Good Corporate Governance Report 2014 ENG

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Laporan

Tahunan 2014

Annual R

epor

t

T

OGETHER T

O

W

ARDS

SUST

AINAB

LE GR

O

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In accordance with the regulation of Financial Services Authority ("OJK") regarding

Implementation of Good Corporate Governance Report (“GCG”) as stipulated in

Bank Indonesia ("BI") regulation No. 8/4 / PBI / 2006 dated January 30, 2006 as

amended by BI Regulation No. 8/14 / PBI / 2006 dated October 5, 2006 and BI

Circular Letter No. 15/15 / DPNP dated April 29, 2013, ("OJK Regulation on GCG" or

"OJK Rules") with this we submit the PT Bank Sumitomo Mitsui Indonesia ("SMBCI")

Implementation of Good Corporate Governance report for the position year 2014.

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.

I. The Highlight of GCG Implementation in 2014 ………. 5

II. Commitment to Good Corporate Governance ……… 6

III. Ultimate Shareholders & Controlling Shareholders ……… 7

IV. Decision and General Meeting of Shareholders ………. 9

V. Implementation of Tasks and Responsibilities by the BOC and BOD ………. 13

VI. Completeness and Implementation of the Tasks of the Committees and the Work Unit Performing Bank Internal Audit Function ……….………. 34

VII. Performance of Compliance, Internal Auditor and External Auditor Functions……… 60

Daftar

Isi

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B. Remuneration Package/Policy and Other

Facilities for Board of Commissioner and Board of Director Members……… …. 71

C.

Shares Option……….73

F.

Ratio of the Highest Salary to the Lowest Salary……….………. 73

G.

Number of Internal Fraud…….……….… 73

H.

Number of Litigation Cases………....………. 74

G.

Transactions Containing Conflict of

Interest……...………….………. 75

I. Buy Back of Bank’s Shares and/or

Bonds…. ……….……… 75

J.

Provision of Funds for Social Activities and Political Activities during the Reporting.. …75

K.

Self Assessment of Good Corporate

Governance Implementation of SMBCI

.………..…… ………75

IX.

Provision of Funds to Related Parties and Provision of Funds in Large Amount (Large Exposures)……….. 69

X.

The Bank’s Strategic Plan………... 69

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“

The independence of SMBCI as a separate entity from SMBC as

controlling shareholder has always been a major concern. This is

quite a challenge for SMBCI in order to continuously improve the

implementation of Corporate Governance from year to year.

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The Highlight of GCG Implementation in 2014

As a bank owned by SMBC up to 98.48%, the independence of SMBCI as a separate entity from SMBC as controlling shareholder has always been a major concern. This is quite a challenge for SMBCI in order to continuously improve the implementation of Corporate Governance from year to year.

The Improved implementation of Corporate Governance for 2014 among others by improving the flow of credit approval which better reflects the independence of SMBCI. This improvement will be followed by the restructuring plan of internal organizational in 2015.

Other matters related to corporate governance are analyzing the duties and responsibilities of the Nomination and Remuneration Committee primarily related to the remuneration policy for executive officers both Indonesian citizens and foreigners. Furthermore, in line with OJK plans to implement the recommendations of the Financial Stability Board in terms of the sound governance of compensation or remuneration, the Nomination and Remuneration Committee will need to review the guidelines of its duties and responsibilities in 2015.

Other improvements in the field of corporate governance which conducted by SMBCI is preparing guidelines for the Manual Induction Program for the new members of the Board of Commissioners (“BOC”) and/or Board or Directors (“BOD”) of SMBCI. This Manual is intended for members of the BOC and / or BOD to understand their duties and responsibilities in accordance with the prevailing laws and regulations.

At the end of 2014, the Bank began to conduct a review and refinement of the charter for committees at the level of the BOD and at the level of the BOC; These charters are expected to be completed at the beginning of the first semester 2015.

II. Commitment to Good Corporate Governance

SMBCI is committed to implementing GCG in a consistent and sustainable manner. This has become an integral part of the Bank’s business practice in order to maintain its going concern. GCG has become a basis in building the trust that the Bank is managed and controlled in a proper manner for the best interest of the stakeholders and in improving compliance with prevailing laws and regulations in the banking industry.

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No. 8/4/PBI/2006 dated 30 January 2006, as well as its amendment PBI No. 8/14/PBI/2006 dated 5 October 2006 and Bank Indonesia Circular Letter No. 15/15/DPNP dated 29 April 2013, SMBCI prepare the GCG Implementation Report for the year 2014 which inculde as follows:

1. The Right and Obligation as well as the General Meeting of Shareholders; 2. Structure, Composition, Duties and Responsibilities of Board of Commissioners; 3. Structure, Composition, Duties and Responsibilities of Board of Directors;

4. The Implementation of Duties of Committees under Board of Commissioners and Board of Directors;

5. The Implementation of Compliance, Internal Audit and External Audit Functions; 6. The Implementation of Risk Management and Internal Audit System;

7. Provision of Funds of Related Parties and Provision of Large Exposure Funds; 8. Bank’s Strategic Plan;

9. Transparency in the Bank’ Financial and Non Financial Conditions;

10. Remuneration Package/Policy and Other Facilities for BOC and BOD Members; 11. Shares Option;

12. Ratio of the Highest Salary to the Lowest Salary; 13. Number of Internal Fraud;

14. Number of Litigation Case;

15. Transaction containing conflict of interest; 16. Buy Back of Bank’s Shares and/or Bonds;

17. Provision of Funds for Social Activities and Political Activities during the Reporting; and

18. Self Assesment of GCG Implementation of SMBCI.

III. Ultimate Shareholders & Controlling Shareholders

All shares issued by SMBCI are registered shares which are issued under name of its owner as registered in the Shareholders Registry. SMBCI only admit 1 person or 1 legal entity as the owner of 1 share, namely person or legal entity whose name is listed in the Shareholders Registry.

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Ultimate Shareholders & Controlling Shareholders

Information on the Ultimate or Controlling Shareholder

A. Sumitomo Finance Mitsui Group

Sumitomo Mitsui Financial Group (“SMFG”) was established through a share transfer from Sumitomo Mitsui Banking Corporation in December 2002. The companies of SMFG offer a diverse range of financial services, centered on banking operations, and including credit card services, leasing, information services, and securities.

SMFG’s follow “Our Mission” below as a universal guide for Group management and position this mission as the anchor for corporate action:

1. To grow and prosper together with our customers, by providing services of greater value to them.

2. To aim to maximize our shareholders' value through the continuous growth of our business.

3. To create a work environment that encourages and rewards diligent and highly-motivated employees.

SMFG

PT Bank Sumitomo Mitsui Indonesia

SMBC

100%

98.48%

PT BCA Tbk

PT BNI (Persero)

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B.Sumitomo Mitsui Banking Corporation

Sumitomo Mitsui Banking Corporation (“SMBC”) was established in April 2001 through the merger of: The Sakura Bank, Limited, and The Sumitomo Bank, Limited. The SMBC is a subsidiary of (“SMFG”) which headquartered and registered in Japan as a leading financial service group in the world.

SMBC’s competitive advantages include a strong customer base, the quick implementation of strategies, and an extensive lineup of financial products and services that leverage the expertise of strategic Group companies in specialized areas. SMBC, as a core member of SMFG, works together with other members of the Group to offer customers highly sophisticated, comprehensive financial services.

IV. Decision and General Meeting of Shareholders

General Meeting Shareholders (“GMS”) has the authority which is not granted to the BOD or BOC, within the limitation as stipulated on the Law No.40 Year 2007 regarding the Limited Liability Companies and the Articles of Associations of SMBCI.

GMS consists of Annual GMS (“AGMS”) and other GMS or oftenly known as Extraordinary GMS (“EGMS”). GMS is the tool for shareholders in implementing its right and authority related to the performance of SMBCI and strategic plan or corporate actions of SMBCI. The resolutions of AGMS and EGMS are made in a transparent manner with due regard to the interests of SMBCI's business.

The Shareholders may also adopt binding resolution without convening GMS provided that all shareholders with affirmative vote give their approval in writing by signing the relevant proposal (“The Shareholders Circular Resolution”).

A. AGMS

In 2014, SMBCI held 1 (one) AGMS on 20 May 2014 in SMBCI’s Office, Summitmas II, 11th Floor, Jl. Jend. Sudirman Kav. 61-62 Jakarta 12190, with the resolutions as follows:

Agenda 1

a. To approve the Annual Report of the SMBCI for the Financial Year of 2013 including the supervisory task Report of BOC;

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Decision and General Meeting of Shareholders

Public Accountants Firm SIDDHARTA & WIDJAJA, the member firm of KPMG, as stated in its report number L.13 - 3556- 14/III.26.003 dated 26 March 2014.

c. By the approval of the Annual Report and the ratification of the Annual Account above stated, it gives a complete acquittal and discharge to all members of BOD and BOC of the Company for all actions taken by them in management and supervision of SMBCI during the Financial Year 2013 as far as such management and supervision actions were reflected in the said Annual Report and Annual Account of SMBCI and in compliance with prevailing regulations.

Agenda 2

To approve the appropriation of the Net Profit of SMBCI for the Financial Year of 2013 in the total amount Rp665,933,000,000 (Six Hundred Sixty Five Billion Nine Hundred Thirty Three Million Rupiah), to be allocated as follows:

(1) Cash Dividend

The amount of Rp. 66,593,000,000 (Sixty Six Billion Five Hundred Ninety Three Million Rupiah) shall be distributed to the Shareholders as listed in the Company’s Register Book of Shareholders as cash dividend. The distribution to each Shareholder based on its shares portion in SMBCI is as follows:

(a) Sumitomo Mitsui Banking Corporation Rp65,579,000,000

(b) PT Bank Central Asia Tbk. Rp 666,000,000

(c) PT Bank Negara Indonesia (Persero) Tbk Rp 348,000,000

and to authorize the BOD to determine the procedures and time of payment of the distributed dividend mentioned above.

(2) Reserved Fund

The amount of Rp. 10,000,000,000 (Ten Billion Rupiah) shall be set aside/booked as legal reserved fund.

(3) The remaining Net Profit of the Financial Year of 2013 is in the amount of Rp. 589,340,000,000 (Five Hundred Eighty Nine Billion Three Hundred Forty Million Rupiah) shall be booked as retained earnings.

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retained earnings of the previous year of Rp. 2,123,195,000,000 (TwoTrillion One Hundred Twenty Three Billion One Hundred Ninety Five Million Rupiah), the unappropriated retained earnings brought forward to the year of 2014 shall be totaling to Rp. 2,712,535,000,000 (Two Trillion Seven Hundred Twelve Billion Five Hundred Thirty Five Million Rupiah).

Agenda 3

To ratify and approve the Annual Budget of SMBCI for the Financial Year 2014 as stated in the Company’s Business Plan 2014-2016 amounting to Rp. 655,613,000,000 (Six Hundred Fifty Five Billion Six Hundred Thirteen Million Rupiah) as Net Income after current income tax”.

Agenda 4

(i)

To appoint “Siddharta & Widjaja”, the member firm of KPMG, for the third year of service, as public accountant of SMBCI, to audit the Balance Sheet and Profit & Loss Statement for the Financial Year 2014, and further to authorize the BOD to determine the remuneration of the public accountant concerned;

(ii)

To authorize the BOD to select, replace and appoint any other public accountant if the appointed Public Accountant for whatsoever reason, is unable to complete its appointment, according to the opinion of the BOD with due regard to recommendation of the Audit Committee and the approval of BOC; and

To authorize the BOD to determine the remuneration of the public accountant concerned”

Agenda 5 & 6

a. Discharge of Mr. Shoichi Yamashiro as Director;

b.Discharge of Mrs. Trie Karjati as Director Overseeing Compliance Function. Therefore, the Bank appointed Mr. Bruno Octer Purba as temporary acting of Director Overseeing Compliance Function;

c. Discharge of Mr. Ajar Siswandono as Director;

d.Appointed Mr. Kazuhisa Miyagawa as Deputy President Director based on OJK approval letter number SR-54/D.03/2014 dated 24 April 2014. The effective appointment upon obtaining his working permit from Ministry of Manpower which is on 11 July 2014;

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Decision and General Meeting of Shareholders

f. Appointed Mr. Henoch Munandar as Director based on OJK approval letter number SR-50/D.03/2014 dated 10 April 2014;

g.Assignment and authorization of Mr. Bruno Octer Purba, Director in charge of Risk Management to temporary acting as and perform the duties of Director Overseeing Compliance Function of SMBCI, which will be effective as of the closure of this Meeting until the earlier of (i) the date when the new Director Overseeing Compliance Function is effectively appointed or (ii) the date falling 6 (six) months after the closure of this Meeting;

h.Reappointment of the remaining incumbent members of the BOD of the Company with the term of office as of the closure of this Meeting until the closure of the Annual General Meeting of Shareholders of the Company in 2016; and

i. Reappointment of the incumbent members of the BOC of SMBCI with the term of office as of the closure of this Meeting until the closure of the Annual General Meeting of Shareholders of SMBCI in 2017;

j. Authorization the BOD of SMBCI with the right of substitution to decide the duties and responsibilities of each newly appointed members of the BOD and restate the resolution in this fifth and sixth agenda of the Meeting in a notarial deed in the Indonesian language and to handle and submit all documents and related application, to any government agencies or authorities, including but not limited to the Ministry of Law and Human Rights of the Republic of Indonesia (“MOLHR”) and to the Ministry of Trade (“MOT”), and to take necessary actions in order to carry out the above mentioned purposes in accordance with the Company’s Articles Association, Bank Indonesia regulation and/or Indonesian Financial Services Authority (OJK) regulation.

Agenda 7

To approve that:

(1) The maximum amount of remuneration package to be received by BOC and BOD for year 2014 is as follows:

No. Description 1. Remuneration (salary, bonus, fixed allowance, and end of term

payment and other benefits not in kind)

2 417 7 14.541

2. Other facilities/benefits in kind (housing, transportation, medical insurance, and so on) that *:

a. can be owned b. can not be owned

- - 7 2.650

Total 2 417 7 17.191

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(2) The maximum amount of total remuneration package of year 2014 clasified by salary level is described as follows:

Total Remuneration Received per person in 1 year (cash)

No. of BOC No. of BOD

Above Rp. 2 billion - 5

Between Rp. 1 billion and Rp. 2 billion - 2 Between Rp. 500 million and Rp. 1 billion - -

Below Rp. 500 million 2 -

B. Shareholders Circular Resolution

During 2014, Shareholders’s Circular Resolutions in lieu of resolutions adopted at an Extraordinary General Meeting of Shareholders (“Shareholders Circular Resolution”) were taken to approve the following matters:

1.

Shareholders Circular Resolution dated 11 August 2014 as restated into the Deed No. 15 dated 15 August 2014, drawn up before Ashoya Ratam, S.H. M.Kn., Notary in Administrative City of South Jakarta, which resolved the resignation of Mr. Masaya Hirayama as President Director of SMBCI and appointment of Mr. Kazuhisa Miyagawa as new President Director of SMBCI. The effective date of resignation Mr. Masaya Hirayama as President Director and appointment of Mr. Kazuhisa Miyagawa as the new President Director of the Bank is subject to the issuance of working permit of Mr. Kazuhisa Miyagawa, i.e 26 November 2014;

2.

Shareholders Circular Resolution dated 11 August 2014 as restated into the Deed No. 16 dated 12 September 2014, drawn up before Himawan Sutanto, Sarjana Hukum, as substitute of Ashoya Ratam, S.H. M.Kn., Notary in Administrative City of South Jakarta, which resolved the appointment of Ms. Dini Herdini as new Director overseeing Compliance Function subject to the approval from Otoritas Jasa Keuangan which is on 8 September 2014 and dismissal of Mr. Bruno Octer Purba as Temporary Acting as Director overseeing Compliance Function;

3.

Shareholders Circular Resolution dated 31 December 2014 regarding the issuance of Medium Term Notes I Bank Sumitomo Mitsui Indonesia; and

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V. Implementation of Tasks and Responsibilities by the BOC and BOD

`

Board

of

Commissioners

a.

_Number,

_composition,

_criteria

_and

_independency

Based on the SMBCI’s Articles of Association, BOC is appointed and discharged based on GMS Resolution.

The number of SMBCI BOC members is 4 (four), including the President Commissioner. This BOC number does not exceed the total number of BOD members and has met the provisions of BI/OJK regulation.

Each BOC member of SMBCI possess high integrity, competency, and adequate financial reputation. The appointment of all BOC members of SMBCI has been approved by Bank Indonesia/OJK, and each member has passed the fit and proper test by BI/OJK.

2 (two) from 4 (four) or 50% the BOC members are Independent Commissioners who do not have financial, management, share ownership, and/or family relationships with the fellow members of the BOC, the BOD, and/or the controlling shareholders.

All BOC members have taken and passed the Fit and Proper Test. The detail on the appointment of BOC members as of 31 December 2014 is as follows:

Name Position GMS Date *) Date of

22-7-2010 13-8-2010 2010-2011 2011-2014

19-03-2009 10-6-2009 2009-2011 2011-2014

28-1-2013 21-2-2013 2013-2014 2014-2017

Indonesia

*) Note: GMS date is the date of GMS on the first appointment and its re‐appointment

b.

Tasks

and

responsibilities

of

BOC

Without prejudice to the main roles of BOC as stipulated under the Company’s Articles of Association, the Law on Limited Liability Company and prevailing laws and regulation, BOC has roles and responsibilities as follows:

•

In terms of the implementation of good corporate governance:

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operational activities (credit, treasury, fund mobilization, and other operational activities) of the Company, except:

− Provision of funds to related parties;

− Other matters stipulated in the Company’s Articles of Association or prevailing laws and regulations.

Decision making by the BOC as referred above shall not erase the responsibilities of the BOD in performing the Company management function.

(2) The BOC shall ensure that the BOD follow up audit findings and recommendations from Internal Audit Department (SKAI), external auditor, results of the supervision conducted by Bank Indonesia and/or other regulatory bodies.

(3) BOC shall establish the Committees and evaluate the tasks of the Committee with the following provisions:

a) To establish the committees to support BOC in carrying out its duties and function in an effective way, at minimum as follows:

1. Audit Committee;

2. Risk Monitoring Committee;

3. Remuneration and Nomination Committee;

BOC may establish any other Committees which is deemed necessary.

b) BOC shall have obligation to ensure that the organization structure and membership of each Committee has been composed in compliance with the prevailing regulations. BOC meeting shall determine membership of each Committee with the consideration of the Nomination & Remuneration committee’ recommendation and shall be stipulated into the decision of BOD.

c) BOC shall ensure that each committee has a guidance for their roles and responsibilities as well as ensuring that each Committee has conducted a review of their each manual of roles and responsibilities on a regular basis.

d) BOC shall ensure that the each Committee has executed its roles and responsibilities, by conducting the supervision to Committee’s report which irregularly submitted to BOC Meeting, containing of:

1. Structure, membership, expertise and independency of the member of Committee;

2. Duties and responsibility of Committee

3. Frequency and the resolution of Committee’s meeting 4. Working Plan of Committee and its realization.

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Implementation of Tasks and Responsibilities by the BOC and BOD

e) BOC shall evaluate the performance of each Committee on yearly basis and/or any time as may be required and decided by BOC. The evaluation by BOC shall among others be focused on the following points:

1. Appropriateness of composition and competency of the Committee members to be compared to the Bank’s complexity and business; 2. Effectiveness of implementation of function of the Committee;

3. Benefit of recommendations from Committee as reference for Board of Commissioners’ resolution;

4. Appropriateness of implementation of Committee meetings to internal regulation of the Company;

f) BOC shall also evaluate the performance of each Independent Committee member based on the assessment result made by the Chairman of each Committee. In addition, BOC at its sole discretion shall have the right to decide on the re-appointment or dismissal of the members of Committee including the members from Independent Parties.

(4) BOC shall approve the Business Plan submitted by the BOD and shall also conduct monitoring and evaluation on the implementation of the Company’s Business Plan.

•

In terms of the implementation of risk management, BOC shall at least:

(1)

Approve and evaluate the risk management policy of the Company;

(2)

Evaluate the responsibility of the BOD in implementing the risk management policy;

(3)

Evaluate and decide the request of BOD relating to the transaction which requires approval of BOC;

•

In terms of active supervisory towards the Compliance Function (as defined

in prevailing Bank Indonesia Regulation on Compliance Function) of the Company, the BOC shall:

(1) Evaluate the implementation of the Compliance Function of the Company at least 2 (two) times a year;

(2) Give advices in the frame of improving the quality of the implementation of the Company’s Compliance Function.

Based on the above evaluation, BOC will give advices to the President Director with copy to Compliance Director for the improvement of the quality of the Company’s compliance Function.

•

In terms of the Internal Audit Function of the Company ( “SKAI”), BOC

shall:

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(2) Approve the appointment and discharge of the head of SKAI proposed by BOD;

(3) Evaluate the effectiveness of the implementation of SKAI’s function.

•

In terms of the implementation of risk management in the usage of

Information Technology, the BOC shall conduct an active supervisory as follows:

(1) To give guidance, monitor and evaluate the strategic plan and policy of the Company in connection with the usage of Information Technology;

(2) To evaluate the responsibility of BOD on the implementation of the usage of Information Technology.

•

Give approval for certain policy(ies) of the Company as follows:

(1) Policy on the credit;

(2) Policy and procedure on the implementation of Anti Money Laundering and Combating the Financing of Terrorism;

(3) Policy on the Risk Management; (4) Internal Audit Charter;

(5) Any other policy as may be required by prevailing regulation of Bank Indonesia.

c.

_{Transparency,}

_Financial,

_Management

_and

_Family

_Relationship

_of

_BOC

BOC members do not have family relationship up to the second level with fellow members of BOC and/or BOD as stipulated in the statement letter to be in line with application for BOC members approval and has been updated in December 2014. In addition, Independent Commissioners do not have relationship in financial, management, shareholding and family with other members of the BOC, BOD and/or Controlling Shareholders as stipulated in statement letter as in line with application for approval of BOC members and has been updated in December 2014. This is as illustrated in the table below:

Name

Family Relationship With Financial Relationship With

Commissioners Directors Controlling

Shareholders

Commissio

ners Directors

Controlling Shareholders

Yes No Yes No Yes No Yes No Yes No Yes No

Masayuki Shimura _√ _√ _√ _√ _√ _√

Airo Shibuya √ √ √ √ √ √

RAG Bramono Dwiedjanto √ √ √ √ √ √

Ninik Herlani Masli

Ridhwan √ √ √ √ √ √

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number of shares in the Bank, other banks, non-bank financial institutions and other companies that are placed domestically or internationally.

d.

Concurrent

Offices

BOC members do not have concurrent position as defined in article 7 (1) OJK Regulation on GCG. Two of Commissioners of SMBCI also hold positions in SMBC which are not categorized as concurred positions as refer to the article 7 (2) of OJK Regulation on GCG as stated in the following list as of 31 December 2014:

No Name Position in SMBCI Other Position in SMBC

1 Masayuki Shimura President Commissioner Managing Director - Head of Asia Pacific Division and Head of Emerging Market Business Division

2 Airo Shibuya Vice President Commissioner

General Manager of Emerging Market Business Division

These positions are held by the respected Commisioners with all concerns to their each positions in SMBCI and do not neglect the implementation of their each duties and responsibilities as BOC members.

e.

_BOC

_meeting

_and

_{recommendations}

Pursuant to Article 16.1 of Articles of Association of SMBCI and Guidance and Code of Conduct of the BOC, the Meeting of BOC shall be regularly held at least 4 (four) times a year.

In 2014, BOC convened 5 (five) Meetings that basically consisted of 2 (two) sessions: Coordination Meetings of BOC and BOD, then followed by BOD and BOC Meetings, except the meeting in July 2014 that only had 1 (one) session.

`

Attendance

in

BOC

Meeting

Name Number of

Meetings

Attendance Number

Attendance Percentage Phisically

Attendance Teleconference

Masayuki Shimura 5 - 5 100%

Airo Shibuya 5 1 4 100%

RAG Bramono

Dwiedjanto 5 5 - 100%

Ninik Herlani Masli

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`

The

Agenda

and

Recommendations

of

BOC

Meeting

in

2014

NO. DATE AGENDA RECOMMENDATION

1. 25-Feb-14 ` Review and acceptance on the report of BOD regarding as follows:

− Evaluation on the Realization of Business Plan as of 31 December 2013.

− Discussion on OJK Letter about the Bank’s Business Plan 2014-2016. − Compliance and AML & CFT

Report.

− Follow-Up Action on Recommendation from Commissioners.

− Report of IT Steering Committee. − Others

` Report of Activities of Audit Committee, Risk Monitoring Committee, Remuneration and Nomination Committee and Recommendation from each committee to BOC.

` Evaluation on the Compliance Function during semester II/2013.

` Others.

1. Due to the plan of maternity of the Head of the Internal Audit Department (IAD), to ensure all duties and responsibilities of the Internal Audit Department running smoothly, BOC recommend to the management to appoint an employee to provide support to the Head of Internal Audit Department (IAD) during her current pregnancy and future maternity leave. This employee should be assigned temporary as Caretaker Head of IAD, and the appointment will be ended when she return to work after maternity leave.

2. Referring to:

• The functions of Risk Monitoring Committee as stipulated in the Risk Monitoring Committee Charter, Section II: Purpose and Section V: Roles and Responsibilities,

• The results of regular monthly meetings of Risk Monitoring Committee in the 4th Quarter of 2013.

In regard to the process of banking operation improvement, especially related to the establishment of Garuda Project, Risk Monitoring Committee would like to propose recommendations to the Board of Commissioners, as follows:

• There should be a written commitment from Sponsor (SMBCI Management and SMBC) to accomplish Garuda Project. • Reward for project members in order to

motivate them since the members still do their daily job in addition to the project activity.

2. 24-Jun-14 ` Review and acceptance on the report of BOD regarding as follows

− Evaluation on Realization of Business Plan as of 31 March 2014.

− Revision on Business Plan 2014-2016

− Evaluation on Risk Profile Report as of 31 March 2014.

− Compliance and AML&CFT Report. − Follow-Up Action on

Recommendation from Commissioners Report of IT Steering Committee.

` Related to Internal Audit:

1. To review the annual Internal Audit plan 2014 with the focus on the examination in accordance with OJK comments. 2. To conduct quarterly review of the

annual audit plan in order to adjust the current condition and situation of the company’s business.

3. To provide training facility for the internal audit staffs to improve its competency.

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− Report on Outsourcing. − Others.

` Report of Activities of Audit Committee, Risk Monitoring

To review on Committee competency and job description as well as remuneration: Please be informed that BOC meeting has made decision to establish a policy guideline for the purpose of reviewing competency, job description and remuneration of the Banks’ Committees. This matter is essential considering the current growth and complexity of the business. Remuneration and Nomination Committee will coordinate with other Committee and will conduct follow up action for this matter.

3. 21-Jul-14 ` Report of Activities of Audit Committee, Risk Monitoring Committee, Remuneration and Nomination Committee and Recommendation from each committee to BOC.

` Discussion on the matter related to OJK inspection result

` Others.

` RNC recommends BOC to approve the candidacies of Mr Kazuhisa Miyagawa as President Director and Ms Dini Herdini as Director overseeing Compliance Function, and propose such changes to Shareholders and submit application to OJK.

5. 14-Oct-14 ` Review and acceptance on the report of BOD regarding as follows:

− Evaluation on the Realization of Business Plan as of 30 June 2014 − Evaluation on Risk Profile Report as

of 31 March 2014

− Compliance and AML & CFT Report − Comprehensive Follow Up Action

towards OJK Recommendations − Follow-Up Action on

Recommendation from Commissioners

− Report of IT Steering Committee − Others

` Report of Activities of Audit Committee, Risk Monitoring Committee, Remuneration and Nomination Committee and Recommendation from each committee to BOC.

` Evaluation on the Compliance Function during Semester I/2014;

` Others.

` Related to Risk Monitoring:

Referring to:

1. The functions of Risk Monitoring Committee as stipulated in the Risk Monitoring Committee Charter, Section II: Purpose and Section V: Roles and Responsibilities.

2. The result of regular monthly meetings of Risk Monitoring Committee in the 2nd Quarter of 2014.

Risk Monitoring Committee would like to propose recommendations to the Board of Commissioners, as follows:

a. Related to the cash shortage in Teller are whereby the shortage was covered by related Teller, which might exposed Bank to Reputation and Legal Risk, we suggest:

• Bank to establish a specific rule/ regulation that stipulate how to handle the shortage of cash.

• Signing Letter of Consent by Teller should be done in advance, prior to/on the Assignment date as a Teller.

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certain level of staff, such as, Preparer and Checker, could only check the Working Balance, while the above level of staff could check both Working Balance and Ledger Balance.

` Related to Compliance:

To anticipate the Bank’s persistence on continuously pursuing its business excellence while adhering the below mentioned guidelines.

1) High standard of practice be maintained and productively enhanced not just to satisfy the authorities’ requirements, but rather to impose self discipline in upholding good governance.

2) Any potential issue to GRC be anticipatively solved, be earnestly discussed to get alternative solutions in line with the Bank’s growth.

6. 18-Nov-14 ` Review and acceptance on the report of BOD regarding as follows:

− Evaluation on the Realization of Business Plan as of 30 September 2014

− Discussion on the Final Draft of the Bank’s Business Plan 2015-2017 − Evaluation on Risk Profile Report as

of 30 September 2014

− Compliance and AML & CFT Report − Follow-Up Action on

Recommendation from Commissioners

− Report of IT Steering Committee − Comprehensive Follow Up Action

towards OJK Recommendations − Others

` Report of Activities of Audit Committee, Risk Monitoring Committee, Remuneration and Nomination Committee and Recommendation from each committee to BOC

` Evaluation on the Effectiveness of the implementation of task and

responsibilities by each Committee

` Others

No recommendations

(23)

` BOC Circular Resolution

Pursuant to Article 16.13 of SMBCI’s Articles of Associations, BOC may also adopt valid resolutions without convening a BOC meeting provided all BOC members have approved such resolutions in writing by signing said proposal.

Resolutions adopted shall have the same effect as resolutions validly adopted in a BOC Meeting.

During 2014, BOC has also made several decisions through Circular Resolution, namely:

1. BOC Circular Resolution No. 032/BOC/Circular/II/2014 dated 12 February 2014 regarding Approval on the Revolving Term Loan Facility;

2. BOC Circular Resolution No. 033/BOC/Circular/II/2014 dated 18 February 2014 regarding the change of member of Remuneration and Nomination Committee; and

3. BOC Circular Resolution No. 034/BOC/Circular/IV/2014 dated 9 May 2014 regarding Approval on the Revolving Term Loan Facility.

f.

_Competency

_Building

_of

_the

_BOC

BOC continues to enhance its competency and professionalism, among others by attending training, workshop, conference and seminar with details below:

Name Position Trainings Date Organized by

1. Masayuki

11/3/2014 SMBC (Head Office) 2. Airo Shibuya Vice President

(24)

4. Ninik Herlani

a.

_Number,

_composition,

_criteria

_and

_independency

Based on SMBCI Articles of Association, BOD is appointed and discharged based on GMS Resolution.

The number of BOD members is 6 (six), including the President Director, which exceeds the total number of BOC members and has met the provisions of OJK regulation.

All BOD members possess high integrity, competency, and adequate financial reputation. Appointment of all members of the BOD is already approved by BI/OJK, and each member has declared as passed the fit and proper test by BI/OJK.

The composition of SMBCI BOD as of 31 December 2014 is as follows:

Name Position GMS Date1)

24-4-2014 26-11-2014 2014-2016 Indonesia

Tsuyoshi

20-5-2014 28-1-2013 01-4-2013 2013-2014

2014-2016 Indonesia

Adrianus Dani

12-5-2014 20-5-2014 2014-2016 Indonesia

Masa Paskalis

Lingga Director

18-9-2012

20-5-2014 09-8-2009 10-9-2012 2012-2014

2014-2016 Indonesia

Henoch

Munandar Director

20-5-2014

10-4-2014 20-5-2014 2014-2016 Indonesia

Dini Herdini3)

08-9-2014 08-9-2014 2014-2016 Indonesia

Note:

(25)

2) Mr. Kazuhisa Miyagawa has obtained approval from OJK as Deputy President Director of the Bank through OJK letter No. SR-54/D.03/2014 dated 24 April 2014and for the transition of his position from Deputy President Director to President Director has obtained confirmation from OJK for not requiring Fit and Proper Test for new entry process through OJK letter No. SR-71A/PB.12/2014 dated 19 September 2014.

3) Ms. Dini Herdini has obtained approval for the appointment as Director Overseeing Compliance Function of the Bank through letter from OJK No. SR-154/D.03/2014 tertanggal 8 September 2014. Therefore, effective on 8 September 2014, Mr. Bruno Octer Purba was discharged from his function as temporary acting Director Overseeing Compliance.

b.

_Roles

_and

_{Responsibilities}

_of

_BOD

Roles and responsibilities of BOD are stipulated in the Law on Limited Liability Companies, Regulation of Otoritas Jasa Keuangan, Bank Indonesia Regulations, and Articles of Associations.

SMBCI BOD is responsible for managing daily operation of the Bank, including ensuring that GCG principles are implemented in every activity of the Bank’s operations and in all levels/layers of the Bank’s organization, formulating and carrying out the Bank’s business strategies and policies, risk management and control, asset maintenance and management, human resources management, and ensuring the Bank’s business achivement and targets, making continuous efforts to improve cost efficiency and effectiveness, as well as reporting the Bank’s performance and implementation of its duties to the shareholders through the GMS.

c.

_Duties

_and

_{Responsibilities}

_of

_Each

_BOD

_Member

Pursuant to Articles 12 paragraph 12.7 of the Bank’s Articles of Association which stipulates that the segregation of roles and responsibilities of each member of the Board of Directors is determined by the GMS.

In the event the GMS does not determine the matter, the segregation of roles and responsibilities shall be decided by resolution of the BOD. In accordance with the Board of Directors Circular Resolution in Lieu of resolutions adopted at BOD meeting No. 050/BOD/Circular/II/2015 dated 2 March 2015.

(26)

No. Name & Title Role & Responsibility

1. Kazuhisa Miyagawa

(President Director)

To coordinate and generally supervise roles & responsibilities of all members of the Board of Directors

To specifically supervise:

• Project Management Office (PMO); • Treasury Department (TRD);

• Treasury Marketing Department (TMD); and • Internal Audit Department (IAD);

Temporary supervise:

• Human Resources Department (HRD)

• Learning and People Development Department (LPD);

2. Tsuyoshi Yamaguchi Deputy President Director

To supervise:

• Accounting Department (ACD);

• Business Administration and Planning Department (BAPD);

• General Affairs Department (GAD);

• Information Technology Department (ITD); dan / and

• Planning Department (PLD);

• Corporate Banking Department II (CBD II); • Corporate Banking Department III (CBD III); • Corporate Banking Department IV (CBD IV); and • Corporate Banking Department V (CBD V)

3. Adrianus Dani Prabawa

Deputy President Director

To supervise:

• Corporate Banking Department I (CBD I);

• Transactional Banking Solution Department (TBSD); and

• Project Finance Department (PFD).

4. Masa Paskalis Lingga

Director

To supervise:

• Settlement Services Department I (SSD-I);

• Settlement Services Department II (SSD-II);

(27)

No. Name & Title Role & Responsibility

4. Masa Paskalis Lingga

Director

• Trade Finance Operation Department (TFOD); and

• Cash and Deposit Services Department (CDSD).

5. Henoch Munandar1)

Director

To supervise:

• Transaction Legal Department (TLED); and

• Risk Management Department (RMD).

• Loan Department (LOD); and

• Loan Administration Department (LAD) 6. Dini Herdini2)

Director overseeing Compliance Function

To supervise:

• Compliance Department (COD);

• Corporate Legal Department (CLED); and

• KYC

Notes:

1. Integrated Risk Director is responsible for the supervision of the implementation of effective risk management by the Company pursuant to Bank Indonesia Rule No.5/8/PBI/2003 concerning Application of Risk Management for Commercial Banks and Bank Indonesia Rule 11/25/PBI/2009 on the Amendment of Bank Indonesia Rule 5/8/PBI/2003 concerning Application of Risk Management for Commercial Banks (“PBI on Risk Management”).

(28)

To ensure the independence of risk management, the authority in deciding the credit (credit limit) is not the authority of the Director of Integrated Risk but the authority of the President Director and/or the Credit Committee.

However, Integrated Risk Director can provide insight/advise in the credit decision process which is performed by the President Director or Credit Committee.

2. Director of Compliance should not be held by President Director and Deputy President Director, shall meet the requirements of independence and disallowed to oversee the following functions:

a. business and operations;

b. risk management which conducting the decision making at the Bank's business activities;

c. treasury;

d. finance and accounting;

e. logistics and procurement of goods / services; f. information technology; and

g. internal audit

d.

_{Transparency,}

_Financial,

_Management

_and

_Family

_{Relationships,}

_as

_well

_as

Prohibition

for

BOD

All members of BOD come from independent parties of Controlling Shareholder. In addition, members of BOD:

1. Do not hold another position as a member of the BOC, the BOD or Executive Officer of banks, companies, and /or other institutions.

2. Do not own shares either individually or jointly of more than 25% (twenty five percent) of paid-up capital of the Bank and/or another company.

3. Do not have family relationship up to the second degree with fellow members of the BOD and/or members of the BOC.

4. Do not extend a general power of attorney to other parties which will result in transfer of the duties and functions of the BOD.

5. Do not use the Bank for personal, family, and other parties’ interests that may cause a loss or reduce the profit of the Bank.

(29)

Furthermore the family and financial relationship of BOD with other BOC, BOD members and Shareholders as illustrated in the following table:

Name

Family Relationship With Financial Relationship With Commissioners Directors Controlling

Shareholders

Commissioners Directors Controlling Shareholders Yes No Yes No Yes No Yes No Yes No Yes No

Kazuhisa Miyagawa √ √ √ √ √ √

Tsuyoshi Yamaguchi √ √ √ √ √ √

Masa Paskalis Lingga √ √ √ √ √ √

Ninik Herlani Masli Ridhwan √ √ √ √ √ √

Henoch Munandar √ √ √ √ √ √

Dini Herdini √ √ √ √ √ √

in

relation

with

the

share

ownership,

BOD

members

do

not

have

share

ownership

reaching

5%

(five

percent)

or

more

of

paid

‐

up

capital

that

consists

of

type

and

number

of

shares

in

the

Bank,

other

banks,

non

‐

bank

financial

institutions

and

other

companies

that

are

placed

domestically

or

internationally.

e.

BOD

Meeting

Pursuant to Article 13.1 of Articles of Association and Guidance and Code of conduct of the BOD Meeting of the Board of Directors should be held 4 (four)

times a year or quarterly, and whenever deem necessary by one or more members of the BOD or on the written request by one or more members of the BOC or by one or more Shareholders.

BOD convened 15 (fifteen) meetings throughout 2014 with detail and agenda as follows:

` Attendance in BOD Meeting

Name Number of Meetings

Attendance Number

Attendance Percentage Phisically

Attendance Teleconference

Kazuhisa Miyagawa 8 8 - 100%

Tsuyoshi Yamaguchi 15 12 - 80%

Adrianus Dani

Prabawa 9 8 - 88%

(30)

Name Number of

` The Agenda of BOD Meeting in 2014

NO DATE AGENDA

1 23-Jan-14 ` Business Performance Report as of December 2013 and Business Plan Realization as of December 2013.

` General reporting from each BOD members.

` Discussion on follow up comments and recommendations from Board of Commissioners (BOC).

` Revision of Bank’s Business Plan 2013-2015.

` Others.

2 18-Feb-14 ` Business Performance Report as of January 2014.

` Others.

3 20-Mar-14 ` Business Performance Report as of February 2014.

` Resolution for Establishment of Transactional banking Solutions Department (TBSD).

` Others: Result of the review toward the duties and responsibilities of MMD – in relation with BI inspection for position 31 May 2013.

4 25-Apr-14 ` Business Performance Report as of March 2014 & Japanese bank comparison Q4-2013 vs Q4-2012

` Discussion on the follow up comments and

`recommendations from Board of Commissioners (BOC). Discussion on draft response to OJK audit findings

`Others.

5 23-May-14 ` Business Performance Report as of April 2014.

` Resolution of the change of organization structure due to change of BOD members.

`Others:

a. General discussion on the follow up of OJK audit result and SMBC audit result

(31)

(Shinjen Ken II)

c. Discussion on the additional budget (if any) for the upcoming activities (25th anniversary and CSR plan)

6 13-Jun-14 `Business Performance Report as of May 2014.

`Discussion on revision of Business Plan 2014-2016.

`Laporan Umum Masing-Masing Anggota Direksi General reporting from each BOD members.

`Pembahasan tindak lanjut komentar dan rekomendasi Dewan Komisaris Discussion on follow up comments and recommendations from Board of Commissioners (BOC).

`Lain-lain/Others.

7 22-Jul-14 `Business Performance Report as of June 2014 and Japanese Bank comparison Q1-2013 vs Q1-2014.

`General reporting from each BOD members.

8 25-Jul-14 `Comprehensive Follow Up Action towards OJK Recommendations.

`Resolution on the Change of Name of Non- Japanese Marketing Department and Japanese Marketing Departments.

`Discussion on follow up comments and recommendations from Board of Commissioners (BOC).

`Others.

9 26-Aug-14 `Business Performance Report as of July 2014.

`Comprehensive Follow Up Action towards OJK Recommendations

`Others

10 29-Sep-14 `Business Performance Report as of August 2014 and Japanese Bank Comparison Q2-2013 Vs Q2-2014.

11 27-Oct-14 `Business Performance Report and Business Plan Realization as of September 2014.

`Discussion on draft response to OJK audit findings

12 29-Oct-14 `Discussion on follow up comments and recommendations from Board of Commissioners (BOC).

`Others: LPD Report.

13 11-Nov-14 ` Business Performance Report and Business Plan Realization as of October 2014

` Final Discussion on Bank's Business Plan 2015 - 2017. MTN issuance update.

` Discussion on follow up comments and recommendations from Commissioners.

Comprehensive follow up action towards OJK recommendations.

(32)

`Others

14 24-Nov-14 `Presentation of New STP Remittance System

`Resolution to approve the selected vendor for the New STP Remittance System.

15 18-Dec-14 `Business Performance Report as of November 2014 and Japanese Banks Comparison Q3-2013 Vs Q3-2014.

`Update on MTN issuance.

`Comprehensive Follow-Up Action towards OJK Recommendations.

`Update on specific issue: Human Resources Matter.

` BOD Circular Resolution

Pursuant to Article 13.13 of SMBCI Articles of Association, BOD may also adopt valid resolutions without convening BOD meeting provided all BOD members have approved such resolutions in writing by signing said proposal. Resolutions so adopted shall have the same effect as resolutions validly adopted at a Meeting of BOD.

During 2014, BOD has taken several resolutions through Circular Resolution for the following matters:

1. BOD Circular Resolution No. 037/BOD/Circular/II/2014 dated 24 February 2014 regarding the change of member of Remuneration and Nomination Committee;

2. BOD Circular Resolution No. 038/BOD/Circular/IV/2014 dated 1 April 2014 regarding Loan Facility (Offshore Borrowings);

3. BOD Circular Resolution No. 039/BOD/Circular/IV/2014 dated 1 April 2014 regarding Loan Facility (Offshore Borrowing);

4. BOD Circular Resolution No. 040/BOD/Circular/IV/2014 dated 1 April 2014 regarding Loan Facility (Offshore Borrowing) ;

5. BOD Circular Resolution No. 041/BOD/Circular/VII/2014 dated 14 July 2014 regarding Effective Date of appointment Mr. Kazuhisa Miyagawa as Deputy President Director of SMBCI;

6. BOD Circular Resolution No. 042/BOD/Circular/IX/2014 dated 12 September 2014 regarding the Change of Organization Structure; 7. BOD Circular Resolution No. 043/BOD/Circular/XI/2014 dated 11

(33)

8. BOD Circular Resolution No. 044/BOD/Circular/XI/2014 dated 11 November 2014 regarding the approval of Offshore Borrowing;

9. BOD Circular Resolution No. 045/BOD/Circular/XI/2014 dated 26 November 2014 regarding Effective Date of resignation of Mr. Masaya Hirayama as President Director and appointment of Mr. Kazuhisa Miyagawa as new President Director of SMBCI.

10. BOD Circular Resolution No. 046/BOD/Circular/XII/2014 dated 16 December 2014 regarding Establishment of HR Committee; and

11. BOD Circular Resolution No. 047/BOD/Circular/XII/2014 dated 31 December 2014 regarding Segregation of Roles and Responsibilities of members of the Board of Directors.

f.

_Competency

_Building

_of

_BOD

1. Kazuhisa

17/12/2014 The Bank cooperate with IICD

(34)

Name Position Trainings Date Organized by 4. Masa Paskalis

Lingga

Director 1. FGD-Garuda Project-STP Workflow 5. Remittance System in

SMBC Malaysia

3. Asia Credit Officer Meeting

(35)

VI. Completeness and Implementation of the Tasks of the Committees and the

Work Unit Performing Bank Internal Audit Function

A. Committees under BOC:

Audit Committee

▪

Structure:

Audit Committee was established on 27 June 2007. As per December 2014, Audit Committee consists of 3 (three) Independent members with the following composition:

Name Position Expertise

Ninik Herlani Masli Ridhwan

Independent Commissioner | Chairman

Banking and Internal Audit

Jenly Hendrawan Independent Party |

Member Finance and Accounting

Constance J. Rehatta Independent Party |

Member Banking

Audit Committee members have met the qualifications below:

1. Possess adequate knowledge regarding banking industry widely with good integrity, character, and morals;

2. A willingness to accept accountability; 3. Informed Judgment;

4. Mature confidence;

5. Objectivity and intellectual honesty.

▪

Duties and Responsibilities:

In regard to article 43 regarding duties and responsibilities of Audit Committee as stipulated in OJK regulation on GCG, related duties and responsibilities have been provided in Audit Committee Charter, as follows:

1. To possess work guideline and procedure called Audit Committee Charter that shall be binding to all Committee members.

(36)

Work Unit Performing Bank Internal Audit Function

3. To perform the monitoring and evaluation of the followings in order to give recommendations to BOC:

` Implementation of the tasks of the Internal Audit Work Unit.

` Consistency between audit implementation by the Public Accountant Office with prevailing auditing standards.

` Consistency between the financial reports with prevailing accounting standards.

` Implementation of follow up actions by the BOD on findings by the Internal Audit Work Unit, public accountant, SMBC Internal Audit as the Bank’s majority shareholders, and BI supervision result.

4. To give a recommendation on the appointment of Public Accountant and Public Accountant Office to the BOC to be submitted to the GMS.

5. To review in timely manner all annual and interim financial statements; including the management's discussion and analysis, auditor's comments and suggestions, and any significant accounting or reporting issues.

▪

Audit Committee Meetings

Based on stipulation on Audit Committee Charter, Audit Committee conduct a meeting at least once a month. In case there are major issues, in any event, the committee will meet more frequently to fulfill its responsibilities. During the year 2014, Audit Committee has conducted a total of 16 (sixteen) meetings.

Detail of the 2014 Audit Committee Meetings is as presented in the table below:

` Attendance in Audit Committee Meeting

Name Number of Meetings

Attendance Number

Attendance Percentage Phisically

Attendance Teleconference

Ninik Herlani Masli

Ridwan 16 16 - 100%

Jenly Hendrawan 16 16 - 100%

(37)

Completeness and Implementation of the Tasks of the Committees and the Work Unit Performing Bank Internal Audit Function

` The agenda of Audit Committee Meeting in 2014

NO. DATE AGENDA

1 07-FEB-14 1. Annual Internal Audit Plan year 2014

2. Internal Audit Realization of Internal Audit Plan year 2013

3. Internal Audit Monthly Result 4. BAPD In-Office Inspection

5. Monitoring and evaluating implementation of follow-up actions

5.1 Internal Audit Department 5.2 Public Accountant (KPMG) 5.3 Central Bank Supervision Result 5.4 SMBC

6. Audit Committee's Activities and Recommendation of the

4th quarter of year 2013

7. Realization on Audit Committee's Program

8. GCG Conduct Self-Assessment of Audit Committee as of 31 December 2013

9. Miscellaneous

2 26-FEB-14 1. Annual Internal Audit Plan year 2014

2. Internal Audit Realization of Internal Audit Plan year 2013

3. Monitor Internal Audit Department's report to Bank Indonesia

4. Internal Audit Monthly Result 5. BAPD In-Office Inspection

6. Monitoring and evaluating implementation of follow-up actions:

7. Evaluation of the External Audit Performance 8. Miscellaneous

3 06-MAR-14 1. Garuda Team Project

2. Risk Management Department 3. Miscellaneous

(38)

Work Unit Performing Bank Internal Audit Function

4 26-Mar-14 1. Internal Audit Monthly Result 2. BAPD In-Office Inspection

3. Reviewing consistency between audit

implementation by the Public Accounting with the prevailing auditing standards

4. Monitoring and evaluations implementation of follow-Up actions

5. Recommendation of Public Accountant 6. Performance Evaluation of Audit Committee's

members 7. Miscellaneous

5 6MAY 2014 1. Annual Internal Audit Plan year 2014 2. BAPD In-Office Inspection

3. Reviewing consistency between audit

implementation by the Public Accounting with the prevailing auditing standards

4. Monitoring and evaluating implementation of follow-up actions:

5. Audit Committee's activities and Recommendation of the Q1-2014

6. Realization on Audit Committee's Program 7. Miscellaneous

6 16MAY 2014 1. Implementation of GCG 2. Miscellaneous

3. Implementation of GCG

(39)

Completeness and Implementation of the Tasks of the Committees and the Work Unit Performing Bank Internal Audit Function

7 6JUNI 2014 1. Internal Audit Monthly Result 2. BAPD In-Office Inspection

3. Monitoring and evaluation in the implementation of follow up actions:

4. Miscellaneous

8 01-JUL-14 1. Internal Audit Monthly Result

2. BAPD In-Office Inspection

4. Monitoring and evaluation in the implementation of follow up actions:

5. Miscellaneous 9 28-Aug-14

_1.

_{Coordination Meeting.}

2.

Monitor Internal Audit Departments report to Bank Indonesia

3.

BAPD In-Office Inspection

4.

Consistency between the financial reports with prevailing accounting standards.

5.

Audit Committee’s Activities and Recommendation of the 2nd quarter of year 2014.

6.

Realization on Audit Committee’s Program.

7.

Miscellaneous.

10 05-SEP-14 1. Discussion progress of follow up of result

inspection of OJK for the position of 31 January 2014.

11 24-SEP-14 1. Internal Audit Monthly Result

(40)

the Work Unit Performing Bank Internal Audit Function

4.4 SMBC 5. Miscellaneous

12 15-OCT-14 1. Internal Audit Monthly Result.

2. Audit Committee’s activities and

recommendations of the Q2-2014

3. Realization on Audit Committee’s program 4. Miscellaneous

13 22-OCT-14 1. Coordination Meeting.

2. Internal Audit Department

3. Audit Committee's Activities and

Recommendation of the 3rd Quarter of vear 2014

4. Realization on Audit Committee’s Program.

5. Miscellaneous

14 25-NOV-14 1. Internal Audit Monthly Result

3.1 Internal Audit Department 3.2 KAP / Public Accountant (KPMG) 3.3 Central Bank Supervision Result 3.4 SMBC

4. Miscellaneous

15 9-DEC-14 1. Coordination Meeting.

2. Establishment of The Annual Internal Audit Plan for year 2015.

3. Miscellaneous

16 23-DEC-14 1. Internal Audit Monthly Result

2. Establishment of The Annual of Internal Audit Plan for vear 2015

(41)

Completeness and Implementation of the Tasks of the Committees and the Work Unit Performing Bank Internal Audit Function

▪

Committee’s working schedule and its realization in 2014

In term of monitoring and evaluation of audit planning and implementation as well as monitoring of follow up of audit result for assessing adequacy of internal control including adequacy of financial reporting, thus Audit Committee has conducted activities during year 2014, as follows:

∗

Monitored and evaluated for the following activities:

` Internal Audit Department’s activities, among others are preparation of The Annual of Internal Audit Plan for year 2015; realization of audit schedule refer to The Annual of Internal Audit Plan of year 2013 and year 2014; submission of mandatory reporting to Bank Indonesia/Financial Service; being reviewed by the selected External Independent Party (BDO) review refer to Bank Indonesia’s regulations (The Standard For The Practice Of The Internal Audit Of Function For Commercial Banks or SPFAIB and Risk Management Implementation in The Utilization of Information Technology by Commercial Banks part IT Audit Function) and its result review.

` Implementation/realization of In-Office Inspection Plan including its result done by Business Administration Planning Department (BAPD). ` Consistency of financial report of the Bank in accordance with prevailing

accounting standards.

` Consistency between audit implementation by the External Auditor (KPMG) for financial audit year 2013 and performance plan of reappointed External Auditor (KPMG) for financial audit year 2014 with prevailing audit standard.

` Follow up action done by Board of Director upon result of Internal Audit Department, Bank Indonesia’s Supervisory, SMBC Audit, External auditor (KPMG).

∗

To deliver recommendation of reappointment of Public Accountant for financial audit year 2014 (KPMG) to the Board of Commissioners to be submitted to the General Meeting of Shareholders.

∗

Other activities:

` Set up Audit Committee Planning for year 2015.

` Set up realization of Audit Committee’s activities for year 2013 and 2014.