GUIDELINES AND CODE OF CONDUCT OF THE BOARD OF COMMISSIONERS
PT ALAKASA INDUSTRINDO TBK

Table of contents
1. Foreword
2. Purpose
3. Legal Basis
4. Composition, Criteria and Tenure
5. Working Time
6. Values and Work Ethics
7. Reporting and Accountability
8. Duties, Responsibilities and Authorities
9. Performance Appraisal
10. Meeting
11. Closing

FOREWORD

The Board of Commissioners are a company organ which has the collective duty and responsibility of performing supervisory functions and providing advice to the Board of Directors, as well as ensuring that the Company`s business activities are in accordance with the principles of Good Corporate Governance, laws and regulations as well as the Company`s Articles of Association.

The Board of Commissioners also handle nomination and remuneration functions since the Company has yet to build a special committee in order to handle these functions.

The position of each member of the Board of Commissioners, including the President Commissioner is equal. The President Commissioner`s task is to coordinate the activities of the Board of Commissioners. The Board of Commissioners will act based on the resolutions of the Board of Commissioners meeting and in accordance with the prevailing laws and regulations.

PURPOSE

– As a guideline for the Board of Commissioners in conducting effective supervision over the management of the Company by the Board of Directors;
– With this guideline, the Board of Commissioners will be carrying out its duties by acting and behaving based on the principles of Good Corporate Governance (Transparency, Accountability, Responsibility, Independency and Fairness) consistently, namely in accordance with the Standards and Business Code of Conduct of the Company, and always comply with the applicable laws and regulations and the Articles of Association of the Company.

LEGAL BASIS

– Law No. 8 of 1995 concerning Capital Market
– Law No. 40 of 2007 concerning Limited Liability Company
– Law No. 21 of 2011 concerning Financial Services Authority
– Financial Services Authority Regulation No. 33/POJK.04/2014 dated 8 December 2014 concerning the Board of Directors and Board of Commissioners of Issuers or Public Companies.
– Financial Services Authority Regulation No. 34/POJK.04/2014 dated 8 December 2014 concerning Nomination and Remuneration Committee of Issuers or Public Companies.
– Financial Services Authority Regulation Number 8/POJK.04/2015 dated 26 June 2015 concerning Websites of Issuers or Public Companies
– Listing regulation Number I-A on Listing of Shares (Stock) and Equity-Type Securities Other Than Stock Issued by the Listed Company; Attachment to the Decree of the Board of Directors of PT Bursa Efek Indonesia Number. Kep-00001/BEI/01-2014 dated January 20, 2014.
– Articles 18, 19 and 20 of the Company`s Articles of Association.

COMPOSITION, CRITERIA AND TERM OF DUTIES

Composition of the Board of Commissioners

– The Board of Commissioners consist of at least 3 (three) members, consisting of a President Commissioner, a Vice President Commissioner and a Commissioner or more, in accordance with applicable regulations in the capital market.
– The number of members of the Board of Commissioners is adjusted to the complexity of the Company while still consider the interest so that decisions can be made effectively, precisely and quickly, as well as able to act independently.
– Each member of the Board of Commissioners cannot act individually but will be based on the decision of the Board of Commissioners or will be based on the appointment of the Board of Commissioners.
– The Company is obliged to have Independent Commissioner. The number of Independent Commissioner must be at least 30% (thirty percent) of the total members of the Board of Commissioners.

Criteria/Requirements to Become Board of Commissioners

– Have good character and morals
– Able to carry out legal actions
– Have dedication, understand the problems of the Company`s management.
– Have competency, namely the ability and experience in fields which are relevant to the duties and obligations of the Board of Commissioners.
– Have a professional and ethical work attitude in order to increase the Company`s value towards its shareholders and stakeholders.
– Have high motivation to work as a team to produce the best performance.
– Never has been declared bankrupt by the Court.
– Never served as a Director or member of the Board of Commissioners who was found guilty of causing a company to go bankrupt.
– Never been found guilty of committing a crime pursuant to a court decision.
– Have a commitment to provide adequate time.
– Have a good integrity and reputation, in the form of never directly or indirectly involved in any engineering acts and illegal practices, default and other actions which are detrimental to the Company where the related person works or had worked.
– Have a commitment to comply with applicable laws and regulations.

Independent Commissioner Criteria / Requirements

– Fulfilling the requirements as a member of the Board of Commissioners.
– Not a person who has been working or supervising the issuer within the last 6 months, except for re-appointment as an Independent Commissioner for the next period.
– Do not own the Company`s shares, both of directly or indirectly.
– Has no affiliation with the Company, members of the Board of Commissioners, members of the Board of Directors, or the Company`s Majority Shareholders.
– Do not have a business relationship either directly or indirectly with the Company.

The company is obliged to replace the Independent Commissioner whose in his/her length of service does not meet the applicable requirements.

Length of Service of the Board of Commissioners

– The members of the Board of Commissioners are appointed and dismissed by the GMS, the appointment is effective from the date specified in the GMS where they are appointed and ends at the closing of the 5th (fifth) Annual GMS after the date of their appointment, unless specified otherwise in the GMS.
– Once their period of service ends, members of the Board of Commissioners can be reappointed in accordance with the resolution of the GMS.
– A member of the Board of Commissioners can be dismissed at any time even though his length of service has yet to be ended by the GMS.

The termination is effective from the closing of the Meeting, unless the GMS determines otherwise.

– A member of the Board of Commissioners has the right to resign from his / her position by notifying in writing of his / her intentions to the Company and the Company is obliged to hold a GMS in order to decide on the resignation request for the member of the Board of Commissioners within a period of no later than 60 (sixty) days after the resignation letter has been accepted.

In the event that the Company does not hold a GMS within the timeframe as referred to, then with the elapsed period of time, the resignation of the members of the Board of Commissioners becomes valid without requiring the approval of the GMS.

– Before the resignation becomes effective, the relevant member of the Board of Commissioners is still obliged to complete their duties and responsibilities in accordance with the Articles of Association and the prevailing laws and regulations.
-In the event that a member of the Board of Commissioners resigns, resulting in less than 3 (three) members of the Board of Commissioners each, then the resignation is valid if it has been established by the GMS and a new member of the Board of Commissioners has been appointed, thus meeting the minimum requirements for the number of the Board of Commissioners.
– In the event that the GMS dismisses a member of the Board of Commissioners, the dismissal of the member of the Board of Commissioners must clearly state the reasons and provide an opportunity for the dismissed member of the Board of Commissioners to defend himself if the member of the Board of Commissioners attends the Meeting concerned.
– The length of service of a member of the Board of Commissioners will end automatically if the member of the Board of Commissioners:
a. Declared bankrupt or put under lockup pursuant to a court decision;
b. prohibited from serving as a member of the Board of Commissioners because of the provisions of the prevailing laws or regulations;
c. passed away; or
d. dismissed because of the resolution of the GMS.

– If the position of a member of the Board of Commissioners is vacant, resulting in less than 3 (three) members of the Board of Commissioners, the GMS must be held no later than 40 (forty) days after the vacancy occurs, to fill the vacancies by taking into account the prevailing laws and regulations in the capital market.
– If the position of the President Commissioner is vacant and as long as his successor has not been appointed or has not held his position, then a member of the Board of Commissioners appointed by the Board of Commissioners Meeting will carry out the duties of the President Commissioner and have the same powers and responsibilities as the President Commissioner.

Length of Service of Independent Commissioner

Independent Commissioners who have served for 2 (two) terms may be reappointed for the next period as long as the Independent Commissioner declares himself to remain independent at the GMS.

WORKING TIME

– The Board of Commissioners must provide sufficient time in order to carry out its duties and responsibilities optimally.

– The Board of Commissioners must attend at least at the meetings of the Board of Commissioners and at Committee meetings where members of the Board of Commissioners are members of the related Committee.

VALUES AND WORK ETHICS

– Have good character and morals.
– The Board of Commissioners must encourage ethical behavior and uphold the Company`s standards ethical, one way is by making itself a good role model for the Company`s Directors and Employees.
– The Board of Commissioners must meet the requirements of capability and integrity so that the implementation of its supervisory and advisory functions in the interests of the Company can be carried out properly.
– To carry out duties in a trustworthy, highly dedicated, upholding honesty, namely being honest in expressing one`s opinion, both verbally and in writing, as well as in attitudes and actions.
– Has an orientation to provide added value to the Company.
– Constantly improving their knowledge and understanding of issues relating to supervision and giving advice to the Board of Directors concerning managing the Company.
– Taking attitudes, opinions and actions must be based on the elements of objectivity, professionalism and independence in the interests of the Company which are in balance with the interests of the Stakeholders.
– In carrying out its duties and obligations, the interests of the Board of Commissioners as a whole are put above personal interests.
– The Board of Commissioners are obliged to comply with the prevailing laws and regulations, the Articles of Association and Corporate Governance Guidelines as well as the established Company policies.
– The Board of Commissioners are obliged to disclose information in accordance with the provisions of the applicable laws and regulations and always maintain the confidentiality of the Company`s confidential information entrusted to it in accordance with the provisions of the prevailing laws and regulations as well as Company policies.
– The Board of Commissioners should always avoid conflicts of interest.
– The Board of Commissioners are guided not to take advantage of their position for personal gain or for the benefit of other people or parties that are against the interests of the Company.
– To make disclosures in the event of a conflict of interest, and the concerned Member of the Board of Commissioners may not be involved in the Company`s decision making process related to this matter.
– To comply with the prevailing laws and regulations.

REPORTING AND ACCOUNTABILITY

The Board of Commissioners, under its function as supervisor, submits the supervisory accountability report for the management of the Company by the Board of Directors.

The Board of Commissioners` Supervisory Report is submitted to the General Meeting of Shareholders (GMS) for approval.

The responsibility of the Board of Commissioners to the GMS is a manifestation of the supervisory accountability for the management of the Company in the context of implementing the principles of Good Corporate Governance (GCG).

Reporting System related to the Nomination Function and Remuneration Function, among others, as follows:

– The report on the implementation of the duties and responsibilities of the committee is part of the report on the implementation of the duties and responsibilities of the Board of Commissioners.
– Disclosure of the implementation of functions related to Nomination and Remuneration in the annual report and the Company`s website at least containing a brief description of the implementation of the duties and responsibilities of the Nomination and Remuneration Committee in the financial year.

DUTIES, RESPONSIBILITIES AND AUTHORITIES

– The Board of Commissioners supervise management policies, the course of management in general, both regarding the Company and the Company`s business, and provide advice to the Board of Directors.
– The Board of Commissioners at any time during the working hours of the Company`s office has the right to enter the building and yard or other places which are being used or controlled by the Company and has the right to examine all books, letters and other evidence, to check and match the condition of cash and other matters as well as have the right to know all the actions which have been carried out by the Board of Directors.
– The Board of Directors and each member of the Board of Directors are required to provide an explanation of all matters asked by the Board of Commissioners.
– If all members of the Board of Directors are temporarily suspended and the Company does not have a single member of the Board of Directors, the Board of Commissioners are temporarily obliged to manage the Company. In such case the Board of Commissioners have the right to grant temporary powers to one or more members of the Board of Commissioners at the expense of the Board of Commissioners.
– In the event that there is only one member of the Board of Commissioners, all duties and powers assigned to the President Commissioner or members of the Board of Commissioners in these articles of association will also apply to him.
– At any time the Board of Commissioners pursuant to a decision of the Board of Commissioners Meeting may temporarily dismiss one or more members of the Board of Directors from his / her position (their position) if the member of the Board of Directors act contrary to the articles of association and / or the prevailing laws and regulations, the dismissal is by stating the reason.
– In the event that a member of the Board of Directors is temporarily suspended by the Board of Commissioners, the Company must hold a GMS within 45 (forty five) days after the date of the temporary dismissal.
– In the event that the GMS is unable to make a decision or after the said period has passed, the GMS is not held, the temporary dismissal of the members of the Board of Directors will be canceled.
– The GMS is chaired by a member of the Board of Commissioners who is appointed by the Board of Commissioners.

In the event that all members of the Board of Commissioners are absent or unable to attend, the GMS will be chaired by the President Director.

In the event that the President Director is absent or unable to attend, the GMS will be chaired by a member of the Board of Directors.

In the event that all members of the Board of Directors are absent or unable to attend, the GMS shall be chaired by shareholders who attend the GMS who are appointed from and by the GMS participants.

– If the member of the Board of Directors who is temporarily suspended is not present at the GMS concerned, then the temporary dismissal must be notified to the related person, along with its reasons.
– If all members of the Board of Directors are temporarily suspended or if for whatever reason there is no member of the Board of Directors at all, the Commissioner has the right to authorize one or more members of the Board of Commissioners to temporarily manage the Company and act on behalf as well as representing the Company.

Regarding the nomination function, duties and responsibilities, among others:

– To develop a nomination and selection system for strategic positions within the company by taking into account the principles of corporate governance.
– To provide recommendations regarding the selection procedures and nomination procedures for members of the Board of Commissioners, Directors and other executives in the Company, to make assessments and provide recommendations on the number of members of the Board of Commissioners and Directors of the Company.
– To provide recommendations on employment policies and others in Human Resources management that has a significant financial impact and / or legal risk for the Company.
– To evaluate and implementing corporate governance in relation to Human Resources policies and the Company`s Code of Conduct.
– To provide recommendations on policies and criteria required in the nomination process.
– To provide recommendations regarding candidates for the Board of Commissioners and / or Directors to be submitted to the General Meeting of Shareholders.
– To provide recommendations regarding the composition of positions of members of the Board of Directors and / or members of the Board of Commissioners.
– To provide recommendations regarding the evaluation of the performance of members of the Board of Directors and / or members of the Board of Commissioners.
– To provide recommendations on capacity building programs for members of the Board of Directors and / or members of the Board of Commissioners.
– To provide recommendations regarding the system and procedure for selecting and / or replacing members of the Board of Commissioners and Directors to be submitted to the General Meeting of Shareholders.
– To provide recommendations regarding independent parties who will become members of the Committee.
– To provide recommendations on the pension system for the Company`s employees.

Regarding the remuneration function, duties and responsibilities, among others:

To provide recommendations regarding remuneration policies and providing recommendations regarding evaluations of remuneration policies that apply to the Board of Commissioners, Directors and employees of the Company by considering financial performance, work performance, fairness as well as long-term goals and strategies.

Working Procedures related to the Nomination Function, the procedures to be carried out are as follows;

– To compile and create a nomination system and a selection process for strategic positions in the company with due observance to the principles of corporate governance.
– To compile policies on selection procedures and nomination procedures for members of the Board of Commissioners, Directors and other executives in the Company, procedures for assessment and policies on the number of members of the Board of Commissioners and Directors of the Company.
– To compile policies on employment and others in Human Resources management that has a significant financial impact and / or legal risk for the Company.
– To compile policies on corporate governance related to Human Resources policies and the Company`s Code of Conduct.
– To compile a policy regarding the criteria required in the nomination process.
– To compile procedures for evaluating the performance of members of the Board of Directors and / or members of the Board of Commissioners.
– To compile capacity building programs for members of the Board of Directors and / or members of the Board of Commissioners
– To compile a system and procedure for selecting and / or replacing members of the Board of Commissioners and Directors to be submitted to the General Meeting of Shareholders.

Working Procedures and Procedures related to the Remuneration Function, the procedures to be carried out are as follows:

To compile the structure, policies and amount of remuneration for members of the Board of Directors and / or members of the Board of Commissioners in the form of: salaries, honoraria, incentives and / or allowances which are fixed and / or variable in nature

PERFORMANCE APPRAISAL

– Performance appraisal is conducted on a self-assessment basis every year in order to assess the performance of the Board of Commissioners collegially. The results of the self-assessment of each member of the Board of Commissioners will be reviewed by the Board of Commissioners in order to determine the effectiveness of the board and to determine areas for improvement.
– The performance evaluation of the Board of Commissioners is conducted by the President Commissioner every year based on the duties and responsibilities of the Board of Commissioners.

MEETING

– The Board of Commissioners are obliged to hold a Meeting at least 1 (one) time in 2 (two) months.
– The Board of Commissioners are obliged to hold a meeting with the Board of Directors on a regular basis at least 1 (one) time in 3 (three) months.
– Meetings of the Board of Commissioners can be held at any time if deemed necessary by one or more members of the Board of Commissioners or at a written request from the Board of Directors or at the request of 1 (one) or more shareholders who collectively have 1/10 (one tenth) of the total shares which have been issued by the Company with valid voting rights.
– Summons to the Board of Commissioners Meeting are conducted by the President Commissioner. In the event that the President Commissioner is absent for any reason, which does not need to be proven to a third party, then 1 (one) member of the Board of Commissioners appointed by the President Commissioner has the right and authority to call a meeting of the Board of Commissioners.
– Summons to the Board of Commissioners Meeting are sent by any means in written form, in which summons must be sent to members of the Board of Commissioners no later than 3 (three) calendar days before the Meeting is held or in a shorter time in urgent circumstances, namely no later than 1 (one) calendar day before the Meeting, excluding the date of the Invitation and the date of the Meeting, the urgent situation is determined by the President Commissioner.

If all members of the Board of Commissioners are present and / or represented in the Board of Commissioners Meeting, prior summons are not required.

– The invitation to the Meeting must state the agenda, date, time and place of the Meeting.
– Meetings of the Board of Commissioners are held at the domicile of the Company or at the domicile of the Stock Exchange where the Company`s shares are listed as long as they are within the territory of the Republic of Indonesia.

If all members of the Board of Commissioners are present or represented, the Meeting of the Board of Commissioners can be held anywhere as long as it is within the territory of the Republic of Indonesia and is entitled to make legal and binding decisions.

– The meeting of the Board of Commissioners is chaired by the President Commissioner, if the President Commissioner is not present or is unable to attend the meeting, which does not need to be proven to a third party, the meeting is chaired by a member of the Board of Commissioners who is elected by and from the members of the Board of Commissioners who are present at the Meeting.
– A member of the Board of Commissioners can only be represented at the Meeting of the Board of Commissioners by another member of the Board of Commissioners based on a power of attorney.
– Meetings of the Board of Commissioners are only valid and can take binding decisions if more than ½ (one half) of the members of the Board of Commissioners are present or represented at the Meeting.
– Decisions of the Board of Commissioners Meeting must be made based on deliberation to reach a consensus; In the event that a deliberation to reach a consensus is not reached, the decision is made by voting in favor of more than ½ (one half) of the number of votes legally cast in the Meeting.
– If the disagree and agree votes are equal, the President Commissioner as chairman of the meeting will decide it.
a. Each member of the Board of Commissioners has the right to cast 1 (one) vote and an additional 1 (one) vote for each other member of the Board of Commissioners he represents.
b. Every member of the Board of Commissioners who personally in any way either directly or indirectly has an interest in a transaction, contract or proposed contract, in which the Company is one of the parties must state the nature of the interest in a Board of Commissioners Meeting and have no right to participate in voting on matters relating to the transaction or contract, unless the Commissioner Board Meeting determines otherwise.
c. Voting regarding individuals is conducted by closed ballot without signature, while voting on other matters is conducted orally unless the chairman of the Meeting determines otherwise without any objection from the present party (-ies).
– Minutes of the Board of Commissioners Meeting must be prepared by a person present at the Meeting who is appointed by the Chair of the Meeting and then must be signed by the Chair of the Meeting and by another member of the Board of Commissioners who is present and / or represented at the Meeting concerned.

If the minutes are made by a notary, the signature is not required.

– Minutes of the Board of Commissioners Meeting are valid evidence regarding decisions taken at the relevant Board of Commissioners Meeting, both for members of the Board of Commissioners and for third parties.
– The Board of Commissioners can also take legal and binding decisions without holding a meeting of the Board of Commissioners, provided that all members of the Board of Commissioners have been notified in writing of the proposals concerned and all members of the Board of Commissioners have approved the proposal submitted in writing and signed the agreement.

Decisions which are made in this way have the same strength as decisions made legally at a meeting of the Board of Commissioners.

CLOSING

– The Guidelines and Code of Ethics of the Board of Commissioners are binding for each member of the Board of Commissioners.
– The Guidelines and Code of Ethics of the Board of Commissioners must be disclosed in the Annual Report which indicates that the Company already has Guidelines.
– The complete contents of the Guidelines and Code of Ethics of the Board of Commissioners must be posted on the Company`s website.