The practice of Good Corporate Governance is a strategic element within the Company’s overall drive to increase value for shareholders and other stakeholders, as well as to maintain a sustainable business growth.
The Company believes that increased value for shareholders and stakeholders as well as sustainable growth can be achieved through the implementation of Good Corporate Governance practices.
More than just a matter of compliance with prevailing regulations, the Company views implementation of Good Corporate Governance as an integral part of sustainable business activities that are based on the highest of ethical standards.
The implementation of Good Corporate Governance involves five core principles guiding the actions of management and employees, namely the principles of transparency, accountability, responsibility, independency, and fairness and equality.
These core principles are manifested within the Company through the corporate governance infrastructure that comprises of the General Meeting of Shareholders, the Board of Commissioners and Board of Directors, assisted by various committees and functional units.
BOARD OF COMMISSIONERS
Generally,the Board of Commissioners is responsible for providing input, guidance, and oversight to the Directors. Prudence, thorough consideration, and strict adherence to the principles of good governance are constantly applied by both the Directors and the Board of Commissioners to manage the Company in line with its established Vision and Mission.
In order to carry out its duties and responsibilities more effectively, the Company needs to have one or more Independent Commissioner in its Board of Commissioners. In line with Capital Market Supervisory Agency (Bapepam) regulations, the definition of an Independent Commissioner is as follows:
- From outside the Company;
- Own no shares, directly or indirectly, in the Company;
- There is no affiliated relationship neither with the Company, Commissioners, Directors, nor the Company’s main shareholders;
- There has no business relations, directly or indirectly, associated with the Company’s business activities.
The Board of Commissioners is comprised of two Independent Commissioners and three Commissioners. With the Independent Commissioners comprising 40% of the total membership of the Board of Commissioners, the Company is confident that the Board of Commissioners can exercise its functions and responsibilities professionally and independently, so that the interests of all shareholders and stakeholder are well protected.
BOARD OF DIRECTORS
Independent and professional cooperation and synergy between the Directors and the Board of Commissioners are critical to the Company’s performance. The Directors are responsible for the Company’s management.
At present, the Company’s Directors consist of 4 professionals who one of the director have no affiliations with the Company’s main shareholders.
As part of the management and oversight of the Company’s operations, the Directors met regularly to ensure that the Company’s management proceeded in line with the objectives that had been set. These meetings also discussed matters such as monthly performance, development of human resource competence, service level improvement, implementation information technology using Enterprise Distribution and Retail System (EDRS) for distribution and LS Retail & Microsoft Dynamics Navision for retail as the Company’s ERP system, the required risk management, efforts to acquire new principals and to expand the Company’s business, and development of distribution infrastructure at all the Company’s branches.
AUDIT COMMITTEE
In performing its duties, the Company’s Board of Commissioners is assisted by the Audit Committee, which is headed by the Company’s Independent Commissioner Mr. Tan Alexander Song and two members, Mrs. Fitria and Mr. Suhardi.
The duties, responsibilities, appointment and qualifications of the members of the Company’s Audit Committee refer to Bapepam Regulation Kep-29/PM/2004, Number IX.I.5 on Establishment and Guidelines for Execution of Work of Audit Committees.
INTERNAL AUDIT
To ensure compliance by all divisions with the Company’s systems, procedures, and regulations, the Company also has an Internal Audit section, responsible directly to the President Director, to exercise the function of internal audit of all divisions. Its audit findings provide material to be analyzed by the Directors, as well as the Board of Commissioners and the Audit Committee, and to be followed up for corrections and improvements in the future. The Internal Audit section is headed by Mr. Eko Yanto as a Manager.
CORPORATE SECRETARY
The management must take responsibility for treating all shareholders equally, whether majority or minority shareholders, local or foreign investors, large or small. In addition, the management must ensure that the Company complies with all applicable regulations, including its own Articles of Incorporation, government regulations, and the relevant capital market regulations. The management is also responsible for providing two-way communication channels between the Company and external parties and the public. All those responsibilities were conducted through mass media publications, investor relations menu updating in website : www.csahome.com and direct meeting with analysts and reporters. The following are some of the activities and publications handled by the Corporate Secretary:
- Quarterly, semiannual, and annual financial reports
- Public Expose
- Press Release
- Meetings with analysts, investors and capital market media
- Meetings with public shareholders
- General Shareholders Meetings
MANAGING THE BUSINESS RISKS
According to the Corporate Responsibilities, refer to Bapepam Regulation: KEP-134/BL/2006, Number X.K.6, whereas all of public listed companies must explain how to manage their business risks, there are some main issues in the Company about that :
1. Risk of Macro Economic Condition
Macro economic condition as influenced by global economic condition and national economic indicators, such as inflation, interest rate, rupiah currency exchange and so on, were anticipated by routine monitoring as well as necessary actions.
2. Risk of Business Competition
The increasing business competition came from new product competitors and/or other new appointed distributors of our existing products, were anticipated by increasing Company’s service level to customers, develop some of effective and efficient marketing programs, tightening cost control, and adopting the Good Corporate Governance principles.
3. Risk of Contract Termination
When the Principals want to distribute their products by themselves, the risk of contract termination can come up. To anticipated that risk, the Company is always increasing the spreading and get the new customers, increasing Company’s service level to customers, and maintaining the good, trustable and win-win relationship with the Principals.
4. Risk of Receivables Payment
When the customers can’t pay the receivables due, the Company will face this risk. To manage this risk, the Company implemented computerized blocking overdue system for the receivables due and also control all the new customers credit limit with prudent and accountable authorization level.
5. Risk of Inventory Control
This risk will come up for the slow moving items that can cause the increasing of dead stock or damage stock. Beside that, the risk also will come up when existing controls can’t prevent to lose the items. To anticipate the slow moving item problem, the Company implemented computerized inventory control management to daily monitoring inventory turnover product per product, and the result will be coordinated to the Principal for next products ordering and delivering activities. For the loss or damage problems, beside implementing the continuous improvement of the loss prevention and inventory handling procedures, the Company also anticipated with insurance and product return agreements.
6. Risk of Fire and Natural Disasters
To avoid the risk of fire and natural disaster, the Company has equipped each warehouse and building with fire extinguishers, conducted strict surveillances and insured of all buildings, warehouses and physical inventories of the Company.
