Internal Control System

The overall responsibility for the internal control system of the Company, including review of its effectiveness, rests with the Board of Commissioners and the Board of Directors (collectively referred to as “the Boards”).

The Boards acknowledge their responsibilities for ensuring the implementation of a sound and effective internal control system, and is committed to maintaining a robust internal control system to safeguard the investments of shareholders and the Company’s assets, as well as review of its effectiveness, adequacy and integrity in order to improve transparency and accountability. The system of internal control covers, among others governance, risk management, and financial, operational and other compliance controls.

The Boards continuously make appropriate measures to review and strengthen the transparency and the efficiency of the Company operations, including limitations on the amounts of expenses in certain categories that can be approved by Management and the Board of Directors and expenses that must be approved by the Board of Commissioners through Delegation of Authority Limits.

The Company’s external auditor has also, in the course of their audit, carried out a review of the Company’s internal control as part of their audit plan. Any material non-compliance and internal control weaknesses noted during their audit are reported to the Audit Committee. The Audit Committee sets a particular time during the year to meet with the external auditors to discuss internal control and various accounting issues.

Internal Audit

The function of internal audit within the Company is arranged based on Regulation No. IX.I.7 Annex No. Kep-496/BL/2008 dated November 28, 2008 on Establishment and Guidelines for the Preparation of Internal Audit Unit Charter carried out by the Internal Audit Unit (IAUI), in which:

  1. IAU shall directly be responsible to President Director and has direct access to Audit Committee who ensures that IAU can carry out its task independently and provides consultation with respect to the planned process of audit being conducted;
  1. IAU conducts independent and objective activities to help the Company achieve its goals, by using a systematic and disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes;
  1. In conducting its activities, IAU has the authority to access all information within the Company deemed relevant, communicate with all members of the Boards and Audit Committee, hold periodical and ad-hoc meetings with them, and coordinate their activities with the external auditors;
  1. IAU produces the management review report based on its evaluations of the Company’s practices. It also provides recommendations for improvements to the Company’s management.

 

 

External Audit

Based on the resolution of AGMS dated September 27, 2016, the Company re-appointed Public Accountants Firm (KAP) Siddharta, Widjaja & Partners, member of KPMG global network, to audit the Company’s books of the 2017 Fiscal Year.

Determination of the use of the Public Accountants Firm is performed in accordance with the provisions in force, which the Audit Committee has conducted a review and assessment of the prospective public accounting firm to be used, and made recommendation to the Board of Directors upon receiving of the power of the General Meeting of Shareholders to the Board of Directors to appoint Public Accountants Firm to be hired.

The Public Accountants appointed by the Company has no affiliation with any member of the Audit Committee, member of the Board of Directors, the Board of Commissioners, and the Ultimate Shareholder of the Company that might indicate confict of interests and influence the independence of the Public Accountant and its auditors. The Public Accountant performs its duty independently according to the Public Accountant professional standards, work agreement and scope of audits that has been set.

Code of Conducts

In 2017, the Company published the Guidelines for the Management of the Company for the Board of Commissioners and Board of Directors (Board Manual). The 51-page Manual becomes the reference for the Board of Commissioners and Board of Directors of PT Rig Tenders Indonesia Tbk in carrying out the duties, powers, responsibilities, rights and obligations, both as the Board (Board) as well as individual members of the Board of Commissioners and Board of Directors. This document also regulates the relationship between the Board of Commissioners, Directors, Shareholders, as well as subsidiaries.

The implementation of this manual requires a joint commitment of the Board of Commissioners and Board of Directors in order to manage the company on behalf of the shareholders and stakeholders in general. The clarity of the duties and functions of each of them, is expected to encourage the effectiveness and performance of the Board of Commissioners and Board of Directors.

Legal Case and Administrative Sanction

During this Annual Report period, the Company and Subsidiaries did not experience any civil or criminal legal issues that would impact the Company’s sustainability. There were no litigation cases encountered by members of the Board of Commissioners and Board of Directors that are currently active.

No administrative sanctions were imposed on the Company, the Board of Commissioners and the Board of Directors, by the capital market authority or other authorities.

Whistleblowing System

The policy on violation reporting (Whistleblowing System) provides opportunities and protections to employees and third parties to report with good intentions to the management, in the event they find out an existence of fraud, corruption or inappropriate practices or violations in the Company, and in order to prevent the management from taking actions that might harm the employees. At present, Management is still reviewing the possibility to implement the system within the Company’s organization.