Prospektus PT Integra Indocabinet Tbk English

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Effective Date June 14, 2017

Public Offering Period June 15 - 16, 2016

Allotment Date June 19, 2017

Electronic Distribution Date June 20, 2017

Subscription Fund Refund Date June 20, 2017

Listing 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 THE ACCURACY OR COMPLETENESS OF THE CONTENTS OF THIS PROSPECTUS. ANY STATEMENT CONTRADICTING THE ABOVE SHALL CONSTITUTE AN UNLAWFUL ACT. THIS PROSPECTUS IS IMPORTANT AND NEEDS IMMEDIATE ATTENTION. WHEN THERE ARE DOUBTS ON THE ACTION TO BE TAKEN, PROSPECTIVE INVESTORS SHOULD SEEK PROFESSIONAL ADVICE.

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

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 District Sidoarjo 61253 – Indonesia

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

E-mail: [email protected] Website: www.integrafurniture.co.id INITIAL PUBLIC OFFERING

The Company is offering 1,250,000,000 new shares comprising of ordinary registered shares (the "Offering Shares"), representing 20.0% of the issued and fully paid-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 be offered 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 Application Form ("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 in all matters with the other ordinary registered shares of the Company that have been issued and fully paid, including the right to receive dividend distributions, the right to cast a vote in a general meeting of the shareholders of the Company (the "Shareholders"), the right to receive bonus share distributions and preemptive rights.

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., a Notary in Jakarta, and Directors Decree Letter No. 006/ITG/03/2017 dated March 8, 2017, the Company adopted (a) the employee shares ownership program through the Employee Stock Allocation (the "ESA") program by allocating 0.5% of the Offering Shares representing 6,250,000 Offering Shares to its employees and (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 Company immediately 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 in Chapter I of this Prospectus.

JOINT LEAD UNDERWRITERS

PT BAHANA SEKURITAS PT BCA SEKURITAS PT DBS VICKERS SEKURITAS INDONESIA

UNDERWRITERS

PT 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 SET OUT 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 BE DISTRIBUTED 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 BE SUSTAINED. THERE IS THEREFORE A RISK THAT THERE WILL NOT BE A LIQUID MARKET FOR THE OFFERING SHARES DUE TO, AMONG OTHERS, THE LIMITED NUMBER OF THE COMPANY’S SHAREHOLDERS.

This Prospectus is issued in Jakarta on June 15, 2017

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The Company filed a Registration Statement, in connection with the Initial Public Offering, with the OJK through letter No. 011/ITG/04/2017 dated April 5, 2017, in accordance with the requirements set 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 accordance with the Securities Registration Preliminary Agreement entered into between the Company and the IDX on April 3, 2017, following the satisfaction of the securities registration requirements set by the IDX. In the event the Company fails to satisfy the registration requirements set by the IDX, the Initial Public Offering shall be null and void and the subscription funds paid will be refunded to the subscribers 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 Offering are fully responsible for the data presented in this Prospectus to the extent of their respective roles in accordance with the prevailing laws and regulations in the Republic of Indonesia, as well as their respective 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 in connection with this Initial Public Offering that is not disclosed in this Prospectus.

All capital market supporting professionals and institutions participating in the Initial Public Offering are 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 and institutions is available in Chapter XIV of this Prospectus.

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

THIS INITIAL PUBLIC OFFERING IS NOT REGISTERED UNDER ANY LAWS AND REGULATIONS OTHER THAN THOSE PREVAILING IN INDONESIA. NOTHING IN THIS PROSPECTUS OR THE OTHER DOCUMENTS PREPARED IN CONNECTION WITH THIS INITIAL PUBLIC OFFERING CONSTITUTES AN OFFER TO SUBSCRIBE FOR THE OFFERING SHARES IN ANY JURISDICTION OUTSIDE INDONESIA UNLESS SUCH OFFER DOES NOT CONTRADICT OR CONSTITUTE A VIOLATION UNDER THE PREVAILING LAWS AND REGULATIONS OF SUCH JURISDICTIONS.

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DEFINITIONS AND ABBREVIATIONS

The abbreviations and terms used in this Prospectus shall have the meaning assigned to them as described 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 a securities account and/or a securities sub-account with KSEI, which may be Custodian Banks and/or Securities Companies.

Affiliate Refers to affiliates as defined under Article 1 Number 1 of the Capital Market 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; or

f. is a principal shareholder of such party.

Affiliated

Parties/Companies

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

Allotment Confirmation Form or FKPS

Refers to the Allotment Confirmation Form under the name of a subscriber, which serves as proof of ownership of the Offering Shares sold by the Company in the Primary Market.

Allotment Confirmation Form Distribution Date

Refers to the date on which the Allotment Confirmation Forms or FKPS are distributed, which shall also be the date of the electronic distribution of the Offering Shares to the subscribers’ accounts.

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

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

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

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

Capital Market Law or CML Refers to Law of the Republic of Indonesia No. 8 of 1995 dated November 10, 1995 relating to the Capital Market, which was published in the State Gazette of the Republic of Indonesia No. 64 of 1995, Supplement No. 3608.

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

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

Companies Law Refers to the Law of the Republic of Indonesia No. 40 of 2007 dated August 16, 2007, relating to the Limited Liability Companies, which was 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 electronic systems such as the Internet, websites or other computer networks.

Effective Statement Refers to the satisfaction of all requirements pertaining to the Registration Statement in accordance with the provisions of Number 4 Regulation No. IX.A.2 Annex to the Decree of Bapepam & LK Chairman Number: Kep-122/BL/2009 dated May 29, 2009, as described below:

a. on the basis of elapsed time as set forth below:

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

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

b. on the basis of a declaration of Effective Statement from the OJK stating that no further changes and/or additional information is required.

EU Refers to the European Union.

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

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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 Exchange or the IDX

Refers to PT Bursa Efek Indonesia, a limited liability company domiciled in Jakarta, where the Company’s shares are expected to be listed.

Initial Public Offering or Public Offering

Refers to the offering of the Offering Shares by the Company to the Public, pursuant to the terms and conditions set out in the Shares Underwriting Agreement and the procedures set out in the Capital Market Law and the prevailing regulations.

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

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

KSEI Refers to PT Kustodian Sentral Efek Indonesia, domiciled in Jakarta,

which is a Depository and Settlement Institution responsible for the administration of shares in a share offering pursuant to the Shares Registration in the Collective Depository Agreement.

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

Ministry of Law and Human Rights

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

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

Offering Period Refers to the period in which the subscription of the Offering Shares may be conducted and the FPPS may be submitted by the public to the Joint Lead Underwriters, Underwriters and/or Selling Agents set out in the Prospectus and FPPS, except in the event that such offering period is shortened, in accordance with the prevailing law and regulations.

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

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

OJK Refers to the Otoritas Jasa Keuangan, an independent institution

replacing Bapepam and LK, which has the function, responsibilities and authority to regulate, supervise, examine and investigate as set out in the Law No. 21 of 2011 concerning the Financial Services Authority which duties and responsibilities include the regulation and supervision of financial service activities in banking, capital market, insurance, pension fund, public offering, financing institutions and other financial institutions.

OJK Regulation No. 7 of 2017

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

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

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

Refers to OJK Regulation No. 32/POJK.04/2014 in relation to the Plan and Organization of General Meeting of Shareholders of Public Companies which has been amended to become OJK Regulation No. 10/POJK.04/2017. Nomination and Remuneration Committee of Issuers or Public Companies.

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

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

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Option Life Refers to the period of validity for stock options which have been issued, which a holder of the stock options may exercise prior to expiry, in each exercise period determined by the Company in accordance with the prevailing laws and regulations applicable in the capital market.

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

Preliminary Offering Refers to direct and indirect solicitation of Offering Shares using the Preliminary Prospectus immediately subsequent to the announcement of the Abridged Prospectus in the newspapers to, among others, assess the Public’s interest in the Offering Shares obtaining indications of interests for the number of Offering Shares to be subscribed based on the estimated Offering Price.

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

Prospectus Refers to the final written document issued in relation to the Initial Public Offering for the purposes of soliciting purchases for the Offering Shares.

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

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

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

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whether in whole or in part, as a result of allotment, or in the event that the Initial Public Offering is postponed or canceled. Subscription funds must be returned by the Allotment Manager or selling agent to the subscribers, no later than 2 (two) working days after the allotment date or after the date of the announcement of such postponement or cancellation. Provisions regarding these dates are set out in Bapepam-LK Regulation no. IX.A.2 in relation to the Registration Procedures for Initial Public Offering.

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

Regulation No. VIII.G.12 Refers to Bapepam Regulation Number. VIII.G.12 Annex to the Decree of Bapepam Chairman No. Kep-17/PM/2004 dated April 13, 2014, in relation to the Guidelines on Audit by Accountant on Securities 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 of Bapepam-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 of Bapepam-LK Chairman Number: Kep691/BL/2011 dated December 30, 2011, in relation to the Securities Subscription and Allotment in a Public Offering.

Regulation No. IX.A.8 Refers to Bapepam & LK Regulation No. IX.A.8 Annex to the Decree of Bapepam & LK Chairman No. Kep-41/BEI/012000 dated October 27, 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 of Bapepam-LK Chairman Number: Kep-412/BL/2009 dated November 25, 2009, in relation to the Affiliated Transactions and Conflict of Interest on Certain Transactions.

Regulation No. IX.E.2 Refers to Bapepam-LK Regulation No. IX.E.2 Annex to the Decree of Bapepam-LK Chairman Number: Kep-614/BL/2011 dated November 25, 2009, in relation to Material Transactions and Changes of Main Business Activities.

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

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

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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 prepared by each of the Selling Agents and/or Underwriters based on the order of subscriptions.

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

Share Subscription Application Form or FPPS

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

Shareholder Register or SR Refers to the shareholder register issued by KSEI, which contains information in relation to the share ownership administered in the Collective Depository at KSEI based on the data provided by the Account Holders to KSEI.

Shares Underwriting Agreement

Refers to the Deed of the Company’s Shares Underwriting Agreement No. 64 dated March 23, 2017, read together with Amendment I of the Shares Underwriting Agreement of the Company’s Public Offering No. 1 dated May 2, 2017 and Amendment II of the Shares Underwriting Agreement 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 financial statements are consolidated with the Company based on the Indonesian Generally Accepted Accounting Principles (“PSAK”).

The Company Refers to PT Integra Indocabinet Tbk

UMR Refers toUpah Minimum Regional,or Regional Minimum Wage

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

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

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INDUSTRY TERMS

Case goods Refers to furniture with compartments for storage.

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

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

FSC Refers to the Forest Stewardship Council, an international non-profit

organization dedicated to promote responsible and eco-friendly forest management. The FSC does this by setting standards on forest products, 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 coat surfaces 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 theSistem Verifikasi Legalitas Kayu(the "SVLK") or Timber

Legality Assurance Verification System, a tracking system designed on a multi-stakeholders basis to ensure the legality of sources of wood that are distributed and traded in Indonesia, to ensure the wood and the wood materials are sourced from or originated from sources with origin and management in satisfaction of legal requirements.

The Global Forest and Trade Network ( the "GFTN")

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

Tropical Forest Trust (the "TFT")

Refers to an organization based in the United States of America, which assists its member firms to manage their production and supply chain processes, 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 resolve various complicated issues.

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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 Direct Subsidiaries 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

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SUMMARY

The following summary is prepared based on the facts and judgments that are considered material by the Company, which constitutes an integral part of this Prospectus and should be read together with other information, including the consolidated financial statements and notes to the consolidated financial statements of the Company in this Prospectus. The Company’s financial information is prepared in Rupiah 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 of Establishment 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 the Republic of Indonesia by Decree No. C2-320.HT.01.01.TH.90 dated January 20, 1990, and registered in the registry of the Surabaya District Court under No. 180/1990 dated February 21, 1990 (the "Deed of Establishment").

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activities for the domestic market. In 2015, the Company together with WoodOne International Ltd established an Indirect Subsidiary, 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 Group is based in Sidoarjo, East Java, and consists of eight companies, which includes five manufacturing companies, one distribution company, and two forestry concession companies. The Group 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 to engage in industrial, trade and service businesses.

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

Main Business Activities:

1. To engage in industrial activities, including among others, the furniture, wood, and cork product business, 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 market share. Some of these competitive advantages are as follows:

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

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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 this Prospectus.

Business Competition

Based on data issued by Statistics Indonesia (the "Badan Pusat Statistik"), there were approximately 965 wooden furniture manufacturers in Indonesia in 2014. Out of these 965 wooden furniture manufacturers, approximately 263 or 27.3% could be categorized as large scale manufacturers with total production facilities areas of more than 2.5 hectares and production capacities of more than 10 containers per month. The above data indicates that the wooden furniture manufacturing sector in Indonesia is very large and fragmented, with many small-scale production facilities supporting the need of local communities and rural areas. (Source: Euromonitor International Limited, Manufacturing and Distribution 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 market opportunities. 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 a projected GDP growth of 5.1% in 2016. Private consumption and public capital expenditures are projected to be the main drivers of the Indonesian economy in 2016. Continuous policy reform may help ease the impact of declining global demand and money market volatility. Faced with a persistent downturn in the commodity sector, Indonesia has an opportunity to develop its production and service sectors. The World Bank projected a GDP growth of 5.3% in 2017, while private consumption is estimated to increase slightly.

The increase in consumer spending is primarily driven by the growing middle-class. Based on data from Badan Pusat Statistik and Euromonitor’s report, Indonesian consumers have increased their annual spending on furniture, furnishings, carpets and other floor coverings from Rp16,070.2 billion in 2014 to Rp17,891.1 billion in 2016. Euromonitor also estimated that the Indonesian consumer expenditure on furniture 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 government housing projects.

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

Based on the report from Euromonitor, consumer expenditure on wooden furniture in the US grew from USD48.5 billion in 2014 to USD53.1 billion in 2016. This USD53.1 billion expenditure on wooden furniture represented more than half of the total expenditure on furniture of USD87.8 billion recorded in 2016, 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 gain further traction going forward. The expected increase in expenditure on wooden furniture is attributed to the strengthening demand for housing, rise in residential construction activities and discretionary spending increases. Based on Euromonitor’s research, interior designers and consumers alike are opting for wooden furnishing items for a classier natural look. The US consumers do not look at furniture as a long term investment or something to be kept as an antique. They tend to conduct frequent remodeling 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 than 50.0%, as follows:

No Subsidiary Line of Business Percentage of

Ownership

1. Intertrend Industrial and trade of industrial products

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

Nominal Value : Rp100

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

submission of the FPPS

Total Public Offering : Rp325,000,000,000

Estimated Offering Period : June 15 - 16, 2017

Estimated Listing Date on the IDX

: June 21, 2017

The Company hereby conducts an Initial Public Offering of 1,250,000,000 Offering Shares consisting of new ordinary registered shares, representing 20.0% of its issued and fully paid-in capital immediately following 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 upon submission of the FPPS. The aggregate amount to be raised in the Initial Public Offering is Rp325,000,000,000.

Pursuant to the Deed of Minutes of the Extraordinary General Meeting of 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 are as follows:

Share capital

comprising of ordinary registered shares with a nominal value of Rp100 per share

Description Number of Shares Total Nominal Value (Rp) %

Authorized Capital 20,000,000,000 2,000,000,000,000

Issued 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 0.86

Total Issued and Fully paid-in capital 5,000,000,000 500,000,000,000 100.00

Shares 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, the Company’s capital structure and shareholder composition prior to and immediately following the completion of the Initial Public Offering on a pro forma basis shall be as follows:

Share capital

Description

Prior to the Initial Public Offering Subsequent to the Initial Public Offering Number of

Authorized Capital 20,000,000,000 2,000,000,000,000 20,000,000,000 2,000,000,000,000 Issued 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 20.00

Total Issued and Fully paid-in capital

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Description

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 registered shares, the Company, on behalf of the founding Shareholders, shall also list 5,000,000,000 of the Company’s shares that were previously issued prior to the Initial Public Offering. Therefore, the total number of shares to be listed on the IDX shall be 6,250,000,000 shares, representing 100.0% of the total 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 dated March 7, 2017, drawn up before Fathiah Helmi, S.H., a Notary in Jakarta and Regulation No. IX.A.7, it has been resolved that up to 10.0% of the number of shares offered in a public offering of shares may be 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, in relation to the Employee Share Ownership program through the ESA program, it has been decided that 0.5% of the Offering Shares, representing 6,250,000 Offering Shares, shall be allocated to the ESA program (the "Award Shares"). The implementation of the ESA program shall comply with the provisions set forth in Regulation 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 the Company’s qualifying employees (each an "ESA Program Participant" and collectively, the "ESA Program Participants"), the quantum which shall 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 be awarded free of charge by the Company to all ESA Program Participants. The Award Shares are part of the 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 Initial Public Offering, the Company’s capital structure and shareholder composition prior to and immediately following the completion of the Initial Public Offering on a pro forma basis shall be as follows:

Share capital

consisting of ordinary registered shares with a nominal value of Rp100 per share

Description

Prior to the Initial Public Offering Subsequent to the Initial Public Offering and ESA Program Implementation

Authorized Capital 20,000,000,000 2,000,000,000,000 20,000,000,000 2,000,000,000,000 Issued and Fully paid-in

capital

- Public - - - 1,243,750,000 124,375,000,000 19.90

- ESA Program - - - 6,250,000 625,000,000 0.10

Total Issued and Fully paid-in capital

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Description

Prior to the Initial Public Offering Subsequent to the Initial Public Offering and ESA_{Program Implementation} Number of

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 to purchase up to 187,500,000 shares of the Company, representing up to 3.0% of the Company’s total issued and paid-in capital following the completion of the Initial Public Offering, which shall be issued from 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 shall be 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 and all the Stock Options available under the MESOP are granted and exercised, the Company’s capital structure and shareholder composition prior to and immediately following the Initial Public Offering on a pro forma basis shall be as follows:

Share capital

Description

Prior to the Initial Public Offering Subsequent to the Initial Public Offering, ESA Program_{Implementation and MESOP Implementation} Number of

Shares

Total Nominal

Value (Rp) % Number of Shares

Total Nominal Value

(Rp) %

- 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 2.91

5,000,000,000 500,000,000,000 100.00 6,437,500,000 643,750,000,000 100.00 Shares in Portfolio 15,000,000,000 1,500,000,000,000 13,562,500,000 1,356,250,000,000

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

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Proceeds from the Initial Public Offering, after deducting the aggregate estimated expenses incurred in relation 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 Group to finance capital expenditures, namely: the procurement of machinery and equipments, the acquisition of land and the opening of retail outlets.;

• The remaining shall be used by the Group as working capital, for, among others, financing the procurement 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 significance of 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 SUSTAINABILITY 1. Risk relating to laws and regulations

B. BUSINESS RISKS

1. Risk relating to foreign exchange fluctuations for the Company;

2. Risk relating to the supply of raw materials 3. Risk relating to fire at production facilities

4. Risk relating to the increase in the regional minimum wage levels 5. Risk relating to dependence on major customers

6. Risk relating to business competition

7. Risk relating to technological advancement

C. GENERAL RISKS

1. Risk relating to macroeconomic and global economic condition

2. Risk relating to the benchmark interest rate for loans 3. Risk relating to claims or legal suits

D. RISK FACTORS FOR INVESTORS

1. Risk relating to the fluctuation of the Company’s share price

2. Risk relating to foreign exchange rate fluctuations for foreign investors

3. Risk relating to the Company’s shares liquidity

4. Risk relating to the Company ability to pay dividends

5. 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

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audited by Teramihardja, Pradhono & Chandra (Rödl & Partner), Registered Public Accountants, with unmodified opinion and an emphasis of matter in relation to the change in the functional currency of the Company and certain Subsidiaries fromUSD to Rupiah.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

Description As of December 31

2014 2015 2016

ASSETS

Total Current Assets 714,878,444,636 1,012,072,609,385 1,327,702,268,541 Total Non-Current Assets 806,286,081,517 1,002,399,912,722 1,754,171,941,954

TOTAL ASSETS 1,521,164,526,153 2,014,472,522,107 3,081,874,210,495

LIABILITIES AND EQUITY

Total Current Liabilities 722,558,940,311 949,247,290,491 1,101,358,728,673 Total Non-Current Liabilities 202,247,213,669 358,242,003,734 550,482,499,996

Total Equity 596,358,372,173 706,983,227,882 1,430,032,981,826

TOTAL 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 31

2014 2015 2016

Net Sales 996,105,258,868 1,118,696,671,711 1,323,388,979,039

Cost of Goods Sold 836,916,693,334 876,991,059,336 865,229,995,699

Gross Profit 159,188,565,534 241,705,612,375 458,158,983,340

Profit Before Tax Benefit (Expense) 22,384,127,643 42,938,779,264 195,081,224,522

Profit for the Year 15,442,643,888 38,531,306,157 141,081,224,018

Total Other Comprehensive Income 19,277,390,875 90,512,855,709 647,991,100,057 KEY CONSOLIDATED FINANCIAL RATIOS

2014 2015 2016

Growth Ratios (%)

Net sales 15.20 12.31 18.30

Gross profit (0.31) 51.84 89.55

Profit before income tax benefit (expense) (55.48) 91.83 354.32

Profit for the year (70.29) 149.51 266.15

Comprehensive 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 14.74 Profit before income tax benefit (expense) to total assets 1.47 2.13 6.33 Profit before income tax benefit (expense) to equity 3.75 6.07 13.64

Comprehensive income for the year to net sales 1.94 8.09 48.96

Comprehensive income for the year to total assets 1.27 4.49 21.03

Comprehensive income for the year to equity 3.23 12.80 45.31

Financial Ratios (x)

Current assets to current liabilities 0.99 1.07 1.21

Non-current liabilities to equity 0.34 0.51 0.38

Interest-bearing debt to equity 1.23 1.53 0.88

Interest-bearing debt to total assets 0.48 0.54 0.41

Total liabilities to equity 1.55 1.85 1.16

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xxiii

2014 2015 2016

EBITDA/interest expense on loans 2.19 2.53 3.54

Return on total assets (ROA) (%) 1.02 1.91 4.58

Return on equity (ROE) (%) 2.59 5.45 9.87

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 Ratios as of December 31, 2016

Current ratio (minimum 1x) 1.21x

Total liabilities to equity (maximum 3x) 1.16x

Debt Service Coverage Ratio (DSCR) (minimum 1x) 2.85x

Gearing ratio/interest-bearing debt to equity (maximum 1.25x) 0.88x

Interest Service Coverage Ratio (minimum 1x) 3.54x

Receivables 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 is linked to the Company’s profit for the relevant fiscal year, with due consideration given to the Company’s financial soundness and without prejudice to the rights of the shareholders in a GMS to determine 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 Commissioners and Directors of the Company and shall be subject to the approval of GMS. The amount of dividends is subject to a number of factors, including but not limited to, net profit, reserve availability, capital expenditure requirements, operating results and cash balance. The above factors will ultimately depend on a number of conditions, including but not limited to, the successful implementation of business and financial strategies, which are affected by competition and regulation, general economic conditions and other conditions that are specific to the Company or the Company’s business. Most of the above factors referred to above are beyond the Company’s control.

Taking into consideration the above factors, the Company’s management intends to propose to the Annual GMS to resolve that the payout ratio of cash dividends to total net profit be set at a maximum of 35.0%, effective from the fiscal year of 2017.

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I. PUBLIC OFFERING

The Company hereby conducts an Initial Public Offering of 1,250,000,000 Offering Shares, representing 20.0% of the issued and fully paid-in capital of the Company immediately after completion of the Initial Public Offering, with a nominal value of Rp100 per share, that will be offered to the Public at an Offering Price of Rp260 per share, to be paid in full upon submission of the FPPS. The aggregate amount to be raised 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 the Company, including the right to receive dividends, the right to vote at a GMS, the right to receive bonus shares and preemptive rights.

Pursuant to the Deed of Minutes of the Extraordinary 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, and Directors Decree Letter No. 006/ITG/03/2017 dated March 8, 2017, the Company adopted (a) the employee shares ownership program through the ESA program by allocating 0.5% of the Offering Shares representing 6,250,000 Offering Shares to its employees and (b) the MSEOP and allocated up to 3.0% of the issued and fully paid-in capital of the Company immediately after the completion of the Initial Public 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 District Sidoarjo 61253 – Indonesia

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

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

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

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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 BE SUSTAINED. THERE IS THEREFORE A RISK THAT THERE WILL NOT BE A LIQUID MARKET FOR THE OFFERING SHARES.

Capital Structure and Shareholder composition

Pursuant to the Deed of Minutes of the Extraordinary General Meeting of 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 are as follows:

Share capital

Description Number of Shares Total Nominal Value (Rp) %

Authorized Capital 20,000,000,000 2,000,000,000,000

Issued 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 0.86

Total Issued and Fully paid-in capital 5,000,000,000 500,000,000,000 100.00

Shares 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, the Company’s capital structure and shareholder composition prior to and immediately following the completion of the Initial Public Offering on a pro forma basis shall be as follows:

Share capital

Description

Shares

Total Nominal

Value (Rp) %

Number of Shares

(Rp) %

- Public * - - - 1,250,000,000 125,000,000,000 20.00

Total Issued and Fully paid-in capital 5,000,000,000 500,000,000,000 100.00 6,250,000,000 625,000,000,000 100.00 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

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A. ESA

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., a Notary in Jakarta and Regulation No. IX.A.7, it has been resolved that up to 10.0% Offering Shares may be 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, in relation to the Employee Share Ownership Program through the ESA program, it has been decided that 0.5% of the Offering Shares, representing 6,250,000 shares, shall be allocated the ESA program as Award Shares. The implementation of the ESA program shall comply with the provisions set forth in Regulation 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 OF which 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 awarded free of charge by the Company to all ESA Program Participants. The Award Shares are part of the Offering 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; and

4. 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; and

- employees 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. The subscription and payment of ESA shares will be made by the Company during the offering period in accordance with the schedule of the Company’s Initial Public Offering. The parties for the administration of 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 criteria set 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 of

service, performance of the ESA Program Participants.

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

e. If participating employees are subject to administrative sanctions during the lock-up period, their rights over the Award Shares shall be void and such rights shall be available for allocation to other 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 as the 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 of which shall be equal to the total price of all Award Shares in the ESA program. Costs incurred with respect to the ESA program shall be borne by the Company and financed using the Company’s cash reserves.

- 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 shall be imposed in accordance with the prevailing tax regulations.

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

Share capital

Description

Prior to the Initial Public Offering Subsequent to the Initial Public Offering and ESA_{Program Implementation} Number of

Shares

Total Nominal

Value (Rp) % Number of Shares

(Rp) %

- Public - - - 1,243,750,000 124,375,000,000 19.90

- ESA Program - - - 6,250,000 625,000,000 0.10

5,000,000,000 500,000,000,000 100.00 6,250,000,000 625,000,000,000 100.00 Shares in Portfolio 15,000,000,000 1,500,000,000,000 13,750,000,000 1,375,000,000,000

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

Tax Aspects of the ESA Program

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Subsequently, upon expiry of the lock-up period under the ESA program, the ESA Program Participants are allowed to sell such shares through the IDX or outside the IDX, and the following tax provisions shall apply 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 the prevailing 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 up to 3.0% of the Company’s total issued and paid-in capital following the completion of the Initial Public Offering, 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 the Company’s Directors on the fourteenth Business Day prior to the distribution date of the stock options of each 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 Shares and shares purchased upon the exercise of stock options from the MESOP shall have the same and equal rights in all matters, including the right to receive dividend distribution, the right to cast vote in a GMS, the right to receive bonus share distribution and preemptive rights as set out in the Companies Law and Capital Market Law.

The Company’s shares issued upon the exercise of the stock options pursuant to the MESOP will be listed 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 Decree of the Directors of PT Bursa Efek Indonesia No. Kep-00001/BEI/01-2014 dated January 20, 2014. The MESOP will be administered by the Directors under the supervision of the Board of Commissioners and shall be reported in the GMS.

Prospektus PT Integra Indocabinet Tbk English

PT INTEGRA INDOCABINET TBK

TABLE OF CONTENTS

DEFINITIONS AND ABBREVIATIONS

INDUSTRY TERMS

COMPANY NAMES ABBREVIATION

SUMMARY

I.

PUBLIC OFFERING