In the face of increasingly challenging business and competitive environment, The Company commits to carry out Good Corporate Governance (GCG) in the daily business activities with the aim of improving performance and corporate values. The Company believes that through continuous implementation of GCG, the Company can survive in the midst of difficult situations and challenges.
In its implementation, the Company is oriented to the laws, regulations, practices and GCG recommendations that are believed will increase the value of Shareholders and Business Partners in long term. The commitment of the management to continuously improve and enhance GCG is expected to be able to push financial performance to the fullest. The growing performance will ultimately bring the Company to sustainable growth and always be able to increase contributions for all stakeholders.
There are 5 (five) GCG principles implemented by the Company:
1. Transparency
Transparency in the decision making process as well as in disclosing material information and relevant about the Company.
2. Accountability
Clarity of functions, implementation and accountability of company organizations so that the management is performed effectively.
3. Responsibility
Conformity in the Company management to the laws and regulations and principles of sound Corporation.
4. Independence
the Company is managed professionally without conflict of interest and influence/pressure from any party.
5. Fairness
Fairness and equality in meeting the rights of Stakeholders arising pursuant to agreements and regulations.
The Nomination and Remuneration Committee is established by and responsible to the Board of Commissioners. The Nomination and Remuneration Committee members have met the criteria and expertise as defined in the Financial Services Authority (Otoritas Jasa Keuangan) Regulation No. 34/POJK.04/ 2014.
The main tasks of the Nomination & Remuneration Committee are as follow:
1. Provide recommendations to the Board of Commissioners regarding the composition of the positions, requirements and evaluation criteria for the performance assessment, capacity building and the nomination of election of the Board member of Directors and/or Commissioners.
2. Provide recommendations to the Board of Commissioners regarding the structure, policies and remuneration, and the conformity assessment of remuneration to the performance of the Board member of Directors and/ or Commissioners.
In line with the Company's efforts to enhance the value of strong internal governance and improve operations, an Internal Audit Unit was formed, following POJK 56/2015.
The Corporate Internal Audit structure is as follows:
1. Internal Audit Chairman is appointed and dismissed directly by the President Director with the Board of Commissioners approval, and therefore, is directly responsible to the President Director.
2. The Internal Audit has main task to create and submit audit report concerning the implementation of management decision, either one that has been done, is being done, or has not carried out, to the President Director and the Board of Commissioners.
3. In the execution of its duties, the Internal Audit coordinates and cooperates with the Audit Committee.
Internal Audit Charter
In accordance with the Bapepam-LK Chairman's Decree No. KEP-496/BL/2008 dated 28 November 2008 on Establishment of Internal Audit Unit and Internal Audit Charter Preparation Guideline, the Company has prepared Internal Audit Charter in 2013. The Internal Audit Charter outlines the Internal Audit Unit's structure and position, duties and responsibilities, roles, authorities, code of conduct, competency, independency, accountability and work relations.
Indonesian citizen, 30 years old, domiciled in Jakarta. Mrs. Meilisa Godjali has served as Head of the Company's Internal Audit Unit since 2024. She has a degree Bachelor of Accounting (2016) from Tarumanagara University, Jakarta, Indonesia.
Mrs. Meilisa Godjali has no affiliation with members of the Board of Directors, other Board of Commissioners, or controlling shareholders.
The existing internal control system in the Company leads to aspects of compliance with applicable laws and regulations. The financial and operational controls in the Company are as follows:
1. The Board of Commissioners supervises and provides advices regarding the Company’s management process, business development, and risk management by applying the precautionary principle.
2. The Board of Directors develops the Company’s internal control system so that it can function effectively.
3. The Internal Audit Unit assists the President Director in carrying out internal audits of the Company’s finances and operations; and providing suggestions for improvement.
4. The Audit Committee evaluates the implementation of audit by the Internal Audit.
Evaluation of the Effectiveness of the Internal Control System
The Board of Directors had established the Internal Audit Unit as the work unit responsible for implementing the internal control function as part of the Company’s efforts to evaluate the effectiveness of the internal control system within the Company, which includes the financial control system, operational and compliance with laws and regulations.
The Company implements the risk management system to control all the risks that may lead disruption to business operations. The Company's business activities are not free from risk factors, which if managed properly can not only reduce the potential for servitude in doing business but can be a lever in increasing business.
Risk management is carried out in line with GCG implementation. Each of identification and monitoring of risks that could arise and affect to operational activities and company business shall followed up with the assessment and risks analysis, and be described in risk profiles to determine the action plans of necessary prevention and mitigation needed, based on the clear and measurable method and system within the management of risks.
The Company’s Risk Profile
The Company’s operations are affected by various risks. In 2020, the Company yet again had identified, assessed, managed and monitored the risks inherent in all of the Company’s operational and strategic functions. The risks the Company is exposed to are as follows:
1. Construction Industry’s Growth Risk
The potential impact of the global and domestic economic slowdown caused by Covid-19 pandemic could slow the construction industry’s growth in oil and gas sector. In addition, this risk can adversely affect the Company’s business activities, operating performance, financial condition and business prospect.
2. Business Competition Risk
The domestic oil and gas construction services business in Indonesia is growing increasingly competitive. This is indicated by the escalating price war between contractors. In order to stay ahead of the competition, the Company continues to provide the best service by optimizing existing resources. The competition risk can adversely affect the Company’s business activities, operating performance, financial condition and business prospect.
3. Social & Political Risk
The changing dynamics of socio-political climate can have a significant impact on the economic sector, especially in oil and gas sector. This risk arises due to changes in the socio-political climate and the government’s strategic decisions related to ideological, political, economic, social, cultural, and defense and security matters.
The emergence of this risk can lead to subsequent risks, such as the likelihood of investors postponing direct investment while waiting for the socio-political climate to stabilize. If such a risk were to occur, numerous business activities in various industrial sectors may slow down or even ceased. This could lower the number of the Company’s works/projects that could adversely affect the Company’s business activities, operating performance, financial condition, and business prospect.
Evaluation of Risk Management System Implementation
The management periodically evaluates the effectiveness of the Company’s risk management system, and works together with the project heads to evaluate project performance.
Ethics are the basic foundation for the Company, all management, and employees in carrying out their duties and responsibilities, including maintaining integrity and professionalism at work. The Company is equipped with Code of Conduct ratified in 2015. The Code of Conduct regulates values or norms that are explicitly stated as behavior standard that applies to and must be obeyed by the Board of Commissioners, Board of Directors, the Management, and all employees in carrying out their duties according to their respective positions.
The contents of the Code of Conduct are as follows:
1. Introduction
2. Vision, Mission and Values
3. Code of Conduct Policy
4. Enforcement Mechanism
5. Reward and Punishment
The Company consistently disseminates its Code of Conduct. Each member of the Company is able to submit reports of violations or suspected violations that occur within the Company.
The Company has a mechanism so that every violation that arises is known by management, in addition to being investigated and taking action to prevent any potential violations that arise.
