STRUCTURE AND MECHANISM OF CORPORATE GOVERNANCE

AUDIT COMMITTEE

Audit Committee is a supporting organ under Board of Commissioners, which is formed to assist the Board of Commissioners in supervising the Company’s management in accordance with the principles of Good Corporate Governance (GCG). Audit Committee is formed by the Board of Commissioners with reference to:

1. Law No. 19 of 2003 dated October 4, 2003 concerning State- Owned Enterprises;
2. Law No. 40 of 2007 concerning Limited Liability Companies;
3. Regulation of the Minister of SOEs No. PER-12/MBU/2012 dated August 24, 2012 concerning Supporting Organs for Board of Commissioners/Supervisory Board of State-Owned Enterprises;
4. Regulation of the Minister of SOEs No. PER-01/MBU/2011 dated August 1, 2011 concerning the Implementation of Good Corporate Governance in State-Owned Enterprises;
5. Decree of the Secretary of the Ministry of SOEs No. SK-16/S. MBU/2012 concerning Indicators/Parameters of Assessment and Evaluation of the Implementation of Good Corporate Governance in SOEs; and
6. Company’s Articles of Association.

AUDIT COMMITTEE DUTIES AND RESPONSIBILITIES

The duties of Audit Committee are as follows:

1. Audit Committee works collectively in carrying out its duties to assist the Board of Commissioners;
2. Audit Committee is independent both in carrying out its duties and in reports and being responsible to the Board of Commissioners;
3. Audit Committee assists the Board of Commissioners in ensuring the effectiveness of internal control system and the effectiveness of duties of the auditors of Public Accounting Firm (KAP) and Internal Audit Unit (SPI);
4. Audit Committee assesses the implementation of activities and the results of audits carried out by SPI and KAP auditors;
5. Audit Committee provides recommendations regarding the improvement of internal control and its implementation; 6. Audit Committee ensures that there is a satisfactory reviewprocedure for all information issued by the company;
6. Audit Committee identifies matters that require the Board of Commissioners’ attention as well as other tasks assigned by the Board of Commissioners;
7. Audit Committee proposes to the Board of Commissioners a candidate for the KAP to audit the Annual Financial Statements along with the reasons for nomination and proposed fee/ fee for the KAP auditor;
8. Special Assignment from Board of Commissioners:
1. Special tasks assigned to Audit Committee by the Board of Commissioners is carried out with a written order containing:
• Name of assignee;
• Nature of assignment;