Report of the Board of Commissioners

“We continued to execute a series of strategic steps to enhance our work efficiency and effectiveness to deal with the dynamics, along with the potential and challenges of the property business in 2022. The management and all employees as a whole built the synergy to work together to optimize the success of the Company and meet our Stakeholders’ expectations.”

Dear Shareholders and Stakeholders,

The Board of Commissioners of PT Intiland Development Tbk (“Intiland”) hereby extends our thanks to the shareholders and all stakeholders for the support, trust, and loyalty given to the Company so far. This support has ignited and strengthened the Company’s spirit in facing the challenges that we encountered throughout 2022. The Company views 2022 as an important momentum for the revival of the property sector in 2023. Market pressures and challenges have encouraged us to always innovate in various aspects, starting from planning, project development, to sales strategy and property management. Our commitments and key steps continued to increase the value of the Company and deliver convenience for the community.

The Board of Commissioners appreciates the Covid-19 Pandemic Management and National Economic Recovery (PC-PEN) Program led by the Government of the Republic of Indonesia in 2022. The program focused on job creation, to boost economic recovery and stimulate the commodity markets. Even so, the property sector, which was starting to recover, was once again held back by the impact of a number of macroeconomic factors. The increase in fuel prices, the trend of rising interest rates for mortgages (KPR), and rising material prices, as well as the removal of a number of policy stimuli from the Government, had given a direct impact on the national property sector. These dynamics certainly added to the burden and challenges that we had to contend with. However, we see that the Board of Directors has demonstrated every effort to maintain and sustain our business growth, through a range of innovative measures.

The Board of Commissioners appreciates the achievements recorded by the Company throughout 2022. We see serious efforts from management and employees as well as the organs of the Company to maintain and improve business performance. We believe that Intiland is able to face every challenge and is able to optimally muster all its resources to achieve success and provide the best results for our stakeholders.

Economic Review

In general, the development of the Indonesian economy in 2022 was quite heartening. Central Bureau of Statistics Indonesia reported that national economic growth in 2022 was recorded at 5.31 percent. This achievement was higher than that in 2021, which was 3.70 percent. We believe that the Government’s policies in handling the Covid-19 pandemic have delivered their intended results. This success was confirmed by the significant drop in the number of Covid patients in 2022. Community activities and business activities have gradually been recovering, thereby promoting more community movement and economic activity.

Even though the national macroeconomic conditions have improved throughout 2022, the national property sector remained quite challenging. Changes in market dynamics spawned a number of new challenges that posed an obstacle to business growth. The Company in 2022 posted marketing sales of Rp1.08 trillion, achieving 44.9 percent of the target of Rp2.4 trillion. Compared with 2021’s achievement of Rp1.64 trillion, the achievement in 2022 was 34.1 percent lower. The decline in sales mainly occurred in the mixed-use and high-rise development segments, such as apartment and office products.

On the other hand, we have observed that the Company has been quite successful in maintaining its revenue performance. The Company’s operating income in 2022 was recorded at Rp3.15 trillion, an increase of 19.8 percent from 2021’s figure of Rp2.63 trillion. The Company’s performance has been on a positive trend now, with profit for the year of Rp192 billion, much improved when compared with 2021, during which the Company suffered a loss of Rp29.1 billion. However, due to the large attribution of profit to projects done in cooperation with other parties, which had resulted in their rather dominant contribution to overall business income, the Company still suffered a net loss of Rp98.8 billion.

The Board of Commissioners appreciates the Government’s sincere effort in maintaining the sustainability of the property business as a focus for national economic recovery. The Government has continued to encourage the property sector to actively contribute to the provision of decent housing for the wider population. The serious effort in maintaining the growth momentum of the property sector was reflected in a number of strategic policies that were launched. These policy stimuli included fiscal policy, legal certainty in the form of streamlining of regulations and permits, and ease of investment in the property sector, as stipulated in the Job Creation Law.

Throughout 2022, the Government succeeded in controlling the inflation rate at 5.51 percent, lower than the initial prediction of 6 percent. However, the property sector faced another challenge due to Bank Indonesia’s raising of its benchmark interest rate. In 2022, Bank Indonesia’s benchmark interest rate climbed five times, from the initial position in 2022 of 3.5 percent to 5.5 percent at the end of the year. This condition prompted banks to start adjusting their lending rates, including interest rates for housing loans (KPR) or apartment ownership loans (KPA). This in turn created a higher risk of cost of funds increases for property developers.

Evaluation of the Performance of the Board of Directors

The Board of Commissioners expresses its gratitude to the Directors who have always carried out the Company’s business activities based on strong moral values by taking into account the Articles of Association, business ethics, and other applicable laws and regulations. We also express our appreciation to the Directors and all employees who have shown serious efforts in safeguarding the Company’s performance amidst the various dynamics and challenges that occurred throughout 2022. The Directors have been excellent at formulating and executing important steps to provide certainty to customers, investors, shareholders, and other stakeholders.

Good Corporate Governance (“GCG”) Implementation and Committee Performance Evaluation

In accordance with the main roles, duties, and responsibilities of the Board of Commissioners, we ensure that all Company organs have implemented GCG principles appropriately. The Company has complied with the obligations contained in various applicable regulations and has made serious efforts to increase transparency to shareholders and stakeholders. The Company publishes policies that remain in line with GCG principles and do not violate existing regulations. The Board of Commissioners throughout 2022 held 6 (six) Board of Commissioners meetings and 10 (ten) joint meetings with members of the Board of Directors. At these meetings, the Board of Commissioners discusses the agenda, including the current situation and conditions, operational and financial performance, challenges and opportunities, risks, to the mitigation steps that must be taken.

The Board of Commissioners also assesses that the Audit Committee and the Nomination and Remuneration Committee have carried out their roles and functions properly and effectively. The two committees succeeded in supporting the Company’s key measures in realizing sustainable business growth.

We opine that throughout 2022 the Company succeeded in carrying out various efforts to analyze the risks that arose and then deployed strong mitigation measures. The Board of Commissioners appreciates all the committees who had truly contributed their extraordinary ideas, thoughts, energy and commitment towards building and developing the Company in a sustainable manner.

Changes in The Composition of The Board of Commissioners

In 2022 there were no changes to the composition of Intiland’s Board of Commissioners. Appreciation On behalf of the Board of Commissioners, I express my deepest gratitude and appreciation for the loyalty and hard work of the Board of Directors and all employees, including our customers, partners, shareholders, and all stakeholders. I believe the Company retains the commitment and seriousness to always provide the best value for all stakeholders. The Company also strives to deliver optimum efforts to maintain business performance growth. In 2022, all the dynamics we encountered served as a motivation for everyone within the Company to produce even more satisfactory work and performance in the coming years, and grow in a sustainable manner.

Sinarto Dharmawan

President Commissioner