INTERNAL AUDIT

As a public company, we have established Internal Audit Department which serve as supervisor of company’s internal control. Internal Audit Department is led by Head of Internal Audit, appointed and dismissed by President Director with approval of the Board of Commissioners. Head of Internal Audit is directly responsible to the President Director.

HEAD OF INTERNAL AUDIT PROFILE

Davin Otniel Tjoputro, Indonesian citizen, domiciled in Surabaya, serves as the head of Audit internal of the Company in accordance with the Director’s Decree No. 001/SK.Dir/XII/18 dated December 11^th, 2018, earned a Master of Industrial Engineering from University of Surabaya. He joined the Company as staff audit internal since 2014 and became head of audit internal in year 2018.

DUTIES AND RESPONSIBILITIES

Based on the Audit internal Charter enacted and approved by Board of Commisionners on December 5^th, 2008 and has been revised on June 21^st, 2017, Audit internal has the following duties and responsibilities:

• Periodically provide information on the status and implementation of annual audit plan and the adequacy of resources.
• Testing and evaluating the implementation of internal control and risk management systems in accordance with the Company’s policy.
• Conduct inspection and assessment of the efficiency and effectiveness in finance, accounting, operations, human resources, marketing, information technology and other activities.
• Provide suggestions for improvement and objective information on the activities audited by the Audit internal at all management levels.
• Reporting on the results of audit and submit the report to the President Director.
• Monitor, analyze and report follow up actions on audit recommendation.
• Cooperates with the Audit Committee.
• Perform special audit if neccesary.
• Report significant issues related to the control of the company’s activities, including their improvement on a written report .
• Report the results of an assessment of the adequacy and effectiveness of internal control process and mitigate any exisiting risks.
• Coordinate its activities with auditors external’s activities.

ACCOUNTABILITY

Head of Internal Audit Department must be held accountable for his duties and obligations towards President Director.

INTERNAL AUDIT INDEPENDENCY

Internal Audit Department has no authority or responsibility towards operational of company and holds no operational rights. In order to avoid conflict of interest within the Internal Audit, the Charter of Internal Audit requires Internal Audit members to be independent and not involved or hold positions within company’s operational matters.

INTERNAL AUDIT GROUP ACTIVITIES IN 2018

Risk based audit is carried out based on international standards from Institute of Audit internal (IIA) and the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The primary objective of these audits is to provide management with reasonable assurance that key controls are designed and operating satisfactorily to manage risks within an acceptable level. Audit activities are executed based on systematic mapping of key processes. Surveillance Audit (continuous audit) and audit management systems are used to improve the efficiency and effectiveness of audit.