2016 Annual Report English1
Forging
Ahead
The global energy sector recorded extreme volatility during 2016
in the coal as well as oil and gas sector, with prices dropping to
record lows before spiking towards the end of the year.
Indika Energy forged ahead amidst these challenging
circumstances, successfully reducing costs further and stabilizing
operations during the year. Although bottom line results were
impacted by the unconducive climate, overall the business
showed fundamental improvements, on track for positive growth.
Going forward, Indika Energy remains committed to its vision
to be a world-class Indonesian energy company, one committed
to help meet Indonesia’s need for energy through a strategy of
integrated competencies in energy resources, energy services
and energy infrastructure.
1
25
THEME
FINANCIAL
HIGHLIGHTS
5
CORPORATE
OVERVIEW
6
Indika Energy at a Glance
8
Capabilities Across the Entire
Coal Value Chain
10
Operations Map
12
Milestones
14
Corporate Structure
16
Organisation Structure
18
Vision, Mission and Values
20
Business Strategy
22
Composition of Shareholders
26
Indika Energy Financial
Highlights
29
Stock Highlights
30
Financial Highlights Associate Company - Kideco
35
PRESIDENT
COMMISSIONER’S
AND PRESIDENT
DIRECTOR’S
MESSAGES
36
President Commissioner’s
Message
40
President Director’s Message
45
125
BOARD
PROFILES
FINANCIAL
STATEMENTS
59
299
MANAGEMENT
REPORT
COMPANY
ADDRESSES
60
Economy and Industry
Overview
62
Operational Review
76
Financial Review
80
Business Prospects
& Key Risk Factors
86
Information and
Communications Technology
88
Corporate Governance
112
Implementation of Corporate
Governance Guidelines
116
Human Capital
118
Corporate Social
Responsibility
120
Subsequent Events
CORPORATE
OVERVIEW
Indika Energy at
a Glance
PT Indika Energy Tbk. (“Indika Energy” or “the Company”) was listed in Indonesian Stock Exchange (IDX) in 2008.
Established in 2000, Indika Energy has grown to be one of Indonesia’s leading integrated energy companies with a portfolio of
businesses spanning the energy resources, energy services and energy infrastructure sectors.
Over the years, the Company has grown from strength to strength both organically and through acquisition of synergistic businesses.
With its portfolio of businesses, the Company is able to provide complementary products and services to domestic and international
customers, thereby positioning the Company to capture growth opportunities across the Indonesian energy sector.
Today, Indika Energy has developed to have operational activities in various areas of the Indonesia archipelago.
The three business pillars of Indika Energy’s key operations are:
ENERGY
RESOURCES
46.0%
85.0%
PT Kideco Jaya Agung
PT Multi Tambangjaya Utama
PT Multi Tambangjaya Utama,a thermal
bituminous and coking coal asset in
Central Kalimantan
Indonesia’s third largest coal mining
company, located in East Kalimantan
100%
100%
PT Indika Inti Corporindo
Indika Capital Investment Pte.Ltd.
a coal trader
a coal trader
34.9%
60.0%
PT Santan Batubara
PT Mitra Energi Agung
PT Santan Batubara, a coal mining
company in East Kalimantan
Mitra Energi Agung, a greenfield coal
mining project in East Kalimantan
PT Indika Energy Tbk.
6
ENERGY
SERVICES
PT Petrosea Tbk.
an engineering & construction (E&C) and coal
contract mining company
PT Tripatra Engineering &
PT Tripatra Engineers & Constructors
, engineering, procurement and construction (EPC) oil
& gas services companies
69.8%
100%
ENERGY
INFRASTRUCTURE
51.0% 100% 46.0%
PT Mitrabahtera Segara Sejati Tbk.
an integrated transport & logistics services
company for the mining industry
PT Kuala Pelabuhan Indonesia
an integrated port management services
in Papua
PT Sea Bridge Shipping
domestic goods shipment
20.0% 99.8% 6.3%
PT Cirebon Electric Power
a 660 MW coal-fired steam power
generation plant in Cirebon, West Java
Petrosea Ofshore Supply Base
(POSB)
an integrated offshore supply base in East
Kalimantan
PT Cirebon Energi Prasarana
a 1000 MW coal-fired power generation
plant in Cirebon, West Java
45.0%
PT Cotrans Asia
a coal transportation company
7
Annual Report 2016
Capabilities
Across the Entire
Coal Value Chain
PT Indika Energy Tbk.
8
9
Annual Report 2016
Operations
Map
2
5
4
3
3
1
1
PT Indika Energy Tbk.
10
10
4
2
5
4
10
3
3
2
2
7
9
1
2
6
6
8
1
ENERGY RESOURCES ▲
ENERGY SERVICES n
ENERGY INFRASTRUCTURE ●
1
Multi Tambangjaya Utama
1
Exxon Mobil Cepu Project
1
Cirebon Electric Power
2
Kideco Jaya Agung
2
JOB Pertamina Medco - Senoro
2
Petrosea Offshore Supply Base
3
Santan Batubara
3
Pertamina HE ONWJ
3
Kuala Pelabuhan Indonesia
4
Mitra Energi Agung
4
Conoco Phillips - ESC
5
BP Tangguh
6
ENI Muara Bakau
1
FC Nicholas
7
Binuang Mitra Bersama
2
FC Ben Glory
8
Anzawara Satria
3
FC Abby
9
Indonesia Cemerlang
4
FC Chloe
10 Indonesia Pratama
5
FC Blitz
11
Kideco Jaya Agung
6
FC Vittoria
12
Santan Batubara*
FLOATING CRANE Â
* under suspension
11
Annual Report 2016
Milestones
2000
The establishment of Indika Energy
Indika Energy acquired a 41% stake in Kideco.
2004
2006
Kideco was established in 1982, engages in open-cut coal mining in East Kalimantan.
Kideco holds CCoW first generation Mining Rights until 2023.
Indika Energy increased its stake in Kideco by 5% to 46%.
• Indika Energy completed mergers with Tripatra Company and Ganesha Intra
Development Company.
• Tripatra Company was established in 1973, engages in engineering, procurement
and construction (EPC), operation & maintenance (O&M) in the energy sector.
• The establishment of Cirebon Electric Power, a 660MW coal-fired steam power
generation plant. Indika Energy owns 20% stake in CEP.
2007
• Tripatra acquired a 45% stake in Cotrans Asia, a coal logistics company established
in 2004.
• Indika Energy held its Initial Public Offering (IPO) on the Indonesia Stock Exchange,
offering 937,284,000 shares or 20% ownership.
• The establishment of Sea Bridge Shipping, a transhipment service company, in
which Tripatra owns a 46% stake.
2008
• Kuala Pelabuhan Indonesia (KPI), became a wholly owned subsidiary of Tripatra
through the acquisition of an additional 50.1% stake.
Indika Energy acquired a 98.55% stake in Petrosea.
2009
PT Indika Energy Tbk.
Petrosea was established in 1972, and engages in engineering & construction (E&C)
and coal mining contractor.
12
• The establishment of Indika Logistic & Support Services (ILSS).
2010
• Indika Energy entered into an Option Agreement to acquire 51% stake in MBSS.
MBSS was established in 1994, engages in sea transportation and logistics services.
2011
Indika Energy acquired a 51% stake in MBSS.
• Indika Energy divested 28.75% of its shares in Petrosea.
• Indika Energy acquired a 60% stake in Mitra Energi Agung (MEA).
MEA was established in 2008 as a greenfield coal asset which owns an IUP
concession area of 5,000 Ha in East Kalimantan.
• Indika Energy acquired a 85% stake in Multi Tambangjaya Utama.
MUTU was established in 1989 as a bituminous thermal and coking coal mine
holding a third generation CCoW in Central Kalimantan, with a concession area of
24,970 Ha.
2012
• Cirebon Electric Power, a 660MW coal-fired steam power generation plant, reached
its Commercial Operation Date (COD) and was fully operational.
2013
Indika Logistic & Support Services acquired a 95% of Tripatra’s shares in KPI.
• Initial operation of Indy Bintaro Office complex with the moving in Petrosea office.
2015
• Establishment of Indika Multi Niaga.
• September
Tripatra awarded Tangguh LNG Expansion Project – Train 3.
2016
• October
MUTU started initial production.
13
Annual Report 2016
Corporate Structure
ENERGY RESOURCES
100%
PT Indika Multi Energi
(Indonesia)
General trading
ENERGY SERVICES
90%
100%
PT Indika Indonesia
Resources (Indonesia)
PT Indika Inti Corpindo
(Indonesia)
Mining and trading
Investment and general trading
100%
10%
Indika Capital
Resources
Limited (B.V.I)
Financing
PT Kideco Jaya
Agung (Indonesia)
Exploration,
development, mining
and marketing of coal
Coal transportation
and transhipment
service
PT Sea Bridge
Shipping
(Indonesia)
Domestic goods
shipment
Tripatra (Singapore)
Pte. Ltd. (Singapore)
Investment
Investment
Tripatra Investments
Limited (B.V.I)
Investment
100%
60%
PT Citra Indah Prima
(Indonesia)
46%
Coal and mineral
trading and general
trading activities
PT Cotrans Asia
(Indonesia)
100%
100%
Indika Capital
Investments Pte.
Ltd. (Singapore)
Consultation services for
construction, industry and
infrastructure
100%
Trading
60%
Indika Energy
Trading Pte.Ltd.
(Singapore)
Coal trading and mining
consultancy
43,30%
PT Intan Resource
Indonesia (Indonesia)
Provision of consultancy
services, construction business
and trading
46%
Coal mining
100%
85%
PT Multi
Tambangjaya
Utama (Indonesia)
100%
PT Tripatra Engineering
(Indonesia)
45%
Coal mining
Marketing and
investment
60%
PT Mitra Energi
Agung (Indonesia)
Indika Capital
Pte. Ltd. (Singapore)
100%
PT Indika Multi Daya
Energi (Indonesia)
General trading
100%
PT Tripatra Engineers
and Constructors
(Indonesia)
PT Indika Energy
Trading (Indonesia)
Trading
90%
90%
PT Sindo Resources
(Indonesia)
PT Melawi Rimba
Minerals
(Indonesia)
Mining
Mining
Note :
100% share ownership of Indonesian limited liability company (PT) held by 2 shareholders both of which are PT Indika Energy Tbk.
and or its subsidiaries.
PT Indika Energy Tbk.
14
ENERGY INFRASTRUCTURE
100%
69,80%
PT Petrosea Tbk.
(Indonesia)
Engineering, construction,
mining and other services
90%
Indika Power
Investments Pte. Ltd
(Singapore)
PT Indika Infrastruktur
Investindo (Indonesia)
Investment
Trading, development and
services
Indo Integrated
Energy II B.V.
(The Netherlands)
15%
PT Cirebon Power
Services (Indonesia)
Financing
Operations and maintenance
of electrical equipment and
facilities
Indo Energy Finance
B.V.
(The Netherlands)
Financing
100%
Indo Energy Capital
B.V. (The Netherlands)
Financing
51,25%
Port operation
100%
PT Indika Logistic &
Support Services
(Indonesia)
Trading, industry,
mining and services
PT Mitrabahtera
Segara Sejati Tbk.
(Indonesia)
Sea logistics and
transhipment
Financing
51%
General trading
100%
Trading, mining and other
industries
PT LPG Distribusi
Indonesia
(Indonesia)
100%
PT Indika Multi
Energi
Internasional
(Indonesia)
Indo Energy Finance
II B.V.
(The Netherlands)
100%
25%
60%
PT Prasarana Energi
Indonesia (Indonesia)
PT Mitra Alam Segara
Sejati (Indonesia)
General trading
Shipping
Indo Energy Capital
II B.V.
(The Netherlands)
Financing
100%
PT Indika Multi Niaga
(Indonesia)
100%
69,97%
Transportation
management services,
trading and other services
PT Prasarana Energi
Cirebon (Indonesia)
PT Mitra Swire CTM
(Indonesia)
General trading
Shipping
95%
25%
PT Kuala Pelabuhan
Indonesia (Indonesia)
Port operation
PT Cirebon
Prasarana Energi
(Indonesia)
Coal-fired power plant
15
100%
Mahaka Industri
Perdana (Indonesia)
5%
100%
Specific port
management
Financing
99,80%
PT POSB
Infrastructure
Kalimantan
(Indonesia)
Coal-fired power plant
100%
Hazardous waste
management
Indo Integrated
Energy B.V.
(The Netherlands)
99,90%
PT POSB
Reksabumi
Indonesia
(Indonesia)
PT Cirebon Electric
Power (Indonesia)
100%
Trading and
contracting services
Development, services
and trading
15%
5%
99,80%
PT Petrosea
Kalimantan
(Indonesia)
50%
Coal mining
PT Indy Properti
Indonesia (Indonesia)
Investment
5%
PT Santan Batubara
(Indonesia)
100%
99,90%
PT Indika Energy
Infrastructure
(Indonesia)
50%
51%
100%
PT Mitra Hartono
Sejati
(Indonesia)
PT Mitra Jaya
Offshore
(Indonesia)
Mitrabahtera Segara
Sejati Pte.Ltd.
(Singapore)
Shipping
Shipping
Shipping
Annual Report 2016
Organization
Structure
COMMITTEE
AUDIT & CORPORATE
GOVERNANCE
COMMITTEE
RISK & INVESTMENT
BOARD OF
DIRECTORS
HEAD OF CORPORATE
SECRETARY
HEAD OF INTERNAL AUDIT
HEAD OF FINANCE,
ACCOUNTING, AND
BUSINESS SUPPORTS
PT Indika Energy Tbk.
DIRECTOR
Azis Armand
HEAD OF STRATEGY
AND BUSINESS
DEVELOPMENT
16
HEAD OF CORPORATE
FINANCE AND INVESTOR
RELATIONS
BOARD OF
COMMISSIONERS
COMMITTEE
HUMAN CAPITAL
PRESIDENT DIRECTOR
Group Chief Executive Officer
M. Arsjad Rasjid P.M.
HEAD OF CEO OFFICE &
HEAD OF CORPORATE
COMMUNICATIIONS &
SUSTAINABILITY
INDEPENDENT DIRECTOR
Eddy Junaedy Danu
HEAD OF CORPORATE
RISK MANAGEMENT
HEAD OF LEGAL
17
Annual Report 2016
PT Indika Energy Tbk.
18
Vision,
Mission and
Values
VISION
VALUES
To be a world-class Indonesian energy company recognized for
its integrated competencies in energy resources, services and
infrastructure.
Integrity: Honest with oneself, others and one’s work at every
moment by upholding prevailing ethical standards and legal
norms.
Unity in diversity: Viewing diversity as an asset to the
company and accepting, valuing, completing and strengthening
one another as a solidly unified entity.
MISSION
1. To capitalise on the abundant energy resources in support of
the global economic growth.
Teamwork: Actively contributing and collaborating based on
trust and shared interests rather than personal interests.
2. To create integration and synergies across businesses.
Achievement: Achievement as the measure of success and
the motivation to do what is best for the company.
3. To create optimum shareholders value.
Social Responsibility: Highly concerned for the environment
and community, and contributing added value as well as
contributing to the prosperity of the society.
4. To continuously develop its human capital.
5. To become a good corporate citizen.
19
Annual Report 2016
Business
Strategy
Indika Energy’s five long term business
strategies are reflected in its focus on
creating synergies within the Company’s
three business pillars, boosting organic
growth and expanding through
acquisitions, to generate value to
stakeholders.
Related to the prolonged decline in coal
prices, the Company continued to focus
on, and consistently implement, a strategy
of improved operational efficiency, cash
preservation and cost optimisation.
The management conducted ongoing
efforts to optimise asset utilisation,
reduce cost across the entire organisation,
rasionalise human capital and allocate
capital expenditure prudently.
PT Indika Energy Tbk.
20
1
TO CAPITALISE ON INDONESIA’S ABUNDANT NATURAL
RESOURCES AND GROWTH IN ENERGY DEMAND, INCLUDING
IDENTIFYING AND ACQUIRING ATTRACTIVE ENERGY INVESTMENTS.
2
TO INTEGRATE DIVERSE ENERGY PLATFORMS AND EXTRACT
OPERATIONAL EFFICIENCIES.
3
TO LEVERAGE EXISTING PARTNERSHIPS AND EXPERTISE IN THE
ENERGY SECTOR BY PURSUING INITIATIVES AIMED AT SUPPLYING
AND SERVING NEW MARKETS.
4
TO OPTIMISE PRODUCTION OPERATIONAL EFFICIENCIES BY
LEVERAGING EXISTING ASSETS FOR PRODUCTIVITY AND
EFFICIENCY IN THE MINING OPERATIONS
5
TO CONTINUE TO DIVERSIFY EARNINGS SOURCES AND STABILISE
CASH FLOWS.
Indika Energy seeks out investments in the energy sector through a disciplined acquisition
approach based on deep comprehension of energy assets. This requires Indika Energy to
stay informed of natural resources regulatory developments and to promote Indonesia’s
economic development through its domestic and international interests.
Indika Energy’s expertise and capabilities now span the entire coal energy operations
business chain. Improved operational flexibility and cost management, and the provision
of efficient services to clients throughout the value chain, are critical to extracting
synergies from this integration.
Currently, Indika Energy plays a considerably large role in the coal mining industry as
well as nationwide energy services including the logistics and energy infrastructure
(power plant) businesses. Kideco’s international customers include leading power plant
companies from 16 countries across Asia and Europe. Its eco-friendly, low calorific,
low-ash and low-sulfur coal gives rise to the possibility through blending of creating
new products, for new markets.
Through structural planning and corporate work plans, Indika Energy’s advanced
Information and Communication Technology (ICT) system has been harnessed to support
business decision making processes and objectives across all business units to achieve
optimal efficiencies in the use of resources, cost management, fleet management and
operational flexibility.
Indika Energy’s business includes integrating attractive investments to diversify and
grow earnings while maintaining financial prudence to ensure value protection
21
Annual Report 2016
Shareholding
Structure
as of 31 December 2016
Public
(34.68%)
Board of Commissioners
& Board of Directors
(1.85%)
PT Indika Mitra Energi
(63.47%)
SHARE OWNERSHIP BY BOARD OF COMMISSIONERS & BOARD OF DIRECTORS
AS OF 31 DECEMBER 2016
NO. NAME
POSITION
1
Agus Lasmono
President Commissioner
2
Richard Bruce Ness
Commissioner
3
M, Chatib Basri
Independent Commissioner
4
Boyke W, Mukiyat
Independent Commissioner
-
-
5
M, Arsjad Rasjid P,M,
President Director
1,208,000
0.02
6
Azis Armand
Director
1,208,000
0.02
7
Eddy Junaedy Danu
Independent Director
81,880,500
1.57
92,262,500
1.83
Total
PT Indika Energy Tbk.
22
SHARES AMOUNT
SHARES (%)
10,156,000
0.19
810,000
0.02
-
-
CAPITAL STRUCTURE AS OF 31 DECEMBER 2016
AUTHORIZED CAPITAL
ISSUED & PAID-UP CAPITAL
Rp 1,700,000,000,000 (Divided into
Rp 521,019,200,000 (US$ 56,892,154)
17,000,000,000 shares, each share with a (Divided into 5,210,192,000 Shares)
par value of Rp 100)
CONTROLLING SHAREHOLDERS AS OF 31 DECEMBER 2016
OWNERSHIP STATUS
PT Indika Mitra Energi*
JPMCB NA Re-JPMCB
Singapore Branch
NUMBER OF SHARES
OWNERSHIP (%)
3,307,097,790
63,47
271,762,000
5,22
*) Controlled by Wiwoho Basuki Tjokronegoro & family with 40.5% ownership and Agus Lasmono with 59.5%
ownership.
SHARE OWNERSHIP COMPOSITION AS OF 31 DECEMBER 2016
OWNERSHIP STATUS
NUMBER OF SHARES
OWNERSHIP (%)
3,342,192,081
64.15
Individuals - Domestic
935,581,077
17.96
Institutions - Foreign
433,215,242
8.31
Mutual Funds
404,855,300
7.77
Employees
35,579,500
0.68
Pension Funds
30,575,100
0.59
Insurance
18,694,000
0.36
Limited Liabilities Companies (PT)
Individual - Foreign
5,094,200
0.10
Foundations
4,386,000
0.08
Cooperatives
19,500
0.00
5,210,192,000
100
Total
23
Annual Report 2016
2016
FINANCIAL
HIGHLIGHTS
INDIKA ENERGY
25
Indika Energy
Financial Highlights
Expressed in US$, unless otherwise stated
2016
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Revenues
Cost of Contracts and Goods Sold
Gross Profit
General and Administrative Expenses
Operating (Loss) Profit
Loss for The Year
Total Comprehensive Loss for The Year
Loss Attributable To :
Owners of The Company
Non-Controlling Interests
Total Comprehensive Loss Attributable To:
Owners of The Company
Non-Controlling Interests
Equity in net profit of Associates and Jointly-Controlled Entities
Outstanding Shares
Loss per share
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
Investment in associates
Investment in jointly-controlled entities
Investments in portofolio - Third party
Investments in bond
Total Current Assets
Total Non-Current Assets
Total Assets
Total Current Liabilities
Total Non-Current Liabilities
Total Liabilities
Total Equity
Total Liabilities & Equity
1,097,296,489
1,008,966,857
88,329,632
103,752,957
(15,423,325)
(76,847,028)
(74,016,652)
1,109,508,311
948,472,697
161,035,614
132,267,653
28,767,961
(30,616,975)
(29,412,415)
(67,594,082)
(36,636,644)
(44,587,878)
(32,259,150)
(27,635,381)
(2,981,594)
(65,929,700)
(36,636,644)
59,464,493
5,210,192,000
(0.0130)
(41,757,502)
(32,259,150)
72,629,159
5,210,192,000
(0.0086)
(26,430,821)
(2,981,594)
73,482,756
5,210,192,000
(0.0053)
260,422,206
10,832,519
25,532,293
667,436,233
1,154,896,836
1 ,822,333,069
312,981,711
768,241,790
1,081,223,501
741,109,568
1,822,333,069
277,545,435
13,026,000
59,241,118
827,311,691
1,323,133,520
2,150,445,211
505,612,838
813,287,965
1,318,900,803
831,544,408
2,150,445,211
271,766,662
14,487,529
54,780,796
831,419,308
1,458,891,053
2,290,310,361
396,736,289
979,632,294
1,376,368,583
913,941,778
2,290,310,361
in US$
-29.4%
PT Indika Energy Tbk.
2014
775,232,931
686,531,106
88,701,825
98,818,007
(10,116,182)
(104,230,726)
(102,566,344)
REVENUES
2016 | 775,232,931
2015| 1,097,296,489
2015
0.4%
34.4%
GROSS PROFIT
OPERATING PROFIT
in US$
in US$
2016 | 88,701,825
2015 | 88,329,632
2016 | (10,116,182)
2015 | (15,423,325)
26
Expressed in US$, unless otherwise stated
2016
GROWTH (%)
Revenues
Cost of Contracts and Goods Sold
Gross Profit
General and Administrative Expenses
Operating Profit (Loss)
Loss - Attributable to owners of the Company
Total Assets
Total Liabilities
Total Equity
-1.1%
6.4%
-45.1%
-21.6%
-153.6%
-61.3%
-6.1%
-4.2%
-9.0%
28.5%
41.6%
-16.7%
-13.2%
-29.7%
-55.8%
-1.1%
0.7%
-3.8%
-1.3
-8.72
-0.01
-0.09
-0.01
-0.04
-1.4
-4.06
-0.02
-0.05
-0.01
-0.02
2.6
-2.49
0.03
-0.03
0.01
-0.01
2.13
1.46
0.59
1.64
1.59
0.61
2.10
1.51
0.60
PROFIT FINANCIAL RATIO
Total Current Assets / Total Current Liabilities(x)
Total Liabilities / Total Equity (x)
Total Liabilities / Total Assets (x)
in US$
2016 | 59,464,493
2015 | 72,629,159
-18.1%
2014
-29.4%
-32.0%
0.4%
-4.8%
34.4%
51.6%
-15.3%
-18.0%
-10.9%
OPERATING RATIO
Operating Income (Loss) / Revenues (%)
Loss Attributable to the Owners of the Company / Revenues (%)
Operating Profit (Loss) / Total Equity (x)
Loss Attributable to the Owners of the Company / Total Equity (x)
Operating Profit (Loss) / Total Assets (x)
Loss Attributable to the Owners of the Company / Total Assets (x)
EQUITY IN NET PROFIT OF
ASSOCIATES AND JOINTLY
CONTROLLED ENTITIES
2015
51.6%
LOSS ATTRIBUTABLE TO
OWNERS OF THE
COMPANY
ADJUSTED EBITDA*
in US$
2016 | 155,714,099
2015 | 191,958,917
-18.9%
in US$
2016 | (67,594,082)
2015 | (44,587,878)
* Including dividends received from associates
and jointly controlled companies.
27
Annual Report 2016
Revenue
Breakdown
2016
2015
Petrosea
Petrosea
27.0%
18.8%
MBSS
MBSS
8.2%
8.4%
Tripatra
Tripatra
43.3%
28.0%
Others
Others
5.7%
8.6%
Coal Trading
Coal Trading
28.0%
24.0%
US$ 775.2 million
US$ 1,097.3 million
BOND INFORMATION
DESCRIPTION
VALUE
STOCK LISTING
INTEREST
RATE
EFFECTIVE
DATE
MATURITY
DATE
RATING
Notes 2018
US$ 171.4
Million
Singapore Stock
Exchange
7%
5 May 2011
7 May 2018
“Caa1” with negative outlook by Moody’s
and “CCC” with negative outlook by Fitch.
Notes 2023
US$ 500
Million
Singapore Stock
Exchange
6.375%
24 January
2013
24 January
2023
“Caa1” with negative outlook by Moody’s
and “CCC” with negative outlook by Fitch.
DIVIDEND POLICY
DIVIDEND AMOUNT
(IN BILLION RP)
DIVIDEND PER SHARE
(IN RP)
DIVIDEND PAYOUT RATIO
DIVIDEND PAYMENT DATE
2008
437.40
84.00
40.32% of 2008 Net Income
3 July 2009
2009
362.83
69.68
50.00% of 2009 Net Income
25 June 2010
2010
249.94
48.00 (INTERIM DIVIDEND)
–
30 November 2010
135.39
26.00 (FINAL DIVIDEND)
–
29 July 2011
Total
385.30
74.00
50.00% of 2010 Net Income
2011
312.61
60.00
25.79% of 2011 Net Income
26 July 2012
2012
US$19,000,000.00
US$0.003647
21.79% of 2012 Net Income
31 July 2013
PT Indika Energy Tbk.
28
Stock Highlights
Stock Price
Rp
Volume
(million)
1,000
400
2
900
350
800
300
1
700
250
600
200
500
150
400
100
300
50
200
100
0
Jan
Feb Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec Jan
Feb
Mar
Apr
May
2015
Jun
Jul
Aug
Sep
Oct
Nov
Dec
2016
SUSPENSION
In 2016, trading of INDY shares was suspended twice because of Unusual Market Activity (UMA).
8 MARCH
IDX has announced INDY UMA through letter Peng-UMA-0018/BEI.WAS/03-2016.
1
18 MARCH
IDX temporarily suspended trading of INDY shares through announcement Peng-SPT-0006/BEI.WAS/03-2016 dated 17 March 2016
(first suspension).
21 MARCH
IDX unsuspended trading of INDY shares through announcement Peng-SPT-0007/BEI.WAS/03-2016 dated 18 March 2016.
2
23 MARCH
IDX temporarily suspended trading of INDY shares through announcement Peng-SPT-0009/BEI.WAS/03-2016 dated 22 March 2016
(second suspension).
1 APRIL
IDX unsuspended trading of INDY shares through announcement Peng-SPT-0010/BEI.WAS/03-2016 dated 31 March 2016.
SHARE PRICE 2015-2016
SHARE PRICE
YEAR
HIGHEST
LOWEST
TRANSACTION IN REGULAR MARKET
CLOSING
TOTAL SHARES
TRANSACTION VOLUME
FREQUENCY
(X)
MARKET CAPITALIZATION
(Rp)
VALUE
(Rp billion)
2015
Q1
520
426
434
5,210,192,000
77,881,300,00
19,729
37,320,677,400,00
2,261,223,328,000
Q2
435
290
315
5,210,192,000
204,976,300,00
27,610
74,717,967,100,00
1,641,210,480,000
Q3
328
185
193
5,210,192,000
95,074,900,00
13,040
23,710,530,600,00
1,005,567,056,000
Q4
232
105
110
5,210,192,000
357,095,300,00
25,239
54,827,955,800,00
573,121,120,000
Q1
377
106
345
5,210,192,000
1,856,935,500,00
60,810
340,227,898,800,00
1,797,516,240,000
Q2
685
252
540
5,210,192,000
3,059,840,300,00
148,270
1,393,511,723,400,00
2,813,503,680,000
Q3
785
515
615
5,210,192,000
918,090,800,00
62,577
627,546,645,000,00
3,204,268,080,000
Q4
1005
625
705
5,210,192,000
1,565,121,800,00
109,260
1,292,200,530,000,00
3,673,185,360,000
2016
29
Annual Report 2016
KIDECO
FINANCIAL HIGHLIGHTS
Expressed in US$, unless otherwise stated
2016
2015
2014
1,247.8
1,067.8
180.0
24.7
155.4
88.6
1,658.2
1,376.9
281.3
27.8
253.6
138.1
2,059.4
1,731.1
328.3
32.7
295.6
154.4
273.9
171.4
445.3
146.0
53.7
199.7
245.6
445.3
400.5
182.2
582.8
211.5
48.0
259.6
323.2
582.8
396.0
206.4
602.4
224.3
51.6
275.8
326.6
602.4
-24.8
-22.5
-36.0
-11.1
-38.7
-35.8
-23.6
-23.1
-24.0
-19.5
-20.5
-14.3
-15.2
-14.2
-10.5
-3.3
-5.9
-1.0
-2.9
4.6
-29.5
3.6
-31.9
-27.3
-12.3
-14.7
-10.1
COMPREHENSIVE STATEMENTS OF INCOME
Sales
Cost of Sales
Gross Profit
Operating Expenses
Operating Income
Net Income
STATEMENT OF FINANCIAL POSITION
Total Current Assets
Total Non-Current Assets
Total Assets
Total Current Liabilities
Total Non-Current Liabilities
Total Liabilities
Total Equity
Total Liabilities & Equity
GROWTH (%)
Sales
Cost of Sales
Gross Profit
Operating Expenses
Operating Income
Net Income
Total Assets
Total Liabilities
Total Equity
REVENUES
GROSS PROFIT
EBIT
in million US$
in million US$
in million US$
2016 | 1,247.8
2015 | 1,658.2
2016 | 180.0
2015 | 281.3
2016 | 155.4
2015 | 253.6
-24.8%
-36.0%
PT Indika Energy Tbk.
30
-38.7%
Expressed in US$, unless otherwise stated
2016
2015
2014
12.45
7.10
0.63
0.36
0.35
0.20
15.29
8.33
0.78
0.43
0.44
0.24
14.35
7.50
0.90
0.47
0.49
0.26
1.88
1.89
1.77
Total Liabilities / Total Equity (x)
0.81
0.80
0.84
Total Liabilities / Total Assets (x)
0.45
0.45
0.46
OPERATING RATIO
Operating Income / Sales (%)
Net Income / Sales (%)
Operating Income / Total Equity (x)
Net Income / Total Equity (x)
Operating Income / Total Assets (x)
Net Income / Total Assets (x)
FINANCIAL RATIO
Total Current Assets / Total Current Liabilities (x)
NET PROFIT
EBITDA
SALES VOLUME
in million US$
in million US$
in million ton
2016 | 88.6
2015 | 138.1
2016 | 179.6
2015 | 281.8
2016 | 32.5
2015 | 38.6
-15.8%
-35.8%
-36.3%
31
Annual Report 2016
Kideco´s
Coal Production
50
40.3
40
39.0
37.3
34.2
32.1
31.5
29.1
30
24.7
22.0
20.6
20
18.2
18.9
16.0
14.0
11.5
10.3
(in million tonnes)
10
7.4
8.5
5.0
0
1998
1999
2004
2007 2010
2011
2000 2001
2005
2006 2012
2002
2003
2008
2009
COAL RESERVES BY PIT
AREA
2013
2014
2015
2016
in million tonnes
CALORIFIC VALUE (KCAL)
PROVED
PROBABLE
TOTAL
Roto North
5,615
-
9.0
9.0
Roto South
4,940
43.0
19.0
62.0
Roto South G (Biu)
4,855
-
8.0
8.0
Roto Middle
4,785
14.0
8.0
22.
Susubang
5,705
1.0
3.0
4.0
Samarangau
4,430
96.0
221.0
317.0
154.0
268.0
422.0
Total
Based on JORC Report dated June 2015
PT Indika Energy Tbk.
32
COAL RESOURCES BY PIT
in million tonnes
MEASURED
INDICATED
INFERRED
TOTAL
Roto North
-
23.0
17.0
40.0
Roto South
60.0
72.0
44.0
175.0
-
12.0
21.0
33.0
55.0
68.0
64.0
187.0
AREA
Roto South G (Biu)
Roto Middle
Susubang
Samarangau
Total
1.0
5.0
3.0
9.0
142.0
585.0
208.0
935.0
250.0
775.0
350.0
1.375.0
Based on JORC Report dated June 2015
SALES BY DESTINATION 2016
DESCRIPTION
VOLUME
%
(thousand tonnes)
China
8.667
26,7%
Indonesia
8.565
26,4%
India
3.231
10,0%
Korea
2.650
8,2%
Philipines
2.350
7,2%
Malaysia
1.835
5,7%
Japan
1.460
4,5%
Taiwan
1.275
3,9%
970
3,0%
1.458
4,5%
Thailand
Others
OPERATION BY PIT 2016
DESCRIPTION
ROTO NORTH
ROTO SOUTH
ROTO MIDDLE
SAMARANGAU
SUSUBANG
TOTAL
Overburden (million bcm)
8.6
89.5
19.7
71.2
4.8
193.9
Production (million tonnes)
2.3
10.2
2.3
16.7
0.6
32.1
Stripping Ratio (x)
3.8
8.8
8.3
4.3
8.0
6.0
33
Annual Report 2016
34
INDIKA ENERGY
PRESIDENT
COMMISSIONER´S
AND PRESIDENT
DIRECTOR´S
MESSAGES
President
Commissioner’s
Message
PT Indika Energy Tbk.
36
“THE COMPANY HAS SUCCESSFULLY
LAID THE FOUNDATIONS OF A
TURNAROUND THAT WILL DELIVER
BENEFITS TO SHAREHOLDERS IN 2017
AND BEYOND, DEMONSTRATING OUR
ABILITY TO FORGE AHEAD.”
AGUS LASMONO | President Commissioner
37
Annual Report 2016
Distinguished Shareholders,
against impairment of assets in 2015), Loss Attributable to the
Owners of the Company would have been US$ 29.0 million
compared with US$ 55.8 million in 2015.
2016 was an extremely volatile year for the coal sector and related
businesses. The main variable was the Chinese moratorium on
imported coal, which was suddenly and unexpectedly relaxed at
the end of the third quarter in order to meet domestic demand
for coal with winter coming on. While Chinese demand has
historically risen at this time due to the weather, the extent was
unprecedented, and given tightened global supply after several
years of declining prices, the resulting supply-demand imbalance
drove prices up.
These numbers suggest that the Board of Director’s turnaround
strategy, which was implemented since 2015, is beginning to see
traction. Over the past two years, the management has reduced
cost, stabilized operations and increased efficiency, preserved
cash and deferred capex in response to the adverse business
climate. In 2016 alone, total debt was reduced by about
US$ 164.9 million to US$ 805.3 million, and costs were reduced
by US$ 4.9 million, with the full impact of the cost reduction
initiatives to be felt in the coming year. In parallel, various new
contracts have been secured, increasing the value of the total
backlog for MBSS, Petrosea and Tripatra at the end of 2016 to
US$ 1,706.5 million. The Company moreover has room and
resources to invest thanks to its solid cash and other financial
assets balance recorded at US$ 308.1 million at year end.
The oil and gas sector also saw enormous fluctuation, continuing
its downward trajectory which began in 2014 due to shale oil
production in the United States, and OPEC and Russian output.
However, similar to coal, oil prices rose sharply to record levels
at year-end as production from the United States and Nigeria
decreased.
EVALUATION OF THE COMPANY’S
MANAGEMENT AND STRATEGY
EXECUTION
In summary, these initiatives have not only improved
the Company’s fundamentals but have also substantially
strengthened the Group’s competitiveness. In light of these
indicators, it is our opinion that the Board of Directors has
successfully laid the foundations of a turnaround that will deliver
benefits to shareholders in 2017 and beyond, demonstrating our
resiliency and ability to bounce back.
In the first half of 2016, our businesses were affected by the
continued in decline in coal and oil and gas prices. The significant
improvement that took place towards the end of the year came
too late to have much impact on our 2016 business results.
Under these circumstances, revenue declined by 29.4%
to US$ 775.2 million. Due to various one offs, the Company
recorded Loss Attributable to the Owners of the Company of
US$ 67.6 million compared with a loss of US$ 44.6 million in
2015.
IMPLEMENTATION OF CORPORATE
GOVERNANCE
Notwithstanding the adverse business climate, corporate
governance continued to be a priority. Indika Energy remains
committed to the highest standards of corporate governance,
along with all its subsidiaries. In doing so, the Board of
Commissioners regularly supervised and advised the Board
of Directors through scheduled meetings as well as interim
discussions and reports. Overall, the Board of Commissioners is
Viewed at a fundamental level, however, the Company in
fact showed improvement. Gross profit remained stable at
approximately US$ 88 million and gross margins improved by
0.4%. On a normalized basis (taking out non recoverable tax,
impairment of assets and certain employee benefits in 2016
as well as gain on partial repurchase of 2018 Notes netted off
PT Indika Energy Tbk.
38
satisfied that the implementation of corporate governance under
the Board of Directors has met relevant standards. In particular,
the Code of Business Conduct has been uniformly implemented
across the Group regardless of rank.
Basuki, Pandri Prabono-Moelyo and Dedi Aditya Sumanagara
resigned as members of the Board of Commissioners, and the
AGMS appointed as their replacements Wishnu Wardhana,
previously President Director of Indika Energy, Richard Bruce
Ness, previously a Director of Indika Energy, as a Commissioner,
and Boyke Wibowo Mukiyat as an Independent Commissioner.
OPINION ON BUSINESS PROSPECTS
In early December 2016, Wishnu Wardhana resigned from
his position as President Commissioner to focus on other
endeavours. Subsequently, at the Extraordinary General Meeting
of Shareholders (EGMS) on 30 January 2017, I was appointed
President Commissioner.
The improvements forecast by the Board of Directors for 2017
are based on sound reasoning. The improved backlog at
subsidiaries will contribute to certain revenue growth, while
the cost cutting measures taken in 2016 have already reduced
expenses somewhat, with the full benefit still to be felt in 2017.
In addition, the write downs taken in 2016 have effectively
streamlined the balance sheet.
On behalf of the Board of Commissioners, I would like
to welcome Boyke Wibowo Mukiyat to the Board of
Commissioners and look forward to his active and valuable
contributions. I would also like to express our gratitude to
Wiwoho Basuki Tjokronegoro, Indracahya Basuki, Pandri
Prabono-Moelyo, Dedi Aditya Sumanagara and Wishnu
Wardhana for their numerous contributions to the Company.
We wish them all success.
Externally, while the potential for volatility remains high, indicators
suggest that the global pricing environment has stabilized
somewhat for coal as well as for oil, which has an indirect effect
on coal pricing. The production cuts of previous years have also
brought supply and demand into better equilibrium, which should
contribute to market stability. Meanwhile, the actions taken by
the management have effectively positioned the Company to
be more productive and competitive regardless of the business
climate.
SUMMARY
The last few years have not been easy, as we have struggled to
perform in the midst of adversity. The Board of Commissioners
wishes to commend the management and all employees for their
efforts, which are finally beginning to pay off. We also thank
our valuable customers for their business. We look forward
to a better year in 2017 for all of us, including our partners,
shareholders and stakeholders at large.
Based on these factors, we are therefore confident in the
management’s reasoning that 2017 will be a better year for
Indika Energy and its shareholders.
CHANGES TO THE BOARD OF
COMMISSIONERS
The number of Commissioners was reduced from seven to five
during the year, and was further reduced to four in January
2017. At the Annual General Meeting of Shareholders (AGMS)
dated 28 April 2016, Wiwoho Basuki Tjokronegoro, Indracahya
AGUS LASMONO
President Commissioner
39
Annual Report 2016
President
Director’s
Message
PT Indika Energy Tbk.
40
“OPERATIONS HAVE BEEN STABILIZED
AND GROUP’S PERFORMANCE
IMPROVED AS APPARENT IN THE
INCREASE OF GROSS PROFIT.”
M. ARSJAD RASJID P.M.
| President Director & Group CEO
41
Annual Report 2016
Valued Shareholders,
Group’s performance improved as apparent in the increase of
gross profit from 8.0% in 2015 to 11.4% in 2016.
Conditions in 2016 continued to be highly challenging for the
majority of the Indonesian energy industry. In the early part of
the year, conditions worsened yet further in the coal and oil
and gas sector. The Indonesian HBA (Harga Batubara Acuan)
thermal coal reference price reached its lowest point in more
than five years at US$ 50.92 per tonne in February, while crude
oil prices plunged to a thirteen-year-low of US$ 26.55 per
barrel in January.
That said, the full impact of the turnaround will not be seen until
next year. Revenue was still down for 2016, with the main factors
being a decline in revenue from Tripatra, where major projects
completed as anticipated; from MBSS, due to lower volumes
transported and continued pricing pressure; and from coal sales
and trading, which saw lower volumes and prices. Consequently,
Indika Energy recorded a 29.4% decrease in revenue to US$
775.2 million, although gross profit remained stable at around
US$ 88 million in 2016 and 2015.
In the third quarter however, coal prices spiked, driven primarily
by increasing Chinese demand and limited supply. By December,
the HBA had skyrocketed to US$ 101.69 per tonne, its highest
point since early 2012, although the HBA has since moderated
to hover around US$ 85 per tonne. Meanwhile crude oil prices
rose in the second half of the year, nearly doubling to peak at
US$ 54 per barrel at the end of the year. Such volatility posed
a major challenge to all businesses in the sector.
At the businesses, the biggest losses came from IIR, MBSS and
Petrosea. Whereas equity in net profit of associates and jointly
controlled entities declined by US$ 13.2 million to US$ 59.5
million in 2016, with the main factor being lower income from
Kideco due to lower production and coal prices. In addition,
at the consolidated level, Company took a number of write
downs mainly related to non-recoverable tax, and impairment
of intangible assets and property plant and equipment as the
estimated future value of assets were marked down in the
adverse business climate.
STRATEGY AND PERFORMANCE IN 2016
In this uncertain climate, the ongoing strategy that we began in
2015 produced early signs of turnaround, showing our resilience
as we forged ahead. This strategy comprised four initiatives: cost
savings and operational improvement, stabilization of operations
including business consolidation and divestment of non-core
assets, cash preservation in conjunction with lower debt, and
improved business development. Under this strategy, the
Company has substantially streamlined its costs, saving 4.8% or
US$ 4.9 million in 2016 with the full impact of the cost savings
yet to be felt in 2017.
As a result, the Loss Attributable to the Owners of the Company
increased by 51.6% to US$ 67.6 million in 2016. On a normalized
basis however, Loss Attributable to the Owners of the Company
would have been US$ 29.0 million compared with US$ 55.8
million in 2015.
BUSINESS PROSPECTS
Overall, operations have been stabilized with divestment of
various non-core assets in process, and debt has been reduced by
US$ 267.7 million over the last four years, thus lowering financing
costs. Finally, and very importantly, business development
efforts improved our backlog value by more than 60% to
US$ 1,706.5 million at the end of 2016. Thanks to these efforts,
PT Indika Energy Tbk.
Based on the above and the improving business climate, we
are confident that the Company will significantly improve its
performance in 2017. Apart from indications of accelerating
national economic growth and generally higher coal and oil and
gas prices, we expect that the higher backlog and improved
42
cost structure will deliver top as well as bottom line growth. In
particular, the full impact of the organizational rationalization
will be felt in 2017, and is expected to have significant impact. It
should also be noted that the Company had substantial cash and
other financial assets amounting to US$ 308.1 million at the end
of 2016, giving it flexibility to manoeuvre.
were merged, generating time and coordination savings without
any loss of functionality. These changes did not in any way impair
our ability to uphold all principles of good corporate governance,
and we continued to ensure that Indika Energy was properly run
in compliance with all applicable rules and regulations.
Going forward, the Company will continue to explore business
opportunities, control costs and pay down debt. The actions
taken over the past two years have advantageously positioned
its business to compete going forward, with a number of its
businesses having increased their market share or begun new
lines of business, which bodes well for the sustainability of the
business.
CHANGES TO THE BOARD OF
DIRECTORS
At the 28 April 2016 AGMS, Wishnu Wardhana, Richard Bruce
Ness, Rico Rustombi and Joseph Pangalila resigned from the
Board of Directors, and Wishnu Wardhana and Richard Bruce Ness
were subsequently appointed to the Board of Commissioners. At
the AGMS, I also resigned as Vice President Director and was
reappointed at President Director, joining my colleagues Azis
Armand and Eddy Junaedy Danu as Board of Directors.
IMPLEMENTATION OF CORPORATE
GOVERNANCE
We thank Wishnu Wardhana, Richard Bruce Ness, Rico Rustombi
and Joseph Pangalila for their service as Directors.
At Indika Energy, we regard good corporate governance as the
cornerstone of our business. In keeping with our vision and
mission of being a world-class company, we moreover ensure that
we stay informed of new corporate governance developments in
the United States and OECD, and strive to adopt them.
SUMMARY
The past few years have been an extremely challenging period
for the energy sector, especially for businesses related to coal
and to a lesser extent, oil and gas. On behalf of the Board of
Directors, I would like to thank all of our dedicated employees,
the Board of Commissioners, our customers and partners, and
especially our loyal shareholders for your support and patience.
We believe that in 2017 your trust in us will be rewarded.
Among others, Indika Energy Group upholds diversity and rejects
discrimination based on religion, gender or ethnicity; safeguards
its political neutrality; and has implemented anti
bribery and anti-fraud practices. These principles apply to all
employees and management of Indika Energy regardless of
position.
In the interests of streamlining, after due consideration it was
decided the functions of the Audit Committee and the Good
Governance Committee could be more efficiently performed by
the same set of people. Therefore, in 2016, the Audit Committee
and Good Governance Committee
M. ARSJAD RASJID P.M.
President Director & Group CEO
43
Annual Report 2016
BOARD
PROFILES
Board of
Commissioners
AGUS
LASMONO
MUHAMAD
CHATIB BASRI
President Commissioner
Independent Commissioner
PT Indika Energy Tbk.
46
BOYKE WIBOWO
MUKIYAT
RICHARD
BRUCE NESS
Independent Commissioner
Commissioner
47
Annual Report 2016
Board of
Commissioners Profile
AGUS LASMONO
President Commissioner
Age 45, appointed as President Commissioner of Indika Energy
since 2017 as referred to Deed Number 24 dated 30 January
2017. Bapak Agus Lasmono is the founder and owner of Indika
Energy, he was Vice President Commisioner of Indika Energy
from 2007 to 2017.
He also member of Human Capital Committee of Indika Energy
as referred to Board of Commissioners Decree No. 076/IE/BOC/
DEC/VII/2016.
Bapak Agus Lasmono also holds positions as President
Commissioner of PT Net Mediatama Televisi (since 2012), PT
Indika Inti Corpindo (since 2004) and PT Indika Inti Holdiko
(since 2004) and Commissioner of Kideco (since 2004), and as
President Director of PT Indika Mitra Energi (since 2010), and PT
Indika Multi Media (since 2002).
Previously he also held positions such as Independent
Commissioner of PT Surya Citra Media Tbk. and PT Surya Citra
Televisi (2005-2013).
He earned his Bachelor of Arts in Economics from Pepperdine
University, Malibu, California, United States in 1993 and Master
degree in International Business from West Coast University, Los
Angeles, California, United States in 1995.
PT Indika Energy Tbk.
48
MUHAMAD CHATIB BASRI
Independent Commissioner
Age 52, appointed as Independent Commissioner of Indika
Energy in 2015 as referred to Deed Number 95 dated 29 April
2015, after previously serving as Independent Commissioner
from March 2008 to June 2012. He also Chairman of Human
Capital Committee of Indika Energy as referred to Board of
Commissioners Decree No. 076/IE/BOC/ DEC/VII/2016 and
member of Risk & Investment Committee of Indika Energy as
referred to Board of Commissioners Decree No.077/IE/BOC/DEC/
VII/2016.
He is also President Commissioner of PT XL Axiata Tbk. (since
29 September 2017), President Commissioner of Indonesia
Infrastructure Finance (since 2015), Independent Non-Executive
Director of Axiata Group Berhad, Malaysia (since 2015) and
Independent Commissioner of PT Astra International Tbk.
Bapak M. Chatib Basri was Minister of Finance of the Republic
of Indonesia (2013-2014), Chairman of Investment Coordinating
Board of the Republic of Indonesia (2012-2013), Vice Chairman
of the National Economic Committee of the Republic of Indonesia
(2010-2012), Special Advisor to the Minister of Finance of the
Republic of Indonesia (2006-2010), Deputy Minister of Finance
of the Republic of Indonesia for G-20 (2006-2010), Advisor to
the Coordinating Minister for Economic Affairs of the Republic
Indonesia (2004-2005).
Bapak M. Chatib Basri is a member of the World Bank Advisory
Council on Gender and Development, and Chairman of the
Advisory Board at Mandiri Institute. He is the Thee Kian Wie
visiting Professor at Australian National University, and is also
a Senior Lecturer at the Department of Economics, University of
Indonesia. He was a Senior Fellow of Harvard Kennedy School,
United States (2015-2016) and a member of the Asia Pacific
Regional Advisory Group of the International Monetary Fund
(IMF) (2010-2012).
He earned his Bachelor degree Economics from University
of Indonesia in 1992, then awarded a Master of Economic
Development and Ph.D in Economics from Australian National
University in 1996 and 2001 respectively.
49
Annual Report 2016
BOYKE WIBOWO MUKIYAT
Independent Commissioner
Aged 58, was appointed as Independent Commissioner of
Indika Energy in 2016 as referred to Deed Number 58 dated 28
April 2016. Bapak Boyke also holds the positions of President
Commissioner of PT Rukun Raharja Tbk. and President Director
of PT Truba Jaya Engineering.
He is the Chairman of Audit & Corporate Governance Committee
of Indika Energy as referred to Board of Commissioners
Decree No.075/IE/BOC/DEC/VII/2016 and member of Risk &
Investment Committee of Indika Energy as referred to Board of
Commissioners Decree No.077/IE/BOC/DEC/VII/2016.
Previously, Bapak Boyke also served as President Commissioner
of PT Jakarta Propertindo (2015-2016), as Commissioner of
PT Pertamina EP Cepu (2014-2015), President Director of PT
Perusahaan Pengelola Aset (2008-2013), President Director of
PT Bahana Pembinaan Usaha Indonesia (2006-2008), Director of
PT Bahana Pembinaan Usaha Indonesia (2001-2006), President
Director of PT Niaga Asset Management (1999-2001) and
Director of PT Niaga Asset Management (1997-1999).
He earned a Diploma degree in Marketing & Business
Administration from London Business School United Kingdom in
1980, a Bachelor degree in Accounting from Jayabaya Academy,
Jakarta in 1984, and Bachelor degree in Economics from
University of Indonesia in 1990. Bapak Boyke is also an alumni
of London Business School in 2004 and John F. Kennedy Harvard
Government School, United States, in 2006.
PT Indika Energy Tbk.
50
RICHARD BRUCE NESS
Commissioner
Age 67, appointed as Commissioner of Indika Energy in 2016
as referred to Deed Number 58 dated 28 April 2016, previously
serving as Director of Indika Energy from May 2009 to April
2016, whilst held position as Independent Director in 2013 to
2014. Bapak Rick initially joined Indika Energy as Director in
2009 with reference to Deed Number 123 dated 28 May 2009.
He also member of Risk & Investment Committee of Indika
Energy as referred to Board of Commissioners Decree No.077/
IE/BOC/DEC/VII/2016.
He also serves as President Commissioner of Petrosea (since
2010). He has been actively involved in the energy, resources
and mining sectors for more than 30 years. Previously, he also
served as Commissioner of MBSS (2010-2011), as President
Director of various affiliates and subsidiaries of Newmont, as
mining consultant at PT Clinton Indonesia and as Vice President
of Freeport. He also holds the position of Chairman of Mining for
the American Chamber of Commerce, Indonesia.
Bapak Rick earned a Bachelor degree in Mechanics from
Moorhead Technical Institute, Minnesota, USA, in 1969 and
attended Moorhead State University, Minnesota, USA, for
additional studies in post-secondary education until 1979. He
also completed a Professional Management program at Harvard
Business School, USA, in 1992.
51
Annual Report 2016
Board of
Directors
M. ARSJAD
RASJID P.M.
President Director
PT Indika Energy Tbk.
52
AZIS
ARMAND
EDDY JUNAEDY
DANU
Director
Independent Director
53
Annual
Ahead
The global energy sector recorded extreme volatility during 2016
in the coal as well as oil and gas sector, with prices dropping to
record lows before spiking towards the end of the year.
Indika Energy forged ahead amidst these challenging
circumstances, successfully reducing costs further and stabilizing
operations during the year. Although bottom line results were
impacted by the unconducive climate, overall the business
showed fundamental improvements, on track for positive growth.
Going forward, Indika Energy remains committed to its vision
to be a world-class Indonesian energy company, one committed
to help meet Indonesia’s need for energy through a strategy of
integrated competencies in energy resources, energy services
and energy infrastructure.
1
25
THEME
FINANCIAL
HIGHLIGHTS
5
CORPORATE
OVERVIEW
6
Indika Energy at a Glance
8
Capabilities Across the Entire
Coal Value Chain
10
Operations Map
12
Milestones
14
Corporate Structure
16
Organisation Structure
18
Vision, Mission and Values
20
Business Strategy
22
Composition of Shareholders
26
Indika Energy Financial
Highlights
29
Stock Highlights
30
Financial Highlights Associate Company - Kideco
35
PRESIDENT
COMMISSIONER’S
AND PRESIDENT
DIRECTOR’S
MESSAGES
36
President Commissioner’s
Message
40
President Director’s Message
45
125
BOARD
PROFILES
FINANCIAL
STATEMENTS
59
299
MANAGEMENT
REPORT
COMPANY
ADDRESSES
60
Economy and Industry
Overview
62
Operational Review
76
Financial Review
80
Business Prospects
& Key Risk Factors
86
Information and
Communications Technology
88
Corporate Governance
112
Implementation of Corporate
Governance Guidelines
116
Human Capital
118
Corporate Social
Responsibility
120
Subsequent Events
CORPORATE
OVERVIEW
Indika Energy at
a Glance
PT Indika Energy Tbk. (“Indika Energy” or “the Company”) was listed in Indonesian Stock Exchange (IDX) in 2008.
Established in 2000, Indika Energy has grown to be one of Indonesia’s leading integrated energy companies with a portfolio of
businesses spanning the energy resources, energy services and energy infrastructure sectors.
Over the years, the Company has grown from strength to strength both organically and through acquisition of synergistic businesses.
With its portfolio of businesses, the Company is able to provide complementary products and services to domestic and international
customers, thereby positioning the Company to capture growth opportunities across the Indonesian energy sector.
Today, Indika Energy has developed to have operational activities in various areas of the Indonesia archipelago.
The three business pillars of Indika Energy’s key operations are:
ENERGY
RESOURCES
46.0%
85.0%
PT Kideco Jaya Agung
PT Multi Tambangjaya Utama
PT Multi Tambangjaya Utama,a thermal
bituminous and coking coal asset in
Central Kalimantan
Indonesia’s third largest coal mining
company, located in East Kalimantan
100%
100%
PT Indika Inti Corporindo
Indika Capital Investment Pte.Ltd.
a coal trader
a coal trader
34.9%
60.0%
PT Santan Batubara
PT Mitra Energi Agung
PT Santan Batubara, a coal mining
company in East Kalimantan
Mitra Energi Agung, a greenfield coal
mining project in East Kalimantan
PT Indika Energy Tbk.
6
ENERGY
SERVICES
PT Petrosea Tbk.
an engineering & construction (E&C) and coal
contract mining company
PT Tripatra Engineering &
PT Tripatra Engineers & Constructors
, engineering, procurement and construction (EPC) oil
& gas services companies
69.8%
100%
ENERGY
INFRASTRUCTURE
51.0% 100% 46.0%
PT Mitrabahtera Segara Sejati Tbk.
an integrated transport & logistics services
company for the mining industry
PT Kuala Pelabuhan Indonesia
an integrated port management services
in Papua
PT Sea Bridge Shipping
domestic goods shipment
20.0% 99.8% 6.3%
PT Cirebon Electric Power
a 660 MW coal-fired steam power
generation plant in Cirebon, West Java
Petrosea Ofshore Supply Base
(POSB)
an integrated offshore supply base in East
Kalimantan
PT Cirebon Energi Prasarana
a 1000 MW coal-fired power generation
plant in Cirebon, West Java
45.0%
PT Cotrans Asia
a coal transportation company
7
Annual Report 2016
Capabilities
Across the Entire
Coal Value Chain
PT Indika Energy Tbk.
8
9
Annual Report 2016
Operations
Map
2
5
4
3
3
1
1
PT Indika Energy Tbk.
10
10
4
2
5
4
10
3
3
2
2
7
9
1
2
6
6
8
1
ENERGY RESOURCES ▲
ENERGY SERVICES n
ENERGY INFRASTRUCTURE ●
1
Multi Tambangjaya Utama
1
Exxon Mobil Cepu Project
1
Cirebon Electric Power
2
Kideco Jaya Agung
2
JOB Pertamina Medco - Senoro
2
Petrosea Offshore Supply Base
3
Santan Batubara
3
Pertamina HE ONWJ
3
Kuala Pelabuhan Indonesia
4
Mitra Energi Agung
4
Conoco Phillips - ESC
5
BP Tangguh
6
ENI Muara Bakau
1
FC Nicholas
7
Binuang Mitra Bersama
2
FC Ben Glory
8
Anzawara Satria
3
FC Abby
9
Indonesia Cemerlang
4
FC Chloe
10 Indonesia Pratama
5
FC Blitz
11
Kideco Jaya Agung
6
FC Vittoria
12
Santan Batubara*
FLOATING CRANE Â
* under suspension
11
Annual Report 2016
Milestones
2000
The establishment of Indika Energy
Indika Energy acquired a 41% stake in Kideco.
2004
2006
Kideco was established in 1982, engages in open-cut coal mining in East Kalimantan.
Kideco holds CCoW first generation Mining Rights until 2023.
Indika Energy increased its stake in Kideco by 5% to 46%.
• Indika Energy completed mergers with Tripatra Company and Ganesha Intra
Development Company.
• Tripatra Company was established in 1973, engages in engineering, procurement
and construction (EPC), operation & maintenance (O&M) in the energy sector.
• The establishment of Cirebon Electric Power, a 660MW coal-fired steam power
generation plant. Indika Energy owns 20% stake in CEP.
2007
• Tripatra acquired a 45% stake in Cotrans Asia, a coal logistics company established
in 2004.
• Indika Energy held its Initial Public Offering (IPO) on the Indonesia Stock Exchange,
offering 937,284,000 shares or 20% ownership.
• The establishment of Sea Bridge Shipping, a transhipment service company, in
which Tripatra owns a 46% stake.
2008
• Kuala Pelabuhan Indonesia (KPI), became a wholly owned subsidiary of Tripatra
through the acquisition of an additional 50.1% stake.
Indika Energy acquired a 98.55% stake in Petrosea.
2009
PT Indika Energy Tbk.
Petrosea was established in 1972, and engages in engineering & construction (E&C)
and coal mining contractor.
12
• The establishment of Indika Logistic & Support Services (ILSS).
2010
• Indika Energy entered into an Option Agreement to acquire 51% stake in MBSS.
MBSS was established in 1994, engages in sea transportation and logistics services.
2011
Indika Energy acquired a 51% stake in MBSS.
• Indika Energy divested 28.75% of its shares in Petrosea.
• Indika Energy acquired a 60% stake in Mitra Energi Agung (MEA).
MEA was established in 2008 as a greenfield coal asset which owns an IUP
concession area of 5,000 Ha in East Kalimantan.
• Indika Energy acquired a 85% stake in Multi Tambangjaya Utama.
MUTU was established in 1989 as a bituminous thermal and coking coal mine
holding a third generation CCoW in Central Kalimantan, with a concession area of
24,970 Ha.
2012
• Cirebon Electric Power, a 660MW coal-fired steam power generation plant, reached
its Commercial Operation Date (COD) and was fully operational.
2013
Indika Logistic & Support Services acquired a 95% of Tripatra’s shares in KPI.
• Initial operation of Indy Bintaro Office complex with the moving in Petrosea office.
2015
• Establishment of Indika Multi Niaga.
• September
Tripatra awarded Tangguh LNG Expansion Project – Train 3.
2016
• October
MUTU started initial production.
13
Annual Report 2016
Corporate Structure
ENERGY RESOURCES
100%
PT Indika Multi Energi
(Indonesia)
General trading
ENERGY SERVICES
90%
100%
PT Indika Indonesia
Resources (Indonesia)
PT Indika Inti Corpindo
(Indonesia)
Mining and trading
Investment and general trading
100%
10%
Indika Capital
Resources
Limited (B.V.I)
Financing
PT Kideco Jaya
Agung (Indonesia)
Exploration,
development, mining
and marketing of coal
Coal transportation
and transhipment
service
PT Sea Bridge
Shipping
(Indonesia)
Domestic goods
shipment
Tripatra (Singapore)
Pte. Ltd. (Singapore)
Investment
Investment
Tripatra Investments
Limited (B.V.I)
Investment
100%
60%
PT Citra Indah Prima
(Indonesia)
46%
Coal and mineral
trading and general
trading activities
PT Cotrans Asia
(Indonesia)
100%
100%
Indika Capital
Investments Pte.
Ltd. (Singapore)
Consultation services for
construction, industry and
infrastructure
100%
Trading
60%
Indika Energy
Trading Pte.Ltd.
(Singapore)
Coal trading and mining
consultancy
43,30%
PT Intan Resource
Indonesia (Indonesia)
Provision of consultancy
services, construction business
and trading
46%
Coal mining
100%
85%
PT Multi
Tambangjaya
Utama (Indonesia)
100%
PT Tripatra Engineering
(Indonesia)
45%
Coal mining
Marketing and
investment
60%
PT Mitra Energi
Agung (Indonesia)
Indika Capital
Pte. Ltd. (Singapore)
100%
PT Indika Multi Daya
Energi (Indonesia)
General trading
100%
PT Tripatra Engineers
and Constructors
(Indonesia)
PT Indika Energy
Trading (Indonesia)
Trading
90%
90%
PT Sindo Resources
(Indonesia)
PT Melawi Rimba
Minerals
(Indonesia)
Mining
Mining
Note :
100% share ownership of Indonesian limited liability company (PT) held by 2 shareholders both of which are PT Indika Energy Tbk.
and or its subsidiaries.
PT Indika Energy Tbk.
14
ENERGY INFRASTRUCTURE
100%
69,80%
PT Petrosea Tbk.
(Indonesia)
Engineering, construction,
mining and other services
90%
Indika Power
Investments Pte. Ltd
(Singapore)
PT Indika Infrastruktur
Investindo (Indonesia)
Investment
Trading, development and
services
Indo Integrated
Energy II B.V.
(The Netherlands)
15%
PT Cirebon Power
Services (Indonesia)
Financing
Operations and maintenance
of electrical equipment and
facilities
Indo Energy Finance
B.V.
(The Netherlands)
Financing
100%
Indo Energy Capital
B.V. (The Netherlands)
Financing
51,25%
Port operation
100%
PT Indika Logistic &
Support Services
(Indonesia)
Trading, industry,
mining and services
PT Mitrabahtera
Segara Sejati Tbk.
(Indonesia)
Sea logistics and
transhipment
Financing
51%
General trading
100%
Trading, mining and other
industries
PT LPG Distribusi
Indonesia
(Indonesia)
100%
PT Indika Multi
Energi
Internasional
(Indonesia)
Indo Energy Finance
II B.V.
(The Netherlands)
100%
25%
60%
PT Prasarana Energi
Indonesia (Indonesia)
PT Mitra Alam Segara
Sejati (Indonesia)
General trading
Shipping
Indo Energy Capital
II B.V.
(The Netherlands)
Financing
100%
PT Indika Multi Niaga
(Indonesia)
100%
69,97%
Transportation
management services,
trading and other services
PT Prasarana Energi
Cirebon (Indonesia)
PT Mitra Swire CTM
(Indonesia)
General trading
Shipping
95%
25%
PT Kuala Pelabuhan
Indonesia (Indonesia)
Port operation
PT Cirebon
Prasarana Energi
(Indonesia)
Coal-fired power plant
15
100%
Mahaka Industri
Perdana (Indonesia)
5%
100%
Specific port
management
Financing
99,80%
PT POSB
Infrastructure
Kalimantan
(Indonesia)
Coal-fired power plant
100%
Hazardous waste
management
Indo Integrated
Energy B.V.
(The Netherlands)
99,90%
PT POSB
Reksabumi
Indonesia
(Indonesia)
PT Cirebon Electric
Power (Indonesia)
100%
Trading and
contracting services
Development, services
and trading
15%
5%
99,80%
PT Petrosea
Kalimantan
(Indonesia)
50%
Coal mining
PT Indy Properti
Indonesia (Indonesia)
Investment
5%
PT Santan Batubara
(Indonesia)
100%
99,90%
PT Indika Energy
Infrastructure
(Indonesia)
50%
51%
100%
PT Mitra Hartono
Sejati
(Indonesia)
PT Mitra Jaya
Offshore
(Indonesia)
Mitrabahtera Segara
Sejati Pte.Ltd.
(Singapore)
Shipping
Shipping
Shipping
Annual Report 2016
Organization
Structure
COMMITTEE
AUDIT & CORPORATE
GOVERNANCE
COMMITTEE
RISK & INVESTMENT
BOARD OF
DIRECTORS
HEAD OF CORPORATE
SECRETARY
HEAD OF INTERNAL AUDIT
HEAD OF FINANCE,
ACCOUNTING, AND
BUSINESS SUPPORTS
PT Indika Energy Tbk.
DIRECTOR
Azis Armand
HEAD OF STRATEGY
AND BUSINESS
DEVELOPMENT
16
HEAD OF CORPORATE
FINANCE AND INVESTOR
RELATIONS
BOARD OF
COMMISSIONERS
COMMITTEE
HUMAN CAPITAL
PRESIDENT DIRECTOR
Group Chief Executive Officer
M. Arsjad Rasjid P.M.
HEAD OF CEO OFFICE &
HEAD OF CORPORATE
COMMUNICATIIONS &
SUSTAINABILITY
INDEPENDENT DIRECTOR
Eddy Junaedy Danu
HEAD OF CORPORATE
RISK MANAGEMENT
HEAD OF LEGAL
17
Annual Report 2016
PT Indika Energy Tbk.
18
Vision,
Mission and
Values
VISION
VALUES
To be a world-class Indonesian energy company recognized for
its integrated competencies in energy resources, services and
infrastructure.
Integrity: Honest with oneself, others and one’s work at every
moment by upholding prevailing ethical standards and legal
norms.
Unity in diversity: Viewing diversity as an asset to the
company and accepting, valuing, completing and strengthening
one another as a solidly unified entity.
MISSION
1. To capitalise on the abundant energy resources in support of
the global economic growth.
Teamwork: Actively contributing and collaborating based on
trust and shared interests rather than personal interests.
2. To create integration and synergies across businesses.
Achievement: Achievement as the measure of success and
the motivation to do what is best for the company.
3. To create optimum shareholders value.
Social Responsibility: Highly concerned for the environment
and community, and contributing added value as well as
contributing to the prosperity of the society.
4. To continuously develop its human capital.
5. To become a good corporate citizen.
19
Annual Report 2016
Business
Strategy
Indika Energy’s five long term business
strategies are reflected in its focus on
creating synergies within the Company’s
three business pillars, boosting organic
growth and expanding through
acquisitions, to generate value to
stakeholders.
Related to the prolonged decline in coal
prices, the Company continued to focus
on, and consistently implement, a strategy
of improved operational efficiency, cash
preservation and cost optimisation.
The management conducted ongoing
efforts to optimise asset utilisation,
reduce cost across the entire organisation,
rasionalise human capital and allocate
capital expenditure prudently.
PT Indika Energy Tbk.
20
1
TO CAPITALISE ON INDONESIA’S ABUNDANT NATURAL
RESOURCES AND GROWTH IN ENERGY DEMAND, INCLUDING
IDENTIFYING AND ACQUIRING ATTRACTIVE ENERGY INVESTMENTS.
2
TO INTEGRATE DIVERSE ENERGY PLATFORMS AND EXTRACT
OPERATIONAL EFFICIENCIES.
3
TO LEVERAGE EXISTING PARTNERSHIPS AND EXPERTISE IN THE
ENERGY SECTOR BY PURSUING INITIATIVES AIMED AT SUPPLYING
AND SERVING NEW MARKETS.
4
TO OPTIMISE PRODUCTION OPERATIONAL EFFICIENCIES BY
LEVERAGING EXISTING ASSETS FOR PRODUCTIVITY AND
EFFICIENCY IN THE MINING OPERATIONS
5
TO CONTINUE TO DIVERSIFY EARNINGS SOURCES AND STABILISE
CASH FLOWS.
Indika Energy seeks out investments in the energy sector through a disciplined acquisition
approach based on deep comprehension of energy assets. This requires Indika Energy to
stay informed of natural resources regulatory developments and to promote Indonesia’s
economic development through its domestic and international interests.
Indika Energy’s expertise and capabilities now span the entire coal energy operations
business chain. Improved operational flexibility and cost management, and the provision
of efficient services to clients throughout the value chain, are critical to extracting
synergies from this integration.
Currently, Indika Energy plays a considerably large role in the coal mining industry as
well as nationwide energy services including the logistics and energy infrastructure
(power plant) businesses. Kideco’s international customers include leading power plant
companies from 16 countries across Asia and Europe. Its eco-friendly, low calorific,
low-ash and low-sulfur coal gives rise to the possibility through blending of creating
new products, for new markets.
Through structural planning and corporate work plans, Indika Energy’s advanced
Information and Communication Technology (ICT) system has been harnessed to support
business decision making processes and objectives across all business units to achieve
optimal efficiencies in the use of resources, cost management, fleet management and
operational flexibility.
Indika Energy’s business includes integrating attractive investments to diversify and
grow earnings while maintaining financial prudence to ensure value protection
21
Annual Report 2016
Shareholding
Structure
as of 31 December 2016
Public
(34.68%)
Board of Commissioners
& Board of Directors
(1.85%)
PT Indika Mitra Energi
(63.47%)
SHARE OWNERSHIP BY BOARD OF COMMISSIONERS & BOARD OF DIRECTORS
AS OF 31 DECEMBER 2016
NO. NAME
POSITION
1
Agus Lasmono
President Commissioner
2
Richard Bruce Ness
Commissioner
3
M, Chatib Basri
Independent Commissioner
4
Boyke W, Mukiyat
Independent Commissioner
-
-
5
M, Arsjad Rasjid P,M,
President Director
1,208,000
0.02
6
Azis Armand
Director
1,208,000
0.02
7
Eddy Junaedy Danu
Independent Director
81,880,500
1.57
92,262,500
1.83
Total
PT Indika Energy Tbk.
22
SHARES AMOUNT
SHARES (%)
10,156,000
0.19
810,000
0.02
-
-
CAPITAL STRUCTURE AS OF 31 DECEMBER 2016
AUTHORIZED CAPITAL
ISSUED & PAID-UP CAPITAL
Rp 1,700,000,000,000 (Divided into
Rp 521,019,200,000 (US$ 56,892,154)
17,000,000,000 shares, each share with a (Divided into 5,210,192,000 Shares)
par value of Rp 100)
CONTROLLING SHAREHOLDERS AS OF 31 DECEMBER 2016
OWNERSHIP STATUS
PT Indika Mitra Energi*
JPMCB NA Re-JPMCB
Singapore Branch
NUMBER OF SHARES
OWNERSHIP (%)
3,307,097,790
63,47
271,762,000
5,22
*) Controlled by Wiwoho Basuki Tjokronegoro & family with 40.5% ownership and Agus Lasmono with 59.5%
ownership.
SHARE OWNERSHIP COMPOSITION AS OF 31 DECEMBER 2016
OWNERSHIP STATUS
NUMBER OF SHARES
OWNERSHIP (%)
3,342,192,081
64.15
Individuals - Domestic
935,581,077
17.96
Institutions - Foreign
433,215,242
8.31
Mutual Funds
404,855,300
7.77
Employees
35,579,500
0.68
Pension Funds
30,575,100
0.59
Insurance
18,694,000
0.36
Limited Liabilities Companies (PT)
Individual - Foreign
5,094,200
0.10
Foundations
4,386,000
0.08
Cooperatives
19,500
0.00
5,210,192,000
100
Total
23
Annual Report 2016
2016
FINANCIAL
HIGHLIGHTS
INDIKA ENERGY
25
Indika Energy
Financial Highlights
Expressed in US$, unless otherwise stated
2016
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Revenues
Cost of Contracts and Goods Sold
Gross Profit
General and Administrative Expenses
Operating (Loss) Profit
Loss for The Year
Total Comprehensive Loss for The Year
Loss Attributable To :
Owners of The Company
Non-Controlling Interests
Total Comprehensive Loss Attributable To:
Owners of The Company
Non-Controlling Interests
Equity in net profit of Associates and Jointly-Controlled Entities
Outstanding Shares
Loss per share
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
Investment in associates
Investment in jointly-controlled entities
Investments in portofolio - Third party
Investments in bond
Total Current Assets
Total Non-Current Assets
Total Assets
Total Current Liabilities
Total Non-Current Liabilities
Total Liabilities
Total Equity
Total Liabilities & Equity
1,097,296,489
1,008,966,857
88,329,632
103,752,957
(15,423,325)
(76,847,028)
(74,016,652)
1,109,508,311
948,472,697
161,035,614
132,267,653
28,767,961
(30,616,975)
(29,412,415)
(67,594,082)
(36,636,644)
(44,587,878)
(32,259,150)
(27,635,381)
(2,981,594)
(65,929,700)
(36,636,644)
59,464,493
5,210,192,000
(0.0130)
(41,757,502)
(32,259,150)
72,629,159
5,210,192,000
(0.0086)
(26,430,821)
(2,981,594)
73,482,756
5,210,192,000
(0.0053)
260,422,206
10,832,519
25,532,293
667,436,233
1,154,896,836
1 ,822,333,069
312,981,711
768,241,790
1,081,223,501
741,109,568
1,822,333,069
277,545,435
13,026,000
59,241,118
827,311,691
1,323,133,520
2,150,445,211
505,612,838
813,287,965
1,318,900,803
831,544,408
2,150,445,211
271,766,662
14,487,529
54,780,796
831,419,308
1,458,891,053
2,290,310,361
396,736,289
979,632,294
1,376,368,583
913,941,778
2,290,310,361
in US$
-29.4%
PT Indika Energy Tbk.
2014
775,232,931
686,531,106
88,701,825
98,818,007
(10,116,182)
(104,230,726)
(102,566,344)
REVENUES
2016 | 775,232,931
2015| 1,097,296,489
2015
0.4%
34.4%
GROSS PROFIT
OPERATING PROFIT
in US$
in US$
2016 | 88,701,825
2015 | 88,329,632
2016 | (10,116,182)
2015 | (15,423,325)
26
Expressed in US$, unless otherwise stated
2016
GROWTH (%)
Revenues
Cost of Contracts and Goods Sold
Gross Profit
General and Administrative Expenses
Operating Profit (Loss)
Loss - Attributable to owners of the Company
Total Assets
Total Liabilities
Total Equity
-1.1%
6.4%
-45.1%
-21.6%
-153.6%
-61.3%
-6.1%
-4.2%
-9.0%
28.5%
41.6%
-16.7%
-13.2%
-29.7%
-55.8%
-1.1%
0.7%
-3.8%
-1.3
-8.72
-0.01
-0.09
-0.01
-0.04
-1.4
-4.06
-0.02
-0.05
-0.01
-0.02
2.6
-2.49
0.03
-0.03
0.01
-0.01
2.13
1.46
0.59
1.64
1.59
0.61
2.10
1.51
0.60
PROFIT FINANCIAL RATIO
Total Current Assets / Total Current Liabilities(x)
Total Liabilities / Total Equity (x)
Total Liabilities / Total Assets (x)
in US$
2016 | 59,464,493
2015 | 72,629,159
-18.1%
2014
-29.4%
-32.0%
0.4%
-4.8%
34.4%
51.6%
-15.3%
-18.0%
-10.9%
OPERATING RATIO
Operating Income (Loss) / Revenues (%)
Loss Attributable to the Owners of the Company / Revenues (%)
Operating Profit (Loss) / Total Equity (x)
Loss Attributable to the Owners of the Company / Total Equity (x)
Operating Profit (Loss) / Total Assets (x)
Loss Attributable to the Owners of the Company / Total Assets (x)
EQUITY IN NET PROFIT OF
ASSOCIATES AND JOINTLY
CONTROLLED ENTITIES
2015
51.6%
LOSS ATTRIBUTABLE TO
OWNERS OF THE
COMPANY
ADJUSTED EBITDA*
in US$
2016 | 155,714,099
2015 | 191,958,917
-18.9%
in US$
2016 | (67,594,082)
2015 | (44,587,878)
* Including dividends received from associates
and jointly controlled companies.
27
Annual Report 2016
Revenue
Breakdown
2016
2015
Petrosea
Petrosea
27.0%
18.8%
MBSS
MBSS
8.2%
8.4%
Tripatra
Tripatra
43.3%
28.0%
Others
Others
5.7%
8.6%
Coal Trading
Coal Trading
28.0%
24.0%
US$ 775.2 million
US$ 1,097.3 million
BOND INFORMATION
DESCRIPTION
VALUE
STOCK LISTING
INTEREST
RATE
EFFECTIVE
DATE
MATURITY
DATE
RATING
Notes 2018
US$ 171.4
Million
Singapore Stock
Exchange
7%
5 May 2011
7 May 2018
“Caa1” with negative outlook by Moody’s
and “CCC” with negative outlook by Fitch.
Notes 2023
US$ 500
Million
Singapore Stock
Exchange
6.375%
24 January
2013
24 January
2023
“Caa1” with negative outlook by Moody’s
and “CCC” with negative outlook by Fitch.
DIVIDEND POLICY
DIVIDEND AMOUNT
(IN BILLION RP)
DIVIDEND PER SHARE
(IN RP)
DIVIDEND PAYOUT RATIO
DIVIDEND PAYMENT DATE
2008
437.40
84.00
40.32% of 2008 Net Income
3 July 2009
2009
362.83
69.68
50.00% of 2009 Net Income
25 June 2010
2010
249.94
48.00 (INTERIM DIVIDEND)
–
30 November 2010
135.39
26.00 (FINAL DIVIDEND)
–
29 July 2011
Total
385.30
74.00
50.00% of 2010 Net Income
2011
312.61
60.00
25.79% of 2011 Net Income
26 July 2012
2012
US$19,000,000.00
US$0.003647
21.79% of 2012 Net Income
31 July 2013
PT Indika Energy Tbk.
28
Stock Highlights
Stock Price
Rp
Volume
(million)
1,000
400
2
900
350
800
300
1
700
250
600
200
500
150
400
100
300
50
200
100
0
Jan
Feb Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec Jan
Feb
Mar
Apr
May
2015
Jun
Jul
Aug
Sep
Oct
Nov
Dec
2016
SUSPENSION
In 2016, trading of INDY shares was suspended twice because of Unusual Market Activity (UMA).
8 MARCH
IDX has announced INDY UMA through letter Peng-UMA-0018/BEI.WAS/03-2016.
1
18 MARCH
IDX temporarily suspended trading of INDY shares through announcement Peng-SPT-0006/BEI.WAS/03-2016 dated 17 March 2016
(first suspension).
21 MARCH
IDX unsuspended trading of INDY shares through announcement Peng-SPT-0007/BEI.WAS/03-2016 dated 18 March 2016.
2
23 MARCH
IDX temporarily suspended trading of INDY shares through announcement Peng-SPT-0009/BEI.WAS/03-2016 dated 22 March 2016
(second suspension).
1 APRIL
IDX unsuspended trading of INDY shares through announcement Peng-SPT-0010/BEI.WAS/03-2016 dated 31 March 2016.
SHARE PRICE 2015-2016
SHARE PRICE
YEAR
HIGHEST
LOWEST
TRANSACTION IN REGULAR MARKET
CLOSING
TOTAL SHARES
TRANSACTION VOLUME
FREQUENCY
(X)
MARKET CAPITALIZATION
(Rp)
VALUE
(Rp billion)
2015
Q1
520
426
434
5,210,192,000
77,881,300,00
19,729
37,320,677,400,00
2,261,223,328,000
Q2
435
290
315
5,210,192,000
204,976,300,00
27,610
74,717,967,100,00
1,641,210,480,000
Q3
328
185
193
5,210,192,000
95,074,900,00
13,040
23,710,530,600,00
1,005,567,056,000
Q4
232
105
110
5,210,192,000
357,095,300,00
25,239
54,827,955,800,00
573,121,120,000
Q1
377
106
345
5,210,192,000
1,856,935,500,00
60,810
340,227,898,800,00
1,797,516,240,000
Q2
685
252
540
5,210,192,000
3,059,840,300,00
148,270
1,393,511,723,400,00
2,813,503,680,000
Q3
785
515
615
5,210,192,000
918,090,800,00
62,577
627,546,645,000,00
3,204,268,080,000
Q4
1005
625
705
5,210,192,000
1,565,121,800,00
109,260
1,292,200,530,000,00
3,673,185,360,000
2016
29
Annual Report 2016
KIDECO
FINANCIAL HIGHLIGHTS
Expressed in US$, unless otherwise stated
2016
2015
2014
1,247.8
1,067.8
180.0
24.7
155.4
88.6
1,658.2
1,376.9
281.3
27.8
253.6
138.1
2,059.4
1,731.1
328.3
32.7
295.6
154.4
273.9
171.4
445.3
146.0
53.7
199.7
245.6
445.3
400.5
182.2
582.8
211.5
48.0
259.6
323.2
582.8
396.0
206.4
602.4
224.3
51.6
275.8
326.6
602.4
-24.8
-22.5
-36.0
-11.1
-38.7
-35.8
-23.6
-23.1
-24.0
-19.5
-20.5
-14.3
-15.2
-14.2
-10.5
-3.3
-5.9
-1.0
-2.9
4.6
-29.5
3.6
-31.9
-27.3
-12.3
-14.7
-10.1
COMPREHENSIVE STATEMENTS OF INCOME
Sales
Cost of Sales
Gross Profit
Operating Expenses
Operating Income
Net Income
STATEMENT OF FINANCIAL POSITION
Total Current Assets
Total Non-Current Assets
Total Assets
Total Current Liabilities
Total Non-Current Liabilities
Total Liabilities
Total Equity
Total Liabilities & Equity
GROWTH (%)
Sales
Cost of Sales
Gross Profit
Operating Expenses
Operating Income
Net Income
Total Assets
Total Liabilities
Total Equity
REVENUES
GROSS PROFIT
EBIT
in million US$
in million US$
in million US$
2016 | 1,247.8
2015 | 1,658.2
2016 | 180.0
2015 | 281.3
2016 | 155.4
2015 | 253.6
-24.8%
-36.0%
PT Indika Energy Tbk.
30
-38.7%
Expressed in US$, unless otherwise stated
2016
2015
2014
12.45
7.10
0.63
0.36
0.35
0.20
15.29
8.33
0.78
0.43
0.44
0.24
14.35
7.50
0.90
0.47
0.49
0.26
1.88
1.89
1.77
Total Liabilities / Total Equity (x)
0.81
0.80
0.84
Total Liabilities / Total Assets (x)
0.45
0.45
0.46
OPERATING RATIO
Operating Income / Sales (%)
Net Income / Sales (%)
Operating Income / Total Equity (x)
Net Income / Total Equity (x)
Operating Income / Total Assets (x)
Net Income / Total Assets (x)
FINANCIAL RATIO
Total Current Assets / Total Current Liabilities (x)
NET PROFIT
EBITDA
SALES VOLUME
in million US$
in million US$
in million ton
2016 | 88.6
2015 | 138.1
2016 | 179.6
2015 | 281.8
2016 | 32.5
2015 | 38.6
-15.8%
-35.8%
-36.3%
31
Annual Report 2016
Kideco´s
Coal Production
50
40.3
40
39.0
37.3
34.2
32.1
31.5
29.1
30
24.7
22.0
20.6
20
18.2
18.9
16.0
14.0
11.5
10.3
(in million tonnes)
10
7.4
8.5
5.0
0
1998
1999
2004
2007 2010
2011
2000 2001
2005
2006 2012
2002
2003
2008
2009
COAL RESERVES BY PIT
AREA
2013
2014
2015
2016
in million tonnes
CALORIFIC VALUE (KCAL)
PROVED
PROBABLE
TOTAL
Roto North
5,615
-
9.0
9.0
Roto South
4,940
43.0
19.0
62.0
Roto South G (Biu)
4,855
-
8.0
8.0
Roto Middle
4,785
14.0
8.0
22.
Susubang
5,705
1.0
3.0
4.0
Samarangau
4,430
96.0
221.0
317.0
154.0
268.0
422.0
Total
Based on JORC Report dated June 2015
PT Indika Energy Tbk.
32
COAL RESOURCES BY PIT
in million tonnes
MEASURED
INDICATED
INFERRED
TOTAL
Roto North
-
23.0
17.0
40.0
Roto South
60.0
72.0
44.0
175.0
-
12.0
21.0
33.0
55.0
68.0
64.0
187.0
AREA
Roto South G (Biu)
Roto Middle
Susubang
Samarangau
Total
1.0
5.0
3.0
9.0
142.0
585.0
208.0
935.0
250.0
775.0
350.0
1.375.0
Based on JORC Report dated June 2015
SALES BY DESTINATION 2016
DESCRIPTION
VOLUME
%
(thousand tonnes)
China
8.667
26,7%
Indonesia
8.565
26,4%
India
3.231
10,0%
Korea
2.650
8,2%
Philipines
2.350
7,2%
Malaysia
1.835
5,7%
Japan
1.460
4,5%
Taiwan
1.275
3,9%
970
3,0%
1.458
4,5%
Thailand
Others
OPERATION BY PIT 2016
DESCRIPTION
ROTO NORTH
ROTO SOUTH
ROTO MIDDLE
SAMARANGAU
SUSUBANG
TOTAL
Overburden (million bcm)
8.6
89.5
19.7
71.2
4.8
193.9
Production (million tonnes)
2.3
10.2
2.3
16.7
0.6
32.1
Stripping Ratio (x)
3.8
8.8
8.3
4.3
8.0
6.0
33
Annual Report 2016
34
INDIKA ENERGY
PRESIDENT
COMMISSIONER´S
AND PRESIDENT
DIRECTOR´S
MESSAGES
President
Commissioner’s
Message
PT Indika Energy Tbk.
36
“THE COMPANY HAS SUCCESSFULLY
LAID THE FOUNDATIONS OF A
TURNAROUND THAT WILL DELIVER
BENEFITS TO SHAREHOLDERS IN 2017
AND BEYOND, DEMONSTRATING OUR
ABILITY TO FORGE AHEAD.”
AGUS LASMONO | President Commissioner
37
Annual Report 2016
Distinguished Shareholders,
against impairment of assets in 2015), Loss Attributable to the
Owners of the Company would have been US$ 29.0 million
compared with US$ 55.8 million in 2015.
2016 was an extremely volatile year for the coal sector and related
businesses. The main variable was the Chinese moratorium on
imported coal, which was suddenly and unexpectedly relaxed at
the end of the third quarter in order to meet domestic demand
for coal with winter coming on. While Chinese demand has
historically risen at this time due to the weather, the extent was
unprecedented, and given tightened global supply after several
years of declining prices, the resulting supply-demand imbalance
drove prices up.
These numbers suggest that the Board of Director’s turnaround
strategy, which was implemented since 2015, is beginning to see
traction. Over the past two years, the management has reduced
cost, stabilized operations and increased efficiency, preserved
cash and deferred capex in response to the adverse business
climate. In 2016 alone, total debt was reduced by about
US$ 164.9 million to US$ 805.3 million, and costs were reduced
by US$ 4.9 million, with the full impact of the cost reduction
initiatives to be felt in the coming year. In parallel, various new
contracts have been secured, increasing the value of the total
backlog for MBSS, Petrosea and Tripatra at the end of 2016 to
US$ 1,706.5 million. The Company moreover has room and
resources to invest thanks to its solid cash and other financial
assets balance recorded at US$ 308.1 million at year end.
The oil and gas sector also saw enormous fluctuation, continuing
its downward trajectory which began in 2014 due to shale oil
production in the United States, and OPEC and Russian output.
However, similar to coal, oil prices rose sharply to record levels
at year-end as production from the United States and Nigeria
decreased.
EVALUATION OF THE COMPANY’S
MANAGEMENT AND STRATEGY
EXECUTION
In summary, these initiatives have not only improved
the Company’s fundamentals but have also substantially
strengthened the Group’s competitiveness. In light of these
indicators, it is our opinion that the Board of Directors has
successfully laid the foundations of a turnaround that will deliver
benefits to shareholders in 2017 and beyond, demonstrating our
resiliency and ability to bounce back.
In the first half of 2016, our businesses were affected by the
continued in decline in coal and oil and gas prices. The significant
improvement that took place towards the end of the year came
too late to have much impact on our 2016 business results.
Under these circumstances, revenue declined by 29.4%
to US$ 775.2 million. Due to various one offs, the Company
recorded Loss Attributable to the Owners of the Company of
US$ 67.6 million compared with a loss of US$ 44.6 million in
2015.
IMPLEMENTATION OF CORPORATE
GOVERNANCE
Notwithstanding the adverse business climate, corporate
governance continued to be a priority. Indika Energy remains
committed to the highest standards of corporate governance,
along with all its subsidiaries. In doing so, the Board of
Commissioners regularly supervised and advised the Board
of Directors through scheduled meetings as well as interim
discussions and reports. Overall, the Board of Commissioners is
Viewed at a fundamental level, however, the Company in
fact showed improvement. Gross profit remained stable at
approximately US$ 88 million and gross margins improved by
0.4%. On a normalized basis (taking out non recoverable tax,
impairment of assets and certain employee benefits in 2016
as well as gain on partial repurchase of 2018 Notes netted off
PT Indika Energy Tbk.
38
satisfied that the implementation of corporate governance under
the Board of Directors has met relevant standards. In particular,
the Code of Business Conduct has been uniformly implemented
across the Group regardless of rank.
Basuki, Pandri Prabono-Moelyo and Dedi Aditya Sumanagara
resigned as members of the Board of Commissioners, and the
AGMS appointed as their replacements Wishnu Wardhana,
previously President Director of Indika Energy, Richard Bruce
Ness, previously a Director of Indika Energy, as a Commissioner,
and Boyke Wibowo Mukiyat as an Independent Commissioner.
OPINION ON BUSINESS PROSPECTS
In early December 2016, Wishnu Wardhana resigned from
his position as President Commissioner to focus on other
endeavours. Subsequently, at the Extraordinary General Meeting
of Shareholders (EGMS) on 30 January 2017, I was appointed
President Commissioner.
The improvements forecast by the Board of Directors for 2017
are based on sound reasoning. The improved backlog at
subsidiaries will contribute to certain revenue growth, while
the cost cutting measures taken in 2016 have already reduced
expenses somewhat, with the full benefit still to be felt in 2017.
In addition, the write downs taken in 2016 have effectively
streamlined the balance sheet.
On behalf of the Board of Commissioners, I would like
to welcome Boyke Wibowo Mukiyat to the Board of
Commissioners and look forward to his active and valuable
contributions. I would also like to express our gratitude to
Wiwoho Basuki Tjokronegoro, Indracahya Basuki, Pandri
Prabono-Moelyo, Dedi Aditya Sumanagara and Wishnu
Wardhana for their numerous contributions to the Company.
We wish them all success.
Externally, while the potential for volatility remains high, indicators
suggest that the global pricing environment has stabilized
somewhat for coal as well as for oil, which has an indirect effect
on coal pricing. The production cuts of previous years have also
brought supply and demand into better equilibrium, which should
contribute to market stability. Meanwhile, the actions taken by
the management have effectively positioned the Company to
be more productive and competitive regardless of the business
climate.
SUMMARY
The last few years have not been easy, as we have struggled to
perform in the midst of adversity. The Board of Commissioners
wishes to commend the management and all employees for their
efforts, which are finally beginning to pay off. We also thank
our valuable customers for their business. We look forward
to a better year in 2017 for all of us, including our partners,
shareholders and stakeholders at large.
Based on these factors, we are therefore confident in the
management’s reasoning that 2017 will be a better year for
Indika Energy and its shareholders.
CHANGES TO THE BOARD OF
COMMISSIONERS
The number of Commissioners was reduced from seven to five
during the year, and was further reduced to four in January
2017. At the Annual General Meeting of Shareholders (AGMS)
dated 28 April 2016, Wiwoho Basuki Tjokronegoro, Indracahya
AGUS LASMONO
President Commissioner
39
Annual Report 2016
President
Director’s
Message
PT Indika Energy Tbk.
40
“OPERATIONS HAVE BEEN STABILIZED
AND GROUP’S PERFORMANCE
IMPROVED AS APPARENT IN THE
INCREASE OF GROSS PROFIT.”
M. ARSJAD RASJID P.M.
| President Director & Group CEO
41
Annual Report 2016
Valued Shareholders,
Group’s performance improved as apparent in the increase of
gross profit from 8.0% in 2015 to 11.4% in 2016.
Conditions in 2016 continued to be highly challenging for the
majority of the Indonesian energy industry. In the early part of
the year, conditions worsened yet further in the coal and oil
and gas sector. The Indonesian HBA (Harga Batubara Acuan)
thermal coal reference price reached its lowest point in more
than five years at US$ 50.92 per tonne in February, while crude
oil prices plunged to a thirteen-year-low of US$ 26.55 per
barrel in January.
That said, the full impact of the turnaround will not be seen until
next year. Revenue was still down for 2016, with the main factors
being a decline in revenue from Tripatra, where major projects
completed as anticipated; from MBSS, due to lower volumes
transported and continued pricing pressure; and from coal sales
and trading, which saw lower volumes and prices. Consequently,
Indika Energy recorded a 29.4% decrease in revenue to US$
775.2 million, although gross profit remained stable at around
US$ 88 million in 2016 and 2015.
In the third quarter however, coal prices spiked, driven primarily
by increasing Chinese demand and limited supply. By December,
the HBA had skyrocketed to US$ 101.69 per tonne, its highest
point since early 2012, although the HBA has since moderated
to hover around US$ 85 per tonne. Meanwhile crude oil prices
rose in the second half of the year, nearly doubling to peak at
US$ 54 per barrel at the end of the year. Such volatility posed
a major challenge to all businesses in the sector.
At the businesses, the biggest losses came from IIR, MBSS and
Petrosea. Whereas equity in net profit of associates and jointly
controlled entities declined by US$ 13.2 million to US$ 59.5
million in 2016, with the main factor being lower income from
Kideco due to lower production and coal prices. In addition,
at the consolidated level, Company took a number of write
downs mainly related to non-recoverable tax, and impairment
of intangible assets and property plant and equipment as the
estimated future value of assets were marked down in the
adverse business climate.
STRATEGY AND PERFORMANCE IN 2016
In this uncertain climate, the ongoing strategy that we began in
2015 produced early signs of turnaround, showing our resilience
as we forged ahead. This strategy comprised four initiatives: cost
savings and operational improvement, stabilization of operations
including business consolidation and divestment of non-core
assets, cash preservation in conjunction with lower debt, and
improved business development. Under this strategy, the
Company has substantially streamlined its costs, saving 4.8% or
US$ 4.9 million in 2016 with the full impact of the cost savings
yet to be felt in 2017.
As a result, the Loss Attributable to the Owners of the Company
increased by 51.6% to US$ 67.6 million in 2016. On a normalized
basis however, Loss Attributable to the Owners of the Company
would have been US$ 29.0 million compared with US$ 55.8
million in 2015.
BUSINESS PROSPECTS
Overall, operations have been stabilized with divestment of
various non-core assets in process, and debt has been reduced by
US$ 267.7 million over the last four years, thus lowering financing
costs. Finally, and very importantly, business development
efforts improved our backlog value by more than 60% to
US$ 1,706.5 million at the end of 2016. Thanks to these efforts,
PT Indika Energy Tbk.
Based on the above and the improving business climate, we
are confident that the Company will significantly improve its
performance in 2017. Apart from indications of accelerating
national economic growth and generally higher coal and oil and
gas prices, we expect that the higher backlog and improved
42
cost structure will deliver top as well as bottom line growth. In
particular, the full impact of the organizational rationalization
will be felt in 2017, and is expected to have significant impact. It
should also be noted that the Company had substantial cash and
other financial assets amounting to US$ 308.1 million at the end
of 2016, giving it flexibility to manoeuvre.
were merged, generating time and coordination savings without
any loss of functionality. These changes did not in any way impair
our ability to uphold all principles of good corporate governance,
and we continued to ensure that Indika Energy was properly run
in compliance with all applicable rules and regulations.
Going forward, the Company will continue to explore business
opportunities, control costs and pay down debt. The actions
taken over the past two years have advantageously positioned
its business to compete going forward, with a number of its
businesses having increased their market share or begun new
lines of business, which bodes well for the sustainability of the
business.
CHANGES TO THE BOARD OF
DIRECTORS
At the 28 April 2016 AGMS, Wishnu Wardhana, Richard Bruce
Ness, Rico Rustombi and Joseph Pangalila resigned from the
Board of Directors, and Wishnu Wardhana and Richard Bruce Ness
were subsequently appointed to the Board of Commissioners. At
the AGMS, I also resigned as Vice President Director and was
reappointed at President Director, joining my colleagues Azis
Armand and Eddy Junaedy Danu as Board of Directors.
IMPLEMENTATION OF CORPORATE
GOVERNANCE
We thank Wishnu Wardhana, Richard Bruce Ness, Rico Rustombi
and Joseph Pangalila for their service as Directors.
At Indika Energy, we regard good corporate governance as the
cornerstone of our business. In keeping with our vision and
mission of being a world-class company, we moreover ensure that
we stay informed of new corporate governance developments in
the United States and OECD, and strive to adopt them.
SUMMARY
The past few years have been an extremely challenging period
for the energy sector, especially for businesses related to coal
and to a lesser extent, oil and gas. On behalf of the Board of
Directors, I would like to thank all of our dedicated employees,
the Board of Commissioners, our customers and partners, and
especially our loyal shareholders for your support and patience.
We believe that in 2017 your trust in us will be rewarded.
Among others, Indika Energy Group upholds diversity and rejects
discrimination based on religion, gender or ethnicity; safeguards
its political neutrality; and has implemented anti
bribery and anti-fraud practices. These principles apply to all
employees and management of Indika Energy regardless of
position.
In the interests of streamlining, after due consideration it was
decided the functions of the Audit Committee and the Good
Governance Committee could be more efficiently performed by
the same set of people. Therefore, in 2016, the Audit Committee
and Good Governance Committee
M. ARSJAD RASJID P.M.
President Director & Group CEO
43
Annual Report 2016
BOARD
PROFILES
Board of
Commissioners
AGUS
LASMONO
MUHAMAD
CHATIB BASRI
President Commissioner
Independent Commissioner
PT Indika Energy Tbk.
46
BOYKE WIBOWO
MUKIYAT
RICHARD
BRUCE NESS
Independent Commissioner
Commissioner
47
Annual Report 2016
Board of
Commissioners Profile
AGUS LASMONO
President Commissioner
Age 45, appointed as President Commissioner of Indika Energy
since 2017 as referred to Deed Number 24 dated 30 January
2017. Bapak Agus Lasmono is the founder and owner of Indika
Energy, he was Vice President Commisioner of Indika Energy
from 2007 to 2017.
He also member of Human Capital Committee of Indika Energy
as referred to Board of Commissioners Decree No. 076/IE/BOC/
DEC/VII/2016.
Bapak Agus Lasmono also holds positions as President
Commissioner of PT Net Mediatama Televisi (since 2012), PT
Indika Inti Corpindo (since 2004) and PT Indika Inti Holdiko
(since 2004) and Commissioner of Kideco (since 2004), and as
President Director of PT Indika Mitra Energi (since 2010), and PT
Indika Multi Media (since 2002).
Previously he also held positions such as Independent
Commissioner of PT Surya Citra Media Tbk. and PT Surya Citra
Televisi (2005-2013).
He earned his Bachelor of Arts in Economics from Pepperdine
University, Malibu, California, United States in 1993 and Master
degree in International Business from West Coast University, Los
Angeles, California, United States in 1995.
PT Indika Energy Tbk.
48
MUHAMAD CHATIB BASRI
Independent Commissioner
Age 52, appointed as Independent Commissioner of Indika
Energy in 2015 as referred to Deed Number 95 dated 29 April
2015, after previously serving as Independent Commissioner
from March 2008 to June 2012. He also Chairman of Human
Capital Committee of Indika Energy as referred to Board of
Commissioners Decree No. 076/IE/BOC/ DEC/VII/2016 and
member of Risk & Investment Committee of Indika Energy as
referred to Board of Commissioners Decree No.077/IE/BOC/DEC/
VII/2016.
He is also President Commissioner of PT XL Axiata Tbk. (since
29 September 2017), President Commissioner of Indonesia
Infrastructure Finance (since 2015), Independent Non-Executive
Director of Axiata Group Berhad, Malaysia (since 2015) and
Independent Commissioner of PT Astra International Tbk.
Bapak M. Chatib Basri was Minister of Finance of the Republic
of Indonesia (2013-2014), Chairman of Investment Coordinating
Board of the Republic of Indonesia (2012-2013), Vice Chairman
of the National Economic Committee of the Republic of Indonesia
(2010-2012), Special Advisor to the Minister of Finance of the
Republic of Indonesia (2006-2010), Deputy Minister of Finance
of the Republic of Indonesia for G-20 (2006-2010), Advisor to
the Coordinating Minister for Economic Affairs of the Republic
Indonesia (2004-2005).
Bapak M. Chatib Basri is a member of the World Bank Advisory
Council on Gender and Development, and Chairman of the
Advisory Board at Mandiri Institute. He is the Thee Kian Wie
visiting Professor at Australian National University, and is also
a Senior Lecturer at the Department of Economics, University of
Indonesia. He was a Senior Fellow of Harvard Kennedy School,
United States (2015-2016) and a member of the Asia Pacific
Regional Advisory Group of the International Monetary Fund
(IMF) (2010-2012).
He earned his Bachelor degree Economics from University
of Indonesia in 1992, then awarded a Master of Economic
Development and Ph.D in Economics from Australian National
University in 1996 and 2001 respectively.
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Annual Report 2016
BOYKE WIBOWO MUKIYAT
Independent Commissioner
Aged 58, was appointed as Independent Commissioner of
Indika Energy in 2016 as referred to Deed Number 58 dated 28
April 2016. Bapak Boyke also holds the positions of President
Commissioner of PT Rukun Raharja Tbk. and President Director
of PT Truba Jaya Engineering.
He is the Chairman of Audit & Corporate Governance Committee
of Indika Energy as referred to Board of Commissioners
Decree No.075/IE/BOC/DEC/VII/2016 and member of Risk &
Investment Committee of Indika Energy as referred to Board of
Commissioners Decree No.077/IE/BOC/DEC/VII/2016.
Previously, Bapak Boyke also served as President Commissioner
of PT Jakarta Propertindo (2015-2016), as Commissioner of
PT Pertamina EP Cepu (2014-2015), President Director of PT
Perusahaan Pengelola Aset (2008-2013), President Director of
PT Bahana Pembinaan Usaha Indonesia (2006-2008), Director of
PT Bahana Pembinaan Usaha Indonesia (2001-2006), President
Director of PT Niaga Asset Management (1999-2001) and
Director of PT Niaga Asset Management (1997-1999).
He earned a Diploma degree in Marketing & Business
Administration from London Business School United Kingdom in
1980, a Bachelor degree in Accounting from Jayabaya Academy,
Jakarta in 1984, and Bachelor degree in Economics from
University of Indonesia in 1990. Bapak Boyke is also an alumni
of London Business School in 2004 and John F. Kennedy Harvard
Government School, United States, in 2006.
PT Indika Energy Tbk.
50
RICHARD BRUCE NESS
Commissioner
Age 67, appointed as Commissioner of Indika Energy in 2016
as referred to Deed Number 58 dated 28 April 2016, previously
serving as Director of Indika Energy from May 2009 to April
2016, whilst held position as Independent Director in 2013 to
2014. Bapak Rick initially joined Indika Energy as Director in
2009 with reference to Deed Number 123 dated 28 May 2009.
He also member of Risk & Investment Committee of Indika
Energy as referred to Board of Commissioners Decree No.077/
IE/BOC/DEC/VII/2016.
He also serves as President Commissioner of Petrosea (since
2010). He has been actively involved in the energy, resources
and mining sectors for more than 30 years. Previously, he also
served as Commissioner of MBSS (2010-2011), as President
Director of various affiliates and subsidiaries of Newmont, as
mining consultant at PT Clinton Indonesia and as Vice President
of Freeport. He also holds the position of Chairman of Mining for
the American Chamber of Commerce, Indonesia.
Bapak Rick earned a Bachelor degree in Mechanics from
Moorhead Technical Institute, Minnesota, USA, in 1969 and
attended Moorhead State University, Minnesota, USA, for
additional studies in post-secondary education until 1979. He
also completed a Professional Management program at Harvard
Business School, USA, in 1992.
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Annual Report 2016
Board of
Directors
M. ARSJAD
RASJID P.M.
President Director
PT Indika Energy Tbk.
52
AZIS
ARMAND
EDDY JUNAEDY
DANU
Director
Independent Director
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Annual