Board. Manual. PT JASA MARGA (PERSERO) Tbk.

Transcription

1 Board Manual PT JASA MARGA (PERSERO) Tbk.

2 PT Jasa Marga (Persero) Tbk BOARD MANUAL VALIDATION SHEET This Board Manual is a form of commitment by the Directors and the Board of Commissioners to the implementation of the Company s Good Corporate Governance (GCG) principles. It explains working procedures for the Directors and the Board of Commissioners to ensure professional, transparent and efficient management of the Company in order to achieve its Vision and Mission. The Board Manual development is based on the Company s conditions and needs. This 2017 Board Manual is an adaptation and improvement to the previous one following the amendments to the Articles of Association and the requirement to comply with the governance under Capital Market regulations. We, the Directors and the Board of Commissioners of PT Jasa Marga (Persero) Tbk, agree to use this Board Manual as a guide to interactions at work in order to create good synergy and cooperation in accordance with GCG principles.

3 Jakarta, 2 January 2018 Board of Commissioners Directors [signed] Refly Harun [signed] Desi Arryani [signed] Muhammad Sapta Murti [signed] Hasanudin [signed] Boediarso Teguh Widodo [signed] Mohammad Sofyan [signed] Sigit Widyawan [signed] Kushartanto Koeswiranto [signed] Sugihardjo [signed] Subakti Syukur [signed] Agus Suharyono [signed] Donny Arsal

4 TABLE OF CONTENTS VALIDATION SHEET TABLE OF CONTENTS CHAPTER I INTRODUCTION A. BACKGROUND B. PURPOSES AND OBJECTIVES C. LEGAL BASIS D. DEFINITION OF TERMS CHAPTER II BOARD OF COMMISSIONERS A. DUTIES OF THE BOARD OF COMMISSIONERS B. RIGHTS AND AUTHORITY OF THE BOARD OF COMMISSIONERS C. OBLIGATIONS OF THE BOARD OF COMMISSIONERS D. REQUIREMENTS TO BE A COMMISSIONER E. MEMBERSHIP OF THE BOARD OF COMMISSIONERS 1. Membership 2. Term of Office 3. Removal of BoC Members 4. Resignation of BoC Members 5. Filling of Vacant Position 6. All Commissioner Positions are Vacant F. INDEPENDENT COMMISSIONERS G. BOARD OF COMMISSIONERS COMMITTEES 1. Audit Committee

5 2. Nomination, Remuneration, and Risk Committee (NRR Committee) H. SECRETARY OF THE BOARD OF COMMISSIONERS I. INDUCTION AND CAPABILITY IMPROVEMENT PROGRAMS 1. Induction Program 2. Capability Improvement Program J. ETHICS OF THE COMMISSIONER OFFICE K. MEETINGS OF THE BOARD OF COMMISSIONERS 1. Types of Meeting a. BoC Meetings b. BoC and BoD Meetings (Coordination Meetings) c. BoC and BoC Committee Meetings 2. Procedures for Holding Meetings L. SUPERVISORY FUNCTION OF THE BOARD OF COMMISSIONERS 1. Scope of Supervision 2. Supervision Mechanism 3. Evaluation of the Management Performance M. BOARD OF COMMISSIONERS PERFORMANCE AND REPORTING 1. Key Performance Indicators (KPI) for the Board of Commissioners and Supporting Organizations 2. Performance Self-Assessment 3. Performance Reporting 4. KPI for BoC Committees CHAPTER III DIRECTORS A. DUTIES OF THE DIRECTORS

6 B. RIGHTS AND OBLIGATIONS OF THE DIRECTORS C. OBLIGATIONS OF THE DIRECTORS D. REQUIREMENTS TO BE A DIRECTOR E. MEMBERSHIP OF THE DIRECTORS 1. Membership 2. Term of Office 3. Removal of BoD Members 4. Suspension of BoD Members 5. Resignation of BoD Members 6. Filling of Vacant Position 7. All Director Positions are Vacant 8. Caretakers for BoD Members F. INDUCTION AND CAPABILITY IMPROVEMENT PROGRAMS 1. Induction Program 2. Capability Improvement Program G. ETHICS OF THE DIRECTOR OFFICE H. MEETINGS OF THE DIRECTORS I. EVALUATING THE PERFORMANCE OF THE DIRECTORS J. CORPORATE SECRETARY K. INTERNAL AUDIT CHAPTER IV INTER-ORGAN ACTIVITIES A. WORKING RELATIONSHIP BETWEEN THE BOARD OF COMMISSIONERS AND THE DIRECTORS B. MEETINGS OF THE BOARD OF COMMISSIONERS AND THE DIRECTORS (COORDINATION MEETINGS)

7 C. GENERAL MEETINGS OF SHAREHOLDERS (GMS) 1. Annual General Meetings of Shareholders (AGMS) 2. Other GMS 3. Mechanism for holding a GMS 4. Chairperson, Rules of Conduct and Minutes of Meetings of GMS 5. Quorum, Voting Right, and Resolution of GMS a. Quorum for GMS b. GMS with agenda item to transfer the Company s assets or to create security for debts over the Company s assets c. GMS to approve a transaction which has a conflict of interest d. GMS to change the composition of directors and commissioners and to amend the Company s Articles of Association not requiring approval of the Minister of Law and Human Rights, to issue equity securities and/or to increase issued and paid-up capital e. GMS to amend the Company s Articles of Association requiring the approval of the Minister of Law and Human Rights f. GMS for amalgamation, takeover, split, filing of petition for bankruptcy of the Company, and dissolution g. Voting Rights

8 h. Passing of Resolutions in GMS CHAPTER V CLOSING A. APPLICATION OF THE BOARD MANUAL B. EVALUATION AND REVIEW

9 CHAPTER I INTRODUCTION A. BACKGROUND The Board of Commissioners and the Directors as an Organ of the Company should make themselves a role model to any persons at PT Jasa Marga (Persero) Tbk (the Company or Cooperation). The duties and functions of these Organs should be performed in good faith, with full sense of responsibility and with strong dedication for the advancement of the Company. The existence of this Board Manual materializes one of the Company s commitments to consistent implementation of Good Corporate Governance (GCG) in its management in order to carry out the mission and achieve the vision specified. GCG is implemented in the Company not only to comply with laws and regulations, but also to be able to consistently apply the GCG principles: transparency, accountability, responsibility, independency and fairness, in all operations of the Company. B. PURPOSES AND OBJECTIVES This manual contains a compilation of corporate legal principles, applicable laws and regulations, resolutions of the General Meetings of Shareholders

10 and provisions of the Company s Articles of Association and Good Corporate Governance best practices, regulating working procedures for the Board of Commissioners and the Directors. The purpose of this manual is to provide a guide for the Board of Commissioners and the Directors to easily understand the rules related to their working procedures and to make their functions clearer in running the Company so as to have a more effective and productive working relationship and to achieve the target performance. The development of a Board Manual should always be in accordance with the Company s needs. Changes made should be based on the applicable regulations and not in violation of the Company s Articles of Association and must be by mutual agreement of the Board of Commissioners and the Directors. Good faith, full sense of responsibility, professional and due care, values that are attached to the offices of commissioners and directors are the general values that must always be observed by the Company s Organs that are charged with duties to supervise and manage the Company. C. LEGAL BASIS

11 1. Laws,, as follows: a. Law Number 40 of 2007 regarding Limited Liability Company. b. Law Number 19 of 2003 regarding State-Owned Enterprises. c. Law Number 31 of 1999 and the amendment number 20 of 2001 regarding Combating Corruption Practices d. Law Number 28 of 1999 regarding Running the State in a Manner That is Clear of and Free from Corruption, Collusion and Nepotism. e. Law Number 5 of 1999 regarding Prohibition of Monopolistic Practices and Unfair Business Competition. f. Law Number 8 of 1995 regarding Capital Market. 2. Government Regulations (Peraturan Pemerintah, PP),, as follows: a. PP Number 45 of 2005 regarding Establishment, Control and Dissolution of State-Owned Enterprises. b. PP Number 44 of 2005 regarding Procedures for Participating and Managing the State Capital in State-Owned Enterprises and Private Companies.

12 c. PP Number 43 of 2005 regarding Merger, Amalgamation, Acquisition and Change of Legal Entity Status of State-Owned Enterprises. 3. Financial Services Authority (OJK) (formerly Bapepam and LK) Regulations,, as follows: a. OJK Regulation Number: 32/POJK.04/2014 and the Amendment Number: 10/POJK.04/2017 regarding Planning for and Holding of General Meeting of Shareholders of Public Companies. b. OJK Regulation Number: 33/POJK.04/2014 regarding Directors and Board of Commissioners of Issuers or Public Companies. c. OJK Regulation Number: 34/POJK.04/2014 regarding Nomination and Remuneration Committee of Issuers or Public Companies. d. OJK Regulation Number: 35/POJK.04/2014 regarding Corporate Secretary of Issuers or Public Companies. e. OJK Regulation Number: 31/POJK.04/2015 regarding Disclosure of Material Information or Facts by Issuers or Public Companies. f. OJK Regulation Number: 55/POJK.04/2015 regarding Formation of and Operating Procedures for Audit Committee.

13 g. OJK Regulation Number: 56/POJK.04/2015 regarding Establishment and Guidelines for Drafting the Internal Audit Unit Charter. h. OJK Regulation Number: 29/POJK.04/2016 regarding Annual Reports of Issuers or Public Companies. i. Bapepam-LK Regulation Number: IX.E.1 regarding Affiliated Transactions and Conflict of Interest in Certain Transactions. j. Bapepam-LK Regulation Number: IX.E.2 regarding Material Transactions and Changes in Core Business Activities. k. Bapepam-LK Regulation Number: IX.J.1 regarding Fundamentals of the Budgeting for Companies Making Public Offering of Equity Securities and Public Companies. l. Bapepam-LK Regulation Number: X.K.2 regarding Obligation to Submit Periodic Financial Statements. m. Bapepam-LK Regulation Number: X.K.7 regarding Periods of Time for Which Periodic Financial Statements and Annual Reports Shall Be Submitted by Issuers or Public Companies Whose Stocks are Listed on Indonesia s and Other Country s Stock Exchanges.

14 n. Bapepam-LK Regulation Number: VIII.G.7 regarding Guidelines for Presenting Financial Statements. o. Bapepam-LK Regulation Number: VIII.G.11 regarding Responsibility of the Directors for Financial Statements. 4. Regulations of the State Minister of State-Owned Enterprises (Minister of SOE RegulationMinister of SOE Regulation),, as follows: a. Minister of SOE Regulation Number: PER- 03/MBU/02/2015 regarding Requirements and Procedures for Appointment and Removal of Members of a State-Owned Enterprise s Directors. b. Minister of SOE Regulation Number: PER- 02/MBU/02/2015 regarding Requirements and Procedures for Appointment and Removal of Members of a State-Owned Enterprise s Board of Commissioners and Supervisory Board. c. Minister of SOE Regulation Number: PER- 04/MBU/2014 and the Amendments regarding Guidelines for Determining Incomes of the Directors, Board of Commissioners, and Supervisory Board of State-Owned Enterprises.

15 d. Minister of SOE Regulation Number: PER- 12/MBU/2015 regarding Supporting Organs of the Board of Commissioners / Supervisory Board of State-Owned Enterprises. e. Minister of SOE Regulation Number: PER- 03/MBU/2015 regarding Guidelines for Appointment of Members of the Directors and the Board of Commissioners of a State-Owned Enterprise s Subsidiaries. f. Minister of SOE Regulation Number: PER- 01/MBU/2011 and thee Amendments Number: PER- 09/MBU/2012 regarding Implementation of Good Corporate Governance in State-Owned Enterprises. 5. Decrees of the State Minister of State-Owned Enterprises (Minister of SOE Decree),, as follows: a. Minister of SOE Decree Number: KEP- 102/MBU/2002 regarding Developing the Long- Term Programs for the Company. b. Minister of SOE Decree Number: KEP- 101/MBU/2002 regarding Developing the Working Plans and Budgeting for the Company. 6. Minister of SOE Circular Letter Number: SE- 08/MBU/12/2015 regarding Business Travel to

16 Foreign Countries for Directors and Commissioners of a State-Owned Enterprise. 7. Minister of SOE s Secretary Decree Number: SK- 16/S.MBU/2012 regarding Indicators / Parameters Used in the Assessment and Evaluation of Good Corporate Governance Implementation by State- Owned Enterprises. 8. The National Committee for Governance Policy (KNKG) Code of GCG Indonesia This Board Manual is subject to the applicable laws and regulations, Resolutions of GMS, and Articles of Association. In the event of inconsistency between the clauses of this Board Manual and any applicable laws and regulations, Resolutions of GMS, and Articles of Association due to amendment / update, the amendment / update to the applicable laws and regulations, Resolutions of GMS, and Articles of Association shall prevail. D. DEFINITION OF TERMS The terms used in this Board Manual shall, save as specified otherwise, have meaning as defined below: 1. Subsidiary means any legal entity which is directly or indirectly owned 50% (fifty per cent) by the Company and/or the financial and

17 operational policies of which is controlled by the Company. 2. BoC Member means a Member of the Board of Commissioners as an individual (rather than as a Board). 3. BoD Member means a Member of the Directors as an individual (rather than as a Board). 4. External Auditor means an independent and professional auditor from outside of the Company which provides audit and non-audit services to the Company. 5. Conflict of Interest means a situation or circumstance in which a person who by his/her position/office has authority that is likely to be misused intentionally or unintentionally for the interests of others, thus affecting the quality of his/her decision and the performance of such decision and finally causing losses on the Company. 6. Corporate Secretary means a structural function unit in the Company which has duty to provide supports to the Directors in the performance of its duties and to act as a liaison officer between the Shareholders, the Board of

18 Commissioners, the Directors, the Working Units and the Stakeholders. 7. Board of Commissioners means the Company Organ which has the duty to conduct general and/or specific supervision pursuant to the Articles of Association and to give advice to the Directors. 8. Directors means the Company Organ which is fully authorized to manage, and responsible for managing, the Company for the benefit of the Company and to represent it in and out of court in accordance with the Articles of Association. 9. Company s Equity means the net worth (total assets less total financial liabilities) of the Company as determined in accordance with its latest / current financial statements, as follows: a. Audited annual financial statements; b. Semiannual financial statements together with the accountant s report for limited review of, at least, the equity account; or c. Audited interim financial statements other than semiannual interim financial statements, in the event that the Company maintains interim financial statements.

19 10. A reference to any day in this document shall be a reference to calendar day, not an effective business day. 11. Internal Audit means a structural technical unit within the Company which has the duty to conduct audits and to ensure that the Company s internal control system runs effectively. 12. Management Line means the Directors and the officers 1 (one) level below the Directors who assist in the management of the Company pursuant to the organization structure. 13. Employee means any person who is bound by employment relationship with the Company and has met the specified requirements and appointed by the Directors and receives income, welfare and facilities pursuant to laws and regulations and the Company s rules. 14. Independent Commissioner means a BoC Member who is not affiliated with the Directors, other BoC Members and controlling Shareholder, and free from business or other relationship that may affect his/her ability to act independently or to act solely in the interests of the Company.

20 15. Audit Committee means a committee formed by the Board of Commissioners to assist it in the fulfillment of its duties and obligations to review the effectiveness of the internal control system and the effectiveness of the duties performed by external and internal auditors, and to review and approve all information and suggestions prepared and proposed by other parties, such as Financial and Non-Financial Statements and Annual Reports of the Company. 16. Nomination, Remuneration and Risk Committee means a committee formed by the Board of Commissioners for the purpose of assisting in the performance of its duties and functions in nomination, remuneration and risk. 17. Company Organs means General Meetings of Shareholders (GMS), Board of Commissioners and Directors. 18. Company (or Corporation), with letter C in uppercase, means PT Jasa Marga (Persero) Tbk, and company (or corporation) with letter c in lowercase refers to company in general. 19. General Meeting of Shareholders, hereinafter referred to as GMS, means the Company Organ which has the authority that is not granted to the

21 Board of Commissioners and the Directors within the limits specified in the Articles of Association. 20. Secretary of BoC of BoC means a supporting organ of the Board of Commissioners which may be appointed by the Board of Commissioners and has the duty to perform administrative and secretarial duties related to any activities of the Board of Commissioners. 21. Financial Services Authority, hereinafter referred to as OJK (Otoritas Jasa Keuangan), an agency which is independent and clear of intervention by any parties, and has such regulatory, supervisory, audit, and investigation functions, duties and authority as set out in this Law. 22. Stakeholder means each party which has direct or indirect financial or non-financial interests in the Company and has direct or indirect influences on the continuity of the Company, including Shareholders, Employees, the Government, Customers, Suppliers, Creditors, and the Public. 23. Material Transaction means any of the following transactions, in the value of 20% (twenty per cent) or more of the Company s Equity, completed

22 in one 1(one) transaction or a series of transactions for certain purpose or activity: a. Participation in a business entity, project and/or business operation; b. Purchase, sale, transfer or exchange of assets or business segments; c. Lease of assets; d. Lending of funds; e. Encumbrance of assets as security; and/or f. Provision of corporate guarantee. 24. Affiliated Transaction means any transaction concluded by the Company or a Controlled Company with an Affiliate of the Company or Affiliate of a BoD Member, a BoC Member, or a majority shareholder of the Company. CHAPTER II BOARD OF COMMISSIONERS A. DUTIES OF THE BOARD OF COMMISSIONERS 1. To conduct supervision over the management policy and the conduct of the management of the Company and its business by the Board of Director; 1 and 1 Articles of Association, Article 15, Par 1

23 2. To give advice to the Directors, including supervision over the performance of the Company s Long-Term Plan (LTP), Work Plan and Budgeting (WPB) and Articles of Association and Resolutions of GMS, and the applicable laws and regulations, in the interests of the Company and in compliance with the purposes and objectives of the Company. 2 In performing its main duties, the Board of Commissioners shall: 1. Be subject to the Company s Articles of Association, resolutions of GMS and the applicable laws and regulations. 2. Consider the interests of the Company and comply with the purposes and objectives of the Company and not perform them for the purposes of certain persons and certain class of persons. 3. Act in good faith and with integrity, professionalism, due care and responsibility, and implement the Good Corporate Governance (GCG) principles. 4. Do other activities, as follows: a. Distribute duties as arranged by the Board of Commissioners itself; such distribution of 2 Articles of Association, Article 15, Par 1

24 duties shall cover all duties of the Directors. b. Distribute the duties of the BoC Members as a Chairperson / Vice Chairperson / Member of BoC Committee. c. Keep abreast of the Company s operation development, either from internal information that is provided by the Company, or from external information produced by media or other sources. d. Prepare together with the Directors a guideline that is binding on each of BoD and BoC Members, in accordance with the provisions of applicable laws and regulations. e. Prepare together with the Directors a code of ethics that is applicable to each of BoD and BoC Members, Employees and supporting organs of the Company, in accordance with the provisions of applicable laws and regulations. f. Perform such other obligations as may be necessary in connection with its supervisory and advisory duties, to the extent not inconsistent with laws and regulations,

25 Articles of Association and/or resolutions of GMS. B. RIGHTS AND AUTHORITY OF THE BOARD OF COMMISSIONERS The Board of Commissioners shall have the right: 1. to jointly or individually at any time during the Company s office hours enter the premises or other places used or controlled by the Company and to inspect all books, letters and evidence, examine and verify the condition of cashes and others and to be informed of all acts which have been taken by the Directors to be explained of all things questioned or required from the Directors and each BoD Member to request the assistance of engineers if so required for the purpose of performing its duties in respect of certain matters and for certain period of time at the expense of the Company to have timely and complete access to the Company s information. 5. to receive remuneration which consists of fees and benefits/facilities, including bonuses and retirement benefits in the form and amount as 3 Articles of Association, Article 15, Par 2, Letter a.2 4 Articles of Association, Article 15, Par 2, Letter a.3 5 Articles of Association, Article 15, Par 2, Letter a.9

26 determined by the GMS, subject to the provisions of applicable laws and regulations. 6. to receive legal assistance if so required by any of its members in connection with acts / actions taken in his/her capacity as a Commissioner in relation to the purposes and objectives and business activities of the Company. 7. to receive induction program in case of new BoC Members and capability improvement for BoC Members. The Board of Commissioners is authorized: 1. to examine books, letters and other documents, to check cashes and other marketable securities for verification purposes, and to inspect assets of the Company 2. to require explanation from the Directors and/or other officers regarding any matters relating to the management of the Company. 3. to be informed of any policies implemented or to be implemented, and actions taken or to be taken, by the Directors. 4. to require the Directors and/or other officers under the Directors and with the knowledge of the Directors to be preset at meetings of the Board of Commissioners.

27 5. to appoint and remove a Secretary of BoC to suspend a BoD Member in accordance with the Articles of Association. 7. to form an Audit Committee, a Remuneration, Nomination, and Risk Committee, and such other committees as it deems necessary, subject to laws and regulations and the capability of the Company to employ engineers for certain purposes and for certain period of time at the expense of the Company, if deemed necessary. 9. to do such management acts for the Company as may be required in certain circumstances for certain period of time pursuant to the Articles of Association. 10. to approve the appointment of Corporate Secretary and Head of Internal Audit. 11. to attend meetings with the Directors and give opinions on the matters discussed. 12. to suspend any one or more BoD Members from their offices by specifying the reason, if they have acted against the Company s Articles of Association and the applicable laws and regulations and/or there is an indication of 6 Articles of Association, Article 15, Par 2, Letter a.6 7 Articles of Association, Article 15, Par 2, Letter a.8

28 causing harm on the Company and/or failing to perform their obligations and/or there is a reason which is pressing to the Company, subject to the provisions of the Company s Articles of Association to temporarily manage the Company if all BoD Members are suspended or there is no BoD Member in the Company, with the requirement to propose to the GMS, no later than 90 (ninety) days after the occurrence of vacancy, to fill the vacancy. The Board of Commissioners shall have the right to grant temporary power to any one or more of its members for the account of the Board of Commissioners. 14. to propose to the Directors to hold a GMS if it considers necessary by specifying the matters to be discussed. 15. to give approval that the interests of a BoD Member will be represented by another BoD Member in the event of conflict of interest of the Member being represented. In the event of conflict of interests of all BoD Members, the Company is to be represented by the Board of Commissioners or by a person appointed by it. 8 Articles of Association, Article 15, Par 2, Letter a.7

29 16. to conduct evaluation and give suggestions and opinions with respect to the management policies for Subsidiaries. 17. to perform such other supervisory authority to the extent not against the laws and regulations, the Articles of Association and/or the resolutions of GMS. C. OBLIGATIONS OF THE BOARD OF COMMISSIONERS In performing its supervisory duties, the Board of Commissioners shall have the obligation to do the following: 1. General a. To advise the Directors in the management of the Company; b. To give opinion and approval with respect to the Company s Work Plan and Budget (WPB) and other plans prepared by the Directors, in accordance with the Articles of Association; c. To report to Dwiwarna Series A Shareholders any indication of decrease in the performance of the Company; d. To examine and review any periodic and annual reports prepared by the Directors and sign annual reports;

30 e. To prepare minutes of Board of Commissioners meeting and keep a copy thereof; f. To report to the Company regarding their and/or their family s shareholding in the Company and other companies; g. To provide explanation regarding any matters questioned or requested by a Dwiwarna Series A Shareholder, subject to the laws and regulations specifically in force in capital market; h. To perform the other obligations in the discharge of the supervisory and advisory duties, to the extent not inconsistent with the laws and regulations, the Articles of Association and/or the resolutions of GMS. 2. GMS-related duties and obligations a. To appoint a BoC Member to preside over a GMS. Such appointment shall be made by Letter of Decision of the Board Commissioners; b. To keep abreast of the development in the Company s operation, to give suggestions and opinions to the GMS regarding any matter it deems important for the management and proposed development of the Company;

31 c. To provide report regarding the supervisory duties it has performed during the immediately preceding financial year, which is to become inseparable part of the annual report prepared by the Directors, and reported to the GMS, together with suggestions and corrective measures required to be taken if the Company shows a sign of decline; d. To give explanation, opinion and suggestion to the GMS regarding the annual report, if requested; e. To propose to the GMS through the Directors the appointment of an OJK-registered Public Accountant Office to audit the current year s financial statements of the Company, including internal control audit of the financial reporting pursuant to the applicable rules of the capital market authority of the place in which the Company s shares are registered and/or listed; f. To present to the GMS a report of the target and actual achievement of the Board of Commissioners Key Performance Indicators for the immediately preceding financial year, as part of the Company s annual report;

32 g. In certain conditions, the Board of Commissioners is required to convene an AGMS and such other GMS as it may be authorized to convene pursuant to laws and regulations and the Articles of Association; h. In the event that the Board of Commissioners suspends a BoD Member for any of the reasons specified in the Articles of Association, it shall within no later than 90 (ninety) Days after the suspension, convene a GMS to revoke or uphold the suspension decision. i. To give a written response to any acts of the Directors that require the approval of GMS, such as making material transactions of above 50% in value of the Company s Equity, transactions that contain Conflict of Interest pursuant to applicable capital market rules and other transactions in order to meet applicable capital market laws and regulations. Such written response from the Board of Commissioners must be given within 30 (thirty) Days of receipt of the request or explanation and document from the Directors. 3. Duties related to Work Plans and Strategies

33 a. To conduct supervision over the execution of the Company s Long-Term Plan (LTP) and the WPB in the interests of the Company pursuant to its purposes and objectives; b. The Board of Commissioners is required to prepare its work program, which will form an inseparable part of the WPB prepared by the Directors; c. To give opinion and approval regarding the WPB and other work plans prepared by the Directors, pursuant to the Articles of Association; d. Draft WPB which has been signed by all BoD Members shall be delivered to the Board of Commissioners within 30 (thirty) Days before the financial year starts or within such period as specified in the applicable laws and regulations, for approval by the Board of Commissioners; e. Draft WPB shall be approved by the Board of Commissioners no later than 30 (thirty) Days after the budget year runs (the budget year of the Company s annual WPB) or within the period specified in the applicable laws and regulations;

34 f. In the event that no draft WPB has been submitted by the Directors and/or the WPB has not been approved within the period set out in points d and e above, the preceding year s WPB will be applied; g. The Board of Commissioners reviews and executes a Corporate Management Contract regarding the Company s key performance indicators in relation to the WPB targets and the achievement of the targets presented by the Directors, as part of the Company s WPB document; h. To examine and review any reports from the Directors, including quarterly reports of the WPB execution and the reports relating to specific duties that have been decided jointly; i. To deliver to Dwiwarna Series A Shareholders quarterly reports of the Board of Commissioners actual performance indicators. 4. Supervisory Function-related duties a. To conduct supervision on the management policies and on how the Directors runs the management and the business of the Company, including supervision on the execution of the

35 LTP, the WPB and the Articles of Association, the resolutions of GMS and the applicable laws and regulations, in the interests of the Company and in accordance with the purposes and objectives of the Company. b. In performing its supervisory duties relating to the execution of the LTP, the Board of Commissioners gives directions regarding policies and strategies which should be adopted when developing the LTP, gives opinion on and approval of the LTP, and gives opinion on and approval of any revision to the LTP as proposed by the Directors. c. In performing its supervisory duties relating to how the management of the Company is run and its business is developed in one budget year, the Board of Commissioners reviews the Company s draft annual reports prepared by the Directors, including the financial statements audited by public accountants, and ensures that the Company s annual reports contain information regarding their identities, main jobs, positions of a Commissioner in another company (if any), including the meetings held during one financial year (either meetings of

36 the Board of Commissioners or their coordination meetings for which the attendance of the Directors was invited), and the fees, facilities and/or other benefits received from the Company. The Company s Annual Report which has been signed by all members of the Directors shall be delivered to the Board of Commissioners for approval and signing by all members of the Board of Commissioners, prior to presentation to GMS for approval and validation. The annual report shall be delivered no later than 5 (five) months after the end of the financial year, subject to the applicable rules. d. In performing its supervisory duties relating to the execution of the WPB, the Board of Commissioners evaluates the Company s quarterly management report submitted by the Directors in order to assess the performance made by the Directors, including corporate key performance, financial, development, operating, human resources and general performances, and corporate and management performances, including those relating to good

37 corporate governance (GCG), holding of meetings of Board of Commissioners and meetings of Directors, matters related to investment, such as filing of regular reports to OJK, annual reports, accountant s audit reports, reports regarding the application of IPO proceeds, convening of GMS in compliance with OJK and Indonesia Stock Exchange rules, and reports of environmental development and partnership programs, internal audit, risk and quality management, and information technology. The Board of Commissioners evaluates and reviews the WPB performance and makes assessments and gives approval with respect to any WPB revision proposed by the Directors. The Board of Commissioners shall submit quarterly reports which have been signed by all members of the Directors to the Board of Commissioners no later than 30 (thirty) Days after the end of the relevant quarter. e. To perform the supervisory duties relating to the performance of the Company s Articles of Association with respect to the acts of the Directors that require written approval from

38 the Board of Commissioners as provided and set out in the Company s Articles of Association, including the determination of limitations and/or criteria by the Board of Commissioners for approval by the Dwiwarna Series A Shareholders before they are used as basis for giving approval of the acts of the Directors. f. To perform supervisory duties relating to further actions taken by the Directors on the suggestions, expectations, questions and complaints from the stakeholders to the Directors communicated directly to the Board of Commissioners and then communicated to the Directors for review and/or discussion jointly with the Board of Commissioners before further actions are taken. g. To give direction and supervision with respect to the conduct of the following by the Directors: 1) Material issues regarding changes in the business environment that are expected to have material effects on the business and performance of the Company, in timely and relevant manners.

39 2) Approve the determination of organization structure 1 (one) level below the Directors and Employee s career development policy and implementation proposed by the Directors. 3) Accounting policy and preparation of financial statements in accordance with the accounting standards generally applied in Indonesia. 4) Procurement policy and the implementation. 5) Supervision over the performance of Subsidiary / joint venture management policy. 6) Quality and services policies and implementation of the policies. 7) Supervision over the Directors observance of the applicable laws and regulations and agreements with third parties. 5. Duties related to nomination and remuneration A. Nomination: a. To nominate a prospective candidate to be a BoD Member of the Company from BUMN talents (the officers one level below the Directors) to the Dwiwarna Series A Shareholders. In the event that the BUMN

40 Minister determines that there is another prospective candidate who has the potential to be a BoD member but is not included in the list of candidates proposed by the Board of Commissioners, the BUMN Minister may require the Board of Commissioners to conduct assessment on the person concerned and propose him/her, if qualified, to the BUMN Minister as a Dwiwarna Series A Shareholder. b. A prospective candidate who is to be proposed in a GMS shall be evaluated by a team formed by the BUMN Minister by involving the President Commissioner or the Nomination, Remuneration and Risk Committee Chairperson. c. To ensure that the curriculum vitae of the candidate member of the Directors to be proposed for appointment by GMS is available in due time and may be announced at any time during the GMS before decision on the appointment of the BoD Member is made. d. The Board of Commissioners may at any time suspend a BoD Member by specifying the reason if he/she has acted against the

41 Articles of Association or there is an indication that he/she has acted in a manner that harms the Company or defaulted on his/her obligations or there is a reason which is pressing to the Company, subject to the provisions below: 1) Any such suspension shall be notified in writing to the BoD Member together with the reason. 2) The notice required by point 1) above shall be delivered within no later than 2 (two) business days after determination of the suspension. 3) The suspended BoD Member is not authorized to conduct management for the Company in accordance with the purposes and objectives of the Company or to represent it in and out of court. 4) Within no later than 90 (ninety) Days after the suspension, the Board of Commissioners shall hold a GMS to revoke or uphold the suspension decision. 5) The suspension will be cancelled upon the lapse of the period for holding

42 GMS as specified in point 4) above or failure of the GMS to adopt a resolution. e. A Board of Commissioners meeting gives approval of a Director s holding of another position which does not constitute holding two positions by a BoD Member. f. To approve the appointment and removal of a Corporate Secretary and/or Head of Internal Audit. 9 g. To appoint and remove a Secretary of BoC. 10 h. To form an Audit Committee, a Remuneration, Nomination and Risk Committee, and other committees, if deemed necessary. i. To give written approval of the Company s representative to be a candidate member of the Directors and Board of Commissioners of any of its Subsidiaries that gives significant contribution to the Company and/or which is of strategic value as determined by the Board of Commissioners, after approval by the Dwiwarna Series A Shareholders of the limitation and/or 9 Article 15, Par 2, Letter a.1 10 Article 15, Par 2, Letter a.6

43 criteria determination proposed by the Board of Commissioners and approval by the Dwiwarna Series A Shareholders of the candidate member of Directors and Board of Commissioners of the subsidiary proposed by the Board of Commissioners. The Board of Commissioners decision with respect to the foregoing shall be made no later than 30 (thirty) Days of the receipt of the complete request or explanation and document by the Directors. j. To conduct review and supervision in order to ensure that the Company has in place nomination strategies and policies which include organizational analysis process, recruitment procedures and criteria, selection and promotion. B. Remuneration a. To ensure that the Company maintains a transparent remuneration system, which includes salaries or fees, fixed benefits and facilities and variable incentives. b. To make a regular review of the appropriate remuneration system for BoC Members and BoD Members.

44 c. If so authorized and empowered by the GMS, subject to prior approval of the Dwiwarna Series A Shareholders, to determine the amount of bonuses for the Company s BoD Members for the immediately preceding financial year and salaries, benefits and facilities for the current financial year. d. To determine the amount of the bonuses for the Company s BoC Members for the immediately preceding financial year, and fees as well as benefits and facilities for the current financial year pursuant to the applicable rules and further delegate the Board of Commissioners after consultation with the Dwiwarna Series A Shareholders to set out in detail the decision in a Board of Commissioners Letter of Decision in the name of the GMS. e. To propose remuneration for BoD Members pursuant to the applicable rules and assessment of their performance. f. To review any proposed fees and remunerations (salaries, benefits and facilities) for the BoC Members and BoD Members and the relevant committees and propose the same to the GMS for approval.

45 g. To propose performance incentives / bonuses for the BoC Members and BoD Members taking into account the assessment on the performance of the Directors and solvency level of the Company, to the GMS for approval. 6. Duties related to Evaluation on the Performance of the Board of Commissioners and Directors. a. To conduct a performance evaluation by maintaining Key Performance Indicators (KPI) for the Board of Commissioners self-assessment or other basis, to be decided further in a Board of Commissioners meeting. b. To give responses and recommendations regarding the determination of KPI for the Directors at the beginning of each work year. c. To evaluate the performance of each BoC Member and set out in a minutes of meeting of the Board of Commissioners. d. Report of the BoC performance shall be set out in the report of the Board of Commissioners supervisory duties. e. To maintain a system for measuring and evaluating the performance of the Board and each individual / Member of the Board of

46 Commissioners and Directors and submit the same to the GMS. f. To propose KPI and the targets to be submitted each year to the GMS for approval. g. To perform assessment on the performance of individual Director and report the result to the shareholders. h. In performing assessment on the performance of the Directors, the Board of Commissioners shall: 1) Maintain procedures for assessing the Directors performance and the report thereof to the shareholders. 2) Review the key performance indicators, criteria and targets covered by the Directors management contract / the WPB either individually or collegially and quarterly or annually submit the same to the shareholders in a report of supervisory duties. 7. Duties related to the implementation of Good Corporate Governance (GCG) a. To implement the GCG consistently in accordance with the policies set by the Company.

47 b. To monitor and ensure the effectiveness of GCG practice by the Company, subject to the provisions below: 1) Assessment; a program designed to identify the implementation of GCG in the Company by making measurement on the implementation and application of GCG regularly at least every 2 (two) years. 2) Evaluation; a program designed to describe further actions in the implementation and application of GCG in the Company, to be done in the following year after the assessment, including evaluation on the assessment results and further actions on the correction recommendations. 3) Assessment shall be carried out by an independent assessor who is to be appointed by the Board of Commissioners in accordance with the procedures applied for procurement of goods and services for the Company and assistance of the Directors may, if necessary, be requested in the appointment process. 4) Evaluation may be carried out by the person alone, who may in the implementation discuss with or obtain the

48 assistance of the independent assessor or employ the services of the Government agency which has GCG competency. 5) Results of the assessment and evaluation shall be reported to the GMS in the annual report. 8. Duties related to the Implementation of Risk Management a. To conduct regular assessments and give recommendations regarding business risks and the types and amounts of the insurances maintained by the Company in relation to its business risks with the implementation of comprehensive risk management in the Company. b. To review the Company s risk management which covers various risks faced by the Company, its management systems, strategies, and policies, internal controls, including policies, methodologies and infrastructures, results of the reviews on the risk measurement models applied by the Company and on the implementation of the management. c. To develop investment policies and strategies in toll and non-toll road businesses for the purpose of preparing the LTP, and submit them

49 to the Directors as suggestion, input and opinion, including investment and business risk elements. d. To evaluate the investment policies and identify and assess any potential risks. e. To evaluate the stages of the Company s investment and risk management processes, starting from identification to disclosure and mitigation of risks. f. To provide the evaluation results for the Directors to consider in its review and improvement of the risk management policy and implementation and risk mitigation, including for the purpose of avoiding cost overrun and promoting efficiency and effectiveness in toll and non-toll road investments. g. To assess any risks that the Company s proposed projects and investments may have, to further give opinions and/or suggestions as to the continuity of the projects. 9. Duties related to Internal Control System a. To ensure that the internal control system is effective. b. To ensure that the duties of the Internal Auditors and External Auditors are performed,

50 by assessing their competency, independency and scope of their duties, and review any complaints relating to the Company as may have been received by the Board of Commissioners. c. To ensure that the Internal Auditors, the External Auditors and the Audit Committee have access to information on the Company which they may require to perform their duties. d. To assess the accuracy of the information prepared for other parties, specifically financial and annual reports. e. To form an Audit Committee, which is to be appointed and removed by the Board of Commissioners and reported to the GMS, and to submit to OJK any information on the appointment and removal of the Audit Committee within 2 (two) business days of the appointment and removal, and such information shall be posted on the Company s website. f. To examine and review any reports from the committees which are under the Board of Commissioners 10. Duties related to Disclosure and Confidentiality of Information

51 a. To monitor the disclosure procedures and effectiveness of communication in the Company. b. To ensure accuracy of data, transparency and disclosure of financial statements of the Company and to guarantee fair treatment of minority shareholders and other Stakeholders, and accountability of the Company Organs and compliance by the Company of the applicable laws and regulations. c. To ensure that the information to be provided by the Company, including, but not limited to, financial statements and annual reports, to its shareholders and Stakeholders are provided timely, completely and accurately. d. To ensure that the data/information provided to the public is in compliance with the applicable laws and regulations. 11. Duties related to Information Technologies a. To be informed of the IT system adopted by the Company, including, without limitation to, the policies and the implementation, and the application used. b. To give directions with respect to the implementation of the proposed IT system adopted by the Company.

52 12. Reporting-related duties a. To report to the Company (the Corporate Secretary) their and/or their family member shareholding in the Company and other companies, including each changes therein for recording in the Special Register in accordance with the applicable laws and regulations. b. To submit property and asset report pursuant to the applicable laws and regulations. 13. Other duties a. To comply with the applicable laws and regulations, the Articles of Association, and the GCG code and the policies set by the Company. b. To provide job distribution, to be arranged by the Board of Commissioners itself; such job distribution should cover all areas of the Directors duties. c. To provide job distribution for the BoC Members as the Chairperson / Vice Chairperson / member of a BoC committee. d. To keep abreast of the Company s operation development, either from internal information that is provided by the Company, or from

53 external information produced by media or other sources. e. To prepare together with the Directors a guideline that is binding on each of BoD and BoC Members, in accordance with the provisions of applicable laws and regulations. f. To prepare together with the Directors a code of ethics that is applicable to each of BoD and BoC Members, Employees and supporting organs of the Company, in accordance with the provisions of applicable laws and regulations. g. To perform such other obligations as may be necessary in connection with its supervisory and advisory duties, to the extent not inconsistent with laws and regulations, Articles of Association and/or resolutions of GMS. D. REQUIREMENTS TO BE A COMMISSIONER 1. A BoC Member must comply with: 11 a. the Limited Liability Company Law; b. capital market laws and regulations; and c. the laws and regulations applicable to the Company and related to the Company s business activities. 11 Articles of Association, Article 14, Par 3

54 2. An individual who meets the following requirements upon appointment and during term of office may be appointed as a BoC Member: a. Has good character, moral and integrity; b. Capable of doing legal acts; c. Five (5) years prior to appointment and during term of office: 1) not declared and will not be declared bankrupt; 2) not become and will not become a commissioner and/or a director found guilty of causing a company to be declared bankrupt; 3) not convicted and will not be convicted of committing an offence that causes a financial and/or financial-related losses to the state; and 4) not become and will not become a BoD Member and/or BoC Member who while in office: a) did not hold an AGMS; b) was refused by the GMS when giving accountability as a BoD Member and/or BoC Member, or did not give accountability as a BoD Member and/or BoC Member to the GMS; and