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.



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.


The Company expects that all employees uphold the Company’s established code of conduct to:

grey dot  Instill company values that are consistent with global standards;

grey dot  Improve accountability and transparency on an ongoing basis;

grey dot  Consistently comply with all rules and regulations.


Based on the Code of Conduct, the employees are expected to:

grey dot  Avoid giving or receiving gifts to or from other parties;

grey dot  Avoid activities that may create a conflict of interest with the position and the person’s job;

grey dot  Protect sensitive information held by the Company.


Representing the Company’s stated regulations, the Code of Conduct shall be upheld by all employees without exception. The principles of good corporate governance that reflect transparency, accountability, responsibility, independence and fairness, are practiced as part of the Company’s commitment. In addition, the Code of Conduct is designed to uphold the rights of all stakeholders equally. The Code of Conduct also contains the values that serve as a guide for the Management Team, Board of Directors, Board of Commissioners and all the employees in realising the tasks and responsibilities of daily life. This extends to interactions with employees, shareholders, suppliers and other local officials.


Dissemination of the Code of Conduct


The Company disseminates the Code of Conduct to all employees at the beginning of every year. Each employee is required to sign a statement that they have read and understood the contents of the Code of Conduct, and receive sanctions if they violate these guidelines.


Implementation of the Code of Conduct
The Company will take disciplinary actions which may include dismissals if an employee is found in violation of the Code of Conduct. This is in accordance with the prerequisites set forth in the Company Regulations.


Corporate Culture


As an organisation, the Company has established a corporate culture that enforce ethical business practices. It is applied in order to provide guidance on the establishment and the actions of all employees as they carry out their duties and responsibilities. In an effort to ensure its application to be effective, the Company strives that it is deeply rooted in all employees, including management.


The concepts underlying the corporate culture which is promulgated by the Company are:


The Company believes that employees with high integrity understand that synergies among all elements within the Company are critical to delivering the best services to the stakeholders.


The Company asks its leaders to prioritise human resources management in its leadership. The Company believes that leadership can be attained via effort and hard work so that they can meet the expectations of all stakeholders.



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.