Internal Audit

The Company’s Internal Audit Unit (IAU), which reports to the President Director, provides an independent assessment of the effectiveness of the Company’s internal control and risk management systems and execution. The IAU also provides assurance on the overall quality of the Company’s corporate governance practices. The IAU conducts regular audits all aspects of the organisation, focusing on processes and functions that have a higher risk rating due to potential adverse impact on the interests of the Company and its stakeholders.

Internal Audit Charter

The Company complies with OJK Regulation No. 56/ POJK.04/2015 on the Establishment and Guidelines for the Internal Audit Charter dated August 13, 2015 by having an Internal Audit Charter that specifies the responsibilities of the Internal Audit. The Charter, which is available on the Matahari website at www.matahari.co.id, is periodically reviewed and updated.

Internal Audit Structure

The Head of the IAU and the IA team are structurally independent of all the Company’s business units. The present head of the IAU is Maju Tarigan, who was appointed on May 1, 2013. He leads a team of seven corporate auditors, four of whom have undergone training for their auditor certification.The Head of the IAU is selected and dismissed by the President Director, pursuant to a Circular Letter regarding the Appointment of the IAU Head, which must be approved by the Board of Commissioners.

Duties and Responsibilities

The primary responsibilities of the IAU include:
1. Preparing and implementing the annual Internal Audit Plan;
2. Evaluating the implementation of the internal control and risk management systems, recommending
     areas for improvement and monitoring the effectiveness of related follow-up actions;
3. Evaluating the efficiency and effectiveness of the Company’s performance in key areas, including finance,
     accounting, operation, human resources, marketing and information technology;
4. Conducting special audits and/or investigations as required;
5. Preparing reports on the audit findings for the President Director, the Board of Commissioners and the
     Audit Committee;
6. Giving recommendations for improvement and providing objective information about the activities under
     review at all management levels;
7. Monitoring, analysing and reporting the execution of follow-up actions on recommended improvements;
8. Cooperating with the Audit Committee;
9. Designing programs for quality assessment activities conducted by the Internal Audit Unit.