With the establishment of the Audit Committee (“Committee”), it demonstrates PT Indofood Sukses Makmur, Tbk.’s (“Company”) commitment to comply with government and capital market rules and regulations, and to promote the implementation of good corporate governance.
The Audit Committee Charter (“Charter”) defines the mission of the Committee, and intended as a guideline in clarifying its organization, roles and responsibilities, authorities, and practices.
I. THE CHARTER
- The Charter is in compliance with Financial Services Authority (OJK – Otoritas Jasa Keuangan, previously known as Bapepam and LK) regulation number IX.I.5; Kep-643/BL/2012.
- This Charter has been certified by the Chairman of the Audit Committee, the President Commissioner, and the President Director.
- This Charter is effective starting August 1st, 2013.
- This Charter supersedes the previous Charter dated January 1st, 2010.
- The Committee shall review; and if necessary update this Charter accordingly.
II. THE MISSION
The mission of the Committee is to assist the Board of Commissioners (“BOC”) in fulfilling its oversight responsibilities by reviewing the financial report process, external and internal audit process, the system of internal control, risk management, and compliance with applicable government and capital market rules and regulations.
- As indicated on the chart above, the Committee shall be directly accountable to the BOC.
- The Committee shall utilize the work of the external and internal audit.
- The Committee is constituted of at least 3 (three) members; consist of Independent Commissioner(s) and other external independent professional(s).
- The Chairman of the Committee is the Independent Commissioner.
The BOC appoints, re-appoints, and terminates the Committee members.
- The terms of office of the members can not exceed the terms of office of the BOC.
- Members can only be re-appointed to a maximum of 1 (one) more period.
- The following instances justify the termination of the Committee membership, when a member:
- Breaches Indofood Code of Conduct and the Committee Code of Ethics.
- Becomes the subject of an on going investigation involving fraudulence, criminal offense, and/or any financial bankruptcy case.
- Acts inapropriately, either directly or indirectly, that may jeopardize the reputation of the Company.
- Loses his independence, the criteria of which specified in OJK regulation number VIII.A.1; Kep-41/BL/2008.
The members of the Committee should demonstrate the following attributes of independence:
- Are not insiders of Public Accountant Firm, Law Consulting Firm, Public Appraisal Services Firm or other parties that provide assurance services, non-assurance services, appraisal services and/or other consultancy services to the Company within the last 6 (six) months.
- Are not individuals who have authority and responsibility to plan, lead, or control Company’s activities within the last 6 (six) months.
- Do not possess any direct or indirect ownership of the Company’s share.
- In the event the Committee members receive Company’s shares either directly or indirectly as a result of any legal event, they must transfer the shares to other parties no later than 6 (six) months after obtaining them.
- Are not affiliated with the BOC, BOD, majority shareholders, or the Company itself.
- Do not have business relationship with the Company’s business either directly or indirectly.
- Are not owners or employees of businesses that directly compete with the business of the Company or any of its subsidiaries.
The members of the Committee should possess the following attributes of qualifications:
- Must possess the high level of integrity, capability, sound knowledge, related working experience, as well as the ability to communicate effectively.
- Must possess sufficient knowledge to read and understand financial reports, Company’s business operations, audit process, risk management, capital market regulations, and other related regulations.
- At least, one of the Committee members has educational background and expertise related to accounting and/or finance.
- Improve competency continuously through trainings and seminars.
- ust comply with the Indofood Code of Conduct and Audit Committee Code of Ethics.
The members of the Committee should act according to the following ethical codes:
- Comply with applicable government laws, rules and regulations.
- Oblige with Indofood Code of Conduct.
- Act with integrity and honesty in performing duties.
- Act independently.
- Act in good faith, responsibly, and with due care, competence and diligence.
- Transparent in any transaction or relationship that reasonably could be expected to give rise to any violations, including any apparent conflicts of interest.
- Respect the confidentiality of information acquired in the course of duties and will not use it for personal or other parties’ advantages.
- Should not abuse the position / authority given for personal or other parties’ advantages.
V. ROLES AND RESPONSIBILITIES
In fulfilling its oversight responsibilities and carrying out activities of the tasks given by the BOC, the Committee’s roles and responsibilities which include among others, mainly related to overseeing financial reports process, external and internal audit, risk management, effectiveness of internal control, and compliance to applicable rules and regulations. The Committee is responsible for providing independent opinion to the BOC on reports and/or matters given by the BOD to the BOC, as well as identifying matters that deemed to be concerned by the BOC.
- Review financial information to be released by the Company to public and/or authority bodies; such information includes financial reports, projections, and other reports related to financial information of the Company.
- Review the quality and adequacy of the Company’s financial reporting processes including whether there are any material weaknesses, significant deficiencies in the controls; any corrective actions taken; and if any fraudulent activities occurred.
- Review complaints related to the accounting and financial report process.
- Provide recommendation to the BOC regarding the appointment of External Auditor based on its independency, scope of engagement, and fee.
- Review the adequacy of audit engagement ensuring all significant risks have been accounted.
- Provide independent opinion for any dissent involving Management and External Auditor regarding services provided to the Company.
- Review the internal audit practice and monitor the implementation of corrective actions performed by the BOD on internal audit findings/observations.
- Review risk management performed by the BOD (if the Company doesn’t have Risk Committee under the BOC), including the Company’s major risk exposures and the steps taken to monitor and control such exposures.
- Review and evaluate the effectiveness and/or weaknesses of the Company’s internal controls.
- Review the Company’s compliance with law and regulation in capital market and other regulations related to its activities.
- Conduct review and provide recommendation to the BOC related to any potential conflict of interest of the Company.
- Keep confidentiality of Company’s documents, data and information.
In performing its duties, the Committee has the authorities as follow:
- Access Company’s documents, data, and information related to employees, funds, assets, and other Company’s resources needed.
- Communicate directly with employees including Directors and Internal Auditors, risk management personnel, and Accountants whom related to Committee’s roles and responsibilities.
- May work together with Internal Auditor.
- Should it deem necessary to assist its duties, the Committee, with the approval from the BOC, may consider obtaining outside independent professional services.
- Conduct other authorities given by the BOC.
- The Committee shall meet at least once in every 3 (three) months, or more frequent as it deems appropriate to carry out its duties.
- A majority of the Committee members shall constitute a quorum where more than ½ (half) of the total Committee members attend the meeting.
- he decision taken in the Committee meetings should be based on deliberation and consensus agreement.
- Matters discussed during the Committee meetings shall be recorded in minutes, including any dissenting opinions, signed by all the Committee members attended, and reported to the BOC.
- Should it deem necessary, the Committee can meet separately with any relevant parties within or outside the Company to discuss matters.
In performing its duties, the Committee:
- Provide reports to the BOC of every assignment given.
- Provide reports to the BOC at least 2 (two) working days after the report is completed.
- Provide an annual report describing its activities, and disclosed it in the Annual Report of the Company.
VIII. SELF ASSESSMENT
The Committee should review its effectiveness annually to determine how well it is accomplishing its mission and prescribed roles and responsibilities.