Pupuk Kaltim is committed to delivering maximum benefits to shareholders and all stakeholders. We recognize that in every business practice, there are elements of uncertainty—both from internal and external environments—that can affect the achievement of company objectives. In the midst of a dynamic and increasingly complex business climate, these uncertainties become risks that cannot be avoided, but must be managed professionally through a robust risk management framework.

Pupuk Kaltim implements a structured and sustainable risk management process to ensure that every potential risk can be identified, evaluated, and mitigated effectively across all business lines.

As a company operating in the fertilizer industry sector, Pupuk Kaltim faces various challenges that can affect operational continuity and the company's long-term strategy. In facing the dynamics of a continuously developing global market and increasingly complex regulatory changes, the company needs to identify and manage emerging risks—risks that have not yet fully materialized but have the potential for significant future impact.

By actively scanning the horizon, Pupuk Kaltim is not only reactive to existing problems, but also proactive in building resilience and agility to face challenges that are not yet fully visible. By understanding and anticipating these risks, Pupuk Kaltim strives to maintain business sustainability and maintain competitiveness in an increasingly competitive market.

As part of its commitment to implementing an integrated and sustainable risk management framework, Pupuk Kaltim consistently conducts risk assessments for every corporate and non-corporate action, including development projects. This assessment is prepared by referring to the Enterprise Risk Management (ERM) framework and the applicable regulations within the state-owned enterprise (BUMN) environment.

Through this assessment, the Company ensures that every potential risk is properly identified and managed to maintain business stability and continuity, covering financial risks, market risks, legal and compliance risks, as well as operational risks.

Risk management at Pupuk Kaltim is not only about procedures and systems, but also about building culture. We emphasize the importance of implementing risk management that becomes part of the DNA of every company employee. For this purpose, we continuously provide various development programs to increase awareness and capabilities of executives and employees.

Investment in this competency aims to ensure that the company is not only reactive to risks, but also proactive in identifying opportunities amid uncertainty. Thus, Pupuk Kaltim is able to face challenges effectively, achieve its business strategy, and continue to grow sustainably.

Pupuk Kaltim applies a measurable approach to assess the quality of risk management implementation and performance evaluation within the Composite Risk Rating assessment, in accordance with the Technical Guidelines SK-7/DKU/MBU/10/2023 issued by the Ministry of State-Owned Enterprises (BUMN). The annual achievement of the Composite Risk Rating serves as a component of the Risk Maturity Index assessment and is also incorporated into the performance incentive calculation formula.

This mechanism aims to ensure that the corporation not only focuses on achieving business targets but also pays attention to prudence and compliance with sound risk management principles.