Board of Commissioners

 
 

Dear Shareholders and Stakeholders,
By delivering a gratitude to God Almighty for His graceand gift that have been bestowed to all of us, on thisoccasion, on behalf on the Board of Commissioner, weconvey the Annual Report of PT Voksel Electric Tbk. 2017as a Company’s responsibility to Shareholder in particularand to Public in general.

Macroeconomics Overview
Global economy was shifting towards more positivedirection throughout 2017 and managed to achieve 3.6% growth or higher than 3.2% as end of 2016. This was accompanied by economic growth in China, Eurozone,Japan and United States as engine of global economywhich is projected will still be progressive where mostcountries worldwide have been oriented towards progrowth in 2017. Theglobaleconomicgrowthwasalsofollowedbypriceincrementmarkedbyincreasingcommoditypricetrend during 2017. Theconditionalsocontributedin supporting Indonesian export and economic growth throughout2017.

At domestic level, for the last 3 (three) years, Indonesian economy is growing despite at moderate conditionand slightly below the expectation. Pace of household consumption was constrained at 4.94% level in 2017,however, inflation rate of Consumer Price Index (IHK) was stable around 3.61% and Rupiah to United StatesDollar was also stable around Rp13,500/USD level withonly 3% volatility in 2017. Overall, Indonesian economicfundamental indicated recovering trend in 2017. By theend of 2017, Indonesia achieved investment rating gradeMoody and Fitch Rating version. This indicated that investor’s trust to Indonesia is improving.

Evaluation on Strategy Implementation 2017
Strategy of the Company in 2017 focused on revenuesgrowth initiative. Through this strategy, the Board ofCommissioners has evaluated the Management hasaligned the Company not only to pursue revenue targetbut also balance revenues and income. The Board ofCommissioners views this effort is very appropriate for the Company’s long-term business and operations. The Board of ommissioners also gladly welcomed the appreciationaward received by the Company, including OccupationalSafety Management System Certification (SMK3) forAdvance Level by Ministry of Manpower, SNI Award 2017in Gold category, Major Company in Electronics, Metaland Metal Products Sectors by BSN (National Certification Agency), The Best Electrical Support – MDU Network,IBEA 2017, QCC National Level, TKMPN (National Qualityand Productivity Project Conference) Forum & IQPC(International Quality and Productivity Convention) 2017for Gold Category, in Padang.

On the other hand, the Board of Commissioners alsoappreciated Management’s commitment in usinglocal contents. Besides compliance with the Law, localcontents use is also expected to support supply chainand reliability of the Company’s production process. Innon-financial aspect, the Board of Commissioners viewsthe Company has successfully recorded significantimprovements. In 2017, the Company managed to obtainand maintain operational quality certification andstandard recognitions, among others, ISO 9001:2015, ISO14001:2015, OHSAS 18001:2007 and PROPER by Ministry ofEnvironment indicating operational aspect managementin the Company has complied with best practice andregulations applied by the Regulators.

Evaluation on Board of Directors Performance 2017
The Board of Commissioners assessed the Board ofDirectors has delivered optimum effort in overcomingevery challenge in 2017 and achieved excellentperformance of the Company.

In terms of Company’s performance, the Board ofCommissioners evaluated the Management hassuccessfully solved 2 (two) main challenges in 2017, whichwere high cable demand from Government InfrastructureProject and uncertain delivery schedule. As initiatives toovercome these challenges, the Board of Commissionershas contributed in supervising and giving recommendationto the Management to place measurable investmentwhile also maintain liquidity and focused to increaseproduction capacity of our plants and reliability of ourmachines by using machineries with more sophisticated technology. The Board of Commissioners also has warned the Management to continuously improve inventorymanagement and monitor receivables collectability.

Thanks to good strategy implementation by the Board of Directors and all Management, in 2017, PT Voksel ElectricTbk. recorded a satisfying performance with net incomerealization achieving Rp166 billion or grew 3.8% fromRp160 billion booked in 2016. We shall highlight that the Company’s revenues realization is 11.7% higher than 2016.

Related to the Company’s performance, the Board of Commissioners also noted that Human capital stillbecomes key element for the Company’s growth. Therefore, Management shall preserve commitment toimplement people management development and ensure that all personnel in the Company also grow altogetherwith the Company’s growth.

Evaluation on Business Prospect 2018
The Board of Directors has prepared Company Budget Plan (RKAP) 2018 according to economy and industry prospectin 2018 which indicated positive growth indicators. From State Budget and Expenditure (APBN) side, Bank Indonesiaprojected economic growth is projected will grow around 5.1% - 5.8%  where inflation will be stable around 3.5%level and currency rate will steadily move aroundRp13,500/United States Dollar. Budget deficit is projectedwill be maintained and support favorable growth of theindustry and market throughout 2018.

Sequence of the Government’s infrastructure project and electricity megaproject as well as economic growth willprovide sufficient space for the Company to increase itsperformance in the future. On the other hand, national level activity agenda in 2018 present implementationof simultaneous Regional Election (Pilkada) and ASIANGames which are predicted to trigger public expenditureinto higher level. Related to these conditions, the Boardof Commissioners assessed the Board of Directors hadprepared necessary strategy and action to approach2018 and believes the Board of Directors will bring theCompany to optimize every coming business opportunityin the upcoming year.

Furthermore, the Board of Commissioners suggested the Board of Directors to concern global trend and potentialrisks which may influence the Company’s performance. One of the potential risks in 2018 is uncertain geopoliticalrisk which may lead to rapid shifting of liquidity. Therewill be also fiscal policy as tapering off in tax revenueand corporate tax in United States as well as TheFed’s monetary policy normalization that will triggerreverse funds stream and stronger United States Dollarexchange rate. Next risk is related to growth which will beexperienced by pro-growth countries where Asia region isnow moving forward with stronger growth and will causeinflation pressure and monetary tightening. The Boardof Commissioners wished that the Company’s strategy implementation next year has considered these potential risks.

Evaluation on Corporate Governance Practice2017
In Good Corporate Governance (GCG) aspect, the Board ofCommissioners highly appreciated efforts of the Board ofDirectors in supporting and improving quality of reportingand communication systems so that the performance monitoring process can be well implemented. Throughout2017, the Board of Commissioners provided support tothe Board of Directors continuously to improve quality ofGCG practice in the Company as main foundation for theCompany’s business and operational growth.

In line with GCG practice enhancement, the Board ofCommissioners also actively provided advise and

recommendation related to supervisory function invarious meetings held in 2017. Through the monthlymanagement meetings, the Board of Commissionershad coordinated with the Board of Directors related toCompany’s performance implementation and monitoringincluding internal control aspect and internal audit finding.

The Board of Commissioners also ensures that the Board of Directors consistently develops transparency andgood reporting culture as initiative of whistleblowingsystem establishment in the Company. The Board ofCommissioners encouraged transparent communicationclimate and expected the Board of Directors will facilitatethe open reporting and communication mechanism todevelop mutual trust, transparent and accountablecultures in the Company as manifestation of GCG principle.

Evaluation on Performance of Committees Underthe Board of Commissioners
Implementation of Board of Commissioners’ supervisoryduty throughout 2017 was also supported by thecommittees under the Board of Commissioners, that areAudit Committee and Nomination and RemunerationCommittee.

Audit Committee had supervised follow-up of audit report both internal and external audit in order to assesssufficiency of internal control, including the financialreporting process. On the other hand, the Nominationand Remuneration Committee had reviewed and discuss remuneration calculation and recommendation relatedto remuneration package for the Board of Commissioners and Board of Directors to the Annual GMS.

Based on the reports submitted by both committees, the Board of Commissioners evaluates that the AuditCommittee and Nomination and Remuneration Committee have worked optimally in supporting the Board ofCommissioners, particularly related to upon financial andoperational supervisory activities as well as remunerationpolicy in 2017.

Changes in Board of Commissioners Composition2017
In 2017, Board of Commissioners membership compositionwas changed according to Annual General Meetings ofShareholders (AGMS) 2017 Resolutions that approvedresignation of Mr. Takashi Togawa and Mr. Huaizhi Niuas Commissioner and appointment of Mr. Tan Huiliang asCommissioner.

Appreciation

Last but not least, the Board of Commissioners thank the Board of Directors and all Management as well asemployees for the Company’s performance in 2017. Toour Shareholders and all stakeholders, including theregulator, business partner and all customers, the Boardof Commissioners expressed utmost appreciation forsupports given to the Company throughout 2017.

Let’s work together, hand in hand, to optimize ourexperience into reality as better Company’s performance in the future.

Jakarta, March 2018