Internal Control Systems
The Company’s Internal Control System aims to improve the effectiveness and efficiency of operations, eligibility for financial reporting, compliance with applicable laws and regulations, and established management policies. In day- to-day activities, the Internal Control System is intended to safeguard the Company’s assets and to ensure the accuracy of the Company data, which is a key source of information used in decision-making. The Internal Control System is realized through the formalization of policies and procedures of the Group Corporate Policy Division (GCP), which is conducted through review and approval up to a predetermined level of authorization. The Company’s policies and procedures are grouped into five (5) categories, namely financial, operational, production, and program, sales and marketing, and human resources.
The Internal Control System is implemented through several steps within the Company, these are as follows:
• The practice of values, ethics and integrity among employees are formalized in the code of conduct, which can be accessed by all employees via Intranet (portal) of the Company.
• The use of computer programs intergrated in financial and operational transactions (sales, programming and human resources).
• The practice of supervisory functions by superiors of respective units.
• The practice of separating functions between the maker, checker and approving body in accordance with duties, responsibilities and authority within the Company’s organizational structure and business units.
The Board of Directors evaluates the effectiveness of internal controls through the Internal Audit Unit and the External Auditor.
The Company started the Compliance & Control Self Assessment (CCSA) project at the end of 2015, in an effort to enhance internal control and development of the business and operational activities of the Group. Upon the project’s full implementation, each Business Unit is expected to assist the Group in anticipating risks, especially those that can have a material impact on the Company.
Risk Management System
The Company’s risk management system is designed to evaluate the effectiveness of the internal environment, goal setting, identification of activities, risk assessment, risk management, control activities, information and communication, as well as surveillance.
Strategies applied in risk management aim to share risk, avoid risk, reduce the level of risk through a system of internal control, or accept risks. The main risks faced by the Company can be grouped into two general categories:
• Compliance with laws and regulations: Risk due to changes in policies and regulations issued by the Company, the Government, as well as other authorities.
• Changes in customer orientation: risk due to changes in customer orientation or viewers.
• The development of technology and new competitors: the risk of technology and new competitors.
• Customer complaints: risks from complaints or customer dissatisfaction.
• Error process: risk due to processing errors.
• Failure to protect assets: risk due to weaknesses in asset management.
• Failure of production: The risk of error or abuse of the system and the failure of production.
• Low Distribution: The risk of failure or poor distribution of production to consumers.
During 2015, the risk management system was effective in conducting several preventions, including:
• Complying with changes in law and new laws and regulations set by the government both in the media industry as well as taxation.
• Monitoring the market’s appetite by evaluating programs based on TV ratings research from the Nielsen company.
• Maintaining the quality and sustainability of the daily operations of the Company to perform:
o Preparation of a centralized policy to maintain consistency and uniformity of procedure and business processes across all business units of the Company.
o The decision-making process based on the matrix approval that is known by the Management of the Company, and coordination between each business unit in the development and regulation of human resources - the risk-based audit process.
o Enhancement in monitoring each business units’ compliance in operational activities the development of policies and procedures management systems via Intranet and Web networks.
• Increasing efficiency through process improvement, as well as supporting the implementation and business transformation projects through:
o Improved work and control processes through a centrally executed system.
o Elimination of manual work implementation and improved automation to speed up processes through an integrated system.
o Reducing risk by ensuring that governance process is performed correctly and inaccuracies or errors in manual data are reduced.
o Preparing accurate development plans and recommending repeat of successful business practice.
o Improving the efficiency and quality of work by supporting the integration of related labor in different units.