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Guidelines Home > INVESTOR RELATION > Corporate Governance > Guidelines

GOOD CORPORATE GOVERNANCE

 

The Company is committed to achieving and maintaining high standards of corporate governance, in compliance with the principles and guidelines set out in the new Code of Corporate Governance 2005 ("Code 2005") and the Best Practices Guide issued by the Singapore Exchanges Securities Limited (the "SGXST") and these are in line in principle with the Indonesian Code of Good Corporate Governance 2001 and other prevailing standards adopted and used in Indonesia.

 

The corporate governance practices of the Company in 2008 are described herein under the following sections:

 

The Board's Conduct of its Affairs

Principle 1: Every company should be headed by an effective Board to lead and control the company.

 

Board Composition and Balance

Principle 2: There should be a strong and independent element on the Board, which is able to exercise objective judgment on corporate affairs independently, in particular, from Management. No individual or small group of individuals should be allowed to dominate the Board's decision making.

 

 

Board of Commissioners

Under the Company's Articles of Association, the Board of Commissioners, which has the task of supervising the Company's management, must consist of at least three members, including the President Commissioner. A company listed on the Jakarta Stock Exchange and Singapore Exchange Securities Trading Limited (SGX), such as the Company, is also required to have independent commissioners (or independent non-executive director in the case of Singapore Exchange requirement) as members of its Board of Commissioners. The principal functions of the Board of Commissioners are to give advice to and supervise the policies of the Board of Directors. The Board of Commissioners is required to perform its duties in good faith and in the best interests of the Company.

 

Meetings of the Board of Commissioners may be held at any time deemed necessary by the President Commissioner or two members of the Board of Commissioners, or upon the request in writing from either one or more members of the Board of Directors or one or more of the shareholders jointly representing at least one-tenth of the total voting shares issued by the Company. A meeting of the Board of Commissioners will be valid and entitled to adopt binding resolutions only if more than 50 percent of the members of the Board of Commissioners are present and/or represented at the meeting.

 

The members of the Board of Commissioners are appointed and dismissed by a general meeting of shareholders. Each Commissioner is granted an honorarium for serving, the amount of which is determined at a general meeting of shareholders.

 

Board of Directors

The Board of Directors manages the Company on a day-today basis. Under the Articles of Association of the Company, the Board of Directors is required to be made up of at least three members, one of whom is the President Director and if deemed necessary, one or more Directors may be appointed as Vice-President Director. The Board of Directors is required to perform its duties in good faith and in the best interests of the Company.

 

The Board of Directors has the power to perform for and on behalf of the Company all transactions concerning the Company's management and administration. However, pursuant to the Company's Articles of Association and in conjunction with the Indonesian Company Law, certain actions of the Company require written approval or the relevant deed relating to such actions must also be signed by the President Commissioner or in the absence of the President Commissioner by two other Commissioners.

 

Meetings of the Board of Directors may be held at any time deemed necessary by the President Director or one or more members of the Board of Directors, or upon the request in writing from either one or more members of the Board of Commissioners or one or more of the shareholders jointly representing at least one-tenth of the total voting shares issued by the Company.

 

A meeting of the Board of Directors will be valid and entitled to adopt binding resolutions only if more than 50 percent of the members of the Board of Directors are present or represented at the meeting. All meetings of the Board of Directors are chaired by the President Director. In the event of the absence or disability of the President Director, the impediment of which need not be evidenced to any third parties, a meeting of the Board of Directors will be chaired by another member of the Board of Directors specifically appointed by the meeting of the Board of Directors. Resolutions of a meeting of the Board of Directors are generally adopted on the basis of a mutual consensus. In the event a mutual consensus is not reached, then a resolution may be adopted on the basis of an affirmative vote of more than 50 per cent. of the members of the Board of Directors present and/or represented at the meeting. Performance Management and Crisis Management are the training held by the Company to improve competency of the Board of Directors.

 

The members of the Board of Directors are appointed and dismissed by a general meeting of shareholders. In accordance with the Company's Articles of Association, members of the Board of Directors may be given monthly salary and other benefits, including pension benefits, which amount shall be determined by the General Meeting of Shareholders of the Company. The authority of the General Meeting of Shareholders to determine the amount of the salary and benefits of each member of the Board of Directors may be delegated to the Board of Commissioners.

 

Management Responsibilities

Principle 3: There should be a clear division of responsibilities at the top of the company - the working of the Board and the executive responsibility of the company's business - which will ensure a balance of power and authority, such that no one individual represents a considerable concentration of power.

 

The roles of President Director and those of the other executive directors are separate to ensure an appropriate balance of power, increased accountability and greater capacity of the Board for independent decision making. They are not related to each other.

 

The President Director's role in the Board of Directors includes

among others, the following:

 

a) schedule meetings that enable the Board to perform its duties responsibly while not interfering with the flow of                 the company's operations;

b) prepare meeting agenda in consultation with the Board;

c) exercise control over quality, quantity and timeliness of the flow of information between Management and the Board;

d) assist in ensuring compliance with company's guidelines on corporate governance.

 

Board Membership

Principle 4: There should be a formal and transparent process for the appointment of new directors to the Board. As a principle of good corporate governance, all directors should be required to submit themselves for re-nomination and re-election at regular intervals.

 

Nomination Committee

The Nomination Committee members are Alan Jonathan Tangkas Darmawan , Hadi Surya, and Jaka

Prasetya. The Chairman of our Nomination Committee is Alan Jonathan Tangkas Darmawan.

 

Nomination Committee has the duties of, among other things:

* reviewing and assessing candidates for directorships and commissionership before making recommendations

to Shareholders for appointment of Directors and Commissioners;

* reviewing and recommending to our Shareholders the retirement or re-election of Directors and Commissioners in accordance with the Company's Articles of Association at each annual general meeting;

* reviewing the composition of the Company's Board of Directors and Board of Commissioners annually to ensure that we have an appropriate balance of independent Commissioners and to ensure there is an appropriate balance of expertise, skills, attributes and ability among Directors and Commissioners;

* determining annually the independence of the Company's Independent Commissioners, in accordance with applicable codes and guidelines; and

* deciding whether the Directors and Commissioners can continue to contribute effectively and demonstrate commitment to their roles.

 

Board Performance

Principle 5: There should be a formal assessment of the effectiveness of the Board as a whole and the contribution by each director to the effectiveness of the Board.

 

Informed Decision

The decision made by the Board of Commissioners and/or Board of Directors based on:

 

* Discussion of the main topic of an issue/project should be carried out in a correct framework by defining scope of issue/ project, assumption, and its final results.

* Presenting alternatives (by management) to the Board of Commissioners and / or Board of Directors as a basis of the policy / decision taken.

* Delivering integrated and reliable information to the Board of Commissioners and / or Board of Directors as to serve the decision making process which is taken by considering various aspects of the issue / project including paying attention to customers and other stakeholders input and / or perspective

* Final policy approved by the Board of Commissioners and Board of Directors is based on a clear, logic, sound

explanation, and is measurable as well as comparable.

* Decisions are executable and people who implement the decisions should take responsibility for the result and project timeliness.

 

Risk Management

Company manages risk through a framework and processes, whereby a culture of risk awareness and risk management is encouraged in the organization, which involves:

 

* Recognizing the different types of risk the company may

   encounter in running daily operation and/or making

  decision

* Ensuring that there is accountable senior management who

  may answer or take responsibility for mitigating the risk

 

Crisis Management

The Company recognizes various types of crisis such as on site and working environment that requires effective crisis management. Plan for effective crisis management is formulated based on the weakness identified in order to establish a proven and reliable business process.

 

Board of Commissioners and Directors are committed to put into practice Good Corporate Governance in managing the business to achieve Company's objectives. By having a mechanism that promotes good decision making process, recognize and address business risk, as well as being prepared to deal with event of crisis the Company is well equipped to running an effective business. Coupled with good cost control mechanism the Company surely will deliver a sustainable growth and worthy investment results.

 

Corporate Secretary

Currently the Corporate Secretary post is held by Wong Kevin, who is also a Director of the Company. For the resume of Mr. Wong Kevin, please refer to the Board of Directors' profile. The tasks and function of the Corporate Secretary are as follow:

 

* keep informed with respect to capital market developments,

  especially capital market regulations;

* provide the public with all information needed by investors

  regarding the condition of the Company;

* make recommendations to the Company's Board of Directors

  with respect to compliance with the applicable law, rules,

  and regulation;

* act as the Company's contact person with capital market

  authorities and the public.

 

Board Meetings and Access to Information

Principle 6: In order to fulfill their responsibilities, board members should be provided with complete, adequate and timely information prior to board meetings and on an on-going basis.

 

Prior to each Board meeting, management has an obligation to provide members of the Commissioners and the Directors with timely and complete information to enable members to fulfill their responsibilities. Information provided includes background and explanatory notes on matters to be addressed by the Boards, copies of disclosure documents, monthly internal financial statements, risk management reports, budgets and forecasts. In respect of budgets, any material variance between the projections and actual results should also be disclosed and explained.

 

The Boards have a procedure for commissioners and directors, either individually or as a group, in the furtherance of their duties, to take independent professional advice, if necessary, at the company's expense.

 

Procedures for Developing Remuneration Policies

Principle 7: There should be a formal and transparent procedure for fixing the remuneration packages of individual directors. No director should be involved in deciding his own remuneration.

 

Remuneration Committee

The Company's Remuneration Committee members are Alan Jonathan Tangkas Darmawan, Hadi Surya, and Jaka Prasetya. The Chairman of the Company's Remuneration Committee is Alan Jonathan Tangkas Darmawan. If a member of the Remuneration Committee has an interest in a matter being deliberated upon by the Committee, he will abstain from participating in the review and approval process of the Remuneration Committee in relation to that matter.

 

Remuneration Committee has the duties of, among other things:

* recommending to the Board of Commissioners for

  endorsement, the remuneration policies and guidelines for

  setting remuneration for the Directors, Commissioners and

  key executives;

* Approving performance targets for assessing the performance

  of our Directors; and

* Recommending specific remuneration packages for each

  Director for endorsement by our Board of Commissioners.

 

Level and Mix of Remuneration

Principle 8: The level of remuneration should be appropriate to attract, retain and motivate the directors needed to run the company successfully but companies should avoid paying more for this purpose. A proportion of the remuneration, especially that of executive directors, should be linked to performance.

 

Disclosure on Remuneration

Principle 9: Each company should provide clear disclosure of its remuneration policy, level and mix of remuneration, and the procedure for setting remuneration, in the company's annual report.

 

On the Annual General Meeting of the Company which was held on 29 April 2008, it was resolved that the annual compensation for all members of Board of Commissioners after income tax is not more than Rp 8.000.000.00,- (eight billion Rupiah). The compensation in bands of S$250.000 (except for the President Commissioner which is in the band of S$250.000-S$500.000) paid by the Company to each of the Commissioners for services rendered by them in all capacities to the Company for the years ended 31 December 2008.

 

On the Annual General Meeting of the Company which was held on 29 April 2008, it was resolved that the annual compensation for all members of Board of Directors after income tax is not more than Rp 16.500.000.000,- (sixteen billion five hundred million Rupiah). The compensation is in the band of S$250.000-S$500.000 paid by our Company to each of our Directors for services rendered by them in all capacities to our Company for the years ended 31 December 2008.

 

Accountability and Audit

 

Accountability

Principle 10: The Board is accountable to the shareholders while the Management is accountable to the Board.

 

The Board strives to provide its shareholders with a balanced and understandable assessment of the Company's performance, position and prospects on a quarterly basis. This responsibility extends to interim and other price sensitive public reports, and reports to regulators (if required). The Management provides to all members of the Boards with a balanced and understandable management accounts of the company's performance, position and prospects on a quarterly basis.

 

Accountability to Shareholders

The Board of Commissioners and Board of Directors acknowledge the importance of ensuring high quality, relevant information are made available to shareholders in a timely manner to keep them abreast of all material business matters affecting the Company. Towards ensuring the effective dissemination of information, the Company maintains a Shareholders Communication and Investor Relation Policy. The Policy outlines how the Company identifies and distributes information in a timely manner to all shareholders. It also reinforces the Company's commitment to the continuous disclosure obligations imposed by law, and describes the procedures implemented to ensure compliance.

 

Regulatory Announcements, Annual Reports, Quarterly Financial Results and other relevant information are accessible via the Company's website at www.blt.co.id. Any persons wishing to receive or make any request for documents are able to do so via submission to the Group's website. Additionally, shareholders are encouraged to attend the Annual General Meeting (AGM) which is attended by the Commissioners, Directors and external auditors, where shareholders may raise questions, voice their concerns and vote on proposed resolutions.

 

Financial Reporting

The Board of Directors is committed to providing a balanced and fair view of its financial performance and prospects in all its reports to stakeholders and regulatory authorities. This is channeled through the audited financial statements, quarterly announcements of the Company's unaudited financial results as well as the Remarks from Board of Commissioners, Remarks from Board of Directors and Management Discussion and Analysis in the Annual Report. The Company strives to make timely releases of all result announcements and press releases to the media.

 

In discharging its fiduciary responsibility, the Boards are assisted by the Audit Committee to oversee the financial reporting processes and the quality of the Company's financial statements.

 

Audit Committee

Principle 11: The Board should establish an Audit Committee ("AC") with written terms of reference which clearly set out its authority and duties.

 

The Audit Committee members are Alan Jonathan Tangkas Darmawan, Max Sumakno Budiarto and Jaka Prasetya. The Chairman of our Audit Committee is Alan Jonathan Tangkas Darmawan which was appointed since 19 December 2006.Our Audit Committee is formed by the Board of Commissioners to assist the Board of Commissioners in supervising the Board of Directors and is accountable to the Board of Commissioners.

 

In accordance with Indonesian law and regulations, the Company has appointed one member of our Audit Committee Mr. Max Sumakno Budiarto, who is independent of our Board of Directors and Board of Commissioners, in order to have a mix of relevant skills, experience and other qualities among the members of the Audit Committee to achieve all of the Audit Committee's objectives.

 

The tasks and responsibilities of the Audit Committee are as follows:

 

* Examining the audit plan of the Company's external and

   internal auditor in evaluating the internal accounting system,

  operational supervision, compliance and risk management,

  and ensuring coordination among the internal auditor,

  external auditor and the Company's management at least

  once a year;

* Examining the consolidated financial statement and auditor's

  report on the financial statement, discussing every important

  adjustment and high-risk areas, changes in accounting

  policies, compliance of the reporting to the applicable rules,

  issues found from audit process, including matters which

  the external auditor wish to discuss without the presence of

  management (if necessary), prior to submission to Board of

  Commissioners for approval;

* Examining and discussing with external auditors regarding

  suspicion of fraud, unusual matters or breach of law or

  regulation which might have material effect to the result

  of the Company's operation and/or financial position and

  management's responds on the above issues;

* Examining the cooperation given by the management to the

  Company's auditor;

* Examining the transactions undertaken by the Company

  which involve financial derivative instruments;

* Considering the appointment and re-appointment of external

  auditor and examining the independence and objectivity of

  external auditor annually;

* Examining conflict of interests transactions based on

  applicable rules and regulations;

* Examining and approving the fees of the Auditors of the

  Company;

* Conducting other researches and other tasks assigned by

  Board of Commissioners from time to time on issues which

  require Commissioners' attention;

* Reporting the risks which the Company faces and the

  implementation of risk management by the Company to

  Board of Commissioners;

* Examining and reporting complaints regarding the Company

  to Board of Commissioners;

* Examining the compliance of the Company to all applicable

  rules and regulation in capital market and the law where the

 Company is operating; and

* In general conducting the functions and other tasks which

  are required by applicable law from time to time.

 

Other than the above mentioned tasks, the Audit Committee shall provide a mechanism so that the Company's employees can confidentially communicate the possible breach with regard to financial reports or other matters. The Audit Committee shall examine the findings of internal investigation regarding the issues and whereby fraud or unusual matter is suspected or the failure in internal supervision, or breach of applicable law, rules and regulations which have or may have material impact to the Company's operational result or financial position. The Audit Committee also ensures necessary mitigation measures are taken. Any member of the Audit Committee cannot vote on decision whereby the member has conflict of interests.

Internal Controls

Principle 12: The Board should ensure that the Management maintains a sound system of internal controls to safeguard the shareholders' investments and the company's assets.

 

The Company's management recognized the importance of a good internal control system as an important element in the framework of Good Corporate Governance, which helps the Company to achieve its goals and prevent or detect wrong doings.

 

The Company has established a series of integrated control element, starting with environment control by establishing a strict code of conduct and adopting adherence to its Corporate Values as guidelines in doing business. Activities controls are created by setting a clear division of tasks, authority and responsibility at all level of staff within the organization structure. Proper channels of risk assessment, controlled information flow and communication, and continuous monitoring conducted through internal audit and other collaborative activities,  are all undertaken to safe guard the integrity of the control systems.

 

The essence of the controls is that the Company is aiming to establish and implement internal control system which covers:

* Financial Controls;

* Operational Controls; and

* Compliance Controls

 

 

 

Internal Audit

Principle 13: The Company should establish an internal audit function that is independent from the activities it audits.

 

All levels of staff within the Company are required to adhere to a prescribed internal control system. To ensure the effectiveness of the Company's internal control system, the Board of Directors is assisted by internal auditor.

 

The Role of an Internal Auditor

Internal auditor conducts tests on the sufficiency and compliance on policies, procedures, law and regulations, and verify the reliability of information and financial reports. In addition, internal auditor also provide his views on internal controls and make appropriate recommendations to the auditees to immediately undertake corrective actions on the weaknesses identified during the investigative process and to ensure the completeness of internal control implementation.

 

Communication with Shareholders

Principle 14: Companies should engage in regular, effective and fair communication with shareholders.

 

The Company strives for timeliness and transparency in its disclosures to the shareholders and the public. All information on the Company's new initiatives will be first disseminated via SGXNET and IDXNET followed by a news release, where appropriate. The Company currently holds media and analyst briefing upon the release of its quarterly financial results. In addition to the media and analyst briefings, the Company has taken part in various road shows.

 

Price-sensitive information is first publicly released via SGXNET and IDXNET, either before the Company meets with any group of investors or analysts or simultaneously with such meetings. Results and annual reports are announced or issued within the period prescribed by the SGX-ST.

 

At general meetings of the Company, shareholders are given the opportunity to express their views and ask questions regarding the Company and the Group.

 

During 2008 the Company has conducted several road shows in Indonesia and overseas. Furthermore, in various opportunities the Company has also held analyst meetings and press conference which were aimed to disclose the latest development of the Company. Aside from that, the Company has conducted public exposes which were held at least once a year. Below is the table of the Investor Relations activities across the year 2008.

 

Material Contracts Involving Commissioners', Directors' and Major Shareholders' Interest

 

No material contract has been entered into between the Company and its subsidiaries which involve the interests of each commissioners, directors or controlling shareholder of the Company, either still subsisting at the end of the financial year or it not then subsisting, entered into since the end of the previous financial year.

 

Other Contracts in Relation to Related Party Transactions

 

Other than contracts entered into and disclosed as Related Party Transactions in Note 38 to the Financial Statements, there are no other material contracts, including contracts relating to loans (not being in the ordinary course of business) of the Company, involving Commissioners', Directors' and major shareholders' interests, either still subsisting at the end of the financial year or, if not then subsisting, entered into since the end of the previous financial year.

 

Disclosure of Recurrent Related Party Transaction

 

The amount of the recurrent related party transaction varies depends on the depth of the transaction in a particular year and it is also stated in the note 38 of the notes to the Financial Statements of the Company.

 

Disclosure Of Related Party Transactions of Trading Nature

 

In relation to Related Party Transactions of a revenue of trading nature which are necessary for the Company's day-to-day operations and transacted in the ordinary course of business with related parties, the Company will make an immediate notification or announcement to Bursa Efek Indonesia and Singapore Exchange where appropriate and required.

 

Significant Related Party Transactions are disclosed in note 38 of the Financial Statements. The Company has adopted an internal policy in respect of any transactions with interested persons and has set out the procedures for review and approval of the Company's interested person transactions and its associates, which are covered by a Shareholders' Mandate approved at each general meeting.

 

The Audit Committee reviews the Shareholders' Mandate at regular intervals, and is satisfied that the review procedures for IPTs and the reviews to be made periodically by the Audit Committee in relation thereto are adequate to ensure that the IPTs will be transacted on normal terms and will not be prejudicial to the interests of the Company and its minority shareholders.

 

Dealing In Securities

 

In line with Chapter 12 Rule 18 of the Listing Manual of SGX-ST on dealings in securities, the Company has adopted an internal compliance code which mirrors substantially the provisions of the Best Practices Guide in the Listing Manual to provide guidance to its directors and officers in relation to dealings in its securities.

 

The Company's Code prohibits securities dealings by the Directors and employees while in possession of price-sensitive information. The Company issues regular circulars to its Directors, principal officers and relevant officers who have access to unpublished material price-sensitive information to remind them of the aforementioned prohibition and to remind them of the requirement to report their dealings in shares of the Company. The Directors and employees are also prohibited from dealing in the securities of the Company during the period commencing two weeks before the announcement of financial results of the Company for each quarters of its financial year or six weeks before the yearly financial statements issuance, as the case may be, and ending on the date of the announcement of the relevant results.

 

(c) 2007 PT Berlian Laju Tanker Tbk. All Rights Reserved.