Report of the Board of Commissioners
Dear Shareholders and other stakeholders,
We herewith convey the report of the execution of the duties supervision and advising to Board of Directors during 2017. Duties and responsibilities The Board of Commissioners has been implemented in accordance with Company’s Articles of Association and legislation. The Board of Commissioners has ensured that the Company’s operational activities have been referred to a business plan that has been established, managed on a regular basis professional, in accordance with the interests of the holder shares and other stakeholders, as well as ensure compliance with all regulations and current regulation.
In this report the Board of Commissioners reports assessment of the performance of the Board of Directors, supervision of implementation of the Company’s strategy, top view business prospects compiled by the Board of Directors, application Good Corporate Governance, assessment of the committee supporting the Board of Commissioners, changes in composition Board of Commissioners and the frequency and mode of granting advice to members of the Board of Directors.
ASSESSMENT OF THE BOARD OF DIRECTORS' PERFORMANCE
The Board of Commissioners rewards that as high as possible to the Board of Directors for the achievement the Company’s excellent performance in 2017. Board The Board of Commissioners believes that the Board of Directors has been able facing economic and industrial challenges and able to capture the opportunities that exist. Therefore that, in assessing the performance of the Board of Directors,economic and industrial conditions are wrong one consideration used by the Board of Commissioners.
Economic and Industrial Analysis
In line with the improving global economy, the Indonesian economy has improved growth, from 5.03% in 2016 to be 5.07% in 2017. The inflation rate is under control well at 3.6%, still in range the inflation target set by Bank Indonesia (BI) of 4 ± 1%. Trade balance surplus as well has increased, reaching USD12 billion throughout 2017, greater than the surplus the balance of trade throughout 2016 is as big as USD9.4 billion.
The improving world and national economy has supporting the strengthening in the construction industry, in particular in order to meet the strategic objectives of development infrastructure. The government has provided support to accelerate the provision of infrastructure, both from financial support, creating a conducive investment climate as well as in reducing the burden of the bureaucracy and expedite administrative processes in infrastructure projects.
Opportunities that exist in the national economy, especially in the construction industry in 2017 captured well by the Company as reflected of the Company’s performance as follows.
Operational and Financial Performance
PT Wijaya Karya (Persero) Tbk. has a business line most complete than some competitors others. This is evidenced through diversification businesses owned by various subsidiaries and the Company’s various associate entities and always synergize to support performance Company.
Superior operational capability makes the Company currently trusted to work on several National Strategic Projects (PSN), such as Roads Balikpapan-Samarinda Toll Road, Soreang-Pasir Koja Toll Road, Paselloreng Dam and so on. The Company is also known to have excellence in technology and innovation, as evidenced by the ability to work on high-tech projects such as Mass Rapid Transit (MRT), Light Rail Transit (LRT), and Simpang Susun Semanggi. All these advantages are sustained by a sound financial profile reflected by ratings given by rating agencies such as Fitch Rating and Pefindo which put the Company at the highest rating level in the industry. PT Wijaya Karya (Persero) Tbk received an AA rating (idn) from Fitch National, BB from Fitch International, idA + from Pefindo and Ba2 from Moody’s International.
During 2017, the Company has been successful increase revenue in almost all segments owned. Revenue from infrastructure and building segments in 2017 reached Rp17.39 trillion, increasing amounting to 132.44%, from the year 2016 of Rp7.48 trillion. Meanwhile, industry segment revenue reaches Rp5.01 trillion increased by 47.96% in comparison the previous year amounted to Rp3.38. trillion Meanwhile energy segment revenue and industrial plant reach Rp4.03 trillion, an increase of 16.97% over the year 2016 of Rp3.44 trillion. Growth of all three segments the Company’s operations have managed to increase the total revenue of 67.06% in 2017.
Improved operational performance in 2017 has had an impact on improving the Company’s assets and profits. Asset The Company increased by 45.70% while earnings are attributable to the owner the parent company increased by 13.52% in 2017.
Company Soundness Level
The level of soundness of the Company measured by Decree of the Minister of State Owned Enterprises Number: 100 / MBU / 2002 shows that overall realization of the Company’s sound level score in the year 2017 is 83.00 with AA and qualification SOUND. The measurements are based on performance Company covering operational, financial aspects and administration.
SUPERVISION TO STRATEGY IMPLEMENTATION OF THE COMPANY
During 2017, the Board of Commissioners has implemented supervision of the management of the Company conducted by the Board of Directors and provide advice to the Board of Directors regarding the Long Term Plan Company, Work Plan and Budget, and Provisions of Articles of Association and Resolution of the GMS, and Legislation that applies to interests of the Company and in accordance with the intent and objectives of the Company.
Supervision on the implementation of the Company’s strategy conducted by Evaluating Business Results Company and Performance Progress Report per Directorate periodically, ie 1 (one) month. Besides The Board of Commissioners also constantly monitors progress of the implementation of the Strategic Project National (PSN) periodically (monthly). That matter done in order to ensure that strategy of the Company has been well implemented.
THE VIEW OF THE IMPLEMENTATION OF GOOD CORPORATE GOVERNANCE
The Board of Commissioners is always evaluating progress of Good Corporate Governance (GCG) implementation practices. This is because the GCG implementation is a key requirement in achieving the Company’s performance sustainable. The Board of Commissioners believes that the implementation of GCG has been enforced very well. This is shown from the self assessment results that have been conducted in 2017. Implementation of GCG self assessment implemented under the Secretary’s Decree Ministry of State-Owned Enterprises Number: SK-16 / S.MBU / 2012 dated June 6, 2012 on Indicator / Assessment and Evaluation Parameters on the Implementation of Good Corporate Governance at SOEs showed a score of 94.93 which means that the implementation of GCG of the Company is very good.
In addition, the Board of Commissioners is also concerned some key issues in GCG implementation like risk management, application of whistleblowing system, and corporate social responsibility. Here’s the view of The Board of Commissioners on the implementation of risk management, whistleblowing system, and corporate social responsibility in the Company.
Active supervision of the Board of Directors and Board of Commissioners to the effectiveness of risk management through execution of duties of the Audit Committee which is one of its duties is to review the implementation of risk management activities conducted by the Board of Directors. Currently, risk management has been using ISO 31000: 2009 framework that has been effectively implemented since 2014.
However, in the process there are still some improvements needed to improve the sharpness in the management of risk management of the Company. These improvements include the following:
- Increased competence and certification of risk management PIC up to Project level.
- Standardization of risk management framework at WIKA Group level.
- Clinical consistency and assistance to work units with cross function system.
Application of Whistleblowing System
The effectiveness of whistleblowing system implementation (WBS) is also the main concern of the Board of Commissioners. The Company already has a Whistleblowing System functioning as a deep facility prevention, disclosure of fraud or fraud within the Company, including Fraud, Money Laundrying, Anti Bribery and Corruption (ABC) discriminated,and other deviation. In view of the Board of Commissioners, the Company has developed mechanism of Whistleblowing System (WBS) that has been possessed by the complaint media, that is through a special email with the address TimKepatuhanGCG@WIKA.co.id as well as the establishment of a special team to handle the complaint.
Associated with the handling of complaints, the Board has made a selection, confirmation (from the aspect of categories of violations, who did and completeness of the documents) and verification, as well as to decide whether the report will be followed up or archived for offenses committed by Members Board of Commissioners, Board of Directors and Supporting Organs of the Board of Commissioners.
The Board of Commissioners provides guidance for the effectiveness of WBS implementation to be intensified, particularly in relation to the evaluation of WBS reporting frequencies that in 2017 there is no WBS reporting. This needs to be studied further, so that the future of WBS will be more effective.
Implementation of Corporate Social Responsibility
Another important thing that gets attention from Board of Commissioners is Corporate Social Responsibility(CSR). The implementation of CSR of the Company has been in line with the implementation of sustainability finances as regulated in POJK No.51 / POJK.03 / 2017 Year 2017 on Implementation of Sustainable Finance for Service Institutions Finance, Issuers and Public Companies. Activities CSR has been done comprehensively, not just philanthropic activities, but attached to each operational activities of the Company.
The Board of Commissioners believes that the Board of Directors has running CSR activities effectively include natural and environmental conservation programs; employment, occupational health and safety; social development and responsibility to the consumer. The Company also has measure the quantitative impact of CSR activities with good, so that CSR activities can always be evaluated for continuous improvement in the future.
VIEWS OF THE PROSPECTS THAT HAVE BEEN COMPILED BY THE BOARD OF DIRECTORS
The Board of Commissioners responded positively business prospects that have been drawn up by the Board of Directors. Prospects business has been prepared on the basis of appropriate assumptions and realistic. Based on Presidential Regulation No.79 of 2017 on Government Work Plan 2018, estimated the construction sector will grow in the range of 6.7%-7.1%. This is also supported by economic growth predictions which reached 5.2% to 5.6%. With Company’s excellence and experience, The Board of Commissioners believes that the Company’s business prospects would be very good.
PERFORMANCE ASSESSMENT OF COMMITTEES UNDER BOARD OF COMMISSIONERS
The Board of Commissioners has supporting committees that have the duty and responsibility to support performance of the Board of Commissioners. The committees have clear working guidelines, so that implementation the task can be directed and effective. Those committees under the Board of Commissioners is the Audit Committee and Nomination, Remuneration and GCG Committee.
The Audit Committee has duties and responsibilities to supervise the effectiveness of the system internal control, risk management, internal audit, financial reporting process. During the year 2017, the Audit Committee has performed its duties among others with provide recommendations to the Board of Commissioners based on a review of financial information, review of risk management implementation activities, review of audit results of the Internal Audit Unit and KAP on Internal Control System.
While the Nomination, Remuneration and GCG Committee is the intended supporting organ to assist the Board of Commissioners regarding Nomination, Remuneration, and evaluation of GCG implementation in WIKA. During 2017, the Nomination, Remuneration and GCG has carried out its tasks among others with give recommendation to the Board of Commissioners above Nomination and Remuneration of Board of Commissioners and Board of Directors, monitoring compliance with the Company’s activities, as well as conducting visits/visits to multiple projects.
The Board of Commissioners periodically conducts the assessment on the effectiveness of the performance of the committees under the Council Commissioner. The Board of Commissioners considers that during by 2017 the committees have undertaken duties and his responsibilities quite effectively.
CHANGE OF THE BOARD COMPOSITION COMMISSIONER
In the period 2017, the number and composition of the Council The Board of Commissioners of the Company has changed as explanation as follows.
Period January 1, 2017 - March 17, 2017
Period January 1, 2017 - March 17, 2017 Board of Commissioners amounting to 6 (six) persons consisting of 1 (one) person President Commissioner, 3 (three) Commissioners and 2 (two) Independent Commissioner. All members of the Board Commissioners are domiciled
|Freddy R. Saragih||Commissioner|
|Imas Aan Ubudiah||Independent Commissioner|
Period March 17, 2017 - December 31, 2017
Period March 17, 2017 - December 31, 2017, the Council Commissioners are 6 (six) persons consisting of 1 (one) the President Commissioner, 3 (three) Commissioners and 2 (two) Independent Commissioners. All members of The Board of Commissioners is domiciled in the working area of the Office WIKA Center.
|Imam Santoso||President Commissioner|
|Freddy R. Saragih||Commissioner|
|Imas Aan Ubudiah||Independent Commissioner|
This change is considered very necessary by the Company to meet the Company’s business needs, based on the evaluation of the controlling shareholder and recommendations of the Board of Commissioners and the Committee Nomination, Remuneration and GCG.
FREQUENCY AND HOW TO ADVISE MEMBER OF THE BOARD OF DIRECTORS
In carrying out its duties in giving advice to members of the Board of Directors, the Board of Commissioners uses mechanism of the Joint Meeting between the Board of Commissioners with the Board of Directors. In the Joint Meeting, the Board of Commissioners provide recommendations to the Board of Directors according to duty, responsibility and authority of Board of Commissioners. During the year 2017 Joint Meeting has been implemented for 14 (fourteen) times by discussing agendas which are appropriate to tasks, responsibilities and authority of the Board of Commissioners.
This is the report of the supervisory duties of the Board of Commissioners on the performance and business performance of the Company in 2017. The Board of Commissioners will always strive for professional and independent in carrying out supervisory and advising functions so that the Company’s performance can always improve in the future will come.
Once again, the Board of Commissioners expressed appreciation to all Board of Directors and the entire management and employees of the Company, thanks to the dedication and hard work, the Company is able to produce good performance in 2017.
Jakarta, April 2, 2018
On behalf of the Board of Commissioners
Changes in BOC composition
Composition of the BOC in 2018 was amended by Decision of the Annual General Meeting on April 24, 2018. The composition of the BOC in 2018 was as follows:
|1||President Commissioner||Imam Santoso||AGMS Desicion dated on March 17, 2017|
|2||Commissioner||Eddy Kristanto||AGMS Desicion dated on April 28, 2016|
|3||Commissioner||Liliek Mayasari||EGMS Desicion dated on Juli 30, 2015|
|4||Commissioner||Freddy R. Saragih||EGMS Desicion dated on Juli 30, 2015|
|5||Independent Commissioner||Imas Aan Ubudiah||AGMS Desicion dated on April 22, 2015|
|6||Independent Commissioner||Achmad hidayat||AGMS Desicion dated on April 24, 2018|
|7||Independent Commissioner||Suryo Hapsoro Tri Utomo||AGMS Desicion dated on April 24, 2018|
It has been implemented an Orientation Program to provide a full understanding on WIKA for the new member of BOC.