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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

58 years as of December 31, 2020

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)
  • Independent Commissioner PT Adi Sarana Armada Tbk (2020 - 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
  • Speaker at PT Astra International Audit and Risk Day 2020, Jakarta 2020
  • Speaker at Agile Auditing: Partnership between Audit Committee and Internal Audit in response to Disruption, Jakarta 2020
  • Speaker at National Accounting Symposium XXIII, Jakarta 2020
  • Participant of Covid 19 – Navigating Audit Committee Responsibilities and Update on New Regulation: Omnibus Law, Jakarta 2020
  • Participant of Webinar Accounting, Organizations, and Sustainable Development Relationships, Jakarta 2020
  • Participant of IFAC Virtual Summit – The Anticipatory Accountant: Global Trends Transforming Learning and Development - Technology, Climate Change, Society and Governance, 2020
  • Participant of 2020 Institute of Internal Auditors Indonesia National Conference. Enhancing Communication and Collaboration: Learning from the Pandemic, Jakarta 2020
  • Moderator of Business, Finance and Accounting Conference 2020 “Resilience toward Recovery Path: Indonesia’s Business Landscape in 2021”, Jakarta 2020

Domicile | Domisili

Jakarta

Citizenship

Indonesian

Age

64 years as of December 31, 2020

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 is committed to complying with the Audit Committee Charter in carrying out their duties and functions in such a manner that consistently supports the BoC in accordance with the principles of Good Corporate Governance (GCG) and the applicable rules and regulations. 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 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. selection and recommendation for the appointment of independent auditor and monitoring of their performance;
  3. review of Internal Audit Division’s audit result;
  4. internal control effectiveness;
  5. monitoring of AE’s compliance with rules and regulations; and
  6. the implementation of risk management;

During 2020, the Audit Committee held 10 (ten) official meetings:

Name
Number of Attendance
%
Mohammad Effendi 10 100
Lindawati Gani 10 100
Ignatius Robby Sani 10 100

Based on the meetings during 2020, 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. The external auditors had performed its roles independently and professionally in accordance with the applicable audit standards in Indonesia.
  2. The external auditor was selected and recommended to the BoC to audit AE’s financial statements FY2020. The Audit Committee is of the view that the public accounting firm had performed audit in accordance with the applicable audit standards in Indonesia, by applying the principle of independence, objectivity, procedures and professionalism, understanding the Company’s industry and businesses including the risks, planning the audit process and monitoring the team performing the audit. 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 objectively and independently according to its charter.
  4. Based on the discussion on the materials conveyed in the meeting of the Audit Committee with the management, the Internal Audit Division, and the public accounting firm, the Audit Committee is of the view that the company’s internal control had been adequate for its business activities.
  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.

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 2020, discussions regarding nomination and remuneration were held 6 (six) times and included in BoC meetings.

Name
Number of Attendance
%
Edwin Soeryadjaya 6 100
Ir. Theodore Permadi Rachmat 1* 17
Arini Saraswaty Subianto 6 100
Dr. Ir. Raden Pardede 6 100
Mohammad Effendi 4 100

*Ir. Theodore Permadi Rachmat was unable to attend 5 (five) meetings due to an engagement that could not be postponed or represented.

In 2020, total remuneration of the BoC and BoD of AE and its consolidated subsidiaries was USD22.97 million, 3% lower compare to US$23.57 million in 2019.

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

42 as at December 31, 2020

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
  • Macquarie Coalindo
  • Indonesia Energy & Natural Resources Virtual Series
  • Pendalaman POJK 17/POJK.04/2020 tentang Transaksi Material & Perubahan Kegiatan Usaha
  • Wood Mackenzie 2020 Global Coal Virtual Series
  • Goldman Sachs Investor Relations Forum - Asia Pacific
  • MSCI Virtual Event: ESG Research for Indonesia
  • BlackRock Corporate CFO Summit
  • Indo Premier Sekuritas - Kondisi Kelistrikan dimasa pandemi dan Recovery Outlook di 2021
  • IR Magazine Award
  • Diskusi Panel Agile Auditing: Kemitraan Komite Audit dengan Auditor Internal dalam Merespon Disrupsi (2020).
  • ISO 37001: Beyond Certification - Implementing Effective Anti-bribery Controls in Organization.
  • 2020 National Conference - Enhancing Communication and Collaboration: Learning from Pandemic.
  • Refreshment Kode Etik Internal Audit.
  • ASEAN Corporate Governance Scorecard Workshop
  • Challenges faced by Corporate Secretary in the new normal
  • “Corporate Culture” understanding corporate secretary’s strategic role in shaping corporate culture organized

Domicile

Jakarta

The Corporate secretary activities in 2020 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 2020 and 2020 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 2020, 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 2020.

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 2020, AE was covered by 30 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 8 conferences and 18 non-deal international and domestic roadshows with a total of 152 meetings attended which was mostly held virtually during the year.

In 2020, AE’s website received the IR Magazine Award as the Best IR website in South East Asia. The award event was held online on December 8, 2020, and we were shortlisted in two other categories: best IR in energy sector in South East Asia and best annual report (mid-cap) in South East Asia. The assessment for Best IR website was conducted by panel of judges consisting of experts in investor relations.

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 was signed by the President Director, Vice President Director and the Board of Commissioners in November 2017 as an update to the 2013’s Internal Audit Charter.

For the full Internal Audit Charter, please click here .

In December 2020, Internal Audit Function in PT Adaro Indonesia and PT Saptaindra Sejati were established. The subsidiaries’ Internal Audit Functions report to their respective President Director and coordinates with AE’s Internal Audit Function.

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 considering 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 2020, there were 542 audit objects in audit universe. The Internal Audit Function has completed a total of nine audit and consulting reports with more comprehensive audit coverage. AE’s audit covered five of the 41 strategic business units of the Adaro Group and five 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 2020, 152 corrective actions had been fully implemented, or 86% (target 85%) of the total corrective actions that were due by December 2020.

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 nine audit reports covering five strategic business units. Based on our review of the effectiveness of three lines in risk management, it can be concluded that the internal control system in the Adaro Group 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 consisted of eight 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 2020, on average, each auditor had four 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;
  • 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 2020 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.
Last modified on May 30, 2021, 6:13 am | 22500