Counter-Terrorist Financing (AML & CFT)
10. Improvements Initiatives in 2018
To improve the AML and CFT implementation, projects and initiatives carried out in 2018 included:
1) Improvements to the AML system currently being used to provide added value to the Bank’s AML and CFT programs implementation
2) Discussions on AML and CFT policies and SOPs to ensure alignment with all prevailing regulations at all times
3) Cooperation with the Ministry of Home Affairs on the verification process of prospective customers data
4) Improvements to customer account opening forms
5) Alignment of AML and CFT policies and implementation with the CIMB Group
6) Assessment process for the AML and CFT implementation at Business Units/Branch Offices and Subsidiaries with a higher risk
7) Establishment of methods for assessing AML &
CFT risk and the corresponding risk mitigation evaluation process
8) Updating customer data based on the risk type of the respective customer
9) Learning on the Go as a tool used by the Bank for providing training to all employees including training related to AML and CFT
Anti Money Laundering and Counter-Terrorist Financing (AML CFT)
In 2018, the Public Accounting Firm (PAF) that audited the Bank’s consolidated financial statements was PAF Tanudiredja, Wibisana, Rintis & Rekan (a member firm of PricewaterhouseCoopers Global Network). The appointment of PAF Tanudiredja, Wibisana, Rintis
& Rekan was based on the AGM approval dated 24 April 2018, and was conducted in accordance with all prevailing provisions. The appointment was reviewed, supervised and received a recommendation from the Audit Committee, that included the determination of audit fee based on fairness.
NAME OF PUBLIC ACCOUNTANT Angelique Dewi Daryanto, S.E., CPA NAME OF PUBLIC ACCOUNTING FIRM KAP Tanudiredja, Wibisana, Rintis & Rekan.
EXTERNAL AUDITOR MONITORING
The Audit Committee monitors the external audit processes through regular meetings with the Public Accountant to discuss all findings and progress made during the audits by the Public Accountant. The Audit Committee also assists in ensuring that there are no potential obstacles during the audit process, evaluates the audit quality, and assures the audit has been conducted in accordance with all prevailing rules and standards.
COMMUNICATION EFFECTIVENESS AND
FREQUENCY BETWEEN THE PUBLIC ACCOUNTANT AND THE BOARD OF DIRECTORS
Throughout the audit process by the Public Accountant, communication and cooperation between the Public Accountant and the Board of Directors is conducted in an intensive and regular manner.
NUMBER OF PERIOD THE BANK’S FINANCIAL STATEMENTS HAVE BEEN AUDITED BY THE ACCOUNTANT AND PUBLIC ACCOUNTING FIRM Pursuant to SEBI No. 3/32/DPNP regarding The Relationship between Banks, Public Accounting Firms, and Bank Indonesia, the appointment of a Public Accounting Firm can only be run for 5 (five) consecutive years, except in certain conditions that need the approval of the authorities.
Including 2018, the Public Accounting Firm Tanudiredja, Wibisana, Rintis & Rekan (a member firm of PricewaterhouseCoopers Global Network) has served as the Bank’s auditor for the fourth consecutive period. The appointment of Tanudiredja, Wibisana, Rintis & Rekan was approved by OJK through Letter No. S-124/PB.332/2016 dated 9 August 2016.
OTHER NON-AUDIT SERVICES PROVIDED BY THE ACCOUNTANT & PUBLIC ACCOUNTING FIRM FOR CIMB NIAGA
During 2018, no fees were paid to the Public Accounting Firm Tanudiredja, Wibisana & Rekan for non-audit services.
2018 AUDIT FEES
The total audit fee for 2018 was Rp15,037,000,000, and included the annual audit fee of Rp7,432,000,000, audit fee for IFRS 9 reporting to CIMB Group of Rp2,758,000,000, audit fee pertaining to the issuance of bonds and sukuk of Rp4,199,000,000, and the Bank’s subsidiary (CNAF) annual audit fee of Rp648,000,000.
Information on Public Accounting Firms that have conducted audits of the Bank for the last 5 (five) consecutive years are as follows:
Audit Year Public Accounting Firm (KAP) Person in Charge
2018 KAP Tanudiredja, Wibisana, Rintis & Rekan Angelique Dewi Daryanto, S.E., CPA 2017 KAP Tanudiredja, Wibisana, Rintis & Rekan Angelique Dewi Daryanto, S.E., CPA 2016 KAP Tanudiredja, Wibisana, Rintis & Rekan Drs. Muhammad Jusuf Wibisana, M.Ec., CPA 2015 KAP Tanudiredja, Wibisana, Rintis & Rekan Drs. Muhammad Jusuf Wibisana, M.Ec., CPA 2014 KAP Tanudiredja, Wibisana & Rekan Drs. Haryanto Sahari, CPA
Transparency of the Bank’s Financial and Non-Financial Conditions
CIMB Niaga Share and Bond Buybacks
CIMB Niaga meets the obligation governing transparency and publication of its financial and non- financial conditions in accordance with all prevailing rules and regulations, through the submission and publication of information in the printed media and on the Bank’s website, as follows:
1. Monthly Financial Reports submitted to the regulators are also published on the websites of OJK and CIMB Niaga.
2. Quarterly Financial Reports submitted to the regulators, are also published in printed media and on CIMB Niaga’s website.
3. CIMB Niaga’s Annual Report is prepared and presented with due observance to all rules and regulations and submitted to the regulators, rating agencies, banking development institutions, research institutions, financial magazines and published on CIMB Niaga’s website.
4. Corporate Governance Information, including the Annual Corporate Governance Report, the Vision,
On 25 July 2017, CIMB Niaga obtained approval from OJK through letter No.S-63/PB.33/2017 to perform a share buyback at a maximum of 2% of the total issued and fully paid shares, which would then be used as a Management Employee Stock Ownership Program (MESOP), to become effective in 2018. The buyback plan had been previously approved by the shareholders through the EGM on 25 April 2017 and EGM on 24 August 2017.
Mission and Corporate Values, the Composition and Profiles of the Board of Commissioners and the Board of Directors, as well as internal policies pertaining to Corporate Governance including the Articles of Association and Committee Charters are also published on CIMB Niaga’s website.
5. Corporate Information and Products including the office network are published in the Annual Report, and on CIMB Niaga’s website to facilitate easiness for customers, investors and the general public to access and obtain information regarding the Bank’s products and services.
6. Information concerning Complaint Procedures, Information Security Policy, and Tips for Customers in using banking services are published on CIMB Niaga’s website, in order to comply with the consumer protection regulations.
7. Other information intended to support the information disclosure, financial education, and public service.
Pursuant to the approvals, as of 31 December 2018, the Bank had performed the buyback of 208,216,392 (full amount) shares for an average price per share of Rp1,257.70 (full amount), with a total acquisition value of Rp261.87billion (including commission and tax fees).
During 2018, the Bank did not perform any buybacks of bonds issued by the Bank.
Pursuant to Law No. 40 of 2007 regarding Limited Liability Companies, the dividend distribution is made based on a General Meeting of Shareholders decision.
To ensure Good Corporate Governance principles are followed in the dividend distribution, CIMB Niaga established Dividend Policy No. M.03 in 2018 which regulates:
• The dividend distribution plan to be reviewed by the Board of Directors or Committee equivalent to the Board of Directors at least once a year.
• Dividend distribution proposal to be submitted at the Capital Management & Recovery Plan Committee (CMRP) meeting
• The Bank is allowed to distribute a certain percentage of the current year’s net profit as a dividend after taking into account, the Bank’s financial performance achievement, the Bank’s Capital Adequacy Ratio (CAR) after the distribution of dividend, other investment projects, the Bank’s soundness level, and others.
• The dividend distribution plan to be included in the Bank Business Plan and submitted to the OJK.
• The dividend distribution proposal approved by management to be sent to the Annual General Meeting of Shareholders (AGM) for approval.
• After the AGM approves the cash dividend distribution, the Bank pays the cash dividends to the entitled shareholders no later than 30 (thirty) days after the AGM decision.
As stated in the 2018 Bank Business Plan submitted to the OJK, the Bank was allowed to distribute dividends in 2018 with the following conditions: (i) the Bank had achieved its net profit before tax target; (ii) after the dividend distribution, the Bank’s CAR should not be
less than 17.5%; and (iii) consideration is given regarding the Bank’s condition and capabilities, and the capital requirements and business continuity to maintain the Bank’s future business development.
In 2018, based on the AGM approval on 24 April 2018, the Bank performed a cash dividend distribution for a maximum of 20% of CIMB Niaga’s net income for the 2017 fiscal, amounting to a maximum of Rp595,547,660,321 (gross), with the following schedule:
1. Cum Dividend in the Regular and Negotiation Market on 2 May 2018
2. Ex Dividend in the Regular and Negotiation Market on 3 May 2018
3. Cum Dividend in the Cash Market on 7 May 2018 4. Recording date for entitled shareholders on 7 May 5. Ex Dividend in the Cash Market on 8 May 2018 6. Dividend Payment for the 2017 Fiscal Year on 24
May 2018
Accordingly, the remaining CIMB Niaga net profit, after deducting with dividend distribution to the shareholders, to be used to finance the Bank’s business activities.
In 2017, in accordance with the 2017 AGM resolution dated 25 April 2017, CIMB Niaga did not distribute dividends. In 2017, the Bank made no provisions for the mandatory reserve from its net profit for the 2016 fiscal year, since the Bank’s total amount of mandatory reserves complied with the minimum mandatory reserve requirement pursuant to Article 70 of Law No.
40 2007 regarding Limited Liability Companies. CIMB Niaga’s net profit in 2016 of Rp2.1 trillion was recorded as retained earnings and was used to finance the Bank’s business activities.