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Message from the President Commissioner

Dear Honorable Shareholders and Stakeholders,

The Board of Commissioners of PT AKR Corporindo Tbk. would like to start this report by humbly offering gratitude to God Almighty for His mercy and grace. This report conveys the execution of the Board of Commissioners’ duties and responsibilities for the fiscal year 2017 ending December 31, 2017.

Economic Conditions

During 2017, the global economic conditions started to show signs of improvement. Prices of commodities that had slumped previously, started to increase, and at the same time, the economies of developed countries were also experiencing positive growth again.

In line with improving global economic growth, Indonesia's economy, although relatively limited, was also showing positive growth. Indonesia's economic growth in 2017 reached 5.07%, higher than the previous year's 5.02%. In addition, the government was able to control inflation at a fairly low level, and maintain the stability of the Rupiah against the US Dollar.

Board of Directors’ Performance Appraisal

The Company performed relatively well in 2017, with almost all of the Company's financial indicators growing positively during the year. Similarly, from the operational aspects, the Company was strengthening the foundations to achieve sustainable growth.

In 2017, the Company booked revenue growth of 20% reaching Rp18,288 billion. This was achieved thanks to growth in all business segments, including industrial estate, which is also expected to support our future growth.

Meanwhile, net income for the period attributable to equity holders of the parent entity increased by 19% to Rp1,202 billion. We believe that a number of strategic initiatives taken by the Board of Directors in 2017 will further strengthen the Company’s business foundation to grow sustainably.

The Board of Commissioners supports the steps taken by the Board of Directors to divest the Company’s subsidiaries located in China. This is in line with the Company’s vision to become a major player in the field of logistics service provider and procurement solution for chemicals and energy in Indonesia, given the potential market in Indonesia is still very large. In addition, the creation of a joint venture between the Company and British Petroleum was also a significant step for the Company, establishing the Company as one of leading players in the petroleum business in the country.

The Board of Commissioners also approved the steps taken by the Board of Directors to strengthen financially through the issuance of bonds, and to strengthen the human capital and technology through reorganization. This is in line with the changes in the Company's business portfolio, to prepare for investments into the areas with the strongest competitive advantage, and attractive return, while st ill keeping in mind our core competencies in logistics.

The Board of Commissioners gives its high appreciation to the Board of Directors and all their staff for the good performance. The Board of Commissioners believes that the performance and strategic steps taken by the Board of Directors throughout 2017 will lead the Company to realizing its vision and mission.

Nevertheless, the Board of Commissioners continues to remind the Board of Directors to continue conducting its business development by prioritizing prudent principles and complying with all applicable laws and regulations.

Strategy Implementation Supervision

The Board of Commissioners’ main function is to supervise the management of the company run by the Board of Directors. In 2017, the Board of Commissioners performed this function by actively supervising the implementation of strategies set by the Board of Directors.

The Board of Commissioners periodically reviews the Company’s performance, and requests explanations from the Board of Directors on the business progress, and the steps that have been, and will be taken, during the joint Board of Commissioners and Board of Directors meetings. To that end, during 2017, 6 joint meetings were held.

In addition, the Audit Committee, as a body below the Board of Commissioners, also actively monitors and reviews the Company's operational activities. The Audit Committee coordinates directly with the Internal Audit and Risk Management Divisions regarding the operations and the risk factors faced by the Company.


To achieve the Company’s objectives, the Board of Commissioners provides opinions and advice to the Board of Directors regarding the implementation of the strategies to achieve the Company's business development targets. The Board of Commissioners reviews the Company’s performance and strategic plans, taking into consideration the recommendations given by the Committees below the Board of Commissioner.

During 2017, the key points of advice given by the Board of Commissioners were:

  1. To improve the role and function of Internal Audit and Risk Management, in order to understand the operational results and mitigation efforts that must be undertaken by the Company.
  2. To improve the transparency and accountability principles in the Company in order to continue gaining trust from stakeholders.
  3. To seek out new opportunities that are in line with the Company's core business.

 Business Prospects Outlook

The Indonesian economy in 2018 is expected to be better than in 2017, and this will support the business development plans prepared by the Company. The Board of Commissioners has approved the targets set by the Board of Directors together with the Board of Commissioners and has stated that the targets are realistic and achievable.

In chemical distribution and trading, the Company will continue to reinforce its leadership by strengthening the distribution of goods through adoption of technology. Hence, we expect customer’s confidence and satisfaction to increase as technology brings more accuracy and certainty in distribution system.

In petroleum business, the Company is to enter a new phase with the AKR-BP joint venture operations, that will further strengthen the Company’s position in the non-subsidized gasoline business and aviation business JV with Air BP that will support AKR to enter aviation fuel market in Indonesia. The Company will also have additional revenue from distribution of the lubricant business for industry and commercial as part of our agreement with BP.

The expansion of 100,000 cbm of storage tanks for petrol and biofuel at PT Jakarta Tank Terminal (JTT), a subsidiary of the Company, to total capacity of 350,000 cbm are also expected to support growth in petroleum business.

JIIPE will also contribute more to the Company in line with the completion of several supporting facilities in the estate. The additional supporting facilities will also increase investors’ interest in the JIIPE.

2018 is also targeted as the completion year for the divestment of the Khalista, the sorbitol manufacturer, and Bumi Karunia Pertiwi in coal sector. The divestment proceeds will be used to support the Company's ongoing business development  in Indonesia, which are expected to provide better returns in the future.

Corporate Governance Principles Assessment

Implementation of good corporate governance principles continues to make significant progress. The Company strives to improve the quality of the GCG principles by perfecting all Company bodies through GCG implementation management.

The Board of Commissioners appreciates the efforts of the Board of Directors in making GCG as a cornerstone of the Company's operations. The Company continues to improve the implementation and enforcement of GCG values in order to provide a strong foundation for sustainable growth in the future.

Good governance at the operational level is crucial to achieve targets in the medium dan long term. Therefore, the Board of Commissioners always supports every effort and step by the Board of Directors to make improvements in GCG to ensure the Company is managed in a fair, transparent and accountable manner.

Committees Below the Board of Commissioners Performance Assessment

In performing its duties and functions and responsibilities, the Board of Commissioners is assisted by Committees under its supervision which comprised of, the Audit Committee, and the Nomination and Remuneration Committee, chaired by Independent Commissioners. Throughout 2017, the Board of Commissioners believes that the Committees have performed their duties and responsibilities well by providing a number of opinions to the Board of Commissioners, including:

Audit Committee

The Audit Committee provided input and recommendations to the Board of Commissioners based on the results of its reviews, including:

  1. Review and suggestion on the appointment of a Public Accounting Firm
  2. Proposed quality improvements to the Company's internal control system
  3. Improvements to the whistleblowing system

Nomination and Remuneration Committee

During 2017, the Nomination and Remuneration Committee undertook the following actions:

  1. Provided recommendations regarding the remuneration for the Board of Commissioners and the Board of Directorsto be submitted to the GMS.
  2. Provided recommendations to the Board of Commissioners concerning the remuneration structure policy

The Board of Commissioners gives its high appreciation for the performance from the Committees below the Board of Commissioners. Implementation of the work program, as well as the functions of each Committee, will encourage the application of good governance standards in every activity of the Company.

Board of Commissioners’ Composition Changes

In 2017 the Company’s Board of Commissioners composition did not change, and for fiscal year 2017 was still in line with theAGMS resolution dated May 5, 2015, namely:

President Commissioner : Soegiarto Adikoesoemo

Commissioner : Mahendra Siregar

Independent Commissioner : I Nyoman Mastra


The good performance in 2017 could not have been achieved without the hard work, dedication, commitment and contributions from the Board of Directors, the management and all employees, and of course, the trust and full support from all shareholders and other stakeholders. Therefore, on this occasion, on behalf of the Board of Commissioners, we extend our gratitude and deepest appreciation to all parties.

Finally, we hope that the achievements of this year will encourage us to try harder in 2018 and hopefully the Company can pass any business challenges faced by the Company .



Soegiarto Adikoesoemo
President Commissioner