CODES OF CONDUCT
Every employee of the Company must comply with applicable laws and regulations. The corporate standards of ethics are also built upon this principle.
Conflicts of Interest
Every employee of the Company must acknowledege that the Company’s interest comes first. Therefore, any conduct,whether personal, on behalf of the Company, or in relation to other parties, must not compromise or jeopardize the interest of the Company
Insider Trading and Exploitation of Opportunities
Every employee of the Company who, by virtue of chance or authority, obtains access to confidential information is prohibited from using or distributing that information for gaining financial profit through stock trade or any other types of activity. Furthermore, an employee of the Company is prohibited from using any asset, information or one’s position in the Company for improper personal gains, or to be in competition with the Company, whether directly or indirectly.
Fair Competition and Working Relationship
Every employee of the Company must compete in a fairly manner and commit themselves into developing a fair relationship with all parties.
Discrimination and Abuse
Every employee of the Company is prohibited from practicing discriminatory treatment toward anyone or any other party on the basis of ethnicity, religion, race and social class. The Company also does not tolerate physical or psychological abuse in any form within the Company.
Health and Safety
Every employee of the Company holds the responsibility of maintaining a safe and healthy working environment. This responsibility is fulfilled by consistently complying with all applicable health and safety regulations and standards in accordance with internal regulations as well as prevailing laws.
Use of Proper Accounting Practices
The Company requires that all data recording and reporting activities are carried out in a proper and accurate manner in order to support a reliable business decision-making process. This practice encompasses the implementation of ethical standards for employees, proper accounting practices, and the preparation of reports in an accurate, timely and comprehensible manner.
Trade Secrets and Confidentiality
Every employee of the Company is prohibited from disclosing, duplicating, keeping or using confidential information regarding the Company for personal gains or for the benefit of another party other than the Company without prior written consent from the Company. The information can include formulas, designs, images, blueprints, specifications, processes, equipment, researches, or any other forms of information. Furthermore, an employee is also prohibited from disclosing information related to the Company’s products, financial state, or any other information, except as determined necessary in carrying out one’s respective duties and responsibilities.
CHARTER OF BOD & BOC
Board of Commissioners Charter
In carrying its duties, the Board of Commissioners has the Board of Commissioners Charter which lays out the duties, responsibilities, powers, membership criteria, and work guidelines of every member.
Implementation of the Function of the Board of Commissioners
The Board of Commissioners comprises members with special expertise, including in the fields of law, finance, or any other aspects of business. The Company’s Board of Commissioners is also supported by two permanent committees in carrying its duties, namely the Audit Committee and the Nomination and Remuneration Committee. Furthermore, the Board of Commissioners can also acquire the counsel and services of professional consultants or advisors.
Board of Commissioners Membership Dismissal Policies
The GMS can temporarily dismiss a member of the Board of Commissioners if that member has acted in violation of the Company’s Articles of Association, or if there is an indication that the member has carried out actions that undermine the Company, neglected the respective member’s duties and obligations, or if the Company has other compelling reasons to dismiss that member. A member of the Board of Commissioners is also required to resign if that respective member has been proven to have been involved in a financial crime and/or has received a legally-binding decision over a financial crime.
Duties, Responsibilities and Powers of the Board of Commissioners
The Board of Commissioners in its function acts as a collective body. The duties, powers and responsibilities of the Board of Commissioners based on the Board of Commissioners Charter are as follows:
- Controlling all management activities carried out by the Board of Directors, including in activities of planning and development, operations and budgeting, compliance to the Company’s Articles of Association, and implementation of the mandates and resolutions of the GMS.
- The Board of Commissioners is not authorized to operate or manage the Company, except in situations where all members of the Board of Directors have been temporarily dismissed for one reason or another.
- Providing counsel and opinion to the annual GMS with regard to corporate financial reports, development plans, appointment of external auditors, and any other important and strategic decisions related to the Company’s corporate actions.
- Carrying out evaluations of corporate work plans and budgets; monitoring the Company’s development; coordinating with the Board of Directors upon signs that the Company is in tribulation so that the Board of Directors can immediately inform the shareholders; and providing recommendations with regard to solutions and steps for improvement.
- Ensuring that the Company implements and maintains Good Corporate Governance practices.
The Board of Directors Charter
The Board of Directors is formed and carries out duties based on the Board of Directors Charter which in its drafting draws reference from the relevant regulations, and also based on the management needs of the Company.
Duties, Responsibilities and Powers of the Board of Directors
A brief description of the duties, powers and responsibilities of the Company’s Board of Directors as stipulated in the Board of Directors Charter are as follows:
- Leading, managing and running the Company in accordance with the Company’s purpose.
- Securing, managing and developing the Company’s assets.
- Continously better-improving the Company’s efficiency in carrying out business activities.
- In performing the aforementioned duties; preparing corporate development plans, the Company’s long-term strategic plans, the Company’s annual budget, and other plans related to the Company’s activities.
- Implementing Good Corporate Governance principles throughout all aspects of the Company.
- Implementing an effective internal control system in order to secure the Company’s investments and assets.
Membership Criteria and Composition
The basic criteria of a candidate for membership and the membership compositon of the Company’s Board of Directors refer to Financial Services Authority Regulation No. 33/POJK.04/2014. Based on this regulation and having considered the conditions of the Company and the diversity of skills, knowledge and experience needed, the Company currently has three directors and one officer of comparable duties to a director.
Policy on Financial Crime
In ensuring that the management of the Company’s wealth is carried out accountably and responsibly, the Board of Directors Charter stipulates that a member of the Board of Directors who has been proven to be involved in a financial crime and/or has received a legally-binding decision over a financialcrime is required to resign from the board.
As a manufacturing company engaged in the ceramics industry, the Company has identified various risks that are inherent to the Company’s finances and operations. In view of this, the Company has implemented short-term management measures as well as prepared calculated long-term strategies in managing potential negative impacts. The risks include:
The Company anticipates risks related to market dynamics and the increasingly fierce competition in the ceramics industry by focusing on strengthening the Company’s product portfolio and supply chain efficiency. The two main strategies carried out by the Company in this regard include:
- The Company is committed to continuously carrying out product innovation efforts so that consumers can obtain ceramic products with unique and superior design and quality.
- The Company’s expansion strategies, in addition to having marketing effectivity as a factor for consideration, also take into account the variables of logistical cost and distribution cost. As such, each factory has been built in a location adjacent to available markets, and strategic for facilitating future expansion efforts. Through this strategy, the production cost can be minimized and the products can be more competitive.
Raw Materials Price and Availability Risk
The ceramics industry in Indonesia is exposed to certain vulnerabilities with regard to the price and availability of imported raw materials – and consequently also vulnerable to the exchange rate fluctuation of foreign currencies. The risk becomes a factor that can abruptly affect production costs. The Company resolves this by as much as possible utilizing local suppliers for production.
Another risk component is related to natural gas which is the main energy source for the ceramics industry. The certainty of natural gas availability, a reasonable purchasing price for natural gas, and government policies that arefavorable to the ceramics industry are the main requirements for the ceramics industry to be able to grow optimally.
The Company through, among others, the membership in the Indonesian Ceramics Industry Association (Asosiasi Aneka Industri Keramik Indonesia/ ASAKI), continues to urge the government to create a favorable business climate for the local ceramics industry through incentives related to tax andthe price of natural gas, the acceleration of infrastructure development, orthrough other policies under its authority.
Foreign Currency Exchange Rate Risk
The Company carries out the effort to mitigate the financial risks related to the exchange rate fluctuation of foreign currencies by as much as possible conducting payments using internal funds, payments are partially or wholly in advance, setting a fixed exchange rate, and conducting full repayment within a term of less than a year or accelerating full repayment in cases where external financing using foreign currency is needed.
Interest Rate Risk
To minimize financial risks brought upon by the fluctuation of interest rates, it has become the Company’s priority to accelerate the settlement of debts, and to utilize internal funds in financing development projects, investing in machinery and equipment, or in financing other main projects.