AGMS
and EGMS
Board of
Commissioners
Board of
Directors
Supporting
Organ
Communication
with Shareholders
CG
Factsheets
Information
Disclosure
Risk
Management

Corporate Governance Fact Sheets


Consistent adherence to the GCG principles is important to ensure business growth and create a favorable climate for investment. AE strives to apply the GCG principles on a day-to-day basis in all its business units. Together with the Adaro Values of “Integrity, Meritocracy, Openness, Respect and Excellence”, this will keep AE a trustworthy, transparent, and sustainable company for all its stakeholders.

Code of Conduct

AE is committed to continuously strengthening its GCG implementation in order to stay ahead of the growing concerns over the standards of corporate governance in Indonesia. To support this commitment, in 2018 AE issued an official Code of Conduct applicable to all members of the BoC, BoD, supporting organs, senior management, and all employees at all levels without exception. This Code of Conduct is presented on AE’s website www. adaro.com.

The Code of Conduct sets forth the principles and behaviors that must be upheld in interacting with the stakeholders in a fair and balance manner. This guidelines cover:

  1. The Adaro Values;
  2. How the company and every individual of the company must comply with the applicable laws and regulations, as well as GCG principles;
  3. How every individual in the company must interact with various stakeholders, including the shareholders, customers, suppliers, communities, creditors, and other employees;
  4. The communication with the shareholders and investors;
  5. Insider trading, anti-corruption and anti-fraud, and transactions with a conflict of interest; and
  6. The company’s information disclosure.

The company has promulgated the Code of Conduct in September 2018, which was attended by the Executives in Charge (“EIC”) of the company’s subsidiaries. After such promulgation, the EIC will continuously disseminate the Code of Conduct to all employees at the Adaro Group.

The Company's official code of conduct can be found here.

Whistleblowing Mechanism

While AE’s formal whistleblowing mechanism for the reporting of misconduct is still being finalized, all employees are expected to proactively report to their direct supervisor in the event that they find any case of fraud or breach of our business ethics, company rules or regulations, Articles of Association, laws or confidential information.

Insider Trading, Anti-Corruption, and Anti-Fraud

In line with the Adaro Value of “Integrity”, all personnel within the Adaro Group are obliged to prevent the occurrence of insider trading, corruption and fraud. This obligation has been included in AE’s Code of Conduct and BoC and BoD Charter.

In those documents, it is clearly stated that the BoC, BoD, supporting organs, and all employees at all levels are obligated to avoid and prohibited from buying and/or selling the company’s shares when receiving information, whether directly or indirectly, from the company’s insider(s), being involved in any activity conducted to manipulate the company’s share price, and using the company’s confidential information to gain personal benefits and/or benefits for any other parties.

During 2018, no trading in the company’s shares was made based on insider information and no confidential information was used to manipulate the company’s share price and/or to gain personal benefits and/or benefits for any other parties.

In addition, AE has issued a gratification policy that prohibits each employee of the Adaro Group from accepting any gifts or gratuities which is considered an act of bribery.

Transactions and Balances with Related Parties

In the normal course of business, we engage in transactions with related parties, which include our majority shareholders, PT Adaro Strategic Investments. The transactions primarily consist of services and other financial transactions.

In dealing with related parties, we ensure that all transactions are fair and at arm’s length by doing the followings:

  1. Determining the pricing policies of coal sales to related parties based on international benchmarks, adjusted to the coal specifications.
  2. Treating our mining services and logistics subsidiaries as third-party service providers and benchmark the fees of their services to that of external service providers from outside of the Adaro Group performing similar activities for the group.

We have investments in joint venture companies PT Tanjung Power Indonesia (TPI), PT Bhimasena Power Indonesia (BPI) and Kestrel Coal Resources Pty Ltd. In 2018, AE recorded revenue from sales of coal to TPI amounting US$3.2 million and revenue from management and consulting services to TPI and BPI of US$0.54 million and US$0.48 million, respectively. Total revenue from related parties was US$4.26 million, or 0.12% of AE’s revenue.

Mergers, Acquisitions, and Takeovers

In cases of mergers, acquisitions, and/or takeovers requiring shareholders' approval, the BOC and BOD appoint an independent party to evaluate the fairness of the transaction price.

Compliance on Creditor’s Rights

AE’s Code of Conduct states that all business units are required to maintain the commitment to fulfil the creditors’ rights according to the terms agreed in the respective contracts.

Furthermore, AE has also issued a Financial Management Policy which sets forth all significant financial issues and corporate finance exercises for companies within the Adaro Group. The policy requires that any business unit wishing to undertake significant financial issues and corporate finance exercises must coordinate them with AE’s Corporate Finance Division.

Selection and Capability Enhancement of Suppliers or Vendors

AE has issued a Procurement Policy, which consists of the guidelines for the procurement of goods and/or services in such a way that fulfills the requirements of AE and its subsidiaries for ensuring smooth operational activities.

This policy requires AE to determine Key Performance Indicators for measuring procurement progress, identifying risks, and developing the standard operating procedures for risk mitigation. Every procurement process in AE must adhere to the confidentiality principles and every party involved in the process shall sign a conflict of interest statement to ensure a fair and ethical treatment for all parties.

Complaint Handling Mechanism

We strive to maintain and enhance our reputation of providing customers with high-quality products and services. We are committed to being responsive to the needs and concerns of our customers and to resolving any complaints as quickly as possible.

AE’s subsidiary, PT Adaro Indonesia, is in the process of issuing an official complaint handling mechanism to facilitate customers in the event that they wish to report any dissatisfaction to our marketing team. Any complaints from customers will be investigated by our Operation Support team, who will coordinate with the marketing team to formulate corrective actions to handle the complaints as well as to prevent the same problems from recurring. Our marketing team will communicate the results of the investigation to the customers and find the best solutions.

Long-Term Incentives for BoD and Employees

AE is still conducting analyses to determine the form of the most appropriate long-term incentives for the BoD and employees.

External Auditor

At the AGMS, Daniel Kohar from Public Accounting Firm Tanudiredja, Wibisana, Rintis & Rekan, a member firm of the PricewaterhouseCoopers global network, was re-appointed by the shareholders to audit AE’s financial statements for the fiscal year ending on December 31, 2018, or his replacement to be appointed and/or approved by AE’s BoC.

Tanudiredja, Wibisana, Rintis & Rekan has been auditing AE’s financial statements since 2015. However, FY2018 was the second year for Daniel Kohar to audit the Company’s financial statements.

In 2018, AE utilized professional services from external auditor for financial audit services, as well as other services from a number of institutions, including tax consultant, legal consultant, share registrar, appraisers, actuaries, and rating agencies. AE paid the total amount of approximately IDR4.4 billion for the services from these professional institutions in 2018.

In 2019 AGMS, the shareholders approved the appointment of Yanto, S.E., Ak., M.Ak., CPA and Public Accounting Firm Tanudiredja, Wibisana, Rintis & Rekan, a member firm of PricewaterhouseCoopers global network in Indonesia, to conduct an audit of the company’s consolidated financial statements for fiscal year 2019, and his replacement appointed and/or approved by the company’s BoC.

Material Litigation Faced By The Company

We have disclosed the legal proceedings of the company in the Notes to the Consolidated Financial Statements for the year ending on 31st December 2018 – Schedule 5/130 to 5/132.

Administrative sanctions and suspension

No suspensions or administrative sanctions were imposed on any of our BoC or BoD members by regulators in 2018.

Last modified on August 21, 2019, 5:39 pm | 10624