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SUPPORTING ORGAN OF THE BOARD OF COMMISSIONERS


Audit Committee

AE’s Audit Committee was established to assist the BoC in carrying out their supervision duties, to provide advice on the implementation of internal controls and corporate audits, and to ensure the proper management of the company in accordance with GCG principles and the OJK Regulation No. 55/POJK.04/2015 concerning the Establishment and Job Guidelines of Audit Committee. The activities of Audit Committee must be reported to the BoC and included in the annual report.

For the full Audit Committee Charter, please click here .

AE’s Audit Committee consists of three members: one independent commissioner, acting as the Chairman, and two experts, each for the area of accounting and law.

From left to right: Ignatius Robby Sani, Mohammad Effendi, Lindawati Gani

 

The current members of the Audit Committee are:

He was appointed as the Chairman of AE’s Audit Committee based on the Board of Commissioners’ Decision dated 27th May 2019. For further information, please see the Board of Commissioners' profile.

Citizenship

Indonesian

Age

57 years as of December 31, 2019

Education history

  • Bachelor of Economics majoring in Accounting from Universitas Airlangga (1985);
  • Master of Business Administration (MBA) majoring in General and Strategic Management from Institut Pengembangan Manajemen Indonesia (IPMI) affiliated with Harvard Business School (Boston-USA) (1986);
  • Master in Management majoring in Management Accounting from Universitas Indonesia (1994);
  • Doctor of Philosophy (PhD) from Universitas Indonesia (2002)

Career History

 

Legal basis of appointment

The Board of Commissioners’ Decision dated May 14, 2018

  • Work experience
  • Professor at the Faculty of Economics and Business of the University of Indonesia (2011 – now)
  • National Council Member of Institute of Indonesia Chartered Accountants (IAI) (2014 – now)
  • Council Member of ASEAN Federation of Accountants (AFA) (2014 - now)
  • Member of Membership Committee International Federation of Accountants (IFAC) (2019 – now)
  • Independent Commissioner of PT Hero Supermarket Tbk (2012 – now)
  • Audit Committee member of PT Astra International Tbk (2017 – now)
  • Audit Committee member of PT Astra Graphia Tbk (2019 – now)
  • Training and competency development | Pelatihan dan pengembangan kompetensi
  • Certification in Audit Committee Practices, IKAI (Ikatan Komite Audit Indonesia), Jakarta 2019
  • Speaker at the 2019 IAI-AFA-IAESB International Conference "Competencies of the Future: Professionalism of Accountants in the Disruption Era", Bali, 2019
  • Speaker at the International Seminar: “Becoming the Next Generation of Professional Accountant: Regional and Global”, Bali 2019
  • Speaker at Program Astra Accounting Academy, CA Indonesia: “Kompetensi Global Akuntan Profesional", Ikatan Akuntan Indonesia (IAI) and PT Astra International Tbk, Jakarta 2019
  • Speaker at The 1st ASEAN CPA Conference: “Broaden the Horizon”, ASEAN CPA Coordinating Committee, IAI, IAPI, and IAMI, Bali, 2019
  • Speaker at the ISCA FRC-AFA Financial Reporting & Business Conference 2019: “Rising to The Challenges of Financial Reporting Celebration of The 21st AFA Conference”, Institute of Singapore Chartered Accountants (ISCA), Singapore, 2019
  • Participant of GRC Seminar: “Sustaining Through Integrated”, GRC Summit 2019, KNKG (National Committee on Governance Policy), Jakarta, 2019
  • Participant of Master Class: GRC Integration, GRC Summit 2019, KNKG (National Committee on Governance Policy), Jakarta, 2019
  • Participant of “Capturing Potentials among Digital Millenials”, Digital & Risk Management in Insurance, Asosiasi Asuransi Jiwa Indonesia (AAJI), Bali, 2019
  • Participant of Seminar Nasional HUT IAI "Akuntan Profesional Unggul, Indonesia Maju: Mendukung Pembangunan SDM dan Transformasi Ekonomi Menuju Indonesia Emas 2045", IAI and IFAC, Jakarta, 2019

Domicile | Domisili

Jakarta

Citizenship

Indonesian

Age

63 years as of December 31, 2019

Education history

  • Notary Program Faculty of Law from Universitas Indonesia (1990)
  • Master of Laws (LL.M.) from Washington College of Laws (1987)
  • School of Law from Universitas Gadjah Mada (1981)

Career History

 
  • Legal basis of appointment
  • The Board of Commissioners’ Decision dated April 23, 2018.
  • Work experience

Director of PT Adaro Power (2015 – 2018)

  • Commissioner at PT Makmur Sejahtera Wisesa (2015 – 2018)
  • Commissioner of PT Bhimasena Power Indonesia (2016 – 2018) 
  • Member of the Audit Committee of PT Acset Indonusa Tbk (2015)
  • Chief of Legal, Director, President Director, and a member of the Board of Commissioners at Astra Group (1994 – 2015)
  • Lawyer, Kartini Mulyadi & Liene Gunawan (1990 – 1993)
  • Bank Indonesia, Department of Credit and International (1981-1989)

Training and competency development

Certification in Audit Committee Practices (2019)

Domicile

Jakarta

Duties and Responsibilities

The Audit Committee has performed its roles and responsibilities in accordance with the mandate given by the BoC, and in accordance with the Audit Committee Charter. AE’s Audit Committee has had the Charter since 2009. Recognizing the company’s development, as well as the prevailing laws and regulations, the Charter was amended periodically, and the latest update was in June 2019.

As stipulated in the renewed Audit Committee Charter, the Audit Committee’s duties and responsibilities include:

  1. the review of AE’ financial statement;
  2. select, recommend, and monitor an independent auditor and their performance;
  3. overseeing the Internal Audit’s works;
  4. internal control effectiveness;
  5. the compliance with the rules and regulations;
  6. the implementation of risk management;

In May 2019, the BoC appointed Mohammad Effendi, AE’s newly Independent Commissioner, to be the Chairman of AE’s Audit Committee. He started his duties by conducting a series of meetings with representatives from AE’s business pillars and corporate functions to gain more understanding about the company’s business. Furthermore, a site visit with members of Audit Committee was conducted in July 2019.

During 2019, the Audit Committee held 7 (seven) official meetings, consisting of 2 (two) meetings with the previous Chairman of Audit Committee, Dr. Ir. Raden Pardede, and 5 (five) meetings with the current Chairman of Audit Committee, Mohammad Effendi.

Name
Number of Attendance
%
Dr Ir Raden Pardede 2 100
Lindawati Gani 2 100
Ignatius Robby Sani 2 100
Name
Number of Attendance
%
Mohammad Effendi 5 100
Lindawati Gani 5 100
Ignatius Robby Sani 5 100

Based on the meetings during 2019, the Audit Committee concluded that:

  1. The Audit Committee accepted the explanations given by Finance & Accounting Division and the external auditor with regard to the published financial statements and financial information.
  2. Selected and recommended on the external auditors. The external auditors had performed its roles independently and professionally in accordance with the applicable audit standards in Indonesia, understing the Company’s business and the risk associated with its business. The external auditor had communicated the results to AE’s management and the Audit Committee.
  3. The Internal Audit Function had performed its roles and responsibilities. Suggestions from Internal Audit have also been followed up by the management.
  4. Internal control systems had been consistently implemented.
  5. AE had put its best efforts to comply with the applicable laws and regulations.
  6. AE’s risk management had worked effectively as intended.

Independency Statement

To maintain the independency, every member of the Audit Committee has declared their independency through an Independency Declaration. The independency statement of AE’s Audit Committee is organized in accordance with OJK Regulation No.55/POJK.04/2015 regarding the Establishment and Job Guidelines of the Audit Committee.

Nomination and Remuneration

The BoC decided that nomination and remuneration functions for the BoC and BoD will be carried out directly by the BoC, without the formation of a nomination and remuneration committee.

In regard to the implementation, the BoC acts independently by referring to the Guideline of Nomination and Remuneration Function, which specifies the BoC’s relevant duties and responsibilities.

Regarding Nominations:

  1. Establish policies regarding: the composition of the BoC and BoD; the criteria required in the nomination process; and performance evaluation of BoC and BoD members;
  2. Assess the performance of the BoC and BoD members based on the policy;
  3. Establish policies regarding the BoC and BoD development programs; and
  4. Determine candidates for membership of the BoC and BoD to be submitted to GMS.

Remuneration function:

  1. Establish policies regarding the structure of the remuneration process and amounts; and
  2. Assess BoC and BoD members’ performance with reference to remuneration received.

The structure, policy and value of the remuneration of the BoC and BoD shall consider the following:

  1. Remuneration applied within the companies in the same industry and business size;
  2. The duties, responsibilities and authority of the BoC and BoD related to the achievement of the company’s goals and performance;
  3. Performance target of each member of BoC and BoD; and
  4. The balance between fixed and variable allowances.

During 2019, discussions regarding nomination and remuneration were held once every four months and included in BoC meetings.

Name
Number of Attendance
%
Edwin Soeryadjaya 4 67
Ir. Theodore Permadi Rachmat 6 100
Arini Saraswaty Subianto 5 83
Dr. Ir. Raden Pardede 5 83
Mohammad Effendi* 4 100**

*Was appointed at the 2019 AGMS and attended all BoC meetings since the appointment.

**Calculated as from the appointment

In 2019, total remuneration of the BoC and BoD of AE and its consolidated subsidiaries was USD23.6 million, or the same as in 2018.

For the full Guideline of Nomination and Remuneration Function, please click here .

SUPPORTING ORGAN OF THE BOARD OF DIRECTORS

Corporate Secretary

As publicly listed company, AE is obliged to appoint a corporate secretary in accordance with OJK Regulation No. 35/POJK.04/2014. Corporate secretary serves as a liaison between company and the stakeholders and takes a strategic role to ensure that the company complies with the capital market rules and regulations.

Corporate secretary is directly responsible to the BoD and is appointed and dismissed by the BoD Decree. The appointment of corporate secretary is one GCG implementation measures.

Citizenship

Indonesian

Age

41 as at December 31, 2019

Education history

  • Bachelor of Commerce in Economics from the University of New England, Australia (1996-1999)
  • Master of Economics in economics and finance from Macquarie University, Australia (2000-2001)

Career History

 
  • Legal basis of appointment
  • The BoD Decree dated September 1, 2014
  • Work experience
  • Head of Corporate Secretary and Investor Relations Division (2015 – now)
  • Head of Internal Audit Division of PT Adaro Energy Tbk (2019 – now)
  • Head of Corporate Finance of PT Apexindo Pratama Duta Tbk (2008 - 2014)
  • Investor Relations of PT Apexindo Pratama Duta Tbk (2005 - 2008)
  • Training and competency development
  • Coking Coal Workshop (2017)
  • Mining Economic Training (2016)
  • Corporate Secretary training program (2015)

Domicile

Jakarta

The Corporate secretary activities in 2019 included:

  1. Presented regular reports and information disclosures to the OJK and IDX in compliance with capital market rules and regulations;
  2. Supported the BoD in conducting AGMS 2019 and 2019 Annual Public Expose;
  3. Oversaw the company’s shareholders registration and reported the adjustments to the BoD and regulators;
  4. Provided updates to the BoC and BoD on AE’s shares and other capital market matters;
  5. Together with the Internal Audit Division, promoted GCG implementation in the company and identified governance risks, including risks to company reputation or image;
  6. Maintained effective communications with stakeholders, in particular with capital market regulatory bodies;
  7. Ensured the company’s website was fully updated and in compliance with capital market rules and regulations; and
  8. Developed and proposed to the related director on work plans, budget and performance indicators of Corporate Secretary & Investor Relations Division.

In 2019, Corporate Secretary Department achieved 100% compliance to the capital market rules and regulations. There were no fines and/or penalties have been imposed to the company during 2019.

Investor Relations

The Investor Relations serves as the liaison between the company and the shareholders at both local and international levels, by sharing the company’s business and financial performance, as well as corporate achievements. The information is expected to help analysts in building stories about the company and the investors in making investment decisions. The company believes that ongoing dialogues with the shareholders based on fact and transparency will create maximum shareholder value.

To ensure the company’s messaging and performance are well-communicated, Investor Relations release several reports, such as the quarterly press releases, financial statements, financial press releases, and disclosure reports. Investor relations also communicate through several events, such as investor presentations, the public exposes, and the regular meetings with analysts and investors. As at the end of 2019, AE was covered by 27 analysts who issued reports on AE’s operational and financial analyses, as well as on the coal market as a whole. The Investor Relations’ team attended 12 conferences and 1 non-deal international and domestic roadshows, with a total of 194 meetings attended during the year.

Internal Audit

The Internal Audit Function has carried out its duties in accordance with the Internal Audit Charter. The Board of Directors has given its full support to the internal audit activities and there were no restrictions on the scope and access for the Internal Audit Function.

As the third line of defense in risk management, the Internal Audit Function’s role is to provide an objective and independent assurance and consultancy services for PT Adaro Energy Tbk and its subsidiaries in the areas of governance, risk management and control, to improve the company’s operations and add value.

The Internal Audit Function directly reports to the President Director, who has delegated the Internal Audit Charter to the Internal Audit Function as a mandate to perform and execute its duties and responsibilities. The Internal Audit Charter has been updated in November 2017 and signed by the President Director, Vice President Director and the Board of Commissioners.

For the full Internal Audit Charter, please click here .

The Internal Audit’s practices are based on the International Standards for the Professional Practice of Internal Auditing issued by the Institute of Internal Audit (IIA).

Annual Audit Plan

To provide optimum benefits with the available resources, the Internal Audit Function selects objects to be included in an annual audit plan based on risk priorities by taking into account the risk profile of all strategic business units. Before it is finalized, the annual audit plan is presented to the Board of Directors and Audit Committee to ensure that the plan is aligned with the company’s strategy and has addressed their concerns.

In 2019, there were 448 audit objects in AE’s audit universe, out of which 26 audit objects were selected to be included in the annual audit plan. A total of 27 audit and consulting reports were completed, the same as in 2018. AE’s audit covered 9 of the 38 strategic business units of Adaro and 12 of 29 risk types.

Implementation of corrective actions

Each audit report includes recommendations or corrective actions agreed with the relevant managements.

The recommendations will only provide value if implemented; therefore, the implementation is monitored and reported to the Board of Directors and the Audit Committee on a quarterly basis. The number of corrective actions implemented by the management is one of the Internal Audit Function’s key performance indicators (KPIs).

The managements of the strategic business units are active in implementing the corrective actions recommended by the Internal Audit Function. In 2019, 206 corrective actions had been fully implemented, or 87% (target 84%) of the total corrective actions that were due by December 2019.

Review of the internal control system effectiveness

The Internal Audit Function rates the adequacy of controls implemented by management to mitigate risks and shows this in each audit report submitted to the Board of Directors, Board of Commissioners the Audit Committee and related management personnel. The Internal Audit Function has completed 27 audit reports covering 9 strategic business units. Based on our review of the effectiveness of three lines of defense, it can be concluded that the internal control system in Adaro is working as intended.

Use of information technology

To facilitate its activity, the Internal Audit function has been using information technology as needed, such as for working papers, internal audit portal for knowledge management, timesheets, corrective actions data base and data analytics tools software.

Internal audit team

The internal audit team consists of internal auditors with a variety and complementary range of educational backgrounds (such as accounting, information technology and industrial engineering), skills and work experiences.

The function is led by Mahardika Putranto, who is also the Corporate Secretary. He reports directly to the President Director. Mahardika was appointed on December 2019, and his appointment has been reported through an official letter to the Financial Services Authority and copied to the Board of Commissioners and Board of Directors of PT Adaro Energy Tbk.

The internal audit team consists of 10 auditors. One of them possesses international professional certification related to their internal audit work. The internal audit team also develops training programs to ensure they have adequate skills and knowledge to perform their responsibilities. In 2019, on average, each auditor had eight days of training.

The Internal Audit Function adopts the Internal Audit Code of Ethics issued by the IIA. Each internal auditor is required to read and understand the code. To maintain its objectivity and independence, every year the internal auditors must sign a Conflict of Interest Statement to ensure that they do not have a potential conflict of interest in carrying out their duties and responsibilities. If there is any potential for a conflict of interest, actions will be taken to address the risk.

Quality assurance and improvement program

To ensure and keep improving its audit quality, the Internal Audit Function implements a quality assurance and improvement program that comprises:

  • conducting surveys to obtain feedback from the management;
  • performing self-assessment and peer review for each audit assignment to ensure compliance with the existing Internal Audit manual;
  • conducting self-assessment on the conformance with International Standards for the Professional Practice of Internal Auditing and compliance with the OJK regulations;
  • reviewing external quality assurance required to be performed every five years – this was scheduled for 2019 but postponed to the next term; and
  • conducting continuous improvement program (CIP) to improve audit cycle time and productivity

The result of quality assurance and improvement program is compiled and discussed every year to be included in our continuous improvement project for the following year. The quality assurance and improvement program has been performed regularly and produced positive results. The outcomes are reported to the Board of Directors and the Audit Committee on a regular basis.

Meeting with key stakeholders

To fulfil the accountability aspect, the Internal Audit Function conducted periodic meetings in 2019 with the BoD (four times) and the Audit Committee (three times) with following agenda:

  • progress of the 5-year plan;
  • progress of the annual audit plan;
  • audit reports;
  • status of corrective actions’ implementation; and
  • constraints in implementing the Internal Audit Charter.

The Internal Audit Function also held one meeting with the BoC to discuss the relationship between the Internal Audit Division and the BoC and the summary of internal audit activities during 2019.

Last modified on August 6, 2020, 3:52 pm | 17076