Page 8 - KRA Annual Report 2020

KRA ANNUAL REPORT Management
2020 Report

Utilities, and consumable good. In the part cost, the expansion of salvaging to non-HD components,
expansion of salvaging on non-metal parts and expansion of cooperation with the Komatsu Group to
accelerate salvaging research. In the process, parts were moved from the vendor to the In-House Machining
with a more efficient process and better quality, so the cost can be reduced. For consumable-good, the effort
for more competitive sourcing has been carried out by prioritizing quality as well as tight control for the
consumption level. By above several improvement activities, KRA can achieve the target cost reduction 2.7%
(as SVC ratio), significantly increase compare to previous year.

In FY2020, KRA recorded better achievement of warranty claim amount compared to previous year.
Achievement of claim amount was 0,45% (maximum claim amount target : 0,45%). KRA has set up several
activities to response those claims by conducting coordination with related PIC in the company, customer, and
KLTD as well. To maintain customer trust, the company conducted response-time monitoring and ensured
that warranty claim process will be completed within 30 days.

Company continue to improve quality service to achieve operational excellent to all aspect such as create
Task Force Team among Principal, Company, Distribution & Customer in order to increase Life Time
Component Cycle (LCC). Some strategy were taken to maintain the sales & market share by conducting
extended Lifetime Warranty Project, enhancing new reman menu by optima product to align with customer
need, reviewing core sufficiency and selective for core investment. The Company also continues the
construction project to integrate the Mulawarman Plant & Balikpapan Plant to increase productivity .

Despite facing quite tough challenges in 2020, the Company was still able to maintain a good performance.
The achievement of sales in 2020 was USD 32.9 Million or 36.3% compared to 2019. The decreasing of sales
occurred as impact of coal price declining & Covid-19 that forced customer to do cost reduction. Net Profit
after tax during the period of 2020 was decreased 67.2% compared to previous year. It was USD 4.0 Million
or equal to 12.1% from total sales. Meanwhile the net profit after tax during the period of 2019 was USD 12.4
Million or equal to 13.3% from total sales.

The Implementation of Good Corporate Governance (GCG) has become an inseparable part of the
operational activities of KRA. The Company believes that GCG will improve the efficiency, effectiveness, and
business continuity to provide a sustainable contribution and added value to shareholders, employees and
other stakeholders both in the short-term and long-term. The Board of Directors has been adequately
supervised and advised by the Board of Commissioners through the committees according to its roles and
responsibilities. Furthermore, the Company also ensures that all Company business processes comply with
external and internal regulations at all times.

Safety, Health & work environment are important factors in maintaining productivity and operational
sustainability of the company. Therefore, the company is very committed and continues to strive to carry out
activities that support the implementation of safe, healthy work processes and a clean and comfortable
environment. Risk assessment is carried out for every business process carried out by the company to
minimize potential risks in order to create green processes, green products, green employees. This year,
company strive to keep maintain Zero accident and continue strengthen implementation Environment
Management System ISO 14001:2015 by URS certification. the company continue to implement Beyond
Compliance Program to comply government regulation such as Energy Efficiency by continue installation
inverter to reduce electricity consumption, Reducing Plastic Waste by Reuse Plastic, Water conservation by
reducing deep-well consumption, developing Waste Water Treatment Plant that activities lead the company to
get prestigious PROPERDA Gold result from government.

the company continue to implement Beyond Compliance Program to comply government regulation such as
Energy Efficiency by continue installation inverter to reduce electricity consumption, Reducing Plastic Waste
by Reuse Plastic, Water conservation by reducing deep well consumption, developing Waste Water
Treatment Plant that activities lead the company to get prestigious PROPERDA Gold result from government.

Company also always strives to be a socially responsible company and environmentally friendly. The
company believe corporate social responsibility is a key to be sustainable in the business. KRA implement

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