services. PP Peralatan leases heavy and light equipment, such as tower crane, excavator and scaffolding. Most of the construction equipment is leased to the Company to support construction work activities.
7. Energi
In order to develop its business, the Company established PT PP Energi in August 2016. PP Energy is established to support the Companys business activities, particularly in the energy sector, among others: oil gas, power plant, storage, pipeline, etc.
8. Infrastructure
In order to develop its business, the Company established PT PP Infrastruktur in August 2016. PP Infrastruktur is established to support the Company’s business activities, particularly in the infrastructure industry, which is currently promoted by the Government, among others: Toll
Road, Airport, Port, transportation, etc. Marketing
The Company has proven its ability to grow and develop from year to year and to provide contribution to the state and nation in the form of
various project implementation, both Government and Private Sector’s projects located across Indonesia. In implementing its strategies to win tender, the Company utilizes information and previous tender experience and improve synergies with other
companies. The Marketing division must selectively select the market in accordance with the Companys competitiveness. The Company gathers information on potential projects from information acquired from consultants, financial institutions, SOEs, Regional Governments,
Central and Regional Investment Coordinating Board, as well as announcement from the mass media. With the assistance of its Marketing Division, the Company continues to develop integrated marketing strategies which are focused on the
achievement of project acquisition target. The Companys marketing strategies are implemented since the project design early stage, by implementing rigid supervision on the construction implementation and providing training on and improvement of work safety in the operational
areas. The Companys Marketing Division is supported by 4 four Operational Divisions ODV, namely the Operation Division I in Medan, Operation
Division II in Jakarta, Operation Division III in Surabaya and Operation Division IV in Makassar, and EPC Division in Jakarta. In handling a project, the existing ODV and EPC Division have the authorities to perform project calculation or estimation.
Presented below is the list of development of marketing contribution contract value of each of the Companys branch as of December 31, 201, 2012, 2013, 2014, 2015, and June 30, 2016.
In millions of Rupiah
Branch June 30,
December 31, 2016
2015 2014
2013 2012
2011 Million
Rp Million
Rp Million
Rp Million
Rp Million
Rp Million
Rp I
401,455 3
1,158,224 4
281,179 1
509,557 3
882,431 5
572,877 5
II 1,067,680
7 4,283,963
16 2,525,750
12 1,421,400
7 138,403
1 607,210
5 IX
1,160,804 4
1,073,518 5
376,670 2
449,323 2
260,253 2
Total ODV I 1,469,135
10 6,602,991
24 3,880,447
19 2,307,627
12 1,470,156
8 1,440,340
12
III 1,221,894
8 1,168,381
4 2,364,642
12 3,804,118
19 2,028,886
10 2,553,848
21 IV
Special Project 78,457
1 2,365,341
497,000 9
2 2,978,611
15 2,521,722
13 1,915,962
8,218,775 10
42 1,497,356
12
Total ODV II 1,300,351
9 4,030,722
15 5,343,253
26 6,325,840
32 12,163,623
62 4,051,205
33
V 832,591
6 1,893,902
7 3,676,419
18 2,289,298
12 2,204,817
11 1,287,210
10 VI
507,530 4
655,277 2
2,028,905 10
2,076,537 11
1,017,631 5
1,368,943 11
Total ODV III 1,340,121
10 2,549,179
9 5,705,324
28 4,365,835
23 3,222,448
16 2,656,153
21
VII 851,634
6 915,063
3 812,122
4 1,224,790
6 887,460
5 1,677,580
14 VIII
161,138 1
3,977,782 15
1,431,596 7
1,342,418 7
783,126 4
- -
Total ODV IV 1,012,772
7 4,892,844
18 2,243,718
11 2,567,208
13 1,670,586
9 1,677,580
14
Overseas Branch
86,770 -
- EPC
INV 993,997
5,700,000 7
40 3,395,846
1,930,276 13
7 654,022
3 2,526,214
13 834,181
4 2,393,606
19
Total 6,693,997
47 5,412,892
20 654,022
3 2,526,214
13 834,181
4 2,393,606
19
Subsidiaries: PP Properti
981,537 7
1,986,571 7
1,325,140 7
519,436 3
113,711 1
133,752 1
PP Pracetak 1,018,871
7 1,365,564
5 1,010,771
5 971,819
5 -
- PP Alat
336,052 2
231,927 1
77,400 -
-
Total 2,336,460
16 3,584,062
13 2,413,311
12 1,491,255
8 113,711
1 133,752
1 Grand Total
14,152,835 100
27,072,690 100
20,240,075 100
19,583,978 100
19,474,705 100
12,353,635 100
Source: The Company As of June 30, 2016, the construction sector marketing was contributed by ODV I totaling 10, ODV II totaling 9, ODV III totaling 10, and
ODV IV totaling 7 of the total contract value for the year.
Customer
The Company’s customers can be categorized into 3 three main groups, namely, the Government, SOE, and Private Sector. The following table presents the contribution of each sector from 2011 up to June 30, 2016.
Year Government
SOE Private Sector
Total Million Rp
Million Rp Million Rp
Million Rp
2011
5,507 44.58
2,910 23.56
3,935 31.86
12,352
2012
4,459 22.90
10,259 52.68
4,756 24.42
19,474
2013
1,870 9.55
6,868 35.07
10,845 55.38
19,583
2014
4,145 20.48
3,675 18.16
12,419 61.36
20,239
2015
5,623 20.77
11,469 42.36
9,980 36.86
27,072
June 30, 2016
766 5.42
10,375 73.36
3,001 21.22
14,152
Supplier
The Company’s suppliers consist of financial suppliers, material suppliers, sub-contractors, labor suppliers and heavy equipment suppliers. a. Financial suppliers: since the financial crisis in the fourth quarter of 2008, the central bank tends to increase interest rate, and the
Government policies continue to maintain growth at 6.2, therefore, the real sectors must be immediately encouraged to obtain credit facilities from the banking sector, which is a more readily available option compared to waiting for the recovery of the capital sector, which
is another alternative of financing sources. b. Material suppliers: facilitation from the banking sector will automatically facilitate supply of material, labor and heavy equipment available in
the market. c. Sub-contractors: implementation of back to back payment, and are facilitated to increase partnership loan through the Company and
banks. The Company is not dependent on any specific supplier for civil works or Mechanical Electrical ME works.
Competition In an increasingly competitive construction industry, there are approximately 90,000 companies that continue to compete in offering the best
quality for their projects. Pursuant to the Law of Construction Services No. 11 of 2006, companies engaged in the construction business are divided by project value as described below:
No. Qualification
Project Value
1 Grade 7
Rp10 Billion 2
Grade 6 Rp10 Billion
3 Grade 5 and below
Rp3 Billion Based on the above classification, the Company is categorized as a Grade 7 company since the value of projects handled by the Company
exceeds Rp10 billion. The Company believes that the Company continues to offer its best performance. The Company consistently strives to offer the best quality by
improving its competitiveness through technical and commercial skill upgrade. The Company also cooperates with foreign companies that have technological and commercial excellence, which renders the Company superior compared to other competitors.
Current competition trend is mainly triggered by companies with bigger funding that are able to enter into various large scale projects. In addition, with the growing competition in the construction industry, the Company also competes to offer the best quality and price.
BUSINESS PROSPECTS Activities of the construction sector are one of the driving forces of economic development system, since provision of facilities and
infrastructures will improve other economic sectors. Construction sector spending in Indonesia is expected to increase, in line with the governments plan to promote infrastructure development across Indonesia up to 2019. Based on data from BCI Asia, the 2016 construction
market share is estimated to reach Rp658 trillion. The construction sector is expected to provide fairly significant contribution to economic growth performance in 2016. In 2016, the construction
sector is expected to grow by approximately 7, mainly driven by the sustainability of infrastructure development acceleration that has started since 2015. Several infrastructure development acceleration projects that are expected to encourage the performance of construction sector
are, among others, construction of 35 GW power plants for a period of 5 years target 4.2 GW by 2016, construction of one million house for low income class LIC program, the construction and rehabilitation of dams and irrigation channels.
EQUITY
The following table presents the balance of the Company’s consolidated equity as of December 31, 2014, and 2015, as audited by the
Registered Public Accountant Soejatna, Mulyana Partners, whereas the Companys financial statements for the six-month period ended June 30, 2016, were audited by the Registered Public Accountant Firm Hertanto, Grace, Karunawan, which expressed an Unqualified Opinion on the
financial statements as a whole.
DESCRIPTION December 31,
June 30, 2014
2015 2016
EQUITY
Equity attributable to: Owner of Parent Entity
Issued and Paid-up Capital 484,244
484,244 484,244
Additional Paid-in Capital 462,018
431,845 431,845
Changes in Equity of Subsidiary Company -
255,864 255,864
Gain on Revaluation of Fixed Assets -
1,193,469 1,256,852
Remeasurement of Defined Benefit Pension Plan 29,323
30,700 34,427
Retained earnings Appropriated
883,538 1,306,832
1,900,350 Unappropriated
533,406 740,323
355,341
Total 2,333,883
4,381,877 4,650,069
Non-Controlling Interest 1,050
737,195 763,363
TOTAL EQUITY 2,334,933
5,119,072 5,413,432
DIVIDEND POLICY
The Company has a policy to distribute cash dividends to all of the Companys shareholders, with due consideration to the Companys financial position or soundness and without prejudice to the rights of the Companys General Meeting of Shareholders to determine such dividend
distributions, which shall be determine in the Companys General Meeting of Shareholders.
Presented below are the descriptions of the Companys dividend payments for the 2011 up to 2015 fiscal year, which are paid on the following year.
TAXATION
Prospective Preemptive Right Holders in this Right Issue I are expected to consult their respective tax consultants about the tax consequences that may arise from the purchase, possession and sale of Preemptive Rights acquired through this Right Issue I.
CAPITAL MARKET SUPPORTING INSTITUTIONS AND PROFESSIONALS
The Capital Market Supporting Institutions and Professionals participating in this Right Issue I are as follows: Public Accountant
: Registered Public Accountant Firm Hertanto Grace Karunawan
Legal Consultant :
Tumbuan Partners
Notary :
Notary Office of Fathiah Helmi, S.H.
Securities Administration Bureau
: PT BSR Indonesia
TERMS OF THE COMPANYS SHARE SUBSCRIPTION
The Company has appointed PT BSR Indonesia as the Company’s Shares Administration Management Agency and Rights Issue I
Year Amount Paid
billions of Rp Total cash dividend per
share Rp Payout ratio
Payment Date
2015 148.06
30.58 20
June 14, 2016 2014
106.39 21.97
20 June 17, 2015
2013 126.21
26.06 30
May 7, 2014 2012
92.90 19.19
30 June 10, 2013
2011 72.07
14.88 30
June 15, 2012
Implementing Agent as stipulated in the Deed of the Companys Shares Administration Management and Implementing Agent. 1.
Eligible Subscribers The Shareholders whose names are recorded in the Companys SR as of November 17, 2016, shall be entitled to submit the Preemptive Right
Share subscription with respect to this Right Issue I, provided that each holder of 100 one hundred existing share shall be entitled to ● ●
Preemptive Right, whereas every 1 one Preemptive Right shall be entitled to subscribe 1 one Preemptive Right Share at a nominal value of Rp[
●] [●] Rupiah per share at an Exercise Price of Rp[●] [●] Rupiah per share. Subscribers entitled to purchase new shares are:
a. The holders of Preemptive Rights Certificates whose names are stated on the Preemptive Right Certificate or those who have legitimately
acquired Preemptive Rights in accordance with the provisions of the prevailing laws and regulations; or b.
The holders of Electronic Preemptive Rights registered in the Collective Depository at KSEI up the last date of the Preemptive Rights trading period.
The subscribers may consist of individuals, Indonesian andor Foreign Citizen andor Institutions andor Legal EntitiesBusiness Entities, whether IndonesianForeign as stipulated in the Capital Market Law and the implementing regulations thereof.
In order to facilitate the process and ensure the eligible shareholders registration schedule is met, the shareholders of the Companys shares in the form of certificates intending to exercise their rights to acquire Preemptive Rights and have not registered their transfer of share ownerships
are advised to register at the Securities Administration Bureau before the final deadline for the registration of Shareholders, which shall be November 29, 2016.
2.
Distribution of Preemptive Rights
For Shareholders whose shares are administered in the Collective Depository system at KSEI, the Preemptive Rights shall be distributed electronically to the Securities Accounts at KSEI through the Securities Accounts of the respective Members of the Stock Exchange or
Custodian Banks at KSEI by no later than 1 one Exchange Day after the date of registration of shareholders entitled to Preemptive Rights in the SR, which shall be June 3, 2016. The Prospectuses and implementation guidelines shall be distributed by the Company through KSEI,
which may be obtained by the Companys shareholders from their respective Members of Stock Exchange or Custodian Banks. For shareholders whose shares are not administered in the Collective Depository at KSEI, the Company shall issue a Preemptive Right
Certificate under the name of the shareholders, which may be obtained by the eligible shareholders or their representatives at the SAB on every business days during working hours starting from November 21, 2016 by presenting:
a.
A photocopy of valid personal identification for individual shareholders and a photocopy of the Articles of Association for for legal entityinstitutional shareholders The Shareholders shall also be required to present the original of such photocopies.
The original copy of power of attorney in the event of representative, supplemented with photocopies of other valid personal identification, both for the principal and the agent the original copy of identifications of the principal and agent must be presented.
3. Preemptive Rights ExerciseRegistration Procedures
