Dividend Policy

Dividend
Policy

According to the applicable regulations in Indonesia, the decision on dividend distribution is determined by the shareholders’ resolution in the Annual General Meeting of Shareholders (AGM), based on recommendations from the Company’s board of directors. Dividends can only be distributed if the Company has a positive retained earnings balance. All net profit, after deducting reserves as stipulated in the Limited Liability Company Law, will be distributed to shareholders as dividends, unless otherwise decided in the AGM.
The determination of the reserve allocation and the use of net profit are set by the AGM. Dividend distribution can only be carried out if the Company has a positive retained earnings balance. Following the initial public offering, the Company’s Management has adopted a dividend payment policy of up to 30% (thirty percent) of the consolidated net profit for the current year, after accounting for mandatory reserves, starting from the fiscal year 2000. Dividend payments are made in cash to all shareholders at least once a year, while still considering the Company’s financial condition and AGM decisions.
According to Law No. 40 of 2007 on Limited Liability Companies, the decision to pay dividends refers to the provisions in the Company’s Articles of Association and requires approval from the shareholders in the General Meeting of Shareholders (GMS), in line with recommendations from the Company’s board of directors. The dividend distribution provisions under this law (Article 72) are as follows:
    1. The Company may distribute interim dividends before the end of the fiscal year as long as this is stipulated in the Company’s Articles of Association.
    2. Interim dividends, as referred to in paragraph (1), may be distributed if the Company’s net assets are not less than the amount of issued and paid-up capital plus mandatory reserves.
    3. Interim dividends, as referred to in paragraph (2), must not disrupt or prevent the Company from fulfilling its obligations to creditors or interfere with the Company’s activities.
    4. Interim dividend distribution is determined based on a decision by the board of directors after obtaining approval from the Board of Commissioners, considering the provisions in paragraphs (2) and (3).
    5. If, after the fiscal year ends, the Company incurs losses, the interim dividends that have been distributed must be returned by the shareholders to the Company.
    6. The board of directors and the Board of Commissioners will be jointly responsible for the Company’s losses if shareholders cannot return the interim dividends.

the same rights and privileges as existing shareholders. These rights include:

 

    1. Attending and voting in the GMS.
    2. Receiving dividend payments and the remainder of the assets from liquidation.
    3. Exercising other rights in accordance with the Limited Liability Company Law and the provisions in the Company’s Articles of Association.

 

It should be noted that the Company has not distributed dividends in previous years due to having a negative retained earnings balance.

Gedung Gold Coast, Tower Liberty Lt. 16 A- H Jl. Pantai Indah Kapuk, RT.6, RW.2, Kamal Muara, Penjaringan, Jakarta Utara 14470

corp.secretary@fap-agri.com

(021) 50205811

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