Governance

Internal Audit is an activity providing assurance and independent and objective consultation with the purpose to increase value and to improve the Company’s operations through a systematic approach by evaluating and improving the effectiveness of risk management, internal control, and corporate governance process in the Company.

Legal Basis

1. Law No. 40/2007 on Limited Liability Company;
2. Law No. 8/1995 on Capital Market;
3. Financial Services Authority Regulation No. 56/POJK.04/2015 dated 29 December 2015 on Establishment and Guidelines to Prepare Internal Audit Unit Charter.

Internal Audit Charter
Indocement’s Internal Audit Charter was updated and established on May 10, 2016 Indocement’s Internal Audit Charter, among others, regulates:

1. Roles and structure of Internal Audit Division;
2. Requirements for internal auditors;
3. Objectives, duties, responsibilities, and authority of Internal Audit Division;
4. Relationship with external auditors;
5. Accountability, independence, and professional standards for Internal Audit Division;
6. Guidelines and code of ethics of Internal Audit Division.

Party Appointing and Dismissing The Internal Audit Unit Head
The Internal Audit Division is part of the Company’s organizational structure which is directly under the President Director. The Internal Audit Division Manager is appointed and dismissed based on the Board of Directors’ decision, which shall be approved by the Board of Commissioners.

Internal Audit Position in the Organization

Profile of Internal Audit Head

Auditor's Code of Ethics

1. Integrity
2. Objectivity
3. Confidentiality
4. Competence

Internal Audit Division's Duties and Responsibilities
Internal Audit Division evaluates the control process, risk, and system in the Company and its subsidiaries. This division also performs audit function on the Company’s operations. The Internal Audit Division effectively assists members of the management in performing their duties and responsibilities, such as:

1. Effectively assisting all members of the management in performing their responsibilities by:
   a. Providing an objective analysis and assessment on activities;
   b. Identifying various operations and good practices for sharing;
   c. Identifying weakness/disadvantage of system design;
   d. Reviewing the eff mitigation initiatives;
   e. Reviewing the effectiveness of GCG implementation;
2. Assessing the design, effectiveness, and implementation of administrative, financial, operating, and security controls as well as the reliability and integrity of the related data that is developed and reported by the Company;
3. Evaluating the adequacy of compliance with plans, policies and procedures and the Company’s compliance with the applicable laws and regulations;
4. Ensuring the adequacy of controls to safeguard Company assets and, if deemed appropriate, verifying the existence of assets;
5. Performing special audits assigned directly by the management of the Company, Board of Directors, or Audit Committee;
6. Conducting an assessment of the economical and efficient use of the Company’s resources and providing appropriate recommendations to the management.
7. Internal Audit provides assurance, as well as independent and objective consultations, to generate added value and improve operational activities. The Internal Audit Division supports the purposes and objectives of the Company through a systematic, orderly, and structured approach in evaluating and increasing the effectiveness of risk management, internal control, and governance process.

Total Personel, Qualifications, and Certifications of Officers in Internal Audit Division
To strengthen the Risk-Based Audit on the Company’s technical operations, the qualifications of Internal Audit employees consist of Bachelor of Economics and Bachelor of Engineering. The qualifications held by the Internal Audit Division employees until the end of 2022 are presented in the followings.

Audit Division's Work Program and Its Realization

Findings and Follows Up
There were 134 internal audit findings with 151 action plans, and 49 action plans have been implemented.

Internal Audit Division's Competency Development Program