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Good Corporate Governance

 

Basic Implementation of Corporate Governance

PT Indal Aluminum Industry Tbk has placed the principles of Good Corporate Governance (GCG) as a high priority and continues to improve by making the best effort to comply with all relevant regulations under the leadership of the Board of Directors and supervision of the Board of Commissioners. The Company maintains adequate internal controls by implementing appropriate structures and rules and monitoring initiatives at both operational and management levels.
With the support of all company shareholders including the Maspion Group, the company believes that the implementation of Good Corporate Governance is believed to be able to strengthen the company's competitiveness on an ongoing basis, manage resources and risks more efficiently and effectively, increase company value and investor confidence.
To achieve this requires a commitment to implementing the principles of Good Corporate Governance, including transparency, fairness, accountability, independence and responsibility in all operational activity practices.

Corporate Governance Structure

Based on Law No. 40 of 2007 concerning Limited Liability Companies, company organs consist of the General Meeting of Shareholders (GMS), Board of Commissioners and Directors. These three Company organs play a key role in the successful implementation of Good Corporate Governance.
Company organs carry out their functions in accordance with statutory provisions, articles of association and other provisions based on the principle that each organ has independence in carrying out its duties, functions and responsibilities for the interests of the Company.
The management system adopts a two-body system, namely the Board of Commissioners and Directors, where in accordance with applicable laws and regulations, the Board of Commissioners and Directors can form supporting organs for the successful management of the company.

The Company is committed to implementing good corporate governance practices as part of its efforts to achieve the Company's Vision and Mission. The Code of Ethics was prepared as a manifestation of this commitment and describes the values in the Company's work culture into an interpretation of behavior related to business ethics and code of conduct.

The Code of Ethics also applies as a reference for the Board of Commissioners and Directors in managing the company relating to all activities in the name of the Company. are expected to uphold the principles in this Code of Ethics.

The Code of Ethics is regularly socialized to all parts of the Company, and all new employees will sign this Code of Ethics and will be re-signed as a sign of approval every year.

The main Code of Ethics regulates behavior:

  1. General Principles
  2. Child Labor
  3. Forced Labor, Human Trafficking and Slavery
  4. Harassment and Violence
  5. Compensation and Benefits
  6. Working Hours
  7. Health and Safety Working Conditions
  8. Discrimination
  9. Freedom of Association and Bargaining
  10. Environmental Responsibility
  11. Customs Cooperation to Counter Terrorist Activities
  12. Relationship with Subcontract
  13. Ethical Behavior

CORPORATE VALUES
To create a better future for all stakeholders and develop together to serve society and the nation through business development.

Compliance with Laws, Regulations and Regulations
It is expected that every employee will comply with state laws, rules and regulations and be a law-abiding citizen to ensure a law-abiding corporation.

Creating Clean and Green Businesses and Products
The best companies must be responsible to society and the larger community. By creating clean and green businesses and products, the Company will be able to serve society in the long term with true goals.

Loyalty, Capability, Hard Work and Discipline
From the pillars of success and achievement. Every member of the organization must maintain their integrity and be prepared to work hard and smartly for the mutual benefit of both the Company and the individual. Organizational behavior must be carried out in a military disciplined manner but with a humane approach.

In accordance with the Articles of Association, the honorarium for members of the Board of Directors is determined at the AGM. The decision of the AGM on 15 June 2023 regarding remuneration was to agree to authorize the Company's Board of Commissioners to determine the structure and amount of reasonable remuneration for the Board of Commissioners and Directors, as well as completing other requirements in this regard. The amount of remuneration for each member is determined according to the function and competence of each member, consisting of salary and allowances. The total remuneration received by the Board of Directors is IDR 4,101,263,000.00 for 2023. As for disclosing detailed information on the amount of remuneration received by each member of the Board of Directors, the Company is still unable to convey it for one reason or another.
The Remuneration Policy for the Board of Commissioners is determined at the GMS by giving authority to the Board of Commissioners to determine the amount and distribution of the honorarium amount which consists of salary and allowances through indicators for determining remuneration. The total remuneration received by the Board of Commissioners is IDR 728,932,900.00 for 2023. As for disclosing detailed information on the amount of remuneration received by each member of the Board of Commissioners, the Company is still unable to convey it for one reason or another.

Risk management is a set of procedures and methodologies used to identify, measure, monitor and control risks arising from business activities. Effective risk management will allow the Company to have greater control in achieving the right balance between acceptable risk and estimated risk. Indications of risk inherent in the company's business and efforts to reduce the level of risk are as follows:

  1. Production Risk.
    As a company with integrated facilities, which include aluminum smelting furnaces, dies, press machines, surface finishing facilities (anodizing and painting), complete equipment for high-precision products (precision tools), ladder division, trading division and has subsidiaries. which is engaged in the construction sector (applicator), the Company is required to ensure that each process department always produces the best in order to avoid correction and revision costs as well as delays in delivery time. Therefore, a risk and opportunity review is always carried out in every line related to production. Thus, for every risk, if it occurs, the Company already has a plan for handling it.
  2. Risk of Availability and Quality of Raw Materials.
    To meet the availability of raw materials with quality that is in accordance with what is needed in the production process, there are two vital things that are interrelated to avoid the risk of stopping the production process. Therefore, mitigation is carried out by controlling the inventory of main raw materials originating from a minimum of 4 foreign suppliers and 1 domestic supplier accompanied by a long-term purchase contract of at least 1 year for each supplier and ensuring the suitability of the composition of raw materials ordered by conducting an Incoming Inspection.
  3. Financial Risk.
    The Company has debts to several banks, both in the form of investment credit or working capital as well as Letters of Credit (LC) for the purchase of imported raw materials in foreign currencies at different rates. For this reason, the Company seeks to minimize exposure to foreign currency exchange differences by conducting a Trust Receipt (TR) using the Rupiah value which has reached 80% of the total purchases using the LC Import facility.
  4. Business Competition Risk.
    Aluminum products and construction services are highly competitive. To be able to compete in the global market, the Company has made several efforts, among others, by increasing the number of production, quality control, cost efficiency and diversification of more valuable products into the alternative energy sector which is widely used as a frame and framework for solar panels for power generation. This is done by the Company to follow trends that are much needed and demanded by consumers, in terms of supporting energy savings that have an impact on pollution and global warming.

The Whistle Blowing System (WBS) is a communication tool for reporting actions related to violations or suspected violations, whether of the law, code of ethics and/or conflicts of interest committed by internal company parties. The implementation of WBS is expected to be able to overcome the limitations of the internal control system and provide guarantees of early detection of violations that occur.

Submission of Violation Reports
Submission of violation reports is carried out in 2 ways, namely directly and indirectly. Directly by reporting directly to Personnel, Security, Supervisors and Plant Manager. Indirectly, namely reporting through other means such as suggestion boxes, email, telephone and mobile phones.

Protection for Reporters
The Company will guarantee the safety of the reporter and the reporter will receive recognition and appreciation from the Company in the form of thanks from management as well as recording the condition of the employee concerned with a separate assessment.

Handling and the Party Managing Complaints
Every complaint or disclosure report is carried out by a team of WBS administrators formed by the Board of Directors to carry out audits, record keeping and corrective action as well as impose sanctions on the reported party. It is also mandatory to communicate with the local police if things that are suspected of being serious or certain violations are found.

Complaints Incoming and Processed in 2023
In 2023, no complaints or reports will be received and handled by the Company.

Social and environmental responsibility (Corporate Social Responsibilty - CSR) is the Company's commitment to participate in sustainable economic development in order to improve the quality of life and a beneficial environment, both for the Company itself, the local community and society in general by taking into account the expectations of stakeholders, in line with established laws and norms of behavior and integrated with the organization as a whole. The cost of implementing CSR in the Company is carried out centrally by the Group amounting to IDR 1,717,564,606.00 with a Company contribution of IDR 198,510,558.00 for 2023.

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