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Asset transaction Needs review HMSP

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Page 1
                                    DISCLOSURE OF INFORMATION
                                RELATED TO AFFILIATED TRANSACTIONS

THIS DISCLOSURE OF INFORMATION HAS BEEN MADE TO COMPLY WITH THE FINANCIAL SERVICES AUTHORITY (“OJK”)
REGULATION NO. 42/POJK.04/2020 DATED 2 JULY 2020 ON AFFILIATED TRANSACTIONS AND CONFLICT OF INTEREST
TRANSACTIONS (“POJK 42”) IN CONNECTION WITH THE EXECUTION OF TRADEMARK LICENSE AGREEMENT.
THE INFORMATION CONTAINED IN THIS DISCLOSURE OF INFORMATION IS IMPORTANT TO BE READ AND NOTED BY THE
COMPANY’S SHAREHOLDERS. IF YOU FIND DIFFICULTIES IN UNDERSTANDING THE INFORMATION SET FORTH IN THIS
DISCLOSURE OF INFORMATION, YOU ARE SUGGESTED TO CONSULT WITH YOUR BROKER, INVESTMENT MANAGER, LEGAL
COUNSEL, PUBLIC ACCOUNTANT OR OTHER PROFESSIONAL ADVISORS.
THE BOARD OF DIRECTORS AND THE BOARD OF COMMISSIONERS ARE, JOINTLY AND SEVERALLY, FULLY RESPONSIBLE FOR
THE TRUE AND CORRECTNESS, AND COMPLETENESS OF THE INFORMATION DISCLOSED HEREIN AND IN ANY ADDITIONAL
DISCLOSURE, IF ANY, AND HEREBY CONFIRM THAT THE INFORMATION CONTAINED IN THIS DISCLOSURE OF
INFORMATION IS CORRECT, AND THERE IS NO SIGNIFICANT, MATERIAL AND RELEVANT FACT THAT HAS NOT BEEN
DISCLOSED OR HAS BEEN REMOVED SUCH THAT THE DISCLOSURE OF INFORMATION HEREIN BECOMING INCORRECT
AND/OR MISLEADING.
AFTER CAREFUL EXAMINATION, THE COMPANY'S BOARD OF DIRECTORS AND BOARD OF COMMISSIONERS, JOINTLY AND
SEVERALLY STATES THAT THESE AFFILIATED TRANSACTIONS ARE NOT CONSTITUTE A MATERIAL TRANSACTION AS MEANT
BY POJK 17 (AS DEFINED IN THIS DISCLOSURE OF INFORMATION) AND DO NOT CONTAIN ANY CONFLICT OF INTEREST AS
MEANT BY POJK 42.
THE BOARD OF DIRECTORS OF THE COMPANY, BOTH JOINTLY AND SEVERALLY STATES THAT THESE AFFILIATED
TRANSACTIONS HAVE WENT THROUGH ADEQUATE PROCEDURES TO ENSURE THAT THESE AFFILIATED TRANSACTIONS
ARE IMPLEMENTED IN ACCORDANCE WITH THE GENERALLY APPLICABLE BUSINESS PRACTICES.




                               PT HANJAYA MANDALA SAMPOERNA Tbk.
                                         (the “Company”)

                                          Domiciled in Surabaya
                                              Business Line:
                                            Cigarette Industry
                                               Head Office:
                     Jl. Rungkut Industri Raya No. 18, Surabaya 60293, Indonesia
                         Telephone: 031 – 843 1699, Facsimile: 031 – 843 0986
                                             Factory Location:
                   Surabaya, Pasuruan, Malang, Karawang, Probolinggo, Blitar, Tegal
                                   Corporate Representative Office:
                    One Pacific Place, 18th Floor, Sudirman Central Business District,
                                     Jl. Jend. Sudirman Kav. 52-53,
                                         Jakarta 12190, Indonesia
                         Telephone: 021 – 515 1234, Facsimile: 021 – 515 2234

                 This Disclosure of Information is published in Jakarta on July 2, 2024
Page 2
                                              DEFINITIONS


Disclosure of Information: means the disclosure of information related to affiliated transaction as
specified in the announcement and/or disclosure of information and any additional information that may
or will be made available.

Fairness Opinion Report: means a report submitted by the Independent Appraiser No. 00076/2.0095-
00/BS/04/0269/1/VI/2024 dated 28 June 2024 regarding fairness opinion on the Transaction.

The Financial Services Authority or OJK: means the independent institution as set forth under Law No.
21 of 2011 on the Financial Services Authority (“OJK Law”), who has the regulatory and supervisory duties
and authorities over the sectors of banking, capital market, insurance, pension fund, financing and other
financial institutions, and as of December 31, 2012, OJK is the institution that has replaced and accepts
the rights and obligations to run the regulatory and supervisory functions from Bapepam and/or Bapepam
and LK pursuant to Article 55 of the OJK Law.

Independent Appraiser: means the public appraiser firm of KJPP Ruky, Safrudin & Rekan, an independent
appraiser registered with OJK that has been appointed by the Company to appraise the fairness of the
Transaction.

Device: means all parts of components, such as heating devices, either in electronic or other forms,
electronic chargers, electronic holders/heaters, cleaners, batteries, electronic spares and other
accessories thereof that are bearing the trademarks of the brand families or unbranded, as determined
by PMPSA or its affiliates and/or registered by PMPSA in the Territory.

Trademark License Agreements: collectively, Trademark License Agreement I and Trademark License
Agreement II.

Trademark License Agreement I: means the trademark license agreement signed by PMGB as the licensor
and the Company as the licensee, effective as of July 1, 2024, in relation with the licensing of the
trademark for Conventional Products.

Trademark License Agreement II: means an amendment to the trademark license agreement for Smoke-
Free Products signed by PMPSA as the licensor and the Company as the licensee, effective as of July 1,
2024, in relation with changes to certain provisions as stipulated in the trademark license agreement
between PMPSA and the Company dated July 29, 2022, in which the information disclosure was submitted
on August 2, 2022.

The Company: means PT Hanjaya Mandala Sampoerna Tbk., a publicly listed company incorporated under
and subject to the laws of Indonesia, domiciled in Surabaya, Indonesia.

PMGB: means Philip Morris Global Brands Inc., a company incorporated under the laws of the State of
Delaware, United States, engaged in the management and strategy of brands of tobacco products, other
tobacco products and/or other nicotine-containing products.

PMID: means PT Philip Morris Indonesia, the major shareholder of the Company, a limited liability
company incorporated under the laws of Indonesia, engaged in the white cigarette industry.

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PM International: means Philip Morris International Inc., a business entity incorporated under the laws
of the Commonwealth of Virginia, United States, engaged in the manufacturing and trading of cigarettes,
other tobacco products and other nicotine-containing products marketed outside the United States, and
owns, directly or indirectly, 100% of the issued shares in PMGB, PMPSA, and PMID.

PMPSA: means Philip Morris Products SA, a company incorporated under the Swiss law, engaged in the
manufacturing, trading and marketing of cigarettes, other tobacco products and other nicotine-containing
products.

POJK 17: means The Financial Services Authority Regulation No. 17/POJK.04/2020 dated 21 April 2020, on
Material Transactions and Changes in Main Business Activities.

POJK 42: means The Financial Services Authority Regulation No. 42/POJK.04/2020 dated 2 July 2020, on
Affiliated Transactions and Conflict of Interest Transactions.

Products: collectively, Smoke-Free Products and Conventional Products.

Smoke-Free Products: collectively, Consumable Tobacco Units and Device.

Conventional Products: means all clove cigarettes that in any case are trademarked from the brand family
used on or in connection with the products mentioned herein, as well as any trademarks and labels and
trade names that PMGB or its affiliates use, apply for and/or register in the Territory.

Transaction: means the licensing of the Products as described in the Trademark License Agreements.

Capital Market Law: means Law No. 8 of 1995 dated 10 November 1995 on Capital Market.

Consumable Tobacco Units: means a consumable tobacco unit designed for use with the Device by
heating (including patented consumable tobacco sticks) that in any case uses a trademark of the PMPSA
brand family is or has been registered by PMPSA in the Territory.

Territory: means the duty paid and excise tax paid domestic market of the Republic of Indonesia.

                                             INTRODUCTION

This Disclosure of Information is made in connection with the Transaction. The Trademark License
Agreements are Affiliated Transactions according to POJK 42. However, the Trademark License
Agreements are not Transactions with Conflict of Interest as defined under POJK 42 and are not Material
Transactions as defined under POJK 17, based on an appraisal report from the Independent Appraiser
regarding the fairness of the Transaction, the summary of which is presented in Section III of this
Disclosure of Information.




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                                I. DESCRIPTION ON THE TRANSACTION


A.   Background and Reasons for the Transaction


     The Company needs to ensure that it can (i) manufacture and distribute certain Conventional
     Products; and (ii) manufacture and distribute Consumable Tobacco Units and distribute certain
     Devices, in the Territory. PMPSA, as the owner of certain trademarks and other intellectual
     property rights, including patents relating to Smoke-Free Products in the Territory, and PMGB, as
     the owner of certain trademarks and other intellectual property rights relating to Conventional
     Products in the Territory, agree to grant a license and/or sublicense these rights to the Company.
     The Company intends to use the trademarks and intellectual property rights of PMPSA and PMGB
     for the following activities:

     (i)   manufacture and distribute certain Consumable Tobacco Units and Conventional Products,
           and distribute the Devices;
     (ii) make sales of the Products and after-sales service for the Devices;
     (iii) import the Devices, either directly or indirectly through local affiliates of the Company in
           accordance with applicable regulations; and
     (iv) advertising and promotion by the Company for Products in the Territory.

B.   Object of the Agreement and Transaction Value

      1. Object of the Transaction

           Each of PMPSA and PMGB grants to the Company, a non-transferable, non-exclusive, non-
           sub-licensable license (except to subcontractors who have been engaged by the Company) to
           use the trademarks and intellectual property rights owned by: (i) PMPSA for the Smoke-Free
           Products; and (ii) PMGB for the Conventional Products, for an indefinite period until
           terminated by either party.

      2. Transaction Value

           Based on the Trademark License Agreement I, the royalty paid by the Company is 15% (fifteen
           percent) of the Net Sales Value of Conventional Products carried out by the Company.
           Furthermore, based on the Trademark License Agreement II, the royalty paid by the Company
           is 17% (seventeen percent) of the Net Sales Value of Smoke-Free Products carried out by the
           Company.

           The value of royalty payments for Smoke-Free Products is estimated at IDR 333,627,343,531
           on average per year and for Conventional Products it is estimated at IDR 256,216,607,318 on
           average per year. Based on the above, the value of the Trademark License Agreement I and
           the Trademark License Agreement II, respectively, is 1.12% and 0.86% of the Company's
           equity based on the Company's audited annual financial statements as of December 31, 2023.

           Thus, the Trademark License Agreements are not Material Transactions as defined in POJK 17.


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C.   Benefits and Impact of Trademark License Agreements on the Company

     The Trademark License Agreements allows the Company to continue to manufacture
     Conventional Products and Consumable Tobacco Units, as well as sell Products within the
     Territory legally so that the Company can maintain its competitive advantages by offering a
     diverse portfolio of tobacco products. Apart from that, the Trademark License Agreements also
     allow the Company to at least maintain its market share in the Territory.

D.   Parties to the Transaction and Their Relationships with the Company

     The chart below shows the affiliation relationship between the Company and PMGB as parties to
     the Trademark License Agreement I and the Company with PMPSA as parties to the Trademark
     License Agreement II:




     PMPSA is a business entity incorporated under Swiss law whose registered office is located at Quai
     Jeanrenaud 3, 2000 Neuchatel, Switzerland, engaged in the manufacturing and sale of tobacco
     products. Meanwhile, PMGB is a company incorporated under the laws of the State of Delaware,
     United States, engaged in the business of managing and strategizing the brand of tobacco
     products, other tobacco products and/or other nicotine-containing products.

     Each of PMPSA and PMGB is an affiliated company of the Company's major shareholder, namely
     PMID.

     Currently, PMID owns 92.44% shares in the Company. PMID, PMGB and PMPSA are controlled by
     PM International.

     The current composition of management of PMPSA is as follows:

     President Director      : Jacek Olczak

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     Vice President               : Andolina Massimo

     The current composition of management of PMGB is as follows:

     President                    : Stacey Kennedy
     Vice President               : Ann Marie Kaczorowski

E.   Nature of Affiliated Relation between Parties to the Transaction

     As explained above, PMID owns approximately 92.44% of the shares in the Company and is
     therefore PMID the major shareholder of the Company. Furthermore, PMID, PMGB, PMPSA are
     owned (directly or indirectly) and therefore controlled by PM International. Based on these
     matters, the Company is an Affiliate Party of PMGB and PMPSA based on the Capital Market Law
     and POJK 42.

                                           II. DESCRIPTION ON THE COMPANY

A.   History

     The Company is a publicly listed limited liability company established under the laws of the
     Republic of Indonesia within the framework of the Indonesian Capital Investments Law. The
     Company was established on October 19, 1963, by virtue of Deed No. 69 dated October 19, 1963,
     which was amended by Deed No. 46 dated April 15, 1964, both drawn up before Anwar
     Mahajudin, S.H., Notary in Surabaya, which have been approved by the Minister of Justice of the
     Republic of Indonesia by virtue of his Decree No. J.A.5/59/15 dated April 30, 1964 and have been
     published in the State Gazette of the Republic of Indonesia No. 94 dated November 24, 1964,
     Supplement No. 357. The articles of association of the Company have been amended several
     times, lastly by virtue of Deed No. 41 dated June 9, 2022, drawn up before Notary Aulia Taufani,
     S.H., which has obtained approval from the Minister of Law and Human Rights of the Republic of
     Indonesia by virtue of his Decree No. AHU-0044445.AH.01.02.TAHUN 2022, dated June 29, 2022.

B.   Capital Structure and Shareholding Composition

     The capital structure and the shareholding composition of the Company based on Shareholders’
     Register of the Company as June 21, 2024, are as follows:


       Authorized Capital: IDR 630,000,000,000                            Nominal Value       : IDR 4/share
       Subscribed and Issued Capital: IDR 465,272,307,600

        No                           Name                        Number of Shares   Nominal Value (IDR)         %

        1      Public shareholders holding more than 5% - PMID    107,523,239,925     430,092,959,700         92.44

        2      Other public shareholders                            8,794,836,975         35,179,347,900      7.56

                                  Total                           116,318,076,900     465,272,307,600         100




                                                        5
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C.      Capital Structure and Shareholding Composition


        The compositions of members of the Board of Commissioners and of the Board of Directors of the
        Company pursuant to Deed No. 4 dated June 7, 2024, drawn up before Aryanti Artisari, S.H.,
        M.Kn., Notary in Administrative City of South Jakarta, which has obtained the Receipt of the
        Notification of Changes in the Company's Data from the Minister of Law and Human Rights No.
        AHU-AH.01.09-0215933 dated June 20, 2024, are as follows:

        The Board of Commissioners
        President Commissioner           :        John Gledhill
        Vice President Commissioner      :        Paul Norman Janelle
        Independent Commissioner         :        Justin Guy Mayall
        Independent Commissioner         :        Luthfi Mardiansyah

        The Board of Directors
        President Director               :        The Ivan Cahyadi
        Director                         :        Sergio Colarusso
        Director                         :        Elvira Lianita
        Director                         :        Andre Dahan
        Director                         :        Gunnar Beckers
        Director                         :        Johan Bink
        Director                         :        Sharmen Karthigasu
        Director                         :        Yohan Lesmana

                         III. SUMMARY OF OPINION OF THE INDEPENDENT APPRAISER


To ensure fairness of the Transaction and also to ensure that the Transaction do not have a conflict-of-
interest element, the Company has appointed Ruky, Safrudin & Rekan as the Independent Appraiser
carrying out the assessment of the fairness of the Transaction.

The Independent Appraiser states that it has no affiliate relationship either directly or indirectly with the
Company as defined under the Capital Market Law.

Summary of Fairness Opinion of the Independent Appraiser
Identity of the Valuer
KJPP Ruky, Safrudin dan Rekan has a business license from the Ministry of Finance of the Republic of
Indonesia No. 2.11.0095 based on the Decree of the Minister of Finance of the Republic of Indonesia No.
1131/KM.1/2011 dated October 14, 2011 and registered as capital market supporting professional in OJK
according to Registered Letter of Capital Market Supporting Professional (Business Valuer) No. STTD.PB-
23/PJ-1/PM.02/2023.
Object of The Fairness Opinion Analysis
The object of fairness analysis is the Company plan to use the trademarks and intellectual property rights
belonging to: (i) PMPSA for Smoke-Free Products consisting of consumable tobacco units and Device and
(ii) PMGB for conventional products in the form of kretek cigarettes.

                                                     6
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The Purpose of This Fairness Opinion
The purpose of this Fairness Opinion report is to provide opinion on the fairness of the Company plan to
use the trademarks and intellectual property rights belonging to: (i) PMPSA for Smoke-Free Products
consisting of consumable tobacco units and Device and (ii) PMGB for conventional products in the form
of kretek cigarettes, as outlined in this report in order to comply with POJK 42/2020, not for taxation
purpose, banking and not for other forms of transaction plan.

Assumptions and Disclaimer Limitations
Laporan Pendapat Kewajaran ini disusun dengan menggunakan Inkremental Proyeksi Keuangan yang
disiapkan oleh manajemen Perseroan dengan mencerminkan kewajaran proyeksi dan kemampuan
pencapaiannya (fiduciary duty).

This Fairness Opinion Report is a non-disclaimer opinion, we have reviewed the documents used in the
process of preparing the fairness opinion, data and information obtained from both management of the
Company and other reliable sources that can be trusted for accuracy.

This Fairness Opinion Report has been prepared using Incremental Financial Projection provided by
management of the Company by reflecting the fairness of the projections and the ability to achieve them
(fiduciary duty).

This fairness opinion is prepared based on the integrity of the information and data. In preparing this
fairness opinion, we have relied and based on the information and data prepared by the Company’s
management, which we deem to be true, complete, reliable and not misleading.

Methodology for Fairness Analysis
In evaluating the fairness of the Proposed Transactions, we used the following methodology analysis:
  1. Proposed Transactions Analysis: identification of parties involved in the Proposed Transactions, and
      analysis of benefit and risk of the Proposed Transactions;
  2. Qualitative analysis: analysis of background of the Proposed Transactions, brief explanation of the
      Company and business activities, industry analysis, operational analysis, business prospect,
      advantages and disadvantages of the Proposed Transactions;
  3. Quantitative analysis: historical analysis, analysis of proforma financial statements, and incremental
      financial projections analysis;
  4. Analysis of other relevant factors, in the form of analysis of relevant costs and revenues, relevant
      non-financial information that can provide confidence in providing a fairness opinion;
  5. Analysis on the Fairness of the Proposed Transactions Price;

Fairness Opinion of the Transactions
By considering the fairness analysis of the Proposed Transactions which includes analysis of the Proposed
Transactions, qualitative analysis and quantitative analysis, analysis of the fairness of the transaction price
and other relevant factors, in RSR's opinion, the Proposed Transactions are fair.


           IV. STATEMENT OF THE BOARD OF DIRECTORS AND BOARD OF COMMISSIONERS


In connection with the Transaction, the Board of Directors and the Board of Commissioners of the
Company declare that, after conducting a reasonable examination and to the best of their knowledge and

                                                      7
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belief, all material information has been disclosed in this Disclosure of Information and such information
is not misleading.


                                       V. ADDITIONAL INFORMATION


Shareholders who have questions about this Disclosure of Information or who wish to have additional
information are invited to contact:



                            The Corporate Secretary and Investor Relations
                              PT HANJAYA MANDALA SAMPOERNA Tbk.
                                     One Pacific Place, 18th Floor,
                                  Sudirman Central Business District,
                                    Jl. Jend. Sudirman Kav. 52-53,
                                        Jakarta 12190, Indonesia
                                      Telephone: 021 – 515 1234
                                       Facsimile: 021 – 515 2234

                                                                                    Jakarta, July 2, 2024
                                                                  The Board of Directors of the Company




                                                    8

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linked org HANJAYA MANDALA SAMPOERNA Tbk. p.1 ×8
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linked person John Gledhill p.7
linked person Paul Norman Janelle p.7
linked person Justin Guy Mayall p.7
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linked person The Ivan Cahyadi p.7
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linked person Johan Bink p.7
linked person Sharmen Karthigasu p.7
linked person Yohan Lesmana p.7
possible — Central Business p.1 ×2
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unresolved org KJPP Ruky p.2 ×2
unresolved org Safrudin & Rekan p.2 ×2
unresolved org Philip Morris International Inc. p.3
unresolved person Anwar Mahajudin · Notaris p.6
unresolved org Minister of Justice p.6
unresolved person Notary Aulia Taufani p.6
unresolved org Minister of Law and Human Rights p.6
unresolved org Public shareholders holding more than 5% - PMID p.6
unresolved person Aryanti Artisari · Notaris p.7
unresolved org Safrudin dan Rekan p.7
unresolved org Ministry of Finance p.7
unresolved org Minister of Finance p.7

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