About GCG

CODE OF CORPORATE GOVERNANCE

PT. PETROKIMIA GRESIK

PT. Petrokimia Gresik, as a business entity, has an obligation to implement the principles of GCG (Good Corporate Governance) namely transparance, accountability, responsibility, independence, and fairness. Hence, an implementation guideline of GCG (code of CG) is compiled so that it can periodically be improved in order to fulfill the progress and adjustments of regulatory changes. This is, therefore, to support the formulation of the guideline to make it more constructive and flexible for the company.

The scope of the code of PT. Petrokimia GCG implementation includes commitment, major organ, supporting organ, information access for public, information technology, risk management, and corporate ethics.

1. Commitment

Commitment in the implementation of GCG is interpreted as written rules and company efforts to put the rules into practice as well as earnest and balanced attention toward the interest of stakeholders.

GCG-implementation commitment of PT. Petrokimia Gresik:

  • Constructing guideline of GCG (code of CG)
  • Drawing up ethic code or code of conduct and communicating the code to all elements of the company.
  • Revising the Board Policy Manual (BPM) related to the changes in legislation of limited liability No. 40 in 2007
  • Signing the pack of integrity by the functionaries of echelon I and II along with the directors of subsidiary companies in the environment of PT. Petrokimia Gresik and the representatives of 10 suppliers and 10 distributors / exporters
  • Developing guidelines or information technology governance as a reference for the company management of information technology (IT)
  • Formulating corporate policy manual as the manifestation of accountability principle implementation
  • Composing Internal Audit Charter (IAC)
  • Arranging Committee Audit Charter (CAC)
  • Formulating risk management implementation guideline
  • Constructing quality, environmental and Occupational Health and Safety (OHS) management systems

2. Major Organ

Major organ within the GCG implementation scope of PT Petrokimia Gresik includes Annual General Meeting (AGM) of Shareholders, Commissioners and Directors.

Annual General Meeting (AGM) of Shareholders

Annual General Meeting (AGM) of Shareholders is the highest decision making organ within the company and holds all powers not given to the director or commissioner. The majority shareholder of PT Petrokimia Gresik is PT Pupuk Indonesia (Persero) (99,99%), meanwhile the minority shareholder is PT Petrokimia Gresik foundation (0,01%). The most substantial things in the implementation of GCG are each shareholder holds a voting right to determine the direction of the company management, gets vital material information regarding the development of the company and has a right of receiving share of company profits.

PT. Petrokimia Gresik organizes two times Annual General Meeting (AGM) of Shareholders in a year, those are:

  1. Annual General Meeting of work plan and company budget
  2. Annual General Meeting of performance

The annual general meeting of performance with the decisions of:

  • The remuneration of managing director, directors, commissioners, and commissioners’ secretary
  • Determination of consolidated net income for dividends, Partnership and Community Development program (PKBL), bonuses for directors and commissioners as well as funds reserved.
  • Food security and partnership program write-off.
In accordance with the principles of accountability, shareholders are not allowed to intervene the operations of the company which is the directors’ responsibility based on the prevailed company articles of association and legislation.
3. Extraordinary General Meeting (EGM) of Shareholders is aimed to appoint and dismiss commissioners and directors, which its implementation is adjusted to the company’s long-term plan and must be approved by the shareholders as a reference of company’s target for the next five years

Commissioner

Commissioner refers to the company’s organ in charge of supervising the company in general or specific and providing advices to the board of directors in running the company for the interest of the company and shareholders, and also ensuring that the company always carries out its social responsibility (Corporate Social Responsibility), and monitoring the effectiveness of GCG implementation held by the company.

Board of commissioners of PT Petrokimia Gresik is composed of six commissioners, one as the chief commissioner and five are the commissioners where one of them are independent. Independent commissioner is defined as someone who is not affiliated in any way with the shareholders and has no affiliation with the directors and the board of commissioners.

Commissioners of PT Petrokimia Gresik in complete are:

  1. Chief Commissioner : DJOHAN SAFRI
  2. Commissioner : PANGGAH SUSANTO
  3. Commissioner : MAHMUD NURWINDU
  4. Commissioner : HARI PRIYONO
  5. Commissioner : YOKE C. KATON
  6. Commissioner : HERIYONO

Each Commissioner is responsible for one field

including the

distribution and marketing of fertilizers, manufacturing

and technology, management and finance, investment and business policy, and human

resources and organization. On the basis of the company’s articles of association,

the commissioners hold a meeting at least once every month and

at any time if it is deemed necessary.

In order to support their work and to ensure that each member of the board of commissioners executes their function effectively, the board of commissioners forms an audit committee that assists the commissioners in ensuring the effectiveness of external and internal auditor’s duties.

Director

Director is a company organ who holds executive power in the company and controls the daily operation of the company within the limits set by Law of Limited Liability Company, State-owned company laws, company’s articles of association, decisions of Annual General Meeting of Shareholders, and under the leadership of the board of commissioners. The main duties and functions of directors are running the company's overall management, making efforts to make the company able to carry out its social responsibility, paying attention to the various interests of stakeholders and continue encouraging the consistency of GCG implementation. Based on the minutes of PT Petrokimia Gresik Extraordinary General Meeting of Shareholders on 13rd January 2016, the directors of PT Petrokimia Gresik are:

  1. President Director : Nugroho Christijanto
  2. Technical and Development Director : Arif Fauzan
  3. Production Director : I Ketut Rusnaya
  4. Finance Director : Pardiman
  5. Marketing Director : Meinu Sadariyo
  6. Human Resources and General Affairs director : Rahmad Pribadi

Activities carried out by Directors of PT Petrokimia Gresik are:

  1. Holding meeting of company budget once a month along with echelon I and II functionaries
  2. Organizing board of Directors internal meeting for once a week and at any time if it is necessary
  3. Reporting the monthly, quarterly, and annually management activities to the commissioners and the shareholders as a form of GCG implementation.

In addition, the board of directors also establishes a risk

management unit with the aim that every detrimental risk security system

of the company can reduce the risk as small as possible, hence

it is expected that the company will be able to obtain maximum results. Information

technology policy is also needed considering that the direction of the

company’s information technology management in the future should be clear.

Every year the directors draw up a management contract as the annual target which is set out in the Key Performance Indicators (KPI) with the KPI holding as the guidance.

3. Supporting organs

Supporting organs in the implementation of GCG of PT Petrokimia Gresik are the audit committee, external auditors, internal audit unit, and company secretary.

A. Audit committee

Audit committee plays a role in assisting the commissioners to carry out supervision functions. Audit committee members are appointed and dismissed by the commissioners and reported to the Annual General Meeting (AGM) of Shareholders.

Activities carried out by the audit committee are:

  1. Taking part in the appointment process of Public Accountant Office (KAP)
  2. Evaluating the audit result of the Public Accountant Office
  3. Conducting an evaluation toward the results of the monthly management reports and providing suggestions for improvement.
  4. Evaluating the environmental management and risk management implementation
  5. Inspecting company's assets (scraps) to be recognized as disposable goods.
  6. Evaluating the internal controls over the procurement of goods and services
  7. Evaluating the audit report of Internal Audit Unit
  8. Meeting with the board of commissioners
  9. Accompanying the commissioners on working visits to regions
  10. Evaluating the procurement process of company projects

B. External Auditor

External auditor refers to an independent institution appointed through Annual General Meeting of Shareholders to perform audit function to all of accounting records and supporting data, besides to give opinion regarding the fairness, principles obedience, and suitability of the company's financial reports with Indonesia accounting standard.

The commissioners through the recommendation of the audit committee approve the appointment of a Public Accounting Company to;

  1. Audit the financial reports of PT Petrokimia Gresik and consolidation.
  2. Audit the company compliance with legislations and internal control according to the Statement of Auditing Standards 62
  3. Audit the company's performance evaluation report and the attainment of Key Performance Indicators.
  4. Audit the management Key Performance Indicator which refers to the management contract.
  5. Audit the funds usage report of the partnerships and community development program.

C. Company secretary

Company secretary is a company official who acts as a liaison officer in charge of administering and saving the company documents (list of shareholders, a special list of directors meeting or AGM/ EGM of Shareholders minutes)

As a liaison officer, company secretary has responsibilities of;

  1. Supporting the performance effectiveness of directors, board of commissioners, and board of commissioners committees. Company secretary organizes meeting schedule with internal or external party, conducts meeting with auditor and external consultant, and also accompanies the directors to communicate with the external party.
  2. Elevating the effectiveness of the company relation with parties outside the company. Secretary of the company attempts to establish communication with parties outside the company which