Audit Committee

 

To support the implementaton of Good Corporate Governance, pursuant to the Decision Letter of the Board of Directors No. STI-TMG/HRD/307/ XII/2014, PT Surya Toto Indonesia Tbk. has established an Audit Committee which has the duty to assist the Board of Commissioners. The Audit Committee is established to assist the implementation of supervision performed by the Board of Commissioners, therefore the Audit Committee must be independent.

Audit Committee Charter

 

1.      MAIN REFERENCES 

1.1.  Law and/or capital market regulations 

 

1.1.1.     Circular Letter of Head of Capital Market Supervisory Agency (Bapepam) No. SE-07/PM/2004 dated December 22, 2004 regarding "The implementation of Bapepam Rules No. IX.1.5” of “Establishment and Implementation Working Guidelines of Audit Committee". 

 

1.1.2.     Decision of the Chairman of Bapepam No. KE-29/PM/2004 dated September 24, 2004 replacing the Decision of the Chairman of Bapepam No. KEP-41/PM/2003 dated December 22, 2003 about "No. IX.1.5 Bapepam Rule" of "Establishment and Implementation Working Guidelines of Audit Committee". 

 

1.1.3.     Decision of the Board of Directors of Jakarta Stock Exchange (JSX) No. Kep-305/BEJ/07-2004 (Annex II) dated July 19, 2004 Jo Decision Directors of Jakarta Stock Exchange No.Kep-339/BEJ/07-2001 dated July 20, 2001 about "Recording of Securities Regulation No. 1-A point C” of the “Independent Commissioner, the Audit Committee and Company

Secretary ". 

 

1.2.  Law and/or other regulations 

 

1.2.1.     Standard Auditing (SA 380) regarding "Communication with Audit Committee" of the "Professional Standards for Public Accountants" issued by the Indonesian Institute of Accountants (IAI) dated August 1, 1994. 

 

1.3.  General Guidelines 

 

1.3.1.     "Guidelines for Independent Commissioner and Guidelines of the Effective Audit Committee Formation issued by the National Committee for Corporate Governance, January 2004. 

 

2.      DEFINITIONS 

The Audit Committee is a committee established by the Board of Commissioners that the obligation for the Company as a Public Company/Issuer to have this as an executive committee that conducted oversight of the Board of Commissioners.

 

3.      PURPOSE 

The purpose of the Audit Committee is to assist the Board of Commissioners in fulfilling the functions of supervision of the financial reporting process, risk management and internal control systems, both the audit process undertaken by Internal Audit Division, the external auditors and the Company's compliance to all applicable laws and/or regulations in force, the code of conduct and Standard Operating Procedures (SOP) in the framework of the implementation of Good Corporate Governance (GCG). 

 

4.      ORGANIZATION 

4.1.  Membership

 

4.1.1.     Memberships of the Audit Committee are appointed and discharged by the Board of Commissioners thus Audit Committee responsible to the Board of Commissioners. 

 

4.1.2.     Membership of the Audit Committee reported to the General Meeting of Shareholders and the Capital Market Authority. 

 

4.1.3.     The Audit Committee consists of at least one person Independent Commissioner and at least two independent members from outside the Company. 

 

4.1.4.     Chairman of the Audit Committee chaired by an Independent Commissioner. In the event that there is more than

one Independent Commissioner then one of them acting as Chairman of the Audit Committee. 

 

4.2.  Membership Requirements 

 

4.2.1.     The Audit Committee should have the independence, competition and high integrity. 

 

4.2.2.     One of the Audit Committee have the educational background of financial or accounting. 

 

4.2.3.     Have enough knowledge to read and understand financial statements. 

 

4.2.4.   Having sufficient knowledge about the existing regulations in the field of capital markets and other related regulations. 

 

4.2.5.     Not a person in the Office of Public Accountant who provides audit services and/or non-audit on the Company in the last year before being picked up by the Board of Commissioners as referred to in Bapepam No.VIII.A.2 about independence of accountants who provide auditing services in the capital market.

 

4.2.6.     Not a key employee of the Company in the last one year before being appointed by the Board of Commissioners. 

 

4.2.7.     The Company does not have shares either directly or indirectly. In the case of the Audit Committee obtained the shares from a legal event than in the maximum period of six months after the shares gained it must transfered to another party. 

 

4.2.8.     Does not have an affiliation relationship with the Company, the Board of Commissioners, The Board of Directors or the main shareholders of the company.

 

4.2.9.     Does not a good business relationship directly or indirectly related to the Company's activities. 

 

4.2.10.   Not concurrently as a member of the Audit Committee of the Issuer or any other Public Companies in the same period. 

 

4.3.  Duty Period 

Duty period of the Audit Committee members should not be longer than the period of the Board of Commissioners and may be re-elected for one term. 

4.4.  Working principle 

 

4.4.1.     Independency.

 

4.4.2.     Objective.

 

4.4.3.     Integrity.

4.4.4.     Dedication.

 

4.4.5.     Professional.

 

4.4.6.     Understanding of the organization, business environment as well as the risks and internal controls. 

 

4.4.7.     Comply with law and administration. 

 

4.4.8.     Special ethics and public ethics. 

 

 

5.      AUTHORITY 

5.1.  The Audit Committee is authorized to access in full, free and not limited to records, personnel, funds, assets and other resources of the Company relating to the implementation of its duties. 

 

5.2.  Audit Committee in cooperation with the Internal Audit Division and the external auditors in carrying out the authorities, duties and responsibilities.

 

5.3.  Audit Committee in cooperation with committees established by the Company (if necessary). 

 

6.      DUTIES AND RESPONSIBILITIES 

Audit Committee have a duty to provide independent professional opinion to the Board of Commissioners and identify things that need the attention of the Board of Commissioners and carry out tasks related to the task of the Board of Commissioners include the following: 

 

6.1.  Financial Report and Information 

 

6.1.1.     Performing investigation/review of financial information that will be issued as the Company's financial

statements, projections, and other financial information. 

 

6.1.1.1.  Conduct discussions with the Board of Directors and/or members of management in the company’s organizational structure regarding quarterly financial statements of the company (unaudited) prior to be submitted to Bapepam-LK and the authority which the securities of the Company Stock registered. 

 

Subject: 

a.    Is the preparation of financial statements has been eligible with the "Statement of Financial Accounting Standards" and "Consolidated Financial Reporting Standards" set by the Bapepam-LK and the authority which the securities of the Company Stock registered. 

 

b.     Do the financial statements fulfill the quality aspects of information disclosure stipulated by the Bapepam-LK and the authority which the securities of the Company Stock registered. 

 

c.     Are accounting policies applied in preparing the financial statements have been applied consistently. 

 

d.     Do the financial statements meet the applicable tax provisions. 

 

e.     Does the Company's performance quarterly is eligible with specified performance targets. 

 

f.      Does the Company and/or members of management involved in justice issues.

 

6.1.1.2.  Conduct discussions with the Board of Directors and/or members of management in the company’s organizational structure regarding the report of realization of the use of funds as the result of emissions equity securities and debt securities before it is submitted to Bapepam-LK and the authority which the securities of the Company Stock registered.

Subject: 

 

a.   Does the realization of the use of these funds in accordance with the plans for using the funds of the Company presented in the Registration Statement to Bapepam-LK and in the Prospectus to prospective investors. 

 

b.    Does the reports of the results of realization of the use of funds are equity securities of emissions and are debt securities in accordance with the following conditions:

 

  • Decision of the Chairman of Bapepam No. KEP-27/PM/2003 dated July 17, 2003 regarding Bapepam No. X.K.4 about "Use of Funds Report Results Realization Public Offering"

 

  • JSX Board of Directors Decision No. Kep-306/BEJ/07-2004 dated July 19, 2004 about "Rules of the I-E Information Delivery Obligation ". 

 

6.1.1.3.     Conduct discussions with the Board of Directors and/or members of management in the company’s organizational structure concerning financial planning and budgets drawn up. 

 

Subject: 

 

a.   Does the Company have a financial planning for the long-term and medium term that refers to the Company's objectives in the long term and medium term. 

 

b.    Does basic assumptions and the scenario used in the preparation of financial planning as well as budget is reasonable (valid) and trustworthy (reliable). 

 

c.     Does the budget preparation has been done on time (timely basis).

 

6.1.1.4.  Conduct discussions with the Board of Directors and/or members of management in the Company's organizational structure regarding budget variance analysis. 

 

6.1.2.      Conduct discussions with the Board of Directors and/or members of management in the Company's

organizational structure regarding disclosure of information submitted by the Company to the capital market authorities, investors and the public in accordance with the following conditions: 

 

6.1.2.1.  Decision of the Chairman of Bapepam No. KEP-86/PM/1996 dated January 24, 1996 regarding Rules of Bapepam No. X.K.1 about "The Disclosure Statement should be immediately announced to the public"

 

6.1.2.2.  JSX Board of Directors Decision No.Kep-306/BEJ/07-2004 dated July 19, 2004 about "Rules of the I-E “Information Delivery Obligation" which regulates grain II "General Provisions Reporting and Disclosure " 

6.2.  Risk Management and Internal Control Systems 

 

6.2.1.     Internal Audit Division requested to review the implementation of risk management and internal control system and its effectiveness, would it have been sufficient to

 

6.2.1.1.    Provide data and/or reliable information. 

 

6.2.1.2.    Improve the effectiveness and efficiency of operations in each line. 

 

6.2.1.3.    Protecting assets and data/records (both hard copy and soft copy). 

 

6.2.1.4.    Encourage management and all employees to comply and implement codes of conduct. 

 

6.2.1.5.    Encourage the Company to comply with the law, the laws and regulations established by the Capital

Market Authority, the Tax Authority and the Government bodies other. 

 

6.2.2.     Reporting to the Board of Commissioners of the various risks faced by the Company and implementation of risk management by the Board of Directors. 

6.3.  Audit 

6.3.1.     External Audit 

 

6.3.1.1.   Provide feedback to the Board of Commissioners regarding the appointment of a public accountant and his professional fee. 

 

Material for considerations:

a.     Public Accounting Firm, which has a good reputation and accountable. 

 

b.     Registered KAP and recognized by the Bapepam-LK and the authority which the securities of the Company Stock registered. 

 

c.     Decision of the Chairman of Bapepam No. KEP-20/PM/2002 dated November 12, 2002 regarding Rules of Bapepam No.VIII.A.2 about the independence of the Accountant in the Audit Services Provide Capital Market. 

 

d.     Possible conflict of interest between KAP with consultants.

 

6.3.1.2.    Assessing the performance, independence and objectivity Public Accountant. 

 

6.3.1.3.  Assessing the adequacy of tests done by a public accountant to ensure all critical risks have been considered. Procedures of test refer to standard operating procedures Audit Committee. 

 

6.3.1.4.   Communicate with a public accountant with reference to Standard Auditing (SA 380) regarding

"Communication with Audit Committee" of the "Professional Standards for Public Accountants" issued by the Indonesian Institute of Accountants (IAI). Form of communication and the points shall be communicated in the SOP of Audit Committee. 

 

6.3.2.      Internal Audit

 

6.3.2.1.    Conduct a review of the implementation of the inspection by the Internal Audit Division. 

 

6.3.2.2.   Assessing the performance and independence of the Internal Audit Division. Procedures of review refer to standard operating procedures the Audit Committee. 

 

6.3.2.3.    Communicate with the Internal Audit Division. 

 

6.3.2.4.  Conduct discussions with the Board of Directors and/or members of management in the Company's organizational structure regarding the audit process and the relation with the internal control structure, accounting policies applied, and the policy of the Company. 

 

6.3.2.5.  Internal Audit Division assigned as supervisors and observers to supervise the implementation of the recommendations given either by the external auditors and the Internal Auditor, which is implemented by each auditee under the coordination and responsibility of the Board of Directors and Chairman of the relevant Division. 

 

6.3.2.6.    Review and revise the Internal Audit Charter every year or, if necessary.

 

6.4.  Good Corporate Governance 

 

6.4.1.     Assessing the level of the Company's adherence to laws and/or regulations of the company (company law/other government regulations and corporate articles of association), capital markets and taxation and legislation relating to other Company activities and codes of conduct and standard operating procedures within the framework implementation of good corporate governance by the Company. 

 

6.4.2.   To examine the allegation of error in the decision the Board of Directors meeting or irregularities in the implementation of the outcome of the Board of Directors meeting. 

The Audit Committee may appoint an independent party to conduct the examination at the expense of the Company. 

 

6.4.3.   Conduct a review and report to the Board of Commissioners for the complaint/reprimand relating to the Company. 

 

 

7.      WORKING MECHANISM 

7.1.   Meetings

 

7.1.1.      Audit Committee Meetings 

 

7.1.1.1.   Held in two months basis after the Board of Commissioners Meetings with the Audit Committee, the first week of every two months. 

 

7.1.1.2.    Any time if deemed necessary. 

 

7.1.2.      Audit Committee meetings with the Board of Commissioners 

7.1.2.1.    Held at least 1 (one) time in 6 (six) months. 

 

7.1.2.2.    Any time if deemed necessary.

 

7.1.3.      Audit Committee meetings with the Board of Directors and/or management related. 

 

7.1.3.1.    Any time if deemed necessary by the other members of management. 

 

7.1.4.      Audit Committee meetings with the Internal Auditor 

 

7.1.4.1.    In terms of regular, held once a month. 

 

7.1.4.2.    In the case of exchange of opinion, can be held twice a month. 

 

7.1.4.3.    From time to time when discussing audit findings with the auditee. 

 

7.1.5.      Audit Committee meetings with the external auditor 

 

7.1.5.1.    Before the audit process begins. 

 

7.1.5.2.    In the midst of the audit process in progress. 

 

7.1.5.3.    After the audit process is completed (closing meeting). 

 

7.1.6.      Audit Committee meeting can take decisions if at least attended by 2/3 (two thirds) of the total membership. 

 

7.1.7.    The decision is considered valid if approved by more than 1/2 (one half) of the Audit Committee members in attendance. 

 

7.1.8.     Meeting chaired by the Chairman of the Audit Committee or a member of the Audit Committee's most senior if the Chairman of the Audit Committee was unable to attend. 

 

7.1.9.     Each meeting of the Audit Committee stated in the minutes signed by all members of the Audit Committee were present. 

 

7.2.  Reporting

 

7.2.1.      General Provisions 

 

7.2.1.1.   The Audit Committee should submit reports to the Board of Commissioners review no later than 2 (two) working days after the completion of the study report. 

 

7.2.1.2. Based on these studies report, the Board of Commissioners should make recommendations on improvements or suggestions, and submit it to the Board of Directors no later than 7 (seven) days after the Board of Commissioners accept the report of the study by submitting the report the study results. 

 

7.2.1.3.   The report studies or recommendations, or advice of a material should be submitted to the authority of the Securities Exchange where the Company is registered, and are available at the offices of the Company to be read by the Shareholders no later than 7 (seven) working days after the Board of Directors receives recommendations or suggestions of improvement of the Board of Commissioners.

 

7.2.2.     Periodic Audit Committee Report 

 

7.2.2.1.  The Audit Committee should submit reports of Audit Committee to the Board of Commissioners periodically once every three months.

 

7.2.2.2.    The Audit Committee prepares the Audit Committee Annual Report which also include the following: 

 

a.     Violations committed by the Company to all the provisions of applicable legislation (if any). 

 

b.   Mistakes / errors in the preparation of financial statements, internal control and the independence of auditors, both external and internal auditors (if any). 

 

c.     Review the implementation of a total compensation package Remuneration of the Board of Directors and the Board of Commissioners. 

 

7.2.2.3.  The Audit Committee should prepare an Audit Committee report that became part of the Company's Annual Report. 

 

7.2.3.      Non-Periodic Audit Committee Report

 

7.2.3.1.   The Audit Committee shall submit Audit Committee report to the Board of Commissioners in particular based on a special assignment given by the Board of Commissioners, or any other special things considered important by the Audit Committee. 

 

 

8.      SELF ASSESSMENT 

8.1.  The Audit Committee should conduct self-assessment once every year or other periodic if necessary. 

 

8.2.  The things that can be used as a benchmark in conducting self-assessment is as follows: 

 

8.2.1.      Assessing the completeness of the Audit Committee Charter annually. 

 

8.2.2.    Assess whether the Audit Committee has been carrying out duties and responsibilities covered in the Audit Committee Charter. 

 

8.2.3.     Assess whether the Audit Committee has performed its task in accordance with the mechanism, which includes meetings and reporting, as covered in the Audit Committee Charter.