GOOD CORPORATE GOVERNANCE

The Company through its Board of Commissioners, Board of Directors and all of its employees are all committed to implement Good Corporate Governance. The Management views that a good corporate culture can only be develop if the Company implement Good Corporate Governance in a consistent manner with a continuous innovation and improvement. The main purpose of Good Corporate Governance is to optimize corporate values to all Shareholders and other Stakeholders in a long-term perspective. To support such well implemented Good Governance, a guidelines for Good Corporate Governance procedure is therefore entailed.

1. Duties and Responsibilities of the Board of Commissioners and Board of Directors
   1. Board of Commissioners (BOC)
      • Board of Commissioners is the organ of the Company which is in charge of supervision over the Board of Directors’ duties in carrying out policies for the benefit of the Company in accordance with the purposes and objectives of the Company as well as to provide advice to the Board of Directors.
      • The number of members of the Board of Commissioners consist of at least two (2) Commissioners and one of them is the President Commissioner.
      • The candidate which can be appointed as members of the Board of Commissioners (including the President Commissioner) are Indonesian citizens and foreign citizens who meet the specified requirements of the applicable laws.
      • The company is required to have at least 1 (one) member of the Board of Commissioners (can also include the President Commissioner) who is domiciled within the territory of the Republic of Indonesia.
      • Duties, responsibilities and authority as well as the meeting and decision-making mechanisms are further elaborated in the policy of the Board of Commissioners.
   2. Independent Commissioner
      Independent Commissioners are members of Commissioners who do not have the financial, management, share ownership and or family relationship with other Commissioners, the Board of Directors or controlling shareholders or other relationship which could affect its ability to act independently.
   3. Board of Directors
      • Board of Directors is the organ in charge of implementing the management of the Company for the benefit of the Company and in accordance with the purposes and objectives of the Company.
      • In managing the company, the Board of Directors shall carry out their duties in good faith and responsibility with due regard to the provisions of the applicable laws and regulations.
      • Member of the Board of Directors appointed by the GMS from the nomination of candidates of the Board of Directors proposed which already met the requirements.
      • Duties, responsibilities, and authority as well as the mechanisms of meetings and decision-making are further elaborated within the policy of the Board of Directors.
2. Audit Committee
   The Company’s Audit Committee has a role in assisting the Board of Commissioners in terms of monitoring and independent evaluations. Duties and responsibilities of the Audit Committee are to monitor and evaluate the implementation of good corporate governance, internal control, risk management, financial reporting, and the implementation of both internal and external audit. The duties, responsibilities and authority as well as the mechanisms of meetings and decision-making are further elaborated in the Charter of Audit Committee.
3. Compliance Function, Internal Audit and External Audit
   1. Compliance Function
      In running the Company’s activity, compliance function is an essential element for minimizing compliance risks and to develop a compliance culture. Compliance work unit is independent and free from the influence of other work units. In order for Compliance function to run well, the Board of Commissioners and Board of Directors both conduct active supervisions. Compliance function carrying out the duties and responsibilities as follows :
      • Creating a culture of compliance within the Company.
      • Conduct a review of the policies and procedures made to ensure such policies and procedures are in accordance with the applicable laws and regulations.
   2. Internal Audit
      The Company has an Internal Audit division as an independent support organ which have access to the data, the personal, corporate assets and business activities in order to control, minimize potential losses and to ensure that the company has been doing business with the manageable level of risk.
   3. External Audit
      External Auditor appointed by the GMS of the external auditor candidates proposed by the Board of Commissioners. External Audit nomination contain the following :
      • The reason for the nomination and the amount of compensation.
      • Statement of Capability of the external auditor to be free from the influence of the Board of Commissioners, Directors and interested parties within the Company and willingness to provide information relating to the results of its audit to the FSA (OJK).
      • Company must provide all the accounting records and supporting data that are necessary for the external auditor.
4. Risk Management
   1. Background
      In carrying out its business activities as a finance company with a national scope, the Company considers risk management as important with the aim of improving the quality of assets, maintain safe business growth, cost-effectiveness and reduce the level of concern of all the company's stakeholders according to the direction of the Board of Directors and in accordance with the provisions of the Financial Services Authority (OJK), hence creating a healthy growth in profitability for the company.
5. Remuneration Policy
   The company implements the remuneration policy for the Board of Commissioners, Board of Directors and employees with consideration to the following :
   1. Financial performance and fulfillment of the Company's obligations as stipulated in the applicable laws
   2. Individual job performance
   3. The fairness of the company and/or towards equal position
   4. The rate of inflation and economic growth and
   5. Long-term goals and strategies of the Company
6. Transparency Policy
   One form of accountability and transparency in terms of responsibility for the company manegement to the relevant stakeholders is the disclosure of financial and non-financial informations.
7. Arrangement of the Annual Businness Plan and Annual Budget
   Business Plan and Budget Plan is prepared by the Board of Directors assisted by the management and later be reviewed by the Board of Commissioners approved by the GMS