AGMS
and EGMS
Board of
Commissioners
Board of
Directors
Supporting
Organ
Communication
with Shareholders
CG
Factsheets
Information
Disclosure
Risk
Management

SUPPORTING ORGAN OF THE BOARD OF COMMISSIONERS


Audit Committee

AEI’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 .

AEI’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 AEI’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

59 as at December 31, 2021

Education History

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

Legal Basis of Appointment at PT Adaro Energy Indonesia, Tbk

The Board of Commissioners’ Decision dated May 14, 2018

Career History

Concurrent Position

  • Professor at the Faculty of Economics and Business Universitas Indonesia
  • Member of the Honorary Board of Code of Ethics the Audit Board of the Republic of Indonesia
  • National Council Member of Institute of Indonesia Chartered Accountants (IAI)
  • Council Member of ASEAN Federation of Accountants (AFA)
  • Member of Membership Committee International Federation of Accountants (IFAC)
  • Member of Public Accountant Profession Committee
  • Member of Accountancy Monitoring Committee Indonesia
  • Vice Chairman of Executive Board of the Indonesian Institute for Corporate Directorship (IICD)
  • Independent Commissioner of PT Adi Sarana Armada, Tbk.
  • Independent Commissioner of PT Industri Jamu dan Farmasi Sido Muncul, Tbk
  • Audit Committee member of PT Astra International, Tbk
  • Audit Committee member of PT Astra Agro Lestari, Tbk.

Training and Competency Development

  • Dynamic Government Internal Audit Capability
  • Enhancing Internal Audit Capability: A Strategy to Safeguard Goals of State and Regionally-owned Corporations
  • Big Data Analytics in Audit
  • Toward Comprehensive Corporate Reporting: Communicating Long-Term Value Creation
  • Ease of Doing Business in ASEAN
  • PSAK update as of January 1, 2022, Amendments to PSAK 1+25, SAKEP, and PSAK 74
  • Corporate Governance
  • Responsibilities of the Audit Committee when the Company is Involved in Legal Issues Related to Financial Statements
  • Assurance of Sustainability Roundtable Discussion
  • Green and Sustainable Finance: Now and Beyond
  • Internal Audit Role and Contribution in the Future
  • Sustainability Roundtable Discussion
  • Key Audit Matters (KAM) and Audit Opinion
  • Environmental, Social, and Governance (ESG)
  • Navigating a Changing Landscape: The Future of Comprehensive Corporate Reporting
  • Making Sense of the Complex Sustainability Reporting and Sustainability Reporting Landscape

Domicile

Jakarta

Citizenship

Indonesian

Age

65 as at December 31, 2021

Education History

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

Legal Basis of Appointment at PT Adaro Energy Indonesia

The Board of Commissioners’ Decision dated April 23, 2018

Career History

Work Experience

  • Bank Indonesia, Department of Credit and International
  • Lawyer, Kartini Mulyadi & Liene Gunawan
  • Chief of Legal, Director, President Director, and a member of the Board of Commissioners at Astra Group
  • Member of the Audit Committee of PT Acset Indonusa Tbk
  • Commissioner of PT Bhimasena Power Indonesia
  • Commissioner at PT Makmur Sejahtera Wisesa
  • Director of PT Adaro Power

Training and Competency Development

  • Responsibilities of the Audit Committee when the Company is Involved in Legal Issues Related to Financial Statements, 23 September 2021, by Ikatan Komite Audit Indonesia.
  • Carbon Tax and Carbon Pricing: Considerations for the Indonesian Power Sector, 7 December 2021, by PwC.

Domicile

Jakarta

Audit committee’s 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. AEI’s Audit Committee has had the Charter since 2009. At the beginning of 2021, a review of the Audit Committee Charter was carried out by the Audit Committee and approved by the Board of Commissioners on March 1, 2021.

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

  1. review of AEI’ financial information;
  2. dismissal and recommendation for the appointment of independent auditor and monitoring of their performance;
  3. review of Internal Audit Division’s audit results;
  4. internal control effectiveness;
  5. monitoring of AEI’scompliance with rules and regulations; and
  6. evaluation on the implementation of risk management.

During 2021, the Audit Committee held 8 (eight) official meetings, including with the Public Accounting Firm, Internal Audit Division, HSE & Risk Management Division, Finance Division, and Legal Division:

Name
Number of Attendance
%
Mohammad Effendi 8 100
Lindawati Gani 8 100
Ignatius Robby Sani 8 100

Based on the meetings during 2021, the Audit Committee concluded that:

  1. The Audit Committee accepted the explanations given by Finance Division and the public accounting firm. The Audit Committee concluded that the preparation and presentation of AEI’s financial statements and other financial information had conformed to the Financial Accounting Standards applicable in Indonesia.
  2. The Audit Committee had provided recommendations for the appointment of the public accountant and the public accounting firm. The Audit Committee concluded that the public accounting firm had performed audit in accordance with the applicable audit standards in Indonesia, by applying the principle of independence, audit scope, audit fee, public accountant’s skills and experience, public accounting firm and the audit team from the public accounting firm, the methodology, techniques and audit facilities used by the public accounting firm, and the communication of the audit findings to AEI’s management and the Audit Committee.
  3. Based on the discussion on the reports submitted by the Internal Audit Division, the Audit Committee concluded that the audit activities by the Internal Audit Division and the follow-up actions by the management had been performed adequately.
  4. Based on the discussion on the materials submitted in the meeting between the Audit Committee and the management, Internal Audit Division, and the public accounting firm, the Audit Commitee concluded that the internal control had been sufficiently effective for the company in running its business activities.
  5. As far as it was known to the Audit Committee, based on the meeting with the Legal Division, Internal Audit Division, Risk Management Department, and the public accounting firm, the Audit Committee concluded that the company had complied with the prevailing laws and regulations.
  6. Based on the discussion on the reports submitted by the Risk Management Department, the Audit Committee concluded that the risk management had been implemented adequately.

Nomination and remuneration function

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.

The roles carried out regarding nomination:

  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;
  4. determine candidates for membership of the BoC and BoD according to the company’s strategic directions, to be submitted to GMS; and
  5. identify and nominate candidates of the BoD according to the company’s strategic directions.

The roles carried out regarding remuneration:

  1. establish policies regarding the structure of the remuneration process and amounts; and
  2. assess the 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 2021, 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 3 50
Arini Saraswaty Subianto 4 67
Dr. Ir. Raden Pardede 6 100
Mohammad Effendi 6 100

In 2021, total remuneration of the BoC and BoD of AEI and its consolidated subsidiaries was USD19.46 million, 15% lower compare to US$22.97 million in 2020.

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

Supporting organ of board of directors

Corporate Secretary

As publicly listed company, AEI 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 Chief Financial Officer and the BoD. Corporate Secretary is appointed and dismissed by the BoD Decree. The appointment of corporate secretary is one GCG implementation measures.

Citizenship

Indonesian

Age

43 as at December 31, 2021

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 1 September 2014

Work experience

  • Corporate Secretary and Investor Relations Division Head, PT Adaro Energy Indonesia Tbk (2015 – now)
  • Internal Audit Division Head of PT Adaro Energy Indonesia 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

  • Corporate Secretary Training, 2014
  • “Asia Credit: Opportunities and Challenges” HSBC 5th Annual Asia Credit Conference, 2021
  • “Common Values Between the Onshore and Offshore Debt Capital Markets” HSBC 5th Annual Asia Credit Conference, 2021
  • “ESG - Capital Market Product Developments” HSBC 5th Annual Asia Credit Conference, 2021
  • “ESG - Climate Risk and Scenario Analysis” HSBC 5th Annual Asia Credit Conference, 2021
  • “Introduction to TCFD and SDGs” IDX-GRI-CDP sustainability learning series, 2021
  • Electricity during the pandemic and Recovery Outlook in 2021” Indo Premier Sekuritas, 2021
  • IR Magazine Forum and Awards South East Asia, 2021
  • ICSA Webinar “Defining POJK No. 42/ POJK. 04/2020 concerning Affiliated Transactions and Conflict of Interest Transactions”
  • ICSA Webinar “Duties and Functions of the Board of Directors, Board of Commissioners, Nomination Committee, Remuneration, Audit Committee and Corporate Secretary”
  • Cooperation Seminar of the Indonesia Stock Exchange and the Global Reporting Initiative in 2021. Theme: GRI-CDP Beginner Seminar - Introduction to TCFD and SDGs
  • Webinar CITIC CLSA: ESG Offshore Bond Strategy Conference
  • IDX Webinar: Conceptual Opinion on Amendment to Rule Number I-E concerning Obligation to Submit Information
  • Cooperation Seminar of the Indonesia Stock Exchange and the Global Reporting Initiative in 2021. Theme: GRI-CDP Advanced Seminar - Introduction to TCFD and SDGs
  • Public Consultation and Exclusive Dialogue for the Draft GRI Guidelines for Coal Sector Standards
  • ERM Webinar Series: From Promise to Action - Decoding TCFD climate disclosure
  • Webinar Regulatory ICSA Academy - Exploration of POJK No. 17/POJK.04/2020, concerning Material Transactions and Changes in Business Activities.
  • Macquarie APAC ESG Summit 2021 & GIG Green
  • Energy Conference
  • Webinar IDX-GRI-CDP-Advanced Seminar Preparing Corporate Action Plan on TCFD and SDGs

Domicile

Jakarta

The Corporate Secretary activities in 2021 consisted of:

  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 2021 AGMS and 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 AEI’s shares and other capital market matters;
  5. together with the Internal Audit Division, improved and 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;
  8. developed and proposed to the related directorate on work plans, budget and performance indicators of Corporate Secretary & Investor Relations Division; and
  9. supported the IPO process of PT Adaro Minerals Indonesia Tbk.

In 2021, 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 2021.

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 2021, AEI was covered by 30 analysts who issued reports on AEI’s operational and financial analyses, as well as on the coal market as a whole. The Investor Relations’ team attended 25 conferences and conference calls with a total of 131 meetings attended which was mostly held virtually 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 in risk management, the Internal Audit Function’s role is to provide an objective and independent assurance and consultancy services for PT Adaro Energy Indonesia Tbk and its subsidiaries in the areas of governance, risk management and control, to add value and improve the company’s operations.

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 .

The Internal Audit Function has been also established at three AEI’s subsidiaries, i.e. PT Adaro Minerals Indonesia Tbk, PT Adaro Indonesia, and PT Saptaindra Sejati. The Internal Audit Functions of the subsidiaries report to their President Director while also coordinate with AEI’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 2021, there were 555 audit objects in audit universe and the Internal Audit Function completed a total of nine audit and consulting reports with more comprehensive audit coverage. The Company’s audit covered four of the 41 strategic business units of Adaro 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 periodically. 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 2021, 132 corrective actions had been fully implemented, or 85% (target 85%) of the total corrective actions that were due by December 2021.

Review of the internal control system effectiveness

The Internal Audit Function rates the adequacy of controls implemented by management to mitigate risks and shows the rating in each audit report submitted to the Board of Directors, Board of Commissioners the Audit Committee and related management personnel. Based on the review on the three lines of risk management, it can be concluded that the internal control system across the Adaro Group had been running as intended with some opportunities for continuous improvements.

 

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 in December 2019, and his appointment has been reported through an official letter to OJK and copied to the Board of Commissioners and Board of Directors of PT Adaro Energy Indonesia Tbk.

The internal audit team consisted of five 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 2021, 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 2021 with the BoD (three 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 its Internal Audit Charter if any.
Last modified on June 23, 2022, 11:30 am | 30303