8/12/2019 No189EN

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BANPUINSIGHTAn internal newsletter of Banpu GroupVol.

24

No.

189

Banpu PeopleVariable Bonus Payment System

of BanpuPart II

CG of the MonthCG VoiceHave Your Say,

Make Your Voice Heard

August 2013

BANPU1stHalf Year Performance &

Mid-Year Strategic Progress Review

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to the Quality Working Committee and PGA Departmen

according to the Company's cost reduction policy. On thi

Banpu management led by Mr. Chanin visited all departm

provided valuable comments to help improve the activity

Later, on August , , the Quality Working Committ

each departments 5S activity. The result showed that all Ban

willingly complied with the 5S rules and regulations in a

and efficient manner.

Sharing Coal Knowledge for Non-Geologists at Banpu On July , , HRCorporate Culture & Knowledge Ma

organized a knowledge sharing session entitled Coal Geolog

Geologistsin the meeting room , Bangkok Office. On that d

of Banpu geologists from the Technical & Project Development De

namely Mr. Pitak Wuttinonchai, Ms. Sujitra Sain and Ms. S

Ketmaneechairat spoke to around Banpu staff introducing ba

edge about origins and types of coal, coal reserves and resourc

as coal exploration. The sharing session was conducted in an ed

style, which meant that participants who had no geological o

background could easily understand the complicated technical

ugust 2013

s usual every quarter, the Company will report its financial statement to the Stock

xchange of Thailand (SET), complying with SETs regulation and practice. This also

emonstrates our corporate governance compliance in disclosing information in a timely

anner. In addition to financial information disclosure, the Company will organize

alyst meetings in order to communicate with l ocal and international analysts as well

institutional investors, to update them our quarterly performance as well as business

ogress or movements. Furthermore, we also update our quarterly performance and

usiness progress to individual investors through the SETs Opportunity Day also held

ch quarter. For the general public, the quarterly performance will be communicated

rough a media channel in the form of a news release or press conference/ press briefing

both. This is to make sure that all of our stakeholders receive sufficient informationd obtain equal and easy access to Company information. To know more detail about

ur performance in the first half year as well as the midyear strategic progress, flip to

e BANPU FOCUSsection.

Mr. Narat Yuvanatemiya, HR Management System Manager is still with us this month

explain the other kind of variable bonus in Banpu's payment system: the management

onus. Read more in BANPU PEOPLE.

CG OF THE MONTHfeatures the twoway communication channel that welcomes

Banpu employees to give their opinion relating to corporate governance and the

ode of Conduct

BANPU YOU CAN SHAREcontinues to feature CSR activities. This month, Mr. Suthiroj

ongkolsinpong, Senior SpecialistCDBKK, is sharing his impressions after joining a CSR

tivity held recently by Trubaindo Mine, Indonesia.

Finally, lets find out whats been happening in all our business units in BANPU

PDATE.

Contributing Editor

Narat Yuvanatemiya

Human Resources Management System

Manager

BANPUINTRO

Nittaya Katkasem

Corporate Communications Manager

Juliana Wang

Corporate Communications Supervisor

BIC

Suwanna Somsawasdi

Corporate Governance Manager

Suthiroj Mongkolsinpong

Senior Community Development

Specialist

Meredith Young

External Affairs CEY

Jongsurang Promwang

Corporate Communications Specialist

Junarto Imam Prakoso

Corporate Communications Officer

ITM

Suratvadee Saithong

Corporate Communications Specialist

EditorialTeam

bjectives

o update all employees on news andovement of the Company.

o be an internal channel to communicate

rporate policies, directions or programs in

der to build good understanding and

operation from employees.

o open a forum for employees from all

partments to share stories or useful knowledge

ated to work.

BANPUUPT

Knowledge Sharing Sessions at Bangkok Office

Knowledge sharing sessions have continued in the

Bangkok Office. On July , , HRCor porate Culture &

Knowledge Management organized another session

entitled Capital Market & SET in the meeting room .

At the event, Ms. Rattikorn Limthongsittikun, Officer

Company Secretary, shared her knowledge about the

capital and stock markets including the products of the

capital market, roles of Stock Exchange of Thailand (SET),

as well as investment tips. There were around of

Bangkok staff participating in this activity.

Big Cleaning Day 2013 at Banpu HQ

On August , , around Banpu employees at Bangkok

Office joined forces for the Big Cleaning Day with the theme

of One Man's Trash is Another Man's Treasure.

After the opening ceremony presided over by our CEO, Mr. Chanin

Vongkusolkit, in the meeting room , Banpu staff returned to their

departments to do the 5S activity. Unused office equipment and

supplies as well as the electronic waste were collected and delivered

:

Corporate Communications Department

BANPU PUBLIC COMPANY LIMIEDthFl., Tanapoom ower,

Bangkok HAILAND.

: Khun Chanin Vongkusolkit,

Khun Prachuab rinikorn,

and Khun Udomlux Olarn

For feedback or suggestions, please contact us via

email : CC@banpu.co.th

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BANPUUPInd

BANPUUPDATEhai land

Jorong Mine Organizes Cassava and Dragon Fruit

Tree Planting Program for Villagers

In cooperation with the local youth organization known

as Karang Taruna, on June , , Jorong Mine or ganized

a cassava and dragon fruit tree planting program at Karang

Rejo Village in Jorong District, Tanah Laut Regency of South

Kalimantan Province.

Around cassava and dragon fruit seedlings were

provided to the villagers, along with fence materials, fertilizer,

and wages for labor. This program aimed to promote peoples

awareness on the economic potential of these kinds of plants

for their village.

Cleaning Activities at Trubaindo Mines Bunyut Cam

On July , , Trubaindo Mine staff joined in the clean

Bunyut Camp. All litter was swept up and collected into a numb

cans in front of the main office before being transported to th

Trubaindo Mine Head, Pak Arief Pambudhi, stated that camp

was an essential part of Occupational Health and Safety Policy

clean work environment results in a comfortable and h ealthy w

By focusing employeesattention on the importance of cleanlin

work environment, this activity was aimed at encouraging em

maintain clean and healthy h abits wherever they were living.

Sparkling BANPU Innovation #Part 2: How to Sustain Innovation in Organization

On August , , HR Department organized the Sparkling BANPU Innovation# Part 2under

the theme of How to Sustain Innovation in Organizationin the meeting room . Around staff

participated in the event. After an opening speech by Mr. Somyot Ruchirawat, our DCEO, Banpu staff had the chance to learn

about people management and innovation in organization from Thailand's leading HR guru Prof.Dr.

Chira Hongladarom. Prof.Dr. Chira shared his insights from over years experience in HR management

and led the workshop entitled How to Sustain Innovation in Organization. This knowledge sharing

session aimed at building awareness of innovation which is one of the elements of BANPU SPIRIT among

Banpu employees. As a result, the staff were encouraged to create new improvements in the work place

for more effective and efficient operations.

Communicates the 2Q/2013 Performance to Banpu Staff

Bangkok Office

On August , , the Investor Relations Department

ganized the IR Quarterly Communications 2Q13A View from

vestorssession in the meeting room which was attended by

ound Bangkok Staff. Ms. Somruedee Chaimongkol, CFO and

r. Virach Vudhidhanaseth, Investor Relations Manager presented

e 2Q/2013 financial performance and 2H/2013 business strategies.

dditionally, IRs communication message released to the public

d feedback from financial analysts and investors were also shared.

e participants were encouraged to discuss how to implement the

rporate action plans most effectively, while also taking into accountakeholdersinterests.

According to our CFO, Banpu is still in good financial health. The

nancial analysts and investors also believed that Banpus current

sets continue to generate solid earnings. They agreed with the

ompanys strategy to focus on strengthening core businesses, re-

ucing operational costs and improving productivity. The Companys

cent measures of share buyback and par split also received positive

edback from the investor community.

Trubaindo Mine Staff Provide Tree Planting and Social Services to Muara Begai Village On July , , Trubaindo Mine staff, young Muara Begai villagers, Mulawarman University students,

and elementary school pupils joined hands in planting trees along the Muara Begai Village road. Muara

Begai Village is located in Muara Lawa Subdistrict of West Kutai Regency, East Kalimantan Province.

Around silk trees (Albiziachinensis) were planted along the road to make the area surrounding the

village more pleasant. Villagers will also greatly benefit from the tree cover to reduce the temperature and

also in terms of carbon dioxide reduction. It is expected that tree planting can raise peoples awareness

of green environment in line with the government program called One Man One Tree.

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BANPUUPBANPUUPDATEdonesia

Trubaindo Mine Repairs Road Connecting Lotaq and Begai Villages

As the kilometerlong road between Lotaq and Begai Villages was damaged so

severely that neither automobiles nor motorbikes could pass, a roadworks program was

carried out for the villagers, after scrutiny by Trubaindo Mine's community development

team. Assisted by the Maintenance Department who supplied excavators, graders, andcompactors, the maintenance project took weeks from the first to the third week of

July. With the wellrepaired road, the villagers were able to travel safer and faster and

it is expected to boost economic activities in both villages.

M Arranges Halalbihalal and Celebrates Independence Day at Once

At the completion of the fasting month of Ramadan, Muslims celebrate the following

onth named Syawalan Arabic term meaning the Beginningby asking forgiveness

d offering pardons to one another as if starting a new life as clean as a new born baby.

nown as Halalbihalal, this Indonesian PostRamadan traditional ceremony was arranged on

ugust , at ITM Jakarta office. The Board of Directors and all Jakarta staff attendede event on that day.

On the following day August , a modest celebration of Indonesias Independence Day

as organized at the office where ITM staff solemnly sang the national anthem Indonesia

yaor Great Indonesia. Additionally, Mr. Pongsak Thong-Aampai, ITM President Director,

d Pak Leksono Poeranto, VPCorporate Affairs, gave a speech to motivate all staff by liken-

g the meaning of Halalbihalal and I ndependence Day to work place dedication and loyalty.

Luannan Officials Visit Bangkok for Tr

Investment Promotion

From July , , the officials of

County where BIC's Luannan Power Plant i

visited Bangkok to promote trade and invest

delegation was led by Mrs. Xu Xiaojuan, Luanna

The officials organized a Trade and Investment

Conference at the JW Marriott Hotel in which

Thai entrepreneurs participated, aiming to s

ment and enhance business communicationsstated that Luannan is endowed with broad

and welcomes visits from Thai investors for business opportunities as well as sightseeing. Am

who participated in the conference were Mr. Zhang Yunjiang, Vice Governor of Luannan, Mr

Jiang, Director of Luannan Finance Bureau, Mr. Wang Xueguo, Director of Luannan Ho

Construction Bureau, Mr. Mao Junan, Director of Luannan Development and Reform Bureau

with Dr. Phaichit Viboontanasarn, Commercial Minister of the Royal Thai Embassy in China and M

Lertsaroj, CEO of BIC.

Furthermore, meetings with the Luannan delegations were also arranged at Banpu Hea

CP Group, Rose Garden and Thai Frozen Foods Association. The opportunity for delegation

facetoface is always beneficial in promoting greater understanding and lays a good foun

further cooperation.

Intensive Physical Training at Luannan Power

Plant

In early July , Luannan Power Plant organized

intensive physical training for staff. The participants

were divided into five groups to join the oneday

training program, covering physical training by an

external military instructor in the morning and video

training on Work for Yourselfby a professional trainerin the afternoon. The training was intended not only

to build team spirit and physical strength, but also to

enhance selfdiscipline and work management skills.

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BANPUUPDATEhina

BANPUUPA

A Local Careers Day With a D ifference

Centennial supported Toronto High School, a local school situated near its Northern Operations in the

Lake Macquarie region, in holding a careers day with a twist.

While its common practice for career fairs to be large events with thousands of high school students

seeking information on a wide range of career opportunities, Toronto High School applied a more

boutiqueapproach.

With only of thGrade students invited to attend the day, Toronto High School worked in con-

junction with the local Rotary Club of Toronto Sunrise and Centennial to run a series of specialized career

information sessions, enabling students to benefit from the expertise of local businesses.

The students elected to attend only the information sessions of interest to them and learnt from

specialists working across a range of professions including policing, accounting, mining and electrical

engineering, medicine, journalism, environment and law. We purposefully kept the studenttospecialistratio low, so as to enable each student to spend more time with the specialist representing their field of interest.

This way the students had the opportunity to ask their questions in an intimate setting and gain a real insight

into working life,said Trevor Connell, Toronto High School Career Advisor.

The careers day was a great initiative to be a part of. There is a lot of knowledge to be shared from

our club members and it was nice to be able to impart some of our wisdom to keen and interested students,

said Rotary Club of Toronto Sunrise President, Vic Lewis.

As part of the day, the specialists were treated to a two course sit down meal prepared by thand

thgrade students majoring in Food Technology and Hospitality who showcased their culinary skills in

fine style.

It was nice to speak to students who are keen to learn and who are clearly selfmotivated to make their

career ambitions a reality. They asked many great questions which showed they have given their future some

serious thought,said Centennial Newstans Environment and Community Coordinator, Veronica Warren.

CHR Department

rganizes Training on

ork Method Improvement for Power PlantsDuring the months JulySeptember, , BICHR Department organized

woday training program on Work Method Improvement for the power

ant's employees. staff of the Zouping Power Plant par ticipated in the

aining on July , and , . On August , , training was con-

ucted at the conference rooms in Luannan Power Plant while the training

r Zhengding Plant will be arranged at a later date.

At the training, Mr. Huang Jianqing, a senior trainer from TeachTouch

anagement Consulting Co., Ltd., introduced the purpose and significance of

ork method improvement, its four phases and the principles of motion

onomy in combination with theoretical introduction, case analysis and

oposal practice. Through the systematic study and practice, participants

ere able to grasp the basic procedures and skil ls of work method i mprove-

ent, to enhance their work procedure, and apply these new methods in

eir daily work.

BIC CEO Visits the Secretary of Binzhou Party

On July , , Mr. Zhang Guangfeng, Party Secre-

tary of Binzhou City warmly hosted delegates of BIC led

by Mr. Vanchai Lertsaroj, CEO. Mr. Vanchai reported on

the operation and progress of the project at the Zouping

Power Plant in Binzhou City and expressed appreciation

for the support received from local government officials

for the Plants development in Binzhou. He expressed the

commitment that the Plant would always run business

with integrity and sincerity in accordance with the law

and that BIC would be willing to further contribute to

local development.

Party Secretary Zhang that Banpu's BIC enjoys a good

image as a foreign enterprise resulting from the company'sprominent contribution to Binzhous social and economic

progress. The government issues preferential policies

offering a favorable development environment for foreign

companies.

uannan Power Plant Receives Outstanding Energy

aving Award

In July , the Energy Saving Association of Hebei Province

rdially presented the award of Outstanding Energy Saving Enter-

ise to Luannan Power Plant. The Plant has greatly emphasized

nergy saving in recent years, making improvements in energy saving

olicy as well as carrying out technical innovation and equipment

trofit. The capacity and availability of equipment was enhanced

rough projects such as the air preheater retrofit and increase in

eat supply by circulating water. Meanwhile, the Plant also developed

nergy planning, audit and utilization evaluations to further improve

energy management systems. This series of measures on energy

saving reflected the Plants values of innovation, spirit and care for

the local environment which not only lifted operational efficiency,

but also followed the general trend of sustainability development to

win favorable recognition from local communities.

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BANPUFOCUS BANPUFO

Since last year, all of us have been well aware of an excess coal supply,a trend towards shale gas and a sluggish global economy, which has ledto unfavorable coal prices in the market. This has affected the performance

of coal producers across the world. Banpu, along with its peers in thecoal sector, has been affected by these trends. The Company, however,has taken prompt action in initiating various measures to mitigate risk on

softening coal prices. The measures have been put in place across theorganization since mid 2012. Lets see how we performed in the first halfof this year and what we achieved from the measures implemented.

First Half -Year Performance

During the first six months of , Banpu recorded a net profit of USD million, a decrease of

percent from the same period last year. The decline in net profit was mainly caused by a decrease in

the average selling price (ASP) to USD . per tonne compared to USD . per tonne in the same

period last year. Sales revenue in the first half was USD , million of which USD , was

from coal and USD mill ion from power & steam, respectively. The gross profit margin (GMP) of

coal business was percent, compared to percent of that in the first six months 2012. The power

business GPM was percent, rising percent from percent in the same period last year.

Meanwhile, coal production and coal sales volume in this first half year increased to . million

tonnes from around million tonnes in the same period of . Our CEO Mr. Chanin Vongkusolkit recently explained during both the 2Q/2013 analyst meeting

and the 1H /2013 press conference and during his exclusive interviews with both domestic and

international media,that coal prices were down globally. This was caused by several factors, he

reasoned. Firstly, higher production, caused an excess volume of coal in the market. Secondly was

an unprecedented surge in the availability of US coal for export due to the trend to gasfired power

domestically (based on new shale gas supplies). And finally this comes on top of continued supply

growth from key major coal producers especially from Indonesia and Australia over the last three

years when coal prices were favorable. The growth in coal demand in the first half year, however,

still maintained encouraging levels. Mr. Chanin said, The markets current coal price should bottom

out, expecting to gradually recover in next year. The increase in coal price will be modest since there

will still be an excess coal supply continuing into year .

This year, the Company has placed great emphasis on conspicuously expanding its businesses

through increasing coal production from existing coal mines and coal projects in Mongolia. We are

also looking for opportunities to further invest in the power business in addition to the Hongsa Power

Project which has now reached percent construction completion. When the Hongsa Power Plant

commences its commercial operation in the third quarter of , it will significantly help increase

income from the power business, lifting the proportion of enterprise value stemming from the power

business to more than percent.

BANPU1stHalf Year Performance &Mid-Year Strategic Progress Review

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BANPUFOCUS BANPUFO

MidYear Strategic Progress Review

Since middle , the Company has taken various measures across the organization at both

corporate and country levels to alleviate the downward trend of coal prices. These measures include:

Postponement of unnecessary capital expenses and 30% reduction of 2012-2015 CAPEX

The reduction (from USD , to USD , million) applies to all business units in Indonesia, Australia

and Mongolia. Investment capital amounting to million for the Hongsa Power Project in Laos will

still be maintained. For years and , the Company has utilized around USD millions of

capital expenditure.

Cost reduction: This includes reduction in operating cost as well as administrative and overheadcost.

Cost Management and increasing operation efficiency in all country bases: The Company

in targets a reduction in operational cost at Indonesian coal mines of percent from last year

to USD per tonne and % for Australian mines to USD per tonne. (In , the operational

cost of Indonesian mines were USD per tonne. The Australian operational cost in was USD

53 per tonne.

Financial Management: This includes financial restructuring as well as keeping debt to the

right level in order to keep the Company performing well and ready to take advantage of future

opportunities when the coal price improves. Also important is the ability to maintain a continuous

dividend payment.

To add value for shareholders, the Company launched a share buy-back program in mid March. The

repurchase of ,, shares, equal to % of the total paidup capital was completed on July.

Management and BOD have agreed to manage the repurchased shares by reducing registered paidup

capital. The process will be made pursuant to the relevant regulations and laws. This reflects Banpus

strong fundamentals and sound retained earnings. In addition, the Company recently launched the

par split initiative to increase stock liquidity and enable individual investors to buy BANPU shares.

This initiative received approval from shareholders at the Ex traordinary General Meeting (EGM) on

September. The table below illustrates the progress of all measures taken during the first half year.

Country/Business

Current StrategicInitiatives

2013 Targets MidYear Review Focus for 2H/20

Indonesia Targeting 10% reduction in

overall production costs

Lowering S/R at Indominco and

Trubaindo

Lowering administrative costs

Better utilization of infrastructure

Cost Reduction

10% YoY reduction in

overall production costs

25% 50% 75% 100%

Reduced by 11% HoH

Lower S/R at Indominco

and Trubaindo by 7% HoH and

19% HoH respectively

Installation of IPCC equipment

at mine site

Plan to lower costs furth

through improved prod

(i.e. IPCC, coal recovery

improvement at Bharint

testing substitute produ

explosive and hauling fu

IPCC expected to start a

4Q/2013

Operational improvement

Secure tonnage and price

LT of off-spec through

blending

Optimize infrastructure and

logistic efficiency

25% 50% 75% 100%

Achieved 14.4 Mt (50% of 2013

output targets) in 1H13

Establishment of ITMI

Australia Reducing production costs

further by 57% YoY

Installed CM units and longwall

equipment at Mandalong and

Springvale

Optimising infrastructure and

logistics efficiencies

Increasing export and

export-parity sales contracts

Cost reduction

57% YoY cut in

production costs

25% 50% 75% 100%

Cut production costs by 2% HoH

Plan to lower costs furth

through improved prod

Operational improvement

Installation of CM units and

LW equipment at Mandalong

and Springvale

25% 50% 75% 100%

Mandalong: Installed CM units

shorter LW move period

Springvale: improved conditions

and producing to budget

Installation of new gene

longwall at Springvale (e

30% production increas

3rdbolterminer at Mand

China/ Mongolia Gaohe: 5Mt production target

Hebi: maintain 1.2Mt output

Hunnu:

- Screening and product testing

stage

- Studying potential of coal

chemicals market

Project development

Gaohe: 5Mt production

Hunnu: Screening and

product testing stage as well

as studying potential of

coal chemicals market

25% 50% 75% 100%

Gaohe: 54% (2.7 Mt) of 2013

target

Hebi: 50% of 2013 output targets

Hunnu: Trial shipments of Tsant

Uul coal

Gaohe: on track to meet

2013 target

Hunnu: continue studyin

to chemical opportunity

Hunnu: more sample tes

will be performed

Power Target to complete 72%construction for Hongsa project

in 2013

Studying new power investment

opportunities

Hongsa Progress Target 72% completion of

overall progress by the end

of 2013

25% 50% 75% 100%

Overall progress approx. 62%

(ahead of plan)

Successfully transported heavy

equipment to site in 1Q13

On track to meet the fulltarget

Major activities are boile

structure and cooling w

construction

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BANPUFOCUS BANPUPE

By Mr. Narat Yuvanatemiya

Human Resources Management System Manager

The Management bonusis paid to the division manager level and above or employees whose job

grade are and above. Personnel at these levels have an important ro le in driving the organization

toward its goals.

The management bonus consists of two important components:

1. SingleYear Target: a target where the timeframe is less than one year

2. LongTerm Target: a target where the timeframe is more than one year

The evaluation of singleyear and longterm targets varies from unit to unit, depending onthe nature of the job and the responsibilities of a particular unit. However, both targets have to go

in the same direction and support the business plans at both department and corporate levels.

For example, the singleyear and long-term targets of the Human Resources Department must be

in line with and support Corporate Services' and Banpus business plan.

In addition, units are divided into two categories in relation to their duties and responsibilities.

In Thailand, these are called Business Unitsand Support Units, whereas Banpus subsidiaries overseas

refer to them as Operation Unitsand Support Units. The evaluation of both types of units is different.

Variable Bonus PaymentSystem of Banpu Part II

In the previous issue, we learned about the first group of variable bonus orthe group pool bonus. This time around, we would like to share informationabout the management bonus.

With sustained effort and commitment as well as well the cooperation of all levels of Banpu

people from both corporate and country bases, the Company managed to maintain its sound

performance in the first half year. With all of us in high s pirits, we believe we will pass through

these difficulties over time. As Mr. Chanin always says, I believe we are making good progress.

We will definitely overcome any further challenges and take full advantage of any coal price recovery

and other growth opportunities which may arise in the future. Our principle is not just to prepare

for the worst and hope for the best; we are preparing deliberately both for the worst and the best.

Country/Business

Current StrategicInitiatives

2013 Targets Mid-Year Review Focus for 2H/2013

Coporate Keeping overheads low

Pushing debt down to

intermediary and subsidiary levels

HR development and training

programmes

Strengthening senior

management team

Cost reduction

Keep overheads low

Push debt down to

intermediary and subsidiary

levels

25% 50% 75% 100%

$50M annualised admin costs (

ex. personnel and depreciation)

indicates >20% reduction YoY

Building up creditability of

subsidiaries with bank

Financial

Management

Share Management

Share repurchase programme

(5% of total paid-up capital)

25% 50% 75% 100%

Completed the programme on

16 July 2013 (at avg cost of

Bt292/sh)

BOD agreed to reduce

registered paid-up capital

10 to 1 share spilt

Debt Service

Minimizing risks from higher

financing cost

25% 50% 75% 100%

Bond issuance to better align

currency mismatch

Longer debt redemption prole

Fixed interest rates

Derivatives

Managing risks from markto

market causing fluctuation

of commodity prices as well

as currency and interest rate

markets

25% 50% 75% 100%

Actively monitored and managed

derivative activities

Apply hedge accounting for

CCS and Interest Rate Swaps

(IRS)

Communication with

subsidiaries on FX

management on regular basis

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BANPUPEOPLE CG OF THE MO

When considering the management bonus, the singleyear and longterm targets must meet

a certain criteria, whereas the evaluation of one target will not be linked to the other. In other words,

each target is independent of the other.

The management will not receive this kind of bonus if the actual performance of the group's

pool bonus in their respective country is below the threshold level.

In summary, the group pool bonus payment will be based on the Companys financial indicators.

The success of the whole Banpu group will affect the bonus payments of all Banpu subsidiaries.

Meanwhile, the management bonus payment will be based on the group's pool bonus in the country

the management belongs to.

Last year, the Human Resources Department improved the Companys variable bonus payment

system to be more in line with performance-based pay and changing conditions.

In conclusion, by only putting an international human resources management system in place, Banpu

will still not be able to experience sustainable growth. Success must come from cooperation between

employees in every country. Then, this success can be shared with everyone through the variable

bonus payment system.

CG VoiceHave Your Say,

Make Your Voice Heard

By Ms. Suwanna Somsawasdi

CorporateGovernance Manager

Banpu has committed to nurture corporate

culture and positive attitudes towards corporategovernance among staff at all levels whether

they are the Board of Directors, the managementor employees. Therefore, we regularly organize

events and activities to encourage employeesto turn whats in written our Code of Conduct

into actual implementation and

concrete practice.

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AUGUS/AUGUST 2013

CG OF THE MONTH BANPUYOU CAN SH

By Mr.Suthiroj Mongkolsinpong

Senior Community Development Specialist

Health Is WealthTCMs Sustainable Health and

Sanitation Development Program

One of the best wishes we all can hope for ourselves is good health, no matter

what our nationality, age, and gender are. Health is wealth is a saying that

reminds everyone to take good care of their health. When we get sick, wemay have to spend a lot of money for treatment, perhaps both using our own

savings as well as seeking financial assistance from the government. We mayneed other family members or relatives to take care of us during the recoveryperiod, causing time off work and reduced earnings. If we are healthy, we will

be both physically and mentally ready to live a good and happy life.

Regarding Banpus work in community development, especially at its

mining operations in Indonesia, health and sanitation is one of the

major areas in addition to our work in employment promotion and

income generation, education, social and cultural development, and

environmental conservation. Our health and sanitation work covers a

number of services that are provided to local people of every age and

in every community. These programs include promotion of healthcare

knowledge, setting up of mobile medical services, provision of medical

equipment, and training of health officers in order to improve the

efficiency of the current services. Moreover, scholarships in nursing

studies have been provided to young people in local communities on

the condition that the recipients must serve in their home area after

graduation so they will be an important force for health promotion

in the future.

In early , I had my firstvisit to all of the villages

around Trubaindo Mine (TCM)

with the Mine's community de-

velopment staff (CDTCM). I had

a chance to get information

from the local communities

and public health officers in

the area. I found that most people suffered from health problems and

lacked access to basic health facilities and services. Th

included, underweight newborn babies, lack of health k

among pregnant women and new mothers, and a numbe

tious diseases such as malaria, dengue fever and tub

Meanwhile, the mos

health issues in the

hypertension, respir

diseases, and diarrh

also found that mo

people did not vi

clinics until they we

ill. Regarding cle

supply, no village was served by the governments piped

in , CDTCM initiated the clean water supply in tw

namely Suakong and Dilang Puti.

Being aware of the situation, CDBKK made re

dations to CDTCM regarding sanitation, public health se

facilities for the villages near the Mine and nearby area in In

follows: (1) to organize mobile medical services for elderly

addition to those dispatched to schools once a year); (2) to

with local health stations to give education on mother

care and provide check-up programs for pregnant women

with young babies, and preschool children; (3) to conside

This year, Banpu is focusing on employee participation to

improve our corporate governance policy through an activity

called CG Voice. As the name suggests, the channel allows

Banpu people to make themselves heard as the CG Voice is

intended to be a forum for everyone to have their say. The Corpo-

rate Governance Division has posted important issues relating

to CG in the CG Voice to let our colleagues say what they think.

Representatives of Banpu management will also join each topic of

the forum to make their voice heard as well as answer questions

in a section called the Management Voice.

As we intend to let the CG Voice become an open forum in

which everyone can freely speak their mind, every opinion sub-

mitted to the CG Voice is kept confidential. Opinions expressed in

each topic will be presented to the executive responsible so that

the problems will be solved in the proper and timely manners. The

objective of this activity is to encourage twoway communication

which hopefully will promote a better understanding leading to

actual implementation of the Code of Conduct.

The CG Voice has already been live in Banpu since February .

Five topics have been raised so far and Banpu peoples voices are

heard on a monthly basis. The five topics discussed are:

1. Appreciating and realizing that the employee is Banpus

most valuable asset.

2. The CG-related grievance channel is a highlyefficient

CG practice.

3. Banpu people have a very strong commitment to integrity,

which is one of the core Banpu Spirit values, whether when

working alone or while collaborating with others.

4. The company puts priority on a suitable workplace

environment to ensure the safety and security of employees'

health and property.

5. Banpu is committed through its policy to conduct its

business with social and environmental responsibility.

Since July , the CG Voice has summed up staffs points of

view in each topic and conveyed them to interested audiences

on a monthly basis to ensure that every opinion of Banpu people

reflected through the channel receives a proper response to clarify

any misunderstandings. The CG Voice has been set up with the goalto stimulate an environment that encourages everyone to learn

and to understand what we can do and how we must comply with

the Code of Conduct. This will strengthen our corporate culture

and change positive attitudes to corporate governance into real

practice. We believe that real action is fundamental in making

Banpu even stronger.

8/12/2019 No189EN

11/11

In , TCM arranged the mobile medical services to provide

checkups, prescribe medicine, and give health advice to ,

students in schools and , elderly people in eight villages

located in the Ring I in Melak, Muara Lawa, Damai, and Bentian Besar

SubDistricts of West Kutai Regency. The programs also provided

health checkups, dietary supplements, and health advice to preg-

nant women and new mothers in

villages together with ,

babies and preschool children

who lived around the Mine. Among

this group of children, or

percent suffered from malnutrition.The figure was below the national

average percentage at percent

(UNICEF Indonesia, ), perhaps thanks to TCM's continuous efforts

on the mother and child health promotion programs. The results from

medical checkups revealed that the four most prevalent diseases in

students were respiratory tract diseases, skin diseases, diarrhea and

the common cold, while those in elderly people were respiratory

tract diseases, hypertension, high fever, and diarrhea, respectively.

For , TCM has planne

to continue the health program

initiated in the previous year, tryi

to minimize the severity of diseasand health problems. The mob

medical services will be expande

to cover all of the villages wh

basic health services and facilities will cover more clean water supp

projects in Basiq and Bermai villages with the establishment of coo

eratives so that the villagers can manage their water supply faciliti

on their own in the long run.

Additionally, CDTCM will be able to be more proactive

the most pressing issues are progressively resolved. This year an

in following years, health promotion programs will focus mainly o

knowledge dissemination, especially during visiting times of th

mobile medical services when the mother and child health program

are being offered. In addition, systematic health records shall be ke

so that the causes of diseases can be analyzed and better solution

and more targeted health campaigns can be designed. It is inte

esting and beneficial to work together with the local communiti

and authorities to prepare longterm health development plan

Continuous implementation of more pro-active programs aiming

transforming peoples behaviors, developing their skills, and changin

their attitude toward health care while encouraging their participati

will result in healthier children who will grow up to be strong, qual

citizens in the future.

BANPUYOU CAN SHARE

continuous health campaigns based on the data of commonly found

illnesses; and (4) to provide access to clean water in villages with

a focus on self-management.

In late , CDTCM sent out its first mobile medical service totreat elderly people in the fostered villages in West Kutai Regency.

The program received great feedback from the local people and

authorities. In the following year, the mother and child health promo-

tion programs were introduced. Both programs have been conducted

continuously since.