Honored Shareholders,

When the world has not fully recovered from the ravages of the Global Financial Crisis which grew out of the US Subprime Mortgage Crisis, we were once again aghast with the looming of a new financial crisis rooted in the European debt crisis. Indonesia, however, was largely spared from its adverse effects. On the contrary, the nation’s economy instead showed economic indicators that tend to grow stronger.

At the close of the first half of 2010, Indonesia’s economy has grown by 5.8 percent, foreign exchange rate reached Rp 9,193 to the US dollar, inflation relatively controlled at the 5.05 percent level, cumulative export reached US$ 157,8 billion, and foreign exchange reserves grew to US$ 96,2 billion.

The performance of the property market also recorded improvements throughout 2010 as shown by a number of indicators such as: more dynamic construction activities, the addition of new projects into the market, the increase in leasing and sales transactions in virtually all the property sub-sectors, the positive trend of average occupancy rates and sales, as well as the increases in rental rates and selling prices.

Average occupancy rate of offices in the Central Business District (CBD) rose to 87.8 percent coupled with an improvement in service charges. Although the rental retail market was characterized by fierce competition with owners offer each other with attractive rental package offers, the average occupancy rate still reached 91.7 percent. Average occupancy rates for 4 and 5-star hotels grew even closer to pre-crisis levels, namely 65.2 and 56.5 percent, with foreign arrivals dominated by guests from Malaysia, Singapore and China. Rental Apartments also experienced an increase, primarily serviced apartments with an average occupancy rate that grew by 8.9 percent over the previous year’s 83.8 percent. Meanwhile, cumulative sales level for existing condominiums supply rose by 0.6 percent to 98.0 percent in the second half of 2010. The majority of these sales was for recently completed projects, targetted to the middle-to-upper class.

Hence, the Company’s positive performance in 2010, in addition to being attributed to the hard work of the Company’s entire management and employees, was also the fruition of a robust domestic economy. The Company booked revenues of Rp 356 billion in 2010, up Rp 18 billion or 5 per cent from Rp 337 billion the previous year.  Similarly, gross profit increased 5 percent from Rp 210 billion to Rp 221 billion. While operating income declined 3 percent to Rp 109 billion from Rp 111 billion due to an increase in operating expenses. Net profit soared by 109 percent from Rp 74 billion in 2009 to Rp 155 billion.

The Company’s overall performance was driven by the performance of its business units: Ciputra Mall Jakarta, Ciputra Mall Semarang, Ciputra Hotel Jakarta as well as Ciputra Hotel Semarang, which grew steadily from year to year. Somerset Grand Citra Jakarta, meanwhile, was not consolidated due to the Company’s ownership of only 39.9 percent. As in the previous year sales of myHome Apartment, which is part of the Ciputra World Jakarta superblock project, also contributed significantly more in 2010 than the previous year, at 6 percent. Additionally, non-operating income such as interest income and capital gains from sales of short-term investments in bonds also contributed Rp 75 billion and Rp 3.5 billion. If in 2009, there were significant losses on foreign exchange, loss on foreign exchange declined by Rp 50.3 billion or 69.7 percent in 2010.

Ciputra Mall and Hotel Jakarta, by way of subsidiary PT Ciputra Sentra, contributed revenues amounting to Rp 227 billion in 2010. While Ciputra Mall and Hotel Semarang, through PT Ciputra Semarang, recorded revenues totalling Rp 105.6 billion. Whereas myHome Apartment that was first launched in 2008 booked revenues amounting to Rp 22.8 billion in 2010.

The Company's revenues grew with the support of the occupancy rates of Ciputra Hotel and Mall, both in Jakarta and Semarang, which were posted higher than the market average. The Average Occupancy Rates of Ciputra Hotel Jakarta and Semarang, were 75 percent and 73 percent respectively. While the Average Occupancy Rates of Ciputra Mall Jakarta and Semarang, were 94 percent and 99 percent, respectively. And Somerset Grand Citra had an occupancy rate of 78 percent, soaring over the previous year’s 61 percent.

With this quite phenomenal increase in net profit in mind, on behalf of the entire management, I am truly honored to be able to report to our shareholders that the Company will propose the disbursement of dividends amounting to 30 percent of net income.

The Company fully executed the agreement to purchase 19 million shares in PT Ciputra Adigraha (CAG) from NSL Properties Pte. Ltd. valued at USD 3.8 million in 2010. The acquisition of 9.5 million shares was made in 2009, and the rest was purchased in 2010 instead of in 2013 as originally planned. The Company fully paid NSL Properties Pte. Ltd. for the acquisition in August 2010. Thus the Company's shareholding in CAG, as of the end 2010, increased to 98.33% compared to 94.63% the previous year.

The remaining proceeds from the 2007 IPO will still be used gradually in accordance with the progress made on the Ciputra World Jakarta project by the Company’s subsidiary, PT Ciputra Adigraha. Nonetheless, there are plans to acquire fresh funds to complete the project, which  entirely funded by internal cash sourced from the remaining IPO proceeds and the collection  of myHome Apartment. The Company has chosen to resort to bank loans rather than bonds issuance and plans to execute by the end of 2011.

The Company’s total assets as of 31 December 2010 increased by 4.7 percent to Rp 3,823 billion. The Company also has no bank loans. Moreover, the Company’s equity was recorded at Rp 3,480.2 billion as of 31 December 2010, or up 5.1 percent over the previous year. The Company also has a very robust balance sheet, due to the absence of loans as well as cash and cash equivalents plus short term investments totalling Rp 1,300 billion.

In addition to the performance of its business units throughout 2010, the Company remains focused on the progress of the CWJ project development which was purposely decelerated the previous year. In line with the resumption of development to full capacity, the CWJ project has reached 32.51 percent completion. The sales of myHome Apartment  was resumed in the 3rd quarter of 2010 after being suspended in 2009 pending more favorable market conditions.

In terms of business expansion, the Company will develop a new project on Lot 11 which is 3.1 hectares in area and located on the same side as the CWJ project on Jl. Prof. Dr. Satrio. On the land that is now partially utilized by the CWJ Marketing Gallery two residential towers will be built in the initial phase. The project will be carried out even with CWJ still in progress as the Company deems it urgent to ride on the momentum of the improving property sector in line with its efforts to maintain growth by deve-loping its landbank. Moreover, we are also open to exploring the possibilities of working with land owners in the Greater Jakarta area in joint venture schemes or buy land deemed appropriate outright.

In closing, on behalf of the Board of Directors and the entire management, allow me to express our highest appreciation to all our employees, without whose professionalism and hard work the Company could not have made its achievements in 2010. I would also like to very sincerely thank the Board of Commissioners who without fail gave its valuable guidance and inputs on managing the Company. And last, but most importantly, I would like to express my heartfelt gratitude to the Shareholders, business partners, customers and other stakeholders for their extraordinary trust in the Company. Hopefully with this continued trust and by the grace of God Almighty we will be able to continue delivering the best and actualize the Company's targets and plansin the future.