BoC Charter

CHARTER OF THE BOARD OF COMMISSIONERS

 

CHAPTER I

INTRODUCTION

 

1. Preface

PT Indo Tambangraya Megah Tbk ( ITM ) is a leading Indonesian coal and energy provider with

sustainable  value  creation  along  the  value  chain  and   publicly listed   at  the  Indonesia  Stock

Exchange (IDX), which is obliged to comply with all related laws and regulations prevail to its

status and  business.

Compliance is essential for ITM in the accomplishment of its vision and mission. Furthermore

ITM  also  upholds  the  principles  and  rules  of  Good  Corporate  Governance  (“GCG”)  namely

transparency,  accountability,  responsibility,  independency  and  fairness  and  promotes  best

governance practices while managing its operation in the interest of shareholders and wider

stakeholders.

In  performing  its  supervisory  role  vis  a  vis  the  Board  of  Directors  (BOD)  and  to  facilitate  its

works in fulfillment of its fiduciary duties, the Board of Commissioners (BOC) needs to have a

general  guidelines  named  as    “the  Charter  of  the  Board  of  Commissioners”  (hereinafter

referred to as “BOC Charter”). The above mentioned guidelines shall be the reference for the

Board  Members  in  executing  its  responsibility,  authority  and  in  acting  consistently  for  the

advancement of the Company and the interest of all stakeholders as well as in evaluating the

performance of committees under BOC.

The first BOC Charter has been in effect since August 2009. Recognizing developments in the

company’s  GCG,  adoption of  SDG  and  new  capital market  regulations,  the  Charter  is  hereby

amended.

 

2. Vision and Mission

Vision

A  value-enhancing  supervisory  organ,  acting  on  behalf  of  shareholders  and  wider  legitimate

stakeholders  to   oversee  and   keep  the   BOD’s   individual   and   collective   leadership   and

managerial  actions  in  line  with  prevailing  Indonesian  laws  and  international  agreements  of

which Indonesia is a party, principles and rules of good corporate governance and sustainable

development as well as observed ethical norms.

Mission

The  BOC  acts  collectively.  It  taps  professional  expertise  through  various  committees  with  a

view   to   maximizing   its   mastery   of   information   about   the   business,   leadership   and

management   of   ITM.   The   BOC   observes   transparency,   accountability,   responsibility,

independency  and  fairness  in  its  works.  It  bases  its  relationship  with  the  BOD  on  mutual

respect as stipulated in the Company Law and the Capital Market Law.

 

3. Objective

This  Charter  stipulates  the  rules  and  guidelines  for  the  BOC  in  designing  and  executing  its

supervisory  duties,  responsibility  and  authority  objectively  and  effectively,  observant  of  the

Company’s  values  and  in  compliance  with  the  principles  and  rules  of  good  corporate

governance. The Charter also serves as the basis for the performance  evaluation of the BOC

and each of its members as well as performance evaluation of each Committee under BOC.

 

CHAPTER 2

ESTABLISHMENT, ORGANIZATION AND TERM OF OFFICE

 

2.1 Reference

    Company Law

    Mining and relevant Laws

    Capital Market Law and Regulations

    Indonesia Stock Exchange Rule and Regulations

    Indonesia’s Code of Good Corporate Governance

    Company’s Articles of Association

    Company’s GCG Policy

    OECD on Good Corporate Governance

    Social Responsibility Framework

    Sustainable Development Goals

    ASEAN CG Scorecard

 

2.2       Organization

The   members   of   the   BOC   are   appointed   and   dismissed   by   the   General   Meeting   of

Shareholders. The process of evaluation and selection of candidates shall be carried out by the

Sustainable   Development,   Good   Corporate   Governance,   Nomination   and   Compensation

Committee (SDGNCC).   The Company establishes and maintains a balanced BOC membership

in terms of professional backgrounds and gender composition.

 

2.2.1. Structure

2.2.1.1. The BOC shall consist of at least 2 (two) members. One member serves as  President

Commissioner while the rest serves as ordinary members of the BOC;

2.2.1.2.  The  number  of  and  composition  of  Commissioners  shall  enable  the  BOC  to  make

decision  in  an  effective,  timely  and  independent  manner.    The  Company  aims  at  a  BOC

membership that consists of at least 1/3 (one third) Independent Commissioner;

2.2.1.3.   The   President   Commissioner   position   shall   be   taken   up   by   an   Independent

Commissioner;

2.2.1.4.   The   Chairman   of   the   Company   should   not   serve   as   Chairman   in   any   other

company including the Company’s subsidiaries

 

2.2.2. Multiple and Mobility of Membership

2.2.2.1  Member of the BOC can hold multiple membership as follows :

-  as Director in not more than 2 (two) other publicly listed companies,  and

-  as Commissioner in not more than 2  (two) other publicly listed companies

2.2.2.2  A BOC member who does not serve directorship position  in any other publicly    listed

company can serve as Commissioner in up to 4 (four) other publicly listed companies;

2.2.2.3  A  BOC  member  can  serve  in  up  to  5  (five)  publicly listed  companies  as  committee

member under the BOC of the respective companies;

2.2.2.4  To  be  eligible  as  Chairman  of  the  BOC,  a  retirement  transition  of  6  (six)  months  is

needed for President Director;

2.2.2.5  To  be  eligible  as  Independent  Commissioner,  a  retirement  transition  of  6  (six)

months is needed for affiliated commissioners or directors;

2.2.2.6  After  2  (two)  terms  of  service  or  9 (nine) years  whichever  is  longer  an  independent

commissioner    can only continue to serve as independent commissioner after

submission of a written statement on independency ;

2.2.2.7  A  director  or  commissioner  of  subsidiary  is  eligible  for  commissioner  position  at  the

Company.

 

2.2.3     Membership Requirements

Members of the BOC are expected to bring professional supervisory expertise and know-how

to  the  BOC  and  shall  be  prepared  to  do    their  utmost  while  performing    their  duties,

responsibility and authority.

2.2.3.1  General Requirements

In addition to below requirements, those to be appointed as member of the BOC shall meet

the basic requirements as stated in the capital market regulations.

2.2.3.1.1.  Each  Commissioner  shall  have  a  high  professional,  and  ethical  standards,  field

experience as well as high mastery of expertise, skills and competencies that are of relevance

to the business of the company;

2.2.3.1.2. Each Commissioner shall have a good understanding and commitment to abide with

the  company  law,  capital  market  law  and  related  regulations,  the  Company’s  articles  of

association and all regulations that prevail in the Company;

2.2.3.1.3.  Each  Commissioner  shall  have  a  good  understanding of  best  practices of  GCG and

social responsibility and is committed to adhere to them.

2.2.3.2  Independence Requirements

The  BOC  as  an  organ  of  the  company  shall  function  and  be  responsible  collectively  while

overseeing and providing advices to the BOD.  At least one of the Independent Commissioners

shall have accounting or finance background. The Independent Commissioner(s) shall fulfill the

following requirements:

2.2.3.2.1. They do not have any affiliate relation with the controlling shareholders;

2.2.3.2.2. They do not have family affiliations with the other members of the BOC  and those of

the BOD either horizontally or vertically ;

2.2.3.2.3. They do not   occupy any position as a member of the BOC or  the     BOD     in     any

companies that are affiliated with the Company;

2.2.3.2.4.  They  do not  act  as  an  agent  to  protect  the  interest  of  the  company’s  directors or

commissioners, major shareholders or   other  shareholders  who  are  related  to  the  company

majority shareholders;

2.2.3.2.5.  They  are  able  to  perform  duty,  express  opinions  and  report  on  their  works  and

performance  as  designated  by  the  BOC  independent  of  the  control  and  influence  of  the

company’s major shareholder or persons related to them, including their closed relatives;

2.2.3.2.6. Members of the BOC shall demonstrate independence and       autonomy while

performing their supervisory duties, responsibility and authority independently;

2.2.3.2.7.  They  do  not  have  business  relationship  either  directly  or  indirectly  with  the

Company’s business;

2.2.3.2.8. They are not a person who works with or have authority and   responsibility  to  plan,

lead, control or supervise the Company’s activities within the last 6 (six) months except for the

purpose of reappointment as Independent Commissioner in the Company for the next period.

 

2.3         Term of Office

2.3.1     Each member of the BOC  shall be appointed and dismissed by the General Meeting of

Shareholders (GMS). Such appointment shall be effective as of the date determined in

the  GMS and  shall  cease  at  the  closing  of  the  3 rd (third)  Annual  General  Meeting  of

Shareholders  (AGMS) after the date of appointment, without prejudice to the right of

the GMS to dismiss Commissioner at any time by stating the reasons for the dismissal

and having given a fair  chance for defense to the Commissioner under dismissal;

2.3.2     The  member  of  the  Board  of  Commissioners whose office  term has  come  to  an  end

may be nominated for reappointment;

2.3.3     Notwithstanding the provision in 2.3.3. an Independent Commissioner can only serve

Audit Committee position for not more than 2 terms;

2.3.4    Each Commissioner may resign from the post by submitting a letter of resignation

and  the  resignation comes  into  force  once  it  is accepted  by  the  General  Meeting  of

Shareholders.  The resigning member may be held accountable for her or his works as

member of the BOC from the appointment date to the resignation date;

2.3.5   The term of office for the successor who is appointed to replace a resigned or dismissed

member  of  the  BOC  shall  be  limited  to  the  remaining  office  term  of  the  replaced

member, unless otherwise determined by the GMS;

2.3.6     Commissioner shall retire when he or she reaches the age of 72  and such retirement

shall be effective on the date of the following  AGMS;

2.3.7     The office term of  a member of Commissioners shall  automatically cease  under the

conditions of :

2.3.7.1  Resignation

2.3.7.2  Expiry of the term of office

2.3.7.3  Non-fulfillment of statutory requirements

2.3.7.4  Death

2.3.7.5  Dismissal by virtue of a resolution of GMS

2.3.7.6  Bankrupt or guardianship by virtue of a court verdict

2.3.7.7  Retirement

 

CHAPTER 3

DUTY, RESPONSIBILITY AND AUTHORITY

 

3.1      Duties and Responsibilities

Supervising and providing advices to the Board of Directors are the main function of the BOC

in both toward the policies and the operations of Company.  In carrying out its duties, the BOC

has the right to establish appropriate committees to assist the board in reviewing and making

informed recommendations to the BOD.  Through such supervision the BOC ensures that the

BOD  strictly  complies with  the  Company  Articles  of Association,  resolutions  of  shareholders’

meeting,  related  laws  and  regulations and  acts  in  good  faith  with  a  view  to  maximizing  the

company’s value to shareholders and stakeholders.

The BOC requires new members to attend an orientation session to learn about the company’s

expectation  from  their roles,  duties  and  responsibilities  and  what  its  corporate  governance

policy  and  practices  are.    The  orientation  will  also  help  them  understand  the  company’s

business better as well as provide a chance to visit the company’s operations as a preparation

for their tasks.

The  BOC  has  a  policy  to  provide  directorship  education  about  good  corporate  governance,

industrial outlooks, business prospects and innovations where it urges commissioner to attend

seminar  or  coursework  organized  by  the  Indonesian  Institute  for  Corporate  Directorship  or

other similar and reputable institutes to promote effective board performances.

In  certain  condition,  BOC  have  to  convene  AGMS  or  other  EGMS  in  accordance  with  their

authority as stipulated in the company’s AoA and relevant regulations.

BOC  is  entitled  to  take  over  the  authority  and  responsibility  of  BOD  just  in  case  all  of  BOD

members are engaging in a conflict of interest case with the Company.

BOC  is  entitled  to  temporarily  terminate  BOD  members  and  such  of  action  shall  need

disclosure and have to be confirmed by the GMS as regulated in the Company’s AoA and shall

also comply with the capital market regulation.

 

3.1.1     Scope of Work

In addition to any  action taken as required by  the laws,  the Company’s AoA and the

resolutions   of   the   shareholders’   meeting,   the   BOC   hereby   stipulates   that   the

consideration,  acknowledgement  and  approval  of  the  following  matters  shall  be

vested  under  the  authority,  duty  and  responsibility  of  the  BOC  in  relation  to  its

monitoring and supervisory roles :

3.1.1.1         the  company’s  policies,  business  strategies,  business  plans        and  annual

budget;

3.1.1.2         the   company’s monthly and quarterly performance and operation report

in  which  performance  is  compared  with  the  plan,  budget   and  business

outlook of the following period of the budget year;

3.1.1.3         the Company’s investment in a project worth more than IDR 150 billion;

3.1.1.4         Investment which exceeds 10 percent of the total investment budget of an

approved project, and which exceeds 10 percent of the total non project

investment budget;

3.1.1.5         transaction or act which materially affects the company’s financial status,

liabilities, business strategy and reputation;

3.1.1.6         purchase and disposal of assets, acquisition of business and  participation

in  a  joint  venture  project  which  are  not  in  conflict  with  the  rules  and

regulations   of  the  Financial  Services  Authority  (OJK)   and  the Indonesia

Stock Exchange (IDX);

3.1.1.7         entering into a contract not relating to a normal course of       business of

the company  and  any  contract  relating  to  normal   course  of  business  of

the company that is material;

3.1.1.8         parts  of  a  connected  transactions  between  the  company,  its      parent

company,  subsidiaries,  associated  companies  and     related  individuals

according to the capital market  regulations;

3.1.1.9         any  transaction which causes the ratio of company’s debt-to  equity ratio

to exceeds 2 : 1;

3.1.1.10       distribution of interim dividend;

3.1.1.11       net borrowing that exceeds a maximum amount of  IDR 30 billion subject

to annual review;

3.1.1.12       changes in policy and practices with material implications to accounting,

risk management and  financial reserves

3.1.1.13       significant changes relating to management and financial control system;

3.1.1.14       determination   and   review   of   approval   authority   granted   to         the

executives;

3.1.1.15       approval  of  salary  increment  budget  and  bonus  or  bonus  formula  or

annual  remuneration  package  adjustment  formula  of  the  board  and

committee  members, executives and employees;

3.1.1.16       nomination,   appointment,   recruitment   and   termination   of   directors,

Head of Internal Audit and Corporate Secretary and   the       secretary     of

the BOC and its committees;

3.1.1.17       appointment and determination of  authority of the sub committees;

3.1.1.18       establishing and supervising the management in accordance with the good

corporate governance policy and  practices;

3.1.1.19       appointment of directors or executives to be directors of  subsidiaries and

associated companies;

3.1.1.20       registration of new companies and  dissolution of companies;

3.1.1.21       duty to keep corporate information strictly confidential especially internal

information  not  to  be  disclosed  to  the  public  or  information  that  may

affect its business or share price;

3.1.1.22       amendment  to  the  scope  of  approval  authority  of  the  BOC  as  stated  in

item  1- 20 above

 

3.1.2     Succession Plan

The   BOC   with   the   assistance   of   the   SDGNCC   in   cooperation   with   Corporate

Secretary and HR Head  prepares succession plan for the BOD and BOC   members     to

ensure continuity and sustainability of the Company.

The succession plan includes assessment approach, leadership and managerial training

and development programs and incubation and facilitation program.

 

3.1.3     Committees

To assist the  BOC  in exercising its  oversight and advisory roles the BOC  establishes

committees  in  accordance  with  prevailing  laws  and  the  Company’s  policies.  The

committees   include   Audit   and   Risk   Oversight   Committee   and   Committee   on

Sustainable Development, GCG,   Nomination,  and Compensation.   Board committee

establishment shall  be based on the BOC Decree.

The BOC  shall appoint  their  members to serve in that committee.  The qualifications

of selected commissioners  shall be appropriate for the duties of each committee and

each committee shall be chaired by independent commissioner unless there is no such

independent  commissioner.       The  term  of  office  of  a  committee  member  shall  be

three  years  and  can  be  renewed  by  the  BOC  and  shall  be  stipulated  in  relevant

committee’s charter.

Each board committee shall perform its duties as assigned by the  BOC. Management

shall  attend  the  board  committee  meetings  on  invitation    to  submit  reports  or  to

provide  information.    Board  committees  shall  have  the  right  to  engage  external

experts at the company’s expenses.

Each  committee  shall  have  their  own  Charter  as  their  working  guideline.    They  shall

submit   their   working   reports   to   the   BOC      as   well   as      every   proposal   and

recommendation.

 

3.1.4     Nomination of the members of the BOC

The SDGNCC shall  recommend to the BOC the nomination criteria and search for the

candidates  with  appropriate  qualifications.  It  also  nominates  the  candidates  to  the

BOC   to  replace  the  retiring  Commissioners   or  to  fill  any  other vacancy.        The  BOC

chooses a candidate that fits with the Company’s needs the most and propose her or

him  to the General Meeting of Shareholders for appointment.

 

3.1.5         Relationship  between BOC and BOD

3.1.5.1. The BOC may invite Directors and or executives of the company to attend its

meeting with the purpose of supplying the BOC with best possible information

pertaining   to   areas   for   which   the   invited   directors   or   executives   are

responsible. Such mechanism aids the BOC to make an informed decision. The

invited  directors   and   or   executives   are   thereby   able   to   gain   a   better

understanding of the businesses and issues that are deemed important by the

BOC.

To forge a mutual understanding and respect between the BOC and the BOD

to the  advantage  of  the  Company’s  shareholders  and  stakeholders  the  BOC

shall convene a joint meeting of the BOC and the BOD at least once a year. In

addition,  members  of  the  BOC    may  directly  communicate  with  individual

executives without  interfering with the management’s day-to-day operation.

3.1.5.2  The BOC and the BOD  shall  jointly signed the company’s Annual Report.

3.1.5.3  Each  member of the BOD is obliged to provide to the BOC any material

information so required by the BOC.  Minutes of the BOD meetings shall also

be made available if the BOC considers them of importance to its supervisory

works.

 

3.1.6     Business Ethics

The BOC  and its individual members shall serve as a   good role model in fostering the

observance  of  the  following  basic    ethical  standards  for  the  whole  members  of  the

organization;

A BOC member  is not eligible for  loan programs of the Company;

Each BOC member is obliged to disclose their shareholdings of the company’s shares

either direct or indirect through relatives and nominees;

Each  member of the BOC  declares through the Company’s Transparency Center any

intents  to  get  involved  in  any  transactions  or  business  contracts  with  the  Company

with  a  view  to  avoiding  her  or  his  involvement  in  the  decision  on  the  respective

transactions  or business contracts;

3.1.6.1  Insider Information

The  BOC members  protect  the  Company’s  proprietary    material  information

and shall not engage in insider trading

3.1.6.2  Confidentiality

The   BOC   members   shall   keep   classified   corporate   information   strictly

confidential,  especially  internal  information  that    may  affect  the  business  of

the company or its share price

3.1.6.3  Trading Rule

The BOC  members shall refrain from trading the company’s shares no fewer

than  30  days  prior  to  the  information  disclosure  to  the  public  if  that

information  is  a  report  based  on  an  accounting  period  such  as  an  operating

result, financial statements and an annual report;

In case the information is a report of corporate action in a particular situation

such as acquisition / disposal of assets, connected transaction, joint venture /

cancellation  of  joint  venture,  capital  increase/  capital  reduction,  issuance  of

new  securities,  repurchase  of  own  shares,  payment  or  non  payment  of

dividend or incidents that affect the company’s share price, in such cases, the

BOC members shall refrain from trading the company’s shares from the period

he  /  she  learns  of  the  information  to  the  day  the  company  discloses  the

information to public;

Any  BOC  members  is  required  to  report  their  dealings  in  company’s  shares

within 3 business days after such of trading.

3.1.6.4  Anti – corruption

The BOC members shall refrain and be prohibited from receiving gratification

or  take  personal  benefits  from  the  company’s  business  relations  with  third

parties.

 

3.1.7     Accountability

In performing its supervisory role, the BOC  shall submit its accountability report on its

supervisory   works   vis-à-vis   the   BOD   as   regards   the   latter’s   conduct   of   the

management of the company. The Report of the BOC shall be reflected in the approval

of Annual Report  and ratification of the company’s financial statement by  the General

Meeting of Shareholders.

The General Meeting of Shareholders approval to the Annual Report and ratification

on  the  Financial  Statement  of  the  company  shall  release  and  discharge  the  BOC

members as long as it has been reflected in the annual report without minimizing the

responsibility  of  each  member  of  the  BOC    in  the  event  that  a  crime,  mistake  or negligence

occurs causing damage to any third parties which cannot be indemnified by the company’s assets.

 

3.1.8    Performance Evaluation

The  BOC    shall  assess  its  performance  annually,    as  board  as  well  as  individual

commissioners.    In  addition  to  self-assessment,  a  separate  assessment  is  to  be

conducted by the SDGNCC,  the results of which are reported to the BOC

The  SDGNCC  shall  recommend  to  the  BOC  the  criteria  for  assessing  the  annual

performance of the Commissioners.  The general guidelines of the BOC  performance

individually and collectively shall consider the  following elements :

3.1.8.1  strategic direction setting

3.1.8.2  breath and depth of the high level policies

3.1.8.3  effectiveness in monitoring  and supervising the BOD.

3.1.8.4  success in integrating the interests of stakeholders in the Company’s strategic

and  functional  management  and  in  supervising  compliance  of  the  Company

with regulatory system

3.1.8.5  effectiveness of the board structure

3.1.8.6  record of attendance in both the Board of Commissioners and the Committees

meeting whenever applicable

3.1.8.7  integrity  and  refrain  from  engaging  in  activities  that  are  in  conflict  with  the

company’s interests.

3.1.8.8  knowledge, understanding, commitment and ability  to observe the company’s

values, vision, mission, long term plan

3.1.8.9  capability  in  expressing  his/her  independent  argumentations  and  opinion  in

providing solutions to the company’s strategic issues

 

3.1.9      Remuneration

3.1.9.1   Remuneration for the BOC as a group shall be approved by the General

Meeting  of  Shareholders with  distribution  among  individual  members  left  to

be decided by  the President Commissioner;

3.1.9.2. Remuneration  package  for  the  BOC  members  shall  be  based  on  up-to-date

survey on market condition.  It is proposed by  the  Compensation Committee to the BOC for final

decision. The package is reviewed on a periodic basis by the Compensation Committee;

3.1.9.3. The formula for remuneration for each member of the BOC shall not refer to a specific

assignment or  company’s performance.

 

3.2         Authority and Delegation of  Authority

3.2.1. In accordance with the Company’s AoA , the BOC  shall have the authority to approve

certain legal actions taken by the BOC;

3.2.2. The  BOC   may  hire  external  expert  consultants  to  provide  advice  with  regard  to  the

functioning of the BOC and the committees at the company expenses;

3.2.3. Each  member  of  the  BOC shall  individually  or  jointly  be  entitled  to  enter  buildings,

offices and yards used by the Company during the office hours and shall be entitled to

examine the books and documents and assets of the Company;

3.2.4. At  any time the BOC  may, under a resolution of the Meeting of the BOC, suspend one

or more member(s) of the BOD  from his(their) post(s) if he/they have acted in a way

contrary  to  the  Company  AoA  and/or  in  contravention  of  applicable  laws  and

regulations;  reasons for  such suspension shall be  stated explicitly in accordance with

prevailing Law;

3.2.5. If  all  the  members  of  the BOD are  suspended  or  if  for  any  cause  no member of  the

BOD is available, then the BOC shall grant authority to one or more member(s) of the

BOC  to  temporarily  manage  the  Company  and  to  act  for  and  on  behalf  of  and  to

represent the Company;

3.2.6. The  BOC might  also  have  other  authorities  as  set  out  in  the  Delegation  of  Authority

table.

 

CHAPTER 4

MEETING, REPORTING AND BUDGET

 

4.1 Meeting

4.1.1. The BOC shall convene its Meeting at least once  for every 2 months.      Such meeting

shall valid if it is attended by majority of the BOC members;

4.1.2. The  BOC  is  also  oblige  to  convene  joint  meeting  with  BOD  at  least  once  for  every  4

months;

4.1.3. By  the  end  of  a  calendar  year,    the  BOC  sets  a  meeting  schedule  for  the  following

calendar year;

4.1.4. The  meeting  material  for  such  of  scheduled  meeting  shall  be  distributed  to  the

meeting participants at the latest 5 (five) working days prior to the meeting date.  For

an  unscheduled  meeting,  the  meeting  material  may  be  distributed  just  prior  to  the

meeting;

4.1.5. President Commissioner shall chair the meetings of the BOC.

4.1.6. In the absence or inability of President Commissioner to attend a meeting of the BOC,

of which case it is unnecessary to give evidence to third parties, a member of the BOC

elected by and from the members of the BOC being present at the Meeting may chair

the Meeting of the BOC;

4.1.7. A  member of the BOC may be represented in the Meeting of the BOC only by another

member of the BOC under a power of attorney;

4.1.8. A  meeting of the BOC shall be legal and entitled to make binding resolutions if more

than 1/2 (one half) of the number of members of the BOC  are present or represented

at the meeting;

4.1.9. Resolutions  of  the  Meeting  of  the  BOC   shall  be  made  based  on  deliberations  for a

consensus. If consensus is not achieved resolutions shall be made by the majority;

4.1.10. Minutes of   meeting  of  the  BOC  and  Joint  BOC  and BOD  Meeting shall  be  signed  by

participating members;

4.1.11.The BOC  may also make legal, binding decisions without having to convene a meeting

of the BOC, on condition that all the members of the BOC have been notified in writing

of  the  relevant  proposal  and  that  all  the  members  of  the  BOC   give  approval  to  the

proposal put forward in writing and sign such approval. Resolutions so made in such a

procedure shall have the same force as those made legally at the meeting of the BOC.

 

4.2     Reporting

Report  of  the  BOC    activities    and  the  company  performance  for  every  fiscal  year  shall  be

reflected  in  the  company’s  Annual  Report  and  propose  to  the  AGMS     for  approval  and

ratification

 

4.3     Budget

BOC   sets  its  annual  work  plan  and  budget,  including  budget  for  committees and  professional

expenses for expert/consultant  by end of  September of the calendar year.

 

CHAPTER 5

CLOSING

 

5.1         Validity and Evaluation

5.1.1.    This Amendment of BOC  Charter takes effect on the date stated below  to replace the

first BOC Charter which was established  in August 2009

5.1.2.    This  BOC  Charter shall be reviewed on a periodic basis with a view to aligning it with

developments   in   capital market laws and regulations,  as well as in  GCG and social

responsibilities in general.

 

Approved by the Board of Commissioners of PT Indo Tambangraya Megah Tbk on 7 December 2015