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Internal Control System

The Company's internal control system encompasses all policies and procedures across financial and operational functions, designed to safeguard the Company's assets, ensure the reliability of financial reporting and information, comply with applicable regulations, and promote effective and efficient operations.

The internal control system in the Company includes all policies and procedures in all financial and operational functions that aim to protect the Company's assets through reliable financial reporting and information, compliance with applicable regulations, and the implementation of effective and efficient operational activities.

IMPLEMENTATION OF THE COMPANY'S INTERNAL CONTROL SYSTEM

The implementation of internal control is supervised by the Audit Committee. This system serves as a benchmark for the application of Good Corporate Governance (GCG) principles, emphasizing three key aspects: financial, operational, and the reliability of reports and information.

Internal control in the financial aspect is monitored through the presentation of the Company's financial information, which must be timely, transparent, and accountable, in accordance with applicable accounting standards. Internal control in the operational aspect aims to ensure efficiency and effectiveness in compliance with relevant laws and regulations.

The effectiveness of the internal control system is closely linked to the Company's management efforts in risk management, human resources, information and communication systems, as well as the continuous monitoring and evaluation of the internal control system at all organizational levels and units.

Financial and operational controls are implemented through the segregation of duties to minimize errors, fraud, and inefficiencies. This ensures that no single individual has full control over all critical aspects of events and transactions from initiation to completion.

All events and transactions must be duly authorized and executed by designated employees, ensuring that only valid transactions are carried out in accordance with the decisions of the Board of Directors and/or applicable regulations.

CONFORMITY TO THE COSO FRAMEWORK

The implementation of the Company's internal control system adheres to the framework established by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). This framework is based on five key principles: control environment, risk assessment, control activities, information and communication, and monitoring.

Control Environment
  1. Demonstrate commitment to integrity and ethical values.
  2. Carry out responsible supervision.
  3. Establish structure, authority, and responsibility.
  4. Demonstrate commitment to competence.
  5. Enforce accountability.

Risk Assessment
  1. Determine appropriate goals.
  2. Risk identification and analysis.
  3. Risk assessment for fraud.
  4. Identification and analysis of significant changes.

Control Activities
  1. Selection and development of control activities.
  2. Selection and development of control over technology.
  3. Implementation through policies and procedures.

Information and Communication
  1. Use relevant information.
  2. Internal communication.
  3. External communication.

Monitoring
  1. Conduct continuous and/or separate evaluations.
  2. Evaluate and communicate any deficiencies.
REVIEW OF THE EFFECTIVENESS OF THE COMPANY'S INTERNAL CONTROL SYSTEM

The Company periodically evaluates the adequacy and effectiveness of its internal control system across both financial and operational aspects. The Audit Committee, in coordinates with the Internal Audit Unit, reviews the design and implementation of procedures and policies to ensure the effectiveness of internal control across all business lines.

In 2024, the Company's internal control system has operated effectively, as evidenced by the absence of significant weaknesses related to the implementation of the Internal Control System in the Company that may affect operational performance or the presentation of financial statements as a whole.

STATEMENT OF BOARD OF COMMISSIONERS ON THE ADEQUACY OF THE INTERNAL CONTROL SYSTEM

In 2024, the Board of Commissioners and Board of Directors have assessed that the Company's internal control system had been implemented adequately and was declared adequate. The implementation of the internal control system is carried out in accordance with procedures and SOPs, where each organ carries out its functions with an orientation towards achieving the established Key Performance Indicators (KPIs).