This commitment to corporate governance not only reinforces the Company’s reputation but also contributes to the overall safety, satisfaction, and loyalty of our passengers, which are key drivers of success in the highly competitive aviation industry.

Commitment to Best Governance Practices

Corporate Governance implementation represents a strategic framework aimed at ensuring transparency, accountability, and ethical business practices, which are fundamental for sustainable growth and stakeholder trust. Corporate Governance principles guide the Company in navigating the complex regulatory environments, safety standards, and international compliance requirements critical to its operations. By fostering a culture of integrity and transparency, the Company can effectively manage risks, enhance operational efficiency, and build resilient relationships with customers, employees, investors, and regulators. This commitment to good governance not only reinforces the Company’s reputation but also contributes to the overall safety, satisfaction, and loyalty of our passengers, which are key drivers of success in the highly competitive aviation industry.

The adoption of Corporate Governance in the Company is integral to ensuring operational excellence, financial integrity, and ethical conduct across all levels of the organization. By implementing Corporate Governance practices, the Company is committed to principles of fairness, transparency, accountability, and responsibility, which are crucial for maintaining the trust and confidence of passengers, employees, shareholders, and regulatory bodies.

This governance commitment empowers the Company to address the unique challenges of the aviation industry, including safety and security concerns, environmental sustainability, and customer service quality. Effective Corporate Governance practices enable the Company to make informed and ethical decisions, foster a culture of continuous improvement, and navigate the complexities of global aviation markets, thereby securing a competitive edge and ensuring long-term success.

The Company has completed the operational safety audits conducted by the International Air Transport Association (IATA), or known as the IATA Operational Safety Audit (IOSA). The audits comprise the operational and functional areas of the airline including but not limited to organizational and management systems, flight operations, operational control and flight dispatch, aircraft engineering and maintenance, cabin operations, ground handling operations, cargo operations, safety and security management. The Company also asserts to continuously improve the quality of its internal control system, risk management, and strives to comply with the regulations.

Legal Basis of Corporate Governance Implementation

In implementing Corporate Governance, the Company refers to the prevailing laws and regulations including capital market authority regulations and best practices, as well as the Company’s internal regulations, among other as follows:

1. Law of the Republic of Indonesia No. 40 of 2007 concerning Limited Liability Companies.
2. Law of the Republic of Indonesia No. 8 of 1995 concerning Capital Market as amended by UUP2SK.
3. Regulation of the Financial Services Authority (POJK) and Financial Services Authority Circular Letter (SEOJK), as follows:
   • POJK No. 33/POJK.04/2014 on the Board of Directors and Board of Commissioners of Issuers or Public Companies.
   • POJK No. 34/POJK.04/2014 on the Nomination and Remuneration Committee for Issuers or Public Companies.
   • POJK No. 35/POJK.04/2014 on Corporate Secretary of Issuers or Public Companies.
   • POJK No. 21/POJK.04/2015 on Implementation of Corporate Governance Guidelines for Public Company.
   • POJK No. 55/POJK.04/2015 concerning the Establishment and Working Implementation Guidelines for Audit Committee.
   • POJK No. 56/POJK.04/2015 concerning the Establishment and Guidelines for Drafting an Internal Audit Unit Charter.
   • POJK No. 11/POJK.04/2017 concerning Ownership Reports or Any Changes in Share Ownership of Public Companies.
   • POJK No. 15/POJK.04/2020 concerning the Plan and Holding of the General Meeting of Shareholders of a Public Companies.
   • SEOJK No. 32/SEOJK.04/2015 on Guidelines for the Governance of Public Companies.
4. ASEAN Corporate Governance Scorecard (ACGS) issued by ASEAN Capital Market Forum (ACMF);
5. General Guidelines for GCG Indonesia issued by the National Committee on Governance Policy (KNKG);
6. The Company’s Articles of Association.
7. The Company's Internal Regulations (including the Code of Conduct, Board Charters, Anti-Corruption and Anti-Bribery Policy, Whistleblowing Policy, Company Regulations, and other Company policies related to GCG).

Internal implementation of GCG is carried out based on the Company's Articles of Association and the internal policies contained therein as well as operational policies, codes of conduct, and whistleblowing systems.

Board Manual

Good Corporate Governance Guidelines

Corporate Governance Principles

To manifest the implementation of good governance, the Company adheres to the basic principles of Corporate Governance in accordance with the INDONESIA CORPORATE GOVERNANCE GENERAL GUIDELINES (PUG-KI) 2021 that have been updated by the Governance Policy National Committee (KNKG), namely Ethical Conduct, Accountability, Transparency, and Sustainability.

Corporate Governance Principles Implementation in the Company

1. Ethical Conduct
   In carrying out its activities, the company always prioritizes honesty, treats all parties with respect, fulfills commitments, builds and maintains moral values and beliefs consistently. The company pays attention to the interests of shareholders and other stakeholders based on the principles of fairness and is managed independently so that each organ of the company does not dominate each other and cannot be intervened by other parties.
2. Accountability
   The company can account for its performance transparently and reasonably. As such, the company must be managed correctly, measurably and in accordance with company interests while taking into account the interests of shareholders and stakeholders. Accountability is a necessary prerequisite for achieving sustainable performance.
3. Transparency
   To maintain objectivity in conducting business, the company provides material and relevant information in a way that is easily accessible and understood by stakeholders. The Company takes the initiative to disclose not only issues required by laws and regulations, but also those that are important for decision-making by shareholders, creditors and other stakeholders.
4. Sustainability
   The company complies with laws and regulations and is committed to carrying out its responsibility towards society and the environment in order to contribute to sustainable development through cooperation with all relevant stakeholders to improve community lives in a way that is in line with business interests and the sustainable development agenda.

Corporate Governance Roadmap

The focus of the Company's Roadmap for the next 5 (five) years is to improve the quality of the Company's Corporate Governance implementation through a number of stages, as follows:

1. Strengthening Corporate Governance quality
2. Disseminating/raising awareness and reviewing Corporate Governance implementation
3. Strengthening integrated governance and optimizing Corporate Governance implementation

Corporate Governance Implementation in 2023

Corporate Governance implementation in 2023 has been aligned with the Corporate Governance Roadmap with the following activities:

1. Adjustment and Compliance of the Company’s Corporate Governance with Prevailing Regulations.
2. Evaluation of Corporate Governance implementation to acknowledge and measure the suitability of good corporate governance practices in the Company with Corporate Governance principles.
3. Dissemination of Corporate Governance policies to all employees such as the Board of Commissioners and Board of Directors Guidelines, Audit Committee Charter, Nomination & Remuneration Committee Charter, Good Corporate Governance Guidelines, and Corporate Secretary Charter.
4. Board Manual Dissemination to the Board of Commissioners and Board of Directors.
5. Re-emphasize on Air Asia Code of Conduct Guidelines and Corporate Culture to new and existing employees.
6. Comprehensive training program on Corporate Governance best practices for the Company’s management and employees

Governance Structures

Corporate Governance Structure in the Company is a comprehensive framework designed to ensure the effective management and oversight of the organization, aligning with the best interests of shareholders, employees, customers, and other stakeholders. This structure is critical for the Company due to the complex nature of its operations, regulatory requirements, and the need for high standards of safety and customer service. The structure encompasses Governance Structure, Governance Process, and Governance Outcome, each playing a pivotal role in achieving transparency, accountability, and corporate ethics.

Governance Structure

The Governance Structure in the Company includes the main organs and supporting organs. The main organs consist of the General Meeting of Shareholders, the Board of Commissioners and the Board of Directors. Meanwhile the supporting organs consist of Executive Management, and various committees. The Board of Directors holds the ultimate responsibility for the strategic direction and oversight of the company, ensuring it adheres to legal and ethical standards. Executive Management, including the CEO and senior managers, are tasked with the day-to-day operations and implementation of the Board's strategies. Committees are specialized groups that focus on critical areas of governance, such as financial auditing, risk evaluation, and operational safety, ensuring compliance with industry regulations and standards.

The Company’s governance structure is established based on the function, authority and responsibilities of each organ in accordance with Law No. 40 of 2007, Financial Services Authority regulations, and Stock Exchange Regulations.

Governance Process

The Governance Process involves the methods and procedures used to make decisions, monitor performance, and communicate with stakeholders. This includes regular board meetings, strategic planning sessions, performance evaluations, and stakeholder engagement activities. In the Company, this process is crucial for addressing operational challenges, such as route planning, fleet management, and safety protocols, while also ensuring financial sustainability and regulatory compliance. The process is underpinned by a strong ethical framework that promotes integrity, transparency, and accountability in all actions.

Governance Outcome

Governance Outcome refers to the results and impacts of implementing effective corporate governance in the Company. These outcomes include enhanced operational efficiency, improved safety records, financial stability, and increased customer satisfaction. Good governance also fosters a positive corporate culture that values ethical behaviour, environmental sustainability, and social responsibility. Ultimately, these outcomes contribute to the Company’s reputation and competitiveness in the market, attracting investors and customers alike.

For the Company, integrating these aspects of corporate governance is essential for navigating the industry's inherent risks and challenges while maintaining a commitment to safety, quality, and compliance. Effective governance structures and processes lead to outcomes that not only meet regulatory standards but also exceed stakeholder expectations, ensuring the long-term success and sustainability of the Company.

The Company’s GCG structure is broadly divided into Main Organs and Supporting Organs as follows: