Guidelines on the Form and Content of Public Company Registration Statements

COPY
FINANCIAL SERVICES AUTHORITY REGULATION
NUMBER 77 /POJK.04/2017
CONCERNING
GUIDELINES ON THE FORM AND CONTENT OF
PUBLIC COMPANY REGISTRATION STATEMENTS
BY THE GRACE OF GOD THE ALMIGHTY
THE COMMISSIONERS COUNCIL OF THE FINANCIAL SERVICES AUTHORITY, Considering:
a. that with the enactment of Law Number 21 of 2011 concerning the Financial Services Authority, since December 31, 2012, the functions, duties, and authority for regulating and supervising financial services activities in the capital market sector, including regulations regarding guidelines on the form and content of public company registration statements, have transferred from the Capital Market and Financial Institution Supervisory Agency to the Financial Services Authority; b. that to provide clarity and certainty in regulation regarding guidelines on the form and content of public company registration statements, existing legal provisions in the capital market sector regarding such guidelines issued before the establishment of the Financial Services Authority need to be changed into a Financial Services Authority Regulation;
c. that based on the considerations as referred to in letters a and b, it is necessary to establish a Financial Services Authority Regulation concerning Guidelines on the Form and Content of Public Company Registration Statements;
Recalling:

1. Law Number 8 of 1995 concerning the Capital Market (State Gazette of the Republic of Indonesia Year 1995 Number 64, Supplement to the State Gazette of the Republic of Indonesia Number 3608);
2. Law Number 21 of 2011 concerning the Financial Services Authority (State Gazette of the Republic of Indonesia Year 2011 Number 111, Supplement to the State Gazette of the Republic of Indonesia Number 5253);
   DECIDING:
   Establishing: FINANCIAL SERVICES AUTHORITY REGULATION CONCERNING GUIDELINES ON THE FORM AND CONTENT OF PUBLIC COMPANY REGISTRATION STATEMENTS.

CHAPTER I
GENERAL PROVISIONS
Article 1
In this Financial Services Authority Regulation, the following terms are defined as:

1. Registration Statement is a document that must be submitted to the Financial Services Authority by the Issuer in the context of a Public Offering or as a public company.
2. Public Company is a corporation whose shares are held by at least 300 (three hundred) shareholders and has paid-up capital of at least Rp3,000,000,000.00 (three billion rupiah) or a number of shareholders and paid-up capital determined by Government Regulation.
3. Securities are negotiable instruments, namely debt acknowledgment instruments, commercial paper, shares, bonds, debt certificates, investment contract units, futures contracts over Securities, and any derivatives of Securities.
4. Public Accountant is a person who has obtained a license to provide services as referred to in legal provisions concerning public accountants and is registered with the Financial Services Authority.
5. Party is an individual, company, joint venture, association, or organized group.

CHAPTER II
FORM AND CONTENT OF PUBLIC COMPANY REGISTRATION STATEMENT
Article 2
The Public Company Registration Statement must include all material information and/or facts regarding the Public Company, which can influence investor decisions, known or reasonably known, which at least include:
a. information that the Registration Statement has been submitted to the Financial Services Authority by referring to the Law concerning the capital market and its implementing regulations; b. a statement that the Public Company is fully responsible for the truth of all information and the fairness of opinions expressed in the Registration Statement;
c. a statement that all capital market supporting institutions and professions mentioned in the Registration Statement are fully responsible for the data presented relevant to their functions, in accordance with legal provisions, codes of ethics, norms, and professional standards of each;
d. full name, address, logo, telephone/telex/fax number, postal box number including factory and representative office, and business activities of the Public Company; e. share capital structure at the time the Registration Statement is submitted; f. information regarding the details of the share capital structure on the date of the Registration Statement; g. management discussion and analysis; h. business risks;
i. material events after the date of the Public Accountant's report;
j. information regarding the Public Company; k. business activities and prospects of the Public Company;
l. summary of important financial data;
m. equity; n. dividend policy; o. taxation; p. name and address of capital market supporting institutions and professions, if any; q. legal opinion and examination report; r. financial reports audited by the Public Accountant presented in accordance with legal provisions in the capital market sector regulating the presentation and disclosure of financial reports of Issuers or Public Companies, and legal provisions in the capital market sector regulating guidelines for accounting standards for Securities companies; s. appraiser's report, if any; and t. the latest articles of association approved by the Minister in charge of legal affairs.

Article 3
The share capital structure at the time the Registration Statement is submitted as referred to in Article 2 letter e, including authorized capital and fully paid-up placed capital, must at least include:
a. the number and total value of shares; and b. information regarding the intention of the Public Company or existing shareholders to issue or list shares within 12 (twelve) months after the date of submission of the Registration Statement.

Article 4
(1) Information regarding the details of the share capital structure as referred to in Article 2 letter f must at least include:
a. authorized capital and fully paid-up placed capital (number of shares and nominal value); b. details of share ownership by shareholders holding 5% (five percent) or more of shares, directors, and commissioners (number of shares, nominal value, and percentage); and
c. portfolio shares, which include the number of shares and nominal value.
(2) Information regarding the details as referred to in paragraph (1) is presented in table form.

Article 5
(1) In the management discussion and analysis as referred to in Article 2 letter g, the Public Company must provide a brief description discussing and analyzing the financial reports and other information contained in the Registration Statement. (2) As far as considered important for obtaining an understanding of the financial condition of the Public Company and investor decision-making regarding investment in the Public Company's Securities, the discussion and analysis as referred to in paragraph (1) must include:
a. discussion regarding known trends, demands, commitments, events, or uncertainties that may cause material increases or decreases in company liquidity; b. discussion regarding material commitments for capital asset investments with an explanation of the purpose of such commitments, the source of funds expected to fulfill such commitments, the currency denomination, and steps planned by the Public Company to protect against risks from foreign currency positions related thereto;
c. discussion regarding risks of foreign exchange rate fluctuations or reference interest rates on loans and their impact on business results or financial condition of the Public Company in the future, accompanied by information regarding all loans and obligations or commitments without protection stated in foreign currency, or loans with interest rates not determined in advance;
d. discussion and analysis regarding material developments expected to occur, events, competitive conditions trends, and known uncertainties that may cause reported financial information not to indicate business results and financial condition in the future; e. description of abnormal and infrequent events or transactions or significant economic changes that can affect the reported income amount in the financial reports audited by the Public Accountant, as contained in the Registration Statement, with emphasis on the latest financial reports, as well as a description of important components of income or other expenses considered necessary to understand company business results; f. discussion in the event that financial reports disclose a material increase in sales or net revenue, including a discussion on the extent to which such increases can be linked to price increases, volume or quantity of goods or services sold, or the existence of new products or services; g. discussion regarding the impact of price changes on company sales and net revenue as well as company operating profit for 3 (three) years or during the company's operation if less than 3 (three) years; and h. in the event that the Public Company considers it necessary to disclose discussion regarding financial forecasts and/or projections, such disclosure must meet the following provisions:

1. financial forecasts must be prepared carefully, objectively, and based on reasonable assumptions;
2. the assessment of the preparation of financial reports and the underlying assumptions must be examined and reported by the Public Accountant auditing the company's financial reports; and
3. the Public Company is directly responsible for the reasonableness of the financial forecasts and/or projections.

Article 6
Information regarding business risks as referred to in Article 2 letter h must be prepared based on the weight of risks faced, caused by at least including:
a. competition; b. raw material supply;
c. regulations of other countries or international regulations; and
d. government policies.

Article 7
Material events after the date of the Public Accountant's report as referred to in Article 2 letter i must contain information regarding all material facts occurring after the date of the Public Accountant's report.

Article 8
Information regarding the Public Company as referred to in Article 2 letter j must at least include:
a. history of the Public Company, including information regarding:

1. establishment of the Public Company, at least including the date of the establishment deed, shareholder composition, name of the Public Company, and its business activities, including brief history, form, and organization name;
2. material events affecting the development of the Public Company's business, including:
   a) nature and consequences of bankruptcy, trusteeship, or similar processes concerning the Public Company; b) nature and consequences of restructuring, merger, or consolidation of the Public Company or its important affiliated companies; c) material assets purchased outside ordinary business activities; d) any significant changes in the manner of conducting business activities; and e) events related to the development of business activities of the company, at least including the addition of important production facilities or the use of new technology;
3. brief chronology of legal documents regarding the establishment of the Public Company and important changes occurring thereafter, including the establishment deed, approval from the Minister in charge of legal affairs, registration at the district court, and announcement in the Supplement to the State Gazette of the Republic of Indonesia;
4. changes in share ownership after establishment, for fully paid-up shares;
5. important agreements;
6. overview of facilities and infrastructure controlled by the company; and
7. relationships with other companies based on ownership, same shareholders, or other factors;
   b. management and supervisors, at least including:
8. name accompanied by photo of members of the Board of Directors and members of the Board of Commissioners; and
9. brief description of each member of the Board of Directors and member of the Board of Commissioners including:
   a) nationality; b) age; c) current and previous positions; d) work experience and relevant business; and e) if education is disclosed, name of school, field of study, and year of graduation must be stated; and
   c. human resources, at least including:
10. details of employees by position and education presented in a table;
11. education and training facilities, if any;
12. foreign workers, if any; and
13. welfare facilities, if any, including:
    a) medical treatment; b) transportation; c) collective labor agreements; d) insurance; e) cooperatives; or f) pension funds.

Article 9
Business activities and prospects of the Public Company as referred to in Article 2 letter k must describe the company's business activities, main products and/or services provided, and its position in the industry, if reliable data sources are available, including:
a. production or operations:

1. information regarding the source and availability of raw materials for production and the level of dependence on specific suppliers;
2. information regarding the production process and quality control, including a general description regarding the status of development of certain products and services, and whether there is a need for relatively significant investment for the development of such products and services, if information regarding the production process and quality control does not disadvantage the company's competitive position;
3. capacity and production results for the last 5 (five) years or since the company was established if less than 5 (five) years;
4. main products and services of the company;
5. validity period of main patents, trademarks, licenses, franchises, and concessions and their importance to the company;
6. the company's degree of dependence on 1 (one) or a group of customers;
7. seasonal nature of the company's business activities, if any;
8. business activities of the Public Company related to working capital that pose special risks;
9. description of backlog orders, development of such orders in the last 3 (three) years, and the possibility of order backlog in the future;
10. dependence on government contracts;
11. competitive conditions in the industry including the position of the Public Company in such competition, if reliable data sources exist;
12. brief information regarding expenditures for research and development; and
13. description of marketing activities including:
    a) product marketing areas; b) sales and distribution systems; and c) data on sales figures for the Public Company and its subsidiaries stated in Rupiah values explained for consistency with financial reports and in units, if any, for the last 5 (five) years or since the establishment of the Public Company if less than 5 (five) years, detailed by main product groups; and b. description of the Public Company's prospects regarding the industry, general economy, and international market, which can be accompanied by supporting quantitative data, if reliable data sources exist.

Article 10
(1) Summary of important financial data as referred to in Article 2 letter l must at least include:
a. information that financial reports are the source of data; b. statement regarding whether the financial reports have been audited by a Public Accountant and explanation regarding the time period covered; and
c. financial report data and financial ratios relevant to the relevant industry.
(2) Data presented in the summary of important financial data as referred to in paragraph (1) must be consistent with the financial reports including the line item names used.

Article 11
Information regarding equity as referred to in Article 2 letter m is presented based on financial reports audited by the Public Accountant, at least including:
a. an equity table containing details of equity per the date of the financial reports for all periods presented in the financial reports; b. a chronological description describing changes in the Public Company's capital structure, at least including changes in authorized capital along with approval information from the Minister in charge of legal affairs, changes in paid-up capital, and nominal value per share; and
c. changes in capital structure occurring after the date of the latest financial report, if any.

Article 12
Dividend policy as referred to in Article 2 letter n must contain information regarding the planned dividend policy, including the range of planned cash dividend percentages linked to net profit amounts.

Article 13
Taxation as referred to in Article 2 letter o must contain information regarding applicable taxes for both investors and the Public Company and special tax facilities obtained.

Article 14
Legal opinion and examination report by legal consultants as referred to in Article 2 letter q must at least include:
a. the validity of the establishment deed and its articles of association and amendments; b. all licenses and approvals required for the implementation of business activities or planned business activities of the Public Company;
c. the ownership status of material assets of the Public Company;
d. civil, criminal, labor, administrative, and other legal cases; e. obligations with third parties; f. the Public Company's capital and planned changes, submitted in accordance with legal provisions and having obtained all necessary approvals; and g. other material matters.

Article 15
Financial reports audited by the Public Accountant as referred to in Article 2 letter r must meet the following provisions:
a. include financial data for the last 3 (three) years or since establishment if less than 3 (three) years; and b. for companies that have been legally established for less than 1 (one) fiscal year, the above requirements apply for the period during its establishment minus at most 3 (three) months.

Article 16
Summary of the appraiser's report as referred to in Article 2 letter s must at least include the valuation method and description regarding the relevant assets and the results of the valuation.

CHAPTER III
SANCTION PROVISIONS
Article 17
(1) Without prejudice to criminal provisions in the capital market sector, the Financial Services Authority has the authority to impose administrative sanctions on any party that violates the provisions of this Financial Services Authority Regulation, including parties causing the violation, in the form of:
a. written warning; b. fine, namely the obligation to pay a certain amount of money;
c. restriction of business activities;
d. suspension of business activities; e. revocation of business license; f. cancellation of approval; and/or g. cancellation of registration.
(2) Administrative sanctions as referred to in paragraph (1) letters b, c, d, e, f, or g may be imposed with or without prior imposition of administrative sanctions in the form of a written warning as referred to in paragraph (1) letter a. (3) Administrative sanctions in the form of a fine as referred to in paragraph (1) letter b may be imposed separately or together with the imposition of administrative sanctions as referred to in paragraph (1) letters c, d, e, f, or g.

Article 18
In addition to administrative sanctions as referred to in Article 17 paragraph (1), the Financial Services Authority may take certain actions against any party that violates the provisions of this Financial Services Authority Regulation.

Article 19
The Financial Services Authority may announce the imposition of administrative sanctions as referred to in Article 17 paragraph (1) and certain actions as referred to in Article 18 to the public.

CHAPTER IV
CLOSING PROVISIONS
Article 20
Upon the implementation of this Financial Services Authority Regulation, the Decision of the Head of the Capital Market Supervisory Agency Number Kep-49/PM/1996 concerning Guidelines on the Form and Content of Public Company Registration Statements, along with Regulation Number IX.B.1 which is its attachment, is revoked and declared invalid.

Article 21
This Financial Services Authority Regulation comes into force on the date of its promulgation.

This copy is in accordance with the original
Director of Law 1
Legal Department signed
Yuliana

To ensure everyone knows it, order the promulgation of this Financial Services Authority Regulation by placing it in the State Gazette of the Republic of Indonesia.

Established in Jakarta on December 21, 2017
CHAIRMAN OF THE COMMISSIONERS COUNCIL
FINANCIAL SERVICES AUTHORITY, signed
WIMBOH SANTOSO

Promulgated in Jakarta on December 22, 2017
MINISTER OF LAW AND HUMAN RIGHTS
REPUBLIC OF INDONESIA, signed
YASONNA H. LAOLY

STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2017 NUMBER 298

EXPLANATION
OF
FINANCIAL SERVICES AUTHORITY REGULATION
NUMBER 77 /POJK.04/2017
CONCERNING
GUIDELINES ON THE FORM AND CONTENT OF PUBLIC COMPANY REGISTRATION STATEMENTS

I. GENERAL
That since December 31, 2012, the functions, duties, and authority for regulating and supervising financial services activities in the capital market, insurance, pension funds, financing institutions, and other financial service institutions have transferred from the Minister of Finance and the Capital Market and Financial Institution Supervisory Agency to the Financial Services Authority.

In relation to the above, it is necessary to reorganize the existing regulatory structure, particularly those related to the capital market sector by converting Capital Market and Financial Institution Supervisory Agency Regulations related to the capital market sector into Financial Services Authority Regulations. This reorganization is carried out so that there are Financial Services Authority Regulations related to the capital market sector that are consistent with Financial Services Authority Regulations in other sectors.

Based on the background thinking and aspects mentioned, it is necessary to replace legal provisions in the capital market sector regulating guidelines on the form and content of Public Company Registration Statements, namely the Decision of the Head of the Capital Market Supervisory Agency Number Kep-49/PM/1996 concerning Guidelines on the Form and Content of Public Company Registration Statements, along with Regulation Number IX.B.1 which is its attachment, into a Financial Services Authority Regulation concerning Guidelines on the Form and Content of Public Company Registration Statements.

II. ARTICLE BY ARTICLE
Article 1
Sufficiently clear.

Article 2
Sufficiently clear.

Article 3
Sufficiently clear.

Article 4
Sufficiently clear.

Article 5
Paragraph (1)
The brief description aims to provide an explanation regarding the financial condition and business activities of the Public Company at the time the Registration Statement is submitted and expected in the future.

Paragraph (2)
Sufficiently clear.

Article 6
Sufficiently clear.

Article 7
Sufficiently clear.

Article 8
Letter a
Number 1
Sufficiently clear.

Number 2
Sufficiently clear.

Number 3
Sufficiently clear.

Number 4
Sufficiently clear.

Number 5
The term "important agreements" includes, among others, licenses, major buyers, appointment of agents or exclusive distributors of important products, and technical agreements.

Number 6
The term "facilities and infrastructure controlled by the company" includes, among others, land, buildings, and factories and their status.

Number 7
Sufficiently clear.

Letter b
Sufficiently clear.

Letter c
Sufficiently clear.

Article 9
Letter a
Number 1
Sufficiently clear.

Number 2
This provision is not intended as a mandatory disclosure of information about the company that is not generally accessible because it may disadvantage the Public Company's competitive position.

Number 3
Sufficiently clear.

Number 4
Sufficiently clear.

Number 5
Sufficiently clear.

Item 6
It is sufficiently clear.

Item 7
It is sufficiently clear.

Item 8
The term "business activities of Public Companies in relation to working capital that pose special risks" includes among others:
a) holding significant inventory; b) allowing for the return of merchandise; and c) offering flexible payment terms to customers.

Item 9
It is sufficiently clear.

Item 10
It is sufficiently clear.

Item 11
It is sufficiently clear.

Item 12
It is sufficiently clear.

Item 13
It is sufficiently clear.

Letter b
It is sufficiently clear.

Article 10
It is sufficiently clear.

Article 11
It is sufficiently clear.

Article 12
It is sufficiently clear.

Article 13
It is sufficiently clear.

Article 14
It is sufficiently clear.

Article 15
It is sufficiently clear.

Article 16
It is sufficiently clear.

Article 17
It is sufficiently clear.

Article 18
The term "certain actions" includes among others the postponement of the issuance of effectiveness statements, for example, effectiveness statements for business mergers or consolidations.

Article 19
It is sufficiently clear.

Article 20
It is sufficiently clear.

Article 21
It is sufficiently clear.

SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 6166