prospektus pt hanjaya mandala sampoerna tbk. (eng)

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Report the EGM resolution to IDX : October 12, 2015 Listing date of rights in IDX : October 26, 2015 Announcement of EGM resolution : October 12, 2015 Trading period of preemptive rights : October 26 – 30, 2015 Date of last trade of shares with the right

(cum)

Registration, payment and exercise

period of preemptive rights : October 26 – 30, 2015

• Regular and negotiations market : _{October 19, 2015} Distirbution of shares resulting from

exercised preemptive rights : November 3, 2015

• Cash market _: _{October 22, 2015} Last date of payment for

subscription for additional shares : November 3, 2015 Date of initial trate of shares without rights

(ex)

Allotment date _: _{November 4, 2015}

• Regular and negotiations market

: October 20, 2015 Refund for subscription for _{additional shares} : November 6, 2015

• Cash market : October 23, 2015

THE FINANCIAL SERVICES AUTHORITY (OTORITAS JASA KEUANGAN-“OJK”) MAKES NO REPRESENTATION OF APPROVAL OR DISAPPROVAL OF THESE SECURITIES, NOR HAS PASSED UPON THE AUTHENTICITY OR ADEQUACY OF THE CONTENTS OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY THEREOFSHALL BE A VIOLATION OF THE LAW

PT HANJAYA MANDALA SAMPOERNA Tbk Telp. : (031) 8431 699; Faksimili: (031) 8430 986

Website: www.sampoerna.com Jakarta Branch Office:

One Pacific Place, Lantai 18, Sudirman Central Business District (SCBD) Jl. Jend. Sudirman Kav. 52-53, Jakarta 12190, Indonesia

Phone: (021) 5151 234; Fax: (021) 5152 234 Email: investor.relations@sampoerna.com

LIMITED PUBLIC OFFERING (“LPO”) TO SHAREHOLDERS IN THE FRAMEWORK OF ISSUING RIGHT ISSUE (“RIGHTS”)

The Company issue a maximum of 269,723,076 (two hundred sixty nine million and seven hundred twenty three thousand and seventy six) registered common shares with nominal value of Rp 100 (one hundred Rupiah) per share. Every 65 (sixty five) existing shares whose name is written in the Company’s List of Existing Shareholders as of October 22, 2015 at 16:00 Western Indonesia Time is entitled to 4 (four) Rights, in which every 1 (one) Right gives the holder the right to purchase as much as 1 (one) New Share with an Exercise Price of Rp77,000 (seventy seven thousand Rupiah) per share, with full payment during the submission of the Additional Share Application Form. This LPO is carried out by the Company in order to fulfill the listing requirement where the total shares owned by non-controlling shareholders and non-majority shareholders at least 50,000,000 (fifty million) share and at least 7.5% (seven point five percent) of the number of shares in paid-in capital under Provision V.I of Indonesia Stock Exchange Regulation No. I-A regarding the Listing Of Shares and Equity Securities Other Than Shares Issued By a Listed Company.

The number of shares offered in the LPO through Rights Issue is the maximum number of shares that will be fully issued from the portfolio and will be registered in Indonesia Stock Exchange while always considering the regulations in force. The amount of funds to be received by the Company in this LPO is as much as Rp20.768.676.852.000 (twenty trillion seven hundred sixty eight billion six hundred seventy six million eight hundred two thousand Rupiah). Shares from LPO have the right equal and to the same degree in all respects including rights to dividends that have been full paid otherwise. Every Right in the form of fractions will be rounded down.

PT Phillip Morris Indonesia (“PMID”) as the primary shareholder of the Company will exercise a portion of its Rights in the LPO which is 600,640 (six hundred thousand six hundred and forty) Rights, where the remaining amount will akan sold to PT Mandiri Sekuritas based on the Rights Sale and Purchase Agreement dated September 11, 2015 as amended on October 1 2015 made between PMID and PT Mandiri Sekuritas, Rights belonging to PMID in whole or in part will be transferred through sale to PT Mandiri Sekuritas as the appointed Selling Agent, and subsequently PT Mandiri Sekuritas will execerise a portion of the preemptive rights and transfer a portion of those Rights. The resulting shares from the exercise of Rights and the Rights owned by PMID will be offered and sold to domestic and foreign investors through a LPO. Furthermore, PT Mandiri Sekuritas will distribute these shares to the securities account of the investors after the execution of the transaction through the Stock Exchange on the same day of the exercise of Rights owned by PMID by PT Mandiri Sekuritas, ensuring that the number of shares held by the public is 7.5% (seven point five percent) of the issued and fully paid-in capital and the shares held by PMID amounted to 92.5% (ninety-two point five percent) of the issued and paid-in capital after the LPO is completed.

If the new shares offered in the LPO is not entirely taken up by holders of Rights in the public portion, then the remaining will be allocated to the other public holders who susbscirbe for additional rights beyond their portion, as stated in the Rights Certificate or the Additional Share Application Form proportionally based on rights that have been exercised. If, after the allocation of the additional share subscription, the stock is still residual to the public portion, which is as much as 4,912,725 (four million nine hundred twelve thousand seven hundred twenty five) common shares, therefore PT Mandiri Securities, acting as the Standby Buyer is obliged to purchase the remaining shares, with the remaining shares shall be purchased by the Standby Buyer excluding shares derived from the exercised Rights in this LPO.

THIS LPO BECOMES EFFECTIVE AFTER IDX APPROVED BY THE EXTRAORDINARY GENERAL MEETINGS OF SHAREHOLDER (“EMGS”) IN THE COMPANY WHICH WILL BE HELD ON OCTOBER 9, 2015. IN CASE OF NO EGMS AFORE SAID AGREES THE ISSUANCE OF RIGHTS. THEN ANY ACTIVITY AND/OR ANY OTHER FORM OF ANY ACTION PERFORMED AND/OR PLANNED BY THE COMPANY IN ORDER TO ISSUE THE RIGHTS IN ACCORDANCE WITH SCHEDULE AFORE SAID OR IN THIS PROSPECTUS OR OTHER INSTRUMENTS IN CONNECTION WITH THE PLAN OF LPO SHALL BE DEEMED NEVER EXISTING AND CANNOT BE USED AS A BASIS OR FOR ANY REASON BY ANY PERSON TO COMMIT LEGAL ACTION IN ANY FORM AGAINST ANY PARTY INCLUDING THE COMPANY CAPITAL AND CAPITAL MARKET SUPPORTING PROFESSIONALS INSTITUTION DESIGNATED IN THE FRAMEWORK OF THIS LPO.

THESE RIGHTS ARE TRADEABLE INSIDE AND OUTSIDE INDONESIA STOCK EXCHANGE FOR NOT LESS THAN 5 (FIVE) BUSINESS DAYS FROM 26OCTOBER 2015 TO OCTOBER 30, 2015. NEW SHARES LISTING AS A RESULT OF RIGHTS EXECUTION WILL BE MADE IN INDONESIA STOCK EXCHANGE ON OCTOBER 26, 2015. DATE OF LAST RIGHTS IMPLEMENTATION IS OCTOBER 30, 2015 PROVIDED THAT RIGHTS THAT ARE NOT EXERCISED UP TO SAID DATE SHALL BE NO LONGER VALID.

IMPORTANT NOTICE TO THE SHAREHOLDER

EXISTING SHAREHOLDERS WHO EXERCISE NO RIGHT TO SUBSCRIBE NEW SHARES OFFERED UNDER THIS LPO PERSUANT TO ITS RIGHTS SHALL SUBJECT TO ANY DECREASE OF ITS SHAREHOLDING PERCENTAGE (DILUTION) IN THE MAXIMUM AMOUNT OF 5.8% (FIVE POINT EIGHT PERCENT). THE MAIN RISK THE COMPANY THE COMPANY IS DEPENDENT ON THE PRODUCTION AND SALE OF A SINGLE CATEGORY OF PRODUCT, AND ANY MATERIAL DETERIORATION OF THE MARKET CONDITION FOR CIGARETTES MAY ADVERSELY AFFECT ITS BUSINESS AND PROFITABILITY.

THE COMPANY WILL NOT ISSUE COLLECTIVE SHARES LETTER IN THIS LPO, BUT SUCH SHARES WILL BE DISTRIBUTED ELECTRONICLY AND WILL BE ADMINISTRATED IN CUSTODIAN OF CENTRAL SECURITIES INDONESIA

STANDBY BUYER

PT Mandiri Sekuritas

THE COMPANY ALONG WITH THE CAPITAL MARKET INSTITUTIONS AND PROFESSIONS IN RELATION TO THIS LPO IS FULLY RESPONSIBLE FOR ALL INFORMATION OR MATERIAL FACTS AS WELL AS FAIRNESS OPINION PRESENTED IN THIS PROSPECTUS, IN ACCORDANCE WITH EACH SCOPE OF WORK BASED ON THE RELEVANT PROVISIONS IN THE TERRITORY OF THE REPUBLIC OF INDONESIA AND THE CODE OF ETHICS AS WELL AS NORMS AND STANDARDS OF EACH PROFESSION.

THE COMPANY WILL NOT ISSUE COLLECTIVE SHARES LETTER IN THIS LPO, BUT THOSE SHARES WILL BE DISTIRBUTED ELECTRONICALLY THAT WILL BE ADMINISTERED IN THE COLLECTIVE DEPOSITORY PT KUSTONDIAN SENTRAL EFEK INDONESIA (KSEI).

RISKS FACED BY THE INVESTORS ARE PRICE AND SHARE LIQUIDITY RISKS THAT WILL AFFECT THE CAPITAL MARKET CONDITIONS IN INDONESIA.

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PT Hanjaya Mandala Sampoerna Tbk. (hereinafter in the Prospectus referred to as "the Company") has submitted a Registration Statement in relation to the Rights Issue to the OJK in Jakarta through letter No. 153/CLD/HMS/VIII/2015 on August10, 2015, in accordance with the requirements set forth in Rule No. IX.D.1 Attachment Decision of the Chairman of Bapepam No. Kep-26/PM/2003 dated July 17, 2003 on Preemptive Rights ("IX.D.1 Regulation") and Regulation No.IX.D.2 Attachment Decision of the Chairman of Bapepam No. Kep-08/PM/2000 dated March 13, 2000 on Guidelines for the Form and Content of Registration Statement for the Issuance of Preemptive Rights which is the implementation of the Law of the Republic of Indonesia No. 8, 1995 dated November 10, 1995 on Capital Markets, which was published in the official Gazette of the Republic of Indonesia No. 64 of 1995, Supplementary State Gazette No. 3608 (hereinafter referred to as "Capital Market Law") and the implemention of regulations.

The Company along with Institutions and Capital Market Supporting Professionals in the interest of this LPO shall be fully responsible for the accuracy of all data, information or material facts and honesty in opinion expressed in this Prospectus, in accordance with their respective duties under the provisions of the legislation in force in the territory of the Republic Indonesia as well as the code of ethics, norms and standards of their respective professions

In connection with this LPO, any affiliated party shall not make any representations or statements about the data that are not disclosed in the Prospectus without the prior written consent of the Company.

Insitutions and Capital Market Supporting Professions in this LPO does not have an affiliation with the Compain whether directly or indirectly as defined in the Capital Market Law.

If the shares offered in the LPO is not fully taken up by shareholders or holders of Rights Certificates, then the rest will be allocated to other shareholders who subscribe for additional rights in proportion to the number of preemptive rights that have been exercised by each shareholder who requested additional shares based on Exercise Price. Shares resulting from LPO have equal rights and are equal in all respects including the right to the dividend has been fully paid shares other. Shares issued in this Rights Issue has equal right and to the same degree in all respects including rights to dividends that have been full paid otherwise.

Under Regulation No. IX.D.1, in the event that shareholders have Rightsin the form of a fraction, then such Rights shall become the property of the Company and will be sold by the Company and the proceeds will be incorporated into the Company's account. Saham Baru yang berasal dari PUT ini akan dicatatkan di Bursa Efek bersama dengan saham-saham yang telah dicatatkan sebelumnya oleh Perseroan dengan memperhatikan Peraturan Pemerintah No. 29 tahun 1999 tentang Pembelian Saham Bank Umum.

Every amendment or addition regarding this Right Issue, will be announced the latest 2 (two) working days befor Extraordinary General

Meeting of Shareholder (“EGMS”)

THIS LPO HAS NOT BEEN REGISTERED PURSUANT TO ANY LAW OR REGULATION OTHER THAN THOSE PREVAILING IN THE REPUBLIC OF INDONESIA. FOR THOSE OUTSIDE THE TERRITORY OF INDONESIA RECEIVING THIS PROSPECTUS, THE SAID DOCUMENTS ARE NOT INTENDED AS DOCUMENTS OFFERING PURCHASE OF SHARES OR EXECUTING RIGHTS, UNLESS SUCH OFFER, OR SUCH SHARE PURCHASE OR EXECUTION OF RIGHTS, IS CONTRARY TO OR NOT A VIOLATION OF THE PREVAILING STATUTORY OR REGULATIONS IN SUCH COUNTRY. IN CASE OF ANY SHAREHOLDERS WHO ARE NOT INDONESIA CITIZEN WHICH UNDER CONDITIONS OF THE LEGISLATION IN THEIR COUNTRY IS PROHIBITED TO EXECUTE RIGHTS, THE COMPANY OR PARTIES DESIGNATED BY THE COMPANY RESERVES THE RIGHT TO REJECT ANY SUCH REQUEST OF THE PARTIES TO IMPLEMENT THE PURCHASE OF SHARES PURSUANT TO THEIR OWN RIGHTS.

PROSPECTUS CAN ONLY BE DISTRIBUTED IN INDONESIA. NOTHING CONTAINED IN THIS DOCUMENT CAN BE CONSIDERED AS AN OFFER TO SELL SECURITIES IN THE REGION THAT PROHIBIT THERETO. RIGHTS AND COMMON SHARES OF THE COMPANY TO BE ISSUED FROM THE EXERCISE OF RIGHTS HAVE NEVER AND WILL NOT BE REGISTERED UNDER THE TERMS OF THE UNITED STATES SECURITIES ACT OF 1933 and ITS AMENDMENTS OR IN A JURISDICTION OUTSIDE INDONESIA. THEREFORE, THE PERSONS IN THE UNITED STATES IS NOT ALLOWED TO EXERCISE THE RIGHTS, RIGHTS MAY NOT EXERCISED BY PERSONS OUTSIDE THE TERRITORY OF INDONESIA, IN WHICH THE OFFERING OR EXERCISE OF RIGHTS TO SHARES IS PROHIBITED BY LAW, AND THE COMPANY AND THE APPOINTED PARTIES ARE ENTITLED TO TREAT THE RIGHTS OR THE DOCUMENTATION RIGHTS BY THE FOLLOWING PERSONS AS INVALID.

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DEFINITIONS AND ABBREVIATIONS

Abridged Prospectus : Shall mean the abridged prospectus that is compiled and issued by the Company and announced in at leas 1 daily newspaper in Bahasa Indonesia circulated nationally.

Account Holder : Shall mean the person whose name is listed as the owner of a Securities Account in KSEI which includes the Custodian Bank and/or Securities Company and/or other party approved by KSEI with due regard to the legislation in capital markets and KSEI regulations.

Affiliation : Shall mean the parties as referred to in the Capital Market Law in Article 1 paragraph 1 and the implementing regulations, namely:

a. family relationship due to marriage and descendant until the second degree, both horizontally as well as vertically;

b. relationship between a party with employee, director or commissioner of such party; c. relationship between 2 (two) companies wherein the boards of directors or

commissioners have one or more of the same directors or commissioners; d. relationship between the Company and a Party, both directly or indirectly,

controlling or under the control of such company;

e. relationship between 2 (two) companies under the direct or indirect control of the same Party; or

f. relationship between company and the principal shareholder.

BAE : Shall mean Biro Administrasi Efek (Share Registrar)

Bank Custodian : Shall mean geneiral bank that have been approved by Bapepam and LK or OJK to act as a custodian

Bapepam dan LK : Shall mean the Capital Market and Financial Institution Supervisory Agency (Badan Pengawas Pasar Modal dan Lembaga Keuangan), an amalgamation of the Capital Market Supervisory Agency and the Directorate General of Financial Institution (DJLK, Direktorat Jenderal Lembaga Keuangan), as set out in the Decree of Finance Minister No.606/KMK.01/2005 dated 12-30-2005 concerning the Organization and Work Procedures of the Capital Market and Financial Institution Supervisory Agency and Finance Minister Regulation No. 184/PMK.01/2010 dated 10 October 2010 concerning Organization and Work Procedures of the Ministry of Finance, and/or its successors and beneficiary of its rights and responsibilities.

BNRI : Shall mean Berita Negara Republik Indonesia.

Business Day : Shall mean days between Mondays through Fridays, with the exception of national holidays as determined by the Government of the Republic of Indonesia or Normal Business days that due to certain circumstances are declared by the government of the Republic of Indonesia as Non-Business Days.

Calendar Day : Shall mean every day in one (1) year according to the Gregorian calendar without exemption.

Capital Market Law : Shall mean the Law of the Republic of Indonesia No. 8 of 1995 dated 10 November 1995 concerning the Capital Market, State Gazette of the Republic of Indonesia No. 64 of 1995, Supplement to No.3608, and its implementatiing regulations.

Collective Depository : Shall mean the depository services of securities owned jointly by more than one party whose interests are represented by the Custodian, as contemplated in the Capital Market Law.

Company : Shall mean PT Hanjaya Mandala Sampoerna Tbk, a limited liability company organized under the laws of the Republic of Indonesia and domiciled in Surabaya and the assignee of LPO.

Company Law : Shall mean Regulation No. 40 of 2007 dated August 16, 2007 on Limited Liability Companies, the State Gazette of the Republic of Indonesia No. 106 of 2007, Supplement No. 4756, following the implemention of regulations and any amendments or renewals in the future.

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accordance with the provision of the Capital Market Law covering KSEI, Securities Companies and Custodian Banks.

DPS : Shall mean an abbreviation of Daftar Pemegang Saham (Shareholders Register) that

forms a list issued by BAE.

: Shall mean the date on which OJK provide a statement of the effectiveness of the LPO Registration Statement.

EGMS : Shall mean an Extraordinary General Meeting of Shareholders of the Company carried out pursuant to the provision of the Company’s Articles of Association.

Exercise Price : Shall mean the price offered for every LPO every 1 (one) exercised right into new shares, which is Rp77,000 (seventy seven thousand Rupiah) per share.

GAAP : Shall mean Generally Accepted Accounting Principles

GMS : Shall mean the General Meeting of Shareholders of the Company carried out pursuant

to the provision of the Company’s Articles of Association.

Government : Shall mean Indonesian Government.

IAPI : Shall mean Institut Akuntan Publik Indonesia (the Indonesian Institute of Certified Public Accountants)

IDX : Shall mean the authority that will administer and provide the system and/or the means to meet the bid and offer of a security with the intention to trade the securities between other parties, which in this case is PT Bursa Efek Indonesia, a limited liability entity domiciled in South Jakarta, and/or its successors and beneficiary of its rights and responsibilities.

KSEI : Shall mean PT Kustodian Sentral Efek Indonesia (the Indonesian Central Securities Depository), domiciled in Jakarta, which carries on business as a Depository and Settlement Institution as defined in the Capital Market Law.

KSEI Regulation : Shall mean KSE Regulation No. KEP-0013/DIR/KSEI/0612 dated June 11, 2012 regarding Central Depository Services as approved by the OJK in accordance with decree No. CMFISA S-6953/BL/2012 dated June 6, 2012 regarding the approval of the draft Regulation of KSEI regarding Central Depository Services, the following amendments and/or additions-the addition and/or amendments at a later date.

Limited Public Offering or LPO

: Shall mean an offering as much by 269.723.076 (two hundred sixty-nine million seven hundred twenty-three thousand seventy-six) New Common Shares with a par value of Rp100 (one hundred Rupiah) per share, each holder of 65 (sixty-five) Old Share whose name is listed in the Register of Company Shareholders on October 22, 2015 at 16.00 WIB are entitled to 5 (five) Rights and every 1 (one) Right authorizes the holder to subscribe 1 (one) New Share with an Exercise Price of Rp77,000 (seventy seven thousand Rupiah) per share which must be paid in full at the time of submitting the Shares Subscription Form. Shares from LPO has the same right and equal to every aspect including right of dividend with all other shares. Each right in fraction will be rounded down.

Menhumkam : Shall mean the Minister of Justice and Human Rights of the Republic of Indonesia (formerly known as the Minister of Justice of the Republic of Indonesia, the Minister of Law and Legislation of the Republic of Indonesia or other names).

Nett – Profit/ (Loss) : Profit (loss) for particular period which can be distributed to shareholders

New Share : Shall mean common shares on behalf the names issued by the Company in the LPO with the nominal value of Rp100 (one hundred Rupiah)

Old Share : Shall mean the registered common shares which have been subscribed and fully paid-up by Shareholders on the date of this Prospectus.

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PMI : Shall mean Philip Morris International Inc.

PMID : Shall meanPT Philip Morris Indonesia

Prospectus : Shall mean the offering document as defined in Article 1 Point 1 of the Capital Market Law

Public : Shall mean individuals and/or entities, both Indonesian Citizen/Indonesian Agencies and Foreign Citizens/Foreign Agencies both residing/domiciled in Indonesia or residing/domiciled outside the territory of Indonesia.

Registration Statement

: Shall mean the registration statement referred to in Article 1 point 19 of the Capital Market Law in conjunction with Bapepam Regulation IX.C.1 on Guidelines for the Form and Content of Registration Statement for a Public Offering Attachment Decision of the Chairman of Bapepam No. Kep-42/PM/2000, dated October 27, 2000 the following documents filed by the Company to the OJK before the offering to the public, including changes, additions and rectification to meet the requirements of the OJK.

Rights Certificate : Shall mean the title deed or certificate issued by the Company to Shareholders as prove of preemptive rights, which can be traded during Rights Certificate trading period.

ROA of the Company : Shall mean the Return on Assets of the Company which is calculated based on the ratio of profit before tax divided by the average total assets on the last day of each month during the year.

ROE of the Company : Shall mean the Return on Equity of the Company which is calculated based on profit before tax divided by the average total equity (Tier 1) on the last day of each month during the year.

Securities : Shall mean securities include debt instruments, commercial paper, stocks, bonds, proof of the debt, Participation Unit of Collective Investment Contrac, Futures Contract on Exchange, and any derivatives of Securities, as defined in Article 1 paragraph 5 of the Capital Market Law.

Securities Account : Shall mean the securities account that contains records on the positions of shares and/or funds owned by Shareholders administered at KSEI, or the Account Holder under agreement of the securities account opening signed by the shareholders and the Securities Company or Custodian Bank.

Share from Right Issue

: Shall mean all shares resulting from the exercise of the Rights are New Shares acquired by the holders of the Rights in the LPO that is as much as 269,723,076 (two hundred and sixty nine million seven hundred twenty-three thousand seventy-six) shares.

SKM : Shall mean machine-made kretek cigrattes

SKT : Shall mean hand-rolled kretek cigrattes

SME : Shall mean Small Medium Enterprise.

SPM : Shall mean machine-made white cigarettes

Standby Buyers : Shall mean Remaining Share Buyers, with the terms as set forth in the Agreement, which in this case is PT Mandiri Sekuritas.

Subsidiaries : Shall mean companies whose financial statements are consolidated with the Holding Company in accordance with the statement of the accounting standards that apply in Indonesia.

The Financial Services Authority (Otoritas Jasa Keuangan - OJK)

: Shall mean the independent agency and free from interference by other parties, which has the functions, duties, and authority of regulation, supervision, inspection, and investigation as referred to in Law No. 21of 2011 dated 22 November 2011 (concerning the Financial Services Authority (Law No. 21 of 2011). As of 31 December 2012, the functions, duties, and authority of regulation and supervision of the financial services activity in the Capital Market sector, switched from Bapepam and LK to OJK under Article 55 of Law No. 21 of 2011.

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ABBREVATIONS OF SUBSIDIARIES AND ASSOCIATES

PMI : Philip Morris International Inc.

PMID : PT Philip Morris Indonesia

SIP : Sampoerna International Pte. Ltd.

Handal : PT Handal Logistik Nusantara

TD : PT Taman Dayu

Union Sampoerna : PT Union Sampoerna Dinamika

Wahana Sampoerna : PT Wahana Sampoerna

HMSE : PT Harapan Maju Sentosa

Persada : PT Persada Makmur Indonesia

Panamas : PT Perusahaan Dagang Dan Industri Panamas

Sampoerna Printpack : PT Sampoerna Printpack

GTD : PT Golf Taman Dayu

Agasam : PT Agasam

SIS : PT Sampoerna Indonesia Sembilan

STAL : Sampoerna Tabacos America Latina Ltda.

STCO : Sterling Tobacco Corporation

STC : Sampoerna Taiwan Corporation

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SUMMARY

The summary below constitutes an inseparable part and should be read in conjunction with more detailed information, including the consolidated financial statements as well as the relevant notes on the relevant consolidated financial statements, as well as business risks, all of which are contained in this Prospectus. All financial information contained in this Prospectus originates from the consolidated financial statements of the Company presented in Rupiah currency and in accordance with Indonesian Financial Accounting Standard.

1. Overview

The Company was first established in Surabaya in 1963 under the name of PT Perusahaan Dagang Dan Industri Panamas with the cigarette industry being its main business unit.

The company was established based on Deed of Establishment No. 69 dated on 19 October 1963 which is the amended by Deed No. 46 dated 15 April 1964, which was passed before Anwar Mahajudin, at the time a notary in Surabaya, which has been approved by Minister of Justice of the Republic of Indonesia through Determination No. J.A.5/59/15 dated 30 April 1964, and has been registered in the public register in District Court in Surabaya No. 654 and No. 655 dated 18 May 1964, and announced in BNRI No. 94 tanggal 24 November 1964, Tambahan No. 357.

Articles of Association has been amended several times and was lastly amended by the deed of amendment No. 21 dated May 12 2015 which was passed before Aryanti Artisari, S.H., M.Kn., Notary of South Jakarta Administration and has obtained the approval from Menkumham based on Decree No. AHU-0935168.AH.01.02.TAHUN 2015 and receipt of notification amendment No. AHU-AH.01.03-0931826 both dated on 13 May 2015, and has been registered in the Company Register at the Ministry of Justice and Human Rights of the Republic of Indonesia No. AHU-3504523.AH.01.11.TAHUN 2015 dated 13 May 2015, in which the shareholders approved the change of the Articles of Association of the Company , among others in order to conform with the provisions of the OJK’s regulations

Per 30 June 2015, Participation of the Company in subsidiaries, Associates and Indirect Subsidiaries is presented in the following table:

Company Name Participation

Year Business line

Direct Ownership Percentage

Effective Ownership Percentage

Sampoerna International Pte. Ltd. 1995 Equity Holdings 100.00% 100.00%

PT Handal Logistik Nusantara 1981 Expedition and Warehousing 99.98% 100.00%

PT Taman Dayu 1978 Property Development 99.73% 100.00%

PT Union Sampoerna Dinamika 2005 Equity Holdings 99.99% 100.00%

PT Wahana Sampoerna 1989 Property Trading and Services 99.94% 100.00%

PT Harapan Maju Sentosa 1990 Cigarette Manufacturing and Trading 99.99% 100.00%

PT Persada Makmur Indonesia 2003 Cigarette Manufacturing and Trading 99.00% 100.00%

PT Perusahaan Dagang Dan

Industri Panamas 1992 Cigarette distribution 99.90% 100.00%

PT Sampoerna Printpack 1985 Printpack and Packaging 80.02% 100.00%

PT Golf Taman Dayu 1996 Leisure and Golfcourse Services 0.00% 100.00%

PT Sampoerna Indonesia

Sembilan*) 2002 Cigarette Manufacturing and Trading 1.00% 100.00%

PT Agasam 2003 Trading and Services 0.10% 100.00%

Sampoerna Tabacos America Latina Ltda.

Cigarette Manufacturing and Trading 0.00% 100.00%

Sterling Tobacco Corporation 1995 Cigarette Manufacturing and Trading 0.00% 100.00%

Sampoerna Taiwan Corporation 2001 Equity Holdings 0.00% 100.00%

Vinataba-Philip Morris Limited 1993 Cigarette Manufacturing, Trading and Marketing

49.00% 49.00%

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2. LIMITED PUBLIC OFFERING

Type of Offering : Rights issue

Nominal Value : Rp100 (One Hundred Rupiah)

Exercise Price : Rp77,000 (seventy seven thousand Rupiah)

Conversion Ratio : 65 (sixty-five) existing shares entitled to 4 (four) Rights Shareholder Dilution : 5.8% (five point eight percent)

Listing : IDX

The capital structure and shareholder structure of the company at the time the prospectus issued is as follows:

Description

Par Value of Rp 100,- pershare

Total Shares Total Nominal Value (Rp) %

Authorized Capital 6,300,000,000 630,000,000,000

Issued and Paid Up Capital:

- PT Philip Morris Indonesia 4,303,168,205 430,316,820,500 98.18%

- Public (with ownership of under 5%) 79,831,795 7,983,179,500 1.82%

Total Issued and Paid-Up Capital 4,383,000,000 438,300,000,000 100.00%

Unissued Shares 1,917,000,000 191,700,000,000

If all of the offered Rights in the LPO is entirely exercised by the Company's shareholders, the pro forma composition of the Company's share capital after the LPO are as follows:

Description

Total Shares Total Nominal Value (Rp) Persentase

Unissued Shares 1,647,276,924 164,727,692,400

If PMID as the primary shareholder of the Company exercise a portion of its Rights in the LPO that is 600,640 (six hundred thousand six hundred and forty) Rights, the pro forma composition of the Company's share capital after the LPO are as follows:

Description

Unissued Shares 1,647,276,924 164,727,692,400

If PMID as the primary shareholder of the Company exercise a portion of its Rights in the LPO that is 600,640 (six hundred thousand six hundred and forty) Rights, however minority shareholders do not fully exercise their Rights in the LPO, the pro forma composition of the Company's share capital after the LPO are as follows:

Description

- New Shares form Rights Issue not excercised by the

Company’s shareholders 4,912,725 491,272,500 0.10%

Unissued Shares 1,647,276,924 164,727,692,400

However, this does not rule out the possibility that the shareholders are be able to exercise part of the Rights owned. More detailed information regarding Limited Public Offering can be seen in Chapter I of this Prospectus.

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The Company intends to use all of the proceeds that it receives from the Rights Issue of Rp20.768.676.852.000 (twenty trillion seven hundred seventy six billion six hundred seventy six million eight hundred two thousand Rupiah) after the deduction of any offering expenses in relation to the Rights Issue and the Offering that are payable by the Company, for working capital and general coroporate purposes, including repayment of the outstanding working capital facilities.

If the proceeds obtaind is less that planned result of the LPO, the Compnay will use internal cash, considering the Company still has sufficient funds to run its operations.

More detailed information regarding Limited Public Offering can be seen in Chapter II of this Prospectus.

4. BUSINESS RISKS

Likewise with the business activities of other companies, Company faces a variety of business risks that are influenced by both external and internal factors that could affect the Company’s performance.

The Following constitutes brief information on the company’s business risks:

Risks Relating to the Company’s Business and Industry

1. The Company is dependent on the production and sale of a single category of product, and any material deterioriation of the market condition for cigarettes may adversely affect its business and profitability.

2. Current and future adult consumertrends and preferences may reduce the demand for cigarrets or certatn types of cigarettes which may adversely affect the perice and demand for cigarettes sold by the company, and the company may be unable to anticipate or respond adequately to changes in adult smoker preferences or demand.

3. The company’s business may be adversely affected by unfavorable changes in the excise tax regime for cigarette products, and increases in cigarette – related taxes that have been proposed or enacted in Indonesia may disproportionately affect the Company’s profitability.

4. The Company faces intense competition, and its failure to compete effectively could have a material adverse effect on its profitability and results of operations.

5. The Company is dependent on the strength of its brands, and if the Company is unable to adequately protect and promote its trademark and brand names, its reputation and competitiveposition could be materially adversely impacted.

6. The Company may not be able to procure sufficient or stable supplies of raw materials for its manufacturing process as a result of factors that affect tobacco leaf and clove production and harvesting for other reasons, and a delayorshortage in the supply of raw materials, particularly clove, could have a material adverse effect on its business, results of operations and prospects.

7. The Company is exposed to tobacco leaf and clove price fluctuations and inflation, and the company’s margins may be affected by higher raw material prices.

8. The Company’s financial performance is affected by economic conditions in Indonesia.

9. The Company may be affected by changes in Government policies with respect to the cigarette industry and may face significant govermental action aimed at increasing regulatory requirements with the goal of reducing or preventing the use of cigarette products.

10. Restrictions on advertising, promotion, marketing, packaging, labelling, and usage of cigarette products in Indonesia and other markets in which the company sells its products may reduce the demand for cigarette products and materially and adversely affect the company’s business and result of operations.

11. The Company's business depends on the operating capacity and the continuing operations of its manufacturing facilities and unforeseen stoppage or extended downtime at the Company's production facilities or other operational risks could adversely affect its business, results of operations and financial condition.

12. The Company’s SKT operations are labor – intensive , and an increase in real labor costs or labor disputes with its employees may erode the Company’s profitability.

13. The Company’s business may be impacted by seasonality of cigarette consumption and seasonality of tobacco leaf and clove prices.

14. The Company may not be able to extend in arrangements with its third-party operators and may be required to replace third – party with its own resources or may need to re-negotiate arrangements with its third-party operators. 15. The Company’s distribution channels are subject to logistical difficulties and the company is dependent on the

reliability of its distribution channels and the distribution channels provided by third-party carriers.

16. The Company may not be able to obtain, maintain or renew all of the approvals, licenses, registrations an permits that are required for it to conduct its business.

17. The Company may face challenges to title to the land on which its manufacturing and distribution faclities and sales offices are located.

18. The Company is dependent on the quality of our title to our land properties and our ability to renew or extend these titles.

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20. Product liability claims and adverse publicity in respect of the tobacco products sold by the Company could have a material adverse effect on the Company’s reputation.

21. The Company may be adversely affected by the imposition and enforcement of more stringent enviromental regulations.

22. The Company’s production facilities or operations may face disruption from enviromental groups, non-governmental organizations and interested individuals.

23. Increases in Illicit trade of tobacco products may cause reputational damage and a decline in recorded legal sales, and maycause the Company to settle claims related to ilicit trade or to adopt costly countermeasures.

24. The Company’s insurance policies may be insufficient or the Company may experience a delay between an insured loss occurring and being compensated by its insurers.

25. The Company’s TPOs and suppliers may engage in unethical child labor practices or be in violation of child labor laws and other labor regulations.

26. The interests of the Company’s controlling shareholder may not align with the interests of Company’s business and/or may differ from those of its other shareholders.

27. The Company is engaged in a number of transactions with affiliated parties and the application of OJK conflict of interest regulations may cause the Company to forego transactions that are in the Company’s best interests. 28. The Company depends on the services of its senior management team and if it is unable to attract and retain

qualified personnel or attract, recruit, train and retain suitable replacements, its business, financial condition and results of operations could be adversely afffected.

29. The Company depends on the services of its senior mangement team and if it is unable to attract and retain qualified personnel or attract, recruit, train and retain suitable replacements, its business, financial condition and results of operations could be adversely affected.

30. The failure of the Company’s information systems to function as intended or their penetration by outside parties with the intent to corrupt them could result in business disruption, litigation and regulatory action, and loss of revenue, assets or personal or other sensitive data.

31. The Company is exposedd to foreign exchange rate fluctuations and potential devaluation of the Rupiah.

Risks Relating to Indonesia

1. Indonesia is located in a geologically active zone and is subject to the risk of significant geological and other natural disasters, which could lead to social and economic instability.

2. Regional authorities may impose additional and/ or conflicting local restrictions, taxes and levies. 3. Political and social instability in Indonesia may affect the Company.

4. Terrorist activites in Indonesia and certain destabilizing events In Southeast Asia have led to substantial and continuing social and economic volatility.

5. Outbreak of an infectious disease or any other serious public healh concerns in Asia (Including Indonesia) and elsewhere could have a significant negative impact on the economy.

6. Regulation of greenhouse gas emissions and climate change issues may adversely affect the Company’s operations and markets.

7. Labor activism, unrest and employment legislation in Indonesia may have a material adverse effect on the Company 8. Regional or global economic changes may have a material adverse effect on the Indonesian economy and the

Company’s business.

9. Downgrades of credit ratings of Indonesia and Indonesian companies could adversely affect the Company. 10. Judgments of a foreign cout may not be enforceable against the Company.

Risk Relating to the Shares

1. Conditions in the Indonesian securities market may affect the price or liquidity of the Shares.

2. The Company’s ability to pay dividends in the future will depend upon future earnings, financial condition, cash flows, working capital requirem,ents and capital expenditures and will be paid in Rupiah.

3. The rights of minority shareholders may be more limited than in other jurisdictions.

4. Indonesian law may operate differently from the laws of other jurisdictions with regard to the convening of, and the right of shareholders to attend and vote at, general meetings of shareholders of the Company.

5. The Company operates in a legal system in which the application of various laws and regulations may be uncertain, and through the purchase of the Shares, holders of the shares are exposed to such legal system and may find it difficult or impossible to pursue claims relating to the shares.

6. A shareholder's right to participate in future rights offerings could be limited, which would cause dilution to their holdings.

7. Shareholders may be subject to dilution on issues of new Shares or other equity securities by the Company. 8. Exchange fluctuations may have a material adverse effect on the value of the shares and any dividend

distribution.

9. Indonesian law contatins provisions that could disourage a takeover of the Company.

10. There may be less company information available, and corporate governance standards may differ, for public companies listed on Indonesian securities markets as compared with those listed on securities markets in more developed countries.

11. Indonesia may suffer from governmental or business corruption.

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5. BUSINESS STRATEGIES AND PROSPECTS

Sampoerna’s vision is to further strengthen and expand its position as the leading tobacco company in Indonesia. To that end, it is focusing on the following strategic initiatives.

1. Continue to leverage and build the Company’s brands. 2. Expanding its presence in growing market segments. 3. Continued focus on operational and supply chain processes.

4. Proactively advocating a sensible regulatory and excise tax environment.

6. FINANCIAL HIGHLIGHT

You should read the selected Consolidated Financial Information presented below in conjunction with the Company's Consolidated Financial Statements and the related notes thereto as of and for the years ended December 31, 2012, 2013 and 2014 and as of June 30, 2015 and for the six months ended June 30, 2014 and 2015 included elsewhere in this Prospectus.

The Company has derived the selected consolidated financial information below from its historical Consolidated Financial Statements as of and for the years ended December 31, 2012, 2013 and 2014 and as of and for the six months ended June 30, 2015, each prepared and presented in accordance with IFAS and included elsewhere in this Prospectus. The Audited Consolidated Financial Statements as of and for the years ended December 31, 2012, 2013 and 2014 and as of and for the six months ended June 30, 2015 have been audited, in accordance with auditing standards established by the Indonesian Institute of Certified Public Accountants (Institut Akuntan Publik Indonesia or "IICPA"), by KAP Tanudiredja, Wibisana, Rintis & Rekan, formerly known as KAP Tanudiredja, Wibisana & Rekan, (a member of the PricewaterhouseCoopers network of firms), independent public accountants and the report has been signed by a public accountant Nita Skolastika Ruslim, CPA by providing a fairness opinion. The Company also provides other financial information as of and for the years ended December 31, 2010 and 2011. The financial information for 2010 and 2011 presented below have been reclassified and restated to conform with the presentation of the consolidated financial statements of the Company included elsewhere in this Prospectus. Unless otherwise stated below, the financial information dated and for the years ended December 31, 2010 and 2011 were taken from the audited consolidated financial statements of the Company that are not part of this prospectus and is available on the website of the Company (www.sampoerna.com) and has been reported to the OJK. The audited consolidated financial statements dated and for the years ended December 31, 2011 and 2010 have been audited by Tanudiredja, Wibisana & Partners (a member firm global network of PricewaterhouseCoopers), an independent public accountant, and the report has been signed by a public accountant Andry D . Atmadja, SE. Ak., CPA by providing a fairness opinion.

The Company has derived the selected interim consolidated financial information below for the six months ended June 30, 2014 from its unaudited interim consolidated financial statements for the six months ended June 30, 2014, prepared and presented in accordance with IFAS and included elsewhere in this Prospectus. These interim consolidated financial statements for the six months ended June 30, 2014, which have been reviewed by KAP Tanudiredja, Wibisana, Rintis & Rekan, formerly known as KAP Tanudiredja, Wibisana & Rekan, (a member of the PricewaterhouseCoopers network of firms), include all adjustments consisting of normal and recurring adjustments which are considered necessary for a fair presentation of the consolidated financial position and operating results of the Company for the period presented. With respect to these unaudited financial information, KAP Tanudiredja, Wibisana, Rintis & Rekan have applied limited procedures in accordance with the review standards established by IICPA for a review of such information. They did not audit and do not express an opinion on that unaudited financial information. Accordingly, the degree of reliance on such information should be restricted in light of the limited nature of the review procedures applied. The Company's results for any interim period may not be indicative of its results for the full year or for any period.

Consolidated Financial Statement

(in bilion Rupiah)

Description June 30 December 31

2015 2014 2013 2012 2011 2010

Revenues 43,742.6 39,093.5 80,690.1 75,025.2 66,626.1 52,856.7 43,381.6

Cost of goods sold (33,482.3) (29,241.1) (60,190.0) (54,953.9) (48,118.8) (37,661.2) (30,725.7)

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Description 6 (six) months period _{ended on June 30} Year ended December 31

2015 2014

(Unaudited) 2014 2013 2012 2011 2010

Profit before income tax 6,701.2 6,743.3 13,718.3 14,509.7 13,383.3 10,911.1 8,748.2

Income tax expense (1,689.4) (1,712.0) (3,537.2) (3,691.2) (3,438.0) (2,846.7) (2,325.5)

Profit for the year/period 5,011.8 5,031.3 10,181.1 10,818.5 9,945.3 8,064.4 6,422.7

Other comprehensive

Under Indonesian law and the articles of association, the Shareholders must approve the distribution of dividends at a general meeting of Shareholders upon the recommendation of the Board of Directors. Shareholders on the applicable record date will be entitled to receive the full amount of dividends approved, subject to any Indonesian withholding tax. To the extent a decision is made to pay dividends, such dividends will be paid in Rupiah and must be paid within 30 days after the announcement of the result of the general meeting of Shareholders approving the distribution of dividend. The dividends received by non-Indonesian shareholders will be subject to a 20% withholding tax in Indonesia unless reduced under an applicable Double Taxation Avoidance Agreement.

The following is description regarding Company dividend payment for 2012 to 2014 book, which paid in the following year.

(in billion Rupiah, otherwise stated differently)

Description 31 Desember

2014(2) ₂₀₁₃ ₂₀₁₂ ₂₀₁₁

Year Dividend is Declared 2015 2014 2013 2012

Declared Dividends 8,801.1 10,650.7 9,945.0 7,670.3

Interim Dividends - - - 876.6

Date of Interim Dividend Payment - - - 23 Desember 2011

Final Dividend Payment 8,801.1 10,650.7 9,945.0 6,793.7

Date of Final Dividend Payment September 9, 2015 Desember 23, 2014 Desember 18, 2013 Desember 27, 2012

Dividend Payout Ratio(1) _86.4% _98.4% _100% _95.1%

(1) Dividend Payout Ratiois calculated based on the dividend distribution approved for the year with the net income from the previous year as disclosed in the consolidated financial statements of the Company.

(2) Based on the GMS decision on April 27, 2015, the shareholders of the Compay have agreed and validate the cash distribution of dividends of Rp4.27 trillion or Rp975 (full Rupiah) per share from the net income of 2014 books, and fully paid by May 28, 2015.

Based on the EGMS decision on August 10, 2015, the shareholders of the Compay have agreed and validate the cash distribution of dividends of Rp4.53 trillion or Rp1,033 (full Rupiah) per share from the retained earnings of 2014 books, and fully paid by September 9, 2015.

Further information on dividend policies can be seen in chapter XIII of this prospectus.

8. REQUIREMENT OF LIMITED PUBLIC OFFERING SUBSCRIPTION

The Company has appointed PT Sirca Datapro Perdana as Share Registrar and as Placement Agent in the Company’s Limited Public Offering, as set forth in the Deed of Shares Administration Management Agreement and the Placement Agent of Limited Public Offering No. 26 dated August 10, 2015, as amended within the Addendum and the Restatement of Legal Administration Management and Placement Agent Agreement in relation to the LPO of the Company No. 11 dated October 1, 2015 both made before Aryanti Artisari, SH, M.Kn., Notary in the South Jakarta Municipality.

Further information on requirement of limited public offering subcription can be seen in chapter XVIII of this prospectus.

9. DESCRIPTION OF THE RIGHTS

A maximum 269,723,076 (two hundred sixty nine million and seven hundred twenty three thousand and seventy six) registered common shares with nominal value of Rp 100 (one hundred Rupiah) per share. Every 65 (sixty-five) existing shares whose name is written in the Company’s List of Existing Shareholders as of October 22, 2015 at 16:00 Western Indonesia Time is entitled to 4 (four) Rights, in which every 1 (one) Right gives the holder the right to purchase as much as 1 (one) New Share with an Exercise Price of Rp77,000 (seventy seven thousand Rupiah)per share, with full payment during the submission of the Additional Share Application Form.

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I. LIMITED PUBLIC OFFERING

A maximum 269,723,076 (two hundred sixty nine million and seven hundred twenty three thousand and seventy six) registered common shares with nominal value of Rp 100 (one hundred Rupiah) per share. Every 65 (sixty five) existing shares whose name is written in the Company’s List of Existing Shareholders as of October 22, 2015 at 16:00 Western Indonesia Time is entitled to 4 (four) Rights, in which every 1 (one) Right gives the holder the right to purchase as much as 1 (one) New Share with an Exercise Price between Rp77,000 (seventy seven thousand Rupiah) per share, with full payment during the submission of the Additional Share Application Form. This LPO is carried out by the Company in order to fulfill the listing requirement where the total shares owned by non-controlling shareholders and non-majority shareholders at least 50,000,000 (fifty million) share and at least 7.5% (seven point five percent) of the number of shares in paid-in capital under provision v.1 of Indonesia Stock Exchange Regulation No. I-A regarding the Listing Of Shares and Equity Securities Other Than Shares Issued By a Listed Company.

The number of shares offered in the LPO through Rights Issue is the maximum number of shares that will be fully issued from the portfolio and will be registered in Indonesia Stock Exchange while always considering the regulations in force. The amount of funds to be received by the Company in this LPO is as much as Rp20.768.676.852.000 (twenty trillion seven hundred sixty eight billion six hundred seventy six million eight hundred two thousand Rupiah). Shares from LPO have the right equal and to the same degree in all respects including rights to dividends that have been full paid otherwise. Every Right in the form of fractions will be rounded down.

Rights can be traded through both IDX or outside IDX in accordance to IX.D.1 for 5 (five) business days from October26, 2015 to October30, 2015. Listing of shares result from the exercise of rights will be conducted by IDX on October26, 2015 to October30, 2015 hence the Rights that are not exercised up to the particular date will be invalid

If the new shares offered in the LPO is not entirely taken up by holders of Rights in the public portion, then the remaining will be allocated to the other public holders who susbscirbe for additional rights beyond their portion, as stated in the Rights Certificate or the Additional Share Application Form proportionally based on rights that have been exercised. If, after the allocation of the additional share subscription, the stock is still residual to the public portion, which is as much as 4,912,725 (four million nine hundred twelve thousand seven hundred twenty five) common shares, therefore PT Mandiri Securities, acting as the Standby Buyer is obliged to purchase the remaining shares, with the remaining shares shall be purchased by the Standby Buyer excluding shares derived from the exercised Rights in this LPO.

PT Phillip Morris Indonesia (“PMID”) as the primary shareholder of the Company will exercise a portion of its Rights in the LPO which is 600,640 (six hundred thousand six hundred and forty) Rights, where the remaining amount will akan sold to PT Mandiri Sekuritas based on the Rights Sale and Purchase Agreement dated September 11, 2015 as amended on October 1 2015 made between PMID with PT Mandiri Sekuritas, Rights belonging to PMID in whole or in part will be transferred through sale to PT Mandiri Sekuritas as the appointed Selling Agent, and subsequently PT Mandiri Sekuritas will execerise a portion of the preemptive rights and transfer a portion of those Rights. The resulting shares from the exercise of Rights and the Rights owned by PMID will be offered and sold to domestic and foreign investors through a LPO. Furthermore, PT Mandiri Sekuritas will distribute these shares to the securities account of the investors after the execution of the transaction through the Stock Exchange on the same day of the exercise of Rights owned by PMID by PT Mandiri Sekuritas, ensuring that the number of shares held by the public is 7.5% (seven point five percent) of the issued and fully paid-in capital and the shares held by PMID amounted to 92.5% (ninety-two point five percent) of the issued and paid-in capital after the LPO is completed.

PT Hanjaya Mandala Sampoerna Tbk

Business Line: Cigarette Industry

Domiciled in Surabaya, Indonesia Head Office:

Jl. Rungkut Industri Raya No. 18 Surabaya 60293, Indonesia Telp.: (031) 8431 699; Fax: (031) 8430 986

Website: www.sampoerna.com

Main Branch Office: One Pacific Place, Lantai 18 Sudirman Central Business District (SCBD)

Jl. Jend. Sudirman Kav. 52-53, Jakarta 12190, Indonesia

Phone: (021) 5151 234; Fax: (021) 5152 234 Email: investor.relations@sampoerna.com

THE MAIN RISK THE COMPANY THE COMPANY IS DEPENDENT ON THE PRODUCTION AND SALE OF A SINGLE CATEGORY OF PRODUCT, AND ANY MATERIAL DETERIORATION OF THE MARKET CONDITION FOR CIGARETTES MAY ADVERSELY AFFECT ITS BUSINESS AND PROFITABILITY.

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The Company was established in 1963 and located in Surabaya under the name PT Persahaan Dagang dan Industri Panamas with the primary line of business in the cigarette industry.

The Company was established based on the Deed of Establishment No. 69 dated October 19, 1963 as amended by Act No. 46 dated April 15 , 1964, made in the presence of Anwar Mahajudin, a notary in Surabaya at the time, which has been approved by the Minister of Justice of the Republic of Indonesia through the stipulation of the Minister of Justice of the Republic of Indonesia No. JA5/59/15 dated April 30 , 1964, and was registered in the public register at the District Court in Surabaya No. 654 and 655 dated May 18, 196 , and was published in BNRI No. 94 dated November 24, 1964, Supplement No. 357. In 1989, the Company changed its name to PT Hanjaya Mandala Sampoerna .

Articles of Association have been amended several times and lastly by Deed Amendment No. 21 dated May 12, 2015 made before Aryanti Artisari, SH, M.Kn., Notary in South Jakarta City Administration, and has obtained the approval of Menkumham based on Decree No. AHU-0935168.AH.01.02.YEAR 2015 and Receipt of Notification Amendment No. AHU-AH.01.03-0931826, both dated May 13, 2015, where the shareholders approved the change of the Articles of Association of the Company, among others in order to adapt to the provisions of the OJK regulations .

The capital structure and shareholder structure of the company at the time the prospectus issued is as follows:

Description

Par Value of Rp100 per share

Total Shares Total Nominal Value (Rp) (%)

Issued and full paid-up capital:

- Public 79,831,795 7,983,179,500 1.82%

Total issued and full paid-up capital 4,383,000,000 438,300,000,000 100.00%

Unissued Shares 1,917,000,000 191,700,000,000

If PMID as the primary shareholder of the Company exercise a portion of its Rights in the LPO that is 600,640 (six hundred thousand six hundred and forty) Rights, the pro forma composition of the Company's share capital after the LPO are as follows:

Description

Par Value of Rp 100,- pershare Total Shares Total Nominal Value

(Rp) %

Unissued Shares 1,647,276,924 164,727,692,400

If PMID as the primary shareholder of the Company exercise a portion of its Rights in the LPO that is 600,640 (six hundred thousand six hundred and forty) Rights, however minority shareholders do not fully exercise their Rights in the LPO, the pro forma composition of the Company's share capital after the LPO are as follows:

Description

Par Value of Rp 100,- pershare Total Shares Total Nominal Value

(Rp) %

- New Shares form Rights Issue not excercised by the

Company’s shareholders 4,912,725 491,272,500 0.10%

Unissued Shares 1,647,276,924 164,727,692,400

However, this does not rule out the possibility that the shareholders are be able to exercise part of the Rights owned.

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WITHIN 12 (TWELVE) MONTHS AFTER EFFECTIVENESS OF THE REGISTRATION STATEMENT OF THIS LPO, THE COMPANY WILL NOT PUBLISH OR LIST NEW SHARES OR OTHER SECURITIES THAT ARE CONVERTIBLE INTO SHARES OUTSIDE THE OFFERING OF THE LPO.

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II. USE OF PROCEEDS

The Company intends to use all of the proceeds that it receives from the Rights Issue of Rp20.768.676.852.000 (twenty trillion seven hundred seventy eight billion six hundred seventy six million eight hundred two thousand) after the deduction of any offering expenses in relation to the Rights Issue and the Offering that are payable by the Company, for working capital and general coroporate purposes, including repayment of the outstanding working capital facilities.

If the proceeds obtaind is less that planned result of the LPO, the Compnay will use internal cash, considering the Company still has sufficient funds to run its operations.

The Company will account for the realization of the use of the proceeds of this LPO by periodically reporting to OJK in accordance with Rule X.K.4.

Any change of plan to the proposed use of proceeds must first be notified to OJK, together with the grounds and rationale for such change. In addition, the Company will need to obtain prior approval from the general meeting of shareholders in relation to such change, as required in BAPEPAM Regulation No. X.K.4.

Pursuant to BAPEPAM Circular Letter No. SE-05/BL/2006 dated September 29, 2006 on the Disclosure of Information regarding Estimated Costs for Public Offering, the total expenses expected to be incurred by the Company in the Rights Issue and the Offering are approximately 1.3164596% of the total value of the Rights Issue, which includes (each expressed as a percentage of the total proceeds from the Rights Issue):



Capital market professional service and supporting agencies fee 0.0789562%, Legal Counsels’ servce fee 0.2173637% and Notary service fee 0.0009630%;



Share Registrar fee 0.0011074%;



OJK fee 0.0036112%;and

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III. INDEBTEDNESS SUMMARY

The following table sets out on an actual basis the Company's consolidated liability as of June 30, 2015 and for 6 (six) months period ended on that day, which stated in the prospectus audited by KAP Tanudiredja, Wibisana, Rintis & Partner (mambers ofPricewaterhouseCoopers), independent auditors, based on Audit Standard assigned by IAPI, with unqualified opinion.

Company’s consolidated liability balance as of 30 June 2015 is Rp14,420.2 bilions which consist of current liabilities of Rp12,903.1 bilions and long term liabilities of Rp1,517.1 bilions with details as follows:

DESCRIPTION AMOUNT

Current Liabilities

Borrowings

Third parties 1,573.8

Related parties 2,326.4

Trade and other payables

Third parties 2,306.1

Related parties 1,093.4

Tax payable

Income tax payable 326.5

Other parties 479.8

Excise Tax Payable 3,608.9

Accruals 148.5

Employee Benefit Liabilitiees

Short term 556.9

Accrued expense

short term 76.4

Other Payables – Short term 388.3

Finance Lease Payable

Short term 18.1

Non-current Liabilities

Employee benefit liabilities 1,434.6

Deffered tax liabilities 0.4

Finance lease payable 28.1

Deffered revenue 53.9

TOTAL LIABILITY 14,420.1

A. Current Liabilities

1. Borrowings

Borrowing balance as per 30 June 2015 is Rp3,900.2 bilion both in Rupiah and US$, which consist of third parties borrowing of Rp1,573.8 bilion and related parties borrowing of Rp2,326.4 bilion. Third parties borrowing consist of working capital borrowing from several banks such as Deutsche Bank AG (“Deutsche”), Sumitomo Mitsui Indonesia Bank (“Sumitomo”) and Citibank N.A (“Citibank”), whereas related parties borrowings come from Philip Morris Finance SA.

For the six-month period ended June 30, 2015, the annual interest rate that applies for loans from a third party in the above amount range between 7.42% to 8.70%, while the annual interest rate applicable to US$ loans from related parties in the aforementioned range from 6.57 % to 7.90% .

The Company may at any time carry out transactions that hedge on interest rates and/or foreign currency exchange rates that required by lenders associated with the facilities provided.

On June 30, 2015, the Company has complied with all the requirements for short-term loans from third parties and in the framework of implementation of this LPO, the Company does not require the approval of each lender mentioned above.

2. Trade and Other Payables

Trade and other payables balance as per 30 June 2015 is Rp3,399.5 bilion, which consist of third parties borrowing of Rp2,306.1 bilion and related parties borrowing of Rp1,093.4 bilion.

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3. Tax Payable

Tax payable balance as per 30 June 2015 is Rp806.3 bilion, consist of:

Income Tax Expense

Article 25 314.6

Article 29 11.9

Other

Other Income Tax Expense 37.0

Value Added Tax 442.5

Others 0.2

TOTAL TAX PAYABLE 806.3

4. Excise Tax Payable

Excise tax payable represents payables arising from the purchase of excise tax stamps. Excise tax payable balance as per 30 June 2015 is Rp3,608.9 bilion.

5. Accruals

Accruals balance as per June 30, 2015 is Rp148,5 bilion, consist of:

Production costs 65.7

Advertising and promotion 36.4

Distribution 22.0

Others 24.4

TOTAL 148.5

6. Employee Benefit Liabilities

Employee benefit liabilities balance as per June 30, 2015 is Rp556.9 billion.

7. Deffered Revenue

Deffered revenue balance as per June 30, 2015 is Rp76.4 billion.

8. Other Short-term Financial Liability

Other short-term financial liability balance as per June 30, 2015 is Rp388.3 billion.

9. Finance Lease Liability

Finance lease liability balance as per June 30, 2015 is Rp18.1 billion.

B. Non-current Liabilities

1. Employee Benefit Liabilities

Employee benefit liabilities balance as per June 30, 2015 is Rp1,434.6 billion, consist of:

Accrued employee benefit 510.9

Post-employment benefit 1,480.6

Less – Current portion (556.9)

TOTAL 1,434.6

2. Deferred Tax Liability

Deferred tax liability balance as per June 30, 2015 is Rp0.4 billion.

3. Financial Lease Liability

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4. Deferred Revenue

Deferred revenue balance as per June 30, 2015 is Rp54.0 billion.

ALL COMPANY’S CONSOLIDATED LIABILITY AS PER JUNE 30, 2015 HAS BEEN DISCLOED IN THIS PROSPECTUS. UNTIL THE PUBLICATION OF THIS PROSPECTUS, COMPANY HAS SETTLED ALL CONSOLIDATED LIABILITIES DUE.

COMPANY DOES NOT HAVE ANY OTHER LIABILITY EXCEPT LIABILITES THAT ARISE FROM NORMAL BUSINESS AND OTHER LIABILITES THAT HAS BEEN STATED IN THIS PROSPECTUSPERSEROAN

WITH SYSTEMATIC MANAGEMENT OVER ASSETS, LIABILITES, AND INCREASE IN FUTURE OPERATION INCOME, COMPANY DECLARE ITS CAPABILITY TO MEET ALL LIABILITIES CORRESPONDED TO ALL REQUIREMENT.