Internal Audit

In order to ensure that the management and operations of the Company are in accordance with the prevailing laws and regulations and in line with the Company’s efforts to increase the value of internal governance, an Internal Audit Unit was formed in accordance with POJK 56 / 2015.

INTERNAL AUDIT CHARTER

PT ESSA INDUSTRIES INDONESIA TBK

 

Introduction

This Internal Audit Charter serves as a guideline for the Internal Audit function of PT ESSA Industries Indonesia Tbk. (the “Company”) in carrying out its duties and responsibilities. This Charter defines the authority, responsibilities, and scope of work of the Internal Audit Department.

The Internal Audit function supports the implementation of Good Corporate Governance by providing independent and objective assurance and consulting activities designed to add value and improve the Company’s operations. Internal Audit assists the Company in achieving its objectives through a systematic approach in evaluating and improving the effectiveness of risk management, internal control, governance processes, and operational efficiency.

This Charter is prepared in accordance with applicable laws and regulations, particularly OJK Regulation No. 56/POJK.04/2015.

 

CHAPTER I

GENERAL PROVISIONS

A. Definition

  1. Financial Services Authority (OJK) is the authority responsible for regulating and supervising the financial services sector in Indonesia.
  2. Board of Directors is the corporate organ authorized and responsible for managing the Company.
  3. Board of Commissioners is the corporate organ responsible for supervising and providing advice to the Board of Directors.
  4. Audit Committee is a committee formed by and responsible to the Board of Commissioners to assist in carrying out supervisory duties.
  5. Internal Audit Department is the work unit responsible for performing the internal audit function within the Company.
  6. Internal Audit Head is the person responsible for leading and managing the Internal Audit Department.
  7. Internal Auditor is a person assigned to perform audit activities within the Internal Audit Department.
  8. Auditee is any unit, function, department, or activity within the Company subject to internal audit.

B. Purpose

The objectives of this Internal Audit Charter are:

  1. To establish a clear framework for the authority, responsibilities, and scope of the Internal Audit function.
  2. To support the implementation of Good Corporate Governance within the Company.
  3. To ensure the Internal Audit function operates independently and objectively.
  4. To provide assurance and consulting services to improve risk management, internal control, governance processes, and operational efficiency.

C. Legal Framework

This Charter is established based on:

  • OJK Regulation No. 56/POJK.04/2015
  • Other applicable capital market regulations and prevailing laws and regulations.

CHAPTER II

STRUCTURE AND POSITION OF INTERNAL AUDIT

  1. The Internal Audit Department is established to support effective internal control and risk management within the Company.
  2. The Internal Audit Department is led by the Internal Audit Head.
  3. The Internal Audit Head is appointed and dismissed by the President Director with the approval of the Board of Commissioners.
  4. The Internal Audit Head reports directly to the President Director and functionally to the Board of Commissioners through the Audit Committee.
  5. Internal Auditors report to the Internal Audit Head.

CHAPTER III

AUTHORITY OF INTERNAL AUDIT

The Internal Audit Department has the authority to:

  1. Access all functions, activities, records, data, information, systems, assets, and employees relevant to the performance of its duties.
  2. Communicate directly with the Board of Directors, Board of Commissioners, and Audit Committee.
  3. Determine audit scope, frequency, and methodologies.
  4. Allocate resources and apply audit techniques necessary to achieve audit objectives.
  5. Obtain assistance from relevant employees and external experts where necessary.

 

CHAPTER IV

DUTIES AND RESPONSIBILITIES

The Internal Audit Department is responsible for:

  1. Preparing an annual risk-based internal audit plan.
  2. Conducting independent and objective internal audits across all Company activities.
  3. Evaluating the effectiveness of internal control, risk management, and governance processes.
  4. Identifying weaknesses and providing practical and strategic recommendations.
  5. Monitoring and following up on the implementation of corrective actions.
  6. Reporting audit results to the President Director and Audit Committee.
  7. Ensuring compliance with applicable laws, regulations, and Company policies.
  8. Conducting special audits when required by management.
  9. Providing limited advisory services without impairing independence.

CHAPTER V

REQUIREMENTS FOR INTERNAL AUDITOR

Internal Audit Head and Internal Auditors must:

  1. Demonstrate integrity, independence, and professionalism.
  2. Have sufficient knowledge and experience in auditing and relevant regulations.
  3. Communicate effectively and maintain good relationships with stakeholders.
  4. Comply with professional standards issued by the Institute of Internal Auditors.
  5. Maintain confidentiality of Company information.
  6. Apply professional skepticism in conducting audit activities.
  7. Continuously improve knowledge, skills, and professional competence.

CHAPTER VI

CODE OF CONDUCT

The Internal Audit Department shall adhere to the Code of Ethics and Global Internal Audit Standards issued by the Institute of Internal Auditors.

 

CHAPTER VII

INDEPENDENCE AND OBJECTIVITY

 

  1. The Internal Audit function must remain independent from operational activities.
  2. Internal auditors shall perform their duties objectively and without interference.
  3. Any impairment to independence or objectivity must be disclosed to the President Director and/or Audit Committee.
  4. Internal Audit shall not have operational responsibility over audited activities.
  5. Internal Audit shall not initiate or approve transactions outside its function.

 

CHAPTER VIII

CLOSING PROVISIONS

This Internal Audit Charter shall be evaluated and updated periodically to align with regulatory developments and the Company’s needs.

Jakarta, 1 February 2026

Board of Directors
PT ESSA Industries Indonesia Tbk