AUDIT COMMITTEE

The Audit Committee supports the Board of Commissioners by providing advice and assurance on the implementation and effectiveness of good corporate governance. This includes reviewing the integrity of the Company’s financial disclosures, providing oversight over internal control, risk management and the external audits, and monitoring compliance with relevant laws, regulations and policies.  

Audit Committee Members

In accordance with OJK Regulation No. 55/POJK.04/2015 dated 23 December 2015 concerning the Establishment and Working Guidelines of Audit Committees, as well as the Company’s Audit Committee Charter, the Audit Committee consists of at least three members, including at least one Independent Commissioner of the Company who acts as Committee Chairman, and other external parties who are not related to the Company in any way.

 As of 31 December 2018,  the composition of the Audit Committee was as follows:

Nama/Name

Posisi/Position

Legal Basis of Appointment

Period

John Bellis

Ketua/Chairman

(President Commissioner- Independent)

BoC Decision No. 006/Dekom-MDS/7/2018 dated 12 July 2018

2018-2019

Farid Harianto

Anggota/Member (Independent)

BoC Decision No. 006/Dekom-MDS/7/2018 dated 12 July 2018

2018-2019

Karnadi Nawawi

Anggota/Member  (Independent)

BoC Decision No. 006/Dekom-MDS/7/2018 dated 12 July 2018

2018-2019

William Travis Saucer

Penasehat/Advisor

BoC Decision No. 006/Dekom-MDS/7/2018 dated 12 July 2018

2018-2019

 John Bellis

Audit Committee Chairman

John Bellis’ profiles are as forth as in the Board of Comissioner’s profile segment

Farid Harianto

Audit Committee Member

Indonesian citizen, 66 years old, domiciled in Jakarta.

 First appointed as an Audit Committee member in 2015. He graduated from the Bandung Institute of Technology with a Bachelor degree Engineering and from the Wharton School, University of Pennsylvania, USA with Master’s and PhD degrees.

 He is currently an Independent Commissioner of PT Sepatu BATA Tbk (Plc), PT Unggul Indah Cahaya Tbk (Plc) and PT Toba Bara Sejahtera Tbk (Plc), and is a member of the Risk Oversight Committee at PT Bank International Indonesia Tbk. He has  served in several strategic roles, including as a member of the Staff of the Vice President of Indonesia (2009-2014), Advisor to the Governor of Bank Indonesia (2008-2013), and Vice Chairman of the Indonesian Bank Restructuring Agency (IBRA/BPPN) (1998-2000). 

Karnadi Nawawi

Audit Committee Member

Indonesian citizen, 58 years old, domiciled in Jakarta.

First appointed as an Audit Committee member in 2018. He graduated from the National Institute of Science and Technology (ISTN) in 1987 with a Bachelor degree Electrical Engineering. 

He is currently a Commissioner of PT Aquanur Powerindo (2000-present) and a Director of PT Aba Sarana Lestari (1999-present), and served previously as a Commissioner of PT Mandiri Tegar Adiguna (2009-2016) and a Director of PT Aba (1995-1999). Prior to that, he worked at PT Aquanur (1993-1995), PT Asaba Computer Center (1990-1992) and PT Asaba (1988-1990).

 William Travis Saucer

Advisor

William Travis Saucer’s profiles are as forth as in the Board of Comissioner’s profile segment

 Independence of the Audit Committee Members

All the members and the chairman of the Audit Committee are independent parties whose appointment is based on their capacity, educational qualifications and professional background. They have no family or business affiliation with any member of the Board of Commissioners or Board of Directors, or any major shareholder, and no financial connection to the Company other than the compensation they receive for carrying out their duties as members of the Audit Committee and (in the case of the Chairman) the Board of Commissioners. These specifications comply with the provisions of OJK Regulation No. 55/POJK.04/2015 on the Establishment and Working Guidelines of Audit Committees and the Company’s Audit Committee Charter.

 Audit Committee Charter

Matahari’s Audit Committee Charter was adopted on 25 July 2013. The Charter outlines the general and specific duties of the Audit Committee, covering the following areas:

  1. Structure of the Audit Committee;
  2. Qualifications for Audit Committee Membership;
  3. Duties and Responsibilities;
  4. Authority and Objectives;
  5. Audit Committee Meetings;
  6. Reporting;
  7. Term of Office.

The Audit Committee Charter can be found on our website at http://www.matahari.co.id/en/charters/audit-committee-charter/183.

Audit Committee Duties and Responsibilities

The Audit Committee serves the following purpose:

  1. To ensure the Company’s compliance with the prevailing laws, regulations and corporate policies and procedures;
  2. To enhance the efficiency and effectiveness of the implementation of corporate policies and procedures and of the protection of the Company’s assets;
  3. To ensure reliable and accurate financial statements as a tool to measure the achievement of corporate goals.

In order to fulfil this purpose, the principal duties of the Audit Committee, as specified in the Audit Committee Charter, are as follows:

  1. To give opinions to the BoC on reports or information provided by the BoD to the BoC.
  2. To identify matters than need the BoC’s attention.
  3. To carry out other respective duties of the BoC, covering among others:
    1. To review financial information to be released by the Company, such as financial statements, projections, and other related reports regarding financial information.
    2. To thoroughly check and verify the Company’s compliance with capital market laws and regulations and other laws and regulations relevant to the Company’s activities.
    3. To provide an independent opinion when the dissenting opinion occurs between the management and accountant for the service rendered.
    4. To give recommendations to the BoC regarding the appointment of the External Auditor based on independence, scope of work and fee.
    5. To thoroughly check and verify the implementation of examinations carried out by the Internal Auditors and the implementation of follow-up by the Company’s BoD in relation to the Internal Auditor’s findings.
    6. To review and report to the BoC the various risks faced by the Company and the implementation of risk management activities by the BoD, if the Company does not have a risk review function under the Commissioners.
    7. To review any decision that relates to accounting processes and financial reporting.
    8. To review and give advice to the BoC in relation to the potential of conflict of interest.
    9. To investigate any indications of a mistake in the resolution of the BoD meetings or any irregularity in implementing the resolutions of the BoD meetings. Such investigation can be conducted by the Audit Committee or independent party appointed by the Audit Committee on the Company’s expense.
    10. To check and report to the BoC complaints related to the Company.
    11. To report the implementation of risk management and the potential risks faced by the Company.
    12. To safeguard the confidentiality of the Company’s confidential documents, data and information.

 Audit Committee Authority

To be able to execute these tasks effectively, the Audit Committee is authorised to access to all financial reports, internal audit findings and minutes from Board of Directors’ meetings, as well as information and records on the Company’s staff, funds, assets and other resources. The Audit Committee is also authorised to communicate directly and indirectly with Management, the Company’s staff, the Internal Audit Unit and the External Auditor, as necessary.

 Meeting Frequency and Attendance

The Audit Committee Charter states that the committee should meet 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. This policy on meetings complies with OJK Regulation No. 55/POJK.04/2015.

 The Audit Committee met 5 times in 2018, with an attendance rate of 96%.

Audit Committee Statement on the Effectiveness of the Internal Control System

Throughout 2018 the Company’s internal control system was considered to be adequate and  effective. This assessment was based on the effective operation of the Company’s internal control functions, including but not limited to the internal audit function, the risk management function, compliance, and financial and operational controls. 

Audit Committee Report for 2018

 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, 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 and Financial Services Authority’s Regulation No. 13/POJK.03/2017 dated 27 March 2017 regarding The Application of Public Accountant Services and Public Accountant Firm in Financial Services Activities, 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, 2018.
  1. Review of the independency and objectivity of the External Auditor.
  2. 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:
    1. Areas where the internal control system is critical;
    2. Potential areas to increase profitability and cost efficiency;
    3. Areas with high risk of authority abuse;
    4. Areas sensitive to misconduct; and
    5. Operational, financial, and information technology aspects.
  3. Evaluation of the appointment of the External Auditor recommended by the Audit Committee and jointly approved by the Board of Directors and Board of Commissioners.
  4. Review of the effectiveness of the Company’s internal control.
  5. 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:

  1. 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.
  2. The financial statements have been properly prepared and presented in accordance with generally accepted accounting principles in Indonesia.
  3. The Company has complied with the capital market and other regulations relevant to its activities.
  4. The appointment of the External Auditors for 2018 has been recommended by the Audit Committee on the basis of their competence and independency, and jointly approved by the Board of Directors and the Board of Commissioners mandated by the shareholders at the General Shareholders’ Meeting held on April 27, 2018.
  5. 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.
  6. No non-compliance with Shareholders’ resolution guiding the amount and payment of total annual remuneration to the BOC.

 Tangerang, February 26, 2019

Audit Committee of PT Matahari Department Store Tbk