The Audit Committee was established to assist the BOC in supervising the Company, especially in supporting the BOC in carrying out its functions and duties as well as in complying with Limited Liability Company Law No. 40 Year 2007 Article 121 and Financial Institutions Supervisory Board Decision No. Kep-643/BL/2012 dated December 7, 2012 as amended by POJK No. 55/POJK.04/2015 dated December 23, 2015 regarding the Establishment and Implementation Guidelines of Audit Committee.
The Audit Committee has a strategic role in monitoring the effectiveness of the internal control function and in liaising with Internal Audit and external auditors.
Structure and Membership
Members of the Audit Committee are chosen by the BOC based on the criteria of independency, expertise, experience and integrity, as required in the regulations. BOC Decision dated July 6, 2020 and letter to OJK No.042/VII/2020-CSExt dated July 14, 2020 with a tenure period from the closing of AGMS until the AGMS for Fiscal Year 2021 which will be held in 2022, confirming to the tenure of the BOC, as follows:
- John Bellis - (Chairman/Independent President
Commissioner), 76 years old.
For a brief profile, please refer to Board of Commissioners Profile of this Annual Report. He is also the Independent President Commissioner of the Company and as an Independent President Commissioner PT Matahari Department Store, Tbk. Additionaly, He is also the Chairman of The Company’s Nomination and Remuneration Committee.
- Dennis Villafuerte Valencia - (Independent
Member), 57 years old.
Philipine citizen. He has a Masters Degree in Business Management from the Asian Institute of Management; and, a Bachelors Degree in Business Economics from the University of the Philippines. He has over 36 years of professional experience in several managerial capacities. His career began as a Marketing Research Supervisor with Soriamont Shipping (1984-1986), followed by several years and positions in the property industry with Marina Properties Corp. (1988-1990) and Ayala Land Inc (1990-1994). He first started working in Indonesia in 1994 with PT Lippo Karawaci, followed as a Senior Research Manager with Asia Kapitalindo Securities (1997-2000). After a brief role as an entrepreneur (2000-2005), Mr. Valencia joined Agung Podomoro Group as General Manager (2005-2007) before rejoining PT Lippo Karawaci Tbk as Consultant (2007-present).
- Christine - (Independent Member), 40 years old.
Indonesian citizen. She has a Bachelor of Economics degree majoring in Accounting from Tarumanagara University. Starting her career as a Senior Associate Auditor at Public Accountants Ernest & YoungPrasetio, Sarwoko & Sandjaja (November 2002 - August 2004), Senior Manager Accounting at PT Matahari Putra Prima Tbk (August 2004 - April 2013) and Chief Financial Officer at PT Nadya Putra Investama, a subsidiary of PT Multipolar Tbk (April 2013 - present).
Appointment of Members
Members are appointed for a term that shall not exceed the term of the current BOC. They may be appointed for one further term. All members must fulfill the membership qualifications set out in the Audit Committee Charter.
Audit Committee Independency
In compliance with the provisions of OJK Regulation No. 55/ POJK.04/2015 on the Establishment and Working Guidelines of Audit Committees and as specified in the Audit Committee Charter, the independence of the Audit Committee is defined as not having family relations up to the second degree, business relations or other relations with (other) Commissioners, Directors or the majority shareholders as well as having no shareholdings in the Company. To meet POJK, the Chairman of the Audit Committee is an Independent Commissioner.
Audit Committee Charter
The Audit Committee Charter has been updated and approved by the BOC on July 8, 2020 to amend the Audit Committee Charter issued on August 10, 2018, in compliance with the new Chairman of Capital Market and Financial Institutions Supervisory Board Decision No. Kep-643/BL/2012 dated December 7, 2012 as amended by POJK No. 55/POJK.04/2015 dated December 23, 2015 regarding the Establishment and Implementation Guidelines of Audit Committees.
The Audit Committee Charter covers the following:
- Legal Foundation;
- Qualifications for Membership;
- Duties and Responsibilities;
- Procedure for Change of Membership;
- Salaries and Facilities;
- Work Values.
Audit Committee Duties and Responsibilities
The Audit Committee is fully authorized to carry out its tasks to access records, data and information about employees, funds, assets and other Company resources. The Audit Committee reports to the BOC on its task completion, according to the Audit Committee Charter.
Duties and responsibilities of the Audit Committee are:
- To review financial information to be released by the Company, such as financial statements, projections and other financial information;
- To review the Company’s compliance with relevant Laws and Regulations related to the Company’s activities;
- To provide independent opinion in the event that there are dissenting opinions between management and the Public Accountant for the services provided;
- To provide recommendations to the BOC on the appointment of a Public Accountant based on independence, scope of assignment and audit fee;
- To review the Internal Audit performance and monitor actions taken by the BOD to follow up audit results;
- To report to the BOC the various risks faced by the Company and the implementation of risk management by the BOD;
- To review and report to the BOC on complaints related to the Company;
- To review the risk management performance implemented by the BOD;
- To review any reported disagreements on the accounting process and the Company’s Financial Report;
- To review and provide recommendations to the BOC on potential Company’s conflicts of interest; and
- To safeguard the confidentiality of the Company’s documents, data and information.
Audit Committee Authority
In order to perform its tasks effectively, the Audit Committee has authority to access to all financial reports, internal audit findings and minutes from BOD’s meetings, as well as information and records on the Company’s staff, funds, assets and other resources. Whenever necessary, the Audit Committee may communicate directly and indirectly with Management, the Company’s staff, the Internal Audit Unit and the External Auditor.
Audit Committee Meetings and Actions in 2020
In compliance with OJK Regulation No. 55/ POJK.04/2015 and as specified in the Audit Committee Charter, the committee should conduct a meeting at least once every quarter, and meetings should be attended by more than half the members. Every meeting must be minuted and reported to the BOC.
In 2020, the Audit Committee held 4 meetings, with 100% attendance of its members:
- February 25, 2020
- April 30, 2020
- July 28, 2020
- October 27, 2020
Audit Committee Statement on the Effectiveness of the Internal Control System
The Company’s internal control system was judged to be working effectively and adequately in 2020, as reflected by the effectiveness of the internal control functions, including the internal audit function, the risk management function, compliance, and financial and operational controls, among others.
Competency Development for the Audit Committee
In 2020, there is no Audit Committee member participate in the development program, however the Company encourages each member to participate in any competency development programs.