Board of Commissioners
From left to right : Mr. Hardi Hasmita, Mr. Takashi Togawa, Mrs. Muliany Anwar, Mr. Kumhal Djamil, Mrs. Linda Lius, Mr. Niu Huaizhi, Mr. Tjahyadi Lukiman..
Dear Esteemed Shareholders,
The world’s economic growth in 2015 had slowed down slightly at 3.1%. Based on IMF prediction, global inflation in 2016 will reach 3.6%. The global economic growth will largely depend on economic development in China, which is projected to decrease to 6.5% in 2016 from 6.9% in 2015.
Since the year 2014, Indonesia's economic growth has been slowing down. However, with the new government in place, government officials and policies reform had set a positive outlook and momentum for the coming years.
Many industries in Indonesia have been affected by slower microeconomic and macroeconomic growth. The postponement of several Government electrical projects as well as slow down in private property projects contributed to sales drop in the Company in 2015 compared to 2014.
The volatile currency exchange from Rupiah to US Dollars during the second half of 2015 became the main risk affecting the Company's performance. As most raw materials were purchased in US Dollar while sales were performed in Rupiah.
From operational aspect, the value of cable sales in 2015 which amounted to IDR 1.60 Trillion, had decreased by 20.25% compare to the total sales in 2014. Cable sales for domestic market was recorded at 98.52% and for export market at 1.48%. The Company recorded a net profit of IDR 277 Million.
The main issue in the cable industry is the foreign exchange risk. Imported raw materials were purchased in USD, while sales in Rupiah depreciated drastically.
For overseeing operations, the Board of Commissioner is assisted by the Audit Committee, which is chaired by an Independent Commissioner and 2 members with finance and accounting expertise. The Audit Committee provides input to the Board of Commissioners on the financial statements and effectiveness of internal control. In addition, the Audit Committee also reviews the independence and objectivity of the external audit, and the compliance with laws and regulations.
The result from Audit Committee’s report concluded that the Consolidated Financial Report was composed accordingly with the Indonesian general principle, internal control had been executed effectively, the application of Good Corporate Governance by the Board of Directors was executed according to the regulations of the capital market and Indonesian Government, there were no violation of Financial Services Authority’s (OJK) regulation nor Indonesia Stock Exchange’s (BEI) regulation and other Indonesian Government’s regulation.
As we enter 2016, there will be challenges that we need to anticipate such as the FED policies that might affect Rupiah currency exchange.
However, with new Government policies to accelerate infrastructure development, reduce logistic costs, improve investment climate and an optimum budget spending, the Company is optimistic that the economy will grow better and it will bring positive effect for the Company. The economic growth in 2016 is predicted to be 5.3%.
Government’s policy in setting Rupiah as the only currency exchange for trading, including with any foreign company, will reduce the fluctuation risk in purchasing raw materials.
The Board of Commissioner fully support every Board of Directors’ actions and policies in increasing the Company’s performance, including their effort to increase export’s sales, implement a hedge against sales contracts, US Dollar purchase, settling investment priority which directly support operations and to increase the factory’s production capacity, controlling costs, executing procurement efficiency and utilizing raw materials.
On this occasion, the Board of Commissioners wish to express our gratitude and appreciation to the Board of Directors and members of management and all employees for their hard work and dedication to the Company. The Board of Commissioners would also like to express our gratitude to the Shareholders, Customers, Partners, Creditors and the Community for their support, trust and cooperation in 2015. We will work towards a better future.
Jakarta, April 2016