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This document is an unofficial English translation of the Prospectus issued by the Company in Bahasa Indonesia on the initial public offering conducted in theRepublic of Indonesia and is provided by the Company for information purposes only. The Prospectus has been prepared in accordance with the regulatoryframework and disclosure practices in the Republic of Indonesia and neither the Company nor the Lead Underwriter makes any representation or warranty as to theaccuracy or the completeness of this translation of the Prospectus. Each person receiving this document acknowledges that disclosure requirements and practicesin the Republic of Indonesia, as in other emerging markets, differ significantly from disclo sure requirements and practices in other jurisdictio ns. According ly, eachperson receiving this document acknowledges that this document does not provide the level or type of disclosure that a prospective investor may require inconnection with making an investment decision with regards to the Offering. In the event that a prospective investor would like to obtain more information about theCompany and/or the Offering before making an investment in the Company, it would be advisable for such potential investor to read the Prospectus in BahasaIndonesia.

Effective Date June 18, 2010 Share Distribution Date June 25, 2010Offering Period June 22-23, 2010 Refund Date June 28, 2010Allotment Date June 24, 2010 Listing Date at IDX June 28, 2010

BAPEPAM-LK DOES NOT APPROVE NOR DISAPPROVE THIS OFFERING, NOR DOES IT PASS JUDGMENT UPON THE ACCURACY ANDCOMPLETENESS OF THIS PROSPECTUS. ANY CONTRADICTING REPRESENTATION THERETO IS ILLEGAL.

PT NIPPON INDOSARI CORPINDO TBK AND THE LEAD UNDERWRITER ARE FULLY RESPONSIBLE FOR THE ACCURACY OF INFORMATION ORMATERIAL FACTS AND OBJECTIVITY OF OPINIONS INCLUDED IN THIS PROSPECTUS.

PT NIPPON INDOSARI CORPINDO Tbk

Line of Business:Establish factory and produce various types of bread

Domiciled in Cikarang, Bekasi

Head OfficeJababeka Industrial Estate

Jl. Jababeka XII A, Block W No. 40-41, Cikarang, Bekasi

Tel: (021) 8935088, Fax: (021) 8935286, 8935473

Website: www.sariroti.com

FactoriesCikarang:

Jababeka Industrial EstateJl. Jababeka XII ABlock W No. 40-41Cikarang, Bekasi

Tel: (021) 8935088Fax: (021) 8935286, 8935473

Cikarang:Jababeka Industrial Estate

Jl. Jababeka XVII BBlock U No. 33

Cikarang, Bekasi

Pasuruan:PIER Industrial Estate

Jl. Rembang Industri Raya No. 28Pasuruan 67152

East JavaTel: (0343) 740388Fax: (0343) 740387

OFFERING151,854,000 new shares or 15% of issued and paid-up capital after the Offering, each with a nominal value of Rp 100, offered to the public at an Offer Price ofRp1,275 per share, to be paid in full upon submission of the Share Subscription Form. The aggregate value of the Offering amounts to Rp193,613,850,000.

THE NUMBER OF SHARES OFFERED IS RELATIVELY LIMITED AND AS SUCH THERE IS A POSSIBILITY THAT THIS WILL AFFECT THE TRADINGOF AND CAUSE THE MARKET FOR THE COMPANYS SHARES TO BE LESS L IQUID.

THE MAJOR RISK FACING THE COMPANY IS THE RISK RELATING TO PRODUCT CONTAMINATION, FROM RAW MATERIALS, DURINGPRODUCTION AND AT DISTRIBUTION. THE COMPLETE BUSINESS RISKS OF THE COMPANY ARE SET OUT IN CHAPTER V OF THISPROSPECTUS.

THE COMPANY WILL NOT ISSUE COLLECTIVE CERTIFICATES FOR THE SHARES OFFERED HEREIN. THE SHARES ARE TO BE DISTRIBUTEDELECTRONICALLY AND ADMINISTERED IN A COLLECTIVE CUSTODIAN WITH PT KUSTODIAN SENTRAL EFEK INDONESIA.

THE LISTING OF THE SHARES IS TO BE CONDUCTED ON THE INDONESIA STOCK EXCHANGE

LEAD UNDERWRITER

PT OSK NUSADANA SECURITIES INDONESIA

UNDERWRITERSPT Asia Kapitalindo Securities Tbk , PT BNI Securities, PT CIMB Securities Indonesia, PT Ciptadana Securities, PT Danasakti Securities,

PT Danatama Makmur, PT Dhanawibawa Artha Cemerlang, PT Dinamika Usahajaya, PT e-Capital Securities, PT Erdikha Elit Sekuritas,PT HD Capital Tbk, PT Kresna Graha Securindo Tbk, PT Madani Securities, PT Makinta Securities, PT Mega Capital Indonesia,

PT Panin Sekuritas Tbk, PT Phillip Securities Indonesia, PT Sinarmas Sekuritas, PT Sucorinvest Central Gani, PT Victoria Sekuritas, PT Yulie Sekurindo Tbk

This prospectus is is sued in Jakarta on June 21, 2010


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PT Nippon Indosari Corpindo Tbk (Company) has submitted a statement of registration in relation to theOffering of its Shares to the Chairman of Bapepam-LK in Jakarta under letter No. 003/IV/LL/10 on April 5, 2010,according to the requirements stipulated in the Law of the Republic of Indonesia No. 8 of 1995 regarding CapitalMarket, as contained in the State Gazette of the Republic of Indonesia No. 64 of 1995, Supplement No.3608/1995 and its implementing regulations and amendments (Capital Market Law).

The Shares offered are planned to be listed on the Indonesia Stock Exchange (IDX) in accordance with thePreliminary Listing Agreement entered into between the Company and IDX on April 1, 2010. In the event thatthe Company cannot satisfy the listing requirements as stipulated by IDX, the Offering will be cancelled andpayments for subscriptions of the Shares will be refunded to the respective subscribers.

The Company, the Lead Underwriter, the Underwriters and the capital market supporting professionals andinstitutions involved in this Offering will be fully responsible for the accuracy of all data and objectivity of opinions,disclosure and reports presented in this Prospectus, based on their respective areas of duty and in accordancewith the prevailing laws within the Republic of Indonesia, as well as their respective code of ethics, norms andthe standards of their respective professions.

In relation to the Offering, no affiliated parties will be allowed to make any disclosure and/or statements regarding

any matter whatsoever not otherwise disclosed in this Prospectus, unless prior written consent has been givenby the Company and the Lead Underwriter.

The Underwriters hereby expressly declare that they are not in any way affiliated with the Company, whetherdirectly or indirectly, as defined in the Capital Market Law. Explanations on affiliation are set out in Chapter XIIIon Underwriting.

This Offering has not been registered in any jurisdi ction outside the Republic of Indonesia. If a partyoutside the jurisdicti on of t he Republic of Indonesia receives this Prospectus, it is not meant to serve asan offer to purchase shares, unless any such offer and subsequent purchase of shares are not incontradiction nor a violation of any of the laws and regulations prevailing in such country .

The Company has disclosed all material information that is required to be disclosed to the public and

there is no other material information that is not disclosed, the absence of which would otherwisemislead the public.


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TABLE OF CONTENTS

TABLE OF CONTENTS ..................................................................................................................................................... iGLOSSARY ....................................................................................................................................................................... iiEXECUTIVE SUMMARY ................................................................................................................................................... vI. OFFERING .......................................................................................................................................................... 1II. USE OF PROCEEDS ......................................................................................................................................... 4III. INDEBTEDNESS ................................................................................................................................................ 5IV. MANAGEMENT DISCUSSION AND ANALYSIS ............................................................................................... 9V. BUSINESS RISKS ............................................................................................................................................ 18VI. MATERIAL EVENTS SINCE THE DATE OF THE INDEPENDENT AUDITORS REPORT .......................... 21VII. INFORMATION ABOUT THE COMPANY ....................................................................................................... 22

1. Brief history ................................................................................................................................................ 222. Permits and licenses ................................................................................................................................. 233. Shareholding evolution .............................................................................................................................. 244. Management and supervision ................................................................................................................... 275 . Human resources ...................................................................................................................................... 306. Brief description of corporate shareholders .............................................................................................. 327. Ownership, management and supervision relationship between the Company and its corporate

shareholders .............................................................................................................................................. 358. Affiliated party transaction ......................................................................................................................... 369. Agreements with third parties .................................................................................................................... 3610. Assets ........................................................................................................................................................ 3811. Legal proceedings faced by the Company ................................................................................................ 3912. Insurance ................................................................................................................................................... 39

VIII. BUSINESS AND PROSPECT .......................................................................................................................... 411. General ...................................................................................................................................................... 412. Operational activities ................................................................................................................................. 423. Prospects ................................................................................................................................................... 514. Strategy and Business Plan ...................................................................................................................... 535. Environmental management and monitoring ............................................................................................ 536. Research and development ...................................................................................................................... 54

7. Corporate Social Responsibility ................................................................................................................ 548. Good Corporate Governance .................................................................................................................... 54IX. SUMMARY OF IMPORTANT FINANCIAL INFORMATION ............................................................................ 55X. SHAREHOLDERS EQUITY ............................................................................................................................. 57XI. DIVIDEND POLICY ........................................................................................................................................... 58XII. TAXATION ........................................................................................................................................................ 59XIII. UNDERWRITING .............................................................................................................................................. 61XIV. CAPITAL MARKET SUPPORTING PROFESSIONALS .................................................................................. 63XV. LEGAL OPINION .............................................................................................................................................. 65XVI. INDEPENDENT AUDITORS REPORT AND THE COMPANYS FINANCIAL STATEMENTS...................... 66XVII. APPRAISAL REPORT ...................................................................................................................................... 67XVIII. ARTICLES OF ASSOCIATION ........................................................................................................................ 68XIX. TERMS OF SHARE SUBSCRIPTION ............................................................................................................. 89

XX. DISTRIBUTION OF PROSPECTUS AND SHARE SUBSCRIPTION FORMS ............................................... 93


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GLOSSARY

Affiliates : Parties referred to in Article 1 paragraph 1 of the Capital Market Law.

Allotment Date : The date when the Allotment Manager determines the allotment of theShares, which is at the latest two Business Days from the end of the

Offering Period.

Allotment Manager : The party conducting the allocation in accordance with BapepamRegulation No. IX.A.7, Attachment to Bapepam Decree No. Kep-45/PM/2000 dated October 27, 2000, on Responsibilities of AllotmentManager in Subscription and Allotment of Securities in a Public Offering,which in this Offering is conducted by the Lead Underwriter.

Automatic sanding : Equipment to fill cream to sandroll bread automatically.

Band slicer : Equipment to slice toast bread in accordance with the required thickness.

Bapepam : Badan Pengawas Pasar Modal, the Capital Market Supervisory Board as

referred to in Article 3 paragraph (1) of the Capital Market Law.

Bapepam-LK : Badan Pengawas Pasar Modal dan Lembaga Keuangan, the CapitalMarket and Financial Institutions Supervisory Board in accordance withDecree of the Minister of Finance of the Republic of Indonesia No.KMK/606/KMK.01/2005 dated December 30, 2005, on the Organizationand Administration of the Capital Market and Financial InstitutionsSupervisory Board.

BKPM : Badan Koordinasi Penanaman Modal, the Investment Coordinating Board.

BPOM RI : Badan Pengawas Obat dan Makanan Republik Indonesia, the NationalAgency of Drug and Food Control.

Business day : Mondays through Fridays, except for national holidays designated by theGovernment of the Republic of Indonesia.

Capital Market Law : Law No. 8 Tahun 1995 dated November 10, 1995, on the Capital Market,as published in the State Gazette of the Republic of Indonesia No. 64 of1995, Supplement No. 3608, and its implementing regulations.

Company : PT Nippon Indosari Corpindo Tbk, a limited liability company incorporatedbased on the laws of the Republic of Indonesia and is domiciled inCikarang, Bekasi.

Company Law : Law No. 40 of 2007 dated August 16, 2007, on Limited Liability Company,as published in the State Gazette of the Republic of Indonesia No. 106 of2007, Supplement No. 4756, and its implementing regulations.

Depanner : Equipment to remove bread from the baking pan.

Divider : Equipment used to divide bread dough in accordance with the requiredweight.


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Effective : The fulfillment of all requirements for Registration Statement inaccordance with Bapepam-LK Regulation No. IX.A.2.

Filler : Raw material in the form of bread filling.

Final proofing : The last stage of dough development process.

Flour Handling System : Equipment used to move and control flour usage from the flour silo to themixer.

Government : The Government of the Republic of Indonesia.

GSM : General Shareholders Meeting (Rapat Umum Pemegang Saham) asdefined in the Company Law and held in accordance with the provisions ofthe Companys articles of association.

IDX or the Indonesian Stock : The stock exchange as defined in Article 1 paragraph 4 of the CapitalExchange Market Law that is organized by PT Bursa Efek Indonesia, a limited liability

company incorporated and operating based in the laws of the Republic ofIndonesia and domiciled in South Jakarta, which is the stock exchangewhere the Companys shares will be listed.

KSEI : PT Kustodian Sentral Efek Indonesia (Indonesian Central SecuritiesDepository), a limited liability company incorporated and operating underthe laws of the Republic of Indonesia and domiciled in South Jakarta,whose business activities are and is licensed as securities depository andsettlement institution as defined in the Capital Market Law.

Kwik Lok : Toast bread plastic packaging bag closure device with printing of, amongstothers, the product expiry date.

Lead Underwriter : PT OSK Nusadana Securities Indonesia, a limited liability company which

is fully responsible for the administration and implementation of theOffering in accordance with the terms and conditions of the UnderwritingAgreement and is subject to the provisions of the Capital Market Law.

Mixer : Dough mixing equipment.

Moulder : Equipment used to form bread dough.

Offer Price : The price of the Shares in the Offering.

Offering : The initial public offering of the Companys Shares conducted inaccordance with and under the Capital Market Law.

Offering Period : A period of at a minimum one Business Day, where the public can submitsubscription for the Shares based on the procedures set out in the SSFand Chapter XIX on Terms of Share Subscription.

Overproof : Condition where the dough bread is overdeveloped.

PMA : Penanaman Modal Asing, a foreign investment company under theauspices of BKPM.

Prospectus : The prospectus issued by the Company for the Offering.


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Registration Statement : The documents that shall be submitted to Bapepam-LK by the Company inrelation to the Offering in accordance with the Capital Market Law.

Rounder : Equipment used to shape bread dough into a round form with solid andeven pores.

Rp or Rupiah : The currency of the Republic of Indonesia.

Sandroll : Bread product with an oval shape.

Securities : Marketable securities, which include acknowledgement of indebtedness,commercial paper, shares, bonds, proof of indebtedness, participation unitin a Collective Investment Contract, futures contract Securities and eachderivatives of Securities.

Securities company : A party conducting the activities of Underwriter, Broker and/or InvestmentManager in accordance with the provisions of the Capital Market Law.

Share Registrar : A supporting professional in the Indonesian capital market as referred toArticle 48 of the Capital Market Law.

Shares : Shares issued by the Company, offered and sold in this Offering inaccordance with the Underwriting Agreement.

SSF or Share Subscription Form : Formulir Pemesanan Pembelian Saham, the form to be used to order orsubscribe to the Shares which can be obtained from the Underwriters.

Underproof : Condition where the bread dough is underdeveloped.

Underwriters : The Lead Underwriter and other parties forming the syndicate of theCompanys Underwriters based on notarial Deed of Underwriting, who

shall take up all of the remaining Shares in the Offering.

Underwriting Agreement : The agreement between the Company and the Lead Underwriter inaccordance with the Deed of Underwriting Agreement for the Initial PublicOffering of PT Nippon Indosari Corpindo Tbk, including its amendmentsand/or additions and/or renewals, which contains the terms of theunderwriting of the Offering.

USD : United States Dollar, the currency of the United States of America.

Water meter : Equipment to measure water and send water from the tank to the mixer.


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EXECUTIVE SUMMARY

This executive summary forms an integral part of this Prospectus and must be read in conjunction with the moredetailed information in the Companys financial statements and the notes thereto which is set out in Chapter XVI ofthis Prospectus. All financial information of the Company is stated in Rupiah and is prepared in accordance with theaccounting principles generally applicable in Indonesia.

1. Brief history

The Company was incorporated under the name PT Nippon Indosari Corporation by Deed of Establishment No. 11 datedMarch 8, 1995, as amended by Deed of Amendment of Articles of Association No. 274 dated April 29, 1995, both drawnup before Benny Kristianto, SH, Notary in Jakarta, which have been ratified by the Minister of Law and Human Rights(formerly Minister of Justice) pursuant to Decree No. C2-6209 HT.01.01.Th.95 dated March 18, 1995, registered in theDistrict Court of Bekasi No 264 and 265 dated September 14, 1995, and published in the State Gazette of the Republic ofIndonesia No. 94 dated November 24, 1995, Supplement No. 9729/1995.

The Companys articles of association has been amended several times and in the last amendment, in relation to theOffering, the Company amended its articles of association in compliance with articles of association for listed companiesand changed the name of the Company to PT Nippon Indosari Corpindo Tbk by Deed No. 86 dated February 24, 2010,drawn up before FX Budi Santoso Isbandi, SH, Notary in Jakarta, which has been ratified by the Minister of Law andHuman Rights pursuant to Decree No. AHU.12936.AH.01.02.Tahun 2010 dated March 12, 2010, and registered in theCompany Register No. AHU-0019036.AH.01.09.Tahun 2010 dated March 12, 2010.

Based on Article 3 of the Companys Articles of Association as set forth in the Deed of Meeting Resolution No. 86 datedFebruary 24, 2010, drawn up before FX Budi Santoso Isbandi, SH, Notary in Jakarta, the Companys purpose andobjective are:

1. To conduct business activities in the bread, cakes and other foodstuff2. To achieve the above purpose and objective, the Company may perform the following busines activities:

a. Main business activities:

To establish factories and produce all types of bread, including but not limited to toast bread, sandwiches andother types of cakesb. Supporting business activities:

To market and sell all types of bread, including but not limited to toast bread, sandwiches and other types ofcakes.

The Company is headquartered in Jababeka Industrial Estate, Jl. Jababeka XII A, Block W No. 40-41, Cikarang,Bekasi.


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2. Financial summary

The following table summarizes the Companys financial statements for the years ending December 31, 2009, 2008,2007, 2006 and 2005, which have been audited by the Public Accounting Firm Purwantono, Suherman & Surja(previously Purwantono, Sarwoko & Sandjaja), a member of Ernst & Young Global Limited, with unqualified opinion.

Balance sheet(in millions of Rupiah)

DescriptionDecember 31

2009 2008 2007 2006 2005

ASSETSCURRENT ASSETSCash and cash equivalents 57,945 52,878 8,249 9,299 6,567Trade payables third parties 53,135 42,717 28,222 18,305 16,514Inventories 9,075 7,280 5,225 3,237 2,733Restricted time deposits 13,018 - - 1,758 2,028Prepaid expenses and other current assets 4,412 1,326 1,327 5,618 1,028Total cur rent assets 137,585 104,200 43,023 38,217 28,870

NON-CURRENT ASSETSFixed assets net of accumulated depreciation 204,681 201,431 123,499 113,441 116,206Guarantee deposits 4,346 2,600 2,148 1,517 791

Claims for tax refund 43 43 689 43 43Other non-current assets 323 339 109 119 136Total non-cur rent assets 209,393 204,413 126,445 115,120 117,176

TOTAL ASSETS 346,978 308,613 169,468 153,337 146,046

LIABILITIESCURRENT L IABILITIESBank loans - - - 6,827 -Trade payables third parties 37,635 24,975 17,757 12,354 9,616Other payables 13,108 34,423 3,676 5,806 13,480Taxes payable 12,162 11,857 4,599 2,202 1,296Accrued expenses 7,543 5,597 5,499 6,566 4,537Current maturities of long-term loans:

Bank loans 25,000 14,588 5,000 12,506 13,685Other loans - - 169 458 403

Total current liabi lit ies 95,448 91,439 36,700 46,720 43,017

NON-CURRENT L IABILITIESCustomers deposits 4,420 2,979 2,436 1,851 1,209Long-term bank loans net of current maturities 68,750 75,465 35,000 28,669 35,338Convertible bonds - - - 22,929 22,929Deferred tax liability net 6,590 5,195 5,049 3,956 3,153Estimated liability for employee benefits 3,929 2,810 1,969 1,604 1,156Total non-current liabilities 83,690 86,449 44,454 59,011 63,784

TOTAL LIABILITIES 179,138 177,888 81,154 105,731 106,802

SHAREHOLDERS EQUITYAuthorized, issued and fully paid 86,051 86,051 17,349 17,349 17,349Additional paid-in capital 350 350 30,123 30,123 30,123Advances for future stock subsription - - 38,928 16,000 16,000

Retained earnings 81,440 44,325 1,913 (15,865) (24,227)TOTAL SHAREHOLDERS EQUITY 167,840 130,725 88,313 47,606 39,244

TOTAL LIABILITIES AND SHAREHOLDERS EQUITY 346,978 308,613 169,468 153,337 146,046


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Profit and loss s tatement(in millions of Rupiah)

Description 12 months

2009 2008 2007 2006 2005

Net sales 485,920 383,553 250,513 193,027 143,203Cost of goods sold 263,821 222,360 145,660 111,579 83,924Gross prof it 222,099 161,193 104,853 81,448 59,280Operating expenses:

Selling 113,068 83,360 62,190 49,608 35,578General and administrative 20,735 16,166 12,703 11,550 10,305

Total operating expenses 133,803 99,526 74,894 61,158 45,883Income from operations 88,295 61,667 29,959 20,290 13,397Other income (expenses)Sales of scrap 5,517 3,981 2,875 1,928 1,731Interest income 1,328 661 170 281 252Gain (loss) on sale of fixed assets net 51 (21) 3 96 (17)Interest expense (12,356) (5,268) (6,741) (9,562) (6,124)Gain (loss) on foreign exchange net (1,932) (414) 16 (61) 649Others net (412) (180) (83) (124) (469)Other expenses net (7,804) (1,242) (3,760) (7,440) (3,978)Income before income tax 80,491 60,425 26,199 12,849 9,419Income tax expense:

Current 21,981 17,867 7,328 3,684 3,008Deferred 1,396 146 1,092 804 737Total 23,376 18,013 8,421 4,487 3,745

Net income 57,115 42,412 17,778 8,362 5,674

3. Business risks

Any industry is subject to various risks that can affect a companys operations, which also applies to the Company.In conducting its business activities, the Company faces the following business risks :

Risks relating to operational activities

(i) Product contamination in pre-production, during production and at distribution(ii) Short shelf life of the products(iii) Availability of wheat as raw material of flour

(iv) Availability of energy supply(v) Risk of labor strikes(vi) Risk relating to availability of spare parts

Risks relating to market conditi ons and sales

(i) Foreign exchange fluctuations(ii) Competition

Risks relating to government polic ies and social environment

(i) Increase of regional/provincial minimum wage(ii) Economic, political and social stability(iii) Preservative and halal issues(iv) Natural disaster.

The complete description of the Companys business risks are set out in Chapter V of this Prospectus.


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4. Initial public offering

The Company is conducting an initial public offering of 151,854,000 shares with a nominal value of Rp100 per share,at an offering price of Rp1,275 per share, which must be paid in full upon submission of SSF.

The shares offered in the Offering are new shares from shares under portfolio. These shares shall provide theirholders equal and similar rights in all respects with the Companys issued and fully paid up shares, including therights to dividend distributions.

The capital structure of the Company prior to and after the Offering will be as follows :

Description

Pre-Offering Post-Offering

Number ofShares

Par Value(Rp)

% Number ofShares

Par Value (Rp) %

Authorized capital 3,440,000,000 344,000,000,000 3,440,000,000 344.000.000.000

Subscribed and fully paid up capital:

- Bonlight Investments Limited

- Treasure East Investments Limited

- Sojitz Corporation

- Shikishima Baking Co. Ltd.

- Public

Total

344,202,400344,202,40086,050,60086,050,600

-

860,506,000

34,420,240,00034,420,240,0008,605,060,0008,605,060,000

-

86,050,600,000

40401010

-

100

344,202,400344,202,40086,050,60086,050,600

151,854,000

1,012,360,000

34,420,240,00034,420,240,0008,605,060,0008,605,060,000

15,185,400,000

101,236,000,000

34.034.08.58.5

15.0

100.0Shares under portfolio 2,579,494,000 257,949,400,000 2,427,640,000 242,764,000,000

A more detailed explanation of the Offering is presented in Chapter I of this Prospectus.

5. Prospects and strategy

There are ample business opportunities in food and drinks in Indonesia. The Indonesian population, purchasingpower and economic growth are significant factors in the food business. During an economic crisis the food industrycan still grow. Increase of purchasing power and change of eating pattern, particularly in the cities where practicaleating pattern is desired, will increase demand for bread.]

The Company implements the following strategy in its business development:

- Implementing supply chain management;- Using SAP as enterprise resources planning software;

- Opening factories in other areas in Indonesia to meet the needs for quality, halal, clean and hygienic products;

- Producing new products, be it bread and bread-based snacks;

- Selecting appropriate distribution channels that can distribute the Companys products quickly and accurately.

- Maintaining a mutually beneficial relationship with its customers;

- Showing its consumer the cleanliness of the Companys production facilities and the Companys efforts toimplement good manufacturing practice and sanitation;

- Expanding by opening factories in locations near its consumer.

6. Dividend polic y

All of the Companys issued and paid-up shares, including the Shares offered in this Offering, have the same rightsand entitlements and are equal in all respects, including with respect to rights to dividend distributions.

In accordance with the prevailing laws, dividend distributions are approved by shareholders in an annualshareholders meeting based on proposal from the Board of Directors. The Companys articles of association statethat dividends can only be distributed in accordance with the Companys financial capacity based on decision takenin an annual shareholders meeting. The Board of Directors may amend the dividend policy from time to time withthe approval from an annual shareholders meeting.


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The Company plans to distribute cash dividends at least once a year. Without prejudice to the Companys financialcondition and the right of an annual shareholders meeting to otherwise determine based on the Companys articlesof association, the amount of cash dividend to be distributed is related to the Companys profits in the relevant fiscalyear. The Companys management plans to propose an annual dividend distribution of a maximum of 30% of theCompanys net profit in the relevant fiscal year.

7. Use of pr oceeds

The proceeds of the Offering, less expenses connected with the Offering, shall be used based on the followingpriorities :

1. Approximately 75% for development of new factories;2. Approximately 25% for repayment of bank loans.

A more detailed explanation of the use of proceeds is presented in Chapter II of the Prospectus.


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I. OFFERING

The Company is conducting an initial public offering of 151,854,000 shares with a nominal value of Rp100 per share,at an offering price of Rp1,275 per share, which must be paid in full upon submission of SSF. The total value of theOffering is Rp193,613,850,000.

The shares offered in the Offering are new shares from shares under portfolio. These shares shall provide theirholders equal and similar rights in all respects with the Companys issued and fully paid up shares, including therights to dividend distributions.

PT NIPPON INDOSARI CORPINDO Tbk.

Line of Business:Establish factory and produce various types of bread

Domiciled in Cikarang, Bekasi

Head Office:Jababeka Industrial Estate

Jl. Jababeka XII A, Block W No. 40-41, Cikarang, BekasiTel (021) 8935088, Fax: (021) 8935286, 8935473

Website : www.sariroti.com

Factories:

Cikarang :Jababeka Industrial EstateJl. Jababeka XII ABlock W No. 40-41Cikarang, Bekasi

Tel: (021) 8935088Fax: (021) 8935286, 8935473

Cikarang :Jababeka Industrial EstateJl. Jababeka XVII B

Block U No. 33Cikarang, Bekasi

Pasuruan :PIER Industrial EstateJl. Rembang Industri Raya No. 28

Pasuruan 67152East Java

Tel: (0343) 740388Fax: (0343) 740387

THE MAJOR RISK FACING THE COMPANY IS THE RISK RELATING TO PRODUCT CONTAMINATION, FROMRAW MATERIALS, DURING PRODUCTION AND AT DISTRIBUTION. THE COMPLETE BUSINESS RISKS OFTHE COMPANY ARE SET OUT IN CHAPTER V OF THIS PROSPECTUS.

The Company was incorporated under the name PT Nippon Indosari Corporation by Deed of Establishment No. 11 dated

March 8, 1995, as amended by Deed of Amendment of Articles of Association No. 274 dated April 29, 1995, both drawnup before Benny Kristianto, SH, Notary in Jakarta, which have been ratified by the Minister of Law and Human Rights(formerly Minister of Justice) pursuant to Decree No. C2-6209 HT.01.01.Th.95 dated March 18, 1995, registered in theDistrict Court of Bekasi No 264 and 265 dated September 14, 1995, and published in the State Gazette of the Republic ofIndonesia No. 94 dated November 24, 1995, Supplement No. 9729/1995.


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The Deed of Establishment, which contains the Companys articles of association, have been amended by the followingdeeds:

1. Deed of Amendment of Articles of Association No. 23 dated July 7, 1997, drawn up before Benny Kristianto, SH,Notary in Jakarta, which has been ratified by and reported to the Minister of Law and Human Rights (formerlyMinister of Justice) pursuant to Decree No. C2-8.943 HT.01.04 TH.97 dated September 2, 1997, registered in theCompany Register at the Office of Company Register of the District of Bekasi under agenda No. 37/BH.10.07/X/1997dated October 31, 1997, and published in the State Gazette of the Republic of Indonesia No. 4 dated January 13,1998, Supplement No. 268/1998, that has been revised by the State Gazette of the Republic of Indonesia No. 11dated February 6, 2001, Supplement No. 268a/2001. This deed approves the amendments to Articles 2, 3 and 4 ofthe Companys articles of association.

2. Deed of Meeting Resolution No. 5 dated July 23, 2003, drawn up before Ukon Krisnajaya, SH, Notary in Jakarta,which has been ratified by the Minister of Law and Human Rights (formerly Minister of Justice and Human Rights)pursuant to Decree No. C-19350.HT.01.04.TH.2003 dated August 14, 2003, registered in the Company Register atthe Office of Company Register of the District of Bekasi under agenda No. 418/BH.10.07/X/2003 dated October 9,2003, and published in the State Gazette of the Republic of Indonesia No. 85 dated October 24, 2003, SupplementNo. 10575/2003. This deed approves the increase of the Companys authorized capital, confirmation of theCompanys boards and change of the Companys name from PT Nippon Indosari Corporation to PT Nippon IndosariCorpindo. Notice of change of the name of the Company has been received and registered by BKPM pursuant toBKPM letter No. 228/B2/A6/2003 dated September 4, 2003, regarding the Change of the Name of the Company.

3. Deed of Meeting Resolution No. 3 dated June 7, 2005, drawn up before Ukon Krisnajaya, SH, Notary in Jakarta,which has been ratified by the Minister of Law and Human Rights pursuant to Decree No. C-19324HT.01.04.TH.2005 dated July 13, 2005, registered in the Company Register at the Office of Company Register of theDistrict of Bekasi No. 546/BH.10.07/XI/2005 dated September 21, 2005, and published in the State Gazette of theRepublic of Indonesia No. 104 dated December 30, 2005, Supplement No. 1234/2005. This deed approves theamendments to Articles 11.3(a), 11.3(b) and 11.6(b) on the Responsibility and Authority of the Board of Directors.

4. Deed of Meeting Resolution No. 1 dated July 1, 2008, drawn up before Ukon Krisnajaya, SH, Notary in Jakarta,which has been ratified by the Minister of Law and Human Rights pursuant to Decree No. AHU-65556.AH.01.02.Tahun 2008 dated September 18, 2008, registered in the Company Register No. AHU

0087323.AH.01.09.Tahun 2008 dated September 18, 2008, and published in the State Gazette of the Republic ofIndonesia No. 92, Supplement No. 23590/2008, on increase of capital and amendment to entire articles ofassociation in accordance with Law No. 40/2007 on Limited Liability Company.

5. Deed of Meeting Resolution No. 17 dated December 30, 2009, drawn up before Ukon Krisnajaya, SH, Notary inJakarta, which has been reported to the Minister of Law and Human Rights by Receipt of Notice of Change ofCompany Data No. AHU-AH.01.10-03769 dated February 12, 2010, and registered in the Company Register No.AHU-0011453.AH.01.09.Tahun 2010 dated February 12, 2010. This deed approves the cancellation of Deed ofMeeting Resolution No. 10 dated November 16, 2009, the change of the Companys Board of Directors and Board ofCommissioner and the sale of shares belonging to Bonlight Investments Limited to Treasure East InvestmentsLimited.

In relation to the Offering, the Company amended its articles of association in compliance with articles of association for

listed companies and changed the name of the Company to PT Nippon Indosari Corpindo Tbk by Deed No. 86 datedFebruary 24, 2010, drawn up before FX Budi Santoso Isbandi, SH, Notary in Jakarta, which has been ratified by theMinister of Law and Human Rights pursuant to Decree No. AHU.12936.AH.01.02.Tahun 2010 dated March 12, 2010,and registered in the Company Register No. AHU-0019036.AH.01.09.Tahun 2010 dated March 12, 2010.


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As of the date of this Prospectus, the Companys capital structure and shareholding are as follows:

Assuming all shares offered in this Offering are subscribedm the Companys proforma capital structure andshareholders shall become as follows:

DescriptionPar value Rp100 per share

No. of shares Par value (Rp) Percentage

Authorized capital 3,440,000,000 344,000,000,000Issued and paid-up capital:

- Bonlight Investments Limited

- Treasure East Investments Limited

- Sojitz Corporation

- Shikishima Baking Co. Ltd.

- PublicTotal issued and paid-up capital

344,202,400344,202,40086,050,60086,050,600

151,854,0001,012,360,000

34,420,240,00034,420,240,0008,605,060,0008,605,060,000

15,185,400,000101,236,000,000

34.034.08.58.5

15.0100.0

Shares in portfolio 2,427,640,000 242,764,000,000

Simulatenously with the listing of Shares from the Offering of 151,854,000 shares or 15% of the Companys issuedand paid-up capital after the Offering, the Company shall also list all shares that have been issued prior to theOffering of 860,506,000 shares or 85% of the Companys issued and paid-up capital after the Offering. As such, the

total number of the Companys shares in IDX is 1,012,360,000 shares or 100% of the issued and paid-up capital afterthe Offering.

The Company does not plan to issue or list other shares and/or other securities that can be converted into shareswithin twelve months from the Effective date of this Offering. Should the Company decide to do so in the future, theCompany shall follow the provisions of the prevailing regulations.

Employee Stock Allocation (ESA)

The ESA program shall be implemented in accordance with Bapepam Regulation No. IX.A.7, Attachment to Decreeof the Chairman of Bapepam No. KEP-45/PM/2000 dated October 27, 2000, on Responsibilities of AllotmentManager in Subscription and Allotment of Securities in a Public Offering, which allows up to 10% of the Sharesoffered to the public to be owned by employees. The Company has decided to implement the ESA program to all of

the Companys employees, which shall be administered in the Offering through special orders with the followingconditions:

1. The number of shares allocated is up to 15,185,500 shares;2. Payment for shares ordered by employees shall be made in cash.

Shares offered in the ESA program shall originate from the fixed allocation portion. Should the order under the ESAprogram is less than 15,185,500 shares, the remaining shares shall be offered to the public.

DescriptionPar value Rp100 per share

No. of shares Par value (Rp) Percentage

Authorized capital 3,440,000,000 344,000,000,000Issued and paid-up capital:Bonlight Investments Limited 344,202,400 34,420,240,000 40Treasure East Investments Limited 344,202,400 34,420,240,000 40Sojitz Corporation 86,050,600 8,605,060,000 10Shikishima Baking Co., Ltd 86,050,600 8,605,060,000 10

Total issued and paid-up capital 860,506,000 86,050,600,000 100

Shares in portfolio 2,579,494,000 257,949,400,000


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II. USE OF PROCEEDS

The proceeds of the Offering, less expenses connected with the Offering, will be used based on the followingpriorities:

1. Approximately 75% for development of new factories.

The Company expands its business by opening new factories to increase capacity and penetrate other regionsin Indonesia. The new factories to be opened are located in Semarang and Medan. If the funds required todevelop these factories are not met by the proceeds of the Offering, the Company will use bank financing tocomplete the expansion.

2. Approximately 25% for repayment of bank loans.

Lender: PT Bank Central Asia TbkOutstanding: Rp65,000,000,000Interest rate: 1% below prime rateMaturity date: July 21, 2014Note: Terms and conditions of the loan can be seen in Chapter III on Indebtedness

In accordance with Bapepam-LKs Circular No. SE-05/BL/2006 dated September 29, 2006, on Disclosure ofExpenses in a Public Offering, the total expenses incurred by the Company in the Offering is approximately 3% of thetotal proceeds of the Offering, consisting of:

- Underwriting fee: 0.75%- Management fee: 0.75%- Selling fee: 0.50%- Capital market supporting entities and professionalsL 0.48% consisting of

Legal counsel: 0.10%

Auditor: 0.28%

Appraiser: 0.05%

Registrar: 0.02% Notary: 0.03%

- Others: 0.52% .

According to Bapepams Regulation No. X.K.4, Attachment to the Decree of the Chairman of Bapepam No. Kep-27/PM/2003 dated July 17, 2003, on Report of the Realization of the Use of Proceeds from a Public Offering, theCompany shall periodically report the realization of the use of proceeds from the Offering to Bapepam-LK and shallaccount for the same to the Companys shareholders in a general meeting of shareholders.

Should at any time in the future the Company intend to amend its plan for the use of proceeds from the Offering, theCompany shall first report such intention to Bapepam-LK by stating the grounds and considerations for suchamendment and shall obtain prior approval for the amendment of the use of proceeds from the Companysshareholders in a general meeting of shareholders.

The use of proceeds of the Offering shall be implemented in accordance with the prevailing Capital Marketregulations.


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III. INDEBTEDNESS

Based on the Companys financial statements for the year ending December 31, 2009, which has been audited bythe Public Accounting Firm Purwantono, Suherman & Surja (previously Purwantono, Sarwoko & Sandjaja), amember of Ernst & Young Global Limited, with an unqualified opinion, the Company has a total indebtedness ofRp179,138 million with the following details:

(in millions of Rupiah)Descript ion Balance as of December 31, 2009

CURRENT LIABILITIESTrade payables third parties 37,635Other payables 13,108Taxes payable 12,162Accrued expenses 7,543Current maturities of long-term loans 25,000Total current liabiliti es 95,448

NON-CURRENT LIABILITIESCustomers deposits 4,420Long-term bank loans net of current maturities 68,750Deferred tax liability net 6,590Estimated liability for employee benefits 3,929

Total non-current liabilit ies 83,690TOTAL LIABILITIES 179,138

1. Trade payables third parties

Trade payables to third parties arising from purchases of raw materials and packaging materials amounted toRp37,635 million as of December 31, 2009.

2. Other payables

Other payables arising from transportation and distribution services, construction of a new plant and purchases ofmachinery and equipment amounted to Rp13,108 million as of December 31, 2009.

3. Taxes payable

Taxes payable as of December 31, 2009, amounted to Rp12,162 million, with the following details:

(in millions of Rupiah)

Descript ion Balance as of December 31, 2009

Income taxes:Article 21 233Article 23 156Article 25 962Article 26 67Article 29 10,744

Total 12,162

4. Accrued expenses

Accrued expenses as of December 31, 2009, amounted to Rp7,543 million, with the following details:



Promotion expenses 2,502Transportation and distribution 1,884Royalty fees 1,591Electricity, gas and water 921Others (below Rp500 million each) 646

Total 7,543


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5. Customers deposits

Customers deposits amounted to Rp4,420 million as of December 31, 2009.

6. Bank loans

The following are details of the bank loans:



PT Bank Central Asia Tbk 68,750PT Bank Resona Perdania 25,000Total 93,750Less: current maturities 25,000Long-term portion 68,750

PT Bank Central Asia Tbk (BCA)

Based on notarial deed No. 40 dated July 21, 2008, of Veronica Sandra Irawaty Purnadi, SH, BCA agreed to grantinvestment credit facility to finance the Companys expansion in Cikarang. The facilility has a maximum amount ofRp75,000 million, a certain portion of which has been used to issue Letter of Credit. The loan was available forwithdrawal until June 2009 and is payable in monthly installments from August 2009 through July 2014 and carriedan interest rate ranging from 11.75% to 14% pa in 2009.

The loan is secured by land at Block U-33, Jababeka Industrial Estate, Cikarang, Bekasi, together with themanufacturing plant, machinery and equipment as well as production supporting facilities thereon with net book valueamounting to Rp86,696 million as of December 31, 2009.

Under the terms of the loan agreement, the Company is required to obtain prior written approval from BCA withrespect to, among others:

a. Obtaining new loan and/or acting as guarantor in whatever form and/or pledging the Companys assets while theCompany is in violation of its financial covenants;

b. Lending money, including but not limited to its affiliated companies, other than in the normal course of business;c. Entering into transactions with another party, including but not limited with its affiliated companies, on a non-

arms length basis;d. Submitting application for bankruptcy or deferral of payments to the relevant authority (court of law);e. Making investments in or opening new businesses other than the Companys existing business activities;f. Divesting the Companys fixed assets or major assets that constitute more than 20% of the Companys equity or

10% of the Companys revenues, whichever is lower, unless in the normal course of business;g. Conducting merger, consolidation, takeover or dissolution of the Company;h. Amending the status of the Company and the articles of association on objectives of the Company and reduction

of capital.

The Company is also required to maintain the following financial ratios:

1.

Debt to equity ratio of not more than 2x2. EBITDA (earnings before interest, taxes, depreciation and amortization) to interest and monthly principalrepayment ratio of not less than 1.25x

3. Current ratio of not less than 1x.

As of December 31, 2009, the Company has met all the required financial ratios. In relation to the Offering, theCompany has obtained approval from BCA to change the status of the Company by letter No. 10138/GBK/2010dated February 23, 2010. There are no negative covenants that put the public shareholders at a disadvantage.


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PT Bank Resona Perdania (BRP)

On June 15, 2007, the Company obtained a loan amounting to Rp40,000 million from BRP to finance the Companysexpansion. This non-revolving loan is payable in quarterly installments of Rp2,500 million starting on September 18,2008, through June 18, 2012, and is secured by a fiduciary transfer of ownership on certain machinery andequipment of the Company with net book value amounting to Rp23,840 million as of December 31, 2009. The loancarried an interest rate ranging from 8.81% to 12.43% in 2009.

Under the terms of the loan agreement, the Company is required to obtain prior written approval from BRP withrespect to, among others:

a. Obtaining new loan and/or acting as guarantor in whatever form and/or pledging the Companys assets;b. Lending money, including but not limited to its affiliated companies, other than in the normal course of business;c. Conducting consolidation, takeover, investment, dissolution or declaring bankruptcy in the Commercial Court;d. Amending the status of the Companye. Entering into transactions with another party, including but not limited with its affiliated companies or

shareholders, on a non-arms length basis.

As of December 31, 2009, the Company has met all the loan requirements. In relation to the Offering, the Companyhas obtained approval from BRP to amend the terms of loan by letter No. 29/CRD/II/2010 dated February 11, 2010.There are no negative covenants that put the public shareholders at a disadvantage.

7. Deferred tax liability net

The following are details of the deferred tax liability of Rp6,590 million as of December 31, 2009:



Deferred tax assetEstimated liability for employee benefits (982)

Deferred tax liabilityFixed assets 7,573

Total 6,590

8. Estimated liability for employee benefits

The following are details of the deferred tax liability of Rp3,929 million as of December 31, 2009:



Present value of defined benefit obligation 5,848Unamortized balance of the non-vested past service costs (454)Net cumulative unrecognized actuarial loss (1,466)

Total 3,929

The components of the net defined benefit costs recognized in the profit and loss statement and the amount ofdefined benefits in the balance sheet has been calculated by independent actuaries PT Bumi Dharma Aktuaria with

projected-unit-credit method in its report dated January 12, 2010, based on the following principal assumptions:

Normal retirement age: 55 years2009 discount rate: 10.5% paSalary increment rate: 8% paMortality rate: CSO 80.


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As of the date of th is Prospectus, the Company has no overdue liabi li ti es.

The Companys management hereby states that as of December 31, 2009, the Company has no otherliabilities and commitments other than what has been disclosed in this Prospectus and in the Companysconsolidated financial statements as attached to this Prospectus.

Between December 31, 2009, and the date of the independent auditors report and between the date of theindependent auditors report and the effective date of the Registration Statement, the Company has nomaterial new liabilities, other than trade payables and other liabilities arising out of the normal co urse of thebusiness.

The Companys management believes that it will be able to meet all its liabilities in accordance with theirterms.


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IV. MANAGEMENT DISCUSSION AND ANALYSIS

The following discussion and analysis of the Companys financial condition and results of the operations should beread in conjunction with the Companys audited financial statements and the notes thereto as set out in Chapter XVIof this Prospectus on Independent Auditors Report and the Companys Financial Statements. The Companysfinancial statements for the years ending December 31, 2009, 2008 and 2007, have been audited by the PublicAccounting Firm Purwantono, Suherman & Surja (previously Purwantono, Sarwoko & Sandjaja), a member of Ernst& Young Global Limited, with unqualified opinions.

1. Overview

The Company was incorporated in 1995 and is currently headquartered in Jababeka Industrial Estate, Cikarang,Bekasi. It is a company engaged in the business of bread, cake and other food manufacturing. The Companycarries out its business activities by establishing bread factory, producing, marketing and selling toast bread andother types of bread.

At its incorporation, the Company had two production lines, one for production of toast bread and one for productionof sweet bread. In 2001, in line with the growth of sales, the Company doubled its production capacity by adding twoproduction lines namely for toast bread and sweet bread.

In November 2005, the Company opened its second factory in Pasuruan, East Java, by installing two productionlines. Production output of this factory is marketed in East Java, Central Java and Bali. In 2009, the Companyadded one production line of sweet bread in Pasuruan.

In December 2008, the Company opened its third factory with two production lines in Block U, Jababeka IndustrialEstate, Cikarang, Bekasi, West Java, one for production of toast bread and one for production of sweet bread. Inaddition, the Company built an auditorium in Block U factory for consumer visit so they can directly view theCompanys production process that incorporates hygienic and halal (prepared in the manner prescribed by Islamiclaw) methods.

2. Financials

The following table shows the Companys financial position based on the financial statements for the years endingDecember 31, 2009, 2008 and 2007, that have been audited by the Public Accounting Firm Purwantono, Suherman& Surja (previously Purwantono, Sarwoko & Sandjaja), a member of Ernst & Young Global Limited, with unqualifiedopinions.

Balance sheet



2009 2008 2007

AssetsCurrent assets 137,585 104,200 43,023Non-current assets 209,393 204,413 126,445

Total assets 346,978 308,613 169,468

Liabilities and shareholders equityCurrent liabilities 95,448 91,439 36,700Non-current liabilities 83,690 86,449 44,454Total liabi liti es 179,138 177,888 81,154

Total shareholders equity 167,840 130,725 88,313Total liabil ities and shareholders equity 346,978 308,613 169,468


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Statements of income(in millions of Rupiah)

Description12 months

2009 2008 2007

Net salesCost of goods soldGross profit

Operating expensesIncome from operationsOther expenses netIncome before income taxIncome tax expenseNet income

485,920263,821222,099

133,80388,295(7,804)80,49123,37657,115

383,553222,360161,193

99,52661,667(1,242)60,42518,01342,412

250,513145,660104,853

74,89429,959(3,760)26,1998,421

17,778

2.1. Sales, costs and profi t

The following chart shows the Companys sales and profits over the years:

Sales and ProfitsFor the 12-month periods ending December 31, 2007, 2008 and 2009


250,513

383,553

485,920

104,853

161,193

222,099

29,95961,667

88,295

17,77842,412

57,115

2007 2008 2009

Sales Gross Profit Operating Profit Net Income

2.1.1. Net sales

The following is the breakdown of the Companys net sales based on products:



2009 2008 2007

Sweet bread - Sari Roti 287,326 210,063 129,633Toast bread - Sari Roti 230,932 193,725 133,097Sweet bread - Boti 8,527 10,291 9,888

Toast bread - Boti 4,965 5,019 4,387Sari Cake 2,614 2,726 -Others 1,863 673 427

Gross sales 536,227 422,496 277,432

Sales returns (50,307) (38,943) (26,919)

Net sales 485,920 383,553 250,513


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Sales comparison for the years 2009 and 2008

The Companys gross sales for 2009 was Rp536,227 million, of which 53.6% came from Sari Roti sweet bread and43.1% came from Sari Roti toast bread.

Gross sales increased by 26.9% in 2009 from Rp422,496 million in 2008 due to the increase in sales volume as aresult of the Companys promotional activities.

Net sales for 2009 was Rp485,920 million, a 26.7% increase from Rp383,553 million in 2008. Sales returns for 2009was Rp50,307 million or 9.4% from gross sales, similar to the 2008 level of 9.2% or Rp38,943 million. The Companyhas been able to maintain the balance between production volume and market demand such that the rate of productreturns have been stable.

Sales comparison for the years 2008 and 2007

The Companys gross sales for 2008 was Rp422,496 million, of which Sari Roti sweet bread contributed 49.7% orRp210,063 million and Sari Roti toast bread contributed 45.9% or Rp193,725 million.

Gross sales for 2008 increased 52.3% from Rp277,432 million in 2007 as a result of the Companys decision toincrease selling price due to the increase of raw material prices.

The Companys net sales for 2008 was Rp383,553 million, a 53.1% increase from Rp250,513 million in 2007. Whilethe nominal amount of sales returns increased by 44.7% in 2008 to Rp38,493 million from Rp26,919 million in 2007,the ratio of sales returns to gross sales actually decreased from 9.7% in 2007 to 9.2% in 2008, resulting in a higherrate of growth in net sales compared to the rate of growth of gross sales.

2.1.2. Cost of goods sold

The following is the breakdown of the Companys cost of goods sold:



2009 2008 2007

Raw materials and packaging materials 201,686 176,632 110,517Direct labor 11,162 9,090 6,688Manufacturing overhead:

Depreciation 13,663 8,276 7,690Utilities 11,190 8,157 6,366Professional fees 8,247 6,453 4,603Repairs and maintenance 7,124 4,804 4,815Royalty fees 6,317 4,986 3,257Others 4,483 4,113 1,841Total manufacturing overhead 51,024 36,788 28,572

Total manufacturing costs 263,872 222,510 145,776

Finished goods inventory:Balance, beginning of year 444 294 177Balance, end of year (494) (444) (294)

Cost of goods sold 263,821 222,360 145,660

Cost of goods sold comparison for the years 2009 and 2008

Cost of goods sold for 2009 was Rp263,821 million, an 18.6% increase from Rp222,360 million in 2008, which cameas a result of the increase of raw material prices and volume of raw material purchase as demand for the Companysproducts increased.


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The biggest contributor to cost of goods sold are raw materials and packaging materials, which constituted 76.4% ofcost of goods sold or Rp201,686 million. This represented an increase of 14.2% from Rp 176,632 million in 2008.

Cost of goods sold comparison for the years 2008 and 2007

Cost of goods sold for 2008 was Rp222,360 million with raw materials and packaging materials representing thelargest contributor of 79.4% or Rp176,632 million.

Total cost of goods sold experienced a significant increase in 2008 by 56.2% from Rp145,660 million in 2007 as aresult of raw materials and packaging materials cost increase from Rp110,517 million to Rp176,632 million or by59.8% due to the limited supply of raw materials in 2008. In addition, direct labor also increased quite significantly by35.9% from Rp6,688 million in 2007 to Rp9,090 million in 2008 due to the significant increase of the regionalminimum wage in 2008 in accordance with the inflation rate.

2.1.3. Gross profit

Gross profit comparison for the years 2009 and 2008

Gross profit for 2009 was Rp222,099 million, a 37.8% increase from Rp161,193 million in 2008. This came as aresult of a 26.7% growth in net sales, which is higher than the increase in cost of goods sold of 18.6%, improvinggross margin from 42.0% in 2008 to 45.7% in 2009.

Gross profit comparison for the years 2008 and 2007

Gross profit for 2008 was Rp161,193 million, a 53.7% increase from Rp104,853 million in 2007. This came as aresult of a 53.1% growth in net sales, which is higher than the increase of cost of goods sold of 52.6%, improvinggross margin slightly from 41.9% in 2007 to 42.0% in 2008.

2.1.4. Operating expenses and operating prof it

The following is the breakdown of the Companys operating expenses:

(in millions of Rupiah)Description

12 months

2009 2008 2007Selling expenses 113,068 83,360 62,190General and administrative expenses 20,735 16,166 12,703

Total operating expenses 133,803 99,526 74,894

Operating prof it 88,295 61,667 29,959

Operating expenses and operating profit comparison for the years 2009 and 2008

Operating expenses for 2009 was Rp133,803 million, of which the biggest contributor was selling expenses ofRp113,068 million or 84.5% of total operating expenses.

In 2009 operating expenses increased by 34.4% from Rp99,526 million in 2008, as a result of the increase inadvertising and promotion expenses by 57.8% from Rp24,933 million in 2008 to Rp39,337 million in 2009. Generaland administrative expenses increased by 28.3% from Rp16,166 million in 2008 to Rp20,735 million in 2009, drivenby the increase of salaries and benefits by 35.7% from Rp8,581 million in 2008 to Rp11,645 million in 2009.

Operating profit for 2009 was Rp88,295 million or a 43.2% increase from Rp61,667 million in 2008 as a result of thesales growth of the Company. Operating margin improved to 18.2% in 2009 from 16.1% in 2008.


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Operating expenses and operating profit comparison for the years 2008 and 2007

Operating expenses for 2008 was Rp99,526 million, of which the biggest contributor was selling expenses ofRp83,360 million or 83.8% from total operating expenses.

In 2008 operating expenses increased by 32.9% from Rp74,894 million in 2007, as a result of the increase in sellingexpenses, particularly from expired products inventory expenses by 56.5% from Rp13,615 million in 2007 toRp21,304 million in 2008 due to raw material price increase that affected the cost of goods sold for expired products.The increase of selling expenses was also driven by the increase of advertising and promotion expenses by 37.9%from Rp18,074 million in 2007 to Rp24,933 million in 2008.

Operating profit for 2008 was Rp61,667 million, a 105.8% increase from Rp29,959 million in 2007 due to thesignificant sales growth that was higher than the increase in expenses. Operating margin was 16.1% in 2008, animprovement from 12.0% in 2007.

2.1.5. Net p rofi t

Net profit comparison for the years 2009 and 2008

Net profit for 2009 was Rp57,115 million, a 34.7% increase from Rp42,412 million in 2008. Net margin in 2009 was11.8%, an improvement from 11.1% in 2008.

Other expenses increased by 528.3% in 2009 from Rp1,242 million in 2008 to Rp7,804 million, due to the significantincrease of interest expense by 134.5% from Rp5,268 million in 2008 to Rp12,356 million in 2009, even though theCompany had an increase in sales from expired products by 38.6% to Rp5,517 million from Rp3,981 million, whichcame as a result of the increase in sales returns.

The increase in net profit was attributable to the sales growth that is not accompanied by the same rate of growth inexpenses, therefore net margin also improved.

Net profit comparison for the years 2008 and 2007

Net profit for 2008 was Rp42,412 million, a 138.6% from Rp17,778 million in 2007. Net margin improved to 11.1% in2008 from 7.1% in 2007.

Other expenses decreased by 67.0% from Rp3,760 million in 2007 to Rp1,242 million in 2008, as a result of theincrease in sales of expired products by 38.5% from Rp2,875 million in 2007 to Rp3,981 million in 2008 due to theincrease in the volume of expired products. In addition, interest expense declined by 21.9% from Rp6,741 million in2007 to Rp5,268 million in 2008.

The increase of net profit was mainly attributed to the increase of sales. The increase in expenses was not as highas the increase of sales, therefore net profit experienced a significant increase that resulted in a higher net margin.


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2.2. Assets, liabilities and equity

The following chart shows the Companys assets, liabilities and equity over the years:

Assets, L iabil it ies and EquityAs of December 31, 2007, 2008 and 2009


169,468

308,613

346,978

81,154

177,888 179,138

88,313

130,725

167,840

2007 2008 2009

Assets Liabilities Equity

2.2.1. Assets

The following are the details of the Companys assets:



2009 2008 2007

Current assets :Cash and cash equivalents 57,945 52,878 8,249Trade receivables third parties 53,135 42,717 28,222Inventories 9,075 7,280 5,225Restricted time deposits 13,018 - -Prepaid expenses and other current assets 4,412 1,326 1,327

Total current assets 137,585 104,200 43,023Non-current assets:

Fixed assets net of accumulated depreciation 204,681 201,431 123,499Guarantee deposits 4,346 2,600 2,148Claims for tax refund 43 43 689Other non-current assets 323 339 109

Total non-current assets 209,393 204,413 126,445

Total assets 346,978 308,613 169,468

Assets comparison as of December 31, 2009, and December 31, 2008

Total assets as of December 31, 2009, was Rp346,978 million, a 12.4% increase from Rp308,613 million as ofDecember 31, 2008, which came as a result of the increase of trade receivables due to the higher sales. In addition,

the Company opened a restricted time deposit for the purpose of letter of credit opening in 2009.

The Company placed an order for oven and top sealer equipment from Sanko Machinery Co. Ltd. and DaiseyMachinery Co. Ltd., Japan, with total order of JPY137.75 million. The Company placed a time deposit in BCA for thepurpose of issuance of letter of credit by Sumitomo Mitsui Banking Corporation and Mizuho Bank Ltd. for thepurchase of the equipment.


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Assets comparison as of December 31, 2008, and December 31, 2007

Total assets as of December 31, 2008, was Rp308,613 million, an 82.1% increase from Rp169,468 million as ofDecember 31, 2007, which came as a result of a significant increase in cash and cash equivalents as well asincreases in trade receivables and fixed assets. The increase of cash and cash equivalents was due to a new long-term loan and the increase of cash receipts from buyers as the Companys sales increased. The Company madecapital expenditure in 2008 for the construction of Block U factory in Jababeka Industrial Estate, Cikarang, and thepurchase of the machinery and equipment for the factory.

2.2.2. Liabiliti es

The following are the details of the Companys liabilities:



2009 2008 2007

Current liabilities:Trade payables third parties 37,635 24,975 17,757Other payables 13,108 34,423 3,676Taxes payable 12,162 11,857 4,599

Accrued expenses 7,543 5,597 5,499Current maturities of long-term loans:

Bank loans 25,000 14,588 5,000Other loans - - 169

Total current liabi liti es 95,448 91,439 36,700

Non-current liabilities:Customers deposits 4,420 2,979 2,436Long-term bank loans net of current maturities 68,750 75,465 35,000

Deferred tax liability net 6,590 5,195 5,049Estimated liability for employee benefits 3,929 2,810 1,969

Total non-current liabi liti es 83,690 86,449 44,454

Total liabil ities 179,138 177,888 81,154

Liabilities comparison as of December 31, 2009, and December 31, 2008

Total liabilities as of December 31, 2009, were Rp179,138 million, a slight increase of 0.7% from Rp177,888 millionas of December 31, 2008. Even though trade payables increased quite significantly in 2009 by 50.7% fromRp24,975 million in 2008 to Rp37,635 million in 2009 as a result of the higher operational activities, other payablesdecreased significantly by 61.9% from Rp34,423 million to Rp13,108 million due to the payables relating to the BlockU factory construction and equipment purchase in 2008 that were recorded as other payables.

Liabilities comparison as of December 31, 2008, and December 31, 2007

Total liabilities as of December 31, 2008, were Rp177,888 million, a 119.2% from Rp81,154 million as of December31, 2007, due to the 125.1% increase of bank loans from Rp40,000 million to Rp90,053 million. The loan was usedto acquire fixed assets relating to the construction of Block U factory in the Jababeka Industrial Estate, Cikarang,Bekasi, and by the same token, other payables consisting of payables arising from the construction of the newfactory and the acquisition of machinery and equipment increased.


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2.2.3. Equity

The following are the details of the Companys equity account:



2009 2008 2007

Issued and paid-up capital 86,051 86,051 17,349Additional paid-in capital 350 350 30,123Advances for future stock subscription - - 38,928Retained earnings 81,440 44,325 1,913

Total equi ty 167,840 130,725 88,313

Equity comparison as of December 31, 2009, and December 31, 2008

Total equity as of December 31, 2009, was Rp167,840 million, a 28.4% increase from Rp130,725 million, whichcame as a result of an 83.7% increase of retained earnings from Rp44,325 million in 2008 to Rp81,440 million in2009.

Equity comparison as of December 31, 2008, and December 31, 2007

Total equity as of December 31, 2008, was Rp130,725 million, a 48.0% increase from Rp88,313 million, which cameas a result of a significant increase in retained earnings by 2,217.0% due to the additional capital from conversion ofconvertible bond and advances for future stock subscription and additional paid-up capital that increased total paid-up capital of the Company to Rp86,051 million.

2.3. Solvency and profitability

2.3.1. Solvency

Solvency is the ability to meet all obligations using all assets or equity. Solvency is measured by comparing totalliabilities to total equity (equity solvency ratio) and total liabilities to total assets (asset solvency ratio). TheCompanys equity solvency ratios as of December 31, 2009, 2008 and 2007 were 1.07x, 1.36x and 0.92x,

respectively, while asset solvency ratios as of December 31, 2009, 2008 and 2007 were 0.52x, 0.58x and 0.48x,respectively.

2.3.2. Profitability

Profitability is measured, amongst others, by net margin, return on average assets and return on average equity.These ratios show the Companys ability to generate profit during a certain period of time:

- Net margin is the ratio of net profit to revenues

- Return on average assets is the ratio of asset turnover in generating profit

- Return on average equity is the ratio of net profit to average equity.


2009 2008 2007

Net margin 11.8% 11.1% 7.1%Return on average assets 17.4% 17.7% 11.0%Return on average equity 38.3% 38.7% 26.2%


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2.4. Liquidity

The Companys liquidity is reflected in cash flows as detailed in the following table:



2009 2008 2007

Net cash provided by operating activities 56,084 83,854 20,416Net cash used in investing activities (32,782) (88,694) (13,190)Net cash provided by (used in) financing activities (16,302) 49,883 (8,292)Net increase (decrease) in cash and cash equivalents 5,068 44,629 (1,050)Cash and cash equivalents at beginning of year 52,878 8,249 9,299Cash and cash equivalents at end of year 57,945 52,878 8,249

3. Risk management

In facing the risks described in Chapter V Business Risks, the Company applies the following risk managementpolicies:

- The Company continues to find suppliers for all types of raw materials. The Research and Development division

conducts quality tests with the objective of having an alternative supply should there be a delivery disruptionfrom the main suppliers while ensuring that the product quality is maintained.

- The Company anticipates risk of competition by continuously increasing brand awareness for the Companysproducts so that they continue to be demanded by the consumer. In addition, the Company continues toupgrade the quality of its products and create new products that meet the consumer taste.

- To reduce the risk of foreign exchange fluctuations relating to the purchase of machinery, the Company setsaside reserves in the currency needed for this purpose.

- Should there be a shortage in energy supply, the Company uses a modified oven with burner that can useliquified petroleum gas (LPG). In addition, the Company has power generator facilities for temporary electrictyoutages.

- The Company recognizes that labor is a key component to the Companys success, therefore the Companycontinues to attend to its employees needs. The Company has met all relevant Government labor regulationsand provides sufficient facilities to its employees to minimize the risk of labor strikes.

-The Companys Research and Development division continues to find alternative equipment from other suppliersto minimize dependency to the current machinery supplier.

- The Company conducts quality control in each step of its production process to minimize contamination risks.The quality contol process is described in Chapter VIII on Business and Prospect.

- To address issues relating to the Companys products, the Company provides explanations to the public throughthe media and invites consumer who wants to understand the Companys production process by providing anauditorium where consumer can see the Companys profile and production process. If needed, groups ofconsumer can visit the Companys factory and directly view the Companys production process.


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(vi) Risk relating to availability of spare parts

The Company uses equipment produced by certain suppliers that own the technology and patent rights over theirproducts. The Company needs to purchase spare parts from the equipment suppliers to replace broken or old spareparts. If the spare parts are not available, be it due to outdated technology or due to discontinued equipment, theCompany would have to purchase them from other equipment suppliers with specifications that may not be the sameas what is required. The possibility of difficulty in obtaining spare parts could increase repair and maintenance coststhat will in turn impact the Companys profitability.

Risks relating to market conditi ons and sales

(i) Foreign exchange fluctuations

Some of the Companys main raw materials are influenced, directly and indirectly, by foreign exchange fluctuations,such as flour, sugar and yeast. In addition, spare parts for machinery and packaging materials are also dependenton the Rupiah exchange rate to foreign currencies. On the other hand, the Companys sales are denominated inRupiah.

A significant change in the Rupiah exchange rate against foreign currencies may result in the increase of prices of

certain raw materials, packaging materials and spare parts, which may not be accompanied by the increase of theCompanys selling price and therefore has a negative impact on the Companys profitability.

(ii) Competition

The Companys products that are sold through retailers accounted for more than 50% of the Companys sales in2009. With the trend of retailers producing and selling its own bread under its own brand, the Company faces therisk of competition from the retailers as they try to maximize the sale of their own products.

In addition, the Company faces competition from boutique bakeries and home industry that even though are ofsmaller scale but are numerous with their own target consumer.

Risks relating to government polic ies and social environment

(i) Increase of regional/provincial minimum wage

An increase in the regional/provincial minimum wage that is higher than inflation rate will affect the Companysproduction costs. The contribution of direct labor to production costs for the year ending December 31, 2009, wasapproximately 5% as the Company still relies in labor in its production process. The Company has tried to pass onthe increase in the regional/provincial minimum wage to the Companys selling price. However, if the regionalminimum wage increased significantly and is not properly managed, the Companys production costs will alsoincrease significantly.

(ii) Economic, political and social stability

Indonesias economic, political and social conditions have an influence on the Companys operating activities.

Economic, political and social instability may result in labor or mass riots that are outside the control of the Company.In addition, these may impact the purchasing power of the Companys consumer that in turn will result in the declineof the Companys sales. Economic, political and social instability will negatively impact the Companys operations,performance and business prospects.

(iii) Preservative and halal issues

As the Companys products have a shelf life of more than one day, the Company faces the risks of issues on the useof preservatives to make the Companys products last for a few days. These issues will paint a negative picture onthe Companys raw materials and production process. In addition, issues could also develop over the halal status of


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the Companys products. Should these issues arise, there is a possibility that demand for the Companys productsbecomes lower and in turn results in the decline of the Companys sales.

(iv) Natural disaster

The Companys factories are located in Indonesia and distribution of the Companys products is directed to theIndonesian market. Indonesia is a country that is susceptible to natural disasters such as earthquake, volcanoeruption, floods and others. Should there be a natural disaster in Indonesia, the Companys production process willbe disrupted. In addition, there will be disruptions in the delivery of raw materials by suppliers and in the distributionof the Companys products to retailers or to stock points. Transportation problems due to natural disasters thatdisrupt distribution of the Companys products will result in a shorter shelf life where the products will have to beimmediately sold and consumed.


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VI. MATERIAL EVENTS SINCE THE DATE OF THE INDEPENDENT AUDITORS REPORT

There are no material events since May 3, 2010, the date of the independent auditors report for the Companysfinancial statements for the year ending December 31, 2009, that has been audited by the Public Accounting FirmPurwantono, Suherman & Surja (previously Purwantono, Sarwoko & Sandjaja), a member of Ernst & Young GlobalLimited, with an unqualified opinion, that would require disclosure in this Prospectus.


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VII. INFORMATION ABOUT THE COMPANY

1. Brief history

The Company was incorporated under the name PT Nippon Indosari Corporation by Deed of Establishment No. 11 datedMarch 8, 1995, as amended by Deed of Amendment of Articles of Association No. 274 dated April 29, 1995, both drawnup before Benny Kristianto, SH, Notary in Jakarta, which have been ratified by the Minister of Law and Human Rights(formerly Minister of Justice) pursuant to Decree No. C2-6209 HT.01.01.Th.95 dated March 18, 1995, registered in theDistrict Court of Bekasi No 264 and 265 dated September 14, 1995, and published in the State Gazette of the Republic ofIndonesia No. 94 dated November 24, 1995, Supplement No. 9729/1995.

The Deed of Establishment, which contains the Companys articles of association, have been amended by the followingdeeds:

1. Deed of Amendment of Articles of Association No. 23 dated July 7, 1997, drawn up before Benny Kristianto, SH,Notary in Jakarta, which has been ratified by and reported to the Minister of Law and Human Rights (formerlyMinister of Justice) pursuant to Decree No. C2-8.943 HT.01.04 TH.97 dated September 2, 1997, registered in theCompany Register at the Office of Company Register of the District of Bekasi under agenda No. 37/BH.10.07/X/1997dated October 31, 1997, and published in the State Gazette of the Republic of Indonesia No. 4 dated January 13,1998, Supplement No. 268/1998, that has been revised by the State Gazette No. 11 dated February 6, 2001,Supplement No. 268a/2001. This deed approves the amendments to Articles 2, 3 and 4 of the Companys articles ofassociation.

2. Deed of Meeting Resolution No. 5 dated July 23, 2003, drawn up before Ukon Krisnajaya, SH, Notary in Jakarta,which has been ratified by the Minister of Law and Human Rights (formerly Minister of Justice and Human Rights)pursuant to Decree No. C-19350.HT.01.04.TH.2003 dated August 14, 2003, registered in the Company Register atthe Office of Company Register of the District of Bekasi under agenda No. 418/BH.10.07/X/2003 dated October 9,2003, and published in the State Gazette of the Republic of Indonesia No. 85 dated October 24, 2003, SupplementNo. 10575/2003. This deed approves the increase of the Companys authorized capital, confirmation of theCompanys boards and change of the Companys name from PT Nippon Indosari Corporation to PT Nippon IndosariCorpindo. Notice of change of the name of the Company has been received and registered by BKPM pursuant to

BKPM letter No. 228/B2/A6/2003 dated September 4, 2003, regarding the Change of the Name of the Company.

3. Deed of Meeting Resolution No. 3 dated June 7, 2005, drawn up before Ukon Krisnajaya, SH, Notary in Jakarta,which has been ratified by the Minister of Law and Human Rights pursuant to Decree No. C-19324HT.01.04.TH.2005 dated July 13, 2005, registered in the Company Register at the Office of Company Register of theDistrict of Bekasi No. 546/BH.10.07/XI/2005 dated September 21, 2005, and published in the State Gazette of theRepublic of Indonesia No. 104 dated December 30, 2005, Supplement No. 1234/2005. This deed approves theamendments to Articles 11.3(a), 11.3(b) and 11.6(b) on the Responsibility and Authority of the Board of Directors.

4. Deed of Meeting Resolution No. 1 dated July 1, 2008, drawn up before Ukon Krisnajaya, SH, Notary in Jakarta,which has been ratified by the Minister of Law and Human Rights pursuant to Decree No. AHU-65556.AH.01.02.Tahun 2008 dated September 18, 2008, registered in the Company Register No. AHU0087323.AH.01.09.Tahun 2008 dated September 18, 2008, and published in the State Gazette of the Republic of

Indonesia No. 92, Supplement No. 23590/2008, on increase of capital and amendment to entire articles ofassociation in accordance with Law No. 40/2007 on Limited Liability Company.

5. Deed of Meeting Resolution No. 17 dated December 30, 2009, drawn up before Ukon Krisnajaya, SH, Notary inJakarta, which has been reported to the Minister of Law and Human Rights by Receipt of Notice of Change ofCompany Data No. AHU-AH.01.10-03769 dated February 12, 2010, and registered in the Company Register No.AHU-0011453.AH.01.09.Tahun 2010 dated February 12, 2010. This deed approves the cancellation of Deed ofMeeting Resolution No. 10 dated November 16, 2009, the change of the Companys Board of Directors and Board ofCommissioner and the sale of shares belonging to Bonlight Investments Limited to Treasure East InvestmentsLimited.


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3. Shareholding evoluti on

Establishment 1995

Pursuant to Deed of Establishment No. 11 dated March 8, 1995, as amended by Deed of Amendment of Articles ofAssociation No. 274 dated April 29, 1995, both drawn up before Benny Kristianto, SH, Notary in Jakarta, the Companyscapital structure and shareholding at establishment are as follows:

1997

Pursuant to Deed of Amendment of Articles of Association No. 23 dated July 7, 1997, drawn up before Benny Kristianto,SH, Notary in Jakarta, the Companys shareholders approved:i. an increase of the Companys authorized capital from Rp3,536,000,000 to Rp11,050,000,000,ii. an increase of the Companys issued and paid-up capital from Rp3,536,000,000 to Rp11,050,000,000, andiii. a change in the Companys par value per share from Rp100,000 to Rp55,250.

All of the increase in the issued and paid-up capital of Rp7,514,000,000 has been paid in cash by the Companysshareholders in proportion to their shareholding. The increase of capital has been approved by BKPM by letter No.687/III/PMA/1997 dated May 30, 1997.

Based on the above change, the Companys capital structure and shareholding became as follows:

2001

Pursuant to Deed of Meeting Resolution No. 5 dated August 3, 2001, drawn up before Suryati Moerwibowo, SH,Notary in Jakarta, the Companys shareholders approved the transfer of all of the shares of PT Sari Indoroti of 160,000shares to Bonlight Investments Limited, which transfer was executed through Deed of Share Sale and Purchase No. 6

dated August 3, 2001, drawn up before Suryati Moerwibowo, SH, Notary in Jakarta. The transfer of shares has beenreported to the Minister of Law and Human Rights on September 12, 2001, and received approval from BKPM by letterfrom the Deputy Chairman for Investment Services of BKPM on Approval of a Change in Capital Structure No.1009/III/PMA/2001 dated August 1, 2001.

DescriptionPar value Rp100,000 per share

%No. of shares Par value (Rp)

Authori zed capital 35,360 3,536,000,000

Issued and paid-up capital:PT Sari Indoroti 28,288 2,828,800,000 80Nissho Iwai Corporation 3,536 353,600,000 10Shikishima Baking Co., Ltd 3,536 353,600,000 10

Total issued and paid -up capi tal 35,360 3,536,000,000 100

Shares in portfol io - -

DescriptionP