Internal Audit Unit

The Company has established an Internal Audit Unit as required by Regulation No.IX.I.7, Attachment to the Decree of the Chairman of the Capital Market Supervisory Agency and Financial Institution No.Kep-496/BL/2008 dated on November 28, 2008 on the Establishment and Guidelines for Internal Audit Charter. The Internal Audit Unit is independent and has the task of providing and objective assurance and consulting activities with the aim of providing added value and improvements to the Company’s operations, through a systematic and consistent approach, by evaluating and improving the effectiveness of internal control systems, risk management, and the GCG process of the Company and its business units.

Mr. Harangan Pokki Pangaribuan was appointed as Head of the Company’s Internal Audit Unit. His appointment was based on the Resolution Letter of the Board of Directors No. 021/ IP-GGOD/MCOM/XI/2015. It was reported to the Executive Head of the Capital Market Supervisor of Financial Authority Services (OJK) based on letter No. 100-OJK/MNC-CS/INT/XII/2015 dated December 4, 2015.

Mr. Harangan Pokki Pangaribuan, Indonesia citizen born in 1980, joined the Company on July 23, 2014 and served as Head of Fraud and Prevention at PT Global Mediacom Tbk until May 31, 2015. He then acted as Head of MNC TV and Coordinator of Non 3 TV from June 1 to November 20, 2015. He has been heading MNC Tbk. since November 23, 2015. Mr. Pangaribuan’s impressive career path includes working stints in Public Accounting Firm Ernst & Young Indonesia as External Auditor for Audit Assurance Buisness Services (AABS) from October 2003 to 2006 and as Forensic Auditor in the Fraud Investigation & Dispute Services (FIDS) in Ernst & Young Indonesia.

Mr. Pangaribuan earned a Bachelor‘s degree in Economics and Accounting from Padjadjaran University specializing in Accountancy. He is a Certified Fraud Examiner (CFE).

Structure and Positioning of the Internal Audit Unit
The structure of the Internal Audit Unit is as follows:
• The Internal Audit Unit is headed by the Head of Internal Audit/Chief Audit Executive (CAE)
• The CAE is appointed and dismissed by the President Director with the approval of the Board of Commissioners.
• The CAE is accountable to the President Director and administratively, to the Director of Group Governance & Organization Development.

Duties and Responsibilities of the Internal Audit Unit
In accordance with the Company’s Internal Audit Unit Charter, the duties and responsibilities of the Internal Audit Unit are as follows:
• To develop and implement the annual internal audit plan.
• To test and evaluate implementation of the internal control system and risk management in accordance with the Company’s policies.
• To inspect and assess the efficiency and effectiveness of finance, accounting, operations, human resoures, marketing, information technology and other related activities.
• To verify compliance with associated rules and regulations.
• To recommend improvements and provide objective information to all management levels regarding the activities under audit.
• To prepare reports on the audit results and submit those to the President Director and Board of Commissioners.
• To monitor, analyse and report on the follow-up actions taken on improvements recommended.
• To collaborate with and support the Audit Committee in performing its duties.
• To develop programs to evaluate the quality of the Internal Audit.
• To conduct special investigations when necessary.

Implementation Activity of the Internal Audit
Auditing tasks are conducted using the risk based audit, firmly conforming to the professional code of ethics, based on the International Standards for the Professional Practices of Internal Auditing published by The Institute of Internal Auditors, which cover, amongst others, integrity, objectivity, confidentiality and competency.

In 2015, the Internal Audit Unit conducted audits as outlined in the year’s assessment plan, covering all business units. The number of assignments conducted totalled to 40 audits, including operational inspection (40%), financial inspections (23%) and projects (37%).

To support the required coordination between the business units and the Company, as a holding company, aside from supervising the auditing assignments, the Internal Audit Unit regularly conducted monthly meetings to discuss the process across all business units, as well as monthly meetings with the Board of Directors and quarterly meetings with the Audit Committee.

The examination results, including recommendations for improvement, were reported to the Boards of Commissioners and Directors during the quarterly meetings. Supervision based on recommendations relating to the findings of the Internal Audit Unit is conducted regularly to ensure their improvement over the previous findings.