The Audit Committee has performed its roles and responsibilities in accordance with the mandate given by the Board of Commissioners, as well as the Audit Committee Charter.
For the full Audit Committee Charter, please click here.
The company’s Audit Committee was established in 2009 to assist the Board of Commissioners in carrying out their supervision duties to ensure proper management of the company under Good Corporate Governance principles. The company’s Audit Committee consists of three members: one independent commissioner, acting as the chairman, and two expert non-employees.
The current members of the Audit Committee are:
- Chairman: Dr. Ir. Raden Pardede. He was appointed as the Chairman of AE’s Audit Committee based on the Board of Commissioners’ Decision dated 23rd April 2018. For further information, please see the Board of Commissioners' profile.
- Member: Lindawati Gani, 56, an Indonesian citizen, is a member of Audit Committee of PT Adaro Energy Tbk, and was appointed as a member of AE’s Audit Committee based on the Board of Commissioners’ Decision dated 14th May 2018. She is a Professor of Faculty of Economics and Business University of Indonesia and a National Council Member of Institute of Indonesia Chartered Accountants (IAI).
She is also a member of the Audit Committee in public companies, among others, PT Astra International Tbk, PT Astra Graphia Tbk. Currently she also serves as an Independent Commissioner of PT Hero Supermarket Tbk. She earned Bachelor of Economics majoring in Accounting University of Airlangga in 1985, Master of Business Administration (MBA) majoring in General and Strategic Management, Institute of Management Development Indonesia (IPMI) in affiliated with Harvard Business School (Boston-USA) in 1986, and Master in Management majoring in Management Accounting in 1994 from University of Indonesia. She received her Doctor of Philosophy (PhD) in 2002 from University of Indonesia.
- Member: Ignatius Robby Sani, 62 years old, an Indonesian citizen, is a member of the Audit Committee of PT Adaro Energy Tbk, and was appointed as a member of AE’s Audit Committee based on the Board of Commissioners’ Decision dated 23rd April 2018. He has more than 30 years of professional experience. Prior to becoming a member of the Audit Committee of PT Adaro Energy Tbk, he served as Director of PT Adaro Power and Commissioner at PT Makmur Sejahtera Wisesa since 2015, and he has also served as Commissioner of PT Bhimasena Power Indonesia since 2016, by which those positions ended before appointed as a member of the Audit Committee of PT Adaro Energy Tbk.
He started his career at the Department of Credit and International at Bank Indonesia in 1981-1989. In 1990-1993 he served as a legal consultant at the law firm of Kartini Mulyadi & Liene Gunawan. Thereafter he started his career in Astra Group in 1994-2015 as Chief of Legal, Director, President Director and Board of Commissioners. He also served as Director of Bank Permata Tbk in 2006 – 2008, and Audit Committee of PT Acset Indonusa Tbk in 2015.
Nomination and Remuneration
The BoC decided that nomination and remuneration functions for the BoC and BoD will be carried out directly by the BoC, without the formation of a nomination and remuneration committee.
In regard to the implementation, the BoC acts independently by referring to the Guideline of Nomination and Remuneration Function, which specifies the BoC’s relevant duties and responsibilities:
- Establish policies regarding: the composition of the BoC and BoD; the criteria required in the nomination process; and performance evaluation of BoC and BoD members;
- Assess the performance of the BoC and BoD members based on the policy;
- Establish policies regarding the BoC and BoD development programs; and
- Determine candidates for membership of the BoC and BoD to be submitted to GMS.
- Establish policies regarding the structure of the remuneration process and amounts; and
- Assess BoC and BoD members’ performance with reference to remuneration received.
The structure, policy and value of the remuneration of the BoC and BoD shall consider the following:
- Remuneration applied within the companies in the same industry and business size;
- The duties, responsibilities and authority of the BoC and BoD related to the achievement of the company’s goals and performance;
- Performance target of each member of BoC and BoD; and
- The balance between fixed and variable allowances.
During 2017, discussions regarding nomination and remuneration were held once every four months and included in BoC meetings.
In 2017, total remuneration of the BoC and BoD of AE and its consolidated subsidiaries was US$22.8 million, a 9% increase from US$21 million in 2016.
For the full Guideline of Nomination and Remuneration Function, please click here.
SUPPORTING ORGAN OF THE BOARD OF DIRECTORS
As stipulated in the OJK regulation number 35/ POJK.04/2014, a public company is required to have a corporate secretary function which has access to all material information of the company in relation to the principle of information disclosure and transparency, and occupies a strategic role to ensure that the company is in full compliance with capital market rules and regulations.
The Corporate Secretary is directly responsible to a BoD and is appointed and dismissed based on a BoD decree. The Corporate Secretary must have a thorough knowledge of capital market rules and regulations, an ability to maintain confidentiality and other relevant competencies, especially with regard to information disclosure.
The company’s corporate secretary position is currently held by Mr. Mahardika Putranto. He was appointed Corporate Secretary based on the BoD Decree dated September 1st, 2014 and underwent a Corporate Secretary training program in February 2015.
He earned a bachelor’s degree in commerce from the University of New England, and a master’s degree in economics and finance from Macquarie University, both in Australia.
Mahardika built his early career at several Indonesian securities companies predominantly in areas of equity research and investment banking. In 2005, he joined the investor relations team at PT Apexindo Pratama Duta Tbk, and became the Head of Corporate Finance in 2008 managing both corporate finance and investor relations activities as well as directly involved in Corporate Secretary exercises.
The Corporate secretary activities in 2017 included:
- Presented regular reports and information disclosures to the OJK and IDX in compliance with capital market rules and regulations;
- Supported the BoD in conducting AGMS 2017 and 2017 Annual Public Expose;
- Oversaw the company’s shareholders registration and reported the adjustments to the BoD and regulators;
- Provided updates to the BoC and BoD on AE’s shares and other capital market matters;
- Together with the Internal Audit Division, promoted GCG implementation in AE and identified governance risks, including risks to company reputation or image;
The Investor Relations Department acts as the main liaison between the company and the capital market. AE belives that ongoing dialogue with all stakeholders based on fact and transparancy will create maximum shareholder value.
The Investor Relations and Corporate Secretary function is under one division and is headed by Mr. Mahardika Putranto. Although directly responsible to the Chief Financial Officer, he communicates with all members of the BoD and different parts of the company in regards to the company’s operation, financial, projects, corporate actions, and other aspects. The BoD and the rest of the company are supportive of the Investor Relations activities, as evidenced in their participation in conferences and meetings in 2016.
Together with the Corporate Communication Division, The Investor Relations Department maintains active interaction and close relationships with capital markets participants including institutional investors, potential investors, analysts, and the media.
The measure to communicate the company’s information is manifested through several regular activities, such as the quarterly press releases, investor presentations, the public exposes, and the regular analyst and investor meetings. As of the end of 2017, AE was covered by 30 analysts who issued reports on AE’s operational and financial analyses, as well as on the coal market as a whole. The Investor Relations’ team attended 15 conferences and 4 non-deal international and domestic roadshows, with a total of 239 meetings attended during the year.
The Internal Audit Function has carried out its duties in accordance with the Internal Audit Charter. The Board of Directors has given its full support to the internal audit activities and there were no restrictions on the scope and access for the Internal Audit Function. As the third line of defense in risk management, the Internal Audit Function’s role is to provide an objective and independent assurance and consultancy services for PT Adaro Energy Tbk and its subsidiaries in the areas of governance, risk management and control.
For the full Internal Audit Charter, please click here.
The Internal Audit Function directly reports to the President Director, who has delegated the Internal Audit Charter to the Internal Audit Function as a mandate to perform and execute its duties and responsibilities. The Internal Audit Charter has been approved by the President Director and the Board of Commissioners.
The internal audit team consists of internal auditors with a variety and complementary range of educational backgrounds (such as accounting, information technology and industrial engineering), skills and work experiences.
In 2017, there were 381 audit objects in AE’s audit universe, out of which 30 audit objects were selected to be included in the annual audit plan. A total of 25 audit reports were completed as planned, a decrease from 30 audit reports in 2016, due to the decrease of the number of AE’s internal auditors and the increase of consulting activities. AE’s audit covered 12 of the 33 strategic business units and 18 of 29 risk types.
The function is led by the Chief Audit Executive, Mr. Zayarwan Zain, who reports directly to the President Director. In accordance with the OJK Regulation, his appointment in 2013 has been reported through an official letter to the Financial Services Authority and copied to the Board of Commissioners and Board of Directors of PT Adaro Energy Tbk.
Zayarwan has more than 29 years’ experience; 15 years as an internal audit practitioner and 14 years as a consultant. As an internal auditor, Zayarwan worked at PT International Nickel Indonesia Tbk, PT Bakrie Investindo, and PT London Sumatra Indonesia Tbk.
In addition, as a consultant, he previously served as a Director at PT PricewaterhouseCoopers Advisory Indonesia specialized in providing services in internal audit, risk management, performance improvement and governance.
Zayarwan graduated from the University of Padjadjaran in Bandung, majoring in accounting. He holds international professional certifications including Certified Internal Auditor, Certified Fraud Examiner, and Certified Risk Management Assurance. He is also the governor of the Indonesian professional association of internal audit (IIA Indonesia) for the period of 2014 – 2017.