1. Report of the Nomination and Remuneration Committee in 2014
This report is a report on tasks that have been performed by the Nomination and Remuneration Committee in 2014. This report consists of the composition of membership, reports on nomination and report on remuneration matters
that are the responsibility and under the authority of the Nomination and Remuneration Committee of the Board of Commissioners of PT Telkom Tbk.
a. Membership Composition of the Committee
The composition of the Nomination and Remuneration Committee based on the Charter of the Board of
Commissioners is chaired by the President Commissioner. The Secretary of the Committee is
held by the Secretary of the Board of Commissioners and members of the committee, which consists of
all Members of the Board of Commissioners. To date, there has been no member from outside the Board
of Commissioners.
OJK has issued regulations Number 34POJK.042014 dated December 8, 2014 regarding the Nomination
and Remuneration Committee of a public company. Telkomplans to adopt the OJK regulation at the
Annual General Meeting of Telkom in 2015, subsequent to which the BOC will observe these rules.
During 2014, the number of nominations and Remuneration Committee meetings held was as many
as 50 meeting, of which 15 were part of the Internal Meeting of the Board of Commissioners and 32 were
held in the form of circulation of minutes for approval.
b. Nomination Report
In 2014, the Nomination and Renumeration Commitrtee completed four 4 processes of granting the proposed
name nomination for each of the following:
Proposed Acting officers of President Director of PT Telkom Indonesia Tbk Persero.
This is in accordance with the letter of The Board of Commissioners to the Minister of SOE No. 201 SRT
DK 2014 dated October 31, 2014 regarding Progress Report of PT Telkom Indonesia, Tbk. The position of
Commissioner of PT Telkomsel is the ex-officio President Director of PT Telkom Indonesia Tbk
Persero. Proposed name of candidate Director of PT Telkom
Indonesia Tbk Persero. BOC after meeting of the Nomination and Remuneration
Committee dated December 1, 2014 has issued a letter to the minister SOE No. 218 SRT DK 2014
dated Desember 1, 2014 regarding: Proposed Candidate Director of PT Telkom Indonesia Tbk Persero.
Proposed name a replacement candidate of Director Director of PT Telkom Indonesia Tbk Persero.
BOC after Nomination and Remuneration Committee Meeting dated December 4, 2014 has issued a letter
to the Minister of SOE No. 221 SRT DK 2014 dated December 4, 2014 regarding the Proposed Candidate
of President Director of PT Telkom Indonesia Tbk Persero.
Approval for the composition of the Board of Directors and Board of Commissioners of PT Telkomsel. After
a meeting of the Nomination and Remuneration Committee on December 24, 2014, the Board of
Commissioners issued a letter to the Board of Directors of Telkom through a letter No. 234 SRT DK 2014
dated December 24, 2014 regarding the approval of the composition of the Board of Commissioners of
PT Telkomsel.
c. Remuneration Report In 2014, the Nomination and Remuneration Committee
has conducted as many as six 6 activities of remuneration processes, namely:
1. The proposed remuneration for the Company’s
management to the Shareholders of Series A for the year 2014 based on the letter of Board of Commissioners
No.057 SRT DK 2014 dated April 8, 2014 regarding the Proposed Remuneration for Board of Directors
and Commissioners 2014 for AGM and number 075 SRT DK 2014 dated April 8, 2014 regarding the
remuneration for the Board of Directors and the
REPORTS OF COMMITTEES UNDER THE BOARD OF COMMISSIONERS
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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
Board of Commissioners for the Fiscal Year 2014 and Fiscal Year 2013. The Proposals have been studied
by an independent consultant.
2. Compliance with the remuneration for the Board of Commissioners is proof that Telkom, as a state-owned
enterprise, has adopted Regulation of SOE Minister No.042014. The adjustment is based on the result
of the Nomination and Remuneration Committee meeting on April 22, 2014 and May 20, 2014. The
adjustment resulted in a decline in the remuneration received by the Board of Commissioners, a condition
which was also experienced by the Board of Directors. Previously, adjustment has also been made to the
BOC supporting organ in a bid to follow the Regulation of the Minister of SOEs No. 122012.
3. The provision of operational costs to the Board of Directors and the Board of Commissioners is in
accordance with the decision of the Board of Commissioners No.15 KEP DK 2014 dated September
29, 2014.
4. The proposal of demand for Long Term Incentive for the management of Telkom. The Nomination and
Remuneration Committee, assisted by an Independent Consultant, has submitted a request of Long Term
Incentive to the Shareholders Serie A after, according to the Minister of SOEs number 042014, considering
it possible to get it. The proposal was contained in a letter of the Board of Commissioners to the minister
of SOE No.176 SRT DK 2014 dated October 6, 2014 regarding LTI proposal for PT Telkom. This proposal
was approved by the Shareholders of Series A through a letter to Telkom No. S-698 MBU 102014 dated
October 21, 2014 regarding the approval of Remuneration in the form of LTI Long Term Incentive.
Thus, Telkom is the first SOE to be approved to obtain long-term incentive LTI from holder of
Series A Shares.
5. The approval of disbursement of post-job compensation to former President Director of PT Telkom. Following
a circular meeting of the Nomination and Remuneration Committee, the Board of Commissioners has issued
a letter of approval No.203SRTDK2014 dated November 5, 2014, while for the long-term incentive
LTI can not be processed because the Board of Commissioners have not met the requirements.
6. Approval disbursement of long-term incentive Long Term Incentive to former Board of Commissioners
and Board of Directors of PT Telkom. As a follow up of the results of the Extraordinary General Meeting
on 19 December 2014, it has issued approval of the Board of Commissioners through letter No. 286
SRT DK 2014 dated December 31, 2014 regarding the execution of the LTI program in 2014.
Jakarta, March 26, 2015
Hendri Saparini Chairman of Nomination and Remuneration Committee
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PT Telkom Indonesia Tbk Persero
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
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2014 Annual Report
PT Telkom Indonesia Tbk Persero
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