The Financial Services Authority (OJK) Regulation No. 55/POJK.04/2015 on the Establishment and Implementation of the Audit Committee obliges issuers to have written guidelines for the Audit Committee (the “Audit Committee Charter”).
This Audit Committee Charter is a formal document that demonstrates the commitment of the Board of Commissioners and the Board of Directors of PT Boston Furniture Industries Tbk (the “Company”) to establish a system of oversight within the Company.
This Audit Committee Charter is prepared as a guideline so that the Audit Committee can carry out its duties and responsibilities efficiently, effectively, transparently, independently, and accountably in accordance with applicable laws and regulations, in a manner acceptable to all stakeholders.

A. PURPOSE OF ESTABLISHMENT OF THE AUDIT COMMITTEE

The Audit Committee is established to assist the Board of Commissioners in performing its supervisory duties and functions within the Company.

B. POSITION

1. The Audit Committee is established by the Board of Commissioners and, therefore, reports directly to the Board of Commissioners.
2. The Audit Committee works collectively and performs its duties independently from the Company’s management.
3. The Audit Committee must report the results of its evaluations to the Board of Commissioners.

C. COMPOSITION, STRUCTURE, MEMBERSHIP REQUIREMENTS, AND TERM OF OFFICE

1. Composition and Structure of the Audit Committee
1. The Audit Committee consists of at least 1 (one) chairperson and 2 (two) members.
2. The Chairperson of the Audit Committee is a member of the Company’s Independent Commissioners.
2. Audit Committee Membership Requirements
   To be appointed as a member of the Audit Committee, a candidate must fulfill the following requirements:
   1. Possess integrity, dedication, competence, education, independence, knowledge, and experience to carry out supervisory tasks related to the audit process, financial statement reviews, and the communication of results in the exercise of duties and functions.
   2. Have sufficient knowledge of the laws and regulations relating to the capital market and other regulations relevant to the Company’s operations.
   3. At least one member of the Audit Committee must have an educational background and experience in accounting or finance, while other members must be sufficiently knowledgeable in reading and understanding financial statements.
   4. Must not be insiders of the Public Accounting Firm, Law Firm, or other parties providing audit or non-audit services or other consulting services to the Company within the last 6 (six) months before appointment by the Board of Commissioners.
   5. Must not be individuals who, within the last 6 (six) months, had the authority and responsibility to plan, lead, or control the Company’s activities.
   6. Must not have:
      1. Family relationships by marriage or blood up to the second degree, horizontally or vertically, with members of the Board of Commissioners, Board of Directors, or major shareholders; and/or
      2. Business relationships, either directly or indirectly, that are connected to the Company’s business activities.
3. Term of Office
   1. The term of office of the Chairperson of the Audit Committee may not exceed his/her term of office as an Independent Commissioner.
   2. The Audit Committee’s term of office must not be longer than the term of office of the Board of Commissioners as stipulated in the Articles of Association and may be extended for only one (1) subsequent period.
   3. The Board of Commissioners may dismiss members of the Audit Committee at any time.
   4. To maintain the continuity of the Audit Committee’s duties, the dismissal and replacement of Audit Committee members may be done in stages (not simultaneously).

D. DUTIES, RESPONSIBILITIES, AND AUTHORITY

1. The Audit Committee’s main task is to provide opinions to the Board of Commissioners regarding any reports or issues submitted by the Board of Directors, identify matters requiring attention by the Board of Commissioners, and perform other duties related to the Board of Commissioners’ functions, including but not limited to:
   1. Reviewing financial information that will be released by the Company to the public and/or regulatory authorities, such as financial statements, projections, and other reports relating to the Company’s financial information;
   2. Reviewing compliance with laws and regulations relevant to the Company’s activities;
   3. Providing an independent opinion if there is a disagreement between management and the Accountant regarding the services provided;
   4. Providing recommendations to the Board of Commissioners regarding the appointment of the accountant based on independence, scope of work, and service fees;
   5. Reviewing the internal auditor’s examination processes and overseeing the implementation of follow-up actions by the Board of Directors on any findings from the internal auditor;
   6. Reviewing the implementation of risk management activities carried out by the Board of Directors if the Company does not have a separate risk monitoring function under the Board of Commissioners;
   7. Examining complaints related to the Company’s accounting and financial reporting processes;
   8. Examining and providing advice to the Board of Commissioners regarding potential conflicts of interest in the Company; and
   9. Maintaining the confidentiality of the Company’s documents, data, and information.
2. In carrying out its tasks, the Audit Committee must ensure that it preserves the confidentiality of the Company’s documents, data, and information obtained during the performance of its duties.
3. Authority
   1. Access all relevant Company data and resources as required.
   2. Communicate directly with employees, including the Board of Directors and those performing internal audit or risk management functions, as well as with Accountants, regarding matters related to the Audit Committee’s duties and responsibilities.
   3. Appoint consultants or experts deemed necessary to assist in performing its duties, at the Company’s expense, with the prior written approval of the Board of Commissioners.
   4. Hold meetings with members of the Board of Directors or other key employees to understand how the Company manages its operations and mitigates risks.
   5. Exercise other authorities granted by the Board of Commissioners.

E. RELATIONSHIP WITH RELEVANT PARTIES

In performing its duties and responsibilities, the Audit Committee will liaise with the external auditor, internal auditor, and the Company’s management.

F. WORK PROCEDURES AND PROCESSES

1. The performance of the Audit Committee’s duties and responsibilities, as well as any opinions and recommendations provided, is based on or depends on information provided by the Company’s management, the Public Accountant, and other internal or external parties.
2. The Audit Committee shall act independently in carrying out its duties and responsibilities.
3. Administrative coordination of the Audit Committee’s tasks is facilitated by the Corporate Secretary.

G. ACTIVITY REPORTING SYSTEM

1. The Audit Committee shall submit reports to the Board of Commissioners on every assignment given and on matters related to:
   1. Any material violations of laws or regulations by the Company;
   2. Any material misstatements in the financial statements, internal control, and the independence of the external auditor.
2. The Audit Committee shall prepare an annual report of its activities for the Board of Commissioners, which will be disclosed in the Company’s Annual Report.
3. The Audit Committee shall submit reports on any special assignments given by the Board of Commissioners.

H. HANDLING COMPLAINTS OR REPORTS REGARDING ALLEGED VIOLATIONS RELATED TO FINANCIAL REPORTING

1. In the event of any complaints or reports regarding alleged violations related to the Company’s financial reporting, the Audit Committee shall review these matters with the relevant parties within the Company.
2. Based on this review, the Audit Committee shall provide recommendations to the Board of Commissioners.

I. MEETING POLICIES AND IMPLEMENTATION

1. The Audit Committee shall meet at least once every 3 (three) months.
2. Audit Committee meetings shall be led by the Chairperson of the Audit Committee. In the event the Chairperson is unable to attend, the meeting shall be led by another Committee member present.
3. An Audit Committee meeting may be convened if attended by more than half of the Audit Committee members.
4. Decisions of the Audit Committee are made on the basis of deliberation to reach a consensus.
5. Each Audit Committee meeting must be documented in written minutes, including any differing opinions, and signed by all members of the Audit Committee who attend. The minutes shall be submitted to the Board of Commissioners.
6. The minutes of the Audit Committee meetings are distributed to all meeting participants and the Board of Commissioners.

J. MISCELLANEOUS

The Audit Committee Charter will be reviewed periodically to ensure its alignment with prevailing regulations and any changes in the assignments mandated by the Board of Commissioners.

With effect from the date of issuance of this Audit Committee Charter, the Audit Committee Charter established by Decision Letter of the Board of Commissioners of PT Boston Furniture Industries Tbk No. 002/SK-BOC/BFI/I/2020 dated January 17, 2020, is revoked and declared no longer valid.