188
REPORT OF KEMPR DUTIES IMPLEMENTATION IN 2015 Throughout 2015, KEMPR has supervised and monitored the implementation of the current CSS, the implementation of the 2015
RKAP in 2015, the implementation of the capital expenditure budget capex in the 2015 RKAP, analysis of investments in subsidiaries and the implementation of enterprise risk management. In addition, KEMPR has also evaluated the proposed CSS for
2016-2020, the proposed RKAP for 2016, as well as other tasks given by the Board of Commissioners.
The activities of the Evaluation, Monitoring and Risk Planning Committee in 2015, include:
1. Corporate Strategic Scenario CSS
KEMPR monitors the implementation of the RJPPCSS for the period of 2015-2019, particularly, in relation to the current year and the evaluation of the proposed CSS for the period of 2016-2020 that serves as the basis for the development of the
2016 Corporate Annual Message CAM dan the 2016 RKAP. In accordance with the periodal strategy updates of the RJPP, the CSS for the period of 2016-2020 CSS is an update of the CSS for the 2015-2019 period. From the studies conducted, in
order to implement the 2016-2020 CSS, a comprehensive transformation strategy and strong leadership is required in order to achieve the expected outcomes. The transformation of the organization in accordance with the 2016-2020 CSS led to the
improvement of the synergy and parenting model between Telkom and its subsidiaries.
2. Annual Business Budget Plan
In carrying out the 2015 RKAP, the Board of Commissioners directs the Board of Directors to seek concrete measures in anticipating the decline in profit growth, mainly by way of cost transformation, increasing sales in order to be in line with the
capex deployment, customeruser retention, the use of digital channels for the consumer segment, and revenue assurance. As for the 2016 RKAP, the Board of Commissioners also provides strategic directives, which includes, among others:
a.
Prioritizing and improving the synergy and coordination within Telkom Group; b.
Realizing Telkoms commitment to increase the share of local content through the use of goods and services in Telkom Group
189
d. Approval of the 2016-2020 corporate strategic scenario;
e. Capital expenditure approval for the Satellite project;
In carrying out its duties in 2015, KEMPR has generated several reports and studies evaluations, with the following details:
CSS RKAP
Capex RiskLegal
Certain Action Output
3
12 14
4 10
Jakarta, March 28, 2016 s
Hadiyanto Chairman of KEMPR
190
CORPORATE SECRETARYINVESTOR RELATIONS “IR”
The Corporate Secretary plays an important role in facilitating communication among the organs of the company, establishing relationships between the company and shareholders, Financial Services Authority, and other Stakeholders, as well as ensuring the
compliance of the Company with rules and regulations in the Capital Market. FUNCTION CORPORATE SECRETARY
According to the GCG Telkom Guidelines, the Function of the Corporate Secretary includes: ·
Synergy among related units for socialization, implementation, monitoring, reviewing the GCG. ·
Synergy among related units including with Subsidiaries for socialization, implementation, monitoring, and reviewing the implementation of the GCG.
· Assist the Board of Directors in a variety of activities, information, and documentation, among others:
o Creating a List of Shareholders;
o Attend Board of Directors Meetings and make a minute of meeting;
o Organizing the implementation of the GMS.
· Prepare and communicate information that is accurate, complete, and timely about the performance and prospects of the
Company to stakeholders ·
Publish Company information in a tactical, strategic, and timely way. DUTIES AND RESPONSIBILITIES OF CORPORATE SECRETARY
· Organizing the GMS.
· Attend Board of Directors meetings and joint meetings between the Board of Commissioners and Board of Directors
· Manage and store documents related to activities of the Company including GMS documents, minutes of meetings of the
Board of Directors, minutes of joint meetings between the Board of Directors and the Board of Commissioners, and other important company documents.
· Determine the criteria regarding the type and content of information that can be presented to the stakeholders, including
information that can be delivered as a public document. CORPORATE SECRETARY OFFICER
Telkom has appointed a Vice President VP of Investor Relations who simultaneously carries out the duties and functions of the Corporate Secretary in accordance with FSA OJK Regulation Number 35POJK.04 2014 regarding Corporate Secretary of Issuers
or Public Companies. The Investor Relations officer is responsible for preparing the presentation of information between the Company and the Shareholders in accordance with the specified rules in relationship management, as well as maintaining systematic feedback
mechanisms to the management to be able to respond to the dynamics of the shareholders and the capital market on an ongoing basis, effectively, and efficiently.
PROFILE OF CORPORATE SECRETARY OFFICER
VP Investor Relations is chaired by Andi Setiawan who joined Telkom Group as GM Investor Relations at PT Telekomunikasi Selular in January 2014. On March 4, 2015, he was appointed as VP Investor Relations Corporate Secretary PT Telkom Indonesia Tbk. He
previously worked at PT Pemeringkat Efek Indonesia 2004 as a Corporate Rating Analyst, then joined PT Bakrieland Development Tbk as Corporate Secretary Manager 2007, and subsequently worked in PT Summarecon Agung Tbk as Manager of Investor
Relations 2010. He graduated from Universitas Indonesia with a Bachelor
191
CORPORATE SECRETARY COMPETENCE ENHANCEMENT In order to develop the competence of the Corporate Secretary, we have participated in various training and socialization events
organized by various institutions
NAME OF TRAINING LOCATION ORGANIZER
Certified Investor Relations
192
EVALUATION ON THE EFFECTIVENESS OF INTENAL CONTROL 1. Management Report on Internal Control over Financial Reporting
The Companys Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15f and 15d-15f. The internal control over financial reporting is a process
designed by, or under the supervision of, the CEO and CFO, and executed by the Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Consolidated
Financial Statements for external purposes in accordance with generally accepted accounting principles, and includes those policies and procedures that 1 pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the Company, 2 provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with generally accepted accounting principles,
and that receipts and expenditures of the Company are being made only in accordance with authorizations of the Company
193
INTERNAL AUDIT UNIT STRUCTURE AND POSITION OF THE INTERNAL AUDIT UNIT
As set forth in the applicable capital market regulations, IA is a unit that is independent of other work units and is directly responsible to the President Director.
Below is a chart of the organizational structure of the Telkom Internal Audit.
INTERNAL AUDIT CHARTER Telkom IA unit has been equipped with the Internal Audit Charter as a formal company document, which contains a description of the
vision, mission, structure, status, tasks, responsibilities and authority of the IA, including requirements for IA auditor personnel. The drafting of the Internal Audit Charter is guided by international standards for the practice of the internal auditing profession issued by
the Institute of Internal Auditors IIA, and has been approved by the President Director and the Audit Committee of the Board of Directors based on decision No.Tel. 09PW 000UTACOP-C00000002015 regarding the Internal Audit Charter.
VISION, MISSION, TASKS AND RESPONSIBILITIES OF INTERNAL AUDIT Vision
As a Smart Partner for Management, Business Unitwork Unit and subsidiaries in order to achieve the Companys objectives as well as a driving force for the whole range of the Company and its subsidiaries in order to create a culture of discipline in implementing all
provisions of the applicable legislationpolicyregulationsproceduresbusiness processes. Mission
1.
Provide services and internal audit consulting in a professional, objective and independent manner for Management, Business Unitwork Unit, and subsidiaries.
2. Provide assurance on the suitability of financial reporting. 3.
Actively guarding the implementation of internal control, providing support in raising GCG implementation, and evaluating the implementation of risk management.
The aforementioned Vision and Mission of the IA is applied in the form of IA activities that are organized in a systematic and measured manner, and in accordance with the applicable standards ranging from preparation, implementation and monitoring of the
follow-up results. To this end, during the audit preparation phase, risk-based audit methodology is the main guideline which emphasizes that determining the proper audit unit auditable is based on the level of risk; the higher the risk, the higher the need for
auditing. The risk level of the audit object auditor is based on the risks that have been mapped and determined by the Company as well as the professional assessment by the IA itself.
Duties And Responsibilities The risk-based audit paradigm, in carrying out its duties and responsibilities, have used the IA Audit Management System AMS,
which is an application system for documenting the implementation of risk-based audits online. Increasing the role of IA is done by improving quality assurance for the companys operations through audit and non-audit activities.
Audits are conducted to ensure that business risks that may occur can be addressed through effective internal controls. If deficiencies are found in the control of a business process andor the risk of spiraling out of control, then a substantive test is conducted, namely a
further testing of the audit object in order to explore root causes. Moreover, as a consequence of listing of shares on the Indonesian Stock Exchange BEI and the New York Stock Exchange NYSE,
IA periodically carries out tests and audits of the effectiveness and adequacy of internal controls in the context of financial reporting in accordance with Internal Control over Financial Reporting ICOFR standards. In order to support the implementation of the audit
and develop awareness towards the importance of internal control for the business units, each quarter, the business unit perform Control Self Assessment CSA
to the internal controls for which it is responsible. Periodically, IA evaluates the CSA results to measure their adequacy and make recommendations for improvement both for design and implementation.
194
The next stage is to participate in the activities of internal consulting services. Internal consulting services is focused on, among others, Company operations that can be grouped into infrastructure management production equipment, products and services as
well as supporting operations, including the identification of Group Financial Reporting RiskGFRR, the preparation of business processes of subsidiaries and HR management. This internal consulting activity is more of a preventive solution to anticipate that
business operations continue in the right direction and heed applicable regulations. As part of the Company with a high commitment to the success of GCG, IA has an important role in the whistleblower mechanism
which is the purview of the Audit Committee and the Executive Investigative Committee EIC, where the head of IA is appointed as secretary of the EIC. The whistleblower mechanism functions to accommodate every complaints by employees to be forwarded to the
management. In turn, if the Audit Committee and EIC deem that the complaint needs to be investigated further, IA will take the role to follow-up as part of the duties of audit.
The results of such activities are reported to the President Director with copies forwarded to the Audit Committee and then the results will be communicated to the audit object to be followed up and rectified.
To ensure that the object of the audit has provided a sufficient response on the results of the audit and internal consultation, it is necessary to conduct further monitoring. Follow-ups on the ground are conducted by the audit object which is then monitored by the
IA. In this regard, a follow-up is limited to areas of significant business processes with a mutually-agreed settlement time. INDEPENDENCE INTERNAL AUDIT UNIT
As set forth in the applicable capital market regulations, namely Bapepam-LK regulation No. XI.2.7, the Internal Audit is an independent unit from other work units and is directly responsible to the President Director. Telkoms head of Internal Audit is
appointed and dismissed by the President Director with the approval of the Board of Commissioners. One of the implementation of the independence of the Internal Audit Unit in Telkom is the Internal Audit Report sent to the President Director and copied to the Audit
Committee Board of Commissioners. THE APPOINTMENT PROCEDURE AND NAME OF THE CHAIRMAN OF THE INTERNAL AUDIT
The Internal Audit IA Unit plays a role in exercising control over the Companys business activities. The IA is headed by a Senior Vice President of Internal Audit SVP Internal Audit, who is appointed and dismissed by the President Director with the approval of
the Board of Commissioners. As of December 31, 2015, the Internal Audit SVP is held by Harry Suseno Hadisoebroto. BRIEF PROFILE OF THE HEAD OF INTERNAL AUDIT UNIT
Harry Suseno Hadisoebroto
served as Internal Audit SVP since July 1, 2015 and was appointed by a Resolution signed by the President Director. Since 1992 has worked at Telkom and its subsidiaries and has 11 years of professional experience in various
positions at management level. He previously served as Internal Audit Telkomsel VP since May 1, 2014 until June 30, 2015. He has been Internal Audit VP at Telkom from April 1, 2011 until April 30, 2014.
NUMBER OF PERSONNEL OF INTERNAL AUDIT UNIT
At the end of 2015, the number of personnel in the IA unit numbered 49 people. Based education, the personnel of the Internal Audit are as follows:
Education Number
High School 1
2.0 D2
3 6.2
D3 1
2.0 S1 Undergraduate
30 61.2
S2 Graduate 14
28.6
Total 49
100
195
QUALIFICATIONPROFESSIONAL CERTIFICATION To maintain and improve auditors who have sufficient competence both in quality and quantity to be able to act in accordance with the
scope of activities of IA in guarding the business development of the Company, IA continues to strive in: 1.
involve the IA auditor in training, seminars and workshops of a technical nature; and 2.
engage the IA auditor in both local and international certified sustainable learning. Currently, the number of auditors who already have national certification is eight people with Qualified Internal Auditor
196
INTERNAL AUDIT TRAINING The training followed by Internal Audit in 2015 is as follows:
Program Number of Participant
Number of Day
Sertification Training 2
12 Operational Training
52 19
Competency Enhacement Training 34
28
EXTERNAL AUDIT
In line with existing procedures and taking into consideration the independence and qualifications of independent auditors, at our AGMS on April 17, 2015 we appointed KAP Purwantono, Suherman Surja a member firm of Ernst Young Global Limited a
registered KAP with OJK, to perform the audit on our Consolidated Financial Statements for the fiscal year ended December 31, 2015 and on the effectiveness of internal control on Financial Reporting as of December 31,2015. The fee for the audit on the Consolidated
Financial Statements for fiscal year 2015 was agreed at Rp34.4 billion excluding VAT.
Based on Bapepam-LK No.VIII.A.2. on the Independence of Accountant Providing Audit Services in Capital Markets noted that the provision of services of general audit of the clients financial statements can only be done by a public accounting firm for as long as 6
six financial years in a row and by an accountant no later than 3 three fiscal years in a row. KAP Purwantono, Suherman Surja is a public accountant firm since 2012.
In 2015, companys public accountant firm is Purwantono, Sungkoro Surja previously Purwantono, Suherman Surja. Accountant who signed the Independent Auditors Report for Fiscal Year 2015 was Hari Purwantono. KAP Purwantono, Sungkoro
Surja was also appointed to audit the Effectiveness of Internal Control over Financial Reporting financial year of 2015 and audit the use of funds of the Partnership and Community Development PKBL in fiscal year 2015.
Public accounting firm that has audited Financial Statements of the Company for the last 5 years, are as follows:
Years Public Accounting Firm
Public Accountant Fee
Rp million
2015 Purwantono, Sungkoro Surja
Drs.Hari Purwantono 34,400
2014 Purwantono, Suherman Surja
Drs.Hari Purwantono 31,500
2013 Purwantono, Suherman Surja
Drs.Hari Purwantono 28,240
2012 Purwantono, Suherman Surja
Drs.Hari Purwantono 26,619
2011 Tanudiredja, Wibisana Rekan
Chrisna A.Wardhana, CPA 40,503
Fees and Services of the External Auditor The following table summarizes the fees for audit service in 2013, 2014 and 2015:
For Years Ended on Desember 31, 2013 Rp million
2014 Rp million 2015 Rp million
Audit Fee 28,240
31,500 34,400
All Other Fees 340
370 -
AUDIT BY OTHERS EXTERNAL AUDIT INSTITUTIONS In 2015, in addition to the audit by the Public Accounting Firm KAP, Auditors from the Audit Board of the Republic of Indonesia
BPK audited Telkom
197
Risk Management Development Milestone Since 2006, we have applied a risk management framework that refers to the COSO Enterprise Risk Management ERM as stipulated
in Decision of the Board of Directors Number. 16 of 2006 on Corporate Risk Management Telkom Risk Management. The policy was amended by the Board of Directors
198
The main framework used in risk management at Telkom COSO ERM Framework includes three major components: 1.
Company risk management must be able to support the companys goals from the following aspects: strategic, operational, Reporting and compliance.
2. Enterprise risk management applied at all levels of the organization within the company includes: Enterprise-level, Division, Business unit and Subsidiary.
3. The implementation of enterprise risk management consists of eight components which are:
a. Developing the internal environment process
b. Objective setting process
c. Event identification process
d. Risk assessment process
e. Risk response process
f. Control activities process
g. Information Communication Process
h. Monitoring process
However, in its implementation, Telkom also pays attention and integrates the framework with references and other relevant guidelines, among others:
1. ISO 31000 - Enterprise Risk Management as a comparison and complementary implementation
2. ISO 27001 - Information Security Management System ISMS as a reference in the development of risk management to ensure information security in terms of Confidentiality, Integrity and Availability
3. ISO 22301 - Business Continuity Management System BCMS as a reference in ensuring business continuity 4.
ISO 20000 - Information Technology Service Management ITSM as a reference in ensuring IT services 5.
Safety and Health Management System SMK3 based on Government Regulation No. 50 of 2012 on the application of SMK3 6.
ISO 18001 - Occupational Health and Safety Assessment System OHSAS as a reference to support the implementation SMK3 IMPLEMENTATION OF RISK MANAGEMENT POLICY AND FRAMEWORK
1. Efforts to add value to the management of the company
