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
1
2
4
6
8
12
14
18
20
28
30
34
36
40
41
42
43
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
EMBRACING OPPORTUN ITI ES AHEAD | PT MULTIPOLAR TBK 2010 ANNUAL REPORT
3
EMBRACING OPPORTUN ITI ES AHEAD | PT MULTIPOLAR TBK 2010 ANNUAL REPORT
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
EMBRACING OPPORTUN ITI ES AHEAD | PT MULTIPOLAR TBK 2010 ANNUAL REPORT
5
EMBRACING OPPORTUN ITI ES AHEAD | PT MULTIPOLAR TBK 2010 ANNUAL REPORT
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
EMBRACING OPPORTUN ITI ES AHEAD | PT MULTIPOLAR TBK 2010 ANNUAL REPORT
7
EMBRACING OPPORTUN ITI ES AHEAD | PT MULTIPOLAR TBK 2010 ANNUAL REPORT
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
8
EMBRACING OPPORTUN ITI ES AHEAD | PT MULTIPOLAR TBK 2010 ANNUAL REPORT
9
EMBRACING OPPORTUN ITI ES AHEAD | PT MULTIPOLAR TBK 2010 ANNUAL REPORT
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
10
EMBRACING OPPORTUN ITI ES AHEAD | PT MULTIPOLAR TBK 2010 ANNUAL REPORT
11
EMBRACING OPPORTUN ITI ES AHEAD | PT MULTIPOLAR TBK 2010 ANNUAL REPORT
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
EMBRACING OPPORTUN ITI ES AHEAD | PT MULTIPOLAR TBK 2010 ANNUAL REPORT
12 13
Dr. Cheng Cheng WenPresident Commissioner
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
14
EMBRACING OPPORTUN ITI ES AHEAD | PT MULTIPOLAR TBK 2010 ANNUAL REPORT
15
EMBRACING OPPORTUN ITI ES AHEAD | PT MULTIPOLAR TBK 2010 ANNUAL REPORT
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
EMBRACING OPPORTUN ITI ES AHEAD | PT MULTIPOLAR TBK 2010 ANNUAL REPORT
17
EMBRACING OPPORTUN ITI ES AHEAD | PT MULTIPOLAR TBK 2010 ANNUAL REPORT
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
18
EMBRACING OPPORTUN ITI ES AHEAD | PT MULTIPOLAR TBK 2010 ANNUAL REPORT
19
EMBRACING OPPORTUN ITI ES AHEAD | PT MULTIPOLAR TBK 2010 ANNUAL REPORT
BOAR D OF D I R ECTORS
BOARD OF DIRECTORS BOARD OF DIRECTORS
Jeffrey Koes WonsonoPresident Director
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.
20
EMBRACING OPPORTUN ITI ES AHEAD | PT MULTIPOLAR TBK 2010 ANNUAL REPORT
21
EMBRACING OPPORTUN ITI ES AHEAD | PT MULTIPOLAR TBK 2010 ANNUAL REPORT
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
22
EMBRACING OPPORTUN ITI ES AHEAD | PT MULTIPOLAR TBK 2010 ANNUAL REPORT
23
EMBRACING OPPORTUN ITI ES AHEAD | PT MULTIPOLAR TBK 2010 ANNUAL REPORT
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.
BUSINESS PI LLARS BUSINESS PI LLARS
24
EMBRACING OPPORTUN ITI ES AHEAD | PT MULTIPOLAR TBK 2010 ANNUAL REPORT
25
EMBRACING OPPORTUN ITI ES AHEAD | PT MULTIPOLAR TBK 2010 ANNUAL REPORT
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.
BUSINESS PI LLARS BUSINESS PI LLARS
26
EMBRACING OPPORTUN ITI ES AHEAD | PT MULTIPOLAR TBK 2010 ANNUAL REPORT
27
EMBRACING OPPORTUN ITI ES AHEAD | PT MULTIPOLAR TBK 2010 ANNUAL REPORT
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.
BUSINESS PI LLARS BUSINESS PI LLARS
28
EMBRACING OPPORTUN ITI ES AHEAD | PT MULTIPOLAR TBK 2010 ANNUAL REPORT
29
EMBRACING OPPORTUN ITI ES AHEAD | PT MULTIPOLAR TBK 2010 ANNUAL REPORT
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
30
EMBRACING OPPORTUN ITI ES AHEAD | PT MULTIPOLAR TBK 2010 ANNUAL REPORT
31
EMBRACING OPPORTUN ITI ES AHEAD | PT MULTIPOLAR TBK 2010 ANNUAL REPORT
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
32
EMBRACING OPPORTUN ITI ES AHEAD | PT MULTIPOLAR TBK 2010 ANNUAL REPORT
33
EMBRACING OPPORTUN ITI ES AHEAD | PT MULTIPOLAR TBK 2010 ANNUAL REPORT
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
34
EMBRACING OPPORTUN ITI ES AHEAD | PT MULTIPOLAR TBK 2010 ANNUAL REPORT
35
EMBRACING OPPORTUN ITI ES AHEAD | PT MULTIPOLAR TBK 2010 ANNUAL REPORT
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
36
EMBRACING OPPORTUN ITI ES AHEAD | PT MULTIPOLAR TBK 2010 ANNUAL REPORT
37
EMBRACING OPPORTUN ITI ES AHEAD | PT MULTIPOLAR TBK 2010 ANNUAL REPORT
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.
38
EMBRACING OPPORTUN ITI ES AHEAD | PT MULTIPOLAR TBK 2010 ANNUAL REPORT
39
EMBRACING OPPORTUN ITI ES AHEAD | PT MULTIPOLAR TBK 2010 ANNUAL REPORT
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
EMBRACING OPPORTUN ITI ES AHEAD | PT MULTIPOLAR TBK 2010 ANNUAL REPORT
41
EMBRACING OPPORTUN ITI ES AHEAD | PT MULTIPOLAR TBK 2010 ANNUAL REPORT
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
EMBRACING OPPORTUN ITI ES AHEAD | PT MULTIPOLAR TBK 2010 ANNUAL REPORT
43
EMBRACING OPPORTUN ITI ES AHEAD | PT MULTIPOLAR TBK 2010 ANNUAL REPORT
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.
Dr. Cheng Cheng WenPresident Commissioner
Jonathan L. ParapakIndependent Commissioner
Dr. Isnandar Rachmat Ali, SE, MMIndependent Commissioner
Jeffrey Koes WonsonoPresident Director
Harijono SuwarnoDirector
Antonius Agus SusantoDirector
Reynold Pena OngDirector
• Benyamin J. Mailool resigned as the Commissioner of the Company on 14 July 2010
44
EMBRACING OPPORTUN ITI ES AHEAD | PT MULTIPOLAR TBK 2010 ANNUAL REPORT
45
EMBRACING OPPORTUN ITI ES AHEAD | PT MULTIPOLAR TBK 2010 ANNUAL REPORT
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
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 2 Sign:
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
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 3 Sign:
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
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 4 Sign:
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)
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 5 Sign:
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
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 6 Sign:
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)
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 7 Sign:
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
These consolidated financial statements are originally issued in Indonesian language
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.
These consolidated financial statements are originally issued in Indonesian language
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
100.00 -- Non Operating -- --
PT Sinar Cemerlang Sejati (SCS) Jakarta Services and GeneralTrading
100.00 -- Non Operating -- --
PT Cahaya Inv estama (CI) Jakarta Services and GeneralTrading
100.00 -- Non Operating 5 --
These consolidated financial statements are originally issued in Indonesian language
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 10 Sign:
Subsidiaries Domicile Operations Percentage of Ownership * Start ofCommercialOperations
Tota l Asset
2010%
2009%
2010Rp
2009Rp
PT Cahaya Artha Sejati (CAS) Jakarta Services and GeneralTrading
100.00 -- Non Operating -- --
PT Surya Artha Sejati (SAS) Jakarta Services and GeneralTrading
100.00 -- Non Operating -- --
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
Investment 100.00 -- Non Operating -- --
Hipermart Hypermart HK Ltd ( formerlyTop Eternal Asia Limited)
Hong Kong Investment 100.00 -- Non Operating -- --
Grandstar Capital Limited (GCL) British VirginIslands
Investment 100.00 -- Non Operating -- --
Bluemark Holdings Limited (BHL) British VirginIslands
Investment 100.00 -- Non Operating -- --
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
General Trading 100.00 -- Non Operating -- --
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
General Trading 100.00 -- Non Operating -- --
PT Matahari Department Store (MDS,formerly PT Pacific Utama Tbk)
Tangerang,West Java
Retail Business -- 90.76 1982 -- 1,516,268
These consolidated financial statements are originally issued in Indonesian language
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 11 Sign:
Subsidiaries Domicile Operations Percentage of Ownership * Start ofCommercialOperations
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
General Trading 100.00 -- Non Operating 220,775 --
PT Prima Mentari Persada (PMP) Tangerang,West Java
General Trading 100.00 -- Non Operating 7,557 --
PT Surya Persada Lestari (SPL) Tangerang,West Java
General Trading 100.00 -- Non Operating 7,507 --
PT Surya Megah Lestari (SMGL) Tangerang,West Java
General Trading 100.00 -- Non Operating 1,000 --
PT Surya Asri Lestari (SAL) Tangerang,West Java
General Trading 100.00 -- Non Operating 1,000 --
PT Surya Menara Lestari (SML) Tangerang,West Java
General Trading 100.00 -- Non Operating 1,000 --
PT Surya Pekalongan Lestari (SPKL) Tangerang,West Java
General Trading 100.00 -- Non Operating 1,000 --
PT Balaraja Sentosa (BS) Tangerang,West Java
General Trading 100.00 -- Non Operating 1,000 --
PT Indah Tasikmalaya Persada (ITP) Tangerang,West Java
General Trading 100.00 -- Non Operating 1,000 --
PT Magelang Perkasa (MGLP) Tangerang,West Java
General Trading 100.00 -- Non Operating 1,000 --
PT Panca Megah Utama (PMU) Tangerang,West Java
General Trading 100.00 -- Non Operating 1,000 --
PT Nusa Malioboro Indah (NMI) Tangerang,West Java
General Trading 100.00 -- Non Operating 1,000 --
PT Mega Duta Persada (Duta) Tangerang,West Java
General Trading 100.00 -- Non Operating 1,000 --
PT Citra Cito Perkasa (CCP) Tangerang,West Java
General Trading 100.00 -- Non Operating 1,000 --
PT Mentari Singosaren (MS) Tangerang,West Java
General Trading 100.00 -- Non Operating 1,000 --
These consolidated financial statements are originally issued in Indonesian language
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 12 Sign:
Subsidiaries Domicile Operations Percentage of Ownership * Start ofCommercialOperations
Tota l Asset
2010%
2009%
2010Rp
2009Rp
PT Pesona Klaten Persada (PKP) Tangerang,West Java
General Trading 100.00 -- Non Operating 1,000 --
PT Persada Simpang Lima (PSL) Tangerang,West Java
General Trading 100.00 -- Non Operating 1,000 --
PT Tanjung Bunga Gemilang (TBG) Tangerang,West Java
General Trading 100.00 -- Non Operating 1,000 --
PT Binjai Megah Lestari (BML) Tangerang,West Java
General Trading 100.00 -- Non Operating 1,000 --
PT Mulia Persada Pertiwi (Mulia) Tangerang,West Java
General Trading 100.00 -- Non Operating 17,500 --
* 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.
These consolidated financial statements are originally issued in Indonesian language
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 13 Sign:
(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).
These consolidated financial statements are originally issued in Indonesian language
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 14 Sign:
(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
These consolidated financial statements are originally issued in Indonesian language
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 15 Sign:
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”.
These consolidated financial statements are originally issued in Indonesian language
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 16 Sign:
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.
These consolidated financial statements are originally issued in Indonesian language
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 17 Sign:
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.
These consolidated financial statements are originally issued in Indonesian language
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 18 Sign:
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.
These consolidated financial statements are originally issued in Indonesian language
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 19 Sign:
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.
These consolidated financial statements are originally issued in Indonesian language
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 20 Sign:
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.
These consolidated financial statements are originally issued in Indonesian language
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 21 Sign:
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.
These consolidated financial statements are originally issued in Indonesian language
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 22 Sign:
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
These consolidated financial statements are originally issued in Indonesian language
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 23 Sign:
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.
These consolidated financial statements are originally issued in Indonesian language
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 24 Sign:
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.
These consolidated financial statements are originally issued in Indonesian language
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 25 Sign:
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.
These consolidated financial statements are originally issued in Indonesian language
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 26 Sign:
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
These consolidated financial statements are originally issued in Indonesian language
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 27 Sign:
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
These consolidated financial statements are originally issued in Indonesian language
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 28 Sign:
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.
These consolidated financial statements are originally issued in Indonesian language
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 29 Sign:
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).
These consolidated financial statements are originally issued in Indonesian language
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 30 Sign:
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.
These consolidated financial statements are originally issued in Indonesian language
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 31 Sign:
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.
These consolidated financial statements are originally issued in Indonesian language
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 32 Sign:
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
These consolidated financial statements are originally issued in Indonesian language
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 33 Sign:
Beginning Additions Deductions Transfer in (Out) EndingBalance Balance
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
Beginning Additions Deductions Transfer in (Out) EndingBalance Balance
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
These consolidated financial statements are originally issued in Indonesian language
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 34 Sign:
Beginning Additions Deductions Transfer in (Out) EndingBalance Balance
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
These consolidated financial statements are originally issued in Indonesian language
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 35 Sign:
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.
These consolidated financial statements are originally issued in Indonesian language
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 36 Sign:
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.
These consolidated financial statements are originally issued in Indonesian language
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 37 Sign:
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.
These consolidated financial statements are originally issued in Indonesian language
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 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.
These consolidated financial statements are originally issued in Indonesian language
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 39 Sign:
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
These consolidated financial statements are originally issued in Indonesian language
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 40 Sign:
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;
These consolidated financial statements are originally issued in Indonesian language
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 41 Sign:
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
These consolidated financial statements are originally issued in Indonesian language
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 42 Sign:
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.
These consolidated financial statements are originally issued in Indonesian language
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 43 Sign:
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.
These consolidated financial statements are originally issued in Indonesian language
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 44 Sign:
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.
These consolidated financial statements are originally issued in Indonesian language
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 45 Sign:
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.
These consolidated financial statements are originally issued in Indonesian language
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 46 Sign:
- 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)
These consolidated financial statements are originally issued in Indonesian language
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 47 Sign:
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
These consolidated financial statements are originally issued in Indonesian language
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 48 Sign:
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;
These consolidated financial statements are originally issued in Indonesian language
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 49 Sign:
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).
These consolidated financial statements are originally issued in Indonesian language
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 50 Sign:
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.
These consolidated financial statements are originally issued in Indonesian language
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 51 Sign:
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
These consolidated financial statements are originally issued in Indonesian language
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 52 Sign:
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.
These consolidated financial statements are originally issued in Indonesian language
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 53 Sign:
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)
These consolidated financial statements are originally issued in Indonesian language
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 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).
These consolidated financial statements are originally issued in Indonesian language
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 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
These consolidated financial statements are originally issued in Indonesian language
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 56 Sign:
2010 2009 2010 2009Rp Rp % %
Amount Percentage to TotalAssets/Liabilities
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
These consolidated financial statements are originally issued in Indonesian language
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 57 Sign:
2010 2009 2010 2009Rp Rp % %
Amount Percentage to TotalAssets/Liabilities
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
These consolidated financial statements are originally issued in Indonesian language
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 58 Sign:
2010 2009 2010 2009Rp Rp % %
Amount Percentage to TotalAssets/Liabilities
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
These consolidated financial statements are originally issued in Indonesian language
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 59 Sign:
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.
These consolidated financial statements are originally issued in Indonesian language
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 60 Sign:
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.
These consolidated financial statements are originally issued in Indonesian language
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 61 Sign:
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).
These consolidated financial statements are originally issued in Indonesian language
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 62 Sign:
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”.
These consolidated financial statements are originally issued in Indonesian language
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 63 Sign:
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.
These consolidated financial statements are originally issued in Indonesian language
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 64 Sign:
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).
These consolidated financial statements are originally issued in Indonesian language
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 65 Sign:
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
These consolidated financial statements are originally issued in Indonesian language
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 66 Sign:
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
These consolidated financial statements are originally issued in Indonesian language
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 67 Sign:
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
These consolidated financial statements are originally issued in Indonesian language
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 68 Sign:
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.
These consolidated financial statements are originally issued in Indonesian language
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 69 Sign:
(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:
These consolidated financial statements are originally issued in Indonesian language
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 70 Sign:
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