Matahari Putra Prima Tbk PT : Explanation for the Explanation Request from IDX

3ac42e98-1e9d-4415-998c-1534026afcc8.pdf

Number	013/MDS/CSL/02/2016
Company's Name	Matahari Department Store Tbk
Share Code	LPPF
Attachment	1
Subject	Explanation for the Explanation Request from IDX

Explanation Request from IDX

We refer to the letter from Indonesia Stock Exchange ("IDX") No S-00572/BEI.PP2/01-2016 dated 28 January 2016. IDX requested PT Matahari Department Store Tbk ("the Company") to give explanations to the questions from IDX regarding the affiliated transaction between the Company and PT Global Ecommerce Indonesia ("GEI"). In connections to the IDX's questions, herewith we inform as follow:

1. The source of funds used to purchase the share option in GEI

   • The source of fund used by the Company to purchase the share option in GEI is from the Company's internal cash flow.

     
     

2. The estimated revenue contribution from GEI to the Company's financial performance after purchasing the share option

   • the Company's share investment in the GEI is 10% and in accordance to the IFAS, the investment will be recorded

     by the cost method, and therefore the financial statement of GEI will not be consolidated and the GEI's profit/loss will not affect the Company's financial statement. However, since the Company has signed a cooperation agreement with MatahariMall regarding the Company's products sales through the e-commerce exclusively, this will increase the income of the Company and MatahariMall, where MatahariMall could serve the Company's underserved market via e-commerce. GEI through MatahariMall is the first company in Indonesia which developed the O2O e-commerce component ,

     which means online to offline and offline to online. The customer who buys online can take the product in the Company's stores across Indonesia, which will create traffic to the Company's outlet, and increase the Company's sales potential. Furthermore, the Company's customers who is looking for the product sold in the Company's store but could not find the suitable size or color might find it online, thus will reduce the potential loss of sales and increase the Company's sales performance eventually.

     
     

3. Based on the summary of financial performance of GEI as of 31 July 2015, GEI recorded a net loss of Rp 59,447,453,295, please explain:

4. The Company's considerations to invest in GEI which recorded a quite large net loss

   • The Company views e-commerce business as a significant opportunity to expand the business network of the Company throughout Indonesia as a retail company. Furthermore, e-commerce is a new business, and a new business generally will experience an initial loss, however the Company believes that e-commerce is a business with good prospects in

     the future. The Company also views that this investment is made as a foundation for strategic long-term relationship with GEI and MatahariMall. The Company believes that the investment in GEI and partnership with MatahariMall concurrently with the new opportunity to foster O2O e-commerce components will encourage the sales increase significantly in the future, and will improve the Company's profit. The Company also observes the opportunity to invest in initial stage at preferable price for the future, as well as to grab opportunity to display and market the Company's exclusive brand throughout Indonesia via e-commerce.

     
     

5. Time estimation for GEI to generate net income

   • GEI expect to record net income in the next two to three years, and it will depend on the whole economy development, including government's policies, regulations, the national and international social and political conditions. E-commerce

     is a new business with good prospects, however currently, e-commerce is still in the early stages.

     
     

6. Is the Company planning to increase the investment in GEI to control and consolidate GEI? If yes, please explain the issue

   • Currently, the Company has no plan to increase the investment in GEI.

     
     

7. Supports which will be provided by the Company by giving synergy to GEI.

   • The Company has signed a cooperation agreement with MatahariMall regarding the Company's products sales through e-commerce exclusively, this will increase the income of the Company and Matahari Mall, where MatahariMall could serve the Company's underserved market via e-commerce. GEI through MatahariMall is the first company in Indonesia which developed the O2O e-commerce component, which means online to offline and offline to online. The customer who buys online can take the product in the Company's stores across Indonesia, which will create traffic to the Company's outlets, and increase the Company's sales potential. Furthermore, the Company's customers who is looking for the product sold in the Company's store but could not find the suitable size or color might find it online, thus will reduce the potential loss of sales and increase the Company's sales performance eventually.

     
     

8. Facts/material information/event highlights which significantly can affect the Company and viewed to have a potential to affect the fluctuation of the Company's shares price, which has not been disclosed to public and required to be disclosed immediately.

• Currently the Company does not have any facts/material information/event highlights which significantly can

affect the Company and viewed to have a potential to affect the fluctuation of the Company's shares price, which has not been disclosed to public and required to be disclosed immediately.




Sender	Miranti Hadisusilo
Position	Corporate Secretary & Legal Director
Date and Time	February 02, 2016 04:29:14 PM
Attachment	013 - BEI - Explanation for the Explanation Request from IDX




This is an official document of PT Matahari Department Store Tbk which does not require a signature. This document is electronically generated by the electronic reporting system.

PT Matahari Department Store Tbk is fully responsible for the information in this document.




This is an official translation made by PT Matahari Department Store Tbk