Report of the Board of Directors

We have also set 2015 as the year of standardization. This means that all the strategies that the Company has made were executed through the standardization system and procedures toward achieving sustainability in business performance.

Esteemed shareholders,

Indonesia's economic growth in 2015 reached below 5%, lower than the 5.2% figure reported in the previous year, according to Statistics Central Agency. The global economic downturn, especially the ones in Europe and China, also contributes to the impact of Indonesia's unfavorable economic growth.

Coupled with the Bank Indonesia's regulation of Loan-to- Value (LTV ) that sets higher down-payment requirement for property buyers, this all led to the weakening purchasing power of the people; thus, negatively affected many industries and properties businesses indisputably also get the impact.

It has never been an easy task to ensure the business growth of a company in such an economic uncertainty. In spite of this, how a company weathers the storm and strives is also what counts in determining its business sustainability.

PT Intiland Development Tbk has demonstrated its capability to maintain the performance throughout 2015. With innovation and well capability to read the market as its strength, Intiland has created unique markets with product differentiation that maintains the Company's position as one of the leading property developers in Indonesia.

We have also set 2015 as the year of standardization. This means that all the strategies that the Company has made were executed through the standardization system and procedures toward achieving sustainability in business performance. The standardization system and procedures implemented throughout 2015 were also meant to ensure transparency and accountability, to enhance the skills of human capital, and to improve the Company's risk management.

As described further and in more details in this Annual Report, the Company managed to show notable performance amid less favorable economic condition throughout the fiscal year of 2015.

Corporate Performance

Intiland has gone through 2015 with favorable business performance. What contributed to the business sustainability is the Company's ability to create innovative product differentiation, and what counts more is the Company's expertise in creating the markets for these products.

As of the end of 2015, the Company recorded total revenues of Rp2,200.9 billion or a 20.4% increase compared to the previous year amounting Rp 1,827.9 billion. The increase was mostly due to the revenue recognition of our projects, among which are 1Park Avenue, South Quarter, Serenia Hills, Aeropolis and Ngoro Industrial Park.

Our Rp 457.1 billion operating income was a result of 9.2% decrease compared to Rp503.3 billion recorded in 2014. Meanwhile, the Company achieved its net profit of Rp401.5 billion in 2015, a 6.8% down in comparison to Rp 430.5 billion recorded in the previous year. We also booked our development income at Rp 1,974.3 billion or 89.7% from overall revenue, while the balance Rp226.6 billion came from recurring revenue.

In the operational performance, the Company managed to book marketing sales amounting to Rp 1,873 billion, down 24% compared to the 2014's figure at Rp 2,538 billion. The decrease is due to the downturn affecting the Indonesian property market especially during 1H15. Tax regulation uncertainties surrounding luxury tax (PPnBM) and super luxury tax (PPh 22) as well as changes in macroeconomy such as the USD strengthening and the Yuan devaluation have resulted in slowing economy and lower purchasing power.

As for the ongoing and new projects, the biggest contribution came from marketing sales of 1Park Avenue, Serenia Hills in Jakarta, and Graha Golf in Surabaya, as well as industrial estate. There was also an increase in the Company's recurring income with Rp 254 billion, up 42.7% from previous year. The increase contributed significantly to the Company's overall revenue.

The operation of South Quarter is projected to contribute significantly to the recurring income starting 2016. Citibank, one of the international biggest banks, has also signed the agreement with Intiland, in that the prestigious bank will occupy ten floors of one of the buildings in South Quarters.

Human Capital

Intiland always regards that human capital are crucial in the running of the Company. For that reason, the Company always holds regular trainings, seminar and workshop to maintain and enhance the skills of our human capital.

The Company also always searches the best talents in the nation to look for seeds of excellence that will bring the Company to an even higher level.

Board of Directors Composition

One of the members of the Board of Directors, Moedjianto Soesilo Tjahjono proposed his resignation and the General Meeting of Shareholders held on June 9, 2015 agreed to accept his resignation. The meeting didn't appoint the new Director to replace Moedjianto, thus the new composition of the Board of Directors consists of one President Director, two Vice President Directors, one Independent Director, and three Directors.

GCG Implementation

The Company is always determined to implement good corporate governance (GCG). The thorough implementation of GCG shows the seriousness of the Company in observing rules and regulations, aside from realizing the importance of GCG in running the business. That's why the Board of Directors not only formulated various GCG programs, but the Board is also directly involved in their implementation.

All staff in the Company are required to understand and implement the GCG Guidelines in doing their work and responsibility. With the implementation of GCG, the Board of Directors believes the Management have strong guidance in running the Company to achieve notable results.

CSR Activities

The Company remains consistent in the implementation of Corporate Social Responsibility (CSR). In essence, the Company's CSR programs are designed to improve welfare and create harmonious relations with the communities where the Company operates and its projects are situated.

In some extent, the Company has developed its CSR programs further by the inclusion of employee welfare, environmental preservation, and providing education opportunity to the needy through the establishment of Intiland Foundation and Intiland Teduh program.

The Board of Directors, therefore, would like to report the success that the Company has had in formulating its CSR programs throughout 2015, which focus on four areas, namely environment, employment, community development, and product and consumer responsibility.

These four areas have surely strengthened the Intiland's commitment in becoming a good corporate citizen. It is the commitment that we have long held toward giving the best of our contribution toward enhancing the quality of life in the society at large.

Business Outlook

The Board of Directors believes that the 2016 fiscal year will still present difficult challenges to the Company. Yet, the Company will keep capitalizing on its strength to create more markets by means of launching more innovative products.

With the government projecting the economic growth in 2016 will reach 5.2 to 5.6% with the 4.7% inflation rate, this can be translated as an opportunity to grow or at least maintain our position in the marketplace. In general, the demand for property products has the tendency to increase, and we will always continue innovating our product differentiation to create more markets in the coming years.

Awards

We are also excited to see that the Company's work performance and contributions to the property industry and community development have garnered strong public appreciation and recognitions.

A number of awards have also been bestowed on the Company throughout 2015. Among them are, to name a few, the Company being named as one of the 50 public companies by Forbes Indonesia Magazine; and South Quarter with an award from Green Property Awards.

We hope that the various private and government institutions that have awarded us will not lead us to be simply content with ourselves. We also hope that it drives the Company to achieve even better work performance.

Appreciation

At last, please allow me on behalf of the Board of Directors to express our highest gratitude to shareholders and business partners for their trust and continuous support. I would also like to extend our sincere appreciation to all the Commissioners, management and staff for their hard work that have kept us still at the forefront of the industry. We are still one of the leaders in the property industry, and with your support, strong human capital and our innovation and ability to read the market, we believe that Intiland can scale to greater heights in the coming years.

Hendro S. Gondokusumo

President Director