The Audit Committee was established by the Board of Commissioners to provide assistance in their oversight of the Board of Directors and the Board of Management, and to provide assurance on the application of good corporate governance principles.
a. Legal Basis for Establishment
The establishment and composition of the Company’s Audit Committee is compliant with the provisions of OJK rule No. 55/POJK.04/2015 dated 23 December 2015 concerning the Establishment and Work Guidelines of Audit Committees, and Jakarta Stock Exchange Regulation No. Kep-305/BEJ/07-2004 dated 19 July 2004, as well as the Board of Commissioners’ decision stated in Circular No. 02/Dekom-MDS/X/2015 dated October 19, 2015.
b. Structure and Membership
The current composition of the Audit Committee is as follows:
Ketua : John Bellis (presiden Komisaris - Independen)
Anggota : DR. Isnandar Rachmat Ali
Anggota : Farid Harianto
The members and chairman of the Audit Committee are independent and have no financial connection to the Company other than the remuneration they receive for undertaking their duties as members of the Audit Committee and the Board of Commissioners. Moreover, they do not have any family or business ties with any member of the Board of Commissioners or Board of Directors, or any majority shareholder. The general and specific duties of the Audit Committee are described in the Audit Committee Charter, which can be found on the Company’s website, www.matahari.co.id.
c. Duties and Responsibilities
As stated in the Audit Committee Charter dated 21 December 2009, the principal duties of the Audit Committee are to assist the Board of Commissioners by reviewing, among other matters:
1. The Company’s financial results and other related financial information;
2. The Company’s compliance with the relevant regulations;
3. The effectiveness of the Company’s internal controls and activities; and
4. The Company’s ability to manage risks and handle customer complaints. In addition, the Audit Committee monitors the Company’s overall performance and reports its findings regularly to the Board of Commissioners.
This routine monitoring includes:
• Reviewing the work of the external auditors, assessing their independence and objectivity as well the adequacy of their external audit;
• Reviewing the company’s risk management activities;
• Reviewing critical internal control systems;
• Reviewing areas with high risk of abuse of authority or fraud;
• Assessing opportunities to increase cost efficiencies and/or profitability;
• Assessing operational, financial, and information technology aspects of the business;
• Reviewing the Company’s compliance with the rules of the financial services authority and other laws and regulations;
• Examining decisions made at Board of Directors’ meetings, and their execution.
In order to perform its tasks effectively, the Audit Committee has full access to all financial reports, internal audit findings and minutes from Board of Directors’ meetings. Whenever necessary, the Audit Committee holds intensive discussions with Management, as well as with the Internal and External Auditors.
d. Meeting Frequency and Attendance
The Audit Committee met four times in 2016, with an attendance rate of 83%.
e. Audit Committee Statement on the Effectiveness of Internal Control System
The system of internal control implemented by the Company is deemed to work effectively and adequately, as reflected by the effectiveness of the internal control functions, including the internal audit function, risk management, compliance, and financial and operational controls, among others.
f. Audit Committee Report
In compliance with the regulation as stipulated in the Bapepam-LK’s regulation No. IX.I.5, Chairman of Bapepam’s Decree No. Kep-29/PM/2004 jo Kep-643/BL/2012 jo. Financial Services Authority’s Regulation No.55/POJK.04/2015 dated 29 December 2015 regarding Establishment And Guidelines Implementation of The Audit Committee’s Performance, and the Indonesia Stock Exchange Regulation No. I-A regarding the Registration of Shares and Equity-like Securities Issued by Listed Companies dated 20 January 2014, we as the Audit Committee of the Company has performed the following:
1. Review of the Company’s Financial Statements and other financial information for one year period ended at December 31, 2016
2. Review of the independency and objectivity of the External Auditor.
3. Review of the adequacy of the examination conducted by the External Auditor to ensure that all of the Company’s critical risks have been covered and adequately addressed, to include:
a. Areas where the internal control system is critical;
b. Potential areas to increase profitability and cost efficiency;
c. Areas with high risk of authority abuse;
d. Areas sensitive to misconduct; and
e. Operational, financial, and information technology aspects.
4. Evaluation of the appointment of the External Auditor recommended by the Board of Directors.
5. Review of the effectiveness of the Company’s internal control.
6. Review of the Company’s compliance with the capital market and other laws relevant to its activities.
In the performance of the above-mentioned reviews, as well as the examination of the Company’s financial report, the Internal
Auditors’ findings, the Audit Committee has examined the Company’s accounting policies and procedures, tested the effectiveness
of its internal control and conducted intensive discussions with the Management, Internal and the External Auditors.
In the fulfillment of its responsibility to disclose its examination results to the Company’s Annual Report, the Audit Committee
herewith reports that:
a. The Company’s business activities have been conducted under an effective internal control, whose quality has been continually
improved in accordance with the policies set by the Board of Directors under the supervision of the Board of Commissioners.
b. The financial statements have been properly prepared and presented in accordance with generally accepted accounting principles
c. The Company has complied with the capital market and other regulations relevant to its activities.
d. The appointment of the External Auditors for 2016 has been recommended by the Board of Directors on the basis of their
competence and independency, and approved by the Board of Commissioners mandated by the shareholders at the General
Shareholders’ Meeting held on May 26, 2016.
e. No potential for the abuse of authority or misconduct have been identified which need the attention and the consideration of
the Company’s Board of Commissioners.
f. No non-compliance with Shareholders’ resolution guiding the amount and payment of total annual remuneration to the BOC.
g. Audit Committee's Profile
DR. Isnandar Rachmat Ali
Appointed as Audit Committee member in 2014. He is presently the Independent Commissioner of PT Lippo Sekuritas, and lecturer of several universities in Indonesia. He is also an Expert Council of Indonesian Independence Supporters Association and Advisory of Mandarin Language Teachers Association in Jakarta. Since 1978, he has held many director and commissioner positions in various companies, which includes PT Hilex Indonesia, PT Bank Bhumy Bahari, dan PT Tokai Lippo Bank. He holds a Bachelor degree from Universitas Krisnadwipayana, Master degree from Universitas Krisnadwipayana and Overseas Training Center which cooperate with Fullerton State University, Fullerton, California, USA, and Doctorate degree from Universitas Negeri Jakarta.
Appointed as Audit Committee member in 2015. At present He is an Independent Commissioner in several leading companies, which are PT Sepatu BATA Tbk, PT Lippo Karawaci Tbk, PT Unggul Indah Cahaya Tbk, PT Siloam Hospitals Internationals Tbk, dan PT Toba Bara Sejahtera Tbk. He is also a member of Risk Oversight Committee at PT Bank International Indonesia Tbk. Previously, Mr. Harianto was in many strategic positions, such as Special Staff for the Vice President of Indonesia (2009-2014); Advisor for the Governor of Central Bank ofIndonesia (2008-2013); Vice Chairman of Indonesian Bank Restructuring Agency (BPPN) (1998-2000); Commissioner of PT Penjamin Efek Indonesia (KPEI) (1998-2006); as a Visiting Professor at CIS – University of Toronto (1993-1995); Senior Researcher in the University Administration Center, Faculty of Economics of University of Indonesia (1990-1993); and Director in the Graduate Program of PPM Institute. He received his Bachelor degree majoring in Engineering from Institut Teknologi Bandung and his Master degree as well as Ph.D from Wharton University of Pennsylvania, United States of America.
John Bellis’ profiles are as forth as in the Board of Comissioner’s profile segment.