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The Company's internal control system encompasses all policies and procedures in every financial and operational function, aimed at safeguarding corporate assets through reliable financial reporting and information, compliance with relevant regulations, and the efficient and effective conduct of operational activities.
The internal control system involves all governance bodies of the Company, including the Board of Commissioners, Audit Committee, Board of Directors, and the entire management team, adhering to the principles of the Internal Control Framework. These principles are control environment, risk assessment, control activities, information and communication, and monitoring. Consequently, the implementation of the Company's internal control system aligns with the framework established by The Committee of Sponsoring Organizations of the Treadway Commission (COSO)."
The execution of internal controls is under the supervision of the Audit Committee. This system serves as a benchmark for the implementation of GCG principles, focusing on three aspects: financial, operational, and the reliability of reporting and information.
Internal control in the financial aspect can be monitored through the timely, transparent, accountable presentation of the Company's financial information, in accordance with applicable accounting standards. In the operational aspect, internal control aims to achieve efficiency and effectiveness in implementing relevant laws and regulations.
The effectivity of the internal control system is inseparable from the Company management's efforts in risk management, human resource management, information and communication systems, and monitoring and evaluation of the internal control system at every level and unit of the organization.
Financial and Operational Controls are carried out through function separation to reduce errors, fraud, and waste. This ensures that no single individual is allowed to control all major aspects of events and transactions from start to finish.
Every transaction requires authorization from designated personnel to guarantee that only legitimate events and transactions proceed, aligning with the directives of the Board of Directors and/or established regulations.
The Company regularly evaluates the adequacy and effectiveness of internal controls in both financial and operational aspects. The Audit Committee coordinates with the Internal Audit Unit in reviewing the design and implementation of procedures and policies to ensure the effectiveness of the internal control system across all business lines.
In 2023, it was generally concluded that no significant weaknesses were found in the implementation of the Internal Control System within the Company that could affect operational performance or the overall presentation of financial statements.
Based on the Audit Committee's evaluation, the Board of Commissioners believes that the Company's internal control system has been adequately implemented. This implementation spans from the Code of Conduct to policies, Standard Operating Procedures (SOPs), and Work Instructions, all synergized with the application of Key Performance Indicator (KPI) assessments. KPIs serve as a tool for management to ensure that all operational activities of the Company are integrated to achieve the established targets.