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Good Corporate Governance

 

The ethical code or internal code of conduct serves as a tangible form of corporate culture so that companies act ethically and in accordance with applicable laws apply when the daily operational activities runs wherever and whenever. This code explains the standards that need to be adhered to in carrying out company values, as well as certain relevant laws, regulations and policies. All permanent employees or contract employees have an obligation to follow the code of conduct and comply with all company policies and procedures. The code of conduct also applies to the Board of Commissioners and Board of Directors in connection with all activities on behalf of the company. By knowing and complying with the code of conduct, the Company play a role in maintaining and subsequently building trust with various stakeholders, including colleagues, customers, business partners, 
shareholders and the community. The code of conduct encourages employees to :
1.   Increase accountability , transparency and compliance with applicable laws and regulations.
2.   Perform tasks with a high level of professionalism and integrity.
3.   Avoid activities that can create a conflict of interest with his work
4.   Protect the Company’s information, both during work and after no longer working in the Company. 

The code of conduct is routinely socialized throughout all parts of the Company, and all new employees will work to sign this code of conduct. Every level of the organization (including the Board of Commissioners and Directors) understands that if violation occurs, the Company will take disciplinary action including termination of employment. In addition, the code of conduct is also regularly reviewed and updated to ensure its alignment with the aim of supporting the good corporate governance.

In accordance with the Articles of Association, the honorarium of the Board of Directors and Board of Commissioners is determined at the Annual SGM. Furthermore, the SGM authorizes the Board of Commissioners to determine the amount and distribution of the honorarium among members of the Board of Directors and Board of Commissioners. The amount of remuneration for each member is determined according to the function and competencies of each member through indicators of remuneration determination. The total remuneration received by the Board of Directors and Board of Commissioners each are Rp.4,135,000,000 and Rp.1,369,641,000 for 2018.

Every potential risk possessed by the Company is the responsibility of the Board of Directors to identify and ensure that each of these risks can be dealt with effectively. With assistance from Internal Audit, the Board of Directors evaluates and updates risk maps in every aspect of business activities. Although facing various risks that must always be faced, the Company pays special attention to several risks, including:

Business Risk. In order to fulfill consumer demand, which requires management to pay special attention to the production and packaging of products 
for export, during 2018 the Company procured many new machines that could help support the production process in terms of speed, accuracy of delivery and fulfillment of output accordingly with installed capacity. In addition to maintaining product quality to arrive at customers well, a good packaging process is needed. To support this, the Company has made improvements in this process, by purchasing a packaging machine with a capacity of 2000 units/hour. 

Financial Risk. The company has debts in several banks, both in the form of investment loans or working capital loans and also Letter of Credit (L/C) for the purchase of imported raw materials in different currencies. In 2018 there are fluctuations in the exchange rate of the Rupiah against foreign currencies, which are at risk in the foreign differential cost of the interest and loans of the company. Therefore, the Company seeks to minimize exposure to foreign exchange differences by conducting Trust Receipt (TR) using the value of Rupiah on import L/C.

Raw Material Supply Risk. To fulfill the availability of raw materials on time before being used for the production process, the Company does not depend on only one supplier. Fostering good relationship accompanied by communication and coordination that is synergy from both parties, is able to minimize errors and delays in the supply of these raw materials.

The Whistle Blowing System (WBS) is prepared as a reference in the procedures for managing complaints handling or disclosure of violations for the Board of Commissioners, the Board of Directors, employees and other parties interested in dealing with the Company, so that each report submitted is kept confidential and accountable for follow up. The application of the WBS is expected to be able to overcome the limitations of the internal control system, be able to provide guarantees and conduct early detection of violations that may occur within the Company. 
Two ways to submit reports of violations are direct and indirect. Directly can be done by reporting to Personnel, Security, Supervisor or Plant Manager. Or Indirectly use a suggestion box or other means of communication such as telephone, mobile phone and company email. The Company guarantees security of reporters. Every report or disclosure of the report is carried out by a team of WBS administrators formed by the Board of Directors to conduct audits, recording and corrective actions and imposing sanctions on the reporter. In 2018 there were no complaints or reports that were entered and handled by the Company.

Corporate Social Responsibility (CSR) is a business approach by contributing to sustainable development by providing economic, social and environmental benefits to all stakeholders. Social responsibility is a business commitment to act ethically, operate legally and contribute to improving the quality of life for employees and society. The Company is committed to implementing good CSR with various programs it has.  

Living Environment.
The use of natural gas that is more environmentally friendly for smelting and heating production processes with the impact of lower pollution levels.  
The Company gets a “blue rating” for the assessment of waste management correctly, in accordance with the provisions and quality standards required under the laws of the Ministry of Environment and Forestry.  

Employment
In 2018, the Company signed a Collective Labor Agreement between the Directors and the SPSI Work Unit Management to strengthen the relationship between the Company and employees. The Company ensures that the health of all employees, partners and their children is included in the Indonesian government’s health program through the Social Security Organizing Agency. The Company ensures a workplace that is free from work accidents. Therefore, the Company prioritizes work safety for all employees by requiring the use of protective equipment while working and always complying with the work safety regulations of the Company to minimize workplace accidents that can occur. 

Social and Community
Holding a social service program for contract surgery and mass circumcision, in collaboration with one of the social foundation in Surabaya. Providing products donations for the renovation of one of the public service facility buildings in Surabaya. Mobilize employees to participate in providing assistance to earthquake victims in Lombok. Holding a routine blood donor, so that it was awarded as one of the voluntary blood donor driving companies. Facilitate free of charges homecoming for employees and family members on Idul Fitri moment. 

Product Responsibility
The Company has a responsibility that the products produced are in accordance with industry standards and specifications of consumers that do not adversely affect safety and health and have added value to consumers. The Company always provides services and cooperates with distributors for local products in handling complaints and claims from consumers.

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