Acquisition Effect on Subsidiary Firm Value

ACQUISITION EFFECT TOWARDS VALUE OF THE SUBSIDIARY FIRMS:
STUDY OF HOLDING STRATEGY BETWEEN PERUM PERHUTANI &

PT.INHUTANI I-V
FINAL PROJECT
By
Ardista Laras Hapsari
19014049
Undergraduate Program
School of Business and Management
Institut Teknologi Bandung

ii
VALIDATION PAGE

PT.INHUTANI I-V
By:
19014049
Undergraduate Program
School of Business and Management
Institut Teknologi Bandung
2017
Supervisor,
Ahmad Danu Prasetyo, Ph. D.
iii
iv
FOREWORD
All praises go to Allah SWT, because without His blessings and mercy, this project could
not be completed. Then, the prayers and greetings also head to our prophet Muhammad
SAW. The final project which entitled Acquisition Effect Towards Value Of The
Subsidiary Firms: Study of Holding Strategy Between Perum Perhutani & Pt.Inhutani I-
V was developed as one of the requirements to complete the study and receive a bachelor
degree at School of Business and Management, Institut Teknologi Bandung.
In completing this research, the author has fully acknowledged the limitation. Therefore,
the author would like to thank these individuals who have supported him so that the
research can be finished:
1. The authors supervisor, Mr. Ahmad Danu Prasetyo, Ph. D., for his helpful
guidance, advice, and encouragement.
2. The authors beloved family, for their support and constant encouragement.
3. The authors friends, for their support.
This final project is far from perfect. Thus, all criticisms and suggestions to make this
research become better are welcome. Hopefully, this final project can be useful for the
readers.
Sincerely,
v
PT.INHUTANI I-V

19014049
Supervisor: Ahmad Danu Prasetyo, Ph. D.
Undergraduate Program School of Business and Management
Institut Teknologi Bandung, 2017
ABSTRACT
Indonesia as one of the large forest country in the world must be supported by a strong
forestry business sector to maintain the industry existence. However, in reality, there still
exist the forestry companies that have unhealthy financial performance based on the
standard of Minister for State-Owned Enterprises (SOEs). Then at the end of 2014, the
Indonesian government held a holding strategy between several SOEs companies, which
then acquisationed PT.Inhutani I-V as a subsidiary of Perum Perhutani. This strategy has
an objective to improve the corporate value of subsidiaries, especially those who have
poor financial performance records. This research is then intended to investigate whether
the holding strategy is successful in achieving its main objective or not by comparing the
value of the subsidiary firms in two year before (2013-2014) and after the acquisition
(2015-2016). The method used in this research is Discounted Cash Flow and Enterprise
Value Analysis to calculate the value of a subsidiary. Then it continued with Difference-
in-Difference Analysis to know the significance of the parent role of the company to
change the value of subsidiary after the acquisition. The result of analysis shows that the
change of subsidiary value after acquisition tends to fluctuate on DCF method result and
tends to increase in some subsidiary on EV analysis result. Then, on the difference-in-
difference analysis shows that there is no sign of the parent role of the company to change
the value of subsidiary after the acquisition. The result of this study can be used to be an
evaluation for the parties involved in the acquisition of this strategy, including the
government as a holding organizer.
Keywords: Acquisition Strategy, Discounted Cash Flow Method, Enterprise Value

Analysis, Difference-in-Difference Analysis.
vi
PENGARUH AKUISISI TERHADAP NILAI PERUSAHAAN ANAK
PERUSAHAAN: STUDI STRATEGI HOLDING ANTARA PERUM
PERHUTANI & PT.INHUTANI I-V

19014049
Pembimbing: Ahmad Danu Prasetyo, Ph. D.
Program Sarjana Sekolah Bisnis dan Manajemen
Institut Teknologi Bandung, 2017
ABSTRAK
Indonesia sebagai salah satu negara hutan besar di dunia harus didukung oleh sektor
bisnis kehutanan yang kuat untuk menjaga eksistensi industri. Namun, kenyataannya
masih ada perusahaan kehutanan yang memiliki kinerja keuangan tidak sehat berdasarkan
standar Menteri Badan Usaha Milik Negara (BUMN). Kemudian pada akhir 2014,
pemerintah Indonesia mengadakan strategi holding antara beberapa perusahaan Badan
Usaha Milik Negara (BUMN), yang kemudian mengakuisisi PT.Inhutani I-V sebagai
anak perusahaan Perum Perhutani. Strategi ini bertujuan untuk meningkatkan nilai
perusahaan anak perusahaan, terutama bagi perusahaan yang memiliki catatan kinerja
keuangan yang buruk. Penelitian ini kemudian bertujuan untuk mengetahui apakah
strategi holding berhasil mencapai tujuan utamanya atau tidak dengan membandingkan
nilai anak perusahaan dalam dua tahun sebelum (2013-2014) dan sesudah akuisisi (2015-
2016). Metode yang digunakan dalam penelitian ini adalah Discounted Cash Flow (DCF)
dan Enterprise Value (EV) Analysis untuk menghitung nilai anak perusahaan. Kemudian
dilanjutkan dengan Difference-in-Difference Analysis untuk mengetahui signifikansi
peran induk perusahaan terhadap perubahan nilai anak perusahaan setelah akuisisi. Hasil
analisis menunjukkan bahwa perubahan nilai anak perusahaan setelah akuisisi cenderung
fluktatif pada hasil metode DCF dan cenderung meningkat di beberapa anak perusahaan
pada hasil analisis EV. Kemudian, pada Difference-in-Difference Analysis menunjukkan
bahwa tidak ada tanda-tanda peran induk perusahaan untuk mengubah nilai anak
perusahaan setelah akuisisi. Hasil penelitian ini bisa dijadikan evaluasi bagi pihak-pihak
yang terlibat dalam perolehan strategi ini, termasuk pemerintah sebagai holding
organizer.
vii
Keywords: Strategi Akuisisi, Metode Discounted Cash Flow, Analisis Enterprise Value,
Analisis Difference-in-Difference.
viii
TABLE OF CONTENT
VALIDATION PAGE .................................................................................................... iii
FOREWORD .................................................................................................................... v
ABSTRACT....................................................................................................................vii
ABSTRAK ......................................................................................................................vii
TABLE OF CONTENT ................................................................................................... ix
LIST OF TABLES ..........................................................................................................xii
LIST OF FIGURES ...................................................................................................... xiii
LIST OF APPENDICES ................................................................................................ xiv
CHAPTER 1 INTRODUCTION ...................................................................................... 1
1.1 Background ............................................................................................................. 1
1.2 Statement of Problem .............................................................................................. 4
1.3 Research Question ................................................................................................... 4
1.4 Research Objective.................................................................................................. 5
1.5 Scope and Limitation .............................................................................................. 5
1.6 Writing Structure ..................................................................................................... 5
CHAPTER 2 LITERATURE REVIEW ........................................................................... 7
2.1 Company Profile ..................................................................................................... 7
2.1.1 Perum Perhutani ............................................................................................... 7
2.1.2 PT. Inhutani I .................................................................................................... 8
2.1.3 PT. Inhutani II ................................................................................................ 10
2.1.4 PT. Inhutani III ............................................................................................... 13
2.1.5 PT. Inhutani IV ............................................................................................. 133
2.1.6 PT. Inhutani V .............................................................................................. 134
2.1.7 Summary of Company Profile ...................................................................... 135
2.2 Acquisition Theories ............................................................................................. 14
ix
2.2.1 Motives of Acquisition ................................................................................... 18
2.3 Holding Strategy ................................................................................................... 19
2.4 Valuation Theories ................................................................................................ 20
2.4.1 Discounted Cash Flow (DCF) Method ........................................................... 20
2.4.2 Enterprise Value Analysis .............................................................................. 25
2.4.3 Difference-in-Difference Analysis ................................................................. 26
CHAPTER 3 METHODOLOGY ................................................................................... 28
3.1 Problem Identification ........................................................................................... 29
3.2 Literature Review .................................................................................................. 29
3.3 Research Hypothesis ............................................................................................. 29
3.4 Data Collection ...................................................................................................... 30
3.5 Data Analysis ........................................................................................................ 30
3.5.1 Discounted Cash Flow (DCF) Analysis ........................................................ 30
3.5.2 Enterprise Value Analysis .............................................................................. 33
3.5.3 Difference-in-Difference Analysis ................................................................. 34
3.6 Conclusion and Recommendation ......................................................................... 35
CHAPTER 4 DATA ANALYSIS .................................................................................. 36
4.1 Discounted Cash Flow Analysis ........................................................................... 36
4.1.1 Free Cash Flow to Firm (FCFF) .................................................................... 36
4.1.2 Growth Rate .................................................................................................... 38
4.1.3 Cost of Debt (rd) and Cost of Equity (rs) ....................................................... 40
4.1.4 Debt Proportion (Wd) and Equity Proportion (Ws) ....................................... 41
4.1.5 Calculating Discount Rate (WACC) .............................................................. 43
4.1.6 Corporate Value using Discounted Cash Flow (DCF) Method ...................... 43
4.2 Enterprise Value Analysis ..................................................................................... 46
4.3 Choosing method between Discounted Cash Flow and Enterprise Value Analysis .. 47
4.4 Difference-in-Difference Analysis ........................................................................ 49
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CHAPTER 5 CONCLUSIONS AND RECOMMENDATIONS ................................... 50
5.1 Conclusion............................................................................................................. 50
5.2 Recommendation................................................................................................... 51
REFERENCES ............................................................................................................... 54
APPENDICES ................................................................................................................ 60
xi
LIST OF TABLES
TABLE 2.1 - The Composition of Shareholders of PT.Inhutani I in 2015 ...................... 9
TABLE 2.2 - The Composition of Shareholders of PT.Inhutani II in 2015 ................... 10
TABLE 2.3 - The Composition of Shareholders of PT.Inhutani III in 2015 .................. 12
TABLE 2.5 - The Composition of Shareholders of PT.Inhutani V in 2015 ................... 13
TABLE 4.7 Proportion of Equity (Ws)........................................................................ 14
TABLE 2.6 - Summary of Company Profile PT. Inhutani I-V ...................................... 15
TABLE 4.1 Free Cash Flow to Firm Result ................................................................ 34
TABLE 4.2 Growth Rate Calculation Result .............................................................. 36
TABLE 4.3 - Terminal Growh Value ............................................................................. 37
TABLE 4.4 Cost of Debt Value ................................................................................... 38
TABLE 4.5 Cost of Equity (rs) Value .......................................................................... 39
TABLE 4.6 Proportion of Debt (Wd)........................................................................... 40
TABLE 4.8 Weighted Average Cost of Capital (WACC) Value ................................ 42
TABLE 4.9 Corporate Value using Discounted Cash Flow Model............................. 43
TABLE 4.10 Enterprise Value ..................................................................................... 44
TABLE 4.11 Choosing Method DCF and EV ............................................................. 46
TABLE 4.12 Difference in Difference Coefficient Outcome ...................................... 47
xii
LIST OF FIGURES
FIGURE 1.1 Earning After Tax PT. Inhutani I-V ......................................................... 2
FIGURE 2.1 Difference-in-Difference Graph ............................................................. 25
FIGURE 3.1 Research Methodology ........................................................................... 26
TABLE 4.7 Proportion of Equity (Ws) ....................................................................... 66
TABLE 4.7 Proportion of Equity (Ws) ....................................................................... 66
xiii
LIST OF APPENDICES
APPENDIX A Balance Sheet and Income Statement .................................................... 58
APPENDIX B Free Cash Flow Calculation ................................................................... 73
APPENDIX C Growth Rate............................................................................................ 79
APPENDIX D Proportion of Debt (Rd) and Propotion of Equity (Rs) .......................... 82
APPENDIX E Cost of Equity (Ws) Calculation............................................................. 85
APPENDIX F Weighted Average Cost of Capital (WACC).......................................... 90
APPENDIX G Terminal Growth .................................................................................... 94
APPENDIX H Discounted Cash Flow Calculation ........................................................ 96
APPENDIX I Enterprise Value Calculation ................................................................ 107
APPENDIX J Data Input SPSS ................................................................................... 109
APPENDIX K Interview Transcript ............................................................................. 111
APPENDIX L Government Regulation Number 73 year of 2014 ............................... 115
xiv
CHAPTER 1
INTRODUCTION
1.1 Background
State-Owned Enterprises (SOEs) are one of the main business players of the
Indonesian economy. Besides to private business entities and cooperatives. SOEs
established to be able to play an active role and can contribute greatly to the
development of the country. Based on statistical data of the Ministry of Environment
and Forestry in 2016 that the production forest area of 69,242,000 Ha which can be
utilized for Forestry business and is the largest area in the world after Brazil. The
potential of the forest area should be utilized for the benefit of the State and the
community for profitable business activities and improving the national economy
through State-Owned Enterprises. The Forestry Sector can contribute positively to
the state, one of which is increasing state revenues and providing employment
(Indonesian Center for Environmental Law (ICEL), 2010).
However, business conditions in the forestry sector in Indonesia are deteriorating as

indicated by the declining potential of forests due to land conversion and high
economic costs (Maturana, 2014). According to Central Bureau of Statistics (BPS)
data, the forestry sector in 2014 is only able to contribute 0,06% of total Gross
Domestic Product (GDP) of Indonesia. In response to these conditions, the Ministry
of SOEs has made a strategic plan to empower and improve the performance of SOEs
in the field of Forestry can play a major role in improving the economy of the State.
The strategic action of the ministry of SOEs is to establish a holding company of

BUMN Kehutanan at the end of 2014 namely Perum Perhutani as the Parent
Company and all PT. Inhutani became a subsidiary. This study discusses the
subsidiaries namely PT.Inhutani I, PT. Inhutani II, PT.Inhutani III, PT. Inhutani IV,
and PT. Inhutani V. Based on the annual report of each company, these five
companies have the same core business of planting and logging with different
locations outside of Java.
1
FIGURE 1.1 Earning After Tax PT. Inhutani I-V
EARNING AFTER TAX PT. INHUTANI I-V

2011-2014 (in rupiah)
120,000,000,000
100,000,000,000
80,000,000,000
60,000,000,000
40,000,000,000
20,000,000,000
0
-20,000,000,000
-40,000,000,000
-60,000,000,000
2011 2012 2013 2014
PT Inhutani I 9,658,694,811 106,320,702,713 21,616,199,503 55,601,339,479
PT Inhutani II -37,508,973,627 -14,335,808,341 4,226,938,308 7,671,900,549
PT Inhutani III -3,662,458,777 -3,530,649,902 -7,672,979,004 -16,928,473,243
PT Inhutani IV 163,805,432 (4,757,232,330) -1,620,162,311 4,653,298,424
PT Inhutani V 9,658,694,811 106,320,702,713 21,616,199,503 55,601,339,479
The graph shows earnings after tax from PT. Inhutani I-V during 2011-2014. The data
obtained from income statement from each company in that period. The graph shows
profit after tax and loss PT.Inhutani I-V during year 2011-2014 is not stable on all
companies. This is indicated by an increase in some periods in some companies but in
other periods there are some companies that suffered losses in several years in 2011-
2014. Only PT. Inhutani I and PT. Inhutani V which in four years has never
experienced a loss in their earnings after tax.
On the PT graph. Inhutani for 2011-2014 showed that their earnings peaked when in
2012, amounting to Rp10,320,702,713. However, the condition is not maintained by
this company for 2013 because it then shows a drastic decline to Rp21,616,199,503 in
2013 and then increased slightly to the value of Rp55,601,339,479 in 2014.
On the earnings after tax chart of PT. Inhutani II showed that the company had suffered
losses in 2011 and 2012. But this condition then improved with an increase in two
years after that so it can reach the value Rp4,226,938,308.
Different conditions are shown by data owned by PT. Inhutani III which shows that
the company suffered losses in four consecutive years during 2011-2014. The worst
number with a value of -Rp16,928,473 achieved in 2014. Although there is an increase
in 2012, but the increase has not been able to make PT. Inhutani III becomes a profit
condition.
2
The development of the business performance in all of the companies from
PT.Inhutani has not changed significantly so that it needs a restructuring strategy and
maintains the stabilization of business targets by adjusting the external conditions and
organizational capabilities. In respond to the, The Government of Indonesia intends to
improve the performance of similar sector of forestry SOEs through the establishment
of holding in forestry business. Implementation of this holding strategy is based on
Government Regulation of the Republic of Indonesia Number 73 of 2014 concerning
the addition of state capital participation into the capital of Public Corporation of State
Forestry (Perum Perhutani).
The purpose of establishing a holding company in this BUMN is to increase the value
and performance of subsidiaries and transfer government control which is Minister of
Stated Owned Enterprises (SOEs) to parent company, Perum Perhutani (Sekretariat
Negara Republik Indonesia, 2006). With the enactment of this regulation, there is a
change of ownership of all the shares of a subsidiary that initially owned the
government's ownership is converted into shares of the holding company (Perum
Perhutani).
Holding forestry is formed at the end year of 2014 with Perusahaan Umum Kehutanan
Negara (Perum Perhutani) as the parent firm in this holding strategy and PT. Inhutani
I-V as a subsidiary. With the establishment of Perum Perhutani as a holding company
for PT. Inhutani I-V, the Perum Perhutani has an obligation and authority to assume
responsibility for all these subsidiaries. This obligation and authority must be carried
out well in order to realize the achievement of the initial objective of this SOE forestry
holding program. In one of the examples of obligations owned by Perum to the
Company is about guidance in the form of providing direction, monitor the
implementation of business activities and evaluate the running of the company to run
well in accordance with the intent and purpose of the establishment. This coaching
also aims to improve efficiency and added value and create independence in
subsidiaries. In the implementation of this holding, the government hopes to form a
3
synergy of mutual respect and benefit among parent company to the subsidiaries
without any intervention.
1.2 Statement of Problem
The implementation of holding by the Government of Indonesia in 2014 have a mission

to improve financial performance on PT. Inhutani I-V who have poor financial track
record. From that objective, Perum Perhutani as a parent company has an obligation to
contribute in realizing the objectives of the acquisition program. Responding to that issue,
it is necessary to evaluate the holding program to ensure the achievement of the objective
which is to improve the financial welfare of PT. Inhutani I-V.
1.3 Research Question
Based on the problem statement above, then can be conclude to several of research
question as shown below:
1. Are PT.Inhutani I-V as a target firm get the better valuation after acquisition with
Perum Perhutani?
2. Is the position of Perum Perhutani as a parent company affecting for the change
of financial performance of its subsidiary firm which is Inhutani I-V?
1.4 Research Objective
The goal of the thesis is to answer that question below, which are:
1. To know the difference between the company's valuation independently and after
acquisition with discounted cash flow method and synergy valuation
2. To know whether Perum Perhutani as a parent company has give impact for the
differences of the changing financial performance of its subsidiary firm, PT.
Inhutani I-V.
4
1.5 Scope and Limitation
This research will use secondary data from PT. Inhutani I-V which is annual report
especially for balance sheet and income statement between 2010-2016 in order to know
the performance and growth of the company. Some assumption that will be used also
from the data that occurred between these years. The author used this range of years
because the acquisition occurred in 2014, so it need to compare the event before and after
2014. The limitation is considering the data availability, especially for any sensitive data
except that data already auditted and published. The scope of this final project is limited
to evaluating the level of achievement from acquisition strategy.
1.6 Writing Structure
The framework will be first described to figure out the research explanation that will be
discussed on each chapter.
Chapter I Introduction
In this chapter, it will explain about condition and information background and then
come out to be a problem statement. This chapter consists of the background that
leads choosing title research, background, problem statement, research questions, the
objective of this research, and scope limitation.
Chapter II Theoretical Framework and Literature Review
In this chapter, the theoretical framework which is the fundamental of this research
described along with the experts arguments. Theoretical part also explained based
on the main problem that already explain in chapter 1. The literature review is along
with the variables and the outcomes of the literature.
Chapter III Methodology
This chapter provides the method how the data is collected which is the secondary
data from the bidding firm and target firms. Besides, the methods to do the analysis
are shown in this chapter such as financial ratio, discounted cash flow, and synergy
valuation
5
Chapter IV Result and Data Analysis
This chapter provides the analysis of this result calculation and also the outcome
based on the research objective in the chapter 1. The method analysis is based on the
variables in the chapter 2 and the technical analysis in the chapter 3, so the correlation
between each chapter in this research will be seen clearly.
Chapter V Conclusion
In this chapter will explain about the sum up of result that found in previous chapter.
The conclusion will also answer the problem statement that state in chapter 1. In this
part also provide the recommendation according to the conclusion that will be
discussed.
References
Appendices
6
CHAPTER 2
LITERATURE REVIEW
This chapter present acquisition theories, the valuation determinants, the prior research,
and the conceptual framework.
2.1 Company Profile
2.1.1 Perum Perhutani
Establishment of Public Corporation (Perum) of State Forestry or called Perum Perhutani

constituted by Regulation of Government of Republic of Indonesia Number 15 the year
1972, which then changed several times until in the year 2017 has the latest regulation
that is Government Regulation Number 30 year of 2003. In that regulation mention that
all capital of this enterprise is owned by the state in the form of separated and undivided
share of state assets. The amount of corporate capital is equal to the value of state capital
participation set by the finance minister under the auspices of the Ministry of Finance.
Based on Government Regulation number 72 year 2010, The State Forestry Corporation
(Perum Perhutani) is a State Owned Enterprise which has the duty and authority of the
company's business to manage the state forest resources located in Indonesia, especially
in Java and Madura Island. In a more specific scope, Perum Perhutani has an obligation
to support environmental sustainability, socio-cultural system and community economic
system in forestry sector. While the purpose of the company is to conduct business that
aims for general benefit in the form of provision of goods or services related to forest
management. In managing the company's activities, Perhutani utilizes all mandatory and
voluntary rules to achieve its vision and mission as follows:
Vision
Became the world's foremost forest management company and beneficial to the
community
Mission
1. Managing forest resources sustainably
7
2. Prioritize the interests of the community and the environment by applying
awareness
3. Applying the principles of Good Corporate Governance to optimize the forest
business
Perum Perhutani has several subsidiaries acquired in different years. In the final year of
2014, the company acquired PT. Inhutani I-V after having three other subsidiaries that
had been acquired in the previous years. So the total subsidiaries owned by Perum
Perhutani are as follows:
PT. Inhutani I
PT. Inhutani II
PT. Inhutani III
PT. Inhutani IV
PT. Inhhutani V
PT. Palawi Risorsis
PT. Perhutani Anugerah Kimia
PT. BUMN Hijau Lestari
2.1.2 PT. Inhutani I
PT.Inhutani I is one of the SOEs included in the Ministry of Forestry established in 1973.
Based on the company's financial records report in 2015, the products resulting from the
company's business activities are wood making, sawn wood, door leaf, woodworking
(molding, S4S, solid laminating, finger joint laminating, finger joint stick dowel, garden
furniture) and pine resin.
Vision
Towards a Green Forestry Industry with diversified non-timber products business in
a balanced manner to improve the business performance of the company
Mission
1. Managing forests sustainably and certified
2. Developing plantations with superior commercial types
3. Develop wood-based wood product processing industry to be superior product
finish; and
8
4. Develop non-timber business based on the competence and potential resources
of the company
The total area of work permit for the utilization of wood forest products owned by the
company amounted to 688,883 hectares located in the Provinces of East Kalimantan,
South Sulawesi and West Sulawesi. Besides, the company also got permission to conduct
pine sap tapping activity in Tanah Toraja Regency on an area of 7,700hectare.
In the notes of 2015 financial statements sourced from the independent auditor stated
that, based on Government Regulation no. 73 of 2014 concerning the addition of State
Capital of the Republic of Indonesia dated September 17, 2014 stipulates that all shares
owned by PT.Inhutani (Persero) derived from the government are entitled to be invested
through Perum Perhutani. The transfer of ownership of shares resulted in PT.Inhutani
must be completely submitted to Perum Perhutani.
In the transfer of capital from the government to PT.Inhutani I amounting to

Rp450,333,000,000 in the form of 450,333 shares changed to 100% ownership of Perum
Perhutani. Then, based on notarial deed in the year 2015 noted that Perum Perhutani give
ownership of 0.02% or equal to Rp100,000,000 to Employee Cooperative PT.Inhutani I,
so that the composition of share ownership of PT. Inhutani I is as follows:
TABLE 2.1 - The Composition of Shareholders of PT.Inhutani I in 2015
Number of Issued and Fully

Description Ownership
Share Paid (Rp)
1 Perum Perhutani 450,233 99.98% 450,233,000,000
Koperasi Karyawan
2 100 0.02% 100,000,000
PT.Inhutani I
Total 450,333 100.00% 450,333,000,000
9
2.1.3 PT. Inhutani II
PT. Inhutani II is a State-owned Enterprise established on November 12, 1975 based on

Government Regulation No.32 of 1974 concerning the liquidation of State Enterprise of
Perhutani South Kalimantan into a Limited Liability Company (Persero)1.
Stated on company report of PT.Inhutani II at year of 2016 that the work area of this firm
is currently covering 336,731 hectares in the province of South Kalimantan, East
Kalimantan and North Borneo in the form of natural forest and plant forest products. In
carrying out its activities, the Board of Directors office of PT.Inhutani II is located at
Tebet street in Jakarta.
Based on Government Regulation no. 73 year 2014 on the addition of state capital
participation to the State General Company of Forestry, the amount of equity
participation of PT. Inhutani II from the government that changed its ownership to 100%
owned by Perum Perhutani amounted to 183,083,000,000 in the form of 183,083 shares.
Then, based on notarial deed of 2015, there is division of rights to some shares of Perum
Perhutani to PT.Inhutani II "Kaltara" Cooperative as much as 30 shares or 0.02% of total
ownership. So the composition of shareholders of PT.Inhutani II as follows:
TABLE 2.2 - The Composition of Shareholders of PT.Inhutani II in 2015

Issued and Fully Paid
Description Number of Share Ownership
(Rp)
1 Perum Perhutani 183,053 99.98% 183,053,000,000
Koperasi Karyawan PT.
2 30 0.02% 30,000,000
Inhutani II
Total 183.083 100.00% 183,083,000,000
1
Based on Pasal 1 Governement Regulation No.73 year 2014 regarding the increase in capital
investment by the goverment into the State Forestry Public Company
10
With the enactment of Government Regulation No.73 of 2014 then since then
PT.Inhutani II is fully subject to the Law.40 year 2007 about Limited Liability Company.
Vision2
Being forestry companies competitive and sustainable deliver added value.
Mission3
1. Managing the companys natural forests and plantations in a sustainable manner
2. Optimally realize the added value of each unit of managed forest concessions,
either through natural forest products, forest plantations, as well as agrofresty
products and bio energy.
3. Develop leadershop and professional human resources, corporate culture, as wll
as an efficient system as a central element in achieving sustainable high
performance.
4. Being a driver of change in improving the welfare and civilization for forest
villagers.
2.1.4 PT. Inhutani III
PT. Inhutani III is a transition of business from Perhutani Central Kalimantan to a Limited
Liability Company (Persero) based on Government Regulation no. 31 Year 1974.
PT.Inhutani III head office is located in Manggala Wanabhakti Building, Jalan Gatot
Subroto Jakarta.
2
Based on the Decree of the Board of Directors of PT.Inhutani II number 1359/SK/SEK-
PRUSH/2015 dated December 11, 2015
3
Based on the notes to The Financial Statements for the year ended December 31 2015
11
In accordance with the Government Regulation of the Republic of Indonesia concerning
the capital of the State General Company (Perum) of State Forestry derived from the
Transfer of all State-Owned shares of the Republic of Indonesia to PT.Inhutani III, the
value of the addition of state investment that moves as much as Rp324,000,000,000.
Furthermore, the total shares are distributed to the Cooperative Employees of PT.Inhutani
III (KOPKAR INTIGA) amounting to Rp10,000,000,000. So the composition of
PT.Inhutani III shareholding since 2015 is detailed as follows
TABLE 2.3 - The Composition of Shareholders of PT.Inhutani III in 2015

(Rp)
1 Perum Perhutani 324,110 99.9969% 324,110,000,000
Koperasi Karyawan
2 10 0.0031% 10,000,000
PT. Inhutani III
Total 183,083 100.00% 324,120.000,000
Mission
"Being a healthy, growing and self-sustaining forestry company in a certified
plantation and garden plantation business based on good governance
Vision
1. Become a certified plantation manager
2. Become a productive and efficient plantation manager and gardener with the
community
3. Developing competent and professional human resources
4. Apply GCG principles consistently across all company activities
5. Expand the network in developing the company's business
12
2.1.5 PT. Inhutani IV
PT. Inhutani IV was established on the basis of Government Regulation No. 22 of 1991
dated April 1, 1991 concerning State Equity Participation of the Republic of Indonesia
for Establishment of Limited Liability Company in North Sumatra with working area
covering the Provinces of Aceh, North Sumatra, Riau and West Sumatra.
Unlike the work area office, the representative office of PT.Inhutani IV in Jakarta is
located on Jl. Gatot Subroto Senayan, Central Jakarta.
Vision
Make PT.Inhutani IV as a company that produces forest products and services is
highly competitive.
Mission
PT.Inhutani IV conducts business in the field of forestry and optimizes the utilization
of the company's resources to produce high quality goods and services with strong
competitiveness, and pursue profit to increase the value of the company by applying
the principles of Limited Liability Company.
Based on the Government Regulation of the Republic of Indonesia Number 73 of 2014

dated 17 September 2014 on the addition of State Capital into State-Owned Enterprises
of State-Owned Enterprises, where all shares owned by PT.Inhutani IV (Persero) are
converted into additional participation in State Forestry Perum (Perum). The transfer of
the shares which then 100% into Perum Perhutani ownership is Rp92,253,000,000 in the
form of 92,253 shares. Furthermore, the ownership of 100% shares of shares is given at
0.01% or Rp10,000,000 to Cooperative Rimba Sejahtera4 based on notarial deed of 2015.
So the composition of PT.Inhutani IV share ownership in 2015 is as follows:
4
Based on Notes to the Financial Statements of PT.Inhutani IV 2015
13
TABLE 2.4 - The Composition of Shareholders of PT.Inhutani IV in 2015
Number of Issued and Fully

Description Ownership
Share Paid (Rp)
1 Perum Perhutani 92,243 99.99% 92,243,000,000
Koperasi Karyawan
2 10 0.01% 10,000,000
PT. Inhutani IV
Total 92,253 100.00% 92,253,000,000
2.1.6 PT. Inhutani V
PT Inhutani V (Persero) is established based on Peraturan Pemerintah Nomor 23 Tahun

1991 on 1 April 1991. Its head ofice is located ini Jakarta and its working area is South
Sumatera, which the provisions are Lampung, Sumatra Selatan, Bengkulu dan Jambi.
Vision
Being a company that manages high quality, productive, and valueble plantation so
the company can competate nationally and globally that organized by professional
human resource based on its cultures, which are sustainability, profitability, dan
prosperity.
Mission
1. Managing a high quality and productive sustainable plantations
2. Making sustainable profit with best outcome to the investor
3. Providing the best services to customers
4. Utilizing the forest optimally for community welfare
TABLE 2.5 - The Composition of Shareholders of PT.Inhutani V in 2015

(Rp)
1 Perum Perhutani 132,649 99.99% 132,649,000,000
Koperasi Karyawan PT.
2 10 0.01% 10,000,000
Inhutani V
Total 132,659 100.00% 132,659,000,000
14
2.1.7 Summary of Company Profile
Below is a summary of the company profile of PT. Inhutani I-V. In the table are listed
the working area, changes in the number of assets, structure ownership after acquisition,
and changes in capital structure.
15
TABLE 2.6 - Summary of Company Profile PT. Inhutani I-V
Assets (in rupiah) Structure Ownership

Company after Acquisition
No Status Working Area Before Acquisition After Acquisition
Name
Perum Koperasi
2013 2014 2015 2016
Perhutani Karyawan
1 Perum Perhutani Acquirer Java and Madura
East Kalimantan,
2 PT. Inhutani I Acquired South and East 70,217,300,533 68,452,146,912 86,706,194,302 82,447,236.,03 99.98% 0.02%
Sulawesi
3 PT. Inhutani II Acquired South Kalimantan 360,676,100,320 383,404,304,983 382,646,545,487 389,600,659,953 99.98% 0.02%
Central of
4 PT. Inhutani III Acquired 97,610,760,644 78,606,214,315 80,800,791,410 84,480,230,682 99.9969% 0.0031%
Kalimantan
5 PT. Inhutani IV Acquired Sumatera Utara 70,217,300,533 68,452,146,912 86,706,194,302 82,447,236,503 99.99% 0,01%
6 PT. Inhutani V Acquired Sumatera Selatan 168,992,143,176 285,443,647,247 265,760,036,692 254,821,438,435 99.99% 0.01%
16
TABLE 2.6 - Summary of Company Profile PT. Inhutani I-V (cont.)
Capital Structure (in rupiah)
Before Acquisition After Acquisition

Company
No
Name
2013 2014 2015 2016
Debt Equity Debt Equity Debt Equity Debt Equity
109,535,434,803 160,359,284,915 94,586,324,670 205,934,962,874 68,247,055,347 240,710,281,256 65,837,354,228 257,040,687,456

1 PT. Inhutani I
(41%) (59%) (31%) (69%) (22%) (78%) (20%) (80%)
111,091,546,264 103,734,176,041 150,636,291,825 111,111,716,281 188,416,098,078 117,371,472,876 252,421,262,263 121,589,264,047

2 PT. Inhutani II
(52%) (48%) (58%) (42%) (62%) (38%) (67%) (33%)
13,253,642,961 78,546,716,368 5,405,274,400 69,191,502,464 13,920,550,966 62,034,572,696 15,417,963,296 56,534,885,583

3 PT. Inhutani III
(14%) (86%) (7%) (93%) (18%) (82%) (21%) (79%)
58,740,762,711 59,596,964,145 61,351,275,734 61,758,146,662

3,186,157,490
4 PT. Inhutani IV (95%) (0%) (100%) (0%) (100%) (0%) (100%)
(5%)
138,047,211,055 38,913,232,991 6,211,790,927 151,180,507,596 8,102,201,162 134,070,877,913 105,983,212,650 141,555,695,998

6 PT. Inhutani V
(78%) (22%) (4%) (96%) (6%) (94%) (43%) (57%)
17
2.2 Acquisition Theories
Acquisition that can be called take over or buyout refers to a process of buying of one company
as a target by another firm (Dawkins, 2015). An acquisiton can be held in private or public
company depends on the status of the company is or isnt listed in public markets. In this takeover,
the acquirer has the initiative to buy a target company that can go through friendly takeover or
hostile takeover. Acquisition through friendly takeover occurs when the target company's
management agrees to acquire, but unlike hostile takeover which tends to lead to a forced takeover
due to the target company that refused to be acquired (Gumilarsih, 2016). This process is an
inorganic business development through merging and buying other companies that can increase
revenue, expand assets, and add expertise to business people (Gumilarsih, 2016).
2.2.1 Motives of Acquisition
Damodaran through his explanation of acquisition valuation stated that there are several steps to
determine acquisition valuation and the first one determine the motive for the acquisition
(Damodaran, 2012). It is important to determine the motive of the acquisition as a basis for
selecting the appropriate firm target for acquisition There are four main parts of that motives that
lead to doing acquisition:
1. Undervaluation: Acquisition with this motives is applied because the firms are
undervalued among financial market, then this firm will be targeted for acquisition by the
other firms who recognize this condition..
2. Diversification: In this motives, usually the firm have to do an acquisition because

they need to stabilize earnings and reduce risk. The target firm is in a business which
different from the acquiring firms business..
3. Synergy: This motive refers to add value from combining two firms, which can result
operating synergy or financial strategy. The form of operating synergy comes from higher
growth or lower costs. Then the financial synergy could be from tax saving, increased
debt capacity or cash slack. Poorly managed firms: Target firm have badly managed firm
18
signed with underperformed stock in the market. The prospective acquirer have to value
the target firm in the run optimally condition if they consider to acquire this firm.
Managers interest: The background of this motives usually because of the management
orientation that wants to create many takeovers. Target firms have a characteristic which has
CEOs ego and the need of power.
2.3 Holding Strategy
Holding is one type of business which considering the position of parent company as a director to
control or influence its subsidiaries (Echanis, 2009). In the other source, this strategy define as any
company, whether it is incorporate or not, which has a function to control or give influence to the
other management of one or more other companies in a full size or part of a system (Xuan, 2011).
Operating Holding
Operating holding refers to the condition where the parent company has business activity
similar to that of some or one of its subsidiaries (Standard & Poor, 2003). This type also
called managerial holding company, it defines that parent company also intervenes in
the subsidiaries transaction, besides earning from subsidiaries profit (Echanis, 2009).
Operating holding companies are often represented on the boards of their subsidiaries
and in some cases play an executive role. Furthermore, sometimes parent company have
a few core holding that takes for a large portion of their portfolios estimated value
(Standard & Poor, 2003). However, in this type of holding has a risk in terms of conflicts
of interest between the parent company and holding members5.
5 Based on the result of the meeting about legal aspect review of holding company on 9 October 2014 that held by
Staff of public policy specialists and inter-agency relations, Indonesia Ministry of SOEs
19
Investment Holding
In form of investment holding, the parent company has several subsidiaries firm but it
has no business activities in its subsidiaries (Inland Revenue Authority of Singapore,
2017). The effect of this situation is the cooperation between the parent company and the
subsidiary is more focusing on the purpose of holding development than increasing the
value of each company involved. Since investment holding companies are in the business
of buying and selling holdings, the structure and the risk profile of these companies could
change significantly over time (Standard & Poor, 2003).
2.4 Valuation Theories
Valuation is the process which connected between risk and returns to figure the worth of an asset
(Gitman, 2010). It is a relatively simple process that can be applied to calculate expected streams
of benefits from bonds, stocks, income properties, and so on.The objective of company valuation
is to give owners, potential buyers, or stakeholders an aproximate worth value of company.
Business or their assets are valued for a variety of reason, such as merger and acquisition, Initial
Public Offering (IPO), buy or sell agreements, expansion, and business planning.
2.4.1 Discounted Cash Flow (DCF) Method
Discounted cash flow valuation is a method for determining the current value of a company using
forecasted future cash flows over-determined period of time horizon, which adjusted for time
value. This method focuses on the expected future income based on its growth from business
activities and assumes that the company value depends on its ability to generate income in the
future, then the company value will be calculated by discounted its expected future cash flow to
the present time as a present value. (Damodaran, 2016). It's based on forwarding looking data and
requires many predictions for the future business condition of the company and the economy in
general (Steiger, 2008). A small change in determining assumptions will make large differences
in the companys value. The DCF method is a very impactful tool which not only used to value
the companies but also to price the Initial Public Offering (IPOs) and the other financial assets
20
(Luehrmann, 1998). So, this tools has been used for many aspects by professional, consultancies,
and managers for a wide range of task.
=

= +
(1 + )
=1
Based on the equation above, there are several steps that have to be taken before calculating the
firm value, which are forecast the future expected free cash flow (FCFF), determine the discount
rate for the firms projected cash flow using WACC (Weighted Average Cost of Capital) of the
firms, then identified Terminal Value (TV) to find the net present value of all future cash flow
that appear after the time period to covering the scenario analysis. All the inputs then will be
summed up together to find the firm value.
Free Cash Flow to Firm (FCFF)

The free cash flow is the amount of cash not used fot operations or reinvestment
(Brealey, et al., 2006). The firms free cash flow (FCF) represents the cash available to
investors-the providers of debt (creditors) and equity (owners)-after the firm has met all
operating needs and paid for net investments in fixed asset and paid for net investments
in fixed assets and current asset (Gitman, 2010). Free cash flow or cash flow from assets
is the total of cash flow to creditors and cash flow to stockholders, which involves three
components: Operating Cash Flow, Net Fixed Asset Investment (NFAI), and Net Current
Asset Investment (NCAI).
Operating Cash Flow (OCF) is the cash flow it generates from its normal operation. It
doesnt count the impact of interest on cash flow because OCF only measures the cash
flow generated by the firms operations, without those operations are financed and taxed.
It calculated by multiplied Earnings before Interest (EBIT) by the corporate tax rate and
add up with depreciation.
21
= ( (1 )) +
Net Fixes Asset Investment (NFAI) refers to the change in gross fixed assets from one
year to the next (Gitman, 2010). If the value of NFAI is negative because of an excess
amount of depreciation for the period, it means the firm sold more asset than buying and
it effects the increasing of cash flow value. The formula of NFAI is stated below:
= +
Net Current Asset Investment (NCAI) represents the net investment made by the firm in
its current (operating) assets (Gitman, 2010). This value is the difference between current
assets and current liabilities, and it also called working capital or current capital (Harvey,
2011). If the level of net current assets is not balanced or in a negative value, it can
increase the companys operating risk such as loss of liquidity (Michalski, 2008). For
example, the company may expect have a problem with repayment of its liabilities if the
level of net current assets is too low. So, it is important to manage the amount of current
asset into the balance of cash and other working capital assets, such as account receivable
and inventories. To find the value of NCAI is used this formula below:
= ( + )
To sum up, to find the value of free cash flow (FCF) it must deduct the Operating Cash
Flow (OCF) with Net Fixed Asset Investment (NFAI) and Net Current Investment
(Gitman, 2010).
22
Weighted Average Cost of Capital (WACC)
The Weighted Average Cost of Capital (WACC) define the expected average future cost
of capital over the long run, it is found by weighing the cost of each component type of
capital based on its proportion of the firm balance sheet structure (Gitman, 2010).
Then, the value of WACC will used for the discount rate of the expected future cash flow,
= ( ( (1 )) + ( )
Where,
WACC = Weighted Average Cost of Capital
Wd = Proportion of Debt
Rd = Cost of debt
T = Taxes
Ws = Proportion of equity
Rs = Cost of equity
Cost of Debt (rd)
The cost of debt (rd) is appearing because the loan made by the company (Steiger,
2008). The company has to pay in form of interest as the cost of the loans. The bank
charges provisions as a result when the company takes a loans, so the net proceeds is
equal to the nominal loan value less the provisions. If the company issuing bonds, the
net proceeds is equal to the floation cost as the effect of the price of the bonds. Cost of
debt is not only describe for default risk, but also for the interest rate in the market
(Institut of International Economic Policy, 2010). Then, the amount of debt provides a
tax shield because it has the interest which is tax deductible. So, it only need to find the
after-tax cost of debt by multipying the pretax cost with 1 minus the tax rate.
Cost of Equity (rs)
Cost of Equity (rs) appear when as the return a company require to chooce if an
investment meet capital return requirement (Byun, et al., 2008). Unlike debt, equity
does not need to be paid back, but it generally costs more than debt due to tax
advantages of interest payment. Even though the cost of equity is higher than debt,
equity generally provides a higher rate of return than debt. A higher cost of equity
23
making firm think to retain earnings for the purpose of capital expenditure (Roulet,
2013).
Capital Asset Pricing Model (CAPM)
This model describes the relationship between systematic risk and expected return for
assets. The general idea behind CAPM is that investors need to be compensated in two
ways: time value of money and risk (Merton, 1973). The time value of money
represented as the risk-free (rf) rate in the formula and compensate the investors for
placing money on any investment in the period of time. Then, the other half of the
CAPM formula represents risk and calculates the amount of compensation the investors
needs for taking on additional risk. This found by determine the risk measure (beta)
that compares the returns of the asset to the market over a period of time and to the
marekt premium (rm-rf): the return of the market in excess og the risk-free rate. Beta
reflects how risky an asset is compared to overall market risk and is a functio of the
volatiity of the asset and the market as well as the correation between two. The CAPM
model says that the expected return of security or a portfolio equals the rate on a risk-
free security plus a risk premium. If this expected return does not meet or exceed the
required return, then the investment should not be undertaken.
Proportion of Debt (wd)
Proportion of Debt (Wd) and Proportion of Equity (Ws) is reflect the commposition
between debt and equity of the company when arise the additional capital. The high
amount of debt reflecting the high leverage ratio and the risker of the firms takes to
financing their capital since (Beranek W & Howe,K.M, 1990). Otherwise, the high
amount of the equity sign the lower risk of their component of capital because it has
lower interest rates and it doesnt need the paid back if earnings decline.
Terminal Value
The terminal value is the net present value of all future cash flows that arise over the time
period that is covered by the scenario analysis (Steiger, 2008). It figures the present value
at a future point of a cash flow when assuming the growth rate expected to stable for
infinity time. One of the variables which used in this calculation is terminal growth rate.
24
This rate represents an assumed value that company will continue to grow or decline at
a steady rate. This perpetual growth rate should yield a constant result. The variable of
perpetual growth rate is one of the most important in DCF analysis process because if the
minor changes that occurred at this rate will have a major effect on terminal value and
firm value in total (Steiger, 2008). In common, the perpetuity growth rates occur between
the historical inflation rate of 2-3% and the historical GDP growth rate of 4-5%. So, if
the company expected terminal growth rate exceeds 5%, it basically assumed that the
companys expected growth will outpace the economys growth forever (Divestopedia,
2017). The Terminal Value (TV) can be express as formula below (Beranek W &
Howe,K.M, 1990), while WACC means discount rate and g means value of terminal
growth.
(1 + )
() =
( )
2.4.2 Enterprise Value Analysis
Enterprise value is an economic approach reflecting the market value of a company as a whole
business. The other understanding of this approach is about valuing the company to envision
purchasing an entire business at the present time. This alternative method can be thought of as the
theoretical fair price assuming the company will be bought, or another explanation is calculating
how much the buyers have to pay when taking over the company (Thorp, 2010). In the simplistic
view, this method is the sum of a companys market capitalization and its net debt (J.Lie, 2003).
Sometimes enterprise value is more accurate takeover valuation because it is also considering debt
in its calculation. Because when a firm is sold to the new owner, besides the buyer have to pay the
equity value, they have to repay the firms debt and also get the cash that the firm has. To value a
firm using things approach, the formula used is (Thorp, 2010):
= +
25
2.4.3 Difference-in-Difference Analysis
Difference-in-difference (DID) method which also called the controlled before-and-after study
has been popularly used as a tool in the syntetic control group and quantitative research (Columbia
University Mailman School of Public Health, 2013). It particularly popular to analyze an
experimental research design by estimating the differential effect of a treatment between treatment
group and control group. One of the lectures explains that this approach is worked by observing
for two group for two time period (NBER, 2007). In this research, the first group is exposed to a
treatment or event in the second period but not in the first period, while the second group is not
exposed to the treatment during either period. The key assumption for Difference-in-Difference
analysis is that the outcome in treatment or control group would be the same with the time of trend
of the absence of the treatment but probably with different meaning of result (Waldinger, 2010) .
Difference-in-Difference is common used to measure the effect of specific treatment, such as

passage of law, enactment of policy, or large-scale program implementation, by comparing the
change of outcome between group that is applied in a program (the intervention gorup) and group
that is not (the control group) (Columbia University Mailman School of Public Health, 2013).
This technique can also use to measure the effect of a significant change in the economic
environment or government policy. In terms of economic environment, this method is used to
understand the consequences of immigration of non-immigrant wages in Miami in 1980 (Michael,
1990). Response to previous research which used difference-in-difference method, it relevant in
analyzing the effect of acquisition strategy seen from the changing financial performance using
this method.
26
FIGURE 2.1 Difference-in-Difference Graph
Source: (Columbia University Mailman School of Public Health, 2013)
27
CHAPTER 3
METHODOLOGY
This chapter will focus on discussing general research design and data analysis that used in this
research. Flow diagram will be presented at the beginning of this chapter, followed by overall
steps of the methods, description of data collection and the construction data analysis.
This research methodology was illustrated in the chart below:

FIGURE 3.1 Research Methodology
Problem Identification
Literature Review
Research Hypothesis
Data Collection
Data Analysis
Calculate using Calculate using Enterprise

Discounted Cash Flow Value (EV) Method
(DCF) Method
Is Discounted Cash Flow (DCF) value

is bigger than Enterprise Value (EV)?
YES NO
Use Discounted Cash Flow (DCF) Use Enterprise Value (EV) Method
Method
Difference-in-Difference (DID) Analysis
Conclusion and Recommendation
28
3.1 Problem Identification
The identification problem is the first step to determine the actual problem based on the
background. In order to elaborate the problem identification clearly, it formulates the research
questions that will answer in this research. The statement explains the initial question that
underlies the existence of this study which also includes explaining the purpose of the study
3.2 Literature Review
This research used theories which used to support the author's understanding in terms of
acquisition topic and the other theory and information that can relate to these findings in this
research. The author selected the theoretical review source from the textbook (especially about
financial management and financial statement analysis), website resource of research paper and
journal, and the official website as an electronic source.
3.3 Research Hypothesis
Preparation of this research hypothesis is based on the formulation of the problem which then
emerged allegations of the results of research to be performed. The allegations that arise from this
research comes from the second problem statement about the significance of the role of the parent
company to the performance of a subsidiary. Here are the hypotheses that will be tested in this
research used in difference-in-difference analysis:
H0 : The existence of the parent company does not affect the financial performance of the
subsidiary following the acquisition
H1 : The existence of the parent company affects the financial performance of a subsidiary
following the acquisition
29
3.4 Data Collection
Data which used in this research is secondary data from PT. Inhutani I-V, which is the audited
balance sheet and income statement report from years of 2010-2016. Another secondary data
which is required for the cost of debt value is the stock price of the long-term loan in Indonesia
bank and tax rate based on PPH 25. Then, the author chooses PT. Astra Agro Lestari as the terminal
growth rate because of the accessible source of information needed and similarity industry with
PT. Inhutani. Other information used to improve the accuracy of the results of this study is data
obtained from interviews with director of the research firm as management representatives of each
subsidiary.
3.5 Data Analysis
This analysis will conduct with comparing the value with the assumption before acquisition and
after acquisition from each target firms and acquirer firm. The differences will signal the effect of
this acquisition strategy. After conducting the calculation of the company value and the differences
firm performance between before and after the acquisition. The next step is to examine the
significance of the parent role as a key role in this acquisition strategy in its role to change the
financial performance of a subsidiary.
3.5.1 Discounted Cash Flow (DCF) Analysis
This analysis is done by calculating the result of the discount rate with the expectation of free cash
flow which will be received 5 years ahead starting from the base year. Expected value was
previously obtained from the adjustment between free cash flow with the expected growth value.
The expected growth value is obtained from the average of 3 years before the base year assuming
the average value will be stable for the following years. The sequence of findings firm value using
DCF are:
30
A. Calculating Free Cash Flow (FCFF)
Free Cash Flow (FCFF) is found by calculating financial data from the income statement and
balance sheet from 2013-2016 to all subsidiaries (PT Inhutani I-V). In terms of the tax rate, in
this research decide to apply at the rate of 25% from Earning Before Tax (EBT). This is based
on article 29 concerning income tax for corporation, which states that corporate taxpayer
income tax rate is 25% of taxable income.
B. Estimate the Growth Rate
In this research, future cash flow is found by multiplying the results of free cash flow in a given
year (year-n) with the value of growth. While, the value of growth is found by the average
sales value from three years before year-n. The sales value represents the real output from
performance outcomes on that time. Then, the calculation of future free cash flow is adjusted
with the growth estimation with the assumption that the value of growth will stable in the
future. That assumption is needed because in this research, The factors that cause the change
in the value of the sales will be constant for the following years.
C. Define the WACC value
To calculate WACC, the data inputted is weighted of debt (wd) , weighted of equity (ws), cost
of debt (rd), cost of equity (rs), and tax (T).
Cost of Debt (rd)

In this research to determine Cost of Debt (rd), the data needed is information of long-
term loan interest of bank. This loan has a term of more than 10 years. The bank used
is commercial bank that is from "multiguna" loan program issued by Bank Negara
Indonesia (BNI). The selection of this bank is based on relatively low interest loan as
well as the category of BNI bank is the government-owned bank which is the most
widely used by PT.Inhutani itself. In addition the motive of the determination of this
bank is the ease of data access to be known by the public.
Cost of Equity (rs)
The next aspect is Cost of Equity (rs), in this study to determine the value of cost of
equity is using Capital Pricing Asset Model (CAPM).
31
= + ( )
Where:
Rf : Risk free rate
a : Beta of the security
rm : Expected market return
In its application, the value of risk-free rate comes from the data of Bank Indonesia (BI
rate). The value of a using Beta of plantation industry. While the value of rm using
assumption of return value of Composite Stock Price Index (IHSG) from year 2013-
2016 range.
Proportion of Debt (Wd) & Proportion of Equity (We)
Calculation to find Proportion of Debt (Wd) dan Proportion of Equity (We) is based on
Balance Sheet of PT. Inhutani I V period 2013 2016.
Value of Wd is resulted from deviding of Equity (We) based on long term loan of total
equity value plus total long term loan. Whereas, Propotion of Equity (We) resulted from
total equity divided total debt that has been added with total debt before.
Calculation of Wd and We is the contrary, therefore the sum of Wd and We is 1 (one).

() =
+

() =
+
After knowing the result of all input value, the next step is calculating WACC on all subsadiary
company on 2013 sd 2016.
32
D. Calculating Terminal Value
Terminal Value is calculated by dividing estimated future cash flow in the last year with
WACC that has been reduced by terminal growth. In this case, terminal growth is an
assumption when in the last year the company will experience an increase that has passed its
peak production period. The calculation is done by looking for an average of stock price
changes for three years. So to find growth rate for terminal value, the author chose to calculate
the growth of stock price listed company that is PT. Astra Agro Lestari. Stock price data taken
from annual PT.Astra Agro Lestari (AAL) in 2010-2016. In addition to the annual data of
companies that are accessible, the reason for choosing this company is because of the type of
industrial company in the plantation sector which tends to be similar to PT.Inhutani I-V which
is engaged in the forestry sector.
3.5.2 Enterprise Value Analysis
The data required in this analysis is the total equity, long-term debt, cash or cash equivalent.
Calculations are made to all subsidiaries for four years between 2013-2016. The result of the
enterprise value analysis will be input to the Difference-in-Difference Analysis if the result of the
discounted cash flow value is negative. This is done to avoid the imbalance between the entire
company data due to the assumption applied in the DCF method is not suitable to produce unfair
results.
The analysis data that will be input into SPSS statistical analysis program is the result of calculation
of value of previous method, that is combination of Discounted Cash Flow (DCF) and Enterprise
Value (EV) method. The result of these two methods is a description of each of the company's
values that occurred during and before the acquisition. However, the data that will be incorporated
into SPSS is based on the greater value level generated from both methods. This value will generate
20 data from 5 subsidiaries for 4 years (2013-2016).
33
3.5.3. Difference-in-Difference Analysis
The next stage is to know the significance of the role of the parent company to change the financial
performance of subsidiaries after the acquisition by comparing the condition of actual and expected
financial performance of the subsidiary firm. This analysis uses SPSS statistical analysis software
by inputting data from calculation result of discounted cash flow analysis and enterprise value
analysis method.
The data comes from a total of 20 data values consisting of 5 subsidiaries for 4 years. In addition
to seeing the significance, this analysis aims to determine whether the parent company has a good
or bad impact on the subsidiary. The phases of this method are as follows:
Set assumptions
There are two assumptions used to basic in analysis. The fisrt assumption is parent
company gives an influence performance to subsidiary company. The influence can give
good side effect or bad side effect to subsidiary company. The second assumption if the
SPSS program can not give a significant result, it means parent company (Perum Perhutani)
does not give an influence financial performance to subsidiary company, means that the
goal of aquisation has not been achieved.
Determine time period of event
The time period in this study is divided into two parts separated by the aquisition event.
Aqusition event occurs at the end of 2014. So in the period 2013-2014 called 'pre-
acquisition' and in the period 2015-2016 called 'post-acquisition'. So the objective to be
seen is the change that occurs during the 'post-acquisition' where the assumption that
growth will be stable during pre-acquisition without any acquisition. Then comparing the
conditions in the period 2015-2016 with the condition where the acquisition event has been
done.
34
Comparing difference by Difference-in-Difference Method
Difference in Difference estimation used regression model as follow:
= 0 + 1 + 2 + 3 ( ) +
Y is firm-n value in year-n. T is the dummy variable for time period, this figure is
determined from each 2013-2014 range range (0 for before 2013, 1 for between 2013 and
2014, 0 for between 2014 and 2015, and 1 for after 2016). T is a dummy variable for the
treatment that describes the condition of the year before and after the acquisition (0 for
before acquisition and 1 for after acquisition). While S T is a dummy variable derived
from the multiplication of S and T.
3.6. Conclusion and Recommendation
Conclusions and recommendations can be made after all the previously described steps have been
completed. This conclusion will certainly answer the question stated on the problem statement
which is expected to capturing the real condition of the acquisition activity that has the objective
to increase the productivity of the firm. From that result will be the theater for the event, as well
as the government as the holding organizer.
35
CHAPTER 4
DATA ANALYSIS
Data analysis begins by finding firm value values using Discounted Cash Flow using data and also
assumptions that have been described in chapter 3. Then the next step is to find company value
using another method of Enterprise Value (EV) Analysis. From the two data sourced from different
methods are then selected to be used as input data in Difference-in-Difference Analysis. In this
sub-chapter will discuss the result of each stage in the form of a summary of values for the valuing
of all subsidiaries.
4.1 Discounted Cash Flow Analysis
It started with finding the free cash flow during 2013-2016 and calculating Weighted Average Cost
of Capital (WACC) to find the firm value using Discounted Cash Flow Analysis. Each step of
calculation will be explained below:
4.1.1 Free Cash Flow to Firm (FCFF)

TABLE 4.1 Free Cash Flow to Firm Result
FCFF Year-n
2013 2014 2015 2016
Inhutani
I 597,130,062 38,049,435,546 47,645,455,537 24,894,832,857
Inhutani
II 2,524,341,595 (18,301,028,938) (711,057,278) (21,089,131,645)
Inhutani
III (1,759,708,977) (1,883,033,573) (2,949,311,867) (6,424,502,388)
Inhutani
IV (2,952,183,426) (2,240,653,961) 832,789,913 (13,163,852,580)
Inhutani
V (14,423,599,079) (157,110,091,051) 34,537,102,504 98,783,375,383
36
The results of the values listed in the table shows that there are some companies that still have
deficits after the acquisition strategy at the end of 2014. For example, the value of FCFF PT.
Inhutani III remains deficit in 2015 and 2016. In the calculation, the decline in FCFF value results
in that year occurred due to the decreasing value of Operating Cash Flow (OCF) and the increase
value of Net Current Asset Investment (NCAI). As an evidence, the decline in Earning Before
Interest (EBIT) from -Rp1,410,471,644 to -Rp3,757,654,004 in 2016 which subsequently affected
the decline in the value of NOPAT and OCF. In addition, declining the value of NFAI by 2015
was caused by the increasing sales of fixed assets compared with the previous year. Related to
Damodaran (2012) which stated that declining the value of NFAI can make an inflow of net cash
FCFF at the current year, so the FCFF value in that year should increase. However, the decline in
NFAI is not followed by a decline in the value of NCAI so that the total value of FCFF in 2015
and 2016 is still deficit. Proven NCAI value in 2014 -Rp7,399,658,009 then increased to
Rp1,191,302,677. FCFF calculations of PT.Inhutani III can be seen in Appendix B.
Deficit condition after acquisition also happened at PT. Inhutani II at the year of 2015-2016
amounted to -Rp711,057,278 in 2015 and then decreased to -Rp21,089,131,645 in 2016.
According to the calculations, the decline was caused by an increase in Net Current Asset
Investment (NCAI) and Net Current Fixed Assets (NFAI).
Then, for the value of Free Cash Flow to Firm (FCFF) from PT.Inhutani V tends to increase in the
period 2015-2016. This is due to the decline in the value of NCAI and NFAI in the year although
in the same year the value of OCF tends to decrease. However, by 2014 the value of FCFF has
dropped dramatically from -Rp14,423,599 to -Rp157,110,091. This decrease is due to the drastic
increase in the value of NCAI. FCFF calculations can be seen in Appendix B.
Overall, it can be seen that changes in the value of free cash flow for the five companies over the
past four years tend to be fluctuative. After the acquisition is done in late 2014, almost all
companies experience an increase in the amount of free cash flow that is owned by the year 2015.
Only at PT. Inhutani III which experienced a deficit increase in 2015. But the increase in the
amount of free cash flow is not maintained by almost all companies. Proven only at PT. Inhutani
V that the amount of free cash flow continues to increase after the implementation of acquisition
strategy.
37
4.1.2 Growth Rate
The growth calculation is used to determine the estimated future cash flow value based on the
assumption that the growth increase will be stable for the coming years. From the calculation of
growth each year then calculated the average that will generate output sales growth to be estimated
growth in the search for free cash flow five years after year-n. Then the stages are applied to all
companies PT.Inhutani I-V. The calculation of growth rate for each year during 2013-2016 can be
seen in Appendix C. In summary result of each data from each subsidiary will get result of data as
follows::
TABLE 4.2 Growth Rate Calculation Result
Growth Year n
2013 2014 2015 2016
Inhutani I -5.32% 16% 23% 11%
Inhutani II 12% -0.07% 6.02% -11.52%
Inhutani
47.63% 13.02% 33.56% -26.78%
III
Inhutani
24.31% 17% -3.63% 181%
IV
Inhutani V 1387% 1374% 128% 127.67%
Based on the table shows that the overall value of growth rate tend to be unstable in the period
2013-2016. This condition occurs in almost all five companies except in PT.Inhutani I which
increases constantly. Many factors behind the existence of unstable changes in the growth. One of
the factors that led to changes in the amount of sales is the company's activities such as licensing,
unsuccessful tenders, and disruptions in sales distribution. Moreover, business of PT.Inhutani
operates in sectors that depend on natural or climatic conditions.
PT.Inhutani III is one of the companies experiencing unstable growth rate. This can be seen from
the average sales value change for the year 2014 has decreased up to 34.61%. However, after the
year has increased in 2015 to have a growth value of 33.56% from the previous value of 13.02%.
38
But this increase does not continue for the next year in 2016 with a drastic decline to reach a
negative value.
In other cases in PT.Inhutani IV there is a decrease in the value of growth in three consecutive
years in 2013 to 2015. The worst condition occurred in 2015 had reached sales growth value -
3.63%. However, the unstable condition is indicated by the sharp increase in the year 2016 to reach
the surge value of more than 100% so that the value to be 181%. This surge was caused by the sale
of non-timber extractive forest products in the form of rostin ester, gondorukem, and terpetin types
that did not occur in the previous year6.
In the sales growth PT.Inhutani V also showed a drastic decline in 2015. This decline value starts
from 1374% and then decreased to 128%. Then in the year 2016 still decrease up to number
127.6%.
The condition of the growth rate between firms tends to vary. This shows that each company has
different conditions in terms of maintaining the rate of growth. Meanwhile, changes in the value
of growth rates that are not constant in almost all of these subsidiaries give the sense that most of
these companies have not been able to maintain the growth rate for the long term projection.
Table 4.3 - Terminal Growh Value
Terminal Growth
2013 2014 2015 2016
0.34% 4.94% 5.08% -10.73%
As for the growth rate shown in Table 4.3 are applied to calculate the value of terminal value. In
the value results it is seen that table there is an increase in growth in the range 20113-2015. But
6
Based on the financial report of PT.Inhutani IV in 2016
39
the value is then decrease drastically until reach a negative value in 2016 at a value of -10.73%.
Calculation to get the result of that summary value can be seen in appendix G.
4.1.3 Cost of Debt (rd) and Cost of Equity (rs)
Can be seen in the table below is the Cost of Debt which is to decrease in the period 2013-2016.
The selected bank is Bank Negara Indonesia (BNI) named Multiguna loans, the infomation
provided below:
TABLE 4.4 Cost of Debt Value
Variable 2013 2014 2015 2016
Cost of Debt (rd) 10% 10% 9% 8.9%
As explained in chapter 3 that the value of Cost of Equity (Ws) in this research is obtained through
Capital Asset Pricing Model (CAPM) analysis. After making calculation to the five companies in
the period 2013-2016, the results obtained are listed in the table below.
TABLE 4.5 Cost of Equity (rs) Value
Variable 2013 2014 2015 2016
Cost of Equity (rs) 12.93% 12.95% 12.95% 12.94%
It can be seen in the table that the change of Cost of Equity (rs) in the year 2013-2016 did not
change drastically. This is due to Risk Free (rf) data in the range of 2013-2016. In addition, in
finding the value of Risk Market (rm) derived from the average return of IHSG from 2013-2016
range is considered stable to find the value of Ws.
40
Basically, the return value of IHSG as one input of rs is very volatile. There is even a period of
year where the annual return of the market is negative. So that resulted in the calculation of rs with
CAPM calculation method from year to year to be also fluctuations. This is certainly not in line
with the theory. Therefore, in this study apply the average value of market risk result during the
period analyzed. So the Risk Market value (rm) time to time is at that level which has been included
in Table 4.5 which stated the value rs. In addition, Risk Free (rf) is also stable, which is in the
maximum range of 7.5% in 2014 and a minimum of 5.8% in 2014. The rm value is listed in
Appendix E. So the result of rs calculation using CAPM shows will not change from time to time.
4.14 Debt Proportion (Wd) and Equity Proportion (Ws)
To find the value of both of debt proportion (Wd) and equity proportion (Ws), we have to calculate
the data from balance sheet of each year between period time 2013-2016. The formula of debt
proportion is long term loans divided by sum of long-term loans divided by sum of long-term debt
and equities. While the formula of equity proportion is total equities divided by sum of long-term
debt and equities.
TABLE 4.6 Proportion of Debt (Wd)
Proportion of Debt (Wd) Year-n
2013 2014 2015 2016
Inhutani I 40.58% 31.47% 22.09% 20.39%
Inhutani II 49.18% 56.44% 61.62% 67.49%
Inhutani
III 14.44% 7.25% 18.33% 21.43%
Inhutani
IV 5.15% 0.00% 0.00% 0.00%
Inhutani V 78.01% 3.95% 5.70% 42.81%
41
TABLE 4.7 Proportion of Equity (Ws)
Proportion of Equity (Ws) Year-n
2013 2014 2015 2016
Inhutani I 59.42% 68.53% 77.91% 79.61%
Inhutani II 50.82% 43.56% 38.38% 32.51%
Inhutani
III 85.56% 92.75% 81.67% 78.57%
Inhutani
IV 94.85% 100.00% 100.00% 100.00%
Inhutani V 21.99% 96.05% 94.30% 57.19%
From that table we can see that there are some periods of 2014-2016 in PT.Inhutani IV which has
proportion of equity (Ws) up to 100%, this indicates that the source of their financing their capital
is only allocated entirely on the amount of equity. The high allocation of equity in total capital
source is also seen in PT.Inhutani III and PT. Inhutani V especially in the range of 2014-2016.
But overall, there is information that can be seen that the five companies have a proportion of debt
and equity that tend to vary. This indicates that each company has a different level of risk in terms
of the way they finance the source of capital. This relates to Partners (2011), which states that
companies with high Wd tend to be riskier to financing their capital, and that is difference with
those who have
42
4.1.5 Calculating Discount Rate (WACC)
TABLE 4.8 Weighted Average Cost of Capital (WACC) Value
WACC Year-n
2013 2014 2015 2016
Inhutani I 10,65% 11.23% 11,56% 11,66%
Inhutani II 10,02% 9,81% 9,08% 8,71%
Inhutani III 12,12% 16,33% 14,42% 13,76%
Inhutani IV 12,64% 12,95% 12,95% 12,94%
Inhutani V 8,55% 12,73% 12,59% 10,26%
By entering the cost of equity, cost of debt, and the weight of each company from year to year we
get the Weighted Average Cost of Capital (WACC) as shown in table 4.8.
4.1.6 Corporate Value using Discounted Cash Flow (DCF) Method
The summary of the Discounted Cash Flow (DCF) calculation can be seen in table 4.9 Based on
the data resulted from discounted cash flow calculation, it gives new information that the value of
each subsidiary firm is very fluctuate in the period of 2013-2016. From the table also shows that
the condition of increasing the value of companies tend to vary each period of the year.
There is even a lot of data showing that DCF results are negative. This indicates that the company
does not have the ability to maintain its financial condition in the future. One of the factors causing
negative values on the DCF results of this analysis is the free cash flow to firm. This negative
value is the effect of the changing between the Operating Cash Flow (OCF), Net Current Asset
(NCAI), or Net Fixed Assets Investment (NFAI).
43
In the aspect of condition after acquisition, the table shows that almost all of the company's values
have increased in the year after the acquisition. Proven that only at PT. Inhutani III which
decreased at DCF value. Unfortunately, the increase has not been maintained by some companies.
Proven only at PT. Inhutani I and PT. Inhutani III which experienced an increase in firm value in
2016. Apart from the companies that have been mention before has decreased significantly, even
some of them have reached negative values. The calculation of the value of Discounted Cash Flow
in each company is listed in Appendix H.
44
TABLE 4.9 Corporate Value using Discounted Cash Flow Model
DCF 2013 2014 2015 2016

461,092,147,194 746,315,973,257 194,202,236,930,501
Inhutani I
3,111,089,543
64,784,603,371 -443,398,348,747 -29,151,204,938 -111,331,855,223.88
Inhutani II
-176,342,636,694 -43,072,143,557 -204,519,320,889 -14,366,530,356
Inhutani III
-111,246,592,418 -82,805,607,974 11,139,934,411 -29,581,740,249,589
Inhutani IV
-1,909,555,024,197,850,000 -20,707,112,965,138,600,000 66,341,018,589,462 6,354,982,307,573
Inhutani V
45
4.2 Enterprise Value Analysis
TABLE 4.10 Enterprise Value
EV 2013 2014 2015 2016
Inhutani I 160,608,768,807 194,158,613,324 228,499,191,227 249,167,678,823
Inhutani II 199,282,323,235 236,158,260,177 277,765,795,668 330,972,940,530
Inhutani
III 76,854,289,795 69,432,003,678 68,065,791,788 65,665,443,530
Inhutani
IV 45,065,984,772 50,949,835,521 57,452,125,910 40,623,276,352
Inhutani V 25,888,210,780 136,506,819,987 182,729,219,657 109,702,693,892
In the above calculation results can be seen that there are some companies have value of Enterprise
Value (EV) is increased for the fourth year. This is indicated by the value of EV at PT.Inhutani I
and PT Inhutani II which increased from 2013 to 2016. The condition is also shown PT. Inhutani
V but only for a few years. The lowest average EV figures are owned by PT. Inhutani IV, and the
highest is owned by PT Inhutani II. In the absence of a negative value owned by the value of each
company, it reflects that each company still has good market value at the current time.
If we look at the effects of the acquisition strategy by Perum perhutani implemented at the end of
2014, all companies show an increase in value of Enterprise Value (EV) in 2015 or one year after
the acquisition. However, the increase is not maintained by almost all PT. Inhutani in the period
after 2016. Only PT. Inhutani 1 and PT. Inhutani II that can sustain the increase in value. The
conditions described above show that in terms of valuation using enterprise value analysis from
2013-2016 period, the acquisition strategy has a positive effect but only one year after the
implementation but the condition does not continue in 2016. The calculation of enterprise value
value of each company can be seen in Appendix I.
46
4.3 Choosing method between Discounted Cash Flow and Enterprise Value Analysis
After doing the calculation through Discounted Cash Flow Model and Enterprise Value Analysis
to all subsidiaries, then result resulted there are two kinds of data. Furthermore, to test the data to
obtain a research objective on the significance of the parent role of the firm against the subsidiary
firm, the test is done through Difference-in-Difference (DID) analysis. Then the next step is to
select each data from both data methods to find input for DID analysis
The selection of data is based on the amount of nominal value generated from the two calculation
methods generated. The selected data is the higher nominal amount of the two results of the
method. The higher nominal will be taken with the assumption that the firm should have the
maximum firm value in that year.
After data collection, then the selection of data taken for the data Difference-in-Difference analysis
is the value marked yellow color seen in the table 4.11.
47
TABLE 4.11 Choosing Method DCF and EV
Inhutani I Inhutani II Inhutani III Inhutani IV Inhutani V

64,784,603,371 -176,342,636,694 -111,246,592,418 -1,909,555,024,197,850,000
3,111,089,543
2013 DCF
160,608,768,807 199,282,323,235 76,854,289,795 45,065,984,772 25,888,210,780
EV
461,092,147,194 -443,398,348,747 -43,072,143,557 -82,805,607,974 -20,707,112,965,138,600,000
2014 DCF
194,158,613,324 236,158,260,177 69,432,003,678 50,949,835,521 136,506,819,987
EV
746,315,973,257 -29,151,204,938 -204,519,320,889 11,139,934,411 66,341,018,589,462
2015 DCF
228,499,191,227 277,765,795,668 68,065,791,788 57,452,125,910 182,729,219,657
EV
194,202,236,930,501 -111,331,855,224 -14,366,530,356 -29,581,740,249,589 6,354,982,307,573
2016 DCF
249,167,678,823 330,972,940,530 65,665,443,530 40,623,276,352 109,702,693,892
EV
48
4.4 Difference-in-Difference Analysis
As described in chapter 2, the difference-in-difference can be analyzed by estimating the

differential effect of a treatment. It particularly popular to analyze an experimental research
design by estimating the differential effect of a treatment between treatment group and control
group (NBER, 2007). After selecting the selected data between the two methods of Discounted
Cash Flow Methods and Enterprise Value Analysis, then the input is then processed into SPSS
analytical program to find the significant value between the relationship of firm value variables
and acquisition strategy itself.
TABLE 4.12 Difference in Difference Coefficient Outcome
Standardized
Unstandardized Coefficient
Model Cofficient t Sig.
B Std.Error Beta
(Constant) 1,115E+11 1,169E+12 0.007 0.995
S 8,660E+10 2,560E+12 0.001 0.003 0.997
T 1,191E+12 2,289E+12 0.014 0.052 0.959
S.T 6,378E+13 3,620E+13 0.581 1.762 0.297
The result of input data process to SPSS shows that the relationship between variables S with
variable T is significant at the value of 0.297. Since the p-value is less than 0.10, it leads to a
new comprehension about that data is not significant. Related to that condition, this findings
show that in fact case Perum Perhutani has not fully affected the firm value of subsidiaries in
the holding forestry SOEs. Thus, it is found that if assumed the growth rate from before the
acquisition is stable, then if there is a decrease or increase in growth rate of firm value later it
means not derived from the role or intervention of the parent company. The calculation of input
data in SPSS can be seen in Appendix J.
49
CHAPTER 5
CONCLUSIONS AND RECOMMENDATIONS
5.1 Conclusion
The Government of Indonesia through the Ministry of Stated Owned Enterprises (SOEs) has
taken the acquisition policy as a corporate strategy for the restructuring of state enterprises. At
the end of 2014 based on Government Regulation Number 73 year of 2014, Perum Perhutani
acquires government shares at PT. Inhutani I, PT. Inhutani II, PT. Inhutani III, PT. Inhutani IV,
and PT. Inhutani V (PT. Inhutani I-V) thus becoming a subsidiaries firm. Acquisition of PT.
Inhutani I-V is intended to increase the value of the company in both subsidiaries and the parent
company as indicated by the increase of sales, profits, assets and cash flow as well as the
synergy between the parent and subsidiary companies. In this study only analyzed the firm
changing value of all the subsidiaries of Perum Perhutani (PT Inhutani I-V). This study
examines the impact of the acquisition on the performance of subsidiaries through an analysis
of the company's condition before (2013-2014) and after (2015-2016) aquisition
implementation. Then, it conducts an asesment of significant or non-parental treatment of
children in terms of performance improvement.
Discounted cash flow analysis method is used to obtain the value of the company based on free
cash flow exposure in the next 5 (five) years while enterprise value analysis using equity, long-
term debt and cash value, is used to obtain the current value of the company. Then, the
hypothesis used is the existence of the parent affects the financial performance of a subsidiary
after acquisition which used in difference-in-difference analysis.
From the calculation through two methods of Discounted Cash Flow (DCF) and Enterprise
Value (EV), there are also two results that can be interpreted with different results. Based on
discounted cash flow method, the firm values that generated are very fluctuate in period of
2013-2016. If analyzed from the period after completion of the acquisition (2015-2016), there
are only a few companies that have increased the value of the company by using the DCF
method. Only PT. Inhutani I and PT. Inhutani V which has increased the value of the company.
But apart from that there are even some firm values that touch negative values. The main thing
that causes this negative value is the poor Free Cash Flow to Firm (FCFF) value. Then the
result of enterprise value (EV) shows that firm value results tend to be stable and some values
show an increase after the acquisition.
50
From difference-in-difference analysis shows that theres no significant effect of acquisition
strategy that received by the subsidiary firm. Therefore it indicates that if there is an increase
or decrease in firm value experienced by a subsidiary, it means not the effect of the acquisition
strategy itself. This statement is also in line with information obtained from the interview with
one of the speakers who are also as corporate secretary of PT. Inhutani III.
5.2 Recommendation
Acquisition with the taking of shares of PT. Inhutani I, PT Inhutani II, PT Inhutani III, PT
Inhutani IV and PT Inhutani V by Perum Perhutani as the form of forestry Stated Owned
Enterprises (SOE) holding strategy intends to increase the subsidiaries company's value and
gain efficiency and competitiveness to private companies.
Some of the things that have potential causes of unsuccessful strategy of acquisition in state-
owned forestry companies are that there is no synergy between the parent company and its
subsidiaries. Company synergy can be form of operational and capital cooperation. Perum
Perhutani with PT. Inhutani I-V has similar business activities that are engaged in timber and
land-based resources. The most likely recommendation that can be applied is establish the
activity both of operational cooperation in the upstream industry in the form of forest plantation
and downstream industries in the form of processing, distribution of results and marketing.
While the solution for the capital cooperation aspect that can be applied is a loan scheme with
lower interest rates than commercial banks for trading and investment. Another important thing
is to construct the business activities regulation which obeyed to both of subsidiaries and parent
company in order to avoid unexpected seizures of the area of business and product similarity
among them. Besides that, internal restructuring of each company is better applied before the
acquisition is implemented to this holding companies. This is important to avoid the loss of a
company that will burden the company as the parent company Perum Perhutani.
The government, especially the Ministry of SOEs should carefully evaluate various aspects of
the acquisition that has been implemented, although still at an early stage, and then become a
consideration in conducting the acquisition of other state-owned companies.
51
52
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56
APPENDICES
57
APPENDIX A
BALANCE SHEET AND INCOME STATEMENT
58
PT. INHUTANI I
STATEMENTS OF FINANCIAL POSITION (BALANCE SHEETS)
2011-2016 (in rupiah)
2011 2012 2013 2014 2015 2016

CURRENT ASSETS
Cash and Bank 30,933,985,176 109,462,703,309 109,285,950,911 106,362,674,220 80,458,145,376 73,710,362,861
Account Receivables 17,103,603,741 38,397,561,646 39,637,802,297 32,525,245,673 22,483,817,987 24,721,879,107
Employee Loans 68,605,450 51,649,504 41,979,004 221,202,827 91,905,265 83,632,201
Current Financial Assets 13,863,344,116 5,155,500,076 8,657,011,451 8,454,784,278 11,113,353,202 7,477,003,550
Inventories 20,508,238,433 20,282,958,626 28,042,929,900 30,901,791,225 37,746,800,282 25,067,420,970
Prepaid Expenses 780,467,215 500,599,358 154,145,324 2,184,733,575 837,001,367 730,618,434
Other Current Assets 219,338,041 268,795,728 472,371,510 543,631,814 114,910,926 2,259,055,022
Total Current Assets 83,477,582,172 174,119,768,247 186,292,190,397 181,194,063,612 152,845,934,405 134,049,972,145
Non Current Assets

Investment in Associate 27,840,124,412 13,006,721,427 11,228,591,310 13,462,082,359 13,762,082,359 12,235,530,687
Industrial Timber
73,811,997,904 70,553,491,242 81,282,879,430 95,760,481,302 118,315,819,494 139,115,162,428
Plantation - Immature
Fix Assets 22,107,842,647 31,451,100,389 41,863,161,142 55,064,311,569 66,786,696,718 72,338,001,925
Deffered Tax - - 1,207,143,250 - - -
Deffered Expenses 31,359,300,360 29,879,610,716 31,651,319,700 30,960,493,032 24,750,260,598 18,537,502,144

Other Non Current
4,061,386,972 6,947,182,027 7,150,815,091 6,962,873,109 6,185,751,913 13,324,490,624
Assets
Total Non Current
159,180,652,295 151,838,105,801 174,383,909,923 202,210,241,371 229,800,611,082 255,550,687,808
Assets
Total Assets 242,658,234,467 325,957,874,048 360,676,100,320 383,404,304,983 382,646,545,487 389,600,659,953
Short Term Liabilites

Trade Expenses 11,370,454,349 2,374,302,029 7,191,252,607 5,164,637,518 7,399,581,384 665,749,749
Down Payment 910,545,919 434,948,181 0 0 0 0
Accrued Expenses 2,439,418,091 4,820,924,091 3,737,220,336 2,182,637,934
Tax Payable 43,603,934,873 38,530,963,997 51,348,246,916 50,955,861,839 32,094,516,197 30,915,814,236

Debt Fund Refrestation
1,210,115,889 291,398 8,599,298 0 8,924,130
and Forest Resource
Payable Expenses 524,851,042 806,844,909 1,334,983,584 1,760,928,366 2,109,989,112
Other Short Term
22,777,790,342 21,493,515,316 23,893,536,724 17,449,991,146 20,477,254,066 25,094,024,817
Liabilities
Unearned Income 0 0 1,229,393,666 618,334,615 5,040,621,555 3,935,008,699
Short Term Post
Employment Benefits 0 0 476,676,468 467,172,481 448,558,454 341,670,091
Liabilities
Current Portion on Long
Term Liabilities 0 0 1,652,129,998 1,645,167,382 2,372,543,651 3,587,712,743
Total Current
Liabilities 80,397,692,414 63,640,865,830 89,574,237,352 82,883,017,438 73,689,208,885 66,722,618,269
59
0 0
Debt Non Enterprises 13,323,271,447 10,421,515,350 7,537,165,700 4,944,905,000
0
ADB Loans 743,306,113 739,897,466 457,502,318 258,815,477 86,271,826
Debt Reforestation 52,844,126,094 47,980,667,094 46,604,983,524 44,530,667,094 43,030,667,094 40,315,498,001

0 0 0
Debt Penalty of Dividend 3,512,468,076 2,512,468,076 1,812,468,076
Employment Benefit
Liabilities 24,498,078,000 26,836,317,000 38,843,616,000 24,396,430,000 14,907,939,000 14,573,875,000
Other Long Term
0
Liabilities 19,969,255,579 16,233,647,679 4,595,199,000 5,099,377,000 4,104,336,325
0
Government Assisstance 6,168,364,832 6,168,364,832 6,168,364,832 6,168,364,832
Total Long Term
Liabilities 104,223,130,618 97,958,894,071 109,535,434,803 94,586,324,670 68,247,055,347 65,837,354,228
TOTAL LIABILITIES 184,620,823,032 161,599,759,901 199,109,672,155 177,469,342,108 141,936,264,232 132,559,972,497
EQUITY
Share Capital
Authorized capital
The share capital has not
0 0 0
been placed and paid up 600,000,000,000 600,000,000,000
Issued and fully paid
share capital 149,667,000,000 149,667,000,000 450,333,000,000 450,333,000,000 450,333,000,000 450,333,000,000
-
450,333,000,000 450,333,000,000 450,333,000,000 450,333,000,000 450,333,000,000 450,333,000,000
16,001,173,256 16,001,173,256 16,001,173,256 16,001,173,256 16,001,173,256 16,001,173,256

State Capital Investment
14,804,859,316 14,804,859,316 14,804,859,316 14,804,859,316 14,804,859,316 14,804,859,316
General Reserves
-432,760,315,948 -423,101,621,137 -334,565,343,157 -276,718,222,948 -242,196,127,615 -236,411,353,866
Retained earnings last
year
9,658,694,810 106,320,702,713 21,616,199,503 32,176,895,964 33,007,942,083 22,490,977,532
Income for The Year
-423,101,621,138 -316,780,918,424 -312,949,143,654 -244,541,326,984 -209,188,185,532 -213,920,376,334
Accumulated retained
earnings
0 0 13,785,595,500 1,514,153,250 1,767,376,299 12,313,008,750
Other Equity
Components
Total Equtiy 58,037,411,434 164,358,114,148 160,359,284,915 205,934,962,874 240,710,281,256 257,040,687,456

TOTAL LIABILITIES
AND EQUITY 242,658,234,466 325,957,874,049 359,468,957,070 383,404,304,982 382,646,545,488 389,600,659,953
60
PT. INHUTANI I
INCOME STATEMENT
2011-2016 (in rupiah)
2011 2012 2013 2014 2015 2016
Revenue 172,957,831,571 138,877,448,855 174,945,036,036 249,484,480,473 252,700,285,954 226,016,258,902

Cost of Good Sold 124,502,102,472 79,878,287,219 110,079,768,644 146,602,215,906 158,566,273,908 143,630,057,226
Gros Profit (Losses) 48,455,729,099 58,999,161,636 64,865,267,392 102,882,264,567 94,134,012,046 82,386,201,676
Operating Expenses
Distribution/Marketing Expenses 2,043,158,581 1,228,739,196 1,434,700,500 1,792,418,795 2,121,917,485 1,603,976,571
Administrative and General Expenses 46,080,174,600 52,382,368,908 54,311,903,623 60,544,334,817 64,709,080,378 56,630,079,234
Total Operating Expenses 48,123,333,181 53,611,108,104 55,746,604,123 62,336,753,612 66,830,997,863 58,234,055,805
Operating Income 332,395,918 5,388,053,532 9,118,663,269 40,545,510,955 27,303,014,183 24,152,145,871
Other Income (Expenses)

Other Income 27,799,614,552 146,446,966,164 26,421,988,501 33,901,181,179 17,541,858,585 12,228,399,181
Other Expenses -18,473,315,659 -45,514,316,983 -9,743,301,870 -8,449,392,922 -4,197,104,644 -9,455,591,257
Interest expense -33,568,259
Net Other Income 9,326,298,893 100,932,649,181 16,678,686,631 25,451,788,257 13,344,753,941 2,739,239,665
Profit (Lossess) Before Tax 9,658,694,811 106,320,702,713 25,797,349,900 65,997,299,212 40,647,768,124 26,891,385,536
Income Tax 0 0 -4,181,150,397 -10,395,959,733 -7,639,826,042 -4,400,408,004
Profit (Loss) For The Year 9,658,694,811 106,320,702,713 21,616,199,503 55,601,339,479 33,007,942,082 22,490,977,532
Items that are not reclacssified to profit and losses 0 0 -4,828,573,000 2,018,871,000 1,767,376,299 -2,056,235,000
Items that are reclassified to profit or loss account 0 0 1,207,143,250 -504,717,750 0 514,058,750
Others Comprehensive Income -3,621,429,750 1,514,153,250 1,767,376,299 -1,542,176,250
Others Comprehensive Income Current Year 9,658,694,811 106,320,702,713 17,994,769,753 57,115,492,729 34,775,318,381 20,948,801,282
TOTAL COMPREHENSIVE INCOME

ATTRIBUTABLE TO SHAREHOLDERS 57,115,492,729 34,775,318,381 20,948,801,282
61
PT. INHUTANI II
BALANCE SHEETS
2011-2016
2011 2012 2013 2014 2015 2016

CURRENT ASSETS
21,957,707,758 17,566,012,486 15,543,399,070 25,589,747,931 28,021,775,287 43,037,585,780
Cash and Bank
Account
2,854,246,761 6,559,843,637 15,605,954,852 23,333,890,741 18,772,183,637 29,493,099,521
Receivables
Other Receivables
(Other Current 272,099,502 440,999,703 1,314,152,740 1,058,459,257 2,861,910,404 6,163,316,439
Financial Assets)
Forest Product
23,438,707,477 10,641,396,307 3,617,966,849 8,539,254,476 6,717,204,272 390,163,054
Inventories
Warehouse Good
853,027,214 803,563,572 1,161,470,815 979,311,179 1,162,461,906 1,741,806,853
Inventories
0 55,516,467 636,011,732 584,979,239 0 0
Prepaid Taxes
Prepaid Expenses
1,190,168,355 33,598,000 12,245,000 172,078,957 1,202,078,059 900,275,681
and Down Payment
Other Current
626,723,435 283,510,840 285,472,536 396,150,285 0 0
Assets
Total Current
51,192,680,502 36,384,441,012 38,176,673,594 60,653,872,065 58,737,613,565 81,726,247,328
Assets
NON CURRENT ASSETS

2,867,928,220 2,867,928,220 2,848,808,698 2,848,808,698 2,848,808,698 1,848,808,698
Long-term Asstes
Investment in
0 0 0 0 0 0
Share
Investment in
29,166,075,988 33,761,816,352 38,264,717,626 39,367,792,069 40,605,141,969 41,501,869,180
Associate
Rubber Plantation
0 0 0 0 0 0
- produce
Rubber Plantation
0 0 0 0 0 0
- immature
Industrial
28,201,479,034 24,722,823,151 23,929,903,449 22,502,676,398 25,739,700,414 19,068,159,001
Plantation - mature
Industrial
Plantation - 62,844,865,107 77,128,052,023 100,685,286,454 128,156,674,950 157,110,851,727 198,005,987,309
immature
14,161,936,695 12,121,254,578 10,164,318,226 14,902,596,265 14,514,444,022 14,512,931,845
Fixed Assets
Deferred Tax
7,271,282,925 7,765,890,955 9,831,215,902 9,932,270,101 9,564,264,368 9,840,288,786
Assets
11,129,875,715 11,778,849,003 10,267,170,137 25,633,187,235 24,649,682,317 24,472,134,389
Intangible Assets
8,394,706,865 8,449,601,049 12,686,850,121 6,391,284,121 6,463,029,711 9,710,297,040
Other Asstes
Total Non
164,038,150,549 178,596,215,331 208,678,270,613 249,735,289,837 281,495,923,226 318,960,476,248
Current Assets
215,230,831,051 214,980,656,343 246,854,944,207 310,389,161,902 340,233,536,791 400,686,723,576
TOTAL ASSET
LIABILITIES AND EQUITY

SHORT-TERM LIABILITIES
1,918,470,790 1,946,969,200 1,307,558,270 307,925,550
Trade Payables 508,994,950 715,071,154
10,423,650,219 6,028,749,603 5,937,144,002 10,194,151,761
Accrued Expenses 5,826,354,853 6,335,098,700
3,824,651,803 5,631,949,409 5,593,617,143 6,289,738,901
Tax Payables 5,758,139,216 6,472,757,401
Reforestation
Funds and Forest
390,799,040 35,296,932 1,736,070,906 2,571,426,935
Resource Provision 2,081,461,844 7,573,259,147
Payables
8,884,565,286 8,471,785,168 5,178,747,018 7,141,034,678
Prepaid Income 2,797,426,498 933,110,559
Liabilities due in 1
5,627,463,673 4,235,437,769 0 0 0
Year 551,752,023
21,824,300,655 15,465,562,691 12,276,084,563 22,136,875,969
Other Payables 16,921,836,452 4,646,900,305
Total Short-term
Liabilities 52,893,901,466 41,815,750,772 32,029,221,902 48,641,153,794 34,445,965,836 26,676,197,266
62
LONG-TERM LIABILITIES
Related Parties
0 0 0 0 0
Loans 660,251,956
Government &
Financial
7,314,555,311 7,314,555,311 11,549,993,080 11,549,993,080 11,549,993,080 11,549,993,080
Institution Loans
Reforestation and
Forest
0
Rehabilititation 1,661,340,493 1,661,340,493 1,661,340,493 1,661,340,493 1,661,340,493
Fund
Long Term
Liabilities 14,427,186,322 40,085,431,962 70,465,386,394 109,371,886,357 149,115,049,713 213,751,476,530
Post Employment
Benefits Liabilities 18,336,871,691 20,244,101,913 27,414,826,297 28,053,071,895 26,089,714,792 27,119,792,653
Other Long Tem
0 0 0 0 0
Liabilities 1,193,842,271
Total Long-term
Liabilities 43,594,048,044 69,305,429,679 111,091,546,264 150,636,291,825 188,416,098,078 252,421,262,263
TOTAL
LIABILITIES 96,487,949,510 111,121,180,451 143,120,768,166 199,277,445,619 222,862,063,914 279,097,459,529
EQUITY
Authorized
Capital and issued 183,083,000,000 183,083,000,000 183,083,000,000 183,083,000,000 183,083,000,000 183,083,000,000
Increased Capital
Issued 6,784,500,000 6,784,500,000 6,784,500,000 6,784,500,000 6,784,500,000 6,784,500,000
Retained Earnings (71,124,618,459) (86,008,024,108) (86,133,323,959) (78,755,783,719) (81,488,003,664) (81,488,003,664)
Total Equity 118,742,881,541 103,859,475,892 103,734,176,041 111,111,716,281 117,371,472,876 121,589,264,047

TOTAL
LIABILITIES
215,230,831,051 214,980,656,343 246,854,944,207 310,389,161,900 340,233,536,790 400,686,723,576
AND EQUITY
63
PT. INHUTANI II
INCOME STATEMENT
2010-2016 (in rupiah)
2010 2011 2012 2013 2014 2015 2016

Sales 44,564,000,000 45,861,513,894 52,061,446,282 62,257,353,088 41,518,984,360 54,714,192,763 55,142,686,621
Cost of Good Sold -74,966,142,599 -58,271,337,350 -48,684,361,753 -29,899,831,599 -35,940,692,266 -37,343,680,445
GROSS Profit (loss) -29,104,628,705 -6,209,891,068 13,572,991,335 11,619,152,761 18,773,500,497 17,799,006,176
Distribution / Marketing Expenses -2,671,350,732 -2,048,840,744 -861,034,401 -194,106,655 -712,854,273 -373,531,079
General and Administration Expenses -12,111,653,390 -10,394,836,292 -9,140,692,468 -14,280,482,827 -16,844,374,760 -15,925,973,050
Total Operating Expenses -14,783,004,122 -12,443,677,036 -10,001,726,869 -14,474,589,482 -17,557,229,033 -16,299,504,129
OPERATING PROFIT (LOSS) -43,887,632,827 -18,653,568,104 3,571,264,466 -2,855,436,721 1,216,271,464 1,499,502,047
Other Income (Expense)
Profit (Loss) of Associaties and /or Join Venture 6,538,556,073 8,746,467,441 8,096,238,118 7,007,014,748 4,224,991,474
Income from Fine 1,339,340,850 475,592,694 385,541,165
Interest Income 376,244,207 75,685,082 377,462,718
Other Income 790,240,787 2,557,260,289 726,914,468 35,592,835,269 6,114,832,925 10,600,833,415
Sale from Fixed Assets 0 0 -3,331,783,412
Non Productive Forestry Consation Expenses -1,596,673,773 -2,988,661,566 -1,789,351,895
Loss of Forest Fire -361,305,215 -2,758,511,367 -1,229,389,432
Profit (Loss) from Defference Exchange Rate -241,943,501 -78,324,355 -44,453,805
Depreciation Expenses from Non Productive
Assets -70,933,199 -529,661,139 0
Other Expenses -394,867,029 -1,182,087,316 -2,535,504,083 -25,065,497,999 -12,389,153,185 -14,354,172,186
Total Other Income (Expenses) 6,378,659,200 4,317,759,763 655,673,842 10,527,337,270 732,694,488 471,652,703
Profit (Loss) Before Tax -37,508,973,627 -14,335,808,341 4,226,938,308 7,671,900,549 1,948,965,952 1,971,154,750
Income Tax
Current Income Tax 0 0 0 0 0 0
Deferred Income Tax 687,662,806 494,608,030 516,884,849 803,135,030 1,388,526,403 431,541,635
Total Income Tax 687,662,806 494,608,030 516,884,849 803,135,030 1,388,526,403 431,541,635
Profit (Loss) For The Year -36,821,310,821 -13,841,200,311 4,743,823,157 8,475,035,579 3,337,492,355 2,402,696,385
Other Comprehensive Income 0 -1,042,205,338 -223,802,713 -3,203,737,832 2,922,264,240 1,815,094,786
Total Comprehensive Income For the Year -36,821,310,821 -14,883,405,649 4,520,020,444 5,271,297,747 6,259,756,595 4,217,791,171
64
PT. INHUTANI III
BALANCE SHEET
2012-2016 (in rupiah)
2012 2013 2014 2015 2016

CURRENT
ASSETS
Cash 22,384,633,752 14,946,069,534 5,164,773,186 7,889,331,874 6,287,405,349
Account Receivable 976,833,970 1,648,113,733 1,063,145,808 913,121,340 1,214,860,118
Other Current Financial Assets 686,010,800 3,536,760,358 5,591,691,054 5,551,883,978 6,241,530,534
Supplies 744,061,375 841,677,166 966,347,864 818,788,536 802,931,186
Prepaid Expense and Down
4,125,000 625,457,007 91,708,983 38,760,227 4,628,413,845
Payment
Total Current Asset 24,795,664,897 21,598,077,798 12,877,666,895 15,211,885,955 19,175,141,032
NON-
CURRENT
ASSETS
Investment in Associate 3,220,058,650 5,740,756,999 5,669,479,248 5,319,931,992 5,144,931,992
Rubber Plantation - produce 11,161,852,989 12,079,025,181 12,746,728,063 13,642,508,974 13,610,316,681
Rubber Plantation - immature 42,198,317,450 42,151,483,386 38,450,679,797 37,320,581,367 37,085,797,939
Industrial Plantation - mature 2,206,527,086 4,475,881,364 2,531,063,664 2,097,871,617 2,097,871,617
Industrial Plantation -
9,479,646,637 2,505,884,119 1,101,461,887 2,493,395,402 3,045,470,402
immature
Fix Asset 5,554,064,717 4,575,742,208 4,433,310,928 3,990,550,002 3,633,556,810
Intagible asset
1,559,315,342 1,750,591,956 757,690,217 685,933,116 649,011,224
Deffered Tax
2,793,067,415 2,695,184,648 - - -
Other non Current Asset 38,132,970 38,132,985 38,132,986 38,132,985 38,132,985
Tot Non-
78,210,983,256 76,012,682,846 65,728,546,790 65,588,905,455 65,305,089,650
Current Asset
TOTAL ASSETS 103,006,648,153 97,610,760,644 78,606,214,315 80,800,791,410 84,480,230,682
LIABILITIES
AND
EQUITIES
SHORT TERM LIABILITIES

Payable Expense 0 7,825,000 18,180,000 10,379,720 52,975,000
Accrued Expense 987,261,423 3,528,949,076 2,197,841,182 3,348,557,845 6,122,000,378
Tax Payable
48,757,889 82,638,133 545,295,674 88,289,264 341,279,800
Other Short-Term Liabilities 509,738,000 1,446,905,126 723,130,364 1,398,440,921 6,011,126,622
Long-term Liabilities that will
due <1 year
Bank Loan 1,774,990,232 524,990,232 524,990,232 -
Liabilities
292,125,000 219,093,750 - -
finance lease
Total Short-
3,612,872,544 5,810,401,317 4,009,437,452 4,845,667,750 12,527,381,800
Term Loans
LONG TERM LIABILITIES
Long-term Liabilities net of
Current Maturities:
Bank Loan 2,362,456,046 1,837,465,814 1,312,475,583 2,145,055,921 2,145,055,921
Lease Finance 219,093,750 - - 11,775,495,045 13,272,907,375
65
Employment Benefit
3,019,271,099 11,416,177,147 4,092,798,817
Liabilities
Total Long-
5,600,820,895 13,253,642,961 5,405,274,400 13,920,550,966 15,417,963,296
Term Loans
EQUITIES
Capital
324,120,000,000 324,120,000,000 324,120,000,000 324,120,000,000 324,120,000,000
Stock
Government Equity
2,301,696,792 2,301,696,792 2,301,696,792 2,301,696,792 2,301,696,792
Participation
Other Equity Component 103,119,098 -7,786,487,711 103,119,098 -6,093,683,828 -7,919,096,129
Loss
-232,731,861,175 -240,088,492,713 -257,333,313,426 -258,293,440,268 -261,967,715,080
Balance
Total Equities 93,792,954,714 78,546,716,368 69,191,502,464 62,034,572,696 56,534,885,583
TOTAL LIABILITIES AND
103,006,648,153 97,610,760,646 78,606,214,315 80,800,791,412 84,480,230,679
EQUITIES
66
PT, INHUTANI III
INCOME STATEMENT
2010-2016 (in rupiah)
2010 2011 2012 2013 2014 2015 2016

Sales 11,202,000,000 17,478,222,361 7,168,015,094 17,623,174,012 9,197,451,812 9,439,590,670 7,945,219,168
Cost of good sold -14,774,915,304 -13,338,594,624 -25,076,831,361 -17,340,848,928 -14,620,952,330 -11,683,591,587
Gros Profit (Loss) 2,703,307,057 -6,170,579,530 -7,453,657,349 -8,143,397,116 -5,181,361,660 -3,738,372,419
Other Income 3,880,735,405 6,831,760,963 5,300,446,928 6,035,919,024 10,998,422,575 6,289,340,249

General and Administrsi Expense -6,018,184,898 -4,649,540,200 -5,180,647,569 -6,561,420,625 -6,990,613,051 -5,970,546,853
Marketing Expense -770,721,108 -81,286,850 -73,952,850 -124,842,137 -129,829,100 -155,225,104
Interest Expense -38,590,763 -140,492,295 -138,570,100 -105,702,701 -117,782,136 -94,079,468
Profir (Loss) of Assosiciate and/or Join Venture -2,704,085,024 2,610,465,597 2,621,737,428 700,732,623 228,660,086 -
Other Expense -1,674,624,559 -2,500,875,249 -2,650,452,725 -6,034,577,663 -134,589,168 -5,391,219
LOSS BEFORE INCOME TAX -4,622,163,890 -4,100,547,564 -7,575,096,237 -14,233,288,595 -1,327,092,454 -3,674,274,814
INCOME TAX EXPENSE 959,705,313 569,897,662 -97,882,767 -2,695,184,648 0 0

Profit (Loss) for The Year -3,662,458,577 -3,530,649,902 -7,672,979,004 -16,928,473,243 -1,327,092,454 -3,674,274,814
Other Comprehensive Income 0 0 0 0 0 0
Totsl Comprehensive Loss for The Year -3,662,458,577 -3,530,649,902 -7,672,979,004 -16,928,473,243 -1,327,092,454 -3,674,274,814
67
PT, INHUTANI IV
STATEMENT OF FINANCIAL POSITION (BALANCE SHEET)
2011-2016 (in rupiah)
2011 2012 2013 2014 2015 2016

CURRENT ASSETS
Cash and Bank 22,192,890,699 24,444,195,894 19,471,448,452 10,808,311,141 3,768,472,715 18,517,322,060
Deposit 17,500,000,000 10,000,000,000 10,000,000,000 18,000,000,000 5,000,000,000 17,100,000,000
Account Receivables 1,345,941,832 3,912,059,281 1,272,463,887 1,513,056,667 2,051,763,201 10,169,699,418
Other Receivables 242,315,691 300,428,171 248,714,746 11,148,591,600 1,065,338,100 256,419,279
Inventories 2,593,287,246 283,415,540 705,085,518 2,592,805,888 47,628,224,703 6,572,487,249

0 0 0
Equipment 200,518,280 327,013,859 98,220,050
0 0
Prepaid Taxes 1,055,177,038 942,912,021 948,348,227 50,311,304
Prepaid Expense and Down

1,095,180,332 2,014,989,869 989,295,900 2,096,393,486 2,071,206,302 5,328,127,322
Payment
0 0 0 0
Other Current Assets 720,488,424 11,712,241,895
Total Current Assets 46,225,311,118 42,945,503,059 45,445,818,675 46,159,158,782 61,585,005,021 57,994,366,632
-
NON CURRENT ASSETS
Account Receivable Related 0

- 788,490,724 4,141,126,887 4,347,082,494 4,611,642,434
Parties
0 0 0 0
Investment in Share 12,329,984,347 13,098,794,133
0 0
Investment in Associate 12,827,689,756 10,782,396,339 10,002,015,852 9,502,923,036
0 0 0 0 0 0
Rubber Plantation - produce
0 0 0 0 0 0
Rubber Plantation - immature
0 0 0 0 0 0
Industrial Plantation - mature
0 0 0 0 0 0
Industrial Plantation - immature
Fixed Assets 2,480,516,871 2,392,627,241 1,846,857,594 7,050,257,850 10,092,945,711 9,659,159,177
Deferred Tax Assets 3,710,232,504 3,756,036,087 3,792,173,084 84,270,074 84,270,074 84,270,074

0 0
Deffered Expenses 6,167,076,824 6,070,862,094 5,270,365,441
Settlement in Asset (Other Non

187,942,233 187,942,233 245,905,259 234,936,980 594,875,150 594,875,150
Current)
Total Non Current Assets 24,875,752,779 25,506,261,788 24,771,481,858 22,292,988,130 25,121,189,281 24,452,869,871
TOTAL ASSET 71,101,063,897 68,451,764,847 70,217,300,533 68,452,146,912 86,706,194,302 82,447,236,503
68
PT, INHUTANI IV
INCOME STATEMENT
2011-2016 (in rupiah)
2011 2012 2013 2014 2015 2016

Revenue 31,268,202,550 28,944,046,413 43,968,490,935 46,363,369,048 14,727,454,320 104,034,488,026
Cost of Good Sold -18,718,107,915 -27,164,729,401 -37,692,650,876 -34,599,390,230 -4,523,708,691 -96,746,813,489
GROSS Profit (loss) 12,550,094,635 1,779,317,012 6,275,840,059 11,763,978,818 10,203,745,629 7,287,674,537
Other Income (Expense) 3,145,748,115 2,619,034,316 2,996,561,536 5,843,883,777 2,290,242,890 2,175,599,626

Distribution Expenses -903,994,597 -1,070,417,917 -1,360,035,750 -1,416,980,185 -585,623,775 0
Administration Expenses -10,453,010,420 -7,204,685,211 -7,686,989,029 -10,025,543,155 -9,139,758,316 -10,049,652,003
Other Expenses -4,201,920,236 -926,284,113 -1,881,676,123 -2,857,758,775 -2,204,644,605 -1,493,622,374
Financial Expenses 0 0 0 0 0
Profit ( Loss) of Associates 0 0 0 1,329,180,486 548,800,000 0
Profit (Loss) Before Tax 136,917,497 -4,803,035,913 -1,656,299,307 4,636,760,966 1,112,761,823 -2,080,000,214
BENEFIT (EXPENSE) INCOME TAX 0 0

Current Corporate Income Tax 0 0 0 0 0 0
Deferred Income Tax -26,887,935 -45,803,583 -36,136,996 16,537,458 0 0
Profit (Loss) For The Year 163,805,432 -4,757,232,330 -1,620,162,311 4,653,298,424 1,112,761,823 -2,080,000,214
Part of Other Comprehensive Income from

Associate Entities 6,055,779,973 5,613,433,764 3,374,473,900 0 0 0
Other Comprehensive Income of the
current year after tax 6,055,779,973 5,613,433,764 3,374,473,900 0 0 0
Total comprehensive income for the
current year 6,219,585,405 856,201,434 1,754,311,589 4,653,298,424 1,112,761,823 -2,080,000,214
69
PT, INHUTANI V
BALANCE SHEET
2012-2016 (in rupiah)
2012 2013 2014 2015 2016

CURRENT ASSETS
Cash and Bank 9,353,719,911 15,064,630,682 16,762,268,345 56,772,719,889 138,695,068,857
Account
Receivables 57,107,532 572,058,163 633,875,106 950,933,656 1,836,625,656
Inventories 0 0 0 16,953,426,000 5,867,300,027
Other Financial
Current Assets 14,000,000,000 260,500,000,000 181,275,608,022 0
Prepaid Expenses
and Down
Payment 792,910,349 1,308,243,276 1,335,712,869 1,705,147,963 2,439,231,245
TOTAL CURRENT
ASSETS 10,203,737,792 30,944,932,121 279,231,856,320 257,657,835,530 148,838,225,785
NON CURRENT
ASSETS
Investment in
Associate Entities 151,693,226,680 135,693,594,641 0 0 0
Industrial Plantation -
mature 0 11,838,900 11,838,900 0 0
Fixed Assets 742,224,760 832,510,431 439,272,063 1,241,149,569 1,349,314,297
Other Financial Non

Current Assets-Third
Party 11,838,900 0 0 11,838,900 97,538,174,118
Deferred Expenses 1,396,466,234 1,509,267,083 5,760,679,964 6,849,212,693 7,095,724,235
Other Non Current

Assets 0 0 0 0
TOTAL NON
CURRENT ASSETS 153,843,756,574 138,047,211,055 6,211,790,927 8,102,201,162 105,983,212,650
TOTAL ASSETS 164,047,494,366 168,992,143,176 285,443,647,247 265,760,036,692 254,821,438,435
SHORT-TERM
LIABILITIES
Trade Payables 0 0 0 15,227,000,000 0
Accrued Expenses 17,965,383,876 14,192,305,337 14,082,208,252 3,694,200,754 2,511,664,268
Tax Payables 12,461,921,607 14,966,556,802 26,927,604,375 5,178,745,070 347,924,198
Other Short Term

Liabilities 97,269,920,654 98,880,439,676 91,164,746,388 2,158,151,320 3,564,087,321
TOTAL SHORT-
128,039,301,815
TERM
LIABILITIES 127,697,226,137 132,174,559,015 26,258,097,144 6,423,675,787
70
LONG-TERM
LIABILITIES
Reforestation and
Forest Rehabilititation
Fund 0 0 94,462,030,999 94,170,916,981
Post Employment
Benefits Liabilities 2,039,608,471 2,088,580,736 6,393,739,388 7,750,671,938
Other Long Term

Financial Liabilities 5,585,864,932 0 0 4,575,291,246 4,920,477,832
Total Long-term
Liabilities 5,585,864,932 2,039,608,471 2,088,580,736 105,431,061,633 106,842,066,751
EQUITY
Share Capital 132,659,000,000 132,659,000,000 132,659,000,000 132,659,000,000 132,659,000,000
Government Capital
Investment 44,860,567,741 44,860,567,841 44,860,567,841 44,860,567,741 44,860,567,841
Reserves 945,440 945,440 945,440 945,440 945,440
Retained Earnings -146,756,109,885 -138,607,280,290 -26,340,005,685 -40,342,564,117 -32,118,211,507
Other Equity
Components 0 -3,107,071,151 -3,846,605,776
Total Equity 30,764,403,296 38,913,232,991 151,180,507,596 134,070,877,913 141,555,695,998
TOTAL
LIABILITIES AND
EQUITY 164,047,494,365 168,992,143,277 285,443,647,347 265,760,036,690 254,821,438,536
71
PT, INHUTANI V
INCOME STATEMENT
2010-2016 (in rupiah)
2010 2011 2012 2013 2014 2015 2016
REVENUE 2,777,000,000 9,739,000,000 280,854,206 11,538,222,603 3,792,896,656 10,609,894,620 39,300,724,525

COST OF GOOD SOLD -637,292,731 -10,490,478,631 -4,256,463,272 -1,736,787,702 -28,394,501,197
GROSS PROFIT (LOSSES) -356,438,525 1,047,743,972 -463,566,616 8,873,106,918 10,906,223,328
Other Income 38,196,623,426 34,988,900,834 137,862,788,698 19,140,441,695 17,188,577,250

General and Administration Expenses -4,709,694,521 -5,525,796,354 -8,946,783,439 -12,384,905,695 -12,577,606,569
Marketing Expenses 0 0 0 0 0
Funding Expenses 0 0 0 0 0
Part of net Profit for Associate Entities 0 0 0 0 0
Other Expenses -23,664,583,563 -16,936,235,839 -7,260,849,490 -3,727,353,961 -6,875,238,206
Profit (Lossess) Before Tax 9,465,906,817 13,574,612,613 121,191,589,153 11,901,288,957 8,641,955,803
Current Income Tax 0 -3,385,540,868 -13,175,727,429 -453,502,313 -417,603,194

Deferred Income Tax 39,692,926 112,800,849 4,251,412,881 283,336,261 0
Income Tax Expense 39,692,926 -3,272,740,019 -8,924,314,548 -170,166,052 -417,603,194
Profit (Loss) For The Year 9,505,599,743 10,301,872,594 112,267,274,605 11,731,122,905 8,224,352,609
Other Comprehensive Income 0 -2,153,042,999 0 3,656,490,433 -739,534,625
Total Comprehensive Income For the Year 9,505,599,743 8,148,829,595 112,267,274,605 15,387,613,338 7,484,817,984
72
APPENDIX B
FREE CASH FLOW CALCULATION
73
PT, INHUTANI I
2013-2016 (in rupiah)
2010 2011 2012 2013 2014 2015 2016

Sales 172,957,831,571 138,877,448,855 174,945,036,036 249,484,480,473 252,700,285,954 226,016,258,902
Other Income 222,404,000,000 26,421,988,501 33,901,181,179 17,541,858,585 12,228,399,181
EXPENSE
Administrative and General
Expenses 54,311,903,623 60,544,334,817 64,709,080,378 56,630,079,234
Cost of Good Sold 110,079,768,644 146,602,215,906 158,566,273,908 143,630,057,226
Marketing expense 1,434,700,500 1,792,418,795 2,121,917,485 1,603,976,571
Other expense 9,743,301,870 8,449,392,922 4,197,104,644 9,455,591,257
EBITDA 25,797,349,900 65,997,299,212 40,647,768,124 26,924,953,795
Depreciation 1,311,133,384 1,758,533,510 2,268,077,973 2,412,943,877
EBIT 24,486,216,516 64,238,765,702 38,379,690,151 24,512,009,918
Interest expense 0 0 0 -33,568,259
Tax 25%
NOPAT 18,364,662,387 48,179,074,277 28,784,767,613 18,384,007,439
NOPAT +
OCF Depreciation 19,675,795,771 49,937,607,787 31,052,845,586 20,796,951,316
change in fixed
asseet asset +
NFAI Depreciation 11,723,194,137 14,959,683,937 13,990,463,122 7,964,249,084
change in current
NCAI asset 12,172,422,150 -5,098,126,785 -28,348,129,207 -18,795,962,260
change in (account
payable + accruals) 4,816,950,578 -2,026,615,089 2,234,943,866 -6,733,831,635
(-) 7,355,471,572 -3,071,511,696 -30,583,073,073 -12,062,130,625
OCF-NFAI-
FCFF NCAI 597,130,062 38,049,435,546 47,645,455,537 24,894,832,857
74
PT, INHUTANI II
2013-2016 (in rupiah)
2011 2012 2013 2014 2015 2016
Sales 45,861,513,894 52,061,446,282 62,257,353,088 41,518,984,360 54,714,192,763 55,142,686,621

Profit (Loss) of Associaties and /or Join Venture 8,096,238,118 0 7,007,014,748 4,224,991,474
Other Income 726,914,468 35,592,835,269 6,114,832,925 10,600,833,415
Income from penalty 385,541,165 0 0 0
Sale from Fixed Assets -3,331,783,412
Interest Income 377,462,718 0 0 0
Other Income (Expense)
Sales Expense -861,034,401 -194,106,655 -712,854,273 -373,531,079
General and Administration Expenses -9,140,692,468 -14,280,482,827 -16,844,374,760 -15,925,973,050
Cost of Good Sold -48,684,361,753 -29,899,831,599 -35,940,692,266 -37,343,680,445
Non Productive Forestry Consation Expenses -1,789,351,895 0 0 0
Loss of Forest Fire -1,229,389,432 0 0 0
Profit (Loss) from Defference Exchange Rate -44,453,805 0 0 0
Depreciation Expenses from Non Productive Assets 0 0 0 0
Other Expense -2,535,504,083 -25,065,497,999 -12,389,153,185 -14,354,172,186
EBITDA 4,226,938,308 7,671,900,549 1,948,965,952 1,971,154,750
Depreciation 106,065,833 129,137,172 413,953,303 393,594,897
EBIT 4,120,872,475 7,542,763,377 1,535,012,649 1,577,559,853
Non-Operating Intersest Expense 0 0 0 -23,539,569
Tax 25%
NOPAT 3,090,654,356 5,657,072,533 1,151,259,487 1,183,169,890
OCF NOPAT + Depreciation 3,196,720,189 5,786,209,705 1,565,212,790 1,576,764,787
NFAI change in fixed asseet asset + Depreciation -1,850,870,519 4,867,415,211 25,801,060 392,082,720
NCAI change in current asset 1,792,232,582 22,477,198,471 -1,916,258,500 22,988,633,763
change in (account payable + accruals) -731,016,531 3,257,375,039 -4,166,727,508 714,820,051
(-) 2,523,249,113 19,219,823,432 2,250,469,008 22,273,813,712
FCFF OCF-NFAI-NCAI 2,524,341,595 -18,301,028,938 -711,057,278 -21,089,131,645
75
PT, INHUTANI III
2013-2016 (in rupiah)
2011 2012 2013 2014 2015 2016

Sales 17,478,222,361 7,168,015,094 17,623,174,012 9,197,451,812 9,439,590,670 7,945,219,168
Profir (Loss) of Assosiciate and/or Join
Venture 2,621,737,428 700,732,623 228,660,086 0
Other Income 5,300,446,928 6,035,919,024 10,998,422,575 6,289,340,249
EXPENSE
General and Administration Expense -5,180,647,569 -6,561,420,625 -6,990,613,051 -5,970,546,853
Cost of Good Sold -25,076,831,361 -17,340,848,928 -14,620,952,330 -11,683,591,587
Interest Expense -138,570,100 -105,702,701 -117,782,136 -94,079,468
Marketing Expense -73,952,850 -124,842,137 -129,829,100 -155,225,104
Other expense -2,650,452,725 -6,034,577,663 -134,589,168 -5,391,219
EBITDA -7,575,096,237 -14,233,288,595 -1,327,092,454 -3,674,274,814
Depreciation 339,061,876 94,545,746 83,379,190 83,379,190
EBIT -7,914,158,113 -14,327,834,341 -1,410,471,644 -3,757,654,004
Interest -138,570,100 -105,702,701 -117,782,136 -94,079,468
Tax 25%
NOPAT -5,935,618,585 -10,745,875,756 -1,057,853,733 -2,818,240,503
NOPAT + Depreciation
OCF -5,596,556,709 -10,651,330,010 -974,474,543 -2,734,861,313
(change in fixed asset) + Depreciation
NFAI -639,260,633 -47,885,534 -359,381,736 -273,614,002
NCAI change in current asset -3,197,587,099 -8,720,410,903 2,334,219,060 3,963,255,077
change in (account payable + accruals)
2,549,512,653 -1,320,752,894 1,142,916,383 2,816,037,813
(-) -5,747,099,752 -7,399,658,009 1,191,302,677 1,147,217,264

FCFF OCF-NFAI-NCAI -1,759,708,977 -1,883,033,573 -2,949,311,867 -6,424,502,388
76
PT. INHUTANI IV
2013-2016 (in rupiah)
2010 2011 2012 2013 2014 2015 2016

Sales 24,340,000,000 31,268,202,550 28,944,046,413 43,968,490,935 46,363,369,048 14,727,454,320 104,034,488,026
Profir (Loss) of Assosiciate and/or Join
Venture 0 1,329,180,486 548,800,000 0
Other Income 2,996,561,536 5,843,883,777 2,290,242,890 2,175,599,626
EXPENSE
General and Administration Expense -7,686,989,029 -10,025,543,155 -9,139,758,316 -10,049,652,003
Cost of Good Sold -37,692,650,876 -34,599,390,230 -4,523,708,691 -96,746,813,489
Distribution Expense -1,360,035,750 -1,416,980,185 -585,623,775 0
Other Expense -1,881,676,123 -2,857,758,775 -2,204,644,605 -1,493,622,374
EBITDA -1,656,299,307 4,636,760,966 1,112,761,823 -2,080,000,214
Depreciation 107,962,426 287,420,619 290,988,665 278,955,326
EBIT -1,764,261,733 4,349,340,347 821,773,158 -2,358,955,540
Interest 0 0 0 0
Tax 25%
NOPAT -1,323,196,300 3,262,005,260 616,329,869 -1,769,216,655
NOPAT +
OCF Depreciation -1,215,233,874 3,549,425,879 907,318,534 -1,490,261,329
change in fixed asseet
NFAI asset + Depreciation -437,807,221 5,490,820,875 3,333,676,526 -154,831,208
change in current
NCAI asset 2,500,315,616 713,340,107 15,425,846,239 -3,590,638,389
change in (account
payable + accruals) 325,558,843 414,081,142 18,684,994,144 -15,419,060,848
(-) 2,174,756,773 299,258,965 -3,259,147,905 11,828,422,459
FCFF OCF-NFAI-NCAI -2,952,183,426 -2,240,653,961 832,789,913 -13,163,852,580
77
PT, INHUTANI V
2013-2016 (in rupiah)
2010 2011 2012 2013 2014 2015 2016

REVENUE 2,777,000,000 9,739,000,000 280,854,206 11,538,222,603 3,792,896,656 10,609,894,620 39,300,724,525
Part of net Profit for Associate
Entities 0 0 0 0
Other Income 34,988,900,834 137,862,788,698 19,140,441,695 17,188,577,250
General and Administration -
Expenses -5,256,681,691 -8,727,781,323 11,568,358,195 -11,922,302,870
-
Cost of Good Sold 10,490,478,631 -4,256,463,272 -1,736,787,702 -28,394,501,197
Marketing Expenses 0 0 0 0
Other Expense -16,936,235,839 -7,260,849,490 -3,727,353,961 -6,875,238,206
EBITDA 13,843,727,276 121,410,591,269 12,717,836,457 9,297,259,502
Depretiation 269,114,663 219,002,116 816,547,500 655,303,699
EBIT 13,574,612,613 121,191,589,153 11,901,288,957 8,641,955,803
-
Non-Operating Interest Expense 16,936,235,839 -7,260,849,490 -3,727,353,961 -6,875,238,206
Tax 25%
NOPAT 10,180,959,460 90,893,691,865 8,925,966,718 6,481,466,852
NOPAT +
OCF Depreciation 10,450,074,123 91,112,693,981 9,742,514,218 7,136,770,551
change in fixed asset
NFAI + Depreciation 359,400,334 -174,236,252 1,618,425,006 763,468,427
change in current
NCAI asset 20,741,194,329 248,286,924,199 -21,574,020,790 -108,819,609,745
change in (account
payable + accruals) -3,773,078,539 -110,097,085 4,838,992,502 -16,409,536,486
(-) 24,514,272,868 248,397,021,284 -26,413,013,292 -92,410,073,259
FCFF OCF-NFAI-NCAI -14,423,599,079 -157,110,091,051 34,537,102,504 98,783,375,383
78
APPENDIX C
GROWTH RATE
79
Growth Rate PT. Inhutani I
Sales Growth PT, Inhutani I

Years Sales
2013 2014 2015 2016
2010 222,404,000,000
2011 172,957,831,571 -0,222326
2012 28,944,046,413 -0,832653 -0,832652583
2013 43,968,490,935 0,519086 0,519085836 0,519085836
2014 46,363,369,048 0,054468053 0,054468053 0,054468053
-
2015 14,727,454,320 -0,682347193 0,682347193
2016 104,034,488,026 6,063983073
AVERAGE -17,86% -9% -4% 181%
Growth Rate PT. Inhutani II
Sales Growth PT, Inhutani II

Years Sales
2013 2014 2015 2016
2010 44,564,000,000
2011 45,861,513,894 0,029116
2012 52,061,446,282 0,135188 0,135188132
2013 62,257,353,088 0,195844 0,19584371 0,19584371
2014 41,518,984,360 -0,333107138 -0,333107138 -0,671275483
2015 54,714,192,763 0,317811445 0,317811445
2016 55,142,686,621 0,007831494
AVERAGE 12% -0,07% 6,02% -11,52%
Growth Rate PT. Inhutani III
Sales Growth PT, Inhutani III

Years Sales
2013 2014 2015 2016
2010 11,202,000,000
2011 17,478,222,361 0,560277
2012 7,168,015,094 -0,589889 -0,58988878
2013 17,623,174,012 1,458585 1,458584947 1,458584947
2014 9,197,451,812 -0,478104693 -0,478104693 -0,671275483
2015 9,439,590,670 0,026326733 0,026326733
2016 7,945,219,168 -0,15830893
AVERAGE 47,63% 13,02% 33,56% -26,78%
80
Growth Rate PT. Inhutani IV
Sales Growth PT, Inhutani IV

Years Sales
2013 2014 2015 2016
2010 24,340,000,000
2011 31,268,202,550 0,284643
2012 28,944,046,413 -0,074330 -0,074329701
2013 43,968,490,935 0,519086 0,519085836 0,519085836
2014 46,363,369,048 0,054468053 0,054468053 0,054468053
2015 14,727,454,320 -0,682347193 -0,682347193
2016 104,034,488,026 6,063983073
AVERAGE 24,31% 17% -4% 181%
Growth Rate PT. Inhutani V
Sales Growth PT, Inhutani V

Years Sales
2013 2014 2015 2016
2010 2,777,000,000
2011 9,739,000,000 2,507021966
2012 280,854,206 -0,971162 -0,971161905
2013 11,538,222,603 40,082606 40,0826057 40,0826057
2014 3,792,896,656 -0,671275483 -0,671275483 -0,671275483
2015 10,609,894,620 1,79730654 1,79730654
2016 39,300,724,525 2,704157858
AVERAGE 1387% 1374% 128% 127,67%
81
APPENDIX D
PROPORTION OF DEBT (Wd) & PROPORTION OF EQUITY (Ws)
82
PROPORTION OF DEBT (Wd) AND PROPORTION OF EQUITY (Ws)
PT, INHUTANI I (in rupiah)
Description 2013 2014 2015 2016

Long-term Liabilities 109,535,434,803 94,586,324,670 68,247,055,347 65,837,354,228
Total equity 160,359,284,915 205,934,962,874 240,710,281,256 257,040,687,456
Total 269,894,719,718 300,521,287,544 308,957,336,603 322,878,041,684
Wd 41% 31% 22% 20%
Ws 59% 69% 78% 80%
PT, INHUTANI II (in rupiah)
Descirption 2013 2014 2015 2016

Total Long-term Liabilities 111,091,546,264 150,636,291,825 188,416,098,078 252,421,262,263
Total equity 103,734,176,041 111,111,716,281 117,371,472,876 121,589,264,047
Total 214,825,722,305 261,748,008,106 305,787,570,954 374,010,526,310
Wd 52% 58% 62% 67%
Ws 48% 42% 38% 33%
PT, INHUTANI III (in rupiah)
Description 2013 2014 2015 2016

Long-term Loans 13,253,642,961 5,405,274,400 13,920,550,966 15,417,963,296
Total equity 78,546,716,368 69,191,502,464 62,034,572,696 56,534,885,583
Total 91,800,359,329 74,596,776,864 75,955,123,662 71,952,848,879
14% 7% 18% 21%
Wd
86% 93% 82% 79%
Ws
83
PT, INHUTANI IV (in rupiah)
Description 2013 2014 2015 2016

Long-Term Liabilties 3,186,157,490 0 0 0
Total equity 58740762711 59596964145 61351275734 61758146662
Total 61,926,920,201 59,596,964,145 61,351,275,734 61,758,146,662
5% 0% 0% 0%
Wd
95% 100% 100% 100%
Ws
PT, INHUTANI V (in rupiah)
Description 2013 2014 2015 2016

Long-Term Liabilties 138,047,211,055 6,211,790,927 8,102,201,162 105,983,212,650
Total equity 38,913,232,991 151,180,507,596 134,070,877,913 141,555,695,998
Total 176,960,444,046 157,392,298,523 142,173,079,075 247,538,908,648
78% 4% 6% 43%
Wd
22% 96% 94% 57%
Ws
84
APPENDIX E
COST OF EQUITY (Ws) CALCULATION
85
HISTORICAL DATA JAKARTA COMPOSITE INDEX (^JKSE)
01 JANUARY 2013- 01 DECEMBER 2016
Date Open High Low Close* Adj Close** Volume

Dec 01,
5,168,63 5,334,79 5,022,85 5,296,71 5,296,71 1,235,733,000
2016
Nov 01,
5,430,75 5,491,70 5,043,35 5,148,91 5,148,91 150,673,112,600
2016
Oct 01,
5,403,86 5,482,84 5,332,08 5,422,54 5,422,54 106,498,548,700
2016
Sep 01,
5,368,52 5,474,31 5,128,17 5,364,80 5,364,80 96,836,257,400
2016
Aug 01,
5,280,21 5,476,22 5,279,59 5,386,08 5,386,08 126,376,256,000
2016
Jul 01,
5,027,62 5,334,12 4,971,58 5,215,99 5,215,99 79,617,343,200
2016
Jun 01,
4,801,85 5,033,24 4,754,36 5,016,65 5,016,65 95,493,561,000
2016
May 01,
4,828,96 4,845,12 4,690,56 4,796,87 4,796,87 64,177,101,700
2016
Apr 01,
4,843,39 4,920,40 4,766,81 4,838,58 4,838,58 84,316,471,600
2016
Mar 01,
4,760,24 4,908,26 4,757,80 4,845,37 4,845,37 81,119,384,900
2016
Feb 01,
4,620,15 4,803,61 4,545,14 4,770,96 4,770,96 61,740,009,900
2016
Jan 01,
4,580,17 4,639,24 4,408,80 4,615,16 4,615,16 51,540,959,900
2016
Dec 01,
4,504,22 4,595,51 4,330,76 4,593,01 4,593,01 44,268,983,400
2015
Nov 01,
4,442,42 4,621,26 4,395,97 4,446,46 4,446,46 58,142,315,500
2015
Oct 01,
4,231,41 4,696,16 4,207,80 4,455,18 4,455,18 89,096,456,900
2015
Sep 01,
4,484,20 4,484,79 4,033,59 4,223,91 4,223,91 68,705,625,400
2015
Aug 01,
4,778,04 4,868,07 4,111,11 4,509,61 4,509,61 69,686,518,600
2015
Jul 01,
4,924,07 4,982,91 4,711,49 4,802,53 4,802,53 61,536,178,700
2015
Jun 01,
5,212,13 5,215,55 4,826,13 4,910,66 4,910,66 66,490,581,700
2015
86
May 01,
5,093,33 5,347,13 5,089,42 5,216,38 5,216,38 74,841,895,900
2015
Apr 01,
5,516,80 5,524,04 5,015,01 5,086,42 5,086,42 87,512,382,900
2015
Mar 01,
5,452,83 5,518,67 5,350,47 5,518,67 5,518,67 96,820,780,500
2015
Feb 01,
5,277,15 5,464,22 5,254,04 5,450,29 5,450,29 78,908,016,300
2015
Jan 01,
5,233,80 5,325,04 5,121,81 5,289,40 5,289,40 108,529,214,100
2015
Dec 01,
5,150,38 5,226,95 5,005,27 5,226,95 5,226,95 96,613,060,000
2014
Nov 01,
5,102,54 5,157,08 4,965,39 5,149,89 5,149,89 80,043,521,000
2014
Oct 01,
5,148,57 5,165,39 4,900,72 5,089,55 5,089,55 75,967,911,400
2014
87
HISTORICAL DATA JAKARTA COMPOSITE INDEX (^JKSE)
01 JANUARY 2013- 01 DECEMBER 2016 (CONT.)

Sep 01,
5,159,94 5,262,57 5,082,73 5,137,58 5,137,58 78,633,212,300
2014
Aug 01,
5,076,23 5,223,98 5,043,52 5,136,86 5,136,86 71,651,853,900
2014
Jul 01,
4,877,65 5,165,42 4,862,42 5,088,80 5,088,80 76,992,830,300
2014
Jun 01,
4,900,97 4,971,95 4,835,04 4,878,58 4,878,58 59,399,840,700
2014
May 01,
4,845,34 5,091,32 4,828,22 4,893,91 4,893,91 62,426,319,200
2014
Apr 01,
4,796,16 4,933,11 4,721,60 4,840,15 4,840,15 76,673,742,100
2014
Mar 01,
4,589,62 4,903,50 4,567,76 4,768,28 4,768,28 87,284,636,400
2014
Feb 01,
4,407,00 4,665,27 4,320,78 4,620,22 4,620,22 69,935,300,400
2014
Jan 01,
4,294,50 4,510,22 4,161,19 4,418,76 4,418,76 55,427,112,600
2014
Dec 01,
4,269,08 4,331,59 4,109,31 4,274,18 4,274,18 55,700,469,000
2013
Nov 01,
4,473,73 4,518,65 4,202,92 4,256,44 4,256,44 63,113,145,000
2013
Oct 01,
4,314,96 4,611,26 4,314,96 4,510,63 4,510,63 73,035,132,500
2013
Sep 01,
4,196,72 4,791,77 4,012,68 4,316,18 4,316,18 92,523,051,900
2013
Aug 01,
4,618,96 4,718,10 3,837,74 4,195,09 4,195,09 66,942,192,500
2013
Jul 01,
4,757,18 4,815,73 4,403,80 4,610,38 4,610,38 44,964,721,900
2013
Jun 01,
5,053,54 5,055,83 4,373,38 4,818,90 4,818,90 45,230,439,200
2013
May 01,
5,020,20 5,251,30 4,907,60 5,068,63 5,068,63 49,691,693,200
2013
Apr 01,
4,927,12 5,034,07 4,864,86 5,034,07 5,034,07 57,888,441,200
2013
Mar 01,
4,798,49 4,940,99 4,721,32 4,940,99 5,450,29 41,871,168,800
2013
Feb 01,
4,458,60 4,795,79 4,457,45 4,795,79 5,289,40 44,086,729,600
2013
Jan 01,
4,322,58 4,472,11 4,298,61 4,453,70 5,226,95 46,647,148,200
2013
Actual
0,013394566
Return
88
DATA INPUTTED TO FIND WACC VALUE
Cost of Equity 2013 2014 2015 2016

Risk-Free (Rf) BI Rate 0,058 0,075 0,075 0,070
Actual return
Risk-Market (Rm) IHSG 0,13 0,13 0,13 0,13
Beta
plantation
Beta industry 0,99 0,99 0,99 0,99
89
APPENDIX F
WEIGHTED AVERAGE COST OF CAPITAL (WACC) CALCULATION
90
WEIGHTED AVERAGE COST OF CAPITAL CALCULATION
PT. INHUTANI I (2013-2016)
PT, Inhutani I 2013 2014 2015 2016

Rf BI rate 0,058 0,075 0,075 0,070
Beta Astra Agro Lestari 0,99 0,99 0,99 0,99
Average Return IHSG
Rm 2013-2016 0,13 0,13 0,13 0,13
Wd Proportion of Debt 0,41 0,31 0,22 0,20
Ws Propotion of Equity 0,59 0,69 0,78 0,80
Tax 2014 0,25 0,25 0,25 0,25
Rd Cost of Debt 0,10 0,10 0,09 0,089
Rs Cost of Equity 12,93% 12,95% 12,95% 12,94%
WACC 10,65% 11,23% 11,56% 11,66%
PT. INHUTANI II (2013-2016)
PT, Inhutani II 2013 2014 2015 2016

Rf BI rate 0,058 0,075 0,075 0,070
Average Return IHSG
Rm 2013-2016 0,13 0,13 0,13 0,13
Wd Weighted Debt 0,52 0,58 0,62 0,67
Ws Weigted equity 0,48 0,42 0,38 0,33
Tax 2014 0,25 0,25 0,25 0,25
Rd Cost of Debt 0,10 0,10 0,09 0,089
Rs Cost of Equity 12,93% 12,95% 12,95% 12,94%
WACC 10,02% 9,81% 9,08% 8,71%
91
PT. INHUTANI III (2013-2016)
PT, Inhutani III 2013 2014 2015 2016

Rf BI rate 0,058 0,075 0,075 0,070
Rm Return IHSG 0,13 0,13 0,13 0,13
Wd Weighted Debt 0,14 0,58 0,58 0,54
Tax 2014 0,25 0,25 0,25 0,25
Rd Bunga kredit bank 0,10 0,10 0,09 0,089
Rs CAPM 12,93% 12,95% 12,95% 12,94%
WACC 12,12% 16,33% 14,42% 13,76%
PT. INHUTANI IV (2013-2016)
PT, Inhutani IV 2013 2014 2015 2016

Rf BI rate 0,058 0,075 0,075 0,070
Average Return IHSG
Rm 2013-2016 0,13 0,13 0,13 0,13
Wd Weighted Debt 0,05 0,00 0,00 0,00
Tax 2014 0,25 0,25 0,25 0,25
Rd Cost of Debt 0,10 0,10 0,09 0,089
Rs Cost of Equity 12,93% 12,95% 12,95% 12,94%
WACC 12,64% 12,95% 12,95% 12,94%
92
PT. INHUTANI V (2013-2016)
2013 2014 2015 2016

Rf BI rate 0,058 0,075 0,075 0,070
Average Return IHSG
Rm 2013-2016 0,13 0,13 0,13 0,13
Wd Weighted Debt 0,78 0,04 0,06 0,43
Tax 2014 0,25 0,25 0,25 0,25
Rd Cost of Debt 0,10 0,10 0,09 0,089
Rs Cost of Equity 12,93% 12,95% 12,95% 12,94%
WACC 8,55% 12,73% 12,59% 10,26%
93
APPENDIX G
TERMINAL GROWTH
94
Terminal Growth 2015
Year Stock Price Astra Agro Lestari (AAL) Growth
2012 19700
2013 25100 0,583596
2014 24250 -0,03386
2015 15850 -0,34639
Average 5,08%

2010 26200
2011 21700 -0,171755725
2012 19700 -0,092165899
2013 25100 0,274111675
Average 0,34%

Year Stock Price - Astra Agro Lestari (AAL) Growth
2011 21700
2012 19700 -0,0921659
2013 25100 0,274111675
2014 24250 -0,03386454
Average 4,94%

2012 19700
2013 25100 0,583596
2014 24250 -0,03386
2015 15850 -0,34639
Average 5,08%
95
APPENDIX H
DISCOUNTED CASH FLOW CALCULATION
96
PT. INHUTANI I (2013-2016)
Value 2013
Base Year
Sales Growth -18% 2013 E(2014) E(2015) E (2016) E(2017) E(2018) Terminal Value
FCFF 597,130,062 597,130,062 490,464,193 402,852,142 330,890,309 271,783,082 223,234,231 183,357,703
1+WACC 110,65% 110,65% 110,65% 122,43% 135,47% 149,89% 165,86% 10,31%
539,663,068 443,262,579 329,043,414 244,256,053 181,316,559 134,595,209 1,778,615,728
TOTAL VALUE 3,111,089,543
Value 2014
Base Year
Sales
Growth -9% 2014 E(2015) E(2016) E (2017) E(2018) E(2019) Terminal Value
FCFF 38,049,435,546 38,049,435,546 34,763,249,199 31,760,878,382 29,017,811,017 26,511,652,042 24,221,940,573 22,129,982,853
1+WACC 111,23% 111,23% 111,23% 123,72% 137,62% 153,08% 170,27% 6,30%
34,207,509,405 31,253,135,739 25,670,774,863 21,085,522,027 17,319,276,163 14,225,748,190 351,537,690,212
TOTAL VALUE 461,092,147,194
97
PT. INHUTANI I (2013-2016) cont.
Value 2015
Base Year
FCFF 47,645,455,537 47,645,455,537 45,917,620,030 44,252,443,501 42,647,653,657 41,101,060,610 39,610,553,885 38,174,099,543
1+WACC 111,56% 111,56% 111,56% 124,46% 138,84% 154,89% 172,80% 6,48%
42,708,372,049 41,159,577,084 35,556,608,004 30,716,359,650 26,535,004,409 22,922,848,508 589,425,575,603
TOTAL VALUE 746,315,973,257
Value 2016
Base Year
Sales
Terminal Value
Growth 181% 2015 E(2016) E(2017) E (2018) E(2019) E(2020)
FCFF 24,894,832,857 24,894,832,857 70,005,132,461 196,856,857,774 553,568,304,069 1,556,653,249,137 4,377,362,866,044 12,309,296,030,855
1+WACC 111,66% 111,66% 111,66% 124,69% 139,23% 155,46% 173,59% 6,48%
Value 22,294,708,554 62,693,492,842 157,883,126,484 397,602,374,640 1,001,295,400,212 2,521,595,801,319 190,061,166,735,005,00
TOTAL VALUE 194,202,236,930,501
98
PT. INHUTANI II (2013-2016)
Value 2013
Base Year
Sales Growth 12% 2013 E(2014) E(2015) E (2016) E(2017) E(2018) Terminal Value
FCFF 2,524,341,595 2,524,341,595 2,827,386,770 3,166,812,275 3,546,985,537 3,972,798,294 4,449,729,529 4,983,915,975
1+WACC 110,02% 110,02% 110,02% 121,05% 133,19% 146,54% 161,23% 9,68%
2,294,358,568 2,569,794,466 2,616,065,754 2,663,170,196 2,711,122,791 2,759,938,813 51,464,511,350
TOTAL VALUE 64,784,603,371
Value 2014
Base Year
Sales
Growth -0,07% 2014 E(2015) E(2016) E (2017) E(2018) E(2019) Terminal Value
FCFF -18,301,028,938 -18,301,028,938 -18,288,368,920 -18,275,717,660 -18,263,075,151 -18,250,441,388 -18,237,816,365 -18,225,200,074,66
1+WACC 109,81% 109,81% 109,81% 120,59% 132,42% 145,41% 159,68% 4,88%
-16,665,874,042 -16,654,345,167 -15,155,826,149 -13,792,140,367 -12,551,155,842 -11,421,832,201 -373,823,049,021
TOTAL VALUE -443,398,348,746,82
99
PT. INHUTANI II (2013-2016) cont,
Value 2015
Base Year
Sales
Growth 6,02% 2015 E(2016) E(2017) E (2018) E(2019) E(2020) Terminal Value
FCFF -711,057,278 -711,057,278 -753,850,605 -799,219,349 -847,318,505 -898,312,397 -952,375,238 -1,009,691,725
1+WACC 109,08% 109,08% 109,08% 109,08% 109,08% 109,08% 109,08% 4,00%
-651,857,919,88 -691,088,471,42 -732,680,022,39 -776,774,664,04 -823,523,039,05 -873,084,856,19 -25,254,053,885,39
TOTAL VALUE -29,151,204,938,49
Value 2016
Base Year
Sales
Growth -11,52% 2016 E(2017) E(2018) E(2019) E(2020) E(2021) Terminal Value
-
FCFF 21,089,131,645 -21,089,131,645 -18,659,434,903 -16,509,665,584 -14,607,573,010 -12,924,622,136 -11,435,565,458 -10,118,064,264
1+WACC 108,71% 108,71% 108,71% 118,18% 128,48% 139,67% 151,84% 19,44%
- - - - - -
19,399,132,492,30 17,164,141,986,06 13,969,649,157,36 11,369,697,229,16 9,253,633,618,61 7,531,399,774,47 -52,043,333,458,22
-
TOTAL VALUE 111,331,855,223,88
100
PT. INHUTANI III (2013-2016)
Value 2013
Base Year
FCFF -1,759,708,977 -1,759,708,977 -2,597,901,249 -3,835,344,928 -5,662,213,191 -8,359,263,329 -12,340,984,180 -18,219,295,712
1+WACC 112,12% 112,12% 112,12% 125,70% 140,93% 158,01% 177,16% 11,78%
-1,569,531,421 -2,317,137,489 -3,051,144,373 -4,017,664,913 -5,290,353,184 -6,966,194,896 -154,700,141,838
TOTAL VALUE -176,342,636,694
Value 2014
Base Year
Sales
FCFF -1,883,033,573 -1,883,033,573 -2,128,199,192 -2,405,284,679 -2,718,445,909 -3,072,379,840 -3,472,394,964 -3,924,490,920
1+WACC 116,33% 116,33% 116,33% 135,34% 157,44% 183,16% 213,07% 11,40%
-1,618,645,202,14 -1,829,388,207,38 -1,777,271,134,06 -1,726,638,813,57 -1,677,448,947,10 -1,629,660,440,86 -34,431,736,013,70
TOTAL VALUE -43,072,143,556,67
101
PT, INHUTANI III (2013-2016) cont,
Value 2015
Base Year
Sales
FCFF -2,949,311,867 -2,949,311,867 -3,939,107,799 -5,261,081,551 -7,026,712,773 -9,384,893,945 -12,534,486,211 -16,741,088,978
1+WACC 116,33% 116,33% 116,33% 135,34% 157,44% 183,16% 213,07% 9,34%
-2,535,212,102,54 -3,386,035,188,93 -3,887,426,904,20 -4,463,062,872,15 -5,123,936,910,37 -5,882,670,760,75
-2,535,212,102,54 -3,386,035,188,93 -3,887,426,904,20 -4,463,062,872,15 -5,123,936,910,37 -5,882,670,760,75 -179,240,976,150,21
TOTAL VALUE -204,519,320,889
Value 2016
Base Year
Sales
Growth -26,78% 2016 E(2017) E(2018) E(2019) E(2020) E(2021) Terminal Value
FCFF -6,424,502,388 -6,424,502,388 -4,704,325,427 -3,444,730,251 -2,522,394,907 -1,847,017,214 -1,352,473,626 -990,345,350
1+WACC 113,76% 113,76% 113,76% 129,42% 147,23% 167,49% 190,54% 24,49%
-
5,647,345,018,11 -4,135,253,932,22 -2,661,735,345,59 -1,713,276,902,96 -1,102,783,472,10 -709,827,689,99 (4,043,653,013)
TOTAL VALUE -14,366,530,356
102
PT, INHUTANI IV (2013-2016)
Value 2013
Base Year
Sales Growth 24,31% 2013 E(2014) E(2015) E (2016) E(2017) E(2018) Terminal Value
FCFF -2,952,183,426 -2,952,183,426 -3,669,956,445 -4,562,243,725 -5,671,475,430 -7,050,397,894 -8,764,581,824 -10,895,540,322
1+WACC 112,64% 112,64% 112,64% 126,87% 142,91% 160,97% 181,32% 12,30%
-2,620,933,899 -3,258,169,249 -3,595,869,675 -3,968,571,837 -4,379,903,569 -4,833,868,722 -88589275467
TOTAL VALUE -111,246,592,418
Value 2014
Base Year
FCFF -2,240,653,961 -2,240,653,961 -2,613,516,846 -3,048,427,121 -3,555,709,973 -4,147,408,782 -4,837,571,043 -5,642,581,869
1+WACC 112,95% 112,95% 112,95% 127,57% 144,08% 162,73% 183,80% 8,01%
Estimated
Value -1,983,845,200 -2,313,973,036 -2,389,691,272 -2,467,887,172 -2,548,641,813 -2,632,038,922 -70453375759
TOTAL VALUE -82,805,607,974
103
PT, INHUTANI IV (2013-2016) cont,
Value 2015
Base Year
FCFF 832,789,913 832,789,913 802,589,257 773,483,812 745,433,858 718,401,121 692,348,711 667,241,076
1+WACC 112,95% 112,95% 112,95% 127,57% 144,08% 162,73% 183,80% 7,86%
Estimated Value 737,341,106 710,601,848 606,341,382 517,378,153 441,467,729 376,694,985 8,487,450,314
TOTAL VALUE 11,139,934,411
Value 2016
Base Year
FCFF -13,163,852,580 -13,163,852,580 -37,017,209,510 -104,093,675,585 -292,715,022,018 -823,124,782,879 -2,314,655,406,201 -6,508,891,192,312
1+WACC 112,94% 112,94% 112,94% 127,55% 144,06% 162,70% 183,75% 23,67%
Estimated -
Value -11,655,615,885 -32,775,995,670 -81,607,256,360 -203,189,686,671 -505,911,491,344 -1,259,642,855,240 27,498,612,964,303,10
TOTAL VALUE -29,581,740,249,589
104
Value 2013
Base Year
FCFF -14,423,599,079 -14,423,599,079 -214,519,620,534 -3,190,512,114,296 -47,451,918,505,757 -705,743,933,642,367 -10,496,403,845,348,800 -156,111,145,179,866,000
1+WACC 108,55% 108,55% 108,55% 117,83% 127,90% 138,83% 150,69% 8,21%
-13,287,855,898 -197,627,914,460 -2,707,839,587,004 -37,102,021,994,096 -508,360,998,434,620 -6,965,412,957,023,490 -1,902,041,229,465,040,000
TOTAL VALUE -1,909,555,024,197,850,000
Value 2014
Base Year
- - - - - -
FCFF 157,110,091,051 157,110,091,051 2,315,207,648,473 34,117,391,312,573 502,761,119,825,597 7,408,794,573,198,660 -109,177,569,353,213,000 -1,608,863,835,015,120,000
1+WACC 112,73% 112,73% 113% 127% 143% 161% 182% 7,79%
- - - - -
139,368,356,348 2,053,761,680,191 26,847,015,432,284 350,947,358,972,193 4,587,625,357,470,900 -59,969,980,917,216,700 -20,642,175,510,727,800,000
TOTAL VALUE -20,707,112,965,138,600,000
105
Value 2015
Base Year
FCFF 34,537,102,504 34,537,102,504 78,631,644,887 179,022,996,415 407,586,961,855 927,965,316,196 2,112,726,138,594 4,810,106,217,115
1+WACC 112,59% 112,59% 112,59% 126,76% 142,72% 160,68% 180,91% 7,50%
30,675,737,755 69,840,361,319 141,230,031,347 285,593,049,311 577,521,572,693 1,167,854,636,974 64,098,978,937,818
TOTAL VALUE 66,341,018,589,462
Value 2016
Base Year
FCFF 8,641,955,803 8,641,955,803 19,675,396,909 44,795,559,285 101,987,377,483 232,197,685,038 528,651,351,444 1,203,596,200,102
1+WACC 110,26% 110,26% 110,26% 121,57% 134,04% 147,79% 162,95% 20,99%
Value 7,837,964,472 17,844,926,016 36,848,300,520 76,088,701,629 157,116,893,694 324,433,427,768 5,734,812,093,474,91
TOTAL VALUE 6,354,982,307,573
106
APPENDIX I
ENTERPRISE VALUE CALCULATION
107
Enterprise Value (EV) PT. Inhutani I
PT, Inhutani I 2013 2014 2015 2016
Total Equity 160,359,284,915 205,934,962,874 240,710,281,256 257,040,687,456
LTD 109,535,434,803 94,586,324,670 68,247,055,347 65,837,354,228
Cash 109,285,950,911 106,362,674,220 80,458,145,376 73,710,362,861
EV 160,608,768,807 194,158,613,324 228,499,191,227 249,167,678,823
Enterprise Value (EV) PT. Inhutani II
2013 2014 2015 2016

Total Equity 103,734,176,041 111,111,716,281 117,371,472,876 121,589,264,047
Long Term Debt 111,091,546,264 150,636,291,825 188,416,098,078 252,421,262,263
Cash 15,543,399,070 25,589,747,931 28,021,775,287 43,037,585,780
EV 199,282,323,235 236,158,260,175 277,765,795,667 330,972,940,530
Enterprise Value (EV) PT. Inhutani III
2013 2014 2015 2016

Total Equity 78,546,716,368 69,191,502,464 62,034,572,696 56,534,885,583
Long Term Debt 13,253,642,961 5,405,274,400 13,920,550,966 15,417,963,296
Cash 14,946,069,534 5,164,773,186 7,889,331,874 6,287,405,349
EV 76,854,289,795 69,432,003,678 68,065,791,788 65,665,443,530
Enterprise Value (EV) PT. Inhutani IV

2013 2014 2015 2016
Total Equity 61,351,275,734 61,758,146,662 61,220,598,625 59,140,598,412
Long Term Debt 3,186,157,490 0 0 0
Cash 19,471,448,452 10,808,311,141 3,768,472,715 18,517,322,060
EV 45,065,984,772 50,949,835,521 57,452,125,910 40,623,276,352
Enterprise Value (EV) PT. Inhutani V
2013 2014 2015 2016

Total Equity 38,913,232,991 151,180,507,596 134,070,877,913 141,555,695,998
Long Term Debt 2,039,608,471 2,088,580,736 105,431,061,633 106,842,066,751
Cash 15,064,630,682 16,762,268,345 56,772,719,889 138,695,068,857
EV 25,888,210,780 136,506,819,987 182,729,219,657 109,702,693,892
108
APPENDIX J
DATA INPUT SPSS
109
Data Input for SPSS
Y S T S,T
1 160608768807 0 0 0
2 199282323235 0 0 0
3 76854289795 0 0 0
4 45065984772 0 0 0
5 25888210780 0 0 0
6 461092147194 1 0 0
7 236158260177 1 0 0
8 69432003678 1 0 0
9 50949835521 1 0 0
10 136506819987 1 0 0
11 746315973257 0 1 0
12 277765795668 0 1 0
13 68065791788 0 1 0
14 57452125910 0 1 0
15 66341018589462 0 1 0
16 194202236930501 1 1 1
17 330972940530 1 1 1
18 65665443530 1 1 1
19 40623276352 1 1 1
20 6354982307573 1 1 1
110
APPENDIX K
INTERVIEW TRANSCRIPT
111
Interviewees : Ir. Hery Setyono MBA
(Head Division - PT. Inhutani III)
interviewer : Ardista Laras Hapsari
Time/Date : 26 May 2017
Tanya :
Apakah saudara ketahui tentang pengalihan saham pemerintah pada PT, Inhutani I s/d PT,
Inhutani V kepada Perum Perum Perhutani?
Jawab :
PT, Inhutani I- V semula adalah perusahaan BUMN dengan saham pemerintah 100%
yang terdiri dari lembar saham senilai Rp1,000,000,000 per saham, dengan demikian PT,
Inhutani berubah statusnya menjadi perusahaan swasta penuh, PT, Inhutani yang semula
tunduk pada Undang-Undang BUMN nomor 19 tahun 2003 dan sekarang Undang-Undang
tentang Perseroan Terbatas Nomor 40 tahun 2007, Kepemilikan saham PT, Inhutani saat
ini mayoritas saham oleh Perum Perhutani dan kurang dari 1% saham Koperasi karyawan
PT, Inhutani, Beberapa implikasi dari kebijakan akusisi tersebut bahwa Direksi PT,
Inhutani ditunjuk dan diangkat oleh Pemegang Saham (Perum Perhutani), meskipun
demikian PT, Inhutani merupakan entitas bisnis terpisah (kedudukannya ) berdiri sendiri ,
Induk perusahaan dan anak perusahaan mempunyai anggaran dasar sendiri-sendiri yang
merupakan hukum yang positif bagi Perseroan Terbatas itu yang apabila dilanggar akan
mengakibatkan transaksi yang dibuat menjadi batal, Jika ada pihak yang menggugat anak
perusahaan, apabila ada anak perusahaan yang melakukan pelanggaran hak, maka yang
digugat oleh pihak yang merasa dirugikan adalah anak perusahaan itu sendiri, Induk
perusahaan tidak perlu diikutsertakan digugat, karena secara hukum anak perusahaan
bertanggung jawab sendiri didalam melakukan aktifitasnya,
112
Tanya :
Menurut saudara apakah maksud diadakan pengalihan saham atau akusisi saham PT,
Inhutani oleh Perum Perhutani tersebut ?
Jawab :
Akusisi saham PT, Inhutani pada dasarnya tidak menghilangkan entitas masing-masing
perusahaan demikian halnya dengan induk perusahaan (Perum Perhutani), Penggabungan
usaha yang diwujudkan dalam bentuk holding company tentunya memiliki sejumlah
manfaat dan keuntungan yang strategis sifatnya, Yang terutama adalah masalah
optimalisasi aset dan sumber daya yang ada, efisiensi serta efektifitas usaha yang lebih baik
Dari sisi finansial, misalnya, manfaat konsolidasi ini bagi perusahaan induk akan memiliki
kemampuan untuk mengevaluasi dan memilih portfolio bisnis terbaik untuk mencapai
efektivitas investasi yang ditanamkan, optimalisasi alokasi sumber daya yang dimiliki, serta
manajemen dan perencanaan pajak yang lebih baik, Sementara itu, dari sisi non-finansial-
nya, dengan holding company memungkinkan perusahaan untuk membangun,
mengendalikan, mengelola, mengkonsolidasikan serta mengkoordinasikan aktivitas dalam
lingkungan yang aneka bisnis bentuknya, Salah satu yang terutama adalah terbangunnya
suatu sinergi strategis di antara group perusahaan yang pada gilirannya meningkatkan sisi
efisiensi,
Tanya :
Apakah ada perubahan kondisi PT Inhutani I sd/d V setelah bergabung dengan Perum
Perhutani ?
Jawab :
Kondisi PT, Inhutani III pada umumnya relatif kurang baik yang ditunjukkan dengan
kinerja keuangan yang masih fluktuatif kadang negatif, Penyebab kondisi tersebut bahwa
binis Kehutanan semakin banyak hambatan dan tidak efisien, Masalah yang sering
dihadapi adalah kecukupan modal keuangan, hasil produksi kayu yang tidak seimbang
antara penjualan dan biaya produksi, larangan ekspor hasil hutan kayu, potensi hutan &
113
lahan yang menurun serta perijinan yang rigid serta klaim kepemilikan lahan olah
masyarakat, Dengan laba yang tidak pasti maka pemerintah sebagai pemegang saham tidak
mendapatkan setoran deviden dan secara makro bisnis Kehutanan tidak menunjang
pembangunan nasional,
Perum Perhutani sebagai induk selama 2 tahun belum memberikan perlakuan terhadap
kondisi PT, Inhutani kecuali masih dalam sinkronisasi yang bersifat administratif seperti
arahan penyusunan RJP dan RKAP, sehingga kinerja PT, Inhutani lebih karena usahanya
sendiri bukan campur tangan Induk Perusahaan (Perum Perhutani),
Tanya :
Apakah harapan saudara terhadap pembentukan induk dan anak perusahaan

BUMN Kehutanan dimasa datang ?
Jawab :
Perum Perhutani merupakan perusahaan BUMN yang cukup besar dengan aset trilun dan
jauh lebih besar dibanding dengan total anak perusahaan, demikian dengan aktifitas
operasional lebih banyak dan bervariatif, Sesuai dengan maksud penggabungan perusahaan
(Akusisi) maka Induk perusahaan mempunyai tanggungjawab terhadap perkembangan
anak perusahaan, Secara hukum antar perusahaan tidak ada kaitannya namun dengan
pemilik modal menjadi kesatuan kegiatan ekonomi, sehingga dari sisi bisnis maka Induk
seharusnya dapat berperan meningkatkan kinerja PT, Inhutani, Induk dan anak perusahaan
seharusnya bisa bersinergi dalam melakukan kegitan usaha yang relevan dan saling
menguntugkan diberbagai bidang usaha, dikarenakan usahanya sejenis yakni bertumpu
pada sumber daya lahan dan perkayuan (tanaman tahunan), Hal lain yang memungkinkan
adalah penggunaan sarana prasrana bersama sehingga diperoleh optimalisasi aset dan lebih
efisien, seperti gedung/bangunan dan alat berat, Bantuan dan kerjasama penggunaan modal
kerja dan investasi juga sangat memungkinakan dilaksanakan melalui skema bagi hasil dan
pinjaman,
Kami berharap terwujudnya sinergi dan kerjasama dengan memperpendek birokrasi dan
admintrasi sehingga kinerja anak perusahaan akan membaik demikian halnya akan
berdampak pada kinerja keuangan induk perusahaan (konsolidasi),
114
APPENDIX L
GOVERNMENT REGULATION NUMBER 73 YEAR OF 2014
115
116
117
118
119

Acquisition Effect on Subsidiary Firm Value

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Acquisition Effect on Subsidiary Firm Value

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ACQUISITION EFFECT TOWARDS VALUE OF THE SUBSIDIARY FIRMS:

STUDY OF HOLDING STRATEGY BETWEEN PERUM PERHUTANI &

Ardista Laras Hapsari

School of Business and Management

Institut Teknologi Bandung

ACQUISITION EFFECT TOWARDS VALUE OF THE SUBSIDIARY FIRMS:

Ardista Laras Hapsari

School of Business and Management

Institut Teknologi Bandung

Ahmad Danu Prasetyo, Ph. D.

Ardista Laras Hapsari

Ardista Laras Hapsari

Keywords: Acquisition Strategy, Discounted Cash Flow Method, Enterprise Value

Ardista Laras Hapsari

VALIDATION PAGE .................................................................................................... iii

TABLE OF CONTENT ................................................................................................... ix

LIST OF TABLES ..........................................................................................................xii

LIST OF FIGURES ...................................................................................................... xiii

LIST OF APPENDICES ................................................................................................ xiv

CHAPTER 1 INTRODUCTION ...................................................................................... 1

1.1 Background ............................................................................................................. 1

1.2 Statement of Problem .............................................................................................. 4

1.3 Research Question ................................................................................................... 4

1.4 Research Objective.................................................................................................. 5

1.5 Scope and Limitation .............................................................................................. 5

1.6 Writing Structure ..................................................................................................... 5

CHAPTER 2 LITERATURE REVIEW ........................................................................... 7

2.1 Company Profile ..................................................................................................... 7

2.1.1 Perum Perhutani ............................................................................................... 7

2.1.2 PT. Inhutani I .................................................................................................... 8

2.1.3 PT. Inhutani II ................................................................................................ 10

2.1.4 PT. Inhutani III ............................................................................................... 13

2.1.5 PT. Inhutani IV ............................................................................................. 133

2.1.6 PT. Inhutani V .............................................................................................. 134

2.1.7 Summary of Company Profile ...................................................................... 135

2.2 Acquisition Theories ............................................................................................. 14

2.3 Holding Strategy ................................................................................................... 19

2.4 Valuation Theories ................................................................................................ 20

2.4.1 Discounted Cash Flow (DCF) Method ........................................................... 20

2.4.2 Enterprise Value Analysis .............................................................................. 25

2.4.3 Difference-in-Difference Analysis ................................................................. 26

CHAPTER 3 METHODOLOGY ................................................................................... 28

3.1 Problem Identification ........................................................................................... 29

3.2 Literature Review .................................................................................................. 29

3.3 Research Hypothesis ............................................................................................. 29

3.4 Data Collection ...................................................................................................... 30

3.5 Data Analysis ........................................................................................................ 30

3.5.1 Discounted Cash Flow (DCF) Analysis ........................................................ 30

3.5.2 Enterprise Value Analysis .............................................................................. 33

3.5.3 Difference-in-Difference Analysis ................................................................. 34

3.6 Conclusion and Recommendation ......................................................................... 35

CHAPTER 4 DATA ANALYSIS .................................................................................. 36

4.1 Discounted Cash Flow Analysis ........................................................................... 36

4.1.1 Free Cash Flow to Firm (FCFF) .................................................................... 36

4.1.2 Growth Rate .................................................................................................... 38

4.1.3 Cost of Debt (rd) and Cost of Equity (rs) ....................................................... 40

4.1.4 Debt Proportion (Wd) and Equity Proportion (Ws) ....................................... 41

4.1.5 Calculating Discount Rate (WACC) .............................................................. 43

4.2 Enterprise Value Analysis ..................................................................................... 46

4.4 Difference-in-Difference Analysis ........................................................................ 49

TABLE 2.1 - The Composition of Shareholders of PT.Inhutani I in 2015 ...................... 9

TABLE 2.2 - The Composition of Shareholders of PT.Inhutani II in 2015 ................... 10

TABLE 2.3 - The Composition of Shareholders of PT.Inhutani III in 2015 .................. 12