Deloitte Indonesia

The Journey in Going Public

December 2016
Understanding of Pre-IPO &
IPO Process

© 2016 PT Deloitte Konsultan Indonesia Corporate Finance Advisory 2

IPO Proposal
Understanding of Pre-IPO & IPO Process
Requirements for the Applicant
Criteria Main Board Development Board
Start of company’s business At least 36 months consecutively At least 12 months

Submit the last 3 (three) years audited financial

Obtain unqualified opinion for 12 months
Audited Financial Statements statements and obtain unqualified opinion for the last 2
and interim (if there are any)
(two) years and interim (if there are any)

Net tangible assets At least IDR 100 billion At least IDR 5 billion

1 last fiscal year and the latest interim (if

Unqualified Opinion 2 last fiscal years and the latest interim (if any)
any)

For prospective listed companies with loss

Operational Income Record profit at least for the last fiscal year in profit or have not recorded revenue or
operated for less than two years*

• At least 150 million shares

Number of shares offered
• At least 300 million shares
• ≥ 20%, for company with equity value
• ≥ 20%, for company with equity value < IDR 500
< IDR 500 billion before IPO
billion before IPO
• ≥ 15% for company with equity value
• ≥ 15% for company with equity value IDR 500
IDR 500 billion – IDR 2 trillion before
billion – IDR 2 trillion before IPO
IPO
• ≥ 10% for company with equity value > IDR 2
• ≥ 10% for company with equity value >
trillion before IPO
IDR 2 trillion before IPO

Number of stockholders At least 1000 stockholders At least 500 stockholders

Registration Fee IDR 25 million IDR 25 million

Notes:
(*) Has to record operating profit and net profit as reflected in the financial projection in the second fiscal year after the listing period
(*) Prospective Listed Company engaged in some industries requires a long time to reach the break-even point (such as: infrastructure, plantation crops,
concession rights Forest Management (HPH) or the Industrial Plantation Forest (HTI) or other business fields relating to the public service). Based on financial
projections, these prospective candidates have to book operating income and net income by the end of the book to the 6th (sixth) at the latest.

© 2016 PT Deloitte Konsultan Indonesia Corporate Finance Advisory 3

IPO Proposal
 Understanding of Pre-IPO & IPO Process
Overview of IPO – The Process
3 - 6 months prior to
IPO Preparation
Pre – IPO
Preparation
• Capital Restructuring
• Shareholding
Restructuring
• Investment Restructuring
Capital Restructuring
Injection of additional paid in capital
Merger and acquisition (M&A) with other
Companies (affiliate or 3rd party)
Asset revaluation
Capitalization of other paid in capital (if any)
© 2016 PT Deloitte Konsultan Indonesia
12 – 18 weeks 10 – 12 weeks
IPO Preparation Public Offering Listing & Post IPO
• Appointment of Capital • Submission of • Listing on Indonesia
Markets Supporting Registration Statement Stock Exchange
Institutions to OJK • Regular Reporting to
• Audit and Due Diligence • Roadshow & Indonesia Stock
Process Bookbuilding Process Exchange and OJK
• Preparation of • Offering to Public
Registration Statement
• Research Analyst
Reports and Offering
Circular (Prospectus)
• Pre-marketing process
• Appointment of
Corporate Secretary
Shareholding Restructuring Investment Restructuring
 Individual vs corporate shareholder  Consolidation, equity or cost
 Domestic vs Foreign  Domicile of consolidated subsidiaries
 Founder vs Public (how much will be offered (accounting principles used, cut off)
to public)  Business segment, different accounting
 Transaction among shareholders (restriction, policies, different public accountant
valuation)
Corporate Finance Advisory 4
IPO Proposal
 Understanding of Pre-IPO & IPO Process
Overview of IPO – Understanding the Process as Ruled by OJK
min 3 working max Max 3
days days
2 days
45 days
Effective Share
Pre-IPO Registration Offering
Statement from Allotment Recording
Activity Statement Period
OJK And Return

Max 3 days
Restructuring OJK Process Announcement of Brief
Prospectus IPO Outcome is
► The Company ► Mini Expose In the newspaper Reported to OJK
► Capital Financial & Tax ► Comment (2 days prior to Offering)
► Vision Consultant
► Strategy
Internal Process
►Issuer max 10 days
Preparing
►Fin. Consultant ► FollowUp OJK’s
Registration
Comments
►Underwriter
Statement
► Preparing
►Accountant
► Setting Price
► Financial ►Legal Consultant Bapepam Decision
Projections ► Marketing Strategy
►Notary No. KEP-122/BL/2009
► Financial ► Public Expose
Statements ►Valuer dated May 29, 2009
► Road Show
► Management Letter ►Public Relation /
Legal Opinion ► Due Diligence
► ►Advertising
► Prospectus ► Company Visit
►Share Admin
► Agreements • If 45 days after any modification, OJK is not providing further
► Bureau
► Additional comments, then Registration Statement is considered complete
Documents and will be effective

180 days
Financial
Statement Date
Prevailing Financial Statement

© 2016 PT Deloitte Konsultan Indonesia Corporate Finance Advisory 5

IPO Proposal
Understanding of Pre-IPO & IPO Process
Requirements for the Applicant

 Legal entity formed as “Perseroan Terbatas” (PT)

 For prospective listed company with nominal value, the nominal value per share of at least IDR 100 (one
hundred Rupiah). For prospective listed company without nominal value, the initial offering price of at
General least IDR 100 (one hundred Rupiah)
 Good reputation management and complete documentation based on Stock Exchange Regulation
conducting same core business for at least 36 consecutive months

 Has an Independent Commissioner(s) for at least 30% from the total Board of Commissioners that can
be elected prior the listing period through the General Meeting of Shareholders (RUPS) and officially
Board of assigned after the listing period of the company
Commissioner and  Has an Independent Director1 for at least 1 (one) from the Board of Directors that can be elected prior
Director the listing period through the General Meeting of Shareholders (RUPS) and officially assigned after the
listing period of the company

 Has an audit committee

 Has the Internal Audit Unit who meet the requirements as stipulated in Bapepam-LK Number IX.I.7. on
Establishment and Guidelines for Internal Audit Agreement;
Audit Committee /
Corporate Secretary  Has a Board of Directors and Board of Commissioners who meet the requirements written in the FSA
Regulation No.33 / POJK.04 / 2014 of the Board of Directors and Commissioner of Issuers and Public
Companies
 Have a Company Secretary who meet the requirements written in the FSA Rules Regulation No.35 /
POJK.04 / 2014 on Corporate Secretary of Public Company

Notes:
(1) is not affiliated with the Controlling Shareholder of Listed Company concerned for at least 6 months prior to appointment as a Director of the Company; is
not affiliated with the Commissioner or Board of Directors; is not working as the executive director in another company; Not being a person or institution in
the capital market supporting professionals whose services are used by the Listed Company for 6 months prior to appointment as a Director.

Evidenced by: has never been convicted of a felony within the last 10 years; have not been declared bankrupt; never found guilty is causing companies who
have or are led declared bankrupt; not removed by disrespect of a job within the last 5 years (5) is not in guardianship
© 2016 PT Deloitte Konsultan Indonesia Corporate Finance Advisory 6
IPO Proposal
Understanding of Pre-IPO & IPO Process
IPO Process – Supporting Professionals
Appointment of supporting
professionals with various
expertise is one of key
success point in IPO process
© 2016 PT Deloitte Konsultan Indonesia
 Legal Counsel  Underwriter  Public Accountant
• Legal audit report • Coordinate the whole • Audited Financial
IPO process Statements
• Legal opinion
• Comfort Letter
• Record the agreement,
license, case, etc. • Financial Aspects of
Prospectus
 Share Registrar  Appraisal  EO / Public Relation
• Shareholder list • Appraise fixed assets • Prepare public
expose
• Allocation reports • Appraisal reports
• Dealing with mass
• Other IPO reports • Fairness opinion
media & press
release
 Notary  Industry Expert  Printing
• Legal documentation • Industry report • Print Prospectus
• Agreements • Relevant summary • Print the application
industry section for form and offering form
Prospectus
• Print the securities
certificate (if needed)
Corporate Finance Advisory 7
IPO Proposal
Understanding of Pre-IPO & IPO Process
Documents Registration to OJK

General Aspect
• Registration Statement Letter from The Company to OJK & LK
• Indicative Timetable
• Prospectus signed by The Company, Lead Underwriter, auditor, legal counsel, notary and appraiser
• Preliminary Agreement with IDX
• Signature Sample from The Company, underwriter, auditor, legal counsel, notary and appraiser
• Curriculum Vitae of The Company Board of Directors and Board of Commissioners
• Copy KTP / Passports / Other Identities (IMTA and KITAS, if any) from Company Board of Directors and Board of Commissioners
• Copy NPWP of the Company, Board of Directors and Board of Commissioners
• Statement letter from the Company, lead underwriter, auditor, legal counsel, notary and appraiser related to the submitted documents to
OJK
• Copy of approval letter from The Company Board of Commissioners related to The Company plan for Public Offering, if any
• Statement Letter from The Company, Board of Directors and Board of Commissioners involved or not involved in any lawsuit
• Statement Letter of “Akhlak Moral” from Company Board of Directors and Board of Commissioners
• Fixed Assets Reports from Appraisal
• Waiver on Covenants from Creditors

Accounting Aspect Legal Aspect

• Audited Financial Statement from the Company for the • Copy of Company Deed of Incorporation and shareholders
last 3 (three) years and interim (if any) structure in a form of corporation with all the changes
• Audited Financial Statement from the Company’s • Legal Opinion
Subsidiaries for the last 3 (three) years • Legal Audit
• Company Financial Projection for the next 5 years • Copy of Company UKL and UPL (AMDAL)
• Comfort Letter • Underwriting Agreements
• Representation Letter • Share Administration Agreement
• SKP/SPT for the last 3 (three) years

© 2016 PT Deloitte Konsultan Indonesia Corporate Finance Advisory 8

IPO Proposal
Are You Ready
for the Journey?

© 2016 PT Deloitte Konsultan Indonesia Corporate Finance Advisory 9

IPO Proposal
Are you ready to embark on an IPO Journey?

Why do you want to go for IPO?

• To raise capital
• To enhance value
• To provide an exit strategy for
existing shareholders
• Tax incentives
• Better managed company
be CONFIDENT
you are ready to list
A considered planning process will
leave you in the best position to
focus on what really matters –
interacting effectively with potential
investors

Are you eligible?

Are you suitable?
• >10% of shares in public
• Is there market interest in
hands
your sector?
• 3 years audited historical
• Do you have growth
financial statement
potential?
• Positive historical (at least 1
• Do you have a clear strategy
year) and future operating
and a comprehensive
profit
business plan?

© 2016 PT Deloitte Konsultan Indonesia Corporate Finance Advisory 10

IPO Proposal
How ready are you?

1
?

6 2
? ?

IPO
READY
5 3
? ?

4
?

© 2016 PT Deloitte Konsultan Indonesia Corporate Finance Advisory 11

IPO Proposal
How ready are you?

1
STRATEGY &
GROWTH STORY

6 2
GOOD
RESOURCE CORPORATE
GOVERNANCE

IPO
READY
5 3
BUSINESS CORPORATE &
PLAN TAX STRUCTURE

4
FINANCIAL
REPORTING

© 2016 PT Deloitte Konsultan Indonesia Corporate Finance Advisory 12

IPO Proposal
How ready are you? (Cont’d)

1 Strategy and growth story

• Do you have a clear vision for the future

2 of your business as a public company?

• Have you developed a clear and
supportable business strategy to engage
investors?
• What is the likely investor appetite?
• Have you benchmarked yourself against
your competitors?

Good corporate governance

• Have you considered a well developed corporate
governance framework?
• Are your internal controls and procedures up to the
standard required of a listed company?
• Do your IT systems have the capacity to fulfil the
requirements arising from your growth strategy?

© 2016 PT Deloitte Konsultan Indonesia Corporate Finance Advisory 13

IPO Proposal
How ready are you?

3 Corporate and tax structure

• Have you considered the most suitable

4 corporate vehicle for your IPO?

• Are there non-core activities that need to be
transferred or disposed?
• Do you have tax losses, risks, and
exposures that need to be addressed before
IPO?

Financial reporting and procedures

• Do you have an efficient financial reporting procedure?
• Does your financial reporting conform to the rules of PSAK?

© 2016 PT Deloitte Konsultan Indonesia Corporate Finance Advisory 14

IPO Proposal
How ready are you?

5
Forecasting and working capital

6 • Are the current procedures sufficient to

produce a reliable 5 years forecasts?
• Are longer term forecasts integrated into
the annual budgeting process?
• Are facilities committed for the length of
the working capital period?

Resource
• Do you have the sufficient resource and expertise
in-house to get through the IPO process?
• Do you have the depth and breadth of resource to
operate and report as a listed company?

© 2016 PT Deloitte Konsultan Indonesia Corporate Finance Advisory 15

IPO Proposal
Benefits and Challenges

© 2016 PT Deloitte Konsultan Indonesia Corporate Finance Advisory 16

IPO Proposal
Benefits and challenges

BENEFITS?? CHALLENGES??

© 2016 PT Deloitte Konsultan Indonesia Corporate Finance Advisory 17

IPO Proposal
 Benefits and challenges
Provide Liquidity, and Risk-
Diversifying Opportunity
 Bigger opportunity and platform for
existing shareholders to cash out
 Provide clear exit strategy for
investors thus ability to attract new
investors
Good Corporate Governance
 The Company will have to comply
with existing regulations (OJK and
IDX) which shall improve
transparency and accountability
which may translate into better
performance for the Company.
Enhance Company Prestige,
Visibility and Business Profile
 Going public is an outward sign of
credibility, solid reputation and
achievement
CHALLENGES
© 2016 PT Deloitte Konsultan Indonesia
Enhance Value
• IPO will create value to shareholders
as the Company will be valued
relative to comparable companies in
its industry
BENEFITS of
being a listed
company
Facilitates M&A Activities
• By using shares as currency, this will
enhance ability to fund growth
through acquisitions
Higher reporting requirements, costs, and obligations
Accountability to public shareholders
Immediate dilution of shareholding for existing shareholders
Low cost funding
 Access to credit: because a public
company increases company’s net
worth, the Company may find it
possible to borrow funds in the future
on more favorable terms
Tax Efficiency
 Founder shares are subject to final
tax of 0.5% plus 0.1% of the
transaction value
 Companies with free float shares
above 40% will be eligible for a 5%
corporate tax cut
Provide Employee Incentives
 ESA, ESOP and MSOP help to attract
and retain key employees
Corporate Finance Advisory 18
IPO Proposal
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© 2016 PT Deloitte Konsultan Indonesia