PT Multipolar Tbk, referred to as “the Company” hereinafter, is the holding company for a number of business units that are market leaders in their respective businesses.
The Company was founded in 1975 initially as an electronics retailer. Today, the Company has evolved into a strategic investment company with business scopes covering the Retail, Telecommunications, Multimedia and Technology (TMT) segments, as well as Other Businesses and Investments. The Company has expanded its business reach into many regions in Indonesia, strengthening its competitiveness with the most extensive market coverage in the country.
The Company’s core business in the Retail segment is represented by PT Matahari Putra Prima Tbk (MPPA), a modern, multi-format retailer operating Hypermart, SmartClub, Foodmart, Boston Health & Beauty and FMX. MPPA is one of the dominant retailers in the Fast Moving Consumer Goods (FMCG) sector in Indonesia. Over the years, MPPA’s multi-format store concepts have managed to retain their prominent reputation among the consumers as modern retail outlets offering high- quality products and services, catering to the middle- and upper-middle-class market segment. Additionally, MPPA has also started to venture into the e-commerce business.
The Company’s other leading retail business is PT Matahari Department Store Tbk (MDS). In 1972, MDS introduced the modern department store concept in Indonesia and has since consolidated its leadership as Indonesia’s preferred department store. MDS brought about a modern, spacious and convenient department store concept that offers a wide selection of fashion products for clothing and fashion category, as well as beauty products and other home products at affordable prices. MDS also works with trusted local and international suppliers to deliver the latest product variants. In addition, MDS also offers its merchandise online through the MatahariStore.com portal.
Another subsidiary of the Company in the Retail segment, PT Gratia Prima Indonesia (GPI), operates the Books & Beyond bookstore chain (B&B). Along with growing reading interests among the Indonesian populace, B&B offers a comfortable and modern outlet concept with a diverse collection of books and high quality stationery.
In addition, another retail segment is PT Matahari Graha Fantasi (MGF). MGF is the Company’s subsidiary which operates the Timezone family entertainment center chain. Timezone is a family video game facility. Timezone continues to innovate in order to deliver educational experiences for children based on the “learning through play” method. Visitors can exchange tickets dispensed from the machines that have been played for attractive prizes or souvenirs.
In the TMT segment, PT Multipolar Technology Tbk (MLPT) is one of the leading IT System Integrators in Indonesia. MLPT is able to maintain its leadership through the provision of superior and comprehensive IT services and solutions, ranging from Hardware and Integration Services, Application Systems and Implementation Services, and IT Consulting Services to Business Process Managed Services managed by its subsidiary, PT Visionet Data Internasional, as well as providing management and data center operation services which are managed by MLPT’s subsidiary, PT Graha Teknologi Nusantara.
PT First Media Tbk (FM) is the parent company of a group of subsidiaries providing telecommunications services and infrastructure networks, and paid television network with its own broadcast and content production capability.
In Other Businesses and Investments segment, PT Multifiling Mitra Indonesia Tbk (MMI), is a company that focuses on modern archive management services including Record Management, Computer Data Management, Valuable Document Management Services, Electronic Document Management Services, Facility Management Services and other services (among others, application development services and secure documents destruction services).
The Company’s other subsidiaries, PT Nadya Putra Investama and PT Matahari Pacific (NPI & MP) focus themselves on property by developing and managing shopping centers, offices and apartments in several strategic locations in Indonesia.
The Company’s other subsidiary in Other Businesses and Investments segment is Mbiz, which is in the business of providing a web-based platform for the procurement of goods and services targeting the B2B (Business-to-Business) and B2G (Business-to-Government) market segments.
BUSINESS SEGMENTS
Active in telecommunications services, informatic technology industry, general trading including import, export, interinsulair, local and retail, property/real estate development and management services, building space rental and investment. Currently, the Company is the holding company for a number of subsidiaries engaged in business trading, retail, technology, multimedia, and document management. Multipolar MLPL
Vision
To be a leading investment company that offers high added values to the stakeholders and contributes positively to the public in general.
Mission
To accomplish a strategic business portfolio through continuous expansion and investments to create a sustainable growth and gain a maximum corporate value. Multipolar MLPL
ETHICS AND INTEGRITY
To ensure long-term benefits in the application of GCG principles, the Management has implemented GCG as a standard which underpins all management and operational activities. This matter demands unyielding commitment from all elements in the Company so the principles of GCG are upheld with integrity. The Company has established a comprehensive framework of supporting instruments for GCG implementation which included the Code of Conduct, Corporate Policies and Standard Operating Procedures (SOP). The Code of Conduct serves as a basic guideline for all organs and individuals in the Company regarding actions and behaviors that conform to corporate values and culture as well as universal code of business ethics. The entire framework serves as a reference for all employees in the performance of their duties, authorities and responsibilities in accordance with their functions, thus ensuring that the objectives of the Company’s GCG implementation are achieved.
The series of instruments mentioned above are designed to help the Company adhere to the universal ode of good governance principles, which include transparency, accountability, independence, responsibilities and fairness. The Company’s commitment to the implementation of each principle is expressed as follows:
Transparency
The principle of transparency is implemented to determine the decision-making process and present accurate and relevant material information in a manner that is easily accessible to shareholders and stakeholders. The Company also strives to disclose all matters required by existing laws and regulations. This principle is a manifestation of the attitude of forthrightness in the decision-making process and in disclosing material information in a timely and accurate manner. This openness is designed so that shareholders and stakeholders may obtain information about the Company without prejudice to applicable laws and regulations in accordance with GCG.
Accountability
The Company applies the principle of accountability in formulating the functions and responsibilities of each organ to ensure effective business management. The Company applies the principle of accountability by encouraging each individual and/or organ of the Company to realize his/her rights and obligations, duties and responsibilities and authorities. Therefore, every organ and employee of the Company must adhere to the business ethics and codes of conduct that are in effect.
Responsibility
The Company conducts its business vigilantly and prudently in respect to its professionalism and accordance with corporate policies, all applicable rules and regulations, and without interference from any party while at the same time striving to avoid any potential conflicts of interest. In addition, the Company also strives to comply with all existing laws and regulations as well as fulfill its corporate responsibilities toward the society and environment to ensure business continuity.
Independence
The Company manages its business independently, without intervention from external parties. As such, all organs within the Company are obligated to carry out their respective functions and duties in accordance with the Company’s Articles of Association and the prevailing regulations while avoiding conflicts of interest as best as possible to achieve the objectives set forth in decision-making processes.
Fairness and Equality
This principle is to ensure fairness and equality in fulfilling the rights of shareholders and stakeholders in accordance with all prevailing rules as well as corporate policies.
CODE OF CONDUCT
With reference to Financial Services Authority Regulation No.33/POJK.04/2014 dated December 8, 2014 concerning the Board of Directors and Board of Commissioners of Public Listed Companies, the Company has drawn up a Code of Conduct that applies to all members of the Board of Directors and Board of Commissioners as well as all the employees of the Company.
The Company expects that all employees uphold the Company’s established code of conduct to:
Instill company values that are consistent with global standards;
Improve accountability and transparency on an ongoing basis;
Consistently comply with all rules and regulations.
Based on the Code of Conduct, the employees are expected to:
Avoid giving or receiving gifts to or from other parties;
Avoid activities that may create a conflict of interest with the position and the person’s job;
Protect sensitive information held by the Company.
Representing the Company’s stated regulations, the Code of Conduct shall be upheld by all employees without exception. The principles of good corporate governance that reflect transparency, accountability, responsibility, independence and fairness, are practiced as part of the Company’s commitment. In addition, the Code of Conduct is designed to uphold the rights of all stakeholders equally. The Code of Conduct also contains the values that serve as a guide for the Management Team, Board of Directors, Board of Commissioners and all the employees in realising the tasks and responsibilities of daily life. This extends to interactions with employees, shareholders, suppliers and other local officials.
INTERNAL CONTROL SYSTEM
To strengthen corporate governance and internal control within its work environment, the Company set up an Internal Control System combining the functions of Internal Audit Committee and Risk Management. This system, which is outlined in a Standard Operating Procedure (SOP) guideline, ensures effectiveness and efficiency of business activities, reliability of financial reports, security of assets and compliance to laws and regulations. The Company applies this integral system on every action and activity encompassing all business components that altogether support Company goals and objectives.
The Company based its SOP on the Committee of Sponsoring Organizations of the Treadway Commission (COSO) model for evaluating internal controls. The Internal Audit Unit regularly evaluates this SOP to ensure its effectiveness and compliance with constantly changing business environment and conditions.
VIOLATION REPORTING MECHANISM
The Company designed a violation reporting mechanism that allows simplicity, security and ease in reporting violations concerning the Code of Conduct. This system applies to all employees and/or parties connected with the Company. Informants receive guaranteed security and confidentiality during the course of investigating and resolving violations based on the Company’s Code of Conduct, and prevailing laws and regulations
RISK MANAGEMENT
The Company implemented a comprehensive risk management system to achieve strategic objectives and sustainable business operations. This system enables the Company to thoroughly evaluate various potential risk categories, and actively implement effective strategies to mitigate severe impact of relevant risks.
The risk management process involves participation from the Board of Directors, management and employees from each level of the Company and subsidiaries. By incorporating risk management as an integral part of the working culture, the Company can strategically anticipate, and systematically analyze and formulate solutions for various risk scenarios that might emerge from internal or external sources, whether local or global.
The Company’s risk management framework puts into consideration the objectives, strategies, organization, governance, methodology, monitoring and reporting processes in determining the appropriate approach and response.
The following items represent the main components of the framework:
Risk identification, including risk awareness, measurement, monitoring and control.
Risk management infrastructure, including organizational structure, governance system,
data collection, analytical methods, policies, procedures and reporting.
Corporate Culture, including training, performance measurement, development of values and rewards.
Through this guiding framework, the Company can identify and manage risks more proactively. The Company responded accordingly to several risks based on their perspective threat levels.
INVESTMENT IN SUBSIDIARIES AND ASSOCIATE ENTITIES
As a holding company, the Company depends on the business activities and corresponding revenues of its subsidiaries and associate companies. The distribution of profits, management fees and other payments from its subsidiaries and associate companies enable the Company to continuously fund its obligations including liabilities and dividends The Company has shown its ability to manage this level of dependency throughout 2019.
To minimize the impact of investment risks, the Company and its business units strategically invest in a diversified portfolio. The Company carefully and prudently balances risks and returns to minimize risks without reducing the value of its investment returns. Furthermore, it conducts periodic reviews of investment performance, including that of the Company itself, to assess the investment value and optimize the use of investment funds.
SOCIO-POLITICAL
The activities of the Company and its business units form part and parcel of the country’s financial industry. Being such, the Company remains susceptible to national economic and socio-political conditions. A robust economic condition, which boosts investment, domestic growth, employment and purchasing power, rewards the Company with profitable opportunities. On the other hand, political instability negatively affects the entire financial landscape in general and the Company’s performance and business in particular.
The Company managed the socio-political risks by anticipating economic uncertainties brought about by socio-political conditions within the country and abroad. Contingency policies, which were planned and formulated as part of the risk management process, supported continuous business development that prevailed over unstable external conditions adversely affecting the Company’s activities. Moreover, the Company sought to maintain optimal liquidity, and avoided sourcing funds from areas that could potentially cause greater impact due to changes in monetary policy, instability in loan interest and foreign currency fluctuations.
FOREIGN EXCHANGE RATE
The Company conducts a significant number of transactions using foreign currency, specifically US Dollars (USD). These transactions involve capital expenditures, international business units and loan transactions which require conversions from Indonesian Rupiah (IDR) to meet obligations at maturity. Fluctuations in exchange rates, particularly the USD against IDR, created a considerable impact on the Company’s financial condition.
To reduce the risk of currency fluctuations, the Company uses derivative financial instruments such as call spread options.
INTEREST RATE
The Company remains constantly exposed to interest rate risks, particularly for loans that are availed using floating rates.
In recognition of this unavoidable situation, the Company closely monitors interest rate movements to minimize negative impacts and lessen the strain on its financial situation.
BUSINESS COMPETITION
As a holding company with investments in diverse sectors, business competition also poses risks.
Despite the hefty capital expenditure needed to operate, the retail sector attracts investors due to Indonesia’s sizeable domestic market and consumption level. Despite government regulations limiting foreign investments in this specific sector, foreign retail. The country has shown strong potential for e-commerce due to the size of its consumer base, supported by rising Internet penetration and smartphone usage. MPPA has recognized this potential through its online shop and has taken steps to rise above competition.
Hypermarkets and supermarkets, which operate in Indonesia, pose as direct competitors to MPPA’s business. Meantime, the increasingly widespread establishment of minimarkets and general stores, situated conveniently in communities and neighborhoods, indirectly affects MPPA’s retail business. On a smaller scale, traditional markets that are being modernized, also pose a competitive threat to MPPA’s modern trade retail format.
In terms of the country’s department store segment, the major players cater to different market shares according to their respective target consumer segment: lower, middle and upper income consumer. MDS focuses on the middle consumer market.
In a similar fashion, TMT faces threats due to influx of new players and the IT industry’s rapid growth propelled by strong demands for technology to be continuously and consistently current and updated. Tight competition spurs all industry players to perpetually improve services and innovate while maintaining quality in order to survive. By providing comprehensive IT consulting services, complete software and hardware support, and competitive rates with payment term ease, TMT remains ahead of the competition.
In the property sector, both NPI and MP compete with other real estate developers to acquire strategic locations, attract competitive tenant mix and provide the best and complete facilities.
The Company to recognizes, anticipates and plans ahead of these risk scenarios to maintain the Company’s competitive strengths. These eventually may cause the Company and its business units losses in terms of the number of customers and revenue.
The risk of competition motivates the Company and its business units, subsidiaries and associate companies to innovate and create breakthrough projects and activities in order to maintain leadership in their respective markets.
HUMAN RESOURCES
Since human resources hold a key role in all of the Company’s business activities, it becomes essential to maintain a set of high working standards that ensure skilled professionals remain with the Company. To this effect, the Company rewards employees with attractive incentives and packages to combat the biggest challenge of retaining a highly proficient and competent workforce.
The Company and its business units provide balanced policies that take into account the best interest of the business and its employees. Competitive salaries, bonuses and incentives, holiday perks and health benefits, matched by continuous growth opportunities through trainings, seminars and workshops enable the Company to maintain its most valuable human assets. Multipolar MLPL
HEAD OFFICE
Berita Satu Plaza
(d/h Citra Graha) Lantai 7
Jl. Jend. Gatot Subroto Kav. 35-36
Kel. Kuningan Timur, Kec. Setiabudi
Jakarta 12950
OPERATIONAL OFFICE
Menara Matahari Lantai 20-21
Jl. Boulevard Palem Raya No. 7
Lippo Karawaci 1100, Tangerang 15811
Banten
T : +6221 546-8888
F : +6221 547-5147
Email : ir@multipolar-group.com
