Pursuant to the applicable laws and regulations, the GCG implementation within the Company observes the principles of Transparency, Accountability, Responsibility, Independency, Fairness, and Equality.

Transparency

The Company applies the Transparency principle by disclosing relevant and accurate information to shareholders and stakeholders in a timely manner by regularly and periodically publishing Financial Statements, Annual Reports, and other material information, and provides means to access the Company’s important information through the Company’s corporate website, print media and press releases, investor meetings, public exposes, and press conferences.

Accountability

The Company applies the Accountability principle by ensuring the availability of charters needed by the Company’s main bodies to provide clarity of function, implementation and accountability pertaining to shareholders, Board of Commissioners, Board of Directors, Committees, and Corporate Secretary in order to ensure effective implementation of corporate governance.

Responsibility

The Company applies the Responsibility principle by observing applicable capital market provisions that include taxation, healthy competition, industrial relations, occupational health and safety, payroll standard, as well as other relevant regulations.

Independence

The Company applies the Independency principle by ensuring that each business unit operates independently without dominating each other and without interference from other parties. In addition, every decision is made professionally and objectively, free from conflicts of interest, and in a respectful relationship between the Company’s bodies and business units.

Fairness and Equality

The Company applies the Fairness principle in various operational aspects, including by honoring the rights of minority shareholders. The Company applies the Equality principle by ensuring that the rights of shareholders and stakeholders can be fulfilled properly in accordance with the prevailing agreements and laws. The Company also provides equal opportunities in the recruitment and human resources management without discrimination based on ethnicity, religion, race, class, gender and physical condition.

The Company’s GCG Structure was established to accommodate the systematic implementation of GCG with clear division of roles and responsibilities. In accordance with Law No. 40/2007 on Limited Liability Companies, the Company is equipped with Corporate Governance Structure consisting of the General Meeting of Shareholders, the Board of Commissioners and its supporting body namely Audit Committee, as well as the Board of Directors and its supporting bodies namely Corporate Secretary and Internal Audit Unit.

As the holder of the highest power in the management structure, General Meeting of Shareholders (GMS) possesses the authority not given to the Board of Commissioners and the Board of Directors including the decision-making on the amendment of the Articles of Association, merger, consolidation, acquisition, bankruptcy and dissolution of the Company. In general, the aforementioned authority is governed and limited by the Law No. 40/2017 on Limited Liability Companies, as well as the Company’s Articles of Association.

The Company holds GMS in accordance with OJK Regulation No. 15/POJK.04/2020 on the Plan and Implementation of the General Meeting of Shareholders of Public Companies. The GMS’ resolutions are made by taking into account the Company’s long-term business interests. In exercising its authority, the GMS must pay attention to the Company’s rights, interests, development, and health; as well as stakeholders’ rights.

The Board of Commissioners is a supervisory body responsible for overseeing all managerial actions taken by the Board of Directors and performing special duties assigned by the GMS. In addition, the Board of Commissioners monitors the implementation of good corporate governance within the Company as well as compliance with applicable laws and regulations. Moreover, the Board of Commissioners also performs consulting function and may also advise the Board of Directors.

In performing its duties and functions, the Board of Commissioners is equipped with the Board Of Commissioners’ Charter as its work guidelines and procedures. Likewise, the Board of Commissioners is assisted by the Audit Committee.

Duties and Responsibilities

  1. Supervise the Company’s management policies implemented by the Board of Directors and provide advices to the Board of Directors in running the Company in accordance with the Company’s development plan, the provisions of the Articles of Association and the resolutions of the GMS as well as the prevailing laws and regulations.
  2. Examine, review, and sign annual reports prepared by the Board of Directors.
  3. Hold Board of Commissioners’ meetings periodically, at least once every 2 (two) months.
  4. Submit supervisory report for the fiscal year to the GMS.
  5. Evaluate and determine the remuneration for the Board of Directors.

Nomination and Remuneration Functions

The Company currently has no special committee to perform nomination and remuneration functions as those functions have been performed by the Board of Commissioners. This is allowed in accordance with the provisions of the OJK Regulation No. 34/POJK.04/2014 on Nomination and Remuneration Committee of Listed or Public Companies.

The procedures for the determination of remuneration structure, policies, and amount for members of the Board of Directors and Board of Commissioners have been disclosed under the Board of Commissioners and Board of Directors Remuneration section of this Annual Report.

Independency and Independent Commissioners

In performing its supervisory function, the Board of Commissioners maintains its independence without intervention from other parties that may affect its objectivity and independence. Moreover, pursuant to OJK Regulation No. 33/ POJK.04/2014 on Listed or Public Companies’ Board of Directors and Board of Commissioners, 2 members or 30% of the Board of Commissioners are independent. Independent Commissioners are members of the Board of Commissioners from outside the Company, have no affiliation with the Company, appointed in a transparent and independent manner, have integrity and competence, free from influences related to personal or other parties’ interests, and able to act objectively and independently in accordance with GCG principles.

Performance Assessment

The Board of Commissioners’ performance is evaluated through self-assessment by members of the Board of Commissioners. The self-assessment criteria are as follows:

  1. GCG Implementation.
  2. The Company’s performance with regard to its vision and mission.
  3. The Company’s actual results compared to the predetermined targets.

The Board of Directors is an executive body responsible for directing the affairs of the Company that include strategy planning and preparation; operations, administrations and other supporting activities; accounting and reporting of operations through financial statements; as well as management reports and other reports.

In performing its roles and functions, the Board of Directors is equipped with the Board Of Directors’ Charter as its work guidelines and procedures. Likewise, the Board of Directors is assisted by the Internal Audit Unit and the Corporate Secretary.

Duties and Responsibilities

In general, the duties and responsibilities of the Board Directors are as follows:

  1. The Board of Directors is responsible for running and managing the Company and its business in the best interest of the Company in accordance with its purposes and objectives stipulated by the Articles of Association. Each member of the Board of Directors must carry out their duties and responsibilities in good faith in a responsible and prudent manner.
  2. The Board of Directors is required to hold annual GMS and other GMS as stipulated by the applicable laws and regulations as well as the Company’s Articles of Association.
  3. The Board of Directors is entitled to represent the Company in and outside the Court with regard to all matters and in all events, as well as binding the Company to other parties.

Performance Assessment

The Board of Directors’ performance assessment is conducted internally or self-assessment by the Board of Commissioners to be presented at the General Meeting of Shareholders. In general, the Board of Directors’ performance assessment is based on, but not limited to, the following criteria:

  1. GCG Implementation.
  2. The Company’s financial and operating performance, as well as other aspects that are essential to the Company’s sustainability.
  3. The Company’s actual results compared to the predetermined targets.
  4. The Company’s performance with regard to its vision and mission.
  5. Strategy and innovation.
  6. The management’s achievement in increasing value for shareholders;
  7. The performance of each individual Director.

The Audit Committee is a supporting body that assists the Board of Commissioners in performing its supervisory function on matters related to financial statements, internal control system, the efficacy of audits performed by external and internal auditors, the efficacy of risk management implementation, as well as compliance with applicable laws and regulations. The Audit Committee performs its duties and responsibilities in accordance with the Audit Committee’s Charter and answers directly to the Board of Commissioners.

Composition and Profile

The Audit Committee is appointed in accordance with OJK Regulation No. 55/POJK.04/2015 on the Establishment and Work Guideline of the Audit Committee. The composition of the Company’s Audit Committee as of March 31st, 2021, is as follows:

Rodolfo. C. Balmater

Chairman

His profile is available under the Board of Commissioners’ Profile section.


Edy Sugito

Member

Indonesian citizen, born in 1964, obtained his Bachelor of Accounting degree from Trisakti University, Jakarta, in 1991.

Concurrently serves as Independent Commissioner of PT PP London Sumatra Indonesia Tbk (since 2012), Independent Commissioner of PT Wismilak Inti Makmur Tbk (since 2012), Commissioner of PT Gayatri Kapital Indonesia (since 2013), Independent Commissioner of PT Dharma Satya Nusantara Tbk (since 2013), Independent Commissioner of PT Trimegah Sekuritas Indonesia Tbk (since 2013), and Independent Commissioner of PT Soechi Lines Tbk (since 2014).

Previously held various positions in numerous companies including Senior Auditor at Arthur Andersen (Drs. Prasetio, Utomo & Co.) (1989-1991), Operations Manager of PT ABN Amro Asia Securities (1994-1997), Associate Director of PT Bahana Securities (1997-1998), Director of PT Kustodian Sentral Efek Indonesia (1998-2000), Director of PT Kliring Penjaminan Efek Indonesia (2000- 2005), and Director of Listing of PT Bursa Efek Indonesia (2005-2012)


Agus Yubagyo

Member

Indonesian citizen, born in 1964, Certified Public Accountant (CPA) in Indonesia, obtained his Bachelor of Accounting Degree from Universitas Pembangunan Nasional (UPN Veteran) Negeri  in 1988.

Previously held various positions in several companies such as Audit Manager of KAP Prasetio, Utomo & Co. (1988 – 1999), Operations Director of PT Ceka Jawa Indonesia (1999 – 2001), Audit Partner of KAP Tanzil & Co. (IGAF) (2001 – 2002), Finance Director and Corporate Secretary of PT Zebra Nusantara Tbk. (2002 – 2004), Audit Partner of KAP Paul Hadiwinata, Arsono & Co., (PKF) (2004 – 2006), various positions (Internal Audit Head, Corporate Secretary, Business Development Head, Merger & Acquisition Project Head, Treasury Head, Staff to the CEO) in various companies of Trisakti Group (PT Trisakti Purwosari Makmur, PT Sentosa Abadi Purwosari, PT Purindo Ilufa, PT Mandiri Maha Mulia and PT KT&G Indonesia) (2006 – 2018), and Director of PT Indo Media Universal Group (2019 – 2020).

Independency

The Audit Committee is chaired by an Independent Commissioner with two members consisting of professionals from outside the Company. The Audit Committee performs its function and responsibility without interference from other parties. Audit Committee members are not related to Shareholders, Board of Commissioners, or Board of Directors. In addition, Audit Committee members from outside the Company do not have personal interests/relationships that can have adverse impact on and cause conflict of interest with the Company.

Duties and Responsibilities

The Audit Committee’s duties and responsibilities are providing the Board of Commissioners with opinions regarding reports or other matters submitted by the Board of Directors, identifying matters that require the attention of the Board of Commissioners, and performing other tasks related to the Board of Commissioners’ duties, as follows:

  1. Ensure the implementation of adequate review procedures for information published by the Company, including periodic financial statements and other financial information submitted to the shareholders.
  2. Review audit planning, execution, and results by internal and external auditors in order to ensure audit implementation and reporting are in accordance with the prevailing auditing standard.
  3. Provide recommendations to the Board of Commissioners regarding the appointment of public accounting firm based on independence, scope of work, and fees.
  4. Provide recommendations regarding the improvement of the Company’s internal control system as well as its implementation.
  5. Report the risks faced by the Company and review the implementation of the risk management by the Board of Directors.
  6. Review the Company’s adherence to the capital market laws and regulations as well as laws and regulations in general in relation to its activities.
  7. Prepare annual program or work plan comprised of work schedule and the utilization of required resources.
  8. Maintain the confidentiality of the Company’s documents, data, and information.
  9. Perform other assignments from the Board of Commissioners.

The Company is committed to continuously improving its internal control system on all its business processes. The Boards of Commissioners and Directors and management consistently raise employees’ awareness about strict compliance to the Company’s policies and procedures. The Company’s authorization matrix defines the assignment of authority, responsibility and limits over certain transactions and activities. In addition, proper segregation of duties is observed through all levels of organization.

The effectiveness of internal controls is continuously monitored by the Company’s internal auditors. Significant findings are immediately reported to the management and Audit Committee. Appropriate sanctions are imposed after due process.

Internal Audit Unit is the Board of Directors’ supporting body that assists the management in providing independent and objective assurance and advise to improve the Company’s operational activities through a systematic approach by evaluating and improving the effectiveness of risk management, internal control and governance process.

The Company established the Internal Audit Unit in accordance with OJK Regulation No. 56/POJK.04/2015 on Internal Audit Unit Establishment and Charter Preparation Guideline. In performing its duties and responsibilities, the Internal Audit Unit observes the Internal Audit Unit’s Charter.

Structure and Position

The Internal Audit Unit is led by the Internal Audit Unit Head. The Internal Audit Unit administratively answers to the President Director and functionally to the Audit Committee. The Internal Audit Unit Head is appointed and dismissed by the President Director with the Board of Commissioners’ approval. Members of the Internal Audit Unit answer directly to the Internal Audit Unit Head.

Internal Audit Unit Head’s Profile

David Roganda SE, Ak

Indonesian citizen, born in 1976, obtained his Bachelor of Accounting degree from the Economic Faculty of Padjajaran University, Bandung. Appointed Internal Audit Unit Head in accordance with the Board of Directors’ Decree No. Dir/Ssd.09/24/III.18.

Previously served as Auditor at Joseph Munthe Public Accounting Firm (2000-2005), Accounting Supervisor at PT Pama Persada (2005-2009), and Internal Audit Manager at Goodhope Agro (2009-2013).

Duties and Responsibilities

  1. Prepare annual audit strategy and work plan as well as auditors’ skill and competency development plan in line with the Company’s development and in accordance with inputs from the President Director and the Board of Commissioners.
  2. Prepare and perform audits on the effectiveness of the internal control system and risk management in accordance with the Company’s policies.
  3. Prepare and perform compliance audits on the Company’s management to ensure that all of the Company’s activities are in accordance with the applicable corporate regulations/policies as well as applicable laws and regulations.

The Company has established Code of Conduct in accordance with the Decree of the Board of Directors of PT Madusari Murni Indah Tbk No. Dir/Ssd.21/59/ XII.20 on the Corporate Code of Conduct of PT Madusari Murni Indah Tbk and Subsidiaries (Molindo Group) dated December 29th, 2020.

Basis of Code of Conduct

The Code of Conduct was prepared in accordance with the following applicable laws and regulations:

  1. Law No. 40/2007 on Limited Liability Companies
  2. The Code of Good Corporate Governance 2016 by the National Committee on Governance
  3. OJK Regulation No. 33/POJK.04/2014 on Board of Directors and Board of Commissioners of Listed or Public Companies
  4. OJK Regulation No. 21/POJK.04/2015 on the Implementation of Corporate Governance Guideline for Public Companies
  5. OJK Circular No. 32/SEOJK/04/2015 on the Corporate Governance Guideline for Public Companies
  6. Corruption Eradication Commission Regulation No: B. 1341/01-13/03/2017 on Guidelines on and Limits of Gratuities
  7. The Company’s Articles of Association

Code of Conduct Content

The Company’s Code of Conduct regulates, among others, the following matters:

  1. The Company’s Relationship with Employees
  2. The Company’s Relationship with Customers
  3. The Company’s Relationship with Business Partners
  4. The Company’s Relationship with Shareholders
  5. The Company’s Relationship with Creditors
  6. The Company’s Relationship with Mass Media
  7. The Company’s Relationship with the Community and the Environment
  8. The Company’s Relationship with the Government
  9. Whistleblowing System Policy
  10. Conflict of Interest

Code of Conduct Dissemination

The Code of Conduct has been disseminated to all members of the Company at all organizational levels. The dissemination was conducted through new employee orientation program, distribution of booklets, as well as other activities and other media owned by the Company. In addition, all members of the Company have implemented the Code of Conduct in a consistent and responsible manner.

The Company is equipped with whistleblowing mechanism for violations committed internally within the Company by the Company’s bodies or employees through the Human Resources Division. Whistleblowers’ identity is kept confidential to protect them from threats, harassments, and retaliations. The investigation into the reported violations and subsequent imposition of sanctions are conducted in accordance with the Company’s regulation and the prevailing laws and regulations.

Public Accountant

Kantor Akuntan Publik Gani Sigiro & Handayani (Grant Thornton)

Sampoerna Strategic Square, South Tower level 25, Jl. Jend. Sudirman No.Kav. 45-46, RT.3/RW.3, Kuningan,
Setia Budi, Kota Jakarta Selatan, Daerah Khusus Ibukota Jakarta 12930

(021) 57952700

Share Registrar

PT Adimitra Jasa Korpora

Kirana Boutique Office Blok F3 No. 5. Jl. Kirana Avenue III, Kelapa Gading Jakarta Utara 14240

021-2974 5222

021-2928 9961

The Company’s activities are exposed to various financial risks such as market risk (including foreign exchange rate risk, price risk and interest rate risk), credit risk and liquidity risk. The Company’s overall risk management program is focused on unpredictable financial markets and the Company strives to minimize the effects that have the potential to harm financial performance.

The Company uses various methods to measure the risks it faces. This method includes sensitivity analysis for interest rate risk, exchange rates and other price risks.

Market Risk

Foreign Exchange Rate Risk

The Company is exposed to foreign exchange risk arising from various currency exposures. Foreign exchange risk arises from future commercial transactions and recognized assets and liabilities. Management has established a policy that requires the Company to manage the risk of foreign exchange rates against its functional currency.

Price Risk

The Company is exposed to price risk, mainly due to purchase of molasses which is the main material. The molasses price is affected by several factors, such as demand and supply. The effect of price risk results to an increase in production cost.

Interest Rate Risk

The Company’s exposure to interest rate risk is mainly related to loans and interest-bearing assets and liabilities, such as bank loans. The Company’s policy is to get the most favorable interest rates.

Credit risk

The Company has credit risks that mainly come from deposits in banks, credits given to customers, and other receivables. The Company manages credit risk associated with deposits in banks by monitoring reputation and limiting the aggregate risk to any individual counterparty.

With regard to credit exposure given to customers, most of which come from sales activities, the Company monitors the credit portfolio on an ongoing basis and manages the collection of receivables to minimize credit risk.

There is no concentration of credit risk as the Company has diversified its portfolio to various customers. There has been no history of significant defaults from customers.

Liquidity Risk

Liquidity risk is a risk wherein the Company may not be able to meet its current obligation. Prudent liquidity risk management includes managing the profile of borrowing maturities and maintaining sufficient cash and cash equivalents, and ensuring the availability of funding from an adequate amount of committed revolving credit facilities.

The Company’s ability to fund its borrowing requirements is managed by maintaining diversified funding sources with adequate committed funding lines from high quality lenders and by monitoring rolling short-term forecasts of the Company’s cash and debt on the basis of expected cash flows.

In addition, the Company monitors the timely collection of its trade receivables on weekly basis and immediately sends reminder to customers for any delay in payment.

Evaluation of the Effectiveness of the Risk Management System

The Company identifies and evaluates risks through each department. The Board of Directors together with the Internal Audit Unit and the Board of Commissioners represented by the Audit Committee conduct a study and formulate the management and mitigation strategies needed. In addition, the risk management system implemented by the Company is able to mitigate any possibility of risk occurrence.

The amount of remuneration for the Board of Commissioners, the Board of Directors, and the Audit Committee is determined based on key performance indicators as well the Company’s financial condition. The Annual GMS authorizes the Board of Commissioners to determine the remuneration of the Board of Directors, the Board of Commissioners, and the Audit Committee.

Pursuant to Financial Services Authority Regulation No. 35/PJOK.04/2014 on Corporate Secretary of Listed or Public Companies, the Board of Directors had appointed Jose G. Tan who domiciled in Jakarta as Corporate Secretary in accordance with the Decree of the Board of Directors No. Dir/JKT.MMI/01/VII.19 dated July 31st, 2019.

Profile

Jose G. Tan

His profile is available under the Board of Directors’ Profile section.

Duties and Responsibilities

The duties and responsibilities of Corporate Secretary are as follows:

  1. Keep abreast of capital market’s development, particularly with regard to new capital market regulations.
  2. Advise the Board of Directors and Board of Commissioners on matters relating to compliance with capital market laws and regulations.
  3. Assist the Board of Directors and Board of Commissioners in implementing GCG that includes the following matters:
    1. Disclosure of information to the public, including ensuring the availability of information on the Company’s website.
    2. Submission of reports to OJK in a timely manner.
    3. Implementation and documentation of the GMS.
  4. Act as liaison between the Company and the Company’s shareholders, OJK, and other stakeholders.