1. INFORMATION ON THE UNDERWRITERS
In accordance with the Underwriting Agreement Deed No. 24 dated March 21, 2007, as amended by Deed of Addendum on Underwriting Agreement No. 9 dated May 3, 2007, both deeds were witnessed by SP. Henny Singgih, S.H., Notary in Jakarta, the Managing Underwriter agrees to offer and sell the shares of the Company representing new registered shares to be issued from portfolio shares to public with full commitment on the 100% (one hundred percent) from total shares to be offered in the Initial Public Offering representing 900,000,000 (nine hundred million) registered shares such that they are obligated to purchase at offering price which may remain unsold at the close of the Offering Period.
The above Underwriting Agreement replaces any matters, both in written and not in writing, that may has been entered previously or will be made in the future between the Company and the Managing Underwriter.
In addition, the Managing Underwriter and Underwriters who participate in the underwriting of the Company’s shares agree to perform their respective duties in accordance with the Capital Market Supervisory Agency Rule No. IX.A.7, Appendix No. KEP-45/PM/2000 dated October 27, 2000 on the Responsibilities of Underwriters with Respect to Subscriptions and Allotments of Securities in a Public Offering.
The composition, underwriting portion and percentage on each member of the syndicate as part of the Public Offering of the Company are as follows:
Name of Underwriter Portion of Full Commitment
(shares) %
Managing Underwriter
PT Indo Premier Securities 899,000,000 99.88
Underwriters:
PT Dinamika Usaha Jaya 500,000 0.06
PT Evergreen Capital 500,000 0.06
Total 900,000,000 100.00
Based on Law No. 8 of 1995 dated November 10, 1995 on Capital Market and its ancillary regulations, a related party relationship is defined as follows:
a. A family relationship by either marriage or by blood up to the second degree either horizontally or vertically;
b. A relationship between the parties and employees, directors, and commissioners of the Company;
c. A relationship between two companies where one or more of the directors or commissioners are the same;
d. A direct or indirect relationship between the Company and the parties where the parties are controlled by or control the Company;
e. A relationship between two companies that are either directly or indirectly controlled by the same party; or
The Managing Underwriter and Underwriters explicitly declare not to be affiliated with the Company, direct or indirect, as provided at the above definition.
2. DETERMINATION OF OFFERED PRICE IN THE PRIMARY MARKET
For the purpose of determining the Offered Price of shares in the Initial Offering, the following table sets out the supporting data for December 31, 2006 and the projection for December 31, 2007:
December 31,
Description 2006 2007
Actual Estimated
Total shares prior to Public Offering (shares) 195,000,000 2,100,000,000
Total shares offered to Public (shares) - 900,000,000
Total shares after Public Offering (shares) - 3,000,000,000
Weighted average number of shares (shares) 564,780,821 2,647,808,219
Net Income (Rp) 45,928,000,000 71,296,625,000
Net income per share (Rp) 81 26.92
Offer Price in the Initial Market (Rp) - 200
Price Earning Ratio (x) - 7.43
Table of calculation of the weighted average number of shares in 2007:
Period Weighted Average
Number of Days Number of Shares Number of Shares
January 1, 2007 - March 4, 2007 53 1,950,000,000 283,150,685
March 5, 2007 - May 24, 2007 81 2,100,000,000 466,027,397
May 25, 2007 - December 31, 2007 231 3,000,000,000 1,898,630,137
365 2,647,808,219
3. SUMMARY INFORMATION ON 2007 PROJECTION
Estimates of the consolidated financial projections for the year ending December 31, 2007 have been made based on the historical financial information that are in accordance with generally accepted accounting principles in Indonesia and the Company’s plan in the future.
The net income of the Company for the year ended December 31, 2006 is Rp60,737,000,000, while the projected net income of the Company for the year ended December 31, 2007 will be Rp71,296,625,000 or an increase of 17.40%. The Company believes that the realization of these projections depends upon assumptions set out below and the absence of unanticipated adverse factors.
The main assumptions used on the increase of the net income for the year ending December 31, 2007 are as follows:
1. The net sales in 2007 will be Rp623,655,649,000 or an increase approximately 8.71% from the 2006 net sales of Rp573,675,451,000.
2. The sales volume for corn, vegetables and paddy seeds in 2007 will be totaling to 16,450 tons, 1,650 tons and 500 tons, respectively.
3. The average sales price for corn, vegetables and paddy seeds in 2007 is projected at Rp19,776 per kilogram, Rp20,369 per kilogram and Rp20,980 per kilogram, respectively.
4. The gross profit margin in 2007 is estimated at 45.66%.
5. The increase in operational expenses in 2007 is expected to be 22.10% as compared with the
6. The Company will not avail any additional bank loans in 2007.
7. US$ to Rupiah conversion rate used is Rp9,000 per US$1.
All the calculations and assumptions used in the preparation of financial projection for 2007 of the Company have been made on a fair and consistent basis by the Directors and have been approved by the Commissioners. The Directors and Commissioners accept full responsible for this projection, which constitute the basis in the determination of the share price.
The Managing Underwriter has conducted due diligence and issued an opinion on the fairness and viability on the realization of the projection, including the assumptions used in preparing these projections. The Directors and Commissioners of the Company accept full responsibility for these projections.
If the 2007 projection presented is not realized, the Company and the Managing Underwriter will make a Public Expose.