2015 2015 Annual Report Lippo Karawaci Annual Report lippo karawaci Lippo Karawaci Treading Through Volatility Through Treading 2015 Annual Report Lippo Karawaci Treading PT Lippo Karawaci Tbk Menara Matahari 22nd Floor 7 Boulevard Palem Raya Through Volatility Lippo Village Sentral Tangerang 15811 Banten, Indonesia Tel. (62-21) 2566-9000 Fax. (62-21) 2566-9099 Email: [email protected] website: www.lippokarawaci.co.id Theme Continuity 2010-2014 2010 2011 2012 Laporan Tahunan Lippo Karawaci PT Lippo Karawaci Tbk PT Lippo Karawaci Tbk Annual Report Lippo Karawaci 2010 2011 Picking Up 2012 Annual Report Lippo Karawaci The Beginning Journey: Transformational The Pace Transformational Picking Up The Pace Momentum Laporan Tahunan Transformational Journey: Annual Report Lippo Karawaci 2011 The Beginning PT Lippo Karawaci Tbk Menara Matahari Lt. 22 Lippo Karawaci PT Lippo Karawaci Tbk 7 Boulevard Palem Raya Menara Matahari 22nd Floor Lippo Village Sentral 7 Boulevard Palem Raya Tangerang 15811 Lippo Village Sentral Banten, Indonesia Tangerang 15811 Banten, Indonesia Tel. (62-21) 2566-9000 LaporanAnnual TahunanReport Annual Report Fax. (62-21) 2566-9099 Tel. (62-21) 2566-9000 Email: [email protected] 2010 Fax. (62-21) 2566-9099 website: www.lippokarawaci.co.id Email: [email protected] website: www.lippokarawaci.co.id 2010 2011 Transformational Picking Up Transformational Journey: The Pace Momentum The Beginning Lippo Karawaci has entered Lippo Karawaci is well placed a new phase and is closer to to realize its transformational Lippo Karawaci, with its vision, realizing its transformational journey to become an US$8 professionalism, entrepreneurial journey to become an USD8 billion company by 2015. With a spirit, and solid strategic billion company within the vision to have a positive impact business units have taken the coming four years. With a and deliver value to society in lead to be at the forefront of vision to bring positive impact every development project, Indonesia’s robust economic and value to society in every supported by focused business development. In tandem with development project, supported strategies, an entrepreneurial the Country’s transformational by focused and precise business spirit, strategic business units growth, the Company is now strategies, entrepreneurial spirit, and the continued confidence on the threshold of a bold and solid strategic business units and of its stakeholders, Lippo transformational journey which a consistently increasing market Karawaci has been able to drives its market capitalization to capitalisation, Lippo Karawaci deliver developments that higher levels and triple its asset has strengthened its position as are well planned and have value within the next five years. a premier company and remains again presented an impressive at the forefront of Indonesia’s performance. robust economic growth. Lippo Karawaci has been able to maximize market opportunities via Indonesia’s robust economic growth, resulting in the strong advancement of its core business units, creating a stronger working platform for higher growth in the coming year. Lippo Karawaci has strengthened its position as a premier company in Indonesia. 2013 Accelerating A N N U A L R E P O R T 2013 LIPPOKARAWACI Changes ACCELERATING CHANGES Despite Indonesia’s unfavorable macroeconomic climate in 2013, PT Lippo Karawaci Tbk. (“LPKR”)’s diversified business model once again proved its resilience as the Company was able to increase its Revenues. In its transformational journey to become a USD 8 billion company by 2015, the management intends to accelerate the transformation to elevate its shareholders and brand value. In the middle of its transformational journey, in 2013, LPKR shifted its focus towards high rise projects in order to optimize its assets, and continuously strengthen the Company’s value through its asset light, capital recycling strategies and 10 year landbank. PROPERTIES HEALTHCARE COMMERCIAL ASSET MANAGEMENT The income balancing through a higher contribution from the recurring business compared to development business in 2013, was another testament of LPKR’s proven business model where lower revenue from property business was balanced by higher recurring revenue. Once again, LPKR put its relentless effort to reach the objectives of its transformational journey by delivering world class products supported by solid business strategies to further strengthen its foothold as the most integrated property group in Indonesia. 2014 ANNUAL REPORT 2014 The The Milestones Milestones In the midst of domestic and global challenges in 2014, PT Lippo Karawaci Tbk (“LPKR”) managed to maintain growth with the appropriate business strategy. The Company’s journey commenced in 1993 and has been through a number of challenges and crisis, but its strategy to diversify its business is critical, enabling, the Company to overcome various economic difficulties. In 2010, the Company launched its business transformation program, aiming to be a USD8 billion company by 2015 from USD3 billion in 2010. With this mission in mind, the Company adopted an asset light strategy to ensure sustainability, balancing revenues through a higher contribution from its recurring business. Another strategy was to optimise its limited landbank by developing more high rise projects, tailored to the needs of modern society and burgeoning middle and upper class in Indonesia. Key projects successfully launched in 2014 were St. Moritz Panakukang in Makassar, Embarcadero Eastern and Western Wing in Bintaro, Holland Village Office Tower and Condominium in Central Jakarta, Millenium Village in Lippo Karawaci and Orange County in Cikarang. These achievements are evidence of Lippo Karawaci’s adaptability to various economic conditions, and its transformation journey to become Indonesia’s most integrated property group and well respected globally. 06 38 2015 Annual Report Lippo Karawaci CONTENTS INTRODUCTION 4 } Cover Story COMPANY PROFILE 04 6 } Lippo Karawaci at a Glance 10 } Business Units 14 } Geographic Spread 16 } Corporate Structure MANAGEMENT DISCUSSION GOOD CORPORATE GOVERNANCE 18 } Vision & Mission AND ANALYSIS 20 } Milestones 110 } Foundation of GCG 24 } Corporate Actions 54 } • Business Review Implementation 25 } Lippo Karawaci Facts 58 } - Development Business 111 } Purpose of GCG Implementation 25 } Four Business Divisions 66 } - Recurring Business 112 } General Meeting Of Shareholders 26 } Awards 2015 (GMS) 74 } • Financial Review 28 } Financial Highlights 115 } Board of Commissioners 74 } General Macro-Economic 30 } Stock Highlights Conditions and Indonesia 119 } The Board of Directors 33 } Bonds Highlights 75 } Target Market and Specific 125 } Audit Committee 34 } Event Highlights 2015 Economic Considerations 127 } Nomination and Remuneration 76 } Business Overview Committee MANAGEMENT REPORT 80 } Business Unit Segment Analysis 136 } Internal Control System 86 } Financial Review 139 } Code of Conduct 38 } Report of the Board of 90 } Sales, Marketing and Pricing 139 } Whistleblowing System Commissioners Strategy and Practice 144 } Audit Committee Report 44 } Report of the Board of Directors 92 } Other Material Information 145 } - Profile of Audit Committee 93 } Risk Management 146 } Nomination and Remuneration Committee Report BUSINESS SUPPORT 147 } - Profile of Nomination and Remuneration Committee 148 } Internal Audit Report 98 } Human Resources 149 } - Profile of Internal Audit 104 } Information Technology 150 } Corporate Secretary Report 153 } - Profile of Corporate Secretary 44 52 54 108 CORPORATE DATA 162 } Profile of the Board of Commissioners 166 } Profile of the Board of Directors 170 } Profile of Senior Executives 180 } Projects/Business Unit Addresses 154 188 } Corporate Identity 189 } Supporting Professions & Institutions 190 } List of Subsidiaries 204 } Structure of Subsidiaries 206 } Board of Commissioners’ CORPORATE SOCIAL Statement on RESPONSIBILITY The Responsibility for the 2015 Annual Report of PT Lippo Karawaci Tbk 156 } The Company CSR Policy (‘The Company’) 207 } Board of Directors’ Statement on The Responsibility for the 2015 Annual Report of PT Lippo Karawaci Tbk (‘The Company’) 66 209 } FINANCIAL REPORT 01 • Company Profile Cover Story Treading Through Volatility What will characterize this new normal? Firstly technology will be the catalyst for growth. Digitalization and the advent of the 4th Industrial revolution will create new industries and new opportunities for both established businesses as well as start-ups. Secondly, current volatility is here to stay. Capital markets are awash with liquidity but central banks around the world are struggling to formulate clear monetary and fiscal policies. Thirdly, regional conflicts and tensions will rise as a result of growing nationalistic sentiment. The turmoil in the Middle East has already spread to Europe while the ongoing stand off in the South China Sea is a threat to regional peace and security. Finally, the era of fast paced growth is over. Over the past decade, propelled by emerging economies, the world enjoyed one of the fastest growth spurts in recent history. But with China, Brazil, Russia and other large emerging markets recording slower growth, we must brace ourselves for a new era of slow growth. Outlook for Indonesia What do these trends mean for Indonesia and how does the country sustain economic growth in this new environment? The rapid decline in commodity and oil prices has impacted consumption and domestic demand. Sales of cars,