OJK Circular No. 32/SEOJK.04/2015 on Guidelines for Good Corporate Governance of Open Companies

To:
Board of Directors and Board of Commissioners of Open Companies

COPY

CIRCULAR LETTER OF THE FINANCIAL SERVICES AUTHORITY NUMBER 32 /SEOJK.04/2015

ON
GUIDELINES FOR GOOD CORPORATE GOVERNANCE OF OPEN COMPANIES

In connection with Financial Services Authority Regulation Number 21/POJK.04/2015 on the Implementation of Guidelines for Good Corporate Governance of Open Companies (State Gazette of the Republic of Indonesia Year 2015 Number 276, Additional State Gazette of the Republic of Indonesia Number 5765), it is necessary to regulate the Guidelines for Good Corporate Governance of Open Companies in a Financial Services Authority Circular Letter as follows:

I. GENERAL PROVISIONS

1. Open Companies are required to apply the Guidelines for Good Corporate Governance of Open Companies and/or explain the reasons for not applying the Guidelines for Good Corporate Governance of Open Companies as referred to in Article 2 paragraph (1) and paragraph (2) of Financial Services Authority Regulation Number 21/POJK.04/2015 on the Implementation of Guidelines for Good Corporate Governance of Open Companies.

2. The Guidelines for Good Corporate Governance of Open Companies are as contained in the Appendix of this Financial Services Authority Circular Letter, which is drawn up with reference to good corporate governance practices in accordance with internationally recognized best practices and taking into account the sector and industry as well as the size and complexity of Open Companies.

II. ASPECTS, PRINCIPLES, AND RECOMMENDATIONS FOR GOOD CORPORATE GOVERNANCE

1. The Guidelines for Good Corporate Governance of Open Companies, hereinafter referred to as the Governance Guidelines, contain good corporate governance practices in accordance with internationally recognized best practices and are not regulated in existing legislation in the Capital Market sector.

2. The Governance Guidelines as referred to in item 1 cover 5 (five) aspects, 8 (eight) principles of good corporate governance, and 25 (twenty-five) recommendations for the implementation of aspects and principles of good corporate governance, as listed in the Appendix which is an integral part of this Financial Services Authority Circular Letter.

3. The five aspects of Good Corporate Governance of Open Companies as referred to in item 2 include:
   a. Relationship of Open Companies with Shareholders in Ensuring Shareholder Rights; b. Function and Role of the Board of Commissioners;
   c. Function and Role of the Board of Directors;
   d. Stakeholder Participation; and e. Information Transparency.

4. The principles of good corporate governance in the Governance Guidelines are the basic concepts of good corporate governance, in accordance with internationally recognized best practices.

5. The recommendations for the implementation of aspects and principles of good corporate governance in the Governance Guidelines are standards for the implementation of aspects and principles of good corporate governance, which are expected to be applied by Open Companies to implement governance principles.

III. IMPLEMENTATION OF GUIDELINES FOR GOOD CORPORATE GOVERNANCE OF OPEN COMPANIES

1. The implementation of the Governance Guidelines by Open Companies is carried out through the "Comply or Explain" approach. With the "Comply or Explain" approach, Open Companies are recommended to implement the recommendations for the implementation of aspects and principles of good corporate governance.

In the event that Open Companies have not implemented these recommendations, Open Companies are required to explain the reasons and alternative implementations (if any).

2. In implementing the recommendations from each aspect and principle of good corporate governance in the Governance Guidelines, Open Companies must take into account the conditions of the Open Company, consider the interests of implementing good governance in accordance with the needs of business activities in its sector and industry as well as the size and complexity of the Open Company, and encourage the performance of the Open Company so that the Open Company can implement aspects and principles of good corporate governance by implementing recommendations or determining other best methods according to the Open Company.

3. In the event that the recommendations in the Governance Guidelines for implementing the aspects and principles of the Governance Guidelines are in accordance with the conditions or needs of the Open Company, then the Open Company is recommended to implement said recommendations. However, if the recommendations in the Governance Guidelines are not in accordance with the conditions of the Open Company so that said recommendations are not implemented by the Open Company, then the Open Company is required to explain the reasons for not implementing the recommendations for the implementation of aspects and principles in the Governance Guidelines or disclose other methods in implementing the aspects and principles of the Governance Guidelines.

4. In providing explanations for the non-implementation of recommendations for the implementation of aspects and principles of governance in the Governance Guidelines and/or explanations for the reasons for using other methods in implementing aspects and principles of governance in the Governance Guidelines as referred to in item 3, Open Companies must ensure that the explanations provided are sufficiently clear, informative, and adequate so that investors and other stakeholders understand the reasons for the Open Company:
   a. not implementing the recommendations for the implementation of aspects and principles of governance in the Governance Guidelines; and/or b. using other methods in implementing aspects and principles of governance in the Governance Guidelines.

IV. CLOSING

This Financial Services Authority Circular Letter shall take effect from the date of determination.

Determined in Jakarta on 17 November 2015

EXECUTIVE HEAD OF CAPITAL MARKET SUPERVISOR,

signed

NURHAIDA

Copy in accordance with the original
Legal Director 1
Legal Department

signed

Sudarmaji

APPENDIX
CIRCULAR LETTER OF THE FINANCIAL SERVICES AUTHORITY NUMBER 32 /SEOJK.04/2015 ON GUIDELINES FOR GOOD CORPORATE GOVERNANCE OF OPEN COMPANIES

PRINCIPLES AND RECOMMENDATIONS FOR GOVERNANCE

A. Relationship of Open Companies with Shareholders in Ensuring Shareholder Rights.

Principle 1
Enhancing the Value of General Meetings of Shareholders (GMS) Management.

Shareholders have the right to participate in company management through decision-making in GMS as regulated in legislation and the company's articles of association. Regulations related to GMS for Open Companies have been regulated in Financial Services Authority Regulation Number 32/POJK.04/2014 on Planning and Implementation of General Meetings of Shareholders of Open Companies, Capital Market Supervisory Agency and Financial Institution Regulation Number IX.J.1, Appendix of the Decision of the Head of the Capital Market Supervisory Agency and Financial Institution Number: KEP-179/BL/2008 dated 14 May 2008 on Basic Articles of Association of Companies Conducting Public Offerings of Equity Securities and Public Companies, Law Number 40 of 2007 on Limited Liability Companies, and the company's articles of association. Meanwhile, regulations related to GMS for closed companies are regulated in Law Number 40 of 2007 on Limited Liability Companies and the company's articles of association.

GMS can be held, among others, through a request for the holding of GMS from shareholders who meet the requirements, followed by the submission of the agenda to the Financial Services Authority (OJK) up to the preparation of the minutes of the GMS and the announcement of the summary of the GMS minutes. In this process, there is also the implementation of announcements and summonses for GMS to shareholders, which include mechanisms for proposing agendas by shareholders.

The value of the holding of GMS can be enhanced through efforts to encourage fairness and transparency in order to ensure shareholder rights and interests.

Recommendations:

1.1) Open Companies have technical methods or procedures for collecting votes (voting), both openly and secretly, that prioritize independence and shareholder interests.

Explanation
Each share with voting rights issued has one voting right (one share one vote). Shareholders can use their voting rights during decision-making, especially in decision-making through vote collection (voting). However, the mechanism for decision-making through vote collection (voting), both openly and secretly, is not regulated in detail.

Open Companies are recommended to have voting procedures in decision-making on a GMS agenda. The voting procedure must maintain the independence or freedom of shareholders. For example, in open vote collection (voting), it is done by raising hands according to the instruction of the options offered by the GMS chairman. Meanwhile, in secret vote collection (voting), it is done for decisions requiring confidentiality or at the request of shareholders, by using ballot papers or electronic voting.

1.2) All members of the Board of Directors and members of the Board of Commissioners of Open Companies attend the Annual GMS.

Explanation
The attendance of all members of the Board of Directors and members of the Board of Commissioners of Open Companies aims so that each member of the Board of Directors and members of the Board of Commissioners can observe, explain, and answer directly issues that occur or questions raised by shareholders regarding the agenda in the GMS.

1.3) The summary of GMS minutes is available on the Open Company's Website for at least 1 (one) year.

Explanation
Based on regulations in Article 34 paragraph (2) of Financial Services Authority Regulation Number 32/POJK.04/2014 on Planning and Implementation of General Meetings of Shareholders of Open Companies, Open Companies are required to create a summary of GMS minutes in Indonesian and a foreign language (at least in English), and announce it 2 (two) working days after the GMS is held to the public, one of which is through the Open Company's Website. The availability of the summary of GMS minutes on the Open Company's Website provides an opportunity for shareholders who were not present to obtain important information in the holding of GMS easily and quickly. Therefore, the regulation regarding the minimum duration for the availability of the summary of GMS minutes on the Website is intended to provide sufficient time for shareholders to obtain this information.

Principle 2
Enhancing the Quality of Communication of Open Companies with Shareholders or Investors.

Open Companies must continuously enhance the role and participation of shareholders or investors through effective and continuous communication in order to achieve the goals of the Open Company. This communication is beneficial for knowing the expectations and views of shareholders or investors, as well as obtaining suggestions and inputs for the benefit and continuity of the Open Company's business.

Recommendations:

2.1) Open Companies have a communication policy with shareholders or investors.

Explanation
The communication between Open Companies and shareholders or investors is intended so that shareholders or investors gain a clearer understanding of information that has been published to the public, such as periodic reports, information transparency, business conditions or prospects and performance, and the implementation of Open Company governance. In addition, shareholders or investors can also provide inputs and opinions to the management of the Open Company. The communication policy with shareholders or investors indicates the Open Company's commitment to carrying out communication with shareholders or investors. In this policy, it can include strategies, programs, and the timing of communication implementation, as well as guidelines that support shareholders or investors to participate in this communication.

2.2) Open Companies disclose the Open Company's communication policy with shareholders or investors on the Website.

Explanation
The disclosure of the communication policy is a form of transparency regarding the Open Company's commitment to providing equality to all shareholders or investors in the implementation of communication. The disclosure of this information is also intended to increase the participation and role of shareholders or investors in the implementation of the Open Company's communication programs.

B. Function and Role of the Board of Commissioners

Principle 3
Strengthening the Membership and Composition of the Board of Commissioners.

Matters related to the membership of the Board of Commissioners have been regulated in the provisions of Financial Services Authority Regulation Number 33/POJK.04/2014 on Directors and Boards of Commissioners of Issuers or Public Companies, while the nomination procedures for members of the Board of Commissioners are regulated in Financial Services Authority Regulation Number 34/POJK.04/2014 on Nomination and Remuneration Committees of Issuers or Public Companies. However, in these regulations, it is not elaborated how Open Companies should compose the membership and composition of the Board of Commissioners ideally to support company continuity. The ideal membership and composition of the Board of Commissioners must reflect the implementation of general supervision functions over Open Companies and the provision of advice to the Board of Directors professionally, effectively, and independently. Efforts to strengthen the membership and composition of the Board of Commissioners are carried out through determining the appropriate number and composition in order to achieve the goals of the Open Company, thereby building trust from stakeholders.

Recommendations:

3.1) Determination of the number of Board of Commissioners members considers the conditions of the Open Company.

Explanation
The number of Board of Commissioners members can affect the effectiveness of the execution of the Board of Commissioners' duties. The determination of the number of Board of Commissioners members of Open Companies must refer to applicable legislation, which consists of at least 2 (two) people based on Financial Services Authority Regulation Number 33/POJK.04/2014 on Directors and Boards of Commissioners of Issuers or Public Companies. In addition, it is also necessary to consider the conditions of the Open Company, which include characteristics, capacity, and size, as well as the achievement of goals and fulfillment of different business needs among Open Companies. However, an excessively large number of Board of Commissioners members has the potential to disrupt the effectiveness of the execution of the Board of Commissioners' functions.

3.2) Determination of the composition of Board of Commissioners members considers the diversity of expertise, knowledge, and experience required.

Explanation
The composition of the Board of Commissioners is a combination of characteristics both from the Board of Commissioners organ and the members of the Board of Commissioners individually, in accordance with the needs of the Open Company. These characteristics can be reflected in the determination of expertise, knowledge, and experience required in the execution of supervision and advisory duties by the Board of Commissioners of Open Companies. A composition that considers the needs of the Open Company is a positive thing, especially regarding decision-making in the execution of supervision functions by considering various broader aspects.

Principle 4
Enhancing the Quality of the Execution of Duties and Responsibilities of the Board of Commissioners.

The Board of Commissioners is tasked and responsible for supervising policy management and the general course of management, as well as providing advice to the Board of Directors, as regulated in the provisions of Financial Services Authority Regulation Number 33/POJK.04/2014 on Directors and Boards of Commissioners of Issuers or Public Companies. Supervision and advice by the Board of Commissioners include, among others, company strategy and important plans, integrity of financial reports, internal control systems and risk management, reporting and information transparency, compliance, and corporate governance. The Board of Commissioners must execute its duties in good faith, with full responsibility and caution for the benefit of the Open Company and in accordance with the purpose and goals of the Open Company.

In order to support the effectiveness of the execution of its duties, the Board of Commissioners can form committees. The committees include the Audit Committee, as mandated by legislation in the Capital Market sector regarding the Formation and Guidelines for the Implementation of Work of the Audit Committee, and the Nomination and Remuneration Committee, as regulated in Financial Services Authority Regulation Number 34/POJK.04/2014 on Nomination and Remuneration Committees of Issuers or Public Companies.

Recommendations:

4.1) The Board of Commissioners has a self-assessment policy to evaluate the performance of the Board of Commissioners.

Explanation
The self-assessment policy of the Board of Commissioners is a guideline used as a form of accountability for the evaluation of the Board of Commissioners' performance collegially. Self-assessment is conducted by each member to evaluate the performance of the Board of Commissioners collegially, and not to evaluate the individual performance of each member of the Board of Commissioners. With this self-assessment, it is hoped that each member of the Board of Commissioners can contribute to continuously improving the performance of the Board of Commissioners.

In this policy, it can include evaluation activities conducted along with their purpose and intent, the timing of periodic implementation, and evaluation benchmarks or criteria used in accordance with recommendations given by the nomination and remuneration function of the Open Company, where the existence of this function has been mandated in Financial Services Authority Regulation Number 34/POJK.04/2014 on Nomination and Remuneration Committees of Issuers or Public Companies.

4.2) The self-assessment policy to evaluate the performance of the Board of Commissioners is disclosed through the Annual Report of the Open Company.

Explanation
The disclosure of the self-assessment policy regarding the performance of the Board of Commissioners is done not only to fulfill the transparency aspect as a form of accountability for the execution of its duties, but also to provide assurance, especially to shareholders or investors, regarding efforts that need to be made to improve the performance of the Board of Commissioners. With this disclosure, shareholders or investors know the check and balance mechanism against the performance of the Board of Commissioners.

4.3) The Board of Commissioners has a policy regarding the resignation of Board of Commissioners members if involved in financial crimes.

Explanation
The policy for the resignation of Board of Commissioners members involved in financial crimes is a policy that can increase the trust of stakeholders in the Open Company, so that the integrity of the company remains maintained. This policy is necessary to help smooth the legal process and so that the legal process does not disrupt the course of business activities. In addition, from a moral perspective, this policy builds an ethical culture in the environment of the Open Company. This policy can be included in the Guidelines or Code of Ethics applicable to the Board of Commissioners.

Furthermore, what is meant by involvement in financial crimes is the existence of a convicted status against members of the Board of Commissioners from the competent authority. Financial crimes include manipulation and various forms of embezzlement in financial service activities as well as Criminal Acts of Money Laundering as referred to in Law Number 8 of 2010 on the Prevention and Eradication of Criminal Acts of Money Laundering.

4.4) The Board of Commissioners or the Committee executing the Nomination and Remuneration function formulates a succession policy in the Nomination process of Board of Directors members.

Explanation
Based on the provisions of Financial Services Authority Regulation Number 34/POJK.04/2014 on Nomination and Remuneration Committees of Issuers or Public Companies, the committee executing the nomination function has the task of formulating policies and criteria needed in the Nomination process of candidate members of the Board of Directors. One policy that can support the Nomination process as referred to is the policy on the succession of Board of Directors members. The policy regarding succession aims to maintain the continuity of the regeneration or leadership cadre process in the company in order to maintain business continuity and the long-term goals of the company.

C. FUNCTION AND ROLE OF THE BOARD OF DIRECTORS

Principle 5
Strengthening the Membership and Composition of the Board of Directors.

Matters related to the membership of the Board of Directors have been regulated in the provisions of Financial Services Authority Regulation Number 33/POJK.04/2014 on Directors and Boards of Commissioners of Issuers or Public Companies. However, in these regulations, it is not elaborated how Open Companies should compose the membership and composition of the Board of Directors ideally to support company continuity. The ideal membership and composition of the Board of Directors must reflect the execution of the management function of Open Companies professionally, effectively, and efficiently. Efforts to strengthen the membership and composition of the Board of Directors can be carried out through determining the appropriate number and composition in order to achieve the goals of the Open Company, thereby building trust from stakeholders.

Recommendations:

5.1) Determination of the number of Board of Directors members considers the conditions of the Open Company and effectiveness in decision-making.

Explanation
As an organ of the company authorized in the management of the company, the determination of the number of Directors greatly affects the performance of the Open Company. Thus, the determination of the number of Board of Directors members must be done through careful consideration and must refer to applicable legislation, where based on Financial Services Authority Regulation Number 33/POJK.04/2014 on Directors and Boards of Commissioners of Issuers or Public Companies, it consists of at least 2 (two) people. In addition, in determining the number of Directors, it must be based on the need to achieve the purpose and goals of the Open Company and adjusted to the conditions of the Open Company, which include the characteristics, capacity, and size of the Open Company and how the effectiveness of the Board of Directors' decision-making is achieved.

5.2) Determination of the composition of Board of Directors members considers the diversity of expertise, knowledge, and experience required.

Explanation
Like the Board of Commissioners, the diverse composition of Board of Directors members is a combination of desired characteristics...

desired both from the Board of Directors as an organ and from individual Board members, in accordance with the needs of the Open Company. The combination is determined by considering expertise, knowledge, and experience relevant to the division of duties and functions of the Board of Directors in achieving the goals of the Open Company. Thus, the consideration of these characteristic combinations will impact the accuracy of the nomination and appointment process for individual Board members or the Board of Directors collectively.

5.3) Board members overseeing the accounting or finance fields possess expertise and/or knowledge in the field of accounting.

Explanation
Financial Reports are management's accountability reports on the management of resources owned by the Open Company, which must be prepared and presented in accordance with generally accepted Accounting Standards in Indonesia and also OJK regulations, including legislation in the Capital Market sector regulating the presentation and disclosure of Financial Reports of Open Companies. Based on legislation in the Capital Market sector regulating the responsibility of the Board of Directors over Financial Reports, the Board of Directors is jointly and severally responsible for the Financial Reports, which are signed by the President Director and Board members overseeing the accounting or finance fields.

Thus, the disclosure and preparation of financial information presented in financial reports will heavily depend on the expertise and/or knowledge of the Directors, especially Board members overseeing the accounting or finance fields. The existence of qualification expertise and/or knowledge in the field of accounting, at least possessed by the aforementioned Board members, can provide assurance over the preparation of Financial Reports, so that the Financial Reports can be relied upon by stakeholders as a basis for economic decision-making regarding the aforementioned Open Company. Such expertise and/or knowledge can be proven by educational background, certification training, and/or relevant work experience.

Principle 6...

Principle 6
Improving the Quality of Execution of Duties and Responsibilities of the Board of Directors.
The Board of Directors has the authority and full responsibility for the management of the Open Company for the interests of the Open Company in accordance with the purpose and objectives of the Open Company, as regulated in Financial Services Authority Regulation Number 33/POJK.04/2014 concerning Directors and Commissioners of Issuers or Public Companies. The management duties by the Board of Directors include, among others, effectiveness and efficiency of resources, implementation of internal controls, risk management, sustainable management (sustainability), communication with stakeholders including through the company secretary, preparation of accountability reports, and implementation of corporate governance.

The Board of Directors must execute their duties with good faith, full responsibility, and caution for the interests of the Open Company based on applicable legislation and the company's articles of association. The division of duties and management authority among Board members is carried out for the efficient management of the Open Company.

Recommendation:
6.1) The Board of Directors has a self-assessment policy to evaluate the performance of the Board of Directors.

Explanation
As with the Board of Commissioners, the self-assessment policy of the Board of Directors is a guideline used as a form of accountability for the evaluation of the Board of Directors' performance collectively. The self-assessment is conducted by each Board member to evaluate the performance of the Board of Directors collectively, and not to evaluate the individual performance of each Board member. With this self-assessment, it is hoped that each Board member can contribute to continuously improving the performance of the Board of Directors.

In that policy, it can include evaluation activities conducted along with their purpose and objective, the timing of periodic implementation, and the benchmarks or criteria for evaluation used in accordance with the recommendations provided by the nomination and remuneration function of the Open Company, where the establishment of such function has been mandated in Financial Services Authority Regulation Number 34/POJK.04/2014 concerning Nomination and Remuneration Committees of Issuers or Public Companies.

6.2) Policy...

6.2) The self-assessment policy to evaluate the performance of the Board of Directors is disclosed through the annual report of the Open Company.

Explanation
The disclosure of the self-assessment policy regarding the performance of the Board of Directors is done not only to meet transparency aspects as a form of accountability for the execution of their duties, but also to provide important information regarding efforts to improve the management of the Open Company. This information is very useful in providing assurance to shareholders or investors that there is certainty that company management is continuously being directed towards better outcomes. With this disclosure, shareholders or investors know the check and balance mechanism against the performance of the Board of Directors.

6.3) The Board of Directors has a policy regarding the resignation of Board members if involved in financial crimes.

Explanation
The policy for the resignation of Board members involved in financial crimes is a policy that can increase the trust of stakeholders in the Open Company, so that the integrity of the company remains maintained. This policy is necessary to help facilitate the legal process and ensure that the legal process does not disrupt business activities. Additionally, from a moral standpoint, this policy will build an ethical culture within the Open Company. This policy can be included in the Guidelines or Code of Ethics applicable to the Board of Directors.

Furthermore, what is meant by involvement in financial crimes is the existence of a convicted status against Board members from the competent authority. Financial crimes include manipulation and various forms of embezzlement in financial service activities as well as Criminal Acts of Money Laundering as referred to in Law Number 8 of 2010 concerning the Prevention and Eradication of Criminal Acts of Money Laundering.

D. PARTICIPATION...

D. STAKEHOLDER PARTICIPATION
Principle 7
Improving Corporate Governance Aspects through Stakeholder Participation.
Good corporate governance must cover all important aspects in the Open Company. Furthermore, good corporate governance must also be able to recognize the role of, and require cooperation from, stakeholders in creating business continuity in the long term.

Recommendation:
7.1) The Open Company has a policy to prevent insider trading.

Explanation
A person who possesses inside information is prohibited from conducting securities transactions using inside information as referred to in the Law concerning the Capital Market. The Open Company can minimize the occurrence of insider trading through prevention policies, for example, by strictly separating confidential data and/or information from public information, and dividing duties and responsibilities for the management of such information proportionally and efficiently.

7.2) The Open Company has an anti-corruption and anti-fraud policy.

Explanation
Anti-corruption policies are beneficial to ensure that the business activities of the Open Company are conducted legally, prudently, and in accordance with good governance principles. This policy can be part of the code of ethics or in a separate form. In this policy, it can include among others programs and procedures carried out to overcome corruption practices, kickbacks, fraud, bribery, and/or gratuities in the Open Company. The scope of this policy must describe the Open Company's prevention against all corruption practices, both giving or receiving from other parties.

7.3) The Company...

7.3) The Open Company has a policy regarding the selection and improvement of capabilities of suppliers or vendors.

Explanation
Policies regarding supplier or vendor selection are beneficial to ensure that the Open Company obtains the necessary goods or services at competitive prices and good quality. Meanwhile, policies for improving the capabilities of suppliers or vendors are beneficial to ensure that the supply chain runs efficiently and effectively. The ability of suppliers or vendors to supply/fulfill the goods or services needed by the company will affect the quality of the company's output. Thus, the implementation of these policies can guarantee supply continuity, both in terms of quantity and quality needed by the Open Company. The scope of this policy includes criteria in the selection of suppliers or vendors, transparent procurement mechanisms, efforts to improve the capabilities of suppliers or vendors, and the fulfillment of rights related to suppliers or vendors.

7.4) The Open Company has a policy regarding the fulfillment of creditor rights.

Explanation
Policies regarding the fulfillment of creditor rights are used as guidelines in conducting loans to creditors. The objective of this policy is to maintain the fulfillment of rights and maintain creditor trust in the Open Company. In this policy, it includes considerations in conducting agreements, as well as follow-up in the fulfillment of the Open Company's obligations to creditors.

7.5) The Open Company has a whistleblowing system policy.

Explanation
A well-constructed whistleblowing system policy will provide certainty of protection to witnesses or reporters regarding indications of violations committed by employees or management of the Open Company. The implementation of this system policy will impact the formation of a good corporate governance culture. Whistleblowing system policies include among others the types of violations that can be reported through the whistleblowing system, complaint methods, protection and assurance of reporter confidentiality, handling of complaints...

complaints, parties managing complaints, and the results of handling and follow-up of complaints.

7.6) The Open Company has a policy for providing long-term incentives to the Board of Directors and employees.

Explanation
Long-term incentives are incentives based on long-term performance achievement. Long-term incentive plans are based on the premise that long-term company performance is reflected by the growth in value of shares or other long-term company targets. Long-term incentives are beneficial in maintaining loyalty and providing motivation to the Board of Directors and employees to improve their performance or productivity, which will impact the improvement of company performance in the long term.

The existence of a long-term incentive policy is a concrete commitment of the Open Company to encourage the implementation of long-term incentives to the Board of Directors and Employees with conditions, procedures, and forms adjusted to the long-term objectives of the Open Company. This policy can include among others the purpose and objective of providing long-term incentives, conditions and procedures in providing incentives, and conditions and risks that must be considered by the Open Company in providing incentives. This policy can also be included in the existing remuneration policy of the Open Company.

E. INFORMATION TRANSPARENCY
Principle 8
Improving the Implementation of Information Transparency.
Information transparency must be conducted accurately and timely regarding all important company information including financial conditions, performance, ownership and control, and corporate governance of the Open Company.

Recommendation:
8.1) The Open Company utilizes the use of information technology more widely besides the Website as a media for information transparency.

Explanation
The use of information technology can be beneficial as a media for information transparency. The information transparency conducted is not only information transparency regulated in legislation, but also other information related to the Open Company that is deemed beneficial for shareholders or investors to know.

With the wider utilization of information technology besides the Website, it is hoped that companies can increase the effectiveness of spreading company information. Nevertheless, the utilization of information technology carried out still considers the benefits and costs to the company.

8.2) The Annual Report of the Open Company discloses the ultimate beneficial owners in the share ownership of the Open Company of at least 5% (five percent), in addition to the disclosure of ultimate beneficial owners in the share ownership of the Open Company through major shareholders and controllers.

Explanation
Legislation in the Capital Market sector regulating the submission of annual reports of Open Companies has regulated the obligation to disclose information regarding shareholders who own 5% (five percent) or more of the shares of the Open Company, as well as the obligation to disclose information regarding major shareholders and controllers of the Open Company, both directly and indirectly, up to the ultimate beneficial owner in the ownership of such shares. In these Corporate Governance Guidelines, it is recommended to disclose the ultimate beneficial owners over the share ownership of the Open Company of at least 5% (five percent), in addition to disclosing the ultimate beneficial owners from share ownership by major shareholders and controllers.

Established in Jakarta on the date of 17 November 2015 EXECUTIVE HEAD OF CAPITAL MARKET SUPERVISOR, signature NURHAIDA Copy in accordance with the original Legal Director 1 Legal Department signature Sudarmaji