Internal Control System and Risk Management

Internal Control System

Internal Control System aims to improve effectiveness and efficiency of operations, eligibility for financial reporting, and compliance with applicable regulations for publicly held companies in Indonesia, Financial Service Authority (OJK) and Company policies.

Internal control system shall be implemented with the following activities:

  1. Formalization of the Company’s policies and procedures by Group Corporate Policy Division (GCP), for reviewing and approving based on the level of stipulated authorization. The Company’s policies and procedures are grouped into five categories: sales and marketing, finance, operations, governance, and general affairs (GA).
  2. Policy renewal procedures for revision and improvements of existing processes, both related to the Company’s financial and operational processes, are integrated into one synergy process.
  3. Socialization of policies and procedures shall be done via Intranet and Web networks.
  4. Formalization of the Company’s code of conduct, which includes the implementation of values, ethics and employees’ integrity, can be accessed by all employees via the Company’s Intranet (portal).
  5. The use of integrated computer programs in financial and operational transactions (sales, programming and human resources).
  6. Separation of functions based on duties, responsibilities and authority in the organizational structure of the Company and its business units.
  7. Supervision by their respective superiors on every task and responsibility.

 

Risk Management System

The Commitment of Risk Management
The Company consistently implements the risk management system in every operational and non-operational activities. The implementation of risk management shall be of concern to everyone in all organization levels in the Company. The purpose of the implementation of the company’s risk management system is to evaluate the effectiveness of the internal environment, goal setting, identification of activities, risk assessment, risk management, control, information and communication activities, as well as supervising activities.

Risk Management System Implemented by the Company
The Company follows a comprehensive risk management system integrated with the strategic planning process and the Company’s business activities. The Company’s risk management shall be implemented in all management levels according to respective roles and functions.

  1. GCP (Group Corporate Policy), serves as the risk management outlined in the form of policies and procedures.
  2. Internal Control serves as the internal control risk management.
  3. Internal Audit evaluates the risk management system, internal control and management information systems.
  4. IT Audit ensures control over the system used by the Company.
  5. CCSA (Compliance and Control Self Assessment) evaluates the risk management system, internal control and devices used in management information systems.
  6. MARS (Management Awareness Reporting System) serves as the risk management to identify, report and resolve problems faced by the Company and business units.

 

Main Risks Faced by the Company
Strategies in the risk management are implemented by sharing, avoiding and reducing risks through internal control system, or by retaining the existing risks. The main risks faced by the Company are generally divided into two categories:

EXTERNAL RISKS

  • Risks due to compliance with regulations issued by the Company or other authorities.
  • Risks due to changes in customer/viewer orientations.
  • Risks due to the development of technology.
  • Risks due to new competitors.
  • Risks due to customer complaints/dissatisfaction.


INTERNAL RISKS

  • Risks due to processing errors.
  • Risks due to poor asset management.
  • Risks due to system error or misuse.
  • Risks due to production failures.
  • Risks due to failure or poor distribution of production to consumers.

 

The Company′s Implementation of Risk Mitigation
In 2017, the risk management system was effectively implemented through the following risk mitigations:

EXTERNAL RISKS

  • Complied with changes in the goverment′s existing regulations or with new rules and regulations both in media industry and taxation.
  • Monitored market trends by evaluating programs based on Nielsen′s TV rating research.
  • Achieved efficiency by improving the process, as well as supported the implementation and business transformation projects by reducing risks to ensure the governance process and reduction of errors in manual data.

 

INTERNAL RISKS

  • Maintained the quality and sustainability of the Company′s daily operations through:
    • Developing centralized policies to maintain procedures′ consistency and uniformity in every business process for all business units of the Company.
    • Implementing the decision-making process based on matrix approval, approved by the Company′s management.
    • Coordinating among business units in developing and managing HR.
    • Risk-based audit process.
    • Improvement of monitoring business unit related with compliance in operational activities.
    • Developing policy management systems and procedures via Intranet and Web networks.
  • Achieved efficiency by improving the processes, and supported the implementation and business transformation projects through:
    • Improving working process and controlling process done by centralized system.
    • Eliminating manual work implementation and improving automation to speed up processes through an integrated system.
    • Preparing for acurate development plans and providing recommendations for repetitive business issues.
    • Improving efficiency and working quality by integrating similar labor among different units.