Governance

Governance

Audit Committee Charter

AUDIT COMMITTEE

Audit Committee was established with the primary objective to assist the Board of Commissioners in carrying out its supervisory responsibilities over the financial reporting process, internal control system, audit process, GCG implementation, and the process of monitoring compliance with the applicable laws and regulations. The Audit Committee is responsible to the Board of Commissioners and performs its functions in accordance with the regulations and instructions received from the Board of Commissioners.

Legal Basis
Indocement’s Audit Committee was established based on:
1. OJK Regulation Number 55/POJK.04/2014 regarding the Establishment and Guidelines for the Audit Committee.
2. PT Bursa Efek Jakarta Decree of Board of Directors Number Kep-0001/BEI/01/2014 dated January 20, 2014 Amendement to Regulation Number I-A regarding the Registration of Shares and Equity Shares Issued by Listed Companies.
3. Decree of Indocement’s Board of Commissioners Number 011/Kpts/Kom/ITP/XII/2001 dated December 6, 2001;
4. Decree of Indocement’s Board of Commissioners Number 002/Kpts/Kom/ITP/V/2017 dated May 22, 2017.

Audit Committee Work Guidelines
The Audit Committee has an Audit Committee Charter, which was lastly revised on December 6, 2013, and was established under the Statement of Decision of Agenda No. 2 of the Board of Commissioners’ Meeting No. 007/Kpts/ Kom/ITP/XII/2013 dated December 6, 2013, on Amendment to Audit Committee Charter in order to meet Bapepam-LK Regulation No. KEP-643/BL/2012 dated December 7, 2012.

The Audit Committee Charter, covers the following:
1. Audit Committee’s Purpose
2. Audit Committee’s Membership
3. Audit Committee’s Chairman
4. Audit Committee’s Term of Service
5. Audit Committee’s Duties and Responsibilities
6. Audit Committee’s Authorities
7. Audit Committee’s Meetings
8. Audit Committee’s Reports

Audit Committee’s Membership
Pursuant to the Committee Audit Charter, concerning Indocement’s Audit Committee membership which consists of:
1. One Chairperson who is an Independent Commissioner and
2. Two members who are independent and have expertise as members.

The Audit Committee is appointed and dismissed by the Board of Commissioners for a period of three years from the appointment, and may be reappointed for one next period. The term of service for the Audit Committee members shall not exceed the term of service of the Board of Commissioners.

The composition of the members of the Indocement Audit Committee as of December 31, 2020 can be seen in the About Us menu >> Management

Audit Committee Members Independence
All members of the Indocement Audit Com ee are independent parties that have no affiliation with the Company, Board of Commissioners, Directors, controlling Shareholders, external auditors and legal counsel of the Company and do not own shares in the Company, directly or indirectly, which can affect their ability to implement assignments and giving opinions, recommendations and suggestions to the Board of Commissioners.

The independence of Indocement’s Audit Committee members are as follows:

Thus, all Audit Committee members’ independence requirements are in accordance with the regulations and the rules of GCG best practices have been met.

Duties and Responsibilities
The Audit Committee provides professional and independent opinions to the Board of Commissioners related to reports and other matters presented by the Board of Directors. Based on the Audit Committee Charter, the Audit Committee’s roles and responsibilities are as follows:

1. To review and discuss with management and the independent auditor concerning the draft annual audited financial statements and quarterly financial statements, and any other financial information to be published.
2. To provide recommendations to the Board of Commissioners on the appointment of the independent auditor, and to examine and control the Company’s accounts and financial statements taking into consideration its independence scope of audit and fee. The Audit Committee Chairperson must pre-approve certain non-audit services provided to the Company by independent auditors, in accordance with OJK rules.
3. To discuss with management and the independent auditor any audit issues and management’s responses, including providing independent opinion in case there are any disagreements between management and the independent auditors.
4. To discuss with management and the independent auditors concerning risk assessments, and risk management practices, and the result of the independent auditors’ assessment on transactions involving conflict of interest transactions and related parties transactions, and to provide recommendations to the Board of Commissioners on known potential conflicts of interest transactions based on the information submitted by the Financial Director, Internal Audit, or independent auditor.
5. To oversee the Company’s internal control system by reviewing the scope of internal audit, and the independent auditors review of internal control, significant findings and recommendations together with management responses.
6. To oversee the Company’s financial reporting activities, including annual report, and accounting standards and principles, significant accounting changes and the key accounting decisions affecting the Company’s financial statements.
7. To review the Internal Audit functions, including:
   a. Purpose, authority and organizational reporting lines;
   b. Annual audit plan, and staffing; and
   c. Audit findings, management responses and follow up.
8. To obtain and review, at least annually, the auditing firm’s independency and any material issues raised by the independent auditors.
9. To review with general counsel matters pertaining to the compliance processes, and programs in general, and the Company’s compliance with relevant laws and regulations.
10. To liaise with the Corporate Secretary and oversee the handling of complaints on accounting and financial reporting processes, as below:
    a. Complaints relating to the Company’s accounting, and questionable accounting, or auditing matters that should be reported to the committee.
    b. The committee shall oversee procedures for the receipt, retention and treatment of complaints on accounting, internal accounting controls, or auditing matters.
11. To maintain confidentiality of the Company’s documents, data and information.

Audit Committee’s Authority
The committee is empowered to review or oversee matters within its scope of responsibility, to access the Company’s documents, data and information, to directly communicate with any Employee, including the Board of Directors, internal auditor, independent auditor and any relevant parties and to advice from external counsel auditors or other experts as necessary.

AUDIT COMMITTEE MEETING

Provisions of Audit Committee Meeting
It is stated in the Audit Committee Charter the regulation regarding member meetings, where the Audit Committee can hold meetings at any time needed or at least once in three months and the meeting must be attended by at least half of the members and decisions taken by deliberation and consensus.

The decisions or minutes of meetings are prepared by the Corporate Secretary, wherein they contain the proceedings and differences of opinions, minutes of the meeting will be signed by the members present to then be submitted to the Board of Commissioners.

Meetings Frequency and Attendance
Throughout 2020, the Audit Committee held meetings four times with attendance rates as follows:

In 2020, the Audit Committee carried out the following activities:

Audit Committee Competency Development Program
In an effort to support the implementation of their duties, members of the Audit Committee participate in various education and training programs in order to develop their competencies.

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