To sustain the long-term benefits of GCG implementation, the Management has positioned GCG as a standard that underpins all management and operational activities. This demands absolute commitment from all elements in the Company to upholding these principles with integrity. The Company has established a comprehensive framework of supporting instruments for GCG implementation that include the Code of Conduct, Corporate Policies and Standard Operating Procedures (SOPs). The Code of Conduct serves as the basic guideline for all organs and individuals in the Company with regard to actions and behavior that conform to the corporate values and culture as well as universal business ethics. The entire framework serves as a reference for all employees in the performance of their duties, authorities and responsibilities in accordance with their functions, thus ensuring that the objectives of the Company’s GCG implementation are achieved.


The instruments above are designed to support the Company’s adherence to the universal good governance principles, which include transparency, accountability, independence, responsibilities and fairness. The Company’s commitment to the implementation of each principle is expressed as follows:



This principle is carried out in the decision-making process and in the presentation of accurate and relevant material information to the shareholders and stakeholders.



The Company implements this principle in determining the function and responsibility of each organ to ensure effective business management. Every organ and employee of the Company must therefore refer to the business ethics and the agreed code of conduct.



The Company operates the business with respect to the principles of prudence as part of its professionalism, and in compliance with corporate policies and prevailing rules and regulations, without interference from any party and avoiding any potential conflict of interests.



The Company manages the business independently. As such, all organs of the Company carry out their respective functions and duties in accordance with the Company’s Articles of Association and the prevailing rules while avoiding conflicts of interest, in order to ensure objectivity in the decision-making process.



The Company embodies this principle by ensuring fairness and equality in fulfilling the rights of stakeholders in accordance with the respective agreement and the prevailing rules as well as corporate policies.





As part of its commitment to implementing GCG, the Company regularly reviews the policies and frameworks that support the application of GCG so that continuous improvements can be made. The Company also periodically carries out a comprehensive assessment of all aspects of GCG including business ethics, internal control, risk management and financial reporting. The Board of Commissioners, as part of its supervisory function, is responsible for:

grey dot   Monitoring the effectiveness of the implementation of GCG practices

     across all lines of business and making necessary adjustments; and

grey dot   Providing inputs and opinion regarding the implementation of GCG in the Company.



With reference to Financial Services Authority Regulation No.33/POJK.04/2014 dated December 8, 2014 concerning the Board of Directors and Board of Commissioners of Public Listed Companies, the Company has drawn up a Code of Conduct that applies to all members of the Board of Directors and Board of Commissioners as well as all the employees of the Company.


All employees of the Company are expected to uphold the Company’s code of conduct in order to:

grey dot  Embed the corporate values, which are consistent with global standards;

grey dot  Continuously improve accountability and transparency;

grey dot  Consistently comply with all prevailing rules and regulations.


The Code of Conduct requires employees to, among other matters:

grey dot  Avoid giving or receiving gifts to or from another party;

grey dot  Avoid activities that may create a conflict of interest with one’s position and work;

grey dot  Protect important information belonging to the Company.


The Code of Conduct represents the Company’s rules and must be upheld by all employees, without exception. The Company is committed to practicing the good corporate governance principles of transparency, accountability, responsibility, independence and fairness, and to upholding equal rights for all stakeholders. These values are reflected in the Code of Conduct, which serves as a guide for the Management Team, the Board of Directors, Board of Commissioners and all employees in performing their day-to-day duties and responsibilities and in their interactions with other employees, shareholders, suppliers and local officials.


Dissemination of the Code of Conduct


The Company disseminates the Code of Conduct to all employees at the beginning of each year. Every employee is required to sign a statement that they have read and understood the contents of the Code of Conduct and accept sanctions if they breach the Code.


Enforcement of the Code of Conduct


In the event of a breach of the Code of Conduct, the Company will take disciplinary action, which may include the termination of employment, in accordance with provisions in the Company Regulations.


Corporate Culture


As an organization that upholds ethical business practices, the Company has established a corporate culture to guide the attitudes and actions of all employees as they perform their duties and responsibilities. In order for the application of the corporate culture to be effective, the Company makes effort to ensure that it is internalized by all employees, including management. The Company’s corporate culture is based on the following concepts:


With high integrity, the Company believes that all members of the Company understand that synergy among all the elements of the Company is the key to delivering the best service to stakeholders.


The Company understands that leadership is earned, and the Company’s leaders are therefore expected to give leadership top priority in the management of the Company’s human resources so that they can meet the expectations of all its stakeholders.


Through the implementation of entrepreneurship, the Company can raise the enterprise value and standards of behavior of every member of the Company.



The Company has adopted a comprehensive risk management system to safeguard the achievement of the Company’s strategic objectives and ensure the sustainability of the Company’s business.


Evaluation of The Effectiveness of The Risk Management System


The Company conducts periodic and thorough evaluation of the various risk categories, while taking measures to implement appropriate and effective supervision and to anticipate the potential impact of emerging risks.


The Board of Directors, Management Team, Risk Management Committee and other relevant managerial positions and functions have primary responsibility for identifying, analyzing and managing risks. Nevertheless, the Company strongly believes that instilling a risk culture throughout the organization is important, and therefore, employees, stakeholders and business partners play a role in ensuring that the risks are anticipated, monitored and dealt with effectively.


The Company’s approach to risk management is defined in the Enterprise Risk Management Framework, which presents the objectives, strategy, organization and governance, methodology, monitoring and reporting process for risk management. The main components of the framework are:

grey dot  Identification of risks, including risk awareness, measurement, monitoring and control.

grey dot  Risk management infrastructure, including the organizational structure, governance system,

    data collection, analytical methods, policies, procedures and reporting.

grey dot  The Corporate Culture, including training, performance measurement, development of values and rewards.


With this framework, the Company is able to identify and proactively manage risks in a number of strategic areas.


The business risks identified in 2015 were as follows:


Credit Risk
Credit risk means risk of losses caused by failure to pay principal and/or interest on debt obligations. To mitigate these risks, the Company needs to take careful steps on the ability of analysis the Company’s financial, business projection of short-term and long-term as well as the development of the economic situation both domestically and overseas.


Liquidity Risk
The Company’s business may be exposed to liquidity risk if one entity fails to meet its obligations with cash or other financial assets. This risk is managed by maintaining cash and marketable securities at levels adequate to enable the company to operate normally, while closely monitoring cash flows and asset maturities as well as financial liabilities.


Foreign currency Risk
The Company’s business may be exposed to risks resulting from fluctuations in the value of financial instruments due to volatility in foreign exchange rates. In this case, the Company closely monitors foreign exchange movements so that it can take appropriate precautionary actions such as utilizing hedging mechanisms to mitigate the impact of the risks on the Company’s financial condition.


Investment Risk
Investment risk is the risk of potential losses due to under achievement of the investment against the expectation. Investment risk generally associated with increased of inflation rate and interest rate above the normal level, changes of regulations that negatively impact to the investment, and unstable economic condition. In order to mitigate the investment risk, the Company have taken the approach of having strategic implementation in various investment portfolios.


Risk Mitigation
In identifying risk factors, the Company’s risk management unit identifies a number of aspects that should be examined, ranging from the business strategy to market and political conditions as well as operational and financial conditions. The Company analyzes the risks against these indicators and parameters and systematically monitors them at every level of management. Once it has the results of the risk analysis, the Company makes risk management plans that must be implemented by every unit and subsidiary that is potentially exposed to the risk concerned.