TATA KELOLA PERUSAHAAN

The basic principles of Good Corporate Governance (GCG) emerged as a result of the relationship of three important pillars: the State and its instruments as regulators; the business world as a provider of goods and services as well as market participants; and the community as users of goods and services and as parties affected by excesses who can then show concern and exercise control objectively. The relationship between these three pillars is expected to create a conducive business and market situation and have a long-term, sustainable aspect.

In accordance with the General Guidelines of GCG, the Company implements the role of GCG through the principles of GCG commonly known as TARIF:

Transparency, or Transparency

The principle of disclosure of information from the Company that is easily accessed and understood by stakeholders. In addition to maintaining objectivity, transparency reveals not only the problems required by legislation, but also matters that are important for decision making by shareholders, creditors and other stakeholders.

Accountability, or Accountability

The principle of performance accountability is transparent and reasonable, with proper management, measurability and in accordance with the interests of the Company while taking into account the interests of shareholders and other stakeholders. The principle of accountability is a prerequisite needed to achieve sustainable performance.

Responsibility, or Responsibility

The principle carries responsibility, including in complying with laws and regulations and carrying out responsibilities to the community and the environment so that business sustainability can be maintained in the long run and recognized as a good corporate citizen.

Independence, or Independence

The principle of managing the Company independently so that each organ in its activities does not dominate each other and is not intervened by other parties.

Fairness, or Fairness and Equality

The principle in which in carrying out its activities, the Company must always pay attention to the interests of shareholders and other stakeholders based on the principle of fairness and equality; including equal opportunities in hiring employees, having a career and carrying out their duties in a professional manner regardless of ethnicity, religion, race, class, gender, and physical condition.
Considering the importance of GCG, the management commitment of all Boards and Directors has been carried out in the implementation of GCG. The Company’s commitment to implementing GCG instruments is not only to comply with regulations that apply in the business world, but is believed to be the key to success in achieving effective, efficient and sustainable business performance that is indispensable in winning market competition.
One form of strengthening the Company’s GCG is carried out through the functions of the Audit Committee, Internal Audit and Corporate Secretary, where this function is continuously being improved so that it can have a significant impact on the implementation of GCG and the wheels of the Company’s business activities. So far, the Company has committed to undertake a thorough study and audit to ensure an effective and integrated design in the Company’s financial statements. This report requires responsibility from the Company’s management for the creation, maintenance and evaluation of the effectiveness of disclosure procedures and controls to ensure the suitability of the information stated in the report through the Exchange Act and has been recorded, processed, summarized and reported in the time period available for later accumulation and communicated to the management of the Company; including the President Director and the Director in charge of Finance and Human Resources, for the purpose of making decisions related to the required disclosures. The Company also adheres to and complies with applicable regulations regarding the independence of members of the Audit Committee.

AUDIT COMMITTEE

In fulfilling the supervisory task, the Company’s Board of Commissioners has established an Audit Committee with respect to the Article of the Association and prevailing rules, such as the Regulation of Financial Service Authority (FSA) No. 55/POJK.04/2015 concerning Formation and Implementation Guidelines of Audit Committee Charter.

Audit Committee of the Company comprises of 3 (three) individuals, one of which acts as the Chairman of the Committee and two others are the members of Audit Committee. All members are professionals in their specialized fields and derived from the outside of the Company as well as have the accounting/financial qualification required by the Audit Committee of the Company.

 

Below is the structure of the Audit Committee members as of November 29, 2019:

Chairman : Sarastri Baskoro

Member : Hardi Montana

Member : Hendra Kustarjo

CODE OF ETHICS AND CODE OF CONDUCT

The Company has established Code of Ethics as a guidance for the Company and all employees of Tunas Group, including management and staffs, to conduct the duties and responsibilities with high integrity to realize the corporate vision and mission. The Company has

established Code of Conduct to enhance the relationship between the company and all its stakeholders. All individuals are obliged to obey all directives and regulations stipulated in the Code of Conduct. The management and employees who violate the regulations will be penalized in accordance to the prevailing rules and regulations.

The implementation of the Code of Conduct is expected to minimize the conflict of interest and to enhance the Company’s compliance of corporate policies and regulations.

The Company has been consistently communicating the Code of Conduct to its employees to ensure commitment by all parties.

 

Besides, consistent implementation of corporate values has developed the corporate culture that we uphold and strongly apply in all Company’s operational activities. The objective is to produce employees with high integrity, who respect the culture of delivering service excellence, of working proactively and of respecting other employees as well as the management.

 

The Company has also formulated the Code of Compliance in relation to the regulations through the GCG implementation. Compliance is an important aspect as the regulation requires the Company to act for the nation’s best interest.

CHRONOLOGY OF SHARE LISTING

In line with the business expansion, the Company has listed its shares on the Indonesia Stock Exchange (IDX) in May 1995 through an initial public offering against 30% of its issued capital. Jardine Motors Group (now Jardine Cycle & Carriage Ltd) acquired 25% of the Company’s stocks during the initial offering.

Further in 1997, Tunas Group conducted a stock split at ratio of 2:1, thus the Company’s stock value which was previously at Rp1,000 per stock to be split into Rp500 per stock. With the stock split, total outstanding shares rose to 186,000,000 (one hundred eighty six million) stocks during the corporate actions. In the same year, the Company distributed bonus shares with requirements that for every shareholder, which owned two stocks of the Company was entitled to earn one bonus share. The Company at the time distributed 93,000,000 (ninety three million) bonus shares, bringing a total of outstanding shares to 279,000,000 (two hundred seventy nine million) shares.

The Company re-launched the stock split in 2001 at a ratio of 5:1, from Rp500 per shares to be Rp100 per stock, bringing the total outstanding shares to 1,395,000,000 (one billion three hundred ninety five million) stocks. The Company conducted another stock split in 2010 at a ratio of 4:1, bringing down the Company’s stock value from Rp100 per stock to Rp25 per stock, thus bringing the total outstanding shares to 5,580,000,000 (five billion five hundred eighty million) stocks.

CHRONOLOGY OF OTHER SECURITIES LISTING

Up to the end of December 2018, PT Tunas Ridean Tbk has not listed other securities.

RISK MANAGEMENT

The scope of risk management implementation includes risk assessment and determination of mitigation steps for the Company and its subsidiaries.

Following the implementation of internal control in the organization, the Company has identified a number of risk potentials internally and externally, with significant impacts on the Company’s business continuity. Below are the significant risks:

Risk of Losing the Dealership Rights

The Company manages the risk of losing the operating rights as an automotive dealer by developing and maintaining a good relationship with the stakeholders.

Financial Risk

The Company is exposed to some interest rate volatility through the market impact on interest bearing assets and liabilities. Borrowings issued at floating rates expose the Company to cash flows interest rate risk. Borrowings issued at fixed rates expose the Company to fair value interest rate risk.

The Company performs regular reviews on the market development and act accordingly to manage such a risk. The Company manages its interest rate risk by using interest rate swap contracts, which convert loans from a floating interest rate to a fixed interest rate. If interest rates increase significanly, the Company may replace floating interest rate with long- term fixed rate facilities.

 

Risk of Regulatory Changes

The Company’s business can be exposed to changes in Government regulations concerning the automotive industry, such as the decreasing fuel subsidy and rising vehicle registration cost, vehicle tax, as well as down payment of loans, affecting the sales and profitability of the Company. The Company minimizes the risk through tight monitoring against the regulatory development and adapt to such changes to mitigate against this risk factor.

 

Risk of Rupiah Depreciation

The Company’s business can be exposed to the risk of weakening Rupiah exchange rate which may impact on the prices of the vehicle, as well as the sales volume. The Company believes that there will be government’s intervention to maintain the stability of the Rupiah exchange rate.

Risk of Natural Disaster

Natural disasters, particularly earthquake and tsunami, are beyond our control. However, the Company manages the risk by ensuring that the Business Continuity Plan is in place and by having a comprehensive insurance strategy.

In the future, the Company will continuously evaluate to improve the effectiveness of the risk management program. The effort is necessary to develop a corporate culture for the employees, as well as to facilitate good decision making process by the management of each business unit.

Terms of Reference Audit Committee

Terms of Reference BOC

Terms of Reference BOD

About Tunas
Bussiness Unit
PT TUNAS RIDEAN Tbk

Jl. Raya Pasar Minggu No.7, Jakarta 12740

Telepon : +62 21 794 4788

Faksimili : +62 21 799 5621

Call Centre : +62 21 1500 798

Email : info@tunasgroup.com

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