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BOARD MANUAL
PT TIMAH (Persero) Tbk.
Revised I
Guidance for Commissioners and Directors
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Legalization Page of Board Manual PT TIMAH (Persero) Tbk
Board Manual is the text of agreement between the Directors and Commissioners
as the legal basis governing the working relationship between the two (2) organs
of the Company, which cannot be separated from the Articles of Association, and
soft structure of Good Corporate Governance (GCG).
Through the legalization of Board Manual, the rules that have been agreed by the
Board of Commissioners and the Board of Directors have been authorized to be
executed by both parties consistently and continuously, in an effort to achieve the
Vision and Mission of the Company that have been set. On the other hand, the
endorsement of the Board Manual is the commitment of the Board of
Commissioners and Directors in implementing Good Corporate Governance
(GCG) consequently that must be the role model for the entire range of the
implementers in the corporate environment.
Jakarta, 18 September 2014
Board of Commissioners Board of Directors
Insmerda Lebang Sukrisno
President Commissioner President Director
Suhendro Ahmad Subagja
Independent Commissioner Operational and Production Director
Erfi Triassunu Akhmad Rosidi
Commissioner Financial Director
Eko Prasojo Dadang Mulyadi
Commissioner Trade Director
Mochtar Husein Abrun Abubakar
Commissioner General & Human Resource Director
Abdul Hudarni Rani Purwijayanto
Commissioner Planning & Business Development Director
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Preface
The Board Manual was made as one of the requirements for the Company that has
been required to implement the principles of Good Corporate Governance in each
business process.
By performing all provisions stipulated in the Board Manual, the commitment of
the Board of Commissioners and the Board of Directors can be a motivation for
employees to implement good corporate governance principles consistently,
consequently, and continuously in the work environment.
Each enhancement of the contents of the Board Manual will be carried out by the
Corporate Secretary Work Unit with adjustment to the current conditions and
applicable regulations relating to SOEs.
Jakarta, 18 September 2014
Head of Corporate Secretary
Agung Nugroho
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TABLE of CONTENTS
Table of Content
CHAPTER I: INTRODUCTION I.1 TWO-TIER BOARD SYSTEM
I.2 BACKGROUND OF BOARD MANUAL ARRANGEMENT
I.3 PURPOSE AND OBJECTIVES
I.4 LEGAL REFERENCE OF BOARD MANUAL
I.5 GLOSSARYOF TERMS
CHAPTER II: BOARD OF COMMISSIONERS II.1 FUNCTIONS OF BOARD OF COMMISSIONERS
II.2 REQUIREMENTS OF BOARD OF COMMISSIONERS
II.2.1 Formal Requirements of the Board of Commissioners
II.2.2 Objective Requirements of the Board of Commissioners
II.2.3 Other Requirements of the Board of Commissioners
II.3 MEMBERSHIP OF THE BOARD OF COMMISSIONERS
II.3.1 Membership
II.3.2 Position
II.4 INDEPENDENT COMMISSIONERS
II.4.1 Criteria for Position of Independent Commissioners
II.4.2 Nominations Procedure of Independent Commissioners
II.5 INTRODUCTION PROGRAM AND CAPABILITY BUILDING
II.5.1 Introduction Program
II.5.2 Capability Building Program
II.6 ETHICS OF THE BOARD OF COMMISSIONERS
II.6.1 Ethics relating to exemplary
II.6.2 Ethics relating to the Compliance with Legislation
II.6.3 Ethics relating to the Company Opportunities and Personal Benefits
II.6.4 Ethics Relating to Transparency and Confidentiality of Information
II.6.5 Ethics Relating to the Conflict of Interest
II.6.6 Ethics of Business and Anti-Corruption
II.7 DUTIES AND OBLIGATIONS OF THE BOARD OF COMMISSIONERS
II.7.1 General Policy
II.7.2 In Relation to Shareholders/General Meeting of Shareholders
II.7.3 In Relation to the Company's Work Plan and Budget
II.7.4 In Relation to Nomination, Remuneration, and Human Resources
II.7.5 In Relation to the Performance Evaluation of Board of
Commissioners and Board of Directors
II.7.6 In Relation to Risk Management
II.7.7 In Relation to the Information Technology
II.7.8 In Relation to Mining Business and other Company’s Policies
II.7.9 In Relation to Ethics of Business and Anti Corruption
II.7.10 In Relation to the Internal Control System
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II.7.11 In Relation to Disclosure and Confidentiality of Information
II.7.12 In Relation to Reporting
II.7.13 In Relation to Other Tasks and Obligations
II.8 AUTHORITY OF THE BOARD OF COMMISSIONERS
II.9 RIGHTS OF BOARD OF COMMISSIONERS
II.10 MEETINGS OF THE BOARD OF COMMISSIONERS
II.10.1 General Policy
II.10.2 Meeting Procedures of the Board of Commissioners
II.10.3 Attendance Mechanism
II.10.4 Procedures of Problems Discussion and Decision-making
II.10.5 Making Minutes of Meeting of the Board of Commissioners
II.J.6 Procedures for Preparation of Minutes of Meeting of the Board of
Commissioners
II.11 EVALUATION OF THE BOARD OF COMMISSIONERS
II.11.1 General Policy
II.11.2 Performance Evaluation Criteria of Board of Commissioners
II.12 SUPPORTING ORGANS OF BOARD OF COMMISSIONERS
II.12.1 Committees of Board of Commissioners
II.12.1 Secretary of The Board of Commissioners
CHAPTER III: BOARD OF DIRECTORS III.1 FUNCTION OF BOARD DIRECTORS
III.2 REQUIREMENTS OF BOARD OF DIRECTORS
III.2.1 Formal requirements of the Board of Directors
III.2.2 The Objective Requirements for Members of the Board of Directors
III.2.3 Other requirements of the Board of Directors
III.3 MEMBERSHIP OF THE BOARD OF DIRECTORS
III.3.1 Membership
III.3.2 Position
III.4 INDEPENDENCE OF BOARD OF DIRECTORS
III.5 INTRODUCTION PROGRAM AND CAPABILITY BUILDING
III.5.1 Introduction Program
III.5.2 Capability Building Program
III.6 ETHICS OF THE BOARD OF DIRECTORS
III.6.1 Ethics Relating to exemplary
III.6.2 Ethics Relating to the Compliance with Legislation
III.6.3 Ethics Related to Disclosure and Confidentiality of Information
III.6.4 Ethics Related to Company Opportunities and Personal Benefits
III.6.5 Ethics Related to the Conflict of Interest
III.6.6 Ethics of Business and Anti Corruption
III.7 DUTIES AND OBLIGATIONS OF THE BOARD OF DIRECTORS
III.7.1 General Policy
III.7.2 In Relation to Shareholders/General Meeting of Shareholders
III.7.3 In Relation to Strategy and Work Plan
III.7.4 In Relation to Risk Management
III.7.5 In Relation to the Information Technology
III.7.6 In Relation to Mining Business and other Company’s Policies
III.7.7 In Relation to Human Resources
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III.7.8 In Relation to Ethics of Business and Anti Corruption
III.7.9 In Relation to the Internal Control System
III.7.10 In Relation to Disclosure and Confidentiality of Information
III.7.11 In Relation to Stakeholders
III.7.12 In Relation to Accounting and Bookkeeping System
III.7.13In Relation to Other Tasks and Obligations
III.8 AUTHORITY OF THE BOARD OF DIRECTORS
III.8.1 General Policy
III.8.2 Actions of the Board of Directors which require prior written
approval from the Board of Commissioners
III.8.3 Actions of the Board of Directors which require prior written
approval from the Board of Commissioners and approval from the GMS
III.8.4 The authority to carry out other actions
III.9 RIGHTS OF BOARD OF DIRECTORS
III.10 MEETINGS OF THE BOARD OF DIRECTORS
III.10.1General Policy
III.10.2Meeting Procedures of the Board of Directors
III.10.3Attendance Mechanism
III.10.4Procedures of Problems Discussion and Decision-making
III.10.5Making Minutes of Meeting of the Board of Directors
III.11 EVALUATION OF THE BOARD OF DIRECTORS
III.11.1General Policy
III.11.2Performance Evaluation Criteria of Board of Directors
III.12 SUPPORTING ORGANS OF BOARD OF DIRECTORS
III.12.1 Corporate Secretary
III.12.2 Internal Control Unit (ICU)
CHAPTER IV: THE ACTIVITIES AMONG THE ORGAN OF THE
COMPANY
IV.1 THE BASIC PRINCIPLES OF THE WORKING RELATIONSHIP
BETWEEN THE BOARD OF COMMISSIONERS AND THE BOARD OF
DIRECTORS
IV.2 JOINT MEETING OF THE BOARD OF DIRECTORS AND BOARD OF
COMMISSIONERS
IV.2.1 General Policy
IV.2.2 Meeting Procedures
IV.2.3 Attendance Mechanism and Legality of the Meeting
IV.2.4 Procedures of Problem Discussion and Decision Making
IV.2.5 Minutes of Meetings
ATTACHMENTS
Attachment I: THE STATEMENT OF ACTING INDEPENDENTLY
IN OPERATIONAL OVERSIGHT OF PT TIMAH
(PERSERO) TBK
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Attachment II: THE STATEMENT OF ACTING INDEPENDENTLY
IN MANAGEMENT OF PT TIMAH (PERSERO) TBK
Attachment III : ACTION PROCEDURES OF THE BOARD OF DIRECTORS
REQUIRING THE APPROVAL OF THE BOARD OF
COMMISSIONERS AND / OR AGM
Attachment IV: Procedure of Admission or Provision of Medium/Long Term
Loans
Attachment V: Company Binding Procedures As a Guarantor
Attachment VI: Procedures for Elimination of Accounts Receivable Loss or
Dead Inventory
Attachment VII: Business Cooperation Procedures
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CHAPTER I
INTRODUCTION
I.1 TWO-TIER BOARD SYSTEM
The management of the Limited Company in Indonesia refers to Law No. 40 of
2007 on Limited Liability Company. Based on that law, the management adopts a
dual board system (two-tier board), that is the separation of functions between the
Board of Commissioners that performs the function of monitoring and providing
advice to the Board of Directors and the Board of Directors that is authorized and
responsible for managing the company. The Board of Commissioners and the
Board of Directors perform their obligations in accordance with the mandate in
the Articles of Association and applicable laws (fiduciary responsibility).
The basic principles of working relations between Board of Commissioners and
Directors are openness and mutual respect that both have a responsibility to
maintain the company's business sustainability in the long term. Therefore, the
Board of Commissioners and Directors must have a common vision, mission,
values, and business strategy.
I.2 BACKGROUND OF BOARD MANUAL ARRANGEMENT
a. The compilation of Board Manual is an embodiment of the Company's
commitment to consistent implementation of Good Corporate Governance
(GCG) in order to manage the Company's mission and achieve the vision
that has been set.
b. The application of GCG in the Company is not only to meet the
legislation, but should be able to embody the principles of good corporate
governance, transparency, accountability, responsibility, independence and
fairness, in the Company's activities consistently.
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c. There is a clarity of function of Board of Commissioners and Board of
Directors in running the Company; therefore, the working relationship can
be more effective and productive so that the achievement of performance
can be realized.
I.3 PURPOSE AND OBJECTIVES
The Board of Commissioners and Board of Directors as a part of the Company’s
organs should be a good role model for every part in the Company. The
implementation of tasks and functions of this Company’s organ should be done
with good intention, full of responsibility, and high dedication for the sake of the
Company.
Board Manual contains a compilation of the principles of corporate law, the
applicable legislation, direction from shareholders and the Articles of Association
governing the working procedures of the Board of Commissioners and Board of
Directors. Board Manual is a codification of the various regulations applicable to
the company and of best practices as well as the principles of Good Corporate
Governance.
The objectives of Board Manual are as follow:
1. Provide guidance/guidelines to facilitate the Board of Commissioners and
Board of Directors in understanding the duties and responsibilities, rights
and obligations, as well as regulations related to the working procedures of
the Board of Commissioners and Directors;
2. Improve the efficiency and effectiveness as well as the quality of the
working relationship between the Board of Commissioners and Board of
Directors.
Board Manual is a living document that the development must always be carried
out in accordance with the needs of the Company and the legislation in force.
Changes on Board Manual should be based on the agreement between the Board
of Commissioners and Board of Directors.
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Considering that the Board Manual is a compilation of the principles of corporate
law, then the implementation should still refer to the legislation in force. The
various detailed provisions contained in Articles of Association, Shareholders’
Direction set forth in the General Meeting of Shareholders (GMS), and other legal
provisions still remain binding even if not specifically described in this Board
Manual.
The principle of good faith, full of responsibilities and fiduciary duties, skill and
care that are attached to the holders of the position of Commissioners and
Directors is a general principle that must be respected by the Company Organs
who oversee and manage the Company.
I.4 LEGAL REFERENCE OF BOARD MANUAL
a. Laws of the Republic of Indonesia, among which are:
1) Law of the Republic of Indonesia No. 4 Year 2009 concerning
Mineral and Coal Mining
2) Law of the Republic of Indonesia No. 11 Year 2008 concerning
Information and Electronic Transactions
3) Law of the Republic of Indonesia No. 14 Year 2008 concerning
Disclosure of Public Information
4) Law of the Republic of Indonesia No. 40 Year 2007 concerning
Limited Liability Company
5) Law of the Republic of Indonesia No. 19 Year 2003 concerning State-
Owned Enterprises
6) Law of the Republic of Indonesia No. 20 Year 2001 concerning the
amendment to Law No. 31 Year 1999 concerning the Eradication of
Criminal Acts of Corruption
7) Law of the Republic of Indonesia No 28 Year 1999 on the
Implementation of a Country that is Clean and Free from Corruption,
Collusion, and Nepotism
8) Law of the Republic of Indonesia No. 5 Year 1999 concerning the
Prohibition of Monopolistic Practices and Unfair Business
Competition
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9) Law of the Republic of Indonesia No 8 Year 1995 concerning the
Capital Market
b. Government Regulations, among them are:
1) Government Regulation Number 24 of 2012 on Amendment to
Government Regulation Number 23 of 2010 concerning the
Implementation of Mineral and Coal Mining Activities;
2) Government Regulation Number 12 of 1998 on the Company
(Persero) jo. Government Regulation Number 45 of 2001.
c. Regulation of the Minister of State-Owned Enterprises, among them are:
1) Regulation of the State Minister for State-Owned Enterprises Number:
PER-09/MBU/2014 about the Third Amendment on Regulation of the
Minister of State for State Owned Enterprises Number PER-
01/MBU/2012 about Requirements and Procedures for the
appointment and dismissal of member of Board of Directors of State-
Owned Enterprises;
2) Regulation of the State Minister for State-Owned Enterprises Number:
PER-15/MBU/2012 regarding Amendment of Regulation of the State
Minister for State-Owned Enterprises Number PER-05/MBU/2008
concerning Procurement of Goods and Services in State-Owned
Enterprises;
3) Regulation of the State Minister for State Owned Enterprises Number:
PER-12/MBU/2012 on Supporting Organ for Board Of
Commissioners/Supervisory Board of the State-Owned Enterprises;
4) Regulation of the State Minister for State-Owned Enterprises Number:
PER-09/MBU/2012 regarding Amendment Regulation of the State
Minister for State-Owned Enterprises No. PER-01/MBU/2011
regarding the Governance Good Company (GCG) in State-Owned
Enterprises;
5) Regulation of the State Minister for State-Owned Enterprises Number:
PER-07/MBU/2010 regarding Guidelines for Remuneration for
Directors, Board of Commissioners and Supervisory Board of State-
Owned Enterprises;
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6) Regulation of the State Minister for State-Owned Enterprises Number:
PER-04/MBU/2014 on Guidelines for Remuneration for Directors,
Board of Commissioners and Supervisory Board of State Owned
Enterprises;
7) Regulation of the State Minister for State-Owned Enterprises Number:
PER-02/MBU/2013 on Guidelines for Developing the Information
Technology Management of State-Owned Enterprises
d. Decrees of the Minister of State-Owned Enterprises, among which are:
1) Decree of the Minister of State-owned enterprises Number Kep-
104/MBU/2002 regarding the assessment of the members of Board of
Directors of State-Owned Enterprises;
2) Decree of the Minister of State-Owned Enterprises Number Kep-
103/MBU/2002 on the Establishment of the Audit Committee For
State-Owned Enterprises;
3) Decree of the Minister of State-Owned Enterprises Number Kep-
102/MBU/2002 about Drafting a Long-Term Plan (RJP);
4) Decree of the Minister of State-Owned Enterprises Number Kep-
101/MBU/2002 concerning the Preparation of the Company's Budget
Work Plan (RKAP);
5) Decree of the Minister of State-Owned Enterprises Number Kep-
100/MBU/2002 concerning the Assessment of the Level of Health of
State-Owned Enterprises
6) Decree of the Minister of State-Owned Enterprises Number Kep-
09A/MBU/2002 concerning the Assessment of the Appropriateness
and Propriety of the Members of the Board of Directors of State-
Owned Enterprises;
7) Regulation of the Minister of State-Owned Enterprises No. PER-
01/MBU/2011 dated 1 August 2011 about the Assignment of Good
Corporate Governance in State-Owned enterprises;
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8) Regulation of the Minister of State-owned Enterprises No. PER-
12/MBU/2013 date 24 August 2012 about Supporting Organs to Board
of Commissioners/Supervisory Board of State-owned enterprises;
e. Decree of the Secretary of the Ministry of State-Owned Enterprises
Number: SK/16/URS.MBU/2012 about Indicators/Parameters of
Assessment and Evaluation over the Implementation of Good Corporate
Governance in State-Owned Enterprises;
f. Regulation of the Financial Services Authority (OJK or “OJK”) formerly
BAPEPAM (Capital Market Supervisory Board) and LK (Financial
Institution), among others:
1) Regulation of BAPEPAM and LK Number VIII.G.7 concerning
Guideline for Financial Report of Issuers or Public Companies,
Attachment of Decision of Bapepam and LK Chairman Number
Kep-347/BL/2012 dated 25 June 2012;
2) Regulation of BAPEPAM and LK Number VIII.G.11 concerning
the Responsibility of the Board of Directors on the Financial
Statements, Attachment to the Decision of the Chairman of
BAPEPAM Number: Kep-40/PM/2003 dated 22 December 2003;
3) Regulation of BAPEPAM and LK Number IX.E.1 concerning
Affiliate Transaction and a Conflict of Interest of Certain
Transaction, attachment to Decision of Bapepam Chairman and LK
Number: Kep-412/BL/2009 dated 25 November 2009;
4) Regulation of BAPEPAM and LK Number IX.E.2 concerning
Material Transactions and Changes of Main Business Activities,
Attachment to the Decision of the Chairman of Bapepam and LK
Number: KEP-614/BL/2011 28 November 2011;
5) Regulation of BAPEPAM and LK Number IX.I.1 concerning Plans
and the Implementation of the General Meeting of Shareholders,
Attachment to the decision of the Chairman of Bapepam Number:
KEP-60/PM/1996 dated 17 January 1996;
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6) Regulation of BAPEPAM and LK Number IX.I.4 concerning the
Formation of the Corporate Secretary, attachment to the Decision
of the Chairman of Bapepam Number: Kep-63/PM/1996 dated 17
January 1996;
7) Regulation of BAPEPAM and LK Number IX.I.5 concerning the
Establishment and Working Implementation of Audit Committee
Guidelines, attachment to the Decision of Chairman of Bapepam
Number Kep-29/PM/2004 dated 24 September 2004;
8) Regulation of BAPEPAM and LK Number IX.I.6 concerning the
Board of Directors and Board of Commissioners of Issuers and
Public Company, attachment to the Decision of Chairman of
Bapepam Number Kep-45/PM/2004 dated 29 November 2004;
9) Regulation of Bapepam and LK Number IX.I.7 concerning the
Establishment and Guidelines for Internal Audit Charter,
attachment to the Decision of the Chairman of Bapepam Number:
Kep-496/BL/2008 dated 28 November 2008;
10) Regulation of Bapepam and LK Number IX.J.1 concerning the
Fine points of the Company's Articles of Association that do Share
Public Offering which is Equity and Changes in public, attachment
to the Decision of Chairman of Bapepam and LK Number: Kep-
179/BL/2008 dated 14 May 2008;
11) Regulation of Bapepam and LK No. X.K.2 concerning The
Obligation to Submit Periodic Financial Statements, attachment
Decision to the Chairman of Bapepam Number: Kep-36/PM/2003
dated 30 September 2003;
12) Regulation of Bapepam and LK No. X.K.4 concerning Reports on
Finance Utilization from Public Offering, attachment to the
Decision of the Chairman of Bapepam Number: Kep-27/PM/2003
dated 17 July 2003;
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13) Regulation of Bapepam and LK No. X.K.7 concerning the Term of
Submit of Periodical Financial Statements and Annual Report for
the Issuer or Public Company whose securities are Listed in
Indonesia Stock Exchange and Stock Exchange in Other Countries,
attachment to the Chairman of Bapepam Number: Kep-40/BL/
2007 dated 30 March 2007;
14) Regulation of Bapepam and LK No. X.K.6 concerning the
Obligation to Submit Annual Report for the Issuer or Public
Companies, attachment to Decision of Chairman of Bapepam No.
Kep-431/BL/2012 dated 1 August 2012;
15) Regulation of Bapepam and LK No. X.M.1 concerning the
Disclosure of Certain Shareholders, attachment Decision of
Chairman of Bapepam Number: Kep-82/PM/1996 dated 17
January 1996.
g. Capital Market Regulations by Indonesia Stock Exchange Board of
Directors Decision No. Kep-00001/BEI/01-2014 on Amendment No. I-A
of the Registration of Shares and Equity Securities other than Shares
issued by Listed Company dated January 20, 2014;
h. The General Code of Indonesia Good Corporate Governance issued by the
National Committee on Governance Policy in 2006;
i. The Code for Independent Commissioner by Task Force of the National
Committee on Governance Policy;
j. Statutes of PT Timah (Persero) Tbk as has been modified several times
and last by Notary Act of Change No. 75 dated 26 June 2014, made by
Notary Fathiah Helmi Bachelor of Law and has been authorized by
Minister of Law and Human Rights No. AHU-0064462.40.80.2014;
k. The Code of Corporate Governance of PT Timah (Persero) Tbk, which has
been signed by the President Commissioner and the President Director on
December 28, 2012.
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I.5 GLOSSARY OF TERMS
The terms used in this Board manual, unless otherwise stated, contain the
following definitions:
a. The Company with the capital P is PT TIMAH (Persero) Tbk., while
companies with a small letter p refers to companies in general.
b. The Company’s Organ is the General Meeting of Shareholders, the Board
of Commissioners and Board of Directors.
c. General Meeting of Shareholders (GMS) is the Company's Organ that has
authority not granted to the Board of Commissioners and Board of
Directors in accordance with the legislation in force and the Articles of
Association of Company.
d. Board of Commissioners (BOC) is the organ of the Company which
covers the entire Board of Commissioners as a whole council (Board) in
charge of general and/or special supervision as well as providing advice to
the Board of Directors in accordance with the Articles of Association and
legislation in force.
e. Member of the BOC is a member of the Board of Commissioners which
refers to individuals (not as a Board).
f. Independent Commissioner is a member of the Board of Commissioners
who is not affiliated with the Board of Directors, members of the Board of
Commissioners and Shareholders of controllers, as well as free from the
business relationship or other relationship which could affect its ability to
act independently or act solely in the interest of the Company.
g. Secretary to the Board of Commissioners is a secretary appointed by the
Board of Commissioners to be in charge of running the administrative
tasks and secretariat pertaining to all activities of the Board of
Commissioners.
h. Audit Committee is a committee that is working professionally and
independently that is established by the Board of Commissioners to help
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and strengthen the function of the Board of Commissioners in performing
the oversight function over the financial reporting process, the audit
process, implementation of internal control, the implementation of Good
Corporate Governance as well as carry out the special assignment from the
Board of Commissioners.
i. Supporting Committee of the Board of Commissioners is a committee that
can be formed by and responsible to the Board of Commissioners in
monitoring the framework of the tasks and functions of the Board of
Commissioners to conduct coaching and supervision over the management
of the Company outside the Audit Committee's tasks, such as, among
others:
1. Monitor, evaluate (oversight) and ensure the systems and
procedures for the nomination and remuneration of the Board of
Directors and the Board of Commissioners and provide
recommendations for selecting and determining the number of
members of the Board of Commissioners and Board of Directors;
2. Monitor, evaluate (oversight) and ensure that systems and
procedures are in good management and development of human
resources, Risk Factors, Good Corporate Governance (GCG) and
Mine Closure according to the regulations.
j. Board of Directors is the organ of the Company which covers the entire
members of Board of Directors as a whole Board that is authorized and
fully responsible for the management of the Company for the benefit of
the Company, in accordance with the purposes and objectives of the
Company and representing the Company, both in and out of court in
accordance with the provisions of the Statutes and applicable regulations.
k. Member of Board of Directors is a member of the Board of Directors
refers to the individual (not as the Board).
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l. External auditor is an auditor from outside the Company that is
independent and professional providing audit and non-audit services to the
Company.
m. Internal Auditor is an Internal Supervisory Unit that is a structural
technical unit within the Company in charge of carrying out audits and
ensuring the Company's internal control system to be effective.
n. Corporate Secretary is a structural function unit within the Company
assigned to provide support to Directors in the execution of their duties
and act as a liaison between the shareholders, the Board of
Commissioners, Board of Directors, Work Unit and Stakeholders.
o. Board of Directors and Management are structural officers in accordance
with the organizational structure of which the function is to run the
activities in accordance with the limits-specified authority.
p. Employees are the employee of PT TIMAH (Persero) Tbk., that is every
person who is formally bound in an employment relationship with the
Company as a permanent employee or as an employee with Specific Time
Work Agreement (PKWT) in accordance with Legislation regulation in
force, from the lowest position to the highest, that is 1 (one) level below
the Board of Directors.
q. Stakeholders are parties that are related to the Company because they have
a legal relationship with the Company, they are Employees, Government,
Customers, Creditors, Investors, Communities, and other certain related
parties.
r. Conflict of interest is the conflict between the economic interests of the
Company and individual economic interests of members of the Board of
Directors, member of the Board of Commissioners, or major shareholders
that could harm the Company.1
1 General Code of GCG KNKG of 2006
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s. Material transaction is any transaction with a value below 20% (twenty
percent) or more of the Company's Equity, which is done within 1 (one) or
a series of transactions for a particular purpose or activities that include:2
1. Investments in enterprises, projects, and/or certain business
activities;
2. The purchase, sale, transfer, and exchange on business segments or
asset;
3. Rent-leasing the asset;
4. Lending and borrowing of funds;
5. Guarantee the assets; and/or
6. Giving the Company’s guarantees
t. The Company's equity is the value of net wealth (assets minus the value of
all financial liabilities) of the Company, calculated based on the latest
financial statements/current as follows:
1. The audited annual financial statements;
2. The semi-annual financial statements are accompanied by the
accountant's report in the context of a limited review for the minimum to
the account acuity; or
3. The audited interim financial statements in addition to semi-annual
interim financial statements, in which case the Company has interim
financial statements.
u. Mining business is the activity for the exploitation of mineral or coal
which covers the general investigation, exploration, feasibility studies,
construction, mining, processing and refining, transportation and sales, and
post-mining.
2 Regulation of BAPEPAM and LK Number IX.E.2 concerning the Material Transaction and the
Change of Main Business Activity Number 1 article a point 2
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v. Reclamation is the activity carried out throughout the stages of mining
business to restructure, recover, and improve the quality of environment
and ecosystems to function again in accordance with its designation.
w. Post-mining activities, hereinafter referred to as Post-Mining is an planned
activity, systematic, and continual after the end part or all mining activities
to restore the function of the natural environment and the social function
of local conditions in the entire mining area.
x. Day referred to in this document is calendar days not an effective business
day.
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CHAPTER II
BOARD OF COMMISSIONERS
II.1 FUNCTIONS OF BOARD OF COMMISSIONERS
The Board of Commissioners (BOC) is one of the organs of the Company
which serves to conduct general and/or specified supervisory in accordance with
the Articles of Association as well as provide advice to the Board in carrying out
the Company's management3. The Board also has the task of monitoring the
effectiveness of Good Corporate Governance practices that is applied by the
Company.4
The Oversight Function of Board of Commissioners consists of two (2)
levels, they are:
1. Performance Level, which is the function of the BOC to supervise by
providing guidance and instruction to the Board of Directors and
provide input to the General Meeting of Shareholders;
2. Conformance level, that is in the form of monitoring activities at a
later stage to ensure that advice has been run as well as the fulfillment
of the provisions of the applicable legislation and the Articles of
Association.
The Supervisory of Board of Commissioners:
1. Supervision shall be conducted by the Board of Commissioners on the
management policy, the general management of the Company, either
3 Law No. 40 of 2007 concerning the Limited Liabilities Company Article 1 Paragraph (6)
4 Regulation of the Minister of State-Owned Enterprises Number PER-09/MBU/2012 concerning
Amendment to the Regulation of the Minister of State-Owned Enterprises Number PER-
01/MBU/2011 concerning Implementation of Good Corporate Governance (GCG) in State-Owned
Enterprise Article 12 paragraph (7)
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concerning the Company or business of the Company and give advise to
the Board of Directors;5
2. In conducting supervision, the Board of Commissioners acts as a council
or assembly and can not act individually but on the basis of the Board of
Commissioners' decision;6
3. Supervision should not be turned into executive duties which are the
authority of the board of Directors;
4. Supervision shall be exercised to the decisions that have been made (ex
post facto) and/or to the decisions to be taken in the event of an indication
of a conflict of interest (preventive basis);
5. Supervision is carried out not only by receiving information from the
Board of Directors/GMS, but can also be done by taking other appropriate
actions of information from other sources, in which the action should be
done collectively;
6. Supervision is carried out not only with simply approve or not approve
against actions that require approval by the Board of Commissioners, but
the oversight done by covering all aspects of business and corporate
aspects of the company.
II.2 REQUIREMENTS OF BOARD OF COMMISSIONERS
The requirements that must be met to become a member of the Board of
Commissioners consists of formal requirements, objective and other requirements
that are tailored to the needs and nature of the business of the Company as a State-
owned enterprises (SOEs) engaged in the mining sector.
II.2.1 Formal Requirements of the Board of Commissioners:
5 Law No. 40 of 2007 concerning the Limited Liabilities Company Article 108 Paragraph (1)
6 Law No. 40 of 2007 concerning the Limited Liabilities Company Article 108 Paragraph (4)
23
Member of the Board of Commissioners must meet the formal requirements, as
follows:
a. Able to carry out the Act law, and;
b. Never declared bankrupt or become a member of the Board of Directors or
the Board of Commissioners that is convicted, led a company to a
bankruptcy, or had been convicted of committing a criminal act that is
detrimental to the country's financial and/or related to the financial sector
in a period of 5 (five) years before his appointment.
II.2.2 The Objective Requirements of the Board of Commissioners
Member of the Board of Commissioners must meet the objective requirements as
follows:
a. Integrity and morals, that never involved:
1. Engineering deeds and practices that diverge in the management of
State-Owned Enterprises/Companies/Institutions of work before
nomination;
2. The deed of injured promise and deed that can be categorized
giving advantage against private law to the members of the Board
of Commissioners, officers of the Company as well as acts that can
be categorized as a breach to the provisions with regard to the
principles of maintaining a healthy company.
b. Technical competencies/skills, Member of the Board of Commissioners
has:
1. Adequate knowledge in the field of business of the Company;
2. The ability to perform the function of supervision and giving
advice and can work as a team;
3. Understanding the company's management problems.
24
c. Psychologically, a member of the Board of Commissioners has the
intelligence level of intellectual, emotional and spiritual that are adequate
to carry out his duties as a member of the Board of Commissioners of the
company.
II.2.3 Other Requirements of the Board of Commissioners, are as follow:
a. Understand the legislation in the field of Limited Company, the
Company’s Core Business and other appropriate business scope of the
Company;
b. Not being a board member of political parties, and/or legislative candidate,
and/or legislative members
c. Not being a candidate/vice of a regional head and/or a head/vice of a
regional head;
d. Not being in a position that according to the legislation is banned for being
coupled with the office of the members of the Board of Commissioners;
e. Not being in the service as a member of the Board of Commissioners of
the Company for 2 (two) consecutive periods;
f. Have a dedication and provide full time to do the task;
g. Physically and spiritually healthy (not being under an illness that may
inhibit the implementation of the task as a member of the Board of
Commissioners);
h. Between the members of the Board of Commissioners and between
members of the Board of Commissioners and Directors there shall not be a
blood family relationship to the third degree, both according to the straight
line and the side line including relations that arise because of marriage;7
i. For Independent Commissioners, in addition to the qualification above,
there also applies the independency conditions set by the Ministry of State
7 The Articles of Association of PT TIMAH (Persero) Tbk Article 20 Paragraph 13
25
Owned Enterprises and by the Capital Market Supervisory Body and
Financial Services Authority that will be discussed further on the part of
the Independent Commissioner letter II.D.
II.3 MEMBERSHIP OF THE BOARD OF COMMISSIONERS
II.3.1 Membership
a. The Board of Commissioners shall consist of at least 3 (three) members of
the amount specified by the GMS8, with the number of members of the
Board of Commissioners maximally the same with the number of
members of the Board of Directors;9
b. In the composition of the Board of Commissioners, at least 30% (thirty per
hundred) is a member of the Board of Independent Commissioners10
specified in the decision of the nomination;
c. Member of the Board of Commissioners which is derived from the former
member of the Board of Directors must not serve as a member of the
Board of Directors of the Company concerned at least 1 (one) year;11
d. The members of the Board of Commissioners shall be elected by the
GMS, from the candidate proposed by the Shareholders of Seri A
Dwiwarna after being through the nomination process in accordance with
the regulation and the nomination is binding for the GMS;12
e. The Members of the board of commissioners shall be elected and
dismissed by the GMS, should which the GMS be attended by
8 Articles of Association of PT TIMAH (Persero) Tbk Article 20 Paragraph 1
9Decree of the Secretary of the Ministry of State-Owned Enterprises Number: SK-16/S.MBU/2012
about the Indicator/Parameter and Assessment Evaluation of the implementation of Good
Corporate Governance on State-Owned Enterprises, Indicator 8 Parameter 24 Criteria 3a 10
Regulation of the Capital Market Number i-A about the Recording of Stocks and Equity
Securities other than Shares issued by the Registered Company Roman III Points III.I.4 11
Decree of the Secretary of the Ministry of State-Owned Enterprises Number: SK-
16/S.MBU/2012 about the Indicator/Parameter and Assessment Evaluation of the implementation
of Good Corporate Governance on State-Owned Enterprises, Indicator 8 Parameter 24 Criteria 3c 12
The Articles of Association of PT TIMAH (Persero) Tbk Article 20 Paragraph 8
26
Shareholders of Series A Dwiwarna and the decision of the meeting must
be approved by the Shareholders of Series A Dwiwarna;
f. The individual nominated as a candidate for members of the Board of
Commissioners shall undergo the evaluation process of fit and proper test
by or at the request of the Shareholders;
g. The potential members of the Board of Commissioners that have been
undergoing the fit and proper test and selected to be proposed by
Shareholders will be assigned and appointed by the GMS and the
nomination is binding to the GMS;
h. If due to any reason the position of one or more members of the Board of
Commissioners is vacant or the Company has no one as a member of the
Board of Commissioners, at least within 60 (sixty) days since the vacancy,
a GMS shall be held to fulfill the vacancy. During the term is unfilled and
the successor is not present or has not yet taken office, then one of the
members of the Board of Commissioners shall run the work of the
members of the Board of Commissioners with the same power and
authority.
II.3.2 Position
a. The term of office of the members of the Board of Commissioners is for a
period of 5 (five) years counted from the date specified by the
Shareholders who assigned him (them) and ended at the close of the 5
GMS (fifth) after his inauguration date (them), with not reducing the rights
of Shareholders to dismiss the members of the Board of Commissioners
during the time before his term of office ended by mentioning the reason,
among others if the members of the Board of Commissioners are not able
to carry out their task well, do not implement legislation and/or the terms
of the Articles of Association, involved in actions that is detrimental to the
Company and/or the Country due to the negligence or error of the related
27
members of the Board of Commissioners, declared guilty by the court with
permanent legal force, and/or resign.13
b. The term of the members of the Board of Commissioners ends due to the
following:14
1. Resignation,
2. Demise
3. Expiry of term of office.
4. Dismissal based on GMS decision.
5. Being no longer eligible as a member of the Board of Commissioners
based on the applicable legislation.
c. In the case of resignation of members of the Board of Commissioners:
1. Members of the Board of Commissioners who resign from his position
is still obligated to inform in writing concerning his resignation to the
Company by no later than sixty days with a copy to the Board of
Commissioners, Directors and Shareholders who propose appointing
members of the Board of Commissioners concerned;15
2. Within sixty days after the receipt of the resignation letter, an
Extraordinary GMS must be held to specify the resignation, but when
the company does not hold Extraodinary General Meeting of
Shareholders within a period of sixty days and the resignation of the
members of the Board of Commissioners has become valid without
requiring the approval of the GMS;16
13
Articles of Association of PT TIMAH (Persero) Tbk Article 20 Paragraph 9 14 Articles of Association of PT TIMAH (Persero) Tbk Article 20 Paragraph 19 15
Articles of Association of PT TIMAH (Persero) Tbk Article 20 Paragraph 19 letter a 16
Articles of Association of PT TIMAH (Persero) Tbk Article 20 Paragraph 18 letter b and c
28
3. Member of Board of commissioner who resigned can still be asked for
accountability since the assignment until his effective date of
resignation.17
d. One or more members of the Board of Commissioners can be discharged
for temporary by Shareholders if the members of the Board of
Commissioners is acting contrary to the Articles of Association or there
are indications that are detrimental to the company or neglect its
obligations or there are urgent reasons for the Company with the terms as
follows:
1. Temporary dismissal must be informed in written to the person
concerned with the reason;
2. Within a period of sixty days after the temporary dismissal, an
Extraordinary GMS must be held to decide whether the members of
the Board of Commissioners will be discharged permanently or
returned to the original position;
3. Member of the Board of Commissioners which is temporarily
dismissed is given the opportunity to present and defend themselves;
4. If Extraordinary GMS is not held within sixty days after the temporary
dismissal, the dismissal is legally void.
e. The GMS can appoint others to fill the office of the members of the Board
of Commissioners which is discharged from his position and the GMS can
appoint a person as a member of the Board of Commissioners to chair the
empty office of the members of the Board of Commissioners. The term of
office of a person who is appointed to replace the discharged member of
the Board of Commissioners or to chair the empty positions is the
remaining term of the replaced members of the Board of Commissioners;
17
Law Number 19 of 2003 concerning State-Owned Enterprises Article 28 Paragraph (6)
29
f. The appointment of members of the Board of Commissioners shall not be
concurrent with the appointment of members of the Board of Directors,
except the appointment is for the first time of establishment.18
g. In the case of an addition of a member of the Board of Commissioners, the
term of office of the new Board of Commissioners shall be 5 (five) years.
II.4 INDEPENDENT COMMISSIONERS
The composition of the Board of Commissioners of the Company must be in such
a way that it enables effective, timely, and prompt decision-making. In addition,
the Board of Commissioners shall carry out its duties and responsibilities
independently, in the sense of being able to perform its duties objectively and
freely from the pressures and interests of any party, including in relation to each
other or the relationship to the Board of Directors. The number of Independent
Commissioners shall be at least 30% (thirty per hundred) of the members of the
Board of Commissioners (adjusted to the Company's complexity and the
resolutions of the GMS).
II.4.1 Criteria for Position of Independent Commissioners:
In addition to the requirements of the Board of Commissioners as outlined in the
letter II.2, to be appointed as an Independent Commissioners must meet the
following criteria:
a. Does not own shares either directly or indirectly to the Company;19
b. Has no affiliation with the Company, Board of Commissioners, Directors
or major Shareholders;20
18
Law Number 19 of 2003 concerning State-Owned Enterprises Article 28 Paragraph (6) 19
Regulation of Bapepam IX.I.5 concerning the Establishment and Implementation Guidance of
the Audit Committee number 1 letter b point 2 20
Regulation of Bapepam IX.I.5 concerning the Establishment and Implementation Guidance of
the Audit Committee number 1 letter b point 3
30
c. Does not take office as a member of the Board of Directors in a company
affiliated with PT TIMAH (Persero) Tbk.;
d. Does not work on the Government including the Ministry, non-ministry
and military officials and the police;
e. Does not take an executive position or have a business relationship with
the corresponding companies and other companies affiliated in a period of
3 years;21
f. Does not become the supplier and significant customer or occupy the
executive position and the Board of Commissioners of the supplier
company and significant customer of the corresponding company or other
companies affiliated;
g. Not a professional counselor/expert of the company or other companies of
the industry group with the Company;
h. Does not have financial ties, either directly or indirectly with the Company
or other companies that provide products or services to the company;
i. Does not have a contractual relationship with the Company as a former
member of the Board of Directors and a former member of the Board of
Commissioners as well as a former employee of the Company in a specific
period of time;
j. Free from the interests and business activity or other relationship that can
prevent or interfere the ability to think and/or act independently;
k. Understand the details of the business management and company financial
as well as able to read the financial reports.22
II.4.2 Nominations Procedure of Independent Commissioners
21
Guideline for Independent Commissioner by Task Force of National Committee of Governance
Policy 22
Guideline for Independent Commissioner by Task Force of National Committee of Governance
Policy
31
a. Board of Commissioners and/or Committees under the Board of
Commissioners (through the Board of Commissioners) may submit
proposed names as candidates for Independent Commissioners to the
GMS;
b. In the nomination of Independent Commissioners, it is important that the
opinion of the Minority Shareholders be considered, among others, in the
form of Minority Shareholders' right to nominate candidates for
Independent Commissioners as a form of protection against the interests of
the Minority Shareholders and other Stakeholders;
c. The nominating mechanism can be done by announcing in the mass media
complete with the agenda at the time of the announcement of the GMS;
d. Prospective candidates must be more than 1 (one) person;
e. The nominated candidate must pass the fit and proper test conducted by
the Shareholder.
II.5 INTRODUCTION PROGRAM AND CAPABILITY BUILDING
II.5.1 Introduction Program
With the background of members of the Board of Commissioners who come from
several parties representing Shareholders, the Introduction Program is then very
important to be held. This is done so that members of the Board of
Commissioners can get to know each other and work together as a solid,
comprehensive and effective team. The conditions on the Introduction Programs
include the following:
a. For newly appointed members of the Board of Commissioners, an
Introduction Program is required regarding the conditions of the Company
in general;
32
b. The person responsible for this Introduction Program is the Corporate
Secretary or anyone who performs the functions as Corporate Secretary;23
c. Introduction Program includes:
1. Implementation of Good Corporate Governance principles in the
Company;
2. A description of the duties and responsibilities of the Board of
Commissioners and the Board of Directors according to the
applicable law;
3. The description of the Company relating to the objectives, nature,
and scope of activities, financial and operating performance,
strategy, short-term and long-term business plan, competitive
position, risk, internal control and other strategic issues;
4. Information relating to delegated authority, internal and external
audits, internal control systems and policies and the Audit
Committee;
5. A description of the obligations, duties, responsibilities and rights
of the Board of Directors and Board of Commissioners;
6. Understanding of the ethical and normative principles prevailing
within the Company and the local community;
7. Team Building. In this activity includes the Board of Directors,
either new or formerly appointed.
d. The Introduction Programs can be in the forms of presentations, meetings,
visits to Company facilities, visits to the mine or mining processing sites,
review of the Company’s documents or other programs deemed
appropriate to the needs.
23
Regulation of the Minister of State-Owned Enterprises Number: PER-09/MBU/2012 concerning
the Amendment to the Regulation of the Minister of State-Owned Enterprises No. PER-
01/MBU/2011 on the Implementation of Good Corporate Governance (GCG) on State-Owned
Enterprise Article 43 Paragraph 2
33
II.5.2 Capability Building Program
The capability building is deemed important for the Board of Commissioners to
keep up-to-date on the latest developments of the Company's business and the
prevailing laws and regulations.
The provisions on the Capability Building Program for the Board of
Commissioners are as follows:
a. The Capability Building Program is held in order to improve the working
effectiveness of the Board of Commissioners
b. The plan to hold the Capability Building Program should be included in
the Board of Commissioners' Work Plan and Budget;
c. Every member of the Board of Commissioners participating in a
Capability Building Program like a seminar and/or training is required to
share information and knowledge with other members of the Board of
Commissioners;
d. The member of the Board of Commissioners concerned is responsible for
reporting on the event of the Capability Building Program. The report is
submitted to the Board of Commissioners.
The Capability Building Program includes:
a. Knowledge related to the principles of corporate law and the updating of
legislation relating to the Company's business activities, as well as the
internal control system;
b. Knowledge related to strategic management and its formulation;
c. Knowledge related to risk management;
d. Knowledge related to quality financial reporting.
II.6 ETHICS OF THE BOARD OF COMMISSIONERS
II.6.1 Ethics relating to exemplary
34
1. The Board of Commissioners should encourage the creation of ethical
behavior and uphold the highest standards in the Company, so that the
Board of Commissioners becomes a good example for Directors and
Company Employees;
2. The Board of Commissioners must meet the requirements of ability and
integrity so that the implementation of supervisory and advisory functions
for the interests of the Company can be properly implemented;24
3. Carrying out duties in a trustworthy, dedicated manner, upholding honesty
as a high value, that is honest in expressing his opinion, both orally and in
writing, and honest in attitude and action;
4. Tolerance in attitudes and actions, polite in expressing opinions, both
orally or in writing;
5. Respect Shareholders' and/or GSM resolutions;
6. Have an orientation to add value to the Company;
7. Continually enhance its knowledge and understanding of issues relating to
supervision and advice to the Directors in the management of the
Company;
8. To take an attitude, to express an opinion, and to take an action in private,
which must be clearly and expressly stated that his or her attitude, opinion
or actions are personal;
9. To take attitudes, opinions and actions based on objectivity, professional
and independent elements in the interest of the Company in proportion to
the interests of the Stakeholders;
10. In carrying out its duties and obligations, put the interests of the Board of
Commissioners in its entirety above personal interests.
24
General Guidelines for GCG KNKG of 2006 KNKG Chapter IV Board of Commissioners
Section
35
II.6.2 Ethics relating to the Compliance with Legislation
The Board of Commissioners is required to comply with the applicable laws and
regulations, the Articles of Association and the Code of Corporate Governance as
well as the Company's policies.
II.6.3 Ethics relating to the Company Opportunities and Personal Benefits
During their term of office, the Board of Commissioners is not allowed to:
1. Take the Company's business opportunity for its own benefit, their family,
their business group and/or other parties;
2. Take personal advantage from the Company's activities, other than the
salary and facilities they receive as a Member of the Board of
Commissioners of the Company, as determined by the GMS;25
3. Use the Company's assets, the Company's information or their positions as
a Member of the Board of Commissioners for the personal interest or
others, which is contrary to applicable laws and regulations and the
Company's policies.
II.6.4 Ethics Relating to Transparency and Confidentiality of Information
The Board of Commissioners must disclose information in accordance with
applicable laws and regulations and always keep the confidentiality of
confidential Company’s information entrusted to them in accordance with
applicable laws and Company’s policies.
II.6.5 Ethics Relating to the Conflict of Interest
A conflict of interest is a condition in which the interests of the Board of
Commissioners are in conflict with the interest of the Company to achieve profit,
25
Law Number 19 of 2003 concerning State-Owned Enterprises Article 7
36
increase the value, achieve the vision and carry out the mission and direction of
the GMS, which will ultimately harm the Company. On the basis of such matter,
the Members of the Board of Commissioners shall always:
1. Avoidance of conflict of interest;
2. Fill in the Special Register containing ownership of shares and/or
ownership of shares by their family to the Company and other companies,
including without ownership of shares, and periodically at the end of each
year update and shall notify the Company in the event of any change of
data, according to the prevailing laws and regulations;26
3. Guided not to take advantage of position for personal interest or for the
interest of other person or party that is against the interest of the Company;
4. The Board of Commissioners is prohibited from having multiple positions
at the same time as the Board of Directors or Board of Commissioners at
other companies in the same relevant market, having a close relationship
in the field and/or type of business and simultaneously able to control the
market share of certain goods and/or services which may result in
monopolistic practices and/or unfair business competition;27
5. The members of the Board of Commissioners shall not hold dual position
of:28
a. Members of the Board of Directors of State-Owned Enterprises,
Regional-Owned Enterprises and Private-Owned Enterprises
b. Other positions in accordance with the provisions of legislation, the
management of political parties and/or candidates/legislators;
and/or
c. Other positions that may cause a conflict of interest.
26
Law No. 40 of 2007 concerning the Limited Liabilities Company Article 116 letter b 27 Law No. 5 of 1999 concerning Prohibition of Monopolistic Practices and Unfair Business
Competition Article 26 28
The Articles of Association of PT TIMAH (Persero) Tbk Article 20 Paragraph 22
37
6. Members of the Board of Commissioners whose dual positions are
prohibited as referred to in item 5 shall withdraw from one of these
positions no later than 30 days from the date of the dual positions;29
7. Avoid any activity that may affect their independence in performing the
task;
8. Conduct disclosure in the event of a conflict of interest, and the Member
of the Board of Commissioners concerned shall not involve themselves in
the Company's decision-making process in connection therewith;
9. Not responding to requests from any party and for any reason, whether
requests directly from certain parties including and not limited to
officials/officials within Government agencies and political parties relating
to the request for donations, including those relating to the procurement of
goods and services at the company;
10. Comply with applicable laws and regulations, including by not engaging
in insider trading for personal gain.
II.6.6 Ethics of Business and Anti Corruption
1. Members of the Board of Commissioners do not accept, give or offer
directly or indirectly anything of value to and/or from Customers or
Government Officials to influence or in return for what they have done
and other actions in accordance with applicable laws and regulations;30
2. The members of the Board of Commissioners do not accept either direct or
indirect, rewards and/or gifts, and/or grants and/or donations and/or
entertainment of any kind from any party outside the Board of
Commissioners, for what they have done in relation to the functions and
29 Decision of Secretary of the Ministry of State-Owned Enterprises No. SK-16/S.MBU/2012 on
Indicator/Parameter of Assessment and Evaluation of Good Corporate Governance
Implementation on State-Owned Enterprise, Indicator 7 Parameter 19 Criterion 2 30
Regulation of the Minister of State-Owned Enterprises Number: PER-09/MBU/2012 concerning
Amendment to the Regulation of the Minister of State-Owned Enterprises No. PER-01/MBU/2011
on the Implementation of Good Corporate Governance (GCG) on State-Owned Enterprise Article
40 Paragraph 1
38
duties of the Board of Commissioners or in their capacity as a Member of
the Board of Commissioners;
3. Rewards, gifts, grants and donations in letters (b) are excluding
honorariums, transportation money, travel and lodging expenses or
souvenirs that are granted to members of the Board of Commissioners;
Further regulation on the ethics of the Board of Commissioners will be set forth in
the Code of Conduct which is an inseparable document of this Board Manual.
II.7 DUTIES AND OBLIGATIONS OF THE BOARD OF
COMMISSIONERS
II.7.1 General Policy
1. The basic principles for the implementation of supervisory and
advisory tasks to the Board of Directors by the Board of
Commissioners include:
a) The composition of the Board of Commissioners shall enable
effective, timely, and prompt decision making, and may act
independently;
b) Members of the Board of Commissioners shall be professionals,
having integrity and capacity to perform their functions properly
including ensuring that the Board of Directors has taken into
account the interests of all stakeholders;
c) The functions of supervision and advice given to the Board of
Directors include precautionary measures, remedies, and
temporary dismissals.
2. Implementation of supervision and giving advice to the Board of
Directors by the Board of Commissioners, among others, is done by:
a. Requesting a written statement to the Board of Directors
regarding a problem that occurred;
39
b. Providing opinions or directives in meetings of the Board of
Commissioners with the Board of Directors or other meetings
attended by the Board of Commissioners;
c. Visits to Divisions/Bureaus/Branches/Units and Learning
Centers, in order to ensure the Company's operational
operations such as human resources (HR), operations,
finance, and others work effectively. In the event that the
Board of Commissioners will conduct a working visit to the
Division/Bureau/Branch Office/Unit and Learning Center,
the procedures to be performed are as follows:
1) The Board of Commissioners submits the plan of
working visit in writing to the Board of Directors by
stating the purpose and purpose, location and time of
working visit to be conducted;
2) The Board of Directors prepares for such work visit,
including providing necessary facilities in accordance
with the provisions on the official travel of the Board
of Commissioners;
3) In the case of a working visit conducted jointly with
the Board of Directors, the above procedure is not
required.
d. Respond to periodic reports submitted by the Board of
Directors.
In relation to the implementation of the supervisory and advisory
function to the Board of Directors, the Board of Commissioners
has the duty and/or obligation to:
a. Subject to the provisions of applicable laws and regulations,
the Company's Articles of Association, and decisions of the
GMS;
40
b. In good faith and responsibly performing duties for the
Company's interests and business;
c. Supervise the interest of the company by taking into account
the interests of shareholders and being responsible to the
GMS;
d. Conduct supervisory duties on the Board of Directors'
policies in executing the Company's management including
the implementation of the Company's Long Term Plan
(RJPP), the Company's Work Plan and Budget (RKAP), the
Articles of Association and the resolutions of the General
Meeting of Shareholders and the prevailing laws and
regulations for the Company's interests with the aims and
objectives of the Company;31
e. Provide opinions and suggestions to the Board of Directors in
relation to the management of the Company;
f. Provide opinions and suggestions to the Board of Directors in
relation to the preparation of the vision, mission and other
strategic plans stipulated in the Articles of Association;
g. Monitor the process of transparency and communication
effectiveness within the Company;
h. Follow the development of the Company's activities, either
from internal information provided by the Company or from
external information that is of the media or other sources;
i. Where deemed necessary, may attend work/coordination
meetings with the Board of Directors and all its staff;
j. Make efforts to ensure that the Board of Directors and its
staff comply with the legislation and other regulations in
31
The Articles of Association of PT TIMAH (Persero) Tbk Article 21 Paragraph 6
41
managing the Company including all agreements and
commitments made by the Company with the third parties;
k. Implement Good Corporate Governance consistently;
l. Monitor the effectiveness of GCG practices, among others,
by holding regular meetings between the Board of
Commissioners and the Board of Directors to discuss the
implementation of Good Corporate Governance in the
Company;
m. Make a Report of the Board of Commissioners and keep
copies thereof;32
n. Report to the Company concerning the ownership of their
shares and/or their family to the Company and other
companies including the amendment;33
o. Monitor and resolve conflict of interest issues at management
level, Board of Directors and Board of Commissioners
Members, including misuse of the Company's assets and
manipulate the Company's transactions;
p. Conduct a division of labor among members of the Board of
Commissioners governed by themselves, and for the smooth
functioning of the Board of Commissioners may be assisted
by a Secretary of the Board of Commissioners appointed by
the Board of Commissioners at the expense of the Company.
II.7.2 In Relation to Shareholders/General Meeting of Shareholders
32
Law No. 40 of 2007 concerning the Limited Liabilities Company Article 116 letter a 33
Regulation of the Minister of State-Owned Enterprises Number: PER-09/MBU/2012 concerning
Amendment to the Regulation of the Minister of State-Owned Enterprises No. PER-01/MBU/2011
on the Implementation of Good Corporate Governance (GCG) on State-Owned Enterprise Article
12 Paragraph 9
42
1. Provide relevant information related to the supervisory duties exercised by
the Board of Commissioners to Shareholders and Stakeholders on the basis
of provisions in a timely, accurate, clear and objective manner;
2. Call and notify the Extraordinary GMS when the Board of Directors fails
to make notices and the conduct of the GMS at the request of the Board of
Commissioners or the Shareholders of Series A Dwiwarna or 1 (one)
Shareholder or more which has at least 1/10 (one per ten) with valid voting
rights, in the event that the period has passed 15 (fifteen) days after the
letter of request;34
3. Lead a GMS which may be exercised by a member of the Board of
Commissioners appointed by the Board of Commissioners;35
4. Provide reports on the supervisory duties that have been carried out during
the past financial year to the GMS,36
in order to obtain the acquittal and
discharge of the responsibilities (acquit et decharge) of the GMS;
5. Report immediately to the GMS in case of symptoms of declining
performance of Company37
accompanied by suggestions for improvement
of such performance;
6. Provide opinions and suggestions for GMS in respect of the appointment
and dismissal of the Board of Directors;
7. Provide opinions and suggestions to the General Meeting of Shareholders
regarding any issues deemed necessary for the management of the
Company;
8. Submit a proposal to the GMS on Key Performance Indicators for the
Board of Commissioners in performing supervisory and advisory functions
34
The Articles of Association of PT TIMAH (Persero) Tbk Article 13 Paragraph 2 and 3 35
The Articles of Association of PT TIMAH (Persero) Tbk Article 15 Paragraph 1 36 The Articles of Association of PT TIMAH (Persero) Tbk Article 21 Paragraph 2 letter b point
viii 37
The Articles of Association of PT TIMAH (Persero) Tbk Article 21 Paragraph 2 letter b point iv
43
to the Board of Directors in accordance with prevailing laws and
regulations;38
9. Provide opinions and suggestions to the GMS in relation to the Company's
Long Term Plan/RKAP development plan, RKAP and its
amendments/additions proposed by the Board of Directors, investment
plans/equity or shareholdings;
10. Propose a Public Accountant (External Auditor) to the General Meeting of
Shareholders based on proposals and selection made by the Audit
Committee in accordance with the assignment of the Board of
Commissioners by appointment process under the provisions of the
procurement of Company's goods and services39
and the applicable laws
and regulations;
11. Sign the Annual Report, in the event that a member of the Board of
Commissioners is unwilling to sign the Annual Report, they must state the
reason in writing;40
12. Appoint one of the other members of the Board of Directors to perform the
duties of the Board of Directors who are absent and temporarily perform
the duties of the Board of Directors in the event of a Company at any time
for any reason does not have a member of the Board of Directors, with an
obligation no later than 30 (thirty) days after the vacancy, the Board of
Commissioners proposes the General Meeting of Shareholders to fill such
vacancy;
13. Sign share certificates and collective share certificates with the President
Director. If the President Director is absent, then it will be replaced by one
38
Regulation of the Minister of State-Owned Enterprises Number: PER-09/MBU/2012 concerning
Amendment to the Regulation of the Minister of State-Owned Enterprises No. PER-01/MBU/2011
on the Implementation of Good Corporate Governance (GCG) on State-Owned Enterprise Article
15 Paragraph 1 and 2 39
Regulation of the Minister of State-Owned Enterprises Number: PER-09/MBU/2012 concerning
Amendment to the Regulation of the Minister of State-Owned Enterprises No. PER-01/MBU/2011
on the Implementation of Good Corporate Governance (GCG) on State-Owned Enterprise Article
31 Paragraph 1, 2, and 3 40
Law No. 40 of 2007 concerning the Limited Liabilities Company Article 67 Paragraph (2) and
Law No. 19 of 2003 concerning State-Owned Enterprises Article 23 paragraph 3
44
of the Directors. If the President Commissioner is absent, then it shall be
replaced by one of the members of the Board of Commissioners;
14. Provide opinions and suggestions to the General Meeting of Shareholders
regarding any other matters deemed necessary for the management of the
Company.
II.7.3 In Relation to the Company's Work Plan and Budget
1. Prepare the work plan and budget of the Board of Commissioners for the
current year as part of the Company's work plan and budget;
2. Review and provide opinions on the Company's Work Plan and Budget
(RKAP) and the Company's Long-Term Plan (RJPP) prepared by the
Board of Directors;
3. Sign the RKAP in order to give approval or endorsement to the RKAP
prepared by the Board of Directors, no later than 31 December of the
current year or before the start of the new fiscal year;
4. Approve the RJPP that the Board of Directors has prepared, before the
RJPP period runs to an end.
II.7.4 In Relation to Nomination, Remuneration, and Human Resources
1. Review and supervise to ensure that the Company has a strategy and
nomination policy that includes the process of organizational analysis,
procedures and criteria for recruitment, selection and promotion;
2. Propose a nomination and selection system for candidates for members of
the Board of Commissioners and Members of the Board of Directors of the
Company, and submit it to the General Meeting of Shareholders to be
ratified;
45
3. Ensure that the Company has a transparent remuneration system in the
form of salaries or honoraria, fixed allowances and facilities and variable
incentives;
4. Formulate and determine and propose to the General Meeting of
Shareholders (if necessary) related to the remuneration policy in the form
of salary or honorarium, fixed allowances and facilities and variable
incentives and tantiems for the Board of Commissioners and the Board of
Directors;
5. Evaluate employee benefits, allowance and other facilities, and submit
transparent recommendations at least once in 2 (two) years, on:
a. Assessment of Employee benefits system, grant allowance, and
other facilities;
b. Pension systems and benefits;
c. Systems and other benefits in the case of reduction of Employees.
6. Ensure there is liability insurance of members of the Board of
Commissioners and Board of Directors;
7. Conduct supervision to ensure that the Board of Directors has appointed
members of the Board of Commissioners and Directors of
Subsidiaries/Joint Ventures and Officials one level below the Board of
Directors in accordance with the prevailing regulations;
8. Receive Report of Appointment of Directors and Board of Commissioners
of Subsidiaries/Joint Ventures Company after being recorded in each of
the AGMS of Subsidiaries;
9. Further regulation concerning Subsidiaries refers to the prevailing laws
and regulations;
10. Ensure that the Company has human resource management and
development policies;
46
11. Review and supervise human resource development management practices
based on the Company governance guidelines in particular management
policies and procedures in the field of human resource development;
12. Review and supervise the implementation of Human Resource Planning,
Recruitment, Selection, Employee Placement and Positioning System
within the Company's organizational structure, promotion and demotion as
well as mutation and related to the determination of remuneration;
13. Reviewe plans for promotion and mutation of officers one level below the
Board of Directors in accordance with the qualifications assigned to the
Company;
14. Conduct oversight of existing industrial relations within the Company.
In performing this obligation, the Board of Commissioners may be assisted by the
Nomination, Remuneration and Human Resources Committee (if formed) or other
committees established by the Company with its duties and functions providing
Nomination, Remuneration and Human Resources recommendations.
II.7.5 In Relation to the Performance Evaluation of Board of
Commissioners and Board of Directors
Develop the key Performance Indicators (KPI) of the Board of Commissioners:
1. Evaluate the performance of the Board of Commissioners based on the
Key Performance Indicators (KPI) of the Board of Commissioners with a
self assessment system or other system to be decided in the Board of
Commissioners meeting;
2. Provide responses and recommendations on the establishment of KPI
Directors at the beginning of each working year;
3. Evaluate the performance of the Board of Directors based on the KPI of
the Board of Directors and respond to the Board of Directors, then submit
the recommendation to the GMS.
47
II.7.6 In Relation to Risk Management
The Board of Commissioners must ensure that the implementation of risk
management has been carried out thoroughly in the Company. In performing this
task, the Board of Commissioners may be assisted by the BoC Committees. The
Board of Commissioners performs an active role in supervising the
implementation of Risk Management conducted by the Board of Directors. In
addition, the Board of Commissioners is also encouraged to perform the following
functions:
1. Obtain an understanding and evaluation of Risk Management
implementation in the Company including but not limited to risk
management policies and implementation in the Company, various risks
faced by the Company, strategy, system, methodology and infrastructure
and risk management;
2. Evaluate the conformity between policies and the application of Risk
Management, and to evaluate the responsibility of the Board of Directors
in implementing the Risk Management policy as referred to in letter (a)
above;
3. Coordinate the implementation and supervision of the existence and level
of effectiveness of each component of Enterprise Risk Management
(ERM) within the Company;
4. Measure the effectiveness of each component of the ERM that has been
applied to the Company;
5. Evaluate and decide on the application of the Board of Directors relating
to transactions that require the approval of the Board of Commissioners.
In order to carry out the task of monitoring the management of Risk Management,
the Board of Commissioners may be assisted by other Committees established by
the Company with duties and functions including monitoring and evaluation of
the business risks managed by the Corporation.
48
II.7.7 In Relation to the Information Technology
1. Obtain information on the policies and application of information
technology systems used by the Company;
2. Provide suggestions and opinions on the information technology system
applied by the Company.
II.7.8 In Relation to Mining Business and other Company’s Policies
The Board of Commissioners oversees and gives advice to the Board of Directors
on the policies issued by the Company by conducting the review, providing
advice and opinions on:
1. Policy, publication mechanism and Corporate Social Responsibility (CSR)
program, Community Development Partnership (PKBL), Reclamation and
Post Mining program;
2. Policies to ensure the implementation of mining governance including
environmental management and Post Mining in accordance with
applicable regulations and with the principles of Good Mining Practices;
3. Procurement policy of goods and services and their application in
accordance with the provisions applicable to State-Owned Enterprises
(SOEs);
4. The accounting policies and preparation of financial statements in
accordance with generally accepted accounting standards in Indonesia;
5. The quality policy and service and its implementation in the Company;
6. Ensure business transactions with Subsidiaries are conducted on an arm's
length relationship basis as do business transactions with unaffiliated
parties.
49
In performing this duty, the Board of Commissioners may be assisted by the Audit
Committee and other Committees established in the Company as required.
II.7.9 In Relation to Ethics of Business and Anti Corruption
1. Members of the Board of Commissioners are prohibited from giving or
offering, or receiving, directly or indirectly, anything of value to or from
customers or a Government official to influence or in return for what they
do and other actions, in accordance with the provisions of legislation;41
2. Support corruption eradication efforts proclaimed by the Government by
reporting on assets to be submitted to the Board of Directors and
subsequently filed with the competent Government Institution;
3. Report any action or relationship that may cause a conflict of interest;
4. Not abusing authority and position in various business activities of the
Company for personal and group interests;
5. Protect the Company's assets from unauthorized use;
6. Report to the competent agency for any indication or fraud occurring
within the Company in accordance with applicable regulations in the
Company.
II.7.10 In Relation to the Internal Control System
The Board of Commissioners has an obligation to:
1. Ensure the effectiveness of the Company's internal control system
41
Regulation of the Minister of State-Owned Enterprises Number: PER-09/MBU/2012 concerning
Amendment to the Regulation of the Minister of State-Owned Enterprises No. PER-01/MBU/2011
on the Implementation of Good Corporate Governance (GCG) on State-Owned Enterprise Article
40 Paragraph 1
50
2. Ensure the effectiveness of execution of duties of Internal Auditor and
External Auditor, by assessing the Competence, Independence and scope
of duties of Internal Auditor and External Auditor;
3. Ensure the Internal Auditor, External Auditor and Audit Committee have
access to information about the Company that is required to perform its
duties;
4. Assess the accuracy of information prepared for other parties, especially in
Annual Financial and Non-Financial Statements and Annual Reports.
II.7.11 In Relation to Disclosure and Confidentiality of Information
1. Oversee the Company to disclose important information in the Annual
Report (including the Financial Statements) to other parties in accordance
with applicable laws in a timely, accurate, clear and objective manner;
2. The Board of Commissioners is responsible to the Company to maintain
the confidentiality of the Company's data and/or information;
3. The confidential information obtained while serving as a member of the
Board of Commissioners shall be kept confidential in accordance with
applicable laws and regulations;
4. Ensure that the Company's Annual Report contains information on its
identity, its main jobs, the positions of the Board of Commissioners in
other companies, including meetings conducted within one fiscal year
(internal meetings or joint meetings with the Board of Directors), as well
as honoraria, facilities and/or other allowances received by the Company.42
II.7.12 In Relation to Reporting
42
Regulation of the Minister of State-Owned Enterprises Number: PER-09/MBU/2012 concerning
Amendment to the Regulation of the Minister of State-Owned Enterprises No. PER-01/MBU/2011
on the Implementation of Good Corporate Governance (GCG) on State-Owned Enterprise Article
12 Paragraph 8
51
1. Submit quarterly reports on progress of realization of Performance
Achievement Indicators to Shareholders;43
2. Conduct research and review of the reports of the Board of Directors and
all its staff, especially those relating to specific tasks that have been
decided together;
3. Examine and review reports of committees under the Board of
Commissioners;
4. Report the appointment and dismissal of members of the Audit Committee
and other committees (if any) to the GMS;
5. Examine and review quarterly reports on the implementation of the RKAP
prepared by the Board of Directors and provide necessary
advice/recommendations;
6. Examine and review periodic reports and annual reports prepared by the
Board of Directors and sign annual reports.44
II.7.13 In Relation to Other Tasks and Obligations
Carry out other obligations in the context of supervision task and giving advice to
the Board of Directors, as long as it is not contrary to the laws and regulations, the
Articles of Association and/or the resolutions of the GMS.45
II.8 AUTHORITY OF THE BOARD OF COMMISSIONERS
a. The Board of Commissioners is authorized to approve or reject in writing
the plan of the Board of Directors to:46
43 Regulation of the Minister of State-Owned Enterprises Number: PER-09/MBU/2012 concerning
Amendment to the Regulation of the Minister of State-Owned Enterprises No. PER-01/MBU/2011
on the Implementation of Good Corporate Governance (GCG) on State-Owned Enterprise Article
15 Paragraph 3 44 The Articles of Association of PT TIMAH (Persero) Tbk Article 21 Paragraph 2 letter b point v 45
The Articles of Association of PT TIMAH (Persero) Tbk Article 21 Paragraph 2 letter b point ix 46
The Articles of Association of PT TIMAH (Persero) Tbk Article 18 Paragraph 7
52
1. Establish a Subsidiary and/or Joint Venture Company;
2. Conduct equity participation in other companies, Subsidiaries and
Joint Venture Companies;
3. Merger, consolidation, acquisition, separation and dissolution of
Subsidiaries;
4. Conduct licensing agreements, management contracts, lease assets,
joint operations and other cooperation agreements that exceed
certain values established by the Board of Commissioners;
5. Binds the Company as a guarantor (borg or avalist) that has
financial consequences that exceed a certain amount determined by
the Board of Commissioners;
6. Transfer, relinquish or pledge less than 50% (fifty percent) of the
Company's total net worth in 1 (one) transaction or more, whether
related to each other or not;
7. Eliminate from the books of bad debts and inventories of dead
goods exceeding certain value determined by the Board of
Commissioners;
8. Carry out other actions that have not been determined in the RKAP
but still stipulated in the Company's Articles of Association and the
prevailing laws and regulations.
b. Temporarily terminate the members of the Board of Directors from their
positions if the members of the Board of Directors act in contrary to the
Articles of Association or there is indication of any action that causes the
Company to be liable or neglect their obligations or there is an urgent
reason for the Company, taking into account the following provisions:47
1. Decisions of the Board of Commissioners concerning the
temporary dismissal of members of the Board of Directors shall be
47
The Articles of Association of PT TIMAH (Persero) Tbk Article 17 Paragraph 23
53
conducted in accordance with the decision-making procedures of
the Board of Commissioners Meeting;
2. Such suspension shall be notified in writing to the members of the
Board of Directors concerned with the reasons for such action with
a copy to the Board of Directors and submitted within 2 (two) days
after the issuance of such suspension;
3. Temporary suspended members of the Board of Directors are not
authorized to perform the Company's management and represent
the Company either inside or outside the Court;
4. Within a period of 45 (forty five) days after the interim provision,
an Extraordinary General Meeting of Shareholders shall be
convened by the Board of Commissioners to decide whether to
revoke or enforce the decision of such dismissal;
5. In the Extraordinary GMS, members of the Board of Directors are
given an opportunity to defend themselves;
6. If within a period of 45 (forty five) days of the Extraordinary GMS
is not held or the Extraordinary GMS can not make a decision, then
the suspension shall be void and the member of the Board of
Directors concerned shall perform the necessary duties;
7. The temporary suspension may not be renewed or re-established
for the same reason, if the suspension is declared void as referred
to in item 6.
c. Manage the Company temporarily in the event that all members of the
Board of Directors are suspended temporarily or the Company does not
have any member of the Board of Directors. In such case, the Board of
Commissioners is entitled to grant a temporary authority to one or more of
the members of the Board of Commissioners to perform the duties of the
Board of Directors on the responsibilities of the Board of Commissioners;
54
d. Can propose to the Board of Directors to execute GMS if deemed
necessary by mentioning matters to be discussed;
e. Approve the appointment of the Head of the Internal Audit Unit and the
Corporate Secretary;
f. Give approval that the interests of one of the members of the Board of
Directors shall be represented by other members of the Board of Directors
in the event of a conflict of interest to the member of the Board of
Directors represented. In the event of a conflict of interest by all Members
of the Board of Directors, the Company shall be represented by the Board
of Commissioners or by one member of the Board of Commissioner
appointed by the Board of Commissioners;
g. Carry out other supervisory authority as long as it is not contradictory to
the laws and regulations, the Articles of Association, and/or the GMS
decision.
II.9 RIGHTS OF BOARD OF COMMISSIONERS
a. Members of the Board of Commissioners either jointly or individually at
all times during working hours of the Company is entitled to enter the
yard, building and office or other premises used or controlled by the
Company and is entitled to inspect all books, letters and other documents,
inspect and match the state of the cash for verification purposes and others,
check the securities and check the Company's assets and acknowledge any
actions taken by the Board of Directors;
b. Obtain access to Company information in a timely and complete manner;
c. Request an explanation of all questions asked or requested from the Board
of Directors and each member of the Board of Directors;48
d. Establish an Audit Committee and Other Committees (if deemed
necessary) by taking into account the Company's needs and capabilities;
48
The Articles of Association of PT TIMAH (Persero) Tbk Article 21 Paragraph 2 letter a point iii
55
e. Attend a Board of Directors meeting if invited by the Board of Directors
and provide views on the issues being discussed;
f. Appoint and dismiss the Secretary of the Board of Commissioners (if
deemed necessary), to expedite the duties of the Board of Commissioners;
g. Each member of the Board of Commissioners shall be entitled to receive
honorarium and benefits/facilities including post employment benefits that
a type and amount is determined by the GMS with due regard to the
prevailing laws and regulations;
h. Obtain the Company's facilities and facilities in accordance with the
resolutions of the General Meeting of Shareholders which are provisioned
in accordance with the Company's financial condition, the principles of
decency and fairness and are not contradictory to the prevailing laws and
regulations.
II. 10 MEETINGS OF THE BOARD OF COMMISSIONERS
II.10.1 General Policy
a. The Meeting of the Board of Commissioners is a meeting held by the
Board of Commissioners;
b. Internal Meeting of the Board of Commissioners is a meeting attended
only by members of the Board of Commissioners;
c. The Board of Commissioners holds meetings at least once a month. In the
Meeting, the Board of Commissioners may invite the Board of Directors;49
d. The BoC meetings consist of Internal Meetings of the Board of
Commissioners and Board of Commissioners Meeting together with the
Board of Directors (Radirkom), as well as the Board of Commissioners'
Meeting together with the Committees under the Board of Commissioners;
49
The Articles of Association of PT TIMAH (Persero) Tbk Article 22 Paragraph 8
56
e. The Board of Commissioners may hold meetings outside the schedule
specified with conditions as follow:
1) Request 1/3 (one third) of the total members of the Board of
Commissioners;
2) Written request from the Board of Directors; or
3) Written requests from 1 (one) or several Shareholders representing
at least 1/10 (one ten) of the number of shares with voting rights,
stating the matters to be discussed
f. The summoning of the meeting of the Board of Commissioners shall be
conducted by the President Commissioner or by a member of the Board of
Commissioners appointed by the President Commissioner;
g. Meetings of the Board of Commissioners may be held by teleconferencing
between members of the Board of Commissioners residing in different
places, by conference call, video conference or other communication
equipment which enables each Member of the Board of Commissioners to
hear and communicate and participate in the meetings;
h. A Call of Meeting of the Board of Commissioners shall be submitted in
writing by the President Commissioner or by a member of the Board of
Commissioners appointed by the President Commissioner and delivered
within a period of at least 7 (seven) days before the meeting or in a shorter
period of 3 (three) days if in urgent circumstances, excluding the date of
the call and the date of the meeting;50
i. Calling of the Meeting shall not be required if all Members of the Board of
Commissioners are present at the Meeting;51
j. The call of the Meeting must include the event, date, time, and meeting
place;52
50 The Articles of Association of PT TIMAH (Persero) Tbk Article 22 Paragraph 10 51
The Articles of Association of PT TIMAH (Persero) Tbk Article 22 Paragraph 12 52
The Articles of Association of PT TIMAH (Persero) Tbk Article 22 Paragraph 11
57
k. Before the meeting, the Secretary of the Board of Commissioners
circulates the agenda of the meeting to obtain input from the members of
the Board of Commissioners on the agenda. These inputs may include
addition/subtraction or sharpening of the meeting agenda;
l. Every member of the Board of Commissioners shall have the right to
propose the agenda of the meeting to be held;
m. The members of the Board of Commissioners are allowed to have different
opinions although the overall number of votes that agree more. In this
case, the different opinions should be noted in the minutes of the meeting
as a form of dissenting opinion.
II.10.2 Meeting Procedures of the Board of Commissioners
a. The Secretary of the Board of Commissioners receives the
materials/documents/management reports from the Company's Board of
Directors. The materials/documents/management reports will be used as
meeting material for the Board of Commissioners. These materials
include: Monthly Report of the Company, Quarterly Report of the
Company, and Annual Report of the Company and other reports;
b. The Secretary of the Board of Commissioners documents the
materials/reports/documents received in accordance with the procedures of
the administration of the letter;
c. The Secretary of the Board of Commissioners submits the
materials/documents/reports to the President Commissioner;
d. The President Commissioner studies the materials and directs the
Secretary of the Board of Commissioners for a follow-up;
e. If such directions are to be followed up with meetings, the Secretary of the
Board of Commissioners shall immediately prepare the meeting agenda;
58
f. The Secretary of the Board of Commissioners circulates the agenda of the
meeting and the materials/documents/reports to be discussed in the
meeting to the members of the Board of Commissioners to obtain inputs
on the agenda;
g. Members of the Board of Commissioners receive, read, and study the
meeting agenda along with materials that have been prepared. Upon
completion, the agenda is sent back to the Secretary of the Board of
Commissioners together with the inputs of the respective Members of the
Board of Commissioners and affixing the paraff or signature as a sign of
approving the agenda of the meeting;
h. The Secretary of the Board of Commissioners shall prepare a letter of
invitation to the meeting after receiving all available inputs from the
members of the Board of Commissioners;
i. In the invitation letter, the Secretary of the Board of Commissioners sets
out the points of issue to be discussed in the meeting;
j. If the meeting invites another party, the Secretary of the Board of
Commissioners is responsible for making an invitation letter to the party
concerned. In the event that the other party is from Management, ie, an
official of 1 (one) level and/or 2 (two) levels below the Board of Directors,
therefore such purpose must be in the knowledge of the Board of
Directors;
k. Meeting participants receive invitations and meeting materials;
l. In the event that the Meeting of the Board of Commissioners is conducted
by way of teleconference, the following provisions apply:
1) Each participating member of the Board of Commissioners shall be
deemed present at the Meeting to determine the fulfillment of the
attendance quorum requirements and the decision of the Board of
Commissioners Meeting;
59
2) The place where the Chairman of the Meeting takes part shall be
regarded as the venue for the Meeting of the Board of
Commissioners;
3) The minutes of the meeting shall be submitted and signed by all
Members of the Board of Commissioners, whether or not
participating in the Meeting.
II.10.3 Attendance Mechanism
a. The Meeting of the Board of Commissioners is valid and entitled to take
binding decisions when attended or represented by more than 1/2 (one-
quarter) of the members of the Board of Commissioners;53
b. A member Board of Commissioners may be represented in the Meeting
only by other members of the Board of Commissioners by a written
authority granted exclusively for such endeavor and a Member of the
Board of Commissioners may only represent another member of the Board
of Commissioners;54
c. This Power of Attorney is binding for members of the Board of
Commissioners who are not present on the result of the Board of
Commissioners' Meeting;
d. Each meeting of the Board of Commissioners is chaired by the President
Commissioner. In the event that the President Commissioner is unable to
attend or should be absent, the meeting shall be chaired by a Member of
the Board of Commissioners appointed by the President Commissioner. In
the event that the President Commissioner does not make an appointment,
the longest term of the Board of Commissioners acts as Chairman of the
Meeting. In the event that there is more than 1 (one) longest-term member
53
The Articles of Association of PT TIMAH (Persero) Tbk Article 22 Paragraph 13 54
The Articles of Association of PT TIMAH (Persero) Tbk Article 22 Paragraph 15 and 16
60
of the Board of Commissioners, the oldest Member of the Board of
Commissioners acts as Chairman of the Meeting;55
e. Internal Meeting of the Board of Commissioners is attended by members
of the Board of Commissioners, Secretaries of the Board of
Commissioners or other officials assigned by the President Commissioner,
except for special meetings which may only be attended by members of
the Board of Commissioners;
f. In other events, the Meeting of the Board of Commissioners shall not be
entitled to take a decision unless all members of the Board of
Commissioners or its authorized representative is present and agrees on
the addition of the agenda/meeting agenda.
II.10.4 Procedures of Problems Discussion and Decision-making
a. Before the discussion of the meeting adenda, the Chairperson first explains
the disciplinary procedures of the meeting, among others, regarding the
use of communication tools in the Meeting, question/answer/opinion
mechanism, voting mechanism (if there is voting);
b. The Meeting of the Board of Commissioners shall prioritize the discussion
on an agenda which requires the decision-making or approval of the Board
of Commissioners;
c. All decisions of the BOC Meeting shall be in good faith, rational
considerations and have been thoroughly investigated against relevant
matters, sufficient and free from conflict of interest and independently
created by each Member of the Board of Commissioners;
d. Decision making by the Board of Commissioners is conducted through the
Board of Commissioners Meeting;
55
The Articles of Association of PT TIMAH (Persero) Tbk Article 22 Paragraph 17, 18, 19, and
20
61
e. All decisions in the Meeting of the Board of Commissioners shall be taken
by deliberation for consensus;56
f. To maintain independence and objectivity, any member of the Board of
Commissioners with a conflict of interest is required not to participate in
voting for decision-making. It should be noted in the minutes of the
meeting;
g. If the consensus is not reached by consensus, then the decision of the
Meeting of the Board of Commissioners shall be taken by vote agreeing to
more than 1/2 (one half) of the total number of valid votes issued at the
meeting;
h. If the number of votes that agree and disagree as much, then the Chairman
of the Meeting decides the result of the meeting, except on the person, the
decision of the meeting shall be conducted by a closed vote;57
i. Each member of the Board of Commissioners shall be entitled to issue 1
(one) vote plus 1 (one) vote for the member of the Board of
Commissioners they represent;58
j. The blank and invalid votes are considered absent and not counted in
determining the number of votes cast in the meeting;
k. In the case of the proposal of more than 2 (two) alternatives and the voting
result has not received 1 (one) alternative with the vote of more than 1/2
(one per two) part of the total votes cast, then re-election of 2 (two)
alternatives which receives the most votes so that one (1) alternative
receives a vote of more than 1/2 (one-half) of the total votes cast;59
l. The Board of Commissioners may also adopt legitimate decisions without
holding a Meeting of the Board of Commissioners provided that all
members of the Board of Commissioners have been notified in writing and
all members of the Board of Commissioners agree on the proposals
56
The Articles of Association of PT TIMAH (Persero) Tbk Article 22 Paragraph 21 57 The Articles of Association of PT TIMAH (Persero) Tbk Article 22 Paragraph 24 58
The Articles of Association of PT TIMAH (Persero) Tbk Article 22 Paragraph 23 59
The Articles of Association of PT TIMAH (Persero) Tbk Article 22 Paragraph 26
62
submitted in writing by signing the agreement. The decisions taken in such
manner shall have the same power with the decisions taken with validity in
the Meeting of the Board of Commissioners;
m. The decision making/approval of the Board of Commissioners on the
proposal of the Board of Directors shall be done no later than 14 (fourteen)
days after receipt of the written request of the Board of Directors
accompanied by complete documents and requirements in accordance with
applicable regulations.60
If within 45 (forty five) days of receipt of the
application of the Board of Directors, the Board of Commissioners has not
provided a written response, the Board of Commissioners shall be deemed
to approve the proposal of the Board of Directors;
n. Decisions concerning strategic aspects should be made through the
mechanism of the Board of Commissioners Meeting. These strategic
aspects include, among others, the actions of the Board of Directors which
must be immediately approved by the General Meeting of Shareholders,
all actions of the Board of Directors which have received written
recommendation from the Board of Commissioners, and all deeds which
must obtain written approval from the Board of Commissioners.
II.10.5 Making Minutes of Meeting of the Board of Commissioners
a. Every Meeting of the Board of Commissioners shall be made of minutes
of meetings which contain opinions which are evolving in the meeting,
either supporting or non-supporting or dissenting opinion, the conclusion
of the meeting, and the reasons for the absence of any member of the
Board of Commissioners, if any;61
60 Decision of Secretary of the Ministry of State-Owned Enterprises No. SK-16/S.MBU/2012 on
Indicator/Parameter of Assessment and Evaluation of Good Corporate Governance
Implementation on State-Owned Enterprise, Indicator 14 Parameter 44 Criterion 2 61
Regulation of the Minister of State-Owned Enterprises Number: PER-09/MBU/2012 concerning
Amendment to the Regulation of the Minister of State-Owned Enterprises No. PER-01/MBU/2011
on the Implementation of Good Corporate Governance (GCG) on State-Owned Enterprise Article
14 Paragraph 3
63
b. The minutes of the Meeting of the Board of Commissioners are signed by
the Chairman of the Meeting and all Members of the Board of
Commissioners who are present at the meeting;62
c. The minutes of the Meeting should illustrate the course of the meeting. It
is important to be able to see the decision-making process as well as be a
legal document and legal evidence to determine the accountability of the
outcome of a meeting decision; Therefore, the Minutes of Meeting shall
include:
1) Place, date and time of the meeting;
2) The agenda discussed;
3) Attendance list signed by each meeting participant;
4) The duration of the meeting took place;
5) Implementation of follow up evaluation of previous meeting result
(if any);
6) Opinions in meetings;
7) Who expressed an opinion;
8) Decision-making process;
9) Decisions taken;
10) Statement of objection to the decision of the meeting if there is no
unanimity.
d. The minutes of the Meeting shall be attached with a letter of authorization
granted exclusively by a member of the Board of Commissioners who is
not present to the other members of the Board of Commissioners.
II.J.6 Procedures for Preparation of Minutes of Meeting of the Board of
Commissioners
62
The Articles of Association of PT TIMAH (Persero) Tbk Article 22 Paragraph 24
64
a. The Secretary of the Board of Commissioners or other officers appointed
by the President Commissioner and/or the Chair of the Meeting shall be
responsible for the creation, administration and distribution of the Minutes
of Meeting;
b. The minutes of the Meeting of the Board of Commissioners shall reflect
the dynamics of the meeting, namely the matters discussed (including the
dissenting opinions of the members of the Board of Commissioners, (if
any) and matters decided;
c. The resolutions of the Board of Commissioners Meeting shall be
submitted to the Board of Directors on the day after the Meeting is held;
d. In the event that the Meeting is not accompanied by the Secretary of the
Board of Commissioners or other officers appointed by the President
Commissioner, minutes of meeting shall be made by one of the appointed
members of the Board of Commissioners of the Board of Commissioners
present;
e. Every member of the Board of Commissioners shall be entitled to receive
a copy of the Meeting of the Board of Commissioners, regardless of
whether the member of the Board of Commissioners concerned is present
or not present at the Meeting of the Board of Commissioners;
f. The draft Minutes of Meeting of the Board of Commissioners shall be
submitted to the Board of Commissioners no later than 7 (seven) days after
the meeting;
g. Every member of the Board of Commissioners present and/or represented
in the Meeting of the Board of Commissioners shall submit approval or
objection and/or proposed revision to the draft Minutes of the meeting (if
any);
h. The minutes of the Meeting of the Board of Commissioners shall be
signed no later than 14 (fourteen) days after the meeting, then the original
Meeting shall be submitted to the Board of Directors to be kept and
65
maintained as Company documents, while the Board of Commissioners
shall keep copies thereof.
II.11 EVALUATION OF THE BOARD OF COMMISSIONERS
II.11.1 General Policy
The performance of the Board of Commissioners and Members of the
Board of Commissioners is evaluated by the Shareholders in the GMS. The
performance evaluation of the Board of Commissioners and each member of the
Board of Commissioners shall be based on the KPIs stipulated by the GMS.
Performance Achievement Indicator is a measure of the assessment of the
successful execution of duties and responsibilities of supervision and giving
advice to the Board of Directors by the Board of Commissioners in accordance
with the provisions of the laws and/or Articles of Association of the Company.
The results of the evaluation on the performance of the Board of
Commissioners as a whole and the performance of each Members of the Board of
Commissioners as an individual constitute an integral part in providing incentives
for Members of the Board of Commissioners.
The performance evaluation results of each individual Board of
Commissioners is one of considerations for the Shareholders to dismiss and/or re-
appoint the Member of the Board of Commissioners. The results of the
performance evaluation are also a means of assessment and improvement of the
effectiveness of the Board of Commissioners.
II.11.2 Performance Evaluation Criteria of Board of Commissioners
The performance evaluation criteria for the Board of Commissioners and
individual members of the Board of Commissioners shall be submitted by the
Board of Commissioners or the Nomination and Remuneration Committee (if
formed) to the Board of Commissioners to be stipulated in the GMS, which shall
consist of at least the following:
66
a. The preparation of KPIs is done at the beginning of the year and
evaluates its achievements at the beginning of the following year;
b. Attendance at Board of Commissioners, Board of Commissioners
Meetings with Directors and Board of Commissioners Meeting
with Committee;
c. Contribution in supervising and giving advice to Directors on the
management of the Company;
d. Achievement of the work program of the Committees of the Board
of Commissioners;
e. Engagement in certain assignments;
f. Commitment to advance the interests of the Company;
g. Compliance with applicable laws and regulations, Articles of
Association, GMS rules, and Company policies.
II.12 SUPPORTING ORGANS OF BOARD OF COMMISSIONERS
II.12.1 Committees of Board of Commissioners
In conducting supervisory duties and providing advice to the Board of
Directors, the Board of Commissioners shall establish an Audit Committee and
may establish other committees in accordance with the development of applicable
laws and regulations and/or in accordance with the needs of the Company. The
established committees have duties related to the supervisory function of the
Board of Commissioners, including but not limited to internal control system
aspect, nomination and remuneration for the Board of Directors and Board of
Commissioners, the implementation of risk management and the application of
Good Corporate Governance principles in accordance with the prevailing law.
Further explanation of the membership requirements of committees,
duties, responsibilities and scope of committees established by the Board of
67
Commissioners shall be governed by the Charter of each committee and shall
become an integral part of this Board Manual.
The establishment of committees at the level of the Board of
Commissioners is ratified by a Decision Letter of the Board of Commissioners.
Establishment of additional committees in accordance with the needs and the
number of members of the Board of Commissioners and approved by the Decision
Letter of the Board of Commissioners.
If at any time, such committees are irrelevant to the conditions of the
Company or are not required, the committees may be terminated.
II.12.2 Secretary to the Board of Commissioners
To assist in the smooth implementation of its duties, the Board of
Commissioners shall be entitled to receive the Secretary to the Board of
Commissioners under the Company's expenses. The Secretary to the Board of
Commissioners undertakes the duties and obligations to assist the Board of
Commissioners in the secretarial function, as well as to ensure that the duties of
the Board of Commissioners are well executed, all necessary information of the
Board of Commissioners is available, and other duties as stipulated in applicable
legislation. Further regulation regarding the Secretary to the Board of
Commissioners shall be conducted by the Board of Commissioners in a separate
document and is an inseparable document of this Manual Board.
68
CHAPTER III
BOARD OF DIRECTORS
III.1 FUNCTION OF BOARD OF DIRECTORS
The Board of Directors shall be the organ of the Company which is solely
responsible for the maintenance of the Company for the interest and purposes of
the Company and represents the Company either inside or outside the court in
accordance with the provisions of the Articles of Association.63
III.2 REQUIREMENTS OF BOARD OF DIRECTORS
Requirements for the members of the Board of Directors shall consist of formal,
material, and other requirements as governed by applicable laws and regulations.64
III.2.1 Formal requirements of the Board of Directors
Members of the Board of Directors shall meet the following formal requirements:
a. Mampu melaksanakan perbuatan hukum;
b. Tidak pernah dinyatakan paillit atau menjadi anggota Direksi atau Dewan
Komisaris yang dinyatakan bersalah, menyebabkan suatu Perusahaan
pailit, atau pernah dihukum karena melakukan tindak pidana yang
merugikan keuangan negara dan/atau yang berkaitan dengan sektor
keuangan dalam kurun waktu 5 (lima) tahun sebelum pengangkatannya;
63 Law No. 40 of 2007 concerning the Limited Liabilities Company Article 1 Paragraph (5) and
Law No. 19 of 2003 concerning State-Owned Enterprises Article 1 paragraph (9), Article 5
Paragraph (3) 64
Regulation of the Minister of State-Owned Enterprises Number: PER-06/ MBU/2012
concerning Amendment to the Regulation of the Minister of State-Owned Enterprises No. PER-
01/MBU/2012 on Requirements and procedures for the appointment and dismissal of members of
the Board of Directors Article 4
69
III.2.2 Objective Requirements for Members of the Board of Directors
Members of the Board of Directors shall meet the following material
requirements:
a. Experience, in the sense that the they have a track record that shows
success in the management of BUMN/Company/Institution where they
work before the nomination;
b. Expertise, in the sense that they have:
1) Adequate knowledge in the Company's business field;
2) Understanding of corporate governance and management;
3) Ability to formulate and implement strategic policies in the
framework of the Company's development.
c. Integrity in the sense that they are never involved:
1) Engineering acts and deviant practices, in the management of
BUMN/Company/Institution of the place they work before the
nomination (doing dishonest);
2) Any breach of contractual injuries that do not comply with
commitments agreed upon by the State-Owned
Enterprise/Company/Institution of the place they work before the
nomination (behave inappropriately);
3) The actions categorized in the course of providing unlawful
benefits to the person of the candidate for the Board of Directors,
the employee of the BUMN/Company/Institution in which they
work, or any other party prior to the nomination (behave
inappropriately);
4) Acts that can be categorized as violations of the provisions relating
to the principles of healthy corporate governance (bad behavior).
d. Leadership in the sense they have the ability to:
70
1) Formulate and articulate the Company's vision;
2) Direct officials and employees of the Company to be able to do
something to realize the Company's objectives;
3) Encourage (give new energy) and provide motivation to officials
and Employees of the Company to be able to realize the goals of
the Company.
e. Have a strong will (enthusiasm) and high dedication to promote and
develop the Company.
III.2.3 Other requirements of the Board of Directors:
a. Not being a board member of a political party, and/or legislative member,
and/or not running for legislative candidate;
b. Not being a head/deputy head of region and/or not running for candidate
of head/deputy head of region;
c. Not currently serving as an officer of the Board, Board of
Commissioners/Supervisory Board of SOEs, members of the Board of
Directors to SOEs and/or Companies, except to sign a declaration willing
to resign from the position if elected as a Member of the Company's Board
of Directors;
d. Not currently occupying positions that is based on laws and regulations
prohibited to be concurrent in the position of Members of the Board of
Directors, except to sign a declaration willing to resign from the post if
elected as a member of the Board of Directors;
e. Not serving as a member of the Board of Directors at the Company for 2
(two) consecutive periods;
f. Physically and spiritually healthy (not suffering from a disease that could
impede the performance of duties as a member of the Board of Directors)
as proven by a health certificate from a government hospital;
71
g. Between the members of the Board of Directors and among members of
the Board of Directors with the Board of Commissioners shall be
prohibited from having a blood relations up to the third degree, either on a
straight line or a line aside, including the relationship arising out of
marriage.65
III.3 MEMBERSHIP OF THE BOARD OF DIRECTORS
III.3.1 Membership
a. The number of Directors shall be at least 3 (three) persons and adjusted to
the needs,66
complexity and strategic plans of the Company, one of whom
shall be appointed as President Director;
b. The composition of the Board of Directors is a combination of
professionals who have the knowledge and experience required by the
Company, enabling effective, efficient and prompt decision-making
processes;
c. The members of the Board of Directors shall be appointed by the GMS,
from the candidates proposed by the Series A Dwiwarna Shareholder after
the nomination process in accordance with applicable laws and regulations
and binding to the General Meeting of Shareholders;67
d. The Directors are appointed and dismissed by the GMS, where in the
GMS must be attended by the A Dwiwarna Share Shareholders and the
resolutions of the GMS must be approved by the Dwiwarna Series A
Shareholder;
e. With respect to individuals nominated as candidates for members of the
Board of Directors, they shall be subject to a fit and proper test by or at the
request of the Shareholder;
65 The Articles of Association of PT TIMAH (Persero) Tbk Article 20 Paragraph 3 66
The Articles of Association of PT TIMAH (Persero) Tbk Article 17 Paragraph 1 67
The Articles of Association of PT TIMAH (Persero) Tbk Article 17 Paragraph 8
72
f. Candidates for Members of the Board of Directors who have followed the
fit and proper test and are elected to be nominated by the Shareholders
shall be appointed and inaugurated by the GMS and such nominations
shall be binding to the GMS;
g. If for any reason the position of the Board of Directors is vacant, then
within a period of no later than 60 (sixty) days after the vacancy takes
place, an Extraordinary General Meeting of Shareholders shall be
convened to fill the vacancy post. As long as the vacancy is vacant and the
replacement is not yet or has not assumed office, then one of the other
Directors shall be appointed based on the decision of the Board of
Directors to carry out the work of the Board of Directors with the same
powers and authorities;
h. If for any reason the Company does not have a member of the Board of
Directors, within a period of no later than 60 (sixty) days after the vacancy
takes place, an Extraordinary General Meeting of Shareholders shall be
convened to fill the vacancy. As long as the vacancy is not yet filled, the
Board of Commissioners shall temporarily carry on the work of the Board
of Directors in progress with the right only to the deeds concerned with the
ongoing things and activities.
III.3.2 Position
a. The term of office of a member of the Board of Directors shall be for a
period of 5 (five) years from the date stipulated by the GMS which appoint
them and terminate at the close of the 5th (fifth) GMS after the date of
their appointment, without prejudice to the right of the GMS to terminate
any member of the Board of Directors at any time before his/her term of
office expires by stating the reasons, inter alia if the Board of Directors is
unable to perform their duties properly, unable to fulfill their obligations
as agreed in the management contract, does not enforce the legislation
and/or provisions of the Articles of Association, engage in actions that are
73
detrimental to the Company and/or the State, are found guilty of a court
decision that has had permanent legal force, and/or resign.68
b. The term of office of a member of the Board of Directors shall expire if:69
1) Resign;
2) Die;
3) The term ends;
4) Dismissed based on the resolution of the GMS;
5) No longer qualify as a Member of the Board of Directors under
applicable laws and regulations.
c. In the event that a member of the Board of Directors resigns, then:
a. Members of the Board of Directors resigning from their positions
shall notify in writing of such intent to the Company within 60
(sixty) days with a copy to the Board of Commissioners, other
Members of the Board of Directors and Shareholders proposing the
appointment of the members of the Board of Directors concerned;70
b. Within 60 (sixty) days after the receipt of the letter of resignation,
an Extraordinary General Meeting of Shareholders shall be
convened to determine such resignation, but if the Company does
not hold an Extraordinary GMS within the period of 60 (sixty)
days then the resignation of the Board of Directors becomes valid
without requiring the approval of the GMS;71
c. A resigning member of the Board of Directors may be held
accountable from the date of appointment until the effective date of
resignation.72
68
The Articles of Association of PT TIMAH (Persero) Tbk Article 17 Paragraph 10 69
The Articles of Association of PT TIMAH (Persero) Tbk Article 17 Paragraph 21 70 The Articles of Association of PT TIMAH (Persero) Tbk Article 17 Paragraph 19 letter a 71
The Articles of Association of PT TIMAH (Persero) Tbk Article 17 Paragraph 19 letter b and c 72
The Articles of Association of PT TIMAH (Persero) Tbk Article 17 Paragraph 21
74
d. One or more Members of the Board of Directors may be
temporarily dismissed by the Board of Commissioners if the
member of the Board of Directors acts contrary to the Articles of
Association or there is an indication of loss of the Company or
neglect of its obligations or there is an urgent reason for the
Company under the following conditions:73
1) Decisions of the Board of Commissioners concerning the
temporary dismissal of members of the Board of Directors
shall be conducted in accordance with the decision-making
procedures of the Board of Commissioners Meeting;
2) Such temporary dismissal shall be notified in writing to the
person concerned with any reason that causes a temporary
dismissal action with a copy to the Board of Directors;
3) Notice of suspension shall be submitted within 2 (two) days
after the stipulation of such suspension is terminated;
4) Within 45 (forty five) days after the suspension, an
Extraordinary GMS shall be convened by the Board of
Commissioners which will decide whether to revoke or
enforce the decision of such dismissal;
5) The temporary suspended members of the Board of
Directors shall be given an opportunity to defend
themselves;
6) If an Extraordinary GMS is not held within 45 (fourteen
five) days after the suspension, or the GMS can not make a
decision, then the suspension is null and void and the Board
of Directors concerned shall perform the duties properly;
73
The Articles of Association of PT TIMAH (Persero) Tbk Article 17 Paragraph 23
75
7) The temporary suspension can not be renewed or re-
established for the same reasons, if the suspension is null
and void as referred to in number 6 (six).
e. Appointment of members of the Board of Directors shall not be
concurrent with the appointment of members of the Board of
Commissioners, except for appointment for the first time at the
time of establishment;
f. In the case of an addition to the Board of Directors, the term of
office of the new Board of Directors shall be 5 (five) years.74
III.4 INDEPENDENCE (AUTONOMY) OF DIRECTORS
In order that the Board of Directors can act as well as possible in the interest of
the Company as a whole, the independence of the Board of Directors is one of the
important factors that must be maintained. To maintain independence, it is
necessary to stipulate the following provisions:
a. In addition to the Board of Directors, other parties are prohibited from
engaging in or interfering with the management of the Company;
b. The Board of Directors shall be prohibited from engaging in activities that
could interfere with their independence in administering the Company.
III.5 PROGRAM FOR INTRODUCTION AND CAPABILITY
BUILDING
III.5.1 Introduction Program
Conditions on introduction programs include the following:
a. For newly appointed members of the Board of Directors, an Introduction
Program is required regarding the general condition of the Company;
74
The Articles of Association of PT TIMAH (Persero) Tbk Article 17 Paragraph 17
76
b. The person responsible for the recognition program is the Secretary of the
Company or any person who performs the functions as a Corporate
Secretary;75
c. Program introduction includes:
1) Implementation of Good Corporate Governance principles in the
Company;
2) A description of the duties and responsibilities of the Board of
Directors and the Board of Commissioners by law;
3) The description of the Company relates to the objectives, nature,
and scope of activities, financial and operating performance,
strategy, short-term and long-term business plan, competitive
position, risk, internal control and other strategic issues;
4) Information relating to delegated powers, information relating to
internal audits and external audits, and internal control systems and
policies in the Company;
5) A description of the obligations, duties, responsibilities and rights
of the Board of Directors and Board of Commissioners;
6) Understanding of the ethical principles and norms prevailing
within the Company and the local community;
7) Team Building. In this activity, the BoD's introduction program
includes the Board of Commissioners, both newly and formerly
served.
d. The introduction program can be in the form of presentations, meetings,
visit to Company facilities, visit to mine or mining processing sites, review
of Company’s documents or other programs deemed appropriate to the
needs.
75
Regulation of the Minister of State-Owned Enterprises Number: PER-09/ MBU/2012
concerning Amendment to the Regulation of the Minister of State-Owned Enterprises No. PER-
01/MBU/2011 on the Implementation of Good Corporate Governance (GCG) on State-Owned
Enterprises Article 43 Paragraph 2
77
III.5.2 Capability Building Program
Capability Building is important to ensure that the Board of Directors can keep
up-to-date on the latest developments of the Company's business and the
prevailing laws and regulations and to anticipate future problems for the
sustainability and progress of the Company.
The provisions on the Capability Building Program for the Board of Directors are
as follows:
a. Capability Building Program is implemented in order to improve the
effectiveness of the Board of Directors;
b. Plans to implement the Capability Building Program should be included in
the Work Plan and Budget of the Board of Directors;
c. Every member of the Board of Directors participating in a Capability
Building Program such as a seminar and/or training is required to hold
presentations to other Members of the Board in order to share information
and knowledge;
d. The members of the Board of Directors concerned are responsible for
reporting on the implementation of the Capability Building Program. The
report is submitted to the Board of Directors.
The Capability Building program can be in the form of:
a. Knowledge relating to the principles of corporate law and the updating of
legislation relating to the Company's business activities, as well as
information technology;
b. Knowledge relating to strategic management and its formulation;
c. Development of special skills in building harmonious relationships with
all stakeholders to generate a sense of support for stakeholders over the
Company's long-term existence;
78
d. Capability Building related to the effective leadership in managing Human
Resources (HR), encompassing future human resource development
challenges, environmental development challenges, equal employment
opportunities, planning, selection and placement of labor, employment
development, training programs and skills appropriate for the workforce,
reasonable wage determination, employee performance appraisal, safety
related matters and employee welfare, as well as the development of a
reliable working system required by the Company in the long term;
e. Knowledge related to the change management that can bring the Company
to the vision and mission to be realized;
f. Knowledge related to the corporate social responsibility; and
g. Knowledge related to the quality financial reporting.
III.6 ETHICS OF THE BOARD OF DIRECTORS
III.6.1 Ethics related to exemplary
a. The Board of Directors shall encourage the creation of ethical conduct and
uphold the highest ethical standards in the Company. One way is to make
themselves a good example for Employees;
b. Carry out duties in a trustworthy, dedicated manner, upholding honesty as
a high value, being honest in expressing opinions both orally and in
writing, as well as being honest in attitudes and actions;
c. Tolerant in attitudes and actions, and courteous in expressing opinions
both orally and in writing;
d. Respect the decision of the Board of Commissioners, Shareholders and/or
AGMS;
e. Have an orientation to add value to the Company;
f. Continually improve their knowledge and understanding of matters
relating to the maintenance of the Company;
79
g. To take an attitude, to express an opinion, and to act as an individual, the
member concerned must clearly and firmly state that such attitude, opinion
or action is personal;
h. To take attitudes, opinions and actions should be based on objectivity,
professional and independent elements in the interest of the Company in
line with the interests of the Stakeholders;
i. In carrying out their duties and obligations, put the interests of the Board
of Directors in its entirety above personal interests.
III.6.2 Ethics related to Compliance with Laws and Regulations
The Board of Directors must comply with applicable laws and regulations, the
Articles of Association and the principles of Good Corporate Governance as well
as the Company's defined policies.
III.6.3 Ethics Related to Disclosure and Confidentiality of Information
The Board of Directors shall disclose information in accordance with applicable
laws and regulations and always maintain the confidentiality of information
entrusted to them in accordance with applicable laws and Company’s policies.
III.6.4 Ethics Related to Company Opportunities and Personal Benefits
Directors are not allowed to:
a. Take the business opportunity of the Company for their own sake;
b. Use Company’s assets, Company’s information or their position as Board
of Directors for personal interest outside the applicable laws and
regulations and applicable Company’s policies;
c. Compete with the Company, that is, using information/inside information
to gain profit for the interest other than Company’s interest;
80
d. Take personal benefit from the activities of the Company, other than salary
and facilities received as Members of the Board of Directors determined
by the GMS.76
III.6.5 Ethics related to Conflicts of Interest
a. Members of the Board of Directors are prohibited from engaging in
actions that have a conflict of interest, and take personal advantage,
directly or indirectly from decision-making and activities of the Company
other than their legitimate income;77
b. The Board of Directors shall not utilize the position for personal gain or
for the benefit of any other person or party that is contrary to the interests
of the Company;
c. The Board of Directors shall fill in a Special Register containing the
ownership of shares and/or ownership of shares by the families in the
Company and other companies and date of shares acquired78
, including
without ownership of shares, and periodically renew at the end of the year
and shall notify the Company on change of data, in accordance with
applicable laws and regulations.
d. In the event of a conflict of interest, it shall be disclosed, and the Member
of the Board of Directors concerned shall not involve themselves in the
decision making process of the Company in connection with the conflict
of interest.
e. Members of the Board of Directors are prohibited from holding multiple
positions as:
76
Law Number 19 of 2003 concerning State-Owned Enterprises Article 7 77
Regulation of the Minister of State-Owned Enterprises Number: PER-09/ MBU/2012
concerning Amendment to the Regulation of the Minister of State-Owned Enterprises No. PER-
01/MBU/2011 on the Implementation of Good Corporate Governance (GCG) on State-Owned
Enterprises Article 23 78
Law No. 40 of 2007 concerning the Limited Liabilities Company Article 50 Paragraph (2)
81
1) Members of the Board of Directors at State-Owned Enterprises,
Regional-Owned Enterprises, Private-Owned Enterprises, and
other positions that may create a conflict of interest;
2) Members of the Board of Commissioners/Supervisory Board of
BUMN;
3) Members of the Board of Commissioners of Private Companies,
except:79
a) Members of the Board of Commissioners of the concerned
BUMN subsidiary/joint venture company, provided that it
is only entitled to the accumulation of income as a member
of the Board of Commissioners in one or more
subsidiaries/joint venture companies up to 30% (thirty
percent) of the salary of the respective Directors in the
BUMN , while other income/the rest are handed over to the
BUMN's income.
b) Members of the Board of Commissioners to represent/fight
for the interests of BUMN (such as on PT Bursa Efek
Indonesia), Members of the Board of Commissioners
because of the obligations determined by the laws and
regulations, or Members of Board of Directors with
maximum tenure of 3 (three) months and based on
legislation can not be renewed or any member of the Board
of Directors to be dismissed, to the extent of obtaining
permission from the Minister of SOEs.
4) Other structural and functional positions at central and local
government agencies/institutions;
79
Regulation of the State Minister for State-Owned Enterprises Number: PER-09/MBU/2014
about the Third Amendment on Regulation of the Minister of State for State Owned Enterprises
Number PER-01/MBU/2012 about Requirements and Procedures for the Appointment and
Dismissal of Member of Board of Directors of State-Owned Enterprises
82
5) The management of a political party and/or a candidate/legislative
member;
6) Other positions that may create a conflict of interest; and/or
7) Other positions in accordance with the provisions of legislation.
f. Members of the Board of Directors having dual positions prohibited as
referred to in point e shall withdraw from one of these positions at least 30
(thirty) days from the date of double positions;
g. Avoid any activity that may affect independence in performing the task;
h. Not respond to any requests from any party for any reason, whether
requests directly from certain parties including and not limited to
officials/officials within Government agencies and political parties,
whether related to the request of donations or related to the procurement of
goods and services at the company;
i. Not participating in trading practices involving insider trading;
j. Comply with applicable laws and regulations.
III.6.6 Ethics of Business and Anti Corruption
a. Members of the Board of Directors do not accept, give or offer directly or
indirectly anything of value to and/or from Customers or Government
Officials to influence or in return for what has been done and other actions
in accordance with applicable laws and regulations;80
b. Members of the Board of Directors shall not accept directly or indirectly,
rewards and/or gifts, and/or grants and/or donations and/or entertainment
of any kind whatsoever for what they have done in relation to the functions
80
Regulation of the Minister of State-Owned Enterprises Number: PER-09/ MBU/2012
concerning Amendment to the Regulation of the Minister of State-Owned Enterprises No. PER-
01/MBU/2011 on the Implementation of Good Corporate Governance (GCG) on State-Owned
Enterprises Article 40 Paragraph 1
83
and duties of the Board of Directors or in their positions as a member of
the Board of Directors;
c. Rewards, gifts, donations and donations in letters (b) are excluding
honorariums, transportation money, travel and lodging expenses or
souvenirs, provided by the Company to the members of the Board of
Directors;
Further regulation of business ethics and anti-corruption is set forth in the Code of
Conduct which is an inseparable document of this Board Manual.
III.7 DUTIES AND OBLIGATIONS OF THE BOARD OF DIRECTORS
III.7.1 General Policy
Duties and Obligations of Directors in managing the Company are:
a. Carry out duties in good faith for the Company's interests and in
accordance with the purposes and objectives of the Company, as well as
ensure that the Company performs its social responsibilities and takes into
account the interests of various Stakeholders in accordance with the
provisions of legislation;81
b. Devote their full effort, thought, attention and devotion to the tasks,
obligations and attainment of the Company's purposes and objectives;82
c. Comply with the Articles of Association of the Company and the laws and
regulations and shall be obligated to implement the principles of
professionalism, efficiency, transparency, independence, accountability,
responsibility, and competence;83
81
Regulation of the Minister of State-Owned Enterprises Number: PER-09/ MBU/2012
concerning Amendment to the Regulation of the Minister of State-Owned Enterprises No. PER-
01/MBU/2011 on the Implementation of Good Corporate Governance (GCG) on State-Owned
Enterprises Article 19 Paragraph 1 82
The Articles of Association of PT TIMAH (Persero) Tbk Article 18 Paragraph 3 83
The Articles of Association of PT TIMAH (Persero) Tbk Article 18 Paragraph 4
84
d. Undertake and ensure the implementation of the Company's business and
activities in accordance with the purposes and objectives and business
activities of the Company;84
e. Make a list of Shareholders, Special Register, Minutes of GMS, and
Minutes of Board of Directors Meeting;85
f. Report to the Company concerning the ownership of shares and/or
ownership of shares by the family (wife/husband and children) to the
Company and other companies, including any changes;86
g. Make an Annual Report as a form of accountability of the Company's
management and prepare the Company's financial documents as referred
to in the law regarding the Company’s Documents;87
h. Maintain and retain in the place of domicile of Company List of
Shareholders, Special Register, Minutes of GMS, Minutes of Board of
Commissioners Meeting, and Board of Directors' Meeting, Annual Report
and Company's financial documents and other Company’s documents;88
i. Provide periodic reports in a manner and time in accordance with
applicable regulations and other reports when requested by the Board of
Commissioners;89
j. Hold and maintain the Company's books and administration in accordance
with the prevailing norms of a Company;
84
The Articles of Association of PT TIMAH (Persero) Tbk Article 18 Paragraph 2 Letter b Point i 85 The Articles of Association of PT TIMAH (Persero) Tbk Article 18 Paragraph 2 Letter b Point
iii 86
Regulation of the Minister of State-Owned Enterprises Number: PER-09/ MBU/2012
concerning Amendment to the Regulation of the Minister of State-Owned Enterprises No. PER-
01/MBU/2011 on the Implementation of Good Corporate Governance (GCG) on State-Owned
Enterprises Article 19 Paragraph 4 87
The Articles of Association of PT TIMAH (Persero) Tbk Article 18 Paragraph 2 Letter b Point
iv 88 The Articles of Association of PT TIMAH (Persero) Tbk Article 18 Paragraph 2 Letter b Point
ix 89
The Articles of Association of PT TIMAH (Persero) Tbk Article 18 Paragraph 2 Letter b Point x
85
k. Apply GCG principles consistently and continuously with reference to
prevailing regulations with due regard to the prevailing provisions, norms
and Articles of Association of the Company;
l. Ensure that the External Auditor, Internal Auditor, and Audit Committee,
as well as other committees (if any), have access to accounting records,
supporting data and information about the Company, to the extent
necessary to perform its duties;
m. Each member of the Board of Directors shall be fully liable in person if the
person concerned is guilty or negligent in performing their duties for the
Company's business and interests;
n. The members of the Board of Directors can not be held liable for losses of
the Company, if they can prove that:90
1) The loss is not due to errors or negligence;
2) Have made good faith and prudent care for the interest and in
accordance with the purposes and objectives of the Company;
3) It has no direct or indirect impact of interest on the proceeds of the
proceeds resulting in a loss; and
4) Have taken action to prevent the continuation of such losses.
o. Divide the tasks and authorities among the Directors as determined by the
Decision of the Board of Directors in the event that the GMS does not
specify the division of the duties.91
III.7.2 In relation to Shareholders/General Meeting of Shareholders
a. The Board of Directors shall organize and maintain a Shareholder Register
and documents related to the GMS in accordance with the provisions of
laws and regulations;
90
Law No. 40 of 2007 concerning the Limited Liabilities Company Article 97 Paragraph (5) 91
The Articles of Association of PT TIMAH (Persero) Tbk Article 18 Paragraph 22
86
b. The List of Shareholders includes:92
1) The name and address of the Shareholder;
2) Number, number and date of acquisition of shares owned by the
shareholders, if issued more than one classification of shares;
3) The amount deposited in the name and address of an individual or
legal entity that has lien on the shares or as the recipient of the
stock fiduciary warrant and the date of acquisition of the liens or
the date of fiduciary guarantee registration;
4) Remarks of the deposit of shares in a form other than money;
5) Changes in ownership of shares, if any;
6) Other information deemed necessary by the Board of Directors.
c. Notifies the refusal to the party who will transfer the rights to the shares
within 30 (thirty) days after the date of application for registration is
received by the Board of Directors, if the Board of Directors refuses to
register the transfer of rights to the shares;93
d. Prepare the Annual Report and submit to the GMS after being reviewed by
the Board of Commissioners within 6 (six) months after the end of the
Company's financial year;94
e. Provide an explanation to the GMS on the Annual Report;95
f. Prepare the Annual Report in accordance with the provisions of the
prevailing laws and regulations signed by all members of the Board of
Directors and Board of Commissioners members for submission in the
GMS. The Annual Report must be made available at the Company office
no later than 14 (fourteen) days prior to the date of the General Meeting of
92
The Articles of Association of PT TIMAH (Persero) Tbk Article 8 Paragraph 2 93
The Articles of Association of PT TIMAH (Persero) Tbk Article 108 Paragraph 8 94 Law No. 40 of 2007 concerning the Limited Liabilities Company Article 166 Paragraph (1) 95
The Articles of Association of PT TIMAH (Persero) Tbk Article 18 Paragraph 2 Letter b Point
vii
87
Shareholders held and may be obtained for review by shareholders with
written request;
g. In the event that any member of the Board of Directors or a member of the
Board of Commissioners does not sign the annual report as referred to
above, they shall state the reasons in writing;96
h. Call and hold an Annual GMS and/or Extraordinary GMS;
i. Prior to the announcement of the GMS, the Company shall first submit the
clear and detailed AGM agenda to OJK (Financial Service Authority) no
later than 7 (seven) days prior to the notice.97
j. Announced in 2 (two) Indonesian language newspapers, one of them
national circulation and the other issued at the place of domicile of the
Company or place of domicile of Stock Exchange where the Company's
shares are registered, and if deemed necessary by the Board of Directors in
1 (one) English-language newspaper98
, and announce in 1 (one) newspaper
for the proposed merger, melting and acquisition of the Company no later
than 30 (thirty) calendar days before the GMS summon;99
k. Request approval of the GMS to conduct Material Transactions with a
value greater than 50% (fifty percent) of the Company's Equity, which is
performed in one or a set of transactions for a particular purpose or activity
in accordance with the procedures and requirements set forth in the OJK
regulations;100
l. Request approval of the GMS to transfer or dispose of the right, or to
make the debt of more than 50% (fifty percent) of the Company's net
96 Law Number 19 of 2003 concerning State-Owned Enterprises Article 23 Paragraph (3) 97
Regulation of Bapepam IX.I.1 concerning the Planning and Implementation of the General
Meeting of Shareholders Point (3) 98
The Articles of Association of PT TIMAH (Persero) Tbk Article 14 Paragraph 4 letter f 99 Law No. 40 of 2007 concerning the Limited Liabilities Company Article 127 Paragraph (2) 100
Regulation of Bapepam IX.E.2 On Material Transactions and Changes in Main Business
Activities Number 2 Letter b
88
worth in either one or more transactions, whether related to each other or
not;101
m. Carry out legal actions in the form of transactions containing conflicts of
interest, between the personal economic interests of members of the Board
of Directors, the Board of Commissioners or the Main Shareholder, with
the Company's economic interests, but the Board of Directors requires the
approval of the GMS by virtue of agreeing to most of the Shareholders
without any conflict of interest;102
n. Provide GMS material to the Shareholders at the Company Office and
shall be provided free of charge upon request;103
o. Prepare minutes of the General Meeting of Shareholders which at least
contain the time, agenda, participants, opinions that develop in the GMS,
and resolutions of the GMS;104
p. Submit the result of the GMS to OJK and announce the result of GMS in
national newspaper at the latest 2 (two) days since the execution of
GMS;105
q. Provide a copy of the Minutes of GMS to the Shareholders;106
r. Request approval of the GMS if the Company wishes to buy back the
issued shares, including the transfer;107
101
The Articles of Association of PT TIMAH (Persero) Tbk Article 18 Paragraph 10 102
The Articles of Association of PT TIMAH (Persero) Tbk Article 18 Paragraph 13 103
Law No. 40 of 2007 concerning the Limited Liabilities Company Article 82 Paragraph 3 and 4 104 Regulation of the Minister of State-Owned Enterprises Number: PER-09/ MBU/2012
concerning Amendment to the Regulation of the Minister of State-Owned Enterprises No. PER-
01/MBU/2011 on the Implementation of Good Corporate Governance (GCG) on State-Owned
Enterprises Article 6 Paragraph 4 105 Regulation of Bapepam LK Number IX.I.1 concerning the Planning and Implementation of the
General Meeting of Shareholders Point (4) 106
Regulation of the Minister of State-Owned Enterprises Number: PER-09/ MBU/2012
concerning Amendment to the Regulation of the Minister of State-Owned Enterprises No. PER-
01/MBU/2011 on the Implementation of Good Corporate Governance (GCG) on State-Owned
Enterprises Article 6 Paragraph 7 107
Law No. 40 of 2007 concerning the Limited Liabilities Company Article 38 Paragraph (1)
89
s. Obtain approval from the GMS to enter into Collective Labor Agreement
(PKB) with employees relating to the income of employees not required
by or exceeding the provisions of laws and regulations;108
t. Request approval of the GMS if the Company wishes to increase the
Company's capital amount. The GMS may transfer such authority to the
Board of Commissioners for a maximum period of 1 (one) year;109
u. Submit the Company’s documents required in the GMS;
v. In the voting, Members of the Board of Directors representing
Shareholders are prohibited from acting as the proxy of the
Shareholders.110
III.7.3 In Relation to Strategy and Work Plan
a. Prepare the Company's vision, mission, objectives, strategy and culture;
b. Prepare the RKAP and submit to the Board of Commissioners no later
than 60 (sixty) days prior to the start of the fiscal year, to obtain the
approval of the Board of Commissioners;111
c. Prepare RJPP which is a strategic plan containing the target and objectives
of the Company to be achieved within 5 (five) years112
, and submit to the
Board of Commissioners no later than 60 (sixty) days before the ending
period of the RJPP, to obtain the approval of the Board of Commissioners;
d. Implement and strive for achievement of long-term goals listed in the
RJPP;
108
Regulation of the Minister of State-Owned Enterprises Number: PER-09/ MBU/2012
concerning Amendment to the Regulation of the Minister of State-Owned Enterprises No. PER-
01/MBU/2011 on the Implementation of Good Corporate Governance (GCG) on State-Owned
Enterprises Article 39 109
Law No. 40 of 2007 concerning the Limited Liabilities Company Article 41 Paragraph (2) 110
Law No. 40 of 2007 concerning the Limited Liabilities Company Article 85 Paragraph 1 and 4 111 The Articles of Association of PT TIMAH (Persero) Tbk Article 18 Paragraph 2 Letter b Point
II 112
Law No. 19 of 2003 concerning State-Owned Enterprises Article 21 Paragraph (1
90
e. Implement and strive for the achievement of short-term targets listed in the
RKAP through the determination of performance targets derived at the
level of work units and structural positions within the organizational
structure of the Company.
III.7.4 In Relation to Risk Management
a. Establish and implement an integrated risk management program that is
part of the implementation of GCG principles;
b. Develop a risk management system and execute it consistently. The risk
management system developed consists of the following stages:
1) Risk Identification, that is the process of identifying the types of
potential and relevant risks;
2) Risk Measurement, that is a process for measuring the size of the
impact and probability of the results of risk identification
3) Risk Profile Formulation, that is a process to describe the
magnitude of the impact and probability of each type of risk, based
on the results of risk measurement;
4) Risk Handling, that is a process to establish possible efforts to deal
with potential risks;
5) Risk Monitoring, that is a process for monitoring various factors
that are expected to lead to the emergence of risk;
6) Evaluation, that is the review process on the adequacy of overall
risk management activities conducted within the Company;
7) Reporting and Disclosure, that is the process for reporting the risk
management system implemented by the Company and its
disclosure to the telated parties in accordance with applicable
provisions.
91
III.7.5 In Relation to Information Technology113
a. The Board of Directors shall prepare and establish information technology
governance by creating a technology master plan for a period of 3 (three)
to 5 (five) years aligned with the Company's Long Term Plan (RJPP) and
implemented in the annual plan as part of the Work and Budget plan
Company (RKAP);
b. The Board of Directors shall monitor and evaluate the implementation of
information technology master plan on a regular basis and every year to
know the success of the achievement of the implementation, results, and
objectives of the information technology master plan;
c. Deliver periodic monitoring and evaluation results that are part of the
BUMN Management Report at the GMS/Minister every quarter and
annual evaluation results;
d. Able to review and make changes to master information technology plans
that have been established if necessary to anticipate business changes and
developments in information technology;
e. Establish effective information technology governance;
f. Deliver periodic information governance reports to the Board of
Commissioners
g. Maintain and evaluate the quality of information technology governance
functions in the Company.
III.7.6 In Relation to Mining Business and Other Company’s Policies
In conducting the Company's business, in this case mining business, as well as
related to company policy in other field, conducted by Board of Directors, among
others are:
113
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concerning Guidelines for the Preparation of Technology Management of SOE Information
92
a. Establish and implement "Standard Operation Procedure" in the field of
mining technical in accordance with the rules of "Good Mining Practice"
and prevailing laws and regulations;
b. Conduct continuous exploration and valuation of reserves and mining
feasibility studies in accordance with international standards to safeguard
business continuity in the mining sector;
c. Develop and implement policies and publication mechanisms of the
Corporate Social Responsibility (CSR) program, Partnership and
Community Development Program (PKBL), Reclamation Program and
Post-Mining Program;
d. Ensure environmental management and Post Mining in accordance with
the provisions of applicable laws and regulations;
e. Arrange and implement procurement policies of goods and services in
accordance with provisions for state-owned companies;
f. Prepare the quality and service policies, and their implementation in the
Company.
III.7.7 In Relation to Human Resources
a. Prepare the organizational structure/structure of the Company complete
with details of tasks and Human Resources (HR);114
b. Develop and implement human resource management guidelines,
including HR planning system, recruitment, selection, placement,
promotion, mutation, and demotion, as well as position criteria in the
organizational structure of the Company;
c. Ensure the placement of Employees in accordance with the criteria of
positions in the organizational structure of the Company;
114 The Articles of Association of PT TIMAH (Persero) Tbk Article 18 Paragraph 2 Letter b Point
xi
93
d. Submit to the Board of Commissioners on promotional plans for the
positions of the Corporate Secretary and the Head of the Internal Audit
Unit;
e. Ensure the implementation of education and training to employees in
accordance with competence and position;
f. Implement the measurement and performance assessment of the Work
Unit and positions in the organizational structure of the Company in an
objective and transparent manner;
g. Implement employee benefits system, grant benefits and other facilities in
accordance with applicable provisions and submit to the Board of
Commissioners in a transparent manner on:
• Employee benefit system, grant allowance and other facilities;
• Pension systems and benefits;
• Systems and other benefits in the case of reduction of Employees
III.7.8 In Relation to the Business ethics and Anti-Corruption
a. Ensure that all members of the Board of Commissioners, Directors and
Officials one level below the Board of Directors have reported the assets
to the authorized Government Agency;
b. Socialize the gratuity control program in accordance with prevailing laws
and regulations;
c. Report and avoid any actions or relationships that may create a conflict of
interest;
d. Not abusing authority and position in various business activities of the
Company for personal or group interests;
e. Protect Company’s assets from unauthorized use;
94
f. Report indications or fraud occurring within the Company in accordance
with the Company's regulations;
g. Report immediately to the leader on the scope of work when being aware
of misuse of Company’s data, information and documents in accordance
with applicable regulations in the Company.
III.7.9 In Relation to the Internal Control System
a. Establish policies on effective Internal Control systems to secure the
Company's investments and assets;115
b. Provide feedback on the Internal Control System implemented by the
Company and conduct follow-up and monitoring of recommendations
provided by the Internal Audit Unit (SPI);
c. Internal Control System is a system that must be compiled/built by the
Board of Directors so as to be able to direct and guide subordinates in the
implementation of their duties to achieve the goals and objectives that
have been set, and able to prevent the occurrence of irregularities, leaks
and Company’s financial wastage, even able to prevent the occurrence of
Corruption, Collusion, and Nepotism (KKN);116
d. To ensure an effective internal control system, the President Director is
structurally assisted by all Structural Officials up to Head Section level;
e. Further description of the duties and functions of the SPI shall be set forth
in the Internal Audit Unit Charter established by the Decree of the Board
of Directors;
f. The Internal Control System includes the following:117
115 Regulation of the Minister of State-Owned Enterprises Number: PER-09/ MBU/2012
concerning Amendment to the Regulation of the Minister of State-Owned Enterprises No. PER-
01/MBU/2011 on the Implementation of Good Corporate Governance (GCG) on State-Owned
Enterprises Article 26 Paragraph 1 116 Law Number 20 of 2001 concerning the Eradication of Corruption 117
Regulation of the Minister of State-Owned Enterprises Number: PER-09/ MBU/2012
concerning Amendment to the Regulation of the Minister of State-Owned Enterprises No. PER-
95
1) The internal control environment within a disciplined and
structured Company consists of:
a) Integrity, ethical values and competence of employees;
b) Philosophy and style of management;
c) The way in which management undertakes to exercise
authority and responsibility;
d) Organizing and developing Human Resources;
e) Attention and direction made by the Board of Directors
2) Risk assessment and management, a process for identifying,
analyzing, assessing and managing relevant risks;
3) Control activities, that is an action taken in a process of control
over the Company's activities at each level and unit within the
Company's organizational structure, including competency,
authorization, verification, reconciliation, performance appraisal,
assignment and security of the Company's assets;
4) Information and communication system, that is a process of
presenting a report on operational, financial, and compliance with
the rules and regulations applicable to the Company;
5) Monitoring, that is a process of evaluating the quality of the
internal control system including the internal audit function at each
level and the unit of the Company, so that it can be implemented
optimally, provided that irregularities are reported to the Board of
Directors and copies are submitted to the Board of Commissioners.
g. Establish Standard Operating Procedures (SOPs) that support internal
control systems that are tailored to the needs of the Company.
01/MBU/2011 on the Implementation of Good Corporate Governance (GCG) on State-Owned
Enterprises Article 26 Paragraph 2
96
III.7.10 In Relation to Disclosure and Confidentiality of Information
a. Disclose the application of GCG principles in the Company and important
information in the Annual Report and Financial Statements, as well as
other information to other parties in accordance with applicable laws in
timely, accurate, clear, and objective manner;
b. Deliver information on identity, main occupation, position as Board of
Commissioners in subsidiaries/joint venture companies and/or other
companies, including meetings conducted within one fiscal year (internal
meetings or joint meetings with the Board of Commissioners), as well as
salaries, and/or other benefits received from the Company and its
subsidiaries/joint venture companies, to be published in the Company's
Annual Report;118
c. Confidential information obtained while serving as a member of the Board
of Directors of the Company shall remain confidential in accordance with
applicable laws and regulations;
d. In the case of maintaining the confidentiality of Company’s Information,
directors are required to prioritize the interests of the Company rather than
the interest of individual or group.
III.7.11 In Relation to Stakeholders
a. Ensure the guarantee of rights of the Stakeholders arising under applicable
laws and/or agreements made by the Company with other Employees,
Service Users, Suppliers and Stakeholders;
118
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concerning Amendment to the Regulation of the Minister of State-Owned Enterprises No. PER-
01/MBU/2011 on the Implementation of Good Corporate Governance (GCG) on State-Owned
Enterprises Article 19 Paragraph 3
97
b. Ensure that the Company's assets and business locations and other
facilities comply with laws and regulations concerning occupational health
and safety and environmental conservation;119
c. Provide a work environment that is free from all forms of pressure
(harassment) that may arise as a result of differences in character, personal
circumstances, and cultural background of a person.120
III.7.12 In Relation to Accounting and Bookkeeping System
a. Prepare Financial Statements based on Financial Accounting Standards
and submit to Public Accountants to be audited;121
b. Establish an accounting system in accordance with the Financial
Accounting Standards and under the principles of internal control,
especially the functions of handling, recording, storage, and supervision.
c. Responsible for the implementation of accounting policies and the
preparation of financial statements in accordance with generally accepted
accounting standards in Indonesia;
d. Conduct and maintain the Company's books and administration to produce
orderly bookkeeping, adequacy of working capital with efficient capital
cost, sound and robust balance sheet structure, timely and accurate
presentation of reports and financial analysis and other principles in
accordance with prevailing norms for the company.
III.7.13 In Relation to Other Tasks and Obligations
119
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concerning Amendment to the Regulation of the Minister of State-Owned Enterprises No. PER-
01/MBU/2011 on the Implementation of Good Corporate Governance (GCG) on State-Owned
Enterprises Article 36 120
Regulation of the Minister of State-Owned Enterprises Number: PER-09/ MBU/2012
concerning Amendment to the Regulation of the Minister of State-Owned Enterprises No. PER-
01/MBU/2011 on the Implementation of Good Corporate Governance (GCG) on State-Owned
Enterprises Article 36 121
The Articles of Association of PT TIMAH (Persero) Tbk Article 18 Paragraph 2 Letter b Point
v
98
Carry out other duties and obligations in accordance with the provisions stipulated
in the Company's Articles of Association or as determined by the General Meeting
of Shareholders and the prevailing laws and regulations.122
III.8 AUTHORITY OF THE BOARD OF DIRECTORS
III.8.1 General Policy
a. Establish policies in the management of the Company;123
b. In order to carry out the management of the Company, the President
Director shall have the right and authority to act for and on behalf of the
Board of Directors and to represent the Company with the stipulation that
all actions of the President Director shall be approved by the Meeting of
the Board of Directors;124
c. If the President Director is absent / or unable to attend due to any reason,
which is not necessary to be proven to a third party, then one of the
members of the Board of Directors appointed in writing by the President
Director shall be authorized to act for and on behalf of the Board of
Directors and perform the duties of the President Director;125
d. In the event that the President Director does not make an appointment, the
oldest member of the Board of Directors in office shall be authorized to act
for and on behalf of the Board of Directors and perform the duties of the
President Director;126
e. In the event that there is more than 1 (one) member of the oldest Board of
Directors in office, the oldest member of the Board of Directors in age
122
The Articles of Association of PT TIMAH (Persero) Tbk Article 18 Paragraph 2 Letter b Point
xii 123
The Articles of Association of PT TIMAH (Persero) Tbk Article 18 Paragraph 2 Letter a Point i 124 The Articles of Association of PT TIMAH (Persero) Tbk Article 18 Paragraph 15 125
The Articles of Association of PT TIMAH (Persero) Tbk Article 18 Paragraph 16 126
The Articles of Association of PT TIMAH (Persero) Tbk Article 18 Paragraph 17
99
shall be authorized to act for and on behalf of the Board of Directors to
perform the duties of the President Director;127
f. In the event that any member of the Board of Directors other than the
President Director is prevented for any reason whatsoever, which is no
need to be proven to any third party, then the other members of the Board
of Directors appoint one of the members of the Board of Directors to
perform the duties of the absent Members of the Board of Directors;128
g. All actions of the Board of Directors representing the President Director
may be confirmed in the Board of Directors' meeting;129
h. Arrange the submission of the power of the Board of Directors to represent
the Company within and outside the Court to a person or several Members
of the Board of Directors specifically appointed to it or to a person or
several Persons of the Company either individually or jointly or to
others;130
i. Arrange provisions on employment of the Company including the
determination of salaries, pensions or old-age benefits and other income
for Company’s Employees under applicable laws and regulations and
resolutions of the GMS;131
j. Appoint and dismiss Company’s Employees in accordance with Company
employment regulations and applicable laws and regulations;132
k. Appoint and dismiss Board of Commissioners and Board of Directors
whose financial statements are consolidated in the Company's Financial
Statements;
127
The Articles of Association of PT TIMAH (Persero) Tbk Article 18 Paragraph 18 128
The Articles of Association of PT TIMAH (Persero) Tbk Article 18 Paragraph 19 129 The Articles of Association of PT TIMAH (Persero) Tbk Article 18 Paragraph 20 130
The Articles of Association of PT TIMAH (Persero) Tbk Article 18 Paragraph 2 Letter a Point
ii 131
The Articles of Association of PT TIMAH (Persero) Tbk Article 18 Paragraph 2 Letter a Point
iii 132
The Articles of Association of PT TIMAH (Persero) Tbk Article 18 Paragraph 2 Letter a Point
iv
100
1) The Board of Directors shall establish an evaluation team for the
appointment of the Board of Directors and Board of
Commissioners of the Subsidiary;133
2) AGMS of Subsidiaries are organs of Subsidiaries holding all
powers not submitted to the Board of Directors of Subsidiaries or
the Board of Commissioners of Subsidiaries;
3) In principle, the supervision of the Subsidiary is exercised through
the placement of a company representative as a member of the
Board of Commissioners and the Board of Directors of a
Subsidiary.
l. Carry out any other actions and acts concerning the maintenance of the
Company or the ownership of the Company's property, binding on the
Company with other parties and/or other parties with the Company, and
representing the Company in and out of court on all matters and events,
with limitations as stipulated in Legislation, Articles of Association and/or
resolutions of the GMS;134
III.8.2 Actions of the Board of Directors which require prior written
approval from the Board of Commissioners135
a. Conduct equity participation in other companies;
Investments in other companies are the direct participation of the
Company in the ownership of shares in a limited liability company,
whether already established or to be established.
b. Establish a Subsidiary and/or Joint Venture Company;
133
Regulation of Minister of State-Owned Enterprises Number 03/MBU/2013 Chapter IV 134 The Articles of Association of PT TIMAH (Persero) Tbk Article 18 Paragraph 2 Letter a Point
v 135
The Articles of Association of PT TIMAH (Persero) Tbk Article 18 Paragraph 7
101
1) A Subsidiary is a Limited Liability Company whose majority of its
shares are owned by the Company and/or a limited liability
company controlled by the Company;136
2) Joint Ventures are business entities formed by 2 (two) or more
parties to carry out joint economic activities.
c. Relinquish equity participation in other Company, Subsidiaries and Joint
Venture Company;
Disposal can be done by selling, granting and exchanging. The disposal of
investments in Subsidiaries, other companies and joint ventures may
include:
1) The disposal of part or all of the ownership of the Company's
shares in a Subsidiary (with ownership interest above 50%);
2) The disposal of a portion or all of the Company's ownership
interest in the Affiliated Company (with ownership interest below
50%).
d. Do Merger, consolidation, acquisition, separation and dissolution of
Subsidiaries;
e. Conduct licensing agreements, management contracts, lease assets, joint
operations and other cooperation agreements that exceed certain values
established by the Board of Commissioners;
f. Cooperation of operations is a form of cooperation in which the assets or
all of the Company's related resources are left in whole or in part to the
other party to manage or operate a joint business activity under agreed
terms or agreements;
g. Bind the Company as a guarantor (borg or avalist) having a financial result
that exceeds a certain amount determined by the Board of Commissioners;
136
Regulation of the Minister of State-Owned Enterprises Number: PER-09/ MBU/2012
concerning Amendment to the Regulation of the Minister of State-Owned Enterprises No. PER-
01/MBU/2011 on the Implementation of Good Corporate Governance (GCG) on State-Owned
Enterprises Article 45 paragraph 3
102
h. Legal action taken by the Company to guarantee other companies lending
money to creditors or to perform other actions which principally are
requested financial guarantees from the company;
i. Receive medium/long term loans and provide medium/long term loans that
exceed a certain amount determined by the Board of Commissioners;
j. Medium term and long term loans are loans granted by the creditor, ie
bank, financial institutions, non-bank financial institutions, and firms for
investment over a period of more than 1 (one) year. The loan is provided
based on a separate loan agreement agreed by the Company and the
creditor. Providing medium and long term loans is a loan granted to other
parties for a period of more than 1 (one) year. The loan is subject to a
separate loan agreement agreed by the Company and the other party;
k. Release or pledge the Company's assets less than 50% (fifty percent) of the
Company's net worth in 1 (one) transaction or more, whether related to
each other or not;
l. Eliminate from the books of bad debts and inventories of dead goods
exceeding certain value determined by the Board of Commissioners;
1) Removal of receivables, inventories and other non-productive
assets is the write-off of receivables and inventories that exceed
certain amounts determined by the Board of Commissioners, from
the financial statements;
2) The limit on the amount of the waiver value is determined by the
Board of Commissioners in the Company's Work Plan and Budget.
m. Undertake actions not yet established in the Company's Budget Plan;
1) The Board of Directors may undertake actions not yet established
in the Company's Work Plan and Budget. Such action is deemed
essential in order to solve a problem that occurs and solely for the
benefit of the Company;
103
2) Actions taken outside the Company's Work Plan and Budget shall
seek the approval of the Board of Commissioners.
n. On this authority the Board of Directors shall continue to comply with the
provisions stipulated in the laws of the Capital Market, including:
1) Announcement of Information on material transactions that must
be submitted to the public and the completeness of supporting
documents that must be submitted to OJK;
2) Type of information:
3) In the event that the transaction is an affiliate transaction, the
information that needs to be added is:
a) The relationship and nature of the affiliated relationship of the
parties conducting material transactions with other Companies;
and
b) Explanation, consideration, and reason for the transaction, as
compared with other similar transactions not conducted with
affiliated parties.
4) In the event that the Material Transaction object is in the form
of buying or selling of shares of other companies or shares of
overseas open companies, the Company is only required to disclose
the information as regulated in Capital Market regulations.
III.8.3 Actions of the Board of Directors which require prior written
approval from the Board of Commissioners and approval from the GMS137
a. Do not collect bad debts that have been written off;
b. Conduct equity participation in another company that is a material
transaction for the Company, which is greater than 50% (fifty percent)
of the Company's equity;
137
The Articles of Association of PT TIMAH (Persero) Tbk Article 18 Paragraph 9, 10, and 11
104
c. Establish a subsidiary and/or joint venture that is a material
transaction for the Company, which is greater than 50% (fifty percent)
of the Company's equity;
d. Dismiss the equity participation in another company, a Subsidiary
and a joint venture that is a material transaction for the Company,
which is greater than 50% (fifty percent) of the Company's equity;
e. Merger, consolidation, acquisition, separation and dissolution of a
Subsidiary representing a material transaction for the Company, which
is greater than 50% (fifty percent) of the Company's equity;
f. Relinquish or pledge Company assets amounting to less than 50%
(fifty percent) of the Company's net worth in 1 (one) transaction or
more, whether related to each other or not, which is a material
transaction for the Company, which is of greater value From 50%
(fifty percent) of the Company's equity;
g. Transfer the Company's property which is more than 50% (fifty
percent) of the Company's net worth in 1 (one) or more transactions,
whether related to each other or not, occurring within 1 (one) financial
year;
h. In performing the above mentioned transactions must comply with
the principles of openness regulated by OJK and meet the
completeness of the documents. Documents that must be met at least
are (More detailed explanation as attached to the procedure):
1) Application Letter for a transaction;
2) Proposals include risk analysis, law, and benefits;
3) Independent stakeholder review (if any), Performance Report and
other company’s legality if the company engages in participation,
cooperation, and/or loan.
105
III.8.4 The authority to carry out other actions
The Board of Directors is authorized to perform other actions, within the scope of
the Company's interests and business, in compliance with applicable laws and
regulations.
III.9 RIGHTS OF THE BOARD OF DIRECTORS
a. For certain acts of its own responsibility, the Board of Directors
shall be entitled to appoint one or more as its representative or proxy, by
granting to them the authority for such certain act as governed by a power
of attorney;138
b. The members of the Board of Directors shall be paid salaries and
other facilities and benefits, including post-employment benefits summed
up by the GMS and such authority by the GMS may be delegated to the
Board of Commissioners;139
c. If the Company reaches a profit level, then the Board of Directors
may receive incentives in return for work performance of the amount
stipulated by the GMS;
d. Use the Company's facilities for activities related to the Company's
interests, in accordance with the laws and regulations of the Company;
e. Conduct activities outside the Company that are indirectly related
to the Company's interests, such as teaching activities, becoming
associates of business associates and the like, as long as using reasonable
time and under the knowledge of the President Director or other Members
of the Board of Directors;
f. Obtain leave in accordance with applicable provisions;
g. Obtain a copy of the minutes of the Meeting of the Board of
Directors, whether or not present at the meeting of the Board of Directors.
138
The Articles of Association of PT TIMAH (Persero) Tbk Article 18 Paragraph 21 139
The Articles of Association of PT TIMAH (Persero) Tbk Article 17 Paragraph 14
106
III.10 MEETING OF THE BOARD OF DIRECTORS
III.10.1 General Policy
a. Board of Directors Meetings are meetings held by the Board of
Directors;
b. Meetings of the Board of Directors shall be held periodically, at
least 1 (one) time per month, and in such meetings the Board of Directors
may invite the Board of Commissioners;140
c. The Board of Directors may hold a meeting outside of the schedule
when:141
1) It is deemed necessary by one or more Members of the Board of
Directors.
2) Upon a written request from the Board of Commissioners.
3) Upon a written request of 1 (one) or more shareholders jointly
representing 1/10 (one ten) or more of the total number of shares with
valid voting rights.
d. Summoning of the Meeting of the Board of Directors shall include
the date, time, event and place of the Meeting;142
e. The summons of the Board of Directors' Meeting shall be in
writing by a member of the Board of Directors entitled to represent the
Company and delivered within 7 (seven) days prior to the meeting or
within a shorter period of 3 (three) days under urgent circumstances,
excluding the date of the call and date of the meeting;143
140 Regulation of the Minister of State-Owned Enterprises Number: PER-09/ MBU/2012
concerning Amendment to the Regulation of the Minister of State-Owned Enterprises No. PER-
01/MBU/2011 on the Implementation of Good Corporate Governance (GCG) on State-Owned
Enterprises Article 24 paragraph 1 141 The Articles of Association of PT TIMAH (Persero) Tbk Article 19 Paragraph 3 142
The Articles of Association of PT TIMAH (Persero) Tbk Article 19 Paragraph 7 143
The Articles of Association of PT TIMAH (Persero) Tbk Article 19 Paragraph 6
107
f. A summons of the Board of Directors' meeting may also be made
using the Company's communications media;
g. The meeting of the Board of Directors shall be deemed valid if held
at the place of domicile of the Company or at its principal place of
business activity within the territory of the Republic of Indonesia. If the
meeting of the Board of Directors is held elsewhere, may be considered
valid and may take a decision if it is exercised within the territory of the
Republic of Indonesia and is attended and/or represented by all members
of the Board of Directors or its authorized representative;144
h. Meetings of the Board of Directors may be held by way of
teleconferencing among Members of the Board of Directors residing in
different places, by conference call, video conference or other
communication equipment which enable each Member of the Board of
Directors to hear/communicate and participate in the Meeting;
i. Prior to the Meeting, the Corporate Secretary shall first circulate
the agenda of the meeting to obtain input from the members of the Board
of Directors on the agenda. These inputs may include addition/subtraction
or sharpening of the meeting agenda;
j. Each member of the Board of Directors shall have the right to
propose the agenda of the meeting to be held;
k. Members of the Board of Directors are allowed to have a different
opinion although the overall number of votes that agree is more. In such
case the different opinions should be recorded in the Minutes of Meeting
as a form of dissenting opinion;
l. The meeting material is prepared by the Corporate Secretary.
Meeting material can be delivered simultaneously with the delivery of the
invitation.
144
The Articles of Association of PT TIMAH (Persero) Tbk Article 19 Paragraph 4 and 5
108
III.10.2 Procedure of Board of Directors Meeting
a. The Corporate Secretary receives the
materials/documents/management reports from the Board of Directors.
The materials/documents/management reports will be used as Board of
Directors' meeting materials. These materials include: Company’s
Monthly Report, Company’s Quarterly Report, and Company’s Annual
Report and other reports;
b. The Corporate Secretary archives the materials/reports/documents
received in accordance with existing letter administration procedures;
c. The Corporate Secretary submits the materials/documents/reports
to the President Director;
d. The President Director reviews the materials/documents/reports
and provides direction to the Corporate Secretary for a follow-up;
e. If such directions are to be followed up by the Meeting, the
Corporate Secretary shall immediately prepare the agenda of the Meeting;
f. The Corporate Secretary circulates the agenda of the meeting and
the materials/documents/reports to be discussed in the meeting to the
Members of the Board of Directors to obtain the inputs on the agenda;
g. Members of the Board of Directors receive, read and study the
meeting agenda along with the materials/documents/reports. Upon
completion, the agenda of the meeting shall be sent back to the Corporate
Secretary together with the inputs from the members of the Board of
Directors concerned and affix the initial or signature as a token to approve
the agenda of the meeting;
h. The Corporate Secretary makes a meeting invitation after receiving
input from members of the Board of Directors;
i. In the letter of invitation, the Corporate Secretary develops points
of issue to be discussed in the meeting;
109
j. If the meeting invites another party, the Corporate Secretary is
responsible for creating an invitation letter to the party concerned. In the
event that such other party is from Management, that is, an officer of 1
(one) level and/or 2 (two) levels below the Board of Directors, such
purpose must be in the knowledge of the relevant Board of Directors;
k. Meeting participants receive invitations and meeting materials;
l. In the event that the Board of Directors Meeting is held by way of
teleconference, the following provisions shall apply:
1) Each participating member of the Board of Directors shall be
deemed present at the Meeting to determine the fulfillment of the
attendance quorum requirement and the decision of the Board of
Directors Meeting;
2) The place where the Chairman of the Meeting will take part shall
be regarded as the venue of the Meeting of the Board of Directors;
3) Minutes of Meeting shall be submitted and signed by all Members
of the Board of Directors whether or not participating in the
Meeting.
III.10.3 Mechanism of Meetings Attendance
a. The meeting of the Board of Directors is valid and entitled to take a
valid and binding decision, if more than 1/2 (one per two) the number of
members of the Board of Directors is present or legally represented in the
meeting;145
b. In other items of events, the Meeting of the Board of Directors
shall not be entitled to take decisions unless all the Members of the Board
of Directors or their authorized representatives present and approve the
145
The Articles of Association of PT TIMAH (Persero) Tbk Article 19 Paragraph 9
110
addition of the agenda of the Meeting and approve the agenda of the
Meeting;146
c. A Member of the Board of Directors may be represented in a
Meeting of the Board of Directors only by other members of the Board of
Directors by virtue of a power of attorney given specifically for that
purpose147
, where such power of attorney may be communicated by
facsimile, email or other electronic means of communications (if delivered
by facsimile, email or communication means of other electronics followed
by originals or certified copies as originally sent as evidenced by receipt or
by internationally recognized mail or courier as soon as possible);
d. All BoD meetings are chaired by the President Director and in the
event that the President Director is absent, then one of the Directors
appointed in writing by the President Director presiding over the Board of
Directors' Meeting;148
e. In the event that the President Director does not make an
appointment, then one of the longest Director in the position as a Member
of the Board of Directors presiding over the Board of Directors Meeting
and if the longest serving as a member of the Board of Directors is more
than 1 (one) person, the oldest Director in age acts as the chaiperson of the
Meetings of the Board of Directors.149
III.10.4 Process of Problem Discussion and Decision Making
a. Prior to the discussion of the agenda of the Meeting, the
Chairperson of the Meeting shall at first explain the disciplinary
procedures of the Meeting, including the use of communication tools in
the Meeting, question and answer mechanisms, and voting mechanisms (if
there is voting);
146
The Articles of Association of PT TIMAH (Persero) Tbk Article 19 Paragraph 10 147 The Articles of Association of PT TIMAH (Persero) Tbk Article 19 Paragraph 15 and 16 148
The Articles of Association of PT TIMAH (Persero) Tbk Article 19 Paragraph 12 149
The Articles of Association of PT TIMAH (Persero) Tbk Article 19 Paragraph 13 and 14
111
b. All decisions of the Board of Directors' meeting shall be in good
faith, rational considerations and have been thoroughly investigated into
relevant matters, sufficient and free from conflict of interest and
independently created by each Director;
c. The decision of the Meeting of the Board of Directors shall be
taken by deliberation for consensus. In the case of a decision based on
deliberations for consensus is not reached then the decision is taken with
the most ordinary votes;150
d. If the number of votes agreeing and disagreeing is the same, then
the decision of the meeting shall be in accordance with the opinion of the
Chairman of the Meeting with due observance of the provisions
concerning liability, except for the person, then the decision of the meeting
shall be conducted by a closed vote;151
e. To maintain independence and objectivity, any member of the
Board of Directors with a conflict of interest in a transaction, contract or
proposed contract, in which the Company is a party, the Board of
Directors concerned is required to disclose the conflict of interest and not
participate in voting for decision making. Disclosure of such conflict of
interest should be recorded in the minutes of the meeting;
f. Each Members of the Board of Directors present shall be entitled to
issue 1 (one) vote and 1 (one) additional vote for each member of the other
Board of Directors represented;152
g. The voting of a person shall be conducted by a closed ballot
without any signature, whereas voting on other matters shall be oral unless
the Chaiperson of the Meeting of the Board of Directors determines
otherwise without any objection based on the majority vote of those
present;
150 The Articles of Association of PT TIMAH (Persero) Tbk Article 19 Paragraph 17 and 18 151
The Articles of Association of PT TIMAH (Persero) Tbk Article 19 Paragraph 20 152
The Articles of Association of PT TIMAH (Persero) Tbk Article 19 Paragraph 19
112
h. In the case of the proposal of more than 2 (two) alternatives and the
result of the vote acquisition has not received 1 (one) alternative with a
vote of more than 1/2 (one per two) of the total votes cast, re-election is
made for the 2 alternatives proposed that obtain the most votes so that one
of the proposed alternative can receive vote more than 1/2 (one per two)
part of the number of votes issued;153
i. Blank votes and unauthorized votes are deemed not to be issued
legally and are considered non-existent, and not counted in determining
the number of votes cast;
j. The Board of Directors may also take a lawful decision without
holding a Meeting provided that all members of the Board of Directors
have been notified in writing of the proposed decision and all members of
the Board of Directors have consented by signing the proposal. The
decisions taken in such manner shall have the same power as those
adopted by law in the Meeting of the Board of Directors;
k. Decisions concerning strategic aspects should be made through the
mechanism of the Board of Directors Meeting. These strategic aspects
include all acts of the Board of Directors which must be approved by the
GMS after obtaining a written recommendation from the Board of
Commissioners as well as all actions of the Board of Directors which must
obtain written approval from the Board of Commissioners.
III.10.5 Minutes of Board of Directors' Meeting
a. The minutes of the Meeting of the Board of Directors shall be made
for each Meeting of the Board of Directors containing everything
discussed or decided in the meeting, including but not limited to the
opinions expressed in the meeting, either supportive or non-supporting or
153
The Articles of Association of PT TIMAH (Persero) Tbk Article 19 Paragraph 21
113
dissenting opinion, Reasons for the absence of members of the Board of
Directors, if any;154
b. The minutes of the Meeting should illustrate the course of the
meeting. It is important to be able to see the decision-making process and
at the same time become a legal document and legal evidence to determine
the accountability of the outcome of a meeting decision. Therefore, the
Minutes of Meeting shall include:
1) Place, date, and time of the meeting is held;
2) The agenda discussed;
3) Attendance list signed by each meeting participant;
4) The duration of the meeting takes place;
5) Implementation of follow up evaluation of previous meeting result
(if any);
6) Opinions in meetings;
7) Who expresses an opinion;
8) Decision-making process;
9) Decisions taken;
10) Statement of objection to the decision of the meeting if there is no
unanimity.
c. The minutes of the Meeting of the Board of Directors shall be made
by the Secretary of the Company or a person present at the meeting (if the
meeting is only attended by the Board of Directors) appointed by the
Chairman of the Meeting and shall then be signed by the Chairman of the
Meeting and all other Members of the Board of Directors present and
appointed to it by the Meeting to ascertain the completeness and
154
Regulation of the Minister of State-Owned Enterprises Number: PER-09/ MBU/2012
concerning Amendment to the Regulation of the Minister of State-Owned Enterprises No. PER-
01/MBU/2011 on the Implementation of Good Corporate Governance (GCG) on State-Owned
Enterprises Article 24 paragraph 3
114
correctness of the minute of the meeting. If the minute of the meeting is
made by a Notary, such signing is not required;
d. Minutes of Meeting shall be accompanied by a special power of
attorney given by a member of the Board of Directors who is not present
to the other Director (if any);
e. Each member of the Board of Directors shall be entitled to receive
a copy of the minutes of the Meeting of the Board of Directors, whether or
not present at the Meeting of the Board of Directors;155
f. One copy of the Minutes of Meeting of the Board of Directors to be
submitted to the Board of Commissioners to be known156
after the revision
is made by the Board of Directors;
g. The minutes of the Board of Directors' Meeting must be submitted
to the Board of Directors no later than 3 (three) days after the meeting;
h. Within no later than 4 (four) days from the date of delivery of the
minutes of the meeting, each member of the Board of Directors present
and/or represented in the Meeting of the Board of Directors shall submit
their approval or objection and/or its proposed revision, if any, to what is
contained in the Minutes Board of Directors' Meeting to the Chairman of
the Board of Directors Meeting;
i. If an objection or proposed revision is not received within that time
period, it is concluded that there is no objection and/or correction and is
deemed to have agreed to the Minutes of the Board of Directors concerned
and copies of the minutes of the meeting shall be submitted to all
Members of the Board of Directors;
155
Regulation of the Minister of State-Owned Enterprises Number: PER-09/ MBU/2012
concerning Amendment to the Regulation of the Minister of State-Owned Enterprises No. PER-
01/MBU/2011 on the Implementation of Good Corporate Governance (GCG) on State-Owned
Enterprises Article 24 paragraph 4
156
The Articles of Association of PT TIMAH (Persero) Tbk Article 19 Paragraph 2
115
j. The original Board of Directors' Meeting shall be submitted to the
Board of Directors to be archived and maintained as Company’s
documents.
III.11 PERFORMANCE EVALUATION OF DIRECTORS
III.11.1 General Policy
The performance of the Board of Directors and Members of the Board of
Directors is evaluated by the Board of Commissioners and submitted to
shareholders in the GMS as an evaluation of the performance of the Board of
Directors. In general, the performance of the Board of Directors is determined
based on the duties and obligations contained in the prevailing laws and
regulations and the Company's Articles of Association as well as the Shareholder's
mandate in the form of Key Performance Indicator (KPI). The formal evaluation
criteria shall be submitted openly to the Board of Directors from the date of their
appointment.
The results of the evaluation on the performance of the Board of Directors as a
whole and the performance of each individual Board of Directors shall be an
integral part of the compensation scheme and incentives for the Members of the
Board of Directors.
The performance evaluation results of each individual Member of the Board of
Directors shall be a basis for consideration, especially for the Series A Dwiwarna
Shareholder for dismissal and/or re-appointing the members of the Board of
Directors concerned. The result of performance evaluation is a means of
assessment and improvement of the effectiveness of the Board of Directors.
III.11.1 Performance Evaluation Criteria of the Board of Directors
The performance evaluation criteria for the Board of Directors are stipulated in
the GMS based on the KPI. In addition, the performance criteria for the Board of
Directors are also conducted individually submitted by the Nomination and
116
Remuneration Committee (if established) or by the Board of Commissioners to be
stipulated in the GMS, which shall at least include the following:
a. Preparation of KPI at the beginning of the year and evaluation of its
achievements;
b. Attendance at the Board of Directors Meeting or meeting with the
Board of Commissioners;
c. Contributions to the Company's business activities;
d. Engagement in certain assignments;
e. Commitment to advance the interests of the Company;
f. Compliance to applicable laws and regulations as well as
Company’s policies;
g. Achieving the Company's target as stated in RKAP and Contract
Management.
III.12 SUPPORTING ORGANS OF BOARD OF DIRECTORS
III.12.1 Corporate Secretary
a. The main functions of the Corporate Secretary for the Company are
as follows:
1) Follow the development of the Capital Market, in particular the
regulations applicable in the Capital Market;157
2) Provide input to the Board of Directors to comply with the
provisions of Law Number 8 of 1995 concerning Capital Market
and its rules of consent;158
157
Regulation of Bapepam IX.I.4 concerning the Establishment of Corporate Secretary Number 1
Letter a 158
Regulation of Bapepam IX.I.4 concerning the Establishment of Corporate Secretary Number 1
Letter c
117
3) Ensure that the Company complies with the rules on disclosure
requirements in line with the application of GCG principles;159
4) Provide services to the public for any information required by
investor (investor relations) related to the condition of the
Company;160
5) Provide services to the public on any information required by
Stakeholders (Public Relations) relating to the condition of the
Company;
6) As a liaison officer or contact person between the Company and
OJK and the public;
7) The function of Corporate Secretary may be executed by the
member of the Company's Board of Directors.161
b. The duties of the Corporate Secretary are as follows:
1) Attend meetings of the Board of Directors and make minutes of
meetings;
2) Responsible for the holding of the GMS;
3) Prepare the necessary materials in relation to the reports/routine
activities of the Board of Directors to be presented to outside
parties;
4) Prepare the necessary materials/materials in relation to matters that
must be resolved by the Board of Directors regarding the
management of the Company;
5) Organize meetings within the Board of Directors;
159
Regulation of the Minister of State-Owned Enterprises Number: PER-09/ MBU/2012
concerning Amendment to the Regulation of the Minister of State-Owned Enterprises No. PER-
01/MBU/2011 on the Implementation of Good Corporate Governance (GCG) on State-Owned
Enterprises Article 29 Paragraph 4 Letter a 160
Regulation of Bapepam IX.I.4 concerning the Establishment of Corporate Secretary Number 1
Letter b 161
Regulation of Bapepam IX.I.4 concerning the Establishment of Corporate Secretary Number 1
Letter e
118
6) Follow up any decision of the Board of Directors by recording any
decisions made in the decision-making forums and its responsible
persons and monitoring as well as checking the progress of the
implementation of the outcome of the meeting;
7) Conduct activities in the secretarial field within the Board of
Directors and its administration including but not limited to the
List of Shareholders, Special List and minutes of Board of
Directors meetings, minutes of Board of Commissioners meetings,
minutes of meetings of the Board of Directors and Board of
Commissioners and minutes of the GMS;
8) Update the Special Register at least once every 1 (one) year;
9) Carry out socialization of the Company's strategic policies to the
Company's internal and external parties;
10) Conduct an introduction program for the new BoC and BoD and
document it;
11) Create a culture of compliance with regulations that apply to the
Company;
12) Provide Risk Management Plan (RPR) and implement risk aversion
to the impact of the Company's communication with Stakeholders;
13) Coordinate with the responsible GCG implementation related to
GCG socialization programs;
14) Achievement of Key Performance Indicators in accordance with
their areas and responsibilities.
c. The Corporate Secretary may obtain delegation from the Board of
Directors as follows:
1) Establish system and procedure of decision making by Corporate
Leaders, in order to support the determination of Company’s
policies;
119
2) Establish a communication system with capital market and
Corporate Stakeholder, both internal and external, in order to
provide transparent information services regarding the Company;
3) Establish effective methodologies and communication systems with
the Company's internal and external environment, in order to
socialize corporate-level strategic policies and to build and enhance
the Company's positive image in the community;
4) Implement strategic communications with Stakeholders on behalf
of the Board of Directors, in the context of socializing the
Company's strategic policies;
5) Define the methodology and planning system, the Company's
administrative control as well as the activities of the Company’s
Leader protocol;
6) Determine the system of control and management of the
Company's administrative documents, in order to ensure the
orderly administration and security of Company’s documents;
7) Stipulate the schedule of meetings of the Board of Directors, Board
of Commissioners Meeting with the Board of Directors, and
AGMS (Annual and Extraordinary), in order to smooth the
activities of the Company's organs;
8) Establishes risk aversion to the impact of the Company's
communication activities with Stakeholders, in order to minimize
the risk of decreasing the Company's image due to errors in
information flow related to the Company's activities;
9) Establish socialization programs for the implementation of GCG in
the Company;
10) Establish a working unit performance control pattern, in order to
achieve the target of the work unit;
120
11) Establish disciplinary sanctions/penalties against employees who
violate discipline in accordance with applicable regulations, in
order to enforce the Company regulations.
III.12.2 Internal Control Unit (ICU)
The Board of Directors shall establish an internal control. The Internal Control as
required by establishing Internal Control Unit (ICU) and making an Internal
Control Charter. The Internal Control Unit is led by a head who is appointed and
dismissed by the President Director based on the Company's internal mechanisms
with the approval of the Board of Commissioners.162
a. Internal Control functions are:163
1) Evaluation of the effectiveness of the implementation of internal
controls, risk management, and corporate governance processes, in
accordance with the laws and regulations of the Company;
2) Examination and assessment of efficiency and effectiveness in
finance, operations, human resources, information technology, and
other activities.
b. Duties and responsibilities of ICU
ICU has duties and responsibilities, among others:
1) Assist the Board of Directors, by monitoring the adequacy and
effectiveness of the management control system, confirm that
identified risks have been mitigated through risk management, and
conduct internal control effectively and consistently;
162
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concerning Amendment to the Regulation of the Minister of State-Owned Enterprises No. PER-
01/MBU/2011 on the Implementation of Good Corporate Governance (GCG) on State-Owned
Enterprises Article 28 Paragraph 3 163
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concerning Amendment to the Regulation of the Minister of State-Owned Enterprises No. PER-
01/MBU/2011 on the Implementation of Good Corporate Governance (GCG) on State-Owned
Enterprises Article 28 Paragraph 4
121
2) Coordinate and provide input to relevant Working Units to ensure
the realization of GCG primarily by encouraging organizational
effectiveness, the effectiveness of management control processes,
the effectiveness of risk management, the effectiveness of the
implementation of business ethics and the effectiveness of
achieving targets;
3) Deliver audit report result related to financial control process and
operational management control;
4) Coordinate with external control institutions in relation to
supervisory duties in the Company.
122
CHAPTER IV
THE ACTIVITIES AMONG THE ORGAN OF THE COMPANY
IV.1 THE BASIC PRINCIPLES OF THE WORKING RELATIONSHIP
BETWEEN THE BOARD OF COMMISSIONERS AND THE BOARD OF
DIRECTORS
A good working relationship between the Board of Commissioners and the Board
of Directors is one of the most important things, so that each organ of the
Company can work in accordance with its function effectively and efficiently.
Therefore, in maintaining a good working relationship between the Board of
Commissioners and the Board of Directors, the Company applies the following
principles:
a. The Board of Commissioners respects the functions and roles of the
Board of Directors in managing the Company as regulated in the laws and
regulations of the Company's Articles of Association;
b. The Board of Directors respects the function and role of the Board
of Commissioners to conduct supervision and advice to the Board of
Directors on the Company's management policy;
c. In the event that the correspondence between the Board of
Directors and the Board of Commissioners should explain the aim and
purpose of the letter;
d. Each working relationship between the Board of Commissioners
and the Board of Directors is a formal relationship, in the sense that it
must always be based on a standard mechanism or correspondence that can
be accounted for;
e. Any informal working relationship may be exercised by each
member of the Board of Commissioners and Board of Directors, but can
123
not be used as a formal policy prior to the mechanism or correspondence
that can be accounted for;
f. Each working relationship between the Board of Commissioners
and the Board of Directors is an institutional relationship in the sense that
the Board of Commissioners and the Board of Directors serve as collective
positions representing all its members so that every working relationship
between the Board of Commissioners and the Board of Directors must be
known by the Members of the Board of Commissioners and other
Members of the Board of Directors.
IV.2 JOINT MEETING OF THE BOARD OF DIRECTORS AND BOARD
OF COMMISSIONERS
IV.2.1 General Policy
a. A Joint Meeting of the Board of Directors and the Board of
Commissioners is a Board of Directors' Meeting with the Board of
Commissioners as a form of coordination and consultation in order to
discuss periodic reports of the Board of Directors and discusses the
conditions and business prospects and national/regional policies that
impact on the Company's performance and provide responses, notes and
advice or a decision put forth in Minute of the Meeting;
b. A Joint Meeting of the Board of Directors and Board of
Commissioners are attended by Members of the Board of Commissioners,
Members of the Board of Directors, Secretary of the Board of
Commissioners, Corporate Secretary or other officers assigned by the
President Commissioner/President Director and may invite speakers from
within or outside the Company, except for special meetings, only attended
by Members of the Board of Commissioners and Members of the Board of
Directors;
c. A Joint Meeting of Directors and Board of Commissioners is held
at least once in 3 (three) months.
124
IV.2.2 Meeting Procedures
a. All Joint Meetings of the Board of Directors and Board of
Commissioners are chaired by the President Commissioner. In the event
that the President Commissioner is absent, the meeting shall be chaired by
another member of the Board of Commissioners appointed by the
President Commissioner with a written power of attorney;
b. In the event that the President Commissioner does not make an
assignment, the longest member of the Board of Commissioners shall act
as the Chair of the Meeting. In the event that the longest member of the
Board of Commissioners is more than 1 (one) person, then the oldest
Member of the Board of Commissioners acts as the Chair of the Meeting;
c. The agenda of the Meeting is determined by the Board of
Commissioners and may also be based on the proposal of the Board of
Directors;
d. The summon of the Joint Meetings of the Board of Directors and
Board of Commissioners shall include the date, time, event, and place of
the Meeting;
e. The summon of the joint meetings of the Board of Directors and
the Board of Commissioners shall be made in writing by the President
Commissioner or by a member of the Board of Commissioners appointed
by the President Commissioner and delivered by the Secretary of the
Board of Commissioners within 7 (seven) days prior to the meeting or
within a shorter 3 (three) days in urgent circumstances, without taking into
account the date of the call and the date of the meeting;
f. Joint Meetings of the Board of Commissioners and the Board of
Directors may be held on the basis of the Board of Directors' proposals
with due diligence by the Board of Commissioners;
125
g. The Meeting Material is prepared by the Secretary of the Board of
Commissioners and submitted at least 1 (one) day before the meeting. The
submission of the meeting material together with the timing of the meeting
shall be possible only if approved by the Chairman of the Joint Meeting of
the Board of Directors and Board of Commissioners;
h. A Member of the Board of Commissioners may only be
represented by other Members of the Board of Commissioners by virtue of
a power of attorney and a Member of the Board of Directors may only be
represented by other Members of the Board of Directors by virtue of a
power of attorney.
IV.2.3 Attendance Mechanism and Legality of the Meeting
a. Joint Meetings of the Board of Directors and Board of
Commissioners are valid and entitled to take binding decisions if more
than 1/2 (one half) of the total number of Members of the Board of
Commissioners or representing legally present at the Joint Meeting of the
Board of Directors and Board of Commissioners;
b. In the items of other events, the Joint Meeting of the Board of
Directors and the Board of Commissioners shall not be entitled to take a
decision unless all members of the Board of Commissioners or those
representing are legally present and approve the addition of the agenda of
the Meeting.
IV.2.4 Procedures of Problem Discussion and Decision Making
a. Prior to the discussion of the meeting agenda, the Chairman of the
Meeting shall first discuss the disciplinary procedures of the meeting,
including the use of communication tools in the meeting, question and
answer mechanisms, voting mechanisms (if there is voting) and evaluate
the results of the previous meeting (if any);
126
b. All discussions in the Joint Meeting of the Board of Directors and
Board of Commissioners shall be in good faith, rational considerations and
have been thoroughly investigated into relevant matters, accurate,
adequate and free from conflict of interest and submitted independently by
each Member of the Board of Commissioners and Members Board of
Directors;
c. The joint meetings of the Board of Directors and the Board of
Commissioners are mechanisms for monitoring the Company's
performance and discussing the current situation that may affect the
Company's operational activities, and may also serve as
input/consideration for the Board of Commissioners and the Board of
Directors to take action within their respective jurisdictions;
d. Decisions made in the Joint Meeting of the Board of Directors and
Board of Commissioners are the decisions of the Board of Commissioners
and followed up by a Decision Letter of the Board of Commissioners;
e. The Board of Directors may follow up the decisions of the Joint
Meeting of the Board of Directors and the Board of Commissioners after
the Minutes of Joint Meeting of the Board of Directors and Board of
Commissioners signed or have been issued the Decision Letter of the
Board of Commissioners;
f. Decisions concerning strategic aspects should be maintained
through the Board of Commissioners Meeting mechanism. These strategic
aspects include, among other things, the conduct of the Board of Directors
which shall obtain the approval of the GMS after obtaining a written
recommendation from the Board of Commissioners and all the actions of
the Board of Directors which must obtain the approval of the Board of
Commissioners;
g. The results of the Joint Meetings of the Board of Directors and the
Board of Commissioners may also be the basis/consideration of the
decision making which is the authority of the Board of Directors.
127
IV.2.5 Minutes of Meetings
a. The Secretary of the Board of Commissioners or other officers
appointed by the Chair of the Meeting shall be responsible for the creation
and administration and distribution of the Minutes of the Joint Meeting of
the Board of Commissioners and the Board of Directors;
b. In the event that the Joint Meeting of the Board of Commissioners
and the Board of Directors is attended only by the members of the Board
of Commissioners and the Board of Directors, the Minutes of Meeting
shall be made by one of the appointed members of the Board of
Commissioners or Members of the Board of Directors of those present;
c. The Minutes of the Joint Meeting of the Board of Commissioners
and the Board of Directors shall be signed by all Members of the Board of
Commissioners and Board of Directors present at the Meeting;
d. The Minutes of the Joint Meeting of the Board of Commissioners
and the Board of Directors shall describe the course of the Meeting. It is
important to be able to see the decision-making process and at the same
time become a legal document and legal evidence to determine the
accountability of the outcome of a meeting decision;
Therefore, the Minutes of Meeting shall include:
1) Place, date and time of the meeting;
2) The agenda discussed;
3) Attendance list signed by each meeting participant;
4) The duration of the meeting takes place;
5) Implementation of follow up evaluation of previous meeting result
(if any);
6) Opinions in meetings;
128
7) Who expresses an opinion;
8) Decision-making process;
9) Decisions taken;
10) Statement of objection to the meeting decision if there is no
unanimity.
e. Each member of the Board of Commissioners and Members of the
Board of Directors shall be entitled to receive a copy of the Minutes of the
Joint Meeting of the Board of Commissioners and the Board of Directors,
even though the person concerned is not present at the meeting;
f. Draft Minutes of the Joint Meeting of the Board of Commissioners
and the Board of Directors shall be submitted to Members of the Board of
Commissioners and Board of Directors no later than 7 (seven) days after
the meeting;
g. Each member of the Board of Commissioners and the Board of
Directors present and/or represented in the Joint Meeting of the Board of
Commissioners and the Board of Directors shall submit their approval or
objection and/or their proposed revision, if any:
h. The minutes of the Meeting of the Board of Commissioners shall
be signed no later than 14 (fourteen) days after the meeting, then the
original Minutes of Meeting shall be submitted to the Board of Directors
to be kept and maintained as Company documents, while the Board of
Commissioners shall keep the copies thereof;
i. The Minutes of the Joint Meeting of the Board of Commissioners
and the Board of Directors shall be signed no later than 14 (fourteen) days
after the Meeting is held, the original Minutes of Meeting shall be properly
administered and shall be maintained as the Company documents by the
Board of Directors or Corporate Secretary and the copies are kept by the
Secretary of the Board of Commissioners . The minutes of the Meeting
shall always be available when necessary.
129
Attachment I
THE STATEMENT OF ACTING INDEPENDENTLY
IN OPERATIONAL OVERSIGHT OF PT TIMAH (PERSERO) TBK
In order to apply Good Corporate Governance (GCG) consistently and
continuously as well as compliance with applicable laws and regulations as stated
in:
1. Law of the Republic of Indonesia Number 40 Year 2007
concerning Limited Liability Company;
2. Law of the Republic of Indonesia Number 19 Year 2002
concerning State-Owned Enterprises;
3. Regulation of the Minister of State-Owned Enterprises No. PER-
09/MBU/2012 on the amendment to the Regulation of the Minister of
State-Owned Enterprises No. PER-01/MBU/2011 on the Implementation
of Good Corporate Governance (GCG) in SOEs;
4. Bapepam and LK Regulation Number IX.E.1 concerning Affiliated
Transactions and Conflicts of Interest on Certain Transactions, attachment
of Decision of the Chairman of Bapepam and LK Number: Kep-
412/BL/2009 dated November 25, 2009;
5. PT TIMAH (Persero) Tbk Articles of Association as amended and
lastly amended by Deed of Amendment Number 75 dated 26 June of 2014,
made by Notary Fathiah Helmi Law Graduate and authorized by the
Minister of Justice and Human Rights No.: AHU-0064462.40. 80.2014;
6. Code of Corporate Governance at PT TIMAH (Persero) Tbk and
the Working Manual of Board of Commissioners and Board of Directors
(Board Manual) of the Company.
130
It is hereby stated that I:
Name:
Position:
Appointment based on GMS Number [...] and date [...] about [...]
1. Shares Ownership
Has no shares including family in PT TIMAH (Persero) Tbk
Own shares including family at PT TIMAH (Persero) Tbk
Has no shares including family outside PT TIMAH (Persero) Tbk
Own shares including family outside PT TIMAH (Persero) Tbk
2. Family Relationship
Not having a blood relation up to 3rd (3rd) degrees, either by linear or
sideline, including relationships arising out of marriage with other members
of the Board of Commissioners or with the Board of Directors
Having a blood relation up to third (3) level, either by linear or by line,
including relationships that arise due to marriage with other members of
Board of Commissioners or with the Board of Directors, namely:
Name of Member of Board of Commissioner/Director Position
Familiy Relationship
3. Multiple Position
Has multiple positions as;
Do not have multiple positions as:
a. Members of the Board of Directors of State-Owned Enterprises, State-
Owned Enterprises, and Private-owned Enterprises that may cause a
conflict of interest with my position at PT TIMAH (Persero) Tbk;
131
b. Other positions in accordance with the provisions of legislation,
administrators of political parties and/or candidates/legislative
members and/or may be heads/deputy heads of regional governments;
c. Other positions that may cause a conflict of interest with my position
at PT TIMAH (Persero) Tbk.
4. With full responsibility and sincerely exercise oversight over the management
of the Company and avoid any conflict of interest with PT TIMAH (Persero)
Tbk and update this statement annually and I convey to the Corporate
Secretary.
Jakarta, ......... 2014
Name:..
Position: ...........
132
Attachment II
THE STATEMENT OF ACTING INDEPENDENTLY
IN MANAGEMENT OF PT TIMAH (PERSERO) TBK
In order to apply Good Corporate Governance (GCG) consistently and
continuously as well as compliance with applicable laws and regulations as stated
in:
1. Law of the Republic of Indonesia Number 40 Year 2007 concerning Limited
Liability Company;
2. Law of the Republic of Indonesia Number 19 Year 2002 concerning State-
Owned Enterprises;
3. Regulation of the Minister of State-Owned Enterprises No. PER-
09/MBU/2012 on the amendment to the Regulation of the Minister of State-
Owned Enterprises No. PER-01/MBU/2011 on the Implementation of Good
Corporate Governance (GCG) in SOEs;
4. Bapepam and LK Regulation Number IX.E.1 concerning Affiliated
Transactions and Conflicts of Interest on Certain Transactions, attachment of
Decision of the Chairman of Bapepam and LK Number: Kep-412/BL/2009
dated November 25, 2009;
5. PT TIMAH (Persero) Tbk Articles of Association as amended and lastly
amended by Deed of Amendment Number 75 dated 26 June of 2014, made by
Notary Fathiah Helmi Law Graduate and authorized by the Minister of Justice
and Human Rights No.: AHU-0064462.40. 80.2014;
6. Code of Corporate Governance at PT TIMAH (Persero) Tbk and the Working
Manual of Board of Commissioners and Board of Directors (Board Manual)
of the Company.
133
It is hereby stated that I:
Name:
Position:
Appointment based on GMS Number [...] and date [...] about [...]
1. Shares Ownership
Has no shares including family in PT TIMAH (Persero) Tbk
Own shares including family at PT TIMAH (Persero) Tbk
Has no shares including family outside PT TIMAH (Persero) Tbk
Own shares including family outside PT TIMAH (Persero) Tbk
2. Family Relationship
Not having a blood relation up to 3rd (3rd) degrees, either by linear or sideline,
including relationships arising out of marriage with other members of the Board
of Commissioners or with the Board of Directors
Having a blood relation up to third (3) level, either by linear or by line, including
relationships that arise due to marriage with other members of Board of
Commissioners or with the Board of Directors, namely:
Name of Member of Board of Commissioner/Director Position
Familiy Relationship
3. Multiple Position
Has multiple positions as;
Do not have multiple positions as:
a. Members of the Board of Directors of State-Owned Enterprises, State-
Owned Enterprises, and Private-owned Enterprises that may cause a
conflict of interest with my position at PT TIMAH (Persero) Tbk;
134
b. Other positions in accordance with the provisions of legislation,
administrators of political parties and/or candidates/legislative
members and/or may be heads/deputy heads of regional governments;
c. Other positions that may cause a conflict of interest with my position
at PT TIMAH (Persero) Tbk.
4. With full responsibility and sincerely exercise oversight over the management
of the Company and avoid any conflict of interest with PT TIMAH (Persero)
Tbk and update this statement annually and I convey to the Corporate
Secretary.
Jakarta, ......... 2014
Name:..
Position: ...........
135
SPECIAL LIST164
OF SHAREHOLD OWNERSHIP OF THE BOARD OF
COMMISSIONERS/DIRECTORS OF PT TIMAH (PERSERO) TBK
1. Shares Ownership of Members of the Board of Commissioners / Directors
Name of Board of Commissioners / Directors
Position
Shares ownership
PT Timah (Persero) Tbk
Other companies
Date Retrieved
Number of Shares
Shares Value
2. Family Ownership of Shares
Name
Family Relationships* with Members of the Board of Commissioners / Directors
Shares ownership
PT Timah (Persero) Tbk
Other companies
Date Retrieved
164
Law Number 40 of 2007 concerning Limited Liability Company Article 50 Paragraph (2), (3),
(4), and (5), Regulation of the Minister of State-Owned Enterprises No. PER-09/MBU/2012 on the
amendment to the Regulation of the Minister of State-Owned Enterprises No. PER-01/MBU/2011
on the Implementation of Good Corporate Governance (GCG) in SOEs Article 22, The Articles of
Association of PT TIMAH (Persero) Tbk Article 18 Paragraph (2) Letter b Point iii
136
Number of Shares
Shares Value
Note: Wife/Husband/Child/ Son or Daughter-in-law
Jakarta,…. 2014
Name:….
Position:…….
137
Attachment III
ACTION PROCEDURES OF THE BOARD OF DIRECTORS REQUIRING
THE APPROVAL OF THE BOARD OF COMMISSIONERS AND / OR
AGM
In conducting transactions, the Company shall observe the procedures for its
implementation, namely:
1. The Board of Directors prepares materials on activities requiring written
responses from the Board of Commissioners and/or the GMS;
2. The Board of Directors sends a draft/proposed material to the Board of
Commissioners and/or AGMS accompanied by analysis of legal aspects and
risks or independent party assessments;
3. The Board of Commissioners reviews the material submitted and if deemed
necessary it may request additional explanation to the Board of Directors and
within a period of at least 14 (fourteen) days after the date of receipt of a letter
from the Board of Directors;
4. Based on the explanation of the Board of Directors (if required) the Board of
Commissioners responds in the form of accepting or rejecting the proposal of
the Board of Directors no later than 14 (fourteen) days after the date of receipt
of the document;
5. If within 45 (forty five) days of receipt of the application or explanation and
documents from the Board of Directors, the Board of Commissioners has not
issued a decision, the Board of Commissioners shall be deemed to approve the
proposal of the Board of Directors;165
165
The Articles of Association of PT TIMAH (Persero) Tbk Article 18 Paragraph (8)
138
6. The Board of Commissioners shall make a written response to the proposed
matter of the Board of Directors to be submitted to the GMS, in the event of
requiring approval of the GMS, with a copy to the Board of Directors no later
than 5 (five) days after reviewing the materials or after receiving additional
explanations submitted by the Board of Directors;
7. The GMS provides a decision on the proposed material submitted by the Board
of Directors after considering the written response of the Board of
Commissioners no later than 7 (seven) days.
139
Attachment IV
Procedure of Admission or Provision of Medium/Long Term Loans
BOARD OF DIRECTORS
BOARD OF COMMISSIONERS
GMS
PROCESS
DOCUMENT
REFERENCE
RESULTS
Start
Submit proposal / proposal of acceptance or lending to the Board of
Commissioners together with supporting documents
• Feasibility of Proposals / Proposals
• Credit terms from the creditor (receipt) or the Company (granting)
• Credit ceiling
• Current credit position
• Plan the object of guarantee to be provided (acceptance) or received
(granting)
Provide feedback with accompanying directives and results of risk assessment
No
Response / approval
140
Yes
20% to 50% of the Company's equity
Material Value
Approval letter
Carry out receipts or lending
Reporting the implementation of receipt or lending to the Board of
Commissioners
> 50% of the Company's equity
Request approval of GMS for acceptance or granting of loans
Done
Approval of the GMS
Implementation reports
Yes
Response/Approval
No
• The feasibility of the proposal / proposal is attached with the required
completeness documents
• A copy of the offer letter signed by the Board of Directors
• Credit agreement
• Acceptance or Loan Agreement
• Response from the Board of Commissioners
• Approval letter
141
• Approval of acceptance or loan by the GMS
• Articles of Association of PT Timah (Persero) Tbk Article 18 Paragraph
(7) Letter g, Paragraph (8)
142
Attachment V
Company Binding Procedures As a Guarantor
PROCESS
---
BOARD OF DIRECTORS
Start
Apply to the Board of Commissioners regarding the Company's binding as a
guarantor
• List of other company's assets to be pledged
• List of assets that are being pledged
• Selection Result of Creditor candidate
• Appraisal Results Creditor
Selection of creditor candidates
Approval of the following approval of Creditor Candidate and other documents
---
BOARD OF COMMISSIONERS
Respond to the Company's binding plan as a guarantor accompanied by a
directive and result of risk assessment
No
Response
Yes
Provide a response / approval of the Company's binding within the specified time
143
No
Response / Agreement
Yes
Repair response
---
Submit a proposal and complete the Company's binding documents as guarantor
to the Board of Commissioners
20% to 50% of the Company's equity
Implemen the Company's binding as a Guarantor
Report the Company's binding to the Board of Commissioners
Material Value
> 50% of the Company's equity
Request approval from the GMS for the Company's binding as a guarantor
Done
---
Approval letter
Corporate Engagement Report
---
GMS
Approval of the GMS
Yes
Response / Approval
No
---
144
DOCUMENT
REFERENCE
RESULTS
• Approval Approval of the Company's binding as a guarantor
• List of assets to be pledged
• List of assets that are being pledged
• Result of selection of creditor candidates
• Appraisal results creditor
• Approval of the Company's binding license as a guarantor
---
• Response to the proposed binding of the Company as a guarantor
accompanied by directives and results of risk assessment
• Letter of approval of the Company's binding as a guarantor
---
• Approval by the GMS
---
Articles of Association of PT Timah (Persero) Tbk Article 18 Paragraph (7) Letter
f
145
Attachment VI:
Procedures for Elimination of Accounts Receivable Loss or Dead Inventory
PROCESS
---
BOARD OF DIRECTORS
Start
Proposed proposal for Elimination of Bad Debts or Dead Inventory
Proposed proposal for Elimination of Bad Debts or Dead Inventory
20% to 50% of the Company's equity
Material Value
---
BOARD OF COMMISSIONERS
Provide response / approval on proposal for write-off of bad debts and inventory
of dead goods within the stipulated time
No
Response / Agreement
Yes
Letter of Approval of write-off of bad debts or inventory of dead goods
---
Carry out the write-off of bad debts or inventory of dead goods
Report the implementation of write-off of bad debts or inventory of dead goods to
the Board of Commissioners
146
Done
> 50% of the Company's equity
Request approval to the GMS for write-off of bad debts or inventory of dead
goods
Approval of the GMS
Yes
Response/Agreement
No
Implementation Report
---
DOCUMENT
REFERENCE
RESULTS
• List of bad debts or inventory of dying goods and Monitoring of Bad
Debts or inventory of goods for the year
• Letter of Application for Removal of Receivables
---
• Results of the Board of Commissioners Review on the application for
write-off of bad debts or inventory of dead goods
• Letter of approval for write-off of bad debts or inventory of dead goods
---
• Approval of write-off of bad debts or inventory of dead goods by the GMS
---
147
Articles of Association of PT Timah (Persero) Tbk Article 18 Paragraph (7) Letter
l, Paragraph (8)
148
Attachment VII
Business Cooperation Procedures
PROCESS
---
BOARD OF DIRECTORS
Start
Apply business cooperation plan with material value
Approve the feasibility of proposals / proposals and review results to the Board of
Commissioners on business cooperation plans to obtain approval responses
• Proposal Feasibility
• Due Diligence Result of Business Partner Candidate
• Draft Agreement (MoU)
• And others
20% to 50% of the Company's Equity
Material Value
---
BOARD OF COMMISSIONERS
Respond to the Board of Directors' plan to conduct business cooperation
Response / Approval
Yes
No
149
Review the proposal and other supporting documents within the specified time
period
Response to improvement
Response / approval
Yes
No
Approval letter
---
Carry out business cooperation
> 50% of the Company's equity
Reporting the implementation of cooperation to the Board of Commissioners
Request approval from GMS for business cooperation
Done
---
GMS
Approval of the GMS
Yes
Response / Approval
No
Implementation Report
---
DOCUMENT
REFERENCE
RESULTS
150
• Application Letter for Business Cooperation Permit
• Business Cooperation Proposal
• Selection results of independent appraisal agencies
• Assessment results from independent appraisal agencies
• MoU with Business Partner
• Implementation Report to the Board of Commissioners
---
• The results of the Board of Commissioners reviewing the agreement
• Letter of approval of business cooperation
---
• Approval of business cooperation by GMS
---
Articles of Association of PT Timah (Persero) Tbk Article 18 Paragraph (7) Letter
e, Paragraph (8)
***