Good Corporate Governance Implementation

PT Surya Esa Perkasa Tbk. (The Company) implements good corporate governance as a principle of all its business, strategic policy, and operational conducts. By implementing the highest standard of GCG, the Company will not fail to comply with regulations and quality standards normally applied to Indonesia’s limited liabilities companies, the oil and gas industry and the Indonesia’s stock market. Moreover, the Company always adheres to international standards and quality which include occupational health and safety, the environment, and corporate social responsibility.

In implementing GCG, the Company refers to the five main principles of GCG, namely transparency, accountability, responsibility, independency, and fairness.

Transparency
The Company provides financial statements, annual reports and other relevant information, in an accurate, clear, and prompt way to both the shareholders and stakeholders.

Accountability
In order to put forward conduct of living accountability, the Company ensures that all decisions on strategic actions will be accounted for and documented in the performance assessment, accounting and internal control reports.

Responsibility
The Company fulfills its responsibility by referring to principles of adherence to the prevailing regulations, in order to deliver more attention to the local community and environment.

Independence
The Company carries out all of its activities independently without any force or pressure from any other parties

Fairness
The Company exercises equal conducts in meeting each of stakeholders’ interest.

The Company believes that its efforts of fulfilling these principles constitute sturdy foundation to creation of longterm value for corporate sustainability. The Company also refers to the Law No. 40 Year of 2007 concerning Limited Liability Companies and the Company’s Articles of Association. This Law specifies provisions on GCG implementation within companies, especially to the extent of GCG structure, and serves as a guideline for implementation of Internal Control and Risk Management systems.

General Meeting of Shareholders

By virtue of the Company’s Articles of Association, General Meeting of Shareholders consists of Annual General Meeting of Shareholders and Extraordinary General Meeting of Shareholders. Annual General Meeting of Shareholders shall be held in 6 (six) months following the latest book year while Extraordinary General Meeting of Shareholders may be held any time as necessary.

Board of Commissioners

The structure of the Board of Commissioners adheres to the requirements of the capital market regulations and the Company’s Articles of Association. It is stated that the Board of Commissioners’ shall consist of at least 2 (two) persons, including an Independent Commissioner. The Board of Commissioners is appointed by the General Meeting of Shareholders for a period of five years, starting from the appointment and until the closing of General Meeting of Shareholders the next five years without prejudice the rights of the General Meeting of Shareholders to dismissal of any members of Board of Commissioners at any time. Details on duties and authority, meeting arrangement, remuneration information, competence enhancement program, and assessment applied to the Board of Commissioners performance are as follows:

Duties and Authorities

The Board of Commissioners is accountable for supervising the Company’s management and delivering of advice to the Board of Directors. The Board of Commissioners duties and authorities, based on the Company’s Articles of Association are as follows :
  • The Board of Commissioners conducts supervisory work on the Company’s policy and management either in terms of corporate management or Company business and gives advice to the Board of Directors;
  • The Board of Commissioners at any time during the Company’s office hours, may enter any buildings or premises used and under control of the Company and reserves the rights to examine all book keeping, letters and other instruments of proofs, makes necessary checks on cash or other related matters, and is authorized to gain access to any actions undertaken by the Board of Directors;
  • While performing duties, the Board of Commissioners is entitled to obtain from the Board of Directors or each member of The Board of Directors all information required by the Board of Commissioners;
  • The Board of Commissioners Meeting may at any time temporarily discharge one or more members of Board of Directors in the event that any member of Board of Directors has been found to be in breach the Company’s Articles of Association and/orto any other prevailing laws, or in a way, considered to be unproductive to the Company’s goals, or ignorant of his/her obligations;
  • Such temporary dismissal shall be informed to the affected Director along with the causes thereof;
  • Within the period of 45 (forty-five) days following such temporary dismissal, the Board of Commissioners shall summons Extraordinary General Meeting of Shareholders which will decide if the affected Director shall receive final discharge or otherwise resume his/ her original position while the affected Director shall be given the chance to be present for explanation;
  • The meeting as mentioned in point 4 of this article shall be chaired by the President Commissioner and when In the event that he/ she cannot be present, reason which is not necessarily proven to the other parties, then the General Meeting of Shareholders shall be chaired by another member of Board of Commissioners appointed by the General Meeting of Shareholders. Summons to such General Meeting of Shareholders shall made in accordance to the provision of Article 10;
  • In the event that no such General Meeting of Shareholders is summonsed within the period of 45 (forty-five) days following the temporary dismissal, then the dismissal shall be void and the affected Director reserves the right to resume his/her original position;
  • In the event that all the members of Board of Directors are temporarily dismissed and consequently the Directors positions are left vacant, then the Board of Commissioner shall temporarily control the Company’s management, and under such circumstance, the Board of Commissioners Meeting is authorized to delegate temporary power to one or more members of Board of Commissioners’ under collective responsibility, one and another, in compliance to provision of Point 6 Article 18.

Board of Directors

The Board of Directors is the Company’s internal organ which is fully accountable for collegial management of the Company. Each of the Board of Directors is in charged of their respective duty and role under the coordination of President Director. Each of the Directors decisions shall be under the collective responsibility of the Board of Directors while final decision shall be in the hand of the President Director as primus interpares. The Board of Directors is appointed by the General Meeting of Shareholders for a period following such appointment up to the closing of Annual General Meeting of Shareholders in the next five year without prejudice to the rights of General Meeting of Shareholders to discharge any of the Board of Directors at any time. Information and Amount of Remuneration Disclosure of the Board of Directors remuneration refers to the Company’s principle of transparency. Procedure for Directors remuneration confirmation by proposing calculation and amount thereof to the General Meeting of shareholders. A. Board of Directors The Board of Directors is the Company’s internal organ which is fully accountable for collegial management of the Company. Each of the Board of Directors is in charged of their respective duty and role under the coordination of President Director. Each of the Directors’ decisions shall be under the collective responsibility of the Board of Directors while final decision shall be in the hand of the President Director as primus interpares. The Board of Directors is appointed by the General Meeting of Shareholders for a period following such appointment up to the closing of Annual General Meeting of Shareholders in the next five year without prejudice to the rights of General Meeting of Shareholders to discharge any of the Board of Directors at any time. B. Duties and Authorities The Board of Directors undertakes any activities related to management of the Company. By virtue of the Company’s Articles of Association, the Board of Directors’ duties and authorities are as follows:
  1. The Board of Directors reserve the rights to represent the Company in or outside the court for matters and any issues; bind the Company with other parties and vice versa; and conduct all activities with regards to either management or ownership of the Company, under the following limitations for which prior approval of the Board of Commissioners are required:
    1. Borrowing or lending cash on behalf of the Company (excluding withdrawal of the Company’s cash fom any banks) amount which exceeds the total US$ 50,000,000 (fifty million United States Dolar).
    2. Establishment of a business entity or involvement in any other domestic or overseas companies.
    3. Signing of any agreement or contract in an amount of exceeding the total of US$ 50,000,000 (fifty thousand United States Dollar).
  2. Exercising any legal action of transferring, releasing of rights or placing warranty in an amount exceeding 50% (fifty-percent) of the Company’s total assets in a book year, either in a single or multiple independent or interrelated transactions upon which prior approval shall be required General Meeting of Shareholdersattended or represented by shareholders who control 3/4 (three fourth) of total shareholding under full votes of the meeting attendees pursuant to the prevailing capital market act.
  3. The President Director reserves the rights and is authorized to act for and on behalf of the Board of Directors. In the event that the President Director cannot be present for any reasons, for which no proof to any third parties is necessary, then Vice President Director reserves the rights and is authorized to act for and on behalf of the Board of Directors to represent the Company. In the event that the President Director and/or Vice President Director cannot be present for any reasons, for which no proof to any third parties is necessary, then one of other Directors reserves the rights and is authorized to act for and on behalf of the Board of Directors to represent the Company.
  4. Distribution of each of the Board of Directors’ duties and authorities shall be confirmed within the General Meeting of Shareholders. In the event that no such distribution has been confirmed within the General Meeting of Shareholders, than such distribution shall be confirmed under the Board of Directors’ decision.
  5. Without prejudice to the Board of Directors’ accountability, the Board of Directors may issue a written proxy to one or more persons to act for and on behalf of the Company to exercise certain legal representation on issues specified within such proxy.
  6. In any circumstances in which the Company is engaged in any interest which is in conflict with the interest of any of the Board of Directors member, then the Company shall be represented by another member of Directors, while in the event that the Company is engaged in any interest which is in conflict with the interest of all of the members of the Board of Directors, then the Company shall be represented by the Board of Commissioners, one and another, without prejudice to the provision of Point 6 of this Article.
Scope of Work and Responsibilities of Board of Directors President Director The President Director’s scope of work and responsibility includes management of the Company in the course of its strategic vision implementation and fulfillment the said vision. In addition to that, the President Director is responsible for establishment of a structure and system which insures that the Company is capable of operating in a smooth way as well as growing in a sustainable manner. Vice President Director The Vice President Director’s scope of work and responsibility includes the Company’s day-to-day operational management as dictated by the Company’s goals and objectives; and implementation of the Company’s policies, plans, principles, values, strategies, goals and performance targets confirmed by the Meeting of Board of Directors, approved and evaluated by the Board of Commissioners. Business Development Director The Business Development Director’s scope of work and responsibility include building good relations with customers, maintaining sustainable relations with business partners and exploring business development adjusted to the Company’s business objectives. Finance Director The Finance Director scope of work and responsibility include implementation of corporate functions with regards to the Company’s finance directorate. The Director of Finance is accountable for good operation of finance function in accordance to the prevailing requirements and assurance of good control on subsidiary’s investment activities. Technical Director The Technical Director’s scope of work and responsibility include operational management of the Company’s LPG plants; implementation of good operation management; assurance of good, sustainable and environment friendly operational performance; and assurance that all of the Company’s operation activities comply with aspects of occupational health and safety.

Corporate Secretary

The Corporate Secretary serves as a liaison officer who maintains good relations with the stock market institution, shareholders, investors and other stakeholders. The Corporate Secretary is also accountable for assurance of the Company’s compliance to the stock market regulations and arrangement of Board of Commissioners’ and Directors’ meetings Duties and Authorities The Corporate Secretary’s Duties and Authorities include:
  1. Assisting the President Director, the Board of Directors and Board of Commissioners in complying with capital market requirements, Indonesia’s Stock Exchange regulations, corporate laws and the Company’s Articles of Association.
  2. Taking an active role in enforcing the highest standard or GCG principles.
  3. Organizing and coordinating the General Meeting of Shareholders, the Board of Directors’ Meetings and other Company’s meetings.
  4. Representing the Company in dissemination of official information on the Company’s activity updates to the public and related parties.

Audit Committee

The Audit Committee is responsible for monitoring of the Company’s financial statement process. In the implementation of the Audit Committee has the following duties and authorities as follows : Duties
  • Conducting review onfinancial information to be issued by the Underwriter or Public Listing Companies to the public and/or the authority including financial statement, financial Projection and other reports related to the Company’s financial information.
  • Conducting review on the Company’s compliance to the prevailing regulations with regards to the Company’s business activities.
  • Delivering independent opinion in the emergence of conflicting opinion between the Company and the appointed on the accountant service.
  • Delivering recommendation to the Board of Commissioners on appointment of accountant on the grounds of independence, scope, assignment and fee.
  • Conducting review on audit result of the internal audit and monitoring of the the Board of Directors follow up on the findings of the internal audit.
  • Conducting review on implementation of risk management undertaken by the Board of Directors in the even that no risk monitoring body is available under the Board of Commissioners.
  • Conducting review on objections on the Company’s accounting and financial report process.
  • Reviewing and delivering advice to the Board of Commissioners on potential emergence of conflict of interest within the Company.
  • Keeping the Company’s documents ,data and information confidential.
Authorities The Audit Committee is responsible for :
  • Gaining necessary access to the Company’s documents, data and information on employees, fund, assets and resources.
  • Communicating directly with the employees, the Board of Directors and any parties running the internal audit, risk management and accounting functions in lieu of Audit Committee’s durties and authorities.
  • Involving any independent party other than member of Audit Committee required to assist in their job (if necessary).
  • Exercising any other authoritie delegated by the Board of Commissioners.
Member’s Independence Based on regulation of Indonesia Financial Service Authority on Audit Committee, the Audit Committee shall consist of three members. Audit Committee shal consist of an Independent Commissioner serving as Chairman, and two other independen members with competence in accounting and finance.

Head of Internal Audit

According to the provisions contained in the Internal Audit Charter, the structure and the position of Internal Audit Units in the Company are as follows:
  1. The Internal Audit Unit is led by a head of the Internal Audit Unit. In terms of the Internal Audit Unit was composed of one internal auditor internal auditor, it is acting as the head of Internal Audit Unit;
  2. The head of the Internal Audit Unit are appointed and dismissed by the President Director upon the approval of the Board of Commissioners;
  3. President Director can dismiss the head of the Internal Audit Unit, after obtaining the approval of the Commissioners, if the head of the Internal Audit Units do not meet the requirements of the Internal Audit Unit as an auditor as provided for in this regulation and/or fails or is not qualified to perform the task;
  4. The head of the Internal Audit Unit is responsible to the President Director.
  5. In the implementation of the Internal Audit Unit’s daily activities, the President Director appoints the Executive Director and/or VP of Finance to coordinate & monitoring execution of daily tasks of Internal Audit Unit;
  6. The Internal Audit Unit staff responsible directly to the head of Internal Audit Unit.
Duties, Responsibility and Authorities According to the Internal Audit Charter, the scope of the duties and responsibilities of the Internal Audit of the Company are set out as follows:
  1. Compile and execute the annual Internal Audit plan.
  2. Test and evaluate the implementation of interen control and risk management systems in accordance with Company policy.
  3. Controling and assessment of efficiency and effectiveness in the areas of finance, accounting, operations, human resources, information technology, marketing and other activities.
  4. Give advice on improvements and objective information about the activities that are checked at all levels of management.
  5. Create reports on audit results and submit these reports to the President Director and Board of Commissioners.
  6. Monitor, analyze and report on the implementation of the follow- up to the improvements that have been suggested.
  7. Working closely with the Audit Committee.
  8. Compile the program to evaluate the quality of the internal audit activity does.
  9. Perform special inspections where necessary.
Internal audit is authorized to:
  1. Access all the relevant information about the Company related duties and functions.
  2. Communicate directly with the Board of Directors, Board of Commissioners, and/or the Audit Committee and a member of the Board of Directors, Board of Commissioners, and/or the Audit Committee.
  3. Hold meetings at regular intervals and incidental to the Board of Directors, Board of Commissioners, and/or the Audit Committee.
  4. Coordination activities with the activities of the external auditor.
Independence According to the Charter of the Internal Audit, the auditor who sits in the Internal Audit Unit are prohibited from remaining assignments and positions as auditors and implementers from all forms of implementation of the operational activities of the Company and the Subsidiary Company.

Internal Control System

With regards to implementation of GCG, the Company applies Internal Control System based on transparency, accountability, responsibility, independency and fairness principles. The Company’s Internal Control System was developed by actively involving close supervision function within the Company’s top management level. In addition, the Internal Audit Unit in the Company, compliance with the duties and responsibilities, conduct an examination and assessment of the efficiency and effectiveness in the field of finance and accounting, as well as implementing the rotation of the audit in order to review the design and implementation of internal controls that have been carried out by each Department in the Company. In addition, the Internal Audit Unit also gives advice on the repair and objective information about the activities that are checked at all levels of management. Evaluation on Effectiveness of Internal Control System Result of evaluation on implementation of internal control system constitutes one of bases for the Management evaluation on effectiveness of said internal control system. Such result of evaluation can be benefited to improve the Company’s management system and policy allowing the Company to run its operation in a more effective way. The Internal Audit Unit has the main responsibility to provide assurance of the good coordination between the functions of the control in the Company so that it can run effectively. 1. Risk Management Risk Management serves as a crucial pillar with regards to GCG. Risk Management shall be applied not merely for compliance reason, but for preventing conditions that potentially deteriorate the Company performance and for preparation of mitigation thereof as well. While running the business, the Company is exposed to a variety or risks, namely Company’s internal risk which takes the form of business activities risk and external risks which include Indonesian social and political situation and risks related to investment on shares. The Company is also a equipped with corporate risk management which focuses on assurance of availability of sufficient financial resources for business operation and development, risk management for foreign exchange, rate of interest and liquidity. The followings are material business risks which may affect the Company’s business activities.
  • Supply of natural gas raw material The Company is highly dependent on supply of raw material from Pertamina EP. Interruption in supply of raw material will affect the Company’s performance, financial condition and business sustainability.
  • Government Policy The Government policy on conversion of kerosene LPG to another alternative source will be a risk. Changes of policy and denial of exploration permit may affect the Company’s business sustainability.
  • Competition and New Competitors Despite the fact that competition in LPG industry is relatively low, the government’s policy on conversion of kerosene to LPG can potentially invite new competitor in LPG industry.
  • Product Substitution In spite of the fact that no substitute for LPG which is the Company’s main product presence of new energy source is possible.
  • Marketing Marketing risk is considered to be low due to Pertamina support as main buyer of the plant’s main product namely LPG as indicated in the LPG trading contract.
  • Fire Production process at the LPG Plants is prone to fire. Therefore, within the LPG plant vicinity smoking and possession of lighter is not allowed. Despite the fact that the Company is covered with insurance scheme under coverage value adjusted to the nature of industry, in when the Company is expose to fire, it is unlikely to resume normal operation in short time which in turn will affect the Company’s income sustainability.
  • Human Resources LPG Plant operation which involves integrated machineries require qualified and experienced human resources.Absence of qualified human resources may affect the LPG plant operation and may in turn affect the Company’s overall performance.
  • Natural Disaster Natural disasters such as earthquake and mud flood resulting from gas well explosion that may happen in some areas in Indonesia, including the Company’s operation area, may affect the Company’s business activities which in turn affect production process, sales and net profit.
2. Indonesia’s Social and Political Risk:
  • Indonesia’s social and political instability may negatively impact the national economic which in turn will leave material negative effect to the Company’s business, finance and prospect.
  • Development of regional autonomy may potentially create unpredictable business atmosphere which will become a burden to the Company.
  • Undergrading of Indonesia’s credit rank and corporate rank may materially and negatively affect the Company in general and share market price in particular.
3. Risk on Investment to The Company’s Shares:
  • The Company’s share price may fluctuate in the future
  • Future sales of the Company’s shares may negatively affect the Company’s share price. In anticipation to risks exposed to the Company, the Company has prepared a mitigation model of risk management system and undertaken the following steps:
  • Integrated anticipation on the Company’s strategy and plan, especially in terms of financial and equity risk management;
  • Management of foreign currency exposure by matching, whenever possible, receivables and payables on each individual currency;
  • Placement of bank balance and time deposit in trusted financial institutions.
  • Arrangement of receivables with trusted and related parties;
  • Maintenance of capital, bank facilities and actual cash flow adequacy;
  • Retention of sufficient fund for purposes sustainable working capital requirement.
4. Corporate Financial Risk Management
  • Foreign Exchange Risk Management of the Company is exposed to the effect of fluctuating foreign exchange rate especially due to the transactions denominated in foreign exchange such as sales, and purchases from inventories and loans. The Company anticipates the risk by managing exposure of foreign exchange by whenever possible matching receivables and payables on each individual currency.
  • Credit Risk Management Credit risk refers to a situation in which a business partner fails to meet his/her contractual obligations resulting in loss to the Company. The Company anticipates the risk by placing bank balance and time deposit in reliable and trusted financial institution. Arrangement of receivables is made with trusted and related parties. Value of financial assets within the financial statement after allowed for loss represents the Company’s exposure to credit risk.
  • Liquidity Risk Management Main responsibility on liquidity risk management lies in the hand of the Board of Directors who has originally established framework of liquidity risk management adjusted to requirement of the Company’s management of liquidity, short-term financing, middle-term financing and long term financing. The Company anticipates such risk by maintaining inventory adequacy and continually monitor bank facility’s outstanding.

Corporate Governance Guidelines

CHAPTER I INTRODUCTION 1. INTRODUCTION
  • As a listed company, PT Surya Esa Perkasa Tbk (the“Company”) always upholds the implementation of good corporate governance in all aspects of its business. The implementation of Corporate Governance Guidelines should not be seen as compliance with rules and regulations only, but beyond that the Company strongly committed to the continuous implementation of the principles of Good Corporate Governance (GCG) in the entire operation of the Company.
  • The Corporate Governance Guidelines are expected to be a value driver in encouraging sound business practices, increased productivity, encouraging efficiency, improving production systems and driving innovation and breakthroughs so that all decision making process in the company can run effective and can create shareholder value continuously.
  • The Company’s Corporate Governance Code or Guidelines are the crystallization of the principles of Good Corporate Governance, applicable Laws and Regulations, the Company’s Vision Mission, and Core Values, and best practices of Corporate Governance standards which was adopted by the Company.
  • 2. PURPOSE
  • The purpose of the Corporate Governance Guidelines is to facilitate effective and prudent management and decision making in the company that can deliver the long-term shareholders value. This policy also shows the structure and relationship between the Company’s organs based on the ethics, culture and values of the Company supported by a system, process, work guidelines and organizational structure to achieve optimum company’s performance. The purpose and objectives of this Corporate Governance Guidelines are:
  • 1. Improve the Company’s commitment in the implementation of good corporate governance in all of its business activities.
  • 2. Achieve the optimal Company’s performance and create long term shareholders value through effective and efficient work methods towards a sustainable growth. 3. Improve the trust of investors, shareholders and all stakeholders.
  • 3. SCOPE
  • The Corporate Governance Guidelines applies to the Board of Commissioners, Directors, Committees and all of the Company employees.
  • 4. REFERENCE
  • 1. Law Republik Indonesia No. 40 Tahun 2007 regarding Limited Liability Company; 2. Law Republik Indonesia No. 8 Tahun 1995 regarding Capital Market; 3. The Good Corporate Governance Indonesia General Guidelines issued by the National Committee on Governance Policy (GCG Guidelines); 4. OJK Regulation Number 21 / POJK.04 / 2014 concerning the Implementation of the Guidelines for Corporate Governance in Public Companies; 5. Company’s Articles of Association.
  • 5. GENERAL PRINCIPLES OF CORPORATE GOVERNANCE The cooperation and good relations between the functions of management and the function of supervision among GCG organs have been a manifestation of GCG operational activities. Each function applies GCG by referring to the general principles that are carried out consistently:
  • 1. Openness Through openness in carrying out the decision-making process and openness in disclosing relevant information about the Company.
  • 2. Accountability Through clarity of functions, implementation, and accountability of company organizations so that management is carried out effectively.
  • 3. Responsibility Through maintaining compliance with applicable laws and principles of healthy corporation.
  • 4. Independence Realized through professional management of the company without a conflict of interest and influence from any party.
  • 5. Fairness Through the application of the principles of justice and equality in fulfilling the rights of each individual, shareholders and other stakeholders in accordance with the prevailing laws and regulations.
  • 6. COMPANY VISION, MISSION AND VALUE VISION To lead Indonesia ‘s drive to world class industrialization. MISSION Add value to Indonesia’s resources by investing in the real sector, developing human capital, reducing the country’s dependence on imports and creating opportunities for further growth. VALUE E.P.I.C (Excellence, Perseverance, Integrity and Care) 7. GOVERNANCE STRUCTURE A business entity in Indonesia begins its compliance with compliance with the provisions in Law No. 40 of 2007 concerning Limited Liability Companies, one of which is related to company organs. The Company has comprehensively owned organs comprising the General Meeting of Shareholders (GMS), the Board of Commissioners, the Board of Directors, the Audit Committee, the Internal Audit and Corporate Secretary. The GMS is the highest forum in the Company, the Board of Commissioners acts as supervisory duty, and the Board of Directors carries out the management of the Company. The Company also always adheres to the Financial Services Authority Regulation (POJK) No. 21 / POJK.04 / 2014 concerning the Implementation of Public Company Governance Guidelines, and the Indonesian Corporate Governance Roadmap issued by the Financial Services Authority and the Indonesian Institute of Corporate Directorship (IICD). CORPORATE ORGANS The Corporate Organs consist of the GMS, the Board of Commissioners and the Board of Directors, which have significant roles in the implementation of the GCG effectively. The Corporate Organs should run each function based on the prevailing regulations and corporate governance principles that each organ has independency in implementing the tasks, function and responsibilities solely for the benefit of company. GMS/RUPS GMS is an organ of the Company that holds authority which not delegated to the BOC and BOD as per prevailing laws and regulation and/or Articles of Association. GMS is a locus for the Shareholders to make important decisions related to the capital invested in the Company, with due observance to the provisions of the Articles of Association and the statutory regulations. Any resolutions adopted at the GMS must be based on the business interests of the Company in the long run. The GMS and or the Shareholders are not allowed to intervene the duties, functions and authorities of the Board of Commissioners and the Board of Directors, without prejudice to the authority of the GMS to exercise its rights in accordance with the Articles of Association of the Company and the statutory regulations. Guidelines: • Decision-making in a GMS must be conducted fairly and transparently with due observance to things necessary to maintain the business interests of the Company in the long term, including but not limited to: • The Board of Commissioners and the Board of Directors who are appointed at a GMS shall consist of persons who are fit and proper to the Company and has complied with the prevailing laws and regulations. • In making decision on whether to accept or reject any reports of the Board of Commissioners and the Board of Directors, it is necessary to also consider the quality of report relating to the GCG; • In determining the external auditor, must consider the opinions of the Audit Committee that are submitted to the Board of Commissioners, both regarding the tender process, the external auditor performance, the amount of fee, until its proposed recommendations; • In the event the Articles of Association of the Company and or the statutory regulations require the GMS decision on matters relating to the Company’s business, the decision made must consider the interests of the Stakeholders; and • In making decision on granting of bonuses, tantiems and dividends, must pay attention to the financial health condition of the Company. • GMS is held in accordance with the best interests of the Company and with due observance to the Company’s Articles of Association and the statutory regulations, and with adequate preparation, so as to be able to make legitimate decisions, then: • The Shareholders are given with the opportunity to submit proposals on the GMS materials and schedule in accordance with the Article Association; • Summons for GMS shall include information on the agenda, date, time and place of the GMS, the provisions of the shareholders are entitled to attend the GMS, • The agenda of the meeting, including the explanation for each agenda as well as information stating that the material related to the agenda of the meeting are available to shareholders since GMS until the date of the GMS is held; • Materials on each agenda as specified in the summons for GMS shall be made available at the Company’s office since the GMS summon date until the date of the AGM, to allow the shareholders to actively participate in the GMS and in the voting responsibly. • The Company shall wites the summary of the GMS with refers to the Articles of Association and the statutory regulations. • Implementation of the GMS is responsibility of the Board of Directors. The Board of Directors shall prepare and convene GMS properly in accordance with the statutory regulations and the Articles of Association of the Company. Rights and Responsibilities of Shareholders Shareholders as the capital owners, have the rights and responsibilities in the Company in accordance with the Articles of Association of the Company and the statutory regulations. In exercising their rights and responsibilities, the following principles need to be considered: • Shareholders must be aware that in exercising their rights and responsibilities shall also pay attention to viability of the Company; and • The Company guarantees the fulfillment of rights and responsibilities of the Shareholders on the basis of fairness principle in accordance with the Articles of Association of the Company and the statutory regulations. Main Guidelines • The Shareholders’ rights are protected and implemented in accordance with the Articles of Association of the Company and the statutory regulations. The Rights of Shareholders essentially include: • Right to attend, express opinions, and vote in GMS on provision that one share gives its holder the right to cast one vote; • Right to receive information on the Company timely, correctly and regularly, except for matters that are confidential in nature, so that enabling the Shareholders to make decision on their investment in the Company based on accurate information; • Right to receive a share from the Company profits that are allocated to the Shareholders in the form of dividends and other profit sharing, in proportional to number of their shares; • Right to obtain full explanation and accurate information regarding procedures to be followed regarding convention of GMS to all of the Shareholders participating in decision-makings, including decision on matters that affect existence of the Company and the rights of Shareholders; and • In the event there are more than one type and classification of shares in the Company, then: (i) each Shareholder has the right to vote in accordance with the type, classification and number of his/her shares; and (ii) each Shareholder has the right to be treated equally based on type and classification of their shares. • In the event to transfer, relinquish rights or as to put as collateral, all or most of the assets of the Company amounting to more than 50% (fifty percent) of the total net assets of the Company either in one transaction or several stand alone or interrelated transactions, the Board of Directors must obtain approval from the GMS. • The Shareholders realize their responsibilities as owners of capital with due observance to the statutory regulations and the Articles of Association of the Company. The Shareholders shall be able to: (i) segregate the Company’s properties from their personal properties; and (ii) separate their functions as Shareholders from their functions as members of the Board of Commissioners or the Board of Directors in case the Shareholders are in office in one of the two organs; The Controlling Shareholders shall be able to: (i) pay attention to the interests of the minority Shareholders and the Stakeholders in accordance with the statutory regulations; and (ii) disclose to the law enforcement agencies on the actual controlling Shareholders (ultimate Shareholders) in case there is alleged violations of the statutory regulations, or in the event required by the relevant authorities; • In the event the Shareholder is a controlling Shareholder in several Companies, efforts shall be made to allow the accountability and inter-company relationship can be conducted transparently. Responsibilities of the Company’ to the Rights and Obligations of the Shareholders • The Company shall protect the rights of Shareholders in accordance with the Articles of Association of the Company and the statutory regulations; • The Company shall maintain a Shareholders Register in orderly manner in accordance with the Articles of Association of the Company and the statutory regulations; • The Company shall provide information on the Company timely, correctly and regularly to the Shareholders, except for the things that are confidential in nature; • The Company shall not be partial to certain Shareholders by providing information that are not disclosed to other Shareholders. Information must be given to all shareholders regardless the type and classification of their shares; and • The Company must be able to provide full explanation and accurate information regarding any convention of GMS. The Board of Commissioners The Board of Commissioners as the Company’s organ has collective tasks and responsibilities to conduct supervision of and give advices to the Board of Directors and to ensure that the Company implements the GCG. However, the Board of Commissioners must not participate in making any operational decisions. Position of each member of the Board of Commissioners, including the President Commissioner are equal. Task of the President Commissioner is to coordinate the activities of members of the Board of Commissioners. To allow the duties of the Board of Commissioners can performed effectively, the following principles need to be fulfilled: Composition of the Board of Commissioners shall enable effective, appropriate and quick decision making, and able to act independently; The Board of Commissioners shall have integrity and shall be professional so that able to perform its functions properly, including ensuring that the Board of Directors pays attention to the interests of all Stakeholders; and The supervisory and advisory functions of the Board of Commissioners include preventive, corrective actions, until suspension. Other principles stated on the Article Association, the Board of Commissioners Charter and others prevailing laws and regulations. Guidelines • Composition, Appointment and Dismissal of the Board of Commissioners • Composition and number of the Board of Commissioners shall be determined by a GMS and comply to the Article Association with due observance to the Vision, Missions and strategic plan of the Company, thus enabling effective, appropriate and quick decision making, and able to act independently; • The Company should have Independent Commissioner in accordance with regulations, include regulation in capital market; • The Board of Commissioners shall be appointed and dismissed by a GMS through a transparent process. Process of assessing candidates for the Board of Commissioners shall be conducted prior to the GMS through Board of Commisioners. Nomination list from the Board of Commissioners submitted to the Shareholder for further processing without restricting other candidates of the before set in the GMS; • Dismissal of members of the Board of Commissioners before expiry of their term of office shall be conducted by a GMS and refers to the Article Association and after the relevant members of the Board of Commissioners have been given with opportunity to defend themselves. Capability and integrity of the Board of Commissioners • The Board of Commissioners must fulfill the requirements and integrity so that performance of the supervisory and advisory functions for the benefit of the Company can be performed properly; • The Board of Commissioners is prohibited to utilize the Company for their personal, familial, or business group and other party’s interests; • The Board of Commissioners shall understand and comply with the Articles of Association of the Company and the statutory regulations pertaining to their duties; and The Board of Commissioners shall understand and implement the CGP in accordance with their responsibilities and authorities. Job Description In optimizing the duties as Board of Commissioners, the Board of Commissioners divide the tasks according to capability and expertise of each Member of the Board of Commissioners with due observance to the scope of the Company’s business. This job description is regulated solely among members of the BOC and set out in the Charter of BOC. Supervisory Function of the Board of Commissioners The Board of Commissioners must not participate in making any operational decisions. In the event the Board of Commissioners make decisions on matters as specified in the Articles of Association of the Company or the statutory regulations, such a decision making shall be conducted in its function as supervisor, thus the decision on operational activities shall remain the responsibility of the Board of Directors. Authorities vested in the Board of Commissioners shall be exercised in its function as supervisor and adviser; In order to perform its functions, the Board of Commissioners have authority for the Corporate Information timely and accurate; The Board of Commissioners shall have a work rule and guideline (Board of Commissioners Charter) so that their tasks can be performed on a well directed and effective manner and can be used as one of tools for assessing performance of the Board of Commissioners. The Company Code of Conduct Members of the Board of Commissioners shall, in performing their duties and responsibilities, be required to comply with the Code of Conduct and prohibited from taking personal advantages, both directly and indirectly, from the Company activities other than salaries and other benefits, including the retirement benefits they receive as Board of Commissioners in accordance with the prevailing statutory regulations; and The President Commissioner is obliged to ensure compliance of all members of the Board of Commissioners with the Code of Conduct, including to settle any conflicts that arise. Conflict of Interest • Conflict of interest is a situation in which there are conflicts between the economic interests of the Company and the personal economic interests of Shareholders, members the Board of Commissioners and the Board of Directors, and Employees of the Company; • In performing its duties and obligations, the Board of Commissioners must always put higher priority on the Company’s interests over the personal or families, as well as other party’s interests; • Members of the Board of Commissioners are prohibited from abusing their position for their personal, familial and other party’s interests or benefits; • The Board of Commissioners must disclose all conflicts of interest at hand as well as potential conflicts of interest or anything that can inhibit members of the Board of Commissioners to act independently; • In the event of discussion and decision-making that contains conflict of interest, the relevant parties are not allowed to participate in it; and • Each member of the Board of Commissioners who has decision-making authority is required on annual basis to make a statement of not having conflict of interest in any decisions that have been made by him/her and has implemented the Code of Conduct as established by the Company. Relationship between the Board of Commissioners and the Board of Directors Collective responsibilities of the Board of Commissioners and the Board of Directors in maintaining viability of the Company in the long run are reflected in: • Proper implementation of the internal control and risk management; • Achieved optimal return to the shareholders; • Protected interests of the Stakeholders fairly; • Achieved leadership succession reasonably for sustainability of management • at all organizational lines. Otherwise provided by the prevailing rules and regulations, the relationship between Commissioners, and Directors as set forth above may include but are not limited to the following: • The Company Long Term Plan, the Work Plan and the Company Budget (Business Plan), and its achievement strategies; • Together with the Board of Director review the Company’s vision and mission values. • Policies in ensuring compliance with the statutory regulations and the Articles of Association of the Company and avoiding any kind of conflict of interest; • Policies and methods of assessment of the Company, business units in the Company and their personnel; • Organizational structure until one level below the Board of Directors that may support the achievement of the Vision, Mission and values of the Company. • Other principles stated on Board of Commissioners Charter, Board of Directors Charter, and/or the Article Association. • The Board of Commissioners and the Board of Directors the Company Long Term and Medium Term Plan and the Company’s Annual Report; • The Board of Commissioners shall have the right to obtain access to the Company information timely and completely; • Reports of Audit results or task performance results of the Internal Audit are submitted to the Board of Commissioners periodically; • If deemed necessary the Board of Commissioners may ask for information directly from the Corporate Secretary, Internal Audit Division (through Internal Audit Committee) and or unit and others team if necessary, related to their task; • The Board of Commissioners may ask the Board of Directors or other officers on acknowledgement of the Board of Directors to attend meetings of the Board of Commissioners; • The Board of Commissioners may attend meetings of the Board of Directors and give opinion on things being discussed; • The Board of Commissioners may suspend the Board of Directors, if the Board members act contrary to the Articles of Association or there is indication of loss of the Company or neglect perform its obligations or there are compelling reasons for the Company by taking into account the provisions as contained in the Articles of Association ; • Minutes of Meeting of the Board of Commissioners and the Board of Directors must be made available when requested by members of the Board of Commissioners and the Board of Directors; and • If there are any things that require follow-up of supervision, the same will be implemented through a special task. Supporting Committee for the Board of Commissioners • The Board of Commissioners may establish Supporting Committee for the Board of Commissioners at Board of Commissioners level in order to assist with the tasks of the Board of Commissioners and to comply with the prevailing statutory regulations at the Company’s expenses. Each Committee shall be chaired by a member of the Board of Commissioners; Establishment of Supporting Committee of the BOC refers to the OJK Rules, SEP have (1) one Supporting Committee of BOC, namelyThe Audit Committee. Duties, authorities, membership and other matters related to the Supporting Committee for Board of Commissioners shall be governed in a separate Charter. Performance Evaluation • Performance evaluation of the Board of Commissioners in detail will be assigned refers to the Decree of the Board of Commissioners and will be evaluated periodically; • Performance evaluation of the Board of Commissioners conducted with self assessment and will comprise 60% of the Committee’s performance at an equal weight and 40% of others’ performance at varying weights; • Performance evaluation of the Board of Commissioners based on an indicator that has been set in the beginning of the year and will prepared by the Company Secretary in accordance with achievement score of the Company and feedback from the Committee then to be by decided by the Board of Commissioners; • The GCG-NR committee responsible for preparing the data needed to evaluate and propose achievements based on data and input from each Supporting Committee of the Board of Commissioners and to propose to the Board of Commissioners convened at the Board of Commissioners; • Performance evaluation of the Baord of Commissioners conducted every year and the result will be reported in GMS. • GMS shall set the indicators of performance achievement of the Board of Commissioners that is the indicator of the successfull of the duties and responsibilities the board of commissioners based on the proposal of the board of commissioners Remuneration • Members of the Board of Commissioners are awarded by salary / honoraria and facilities / benefits, including retirement compensation, the amount of which shall be determined by the GMS; • Remuneration for members of the Board of Commissioners shall be awarded on the basis of a formula set by the previous GMS through a review by the Board of Commissioners; • Board of Commissioners proposes a formula for remuneration of members of the Board of Directors, the amount of which shall be further determined by a Board of Commissioners’ meeting; Reporting On annual basis, the Board of Commissioners shall report the progress of the Company in a Company Annual Report and shall, jointly with the Board of Directors, sign and submit it to the GMS for approval and legalization. Responsibility In performing its duties, the Board of Commissioners is responsible to the GMS; • In condition that the the Company shows any symptoms of significant decline, the Board of Commissoners should report to the General Meeting of Shareholders s to provide suggestions for corrective measures to be taken; • Providing opinions and advice to the GMS regarding any issues that are considered critical to the Company’s management; • To provide feedback on periodic reports of the Board of Directors and at any time as needed on the Company’s development and to report the results of performance of their duties to shareholders. • The Board of Commissioners within their supervisory function shall submit supervision accountability reports of the Company management by the Board of Directors. The supervision report of the Board of Commissioners shall constitute part of the annual report submitted to the GMS for approval; • The granting of approval to the annual report and approval to the financial statements means that GMS has provided acquittal and discharge (acquit de charge) from responsibilities to each member of the Board of Commissioners as far as things are reflected in the annual report, without prejudice to the responsibilities of each member of the Board of Commissioners in the event of any crime or fault or omission that causes damage to any third party that cannot be recovered by the Company’s assets; • Accountability of the Board of Commissioners to the General Meeting of Shareholders is the embodiment of supervision accountability for the Company’s management in the implementation of good corporate governance principles. The Board of Directors The Board of Directors is the Company’s organ that is responsible fully for the management of the Company for the Company’s interests and purposes and representing the Company both inside and outside the court in accordance with the provisions in the Articles of Association of the Company. Basic Principles The Board of Directors the Company’s organ has collegial responsibility in managing the Company. Each member of the Board of Directors may conduct the tasks of making decisions in accordance with their division of work and responsibilities. However, the performance of duties by each member of the Board of Directors shall remain a joint responsibility. Position of each member of the Board of Directors including the President Director are equal. Task of the President Director is to coordinate the activities of the Board of Directors. To allow the duties of the Board of Directors can performed effectively, the following principles need to be fulfilled: • Composition of the Board of Directors shall be such as to enable effective, appropriate and quick decision making, and able to act independently; • The Board of Directors shall have integrity, shall be professional and have experience in their fields; • The Board of Directors is responsible for management of the Company in order to generate profits and growth as well as value added on an ongoing basis to the Shareholders and the Stakeholders; and • The Board of Directors shall be held responsible for its managerial affairs at the GMS in accordance with the prevailing statutory regulations. Guidelines Composition, Appointment and Dismissal of the Board of Directors • Composition and number of the Board of Directors shall be determined by the GMS with due observance to the Vision, Missions and strategic plan of the Company, thus enabling effective, appropriate and quick decision making, and able to act independently; • The Board of Directors shall be elected and dismissed by the GMS through a transparent process. Process of assessing candidates for the Board of Directors shall be conducted prior to the GMS through the Board of Commissioners; and • Dismissal of members of the Board of Directors before expiry of their term of office shall be conducted by a GMS based on reasonable grounds and after the concerned persons have been given with opportunity to defend themselves. Integrity, capability and experience of the Board of Directors The Board of Directors must fulfill the integrity requirement so that the Company management functions can be performed properly; • The Board of Directors is prohibited to utilize the Company for their personal, familial, or business group and other party’s interests; • The Board of Directors must understand and comply with the Articles of Association and regulations pertaining to their duties; • The Board of Directors shall understand and be capable to perform the CGP in accordance with their responsibilities and authorities; and • The Board of Directors shall have adequate experience to perform the roles and functions under its scope of duty. Nomination of the Board of Directors The Board of Directors nomination process shall be conducted through the Board of Commissioners. Results of the nomination conducted by the Board of Commissioners shall be submitted to the Shareholders for selection, without limit the other candidates proposed before before stipulation at a GMS. The Board of Directors members are selected and appointed by the GMS based on the nomination process according to the rules and regulations, including those in the field of Limited Liability Company and based on considerations of integrity, dedication, understanding of problems of management of the Company, adequate knowledge in the field of business of the Company and ability to provide enough time to perform duties; Functions of the Board of Directors The Company management function by the Board of Directors include, among other things: Managerial affairs • The Board of Directors shall establish the Vision, Missions, and values as well as long-term and short-term programs of the Company for submission to and approval by the Board of Commissioners or the GMS in accordance with provisions in the Articles of Association of the Company; • The Board of Directors must be able to control the Company’s resources effectively and efficiently; • The Board of Directors must pay attention to the reasonable interests of the Stakeholders; and • The Board of Directors shall have a work rule and guideline (Board of Directors Charter) so that their tasks can be performed on a well-directed and effective manner and can be used as one of performance assessment tools. Risk Management • The Board of Directors shall establish and implement the Company’s risk management system covering all aspects of the Company’s activities; • For every strategic decision making, including creation of new products or services, its risk exposures shall be taken into account carefully; • To ensure proper implementation of risk management, the Company shall have a working unit or person in charge for the risk control. Internal Control • The Board of Directors shall establish and implement a reliable Company internal control system in order to maintain assets and performance of the Company and to comply with the statutory regulations; • The Internal Audit shall test and review the Company’s internal control system; • The Internal Audit reports to the Director; • Structurally, the Internal Audit is responsible to the Director and has a coordinative relation with the Audit Committee. Communication • The Board of Directors shall ensure the smooth communication between the Company and the Stakeholders by means of empowering the Corporate Secretary functions; • The company shall have a Corporate Secretary whose function may also include Investor Relations; • In the event the Company has no a separate Compliance Division, the function to ensure compliance with the statutory regulations shall be conducted by the Corporate Secretary; and • The Corporate Secretary or the acting Corporate Secretary shall be responsible to the Board of Directors. Report of tasks implementation of the Corporate Secretary shall be submitted to the Board of Commissioners; Social Responsibility • In order to maintain continuity of the Company, the Board of Directors must be able to ensure the fulfillment of social responsibility of the Company; and • The Board of Directors shall have a clear written plan and shall focus on performing the social responsibility of the Company. The Company Code of Conduct • Members of the Board of Directors shall, in performing their duties and responsibilities, be required to comply with the Code of Conducts and prohibited from taking personal advantages, both directly and indirectly, from the Company activities other than salaries and other benefits, including the retirement benefits they receive as Board of Directors in accordance with the prevailing statutory regulations; and • The President Director is obliged to ensure compliance of all members of the Board of Directors with the Code of Conduct, including to settle any conflicts that arise. Conflict of Interest • Conflict of interest is a situation in which there are conflicts between the economic interests of the Company and the personal economic interests of Shareholders, members the Board of Directors and the Board of Commissioners, and Employees of the Company; • In performing their duties and obligations, the Board of Directors and Employees of the Company must always put higher priority on the Company’s interests over the personal or families, as well as other party’s interests; • The Board of Directors and Employees of the Company are prohibited from abusing their position for their personal, familial and other party’s interests or benefits; • A member of the Board of Directors must disclose all conflicts of interest being faced and potential conflict of interest or anything that can inhibit such member of the Board of Directors from acting independently; • In the event of discussion and decision-making that contains conflict of interest, the relevant parties are not allowed to participate in it; and • The Board of Directors and Employees of the Company who have decision making authority are required on annual basis to make a statement of not having conflict of interest in any decisions that have been made by them and have implemented the Code of Conduct as established by the Company. Performance Evaluation • The Board of Commissioners shall set the Key Performance Indicators of the Board of Directors; • The Board of Commissioners shall evaluate the achievement of the Board of Directors to be submitted to the GMS; • Assessment of the performance of the Board of Directors based on the general criteria set forth in the KPI (Key Performance Indicator): • Collective performance of the Board of Directors towards the achievement of the Company in accordance with the Business Plan and or other criteria set by • the Board of Commissioners, after discussion with the Board of Directors; • Individual performance of Directors in achieving the Company’s performance • as listed in the Business Plan/Management Contract and or other criteria set out • in board meetings after discussion with the Board of Directors; • Individual achievement of the Director’s referring to the Business Plan or other • criteria determined by the Board of Commissioners; • The implementation of the principles of GCG, both individually and collectively. Remuneration Remuneration of members of the Board of Directors is decided in the GMS by taking into account the advice of the Board of Commissioners; Remuneration of members of the Board of Directors should be related to job performance evaluation of the Board of Commissioners based on the advice of the BOC; Reporting Regularly, in accordance with the prevailing provisions, the Board of Directors shall make monthly, quarterly, semi-annual and annual reports to the Board of Commissioners, the capital market authorities, the relevant agencies or to the GMS. Responsibility of the Board of Directors • In performing its duties, the Board of Directors is responsible to the GMS; • In performing its duties, the Board of Directors is responsible fully for the Company’s’ interests in achieving its purposes and objectives; • In performing its duties, the Board of Directors shall, in good faith and responsibly, perform its duties with due observance to the Company’s Articles of Association and the prevailing statutory regulations, Stipulations of the GMS and Stipulations of the Board of Commissioners; • The Board of Directors must prepare accountability of management of the Company in the form of Annual Report that contains, among other things, financial statements, the Company activity report, and GCG implementation report; • The Annual Reports must obtain approval of the GMS, and specifically for the financial statements, must obtain legalization by the GMS; • Upon approval on to the annual report and legalization of the financial statements, means that the GMS has give a full release and discharge from responsibilities to each member of the Board of Directors to thee extent they are reflected in the Annual Report, without prejudice to responsibilities of each member of the Board of Directors in the event of any criminal offenses or faults or negligence that result in damages to a third parties which can not be covered by the Company’s assets; and • Accountability of the Board of Directors to the GMS constitutes a manifestation of accountability of the Company management in the framework of implementation of the GCG principles. GCG IMPLEMENTATION BASED ON REGULATION OF THE OJK REGARDING THE IMPLEMENTATION OF GCG IN PUBLIC COMPANY Corporate Governance Guidelines for Public Listed Company issued by the OJK to encourage the adoption of corporate governance practices in accordance with international practice and is expected to be one of the Good Corporate Governance framework i in the capital market industry. This guidance consists of 5 (five) aspects, 8 (eight) the principles of good corporate governance, as well as 25 (twenty-five) on the implementation aspects and principles of good governance, namely: 1. Relationship of Public Company with the Shareholder in Ensuring the Shareholders’ Rights a. Improving the value of General Meeting of Shareholders (GMOS). • The Company has technical procedures for opened or closed voting that promote independency and Shareholders interest. • All members of the Directors and Board of Commissioners are present at Annual GMOS. • Summary of GMOS Minutes is available on the Company’s website by no less than 1 (one) year. b. Improving Communication Quality of the Company with Shareholders or Investors Principle. • The Company has a communication policy with Shareholders or Investors. • The Company discloses its communication policy with Shareholders or Investor in website. 2. Board of Commissioners’ Function and Role a. Strengthening the Membership and Composition of Board of Commissioners. • Determination of number of Board of Commissioners’ member shall consider the condition of the Company. • Determination of Composition of Board of Commissioners’ member considers the variety of expertise, knowledge, and experiences required. b. Improving the Quality of Job and Responsibility Performance of the Board of Commissioner. • Board of Commissioners has self assessment policy to assess the performance of Board of Commissioners. • Self-assessment policy to assess the performance of Board of Commissioners is disclosed in Annual Report of Public Company. • The Board of Commissioners has a policy with respect to the resignation of the member of the Board of Commissioners if such member involved in financial Crime. • Board of Commissioners or Committee that conduct Nomination and Remuneration function arrange succession policy in Nomination process of Directors member. 3. Board of Directors Function and Role a. Strengthening the Membership and Composition of the Board of Directors. • Determination of Number of Board of Directors’ member considers the condition of Public company and the effectiveness of decision-making. • Determination of composition of Board of Directors’ member considers the variety of expertise, knowledge, and experience required. • Member of Board of Directors who is liable for accounting or finance has accounting expertise and/or knowledge. b.Improving the Quality of Job and Responsibility Performance of Board of Directors. •Board of Directors has self-assessment policy to assess performance of Directors. •Directors have a policy related to resignation of Board of Directors member if involved in financial crimes. 4.Participation of Stakeholders’ Improving corporate governance aspect through participation of Stakeholders’. • The Company has a policy to prevent insider trading. • The Company has anti corruption and anti fraud policy. • The Company has policies concerning selection and capability improvement of suppliers and vendors. • The Company has a policy concerning the fulfillment of creditor’s rights. • The Company has a policy of whistleblowing system. • The Company has long-term incentive policy for Directors and employees. 5.Disclosure Information Improving the Implementation of Information Disclosure Principle.The Company takes benefit from the application of a broader information technology other than website as information disclosure media. Annual Report of public company discloses beneficial owner in share ownership of public company of at least 5% (five percent), other than disclosure of beneficial owner in share ownership of public company through major and controlling shareholders.
  • Code of Ethics

    Part 1 INTRODUCTION The implementation of Good Corporate Governance (GCG) is a essential for PT Surya Perkasa Tbk (“Company”) in facing global business developments. GCG is the foundation for the formation of a system, structure, and corporate culture that will become the Company’s competitive advantage in running a business that is professional, sustainable, competitive and value added. GCG gives confidence to every stakeholder that the Company is managed and supervised by the best business practices and in accordance with applicable laws and regulations. For these reason, the Company is committed to implementing GCG consistently in all aspect of its business, and one of them is by enforcing the Company’s Code of Conduct and Business Ethics. Business Ethics regulates how the Company conduct business activities in ethical manner in order to generate profits for shareholders and in accordance with applicable laws and regulations, taking into account the interests of all shareholders. The Code of Conduct is a behavioral guide for Company personnel (Board of Commissioners, Directors, Management, and all employees of the Company) in carrying out business activities in accordance with the Company’s vision, mission and values. The Code of Conduct regulates how Company personnel act with excellence, perseverance, integrity and care by complying with applicable laws and regulations, integrity in all respects, professional, caring for their environment, fast in acting, and responsible for all their actions. The commitment of all Company personnel to implement this Code of Conduct and Business Ethics in the short term is believed to be able to improve the Company’s ability to solve its external and internal problems, and in the long run it will enhance competitiveness and the Company’s ability to grow and give long term value for all shareholders. VISION, MISSION AND CORE VALUES The company has set the Vision, Mission and Corporate Values ​​which are guidelines for behavior for Company personnel in carrying out their daily roles and responsibilities, as follows:  VISION “To lead Indonesia ‘s drive to world class industrialization”  MISSION “Add value to Indonesia’s resources by investing in the real sector, developing human capital, reducing the country ‘s dependence on imports and creating opportunities for further growth”  COMPANY VALUES In carrying out the Mission and realizing the Vision, the Company’s employees are committed to realizing the Corporate Values ​​which consist of:
    • Excellence
    • Perseverance
    • Integrity ; and
    • Care
    PURPOSE
    1. To provide guidelines and instructions for the Company and all employees in carrying out business activities that meet the principles of Good Corporate Governance (GCG);
    2. To provide of guidelines for realizing Company values;
    3. To provide reference for the Company employees to avoid conflicts of interest in carrying out their roles and responsibilities in the work environment.
    BENEFITS The application of Business Ethics and the implementation of the Code of Conduct are consistently expected to provide the following benefits:
    1. Creating a work environment that upholds the values ​​of the Company, which can encourage the Company’s operational activities to become more ethical;
    2. Improving the reputation of the Company which in turn can drive business success in the long run;
    3. Increasing confidence that business activities are managed professionally, prudently, transparently, accountably and fair to achieve the level of profitability expected by shareholders by taking into account the interests of other stakeholders.
    GOOD CORPORATE GOVERNANCE PRINCIPLES Company employees are committed to implementing the best GCG principles which include:
    1. Transparency
    Availability of reliable and relevant information with ease of fair access for all stakeholders.
    1. Accountability
    Clarity of functions, roles and responsibilities of each company manager and supervisor so that company management is carried out effectively.
    1. Responsibility
    Management based on sound corporate principles and compliance with applicable laws and regulations.
    1. Independency
    Professional management of the company without conflict of interest and influence or pressure from any party that is not in accordance with the laws and regulations and sound corporate principles.
    1. Fairness
    Fair and equal treatment to shareholders and other stakeholders, including minority shareholders. Part 2 BUSINESS ETHICS
    1. Business Ethics
    Business Ethics is the expected standard of behavior of the Company in interacting and dealing with stakeholders, such as employees, customers, suppliers, creditors, governments, shareholders, media, competitors, and the surrounding community.
    1. Organizing the Company
    To ensure business continuity and success as a competitive mining contracting company, the Company is responsible for:
    1. Conduct business activities in an ethical manner and comply with applicable laws and regulations;
    2. Commit fully to ethical standards and the implementation of applicable laws and regulations;
    3. Understand and support the development of local communities by applying the principles of mutual respect and mutual development;
    4. Supporting environmental preservation in the Company’s operational area.
    1. Company Ethics to Employees
    The company protects the interests of employees in accordance with applicable laws and regulations and views that employees are one of the valuable assets in supporting the implementation of the mission and the realization of the Company’s vision. Expected ethical behavior in dealing with employees, among others, are:
    1. Provide equal opportunities in terms of remuneration, promotion, and rewards to employees in accordance with performance, competence and loyalty and provide strict sanctions against all forms of violations committed by employees;
    2. Carry out labor processes and decisions concerning the recruitment, development and promotion of employees based on expertise and work performance, regardless of ethnicity, religion, race, nation, gender, or other discriminatory matters;
    3. Creating a safe, healthy, conducive and free work environment from all forms of pressure and intimidation;
    4. Carry out a Collective Labor Agreement (PKB) and Company Regulations consistently;
    5. Respect and respect the rights and obligations of employees based on Company Regulations, Collective Labor Agreements (PKB), and applicable laws and regulations;
    6. Give freedom to employees to express their opinions and aspirations in an ethical manner and do not conflict with applicable laws and regulations.
     
    1. Company Ethics to Customers
    The company views customers as the main reason for doing business, and therefore prioritizes excellent service, is proactive and responsive. The ethical behavior required in dealing with customers includes:
    1. Serve customers politely and professionally;
    2. Deliver information about the Company accurately related to the Company’s business activities and services;
    3. Paying attention to the needs of customers and continuously monitoring, improving services, through improving work standards.
    1. Company Ethics with Suppliers (Vendors)
    The company views the Company as a value added chain that connects suppliers and customers. Ethical behavior that is required in dealing with suppliers, among others, are:
    1. Determine suppliers based on product quality, after-sales service, guarantees, competitive payments, achievements and track records with the principle of mutual benefit between the two parties;
    2. Respect the rights and obligations of suppliers in accordance with the agreement of the agreement and the provisions of the applicable legislation;
    3. Establish open and trusted communication during the procurement process until the rights and obligations of both parties are fulfilled.
    1. Company Ethics with Creditors
    The company views creditors as capital provider partners, both long and short term, to enable the Company to grow and develop. Ethical behavior promoted in dealing with creditors includes:
    1. Basing the selection of creditors in the interests of the Company by considering benefits, costs and risks;
    2. Respecting the rights of creditors including the right to obtain information on the use of funds in accordance with the agreements and applicable laws and regulations;
    3. Comply with the agreement that has been stated in the agreement between the Company and the creditor.
    1. Company Ethics with the Government
    The company establishes harmonious and constructive relationships with the central government and regional governments in the context of business development, compliance with applicable laws and regulations, and improvement of the local and national economy. Ethical behavior is required in dealing with the central government and regional government, including:
    1. Fostering good relations and communication to develop a healthy, competitive business climate and foster national economic competitiveness;
    2. Comply with all applicable laws and regulations relating to the Company’s business, including all business requirements and permits;
    3. Uphold honesty and transparency in dealing with all government agencies and officials;
    4. Ensure transparency, clarity, completeness, and accuracy in each report and request for permission addressed to the Government;
    5. Contribute to the national economy.
    1. Company Ethics to the Community
    The company implements social and community programs to improve the quality of life and empower the potential of the surrounding community. Required ethical behavior in dealing with the community, including:
    1. Maintaining a harmonious relationship with the local community;
    2. Collaborating with community leaders and the government, organizations and related institutions in community development;
    3. Optimizing the Company’s assistance programs to the community and socializing them to improve the Company’s reputation and community empowerment;
    4. Encourage the empowerment of the potential of the surrounding community through mutually beneficial economic and labor cooperation;
    5. Prevent and avoid actions that lead to community discrimination based on ethnicity, religion, race, class, and gender;
    6. Encouraging the Company or the Company and all Company people to play an active role in contributing to the social and economic development of the surrounding community.
    1. Company Ethics to Shareholders
    The company is committed to increasing added value for shareholders and protecting the rights of shareholders in accordance with applicable laws and regulations. Ethical behavior required in dealing with shareholders, including:
    1. Provide equal treatment to all shareholders;
    2. Ensure the fulfillment of shareholders’ rights in accordance with the Company’s articles of association and applicable laws and regulations;
    3. Providing information that has been declared open to shareholders in a timely, accurate, reliable and easily accessible in accordance with applicable laws and regulations.
    1. Company Ethics with Media
    The company is committed to always providing clear and accurate information through the media. Required ethical behavior in dealing with media, among others:
    1. Build and develop relationships with media to enhance reputation and achieve Company goals;
    2. Provide information about the Company’s performance that is accurate and accountable to the public;
    3. Using media as a way to answer questions raised by shareholders, investors, and other third parties.
    1. Company Ethics with Competitors
    In carrying out its business activities, the Company is committed to implementing fair competition and considers competitors as drivers of the Company to always provide the best for customers. Ethical behavior that is required in dealing with competitors, including:
    1. Maintain good relationships and respect the existence of competitors;
    2. Demonstrate healthy and ethical competitive behavior in accordance with Company provisions and applicable laws and regulations;
    3. Making competing companies as a benchmark to improve the Company’s performance.
    Part 3 CODE OF CONDUCT  
    1. Code of Conduct
    Code of conduct is a standard of behavior that must be realized by every company personnel in carrying out their duties and responsibilities and in interacting in the work environment.
    1. Comply with the Code of Conduct and Applicable Regulations
    The Code of Conduct applies to all Company people. The Code of Conduct is designed to ensure that Company people always behave ethically and in line with applicable laws and regulations. If there are provisions in the Code of Conduct that conflict with applicable laws and regulations, the higher legal provisions will apply.  
    1. Occupational Safety and Health
    Company employees must carry out their business activities safely and responsibly, and are committed to creating a safe and comfortable work environment, so that the Company’s employees can do their jobs and be free from accidents and diseases. All Company personnel are obliged to understand, support, assist and implement the application of occupational safety and health as follows:
    1. Prioritizing occupational safety and health is a top priority by managing risk properly and placing it as part of the work culture;
    2. Creating a safe work environment and preventing accidents at work.
    3. Comply with all applicable laws and regulations on occupational safety and health, both at national and international levels;
    4. Ensure that all Company Persons receive good information and training on occupational safety and health procedures;
    5. Instill discipline that occupational safety and health procedures are a condition of employment.
    1. Obedience to Environmental Safety
    The company is committed to managing all environmental impacts from its operations in accordance with applicable laws and regulations. All Company personnel are required to always protect the environment in the following ways:
    1. Comply with applicable environmental regulations;
    2. Minimizing the adverse effects of the Company’s operations on the ecosystem;
    3. Create and maintain an environment that is environmentally friendly by reducing waste disposal, emissions and use of Hazardous and Toxic Materials (B3);
    4. Save energy, electricity, water and other limited resources.
    1. Maintain Company Information
    For business purposes, all Company people play a role and are responsible for maintaining confidential Company information, especially internal information that has not been published to the public, data, or any information that could adversely affect the Company’s business or its share price. All Company personnel must maintain confidential information for:
    1. Prevent the spread of material information that has not been published to anyone, including to a husband or wife, relatives, business colleagues and other external parties;
    2. Maintain the confidentiality of Company information, both while working at the Company and after stopping work.
    1. Work Environment Free of Discrimination
    Employees of the Company are committed to creating a harmonious and comfortable work environment and respecting differences in ethnic groups, skin colors, gender, religion, and between groups in the work environment. To maintain harmony and comfort in the work environment, the Company’s employees are obliged to:
    1. Respect differences in ethnicity, skin color, gender, religion, and between groups in the work environment;
    2. Build good communication between employees and between work units to improve Company performance;
    3. Respect every idea and be open to the possibility of differences of opinion in formulating a decision;
    4. Resolve all forms of discrimination that occur in the work or project environment in accordance with Company Regulations and applicable laws and regulations.
     
    1. The use of Company’s Assets
    The company regulates the use of assets to ensure that all of the Company’s assets, including intellectual property, are used and protected optimally. Therefore, each company employee is obliged to:
    1. Use Company assets responsibly to achieve optimal benefits;
    2. Use assets in accordance with the designation set by the Company and not use them for personal gain;
    3. Recording Company assets in accordance with the standards set by the Company;
    4. Protecting Company assets from risks that harm the Company.
    1. Conflict of Interest
    The company sets policies to avoid the possibility of conflicts of interest in each of its business activities. Conflict of interest occurs when personal interests conflict (or have the potential to conflict) with the interests of the Company. Company employees are obliged to avoid the occurrence of conflicts of interest between personal or group interests with the interests of the Company, directly or indirectly, in the following ways:
    1. Providing written explanations to the party appointed by the Company, which concerns all activities outside the Company, share ownership, and all relationships that may cause a conflict of interest;
    2. Provide written explanations for share ownership in business entities that are partners or competitors of the Company;
    1. Acceptance of Gifts/Prizes
    The company sets a standard of behavior that regulates receiving gifts of any kind from third parties. Acceptance of gifts can cause conflicts of interest and affect the ability to make objective business decisions. Company employees are obliged to refuse the giving of gifts from a known or reasonably suspected third party that the gift is given to influence the Company’s employees to do or not do something in their position that is contrary to their duties and obligations. In the event that the Company’s employees cannot refuse a gift or gift from a third party, the relevant party is obliged to report to the party appointed by the Company for the said receipt.
    1. Narcotics Abuse, Illegal Drugs, Liquor and Gambling
    The company is committed to creating a work environment that upholds moral values ​​and decency and adheres to applicable laws and regulations. Company employees must maintain a healthy and clean work environment by:
    1. Do not abuse (use, distribute, trade and own) narcotics and illegal drugs;
    2. Do not consume alcohol and liquor while in the workplace;
    3. Do not practice gambling in any form.
    Any violation of the abuse of narcotics, illegal drugs, alcoholic beverages and gambling will be subject to sanctions in accordance with Company Regulations and applicable laws and regulations.  Part 4 VIOLATIONS AND SANCTIONS The Code of Ethics and the Code of Business Conduct are the foundation for the Company’s employees in carrying out their roles and responsibilities. Every Company’s personnel is responsible for acting in accordance with the Code of Ethics and the Code of Business Conduct. Company personnel or employees who are proven to have violated the Code of Ethics and the Code of Business Conduct may be subject to sanctions in accordance with the Company Regulations and applicable laws and regulations. Each violation will be recorded and entered into the system of compiling employee records as part of a history of employees who are permanently recorded.
    1. Submission of Reports on Violations
    Company personnel are obliged to submit reports on violations of the Code of Ethics and the Code of Business Conduct. The company follows up on all reports of alleged violations of the Code of Ethics and the Code of Business Conduct and strives to ensure confidentiality and protect the complainant. When recognizing violations of the Code of Ethics and the Code of Business Conduct, Company personnel are required to report them. Full explanations and provisions regarding the submission of reports on violations of the Code of Ethics and the Code of Business Conduct will be further regulated in separate provisions.
    1. Monitoring and Evaluation
    The company periodically evaluates the implementation of the Code of Ethics and the Code of Business Conduct. This guideline will continually be improved according to the development and needs of the Company, and by referring to the Company Regulations and applicable laws and regulations. Part 5 GLOSSARY
    1. Board of Commissioners is a company organ that plays a role and is collectively responsible for supervising and providing advice to the Board of Directors and ensuring that the Company implements Good Corporate Governance.
    2. Board of Directors is a corporate organ that has a collegial role and responsibility in managing the Company.
    3. Conflict of Interest is a situation where there is a conflict of interest caused by the Company’s employees to use their position and authority (either intentionally or unintentionally) in their personal, family or group interests so that the mandated task cannot be carried out objectively and potentially harm the Company.
    4. Business Ethics is a business conduct standard that guides the Company as a business entity in interacting and dealing with stakeholders, such as shareholders, employees, customers, suppliers, business partners, creditors, competitors, the government, and the surrounding community.
    5. Company Personnel are all personnel of PT Surya Perkasa Tbk which include members of the Board of Commissioners, Directors and employees.
    6. Code of Conduct is a behavior that must be carried out by every Company person in carrying out their roles and responsibilities and in interacting in the work environment in accordance with Business Ethics.
    7. Stakeholders are parties interested in the Company, such as shareholders, employees, customers, suppliers, business partners, creditors, competitors, the government, and the surrounding community.
    8. Company Regulations are Company Regulations that apply to the Company and have been approved by the Director General of Industrial Relations Development and Workers’ Social Security or authorized officials according to legislation.
    9. The Company is PT Surya Perkasa Tbk.
    10. The Principles of Good Corporate Governance are the basic principles adopted in managing the Company properly based on the elements of Transparency, Accountability, Responsibility, Independence, and Fairness and Fairness.
    (end) EMPLOYEE COMMITMENT LETTER I am committed to read, understand, accept and implement the contents of the Code of Conduct and Business Ethics book of PT Surya Perkasa Tbk. Sincerely, ———————————– Name & signature title Employee ID Number: