Table of Content

Performance Highlights 2020 04

Awards and Certifications 06

Message from Director 08

Responsibility for Sustainability Report 09

About Sustainability Report 10

Company Profile 18

Governance 30

Economic Performance 38

Environmental Performance 42

Social Performance 51

Standard GRl Index 60

Index POJK No.51/POJK.03/2017 62

SDG’s 63

Feedback Sheet 65

PT. Indo Kordsa, Tbk | www.indokordsa.com PERFORMANCE 01 HIGHLIGHTS 2020

Economy Net Total Total Sale Asset Debt 168.492.294 263.740.526 55.218.439

Company Total Loss Capitalization 4.432.414 1.022.117

Social (203-1) ISMO (IndoKordsa Sustainability Movement) describes Indo Kordsa’s commitment in the form of corporate responsibility to 3 pillars:

People Planet Profit Social Environment Economy

Indo Kordsa Sustainability Report 2020 March 2020 Online Socialization of Coronavirus (COVID-19) Prevention Efforts. The purpose of this socialization is to protect the Company’s employees from the COVID-19 pandemic by complying with the health protocol regulations established by the government .

April 23, 2020 Face Mask Donation to Three Villages. The company donated masks to each of the villages located around the Company, namely Sanja Village, Sukahati Village, and Karang Asem Timur Village.

May 15, 2020 Face Mask Donation to Sub-District of Citeureup. The Company donated 100 boxes of masks to Citeureup Sub-District in the context of caring for the prevention of COVID-19 to the area around the factory. The aid was received directly by the Head of Citeureup Sub-District. Environment Indo Kordsa’s responsibility, is by participating and preserving the environment through Indo Kordsa’s efforts to recycle, reuse, compost processing which is proof of Indo Kordsa’s responsibility to the environment.

3 Total water withdrawal: (m ) Waste Management: CO2 GHG Emissions 202014.095 tCO2e River (surface), lake, or Total weight of hazardous waste, sea water with a breakdown based on the Tons following disposal methods if applicable:

Tons Total weight of non-hazardous waste, as described according to the following disposal method Tons if applicable: (Total domestic waste + reuse of sorted internal + waste used by external recycling). Tons

Total volume of water recycled usage: (m3) Treated hazardous 2020 Transported waste (filter press 38.430 hazardous waste cake latex) Tons Tons 5

PT. Indo Kordsa, Tbk | www.indokordsa.com Awards and Certifications (102-12)

• Golden Taxpayer from the Directorate General of Taxation. • Crowned as a loyal customer of PT. PGN since the Company became its customer in 1984 (34 years) from PT. Perusahaan Gas Negara Tbk (PGN), December 15, 2018 • Anti-Corruption Awards From the Directorate General of Customs and Excise Quality Management System ISO 9001: 2015 by Lloyd’s Register Indonesia. • Occupational Health and Safety Management System Certificate from the Ministry of Manpower of the Republic of Indonesia for PT Indo Kordsa, Tbk and PT Indo Kordsa Polyester. Issued on September 17 2020 and is valid for three years. • Environmental Management System ISO 14001: 2015 by Lloyd’s Register Indonesia. Valid until May 18, 2023.

Indo Kordsa Sustainability Report 2020 • 100 Fastest Growing Companies Award from Infobank Magazine. • Best Trade Financial Solution Award, Award from The Assets Triple A among all companies in Indonesia for successfully increasing working capital by using the Letter of Credit import facility in collaboration with Standard Chartered Bank. • Stars Award 2019 - Global Synergy Category: Security Operating Center from Kordsa. • Kordsa’s All Stars - Cost Improvement Category Award. • All Stars Award - Best Total Productive Maintenance from Kordsa. • All Stars Award - Best Kordsa Improvement Team from Kordsa. • All Stars - Global Sinergy from Kordsa Category: GTPM-P.176 New Gen. Polyester Yarn

Development, GTM-P.288 development of New Generation Low DSI Polyester Fabrics. • All Stars Award - Commercial Approval Success from Kordsa Category: Hankook Hungary NY. • All Stars Award - Best Total Productive Maintenance from Kordsa. • Best Supplier on Implementing Quality Assurance System. • Worker Champion Award (Champion I) in the Manufacturing Sector, West Java Province in 2019, from the Government of West Java Province. • TEMPO Country Contributor Awards 2019. This award is given to 23 public companies from 631 selected public companies. The parameters used by the assessment team were as follows: (1) Company Tax Turnover Ratio (CTTOR); (2) Effective Tax Rate (ETR); and (3) Payment of Company Annual Taxes. • Corporate Annual Financial Report Award from the Ministry of Trade of the Republic of Indonesia.

PT. Indo Kordsa, Tbk | www.indokordsa.com Message from Director (102-14)

As a ‘Reinforcer’, Indo Kordsa support every step towards a better future. From time to time, this support is transformed into activities that have a positive impact on economic, social and environmental aspects. Therefore, we are part of Kordsa, proud to present the first edition of the “2020 Indo Kordsa Sustainability Report”.

From a broad perspective, from the expectations and priorities of Kordsa employees, clients, shareholders and investors regarding sustainability, in the coming period, Kordsa will focus on five main areas of the United Nations Sustainable Development Goals. The five areas are: “Industry Innovation and Infrastructure”, “Responsible Consumption and Production”, “Decent Work and Economic Growth”, “Gender Equality”, and “Quality Education”.

Ibrahim O. Yildirim President Director

Indo Kordsa Sustainability Report 2020 Through that perspective, we support better education by providing academic scholarships to bright students in our community to support better education. We believe that scholarships will provide opportunities for children to improve their facilities and learning environment. In addition, to build healthy and resilient communities, we also participate in improving health facilities. We believe that strong education and health can be a pillar that improves the economy of the surrounding community.

We believe that Indo Kordsa’s business also provides economic benefits to the surrounding community, especially in developing mutually supportive partnerships. We also embrace the surrounding community by inviting local entrepreneurs to partner and grow together. We believe that the environment has a big influence in strengthening and building the resilience of our company.

To maintain a strong work ethic in our company, we always fulfill and comply with any regulations set by the government; one of them is to maintain and preserve biodiversity. We are putting our best efforts and resources to minimize our carbon footprint by reducing energy consumption and waste output through various programs and innovations. Therefore, on this occasion, I would also like to express my gratitude to Kordsa’s life- enhancers who have given their best initiatives to support the efficient use of energy in their daily activities. We will always appreciate any changes and efforts to improve a safe and comfortable workplace for all of us.

Committed to the vision of “Inspired to strengthen life”, we will continue to be committed to strengthening lives and preserving the environment as well as increasing the positive impact of our operations on everyone around us.

Responsibility for Sustainability Report Board of Commissioners and Directors of PT. Indo Kordsa Tbk. has evaluated and claimed full responsibility for the accuracy of the contents of this Sustainability Report, including financial statements and other related information.

Ibrahim O. Yildirim President Director 9

PT. Indo Kordsa, Tbk | www.indokordsa.com ABOUT 02 SUSTAINABILITY REPORT

Indo Kordsa Sustainability Report 2020 This report is prepared based on POJK No.51/POJK.03/2017 concerning the Implementation of Sustainable Finance for Financial Service Institutions, Issuers and Public Companies as well as the GRI Standards (GRI Standards) which are officially effective as of July 1, 2018.

PT. Indo Kordsa, Tbk | www.indokordsa.com About Sustainability Report

2020 Indo Kordsa Sustainability Report is the first report published by PT Indo Kordsa Tbk., and is submitted for the period January 1st to December 31st, 2020. This report is planned to be published annually. The information conveyed in the report comes from the Head Office of PT Indo Kordsa, Tbk, except for consolidated financial data, including financial data from all Subsidiaries. (Disclosure 102-45, 102-50, 102-51, 102-52).

The publication of this report is part of the implementation of the principles of Good Corporate Governance, namely Transparency, Accountability, Responsibility, Independence and Fairness. The publication of the report is also a form of our commitment to comply with the provisions of Article 66 paragraph 2c, Law No. 40 of 2007 concerning Limited Liability Companies (PT), which requires PT Indo Kordsa, Tbk to submit a report on the implementation of Social and Environmental Responsibility (TJSL) in the Annual Report. The issuance of this report is also our effort to fulfill our obligations as stipulated in OJK Regulation No. 51/POJK.03/2017 concerning the Implementation of Sustainable Finance for Financial Service Institutions, Issuers, and Public Companies.

Indo Kordsa Sustainability Report 2020 This report has been prepared based on POJK No.51/POJK.03/2017 concerning the Implementation of Sustainable Finance for Financial Services Institutions, Issuers and Public Companies as well as the GRI Standards, which officially took effect as of July 1, 2018. The GRI Standards are the reference that issued by the Global Sustainability Standards Board (GSBB) - an institution established by the Global Reporting Initiative (GRI) to handle the development of sustainability reporting standards. In accordance with the options provided in the GRI Standards, namely Core Choices and Comprehensive Choices, this report has been prepared in accordance with the GRI Standards: Core Choices. (102-54)

PT Indo Kordsa, Tbk strives to convey all information that needs to be disclosed, as specified in the GRI Standards. All information that is fulfilled in this report is indicated by the inclusion of the GRI Standard disclosure number at the back of the relevant sentence or paragraph. This is expected to make it easier for readers to find related information for each disclosure. Complete data on the compatibility of company information with the GRI Standard Index is presented at last page of this report. (102-55, 102-48, 102-56)

PT. Indo Kordsa, Tbk | www.indokordsa.com Content Determination Process (102-46)

Report is prepared based on the principles of Sustainability Report, namely the principles of content and quality. 01

Content Principles

Stakeholder involvement: Stakeholders are involved in determining their opinion on the importance of issues that need to be addressed in the report. Involvement was carried 1 out through focus group discussions and the distribution of a Materiality Test survey with respondents from the company’s internal and external stakeholders. (102-43)

Sustainability Context: The report is prepared in accordance with the Company’s strategy for the year and in line with 2 the context of sustainable finance.

Materiality: 3 Material topics are the main topics used in preparing this report.

Completeness: Information presented in narrative and numeric as qualitative and quantitative information to 4 provide completeness for readers. 14

Indo Kordsa Sustainability Report 2020 02

Quality Principles

Balance: Information related to outcomes and achievements, as well as challenges, is conveyed in accordance with company conditions

Comparability: Efforts are made to ensure that the data presented in the report is presented in the last 3 years.

Accuracy: The figures and information have been checked internally by the Company to ensure their accuracy.

Punctuality: This report is presented on time together with the Annual Report as material for discussion at the General Meeting of Shareholders.

Clarity: The information presented in the report is easy to understand.

Reliability: The data and information presented come from data sources that have been approved and verified by the authorities.

PT. Indo Kordsa, Tbk | www.indokordsa.com Determination of Report Content

Identification: Validation: Overview:

Relevant sustainability topics are All material topics to be presented in Input from stakeholders, is used to identified based on the industry the report are approved, reviewed, & improved quality of this sustainability characteristics of the company type validated by management team. report. and the impact on stakeholders.

Materiality Survey Result (102-46)

To obtain material topics in the report, PT Indo Kordsa, Tbk has conducted a Focus Group Discussion (FGD) located at PT Indo Kordsa, as well as a Materiality Test by conducting surveys from internal and external stakeholders. Respondents were asked to fill in and rate 14 potential Material Topics that had been agreed upon in the FGD, and obtained 6 (six) Material Topics. In this report, Material Topics are topics that receive a score of 4 (Important) and 5 (Very Important) from the respondent. The 6 material topics are Economic Performance, Employment, Occupational Health and Safety, Training and Education, Diversity and Equal Opportunity.

Change in Material Topics (102-49)

In accordance with the involvement of stakeholders through FGDs and Materiality Test Surveys, material topics obtained in this report are 6 (six) Material Topics.

Indo Kordsa Sustainability Report 2020 Limitation of Impact on Material Topics and Management Approach (102-47, 103-01, 103-02, 103-03)

The material topics in this Report, as stated in the GRI Standards, are topics that have been prioritized by the organization for inclusion in the report. The dimensions used to determine priorities, among others, are impacts on the economy, environment, and society. The impacts in this report include those that are positive. The determination of material aspects and boundaries is based on issues that have a significant impact on the company, Subsidiaries and all Stakeholders.

Feedback (102-53) For two-way communication to happen, we provide a Feedback Sheet at the end of this Report. To our stakeholders, we invite you to submit suggestions, input and questions regarding the data and information presented in this report so that we can improve the quality of our reports and our future sustainability performance.

Access to Information on Sustainability Reports PT Indo Kordsa, Tbk provides accessible information for all stakeholders, as well as the public, to access this Sustainability Report. If you have any questions regarding the contents of the Report, please contact: (102-53)

PT. INDO KORDSA, Tbk Jalan Pahlawan, Desa Karang Asem Timur Citeureup, Bogor 16810, Indonesia Tlp. (62-21) 8752115 Fax. (62-21) 879 12252 / (62-21) 875 3934 www.indokordsa.com

PT. Indo Kordsa, Tbk | www.indokordsa.com COMPANY 03 PROFILE

PT Indo Kordsa, Tbk in Brief

The company was founded in 1981 under the name PT Branta Mulia as the main supplier of premium tire reinforcement materials in the Southeast Asia region. Since its establishment, the Company has a mission to produce products with number one quality, performance with high professionalism and a strong commitment to provide excellent service to customers. With the support of quality human resources, the Company has succeeded in maintaining its business continuity to this day.

Indo Kordsa Sustainability Report 2020 In 1985, the Company started operations at its first tire cord fabric (TCF) factory in Citeureup, Bogor, West Java. Subsequently, commercial operations began on April 1, 1987. The Company’s shares were listed on the Jakarta Stock Exchange and the Surabaya Stock Exchange in 1990 under the name PT Branta Mulia Tbk.

Developments and improvements have been made for the progress of the Company, including:

1. In October 1990, the Company expanded in Thailand by establishing a joint venture company named Thai Branta Mulia Co. Ltd. In 1993, Thai Branta Mulia Co. Ltd. started its TCF production in Ayutthaya, Thailand. 2. The Company in collaboration with Teijin Limited Japan established a joint venture company named PT Branta Mulia Teijin Indonesia in early 1996 to produce polyester yarn and the first commercial production started in 1997 where the factory is located in Citeureup, Bogor, West Java.

In 1997, DuPont Chemical and Energy Operation Inc. acquired 19.78% of the Company’s shares. The acquisition gave a new life to the company because it creates a strategic alliance for the Company’s business. The cooperation ended in 2006 when DuPont sold all of its shares to several of the founding shareholders of the Company. In 1999, the Company revoked the listing of its shares on the Surabaya Stock Exchange (SSE). In 2000 the Company increased its share ownership in Thai Branta Mulia Co Ltd from 49% to 64.19%.

In 2006, Kordsa Teknik Tekstil A.S. (Kordsa), a subsidiary of Sabanci Holding Group, Turkey, acquired 51.3% of the Company’s shares. Then in 2018, Kordsa again increased its shares to 61.59%. The company then changed its name to PT Indo Kordsa Tbk., While PT Branta Mulia Teijin Indonesia changed its name to PT Indo Kordsa Teijin.

In 2008 the Company increased its share ownership in PT Indo Kordsa Teijin to 99.90% through the purchase of shares owned by Teijin Fibers Limited, Japan. So that in 2009, PT Indo Kordsa Teijin changed its name to PT Indo Kordsa Polyester (IKP). In the following year, the Company continued its modernization and production efficiency efforts and expanded its production capacity by completing a comprehensive modernization of the nylon yarn factory, building a tire cord factory No. 2 (TCF 2) is also expanding in the polyester yarn factory. The TCF 2 facility and expansion in the polyester yarn factory were inaugurated in early 2015 by the Minister of Industry of the Republic of Indonesia, Mr. Saleh Husin and the Regent of Bogor, Ms. Nurhayanti.

Currently, the Company’s TCF factories can produce tire cord fabrics up to 60 kilo tons per year. Meanwhile, the production of polyester and nylon yarns is 39 kilo tons and 24 kilo tons. In 2019, the Company continued to optimize the implementation of Total Productive Management Initiatives (TPM) and various strategies of excellence to take advantage of growth opportunities even in these challenging conditions. (102-1)

PT. Indo Kordsa, Tbk | www.indokordsa.com Company Identity (102-1, 102-2, 102-3, 102-4, 102-5, 102-13)

PT. Indo Kordsa, Tbk Jl Pahlawan, Desa Karang Asem Timur, Citeureup, Bogor, 16810 Indonesia

Legal Basis of Establishment Ministerial Decree YA5 / 88/3. Dated March 2, 1982

Establishment Year 1981

Legal Entity Status Foreign Investment (PMA)

Stock code BRAM

Number of employees 1.102

Membership

• AmCham Indonesia American Chamber of Commerce in Indonesia Telp : 021 8752115 • APINDO The Employers’ Association Fax : 021 8753934 of Indonesia www.indokordsa.com • HIBERKIBRA - Neighborhood Corporate Association • Indonesian Public Listed Companies Association • Indonesian Corporate Secretary Association

Indo Kordsa Sustainability Report 2020 VISION Inspired to strengthen life.

MISSION Providing high quality reinforcing material around the world.

Initiative & Human Resources Pillars

Business Advantage Growth Innovation •Operational Excellence. • Growth in the Tire Industry. • Innovations in Materials Science. • Digital Transformation. • Growth in the Composites Industry. • Innovations in Tire Technology. • Effective Financial Aspects • Growth in New Industries. • Innovations in Composite and Risk Management. Technology. • Commercial Advantage. • Effective Innovation Management.

Potential Motivation Utilization

PT Indo Kordsa, Tbk is committed to managing the production process professionally and providing the best service for each of its Market customers. PT Indo Kordsa, Tbk’s customers as of 2020 are consisted of Indonesia 27.54%, Japan 11.49%, Korea 7.69%, Vietnam 5.93%, (102-6) Taiwan 3.95%, and others 43.40%. With the conclusion that the market Served PT Indo Kordsa Tbk serves domestic and overseas.

PT. Indo Kordsa, Tbk | www.indokordsa.com Company Culture (102-16)

SHE (Safety and Health & Work Environment). Our priority is human. “We work carefully, discipline and programmed. 01 Following the SHE rules, we create a safe work area “.

Ethics. 1. I comply with company ethics and regulations 02 2 I behave honestly in every applicable legal action.

Focus on the Customer. 1. I listen to and understand customers’ voices, and meet their needs. 03 2 I provide the best solutions to customers on time.

Courage. 1. I make a significant contribution, take measured risks and take responsibility for the company’s 04 success. 2. I think innovatively to develop new products, technology, processes, and self-performance.

Indo Kordsa Sustainability Report 2020 Passion. 1. I work with all my heart to achieve my best. 05 2. I am unyielding and enthusiastic to achieve company targets.

Collaboration. 1. I work with all interested parties including colleagues, suppliers and 06 customers. 2. I proactively contribute, be ready to help, and learn from others.

Continuous Improvements. 1. I actively participate in the CI program by identifying problems, analyzing 07 root causes, and making improvements and standardization. 2. I care about the problem at hand and am ready to come up with ideas for improvements.

PT. Indo Kordsa, Tbk | www.indokordsa.com Organizational Structure

Indo Kordsa Sustainability Report 2020 25

PT. Indo Kordsa, Tbk | www.indokordsa.com Company Scale (102-7)

2018 1.196 people

2019 1.149 people

Number of 2020 1.121 people Employees

Net

Sales 2018 $264.440.260

2019 2020 $245.619.303 $168.492.294

Indo Kordsa Sustainability Report 2020 Capital Expenditure 2018 $7.400.976 2019$4.649.061 2020 $1.022.117

Production Quantity

Tire Cord Fabric 57,026 kilo tons / year 2018Polyester yarn 22,802 kilo tons / year Nylon yarn 39,875 kilo tons / year

Tire Cord Fabric 49,684 kilo tons / year 2019Polyester yarn 32,210 kilo tons / year Nylon yarn 20,780 kilo tons / year

Tire Cord Fabric 41,309 kilo tons / year 2020Polyester yarn 30,051 kilo tons / year Nylon yarn 15,857 kilo tons / year

PT. Indo Kordsa, Tbk | www.indokordsa.com Employees (102-8, 405-1)

Employees are one of the important assets for PT Indo Kordsa, Tbk in running a business. As of December 31, 2020, total number of employees was 1,121, a decrease of 47 people compared to 2019, which was 1,149 people. Employees data in this report was obtained from the Human Capital database as of December 31, 2020. All company operational activities are carried out by employees which are either permanent, non-permanent (contract) or trainees and based on employment contracts based on region.

Total number of employees based on employment contracts (permanent and temporary), based on gender.

Divided by region:

Indo Kordsa Sustainability Report 2020 Supply Chain (102-9)

In running our business, we collaborate with suppliers of goods and services. Type of suppliers :

Total 1.274Vendors Contractor: 4 vendors Cont. and material: 32 vendors 2018 Material: 656 vendors Mat. and service: 279 vendors Service: 301 vendors Others: 2 vendors

We are committed to involving local suppliers, namely suppliers whose business locations Total are located around the company’s operational 1.395Vendors offices. With this policy, the company is Contractor: 4 vendors optimistic that it can play a role in empowering Cont. and material: 32 vendors local suppliers, as well as developing and Material: 746 vendors improving the economy of the local community. 2019 Mat. and service: 300 vendors The local suppliers in this report are suppliers Service: 311 vendors Others: 2 vendors whose business locations are within the same province as the company’s operations.

Total 1.441Vendors Contractor: 4 vendors Cont. and material: 32 vendors 2020 Material: 792 vendors Mat. and service: 300 vendors Service: 311 vendors Others: 2 vendors

PT. Indo Kordsa, Tbk | www.indokordsa.com 04 GOVERNANCE

Indo Kordsa Sustainability Report 2020 31

PT. Indo Kordsa, Tbk | www.indokordsa.com Structure of Company Governance (102-18)

The implementation of Good Corporate Governance (GCG) in the Company is carried out in accordance with the provisions of laws and regulations in Indonesia and adapting GCG best practices that are generally accepted. The basis of regulations related to the implementation of GCG in Indonesia, among others, refers to the Financial Services Authority Regulation (POJK) regarding the Company’s status as an issuer, including:

• POJK No. 15/POJK.04/2020 concerning Planning and Execution of General Meetings of Shareholders for a Public Companies. • POJK No. 33/POJK.04/2014 concerning the Board of Directors and Board of Commissioners for Listed or Public Company. • POJK No. 34/POJK.04/2014 concerning the Nomination and Remuneration Committee for Listed or Public Company. • POJK No. 35/POJK.04/2014 concerning the Corporate Secretary in Listed or Public Company. • POJK No. 21/POJK.04/2014 concerning the Implementation of GCG. • POJK No. 31/POJK.04/2015 concerning Information or Material Facts Disclosure by a Listed or Public Company. • Circular Letter (SE) of OJK No. 32/SEOJK.04/2015 concerning Governance Guidelines for Public Companies. • POJK No. 8/POJK.04/2015 regarding Websites of Listed or Public Company. • POJK No. 55/POJK.04/2015 concerning the Formation and Guidelines of the Audit Committee. • POJK No. 56/POJK.04/2015 concerning Formation and Guidelines for Establishment of the Internal Audit Unit Charter. • POJK No. 13 / POJK.03 / 2017 concerning Use of Public Accountant Services and Public Accounting Firms and Financial Service Activities.

In addition to these regulations, the Company has also adapted provisions related to the implementation of GCG which are included in the Indonesian GCG Guidelines by the National Committee for Governance Policy (KNKG).

GCG Implementation Mechanism

Consistently, the Company improves corporate governance mechanisms and structures to ensure accountability in business processes and encourages checks and balances among all Company Organs. Based on the principles of GCG, the Company has implemented a GCG structure and mechanism consisting of the main organs and supporting organs. The main organs of the Company include the General Meeting of Shareholders (GMS), the Board of Commissioners, the Board of Directors, the Audit Committee and the Nomination and Remuneration Committee as the Board of Commissioners Committee. These main organs are supported by the supporting organs of GCG, including the functions of Internal Audit and Corporate Secretary. All Company Organs work together in accordance with the basis of GCG regulations and guidelines with a clear division of tasks and responsibilities. The Company also regulates all Company Organs to prepare a work plan and submit an annual activity report as an evaluation of the realization of the concerned work program.

Indo Kordsa Sustainability Report 2020 GMS The General Meeting of Shareholders (GMS) is the highest authority in the Company. The GMS is a forum where Management, represented by the Board of Commissioners and the Board of Directors, submits accountability reports to shareholders and stakeholders related to the implementation of tasks during the fiscal year concerned. The Company General Meeting of Shareholders (GMS) is the highest authority in the Company. The Company holds a GMS in accordance with the provisions in the Financial Services Authority Regulation Number 15 / POJK.04 / 2020 concerning the Planning and Execution of the General Meeting of Shareholders for a Public Companies. There are two types of GMS, namely the Annual GMS and the Extraordinary GMS. The Annual GMS (AGMS) is a GMS that is held regularly, while an Extraordinary GMS can be held at any time if deemed necessary.

Board of Commissioners The Board of Commissioners is the Company’s organ that has the duty and authority to supervise the management activities carried out by the Board of Directors. The Board of Commissioners is also tasked with providing input regarding the policies of the Board of Directors, the Company’s development plans, the Company’s work plan and Annual Budget, the implementation of the provisions of the Articles of Association, the implementation of GMS resolutions and compliance with all applicable laws and regulations. In carrying out its duties, the Board of Commissioners acts collegially.

In accordance with the Company’s Articles of Association, the Board of Commissioners consists of at least 3 (three) members. All Commissioners are appointed by the General Meeting of Shareholders (GMS) and the term of office starts from the closing of the GMS to the closing of the GMS in the 5th (fifth) financial year from the date of appointment. Members of the Board of Commissioners can be reappointed after the term of office ends. The GMS has the authority to dismiss all members of the Board of Commissioners at any time before the term of office ends by stating the reasons for the dismissal. However, the relevant members of the Board of Commissioners have the opportunity to present their defense before the GMS. The composition of the Board of Commissioners also accommodates the position of Independent Commissioners who are appointed from independent parties. Independent Commissioners do not have a conflict of interest or other matters that could affect their independence.

Referring to the Company’s Articles of Association, the Board of Commissioners has the following duties and responsibilities:

1. Supervising the management of the Company carried out by the Board of Directors and providing advice and approval if deemed necessary with regard to the policies of the Board of Directors in the interest of the Company. As well as carrying out duties, powers and responsibilities in accordance with the provisions of the Articles of Association of the Company and the resolutions of the GMS as well as the prevailing laws and regulations. 2. Following the development of the Company’s performance and immediately report to the GMS if the Company shows signs of a drastic decline in performance which could have a material impact on the Company’s business activities, accompanied by appropriate solutions that must be taken by the Board of Directors.

PT. Indo Kordsa, Tbk | www.indokordsa.com Independent Commissioner Based on OJK regulation No. 33 / POJK.04 / 2014 concerning Directors and Board of Commissioners of Issuers or Public Companies, the number of Independent Commissioners is at least 30% of the total members of the Board of Commissioners. As of December 31, 2020, the Company has complied with the regulation by appointing 2 (two) Independent Commissioners.

Directors The management of the Company is the duty of the Board of Directors. As the Company’s organ, the Board of Directors has a special responsibility in managing the Company and achieving the Company’s targets as stated in the Company’s Work Plan and Budget (RKAP). The Directors work collectively with the division of duties among the Directors in accordance with the Articles of Association of the Company.

Board of Directors is appointed through the GMS mechanism for a certain period of time, starting from the closing of the GMS in the year of their appointment to the closing of the GMS in the fifth year after the date of their appointment. The GMS may dismiss a member of the Board of Directors at any time if the decision made by the Board of Directors is contrary to the interests of the Company and the prevailing laws and regulations. The Board of Directors carries out its duties and responsibilities in accordance with the Board Charter / Board Manual which was prepared in accordance with the provisions of the Financial Services Authority (OJK) No.33 / POJK.04 / 2014 concerning the Board of Directors and Board of Commissioners of Issuers or Public Companies.

The Board of Directors of the Company collectively has the following duties and responsibilities:

1. Manage the Company in accordance with the direction of the shareholders; 2. Implementing a system of internal control, good corporate governance and managing and protecting the Company’s assets; 3. Representing the Company inside and outside the court.

Audit Committee The Company has established an Audit Committee since 2007 as a Committee under the Supervision of the Board of Commissioners to assist the Board of Commissioners in carrying out its supervisory and advisory functions, especially in carrying out duties related to audit activities. The establishment of the Audit Committee refers to POJK No.55 / POJK.04 / 2015 concerning the Formation and Implementation of Audit Committee Duties, which requires all companies listed on the Stock Exchange or public companies to form an Audit Committee. The Audit Committee Charter was ratified by the Board of Commissioners on January 5, 2015. The charter describes the objectives, structure and composition, qualifications, responsibilities, authority and procedures of the Audit Committee meetings.

The Audit Committee has at least 3 (three) members. An Independent Commissioner who is appointed to become a member of the Audit Committee automatically becomes the Chairman of the Audit Committee. The Board of Commissioners appoints two other independent members as members of the Audit Committee. The Board of Commissioners, at its sole discretion, may add members to the Audit Committee if deemed necessary.

Indo Kordsa Sustainability Report 2020 Internal Audit Unit The Internal Audit function is carried out by the Internal Audit Unit which was established to provide independent and objective opinions including consultancy activities and special investigations required by the Board of Directors, the Board of Commissioners, the Audit Committee or other management parties. The establishment of the Internal Audit Division of the Company is in accordance with POJK No.56 / POJK.04 / 2015 concerning the Establishment and Guidelines for the Establishment of an Internal Audit Unit for Public Companies.

The purpose of Internal Audit is to provide an independent, objective opinion, consultancy services, and also carry out specific investigations as requested by the Board of Directors, Board of Commissioners, Audit Committee or senior executive management, all of which are designed to provide added value and improve the Company’s operations. Internal Audit helps the Company achieve its objectives through a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and compliance with applicable laws and regulations.

PT. Indo Kordsa, Tbk | www.indokordsa.com Risk Management (102-11) In line with increasing business challenges and competition, the Company faces various risks related to business and operational activities. To build a sustainable business, the Company has prepared a series of management initiatives ranging from identification, mitigation and evaluation of risk management. The risk management function in the Company is carried out by the Board of Directors. These functions include preparing and designing key risk indicators to map the risk profile and plan further risk mitigation to be implemented in the Company.

Code of Conduct (102-16) The Company’s Code of Conduct is a norm that must be obeyed by the Company and all levels of the Company’s management. The Code of Conduct is applied as an ethical guideline in the Company. The objectives of implementing the Company’s Code of Conduct are:

1. Increasing the credibility of the Company, because ethics has become the daily culture of the Company. With the existence of a code of Conduct, all employees are bound by the same ethical standards so that similar policy/decision making will be achieved. 2. Helping eliminate gray areas (unclear areas) in the field of ethics, including receiving gifts. 3. The Code of Conduct explains how the Company upholds its social responsibility. 4. Helping the Company to control itself (self-control).

The Code of Ethics regulates the Business Ethics and the Supporting Policies for the Code of Conduct in the Company. The guidelines consist of regulations regarding legal responsibility, responsibility to customers, responsibility to employees, responsibility to shareholders, responsibility to suppliers / business partners, responsibility to competitors, responsibility to the environment, community, society and humanity and responsibility to protect the image and reputation of the majority shareholder. The Code of Conduct also regulates other policies such as Safety, Health and Environment (SHE) policies, policies related to employees, Company assets and financial integrity, business partners and government as well as the Kordsa Group Share Transaction Policy.

The Company socializes the Code of Conduct, including:

1. Socialization through the Company’s internal website. 2. Provide online training. 3. Providing booklet socialization. 4. Creating posters of socialization content. 5. The Code of Conduct compliance form, which is required to be filled in again at the beginning of each year by all employees.

The Code of Conduct applies to all Company personnel including members of the Board of Directors, members of the Board of Commissioners and all employees. All forms of violation of the Code of Ethics will be processed in accordance with applicable procedures and provisions in the laws and regulations.

PT Indo kordsa Polyester (a subsidiary with the same address as the company) and Thai Indokordsa (a subsidiary located at Rojana industrial park, Uthai, Ayutthaya, Thailand) (102-45)

Indo Kordsa Sustainability Report 2020 37

PT. Indo Kordsa, Tbk | www.indokordsa.com ECONOMIC 05 PERFORMANCES

Indo Kordsa Sustainability Report 2020 39

PT. Indo Kordsa, Tbk | www.indokordsa.com Overview of Financial Statements 2020 (201-1) *In United States Dollars

Indo Kordsa Sustainability Report 2020 Of the total purchase of PT Indo Kordsa amounting to USD 229,323,414.58, there were purchases of local products amounting to USD 6,643,700.17 or 2.89% of the total purchases as a whole. (204-1)

PT Indo Kordsa conducts anti-corruption training “KEEP - Business Ethics” and is a member in anti-corruption and bribery contained in the Kordsa Ethics Board. (205-2)

PT. Indo Kordsa, Tbk | www.indokordsa.com ENVIRONMENTAL 06 PERFORMANCE

Indo Kordsa Sustainability Report 2020 To support the implementation of go green, PT Indo Kordsa, Tbk made various adjustments and added features that support this concept. Including processing waste, making bicycle parking lots, and maximizing the large green open space.

PT. Indo Kordsa, Tbk | www.indokordsa.com Concern for Evironmental Conservation (307-1) PT Indo Kordsa, Tbk realizes that environmental conservation is a global issue that demands mutual attention and care. This is inseparable from the deteriorating quality of the environment as a bad impact of ignorant human activities on the environment. As a company that is oriented towards sustainability, we participate and fully support various pro-environmental activities. We also embody environmental awareness through environmentally friendly company operational practices, among others by saving energy and water which is increasingly limited in availability, saving paper use by implementing a paperless program, treating waste, and reducing emissions.

Material (301-1, 301-2, 301-3) In daily operations, PT Indo Kordsa, Tbk reuses materials from the production process in TCF1, TCF 2, Dipping Unit, NY and PE as raw materials. During the reporting year, PT Indo Kordsa, Tbk used materials including; TCF 1

TCF 2

Indo Kordsa Sustainability Report 2020 Dipping Unit

NY Paper Tube (pcs) PE

The Company has a very high concern for environmental aspects. In all operational and business processes, the Company always prioritizes the principle of protecting the environment. To ensure compliance with environmental regulations, the Company has standardized its work processes and mechanisms in accordance with the relevant environmental laws and regulations as implemented by the Government of the Republic of Indonesia. In May 2017, the Company has obtained ISO 14001: 2015 certification which is an international standard for Environmental System Management. This certification is valid until 2023. The purpose of this certification is to provide guidance to the Company in improving performance in the environmental sector through saving resources that generate competitive advantages and gain the trust of stakeholders.

PT. Indo Kordsa, Tbk | www.indokordsa.com Reused Material 2018 2019 TCF 1 2020

TCF 2

NY Paper Tube

Indo Kordsa Sustainability Report 2020 PE

Hexcell26%, 25%, 14% Papertube 54%, 53%, 31% 2018 2019 2020 Palette42%, 47%, 19%

Reclaimed Products and Packaging Materials Dipping Unit

PT. Indo Kordsa, Tbk | www.indokordsa.com Energy Consumption (302-1, 302-4)

The Company also encourages all Company personnel to participate in energy saving initiatives which are implemented as part of the Energy Saving Policy to encourage effective and efficient use of energy in daily activities. The program that runs regularly every year is an energy saving campaign to raise awareness of efficient energy use and several energy saving projects.

Indo Kordsa Sustainability Report 2020 Use of Water Sources (303-1, 303-3) Another natural resource used in operations is water. The water source used comes from the river.

Total water withdrawal: (m3)

Total volume 2018 38.607 of water 3 recycled usage. (m ) 2019 38.706 202038.430 There have been no major construction projects in the factory area since 2018. Factory operations produce waste that is controlled according to applicable regulations, so that it does not pollute the environment. Wastewater, Emissions and Ambient Water are measured periodically according to regulations, there are no measurement parameters that pass the quality standard. (304-2)

(305-1, 305-2) CO2 GHG Emissions

Waste Management (306-2, 306-4) The Company implements a water treatment system that regulates a proper and correct waste disposal system. This system is implemented as part of the Company’s operational activities for production wastes which are categorized as having certain impacts and implications on the environment. The Company has completed guidelines regarding proper waste disposal and handling procedures which are managed by the SHE Department and in accordance with applicable requirements and regulations. Socialization related to waste management has been given to each of the Company’s employees to be implemented appropriately. In addition, B3 waste management training has also been carried out sustainably and continuously. 49

PT. Indo Kordsa, Tbk | www.indokordsa.com Hazardous Waste Transport

Transported hazardous waste

Treated hazardous waste (filter press cake latex)

Waste is transported

by certified transporter All suppliers of PT Indo Kordsa, Tbk are 100% selected using according to environmental criteria as a form of responsibility and company regulations concern. (308-1)

Indo Kordsa Sustainability Report 2020 SOCIAL 07 PERFORMANCE

PT. Indo Kordsa, Tbk | www.indokordsa.com Employee

The number of employees of PT Indo Kordsa. Tbk as of December 31, 2020 are:

1.121people

Details of the number of employees are as follows: (401-1)

New Employee Recruitment and Employee Replacement

Total number and rate of new employees recruitment during the new reporting period based on ages gender, and region.

GENDER

AREA

Indo Kordsa Sustainability Report 2020 Employee Turn Over Apart from being influenced by the number of recruitment, the number of employees of PT Indo Kordsa, Tbk as of December 31, 2020 was also influenced by the reduction in employees due to stopping work for various reasons, such as reaching retirement age, resigning, being dismissed, or health reasons. Especially for employees who wish to resign, in accordance with the Manpower Act No. 13 and the Collective Labor Agreement (PKB) in effect, they must submit a resignation letter to their supervisor at least 1 (one) month in advance.

GENDER

AREA

PT. Indo Kordsa, Tbk | www.indokordsa.com Employee Allowance (401-2)

Maternity leave Yes Life insurance Yes Preparation for Retirement Health care BPJS Employment & - BPJS Pension Security Private Insurance - DPLK Jiwasraya - BPJS - TK - Old Age Guarantee

Indo Kordsa Sustainability Report 2020 Maternity Leave (401-3)

Maternity leave as the normative right of female employees is given for 3 (three) months, namely 1.5 (one and a half) months before giving birth and 1.5 (one and a half) months after giving Total number of employees birth according to the calculation of entitled to maternity leave, the obstetrician or midwife. based on gender. • All women workers: 3 months maternity leave. • All men workers: 2 days paternity dispensation.

Total number of employees Total number of who returned to work in employees taking the reporting period after maternity leave, by sex. maternity leave ended, by gender. Male Female 2018: 66 2018: 1 Male Female 2019: 63 2019: 2 2018: 66 2018: 1 2020: 62 2020: 2 2019: 63 2019: 2 2020: 62 2020: 2

Total number of employees who returned to work after maternity leave ended, who were still employed 12 months after returning to work, by gender.

From the figures above, all are still it works, unless someone is resigned or retired.

Rates of employees who took maternity leave who returned to work and were retained, by gender.

• Operator • Technician • • Engineer • Manager •

PT. Indo Kordsa, Tbk | www.indokordsa.com Health & Safety (403-1, 403-2, 403-3, 403-4) The P2K3 team consists from Top Management to employee representatives through labor unions that are legalized by the Manpower Office P2K3 ratification letter: 566.4.3304 / PK.WIL.I / K.3 / 2019. Starting from Top Management toOperators, stated in the job description in the SHE-IK-MANUAL Manual, 1 person representative from each area manager and employees are involved in the OHS organization at P2K3 (Committee for Occupational Safety and Health) and Other Groups (Emergency Response Team, First Aid, AK3 Electric, AK3 Chemistry).

Health and safety topics Listed on CLA: 8 topics, as well as having an agreement with the union regarding the whole topic (100%).

Training (404-1, 404-2, 404-3) PT Indo Kordsa, Tbk is committed to continuously improving the competence of all employees through education and training. The policy was taken so that employees become more proficient in carrying out their main duties and functions so that the targets set by the company are achieved. During 2018, education and training organized by the company are as follows:

Indo Kordsa Sustainability Report 2020 Table of Employee Skills Improvement Program Programs to upgrade employee skills and transition assistance programs. 2018 2019 2020 - English Training - English Training - English Training - Train The Trainer - SIO Forklift, Crane - Train The Trainers - SIO Forklift, Crane - Fire K3 Training. Limited Room - SIO Forklift, Crane Chemistry OHS Training, Genset, Room - Training Data Science - Training OHS Electricity, General, Limited, Scaffolding, Fire - GRI Standards Certified Welders, - Awareness of ISO 9001-2015 & IATF 16949-2016 Training Limited Space, Scaffolding, Scissor Lift, - ISO 9001: 2015 QGuality Management - Responsible Training Water Elevator, Electricity, Altitude Internal Audit System & IATF 16949: 2016 Control (PPPA) ISO 14001 Lead Auditor Automotive First & Second Party Auditor - Training on Using Sound Level - Training Calibration System - Training Calibration System Meter Brand

Types and scope of programs implemented Transitional assistance program and assistance provided to facilitate provided to improve continuous employability and employee skills. management end of career due to retirement or termination of • Technical Skills • Soft Skills • employment. • Retirement Planning Training (2018 & 2019) • Will propose for Online Retirement Planning Training (due to COVID-19 pandemic)

PT. Indo Kordsa, Tbk | www.indokordsa.com Percentage Table of Employees Receiving Routine Reviews and Career Development

Percentage of employees who receive regular performance and career development reviews.

Percentage of total employees by gender and by employee category who received regular performance and career development reviews during the reporting period

Percentage of total employees by gender and by employee category who received regular career development reviews during the reporting period

(74 People) (24 People)

(72 People) (28 People)

(72 People) (25 People)

Indo Kordsa Sustainability Report 2020 Human Rights Assessment (412-2) Employee training on human right policies and business ethics.

2018 2019 2020

662.5 hours (5%) 1.236 hours (93%) 1.313 hours (93%)

Evaluation of Social, Employment, and Supplier Performance As a form of the company’s commitment to work safety, we have started the implementation of a supplier Safety Management System that will work with the company through a supplier survey that was given at an early stage before being determined to be a supplier to the company. Where all companies in the reporting year used selection against each supplier who will work with PT Indo Kordsa, Tbk.

Each supplier who will be contracted and collaborate, must first meet the requirements set by the Company. The company not only considers the economic value aspect in assessing, but also pays great attention to the safety aspect. (414-1).

Health and Safety Impact Assessment of Various Products In every process of goods distribution, we take samples at the point of production to check the quality of the gas we distribute. We ensure the quality of our products, as a major component of customer health and safety. In addition, we verify that the point of production and the point before entering the transmission network does not contain impurity components that exceed the standard. Thus the safety of production goods distribution is well maintained. PT Indo Kordsa, Tbk also checks the safety aspect, this inspection is carried out for all (100%) products. Periodically, customers get the recording results attached to the bill for distribution of goods. Careful checks aim to maintain product quality for our customers. The results of the inspection are useful as clear and accountable information for customers. (416-1).

For customers who buy products, we include MSDS as well as the use of safe products and materials in accordance with SHE- IKG-21 Chemical Safety, SHE-IKG-21 Chemical Safety & SHE-IKG-15 Contractor Safety and carry out disposal of production waste based on SHE-IKG -22 Waste Management & AMDAL / Environmental Permit Documents. (417-1)

PT. Indo Kordsa, Tbk | www.indokordsa.com Standard GRI Index (102-55)

Indo Kordsa Sustainability Report 2020 61

PT. Indo Kordsa, Tbk | www.indokordsa.com Fitness Index POJK No.51 /POJK.03/2017

Indo Kordsa Sustainability Report 2020 SDG’s Links in the GRI Standards

PT. Indo Kordsa, Tbk | www.indokordsa.com 64

Indo Kordsa Sustainability Report 2020 Feedback Sheet

PT Indo Kordsa, Tbk’s 2020 Sustainability Report provides an overview of financial and sustainability performance. We expect critics and suggestions from stakeholders regarding this Sustainability Report by sending this form via email or post.

Group of Stakeholders

Shareholders Public

Employees and Employee Organizations Mass media

Partner Miscellaneous, please specify . . .

Government, Regulator

Please select the answer that best fits the statement below.

1. This report is useful for you.

2. This report describes the performance of LJK in sustainable development.

Please provide your suggestions / recommendation/ comments on this report: ......

Thank you for your participation. Please send this feedback sheet back to:

PT Indo Kordsa, Tbk Jalan Pahlawan, Desa Karang Asem Timur Citeureup, Bogor 16810 Indonesia Tlp.: (62-21) 8752115

Email: [email protected] (Yoga Mardiansyah - Regional APAC SHE & Sustainability) Fax: (62-21) 879 12252 / (62-21) 875 3934 www.indokordsa.com 65

PT. Indo Kordsa, Tbk | www.indokordsa.com Halaman ini sengaja dikosongkan

Indo Kordsa Sustainability Report 2020

PT Indo Kordsa, Tbk Jalan Pahlawan, Desa Karang Asem Timur Citeureup, Bogor 16810 Indonesia Tlp.: (62-21) 8752115 Email: [email protected] Fax: (62-21) 879 12252 / (62-21) 875 3934 www.indokordsa.com