cagr: 42.2% cagr: 42.9% 21 - multipolar-group.com · 2017-12-19 · the main business pillars, such...

16th Fl. Menara MatahariJl. Palem Raya Bulevar No. 7Lippo Karawaci 1100Tangerang 15811Indonesia

+62-21 546 0011, 55 777 000+62-21 546 [email protected]

www.multipolar.com

EMB

RA

CIN

G O

PP

OR

TUN

ITIES A

HEA

D2010 A

NN

UA

L REPO

RT

ASSETS

INCREASE 1,146x

in millions Rupiah (Rp)

CAGR: 42.2%

14,016,686

12,2281989 (IPO)

2010

EQUITY

INCREASE 1,251x

in millions Rupiah (Rp)

CAGR: 42.9%

4,841,331

3,8661989 (IPO)

2010

21 years

21 years

CONTE NTS

Our Vision and Mission

Our Journey

Financial Highlights

Stock Highlights

Message from the President Commissioner

Board of Commissioners

Message from the President Director

Board of Directors

Business Pillars

Human Resources Development

Good Corporate Governance

Audit Committee’s Report

Management’s Discussion & Analysis

Corporate Data

Achievements

Audit Committee

Responsibility for 2010 Annual Report

2010 Financial Report of PT Multipolar Tbk

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4

6

8

12

14

18

20

28

30

34

36

40

41

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45

1

EMBRACING OPPORTUN ITI ES AHEAD | PT MULTIPOLAR TBK 2010 ANNUAL REPORT

VISIONTO BECOME THE PREMIERE SERVICES

COMPANY DELIVERING HIGH VALUE TO ITS STAKEHOLDERS, WITH POSITIVE IMPACT

ON PEOPLE’S LIVES

MISSIONEMBRACING STRATEGIC BUSINESS

PORTFOLIOS THROUGH CONTINUOUS EXPANSION AND INVESTMENT, FOR

SUSTAINABLE GROWTH AND MAXIMIZED ENTERPRISE VALUE

OU R VIS ION & M ISS ION

VISION & MISSION

2


3


OU R JOU R N EY

MULTIPOLAR IN 2010

OUR JOURNEY

THE PER IOD BETWEEN 1975 – 2009

MARCH SEPTEMBER OCTOBER DECEMBER

• Reestablished PT Multipolar Technology to strengthen corporate IT Business• Significant Income for Revenue and Profitability

• Growth in the Outsourcing Business• Received Asia Pacific Outstanding Entrepreneurship Award• Upgraded to Oracle Certified Advance Partner

• Significant Revenue and Profitability • Further growth in the Outsourcing Business

• Strong Leader in the IT Business• Largest Holding Company in Retail Business• Renewal of ISO 9001: 2000 Certification • 4th Rights Issue

• Focus on Server, Solution and Service • Significant Progress in IT Outsourcing• Strengthened Equity with 3rd Rights Issue

• Total Enterprise Solution Provider• Established Consulting Business• Obtained ISO 9001: 2000 Certification (2004)

2009

2008

2007

• System Integrator • Business Solutions and Application Solutions Provider

• The first company to obtain ISO 9001:1994• Acquired PT Matahari Putra Prima Tbk, Indonesia’s largest retailer • 2nd Rights Issue

• First IT company listed in the JSX (1989)• 1st Rights Issue

First IBM Business Partner in Indonesia

Pioneer in Banking and Financial Applications computerization

Electronics retailer

Establishment of Multipolar

1998-2000

1997

1989-1996

1986

1982

1976

4 Dec 1975

2006

2005

2001-2004

DIVESTMENT OF PT MATAHARI DEPARTMENT STORE (“MDS”)

• Divestment of MDS, operator of department stores

• 9.5 x EBITDA

• Total transaction value of Rp. 7.2 trillion

STRATEGIC PARTNERSHIP WITH HCL

• Established synergy with HCL Technologies, prominent

global India-based IT services provider

• Secured opportunity in IT Outsourcing market, predicted

to grow to USD 5 billion in the coming 5 years.

PUBLIC LISTING OF PT MULTIFILING MITRA INDONESIA TBK (“MMI”)

• PT Multifiling Mitra Indonesia Tbk (“MMI”) is a

pioneer in outsourcing business for document

management

• Listing of MMI in the Indonesia Stock Exchange on

29 December 2010

• Secured a significant step towards the expansion and

future development of MMI

ACQUISITION OF ROBBINZ DEPARTMENT STORE IN CHINA

• Opportunity for non-organic growth

• Operated department stores in Tianjin, Chengdu

and Yangzhou

• Acquisition value amounted to HKD 345,000,000

OUR JOURNEY

4


5


F I NANC IAL H IG H LIG HTS

FINANCIAL H IGHLIGHTS FINANCIAL H IGHLIGHTS

( In Mi l l ions Rupiah )

RESULT OF OPERATION

Sales from Direct Purchase, Services and Other Operating Revenues

Consignment Sales

Cost of Consignment Sales

Commission from Consignment Sales

Net Sales

Gross Profit

Income from Operations

Other Charges

Income Before Tax Benefit (Expense)

Net Income

Number of Outstanding Shares (Shares)

Earnings per Share (In Full Rupiah)

BALANCE SHEET

Cash & Cash Equivalents

Short-term Investments

Accounts Receivable - Trade - Net

Inventories - Net

Total Current Assets

Investments in Associates and Other Long-Term Investments

Total Non-Current Assets

Total Assets

Total Current Liabilities

Total Non-Current Liabilities

Total Liabilities

Stockholder’s Equity

Working Capital-Net

RATIO

Gross Margin

Operating Margin

Return on Assets

Return on Equity

Current Ratio

Debt to Equity

Debt to Assets

WORKING CAPITAL TURN OVER (Days)

Accounts Receivable Turn-Over

Inventory Turn-Over

2010 2009 2008 2007 2006 PERFORMANCE IN 2010

Total Assets increased by 18.10% compared to the previous year. This significant increase was due to the increase in Cash and Cash Equivalents, resulting from the proceeds of PT Matahari Department Store (‘MDS’) divestment.

Equity amounted to Rp. 4.8 trillion, a significant increase of 205.1% from 2009 to 2010. This increase was mainly caused by the extraordinary income from the sale of MDS and the Rights Issue in May 2010 of Rp. 753.9 billion.

20.000

15.000

10.000

5000

0‘07 ‘09‘06 ‘08 ‘10

in billions (Rp)

TOTAL EQUITYTOTAL ASSETS

4,238,885

2,949,752

8,470,503

1,289,133

9,759,636

3,242,232

524,421

(729,939)

(263,667)

(196,509)

1,696,289,750

(115,85)

1,897,104

1,913,692

218,575

1,030,304

6,255,420

327,503

5,206,438

11,461,858

5,219,822

3,062,210

8,282,032

1,548,735

1,035,598

25.51%

4.13%

-1.71%

-12.69%

1.20x

2.60x

0.72x

6

40

3,436,588

2,399,806

6,933,519

1,036,782

7,970,301

2,689,059

436,131

(252,450)

214,175

61,317

1,696,289,750

36,15

2,813,019

958,300

201,987

944,886

5,264,948

415,818

4,641,688

9,906,636

2,439,858

3,969,285

6,409,143

1,797,837

2,825,090

25.93%

4.21%

0.62%

3.41%

2.16x

1.83x

0.65x

7

45

2,905,942

2,042,222

6,194,438

863,720

7,058,158

2,415,906

436,275

(273,821)

167,998

45,159

1,696,289,750

26,62

1,433,573

527,381

252,288

853,539

3,391,468

243,121

4,081,127

7,472,595

2,488,807

2,458,283

4,947,090

1,364,375

902,661

26.55%

4.79%

0.60%

3.31%

1.36x

1.96x

0.66x

10

47

2,102,528

1,615,771

5,027,934

3,506,196

9,050,914

486,757

9,537,671

2,171,431

15,895

(144,584)

(123,008)

2,830,626

5,599,472,739

505,52

3,043,788

2,038,600

225,004

1,057,447

6,993,267

1,385,820

7,023,419

14,016,686

3,705,603

1,810,532

5,516,135

4,841,331

3,287,664

19.47%

0.14%

20.19%

58.47%

1.89x

0.65x

0.39x

7

43

9,363,960

1,521,738

10,885,698

3,671,534

545,110

(212,660)

343,210

110,691

1,696,289,764

65,25

2,428,942

1,648,049

104,546

1,233,082

5,924,727

332,397

5,943,650

11,868,377

3,625,814

4,799,972

8,425,786

1,586,463

2,298,913

25.51%

3.79%

0.93%

6.98%

1.63x

2.45x

0.71x

3

42

6


7


STOCK H IG H LIG HTS

STOCK H IGHLIGHTS STOCK H IGHLIGHTS

SHARE PERFORMANCE 2010 2009

Earnings per Share (Rp)

Outstanding Shares (Shares)

Weighted Average Shares (Shares)

Book Value per Share (Rp)

SHAREHOLDERS 2010 2009

Cyport Limited

Grandhill Asia Limited

HSBC-Fund Services Clients A/C 500

Others/Public

SHARE PRICE PER QUARTER 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

2010

Highest (Rp)

Lowest (Rp)

Closing (Rp)

Volume (Shares)

2009

Highest (Rp)

Lowest (Rp)

Closing (Rp)

Volume (Shares)

HISTORY OF REGISTRATION OF SHARES ON THE INDONESIA STOCK EXCHANGE

Origin of Share Listing DateAdditional Number

of SharesTotal Outstanding Shares

After TransactionNominal Value Per

Share (Rp)

Initial Public Offering

Company Listing

Bonus Share (1:2)

Rights Issue I(1:3 @ Rp 1000)

Stock Split

Rights Issue I I(10:55 @ Rp 500)

Limited Public Offering

Rights Issue I I I(4:5 @ Rp 125)

Rights Issue IV(18:11 @ Rp 125)

Reverse Stock(4:1)

Rights Issue V(9:32 @ Rp 125)

6-Nov-89

16-Jul-90

9-Nov-92

12-Jul-96

1-Apr-97

14-Jul-97

27-Jul-00

24-Jun-05

8-Dec-06

12-Apr-10

14-Apr-10

3,428,000

8,000,000

22,856,000

102,852,000

137,136,000

1,508,496,000

89,000,000

2,339,710,000

2,573,681,000

6,031,252,940

3,428,000

11,428,000

34,284,000

137,136,000

274,272,000

1,782,768,000

1,871,768,000

1,871,768,000

2,339,710,000

4,211,478,000

1,871,768,000

4,913,391,000

6,785,159,000

467,942,000

1,228,347,890

1,696,289,890

467,942,000

1,228,347,890

6,031,252,940

7,727,542,830

109

57

69

3,039,611,000

50

50

50

1,322,000

270

65

98

1,603,511,500

72

50

57

1,354,261,500

137

87

128

571,934,500

97

53

86

2,160,801,500

380

130

300

4,788,937,500

91

58

59

1,351,051,500

2,082,264,644

390,069,444

434,063,444

4,821,145,298

7,727,542,830

26.95%

5.05%

5.62%

62.35%

1,828,329,929

342,500,000

-

4,614,329,631

6,785,159,560

26.95%

5.05%

68.00% Class A Shares

Class B Shares

Class A Shares

Class B Shares

Class A Shares

Class B Shares

Class A Shares

Class B Shares

Class C Shares

HISTORY OF DIVIDEND PAY-OUT

Payment Date Period AGM Date Dividend/share Outstanding Shares Total Dividend Pay-out

16-Nov-92

16-Nov-93

16-Nov-94

16-Nov-95

16-Nov-96

4-Jul-07

5-May-08

28-Jun-10

Jul 91-Jul 92

Jul 92-Jun 93

Jul 93-Jun 94

Jul 94-Jun 95

Jul 95-Jun 96

Jul 06-Jun 07

Jul 07-Jun 08

Jul 09-Jun10

11-Sep-92

11-Sep-93

11-Sep-94

11-Sep-95

11-Sep-96

23-May-07

19-Mar-08

14-May-10

240

35

45

55

16

1

1

2,15

11,428,000

34,284,000

34,284,000

34,284,000

137,136,000

6,785,159,000

6,785,159,000

7,742,542,830

2,742,720,000

1,199,940,000

1,542,780,000

1,885,620,000

2,194,176,000

6,785,159,000

6,785,159,000

16,614,217,085

1,000

1,000

1,000

1,000

500

500

500

505.47

7,727,542,830

5,599,472,739

865

65.25

6,785,159,000

1,696,289,764

935

@ Rp 500@ Rp 125

@ Rp 500@ Rp 125

@ Rp 2.000@ Rp 500

@ Rp 2.000@ Rp 500@ Rp 100

Class A Class B

Class A Class B

Class A Class B

Class AClass B Class C

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9


MESSAGE FROM THE PRESIDENT COMMISSIONER

Our valued Stakeholders and Customers,

The Board of Commissioners highly appreciates

the hard work and efforts of the Directors and

their teams. They have achieved a great deal in

2010. This year, PT. Multipolar Tbk (“Multipolar”)

rode the peak of the momentum wave such that

2010 is now known as the growth year.

With the growth of global economy reached

2.5% and Indonesian economy growing at

more than 6%, Multipolar recorded an amazing

performance in reaping the benefits of this

momentum. Some of the strategic moves

implemented by the Directors in 2010 include:

the fifth Rights Issue, the divestment of PT

Matahari Department Store (“MDS”), acquisition

of Robbinz Department Store in China and

the Initial Public Offering of its subsidiary, PT

Multifiling Mitra Indonesia Tbk (“MMI”).

During this period, Management has closely

observed the Company strategic actions by way

of thorough assessment of its opportunities,

maximize shareholder value and to minimize the

business risks. Other successes achieved came

from the contributions from subsidiaries, which

actively worked to increase customer base while

expanding the scope of products and services.

The main business pillars, such as PT. Matahari

Putra Prima Tbk (“Matahari”), as the Indonesian

prominent multi-format modern retailer,

remained to be the main engine of growth for

Multipolar in 2010. Divestment in the shares

ownership of Matahari subsidiary, MDS, earlier

in 2010 that booked a total transaction value of

Rp. 7.2 trillion, proof of Matahari’s capability to

achieve high value realization.

A number of business opportunities arising

from the implementation of free trade between

China and ASEAN has been anticipated by

the Management of Multipolar. Expansion of

its business scope, which is to diversify the

business portfolio by geographical areas, and

to improve access to the international market

was implemented by acquiring the Robbinz

Department Stores in China. This strategy is

aimed at penetrating the Chinese market with

its 1.6 billion residents and its consumer lifetsyle

that keeps developing, along with the steady

growth of its middle class segment.

Strategic alliances fostered with technology

partners in Information Technology (“IT”) was

the route chosen in ensuring growth in 2010.

The implementation of Total Enterprise Solution

combining software, hardware and services also

contributed as the business pillar to secure a

competitive edge. The Board of Commissioners

shared the conviction with the Directors that

the IT and Telecommunication industry will keep

growing in line with the demand to improve

business process for the sake of productivity,

while adhering to principles of caution and

appropriateness.

The trend to manage business by incorporating

the assistance (to companies requiring IT

Services) of outsourcing and the potentials of

the outsourcing business (for the Company)

has been appropriately responded by the

Management. This is evident in the growth of the

subsidiary PT Visionet International, with its IT

Outsourcing services (“IT Outsourcing”) available

in 40 cities across the country, combining

MESSAGE FROM THE PRESIDENT COMMISSIONER

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services that include Data Center, EDC equipment

operation, dekstop and ATM.

The availability of information and multimedia

entertainment has become a staple need for

people these days and it has become the growth

potential for PT First Media Tbk (“First Media”),

which this year further moved up to a higher

level with Wimax (Worldwide Interoperability for

Microwave Access), building a good number of

Wimax BTS sites across the Jabodetabek area.

The technology offered by First Media include

data transmission using 2.3 GHz broadband radio

frequency for the Jabodetabek, Banten and North

Sumatra areas. The leading-edge technology

is an investment for any company using such

technology, to engage and tap its potentials

for the rapidly increasing and increasingly

sophisticated Indonesian internet users.

In the field of document management (Record

Management Services) PT Multifiling Mitra

Indonesia Tbk (“MMI”) as the pioneer in this

field made a great leap in 2010, with an IPO at

the Indonesian Stock Exchange. The Indonesian

Stock Exchange is an appropriate platform for

future business development and to gain a wider

acceptance and credibility with the status as a

listed company.

The Board of Commissioners expresses their

appreciation to the Directors on their success

in developing and ability to materialize the

investment potentials and to reach the aim

“global operation, global coverage”, leading to

be the largest service company in Indonesia.

In applying the business strategy, the Board of

Commissioners ensures that Management abides

by the set of regulations enlisted in the corporate

vision and mission including the adherence to

the Corporate Good Governance, accountability

and transparency principles. The principle on

transparency by way of providing information to

the investors and stakeholders is performed to

maintain trust and credibility.

For this monitoring process, the Board is assisted

by the Audit Commitee, assessing and reviewing

the financial reports, procedures and policies

as well as presiding over regular meetings to

ensure that the Company runs in line with rules

and regulations.

The Board of Commissioners also extends its

appreciation for the commitment and consistency

in the implementation of Good Corporate

Governance (GCG) in both business processes

and adherence by the internal staffs. The

implementation of GCG is evident in the continued

efforts to enforce the rule that every staff needs

to abide by the provisions enshrined in the

GCG platform.

An earnest appreciation also goes for the

implementation for the Corporate Social

Responsibility (CSR) activities that in 2010

took the form of social activities such as

blood donations and aid for the victims of

natural disasters.

All year long, the Board of Commissioners has

been working hard to fulfill its duties to monitor

the policies implemented by the Directors to run

the company, as well as giving advice, strategic

business direction and policy formulation. The

Board of Commissioners conducts a regular

meeting with the Directors every three months to review the

performance of Multipolar, along with other meetings and circulated

written approvals.

In May 2010, the Annual Shareholder’s Meeting agreed to reappoint

the following members of the Board of Commissioners:

President Commissioner : Dr. Cheng Cheng Wen

Independent Commissioner : Mr. Jonathan L Parapak

Independent Commissioner : Dr. Isnandar Rahmat Ali, SE, MM

Commissioner : Mr. Benjamin J. Mailool

In June 2010 Mr Benjamin Mailool tendered his resignation

as Commissioner.

The Year 2010 was a year full of challenges. The achievement of the

Company strengthened the position of the Company in the industry

and demonstrated its capability to compete in the future. As a result,

Multipolar now has a stronger foundation and has good reasons to be

optimistic for the future.

As a closing remark, on behalf of the Board of Commissioners,

allow me to express my gratefulness to the Management for the

extraordinary leadership and for every staff member of Multipolar for

their unwavering support to keep the growth momentum. I would also

like to thank all the shareholders, suppliers, strategic partners and all

to our customers for the loyalty, trust and continued support. With all

your support we will be able to rise to the challenges of 2011.

Dr. Cheng Cheng WenPresident Commissioner

“ The Board of Commissioners expresses their appreciation to the Directors on their success in developing and ability to materialize the investment potentials and to reach the aim “global operation, global coverage”, leading to be one of the largest service companies in Indonesia.”

MESSAGE FROM THE PRESIDENT COMMISSIONERMESSAGE FROM THE PRESIDENT COMMISSIONER


12 13


Was appointed as a Commissioner of the Company

in 2000 and as the President Commissioner in 2002.

His over 30 years of international experience includes

extensive career at AT&T, USA, Bell Telephone

Manufacturing, Belgium, and Phillips Electronic China

Group, China. Currently, Dr. Cheng is also the President

Commissioner of PT Matahari Putra Prima, Tbk.

Dr. Cheng holds Master of Science and PhD degrees in

Electrical Engineering from Iowa State University, USA.

Jonathan L. ParapakIndependent Commissioner

Was appointed as a Commissioner of the Company

in 2000 and as the Independent Commissioner

since 2001. Mr. Parapak has an extensive career for

over 40 years. His professional career in Telecom

Australia and PT Indosat Indonesia has led him

to be one of the most recognized experts in the

Telecommunications industry and a respected

member of international organizations. Currently,

he is also an Independent Commissioner of PT First

Media Tbk and PT Matahari Putra Prima Tbk.

Mr. Parapak holds a Bachelor degree in Technology

and Master degree in Engineering Science from

University of Tasmania, Australia.

Dr. Isnandar Rachmat Ali, SE, MMIndependent Commissioner

Was appointed as the member of the

Board of Commissioner in 2008 as the

Independent Commissioner. Mr Isnandar

Rachmat Ali obtained his Doctoral Degree

(PhD) in Education Management from

Jakarta State University. He began his career

at various industrial companies. In 1980 –

1989 he was Vice President Director of

Bank Bhumy Bahari and from 1989-2001 he

was Vice President Director at Tokai Lippo

Bank. Since 1998 until now, he is active as a

lecturer at Krisnadwipayana University.

BOARD OF COMMISSIONERS BOARD OF COMMISSIONERS

BOAR D OF COM M ISS ION E RS

EMBRACING OPPORTUN ITI ES AHEAD | PT MULTIPOLAR TBK 2010 ANNUAL REPORTEMBRACING OPPORTUN ITI ES AHEAD | PT MULTIPOLAR TBK 2010 ANNUAL REPORT

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MESSAGE FROM THE PRESIDENT DIRECTOR

Our valued stakeholder,

It is indeed an honor for the Board of Directors

to present the annual report highlighting the

performance of the Company in 2010. Continuing

the company’s progress that underlined the positive

growth, Multipolar strived to continue its core

business and scored remarkable achievements. By

adhering to the annual business plan and applying

the Company’s strategic policies, Multipolar

managed to record breakthroughs, leading to be

one of the largest service groups in Indonesia.

In 2010, we sought new opportunities to leverage

on our investment, strengthen our equity level, and

boost future capabilities. We actively monitored

our subsidiaries, their business opportunities and

market shares. This year we conducted a number

of initiatives to increase our investment within

our subsidiaries, aimed at creating more powerful

synergies today as well as in the future.

The hard work has been rewarded. The operating

revenue was recorded at Rp. 11.2 trillon (including

consignment sales amounting to Rp. 2.1 trillion),

the largest contribution being made by PT. Matahari

Putra Prima Tbk. (“Matahari”). Net income reached

Rp. 2.8 trillion, as part of the significant income

from the divestment of the Matahari subsidiary,

PT. Matahari Department Store Tbk. (“MDS”) and

savings from borrowing costs from loans settled in

2010. The growth pillar was provided by Matahari

Food Business (“MFB”), with sales contribution of as

much as Rp. 7.6 trillion.

With the wealth of experience in the multiformat

modern retail business, Multipolar penetrated the

China market, which is six times larger in size than

that of Indonesia. Having similar economic and

consumption patterns, Multipolar ushered in a

new era of retail in China by acquiring Robbinz,

one of the more prominent department

stores in China. It was a breakthrough in

diversification initiatives, by adding an

investment portfolio in a country expected

to spur sales growth of as much as 14% in

2010, with the increasing market size that is

expected to grow from USD 2.2 trillion to USD

4.6 trillion by 2014. By the end of 2010 three

department stores have been in operation.

These are located in Chengdu, Yangzhou,

including the flagship store in Tianjin,

encompassing an area of 50,000 m2.

This new initiative confirmed further the

Company’s ability to achieve at the same time

demonstrating the capabilities of Multipolar to

improve the value to its stakeholders.

Multipolar has closely monitored the

Indonesian economic landscape, one that

allows greater room for growth, as evidenced

by the size of government investment in

infrastructure and investment by foreign

companies in Indonesia. This fundamental

progress in the economy will certainly be

followed by the increased demand for

Information Technology (“IT”). Taking into

consideration the enormous success Multipolar

had in the previous years as the leading IT

integrator, Multipolar sees increased prospects

for IT development, especially in the field of

banking and telecommunications.

These potentials and challenges have been

dealt with seriously by conducting an internal

reorganization. The fundamental change

MESSAGE FROM THE PRESIDENT DIRECTOR

16


17


was achieved by improving its product range

and services, as well as adding the number of

appropriately-skilled human resources.

The reorganization was aimed at preparing

Multipolar to profit from such lucrative

Indonesian economic potentials. The exercise

has cemented Multipolar’s position, that it

can maintain its status as the market leader in

providing professional IT services and business

solutions in Indonesia.

We believe the number of new opportunities

in IT Outsourcing (“IT Outsourcing”) would be

on the rising trend. In this field of business, the

Company’s subsidiary, PT Visionet International

(“VisioNet”), demonstrated remarkable

performance. The trend for many companies

to delegate parts of their duties to outsourcing

companies has been the driver of growth for this

business. Major services provided by Visionet

include the operation of equipment such as

EDC, Desktop, ATM and Data Center. Visionet

expanded further its network infrastructure

across the country. Currently operating through

its 40 branches across the archipelago, in 2010

Visionet grew twice as much and recorded

recognitions such as garnering ISO 9001:2008

for maintenance and operation for EDC and

DSN, as well as IT Data Center.

PT Multipolar Technology as the subsidiary of

the Company fostered a collaboration with HCL

Technologies, one of the top IT services companies

in India. The collaboration is aimed at responding to

the immense growth of the IT outsourcing market,

expected to grow to USD 5 billion in the coming

five years.

Multipolar is also cognizant of the growth potentials

of PT First Media Tbk (“First Media”), the subsidiary

enggaged in cable television, broadband internet

services and data communication in Indonesia.

First Media is the first in the Jabodetabek area to

build over 80 BTS sites for Wimax (“Worldwide

Interoperability for Microwave Access”). This

project was undertaken to capitalize on the ever

increasing number of internet users in Indonesia,

who have demonstrated great advancement in

user’s sophistication and knowledge. The Hybrid

Fiber Optic Coaxial network has been improved. The

application of WIMAX with the data transmission

using the radio frequency band of 2.3 Ghz marked a

new era in information exchanges. This technology

certainly becomes an asset for any company

wishing to invest on it as the competitive edge in

the future. The great achivement is foreseen to

continue in 2011.

The Company has strengthened its capital base by

conducting a Right Issue, upon the endorsement

of the stakeholders in March 2010. The proceeds

received from the Rights Issue were used by the

Company’s subsidiary PT Reksa Puspita Karya to

use its pre-emptive rights to bid for the shares of

PT First Media Tbk’s Rights Issue. In May 2010 the

Company’s capitalization in PT Visionet Internasional

was increased. The rest of the proceeds were used

as working capital and also to settle loans that were

due to mature.

PT Multifiling Mitra Indonesia Tbk. (“MMI”) is a

pioneer in Record Management Services. It currently

operates four data filing and storage centers in

locations such as Lippo Cikarang (21,000 m2),

Surabaya (5,000 m2), Medan (1,500 m2) and

Bandung (5,000 m2). With an ISO 9001:2008

certification and leading-edge technology, MMI provides

one-stop service for bank data storage in the form of

e-document and hardcopy. It has won the trust of clients

made up of reputable institutions and banks.

This year MMI managed to record a significant

breakthrough by conducting an Initial Public Offering

in the Indonesian Stock Exchange. Having realized the

enormous potential for the banking sector to use more

data management services, the Initial Public Offering is an

additional credential to make MMI capture further lucrative

businesses, gaining credibility, transparency, and financial

strength as a listed company in the Indonesian Stock

Exchange.

The year 2010 is a meaningful year for Multipolar not only

for the many achievements that it recorded but also for the

fact that the year was the transformation year to the one

of the largest service providers in Indonesia. With assets

that have grown over a thousand fold over the past two

decades, we are more confident and believe that we are

strongly positioned for continued future success.

The sustained success that was achieved this year has

been contributed by the sheer hard work and dedication

of the entire Multipolar staff, along with the continued

effort of the Management to improve performance of

all divisions. In addition, the full support and loyalty on

the part of strategic partners and customers also played

a significant role. On behalf of the Board of Directors,

we would like to express our gratitude to all the staff

of Multipolar for their dedication. To all our Customers,

Principals, Stakeholders, Board of Commissioners, and

Audit Commitee we would like to extend our gratitude

for their unwavering support and trust. Our achievement

in 2010 is a solid evidence of the great synergy that all

parties mentioned above have forged.

Jeffrey Koes WonsonoPresident Director

“ The year 2010 is a meaningful year for Multipolar not only for the many achievements that it recorded but also for the fact that the year was the transformation year as one of the largest service provider in Indonesia. We are more confident and believe that we are strongly positioned for further future success.”

MESSAGE FROM THE PRESIDENT DIRECTOR MESSAGE FROM THE PRESIDENT DIRECTOR

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BOAR D OF D I R ECTORS

BOARD OF DIRECTORS BOARD OF DIRECTORS


Appointed as President Director in 2002.

Mr. Wonsono started his career with various

multinational joint venture banks including

PT Bank Multicor, PT Bank LTCB Central Asia

before joining Lippo Group in 1994. Currently

Mr. Wonsono is also Commissioner of PT

Matahari Putra Prima Tbk. Mr. Wonsono

received a Bachelor degree in Marketing from

the Centre for Business Studies, England and

Master degree in Business Administration from

Golden Gate University, USA.

Harijono SuwarnoDirector

Appointed as Director in 2004. Mr. Suwarno

graduated from Trisakti University Jakarta,

Telecommunication Department of the Faculty of

Engineering. He started his career as workshop

engineer in PT Guna Elektro. In 1977 – 1981

he was Workshop Manager in PT Centronix.

Later he joined PT Panorama Timur Jaya and

held various positions with the last position

as Director. Currently he is the President

Commissioner of PT Telenet.

Antonius Agus SusantoDirector

Appointed as Director in 1990.

Mr. Susanto began his professional

career as Sales Representative for

PT Komputa Agung, before joining

the Company in 1994. Mr. Susanto

received a Bachelor degree in Electrical

Engineering from Faculty of Engineering

of Trisakti University and Master

degree in Marketing Management from

University of Pelita Harapan.

Reynold Pena OngDirector

Appointed as Director in 2008. Mr. Ong obtained his

MBA degree from the University of the Phillipines

and BSc degree from De LaSalle University,

Phillipines. He has more than 25 years of working

experience, among others PepsiCo Inc and Analog

Devices, Phillipines. In 1993 he joined with PT Lippo

Karawaci and in 1998 was with Jardine Davies Inc,

Phillipines. Between 2001 – 2005 he was Chief

Financial Officer of PT Natrindo Telepon Seluler and

as Director/CFO of PT Bank Lippo Tbk.

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B US I N ESS P I LLARS

The Indonesian economic growth in 2010 allowed progress for business

in many sectors. Almost unaffected by the global crisis and better than

expectations in terms of growth rate, it clearly provided the stability that

every business player expected. The conducive business climate helped

along the government a great deal in implementing a series of infrastructure

development to strengthen the Indonesian economic pillars. The renewed

confidence from international business and investors on the fundamentals

of the Indonesian economy resulted in substantial investments.

Multipolar currently enjoys the support provided

by its three business units focused on customer

satisfaction: Information Technology Business

Unit which is a market leader in Information

Technology, Retail Business Unit through the

Company’s subsidiary, PT Matahari Putra Prima

Tbk (“Matahari”), a prominent retailer which

is also the largest in Indonesia, known for

its successful expansion of its hypermarket

concept as well as strategic alliance in

department store network, and the Multimedia

Business Unit through its strategic investment

of PT First Media Tbk (“First Media”), that

operates the largest broadband Hybrid Fibre

Coaxial in Indonesia.

INFORMATION TECHNOLOGY BUSINESS UNIT

The year 2010 was marked by a major

transformation within the Company. The internal

reorganization conducted by the Company

earlier in 2010 in the Information Technology

business unit has spurred the growth with the

remarkable record of achievement in 2010.

The undisputed status as the prominent

Systems Integrator in Indonesia was an

evidence that Multipolar had the edge in

superior technology, services and human

resources. With the wealth of experience

accumulated during its 35 years providing

services related to Information Technology

(IT), along with the promising Indonesian

economic growth, the company’s subsidiary

PT Multipolar Technology (“MLPT”) with

its core business as the one-stop solution

provider, has become a huge player in

the banking and technology sectors.

The anticipated opportunities taken with

the appropriate strategy was the choice

taken by MLPT this year to improve its

competitive edge.

With a commitment to fulfill its promises

in dealing with customer demand for best

possible solution, MLPT strives to provide

the best hardware software, network

infrastructure and competitive business

consulting services. To fulfill this demand,

MLPT is partnering with the best solution

BUSINESS PI LLARS BUSINESS PI LLARS

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providers available in the market such as IBM,

NCR, Cisco, Oracle, Microsoft and other prominent

players. Amid the growing information technology

nowadays, MLPT is fully aware that an effective and

efficient technology needs to be able to provide

a competitive edge for the company. Therefore

MLPT recruited, trained and developed, as well as

retained every IT professional in the industry. The

strategy has proven to be fruitful and led MLPT to

become the player with the dominant position in the

Indonesian IT business.

While the sales of hardware and infrastructure

remained the biggest contributor, MLPT was

always on the lookout to develop most updated

services with added value, giving the Company

a higher profit margin and more steady income.

In 2010 the Systems Integration services

received an acknowledgement for the successful

implementation of Wimax IP Backbone for First

Media as well as the implementation of Cisco

Telepresence in 20 locations of Bank CIMB

Niaga across Indonesia. With this success we are

confident that such innovative solutions will play a

significant role in the Company’s revenue composition.

In 2010 MLPT also obtained a certification from Cisco

as the “Gold Partner”, the highest level of competence

in Cisco’s technology standards. This certificate was

given after passing the rigorous criteria and presenting

a successful record in marketing Cisco products to the

Indonesian market.

Consulting Services also received an important place

in the Indonesian IT market this year. This sector

established several strategic partnership with main

customers in the financial sector and expanded

its coverage from other industries. The division

also developed skills and abilities in IT Governance

and since 2002 has been appointed to assist IT

Governance in the Information System Center for the

Financial Technology (Pusintek), a project involving

13 Directorate Generals under the Ministry of

Finance Republic of Indonesia. With this competency

MLPT was also appointed by Pertamina and Telkom

Indonesia to create the IT Governance in these

two companies.

In October 2010 MLPT announced its strategic

cooperation with HCL Technologies, an Indian-based

prominent global IT provider. This collaboration

is aimed at tapping the potentials of the IT

Outsourcing market, expected to grow into US$ 5

billion within the next 5 years. This collaboration

is a commitment by MLPT to focus on developing

the telecommunication sector that has become

one of its core businesses. With HCL, MLPT plans

to expand its services to include Cloud Computing

services. In this collaboration, MLPT acts as the

business consultant that will thoroughly assess

on the technology of a particular company before

transforming the technology to the Cloud-basis

services. The actual implementation will be assisted

by PT Visionet International (“VisioNet”), also

subsidiary of the Company.

The increasing demand of IT Outsourcing was

properly anticipated by VisioNet. It has a concrete

track record in managing services for major banks

and multinational companies all across Indonesia

especially for operating EDC, Desktop, ATM and

Data Center. In 2010 VisioNet grew double, marked

by a large increase in its customer base from many

industries. VisioNet also added a significant number

of branches and currently has 40 branches across

Indonesia. Apart from obtaining the certificate ISO

9001:2008 for operational and maintenance for EDC

and DSN, VisioNet also obtained ISO 9001: 2008

for IT Data Center. This achievement encourages the

Company to have a promising future on the demand

for such services.

In the following years, the Information Technology

Business Unit will focus on every opportunity to

develop it into a major, reliable and trusted local

Systems Integrator as well as an independent IT

business solution provider. With such goal, the

Information Technology Business Unit is striving

to obtain and develop more strategic projects

to improve the Company’s revenue from the

non-hardware sources as part of the effort to

advance Multipolar.

RETAIL BUSINESS UNIT

PT Matahari Putra Prima Tbk (“Matahari”)

remains the modern and prominent retail

company in the Indonesian retail industry,

established to improve the lifestyle of its

customers visiting its large network of

Hypermarts and Foodmarts. Matahari started its

business as a simple shop in 1958 and became

the pioneer for supermarkets in 1972. Matahari’s

understanding on the market demands,

appropriate business strategy and ability to

introduce services and innovative products for all

these years gave Matahari its competitive edge.

Earlier in 2010 Matahari conducted a divestment

of its 90.76% shares on the Company’s

subsidiary PT Matahari Department Store Tbk.

(“MDS”), and sold to PT Meadow Indonesia

(“MI”), a subsidiary with 100% shares owned

by Meadow Asia Limited (“MAC”), an arm of

CVC Capital Partners (“CVC”). The divestment

received a good assessment of 9.5 times

PT Multipolar Technology is the subsidiary of PT Multipolar Tbk. PT Multipolar Technology is the

Information Technology (IT) Solution Provider with more than 30 years of track record in the banking

and financial industry, as well as telecommunication, government and health care sectors. PT Multipolar

Technology has been the trusted partner by global technology companies such as Cisco, IBM, Microsoft,

Oracle and NCR. It has obtained the certificate ISO 9001:2008 for hardware, software and professional

services.


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ROBBINZ DEPARTMENT STORE

The Chinese retail market within the next few years is expected to surpass the American

and European markets combined. For this reason, the Chinese market demand has been

positively addressed by Multipolar. The increasing size of the middle class, the improved

purchasing power, coupled with consumer behaviour and taste that resemble that of the

Indonesian consumers, the Chinese market promises highly lucrative prospects. As the

initial step to hoist the Multipolar flag in the Chinese market as well as to capture the

non-organic opportunity, Multipolar acquired Robbinz, a well-respected and prominent

department store in China. Robbinz currently operates three departmet stores in Tianjn,

Chengdu and Yangzhou. Through this acquisition, Robbinz is expected to spur the

geographic investment portfolio, to open access to the international market as well as

increasing opportunity for collaboration and intensifying network between suppliers, supply

and efficient product distribution in Indonesia. The decision to acquire Robbinz is based

on the sustained optimism of Multipolar that it will provide an effective, efficient and

solid entry strategy base for China where Robbinz already has a loyal customer base and

respected brands carried.

EBITDA with the total transaction value of Rp. 7.2

trillion with ownership shares retained up to 28%

in MAC.

By December 31, 2010, Matahari operates a

network of stores consisting of 51 hypermarkets,

26 supermarkets, 54 outlets of health and beauty

centers, over 90 family entertainment centers, 19

international bookstores and strategic alliances in

operating 93 departments stores across 50 cities

in Indonesia. With this large network, along with

the plan of expansion in the near future, Matahari

is most prepared in anticipating the dynamics of

change brought by shifts in customers’ demand.

In 2010, Matahari strengthened its position

further as the most advanced retail companies in

Indonesia with net profit after tax amounting to

Rp. 5.8 trillion, a substantial increase from

Rp. 300.5 billion recorded in 2009. It resulted

from the extraordinary income from the

divestment of MDS and the savings on interest

cost from the settled liabilities during the period.

By implementing appropriate strategies and

technology, Matahari managed to improve

productivity and competitiveness, especially in

the high growth and turnover for the hypermarket

business. Multipolar will seek opportunities to

maximize synergy between the two companies

and improve Matahari‘s IT ability, especially in

the finance and supply management side. With

the more aggressive marketing and promotions,

focus on consumers and continued efforts to

be cost and operational efficient, along with the

support of 9000 employees across Indonesia,

Matahari is committed to maintain its lead in such

a competitive industry.


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MULTIMEDIA BUSINESS UNIT

PT First Media Tbk. (“First Media”) owns,

operates and manages broadband and Hybrid

Fiber Coaxial in some of Indonesian major

cities. Such network is to receive services of

multimedia television program. Part of this

large bandwith can also be used for internet

services and delivery of digital data such as

high definition television, Video on Demand,

Home Banking, Home Shopping and Interactive

Applications. First Media currently offers Triple

Play platform for Cable TV (HomeCable), fast

broadband internet access (FastNet) and

data communication (DataComm), for both

households and corporate businesses.

The information demand for a substantially larger

and more reliable technology capacity as well

as the increasingly growing sophisticated users

prompted First Media to be always ahead of

the competition in providing services by using

the latest technology possible. Earlier in 2010

First Media broadcast a new theme, the “Be

the First with First Media”, underlining the offer

from First Media for the customers to truly enjoy

such exhilirating experience with First Media.

This promise was delivered by the Company’s

breakthroughs in services implemented all

year round.

In August 2010, First Media became the first and

the only one in Indonesia to provide television

services in High Definition format. At the end of

2010 First Media launched the fastest broadband

internet services in Indonesia, the unlimited 20

Mbps internet package.

DATA AND ARCHIVE MANAGEMENT SERVICES AND OUTSOURCING SERVICES

The rapid development of business in Indonesia,

boosted by the steady economic growth,

provided an opportunity for industry and

business to improve. In the field of data and

document management that grew in parallel

with the growth in business, data and document

management became a new area of priority. The

nature of the banking and telecommunication

business required large capacity in managing

data and document filing. This opportunity was

responded well by PT Multifiling Mitra Indonesia

Tbk (“MMI”), a pioneering outsourcing company

for document management and other IT

functions.

The appropriate business model and good

professional management allowed MMI

to conduct an Initial Public Offering at the

Indonesian Stock Exchange. During the offering,

there was such an extraordinary interest

expressed by the investors that led to the

oversubscription of the shares to almost three

fold. The listing of the initial shares of MMI

in the Stock Exchange was conducted on 29

December 2010. It was a significant step and

an achievement for a company to be able to

conduct an initial shares offering. It was also a

strategic step to provide a platform for future

expansion development of the company.

BUSINESS PARTNERS

To respond to the evolving demand in the

market, First Media had built over 80 BTS for

Wimax (Worldwide Interoperability for Mircowave

Access), a breakthrough in wireless broadband

high speed access to provide a much wider

coverage. In November 2009 First Media was

officially appointed by the government as one

of the winners to manage the fixed local Packet

Switched-based using the radio frequency of 2.3

GHz for broadband services across Jabodetabek,

Banten and Northern part of Sumatra. Up to this

date this innovative services received a significant

response and expected to fullfil the target of First

Media customers by 2011.

With the support of a solid team, First Media

managed to maintain the lead in the market

by expanding the coverage and conducting

marketing penetration, as well as introducing

new, innovative programs and services.


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H U MAN R ESOU RCES DEVE LOPM E NT

Multipolar acknowledges that each employee is an important asset for the Company. The development in technology made the role of the employee even more important. The success of the Company largely depends on the amount of investment dedicated to improve human resources. In order to build high profesionalism in this competitive business, Multipolar focused on improving the human competency and creating the work culture and environment that retains and improve key employees to ensure the delivery of services and customer satisfaction.

In 2010 Multipolar conducted an internal reorganization to implement a competence-based management system in the Human Resource development program. This program begins with the development on the competence framework by identifying the competency level demanded in each job, followed by the creation of a competency profile. The profile can be subsequently used to assess individual profiles to obtain individual competency, allowing the Company to conduct quality recruitment. Moreover the gap between individual competency and required competency can be identified before any development program can be tailored for employees.

As part of the effort to narrow the gap and improve the employee competency, as well as to anticipate the highly competitive nature of business in 2010, Management conducted a series of training and development programs that included project management and diversification. To create a conducive, transparent and responsible working environment, Multipolar strives to continuously improve the quality of existing internal communication. Through a number of fora, healthy and constructive two-way communication were built by involving the entire staff both on the non-staff ,

staff or managerial and director level. During this forum a number of important messages were shared that included the strategic direction of Multipolar, important achievements and any rooms for improvement. It is expected that through this forum a common perception on the direction and achievement of the Company can be built. To achieve the Company commitment in providing a competitive remuneration and appreciation for the employees, the Company participated in regular survey on compensation and benefits conducted by a prominent Human Resources consultant. Through this survey, the Company is committed to implement commensurate salary levels based on competitive figures in the market, both in similar or different industries.

The company is also aware of the fact that apart from financial appreciation, non-financial rewards also play an important role in motivating employees and improve their performance. One way of recognizing this is by having annual best employee award gives to those who demonstrated commendable performance and contributed to the Company’s business improvement.

The Company currently employs 250 staff, with over 70 of them holding the professional certificates from Cisco, Microsoft, IBM and other prominent multinationals. The Management believes that quality recruitment, continued development of employees’ skills, knowledge and profesionalism, along with Multipolar’s commitment to create and provide a conducive working condition, will lead to a creation of solid teams that perform their best for the customers and stakeholders.

HUMAN RESOURCES DEVELOPMENT HUMAN RESOURCES DEVELOPMENT

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GOOD COR PORATE GOVE R NANCE

In general the Good Corporate Governance

applied in a company outlines the balanced

relationship between the monitoring role of

the Board of Commissioners, which is assisted

by the Audit Committee, and the role of Board

of Directors; between the Company and

shareholders, stakeholders and government,

in order to create company management that

is effective and in adherence to the existing

regulations to ensure a sustained growth and

highest possible value of the Company.

The transparency principles in terms of

information disclosure is given through the

publication of financial information and corporate

performance, as well as other substantial general

information published timely and accurately

(through a report to the Stock Exchange,

mass media or other official websites of the

Company). During the year 2010, the Company

has conducted its Annual Shareholders meeting

on May 14, 2010. Extraordinary Shareholders’

Meetings were also held on 25 February 2010

relating to the Reverse Stock and Issuance of

New Classification of Stocks, on 30 March 2010

relating to the Rights Issue V, and on

3 June 2010 relating to the modifications on

the Articles of Association of the Company

especially the amendment on the Company

Purpose, Objective and Business Activity to

comply with the Bapepam & LK Regulation

No IX. J.1 on the Main Provisions of Articles of

Association of a Publicly Listed Company.

The Board of Commissioners serves to monitor

the policies implemented by the Directors to

manage the company and advises the Directors

on the operational duties. The Board of

Commissioners also ensures the effectiveness

of Good Corporate Governance implementation

and if necessary provides guidance for

any adjustments.

The Audit Committee established by the

Board of Directors is responsible for reviewing

the audited Financial Reports and maintain

Multipolar has always been fully aware on the importance of Good Corporate Governance implementation in business processes. Multipolar believes that Good Corporate Governance provides a strong platform for Multipolar in achieving its vision and mission.

GOOD CORPORATE GOVERNANCE GOOD CORPORATE GOVERNANCE

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relations with the external auditors. The

Audit Committee communicates regularly

with Internal Audit to discuss the problems

as regulated in the Charter of the Audit

Committee. On 14 June 2010, the Board

of Commissioners appointed a new Audit

Committee to replace the previous one in line

with the rules of Bapepam & LK. The new

Audit Committee consists of the following:

Chairman : Mr. Jonathan L Parapak

Member : Mr. Basilius Hadibuwono

Member : Mr. Siswanto Pramono

In 2010, the Board regularly conducted

meetings with the Board of Directors and

Audit Committee, with written reports

and circulars to facilitate approval by the

Directors concerning some legal matters.

The main function of the Board of Directors

with its four members including the

President Director, is to lead and manage

the Company, including monitoring and

administratively managing the Company

assets. The Directors conduct regular

monthly meetings or upon the request by

one of the Directors.

Internal audit’s role is to assist the Directors

in conducting monitoring and analysis to

ensure the effectiveness of internal controls

on corporate operational management, in

line with the existing policies and systems.

In 2010 the Internal Audit conducted internal

control exercises for the Company and the

subsidiaries of the Company. The result of

the audits revealed consistently improved

internal control.

Multipolar is committed to social and

environmental activities as evidence for

its responsibility towards stakeholders.

This commitment took form thought many

humanitarian activities. For a number of

years, Multipolar consistently took part in

many community initiatives and provided

social contribution to its surrounding

community, such as regular blood donations

every quarter in 2010. The company

also demonstrated its commitment to

assist regions that became victims of

natural disasters.

During 2010 the Corporate Secretary

conducted a number of activities including

organizing the Annual Shareholders’

Meeting, Extraordinary Shareholders’

Meeting and Annual Public Expose, to

become the team member in compiling the

Annual Report, conducting meeting with the

journalists of the stock exchange, providing

explanations and information for the external

party requesting such information as well

as attending seminars, workshops and

meeting organized by the Indonesian Listed

Company Association, Bapepam & LK, and

the Indonesian Stock Exchange.

The Company, members of the Board of

Commissioners and Directors did not receive

any legal charges nor any litigation case that

affected the financial condition significantly

in 2010.

As a company with certificate ISO

9001:2008 for quality management in

hardware, software and professional

services, Multipolar consistently focuses

on customers satisfaction by providing

high quality products and services. This is

conducted to ensure a sustained growth and

maximum possible value for the Company.

The Company will keep implementing the

Good Corporate Governance principles as

an integral part of its daily activities, as the

principles being implemented cautiously will

assist in ensuring a credible Company in the

perception of customers, corporate partners

and public at large.

GOOD CORPORATE GOVERNANCE GOOD CORPORATE GOVERNANCE

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AU D IT COM M ITTE E’S R E PORT

AUDIT COMMITTEE’S REPORT AUDIT COMMITTEE’S REPORT

January 27th, 2011

No.CSS.017-2011

The Distinguished Members

Board of Commissioners

PT Multipolar Tbk.

Jakarta

Gentlemen;

Re: Audit Committee Report

In accordance to the Bapepam Rule No. IX.I.5 on the Audit Committee and the Jakarta Stock Exchange

Rule No. 1-A on the General Listing Rule of Equity Type of Shares in the Bourse, we as the Audit

Committee of PT Multipolar Tbk. (‘the Company’) has executed its duties and responsibilities in

accordance with the Audit Committee Charter outlined by the Board of Commissioners of the Company.

We hereby report on the activities and discussions held at the Audit Committee meeting during the

period of June 2010 up to January 2011 where the Audit Committee has conducted 3 Meetings and

attended by the Management of the Company. The Meetings covered:

1. Analysis on the Financial Report and other relevant financial information for the fiscal year

ending December 31, 2010.

2. Analysis on the independency and objectivity of the Public Accountant.

3. Analysis on the effectiveness of the Company’s internal control.

4. Analysis on the Company’s level of compliance towards capital market regulations and other

regulations pertaining to the Company’s businesses.

To fulfill the requirements to disclose the results of the Audit Committee’s analysis regarding the

Company’s Annual Report, we hereby concluded the following:

1. The Company’s businesses have been effectively carried out the control of an internal

function, which is also continuously improved inline with the directions outlined by the

Directors, under the supervision of the Board of Commissioners.

2. The Directors have appointed Public Accountant Aryanto, Amir Jusuf, Mawar & Saptoto to audit

the consolidated financial report of PT Multipolar Tbk. and its subsidiaries for the year ended

December 31, 2010, based on the authorization granted by the shareholders in the Annual

General Shareholders’ Meeting held on May 14, 2010.

3. Based on the Report from the Public Accountant Aryanto, Amir Jusuf, Mawar & Saptoto, the

Financial Report for the year ending December 31, 2010 has been well compiled and presented

in conformity with the accepted general accounting practices in Indonesia.

The Audit Committee hereby submits this Report.

Thank you for your kind attention and for the trust given to us.

Basilius HadibuwonoMember

Jonathan L. Parapak

Chairman

Siswanto PramonoMember

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MANAG E M E NT’S D ISCUSS ION AN D ANALYS IS

OPERATING RESULTS

On 15 October 2010, the Company through

Mainvest Limited, a subsidiary of the Company

acquired the entire shares of Congrex Limited from

Queens Limited with a purchase value amounting to

HK$ 345 million. The Company consolidated report

on 31 December includes the consolidated report of

Congrex Limited.

The company Gross Revenue for the year ended 31

December 2010 amounted to Rp. 11.2 trillion, mainly

resulting from Matahari’s revenue of Rp 9.6 trillion,

contributing to over 86% of consolidated revenues.

The total sales of Matahari (including consignment

sales of Rp. 1.4 trillion) was spurred by the increase

in sales from Matahari Food Business (“MFB”) that

rose from Rp. 6.5 trillion in 2009 to Rp. 7.6 trillion

in 2010. This increase was also followed by the

increase in IT revenues amounting to 33.11%, from

sales of hardware, software and other services.

Consolidated Gross Profit amounted to Rp. 2.2

trillion with Consolidated Gross Profit margin

reaching 19.47%, a decrease of 25.51% compared

to that of last year after the non-inclusion of PT

Matahari Department Store Tbk. (“MDS”). On

the second quarter of 2010, Matahari conducted

a divestment of 90.76% on its shares of MDS

to PT Meadow Indonesia (“MI”), the subsidiary

owned 100% by Meadown Asia Company Limited

(“MAC”), part of CVC Capital Partners (“CVC”). With

a valuation of 9.5x EBITDA, the total transaction

amounted to Rp. 7.2 trillion, while retaining the

ownership of Matahari of up to 28% in MAC.

Consolidated Operating Costs reached 19.33% from

gross sales in 2010, compared to 21.72% of the

gross sales in previous year. This was the result of

measures taken to streamline operating costs.

Consolidated Net Profit in 2010 amounted to

Rp. 2.8 trillion, a significant increase of 2,457.23%

compared to that of the previous year. This resulted

from the MDS divestment and efficiency in interest

expense for the debt settled during the years.

MANAGEMENT’S DISCUSSION AND ANALYSIS MANAGEMENT’S DISCUSSION AND ANALYSIS

In 2010, the macro economic situation in Indonesia stabilized and the economy grew

over 6%. In line with the improvement in macro economic conditions, the investment

activity also improved. Amid the fierce competition in business, Multipolar consistently

strengthened its position as the leading information technology system and solution

provider. The subsidiary of the Company, PT Matahari Putra Prima (“Matahari”) also

steadfastly supported the Company’s performance with its extraordinary achievements.

This was the combined result of appropriate strategies and hard work applied by the Human

Resource Teams and corporate measures conducted to ensure an increase in the Company’s

operational efficiency and effectiveness.

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FINANCIAL CONDITION

Total assets as of 31 December 2010 was at

Rp. 14 trillion, an increase of 18.10% compared

to the previous year of Rp. 11.9 trillion. This

significant increase was due to the increase in

Cash and Cash Equivalents, resulting from the

extraordinary revenue from the MDS divestment.

Total liabilities as of 31 December 2010 amounted

to Rp. 5.5 trillion or a decrease of 34.53% from

previous year of Rp. 8.4 trillion. The significant

decrease in total liabilities in 2010 was mainly

caused by efficiencies in interest payments from

liabilities settled in 2010 by the Company.

Shareholders’ Equity as of 31 December 2010

amounted to Rp. 4.8 trillion, a significant increase

of 205.1% from 2009. This increase was mainly

caused by the extraordinary income from capital

gains, resulting from the sale of MDS and the

Rights Issue of Rp. 753.9 billion in May 2010.

MANAGEMENT’S DISCUSSION AND ANALYSIS MANAGEMENT’S DISCUSSION AND ANALYSIS

40


41


COR PORATE DATA ACH I EVE M E NTS

CORPORATE DATA ACH IEVEMENTS

Corporate Address

HistoryDate of Establishment Initial Public Offering Initial Listing Company Listing Right Issue I Right Issue II Limited Public Offering Right Issue III Right Issue IVRight Issue V

Listed in

Share Code

Share Registration

Public Accountant

Total Employees

AGM Schedule

16th Fl. Menara MatahariJl. Palem Raya Bulevar No. 7Lippo Karawaci 1100Tangerang 15811IndonesiaTel. : (62 21) 55-777-000, 546-0011Fax.: (62 21) 546-0020Email: [email protected] Website: www.multipolar.com

DateDecember 4th, 1975September 21st, 1989November 6th, 1989July 16th, 1990June 25th, 1996June 26th, 1997February 15th, 2000June 10th, 2005November 24th, 2006March 30th, 2010

Indonesia Stock Exchange

MLPL

PT Sharestar Indonesia7th Fl. Citra Graha BuildingJl. Gatot Subroto Kav. 35-36Jakarta 12950Telp.: (62 21) 527-7966Fax.: (62 21) 527-7967

Aryanto, Amir Jusuf, Mawar & SaptotoPlaza ABDA Building, 10th & 11th FloorJl. Jend. Sudirman Kav. 59Jakarta 12190Tel.: (62 21) 5140 1340Fax.: (62 21) 5140 1350

250

February 14th,2011

CTI Golden Achievement Award for IBM Products

Cisco The Best Partner in Voice (Advance Technology)

CTI Golden Achievement Award for Oracle product

IBM Business partner 2005 - STAR of the year

IBM Business Partner 2005 - Recognition BP of the year

Vision Solutions Marketing Partner of the Year - Asia Pacific

Mimix Best Partner 2007

IBM Business Partners 1st Q Recognition – Best PoC

IBM Business Partners ‘08 2nd Q 100% Achiever

IBM Business Partners ‘08 3rd Q 100% Achiever

Symantec Partner Award, Best Enterprises Partner for Highest Growth in Availability Solution

SUN Microsystems – The Best First Tier System Integrator Award

Oracle Achieving the Level of Certified Advantage Partner

Telkom ISC Implementation Award

IBM Business Partners 1st Q 2009 Recognition

The Best Partner in Voice (Advanced Technology)

IBM Business Partners PrivelegeOne Champion

IBM Software Tivoli - Top Sales 2009

CTI Golden Achievement Award

Top IBM Information Management Software Business Partner (ASEAN)

Top IBM Software Business Partner (Indonesia)

Cisco Services Incentive Champion Award

2006

2007

2008

2009

2010

42


43


AU D IT COM M ITTE E

Jonathan L. Parapak

Chairman

Mr. Parapak was once appointed as the Company’s Audit Committee in 2001 –

2005. Mr. Parapak has an extensive experience in the industry, having spent over

forty years in the telecommunication business. His professional tenure in Telecom

Australia dan PT Indosat Indonesia launched his career in the industry, confirming

him as one of the most prominent experts in Indonesian telecommunication.

Mr Parapak is also a distinguished member of many international organizations

within the telecommunication sector. He currently serves as the Independent

Commissioner for PT. First Media, Tbk and PT Matahari Putra Prima, Tbk. He

obtained his Bachelor’s and Master’s degrees in Engineering Science from

University of Tasmania, Australia. He currently serves as the Independent

Commissioner for the Company.

Siswanto Pramono

Member

Mr. Siswanto Pramono has been appointed as the Company’s Audit

Committee between 2006 – 2007 and held several important positions in

many companies such as Managing Director at Banten World International

Tours and Travel (1994 – 2004), Marketing Manager in PT GE Astra Finance,

the subsidiary of GE Capital USA (1996 – 1999), PT Dai-ichi Kangyo Panin

Leasing, the subsidiary of the Dai-ichi Kangyo Bank, Japan (1984 – 1989)

and as Account Officer in PT Lippo Pasifik Finance, Tbk. (1984 – 1989). He

currently serves as Partner in a prominent company. He obtained his Bachelor

of Science in Economic Commerce from the University of Santo Tomas,

Manila, the Phillipines, in 1983.

Basilius Hadibuwono

Member

Mr. Basilius Hadiwibowo was born in 1950 and graduated from the

prestigious Sekolah Tinggi Akuntan Negara, Jakarta in 1970. He has a wealth

of experience in finance and he is actively involved as the member of the

Steering Committee of Kadin (the Indonesian Chamber of Commerce and

Industry) since 1976. He has also held several strategic positions in various

fields that include Finance Management, Agriculture/ Forestry, Transportation

Service/Tourism, Real Estate Construction, Mining, Telecommunication and

Informatics, Investment and Finance Reform as well as Banking.

AUDIT COMMITTEE RESPONSIB I LITY

RESPONSIBILITY FOR 2010 ANNUAL REPORT

Jakarta, January 2011

The 2010 Annual Report including the accompanying financial statement and

related information are prepared by the management of PT Multipolar Tbk.

The Board of Directors and the Board of Commissioners are fully responsible

for the content of the Annual Report.


Jonathan L. ParapakIndependent Commissioner

Dr. Isnandar Rachmat Ali, SE, MMIndependent Commissioner


Harijono SuwarnoDirector

Antonius Agus SusantoDirector

Reynold Pena OngDirector

• Benyamin J. Mailool resigned as the Commissioner of the Company on 14 July 2010

44


45


2010 F INANCIAL REPORT

2010 FINANCIAL REPORTPT MULTIPOLAR Tbk

THIS PAGE IS INTENTIONALLY LEFT BLANK

2010 F INANCIAL REPORT

These consolidated financial statements are originally issued in Indonesian language

R/014.AGA-E/9.2/2011

See the Accompanying Notes which are an integral partof these Consolidated Financial Statements

d1/March 30, 2011 1 Sign:

PT MULTIPOLAR Tbk AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETSAs of December 31, 2010 and 2009(In Million Rupiah, Except Share Data)

ASSETS Note 2010 2009Rp Rp

CURRENT ASSETSCash and Cash Equivalents 2.c, 2.d, 2.q, 3, 33 3,043,788 2,428,942Short-term Investments 2.d, 2.e, 2.q, 4, 33

Related Parties 2.w, 34 1,781,600 1,332,759Third Parties 257,000 315,290

Accounts Receivable 2.d, 2.f, 2.q, 5, 33Trade - Net

Related Parties 2.w, 34 5,682 22,632Third Parties 219,322 81,914

Others 2.w, 34 198,754 142,509Inventories - Net 2.g, 6 1,057,447 1,233,082Prepaid Taxes and Expenses 2.h, 2.t, 2.w, 16.a, 34 315,293 292,942Other Current Assets 2.q, 2.r, 33, 35 114,381 74,657Total Current Assets 6,993,267 5,924,727

NON-CURRENT ASSETSDue from Related Parties 2.d, 2.f, 2.w, 34 1,113,357 9,447Deferred Tax Assets - Net 2.t, 16.b 310,429 61,641Investments in Associates 2.e, 2.w, 7, 34 316,542 156,806Other Long-term Investments 2.d, 2.e, 2.w, 8, 35 1,069,278 175,591Property and Equipment

(Net of accumulated depreciation of Rp 1,789,898and Rp 2,174,518 as of December 31, 2010 and 2009and allowance for possible loss from disposal of Rp 78,283as of December 31, 2010) 2.i, 2.k, 2.l, 9, 35 2,012,332 2,282,299

Rental Advances 10, 35Related Parties 2.w, 34 625,693 610,693Third Parties 714,356 1,377,785

Prepaid Long-term Rent - Net 2.j, 11Related Parties 2.w, 34 146,300 150,248Third Parties 347,947 563,606

Advance for Purchase of Property and Equipment 12 26,233 59,747Intangible Assets - Net 2.m 117,499 207,285Other Non-Current Assets - Net 2.e, 2.i, 2.w, 34, 35 223,453 288,502Total Non-Current Assets 7,023,419 5,943,650

TOTAL ASSETS 14,016,686 11,868,377


R/014.AGA-E/9.2/2011



PT MULTIPOLAR Tbk AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS (Continued)As of December 31, 2010 and 2009(In Million Rupiah, Except Share Data)

LIABILITIES, MINORITY INTEREST AND Note 2010 2009STOCKHOLDERS' EQUITY Rp Rp

CURRENT LIABILITIESShort-term Loans 2.d, 2.q, 13, 33 403,648 249,128Accounts Payable 2.q, 14, 33

TradeRelated Parties 2.d, 2.w, 34 156 498Third Parties 1,182,944 1,330,841

Others 2.d, 15, 35 672,749 187,163Taxes Payable 2.t, 16.c 112,485 55,071Accrued Expenses 2.d, 2.n, 2.q, 17, 33 694,149 634,378Current Maturities of Long-term Debts

Loans 2.d, 2.r, 20, 33 472,629 1,093,518Current Portion of Deferred Gain on

Asset Sale and Lease Transactions 1.c, 2.k, 9, 35 44,745 41,431Other Current Liabilities 2.d, 2.q, 2.r, 33 122,098 33,786Total Current Liabilities 3,705,603 3,625,814

NON-CURRENT LIABILITIESDue to Related Parties 2.d, 2.w, 34 246,897 5,731Deferred Tax Liabilities - Net 2.t, 16.b 5,685 1,372Long-term Debts - Net of Current Maturities

Loans 2.d, 2.r, 20, 33 411,601 1,744,074Bonds - Net 1.b, 2.d, 2.n, 2.o, 2.q, 18 523,666 521,807Notes Payable - Net 2.d, 2.n, 2.q, 19, 33 -- 1,788,211

Deferred Gain on Asset Sale and Lease Transactions -Net of Current Portion 1.c, 2.k, 9, 35 263,251 307,996

Other Long-term Payables - Net 2.d, 2.q, 2.u, 21, 33 359,432 430,781Total Non-Current Liabilities 1,810,532 4,799,972

Total Liabilities 5,516,135 8,425,786

MINORITY INTEREST 2.b 3,659,220 1,856,128


R/014.AGA-E/9.2/2011



PT MULTIPOLAR Tbk AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS (Continued)As of December 31, 2010 and 2009(In Million Rupiah, Except Share Data)

LIABILITIES, MINORITY INTEREST AND Note 2010 2009STOCKHOLDERS' EQUITY Rp Rp

STOCKHOLDERS' EQUITYCapital Stock

Authorized Capital 467,942,000 shares of class A(par value R 2,000 per share) and 1,228,347,890 shares of class B(par value Rp 500 per share) and 21,924,420,550 shares of class C(par value Rp 100 per share) as of December 31, 2010;1,871,768,000 shares of class A (par value Rp 500 per share)and 22,452,928,000 shares of class B (par value Rp 125 per share)as of December 31, 2009

Issued and Fully Paid 467,942,000 shares of class A and1,228,347,890 shares of class B and 6,031,252,940 shares of class Cas of December 31, 2010; 1,871,768,000 shares of class A and4,913,391,560 shares of class B as of December 31, 2009 1.b, 22 2,153,183 1,550,058

Additional Paid in Capital - Net 1.b, 2.n, 23 162,391 14,397Changes in Equity Transaction of Subsidiary/Associate 2.b, 24 (409,826) (49,331)Unrealized Gain on Available for Sale Securities 2.e, 4 70,619 28,931Cash Flow Hedging Reserve 2.r, 35 -- (8,544)Retained Earnings

Appropriated 25 600 300Unappropriated 2,864,364 50,652

Total Stockholders' Equity 4,841,331 1,586,463

TOTAL LIABILITIES, MINORITY INTEREST

AND STOCKHOLDERS' EQUITY 14,016,686 11,868,377


R/014.AGA-E/9.2/2011



PT MULTIPOLAR Tbk AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF INCOMEFor the Years Ended December 31, 2010 and 2009(In Million Rupiah, Except Share Data)

Note

SALES FROM DIRECT PURCHASE, SERVICES ANDOTHER OPERATING REVENUES 2.p, 2.w, 26, 34 9,050,914 9,363,960

CONSIGNMENT SALES 2.p, 27 2,102,528 5,027,934COST OF CONSIGNMENT SALES 2.p, 28 1,615,771 3,506,196

COMMISSION FROM CONSIGNMENT SALES 486,757 1,521,738

NET SALES 9,537,671 10,885,698

COST OF SALES AND SERVICES 2.p, 29 7,366,240 7,214,164

GROSS PROFIT 2,171,431 3,671,534

OPERATING EXPENSES 2.p, 2.w, 30, 34Selling 800,051 1,117,816General and Administrative 1,355,485 2,008,608Total Operating Expenses 2,155,536 3,126,424

INCOME FROM OPERATIONS 15,895 545,110

OTHER INCOME (CHARGES)Interest Expense and Other Financing Cost - Net 2.w, 31, 34 (18,838) (341,399)Others - Net (125,746) 128,739Total Other Charges - Net (144,584) (212,660)

INCOME (LOSS) BEFORE EQUITY INNET EARNINGS OF ASSOCIATES (128,689) 332,450

EQUITY IN NET EARNINGSOF ASSOCIATES - NET 2.e, 2.w, 7, 34 5,681 10,760

INCOME (LOSS) BEFORE INCOME TAX BENEFIT(EXPENSE) (123,008) 343,210

INCOME TAX BENEFIT (EXPENSE) 2.tCurrent 16.a (37,317) (29,752)Deferred 16.b 54,221 (52,821)Total Income Tax Benefit (Expense) 16,904 (82,573)

NET INCOME (LOSS) BEFORE EXTRAORDINARY ITEM (106,104) 260,637

EXTRAORDINARY ITEM 1c, 2b, 32 5,733,215 -

NET INCOME (LOSS) BEFORE MINORITY INTERESTAND EFFECT OF PROFORMA ADJUSTMENTS 5,627,111 260,637

MINORITY INTEREST 2.b (2,911,015) (151,095)

EFFECT OF PROFORMA ADJUSTMENTS 2.b 114,530 1,149

NET INCOME 2,830,626 110,691

BASIC EARNING PER SHARE (in Full Rupiah) 2.v, 39 505.52 65.25

2010*Rp

2009Rp

*) PT Matahari Department Store Tbk (formerly PT Pacific Utama Tbk) not consolidated since April 1, 2010 (Note 1.c)


R/014.AGA-E/9.2/2011



PT MULTIPOLAR Tbk AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITYFor the Years Ended December 31, 2010 and 2009(In Million Rupiah)

Note Capital Stock Additional Paid Changes in Equity Unrealized Gain Cash Flow Totalin Capital - Net Transaction of on Available for Hedging Stockholders'

Subsidiary/ Associate Sale Securities Reserve Appropriated Unappropriated Equity

Rp Rp Rp Rp Rp Rp Rp Rp

BALANCE AS OF JANUARY 1, 2009 1,550,058 14,397 (81,625) 100,045 (18,002) 300 (60,039) 1,505,134

Changes in Equity Transaction of Subsidiary/Associate 2.b -- -- 32,294 -- -- -- -- 32,294Unrealized Gain on Available for Sale Securities 2.e -- -- -- (71,114) -- -- -- (71,114)Unrealized Loss on Cash Flow Hedging Reserve 2.r, 35 -- -- -- -- 9,458 -- -- 9,458Net Income -- -- -- -- -- -- 110,691 110,691

BALANCE AS OF DECEMBER 31, 2009 1,550,058 14,397 (49,331) 28,931 (8,544) 300 50,652 1,586,463

Appropriation of Retained Earnings 25 -- -- -- -- -- 300 (300) --Cash Dividend 25 -- -- -- -- -- -- (16,614) (16,614)Additional Paid in Capital-Net Through Pre-Emptive Rights

in Limited Public Offering V 1.b, 22, 23 603,125 150,781 -- -- -- -- -- 753,906Stock Issuance Costs 1.b, 2.n, 23 -- (2,787) -- -- -- -- -- (2,787)Changes in Equity Transaction of Subsidiary/Associate 1.c, 2.b, 24 -- -- (360,495) -- -- -- -- (360,495)Unrealized Gain on Available for Sale Securities 2.e -- -- -- 41,688 -- -- -- 41,688Gain on Cash Flow Hedging Reserve 2.r, 35 -- -- -- -- 8,544 -- -- 8,544Net Income -- -- -- -- -- -- 2,830,626 2,830,626

BALANCE AS OF DECEMBER 31, 2010 2,153,183 162,391 (409,826) 70,619 -- 600 2,864,364 4,841,331

Retained Earnings


R/014.AGA-E/9.2/2011



PT MULTIPOLAR Tbk AND SUBSIDIARIESCONSOLIDATED STATEMENTS CASH FLOWSFor the Years Ended December 31, 2010 and 2009(In Million Rupiah)

2010 2009Rp Rp

CASH FLOWS FROM OPERATING ACTIVITIESCollections from Sales 11,410,635 14,553,186Cash Paid During the Year for:

Purchase of Inventories including Payment for Cost of Consignment (8,520,049) (11,253,956)Operating Expenses (Excluding Salaries, Allowance and Employee Benefits) (1,047,159) (1,252,239)Salaries, Allowance and Employee Benefits (588,796) (893,437)

Net Cash Received from Operations 1,254,631 1,153,554Payment for Taxes (1,380) (19,615)Other Income (Expenses) - Net (660,900) 112,942

Net Cash Flows Provided by Operating Activities 592,351 1,246,881

CASH FLOWS FROM INVESTING ACTIVITIESProceeds from Sales of Investment in Subsidiary and Associate-Net 5,048,158 52,001Proceeds from Sales of Other Long-term Investment -- 100Disposal of Other Short-term Investments 846,652 1,880,179Proceeds from Disposal of Property and Equipments 21,585 7,334Decrease in Other Non-Current Assets 16,888 25,621Proceeds from Sale of Assets of Restructuring Transactions among

Entities Under Common Control -- 210,834Additional in Short-term Investments (1,240,112) (1,875,293)Acquisitions of Property and Equipment (307,965) (264,671)Increase in Investment in Associate and Investment in Shares (289,251) (444)Increase in Advance for Purchase of Property and Equipment (137,575) (277,995)Decrease (Increase) in Other Current Assets (28,902) 10,175Increase in Rental Advances (15,915) (891,600)Decrease in Other Payables from the Receipt of Escrow Fund -- (306,033)

Net Cash Flows Provided by (Used in) Investing Activities 3,913,563 (1,429,792)


R/014.AGA-E/9.2/2011



PT MULTIPOLAR Tbk AND SUBSIDIARIESCONSOLIDATED STATEMENTS CASH FLOWS (Continued)For the Years Ended December 31, 2010 and 2009(In Million Rupiah)

2010 2009Rp Rp

CASH FLOWS FROM FINANCING ACTIVITIESProceeds from Loans and Bank Loans 1,741,086 2,393,844Proceeds from Limited Public Offering of Company and a Subsidiary 753,907 709Receipts from Exercise of Warrant of MPP from Minority Shareholders 374,210 8,237Interest Income 304,756 351,173Repayments of Loans and Bank Loans (3,423,941) (2,010,841)Buy-back of Notes Payable (1,886,225) (553,820)Payment of Cash Dividend to MPP's Minority Shareholders

and its Subsidiaries (1,010,219) (2,500)Interest Expense and Other Financing Cost (385,487) (609,232)Payment of Cash Dividend of the Company (16,614) --Payment of Stock Issuance Cost (2,787) (19,510)Receipts from (Payments to) Related Parties (1,237) 2,089Receipts from Notes Payable Issuance - 1,091,975Receipts from Bonds Issuance - 528,000Buy-back of Bonds Payable - (443,000)Payment of Notes Issuance Cost - (13,672)Payment of Bonds Issuance Cost - (7,882)Payments of Other Long-term Payables - (821)

Net Cash Flows Provided by (Used in) Financing Activities (3,552,551) 714,749

NET INCREASE IN CASH AND CASH EQUIVALENTS 953,363 531,838

TOTAL CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 2,428,942 1,897,104

SUBSIDIARY NOT CONSOLIDATED -PT MATAHARI DEPARTMENT STORE TBK (Notes 1.c, 2.b and 32) (338,517) -

TOTAL CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 3,043,788 2,428,942

Supplemental Cash Flows Information 2008 2008Transactions not Affecting Cash Flows

Proceeds from sale of investment in subsidiaries through affiliated receivables 1,000,000 -Proceeds from sale of investments in subsidiaries through other long-term investments 882,848 -Reclassification of advance for purchase of property and equiptment

to property and equipment 136,610 516,043Reclassification of rental advances to prepaid rental 3,067 34,463


PT MULTIPOLAR Tbk AND SUBSIDIARIESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the Years Ended December 31, 2010 and 2009(In Million Rupiah and Thousand for Foreign Currencies, Except Share Data)

D1/March 30, 2011 8 Sign:

`1. General

1.a. The Company's EstablishmentPT Multipolar Tbk (the Company) was incorporated in the Republic of Indonesia on December 4, 1975based on notarial deed No. 7 of Adlan Yulizar, SH, which has been amended several times, the latestby notarial deed No. 119 by Misahardi Wilamarta, SH, dated March 25, 1982. The deed ofestablishment and its amendments were approved by the Minister of Justice in his decree No. C2-1093.HT.01.01.Th.82 dated September 3, 1982 and were published in the State Gazette No. 84,Supplement No. 938 dated October 20, 1987. The articles of association has been amended severaltimes, the latest based on notarial deed No. 9 by Rini Yulianti, SH dated June 14, 2010 concerningchange of article 3 regarding the objective of business activities of the Company. This notarial deedhas been reported the Minister of Justice and Human Rights of Republic of Indonesia in his letter No.AHU-31052.AH.01.02. dated June 14, 2010.

The Company is primarily engaged in systems integration services, including import, trading,distribution and service of computers and related products, rental of computer equipments,management and information technology consulting services, and also acts as IBM business partner(system integration, system remarketer and PS 2 advance function).

The Company is domiciled in South Jakarta. Its operational head office is located at Menara Matahari,Palem Raya Bulevar No. 7, Lippo Karawaci - Tangerang, Banten.

The Company started its commercial operation on December 4, 1975.

1.b. The Company's Public OfferingsOn September 18, 1989, by virtue of the letter of the Minister of Finance No. SI-052/SHM/MK.10/1989,the Company offered 3,428,000 shares to the public. All of the issued shares have been listed on theJakarta Stock Exchange in 1989 and on the Surabaya Stock Exchange in 1990. In 1996 and 1997, theCompany listed additional 102,852,000 shares (at par value of Rp 1,000 per share) and 1,508,496,000new shares (at par value of Rp 500 per share) on the Jakarta and Surabaya Stock Exchanges inconnection with Limited Public Offering of Pre-Emptive Rights Issuance I and II, respectively.

In the Extraordinary Stockholders' General Meeting held on February 15, 2000, as covered by notarialdeed No. 44 dated February 15, 2000 of Poerbaningsih Adi Warsito, SH, the stockholders approvedthe issuance of 89,138,400 new shares other than Limited Public Offering to strategic investors.However, only 89,000,000 new shares were approved for listing, other than Limited Public Offering, byPT Bursa Efek Jakarta in its letter No. S-2183/BEJ.EEM/07/2000 dated July 24, 2000 and by PT BursaEfek Surabaya in its letter No. 005/EMT/LIST/BES/IV/2000 dated April 18, 2000

In 2005, the Company conducted Limited Public Offering in connection with Pre-Emptive RightsIssuance III of 2,339,710,000 shares class B (at par value of Rp 125 per share) with the offering priceat Rp 125 per share. The offering has received an effective notification statement based on the Letterfrom the Capital Market Supervisory Agency (Bapepam) No. S-1456/PM/2005 dated September 7,2005, and became effective after obtained an approval from the Company’s Stockholders GeneralMeeting dated September 10, 2005. All the shares were listed on the Indonesian Stock Exchange(formerly Jakarta Stock Exchange and Surabaya Stock Exchange) on September 24, 2005.


PT MULTIPOLAR Tbk AND SUBSIDIARIESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Years Ended December 31, 2010 and 2009(In Million Rupiah and Thousand for Foreign Currencies, Except Share Data)

D1/March 30, 2011 9 Sign:

In 2006, the Company conducted Limited Public Offering in connection with Pre-Emptive RightsIssuance IV of a maximum of 2,573,681,000 class B shares (New Share) at par value of Rp 125per share with offering price of Rp 125 per share and a maximum of 1,429,822,778 Warrant Series Iwill be issued attached to the new shares which being offered free of cost as an incentive tothe stockholders of the Company and/or Pre-Emptive Rights Holders who exercise their rights.The offering has received an effective notification statement based on the Letter from the Chairman ofCapital Market Supervisory Agency (Bapepam) No. S-2910/BL/2006 dated November 23, 2006, andbecame effective after obtained an approval from the Company’s Stockholders General Meeting datedNovember 24, 2006.

In the Extraordinary Stockholders' General Meeting held on February 25, 2010 concerning in reversestock plan, the stockholders have decided and approved, among others, changed par value of sharesin connection with reverse stock, by increasing the par value per shares for 4 times, such as class Ashares from Rp 500 per share to Rp 2,000 per share and class B shares from Rp 125 to Rp 500 pershare (Note 22)

On March 30, 2010, the Company conducted Limited Public Offering in connection with Pre-EmptiveRights Issuance V of a maximum 6,031,252,940 class C shares (New Share) at par value Rp 100 pershare with offering price Rp 125 per share and of 2,345,487,020 Warrant Serie II will be issuedattached to the new shares which being offered free of cost as an incentive to stockholders of theCompany and/or Pre-Emptive Rights Holders who exercise their rights. The warrant can be convertedfrom December 14, 2010 to April 12, 2013. The Limited Public Offering V has received an effectivenotification statement based on the Letter from the Chairman of Capital Market Supervisory Agency(Bapepam) No. S-2823/BL/2010 dated March 30, 2010 and became effective after obtained anapproval from the Company’s Stockholders General Meeting dated March 30, 2010. Pre-EmptiveRights Issuance trading period from April 14, 2010 until May 14, 2010 with share allotment date onMay 19, 2010 (Note 22).

All the shares of the Company were listed in Indonesian Stock Exchange.

1.c. Structure of the Subsidiaries

(1). The Company has direct and indirect ownership over the following subsidiaries:

Subsidiaries Domicile Operations Percentage of Ownership * Start ofCommercialOperations

Tota l Asset

2010%

2009%

2010Rp

2009Rp

Direct Ownership:PT Sharestar Indonesia (SI) Jakarta Share Administration and

Other Services100.00 100.00 1990 17,564 16,071

PT Multipolar Technology (MT) Jakarta Trading 100.00 100.00 2009 192,027 55,514PT Visionet Internasional (VI) Jakarta Trading 100.00 100.00 2002 189,517 92,955PT Reksa Puspita Karya (RPK) Jakarta Trading 100.00 100.00 Non Operating 286,891 125,325PT Tryane Saptajagat (TS) Jakarta Trading 100.00 100.00 Non Operating 40 43Link Technology Services Pte. Ltd.

(LTS)Singapore Trading and Services 100.00 -- Non Operating 70 70

PT General Artha Sejati (GAS) Jakarta Services and GeneralTrading

100.00 -- Non Operating -- --

PT Sinar Utama Prima (SUP) Jakarta Services and GeneralTrading


PT Sinar Cemerlang Sejati (SCS) Jakarta Services and GeneralTrading


PT Cahaya Inv estama (CI) Jakarta Services and GeneralTrading

100.00 -- Non Operating 5 --



D1/March 30, 2011 10 Sign:


Tota l Asset

2010%

2009%

2010Rp

2009Rp

PT Cahaya Artha Sejati (CAS) Jakarta Services and GeneralTrading


PT Surya Artha Sejati (SAS) Jakarta Services and GeneralTrading


PT Surya Cipta Investama (SCI) Jakarta Services and GeneralTrading

50.20 -- Non Operating 152,641 --

PT Kharisma Artha Sejati (KAS) Jakarta Services and GeneralTrading

50.20 -- Non Operating 415,897 --

PT Air Pasifik Utama (APU) Tangerang,West Java

Air Transportation 99.93 99.93 1997 17,140 15,016

PT Matahari Putra Prima Tbk (MPP) Tangerang,West Java

Retail Business 50.23 50.10 1986 11,420,600 10,560,144

PT Multifiling Mitra Indonesia (MMI) Cikarang,Bekasi

Archive Management -- 50.20 1993 -- 72,004

Indirect Ownership::PT Multifiling Mitra Indonesia (MMI) Cikarang,

BekasiArchive Management 50.20 -- 1993 138,543 --

Mainvest Limited (ML) British VirginIslands

Investment 100.00 -- Non Operating 415,897 --

Rightop Pacific Limited (RPL) British VirginIslands

Investment 100.00 -- Non Operating -- --

Sinobeat Limited (SL) British VirginIslands


Hipermart Hypermart HK Ltd ( formerlyTop Eternal Asia Limited)

Hong Kong Investment 100.00 -- Non Operating -- --

Grandstar Capital Limited (GCL) British VirginIslands


Bluemark Holdings Limited (BHL) British VirginIslands


Sky Wealth Pacific Limited (SWPL) Hong Kong Investment 100.00 -- Non Operating -- --

Robbinz Department Store Hong KongLimited (formerly Skyjade InvestmentsLimited) (RDS)

Hong Kong Investment 100.00 -- Non Operating -- --

Congrex Limited British Virgin Investment 100.00 -- Non Operating 415,897 --

Island

Federal Investments Limited Hongkong Investment 100.00 -- Non Operating 360,424 --Winsoar Limited Hong Kong Investment 100.00 -- Non Operating 115,141 --

Robbinz Department Store (Tianjin) Ltd China Retail Business 100.00 -- 2007 233,981 --Robbinz Department Store (Chengdu)

LtdChina Retail Business 100.00 -- 2007 93,973 --

Yangzhou Robbinz Department Store Ltd China Retail Business 100.00 -- 2010 95,724 --Echowin Limited British Virgin

IslandInvestment 100.00 -- Non Operating -- --

Metrogreat Limited Hong Kong Investment 100.00 -- Non Operating 62,028 --Emway British Virgin

IslandRetail Business 100.00 -- Non Operating -- --

Gainflow Hong Kong Retail Business 100.00 -- Non Operating -- --

Robbinz (China) Investment Co Ltd China Investment 100.00 -- Non Operating -- --Bright Sino Hong Kong Retail Business 100.00 -- Non Operating -- --

Hipermart (China) Investment Co Ltd China Investment 100.00 -- Non Operating -- --Non Operating

Grandtop Capital Limited British VirginIsland

General Trading 100.00 -- Non Operating -- --

Silvertop Capital Limited British VirginIsland


Uniwealth Ltd Hong Kong General Trading 100.00 -- Non Operating -- --

Hipermart Management (Tianjin) Co Ltd China General Trading 100.00 -- Non Operating -- --

Evergrand Asia Ltd British VirginIsland


PT Matahari Department Store (MDS,formerly PT Pacific Utama Tbk)

Tangerang,West Java

Retail Business -- 90.76 1982 -- 1,516,268



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Tota l Asset

2010%

2009%

2010Rp

2009Rp

PT Matahari Super Ekonomi (MSE) Tangerang,West Java

Retail Business 99.20 100.00 1994 2,880 5,678

Matahari International FinanceCompany B.V. (MIFCO)

Rotterdam,Netherland

Financing Business 100.00 100.00 1996 5,438 6,020

PT Nadya Putra Investama (NPI) Tangerang,West Java

General Trading 100.00 100.00 1998 946,614 603,246

PT Taraprima Reksabuana (TPRB) Jakarta Sales and MarketingMineral Water

100.00 100.00 1998 20,857 17,890

PT Matahari Kafe Nusantara (MKN) Tangerang,West Java

Restaurant 100.00 100.00 2001 31 226

Matahari Finance B.V. (MF) Amsterdam,Netherland

Financing Business 100.00 100.00 2006 29,248 37,662

PT Times Prima Indonesia (TPI) Tangerang,West Java

Services and GeneralTrading

100.00 100.00 2008 56,787 58,568

PT Prima Cipta Lestari (Prima) Tangerang,West Java

Restaurant 100.00 100.00 2009 63,107 65,318

Matahari International B.V.(MIBV)

Amsterdam,Netherland

Financing Business 100.00 100.00 2009 22,213 1,981,275

PT Nadya Prima Indonesia (formerly PTMatahari Mega Swalayan) (NPri)

Tangerang,West Java

General Trading 100.00 100.00 Non Operating 199,566 5,192

PT Mitra Mega Lestari (formerly PTMatahari Mega Toserba) (MMT)

Tangerang,West Java

Retail Business 100.00 100.00 Non Operating 20,916 2,254

PT Prima Boston Drugstore (dahulu PTMatahari Boston Drugstore) (PBD)

Tangerang,West Java

Drugstore 100.00 100.00 Non Operating 2,067 2,362

Prime Connection Limited (PCL) British VirginIslands

Investment 100.00 100.00 Non Operating 5 5

Brighter Limited (BL) British VirginIslands

Investment 100.00 100.00 Non Operating 208 3,193

PT Matahari Pacific (MP) Tangerang,West Java

Services and Trading 100.00 100.00 Non Operating 1,984,022 25,039

PT Matahari Graha Fantasi (MGF) Jakarta Family Games Center 50.01 50.01 1995 174,197 170,479

PT Asri Agungpermai (AAP) Jakarta General Trading - 99.96 1991 - 1Matahari Department Store

(Sh enzhen) Limited (MDS)China Retail Business 100.00 100.00 2005 179 2,348

Tristar Capital Limited (Tristar) Labuan,Malaysia

Investment 100.00 100.00 2007 313,836 330,898

PT Prima Gerbang Persada (PGP) Jakarta Services, General Tradingand Agribisnis

100.00 100.00 2009 204,105 179,686

Bright Regent Corporation (BRC) Hongkong Investment 100.00 100.00 Non Operating 190 2.755Merrill Investment Limited (MI) ** Labuan,

MalaysiaInvestment 100.00 100.00 Non Operating 4,051 4,271

Matahari Trading (Shenzhen) Limited(MTL) ***

China General Trading 100.00 100.00 Non Operating -- --

Grandbright CorporationLimited (GCL)

Hongkong Investment 100.00 100.00 Non Operating 0.001 0.001

PT Matahari Dana Prima (MDP) Jakarta Consumer FinancingBusiness

99.99 99.99 Non Operating 1,923 1,927

PT Mitra Prima Kreasi (MPK) Tangerang,West Java

General Trading 100.00 -- Non Operating 122,040 --

PT Mentari Sinar Persada (MSP) Tangerang,West Java


PT Prima Mentari Persada (PMP) Tangerang,West Java


PT Surya Persada Lestari (SPL) Tangerang,West Java


PT Surya Megah Lestari (SMGL) Tangerang,West Java


PT Surya Asri Lestari (SAL) Tangerang,West Java


PT Surya Menara Lestari (SML) Tangerang,West Java


PT Surya Pekalongan Lestari (SPKL) Tangerang,West Java


PT Balaraja Sentosa (BS) Tangerang,West Java


PT Indah Tasikmalaya Persada (ITP) Tangerang,West Java


PT Magelang Perkasa (MGLP) Tangerang,West Java


PT Panca Megah Utama (PMU) Tangerang,West Java


PT Nusa Malioboro Indah (NMI) Tangerang,West Java


PT Mega Duta Persada (Duta) Tangerang,West Java


PT Citra Cito Perkasa (CCP) Tangerang,West Java


PT Mentari Singosaren (MS) Tangerang,West Java




D1/March 30, 2011 12 Sign:


Tota l Asset

2010%

2009%

2010Rp

2009Rp

PT Pesona Klaten Persada (PKP) Tangerang,West Java


PT Persada Simpang Lima (PSL) Tangerang,West Java


PT Tanjung Bunga Gemilang (TBG) Tangerang,West Java


PT Binjai Megah Lestari (BML) Tangerang,West Java


PT Mulia Persada Pertiwi (Mulia) Tangerang,West Java


* including indirect percentage of ownership** this subsidiary had file struck off in Labuan, Malaysia*** this subsidiary was not registered in National Organization Institution Code Management Center in China

(2) On October 16, 2009, the Company established Link Technology Services Pte. Ltd. in Singaporewith 100% ownership interest.

(3) On June 30, 2009, MPP, a subsidiary, acquired 100% ownership interests in MIBV.

(4) On November 25, 2009, MPP, a subsidiary invested in PT Matahari Department Store Tbk(MDS, formerly PT Pacific Utama Tbk) representing ownership interest of 90.76%. The transactionfell under restructuring transactions among entities under common control and recorded inaccordance with Statement of Financial Accounting Standards 38 (Revised 2004).

Accordingly, the consolidated financial statements for the periods prior to 2009, has been restatedto reflect the retroactive effects of the above acquisition as if it occurred prior to 2009.

Based on Sale and Purchase Agreement dated January 23, 2010, MPP sold all of its ownership inMDS at a price of Rp2,705.33 (full amount) per share or amounting to Rp7,164,309 toPT Meadow Indonesia, as a party appointed as the buyer by Meadow Asia Company Limited. Theapproval for this Transaction has been obtained from independent stockholders at the Company’sStockholders Extraordinary Meeting, which was held on March 26, 2010. On April 1, 2010, MPPhas completed the Transaction. Therefore, the financial statements of MDS have beendeconsolidated in the consolidated financial statements of MPP(Note 32).

(5) On May 14, 2010, the Company established PT General Artha Sejati (GAS) and PT Kharisma ArthaSejati (KAS) with each 100% ownership interest, respectively.

(6) On May 14, 2010, the Company established Uniwealth Ltd through Silvertop Holdings Ltd with100% ownership interest.

(7) On May 21, 2010, the Company established Mainvest Limited through KAS, Rightop Pacific Limited(RPL) through GAS, Sinobeat Limited (SL) through RPL and Top Eternal Asia Limited through SL,with 100% ownership interest, respectively.

(8) On July 1, 2010, the Company established Grandstar Capital Limited (GCL) through MainvestLimited (ML) and Robbinz Department Store Hong Kong Limited (formerly Skyjade InvestmentsLimited) through GCL with 100% ownership interest, respectively.

(9) On July 2, 2010, the Company established Bright Sino International Limited through PT Surya ArthaSejati with 100% ownership interest.



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(10) On July 8, 2010, the Company established Bluemark Holdings Limited (BHL) through EvergrandAsia Ltd and Sky Wealth Pacific Limited (SWPL) through BHL, with 100% ownership interest,respectively.

(11) On August 16, 2010, the Company established PT Cahaya Investama (CI) with 100% ownershipinterest.

(12) On August 30, 2010, the Company established PT Surya Cipta Investama with 50.20% ownershipinterest which the capital stock paid by shares (inbreng) of PT Multifiling Mitra Indonesia Tbk (MMI)owned by the Company.

(13) On August 31, 2010, the Company established PT Cahaya Artha Sejati (CAS) and PT Surya ArthaSejati (SAS) with 100% ownership interest, respectively.

(14) On September 2010, PT Matahari Mega Swalayan has changed its name into PT Nadya PrimaIndonesia and PT Matahari Boston Drugstore has changed its name into PT Prima BostonDrugstore.

(15) On September 2010, MPP, a subsidiary, invested in MPK, MSP and PMP through NPI and MP,representing ownership interests of 99% and 1%, respectively; MPP invested in BS, ITP, MGLP,PMU, NMI, Duta, CCP, MS, PKP, PSL, TBG, BML and Mulia through MSP and MP, representingownership interests of 99% and 1%, respectively; MPP invested in SPL, SMGL, SAL, SML andSPKL through PMP and MP, representing ownership interests of 99% and 1%, respectively.

(16) On August 18, 2010, the Company established Grandtop Capital Limited through PT Surya ArthaSejati, Silvertop Holdings Ltd through Grandtop Capital Ltd and Evergrand Asia Ltd throughPT Cahaya Artha Sejati, with 100% ownership interest, respectively.

(17) On August 7, 2010, Mainvest Limited (ML), a subsidiary has signed Sale and Purchase Agreement(SPA) with Queenz Limited (QL). In the SPA, ML act as a Buyer and the Company as a guarantorbuyer with QL, a company established under the British Virgin Islands jurisdiction as a Seller andLippo China Resources Limited (LCR), a company established Hong Kong jurisdiction as a SellerGuarantor in connection with acquisition plan by the buyer of all shares owned by QL in CL whichhas department store with the trademark “Robbinz” in overseas with total cost acquisitionamounting to HKD 345,000 which will be paid in installments for 12 months from the date ofclosing, as follows :1st payment amounting to HKD 136,000 at the closing date;2nd payment amounting to HKD 103,670 conducted 6 months after the closing date;3rd payment amounting to HKD 105,330 conducted 12 months after the closing date;

On October 15 , 2010 , the Company performed the closing transaction acquisition of 100% sharesowned by QL in CL and the Company has published the Disclosure of Information to shareholdersof the Company in order to comply with Bapepam and LK regulation No. IX.E.1 concerning affiliatetransactions and conflict of interest of certain transactions on October 19, 2010. The Company haspaid the first payment amounting to HKD 136,000 to QL in October 2010 and the remaining hasrecorded as intercompany payable (Note 34). The acquisition is related to a restructuringtransaction between entities under common control, and recorded in accordance with Statement ofFinancial Accounting Standard 38 (revised 2004) (Notes 2.b and 40).



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(18) On November 2010, PT Matahari Mega Toserba has changed its name into PT Mitra Mega Lestari(MML).

(19) For the purposes of restructuring of subsidiaries which have been approved by the stockholders insubsidiaries’ Stockholders’ Extraordinary General Meeting, in November 2010, there have beentransfers of ownership of certain subsidiaries in the MPP’s Group. These shares transfer wereinternal transaction and did not result in change of control of the Company over its subsidiaries.

(20) As of December 31 2010, RPK, TS and SCI operated in investment activities, meanwhile LTS,GAS, KAS, CI, CAS, SAS, SCI, ML, RPL, SL, TEAL, GCL, BHL,SWPL, RDS, NPri, MML, PBD,PCL, BL, MP, BRC, MI, MTL, GCL, MDP, MPK, MSP, PMP, SPL, SMGL, SAL, SML,SPKL, BS,ITP, MGLP, PMU, NMI, Duta, CCP, MS, PKP, PSL, TBG, BML and Mulia have not startedcommercial operations.

1.d. Commissioners, Directors, Audit Committee and EmployeesAs of December 31, 2010 the members of the Company's boards of commissioners and directorsbased on the Stockholders' Annual General Meeting held on May 14, 2010, as covered by notarialdeed No. 4 of Rini Yulianti, SH, No. 4 dated May 14, 2010 are as follows:

Board of CommissionersPresident Commissioner : DR. Cheng Cheng WenIndependent Commissioner : Jonathan Limbong ParapakIndependent Commissioner : Isnandar Rachmat AliCommissioner : Benyamin Jonathan Mailool*)

DirectorsPresident Director : Jeffrey Koes WonsonoDirector : Harijono SuwarnoDirector : Antonius Agus SusantoDirector : Reynold Pena Ong*) has effective resigned on July 14, 2010

As of December 31, 2009, the members of the Company's boards of commissioners and directorsbased on the Stockholders' Annual General Meeting held on April 24, 2009 as covered by notarialdeed No. 1 of Poerbaningsih Adi Warsito, SH, dated May 1, 2009, are as follows:

Board of CommissionersPresident Commissioner : DR. Cheng Cheng WenIndependent Commissioner : Jonathan Limbong ParapakIndependent Commissioner : Isnandar Rachmat AliCommissioner : Benyamin Jonathan Mailool

DirectorsPresident Director : Jeffrey Koes WonsonoDirector : Harijono SuwarnoDirector : Antonius Agus SusantoDirector : Reynold Pena Ong



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As of December 31, 2010 the member of audit committee are as follows:

Chairman : Jonathan L. ParapakMember : Basilius HadibuwonoMember : Siswanto Pramono

As of December 31, 2009 the member of audit committee are as follows:

Chairman : Isnandar Rachmat AliMember : Purnomo Budi SatrijoMember : Herman Latief

As of December 31, 2010 and 2009, the Company’s corporate secretary is Chrysologus RN Sinulingga.

As of December 31, 2010 and 2009, , the Company and subsidiaries have approximately 11,047 and19,789 permanent employees, respectively (unaudited).

2. Summary of Accounting Policies

2.a. Basis of Measurement and Preparation of Consolidated Financial StatementsThe consolidated financial statements have been prepared in accordance with generally acceptedaccounting principles and practices in Indonesia, i.e. Statements of Financial Accounting Standards(SFAS) and the Capital Market Supervisory Agency and Financial Institution (BAPEPAM-LK) rules andLK No. VIII.G.7 concerning guidelines for financial statements presentations and SE-02/PM/2002concerning guidelines for financial statements presentations and disclosures for public listed tradingand investment companies.

The consolidated financial statements have been prepared based on the accrual basis, except forstatements of cash flows, and using the historical cost method of accounting, except for certaininvestments which are either stated at fair value or at net assets value or accounted for under theequity method, swap, option and forward contracts which stated at fair value and inventories which arevalued at the lower of cost or net realizable value.

The consolidated statements of cash flows present cash receipts and payments classified intooperating, investing and financing activities. The cash flows from operating activities are preparedusing the direct method.

The reporting currency used in the consolidated financial statements is Indonesian Rupiah.

2.b. Consolidation PrinciplesThe consolidated financial statements included accounts of the Company and subsidiaries asdescribed in Note 1.c.

The presentation of consolidated financial statements are carried out based on entity concept. Allsignificant interrelated accounts, transactions and profit among consolidated companies have beeneliminated to reflect the financial position and result of operations as a whole.

The carrying value of the Company’s investment in a subsidiary is correspondingly adjusted for the netchange in its investment in the subsidiary’s equity by crediting of debiting “Difference in Changes inEquity Transactions of Subsidiary”.



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The accounts of foreign subsidiaries were translated into rupiah amounts at the middle rate ofexchange prevailing at balance sheet date for balance sheet accounts and the average rate during theyear for profit and loss accounts. The resulting difference arising from the translations of the financialstatements of subsidiaries which are an integral part of the Company are debited/credited to Gain(Loss) on Foreign Exchange which is presented in the consolidated financial statements, while for thesubsidiaries which are not an integral part of the Company, these are debited/credited to andpresented as “Difference in Foreign Currency Translation” and are presented as “Difference inChanges in Equity Transactions of Subsidiaries”.

Acquisitions of subsidiaries that qualify a restructuring transaction of entities under common control areaccounted for in accordance with SFAS 38 (Revised 2004), “Accounting for Restructuring Transactionsof Business under Common Control”. Based on this standard, acquisition of a subsidiary is accountedbased on the pooling of interest, wherein assets and liabilities of a subsidiary are recorded at their bookvalues. The difference between the transfer price and the Company’s interest in the subsidiary’s bookvalues, if any, is recorded as “Difference in Value from Restructuring Transactions of Entities underCommon Control” and presented as a separate component in the Company’s Stockholders’ Equity.

The consolidated statement of income for the year ended December 31, 2010 includedPT Matahari Departement Store Tbk ’s (MPP’s subsidiary) accounts for period January 1, 2010 toMarch 31, 2010 and also included Congrex Limited’s account for period January 1, 2010 to December31 2010 (Notes 1.c, 32 and 40).

2.c. Cash EquivalentsCash equivalents consist of short-term time deposits with maturities of 3 (three) months or less sincethe time of their placement, not pledged as collateral and unrestricted.

2.d. Financial Assets and Financial Liabilities

Effective January 1, 2010, the Company has applied SFAS 55 (Revised 2006), “Financial Instruments:Recognition and Measurement” and SFAS 50 (Revised 2006), “Financial Instruments: Presentationand Disclosures”, which supersede SFAS 55 (Revised 1999), “Accounting for Derivative Instrumentsand Hedging Activities” and SFAS 50, “Accounting for Certain Investments in Securities”.

For the purposes of applying SFAS 50 (Revised 2006) and SFAS 55 (Revised 2006), the Companyhas classified the financial instruments in form of financial assets and financial liabilities.

Financial assets are classified as follows:

1. Financial assets at fair value through profit or lossFinancial assets are classified as held for trading if they are acquired for the purpose of selling inthe near term or where there is evidence of a recent actual pattern of short-term profit-taking.Derivative assets are also classified as held for trading unless they are designated as effectivehedging instruments. Financial assets at fair value through profit and loss are carried in theconsolidated balance sheet at fair value. Unrealized gains or losses are recognized in the currentperiod.

Financial assets at fair value through profit or loss comprise of part of the Company’s short terminvestments that are held for trading.



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2. Held to maturities investmentsHeld to maturities investments are non-derivative financial assets with fixed or determinablepayments and fixed maturities, and the management has the positive intention and ability to holdthem to maturity, except:

a. those that the Company upon initial recognition designates as at fair value through profit orloss;

b. those that the Company designates as available for sale; andc. those that meet the definition of loans and receivables.

After initial measurement, held to maturities investments are measured at fair value and theirtransaction costs and subsequently measured at amortized cost using the effective interest ratemethod.

Held to maturities investments comprise of part of Company’s short term investments that are heldto maturities.

3. Loans and ReceivablesLoans and receivables are non-derivative financial assets with fixed or determinable payments thatare not quoted in an active market. At initial measurement, loans and receivables are measured atfair value and their transaction costs and subsequently measured at amortized cost using theeffective interest rate method, except for short term loans and receivables where the effect ofdiscounting is immaterial.

Loans and receivables comprise of trade and other receivables (Note 2.f) and cash and cashequivalents (Note 2.c) on the consolidated balance sheets.

4. Available for sale financial assetsAvailable for sale financial assets are non-derivative financial assets that are designated asavailable-for-sale or are not classified in any of the three preceding categories. At initialmeasurement, these assets are recorded at fair value. The different between the acquisition costswith fair value at the balance sheet date is recorded as unrealized gains or losses as part ofshareholders’ equity (Note 2.b).

Financial assets that are classified as available for sale financial assets comprise of most of theCompany’s long term investments.

The Company uses accounting for settlement date for regular-way contracts when recorded financialassets transactions.

Financial liabilities are classified as follows:

1. Financial liabilities at fair value through profit or lossFinancial liabilities at fair value through profit or loss are financial liabilities that are transferable ina short term period. Derivative instrument is classified as financial liabilities at fair value thoughprofit or loss unless they are designated as effective hedging instruments.

In the year 2010, there are no financial liabilities that are classified as financial liabilities at fairvalue through profit or loss.



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2. Financial liabilities measured at amortized costFinancial liabilities that are not classified as financial liabilities at fair value through profit or lossare categorized as financial liabilities measured at amortized cost.

Financial liabilities measured at amortized cost comprise of, among others, trade payables, otherpayables, accrued expenses, loans, and bonds payables.

2.e. InvestmentsInvestment consist of:

1. Investment in associated company and long-term Investment in Shares of StockInvestments in shares of stock wherein the Company and subsidiaries have an ownership interestof at least 20% but not exceeding 50% are accounted for under the equity method. Under thismethod, the investments are initially stated at cost, adjusted for the Company's and subsidiaries'share in the net earnings (losses) of the associated companies after acquisition, dividendsreceived and straight-line amortization over a 20 (twenty) years period of the difference betweenthe cost of such investment and the investor's proportionate share in the underlying net assets ofthe investee at the date of acquisition. Investment wherein the Company and subsidiaries have anownership interest of less than 20% are stated at cost. The Company reviews and evaluatesperiodically the carrying values of goodwill, taking into consideration current results and futureprospects of the related associate.

The changes in the equity transactions of associates are presented as additions to or reductionsfrom Stockholders' Equity under the account “Changes in the Equity Transactions ofa Subsidiary/Associates” in the consolidated balance sheets.

2. Investment PropertiesThe Company and subsidiaries have applied SFAS No. 13 (Revised 2007), “Investment Property”,which supersedes SFAS No. 13 (1994) “Accounting for Investment”, and chosen the cost model.Investment property is depreciated under straight-line method over 20 years, except land which isnot depreciated and presented under “Other Non-current Assets”.

Investment property comprise of lands, buildings and infrastructures, held by the Company andsubsidiaries to earn rentals or for capital appreciation or both, and are not utilized for use in theproduction or supply of goods or services, for administrative purposes or sale in the ordinarycourse of business.

Investment property shall be derecognized when the investment property is permanentlywithdrawn from use and no future economic benefits are expected from its disposal. Any gains orlosses are recognised in the consolidated statement of income.

2.f. Allowance for Doubtful AccountsAllowance for doubtful accounts is provided based on a review of the status of the individual receivableaccounts at the end of the year.

The outstanding balance of receivables is written off against the respective allowance for doubtfulaccounts or directly written off when management believes that these assets are determined to bedefinitely uncollectible.



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2.g. InventoriesInformation technology and other inventories, except for goods in transit, are carried at the lower ofcost or net realizable value. Cost is determined by the moving average method, except for the cost ofcertain inventories which is determined by the specific identification method. Goods in transit arecarried at cost.

Retail and distribution merchandise inventories are stated at lower of cost, determined by theconventional retail method, or net realizable value. The merchandise inventory does not include goodson consignment.

Allowance for inventory obsolescence is provided based on the review of the condition of the individualinventory items at the end of the year, while the allowance for decline in value is provided to reduce thecarrying values of the inventories to their net realizable values.

2.h. Prepaid ExpensesPrepaid expenses are amortized over their beneficial periods by using the straight-line method.

2.i. Property and EquipmentThe Company and subsidiaries have applied SFAS No. 16 (Revised 2007), “Fixed Assets”, whichsupersedes SFAS No. 16 (1994), “Fixed Assets and Other Assets”, and SFAS No. 17 (1994),“Accounting for Depreciation” and chosen the cost model.

Property and equipment are carried at cost less their accumulated depreciation and value impairment.Depreciation is computed over the estimated useful live of the assets using the following methods:

Method Year Rate

Buildings Straight-line 20 --Building Improvement and Renovation Straight-line 2 - 20 --Equipment and Installations Double-declining

balance-- 15% and 25%

Machineries Straight-line 3 - 5 --Computers Straight-line 3 - 5 --Fixtures, Furnitures and Equipments Straight-line 3 - 5 --Equipments for Rental and Advertising Equipments Straight-line 2 - 5 --Transportation Equipments Straight-line 2 - 5 --Assets under Capital Lease – Motor Vehicles Straight-line 5 --

The assets’ residual values, useful lives and methods of depreciation are reviewed at each financialyear end.

Landrights are stated at cost and are not amortized, unless there is a management’s prediction or theprobability that extension or renewal of the title is highly unlikely or definitely will not be obtained.

Land is stated at cost and is not depreciated. In accordance with SFAS No. 47 “Accounting for Land”,the Company and subsidiaries recognized the acquisition cost of land separately from the legalexpenditures incurred to acquire the land rights and the expenditures for the subsequent extensionthereof. These expenditures are deferred and presented as part of Other Non-Current Assets in theconsolidated balance sheet and amortized over the period the landrights are valid.

Construction in progress is carried at cost and presented as part of property and equipment. Theaccumulated costs will be reclassified to the appropriate property and equipment account whenconstruction is substantially completed and the asset is ready for its intended use.



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The cost of repairs and maintenance is charged to statement of income as incurred; significantrenewals and betterments are capitalized. When assets are retired or otherwise disposed of, the costand the related accumulated depreciation are removed from the respective accounts and any resultinggain or loss is credited or charged to current operations.

2.j. LeasesThe classification of a lease is determined based on whether the lessor or lessee controls substantiallyall the risks and rewards incidental to ownership. Leases which do not transfer substantially all the risksand rewards incidental to ownership are classified as operating leases. Operating lease payments arerecognized as an expense on a straight-line basis over the lease term. Lease income from operatingleases is amortized on a straight-line basis over the lease term.

The gain or loss on sale-and-leaseback transaction that results in an operating lease, where it is clearthat the transaction is established at fair value, shall be recognized immediately. If the sale price isbelow fair value, any profit or loss shall be recognized immediately except that, if the loss iscompensated for by future lease payments at below market price, it shall be deferred and amortized inproportion to the lease payments over the period for which the asset is expected to be used. If the saleprice is above fair value, the excess over fair value shall be deferred and amortized over the period forwhich the asset is expected to be used.

The gain or loss on a sale-and-leaseback transaction that results in a finance lease, is deferred andamortized over the lease term.

Long-term lease with contract value payable in installments over a period shorter than the lease periodis recorded when the lease agreement is effective by debiting “Prepaid Long-term Rent” at the contractvalue and crediting the unpaid portion to “Long-term Debts - Others”.

Prepaid long-term rent, generally on store space, is being amortized on the straight-line methodstarting from the opening of the leased store/renewal of the lease over the lease period. The portion ofthe rent chargeable to operations within one year is reclassified and presented under current assets aspart of “Prepaid Expenses”.

2.k. Deferred Gain on Sale and Lease of Assets TransactionThe gain or loss on the implementation of the restructurization program of certain assets of MPP,a subsidiary, involving the sale and lease of assets transaction is deferred and amortized proportionallybased on the rent expenses related to those assets.

2.l. Impairment in Assets ValueThe Company and subsidiaries review the carrying values of their assets for any impairment andpossible write-down to fair values whenever events or changes in circumstances indicate that theircarrying values may not be fully recovered. The excess of the carrying value over the estimatedrecoverable amount of the asset is charged to current operations.



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2.m. Intangible AssetsCosts in regard with the purchase of software for voice and data communications, accounting programand the updating are deferred and amortized using the straight-line method over the estimated usefullife 4 (four) to 5 (five) years.

Intangible assets also including the excess of acquisition cost over the fair value of net assets ofsubsidiary (goodwill) is amortized by using the straight-line method for 20 (twenty) years.

2.n. Stock and Bond/Notes Issuance CostsBased on Capital Market Regulation No. 06/PM/2000 dated March 13, 2000, stock issuance cost ispresented as deduction of additional paid-in capital.

Prior to January 1, 2010, expenses incurred in connection with the issuance of bonds/notes arededucted from the proceeds thereof. The difference between the net proceeds and the nominal valuerepresents premium or discount that should be amortized over the term of the bonds/notes. EffectiveJanuary 1, 2010, MPP have adopted SFAS 50 (Revised 2006) and SFAS 55 (Revised 2006), theissuance costs of bonds/notes are deducted from proceeds in consolidated balance sheet andamortized using effective interest rate method over the term of bonds/notes.

2.o. Treasury Bonds/NotesRepurchased instrument of indebtedness that are not retired are treated in the consolidated financialstatements as if they were retired. The difference between the face value of the instruments ofindebtedness and the fair value is credited or charged to current operations.

2.p. Revenues and Expenses RecognitionRevenues from sales and services of information technology are recognized when the products orservices are delivered or rendered to the customers. Services income billed or received in advance aredeferred (presented under Other Current Liabilities) and amortized as services are rendered.

Revenue from sales of retail and distribution inventory (except those sold on “Cash-on-Delivery” basiswhich is recognized when the goods are delivered to customers) is recognized when the goods arepaid for at the sales counter. Revenue from consignment sales is recorded at the amount of sales ofconsigned goods to customers, while the related cost is recorded at the amounts payable toconsignors.

Revenue from sales of prepaid cards (known as “Power Card”) by family entertainment centers isinitially recorded as unearned income and then proportionately recognized as earned revenue basedon the actual use of the cards by customers. Revenue from sales of tokens, snacks and beverage arerecognized at the time the tokens snacks/packages are purchased by customers.

Expenses and other income (expense) are recognized when these are incurred/earned (accrual basis).

2.q. Foreign Currencies Transactions and BalancesTransactions involving foreign currencies are recorded in Rupiah amounts at the rates of exchangeprevailing at the time the transactions are made. At balance sheet date, monetary assets and liabilitiesdenominated in foreign currencies are adjusted to Rupiah to reflect the prevailing rates of exchange aspublished by Bank Indonesia at the last transaction date for the year/period. Any resulting gains orlosses are credited or charged to current operations.



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The rates of exchange used (in full Rupiah) are as follows:

2010 2009Rp Rp

1 USD 8,991 9,4001 SGD 6,981 6,6991 RMB 1,358 1,3771 JPY 110 102

2.r. Derivative Instruments and Hedging ActivitiesEffective January 1, 2010, the Companies have adopted SFAS 55 (Revised 2006), “FinancialInstruments: Recognition and Measurement” which supersede SFAS 55 (Revised 1999), “Accountingfor Derivative Instruments and Hedging Activities”.

Based on this revised SFAS 55, derivative instruments are recognized at fair value on the date aderivative contract is entered into. The method of recognizing resulting gains or losses from derivativestransaction is dependent on the nature of the derivative transaction. If derivatives transactions are notqualified as hedging for accounting purposes, the difference between fair value at balance sheet dateand maturity date will be recorded in consolidated statements of income. Changes in fair value ofderivatives instrument that meets the criteria as cash flow hedges will be recorded in the consolidatedstatement of changes in equity on the effective hedged amount. When the instrument is mature, or nolonger meets the criteria of hedges, the cumulative gain or losses will be recorded in the consolidatedstatements of income.

2.s. Segment InformationSegment information of the Company and subsidiaries are presented based on business segment.Business segment is a distinguishable component and provides a different product or service,especially for customers outside the Company.

Geographical segment of the Company and subsidiaries represents a distinguishable component andprovides a different product or services in certain economic environment (location) and the componenthas distinct risk and return from other component which operates in other location.

2.t. Income Tax Benefit (Expense)All temporary differences arising between the tax bases of assets and liabilities and their carrying valueare recognized as deferred tax using liability method. Currently enacted tax rates are used todetermine deferred income tax.

Deferred tax assets relating to the carryforward of unused tax losses are recognized to the extent that itis probable that the future taxable profit will be available against which the unused tax losses can beutilized. A valuation of allowance is provided for the portion of deferred tax assets which is notexpected to be realized in the future. Amendment to tax obligations are recorded when an assessmentis received or, if appealed against, when the result of the appeal is determined.

Current tax is recognized based on taxable income for the year, in accordance with the current taxregulation.

2.u. Estimated Liabilities on Employees BenefitPost employment benefit is recognized at discounted amount when the employees have rendered theirservice to the Company during the accounting period. Liabilities and expenses are measured usingactuarial techniques which include constructive obligation that arises from the Company’s informal



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practices. In calculating the liabilities, the benefit must be discounted by using the projected unit creditmethod.

The Company and certain subsidiaries have defined contribution retirement plans covering certainpermanent employees according to their preference. Contributions are funded and consist ofemployees’ contribution computed at 3% and the Company and subsidiaries contributions at 5% of theemployees basic salaries.

2.v. Basic Earning Per ShareBasic earning per share (EPS) is computed by dividing net income with the weighted average numberof shares outstanding during the year, while for diluted EPS is computed by dividing net income withthe weighted average number of shares outstanding during the year plus dilutive potential commonstocks. Number of weighted average number of shares outstanding as December 31, 2010 and 2009are 5,599,472,739 and 1,696,289,764, respectively. Number of weighted average number of sharesoutstanding on December 31, 2009 has been restated in connection with Reverse Stock by increasingpar value of shares 4 times (Notes 1.b, 22 and 39).

In calculating diluted income per share, the number of weighted average number of outstandingcommon shares has to be adjusted by considering the impact of all potentially dilutive common shareseffect. The exercise price of warrant was higher than the average market price of share in current yearand then diluted earnings per share was not computed for December 31 2010 and 2009.

2.w. Transaction with Related PartiesThe Companies have transactions with certain parties which are regarded as having related partyrelationships as defined by SFAS 7 on “Related Party Disclosures”.

Related parties are defined under SFAS 7 as follows:

(1). Enterprises that, through one or more intermediaries, control, or are controlled by, or are undercommon control with, the reporting enterprise (including holding companies, subsidiaries andfellow subsidiaries);

(2). Associated companies;(3). Individuals owning, directly or indirectly, an interest in the voting power of the reporting enterprise

that gives them significant influence over the enterprise, and close members of the family of anysuch individuals (close members of a family are defined as those members who are able toexercise influence or can be influenced by such individuals in their transactions with the reportingenterprise);

(4). Key management personnel, that is, those persons having authority and responsibility forplanning, directing and controlling the activities of the reporting enterprise, includingcommissioners, directors and managers of the enterprise and close members of the families ofsuch individuals; and

(5). Enterprises in which a substantial interest in the voting power is owned, directly or indirectly, byany person described in (3) or (4) above, or over which such a person is able to exercisesignificant influence. This definition includes enterprises owned by commissioners, directors ormajor stockholders of the reporting enterprise and enterprises that have a member of keymanagement in common with the reporting enterprise.



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2.x. Use of EstimatesThe preparation of the consolidated financial statements is conformity with generally acceptedaccounting principles requires the Company and subsidiaries’ management to make estimates andassumptions that affect the reported amounts of assets and liabilities at the date of the financialstatements and the reported amount of revenue and expenses during the reporting period. Actualresults could be different from these estimates.

2.y. Revised Statement of Financial Accounting Standard (SFAS)The Financial Accounting Standard Board - Indonesian Institute of Accountants has issued thefollowing revised financial accounting standards which might has an impact on the Company’sconsolidated financial statements which applicable for the financial statements covering periodsbeginning on or after January 1, 2011 or later periods:

SFAS 1 (Revised 2009): Presentation of Financial Statements SFAS 2 (Revised 2009): Statement of Cash Flows SFAS 3 (Revised 2010): Interim Financial Statements SFAS 4 (Revised 2009): Consolidated and Separate Financial Statements SFAS 5 (Revised 2009): Operating Segments SFAS 7 (Revised 2010): Related Party Disclosures SFAS 8 (Revised 2010): Events After The Reporting Period SFAS 10 (Revised 2010): The Effects of Changes in Foreign Exchange Rates SFAS 12 (Revised 2009): Interests in Joint Ventures SFAS 15 (Revised 2009): Investment in Associates SFAS 19 (Revised 2010): Intangible Assets SFAS 22 (Revised 2010): Business Combinations SFAS 23 (Revised 2010): Revenue SFAS 25 (Revised 2009): Accounting Policies, Changes in Accounting Estimates, and Errors SFAS 48 (Revised 2009): Impairments of Assets SFAS 57 (Revised 2009): Provisions, Contingent Liabilities, and Contingent Assets SFAS 58 (Revised 2009): Non-current Assets Held for Sale and Discontinued Operations

The Companies have not adopted early any of these SFASs. The Companies are currently studyingthem and have not yet determined the related effects on the consolidated financial statements.



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3. Cash and Cash Equivalents

2010 2009Rp Rp

Cash (including 2010: USD 4, SGD 1 and RMB 1,589;2009: USD 7, SGD 1 and RMB 29) 15,968 42,104

BankPT Bank CIMB Niaga Tbk

(including 2010: USD 34,036; 2009: USD 16,121) 1,539,494 1,024,638PT Bank Danamon Tbk (including 2010: USD 13; 2009: USD 1) 731,804 104,470PT Bank Mega Tbk (including 2010: USD 1,062, JPY 123 and SGD 2;

2009: USD 14, JPY 129 and SGD 2) 309,010 65,045Bank Julius Baer & Co. Ltd (including 2010: USD 10,043 and SGD 332;

2009: USD 12,786 and SGD 332) 92,612 122,413PT Bank Central Asia Tbk (including 2010: USD 2; 2009: USD 10) 44,580 64,849Bank of China (including 2010: USD 1,422 and RMB 10,590) 27,162 --PT Bank Internasional Indonesia Tbk

(including 2010: USD 258; 2009: USD 143) 22,519 312,740China Construction Bank (including 2010: RMB 14,926) 20,264 --PT Bank Negara Indonesia Tbk (including 2010: USD 79;

2009: USD 12,053) 19,891 124,869PT Bank Permata Tbk (including 2010: USD 67: 2009: USD 173) 6,303 350,935Others (including 2010: USD 1,093, RMB 101, HKD 28, Euro 96

SGD 542 and JPY 1,072; 2009: USD 4,487, HKD 681, RMB 101,SGD 542, Euro 154 and JPY 1,073) 52,434 85,228

Sub Total 2,866,073 2,255,187

Time DepositsPT Bank CIMB Niaga Tbk

(including 2010: USD 5,539; 2009: USD 2,433) 125,756 47,792PT Bank Mayapada Internasional Tbk 13,000 11,550PT Bank Permata Tbk -- 50,000Others (including 2010: USD 74; 2009: USD 73) 22,991 22,309

Sub Total 161,747 131,651Total 3,043,788 2,428,942

Annual interest rate of time deposits:2010 2009

Rupiah 5,75% - 8,65% 6,75% - 14%USD 0,13% - 1,8% 1,75% - 3,5%

As of December 31, 2010, the remaining fund obtained from Limited Public Offering V amounting toRp 23,283, which is placed in PT Bank CIMB Niaga Tbk.



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4. Short-term Investments

2010 2009Rp Rp

Related PartiesManaged Funds 1,411,500 1,095,000Marketable Securities

TradingShares of PT Lippo Karawaci Tbk 97,921 73,441Bonds (2010: Sigma Capital Pte Ltd, USD 1,067;

2009: PT Lippo Karawaci Tbk, USD 975) 9,593 9,165Others 136 90

Available for SaleShares of PT Lippo Karawaci Tbk 232,900 125,063

Notes Receivable 29,550 30,000Sub Total 1,781,600 1,332,759

Third PartiesNotes Receivable (2010: USD 18,750; 2009: USD 21,750) 168,581 204,450Commercial Papers (2010: USD 4,335; 2009: USD 7,317) 38,975 68,780Marketable Securities

TradingBonds 24,918 6,132Shares of Stock 50 49

Mutual Funds (including 2010 and 2009: USD 40) 20,527 3,533Restricted Funds (including 2010: USD 109; 2009: USD 89) 3,297 1,553Time Deposits (2010: SGD 93; 2009: USD 1,209 and SGD 93) 652 11,993Manage Funds (USD 2,000) -- 18,800Sub Total 257,000 315,290

Total 2,038,600 1,648,049

The Company and MPP, a subsidiary, entered into fund management agreements with PT CiptadanaSekuritas (CS), a related party. Based on the agreements, which can be extended, the funds placed in CS willbe used for the purchase of investments, such as bonds and other debentures which are not issued by theCompany’s related parties.

The Company placed fund in notes receivable on PT Ciptadana Capital, related party, amounting toRp 29,550 and Rp 30,000 as of December 31, 2010 and 2009, respectively. The Company also placed fundin note receivable on Supreme Capital Limited, Malaysia, third party amounting to USD 18,750 andUSD 21,750 as of December 31, 2010 and 2009, respectively. The notes receivable may be rolled overmonthly, at annual interest rate 14% for Rupiah denominated and ranging from 6% to 8% for USDdenominated in 2010 and 2009.

The unrealized gain from the available for sale shares of PT Lippo Karawaci Tbk, a related party, as ofDecember 31, 2010 and 2009 is amounting to Rp 70,619 and Rp 28,931, respectively.

The bonds bore interest at annual rates ranging from 8.37% to 16.15% in 2010 and ranging from 12.09% to16.15% in 2009.

In April 2009, PT Nadya Putra Investama, a wholly-owned subsidiary of MPP, invested in commercial papersissued by Prime Venture Pte. Ltd. and One Earth Holdings Pte. Ltd. with face values of USD 8,000 andUSD 5,000, respectively. The commercial papers were bought at the price 97.103% and have annual interestrate of 6%. These commercial papers have been extended up to April 7, 2011. As of December 31 2010, the



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face values of the commercial papers issued by Prime Venture Pte. Ltd. and One Earth Holdings Pte. Ltd. areUSD3,000 and USD 1,400, respectively.

The deposit placed by the Company in Credit Suisse Bank, Singapore amounted to Rp 11,368 as ofDecember 31, 2009, represents pledged funds for loan obtained from Credit Suisse Bank (see Note 20).

Restricted fund represents current account (escrow) and deposits used as collateral for loan facility obtainedby the Company and subsidiaries (see Notes 13 and 20).

5. Accounts Receivable

Accounts receivable by type of sales, are as follows:2010 2009Rp Rp

Sales of Information Technology and Others 219,968 80,090Sales of Retail and Distribution 20,305 30,993Total 240,273 111,083Allowance for Doubtful Accounts (15,269) (6,537)Net 225,004 104,546

Accounts receivable trade consist of:2010 2009Rp Rp

Related Parties(including 2010: USD 538; 2009: USD 2,030) 13,221 28,200

Allowance for Doubtful Accounts (7,539) (5,568)Net 5,682 22,632

Third Parties(including 2010: USD 8,751 ; 2009: USD 2,984) 227,052 82,883

Allowance for Doubtful Accounts (7,730) (969)Net 219,322 81,914Total 225,004 104,546

Aging analysis of the trade receivables based on number of days outstanding are as follows:

2010 2009 2010 2009Rp Rp % %

Less than 31 days 208,785 91,786 86.90 82.6331 - 60 days 8,093 3,214 3.37 2.8961 - 90 days 3,106 2,752 1.29 2.48Over 90 days 20,289 13,331 8.44 12.00Total 240,273 111,083 100.00 100.00Allowance for Doubtful Accounts (15,269) (6,537)Net 225,004 104,546

Percentage toTotal Receivables

Total



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Certain accounts receivable of the Company are used as collateral to the Company's short-term and long-term loans facilities (Notes 13 and 20).

Other receivables consist of:2010 2009Rp Rp

RentalThird Parties 116,770 93,871Related Parties 1,509 830Sub Total 118,279 94,701

Insurance Claims - Third Parties 14,921 14,211

Other - netThird Parties 60,698 32,533Related Parties 4,856 1,064Sub Total 65,554 33,597Total 198,754 142,509

On September 30, 2009, the stores owned by MPP, a subsidiary, and PT Matahari Graha Fantasi, aSubsidiary of MPP, located in Padang, were damaged by earthquake. The total book value of the damagedinventories and property and equipment were reclassified to “Account receivable - Others - insurance claim”.Insurance claim have received by MGF in 2010.

The change in the allowance for doubtful accounts is as follows:2010 2009Rp Rp

Balance at Beginning of the Year 6,537 3,264Provision During the Year 8,732 3,273Balance at End of the Year 15,269 6,537

Based on the review of the status of the individual debtors at the end of the year, the Company andsubsidiaries' management are of the opinion that the allowance for doubtful accounts amounting to Rp 15,269and Rp 6,537 as of December 31, 2010 and 2009, respectively, is adequate to cover possible losses from thenon collection of the accounts.



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6. Inventories - Net

2010 2009Rp Rp

Retail and DistributionDaily Needs, Food and Beverages 940,397 775,584Books and Stationeries 29,303 32,083Bags, Cosmetics and Accessories 2,550 13,381Toys and Sport Gadgets 13 12,463Ladies' Wear -- 81,222Men's Wear -- 81,145Children's Wear -- 67,001Shoes -- 74,420Household Appliance and Bathroom Accessories -- 34,506Sub Total 972,263 1,171,805

Information Technology 91,855 64,406Others 552 190Total 1,064,670 1,236,401Allowance for Inventory Obsolescence (7,223) (3,319)Net 1,057,447 1,233,082

The management believes that the merchandise inventories value represent the net realizable value.

The Company and subsidiaries' management are of the opinion that the allowance for inventory obsolescenceis adequate to cover possible losses from inventory obsolescence.

Merchandise inventory is covered by insurance against losses by fire and other risk under blanket policiesamounting to Rp 2,625,073 and Rp 1,367,231 as of December 31, 2010 and 2009, respectively, which in theCompany and subsidiaries' management opinion, is adequate to cover possible losses arising from suchrisks. The insurance coverage is covered by PT Asuransi Tri Pakarta, PT Asuransi Wahana Tata,PT Asuransi Central Asia, PT Lippo General Insurance Tbk (affiliate), PT Asuransi Bintang Tbk and ChinaPing An Property Insurance.

Certain inventories are used as collateral to the Company and subsidiaries’ loans (Notes 13 and 20).



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7. Investments in Associates

December 31, 2010Percentage Balance at Addition Equity in Net Devidend Balance at

Ownership Beginning (Deduction) Earnings Received End ofof the Year (Losses) the Year

Associate Company (%) Rp Rp Rp Rp Rp

PT First Media Tbk (FM) 33.77% 125,306 154,055 7,514 -- 286,875PT Bintang Sidoraya (BSR) 24.00% 2,380 -- -- -- 2,380PT Matahari Leisure (ML) 50.00% 26,638 -- (1,833) -- 24,805

PT Tason Mitra Prima (TMP) 50.00% 2,082 -- -- -- 2,082PT Karya Dinamika Investasi (KDI) 36.36% 400 -- -- -- 400

PT Natrindo Global Telekomunikasi (NGT) 20.00% -- -- -- -- --PT Tirta Mandiri Sejahtera (TMS) 20.00% -- -- -- -- --

Total 156,806 154,055 5,681 -- 316,542

Mutation During the Year

December 31, 2009Percentage Balance at Addition Equity in Net Devidend Balance atOwnership Beginning (Deduction) Earnings Received End of

of the Year (Losses) the YearAssociate Company (%) Rp Rp Rp Rp Rp

PT First Media Tbk (FM) 33.77% 115,841 -- 9,465 -- 125,306PT Bintang Sidoraya (BSR) 24.00% 2,380 -- -- -- 2,380PT Matahari Leisure (ML) 50.00% 27,291 -- (653) -- 26,638PT Tason Mitra Prima (TMP) 50.00% 2,082 -- -- -- 2,082PT Karya Dinamika Investasi (KDI) 36.36% 400 -- -- -- 400PT Lippo Securities Tbk (LS) -- 55,440 (57,388) 1,948 -- --PT Natrindo Global Telekomunikasi (NGT) 20.00% -- -- -- -- --PT Tirta Mandiri Sejahtera (TMS) 20.00% -- -- -- -- --Total 203,434 (57,388) 10,760 -- 156,806

Mutation During the Year

(a) The investment in ML and KDI were acquired through MPP, a subsidiary. ML is engaged in themanufacture of amusement machines. PT Nadya Putra Investama, MPP’s subsidiary, owns the 36.36%share ownership in KDI which has not started its commercial operation.

(b) The investment in BSR and TMP were acquired through PT Taraprima Reksabuana, MPP’s subsidiary.BSR is engaged in the sale and marketing of beer, while TMP has not started its commercial operations.

(c) NGT is engaged in telecommunication services. TMS is engaged in trading, industry, mining, real estate,agribusiness and other services. NGT and TMS have not started their commercial operations. Investmentin NGT and TMS have zero balance due to accumulated losses exceeded cost of investments.



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8. Other Long-term Investments

2010 2009Rp Rp

Investment in Shares of Stock Which have Accounted forUnder the Cost Method 882,853 5,138

Investment in LMIR Trust Unit(2010: SGD 26,706; 2009: SGD 25,446) 186,425 170,453

Total 1,069,278 175,591

a. The investments in shares of stock which accounted for under the cost method consist of the following:Jan 1, 2010 Addition Dec 31, 2010

(Deduction)Rp Rp Rp

Investments in:Meadow Asia Company Limited (MAC)

Preferred Stock -- 711,252 711,252Common Stock -- 171,596 171,596

PT Courts Indonesia Tbk (CI) 4,251 -- 4,251PT AsiaNet Multimedia (ANM) 507 -- 507PT Multipolar Telemedia (MT) 250 -- 250PT Lippo On Line (LOL) 125 -- 125BigboXX.com (CI) Limited (BCL) 5 -- 5Others (under Rp 1) -- -- --

Total 5,138 882,848 887,986Allowance for Impairment Value -- (5,133) (5,133)Net 5,138 877,715 882,853

Jan 1, 2009 Addition Dec 31, 2009(Deduction)

Rp Rp RpInvestments in:

PT Courts Indonesia Tbk (CI) 4,251 -- 4,251PT AsiaNet Multimedia (ANM) 507 -- 507PT Multipolar Telemedia (MT) 250 -- 250PT Lippo On Line (LOL) 125 -- 125PT Bakti Sarana Ventura (BSV) 100 (100) --BigboXX.com (CI) Limited (BCL) 5 -- 5Lainnya (dibawah Rp 1) -- -- --

Total 5,238 (100) 5,138

PT Matahari Pacific (MP), a wholly-owned a MPP’s subsidiary, owns investments in MAC’s preferredstocks and common stocks in connection with the transfer of all shares ownership of PT MatahariDepartment Store Tbk (MDS) (Note 32) amounted Rp711,252 and Rp171,596, respectively. Thesepreferred stocks have no voting rights (non-voting) except for those rights that are associated withchanges in the rights of preferred stocks or on the liquidation of the company. The preferred stocks givethe stockholders a cumulative dividend of 13% per year. The decision to distribute the preferred stocksdividend is solely based on the authority of MAC and MAC has the power to redeem these stock at anytime.



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MAC does not have other businesses besides investments in Asia Color Company Limited (ACC). ACChas investments only in PT Meadow Indonesia (MI), and MI has investments only inMDS. Indirect ownership of MP on MDS is 19.63%. With indirect ownership of less than 20%, MPP isconsidered not have a significant influence on the MAC therefore the investment is accounted using thecost method. Under the cost method, an investor records its investment in an investee at acquisition cost(Note 2.e).

The investment in CI, owned by MPP, a subsidiary represents 4.9889% ownership. CI is engaged in theelectronics and furniture retail business. As of December 31, 2010, MPP made provision for thisinvestment.

Prime Connection Limited, a MPP’s subsidiary, owns the investment in BCL, a company which is part ofHutchison Whampoa Ltd. - Hong Kong, a business group which is engaged in the retail and distributionbusiness.

Investment in shares of these companies (excluding MAC) has an ownership interest between 1% to10%.

b. Tristar Capital Limited (Tristar), a MPP’s subsidiary, hold available-for-sale investment of 50,389,000units of LMIR Trust, a trust which has investments in assets such as commercial mall and retail spaces.As of December 31, 2010 and 2009, the market values of the units were Rp186,425 and Rp170,453,respectively. In 2009, unrealized loss of the differences between the fair value and acquisition cost of theinvestment amounted to Rp86,732 was recorded as part of stockholders’ equity. In 2010, MPP identifiedimpairment for the investment based on the historical prices factor and the prolonged period of theinvestment, where for the period when MPP holds the investment, the market price is always below itscost. Therefore, MPP has reclassified the difference between market value and the costs of investmentsamounted to Rp70,760 from the stockholders’ equity section to "Other charges (income)" in consolidatedstatements of income.

9. Property and Equipment

Beginning Additions Deductions Transfer in (Out) EndingBalance Balance

Rp Rp Rp Rp RpCarrying ValueDirect Ownership

Landrights 131,986 38,094 -- -- 170,080Building 1,035,794 -- 579 7,478 1,042,693Building Improvements and Renovations 450,468 363,676 275,224 26,366 565,286Computer 65,267 54,567 1,610 -- 118,224Office Furniture, Fixtures and

Equipments 31,859 14,133 187 -- 45,805Transportation Equipment 742,039 903 11,796 160 731,306Equipment and Installment 1,450,298 39,074 986,021 97,677 601,028Machineries 292,001 9,511 10,292 8,871 300,091Equipment for Rental 251,692 81,908 64,089 28,273 297,784Advertising Apparatus 15 -- -- -- 15Sub Total 4,451,419 601,866 1,349,798 168,825 3,872,312

Leased Assets 2,261 -- -- -- 2,2614,453,680 601,866 1,349,798 168,825 3,874,573

Construction in Progress 3,137 35,018 -- (32,215) 5,940Total 4,456,817 636,884 1,349,798 136,610 3,880,513

2010



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Rp Rp Rp Rp Rp

Accumulated DepreciationDirect Ownership

Landrights 462 792 -- -- 1,254Building 293,596 51,286 271 -- 344,611Building Improvements and Renovations 197,962 147,013 128,135 -- 216,840Computer 52,421 9,845 1,570 -- 60,696Office Furniture, Fixtures and

Equipments 23,468 5,593 187 -- 28,874Transportation Equipment 60,206 3,424 10,841 -- 52,789Equipment and Installment 1,053,866 152,668 598,196 -- 608,338Machineries 274,368 24,617 10,289 -- 288,696Equipment for Rental 217,552 33,247 64,089 -- 186,710Advertising Apparatus 15 21 -- -- 36Sub Total 2,173,916 428,506 813,578 -- 1,788,844

Leased Assets 602 452 -- -- 1,054Total 2,174,518 428,958 813,578 -- 1,789,898Impairment of Fixed Assets

Landrights -- 7,161 -- -- 7,161Building -- 68,496 -- -- 68,496Building Renovations -- 868 868 -- --Equipment and Installment -- 13,163 10,537 -- 2,626

Total -- 89,688 11,405 -- 78,283Book Value 2,282,299 2,012,332

2010


Rp Rp Rp Rp RpCarrying ValueDirect Ownership

Landrights 131,986 -- -- -- 131,986Building 862,270 76,818 26,347 123,053 1,035,794Building Improvements and Renovations 399,214 33,756 89,005 106,503 450,468Computer 61,558 3,838 129 -- 65,267Office Furniture, Fixtures and

Equipments 27,519 3,996 27 371 31,859Transportation Equipment 450,075 36,872 2,170 257,262 742,039Equipment and Installment 1,528,001 124,204 228,920 27,013 1,450,298Machineries 280,556 10,396 2,756 3,805 292,001Equipment for Rental 234,118 13,424 -- 4,150 251,692Advertising Apparatus 15 -- -- -- 15Sub Total 3,975,312 303,304 349,354 522,157 4,451,419

Leased Assets 2,261 -- -- -- 2,2613,977,573 303,304 349,354 522,157 4,453,680

Construction in Progress 4,517 946 -- (2,326) 3,137Total 3,982,090 304,250 349,354 519,831 4,456,817

2009



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Rp Rp Rp Rp Rp

Accumulated DepreciationDirect Ownership

Landrights -- 462 -- -- 462Building 243,133 61,077 10,614 -- 293,596Building Improvements and Renovations 164,772 87,737 54,409 (138) 197,962Computer 46,365 6,178 122 -- 52,421Office Furniture, Fixtures and

Equipments 20,746 2,749 27 -- 23,468Transportation Equipment 22,745 39,639 2,178 -- 60,206Equipment and Installment 999,343 228,657 174,272 138 1,053,866Machineries 249,440 27,665 2,737 -- 274,368Equipment for Rental 200,532 17,020 -- -- 217,552Advertising Apparatus 15 -- -- -- 15Sub Total 1,947,091 471,184 244,359 -- 2,173,916

Leased Assets 244 358 -- -- 602Total 1,947,335 471,542 244,359 -- 2,174,518Book Value 2,034,755 2,282,299Allowance for Possible Loss from

Disposal (24,897) (47,000) (71,897) -- --Net 2,009,858 2,282,299

2009

The Company and subsidiaries’ land represent HGB and HMRS on land located in several cities in Indonesia.HGB and HMRS will expire on various dates from year 2010 (in process for renewal) to 2038. Themanagement of the Company and subsidiaries believe that no impairment of assets value contemplated inSFAS 48, “Impairment of Assets Value”, has occurred as of December 31, 2010.

Disposal of fixed asset in 2010 included fixed asset owned by PT Matahari Depatment Store Tbk amountingto Rp521,036 which is no longer consolidated since April 1 , 2010. Addition of fixed asset in 2010 includedfixed asset owned by Congrex Limited (Notes 1.c and 2.b) and in 2009 included asset owned byPT Air Pacific Utama (Note 1.c)

Depreciation for the years ended December 31, 2010 and 2009 charged to the following:

2010 2009Rp Rp

General and Administrative Expenses (Note 30) 291,606 411,329Cost of Sales (Note 29) 36,290 19,231Selling Expenses (Note 30) 33,470 664Other Expenses -Others 1,616 5,767Total 362,982 436,991



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In 2010 and 2009, the Company and subsidiaries recorded loss on sales of property and equipments asfollows:

2010 2009Rp Rp

Proceeds 21,636 7,332Net Book Value (22,478) (33,098)Loss (842) (25,766)

On November 19, 2007, MPP, a subsidiary and Tristar, a subsidiary of MPP, entered into sale of investmentin shares and asset sale and lease transactions on properties located in Madiun, Semarang, Malang,Tangerang, Depok and Medan (Note 35). The difference between the proceeds from the sale and net bookvalue was recorded as deferred gain on asset sale and lease transactions and amortized proportionally overthe rental period based on the rent expenses related to those assets as follows:

2010 2009Rp Rp

Balance at Beginning of Year 349,427 387,789Amortization (41,431) (38,362)Balance at End of Year 307,996 349,427Less: Current Portion (44,745) (41,431)

Long-term Portion 263,251 307,996

In 2010, MPP, a subsidiary, has reviewed some of its assets and impaired certain of its property andequipment amounted to Rp 89,688.

Property and equipment are covered by insurance against losses by fire and other risks under blanketpolicies

Approximately amounting to Rp 4,233,991 in 2010 and Rp 3,558,369 in 2009. The management of theCompany and subsidiaries believe that the insurance coverage is adequate to cover possible losses from fireand other risks. The insurance coverage is covered by PT Asuransi Tri Pakarta, PT Asuransi PermataNipponkoa Indonesia, PT Asuransi Central Asia, PT Lippo General Insurance (affiliate) and PT AsuransiBintang Tbk.

Certain property and equipment are pledged as collateral to short term and long term loans obtained by theCompany (Notes 13 and 20).

10. Rental Advances

This account represents rental advances made to building owners for new stores owned by subsidiaries. Therental advances are used for rental payment at the start of the rental period (see Note 35). Rental advance torelated parties amounting to Rp 625,693 and Rp 610,693 as of December 31, 2010 and 2009, respectively(Note 34).

In April 2010, MPP has reviewed some of its assets in relation with the sale of its investment inPT Matahari Department Store Tbk (Note 32). On this basis, MPP has impaired its rental advances amountedto Rp 644,721.



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11. Prepaid Long Term Rent - Net

This account represents the long-term rent prepayment for MPP’s stores located at Pejaten Village,Bellanova Country Mall, Puri Paragon City, Mega Mall Pluit, Cibubur Junction and other locations in 2010, andMPP’s stores located at Mega Mall Pluit, Pejaten Village, Bellanova Country Mall, Puri Paragon City, CibuburJunction and other location in 2009.

Prepaid long term rent-net to related parties amounting to Rp 146,300 and Rp 150,248 as of December 31,2010 and 2009, respectively (Note 34).

In April 2010, MPP has reviewed some of its assets in relation with the sale of its investment in PT MatahariDepartment Store Tbk (Note 32). On this basis, MPP has impaired its rental advances amounted toRp129,215.

12. Advances for Purchase of Property and Equipment

This account includes advances for purchase of equipment and installations for MPP’s stores, subsidiary. Theadvances account will be reclassified to property and equipment upon the transfer of the stores to MPP aftercompletion of construction/installation or delivery of the equipment purchased.

13. Short-term Loan

2010 2009Rp Rp

PT Bank CIMB Niaga Tbk 260,000 15,000PT Bank Negara Indonesia (Persero) Tbk 115,000 125,000PT Bank Mandiri (Persero) Tbk 17,000 25,000Standard Chartered Bank, Jakarta (2010: USD 820; 2009: USD 581) 11,648 5,462PT Bank Permata Tbk (including USD 4,113) -- 78,666Total 403,648 249,128

PT Bank CIMB Niaga TbkThe loan obtained by the Company from PT Bank CIMB Niaga Tbk represents fixed loan on demand andoverdraft facility with maximum amount of Rp 55,000 and will due on March 14, 2011. On 2010, the Companyobtained working capital credit facility in the form of special transaction loan (on liquidation basis) amountingto Rp250,000 will mature on April 2011 and working capital credit facility amounting to Rp75,000 will matureon March 2011.

PT Bank Negara Indonesia (Persero) TbkThe loan obtained by the Company from PT Bank Negara Indonesia (Persero) Tbk represents working capitalcredit facilities with total maximum amount of Rp 150,000 and will mature on June 12, 2011.

PT Bank Mandiri (Persero) TbkThe loan obtained by the Company from PT Bank Mandiri (Persero) Tbk represents revolving working capitalcredit facility with maximum amount of Rp 52,000 and will mature on November 16, 2011.



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Standard Chartered BankThe loans obtained by the Company from Standard Chartered Bank, Jakarta represents credit facility relatedto procurement with maximum amount of USD 3,000. This loan facility is available until December 31, 2011.

PT Bank Permata TbkThe loan obtained by the Company from PT Bank Permata Tbk represents revolving loan facility for financethe purchase of inventories with maximum amount of USD 1,500 for 1 year period and may be extended, andloan facility with maximum amount of USD 10,000 (Note 20).

For all the above loan facilities, the Company were charged with interest at annual rates ranging from 11% to15% for Rupiah and 2.5% to 9.5% for USD in 2010 and ranging from 11% to 16% for Rupiah and 3.5% to9.5% for USD in 2009. The above loan agreements require the Company to comply with certain conditions,such as maintaining specific financial ratios. As of December 31, 2010 and 2009, all of these financial ratioshave been met. These loan facilities are collateralized by trade receivables, inventories, property andequipments and ownerships in certain associate company (Notes 5, 6, 7 and 9).

14. Accounts Payable - Trade

This account represents payable to suppliers:2010 2009Rp Rp

Direct Purchase 1,062,823 927,257Consignment 120,277 404,082

Total 1,183,100 1,331,339

The detail of accounts payable based on currency denominated, are as follows:2010 2009

Rp RpRupiah 1,119,630 1,299,987US Dollar (2010:USD 7,059; 2009: USD 3,335) 63,470 31,352

Total 1,183,100 1,331,339

The amounts due to suppliers as of December 31, 2010 and 2009, all are paid in the next quarter.

15. Other Payables

This account primarily represents MPP’s liabilities, a subsidiary, to contractors for building renovation work,including store decoration, and to other parties for marketing expenses. In addition, this account consists ofthe third interim dividend payable to MPP’s minority shareholders as of December 31, 2010 (Note 41) and theestimated liabilities relating to MPP’ customer loyalty program amounting to Rp18,136 as of December 31,2009.



D1/March 30, 2011 38 Sign:

16. Taxation

a. Income Tax Benefit (Expense)A reconciliation between income (loss) before income tax expense, as shown in the consolidatedstatements of income, and estimated tax loss of the Company is as follows:

2010 2009Rp Rp

Income (Loss) before Income Tax Expense per Consolidated Statement of Income (123,008) 343,210

Loss (Income) before Income Tax Expense of Consolidated Subsidiaries 2,845,992 (232,519)Income (Loss) before Tax Expense Attributable to the Company 2,722,984 110,691

Permanent Differences:Equity in Net Earnings of Subsidiaries/Associates (2,732,245) (141,270)Others (12,482) (8,014)Sub Total (2,744,727) (149,284)

Timing Differences:Depreciation and Amortization (4,101) (7,100)Employee's Benefits 2,322 2,379Equity in Net Earnings of Subsidiaries/Associates (5,510) (4,249)Allowance for Doubtfull Account 12,636 3,882Unrealized Gain of Difference in Value from Restructuring Transaction of Entities

under Common Control 49,997 --Others 28,799 33,815Sub Total 84,143 28,727

Estimated Tax Loss 62,400 (9,866)Tax Loss Carryforward (247,400) (259,754)Correction from Tax Office, including Adjustment and Expired Tax Loss 57,966 22,220

Estimated Tax Loss Carryforward can be Compensated (127,034) (247,400)

The income tax expense and the computations of the estimated corporate income tax payable (claim forincome tax refund) are as follows:

Company Subsidiaries Company SubsidiariesRp Rp Rp Rp

Income Tax Expenses -- 37,317 -- 29,752Prepayment of Income Taxes

Article 22 2,870 1,258 2,860 450Article 23 6,414 1,696 4,456 33,114Article 25 and others -- -- -- 16,820

Total Prepayments of Income 9,284 2,954 7,316 50,384

Estimated Corporate Income Tax Payable (Claim forIncome Tax Refund) (9,284) 34,363 (7,316) (20,632)

2010 2009

In April 2010, the Company has received net tax refund amounting to Rp 13,268 after considering UnderPayment Tax Assessment Notice for Income Tax article 23. In April 2009, the Company has received nettax refund amounting to Rp 17,446 after considering Under Payment Tax Assessment Notice for IncomeTax article 23 and Value Added Tax.



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b. Deferred Tax Assets (Liabilities)-NetA computation of deferred income tax benefit (expense) on temporary significant differences using themaximum tax rate of 25% in 2010 and 2009 , respectively, is as follows:

2010 2009Rp Rp

The CompanyAccumulated Tax Loss - including Correction from Tax Office (41,878) 2,467Allowance for Doubtfull Accounts 3,159 971Employee Benefits 581 595Equity in Net Earnings of Subsidiaries/Associates (1,378) (1,062)Depreciation and Amortization (1,026) (1,775)Realized Income of Difference in Value of Restructuring Transactions

of Entities Under Common Control 12,499 --Adjustment Related with Tax Tariff Decline -- (6,157)Others 22,429 4,961Net (5,614) --

SubsidiariesPT Matahari Putra Prima Tbk and Subsidiaries 62,941 (50,855)PT Multifiling Mitra Indonesia Tbk 369 (68)PT Multipolar Technology (1,702) (51)PT Sharestar Indonesia 33 (15)PT Visionet Internasional (1,541) (752)PT Air Pasifik Utama (264) (1,080)Sub Total 59,835 (52,821)

Deferred Tax Benefit - Net 54,221 (52,821)

Accumulated deferred income tax benefit (expense) presented as Deferred Tax Assets (Liabilities)-Net inthe consolidated balance sheets, with details as follows:

2010 2009Rp Rp

The CompanyTax Losses 19,972 61,850Accumulated Depreciation and Disposal of Fixed Asset 2,274 3,300Employee Benefits 4,597 4,016Allowance for Inventories Obsolescence 1,806 830Allowance for Doubtful Accounts 3,895 1,712Accumulated Equity in Net Earning of Associates (8,785) (7,407)Realized Income of Difference in Value of Restructuring Transactions

of Entities Under Common Control 12,499 --Others (36,258) (58,687)Net -- 5,614

SubsidiariesPT Matahari Putra Prima Tbk and Subsidiaries 304,730 50,423PT Air Pasifik Utama 4,201 4,508PT Multifiling Mitra Indonesia 975 606PT Sharestar Indonesia 523 490Sub Total 310,429 56,027

Deferred Tax Assets - Net 310,429 61,641

Deferred Tax Liabilities - NetPT Matahari Putra Prima Tbk and Subsidiaries 1,070 --PT Multipolar Technology 1,752 51PT Visionet Internasional 2,862 1,321

Deferred Tax Liabilities - Net 5,685 1,372



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Based on review of the status of the deferred tax assets at the end of year, management believes thatthe allowance for estimated unrecoverable deferred tax assets is adequate to cover unrecoverableamount.

c. Taxes Payable2010 2009Rp Rp

Income Taxes Accrued and WithheldArticle 21 49,627 5,346Article 23 6,906 9,890Article 25 -- 113Article 26 2,160 1,736Article 29 8,329 26,696Article 4 (2) 48 33Others 4,208 1,490

Value Added Tax - Net 41,207 9,767Total 112,485 55,071

17. Accrued Expenses

2010 2009Rp Rp

Maintenance and Services 180,700 94,531Salaries, Allowance and Employee Benefits 139,247 130,403Marketing and Supplies 101,273 68,943Electricity and Energy 29,706 52,533Rent 27,885 54,498Interest 24,986 105,800Others 190,352 127,670

Total 694,149 634,378

18. Bonds Payable

2010 2009Rp Rp

Third Matahari Bonds in Year 2009 with Fixed Rates 302,000 302,000Second Matahari Sukuk Ijarah in Year 2009 226,000 226,000Nominal Value 528,000 528,000Unamortized Bonds Issuance Cost (4,334) (6,193)Net 523,666 521,807

On April 14, 2009, MPP, a subsidiary, issued “Obligasi Matahari Putra Prima III Tahun 2009 dengan TingkatBunga Tetap” (“Third Matahari Bonds”) and “Sukuk Ijarah Matahari Putra Prima II Tahun 2009” (“SecondMatahari Sukuk Ijarah”), with details as follows:

Third Matahari Bonds Series A, with total face value of Rp250,000 in Rp5 denomination. The bonds bearinterest at the fixed rate of 16% per annum for 3 years, starting April 14, 2009 and will mature on April 14,2012;



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Third Matahari Bonds Series B, with total face value of Rp52,000 in Rp5 denomination. The bonds bearinterest at fixed rate of 17% per annum for 5 years, starting April 14, 2009 and will mature on April 14, 2014;

Second Matahari Sukuk Ijarah Series A, with total face value of Rp90,000 in Rp5 denomination. Eachbondholder is entitled to “Ijarah fee” amounted to Rp160 per annum for each Rp1,000. The fee shall be paidfor 3 years starting April 14, 2009. The bonds will mature on April 14, 2012; and

Second Matahari Sukuk Ijarah Series B, with total face value of Rp136,000 in Rp5 denomination. Eachbondholder is entitled to “Ijarah fee” amounted to Rp170 per annum for each Rp1,000. The fee shall be paidfor 5 years starting April 14, 2009. The bonds will mature on April 14, 2014.

PT Kustodian Sentral Efek Indonesia (“KSEI”), acting as the payment agent, pays quarterly interest on thebonds for Third Matahari Bonds and “Ijarah fee” for Second Matahari Sukuk Ijarah with details as follows:

Third Matahari Bonds Series A, starting July 14, 2009 until April 14, 2012;Third Matahari Bonds Series B, starting July 14, 2009 until April 14, 2014;Second Matahari Sukuk Ijarah Series A, starting July 14, 2009 until April 14, 2012; andSecond Matahari Sukuk Ijarah Series B, starting July 14, 2009 until April 14, 2014.

The ratings given by PT Pemeringkat Efek Indonesia are idA+ (Stable Outlook) for Third Matahari Bonds andidA+(sy) (Stable Outlook) for the Second Matahari Sukuk Ijarah at the time the bonds were issued.

PT Bank Mega Tbk conducted as trustee for the Third Matahari Bonds and Second Matahari Sukuk Ijarah.

The MPP’s bonds listing on the Indonesia Stock Exchange (“BEI”) were approved on the basis of the BEIDecision Letter No. Peng-00347/BEI.PSU/04-2009 dated April 14, 2009.

The Third Matahari Bonds and Second Matahari Sukuk Ijarah will not be secured with a certain guarantee.

The proceeds of the Third Matahari Bonds had been earmarked to be used for refinancing the SecondMatahari Bonds which has matured on May 11, 2009.

The proceeds of the Second Matahari Sukuk Ijarah had been earmarked to be used for the lease of storespaces which had been determined in “Akad Wakalah”.

Based on the Bonds Indenture, MPP is required to comply with certain conditions, which all of the conditionshave been met as of December 31, 2010.

The amortization of bonds issuance cost charged to operations for the years ended December 31, 2010 and2009 amounted to Rp1,859 and Rp1,690, respectively.

If the bonds’ annual rating decreases below idA- for the Third Matahari Bonds and idA-(sy) for the SecondMatahari Sukuk Ijarah, MPP should maintain a sinking fund in that year and in the following years for as longas the rating remains at below idA- and idA-(sy) respectively, in amounts determined as follows:

First year, 10% of the face value of the Third Matahari Bonds or Second Matahari Sukuk Ijarah; or Second year, cumulative 15% of the face value of the Third Matahari Bonds or Second Matahari Sukuk

Ijarah; or Third year, cumulative 20% of the face value of the Third Matahari Bonds or Second Matahari Sukuk

Ijarah; or Fourth year, cumulative 25% of the face value of the Third Matahari Bonds or Second Matahari Sukuk

Ijarah; or



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Fifth year, cumulative 30% of the face value of the Third Matahari Bonds or Second Matahari SukukIjarah.

On March 29, 2010, MPP held a General Bondholders’ Meeting of Third Matahari Bonds and SecondMatahari Sukuk Ijarah, and has decided, among others, that after the plan of transferring all of PT MDS’shares (Note 32) has been effective, MPP shall provide a sinking fund, that will be used as a payment reserveas follows:

2% from the principal amount of Third Matahari Bonds and Second Matahari Sukuk Ijarah, which will beprovided on April 14, 2011;

2% from the principal amount of Third Matahari Bonds and Second Matahari Sukuk Ijarah, which will beprovided on April 14, 2012;

2% from the principal amount of Third Matahari Bonds and Second Matahari Sukuk Ijarah, which will beprovided on April 14, 2013.

In addition, MPP also obliged to provide extra one-time coupon of 0.4% from the principal amount of ThirdMatahari Bonds and Second Matahari Sukuk Ijarah to the Bondholders of Third Matahari Bonds and SecondMatahari Sukuk Ijarah that were listed on the Bondholders’ list as of March 29, 2010. The extra coupon waspaid on April 22, 2010.

19. Notes Payable – Net

2009Rp

Notes USD 200,000 matured in Year 2012 1,880,000Unamortized notes discount and issuance cost (91,789)

Net 1,788,211

On July 10, 2009, Matahari International B.V. (“MIBV”), a subsidiary, of MPP, subsidiary, issued an ExchangeOffer Memorandum, whereby MIBV proposed to noteholders of 2009 Notes to exchange 2009 Notes with newnotes issued by MIBV with a maturity date on August 7, 2012 (2012 Notes).

The 2009 Notes amounted to USD79,800 have been exchanged with the 2012 Notes amounted toUSD83,428 in this Exchange Offer program. On October 5, 2009, MF fully repaid the remaining liabilities of2009 Notes.

Simultaneously with the Exchange Offer, on August 7, 2009, MIBV issued new notes (2012 Notes) that willmature on the same date in August 2012, with a total face value of (including issuance of 2012 Notes andexchange offer of 2009 Notes) USD200,000 in USD100 denomination at the price of 97.532%.

The 2012 Notes bear interest at the rate of 10.75% per annum, guaranteed by MPP, a subsidiary and have nocollateral. At any time on or after August 7, 2010, MIBV may redeem the notes, in whole or in part, at pre-determined prices.

The 2012 Notes have been rated “B1” by Moody’s Investors Service, Inc. and “B+” by Standard and Poor’sRating Group, a division of Mc Graw-Hill Companies, Inc and have been listed on the Singapore StockExchange.



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The amortization of notes discount and issuance cost charged to operations for the years ended December31, 2010 and 2009 amounted to Rp91,789 and Rp29,546, respectively.

On August 9, 2010, a year after issuance Notes 2012, MIBV has fully repaid the remaining balance of 2012Notes and paid a premium of 5.375% for early termination of 2012 Notes.

20. Long-term Loans

2010 2009Rp Rp

LoansBank of China Limited (USD 30,000) 269,730 --PT Bank Danamon Indonesia Tbk 235,000 235,000The Hongkong and Shanghai Banking Corporation Ltd 135,000 135,000Raiffeisen Zentralbank Oesterreich AG, Singapore (2010: USD 14,000;

2009: USD 22,000) 125,874 206,800Cisco Systems Capital Asia, Pte Ltd 70,768 --PT Bank Windu Kentjana International Tbk 20,000 --PT Bank Permata Tbk (including 2010: USD 38; 2009: USD 504) 16,967 179,737PT Bank CIMB Niaga Tbk 5,485 241,702PT Bank Mayapada Internasional Tbk 4,273 2,830PT Bank Barclays Indonesia 1,133 1,523Credit Suisse, Singapura (USD 75,000) -- 705,000PT Bank Internasional Indonesia Tbk -- 500,000PT Bank Negara Indonesia (Persero) Tbk -- 430,000PT Bank Mizuho Indonesia -- 200,000Total 884,230 2,837,592

Less: Current MaturitiesPT Bank Danamon Indonesia Tbk 235,000 235,000

The Hongkong and Shanghai Banking Corporation Ltd 135,000 --Raiffeisen Zentralbank Oesterreich AG, Singapore (2010: USD 7,000;

2009: USD 8,000) 62,937 75,200Cisco Systems Capital Asia, Pte Ltd 27,776 --PT Bank Permata Tbk (including 2010: USD 38; 2009: USD 308) 7,093 69,560PT Bank CIMB Niaga Tbk 2,224 1,109PT Bank Mayapada Internasional Tbk 2,205 2,259PT Bank Barclays Indonesia 394 390PT Bank Internasional Indonesia Tbk -- 230,000PT Bank Negara Indonesia (Persero) Tbk -- 280,000PT Bank Mizuho Indonesia -- 200,000

Total 472,629 1,093,518Long-term Portion 411,601 1,744,074

Bank of China LimitedOn January 14, 2010, MPP, a subsidiary obtained from Bank of China Limited a revolving loan facilityamounting to USD30,000. The facility is available up to January 14, 2012.



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PT Bank Danamon Indonesia TbkOn September 8, 2006 and September 19, 2006, MPP, a subsidiary, obtained from PT Bank DanamonIndonesia Tbk two revolving working capital loan facilities amounting to Rp125,000 and Rp110,000,respectively. Up to the report date, the facilities is still in the process for renewal.

Hongkong and Shanghai Banking Corporation LtdOn September 19, 2006, MPP, a subsidiary, obtained a working capital loan facility from HSBC with aprincipal amount of Rp150,000 (or its U.S. dollar equivalent up to a maximum of USD15,000). This facility isavailable up to December 19, 2011. On December 24, 2009, MPP made payment amounted to Rp15,000 toHSBC. This payment is an adjustment to the facility obtained by MPP amounted to USD15,000.

In September 2006, MPP obtained a cross currency swap facility amounting to USD29,000 from HSBC whichis to be used to hedge the currency fluctuation exposure. On July 26, 2007, the cross currency swap facilitywas reduced to USD10,000 and is available up to June 30, 2010. On November 29, 2010, the facilities havebeen extended up to May 31 , 2011.

Raiffeisen Zentralbank Oesterreich AG, SingaporeIn 2008, the Company received loan from Raiffeisen Zentralbank Oesterreich AG, Singapore amounting toUSD 25,000, with repayment schedule for Tranche A with the amount of USD 5,000 and USD 10,000, will dueon May 31, 2010 and 2011, respectively and Tranche B with the amount of USD 3,000 will be due on eachmonth of 12th and 24th and USD 4,000 in month of 36th starting on May 31, 2008.

PT Bank Windu Kentjana International TbkOn September 28, 2010, PT Multifiling Mitra Indonesia Tbk, a subsidiary obtained credit facility from PT BankWindu Kentjana International Tbk (BWK) consisting of demand loan facility and investment credit with amaximum amount of Rp10,000 and Rp 20,000, respectively. Demand loan facility and investment credit haveperiod of 12 months and 60 months, respectively.

PT Bank Permata TbkOn March 30, 2009, MPP, a subsidiary, obtained from Permata a revolving loan facility amounted toRp50,000, which is available up to March 30, 2011 and a term loan facility amounted to Rp100,000, which isavailable up to April 30, 2012. On March 30, 2009, MPP drew down the term loan facility. The term loanfacility is payable in 36 monthly installments in the amount of Rp2,778 each starting April 2009.

On December 23, 2009, MPP obtained from Permata a new term loan facility amounted to Rp100,000 and anadditional revolving loan facility amounted to Rp20,000. The term loan facility is available up to December 30,2012, while the revolving loan facility is available up to March 30, 2011.

On December 28, 2009, MPP drew down the full amount of the new term loan facility. This loan is payable in36 monthly installments in the amount of Rp2,778 each starting January 2010. On March 25, 2010, the loanhas been fully repaid by MPP.

PT Bank CIMB Niaga TbkOn December 13, 2007, MPP, a subsidiary, obtained from CIMB a Fixed Loan on Demand 3 facilityamounting to Rp240,000. The loan facility is available up to December 13, 2011. On April 7, 2010, the loanhas been fully repaid by MPP.



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Credit Suisse, SingaporeBased on loan agreement dated June 15, 2007, the Company obtained US Dollar Secured Term Loan facilitywith total amount of USD 75,000 whereas Credit Suisse, Singapore acted as Mandated Arranger. This facilityhas period of 5 years with Put Option, whereas after 3 years, the creditor has right to request a full repaymentor repayment by installment. This loan collateralized by the shares of PT Matahari Putra Prima Tbk, asubsidiary, at amounts that both parties agreed or the replacing shares, which owned by the Company. Thisfacility was used for repayment for outstanding loan and for working capital of the Company.

On March 25, 2010, the Company received the letter from Credit Suisse regarding exercise of put option toask the repayment on June 21, 2010. The loan has been fully repaid on June 2010 by the Company.

PT Bank Internasional Indonesia TbkOn December 13, 2007, MPP, a subsidiary, obtained from PT Bank Internasional Indonesia Tbk (BII) arevolving promissory loan facility amounting to Rp200,000.

On December 17, 2009, MPP obtained from BII a medium term working capital loan facility amounting toRp300,000 which is available up to December 23, 2011. The loan is payable in 6 quarterly installments. Forthe first five installments, MPP will pay Rp15,000 each in quarterly starting September 2010 and Rp225,000for the last installment in December 2011. On April 8, 2010, the loan from medium term working capital facilityhas been fully repaid.

On December 23, 2010, MPP obtained from BII an additional revolving promissory loan facility amounting toRp200,000. These revolving promissory loan facilities are available up to December 13, 2012..PT Bank Negara Indonesia (Persero) TbkOn September 21, 2006, MPP, a subsidiary, obtained from PT Bank Negara Indonesia Tbk (BNI) a term loanfacility with a maximum amount of Rp500,000 which is available up to June 20, 2011. On December 24, 2008,MPP drew down the full amount of the facility amounting to Rp500,000. The loan is payable in 7 quarterlyinstalments. For the first six instalments, MPP will pay Rp70,000 each in quarterly starting December 24,2009 and Rp80,000 for the last instalment on June 20, 2011. On April 8, 2010 the loan has been fully repaidby MPP.

PT Bank Mizuho IndonesiaOn April 20, 2007, MPP, a subsidiary, obtained from Mizuho a revolving working capital loan facilityamounting to Rp100,000. The credit facility was available up to September 28, 2010 and the amount wasincreased to Rp200,000. On January 12, 2010, the loan has been fully repaid by MPP.

The Company and subsidiaries also obtained loans from PT Bank CIMB Niaga, PT Bank InternasionalIndonesia Tbk, PT Bank Permata Tbk, PT Bank Barclays Indonesia, PT Bank Mayapada Internasional Tbkand Cisco Systems Capital Asia, Pte Ltd. represent credit facilities that were used for financing the purchaseof inventories agreed by the banks (contract of sales). Each borrowings used for this contract will have samematurity date with the term of the financed sales. The loans used for sales for more than 1 (one) year consistsof:- Loan obtained from Cisco Systems Capital Asia, Pte Ltd by PT Multipolar Technology, a subsidiary,

represent installment credit facility for financing the purchase of inventories amounting to USD 7,871, thelatest contract will mature on October 16 , 2013.

- Loan obtained from PT Bank CIMB Niaga Tbk by the Company with the latest contract will be mature onJuly 9, 2009 and has fully repaid. Loan obtained from PT Bank CIMB Niaga Tbk by PT VisionetInternasional, a subsidiary, which is PTK-UF facility amounting to Rp40,000 and will mature on 36months since the agreement is signed. This facility changed PTA facility (umbrella line credit facility)amounting to Rp10,000. The latest contract will mature on August 11, 2011.



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- Loan obtained from PT Bank Permata Tbk by the Company and PT Multipolar Technology, a subsidiarywith revolving credit facility for financing the purchase of inventories with maximum amount of USD 1,500for 1 year period and may be extended (see Note 13) and credit facility with maximum amount equivalentto USD 10,000. The contract will mature on November 8, 2013. Loan obtained from PT Bank PermataTbk by PT Visionet Internasional , a subsidiary, represent installment credit facility with maximum amountof Rp40,000, the latest contract will mature on December 3, 2013.

- Loan obtained from PT Bank Barclays Indonesia by the Company is installment investment credit facilityof Rp 3,158. This loan has been repaid on May 31, 2010. The loan obtained from PT Bank BarclaysIndonesia by PT Visionet Internasional, a subsidiary, is installment credit facility amounting to Rp 1,900which will mature on July 23, 2013.

- Loan obtained from PT Bank Mayapada International Tbk by PT Visionet Internasional, a subsidiary, isinstallment credit facility amounting to Rp5,000 and Rp6,000 with the latest contract will mature onJanuary 11, 2013 and August 5, 2011, respectively.

- Loan obtained from PT Bank Internasional Indonesia Tbk by the Company with maximum amount ofUSD 4,000. As of December 31, 2010, the facility has not used yet and will available until December 21,2011.

For all the above loan facilities, those loans bear interest at annual rates ranging from 10.5% to 14% for Rupiahdenominated and 3.4% to 5.9% for USD denominated in 2010, and 9.6% to 16.5% for Rupiah denominatedand 3.5% to 5.9% for USD denominated in 2009. The above loan agreements require the Company andsubsidiaries to comply with certain conditions, such as maintaining specific financial ratios. As of December31, 2010 and 2009, all of these financial ratios have been met. These loan facilities are collateralized by tradereceivable, inventories, property and equipment (Notes 5, 6 and 9).

21. Employee Benefits

The estimated liabilities on employee benefits represent an actuary calculation of SFAS No. 24 (Revised2004) regarding Employee Benefits.

The Company’s estimated liabilities on employee benefits computes using Projected Unit Credits methodwhich is based on actuary report per December 31, 2010 and 2009 of PT Dayamandiri Dharmakonsilindo, anindependent actuary, with the key assumptions are as follows:

Normal Pension Age : 55 yearsInterest Rate : 2010: 7.9%-9.06% per annum; 2009: 10%-10.5% per annumSalary Increase Projection Rate : 10% per annumPermanent Disability Rate : 10% of mortality rateResignation Rate : 15% at age 25 years and reducing linearly 1% at age 45 and thereafterTable of Mortality : USA Table of Mortality 1980 - (CSO‘80)



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Employee benefits expenses to be recognized during current year period, are as follows:

2010 2009Rp Rp

Current Service Cost 19,424 20,671Interest Cost 18,236 23,292Compensation Cost 5,636 5,881Amortization of Unrecognized Past Service Cost and

Actuarial Losses 1,913 2,176Adjustment of Employee Transfer 1,246 --Adjustment for Permanent Employee 65 --Gain on Curtailment (927) --Gain on Completion (303) --Recognition of Past Service Cost Change Into Benefits -- (2)Liability Relating to Past Service of New Employees -- 1,025Total 45,290 53,043

Reconciliation of changes in liabilities recognized in balance sheets, are as follows:

2010 2009Rp Rp

Liabilities at Beginning of the Year 221,905 182,871Provision During the Year 45,290 53,043Payments During the Year (8,998) (14,009)Subsidiary Not Consolidated - PT Matahari

Department Store Tbk (Notes 1.c and 32) (120,877) --Liabilities at End of the Year 137,320 221,905

22. Capital Stock

The Company's stockholders as of December 31, 2010 and 2009 are as follows:

Stockholders Number of Ownership TotalShares Percentage

% RpClass A Shares (par value of Rp 2,000 per share)Cyport Limited 123,445,634 1.598 246,891

Grandhill Asia Limited 23,125,000 0.299 46,250Management

Jeffrey Koes Wonsono 28,000 0.000 56Antonius Agus Susanto 100 0.000 0

Others (each below 5% ownership) 321,343,266 4.158 642,687Sub Total 467,942,000 6.055 935,884

2010



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Stockholders Number of Ownership TotalShares Percentage

% Rp

2010

Class B Shares (par value of Rp 500 per share)Cyport Limited 333,636,849 4.318 166,818

Grandhill Asia Limited 62,500,000 0.809 31,250HSBC-Fund Services 112,924,000 1.461 56,462

Management - Jeffrey Koes Wonsono 44,678 0.001 22Others (each below 5% ownership) 719,242,363 9.307 359,622

Sub Total 1,228,347,890 15.896 614,174

Class C (Shares (par value of Rp 100 per share)Cyport Limited 1,625,182,161 21.031 162,518Grandhill Asia Limited 304,444,444 3.940 30,444

HSBC-Fund Services 321,139,444 4.156 32,114Others (each below 5% ownership) 3,780,486,891 48.922 378,049

Sub Total 6,031,252,940 78.049 603,125

Total 7,727,542,830 100.000 2,153,183

Stockholders Number of Ownership Total

Shares Percentage% Rp

Class A Shares (par value of Rp 500 per share)Cyport Limited 493,782,535 7.277 246,891

Grandhill Asia Limited 92,500,000 1.363 46,250

ManagementJeffrey Koes Wonsono 112,000 0.001 56Antonius Agus Susanto 400 0.000 0

Others (each below 5% ownership) 1,285,373,065 18.945 642,687

Sub Total 1,871,768,000 27.586 935,884

Class B Shares (par value of Rp 125 per share)Cyport Limited 1,334,547,394 19.669 166,818

Grandhill Asia Limited 250,000,000 3.685 31,250Management - Jeffrey Koes Wonsono 178,711 0.002 22

Others (each below 5% ownership) 3,328,665,455 49.058 416,084Sub Total 4,913,391,560 72.414 614,174

Total 6,785,159,560 100.000 1,550,058

2009

In the Extraordinary General Meeting of Stockholders held on February 25, 2010 have decided and approved,as follows:i. To approve the Company’s plan to change the par value of share in regard with Reverse Stock, by

increase the par value per shares for 4 times, covers Class A Shares from Rp 500 per share to beRp 2,000 per share and Class B Shares from Rp 125 per share to be Rp 500 per share;



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ii. To approve the Company’s plan to increase new shares, which is Class C Shares by the change of parvalue of Class B Shares from Rp 500 per share to be Rp 100 per share;

iii. To approve to change the rule in Article 4 of Article Association of the Company in regard with thechange of value per share in regard with Reverse Stock and the increase of new shares, which is ClassC Shares.

In 2010, the Company conducted Limited Public Offering V to shareholders in connection with Pre-EmptiveRights Issuance of a maximum of 6,031,252,940 class C shares (New Share) at par value of Rp 100per share with offering price of Rp 125 per share and a maximum of 2,345,487,020 Warrant Series II will beissued attached to the new shares which being offered free of cost as an incentive to the stockholders of theCompany and/or Pre-Emptive Rights Holders who exercise their rights. The warrant can be exercised fromDecember 14, 2010 to April 12, 2013. The offering has received an effective notification statement based onthe Letter from the Chairman of Capital Market Supervisory Agency (Bapepam) No. S-2823/BL/2010 datedMarch 30, 2010, and became effective after obtained an approval from the Company’s Stockholders GeneralMeeting on March 30, 2010 (Note 1.b)

23. Additional Paid-in Capital-Net

2010 2009Rp Rp

Premiums Arising from:- Issuance of Shares through Limited Public Offering V in

connection with Pre-Emptive Rights Issuance 150,781 --- Issuance of Shares through Limited Public Offering II in

connection with Pre-Emptive Rights Issuance 32,613 32,613- Issuance of Shares Other than Limited Public Offering (Note 1.b) 33,375 33,375

Declaration of Stock Dividends (22,856) (22,856)Stock Issuance Cost (31,522) (28,735)Total 162,391 14,397

24. Changes in Equity Transactions of Subsidiary/Associate

2010 2009Rp Rp

Mainvest LimitedTransaction Entities Under Common Control (406,740) --

PT Matahari Putra Prima TbkChanges in Equity Tansaction of Subsidiary 516 (45,729)

PT Reksa Puspita KaryaChanges in Equity Tansaction of an Associate Company (3,602) (3,602)

Total (409,826) (49,331)

The changes in equity transactions of subsidiary is resulted from difference in value of restructuringtransactions of entities under common control in Mainvest Limited, a subsidiary, in connection with acquisitionof Congrex Limited (Notes 1.c and 2.b). The changes in equity transactions of subsidiary is also resulted fromchanges in equity transactions of PT Matahari Putra Prima Tbk, a subsidiary, which is mainly relating to thechanges in market value in LMIR Trust units and difference arising from translation adjustment of overseassubsidiaries (Notes 2.b and 8).



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25. Distribution of Income and Appropriation of Retained Earnings

Based on Minutes of Annual General Meeting of Shareholders held on May 14, 2010 , as covered by notarialdeed No. 2 of Rini Yulianti, S.H, decided that usage of net profit in 2009 for payment of cash dividendamounting to Rp 16,614 or Rp 2.15 (in full amount) per share to shareholders which recorded in shareholderslist on June 14, 2010 and provide general reserve fund amounting to Rp 300. Cash dividend have been paidon June 28, 2010.

26. Sales from Direct Purchase, Services and Other Operating Revenuesa. The sales from direct purchase, services and other operating revenues were derived from the following

customers:

2010 2009 2010 2009Rp Rp % %

Related Parties 42,453 34,060 0.47 0.36Third Parties 9,008,461 9,329,900 99.53 99.64Total 9,050,914 9,363,960 100.00 100.00

Total Percentage toTotal Revenue

b. The details of sales by product and services are as follows:

2010 2009Rp Rp

Retail and Distribution 8,247,225 8,758,719Information Technology

Hardware and its Peripherals 470,618 337,096Software 18,219 24,647Other Services 253,236 195,732Sub Total 742,073 557,475

Share Administration and Other Services 61,616 47,766Total 9,050,914 9,363,960

Sales of retail and distribution represent sales from stores of subsidiaries in Indonesia and China, includePT Matahari Putra Prima Tbk, PT Matahari Department Store (MDS), PT Matahari Super Ekonomi andFamily Entertainment Center, well known as Time Zone and Congrex Limited from stores of RobbinzDepartment Stores in China. Sales from MDS in 2010 only included sales for period January 1 to March 31,2010.

There were no individual sales which exceeded 10% of net sales for the years ended December 31, 2010and 2009.

27. Consignment Sales

This account represents mainly from consignment sales of department store of subsidiaries, operated inIndonesia and China. Consignment sales of department store of MDS in 2010, included sales from January 1to March 31, 2010.



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28. Cost on Consignment Sales

This account represents payment of cost on consignments sales to consignors relating to consignment salesof subsidiaries.

29. Cost of Sales and Services

2010 2009Rp Rp

Retail and Distribution 6,702,314 6,724,380Information Technology

Hardware and its Peripherals 437,506 294,585Software 10,436 20,128Other Services 169,162 147,349Sub Total 617,104 462,062

Share Administration and Other Services 46,822 27,722Total 7,366,240 7,214,164

There were no purchases of merchandise inventories from any suppliers that exceeded 10% of net sales forthe years ended Decmber 31, 2010 and 2009.

30. Operating Expenses

2010 2009Rp Rp

SellingRental - Net 553,425 802,706Supplies 72,762 107,183Marketing 61,744 125,654Credit Card 49,562 64,996Others 62,558 17,277Sub Total 800,051 1,117,816

General and AdministrativeSalaries, Allowance and Employee Benefits 632,918 913,174Depreciation (Note 9) 291,606 411,329Water and Electricity 222,184 302,669Professional Fees 36,384 74,739Taxes and Licenses 32,566 56,817Traveling and Transportation 33,804 41,860Insurance 27,990 47,105Telephone, Facsimile and Postage 21,166 28,559Amortization 13,546 55,751Others 43,321 76,605Sub Total 1,355,485 2,008,608

Total Operating Expenses 2,155,536 3,126,424



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31. Interest Expense and Other Financing Cost - Net

2010 2009Rp Rp

Interest Income 468,040 380,524Interest Expense and Other Financing Cost (486,878) (721,923)Net (18,838) (341,399)

32. Extraordinary Item

This account constitutes the net value after taking into account other related expenses and tax expensesborne by MPP, a subsidiary, on the sale of ownership shares of PT Matahari Department Store Tbk (MDS).

Under the Sale and Purchase Agreement dated January 23, 2010, MPP has sold all of ownership shares inMDS for the price of Rp2,705.33 (in full amount) per share or amounted to Rp7,164,309 to PT MeadowIndonesia (MI), the party that was appointed as a buyer by Meadow Asia Company Limited (MAC). Theapproval of the Transaction has been obtained from independent stockholders of MPP at the ExtraordinaryMeeting of Stockholders held on March 26, 2010.

MPP has reviewed some of its assets such as prepaid rent, certain property and equipment, rental advancesand other non-current assets (Notes 9, 10 and 11) in relation with the changes in the manner in which anasset is used from MPP’s benefit to only be leased to MDS. MPP has determined that the recoverable amountof those assets will not exceed the carrying value of assets, thereby indicating that certain assets areimpaired. The value that can be recovered for individual asset or cash-generating unit is the value in usewhich is calculated from the projection cash flows that will be received throughout the useful life of assets ornet selling price, whichever is higher. The total asset impairment recorded in this account amounted toRp801,373.

MPP uses the assumption of a growth rate of 9.74% to determine the value in use for rental advances andprepaid rent which reflects the compound growth rate of department stores division during the last 5 years.Meanwhile, for certain property and equipment and software, the projections of cash inflows are based onexisting agreements and cash outflows using a 5% growth rate that reflects inflation projection per year.

The discount rates that are used to calculate the value in use assets are ranging from 13.6% - 14.2%depending on certain conditions on the assets. These discount rates derived from the pre-tax weightedaverage cost of capital of MPP.

The book value of investments, other related transaction expenses and income tax benefit amounted toRp629,721.



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33. Assets and Liabilities Denominated in Foreign Currencies

As of December 31, 2010 and 2009, the monetary assets and liabilities in foreign currencies are as follows:

RupiahEquivalent

AssetsCash and Cash Equivalents USD 53,691 482,740

RMB 27,177 36,793JPY 1,195 132SGD 877 6,122EUR 96 1,148HKD 28 32

Short-term Investments USD 24,301 218,486SGD 93 652

Accounts ReceivableTrade

Related Parties USD 537 4,825Third Parties USD 8,751 78,679

Others USD 144 1,294RMB 15,198 20,576

Other Current Assets USD 3,288 29,559RMB 7,102 9,615

Other Non-current Assets USD 10 93RMB 19,324 26,162

Total Assets 916,908

2010Amount in

Foreign Currency

LiabilitiesShort-term Loans USD 5,296 47,612Accounts Payable

Trade USD 7,059 63,470RMB 95,886 129,815

Others USD 40 360RMB 24,599 33,303SGD 93 652

Accrued Expenses USD 14,038 126,219RMB 7,630 10,330

Other Current Liabilities USD 10,747 96,624RMB 47,042 63,688

Long-term DebtsLoans USD 48,966 440,252

Other Long-term Payables USD 799 7,184RMB 169,062 228,884

Total Liabilities 1,248,393Net Liabilities Denominated in Foreign Currencies (331,485)



D1/March 30, 2011 54 Sign:

RupiahEquivalent

AsetCash and Cash Equivalents USD 48,294 453,959

JPY 1,202 122SGD 877 5,875HKD 681 826EUR 154 2,080RMB 130 180

Short-term Investments USD 33,380 313,771SGD 93 625

Accounts ReceivableTrade

Related Parties USD 2,030 19,083Third Parties USD 2,984 28,048

Others USD 245 2,304Other Current Assets USD 599 5,634Option/Forward Contract Assets USD 1,403 13,191Other Non-current Assets USD 10 97Total Assets 845,795

LiabilitiesShort-term Loans USD 4,694 44,128Accounts Payable

Trade USD 3,335 31,352Others SGD 93 625

USD 1 11Accrued Expenses USD 250 2,347Other Current Liabilities USD 1,449 13,619Long-term Debts

Notes Payable USD 200,000 1,880,000Loans USD 97,504 916,536

Swap Contract Liability USD 909 8,544Other Long-term Payables USD 6,516 61,249Total Liabilities 2,958,411Net Liabilities Denominated in Foreign Currencies (2,112,616)

Amount in2009

Foreign Currency

In accordance with risk management of monetary asset and liabilities in foreign currency, the Company isable to use derivative financial instrument for risk mitigation in related to fluctuative foreign currency(Note 2.r).



D1/March 30, 2011 55 Sign:

34. Account and Transactions with Related Parties

The Company and subsidiaries, in their normal course of business, have engaged in transactions with relatedparties principally consisting of sales, providing services and space rental which are made on an arm's lengthbasis, and intercompany advances.

The details of the accounts and transactions with related parties are as follows:

2010 2009 2010 2009

Rp Rp % %Short-term Investment

PT Ciptadana Securities 1,411,500 1,095,000 10.07 9.23PT Lippo Karawaci Tbk 340,414 207,670 2.43 1.75PT Ciptadana Capital 29,550 30,000 0.21 0.25Others (below Rp 1,000 each) 136 89 -- --

Total 1,781,600 1,332,759 12.71 11.23

Accounts Receivable - NetPT First Media Tbk 4,127 16,289 0.03 0.14PT Lippo Karawaci Tbk 648 3,812 -- 0.03Others 907 2,531 0.01 0.02

Total 5,682 22,632 0.04 0.19

Other ReceivablesPT Lippo Karawaci Tbk 1,407 -- 0.01 --Others (below Rp 1,000 each) 4,958 1,894 0.04 0.02

Total 6,365 1,894 0.05 0.02

Prepaid ExpensesRentalPT Mandiri Cipta Gemilang 9,791 9,791 0.07 0.08PT Direct Power 3,532 3,532 0.03 0.03Others (below Rp 1,000 each) -- 400 -- --Total 13,323 13,723 0.10 0.11

InsurancePT Lippo General Insurance Tbk 467 811 -- 0.01

OthersOthers (below Rp 1,000 each) 314 561 -- --

Due from Related PartiesPT Meadow Indonesia 1,088,359 -- 7.76 --PT Matahari Department Store Tbk 12,485 -- 0.09 --PT Bintang Sidoraya 10,713 7,566 0.08 0.06PT Karya Dinamika Investama 1,600 1,600 0.01 0.01Others 200 281 -- --

Total 1,113,357 9,447 7.94 0.07

Amount Percentage to TotalAssets/Liabilities



D1/March 30, 2011 56 Sign:

2010 2009 2010 2009Rp Rp % %


Investment in AssociatesPT First Media Tbk 286,875 125,306 2.05 1.06PT Matahari Leisure 24,805 26,638 0.18 0.22PT Bintang Sidoraya 2,380 2,380 0.02 0.02PT Tason Mitra Prima 2,082 2,082 0.01 0.02Others 400 400 -- --

Total 316,542 156,806 2.26 1.32

Rental AdvancesPT Mandiri Cipta Gemilang 324,260 324,260 2.31 2.74PT Menara Bhumimegah 286,433 286,433 2.04 2.41PT Villa Permata Cibodas 15,000 -- 0.11 --

Total 625,693 610,693 4.46 5.15

Long-term Rent - NetPT Direct Power 75,946 79,478 0.54 0.67PT Mandiri Cipta Gemilang 60,379 70,170 0.43 0.59Others 9,975 600 0.07 0.01

Total 146,300 150,248 1.04 1.27

Other Non-Current AssetsAdvance for Investments in:

PT Asianet Multimedia 27,943 27,943 0.20 0.24Others 124 124 -- --

Guarantee DepositsOthers 293 293 -- --

Total 28,360 28,360 0.20 0.24

Trade Payable 156 498 -- 0.01

Other Current LiabilitiesCustomers' Deposits 8,882 943 0.16 0.01Unearned Services Income 398 521 0.01 0.01

Total 9,280 1,464 0.17 0.02

Due to Related PartiesQueenz Limited 240,402 -- 4.36 --Avel Pty, Limited Australia 2,285 2,289 0.04 0.03PT Buana Trans Mandiri 1,467 1,467 0.03 0.02PT Bintang Taratrans Mandiri 1,350 1,350 0.02 0.02PT Matahari Leisure 1,182 11 0.02 --Others 211 614 -- 0.01

Total 246,897 5,731 4.47 0.08



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2010 2009 2010 2009Rp Rp % %


Net Sales, Services and Other Operating RevenuesPT First Media Tbk 23,493 19,886 0.26 0.21PT Lippo Karawaci Tbk 9,703 11,015 0.11 0.12Others (below Rp 1,000 each) 9,257 3,159 0.10 0.03

Total 42,453 34,060 0.47 0.36

Cost of Sales 1,231 851 0.02 0.01

Selling ExpensesRental Expenses

PT Mandiri Cipta Gemilang 9,791 9,791 1.77 1.22PT Direct Power 3,532 3,532 0.64 0.44Others (below Rp 1,000 each) 1,222 1,377 0.22 0.17Sub Total 14,545 14,700 2.63 1.83

Rental RevenuePT Matahari Department Store Tbk (113,419) -- (20.49) --PT Lippo Karawaci Tbk (3,086) (3,745) (0.56) (0.47)PT First Media Tbk (911) (215) (0.16) (0.03)Sub Total (117,416) (3,960) (21.21) (0.50)

Net (102,871) 10,740 (18.58) 1.33

General and AdministrativeSalaries, Allowance and Employee Benefits

Board of Commisioners and Directors 59,772 28,704 9.44 3.14

Marketing ExpensesAvel Pty. Limited, Australia 7,856 7,941 12.72 6.32Others -- 680 -- 0.54

Total 7,856 8,621 12.72 6.86

Telephone, Facsimile andPostage Expenses 209 872 0.99 3.05

Insurance Expenses 5,121 4,203 18.30 8.92

Professional Fees -- 29 -- 0.04

Other ExpensesOthers (below Rp 1,000 each) 1,739 1,475 4.01 1.93



D1/March 30, 2011 58 Sign:

2010 2009 2010 2009Rp Rp % %


Other Expenses (Income)Interest Income

PT Ciptadana Securities 221,961 174,038 47.00 45.74Others (below Rp 1,000 each) 105,170 1,436 22.00 0.38

Total 327,131 175,474 69.00 46.12

Other ExpensesPT Ciptadana Securities 867 2,156 (0.69) 1.70

Equity in Net Earnings (Losses)of AssociateesPT First Media Tbk 7,514 9,465 132.27 87.97PT Lippo Securities Tbk -- 1,948 -- 18.10PT Matahari Leisure (1,833) (653) (32.27) (6.07)

Total 5,681 10,760 100.00 100.00

The relationship and nature of account balances/transactions with related parties are as follows:

Company Relationship Nature of Account Balances/Transctions

Avel Pty, Limited, Australia Affiliate Payment for promotion expense and intercompanyaccounts

PT Asianet Multimedia Affiliate, common controlledentity

Intercompany accounts

PT Bintang Sidoraya Associated company throughPT Taraprima Reksabuana,

subsidiary of MPP

Intercompany receivables and investment inassociate

PT Buana Trans Mandiri Associated company throughPT Taraprima Reksabuana,

subsidiary of MPP

Intercompany payable

PT Bintang Taratrans Buana Associated company throughPT Taraprima Reksabuana,

subsidiary of MPP

Intercompany payable

PT Ciptadana Securities Affiliate, common controlledentity

Investment in managed funds, other expenses andinterest income

PT Ciptadana Capital Affiliate, common controlledentity

Investment in notes receivables

PT Direct Power Affiliate, subsidiary of PTLippo Karawaci Tbk

Prepaid expenses, prepaid long term rent - net andrental expenses

Board of Commissioners andDirectors

Board of Commissioners andDirectors

Salaries Payment

PT First Media Tbk Affiliate, common controlledentity

Accounts receivable, other receivables, investmentin associate, customer’s deposits, sales, rentalrevenue, promotion expenses, communication andother expenses

PT Karya Dinamika Investama Associated company throughPT Nadya Putra Investama,

subsidiary of MPP

Intercompany receivable and investment inassociate



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Company Relationship Nature of Account Balances/Transctions

PT Link Net Affiliate, common controlledentity

Accounts receivable, sales, cost of sales andtelephone expenses

PT Lippo Securities Tbk Affiliate, common controlledentity

Investments in associate

PT Lippo Karawaci Tbk Affiliate, common controlledentity

Marketable securities, accounts receivable, otherreceivable, prepaid expenses, deposit,intercompany receivables, sales, rental income andexpense

PT Lippo General Insurance Tbk Affiliate, common controlledentity

Prepaid expenses and insurance expenses

PT Matahari Leisure Associated company throughinvestment by MPP

Investment in associate and intercompany payable

PT Mandiri Cipta Gemilang Affiliate, subsidiary of PTLippo Karawaci Tbk

Prepaid expenses, rental advances, prepaid longterm rent - net and rental expenses

PT Meadow Indonesia Affiliate, under samemanagement

Intercompany receivable and interest income

PT Matahari Department Store Tbk Affiliate, under samemanagement

Intercompany receivable and rental income

PT Menara Bhumimegah Affiliate, subsidiary of PTLippo Karawaci Tbk

Rental advances

PT Villa Permata Cibodas Affiliate, subsidiary of PTLippo Karawaci Tbk

Rental advances

Queens Limited Affiliate, common controlledentity

Payable related to acquisition of Congrex Limited

PT Tason Mitra Prima Associated company throughPT Taraprima Reksabuana,

subsidiary of MPP

Investment in associate

35. Agreements and Contingency

Agreementsa. On October 22, 2008, the Company entered into USD Interest Rate Swap contract with PT Bank BNP

Paribas Indonesia (BNP) for notional amount of USD 75,000, where BNP will pay floating rate six-months’ LIBOR and the Company will pay annual fixed rate USD of 2.75%. The interest will be paidquarterly and will mature on June 18, 2010.

The purpose of this USD Interest Rate Swap contract is to cover the risks of potential losses from theincrease of interest rate. The contract qualified as hedges of future cash flows accounting. Therefore, theeffective portion of the changes in fair value is recorded as part of equity. As of December 31, 2009, thecash flows hedging reserve recorded in the equity amounted to Rp 8,544. As of December 31 , 2010 , thefacility was expired.

b. On July 30, 2007, the Company entered into Buy USD Sell IDR Seagull Foreign Exchange OptionContract with JP Morgan (SEA) Limited, Singapore amounting to USD 35,000 for spread more or equal toRp 10,400 (in full amount). If on termination date the rate is below Rp 10,400 (in full amount), then theCompany will buy on strike rate amounting to Rp 9,025 (in full amount). Based on the contract, theCompany has to pay in advance the premium amounting to USD 1,640, which will be amortized duringthe period of contract. As of December 31, 2010 the facility was expired.



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c. MPP, a subsidiary entered into a license agreement with IGA, Inc. (IGA) in March 2001, whereby IGAauthorized and licensed MPP to use the IGA trademarks (1) to identify MPP as an IGA member, (2) inconnection with the distribution and promotion of products with the quality standards established by IGA,solely in MPP’s stores, and rendering of services relating to IGA systems in those stores, and (3) inconnection with the procurement and labelling of products with the quality standards established by IGA.

On the same date, MPP entered into a service agreement with IGA to obtain service and support fromIGA, including guidance and counsel, international public relations assistance, and attendance at majorkey events. As of December 31, 2010 and 2009, MPP recorded license fee amounted to Rp271 andRp255, respectively.

d. MPP, a subsidiary entered into a management agreement with PT Matahari Graha Fantasi(MGF), a Subsidiary, in December 2002, whereby MPP agreed to provide management consultationservices to MGF. MPP earns an annual management fee as compensation, which is computed at acertain percentage of the gross revenue of MGF. The agreement is effective for a 12-year period startingJanuary 1, 2003.

In November 2010, simultaneously with the transfer of MGF to PT Nadya Prima Indonesia(Note 1c), the management agreement was also transferred as well.

The related reciprocal management fee income and expense amounted to Rp3,571 and Rp3,610 for theyears ended December 31, 2010 and 2009, respectively, have been eliminated in the consolidatedfinancial statements.

e. PT Matahari Graha Fantasi (MGF), a subsidiary entered into a “Business System License Agreement”with Avel Pty. Limited, Australia (licensor) in January 2003, whereby the licensor granted MGF theexclusive right in Indonesia to use the “Timezone Business System” in Indonesia. The licensor earns anannual royalty as compensation, which is computed at a certain percentage of the gross revenue of MGF.The agreement is effective for a 12-year period starting January 1, 2003.

The royalty fees charged to current operations as part of “Selling Expenses (Marketing)” amounted toRp7,856 and Rp7,941 for the years ended December 31, 2010 and 2009, respectively.

f. MPP, a subsidairy, entered into a lease agreement with PT Donindo Menara Utama in August 2004,covering lease of store space with a floor area of 9,000 square meters in Grand Menara Mall,Banjarmasin. The lease period covers 11 years to start at the opening day of the store and is extendable.As required in the agreement, MPP made rental deposit amounting to Rp667as of December 31, 2010,which is presented as part of “Other Non-current Assets”. In October 2009, MPP transferred partially thelease rights and obligations of store with a floor area of 5,000 square meters to PT Matahari DepartmentStore Tbk (MDS), a Subsidiary. The store has not opened yet as of December 31, 2010.

g. MPP, a subsidiary, entered into a lease agreement with PT Gerbang Perkasa in February 2007, coveringa store with floor area of 20,343 square meters in Boutique Mall Yogya. The lease period covers 15 yearssince the opening day of the store with total rental charge of Rp129,000. As required in the agreement,MPP has made the rental payment amounting to Rp129,000 as of December 31, 2010, which ispresented as part of “Rental Advances”.

Based on the addendum of the lease agreement, due to delay in the hand-over of the store space, MPPaccept the hand over not later than July 2012 and will receive, as compensation, additional 7 years’ leaseperiod and will also receive compensation for participation fee amounting to Rp3,800 which will bereceived in an installment. The store has not opened yet as of December 31, 2010.



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h. MPP, a subsidiary, entered into a lease agreement with PT Lingkar Indah Kencana in March 2007,covering a store with floor area of 13,233 square meters in The Great Town Square, Sidoarjo. The leaseperiod covers 20 years to start on the opening day of the store with total rental charge of Rp78,241. Asrequired in the agreement, MPP has made the rental payment amounting to Rp78,241 as of December31, 2010, which is presented as part of “Rental Advances”.

Based on the addendum of the lease agreement, due to delay in the hand-over of the store space, MPPaccept the hand over not later than December 2011 and will receive, as compensation, additional6 years’ lease period and will also receive compensation for participation fee amounting to Rp2,300which will be received in an installment. The store has not opened yet as of December 31, 2010.

i. MPP, a subsidiary, entered into a lease agreement with PT Perisai Emas in March 2007 and has beenrenewed in August 2010, covering a store with floor area of 15,267 square meters in Kuta Beach, Bali.The lease period covers 20 years to start on the opening day of the store with total rental charge ofRp214,827. As required in the agreement, MPP has made the rental payment amounting to Rp214,827as of December 31, 2010, which is presented as part of “Rental Advances”.

Based on the addendum of the lease agreement, due to delay in the hand-over of the store space, MPPaccept the hand over not later than June 2012 and will receive, as compensation, additional 7 years and4 months’ lease period and will also receive compensation for participation fee amounting to Rp6,400which will be received in an installment. The store has not opened yet as of December 31, 2010.

j. MPP, a subsidiary, entered into a lease term-sheet with PT Gaya Kreasindo Permai in July andNovember 2007, covering a store with floor area of 14,715 square meters in Jakarta. The lease periodcovers 11 years since the opening day of the store. The store has not opened yet as of December 31,2010.

k. MPP, a subsidiary, entered into a lease agreement with PT Menara Bhumimegah in August 2007,covering lease of a store with floor area of 19,795 square meters in Jakarta. The lease period covers 20years with total rental charge of Rp286,433. As required in the agreement, MPP made rental paymentamounting to Rp286,433 as of December 31, 2010, which is presented as part of “Rental Advances”.

Based on the addendum of the lease agreement that was signed in December 2010, due to delay in thehand-over of the store space, MPP accept the hand over not later than May 2012 and will receive, ascompensation, additional 2 years and 10 months’ lease period and will also receive compensation forparticipation fee amounting to Rp8,590 which will be received in an installment. The store has not openedyet as of December 31, 2010.

l. On October 18, 2007, MPP, a subsidiary, together with HSBC Institutional Trust Services (Singapore)Limited (HSBC, as trustee of Lippo-Mapletree Indonesia Retail Trust, called Option Holder), DetosProperties Pte. Ltd (Detos) and Matos Properties Pte. Ltd. (Matos), both stockholders of PT Megah DetosUtama (MDU), entered into a put option agreement whereby, if in the following 2 (two) years from thelisting date of the LMIR Trust units on the Singapore Stock Exchange, MDU does not acquire the stratatitles of the property purchased from MPP, Option Holder has an option to request MPP to repurchaseshares of Detos at the Average of Valuations conducted by Valuers or the Valuation Amount at the initialoffering of the LMIR Trust units, whichever is higher. As of December 31, 2010, from total area 13,045square meters in Depok, 12,714.45 square meters has been transferred to MDU and the remaining330.55 square meters still in process (Note 9).



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m. MPP, a subsidiary, entered into a lease agreement with PT Trimitra Exelindo Utama Karya in March 2008and has been renewed in May 2010, covering a store with floor area of 20,000 square meters inSetiabudi Signature, Semarang. The lease period covers 15 years since the opening day of the store withtotal rental charge of Rp113,353. As required in the agreement, MPP has made rental paymentamounting to Rp113,353 as of December 31, 2010, which is presented as part of “Rental Advances”.

Based on the addendum of the lease agreement, due to delay in the hand-over of the store space, MPPaccepts the hand over not later than May 2011 and will receive, as compensation, additional 1 year and 5months’ lease period and will also receive compensation for participation fee amounting to Rp3,400 sincethe opening day of the store and will be received in an installment. The store has not opened yet as ofDecember 31, 2010 (Note 41).

n. MPP, a subsidiary, entered into a lease agreement with PT Bima Mitra Utama Energi in March 2008,covering land and building with floor area of 9,968 square meters in Cempaka Putih, Jakarta. The leaseperiod covers 10 years to start on the opening day of the store with total rental charge of Rp117,682. Asrequired in the agreement, MPP has made rental payment amounting to Rp117,682 as of December 31,2010, which is presented as part of “Rental Advances”.

Based on the addendum of the lease agreement, due to delay in the hand-over of the store space, MPPaccepts the hand over not later than April 2012 and will receive, as compensation, additional 2 years and10 months’ lease period and will also receive compensation for participation fee amounting to Rp3,530since the opening day of the store and will be received in an installment. The store has not opened yet asof December 31, 2010.

o. MPP, a subsidiary, re-entered into a lease agreement with PT Rangkai Ribu Paremas in March 2008,covering a store with floor area of 14,000 square meters in Arteri Simpruk, Jakarta. The lease periodcovers 15 years to start on the opening day of the store with total rental charge of Rp154,433. Hand overnot later than June 2011. As required in the agreement, MPP has made rental payment amounting toRp154,433 as of December 31, 2010, which is presented as part of “Rental Advances”. The store has notopened yet as of December 31, 2010.

p. MPP, subsidiary, entered into a lease term-sheet with PT Win Win Realty Centre in March 2008, coveringa store with floor area of 6,855 square meters in Ciputra World, Surabaya. The lease period covers 12years to start on the opening day of the store. As required in the term-sheet, MPP has made rentalpayment amounting to Rp2,056 as of December 31, 2010, which is presented as part of “RentalAdvances”. The store has not opened yet as of December 31, 2010.

q. MPP, a subsidiary, entered into a lease term-sheet with PT Karya Bersama Takarob in June 2008,covering a store with floor area of 6,187 square meters in Cirebon Superblock Mall. The lease periodcovers 11 years to start on the opening day of the store. As required in the term-sheet, MPP has maderental payment amounting to Rp2,784 as of December 31, 2010, which is presented as part of “RentalAdvances”. The store has not opened yet as of December 31, 2010.

r. MPP, a subsidiary, entered into a lease agreement with PT Khatulistiwa Multipromo in September 2008,covering a store with floor area of 19,660 square meters in Salemba, Jakarta. The lease period covers 15years to start on the opening day of the store with total rental charge of Rp196,600. As required in theagreement, MPP has made rental payment amounting to Rp196,600 as of December 31, 2010, which ispresented as part of “Rental Advances”.



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Based on the addendum of the lease agreement that was signed in December 2010, due to delay in thehand-over of the store space, MPP accept the hand over not later than October 2012 and will receive, ascompensation, additional 2 years and 9 months’ lease period and will also receive compensation forparticipation fee amounting to Rp5,900 which will be received in an installment. The store has not openedyet as of December 31, 2010.

s. MPP, a subsidiary, entered into a lease agreement with PT Inovasi Ragam Abadi in September 2008,covering a store with floor area of 10,789 square meters in Kuta Galleria, Bali. The lease period covers15 years to start on the opening day of the store with total rental charge of Rp140,956. As required in theagreement, MPP has made rental payment amounting to Rp140,956 as of December 31, 2010, which ispresented as part of “Rental Advances”.

Based on the addendum of the lease agreement that was signed in December 2010, due to delay in thehand-over of the store space, MPP accept the hand over not later than October 2012 and will receive, ascompensation, additional 2 years and 9 months’ lease period and will also receive compensation forparticipation fee amounting to Rp4,230 which will be received in an installment. The store has not openedyet as of December 31, 2010.

t. MPP, a subsidiary entered into a lease agreement with PT Sitryco Riwani Jaya in September 2008,covering a store with floor area of 22,739 square meters in Surabaya Times Square. The lease periodcovers 20 years to start on the opening day of the store with total rental charge of Rp197,716. Asrequired in the agreement, MPP has made rental payment amounting to Rp197,716 as of December 31,2010, which is presented as part of “Rental Advances”.

Based on the addendum of the lease agreement that was signed in December 2010, due to delay in thehand-over of the store space, MPP accept the hand over not later than August 2012 and will receive, ascompensation, additional 3 years and 4 months’ lease period and will also receive compensation forparticipation fee amounting to Rp5,930 which will be received in an installment. The store has not openedyet as of December 31, 2010.

u. MPP, a subsidiary, entered into a lease agreement with PT Mandiri Cipta Gemilang on November 12,2008, covering a store with floor area of 24,858.91 square meters in Jakarta. The lease period covers 20years since the opening day of the store with total rental charge of Rp324,260. MPP has made paymentamounting to Rp324,260 as of December 31, 2010, which is presented as part of “Rental Advances”.

Based on the addendum of the lease agreement that was signed in December 2010, due to delay in thehand-over of the store space, MPP accept the hand over not later than June 2013 and will receive, ascompensation, additional 5 years’ lease period and will also receive compensation for participation feeamounting to Rp9,700 which will be received in an installment. The store has not opened yet as ofDecember 31, 2010.

v. MPP, a subsidiary, entered into a lease agreement with PT Papetra Perkasa Utama on August 26, 2009,covering a store with floor area of 7,300 square meters in Blue Banter City, Manado. The lease periodcovers 11 years since the opening day of the store with total rental charge of Rp14,016. As required inthe lease agreement, MPP has made rental payment amounting to Rp10,512 as of December 31, 2010,which is presented as part of “Rental Advances”. The store has not opened yet as of December 31, 2010.



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w. PT Matahari Pacific (MP), MPP’s subsidiary, has entered into Vendor Loan Agreement SecurityAssignment with PT Bank CIMB Niaga Tbk (CIMB) on March 29, 2010, whereby MP has pledged thereceivables from MI to CIMB, to guarantee the MDS’s loan.

x. MPP, a subsidiary, entered into a lease term-sheet with PT Bliss Properti Indonesia in September 2010,covering a store with floor area of 5,595 square meters in “Ambon City Center”. The lease period covers11 years to start on the opening day of the store. The store has not opened yet as of December 31, 2010.

y. MPP, a subsidiary, entered into a lease term-sheet with PT Diyatama Banua Raya in October 2010,covering a store with floor area of 5,081 square meters in “Mawar Square Kalimantan”. The lease periodcovers 11 years since the opening day of the store. As required in the lease term-sheet, MPP has maderental payment and rental deposit amounted to Rp915 and Rp686 as of December 31, 2010, which arepresented as part of “Rental Advances” and “Other non-current Assets”, respectively. The store has notopened yet as of December 31, 2010.

z. MPP, a subsidiary, entered into a lease term-sheet with PT Modern Widya Tehnical in November 2010,covering a store with floor area of 4,760 square meters in “Mall Jayapura Papua”. The lease periodcovers 11 years to start on the opening day of the store. The store has not opened yet as of December31, 2010.

aa. PT Mulia Persada Pertiwi, MPP’s subsidiary, entered into a lease term-sheet with PT Villa PermataCibodas in December 2010, covering a store with floor area of 6,726.02 square meters in “LippoKarawaci Utara”. As required in the lease term-sheet, MPP has made rental payment amounted toRp15,000 as of December 31, 2010 which is presented as part of “Rental Advances”. The store has notopened yet as of December 31, 2010.

ContingencyIn relation to MPP’s rent right in the Bogor Internusa Plaza (now Pangrango Plaza) located in Bogor whichwas not compensated by PT Bogor Internusa Plaza (BIP) as developer after the fire incident in 1996, MPPhas filed a legal suit against PT BIP in the Bogor State Court. The state court has approved a part of MPP’ssuit to recover the amounts of Rp101,617 and USD1,441. In January 2006, BIP filed its objection to thedecision of the state court in the High Court of Bandung. The High Court decided that BIP should paycompensation for the remaining unused rent amounting to Rp1,617 and USD1,441 and MPP should paycompensation to BIP amounting to Rp218,484.

On March 14, 2007, MPP filed its objection to the decision of the High Court of Bandung in the SupremeCourt. On March 19, 2009, the Bogor State Court has written an official letter to inform MPP regarding theSupreme Court decision on this matter. The Supreme Court has decided to revoke the decision of the HighCourt of Bandung and that BIP should pay compensation for the remaining unused rent amounting toRp1,617 and USD1,441 plus interest 12% per annum for the rent amount that denominated in Rupiah and 3%per annum for the rent amount that denominated in U.S. dollar, using exchange rate (full amount) of Rp6,000to USD1 started from the date of legal suit registered in the Bogor State Court. On January 18, 2010, MPPhas received a notification on submission of Judicial Review Memorandum on Supreme Court’s decision,regarding the rent right of Bogor Internusa Plaza. Further, MPP will submit and prepare a Judicial ReviewCounter Memorandum (Note 41).



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36. Segment Information

Primary SegmentThe Company and subsidiaries classify their products and services into three core business segment namely:Retails and Distribution;Information Technology;Share Administration and Other Services; andOthers

Information concerning the Company and subsidiaries business segment are as follows:

Retail and Information Share Others Elimination ConsolidatedDistribution Technology Administration

and OtherServices

Rp Rp Rp Rp Rp RpRevenues

Sales from Direct Purchase, Services andOther Operating Revenues

External Sales 8,247,225 742,073 61,616 -- -- 9,050,914

Consignment Sales 2,102,528 -- -- -- -- 2,102,528Cost of Consignment Sales (1,615,771) -- -- -- -- (1,615,771)Intersegment Sales -- 158,115 16,095 -- (174,210) --

Total Revenues 8,733,982 900,188 77,711 -- (174,210) 9,537,671

ResultSegment Result (38,978) 64,096 4,851 (4) (14,070) 15,895

Interest Expense and OtherFinancing Cost - Net 21,844 (41,808) 1,682 (1) (555) (18,838)

Others - Net (79,286) (32,479) 429 -- (14,410) (125,746)Income (loss) before Equity in Net

Earnings of Associates (96,420) (10,191) 6,962 (5) (29,035) (128,689)Equity in Net Earnings of Associates (1,833) -- -- 7,514 -- 5,681Income (loss) before Income

Tax Benefit (Expense) (98,253) (10,191) 6,962 7,509 (29,035) (123,008)Extraordinary Items 5,733,215 -- -- -- -- 5,733,215Income Tax Benefit 29,395 (8,857) (3,634) -- -- 16,904Net Income before Minority Interest and

Effect of Proforma Adjustment 5,664,357 (19,048) 3,328 7,509 (29,035) 5,627,111

Segment Assets 12,055,177 6,314,980 173,247 56 (4,843,316) 13,700,144Investment in Associates with

Equity Method 29,667 -- -- 286,875 -- 316,542Total Assets 12,084,844 6,314,980 173,247 286,931 (4,843,316) 14,016,686

Segment Liabilities 4,938,229 1,070,715 57,702 339,111 (889,622) 5,516,135

Capital Expenditures 236,483 187,333 13,430 -- -- 437,246Depreciation and Amortization 315,912 42,318 8,111 -- -- 366,341

2010



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Retail and Information Share Others Elimination ConsolidatedDistribution Technology Administration

and OtherServices

Rp Rp Rp Rp Rp RpRevenues

Sales from Direct Purchase, Services andOther Operating Revenues

External Sales 8,758,719 557,475 47,766 -- -- 9,363,960Consignment Sales 5,027,934 -- -- -- -- 5,027,934Cost of Consignment Sales (3,506,196) -- -- -- -- (3,506,196)Intersegment Sales -- 67,818 17,080 -- (84,898) --Total Revenues 10,280,457 625,293 64,846 -- (84,898) 10,885,698

ResultSegment Result 504,273 28,927 12,562 (413) (239) 545,110Interest Expense and Other

Financing Cost - Net (263,868) (78,619) 1,710 (1) (621) (341,399)

Others - Net 132,234 19,200 (109) (6,545) (16,041) 128,739Income (loss) before Equity in Net

Earnings of Associates 372,639 (30,492) 14,163 (6,959) (16,901) 332,450Equity in Net Earnings of Associates 1,295 -- -- 9,465 -- 10,760Income (loss) before Income

Tax Benefit (Expense) 373,934 (30,492) 14,163 2,506 (16,901) 343,210Income Tax Benefit (77,412) (923) (4,238) -- -- (82,573)Net Income before Minority Interest and

Effect of Proforma Adjustment 296,522 (31,415) 9,925 2,506 (16,901) 260,637

Segment Assets 10,528,644 3,102,146 102,915 62 (2,022,196) 11,711,571Investment in Associates with

Equity Method 31,500 -- -- 125,306 -- 156,806

Total Assets 10,560,144 3,102,146 102,915 125,368 (2,022,196) 11,868,377

Segment Liabilities 6,999,117 1,453,340 26,685 185,056 (238,413) 8,425,786

Capital Expenditures 525,191 16,775 5,592 -- -- 547,558Depreciation and Amortization 549,452 21,396 7,070 -- -- 577,918

2009



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Secondary SegmentInformation concerning the Company and subsidiaries geographical areas segment are as follows:

2010 2009Rp Rp

Sales from Direct Purchase, Services and

Other Operating Revenues

IndonesiaJabotabek

Retail and Distribution 3,044,990 3,225,248Information Technology 900,188 625,293Share Administration and Other Services 77,711 59,721Elimination Intersegment (174,210) (84,898)

Sub Total 3,848,679 3,825,364

Outside JabotabekRetail and Distribution 5,118,887 5,533,471Share Administration and Other Services -- 5,125

Sub Total 5,118,887 5,538,596

ChinaRetail and Distribution 83,347 --

Sub Total 9,050,914 9,363,960

Consignment SalesIndonesia

Jabotabek 526,076 1,755,497Outside Jabotabek 857,082 3,272,437

1,383,158 5,027,934China 719,370 --Total 2,102,528 5,027,934

Cost of Consignment SalesIndonesia

Jabotabek (385,583) (1,229,536)Outside Jabotabek (616,674) (2,276,660)

(1,002,257) (3,506,196)China (613,514) --Sub Total (1,615,771) (3,506,196)Total 9,537,671 10,885,698



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37. Financial Risk Management

The main financial risks faced by the Company are credit risk, currency risk, interest risk, interest rate risk,liquidity risk and price risk. Through the risk management approach, the Company tried to minimize thepotential negative impact of the above risks.

(i) Credit RiskCredit risk is the risk that one of the party of a financial instrument which will fail to discharge anobligation and cause the other party to incur a financial loss.

The Company's financial instruments that have the potential for credit risk consist of cash and cashequivalents in bank, accounts receivable, other receivables and certain investments. The maximumexposure of credit risk are equal to the carrying value of these accounts.

For credit risk associated with banks, only banks with good predicate are selected. As for financialinstitutions, the management has made certain criteria in which only use the services of experienced andtrusted investment manager. In addition, it is policy of the Company not limit the exposure only to oneparticular institution, therefore the Company have cash and cash equivalents in the banks, receivablesand investments in various financial institutions.

(ii) Currency RiskCurrency risk is the risk that the value of a financial instrument will fluctuate because of changes inforeign exchange rates.

The Company conducts certain transactions using foreign currencies, including capital expenditures,transactions conducted in foreign subsidiaries, and Company’s loan. Thus, the Company must convertthe Rupiah to the currency foreign, especially U.S. Dollars, to meet the liabilities in foreign currencies atmaturity. The fluctuations in the exchange rate of rupiah against the United States dollar could have animpact on our financial condition.

The Company manages the currency risk by monitoring the fluctuations in foreign currency exchangerate continuously so that it can perform appropriate actions such as the use of hedging transactions ifnecessary to reduce the risk of foreign currency.

(iii) Interest Rate RiskInterest rate risk is the risk that the value of a financial instrument will fluctuate because of changes inmarket interest rates.

The Company has interest rate risk mainly due to conducting loans using the floating interest rate. TheCompany monitors the impact of interest rate movements to minimize the negative impact on theCompany.

The information regarding the loan interest rate in the Company is explained in Notes 13 and 20.

(iv) Liquidity RiskLiquidity risk is the risk that an entity will encounter difficulty in raising funds to meet commitmentsassociated with financial instruments.

The Company manages liquidity risk by maintaining cash and marketable securities sufficient to enablethe Company to meet the Company's commitment to normal operation of the Company. In addition, theCompany also conducts supervision of projected and actual cash flows on a continuous basis andmonitors the maturities date of financial assets and liabilities.



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(v) Price RiskPrice risk is the risk that the value of a financial instrument will fluctuate as a result of changes in marketprices, whether those changes are caused by factors specific to the individual instrument or its issuer orfactors affecting all instruments traded in the market.

The Company has the price risk mainly due to the Company's investment on financial assets classified asavailable-for-sale. The Company manages the price risk by performing internal control that is supervisedby the management on a continuous basis.

38. Recent Economic Conditions

The operations of the Company and subsidiaries may be affected by future economic conditions in Indonesiathat may contribute to volatility in currency values and negatively impact economic growth. Economicimprovements and sustained recovery are dependent upon several factors such as fiscal and monetaryactions being undertaken by the Government and others, actions that are beyond the control of the Companyand subsidiaries.

39. Restatement of Earning Per Share in 2009

The Company restated the earnings per share in connection with reverse stock by increasing par value pershares for 4 times, such as Class A Shares from Rp 500 per shares to Rp 2,000 per shares and Class BShares from Rp 125 to Rp 500 per shares (Note 1.b) which was approved in the Extraordinary Stockholders’General Meeting (RUPSLB) held on February 25, 2010 (Note 22). According to SFAS 56, “Earning PerShare”, the weighted average number of shares outstanding presented as if it had occurred at the beginningof the year presented. The calculation of earning per share as of December 31, 2009, as follows:

Before AfterRestated Restated

Net Income 110,691 110,691

The weighted average number of shares outstanding 6,785,159,056 1,696,289,764Earning per share (in full Rupiah) 16.31 65.25

40. Proforma Information

As mentioned in Note 1.c, on October 15, 2010, the Company has closed the transaction of acquisition of allshares owned by Queenz Limited in Congrex Limited. The acquisition represents a transaction among entitiesunder common control, and therefore recorded as a book value as in pooling of interest method in accordancewith SFAS 38 (Revised 2004), “Accounting of Restructuring Transactions of Entities under Common Control”.The Company did not restate the consolidated financial statements in 2009 to combine the accounts inCongrex Limited’s financial statement for the transactions, due to immaterial and impracticable. If the financialreport in 2009 presented retroactively as if the net asset transfer occurred on January 1, 2009, the pro formaconsolidated summary financial information before and after proforma as of December 31, 2010 are asfollows:



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Effect

Reported ImplementationPreviously SFAS 38 (Revised 2004) Proforma

Total Current Asset 5,924,727 136,117 6,060,844

Total Non Current Asset 5,943,650 247,789 6,191,439Total Current Liabilities 3,625,814 207,101 3,832,915

Total Non Current Liabilities 4,799,972 180,083 4,980,055

41. Subsequent Events

a. On January 10, 2011, MPP, a subsidiary has made payment for third interim dividend.

b. On January 10, 2011, MPP, a subsidiary has received a copy of Supreme Court’s decision that refusedthe judicial review memorandum of PT Bogor Internusa Plaza (Note 35).

c. On January 12, 2011, MPP, a subsidiary has received the hand over of building and settlement for fourunits of store houses in Tanjung Pinang from PT Gemanusa Nadarkarya.

d. On January 12, 2011, MPP, a subsidiary has signed the addendum of the lease agreement withPT Trimitra Exelindo Utama Karya in Setiabudi Signature, Semarang. Based on the addendum, of thelease agreement, due to delay in the hand-over of the store space, MPP accept the hand over not laterthan June 2012 and will receive, as compensation, additional 1 year and 8 months’ lease period (Note35).

e. On January 12, 2011, the exchange rates (in full amounts) were Rp9,045 to USD1 and Rp7,003 to SGD1while on December 31, 2010, the rates were Rp8,991 to USD1 and Rp6,981 to SGD1. On the basis ofthe rates on January 12, 2011, the Company recognized foreign exchange gain amounting toapproximately Rp204 on its net foreign currency assets as of December 31, 2010.

42. Management Responsibility on the Consolidated Financial Statements

The management of the Company is responsible for the preparation of the consolidated financial statementsthat were completed on January 12, 2011.

Mengetahui,

Reynold Pena Ong Senjaya BidjaksanaDirector Accounting Manager

cagr: 42.2% cagr: 42.9% 21 - multipolar-group.com · 2017-12-19 · the main business pillars, such...

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