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PT Samator Indo Gas Tbk

Corporate Governance

Risk Management

In carrying out business activities, we realize that risk is an inseparable part in each of its operational activities and may affect the Company’s business results and performance if it is not anticipated and properly managed. Therefore, AGI is committed to apply the best risk management principles in line with the directives of the regulator.

Risks associated with the Company’s business include as follows: 

1. Risks of Increase in Electricity Tariff and Fuel Price

In order to mitigate the risk of increase in electricity tariff and fuel price, the Company uses a product sales price adjustment formula by including the electricity tariff and fuel price as part of the components. Any future increase in tariffs will consequently result in an increase in product sales price.

2. Risk of Interest Rate Fluctuation

The Company is mainly exposed to the risk of interest rate fluctuations mainly from bank loans. The Company considers the current interest rate on bank loans is highly competitive and the investment risk taken will result in satisfactory return on investment. To minimize interest rate risk, the Company actively reviews the bank loans.

3. Risk of Sales Fluctuations Due to Seasonal Factor

This risk can affect analysis results on the Company’s financial performance. However, the effect is generally not reflected if the analysis is carried out annually. To minimize this risk, the Company is actively seeking new customers (other than the government sector) with a normal purchasing pattern.

For more details on our risk management policy, please click on attached document.

In general, the risk management system that the Company has implemented is considered effective in minimizing or even eliminating the existing risks. As the Company’s internal and external situation and condition continue to develop, we will continue to expand, improve or update the existing risk management system to ensure the implementation of preventive policies.