INTERNAL AUDIT

In running its business, PT Nanotech Indonesia Global Tbk has determined itself to be able to grow and develop continuously, thus requiring an improvement in the management control system to support the supervision of the implementation of internal control. For this reason, the Board of Directors has established an Internal Audit Division. To facilitate the tasks carried out, this charter was made to describe the duties and authorities of the Internal Audit.

MISSION AND SCOPE
Internal Audit is an activity of providing assurance and consulting that is independent and objective, with the aim of increasing value and improving company operations, through a systematic approach, by evaluating and improving the effectiveness of risk management, control and corporate governance processes. The mission of the Internal Audit Division is to provide independent, objective assurance and consulting services, aimed at providing added value and improving company operations.

The scope of work of the Internal Audit Division is to determine whether the relationship between risk management, control and governance processes of the company is in accordance with the design and can be presented by management.

STRUCTURE AND POSITION

  • Internal Audit Unit Division consists of 1 (one) internal audit or more.
  • The Internal Audit Unit referred to is led by a head of the Internal Audit Unit.
  • In the event that the Internal Audit Unit consists of 1 (one) internal audit person, the said internal auditor also acts as the head of the Internal Audit Unit.
  • The Head of the Internal Audit Unit is appointed and dismissed by the President Director with the approval of the Board of Commissioners.
  • The President Director may dismiss the Head of the Internal Audit Unit, after obtaining approval from the Board of Commissioners, if the Head of the Internal Audit Unit does not meet the requirements as an Internal Audit Unit auditor as stipulated in this Charter and or fails or is incompetent to carry out his duties.
  • Every appointment, termination or dismissal of the Head of the Internal Audit Unit must be notified by the head of the Financial Services Authority.

DUTIES AND RESPONSIBILITIES

  • Develop and implement the annual Internal Audit plan;
  • Testing and evaluating the implementation of internal control and risk management systems in accordance with company policies;
  • Conduct inspections and assessments of efficiency and effectiveness in the fields of finance, accounting, operations, human resources, marketing, information technology and other activities;
  • Provide suggestions for improvement and objective information on the audited activities at all levels of management;
  • Make a report on audit results and submit the report to the President Director and the Board of Commissioners;
  • Monitor, analyze and report on the implementation of the recommended follow-up improvements;
  • Cooperate with the Audit Committee;
  • Develop a program to evaluate the quality of the internal audit activities it carries out; and
  • Carry out special inspections if necessary.

AUTHORITY AND SCOPE OF THE INTERNAL AUDIT UNIT The authority of the Internal Audit Unit is as follows:

  • access all relevant information about the company related to its duties and functions;
  • communicate directly with the Board of Directors, Board of Commissioners, and/or the Audit Committee;
  • holding regular and incidental meetings with the Board of Directors, the Board of Commissioners, and/or the Audit Committee;
  • coordinate its activities with the activities of external auditors; and
  • request or obtain assistance from internal employees of the company or from parties outside the company if necessary, in the context of carrying out their duties;

The scope of work of the Internal Audit Unit is as follows:

  • Ensuring that the internal control system is adequate, works efficiently and economically and functions effectively in achieving the desired goals and objectives;
  • Evaluating compliance with applicable laws and regulations and company policies and procedures as well as recommendations for improvements to them;
  • Evaluating the reliability/reliability and integrity of financial information and operational information;
  • Assessing the adequacy of facilities to safeguard and protect the company’s assets;
  • Carry out special assignments from the Board of Directors and/or Commissioners and/or the Audit Committee that are relevant to the scope of work mentioned above, such as investigation and disclosure of irregularities, fraud and waste;
  • Prepare assurance reports and recommendations for improvement; and
  • Identify any potential cost savings and make recommendations in an effort to improve the creation of cost efficiency.

CODE OF ETHICS
Each internal auditor must follow the established code of ethics. The code of ethics refers to the code of ethics of the Association of Internal Auditors. Internal auditors are expected to apply and enforce the following principles:

  1. Integrity
    The integrity of internal auditors builds trust and thus provides the basis on which to base their judgments.
  2. Objectivity
    Internal auditors demonstrate the highest level of professional objectivity in gathering, evaluating, and communicating information about the activity or process being examined. Internal auditors make a balanced assessment of all relevant circumstances and are not influenced by their own interests or those of others in making the assessment.
  3. Confidentiality
    Internal auditors respect the value and ownership of the information they receive and do not disclose information without permission unless there is a statutory requirement or a professional obligation to do so.
  4. Competence
    Internal auditors apply the knowledge, skills, and experience needed in the implementation of internal audit services.

Internal auditors apply the knowledge, skills, and experience needed in the implementation of internal audit services. In an effort to achieve the objectives of the Internal Audit, the Internal Audit Unit must comply with and comply with the Internal Audit Unit Standards/Code of Ethics, including the following:

  • The Internal Audit Unit must demonstrate honesty, objectivity and sincerity in carrying out its duties and fulfilling its professional responsibilities;
  • The Internal Audit Unit must demonstrate loyalty to its organization or to the parties it serves. However, the Internal Audit Unit may not be consciously involved in activities that deviate or violate the law;
  • The Internal Audit Unit must not knowingly engage in actions or activities that may discriminate against the internal audit profession or discriminate against the organization. The Internal Audit Unit must refrain from activities that may conflict with the interests of the organization; or activities that may create prejudice, which doubts their ability to carry out their duties and fulfill their professional responsibilities objectively;
  • The Internal Audit Unit must not accept anything in any form from its employees, clients, customers, suppliers, or business partners, which can or is reasonably suspected to influence its professional judgment. The Internal Audit Unit only performs services that can be completed by using its professional competence;
  • The Internal Audit Unit must make various efforts so that it always meets the Internal Audit Professional Standards;
  • The Internal Audit Unit must be careful and prudent in using the information obtained in carrying out its duties; and
  • The Internal Audit Unit may not use confidential information:
    1. For personal gain
    2. In violation of the law, or
    3. Which can cause harm to the organization
  • In reporting the results of its work, the Internal Audit Unit must disclose all undisclosed facts that can:
    1. Distort reports on the activity being reviewed, or
    2. Covering up any unlawful practices; and
    3. The Internal Audit Unit must continuously improve its competence as well as the effectiveness and quality of its duties. The Internal Audit Unit is required to follow an independent professional on an ongoing basis.

INDEPENDENCE
The activities of the Internal Audit Division must be independent, and the internal auditors must be objective in carrying out their work. The activities of the Internal Audit Division must be free from restrictions in determining the scope of Internal Audit, implementing activities and communicating audit results. Auditors and executives who sit in the Internal Audit Unit are prohibited from having concurrent duties and positions from the implementation of the company’s operational activities, either in the Issuer or Public Company or its subsidiaries.

AUDITOR REQUIREMENTS

  • Have integrity and professional, independent, honest and objective behavior in carrying out their duties;
  • Have knowledge and experience regarding technical auditing and other disciplines relevant to their field of work;
  • Have knowledge of the laws and regulations in the capital market and other related laws and regulations;
  • Have the skills to interact and communicate both verbally and in writing effectively;
  • Must meet the professional standards issued by the Internal Audit association;
  • Must comply with the Internal Audit code of ethics;
  • Obliged to maintain the confidentiality of company information and/or data related to the implementation of Internal Audit duties and responsibilities unless required by laws and regulations or court decisions/decisions;
  • Understand the principles of good corporate governance and risk management; and
  • Willing to continuously improve their knowledge, skills and professional abilities;

PROHIBITION FOR INTERNAL UNITS
Prohibition of concurrent duties and positions of auditors and executives who sit in the Internal Audit Unit are prohibited from holding concurrent positions as the implementation of the company’s operational activities both within the Company and in Subsidiaries.

KEREGULATOR REPORT
The appointment, replacement, or dismissal of the head of the Internal Audit Unit is immediately notified to the Financial Services Authority.

CHANGES TO THE CHARTER
Amendments to the Internal Audit Charter are determined by the Board of Directors after obtaining approval from the Board of Commissioners. Hereby the Board of Directors with the approval of the Company’s Board of Commissioners, determines the use of the Company’s Audit Charter as a work reference for the Internal Audit Unit and instructs all Division Leaders and Employees to cooperate with the Internal Audit Unit in order to realize the points contained in the Company’s Audit Charter. This Company Audit Charter is effective as of the date of the signing of this Audit Charter.

EnglishIndonesia