We have implemented the GCG principles of transparency, accountability, independence and justice since our IPO in 2008 to comply with the Capital Market and Financial Institutions Supervisory Agency (Bapepam-LK) regulations for public company. Our majority shareholders and management have put tremendous efforts to instill a strong company culture emphasizing the importance of sustainable good governance application.
The followings show concrete initiatives we took in implementation of GCG principles in 2011:
Development of BOC and BOD Charters.
Development of Audit Committee Charters.
Fulfilled the disclosure requirements vis-à-vis disclosure on operational activities and corporate actions to Bapepam and the Indonesia Stock Exchange (“IDX”) through the Disclosure Committee.
Improved the procurement system.
Business Ethics and Rules of Leadership
To achieve our vision of becoming a leading Indonesian Mining and Energy group, the principles of GCG act as the cornerstone of our corporate values and are applied in the rules of leadership. The following are some of our corporate values portraying the expected behaviour from both management and employees:
Customer focus.
Attentive to the aspects of “Quality, Cost, Delivery and Safety (“ QCDS “) – through establishing a strong supply chain system with integrated production process which accommodates our operations as well as our subsidiaries, from mining, logistics, transportation, infrastructures to port operations.
Mutual respect and synergistic collaboration between all individuals within Adaro Group, abbreviated Adaro IBT, as follow:
Attitude
Determined
Adaptive
Responsive
Open minded
Integrity
Balanced
Team Spirit
Plan, Do, Check, Action (“PDCA”).
Simplicity in working and problem-solving termed as KISS (Keep it Simple Spirit).
Organs of the Organization
The General Meeting of Shareholders (GMS), Board of Commissioners (BOC) and Board of Directors (BOD) serve important roles in effective implementation of GCG by executing their respective functions under the principle of independence in carrying out duties, functions and responsibilities within the company.
As determined by the company’s articles of association, the General Meeting of Shareholders consists of an Annual General Meeting of Shareholders (AGMS) and an Extraordinary General Meeting of Shareholders (EGMS). AGMS shall be held within a period of no later than 6 (six) months after the end of a fiscal year. In 2011 we conducted the AGMS for the 2010 fiscal year together with the EGMS on April 20, 2011. The decisions made in the AGMS and EGMS were published in 2 (two) national media, the company’s website and IDX’s website.
In organizing the GMS, we invited our shareholders through announcement in two national media. Collective decisions were made in the Meeting through consensus for deliberation and voting, with the quorum of more than half of the attendees.
We have 6 (six) commissioners consisting of 4 (four) members representing the shareholders and 2 (two) Independent Commissioners, one of whom also serves as the Chairman of Audit Committee.
We are currently led by 7 (seven) directors who are professionals with diverse experience and backgrounds. The BOD oversees Adaro and its subsidiaries, and carries out their duties and functions referring to the assignment of responsibilities stipulated in the Articles of Association. The directors will also refer to Board of Directors’ Charter, which was still being finalized as of the end of 2011.
Diverse backgrounds of our BOC and BOD contributes positively on the decision making process which is based on reasonable and prudential principles without being rigid.
The management has set out the company’s Vision, Mission and Values promulgated to the entire Adaro Group through the company’s book titled “The Family” and through training sessions at Adaro Institute.
The Rights and Obligations of the Core Shareholders
As capital owners, the shareholders possess certain rights and responsibilities with regards to the company, which must be executed in accordance with the prevailing laws, regulations and articles of association.
Adaro’s Articles of Association, adjusted from Law No. 40 of 2007 on Limited
Corporation and in accordance with Bapepam-LK’s regulation, states that the core shareholders must comply with the provisions of the Articles of Association, all decisions made in the GMS, and the applicable regulatory requirements.
The core shareholders are entitled to place their representatives in the company’s management, to receive the company’s annual dividend, to attend the GMS, to exercise voting rights in the GMS, and to obtain information and periodical reports from the management.
Our core shareholders highly support us and our growth plans to achieve our vision to be a leading Indonesian mining and energy group. Composed of 4 (four) groups of family, with combined ownership of 63% and in which no single group dominates the others with larger holding, our core shareholders regard themselves not as owners, but instead as partners in the implementation of our strategies to create maximum sustainable value from Indonesian coal.
Another key aspect regulated by the Articles of Association is regarding material transactions which may incur conflicts of interest. Such transactions must obtain the approval of GMS wherein the core shareholders who may be involved in the conflicts of interest must collect the supporting votes from other shareholders. The agreed quorum for this matter is half of the total other shareholders and the voting is only valid if the quorum of more than half of the other shareholders in attendance is achieved.
The Rights and Obligations of Stakeholders and
Other Shareholders
Our stakeholders consist of employees, personnel, and community groups within the company, with interests in the company as well as those directly affected by the company’s strategic decisions and operations. Therefore, we manage a fair and equitable relationship with all stakeholders in compliance with the applicable laws and regulations, and based on two-way rules applicable to all parties.
In addition to the core shareholders, Adaro Energy is 35% owned by public shareholders, who also hold various roles in both AGMS and EGMS. We maintain the list of shareholders through a Securities Administration Agency (PT FicomindoBuanaRegistar), according to the provisions of applicable laws and regulations as well as the Articles of Association. We regularly conduct information disclosure to update our stakeholders with reports and press releases published on the company’s website, the websites of IDX and Bapepam, and in national media. To build a winning team for a bigger and better Adaro, we continue to enhance the quality of our human resources in a sustainable manner. Our focus lies on creating competent human resources through relevant training programs and develop proper career paths for each employee along with the company’s rapid growth.
To enable us in creating a maximum sustainable value from Indonesian coal, in 2009, we established a unit to manage the group’s corporate social responsibility (CSR) programs and community development named “Adaro BangunNegeri”. This unit makes significant contribution to the key aspects of economic development, enhancement on the quality of education, health enhancement and socio-cultural development. With regards to our community development programs, in 2011 we successfully achieved several prestigious awards from domestic as well as international institution.
Written statements regarding GCG implementation
Written statements with regards to GCG implementation and relevant reports are included as part of the company’s annual report. On areas without full implementation of GCG principles, the company must disclose the discrepancies and the reasons of such discrepancies. The written statements shall consist of the structure and work mechanism of the BOC and BOD, as well as other information relevant to GCG implementation.
Being a public company, we have implemented the principles of GCG in our business operations compliant with Bapepam-LK’s regulations and involve all elements of the company, led directly by the management and applied by each department and employee according to the existing corporate values.
In performing their roles under the determined mechanism, the BOC and BOD are assisted by Audit Committee and Disclosure Committee. In addition, the company also carries out risk management function as well as remuneration and nomination function to support the Boards. The committees and functions hold strong commitment to continuously develop and enhance the principles of GCG to support the company in ensuring sustainable growth.
Internalization of GCG Practices
To enable systematic and sustainable implementation of GCG, practical guidelines to serve as reference need to be put in place. Adaro implements GCG principles by referring to general regulations of Bapepam-LK, IDX and Law No. 40 of 2007 on Limited Corporation.
In addition, the management, together with an independent team formulated Adaro’s corporate values as outlined in the company’s book, “The Family,” which supports the effective implementation of GCG principles.
Our success in implementation of GCG principles in our business operations have gained various recognitions from a number of independent institutions and received several awards and recognitions from domestic as well as international institutions in 2011.
