Audit Committee

To boost the Board of Commissioners’ effective implementation of its responsibility based on the Regulation of the Financial Services Authority Number 55/POJK.04/2015 dated 23 December 2015, the Board of Commissioners appointed and reported the appointment of Audit Committee’s members through the Letter Number 070/JAPFA-OJK/LD-CS/IV/2017 dated 5 April 2017 on the Changes of the Company’s Audit Committee’s members. However, the Company had established and appointed members of the Audit Committee on 21 February 2002 based on the Letter to Jakarta Stock Exchange No. 006/Japfa-BEJ/LD-YS/2002.

Audit Committee Work Manual

To carry out its duties and responsibilities for controlling and assessing the organization, the Audit Committee has a work manual as stated in Audit Committee Charter. The Audit Committee Charter stipulates, among others, duties and responsibilities of the Committee, stipulation of Audit Committee’s work procedure and responsibility. The Audit Committee Charter was developed based on the regulation and prevailing law and is constantly under review and was validated by PT Japfa Comfeed Indonesia Tbk’s Board of Commissioners on 5 July 2013.

Audit Committee Charter contains:

• Introduction
• Duties, Responsibilities and Authority
• Audit Committee’s Structure and Position
• Audit Committee’s Meeting
• Activity Reporting System
• Audit Committee’s Terms of Office
• Conflict and Code of Conduct
• Others

Independency of Audit Committee

An Independent Commissioner and two professional members from the external parties lead the Audit Committee, pursuant to the provisions stipulated in OJK Regulation Number 55/ POJK.04/2015 dated 23 December 2015 concerning the Establishment and the Guideline for the Work Implementation of the Audit Committee. The Audit Committee has performed their duties and responsibilities professionally and independently

Audit Committee’s Duties and Responsibilities

PT Japfa Comfeed Indonesia Tbk’s Audit Committee Charter states that the duties of responsibilities of the Audit Committee are to provide the Board of Commissioners with opinion concerning report or other matters submitted by the Board of Directors to the Board of Commissioners, identify matters demanding Board of Commissioners’ attention, and implement other duties related to the Board of Commissioners’ duties, which include:

• Conducting review of financial information to be released by the Company such as financial statements and other financial information, including affiliated transactions.
• Supervise the Company’s compliance with prevailing laws in the Stock Exchange and other laws related to the Company’s activities.
• Report to the Board of Commissioners on various risks faced by the Company and the implementation of risk management carried out by the Board of Directors.
• Review the implementation of audit by internal auditor and supervise follow-up actions by the Board of Directors based on findings of the internal auditor.

In carrying out duties and responsibilities, the Audit Committee has the authority to access to internal audit report and other reports as required and directly communicate with both the internal audit and the external audit.

Audit Committee Meeting

As stipulated in OJK’s regulation, POJK Number 55/POJK.04/2015 concerning the Establishment and Guidelines of Work Implementation of Audit Committee, the Audit Committee holds regular meetings at least once in 3 (three) months.

Audit Committee Implementation of Duties

In performing its work, the Audit Committee conducted a number of audit activities, such as the following:

• Reviewed financial statements and financial issues with the Financial Director to ensure a transparent financial reporting process and application, according to the accounting standards;
• Reviewed the audit plan and risk-based approach, in conjunction with the Internal Audit, to ensure adequacy and effectiveness of the internal control system;
• Discussed significant audit findings from the Internal Audit and monitored the follow-up of recommendations from both the Internal and External Audits;
• Reviewed the audit plan and audit findings, together with the External Auditor, to ensure an objective and independent audit process;
• Reported regularly to the Board of Commissioners about the Audit Committee’s activities, recommendations and other issues requiring attention from the Board of Commissioners;
• Evaluated the performance of the Public Accountant Firm, who audited the Company’s books in the 2018 financial year, and provided recommendations to the Board of Commissioners regarding the appointment of a Public Accountant Firm to audit the Company’s books in the 2019 financial year;
• Visited Operational units of the Company.

 

Nomination and Remuneration Committee

Pursuant to OJK Regulation Number 34/POJK.04/2014 concerning the Nomination and Remuneration Committee of Issuer or Listed Company, in 2015 the Company established the Nomination and Remuneration Committee based on the Board of Commissioners’ Resolution dated 17 September 2015, Number 001/JAPFA-KNR/ IX/2015.

Independency of Nomination and Remuneration Committee Members

The Nomination and Remuneration Committee shall act independently and perform its duties. An Independent Commissioner leads the Committee.

Duties and Responsibilities of Nomination and Remuneration Committee

In Nomination:

• Develop and provide the Board of Commissioners with recommendation on:
  • Board of Directors’ and/or Board of Commissioners’ composition;
  • Policies and criteria required in the Nomination process;
  • Policies on the Board of Directors’ and/or Board of Commissioners’ member performance evaluation.
• Assist the Board of Commissioners to assess the performance of Directors and/or Commissioners based on the criteria as evaluation reference.
• Develop and provide recommendations to the Board of Commissioners on development programmes for the Directors and/or Commissioners.
• Review and provide candidates who have met the requirements to be members of the Board of Directors and/or the Board of Commissioners to GMS.

In Remuneration:

• Develop and provide recommendation to the Board of Commissioners concerning:
  • Remuneration Structure on salary, honorarium, incentive and/or fixed or variable benefit allowance;
  • Policies on Remuneration;
  • Amount of Remuneration.
• Assist the Board of Commissioners in assessing performance and matching it with the amount of remuneration, and assess the appropriateness of policies of providing facilities to each member of the Board of Directors and/or the Board of Commissioners.

Nomination and Remuneration Committee’s Duty Fulfilment

The Nomination and Remuneration Committee, beside holding Internal Meetings, also conducts Meeting with the Board of Commissioners to recommend the Composition of the members of the Board of Commissioners and Directors who will end their terms of office at the Annual General Meeting of Shareholders in 2019, based on the criteria needed in the nomination process.

The Nomination and Remuneration Committee provides recommendations to the Board of Commissioners regarding Wage Scale, policies and the amount of Remuneration.

Board of Directors Succession Policy

Members of the Board of Directors have a very important role in defining the vision and strategic goals of a company, as well as ensuring the organization fulfills its mission. Succession planning to ensure a smooth transition when a member of the Board of Directors quits or changes in position becomes very important so that the continuity of the company can proceed. The responsibility for preparing, reviewing, proposing succession plans and helping to ensure the readiness of replacement personnel for members of the Board of Directors is the main responsibility of the Nomination and Remuneration Committee.