2013 - PT Wijaya Karya (Persero) tbk · corporate social responsibility ... 4 wika CORPORaTE REPORT...

Corporate report 2013

This Corporate report includes WIKa’s statements that represent Company’s performance in the year of 2013.

These statements reflect Company Financial Highlights, Business Segments overview, and all the supporting activities that have been done to achieve last year performance.

4.09USD

total project in 2013

billion741.65USD

new contract of construction services in 2013

million245.30USD

total contract of precast concrete business segment in 2013

million

GRAPHICS & TABELS

• wika and its subsidiaries consolidated statement of financial position as of December 31, 2013

• Graphic of Net Sales• Graphic of Operating income • Graphic of Net income• Graphic of income attributable

to Parent Entity Owner• Graphic of Total assets

10101010

1111

• Graphic of Total Equity• Summary Valuation Report/Evaluation

of Good Corporate Governance implementation in 2013

• Comparation of GCG Score Result 2007-2013

• Shareholders Composition• Shareholders Structure• Stock Performance

company overview

operation area

corporatehistory

messagefrom director

financialhighlights

2

4

6

8

awards

board ofdirectors

34

36

10 humancapital

stockinformation

stock performanceand shareholdersstructure

38

39

40

12businesssegments

30

26good corporategovernance

corporate socialresponsibility

14business segmentsoverview

32quality security safety health environment

wika CORPORaTE REPORT 2013

11

29

29394040

2 wika CORPORaTE REPORT 2013

1. Jati Gede Dam, Sumedang, west Java.2. Spherical Tank, LPG Pressurized Terminal,

Tanjung Sekong, Banten.3. Head Office PT. wijaya karya (Persero) Tbk.

1

company overview

GOING GLOBAL

wika is indonesia’s leading integrated EPC & investment company, which has been operating for over 50 years. it was initially established under a name of Perusahaan Negara Bangunan widjaja karja on March 11, 1960, following the nationalization of Dutch company, Naamloze Vennotchap Technische Handel Maatschappij enBouwbedijf Vis en Co or NV Visen Co.

its business activity at that time covered the installation of electricity and water pipe. One of the contributions of the company in this area can be found in the infrastructure development of the most famous sport stadium in Jakarta, Gelora Bung karno.

Since then and up to today, wika’s business has been continuously expanding, it never stops exploring various areas of development. in the early 1970’s, it expanded into a contractor company of civil and residential buildings. Following its substantial growth, wika turned into a limited liability (persero) company on December 20, 1972. with the growth of the company and the skills of wika personnel in the construction industry, a number of subsidiary companies were then established in order to support its mission as business ventures that are able to create own products independently. Some of the subsidiary companies were: wika Beton, wika intrade, and wika Realty.

WIKA had always played a big part in the development of infrastructures in indonesia, in which the benefits can be contribute to the society.

2

3wika CORPORaTE REPORT 2013

wika keeps exploring possibilities through utilizing the advance knowledge and state of the art technology; and gaining its strength through acquisition and the establishment of joint ventures.

wika’s strength and known success enabled the company to achieve trust as well as acknowledgements from many parties. This was shown by the success of its initial public offering (iPO) on October 27, 2007 in indonesia Stock Exchange. at that time, 28.46% of its shares were released to the public, while 68.42% of its shares were held by the Government of indonesia. Since December 2012, the percentage of shares issuance was increased by 35%. as an appreciation to its employees, they can also participate in the company’s ownership through the Employee / Management Stock Option Program (E/MSOP) and Employee Stock allocation (ESa).

wika had always played a big part in the development of infrastructures in indonesia, in which the benefits can be enjoyed by the society. Suramadu bridge (connecting Java and Madura) was another examples of wika’s participation in the country’s development.

in 2010, wika arranged its new vision in order to face the global change. wika intends to become one of the best integrated EPC and investment companies in Southeast asia by 2020. This vision is believed will enable and help wika to reach a more optimum, healthier and sustainable growth.

in 2013, wika experienced a significant improvement on its financial performances. improvement of the total sales and gross profit were supported by the new contracts and Order Book in the field of construction, industry, real estate, mining and electrical mechanical. Such remarkable achievement strengthened wika’s position as the leading company in Engineering, Procurement and Construction (EPC) and integrated investment in South East asia.

wika’s opportunity to continuously expand its market and improve its performance is expected to be widely open this year.

PT WIjAyA KARyA(PERSERO) TBK

Indonesia’s LeadingIntegrated EPC & Investment Company Head OfficeJl. D.i. Panjaitan kav. 9Jakarta 13340, indonesia

T. +62 21 819 2808 +62 21 850 8640-50F. +62 21 819 1235E. [email protected]

company overview

3


Aljazair

Kantor PusatHead Office

PabrikFactory

ProyekProject

Kantor WilayahRegional Office

Kantor RepresentatifRepresentative Office

Iraq Myanmar

WIKA has diversified business lines, with a focus remained on business related to wika core business through a vertical integration strategy (backward & forward integration), in order to provide total solution in the business.

operationarea

8precast Factories

owned by wika Beton


Aljazair

Kantor PusatHead Office

PabrikFactory

ProyekProject

Kantor WilayahRegional Office

Kantor RepresentatifRepresentative Office

Iraq Myanmar

4.09billion

total order book

USD

operation areaS

corporatehistory

“Perusahaan Negara Bangunan wijaya karya” was established. its business activities were the installation of electrical and water pipe.

1960

- The company was renamed into PT wijaya karya.

- it became a construction contractor, and participated in handling important projects such as the installation of electricity grids at asahan and the Jatiluhur irrigation project.

1972

Subsequent subsidiary companies were established, namely PT wijaya karya Realty, as the progression of their Realty Division; and PT wijaya karya intrade, as the progression of the industrial and Commercial Division.

2000

- wika released initial public offering (iPO) of their shares successfully on October 29, 2007.

- at that time 35% of its shares were released to public, resulting to 65% of its shares being owned by the Government of indonesia, and the rest was owned by its management and employees (through ESa, ESOP and MSOP).

2007its first subsidiary company was established, namely PT wijaya karya Beton.

1997

wika formed new divisions.

1982 2008- The development continued,

PT wijaya karya Gedung was established. Such company specialized in handling the construction projections of high rise buildings.

- wika continued its growth by acquiring 70.08% shares of PT Catur insan Pertiwi which specialized in Mechanical Electrical. The acquired company was then renamed into PT wijaya karya insan Pertiwi.

2010“Vision 2020” was introduced in order to provide clearer directions to wika’s people and line of businesses. Under this new vision, wika aims to be one of the best integrated EPC and investment Company in Southeast asia.

2011/12- wika obtained results from the Diesel Power

Plant (50w) in Bali. Further to this, it will also generate results from the power plant in ambon, Burang, and wika intrade.

- To make sure that the business of wika Realty, wika insan Pertiwi, and wika intrade continued to grow substantially, a subsidiary restructuring program was conducted.

- The following projects were completed: • Turbine Gas Power Plant Borang, 60 Mw • Engine Gas Power Plant Rengat ambon, 21

Mw • Diesel Engine Power Plant ambon, 34 Mw

2013- a joint venture between PT Prima

Terminal Peti kemas, PT Pelindo i (Persero), and PT Hutama karya (Persero) was established.

- wika acquired the shares of PT Sarana karya (persero) from the Government of indonesia.

- wika performed a share buy back program with a total of 6.018.500 shares at iDR 1,706.77 per share.

2014- wika BETON is successfully

listed in the indonesia Stock Exchange through their initial public offering (iPO) of their shares.

- 23.47% shares were issues, including 3% of the shares being allocated to its employees and management through its ESa program.

corporate hiStory


message from director

We recognize that employeesplay an important role in wika’s

success. The development of Human Capital becomes the most important

factor that determines the overall outcome of company performance.

“

“


wijaya karya is about a performance of effiency and innovation. For us, growth is not a choice: it’s an imperative. wijaya karya is now becoming a company with a larger geographic footprint and witnessing a wave of consolidation and acquisitions amongst companies as a sign of the understanding the true strength of our core business to support new growth which we believe thatt it will result in a more synergized business in the future.

we realize we do not have the luxury of time when it comes to adapting to changing conditions. Our organization cultivates a culture that able to adapt, advance and increase the company’s sales and profit by strengthtening current business and expanding new business projects for expanding our business field. Our proven plan put us on the path of profitable growth, and we are confident it will keep us on that path going forward. we believe that Day-to-day changes can be subtle but, in sum, can make a significant impact by quickly evaluate and shed weaknesses and build strength in new areas.

we are committed to turning the challenges we face into opportunities by strengthening our competitiveness, lowering our cost base, improving our agility and making clear choices how we allocate our resources. To meet the challenges ahead and fulfill all our stakeholders’ expectations, we have restructured the company’s strategic initiatives, focusing on enhancing customer experience, operational efficiency and people development. we are motivated to remain as an innovative market leader, surpassing customers’ expectations in providing them a better experience, and at the same time inspiring and uplifting the communities in all areas where we operate.

Throughout the years, wika has always been a company that worked to do the right things and focused on continuous improvement which is really what sustainability is all about. at wika, sustainability is not a `flavor of the month’ or something we’ve embraced because it is fashionable to do so. Sustainability is a way of life at wika. Things like providing our employees around the world with the same high-quality working conditions are nothing new for wika. we wanted our key stakeholders, our customers, our employees, our investors and the communities in which we live and work to know that focusing on sustainability is an essential part of who we are and how we conduct our business. in short, at wika we know that sustainability and strong financial performance are not mutually exclusive.

we recognize the role that we play in economic and enviromental development, and remain faithful to the high standars of ethic, responsibility and integrity in our business that have always been strongly printed in our code of values and promote the practice of the principles of GCG to all employess and managements in all business aspects.

For the past 4 decades wika has grown into top national player, once a company with the activity of installation of electricity and water pipe. we are not settled for just being the national’s top construction company. we set out to become the South East asia’s top Contractors for Engineering, Procurement and Construction (EPC) contracts as well. we are continuously evolving while making concerted efforts to achieve the goal. Your continued support and interest will be a great source of strength for us to realize our vision of 2020. Until the day we make our dreams come true, we hope to get customer’s constant support and encouragement. To that we will answer with our best effort.

BINTANG PERBOWO, SE, MMpresident Director

PERFORMANCE OF EFFICIENCy AND INNOVATION

meSSage From Director


financialhighlights

2009 2010

Financial positiontotal assets 467,687,093 515,735,901total Liabilities 333,489,114 358,481,989total equity 134,197,977 157,253,913cash Flowscash Flows from operating activities 72,786,335 17,222,393cash Flows from investing activities (17,161,092) (34,219,867)cash Flows from Financing activities (42,543,284) 18,377,136results of operationsnet Sales 540,721,740 494,127,647operating income 39,785,954 39,183,790net income 16,943,469 25,534,601income attributable to:

- parent entity owner 15,524,003 23,375,354- non controlling interest 1,419,466 2,159,247total 16,943,469 25,534,601

Financial indicatorreturn on equity (%) 12.34 15.81cash ratio (%) 35.25 33.76collection period (days) 48.30 58.39Debt to equity ratio (%) 2.65 2.43operating income margin (%) 7.36 7.93net income margin (%) 2.87 4.73earning per Share (iDr/share) 33.37 50.15number of employees (persons) 1,290 1,371

WIKA AND ITS SuBSIDIARIES CONSOLIDATED STATEMENT OF FINANCIAL POSITIONAS OF DECEMBER 31, 2013(Expressed in USD, unless otherwise stated)

(in million USD)GRAPHIC OF NET INCOME

43

51

33

26

17

0

25

50

2009 2010 2011 2012 2013

(in million USD)GRAPHIC OF NET SALES

813

975

639

494541

0

500

1000

2009 2010 2011 2012 2013

(in million USD)GRAPHIC OF OPERATING INCOME

71

100

54

3940

0

50

100

2009 2010 2011 2012 2013


2011 2012 2013

687,101,228 904,156,879 1,033,305,661504,844,642 671,627,644 768,562,132182,256,586 232,529,236 264,743,529

68,784,870 39,228,165 23,719,098(66.906,925) (87,994,218) (50,854,599)

(515,128) 71,463,032 15,202,969

638,971,047 812,635,522 975,032,20554,187,160 71,376,254 99,758,54932,666,816 42,929,574 51,224,192

29,083,501 39,051,713 46,758,5492,990,213 3,877,862 4,465,643

32,073,714 42,929,574 51,224,192

17.11 18.35 19.3324.27 23.28 19.0062.38 49.67 45.37

2.95 3.16 3.188.44 8.78 10.234.58 4.81 4.80

60.59 77.96 92.931,398 1,619 1,809

FinanciaL highLightS

(in million USD)GRAPHIC OF TOTAL ASSETS

9041,033

687

516468

0

500

1000

2009 2010 2011 2012 2013

(in million USD)GRAPHIC OF TOTAL EquITy

233265

182157

134

0

250

500

2009 2010 2011 2012 2013

(in million USD)

GRAPHIC OF INCOME ATTRIBuTABLETO PARENT ENTITy OWNER

39

47

29

2316

0

25

50

2009 2010 2011 2012 2013


SuBSIDIARIES

construction real estatemechanical electrical mining

industry

99%96,5%

51%

60%

83,10% Shares wiKaShares wiKa

Shares wiKa

Shares wiKa

Shares wiKa

CONSTRuCTION

HOLDING

Bulding construction

residential and commercial construction

Facility construction

civil construction

road and Bridge

Seaport/airport/Jetty

Dam and Barrage

businesssegments


MECHANICAL ELECTRICAL

energy

engineering procurement & construction

power plant investment

industrial plant

oil and gas

industrial plant

Steel Fabrication

INVESTMENT IN ASSOCIATES

85,26%90,04%

40%

10% 2,1% 1,5%

20% 20% 15%

Shares wiKa

Shares wiKa

Shares wiKa Shares wiKa Shares wiKa

Shares wiKa Shares wiKa Shares wiKa

Shares wiKa 100% Shares wiKa

INDUSTRIENERGI

BUSineSS SegmentS


mechanical electrical

SHARE OFREVENuE

Construction business had 2 strategic business unit (SBU) which is SBU civil construction and SBU building construction.

SBU managed civil construction under general civil departments and overseas departments and territories. The SBU consists of a number of sub-areas of business namely roads and bridges, irrigation, transportation infrastructure, and workforce. SBU civil construction operations has grown, and not just be a contractor. im engineering supported by qualified, SBU is capable of doing design (design and build) of the planning process to begin the construction process.

SBU managed Building Department for Building and state government markets. As for the private market is managed by its own subsidiaries, WIKA building. SBU building construction includes residential buildings and businesses subfields building facilities. With the support capabilities in the field of engineering, the SBU has been working on design or design and build, is to do the job since the planning process through the construction process.

SHARE OFREVENuE

Mechanical electrical business segment includes 2 Strategic Business Units (SBUs) which is SBU Industrial Plant and SBU Energy.

SBU is managed by the Department of Industrial Plant Industrial Plant and Subsidiary PT WIKA Rekayasa Konstuksi. SBU Industrial Plant subfields of work carrying out oil and gas business, industrial facilities, construction and fabrication, and operation maintenance.

Energy SBU is managed by the Department of Energy, which runs the business of EPC and power plant investments. A number of EPC project has been and is still done today is: Amurang 2x25MW power plant in North Sulawesi and Asam-Asam power plant 2x65MW. To the Company’s current investment projects have had 5 units of the power plant: • Diesel Engine Power Plant Bali 3x18MW • Gas Turbine Power Plant Forms 2x30MW • Gas Engine Power Plant Rengat 6x3.5MW • Diesel Engine Power Plant 4x6.7MW Ambon and 1x8.9MW • Gas Engine Power Plant 25MW Rawa Minyak

business segmentsoverview

34.9%

14.5%

construction


MINING

SHARE OFREVENuE

Mining business segment is managed by PT Sarana Karya. The Company has 100% ownership in PT Sarana Karya. Mining business segment is engaged in the mining asphalt. The business activities of PT Sarana Karya is located on the island of Buton

BUSineSS SegmentS overview

REAL ESTATE

SHARE OFREVENuE

Real estate business segment is managed by PT WIKA Realty. The Company has a 85.26% in PT WIKA Realty. Real Estate business segments consist of residential development, building, property management and construction services. To strengthen company image, the company formed umbrella brand under the name Tamansari.

INDUSTRY

SHARE OFREVENuE

This business segment includes two sub-segments of the business segments Industrial Precast Concrete and Steel Fabrication segment.

Precast Concrete business segment is managed by PT WIKA Beton and its 2 subsidiary, PT WIKA KOBE and PT WIKA Krakatau Beton. The Company has a 83.1% ownership in PT WIKA Beton and 10% ownership in PT WIKA Krakatau Beton. Industrial aluminum casting and steel fabrication is managed by company’s subsidiary, PT WIKA Industri & Konstruksi. Company has 96.5% ownership in PT WIKA Industri & Konstruksi.33%

13.2%

4.4%


The construction services business was performed based on the contracts earned through a tender process. The contract value mostly depended on the price of materials, fees, equipments and subcontractor required in the project. wika divided the construction services into two types of works, civil construction and building construction. The civil construction focused on the construction of public infrastructures, whilst the building construction concentrated on the construction of residential buildings and public facility buildings.

Construction services successfully earned new contracts in 2013 with a total value of USD741.65 million, or increased 1.12% compared to new contracts in 2012 which was USD733.54 million.

From those contracts, construction services successfully earned total net income by USD417.9 million, or 26.03% higher than 2012 which was USD331.58 million. Such improvement was mainly due to the increase of work completion percentage

construction

417.90

16.69

NET iNCOME

iNCOME aTTRiBUTaBLE TO PaRENT ENTiTY OwNER

USD

USD

million

million

1. Jati Gede Dam, Sumedang, West Java2. Runway Sepinggan Airport, Balikpapan, East Kalimantan3. MRT Project, Jakarta

1 2


in 2013 compared to 2012. The main contribution derived from civil construction. it also gave influences to the increase of cost of sales and operating expenses in construction service by 25.84% from USD317.31 million in 2012 to USD399.70 million.

Likewise, the construction services recorded a total profit of USD19.35 million from Joint Ventures or 48.59% higher than that of in 2012 which was USD13.03 million. Therefore, total Operating income earned was 37.56 million, or increased 37.50% from 2012 which was USD27.30 million.

However, the decrease of Other income by 238.27% from 2012 which was USD2.45 million became negative USD8.29 million caused a decrease in total income attributable to Parent Entity Owner by 15.34% from USD19.71 million in 2012 to USD16.69 million.

741.65

Construction services

successfully earned new contracts in 2013 with a total value of

million

USD

3


WIKA’s mechanical and electrical business comprised of:1. Engineering, Procurement and Construction

(EPC) services for the construction of facilities, factories, and related supporting infrastructures to various industries, such as oil and gas, coal, mining, palm oil, bio-fuel, fertilizer, cement, and pharmacy;

2. EPC services for the construction of power plants;

3. installation, operation and maintenance (O&M) services for power plants and industrial equipments;

4. Production of steel fabrications; and

5. investment and operation in power plants.

Throughout 2013, mechanical and electrical business segment showed a good performance. Below is the performance of wika’s mechanical and electrical business in 2013.

Total new contracts in the electrical mechanical in 2013 was USD365.90 million, increased 8.72% from 2012 which was USD336.37 million.

Total sales which was USD261.14 million in 2012, declined to USD240.46 million in 2013. EPC projects for oil and gas facility as well as power plant gave the biggest contribution to such total sales. Likewise, the cost of sales and operating expenses went down by 10.10% to USD224.14 million from that of in 2012 which was USD249.32 million.

mechanicalelectrical

240.46

6.95iNCOME aTTRiBUTaBLE TO PaRENT ENTiTY OwNER

USD

USD

million

million

NET iNCOME

1


Total new contracts in the electrical mechanical in 2013 was USD365.90 million, increased

8.72 %from 2012 which was USD336.37 million.

From Joint Ventures, the electrical and mechanical business segment also recorded total profit of USD2.06 million, or decreased by 35.17% compared to USD249.32 million in 2012. Total operating income of the electrical mechanical also increased 22.45% from USD15 million in 2012 to USD18.33 million in 2013. after calculating other income and tax, total income attributable to Parent Entity declined by 24.84%, from USD9.25 million in 2012 to USD6.95 million in 2013.

1. Borang Gas Power Plant 60 MW, South Sumatera

2. LPG Station Bosowa, Makassar, South Sulawesi

3. Alumina ICA, Tayan, West Kalimantan

4. Pesanggaran Diesel Power Plant 50 MW, Bali

2

3

4 5


INDUSTRY

“Throughout 2013, precast concrete industry recorded a remarkable performance, significantly increased from last year.”

245.31


USD

USD

million

million

NET iNCOME

2

1


Throughout 2013, precast concrete industry recorded a remarkable performance, significantly increased from last year.

Precast concrete business segment recorded total contract of USD245.30 million in 2013, or increased 14.03% from 2012 which was USD214.95 million.

in term of net income, precast concrete business recorded an increase by 27.84% from USD191.89 million in 2012 to USD245.31 million in 2013. increasing demand of precast concrete in the market was the main contribution for such increase. in addition to the net income, total Cost of Sales and Operating Expenses also increased by 24.86% from USD174.37 million in 2012 to USD217.72 million in 2013. Likewise, total operating income went up by 52.52% from USD17.52 million in 2012 to USD27.59 million in 2013. accordingly, total income attributable to Parent Entity Owner was USD15.77 million or increased 80.18% from USD8.75 million in 2012.

Precast concrete business segment recorded total contract of

245.30

214.95

in 2013, or increased 14.03% from 2012 which was

million

USD

USD

million

1, Concrete Factory Non Rotate, Karawang

2. WIKA Beton Factory Karawang, West Java

3. Pile Assembling Activities at WIKA Beton Factory Cibinong, West Java

3


Real estate business segment recorded total new contracts of USD101.73 million in 2013, or decreased 14.99% from 2012 which was USD119.78 million.

Total net income was USD92.83 million in 2013 or an increase by 34.38% from USD69.08 million in 2012. Due to the increase in net income, total Cost of Sales and Operating Expenses of this business segment also increased by 32.38% from USD59.54 million in 2012 to USD78.83 million in 2013.

Likewise, total net income caused an increase in operating income by 46.83% from USD9.54 million in 2012 to USD14 million in 2013. accordingly, total income attributable to Parent Entity Owner increased 43.10% from USD4.42 million in 2012 to USD6.32 million.

real estate

92.83


USD

USD

million

million

NET iNCOME

1


Total net income was USD92.83 million in 2013 or an increase by

34.38 from USD69.08 million in 2012.

%

1. Jivva Condotel, Bali

2. The Hive Tamansari, Jakarta

3. La Grande Merdeka Tamansari, Bandung2

3


mining

The mining business segment is engaged in the asphalt mining. it is managed by PT Sarana karma (acquired by wika in late 2013) which is located on the island of Buton (Pulau Buton). Pulau Buton is known to have 677 million metric tons of natural asphalt deposit.

wika is building a plantation that can produce 50 thousand metric tons of asphalt per year and it is expected to start producing in 2015. The asphalt will be used as a material for wika’s road construction projects or can be sold to other parties. By optimizing the asphalt production from Pulau Buton, the mining business segment had strengthened wika’s revenue supported with Saka’s wide domestic and foreign distribution channel.

9.05


USD

USD

million

million

NET iNCOME

1

in 2013, this segment has recorded another good performance. Total net income in 2013 was USD9.05 million or an increase by 23.82% from USD7.31 million in 2012. Due to the increase in net income, total Cost of Sales and Operating Expenses of this business segment also increased by 28.91%, from USD5.29 million in 2012 to USD6.83 million in 2013.

Similarly, total income attributable to Parent Entity Owner from mining business segment increased 41.57% from USD1.49 million in 2012 to USD2.11million.


In 2013, this segment has recorded another good performance. Total net income in 2013 was USD9.05 million or an increase by 23.82% from USD7.31 million in 2012.

1. Asphalt Mining Activity

2. Asphalt Exporting Activity

3. Asphalt Exporting Activity

2 3

9.05USD

million


good corporategovernance

To comply with the applicable law and regulation (obligation and voluntary).

WIKA’s perspective toward GCG is a basic foundation to create a good business ethics to be a Good Corporate Citizen and to create a company’s sustainability.

GGCGCG GCC

GOOD CORPORATEGOVERNANCE

To establish a better ‘internal control’ management especially in effectively handling business risks through suitable risk management.

GOOD CORPORATECITIZEN

GOOD GOVERNED CORPORATION

WIKA’S NEXT miSSion

WIKA has committed to implement GCG properly. The implementation form is performed through the arrangement of GCG Road Map for WIKA. The purpose of this GCG Road Map is to serve a long-term guidelines of WIKA in applying the GCG’s implementation strategy and to have an illustration of such implementation strategy. It also enables WIKA to monitor the development of GCG practice in the future.

Related to WIKA relationship with other parties, GCG Road Map shall provide a

clear guidance to relevant parties concerning GCG implementation. The Road Map which is created by the National Committee of GCG’s Policies consists of the following steps:1. Good Corporate Governance,2. Good Governed Corporation, and3. Good Corporate Citizen

WIKA has been successful in achieving the implementation of GCG and GGC, and further developing our corporate foundation to reach our next goal of Good Corporate Citizen (GCC).

To attain a position as an ethical and responsible company, also known as good corporate citizen.


wika as a public company which has professional management always attempts to implement its operational activities are in line with the regulations. The implementation of GCG is the reflection of compliance toward the regulation of Ministry of State Owned Enterprises No. Per-01/MBU/2011. wika’s perspective toward GCG is a basic foundation to create a good business ethics to be a Good Corporate Citizen and to create a company’s sustainability.

Thus, the objectives of GCG implementation are as follows:1. Optimizing the Company value, to create

competitiveness, both nationally and internationally, so as to maintain its existence, and sustainability to achieve the corporate aims and objectives.

2. Providing certainty and benefits to the stakeholders of wika Creating the balance of interests from all stakeholders which is based on the Company’s values.

3. Building a positive corporate image. Reinforcing the limitations associated with ethical business.

Generally, the positive impacts of GCG implementation are elaborated into 4 (four) outlines:1. People – generating competent human

resources and ability to adapt GCG values.

2. Profit – profit optimizing by the Company to reach solid growth

3. Planet – contributing significantly to the environment and community empowerment.

4. Industry – contributing significantly to the industry in which wika runs its business.

MEASUREMENT OF GCG’S PERFORMANCEOn a regular basis, wika has conducted the measurement of GCG implementation since 2006. Through these measurement process, wika intends to:1. Examine and assess the GCG implementation

at wika through the elaboration of GCG implementation conditions and comparison to the indicators and parameters of the assessment.

2. Provide an overview of the measurement results through the scoring on the GCG aplication including recommended improvements to minimize the gap between the level of practice with the indicators and testing parameters.

3. Monitor consistency of application of the GCG at wika’s organizational environment; and obtain inputs for refinement and development of GCG policies.

4. Encourage more professional, transparent and efficient of wika operation, empower the function and improve the company’s organs independence.

WIKA has committed to perform all of its business and operational activities in accordance with the sustainability development framework, including the usage and conservation of nature, as well as human resources.

gooD corporate governance


INTERNAL CONTROL

in order to supervise and control the business units, wika has established internal Control Unit (SPi), responsible for providing reports and accountability to the President Director. SPi also reports the results of its investigation to the Board of Commissioners.

Monitoring form of internal control performed by SPi was intended to give assurance to the top management that all systems, procedures, rules, and norms, which should have been performed properly, have run correctly so that it will improve the reliability of financial information, the efficiency and effectiveness of Company’s operational activities, and the compliance of prevailing laws and regulations.

internal control function can help the Company reach Good Corporate Governance (GCG), which is realized by applying the principles of transparency, accountability, responsibility, independence, and fairness.

RISK MANAGEMENT

Corporate risks should be well managed based on the principle of prudence to ensure a healthy and sustainable business growth. Risk management in the work unit is intended to create main focus on managing risks throughout the Company’s business processes. Based on the impact of risk, the probability level of risks in each work unit may be extensive, and projection of future business in accordance with the Company’s vision and mission, thereby risks may potentially occur in different aspects of the business. Some risks may relate to the Company’s strategic transactions, and some may relate to the operational aspects of the business (eg. payment issue, high production cost, etc).

with an objective to achieve the most appropriate system to eliminate or reduce the occurrence of risks, an evaluation to the company’s risk management system effectiveness was conducted in 2013. wika scored 3.51 out of 5, which means that common processes and databases are applied within business units, however require the business needs to conduct more trainings or routine monitoring on the implementations.

Final result wiKa enterprise risk management maturity Level assessment > 3.51 out of 5.00

initial (very little or no compliance with the criteria. organization supports the need but no standard processes exist).

integrated (opportunities are sought to improve process and application through lessons learned capture and application. a risk culture is evident.)

repeatable (management support the intent but practices are inconsistent or left to the individual).

Defined (common processes & databases are applied within business units/divisions. no training or routine monitoring).

managed (consistent application across all company activities vertically & horizontally)


SuMMARy VALuATION REPORT/EVALuATION OF GOOD CORPORATE GOVERNANCE IMPLEMENTATION IN 2013

gooD corporate governance

implementation of Good Corporate Governance in SOEs. The decree is the manifestation of a form of implementation of the Regulation of the State Minister for State Owned Enterprises No.PER-01/MBU/2011 on the application of Good Corporate Governance. Under the new rules, there are some differences in the assessment, the assessment criteria where the old assessment indicators are used only 50 to 160 parameters while the new assessment criteria consist of 153 indicators covering aspects of the sub-indicators or also-called as the Compliance Test factor (FUk) as much as 568 FUk. From the difference in the valuation benchmark, with the same conditions will decrease by 15-20 % assessment results when performed using the new criteria.

in 2014, the Company assessed the implementation of good corporate governance practices for the year 2013 based on the method set out in the assessment GCG Sk-16/S.MBU/2012 on indicators / parameters assessment and Evaluation of the implementation of Good Corporate Governance in SOEs. implementation assessment in 2013 conducted by the Financial and Development Supervisory agency (BPkP) as an independent assessor. achievement grades (scores) of the Company in 2013 amounted to 86.076 with the qualifying “good”, as shown in the table below:

no. aspect/indicator/parameter weight

2013 achievementDescription

Score achievement (%)

i commitment to continuous gcg implementation 7,000 4,984 70 pretty good

ii Shareholders and gmS/capital owner 9,000 8,310 92 very good

iii Board of commissioners/Supervisory Board 35,000 33,815 95 very good

iv Directors 35,000 31,019 86 very good

v information disclosure and transparency 9,000 7,948 83 very good

vi other aspect 0,000 0,000 good

86,076 good

GCG scores converted in accordance with SK-16/S.MBU/2012source : internal simulation

2007 2008 2009 2010 2011 2013

81,83 86,20 86,97 89,34 86,076

20

40

60

80

100

85,56

COMPARATION OF GCG WIKA ASSESSMENT SCORE RESuLT 2007-2013


CORPORATE SOCIAL RESPONSIBILITy

wika continuously tries to grow and develop in order to achieve improvements in all aspects of its business. in doing this, the company is supported by its corporate social responsibility (CSR) framework. wika believes that through sustainable activities, a harmonized growth in economic, society and environmental can be achieved.

wika has committed to perform all of its business and operational activities in accordance with the sustainability development framework, including the usage and conservation of nature, as well as human resources.

Such commitments are outlined under the 4 foundations of wika CSR activities framework, in which the company develops and implements various programs which will assist in the development of nature resources, human resources, education and quality of living.

SOME ExAMPLES OFTHE CSR ACTIVITIES

Economic responsibility - 1.310 Mitra Binaan in Riau, Sumsel, Lampung,

Jakarta, Banten, JaBar, JaTim, dan D.i.Y

Environmental responsibility- Environment friendly buildings - waste Management- Recycling of used papers- Plantation of 205.955 trees between 2012 to

2013 Social Responsibility- Education - Renovation of classrooms- Scholarship funding

CORPORATESOCIALRESPONSIBILITY

1 1 2


corporate SociaL reSponSiBiLity

WIKA believes that through sustainable activities, a harmonized growth in economic, society and environmental can be achieved.

1. Environmental Responsibility: Joint Planting of 45,000 trees in sengon, Bogor

2. Social and Community Development: Village Empowerment workshop in Gadog, West Java

3. Corporate Social Responsibility on Employment, Health and Safety: Scholarship granting ceremony

4. Product and Consumer Responsibility: Inauguration of 2 (two) new classrooms in SMP Al-Mashum Mardiah.

3 4

Labour practices

human right

community involvement & Development

the environment

Fair operating practicescorporate governance

consumer issues

PEOPLE

PROFIT

PLANETHEALTHEN

VIRONMENTEDUCATIO

NEM

POW

ERMENT

COM

MUNITY


quality security safety health environment

WIKA’S POLICy FOR ThE QUALITy CONTROL, RISK AND SAFETy MANAGEMENT SySTEM

wika has developed an integrated policy covering the management system of Quality Control, Risk and Safety within PT wijaya karya (Persero), Tbk. Such policy is issued by the top management to its employees so that every individual in the company can continuously develop and perform their jobs productively, in order to support their business units, as well as the entire wika companies in achieving the work objectives.

Customers as stipulated by this policy include not only those who usewika’s services, but also include anyone who has connections to wika. This needs to always be reviewed by the top management periodically.

WIKAqSSHE POLICy

The wika QSSHE Policy has been made separated from other policies in order to emphasize wika’s solid commitment that was issued by the top management to its employees, that is to avoid work related accident and illness, and to avoid environment pollution in accordance with each line of work. This Policy is inline with wika’s objectives of zero accident, efficient use of resources, and prevention of environment incident.

1


qUaLity SecUrity SaFety heaLth environment

WIKA’s policies are distributed by the top management to its employees in order to support work productivity with zero accident, efficient use of resources and prevention of environmental incident.

1. Safety Morning Talk, Jati Gede Dam, Sumedang, West Java

2. Safety Morning Talk, Eastwest Motorway Project-Algeria

3. Gymnastics Taiso, Palm Oil Refinery Complex Project, Kota Barum, South Kalimantan

4. Safety Talk - Baburaja Persimpangan Road, Brunei Darussalam

2

3 4


AWARDSand certification

30 Oktober 2013Info Bank Award 2013, Kategori Industri Non Keuangan yang berpredikat sangat Bagus atas kinerja keuangan

INFO BANK AWARD 2013

MNC BuSINESS AWARD

BERITA SATu AWARDS

SICS AWARD 2013 GCG AWARD 2013IMA CEO 2013

KORAN SINDO AWARD

30 August 2013Koran Sindo Award 2013, Indonesia Top 50

28 August 2013MNC Business Award 2013, The Best Emiten Real Estate & Construction Sector Construction Industry

10 Juni 2013BeritaSatu.com, Website Terbaik Kategori Komunikasi

24 April 2013SUCOFINDO – SICSO AWARD, The Best Implementation of Integrated Management System SCIS Award 2013

16 Desember 2013Good Corporate Governance Award 2013: Indonesia Trusted Company

26 February 2013Indonesia Most Admired (IMA) CEO 2013, Performing Construction CEO


awarDS anD certiFication

CERTIFICATE: OhSAS18001:2007

11 September 2009OHSAS 18001:2007 – Occupational Health and Safety Management System-Requirements, Sucofindo International Certification Services

CERTIFICATE: SNI ISO 9001:2008 CERTIFICATE: ISO 14001:2004

CERTIFICATE: ISO 9001:2000

OCCuPATIONAL SAFETy AND HEALTH MANAGEMENT SySTEM


11 September 2009SNI ISO 9001:2008 – Quality Management Systems Requirements, Sucofindo International Certification Services

March 28, 2008ISO 14001:2004 – Environmental Management System,PT Sucofindo

August 1, 2007Lloyd s Register Quality Assurance, ISO 9001:2000 – Quality Management System

3 Januari 2003Occupational Safety and Health Management System – Occupational Safety and Health Management System certificate in Steel Fabrication Shop at Cileungsi, Bogor. Minister of Manpower and Transmigration (Republic of Indonesia)

13 Agustus 2001ISO 9001 Certificate : 2000 – Quality Management System ISO 9001 : 2000 Firstly awarded to Indonesian Construction Company, Lloyd s Register Quality Assurance


1 Agustus 2004ISO 9001 Certificate : 2000 – Quality management System, Lloyd's Register Quality Assurance


board of directors

1 3

2

Bintang Perbowo, SE, MMPresiden Director

awarded as “Honored Member of Top 20 indonesia Most admired CEO 2011” from warta Ekonomi in 2011, he proves the existence of his career path. appointed as President Director of the Company in 2008, he had served his time as Finance Director of PT Pembangunan Perumahan (Persero) from 1999 to 2008 and also held other important positions in the same company. He earned his Bachelor Degree in Economics from krisnadwipayana University, Jakarta and Master Degree in international Management from Prasetya Mulya Business School, Jakarta. He attended several prestigious trainings both locally and internationally, among others are “Overview Fraud awareness Program in 2012”, “Top Management SOE Refreshment Seminar with a title of ‘Capturing and Creating Opportunities’ in 2012, and “indonesia-China infrastructure Consultation Forum in 2011”.

Ir. Bambang Pramujo, MTOperation Director IIAct. Operation Director III

Since 2013, he is appointed as Director of Operation ii of the Company and as President Commissioner of PT wika Rekayasa konstruksi. Most of his career and experience were spent in the Company. He started as a Team Leader of PT wijaya karya DSU (1984). From 2005 up to 2013, he was assigned as the General Manager in various working units, among others: EPC Department, Energy Department, Utility Department, and industrial Plant Department. He was also the President Commissioner of PT Marga Nujyasumo agung (MNa) and the Commissioner of PT wika insan Pertiwi. He is honored with award of 15 Years Satya karya (1999), 20 Years Satya karya (2004), and 25 Years Satya karya (2009). He earned his Bachelor Degree in Civil Engineering from Universitas Sebelas Maret, Surakarta, and his Master Degree in Civil Engineering from University of indonesia.

4 Ir. Destiawan Soewardjono, MBAOperation Director IV

He becomes the Director of Operation iV of the Company since June 2013 after served his duty as General Manager of Overseas Development Department. Most of his 25-year’ career and experiences were spent in the Company, starting from Engineering Staff, as Manager of Overseas Division, Project Manager of East west Motorway – aljazair. He earned “adi Prestasi” award in 1999 and “advice Receiving award” in 1998. He graduated from University of Brawijaya and earned his Bachelor Degree in Civil Engineering. He also holds Master Degree in Management from University of Gajah Mada, Yogyakarta.

Ir. Budi harto, MMOperation Director I

He has been holding a position as Director of Operational i since 2008. He earned his Master’s Degree in industrial Psychology from the University of Tujuh Belas agustus, Surabaya in 2002, and Master of Management from Gadjah Mada University, Yogyakarta in 1997. He obtained Bachelor’s Degree majored in Civil Engineering from the University of Sebelas Maret, Surakarta in 1983. Previous positions include: Commissioner in PT wika intrade from 2008 to 2009, General Manager of General Public Civil in 2008, General Manager of Operation 1 from 2006 to 2007, He has been holding a position of President Commissioner of PT wika Beton as well as several importantpositions in the Company and Subsidiaries since 1984.


1 2

3 4 5 6

5 Drs. Adji Firmantoro, MMFinance Director

He serves as Director of Finance of the Company and as President Commissioner of PT wika industri & konstruksi since april 2013 until present. But his journey with wika began when he started as Staff of Planning Bureau (1984), Staff of Budget (1984- 1986), Head of Finance Department in industrial Equipments Division (1986-1987), Head of Finance Department in Trading Division (1987), Head of Finance administration (1988-1989), Head of Finance Department (1989-1990), Head of Fund and Banking Department (1992-1993), Manager of Planning and Business Evaluation (1994-1997), Manager of Fund Sourcing (1997- 1999), Manager of Finance in wika Beton (2000-2002), (at interim) Company’s Corporate Secretary (2002-2011), Director of Finance of PT wika Beton (2002-2011), and Director of Finance of PT wika intrade (2011- 13). He earned his Bachelor Degree in Economics from University of Gajah Mada, Yogyakarta (1984), and his Master Degree from Sekolah Tinggi Manajemen PPM in Jakarta.

6 Drs. Ganda Kusuma, MBAHuman Capital and Development Director

He serves his duty as Director of Human Capital and Business Development of the Company since april 2013 after had been appointed as Director of Finance. Formerly, he held several other important positions in the Company and its subsidiaries since 1986. He was also appointed as Vice President of Director PT Sinar wijaya Eka Prasista (JV wika and Duta Pertiwi) and the Company’s General Manager. He served as Commissioner of PT wika Realty as President Commissioner of PT wika Gedung from 2008 to 2009. He obtained Bachelor of Economics majoring in Management from islamic Nusantara University, Bandung and Master of Business administration from institute Management Newport indonesia.

BoarD oF DirectorS


humancapital

Continuous growth of wika brings consequences to the Company to perform human resources (HR) management as the Company’s asset (Human Capital). implementation of human capital management will certainly support the achievement of the Company’s vision of becoming the best Company in engineering, procurement, and construction or EPC as well as in investment in Southeast asia.

wika arranged the Human Capital management in accordance with the Company’s mission and vision, starting from organization design that is in line with the Company’s growth and appropriate human capital required for such growth. Employee recruitment was conducted based on the need of each working unit by considering its capacity and capability.

Competency and dignity-based management system was the option the Company has taken to achieve the need of the organization as well as the individual called “win-win solution”.

To prepare for the development of employees, the Company’s attention to the perceived the need for the development of employees through coaching results in the context of assessment and evaluation of hard competency that gave rise training needed which conform operational conditions. in addition, the Company establishes the composition of the hard competency, soft competency and managerial competency in accordance with the level positions carried. For staffing levels, hard comptency portion is larger soft competency and managerial competency.

Wikasatrian, Gadog - Bogor

hUman capitaL


Shareholders 2009 2010 2011 2012 2013

government 68,42% 68,42% 66,65% 66,37% 65,15%

employee 3,14% 2,98% 3,03% 2,02% 1,60%

public

Foreign investors 1,20% 1,78% 11,97% 14,38% 14,45%

Local investors 27,24% 26,82% 18,35% 17,23% 18,80%

SHAREHOLDERS COMPOSITION

stockinformation

in 2013, wika maintained 65.15% of its shares being owned by the Government of indonesia. The rest of the shares are owned by public (foreign as well as domestic) including its employees, with the following composition; 14.45% of shares are owned by foreign investors, 18.8% of shares are owned by domestic investors, and 1.60% of shares are owned by its employees.

wika is committed to the stakeholders by continuously innovating in order to achieve a better performance in all aspects. innovation is one the important values of the company as it believes that it will play a big part in determining the sustainability of the company. wika strives in keeping its commitment, maintaining balance,

Basic information

Stock exchange listing : indonesia Stock Exchangeindustry : Engineering & Construction

ServicesStock Code (Reuters) : wika.JkTrading unit : ShareMarket Capital (as of 31 Dec 2013) : iDR9,701,149,440,000Number of shareholders : 6.139.968.00

StocK inFormation

creating a good relationship with counterparts, developing synergy, keeping integrity, and giving the best outcomes possible.

with these values, wika believes that it will maintain the satisfaction and confidence of its stakeholders.


stock performanceand shareholders structure

SHAREHOLDERS STRuCTuRE

STOCK PERFORMANCE

65,15%government

18,80%public (local)

14,45%public (foreign)

1,60%employees

total outstanding shares as December 31, 2013: 6.139.968.000

2007 2008 2009 2010 2011 2012 2013

PT Wijaya Karya (Persero) Tbk.Head OfficeJl. D.I. Panjaitan Kav. 9Jakarta 13340, IndonesiaP. +62 21 819 2808 +62 21 850 8640 +62 21 850 8650F. +62 21 819 1235e. [email protected]. www.wika.co.id

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