Corporate Governance

Governance Statement

PT Sekar Bumi, Tbk is committed to continuously apply the principles of good corporate governance, and we believe that this application needs to be done on an ongoing basis more than to simply comply with standards and regulations, while maintaining a balance between the interests of shareholders and the interests of other stakeholders.

 

As a manifestation of this commitment, the management always monitors and implements to and implement the company's operation according to the standards, regulations, and direction of the board of directors for the purposes and interests of the company's performance improvement based on high ethical values.


We have a strong conviction to maintain and enhance the application of the principles of good corporate governance in the whole range of PT Sekar Bumi, Tbk, and to ensure the sustainability of the application, we continuously monitor the process and its implementation through existing devices.


Our commitment has brought positive results to stakeholders.  The stakeholders acknowledge our level of transparency and disclosure quality, which is reflected in obtaining numerous awards and trademarks related to the quality of our products.


We are also committed to continuing to improve the implementation of the principles of corporate governance in PT Sekar Bumi Tbk, in line with business growth and dynamics of the existing regulations.

 

CORPORATE GOVERNANCE IMPLEMENTATION OBJECTIVE 

To support the achievement of the strategy and objectives in line with the vision and mission stated, we are committed to implementing and developing the corporate governance, which aims to :


• Create a better reputation for the company, directors, and managers;
• Lower the cost of capital and enhance the value of the asset;
• Improve access to capital markets;
• Stimulate performance and operations efficiency.
• Increase values ​​of the company, through increased financial performance and minimization of investment risk decision which comprises any conflict of interest.

 

CORPORATE GOVERNANCE STRUCTURE AND POLICY

The structure of corporate governance in PT Sekar Bumi, Tbk is as follows:

 

                                                       

 

In order to improve the quality of the implementation of good corporate governance, management continues to improve structure and procedure implementation and ensure the application of the principles of transparency, accountability, responsibility, independence and fairness in every line of the company.


It aims to minimize the potential risk of conflict of interest in the execution of duties, functions and responsibilities both at the level of the Board of Commissioners, Board of Directors, management and employees.

 

CORPORATE GOVERNANCE POLICIES

In the implementation of the principles of good corporate governance, policy support is absolutely necessary so that implementation can run smoothly and focused. These policies include:

• Code of corporate governance
• Code of conduct
• Internal audit charter
• Whistleblowing system
• Transparency of information policy
• Risk management policy
• Conflict of interest policy

These policies will continually be evaluated, refined and equipped with a variety of other policies required in accordance with the provisions and standards.

Hierarchy of corporate governance policy is described as follows :

 

                                                

 

SHARE REGISTRAR

 

 

 

PUBLIC ACCOUNTANT

 

 

 

 

DUTIES AND AUTHORITY DIRECTOR

 

1.  The key task of the Board of Directors are:

      a. Carry out the management of the company for the interest and objectives of the company and act as leaders.
      b. Maintain and govern  the company's assets.


2.  BOD have full responsibility for performing their duties for the benefit of the company in achieving its goals and objectives.


3.  BOD are entitled to represent the company in and out of court, and perform all acts and deeds, both regarding the management and ownership of the company's assets and its binding to the other party or other party with the company.


4.  The company's management policies set by the Board of Directors Meeting. Actions taken by the members of the Board of Directors outside decided by the Board of Directors Meeting is the responsibility of the concerned until such action is approved by the Board of    Directors Meeting.

 

5.  President Director is entitled and authorized to act for and on behalf of the Board of Directors and to represent the company with the provisions of all acts Director was approved in the meeting of the Board of Directors.


6.  If the President Director does not exist or is unavailable for any reason, which does not need to prove to a third party, then one Director appointed by the President Director is authorized to act on behalf of the Board of Directors.

 

7.    GMS can specify restrictions and certain conditions to the Board. Action taken by Directors must obtain the written approval of the Commissioner, is:

       a. Receiving short-term loan from bank or other financial institutions.

       b. Providing short-term loans that is not operational- related until a certain amount set by the GMS.

       c. Pledging   fixed   asset   required   in   relation   to the withdrawal of short-term credit.

       d. Removing and writing off moving fixed asset with economic life up to 5 (five) years as normally applicable for industry in general.

       e. Writing off the bad debt until a certain amount as set by the GMS.

       f.  Establishing joint cooperation that is outside the business for a period of not more than 1 (one) year or no more than 1 (one) business cycle.  

         
       g. Entering into a management contract that is not operational-related for a period of not more than 1 (one) year.


       h. Establishing and adjusting organizational structure.



8.    Action taken by BOD that require recommendations from the Commissioner and approval from the GMS are as follows:


      a. Taking part, either partially or wholly, or participating in any corporation or other bodies, or establishing new company;


      b. Removing partly in a percentage or certain value as set by GMS or wholly upon the Company's participation in other companies or bodies;

      c. Obtaining/providing medium/long-term loans (6-20 years);


      d. Providing short-term loans that are not  operational-related that exceed a certain value;


      e. Removing and writing off moving fixed asset with economic life up to 5 (five) years as normally applicable for industry in general;

      f.  Removing and writing off fixed non-moving fixed assets;


      g. Pledging   fixed   asset   required   in   relation   to    the withdrawal of medium/long-term loans;


      h. Establishing joint cooperation with business entities or other parties for operational cooperation for a period of more than 1 (one) year or more than 1 (one) business cycle;


      i.  Performing other agreements that have financial impact for the company as set by the GMS;

      j.  Nominating members of the Board of Directors and/or Commissioners representing the Company in the Subsidiary.


9.    Legal actions to transfer, release the right, or guaran- tees of indebtedness of all or most of the assets of the company (which is not a merchandise) either in a transac- tion or several transactions that stand alone or are related to one another must:

      a. Obtain the Approval of GM that attended or represented by shareholders owning at least ¾ (three quarters) of the total shares with voting rights are valid and approved by ¾ (three quarters) of the total votes.

      b. Announce in 2 (two) Indonesian language daily newspa- pers are published and widely circulated / national in the territory of the Republic of Indonesia no later than 30 (thirty) days from the legal acts performed.

 

 

CODE OF CONDUCT

 

PT Sekar Bumi Tbk has set Code Of Conduct. This code is an elaboration of the vision, mission, values, and practices as well as the culture of the company which applies to all organs of the company. The code of conduct has been approved by the Board of Directors to serve as a reference in the liaising, acting, and dealing with all stakeholders. Socialization and notifications are made and every organ of the company has signed a statement of compliance.

 

The main points are arranged in such behavior guidelines are:

A. CORPORATE  CULTURE
    - General Description
    - Values
    - Profile of  Employees

 

B. WORK ETHICS
    - Application of corporate culture
    - Loyalty to the company
    - Conflict of interest
    - Gratuities, bribery, and corporate entertainment
    - Company environmental management
    - Respect for Personal Diversity
    - Asset Protection and Information
    - Internal Monitoring
    - Reporting Integrity
    - Cost Awareness
    - Political Activities
    - Company  Reputation

C. BUSINESS ETHICS
     - Implementation of Good Corporate Governance
     - Relations with Employees
     - Relations with Shareholders
     - Relations with Customers
     - Relations with Suppliers
     - Relations with Business Partners / Investors
     - Relations with Creditors
     - Relations with Government Officials
     - Relations with the Community
     - Relations with Mass Media

D. IMPLEMENTATION  AND  ENFORCEMENT
     - Commitment
     - Responsibility
     - Monitoring
     - Reporting on Violations
     - Handling Violations
     - Sanctions on Violations

 

EFFECTIVENESS ON RISK MANAGEMENT AND INTERNAL CONTROL OVER FINANCIAL REPORTING

Various business activities are performed making the company and its subsidiaries face a variety of risks such as financial risks, business risks include the impact of changes in commodity prices and foreign currency exchange rates and environmental risks. Risk management program of the Company intended to deal with unpredictability of financial markets and to minimize the undesirable effects on the Company’s overall financial performance.

Here are the risks that have been listed by the Company and the risk weight starts from the main risk of the Company:

Risk of Raw Materials Supply


In meeting the raw material needs and supply risk, in addition to the routine delivery from farmers/suppliers, the Company also conducts relatively more profitable trading system for the Company and farmers/suppliers through having contract in advance that is  tailored  with customers’ order, including providing input regarding market development.

also conducts relatively more profitable trading system for the Company and farmers/suppliers through having contract in advance that is  tailored  with customers’ order, including providing input regarding market development.

Risk of Marketing Aspect and Market Share


In the marketing of food products, the market demand  is never decreasing, instead it has been increasing; however, the company is facing market  risk in  relation to customer’s preference development and product quality. In addition to maintaining Japan and the US market, the Company also expands its market towards Europe and Asia. The company also targets retail consumer market. Approach towards buyer is done through international exhibitions, visits to strengthen relationship, adjusting to needs and country-specific requirements as well as obtaining international certifications.

Risk of Foreign Exchange


The Company purchased raw materials denominated in Rupiah and sell through exports in  USD and therefore  in managing the risk of exchange rate, the Management implement strict monitoring towards goods movement and export sales receipt, as to keep  it  in  control between 7 - 10 days from goods ready for  sale.

Management is aware that the effectiveness of the  risk management system is absolutely necessary so that the impact of the risk does not significantly affect the performance of the company.

Effectiveness of internal control is  an  important element in corporate governance because it can help  the management to improve  company’s  compliance over applicable rules and regulations; to guarantee the availability of the financial statements and management report that is true, complete, and timely; and to achieve the efficiency and effectiveness in the making of the company financial statements.

The internal control system include:

Environment Control
Risk Assessment
Control Activities
Information and Communication
Monitoring