Board of Commisioners Charter

 

1.      MAIN REFERENCES

1.1.  Law of the Republic of Indonesia No. 40 of 2007 respecting “Limited Liability Company” 

 

1.2.  Law and/or regulations on Capital Market:  

 

1.2.1.    Decision of the Chairman of the Capital Market Supervisory Agency (“BAPEPAM”) No. Kep-13/PM/1997 dated April 30, 1997 respecting Regulation of Bapepam No. IX.J.1 on “Main Points of the Company’s Articles of Association Conducting Equity and Public Corporation natured Bid”

 

1.2.2.      Decision of the Board of Directors of PT. Bursa Efek Jakarta (“BEJ”)No. 305/BEJ/07-2004 (Attachment II) dated

July 19, 2004  in conjunction with Decision of the Board of Directors of BEJ No. Kep-339/BEJ/07-2001 dated July 20, 2001 on “Regulation on Stock Registration Number 1-A” point C with respect to “Independent Commissioner, Auditing Committee and Corporation Secretary” 

 

1.2.3.     Decision of the Chairman of Bapepam No. KEP-29/PM/2004 dated September 24, 2004 superseding decision of the Chairman of Bapepam No. KEP-41/PM/2003 dated December 22, 2003 with respect to Bapepam Regulation No.IX.1.5 on “Formation and Work Implementation Procedure for the Auditing Committee.”

 

1.2.4.      Decision of the Chairman of Bapepam No. KEP-45/PM/2004 dated November 29, 2004 with respect to

Bapepam Regulation No.IX.I.6 on “Board of Directors and Commissioners of Issuing and Public Corporation.”

 

1.3.  Company’s Articles of Association 

 

1.4.  “Guideline to Independent Commissioners and Formation of an Effective Auditing Committee” issued by the National

Committee for Corporate Governance - Indonesia, January 2004 representing one of the best practice.

 

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2.      DEFINITIONS 

The Board of Commissioners shall consists of Commissioners and Independent Commissioners that determined and nominated by the General Meeting of Shareholders (“RUPS”)  as the highest organ of the Company  where in performing their duties they are supported by special committee that formed for such purpose (Auditing Committee, Risk Management Committee etc.) according to the needs. 

 

 

3.      OBJECTIVE 

The formation of the Board of Commissioners has the following objectives:  

 

3.1.  To perform general and/or special supervisory duties to the Board of Directors including to finance reporting process, risk management and internal control system, auditing process conducted either by the Department of Internal Audit or External Auditors as well as the adherence of company to all applicable legislation and/or regulations and to the standards applied within the Company (code of conduct) and Standard Operating Procedure (SOP) and the general as well as particular ethical values.

 

3.2.  To act and behave in accordance with good corporate governance namely by applying the principles of transparency,

accountability, responsibility, independency, reasonability and equitability based on the values applicable within the company and to observe all legislation and/or regulations and Company’s articles of association and to uphold good ethic of business.  

 

3.3.  To provide advices and give recommendation to the Board of Directors and special committees that formed to perform

their respective functions. 

 

3.4.  To fulfill the interest of the stakeholders. 

 

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4.      ORGANIZATION 

4.1.  Membership

 

4.1.1.     The Board of Commissioners consists at least 3 (three) members,

a.    One President Commissioner 

b.    One Vice-President Commissioner, and  

c.    At least 1 (one) Commissioner

(Paragraph 1 of Article 20 of Company’s Articles of Association) 

Should occur any vacancy within the Board of Commissioners then the Board of Commissioner shall comprise the remaining member of the Board of Commissioners still holding office without prejudice to provision of paragraph 10 of Article 20.

 

4.1.2.  At least 30% (thirty percent) of the total members of the Board of Commissioners are Independent Commissioners. 

(Decision of the Board of Directors “BEJ” No.Kep.-305/ BEJ/07-2004 (Attachment II) dated July 19, 2004, provision C.1.a).

 

4.1.3.     Any members of the Board of Commissioners whose term of office has expired, may be reassigned.

(Paragraph 4 of Article 20 of Company’s Articles of Association) 

 

4.1.4.    RUPS from time to time, shall be dismissed to have any members of the Board of Commissioners discharged before his term of office is ended. 

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Such discharge shall come into effect as of the date stipulated by RUPS. (Paragraph 5 of Article 20 of Company’s Articles of Association)

   

4.1.5.    From time to time, RUPS shall be entitled to appoint anyone as a member of the Board of Commissioners to replace any member of the Board of Commissioners resigned from his office in accordance with paragraph 5 of Article 20 of the Company’s Articles of Association or if occur any vacancy or to add the number of member of the Board of Commissioners without prejudice to other provisions of the Company’s Articles of Association.    

 

The term of office of any members of the Board of Commissioners assigned to replace any discharged member of the Board of Commissioners or to fill up any vacancy or to add the number of members of the Board of Commissioners shall be same as that of the member of the Board of Commissioners replaced by him or other members of the Board of Commissioners still holding office. 

(Paragraph 6 of Article 20 of the Company’s Articles of Association)   

 

4.1.6.    Any member of the Board of Commissioners may resign from his office by sending a written notification to the Company at least 30 (thirty) days prior to his date of resign, unless RUPS agrees another length of time for submitting such request for resign.  

 

Such resign  shall take effect as of the date as mentioned in the resign notification provided that it’s written in the upper first sentence or on the date such resign notification is received by RUPS, whichever comes first. Such member of the Board of Commissioners shall be released from the responsibility for all acts conducted during his term of office as a member of the Board of Commissioners if and as of the date RUPS frees said member of the Board of Commissioner from all his responsibilities.

(Paragraph 7 of Article 20 of the Company’s Articles of Association)   

   

4.1.7.     If occur  any  vacant office among  the members of the Board of Commissioner resulting in the number of active members of the Board of Commissioners less than 3 (three), then within the term  of 3 (three) months after the occurrence of such vacancy, RUPS shall be convened to  fill up such vacancy.  

         (Paragraph 10 of Article 20 of the Company’s Articles of Association)

 

4.1.8.   Within the term of 14 (fourteen) days as of the effective date of   assignment  of members of the Board of Commissioners, each member of  the Board of Commissioner shall give written notification of their respective address of correspondence. Each member of the Board of Commissioners shall notify the Board of Directors if occur any change of their address.    

 

4.1.9.    Each replacement of any member of the Board of Commissioners should be registered in the List of Company’s Compulsory Registration pursuant to Law No. 3 of 1982 and Article 111 paragraph 7 of Law No. 40 of 2007 respecting Limited Liability Company. 

 

4.2.  Membership requirements

 

4.2.1.    Anyone who are able to be appointed as a member of the Board of Commissioners are those possessing good ethic and morality and  capability to perform any legal action, never been in bankruptcy or  as a member of the Board of Directors or Commissioners declared as guilty causing bankruptcy to any Company within the period of  5 (five) years prior to his appointment and never been sentenced as being guilty for any criminal act inflicting  financial losses to the state and/or a criminal act in financial area within the period of 5 (five) years prior to his appointment. 

(Article 110 of Law No. 40 of 2007 respecting Limited Liability Company)  

(Decision of the Chairman of Bapepam No.KEP-45/PM/2004 dated November 29, 2004 with respect to Bapepam Regulation NO.IX.1.6 on “Board of Directors and Commissioners of the Issuing and Public Corporation Provision No.1)

 

4.2.2.      Never been discharged dishonorably from any position within the last 5 (five) year period.

 

4.2.3.      Not in forgiveness condition

(Decision of the Board of Directors of “BEJ” No.Kep-305/BEJ/07-2004 with respect to Registration Regulation No.IA dated July 19, 2004, Provision No.III.1.10.5 and III.1.10.6). 

 

4.2.4.      Special requirements to become the Board of Independent Commissioners are as follows:

 

4.2.4.1.  Coming from outside the Company.

 

4.2.4.2.  Not possessing one of the Company’s shareholder either directly or indirectly.  

  

4.2.4.3.  Not in any affiliation relationship with the Company, Board of Commissioners and Board of Directors or Major Shareholder of the Company.

 

4.2.4.4.  Having not any business relationship either directly of indirectly with respect to business activity of the

Company.

(Decision of the Chairman of Bapepam No.KEP-29/PM/2004 dated September 24, 2004 with respect to Bapepam Regulation No.IX.1.5 on “Formation and Work Implementation Guidance for   the Auditing Committee; provision No. 1.b)

 

4.2.4.5.  Not working concurrently as the Director in other Company affiliated with the Registered Company concerned.  

 

4.2.4.6.  To understand the rules and legislation in the field of Capital marker.

(Decision of the Board of Directors of “BEJ” No.Kep-305/BEJ/07-2004 with respect to Registration Regulation No.IA – Attachment II dated July 19, 2004, Provisions of the letter C.2.c and C.2.d).

 

4.2.4.7.  At least one member have comprehension/ proficiency in Finance and or Accounting.

 

4.3.  Period of Assignment 

 

4.3.1.      Members of the Board of Commissioners are nominated and assigned by the General Meeting of Shareholders

for the period of assignment as of the date specified by this RUPS nominating the members of the Board of Commissioners until the closing date of the third RUPS held after the date of assignment of such members of the Board of Commissioners. 

(Paragraph 2 of Article 20 of the Company’s Articles of Association) 

 

4.3.2.      The term of office of any members of the Board of Commissioners shall be ended by itself if such relevant

member of the Board of Commissioners is: 

 

4.3.2.1.   Declared to go bankrupt or under forgiveness based on the judgment of any court having a certain legal

power. 

 

4.3.2.2.   Discharged according to those regulated by paragraph 5 of Article 20 of the Company’s Articles of

Association.

 

4.3.2.3.   Prohibited from holding office as a member of the Board of Commissioners based on applicable laws

and legislation.

 

4.3.2.4.   Resign by giving a written notification as meant in paragraph 7 of Article 20 of this Company’s Articles

of Association.

 

4.3.2.5.   Passed away.  

  

(Paragraph 8 of Article 20 of the Company’s Articles of Association) 

 

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4.4.  Working Principle 

 

4.4.1.    Members of the Board of Commissioners are prohibited, either directly or indirectly from making any falsified statement on the fact, whether or not materially disclosing any facts, in order that it does not make any wrongful views with respect to the Issuing Company or Public Corporation occurring at the time of giving such statement.

(Decision of the Chairman of Bapepam No.KEP-45/ PM/2004 dated November 29, 2004 with respect to Bapepam Regulation NO.IX.1.6 on “Board of Directors and Commissioners of the Issuing and Public Corporation, provision No.3)  

 

4.4.2.     Members of the Board of Commissioners are responsible either separately or collectively for any losses borne by other party as resulted in from any breach to the above working principles, however, any members of the Board of Commissioners cannot be asked for any accountability, either separately or collectively, if such members of the Board of Commissioners has been carefully determining that such statement is correct and not misleading.  

(Decision of the Chairman of Bapepam No.KEP-45/PM/2004 dated November 29, 2004 with respect to Bapepam Regulation NO.IX.1.6 on “Board of Directors and Commissioners of the Issuing and Public Corporation”  provision  No.4 and 5) 

 

4.4.3.    To maintain so as not to occur any conflict of interest,  should  there is any indication of it,  then it must be disclosed clearly and completely (full disclosure).

 

4.4.4.      To uphold independency, objectivity, integrity, dedication, professionalism, competency, commitment and

consistency as well as the general and special ethic. 

 

4.4.5.      To encourage the enforcement the principles of good corporate governance.

 

4.4.6.      To adhere to all applicable laws and/or legislations.

 

4.4.7.      To manage properly all administrative works.

 

4.4.8.   To perform an openness of information as wished by all stated by all applicable law and/or regulations by maintaining confidentiality of all Company’s information  or all matters  contained in the confidentiality agreement involving the Company with other parties.  

 

4.4.9.      Seeking profit neither for himself nor for the purpose of other insider trading from those obtained information.

 

4.4.10.   To gain full understanding on values of the Mission and  Company’s Long Term Plan (RJPP) and reflecting it in  its milestones in the course of the year. 

 

4.4.11.   Active participation in all meetings including capability to deliver and give argumentations as well as

input/suggestions with respect to all Company’s strategic issues.

 

4.4.12.   Have a capability and to follow the events and last development affecting the Company and to use information to asses and direct the performance of the Company both within its short and long term. 

 

4.4.13.   Respecting all conclusions made up by RUPS, the Board of Commissioners and  other Committees  formed by

the Board of Commissioners and/or the Board of Directors in accordance with their respective functions.

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5.      AUTHORITY 

5.1.  The Board of Commissioners shall be responsible to supervise the policies made by the Board of Directors in operating the Company and give counseling to the Board of Directors. Each member of the Board of Commissioners shall be liable for, by good faith and full responsibility, performing the duties by observing all applicable rules and legislations.

(Paragraph 1 of Article 21 of the Company’s articles of Association and article 108 of Law No.40 of 2007 on Limited Liability Company)

 

5.2.  Members of the Board of Commissioner, either separately or collectively, from time to time, within reasonable work hours of the Company, shall be entitled to get access into the building and yard or other premises used or controlled by the Company and be entitled to inspect all books, correspondence and other evidences, to check and match its cash condition and others and to know all actions having been undertaken by the Board of Directors.

The Board of Commissioners, at the Company’s own cost, shall be entitled to request some experts to assist them in performing such inspection.

(Paragraph 2 of Article 21 of the Company’s Articles of Association)  

 

5.3.  The board of Commissioners on the basis of the conclusion made in the meeting of the Board of Commissioners, at any time, shall be entitled to inflict a temporary discharge to one or more members of the Board of Directors if said member of the Board of Directors has committed any act in conflict with the Company’s Articles of Association or other applicable rules and legislation or inflicting any losses to the Company or neglecting his obligations.  

         (Paragraph 4 of Article 21 of the Company’s Articles of Association)  

 

5.4.  This temporary discharge must be notified in written to such relevant member of the Board of Director accompanied by the reasons for such discharge.  

(Paragraph 5 of Article 21 of the Company’s Articles of Association)  

 

5.5.  Within the term of 45 (forty five) calendar days after this temporary discharge, the Board of Commissioners shall be obliged to convene a General Meeting of Shareholders to decide whether to discharge this relevant member permanently or returned to his former position, while such temporary discharged member of the Board of Director shall be invited to attend and given an opportunity to defend himself at this RUPS.

         (Paragraph 6 of Article 21 of the Company’s Articles of Association)  

 

5.6.  Should this RUPS is not held within the period of 45 (forty five) calendar days as of the date of such temporary discharge, then such temporary discharge shall be regarded as annulled by law and the relevant member shall be entitled to again hold his former office. 

(Paragraph 8 of Article 21 of the Company’s Articles of Association)  

 

5.7.  If all members of the Board of Directors are temporarily  discharged  or due to any reason whatsoever, not a single member of the Board of Directors owned by the Company, then within the period of  60 (sixty) calendar days after such occurrence, the Board of Commissioners shall be obliged to convene a General Meeting of Shareholders to appoint new members of the Board of Directors and in such case, the Board of Commissioners are obliged to  manage the Company and entitled to assign any authority temporarily to one or more members among them to manage and represent or act for and on behalf of the Company.

(Paragraph 9 of Article 21 of the Company’s Articles of Association)  

 

5.8.  The Board of Commissioner shall be entitled to get access to any information of the Company timely and completely. The Board of Directors shall be responsible to ensure that such information is submitted to the Board of Commissioner in timely and completely manners. 

 

5.9.  In carrying out their duty and function, if deemed necessary,  the Board of Commissioner may ask for assistance from

independent professional/ consultant at the Company own cost.

 

5.10. If deemed necessary, the Board of Commissioners may request directly information from the Secretary of the Company, the Internal Audit Department (through Audit Committee) and Risk management Function, respecting the implementation of their respective duties. 

 

5.11. The Board of Commissioner may form the committees at Commissioner level aimed at assisting the Board of Commissioners to perform their duties and to adhere to the provisions of applicable law and regulations.

 

5.12. The Board of Commissioners has the authority to assign any duties to these committees related to the tasks and responsibilities of the Board of Commissioners. 

 

 

6.      TASK AND RESPONSIBILITY 

6.1.  The Board of Commissioner’s supervisory task shall be conducted by means of the Audit Committee formed by the Board of Commissioners, the implementation of which, the Audit Committee shall coordinate with the Division of Internal Audit and external auditor or other professionals. 

 

6.2.  General and/or special supervising on managerial implementation of the Company conducted by the Board of Directors either directly or through the Auditing Committee in particular and other committees formed shall cover the followings: 

 

6.2.1.      To supervise the followings: 

 

6.2.1.1.   Financial reporting process (legality, openness, accuracy).

 

6.2.1.2.   Risk management within scope of audit policy and internal control system. 

 

6.2.1.3.   Auditing process conducted both by the Auditing Internal Department and External Auditor.

 

6.2.1.4.   Obedience of the Company to: 

 

a.     All applicable law and/or  regulations.

 

b.     Provisions of the Company’s Articles of Association.

 

c.    Applicable standard of the Company (code of conduct), Standard Operating Procedure (SOP) also general and specific ethic values.   

 

6.2.2.     Supervising to the risk management process within the scope of risk management policies conducted by the Risk Management Committee.

                

6.3. To ask for the reports of the committees both the reports on special assignment  as requested by the Board of Commissioners  and  those on activities having been fixed in the Work Program and Charter Plan of  the respective committees.

 

6.4.  To learn and analyze these reports from the committees.

 

6.5.  Providing the discourse and/or communications and consultation with the committees. 

 

6.6.  Preparing recommendation and delivering it the Board of Directors based on the findings and/or recommendation resulted in from the reports submitted by the committees, results from communication and consultation with the committees and result from review/ supervising conducted by him self.

 

6.7.  Providing the discourse and/or communications and consultation with the committees. 

 

6.8. Demanding the Board of Directors to prepare the plan, time table and person in charge and implementation of recommendations previously submitted and/or result from communications and consultation with the Board of Directors. 

 

6.9.  The Board of Commissioners may request (delegating) the Audit Committee to supervise and to follow-up as well as to analyze the implementation of those recommendations. 

 

6.10. To  recall  the Company to hold  an effective business strategy among others by giving inputs for the

Company’s  Development Plan, Long-Term Plan (RJPP), Work Plan and Annual Budgeting (RKATP).

 

6.11. To recall the Company to assign/employ the members of the Board of Directors and its executives possessing high

competency, professionalism, integrity, dedication, objectivity, commitment and loyalty.

 

6.12. To perform the tasks specially assigned to the Board of Commissioners according to the Company’s Articles of

Association, applicable law and legislation and RUPS.

 

6.13. The Board of Commissioners shall be responsible for RUPS. 

 

6.14. To analyze the three-monthly and annual reports prepared by the Board of Directors.

 

6.15. From time to time, the salary and allowances of the members of the Board of Commissioners shall be determined by RUPS and such authority may be delegated to the Board of Commissioners (Paragraph 8 of Articles 17 of the Company’s Articles of Association).

 

6.16. If all members of the Board of Directors are temporarily  discharged  or due to any reason whatsoever, not a single member of the Board of Directors owned by the Company, then within the period of  60 (sixty) calendar days after such occurrence, the Board of Commissioners shall be obliged to convene a General Meeting of Shareholders to appoint new members of the Board of Directors and in such case, the Board of Commissioners are obliged to manage the Company and entitled to assign any authority temporarily to one or more members among them to manage and represent or act for and on behalf of the Company.

(Paragraph 9 of Article 21 of the Company’s Articles of Association) 

 

6.17. By consistently referring and adhering to the Decision of the Chairman of Bapepam No. KEP-02/PM/2001 dated February 20, 2001 with respect to Bapepam Regulation No.IX.E.2 on “Material Transaction and Change of Primary Business”, the Board of Commissioner shall give agreement to the Board of Directors with respect to the followings: 

 

6.17.1.   To perform any actions as mentioned hereunder, the Board of Directors shall be subject to a prior written

consent of the Commissioners:

    

6.17.1.1. To borrow or lend any amount of money for and on behalf the Company.

                

6.17.1.2. To purchase or by any other ways acquire or sell  or  by any other ways to transfer or  release any rights or to guarantee/ give as collateral any land plot and building/ premises or corporation owned by the Company.   

 

6.17.1.3. To mortgage or by any other way provide any property of the company as security.

 

6.17.1.4. To discharge any security or by any other way to be responsible for any debt of other parties. 

 

6.17.1.5. To establish and run other business.

 

6.17.1.6. To establish, take part or participate in any Company or other corporate body.

 

6.17.1.7. To divert partly or totally the equity participation of the Company or other Corporate Body.   In view of paragraph 2 and paragraph 3 of article 18 of the Company’s Articles of Association and applicable law and legislation.

 

6.17.1.8. The issuance of bonds for the community by the Board of Directors needs a prior written consent of the Company’s RUPS. (paragraph 2 (B) of article 18 of the Company’s Articles of Association) 

 

6.18. The distribution task and authority for each member of the Board of Directors shall be determined by RUPS. Should RUPS fails to determine such distribution of task and authority, then it may be determined by the decision of the Board of Directors. (Paragraph 7 of article 18 of the Company’s Articles of Association) 

 

6.19. If in any  case or transaction the Company has an  interest being contradictory to any personal interest of one member of the Board of Director, then violating the provision of paragraph 18 of this article  5,  in such the case or transaction, the Company shall be represented by 2 (two)  members  of the Board of Directors having not any  interest  in such transaction  and if in the case or transaction the Company has an interest being in conflict  with  the interest of all members of the Board of Directors, then in this case or transaction, the Company shall be represented by the Board of Commissioners.

(Paragraph 8 of Article 18 of the Company’s Articles of Association)