GOOD CORPORATE GOVERNANCE (GCG)

Good Corporate Governance (GCG) is a structure and mechanism governing company

management to produce sustainable long term economic value for both shareholders
and stakeholders. The implementation of good corporate governance principals can
contribute in improving Company’s performance. This understanding underlies the
commitment of PT Sarana Multigriya Finansial (Persero) to maintain the implementation
of GCG in every level of organization and its operational activities. The implementation of
GCG principals is based on the Regulation of Minister of State Owned Enterprises No.
Per-01/MBU/2011 dated August 1st, 2011, about the Implementation of Good Corporate
Governance (GCG) within State-Owned Enterprises which states the requirement and
guidelines of GCG implementation in the company. The elaboration on the base of GCG
implementation is also clarified in Articles of Association, the guidelines and based on
applicable laws and regulations.

Implementation Of GCG Principals

The implementation of all activities is in accordance to the basic principles of GCG which
are transparency, accountability, independency, liability and fairness.

Transparency

Transparency principal is always implemented in running business through providing

material and relevant information which can be easily accessed and understood by
stakeholders. Broad information is given to public and shareholders with respect to
regulations of the Financial Services Authority or own initiatives. The reports are
published periodically and punctually which include Quarterly Financial Report, Semester
Financial Report, Audited Annual Financial Report and Annual Report. Information is also
disclosed through public presentation, printed and electronic media and investor forum.
Accountabilty

The Company has a corporate management system that supports clarity of functions,
implementation and accountability of corporate organs. Accountability principal is
implemented through Board of Director’s report to the Board of Commissioner regarding
annual budget planning and evaluation on company’s financial performance, submission
of financial statement to Annual General Meeting of Shareholders, the establishment of
internal audit, appointment of external audit, implementation of business ethics and code
of conduct.

Responsibility

To maintain long term business sustainability and to get acknowledgement as a good

corporate citizen, the company should comply to laws and regulations and fulfill the
responsibilities to society and environment. Through an intergraded Corporate Social
Responsibility (CSR) program that copes education, social and environmental aspects,
the Company is directly involved in various social activities focusing on the development
of community, including related housing development.

Independency

The Company always assures that corporate management is done independently, so

each corporate organ does not dominate and no intervention by other parties. As an
example, The Board of Commissioner and Directors have independent opinion in every
decision making, but it is possible to get suggestions from independent consultant, law,
human resources and the committees to support good supervision function. Currently,
the Board of Commissioner consists of 3 (three) people, 1 (one) President Commissioner
and the other 2 (two) are Commissioners.

Fairness And Equality

In the Company, the interest of shareholders and other stakeholders is always on special
attention. The Company always implements fair treatment to public, capital market
authority, capital market community, and the stakeholders. Meanwhile, relation with
employees is maintained by maintain their rights and obligations fairly and equally.

To assure implementation of GCG principals in every business aspect, an active role and
support from the Board of Commissioner and Directors are needed. The role and support
in 2014 was manifested through:

● Renewal of Policy and Procedure concerning The Implementation of GCG.

● The implementation of GCG assessment by Independent Assessor.

● Dissemination of policies and procedures of GCG implementation to stakeholders