STRUCTURE AND MECHANISM OF CORPORATE GOVERNANCE

Principle 3: Establish Organizational Structure, Authority and Responsibilities According to Needs

Under the supervision of Board of Commissioners, Board of Directors established the organizational structure, reporting lines and authorities, as well as adequate responsibilities to achieve the Company's objectives.

1. Considering the entire entity structure Board of Directors and Board of Commissioners consider the various structures used (including the operational, legal entities, outsourcing service providers) to support the achievement of the Company's objectives.
2. Establish reporting lines Management designs and evaluates reporting lines for each structure/entity in order to be able to execute authority, responsibility, and information flow in managing its activities.
3. Define, allocate, and limit authority and responsibility Board of Directors and Board of Commissioners delegate authority, define and allocate responsibilities, and adequately segregate functions at various levels within the organization.
4. Responsibilities and reporting lines can be divided into 3 Lines Model (Three Lines Model)
1. Management and day-to-day operational employees are in the First Line, responsible for maintaining the effectiveness of risk management and internal control. The First Line is responsible for reporting performance to the Board of Directors;
2. Risk management, compliance, legal, and quality control are in the Second Line, responsible for facilitating and monitoring the effectiveness of risk management and internal control in the First Line. The Second Line provides assistance, support, expertise, complement, monitoring and criticism to the First Line. The First Line and Second Line roles can be formed together or separately. The Second Line is responsible for and reports to the Board of Directors; dan
3. Internal auditors act as the Third Line responsible for assessing and reporting on the adequacy and effectiveness of risk management, internal control, and corporate governance. The position of internal auditor is relatively more independent from the Management since it is accountable and reports directly to the President Director.
4. Carry out evaluations, adjustments, and improvements to the organizational structure in the event of strategic environmental changes.
5. Determine the appropriate number of employees for managerial and non-managerial formations.

Principle 4: Commitment on Competencies

The Company demonstrates a commitment to attracting, developing and retaining competent individuals, by:

1. Develop policies and practices (competency standards) Policies and practices describe the organization's expectations of the competencies needed to support the