The Company’s business activities are undoubtedly not free from a variety of risks, both internal and external risk. To that end, the Company focuses on implementing a risk management system with prudence and awareness in order to mitigate these risks early. The importance of managing these risks has increased significantly, taking into account the dynamics of the business world, as well as changes and volatility in financial markets both in Indonesia and globally. Therefore, the Company continuously conducts research, reviews, and designs policies to manage risks that may arise in the management of the Company’s business.


Risk Profile

Risk Description

Risk Mitigation Efforts

Interest Rate Risk 

The risk that the fair value of future cash flows will fluctuate due to changes in market interest rates. The interest rate risk of the Company and its subsidiaries mainly arises from long-term loans and consumer financing payables

The Company has no formal hedging policy for interest rate exposures, however, the Company continuously takes into account the sensitivity of possible changes in the loan interest rate

Foreign Exchange Risk

Risk where the fair value or cash flow from a financial instrument will fluctuate due to change in foreign exchange rate. The Company and its subsidiaries are exposed to foreign exchange risks, especially which relates to the cash and cash equivalents in the US dollars

The Company and its subsidiaries have bank balances in foreign currencies that provide limited natural hedging against the impact of fluctuations in the Rupiah exchange rate against foreign currencies

Credit Risk

Credit risk faced by the Company and its subsidiaries arises are from credit granted to customers and placement of current accounts and deposits in banks

The management handles credit risks from the placement of current accounts and deposits, short-term investments, and placement of security deposits in accordance with the policies of the Company and subsidiaries. Investment of excess funds is limited for each bank and this policy is evaluated annually by the Board of Directors

Liquidity Risk 

Risk when the cash flow position of the Company and its subsidiaries indicate that the short-term revenue is insufficient to cover the short-term expenditure

The Company ensures that the Company will always have sufficient cash to meet its liabilities when they are due. To meet this objective, the Company seeks means to maintain cash balances and approved facilities to fulfill the expected cash funds required for a period of at least 180 days