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Jakarta, 26 April 2018  

Bahasa: Indonesia

Code of Conduct

PT ICRA Indonesia (ICRA Indonesia) Code of Conduct is a result of an adoption and modification of ICRA Limited (ICRA Ltd.) Code of Conduct which has been adjusted with the applicable regulations in Indonesia. 

A. Preliminary
ICRA Indonesia information products and Ratings reflect independent, professional and impartial opinions, which assist businesses enhance the quality of their decisions and help issuers access a broader investor base and even lesser known companies approach the money and capital markets.
We strongly believe that quality and authenticity of information are derivatives of an organisation's research base from ICRA Ltd. (ICRA Indonesia's parent company) which have dedicated teams for Monetary, Fiscal, Industry and Sector research, and a panel of Advisors to enhance our in-house capabilities. ICRA's research base enables us to maintain the highest standards of quality and credibility.
ICRA Indonesia Ratings Code of Conduct is aligned with the Code of Conduct Fundamentals for Credit Rating Agencies issued by the Technical Committee of the International Organization of Securities Commissions to the extent it is within the applicable Statutes in Indonesia.
The ICRA Indonesia Code of Conduct, however, shall not form a part of any contract with any entity and no such entity shall have any right to enforce any of this Code's provisions, in any manner. ICRA Indonesia does not assume any liability arising out of this Code to any entity.
ICRA Indonesia reserves the right to modify this Code, as and when required, either out of legal and regulatory requirements or otherwise.
ICRA Indonesia's management has adopted the "ICRA Indonesia Ratings Code of Conduct". The ICRA Indonesia Ratings Code of Conduct is designed to apply to ICRA Indonesia and any person employed by ICRA Indonesia in either a full-time or part-time capacity. All employees who are associated with the process of ICRA Indonesia Ratings are expected to comply with ICRA Indonesia Ratings Code of Conduct and all other Codes, Policies, Regulations and Guidelines issued by the Regulatory Authorities etc.
A Credit Rating is a simple and easy to understand symbolic indicator of the opinion of a credit rating agency about the risk involved in a borrowing programme of an issuer with reference to the capability of the issuer to repay the debt as per terms of the issue. A Credit Rating is neither a general-purpose evaluation of the company nor a recommendation to buy, hold or sell a debt instrument.

B. The Code Of Conduct Fundamentals
ICRA Indonesia should endeavor to issue opinions that help reduce the asymmetry of information that exists between borrowers and debt and debt-like securities issuers, on one side, and lenders and the purchasers of debt and debt-like securities on the other. Rating analyses of low quality or produced through a process of questionable integrity are of little use to market participants. Stale ratings that fail to reflect changes to an issuer's financial condition or prospects may mislead market participants. Likewise, conflicts of interest or other undue factors - internal and external - that might, or even appear to, impinge upon the independence of a rating decision can seriously undermine ICRA Indonesia's credibility.

ICRA Indonesia also has responsibilities to the investing public and to issuers themselves, including a responsibility to protect the confidentiality of some types of information issuers share with ICRA Indonesia.

What ICRA Indonesia's Ratings Convey
ICRA Indonesia's credit ratings are symbolic representations of its current opinion on the relative credit risks associated with the rated debt obligations/issues. These ratings are assigned on an Indonesian (that is, national or local) credit rating scale. ICRA Indonesia ratings are not designed to enable any rating comparison among instruments across countries; rather these address the relative credit risks within Indonesia.
Unless stated otherwise, ICRA Indonesia's ratings (other than Structured Finance Ratings) in the investment grade convey the relative likelihood of default, that is, the possibility of the debt obligation not being met as promised. All other ratings, including Structured Finance Ratings, reflect both the probability of default and the severity of loss on default, that is, the expected loss against the rated debt obligation

Limitations of ICRA Indonesia Ratings
ICRA Indonesia ratings are only an opinion on the relative ranking of credit risk, and they do not reflect other investment risks arising out of changes in market conditions, interest rates or liquidity. Hence, even the debt obligations rated in the highest category carry a certain degree of credit risk, although such risk would be the lowest when compared with the credit risks associated with obligations rated in the lower rating categories. These rating categories group debt obligations with similar but not necessarily identical credit risks.
ICRA Indonesiaâ??s credit ratings reflect the issuersâ?? inherent credit quality, which in many cases may not remain constant at all times. Consequently, ICRA Indonesia ratings are not always constant and are subject to change. While ICRA Indonesia in its analysis endeavours to incorporate the factors that impact the issuersâ?? prospective credit quality, there may be situations in which the actual developments would significantly differ from ICRA Indonesiaâ??s expectations. Such changes in turn may warrant an upward or downward revision in the ratings previously assigned. Given this possibility, all ICRA Indonesia ratings are subjected to regular monitoring or surveillance. Recent and timely updates on ICRA Indonesiaâ??s live ratings are available through ICRA Indonesiaâ??s rating releases, publications and/or website (
For assigning ratings, ICRA Indonesia relies on all relevant information (such as audited statements) made available to it by the issuer company, as well as on other sources of information (opinions of legal and other experts, for instance) that ICRA Indonesia considers reliable. While ICRA Indonesia takes reasonable care to ensure that all such information is reliable, it makes no representation or warranty, express or implied, as to the accuracy, authenticity, timeliness or completeness of any such information. Further, ICRA Indonesia ratings are not to be construed as recommendation to buy, sell, or deal in the rated instruments.

The terms/abbreviations which are used in this Code shall have the following meanings/descriptions:

"IOSCO" - International Organization of Securities Commissions

"Bapepam dan LK" - Capital Market and Financial Institution Supervisory Board as defined in the Republic of Indonesia Regulation Number 8 Year 1995 regarding Capital Market and the Decision of Minister of Finance Number 606/KMK.01/2005.

"Client" means any person whose securities are rated by a credit rating agency.

"Securities" has the meaning assigned to it in clause 1.a. of the Bapepam Decree No. KEP-135/BL/2006 about Debt Instrument Rating.

"Rating" means an opinion regarding securities, expressed in the form of standard symbols or in any other standardised manner, assigned by a credit rating agency and used by the issuer of such securities.

"Issuer" means a person whose securities are proposed to be rated by a credit rating agency.


Quality And Integrity Of The Rating Process



Quality of the Rating Process



Credit ratings shall be assigned by ICRA Indonesia and not by any individual analyst employed by ICRA Indonesia; ratings shall reflect all information known, and believed to be relevant, to ICRA Indonesia, consistent with its published methodology; and ICRA Indonesia shall use people who, individually or collectively (particularly where Rating Committees are used) have appropriate knowledge and experience in developing a credit rating opinion.



ICRA Indonesia shall adopt, implement and enforce written procedures to ensure that the opinions it disseminates are based on a thorough analysis of all information known to ICRA Indonesia that is relevant to its analysis according to ICRA Indonesia's published rating methodology.



ICRA Indonesia shall use rating methodologies that are rigorous, systematic, and, where possible, result in ratings that can be subjected to some form of objective validation based on historical experience.



ICRA Indonesia shall periodically conduct a portfolio review to all its published ratings. This is to maintain the consistency of ICRA Indonesia's ratings to its methodology including the consistency within sector and across sectors. The assumptions and paramaters used are also reviewed, in order to maintain the ratings consistency, accuracy and quality. In this portfolio review it is possible that ICRA Indonesia will also examine a correlation between ratings and historical default rates.



In assessing an issuer's creditworthiness, analysts involved in the preparation or review of any rating action shall use methodologies established by ICRA Indonesia. Analysts shall apply a given methodology in a consistent manner, as determined by ICRA Indonesia.



ICRA Indonesia shall maintain internal records to support its credit opinions for a reasonable period of time or in accordance with applicable law.



ICRA Indonesia and its analysts shall take steps to avoid issuing any credit analyses or reports that contain misrepresentations or are otherwise misleading as to the general creditworthiness of an issuer or obligation.



ICRA Indonesia shall ensure that it has and devotes sufficient resources to carry out high quality credit assessments of all obligations and issuers it rates. When deciding whether to rate an obligation or issuer, it shall assess whether it is able to devote sufficient personnel with sufficient skill sets to make a proper rating assessment, and whether its personnel likely will have access to sufficient information needed in order make such an assessment. ICRA Indonesia shall adopt reasonable measures so that the information it uses in assigning a rating is of sufficient quality to support a credible rating. If the rating involves a type of financial product presenting limited historical data (such as an innovative of certain financial product/institution), ICRA Indonesia shall make clear, in a prominent place, the limitations of the rating.



ICRA Indonesia shall establish a review function made up of one or more senior managers with appropriate experience to review the feasibility of providing a credit rating for a type of structure that is materially different from the structures ICRA Indonesia currently rates.



ICRA Indonesia shall establish and implement a rigorous and formal review function, responsible for periodically reviewing the rating procedure, methodologies and models and significant changes to the procedure, methodologies and models it uses. Where feasible and appropriate for the size and scope of its credit rating services, this function shall be independent of the business lines that are principally responsible for rating various classes of issuers and obligations.



ICRA Indonesia shall assess whether existing methodologies and models for determining credit ratings of structured products are appropriate when the risk characteristics of the assets underlying a structured product change materially. In cases where the complexity or structure of a new type of structured product or the lack of robust data about the assets underlying the structured product raise serious questions as to whether ICRA Indonesia can determine a credible credit rating for the security, ICRA Indonesia shall refrain from issuing a credit rating.



ICRA Indonesia shall structure its rating teams to promote continuity and avoid bias in the rating process.



Rating Monitoring and Updating



ICRA Indonesia shall ensure that adequate personnel and financial resources are allocated to monitoring and updating its ratings. Except for ratings that clearly indicate they do not entail ongoing surveillance, once a rating is published, ICRA Indonesia shall monitor on an ongoing basis and update the rating by:



Regularly reviewing the issuer's creditworthiness;



Initiating a review of the status of the rating upon becoming aware of any information that might reasonably be expected to result in a rating action (including termination of a rating), consistent with the applicable rating methodology; and,



Updating on a timely basis the rating, as appropriate, based on the results of such review.



Subsequent monitoring shall incorporate all cumulative experience obtained. Changes in ratings criteria and assumptions shall be applied where appropriate to both initial ratings and subsequent ratings.



Where ICRA Indonesia makes its ratings available to the public, ICRA Indonesia shall publicly announce if it discontinues rating an issuer or obligation. Where ICRA Indonesia's ratings are provided only to its subscribers, ICRA Indonesia shall announce to its subscribers if it discontinues rating an issuer or obligation. In both cases, continuing publications by ICRA Indonesia of the discontinued rating shall indicate the date the rating was last updated and the fact that the rating is no longer being updated.



Integrity of the Rating Process



ICRA Indonesia and its employees shall comply with all applicable laws and regulations governing its activities in each jurisdiction in which it operates.



ICRA Indonesia and its employees shall deal fairly and honestly with issuers, investors, other market participants, and the public.



ICRA Indonesia's analysts shall be held to high standards of integrity, and ICRA Indonesia shall not employ individuals with demonstrably compromised integrity.



ICRA Indonesia and its employees shall not, either implicitly or explicitly, give any assurance or guarantee of a particular rating prior to a rating assessment. This does not preclude ICRA Indonesia from developing prospective assessments used in structured finance and similar transactions.



ICRA Indonesia shall institute policies and procedures that clearly specify a person responsible for ICRA Indonesia's and ICRA Indonesia's employees' compliance with the provisions of ICRA Indonesia's Code of Conduct and with applicable laws and regulations. This person's reporting lines and compensation shall be independent of ICRA Indonesia's rating operations.



Upon becoming aware that another employee or entity under common control with ICRA Indonesia is or has engaged in conduct that is illegal, unethical or contrary to ICRA Indonesia's Code of Conduct, ICRA Indonesia employee shall report such information immediately to the individual in charge of compliance or an officer of ICRA Indonesia, as appropriate, so proper action may be taken. ICRA Indonesia's employees are not necessarily expected to be experts in the law. Nonetheless, its employees are expected to report the activities that a reasonable person would question. Any ICRA Indonesia officer who receives such a report from ICRA Indonesia employee is obligated to take appropriate action, as determined by the laws and regulations of the jurisdiction and the rules and guidelines set forth by ICRA Indonesia. ICRA Indonesia management shall prohibit retaliation by other ICRA Indonesia staff or by ICRA Indonesia itself against any employees who, in good faith, make such reports. ICRA Indonesia has in place a "Whistle Blower Policy" for employees to report to the management instances of unethical behavior, actual or suspected, fraud or violation of the company's Code of Conduct or ethics policy. The whistle blower policy also provides sufficient protection to the whistle blower against possible intimidation or retaliation.

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