and specifications;2. Packing: finished goods are packed in wooden pallets; and3. Finished Goods Warehouse: packed finished goods sent to warehouses for onward delivery to

buyers.

The following are examples of the Group’s manufactured products:

Dining Room Furniture Hotel Furniture

Outdoor Furniture Building component

Bedroom Furniture House Doors

b. Forestry Concession

Detailed information on the Company's Subsidiaries’ forestry concession business as of the date of thisProspectus is as follows:

Description Narkata BelayanLocation East Kutai, East Kalimantan West Kutai and Kutai Kartanegara, East KalimantanYear of Acquisition 2008 2008

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Description Narkata BelayanConcession Period 45 years from March 28, 2009 55 years from August 5, 1996Tree Type Shorea Tree Shorea TreeConcession Area ±65,925 Hectare ±97,500 HectareProduction Capacity 30,000 m3/year 60,000 m3/yearCertification - FSC No. CU-FM/COC-813447

- Sistem Verifikasi Legalitas Kayu(SVLK) or Timber Legality VerificationSystem

- FSC No. CU-FM/COC-813446- Sistem Verifikasi Legalitas Kayu (SVLK) or Timber

Legality Verification System

The Group has complied, and intends to comply with green practices, such as obtaining severalenvironmental friendly certifications, including the FSC and the Timber Legality Verification System orSVLK.

To support the forestry business, the Group has facilities such as generators, temporary supportingcamps (generally for a period of five years), road constructions and repairs, logging trucks, bulldozers,excavators and other heavy equipment. Through Narkata and Belayan, the Company is able to producelogs and sawn timber from production forests and use them to internally meet its raw material demand.

Approximately 50.0% of the forestry products is used internally to meet the Group's productionrequirements. Excess logs and sawn timber are sold to customers such as PT Kutai Timber Indonesia,PT Tirta Mahakam Tbk, PT Sumber Mas Plywood Tbk, and others.

The following chart describes the Group’s logging process:

The following is a description of the Group’s forestry concession production process:1. Production process begins with the identification of trees for logging;2. Based on the tree identification process, the Company, through its Subsidiaries, then proposes an

Annual Work Plan (the "AWP") quota setting out the tree logging schedule and locations for the year;3. Tree logging is conducted according to the AWP and only for trees that meet specific diameter

requirements;4. The Company implements reduced impact logging using a monocable winch system to reduce the

impact to surrounding trees and soil as a result of the logging activities;5. The harvested logs are collected;6. The logs are transported to the log pounds;7. Buyers (or the Company, if the logs are used by the Company) select logs in the log pounds;8. The logs are transported using rivers to Samarinda City; and9. From Samarinda City, the logs are then transported using barges to their final destinations.

The following map sets out the locations of the Group’s forestry concessions.

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c. Retail and Distribution

Description IntegriyaLocation Sidoarjo, East JavaYear of Establishment 2013Location of the Company's Retail Stores SurabayaBrand Vittorio, Thema Home (the Company’s retail store brand)

Integriya distributes furniture produced by the Group and imported products to traditional and modernretail stores. Some of these furniture produced are marketed under the brand Vittorio. In addition,Integriya also operates Thema Home, a modern retail store selling both furniture manufactured by theGroup as well as imported products. Integriya currently has one Thema Home store located in Surabaya,with a total store area of 3,000 m2. Integriya plans to open more Thema Home retail stores with storeareas spanning 2,500 m2 to 5,000 m2 in major cities such as Greater Jakarta, Surabaya, Medan,Makassar, and Manado in the next three years.

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The following chart presents Vittoria’s distribution coverage:

17.3. Marketing, Sales and Distribution

The Group markets, sells and distributes a wide array of products using both international and domesticdistribution channels through Integriya. The following table sets out the sales breakdown by area as ofDecember 31, 2016.

Continent Sales PercentageAmerica 48.85%Indonesia 22.43%Asia (excluding Indonesia) 11.47%Europe 17.15%Africa 0.08%Australia 0.02%

International Distribution Channel

Majority of the Group's products are marketed through international distribution channels to the US,Great Britain, the People's Republic of China, and other countries.

The Company’s main customers by geographical region is as follows:

Country Customer Product TypeUS Target, DMI Furniture Inc, American Woodcrafters, Rooms To Go,

Canadian Tire Corp, Alpine, Casana Furniture Co. Ltd.Furniture

Europe IKEA, Houtplex B.V., Dekker Hout Den hag B.V. Furniture, BuildingComponents

Great Britain P.K.F Global Limited DoorsThe People'sRepublic of China

China National Forest Products Industry Corporation, Taizhou,Guangsen Wood Industry Co. Ltd, Huzhou Zinsen Import and Export Co.Ltd.

Building components

The Company's furniture products are also marketed under the other brands, such as Home Style fromDMI Furniture Inc., Target from Target USA as well as Pike and Mine from Costco. Several of theCompany's customers market and distribute the Company's products through retail and online stores.

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Domestic Distribution Channel

Integriya also sells its products to domestic customers under the Vittorio brand, as well as in the ThemaHome retail stores.

Vittorio

As of the date of this prospectus, Integriya sells and distributes wooden furniture produced by the Groupand other imported furniture through approximately 170 active traditional and modern retail stores. Theseretail stores are located in Greater Jakarta, Central Java, Yogyakarta, East Java, Bali, East Kalimantan,South Kalimantan, West Kalimantan, West Nusa Tenggara, South Sulawesi, Central Sulawesi, NorthSulawesi and Papua.

The Company’s products under the Vittorio brand are targeted at the middle-class in Indonesia. Theprice and design of Vittorio products are tailored to match the purchasing power and preference ofconsumers in this segment.

Thema Home

Integriya sells and distributes wooden furniture produced by the Group and other furniture imported fromother countries through the Thema Home modern retail store located in Surabaya. Unlike the salesstrategies implemented for the Vittorio brand, the Company targets sales to the upper-middle-classsegment in the domestic market through its modern retail store, Thema Home. Thema Home productsare generally high quality premium products and are offered at a fairly affordable prices for consumers inthe upper-middle-class. In addition to furniture, Thema Home also sells home decorations andaccessories.

Integriya plans to open more Thema Home retail stores in major cities such as Greater Jakarta,Surabaya, Medan, Makassar, and Manado in the next three years.

Integriya generally does not market similar products through the two distribution channels given thedifferent target markets for Vittorio and Thema Home products. However, Integriya may decide totransfer a product marketed under the Vittorio brand to be sold and distributed through Thema Home orvice versa in accordance with the Company's marketing strategies from time to time to increase productsales.

The Company is not dependent on a single or a group of customers or distributors to sell or market theCompany's products. In carrying out its marketing and sales activities, the Company has a dedicatedteam to handle marketing and sales, headed by the Director of Sales and Marketing. In addition, theCompany also has a sales division headed by Integriya’s Marketing Director which focuses on retailsales and distribution of domestic products under the Vittoria brand or through the Thema Home modernretail stores.

The Company’s marketing strategies are as follows:1. Product, market and customer diversification to secure wider customer network;2. Offering aesthetically attractive products that combine materials such as wood and steel;3. Establishing and maintaining good relationships with the Company’s current marketing and

distribution network;4. Offering high quality products at competitive and affordable prices through the use of the latest

manufacturing technologies to optimize production yield and minimize production cost;5. Producing innovative products using the latest manufacturing technologies such as laser-cut veneers

and embossed wooden materials; and

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6. Increasing the number of Thema Home modern retail stores in a number of major cities in Indonesiato increase domestic sales.

The Company spent approximately Rp2,936,655,073 and Rp974,749,098 on promotional activities forthe year ended on December 31, 2016 and the year ended on December 31, 2015, or approximately4.5% and 2.1% of sales respectively. Management determines the budget to be allocated to sales andmarketing activities for each year based on the cost of promotional activities incurred at the end of theprevious year.

17.4. Customer

The breakdown of revenue from sales by customer for the last three years is as follows:

NameDecember 31

2014 2015 2016Target USA 1.46% 11.28% 12.43%DMI Furniture Inc 11.77% 12.86% 10.02%China National Forest Products Industry Corporation 0.00% 1.14% 7.45%PT. Kayu Lapis Asli Murni 6.18% 4.72% 6.82%P.K.F. Global Limited 2.33% 3.45% 5.35%American Woodcrafters 7.33% 5.21% 4.03%Canadian Tire Corp. 8.37% 4.97% 3.72%Rooms To Go 5.51% 6.14% 3.48%Origins by Alpine LLC. 0.05% 0.00% 3.09%IKEA 0.04% 1.20% 2.70%Others 56.96% 49.03% 40.91%Total 100.00% 100.00% 100.00%

Currently, the Group has no specific payment terms other than the contracts agreed between theCompany and each customers.

The Company is not dependent on any customer.

17.5. Competitive Advantages

The Company believes that its main competitive advantages are:

- An integrated business spanning forestry concession, furniture production as well as retail anddistribution.

The Company has a unique vertically-integrated business model in the industry with ownership andoperation of forestry concessions, manufacturing, and retail and distribution.

At the upstream level, the Group owns two forestry concessions located in East Kalimantan. TheCompany is well-placed to manage the quantity and quality of its raw materials while ensuringenvironmentally-friendly logging practices. The implementation of environmentally-friendly loggingpractices is crucial in allowing the Company to maintain its FSC and SVLK certifications required forthe export of its products to the EU. In addition, the Company’s forest concession rights also allowsthe Group to ensure the stability of raw material prices, which may have a direct impact to theCompany's profit margin.

In terms of production, the Company owns a range of comprehensive production facilities with thelatest technology to meet customer demands. The production facilities support a comprehensive andefficient production process and consistently produce stable output, which contribute to the

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Company’s production portfolio from year to year. The Company uses high-tech machinery toincrease production yield and to produce innovative furniture products.

At the midstream level, the Company owns comprehensive production facilities with the latesttechnology to meet customer demand. The production facilities support a comprehensive andefficient production process with the ability to produce stable output levels, which contribute to theCompany’s production portfolio. The Company uses high-tech machinery to increase productionyield and to produce innovative furniture products.

- Ability to produce high quality knock-down furniture

Furniture buyers from the US and Europe prefer knock-down furniture, since knock-down packagingfacilitates delivery and reduces transportation cost, particularly when it involves bulk orders. Basedon Euromonitor’s report issued in March 2017, the Group is one of the few companies in Indonesiahaving the ability to produce knock-down furniture to cater to the export market. Quality control isessential given the wide variety of color and the connecting parts that must be produced in order thatconsumers are able to assemble these parts. As a company established in knock-down furnituresales, Integra has a competitive advantage in generating sales from international customers.(Source: Euromonitor International Limited, Manufacturing and Distribution of Wooden Furniture andBuilding Components, March 2017)

- Presence of Supporting Divisions

One of the Company's strengths vis-a-vis its competitors in the industry is product quality. Themanagement team pays special attention to detail in each production phase to ensure high productquality. The Company also has supporting divisions that are tasked to maintain the standard andquality of products and to meet the product specifications set.

One of the supporting divisions is the Research and Development Department which customizesproducts for customers. The Company’s Research and Development Department is generally able todesign a customized product within 10 to 14 days as compared to the one month generally requiredfor similar products.

The Company is also able to procure machinery and equipment designed by experts necessary toproduce products of higher quality e.g. high quality blades to shape the wood in accordance with thedesign requested by buyers, and is staffed with personnel with expertise in product finishing.

- Support from Shareholders and Experienced Management Team

The Shareholders and management team have more than 25 years of experience in this industry,which the Company leverages to increase and maintain its business growth. This factor is a potentialbarrier of entry for potential competitors in the industry. The Company believes that its managementteam has strong track record that would help maintain the continuity of its business. The Companyalso believes that the experience, expertise and diversity of its management team is a prominentcompetitive advantage.

- Vast Marketing Network and Strong Relationship with Customers

A balanced product marketing also plays a key role in the furniture industry. The Company’smarketing strategy is implemented based on clear target market, which is aligned with theCompany’s segmentation strategy. A dedicated marketing team and field marketing activitiestargeted towards the Company's target market allows the Company to create a wider customer base.

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The Company’s marketing efforts have also strengthened and expanded the Company's marketposition as evidenced by returning buyers. In addition, the Company has dedicated design teams forcustomers such as Target and Costco to track these customers’ needs closely and to keep abreastwith rapidly changing consumer tastes and preferences.

- Access to supplies of raw materials

Indonesia is one of the major wood product manufacturers in the world. As a company located inIndonesia, the Company has access to an ample supply of various wood and other wood materials,such as rattan and bamboo. The foregoing brings benefits to the Company as it allows the Companyto produce a wide offering of wooden products.

17.6. Business Competition

As of the date of this Prospectus, the Company believes that the Group is the only vertically-integratedgroup in the Indonesian furniture industry. Through integration with the forestry concession business, theCompany is able to secure its wood material supply while remaining compliant with internationalstandards and regulations. As a result, the Company's products are qualified to enter the European andUS markets. In addition, the Company's competitors in Indonesia which have business models coveringmanufacturing to retail and distribution generally, have a lower production capacity compared to theCompany.

Based on data issued by Badan Pusat Statistik, there were approximately 965 wooden furnituremanufacturers in Indonesia in 2014. Out of those 965 wooden furniture manufacturers, approximately263 or 27.3% could be categorized as large scale manufacturers with total production facilities area ofmore than 2.5 hectares and production capacities of more than 10 containers per month. The above dataindicates that the wooden furniture manufacturing sector in Indonesia is very large and fragmented, withmany small-scale production facilities supporting the need of local communities and rural areas. (Source:Euromonitor International Limited, Manufacturing and Distribution of Wooden Furniture and BuildingComponents, March 2017).

Based on Euromonitor’s report which was issued in March 2017, the Group had the highest marketshare in the furniture manufacturing industry in Indonesia. Presented below is the table of woodenfurniture market share in Indonesia based on Euromonitor's report:

Company Rank Wooden Furniture Market ShareThe Group 1 5.2%Company B 2 2.6%Company C 3 1.6%Company D 4 1.5%Company E 5 0.7%Source: Euromonitor International Limited, Manufacturing and Distribution of Wooden Furniture and Building Components,March 2017.

17.7. Business Strategies

The Company aims to improve synergies among its Subsidiaries and secure available marketopportunities. The Company's business strategies are as follows:

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Increasing Raw Materials Uptake Through the Company’s Forestry Concessions;

The Group will continue to increase the utilization of raw materials from forestry concessions owned byBelayan and Narkata. The following is a table showing Belayan’s and Narkata’s contribution to theGroup’s sales from 2014 to 2016:

2014 2015 2016Belayan’s sales percentage to the Group 24.38% 13.96% 47.15%Narkata’s sales percentage to the Group 6.65% 15.14% 65.45%

Optimization of Production Processes

The Company has in place production processes for both its building components product segment aswell as its furniture product segment. To optimize the building components production process, theCompany endeavors to increase the raw materials up-take from the Company’s forestry concessionsand achieve product diversification by creating various products such as the solid laminating and fingerjoint laminating boards, as well as barecore wood products. To optimize the furniture production process,the Company is focused on developing innovative production techniques and designs by combiningwood and metal materials, producing furniture with attractive designs, and developing new markets withhigh growth potential, such as the Middle East, the People's Republic of China, and the domestic market.Furthermore, the Company also plans to develop new products such as wooden window blinds and floorbases for export to the US and the People's Republic of China.

The Company seeks to maximize the use of wood from forestry concessions by integrating the use ofmaterials in both building components and furniture production, with a view to strengthening the pricecompetitiveness of the Company’s products.

Development of Retail and Distribution Networks

The Company, through Integriya, has established a sales distribution network across Indonesia to meetincreasing local demand. The local furniture market is currently dominated by traditional retail stores. TheCompany has the ability expand its presence in this market by complementing its current suite ofwooden furniture products with non-wooden furniture products. The Company also has plans to distributeits products under the Vittorio brand through its agents.

The Company has in recent years launched the Thema Home modern retail stores, and plans to openmore Thema Home stores in major cities leverage on the growth of domestic retail market and thedemand from the middle-class. The Company also plans to establish its own e-commerce channel, i.e.ThemaHome.com, to market and sell its products.

In order to strengthen the Company's product distribution network in Java and Sumatra, the Companyplans to operate a distribution warehouse in the Greater Jakarta area.

The Company has also started to recruit professional, experienced employees with international retailbackground. The Company has plans to partner DMI Furniture Inc., one of the Company’s maincustomers in the US market, to operate a distribution center in one of the cities in the US in order tocomplement DMI Furniture Inc’s existing services. The Company also seeks to boost the Company’ssales to DMI Furniture Inc through the set up of this distribution center.

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17.8. Business Trends and Prospects

According to the World Bank, the Indonesian economy continues to demonstrate its strength, with aprojected GDP growth of 5.1% in 2016. Private consumption and public capital expenditures areprojected to be the main drivers of the Indonesian economy in 2016. Continuous policy reform may helpease the impact of declining global demand and money market volatility. Faced with a persistentdownturn in the commodity sector, Indonesia has an opportunity to develop its production and servicesectors. The World Bank projected a GDP growth of 5.3% in 2017, while private consumption isestimated to increase slightly.

The increase in consumer spending is primarily driven by the growing middle-class. Based on data fromBadan Pusat Statistik and Euromonitor’s report, Indonesian consumers have increased their annualspending on furniture, furnishings, carpets and other floor coverings from Rp16,070.2 billion in 2014 toRp17,891.1 billion in 2016. Euromonitor also estimates that the Indonesian consumer expenditure onfurniture, furnishings, carpets and other floor coverings will increase to Rp21,012.4 billion by 2020, drivenby the increasingly affluent middle-class, rapid urbanization and low-cost government housing projects.

Source: Euromonitor International Limited, Manufacturing and Distribution of Wooden Furniture and Building Components,March 2017.

The US is one of the largest markets for the Company’s products. Based on data from Euromonitor, theUS consumer expenditure on furniture, furnishings, carpets and other floor coverings continues toincrease, with a compounded annual growth rate of 3.6% from 2014 to 2016. The sustainable growthover the period suggests that the US middle-class is paying attention to their homes and frequentlyremodeling the interiors of their homes.

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Based on the report from Euromonitor, consumer expenditure on wooden furniture in the US grew fromUSD48.5 billion in 2014 to USD53.1 billion in 2016. This USD 53.1 billion expenditure on woodenfurniture represents more than half of the total expenditure on furniture of USD 87.8 billion recorded in2016, illustrating the popularity of wood as the material of choice for furniture among US consumers. Thepopularity of wooden furniture among consumers in the US is a trend which is expected to gain furthertraction going forward. The expected increase in expenditure on wooden furniture is attributed to thestrengthening demand for housing, rise in residential construction activities and the increase indiscretionary spending. Based on Euromonitor’s research, interior designers and consumers alike areopting for wooden furnishing items as they convey a classier, natural look. The US consumers do notlook at furniture as a long term investment or something to be kept as an antique. They tend to conductfrequent remodeling and decoration changes of their homes.


Business Trends

Since the last fiscal year until the date of this Prospectus, the Group has no significant trend inproduction, sales, inventories, expenses, and sales prices that affect their business activities and

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financial prospect. In addition, the Group also has no known trends, uncertainties, requests,commitments or events that may significantly affect their net sales or operating revenues, revenue fromcurrent operations, profitability, liquidity or sources of capital, or events that will cause the reportedfinancial information to inaccurately reflect an operating outcome or future financial condition.

17.9. Environmental Permits

In accordance with the provisions of Law No. 32 of 2009 on Environmental Protection and Management,read together with Government Regulation No. 27 of 2012 on Environmental Permits, the Company isrequired to fulfil certain environmental obligations and procure certain environmental permits to carry outits business activities. The approval process for an environmental permit typically involves (i) the draftingof an Environmental Impact Analysis ("AMDAL"), or Environmental Management Efforts (“UKL”) andEnvironmental Monitoring Efforts (“UPL”), (ii) the evaluation of the AMDAL or the UKL / UPL, (iii) theobtaining of an AMDAL approval or UKL/UPL recommendation and (iv) the eventual application for anenvironmental permit.

As of the date of this Prospectus, the Company and its Subsidiaries have fulfilled their environmentalobligations and have the following environmental permits, environmental evaluation documents, AMDALapprovals and UKL / UPL recommendations:

The Company

(I) Permit on Waste Management and Storage of Hazardous and Toxic Materials (B3)

An environmental permit was granted to the Company pursuant to the Decree of Sidoarjo RegentNo. 188/789/404.1.3.2/2016 dated June 20, 2016 signed by the Regent of Sidoarjo. The details ofthe permit are as follows:

Company Name : PT Integra IndocabinetBusiness Location : Jl. Raya Industri No. 678 Betro Village, Sedati District, Sidoarjo

RegencyType of Business : Wood processingValidity Period : This decree is valid for 5 years from the date of stipulation and may

be extendedObligations : The Company shall submit a report on the realization of B3 waste

storage activities at least every three months to (i) the SidoarjoRegent through Head of the Environmental Agency, (ii) the EastJava Governor and (iii) the Ministry of Environment and Forestry ofthe Republic of Indonesia.

(II) Environmental Evaluation Document

An environmental evaluation document has been issued to the Company pursuant to the Decree ofthe Head of Environment Agency of Sidoarjo Regency No. 188/1990/404.6.3/2011 dated October 3,2011 signed by the Head of Environment Agency of Sidoarjo Regent. The details of theenvironmental evaluation document are as follows:

Company Name : PT Integra IndocabinetObligation : The Company shall

- establish a temporary dump site for B3 waste andadminister license for the temporary dump site for B3

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Waste to Environment Agency of Sidoarjo Regency;- perform laboratory tests on air quality every six months and

laboratory tests for wastewater every month; and- report on the implementation of environmental

management and monitoring every six months.Validity Period : Not stated

The Company has conducted the required laboratory tests based on the Analytical Report datedNovember 8, 2016, which was based on the evaluation conducted by PT Envilab Indonesia.

The total cost incurred by the Company in their environmental management efforts is approximatelyRp300 million.

Subsidiaries

(I) Environmental Permits

a. An environmental permit has been granted to Interkraft pursuant to the Decision of Head ofEnvironment Agency of Lamongan Regency No. 188/2/KEP./413.207/2015 dated January2015, in connection with the Environmental Permit of Furniture Industry Development issuedby Lamongan Regency Government Environmental Agency. The details of the permit are asfollows:

- The permitted scope of activities include:a. The construction of furniture on a designated area spanning 99,000 m2

b. Utilization of built land is 43,56% and unbuilt land is 56,44% including green space.c. Production capacity:

i. Bedroom furniture is 48,750 cartons / monthii. Office furniture is 26,000 cartons / month

- Interkraft shall apply for the amendment of any environmental protection andconservation license (i.e. B3 Temporary Waste Storage Permit)

- Interkraft shall submit reports on the implementation of environmental management andmonitoring efforts every six months from the grant of the permit by the LamonganRegent through the Lamongan Regency Environmental Agency.

b. An environmental permit has been granted pursuant to the Decree of East KalimantanGovernor No. 660/K.491/2013 regarding the Granting of Environmental Permit on BusinessActivity Plan of Wood Forest Products Exploitation in Natural Forest by Narkata, publishedby the Governor of East Kalimantan. Based on this environmental permit, Narkata isrequired to submit a report on the implementation of the requirements and obligations asstated in the Environmental Management Plan and Environmental Monitoring Plan ("RKL-RPL") document every six months from the grant of the environmental permit.

c. An environmental permit has been granted pursuant to the Decree of Head of CapitalInvestment and PTSP of Sidoarjo Regency No. 660/17/IIL/404.5.1.15/2017 dated January30, 2017. The details of the permit are as follows:

Company Name : PT Intera IndonesiaBusiness Location : Betro Village, Sedati District, Sidoarjo RegencyType of Businessand/or Activity

: Wood processing (barecore and gesso)

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Validity Period : The validity period of this environmental permit is the same asthe validity period of business license and/or activity.

Obligations : - To carry out environmental impact management as stated inthe recommended UKL / UPL documents and to bear fullresponsibility for the management and monitoring of theenvironmental impact of wood processing (barecore andgesso).

- To deliver reports on UKL / UPL implementation every sixmonths to the Sidoarjo Regent from the grant of the permit.

Intera has performed the required laboratory tests based on the Analytical Report datedNovember 8, 2016, which was based on the inspection conducted by PT Envilab Indonesia.

d. An environmental permit has been granted pursuant to the Decree of Sidoarjo Regent No.188/1104/404.1.3.2/2016 dated October 3, 2016. The details of the permit are as follows:

Company Name : PT Woodone Integra IndonesiaBusiness Location : Jl. Raya Industri No. 678 RT 13 RW 07 Betro Village, Sedati

District, Sidoarjo RegencyType of Businessand/or Activity

: Wood processing

Validity Period : The validity period of this environmental permit is the same asthe validity period of business license and/or activity.

Obligations : To carry out environmental impact management as stated in therecommended UKL / UPL documents and bear fullyresponsibility for the management and monitoring of theenvironmental impact of wood processing (barecore and gesso).

(II) UKL / UPL Recommendations

a. A UKL / UPL recommendation has been obtained on behalf of Interkraft pursuant to letterNo. 660/54/413,207/2015 dated January 16, 2015, in connection with the Recommendationon UKL-UPL Furniture Industry Development Activities in Dradahblumbang Village,Kedungpring District. The details of the recommendation are as follows:

(i) The proposed UKL- UPL for such activities are environmentally feasible;(ii) Interkraft is required to report on the implementation of the environmental management

and monitoring efforts contained in the UKL-UPL form to the Lamongan DistrictEnvironmental Agency and related agencies every six months from the date of therecommendation letter; and

(iii) Interkraft is required to apply for the Environmental Protection and Management Permitpursuant to the applicable laws and regulations.

b. A UKL / UPL recommendation has been obtained on behalf of Interkraft pursuant to letterNo. 660/3448/404.6.3/2016 dated November 8, 2016, in connection with Recommendationon UKL-UPL Furniture Industry Development Activities at Jl. Rajawali Industri, Betro Village,Sedati District, Sidoarjo Regency.

c. A UKL / UPL recommendation has been obtained on behalf of Intertrend pursuant to letterNo. 660/743/404.6.3/20.2 dated May 8, 2012, in connection with UKL-UPL recommendation

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on Furniture, Molding, and Building Materials Industry Activities issued by the SidoarjoRegency Government Environment Agency. The details of the recommendation are asfollows:

(i) The UKL-UPL document for Intertrend’s Furniture, Molding and Building MaterialsComponent Industry at Jl. Industri No. 28, Buduran Village, Buduran District, SidoarjoRegency can technically be approved; and

(ii) The responsible party at Intertrend shall report on the implementation of environmentalmanagement efforts and environmental monitoring efforts contained in the UKL-UPLdocument to the Environment Agency of Sidoarjo Regency and related institutions everysix months from the date of the recommendation letter.

d. A UKL / UPL recommendation has been obtained on behalf of Intera pursuant to UKL-UPLRecommendation Letter of Furniture Finishing Activities Industry No. 660/2338/404.6.3/2012dated November 27, 2012, signed by the Head of Environment Agency of Sidoarjo Regency.

e. A UKL / UPL recommendation has been obtained on behalf of Intera pursuant to UKL-UPLRecommendation Letter of Wood Processing Industry (Barecore and Gesso) No.660/3147/404.6.3/2016 dated October 12, 2016, signed by the Head of the EnvironmentAgency of Sidoarjo Regency.

f. A UKL / UPL recommendation has been obtained on behalf of Belayan pursuant toEnvironmental Management & Monitoring Report for (i) the 2nd Semester (July – December)2015 No. 02/BRT-PH/RKL-RPL/IV/2016 dated 20 April 2016, (ii) the 1st Semester (January -July) 2016 No. 01/BRT-PH/RKI-RPL/IX/2016 dated July 15, 2016, and (iii) the 2nd Semester(July - December 2016) No. 02/BRT-PH/RKL-RPL/I/2017 dated 15 January 2017, whichhas been approved by the Provincial Government of East Kalimantan Forestry Agency.

g. A UKL / UPL recommendation has been obtained on behalf of Narkata pursuant toEnvironmental Management & Monitoring Report for (i) the 2nd Semester (July – December)2015 No. 02/NR-PH/RKL-RPL/I/2016 dated 10 January 2016, (ii) the 1st Semester (January- July) 2016 No. 01/NR-PH/RKI-RPL/IX/2016 dated 19 September 2016, and (iii) the 2nd

Semester (July - December 2016) 2016 No. 02/NR-PH/RKL-RPL/I/2017 dated 10 January2017, which have been approved by the Provincial Government of East Kalimantan ForestryAgency.

h. A UKL / UPL recommendation has been obtained on behalf of Intergriya pursuant toRecommendation on UKL-UPL Furniture Activities Jl. H.R. Muhammad No. 27-29,Surabaya, No. 660.1/633/436.7.2/2015 dated May 20, 2015, issued by the Surabaya CityGovernment Environmental Agency.

i. A UKL / UPL recommendation has been obtained on behalf of Intergriya pursuant toRecommendation on UKL-UPL Industrial Furniture Activity No. 660/3258/404.6.3/2015 datedOctober 27, 2015, for Integriya having its address at Jl. Mangkurejo, Kwangsan Village,Sedati District, Sidoarjo Regency, published by the Environment Agency Government ofSidoarjo Regency.

j. A UKL / UPL recommendation has been obtained on behalf of WII pursuant toRecommendation Letter on UKL-UPL Activities of Building Components and Wood IndustryNo. 660/2668/404.6.3/2016 dated September 1, 2016, signed by the Head of theEnvironment Agency of Sidoarjo Regency.

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(III) AMDAL Approvals

a. An AMDAL appoval has been obtained on behalf of Interkraft pursuant to the Decree of theRegent of Sidoarjo No. 188/753/404.1.3.2/2016 concerning Approval of Analysis Documentof the Impact of Traffic Development of the Furniture Industry by Dra. Syany Tjandra(Director of Interkraft) in Betro Village, Sedati District, Sidoarjo Regency. The AMDALapproval sets out the purpose of Analysis Document of the Impact of Traffic Development ofIndustry of Furniture for Interkraft in Betro Village, Sedati District, Sidoarjo Regency.

b. An AMDAL appoval has been obtained on behalf of Narkata pursuant to Decree of EastKalimantan Governor No. 660/K.490/2013 on the Environmental Feasibility of BusinessActivities Plan of Forest Timber Products Utilization in Natural Forest by Narkata, publishedby Governor of East Kalimantan.

c. An AMDAL appoval has been obtained on behalf of Intergriya pursuant to the Stipulation ofStore Traffic Management Planning Jl. H.R. Muhammad No. 27-29, Surabaya, No.550.1/14470/436.6.10/2015 dated May 8, 2015 issued by the Surabaya City GovernmentTransportation Agency.

An AMDAL appoval has been obtained on behalf of Intergriya pursuant to the Decree of Sidoarjo RegentNo. 188/562/404.1.3.2/2016 concerning Approval for Analysis Document of Traffic Impact of FurnitureIndustry Development by Integriya in Kwangsan Village, Sedati district, Sidoarjo Regency dated May 16,2016.17.10. Corporate Social Responsibility

As a company that grows and prospers together with the Indonesian people, the Group is committed toestablishing and maintaining relationships with its customers, employees and the government. Thiscommitment has existed since the Group’s establishment.

The commitment is realized by implementing corporate social responsibilities into acts to grow anddevelop a harmonious relationship with the society. Several examples of the Group’s participations arepresented below: The distribution of meals through the Don Bosco Catholic Church Foundation in Surabaya; The distribution of food staples through mosques and Islamic boarding schools in Surabaya and

Sidoarjo; The replanting of trees in the forests within the concession areas under the Group; The provision of ambulance units to orphanages in Pasuruan Regency, East Java; The funding of schools in East Kalimantan through the MT of Hope Foundation; and The donation of scholarships to the Terang Surabaya Foundation.

17.11. Good Corporate Governance

The Company is committed to carrying out its business activities in accordance with the principles ofgood corporate governance, such as transparency, accountability, responsibility, independence, andfairness in order to improve its performance, protect its stakeholders’ interests and to improve itscompliance with laws and regulations. The Company sets its business growth targets in accordance withthe annual business plans. In conducting its business activities, the Company relies on the trust of thecommunities that are in close proximity to the location of the Company’s operations, and suchconfidence needs to be maintained by improving the Company's performance, efficiency andmanagement on the basis of prudent principles. Implementation of good corporate governance is alsoimportant for building trust with stakeholders and for risk management.

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The Board of Commissioners, Directors and employees of the Company are committed to upholding andapplying the principles of good corporate governance. A strong commitment to the application of goodcorporate governance principles to all aspects of the Company's business activities is necessary tosupport efforts to build organizations that compete with reliable and quality human resources. In order torealize this commitment, the Company continuously strives to improve the implementation of goodcorporate governance through the establishment of internal policies in accordance with the principles ofgood corporate governance.

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IX. INDUSTRY OVERVIEWThe information set out in this Chapter has been extracted from Euromonitor’s report titled“Manufacturing and Distribution of Wooden Furniture and Building Components” and reflects estimatesof market conditions based on publicly available sources and trade opinion surveys, and is preparedprimarily as a market research tool. References to Euromonitor do not indicate the opinion ofEuromonitor as to the value of any security or the advisability of investing in the Group. The Directorsbelieve that the sources of information set out in this Chapter are reliable sources and such informationhas been reproduced accurately and in its proper form and context. The Directors have no reason tobelieve that such information is false or misleading or that any material fact has been omitted that wouldrender such information false or misleading. The information prepared by Euromonitor and set out in thisIndustry Overview has not been independently verified by the Group, the Joint Lead Underwriters, theUnderwriters or any other party involved in the Initial Public Offering. Accordingly, there is no assuranceby the Group, the Joint Lead Underwriters, the Underwriters or any other party involved in this InitialPublic Offering as to the accuracy of such information and such information should not be relied upon inthe making of any investment decision.

About This Section

General

Euromonitor is an independent professional market research company with extensive experience in theirprofession. Euromonitor was commissioned to conduct an analysis of and to report on the manufacturingand distribution of wooden furniture and building components for a fee of US$53,800. The payment ofthis fee does not affect the fairness of conclusions drawn in the report. Information set forth in thissection was extracted from the report.

About Euromonitor

Established in 1972, Euromonitor is the world leader in strategy research for both consumer andindustrial markets. Comprehensive international coverage and leading edge innovation makeEuromonitor’s products an essential resource for companies large and small, national and global. Withoffices around the world and analysts in 80 countries, Euromonitor is a leading provider of global marketintelligence. Euromonitor’s products and services are held in high regard by the international businesscommunity and it has 5,000 active clients including 90.0% of the Fortune 500 companies.

Research Methodologies

In compiling and preparing the report, Euromonitor used the following methodologies to collect multiplesources, validate the data and information collected, and cross-check each respondent’s information andviews against those of others: Secondary research, which involves reviewing published sources including national statistics and

official sources from Badan Pusat Statistics Indonesia, specialist trade press and associations suchas Indonesian Furniture Industry and Handicraft Association, company reports including auditedfinancial statements where available, independent research reports, and data based onEuromonitor’s own research database.

Primary research which involves interviews with a sample of leading industry participants andindustry experts for latest data and insights on future trends and to verify and cross-check theconsistency of data and research estimates.

Projected data were obtained from historical data analysis plotted against macroeconomic data withreference to specific industry-related drivers.

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Review and cross-checks of all sources and independent analysis to build all final estimatesincluding the size, share, drivers and future trends of the wooden furniture market in preparation forthe final industry overview report.

Forecasting bases and assumptions

Euromonitor based the report on the following assumptions: The Indonesian and US social, economic, and political environment is expected to remain stable in

the forecast period There will be no external shock, such as financial crisis or raw material shortage that affects the

demand and supply of wooden furniture in Indonesian and the US during the forecast period Key market drivers such as increase in per capita disposable income, rapid urbanization, low per

capita consumption compared to developed countries, rising health awareness, increasing demandfor high-end production, increasing demand for Indonesia wooden furniture, and improveddistribution network are expected to boost the development of the Indonesian and US woodenfurniture market

A. Furniture Retailing in Indonesia

Indonesia’s wooden furniture retail industry

Indonesia’s wooden furniture retail industry is influenced by the country’s strong historical traditions inwoodworking and the appreciation of handicraft products. The country is home to a wide range ofretailers from storefront domestic workshops to chain stores in large cities and provinces. Industrialdistricts like Jepara and Semarang are known for hosting a vibrant array of such wooden furniture storesin Indonesia.

Larger cities and provinces like Jakarta, Surabaya, Jepara and Bali are home to larger wooden furniturestores. Stand-alone stores like Thema Home in Surabaya and Beautiful Homes in Jepara are examplesof larger wooden furniture retail outlets in Indonesia. These retail outlets carry different types of woodenfurniture products across different usage categories. (e.g. office, kitchen, hallway, children, dining, livingroom furniture, etc.).

There are also chain store retailers with two or more stores across Indonesia. Informa, Vinoti Living andMalinda Gallery are among chain-stores retailers that are spread out across Indonesia. These storesusually carry wooden and non-wooden furniture items.

Growing domestic retail market for wooden furniture as economic growth spurs privateconsumption

Indonesia is one of the world’s top producers and exporters of wooden furniture. While most of thewooden furniture produced in Indonesia were previously earmarked for export, rapid economic growthand rising affluence among Indonesian consumers have resulted in a growing domestic retail scene.

The preference for wooden furniture is mainly due to the visual appreciation of wood products in homes.Wooden furniture will continue to gain popularity locally given their perception as high-end furnishing andpopularity with interior designers in Indonesia.

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Furniture retail industry in Indonesia is diverse and varied

The furniture retailing industry in Indonesia is widespread and diverse, ranging from low cost, massproduced furniture to custom imported luxury brands. Retailers in Indonesia favor mass-produced, low tomedium priced wooden furniture that caters to the masses domestically.

Separately, a smaller pocket of luxury consumers also allows for retailers to import handcrafted brandsfrom the US and Europe giving the retail market a wider range of furniture to choose from. The increasein retail furniture imports not only presents new opportunities to foreign brands but also provides localbrands with the necessary experience to compete domestically.

Strong seasonal trends observed in furniture retail for Indonesia

Furniture retailing in Indonesia benefits from seasonality, with profitable cyclical trends being observedprior to the fasting month of Ramadan and the Idul Fitri holidays. The festive season encouragesconsumers to spend and upgrade their home furnishings and decorations. Significant promotions arealso offered during the festive season to encourage home makeovers furniture purchases.

Strong government support to develop and expand the local furniture retail industry

The Indonesian government is increasingly active in extending support to the domestic furniture industryin an effort to further develop this retail sector. The IFEX Indonesia Furniture Exhibition is one exampleof successful furniture craft shows supported by the Ministry of Trade. Such furniture craft showshighlight Indonesian wooden furniture to local and international consumers and help promote furnitureretail businesses.

On the regulatory front, the Indonesian Government has also been proactive in addressing specificissues and constraints pertaining to the domestic wooden furniture industry. For example, a VoluntaryPartnership Agreement between Indonesia and the EU became operational in November 2016. Inaddition to promoting legal trade, a host of other measures to ensure compliance with EU timberregulations are also enforced. Retail consumers benefit from the higher standards adopted by thedomestic wooden furniture industry in compliance with the prevailing regulations.

Table 1: Wooden Furniture Retailing in Indonesia, 2014-2021Description Units 2014 2015 2016 2017 2018 2019 2020 2021

Indoor Furniture IDR bn 25,604 26,919 28,040 29,134 30,188 31,208 32,181 33,147Wooden Indoor Furniture IDR bn 4,717 5,008 5,258 5,575 5,924 6,337 6,785 7,271Outdoor Furniture IDR bn 384 403 420 437 452 468 482 497Wooden Outdoor Furniture IDR bn 153 161 168 177 186 198 211 225Total Retail Furniture IDR bn 25,988 27,322 28,460 29,571 30,641 31,676 32,664 33,644Total Retail Furniture Growth % NA 5.1% 4.2% 3.9% 3.6% 3.4% 3.1% 3.0%Total Retail Wooden Furniture IDR bn 4,871 5,169 5,426 5,752 6,111 6,535 6,996 7,496Total Retail Wooden Furniture Growth % NA 6.1% 5.0% 6.0% 6.2% 6.9% 7.0% 7.1%Note: Forecast are based on constant 2016 pricesSource: Euromonitor Passport Home and Garden 2016, Retailing Indonesia 2016

Wooden furniture retail growth outperforms the overall furniture industry

The wooden furniture retail market in Indonesia was worth IDR 4,871 billion in 2014. By 2016 the marketgrew to IDR 5,426 billion and is expected to reach IDR 7,496 billion in 2021. The growth of the retailwooden furniture market out performed the overall furniture retailing industry within the same period.

Over the forecast period, the wooden furniture retail market is likely to benefit from the lower cost ofserving customers arising from e-commerce, improving logistics and warehousing best practices.Smaller provinces and cities are expected to embrace online shopping as a preferred method thus giving

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rise to the need for innovation in packaging, and marketing of wooden furniture products. Online retailsales to overseas customers are also expected to contribute to the growth in the overall retail sales inIndonesia.

The expected growth in wooden furniture retail sales is also attributed to consumer preferences towardswooden products. Based on Euromonitor’s trade interviews, demand for wooden furniture items areincreasing as a result of better design and functionality.

The Government is also engaged in the construction of low-cost housing which are partially furnishedwith wooden furniture items. The Jokowi administration had publicly disclosed its intention to build1,000,000 of such homes. The buyers of these low-cost, partially-furnished houses are likely to purchaseadditional furniture, thereby contributing to the growth of wooden furniture retail sales in Indonesia.

Indonesia’s top wooden furniture retailers influence growth domestically

The top five wooden furniture retailers which focus on low-to-mid priced items account for approximately19.0% of wooden furniture sales or approximately IDR 1,019 trillion in 2016 domestically. The woodenfurniture retail scene is fragmented with many small establishments catering to the low-to-mid pricedofferings. Such small, independent family owned stores can be seen along the streets of Jepara andSemarang and are typically not found in larger cities like Jakarta and Surabaya.

Chain store retailers on the other hand would fashion their products in prominent city centers. Operatinganchor stores in larger malls and shopping centers is also a common practice for such chain-storeretailers in Indonesia. The top five ranked retailers may be seen operating through stand-alone orindependent large retail outlets along crowded areas such as Jl. Proklamasi in Jakarta as well as retailspaces in shopping malls like Tunjungan Plaza in Surabaya.

The Company’s new upcoming independent store, Thema Home, features medium to high end furnitureofferings, capturing the demand for export-grade furniture products attributable to the rising affluence ofthe middle-class. The Group is hoping to expand across the country with other establishments in thecoming months. Based on the Company’s sales of branded furniture products in Indonesia, whichamounted to IDR 36 billion in 2016, it was not ranked among the top five wooden furniture retailers inIndonesia. Euromonitor noted that while the Company generated IDR306 billion of sales from themanufacturing segment in Indonesia in 2016, a large portion of its sales from the manufacturing segmentin Indonesia was to commercial or non-retail customers (such as supply of furniture to hotels or housingprojects). Based on Euromonitor’s estimate, the wholesale wooden furniture market amounted toapproximately IDR.4.5 trillion in 2016.

B. Furniture Retailing in the US

Robust growth observed in consumer expenditure on furniture in the US

Consumer expenditure on furniture and furnishings, carpets and other floor coverings generally observeda robust growth of 3.6% over the historic period from 2014 to 2016. This was in part bolstered by thepenchant for home improvements and an improving housing sector since the subprime mortgage crisis in2009. As highlighted above, Euromonitor’s trade interviews suggest the rising popularity of woodenfurniture for home furnishing and remodeling projects. Interior designers and consumers alike may optfor wooden furnishing items for a classier natural home outlook.

On the retailing front, Omni-Channel retailing is prevalent when compared to the Indonesian retailingscene. Consumers continue to look online for information, ideas and purchases. Online retailing isgrowing and will continue to cannibalize into brick-and-mortar sales.

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Cost sensitive furniture retail in the US

As an important cost control practice, furniture retailers take global sourcing seriously when deciding ontheir purchasing practices. Factors such as the cost of labour and the availabilites of raw materials.Factors such as cheaper labor and raw materials in other countries will encourage sourcing for rawmaterials and finished goods in those countries.

Furniture retailers are increasingly sourcing furniture directly from manufacturers abroad. Countries suchas the People's Republic of China, Indonesia, Canada, Mexico and Vietnam are typical import partners.The use of dedicated offshore manufacturers for US branded furniture is also a dominant trend.

Wooden furniture is mostly imported into the US from third party manufacturers

The wooden furniture imported into the US for sale, either by domestic retailers or by foreign brands, isincreasingly being sourced from a wide variety of suppliers. The People's Republic of China, Vietnamand Indonesia are prominent partners in the trade.

Typically, furniture designs come from US companies, while manufacturing and packaging are handledby the exporting countries. The ability to produce knock-down, flat-packed and easy-to-assemblefurniture pieces is therefore crucial for offshore manufacturers.

Online retail of furniture is becoming a growth driver

In recent years, the online retail of furniture has taken off and has become more prevalent, especiallyamong urban consumers who are more familiar and comfortable with online retail. In 2014, around 4.4%of wooden furniture retail sales took place through online channels. By 2016, this figure had risen to5.6%, with nearly USD 2,959 million worth of wooden furniture retail sales taking place online.

Millennials are a key driving force influencing furniture purchasing patterns

Millennials in the US are a growing and increasingly influential demographic force in driving the growth offurniture retail sales in recent years, including that of wooden furniture. As one of the largest age groupsin the US today, millennials have demonstrated different views and approaches towards home furnishingand furniture choices compared to the older generation, such as the baby boomers. This has shaped,and will increasingly shape how wooden furniture is designed, marketed and sold to mass-marketconsumers, as retailers become more acutely aware of the importance of tapping into this consumergroup.

However, millennials have delayed purchasing their own homes, partially due to factors such as theimpact of the recession in 2009 which inadvertently affected the income security and employment ofmany millennials in the years following the recession. As a result, fewer millennials currently ownresidential properties. Millennials who own residential properties also tend to favor smaller and moreaffordable properties. Accordingly, the type of furniture that is favored by millennials are also smaller,multifunctional and affordable furniture in line with a dynamic and urban lifestyle.

Low barriers of entry into the furniture retailing market

New retailers looking to enter the furniture retailing market in the US face low barriers to entry, as capitalcosts required are no longer significant with manufacturing typically outsourced to the People's Republicof China, Indonesia, and other countries. There are also no trade restrictions or market entry barriers,with the overall retail scene in the US generally being receptive to imported wooden furniture products.

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However, new retailers will have to compete with major industry players who enjoy lower costs througheconomies of scale, existing brand-names with strong consumer acceptance and appeal, as well asstrategic barriers within specific products such as exclusive dealing arrangements.

Table 2: Wooden Furniture Retailing in US, 2014-20202014 2015 2016 2017 2018 2019 2020 2021

Wooden Indoor Furniture 47.705 50.375 52.235 53.521 54.444 55.368 56.738 57.547

Wooden Outdoor Furniture 786 825 851 868 885 900 913 923Total Retail Wooden Furniture 48.491 51.200 53.086 54.389 55.329 56.268 57.650 58.470Total Retail Wooden Furniture Online 2.141 2.474 2.960 3.501 4.033 4.517 5.150 5.614Note: Forecasts are based on constant 2016 pricesSource: Euromonitor Passport Home and Garden 2016, Retailing Indonesia 2016

Online retail is becoming a preferred channel for furniture sales in the US

The US retail market for wooden furniture was worth USD 53,086 million in 2016; which grew by of 3.7%from previous year. Total online retail sales for wooden furniture were USD 2,960 million in 2016,representing a growth of 19.6% from the previous year due to a growing preference for online purchasesby consumers

The growth of online retail sales has outperformed traditional wooden furniture retail sales (despite thelatter’s dominance as a retail channel) and this trend is expected to continue in the forecast period. Asconsumers become increasingly savvy with technology, sales of furniture products via online channels isexpected to become more prevalent. The availability of virtual showrooms and detailed productinformation on the Internet are expected to support online sales of furniture products (including woodenfurniture) in the US.

Table 3: Ranking of Wooden Furniture Retailers in US, 2016Retailers RankingAshley HomeStore 1Rooms to Go 2William-Sonoma (including West Elm) 3Restoration Hardware 4Wayfair 5Note: Retail value only takes into account percentage of wooden furniture products sold at the outlets and does not take into consideration online sales andrevenue.Source: Euromonitor estimates from desk research and trade interviews with leading wooden furniture and building component manufacturers / distributorsas well as the relevant trade associations in the US

Top US wooden furniture retailers influence growth domestically

The top five furniture retailers in the US accounted for about 9.0% of total wooden furniture retail sales in2016.

Ashley HomeStore are present across many states and offer online and traditional retail shopping withwooden furniture being among their offerings from the many segments of home decorations. Amanufacturing arm in Minnesota under Ashley Furniture supplies their stores with local and internationalgoods.

Rooms to Go, on the other hand is a retailer that trades in mainly imported products from brands made inAsia and Canada. They have been consistently ranked second for the last three years and revenue fromtheir home furnishing segment has shown a year-on-year growth in sales.

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William Sonoma Home, which is based in California operates 35 stores across the US. Services from thecompany include made-to-order wooden kitchen furniture, design, services and retail gift cards.

Restoration Hardware, is a luxury brand in the home furnishing marketplace in US. The company hasmultiple channels of distribution including galleries, source books and online shopping websites. Itswooden furniture collections are inspired by Asian designers mainly based in Hong Kong. It is alsoknown to partner with world-renowned artists from time to time in the development of their products.

Wayfair, is one of the largest online furniture shopping platforms that offer a wide array of styles andprice points to consumers. Headquartered in Boston, the company employs close to 5,400 people,offering more than 7 million products from 7,000 suppliers across the world.

C. Furniture Manufacturing in IndonesiaBased on the latest available release by Badan Pusat Statistik, Indonesia is home to approximately 965wooden furniture manufacturers in 2014. Out of this number, 263 or 27.3% of these manufacturers areclassified as larger facilities manufacturers. Characteristics of such manufacturers include an area morethan 25,000 sqm and capabilities of producing up to 10 containers on a monthly basis. Governmentstatistics also indicate that 55 of these manufacturing facilities are foreign-owned. The furnituremanufacturing sector in Indonesia is large and fragmented with many smaller size facilities catering tolocal communities in rural Indonesia.

Strong global demand for Indonesian wooden furniture, attributed to its strong traditions inwoodwork and artistic crafts

Indonesia is one of the world’s largest manufacturers and exporters of wooden furniture. Indonesia has astrong tradition in woodwork and artistic crafts which has resulted in large quantities of beautiful,handcrafted wood furniture being produced from Indonesia and exported worldwide. This has helped tobuild the reputation and brand value of Indonesian wood furniture in global markets, creating highdemand for these exotic products in major export markets such as US and Europe. Indonesia’sabundance of skilled craftsman also means that production of such high-quality handcrafted woodfurniture can be ramped up to meet global demand where required.

More Indonesian manufacturers and exporters of wooden furniture working towards FSCcertification

FSC certification has become a critical issue for Indonesian manufacturers and exporters of woodenfurniture. This is because many major export markets for Indonesian wooden furniture bans the import ofillegal timber and wood products into their markets.

FSC certification is an internationally-recognized certification that certifies products that are eco-friendly,of high quality and also harvested and produced in a legal manner. As such, FSC certification allowsIndonesian wood furniture manufacturers to enter into markets which offer higher margins such as USand Europe. Accordingly, industry players are starting to focus on FSC certification and are alsoinvesting significant resources into ensuring that their wooden furniture products obtain FSC certification.

While FSC certification is critical for manufacturers and exporters of Indonesian wooden furniture,obtaining such certification can be a costly and time consuming process, which could pose significanthurdles for smaller manufacturers that lack the resources or know-how to navigate the entire certificationprocess. Hence, smaller manufacturers who might not be successful in obtaining FSC certification andmay face a barrier to entry into export markets that require FSC certification

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Rising awareness of environmental sustainability issues are changing how companies sourcefor raw materials

Both local and global consumers of Indonesian wooden furniture are increasingly paying more attentionto environmental sustainability issues, and placing emphasis on the environmental friendliness of thewooden furniture products they purchase. This is especially so for more affluent consumers from themiddle-to high income bracket, and countries where profit margins for wooden furniture manufacturersare typically higher.

In response to these evolving trends, Indonesian manufacturers of wooden furniture are increasinglyutilizing recycled wood as part of their key raw materials, and also introducing or expanding localreforestation programs to boost their "green credentials". Other strategies employed by suchmanufacturers including adopting more environmentally efficient production methods; as well asobtaining internationally recognized certifications in environmental management. These are often done inthe hope of enhancing access to critical export markets such as Europe, the US and Japan whichimpose increasingly stringent environmental standards on imported products.

Indonesia an attractive manufacturing base for international wood furniture companies

Indonesia is generally attractive as a manufacturing base for foreign furniture companies, due to thecountry’s relatively low labor costs, and the abundance of both unskilled and skilled labor. Foreignfurniture companies are also attracted to Indonesia as a manufacturing base as there is easy access toraw wood supplies at a significantly lower cost due to proximity to the source of such supplies which isalso another major draw for these foreign furniture companies.

Knock-down wooden furniture product a trend

Exporting furniture is not an easy task as preferred trends, packaging style and even social practicesneed to be reviewed before a deal is concluded. Foreign buyers from the US and even Europeancountries increasingly prefer knock-down packaging as it is easier to transport and does not inflatelogistics cost especially when ordering large volume.

Companies like the Group are among the few companies capable of producing knock-down furniture forexport. Quality control is important as color variations and connected parts need to fit when assembledby consumers. Experience in delivering knocked down furniture goods is therefore advantageous whendealing with foreign clients.

Table 4: Manufacturing of Wooden Furniture in Indonesia, 2014-2021 (in million Rupiah)2014 2015 2016 2017 2018 2019 2020 2021

Value of GoodsProduced 17,780,228 22,564,162 17,454,492 20,005,256 22,117,137 23,493,479 24,315,750 24,860,608Note: Forecasts are based on constant 2016 pricesSource: Pusat Badan Statistics Indonesia, Euromonitor analysis

Demand for wooden furniture products to increase in the forecast period

The value of wooden furniture products produced in Indonesia stood at IDR 17,780 billion in 2014. Theproduction dipped in 2016 to IDR 17,454 billion due to a decline in exports. Based on latest availabletrade statistics, this trend was found to be similar in regional countries like the People's Republic ofChina, Vietnam and Malaysia which also registered declining exports of wooden furniture products in2015 year on year.

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In Indonesia, inventories manufactured in 2014 and 2015 had been cleared out in 2016 by Indonesianretailers and exporters. Euromonitor therefore projected a turnaround in manufacturing activities from2017 onwards driven by growing domestic and export demand for wooden furniture products which areexpected to lead to an increase in the wooden furniture manufacture value to IDR 24,860 billion in 2021.This represents a CAGR of 5.6% between 2017 and 2021.

Table 5: Competitive Intelligence of Wooden Furniture Manufacturers in Indonesia, 2016Manufacturers Ranking Wooden Furniture Market ShareThe Group 1 5.2%Company B 2 2.6%Company C 3 1.6%Company D 4 1.5%Company E 5 0.7%Source: Euromonitor analysis from trade interviews

Top five local wooden furniture manufacturers making a mark

The Group is the largest manufacturer of wooden furniture in Indonesia with a market share of 5.2% in2016. The Group had maintained its top position in terms of wooden furniture market share during thehistorical review period. The Group is among the few vertically integrated manufacturers of woodenfurniture with three factories in Indonesia. The company owns two forest concessions, fully equippedmanufacturing facilities and a retail store located in Surabaya. The company is fully certified to thevarious domestic and foreign export requirements including FSC certification and Indonesian TimberLegality Assurance System and implements sustainable overall recycling practices at every step of theprocess.

D. Furniture Export and Import

Large manufacturers targeting export markets

It is conceivable that larger wooden furniture manufacturers (including those in Indonesia) would aim toexpand beyond their domestic markets and export their products to other markets, especially the US andEuropean countries.

As countries such as the US and Britain prepare to implement new trade policies, anti-dumping practicesand import tax readjustments, smaller exporting countries like Indonesia, Vietnam and Malaysia areexpected to be beneficiaries. The reliance on importing a large volume of furniture from any one countryis against best practices of sourcing. Customers in importing countries increasingly use multiple vendorsfrom multiple countries to obtain best prices and quality and also to lower risk of shortages or reliance ona single source. According to trade sources, Indonesian manufacturers have received increased tradeinquiries from foreign buyers especially those from the US and Britain.

Wooden furniture imports into US have seen a rise in the past three years especially with respect towooden office and kitchen items.

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D.1. Import of Wooden Furniture Items into the US

Table 6: Wooden Furniture Imports into US, 2013-2016Furniture Imports AS Trade Value (USD mn) CIF [Historic 2013 - 2016]HS Code Items 2013 2014 2015 2016940330 Wooden office

furniture 864 902 964 1,040940350 Wooden bedroom

furniture 3,345 3,513 3,815 3,699940340 Wooden kitchen

furniture 1,018 1,192 1,453 1,648940360 Other wooden

furniture 5,142 5,528 5,965 5,956Source: Contrade

US furniture imports subject to currency fluctuations

Total imports of wooden furniture into US have increased from 2014 through 2016, with total import valueamounting to USD 12.3 billion in 2016 representing a CAGR of 5.3% over the three year historical reviewperiod.

The People's Republic of China was the largest exporter of wooden furniture to US, accounting forapproximately one-third (USD 4.6 billion) of total wooden furniture imports into US as of 2016. Vietnam,Canada, Malaysia, Mexico, Italy and Indonesia were the next few largest exporters of wooden furniture interms of export value.

Imports of wooden furniture from Indonesia to US fell by 10.2% in 2016, even as overall US imports ofwooden furniture marginally increased by 1.2% in the same year. US imports of wooden furniture fromneighboring Asian countries, namely the People's Republic of China and Vietnam marginally increasedby 0.3% and 2.1% in 2016 respectively, partly owing to the currency depreciation of these countriesagainst the US dollar, as opposed to the marginal appreciation of the Indonesian Rupiah of 0.7% in 2016,as well as higher intensity of promotional activities from these top exporting countries in 2016.

D.2. Export of Wooden Furniture Items

Table 7: Wooden Furniture Exports from Indonesia, 2013-2016Wooden Furniture Export Trade Value (USD mn) FOB Historic 2013 - 2015Kode HS Items 2013 2014 2015940330 Wooden office furniture 34.88 36.69 28.90940350 Wooden bedroom

furniture 163.49 150.76 158.88940340 Wooden kitchen

furniture 41.06 38.22 37.18940360 Other wooden furniture 780.19 824.68 822.66Source: Contrade

Indonesian wooden bedroom furniture exports outperforming within segments

Overall exports of wooden furniture from Indonesia marginally declined by 0.3% in 2015 due to declinesin demand from Japan and France which were the second and the third largest export markets forIndonesian wooden furniture in 2015. Indonesian wooden furniture exports to Japan and France declinedby 20.4% and 10.6% in 2015 respectively.

The marginal depreciation of the US dollar against the Indonesian Rupiah also in part contributed to thedip in exports of wooden furniture to the US in 2016. Exports of wooden bedroom furniture fromIndonesia however increased by 5.4% in 2015, outperforming exports of other segments of the woodenfurniture markets.

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X. EQUITYThe following sets out the Company's equity positions derived from and/or calculated based on theCompany’s consolidated financial statements as of December 31, 2016, 2015, and 2014, and for theyears ended on those dates, which were audited by Teramihardja, Pradhono and Chandra (Rödl &Partner), Registered Public Accountants. The auditor's report dated April 28, 2017, which wasunmodified and signed by Agustina Felisa, and with an emphasis of matter in relation to the change inthe functional currency of the Company and certain Subsidiaries from USD to IDR.

(In Rupiah)


EQUITYEquity attributable to the equity holders of the parent

companyShare capital - par value of Rp100 per share in 2016, and

Rp1,000,000 per share in 2015 and 2014Authorized capital - 20,000,000,000 shares in 2016,250,000 shares in 2015 and 2014Issued and fully paid-in capital - 5,000,000,000 shares in2016, 195,000 shares in 2015, and 100,000 shares in2014 100,000,000,000 195,000,000,000 500,000,000,000

Additional paid-in capital 119,045,697,456 24,045,697,456 25,093,405,789Exchange difference due to translation of financial

statements 105,769,457,388 141,425,224,187 141,425,224,187Revaluation surplus of fixed assets - net 155,811,192,447 139,866,947,544 640,440,950,720Differences equity transactions with non-controlling interest 510,692,166 510,692,166 1,763,749,431Retained earnings 95,450,012,909 165,264,491,867 95,685,208,599Sub-total 576,587,052,366 666,113,053,220 1,404,408,538,726Non-controlling interests 19,771,319,807 40,870,174,662 25,624,443,100TOTAL EQUITY 596,358,372,173 706,983,227,882 1,430,032,981,826

The Company plans to conduct an Initial Public Offering of 1,250,000,000 Offering Shares or 20.0% ofthe issued and fully paid-in capital after the Initial Public Offering with a nominal value of Rp100 pershare and offering price of Rp260 per share.

The following sets out the Company’s pro forma equity position as of December 31, 2016, after takinginto account the impact of the Initial Public Offering:

TABLE OF PRO FORMA EQUITY AS OF DECEMBER 31, 2016

(In Rupiah)

Description Share Capital Additional Paid-in Capital

IssuanceCosts

TranslationAdjustment

–Gain onRevaluation ofFixed Assets

Effect ofChanges in

EquityTransaction ofSubsidiaries

RetainedEarnings

Non-Controlling

InterestTotal Equity

Equity based on thefinancial statements asof December 31, 2016

500,000,000,000 25,093,405,789 - 141,425,224,187 640,440,950,720 1,763,749,431 95,685,208,599 25,624,443,100 1,430,032,981,826

Initial Public Offering of1,250,000,000 shares,having a nominal valueof Rp100 per share,which shall be offered atRp260 per share.

125,000,000,000 200,000,000,000 12,628,815,000 - - - - - 312,371,185,000

Pro forma equity positionas of December 31,2016, subsequent to theInitial Public Offering

625,000,000,000 225,093,405,789 12,628,815,000 141,425,224,187 640,440,950,720 1,763,749,431 95,685,208,599 25,624,443,100 1,742,404,166,826

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XI. DIVIDEND POLICYAll issued and fully paid ordinary registered shares, including the Offering Shares offered in this PublicOffering, shall have the same and equal rights, including the rights to receive dividend distributions.

The Company plans to distribute cash dividends at least once every year. The amount of dividend islinked to the Company’s profit for the relevant fiscal year, with due consideration given to the Company’sfinancial soundness and without prejudice to the rights of shareholders in a GMS to determine otherwisein accordance with the provisions of the Company's Articles of Association.

Pursuant to the laws of the Republic of Indonesia, any announcement of dividend distribution shall bemade based on the resolution of shareholders in the Annual GMS based on recommendation from theDirectors. The Company may distribute cash dividends in a year where the Company records positiveretained earnings.

Any proposal, amount and payment of dividends shall be authorized by the Board of Commissioners andDirectors of the Company and shall be subject to the approval of GMS. The amount of dividends issubject to a number of factors, including but not limited to, net profit, reserve availability, capitalexpenditure requirements, operating results and cash balance. The above factors will ultimately dependon a number of conditions, including but not limited to, the successful implementation of business andfinancial strategies, which are in turn affected by competition and regulation, general economicconditions and other conditions that are specific to the Company or the Company’s business. Most of theabove factors referred to above are beyond the Company's control.

Taking into consideration the above factors, the Company's management intends to propose to theAnnual GMS to resolve that the payout ratio of cash dividends to total net profit be set at a maximum of35.0%, effective from the fiscal year of 2017.

Dividends received by the shareholders, whether Indonesian or foreign shareholders, shall be subject toincome tax on dividends based on the prevailing articles of Indonesian Income Tax Law, namely Law No.36 of 2008 concerning the Fourth Amendment to Law No. 7 of 1983 on Income Tax, or in accordancewith the applicable terms and conditions of prevailing tax agreements between Indonesia and eachcountry.

The Company has obtained the approval to conduct an Initial Public Offering from all of the Company'sShareholders as set out in the Deed No. 17/2017. Pursuant to the negative covenants related to theCompany’s plan to conduct the Initial Public Offering, which are imposed by the Company’s creditagreements entered into by the Company and its Creditors, the Group has obtained the necessarywaivers in relation to the negative covenants on dividend distributions and the implementation of theInitial Public Offering as stated in (i) BNI Letter No. LMC2/2.5/286/R dated April 3, 2017 regardingApproval and Support of Initial Public Offering of PT Integra Indocabinet; (Ii) BNI Letter No.LMC2/2.5/354/R dated April 25, 2017 regarding Approval and Support of Initial Public Offering of PTIntegra Indocabinet and (iii) Exim Letter No. BS.0090/PBS/04/2017 dated April 28, 2017 regarding theAgreement on the Amendment of Terms and Conditions.

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XII. TAXATIONA. Tax Applicable to Shareholders

Income tax on share dividends shall be imposed in accordance with the prevailing laws and regulations.Pursuant to Article 4 paragraph 3 point (f) of the Law of the Republic of Indonesia No. 7 of 1983concerning Income Tax, as amended from time to time, last amended by Law No. 36 of 2008 (effectivefrom January 1, 2009), dividend or distribution of profit received or earned by Limited Liability Companiesas domestic taxpayers, co-operatives, state or regional-government-owned enterprises as a result oftheir equity investment in any business entity established and domiciled in Indonesia are not subject toincome tax, provided that the following requirements are satisfied:1. dividends are paid out from retained earnings; and2. in the case where the recipient of a dividend is a limited liability company or a state or regional

government-owned enterprise, its ownership in the enterprise paying the dividend must not be lessthan 25.0% of the total fully paid-up capital.

In accordance with the Regulation of the Minister of Finance of the Republic of Indonesia No. 234/PMK-03/2009 dated December 29, 2009 concerning Certain Investment Sectors Generating Income forPension Funds Exempted as Object of Income Tax, the income received or accrued by pension fundsincorporated under the approval of the Minister of Finance of the Republic of Indonesia are not includedas an income tax object, provided that such income is received or accrued from, among others, capitalinvestment, in the form of dividends from shares in limited liability companies listed in the IDX.

In accordance with Government Regulation No. 14 of 1997 concerning the Amendment to theGovernment Regulation No. 14 of 1997 concerning Income Tax on Proceeds from Sale of SharesTransaction at the Stock Exchange and the Circular Letter of the Directorate General of Taxation No.SE-06/PJ.4/1997 dated June 20, 1994, concerning the Withholding of Income Tax on Proceeds fromSale of Shares Transaction at the Stock Exchange, the following provisions shall apply:1. On any income received or earned by any individual taxpayer or corporate taxpayer from the sale of

shares listed in the IDX, a final income tax will be imposed at 0.1% of the gross value of thetransactions. Payment of the related income tax payable is to be made as a deduction by the IDXthrough the stock brokers at the time of payment of the sale transaction of shares;

2. Founding shareholders shall be charged with an additional final income tax of 0.5% of the total valueof the Company's shares at the time of the Initial Public Offering;

3. Payment of the additional income tax payable shall be carried out by the Company in the name ofthe founding Shareholders by no later than one month following the trade of the shares at the IDX.However, if the founding Shareholders choose not to meet their tax obligations by paying anadditional final income tax of 0.5% referred to above, the income tax on gains on sale of foundingshares shall be calculated based on the generally applicable income tax rate in accordance withArticle 17 of Law No. 7 of 1983, as last amended by Law No. 36 of 2008 concerning Income tax.

In accordance with Government Regulation No. 19 of 2009 concerning Income Tax on Dividendsreceived or accrued by domestic individual income taxpayers, income in the form of dividends receivedor accrued by domestic individual income taxpayers shall be subject a final income tax of 10.0% of thegross amount.

Dividends paid to domestic taxpayers (including permanent establishments) that do not satisfy theprovisions of Article 4 paragraph 3 point (f) of the Law of the Republic of Indonesia No. 7 of 1983concerning Income Tax as last amended by Law No. 38 of 2008 referred to above, shall be subject towithholding income tax which is 15.0% of the gross amount as set out in Article 23 paragraph (1) of LawNo. 7 of 1983 concerning Income Tax as amended from time to time, last amended by Law No. 36 of

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2008. Furthermore, in accordance with the provisions of Article 23 paragraph (1a), if the taxpayerreceiving or earning such dividend income does not possess a tax registration number, the amount of taxwithheld is 100.0% higher of the initial tax rate or 30.0% of the gross income.

Dividends paid to foreign taxpayers shall be subject to an income tax of 20.0% of the cash paid (in thecase of cash dividends) or 20.0% of the par value (in the case of share dividends) or a lower tax rate inthe event that such dividend payment is made to citizens of a country that has signed the Double TaxAvoidance Agreement (Perjanjian Penghindaran Pajak Berganda, the "P3B") with Indonesia, by fulfillingthe requirements set forth in the Director General of Taxation Regulation No. PER-61/PJ/2009concerning the Procedures of Implementation of Double Tax Avoidance Agreement, as amended byPER-24/PJ/2010, in order for such foreign taxpayer to become eligible to lower tax rate facility accordingto the P3B. Based on the Director General of Taxation Regulation No. PER-61/PJ/2009 concerning theProcedures of Implementation of Double Tax Avoidance Agreement, as amended by PER-24/PJ/2010,foreign taxpayers are required to submit a Certificate of Domicile ("COD") of Non-Resident for IndonesiaTax Withholding, namely:1. Form-DGT 1 or;2. Form-DGT 2 for bank and foreign taxpayers receiving or earning income through custodians with

respect to income from transfer of shares or bonds traded or reported in the capital market inIndonesia, other than interest and dividends, and foreign taxpayers in the form of pension fund,which incorporation has complied with the provisions of the laws and regulations in the partnercountry and is a tax subject in the partner country.

3. COD Form commonly issued by the partner country in the event that the competent authority in thepartner country will not sign the Form DGT-1/DGT-2, subject to the following conditions: The COD form is issued in the English language; The COD form is issued on or after January 1, 2010; The COD form is an original document or a legalized true copy acknowledged by the tax office in

the jurisdiction where one of the tax withholder/collector is registered as a taxpayer. The COD form states, at the minimum, information on the name of the foreign taxpayer; and The COD form is signed by the authorized officer, their legal representatives, or the authorized

officer of the tax office in the P3B partner country or signs similar to a signature in accordancewith the common practice in the P3B partner country and the name of the aforementionedofficer.

In addition to the requirements to submit Form-DGT1 or Form DGT-2 or COD Form from the partnercountry, according to the Directorate General of Taxation Regulation No. PER-62/PJ/2009 concerningPrevention of Misuse of the Double Tax Avoidance Agreement as amended by PER-25/PJ/2010 datedApril 30, 2010, the foreign taxpayer must meet the requirements as a beneficial owner or the true ownerof the economic benefit arising from such income.

B. Fulfillment of the Company's Tax Obligations

As a Taxpayer, the Company is generally subject to the Tax Obligation arising from Income Tax (the"WHT") and Land and Building Tax (Pajak Bumi dan Bangunan, the "PBB"). The Company has fulfilledall of its tax obligations in accordance with the prevailing tax laws and regulations.

As a taxpayer, the Company has tax obligations and the Company has fulfilled its tax obligations inaccordance with the prevailing provisions of the tax laws and regulations. The Company has alsosubmitted the annual income tax return for the 2016 fiscal year on April 26, 2017. As of the date of thisProspectus, the Company has no overdue tax obligations.

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PROSPECTIVE BUYERS OF THE OFFERING SHARES ARE EXPECTED TO CONSULT THEIRRESPECTIVE TAX CONSULTANTS ABOUT THE TAX CONSEQUENCES THAT MAY ARISE FROMTHE PURCHASE, POSSESSION AND SALE OF SHARES PURCHASED THROUGH THIS INITIALPUBLIC OFFERING.

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XIII. UNDERWRITING1. Description of Underwriting

Pursuant to the Deed of the Company’s Initial Public Offering Underwriting Agreement No. 64 datedMarch 23, 2017, read together with Amendment I of the Shares Underwriting Agreement of theCompany’s Public Offering No. 1 dated May 2, 2017 and Amendment II of the Shares UnderwritingAgreement of the Company’s Public Offering No. ● dated June 8, 2017, all drawn up before FathiahHelmi, S.H., a Notary in Jakarta, the Joint Lead Underwriters agree to, in accordance with theirrespective underwriting portion, offer and sell the Offering Shares to the public and to bind themselvesto purchase the Offering Shares that remain unsold at the closing date of the offering period of the InitialPublic Offering at the Offering Price. The Shares Underwriting Agreement shall supercede any similaragreements, whether written or unwritten, which have previously existed or will exist in the future,between the Company and the Underwriters.

The Joint Lead Underwriters participating in the underwriting of the Offering Shares have agreed toperform their duties in accordance with Regulation No. IX.A.7.

The underwriters, their respective underwriting portion and percentage participating in the Company'sInitial Public Offering are as follows:

No. Underwriters Underwriting Portion PercentageNumber of Shares (Rp) (%)

Joint Lead Underwriters:1. PT Bahana Sekuritas 497,800,000 129,428,000,000 39.824%2. PT DBS Vickers Sekuritas Indonesia 497,800,000 129,428,000,000 39.824%3. PT BCA Sekuritas 248,900,000 64,714,000,000 19.912%

Subtotal 1,244,500,000 323,570,000,000 99,560%Underwriters:

1. PT Erdhika Elit Sekuritas 1,500,000 390,000,000 0.120%2. PT Profindo Sekuritas Indonesia 1,000,000 260,000,000 0.080%3. PT Panca Global Sekuritas 1,000,000 260,000,000 0.080%4. PT Bosowa Sekuritas 450,000 117,000,000 0.036%5. PT Dhanawibawa Sekuritas Indonesia 450,000 117,000,000 0.036%6. PT Magenta Kapital Sekuritas Indonesia 450,000 117,000,000 0.036%7. PT Yulie Sekuritas Indonesia 450,000 117,000,000 0.036%8. PT KGI Sekuritas Indonesia 100,000 26,000,000 0.008%9. PT Phillip Sekuritas Indonesia 100,000 26,000,000 0.008%

Subtotal 5,500,000 1,430,000,000 0.440%Total 1,250,000,000 325,000,000,000 100.00%

PT Bahana Sekuritas, PT BCA Sekuritas and PT DBS Vickers Sekuritas Indonesia, as the Joint LeadUnderwriters and Underwriters, hereby expressly represent that they are not Affiliated Parties of theCompany, whether directly or indirectly, based on the definition set forth in the Capital Market Law.

2. Determination of Offering Price in the Primary Market

The Offering Price of the Shares is determined based on mutual agreement and negotiation betweenthe Company and the Joint Lead Underwriters taking into consideration the results of the preliminaryoffering (the "Bookbuilding") conducted from May 24, 2017 until June 6, 2017. The price submitted byprospective investors during the Bookbuilding ranges from Rp210 up to Rp315.

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The determination of Offering Price range is based on a combination of several valuation methods suchas the discounted cash flow method on the projected consolidated revenue of the Company, andmultiple valuation ratios such as EV/EBITDA and P/E of several public companies listed on regionalstock exchanges. The Offering Price range is submitted to potential investors at the time ofbookbuilding.

The Offering Price of Rp260 also takes into account the result of the Bookbuilding conducted by theJoint Lead Underwriters, who conducted a survey involving investors in the domestic market and tookthe following factors into consideration:- Market condition at the time of the Bookbuilding;- Investor demand;- Demand from Quality Institutional Buyers ("QIB");- The Company’s financial performance;- Data and information concerning the Company including, the Company’s performance, brief history,

business prospects and information on the furniture industry in Indonesia;- Assessment of:

1. the Directors and management, the Company’s operations or performance, both in thepast and in the future, and future business prospects and revenue prospects;

2. the Company's operations or performance, both in the past and in the future; and3. the future business prospects and revenue prospects;

- The Company's latest update;- Determination of market value and various valuation methods for several companies which engage

in similar industry with the Company;- Assessment based on P/E and EV/EBITDA ratios of several public companies listed on the regional

stock exchanges that can be used as comparison; and- Expected performance of the Company's Shares on the secondary market

There is no guarantee or assurance that the Company's share price will continue to be higher than theOffering Price or that the trading of the Company’s shares will remain active on the IDX where theshares are listed subsequent to the Initial Public Offering.

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XIV. CAPITAL MARKET SUPPORTING INSTITUTIONS ANDPROFESSIONALS

The capital market supporting institutions and professionals participating in this Initial Public Offeringare as follows:

Public Accountant Public Accounting Firm Teramihardja, Pradhono & Chandra (Rödl &Partner)Jl. Ngagel Tama A-6Surabaya 60283, IndonesiaPhone: (031) 502 7134Fax: (031) 503 1472Name of Partner : Agustina FelisiaSTTD Number : 185/BL/STTD-AP/2012STTD Date : January 4, 2012Framework : Public Accountant Professional Standards

set out by IAPI.IAPI Membership No. : 1614Engagement Letter : 004/ITG/02/2017

Main duties: Perform audit based on the auditing standards set forth by the IAPI. Thestandards require the public accountant to plan and perform an audit in orderto obtain a reasonable assurance on whether the financial statements are freefrom material misstatements and to be responsible for the opinion expressedon the audited financial statements. the duties of the public accountant shallinclude examining, on a test basis, evidence supporting the amounts anddisclosures in the financial statements.

Professional experience in the capital markets in the last three years:

No. Company Name Type of Transaction Year1. PT Paramita Bangun Sarana Tbk Initial Public Offering 20162. PT Mitra Pemuda Tbk Initial Public Offering 20153. PT Trans Power Marine Tbk Initial Public Offering 2012

Legal Counsel Makes & PartnersMenara Batavia 7th FloorJl. KH Mansyur Kav. 126Jakarta 10220, IndonesiaPhone: (021) 574 7181Fax: (021) 574 7180Name of Partner : Iwan Setiawan, S.H.STTD Number : No. 227/PM/STTD-KH/1998STTD Date : October 5, 1998Association of CapitalMarket Legal Counsels(Himpunan KonsultanHukum Pasar Modal, the

: No. 200924

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"HKHPM") MembershipNo.Framework : Professional Standards of the Association

of Capital Market Legal Counsels, Annex tothe Decree of Association of Capital MarketLegal Counsels No. KEP.01/HKHPM/2005dated February 18, 2005, as amended bythe Decree of the Association of CapitalMarket Legal Counsels No.KEP.04/HKHPM/XI/2012 dated December6, 2012, and Decree of the Association ofCapital Market Legal Counsels No.01/KEP-HKHPM/II/2014 dated February 4,2014.

Engagement Letter : 001/ITG/02/2017

Main duties: To conduct examination and research to the best of its ability on the legalaspects of the existing facts about the Company and other related informationas provided by the Company. The results of the legal examination andresearch are summarized in the legal due diligence report, which serves as thebasis to form the legal opinion which shall be expressed objectively andindependently, and to examine the information included in this Prospectus asfar as legal aspects are concerned. The duties and functions of a legal counseldescribed herein are in accordance with the professional standards and theprevailing Capital Market Regulations in connection with the implementation ofprinciples of disclosures related to the Initial Public Offering .


No. Company Name Type of Transaction Year1. PT Bank Bukopin Tbk Bond Public Offering 20172. PT Krakatau Steel (Persero) Tbk Rights Issue 20163. PT Impack Pratama Tbk Bond Public Offering 20164. PT Surya Semesta Internusa Tbk Bond Public Offering 20165. PT Aneka Gas Industri Tbk Initial Public Offering 20166. PT Bentoel Internasional Investama

Tbk Rights Issue 20167. PT Sierad Produce Tbk Rights Issue 20168. PT Mitra Keluarga Karyasehat Tbk Initial Public Offering 20159. PT Profesional Telekomunikasi

IndonesiaBond Public Offering 2014

10. PT Agung Podomoro Land Tbk Bond Public Offering 2014

Notary Fathiah Helmi, SHGraha Irama, 6th Floor, Suite CJl. HR Rasuna Said Blok X-1 Kav.1&2 KuninganJakarta 12950, IndonesiaPhone : (021) 5290 7304-6Fax: (021) 526 1136

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STTD Number : No. 02/STTD-N/PM/1996STTD Date : February 12, 1996Association

Membership: Indonesian Notary Association ("Ikatan Notaris

Indonesia, the "INI") No.011.003.027.260958Framework : Law No. 30 of 2004 regarding the Notary Office

and the Indonesian Notary Association Code ofEthics.


Main duties: Attend meetings discussing all aspects related to the Initial Public Offering,except for meetings involving financial aspects and price setting, andmarketing strategies, formulate and prepare Deeds relating to the Initial PublicOffering, including the Shares Underwriting Agreement.


No. Company Name Type of Transaction Year1. PT Waskita Beton Precast Tbk Initial Public Offering 20162. PT Anugerah Berkah Madani Tbk Initial Public Offering 20163. PT Aneka Gas Industri Tbk Initial Public Offering 20164. PT Wijaya Karya (Persero) Tbk Rights Issue 2016

5. PT Pembangunan Perumahan(Persero) Tbk

Rights Issue 2016

6. PT Krakatau Steel (Persero) Tbk Rights Issue 2016

7. PT Bank Pembangunan DaerahBanten Tbk

Rights Issue 2016

8. PT Adira Dinamika Multi Finance Tbk Shelf Bonds Offering 2016

9. PT Bank Rakyat Indonesia (Persero)Tbk

Shelf Bonds Offering 2016

10. PT Federal International Finance Shelf Bonds Offering 201611. PT PP Properti Tbk Bonds Offering 201612. PT Pelabuhan Indonesia I (Persero) Bonds Offering 201613. PT Angkasa Pura I (Persero) Bonds and Sukuk Offering 201614. PT Angkasa Pura II (Persero) Bonds Offering 201615. PT Bank DKI Shelf Bonds Offering 2016

16. PT Bank Pembangunan DaerahSulawesi Selatan dan Sulawesi Barat


17. PT Intiland Development Tbk Bonds Offering 201618. PT Medco Energi Internasional Tbk Shelf Bonds Offering 201619. PT Bank OCBC NISP Tbk Shelf Bonds Offering 201620. PT Mandiri Tunas Finance Shelf Bonds Offering 201621. PT Waskita Karya (Persero) Tbk Shelf Bonds Offering 201622. PT Aneka Tambang (Persero) Tbk Rights Issue 201523. PT Adhi Karya (Persero) Tbk Rights Issue 201524. PT Waskita Karya (Persero) Tbk Rights Issue 201525. PT Ciputra Property Tbk Initial Public Offering 201526. PT Mitrakarya Sehat Tbk Initial Public Offering 201527. PT PP Properti Tbk Initial Public Offering 201528. PT Gelombang Seismatik Indonesia Initial Public Offering 2015

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No. Company Name Type of Transaction YearTbk

29. PT Federal International Finance Shelf Bonds Offering 201530. PT Mandala Multifinance Tbk Shelf Bonds Offering 201531. PT Mandiri Tunas Finance Shelf Bonds Offering 201532. PT Panorama Sentrawisata Tbk Shelf Bonds Offering 201533. PT Adira Dinamika Multi Finance Tbk Shelf Bonds Offering 201534. PT Adira Dinamika Multi Finance Tbk Shelf Bonds Offering 201535. PT Waskita Karya (Persero) Tbk Shelf Bonds Offering 201536. PT Summarecon Agung Tbk Shelf Bonds Offering 2015

37. PT Bank Rakyat Indonesia (Persero)Tbk


38. PT BCA Finance Tbk Shelf Bonds Offering 2015

39. PT Bank Pembangunan DaerahJawa Tengah

Subordinated Bonds Offering 2015

40. PT Bank Pembangunan DaerahSulawesi Utara

Bonds Offering 2014

41. PT Ciputra Residence Bonds Offering 201442. PT Summarecon Agung Tbk Sukuk Offering 201443. PT Summarecon Agung Tbk Shelf Bonds Offering 201444. PT Express Transindo Utama Tbk Bonds Offering 201445. PT Bank Mayapada Subordinated Bonds Offering 201446. PT Bank Of India Indonesia Tbk Rights Issue 201447. PT Garuda Indonesia (Persero) Tbk Rights Issue 201448. PT Bank QNB Kesawan Tbk Rights Issue 201449. PT Pan Brothers Tbk Rights Issue 201450. PT Intan Baruprana Finance Tbk Initial Public Offering 201451. PT Mitra Bara Adiperdana Tbk Initial Public Offering 201452. PT Bank Panin Syariah Tbk Initial Public Offering 201453. PT Semen Baturaja (Persero) Tbk Initial Public Offering 2014

Share Registrar Datindo EntrycomPuri DatindoJl. Jendral Sudirman Kav 34JakartaPhone: (021) 5709009Fax: (021) 5709026STTD Number : Kep 16/PM/1991STTD Date : April 19, 1991Framework : Capital Market and Bapepam and LK RegulationName of Association : Indonesian Securities Administration Bureau

Association (Asosiasi Biro Administrasi EfekIndonesia, the "ABI")


Main duties: The duties and responsibilities of the Share Registrar in the Initial PublicOffering according to the applicable professional standards and the prevailingCapital Market regulations include theadmission of share subscription in theform of FPPS and DPPS, which are supported by documents required in the

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share subscription procedures and have been approved by the Underwritersas subscriptions eligible for share allotment, and the undertaking theadministration of share subscriptions in according using the applicationavailable at the Share Registrar.


No. Company Name Type of Transaction Year1. PT Nusantara Pelabuhan Handal Tbk Initial Public Offering 2017

2. PT Aneka Gas Industri Tbk Initial Public Offering 20163. PT Waskita Beton Precast Tbk Initial Public Offering 20164. PT Duta Intidaya Tbk Initial Public Offering 20165. PT Graha Layar Prima Tbk Rights Issue 20166. PT Bentoel Internasional Tbk Rights Issue 20167. PT Catur Sentosa Adiprana Tbk Rights Issue 20168. PT Sillo Maritime Perdana Tbk Initial Public Offering 20169. PT Cikarang Listrindo Tbk Initial Public Offering 201610. PT XL Axiata Tbk Rights Issue 201611. PT Bank Ganesha Tbk Initial Public Offering 2016

12. PT Equity Development InvestmentTbk

Rights Issue 2016

13. PT Mitra Pemuda Tbk Initial Public Offering 201614. PT KINO Indonesia Tbk Initial Public Offering 201515. PT ANTAM (Persero) Tbk Rights Issue 201516. PT Adhi Karya (Persero) Tbk Rights Issue 201517. PT Bank Harda Internasional Tbk Initial Public Offering 2015

18. PT Bank Rakyat Indonesia AgroniagaTbk

Rights Issue 2015

19. PT Asuransi Harta Aman PratamaTbk

Rights Issue 2015

20. PT Anabatic Technologies Tbk Initial Public Offering 201521. PT Waskita Karya (Persero) Tbk Rights Issue 201522. PT Merdeka Copper Gold Tbk Initial Public Offering 201523. PT Mega Manunggal Property Tbk Initial Public Offering 201524. PT Intan Baruprana Finance Tbk Initial Public Offering 201425. PT Blue Bird Tbk Initial Public Offering 201426. PT Mitrabara Adiperdana Tbk Initial Public Offering 201427. PT Graha Layar Prima Tbk Initial Public Offering 201428. PT Wijaya Karya Beton Tbk Initial Public Offering 2014

Together with the Underwriters, the Share Registrar shall have the right to reject share subscriptionsthat fail to satisfy the applicable subscription requirements. In the event of oversubscription, the ShareRegistrar shall conduct the allotment process in accordance with the allotment formula set by theAllotment Manager, print the Allotment Confirmation Form and prepare the allotment report. The ShareRegistrar is also responsible for issuing the Collective Share Certificate, if required, and prepare theInitial Public Offering Report in accordance with the prevailing regulations.

Based on the Elucidation of Article 1 number 1 read together with number 23 of the Capital Market Law,as previously described in Chapter XV of this Prospectus, the capital market supporting institutions and

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professionals participating in this Initial Public Offering represent that they are not Affiliated Parties ofCompany, whether directly or indirectly, as defined in the Capital Market Law.

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XV. LEGAL OPINION

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XVI. INDEPENDENT AUDITOR'S REPORT AND THECOMPANY'S CONSOLIDATED FINANCIAL STATEMENTS

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XVII. IMPORTANT PROVISIONS IN THE COMPANY’S ARTICLESOF ASSOCIATION AND OTHER IMPORTANT PROVISIONSIN RELATION TO THE SHAREHOLDERS

The Company's Articles of Association presented below incorporates the Company's most recentamendments to the Articles of Association as set out in the Deed of minutes of Extraordinary GeneralMeeting of Shareholders of PT Integra Indocabinet No. 17 dated March 7, 2017, drawn up beforeFathiah Helmi, S.H., a Notary in Jakarta, which was (i) approved by the MoLHR under Decree No.AHU-0005787.AH.01.02.TAHUN 2017 dated March 8, 2017, and was (i) received and registered in thedatabase of the Legal Entity Administration System of the Ministry of Law and Human Rights of theRepublic of Indonesia, each under No. AHU-AH.01.03-0116016 (for the amendment of the Company’sArticles of Association) and No. AHU-AH.01.03-0116017 (for the Company's data change) dated March8, 2017, and was registered in the Company Register under No. AHU-0005787.AH.01.02.TAHUN 2017dated March 8, 2017. The Company’s Articles of Association are as follows:

NAME AND DOMICILEArticle 1

1. The name of the Limited Liability Company is PT INTEGRA INDOCABINET Tbk (hereinafterreferred to as the "Company"), having its domicile in Sidoarjo Regency.

2. The Company shall be allowed to open branch or representative offices, whether in or outside thejurisdiction of the Republic of Indonesia as stipulated by the Directors and upon approval of theBoard of Commissioners.

THE COMPANY'S DURATION OF ESTABLISHMENTArticle 2

The Company was established on 19-05-1989 (nineteen May nineteen eighty nine) and has obtainedthe status as a legal entity since 20-01-1990 (twenty January nineteen ninety), and shall be establishedfor an indefinite period of time.

AIMS, OBJECTIVES AND BUSINESS ACTIVITIESArticle 3

1. The Company's aims and objectives are to engage in the industry,

2. Trade and service businesses.

3. To achieve the aforementioned aims and objectives, the Company may carry out the followingbusiness activities:

a. To engage in industrial activities, including among others, the furniture, wood, and cork productbusiness, the bamboo and rattan wickerwork business as well as other similar businesses.

b. To: -i. engage in trade, including export-import and domestic, of products produced

independently or by other parties that are marketed by the Company;ii. act as a wholesaler, purveyor, supplier, franchisee, commission house and other related

business activities;

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iii. act as a distributor, agent and representative of other domestic and internationalenterprises; and

iv. trade of the industrial products referred to above.c. To provide services, except for legal and tax services.

4. In addition to the main business activities referred to in paragraph 2, the Company may carry outsupporting business activities, namely, creative business activities related to graphic design, interiordesign, product design, industrial design, corporate identity consulting, market research as well aspackaging services.

CAPITALArticle 4

1. The Company’s authorized capital shall be in the sum of Rp2,000,000,000,000.00 (two trillionRupiah), consisting of 20,000,000,000 (twenty billion) shares, each share having a nominal value ofRp100.0 (one hundred Rupiah).

2. Of such Authorized Capital, a total of 5,000,000,000 (five billion) shares, each having a nominalvalue of Rp100.0 (one hundred Rupiah), having a total nominal value of Rp500,000,000,000 havebeen issued and fully paid by the Shareholders, the details and nominal value of shares of whichare stated in the closing provisions of this Deed.

3. 100.0% of the nominal value of each share that has been issued and fully paid referred to above, ora total of Rp500,000,000,000 (five hundred billion Rupiah) has been fully paid by the Shareholdersof the Company as set out in the Deed Number: 12 dated 25-08-2016 (twenty five August twothousand sixteen), drawn up before Dyah Ayu Ambarwati, Bachelor of Law, Master of Notary, aNotary in Pasuruan Regency, the notification of changes in company data of which has beenreceived and recorded in the Legal Entity Administration System database of the Ministry of Lawand Human Rights of the Republic of Indonesia under Number: AHU-AH.01.03-0075419 dated 29-08-2016 (twenty nine August two thousand sixteen).

4. Shares in portfolio shall be issued by the Company upon approval of the General Meeting ofShareholders ("GMS"). Shares in portfolio shall be issued by the Company with the approval of theGMS, under certain conditions and at the price stipulated by the Directors with the approval of theBoard of Commissioners, and such price shall not be lower than the par (nominal) value per share,with due consideration to the provisions of this Articles of Association and the prevailing laws andregulations in the Capital Market and the regulations in the IDX where the Company’s shares arelisted.

5. Payment of shares may be made in the form of cash or other forms of payment and/or in the formof rights to charge. Such payment of shares shall comply with the Capital Market regulations andother laws and regulations governing such payment.

6. Payment of shares in the form other than cash, whether in the form of tangible or intangiblearticle(s), shall comply with the following provisions:a. The article(s) to be made as capital contribution(s) shall be announced to the public in

conjunction with the summon to convene the GMS concerning such contribution;b. The article(s) to be made as capital contribution(s) shall be appraised by an Appraiser

registered in the Financial Services Authority (OJK), and shall not be encumbered in any waywhatsoever;

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c. Subject to the approval from the General Meeting of Shareholders at the quorum as set out inthis Articles of Association.

d. In the event that the article(s) to be deposited as capital contribution(s) is(are) in the form of theCompany's shares listed on the Stock Exchange, such shares shall be valued at fair marketvalue.

e. In the event that the capital contributions shall be derived from the Company’s retainedearnings, capital paid in excess of par value, net profit, and/or other components of own capital,then the said retained earnings, capital paid in excess of par value, the Company’s net profit,and/or other components of own capital shall be first reported in the last Annual FinancialStatements audited by an Accountant registered with the OJK with unmodified opinion.

7. In raising additional capital with the issuance of Preemptive Rights to shareholders, the Companyshall be obligated to announce information on the plan to raise additional capital with the issuanceof Preemptive Rights to shareholders in simultaneously with the announcement of GMS, at thelatest, in one newspaper published in the Indonesian language with national circulation, at theminimum, or the Stock Exchange’s website and the Public Company’s website, the content of whichshall meet the principles required by the Capital Market.

8. In the event that the GMS approving the issuance of shares in portfolio by raising additional capitalwithout issuance of Preemptive Rights determines the maximum number of shares in portfolio to beissued, such GMS shall grant the Board of Commissioners with the authority and power to declarethe final number of shares issued in connection with additional capital without Preemptive Rights.

9. Equity Securities Issuance; Every additional capital acquired through the issuance of EquitySecurities (Equity Securities shall be Shares, Securities convertible to shares or Securities with theright to obtain shares from the Company as the issuer), shall be conducted in accordance with thefollowing provisions:a. Granting Preemptive Rights, i.e. an inherent right of the shares that allows existing

shareholders to purchase shares and/or other equity securities convertible to shares or grantingthe rights to purchase shares, before such securities are offered to other parties;

b. Issuance of shares/additional capital with Preemptive Rights; without Preemptive Rights shallbe conducted with the approval of the GMS in accordance with the regulations in the CapitalMarket;

c. The issuance of shares from portfolio for the holders of Securities convertible to shares orSecurities containing the right to acquire shares, may be carried out by the Directors based onthe shareholders in a GMS which approved the issuance of such Securities.

d. The Company shall be obligated to conduct unsubscribed share and/or equity securityallotment at the same offer price to all shareholders declaring their intention to purchaseadditional shares and/or Equity Securities during the Preemptive Rights exercise period.

e. The Preemptive Rights are tradable and transferrable to other parties, with due considerationsto the provisions of the Articles of Association and the prevailing laws and regulations in theCapital Market and in Indonesia.

f. In the event that there are remaining Equity Securities that are not subscribed by theshareholders referred to in point d above, then, in the event that a stand-by buyer is available,the aforementioned Equity Securities shall be allocated to the Party acting as the stand-bybuyer at equal price and terms.

g. If the Company intends to raise additional capital, which proceeds shall be used to carry outtransactions with a certain pre-determined value, such capital raise shall have Stand-By Buyersguaranteeing to purchase the remaining shares and/or other Equity Securities unsubscribed by

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the Preemptive Right Holders, at a minimum price that is equal to the offer price of such sharesand/or other Equity Securities.

h. Additional paid-in capital shall be effective upon payment and the shares issued shall haveequal rights with other shares under the same class issued by the Company, without prejudiceto the Company's obligations to report to the Minister of Law and Human Rights.

i. Issuance of Equity Securities without granting the Preemptive Rights to the Shareholders maybe carried out in the event that such issuance is:1) designated to the Company's employees; and/or2) designated to the holders of Bonds or other Securities convertible to shares, which have

been issued with the approval of the GMS; and/or3) effected in the course of reorganization and/or restructuring that has been approved by the

GMS; and/or4) conducted in accordance with the regulations in the Capital Market allowing additional

capital without preemptive rights.

10. Increasing the Company's Authorized Capital:a. The increase of the Company's Authorized Capital may be conducted solely based on the

resolution of the GMS. The amendment to the Articles of Association with regard to the changein Authorized Capital shall require the approval from the Minister of Law and Human Rightsand/or its replacement.

b. The increase of authorized capital resulting in the issued and fully paid-in capital to be less than25.0% of the Authorized Capital may be conducted provided that:b.1. Approval from the GMS to increase the Authorized Capital has been obtained;b.2. Approval from the Minister of Law and Human Rights of the Republic of Indonesia

and/or its replacement has been obtained;b.3. The increase in issued and fully paid-in capital to become at least 25.0% of the

authorized capital shall be conducted by no later than six months subsequent to theapproval from the Minister of Law and Human Rights of the Republic of Indonesiaand/or its replacement.

b.4. In the event that the increase in fully paid-in capital as defined in Article 4 paragraph7.b.3 of this Articles of Association is not fully satisfied, the Company shall re-amend itsArticles of Association so that the Authorized Capital and Issued and fully paid-incapital conform to the provisions of Article 33 paragraph (1) and paragraph (2) of theCompanies Law, within a period of two months subsequent to the failure to satisfy theperiod set out in Article 4 paragraph 7.b.3 of this Articles of Association;

b.5. The approval of the GMS referred to in Article 4 paragraph 7.b.1 of this Articles ofAssociation shall include the approval to amend the Articles of Association referred toin Article 4 paragraph 7.b.4 of this Articles of Association.

c. The amendment of Articles of Association with regard to the increase of Authorized Capitalshall become effective after the payment of shares resulting in the fully paid-in capital tobecome at least 25.0% of the authorized capital takes place, and such shares shall bear equalrights as other shares issued by the Company, without prejudice to the Company’s obligation toapply for the approval on the amendment of Articles of Association from the Minister of Lawand Human Rights of the Republic of Indonesia and/or its replacement upon such increase offully paid-in capital.

11. The Company may buy back the shares that have been fully paid and the buyback of such sharesshall duly consider the provisions of the prevailing regulations, particularly the Capital MarketRegulations.

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SHARESArticle 5

1. The Company's shares are registered shares, as registered in the Company’s ShareholderRegister.

2. The Company may issue shares with or without nominal value. Issuance of shares without nominalvalue shall be conducted in accordance with the prevailing laws and regulations in the CapitalMarket.

3. The Company shall only acknowledge one individual or one legal entity as the owner of one share.

4. Every one share shall provide one vote to the owners of such share, which shall be the person orlegal entity which name is registered as the shareholder in the Shareholder Register.

5. In the event that a share, for any reason whatsoever, is owned jointly by several persons, thenthose who jointly own such share shall appoint in writing, one person among themselves or anotherperson as their joint representative and only the said representative shall be registered in theShareholder Register and the said representative shall be deemed as the legitimate owner of suchshare and shall have the right to exercise and use all the rights vested by law over such share.

6. As long as the provisions in paragraph 5 of this Article are not satisfied, the shareholders shall nothave the right to cast their votes in a GMS, and dividend payments for such shares shall besuspended.

7. In the event that the joint owner neglects to notify the appointment of such joint representative tothe Company in writing, the Company shall have the right to treat the shareholder whose name isregistered in the Company’s Shareholder Register as the sole legitimate owner of such share(s).

8. Every Shareholder shall comply with this Articles of Association and all resolutions validly adoptedin the GMS and the prevailing laws and regulations.

9. All shares issued by the Company may be encumbered with due compliance with the provisions oflaws and regulations concerning encumbrance of shares, the laws and regulations in the CapitalMarket and the Companies Law.

10. The Share Ownership Evidence shall be the following:a. In the event that the Company's shares are not administered in a Collective Depository at the

Securities Depository and Settlement Institution, the Company shall be obligated to provide theshare ownership evidence in the form of share certificates or collective share certificates to itsshareholders.

b. In the event that the Company's shares are not administered in a Collective Depository at theSecurities Depository and Settlement Institution, the Company shall be obligated to issuecertificates of written confirmation signed by the Directors to the Securities Depository andSettlement Institution as evidence of registration in the Company's Shareholder Register.

11. For the Company's shares that are listed on the Stock Exchange, the laws and regulations in theCapital Market and the regulations in the Stock Exchange where the shares are listed shall apply.

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SHARE CERTIFICATEArticle 6

1. The Company may issue a collective share certificate as a share ownership evidence of two ormore shares owned by a shareholder.

2. A share certificate shall, at the minimum, state the followinga. The name and address of the shareholder;b. The serial number of the share certificate;c. The nominal value of the share;d. The issuance date of the share certificate;

3. A collective share certificate shall, at the minimum, state the following:a. The name and address of the shareholder;b. The serial number of the collective share certificate;c. The serial number of the share certificate and the number of shares;d. The nominal value of the share;e. The issuance date of the collective share certificate;

4. Every share certificate and/or collective share certificate and/or convertible bond and/or warrantand/or other securities convertible to shares shall be printed and marked with serial number, date ofissuance and shall contain the signatures of the President Director together with the Vice PresidentDirector or one member of the Directors appointed by the Directors Meeting together with onemember of the Board of Commissioners appointed by the Board of Commissioners Meeting, andsuch signatures may be directly printed on the share certificate and/or collective share certificateand/or convertible bond and/or other securities convertible to shares, with due consideration to theprevailing laws and regulations in the Capital Market.

SHARE CERTIFICATE REPLACEMENTArticle 7

1. Damaged share certificate and collective share certificate:a. In the event that a share certificate is damaged, a duplicate of the said share certificate can be

issued provided that:1) The applicant filing the written request for the said duplicate of share certificate is the

owner of the said share certificate; and2) The Company has received the damaged share certificate;

b. The Company shall destroy the damaged original share certificate upon issuance of theduplicate of share certificate, which serial number shall be the same as the original sharecertificate;

2. In the event that a share certificate is lost, a duplicate of the said share certificate can be issuedprovided that:a. The applicant filing the written request for the said duplicate of share certificate is the owner of

the said share certificate; andb. The Company has obtained a police report concerning the loss of the said share certificate

from the Indonesian National Police;c. The applicant filing the request for the said duplicate of share certificate has provided a

guarantee as deemed adequate by the Company’s Directors; and

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d. The plan for the issuance of a duplicate of the lost share certificate has been announced in theStock Exchange where the Company’s shares are listed by at least 14 (fourteen) days prior tothe issuance of the duplicate of share certificate.

3. All costs incurred with respect to the issuance of the replacement of share certificate shall be borneby the concerned Shareholder.

4. The provisions set out in paragraph 1, 2 and 3 of this Article shall apply for the replacement ofcollective share certificates or collective Equity Securities certificate.

COLLECTIVE DEPOSITORYArticle 8

1. Shares administered in a Collective Depository under the Securities Depository and SettlementInstitution shall be registered in the Company's Shareholder Register under the name of theSecurities Depository and Settlement Institution for the interest of the account holders at theSecurities Depository and Settlement Institution.

2. Shares administered in a Collective Depository under a Custodian Bank or a Securities Companythat are registered in the Securities Account at the Securities Depository and Settlement Institutionshall be registered under the name of the respective Custodian Bank or Securities Company for thebenefit of the holders of Securities Account in the respective Custodian Bank or SecuritiesCompany.

3. In the event that the shares administered in the Collective Depository under a Custodian Bankconstitute a part of a Mutual Fund Securities Portfolio in the form of a collective investment contractand are not included in the Collective Depository at the Securities Depository and SettlementInstitution, the Company shall register such shares in the Shareholder Register under the name ofthe Custodian Bank for the benefit of the unit holder of the said Mutual Fund in the form of collectiveinvestment contract;

4. The Company is obligated to issue certificates or written confirmations to the Securities Depositoryand Settlement Institution referred to in point 1 above or to the Custodian Bank referred to in point 3above as evidence of registration in the Company’s Shareholder Register;

5. The Company is obligated to transfer the shares administered in the Collective Depository that areregistered under the name of the Securities Depository and Settlement Institution or the CustodianBank for Mutual Funds in the form of Collective Investment Contract in the Company'sShareholders Register to the name of the parties appointed by the respective Securities Depositoryand Settlement Institution or Custodian Bank; Request for transfer shall be submitted by theSecurities Depository and Settlement Institution or the Custodian Bank to the Company or theSecurities Administration Bureau appointed by the Company;

6. The Securities Depository and Settlement Institution, Custodian Bank, or Securities Company shallissue written confirmations to the Securities account holders as evidence of registration in theSecurities account;

7. With respect to the Collective Depository, each share of the same type and class issued by theCompany shall be equal and exchangeable between one another;

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8. The Company shall reject the registration of a share in the Collective Depository in the event thatthe share certificate is lost or destroyed, unless the Party requesting the transfer referred to aboveis able to provide sufficient evidence and/or guarantee that the Party is the lawful owner of thelost/destroyed share certificate and that the share certificate is truly lost or destroyed;

9. The Company shall reject the registration of the shares in the Collective Depository if the sharesare encumbered, forfeited based on a court order, or forfeited for the purpose of a criminalinvestigation;

10. A Securities account holder whose Securities are registered in the Collective Depository is entitledto be present and/or to cast votes in the GMS in proportion to number of shares held in therespective securities account

11. The Custodian Banks or Securities Company shall submit the Securities account register and thenumber of the Company’s shares owned by each account holder at the said Custodian Bank andSecurities Company to the Depository and Settlement Institution, to be further furnished to theCompany by no later than one business day prior to the summon to the GMS.

12. Investment Managers shall be entitled to be present and cast votes in the GMS under theCompany’s shares administered in the Collective Depository at the Custodian Bank, whichconstitute a part of the Mutual Funds portfolio in the form of Collective Investment Contract and arenot administered in the Collective Depository at the Securities Depository and SettlementInstitution, provided that the respective Custodian Bank delivers the name of the InvestmentManagers to the Company by no later than one business day prior to the summon to the GMS.

13. The Company shall deliver dividends, bonus shares, or other shareholding-related entitlements withrespect to the shares administered in the Collective Depository to the Securities Depository andSettlement Institution, and subsequently the Securities Depository and Settlement Institution shalldeliver dividends, bonus shares or other entitlements to the Custodian Bank and SecuritiesCompany for the benefit of each of the account holder at the aforementioned Custodian Banks andSecurities Companies;

14. The Company shall deliver to the Custodian Bank the dividends, bonus shares, or othershareholding-related entitlements with respect to the shares administered in the CollectiveDepository at the Custodian Bank, which constitute a part of the Mutual Funds portfolio in the formof Collective Investment Contracts that are not included in the shares administered in the CollectiveDepository at the Securities Depository and Settlement Institution; and

15. The deadline to determine whether the holders of Securities accounts are entitled to receivedividends, bonus shares or other shareholding-related entitlements with respect to the ownership ofshares administered in the Collective Depository shall be determined by the GMS, provided that theCustodian Banks and Securities Companies shall submit the list of Securities account holders andthe number of the Company’s shares owned by the respective Securities account holder to theSecurities Depository and Settlement Institution, by no later than the date set out as the basis todetermine the shareholders entitled to receive dividends, bonus shares or other entitlements, to befurther furnished to the Company by no later than one business day following the date set out asthe basis to determine the shareholders entitled to receive dividends or other aforementionedentitlements.

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16. The provisions concerning Collective Depository are subject to the laws and regulations in theCapital Market and the regulations in the Stock Exchange in the jurisdiction of the Republic ofIndonesia where the Company's shares are listed.

SHAREHOLDER REGISTER AND SPECIAL SHAREHOLDER REGISTERArticle 9

1. Directors shall be obligated to create, save and maintain the Shareholder Register and SpecialRegister at the Company’s choice of forum for dispute resolution.

2. The Shareholder Register records the following:a. The names and addresses of the shareholders and/or the Depository and Settlement Institution

or other parties appointed by the account holder at the Depository and Settlement Institution;b. The amount, serial number and acquisition date of the shares owned by the shareholders;c. The amount paid for each share;d. The names and addresses of the persons or legal entities having right of pledge over shares or

those registered as the beneficiaries of fiduciary liens on shares and the acquisition date ofsuch right of pledge or the registration date of such fiduciary liens.

e. The description of payment of shares in other forms than cash;f. Other information deemed necessary by the Directors;

3. The special register records the description of share ownership by the members of the Directorsand the Board of Commissioners and their family in the Company and/or in other companies andthe acquisition date of such shares. Directors shall be obligated to save and maintain theShareholder Register and Special Register to the best of their abilities.

4. The Shareholders whose names are registered in the Company’s Shareholder Register or SpecialRegister shall inform any change of residence/address in a letter supported by a receipt to theDirectors. Prior to such notification, all letters, notices, summons or information to the Shareholdersshall be considered valid if addressed to the Shareholders’ last recorded address in theShareholder Register.

5. The Directors shall make the Shareholder Register and the Special Register available at theCompany’s office. Each Shareholder or its authorized representative may request to be presentedwith the Shareholder Register and Special Register during the Company's office hours.

6. The lawful shareholders of the Company shall have the right to exercise the rights vested to aShareholder by the prevailing laws and regulations, with due considerations to the provisions of thisArticles of Association.

7. Registration of more than one name for one share or transfer of share from one share to more thanone person shall be prohibited. With due consideration to the provisions of Article 5 paragraph 4 ofthis Articles of Association, the Company shall have the right to treat the shareholder whose nameis registered in the Company’s Shareholder Register as the sole lawful owner of such share(s).

8. The Directors may appoint and delegate the authorities to undertake the registration of shares inthe Shareholder Register and Special Shareholder Register to the Securities AdministrationBureau. Every registration or record in the Shareholder Register, including registration concerning asale, transfer, collateralization, pledge, or fiduciary liens concerning the Company’s shares or the

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rights or interests over shares shall be conducted in accordance with this Articles of Associationand the laws and regulation in the Capital Market.

TRANSFER OF RIGHT OVER SHARESArticle 10

1. a. Unless determined otherwise by the laws and regulations, particularly the regulations prevailingin the Capital Market and this Articles of Association, all transfers of right over shares shall beproven by a document signed by or on behalf of the Party (ies) transferring the right overshares and by or on behalf of the Party(ies) accepting the transfer of right over the respectiveshares. The document of transfer of right over shares must be prepared in the formatdetermined or approved by the Directors.

b. Transfer of Right over Shares that are administered in the Collective Depository shall beeffected by transfer from one Securities account to another Securities account at the SecuritiesDepository and Settlement Institution, Custodian Banks, and Securities Companies. Thedocument of transfer of right over shares shall be in the form as stipulated by and/or deemedacceptable by the Directors, provided by the document of transfer of right over shares that arelisted on the Stock Exchange shall comply with the prevailing regulations of the StockExchange where the Company’s shares are listed.

2. Transfer of right over shares that are contrary to the provisions of this Articles of Association or arecontrary to the prevailing laws and regulations, or are made without the approval from thecompetent authorities if required, shall not apply to the Company.

3. The Directors, at their own discretions and by providing the reasons thereof, may deny theregistration of transfer of right over shares in the Shareholder Register in the event that theprovisions set forth in this Articles of Association and the laws and regulations in the Capital Marketare not satisfied.

4. In the event that the Directors denies the registration of the aforementioned transfer of right overshares, the Directors shall deliver a notification of denial to the persons intending to effect thetransfer within 30 (thirty) calendar days following the receipt of the request for such registration bythe Directors, with due considerations to the prevailing laws and regulations, particularly theregulations in the Capital Market and the Stock Exchange regulations where the Company's sharesare listed.

5. In the event of a change of ownership of shares, the previous owner initially registered in theShareholders Register shall be considered as the owner of such shares until the name of the newowner of the shares is registered in the Company’s Shareholders Register, without prejudice to theprevailing laws and regulations and the regulations of the Capital Market and the Stock Exchangewhere the Company's shares are listed.

6. Any person receiving a transfer of right over shares due to the death of a shareholder or due to anyother reason which causes the ownership of the shares to change by law, may apply a writtenrequest to be registered as the shareholder of the said shares by submitting the evidence of theperson’s right to receive the transfer, as may be required from time to time by the Directors.Registration may be put into effect solely upon the Directors’ acceptance of the evidence of transferby the Directors, without prejudice to the provisions of this Articles of Association.

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7. The forms and procedures to transfer right over shares traded in the Capital Market shall complywith the laws and regulations in the Capital Market and the regulations of the Stock Exchangewhere such shares are listed.

8. Shareholders requesting the GMS to convene as defined in Article 11 paragraph 9 point (1) shall beprohibited from transferring their share ownerships for a minimum period of six months subsequentto the GMS, in the event that such request for the GMS to convene is satisfied by the Directors orthe Board of Commissioners or set out by the Court of Law.

GENERAL MEETING OF SHAREHOLDERSArticle 11

1. GMS consists of Annual GMS and other GMS (hereinafter referred to as the "Extraordinary GMS").

2. The Annual GMS shall convene within a period no later than six months after the closing of theCompany's fiscal year.

3. Extraordinary GMS may convene from time to time in accordance with the Company's needs.

4. The term GMS in this Articles of Association shall mean both the Annual GMS and ExtraordinaryGMS, unless expressly stated otherwise.

5. GMS with other agenda shall not be authorized to adopt a resolution.

6. The Directors shall hold the Annual General Meeting of Shareholders and Extraordinary GeneralMeeting of Shareholders upon request of the Company's Board of Commissioners or upon requestof the shareholders with due considerations to the provisions of paragraph 9 of this article, and therequest to hold a GMS by the Board of Commissioners shall be submitted to the Directors byregistered mail and shall be supported with the reasons thereof.

7. During the Annual GMS, the Directors shall present:a. The Annual Report referred to in Article 21 paragraph 3 of this Articles of Association, which

has been reviewed by the Board of Commissioners.b. Proposal on the appropriation of net profit, in the event that the Company has positive retained

earnings;c. Proposal on the appointment of Public Accountant registered in the OJK. Other than the

agenda referred to in letter a, b and c of this paragraph, the Annual GMS may discuss otheragenda provided such agenda is allowed based on this Articles of Association and theprevailing laws and regulations.

8. The approval of the annual report by the Annual GMS shall constitute the full release and dischargeof the members of the Directors and the members of the Board of Commissioners for themanagement and supervision undertaken during the previous fiscal year, to the extent that suchactions are reflected in the said annual report, with the exception of embezzlement, fraud and othercriminal acts.

9. Request for the GMS to Convene by Shareholder(s):(1) One shareholder or more who jointly represents 1/10 (one tenth) or more of the total shares

with voting rights, may request the GMS to convene.

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(2) The request for the GMS to convene referred to in point (1) of this article shall be submittedto the Directors with registered mail supported with the reasons thereof.

(3) The request for the GMS to convene referred to in point (1) of this paragraph shall:a. be made in good faith;b. be made in consideration the Company's interests;c. constitute a request that require the resolutions of the GMS;d. be supported by the reasons and the relevant materials that require the resolutions of the

GMS; ande. not be contrary to the prevailing laws and regulations and the Company’s Articles of

Association.(4) The Directors shall announce the GMS to the shareholders by no later than 15 (fifteen) days

commencing on the date of request for the GMS to convene referred to in point (1) of thisparagraph is received by the Directors.

(5) In the event that the Directors fails to announce the GMS referred to in point (4) of thisparagraph, the shareholders may re-apply the request for the GMS to convene to the Boardof Commissioners.

(6) The Board of Commissioners shall announce the GMS to the shareholders by no later than15 (fifteen) days commencing on the date of request for the GMS to convene referred to inpoint (5) of this paragraph is received by the Board of Commissioners.

(7) In the event that the Directors or the Board of Commissioners fails to announce the GMSduring the period set forth in point (4) of this paragraph and point (6) of this paragraph, theDirectors or the Board of Commissioners shall be obligated to announce that:a. There has been a request from the shareholder for the GMS to convene as referred to in

point (1) of this paragraph;b. The reasons for not convening such GMS.

(8) The announcement referred to in point (7) of this paragraph shall be made by no later than 15(fifteen) days commencing on the date of request for the GMS to convene referred to in point(4) of this paragraph and paragraph (6) of this article is received.

(9) Such announcement referred to in point (7) of this paragraph shall be made in at least:a. one newspapers published in the Indonesian language with national circulation;b. the Stock Exchange’s website; andc. the Company’s website in the Indonesian and foreign language, provided that the foreign

language used shall be the English language, at the minimum.(10) The announcement in foreign language referred to in point (9) letter c of this paragraph must

contain the same information with the information contained in the announcement in theIndonesian Language.

(11) In the event of any difference in interpretation of information announced in the foreignlanguage and that announced in the Indonesian Language as referred to in point (10) of thisparagraph, the information in the Indonesian Language shall prevail.

(12) Proof of announcement referred to in point (9) letter a of this paragraph and a copy of theletter requesting the GMS to convene referred to in point (2) of this paragraph must besubmitted to the OJK by no later than two business days following such announcement.

(13) In the event that the Board of Commissioners fails to announce the GMS referred to in point(6) of this article, the Shareholders referred to in point (1) of this article may file the requestfor the GMS to convene to the head of district court which jurisdiction encompasses theCompany’s choice of forum for dispute resolution, to issue a ruling granting the permission forthe GMS to convene.

(14) Shareholders having obtained the ruling granting the permission for the GMS to convenereferred to in point (13) of this paragraph shall be obligated to:

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a. Issue the announcement, summon to the GMS, announcement of the GMS agenda, withrespect to the GMS convening in accordance with this Financial Services AuthorityRegulation.

b. Issue notification for the GMS to convene and submit the proof of announcement, proof ofsummons, GMS agenda, and proof of announcement of GMS agenda with respect to theGMS convening in accordance with the OJK Regulations to the OJK.

c. Submit the document containing the name of shareholders who have obtained the courtruling to convene a GMS and their respective shareholdings in the Company and the courtruling along with the notification referred to in letter b to the OJK with respect to the plan toconvene such GMS.

(15) The shareholders referred to in point (1) of this paragraph are prohibited from transferringtheir shares as set out in Article 10 paragraph 8.

VENUE, NOTICE, ANNOUNCEMENT, SUMMON AND TIMING OF THEGENERAL MEETING OF SHAREHOLDERS

Article 12

1. The GMS shall convene within the jurisdiction of the Republic of Indonesia.

2. The Company shall determine the venue and time of the GMS.

3. The venue of the GMS referred to in paragraph 2 shall be:a. the Company's choice of forum for dispute resolution;b. the location where the Company carries out its main business activities;c. the capital of the province of the Company's choice of forum for dispute resolution or where the

Company's main business activities take place; ord. the province which is the choice of forum for dispute resolution of the Stock Exchange where

the Company's shares are listed.

4. Notification of GMS to the OJK:(1) The Company shall first notify the meeting agenda to the OJK by no later than five business

days prior to the announcement of the GMS, without considering the GMS announcement date.(2) Meeting agenda referred to in point (1) of this article must be clearly disclosed in detail.(3) In the event of changes to the meeting agenda referred to in point (2) of this paragraph, the

Company shall be obligated to submit such change of meeting agenda to the OJK by no laterthan the summon to the GMS.

5. The provisions of paragraph 4 of this article shall apply, mutatis mutandis, to the announcement ofGMS convening due to the request of shareholders who have obtained the court ruling granting thepermission for the GMS to convene referred to in Article 11.9.(14).

6. Announcement of GMS:(1) The Announcement of GMS shall be made by no later than 14 (fourteen) days prior to the

summon to the GMS, excluding the date of the announcement and the date of the summon.(2) Such announcement referred to in point (1) of this paragraph shall, at the minimum, contain the

following:a. Provisions concerning the Shareholders eligible to attend the GMS;b. Provisions concerning the Shareholders eligible to propose the meeting agenda;c. The date of the GMS; andd. The date of the summon to the GMS;

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(3) In the event of a GMS convening upon request of the shareholders referred to in Article 11paragraph 9, the announcement of the GMS referred to in point (1) of this paragraph shallinclude the information that the Company is holding the GMS upon request of the shareholders,in addition to the matters stated in point (2) of this paragraph.

(4) The announcement of the GMS to the shareholders referred to in point (1) of this paragraphshall be made, at the minimum, in following:a. one newspapers published in the Indonesian language with national circulation;b. the Stock Exchange’s website; andc. the Company’s website in the Indonesian and foreign language, provided that the foreign

language used shall be the English language, at the minimum.(5) The announcement of the GMS in foreign language referred to in point (4) letter c of this

paragraph must contain the same information with the information contained in theannouncement of the GMS in the Indonesian Language.

(6) In the event of any difference in interpretation of information announced in the foreign languageand that announced in the Indonesian Language as referred to in point (5) of this paragraph,the information in the Indonesian Language shall be used as a reference.

(7) Proof of the GMS announcement referred to in point (4).a of this paragraph shall be submittedto the OJK by no later than two business days subsequent to the GMS Announcement.

(8) In the event of a GMS convening upon request of the shareholders, the submission of proof ofthe GMS announcement referred to in point (&) of this paragraph shall be supported by a copyof letter of request for the GMS to convene as referred to in Article 11.9.(2).

(9) Announcement of and Summon to the GMS to resolve matters with conflict of interest shall bemade in accordance with the Capital Market Regulations.

7. The provisions of paragraph 6 of this article shall apply, mutatis mutandis, to the announcement ofthe GMS convening due to the request of shareholders who have obtained the court ruling grantingthe permission for the GMS to convene referred to in Article 11.9.(14).

8. Proposal of the Meeting Agenda:(1) The shareholders may propose the meeting agenda in writing to the Directors by no later than

seven days prior to the summon to the GMS.(2) The shareholders eligible to propose the meeting agenda referred to in point (1) of this article is

one or more shareholders, who jointly represents 1/20 (one twentieth) of the total shares withvalid voting rights, unless the Company's Articles of Association stipulates a lower amount.

(3) The proposal of meeting agenda referred to in point (1) of this paragraph shall:a. be made in good faith;b. be made in consideration the Company's interests;c. Be supported by the reasons and materials for the proposed meeting agenda;d. not be contrary to the prevailing laws and regulations.

(4) Proposal of meeting agenda submitted by the shareholders referred to in point (1) of thisparagraph shall be a meeting agenda that require the resolutions of the GMS.

(5) The Company shall be obligated to state the meeting agenda proposed by the shareholdersreferred to in point (1) of this article up to point (4) of this article in the meeting agenda stated inthe summon.

9. Summon to the GMS:(1) The Company shall issue the summon to GMS to the shareholders by no later than 21 (twenty

one) calendar days prior to the GMS, excluding the date of the summon and the date of theGMS.

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(2) The summon to the GMS referred to in point (1) of this paragraph shall, at the minimum,contain the following information:a. The date of the GMS;b. The time of the GMS;c. The venue of the GMS;d. Provisions concerning the Shareholders eligible to attend the GMS;e. Meeting agenda, including elucidation of each meeting agenda; andf. Information stating that the material for the meeting agenda shall be available to

Shareholders from the date of summon to the GMS until the time of the GMS.(3) The summon of the GMS to the shareholders referred to in point (1) of this paragraph shall be

made, at the minimum, in the following:a. one newspapers published in the Indonesian language with national circulation;b. the Stock Exchange’s website; andc. the Company’s website in the Indonesian and foreign language, provided that the foreign

language used shall be the English language, at the minimum.(4) The summon to the GMS in foreign language referred to in point (3) letter c of this paragraph

must contain the same information with the information contained in the summon to the GMS inthe Indonesian Language.

(5) In the event of any difference in interpretation of information announced in the foreign languageand that announced in the Indonesian Language as referred to in point (4) of this paragraph,the information in the Indonesian Language shall be used as a reference.

(6) Proof of the summon to the GMS referred to in point (3) letter a of this paragraph shall besubmitted to the OJK by no later than two business days subsequent to the summon to theGMS.

(7) Without prejudice to other provisions in this Articles of Association, the Summon shall be issuedby the Directors or the Board of Commissioners in accordance with the procedures set out inthis Articles of Association, with due considerations to the Capital Market Regulations.

10. The provisions of paragraph 9 of this Article shall apply, mutatis mutandis, to the announcement ofGMS convening due to the request of shareholders who have obtained the court ruling granting thepermission for the GMS to convene referred to in Article 11 paragraph 9 number (14).

11. Summon to the second GMS shall be made in accordance with the following provisions:(1) Summon to the second GMS shall be made by no later than seven days prior to the day the

second GMS convenes.(2) The summon to the second GMS shall state that the first GMS has convened and failed to

achieve quorum of attendance. The provision shall apply without prejudice to the CapitalMarket regulations and other laws and regulations and the regulations of the Stock Exchangewhere the Company’s shares are listed.

(3) The second GMS shall convene within 10 days at the earliest and 21 days at the latestfollowing the first GMS.

(4) The provisions concerning the media used for the summon and the correction of the summonto the GMS referred to in point (3) paragraph 9 up to point (6) paragraph 9 of this article shallapply, mutatis mutandis, to the summon to the second GMS.

12. Summon to the third GMS shall be made in accordance with the following provisions:(1) Summon to the third GMS upon request of the Company shall be set out by the OJK;(2) The summon to the third GMS shall state that the second GMS has convened and failed to

achieve quorum of attendance.

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13. Material of the Meeting Agenda:(1) The Company shall be obligated to provide the material of meeting agenda to the shareholders.(2) The material of meeting agenda referred to in point (1) of this paragraph shall be available from

the date of summon to the GMS until the date of the GMS.(3) In the event that other laws and regulations stipulates the obligation to provide the material of

meeting agenda from a period earlier than that stipulated in the preceding provision of point (2)of this article, the material of meeting agenda referred to above shall be provided in accordancewith the provisions of the said other laws and regulations.

(4) The material of meeting agenda referred to in point (2) of this article may be made available inthe form of physical documents and/or electronic copies.

(5) Copies of physical documents referred to in point (4) of this paragraph shall be provided free ofcharge by the Company upon written request of the shareholders.

(6) Copies of electronic documents referred to in point (4) of this paragraph shall be available foraccess or download in the Company's website.

(7) In the event that the meeting agenda involves the appointment of members of the Directorsand/or members of the Board of Commissioners, the curricula vitae of the prospectivemembers of the Directors and/or Board of Commissioners shall be made available:a. In the Company's website, at the minimum from the time of the summon until the date of the

GMS; orb. In any other time other than the period referred to in letter a but no later than the date of the

GMS, provided it is governed by the laws and regulations.

14. Correction of Summon:(1) The Company shall be obligated to issue a correction of summon to the GMS in the event of

any change of information in the issued summon of the GMS referred to in paragraph 9 point(2) of this Article.

(2) In the event that the correction of summon to the GMS referred to in point (1) of this articlecontains information concerning the date of the GMS and/or addition of the GMS meetingagenda, the Company shall be obligated to re-issue the summon to the GMS in the manneraccording to the procedures of summon set out in paragraph 9 of this Article.

(3) The provisions concerning the obligation to re-issue the summon to the GMS referred to inpoint (2) of this paragraph shall not apply in the event that the correction of summon to theGMS concerning the change in the date of the GMS and/or addition to the GMS meetingagenda occurs through no fault of the Company.

(4) The proof of correction of summon issued through no fault of the Company referred to in point(3) of this paragraph shall be submitted to the OJK on the same day of the re-issuance of thesummon.

(5) Provisions concerning the media used for and proof of the summon to the GMS referred to inpoint paragraph 9 point (3) and paragraph 6 point (7) of this Article shall apply, mutatismutandis, to the summon to the media used for and proof of the re-issuance of summon to theGMS referred to in point (1) of this paragraph.

15. Rights of the Shareholders:(1) The shareholders, whether by himself/herself or represented based on a power of attorney,

shall have the right to attend the GMS.(2) A shareholder may be represented by other Shareholder or third party based on a power of

attorney, with due considerations to the prevailing laws and regulations.(3) Each share shall provide the holder with the right to cast one vote in a GMS.

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(4) The shareholders authorized to attend the GMS are the shareholders whose names areregistered in the Company's Shareholder Register at one day prior to the date of summon tothe GMS

(5) In the event of correction of summon to the GMS referred to in paragraph 14 point (1) of thisArticle, the shareholders authorized to attend the GMS are the shareholders whose names areregistered in the Company's Shareholder Register at one day prior to the date of correction ofthe summon to the GMS

16. During the GMS, the shareholders shall have the right to obtain information concerning the meetingagenda and the materials related to the said meeting agenda provided they are not in contrary tothe Company’s interests.

17. During the GMS, the Company may invite other parties in relation to the GMS agenda.

CHAIRMAN AND PROCEDURES OF THE GENERAL MEETING OF SHAREHOLDERSArticle 13

1. Chairman of the GMS:(1) The GMS shall be chaired by a member of the Board of Commissioners appointed by the

Board of Commissioners.(2) In the event that all members of the Board of Commissioners are unavailable or are prevented

from attending the GMS, the GMS shall be chaired by a member of the Directors appointed bythe Directors.

(3) In the event that all members of the Board of Commissioners or members of the Directors areunavailable or are prevented from attending the GMS as set out in point (1) of this paragraphand point (2) of this paragraph, the GMS shall be chaired by the shareholders present in theGMS, who is appointed from and by the participants of the GMS.

(4) In the event that the member of the Board of Commissioner appointed by the Board ofCommissioners to chair the GMS has a conflict of interest with regard to any of the agenda tobe resolved in the GMS, the GMS shall be chaired by another member of the Board ofCommissioners who does not have such conflict of interest, appointed by the Board ofCommissioners

(5) In the event that all members of the Board of Commissioners have a conflict of interest, theGMS shall be chaired by a member of the Directors appointed by the Directors.

(6) In the event that the member of the Directors appointed by the Directors to chair the GMS hasa conflict of interest with regard to the agenda to be resolved in the GMS, the GMS shall bechaired by a member of the Directors who has no conflict of interest.

(7) In the event that all members of the Directors have a conflict of interest, the GMS shall bechaired by a non-controlling shareholder appointed by the majority of shareholders attendingthe GMS.

(8) The Chairman of the GMS shall have the right to request those present to prove that they areauthorized to attend the Meeting.

2. Procedures of the GMS:(1) During the GMS, the procedures of the GMS shall be distributed to the shareholders present.(2) The main points of the procedures of the GMS referred to in point (1) of this paragraph shall be

read before the GMS commences.(3) On the opening of the GMS, the Chairman of the GMS shall, at the minimum, present to the

shareholders an explanation concerning the following:a. The Company’s general condition in brief;

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b. meeting agenda;c. The mechanisms to adopt a resolution with regard to the meeting agenda; andd. The procedures to exercise the rights of the shareholders to raise questions and/or

opinions.

RESOLUTIONS, QUORUM OF ATTENDANCE, QUORUM OF RESOLUTIONS INTHE GENERAL MEETING OF SHAREHOLDERS AND

MINUTES OF THE GENERAL MEETING OF SHAREHOLDERSArticle 14

1. Resolutions of the GMS:(1) Resolutions of the GMS shall be adopted by way of amicable discussions, and in compliance

with the provisions of this Articles of Association.(2) In the event of failure to adopt resolutions by way of amicable discussions referred to in

paragraph (1), such resolutions shall be adopted by way of voting.(3) Adoption of resolutions by way of voting referred to in paragraph (2) shall be conducted with

due considerations to the provisions concerning the quorum of attendance and quorum ofresolutions of the GMS.

2. Quorum of Attendance and Quorum of Resolutions of the GMS:(1) Unless otherwise set out in this Articles of Association, quorum of attendance and quorum of

resolutions in the GMS for meeting agenda requiring the resolutions of the GMS (includingissuance of Equity Securities) shall be subject to the following provisions:a. A GMS may convene if more than 1/2 (one half) of the total shares with voting rights are

present or represented in the GMS, unless the Laws and/or the Company's Articles ofAssociation stipulate a higher quorum.

b. In the event that the quorum referred to in letter a cannot be achieved, a second GMSmay convene, provided that the second GMS shall be valid and authorized to adoptresolutions if at least 1/3 (one third) of the total shares with voting rights are present orrepresented in the GMS, except in the event that the Company’s Articles of Associationdetermine a higher quorum.

c. The GMS resolution referred to in letter a and letter b shall be valid if approved by morethan 1/2 (one half) of the total shares with valid voting rights that are present at the GMS,unless the Laws and/or the Company's Articles of Association stipulate that a resolutionshall be valid if approved by higher number of votes in favor.

d. In the event of failure to achieve quorum in the second GMS referred to in point (1) letter bof this article, the third GMS may convene provided that the third GMS shall be valid andauthorized to adopt resolutions if such GMS is attended by the shareholders with validvoting rights in accordance with the quorum of attendance and the quorum of resolutionsdetermined by the OJK at the request of the Company.

(2) The quorum of attendance and quorum of resolutions of GMS convening with the agendaconcerning the amendment to the Company's Articles of Association (excluding amendment toArticles of Association for the issuance of Equity Securities), except for the amendment to theCompany’s Articles of Association in order to extend the duration of establishment of theCompany, shall be in accordance with the following provisions:a. The GMS may convene provided that the GMS is attended by the Shareholders

representing at least 2/3 (two-third) of the total shares with valid voting rights.b. Resolutions of the GMS referred to in letter a shall be valid if approved by more than 2/3

(two-third) of the total shares with valid voting rights that are present in the GMS.

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c. In the event of failure to achieve the quorum referred to in letter a, a second GMS mayconvene provided that the second GMS shall be valid and authorized to adopt resolutionsif such GMS is attended by the shareholders representing at least 3/5 (three-fifth) of thetotal shares with valid voting.

d. Resolutions of the second GMS shall be valid if approved by more than 1/2 (one half) ofthe total shares with valid voting rights that are present in the GMS.

e. In the event of failure to achieve quorum in the second GMS referred to in letter c, thethird GMS may convene provided that the third GMS shall be valid and authorized toadopt resolutions if such GMS is attended by the shareholders with valid voting rights inaccordance with the quorum of attendance and the quorum of resolutions determined bythe Financial Services Authority at the request of the Company.

(3) The quorum of attendance and quorum of resolutions of a GMS with the agenda to transfermore than 50.0% of the Company's net assets in one or more transactions, whether or not suchtransactions are related to one another, to encumber the Company's assets representing morethan 50.0% of the Company's net assets in one transaction or more, whether or not suchtransactions are related to one another, to effect a merger, amalgamation, acquisition, spin-off,to file a petition of bankruptcy for the Company, to extend the duration of establishment of theCompany, and dissolution of the Company, shall be in accordance with the followingprovisions:a. The GMS may convene provided that the GMS is attended by the Shareholders

representing at least 3/4 (three quarter) of the total shares with valid voting rights.b. Resolutions of the GMS referred to in letter a shall be valid if approved by more than 3/4

(three quarter) of the total shares with valid voting rights that are present in the GMS.c. In the event of failure to achieve the quorum referred to in letter a, a second GMS may

convene provided that the second GMS shall be valid and authorized to adopt resolutions ifsuch GMS is attended by the shareholders representing at least 2/3 (two-third) of the totalshares with valid voting.

d. Resolutions of the second GMS shall be valid if approved by more than 3/4 (three quarter)of the total shares with valid voting rights that are present in the GMS.

e. In the event of failure to achieve quorum in the second GMS referred to in letter c, the thirdGMS may convene provided that the third GMS shall be valid and authorized to adoptresolutions if such GMS is attended by the shareholders with valid voting rights inaccordance with the quorum of attendance and the quorum of resolutions determined bythe OJK at the request of the Company.

(4) The quorum of attendance and quorum of resolutions of the GMS with the agenda concerningtransactions with conflict of interest shall be in accordance with the following provisions:a. The GMS may convene provided that the GMS is attended by the Independent

Shareholders representing at least 1/2 (three quarter) of the total shares with valid votingrights owned by the Independent Shareholders.

b. The GMS may convene provided that the GMS is attended by the IndependentShareholders representing at least 1/2 (one half) of the total shares with valid voting rightsowned by the Independent Shareholders.

c. In the event of failure to achieve the quorum referred to in letter a, a second GMS mayconvene provided that the second GMS shall be valid and authorized to adopt resolutions ifsuch GMS is attended by the Independent shareholders representing at least 1/2 (one half)of the total shares with valid voting rights owned by the Independent Shareholders.

d. Resolutions of the second GMS shall be valid if approved by more than 1/2 (one half) of thetotal shares owned by the Independent Shareholders who are present in the GMS.

e. In the event of failure to achieve quorum in the second GMS referred to in letter c, the thirdGMS may convene provided that the third GMS shall be valid and authorized to adopt

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resolutions if such GMS is attended by the Independent Shareholders with valid votingrights in accordance with the quorum of attendance determined by the OJK at the requestof the Company.

f. Resolutions of the third GMS shall be valid if approved by the Independent Shareholdersrepresenting more than 50.0% shares owned by the Independent Shareholders who arepresent.

g. Shareholders having conflict of interests shall be considered to have rendered the samedecision as that approved by the Independent Shareholders without any conflict ofinterests;

(5) The shareholder of shares with valid voting rights who are present in a GMS but abstained(cast no vote) shall be considered to have casted the same vote with that of the majorityshareholders who cast their votes.

(6) In the event of voting, the votes cast by a shareholder shall apply for all shares owned by suchshareholder and the shareholder shall have no right to authorize to cast a different vote to morethan one proxy for a portion of the shares owned by such shareholder.

(7) The provisions referred to in point (7) of this paragraph shall not apply to:a. Custodian Banks or Securities Companies acting as Custodians representing their

customers who are the shareholders of the Company.b. Investment Managers representing the interest of Mutual Fund under their management.

(8) In the event of voting, members of the Directors, members of the Board of Commissioners andemployees of the respective company are prohibited from acting as the representatives of theShareholders.

(9) Voting shall be conducted verbally, unless the Chairman determines otherwise.

3. Minutes of the GMS:(1) The Company shall prepare the minutes of the GMS(2) The Minutes of GMS must be prepared and signed by the chairman of the meeting and by at

least one shareholder appointed from and by the participants of the GMS.(3) The signature referred to in point (2) of this article shall not be required if the minutes of the

GMS is prepared in the form of deed of minutes of the GMS prepared by a notary.(4) The Minutes of the GMS referred to in point (1) of this paragraph shall be submitted to the OJK

by no later than 30 (two) business days subsequent to the GMS.(5) In the event of submission deadline of the minutes of the GMS referred to in point (4) of this

article falls on a holiday, the said minutes of GMS shall be submitted by no later than the nextbusiness days.

4. Summary of Minutes of the GMS:

(1) The Company shall prepare the Summary of Minutes of the GMS.(2) The Summary of Minutes of the GMS referred to in point (1) of this article shall at least contain

the following information:a. date of the GMS, venue of the GMS, time of the GMS, and agenda of the GMS;b. Members of the Directors and Board of Commissioners who are present in the GMS;c. Total shares with valid voting rights that are present in the GMS and the percentage to

total shares with valid voting rights;d. whether or not the opportunities for shareholders to raise questions and/or present their

opinions concerning the meeting agenda are granted;e. Total shareholders raising questions and/or presenting opinions concerning the meeting

agenda, if such opportunities are provided;f. Mechanism for the adoption of GMS resolutions;

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g. Voting results, which include the total votes in favor, not in favor, and abstained (notcasting any vote) for each meeting agenda, if the resolutions are adopted by way of voting;

h. GMS resolutions; andi. The execution of payment of cash dividends to eligible shareholders, in the event of GMS

resolution concerning distribution of cash dividends.(3) The Summary of Minutes of the GMS referred to in point (2) of this article shall be announced

to the public in, at the minimum:a. one newspapers published in the Indonesian language with national circulation;b. the Stock Exchange’s website; andc. the Company’s website in the Indonesian and foreign language, provided that the foreign

language used shall be the English language, at the minimum.(4) The Summary of Minutes of the GMS in foreign language referred to in point (3) letter c of this

paragraph must contain the same information with the information contained in the summary ofminutes of the GMS in the Indonesian Language.

(5) In the event of any difference in interpretation of information in the summary of minutes of theGMS in the foreign language and the summary of minutes of the GMS in the IndonesianLanguage referred to in point (4) of this paragraph, the information in the Indonesian Languageshall be used as a reference.

(6) The announcement of summary of minutes of the GMS referred to in point (3) of this paragraphshall be issued to the public by no later than two business days subsequent to the GMS.

(7) Proof of the announcement of summary of minutes of the GMS referred to in point (3) letter a ofthis paragraph shall be submitted to the OJK by no later than two business days subsequent tothe said announcement.

(8) The provisions of paragraph 3 point (4), paragraph 3 point (5) and paragraph 4 point (3),paragraph 4 point (6), paragraph 4 point (7), and paragraph 6 shall apply, mutatis mutandis, for:a. The submission of minutes of the GMS and the announced summary of minutes of GMS to

the OJK; andb. Announcement of summary of minutes of GMS of the GMS convening due to the request of

shareholders who have obtained the court ruling granting the permission for the GMS toconvene referred to in Article 11 paragraph 9 point (14).

DIRECTORS:Article 15

1. The Company is managed and led by the Directors;

2. The Directors shall consist of three members, at the minimum, consisting of: one President Director; one Vice President Director or more; one or more Directors;with due considerations to the prevailing regulations in the Capital Market.

3. The persons eligible to be appointed as members of the Directors are individuals that satisfy thefollowing the following requirements at the time of appointment and during their term of office:(1) Possess good character, moral, and integrity.(2) Competent to conduct legal acts.(3) Within five years prior to and during his/her appointment:

a. has never been declared bankrupt;b. has never become a member of the Directors and/or a member of the Board of

Commissioner found guilty for causing a company to be declared bankrupt;

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c. has never been convicted for any criminal acts that inflict financial losses to the stateand/or criminal acts related to the financial sector;

(4) has never become a member of the Directors and/or a member of the Board of Commissionerswho, during his/her terms of office:

a. neglected to convene the annual GMS;b. in reporting his/her accountability as a member of the Directors and/or a member of the Board

of Commissioners has been rejected by the GMS or has failed to report his/her accountabilityas a member of the Directors and/or a member of the Directors to the GMS; and

c. has caused a company that has obtained the license, approval or registration from theFinancial Services Authority fail to meet its obligation to submit its annual report and/or financialstatements to the OJK.

(5) Has the commitment to comply with the laws and regulations; and(6) Has the knowledge and/or expertise in the fields required by the Company

4. In addition to the requirements referred to in paragraph 3, the requirement of members of theDirectors shall comply with the provisions of:a. The Capital Market Lawb. The laws and regulations in the Capital Market; andc. The laws and regulations applicable to the Company's business activities.

5. The satisfaction of requirements referred to in paragraph 3 and paragraph 4 of this Article shall beincluded in a representation letter and submitted to the Company.

6. The representation letter referred to in paragraph 5 of this Article shall be examined anddocumented by the Company.

7. The satisfaction of requirements referred to in this Article shall be proven by the said letter kept insafekeeping by the Company.

8. The appointment of any member of the Directors who fails to satisfy the requirements set forth inparagraph 3 and paragraph 4 of this Article shall be null and void by law, commencing from the timesuch failure to satisfy the aforementioned requirements become known to other members of theDirectors or Board of Commissioners Within a period of no longer than seven calendar days sincesuch fact become known, other members of the Directors or Board of Commissioners shallannounce the annulment of appointment of the concerned member of the Directors in at least oneNewspaper and notify the Minister of Law and Human Rights and/or its replacement about suchannulment to be recorded in the Company Register.

9. The Company shall convene a GMS to replace members of the Directors who fail to satisfy therequirements set forth in paragraph 3 and 4.

10. Proposals for the appointment, discharge, and/or replacement of members of the Directorssubmitted to the GMS shall duly consider the recommendations from the Board of Commissionersor the committee undertaking the nomination function.

11. Members of the Directors shall be appointed and discharged by the GMS, the appointment of whichshall be effective on the date stipulated by the GMS appointing such members and shall expireafter one term of office of the members of the Directors, which shall be five years or until the closingof the Annual GMS at the end of one term of office referred to above. Therefore, the term of officeof the members of the Directors shall be no longer than five years, without prejudice to the rights of

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the GMS to discharge the members of the Directors at any time prior to the end of their term ofoffice, with due considerations to the provisions of this Articles of Association.

12. Members of the Directors whose term of office has ended may be reappointed based on theresolution of the GMS.

13. a. The GMS may discharge members of the Directors from time to time by stating the reasonsthereof.

b. The reasons to discharge the members of the Directors referred to in this Article shall be ifthe concerned member of the Directors no longer satisfies the criteria as members of theDirectors, among others, committing any acts that inflict losses to the Company or any otherreasons as deemed appropriate by the GMS.

c. The resolution to discharge the concerned member of the Directors shall be adopted aftersuch concerned member is given the opportunities to present his/her defense in the GMS.

d. The opportunity to present such defense shall not be required if the concerned member hasno objection to such discharge.

e. The discharge of members of the Directors shall be effective upon closing of the GMSreferred to in point a of this article or any other date stipulated in the GMS resolution.

14. a. A member of the Directors shall have the right to resign from his/her position prior to the endof his/her term of office by submitting a written notice concerning his/her intention to resign tothe Company.

b. The Company shall convene a GMS to resolve the request for resignation of the concernedmember of the Directors within a period of no longer than 90 (ninety) days following thereceipt of such request for resignation.

c. The Company shall disclose to the public and report to the OJK by no later than two businessdays following the receipt of such request for resignation of the member of the Directorsreferred to in point a of this paragraph and the results of the GMS referred to in point b of thisarticle.

d. In the event that the Company fails to convene a GMS within the period set forth in point b ofthis article, then, with the elapse of such period, the resignation of the member of theDirectors shall become effective without requiring the approval of the GMS, with dueconsiderations to point g of this article.

e. Before such resignation is effective, the concerned member of the Directors shall remainobligated to carry out his/her duties and responsibilities in accordance with this Articles ofAssociation and the prevailing laws and regulations.

f. The resigned member of the Directors referred to above may be requested to present his/heraccountability as a member of the Directors from the appointment date of such member untilthe approval of his/her resignation in the GMS.

g. The full release and discharge of the resigned member of the Directors shall be granted afterthe Annual GMS granted such full release and discharge.

h. In the event that the resignation of the member of the Directors results in the number of themember of the Directors to be less than two persons, the said resignation shall be valid uponapproval of the GMS and new members of the Directors have been appointed so that theminimum requirement of the total members of the Directors is satisfied.

15. a. Members of the Directors may be temporarily discharged at any time by the Board ofCommissioners by stating the reasons thereof.

b. The temporary discharge referred to in point a shall be informed to the concerned member ofthe Directors in writing.

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c. In the event that a member of the Directors is temporarily discharged by the Board ofCommissioners, the Board of Commissioners shall immediately convene a GMS to affirm orrevoke the decision to temporarily discharge such member.

d. The GMS referred to in point c of this article shall convene by no later than 90 (ninety)calendar days subsequent to the date of such temporary discharge.

e. With the elapse of the period to convene a GMS referred to in point d of this article or in theevent that the GMS fails to adopt a resolution, the temporary discharge referred to in point aof this article shall be null and void.

f. In the GMS referred to in point c of this article, the concerned member of the Directors shallbe given the opportunity to present his/her defense.

g. The member of the Directors temporarily discharged referred to in point a of this paragraphshall not be authorized to:i. undertake the management of the Company for the interest of the Company and in

accordance with the aims and objectives of the Company; andii. represent the Company in and outside of the court of law;

h. The limitation of authorities referred to in point g of this paragraph shall be effective from thedecision of such temporary discharge is made by the Board of Commissioners until:i. A GMS resolution to affirm or revoke the temporary discharge referred to in point c of this

paragraph is available; orii. with the elapse of time as set out in point d of this paragraph.

i. In the event that the GMS affirms the temporary discharge decision, the concerned memberof the Directors shall be permanently discharged.

j. If the temporarily discharged member of the Directors is not present in the GMS, suchtemporarily discharged member of the Directors shall be considered to waive his/her right topresent his/her defense in the GMS, and therefore the temporarily discharged member of theDirectors shall be deemed to have accepted the resolution of the GMS.

k. The Company shall disclose the following matters to the public and report such matters to theOJK:i. The decision of such temporary discharge; andii. The results of the GMS referred to in paragraph 10 letter c of this Article or information

concerning the revocation of such temporary discharge by the Board of Commissionersdue to failure to convene a GMS after the period referred to in paragraph 10 letter e ofthis Article has elapsed;

16. The GMS may:- Appoint another person to fill the position of a member of the Directors discharged from his/her

office; or- Appoint another person to fill the position of a member of the Directors who resigned from

his/her office; or- Appoint another person as a member of the Directors to fill in a vacancy; or- Add the number of new Directors.The term of office of the person appointed to replace a discharged member of the Directors or aresigning member of the Directors or to fill in a vacancy shall be equal to the remaining terms ofoffice of the post such member so discharged/replaced and the terms of office for the additionalnew member(s) of the Directors shall be equal to the remaining term of the remaining members ofDirectors, unless the GMS determines otherwise.

17. The terms of office of members of the Directors shall cease automatically, if such member:a. is declared bankrupt or under guardianship pursuant to a court order; orb. is no longer qualified pursuant to the prevailing laws and regulations; or

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c. is deceased; ord. is discharged pursuant to a resolution of the GMS.

18. Salaries, service allowances, and other remunerations granted to the members of Directors (if any)shall be determined by the GMS and the authority in respect of the foregoing may be delegated bythe GMS to the Board of Commissioners.

19. In the event that the position of a member of the Directors is vacant for any reasons whatsoever,thereby causing the number of members of the Directors to be less than two persons as defined inparagraph 2 of this Article, a GMS shall convene to fill in the vacancy by no later than 90 (ninety)calendar days following the vacancy, with due considerations to the prevailing laws and regulationsin the Capital Market.

20. In the event that the position of the President Director is vacant and for as long as the replacementhas not been appointed or has not assumed his/her position, then, the Vice President Directorappointed by the Directors Meeting shall carry out the President Director's obligation and shall haveequal authority and responsibilities as the President Director. In the event that the position of allmembers of the Directors are vacant, the provisions of Article 19 paragraph 6 of this Articles ofAssociation shall apply.

21. Members of the Directors are permitted to hold the following dual positions, provided that:a. Such dual position is not contrary to the prevailing laws and regulations.b. Such member hold the dual position as member of the Directors in more than one Issuer or

Public Company.c. Such member hold the dual position as member of the Board of Commissioners in more than

three Issuers or Public Companies.d. Such member hold the dual position as Member of Committees in no more than five

committees in the Public Companies where the concerned member also serves as a memberof the Directors or member of the Board of Commissioners.

22. Every member of the Directors shall be prohibited from earning personal gains, whether directly orindirectly, from the Company's activities other than the lawful income.

DUTIES AND RESPONSIBILITIES OF THE DIRECTORSArticle 16

1. The Directors shall undertake and shall be responsible for the management of the Company for theCompany's interest in accordance with Company's aims and objectives set forth in the Articles ofAssociation.

2. In carrying out its management duties and responsibilities referred to in paragraph 1, the Directorsshall convene the Annual GMS and other GMS as set out by the laws and regulations and theArticles of Association.

3. Every member of the Directors shall perform his/her duties and responsibilities referred to inparagraph (1) in good faith, responsibly and prudently.

4. In order to support the Directors’ effectiveness in performing its duties and responsibilities referredto in paragraph 1, the Directors may establish committees.

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5. In the event that the committees referred to in paragraph 4 are established, the Directors shallevaluate the performance of such committees at the end of each fiscal year.

6. The Directors, jointly with the Board of Commissioners, shall prepare:a. Guidelines that bind all members of the Directors and Board of Commissioners in accordance

with the prevailing laws and regulations.b. Code of Ethics that shall apply for all members of the Directors and Board of Commissioners,

employees/workers, and the Company's other supporting organs, in accordance with theprevailing laws and regulations.

7. Every member of the Directors shall be jointly and severally responsible in full for all losses borneby the company resulting from the errors or negligence of the member of the Directors in carryingout their duties.

8. Members of the Directors shall not be held responsible for the Company's losses referred to inparagraph 7 of this Article, if such member is able to prove:a. Such losses do not result from his/her errors or negligence;b. Such member has undertaken the management of the Company in good faith, responsibly and

prudently for the interest of and in accordance with the Company's aims and objectives;c. Such member has no conflict of interest, whether directly or indirectly, pertaining to the act of

management resulting in such losses; andd. Such member has taken actions to prevent such losses from occurring or continuing.

9. The Directors shall have the right to legally and directly represent the Company, whether in oroutside the court of law, on all matters and all affairs, to bind the Company with other parties, andother parties to the Company, and to undertake any action, whether concerning the management orownership, subject to the limitations set out by paragraph 10 of this Article.

10. The Directors shall first obtain the written approval of the Board of Commissioners with dueconsiderations to the prevailing laws and regulations and the Company's Articles of Associationprior to:a. obtaining or granting medium/long-term loans in a sum exceeding the limit that shall be

determined from time to time by the Board of Commissioners, whether secured or unsecured,except the receivables and payables arising from business transactions;

b. binding the Company as a guarantor (borg or avalist) with certain financial consequencesexceeding certain sum determined by the Board of Commissioners;

c. selling or otherwise transferring or disposing immovable assets, including the Company’s landrights or companies in the sum that shall be determined from time to time by the Board ofCommissioners.

d. pledging or otherwise charging encumbrance to the Company’s assets in the sum that shall bedetermined from time to time by the Board of Commissioners;

e. subscribing or participating, or disposing a portion or all investment, or incorporating newcompanies for purposes other than credit restructuring in accordance with the prevailing lawsand regulations, in the sum that shall be determined from time to time by the Board ofCommissioners;

without prejudice to the provisions of paragraph 11 stated below and the prevailing laws andregulations.

11. Making any legal act to (a) transfer or release the right of or (b) pledge as collateral for loans, aportion or all of the Company's assets in the sum exceeding 50.0% of the Company's net assets in

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one transaction or more, whether or not such transactions are related to one another and thetransaction to transfer the Company's net assets that occur within one fiscal year, which shallrequire the approval of the GMS in accordance with the terms and conditions referred to in Article14 paragraph 3 of this Articles of Association.

12. Any legal act to undertake Material Transactions, Transactions with Affiliates, or Transactions withConflicts of Interest as defined in the prevailing laws and regulations and transactions that shallrequire the approval from the shareholders in a GMS according to the terms set out in the prevailinglaws and regulations in the Capital Market.

13. a. The President Director shall have the rights and authorities to act for and on behalf of theDirectors and to represent the Company;

b. In the event that the President Director cannot attend or is unavailable for any reasonswhatsoever, of which no evidence to third parties shall be required, then the Vice PresidentDirector shall have the rights and authorities to act for and on behalf of the Directors and tolawfully represent the Company.

c. In the event that the President Director and the Vice President Director cannot attend or areunavailable for any reasons whatsoever, of which no evidence to third parties shall be required,then one other member of the Directors shall have the rights and authorities to act for and onbehalf of the Directors and to lawfully represent the Company.

d. The Directors may grant written authorization to one of the Company's employees or more or toother person to conduct certain legal act for and on behalf of the Company for a certain periodof time as set out in the power of attorney.

14. The division of duties and authorities of every member of the Directors shall be determined by theGMS, in the event that such division is not stipulated by the GMS, the division of duties andauthorities of every member of the Directors shall be determined based on the resolution of theDirectors Meeting.

15. In the event that the interest of the Company is conflicting with the personal interest of a member ofthe Directors, the Company shall be represented by other members of the Directors with no conflictof interest and in the event that the Company’s interest is conflicting with the interests of allmembers of the Directors, the Company shall be represented by the Board of Commissioners or aperson appointed by the Board of Commissioners. In the absence of such member of the Board ofCommissioners, the General Meeting of Shareholders shall appoint one person or more torepresent the Company in carrying out the duties referred to above.

16. Member of the Directors shall not be authorized to represent the Company in the event of thefollowing:a. There exist a proceeding in the court of law between the Company and the concerned member

of the Directors; andb. The interests of the concerned member of the Directors conflicts with the interests of the

Company.

17. Should the event referred to in paragraph 18 occur, the person authorized to represent theCompany shall be:a. Other members of the Directors with no conflict of interest with the Company;b. The Board of Commissioners, in the event that all members of the Directors have conflict of

interest with the Company; or

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c. other party appointed by the GMS in the event that all members of the Directors or Board ofCommissioners have conflict of interest with the Company.

18. Provisions concerning the duties and authorities of the Directors that are not yet set out by thisArticles of Association shall refer to the OJK Regulations and the provisions of other prevailing lawsand regulations.

BOARD OF DIRECTORS MEETINGArticle 17

1. a. Meeting of the Directors may be held at any time when deemed necessary upon request of oneor more members of the Directors or upon written request of one or more shareholders, whojointly represents 1/10 (one tenth) or more of the Company's total issued shares with validvoting rights.

b. The Directors shall hold meetings on a periodical basis, at least one time every month.

2. The Directors Meeting referred to in paragraph 1 shall be held, deemed valid and entitled to adoptbinding resolutions if more than 1/2 (one-half) of the total members of the Directors are present orrepresented at the meeting.

3. The Directors shall hold a joint meeting with the Board of Commissioners on a periodical basis, atleast one time in four months.

4. The attendance of the members of the Directors in the meeting referred to in paragraph 1 and 3shall be disclosed in the Company's annual report.

5. The Board of Commissioners shall schedule the meeting referred to in paragraph 1 and paragraph3 for the following year prior to the end of the fiscal year.

6. With respect to the scheduled meetings referred to in paragraph 5, material of the meeting shall beprovided to the participants by no later than five days prior to the meeting.

7. In the event of meetings held other than scheduled meetings referred to in paragraph 5, thematerial for the meeting shall be submitted to the meeting participants by no later than the meeting.

8. The invitation to the Directors Meeting shall be issued by the member of the Directors authorized torepresent the Directors in accordance with the provisions of this Articles of Association. Invitation tothe Directors Meeting shall be delivered in writing by any means to every member of the Directorsby no later than five days prior to the Meeting, without taking into account the date of invitation andthe date of the Meeting.

9. Such invitation shall state the agenda, date, time, and venue of the meeting.

10. The Directors Meeting shall be held at the Company's choice of forum for dispute resolution orbusiness activities or at the choice of forum for dispute resolution of the Stock Exchange where theCompany's shares are listed, or in any other locations provided such location is within thejurisdiction of the Republic of Indonesia.

11. The Directors Meeting shall be chaired by the President Director. In the event that the PresidentDirector is not present or is unable to attend, of which no evidence to third parties shall be required,

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the Vice President Director shall chair the Directors Meeting. In the event that the PresidentDirector and Vice President Director are not present or are unable to attend, of which no evidenceto third parties shall be required, a member of the Directors who are present and appointed in thesaid Directors Meeting may chair the Directors Meeting.

12. In a Directors Meeting, a member of the Directors may only be represented by one other member ofthe Directors under a power of attorney.

13. a. Each attending member of the Directors is entitled to cast one vote and one additional vote forevery member he/she represents

b. Each member of the Directors who personally, in any way, either directly or indirectly, has aninterest in a transaction, a contract or proposed contract, in which the Company becomes oneof the parties shall state the nature of such interest in the Directors meeting and shall not beentitled to participate in the voting on matters related to such transaction or contract, unlessotherwise stipulated in the Directors meeting.

14. The adoption of resolutions in the Directors Meeting referred to in paragraph 1 shall be made byway of amicable discussions.

15. In the event of failure to achieve a resolution by way of amicable discussion referred to inparagraph 21, resolutions shall be adopted by majority votes, i.e. approved by more than 1/2 (onehalf) of the members of the Directors present.

16. The meeting resolutions referred to in paragraph 1 shall be set out in a minutes of meeting, signedby all members of the Directors present, and circulated to all members of the Directors.

17. The meeting resolutions referred to in paragraph 3 shall be set out in a minutes of meeting, signedby all members of the Directors and Board of Commissioners present, and circulated to allmembers of the Directors and the Board of Commissioners.

18. In the event that a member of the Directors and/or member of the Board of Commissioners doesnot sign the meeting resolutions referred to in paragraph 16 and paragraph 17, the concernedmember shall be obligated to state his/her reasons in writing in a separate letter attached to theminutes of meeting.

19. The minutes of meeting referred to in paragraph 16 and paragraph 17 must be documented by theCompany.

20. Minutes of meeting prepared in accordance with the provisions of paragraph 16 and paragraph 17shall serve as a legal evidence concerning the decisions made in the said Directors Meeting,whether for the member of the Directors or third parties.

21. The Directors may also adopt valid resolutions without convening a Directors Meeting, provided thatall members of the Directors have been informed of the proposals in writing and have given theirwritten approvals by signing such proposals. A resolution so adopted shall have the same bindingpower as a resolution validly adopted in a Directors meeting

22. Provisions concerning the Directors Meeting that are not yet set out by this Articles of Associationshall refer to the OJK Regulations and the provisions of other prevailing laws and regulations.

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BOARD OF COMMISSIONERSArticle 18

1. The Board of Commissioners shall consist of two members, at the minimum, consisting of:one President Commissioner;one or more Commissioners;with due considerations to the prevailing regulations in the Capital Market.

2. In the event that the Board of Commissioners consist of two members of the Board ofCommissioners, one person among them shall be an Independent Commissioners.

3. In the event that the Board of Commissioners consists of more than two members of the Board ofCommissioners, the number of Independent Commissioners shall be no less than 30.0% (of thetotal members of the Board of Commissioners.

4. Each member of the Board of Commissioners is prohibited from taking any action individually, butshall be based on the resolutions of the Board of Commissioners or the appointment of the Board ofCommissioners.

5. The persons eligible to be appointed as members of the Board of Commissioners are individualsthat satisfy the following requirements at the time of appointment and during their term of office:(1) Possess good character, moral, and integrity.(2) Competent to conduct legal acts.(3) Within five years prior to and during his/her appointment:

a. has never been declared bankrupt;b. has never become a member of the Directors and/or a member of the Board of

Commissioner found guilty for causing a company to be declared bankrupt;c. has never been convicted for any criminal acts that inflict financial losses to the state

and/or criminal acts related to the financial sector;d. has never become a member of the Directors and/or a member of the Board of

Commissioners who, during his/her terms of office:i. neglected to convene the annual GMS;ii. in reporting his/her accountability as a member of the Directors and/or a member of the

Board of Commissioners has been rejected by the GMS or has failed to report his/heraccountability as a member of the Directors and/or a member of the Directors to theGMS; and

Iii. has caused a company that has obtained the license, approval or registration from theOJK fail to meet its obligation to submit its annual report and/or financial statements tothe OJK.

(4) Has the commitment to comply with the laws and regulations; and(5) Has the knowledge and/or expertise in the fields required by the Company

6. The criteria of a member of the Board of Commissioners shall be in accordance with the provisionsof:a. The Companies Lawb. The laws and regulations in the Capital Market; andc. The laws and regulations applicable to the Company's business activities.

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7. With respect to Independent Commissioners, in addition to satisfying the provisions of paragraph 5and paragraph 6, such candidate shall also satisfy the criteria of Independent Commissioners setout by the Capital Market regulations.

8. The satisfaction of requirements referred to in paragraph 5, 6 and 7 shall be included in arepresentation letter and submitted to the Company.

9. The representation letter referred to in paragraph 8 of this article shall be examined anddocumented by the Company.

10. The criteria of a member of the Board of Commissioners as set out by this Articles of Associationshall be satisfied by the members of the Board of Commissioners during their terms of office.

11. The appointment of any member of the Board of Commissioners who fails to satisfy therequirements set forth in this Article shall be null and void by law, commencing from the time suchfailure to satisfy the aforementioned requirements become known to other members of the Board ofCommissioners or Directors. Within a period of no longer than seven calendar days since such factbecome known, other members of the Board of Commissioners or Directors shall announce theannulment of appointment of the concerned member of the Board of Commissioners in at least oneNewspaper with national circulation and notify the Minister of Law and Human Rights and/or itsreplacement about such annulment to be recorded in the Company Register.

12. The Company shall convene a GMS to replace any member of the Board of Commissioners who nolonger satisfies the criteria as a member of the Board of Commissioners during his/her term ofoffice.

13. Proposals for the appointment, discharge, and/or replacement of members of the Board ofCommissioners submitted to the GMS shall duly consider the recommendations from the Board ofCommissioners or the committee undertaking the nomination function.

14. Members of the Directors shall be appointed and discharged by the GMS, the appointment of whichshall be effective on the date stipulated by the GMS appointing such members and shall expireafter one term of office of the members of the Directors, which shall be five years or until the closingof the Annual GMS at the end of one term of office referred to above, unless determined otherwiseby the GMS.

15. Members of the Board of Commissioners whose term of office has ended may be reappointedbased on the resolution of the GMS.

16. a. The GMS may discharge members of the Board of Commissioners from time to time by statingthe reasons thereof.

b. The reasons to discharge the members of the Board of Commissioners referred to in this Articleshall be if the concerned member of the Board of Commissioners no longer satisfies the criteriaas members of the Board of Commissioners, among others, committing any acts that inflictlosses to the Company or any other reasons as deemed appropriate by the GMS.

c. The resolution to discharge the concerned member of the Board of Commissioners shall beadopted after such concerned member is given the opportunities to present his/her defense inthe GMS.

d. The opportunity to present such defense shall not be required if the concerned member has noobjection to such discharge.

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e. The discharge of members of the Board of Commissioners shall be effective upon closing of theGMS referred to in point (a) of this article or any other date set out in the GMS resolution.

17. a. A member of the Board of Commissioners shall have the right to resign from his/her positionprior to the end of his/her term of office by submitting a written notice concerning his/herintention to resign to the Company.

b. The Company shall convene a GMS to resolve the request for resignation of the concernedmember of the Board of Commissioners within a period of no longer than 90 (ninety) daysfollowing the receipt of such resignation letter.

c. The Company shall disclose to the public and report to the OJK by no later than twobusinessdays following the receipt of such request for resignation of the member of the Directors referredto in point a of this paragraph and the results of the GMS referred to in point b of this article.

d. Before such resignation is effective, the concerned member of the Board of Commissioners shallremain obligated to carry out his/her duties and responsibilities in accordance with the Articles ofAssociation and the prevailing laws and regulations.

e. The resigned member of the Board of Commissioners referred to above may be requested topresent his/her accountability as a member of the Board of Commissioners from theappointment date of such member until the approval of his/her resignation in the GMS.

f. The full release and discharge of the resigned member of the Board of Commissioners shall begranted after the Annual GMS granted such full release and discharge.

18. The terms of office of members of the Board of Commissioners shall cease automatically, if suchmember:a. is declared bankrupt or under guardianship pursuant to a court order;b. Is prohibited from holding a post as a member of the Board of Commissioners as a result of a

provisions set out by certain laws or the prevailing laws and regulations; orc. is deceased; ord. is discharged pursuant to a resolution of the GMS.

19. Salaries and other benefits of the members of the Board of Commissioners shall be determined bythe GMS.

20. In the event that the position of a member of the Board of Commissioners is vacant for any reasonswhatsoever, thereby causing the number of members of the Board of Commissioners to be lessthan two persons as defined in paragraph 1 of this Article, a GMS shall convene to fill in thevacancy by no later than 60 (sixty) calendar days following the vacancy, with due considerations tothe prevailing laws and regulations in the Capital Market.

21. In the event that the position of the President Commissioner is vacant and for as long as thereplacement has not been appointed or has not assumed his/her position, then one of the membersof the Board of Commissioners appointed by the Board of Commissioners Meeting shall carry outthe President Commissioner's obligations and shall have equal authority and responsibilities as thePresident Commissioner.

22. Every member of the Board of Commissioners shall be prohibited from earning personal gains,whether directly or indirectly, from the Company's activities other than the lawful income.

23. Members of the Board of Commissioners are prohibited from holding any dual positions if such dualpositions are prohibited by and/or in contrary to the laws and regulations.

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24. Provisions concerning the Board of Commissioners that are not yet set out by this Articles ofAssociation shall refer to the OJK Regulations and the provisions of other prevailing laws andregulations.

DUTIES AND AUTHORITIES OF THE BOARD OF COMMISSIONERSArticle 19

1. The Board of Commissioners shall undertake the supervision of and be responsible of thesupervision of management policy, the course of management in general, whether thoseconcerning the Company or the Company’s business, and provide advices to the Directors.

2. In certain conditions, the Board of Commissioners shall be obligated to hold an Annual GMS andother GMS in accordance with its authority as set out by the laws and regulations and the Articles ofAssociation.

3. Members of the Board of Commissioners shall perform its duties and responsibilities referred to inparagraph (1) in good faith, responsibly and prudently.

4. The Board of Commissioners shall, at any time, during office hours of the Company, be entitled toenter the building and the premises of the Company or other places used or controlled by theCompany and be entitled to inspect all records, letters, and other evidences, to inspect andreconcile the Company's cash, the Company's documents and assets and to know all actions takenby the Directors.

5. The Board of Commissioners shall have the right to demand an explanation from the Directors onall questions raised and members of the Directors shall provide explanations concerning allquestions raised by the Board of Commissioners.

6. If all members of the Directors are temporarily discharged and the Company does not have anymember of the Directors, then the Board of Commissioners shall be temporarily obligated toundertake the management of the Company. In that event, the Board of Commissioners shall havethe right to grant temporary authorities to one or more members of the Board of Commissioners atthe expense of the Board of Commissioners.

7. In the event that there is only one member of the Board of Commissioners, then all duties andauthorities granted to the President Commissioner or members of the Board of Commissioners inthis Articles of Association shall apply to him/her.

8. At any time, the Board of Commissioners, pursuant to a resolution of the Board of CommissionersMeeting, shall have the right to temporarily discharge one or more members of the Directors fromhis/her (her) office by stating the reasons thereof, in the event that the concerned member(s) of theDirectors has (have) acted in contrary to this Articles of Association and/or the prevailing laws andregulations.

9. Such temporarily discharge shall duly consider the provisions of Article 15 paragraph 11 of thisArticles of Association.

10. Members of the Board of Commissioners are prohibited from holding any dual positions if suchdual positions are prohibited by and/or in contrary to the laws and regulations.

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11. Provisions concerning the Board of Commissioners that are not yet set out by this Articles ofAssociation shall refer to the OJK Regulations and the provisions of other prevailing laws andregulations.

BOARD OF COMMISSIONERS MEETINGArticle 20

1. a. Meeting of the Board of Commissioners may be held at any time when deemed necessary uponrequest of one or more members of the Board of Commissioners or upon written request of oneor more members of the Directors or upon written request of one or more shareholders, whojointly represents 1/10 one tenth of the Company's total issued shares with valid voting rights.

b. The Board of Commissioners shall hold a meeting at least one time in two months.

2. The Board of Commissioners Meeting referred to in paragraph 1 shall be held, deemed valid andentitled to adopt binding resolutions if more than 1/2 (one-half) of the total members of the Board ofCommissioners are present or represented at the meeting.

3. The Board of Commissioners shall hold a joint meeting with the Directors on a periodical basis, atleast one time in four months.

4. The attendance of the members of the Board of Commissioners in the meeting referred to inparagraph 1 and 3 shall be disclosed in the Company's annual meeting.

5. The Board of Commissioners shall schedule the meeting referred to in paragraph 1.b andparagraph 3 for the following year prior to the end of the fiscal year.

6. With respect to the scheduled meetings referred to in paragraph 5, material of the meeting shall beprovided to the participants by no later than five days prior to the meeting.

7. In the event of meetings held other than scheduled meetings referred to in paragraph 5, thematerial for the meeting shall be submitted to the meeting participants by no later than the meeting.

8. Invitation for the Meeting of the Board of Commissioners shall be made by the PresidentCommissioner. In the event that the President Commissioner cannot attend or is unavailable forany reasons whatsoever, of which no evidence to third parties shall be required, then one memberof the Board of Commissioners appointed by the President Commissioner shall have the right andshall be authorized to issue the invitation to the Board of Commissioners Meeting.

9. Invitations to the Board of Commissioners Meeting shall be sent in writing by any means, suchinvitations shall be sent to the members of the Board of Commissioners by no later than fivecalendar days prior to the Meeting or within a shorter period in an emergency, i.e. by no later thanone calendar day prior to the Meeting, without taking into account the date of invitation and the dateof the Meeting, whereas the state of emergency shall be determined by the PresidentCommissioner. If all members of the Board of Commissioners are present in the Meeting, suchinvitation shall not be required.

10. Such invitation shall state the agenda, date, time, and venue of the meeting.

11. The Board of Commissioners Meeting shall be held at the Company's choice of forum for disputeresolution or business activities or at the choice of forum for dispute resolution of the Stock

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Exchange where the Company's shares are listed, or in any other locations provided such locationis within the jurisdiction of the Republic of Indonesia.

12. The Board of Commissioners Meeting shall be chaired by the President Commissioner, in the eventthat the President Commissioner is not present or unable to attend, of which no evidence to thirdparties shall be required, a member of the Board of Commissioners who are present and appointedin the said meeting may chair the Board of Commissioners Meeting.

13. In a Board of Commissioners Meeting, a member of the Board of Commissioners may berepresented by other member of Board of Commissioners under a power of attorney.

14. a. Each member of the Board of Commissioners is entitled to cast one vote and one additionalvote for every member of the Board of Commissioners that he/she represents.

b. Each member of the Board of Commissioners who personally, in any way, either directly orindirectly, has an interest in a transaction, a contract or proposed contract, in which theCompany becomes one of the parties shall state the nature of such interest in the Board ofCommissioners meeting and shall not be entitled to participate in the voting on matters relatedto such transaction or contract, unless otherwise stipulated in the Board of Commissionersmeeting.

c. Voting concerning a person shall be conducted in folded unsigned ballot, while voting on othermatters are conducted verbally, unless the Chairman of the Meeting determines otherwisewithout objection from the members present.

15. A resolution of a Board of Commissioners Meeting shall be adopted by way of amicable discussion.

16. In the event of failure to achieve a resolution by way of amicable discussion as referred to inparagraph 15, resolutions shall be adopted by majority votes, i.e. approved by more than 1/2 (onehalf) of the members of the Board of Commissioners present.

17. The meeting resolutions referred to in paragraph 1 shall be set out in a minutes of meeting, signedby all members of the Board of Commissioners present, and circulated to all members of the Boardof Commissioners.

18. The meeting resolutions referred to in paragraph 3 shall be set out in a minutes of meeting, signedby all members of the Board of Commissioners and Directors present, and circulated to allmembers of the Board of Commissioners and Directors.

19. In the event that a member of the Directors and/or member of the Board of Commissioners doesnot sign the meeting resolutions referred to in paragraph 17 and paragraph 18, the concernedmember shall be obligated to state his/her reasons in writing in a separate letter attached to theminutes of meeting.

20. The minutes of meeting referred to in paragraph 17 and paragraph 18 must be documented by theCompany.

21. Minutes of meeting prepared in accordance with the provisions of paragraph 17 and paragraph 18shall serve as a legal evidence concerning the decisions made in the said Board of CommissionersMeeting, whether for the member of the Board of Commissioners or third parties.

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22. The Board of Commissioners may also adopt valid resolutions without convening a Board ofCommissioners Meeting, provided that all members of the Board of Commissioners have beeninformed of the proposals in writing and have given their written approvals by signing suchproposals. A resolution so adopted shall have the same binding power as a resolution validlyadopted in a Board of Commissioners meeting.

WORK PLAN, FISCAL YEAR AND ANNUAL REPORTArticle 21

1. The Directors shall prepare and execute an annual work plan.

2. The Directors shall submit a work plan to the Board of Commissioners for approval.

3. The approval on the annual report, including the ratification of the annual financial statements andthe Board of Commissioners’ monitoring performance report, and the decision concerning theappropriation of profit shall be determined by the GMS

4. The work plan referred to in paragraph (1) shall be submitted prior to the beginning of the next fiscalyear

5. The Company’s fiscal year commences from the 1st (first) day of January until the 31st (thirty first)day of December. At the end of the month of December of each year, the Company's ledger shallbe closed.

6. The Directors shall submit the Company’s financial statements to the Public Accountant appointedby the GMS to be audited and the Directors shall prepare the annual report with due considerationsto the prevailing laws and regulations and make such annual report available at the Company'soffice to be examined by the shareholders from the date of invitation to the Annual GMS.

7. Within a period of no longer than four months following the close of the Company's ledger, theDirectors shall prepare the annual report in accordance with the prevailing laws and regulations.

8. The annual report shall be signed by all members of the Directors and Board of Commissioners inoffice during the concerned fiscal year. In the event that any member of the Directors or Board ofCommissioners does not sign the said annual report, the concerned member shall state his/herreason(s) thereof in writing, and such reason(s) shall be disclosed by the Directors in a separateletter attached to the annual report. In the event that the member of the Directors or Board ofCommissioners refusing to sign the annual report fails to provide his/her reason(s) thereof, theconcerned member shall be deemed to have approved the content of the annual report.

9. The Company shall announce the Statements of Financial Position and Statements ofComprehensive Income in the newspapers published in the Indonesian language with nationalcirculation in accordance with the procedures set forth in Regulation Number X.K.2 concerning TheIssuers’ or Public Companies’ Obligations to Submit Periodical Financial Statements.

APPROPRIATION OF PROFIT AND DIVIDEND DISTRIBUTIONArticle 22

1. The Company’s net profit in a fiscal year as stated in the statement of financial position andstatement of comprehensive income ratified by the Annual GMS, which constitutes a positive

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balance of profit, may be distributed in accordance with the appropriation determined by theaforementioned GMS.

2. Dividends shall be paid in accordance with the capabilities of the Company's financial conditionbased on a resolution adopted in the GMS, the said resolution shall also determine the time andmanners of the dividend distribution. Dividends for a share shall be paid to the person whose nameis registered as the owner of such share in the Shareholder Register, with due considerations toArticle 9 of this Articles of Association, which shall be determined or authorized by the GMS inwhich the resolution to distribute such dividend is adopted, one and another shall be withoutprejudice to the provisions of the regulations of the Stock Exchange where such shares are listed.

3. In the event that the Annual GMS does not stipulate other appropriation, then, the net profit, net ofstatutory reserves required by the Law and the Articles of Association may be distributed asdividends.

4. In the event of a GMS resolution concerning the distribution of cash dividends, the Company shallbe obligated to execute the payment of cash dividends to the eligible shareholders by no later than30 (thirty) days subsequent to the announcement of minutes of meeting of the GMS adopting theresolution to distribute cash dividends.

5. In the event that the profit and loss calculation of a fiscal year results in a loss that cannot becovered by the reserve fund, such loss shall remain recorded in the profit and loss calculation andfor the following years the Company shall be considered not to have generated profit for as long asthe loss recorded in the profit and loss calculation has not been entirely covered, without prejudiceto the prevailing laws and regulations.

6. Dividends which remain uncollected within a period of five years after the date determined for thepayment of dividends has lapsed, will be entered into a special reserve. The GMS shall determinethe procedure to withdraw the dividends that have been entered into such special reserve. Thedividends that have been entered into the special reserve as mentioned above and uncollectedwithin a period of 10 years will become the possession of the Company.

7. The regulations of the Stock Exchange where the Company’s shares are listed shall apply to theshares listed on the Stock Exchange.

8. Distribution of interim dividends shall be conducted based on the decisions of the Directors, with theapproval of the Board of Commissioners, with due considerations to the Company's profit projectionand financial ability, and with due considerations to paragraph 6 of this Article.

9. If the Company experiences losses subsequent to the end of the fiscal year in which the interimdividend is distributed, the distributed interim dividend must be refunded by the shareholders to theCompany.

10. The Board of Commissioners and Directors shall be jointly and severally responsible for theCompany's losses in the event that the Shareholders are unable to return the interim dividendsreferred to in paragraph 8 of this Article.

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UTILIZATION OF RESERVESArticle 23

1. The Company shall be obligated to retain a certain amount of its net profit in every fiscal year as areserve, which shall be determined by the GMS with due considerations to the prevailing laws andregulations.

2. The obligation to retain certain amount of the net profit referred to above shall apply when theCompany has a positive balance of profit.

3. The retaining of the net profit for reserve shall be conducted until the reserve has reached aminimum of 20.0% of the Company's total issued and fully paid-in capital.

4. Reserve which has not reached the amount referred to in paragraph 3 of this article may only beutilized to cover the loss which cannot be covered by other reserves.

5. If the amount of the reserve has exceeded 20.0% of the total issued and fully paid-in capital, theGMS may decide that the excess amount may be utilized for the Company’s needs.

AMENDMENT TO ARTICLES OF ASSOCIATIONArticle 24

1. Amendment(s) to the Articles of Association shall be carried out with due considerations to theCompanies Law and/or the Capital Market Regulations.

2. Amendment(s) to the Articles of Association shall be resolved by the GMS with due considerationsto the provisions set forth in this Articles of Association.

3. Amendment(s) to Articles of Association shall be made in Notarial Deed and in the IndonesianLanguage.

4. Amendment(s) to the provisions of the Articles of Association concerning the changes in theCompany's name and/or domicile; aims and objectives and business activities; the Company'sduration of establishment; the amount of Authorized Capital, the decrease of issued and fully paid-in capital and/or changes of the Company's status from private to Public company or vice versa,shall obtain the approval from the Minister of Law and Human Rights of the Republic of Indonesiaand/or its replacement thereof as referred to in the prevailing laws and regulations.

5. Amendment(s) to the Articles of Association concerning matters other than those stated inparagraph 4 of this Article shall only require a notification to the Minister of Law and Human Rightsof the Republic of Indonesia and/or its replacement, with due considerations to the provisions of theCompanies Law.

6. Provisions concerning the decrease of capital shall be made with due considerations to theprevailing laws and regulations, particularly the Capital Market regulations.

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MERGER, AMALGAMATION, ACQUISITION AND SPIN-OFFArticle 25

1. Merger, Amalgamation, Acquisition or Spin-off shall be determined by the GMS according to theprovisions set forth in Article 14 of this Articles of Association.

2. Further provisions concerning Merger, Amalgamation, Acquisition, and Spin-Off shall be inaccordance with the prevailing laws and regulations, particularly the Capital Market regulations.

DISSOLUTION, LIQUIDATION AND TERMINATION OF STATUS AS A LEGAL ENTITYArticle 26

1. Dissolution of the Company may be carried out pursuant to the resolutions of the GMS according tothe provisions set forth in Article 14 of this Articles of Association.

2. Further provisions concerning Dissolution, Liquidation, and Termination of Status as a Legal Entityshall be in accordance with the prevailing laws and regulations, particularly the Capital Marketregulations.

DOMICILEArticle 27

The shareholders shall, for the matters relating to the Company, be deemed of having choice of forumfor dispute resolution at the addresses as recorded in the Shareholders Register with due considerationto the prevailing laws and regulations in the Capital Market as well as the prevailing regulations in theStock Exchange where the Company’s shares are listed.

CONCLUDING PROVISIONSArticle 28

Any matters that are not yet or not sufficiently governed in this Articles of Association shall bedetermined by the GMS.

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XVIII. TERMS OF SHARE SUBSCRIPTION1. Share Subscription

Share subscriptions shall be made in accordance with the provisions set forth in this Prospectus andthe FPPS. Share subscriptions shall be made based on the original FPPS issued by the Joint LeadUnderwriters. The original FPPS issued by the Joint Lead Underwriters may be obtained from theUnderwriters or Selling Agents listed in the Distribution of Prospectuses and FPPS Chapter in thisProspectus. The FPPS shall be made in five copies. Share subscriptions that are not in conformity tothe terms referred to above shall not be processed.

Each subscriber must already own a securities account at the securities companies/custodian banksregistered as Account Holders at KSEI.

2. Eligible Subscribers

Subscribers eligible to subscribe shares shall be individuals and/or Institutions/Business Entities as setout in the Capital Market Law and Regulation No. IX.A.7.

3. Number of Subscription

The share subscription shall be made in the sum of no less than one unit of trading, which shall be 100(one hundred) shares and subsequently in the multiples of 100 (one hundred) shares.

4. Securities Registration in Collective Depository

The offered shares are registered at KSEI based on the Equity Securities Registration at CollectiveDepository Agreement No. SP-003/SHM/KSEI/0317 dated March 23, 2017, entered into by theCompany and the KSEI.

A. Pursuant to the registration of such shares in KSEI, the following provisions shall apply on suchshares:1. The Company shall not issue any Share Collective Certificates, however, the shares shall be

distributed electronically and administered in the Collective Depository of KSEI Shares fromthe Initial Public Offering shall be credited to the Securities Account under the name of theaccount holders by no later than June 20, 2017.

2. The Company shall issue the Share Registration Confirmation Letter (the "SRCL") to KSEI asevidence of registration in the Company's Shareholder Register for the shares under theCollective Depository

3. Before the Shares offered in this Initial Public Offering are listed on the Stock Exchange, thesubscribers shall receive the allotment result confirmation under the name of the subscribersin the form of Allotment Confirmation Form (the "FKPS");

4. KSEI, Securities Companies, or Custodian Banks shall issue a written confirmation to theaccount holders as a confirmation letter concerning the ownership of the Shares. The saidWritten Confirmation shall constitute a legitimate evidence of ownership on Shares registeredin the Securities Account.

5. Transfer of Share ownership shall be made by way of book-entry settlement betweenSecurities Accounts at KSEI;

6. The holders of shares listed in the Securities Account shall be entitled to dividends, bonuses,preemptive rights, cast votes in a GMS, and other rights inherent to the shares;

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7. Payment of dividends, bonuses to, and exercise of preemptive rights by the shareholdersshall be conducted by the Company, or the Share Registrar appointed by the Company,through the Securities Account at KSEI to be further forwarded to the beneficial owners whoare the Securities Account Holders at the Securities Companies or Custodian Banks;

8. Subsequent to the Initial Public Offering and listing of the Company's shares, shareholdersintending to have share certificates may redeem the shares from the Collective Depository atKSEI after the shares from the Initial Public Offering are distributed to the Securities Accountsof the appointed Securities Companies/Custodian Banks;

9. Such redemption shall be made by submitting the share redemption request to KSEI throughthe Securities Companies/Custodian Banks managing such shares by completing theSecurities Redemption Form;

10. For Shares redeemed from the Collective Depository, a Share Collective Certificate shall beissued by no later than five business days subsequent to the receipt of such redemptionrequest by KSEI, and shall be issued under the name of the shareholders in accordance withthe requests of the Securities Companies or Custodian Banks managing such shares;

11. Parties intending to settle stock exchange transactions on the Company's shares shall beobligated to appoint Securities Companies or Custodian Banks that are already registered asAccount Holders at KSEI to administer such Shares.

B. Shares that are redeemed from the Collective Depository at KSEI for which Share CollectiveCertificate has been issued cannot be used to settle stock exchange transactions. Furtherinformation concerning the share redemption procedures are available at the Underwriters orSelling Agents where the said FPPS are submitted.

5. Submission of Share Subscriptions

During the Public Offering, eligible subscribers may submit the share subscriptions during the officehours at the offices of the Joint Lead Underwriters or Underwriters or Selling Agents where thesubscribers obtained the FPPS.

Each party shall have the right to submit only one FPPS and such FPPS must be submitted by theconcerned subscriber by attaching photocopies of identity (Resident Card (KTP)/Passport forindividuals and Articles of Association for legal entities), evidence of ownership of sub-securitiesaccount under the name of the subscribers and shall perform payment in accordance with thesubscription amount. For foreign subscribers, in addition to attaching the photocopy of passport to theFPPS, such subscribers shall state their names and addresses abroad/or the legitimate legal domicilein a complete and clear manner and shall perform payment in accordance with the subscriptionamount.

The Selling Agents, Joint Lead Underwriters, Underwriters and the Company shall have the right torefuse the share subscriptions if the FPPS are not filled in completely or if the terms of sharesubscriptions are not satisfied.

6. Preliminary Offering Period

The preliminary offering period shall take place from May 24, 2017 until June 6, 2017 from 09.00Western Indonesian Time up to 15.00 Western Indonesian Time.

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7. Public Offering Period

The Public Offering Period shall take place from June 15, 2017 until June 16, 2017 from 09.00Western Indonesian Time up to 15.00 Western Indonesian Time.

8. Allotment Date

The allotment date on which the Joint Lead Underwriters and the Company determine the shareallotment for each subscription shall be June 19, 2017.

9. Special Share Subscriptions

Special share subscriptions by the Company's employees (which for this purpose shall be the ESAprogram), which Offering Price per share in the ESA program shall be the same as the Offering Pricein the Public Offering, in a maximum sum of 0.5% from the total offered shares.

10. Terms of Payment

Payments may be made in cash, checks, or bank drafts denominated in Rupiah and paid to theUnderwriters or Selling Agent at the time the FPPS are submitted. Payments shall be addressed to theJoint Lead Underwriters’ accounts at:

PT Bank Central Asia TbkKCK Branch

Account Number: 2050030485On behalf: PT BCA Sekuritas

Payments may be made in checks, bilyet giro, and other bank payment instruments or irrevocablestanding instructions issued by banks, which must be endorsed on the share allotment date that mustbe attached in each share subscription.

All payments from retail and institutional buyers must be effective in good funds in the accounts of theJoint Lead Underwriters at the end of the offering period, i.e. June 16, 2017, at 15.00 WesternIndonesian Time, whereas payments from international selling agents and/or their affiliates must be ingood funds on the share distribution date.

If the payments are made in checks, the checks shall be personal checks/owned by the Partiessubmitting (signing) the subscription forms. Checks owned by/under the name of third parties areunacceptable as payments.

All bank charges and transfer fees related to such payments shall be borne by the subscribers. Allchecks and bank drafts received shall be immediately endorsed upon receipt. In the event that suchchecks or bank drafts are dishonored by the drawing bank upon endorsement, the said sharesubscriptions shall be considered void. Payment of special share subscriptions shall be made directlyto the Company. For payments made by transfer from other bank, Subscribers shall attach thephotocopy of Clearing Credit Note from the concerned bank and state the FPPS number.

11. Receipt

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The Joint Lead Underwriters, Underwriters and Selling Agents accepting the submission of FPPS shallreturn to the subscribers, the copy or photocopy of the 5th (fifth) page of the FPPS that has beensigned (original signature) as Receipt of Share Subscription. Such Receipt of Share subscription is nota guarantee that the share subscription shall be fulfilled. The Receipt shall be safely kept to besubmitted upon refund of subscription fund and/or upon receipt of the Allotment Confirmation Form forthe share subscriptions. For special share subscriptions, the Receipt of Share Subscription shall beprovided directly by the Company.

12. Share Allotment

The allotment shall be performed by the Joint Lead Underwriters as the Allotment Manager, using acombined system of Pooling Allotment and Fixed Allotment in accordance with the Regulation No.IX.A.7 and other prevailing laws and regulations, including the Capital Market regulations.

To maintain the liquidity of its shares, the Company has determined the allotment system to beimplemented, i.e. Fixed Allotment and Pooling Allotment, where the fixed allotment is limited up to amaximum of 98.0% of the total shares offered and the remaining 2.0% shall be based on PoolingAllotment.

(i) Fixed Allotment

Fixed allotment is limited to 98.0% of the total Offered Shares, that shall be allocated to, but notlimited to, Pension Funds, Insurance, Mutual Funds, Foundations, other types of Institutions,Individuals, both domestic or international. The fixed allotment portion has included total shares inthe ESA program totaling 1.0% of the total Offered Shares to the public in this Initial PublicOffering.

Fixed allotment in the Initial Public Offering shall be performed solely if the following requirementsare satisfied:1. The Allotment Manager shall determine the percentage and the parties entitled to the fixed

allotment in the Initial Public Offering. The determination of Fixed Allotment percentage shallconsider the interests of individual subscribers;

2. The total Fixed Allotment referred to in point 1) has included the allocation for the Company'semployees submitting subscriptions in the Initial Public Offering (if any), in a maximum sum of1.0% of the total shares offered in the Initial Public Offering; and

3. Fixed Allotment may not be granted to:a. Directors, Commissioners, employees, or Parties holding 20.0% or more of the shares in a

Securities Company acting as Underwriter or Selling Agent with respect to the Initial PublicOffering;

b. The Company's Directors, Commissioners and/or majority shareholders; orc. Affiliates of the Parties referred to in point a) and b), which are not the Parties that subscribe

shares on behalf of third parties.

(ii) Pooling Allotment

Pooling allotment is limited up to 2.0% of the total Offered Shares.

In the event that the total shares subscribed exceeds the number of Offered Shares, the AllotmentManager shall perform the following allotment procedures for the remaining Securities subsequentto the Fixed Allotment:

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1. If, upon exclusion of the Securities subscribers referred to in Regulation No. IX.A.7 and there areremaining shares which total is equal or higher than the amount subscribed, then:a) the subscribers who are not excluded shall receive all the subscribed shares; andb) In the event that the subscribers who are not excluded have received full allotment and

there are remaining shares available, such remaining shares shall be distributedproportionally to the subscribers, who are:a. Directors, Commissioners, employees, or Parties holding 20.0% or more of the shares

in a Securities Company acting as Underwriter or Selling Agent with respect to theInitial Public Offering;

b. The Company's Directors, Commissioners and/or majority shareholders; orc. Affiliates of the Parties referred to in point a) and b), which are not the Parties that

subscribe shares on behalf of third parties.according to the amount subscribed by the subscribers.

2. If, upon exclusion of the Securities subscribers referred to in Regulation No. IX.A.7 and there areremaining shares which total is lower the amount subscribed, then the allotment for subscriberswho are not excluded shall follow the following requirements:a) In the event that such shares will not be listed on the IDX, such shares shall be allocated

proportionally in accordance with the amount subscribed by the subscribers without fraction;or

b) In the event that such shares shall be listed on the IDX, such shares shall be allocated inaccordance with the following requirements:(1) The subscribers who are not excluded shall be entitled to one unit of trading at the IDX,

if there is sufficient units of trading available. In the event of insufficient units available,the available units of trading shall be allocated by way of lottery. The number of sharesincluded in the unit of trading referred to above shall be the highest full unit of tradingdetermined by the IDX where the shares are listed; and

(2) If, there are remaining shares available, then after one unit of trading is allocated tosubscribers who are not excluded, allocation shall be performed proportionally, in theunit of trading according to the amount subscribed by the subscribers.

The Allotment Manager shall submit the Accountant Audit Report to the OJK concerning the fairnessof the allotment with reference to Regulation No. VII.G.12 and Regulation No. IX.A.7.

The Company shall submit the Initial Public Offering Proceeds Report to the OJK by no later than fiveBusiness Days subsequent to the allotment date in accordance with Regulation No. IX.A.2, supportedby the Allotment Report as set out in Regulation No. IX.A.7.

In the event of oversubscription of Securities and it is proven that certain parties have submittedSecurities subscriptions through more than one subscription form for each Initial Public Offering,whether directly or indirectly, then, for the purpose of allotment, the Allotment Manager shall includeonly one Securities subscription form that is first submitted by the concerned subscribers.

13. Postponement of Public Offering Period or Cancellation of Public Offering

In accordance with Regulation No. IX.A.2 and the Deed of Securities Underwriting Agreement, within theperiod from the Effectiveness of the Registration Statement up to the end of the Initial Public OfferingPeriod, the Company may postpone the Initial Public Offering Period up to a maximum of three monthssubsequent to the Effectiveness of the Registration Statement or cancel the Initial Public Offering providedthat the following conditions beyond the Company’s control and power occur:i. The IDX composite index declines by more than 10.0% for three consecutive Exchange Days;

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ii. Natural disasters, war, riots, fire, strikes which significantly affect the Company’s going concern; and/oriii. Other events that have significant effect to the Company’s business continuity as set out by the OJK

based on the Form set out in Regulation No. IX.A.2

Should there be a postponement of the Public Offering Period or cancellation of the Initial Public Offering,the Company shall comply with the following provisions:a. Announce the postponement of the Public Offering period or the cancellation of the Public Offering

in at least one Indonesian language daily newspaper which has national circulation no later thanone Business Day after such delay or cancellation. In addition to the obligation to publish in anewspaper, the Company may also publish such information in other mass media;

b. Submit the information regarding the postponement of the Public Offering period or the cancellationof such Public Offering to OJK on the same day as the announcement referred to in point a;

c. Submit proof of announcement as referred to in point a to OJK no later than one working day afterthe announcement; and

d. The Company which postpones the Public Offering period or cancel the Public Offering which isbeing conducted, in the event that the payment for the shares subscription has been made, theCompany shall refund such payment to the subscriber no later than 2 (two) working days from thedecision of such postponement or cancellation.

The Company which postpones due to the decline of the composite stock price index on the StockExchange fell by more than 10.0% (ten percent) for three consecutive Exchange Days, the followingprovisions will apply should the Company wants to resume the Public Offering period:

a. The Company shall start over the Public Offering period no later than eight working days after thecomposite stock price index on the Stock Exchange has increased by at least 50.0% (fifty percent)of the total decrease in the composite stock price index on which the delay is based;

b. In the event that the composite stock price index on the Stock Exchange declines again by morethan 10.0% (ten percent) for three consecutive Exchange Days, the Company may postpone thePublic Offering period again;

c. Shall convey to OJK the information regarding the Public Offering schedule and othersupplementary information, including information on material events which occur after thepostponement of the Public Offering period (if any) and announce it in at least one Indonesianlanguage daily newspaper which has national circulation in one working day at the latest prior to thecommencement of the Public Offering period. In addition to the obligation to publish in anewspaper, the Company may also publish such information in other mass media; and

d. Shall submit proof of announcement as referred to in point c to OJK no later than one working dayafter the announcement.

14. Refund of Subscription

a. With due considerations to Regulation IX.A.2, in the event that the subscriptions of Securities arerejected in whole or in part, or in the event of cancellation of the Public Offering, and suchSecurities subscriptions have been paid, then the Joint Lead Underwriters shall be individuallyresponsible and obligated to refund the excess subscription fund to the subscribers andUnderwriters by no later than the Refund Date, and each Underwriter shall be individuallyresponsible and obligated to refund the subscription fund received with respect to the subscriptionto the subscribers as soon as possible, but in any case, the refund shall be made by no later thanthe Refund Date. Therefore, the Joint Lead Underwriters and the Underwriters hereby release theCompany from any claims/penalties with respect to such negligence.

b. The refund may be made by way of book-entry settlement to the account under the name of the

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subscriber or by other payment instruments in the form of check or bilyet giro that may be collecteddirectly by the concerned subscribers from the Underwriters where the subscriptions are submittedby submitting the receipt of share subscription and personal identification.

c. Any party conducting a negligence with respect to the refund of subscription fund, thereby causinga delay in such refund of subscription fund or causing another parties to be late in performing theirobligations to refund the subscription fund, shall be obligated to pay a penalty to the concernedsubscriber in the sum equal to the interest rate per annum of the Rupiah current account applicableat the Bank that will be further determined in the amendment to Securities Underwriting Agreement(the "Interest Rate") for each day of delay up to the date that such outstanding amount is paid,where one) year shall constitute 360 Calendar Days and one months shall constitute 30 CalendarDays.The party being late in refunding the subscription fund to subscribers due to the negligence of otherparties in accordance with the provisions of Article 10.6 of the Securities Underwriting Agreementshall be released from all claims arising from such delay in the refund of subscription fund and shallbe released from the obligation to pay such penalty.

d. With respect to the termination of the Securities Underwriting Agreement, which results in thecancellation or postponement of the Initial Public Offering as set out in the Securities UnderwritingAgreement, the following provisions shall apply:1. If such termination occurs before the Payment Date, the refund of subscription fund (including

any penalty for lateness in the refund of subscription fund), shall be the responsibility of theJoint Lead Underwriters and/or Underwriters in accordance with their respective underwritingportions, and shall be settled by no later than two Business Days subsequent to the terminationof the Securities Underwriting Agreement or the postponement of the Initial Public Offering.Therefore, the Company shall be released from the responsibility over any claims/penalties withrespect to failure to refund such subscription (including late penalties, if any).

2. If such termination occurs after the Payment Date, and the subscription payments have beenreceived by the Company, the refund of subscription payments (including any late penalties)shall be the responsibility of the Company, which shall pay the refunds through KSEI to thesubscribers.Therefore, each of the Joint Lead Underwriters and/or Underwriters shall be released from theresponsibility over any claims/penalties with respect to failure to refund such subscription(including late penalties, if any).

e. In the event that the subscription fund to be refunded is available, however, the subscribers do notcollect such refund, it shall no longer become the responsibilities of the Issuer, the Joint LeadUnderwriters and/or Underwriters, and therefore, there shall be no obligation to pay the penalty tothe subscribers.

15. Distribution of Allotment Confirmation Form (FKPS) on Share Subscriptions

Share distribution to each Securities Account of the share subscribers at the Underwriters and SellingAgents where the respective FPPS are submitted shall be performed by no sooner than one businessdays subsequent to the allotment date. The Share Allotment Confirmation Form for such sharedistribution may be obtained by submitting the Share Subscription Receipt.

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16. Others

In the event of oversubscription of Securities and it is proven that certain parties have submitted Securitiessubscriptions through more than one subscription form for each Initial Public Offering, whether directly orindirectly, then, for the purpose of allotment, the Allotment Manager shall include only one Securitiessubscription form that is first submitted by the concerned subscribers.

The Joint Lead Underwriters, Underwriters or Selling Agents and their affiliations are prohibited frompurchasing or owning shares for their own accounts in the event of oversubscription. Affiliated parties shallonly be allowed to subscribe and own shares if there are shares remaining unsubscribed by internationaland/or domestic unaffiliated parties. The allocation shall be performed proportionally.

In the event of under subscription in the Initial Public Offering, the Joint Lead Underwriters, Underwritersand Selling Agents or their affiliates are prohibited from selling the shares they have subscribed or willsubscribe based on the Securities Underwriting Agreement.

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XIX. DISTRIBUTION OF PROSPECTUS AND SHARESUBSCRIPTION FORM

The Prospectus and FPPS are available at the offices of the following Joint Lead Underwriters:

JOINT LEAD UNDERWRITERS

PT Bahana SekuritasGraha Niaga, 19th Floor

Jl. Jend. Sudirman Kav. 58Jakarta 12190

Phone. (021) 250 5080Facsimile. (021) 522 5889

Website: www.bahana.co.idEmail: [email protected]

PT BCA SekuritasMenara BCA, Grand Indonesia,

41st Floor, Jl. M. H. Thamrin No. 1Jakarta 12190

Phone. (021) 2358 7222Facsimile. (021) 2358 7250

Website: www.bcasekuritas.co.idEmail: [email protected]

PT DBS Vickers Sekuritas IndonesiaDBS Bank Tower,

Ciputra World I, 32nd FloorJl. Prof. Dr. Satrio Kav. 3-5

Jakarta 12940Phone: (021) 3003 4900

Facsimile: (021) 3003 4944Website: www.dbsvickers.com

Email: [email protected]

UNDERWRITERS

PT Bosowa SekuritasEquity Tower 15th Floor Suite

15DSCBD Lot. 9

Jl. Jendral Sudirman Kav. 52-53Jakarta 12190

Phone. (021) 2903 5177Facsimile. (021) 2903 5166

Website:www.bosowasekuritas.co.id

PT Dhanawibawa SekuritasIndonesia

Indonesia Stock ExchangeBuilding Tower I 17th Floor Suite

1705Jl. Jend. Sudirman Kav. 52-53

Jakarta 12190Phone: (021) 515 1678; 515

1679 (hunting)Facsimile: (021) 515 1226Website: www.dcoins.co.id

PT Erdhika Elit SekuritasSucaco Building, 3rd Floor

Jl. Kebon Sirih Kav. 71Jakarta 10340

Phone: (021) 3983 6420Facsimile: (021) 315 2841; 3983

6422Website: www.erdhika.com

PT KGI Sekuritas IndonesiaSona Topas Tower, 11th Floor

Jl.Jend.Sudirman Kav. 26Jakarta 12920, IndonesiaPhone. (021) 250 6337

Facsimile. (021) 250 6351/52Website: www.kgi.id

PT Magenta Kapital SekuritasIndonesia

Menara Batavia, 23rd FloorJl. K.H. Mas Mansyur Kav. 126

Jakarta 10220, IndonesiaPhone. (021) 5793 0078

Facsimile. (021) 5793 0079Website:

www.magentacapitalindonesia.com

PT Panca Global SekuritasTbk

Indonesian Stock ExchangeBuilding Tower I, Suites 1706AJl. Jend. Sudirman Kav. 52-53

Jakarta 12190Phone. (021) 515 5456

Facsimile. (021) 515 5466Website: www.pancaglobal.co.id

PT Phillip Sekuritas IndonesiaANZ Tower 23Bth Floor

Jl. Jend. Sudirman Kav. 33AJakarta 10220

Phone. (021) 5790 0800Facsimile. (021) 5790 0809Website: www.phillip.co.id/id

PT Profindo Sekuritas IndonesiaPermata Kuningan Building, 19th

FloorJl. Kuningan Mulia Kav. 9c, Guntur

SetiabudiJakarta 12980, IndonesiaPhone. (021) 8378 0888

Facsimile. (021) 8378 0889

PT Yulie Sekurindo TbkPlaza Asia, 5th Floor

Jl. Jend. Sudirman Kav. 59Jakarta 12190

Phone. (021) 5140 2181Facsimile. (021) 5140 2182

Website:www.yuliesekurindo.com

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Website: www.profindo.com

In addition to the offices of the Joint Lead Underwriters and Underwriters, the Prospectus and ShareSubscription Form (FPPS) are available at the Public Offering Counters at:

PT Datindo EntrycomJl. Hayam Wuruk No. 28

Jakarta 10120