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Good Corporate Governance

 

Basic Implementation of Corporate Governance

As a public company listed on the Indonesia StockExchange (IDX), the implementation of the Good Corporate Governance (GCG) of the Company is based on the rules and regulations in force in Indonesia. However, the implementation of GCG is not only aimed at meeting applicable regulations and regulations, but also seeks to place GCG as the main foundation in conducting business, and is used as a principle in order to maintain the Company's existence in facing challenges and business development, especially in the aluminum industry. Therefore, the Company is committed to applying the principles of transparency, fairness, accountability, independence and accountability in all operational activities.

Corporate Governance Structure

The corporate governance structure includes several important aspects that play a role in strengthening the control and management functions of the company, which consists of the main organs namely the General Meeting of Shareholders (SGM), the Board of Commissioners and Directors, and supporting organs which include the Corporate Secretary, Audit Committee and Internal Audit Unit.

The Company encourages a reasonable relationship between the Company's Organs in the effective implementation of Good Corporate Governance, by carrying out its functions in accordance with the provisions of the Articles of Association and the prevailing laws and regulations based on the principle of independence in carrying out functions and roles for the interests of the Company and mutual respect for duties and responsibilities each.

The code of ethics is used as a reference for every person in the company to interact with stakeholders and fellow company people to maintain and grow the profile, image and reputation of the company by requiring all company people to carry out their business activities based on morals that can indirectly maximize value for shareholders. The Code of Ethics is formulated with a spirit of honesty, responsibility, mutual trust, openness and cooperation in every business activity that covers all aspects relating to individuals, companies, industries and society.

The code of conduct is regularly socialized throughout all parts of the Company, and all new employees will work to sign this Code and will be re signed as a sign of approval for each year.

The Code of Ethics also applies to the Board of Commissioners and Directors in connection with all activities on behalf of the company. Every level of the organization (including the Board of Commissioners and Directors) understands that if a 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 objective of the Code of Conduct.

CORPORATE VALUES
To create a better future for all stakeholders and develop together to serve the community and nation through business development.

Compliance with Laws, Regulations and Regulations
It is expected that every employee will obey the laws, rules and regulations of the country and become law-abiding citizens to ensure that law-abiding corporations.

Creating Clean and Green Businesses and Products
The best companies must take responsibility for society and the larger community. By creating a clean and green business and product, the Company will be able to serve the community in the long run with its true purpose.

Loyalty, Capability, Hard Work and Discipline
From the pillars of success and achievement. Every member of the organization must maintain its integrity and be prepared to work hard and smart for the mutual benefit of both the Company and individuals. Organizational behavior must be carried out by means of military discipline but the approach remains humane.

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.5.338.627.000 and Rp.1.503.939.000 for 2019.

The company's activities are always faced with risks that are closely related to its function of creating value for stakeholders. The rapid development of the external and internal environment causes business risks to become increasingly complex. The creation of GCG is inseparable from the application of risk management, because through the formal, structured and integrated application of risk management is able to give the Company strength to adapt to the business environment. Some risks faced by the company include:

  1. Risk of Availability of Main Equipment and Facilities.
    In order to fulfill product demand from consumers, which demands speed in the production process, accuracy in delivery and fulfillment of output in accordance with installed capacity, the occurrence of disruption or damage to equipment and main facilities can hamper the production process. Therefore, the Company through the relevant departments ensures that the main equipment and facilities are in top condition by carrying out periodic maintenance, timely replacement of spare parts, rejuvenation of main equipment and controlling stock of spare parts.
  2. Risk of Availability and Quality of Raw Materials.
    To meet the availability of quality raw materials in accordance with what is needed in the production process are two vital things that are interrelated in order to avoid the risk of stopping the production process. For this reason, mitigation is carried out by controlling the stock of the main raw materials that originate from 4 suppliers accompanied by a minimum long-term purchase contract for 1 year for each supplier and ensuring the conformity of the composition of the raw materials ordered by conducting Incoming Inspections.
  3. Financial Risks
    The Company has debt with several banks, both debt in the form of investment credit or working capital and also a Letter of Credit (LC) for the purchase of imported raw materials in foreign currencies at different rates. For this reason, the Company seeks to minimize its exposure to foreign exchange differences by conducting a Trust Receipt (TR) using the Rupiah value which has reached 80% of total purchases using the LC Import facility

Whistle Blowing System (WBS) is a means of communication to report actions related to violations or suspected violations, both against the law, the code of ethics and/or conflicts of interest committed by internal company parties. WBS hopes are expected to be able to overcome the limitations of the internal control system and provide a guarantee of early detection of violations that occur.

Submission of Violation Reports
Submission of violation reports is done in 2 ways, namely directly and indirectly. Directly by reporting directly to the Personnel, Security, Supervisors and Plant Managers. Indirectly, reporting through other means such as suggestion boxes, e-mails, telephone and mobile phones.


Protection for Reporters
The Company will guarantee the security of the reporter and the reporter receives recognition and appreciation from the Company in the form of a thank-you note from management and records the condition of the employee concerned with a separate assessment.


Handling and the Party Managing Complaints
Every complaint or disclosure of reporting is carried out by a team of WBS administrators formed by the Board of Directors to conduct audits, record and correct corrective actions and impose sanctions on the reported party. It is also mandatory to be communicated with the local Police if there are found cases of suspected serious and certain violations.

Incoming and Processed Complaints in 2019
In 2019, no complaints or reports were received and handled by the Company.

Social and environmental responsibility (Corporate Social Responsibility - CSR) is the Company's commitment to participate in sustainable economic development in order to improve the quality of life and the environment that is beneficial, both for the Company itself, the local community and society in general by considering the expectations of stakeholders, in line with established laws and norms of behavior as well as integrated with the organization as a whole. The cost of implementing CSR in the Company is carried out centrally by the Group amounting to Rp.2,524,517,788,- with the Company's contribution of Rp.343,184,292 for 2019.

Living environment
The Company is committed to complying with laws and other requirements related to environmental management, preventing environmental pollution, striving for energy and natural resource efficiency and environmental empowerment, including:

  • The use of more environmentally friendly natural gas for the smelting and heating production process, with the impact of lower pollution levels. With Regenerative Burner technology, the heat wasted from the chimney can be recovered to help the combustion process by 20%.
  • Get a blue rating for evaluating waste management correctly, in accordance with the provisions and quality standards required under the laws of the Ministry of Environment and Forestry.
  • Examining waste water samples, ambient air samples and air emissions regularly which are used as routine UKL-UPL evaluation reports.

Employment

  • In 2018, the Company signed a Collective Labor Agreement between the Directors and the Management Unit of the SPSI Work Unit to strengthen the relationship between the Company and employees with a validity period until 2020 and has been registered with the East Java Province Manpower and Transmigration Office
  • The employee turnover rate in 2019 is 0.37% with 3 main reasons, namely retirement, compensation and family.
  • The Company guarantees that the health of all employees, spouses and their children is included in the Indonesian government's health program through the Social Security Administration Agency.
  • Employee remuneration is provided in the form of salaries, annual bonuses, THR, gratuities and in kind. For permanent employees, in-kind granting is carried out in conjunction with THR granting and is given based on length of service with a separate nominal calculation.
  • The rate of work accidents is 0.8% in 2019 with the most cases on the way to work.
  • The Company conducts routine reporting every 3 months to the Head of the Manpower Office of Sidoarjo Regency for Occupational Safety and Health Activities. The activities or training carried out are fire fighting exercises, evacuation drills, first aid training (First Aid for Accidents), PPE (Personal Protective Equipment) and Chemical Handling.
  • Providing opportunities for employees to attend training or seminars conducted by other parties or held by the Company itself. The training that was attended or organized by the Company included training on Cost Reduction Tooling, Aluminum Heat Treatment, Waste Water Pollution Control and AEO (Authorized Economic Operator) socialization.
  • Certified employees who have expertise in operating certain equipment or machinery such as forklifts and lifting taps.
  • The mechanism for complaints of labor problems is contained in the Grievance Procedure that can be submitted in writing to the direct supervisor or through a suggestion box. Within 5 working days will be followed up with a meeting of Personnel and employees themselves. Furthermore, there will be a meeting with the Factory Manager, if the results of the decisions in the meeting have not yet reached an agreement, will be followed by a meeting with SPSI. Detailed records will be carried out for the follow-up actions that have been carried out including investigations, solutions, implementation and deadlines for completion.

Social and Community

  • Donated donations to orphans from 39 orphanages in Surabaya and Madura totaling 2,700 children.
  • Donations in the form of building materials and funds for renovation of 2 government-owned buildings, 2 religious foundations and 2 school buildings.
  • Donations of building materials and funds to accelerate the construction of rehabilitation and reconstruction after the earthquake in Lombok, West Nusa Tenggara.
  • Organize routine blood donations, so as to get an award as one of thee best voluntaryy blood donor drivee companies.
  • Facilitating homecoming together with Eid al-Fitr free for employees and family members totaling 1,375 people with 27 bus fleets.

Product Responsibility

The focal point of responsibility to consumers related to aluminum product sales transactions conducted by the Company is to ensure that the product is sold to the applicable composition and manufacturing standards, in accordance with the specifications of the desires of consumers and does not adversely affect consumers' health.

Technical
The Company works closely with consumers even before work goes on to ensure that consumers' desires in ideas and designs can be fulfilled. For the accuracy of each work the Company uses AutoCAD technology

Dies Manufacturing
The Company's product development team is able to help consumers to design special dies that can improve the quality of the products produced, one of which is by using a new Vertical CNC machine capable of making specifications and a high level of tolerance. In addition, the Company also uses CNC machines such as CNC Wire Cut and CNC EDM to produce precise dies.

Extrusion Division
The extrusion division provides standard and special extrusion facilities. Automatic and sophisticated measuring equipment is also used with the ability to accurately profile dimensions up to 0.001mm. With a level of precision like this will give consumers the quality they need.

Fabrication Division
This division has received certificates from TUV and Kite Mark for various ladder series. TUV and Kite Mark are safety standards for foot support products made of metal for household needs.

Surface Finishing
Company is a PVDF wet paint certified applicator produced by PPG and Valspar to comply with the required quality assurance and AAMA specifications in the painting process. This high-quality paint comes with a 10-15 year warranty, both for standard and special colors, and ensures long-lasting durability for interior or exterior use. In addition to wet paint, PT INAI is also a certified powder coating applicator produced by leading suppliers, such as Akzo Noble, Jotun and Dupont.

Establishing Relationships with Customers
During 2019, the Company has endeavored to make several efforts to maintain good relations while at the same time realizing the Company's social environmental responsibility to customers. The measures implemented include:

  1. Buyer Gathering: Friendly activities with customers that end with the awarding of gifts and prizes.
  2. Loyalty Program: Giving special discounts for customers who have reached a certain tonnage purchase value according to the contract required.
  3. Plant Visit: The activity invites customers to directly see the Company's production process.

Measurement of customer satisfaction
The Company conducts customer satisfaction surveys periodically to determine the level of customer satisfaction as part of the process to improve service and especially the quality of products received by customers. Based on the results of the 2019 survey, the value of the level of customer satisfaction is on a scale of 3.7 as evidence of an increase from 2018 on a scale of 3.4 with 2 main points being improved namely product quality and packaging procedures.

Consumer Complaints
The Company provides access to customers to submit complaints or other matters relating to products and services through direct marketing staff, telephone, email, fax or the Company's website. During 2019 the number of claims received was 0.30% of total shipments during the year. All claims, 100% have been resolved properly by the relevant department.

 

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