Business Activity

Company’s Operation

Under the Regulation of the Financial Services Authority No. 29/POJK.05/2014 concerning Financing Company Financing, the Company aligns its business through the amendment of the Company's Articles of Association. In Article 3 the aims and objectives of the Company are:

  • Investment Financing
  • Working Capital Financing
  • Multi-Use Financing

Investment Financing

Investment Financing is the financing for the procurement of capital goods and services necessary for business/investment activities, rehabilitation, modernization, expansion or relocation of place of business/investment given to the debtor in more than 2 (two) years.
Investment Financing is done by:

  • Leasing Financing
  • Sell and Lease
  • Factoring with Receivables from Receivable Sellers
  • Purchase by Payments In installments
  • Project Financing

Working Capital Financing

Working Capital Financing is the financing to meet the needs of expenditures that run out in a cycle of business activities of the debtor and is a financing with a period of maximum 2 (two) years.
Working Capital Financing is done by:

  • Sale and Lease Back
  • Factoring with Receivables from Receivable Sellers
  • Factoring Without Guarantee from Receivable Seller
  • Business Capital Facility

Multi-Use Financing

Multi-Use Financing is the financing for the procurement of goods and/or services required by the debtor for consumption/consumption and not for business purposes (productive activity) within the agreed timeframe.
Multipurpose financing is done by:

  • Leasing Financing
  • Purchase by Payments In installments
  • Other financing after obtaining approval from the Financial Services Authority first.

Business Performance Analysis

Assets

The Company experienced a decrease in total assets of 8.42% in 2018, ie from Rp. 83.80 billion in 2018 to Rp. 76.75 billion in 2017. This decrease mainly occurred due to a decrease in the placement of investment securities available for sale of Rp. . 7.25 billion (16.09%) from Rp. 45.12 billion in 2017 to Rp. 37.87 billion in 2018 and consumer financing receivables of Rp. 1.77 billion (11.55%) from Rp. 15.36 billion in 2017 to Rp. 13.58 billion in 2018.

The details and percentage of assets of the Company as of December 31, 2018 and December 31, 2017 as follows:

Liabilities

Total liabilities in 2018 decreased by 6.35% (Rp. 72.71 million) compared to the position at the end of 2017. This decline occurred mainly due to a decrease in Deferred Tax Liabilities of Rp 143.52 million (63.59%), namely from in 2017 amounting to Rp 255.97 million to Rp 82.18 million in 2018.

Equity

The Company's total equity in 2017 increased The total equity of the Company in 2018 decreased by 8.45% or Rp 6.98 billion which was to Rp 75.68 billion from Rp 82.66 billion in 2017, this was due to a decrease in Comprehensive profit of Rp. 13.93 billion in 2017 to Rp. 5.30 billion in 2018 (down 61.96%)

Revenues

The Company's revenue comes from factoring and consumer financing, administration income, provision income, fine income, bank interest income and other income.

As of December 31, 2018, total revenue was recorded at Rp 5.70 billion, down by (55.12%) compared to the previous year as of December 31, 2017, which was Rp 12.70 billion. The decrease in income was due to the sale of securities (83.62%) from Rp. 8.70 billion to Rp. 1.43 billion.

Expenses

The Company's expenses are derived from labor, allowance for impairment losses, general and administrative, post-employment benefits, and other expenses. As of December 31, 2018, the Company recorded a total expenses of Rp 3,98 billion, down by 2,33% compared to December 31, 2017, which amounted to Rp 3,87 billion. The increase in total expenses was mainly due to labor, general and administration of 9,64% from Rp 3,63 billion to Rp 3,98 billion.

Comprehensive Profit (Loss)

The Company's total comprehensive income for the year ended December 31, 2018 amounted to (Rp. 6.98) billion, a decrease of 130.76% compared to the year ended December 31, 2017 which amounted to Rp.22.69 billion. The decrease in comprehensive income was due to a decrease in value of available investment securities for sale (not yet realized) of Rp. 22.68 billion (-161,71%).

Cash Flow

Cash flow analysis for operating activities in finance companies is different from other companies in general, where negative value or excessive use of cash, especially for new financing shows the ability of the finance company to obtain new financing. In other words, the greater the use of cash from operating activities, especially on new financing reflects the better growth of the company. The details of the Company's cash flows in 2018 and 2017 can be seen in the table:

Net Cash Obtained from Operating Activities

Net cash obtained from operating activities is Rp. 2.30 billion and (Rp. 9.42 billion) for the year ended December 31, 2018 and 2017. The decrease in net cash obtained from operating activities that occurred on December 31, 2017 compared to December 31, 2016 was Rp. 11.72 billion or equal to 124.47% mainly due to a decrease in financing.

Net Cash Used for Investment Activities

Net cash used for investment activities is Rp. 106 million and (Rp. 9.15 billion) for the years ended December 31, 2018 and 2017. Net cash used in investing activities mainly for investments in the purchase and / or sale of available-for-sale securities amounting to Rp 3.83 billion and Rp. 3.8 billion in the year ended December 31, 2018. The increase in net cash used in investment activities that occurred on December 31, 2018 was 101.17%.

Primary Financial Ratio

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The Ability Of The Payments Of Loans

The company always monitors the cash flow projections and the availability of funds to pay off short-term liabilities. The company does not have bank loans or other long-term liabilities.

Collectability Level

The details of the age of consumer financing receivables in 2018 and 2017 are as follows:

Capital Structure and Management Policy on Capital Structure

The Company's capital still uses its own capital, which is derived from paid up capital and retained earnings. The stock capital which was issued and paid-up in 2018 was Rp 33,8 billion.

Realized Capital Goods Investment

Capital goods investment carried out by the Company throughout 2018 is carried out to support operational activities. These capital goods investments include infrastructure, equipment, office furniture, and computers. The value reaches Rp132 million.

Target and Realization of Fiscal Year and the Next Target of Fiscal Year

In the midst of the ongoing economic slowdown the impact on the achievement of the financing target channeled by the Company in 2018. Financing channeled only reached 74% of the planned target, or reached Rp 33,382 bilion from Rp 46,157 miliar. For 2019, the Company targets total financing to reach Rp 42 bilion, or grow by 41% from the realization or achievement of financing in 2018.

Informations and Material Facts Which Occurred After the Date of Accountant Report

There is no material information and facts that occur after the date of the accountant's report for fiscal year 2018.

Marketing Aspect

Marketing

Marketing activities play an important role, both to expand business activities and to maintain market share in the finance industry. The marketing department continues to improve the collaboration with dealers and strategic financing partners to increase financing.

The Company's marketing focuses on providing services and fostering good relationships to business partners, whether banks, financial institutions and other creditors, insurance, dealers and consumers.

Relationship with the Bank

The Company maintains a sustainable relationship with the bank, although there is currently no cooperation with the bank in terms of funding. Good cooperation with the bank facilitates the Company in doing both transaction with the dealers and consumers.

Relationship with Consumers

In order to maintain business continuity, the Company continuously improves customer service starting from the time of credit application until the end of consumer obligation to the Company.

Credit application is processed easily, quickly and safely without leaving the principle of prudence. The Company also provides several installment payment methods to facilitate the consumer. Consumers can ensure that after credit repayment, BPKB can be obtained immediately. In addition, the Company also offers competitive interest.

Relationship with Insurance Company

The Company requires the insurance of the object being financed to minimize the risk. Therefore, the Company maintains good relationswith a credible, national-scale Insurance Company that provides good service to its custom ers and provides a good commitment to the Company in executing its business strategy.