2. Report of the Audit Committee in 2014
The activities that have been performed the audit committee in 2014, are as follow:
Independent Auditor In 2014, Telkom has reappointed Purwantono, Suherman
Surja, a member firm of Ernst Young Global Limited “EY” as an independent auditor to conduct an integrated
audit for Fiscal Year 2014. The reappointment of EY as an independent auditor has been approved by the Annual
General Meeting of Shareholders on April 4, 2014.
The Audit Committee, jointly with EY, has reviewed the quality and acceptability of the financial accounting
standards adopted by the Company. Based on the results of the integrated audit, EY is responsible to give an
opinion on the fairness of the presentation of the consolidated financial statements in accordance with
financial accounting standards in Indonesia and International Financial Reporting Standards IFRS and
the opinion on the effectiveness of internal control over financial reporting internal control over financial reporting
in accordance with criteria of the Committee of Sponsoring Organizations of Treadway Commission COSO.
The review and discussion of the Audit Committee with EA also cover matters in accordance with auditing
standards on communication with the Audit Committee, the standards of the Public Company Accounting Oversight
Board “PCAOB”, the OJK and SEC Regulations and other applicable regulations.
In accordance with PCAOB rules 3526 - Communication with Audit Committees Concerning Independence, EY
has submitted a letter to Audit Committee that provides explanation about the relationships between EY and
Company would be regarded to bear on independence. The Audit Committee has discussed with EY about this
independence and has received confirmation that EY professional consideration that Public Accounting Office
are independent, considering the influence of of non- audit services from public accounting firm.
Integrated Audit 1. The Audit Committee has reviewed management’s
report on its evaluation of the effectiveness of the Company’s internal control over financial reporting
and EY’s report on the effectiveness of internal control over financial reporting. The Audit Committee
had also discussed the significant deficiencies “SD” identified during the evaluation process and the
audit process with management and EY as well as the management plans to remediate weaknesses of
internal control over financial reporting.
2. The Audit Committee had discussed with the Company’s internal auditors and EY about the overall
scopes and plans for their audits. The Audit Committee has held meetings with the internal auditors and EY,
without management present, to discuss the results of the examination and the results of their evaluation
of internal control over financial reporting of the Company as a whole.
The Audit Committee has reviewed and discussed the audited consolidated financial statements and notes to
the consolidated financial statements in the Annual Report Form 20F with the Company’s management.
This discussion includes the quality and acceptability of financial accounting standards applied by Company, the
feasibility of accounting estimation and judgement and the adequacy of disclosures in the consolidated financial
statements. The management has confirmed to the Audit Committee that the consolidated financial statements:
i are the responsibility of management and have been prepared with integrity and objective; and ii have been
presented in accordance with financial accounting standards in Indonesia and IFRS.
220
2014 Annual Report
PT Telkom Indonesia Tbk Persero
FINANCIAL AND PERF
ORMANCE HIGHLIGHT
MANA GEMENT
REPOR T
PREF A
GENERAL INF
ORMA TION OF
TELK OM INDONE
SIA
MANA GEMENT’S DISCUSSION
AND ANAL Y
SIS
CORPORA TE GO
VERNANCE
SOCIAL AND ENVIRONMENT
AL
RE SPONSIBILITY
APPENDICE S
Based on the result of the discussions, the Audit Committee had recommended to the Board of
Commissioners, and subsequently the Board of Commissioners has approved that the audited consolidated
financial statements and notes on the consolidated financial statements and management’s evaluation of
the effectiveness of internal control over financial reporting to be included in the Annual Report which will be be
reported by the Company to OJK and the Annual Report on Form 20F which will be reported by the Company
to the US SEC.
Internal Auditor 1. The Audit Committee reviewed Annual Audit Work
Program of Internal Audit “IA” in 2014 which is based on Risk Based Approach Audit before set by
Management.
2. The Audit Committee reviewed and discussed the findings or internal consultations including its
recommendation on the implementation of Annual Audit Work Program of IA in 2014 and monitor the
follow up IA recommendation about management on a quarterly basis. During 2014, IA has given 424
recommendations to Management consist of 347 has completed and 67 recommendations still in
process because they were given in fourth quarter of 2014.
3. The Audit Committee monitors the findings of the Audit Board of the Republic of Indonesia “BPK”
in 2014 and follow-up that has been done by the Management. During 2014, BPK has given 41
recommendations to Management, out of which 38 recommendations has completed and 3
recommendations could not be followed. 4. Based on limited review from IA, the Audit Committee
supervise and monitor the risk of fraud and financial reporting risk that may have a material effect on
the Financial Statement.
Partnership and Community Development Programs The Audit Committee reviewed and discussed with
management and EY on PKBL Financial Statement Fiscal Year 2014 and CSR Implementation Compliance Report
with regulations.
Whistleblower 1. The Audit Committee has developed procedures
for receiving and handling complaints regarding accounting problem, internal controls and auditing,
including procedures to keep secrecy of the informan, dan anonymous accusation submitted by employees
in accordance with the OJK Regulations No.IX.1.5 and Sarbanes-Oxley Act of 2002 section 301 of the
Public Company Audit Committees.
2. With regard to enterprise risk management, the Audit Committee also oversees and monitors the
risk of fraud and financial reporting risks that may have a material effect on the financial statements.
Jakarta, March 26, 2015
Johnny Swandi Sjam Chairman of Audit Committee
221
2014 Annual Report
PT Telkom Indonesia Tbk Persero
3. Report of the KEMPR in 2014
Throughout 2014, KEMPR has conducted surveillance and monitoring the implementation of the current CSS,
the implementation of RKAP in 2014, the implementation of the capital expenditure capex in RKAP 2014, the
analysis of investments in subsidiaries and the implementation of enterprise risk management. In
addition, KEMPR has also conducted an evaluation of the proposed CSS 2015-2019, the proposed RKAP 2015,
as well as other tasks assigned by the Board of Commissioners.
Activities of Planning Committee and Risk Evaluation and Monitoring in 2014:
1. Corporate Strategic Scenario “CSS” KEMPR has monitored the implementation of RJPP CSS
for the period from 2014 to 2018, especially that relates to the current year and conduct evaluation of the proposed
CSS for the period from 2015 to 2019 which became the basis for the development of Corporate Annual Message
“CAM” in 2015 and RKAP in 2015. In accordance updates of RKAP strategy RJPP periodic, then the CSS period
from 2015 to 2019 is an update to the CSS period from 2014 to 2018.
2. Annual Business Budget Plan In carrying RKAP 2014, the Board of Commissioners has
instructed the Board of Directors to seek timely implementation of capital expenditure, particularly in
supporting the achievement of the Company’s revenues. As for the RKAP 2015, the Board of Commissioners has
also provided strategic directions, including: a. Synchronization of potential retail consumer demand
of Telkom and its subsidiaries that cover the same service segment;
b. The need for concrete steps to encourage the growth of earnings;
c. Implementation of integration in the establishment, monitoring and coaching subsidiaries;
d. Increased capacity of subsidiaries to explore external market in order to achieve the proportion of revenue
from external market which is higher than the achievement in 2014.
KEMPR focus in monitoring the implementation of RKAP in 2014 which includes monitoring the realization of
RKAP in 2014 both in the achievement of revenue, expenses, and profits, as well as capital expenditures.
In order to obtain more optimal monitoring results, KEMPR had performed several field visits to monitor the
progress of the implementation of capital expenditure and progress towards CBP.
KEMPR has conducted field visits in 2014 to the regional unit in Central Java and Yogyakarta, Sulawesi, and
Surabaya. In addition, KEMPR has also conducted field visits to project sea cables Manado Sulawesi Papua Cable
System “SMPCS” segment-Ambon-Makassar Jayapura, optical deployment by Telkom access in several locations
like Aceh, Manado and the construction of hotels by Telkom Property in Makassar.
3. Enterprise Risk Management “Enterprise Risk Management”
KEMPR is tasked to monitor the implementation of ERM in 2014, which include the handling of risks that have a
significant impact on the RKAP 2014. For the first half of 2014, there were some significant issues of risk, ie the
risk of the cellular business, fixed broadband, Wi-Fi, and outsourcing. As for the second half of 2014, KEMPR
noted some risks that KEMPR namely, the risk impact of changes in technology and regulation, increased levels
of competence in mobile and fixed broadband business, as well as the risks of mergers, acquisitions and
partnerships. KEMPR specifically monitor efforts to mitigate the risks that can be classified as significant
risk.
4. Measures of Directors that require approval from the Board of Commissioners
In 2014, KEMPR has reviewed the following actions by the Board of Directors members which require the
approval of the Board of Commissioners: a. Permits release of the capital expenditure for the
first and second quarter of 2014; b. Additional capital investment in Telkom Metra for
funding the joint venture JV Network Application Service, which is a collaboration Telkom Metra and
Telstra;
222
2014 Annual Report
PT Telkom Indonesia Tbk Persero
FINANCIAL AND PERF
ORMANCE HIGHLIGHT
MANA GEMENT
REPOR T
PREF A
GENERAL INF
ORMA TION OF
TELK OM INDONE
SIA
MANA GEMENT’S DISCUSSION
AND ANAL Y
SIS
CORPORA TE GO
VERNANCE
SOCIAL AND ENVIRONMENT
AL
RE SPONSIBILITY
APPENDICE S
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