Board of Commissioners
From left to right : Mr. Takashi Togawa, Mr. Hardi Hasmita, Mrs. Muliany Anwar, Mr Tjahyadi Lukiman, Mrs. Linda Lius.
Dear esteemed Shareholders,
In the year 2014, economic growth in developed nations as well as in developing countries tend to be moderate. Growth in countries such as China, India and ASEAN were also conservative.
In the past two years, the performance of the national economy was affected by unfavorable global conditions. Uncertainties related to the normalization of monetary policy in the United States, the economic slowdown in developing countries, as well as the downward trend in global commodity prices negatively impacted Indonesia's economic growth during the year 2013 and 2014.
Indonesia's economic growth in 2014 reached its lowest in the last ļ¬ve years. In 2014 Indonesian economic growth was about 5.02 % , missing the government's target growth of 5.5 percent. Rupiah exchange rate against the U.S. dollar depreciated 20%.
These conditions have negative impacts on general industries especially the cable industry due to the high dependence on imported raw materials which are sold in U.S dollar. As export sales are relatively low, the purchase of raw materials in U.S. dollars outweigh the revenue in U.S dollar
In terms of operations, cable sales were recorded at Rp 2.0 trillion in 2014 with 86.0 % in the domestic market and 14.0 % of exports. Revenue decreased 20.2 % compared to the year 2013 of Rp. 2.51 trillion. In 2014 export sales were Rp. 281.3 billion and Net loss was Rp 85.3 billion. The Company's operating loss in 2014 amounted to Rp. 24.3 billion which is a drastic drop from 2013 operating gain of Rp. 122.7 billion.
The main issue in the cable industry is the forex risk. Imported raw materials were purchased in USD, while export sales are low. The rupiah depreciation is the main reason for the Company losing Rp. 85.3 billion.
For overseeing operations, the Board is assisted by the Audit Committee chaired by an Independent Commissioner and 2 members with ļ¬nance and accounting expertise. The Audit Committee provides input to the Board of Commissioners on the ļ¬nancial statements and effectiveness of internal controls. Moreover, the Audit Committee also reviews the independence and objectivity of the external audit, and the compliance with laws and regulations.
As we enter 2015, there are a number of challenges that we need to anticipate such as, pressure on the exchange rate affected by external factors – policy of the Federal Reserve to increase the interest rate earlier than expected, as well as internal factors- Indonesia's current account deļ¬cit is expected to continue in 2015. The increase in political tension between parliament and government may cause negative impact to the foreign investment to Indonesia.Taking into consideration of a more conservative long term growth.
Voksel is still optimistic that national economy will continue to grow and there will be an increase in demand of various types of cable for property such as residential, commercial, industrial and retail which is a long - term investment will continue to grow even if the growth is not as high as before.
The Board Of Commissioners support the Director’s policies and measures to increase export sales, implementing hedging against the contract of sale, the purchasing of dollars on a daily basis, setting investment priorities which directly support operational and enhancing factory production capacity, controlling costs, implementing procurement policies of raw material efļ¬ciency.
On this occasion, the Board of Commissioners expresses its gratitude and appreciation to the Board of Directors and members of management and all employees for their hard work and dedication. The Board of Commissioners would also like to express its gratitude to the Shareholders, Customers, Partners, Creditors, and the Community for the support, trust, and cooperation given in 2014. We will work towards a better 2015.
Jakarta, April 2015