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:
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.
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.
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.