Charter of the Board of Directors (PT ASII)

Purpose

This Charter of the Board of Directors aims to provide guideline and ethical standards for the Board of Directors in order to improve effectiveness of performance of duties and responsibility of the Board of Directors as well as to apply good corporate governance in accordance with applicable rules and regulations.

Regulations Background

Regulations background of the Board of Directors Charter:
  1. Law No. 40 of 2007 concerning Limited Liability Company.
  2. Law No. 8 of 1995 concerning Capital Market.
  3. Articles of Association of PT Aberdeen Standard Investments Indonesia.
  4. Bapepam and LK Rule No. V.A.3 concerning Licensing Procedures for a Securities Company Conducting Business as an Investment Manager.
  5. OJK rule No. 24/POJK.04/2014 concerning Guidelines of Investment Management Firms Functions Implementation.
  6. OJK rule No. 43/POJK.04/2015 concerning Code of Conduct of Fund Managers.
  7. OJK rule No. 27/POJK.03/2016 concerning Fit and Proper Test (“FPT”) for Primary Parties of Financial Institutions.
  8. OJK rule No. 76/POJK.07/2016 concerning Raising Financial Literacy and Inclusion in the Financial Services Sector among Customers and/or Public.
  9. OJK rule No. 12/POJK.01/2017 concerning Implementation of Anti-Money Laundering and Prevention of Terrorism Financing Programs [“APU-PPT”] within the Financial Sector.
  10. OJK rule No. 10/POJK.04/2018 concerning Implementation of Corporate Governance in Investment Management firm.
  11. OJK rule No. 18/POJK.07/2018 concerning Customer Complaint Services in Financial Services Sector.

General Provisions

In this Charter, the following terms shall have the meaning as follows:
  1. Company means PT Aberdeen Standard Investments Indonesia.
  2. Articles of Association mean the Company’s Articles of Association along with any amendments thereto.
  3. Board of Directors (“BOD”) means the Company organ that is fully authorized and responsible for managing the Company for the interest of and in accordance with purposes and objectives of the Company as well as representing the Company, both inside and outside of the court in accordance with the provisions of Articles of Association.
  4. Board of Commissioners (“BOC”) means the Company organ that is in charge of performing a general and/or specific oversight in accordance with the Articles of Association and providing advice to the BOD.
  5. Sharia Supervisory Board means a board which is responsible for giving advice and feedback as well as supervising Sharia Principle implementation for mutual funds managed by the Company.
  6. Otoritas Jasa Keuangan (OJK”) means an agency which is independent and free from interference by other parties, having the functions, duties and authorities to regulate, supervise, examine and investigate as referred to in Law No. 21 Year 2011 concerning Financial Services Authority.
  7. General Meeting of Shareholders (“GMS”) means the Company organ which has the authority not given to the BOD or BOC within limits specified in Law No. 40 Year 2007 concerning Limited Liability Companies and/or the Articles of Association.
  8. Good Corporate Governance hereinafter referred to as Governance, means Investment Management Firm Governance applying transparency, accountability, responsibility, independency and fairness principles.

Requirements of The BOD Members

  1. Each member of the BOD shall meet integrity, financial reputation, competency, and skill in capital market, individual license, domicile and dual position requirements as prescribed under OJK rules and other requirements as stipulated under applicable rules and regulations.
    1. Integrity requirements consisting of:
      1. An individual who is capable of entering into legal deeds;
      2. Has never been declared bankrupt or been a member of a board of directors and commissioners that has been proven guilty of causing a company to be declared bankrupt;
      3. Has never been a member of a board of directors or commissioners which is declared responsible for a company to become bankrupt based on Shareholders General Meeting or other equivalent organ;
      4. Has never been a member of a board of directors or commissioners of a company that is declared bankrupt, unless he/she can prove that he/she has fulfilled requirements set by article 104 point 4 of Law Number 40 Year 2007 concerning Limited Liability Company;
      5. Has never committed indecent conduct and/or been punished for committing financial crime that has been proven;
      6. Having good moral and integrity;
      7. Having high level of commitment to comply with the prevailing rules and regulations and support OJK’s policies;
      8. Having high level of commitment to develop sound operations of the Company; and
      9. Not included as a party who is prohibited from becoming a member of the BOD.
    2. Financial reputation requirements are as follows:
      1. Has never been declared bankrupt and/or has never registered as the shareholder, a member of a board of directors or a member of a board of commissioners declared as guilty for causing a company to be declared as bankrupt; and
      2. Having good financial reputation by having no bad debts;
      Within a period of 5 (five) years prior to his/her appointment and while holding his/her office.
    3. competency and expertise in capital market requirements are as follows:
      1. Having sufficient knowledge in Capital Market that is relevant with his position and having academic educational background with at least D3 (diploma three) degree;
      2. Having experience and expertise in Capital Market and/or financial sector for at least 3 (three) years at managerial level in companies conducting business in Capital Market and/or financial sector dealing with management of clients or institution’s fund invested in Securities portfolio or collective investment portfolio.
      Managerial positions referred to in item (ii) are:
      1. Position a level below the BOD;
      2. Supervise a working unit in an institution conducting business in capital markets and/or financial sector; or
      3. Supervise at least 10 (ten) employees.
  2. Each member of the BOD must reside in Indonesia and shall have individual license as Securities Company Representative and at least one board member shall have individual license as Investment Manager Representative.
  3. The requirements stipulated in item (1), and (2) above shall be satisfied by each member of the BOD at the time of his/her appointment and while holding his/her terms of office. If a member of the BOD fails to meet such requirements, the concerned member of the BOD is prohibited from carrying out any legal activities as a member of the BOD.
  4. Members of the BOD or among members of the BOD and the BOC shall not have financial relationship and kinship with member of the BOC, other BOD member; and/or controlling Shareholders of the Company.

Terms of Office

  1. The Company shall be managed and led by a BOD consisting of 2 (two) persons or more, one of whom shall be appointed as President Director. The controlling shareholder shall be entitled to nominate members of the Board of Directors.
  2. Each candidate of director is required to pass Fit and Proper Test held by OJK prior to his/her appointment by GMS. A member of the BOD is appointed by GMS for a period of 3 (three) years as from the date of his/her appointment, without prejudice to the right of the GMS to dismiss them at any time.
  3. The newly appointed member of the BOD shall follow an Induction Program with aims to provide insight to the new director so he/she can immediately comprehend business activities, policies and procedures applied by the Company as to perform her/his duties effectively and efficiently.
  4. The term of office of the relevant member of the BOD ends if the relevant member of the BOD:
    1. Has a term of office which ends according to Articles of Association;
    2. Resigns as set out in the Articles of Association and the Company’s policy;
    3. Fails to meet legislation requirements anymore;
    4. Passes away;
    5. Is dismissed based on the GMS decision.
  5. A member of the BOD may resign from his/her position by submitting a written request to the the Company in accordance with Company’s policy and by stating the purpose of his/her resignation.
  6. A member of the BOD who was involved in a financial crime and/or other criminal offense must resign from his/her position as a member of the BOD.
  7. The Company shall submit a report concerning resignation of a member of the BOD to Otoritas Jasa Keuangan within the period determined by Otoritas Jasa Keuangan.

Duties and Responsibilities

  1. Each member of the BOD shall be obligated to perform his/her duties in good faith and with full responsibility intended for the Company’s best interest in achieving its purposes and objectives with due observance of applicable laws and regulations.
  2. In performing his/her duties, each member of the BOD shall be obligated to comply with the Articles of Association, applicable laws and regulations as well and principles of professionalism, efficiency, transparency, accountability, responsibility and fairness.
  3. The BOD shall:
    1. Make shareholders’ registry, shareholders’ special registry, minutes of general meeting of shareholders’ and minutes of the BOD’s meeting;
    2. Prepare annual report and Company’s financial documents as intended in Law No. 8 of 1997 on Company Document;
    3. Be responsible for the completeness and correctness of the Company’s financial statements and documents submitted to OJK;
    4. Provide accurate, relevant and timely data and information to the BOC and Sharia Supervisory Board;
    5. Be responsible for implementation of Corporate Governance;
    6. Follow up audit findings of and recommendations made by Compliance, risk management and internal audit function and/or results of supervision by the BOC and Otoritas Jasa Keuangan;
    7. Be responsible for formulating Company’s Business Plan, implementation of the Business Plan and its socialization to all employees/staff of the Company;
    8. Be responsible for formulating and implementing activities plan in order to improve financial literacy and financial inclusion;
    9. Ensure formulation and implementation of customer complaint procedures and shall be responsible for performing periodic review of clients’ complaint handling policies and procedure;
    10. Grant approval for supervision policy and procedure concerning management and mitigation of money laundering and terrorism financing risk, so that the Company is able to manage and mitigate the identified risk.
  4. The BOD is obliged to conduct active supervision by at least:
    1. Ensuring that the Company has a policy and a procedure concerning implementation of APU-PPT program;
    2. Proposing a policy and written procedure concerning implementation of APU-PPT program to the BOC;
    3. Ensuring that implementation of APU-PPT program is carried out in accordance with the policy and written procedures which has been determined;
    4. Creating certain unit and/or appoint officer who will be responsible for implementation of APU-PPT program;
    5. Performing supervision of compliance of the working unit in implementing APU-PPT program;
    6. Ensuring that the policy and written procedure concerning implementation of APU-PPT program is in line with change and development of products, services and technology in financial service sector; and in line with the development of money laundering and/or terrorism financing modus operandi; and
    7. Ensuring that every employee, particularly employee from related unit and new staff, have periodically undertaken trainings on the implementation of APU-PPT program.
  5. The BOD shall be accountable for the performance of its duties to the shareholders in a General Meeting of Shareholders.
  6. The BOD shall be fully responsible, including in financial responsibility, for any activities related to the Company’s activities carried out by a representative of investment management firm, employee and other parties working with the investment management firm.
  7. Each member of the BOD shall be personally responsible for the Company’s losses if the Director concerned is at fault or negligent in carrying out his/her duties. Such responsibilities are jointly for each member of the BOD.
  8. Members of the BOD may not be held liable for the losses as intended in point [7] if he/she can prove that:
    1. The losses were not due to his/her fault or negligence;
    2. He/she carried out the management in good faith and with prudence in the interests of and in accordance with the purposes and objectives of the Company;
    3. He/she does not have a direct or indirect conflict of interest in the action of management that caused the losses; and
    4. He/she took action to prevent the losses from arising or continuing.
  9. Members of the BOD shall improve their knowledge and understanding that can help implementation of their duties through continuity education and/or training.

Authorities

  1. The President Director shall be entitled and authorized to act for and on behalf of the BOD as well as to represent the Company. In the event that the President Director is absent or is unable to attend due to any reason whatsoever, of which impediment no evidence to third parties shall be required, a Director shall be entitled and authorized to act for and on behalf of the BOD as well as to represent the Company.
  2. The BOD is entitled to grant power by virtue of written power of attorney to 1 (one) or more employee(s) of the Company or to other person for and on behalf of the Company to undertake certain legal acts as described in the power of attorney concerned. The BOD is prohibited from granting a power of attorney to any other party which leads to a delegation or transfer of duties, functions and responsibilites of the BOD.
  3. The BOD shall be entitled to represent the Company inside and outside the Court of Law in respect of all matters and in all events, to bind the Company with other parties and other parties with the Company, as well as to undertake all actions, both regarding management and ownership, however with the following limitations:
    1. To borrow or lend money on behalf of the Company (excluding the withdrawal of the Company’s money from Banks);
    2. To establish a new business, to participate in other companies either within or outside the country;
    3. To bind the Company as debt guarantor/underwriter;
    4. To pledge or secure the Company’s property, to purchase, sell or otherwise obtain/release the right on immovable assets including the right on land and building, the rights on shares in other companies;
    Must be with the approval of the BOC; unless such actions are undertaken in the context of the Company running its business activities as investment manager.
  4. Member of the BOD does not have the authority to represent the Company if:
    1. There is a court case between the concerned member of the BOD; or
    2. The interest of the concerned member of the BOD conflicts with the interest of the Company.
  5. If the incidents as referred to point (4) occur, those who have the authority to represent the Company are:
    1. Other members of the BOD who do not have conflicts of interest with the Company;
    2. The BOC, if all members of the BOD have conflict of interest with the Company; or
    3. Other parties appointed by General Meeting of Shareholders, if all members of the BOD or the Board of Commissioners have conflicts of interest with the Company.
  6. The BOD is not authorized to petition for bankruptcy for its own Company to a commercial court before obtaining General Meeting of Shareholders approval, with due consideration of the provisions of the Law on Bankruptcy and Suspension of Payment.
  7. Members of BOD are not allowed to serve as the coordinator of investment and research function, trading function and/or securities transaction settlement function. A member of BOD who serves as the coordinator of risk management, compliance and internal audit is prohibited from concurrently serving as the coordinator of other functions.

Work Ethics

  1. Each member of the BOD must have professional behavior and high motivation in working as a group to achieve remarkable performance of the Company.
  2. Each member of the BOD is prohibited from:-
    1. Abusing his/her authority for his/her interest, family and/or other party(ies); and/or
    2. Taking personal advantage directly or indirectly from Investment Manager activities aside from his/her legitimate income.
  3. Each member of the BOD is prohibited from holding double positions in other companies except as a commissioner of Securities Exchange, Clearing and Guarantee Institution or Custodian and Settlement Institution in Indonesia.
  4. Each member of the BOD is prohibited from receiving gifts or benefits having conflict with interest of client or its obligations to the client.
  5. A member of the BOD may give gift or benefit to clients and other parties provided that source of the gift or benefit is not generated from portfolio of securities or portfolio of fund managed by the Company and/or may cause loss to the clients.
  6. The BOD’s work ethic also refers to the Company’s Code of Conduct.
  7. Members of the BOD shall report through whistleblowing system in relation to allegation of violation of code of ethic.

Conflict of Interest

  1. Conflict of Interest is a difference of economic interest between:
    1. The Company with personal economic interest of controlling shareholder, members of the BOC, members of the BOD, customers and/or related parties with the Company; and/or
    2. Customer with personal economic interest of controlling shareholder, members of the BOC, members of the BOD, customers and/or related parties with the Company,
    that may harm the customers and/or the Company.
  2. Each member of the BOD shall have a commitment to avoid all types of conflict of interest. Each member of the BOD shall:
    1. Prioritize the interest of the Company and not take advantage of the Company in the event of a Conflict of Interest; and
    2. Abstain from decision making in circumstances of Conflict of Interest.
  3. In the event a conflict of interest is unavoidable, the relevant member of the BOD shall disclose the potential of conflict of interest in the BOD meeting and the relevant member of the BOD shall abstain from voting.
  4. Each member of the BOD is prohibited from:
    1. Executing transaction having conflict of interest with business activities of the Company;
    2. Utilizing his/her position in the Company in which he/she works for his/her personal interest, families, and/or other party’s interest which may harm or reduce the Company’s profit and reputation; and/or
    3. Taking and/or receiving personal benefits from the Company in which such member of the BOD works, other than remuneration and facilities set out by GMS resolution and/or internal policies.
  5. Each member of the BOD shall comply and undertake other relevant provisions in relation to the Conflict of Interest applicable to the Company.

Transparency

In order to fulfill the principles of Transparency in the implementation of Good Corporate Governance:
  1. Each member of the BOD shall make reports to the Company with regard to shares owned by the member of the BOD concerned and/or his/her family in the Company and other Companies.
  2. Each member of the BOD shall disclose to the Company:- (a) whether he/she has interest in and/or ownership of Securities either directly or indirectly including through nominees or affiliated parties since taking office or working for the Company; and (b) any changes in interests in and/or ownership of Securities, either directly or indirectly, including through nominees or affiliated parties, including the interests or ownership of Securities owned by the said party during his/her tenure or work in the Company.
  3. Each member of the BOD shall notify the Company in writing no later than 2 (two) business days before and after executing securities selling or buying that was performed by:- (a) the concerned director for personal, nominees, and/or affiliated parties who are parties where the concerned director has Securities ownership either directly or indirectly; and/or (b) nominees or affiliated parties who are parties whom the concerned director has an interest in Securities either directly or indirectly.
  4. Each member the BOD executing Securities sale or purchase transactions for benefit of his/her personal, nominees, and/or affiliated parties who are parties in which members of the BOD has securities ownership either directly or indirectly are prohibited from: (a) making transactions in advance of certain Securities on the basis of information that the Customer will conduct transactions in large volumes of such Securities which are expected to affect market prices in order to gain profits or reduce losses; (b) conducting cross transactions with the Company's customers; and/or; (c) selling owned Securities less than 30 (thirty) days.
  5. Disclosure of the interests or ownership of members of the BOD over Securities as referred to in item [4] and notification in writing to the Company before and after conducting Securities sale or purchase transaction for his personal interests, nominees and / or affiliated parties who are parties in which the BOD has ownership of Securities either directly or indirectly is carried out under the coordination of the compliance function of the Investment Manager.
  6. Other matters related to the fulfillment of transparency principles under the prevailing laws and regulations.

Policy of The BOD Meeting

  1. Each strategic policy and decision must be made in the BOD meeting.
  2. Meeting of the Board of Directors may be held at any time if deemed necessary:- (a) by one or more member(s) of the Board of Directors; (b) at the written request of one or more member(s) of the Board of Commissioners; or (c) at the written request of 1 (one) or more shareholder(s) jointly representing 1/10 (one-tenth) or more of the total number of shares with valid voting rights.
  3. The BOD schedules meetings of the BOD for the following year before the end of the financial year. The BOD shall hold the BOD meeting at least 1 (one) time within 2 (two) months and such meeting may be held if it is attended by majority of members of the BOD.
  4. Each member of the BOD shall attend at least 75% of all the BOD meetings held in 1 (one) year.
  5. The meeting of the BOD shall be chaired by the President Director, in the event that the President Director is absent or is unable to attend, of which impediment no evidence to third parties shall be required, the meeting of the BOD shall be chaired by a member of the BOD elected by and from among members of the BOD attending.
  6. The meeting of the BOD shall be valid and shall be entitled to adopt binding resolutions in the event that more than ½ (one-half) of the total number of members of the BOD are present or are represented in the meeting.
  7. Resolutions of the Meeting of the BOD must be adopted based on deliberation to reach consensus. In the event that a resolution based on deliberation to reach consensus is not reached, resolution shall be adopted by voting based on affirmative votes of not less than ½ (one-half) of the total number of votes cast by the members of BOD present or represented in the meeting. In the event of a draw, the President Director shall determine.
  8. All resolutions of the BOD including results of the BOD meeting are binding on all members of the BOD and a valid evidence for all members of the BOD and third parties. Any dissenting opinion in the BOD meeting should be clearly stated in the minutes of meeting and signed by all members of the BOD and well documented.
  9. In the event a member of the BOD does not sign the minutes of the BOD meeting, the relevant member shall specify the reasons in a separate letter attached in the minutes of meetings.
  10. The BOD may also adopt valid resolutions without holding a meeting of the BOD, provided that all members of the BOD have been notified in writing regarding the submitted proposal and all members of the BOD have approved in writing the submitted proposal and have signed such approval. Resolutions adopted in such manner, shall have equal force as resolutions validly adopted in a meeting of the Board of Directors.

Performance Assessment, Accountability and Reporting

  1. The assessment and measurement of members of the BOD performance is based on the results of the implementation of duties performed by the respective director in accordance with the Company’s or individual director performance achievement target as set forth in director’s Key Performance Indicator (KPI).
  2. Each BOD member shall develop his/her KPI relevant to his/her duties and responsibilities through electronic system that the Company has had in place in the beginning of the year and BOC approves the KPI. The KPI shall be evaluated each year by the BOC.
  3. Report on the implementation of the BOD’s duties and responsibilities shall be set forth in the Annual Report and approved by the Annual GMS.
  4. Approval of Annual Report by the Annual GMS means providing acquit at discharge to the BOD on the implementation of management function during the previous fiscal year provided that it is reflected in the Annual Report of the Company.
  5. Self assessment report on the implementation of Good Corporate Governance shall be submitted to OJK in accordance with applicable OJK rules.

Working Time

  1. Working time is time specified by the Company to the members of the BOD to attend the work place/office and conduct his/her duties.
  2. Working time of the members of the BOD in the Company is 5 (five) working days in a week.

Others

  1. The BOD Charter is binding on each member of the BOD and is enacted since the signing date until there is revision and/or revocation based on the prevailing rules and regulations.
  2. In the event of ambiguity of the provisions of this Charter with the provisions stipulated in OJK rules and Articles of Association, then OJK rules will prevail first and then Articles of Association.
  3. The BOD Charter shall be published on the Company’s website.