Corporate Governance Report Table of Contents

Management Discussion Performance Highlights Management Reports Company Profile and Analysis Risk Management

Commitment to Good Corporate Governance Implementation 403 Governance Roadmap 407 Focus on Achievement of GCG Implementation in 2018 408 Assessment of GCG Implementation 410 Corporate Governance Structure 413 General Meeting of Shareholders 415 Board of Commissioners 431 Independent Commissioner 454 Board of Directors 455 Board of Commissioners and the Board of Directors Performance Assessment 472 Board of Commissioners and the Board of Directors Composition Diversity 475 Policy and its Implementation Remuneration Policy 479 Board of Commissioners, Board of Directors & Board of Commissioners with 488 Board of Directors Joint Meetings Information on Ultimate and Controlling Shareholders 504 Affiliated Relationship Between Board of Commissioners, Board of Directors, 505 and Controlling Shareholder Board of Commissioners Committees 506 Board of Directors Committees 530 Corporate Secretary 541 Compliance Unit 547 Internal Audit (IA) 551 Anti Money Laundering and Counter-Terrorist Financing (AML & CFT) 560 Public Accountant/External Auditor 565 Transparency of the Bank’s Financial and Non-Financial Conditions 566 CIMB Niaga Share and Bond Buybacks 566 Dividend Policy 567 Funds For Social and Political Activities 568

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Provision of Funds to Related Parties 568 Customer Protection Policy 569 Anti Corruption Policy 571 Protection of Creditors’ Rights 571 Risk Management 572 Internal Control System 575 Legal/Litigation Issues of the Bank and its Subsidiaries 577 Administrative Sanction from Relevant Authorities 580 Access to Corporate Data and Information 581 Employees Code of Ethics and Conduct 586 Disciplinary Enforcement Policy and Sanctions Imposed for Violations 588 Corporate Culture 589 Goods and Services Procurement Policy 590 Conflict Of Interest Management Policy (Including Insider Trading) 591 Internal Fraud 592 Whistleblowing System 593 Implementation of Corporate Governance Guidelines for Public Companies 595 ASEAN Corporate Governance Scorecards Application 600 Integrated Governance Implementation Report 610 Sharia Business Unit Governance Report 622 Submission of the 2018 Sustainability Report 632 Bad Corporate Governance Practices 632 Good Corporate Governance Declaration of Conduct 633

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Corporate Governance Report

In 2018, CIMB Niaga maximized the GCG effectiveness as part of its oversight function and management. As a result, CIMB Niaga successfully received 2 prestigious Corporate Governance awards as “Top 50 ASEAN” and “Top 3 Indonesia” at the ASEAN Corporate Governance Awards 2018 held at the ASEAN Corporate Governance and ASEAN Capital Markets Forum (ACMF)

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Commitment to Good Corporate Governance Implementation

BASIS, POLICIES AND GUIDELINES FOR GOOD In addition, CIMB Niaga’s application of GCG also refers CORPORATE GOVERNANCE to a number of prevailing national and international CIMB Niaga believes that good performance regulations including: achievement is sustainable in the long term and 1. Various Republic of Indonesia Laws, particularly that business prospects will be accomplished, if the those related to the Capital Market, Banking and Bank consistently implements the principles of Good Limited Liability Companies; Corporate Governance. 2. Various Financial Services Authority (OJK) Regulations, particularly those related to Accordingly, for CIMB Niaga, the implementation Governance Implementation and Guidance, of Good Corporate Governance (GCG) is not only Annual Reports and others; a necessity, but serves as the main foundation for 3. The Indonesian Corporate Governance Roadmap managing the business to maximize the benefits and delivered through the OJK press release dated 4 added value for stakeholders and to maintain business February 2014; sustainability. 4. The ASEAN Corporate Governance (CG) Scorecard issued by the ASEAN Capital Market Forum (ACMF); CIMB Niaga continues to develop its GCG in line with 5. The Company’s Articles of Association and General sustainability best practices to provide adequate Meeting of Shareholders’ (GMS) Resolutions; protection and fair treatment to shareholders and 6. The Bank’s Policies (Corporate Policy Manual, Code other stakeholders. Moreover, GCG also encourages of Ethics and Conduct, Policies, and Standard CIMB Niaga to create maximum value for the Bank Operating Procedures). (shareholder value). For its implementation, CIMB Niaga follows the CIMB The CIMB Niaga Board of Commissioners, Board of Niaga Governance Charter as set forth in the Corporate Directors and all working units are committed to Policy Manual version 01 of 2016, which is the highest implementing the highest standards in the application policy in CIMB Niaga. As stated in the Corporate of GCG principles. These principles serve as a reference Policy Manual, Corporate Governance is performed for responsible decision-making, avoids conflicts based on Transparency, Accountability, Responsibility, of interest, optimizes performance, and improves Independence, Fairness and Equality (TARIF). accountability. Furthermore, the commitment to implementing GCG also aims to protect stakeholders The Corporate Policy Manual is also supported by other and increase compliance with all rules and regulations. policies related to governance including the Code of Ethics and Conduct, Work Guidelines and Procedures To achieve its Vision and Mission, CIMB Niaga (Charter), Whistleblowing Policy, Conflict Management consistently and continuously implements Good Policy and various other operational policies. These Corporate Governance principles to create added policies serve as the foundation while demonstrating value and maintain stakeholder confidence. The CIMB Niaga’s commitment to implementing basis for the application of Corporate Governance sustainable governance principles. refers to 4 Governance aspects, namely Governance Commitment, Governance Structure, Governance Process and Governance Outcome, and these become CIMB Niaga’s responsibilities to interested parties, namely customers, employees, other stakeholders and the community.

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Commitment to Good Corporate Governance Implementation

FOUR ASPECTS OF GOVERNANCE Governance Process CIMB Niaga ensures that the governance process Governance Commitment is always performed following structured and CIMB Niaga’s commitment to governance is reflected systematic procedures and mechanisms to generate by the commitment from the Board of Commissioners, outcomes that meet the Governance principles. the Board of Directors, and all working units to CIMB Niaga’s Governance processes, supported by implement and enforce CIMB Niaga Governance. adequate governance structures and infrastructure, produce outcomes that are in line with stakeholders’ Governance Structure expectations. The Governance structure is linked to adequate governance structures and infrastructure ensuring Governance Outcome that the implementation of GCG principles will result The overall commitment to Governance is in achievements that are in line with the stakeholders’ reflected in the effective governance structure expectations. CIMB Niaga maintains a Governance and governance processes that create a positive structure comprising main bodies, supporting bodies, influence on value creation, and the Bank’s long-term and GCG infrastructure. business sustainability in line with the stakeholders’ expectations. The main bodies include the General Meeting of Shareholders, the Board of Commissioners, and the The Bank’s business sustainability, supported by Board of Directors. The supporting bodies include the stakeholders’ trust, will always enhance CIMB Committees at the Board of Commissioners level, Niaga’s contribution to the entire community and the Committees at the Board of Directors level, Corporate environment. Therefore, CIMB Niaga is committed to Secretary, Business Units, and Independent Units. always placing governance first as the main foundation when conducting its business, as well as to maintain The GCG infrastructure includes Company Regulations, the Bank’s existence when facing the challenges Code of Ethics and Conduct, Governance Policies and and business competition in the banking industry. Procedures. CIMB Niaga also applies all governance principles, namely Transparency, Accountability, Responsibility, Independence and Fairness (TARIF).

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Sustainable Governance Outcome

Governance Structure Governance Process

Main bodies (GMS, Board of Commissioners, Board of Directors, Relations with Stakeholders, Policies Committees under the Board of Preparation and Decision Making, Commissioners, Committees under Risk Management the Board of Directors, Corporate Secretary, etc.)

Infrastructure (Corporate Policy Manual, Company Regulations, Code of Ethics and Conduct, Policy, SOP)

Governance Commitment

Vision, Mission, Core Values and others

IMPLEMENTATION OF GOVERNANCE PRINCIPLES

Governance Implementation Principles

Transparency 1. CIMB Niaga always provides disclosure of information in an accurate, adequate and timely manner. 2. CIMB Niaga prioritizes information disclosure while maintaining the Bank’s confidentiality principles based on prevailing rules and regulations. 3. CIMB Niaga provides disclosure of information accessible by all stakeholders in accordance with their rights. 4. CIMB Niaga’s policies are written and communicated to stakeholders in accordance with their respective rights and prevailing regulations.

Accountability 1. The Board of Commissioners and Board of Directors have well-defined duties and responsibilities as well as authorities. 2. All members of the Board of Commissioners and Board of Directors have adequate competence, based on their duties and responsibilities as well as understand their role in implementing Good Corporate Governance 3. Each member of the Board of Directors and the ranks below have well-defined and consistent duties and responsibilities in line with CIMB Niaga’s Vision, Mission and Core Values. 4. Through the Annual General Meeting of Shareholders (AGM), the Board of Commissioners and Board of Directors are accountable for their performance to the Shareholders. 5. Periodically and continuously, CIMB Niaga conducts performance assessment of the Board of Commissioners, Committees under the Board of Commissioners, Board of Directors and Committees under the Board of Directors.

Responsibility 1. CIMB Niaga conducts its business activities by always adhering to banking prudent principles and all prevailing rules and regulations. 2. Concerns for the environment and the surrounding community are demonstrated by CIMB Niaga with the implementation of Corporate Social Responsibility activities and programs, fairly. 3. CIMB Niaga always uphold Bank’s integrity, among others by sending the anti-gratification letter (Integrity Pact) in every year to all vendors and customers of the Bank.

Independency 1. CIMB Niaga conducts business activities independently and without any interference from Ultimate Shareholders or other stakeholders. 2. CIMB Niaga always avoids any conflict of interest. 3. Decisions are made objectively and based on the interests of the Bank.

Fairness and Equality 1. CIMB Niaga always strives to consider the interests of all stakeholders based on the principle of fairness and equality. 2. By considering the principle of fairness and equality, CIMB Niaga provides access to information for all stakeholders.

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Corporate Governance Report

ULTIMATE GOAL OF GCG IMPLEMENTATION SUSTAINABLE GCG IMPLEMENTATION The consistent implementation of the Governance principles through the 4 (four) aspects will benefit CIMB Improving the Quality of GCG Implementation Niaga both in the short-term and the long-term to: When conceptualizing GCG, CIMB Niaga has the 1. Create a foundation for CIMB Niaga to grow and basic principles to promote GCG as part of the Bank’ develop in the long-term. oversight and management functions, through a 2. Improve CIMB Niaga’s image. system that reflects the principles of information 3. Improve CIMB Niaga’s competitiveness. disclosure, accountability, equality and responsibility. 4. Improve investor confidence in CIMB Niaga. For more than 60 years, to achieve sustainable 5. Improve the value of CIMB Niaga’s shares. governance, CIMB Niaga has gradually carried out a number of initiatives to improve the quality of the GCG CIMB Niaga is determined to continue to grow and implementation. develop into the best bank in ASEAN by prioritizing the Bank’s Core Values. This is based on the awareness that the Bank’s business sustainability is not only measured by its financial performance and increasing profits, but also through its internal performance, namely its ethics and Good Corporate Governance.

In addition, CIMB Niaga has also implemented sustainable Corporate Social Responsibility programs as an integral part of the Bank’s operational activities. CIMB Niaga’s CSR program endeavours to create synergies and strong ties with the community and the environment in a sustainable manner, so as to provide added value to stakeholders, particularly those living around the Bank’s operational areas, and contribute to the economic development of the community. Overall, these factors are an inherent part of the ultimate goal of implementing Governance at CIMB Niaga.

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Governance Roadmap

By implementing Governance with reference to the applicable national and international GCG guidelines and standards, CIMB Niaga is determined to become a leading ASEAN Company, and achieve the established long- term goals to make a positive contribution to its stakeholders. This commitment is performed with continuous improvements to the Governance implementation at CIMB Niaga. As a result, CIMB Niaga’s Corporate Governance implementation has achieved the following:

2018 1. Became the first Public Company in Indonesia which conducted e-Voting at all the GMS held in 2018. 2017 2. Continuous improvement in GCG implementation, 1. Establishment of the GCG unit that is that gained recognition through awards from responsible for and focuses on improving leading and independent institutions, namely 2016 GCG implementation in the Bank. “Top 50 ASEAN” and “Top 3 Indonesia” at ASEAN 2. Appointment of PT Deloitte Konsultan 1. Improvement of Corporate Governance Awards 2018 organized by Indonesia as an independent party to GCG Charter as ASEAN Corporate Governance and ASEAN Capital manage whistleblowing services which are outlined in the Markets Forum (ACMF), as well as “Top 50 and The publicly accessible. Deloitte’s whistleblowing Corporate Policy Best Overall 2018” for the category of Indonesian system has been implemented since Manual. Listed Company with Large Capitalization from the December 2017. This appointment will 2. Improvement Indonesian Institute for Corporate Directorship. increase transparency and professionalism in of Conflict 3. Revamping the Bank’s website, particularly handling whistleblowing at the Bank. Management regarding GCG and Investor Relations. 3. Renewal of the Charter of the Board of Policy which also 4. Adjustment of the Good Corporate Governance & Commissioners and Board of Directors. governs issues on Sustainability unit. 4. CIMB Niaga provides job opportunities for Insider Trading. 5. Renewal of the Audit Committee Charter and disabled people as Bank’s employees which 3. Performance Integrated Governance Committee Charter, and is part of the CIMB Niaga’s CSR programs. assessment of completion and/or improvements of other internal the Board of policies concerning GCG. Commissioners, Board of Directors and Committees under the Board of 2015 Commissioners. 1. Development of the Bank’s GCG practices, in line with the latest OJK regulations and the manifestation of GCG 2014 in the Corporate Culture of “A Better CIMB 1. Full implementation of the ASEAN CG Niaga/ABC”. Scorecard principles that have led CIMB 2. Issued Summons of AGM within 28 days Niaga to be selected as one of the 2 listed prior to the event. companies in Indonesia that received 3. Implementation of Integrated the “Top 50 Public Listed Companies” Governance and Integrated Risk in ASEAN based on the ASEAN CG Management by establishing an Scorecard in 2015. Integrated Governance Committee and 2013 2. Disclosure of the GMS Agenda and its Integrated Risk Management Committee. Aligning and refining the elucidation. Bank’s GCG practices with 3. Disclosure of the profile of candidate the Indonesian Corporate members of the Board of Commissioners Governance Roadmap and Board of Directors. issued by the Regulator and 4. Publication of the AGM resolution on the the ASEAN CG Scorecard same day as the AGM. principles, including CIMB 5. Uploading of the video of AGM resolution Niaga ensure that there on the Bank’s website on the same day as is a minimum of 1 (one) the AGM. 2010-2011 female Independent Establishment of the Commissioner in the Board of infrastructure and Commissioners. 2008 implementation of Re-branding & GCG (establishment Merger. of GCG Charter, Board 1989 of Commissioners Go Public. Charter, Board of Directors Charter, 1974 Committee Charter, 1955 Became a Foreign Code of Ethics and The Bank was Exchange bank. Conduct) and received incorporated. recognition from IICG, IICD, ARA.

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Focus on Achieving GCG Implementation in 2018

CIMB Niaga has implemented ways to improve the 4. Launching various initiatives to further strengthen quality of its GCG implementation, one being by CIMB Niaga’s Anti-Fraud culture, including: conducting e-Voting at the 2018 GMS, making CIMB a. Leaders Roundtable, a communication forum Niaga the first Public Company in Indonesia to conduct between the Board of Directors and Senior e-Voting in the GMS. Leaders with employees, particularly regarding fraud mitigation and anti-fraud culture, In 2018, CIMB Niaga also adjusted its Good Corporate b. Routine Morning Briefing regarding anti-fraud Governance & Sustainability unit so they now awareness in branch offices, independently review and focus on improving the GCG c. Speak Up Culture Campaign, a part of the implementation, and are responsible for implementing anti-fraud program to encourage employees sustainability at CIMB Niaga. to be bold and responsible for reporting any indications of fraud, To improve information disclosure for stakeholders d. Auto forward whistleblowing report received and the public, CIMB Niaga has revamped its Bank’s by internal email and directed by e-mail to PT website, particularly the sections on GCG and Investor Deloitte Konsultan Indonesia, an independent Relations. With this regeneration, stakeholders and party appointed by CIMB Niaga to manage the public are expected to obtain more transparent and Bank’s whistleblowing system. This auto forward comprehensive information regarding the Bank. system will help to make the management and administration of the Bank’s whistleblowing Improvements in the quality of CIMB Niaga’s GCG was reports more independent and integrated. also evident from the improvements made throughout 5. Developing digital platforms across all Human 2018 in various areas: Resources working levels, starting with the 1. Adjusting the membership composition of development of online learning applications the Committees responsible to the Board of (Learning on the Go/LoG) that are accessible by Commissioners, in accordance with OJK regulations. employees anywhere and anytime, HR Bot, a self- 2. Renewing the Audit Committee Charter and service feature in the Human Resources internal Integrated Governance Committee Charter. system for letter requests, employee requisition, 3. Completing and/or improving several internal policies annual review process, organization management, related to GCG, including the Communication with and implementing an online recruitment system as Shareholders Policy, Dividend Policy, Creditors’ Rights a digital and comprehensive recruitment process. Policy, Board of Commissioners & Board of Directors Nomination Policy, Board of Commissioners and In 2018, CIMB Niaga maximized the effectiveness of its Board of Directors Diversification Policy, Board of GCG implementation as part of the Bank’s oversight Commissioners and Board of Directors Training and management function. As a result, CIMB Niaga and Orientation Policies, as well as the Policy was recognised by external parties receiving awards as on Performance Assessments for the Board of “Top 50 ASEAN” and “Top 3 Indonesia” at the ASEAN Commissioners, Board of Directors, and Committees Corporate Governance Awards 2018 from ASEAN under the Board of Commissioners. Corporate Governance and ASEAN Capital Markets Forum, as well as “Top 50 and The Best Overall 2018” in the category of Indonesia Listed Company with Large Capitalization from the Indonesian Institute for Corporate Directorship.

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GCG ASPECTS AND PRINCIPLES IMPLEMENTATION Aspect 2. Board of Commissioners’ Function and Role, When conducting GCG, CIMB Niaga is guided by GCG which includes the principles of: Indonesian and regional implementation standards a. Strengthening the Board of Commissioners’ and best practices. This is intended to assist CIMB Membership and Composition Niaga in consistently improving the quality of its GCG b. Improving the Implementation Quality of the Board implementation. of Commissioners’ Duties and Responsibilities

The GCG standards followed by CIMB Niaga refers Aspect 3. Board of Directors’ Function and Role, which to OJK Regulation No. 55/POJK.03/2016 and OJK includes the principles of: Circular Letter No. 13/SEOJK.03/2017 concerning a. Strengthening the Board of Directors’ Membership Implementation of Governance in Commercial Banks, and Composition which includes the following 11 (eleven) factors: b. To implement CIMB Niaga’s GCG in accordance 1. Implementation of Board of Commissioners’ Duties with best practices and regional standards, the and Responsibilities Bank also complies with the ASEAN Corporate 2. Implementation of Board of Directors’ Duties and Governance Scorecard (ACGS) principles, which Responsibilities consists of 5 major aspects, as follows: Improving 3. Completeness and Implementation of Committees the Implementation Quality of the Board of Duties Directors’ Duties and Responsibilities 4. Conflicts of interest management; 5. Implementation of the Compliance function; Aspect 4. Stakeholders Participation, which includes 6. Implementation of the Internal Audit function; the principle of: 7. Implementation of the External Audit function; Enhancing Corporate Governance Aspects through 8. Implementation of Risk Management including Stakeholders Participation the Internal Control System; 9. Provision of funds to related parties and provision Aspect 5. Information Disclosure, which includes the of large funds; principle of: 10. Transparency of the Company’s financial and Improving the Information Disclosure Implementation non-financial conditions, the Bank’s reporting Governance and internal reporting; and To implement CIMB Niaga’s GCG in accordance with 11. Bank’s strategic plan best practices and regional standards, the Bank also complies with the ASEAN Corporate Governance In addition, CIMB Niaga also uses the Corporate Scorecard (ACGS) principles, which consists of 5 major Governance Guidelines stated in OJK Circular Letter aspects, as follows: No. 32/SEOJK.04/2015 regarding the Guidelines for 1. Rights of Shareholders Corporate Governance of Public Companies, which 2. Equitable Treatment of Shareholders include: 3. Role of Stakeholders 4. Disclosure and Transparency Aspect 1. Relationship between Public Companies and 5. Responsibilities of the Board Shareholders in Guaranteeing Shareholders’ Rights, which covers the principles of: a. Enhancing the value of organizing the General Meeting of Shareholders b. Improving the Quality of Communication between Public Companies and Shareholders or Investors

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GCG Implementation Assessment

GCG IMPLEMENTATION SELF-ASSESSMENT Assessor RESULTS Self-assessment of the Bank’s Governance implementation involves the Board of Commissioners, Assessment Procedures and Criteria Board of Directors, Independent Parties, Executive CIMB Niaga conducts self-assessments on the Officers and independent units in the Bank, and is application of Good Corporate Governance principles aimed at producing a comprehensive and structured (Transparency, Accountability, Responsibility, assessment of the Governance system effectiveness, Independency, Fairness and Equality) in accordance and the quality of the Bank Governance outcomes. with OJK Regulation No. 55/POJK.03/2016 and The self-assessment also covers Governance OJK Circular Letter No. 13/POJK.03/2017 regarding implementation in the subsidiaries in accordance with Implementation of Governance for Commercial Banks. the relevant provisions. The GCG assessment is also intended to generate a Governance Rating as a factor to determining the Assessment Results and Score Commercial Bank Soundness Level in accordance with The self-assessment results and scores for CIMB OJK Regulation No. 4/POJK.03/2016. The assessments Niaga’s Governance implementation as of December are conducted on 3 (three) Governance aspects, namely 2018 were as follows: structure, process and outcome for 11 (eleven) factors in the governance implementation assessment.

Entity Rating Remarks

Bank (Individually) 2 Good

CIMB Niaga Auto Finance (CNAF) 2 Good

CONSOLIDATED 2 Good

Recommendation and Follow Up of GCG Assessment Results in 2018 For 2018, CIMB Niaga’s Governance rating for bank only and consolidated was ranked 2 (Good). This rating means that in general terms, CIMB Niaga and its subsidiaries have implemented Good Corporate Governance principles in a comprehensive and structured manner for the three governance aspects, namely Structure, Process and Outcome. Any weaknesses noted in implementing the Governance principles were considered generally insignificant and could be resolved by normal actions by the CIMB Niaga and its subsidiaries management.

CIMB Niaga stays committed and endeavours to take corrective measures aimed at supporting the Bank’s business sustainability. CIMB Niaga also aligns with its Subsidiaries, in terms of strategic plans and Risk Management implementation, as stipulated in the financial conglomeration regulations.

Governance Structure CIMB Niaga’s governance structure and infrastructure has met the requirements. Changes in CIMB Niaga’s management composition during this period have met the requirements and have been reported to the competent authorities as well as fulfilled the transparency aspect to the public. In addition to complying with the minimum provisions regarding the establishment of committees under the Board of Commissioners and Board of Directors, CIMB Niaga has also established a transactional committee to support the implementation of the Board of Directors’ duties and responsibilities in managing the Bank’s operational activities. CIMB Niaga’s internal provisions are based on a Risk- Based Framework and are tailored to the business complexity and organizational levels within the Bank. Furthermore in 2018, CIMB Niaga adjusted its Good Corporate Governance & Sustainability unit in an effort to improve its GCG implementation and its responsibility for the implementation of sustainability at the Bank. CIMB Niaga also continues to follow up on recommendations for improvements to the Governance structure and infrastructure.

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Governance Process other activities as a reflection of its governance outcome Governance processes are implemented based on as disclosed in the management achievement section Governance and Prudential Principles aimed at including other activities (such as Financial Education, achieving sustainable management in the Bank and Corporate Social Responsibility, awards in Conventional meeting the interests of stakeholders. One of the and Sharia banking). CIMB Niaga initiative in this period was to develop a compliance and risk culture by raising the awareness EXTERNAL ASSESSMENT of compliance and risk mitigation, strengthening and complementing the internal control functions in each ASEAN Corporate Governance Scorecard risk-taking unit to minimize weaknesses that may CIMB Niaga will continue to make the improvements adversely affect the Bank’s Governance performance required for the implementation of Governance and results. principles. By understanding the values within each Governance principle, the implementation by CIMB In addition, with the rapid development of Information Niaga will be aimed at achieving Good Corporate Technology, CIMB Niaga also continued to improve Governance and ultimately provide added value to all the quality of its systems and information technology CIMB Niaga stakeholders. to provide optimal, safe and reliable financial services for our customers and provide accurate and timely This commitment also serves as evidence that the information for stakeholders. implementation of CIMB Niaga Governance is not just to meet the requirements, but more than that, it Governance Outcome serves as a necessity in the process of overseeing and In compliance with all prevailing rules and regulations, managing the Bank. One of the efforts undertaken CIMB Niaga submits financial reports and non-financial by CIMB Niaga is to adopt the ASEAN Corporate information to the regulators in accordance with their Governance Scorecard as a guideline for implementing requirements. CIMB Niaga also discloses on the Bank’s the GCG principles, and to make any necessary website its financial and non-financial condition, improvements. product and service information in accordance with requirements. In 2018, the effectiveness of CIMB Niaga’s Assessment Procedures and Assessor GCG implementation was reflected in it achieving In addition to the Governance implementation self- a good financial and operational performance assessment as stipulated in OJK Circular Letter No. throughout 2018, as follows: 15/SEOJK.03/2015 concerning Implementation of 1. Loan Growth of 1.80% Integrated Governance for Financial Conglomerates 2. Third-Party Funds Growth of 0.76% and No. 13/SEOJK.03/2017 concerning Implementation 3. Asset Growth of 0.18% of Governance for Commercial Banks as previously 4. Equity Growth of 7.12% stated, CIMB Niaga is also assessed by the Indonesian 5. Current Year Net Profit Growth of 16.95% Institute for Corporate Directorship (IICD), RSM, and 6. Gross NPL Improvement to 3.11% the Financial Services Authority (OJK) based on the ASEAN Corporate Governance Scorecard (ACGS) In addition, the governance outcome from the principles, and conducts self-assessments to set GCG implementation is also reflected in the Bank’s targets and action plans for improvements to be made compliance with rules and regulations whereby no by the Bank. sanctions were imposed through legal proceedings involving the Bank. In 2018, CIMB Niaga also organized

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Assessment of GCG Implementation

Assessment Criteria Assessment components based on ACGS includes Rights of Shareholders, Equitable Treatment of Shareholders, Role of Stakeholders, Disclosure and Transparency, and Responsibilities of the Board.

Assessment Results and Score CIMB Niaga’s ACGS assessment results were as follows:

Year 2018 2017

Score 109.19 109.38

In 2018, CIMB Niaga won the “Top 50 ASEAN” and 3. The Bank implements an internationally recognised “Top 3 Indonesia” awards at the ASEAN Corporate Sustainability Report framework (i.e. GRI, Integrated Governance Awards 2018 from the ASEAN Corporate Reporting, SASB). Governance and ASEAN Capital Markets Forum 4. The audited financial statements were published (ACMF), and the “Top 50 and The Best Overall 2018” within 60 days after the end of the Fiscal Year. award in the category of Indonesian Listed Company 5. The Bank has a female Independent Commissioner. with Large Capitalization from the Indonesian Institute 6. The Bank has a policy and discloses measurable for Corporate Directorship. objectives for the Board of Commissioners and Board of Directors composition diversity, and ASEAN Corporate Governance Scorecard reports on the implementation progress for Recommendations from External Parties achieving these objectives. 7. The Nomination and Remuneration Committee Practices Exceeding Minimum Expectations conducts a process to identify whether the quality CIMB Niaga conducted several Good Governance of the Board of Directors is in line with the Bank’s practices that exceeded the expected minimum strategy. standards, including the following: 8. The Bank has a Risk Committee at a separate 1. The Bank was the first Public Company in Indonesia Management level. to conduct e-Voting at the GMS held in 2018. 2. The Bank published its Summon of AGM Special Items Requiring Attention (accompanied by the schedule, agenda and No poor governance practices were found in the Bank, detailed explanation of each AGMS agenda), at and there are no matters that require special attention least 28 days prior to the date of the AGMS. and follow-up from the Board of Directors.

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Corporate Governance Structure

Pursuant to the prevailing laws and regulations, the governance structure of CIMB Niaga is arranged with the objective to establish clarity in the division of duties and responsibilities, the mechanisms and flow of decision- making, and reporting within the Bank’s bodies. CIMB Niaga’s corporate governance structure is as follow:

General Meeting of Shareholders

Main Bodies

Board of Commissioners Board of Directors

Committees Executive under the Committees Board of Commissioners Business/ Transactional Committees

Corporate Supporting Bodies Secretary

Business Unit/ Work Units

Independent Units

Infrastructure Corporate Regulations, Code of Ethics & Conduct, Policies and Procedures

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Corporate Governance Structure

The corporate governance implementation is Niaga, and are assisted by the Corporate Secretary, conducted in a systematic and continuous manner Committees under the Board of Directors and Internal with the corporate governance principles becoming Audit. The Committees under the Board of Directors, the main terms of reference in CIMB Niaga’s business includes the following Executive Committees and activities. Corporate governance implementation is Special Committees: realized through interactions between all of CIMB Niaga’s governance structure bodies, with the main 1. Executive Committees: bodies being the General Meeting of Shareholders a. Asset & Liability Committee (ALCO) (GMS), the Board of Commissioners and the Board of b. Credit Policy Committee (CPC) Directors, with the GMS holding the highest position. To c. Information Technology Steering Committee maximize the main bodies’ functions in CIMB Niaga’s (ITSC) governance structure, they are assisted by supporting d. Risk Management Committee (RMC) bodies, comprising Committees under the Board of e. Credit Policy Committee (CPC) Commissioners, the Corporate Secretary, Committees f. Operational Risk Management Committee under the Board of Directors, and Internal Audit. (ORC) g. Capital Management & Recovery Plan Committees under the Board of Commissioners Committee (CMRPC) were established to assist and enhance the Board of Commissioners’ oversight function. The Committees 2. Special Committees: under the Board of Commissioners include: a. Business Development Committee (BDC) 1. Audit Committee b. Human Resources Committee (HRC) 2. Risk Oversight Committee c. Marketing Committee (MARCOM) 3. Nomination and Remuneration Committee d. Executive Credit Committee (ECC) 4. Integrated Governance Committee e. Capital Investment Committee (CIC) f. Disciplinary Committee (DC) The Board of Directors together with the Bank g. Data Governance Committee (DGC) management are responsible for managing and controlling governance implementation at CIMB

414 Annual Report 2018 PT Bank CIMB Niaga Tbk Supporting Corporate Governance Corporate Social Others Consolidated Business Review Report Responsibility Corporate Data Financial Report

General Meeting of Shareholders

The General Meeting of Shareholders (GMS) is the 5. Opportunity to raise questions on every agenda highest body in CIMB Niaga’s corporate governance item and every agenda decision in the GMS. structure and is the forum for shareholders to make 6. Opportunity to vote agree, disagree, or abstain decisions. The GMS has the authority not granted to from any proposed decision in the GMS agenda. the Board of Directors and Board of Commissioners as 7. Receive equal treatment from CIMB Niaga. stipulated in CIMB Niaga’s Articles of Association and applicable laws and regulations. Through the GMS, In addition, shareholders also have the authority shareholders make decisions based on the interests of to appoint and dismiss members of the Board the Bank in a fair and transparent manner. The CIMB of Commissioners and members of the Board of Niaga GMS consists of an Annual GMS (AGM) held once Directors, conduct performance assessments on the a year, and Extraordinary GMS (EGM) that can be held Board of Commissioners and the Board of Directors, at any time based on needs. Both the AGM and EGM temporarily dismiss the members of the Board of have the highest authority in the Bank’s corporate Directors, approve the amendments and ratification of governance structure. the Bank’s Articles of Association, approve the Annual Reports, approve the remuneration for the Board of The legal basis for organizing the CIMB Niaga GMS Commissioners and the Board of Directors, as well refers to: as approve the proposed allocation of Bank’s profits, 1. Law No. 40 of 2007 concerning Limited Liability including dividend distribution. Companies. 2. Financial Services Authority (OJK) Regulation In detail, the shareholders rights, authorities and No. 32/POJK.04/2014 dated 8 December 2014 responsibilities are regulated in CIMB Niaga’s Articles concerning the Plan and Implementation of General of Association that is accessible through the Bank’s Meeting of Shareholders of Public Companies and website (www.cimbniaga.com). The Bank also consider OJK Regulation No. 10/POJK.04/2017 14 March the location of GMS ensuring it is easily accessible by 2017 concerning Amendments to OJK Regulation the shareholders and/or their proxies and encourages No. 32/POJK.04/2014. all shareholders including institutional shareholders to 3. Bank’s Articles of Association. attend the GMS held by CIMB Niaga.

SHAREHOLDERS’ RIGHTS, AUTHORITIES AND GMS ORGANIZATION MECHANISM RESPONSIBILITIES In 2018, CIMB Niaga held 1 (one) AGM and 1 (one) EGM. CIMB Niaga shares consist of class A shares and class B The AGM was held on 24 April 2018, while the EGM was shares. Both Class A and Class B shareholders have the held on 19 December 2018. same rights. Each share has the right to 1 (one) vote. The rights held by shareholders include, among others: The AGM and EGM held in 2018 were conducted 1. Attend the GMS and give 1 (one) vote. in accordance with the mechanism stated in the 2. Opportunity to propose the GMS agenda. Bank’s Articles of Association provisions and OJK 3. Opportunity to grant a proxy to another party if the Regulation No. 32/POJK.04/2014 dated 8 December shareholder is unable to attend the GMS. 2014 concerning the Plan and Implementation of the 4. Receive and study the GMS material no later than General Meeting of Shareholders for Public Companies, 28 (twenty eight) days prior to the GMS, so that as amended by OJK Regulation No. 10/POJK.04/2017 shareholders are prepared to vote during the GMS dated 14 March 2017. resolution process.

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General Meeting Of Shareholders

Annual GMS 24 April 2018 The process of organizing the AGM on 24 April 2018:

Date and Time 24 April 2018 at 14.17 - 15.45 Western Indonesian Time

Venue Venue that was easily accessible by shareholders: The Financial Hall Graha CIMB Niaga 2nd Floor Jl Jenderal Sudirman Kav. 58 South Jakarta 12190

Quorum The AGM was attended by shareholders and/or their proxies representing 23,894,514,455 shares or 95.8718% of the total Class A and Class B shares with voting rights issued by the Bank totaling 24,923,390,451 (excluding Treasury stock with the total of 208,216,392 shares).

Chairman of the AGM Dato ‘Sri Nazir Razak, President Commissioner, as the Chairman of the AGM.

The presence of members of Dato ‘Sri Nazir Razak as the President Commissioner and all other members of the Board of the Board of Commissioners Commissioners were present. including the President Commissioner

The presence of the Chairman All members of the Audit Committee were present, namely: of the Audit Committee and Zulkifli M. Ali as the Chairman of the Audit Committee was present. members of the Audit Committee Jeffrey Kairupan as a Member of the Audit Committee was present. Mawar I.R. Napitupulu as a Member (Independent Party) of the Audit Committee was present. Yap Tjay Soen as Member (Independent Party) of the Audit Committee was present

The presence of the Chairman Pri Notowidigdo as the Chairman of the Nomination and Remuneration Committee was present of the Nomination and Remuneration Committee

The presence of the Chairman of Zulkifli M. Ali as the Chairman of the Risk Oversight Committee was present. the Risk Oversight Committee

The presence of members of the Tigor M. Siahaan as the President Director and all members of the Board of Directors were present. Board of Directors including the President Director

The presence of the Compliance Fransiska Oei as Compliance Director (Independent Director) was present. Director

Independent parties to calculate Notary Ashoya Ratam, SH, MKn as Public Notary. quorum and votes for AGM PT Bima Registra as Share Registrar Bureau. resolutions

Number of shareholders who ask 1 (one) Shareholder raised a question on the Seventh Agenda. questions and/or give opinions at the AGM

The implementation stages of AGM on 24 April 2018 as follows:

Description Implementation Stipulations

AGM Notification to Regulators Notification of the AGM Plan to the Financial Notification of the date and agenda of the Services Authority (OJK) and the Indonesia GMS which should be disclosed clearly and Stock Exchange (IDX) (e-Reporting) was in detail, must be submitted no later than 5 submitted on 2 March 2018. (five) working days prior to the date of the GMS announcement to the public.

416 Annual Report 2018 PT Bank CIMB Niaga Tbk Supporting Corporate Governance Corporate Social Others Consolidated Business Review Report Responsibility Corporate Data Financial Report

Description Implementation Stipulations

Announcement of AGM • Announced in Bisnis Indonesia and The Announced at least through 1 (one) national Jakarta Post newspapers on 9 March daily newspaper in Indonesian, the IDX site 2018. and the Bank’s official website no later than 14 • Evidence of advertisements submitted to (fourteen) days prior to the date of the GMS OJK (hardcopy and e-Reporting via SPE Summons. OJK) and IDX (e-Reporting via IDXNet) on the same day. Evidence of Announcement Advertisements • Uploaded on the Bank’s website www. shall be submitted to OJK no later than 2 (two) cimbniaga.com on the same day. working days after the announcement of the • Announcement was made 16 (sixteen) GMS and submitted to the IDX on the same days prior to the AGM Invitation. day as the date of the advertisement.

Recording Date of List of Shareholders 1 (one) working day prior to the GMS entitled to attend the AGM Invitation, which was on 25 March 2018.

Summons with explanation of AGM • Announced in the Bisnis Indonesia and Announced at least through 1 (one) agenda The Jakarta Post newspapers on 26 Indonesian language national newspaper, March 2018. IDX website, and the Bank’s official website • Evidence of Summons advertisements no later than 21 (twenty one) days prior to the submitted to OJK (hardcopy and implementation of the GMS. e-Reporting via SPE OJK) and IDX (e-Reporting via IDXNet) on the same Evidence of Summons advertisement day. submitted to OJK no later than 2 (two) • Uploaded on the Bank’s website www. working days after the GMS Summons and cimbniaga.com on the same day. submitted to the IDX on the same day as the • Summons was made 28 (twenty eight) date of the advertisement. days prior to the AGM.

AGM Implementation 24 April 2018.

Summary of Publication in • Announced in the Bisnis Indonesia and The announcement of the summary of the Minutes (Results) of Newspapers The Jakarta Post newspapers on 25 April minutes of the GMS shall be announced no the AGM 2018. later than 2 (two) working days after the GMS • Publication of the summary of the the was held. minutes (results) in the newspaper was announced 1 (one) working day after the AGM.

Publication on the • Brief of AGM resolutions was uploaded Based on the ASEAN CG Scorecard, the Bank Bank’s website on the Bank’s website www.cimbniaga. should publish the brief of GMS resolutions com on 24 April 2018. through Bank’s website 1 (one) day after the • Publications of the brief of AGM GMS was held. resolutions was uploaded on the Bank’s website on the same day as the AGM.

Report to • Report of the resolutions and evidence Reports on the results of the GMS are Regulators and of publication of Summary of Minutes submitted to the OJK and IDX no later than 2 submission of (Results) of AGM was submitted to OJK (two) working days after the implementation the evidence of (hardcopy and e-Reporting via SPE OJK) of the GMS and supplemented by the publication of the and IDX (e-Reporting via IDXNet) on 25 resume of GMS resolutions issued by the Summary of AGM’s April 2018. Notary. Minutes • The report is submitted 1 (one) working day after the implementation of the AGM. Evidence of publication of Summary of Minutes of GMS shall be submitted to OJK no later than 2 (two) working days after the announcement of the GMS and submitted to the IDX on the day the same as the date of the advertisement.

Minutes of the AGM · Deed of Minutes of AGM was submitted Deed of GMS Minutes shall be submitted to to OJK on 16 May 2018. OJK no later than 14 (fourteen) working days · The Deed of Minutes was submitted 14 after the GMS was held. (fourteen) working days after the AGM is held.

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General Meeting Of Shareholders

ONLINE VOTING AND VOTE CALCULATION MECHANISM (E-VOTING) In the voting process, decisions are made by deliberation for consensus. However, to ensure deliberation for consensus has been reached, the decision-making is conducted through voting. Voting is conducted by the shareholders or their proxies in a secret manner through an electronic mechanism (e-voting) using a Touch Screen Monitor provided by the Bank.

Specifically for the appointment of the Board of Commissioners, Board of Directors and Sharia Supervisory Board, it is conducted by individual voting.

Disclosure of AGM voting and vote calculation procedures are explained in detail in the Meeting Rules, which are announced/uploaded on the Bank’s website together with the AGM Summon and are read out by the Corporate Secretary prior to the commencement of the AGM. In addition to the Meeting Rules, a video on the voting procedure is also available on the website.

INDEPENDENT PARTY TO CALCULATE VOTES For the 2018 AGM, CIMB Niaga appointed independent parties, Notary Ashoya Ratam, SH, MKn as the Public Notary, and PT Bima Registra as the Share Registrar Bureau to conduct calculations and/or conduct vote validations.

RESOLUTION AND REALIZATION OF RESULTS OF THE AGM ON 24 APRIL 2018 The agenda, resolution and realization of the AGM on 24 April 2018 are as follows:

1st Agenda Approval of the Company’s Annual Report, and Ratification of the Company’s Financial Statements for the Realization year ended 31 December 2017

1. Approved the Company’s Annual Report for the financial year ended 31 December 2017 and ratified Realized in 2018 the Company’s Consolidated Financial Statements for the financial year ended 31 December 2017 as audited by the Public Accounting Firm of Tanudiredja, Wibisana, Rintis & Rekan (a member firm of PricewaterhouseCoopers Global in Indonesia) as stipulated in the report dated 26 February 2018 with opinion “The accompanying Consolidated Financial Statements presented fairly, in all material respects, the consolidated financial position of PT Bank CIMB Niaga Tbk and its subsidiaries as of 31 December 2017, and their consolidated financial performance and cash flows for the year then ended, in accordance with Indonesian Financial Accounting Standards”; 2. Ratified the supervisory reports as performed by the Board of Commissioners and Sharia Supervisory Board of the Company for the financial year ended on 31 December 2017; and 3. Granted full release and discharged/Acquit and discharge (volledig acquit et decharge) to the members of the Board of Directors and the Board of Commissioners including the members of the Sharia Supervisory Board of the Company for the management and supervision performed in the financial year 2017, provided that the management and supervision are reflected in the Company’s Annual Report for the financial year ended on 31 December 2017.

Votes Calculation

Agree Disagree Abstain/No Votes1)

23,891,727,369 shares or 99.9883% Nil or 0% 2,787,086 shares or 0.0117%

Total Majority Votes and Agree Votes: 23.894.514.455 shares or 100%

418 Annual Report 2018 PT Bank CIMB Niaga Tbk Supporting Corporate Governance Corporate Social Others Consolidated Business Review Report Responsibility Corporate Data Financial Report

2nd Agenda Realization Determination on the use of the Company’s profits for the financial year ended 31 December 2017

Approved the appropriation of the Company’s Net Profit for the financial year of 2017 in the total amount of Realized in 2018 Rp2,977,738,301,607 (consolidated) with the following descriptions: 1. Distribution of cash dividends to a maximum of 20% of the Company’s net profit or amounted maximum up to Rp595,547,660,321 (gross), with the following schedule: - Cum Dividend in the Regular and 2 May 2018 - Recording date for entitled 7 May 2018 Negotiation Market shareholders - Ex Dividend in the Regular and 3 May 2018 - Ex Dividend in Cash Market 8 May 2018 Negotiation Market - Cum Dividend in Cash Market 7 May 2018 - Dividend Payment for Financial Year 24 May 2018 of 2017 2. The Company does not set aside statutory reserves fund from net profit of the financial year of 2017, since the amount of statutory reserves fund of the Company had fulfilled the provisions of the minimum mandatory amount of statutory reserves fund in accordance with Article 70 of Law No. 40 of 2007 concerning Limited Liability Companies. 3. Book the remaining financial year of 2017 net profit as retained earnings to finance the Company’s business activities.

Votes Calculation

Agree Disagree Abstain/No Votes1)

23,894,383,702 shares or 99.9995% Nil or 0% 130,753 shares or 0.0005%

Total Majority Votes and Agree Votes: 23,894,514,455 shares or 100%

3rd Agenda Appointment of the Public Accountant and Public Accounting Firm for The Financial Year of 2018 and The Realization Determination of the Honorarium and other Requirements related to the Appointment

1. Approved the appointment of Angelique Dewi Daryanto, SE., CPA, and Public Accounting Firm Tanudiredja, Realized in 2018 Wibisana, Rintis & Rekan (a member firm of PricewaterhouseCoopers Global in Indonesia) respectively as Public Accountant and Public Accounting Firm registered in OJK, or other Public Accountant from the same Public Accounting Firm in the absence of the respective person to conduct audit of the Company’s Financial Statements for financial year of 2018;

2. Delegation of authority to the Board of Commissioners of the Company to appoint another Public Accounting Firm, if there is an objection from the OJK for the appointment of Public Accounting Firm Tanudiredja, Wibisana, Rintis & Partners or the said Public Accounting Firm performed partnership restructuring to become a different Public Accounting Firm. The following provisions apply to the said delegation of authority: a. Other Public Accounting Firm appointed by the Board of Commissioners must be one of the big four Public Accounting Firms in Indonesia; b. The appointment has received recommendation from the Audit Committee of the Company; c. The amount of the honorarium and other terms of appointment for other Public Accounting Firm shall be determined competitively and fairly; and d. The appointment of other Public Accounting Firm should not contradict with the applicable laws and regulations.

3. Approved the proposed honorarium of the Public Accounting Firm for financial year of 2018, as follows: a. Annual audit fee of the Company is Rp7,432,000,000 (gross); b. Audit fee for subsidiary (PT CIMB Niaga Auto Finance) is Rp648,000,000 (gross).

4. Delegation of authority to the Board of Directors of the Company to carry out matters deemed necessary in connection with the appointment of the Public Accountant and Public Accounting Firm including but not limited to the process of conducting meetings and signing the appointment letter for the Public Accountant and Public Accounting Firm.

Votes Calculation

Agree Disagree Abstain/No Votes1)

23.894.383.702 shares or 99,9995% Nil or 0% 130.753 shares or 0,0005%

Total Majority Votes and Agree Votes: 23,894,514,455 shares or 100%

Annual Report 2018 PT Bank CIMB Niaga Tbk 419 Management Discussion Performance Highlights Management Reports Company Profile and Analysis Risk Management

General Meeting Of Shareholders

4th Agenda Re-appointment of 1 (one) member of the Board of Directors and 1 (one) member of the Board of Realization Commissioners of the Company

1. Approved the re-appointment of John Simon as Director of the Company and David Richard Thomas as a Realized in 2018 Commissioner of The Company, effective from the closing of the Meeting until the closing of the fourth Annual General Meeting of Shareholders. Thus, the composition of the Board of Commissioners and the Board of Directors remains the same. 2. Approved the granting of authority to the Board of Directors of the Company with the rights of substitution, to restate the resolution regarding the composition of the members of the Board of Commissioners and Board of Directors of the Company in the notarial deed and notifying the relevant authorities and with due regard to the foregoing, to perform other necessary matters in accordance with the provisions of the prevailing laws and regulations;

- Re-appointment of John Simon as a Director of the Company:

Votes Calculation

Agree Disagree Abstain/No Votes1)

23.857.322.302 shares atau 99,8443% 1.295.100 shares or 0,0054% 35.897.053 shares or 0,1502%

Total Majority Votes and Agree Voice = 23.893.219.355 shares or 99,9946%

- Re-appointment of David Richard Thomas as a Commissioner of the Company:

Votes Calculation

Agree Disagree Abstain/No Votes1)

23.857.322.302 shares atau 99,8443% 1.295.100 shares or 0,0054% 35.897.053 shares or 0,1502%

Total Majority Votes and Agree Voice = 23.893.219.355 shares or 99,9946%

5th Agenda Determination of the amount of salary, honorarium, tantiem/bonus, and other allowances for the Board of Realization Commissioners, the Board of Directors and the Sharia Supervisory Board of the Company

1. Approved and determined the salary or honorarium and other allowances for the Board of Commissioners Realized in 2018 and the Sharia Supervisory Board of the Company for the financial year of 2018; and approved the delegation of authority to the President Commissioners to determine the salary or honorarium and other allowances for each members of the Board of Commissioners and the Sharia Supervisory Board of the Company for the financial year of 2018; Approved the proposed salary or honorarium and other allowances for the Board of Commissioners and the Sharia Supervisory Board for the financial year of 2018, as follows: a. Total amount for the Board of Commissioners is Rp19,741,791,391 (gross) per annum; b. Total amount for the Sharia Supervisory Board is Rp1,763,668,280 (gross) per annum. 2. Approved the amount of the tantiem/bonus for the Board of Directors (gross) for the financial year of 2017 amounted to Rp81,374,275,500 (gross) per annum. Accordingly, the Board of Commissioners (including the Independent Commissioners) will not receive any bonus/tantiem; 3. Approved the delegation of authority to the Board of Commissioners of the Company to determine the remuneration, holiday allowance and other allowances for the Board of Directors and each Director of the Company for the financial year of 2018 and the tantiem/bonus for the financial year of 2017 for each Director, by taking into account the recommendation from the Nomination and Remuneration Committee of the Company.

Votes Calculation

Agree Disagree Abstain/No Votes1)

23,893,878,602 shares or 99.9973% 20,100 shares or 0.0001% 615,753 shares or 0.0026%

Total Majority Votes and Agree Votes = 23.894.494.355 shares or 99,9999%

420 Annual Report 2018 PT Bank CIMB Niaga Tbk Supporting Corporate Governance Corporate Social Others Consolidated Business Review Report Responsibility Corporate Data Financial Report

6th Agenda Realization Approval of the Company’s Recovery Plan

1. Approved the Recovery Plan which has been prepared and submitted by the Company to OJK on 19 Realized in 2018 December 2017; 2. Approved the plan to issue debt and or investment instrument with capital characteristic, namely : a. Issuance of financial instrument (among other in the form of subordinated bonds) with capital characteristic and write-down feature; through public offering; and or; b. Issuance of debt or investment instrument with capital characteristic and conversion feature through public offering. In the amount and tenure that will be defined by the Company and approved by OJK, and will be implemented in accordance with the capital market laws and regulations and other related regulations. 3. Approved the delegation of authority to the Board of Commissioners and Board of Directors of the Company to perform each and all actions to achieve the aforementioned purpose, including when it is required to appoint a Public Accounting Firm with the same provisions applicable to the Public Accounting Firm that audits the Company’s Financial Statements for the year 2018.

Votes Calculation

Agree Disagree Abstain/No Votes1)

23,894,383,702 shares or 99.9995% Nil or 0% 130,753 shares or 0.0005%

Total Majority Votes and Agree Votes = 23,894,514,455 shares or 100%

7th Agenda Realization Others

Others: Realized in 2018 1. In accordance with the OJK Regulation Number 30/POJK.04/2015, it was reported to the Meeting on the accountability for the use of the proceeds from the Public Offering of the Shelf Registration Bond II Bank CIMB Niaga Phase II (“PUB Phase II”) and Phase III (“PUB Phase III”) Year 2017. As per report that has been submitted to the OJK Capital Market No.003/DIR/2018 dated 10 January 2018, with copies to the IDX and OJK Bank Supervision that stated up to 31 December 2017 all proceeds obtained from the PUB Phase II amounted to Rp1,994,238,165,872 and PUB Phase III amounted to Rp1,994,571,571,109 (both after deducted by issuance costs), entirely have been used in accordance with the plan of funds usage as disclosed in the Prospectus to finance the credit expansion. 2. It was reported to the meeting on the implementation of share buyback of the Company (share buyback), that the Company has repurchased (bought backed) 208,216,392 shares from public shareholders with price range per share between Rp1,191 up to Rp1,398 (or average of Rp1,253 per share) with total cost amounted to Rp261,874,305,672. Thus, the period of share buyback of the Company’s shares has ended on 22 February 2018. Implementation of share-based loyalty program in the Employee and Management Ownership Program, that the proceed of the share buyback of the Company is used for: a. The Employee Share Grant of approximately 12 million shares (5.7%) that will be fully realized to the Employee in 2018; b. Provide Option Rights to Purchase Shares for Management and Employees Share Option Program (“MESOP”) of approximately 196.2 million shares (94.3%) that will be Realized gradually by 40% in 2018, 30% in 2019 and 30% in 2020.

Notes: 1) In accordance with Article 13 paragraph 13.4 Articles of Association of the Company: “Abstain or invalid votes is considered not exist and is not counted in determining the number of votes casted at the Meeting, provided that shareholders who do not cast the vote oblige to comply and respect the resolution passed made in relevent agenda of the Meeting.”

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General Meeting of Shareholders

Extraordinary GMS 19 December 2018 In 2018, CIMB Niaga held an EGM on 19 December 2018.

Time and Place 19 December 2018 at 14.18 - 14.56 Western Indonesian Time

Venue Venue that was easily accessible by shareholders: Sasando Room Graha CIMB Niaga M Floor Jl Jenderal Sudirman Kav. 58 South Jakarta 12190.

Quorum The EGM was attended by shareholders and/or their proxies representing 23,730,711,762 shares or 95.18% of all Class A and Class B shares with voting rights issued by the Bank totaling 24,933,211,057 shares (excluding Treasury stock with the total of 198,395,786 shares).

Chairman of EGM Glenn Muhammad Surya Yusuf, Vice President Commissioner as Chairman of EGM

The presence of members of the Board of Glenn Muhammad Surya Yusuf as Vice President Commissioner and all other members of Commissioners including the President the Board of Commissioners were present (except Armida Salsiah Alisjahbana who was Commissioner unable to attend).

The presence of the Chairman of the Zulkifli M. Ali as Chairman of the Audit Committee was present. Audit Committee and members of the Jeffrey Kairupan as a Member of the Audit Committee was present. Audit Committee

The presence of the Chairman of Pri Notowidigdo as Chairman of the Nomination and Remuneration Committee was the Nomination and Remuneration present. Committee

The presence of the Chairman of the Risk Zulkifli M. Ali as Chairman of the Risk Oversight Committee was present. Oversight Committee

The presence of members of the Board of Tigor M. Siahaan as President Director and all members of the Board of Directors were Directors including the President Director present (except John Simon and Lani Darmawan who were unable to attend).

The presence of the Compliance Director Fransiska Oei as Compliance Director (Independent Director) was present.

Independent parties to calculate quorum Notary Ashoya Ratam, SH, MKn as Public Notary. and votes for EGM resolutions PT Bima Registra as the Share Registrar Bureau.

Number of shareholders who raise There were no shareholders who raise questions and/or give opinions at the EGM. questions and/or give opinions at the EGM

The implementation stages of the EGM on 19 December 2018 as follows:

Description Implementation Stipulations

EGM Notification to Regulators Notification of the EGM Plan to the Financial Notification of the date and agenda of the Services Authority (OJK) and the Indonesia GMS which should be disclosed clearly and Stock Exchange (IDX) (e-Reporting) was in detail, must be submitted no later than 5 submitted on 25 October 2018. (five) working days prior to the date of the GMS announcement to the public.

Announcement of EGM • Announced in the Investor Daily and The Announced at least through 1 (one) national Jakarta Post newspapers on 2 November daily newspaper in Indonesian, the IDX site 2018. and the Bank’s official website no later than • Evidence of advertisement submitted to 14 (fourteen) days prior to the date of the GMS OJK (hardcopy and e-Reporting via SPE Summons. OJK) and IDX (e-reporting via IDXNet) on the same day. Evidence of Announcement Advertisements • Uploaded on the Bank’s website www. shall be submitted to OJK no later than 2 cimbniaga.com on the same day. (two) working days after the announcement • Announcement was made 14 (fourteen) of the GMS and submitted to the IDX on the days prior to the EGM Summons. same day as the date of the advertisement.

Recording Date of List of Shareholders 1 (one) working day prior to the GMS entitled to attend the EGM Summons, which was on 18 November 2018.

422 Annual Report 2018 PT Bank CIMB Niaga Tbk Supporting Corporate Governance Corporate Social Others Consolidated Business Review Report Responsibility Corporate Data Financial Report

Description Implementation Stipulations

Summons with explanation of EGM agenda • Announced in the Investor Daily and Announced at least through 1 (one) The Jakarta Post newspapers on 19 Indonesian language national newspaper November 2018. and the Bank’s official website no later • Evidence of Summons Advertisements than 21 (twenty one) days prior to the submitted to OJK (hardcopy and implementation of the EGM. e-Reporting via SPE OJK) and IDX (e-Reporting via IDXNet) on the same Evidence of Summons advertisement day. submitted to OJK no later than 2 (two) • Uploaded on the Bank’s website www. working days after the EGM Summons and cimbniaga.com on the same day. submitted to the IDX on the same day as • Summons was conducted 28 (twenty the date of the advertisement. eight) days prior to the EGM.

EGM Implementation 19 December 2018.

Summary of Publication in • Announced in the Investor Daily and The announcement of the summary of the Minutes (Results) of Newspapers The Jakarta Post newspapers on 20 minutes of the GMS shall be announced the EGM December 2018. no later than 2 (two) working days after the • Publication of the summary of minutes GMS was held. (results) in the newspaper was announced 1 (one) working day after the EGM.

Publication on the • Brief of EGM resolutions was uploaded Based on the ASEAN CG Scorecard, Bank’s website on the Bank’s website www.cimbniaga. the Bank should publish brief of GMS com on 19 December 2018. resolutions through Bank’s website 1 (one) • Publications of the brief of EGM day after the GMS was held. resolutions was uploaded on the Bank’s website on the same day as the EGM.

Report to • Report of the Resolutions and evidence Reports on the results of the GMS Regulators and of publication of Summary of Minutes are submitted to the OJK and IDX no submission of (Results) of EGM was submitted to OJK later than 2 (two) working days after the evidence of (hardcopy and e-Reporting via SPE OJK) the implementation of the GMS and publication and IDX (e-Reporting via IDXNet) on 20 supplemented by the resume of GMS of the Summary of December 2018. resolutions issued by the Notary. EGM’s Minutes • The report is submitted 1 (one) working day after the implementation of the Evidence of publication of Summary of EGM. Minutes of GMS shall be submitted to OJK no later than 2 (two) working days after the announcement of the GMS and submitted to the IDX on the day the same as the date of the advertisement.

Minutes of the EGM • Deed of Minutes of EGM was submitted Deed of GMS Minutes shall be submitted to to OJK on 14 January 2019. FSA no later than 14 (fourteen) working days • The Deed of Minutes was submitted 14 after the GMS was held. (fourteen) working days after the EGM was held.

Specifically for the appointment of the Board of Commissioners, Board of Directors and Sharia Supervisory Board, it is conducted by individual voting.

Disclosure of EGM voting and vote calculation procedures are explained in detail in the Meeting Rules, which are announced/uploaded on the Bank’s website together with the EGM Summon and are read out by the Corporate Secretary prior to the commencement of the EGM. In addition to the Meeting Rules, videos on the voting procedure and the Electronic Voting Guidance Scheme are also available on the website.

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General Meeting of Shareholders

INDEPENDENT PARTY TO CALCULATE VOTES For the 2018 EGM, dated 19 December 2018, CIMB Niaga appointed independent parties, Notary Ashoya Ratam, SH, MKn as the Public Notary, and PT Bima Registra as the Share Registrar Bureau to conduct calculations and/or conduct vote validations.

RESOLUTIONS AND REALIZATION OF RESULTS OF THE EGM ON 19 DECEMBER 2018 The agenda, resolutions and realization of the EGM on 19 December 2018 are as follows:

Agenda Realization Changes of Management Composition of the Company

1. The meeting has determined and accepted the resignation of: Realized in 2018 a. Dato‘ Sri Nazir Razak from his position as President Commissioner of the Company effective on 19 October 2018

Votes Calculation

Agree Disagree Abstain/No Votes1)

23,721,733,779 shares or 99.9622% 8,624,414 shares or 0.0363% 353,569 shares or 0.0015%

Total Majority Votes and Agree Votes = 23,722,087,348 shares or 99.9637% (Agree)

b. Armida Salsiah Alisjahbana from her position as Independent Commissioner of the Company Realized in 2019 effective on 1 January 2019.

Votes Calculation

Agree Disagree Abstain/No Votes1)

23,721,733,779 shares or 99.9622% 8,624,414 shares or 0.0363% 353,569 shares or 0.0015%

Total Majority Votes and Agree Votes = 23,722,087,348 shares or 99.9637% (Agree)

c. Wan Razly Abdullah from his position as Director of the Company on 1 January 2019 Realized in 2019

Votes Calculation

Agree Disagree Abstain/No Votes1)

23,721,733,779 shares or 99.9622% 8,624,414 shares or 0.0363% 353,569 shares or 0.0015%

Total Majority Votes and Agree Votes = 23,722,087,348 shares or 99.9637% (Agree)

with the utmost gratitude and appreciation for the service and dedication while serving as the President Commissioner, Independent Commissioner and Director of the Company.

In accordance with the provisions of Article 14 paragraph 14.6 and Article 17 paragraph 17.6 of the Company’s Articles of Association, the discharge and release of responsibility (volledig acquit et decharge) for the supervisory actions conducted during the tenure, since the last responsibility until the effective date of the resignation, will be requested for approval at the Company’s Annual General Meeting of Shareholders (“AGM”) for fiscal year 2018 to be held in 2019.

424 Annual Report 2018 PT Bank CIMB Niaga Tbk Supporting Corporate Governance Corporate Social Others Consolidated Business Review Report Responsibility Corporate Data Financial Report

Agenda Realization Changes of Management Composition of the Company 2. Approved the honorable discharge of Tengku Dato’ Sri Zafrul Tengku Abdul Aziz from his position Tengku Dato’ Sri Zafrul Tengku as the Commissioner of the Company and simultaneously appoint him as President Commissioner Abdul Azis effectively serves of the Company, with the tenure since the closing of the Meeting, and will be effective since the as President Commissioner obtainment of OJK approval and/or the fulfillment of requirements as determined in the OJK letter on 15 March 2019. in question (“Effective Date”) until the closing of the fourth AGM of the Company after the Effective Date, without prejudicing the rights of GMS to discharge at any time as stipulated on Article 119 Law No. 40 of 2007 regarding Limited Liability Company (“UUPT”).

In terms of OJK does not give such approval, or such requirements as determined by OJK regarding the appointment of the person in question is not fulfilled, therefore such appointment will be null and void without any approval from the GMS, and therefore the position of the person in question remains the same, namely as the Commissioner of the Company.

Votes Calculation Agree Disagree Abstain/No Votes1) 23,721,733,279 shares or 99.9622% 8,624,414 shares or 0.0363% 354,069 shares or 0.0015% Total Majority Votes and Agree Votes = 23,722,087,348 shares or 99.9637% (Agree)

3. Approved the appointment of Lee Kai Kwong as Director of the Company, with the tenure effective Due to the appointment of since 1 January 2019 and will be effective with regard of the OJK Approval and/or fulfillment of Lee Kai Kwong as Director, requirements as determined on the OJK letter in question (Effective Date) until the closing of the the Bank has submitted Fit fourth AGM of the Company after the Effective Date, without prejudicing the rights of GMS to and Proper proposal to OJK. discharge at any time as stipulated on Article 105 UUPT. Currently the Bank is waiting for OJK approval. In terms of OJK does not give such approval, or such requirements as determined by OJK regarding the appointment of the person in question is not fulfilled, therefore such appointment will be null and void without any approval from the GMS.

4. With the decision and acceptance also effectiveness of the resignation of member of Board of The composition of Board Commissioners and Board of Directors as mentioned above, and with the appointment of Tengku of Commissioners and Dato’ Sri Zafrul Tengku Abdul Azis as President Commissoner and Lee Kai Kwong as Director Board of Directors based on become effective, the Management composition of the Company is as follow: the resolution of the EGM will be realized after the appointment of Tengku Dato’ Sri Zafrul Tengku Abdul Azis as President Commissoner and Lee Kai Kwong as Director become effective.

Board of Commissioner Director 1. Tengku Dato’ Sri Zafrul Tengku Abdul Aziz, President Commissioners*) 1. Tigor M. Siahaan, President Director 2. Glenn Muhammad Surya Yusuf, Vice President Commissioners 2. Rita Mas’Oen, Director 3. Zulkifli M. Ali, Independent Commissioner 3. Megawati Sutanto, Director 4. Pri Notowidigdo, Independent Commissioner 4. Vera Handajani, Director 5. Jeffrey Kairupan, Independent Commissioner 5. John Simon, Director 6. David Richard Thomas, Commissioner 6. Lani Darmawan, Director 7. Pandji P. Djajanegara, Director 8. Hedy Lapian, Director 9. Fransiska Oei, Compliance Director (Independent Director) 10. Rahardja Alimhamzah, Director 11. Lee Kai Kwong, Director *)

*) effective after obtaining approval from OJK and/or fullfillment of the requirements as determined on the OJK approval letter

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General Meeting of Shareholders

Agenda Realization Changes of Management Composition of the Company

5. Granting the power of attorney to the Board of Directors of the Company with substitution rights, Realized in 2018 to restate the decision regarding the change of composition of member of Board of Commissioners and Board of Directors of the Company in the notarial deed, inform to the authorized agencies, register, and also in conduct such necessary actions in accordance with the prevailing laws and regulations of the Republic of Indonesia.

Notes: 1) In accordance with the provisions of article 13, paragraph 13.4 Articles of Association of the Company: ”Shareholders of the shares with valid voting rights attending the GMS who are abstain (not voting) shall be deemed to cast the same vote as the majority of the vote, with condition that the voting shareholders are required to comply with and respect the decisions taken for the relevant agenda of the GMS.

RESOLUTIONS AND REALIZATION OF THE RESULT OF THE PREVIOUS YEAR GMS The resolutions and realization of the previous year GMS results as follows:

The resolutions and realization of AGM on 25 APRIL 2017

1st Agenda Approval of the Company’s Annual Report and Ratification of the Company’s Financial Statements Realization for the financial year ended on 31 December 2016

1. To approve the 2016 Annual Report and to ratify the Company’s Consolidated Financial Statements Realized in 2017 for the financial year of 2016 which was audited by the Public Accounting Firm Tanudiredja, Wibisana, Rintis & Rekan (a member firm of PricewaterhouseCoopers Global in Indonesia) as stipulated in the report dated 17 February 2017 with the opinion “The Consolidated Financial Statements present fairly, in all material respects, the consolidated financial position of PT Bank CIMB Niaga Tbk and Subsidiaries as of 31 December 2016, the consolidated performance and their cash flows for the year end at the above mentioned date is in accordance with the Indonesian Financial Accounting Standards“; 2. Ratify the annual Supervisory Report of the Board of Commissioners and the Sharia Supervisory Board of the Company for the financial year of 2016; and 3. Acquit and discharge (“volledig acquit et décharge”) the members of the Board of Directors and the Board of Commissioners including the Sharia Supervisory Board of the Company for the management and supervision performed in the financial year of 2016, provided that the management and supervision are reflected in the Company’s annual report for the financial year ended 31 December 2016.

Votes Calculation

Agree Disagree Abstain/No Votes1)

23,799,927,057 shares or 99.989% 3,978 shares or 0.001% 2,607,068 shares or 0.010%

Total Majority Votes and Agree Votes = 23,802,534,125 shares or 99,999%

2nd Agenda Realization Determination on the use of the Company’s Profits for the Financial Year ended 31 December 2016

To approve the the appropriation of the Net Profit of the Company for the financial year of 2016 in the Realized in 2017 total amount of Rp2,081,687,000,000 with the following description: 1. No distribution of dividend for the financial year 2016; 2. Company does not set aside any amount of its net profit for the financial year of 2016 as statutory reserves fund, since the amount of statutory reserves fund of the Company have complied with the minimum required amount of statutory reserve fund in accordance with Article 70 of Law No. 40 Year 2007 concerning Limited Liability Companies.

Therefore, the total Company’s Net Profit for the financial year of 2016 will be used to finance the business activities of the Company.

Votes Calculation

Agree Disagree Abstain/No Votes1)

23,799,000,943 shares or 99.985% 3,060,285 shares or 0.013% 476,875 shares or 0.002%

Total Majority Votes and Agree Votes = 23,799,477,818 shares or 99,987%

426 Annual Report 2018 PT Bank CIMB Niaga Tbk Supporting Corporate Governance Corporate Social Others Consolidated Business Review Report Responsibility Corporate Data Financial Report

3rd Agenda Appointment of Public Accounting Firm for Financial Year of 2017 and The Decision on its Realization Honorarium and other Requirements related to the Appointment

1. To approve the appointment of Angelique Dewi Daryanto, S.E, CPA as Public Accountant and Public Realized in 2017 Accounting Firm “Tanudiredja, Wibisana, Rintis & Rekan” (a member firm of PricewaterhouseCoopers Global in Indonesia) as a Public Accounting Firm registered in the Financial Services Authority, or other Public Accountant from the same Public Accounting Firm in the event that the respective Accountant is unable to conduct the audit on Company’s Financial Statement for financial year of 2017. 2. Delegation of authority to the Board of Commissioners to appoint another Public Accounting Firm, if there is an objection from the OJK to the appointment of Public Accounting Firm “Tanudiredja, Wibisana, Rintis & Rekan” or the said Public Accounting Firm performed a partnership restructuring to become a different Public Accounting Firm; 3. To approve the proposed honorarium of the Public Accounting Firm for financial year of 2017, as follows: a. The Company’s annual audit fee of Rp7,220,000,000; b. The Audit fee of Subsidiary (PT CIMB Niaga Auto Finance) is Rp1,080,000,000; 4. Delegation of authority to the Board of Directors of the Company to perform matters deemed necessary in connection with the appointment of the Public Accountant, including but not limited to the process of conducting the AGM and the signing of the appointment letter for Public Accountant and Public Accounting Firm.

Votes Calculation

Agree Disagree Abstain/No Votes1)

23,602,194,276 shares or 99.158% 199,202,813 shares or 0.837% 1,141,014 shares or 0.005%

Total Majority Votes and Agree Votes = 23,603,335,290 shares or 99.163%

4th Agenda Determination on the Salary/Honorarium and Allowances for members of Board of Commissioners, Realization Board of Directors and Sharia Supervisory Board of the Company

1. Approved and determined the of salary or honorarium and/or other allowances for the Board of Realized in 2017 Commissioners and the Sharia Supervisory Board for financial year of 2017: a. All members of the Board of Commissioners, a maximum of Rp19,300,000,000 (gross) per annum; b. All members of the Sharia Supervisory Board, a maximum of Rp1,800,000,000 (gross) per annum; c. to delegate the authority to the President Commissioner to determine the amount of salary or honorarium and other allowances for each member of the Board of Commissioners and Sharia Supervisory Board of the Company for the financial year of 2017; 2. To approve the amount of tantiem/bonus including Holiday Allowance to all members of the Board of Directors for financial year 2016 maximum Rp67,386,431,863 (gross) per annum; 3. To approve the delegation of authority to the Board of Commissioners of the Company to determine the amount of salary or honorarium, bonus/tantiem and other allowances for the Board of Directors and each member of the Board of Directors of the Company for the financial year of 2017 provided that the Board of Commissioners shall observe the advice or opinion of the Nomination and Remuneration Committee.

Votes Calculation

Agree Disagree Abstain/No Votes1)

23,786,057,258 shares or 99.931% 15,563,899 shares or 0.065% 916,946 shares or 0.004%

Total Majority Votes and Agree Votes = 23,786,974,204 shares or 99.934%

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General Meeting of Shareholders

5th Agenda - Accountability of the realization of the use of proceeds from the Public Offering of Shelf- Registration Bonds II of Bank CIMB Niaga Phase I Year 2016 (“PUB II 2016”) Realization - Reaffirmation of the Independent Director in compliance with Stock Exchange Regulation No. I-A concerning Listing of Shares (Stock) and Equity-Type Securities other than Shares issued by the Listed Company

1. In accordance with POJK No. 30/POJK.04/2015, the AGM reports on the accountability for the use of No decision required as it is proceeds from the Public Offering of Shelf-Registration Bonds II of Bank CIMB Niaga Phase I Year a report 2016 (“PUB II 2016”). In line with the report that has been submitted to the OJK of Capital Market and the Stock Exchange that up to 31 December 2016 all funds obtained from PUB II 2016 amounting to Rp1,000,000,000,000 entirely have been used for credit expansion in accordance with the plan for the use of funds as disclosed in the Prospectus of PUB II 2016. 2. The Company reaffirms that all of the Directors of the Company have no affiliation relationship with the Controlling Shareholders nor with members of the Board of Commissioners and other members of the Board of Directors, have no concurrent positions other than at controlled subsidiary companies; and no-one has been an insider person at an institution or capital market support organization, whose services are used by the Company. However, to comply with the provisions of Stock Exchange Regulation No. I-A concerning the Listing of Shares (Stock) and Equity-Type Securities in addition to Shares Issued by a Listed Company, it is informed that the elected and appointed Independent Director is Fransiska Oei, the Compliance Director.

The agenda, realization and resolutions of the EGM in 2017 are as follows:

Agenda Realization Buyback of the Company’s shares (share buyback) at a maximum of 2% of the paid up Capital

1. To approve the share buyback of the public shareholders and Khazanah Nasional Berhad at a This decision was amended maximum of 2% of paid up capital to be used as a stock-based loyalty program for management and by the decision of the EGM 24 employees (MESOP) with the objective to improve productivity and performance of management August 2017 and employees, as well as to generate a sense of ownership to the Company. 2. To approve the authorization for the Board of Directors to exercise the share buyback maximum 18 months after the approval of this EGM and after obtaining approval from the authorities, and at a price deemed satisfactory by the Company but not exceeding the maximum amount of Rp500,000,000,000, including broker dealer commissions and other related costs. 3. In the event that the repurchase of such shares is unenforceable, including due to the objection from the authorities, then this decision shall be void without requiring GMS approval.

Votes Calculation

Agree Disagree Abstain/No Votes1)

23,854,235,635 shares or 99.996% 3,978 shares or 0.001% 948,621 shares or 0.003%

Total Majority Votes and Agree Votes = 23,855,184,256 shares or 99.999%

1) In accordance with Article 13 paragraph 13.4 Article of Association of the Company: Abstain or invalid votes is considered not exist and is not counted in determining the number of votes casted at the Meeting, provided that shareholders who do not cast the vote oblige to comply and respect the resolution passed made in relevant agenda of the Meeting.

428 Annual Report 2018 PT Bank CIMB Niaga Tbk Supporting Corporate Governance Corporate Social Others Consolidated Business Review Report Responsibility Corporate Data Financial Report

RESOLUTIONS AND REALIZATION OF THE RESULTS OF EGM ON 24 AUGUST 2017

1st Agenda Approval of changes to the composition of the Board of Commissioners and Board of Directors of Realization the Company

1. To approve the resignation of Ahmad Zulqarnain Onn from his position as Commissioner of the Realized in 2017 Company effective as of the closing of this Meeting, accompanied by acknowledgment and appreciation for his contribution and dedication during his tenure as a Commissioner of the Company; The release and discharge for his supervisory action that has been carried out since his last release and discharge up to the effective date of his resignation shall be sought for approval at the 2017 AGM meeting to be held in 2018.

2. To approve the appointment of Tengku Dato ‘Sri Zafrul Tengku Abdul Aziz as Commissioner of the Company, with effective term of office starting from the approval of the OJK on the Fit and Proper Test (“Effective Date”) up to the close of the 4th AGM after the Effective Date, without prejudice to the right of the GMS to terminate at any time in accordance with the provisions of Article 119 of Law No. 40 Year 2007 regarding Limited Liability Company (“UUPT”). In the event that the OJK does not give consent, or the requirements stipulated by the OJK for the appointment are not met, then the appointment becomes null and void without any GMS approval required.

3. To approve the appointment of Rahardja Alimhamzah as Director of the Company, with effective term of office starting from the close of the Meeting (“Effective Date”) up to the close of the 4th AGM after the effective date, without prejudice to the right of the GMS to terminate at any time pursuant to Article 105 UUPT.

Thus the composition of the Board of Commissioners (since the effective appointment of Tengku Dato ‘Sri Zafrul Tengku Abdul Aziz), namely obtaining OJK approval and the composition of the Board of Directors of the Company (since the effective appointment of Rahardja Alimhamzah) are as follows:

Board of Commissioners : - Dato ‘Sri Nazir Razak, President Commissioner - Glenn Muhammad Surya Yusuf, Vice President Commissioner - Zulkifli M. Ali, Independent Commissioner - Pri Notowidigdo, Independent Commissioner - Armida Salsiah Alisjahbana, Independent Commissioner - Jeffrey Kairupan, Independent Commissioner - David Richard Thomas, Commissioner - Tengku Dato ‘Sri Zafrul Tengku Abdul Aziz, Commissioner

Board of Directors: - Tigor M. Siahaan, President Director - Wan Razly Abdullah, Director - Rita Mas’Oen, Director - Megawati Sutanto, Director - Vera Handajani, Director - John Simon, Director - Lani Darmawan, Director - Pandji P. Djajanegara, Director - Hedy Lapian, Director - Fransiska Oei, Compliance Director (Independent) - Rahardja Alimhamzah, Director

Votes Calculation

Resignation of Ahmad Zulqarnain Onn as Commissioner of the Company

Agree Disagree Abstain/No Votes1)

23,567,104,718 shares or 99.51% 1,769,278 shares or 0.0075% 114,462,466 shares or 0.48%

Total Majority Votes: 23,681,567,184 shares or 99.992% (Agree)

Votes Calculation

Appointment of Tengku Dato’ Sri Zafrul Tengku Abdul Aziz as Commissioner of the Company

Agree Disagree Abstain/No Votes1)

23,669,600,003 shares or 99.94% 1,769,278 shares or 0.0075% 11,967,181 shares or 0.05%

Total Majority Votes: 23,681,567,184 shares or 99.992% (Agree)

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General Meeting of Shareholders

Votes Calculation

Appointment of Rahardja Alimhamzah as Director of the Company

Agree Disagree Abstain/No Votes1)

23,649,051,303 shares or 99.86% 1,769,278 shares or 0.0075% 32,515,881 shares or 0.14%

Total Majority Votes: 23,681,567,184 shares or 99.992% (Agree)

2nd Agenda Realization Approval of the amendment to the Articles of Association of the Company

1. To approve amendment of a number of articles of the Company’s Articles of Association and Realized in 2017 subsequently restatement all the Company’s Articles of Association. 2. To approve the granting of authorities to the Board of Directors of the Company, with the right of substitution to restate the resolution concerning the amendment and restatement of all provisions of Articles of Association of the Company in the Notarial Deed and report it to the competent authorities, and with due regard to the foregoing to act all necessary matters including additions and/or adjustments with due regard to the provisions of laws and regulations.

Votes Calculation

Agree Disagree Abstain/No Votes1)

23,661,379,108 shares or 99.91% 18,892,478 shares or 0.08% 3,064,876 shares or 0.01%

Total Majority Votes and Agree Votes = 23,664,443,984 shares or 99.92% (Agree)

3rd Agenda Realization Revision to the Approval of Share Buyback Plan

1. To approve the changes on share buyback plan and the implementation of stock-based loyalty Realized in 2018 program for management and employees (MESOP) which has been approved in the EGM dated 25 April 2017. 2. To approve the share buyback from public shareholders up to a maximum of 2% of the Paid-up Capital or a maximum of 503,000,000 (five hundred and three million) shares, at a maximum cost of Rp500,000,000,000 (five hundred billion Rupiah) which includes broker-dealer commissions and other costs incurred in connection with the purchase, to be used as a stock-based loyalty program for management and employees in the Employee and Management Ownership Program in the form of: (i) Shares Grant, and (ii) Management Employee Stock Ownership Plan (“ MESOP “). 3. To grant authority to the Board of Directors of the Company to exercise share buyback pursuant to prevailing regulations including Capital Market regulations within 12 months from the closie of the Meeting. 4. To grant authority to the Board of Directors of the Company to determine the eligibility criteria with the terms and conditions of the stock-based loyalty program. 5. In the event that the share buyback may not be executed by any reason, including not obtaining approval from authorities, this decision shall be void without the need for approval from the GMS.

Votes Calculation

Agree Disagree Abstain/No Votes1)

23,682,776,608 shares or 99.9976% 474,878 shares or 0.0020% 84,976 shares or 0.0004%

Total Majority Votes and Agree Votes = 23,682,861,584 shares or 99.998% (Agree)

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Board of Commissioners

One of CIMB Niaga’s Corporate Governance bodies is 2. The CIMB Niaga Board of Commissioners is headed the Board of Commissioners that has the duties and by a President Commissioner. responsibilities to supervise the Bank in accordance 3. One or more members may be appointed Vice with the Articles of Association, as well as to ensure that President Commissioner. The position of Vice the Bank conducts its business in accordance with the President Commissioner is currently held by Glenn established objectives. The Board of Commissioners Muhammad Surya Yusuf. must supervise and provide advice regarding the 4. At least 1 (one) member of the Board of implementation of the Board of Directors duties and Commissioners must be domiciled in Indonesia, responsibilities as well as other functions set forth in the CIMB Niaga has 4 (four) Board of Commissioners Articles of Association and the rules and regulations. members domiciled in Indonesia. The Board of Commissioners also ensures that the 5. 4 (four) out of 7 (seven) persons, or more than Bank implements the Good Corporate Governance 50% (fifty percent) of the Board of Commissioners (GCG) principles at every level of the organization. In members must be Independent Commissioners. performing its duties and responsibilities, the Board of 6. 4 (four) out of 7 (seven) persons, or more than Commissioners must act in an independent manner. 50% (fifty percent) of the Board of Commissioners members must be Indonesian Citizens. LEGAL BASIS 7. The replacement and/or appointment of CIMB The legal basis for the establishment and the Niaga Board of Commissioners members appointment of the Board of Commissioners of CIMB has considered the recommendations of the Niaga refers to several regulations, including: Nomination and Remuneration Committee and 1. Republic of Indonesia Law on Limited Liability has obtained the approval of the GMS and OJK. Companies. 8. No CIMB Niaga Commissioners have family 2. Bank’s Articles of Association. relationship up to the second degree with other 3. Financial Services Authority (OJK) Regulations, members of the Board of Commissioners and/or OJK Circular Letters, Bank Indonesia (BI) Board of Directors and the Ultimate Shareholder. Regulations, and BI Circular Letters relating to the 9. All Board of Commissioners members have passed implementation and organisation of Corporate the Fit and Proper Test. Governance. 4. Deed of Meeting Resolution No. 67 dated 18 In line with the principles of the ASEAN Corporate December 2018 concerning the PT Bank CIMB Governance Scorecard, the Board of Commissioners Niaga Tbk Extraordinary General Meeting of composition is as follows: Shareholders Resolutions. 1. 1 (one) female member of the Board of Commissioners is an Independent Commissioner, BOARD OF COMMISSIONERS’ STRUCTURE AND namely Armida Salsiah Alisjahbana. COMPOSITION 2. The majority of the Board of Commissioners The CIMB Niaga Board of Commissioners structure members are Independent Commissioners, and and composition of members has met all prevailing include 4 (four) Independent Commissioners regulations as stipulated in the Board of Commissioners from a total of 7 (seven) Board of Commissioners Charter, which include: members. 1. The total number of CIMB Niaga Board of 3. In terms of expertise, the majority of the Board Commissioners members is at least 3 (three) of Commissioners members have a working persons and not more than the total number of experience in banking. Board of Directors members.

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Board of Commissioners

In 2018, the composition of CIMB Niaga’s Board of Commissioners is as following:

No. Name Position Period

1. Dato‘ Sri Nazir Razak*) President Commissioner

2. Glenn M.S. Yusuf Vice President Commissioner

3. Zulkifli M. Ali Independent Commissioner 2016 - 2020

4. Pri Notowidigdo Independent Commissioner

5. Jeffrey Kairupan Independent Commissioner

6. David Richard Thomas Commissioner 2018 – 2022

7. Tengku Dato’ Sri Zafrul Tengku Abdul Aziz **) Commissioner 2018 – 2022

8. Armida Salsiah Alisjahbana***) Independent Commissioner 2016 – 2020

*) Resigned as President Commissioner effective on 19 October 2018. **) Appointed in the EGM 19 December 2018 and effectively serves as President Commissioner on 15 March 2019. ***) Resigned as Independent Commissioner effective on 1 January 2019.

BOARD OF COMMISSIONERS CHARTER 7. Meetings The Board of Commissioners has a Charter that 8. Term of office is regularly updated and adjusted to conform to 9. Resignation all prevailing rules and regulations in Indonesia. 10. Performance Assessment and Accountability This Charter contains the binding work guidelines and procedures for each member of the Board of BOARD OF COMMISSIONERS DUTIES, Commissioners, enabling the Board of Commissioners RESPONSIBILITIES, AND AUTHORITY to perform its monitoring function in an efficient, The Board of Commissioners shall act and be effective, transparent, independent, and accountable responsible collegially, assisted by the Audit Committee, manner. the Risk Oversight Committee, the Nomination and Remuneration Committee and the Integrated Basis for preparing the Board of Commissioners’ Governance Committee in their respective areas. The Charter: Board of Commissioners duties, responsibilities, and 1. Bank’s Articles of Association. authority are applicable to each member of the Board 2. Law No. 40 of 2007 on Limited Liability Companies. of Commissioners: 3. OJK Regulations and OJK Circular Letters related to 1. Each member of the Board of Commissioners must Corporate Governance implementation and bodies. not act individually, and shall act based on a Board 4. General Guidelines for Good Corporate Governance of Commissioners’ decision. in Indonesia from the National Committee on 2. The Board of Commissioners shall perform their Governance Policy (KNKG). duties and responsibilities in good faith, with fully 5. ASEAN Corporate Governance Scorecard. responsibility, prudence and independence. 3. The Board of Commissioners shall ensure that The Board of Commissioners Charter was last updated the Good Corporate Governance principles are on 19 December 2017 and has been uploaded to the applied in all Bank’s business activities and at all Bank’s website www.cimbniaga.com. The Board of organizational levels at least through: Commissioners Charter sets forth the following matters: a. The implementation of the Board of 1. Structure and membership Commissioners and the Board of Directors 2. Requirements and Appointment duties and responsibilities; 3. Duties and Responsibilities b. The completeness and implementation of 4. Conflict of Interest the Committees and working units duties 5. Transparency when performing the Bank’s internal control 6. Ethics and Work Hours functions;

432 Annual Report 2018 PT Bank CIMB Niaga Tbk Supporting Corporate Governance Corporate Social Others Consolidated Business Review Report Responsibility Corporate Data Financial Report

c. The implementation of the compliance function, Combating the Financing of Terrorism (AML- CFT), and the internal and external audits; Whistleblowing, Integrated Corporate Governance, d. The risk management implementation, Related Party Transaction (RPT), Legal Lending including the internal control system; Limit (LLL), and other Bank strategies in accordance e. The provision of funds to related parties and with the prevailing regulations. provision of large funds; 10. Through the Nomination and Remuneration f. The Bank’s strategic plan; Committee, supervises the selection and g. The transparency of the Bank’s financial and assessment of candidate members for the Board of non-financial condition; Directors and the Board of Commissioners without h. The regular approval and regular review of the interference. Bank’s Vision, Mission and Core Values. 11. The Board of Commissioners shall ensure that the 4. The Board of Commissioners shall supervise the Board of Directors has taken follow up actions on management policies, the general management audit findings and recommendations from the processes and is responsible for this supervision, Bank’s Internal Audit, External Auditor, supervision and shall provide advice to the Board of Directors. results from OJK and/or other authorities. 5. In performing the supervisory duties as referred 12. The Board of Commissioners shall report to OJK to in number (3) and (4) above, the Board of within 7 (seven) working days any findings related Commissioners must direct, monitor and evaluate to: the Bank’s strategic policy implementation a. Violations of finance and banking laws and pursuant to the regulations. regulations; and 6. In the event that there is only one member of the b. Any circumstances or projected circumstances Board of Commissioners due to the absence of the that may compromise the sustainability of the other members, all duties and authorities granted Bank’s business. to the President Commissioner, or other members 13. In order to support the effectiveness of its duties of the Board of Commissioners, as described in AoA and responsibilities, the Board of Commissioners will automatically apply to him/her. shall establish at least: 7. The Board of Commissioners are prohibited from a. Audit Committee; take part in decision-making related to the Bank’s b. Risk Oversight Committee; operations, except for: c. Nomination and Remuneration Committee. a. Loan provisions to related parties as regulated 14. The Board of Commissioners shall supervise the in the OJK regulation regarding Legal Lending established Committees, as referred to in point (13) Limit for Commercial Banks; and above, so they perform their duties effectively, and b. Other matters specified in the AoA or in the shall evaluate and/or assess the performance of prevailing rules and regulations. these committees at the end of each financial year. 8. Decision making by the Board of Commissioners 15. The Board of Commissioners shall conduct active as referred to in number (7) above is part of supervision of the Compliance Function by: the supervisory functions of the Board of a. Evaluating the Bank’s Compliance Function at Commissioners so as not to negate the Board of least twice a year. Directors’ responsibility for the management of the b. Providing suggestions to improve the quality of Bank. the Bank’s Compliance Function. 9. The Board of Commissioners approves and monitors 16. Based on Point (15), the Board of Commissioners the implementation of the Bank’s strategies, the shall provide recommendations for improving the Business Plan, and several policies in accordance quality of the Compliance Function to the President with the prevailing regulations, including the Director. establishment and implementation of strategies 17. The Board of Commissioners is responsible for related to Anti-Fraud, Anti Money Laundering and ensuring the implementation of Risk Management

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Board of Commissioners

in accordance with the Bank’s characteristics, In the event that a Board of Directors member is complexity and risk profile by: temporarily dismissed, the Board of Commissioners a. Approving the Risk Management policy must convene a GMS within 90 (ninety) days after including Risk Management Strategy and the date of any dismissal, to revoke or enforce the Framework as determined based on the Bank’s dismissal decision. risk appetite and risk tolerance. 24. The Board of Commissioners may undertake Bank b. Evaluating the Risk Management policies management actions under certain circumstances and strategy at least once a year, or more and for a certain period of time. In such case, all frequently in the event of any changes in factors provisions concerning the rights, authority and significantly affecting the Bank’s business responsibilities of the Board of Directors to the activities. Bank and third parties will apply. 18. Each member of the Board of Commissioners shall 25. The Board of Commissioners is, at all times within be jointly and severally liable for any losses due to office hours, entitled to enter the buildings, yards, errors or negligence by members of the Board of or other premises used or controlled by the Bank, Commissioners in performing their duties. and is entitled to examine all accounts, letters and 19. Members of the Board of Commissioners shall not other evidence, to audit and verify the cash and be liable for losses of the Bank as referred to in point other financial conditions, as well as to know all (18) if it is proven that: actions taken by the Board of Directors. a. The loss was not due to their error or negligence; 26. The Board of Commissioners has the right to b. They performed supervision in good faith, with obtain explanations on all matters relating to the full responsibility, following prudential principles operations of the Bank and its subsidiaries, as well for the interests of, and in accordance with the as matters relating to the Bank’s ethical standards. Bank’s objectives; 27. The Board of Commissioners shall ensure that the c. There was no direct or indirect conflict of Board of Directors possess and implements the interests in management activities resulting in Financial Literacy and Financial Inclusion plans. the loss; 28. The Board of Commissioners shall prepare a d. They had taken necessary actions to prevent succession plan for the Chief Executive Officer any loss from occurring or continuing. (CEO)/President Director and key management to 20. A member of the Board of Commissioners, ensure the Bank’s sustainable future leadership. appointed by the Board of Commissioners must chair the General Meeting of Shareholders (GMS). PRESIDENT COMMISSIONER DUTIES AND 21. In the event that all members of the Board of RESPONSIBILITIES Commissioners are absent or unable to attend due In addition to the above duties and responsibilities, the to any reason whatsoever, without any requirement President Commissioner has the following additional to prove to third parties, the President Director shall duties and responsibilities: chair the GMS. 1. Coordinating the implementation of the Board of 22. In performing its duties, the Board of Commissioners Commissioners duties and responsibilities; is entitled to seek the assistance of experts for a 2. Proposing Board of Commissioners’ meetings, limited period of time. including the Meetings agenda; 23. The Board of Commissioners, based on Board of 3. Calling and chairing the Board of Commissioners’ Commissioners meeting resolutions is authorized meetings; to temporarily dismiss members of the Board of 4. Delivering the supervision report for approval from Directors by stating the reasons. the AGM on the Board of Commissioners duties and supervision performance;

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5. Ensuring that the responsibilities of the Board BOARD OF COMMISSIONERS’ TERM OF OFFICE of Commissioners have been carried out in 1. The term of office as members of the Board of accordance with the proper procedures; Commissioners shall be effective from the date 6. Ensuring that the Board of Commissioners’ specified in the GMS appointing them, until the meetings make effective decisions, based on sound close of the 4th AGM after the date of appointment and complete information, including to ensuring without prejudice to the right of GMS to dismiss that: them at any time in accordance with the AoA and a. All strategic and critical issues are taken into prevailing regulations. consideration by the Board of Commissioners 2. The appointment of Board of Commissioners b. Existing issues are carefully and thoroughly members becomes effective upon approval from discussed; the OJK or the fulfilment of the requirements c. All members of the Board of Commissioners are stipulated in the OJK approval letter relating to the given the opportunity to contribute effectively; Fit and Proper test, and other relevant authorities (if d. Each Commissioner receives relevant any), and approval by the shareholders through the information on a timely basis, including being GMS. properly briefed on issues arising at the Board 3. The term of office for the Independent of Commissioners’ meetings; Commissioners is for a maximum of 2 (two) e. The Board of Commissioners’ meetings come to consecutive periods unless otherwise stipulated by clear decisions and resolutions are noted. the prevailing laws and regulations. 7. Ensuring that the Board of Commissioners behaves 4. The position of a Board of Commissioners member in accordance with the Board of Commissioners shall end in the event of: Charter; a. The term of office ending in accordance with 8. Leading efforts to address the Board of the provisions in the Bank’s AoA; Commissioners development requirements; b. They resign in accordance with the prevailing 9. Performing other responsibilities assigned by the regulations; Board of Commissioners, from time to time; and c. They no longer comply with the legal and 10. Conducting a final evaluation on the collegial regulatory requirements; performance of the Board of Commissioners and d. They pass away; the Committees and individual evaluations on e. They are dismissed based on a resolution of the members of the Board of Commissioners and GMS; members of the Committees after taking into f. They are declared bankrupt or placed under account the Nomination and Remuneration supervision based on a court decision; Committee recommendations. g. They are involved in a financial crime. 5. Members of the Board of Commissioners who have finished their term of office may be re-appointed after taking into account the prevailing regulations.

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Term of Office

No. Name Position GMS Latest BI/OJK Approval Effective Date Appointment Re-appointment

1. Dato‘ Sri Nazir Razak*) President EGM No. 14/40/GBI/DPIP/ 1 May 2012 AGM Commissioner 26 January 2012 Rahasia, dated 1 May 15 April 2016 2012

2. Glenn M.S. Yusuf Vice President EGM No. 14/57/GBI/DPIP/ 18 June 2012 AGM Commissioner 26 January 2012 Rahasia, dated 18 June 15 April 2016 2012

3. Zulkifli M. Ali Independent EGM No. 10/156/GBI/DPIP/ 1 November AGM Commissioner 18 July 208 Rahasia, dated 14 2008 15 April 2016 October 2008

4. Pri Notowidigdo Independent AGM No. 15/114/GBI/DPIP/ 26 November AGM Commissioner 28 March 2013 Rahasia dated 26 2013 15 April 2016 November 2013

5. Jeffrey Kairupan Independent AGM No. SR-183/D.03/2016 14 September - Commissioner 15 April 2016 dated 14 September 2016 2016

6. David Richard Thomas Commissioner AGM No. SR-159/D.03/2014 15 September - 27 March 2014 dated 15 September 2014 2014

7. Tengku Dato’ Sri Zafrul Commissioner EGM No. 42/PB.12/2018 16 March 2018 - Tengku Abdul Aziz **) 19 December dated 16 March 2018 2018

8. Armida Salsiah Independent AGM No. SR-184/D.03/2016 14 September - Alisjahbana***) Commissioner 15 April 2016 dated 14 September 2016 2016

BOARD OF COMMISSIONERS’ SEGREGATION OF DUTIES Based on their respective competencies, members of the Board of Commissioners also concurrently serve as Chairman and/or members of Committees established to assist the implementation of the Board of Commissioners duties and responsibilities.

Committee Committee Membership of BoC Members

Audit Committee 1. Zulkifli M. Ali (chairman concurrently member) 2. Jeffrey Kairupan (member)

Risk Oversight Committee 1. Zulkifli M. Ali (chairman concurrently member) 2. Glenn M.S. Yusuf (member) 3. David Richard Thomas (member)

Nomination and Remuneration Committee 1. Pri Notowidigdo (chairman concurrently member) 2. Armida S. Alisjahbana3) (member) 3. Dato’ Sri Nazir Razak1) (member) 4. Glenn M.S. Yusuf2) (member)

Integrated Governance Committee 1. Jeffrey Kairupan (chairman concurrently member) 2. Armida S. Alisjahbana3) (member)

1) Resigned as President Commissioner mutatis mutandis as a member of Nomination and Remuneration Committee effective on 19 October 2018. 2) Appointed Glenn M.S. Yusuf as a member of Nomination and Remuneration Committee on October 2018. 3) Resigned as Independent Commissioner mutatis mutandis as a member of Integrated Governance Committee and Nomination and Remuneration Committee effective on 1 January 2019.

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BOARD OF COMMISSIONERS’ CONCURRENT Excluding the concurrent position as referred to above POSITIONS if: The Board of Commissioners Charter governs the 1. The non-independent member of the Board of provisions regarding concurrent positions of CIMB Commissioners performs functional duties from Niaga’s Board of Commissioners members, whereby the Bank’s Shareholders who are legal entities in Board of Commissioners member may only hold the business group; and/or concurrent positions as: 2. The member of the Board of Commissioners holds 1. A Member of the Board of Commissioners, Board positions in non-profit organizations or institutions. of Directors, or an Executive Officer at 1 (one) other non-financial institution/company; or Provided that the member of the Board of 2. A Member of the Board of Commissioners, Commissioners does not neglect their duties and Board of Directors, or an Executive Officer responsibilities as a member of the Bank’s Board of performing supervisory functions in 1 (one) non- Commissioners. bank subsidiary company controlled by the Bank. 3. A Member of up to 5 (five) Committees in the Bank No members of CIMB Niaga’s Board of Commissioners or Public Company where they also serve as a have concurrent positions in the subsidiaries of CIMB member of the Board of Directors or the Board of Niaga. Commissioners.

Concurrent positions of Board of Commissioners in 2018:

Position in CIMB Name Position in Other Company Company/Organization Niaga

Dato‘ Sri Nazir Razak*) President Chairman CIMB Group Holdings Berhad Commissioners

World Economic Forum’s (WEF) ASEAN Business & Strategy Group Business Council

Deputy Chairman CIMB Bank Berhad

Trustee CIMB Foundation

PRIDE Foundation

Rahah Foundation

Asia Business Council

Member Kuala Lumpur Business Club

Securities Commission – Capital Market Advisory Council

Member of International Advisory Council Asia House

Honorary Member CPA Australia

Advisory Council Asean Business Club Malaysia

Founding member Endeavor Malaysia

Advisory Board Center of Asian Philanthropy & Society

International Advisory Board Blavatnik School of Government

Honorary President Malaysia - China Chamber of Commerce (MC)

Director Zheng Group Limited

David Linley Holdings Limited

Zak Investments Limited

Glenn M.S. Yusuf Vice President Independent Director CIMB Group Holdings Berhad Commissioner Independent Commissioner PT Surya Citra Media Tbk.

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Position in CIMB Name Position in Other Company Company/Organization Niaga

Zulkifli M. Ali Independent Com- N/A N/A missioner

Pri Notowidigdo Independent Com- PT Profesindo Reksa Indonesia - Arghajata President Director missioner Alliance

Senior Partner Arghajata Consulting

Jeffrey Kairupan Independent Com- Director PT Tehillah Indonesia Synergi (PMA) missioner Chief Executive Yayasan Imamat Rajani

Member of Governing Board Bali Blessings Foundation

David Richard Commissioner Group Chief Risk Officer CIMB Group Holdings Berhad Thomas Director International School of Kuala Lumpur (non profit)

GK1Word (non Profit)

Commissioner PT Synergy Dharma Nayaga

Tengku Dato’ Sri Commissioner Director CIMB Group Sdn Bhd Zafrul Tengku Abdul Aziz **) Chief Executive Officer/Executive Director CIMB Bank Berhad Group Chief Executive Officer/Executive CIMB Group Holdings Berhard Director

Chairman/Director TNG Digital Sdn Bhd

Armida Salsiah Independent Com- Faculty of Economy and Business, Lecturer and Professor Alisjahbana***) missioner Padjadjaran University, Bandung

Center for Sustainable Development Goals Director Studies, Padjadjaran University, Bandung

Member Indonesian Academy of Sciences (AIPI)

Economic Research Institute For Asean and Governing Board Member East Asia (ERIA), Jakarta, Indonesia

*) Resigned as President Commissioner effective on 19 October 2018, the above concurrent positions information is up to 18 October 2018 position. **) Appointed in the EGM 19 December 2018 and effectively serves as President Commissioner on 15 March 2019. ***) Resigned as Independent Commissioner effective on 1 January 2019.

BOARD OF COMMISSIONERS’ INDEPENDENCY 3. The Board of Commissioners are not allowed to The Board of Commissioners at all times upholds the accept personal gains or income from the Bank principle of independency when performing its duties, other than remuneration and other facilities as set prioritizes the interests of the Bank above its own forth in the Bank’s policy approved by the GMS. interests and cannot be influenced by any party when 4. The Board of Commissioners shall prioritize the conducting its duties. This commitment is in line with interests of the Bank by adopting professionalism those stipulated in the Board of Commissioners Charter and integrity principles, and shall work and behave as follows: to the highest standard. 1. The Board of Commissioners and their families and 5. The Board of Commissioners are not allowed to any parties affiliated to them are not allowed to retain and duplicate Bank’s documents and control take loans from the Bank. the Bank’s assets for personal benefits. 2. The Board of Commissioners are not allowed to use 6. Unless otherwise stipulated in the prevailing information obtained from the Bank for making laws and regulations and the AoA, the Board of any decisions for the benefit of their own, their Commissioners has no right to represent the Bank family and an affiliated parties. even though authorized by the Board of Directors, unless due to the failure of the Board of Directors, when the Board of Commissioners shall take over the role of the Board of Directors.

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7. All members of the Board of Commissioners shall This policy aims to ensure the implementation of not accept, give or offer anything from/to State Good Corporate Governance and risk management, as Officer and business partners. well being a guideline in the process of nominating, replacing and/or dismissing members of the Board of BOARD OF COMMISSIONERS CONFLICTS OF Commissioners, Board of Directors and Independent INTEREST Parties, and regulates the following: During 2018, the Bank ensured that all members of the Board of Commissioners did not have any conflict of Criteria for Board of Commissioners Members interest or any potential conflict of interest with CIMB The criteria that must be met by the candidates as Niaga. members of CIMB Niaga’s Board of Commissioners include: All members of the Board of Commissioners should avoid 1. Be Indonesian Citizens and/or Foreign Citizens any potential conflict of interest or place themselves who meet the requirements determined by the away from potential conflict of interest under all applicable laws and regulations. circumstances, as stated in the Board of Commissioners 2. Have integrity, at least to include: Charter. In the event of a conflict of interest, members of a. A good character and morals. the Board of Commissioners are prohibited from taking b. A commitment to comply with applicable laws actions that could harm or reduce the Bank’s profits and and regulations, including the Bank’s rules and shall disclose the potential conflict of interest referred to regulations, as well as supporting the policies in any decision. from the regulators. c. A commitment to the development of sound The procedures the Board of Commissioners must Bank operations. follow in the event of a conflict of interest are as follows: d. Has not been included in the List of Not Pass the 1. Report in writing immediately to the Board of Fit and Proper Test. Commissioners regarding any matters that have e. A commitment to not doing and/or repeating the potential to create and/or contain a conflict of actions and/or acts committed by candidates interest, and that may cause significant financial as members of the Board of Commissioners and reputational impact on CIMB Niaga, the Board with the predicate of not passing the Fit and of Commissioners, and the Board of Directors. Proper Test, and who have undergone a period 2. Should preclude them from participating in any of sanctions, and activities containing a conflict of interest. f. Capable of taking legal actions. 3. May participate in the meeting, but are not allowed 3. Have the competency, at least to include: to participate in the decision making. a. Sufficient knowledge of the banking industry relevant to their position, including knowledge MECHANISM FOR APPOINTMENT, DISMISSAL, regarding the Bank’s rules and operations, REPLACEMENT AND/OR RESIGNATION OF BOARD including knowledge/understanding regarding OF COMMISSIONERS MEMBERS Risk Management. The Bank has a policy No. M.04 concerning the b. Experience in banking and/or finance, including Policies and Procedures for the Nomination, experience and expertise in the fields of Appointment, Replacement and/or Dismissal of operations, marketing, accounting, auditing, Board of Commissioners Members, Board of Directors funding, credit, money markets, capital markets, Members, and Independent Parties as Members law or experience and expertise in banking and/ of the Committees responsible to the Board of or financial supervision. Commissioners. c. Ability to work together with other members of the Board of Commissioners.

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d. Knowledge of the duties and responsibilities or member of the Board of Commissioners of the Main Entity, and an understanding of to the GMS. the main business activities and main risks of 5. Has no concurrent positions exceeding the the Financial Services Institutions in the Bank’s applicable provisions. Financial Conglomerate. e. Knowledge pertaining to the Indonesian Nomination Procedures for the Board of economy, culture and language, particularly for Commissioners Members candidate of Commissioners who are foreigners. 1. The Bank can utilize the services of reputable 4. Has a good financial reputation, for at least the 5 search firms in the selection process for candidates (five) years prior to appointment and during their as members of the Board of Commissioners. tenure: 2. Members of the Board of Directors, Board of a. Has no non-performing loans (loans with Commissioners and/or Bank’s Shareholders may collectability 3-5) and/or does not serve as an submit proposals for candidates as members of the Ultimate Shareholder, a member of the Board Board of Commissioners to the Bank. of Commissioners or a member of the Board The shareholder who may propose candidates as of Directors of a legal entity that has non- members of the Board of Commissioners will be 1 performing loans. (one) or more shareholders representing 1/20 (one This is verified by examining, the Financial twentieth) or more of the total shares with voting Information Service System (SLIK), DHN-BI, rights. BWCCS, AKKI, AML Solutions, etc. 3. The third party appointed (search firm) by the Bank b. Has never been declared bankrupt. will assist in the selection process, including: c. Has never been a member of the Board of a. Identifying candidates who meet the Directors and/or a member of the Board of requirements; Commissioners that has been found guilty of b. Conducting interviews and selection of causing a company to be declared bankrupt. candidates (including conducting background d. Has never been convicted of committing a crime and references checks); that is detrimental to state finances and/or c. Acting as a liaison between the Board related to the financial sector, criminal offenses of Commissioners, the Nomination and and/or other criminal acts with the threat of Remuneration Committee, and candidates criminal penalties of 1 (one) year or more. during the selection and evaluation process; e. Has never been a member of the Board of d. Providing consultations needed by the Directors and/or member of the Board of Nomination and Remuneration Committee. Commissioners who during their tenure: 4. The candidates proposed to the Nomination and i. Has failed to organize an Annual General Remuneration Committee shall at least meet the Meeting of Shareholders; criteria set in the Bank’s Nomination Policy. ii. Has caused a company with a license, 5. The Nomination and Remuneration Committee approval or registration from the OJK to not will review, assess, and consider the candidates fulfil the obligation to submit an Annual based on: Report and/or financial report to OJK; a. Minimum requirements in accordance with the iii. Has had their accountability as a member of Bank’s Nomination Policy; the Board of Directors and/or member of the b. Citizenship; Board of Commissioners disapproved by the c. Knowledge, competence, and expertise to GMS, or has failed to provide accountability complement the Board of Commissioners’ as a member of the Board of Directors and/ composition; d. The need for representation and diversity in the Board of Commissioners, as well as compliance with the Bank’s strategy;

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e. Gender to meet the optimal composition of the 5. The term of office for members of the Board of Board of Commissioners; Commissioners commences from the date of f. The Composition of Non-Independent and appointment at the GMS, up until the close of the fourth Independent Commissioners. AGMS following the appointment, without prejudice to 6. The Nomination and Remuneration Committee the right of the GMS to terminate them at any time. will provide recommendations accompanied 6. The Corporate Affairs unit shall report the by the documents assessing the fulfilment of appointment of members of the Board of the candidate requirements, and proposing the Commissioners and the effective appointment selected candidates to the Board of Commissioners thereof to the OJK and other relevant regulators in to be proposed and appointed at the GMS as well as accordance with the prevailing regulations. to obtain approval from OJK. 7. The term of office for Independent Commissioners 7. The Nomination and Remuneration Committee is for a maximum of 2 (two) consecutive periods also evaluates and provides recommendations, unless otherwise stipulated by the prevailing laws accompanied by documents assessing the and regulations. fulfilment of candidate requirements, to the Board 8. Members of the Board of Commissioners that have of Commissioners for all members of the Board of ended their term of office may be re-appointed for Commissioners who will be re-appointed at the another term, with due observance of stipulations GMS. in points 1 – 7 above. 8. Each proposal to appoint a member of the Board of Commissioners to the GMS and OJK shall observe Procedure for Replacement and/or Resignation of the recommendations of the Nomination and Members of the Board of Commissioners Remuneration Committee. 1. Proposals for dismissal, and/or replacement of members of the Board of Commissioners shall Appointment Procedures for the Board of be submitted to the GMS, and shall observe the Commissioners Members Bank’s Nomination and Remuneration Committee 1. Members of the Board of Commissioners are recommendations. appointed at the Bank’s GMS. 2. Members of the Board of Commissioners are 2. Members of the Board of Commissioners shall meet dismissed by the GMS. the requirements to pass the Fit and Proper Test in 3. The GMS may at any time dismiss members of the accordance with OJK regulations concerning the Board of Commissioners from their position by Fit and Proper Test as well as those concerning stating the reason that the concerned member the Implementation of Governance in Commercial of the Board of Commissioners no longer fulfils Banks. the requirements as a member of the Board of 3. Members of the Board of Commissioners who have Commissioners, including actions taken that obtained approval for the Fit and Proper Test from were detrimental to the Bank or other reasons the OJK must be appointed by a GMS at the latest considered appropriate by the GMS. within 6 (six) months following the date of approval a. The decision to dismiss a member of the Board of by OJK. Should the 6 (six) months period lapse Commissioners, as referred to in number (3) above, without a GMS appointment, the approval from shall be taken after the person concerned has OJK becomes invalid. been given the opportunity to defend themself 4. Members of the Board of Commissioners appointed in the GMS. The opportunity to defend themself in a GMS prior to obtaining the OJK approval, will only is not required in the event that the person become effective in their respective appointment concerned does not object to the termination. following receipt of OJK approval. The Corporate b. The dismissal of a member of the Board of Affairs unit is responsible for the submission of Commissioners, as referred to in number (3), applications, including the completeness of the applies from the closing of the GMS that decides required documents to obtain approval from OJK. the dismissal or any other dates stipulated in the GMS resolution.

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4. Members of the Board of Commissioners have the of the Board of Commissioners, by taking into right to resign from their position through written account the applicable laws and regulations, the notification regarding their intention to the Bank Board of Commissioners must convene a GMS no later than 90 (ninety) days or 3 (three) months to revoke or reinforce the temporary dismissal prior to the effective resignation. In the event that decision. the written notification is submitted with less than c. In the GMS, concerned members of the Board 90 (ninety) days or 3 (three) months notice, the of Commissioners are provided with the effective resignation date shall be approved by the opportunity to defend themselves. Board of Commissioners. d. In the event members of the Board of a. Before the resignation becomes effective, Commissioners who is temporarily dismissed the member of the Board of Commissioners are not present at the GMS, the member concerned is still obliged to complete their of the Board of Commissioners who is duties and responsibilities in accordance with temporarily dismissed will be deemed as not the Articles of Association and applicable laws be exercising their right to defend themselves, and regulations. thus the suspended member of the Board of b. The GMS may refuse the resignation of a Commissioners must accept the GMS decision. member of the Board of Commissioners if the e. In the event a GMS is not conducted within 90 resignation results in a violation of the Bank’s (ninety) days after the temporary dismissal, the Articles of Association and/or the applicable laws temporary dismissal becomes null and void. and regulations. 7. When the position of a member of the Board of c. Regarding the resigning member of the Board Commissioners is vacant due to any reason that of Commissioners, accountability can still be causes the number of members of the Board of requested for the execution of their duties Commissioners to be less than 3 (three), a GMS throughout their term of office from the must be held no later than 60 (sixty) calendar days previous accountability date up to the date of after the vacancy date, in order to fill the vacancy, their resignation at the following AGMS. with due observance to the applicable laws and d. The release and discharge of members resigning regulations. from the Board of Commissioners shall be 8. In the event the President Commissioner position granted after being released by the AGMS. is vacant, and as long as a successor has not been 5. In the event that the GMS cancels the appointment appointed, or has not taken office, one member of candidate members of the Board of of the Board of Commissioners shall be appointed Commissioners who have received approval from at a Board of Commissioners’ Meeting to carry out OJK, the Bank must report the cancellation to OJK the obligations of the President Commissioner, no later than 2 (two) working days after the GMS, with the same authority and responsibility as the accompanied by the GMS minutes. President Commissioner. 6. At any time, the Board of Commissioners may 9. The position as a member of the Board of temporarily dismiss one or more members of the Commissioners ends when: Board of Commissioners from their positions: a. Their term of Office ends according to the a. The temporary dismissal along with the reason provisions of the Bank’s Articles of Association; shall be notified in writing to the members of or the Board of Commissioners concerned. b. They resign according to the provisions of b. Within 90 (ninety) calendar days after the date number (4) above; or of the temporary dismissal of the member(s) c. They no longer fulfils the regulatory requirements; or

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d. They pass away; or Plan (RBB), including reviewing and approving e. They are dismissed based on a resolution of the RBB revisions to be submitted to OJK in accordance GMS; or with the timeline stipulated by OJK, which was in f. They are declared bankrupt or placed under November for the submission of the following year’s custody based on a court decision; or RBB, and in June for the revised RBB for the current g. Have been involved in a financial crime, year. The Board of Commissioners also monitored, meaning they hold the status of suspect analysed and provided input regarding the Bank’s from the authorities as a member of the strategic plan including the development of high- Board of Commissioners. The financial crimes margin businesses, diversification of income includes manipulation and various forms of sources, growth of low-cost funds, sales and service embezzlement in financial services activities transformation, increased efficiencies, and Human as well as Money Laundering as referred to in Resource Development. the Law on the Prevention and Eradication of 2. The Board of Commissioners reviewed the Bank’s Money Laundering Crimes. financial performance, in each of their internal In the event that there is a status of suspect Meetings and/or in Committees Meetings where against a member of the Board of Commissioners Business Units were invited to present their from the authorities, the member of the Board of respective performances. Commissioners is deactivated from their duties 3. In line with the prevailing regulations, active and responsibilities until proven otherwise. oversight on Risk Management became the 10. The Corporate Affairs unit shall disclose information Board of Commissioners’ focus, and included self- to the public and submit to OJK and other relevant assessment of the Bank’s Soundness Level using regulators no later than 2 (two) working days after Risk Based-Bank Rating (RBBR). In 2018, through the receipt of any resignation request from a the Risk Oversight Committee monitored risk member of the Board of Commissioners. management, asset quality, the Bank’s soundness status, and stress test results. Reviewed the required BOARD OF COMMISSIONERS’ SUPERVISION FOCUS Bank’s Risk Management policies including IN 2018 the Contingency Plan policy, and evaluated the The Board of Commissioners prepared its supervision conformity of Risk Management policies with the focus and work plans as mutually agreed guidelines, implementation. which then became the basis for preparing the agenda 4. Ensured that the Board of Directors had followed for the Board of Commissioners meetings and joint up on the audit findings and recommendations meetings with the Board of Directors. Throughout from the Internal Audit, including improvements 2018, the Board of Commissioners’ meetings resulted on the findings from the external auditors and in recommendations and input regarding various regulators. aspects in the Bank’s business and business support. 5. In relation to liquidity both in Rupiah and US Dollars, The main focus was still on how to achieve the the Board of Commissioners regularly received the business targets whilst paying close attention to Risk Board of Directors report to gain a clear illustration Management following prudential principles and of the funding and liquidity structure as well as the complying with all applicable regulations. Bank’s funding strategy. 6 The Board of Commissioners has conducted The Board of Commissioners supervision focus in 2018 reviews on: Supervisory Reports every half year, GCG covered several important aspects, including: Assessment Reports, related party transactions, 1. Analysed, provided input, and together with the and approved several internal policies that required Board of Directors approved the Bank Business the Board of Commissioners approval.

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7. The Board of Commissioners received the 13. Through the Audit Committee conducted a latest reports regarding investments and review on the financial statements, including the achievements related to Operations and the presentation of the financial statements, Information Technology implemented in 2018. accounting practices and conformity with 8. Monitored the Bank’s operational risk, including the generally accepted accounting principles, non-performing loans (NPLs), impaired loans, and reviewed the adequacy of the financial statements fraud. publication and reports to the authorities, as well as 9. Conducted assessments and approved the evaluated the implementation of the compliance Recovery Plan for submission to OJK at the end of function at the Bank. December 2017, and ensured the Recovery Plan 14. The risk oversight function was followed up through was submitted for approval by the Shareholders at the Risk Oversight Committee, who provided the AGM on 24 April 2018. recommendations to the Board of Commissioners 10. The Board of Commissioners approved the to support the effectiveness of the Board of Nomination and Remuneration Committee Commissioners duties and responsibilities relating reviews and recommendations for the nomination to Risk Management. of members for the Board of Commissioners, the 15. Conducted oversight and implementation of Board of Directors, the Sharia Supervisory Board and Integrated Governance (IG) in the CIMB Indonesia the independent parties as members of the Audit Financial Conglomerate through the Integrated Committee, Risk Oversight Committee, Nomination Governance Committee, by evaluating the and Remuneration Committee and Integrated implementation of IG through an assessment Governance Committee. Including changes related of the adequacy of internal controls and the to remuneration and compensation policies for the implementation of an integrated compliance Board of Commissioners, the Board of Directors function. and the Sharia Supervisory Board. 16. To support the effectiveness of the Board of 11. In 2018, the Board of Commissioners approved Commissioners duties and responsibilities, in each the Remuneration and Nomination Committee meeting the Board of Commissioners received recommendations for the re-appointment of reports from each Committee, including the Audit David Richard Thomas (Commissioner) and John Committee, Risk Oversight Committee, Nomination Simon (Director), as both of their Terms of Office and Remuneration Committee and Integrated had expired at the AGM on 24 April 2018, as well Governance Committee. as the appointment of Tengku Dato’ Sri Zafrul Tengku Abdul Aziz as the President Commissioner, BOARD OF COMMISSIONERS’ RECOMMENDATIONS replacing Dato’ Sri Nazir Razak who resigned The Board of Commissioners supervision and advice effectively on 19 October 2018 and Lee Kai Kwong is delivered through the Audit Committee, Risk as Director to replace Wan Razly Abdullah who Oversight Committee, Nomination and Remuneration resigned effectively on 1 January 2019, where both Committee, and Integrated Governance Committee, obtained approval from the EGM on 19 December and is discussed during the Board of Commissioners 2018, and took effect after obtaining the approvals meetings. In 2018, a number of important in accordance with the applicable provisions from recommendations were issued by the Board of the authorities. Commissioners including: 12. Related to Human Resources, the Board of 1. Provided input and approved the Corporate Plan Commissioners, through the Nomination and throughout 2018 including conducted the AGM, EGM, Remuneration Committee, monitored manpower Issuance of Bonds and Subordinated Bonds. policies and HR management functions that posed 2. Provided approval to the 2018 Bank Business Plan a significant risk to the Bank, as well as supervised Revision, 2019 Bank Business Plan, as well as provided risk management implementation related to approval for the Bank’s business plans & strategies for outsourcing. 2019.

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3. Provided approval for the establishment of CIMB • Appointed the Public Accounting Firm based Niaga Venture Capital. on independence, scope of assignment, and 4. Reviewed and provided input regarding the Bank’s audit fees. Risk Appetite Statement • Reviewed the audits by the internal auditors 5. Provided input regarding the Bank’s financial targets, and monitored the follow-up by the Board of including Net Interest Margin, Non Performing Loans Directors on the findings from the internal and watch list accounts, Loan to Deposit Ratio, Asset auditors. Quality, Productivity and market competition. • Reviewed any complaints relating to the 6. Provided input related to the increase of low-cost accounting and financial reporting processes. funds (CASA) and the Bank’s fee income through the • Implementation and strategies on fraud development of Bank services to ease transactions and detection, including the whistleblowing services through Transaction Banking, Value Chain, as implementation. well as enhancement of the Sharia Banking business 10. Based on the Risk Oversight Committee services through dual banking leverage, and through report, the Board of Commissioners provided the development of branchless banking including the recommendations to the Board of Directors related optimization of ATM, CDM & CRM, the development to: of new platforms for CIMB Clicks (internet banking) • Risk management, asset quality, the Bank’s and upgrading GoMobile (mobile banking), agent Soundness Level and Stress Test results. banking and tablet banking, including programs to • Policies/frameworks established by the Board improve turn-around time to scale up our customers of Directors in relation to risk management, experience during transactions. including the Internal Capital Adequacy 7. Provided input related to efficiency improvements Assessment Process, which includes the made under the cost efficiency programs, IT establishment of risk appetite and stress test transformation programs, and productivity for both implementation. front-liners and back office, giving authority in the • Financial Statements and discussion regarding approval process that had an impact on accelerating the on-going strategic initiatives/projects, customer service. particularly the implication of risks to the Bank 8. Periodically held discussions related to the macro including the Bank’s Budget Plan for 2019, as economic and industrial conditions, and the new well as the business strategies and business banking regulatory requirements, as well as the plans for each unit to ensure conformity with impact on the Bank’s business and its action plan. risk principle and risk appetite. 9. Based on the Audit Committee report, the Board of • Risk aspects for new products and activities Commissioners provided recommendations to the including evaluations of the product’s Post Board of Directors, including: Implementation Review (PIR) framework, • Reviewed the financial statements covering the strategy review to improve CASA and financial statements presentation, accounting Commission Fee Income from a risk perspective, practices and their conformity with the generally mainly linked to its impact on the Bank’s accepted accounting principles, as well as the liquidity and financing. financial performance and adequacy of the • Strategy for handling and settling impaired financial statements publication and reporting accounts and NPLs, as well as the recovery plan/ to the authorities. strategy. • Reviewed the follow-up progress regarding the • Monitoring of significant audit findings from audit findings from the external audit, regulators the perspective of operational risk management and Bank Negara Malaysia. including the results of investigations • Gave Independent opinions in the event of any performed. disagreement between management and the Public Accountant for the services provided.

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Board of Commissioners

11. Through the Nomination and Remuneration • Supervision on the Corporate Governance Committee, the Board of Commissioners provided implementation by each member of the CIMB recommendations to the Board of Directors, Indonesia Financial Conglomerate in relation including: to Integrated Internal Audit, Risk Management, • Recommendations on the nomination policy and Compliance. for the nomination and/or replacement of • Ensured the reporting and updating of Financial members of the Board of Commissioners and Services Institutions that are members of the the Board of Directors to be submitted for CIMB Indonesia Financial Conglomerate. approval at the AGM on 24 April 2018 and the • Ensured the implementation of the Integrated EGM on 19 December 2018. Corporate Governance in the CIMB Indonesia • Recommendations related to the remuneration Financial Conglomerate had been reported to policy for the Board of Commissioners, the the authorities in accordance with all prevailing Sharia Supervisory Board, and the Board of regulations. Directors to be submitted to the AGM on 24 April 13. In accordance with the Articles of Association, the 2018, and the remuneration policy framework Board of Commissioners approved the proposed for Executive Officers and employees as a actions regarding NPL, restructuring and write-offs whole, which had been approved by the Board of loans above certain limits stipulated in the Bank’s of Directors. policies. In addition, the Board of Commissioners • Changes related to remuneration for the Board provided loan approval to the Bank’s related parties in of Commissioners, the Independent Parties compliance with prevailing regulatory requirements. who are members of the Committees under Board of Commissioners, the Sharia Supervisory BOARD OF COMMISSIONERS’ DEVELOPMENT Board and the Board of Directors. PROGRAM • Manpower policies and HR management CIMB Niaga continues to promote capacity building functions that contain significant risks to the activities for the Board of Commissioners through its Bank including the Bank’s future growth. induction program for new Board of Commissioners • Provided recommendations regarding the members, and through training programs for Board framework for distributing bonuses to the of Commissioners members to support their duties to Board of Directors in a balanced and fair achieve sustainable growth and effective management manner by objectivity considering performance as stipulated in the Board of Commissioners’ Charter. achievement. • Provided input regarding the assessment of Key Induction Program for New Commissioners Performance Indicators (KPI) for members of the As stipulated in the Board of Commissioners Charter, Board of Directors based on the achievement of newly appointed Board of Commissioners members each KPI component. must follow the Induction Program, which aims to • Provided input regarding the Board of provide knowledge to the new Commissioners to gain Commissioners performance evaluation and an understanding of the Bank, so as to perform their assessments, individually or collegially, which duties effectively and efficiently. are conducted at least once a year using a self- assessment method or other methods. The orientation program for new Commissioners takes • Provided input regarding policies and/or the form of documents prepared by the Corporate training programs for the Board of Directors Affairs unit, including: and Board of Commissioners 1. Bank’s Vision and Mission. 12. Through the Integrated Governance Committee, the 2. Bank’s Code of Ethics and Conduct. Board of Commissioners provided recommendations, 3. Bank’s Organizational Structure. including: 4. Bank’s Articles of Association.

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5. Corporate Policy Manual (GCG Charter). BOARD OF COMMISSIONERS’ TRAINING PROGRAM 6. Board of Commissioners Charter and The Committees IN 2018 under the Board of Commissioners Charters. 7. Regulations related to the Banking and Capital Risk Management Certification Markets. In accordance with the Employment Regulations (P2K) 8. Bank’s Annual Report. regarding Implementation of Employee Learning, and 9. Bank’s Business Plan. BI Regulation No.11/19/PBI/2009 dated 4 June 2009, and its amendment BI Regulation No. 12/7/PBI/2010 In 2018, there were no induction programs for new dated 19 April 2010 regarding Risk Management Commissioners as there were no newly appointed Certification for Management and Officers of Commissioners in the Bank. Commercial Banks, the Board of Directors and the Board of Commissioners are required to participate To improve the induction program quality and in Risk Management Certification and Refreshment effectiveness, the Bank is in the process of developing programs in accordance with the regulations. a digital orientation program (e-Learning), through Learning on the Go (LoG). All members of the Board of Commissioners possess Risk Management and/or Refreshment Certification in accordance with prevailing regulations.

Competency Development and Training Program CIMB Niaga is committed to implementing competency development and training programs for all members of the Board of Commissioners to support their supervisory function. This commitment is reflected in the training attended by each of member of Board of Commissioners as follows:

Training of Board of Commissioners in 2018

Type of Training/Seminar/Workshop/Sharing Name Organizer Date and Location Knowledge

Dato’ Sri Nazir Razak *) World Economic Forum Annual Meeting 2018 WEF 23 – 26 January 2018 Switzerland

World Capital Markets Symposium Securities 6 February 2018 Commission Malaysia Kuala Lumpur, Malaysia

Asia Business Council 2018 Spring Forum Asia Business Council 6 February 2018 Manila, Filipina

Warwick ASEAN Conference Warwick ASEAN 17 February 2018 UK

Asia House’s Asian Development Outlook conference Asia House 13 April 2018 UK

Commonwealth Business Forum: Making Business Commonwealth 18 April 2018 Easier between Commonwealth Countries Enterprise & UK Investment Council

ASEAN Corporate Governance Scorecard Sharing CIMB Niaga 24 April 2018 Session Jakarta

Glenn M. S. Yusuf Speaker in the event “20 Years Asian Financial Crisis: Indonesia Deposit 28 February 2018 Strengthening Infrastructures for Crisis Resolution” Insurance Jakarta Corporation (IDIC)

ASEAN Corporate Governance Scorecard Sharing CIMB Niaga 24 April 2018 Session Jakarta

CIMB Workshop on Responsible Lending & Financing CIMB Group 1 August 2018 Jakarta & Kuala Lumpur (Concall)

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Board of Commissioners

Type of Training/Seminar/Workshop/Sharing Name Organizer Date and Location Knowledge

Risk Posture Workshop CIMB Group 20 September 2018 Jakarta & Kuala Lumpur (Tele-Presence)

Zulkifli M. Ali Mid-Year Senior Leader Meeting CIMB Niaga 23 – 24 May 2018 Jakarta

Asean Corporate Governance Scorecard Sharing CIMB Niaga 24 April 2018 Session Jakarta

Year End Senior Leader Meeting CIMB Niaga 18 – 20 October 2018 Banyuwangi, East Java

Khazanah Megatrend Khazanah Nasional 8-9 October 2018 Berhad Kuala Lumpur, Malaysia

Pri Notowidigdo Training & Directorship Certification Level Indonesian Institute 14-15 March 2018 Fundamental for Commissioners Jakarta and Directors (LKDI)

Asean Corporate Governance Scorecard Sharing CIMB Niaga 24 April 2018 Session Jakarta

“The Next Generation of Banking in The Fourth Indonesia Banks 15 November 2018 Industrial Transformation.” Association Jakarta (Perbanas)

Bank’s Business in the Digital Age Seminar (2019 Indonesia Banker 10 December 2018 Economic Outlook) Institute (IBI) Jakarta

Jeffrey Kairupan Asean Corporate Governance Scorecard Sharing CIMB Niaga 24 April 2018 Session Jakarta

Khazanah Megatrend Khazanah Nasional 8-9 October 2018 Berhad Kuala Lumpur, Malaysia

Year End Senior Leader Meeting CIMB Niaga 18 – 20 October 2018 Banyuwangi, East Java

David R. Thomas TCBians (Management Trainees) - Business & Career CIMB Group 9 January 2018 Prospects of Group Risk Kuala Lumpur, Malaysia

Town Hall at Bank Negara Malaysia Bank Negara 15 January 2018 Malaysia Kuala Lumpur, Malaysia

Induction for New Board of Directors CIMB Group 8 February 2018 Kuala Lumpur, Malaysia

Town Hall with Dato’ Sri Nazir Razak CIMB Group 26 February 2018 Kuala Lumpur, Malaysia

The Evolutionary Change of Digitisation Oliver Wyman 9 April 2018 Kuala Lumpur, Malaysia

Town Hall with Tengku Dato’ Sri Zafrul Aziz CIMB Group 12 April 2018 Kuala Lumpur, Malaysia

Beyond 2018 Strategy Workshop CIMB Group 20 April 2018 Kuala Lumpur, Malaysia

ASEAN Corporate Governance Scorecard Sharing CIMB Niaga 24 April 2018 Session Jakarta

2018 Risk Appetite & Risk Posture: What does it mean CIMB Group 4 May 2018 to COBA, COMBA & MSME Kuala Lumpur, Malaysia

Advanced Presentation Skills Workshop British Council 21 May 2018 Kuala Lumpur, Malaysia

Sustainable Finance Training CIMB Group 1 August 2018 Kuala Lumpur, Malaysia

Town Hall - Sector Call; Palm Oil CIMB Group 16 August 2018 Kuala Lumpur, Malaysia

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Type of Training/Seminar/Workshop/Sharing Name Organizer Date and Location Knowledge

2019 Risk Posture Workshop with Combined Boards CIMB Group 20 August 2018 Kuala Lumpur, Malaysia

Tenaga Nasional Berhad Thrust Leadership Program Tenaga Nasional 28 August 2018 Berhad Kuala Lumpur, Malaysia

Town Hall with Tengku Dato’ Sri Zafrul Aziz CIMB Group 29 August 2018 Kuala Lumpur, Malaysia

Early Warning signal too for Corporate & Commercial CIMB Group/Moody’s 3 September 2018 Portfolio Analytics Kuala Lumpur, Malaysia

2019 Risk Posture Post Workshop with Business Units CIMB Group 3 September 2018 Kuala Lumpur, Malaysia

Town Hall with Dato’ Sri Nazir Razak CIMB Group 25 September 2018 Kuala Lumpur, Malaysia

Town Hall - Big Data Overview CIMB Group 22 October 2018 Kuala Lumpur, Malaysia

McKinsey Workshop McKinsey 22 November 2018 Kuala Lumpur, Malaysia

Ant Financial - Study Trip Ant Financial/CIMB 28 - 30 November 2018 Group Hangzhou, China

Town Hall - Real Estate Sector CIMB Group 3 December 2018 Kuala Lumpur, Malaysia

Centre of Applied Data Science (CADs) Training CADs/CIMB Group 5 December 2018 Kuala Lumpur, Malaysia

Centre of Applied Data Science (CADs) Training CADs/CIMB Group 7 December 2018 Kuala Lumpur, Malaysia

Post-AMS Group Risk Offisite CIMB Group 8 December 2018 Kuala Lumpur, Malaysia

Tengku Dato’ Sri Zafrul CIMB 10th Annual Malaysia Corporate Day CIMB Group 4 January 2018 Tengku Abdul Aziz **) Kuala Lumpur, Malaysia

PBCSF Tsinghua University “Belt & Road” SEA Tsinghua University 11-12 January 2018 Program Beijing, China

CIMB Sin Chew SME Business Forum Sin Chew 15 January 2018 Kuala Lumpur, Malaysia

World Capital Markets Symposium Securities 6 February 2018 Commission Kuala Lumpur, Malaysia

2050 National Transformation (TN2050) Dialogue Bank Negara 9 March 2018 Session for the Finance Cluster Malaysia Kuala Lumpur, Malaysia

Money 2020 Money 20/20 Asia 14 March 2018 Singapura

CIMB Group 2018 Strategy Briefing Bank Negara 21 March 2018 Malaysia Kuala Lumpur, Malaysia

Bank Negara Malaysia - Composite Risk Rating (CRR) Bank Negara 23 March 2018 with BODs of CIMBGH/CIMB Bank & CIMB Islamic Malaysia Kuala Lumpur, Malaysia Bank

Bank Negara Malaysia Annual Report 2017/Financial Bank Negara 28 March 2018 Stability and Payments Systems Report 2017 Briefing Malaysia Kuala Lumpur, Malaysia Session

Beyond 2018 Conversations CIMB Group 3 April 2018 Kuala Lumpur, Malaysia

Town Hall - CIMB NIAGA CIMB Group 5 April 2018 Jakarta

Supervisory College Meeting - CIMB Group Bank Negara 16 April 2018 Malaysia Kuala Lumpur, Malaysia

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Board of Commissioners

Type of Training/Seminar/Workshop/Sharing Name Organizer Date and Location Knowledge

Beyond 2018 Strategy Workshop 1 CIMB Group 20 April 2018 Kuala Lumpur, Malaysia

Asean Corporate Governance Scorecard Sharing CIMB Niaga 24 April 2018 Session Jakarta

Beyond T18 Framing & Dialogue CIMB Group 26 April 2018 Kuala Lumpur, Malaysia

Beyond 2018 Strategy Workshop II CIMB Group 31 April 2018 Kuala Lumpur, Malaysia

CIMB ASEAN Scholarship Bootcamp CIMB Group 26 June 2018 Kuala Lumpur, Malaysia

Beyond 2018: Strategic Workshop CIMB Group 9 July 2018 Kuala Lumpur, Malaysia

3rd ABC Meeting ABAC (MITI) 23 – 26 July 2018 Kuala Lumpur, Malaysia

Economic & Leadership Forum Sunway University 28 July 2018 Kuala Lumpur, Malaysia

Sustainable Finance Training for Board of Directors CIMB Group 1 August 2018 Kuala Lumpur, Malaysia

Power Break in Conjunction with International Social EPF 8 August 2018 Security Conference Themed a Better Tomorrow Kuala Lumpur, Malaysia

Town Hall Singapore CIMB Group 5 September 2018 Singapura

World Economic Forum on ASEAN World Economic 11 – 13 September 2018 Forum Vietnam

Town Hall Thailand CIMB Group 14 September 2018 Thailand

CIMB Group IAP CIMB Group 21 September 2018 Kuala Lumpur, Malaysia

T&O CTCIB Town Hall CIMB Group 27 September 2018 Kuala Lumpur, Malaysia

Khazanah Megatrends Forum 2018 Khazanah Nasional 8-9 October 2018 Berhad Kuala Lumpur, Malaysia

Bank Negara Malaysia Financial Stability Conference Bank Negara 23 October 2018 Malaysia Kuala Lumpur, Malaysia

Singapore FinTech Festival 2018 Singapore FINTECH 14 November 2018 Singapura

PBCSF Tsinghua University “Belt & Road” SEA Tsinghua University 15-18 November 2018 Program Singapura

CIMB Annual Management Summit CIMB Group 23-24 November 2018 Kuala Lumpur, Malaysia

Armida Salsiah Speaker: Launching and Public Review “Curriculum Indonesia University 18 January 2018 Alisjahbana***) Development for Sustainability Education”, a Book by of Education (UPI) Bandung, West Java Prof. Dr. Mohammad Ali, MA

Conference “Indonesia and the Response to an Indonesia Bureau of 26 January 2018 Uncertain Global Order” Economic Research Jakarta (IBER)

Speaker: Education and Training for Echelon 1 Institute of Public 1 March 2018 candidates organized by the Institute of Public Administration (LAN) Jakarta Administration (LAN)

Panelis: International Seminar “Human Capital Ministry of Finance 1 March 2018 Investment as a New Driving Force of Economy” of the Republic of Bali Indonesia

450 Annual Report 2018 PT Bank CIMB Niaga Tbk Supporting Corporate Governance Corporate Social Others Consolidated Business Review Report Responsibility Corporate Data Financial Report

Type of Training/Seminar/Workshop/Sharing Name Organizer Date and Location Knowledge

Discussion “How Indonesia Benefited fFrom Industrial Indonesia Forum 22 March 2018 Revolution 4.0” Foundation Jakarta

Speaker: Internasional Seminar “ASEAN SAI Seminar The Audit Board 2 April 2018 on Increasing the Awarness of The SDGs: Promoting of the Republic of Jakarta Transparency Accountability, and Anti Corruption” Indonesia (BPK)

Speaker: Panel Dicussion event “Role of Woman in USAID SHERA Center 21 April 2018 Medical Research and Education” for Collaborative Bandung, West Java Research on Acute Respiratory Infection (CCR-ARI)

Asean Corporate Governance Scorecard Sharing CIMB Niaga 24 April 2018 Session Jakarta

Speaker: Mubyarto Public Policy Forum Indonesia Project, the 3 May 2018 Australian National Yogyakarta, Central Java University and Fakultas Ekonomi dan Bisnis, Gadjah Mada University (UGM)

UN ESCAP as Plenary Speaker: Policy Issues for the United Nations 13 – 16 May 2018 Asia - Pacific Region, Topic : Inequality in the era of Economic and Social Bangkok, Thailand the 2030 Agenda for Sustainable Development” Commission for Asia and the Pasific (UN ESCAP)

Speaker: World Congress of the RSAI, Birla Institute of Regional Science 29 May - 1 June 2018 Technology & Science (BITS) Association India International

Speaker: Workshop ‘Structural Transformation & The ESRC Global 25 - 27 June 2018 Inclusive Growth: Project Design Workshop’ Poverty and Bangkok, Thailand Inequality Dynamics (GPID)

Speaker: National Seminar with the theme: “Pancasila Habibie Center 3 July 2018 Market Ekonomi, the New Way of the Indonesian Jakarta Economy”

Dialog Forum: “Direction of Bank Indonesia Policies in Indonesian 9 July 2018 Maintaining Economic Growth and Stability”. Economist Jakarta Association

Hadi Soesastro Policy Forum 2018 on Joining Global Centre for Strategic 9 July 2018 Production Networks: Has Indonesia Missed the Boat? and International Jakarta and Book Launch on Indonesia in the New World: Studies (CSIS) Globalization, Nationalism and Sovereignty

Speaker: Joint National Seminar SDGs Center Unpad SDGs Center Unpad 4 September 2018 and Indonesian Science Academy (AIPI) : “Readiness dan Akademi Bandung, West Java of Indonesian Human Resources in the Disruption Pengetahuan and Globalization Age”. Indonesaia (AIPI)

Speaker: 50 Years of Service of Prof. Dr. Daud Silali, SH Padjadjaran 17 September 2018 University (UNPAD) Bandung, West Java

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Board of Commissioners

BOARD OF COMMISSIONERS’ LOAN PROVISION • Individual Performance Assessment for Each POLICY Member of the Committees under the Board of As stipulated in the Board of Commissioners Charter, Commissioners the Board of Commissioners and their families and The assessment criteria includes competency and other affiliated parties are not allowed to borrow capability, as well as effectiveness of the members of money from the Bank. the Committees under the Board of Commissioners implementation of duties and responsibilities. COMMITTEES UNDER THE BOARD OF COMMISSIONERS PERFORMANCE ASSESSMENT • Performance Assessment for the Chairman of the Committees under the Board of Commissioners Performance Assessment Policy and Procedure for The Committee Chairman’s performance Committees under the Board of Commissioners assessment criteria includes the effectiveness of Performance assessments for the Committees under the implementation of duties and responsibilities, the Board of Commissioners are carried out every as well as the Chairman’s leadership in the year (minimum once a year), and consists of collegial Committees. performance assessments for the Committee under the Board of Commissioners, individual performance Parties Conducting the Performance Assessment assessments for each Committee member, and for the Committees under the Board of performance assessments for the Committee Commissioners Chairman. The performance assessment for Committees, Committee members and Chairman of the Committees The final performance evaluation for the collegial under the Board of Commissioners is carried out by: and individual assessments, and the performance assessment of the Committee Chairman are discussed • Collegial Performance Assessment for at the Nomination and Remuneration Committee Committees under the Board of Commissioners meeting. The discussion results will be followed up The assessment is carried out by each Committee with an action plan (if needed). member on the performance of the Committee under the Board of Commissioners. Performance Assessment Criteria for Committees under the Board of Commissioners • Individual Performance Assessment for Each Performance Assessment Criteria for Committees Member of the Committees under the Board of under the Board of Commissioners includes: Commissioners Each Committee member provides an assessment • Collegial Performance Assessment for for each other member of the committee under Committees under the Board of Commissioners the Board of Commissioners. The assessment criteria includes the structure of the Committees under the Board of Commissioners, • Performance Assessment for Chairman of the the effectiveness of the meeting of the Committees Committee under the Board of Commissioners under the Board of Commissioners and the The assessment is carried out by each member of effectiveness of the implementation of duties and Committee on the performance from the Chairman responsibilities. of their respective Committee.

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RESULTS OF THE PERFORMANCE ASSESSMENT FOR THE COMMITTEE UNDER THE BOARD OF COMMISSIONERS IN 2018

Detail results of the collegial performance assessment for the Committees under the Board of Commissioners are as follows:

Nomination and Remuneration Integrated Governance Audit Committee Risk Oversight Committee Committee Committee

3.6 3.9 4.3 3.4

Meanwhile, the average results of the individual performance assessment for each member of the Committees are as follows:

Nomination and Remuneration Integrated Governance Audit Committee Risk Oversight Committee Committee Committee

3.7 4.4 4.3 3.6

And for the results of the performance assessment for the Chairman of the Committee under the Board of Commissioners:

Nomination and Remuneration Integrated Governance Audit Committee Risk Oversight Committee Committee Committee

3.6 4.2 4.0 3.5

Range of values chart as follow:

Range of Values: Description

≥ 4.7 Exceptional

4.0 - 4.6 Outstanding

3.7 - 3.9 Exceed Expectations

3.0 - 3.6 Meet Expectations

< 3.0 Need Improvement

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Independent Commissioners

NUMBER OF INDEPENDENT COMMISSIONERS 2. Has no financial relationship, management In 2018, there were 4 (four) Independent relationship, share ownership relationship, family Commissioners in CIMB Niaga out of a total of 7 (seven) relationship with other members of the Board of Board of Commissioners members, thus amounting to Commissioners, the Board of Directors and/or the more than 50% of the total members of the Board of Ultimate Shareholders. Commissioners. 3. Has no direct or indirect shares in the Bank; 4. Has no affiliations with the Bank, members of the INDEPENDENT COMMISSIONER CRITERIA Board of Commissioners, members of the Board of All Independent Commissioners in CIMB Niaga are Directors, or with the Ultimate Shareholders of the selected based on criteria set forth in the Board Bank. of Commissioners Charter, as well as the Policies 5. Has no direct or indirect business relationship with and Procedures for Nomination, Appointment, the business activities of the Bank. Replacement and/or Dismissal of Board of 6. Fulfils the other requirements for Independent Commissioners Members, Board of Directors Members, Commissioners as governed in the prevailing and Independent Parties as Committee Members regulations. Responsible to the Board of Commissioners, and were 7. If the Independent Commissioner is serving on prepared pursuant to the applicable regulations. The the Audit Committee, then they may only be re- criteria includes: appointed to the Audit Committee for 1 (one) 1. Not an individual who had been employed or had further term. the authority and responsibility to plan, direct, 8. An Independent Commissioner who serves as a control or supervise the Bank’s activities including Committee Chairman may only concurrently serve former members of the Bank’s Board of Directors as a Committee Chairman in one other Committee, or Executive Officers, or other parties with a at a maximum. relationship with the Bank, which may affect their ability to act independently during the last 1 (one) INDEPENDENCY STATEMENT FOR EACH year, except for re-appointment as an Independent INDEPENDENT COMMISSIONER Commissioner of the Bank for a following period. In accordance with OJK Regulation No. 33/POJK.04/2014, Zulkifli M. Ali declared his independence statement at The provisions referred to above do not apply to the AGM on 15 April 2016. The independence statement former Directors or Executive Officers performing coincided with his appointment as an Independent supervisory functions. Commissioner who has served for more than two periods.

Armida Pri Jeffrey Independency Aspect Zulkifli M. Ali Salsiah Notowidigdo Kairupan Alisjahbana

Not an individual who was employed or had the authority and √ √ √ √ responsibility to plan, direct, control or supervise the activities of the Bank in the last 6 (six) months.

Has no direct or indirect shares in the Bank. √ √ √ √

Has no affiliations with the Bank, members of the Board of √ √ √ √ Commissioners, members of the Board of Directors, or with the Ultimate Shareholders of the Bank.

Has no financial relationship, management relationship, share √ √ √ √ ownership relationship, family relationship with other members of the Board of Commissioners, the Board of Directors and/or the Ultimate Shareholders.

Has no direct or indirect business relationship with the business √ √ √ √ activities of the Bank.

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Board of Directors

One of CIMB Niaga’s Corporate Governance bodies 3. All CIMB Niaga Board of Directors members are is the Board of Directors who has full and collegial domiciled in Jakarta, Indonesia. responsibilities for the management of the Bank, for 4. The majority of the Board of Directors members the interests and objectives of the Bank, as well as are Indonesian Citizens, namely 10 (ten) of the 11 acting for and on behalf of the Bank in and out of the (eleven) members. court in accordance with the provisions set out in the 5. The Board of Directors is led by a President Bank’s Articles of Association. Each member of the Director, who is independent from the ultimate Board of Directors works in accordance within their shareholders, other Directors and members of respective area of duties, in accordance to their duties CIMB Niaga’s Board of Commissioners. and responsibilities, to achieve effective management 6. The majority of members of the Board of Directors and optimum results. In the implementation of have at least 5 (five) years experience in banking their duties, CIMB Niaga’s Board of Directors always operations (including but not limited to credit, embraces professionalism, objectivity, strategic funding, treasury, risk management, finance, etc.) thinking, and prioritises the interests of the Bank, in an as Executive Officers and do not have concurrent effort to enhance added value for the stakeholders and positions in other banks, companies or institutions. to ensure business sustainability. 7. The replacement and/or appointment of CIMB Niaga’s Board of Directors members has considered LEGAL BASIS the Remuneration and Nomination Committee The legal basis for the establishment and appointment recommendations and has obtained approval from of CIMB Niaga’s Board of Directors includes: the General Meeting of Shareholders (GMS) and the 1. Republic of Indonesia Laws on Limited Liability Financial Services Authority (OJK). Companies and on Banking. 8. No members of CIMB Niaga’s Board of Directors 2. Bank’s Articles of Association. have family relations up to the second degree 3. Financial Services Authority (OJK) Regulations, with other members of the Board of Directors and/ Bank Indonesia Regulations, OJK Circular Letters, or the Board of Commissioners and the Ultimate and Bank Indonesia Circular Letters related to the Shareholders. implementation and organisation of Corporate 9. All CIMB Niaga Board of Directors members have Governance. passed the Fit and Proper Test. 4. Deed of Meeting Resolution No. 35 dated 24 August 2017 concerning the PT Bank CIMB Niaga Tbk As fulfilment of the Indonesia Stock Exchange Extraordinary General Meeting of Shareholders Regulation No. I-A concerning Listing of Shares and Resolutions. Equity Securities in addition to Shares Issued by the Company, CIMB Niaga has 1 (one) Independent BOARD OF DIRECTORS’ STRUCTURE AND Director, namely Fransiska Oei. COMPOSITION The Bank has fulfilled all applicable provisions in terms To achieve decision-making effectiveness, the number of the composition of the members of the Board of Directors has been based on the need to achieve of Directors as stipulated in the Board of Directors the Bank’s goals and objectives and has been adjusted Charter, as follows: to the Bank’s condition including the characteristics, 1. The number of CIMB Niaga Board of Directors capacity, and size of the Bank as well as diversity of the members is more than 3 (three) persons, namely 11 Board of Directors members. (eleven) people. 2. The number of CIMB Niaga Board of Directors members is more than the number of CIMB Niaga Board of Commissioners members.

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In 2018, the composition of CIMB Niaga’s Board of Directors is as following:

No. Name Position Period

1. Tigor M. Siahaan President Director 2015 - 2019

2. Rita Mas’Oen Director 2016 - 2020

3. Megawati Sutanto Director 2016 - 2020

4. Vera Handajani Director 2016 - 2020

5. John Simon Director 2018 - 2022

6. Lani Darmawan Director 2016 - 2020

7. Pandji P. Djajanegara Director 2016 - 2020

8. Hedy Lapian Director 2016 - 2020

9. Fransiska Oei Compliance Director (Independent Director) 2016 - 2020

10. Rahardja Alimhamzah Director 2017 - 2021

11. Wan Razly Abdullah*) Director 2016 - 2020

*) Resigned as a Director effective on 1 January 2019

BOARD OF DIRECTORS’ CHARTER 6. Transparency The Board of Directors has a Work Guidelines and 7. Work Ethics Procedures or Charter that are regularly evaluated and 8. Meetings updated with reference to the applicable rules and 9. Term of office regulations in Indonesia that are binding all members 10. Resignation of the Board of Directors. 11. Performance Assessment and Accountability

The basis for preparing the Board of Directors Charter: BOARD OF DIRECTORS’ DUTIES, RESPONSIBILITIES 1. Bank’s Articles of Association. AND AUTHORITIES 2. Law No. 40 of 2007 on Limited Liability Companies. The Board of Directors is fully responsible for performing 3. OJK Regulations and OJK Circular Letters related its duties, responsibilities and authorities to manage to the Corporate Governance implementation and the Bank for the interests of the Bank and to achieve its bodies goals and objectives. 4. General Guidelines for Good Corporate Governance in Indonesia from the National Committee on The main duties of the Board of Directors, are to lead Governance Policy (KNKG). and manage the Bank in accordance with its objectives; 5. ASEAN Corporate Governance Scorecard. control, maintain, and administer the Bank’s assets for the Bank’s interests; develop an internal control The Board of Directors Charter was last updated on structure at all management levels; and follow up on the 3 October 2017 and has been uploaded to the Bank’s Bank’s internal audit findings, external audit findings website www.cimbniaga.com. The Board of Directors and regulators’ recommendations in accordance with Charter set forth the following matters: the policies or advice from the Board of Commissioners. 1. Accountability 2. Structure and Membership The Board of Directors’ authorities include representing 3. Requirement and Appointment the Bank both internally and externally, binding the 4. Duties and Responsibilities Bank with other parties, and carrying out any actions, 5. Conflict of Interest

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both for management and ownership, with certain concerned, and to be followed up in accordance restrictions, as described in the Articles of Association. with the applicable regulations. 4. In the event of a vacancy for the Independent Details of the Board of Directors’ duties, responsibilities, Director’s position, the Bank must fill the vacant and authorities are set forth in the Articles of Association position at the next GMS, or make an appointment and the Board of Directors’ Charter, and have been based on a Board of Directors meeting with the uploaded on CIMB Niaga’s website, www.cimbniaga. approval of the Board of Commissioners within 6 com. (six) months after the vacancy occurs. 5. The position of a Board of Directors member shall BOARD OF DIRECTORS’ TERM OF OFFICE end in the event of: 1. The term of office as members of the Board of a. The term of office ending in accordance with the Directors shall be effective from the date specified provisions in the Bank’s Article of Association; in the GMS appointing them, until the close of the b. They resign in accordance with the prevailing 4th AGM after the date of the appointment without regulations; prejudice to the right of the GMS to dismiss them at c. They no longer comply with the legal and any time in accordance with Articles of Association regulatory requirements; and the prevailing regulations. d. They pass away; 2. The appointment of Board of Directors members e. They are dismissed based on a resolution of the becomes effective upon approval from the OJK or GMS. the fulfilment of the requirements stipulated in the 6. Members of the Board of Directors who have OJK approval letter relating to the Fit and Proper test, finished their term of office may be re-appointed and other relevant authorities (if any), and approval after taking into account the prevailing regulations. by the shareholders through the GMS. 3. The Board of Commissioners may temporarily All members of the Board of Directors who have passed dismiss members of the Board of Directors by the Bank Indonesia or OJK Fit and Proper Test and have stating the reasons for such dismissal. The temporary been appointed by the GMS, as shown in the following dismissal must be notified in writing to the member table.

Term of Office

No. Name Position GMS Effective Latest BI/OJK Approval Appointment Date Re-appointment

1. Tigor M. Siahaan President Director AGM No. SR-84/D.03/2015 1 June 2015 - 10 April 2015 dated 19 May 2015 2. Rita Mas’Oen Director EGM No. 11/150/GBI/DPIP/Rahasia 16 November 27 August 2009 dated 16 November 2009 2009 3. Megawati Sutanto Director EGM No. 13/23/GBI/DPIP/Rahasia 3 March 2011 AGM 15 December 2010 dated 3 March 2011 15 April 2016 4. Vera Handajani Director EGM No. 15/113/GBI/DPIP/Rahasia 26 November 26 July 2013 dated 26 November 2013 2013 5. John Simon Director EGM No. SR-143/D.03/2014 29 August 2014 AGM 27 March 2014 dated 29 August 2014 24 April 2018 6. Lani Darmawan Director EGM No. SR-75/D.03/2016 27 July 2016 15 April 2016 dated 3 May 2016 7. Pandji P. Djajanegara Director EGM No. SR-27/PB.13/2016 28 September 15 April 2016 dated 4 October 2016 2016 - 8. Hedy Lapian Director EGM No. SR-154/D.03/2016 15 August 2016 15 April 2016 dated 15 August 2016 9. Fransiska Oei Compliance Director EGM No. SR-138/D.03/2016 27 July 2016 15 April 2016 dated 27 July 2016 10. Rahardja Alimhamzah Director EGM No. SR-84/PB.12/2017 24 August 2017 - 24 August 2017 dated 31 May 2017 11. Wan Razly Abdullah*) Director EGM No. 11/106/GBI/DPIP/Rahasia 27 August 2009 AGM 27 August 2009 dated 18 August 2009 15 April 2016

*) Resigned as a Director effective on 1 January 2019

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SCOPE OF WORK AND RESPONSIBILITIES OF EACH and directing the focus of risk management towards DIRECTOR the set targets. Follows-up, implements, and executes all directions from the regulators regarding the Bank’s Tigor M. Siahaan – President Director risk management. Determines the Bank’s long-term strategy, marketing strategy, and development of products/services in John Simon – Treasury & Capital Markets Director all business segments based on market demand. Provides strategic direction in marketing and In addition, provides oversight and guidance on development of Treasury & Capital Market’s products policies in operational support and banking services, and services to increase the Bank’s profitability growth information technology, systems and procedures, legal through money market and capital market activities. aspects, financial aspects, and human resources, as Manages the Bank’s funds, liquidity, and liabilities to well as ensures compliance is implemented across all ensure the Bank operates in a prudent manner. banking operations, and the Bank’s risk management policies are comprehensively implemented, to ensure Lani Darmawan – Consumer Banking Director the Bank has high ethical standards, adheres to good Develops strategies and provides guidance on corporate governance principles and prudential Consumer Banking services and product sales at all banking practices. branches in Indonesia, as well as optimizes the market potential by developing innovative and competitive Rita Mas’Oen – Operations & Information Technology Consumer Banking products, to achieve the Bank’s Director profit targets, while paying attention to prudential Determines the long-term strategy and directs principles, implementing risk management policies the Operations & IT Directorate to create effective for all aspects of the Bank, and creates effective and and efficient management of banking operational efficient banking business processes. transactions with high standards, to achieve reliability, as well as to ensure smooth communications between Fransiska Oei – Compliance, Corporate Affairs & Legal users when needed. Director Develops compliance strategies, including those Megawati Sutanto – Credit Director related to compliance policies and principles, as well Provides strategic direction in all credit management as ensures the Bank’s internal regulations (policies, aspects, determines the Credit Underwriting Standards systems, procedures) are in line with all relevant external in line with best practices, reviews credit proposals and regulations (Bank Indonesia, OJK and other financial continuously improves the quality of the credit review institutions/authorities). In addition, is responsible and approval process to improve the effectiveness for managing the Bank’s legal risks, following and efficiency in the credit chain, and maintains the developments in the Capital Market, in particular quality of the credit portfolio, as well as ensures that all the prevailing regulations in the Capital Market, and business activities have complied with the prevailing provides services to the public for any information policies and procedures. needed, particularly with regard to the condition of the Bank as a Public Company, including maintaining Vera Handajani – Risk Management Director its reputation and acting as a liaison officer or contact Provides strategic direction in terms of the Bank’s risk person between the Bank, the Government and the management by considering the principle of prudence, community, as well as carrying out Corporate Social and all aspects of the Bank’s risk management policies Responsibility activities. in a comprehensive manner. Responsible for educating

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Hedy Lapian – Human Resources Director Wan Razly Abdullah*) – Strategy & Finance Director Provides strategic direction in the management Develops and monitors the implementation of and development of the Bank’s human resources to business strategies and initiatives as well as the improve their productivity and quality to support the budget for achieving the Bank’s Vision and Mission. achievement of the Bank’s objectives, while ensuring Manages the Bank’s financial performance by paying and maintaining compliance with the applicable attention to productivity and efficiency when using employment regulations, and corporate culture. Bank resources. Develops and manages management information systems and Bank’s performance to Pandji P. Djajanegara – Sharia Banking Director be reported to regulators and communicated to Provides innovative strategic direction for the the stakeholders. Develops capital and investment implementation of Sharia Banking operations by strategies to optimize Bank profitability and Total ensuring the availability of policies and working Shareholders’ Return, ROA, and ROE. Supervises and procedures, development, marketing, and products plans effective financial management and ensures selling, as well as managing the Sharia Banking that accounting practices are carried out in accordance functions, including managing daily operations, with applicable provisions and standards. business development, customer relationships, and *) Resigned as a Director effective on 1 January 2019 managing systems and work processes to ensure the achievement of profit and business growth in line with Bank’s objectives and Sharia Banking principles. BOARD OF DIRECTORS’ CONCURRENT POSITIONS Pursuant to the provisions of OJK Regulation No. Rahardja Alimhamzah – Business Banking Director 55/POJK.03/2016 concerning the Implementation Together with the President Director, establishes the of Corporate Governance in Commercial Banks, all Bank’s long-term strategy and helps to carry out the members of the Board of Directors are prohibited President Director duties for formulating marketing from serving concurrently as members of Board of strategies and developing products and services in the Commissioners, Board of Directors or as Executive Corporate, Commercial and MSME segments (Micro, Officers in other banks, companies, and/or institutions Small and Medium Enterprises) Banking. Is responsible except those permitted in the said regulation. No for achieving funding and loan targets as well as members of CIMB Niaga’s Board of Directors have increasing cross selling in segments; establishing concurrent positions other than those permitted competitive product direction; service development under the applicable regulations. with operational support in accordance with the demands and development of the banking industry. Member of the Board of Directors who are responsible for the supervision of the Bank’s subsidiary, may perform functional duties as a member of the Non- Bank Subsidiary Company’s Board of Commissioners under the control of the Bank, so long as the concurrent position does not result in any neglect in the execution of their duties and responsibilities as a member of the Board of Directors, and as such is not categorized as a concurrent position.

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Position outside CIMB Name of Company/Institution/ No. Name Position in CIMB Niaga Niaga Organization

1. Tigor M. Siahaan President Director Not Applicable -

2. Rita Mas’Oen Director Not Applicable -

3. Megawati Sutanto Director Not Applicable -

4. Vera Handajani Director Not Applicable -

5. John Simon Director Not Applicable -

6. Lani Darmawan Director Not Applicable -

7. Pandji P. Djajanegara Director Not Applicable -

8. Hedy Lapian Director Not Applicable -

9. Fransiska Oei Compliance Director (Independent Not Applicable - Director)

10. Rahardja Alimhamzah Director President Commissioner PT CIMB Niaga Sekuritas

11. Wan Razly Abdullah*) Director President Commissioner PT CIMB Niaga Auto Finance

*) Resigned as a Director effective on 1 January 2019

The concurrent positions held by Wan Razly Abdullah 3. Board of Directors members are prohibited from and Rahardja Alimhamzah are in the context of using individual advisors and/or professional supervision of the Bank-controlled subsidiary. services as consultants unless fulfilling the following requirements: BOARD OF DIRECTORS’ INDEPENDENCY a. The project is specific; No members of the Board of Directors have financial, b. Based on a clear contract, which at least covers management, stock ownership, or family relationships the scope of work, responsibilities and duration with fellow members of the Board of Directors, of work and fees; members of the Board of Commissioners and/or the c. The Consultant is an Independent Party and has Ultimate Shareholders. Therefore, all members of the the qualifications to work on a specific project. Board of Directors are declared to be independent. BOARD OF DIRECTORS’ CONFLICTS OF INTEREST The Board of Directors must also adhere to the During 2018, the Bank ensured that all members of principle of independency and prioritize the interests the Board of Directors did not have any conflict of of the Bank above their own interests, as well as work interest or any potential conflict of interest with CIMB and behave with high integrity as stipulated in the Niaga. This is in line with the Board of Directors Charter Board of Directors Charter as follows: that states that all Board of Directors members must 1. Members of the Board of Directors are prohibited avoid any potential conflict of interest, or must place from using the Bank and/or information obtained themselves away from potential conflicts of interest from the Bank for personal, family and/or other in any situation. In the event of a conflict of interest, parties’ interests that could harm and/or reduce the Board of Directors members are prohibited from the profits and reputation of the Bank and its taking actions that could harm or reduce the Bank’s subsidiaries. profits and must disclose the potential conflict of 2. Members of the Board of Directors are prohibited interest referred to in each decision. from taking and/or receiving personal benefits from the Bank other than remuneration and other facilities determined by the GMS and/or internal policies.

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A member of the Board of Directors is not authorized 2. The majority of Board of Directors members of must to represent the Bank if: have at least 5 (five) years of experience in banking 1. There is a case in the Court of Law between the operations (including but not limited to credit, Bank and the involved member of the Board of funding, treasury, risk management, finance, etc.) as Directors; Executive Officers. 2. The involved member of the Board of Directors has 3. Have integrity, at least to include: a conflict of interest with the Bank. a. A good character and morals. b. A commitment to comply with applicable laws The procedures members of the Board of Directors and regulations, including the Bank’s rules and must follow in the event of a conflict of interest include: regulations, as well as supporting the policies each member of the Board of Directors who personally, from the regulators. in any way, either directly or indirectly, has an interest c. A commitment to the development of sound in a proposed transaction, contract or agreement, in Bank operations. which the Bank is one of the parties, must state the d. Has not been included in the List of Not Pass the nature of the interest at the Board of Directors meeting Fit and Proper Test. and is prohibited from voting in matters relating to the e. A commitment to not doing and/or repeating proposed transaction or contract, unless the Board of actions and/or acts committed by candidates Directors determines otherwise. as members of the Board of Commissioners with the predicate of not passing the Fit and MECHANISM FOR APPOINTMENT, DISMISSAL, Proper Test, and who have undergone a period REPLACEMENT AND/OR RESIGNATION OF BOARD of sanctions, and OF DIRECTORS MEMBERS f. Capable of taking legal actions. The Bank has a policy No. M.04 concerning the Policies 4. Have the competency, at least to include: and Procedures for the Nomination, Appointment, a. Sufficient knowledge of the banking industry Replacement and/or Dismissal of Board of relevant to their position, including knowledge Commissioners Members, Board of Directors Members, regarding the Bank’s rules and operations, and Independent Parties as Members of Committees including knowledge/understanding regarding responsible to the Board of Commissioners. Risk Management. b. Knowledge of the duties and responsibilities This policy aims to ensure the implementation of of the Main Entity, and an understanding of Good Corporate Governance and risk management, as the main business activities and main risks of well being a guideline in the process of nominating, the Financial Services Institutions in the Bank’s replacing and/or dismissing members of the Board of Financial Conglomerate. Commissioners, Board of Directors and Independent c. Experience in banking and/or finance, including Parties, and regulates the following: experience and expertise in the fields of operations, marketing, accounting, auditing, Criteria for Board of Directors Members funding, credit, money markets, capital markets, The criteria that must be met by the candidates as law or experience and expertise in banking and/ members of CIMB Niaga’s Board of Directors include: or financial supervision. 1. Be Indonesian Citizens and/or Foreign Citizens d. The ability to carry out strategic management who meet the requirements determined by the in the framework of a sound Bank development applicable laws and regulations. including the ability to anticipate economic, Candidates for Compliance Director and Human financial and banking developments, interpret Resources Director must be Indonesian citizens. the Bank’s Vision and Mission, as well as analyse The majority of the Board of Directors members the banking industry situation. must be Indonesian citizens.

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e. Able to work together with other members of as an Executive Officer in other companies. Or the Board of Directors. is willing to resign from the current position if f. Having skills (personal skills) such as: their nomination as a member of the Bank’s i. Strong leadership spirit. Board of Directors passes the Fit and Proper ii. Good reputation and strong networking, Test by the regulator. especially in the financial industry. 6. Is Domiciled in Indonesia. iii. Fostering good relationships with regulators 7. The majority of members of the Board of Directors 5. Has a good financial reputation, for at least the 5 are prohibited from having family relations up to (five) years prior to appointment and during their the second degree with fellow members of the tenure: Board of Directors and/or members of the Board a. Has no non-performing loans (loans with of Commissioners and the ultimate shareholders of collectability 3-5) and/or does not serve as an the Bank. Ultimate Shareholder, a member of the Board 8. Candidates for President Director must be of Commissioners or a member of the Board independent from the ultimate shareholders, of Directors of a legal entity that has non- and the Bank’s Board of Directors and Board of performing loans. Commissioners members. This is verified by examining, the Financial 9. Candidates for Independent Directors must also Information Service System (SLIK), DHN-BI, fulfil other requirements, including: BWCCS, AKKI, AML Solutions, etc. a. Have no affiliate relationship with the Bank’s b. Has never been declared bankrupt. controlling parties for at least 6 (six) months c. Has never been a member of the Board of prior to appointment as Independent Director. Directors and/or a member of the Board of b. Have no affiliate relationship with members Commissioners that has been found guilty of of the Board of Commissioners and other causing a company to be declared bankrupt. members of the Board of Directors. d. Has never been convicted of committing a crime c. Have no concurrent positions as member of a that is detrimental to state finances and/or Board of Directors in other company. related to the financial sector, criminal offenses d. Must not be an insider from the supporting and/or other criminal acts with the threat of capital market institutions or professions whose criminal penalties of 1 (one) year or more. services have been used by the Bank for 6 (six) e. Has never been a member of the Board of months before to appointment as a Director. Directors and/or member of the Board of e. Must be appointed by the GMS. Commissioners who during their tenure: f. The maximum term of office for an Independent i. Has failed to organize an Annual General Director is 2 (two) consecutive periods. Meeting of Shareholders; 10. For Director candidate who will oversee the ii. Has caused a company with a license, Compliance Function, they must: approval or registration from the OJK to not a. Meet the independence requirements as fulfil the obligation to submit an Annual stipulated in the applicable provisions; Report and/or financial report to OJK; b. Have adequate integrity and knowledge iii. Has had their accountability as a member of regarding OJK regulations as well as laws and the Board of Directors and/or member of the regulations. Board of Commissioners disapproved by the 11. Particularly for the Sharia Business Unit Director GMS, or has failed to provide accountability candidates, they must: as a member of the Board of Directors and/ a. Have a commitment to the development of or member of the Board of Commissioners sound Sharia banking operations; to the GMS. b. Have sufficient knowledge and understanding f. Has no concurrent positions as a member of a of Sharia banking operations; Board of Commissioners, Board of Directors, or

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c. Have knowledge and expertise in banking d. The need for representation and diversity in the operations, Sharia banking, finance or Sharia Board of Directors, as well as compliance with finance; the Bank’s strategy; d. Have the ability to carry out strategic e. Gender to meet the optimal composition of the management in the framework of developing a Board of Directors; sound and resilient Sharia Business Unit. 7. The Nomination and Remuneration Committee will provide recommendations accompanied Nomination Procedures for the Board of Directors by the documents assessing the fulfilment of Members the candidate requirements, and proposing the 1. Priority is given to internal candidates, but may also selected candidates to the Board of Commissioners come from professionals. to be proposed and appointed at the GMS as well as 2. The Bank can utilize the services of search firms with to obtain approval from OJK. a good reputation in the selection process of Director 8. The Nomination and Remuneration Committee candidates. also evaluates and provides recommendations, 3. Members of the Board of Directors, Board of accompanied by documents assessing the Commissioners and/or Bank’s Shareholders may fulfilment of candidate requirements, to the Board submit proposals for candidates as members of the of Commissioners for all members of the Board of Board of Directors to the Bank. Directors who will be re-appointed at the GMS. The shareholder who may propose candidates as 9. Each proposal to appoint a member of the Board members of the Board of Directors will be 1 (one) or of Directors to the GMS and OJK shall observe more shareholders representing 1/20 (one twentieth) the recommendations of the Nomination and or more of the total shares with voting rights. Remuneration Committee. 4. The third party appointed (search firm) by the Bank will assist in the selection process, including: Appointment Procedure for the Board of Directors a. Identifying candidates who meet the Members requirements; 1. Members of the Board of Directors are appointed at b. Conducting interviews and selection of the Bank’s GMS. candidates (including conducting background 2. Members of the Board of Directors shall meet the and references checks); requirements to pass the Fit and Proper Test in c. Acting as a liaison between the Board accordance with OJK regulations concerning the of Commissioners, the Nomination and Fit and Proper Test as well as those concerning Remuneration Committee, and candidates the Implementation of Governance in Commercial during the selection and evaluation process; Banks. d. Providing consultations needed by the 3. Members of the Board of Directors who have Nomination and Remuneration Committee. obtained approval for the Fit and Proper Test from 5. The candidates proposed to the Nomination and the OJK must be appointed by a GMS at the latest Remuneration Committee shall at least meet the within 6 (six) months following the date of approval criteria set in the Bank’s Nomination Policy. by OJK. Should the 6 (six) months period lapse 6. The Nomination and Remuneration Committee will without a GMS appointment, the approval from review, assess, and consider the candidates based on: OJK becomes invalid. a. Minimum requirements in accordance with the 4. Members of the Board of Directors appointed in a Bank’s Nomination Policy; GMS prior to obtaining the OJK approval, will only b. Citizenship; become effective in their respective appointment c. Knowledge, competence, and expertise following receipt of OJK approval. The Corporate to complement the Board of Directors Affairs unit is responsible for the submission of composition; applications, including the completeness of the required documents to obtain approval from OJK.

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5. The term of office for members of the Board no later than 90 (ninety) days or 3 (three) months of Directors commences from the date of prior to the effective resignation. appointment at the GMS, up until the close of the a. Before the resignation becomes effective, the fourth AGMS following the appointment, without member of the Board of Directors concerned prejudice to the right of the GMS to terminate them is still obliged to complete their duties and at any time. responsibilities in accordance with the Articles 6. The Corporate Affairs unit shall report the of Association and applicable laws and appointment of members of the Board of Directors regulations. and the effective appointment thereof to the OJK b. The GMS may refuse the resignation of a and other relevant regulators in accordance with member of the Board of Directors if the the prevailing regulations. resignation results in a violation of the Bank’s 7. Members of the Board of Directors that have ended Articles of Association and/or the applicable their term of office may be re-appointed for another laws and regulations. term, with due observance of stipulations in points c. Regarding the resigning member of the Board 1 - 6 above. of Directors, accountability can still be requested for the execution of their duties throughout their Procedure for Dismissal, Replacement and/or term of office from the previous accountability Resignation of Members of the Board of Directors date up to the date of their resignation at the 1. Proposals for dismissal, and/or replacement following AGMS. of members of the Board of Directors shall be d. The release and discharge of members submitted to the GMS, and shall observe the resigning from the Board of Directors shall be Bank’s Nomination and Remuneration Committee granted after being released by the AGMS. recommendations. 5. In the event that the GMS cancels the appointment 2. Members of the Board of Directors are dismissed by of candidate members of the Board of Directors the GMS. who have received approval from OJK, the Bank 3. The GMS may at any time dismiss members of the must report the cancellation to OJK no later than 2 Board of Directors from their position by stating the (two) working days after the GMS, accompanied by reason that the concerned member of the Board the GMS minutes. of Directors no longer fulfils the requirements 6. At any time, the Board of Commissioners based on as a member of the Board of Directors, including the decision of the Board of Commissioners’ Meeting actions taken that were detrimental to the Bank or can temporarily dismiss one or more members of other reasons considered appropriate by the GMS. the Board of Directors from their positions: a. The decision to dismiss a member of the Board of a. The temporary dismissal along with the reason Directors, as referred to in number (3) above, shall shall be notified in writing to the member of the be taken after the person concerned has been Board of Directors concerned. given the opportunity to defend themself in the b. Within 90 (ninety) calendar days after the date GMS. The opportunity to defend themself is not of the temporary dismissal of the member(s) of required in the event that the person concerned the Board of Directors, by taking into account does not object to the termination. the applicable laws and regulations, the Board b. The dismissal of a member of the Board of of Commissioners must convene a GMS to Directors, as referred to in number (3), applies revoke or reinforce the temporary dismissal from the closing of the GMS that decides the decision. dismissal or any other dates stipulated in the GMS c. In the GMS, concerned members of the Board resolution. of Directors are provided with the opportunity 4. Members of the Board of Directors have the right to defend themselves. to resign from their position through written d. In the event the member of the Board of notification regarding their intention to the Bank Directors who has been temporarily dismissed

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is not present at the GMS, the member of the In the event that there is a status of suspect Board of Directors who is temporarily dismissed against a member of the Board of Directors will be deemed as not be exercising their right from the authorities, the member of the Board to defend themselves, thus the suspended of Directors is deactivated from their duties and member of the Board of Directors must accept responsibilities until proven otherwise. the GMS decision. 9. If the position as a member of the Board of Directors e. In the event a GMS is not conducted within 90 is vacant due to any reason that causes the number (ninety) days after the temporary dismissal, the of members of the Board of Directors to be less temporary dismissal becomes null and void. than 3 (three), a GMS to fill the vacancy must be 7. The GMS may: held no later than 60 (sixty) calendar days from the a. Appoint another person to fill the position of a vacancy by taking into account the applicable laws member of the Board of Directors who has been and regulations. dismissed from their position, or 10. In the event the position of President Director is b. Fill the position of a member of the Board of vacant and as long the successor has not been Directors who resigns from their position, or appointed or has not held the position, the Vice c. Appoint someone as a member of the Board of President Director, or if the Vice President Director Directors to fill a vacancy, or is vacant, then one of the Directors appointed by d. Increase the number of members of the Board the Board of Commissioners shall carry out the of Directors. obligations of the President Director with the same The term of office for a person appointed by the authorities and responsibilities as the President GMS as referred to in number (7) above, starts from Director. the date of the GMS that appointed the until the 11. If the Director responsible for the Compliance closing of the fourth Annual GMS after the date of Function is absent, resigns or has ended their term appointment, without prejudice to the right of the of office, the Bank shall immediately appoint a GMS to terminate at any time. replacement Director, no later than 6 (six) months 8. The position as a member of the Board of Directors after the Director became absent, resigned or ends when: ended their term of office. a. Their term of Office ends according to the Until the replacement of the Director responsible provisions of the Bank’s Articles of Association; or for the Compliance Function, the Bank must b. They resign according to the provisions of appoint or assign one of the Directors to temporarily number (4) above; or perform the duties of Director responsible for the c. They no longer fulfils the regulatory Compliance Function. requirements; or 12. In the event all positions as members of the Board d. They pass away; or of Directors are vacant due to any reason, a GMS e. They are dismissed based on a resolution of the must be held no later than 60 (sixty) days after GMS; or such vacancies, to appoint new Board of Directors f. They are declared bankrupt or placed under members, and for the time being the Bank will be custody based on a court decision; or managed by the Board of Commissioners. g. They have been involved in a financial crime, 13. The Corporate Affairs unit shall disclose the meaning they hold the status of suspect information to the public and submit to the OJK from the authorities as a member of the and other relevant regulators no later than 2 (two) Board of Directors. The financial crimes working days after the receipt of the application for includes manipulation and various forms of resignation of members of the Board of Directors. embezzlement in financial services activities as well as Money Laundering as referred to in the Law on the Prevention and Eradication of Money Laundering Crimes.

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Board of Directors

BOARD OF DIRECTORS IMPLEMENTATION OF BOARD OF DIRECTORS’ DEVELOPMENT PROGRAM DUTIES AND RESPONSIBILITIES IN 2018 CIMB Niaga continues to promote capacity building In addition to executing the 2018 GMS resolutions, the activities for the Board of Directors through its Board of Directors carried out the following duties and induction program for new Board of Directors responsibilities during 2018: members, and through training programs for Board of 1. Determined the strategic measures to achieve Directors members to support their duties to achieve the Bank’s mission to provide integrated universal sustainable growth and effective management as banking services in Indonesia, including focusing stipulated in the Board of Directors’ Charter. on core competencies; growth of low-cost funds; improving efficiencies and discipline in cost Induction Program for New Directors management; balancing risks, compliance culture As stipulated in the Board of Directors Charter, and and capital adequacy; as well as strengthening the the Policy of Training and Development for the Board use of technology and information. of Directors and Board of Commissioners, which is 2. Engaged in loan syndication while managing credit uploaded on the Bank’s website, newly appointed risk and improved credit infrastructure in order to Board of Directors members must follow the Induction promote growth of business banking customers. Program, which aims to provide knowledge to the new 3. Increased the customer experience for each and Directors to gain an understanding of the Bank, so as to every customer, in line with the Bank’s aspiration to perform their duties effectively and efficiently. become the leading bank in innovation and digital banking services. The orientation program takes the form of documents 4. Launched the QR (Quick Response) program, prepared by the Corporate Affairs unit, including: enabling transactions via Rekening Ponsel, credit 1. Bank’s Vision and Mission card and debit card by using the QR Code through 2. Bank’s Code of Ethics and Conduct mobile apps used by customers when making 3. Bank’s Organizational Structure transactions. 4. Bank’s Articles of Association 5. Strengthened IT Security capabilities in terms of 5. Corporate Policy Manual (GCG Charter) safeguarding the security of Bank’s confidential data, 6. Board of Director’s Charter and The Committees improved the capacity of the Security Operations under the Board Directors Charters. Center unit for monitoring and countering cyber 7. Regulations related to Banking and Capital Markets crime attacks. 8. Bank’s Annual Report. 6. Ensured the Business Continuity Management and 9. Bank’s Business Plan. the Business Continuity Plan were available and in place throughout the organization, to ensure that At the end of 2018, an induction program was provided CIMB Niaga could continue to operate during crisis to 1 (one) Director candidate, namely Lee Kai Kwong. situations at an acceptable level where the Bank still can provide financial services. 7. Launched the ‘Learning on the Go’ (LOG) program, a device-based digital learning platform, which introduced a completely different learning experience among Bank’s employees, necessitating a change management approach to establish a new learning culture.

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To improve the induction program quality and effectiveness, the Bank is in the process of developing a digital orientation program (e-Learning), through Learning on the Go (LoG).

Board of Directors Training Program in 2018

Risk Management Certification The Board of Directors and the Board of Commissioners are required to participate in Risk Management Certification and Refreshment programs in accordance with the regulations. This is in accordance with the Employment Regulations (P2K) regarding Implementation of Employee Learning, and BI Regulation No.11/19/ PBI/2009 dated 4 June 2009, and its amendment BI Regulation No. 12/7/PBI/2010 dated 19 April 2010 regarding Risk Management Certification for Management and Officers of Commercial Banks, the Board of Directors and the Board of Commissioners are required to participate in Risk Management Certification and Refreshment programs in accordance with the regulations.

In 2018, the members of the Board of Directors participate in the Risk Management Certification Refreshment:

Date of Certificate/ Name Position Provider Level Area/Field Refreshment Issued

Fransiska Oei Director PT Diasprora 5 Risk Management Certification Refreshment 2 March 2018 Saraswati Gemilang Program - Jakarta

Megawati Sutanto Director PT Diasprora 5 Risk Management Certification Refreshment 2 March 2018 Saraswati Gemilang Program - Jakarta

Competency Development and Training Program All members of the CIMB Niaga Board of Directors are committed to improving competence to support their daily duties and responsibilities. This commitment is reflected in the training programs attended by each member of the Board of Directors throughout 2018 as shown in the table below.

Training of Board of Directors in 2018 Type of Trainings/Seminars/Workshops/Sharing No Name Organizer Date and Location Knowledge 1 Tigor M. Siahaan Syariah Executive Program CIMB Niaga 8 February 2018 Jakarta

Global Leadership Conference (GLC) Young President 5-6 March 2018 Organization (YPO) Singapore Lunch and Learn CIMB Niaga 12 March 2018 Jakarta Empowering The Rising Generation to Make Their Young President 17 April 2018 Mark Organization (YPO) Jakarta ASEAN Corporate Governance Scorecard Sharing CIMB Niaga 24 April 2018 Session Jakarta Strategy Execution Blending Execution, Young President 4-5 May 2018 Innovation, and Empathy Organization (YPO) Jakarta Sustainable Finance Implementation Training CIMB Niaga 26 June 2018 Jakarta RCU Leadership Motivational Session CIMB Niaga 10 October 2018 Jakarta Year End Senior Leader Meeting CIMB Niaga 18 – 20 October 2018 Banyuwangi, East Java

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Type of Trainings/Seminars/Workshops/Sharing No Name Organizer Date and Location Knowledge 2 Rita Mas’Oen Tech Refresh Projects Prioritization Workshop CIMB Group 5 February 2018 Kuala Lumpur, Malaysia CIMB Niaga - Emtek Collaborative Workshop CIMB Niaga 8 March 2018 Jakarta Workshop Result NPS 2017 CIMB Niaga 23 March 2018 Jakarta ASEAN Corporate Governance Scorecard Sharing CIMB Niaga 24 April 2018 Session Jakarta Sustainable Finance Implementation Training CIMB Niaga 26 June 2018 Jakarta Risk Culture Lunch and Learn CIMB Group 27 August 2018 Jakarta iCIO Traveler 2018 Alibaba Computing Conference iCIO Commucity 18- 23 September 2018 2018 Hangzhou, China Year End Senior Leader Meeting CIMB Niaga 18 – 20 October 2018 Banyuwangi, East Java Motivational Session Ops & IT CIMB Niaga 6 December 2018 Bintaro, Jakarta 3 Megawati Sutanto Syariah Executive Program CIMB Niaga 8 February 2018 Jakarta Risk Management Certification Refreshment CIMB Niaga 2 March 2018 Program Jakarta Lunch and Learn CIMB Niaga 12 March 2018 Jakarta ASEAN Corporate Governance Scorecard Sharing CIMB Niaga 24 April 201 Session Jakarta Sustainable Finance Implementation Training CIMB Niaga 26 June 2018 Jakarta Sharing Session “The Importance of Collateral” CIMB Niaga 29 August 2018 Lesson Learnt Jakarta Group CEO Townhall CIMB Niaga 31 August 2018 Jakarta Year End Senior Leader Meeting CIMB Niaga 18 – 20 October 2018 Banyuwangi, East Java Data Scientist Training Programme (customised CIMB Group 6-9 December 2018 for Risk EXCO) Kuala Lumpur, Malaysia 4 Vera Handajani Lunch and Learn CIMB Niaga 12 March 2018 Jakarta Training Risk Management Strategy & Enterprise Banker Association for 20 March 2018 Risk Management Risk Management (BARA) Jakarta ASEAN Corporate Governance Scorecard Sharing CIMB Niaga 24 April 2018 Session Jakarta Advanced Presentation Skills Workshop Group Risk CIMB Group 21 May 2018 Kuala Lumpur, Malaysia Lunch & Learn – Cyber Security CIMB Niaga 31 May 2018 Jakarta 2018 IFF Annual Membership Meeting Institute of International 1 August 2018 Finance (IIF) Nusa Dua, Bali

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Type of Trainings/Seminars/Workshops/Sharing No Name Organizer Date and Location Knowledge Risk Culture Lunch and Learn CIMB Group 27 August 2018 Jakarta Annual Workshop Directorate Risk Management CIMB Niaga 2-4 November 2018 Semarang, Central Java RCU Leadership Motivational Session CIMB Niaga 10 October 2018 Jakarta Year End Senior Leader Meeting CIMB Niaga 18 – 20 October 2018 Banyuwangi, East Java Data Scientist Training Programme (customised CIMB Group 6-9 December 2018 for Risk EXCO) Kuala Lumpur, Malaysia 5 John Simon Syariah Executive Program CIMB Niaga 8 February 2018 Jakarta Treasury Product CIMB Niaga 23-24 February 2018 Jakarta ASEAN Corporate Governance Scorecard Sharing CIMB Niaga 24 April 2018 Session Jakarta Training 2002 ISDA Master CIMB Niaga 4-5 May 2018 Jakarta Sustainable Finance Implementation Training CIMB Niaga 26 June 2018 Jakarta Trade Product For Treasury CIMB Niaga 25 August 2018 Jakarta Risk Culture Lunch and Learn CIMB Group 27 August 2018 Jakarta Year End Senior Leader Meeting CIMB Niaga 18 – 20 October 2018 Banyuwangi, East Java 6 Lani Darmawan Syariah Executive Program CIMB Niaga 8 February 2018 Jakarta ASEAN Corporate Governance Scorecard Sharing CIMB Niaga 24 April 2018 Session Jakarta Sustainable Finance Implementation Training CIMB Niaga 26 June 2018 Jakarta Risk Culture Lunch and Learn CIMB Group 27 August 2018 Jakarta Year End Senior Leader Meeting CIMB Niaga 18 – 20 October 2018 Banyuwangi, East Java 7 Pandji P. Syariah Executive Program CIMB Niaga 8 February 2018 Djajanegara Jakarta ASEAN Corporate Governance Scorecard Sharing CIMB Niaga 24 April 2018 Session Jakarta Sustainable Finance Implementation Training CIMB Niaga 26 June 2018 Jakarta Risk Culture Lunch and Learn CIMB Group 27 August 2018 Jakarta Annual Directorate Workshop Syariah CIMB Niaga 1-2 September 2018 Bogor, West Java Year End Senior Leader Meeting CIMB Niaga 18 – 20 October 2018 Banyuwangi, East Java

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Board of Directors

Type of Trainings/Seminars/Workshops/Sharing No Name Organizer Date and Location Knowledge 8 Hedy Lapian ASEAN Corporate Governance Scorecard Sharing CIMB Niaga 24 April 2018 Session Jakarta Sustainable Finance Implementation Training CIMB Niaga 26 June 201 Jakarta Risk Culture Lunch and Learn CIMB Niaga 27 August 2018 Jakarta HR Workshop 2018 CIMB Niaga 2-4 November 2018 Solo, Central Java Year End Senior Leader Meeting CIMB Niaga 18 – 20 October 2018 Banyuwangi, East Java 9 Fransiska Oei Risk Management Certification Refreshment CIMB Niaga 2 March 2018 Program Jakarta ASEAN Corporate Governance Scorecard Sharing CIMB Niaga 24 April 2018 Session Jakarta Seminar on Prospects for Dispute Resolution Alternative Institute 30 April 2018 through LAPSPI and LAPSPI Arbitration Law for Indonesian Banking Bogor, West Java Strength Dispute Resolution (LAPSPI) Seminar Perbanas ‘Managing Climate Related Risk, Indonesian Banks 4 May 2018 Capturing Sustainable Rinance Opportunities’ Association (Perbanas) Jakarta Financial Technology Workshop : Understanding CIMB Niaga 9 May 2018 the regulation of Financial Technology Jakarta Speaker : Beyond 2018 Conversation CIMB Niaga 17 May 2018 Jakarta Sharing Session : Collateral CIMB Niaga 6 June 2018 Jakarta Sustainable Finance Implementation Training CIMB Niaga 26 June 2018 Jakarta Breakfast Session Sustainable Finance National Center for 28 August 2018 Sustainability Reporting Jakarta (NCSR) Legal Forum CIMB Niaga 13 September 2018 Jakarta Facilitator: SESPI Bank Programme – Compliance Indonesia Banking 19 September 2018 & Management Control Overview Development Institute Jakarta (IBDI) Socialisation of Commercial Bank Regulation OJK 28 September 2018 Jakarta RCU Leadership Motivational Session CIMB Niaga 10 October 2018 Jakarta Year End Senior Leader Meeting CIMB Niaga 18 – 20 October 2018 Banyuwangi, East Java Annual Workshop Directorate CCAL CIMB Niaga 2 – 3 November 2018 Bali 10 Rahardja Syariah Executive Program CIMB Niaga 8 February 2018 Alimhamzah Jakarta Annual Workshop Directorate Business Banking CIMB Niaga 8 - 9 March 2018 Bandung, West Java Lunch and Learn CIMB Niaga 12 March 2018 Jakarta RCU/DCORO Forum - 2018 CIMB Niaga 4 April 2018 Jakarta

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Type of Trainings/Seminars/Workshops/Sharing No Name Organizer Date and Location Knowledge ASEAN Corporate Governance Scorecard Sharing CIMB Niaga 24 April 2018 Session Jakarta Prospective Broker Representatives Proffesional Indonesian Futures 25 - 26 April 2018 Training Association Jakarta Risk Culture Lunch and Learn CIMB Niaga 27 August 2018 Jakarta Year End Senior Leader Meeting CIMB Niaga 18 – 20 October 2018 Banyuwangi, East Java 11 Wan Razly Annual Workshop Directorate Strategy & Finance CIMB Niaga 2-3 February 2018 Abdullah*) Bandung, West Java Lunch and Learn CIMB Niaga 12 March 2018 Jakarta ASEAN Corporate Governance Scorecard Sharing CIMB Niaga 24 April 2018 Session Jakarta Risk Culture Lunch and Learn CIMB Niaga 27 August 2018 Jakarta Year End Senior Leader Meeting CIMB Niaga 18 – 20 October 2018, Banyuwangi, East Java

*) Resigned as a Director effective on 1 January 2019

BOARD OF DIRECTORS’ LOAN PROVISION POLICY Throughout 2018, the implementation of duties and Loans to the Board of Directors are conducted under responsibilities, and the discussions in the Executive the normal pricing and terms policy, as conducted Committee meetings were considered to be well run between the Bank and non-related parties. Loans to and effective. Participation by the Board of Directors the Board of Directors must be calculated as per the at the committee meetings during 2018, including Legal Lending Limit for CIMB Niaga in accordance decisions taken during the meeting discussions, were with PBI No. 8/13/PBI/2006. This policy is set out in the also be used as a reference. Board of Directors’ Charter. Results of the Executive Committee’s Performance PERFORMANCE ASSESSMENT FOR THE Assessment in 2018

COMMITTEES UNDER THE BOARD OF DIRECTORS Executive Committee Value

(EXECUTIVE COMMITTEE) Risk Management Committee (RMC) 475

Asset & Liability Committee (ALCO) 450 Performance Assessment Policy and Procedure Information Technology Steering Committee (ITSC) 480 for the Committees under the Board of Directors (Executive Committee) Operational Risk Management Committee (ORC) 470 The criteria and basis for considering the Executive Credit Policy Committee (CPC) 475 Committee’s assessment are based on the following: Capital Management Committee (CMC) 440 1. Number of meetings held 2. Board of Directors’ attendance Performance Rating 3. SLA Minutes of Meeting 1. Excellent > 470 - 500 4. Action on Matters arising 2. Good 400 - < 470 3. Fair 300 - < 400 4. Poor 200 - < 300 5. Very Poor < 200

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Board of Commissioners and Board of Directors Performance Assessment

PERFORMANCE ASSESSMENT FOR THE BOARD Performance Assessment for the President OF COMMISSIONERS (INCLUDING THE PRESIDENT Commissioner COMMISSIONER) President Commissioner assessment criteria includes: 1. Effectiveness of the implementation of Duties and Policies and Procedures for the Board of Responsibilities Commissioners’ Performance Assessment 2. Leadership The Board of Commissioners’ Performance assessment is conducted every year (minimum once a year) and Parties Performing the Board of Commissioners’ includes: Performance Assessment 1. Collegial performance assessment for the Board of The parties involved in conducting the Board of Commissioners; Commissioners’ performance assessment’ are as 2. Individual performance assessment for each follows: member of the Board of Commissioners; and 3. Performance assessment for the President Collegial Performance Assessment for the Board of Commissioner. Commissioners The assessment is carried out by each Commissioner Starting in 2018, performance assessments were on the overall performance of the Board of conducted using a self-assessment appraisal online Commissioners. survey methodology. All assessment results are confidential and anonymous. Individual Performance Assessment for Each Member of the Board of Commissioners The performance assessment results contribute Each Commissioner provides an assessment for each to the continuous improvement of the Board of other Commissioner. Commissioners’ performance. Performance Assessment for the President Board of Commissioners’ Performance Assessment Commissioner Criteria Assessments are carried out by each Commissioner on The criteria applied for the Board of Commissioners’ the President Commissioner’s performance. (including the President Commissioner) performance assessments includes: The final evaluation on the collegial and individual performance assessments for the Board of Collegial assessment criteria includes: Commissioners is carried out by the President Collegial assessment criteria shall include: Commissioner, based on the Nomination 1. Effectiveness of the Board of Commissioners’ role and Remuneration Committee review and 2. Effectiveness of the implementation of Duties and recommendations. The evaluation of the President Responsibilities Commissioner’s performance assessment will be 3. Effectiveness of the Board of Commissioners’ discussed at the Nomination and Remuneration Meetings Committee meeting, and the results of the discussion 4. Implementation of Good Corporate Governance will be followed up in the form of improvements and 5. Effectiveness of the Implementation of Risk action plans (if necessary). Management and Internal Control Board of Commissioners’ Performance Assessment Individual Performance Assessment for Each Results in 2018 Member of the Board of Commissioners In 2018, the Board of Commissioners carried out its Individual assessment criteria includes: oversight function to ensure the Bank’s performance 1. Competency and Capability achievement could fulfil the shareholders and 2. Effectiveness of the implementation of Duties and other stakeholders expectations, with the following Responsibilities assessment results: 3. Leadership • The score for the Board of Commissioners’ collegial performance assessment for 2018 was 3.9 (Exceeded Expectations). The “Good Corporate

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Governance Implementation” and “Effectiveness of Risk Management and Internal Control Implementation” criteria received the highest scores, averaging 4.3 (Very Good), and “Effectiveness of Board of Commissioners’ Meetings” received the lowest score of 3.7 (Exceeded Expectations). • The average score for the Individual performance assessments for each member of the Board of Commissioners was 4.2 (Very Good). • The score for the President Commissioner’s performance assessment was 4.3 (Outstanding)

Table of performance assessment results Overall Result Description > 4.7 Exceptional 4.0 – 4.6 Outstanding 3.7 – 3.9 Exceed Expectations 3.0 – 3.6 Meet Expectations < 3.0 Need Improvement

THE PERFORMANCE ASSESSMENT FOR THE BOARD In addition, starting in 2018 the Bank has also OF DIRECTORS (INCLUDING THE PRESIDENT implemented collegial performance self-assessments DIRECTOR) for Board of Directors that is conducted using a self- assessment appraisal online survey methodology. All Policies and Procedures for the Board of Directors’ assessment results are confidential and anonymous. Performance Assessment To monitor the Bank’s strategy and performance The assessment results will be discussed at the Board achievement on an annual basis, CIMB Niaga conducts of Directors meetings, and then discussed at the individual performance assessments for each member Nomination and Remuneration Committee meeting of the Board of Directors, including the President in order to obtain input for continuously improvements Director. The performance indicators for each member on the Board of Directors performance. of the Board of Directors are determined through a Balanced Scorecard approach, where the Bank’s All performance assessments for the Board of Directors, aspirations and strategic goals are translated into both individually and collegial, are conducted at least Key Performance Indicators (KPI) in accordance with once a year. the duties and responsibilities of each member of the Board of Directors, and take into account the collegial Board of Directors’ Performance Assessment and individual responsibilities in the financial and non- Criteria financial aspects. The KPI’s set are mutually agreed by The criteria applied for the Board of Directors; (including the Board of Directors and with a recommendation the President Director) performance assessments from the Nomination and Remuneration Committee includes: are forwarded for approval by the Board of Commissioners. The KPI are cascaded down to all Collegial Performance Assessment for the Board of employees to ensure harmony with the achievement Directors of the Bank’s goals and strategies. Collegial assessment criteria includes: 1. Effectiveness of the Board of Directors’ role The individual performance assessments for each 2. Effectiveness of the implementation of Duties and member of the Board of Directors at the end of the year Responsibilities are forwarded to the Nomination and Remuneration 3. Effectiveness of the Board of Directors’ Meetings Committee for their input and recommendations 4. Implementation of Good Corporate Governance before being forwarded for approval by the Board of 5. Effectiveness of the Implementation of Risk Commissioners. Management and Internal Control

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Performance Assessment of the Board of Commissioners and the Board of Directors

Individual Performance Assessment for Each Member of the Board of Directors Components applied in the individual performance assessments for each Director (including the President Director) include:

Directorate Business Unit Business Enabler

Performance No. *) Parameter Legal MSME) Credit (Retail) Financial Strategy & Strategy Technology Information Information Compliance, Compliance, Treasury and Treasury Capital Market Capital (Corporate and (Corporate Sharia Banking Sharia Operational and Operational Risk Management Human Resources President Director President Corporate Affairs & Affairs Corporate Business * Banking Consumer Banking Banking Consumer

1 Shared Target - 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 2 Financial 45% 35% 35% 35% 40% 25% 10% 15% 15% 20% 15% 3 Customer 10% 10% 10% 10% 5% 10% 10% 10% 20% 10% 15% 4 T18 Initiatives/ 15% 15% 15% 15% 15% 25% 40% 35% 25% 30% 30% Key Focus Areas 5 Risk & Compliance 20% 20% 20% 20% 20% 20% 20% 20% 20% 20% 20% 6 Learning & Growth 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10%

*) Notes: - Business Banking oversees Corporate Banking, Commercial Banking and MSME Banking. - Credit oversees Asset Restructuring & Recovery and Credit Underwriting for Business Banking segment.

Parties Performing the Board of Directors’ Board of Directors’ Performance Assessment Performance Assessment Results in 2018 The parties involved in conducting the Board of The Board of Directors’ collegial performance Directors’ performance assessment’ are as follows: assessment score in 2018 was 3.6 (Meet Expectations).

Individual Performance Assessment for Each The criteria for “Good Corporate Governance Member of the Board of Directors Implementation” received the highest score, with The President Director carries out the performance an average of 3.9 (Exceeded Expectations), and assessments for each Director. The individual “Effectiveness of Board of Directors’ Meeting” received assessment results for all Directors (including the lowest score of 3.4 (Meets Expectations). the President Director) will be discussed in the Nomination and Remuneration Committee for input Table of performance assessment result and recommendations before submitting to the Board Overall Description Result of Commissioners’ for approval. > 4.7 Exceptional Collegial Performance Assessment for the Board of 4.0 – 4.6 Outstanding Directors 3.7 – 3.9 Exceed Expectations

Each Director provides an assessment on the Board 3.0 – 3.6 Meet Expectations of Directors’ collegial performance. The result of the < 3.0 Need Improvement collegial assessments shall be discussed at the Board of Directors meeting and the discussion results will be followed up in the form of improvements or action plans (if necessary). The President Director submits the Board of Directors’ collegial performance assessment, including the improvement plans (if any), to the Board of Commissioners and the Nomination and Remuneration Committee to obtain input and approval.

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Board of Commissioners and Board of Directors Composition Diversity Policy and its Implementation

The Board of Commissioners and Board of Directors 4. Age composition diversity is stipulated in the Attachment Members of the Board of Commissioners shall have to the Financial Services Authority Circular Letter diversity in ages. Number 32/SEOJK.04/2015 concerning Guidelines for Corporate Governance in Public Companies, and has 5. Independence been included in the Bank’s Articles of Association. a. Minimum 50% (fifty percent) of the members The appointment of the Board of Commissioners and of the Board of Commissioners shall be Board of Directors is carried out by considering their Independent Commissioners. banking industry experience and understanding, b. The term of office of an Independent integrity and the dedication of each individual. Commissioner is a maximum of 9 (nine) years and can be reappointed with due regard to When the composition diversity for members of applicable regulations. the Board of Commissioners and Board of Directors is appropriate and in accordance with the Bank’s COMPOSITION DIVERSITY FOR MEMBERS OF THE needs, it will support the effectiveness of the Board BOARD OF DIRECTORS of Commissioners and Board of Directors duties and The composition diversity factors for the members of responsibilities implementation. Furthermore, it will the Board of Directors, includes: support the achievement of the Bank’s vision and mission to grow and develop. The Bank has established 1. Expertise/Experience, has at least: a policy regarding the Board of Commissioners and a. 1 (one) member who has expertise/work Board of Directors composition diversity that includes: experience in the banking industry or expertise/ work experience in the field of economy/business, COMPOSITION DIVERSITY FOR MEMBERS OF THE b. 1 (one) member who has expertise/work BOARD OF COMMISSIONERS experience in the field of risk management, The diversity factors in the composition of the members c. 1 (one) member who has expertise/work of the Board of Commissioners, among others, consists of: experience in the field of finance/accounting.

1. Expertise/Experience, has at least: 2. Citizenship a. 1 (one) member who has expertise/work The majority (more than 50% (fifty percent)) of experience in the fields of economy/business/ the members of the Board of Directors shall be finance, and/or Indonesian citizens b. 1 (one) member who has expertise/work experience in the banking industry, and 3. Gender c. 1 (one) member who has expertise/work Pays attention to gender diversity of the Board of experience in the field of risk management. Commissioners Directors, with a minimum 1 (one) female or male member. 2. Citizenship The majority (more than 50% (fifty percent)) of the 4. Age members of the Board of Commissioners shall be Members of the Board of Commissioners shall have Indonesian citizens diversity in ages.

3. Gender Pays attention to gender diversity of the Board of Commissioners members

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Diversity Policy on Composition of The Board of Commissioners and The Board of Directors and Its Implementation

5. Independency a. The President Director should be independent from the Bank’s ultimate shareholders. b. Have and/or appoint at least 1 (one) Independent Director.

Aspects of Diversity of Members of the Board of Commissioners

Citizenship Consists of: 1. 4 (four) members of the Board of Commissioners are Indonesian citizens. 2. 2 (two) members of the Board of Commissioners are Malaysian citizens. 3. 1 (one) member of the Board of Commissioners are United States citizen.

Education The education level of the members of the Board of Commissioners covers the Bachelor and Post- graduate levels with various fields of education such as economics, management, and political science & psychology.

Work experience Various work experience, including: Minister/Head of Bappenas, Chairperson of the Investment Panel Risk Committee, ASEAN Regional Strategy Group and ASEAN Regional Business Council, Advisory Board of the International Blavatnik School of Government, University of Oxford, Expert Staff of the Bank Indonesia Board of Governors and other important positions at Bank Indonesia, Board of Commissioners and/or Directors of national and multinational financial and non-financial institutions. Leading college lecturers and deans both at home and abroad and the Chief Risk Officer of a multinational bank.

Independency All members of the Board of Commissioners have no affiliation with fellow members of the Board of Commissioners, Directors, and Ultimate Shareholders of the Bank. There are 4 (four) Independent Commissioners.

Age The age diversity of members of the Board of Commissioners is in a fairly productive and mature ages, namely 45 years old - 71 years old.

Gender There are 1 (one) female member of the Board of Commissioners.

Aspects of Diversity of Members of the Board of Directors

Citizenship Consists of: 1. 10 (ten) members of the Board of Directors who are Indonesian citizens. 2. 1 (one) member of the Board of Directors who is Malaysian citizen.

Education The level of education includes Bachelor and Post-graduate levels with various fields of education such as economics, finance, law, Bachelor of Commerce, business, computer science, accounting, and others.

Work experience Various work experience, including: 1. Member of the Board of Directors of national and multinational financial and non-financial institutions. 2. Various important positions in national banks and foreign banks, such as Head of Strategic Business Development, Senior Country Operations Officers, Head of Corporate Banking, Head of Operations Risk, Head of Trading & Structuring, Head of Treasury, Head of Network, Chief of Shariah Banking, and others. 3. Independent Commissioner of the insurance company. 4. Founder and Senior Partner Law Firm. 5. Auditor. All members of the Board of Directors have work experience in the banking sector.

Independency All members of the Board of Directors have no affiliation with fellow members of the Board of Directors, Board of Commissioners and Ultimate Shareholders of the Bank.

Age The age diversity of members of the Board of Directors is in a fairly productive and mature ages, which is 47 years old - 61 years old.

Gender There are 6 (six) female Directors, out of a total of 11 (eleven) members of the Board of Directors.

COMPOSITION DIVERSITY POLICY FOR THE BOARD OF COMMISSIONERS AND THE BOARD OF DIRECTORS ACHIEVEMENT The current composition of the Board of Commissioners and the Board of Directors has fulfilled the diversity aspects mentioned above and is aligned with the Bank’s strategy, Vision and Mission.

476 Annual Report 2018 PT Bank CIMB Niaga Tbk Supporting Corporate Governance Corporate Social Others Consolidated Business Review Report Responsibility Corporate Data Financial Report

Age of Board of Commissioners Age of Board of Directors (%) (%)

12.5

45 55

45 - 55 Years 50 56 - 65 Years 45 - 55 Years 66 - 75 Years 56 - 65 Years

Gender of Board of Commissioners Gender of Board of Directors (%) (%)

14.3

55 45

85.7 Male Male Female Female

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Diversity Policy Composition of The Board of Commissioners and The Board of Directors and Its Implementation

Citizenship of Board of Commissioners Education of Board of Commisioners and Board of Directors and Board of Directors (person) (person)

14 12

1 1

Indonesia Malaysia USA Undergraduate Graduate Postgraduate

Independency of Board of Commissioners Expertise of Board of Commissioners & (%) Board of Directors (person)

1 1 1 Political Science 1 3 Business Risk Management 2 Economy 57 43 1 Management Accounting 1 Computer Science Non-Independent Medical Commissioner Independent Law Commissioner 7

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Remuneration Policy

CIMB Niaga established and implemented a Risk- of the Bank. As a result, the risk profile was the main Based Remuneration policy No. A.06.02 in October influence for implementing a variable remuneration. 2017, which was adjusted on 1 December 2018 by adding Sharia principles. The Bank is committed The Bank’s remuneration policy covers and applies to to implementing a competitive, fair, and balanced employees in business, operational and supporting risk-based remuneration system. Furthermore, the functions and is in accordance with POJK No. 45/ Bank always ensures that no individual receives POJK.03/2015 dated 23 December 2015, and SEOJK No. compensation below the provisions set by the 40/SEOJK.03/2016 dated 26 September 2016, and also Government. POJK No. 59/POJK.03/2017 dated 18 December 2017 concerning the Implementation of Governance when OBJECTIVES AND BACKGROUND Providing Remuneration in Commercial Banks and In line with the prevailing laws and regulations, CIMB Sharia Business Units, whereby this policy regulates: Niaga has implemented remuneration policies for 1. The prudential principles in providing risk-based the Board of Commissioners, Board of Directors remuneration. and employees, both mandatory and additional. 2. The application of variable remuneration is The remuneration policy is an important aspect for in accordance with the regulatory provisions attracting, motivating and retaining the best employees regarding the implementation of remuneration in to create qualified human resources. The remuneration Commercial Banks and Sharia Business Units. policy takes into account the Bank’s capability, and is always based on the principles of competitiveness, DETERMINATION OF REMUNERATION BASED ON fairness and risk-based, and is in line with the direction PERFORMANCE AND RISK and policies of OJK. The policy was also prepared after The Bank established performance appraisals using considering various factors including, short-term and the Key Performance Indicators (KPI) approach. The KPI long-term liquidity requirements, capital adequacy were prepared based on Bank’s performance targets, and strength, financial stability, effectiveness in risk related unit performance targets, and individual management, as well as potential future revenue. performance targets, in line with the Bank’s goals and strategies and considered risk and compliance The Bank did not use external consultants to prepare aspects. The Bank conducted periodic evaluations and its remuneration policy. However, to maintain assessments of performance achievements, and these competitiveness, the Bank performed benchmarking were taken into consideration when determining the through independent party surveys. remuneration. The Bank also implemented risk-based remuneration with the establishment of Material RISK-BASED REMUNERATION POLICY Risk Takers (MRT) and also implemented a deferred Improvements to the remuneration strategy payment scheme. involved reviewing remuneration policies based on performance, risk, and empowerment, and CIMB REMUNERATION POLICY IMPLEMENTATION Niaga’s policies and procedures for implementing its ASSESSMENT AND INDEPENDENCE benefit programs, as part of the remuneration strategy, CIMB Niaga reviews the employees’ remuneration and took into account the risk profile. The main risks type benefits system periodically and continuously, taking in the remuneration policy were adjusted in line with into account the following aspects: the annual Bank’s risk profile assessment results, 1. Bank’s financial performance and condition after looking into the market conditions, industry 2. Employee’s competency and performance developments, performance and financial capabilities (meritocracy)

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Remuneration Policy

3. Remuneration practices that apply in the market into account POJK No. 45/POJK.03/2015 and SEOJK (market competitiveness) No. 40/SEOJK.03/2016 concerning the Implementation 4. Principles of eligibility and appropriateness in of Governance when Providing Remuneration in accordance with position Commercial Banks. 5. Internal equality 6. Risk level attached to the position DETERMINATION OF MATERIAL RISK TAKER 7. Bank’s long-term strategy Determination of Material Risk Taker (MRT) is categorized as follows: CIMB Niaga is committed to implementing a 1. The MRT is determined by using qualitative remuneration system that is dynamic, responsive, methods in accordance with the portion of competitive, fair and balanced, and risk-based, as responsibilities that affects the main risk profile as well as based on applicable laws and regulations. determined based in the Bank’s annual risk profile To ensure the independence of remuneration for all evaluation. employees, including employees in the control unit, 2. The MRT is also determined quantitatively through the Bank ensures that performance evaluations and a comparison of variable remuneration between remuneration determination are conducted through MRT and non-MRT employees after considering supervision and review up to the Nomination and the performance and risk level for the position Remuneration Committee. concerned.

The Bank periodically reviews and communicates its The parties determined as MRT include all members Wages and Wage Scale Structure in accordance with of the Board of Directors and/or employees who meet the Minister of Manpower Regulation No. 1 Year 2017 the definitions, and currently the Bank has 15 (fifteen) concerning Wages Structure and Scale. In addition, the individuals classified as MRT. Bank implemented remuneration policies by taking

BOARD OF COMMISSIONERS’ REMUNERATION

Procedure for Determining the Board of Commissioners’ Remuneration

Remuneration Board of GMS of Board of Commissioners Commissioners

GMS decided

Board of Commissioners Implemented Proposed to GMS by the Board of Directors

Nomination & Remuneration Committee

The Nomination and Remuneration Committee submit recommendations and proposals to the Board of Commissioners

The Bank prepares the structure, policies, and amount of remuneration for each member of the Board of Commissioners after taking into account their duties, authorities, performance, and responsibilities. In addition, the Bank also considers the remuneration applicable in the banking industry (peers group) and the Bank’s capabilities.

480 Annual Report 2018 PT Bank CIMB Niaga Tbk Supporting Corporate Governance Corporate Social Others Consolidated Business Review Report Responsibility Corporate Data Financial Report

The procedures to determine the remuneration for 2. The Committee provides recommendations for Board of Commissioners are as follows: further discussion at the Board of Commissioners’ 1. The Nomination and Remuneration Committee meeting; conducts discussions regarding the Board of 3. The Board of Commissioners studies the Commissioners’ remuneration after taking recommendation from the Nomination & into account information on the range and Remuneration Committee and proposes to the remuneration standards with similar industries General Meeting of Shareholders (GMS); and (peers group) and the Bank’s capabilities; 4. The GMS determines the remuneration for the Board of Commissioners, to be further implemented by the Board of Directors.

BOARD OF COMMISSIONERS’ REMUNERATION STRUCTURE The remuneration structure for Board of Commissioners consists of an honorarium, meeting allowances, transportation allowances, feast day allowances, year-end benefits, as well as other facilities such as medical, communication, and club membership. Based on the decision at the 2018 AGM, detailed information for members of CIMB Niaga’s Board of Commissioners’ remuneration and other facilities is as follows:

1. Remuneration Packages and Other Facilities Received

Amount Received in 1 Year by Non- Independent Commissioners

Type of Remuneration and Other Facilities 2018 2017

Rp Rp Person Person (million) (million)

Remuneration (salary, routine allowance, tantiem, and other non-natura facilities) 4* 7,021 4** 6,847

Other natura facilities (housing, transportation, health insurance, etc), which:

a. Could be owned - - - -

b. Could not be owned - - - -

Total 4* 7,021 4** 6,847

Amount Received in 1 Year by Independent Commissioners

Type of Remuneration and Other Facilities 2018 2017

Rp Rp Person Person (million) (million)

Remuneration (salary, routine allowances, tantiem, and other non-natura facilities) 4 9,308 4 8,938

Other natura facilities (housing, transportation, health insurance, etc), which:

a. Could be owned - - - -

b. Could not be owned - - - -

Total 4 9,308 4 8,938

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Total Non- Total Independent Independent Commissioners Remuneration Per Person Commissioners

2018 2017 2018 2017

Above Rp5 billion - - - -

Above Rp2 billion up to Rp5 billion 1 1 4 4

Above Rp1 billion up to Rp2 billion 3 3 - -

Above Rp500 million up to Rp1 billion - - - -

Below Rp500 million - - - -

*Including the remuneration of Commissioners who resigned in 2018 **Including the remuneration of members of the Board of Commissioners whose term of office has ended in the EGM on 24 August 2017

2. Variable Remuneration for the Board of Commissioners

Amount Received in 1 Year by Non- Amount Received in 1 Year by Independent Independent Commissioners Commissioners

Variable Remuneration 2018 2017 2018 2017

Rp Rp Rp Rp Person Person Person Person (million) (million) (million) (million)

Total Nil Nil Nil Nil Nil Nil Nil Nil

All members of the Board of Commissioners (including Independent Commissioners) of CIMB Niaga did not receive any shares or bonuses.

BOARD OF DIRECTORS’ REMUNERATION

Procedure for Determining the Board of Directors’ Remuneration

Board of Commissioners propose to the GMS

2 5 Remuneration of Board of GMS Board of Directors Commissioners 3

1 4 GMS authorised the Board of Commissioners with regard to the recommendation of the Nomination & Remuneration Committee

Nomination & Remuneration Committee

The Nomination and Remuneration Committee submit recommendations and proposals to the Board of Commissioners

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The Bank prepares the structure, policies, and amount 3. The Board of Commissioners studies the of remuneration for each member of the Board of recommendation from the Nomination and Directors after taking into account their duties, authorities, Remuneration Committee and proposes to the performance, and responsibilities. In addition, the Bank General Meeting of the Shareholders (GMS). also considers the remuneration applicable in the banking 4. The GMS determines the remuneration for the industry (peers group), Bank’s performance, individual Board of Directors by granting authority to the performance of each Board of Directors member, as well Board of Commissioners to determine the Board of as the Bank’s capabilities. Directors’ remuneration after taking into account the Nomination and Remuneration Committee The procedures to determine the remuneration for the recommendations, for implementation by the Board of Directors are as follows: Board of Directors. 1. The Nomination and Remuneration Committee conducts discussions regarding the Board of Directors’ INDICATORS TO DETERMINE THE BOARD OF remuneration after taking into account information DIRECTORS’ REMUNERATION on the range and remuneration standards with Indicators for determining the Board of Directors’ similar industries (peers group), Bank’s performance, remuneration are based on Bank’s performance, which performance and risk level for each Director against the includes financial performance, Bank’s soundness level and determined KPI achievement, and the Bank’s capabilities; appropriate risk governance in accordance with regulations. 2. The Committee then provides recommendations for The remuneration is also determined by considering further discussion at the Board of Commissioners’ national economic conditions. The performance indicators meeting. are described in detail in the Board of Commissioners and the Board of Directors Performance Assessment section in this Annual Report.

THE BOARD OF DIRECTORS’ REMUNERATION STRUCTURE The remuneration structure for Board of Directors consists of salaries, bonuses, transportation allowances, housing benefits, feast day allowances, year-end benefits and other facilities such as medical, communication and club membership. Based on the decision at the 2018 AGM, detailed information for members of CIMB Niaga’s Board of Directors’ remuneration and other facilities is as follows:

1. Remuneration Package and Other Facilities Received Amount Received in 1 Year by the Board of Directors Type of Remuneration and Other Facilities 2018 2017 Rp Rp Person Person (million) (million) Remuneration (salary, routine allowances, tantiem, and other non-natura facilities) 11 88,513 11 66,183 Other natura facilities (housing, transportation, health insurance, etc), which: a. Could be owned - - - - b. Could not be owned - - - - Total 11 88,513 11 66,183

Total members of the Board of Directors Remuneration Per Person 2018 2017 Above Rp5 billion 9 9 Above Rp2 billion up to Rp5 billion 2 2 Above Rp1 billion up to Rp2 billion - - Above Rp500 million up to Rp1 billion - - Below Rp500 million - -

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Remuneration Policy

2. Variable Remuneration for the Board of Directors

Amount Received in 1 Year by the Board of Directors

Variable Remuneration 2018 2017

Person Rp (million) Person Rp (million)

Total 11 60,358 11 54,266

SHARIA SUPERVISORY BOARD’S REMUNERATION

Procedure for Determining the Sharia Supervisory Board Remuneration

Remuneration of Board of GMS Sharia Supervisory Commissioners Board

GMS decides

Board of Commissioners Board of Directors propose to GMS implement accordingly

Nomination & Remuneration Committee

The Nomination and Remuneration Committee submit recommendations and proposals to Board of Commissioners

The Bank prepares the structure, policies, and amount 2. The Committee provides recommendations for of remuneration for each member of the Sharia further discussion at the Board of Commissioners’ Supervisory Board by taking into account the duties, Meeting; authorities, performance, and responsibilities. In 3. The Board of Commissioners studies the addition, the Bank also considers the remuneration recommendation from the Nomination & applicable in the banking industry (peers group) and Remuneration Committee and proposes the to the the Bank’s capabilities. General Meeting of Shareholders (GMS); and 4. The GMS determines the remuneration for The procedures to determine the remuneration for the Sharia Supervisory Board, to be further Sharia Supervisory Board are as follows: implemented by the Board of Directors 1. The Nomination and Remuneration Committee conducts discussions regarding the Sharia Supervisory Board’s remuneration after taking into account information on the range and remuneration standards with similar industries (peers group) and the Bank’s capabilities;

484 Annual Report 2018 PT Bank CIMB Niaga Tbk Supporting Corporate Governance Corporate Social Others Consolidated Business Review Report Responsibility Corporate Data Financial Report

SHARIA SUPERVISORY BOARD’S REMUNERATION STRUCTURE The remuneration structure for Board of Commissioners consists of an honorarium, meeting allowances, transportation allowances, feast day allowances, year-end benefits. Based on the decision at the 2018 AGM, detailed information for members of CIMB Niaga’s Sharia Supervisory Board’s remuneration and other facilities is as follows:

1. Remuneration Packages and Other Facilities Received

Amount Received in 1 Year by the Sharia Supervisory Board

Type of Remuneration and Other Facilities 2018 2017

Person Rp (million) Person Rp (million)

Remuneration (salary, routine allowances, tantiem, and other 3 1,603 3 1,603 non-natura facilities)

Other natura facilities (housing, transportations, health insurance, etc), which:

a. Could be owned

b. Could not be owned

Total 3 1,603 3 1,603

Total Members of Sharia Supervisory Board Remuneration Per Person 2018 2017

Above Rp5 billion - -

Above Rp2 billion up to Rp5 billion - -

Above Rp1 billion up to Rp2 billion - -

Above Rp500 million up to Rp1 billion 1 1

Below Rp500 million 2 2

2. Variable Remuneration for the Sharia Supervisory Board

Amount Received in 1 Year by the Sharia Supervisory Board

Variable Remuneration 2018 2017

Person Rp (million) Person Rp (million)

Total Nil Nil Nil Nil

All members of the Sharia Supervisory Board of CIMB Niaga did not receive any shares or bonuses.

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Remuneration Policy

SHARE OWNERSHIP PROGRAM FOR EMPLOYEES AND MANAGEMENT In 2018, CIMB Niaga launched a share ownership program for employees and/or management.

2018 2017

Number Option Amount Number Option Amount Option Option Price Remarks of Shares of Shares Price Rp Rp (time Owned Name Given Executed Owned Name Given Executed (time period) (shares) (shares) (shares) (shares) (shares) (shares) period)

Board of Directors - 77,000,000 - 1,391 (3 years) Nil Nil Nil Nil

Board of - - - - Nil Nil Nil Nil Commissioners

Executive Officers - 40,651,000 - 1,391 (3 years) Nil Nil Nil Nil

Total - 117,651,000 - 1,391 (3 years) Nil Nil Nil Nil

Highest and Lowest Salary Ratio

Ratio 2018 2017 The highest and lowest ratio of employees’ salary 121.15 : 1 112.31 : 1

The highest and lowest ratio of the Board of Directors’ salary 4.37 : 1 4.28 : 1

The highest and lowest ratio of the Board of Commissioners’ salary 1.50 : 1 1.50 : 1

The ratio of the highest Board of Directors’ salary and the highest em- 3.95 : 1 3.80 : 1 ployees’ salary

Variable Remuneration for Employees

Amount Received in 1 year by Employees

Variable Remuneration 2018 2017

Person Rp (million) Person Rp (million)

Total 8,900 294,492 9,489 266,776

Fixed and Variable Remuneration for Parties Categorized as Material Risk Takers (MRT)

A. Fixed Remuneration 2018 2017

1. Cash 95,099,630,277 Nil

2. Shares/Stock-based instruments issued by the Bank Nil Nil

2018 2017 B. Variable Remuneration Non-deferred Deferred Non-deferred Deferred

1. Cash 59,009,921,000 6,742,915,000 Nil Nil

2. Shares/Stock-based instruments issued by the Bank 0 28,931,906,000 Nil Nil

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Quantitative Information for Parties Categorized as MRT

2018 2017

Total Reduction During the Report Period Total Reduction During the Report Period Variable Remuneration Remaining Due to Due to Remaining Due to Due to Deferred Explicit Implicit Total Deferred Explicit Implicit Total Adjustment Adjustment (A+B) Adjustment Adjustment (A+B) (A) (B) (A) (B)

1. Cash 6,742,915,000 0 0 0 Nil Nil Nil Nil

2. Shares/ 3,644,522 0 0 0 Nil Nil Nil Nil Stock-based shares instruments (28,931,906,000 issued by the rupiah) Bank (in shares and nominal million rupiah which is a conversion from the shares)

Total 35,674,821,000 0 0 0 Nil Nil Nil Nil rupiah

Total Severance Granted to Employees Affected by Termination and Total Amount Paid

Number of Employees Severance pay amount paid per person in 1 (one) year 2018 2017

Above Rp1 billion 6 0

Above Rp500 million up to Rp1 billion 10 1

Below Rp500 million 366 299

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Board of Commissioners, Board of Directors & Board of Commissioners with Board of Directors Joint Meetings

Board of Commissioners Meetings & Board of 8. Meeting resolutions shall be based on deliberation Commissioners Inviting Board of Directors Meetings to reach a consensus. In the event consensus is 1. The Board of Commissioners shall prepare not reached, the decision shall be made based on schedules for the Board of Commissioners more than 2/3 (two-thirds) of the total number of Meetings, and the Board of Commissioners inviting Board of Commissioners members present voting Board of Directors Meetings, for the following fiscal in favour. year prior to the end of the current fiscal year and 9. Minutes of the Board of Commissioners Meetings upload it to the Bank’s website. shall disclose the attendance of each Board of 2. Board of Commissioners Meetings must be Commissioners member, either physically or held periodically at least once every 2 (two) via teleconference/telepresence. Attendance via months or at any time deemed necessary. Board teleconference/telepresence shall be accompanied of Commissioners inviting Board of Directors by an audio/visual recording of the Meeting. Meetings must be held at least once every 4 (four) 10. The Board of Commissioners meeting minutes shall months. be signed by all Board of Commissioners members 3. Meetings may be held by face to face or by using in attendance at the meeting and shall be delivered teleconference technology (participants listening to all members of the Board of Commissioners. and seeing each other during Meetings). 11. The Board of Commissioners inviting the Board 4. At least twice a year, the Board of Commissioners of Directors meeting minutes shall be signed by Meetings must be physically attended by all Board all members of the Board of Commissioners and of Commissioners members. In the event that non- Board of Directors in attendance at the meeting Independent Commissioners are unable to attend and shall be delivered to all members of the Board the Meetings physically, they may attend the of Commissioners and Board of Directors as well as Meetings via teleconference or telepresence. the Corporate Secretary. 5. Each member of the Board of Commissioners must 12. The Board of Commissioners may also make attend at least 75% (seventy five percent) of the lawful decisions without convening a Board of Board of Commissioners Meetings in a year. Commissioners Meeting, provided that all serving 6. Invitations and materials for the Board of members of the Board of Commissioners give their Commissioners Meetings must be submitted to the approval by signing the proposed decision (Circular Meeting participants no later than 5 (five) working Decision). Such Circular Decisions shall have equal days before the Meeting is held. In the event of power as the validly adopted decisions in the Board an ad-hoc Board of Commissioners Meeting, the of Commissioner Meetings. meeting material shall be submitted to the Board 13. The Board of Commissioners Meetings, and the of Commissioners Meeting participants at the Board of Commissioners inviting the Board of latest before the meeting is held. Directors Meetings, for 2018 were scheduled at the 7. Meeting shall be valid and entitled to adopt end of 2017 and uploaded to the Bank’s website. binding resolutions if attended/represented by at Both schedules were approved in the Board of least 2/3 (two thirds) of the total number of Board of Commissioners Meeting on 19 December 2017. Commissioners members.

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Frequency and Attendance of Board of Commissioners Meetings in 2018

Board of Commissioners Board of Commissioners Inviting Meetings Board of Directors Meetings No. Name Attendance Attendance Attendance Attendance Rate Frequency Rate Frequency

1. Dato‘ Sri Nazir Razak*) 6/6 100% 3/3 100%

2. Glenn M.S. Yusuf 8/8 100% 4/4 100%

3. Zulkifli M. Ali 8/8 100% 4/4 100%

4. Pri Notowidigdo 8/8 100% 4/4 100%

5. Jeffrey Kairupan 8/8 100% 4/4 100%

6. David Richard Thomas 8/8 100% 3/4 75%

7. Tengku Dato’ Sri Zafrul Tengku Abdul Aziz**) 7/8 87,5% 3/4 75%

8. Armida Salsiah Alisjahbana***) 7/8 87,5% 4/4 100%

Agenda for Board of Commissioners Meetings in 2018 The regular agenda to be discussed during the Board of Commissioners meetings every year was as follows: 1. Ratification of the previous Board of Commissioners Meeting Minutes; 2. Discussion on matters arising from the previous Board of Commissioners Meeting; 3. Summary of the previous month’s credit proposals; 4. Financial Performance Report; and 5. Reports from the Committees under the Board of Commissioners, namely the Audit Committee, Risk Oversight Committee, and Nomination and Remuneration Committee.

In addition to the regular agenda mentioned above, the following agenda was also discussed:

No. Date Agenda Meeting Participants

1. 27 February 2018 Approval & Update (Information): 1. Dato’ Sri Nazir Razak 1. Proposal for Issuance of Subordinated Bonds 2. Glenn M. S. Yusuf 2. 4Q 2017 Asset Quality Update 3. Zulkifli M. Ali 3. Risk Appetite Statement as of December 2017 4. Pri Notowidigdo 4. Annual General Meeting of Shareholders (AGM) 5. Jeffrey Kairupan 6. Armida S. Alisjahbana 7. David R. Thomas 8. Tengku Dato’ Sri Zafrul bin Tengku Abdul Aziz

2. 27 March 2018 Approval & Update (Information): 1. Dato’ Sri Nazir Razak 1. Update regarding CIMB Niaga Pension Fund 2. Glenn M. S. Yusuf 2. Cakrawala Mitra Usaha (CMU) Update 3. Zulkifli M. Ali 3. Digital Banking Update 4. Pri Notowidigdo 4. Risk Appetite Statement as of February 2017 5. Jeffrey Kairupan 6. Armida S. Alisjahbana Others: 7. David R. Thomas 1. Candidates of Independent Commissioner of PT CIMB Niaga 8. Tengku Dato’ Sri Zafrul bin Sekuritas Tengku Abdul Aziz 2. BoC Sub Committee Members

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Board of Commissioners, Board of Directors & Board of Commissioners with Board of Directors Joint Meetings

No. Date Agenda Meeting Participants

3. 25 May 2018 Approval and Update (Information): 1. Dato’ Sri Nazir Razak 1. Revised of 2018 Bank Business Plan (1st Draft) 2. Glenn M. S. Yusuf 2. New Data Center Vendor 3. Zulkifli M. Ali 3. Risk Appetite Statement (RAS) as of April 2018 4. Pri Notowidigdo 5. Jeffrey Kairupan 6. Armida S. Alisjahbana 7. David R. Thomas

4. 20 July 2018 Approval and Update (Information): 1. Dato’ Sri Nazir Razak 1. Risk Appetite Statement as of June 2018 2. Glenn M. S. Yusuf 2. Scenario Analysis on Indonesia’s Worsening Macroeconomic 3. Zulkifli M. Ali Condition 4. Pri Notowidigdo 3. Update on Asset Quality as of 1H/2018 5. Jeffrey Kairupan 4. Realization of Bank Business Plan and Supervisory Report on 6. Armida S. Alisjahbana Bank Business Plan as of 1H/2018 7. David R. Thomas 5. Internal Audit Update as of 1H/2018 8. Tengku Dato’ Sri Zafrul bin Tengku Abdul Aziz

5. 7 September 2018 Approval and Update (Information): 1. Dato’ Sri Nazir Razak 1. Risk Appetite Statement as of July 2018 2. Glenn M. S. Yusuf 2. 2019 Risk Posture 3. Zulkifli M. Ali 3. Update on Development Status of T18, BT18 and 4. Pri Notowidigdo Transformation 2023 5. Jeffrey Kairupan 4. Framework of Board of Commissioners Approval 6. Armida S. Alisjahbana 7. David R. Thomas 8. Tengku Dato’ Sri Zafrul bin Tengku Abdul Aziz

6. 28 September 2018 Approval and Update (Information): 1. Dato’ Sri Nazir Razak 1. Risk Appetite Statement as of August 2018 2. Glenn M. S. Yusuf 2. Update on CNAF 3. Zulkifli M. Ali 4. Pri Notowidigdo 5. Jeffrey Kairupan 6. Armida S. Alisjahbana 7. David R. Thomas 8. Tengku Dato’ Sri Zafrul bin Tengku Abdul Aziz

7. 26 October 2018 Approval and Update (Information): 1. Glenn M. S. Yusuf 1. Bank Business Plan 3Q/2018 2. Zulkifli M. Ali 2. 2019 Budget 1st Draft (for information) 3. Pri Notowidigdo 3. Recovery Plan Update 4. Jeffrey Kairupan 4. Risk Appetite Statement as of September 2018 5. Armida S. Alisjahbana 6. David R. Thomas Others: 7. Tengku Dato’ Sri Zafrul bin 1. Update on EGM Tengku Abdul Aziz

8. 21 November 2018 Approval and Update (Information): 1. Glenn M. S. Yusuf 1. Bank Business Plan 2019 (Approval) 2. Zulkifli M. Ali 2. Sustainable Finance Action Plan 3. Pri Notowidigdo 3. Asset Quality & NPL Sales Update 4. Jeffrey Kairupan 4. Risk Appetite Statement as of October 2018 5. David R. Thomas 6. Tengku Dato’ Sri Zafrul bin Tengku Abdul Aziz

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Agenda of Board of Commissioners Inviting Board of Directors Meetings in 2018

No. Date of Meetings Participants from BOC Participants from BOD Agenda

1. 1 February 2018 1. Dato’ Sri Nazir Razak 1. Tigor Siahaan 1. Message from the President 2. Glenn M. S. Yusuf 2. Wan Razly Abdullah Commissioner 3. Zulkifli M. Ali 3. Rita Mas’Oen 2. Approval and Update 4. Pri Notowidigdo 4. Megawati Sutanto (Information): 5. Jeffrey Kairupan 5. Vera Handajani a. Realization and Supervision 6. Armida S. Alisjahbana 6. John Simon Reports on Bank Business 7. David R. Thomas 7. Lani Darmawan Plan as of 2H/2018 8. Fransiska Oei b. Risk Appetite Statement as of 9. Hedy Lapian December 2017 10. Pandji Djajanegara 3. Others: 11. Rahardja Alimhamzah a. Dividend Payment 2018

2. 24 April 2018 1. Dato’ Sri Nazir Razak 1. Tigor Siahaan 1. Message from the President 2. Glenn M. S. Yusuf 2. Wan Razly Abdullah Commissioner 3. Zulkifli M. Ali 3. Rita Mas’Oen 2. Approval and Update 4. Pri Notowidigdo 4. Megawati Sutanto (Information): 5. Jeffrey Kairupan 5. Vera Handajani a. Report of Bank Business Plan 6. Armida S. Alisjahbana 6. John Simon Realization 1Q/2018 7. David R. Thomas 7. Lani Darmawan b. Internal Audit Update as of 8. Tengku Dato’ Sri Zafrul bin 8. Fransiska Oei 1Q/2018 Tengku Abdul Aziz 9. Hedy Lapian c. Basel Project Achievement, 10. Pandji Djajanegara Challenges and Action Plan 11. Rahardja Alimhamzah Update d. Risk Appetite Statement as of March 2018 e. HR Update (Learning on the Go & HR BOT)

3. 3 July 2018 1. Dato’ Sri Nazir Razak 1. Tigor Siahaan 1. Message from the President 2. Glenn M. S. Yusuf 2. Rita Mas’Oen Commissioner 3. Zulkifli M. Ali 3. Megawati Sutanto 2. Approval and Update 4. Pri Notowidigdo 4. Vera Handajani (Information): 5. Jeffrey Kairupan 5. John Simon a. Risk Appetite Statement as of 6. Armida S. Alisjahbana 6. Lani Darmawan May 2018 7. David R. Thomas 7. Fransiska Oei 8. Tengku Dato’ Sri Zafrul bin 8. Hedy Lapian Tengku Abdul Aziz 9. Pandji Djajanegara 10. Rahardja Alimhamzah

4. 19 December 2018 1. Glenn M. S. Yusuf 1. Tigor Siahaan 1. Message from the President 2. Zulkifli M. Ali 2. Wan Razly Abdullah Commissioner 3. Pri Notowidigdo 3. Rita Mas’Oen 2. Approval and Update 4. Jeffrey Kairupan 4. Megawati Sutanto (Information): 5. Armida S. Alisjahbana 5. Vera Handajani a. 2019 budget 6. David R. Thomas 6. Fransiska Oei b. Approval of CIMB Niaga 7. Tengku Dato’ Sri Zafrul bin 7. Hedy Lapian Venture Capital Establishment Tengku Abdul Aziz 8. Pandji Djajanegara c. SME Update 9. Rahardja Alimhamzah d. Risk Appetite Statement as of November 2018 e. Risk Event Escalation 3. Others: a. Board of Commissioners Work Plan & Supervision Focus in 2019

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Board of Commissioners, Board of Directors & Board of Commissioners with Board of Directors Joint Meetings

Board of Directors Meetings & Board of Directors 7. Minutes of the Board of Directors Meetings shall Inviting Board of Commissioners Meetings disclose the attendance of each Board of Directors 1. The Board of Directors shall prepare schedules for member, either physically or via teleconference/ the Board of Directors Meetings, and the Board telepresence. Attendance via teleconference/ of Directors inviting Board of Commissioners telepresence shall be accompanied by an audio/ Meetings, for the following fiscal year prior to the visual recording of the Meeting. end of the current fiscal year and upload it to the 8. The Board of Directors meeting minutes shall Bank’s website. be signed by all Board of Directors members in 2. Board of Directors Meetings must be held attendance at the meeting and shall be delivered periodically at least once every month or at any to all members of the Board of Directors. time deemed necessary, or in total at least 12 9. The Board of Directors inviting the Board of (twelve) times a year. Board of Directors inviting Commissioners meeting minutes shall be signed Board of Commissioners Meetings must be held at by all members of the Board of Directors and Board least once every 4 (four) months or at least 3 (three) of Commissioners in attendance at the meeting times a year. and shall be delivered to all members of the Board 3. Members of the Board of Directors must attend at of Directors and Board of Commissioners as well as least 75% (seventy-five percent) meetings in a year the Corporate Secretary. and must attend physically. 10. The Board of Directors may also make lawful 4. Board of Directors’ Meetings shall be valid and decisions without convening a Board of Directors entitled to adopt binding resolutions if attended/ Meeting, provided that all serving members of the represented by at least 2/3 (two thirds) of the total Board of Directors give their approval by signing number of Board of Directors members. the proposed decision (Circular Decision). Such 5. Resolutions at the Board of Directors Meetings shall Circular Decisions shall have equal power as the be based on deliberation to reach a consensus. In validly adopted decisions in the Board of Directors the event consensus is not reached, the decision Meetings. shall be made based on more than 2/3 (two-thirds) 11. The Board of Directors Meetings, and the Board of the total number of Board of Directors members of Directors inviting the Board of Commissioners present voting in favour. Meetings, for 2018 were scheduled at the end of 6. Board of Directors Meetings may be held physically 2017 and uploaded to the Bank’s website. Both or by using teleconference, telepresence, video schedules were approved in the Board of Directors conference or through other electronic media. Meeting on 19 December 2017.

492 Annual Report 2018 PT Bank CIMB Niaga Tbk Supporting Corporate Governance Corporate Social Others Consolidated Business Review Report Responsibility Corporate Data Financial Report

Frequency and Attendance of Board of Directors Meetings in 2018

Board of Directors Inviting Board of Directors Meetings Board of Commissioners No. Name Meetings Attendance Attendance Attendance Attendance Frequency Rate Frequency Rate

1. Tigor M. Siahaan 35/37 95% 4/4 100%

2. Rita Mas’Oen 35/37 95% 4/4 100%

3. Megawati Sutanto 36/37 97% 4/4 100%

4. Vera Handajani 35/37 95% 4/4 100%

5. John Simon 34/37 92% 3/4 75%

6. Lani Darmawan 31/37 84% 3/4 75%

7. Pandji P. Djajanegara 36/37 97% 4/4 100%

8. Hedy Lapian 33/37 89% 4/4 100%

9. Fransiska Oei 35/37 95% 4/4 100%

10. Rahardja Alimhamzah 34/37 92% 4/4 100%

11. Wan Razly Abdullah*) 34/37 92% 3/4 75%

*) Resigned as a Director effective on 1 January 2019

Agenda for Board of Directors Meetings in 2018 The Board of Directors Meetings were held in the Kalimantan Meeting Room, Graha CIMB Niaga 14th floor, Jl. Jend. Sudirman Kav. 58, Jakarta with the meeting agenda as follows:

No Date of Meetings Meetings Participants Agenda 1 9 January 2018 1. Tigor M. Siahaan 1. Consolidated Financial Performance as of December 2017 2. Wan Razly Abdullah 2. Others

3. Rita Mas’Oen 4. Megawati Sutanto

5. Vera Handajani 6. John Simon 7. Hedy Lapian 8. Pandji P. Djajanegara 2 16 January 2018 1. Tigor M. Siahaan 1. Confirmation of Board of Directors Minutes of Meeting dated 19 December 2017 2. Wan Razly Abdullah 2. Bond & NCD Issuance Proposal: Rp Shelf Registraton Bond (PUB) II 3. Rita Mas’Oen Phase IV 2018 & IDR NCD Phase IV 2018 4. Megawati Sutanto 3. Belitung Initiatives 5. Vera Handajani 4. Bank Business Plan (RBB) 2018 and Realization of RBB Revision 4Q/2017 6. John Simon 5. CIMB Niaga Recovery Plan 6. Internal Audit CIMB Niaga 4Q/2017 Performance Review 7. Lani Darmawan 7. Risk Profile Q4/2017 & Risk Based Bank Rating H2/2017 Bank Only, 8. Fransiska Oei Consolidated & Sharia Business Unit 9. Hedy Lapian 8. Sharia Banking: Continuing to Race for Achieving Our Strategic Ambition 10. Pandji P. Djajanegara 9. Others 11. Rahardja Alimhamzah

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Board of Commissioners, Board of Directors & Board of Commissioners with Board of Directors Joint Meetings

No Date of Meetings Meetings Participants Agenda 3 23 January 2018 1. Tigor M. Siahaan 1. Year End Findings 31 December 2017 2. Wan Razly Abdullah 2. Tax Update

3. Rita Mas’Oen

4. Megawati Sutanto

5. Vera Handajani

6. John Simon

7. Lani Darmawan 8. Fransiska Oei 9. Hedy Lapian 10. Pandji P. Djajanegara 11. Rahardja Alimhamzah 4 30 January 2018 1. Tigor M. Siahaan 1. Confirmation of Board of Directors Minutes of Meetings dated 9 and 16 January 2018 2. Wan Razly Abdullah 2. Loss Event Data (LED) Escalation Protocol 3. Rita Mas’Oen 3. 2017 Performance Distribution 4. Megawati Sutanto 4. KAP Enhancement Project 5. Vera Handajani 5. Others 6. Lani Darmawan

7. Fransiska Oei

8. Hedy Lapian 9. Pandji P. Djajanegara 10. Rahardja Alimhamzah 5 6 February 2018 1. Tigor M. Siahaan 1. Confirmation of Board of Directors Minutes of Meeting dated 23 January 2018 2. Wan Razly Abdullah 2. December 2017 Stress Test Scenario 3. Rita Mas’Oen 3. Integrated Risk Profile CIMB Indonesia as of December 2017 4. Megawati Sutanto 4. Integrated Capital Adequacy Assessment of CIMB Indonesia as of 5. Vera Handajani December 2017 6. John Simon 5. Consolidated Financial Performance 6. Others 7. Lani Darmawan 8. Fransiska Oei 9. Pandji P. Djajanegara 10. Rahardja Alimhamzah 6 13 February 2018 1. Tigor M. Siahaan 1. Proposal for Appointment of Tax 2. Wan Razly Abdullah 2. Others

3. Megawati Sutanto 4. Rita Mas’Oen

5. Vera Handajani 6. John Simon

7. Lani Darmawan

8. Fransiska Oei 9. Hedy Lapian 10. Pandji P. Djajanegara 11. Rahardja Alimhamzah

494 Annual Report 2018 PT Bank CIMB Niaga Tbk Supporting Corporate Governance Corporate Social Others Consolidated Business Review Report Responsibility Corporate Data Financial Report

No Date of Meetings Meetings Participants Agenda 7 20 February 2018 1. Tigor M. Siahaan 1. Confirmation of Board of Directors Minutes of Meeting dated 30 January 2018 and Board of Directors Inviting Board of Commissioners 2. Megawati Sutanto Meeting dated 1 February 2018. 3. Rita Mas’Oen 2. Annual General Meeting of Shareholders 4. Vera Handajani 3. Subdebt Issuance Proposal 5. John Simon 4. Approval on External Auditor 6. Lani Darmawan 5. JV Book Treasury With Corporate & Commercial Banking 6. CIMB Niaga December 2017 Stress Test Scenario & Risk Appetite 7. Fransiska Oei Statement - Monitoring Dashboard 8. Hedy Lapian 7. Lease of Gunung Geulis 2018- 2023 9. Rahardja Alimhamzah 8. Internal Audit Update 10. Pandji Djajanegara 9. Making Blockchain Real for Banking in Indonesia 10. Others 8 7 March 2018 1. Tigor M. Siahaan 1. Confirmation of Board of Directors Minutes of Meetings dated 6, 13, and 20 February 2018. 2. Wan Razly Abdullah 2. Non-Customer Operational Matters at the Branches 3. Megawati Sutanto 3. T18 - 2018 4. Dividend Policy & Dividend Payment 2018 4. Rita Mas’Oen 5. Finance Update 5. Vera Handajani A. Consolidated Financial Performance as of February 18 B. KSEI Payment 6. John Simon C. Tax Update 7. Lani Darmawan D. IFRS 9 – How it Changes Our Financials E. BI & OJK Penalty Allocation 8. Fransiska Oei 6. Rodan - Geps Implementation 9. Hedy Lapian 7. Others 10. Pandji P. Djajanegara 11. Rahardja Alimhamzah 9 21 March 2018 1. Tigor M. Siahaan 1. Confirmation of Board of Directors Minutes of Meeting 7 March 2018. 2. Wan Razly Abdullah 2. Approval on CIMB Niaga Sekuritas Logo 3. Update and Approval on External Auditor Fees For FY2018 3. Rita Mas’Oen 4. Pension Fund CIMB Niaga 4. Vera Handajani 5. Subordinated Bonds Issuance Proposal 5. John Simon 6. February 2018 Internal Audit Summary 6. Lani Darmawan 7. CIF vs Product Based Segmentation 7. Fransiska Oei 8. E-KTP Reader Update 8. Hedy Lapian 9. 2018 Risk Appetite Statement 9. Pandji P. Djajanegara 10. Others 10. Rahardja Alimhamzah 10 4 April 2018 1. Tigor M.Siahaan 1. Confirmation of Board of Directors Minutes of Meeting dated 21 March 2018. 2. Wan Razly Abdullah 2. Belitung Initiatives Project Progress Update 3. Megawati Sutanto 3. Beyond 2018 Engagement Plan 4. John Simon 4. Equinox Steering Committee Results 5. Lani Darmawan 5. Consolidated Financial Performance 6. Fransiska Oei 6. HR Digitalization Update 7. Hedy Lapian 7. Others

8. Pandji P. Djajanegara 9. Rahardja Alimhamzah

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Board of Commissioners, Board of Directors & Board of Commissioners with Board of Directors Joint Meetings

No Date of Meetings Meetings Participants Agenda 11 10 April 2018 1. Tigor M.Siahaan 1. Proposal on Sharia Capital Injection for 2018 2. Wan Razly Abdullah 2. Others

3. Megawati Sutanto 4. John Simon

5. Lani Darmawan 6. Fransiska Oei 7. Hedy Lapian 8. Pandji P. Djajanegara 9. Rahardja Alimhamzah 12 17 April 2018 1. Tigor M.Siahaan 1. Confirmation of Board of Directors Minutes of Meetings dated 4 and 10 April 2018 2. Wan Razly Abdullah 2. Information of Security Updates 3. Rita Mas’Oen 3. Internal Audit 1Q/2018 Performance Review 4. Megawati Sutanto 4. Risk Profile Q1/2018 Bank Only, Consolidated & Sharia Business Unit 5. Vera Handajani 5. Basel Project Updates: Achievement, Challenges and Action Plan 6. John Simon 6. Realization of Bank Business Plan 1Q/2018 7. Lani Darmawan 7. Approval on T18 In-Country Project Charter-2018 8. MSME Account Maintenance & Monitoring 8. Fransiska Oei 9. RLP Renewal Thru Portfolio Approach 9. Hedy Lapian 10. SME RLP IDR>10-15 Bio 10. Pandji P. Djajanegara 11. EXCO Performance in 1Q/2018 & EXCO Parameters 11. Rahardja Alimhamzah 12. Rules regarding Data Sharing 13. Board of Directors Collegial Self- Assessment 14. Revision of Delegated Authority 15. Strategic Procurement & Admin Property Management Update 13 2 May 2018 1. Tigor M.Siahaan 1. Confirmation of Board of Directors Minutes of Meeting dated 17 April 2018 2. Rita Mas’Oen 2. Equinox Project 3. Megawati Sutanto 3. ROM Updates 4. Vera Handajani 4. Approval regarding T18 In-country Project Charter - 2018 5. John Simon 5. Others 6. Lani Darmawan

7. Fransiska Oei 8. Pandji P. Djajanegara 9. Rahardja Alimhamzah 14 8 May 2018 1. Tigor M.Siahaan 1. Consolidated Financial Performance April 2018 2. Wan Razly Abdullah 2. Update regarding OJK Audit 2018 – Sharia Business Unit 3. Others 3. Rita Mas’Oen

4. Megawati Sutanto

5. Vera Handajani

6. John Simon

7. Lani Darmawan 8. Fransiska Oei 9. Pandji P. Djajanegara 10. Rahardja Alimhamzah

496 Annual Report 2018 PT Bank CIMB Niaga Tbk Supporting Corporate Governance Corporate Social Others Consolidated Business Review Report Responsibility Corporate Data Financial Report

No Date of Meetings Meetings Participants Agenda 15 16 May 2018 1. Tigor M.Siahaan 1. Confirmation of Board of Directors Inviting Board of Commissioners Minutes of Meeting dated 2 May 2018 2. Wan Razly Abdullah 2. 2018 Bank Business Plan Revision 3. Rita Mas’Oen 3. Group Internal Audit Report April 2018 4. Megawati Sutanto 4. Relaxation on DBR & Deviation Authority in Mortgage Underwriting 5. Vera Handajani 5. Payment Process & Update 6. John Simon 6. Others

7. Lani Darmawan 8. Fransiska Oei

9. Hedy Lapian 10. Pandji P. Djajanegara 11. Rahardja Alimhamzah 16 22 May 2018 1. Tigor M.Siahaan 1. Confirmation of Board of Directors Inviting Board of Commissioners Minutes of Meeting dated 8 May 2018 2. Wan Razly Abdullah 2. New Data Center Project Update 3. Rita Mas’Oen 3. Benchmarking Top 18 Banks as of March 2018 4. Megawati Sutanto 4. 2018 Bank Business Plan Revision 5. Vera Handajani 5. The Standard for Automatic Exchange of Information (AEoI) 6. John Simon 6. Others

7. Lani Darmawan 8. Fransiska Oei

9. Hedy Lapian 10. Pandji P. Djajanegara 11. Rahardja Alimhamzah 17 30 May 2018 1. Tigor M. Siahaan 1. Compliance, AML & Legal Update 2. Wan Razly Abdullah 2. Others

3. Rita Mas’Oen 4. Megawati Sutanto

5. John Simon 6. Vera Handajani 7. Fransiska Oei

8. Hedy Lapian 9. Pandji P. Djajanegara 10. Rahardja Alimhamzah 18 5 June 2018 1. Tigor M. Siahaan 1. Confirmation of Board of Directors Minutes of Meetings dated 16 and 22 May 2018 2. Wan Razly Abdullah 2. Readiness of CIMB Niaga during the Lebaran Holiday 1439 H 3. Rita Mas’Oen 3. Efficiency and Productivity Initiatives in Operations 4. Megawati Sutanto 4. Consolidated Financial Performance May 2018 5. John Simon 5. Others 6. Vera Handajani

7. Fransiska Oei

8. Hedy Lapian

9. Pandji P. Djajanegara 10. Rahardja Alimhamzah

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Board of Commissioners, Board of Directors & Board of Commissioners with Board of Directors Joint Meetings

No Date of Meetings Meetings Participants Agenda 19 26 June 2018 1. Tigor M. Siahaan 1. FX Review 2. Rita Mas’Oen 2. May 2018 Internal Audit Summary 3. Others 3. Megawati Sutanto

4. Vera Handajani

5. John Simon

6. Lani Darmawan 7. Fransiska Oei 8. Hedy Lapian 9. Pandji P. Djajanegara 10. Rahardja Alimhamzah 20 4 July 2018 1. Tigor M. Siahaan 1. Confirmation of Board of Directors Minutes of Meetings dated 5 and 26 June 2018 2. Wan Razly Abdullah 2. Employee Ownership Program 3. Rita Mas’Oen 3. Consolidated Financial Performance June 2018 4. Megawati Sutanto 4. Belitung Initiatives Update 5. Vera Handajani 5. Others 6. John Simon

7. Lani Darmawan

8. Fransiska Oei 9. Hedy Lapian 10. Pandji P. Djajanegara 11. Rahardja Alimhamzah 21 17 July 2018 1. Tigor M. Siahaan 1. Confirmation of Board of Directors Inviting Board of Commissioners Minutes of Meeting dated 3 July 2018 and Board of Directors Meeting 2. Wan Razly Abdullah dated 4 July 2018 3. Rita Mas’Oen 2. Approval regarding Establishment of Venture Capital Subsidiary 4. Megawati Sutanto 3. Bank Business Plan Realization 2Q/2018 5. Vera Handajani 4. 5 Year Aspirations 6. John Simon 5. Tax Update 6. Internal Audit 2Q/2018 Result Update 7. Lani Darmawan 7. Proposed NPL Sale Exercise 8. Fransiska Oei 8. Risk Profile 2Q/2018 & Risk Based Bank Rating 1H/2018 9. Hedy Lapian 9. Call Back Policy and SOP 10. Pandji P. Djajanegara 10. Community Link Program Update 11. Rahardja Alimhamzah 22 31 July 2018 1. Tigor M. Siahaan 1. Confirmation of Board of Directors Minutes of Meeting dated 17 July 2018. 2. Wan Razly Abdullah 2. Sustainable Finance Update 3. Rita Mas’Oen 3. Liquidity Management Update 4. Megawati Sutanto 4. The Color Run 2018 Update 5. Vera Handajani 5. Update regarding Employee Engagement Survey 6. John Simon 6. Others

7. Lani Darmawan 8. Fransiska Oei

9. Hedy Lapian 10. Pandji P. Djajanegara 11. Rahardja Alimhamzah

498 Annual Report 2018 PT Bank CIMB Niaga Tbk Supporting Corporate Governance Corporate Social Others Consolidated Business Review Report Responsibility Corporate Data Financial Report

No Date of Meetings Meetings Participants Agenda 23 7 August 2018 1. Tigor M. Siahaan 1. Information regarding Security Update 2. Wan Razly Abdullah 2. Update regarding Result of OJK Audit in 2018 3. 2018 Bank Business Plan Revision 3. Rita Mas’Oen 4. Senior Leaders Meeting 4. Megawati Sutanto 5. T23 Aspiration and Budget 5. Vera Handajani 6. Financial Performance July 2018 6. John Simon 7. SLIK Issue 7. Lani Darmawan 8. Sustainable Finance Action Plan 9. Others 8. Fransiska Oei

9. Hedy Lapian 10. Pandji P. Djajanegara 24 21 August 2018 1. Wan Razly Abdullah 1. Confirmation of Board of Directors Minutes of Meeting dated 7 August 2018 2. Rita Mas’Oen 2. National Customer Day 3. Megawati Sutanto 3. Establishment of Venture Capital Subsidiary 4. Vera Handajani 4. Proposed Tax Consultant 5. John Simon 5. Audit Findings 30 June 2018 6. Fransiska Oei 6. Others

7. Hedy Lapian 8. Pandji P. Djajanegara 9. Rahardja Alimhamzah 25 28 August 2018 1. Wan Razly Abdullah 1. T23 Budget and Aspiration 2. Rita Mas’Oen 2. Others

3. Megawati Sutanto 4. Vera Handajani

5. John Simon 6. Lani Darmawan

7. Fransiska Oei 8. Hedy Lapian 9. Pandji P. Djajanegara 10. Rahardja Alimhamzah 26 4 September 1. Tigor M. Siahaan 1. Confirmation of Board of Directors Minutes of Meetings dated 21 and 28 2018 August 2018 2. Wan Razly Abdullah 2. Beyond T18 Plan Updates 3. Rita Mas’Oen 3. Topic Related with T23 4. Megawati Sutanto 4. Consolidated Financial Performance August 2018 5. Vera Handajani 5. A. Entity Governance Policy 6. John Simon B. Proposed Vision & Mission for Sustainable Finance 7. Lani Darmawan 6. Auto Business Update 7. Employment Policy: Activities outside Company related to Political 8. Fransiska Oei Parties 9. Hedy Lapian 8. OPeRA 3D (Data, Digital, Disruption) 10. Pandji P. Djajanegara 9. Others 11. Rahardja Alimhamzah

Annual Report 2018 PT Bank CIMB Niaga Tbk 499 Management Discussion Performance Highlights Management Reports Company Profile and Analysis Risk Management

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No Date of Meetings Meetings Participants Agenda 27 18 September 1. Tigor M. Siahaan 1. Confirmation of Board of Directors Minutes of Meeting dated 4 2018 September 2018 2. Wan Razly Abdullah 2. August 2018 Internal Audit Summary 3. Rita Mas’Oen 3. Action Plans regarding Weaker Macroeconomic Indicators 4. Megawati Sutanto 4. 2019 Budget 5. Vera Handajani 5. CNAF Tax Update 6. John Simon 6. Fixed Asset Stock Opname Project 7. Lani Darmawan 7. Regulatory Commitment Monitoring 8. Others 8. Fransiska Oei

9. Hedy Lapian 10. Pandji P. Djajanegara 11. Rahardja Alimhamzah 28 9 October 2018 1. Tigor M. Siahaan 1. Consolidated Financial Performance October 2018 2. Wan Razly Abdullah 2. Beyond T2018 3. Others 3. Rita Mas’Oen

4. Megawati Sutanto

5. Vera Handajani

6. Lani Darmawan 7. Fransiska Oei 8. Hedy Lapian 9. Rahardja Alimhamzah 29 16 October 2018 1. Tigor M. Siahaan 1. Confirmation of Board of Directors Minutes of Meeting dated 9 October 2018 2. Wan Razly Abdullah 2. 3Q/2018 Internal Audit Result 3. Rita Mas’Oen 3. 3Q/2018 Risk Profile Bank Only, Consolidated & Sharia Business Unit 4. Megawati Sutanto 4. Basel Presentation 5. Vera Handajani 5. Belitung Initiative Update

6. John Simon 6. Assessment in Practices on Procurement Processing and Vendor Management 7. Lani Darmawan 7. Finance Update: 8. Fransiska Oei A. 3Q/2018 Realization of Bank Business Plan 9. Hedy Lapian B. 2019 Bank Business Plan 10. Pandji P. Djajanegara C. NIM & Repricing Analysis September 2018 11. Rahardja Alimhamzah D. Target 2023 8. Others 30 23 October 2018 1. Tigor M. Siahaan 1. Extraordinary General Meeting of Shareholders 2. Wan Razly Abdullah 2. Others

3. Rita Mas’Oen 4. Megawati Sutanto

5. Vera Handajani 6. John Simon

7. Lani Darmawan

8. Fransiska Oei 9. Hedy Lapian 10. Pandji P. Djajanegara 11. Rahardja Alimhamzah

500 Annual Report 2018 PT Bank CIMB Niaga Tbk Supporting Corporate Governance Corporate Social Others Consolidated Business Review Report Responsibility Corporate Data Financial Report

No Date of Meetings Meetings Participants Agenda 31 30 October 2018 1. Tigor M. Siahaan 1. Confirmation of Board of Directors Minutes of Meeting dated 16 October 2018 2. Wan Razly Abdullah 2. Information Security Update: Paving the Way Towards a More Secure 3. Rita Mas’Oen CIMB Niaga 4. Megawati Sutanto 3. Private Banking Realignment 5. Vera Handajani 4. T23 Initiative Submission 6. John Simon 5. Optimizing Fixed Assets in Medan and Semarang 6. Others 7. Lani Darmawan 8. Hedy Lapian

9. Pandji P. Djajanegara 10. Rahardja Alimhamzah 32 6 November 2018 1. Tigor M. Siahaan 1. Confirmation of Board of Directors Minutes of Meeting dated 23 October 2018 2. Wan Razly Abdullah 2. Callback Policy Revision 3. Rita Mas’Oen 3. Re-propose Quality Assurance 100% 4. Megawati Sutanto 4. Manual Framework Policy Revision 5. Vera Handajani 5. Data Analytics 6. John Simon 6. 2018 Stress Test Annual Review 7. Lani Darmawan 7. Consolidated Financial Performance 8. 2023 Target 8. Fransiska Oei 9. Beyond 2018 Aspiration 9. Hedy Lapian 10. Others 10. Pandji P. Djajanegara 33 13 November 1. Tigor M. Siahaan 1. BCG Update 2018 2. 2019 Bank Business Plan 2. Wan Razly Abdullah 3. Sustainable Financial Action Plan 3. Rita Mas’Oen 4. Others 4. Megawati Sutanto 5. Vera Handajani

6. John Simon

7. Lani Darmawan 8. Fransiska Oei 9. Pandji P. Djajanegara 10. Rahardja Alimhamzah 34 27 November 1. Tigor M. Siahaan 1. Other Agenda 2018 2. Wan Razly Abdullah

3. Rita Mas’Oen

4. Megawati Sutanto 5. Vera Handajani

6. John Simon 7. Lani Darmawan

8. Fransiska Oei 9. Hedy Lapian 10. Pandji P. Djajanegara 11. Rahardja Alimhamzah

Annual Report 2018 PT Bank CIMB Niaga Tbk 501 Management Discussion Performance Highlights Management Reports Company Profile and Analysis Risk Management

Board of Commissioners, Board of Directors & Board of Commissioners with Board of Directors Joint Meetings

No Date of Meetings Meetings Participants Agenda 35 4 December 2018 1. Tigor M. Siahaan 1. Consolidated Financial Performance as of November 2018

2. Wan Razly Abdullah

3. Rita Mas’Oen

4. Megawati Sutanto 5. Vera Handajani

6. John Simon 7. Lani Darmawan

8. Fransiska Oei 9. Hedy Lapian 10. Pandji P. Djajanegara 11. Rahardja Alimhamzah 36 11 December 2018 1. Tigor M. Siahaan 1. 2019 Sector Appetite 2. Wan Razly Abdullah 2. Simplification of Claims and Expenses Payment Proses 3. NII Analysis 3. Rita Mas’Oen 4. CIMB Niaga XTRA XPO 3.0 4. Megawati Sutanto 5. Others

5. Vera Handajani

6. John Simon

7. Fransiska Oei

8. Hedy Lapian 9. Pandji P. Djajanegara 10. Rahardja Alimhamzah 37 18 December 1. Tigor M. Siahaan 1. Early warnings for year end audit and interim audit findings 2018 2. Wan Razly Abdullah 2 Tax Update

3. Rita Mas’Oen 4. Megawati Sutanto

5. Vera Handajani 6. Fransiska Oei 7. Hedy Lapian 8. Pandji P. Djajanegara 9. Rahardja Alimhamzah

Agenda for Board of Directors Inviting Board of Commissioners Meetings in 2018 In 2018, the agenda for Board of Directors inviting Board of Commissioners Meetings was as follows:

No Date of Meetings Participants from BOC Participants from BOD Agenda 1 1 February 2018 1. Tigor M. Siahaan 1. Dato’ Sri Nazir Razak*) 1. Message from President Director 2. Wan Razly Abdullah 2. Glenn M. S. Yusuf 2. Financial Performance as of December 2017 3. Rita Mas’Oen 3. Zulkifli M.Ali

4. Megawati Sutanto 4. Pri Notowidigdo

5. Vera Handajani 5. Jeffrey Kairupan 6. John Simon 6. Armida S. Alisjahbana**)

7. Lani Darmawan 7. David R. Thomas 8. Fransiska Oei 9. Hedy Lapian 10. Pandji P. Djajanegara 11. Rahardja Alimhamzah

502 Annual Report 2018 PT Bank CIMB Niaga Tbk Supporting Corporate Governance Corporate Social Others Consolidated Business Review Report Responsibility Corporate Data Financial Report

No Date of Meetings Participants from BOC Participants from BOD Agenda 2 24 April 2018 1. Tigor M. Siahaan 1. Dato’ Sri Nazir Razak*) 1. Message from President Director 2. Wan Razly Abdullah 2. Glenn M. S. Yusuf 2. Financial Performance as of March 2018 3. Rita Mas’Oen 3. Zulkifli M.Ali 4. Megawati Sutanto 4. Pri Notowidigdo

5. Vera Handajani 5. Jeffrey Kairupan 6. John Simon 6. Armida S. Alisjahbana**)

7. Lani Darmawan 7. David R. Thomas

8. Fransiska Oei 8. Tengku Dato’ Sri Zafrul bin

Tengku Abdul Aziz***) 9. Hedy Lapian 10. Pandji P. Djajanegara 11. Rahardja Alimhamzah 3 3 July 2018 1. Tigor M. Siahaan 1. Dato’ Sri Nazir Razak*) 1. Message from President Director 2. Rita Mas’Oen 2. Glenn M. S. Yusuf 2. Financial Performance as of May 2018 3. Megawati Sutanto 3. Zulkifli M.Ali 4. Vera Handajani 4. Pri Notowidigdo

5. John Simon 5. Jeffrey Kairupan 6. Lani Darmawan 6. Armida S. Alisjahbana**)

7. Fransiska Oei 7. David R. Thomas

8. Hedy Lapian 8. Tengku Dato’ Sri Zafrul bin Tengku Abdul Aziz***) 9. Pandji P. Djajanegara 10. Rahardja Alimhamzah 4 19 December 2018 1. Tigor M. Siahaan 1. Glenn M. S. Yusuf 1. Message from President Director 2. Wan Razly Abdullah 2. Zulkifli M.Ali 2. Financial Performance as of November 2018 3. Rita Mas’Oen 3. Pri Notowidigdo 4. Megawati Sutanto 4. Jeffrey Kairupan

5. Vera Handajani 5. Armida S. Alisjahbana**) 6. Fransiska Oei 6. David R. Thomas 7. Hedy Lapian 7. Tengku Dato’ Sri Zafrul bin Tengku Abdul Aziz***) 8. Pandji P. Djajanegara 9. Rahardja Alimhamzah

*) Resigned as President Commissioner effective on 19 October 2018. **) Resigned as Independent Commissioner effective on 1 January 2019. ***) Appointed in the EGM 19 December 2018 and effectively serves as President Commissioner on 15 March 2019.

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Information on Ultimate and Controlling Shareholders

Khazanah Employee Public Nasional Berhad Provident Fund 26.80% 14.16% 6.84% 52.20%

CIMB Group Holdings Berhad

100%

PT Commerce Kapital Public 99.00% CIMB Group Sdn Bhd

1.02% 91.48% 7.50%

PT Bank CIMB Niaga Tbk

99.00% 99.93%

1.00%

PT CIMB Niaga Sekuritas PT CIMB Niaga Auto Finance

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Affiliated Relationship Between Board of Commissioners, Board of Directors, and Controlling Shareholder

The majority of CIMB Niaga’s Board of Commissioners and Board of Directors members have no affiliated relationship either familial or financial with other members of the Board of Commissioners, the Board of Directors and the Controlling Shareholders. CIMB Niaga’s Board of Commissioners and Board of Directors have integrity and independence and have no conflicts of interest that may impair their ability to perform their duties in a professional and objective manner.

The criteria for affiliated relationships between members of the Board of Commissioners, Board of Directors, and Controlling Shareholder include: 1. Affiliated relationship between a member of the Board of Directors and other members of the Board of Directors. 2. Affiliated relationship between a member of the Board of Directors and members of the Board of Commissioners. 3. Affiliated relationship between a member of the Board of Directors and the Ultimate and/or Controlling Shareholder. 4. Affiliated relationship between a member of the Board of Commissioners and other members of the Board of Commissioners; and 5. Affiliated relationship between a member of the Board of Commissioners and the Ultimate and/or Controlling Shareholder.

BOARD OF COMMISSIONERS Family Relationship with Financial Relationship with

Board of Board of Controlling Board of Board of Controlling No. Name Position Commissioners Directors Shareholders Commissioners Directors Shareholders

Yes No Yes No Yes No Yes No Yes No Yes No 1. Dato‘ Sri Nazir Razak*) President - √ - √ - √ - √ - √ √ - Commissioner 2. Glenn Muhammad Surya Vice President - √ - √ - √ - √ - √ √ - Yusuf Commissioner 3. Zulkifli M. Ali Independent - √ - √ - √ - √ - √ - √ Commissioner 4. Pri Notowidigdo Independent - √ - √ - √ - √ - √ - √ Commissioner

5. Jeffrey Kairupan Independent - √ - √ - √ - √ - √ - √ Commissioner 6. David Richard Thomas Commissioner - √ - √ - √ - √ - √ √ - 7. Tengku Dato’ Sri Zafrul Commissioner - √ - √ - √ - √ - √ √ - Tengku Abdul Aziz **) 8. Armida Salsiah Independent - √ - √ - √ - √ - √ - √ Alisjahbana***) Commissioner

*) Resigned as the President Commissioner effective on 19 October 2018. **) Appointed in the EGM 19 December 2018 and effectively serves as President Commissioner on 15 March 2019. ***) Resigned as an Independent Commissioner effective on 1 January 2019.

BOARD OF DIRECTORS Family Relationship with Financial Relationship with

Board of Board of Controlling Board of Board of Controlling No. Name Position Commissioners Directors Shareholders Commissioners Directors Shareholders

Yes No Yes No Yes No Yes No Yes No Yes No 1. Tigor M. Siahaan President Director - √ - √ - √ - √ - √ - √ 2. Rita Mas’Oen Director - √ - √ - √ - √ - √ - √ 3. Megawati Sutanto Director - √ - √ - √ - √ - √ - √ 4. Vera Handajani Director - √ - √ - √ - √ - √ - √ 5. John Simon Director - √ - √ - √ - √ - √ - √ 6. Lani Darmawan Director - √ - √ - √ - √ - √ - √ 7. Pandji P. Djajanegara Director - √ - √ - √ - √ - √ - √ 8. Hedy Lapian Director - √ - √ - √ - √ - √ - √ 9. Fransiska Oei Compliance Director - √ - √ - √ - √ - √ - √ (Independent Director) 10. Rahardja Alimhamzah Director - √ - √ - √ - √ - √ - √ 11. Wan Razly Abdullah*) Director - √ - √ - √ - √ - √ - √

*) Resigned as a Director effective on 1 January 2019

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AUDIT COMMITTEE 5. Guidelines, procedures and conduct of meetings The Audit Committee is a committee formed to 6. Reporting assist the Board of Commissioners in performing 7. Management of complaints or reports concerning its supervision functions, duties and responsibilities alleged violations related to financial statements effectively and independently, particularly for the 8. Ethics and work time implementation and reporting of financial records, the adequacy of Risk Management, the effectiveness and The Audit Committee Charter is reviewed and updated independence of Internal Controls, and effectiveness periodically so as to comply with the prevailing of audits conducted by external and internal auditors. regulations and the business requirements of the The Audit Committee also supervises CIMB Niaga’s Bank. The Audit Committee Charter was last updated compliance with all applicable laws and regulations. on 23 October 2018 and has been uploaded to CIMB Niaga’s website. Legal Basis The Audit Committee was established based on the Structure and Membership following regulations: The membership and composition, as well as 1. Financial Services Authority (OJK) Regulations and independency of the Audit Committee members OJK Circular Letters regarding the implementation meets the requirements of the relevant authorities. In and organisation of Corporate Governance, Audit 2018, the CIMB Niaga Audit Committee consisted of 1 Committee, Compliance Function of Commercial (one) Chairman who is an Independent Commissioner, Banks, Anti-Fraud Strategy of Commercial Banks, 1 (one) member who is an Independent Commissioner Public Accountant, as well as Affiliated Transactions and 2 (two) non-Commissioner members from and Conflict of Interest for Certain Transactions. Independent Parties with competencies and 2. CIMB Niaga’s Articles of Association concerning the qualifications in the field of accounting and banking Board of Commissioners duties and authorities. finance. 3. International Professional Practices Framework from the Institute of Internal Auditors. The Audit Committee members were appointed based on the Nomination and Remuneration Committee Audit Committee Charter Recommendation No. 006/NOMREM/KP/III/2016 dated The Audit Committee Guidelines in the Audit 23 March 2016 and approved by Board of Commissioners Committee Charter, regulates the following: Circular Decision No. 007/DEKOM/KP/IV/2016 dated 1. Purpose 6 April 2016. Further, the Audit Committee members 2. Composition, structure, tenure and membership were appointed based on Board of Directors Circular 3. Duties and responsibilities Decision No. 001/SIR/DIR/VI/2018 dated 20 August 2018. 4. Authorities

Audit Committee Membership Composition in 2018

No. Name Position in Bank Position in Committee Period

1 Zulkifli M. Ali Independent Commissioner Chairman 2016 - 2020

2 Jeffrey Kairupan Independent Commissioner Member 2016 - 2020

3 Mawar I. R. Napitupulu Independent Member Member 2016 - 2020

4 Yap Tjay Soen Independent Member Member 2016 - 2020

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Audit Committee Members’ Qualifications & Profiles

Membership Profile Career Background Education

Appointed as Chairman of the Audit Committee since the AGM on 15 Available in the Board of April 2016 and is concurrently serving as Chairman of the Risk Oversight Commissioners’ Profiles. Committee. He also serves as Independent Commissioner.

A complete profile is available in the Board of Commissioners’ Profiles.

Zulkifli M. Ali Chairman

Appointed as member of the Audit Committee since the AGM on 15 April Available in the Board of 2016. He also serves as an Independent Commissioner. Commissioners’ Profiles.

A complete profile is available in the Board of Commissioners’ Profiles.

Jeffrey Kairupan Member

Indonesian citizen, 56 years old. She was appointed as a Member of the • Bachelor’s degree in Audit Committee starting in March 2013 and was reappointed at the AGM Accounting from the Faculty on 15 April 2016. of Economics, Universitas Indonesia in 1986 Currently Mawar I.R. Napitupulu is serving as a Senior Managing Partner • MBA in Finance from Katholieke at Amir Abadi Jusuf, Aryanto, Mawar & Rekan Public Accountant Firm Universiteit Leuven, Belgium in (RSM Indonesia), Chairman of the Professional Honorary Committee 1990. – Indonesia Institute of Public Accountants, as well as lecturer at the Department of Accounting, Faculty of Economics, University of Indonesia. Mawar I. R. Napitupulu Member

Indonesian citizen, 65 years old. He was appointed as a Member of the • Bachelor’s degree in Audit Committee at the AGM on 15 April 2016. Mechanical Engineering from McGill University in 1976 Previously Yap Tjay Soen served as Managing Director & Chief Financial • Master of Business Officer at PT Bank Negara Indonesia Tbk from 2008 until 17 March 2015. Administration in 1980 from President Director & Group CEO of PT Tuban Petrochemical Industries McGill University, Montreal (2002-2007), Deputy President Director of the Bank International Canada. Indonesia (1999-2001), Chief Operating Officer of Asia Food & Properties Singapore (1998-1999), Astra International (1989-1988), and Citibank’s Vice Yap Tjay Soen President Indonesia (1980-1988). Member

Training for Independent Parties in the Audit Committee in 2018

Type of Training/Seminar/Workshop/Sharing Name Organizer Date and Location Knowledge

Mawar Napitupulu Indonesia’s International Seminar on Bank Indonesia deposit 28 February 2018 Restructuring and Resolution : Strengthening Insurance Agency Jakarta Infrastructures For Financial Crisis Resolution

ASEAN Corporate Governance Scorecard Sharing CIMB Niaga 24 April 2018 Session Jakarta

FAPM - OJK Year End Reminder Audit Workshop & Indonesian Institute 24 May 2018 Findings in the Implementation of OJK Rules and of Certified Public Jakarta Regulations on Issuers’ Financial Reporting Accountants (IICPA) & OJK

IKNB - OJK Workshop on Accounting and Audit Indonesian Institute 31 May 2018 Aspects in Preparing Pension Fund Financial Reports of Certified Public Jakarta Accountants (IICPA) & OJK

Special PPL for Banking DPIP OJK - IAPI Batch 2 Indonesian Institute 26 July 2018 of Certified Public Jakarta Accountants (IICPA) & OJK

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Type of Training/Seminar/Workshop/Sharing Name Organizer Date and Location Knowledge FAPM - OJK Workshop on Current Issues in the Indonesian Institute 30 August 2018 Preparation of Financial Statements of Plantation of Certified Public Jakarta Issuers and Corresponding Audit Aspects Accountants (IICPA) & OJK PPL OFFLINE PPPK JAKARTA BATCH 1 Indonesian Institute 19 September 2018 of Certified Public Jakarta Accountants (IICPA) & Ministry of Finance of RI Banking (Conventional & Sharia) Indonesian Institute 4 December 2018 of Certified Public Jakarta Accountants (IICPA) & OJK Yap Tjay Soen ASEAN Corporate Governance Scorecard Sharing CIMB Niaga 24 April 2018 Session Jakarta

Term of Office The prevailing regulation stipulates that the Audit Committee’s term of office shall be no longer than the term of office of the Board of Commissioners, in accordance with OJK Regulation No. 55/POJK.04/2015 and the Audit Committee Charter, and can only be re-elected for one subsequent period. The term of office for Committee members appointed during their term of office on the Board of Commissioners shall end at the same time as their term of office ends as a member of the Board of Commissioners.

Audit Committee Independency All members of the Audit Committee meet all independency criteria and are able to perform their duties independently, uphold the Bank’s interests and are not influenced by any parties. This is evidenced by the membership composition that consists of 1 (one) Chairman who is an Independent Commissioner, 1 (one) member who is an Independent Commissioner and 2 (two) non-Commissioner members from Independent Parties.

In accordance with OJK Regulation No.55/POJK.03/2016 concerning the Implementation of Corporate Governance for Commercial Banks Article 41 paragraph 4, the Independent Commissioners and Independent Parties who are members of the Audit Committee account for at least 51% (fifty one percent) of the total Audit Committee members. All Bank CIMB Niaga Audit Committee members are Independent Commissioners and Independent Parties, thus the composition has met the independence requirements.

Table of Independency of Audit Committee Zulkifli M. Jeffrey Mawar I. R. Yap Tjay Independency Aspect Ali Kairupan Napitupulu Soen Has no financial relationship with the Board of Commissioners and Board of Yes Yes Yes Yes Directors Has no management relationship at the Bank, subsidiary or affiliate companies Yes Yes Yes Yes of the Bank Has no shareholding relationship at the Bank Yes Yes Yes Yes Has no family relationship with the Board of Commissioners, Board of Directors, Yes Yes Yes Yes and/or fellow members of Audit Committee Not serving as an administrator of political parties, officials or government Yes Yes Yes Yes

Duties, Responsibilities and Authorities

Duties and Responsibilities The Audit Committee is assigned with the following duties and responsibilities: 1. Reviewing financial information that will be issued by CIMB Niaga to the public and/or authorities including financial statements, projections and other reports related to the Bank’s financial information, including evaluating the conformity of financial statements with prevailing financial accounting standards.

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2. Reviewing compliance with laws and regulations 10. Assisting the Board of Commissioners in actively related to Bank activities. supervising the implementation of the Anti-Fraud 3. Providing independent opinion in the event of strategy by reviewing the Anti-Fraud Strategy differences of opinion between management and Implementation Report submitted by the Anti- accountants for the services rendered. Fraud Management unit. 4. Providing recommendations to the Board of 11. Providing recommendations to the Board of Commissioners regarding the appointment and/ Commissioners regarding the appointment, or replacement of a Public Accounting Firm based dismissal and performance assessment of the on independency, scope of assignment and fees; Head of Internal Audit (Chief Audit Executive). discussing audit plans which include the nature and 12. Maintaining the confidentiality of Bank documents, scope of the audit; reviewing the adequacy of the data and information. examination by considering all important risks; and 13. The Chairman and members of the Audit Committee ensuring the coordination of which assignments are conduct collegial assessments on the Audit made to more than one Public Accounting Firms. Committee performance, each individual member’s 5. Reviewing, monitoring and evaluating the planning performance, and of the Audit Committee Chairman and implementation of audit and monitoring performance, in accordance with the determined the follow-up of audit results so as to assess criteria and assessment process. the adequacy of internal controls, including the 14. The Audit Committee Chairman is in charge of and adequacy of the financial reporting process. responsible for coordinating all Audit Committee 6. Reviewing the planning, implementation and activities to meet the Audit Committee objectives in monitoring of the follow-up actions by the accordance with its establishment, including being Board of Directors concerning the findings of responsible for the following matters: internal and external auditors and also regulator a. Preparing the annual work plan recommendations. b. Preparing the annual meeting schedule 7. Reviewing and reporting to the Board of c. Preparing periodic reports regarding the Commissioners concerning complaints relating Audit Committee activities as well as matters to the Bank’s accounting process and financial considered of concerned to the Board of reporting, including if there are possibilities of any Commissioners erroneous decisions being made during the Board d. Conducting self-assessments regarding the of Directors meetings, or deviations from the Board effectiveness of Audit Committee activities. of Directors meeting decisions. If required, the e. Appointing non-Commissioners members to Committee may conduct checks or assign third the Audit Committee or appointing other third parties to do so. Reports must be submitted to parties as secretaries to the Audit Committee to the Board of Commissioners no later than 2 (two) record Audit Committee Meetings and prepare working days after the completion of the report. the Minutes of Meetings. 8. Reviewing and providing advice to the Board of Commissioners regarding any potential conflict of Authorities interest in the Bank. In performing its duties, the Audit Committee 9. Assisting the Board of Commissioners in performing authorities includes: active supervision on the Compliance Function by: 1. Accessing Bank documents, data and information, a. Evaluating the implementation of the Bank’s regarding employees, funds, assets and Bank Compliance Function based on the Bank’s resources required. internal policies and prevailing rules and 2. Communicating directly with Bank employees regulations related to the activities of the Bank including Board of Directors and/or Senior at least 2 (twice) in 1 (one) year. Executives/Officers and parties who perform the b. Providing suggestions to improve the quality functions of Internal Audit, Risk Management, of implementation of the Bank’s Compliance and accountants related to the duties and Function. responsibilities of the Audit Committee.

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3. Involving independent parties outside of the 1. Conducted a study on the accountability and Audit Committee who are required to assist in transparency of the Bank’s financial statements. performing their duties (if needed). 2. Conducted a study on the resilience of the Bank’s 4. Executing other authorities delegated by the Board compliance structure and internal control. of Commissioners. 3. Reviewed the effectiveness of fraud investigation, detection and prevention. 2018 Report of Duties Implementation 4. Reviewed the Digital Banking Road map. In 2018, the Audit Committee performed its roles and 5. Reviewed the Anti-Money Laundering Act. responsibilities that included the following activities 6. Reviewed the implementation of IFRS 9. and recommendations made:

Audit Committee Reporting The Audit Committee reports its activities and recommendations to the Board of Commissioners on a regular basis.

Audit Committee Meetings and Attendance The Audit Committee Charter stipulates that the Audit Committee must hold meetings at least once every 3 (three) months, and the meetings must be physically attended at least twice a year. Meetings can only be held if attended by at least 51% (fifty one percent) of the total members, including Independent Commissioners and Independent Parties.

During 2018, the Audit Committee held 14 (fourteen) meetings, which included approval for the minutes of the previous meeting, discussion of matters that require follow-ups from the previous meetings and other matters that require attention.

Table of Members Attendance in Audit Committee Meetings for January – December 2018

Attendance through Attendance in Audit Name Physical Attendance Teleconference or Attendance Level Committee Meeting Telepresence

Zulkifli M. Ali 14 14 - 100%

Jeffrey Kairupan 14 14 - 100%

Mawar I. R. Napitupulu 14 14 - 100%

Yap Tjay Soen 12 12 - 85%

In 2018, the Audit Committee meetings discussed the following agenda items: 1. Meetings with the Finance Director and Executives Officers: a. Reviewed financial statements including the presentation of financial statements, accounting treatment and compliance with generally accepted accounting principles. b. Reviewed financial performance and adequacy of published financial statements and the reporting of financial reports to authorities. c. Discussed recommendations and progress of follow-up of audit results from external auditors. 2. Meetings with the Head of the Internal Audit Unit: a. Discussed the audit plan, scope and audit findings, follow-up recommendations regarding audit results and the adequacy of the internal control system. b. Discussed Internal Audit Performance.

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3. Meetings with the Compliance Director: Audit Committee Statement on the Effectiveness of a. Discussed recommendations and the progress Internal Control System and Risk Management of follow-up of audit results from the Financial The internal control system implemented by CIMB Services Authority, Bank Indonesia and Bank Niaga is considered to have been running effectively Negara Malaysia. and adequately as reflected in the effective b. Discussed compliance risk and sanctions implementation of internal control functions, including imposed by regulators. In addition, experiences the functions of Internal Audit, Risk Management, learned from existing cases have been Compliance, Finance and Operational Controls. discussed. c. Discussed new rules and regulations and their Work Plans for 2019 impact to the Bank. In 2019, the Audit Committee’s work plan has 4. Meetings with Anti-Fraud Management (AFM) established the following strategic priorities: discussed: 1. Accountability and transparency of financial Fraud prevention programs, including Anti-Fraud statements review. Campaigns, Anti-Fraud Awareness Training, Anti- 2. Resilience of the Bank’s compliance structure and Fraud Awareness Socialization to customers, internal control review. E-learning & certification through applications, 3. Effectiveness of fraud prevention, detection and fraud investigation cases, and monitoring of investigation review. sanctions against fraud perpetrators. 4. Anti-Money Laundering Act review. 5. Meetings with the Public Accountant to discuss 5. Cyber Security review. audit plan, the scope of the audit, audit findings, 6. Data Quality review. recommendations regarding audit results and the management letter that has been submitted. The Bank provides detail information concerning the 6. Meetings with related Directors and working units Audit Committee composition, membership structure to ensure the adequacy of the internal control and requirements, roles and responsibilities, authority, system in managing Non-Performing Assets, Non- conduct of meetings, and reports in the Audit Performing Loans (NPL) of Corporate Banking and Committee Charter that has been uploaded on the Commercial Banking, and the status of important Bank’s website. projects in 2018.

In addition to the meetings, the Audit Committee regularly reports on activities and provides recommendations to the Board of Commissioners.

Zulkifli M. Ali Chairman

Jeffrey Kairupan Mawar I.R. Napitupulu Yap Tjay Soen Member Member (Independent Party) Member (Independent Party)

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NOMINATION AND REMUNERATION COMMITTEE Nomination and Remuneration Committee Charter The Nomination and Remuneration Committee NRC has a Charter that regulates the membership, (NRC) is a committee established by the Board of structure, authority, duties and responsibilities, Commissioners to assist the Board of Commissioners meetings, activities and work procedures of the NRC in performing its supervision responsibilities related in the implementation of their functions, which has to the nomination and remuneration policies for the been adapted to OJK Regulation No.34/POJK.04/2014. Board of Commissioners, Board of Directors, Sharia The NRC Charter was last updated on 26 February Supervisory Board, members of Committees under the 2016 and uploaded to the Bank’s website. The NRC Board of Commissioners, and all Bank employees in Charter is reviewed periodically so as to comply with accordance with the prevailing rules and regulations. the prevailing rules and regulations.

Legal Basis Structure and Membership The Nomination and Remuneration Committee was The membership and composition, as well as established based on the following regulations: independency of the NRC members meet the 1. Financial Services Authority (OJK) Regulations and requirements of the relevant authorities. In 2018, OJK Circular Letters regarding the implementation CIMB Niaga NRC comprised of 2 (two) Independent and organisation of Corporate Governance, Commissioners, 1 (one) Commissioner and 1 (one) Bank Nomination and Remuneration Committee, Executive Officer in charge of Human Resources (HR). Remuneration Governance and the Principle of Prudency for Commercial Banks that conduct The NRC members were appointed based on Outsourcing to Other Parties. the Nomination and Remuneration Committee 2. CIMB Niaga’s Articles of Association concerning Recommendation No. 006/NOMREM/KP/III/2016 dated the duties and authorities of the Board of 23 March 2016 and 013/NOMREM/KP/X/2018 dated 22 Commissioners. October 2018 as approved by the Board of Commissioners Circular Decision No. 007/DEKOM/KP/IV/2016 dated 6 April 2016 and No. 018/DEKOM/KP/X/2018 dated 23 October 2018.

Further, the NRC members were appointed based on Board of Directors Circular Decision No. 001/SIR/DIR/VIII/2018 dated 20 August 2018 and No. 003/SIR/DIR/X/2018 dated 30 October 2018.

Nomination and Remuneration Committee Membership Composition in 2018

No. Name Position in Bank Position in Committee Period

1. Pri Notowidigdo Independent Commissioner Chairman 2016 - 2020

2. Armida S. Alisjahbana*) Independent Commissioner Member 2016 - 2020

3. Dato‘ Sri Nazir Razak**) President Commissioner Member 2018 - 2020

4. Glenn M.S. Yusuf***) Vice President Commissioner Member 2018 - 2020

5. Joni Raini Executive Officer In Charge of HR Member concurrently 2016 - 2020 Secretary

*) Resigned as Independent Commissioners mutatis mutandis as a member of NRC effective on 1 January 2019 **) Resigned as President Commissioners mutatis mutandis as a member of NRC effective on 19 October 2018 ***) Appointed as a member of NRC on 19 October 2018

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Qualification & Profile of NRC Members

Membership Profile Career Background Education

Appointed as Chairman of the NRC since March 2013 and was reappointed Available in the Board of in AGM on 15 April 2016. He also serves as Independent Commissioner. Commissioners’ Profiles.

A complete profile is available in the Board of Commissioners’ Profiles.

Pri Notowidigdo Chairman

Appointed as a Member of the NRC since AGM on 15 April 2016 and the Available in the Board of term of office ended upon resigning as Independent Commissioner Commissioners’ Profiles. effective on 1 January 2019.

A complete profile is available in the Board of Commissioners’ Profiles.

Armida S. Alisjahbana Member

Appointed as a Member of the NRC in February 2018 and the term of Available in the Board of office ended upon resigning as President Commissioner effective on 19 Commissioners’ Profiles. October 2018.

A complete profile is available in the Board of Commissioners’ Profiles.

Dato’ Sri Nazir Razak Member

Appointed as a Member of NRC since 19 October 2018. He also serves as Available in the Board of Vice President Commissioner. Commissioners’ Profiles.

A complete profile is available in the Board of Commissioners’ Profiles.

Glenn M. S. Yusuf Member

Appointed as a Member concurrently Secretary of NRC starting 2015 and Available in the Executive Officers’ was reappointed in AGM on 15 April 2016. Profiles.

A complete profile is available in the Executive Officers Profiles.

Joni Raini Member concurrently Secretary

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Training for Members (other than Commissioner/ b. Providing recommendations regarding Independent Commissioner) in 2018 candidates for the Board of Commissioners In 2018, Joni Raini participated in training related and/or Board of Directors, and/or the to Leadership, Risk & Governance, including a Risk Sharia Supervisory Board to the Board of Management Certification refreshment, IT Security Commissioners to be submitted to the General Awareness, ASEAN CG Scorecard Sharing Session, Meeting of Shareholders. Sharia Executive Program, Strategic HR Business c. Performing performance assessments and Partner Certification in Singapore, and CIMB-INSEAD establishing development programs for the Leadership Program, and participated in internal Board of Commissioners and Board of Directors coordination meetings and workshops held by the as well as the Sharia Supervisory Board. Directorate of Human Resources. d. Providing recommendations regarding Independent Parties who will serve as members Term of Office of the Audit Committee, Risk Oversight The prevailing regulation stipulates that the NRC term Committee and Integrated Governance of office shall be no longer than the term of office of Committee. the Board of Commissioners, in accordance with OJK 2. Related to remuneration policy: Regulation No. 34/POJK.04/2014 and the NRC Charter, a. Evaluating the remuneration policy; and they can be re-elected. The term of office for b. Evaluating the alignment of the remuneration Committee members appointed during their term of policy with its implementation; office on the Board of Commissioners shall end at the c. Providing recommendations to the Board of same time as their term of office ends as a member of Commissioners regarding: the Board of Commissioners. i. Structure, policy and amount of remuneration for the Board of Commissioners, the Sharia Nomination and Remuneration Committee Supervisory Board, the Board of Directors Independency and the Committee members under the The NRC performs its duties, responsibilities and Board of Commissioners; and authorities in a professional and independent manner, ii. Remuneration policy framework for without interference from any parties that is contrary Executive Officers and employees as a whole to the rules and regulations. NRC members have met that has been approved by the Board of all independence criteria and are able to perform their Directors. duties independently, uphold the interests of the Bank 3. The Committee shall ensure that the remuneration without influence by any parties. This is evidenced by policy takes into account: the majority of the Commissioners who are members a. Financial performance and reserve of the NRC are Independent Commissioners. requirements as governed in the prevailing rules and regulations; Duties, Responsibilities and Authorities b. Individual work performance; The NRC is in charge of, responsible for and authorized c. Fairness within the peer group; to provide recommendations to the Board of d. Consideration of the Bank’s long-term goals Commissioners as follows: and strategies; 1. Related to nomination policy: 4. In the event that a Committee member has a conflict a. Preparing and providing recommendations of interest with the proposed recommendation, the regarding the system and procedures for proposal shall disclose the conflict of interest and nominating and/or replacing members of the the considerations underlying the proposal. Board of Commissioners, Board of Directors, as well as the Sharia Supervisory Board to the Board of Commissioners to be submitted to the General Meeting of Shareholders.

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2018 Report of Duties Implementation serve as the main factor during the consideration for During 2018, the NRC conducted the following activities decisions pertaining to bonus distribution. and provided several recommendations including the 9. Provided direction, input and recommendations following: regarding the collegial self-assessment framework 1. Provided input and recommendations for updating for the Board of Directors by adding several aspects to the nomination policy, whereby the NRC emphasized serve as assessment factors. that this policy shall apply to the nomination of new 10. Conducted reviews of the performance assessments members of the Board of Commissioners, the Board of the Board of Commissioners and Committee of Directors and Independent Parties. members by providing recommendations and 2. Provided evaluation and input regarding the highlighting matters that required improvements in assessment of the Key Performance Indicator (KPI) the future. framework, whereby the NRC emphasized that the 11. Provided periodic evaluations and directions completion period for the KPI framework and its regarding the performance achievement (KPI) for the implementation should be carefully monitored. Board of Directors and provided input for units whose 3. Provided direction and input regarding the 2018 Board performance was still below the target to exert more of Directors KPI framework and important aspects effort to ensure performance improvements. that require the attention of the Board of Directors. 12. Conducted further discussions and evaluated the 4. Provided assessments and recommendations performance assessment framework for Board of regarding the nominations for members of the Commissioners and the Committees under Board of Board of Directors, the Board of Commissioners, Commissioners, which included: changes to collegial the Committees and Independent parties after performance assessments, individual performance considering the expertise, competencies, background assessments and the assessment mechanism. and experience of the candidates submitted by the 13. Provided direction and input regarding the impact Shareholders for further discussion at the General of the entity’s governance policies regarding job Meeting of Shareholders (GMS). descriptions and key performance indicators for 5. Provided input and recommendations for the bonus the functions being identified, and emphasized payments and salary increases as well as promotions the importance of good communication with all for employees in 2018 related to performance stakeholders affected. achievements (KPI) in 2017. 14. Conducted discussions and provided 6. Provided direction and input regarding the recommendations related to the impact of industrial competency development policy framework for the revolution 4.0 on the Bank and all stakeholders Board of Directors and the Board of Commissioners regarding the importance of the HR unit as a pioneer by highlighting that the development program to be in encouraging the digitalization process particularly made should align with the needs of each individual, by recruiting talent with capabilities and knowledge in the effectiveness of the program, and the financial the digital field. condition of the Bank. 15. Provided input and recommendations regarding the 7. Provided reviews and recommendations regarding the demerit framework as an implementation of a strict remuneration review for the Board of Commissioners, compliance culture to protect the Bank from potential the Board of Directors, the Committee members risks that may arise from operational processes. and the Sharia Supervisory Board for 2018 so as 16. Provided reviews and recommendations related to the to continuously maintain the level of fairness and implementation of orientation programs for the Board competitiveness to create a positive impact on the of Directors and the Board of Commissioners Bank’s overall performance. 17. Provided recommendations regarding the 8. Provided reviews and recommendations regarding the composition diversity for members of the Board of scale of the KPI target in 2018 for the Board of Directors Directors and the Board of Commissioners. by taking into account the importance of comparison 18. Conducted discussions and recommendations data concerning market share in performance regarding Committee member nominations. evaluation, and emphasized that performance results

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Nomination and Remuneration Committee Reporting NRC reports its activities and recommendations to the Board of Commissioners on a regular basis.

Nomination and Remuneration Committee Meetings and Attendance The NRC Charter stipulates that Committee Meetings are held in line with the business requirements of the Bank, at least every 4 months. Meetings can only be held if attended by at least 51% (fifty one percent) of the total members, including Independent Commissioners and HR Executives Officers.

In 2018, the NRC held 9 (nine) meetings, with attendance as follows:

Table of Members Attendance in Nomination and Remuneration Committee Meetings for January – December 2018

Attendance through Attendance in NRC Attendance Name Physical Attendance Teleconference or Meeting Level Telepresence

Pri Notowidigdo 9/9 9 - 100%

Armida S. Alisjahbana*) 9/9 9 - 100%

Dato‘ Sri Nazir Razak**) 4/6 1 3 66%

Glenn M.S. Yusuf***) 1/1 1 - 100%

Joni Raini 8/9 8 - 88%

The composition, structure and requirements of Committee members and Sharia Supervisory membership, duties and responsibilities, authorities, Board, also Remuneration policy framework for conduct of meetings and reporting are fully disclosed Executive Officers and all employees. in the Nomination and Remuneration Committee 4. Conducting reviews and providing Charter uploaded on the Bank’s website. recommendations on the performance assessment results for the Board of Commissioners, Board Work Plans in 2019 of Directors and Sharia Supervisory Board, both In 2019, the NRC work plan has established the collegial and individual assessments. following strategic priorities: 1. Providing assessment and recommendations NOMINATION AND REMUNERATION COMMITTEE on the nominations for members of the Board of ASSESSMENT ON THE IMPLEMENTATION OF Directors, Board of Commissioners, Committees NOMINATION AND REMUNERATION POLICIES IN and/or Independent parties as members of the THE BANK Committees to be submitted to the Board of In 2018, NRC has evaluated and is of the opinion that Commissioners to be proposed at the GMS. the nomination process implemented by the Bank 2. Performing evaluation and reviews on the is in accordance with good corporate governance development program for the Board of principles, while the Bank’s remuneration structure Commissioners, the Board of Directors as well as and policies have been carried out in accordance Sharia Supervisory Board in 2019. with the remuneration policies applicable to the 3. Conducting reviews and providing banking industry, and by considering good corporate recommendations on the remuneration proposals governance principles, and risk-based remuneration. for the Board of Commissioners, Board of Directors,

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Remuneration of Members of Nomination and Remuneration Committee

A. Remuneration Package and Other Facilities Received

Amount Received in 1 Year by Nomination & Remuneration Committee Member Types of Remuneration and Other Facilities 2018 2017 Person Rp (million) Person Rp (million) Remuneration (salary, routine allowance, bonus, and other non- 4*) 6,848 3**) 5,435 natura facilities) Other natura facilities (housing, transportation, health - - - - insurance, etc.) which: a. Could be owned - - - - b. Could not be owned - - - - Total 4*) 6,848 3**) 5,435

Total Members of Nomination & Remuneration Committee Remuneration per Person 2018 2017 Above Rp5 billion 0 0 Above Rp2 billion s/d Rp5 billion 2 2 Above Rp1 billion s/d Rp2 billion 1 1 Above Rp500 million s/d Rp1 billion 1 0 Rp500 million below 0 0

*) Including Commissioners who resign as members of the NRC in 2018 **) Including Commissioners whose term of office ended since EGM on 24 August 2017

B. Variable Remuneration for Members of Nomination and Remuneration Committee

Amount Received in 1 Year by Members of Nomination and Remuneration Committee

Variable Remuneration 2018 2017

Person Rp (million) Person Rp (million)

Total Nil Nil Nil Nil

No CIMB Niaga Nomination and Remuneration Committee members receive shares/stocks or bonuses.

Board of Directors’ Succession Policy The succession policy for the Board of Directors and/or Senior Management in CIMB Niaga is governed under the Bank Policy, as follows: 1. The Board of Commissioners, assisted by the NRC, ensure that the Bank adopts a talent management system managed by the HR Directorate, as a tool to identifying executive officers that have the potential to maintain the continuity of the Bank’s future leadership, to maintain business sustainability and the long-term goals of the Bank. 2. The Human Resources Directorate, together with the Nomination and Remuneration Committee, identifies talents within the Bank and does not rule out any potential talent who are professionals parties in the succession planning for the Board of Directors, including the President Director and/or Senior Management.

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3. For internal talent within the Bank, the Human Resources Directorate performs assessments so as to provide further opportunities for the self-development of these talented employees, both in the form of mandatory training and career development opportunities, and others. 4. Talented employees identified as potential successors as members of the Board of Directors are evaluated and identified and must meet the criteria for candidates of the Bank’s Board of Directors.

Pri Notowidigdo Armida S. Alisjahbana*) Chairman Member

Dato‘ Sri Nazir Razak**) Glenn M.S. Yusuf***) Joni Raini Member Member Member Concurrently Secretary

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RISK OVERSIGHT COMMITTEE Structure and Membership The Risk Oversight Committee (ROC) is a committee The Membership, composition, and independency of established by and responsible to the Board of ROC members meet the requirements of all prevailing Commissioners to support the implementation of the regulations. In 2018, CIMB Niaga’s ROC consisted of 1 Board of Commissioners’ duties and responsibilities in (one) Chairman who is an Independent Commissioner, relation to Risk Management in the Bank. 2 (two) members who are Commissioners, and 2 (two) non-Commissioner members from Independent Legal Basis Parties with competencies and qualifications in The Bank established the ROC based on the OJK Finance and Risk Management. Regulation and OJK Circular Letter regarding Governance Implementation for Commercial Banks as The ROC members were appointed based on well as the Bank’s Articles of Association. the Nomination and Remuneration Committee Recommendation No. 006/NOMREM/KP/III/2016 Risk Oversight Committee Charter dated 23 March 2016, and approved by the Board of The ROC established a Charter governing the Commissioners Circular Decision No. 007/DEKOM/KP/ membership, structure, authority, duties and IV/2016 dated 6 April 2016. Further, the ROC members responsibilities, meetings, activities and working were appointed based on the Board of Directors procedures of the ROC in performing its functions. The Circular Decision No. 001/SIR/DIR/VIII/2018 dated 20 ROC Charter was last updated on 21 April 2017 and has August 2018. been uploaded to CIMB Niaga’s website. Furthermore, the ROC Charter is reviewed periodically to ensure its compliance with all prevailing regulations and Bank requirements.

Risk Oversight Committee Membership Composition in 2018

No. Name Position in Bank Position in Committee Period

1 Zulkifli M. Ali Independent Commissioner Chairman 2016 - 2020

2 Glenn M. S. Yusuf Vice President Commissioner Chairman 2016 - 2020

3 David Richard Thomas Commissioner Chairman 2016 - 2020

4 Firmanzah Independent Party Chairman 2016 - 2020

5 Sri Indrastuti (Tuti) S. Hadiputranto Independent Party Chairman 2016 - 2020

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Qualifications & Profiles of Risk Oversight Committee Members

Membership Profile Career Background Education

Appointed as Chairman of the Risk Oversight Committee since March Available in the Board of 2013 and is concurrently Chairman of the Audit Committee. He was Commissioners’ Profiles. re-appointed as Chairman of Risk Oversight Committee and Audit Committee in AGM on 15 April 2016. He also serves as an Independent Commissioner.

A complete profile is available in the Board of Commissioners’ Profiles.

Zulkifli M. Ali Chairman

Appointed as a member of the Risk Oversight Committee since March Available in the Board of 2013 and was re-appointed in AGM on 15 April 2016. Commissioners’ Profiles. He also serves as Vice President Commissioner.

A complete profile is available in the Board of Commissioners’ Profiles.

Glenn M. S. Yusuf Member

Appointed as a member of the Risk Oversight Committee since November Available in the Board of 2014 and was re-appointed in AGM on 15 April 2016. Commissioners’ Profiles. He also serves as a Commissioner.

A complete profile is available in the Board of Commissioners’ Profiles.

David Richard Thomas Member

Indonesian citizen, 42 years old. He was appointed as a Member of the • PhD in Strategic & International Risk Oversight Committee starting in April 2016. Management from the University of Pau et Pays de Currently he is serving as the Rector of Paramadina University, Professor l’Adour, France. of the Faculty of Economics and Business of University of Indonesia, and • Master of Philosophy from Index Committee of Infrastructure Stock at PT Sarana Multi Infrastruktur University of Science and Indonesia (Persero). Technology of Lille 1, France. • MBA degree from University of Pierre Mendes-Grenoble Firmanzah II, France and Master of Member Management • Bachelor of Economics from University of Indonesia.

Indonesian citizen, 75 years old. She was appointed as a Member of the • Law Degree from the Risk Oversight Committee starting in July 2016. University of Indonesia in 1970 • Master of Law from the She is one of the founding partners of Hadiputranto, Hadinoto & Partners, University of Washington in the largest Law Firm in Indonesia, a member of the Baker & McKenzie 1981 International Law Firm.

She specializes in areas related to corporations, mergers and acquisitions, debt restructuring in companies/banks in Indonesia. Sri Indrastuti (Tuti) S. Hadiputranto She served as a member of the Board of Commissioners of the Indonesian Member Stock Exchange (“IDX”) for the period of 2001-2004. For more than a decade, she has been a member of various Committees of the IDX with the most recent position as a Member of the Discipline Committee.

She has been consistently named in the top ranking in leading legal directories, including the Chambers Asia, Asia Pacific Legal 500, IFLR1000 and AsiaLaw Profiles, and in 2016 was selected as one of The Most Inspiring Woman in Indonesia by Forbes Indonesia.

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Training for Independent Party Members of the Risk Oversight Committee in 2018

Name Type of Training/Seminar/Workshop/Sharing Knowledge Organizer Date and Location

Firmanzah Hero for Indonesia (as Judge) MNC Group 24-25 January 2018 Jakarta

New Growth Models in a Changing Global Landscape IMF-BI 27 February 2018 (speaker) Jakarta

Kami Indonesia Seminar (Speaker) Kami Indonesia 24 March 2018 Bandung, Jawa Barat

Market Intelligence Seminar (Speaker) Ministry of Foreign 16 April 2018 Affairs Jakarta

ASEAN Corporate Governance Scorecard Sharing Session CIMB Niaga 24 April 2018 Jakarta

Technical Guidance of PKS Legislative Members of DPRPD Wilda PKS 24 April 2018 and Regency/City of South Sumatra, Jambi, Bengkulu, Jakarta Lampung and Bangka Belitung Regions (Speaker

Bank Indonesia Seminar, Palu (as a Speaker) Bank Indonesia, Palu 27-28 June 2018 Palu, Central Sulawesi

Cooperation Perspective Dialogue with PTS - DKI Pronvicial Goverment of 11 July 2018 Provincial Government (Speaker) Jakarta Jakarta

International Course on “Indian Ocean Cooperation” PGS 16 July 2018 (Speaker) Jakarta

RPJMN 2020-2024FGD Background Study on Higher National Development 18 July 2018 Education (Speaker) Planning Agency Jakarta

Coordination Meeting and Evaluation of Tangerang District Goverment of 24 July 2018 Regency Government Performance in 2018 (Speaker) Tangerang Sentul, West Java

Panel Discussion Series: Raising National Resilience to National Alliance - FKPPI 4 August 2018 Ensure National Survival (Speaker) Jakarta

Seminar and National Conference of Regional and Rural Bogor Agricultural 30 August 2018 Planning Alumni Association IPB (Speaker) Institute Bandung, West Java

Judging the 2018 Annual Pertamina Subsidiary Award (as LM FEB UI 20 September 2018 a Judge) Jakarta

Synchronization of Investment Realization through LKPM Capital Investment 17 October 2018 Seminar (Speaker) Coordinating Board Jakarta (BKPM)

Presidential Election 2019 Dialogue (Speaker) Golden Circle Club 18 October 2018 Meeting Jakarta

International Conference of Science, Management and Indonesia Strategic 22 October 2018 Engineering 2018: The Future is Now (Speaker) Management, Jakarta Universitas Pertamina

FPKS National Seminar “Youth as Pioneer of a Prosperous FPKS 25 October 2018 and Fair Indonesia” (Speaker) Jakarta

Sindo Judging (Jury) Sindo 30 October 2018 Jakarta

Seminar from Bumi Resources (Speaker) Bumi Resources/Bakrie 3 December 2018 Group Jakarta

Sri Indrastuti (Tuti) S. ASEAN Corporate Governance Scorecard Sharing Session CIMB Niaga 24 April 2018 Hadiputranto Jakarta

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Term of Office 2018 Report of Duties Implementation The prevailing regulation stipulates that the ROC In 2018, the ROC performed its activities in accordance members’ term of office shall be no longer than with the Committee’s annual Work Plan that the term of office of the Board of Commissioners was prepared by referring to the ROC duties and as stipulated in the Articles of Association and they responsibilities as set forth in the ROC Charter. In 2018, can be re-elected. The term of office for Committee there were 14 agenda items established at the beginning members appointed during their term of office on the of the year, to ensure that the ROC meetings discussed Board of Commissioners shall end at the same time as the latest and most relevant topics related to the Bank. their term of office ends as a member of the Board of The ROC duties implementation in 2018, included the Commissioners. following activities and recommendations: 1. Reviewed and submitted recommendations to the Risk Oversight Committee Independency Board of Commissioners on: The ROC performs its duties, responsibilities, and a. Risk Management Policies/frameworks and authorities in a professional and independent manner their implementation by the Board of Directors, without influence of any party that is not in accordance and with the regulations. The ROC Members meet all b. Determination of risk appetite, including independency criteria and are able to perform their risk appetite statement, risk posture, sector duties independently, uphold the Bank’s interests and appetite, and sector limit. are not influenced by any parties. This is evidenced by 2. Evaluated the Risk Management Committee the membership composition that consists of 1 (one) and the Risk Management Unit duties as well Chairman who is an Independent Commissioner, 2 as evaluated the consistency between Risk (two) members who are Commissioners and 2 (two) Management policies and their implementation by non-Commissioner members from Independent discussing: Parties. a. Risk Management strategies and policies for various risk aspects, not just Credit Risk, Duties, Responsibilities, and Authorities Operational Risk, Liquidity Risk and Market Risk, In general, the ROC’s main duty, responsibility and but also Legal Risk, Strategic Risk, Compliance authority is to provide recommendations to the Risk, Reputational Risk and Information Board of Commissioners to support the effective Technology Risk. implementation of the Board of Commissioners duties b. Risk Management related to capital, including and responsibilities related to Risk Management, Internal Capital Adequacy Assessment Process including: and the implementation of stress tests. 1. Evaluating the conformity of Risk Management c. Internal reports that included the monitoring policies and the implementation of Bank policies; results on macro-economic conditions, and the Bank’s financial performance, and risk 2. Monitoring and evaluating the implementation indicators to ensure compliance with the Bank’s of the Risk Management Committee and Risk risk appetite. Management Unit duties.

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d. Mandatory reports to be submitted to the b. Latest reports regarding the implementation of Bank’s supervisor consisting of the Risk Profile Basel and IFRS 9 projects. Report, the Risk Based Bank Rating Report and 5. Monitored significant audit findings from the other reports to ensure compliance with the perspective of operational risk management delivery of information to the Bank supervisor including investigation reports and follow-up concerning the Bank’s risk conditions. regarding mitigation and improvement. 3. Monitored the Bank’s credit risk by discussing: a. Status and projection of asset quality for each Risk Oversight Committee Reporting loan segment to ensure each business unit has The ROC reports its activities and recommendations to taken the necessary measures to maintain and the Board of Commissioners on a regular basis. improve the Bank’s assets quality in line with the established risk appetite. Risk Oversight Committee Meeting and Attendance b. Thematic review of loan portfolios in foreign The ROC Charter stipulates that the ROC must hold currencies (Wrong-way Risk) when the Rupiah meetings at least once a month and the meetings weakened in 2018. must be physically attended at least twice a year. c. Business plan, strategy and account planning Meetings can only be held if attended by at least 51% for Large Group borrowers. (fifty one percent) of the total members, including d. Implementation status of the Bank’s initiative to an Independent Commissioner and an Independent improve the credit process. Party. 4. Evaluated the Bank’s strategy and steps by discussing: During 2018, the ROC held 12 (twelve) meetings with a. Budget plan, business strategy and Bank the following member attendance as follow: Business Plan in 2018 in accordance with the Bank’s risk appetite.

Table of Members Attendance in Risk Oversight Committee Meetings for January - December 2018

Attendance Attendance in through Risk Oversight Physical Name Teleconference or Attendance Level Committee Attendance Telepresence Meetings

Zulkifli M. Ali 12 12 - 100%

Glenn M. S. Yusuf 12 11 1 100%

David Richard Thomas 9 4 5 75%

Firmanzah 12 12 - 100%

Sri Indrastuti (Tuti) S. Hadiputranto 10 10 - 83%

Information concerning the composition, structure and membership requirements, duties and responsibilities, authorities, organization of meeting and reporting are set forth in the ROC Charter and have been uploaded to the Bank’s website.

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Work Plan for 2019 ASSESSMENT OF THE RISK OVERSIGHT In 2019, the ROC’s work plan has established the COMMITTEE’S IMPLEMENTATION OF RISK following strategic priorities: MANAGEMENT • Monitoring and maintaining the Bank’s soundness In 2018, the ROC assessed the Bank’s application of level based on risk. Risk Management by actively managing the Bank’s • Changing the agenda to be more relevant, efficient, Risk Profile through inherent risk monitoring, and the and focused on risk related matters quality of risk management strengthening, application • Evaluating the implementation of the Bank’s risk of Good Corporate Governance through various Risk related management policies Committees, for maximizing added value to the shareholders, managing capital in a comprehensive manner, as well as ensuring sustainable business profitability and growth, enabling the Bank’s soundness that is based on the overall risk to be adequately maintained.

Zulkifli M. Ali Chairman

Glenn M. S. Yusuf David Richard Thomas Member Member

Firmanzah Sri Indrastuti (Tuti) S. Hadiputranto Member (Independent Party) Member (Independent Party)

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INTEGRATED GOVERNANCE COMMITTEE The Integrated Governance Committee Charter CIMB Niaga as the Main Entity of CIMB Indonesia Financial The CIMB Niaga IGC has a Charter that regulates Conglomerate established the Integrated Governance the membership, authority, authorities, duties Committee (IGC) to assist the implementation of the and responsibilities, meetings, activities and work Board of Commissioners duties, as the Main Entity procedures of the IGC in carrying out its functions. The Board of Commissioners, especially for carrying out IGC Charter is reviewed periodically so as to comply their supervisory function on the implementation of with the prevailing rules and regulations and Bank’s Integrated Governance in the CIMB Indonesia Financial need. The IGC Charter was updated on 3 October 2018 Conglomerate, in compliance with all prevailing and has been uploaded to Bank’s website. regulations and legislation. Structure and Membership Legal Basis The membership and composition, as well as The IGC was established based on the following independency of the IGC members meet the regulations: requirements of the relevant authorities. Based on 1. The Financial Services Authority (OJK) Regulations OJK Regulation No. 18/POJK.03/2014 and the updated and OJK Circular Letters regarding the IGC Charter, the IGC membership was adjusted in implementation of Integrated Governance for 2018, based on the Nomination and Remuneration Financial Conglomerates. Committee recommendation No. 003/NOMREM/KP/ 2. Integrated Governance Committee Charter. II/2019 dated 22 February 2019 as approved in the Board 3. CIMB Niaga’s Articles of Association regarding the of Commissioners Circular Decision No. 004/DEKOM/ Board of Commissioners’ duties and authorities. KP/II/2019 dated 25 February 2019. Further, the IGC were appointed based on Board of Directors Circular Decision No. 002/SIR/DIR/II/2019 dated 26 February 2019 that became effective on 3 October 2018.

Integrated Governance Committee Membership Composition in 2018

Position in the FSI as Member of the CIMB Indonesia Position in the No. Name Period Financial Conglomeration Committee

1. Jeffrey Kairupan Independent Commissioner of CIMB Niaga Chairman 2016 - 2020

2. Armida S. Alisjahbana*) Independent Commissioner of CIMB Niaga Member 2016 - 2020

3. Endang Kussulanjari S. Independent Party Member 2016 - 2020

4. Serena K. Ferdinandus Independent Commissioner of CIMB Niaga Auto Finance Member 2016 - 2020

5. Yulizar D. Sanrego Sharia Supervisory Board of CIMB Niaga Member 2016 - 2019

6. Albertus Banunaek**) President Commissioner of CIMB Principal Asset Member 2016 - 2020 Management

*) Resigned as Independent Commissioners mutatis mutandis as a member of the IGC effective on 1 January 2019 **) Served as a member of the IGC until May 2018

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Qualifications & Profiles of Integrated Governance Committee Members

Membership Profile Career Background Education

Appointed as Chairman of the IGC since AGM on 15 April 2016. Available in the Board of He also serves as an Independent Commissioner. Commissioners’ Profiles.

A complete profile is available in the Board of Commissioners’ Profiles.

Jeffrey Kairupan Chairman

Appointed as a Member of IGC since AGM on 15 April 2016 and the term Available in the Board of of office ended upon resigning as Independent Commissioner effective Commissioners’ Profiles. on 1 January 2019. She also served as an Independent Commissioner.

A complete profile is available in the Board of Commissioners’ Profiles.

Armida S. Alisjahbana*) Member

Indonesian citizen, 62 years old. She was appointed as a member of the • Master of Arts, University of IGC since August 2016. Colorado Boulder, Colorado – USA Currently she also serves as a Commissioner at PT Pefindo Credit Bureau. • Bachelor’s Degree in Economics, Universitas Gadjah Mada, Yogyakarta, Indonesia.

Endang Kussulanjari S. Member

Indonesian citizen, 58 years old. She was appointed as a Member of the IGC Bachelor’s Degree in Economics, since March 2015 and was reappointed in AGM on 15 April 2016. Universitas Indonesia.

Currently she also serves as a member of the Risk Management Committee of PT Elnusa Tbk since 2016, Independent Commissioner and Chairman of the Audit Committee of PT CIMB Niaga Auto Finance since 2012, Member of the Audit Committee of PT Blue Bird Tbk since 2014, Commissioner of PT Anpa International since 2012, and Chief Audit Executive (Head of Internal Audit & Risk Management Division) of PT Ithaca Resources since 2009. Serena K. Ferdinandus Member Previously, she was a member of the Audit Committee of PT Elnusa Tbk (2015 – 2016), a member of the Audit Committee at PT Chandra Asri Petrochemical Tbk (2009 - 2015) and PT Barito Pacific Tbk (2009 - 2013). She also held the positions of Senior Vice President of the Investment Banking Division at PT NC Securities (2002 - 2009), Vice President of Investment Banking Division and Direct Investment Division at PT Danareksa (Persero) and PT Danareksa Finance (1996 - 2001) and Manager of the Audit Division at Ernst & Young, Sarwoko & Sandjaja in Indonesia (1986 - 1995) and Ernst & Young, Dallas.

Appointed as a Member of the IGC since March 2015 and was reappointed Available in the Sharia in AGM on 15 April 2016. Supervisory Board’ Profiles.

He also serves as a member of the Sharia Supervisory Board of Sharia Business Unit.

A complete profile is available in the Sharia Supervisory Board’ Profiles.

Yulizar D. Sanrego Member

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Membership Profile Career Background Education

Indonesian citizen, 63 years old. He was appointed as a Member of IGC • Master of Law from University since March 2015 and was reappointed in AGM on 15 April 2016 which ended of Indonesia. in May 2018. • The best graduate from National Resilience Institute He was served as President Commissioner (Independent) of of Republic of Indonesia PT CIMB Principal Asset Management until May 2018. He is also the (Lemhannas, KRAXXXV/2002). Founder/CEO of AMConsult.

Previously, he was the President Director of PT KAF Finance (1999 - 2003), Albertus Banunaek**) Managing Director of PT CAF Finance (1997–1999), Chief Operating Officer Member of Ometraco Group (1992-1997) and held various positions in General Management, Consulting, Banking & Finance, among others in PT Jayapari Steel Tbk., Business Advisory Indonesia, HSBC Bank and BDNI Bank.

He previously appointed in varius positions mostly in Finance, Banking and Capital Market with the last position as Vice Chairman of the Capital Market Committee at the Indonesia Chamber of Commerce (1992-2012). He also served as the Secretary General in the Asian Leasing Association (1997-2004) and Chairman (1999-2004) and Secretary General (1995-1999) in Indonesian Leasing Association. He also joined the Indonesian Justice and Unity Party (PKPI). In 2002-2008 held various positions as Deputy Treasurer, Treasurer and Coordinator IX for Eastern Indonesia (Bali, Nusa Tenggara Barat dan Nusa Tenggara Timur) as his last position.

Training for Integrated Governance Committee Members (other than CIMB Niaga management) in 2018

Name Type of Training/Seminar/Workshop/Sharing Knowledge Organizer Date and Location

Endang Kussulanjari S. ASEAN Corporate Governance Scorecard Sharing Session CIMB Niaga 24 April 2018 Jakarta

BSMR Refreshment Program (Level 5) - Effective Credit BSMR 10 July 2018 Restructuring to Improve Bank Performance Jakarta

2018 Institute of Internal Auditors (IIA) Indonesia National The Institute of 27-29 August 2018 Conference – “Nurturing Agile Internal Auditors in Disruptive Internal Auditors (IIA) Bali Times”

Serena K. Ferdinandus ASEAN Corporate Governance Scorecard Sharing Session CIMB Niaga 24 April 2018 Jakarta

National Seminar on “Capital Market Financing Industry” Association 26 July 2018 of Indonesian Jakarta Financing Companies (APPI)

“IIA 2018 National Conference” The Institute of 28-29 August 2018 Internal Auditors (IIA) Bali

Workshop “ISO 31000 International Risk Management CRMS Indonesia 3-6 September 2018 Standard ERM Fundamentals” Bandung, West Java

Term of Office The IGC Term of Office shall be no longer than the term of office of the Board of Commissioners, in accordance with the Articles of Association, and they can be re-elected. The term of office for Committee members appointed during their term of office on the Board of Commissioners shall end at the same time as their term of office ends as a member of the Board of Commissioners.

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The Board of Commissioners Committees

Integrated Governance Committee Independency 2. Reviewed the Integrated Minimum Core Capital IGC members have met all independency criteria and Adequacy Report. are capable of performing their duties independently, 3. Reviewed the Integrated Internal Audit Report. upholding the Bank’s interest without interference 4. Reviewed the Integrated Compliance Report. from any parties. This is evidenced in the minimum 5. Reviewed the Self-Assessment Reports for the membership requirements for the IGC, which is as Implementation of Integrated Governance, as of follows: June and December 2018. 1. An Independent Commissioner who serves as 6. Reviewed the CIMB Indonesia Financial Chairman of another committee at the Main Entity, Conglomerate membership, and the Integrated acting as Chairman and a concurrent member; Governance Committee membership that had 2. An Independent Commissioner who represents, changed due to changes in share ownership in PT and is appointed from the Financial Services CIMB Sekuritas Indonesia (which has now changed Institution (FSI) within the Financial Conglomerate, its name to PT CGS-CIMB Sekuritas Indonesia) and as a member; PT CIMB Principal Asset Management. 3. An independent party, as a member. Integrated Governance Committee Reporting The IGC reports its activities and recommendations to Duties, Responsibilities, and Authorities the Board of Commissioners on a regular basis. IGC’s duties, responsibilities and authorities, include: 1. Evaluating the implementation of Integrated Integrated Governance Committee Meetings and Governance, at a minimum, by assessing Attendance the adequacy of Internal Controls and the The IGC Charter stipulates that the IGC Meetings are implementation of compliance in an integrated held at least twice a year. Meetings can only be held if manner; attended by at least 51% (fifty one percent) of the total 2. Providing recommendations to the Board of members, including the Independent Commissioners Commissioners of the Main Entity concerning and Independent Parties. improvements to the Integrated Governance Guidelines. In 2018, the IGC held 2 (two) meetings, on 12 February 2018 and 9 August 2018, which included ratification of 2018 Report of Duties Implementation the previous meetings minutes, discussion regarding During 2018, the IGC focused on conducting issues that needed to be followed-up from the previous evaluations on the following matters: meeting, and other matters that required attention, 1. Reviewed the Integrated Risk Management with attendance levels of the meetings as follows: Report.

Table of Members Attendance in Integrated Governance Committee Meetings for January - December 2018

Attandence in Physical Attendance through Attendance Name TKT Committee Attendance Teleconference or telepresence Level Meting

Jeffrey Kairupan 2 2 - 100%

Armida S. Alisjahbana*) 2 2 - 100%

Endang Kussulanjari S. 2 2 - 100%

Serena K. Ferdinandus 2 2 - 100%

Yulizar D. Sanrego - - - 0%

Albertus Banunaek**) 1 1 - 50%

*) Resigned as Independent Commissioners mutatis mutandis as a member of the IGC effective on 1 January 2019 **) Served as a member of the IGC until May 2018

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The IGC meeting agenda in 2018 was as follows: 7. Providing advice to the Main Entity Board of 1. Confirmation on the Minutes of the previous IGC Commissioners on improvements to the IGC meetings. Charter. 2. Discussions on matters that needed to be followed up from the previous meetings, to find out the ASSESSMENT OF THE INTEGRATED GOVERNANCE updated status. COMMITTEE IMPLEMENTATION OF INTEGRATED 3. CIMB Indonesia Integrated Risk Profile Report. GOVERNANCE IN THE CIMB INDONESIA FINANCIAL 4. Integrated Minimum Core Capital Adequacy CONGLOMERATE Report. In 2018, the IGC assessed CIMB Indonesia Financial 5. Integrated Internal Audit Report. Conglomerate’s application of Integrated Governance 6. Integrated Governance Implementation Report including, the adequacy of integrated internal including: controls, and the sufficiency of the integrated a. IGC Self-Assessment Report compliance function, and compliance with the b. Integrated Compliance Report applicable regulations regarding the application of 7. Good Corporate Governance Action Plan Integrated Governance in Financial Conglomerates 8. Others in Indonesia, based on the size and complexity of the CIMB Indonesia Financial Conglomerate. This was Work Plans for 2019 reflected in the fulfilment of applying the Integrated For 2019, the IGC work plan has established the Governance principles. However, there were minor following strategic priorities: weaknesses in the application of Integrated Corporate 1. Reviewing the Integrated Risk Management Governance, however in general the weaknesses were Report. insignificant and could be solved through normal 2. Reviewing the Integrated Minimum Core Capital activities by the Main Entity and/or the Financial Adequacy Report. Services Institutions, as members of CIMB Indonesia 3. Reviewing the Integrated Internal Audit Report. Financial Conglomerate. 4. Reviewing the Integrated Compliance Report. 5. Reviewing the Integrated Risk Profile Report The IGC Charter is adequate and can be used as the 6. Reviewing the Integrated Governance basis for Integrated Governance and interaction Implementation Report: between the Financial Services Institutions of the CIMB Indonesia Financial Conglomerate. a. Self-Assessments of the Integrated Governance Implementation Report for the positions in June and December 2019 b. Integrated Compliance Report

Armida S. Alisjahbana*) Endang Kussulanjari S. Jeffrey Kairupan Member Member Chairman

Serena K. Ferdinandus Yulizar D. Sanrego Albertus Banunaek**) Member Member Member

*) Resigned as Independent Commissioners mutatis mutandis as a member of the IGC effective on 1 January 2019 **) Served as a member of the IGC until May 2018

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Board of Directors Committees

EXECUTIVE COMMITTEES Structure and Membership The Executive Committees are committees at the Board Chairman : President Director of Directors level that were established to support the Deputy Chairman 1 : Risk Management Director Board of Directors’ duties and responsibilities of the. In Deputy Chairman 2 : Credit Director accordance with the applicable provisions, the Bank Members: was required to have 3 (three) Executive Committees, 1. Operations and IT Director which are the Risk Management Committee, the Asset 2. Compliance, Corporate Affairs and Legal Director & Liability Committee and the IT Steering Committee. 3. Strategy and Finance Director However, the Board of Directors also had the authority 4. Consumer Banking Director to establish other Executive Committees based on the 5. Business Banking Director Bank’s business needs. Current developments in CIMB 6. Syariah Banking Director Niaga have created more business complexities that 7. Treasury and Capital Market Director require quality improvements in the implementing of 8. Human Resources Director Good Corporate Governance. As a result, CIMB Niaga 9. Chief of Corporate Banking has established 6 (six) Executive Committees, which 10. Chief of Micro Small Medium Enterprise are: 11. Chief Audit Executive 1. Risk Management Committee (RMC) 12. Chief of Corporate Strategic Initiatives 2. Asset & Liability Committee (ALCO) Secretary : Market Risk Management Head 3. Information Technology Steering Committee (ITSC) 4. Operational Risk Management Committee (ORC) Duties and Responsibilities 5. Credit Policy Committee (CPC) 1. Establishing and recommending Risk Management 6. Capital Management & Recovery Plan Committee policies and frameworks, including the Bank’s Risk (CMRP) Strategy and Risk Appetite Statement (RAS). 2. Reviewing risk exposures and the Bank and its CIMB Niaga also has other specific Committees subsidiaries’ Risk Management implementation established so that Directors can focus on a their both periodically and incidentally due to rapid particular area (related to the Director’s duties) or changes in the Bank’s external and internal specifically appointed Directors (hereinafter referred conditions. to as “Designated Director”) including ALCO, MarCom, 3. Approving the risk profile report, stress testing HRC, CC, DC and DGC with the segregation of duties report and scenario including its mitigation plan. and responsibilities set out in the Term of Reference 4. Approving the specific Risk Management policies (ToR) for the respective Committees. that are not covered by the other Risk Executive Committees. RISK MANAGEMENT COMMITTEE (RMC) 5. Reviewing and analysing the Bank and its subsidiaries’ capital adequacy. Main Functions and Authorities 6. Approving the Bank’s portfolio limits/Management RMC was established with the main functions and Action Triggers (MAT); e.g. sector limits, house authorities to provide recommendations to the limits, VaR limits, etc. President Director in formulating and refining polices, 7. Evaluating and approving treasury trading limits, evaluating the progress and conditions of risk profile, excess trading limit, changes in market risk and providing recommendations and remedial measurement and credit risk factors for treasury measures. products.

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8. Receiving notifications from other Executive Bank Ratings (RBBR), Capital, Integrated Risk Committees on decisions related to risk made Management, Sector Appetite and ICAAP. by: Assets & Liabilities Committee (ALCO), ORC 4. Evaluated the Bank’s portfolio condition and (Operational Risk Committee) and CPC (Credit development, including the corporate financing Policy Committee). portfolios, consumer portfolio asset quality, 9. Receiving notifications from the Business securities portfolio, and watch list accounts. Development Committee (BDC) of approved new 5. Approved the risk score card model, exposure products and activities. at default and loss given default for consumer 10. Overseeing Management response to Asset Quality products. Issues: 6. Approved the results of stress testing conducted a. To review that the business units, have clearly bankwide. defined the Asset Quality Review and Early 7. Discussed matters arising from previous RMC Warning process for identifying, classifying, meetings (if any). reporting and monitoring any non-performing loan(s) in line with regulatory authorities/credit Work Program for 2019 policies and procedures. 1. Approve and evaluate policies related to Risk b. To review the asset quality so it in line with the Management. Bank’s overall risk appetite. 2. Approve and evaluate risk limits and risk appetite. c. To review and deliberate portfolio and asset 3. Improve the committee’s role in reviewing the best quality trends to identify any emerging risks. Risk Management strategy implementation. 11. Approving risk related models for capital, and other 4. Improve the effectiveness of meetings by focusing business uses. on key risk issues. 5. Comply with Bank Indonesia and the Financial Meetings, Quorum, and Resolutions Services Authority Regulations in the area of Risk 1. Meetings are held at least 10 (ten) times a year. Management. 2. Quorum attendances must be 5 (five) persons; including 4 (four) Directors, one of them being the ASSET & LIABILITY COMMITTEE (ALCO) Chairman or Vice Chairman. 3. Quorum decisions require more than 50% (fifty Main Functions and Authorities percent) of attending members with voting rights; ALCO is a supporting committee of the Board of including 2 (two) Directors, one of them being the Directors assigned with the duty of analysing and Chairman or Vice Chairman. evaluating the management of assets and liabilities, as well as making relevant decisions through the Work Realization in 2018 formulation of policies, strategies and objectives to 1. Provided recommendations and approved manage Bank assets and liabilities in an integrated the policy framework and Risk Management manner. Framework, including Risk Management policies and ICAAP policies. Structure and Membership 2. Approved market risk limits, operating limits for Chairman : President Director consumer products including Pension Loans, Deputy Chairman 1 : Strategy and Finance Director mortgages, credit cards and auto loans, and Deputy Chairman 2 : Treasury and Capital Market Director changes to the In-house limits. Members: 3. Approved the results of parameter reviews and 1. Business Banking Director reports regarding calculation of Risk Profiles, 2. Risk Management Director Material Risk Assessments (MRA) and Risk Based 3. Operations and IT Director

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4. Credit Director framework and policies are in line with the 5. Consumer Banking Director current and future size and complexity of CIMB 6. Syariah Banking Director Niaga’s operations; 7. Human Resources Director b. Upholding the consistent implementation of 8. Compliance, Corporate Affairs and Legal Director practices and policies in the Bank; Secretary : Asset & Liability Management Head c. Approving the Management Action Trigger (“MAT”)/liquidity risk limits and interest rates in Duties and Responsibilities the Banking Book; 1. Assessing the Balance Sheet and Net Interest d. Establishing, supervising and reviewing the Income (NII) hedging strategies of entities under CIMB a. Reviewing and analysing the Bank’s balance Niaga, as well as reviewing and ensuring the sheet based on business, assets and liabilities Bank’s risk profile is still within the limits set in composition, currencies, growth, revenue and the MAT/liquidity risk limit and interest rate risk margins. in the Banking Book; b. Reviewing any discrepancies arising from the e. Reviewing and approving the ALM risk planning and actualization of the balance sheet parameters and validation model; and and how it affects funding and lending, balance f. Identifying and reviewing funding and liquidity sheet ratios, and whether the Bank remains demands, and taking appropriate actions for within the Risk Appetite limit. certain liquidity and funding conditions. c. Reviewing the Net Interest Income (NII) and Net Interest Margin (NIM) trends, and the Meetings, Quorum and Resolutions differences between actual conditions and 1. Meetings are held at least 12 (twelve) times a year. projection results. 2. Quorum attendances must be more than 2/3 (two d. Assessing the impact on NII under the Base thirds) of the total number of Board of Directors Case conditions and under Stressed Economic members. Scenarios. 3. Quorum decisions require approval from more than e. Reviewing and ensuring the Fund Transfer 2/3 (two thirds) of the attending Board of Directors Pricing (FTP) framework is appropriate members. and serves as a link among business lines 4. The quorum for meetings and the decision- and prioritizes consistency in the Bank’s making quorum is delegated to at least 2 (two) out performance. of 3 (three) members of the Board of Directors as f. Reviewing and approving Pricing that requires follows: regulator approval and Pricing of new and old i. Chairman: President Director products to be in line with the Bank’s strategic ii. Deputy Chairman 1: Strategy and Finance and business objectives. Director 2. Contingency Funding Plans iii. Deputy Chairman 2: Treasury and Capital Market a. Reviewing the Contingency Funding Plan Director (“CFP”) as an operational business plan and measuring the business plan’s capacity to Work Realization in 2018 ensure that management actions to be taken 1. Encouraged growth in the loan portfolio for several are realistic; and key products including mortgages and SMEs. b. Ensuring the Early Warning Indicators are 2. Ensured the Bank’s liquidity level always remained relevant to current conditions. at the optimum level. 3. Asset Liability Management 3. Monitored and revised the funding pricing a. Reviewing the Asset & Liability Management strategies actively by considering the level of framework and policies to ensure that the funding requirements, conditions and competition

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in the market and the maximum level of funding pricing set out by the regulator. 4. Actively maintained the Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR) to be above the regulatory requirements. 5. Issued Sukuk and Bonds as an alternative and diversification of funding sources.

Sukuk & Bonds

Type Issuance Date Maturity Date Coupon Nominal Rate

Shelf Registration Bonds II Phase IV 2018 Series A 20 September 2018 30 September 2019 7.50% Rp766 bio

Shelf Registration Bonds II Phase IV 2018 Series A 20 September 2018 20 September 2021 8.50% Rp137 bio

Shelf Registration Bonds II Phase IV 2018 Series C 20 September 2018 20 September 2023 8.80% Rp118 bio

Shelf Registration Sukuk Mudharabah I Phase I 2018 Series A 15 November 2018 25 November 2019 8.35% Rp441 bio

Shelf Registration Sukuk Mudharabah I Phase I 2018 Series B 15 November 2018 15 November 2021 9.25% Rp559 bio

Subordinated Bonds III 2018 Series A 15 November 2018 15 November 2023 9.85% Rp75 bio

Subordinated Bonds III 2018 Series B 15 November 2018 15 November 2025 10.00% Rp75 bio

Work Program for 2019 The composition of Committee members is as follows: 1. Implementation of the Interest Rate Risk in Banking Chairman : President Director Book (IRRBB) in accordance with regulatory Deputy Chairman 1 : Operations and IT Director provisions. Deputy Chairman 2 : Strategy and Finance Director 2. Adjustment to the FTP CASA methodology with Members: the calculation of LCR and NSFR run off based on 1. Risk Management Director regulatory provisions. 2. Consumer Banking Director 3. Increase sales through Product Bundling/Cross 3. Treasury and Capital Market Director selling as the next step to marketing loan products 4. Credit Director in addition to offering competitive interest rates. 5. Syariah Banking Director 4. Devise strategies to grow CASA funds without 6. Business Banking Director incurring any potential expenses. 7. Human Resources Director 5. Increase the Bank’s income through investments 8. Compliance, Corporate Affairs and Legal Director in the bond market while ensuring the Bank’s 9. Chief Audit Executive liquidity is maintained and is still within the Risk 10. Head of IT (member cum Secretary) Appetite limits. Duties and Responsibilities INFORMATION TECHNOLOGY STEERING The duties and responsibilities of ITSC are to provide COMMITTEE (ITSC) recommendations related to: 1. The Information Technology (IT) Strategic Plan Main Functions and Authorities alignment with the Bank’s Business Strategic Plan. ITSC is a committee assigned with the duty to Matters that must be taken into consideration providing input and recommendations regarding include: the management and development policies for the a. IT Road map to support the Bank’s business Information Technology and Systems at CIMB Niaga. strategy; b. Resources required; Structure and Membership c. Benefits gained when the IT Strategic Plan is ITSC members consists of minimum 2/3 of the total implemented; and number of the Board of Directors, and appointed d. Challenges that might arise during the Executive Officers one level below the appointed Director. implementation of IT Strategic Plan.

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2. Formulation of major IT policies, standards and Work Realization in 2018 procedures, such as IT security policy and IT Risk 1. Established the 2019-2021 IT Strategic Plan for Management policies in the Bank. Business and IT Engagement, IT Capability 3. Alignment between approved IT projects and IT Blueprint and IT Security Roadmap to support the Strategic Plans. The IT Steering Committee also goal to become an elite Bank in 2023 sets the priority status for critical IT projects that will 2. Performed regular monitoring regarding the have a significant impact on the Bank’s operational implementation of IT Security initiatives to improve activities. maturity levels including the implementation of 4. Alignment between IT project implementation and the Data Loss Prevention (DLP) system. the agreed project plan (Project Charter). ITSC also 3. Performed regular monitoring regarding the status makes recommendations based on the analysis of Information Technology strategic projects in the results of the main IT projects. This agenda is also 2018 Corporate Operating Plan. part of the CIC (Capital Investment Committee) 4. Socialised regulations related to Information agenda. Technology from regulators (OJK). 5. Alignment between IT and management 5. Established the implementation of Information information systems and the Bank’s business Technology policies including the 2018 Disaster activities requirements. Recovery Testing Plan. 6. Reviewing the effectiveness of steps taken to 6. Monitored the expenditure related to IT strategic minimize risks in the Bank’s IT investments to projects in the 2018 Corporate Operating Plan. ensure they contribute to the Bank’s business 7. Established efforts to improve Information goals. This agenda is also part of the CIC (Capital Technology services. Investment Committee) agenda. 8. Evaluated and provided solutions to issues related 7. Monitoring of IT performance and efforts to improve to Information Technology. IT performance. 9. Monitored and evaluated the implementation 8. Efforts to resolve various IT related issues that and development of IT internal development cannot be resolved by the business unit users and throughout 2018. IT providers in an effective, efficient and timely manner. Work Program for 2019 9. Adequacy and allocation of resources owned by the 1. Recommendations regarding the Information Bank. Technology Strategic Plan 2019-2021. 2. Recommendations for preparing key IT policies, Meetings, Quorum and Resolutions standards and procedures. 1. Meetings are held at least 4 (four) times a year. 3. Recommendations for setting priorities for IT 2. Quorum attendances must be more than 2/3 (two projects and alignment with IT Strategic Plans. thirds) of the total number of Board of Directors 4. Recommendations for implementing IT projects. members. 5. Recommendations regarding the alignment of IT 3. Quorum decisions require approval from more than and Management Information Systems and the 2/3 (two thirds) of the attending Board of Directors Bank’s business activities requirements. members. 6. Recommendations for assessing the budget and capital expenditure of Information Technology. 7. Monitor the efficiency of Information Technology services. 8. Assess Information Technology issues. 9. Recommendations for analysing IT resources owned by the bank.

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OPERATIONAL RISK MANAGEMENT COMMITTEE 4. Reviewing and approving the Bank’s operational (ORC) risk policies and changes that are escalated to the ORC as needed. Main Functions and Authorities 5. Paying attention to other important or critical ORC is a Committee at the Board of Directors level matters related to operational risk. with the role and responsibilities to provide oversight on the Bank’s operational risk management including, Meetings, Quorum, and Resolutions reviewing operational risk, providing opinions on the 1. Meetings are held at least 10 (ten) times a year. operational risk framework appropriateness, and 2. Quorum attendances must be more than 2/3 (two reviewing actions to address both escalating and thirds) of the total Committee members, provided emerging risks. that 2/3 (two-thirds) of the Board of Directors members in the Committee attend the meeting. Structure and Membership 3. Quorum decisions require approval from more Chairman : Risk Management Director than 2/3 (two thirds) of attending Committee Deputy Chairman 1 : Operations and IT Director members, provided 2/3 (two- thirds) of those voting Deputy Chairman 2 : President Director and agreeing to the decision are members of the Members: Board of Directors. 1. Credit Director 2. Compliance, Corporate Affairs and Legal Director Work Realization in 2018 3. Treasury and Capital Market Director 1. Reviewed and discussed ACM (Access Control 4. Strategy and Finance Director Matrix) annual review process and approved ORM 5. Consumer Banking Director to leave as a mandatory reviewer. As a replacement, 6. Human Resources Director appointed a BU/SU related to RCU, RCU IT and IT 7. Syariah Banking Director Security as ACM mandatory reviewer. 8. Business Banking Director 2. Monitored and reviewed the overall achievement of 9. Chief Audit Executive the established Risk Appetite Statement. 10. Chief of Corporate Strategic Initiative 3. Conducted a review and discussed the validation 11. Chief of Micro Small Medium Enterprise process and results of the implementation of 12. Chief of Corporate Banking Operational Risk Management tools. Secretary : Head of Operational Risk 4. Approved enhancement to the Control Issue Management Management policies and procedures. 5. Conducted a review and discussed the RACE Duties and Responsibilities (Regional Assessment Control Event), which is the 1. Approving Operational Risk Framework and policies process of sharing operational risk events with to ensure that the framework is appropriate for critical impacts among countries for assessment the size and complexity of the Bank’s current and and lessons-learnt. future operations. 6. Reviewed and discussed the scope of Control 2. Reviewing the Bank’s significant operational risks Environment Rating, and approved new reporting and monitoring management responses/actions templates for operational risk to be used in 2019. with regards to managing the Bank’s Operational 7. Reviewed the progress of the Business Impact Risk pro-actively. Analysis and BC Plan Tests, Critical Functions 3. Overseeing the Bank’s overall Operational Risk Premises Risk Assessments, Critical System Control Environment by: Categorization Assessments & DR Plan Test, a. Reviewing risk reports from each directorate; updated status of earthquake disasters in Lombok b. Requesting and reviewing thematic reports.

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and Palu, and approved changes to the Crisis CREDIT POLICY COMMITTEE (CPC) Management Committee members. 8. Reviewed the control environment self-assessments Main Functions and Authorities presented by each Business and Supporting CPC supports the Board of Directors in preparing Unit, both for Conventional and Sharia, including credit policies, as well as provides suggestions for subsidiaries, and provided direction and decision improvements related to credit policies. CPC also for improvements to the control environment, functions to ensure the fulfilment of Corporate and development of systems required, including Governance principles in the area of credit policy for monitoring on the completion of commitments the interest of the Bank and stakeholders. based on targeted timelines. Structure and Membership Work Program for 2019 Chairman : President Director 1. Review and approve the Operational Risk Deputy Chairman 1 : Credit Director Management Framework as well as related policies Deputy Chairman 2 : Risk Management Director and ensure that the framework and policies have Members: been properly implemented. 1. Consumer Banking Director 2. Review the appropriateness of Risk Appetite and 2. Compliance, Corporate Affairs and Legal Director monitor the accomplishment. 3. Strategy and Finance Director 3. Monitor the Bank’s performance in managing 4. Operations and IT Director Operational Risk by using various operational Risk 5. Treasury and Capital Market Director Management Tools (ORM Tools) including the 6. Human Resources Director approved risk appetite. 7. Syariah Banking Director 4. Conduct an assessment on the risk assessment 8. Business Banking Director results submitted by each business/support unit, 9. Chief Audit Executive both from Conventional and Sharia, including 10. Chief of Micro Small Medium Enterprise subsidiaries, and provide direction and decisions 11. Chief of Commercial Banking for improvements to the control environment and 12. Chief of Corporate Banking system development required. 13. Chief of Corporate Strategic Initiatives 5. Improve the monitoring functions, particularly Secretary : Wholesale and Commercial for critical Operational Risks and thematic risks Credit Policy Head to ensure mitigation measures have been taken to prevent recurring incidents in the future, and Duties and Responsibilities monitor corrective actions taken in accordance 1. Determining the direction of credit policies with the targeted timelines. (including Risk Acceptance Criteria, credit process 6. Evaluate the implementation of Operational and approval) are in line with the Bank’s risk Risk Management processes by ensuring the appetite to encourage good quality credit growth effectiveness of the Three Lines of Defence. while continuing to consider prudential banking 7. Review and monitor the development of projects practices. and initiatives that support Operational Risk 2. Establishing and ensuring consistency of: management. a. Bank compliance with credit management policies and applicable regulations, particularly those that regulate significant risk exposures; b. Approving the Bank’s credit management policies and strategies; and

536 Annual Report 2018 PT Bank CIMB Niaga Tbk Supporting Corporate Governance Corporate Social Others Consolidated Business Review Report Responsibility Corporate Data Financial Report

c. Supervising the implementation of credit 8. Term of Reference Membership of Credit Policy policies. Committee. 3. Approving the criteria for selecting senior Bank 9. Trade Finance Product, among others, related employees as members of the Credit Committee to the iB Trade Finance (KPTF) Policy for Import L/C, Local L/C and Trust Receipt. Meetings, Quorum and Resolutions 10. Treasury Products, among others, concerning 1. Meetings are held at least 10 (ten) times a year. FX Transaction with CRF, Addition of Business 2. Quorum attendances must be more than 2/3 (two Segments to Forward Exchange FX Program thirds) of the total number of Board of Directors Clean Base and REPO Transactions for Non- members. Banking Financial Institutions (NBFI). 3. Quorum decisions require approval from more than 11. Value Chain Products, which are among others 2/3 (two thirds) of the attending Board of Directors related to the Lending Model for Factoring, members. Lending Model for BPR, Lending Model for Distributor Financing e-Discount and Work Realization in 2018 Delegation of Authority for Lending Program for Credit Policy Improvements: Distributor Financing. A. Commercial (Conventional & Sharia) 12. MSME-Micro Linkage which is among others Adjusted Bank internal policies related to related to Provisions on Periodic Reconciliation external regulations (including the Financial for Micro Linkage Debtors in Rural Bank, Services Authority, Government Regulations) and Regional Development Bank and Employee management of the bank’s risk appetite (RAC), Cooperatives segments. including: 1. Decided that the quality of export-oriented B. Consumer: productive assets, valuation of residential During 2018 several adjustments were made to collateral within certain value should be the Policy regarding Retail products related to performed by Independent Appraisers (External external policies issued by regulators, government Appraisers), determined the Legal Lending Limit regulations, and business strategies that were in (LLL) to SOEs for tourism development purposes accordance with the risk levels defined by the Bank. and Exceptions to the LLL for Indonesian Export Financing Institutions that meet certain criteria. Work Program for 2019 2. Added the “Post Approval Credit Review” 1. Approve and evaluate credit strategies and policies. function in the Credit business unit and Risk 2. Oversee the implementation of credit policies Management business unit. to ensure the Bank’s compliance with the 3. Required Documents in the Loan Proposal, may management of credit policies and prevailing include the Company Registration Number or regulations. Business Registration Number. 3. Identify significant problems in adopting credit 4. Established that the Working Capital Credit policies and identify the impact on existing Bank Period under Certain Criteria could be set up to policies and strategies. 2 (two) Years. 4. Identify new regulations issued by regulators and 5. Reviewed Annual Sector Appetite Policy. the impact on the Bank’s internal policies. 6. Credit Program for Corporate Cards and Commercial Cards. 7. DA Holder & Policy Management, including Changes in the Board of Commissioners Term of Reference and NPL Credit Committee.

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CAPITAL MANAGEMENT & RECOVERY PLAN 4. To assess and select the most appropriate recovery COMMITTEE (CMRP) action, as well as communication channels based on events that trigger recovery conditions. Main Functions and Authorities CMRP is assigned with the main function and authority Committee Functions to direct and supervise risks arising from capital Functions related to capital management: management focusing on CIMB Niaga Bank, both on 1. Assessing market conditions and solutions/ individual and on a consolidated basis and to consider instruments related to capital management, for activation of recovery actions and communication example, more optimal funding sources, solutions plans in the event of possible breaches, or in the event to meet capital adequacy targets and others. of a breach in the Recovery Plan (RP) trigger. 2. Establishing and determining capital management policies, strategies and procedures in accordance Structure and Membership with the size, characteristics, business complexity, a) Members with voting rights and risk level of the Bank, and ensuring that the Chairman : President Director Bank always maintains an adequate capital level to Deputy Chairman 1 : Strategy and Finance anticipate the Bank’s risks. Director 3. Ensuring that the Bank’s strategic plan includes Deputy Chairman 2 : Risk Management Director capital management strategies that reflect capital Members: requirements, anticipate capital expenditures, 1. Treasury and Capital Market Director capital targets to be achieved, and expected capital 2. Consumer Banking Director resources. 3. Business Banking Director 4. Ensuring that capital management strategies, 4. Syariah Banking Director policies and procedures are thoroughly 5. Credit Director communicated and implemented (bankwide). 6. Compliance, Corporate Affairs and Legal 5. Reviewing and approving the Internal Capital Director Target (ICT) ratio limits, including the Trigger Ratio b) Members without voting rights which is the minimum level of capital that triggers 1. Head of Finance/ALM Finance Group Head the necessary follow-up measures. 2. Head of Wholesale Banking Credit/ALM Risk 6. Reviewing and approving the dividend payout ratio Group Head/Integrated Risk & BASEL PMO targets to ensure and balance the demands for safe Head capital adequacy and efficient capital structure. 3. Head of Funding & Gapping c) Invitation : Chief of Corporate Strategic Initiatives Functions related to Recovery Plan: Secretary : Head of Finance 1. Business-as-Usual (“BAU”) Conditions: a. Maintaining and updating the RPs framework, Committee Objective policies and processes, that consists of analysis 1. To establish, achieve and maintain sound and of key business lines, critical economic functions, optimal capital targets, and an efficient capital business linkages, RP stress tests, RP triggers, structure for the Bank. and recovery options, at least once a year. 2. To ensure the diversification of capital resources. b. Resubmitting the revised RP documents to the 3. To efficiently allocate capital among operational Board of Commissioners, the Board of Directors, entities and business units, in line with the Bank’s shareholders, and regulators to obtain the long-term business strategy and relevant capital relevant approvals, should there be changes returns. that require approval.

538 Annual Report 2018 PT Bank CIMB Niaga Tbk Supporting Corporate Governance Corporate Social Others Consolidated Business Review Report Responsibility Corporate Data Financial Report

c. Obtaining current level information from e. Providing directions related to the RP execution Early Warning Indicators (EWI) and recovery based on the selected recovery options disclosed indicators that have been prepared regularly in the BAU phase. from business units and supporting units. EWI f. Determining the involvement of business serves as a sign of potential breaches of recovery units and supporting units in supporting the indicators. “Recovery Stage”. d. Declaring and activating the “Recovery Stage” g. Activating the RP communication strategy. when the recovery indicator is exceeded. h. Activating the Non-Credit Discretionary Powers e. Determining any prevalent technical reasons for unbudgeted recovery cost utilization. that affect triggering the RP and involve management in the formal activation of the Meetings, Quorum and Resolutions “Recovery Stage”. 1. Meetings are held at least 4 (four) times a year. f. Providing direction, checking, and approving 2. Quorum attendances must be more than 2/3 (two the RP prior to submission to regulators and thirds) of the total number of Committee members. parent company. 3. Quorum decisions require approval from more g. Establishing the RP trigger. than 2/3 (two thirds) of the attending Committee h. Deliberating all relevant strategies and shortlist members. preferred actions and strategies to be executed by the Bank in the Recovery Stage Work Realization in 2018 i. Approving the budget related to RP activities. 1. Approved a Dividend Payment Ratio for the 2017 j. Performing a dry run on an annual basis to fiscal year at 20% or Rp596 billion. ensure that governance and communication 2. Approved a Dividend Policy for the Bank. structures could be executed during the 3. Approved the limit changes for the EXCO recovery phase. parameters. k. Validating infrastructure readiness to support 4. Determined the ICT level and Trigger Ratio for 2019. the recovery options after the “Recovery Stage” i. As a comprehensive form of capital supervision, declaration. the fulfilment of ICT against actual capital is also 2. Conditions at the time of RP activation: monitored by RMC on a monthly basis. a. Receiving notifications from management ii. ICT Determination includes the minimum committees/business units and supporting provisions according to the Bank’s risk profile, units when the recovery indicators are exceeded the provisions in new regulations that affect and declare the “Recovery Stage” activation. minimum capital including capital buffers, stress b. Notifying the Board of Directors, Board of test simulations, business growth projections, Commissioners, shareholders, and related and significant events or transactions that will regulators when the recovery indicator trigger occur in 2019. is exceeded. 5. Provided endorsement of the Bank’s corporate c. Notifying other relevant committees (case action plan for 2019 that has an impact on the by case) including the Crisis Management utilization of Bank capital. Committee and Funding Crisis Management 6. Approved and provided directions related to the Team (FCMT) that the recovery indicator trigger Risk Weight Asset (RWA) Optimization project has been triggered and support will be required. initiatives for 2018. d. Discussing and approving the recovery options and strategies with assistance from the Management Committee.

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Board of Directors Committees

7. Approved the Capital Management Policy revision including the additional chapter on Integrated Capital Management and the changes in CMRPC responsibilities regarding the recovery plan. 8. Approved the Corporate Action to issue subordinated bonds with capital characteristic in 2018 as one of the fulfilments of OJK Regulation No. 14/POJK.03/2017 concerning the Bank’s Recovery Plan. 9. Approved the revision/updates of the Bank’s Recovery Plan for submission to regulators and parent company.

Work Program for 2019 1. Decide on the minimum annual Capital Adequacy Ratio (CAR), known as Internal Capital Target (ICT) and Trigger Ratio, as the capital limit for triggering the follow-up to capital fulfilment. 2. Identify and review significant events/transactions to be preformed by the Bank and identify the impact on the Bank’s capital. 3. Identify new regulations from regulators and the impact on the Bank’s capital. 4. Decide/approve new policies related to capital. 5. Decide/approve the Bank’s Recovery Plan prior to submission to regulators and parent company. 6. Re-monitor the optimization of RWA and capital. 7. Decide/approve the proposed dividend distribution to shareholders.

Frequency and Attendance of Board of Directors in Executive Meetings in 2018

Frequency and Attendance Rate No. Name RMC ALCO**) ITSC***) ORC CPC CMRP

1. Tigor M. Siahaan 17 23 4 10 12 5

2. Rita Mas’Oen 17 0 5 11 11 2

3. Megawati Sutanto 16 0 4 9 12 1

4. Vera Handajani 15 13 5 11 11 5

5. John Simon 17 27 4 11 10 5

6. Lani Darmawan 16 13 4 9 10 4

7. Pandji P. Djajanegara 17 23 3 10 11 4

8. Hedy Lapian 18 21 4 11 10 2

9. Fransiska Oei 18 0 5 11 11 2

10. Rahardja Alimhamzah 16 25 4 11 11 5

11. Wan Razly Abdullah*) 15 23 4 10 11 5

Meeting Frequency 18 32 5 11 12 5

Minimum Meeting Frequency based on TOR 10 12 4 10 10 4

*) Resigned as a Director effective on 1 January 2019 **) The quorum of the meetings and the decision-making quorum is delegated to at least 2 (two) out o 3 (three) members of the Board of Directors as follows: i. Chairman: President Director ii. Deputy Chairman 1: Strategy and Finance Director iii. Deputy Chairman 2: Treasury and Capital Market Director ***) ITSC Meeting in 2018 are always held with adequate quorum attendance

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Corporate Secretary

CORPORATE SECRETARY PROFILE Appointed as the Corporate Secretary of PT Bank CIMB Niaga Tbk and is domiciled in Jakarta, Indonesia.

The complete profile is available in the Profile of Board of Directors.

LEGAL BASIS The legal references for the appointment of Fransiska Oei as Corporate Secretary is based on Circular Decision Letter of the Board of Directors of PT Bank CIMB Niaga Tbk. No. 001/SIR/DIR/ IX/2016 dated 21 September 2016 to comply with FSA Regulation No. 35/POJK.04/2014 dated 8 December 2014 and Indonesian Stock Exchange Regulation No. I-A dated 20 January 2014 and its Fransiska Oei amendment. The appointment was reported to the OJK (both OJK Corporate Secretary Banking Supervisory and OJK-NBFI) on 23 September 2016 and was announced to the public through the IDXNet website (e-reporting) at the same day.

TERM OF OFFICE Fransiska Oei has served as Corporate Secretary effective since 26 September 2016 up to the present.

Organizational Structure of Corporate Secretary

Corporate Secretary Fransiska Oei

Corporate Affairs Community Development

DUTIES AND RESPONSIBILITIES CIMB Niaga Corporate Secretary Duties and responsibilities include: 1. Following the development of the prevailing rules and regulations in the Capital Market. 2. Providing input to the Board of Directors and Board of Commissioners to comply with Capital Market regulations issued by the OJK, IDX and other Regulators pertaining to the Capital Market. 3. Organizing and documenting the General Meeting of Shareholders and Public Expose organized by the Bank. 4. Organizing and attending Board of Commissioners meetings, Board of Commissioners meetings inviting the Board of Directors, Committees under the Board of Commissioners meetings, as well as preparing and administering the minutes of the meetings. 5. Organizing and attending Board of Directors meetings, Board of Directors meetings inviting the Board of Commissioners, Committees under the Board of Directors meetings, as well as preparing and administering the minutes of the meetings. 6. Submitting reports related to Capital Market regulations, either regular or ad-hoc reports, to OJK and IDX, in a timely manner. 7. Performing disclosure of information to the public in accordance with all prevailing rules and regulations. 8. Improving and aligning all Corporate Governance implementation practices of the Bank in line with the OJK principles and the ASEAN Corporate Governance Scorecard.

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Corporate Secretary

9. Preparing documents and assisting the Fit and Proper Test process for candidates of Board of Commissioners and/or Board of Directors. 10. Conducting orientation programs for new members of the Board of Directors and/or Board of Commissioners to provide knowledge and understanding of the Bank. 11. Administering all original documents of the Bank including licenses, deeds, certificates, minutes of meetings and internal policies. 12. Administering and distributing all incoming letters addressed to the Bank for follow-up. 13. Acting as liaison officer between the Bank and its shareholders, investors, authorities and other stakeholders.

CORPORATE SECRETARY TRAINING IN 2018 To improve their knowledge and understanding and to support the implementation of their duties and responsibilities, throughout 2018, the Corporate Secretary attended the following training programs/seminars/ workshops:

No. Training/Seminar/Workshop/Knowledge Sharing Organizer Date & Venue

1. Risk Management Certification Refreshment Program CIMB Niaga 2 March 2018 Jakarta

2. ASEAN Corporate Governance Scorecard Sharing Session CIMB Niaga 24 April 2018 Jakarta

3. Seminar on Prospects for Dispute Resolution through Alternative Institute for 30 April 2018 LAPSPI and Legal Standing of LAPSPI Arbitration Indonesian Banking Dispute Bogor, West Java Resolution (LAPSPI)

4. Perbanas Seminar ‘Managing Climate Related Risk, Indonesian Banks Association 4 May 2018 Capturing Sustainable Rinance Opportunities’ (Perbanas) Jakarta

5. Financial Technology Workshop: Understanding the CIMB Niaga 9 May 2018 regulation of Financial Technology Jakarta

6. Speaker: Beyond 2018 Conversation CIMB Niaga 17 May 2018 Jakarta

7. Sharing Session : Collateral CIMB Niaga 6 June 2018 Jakarta

8. Implementation of Sustainable Finance Training CIMB Niaga 26 June 2018 Jakarta

9. Breakfast Session Sustainable Finance National Center for Sustainability 28 August 2018 Reporting (NCSR) Jakarta

10. Legal Forum CIMB Niaga 13 September 2018 Jakarta

11. Facilitator: SESPI Bank Program – Compliance & Indonesia Banking Development 19 September 2018 Management Control Overview Institute (IBDI) Jakarta

12. Socialization of Commercial Banks Provisions OJK 28 September 2018 Jakarta

13. RCU Leadership Motivational Session CIMB Niaga 10 October 2018 Jakarta

14. Year End Senior Leader Meeting CIMB Niaga 18 – 20 October 2018 Banyuwangi, East Jawa

15. Annual Workshop Directorate CCAL CIMB Niaga 2 – 3 November 2018 Bali

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CORPORATE SECRETARY IMPLEMENTATION OF d. IDX Regulation No. I-A Kep-00183/BEI/12-2018 DUTIES IN 2018 regarding the Amendment to Regulation No. In 2018, the Corporate Secretary performed the I-A regarding the Listing of Shares and Equity following duties and responsibilities in accordance Based Securities Issued by Listed Companies. with its mandated functions: 4. Collaborated with the Investor Relations Team to 1. Organized the GMS (both Annual and Extraordinary) organize a Public Expose on 15 October 2018, and in 2018 with each shareholder using an electronic regularly communicated each quarter with investors (e-voting) and individual voting mechanism. The and analysts through Analyst Presentations, which e-voting mechanism ensured the voting process were both in person and through conference calls. was implemented well, in terms of confidentiality, 5. Organized the Board of Commissioners meetings speed, accuracy, and protection of the rights of the at least once every 2 (two) months, Board of shareholders. E-Voting was conducted through the Commissioners meetings inviting the Board of following media: Directors once every 4 (four) months, Committees a. touch screen monitors, provided by the Bank at under the Board of Commissioners meetings, as the Annual GMS on 24 April 2018; and well as prepared and administered the minutes of b. smartphones owned by each shareholder at the the meetings. Extraordinary GMS on 19 December 2018. 6. Organized and attended the Board of Directors The Bank became the first Public Company in meetings at least once a month and the Board Indonesia to hold electronic voting (e-Voting). of Directors meetings inviting the Board of 2. Revamped the Bank’s website, particularly for Commissioners once every 4 (four) months, GCG and Investor Relations disclosure, to further prepared the minutes of the meetings, as well as improve the quality and ease of access to the Bank’s organized and attended the Executive Committee information disclosure by all stakeholders. meetings of Board of Directors. 3. Kept abreast of developments in the Capital Market, 7. Submitted regular and ad-hoc reports to the particularly the prevailing rules and regulations, regulators based on prevailing rules and regulations. ensured compliance with new regulations issued 8. Provided disclosure of information to the public in by OJK, IDX, and other Regulators related to the accordance with prevailing regulations. Capital Market and conveyed this information and 9. Administered, distributed and prepared follow-ups provided input to the Board of Directors and Board regarding incoming mail received by the Bank and of Commissioners, including: addressed to the Board of Directors and Board of a. OJK Regulation No. 7/POJK.04/2018 regarding Commissioners. In 2018, the Bank received 12,391 the Submission of Reports through Electronic letters addressed to the Board of Directors and/ Reporting System for the Issuers or Public or Board of Commissioners, from OJK Banking Companies. Supervision, OJK-NBFI, Bank Indonesia, Indonesian b. OJK Regulation No. 3/POJK.04/2018 regarding Financial Transaction Reporting and Analysis the Amendment to OJK Regulation No. 18/ Center (INTRAC), IDX, Indonesia Central Securities POJK.04/2015 regarding the Issuance and Depository (ICSD), Courts, State Police, Directorate Requirements of Sukuk. General of Taxes, c. OJK Regulation No. 51/POJK.03/2018 regarding 10. Prepared documentation and assisted in the the Implementation of Sustainable Finance Fit and Proper Test process for 1 (one) Board of for Financial Institutions, Issuers, and Public Directors candidate member, 1 (one) Board of Companies. Commissioners candidate member, and 1 (one) President Commissioner candidate.

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Corporate Secretary

11. Provided an orientation program for the Board of Commissioners and Board of Directors candidate members. 12. Updated/adjusted the Corporate Policy Manual, Sharia Supervisory Board Charter, Audit Committee Charter, Internal Audit Charter, and the Integrated Governance Committee Charter in accordance with the prevailing laws and regulations as well as Good Corporate Governance practices

DISCLOSURE OF INFORMATION in 2018 In 2018, the Corporate Secretary conveyed information to the public through the mass media, IDX and CIMB Niaga’s website in bahasa Indonesia and English, as well as submitted regular and ad-hoc reports to IDX and OJK as follows:

Regular Reports

Type of Report To Reporting Period Total

Monthly Report of Securities Holder Register of BNGA IDX Monthly 12

Consolidated Financial Statements of the Bank and its Subsidiaries OJK & IDX Quarterly 4

Annual Report OJK & IDX Annually 1

Annual Rating Report OJK & IDX Annually 2

Report of Foreign Currency Debt OJK Monthly 12

Financial Statements of Ultimate Shareholders OJK Semi-annually 2

Annual Report of Ultimate Shareholders OJK Annually 1

Related Party Report OJK Semi-annually 2

Ad-hoc Reports Date Subject or Report 2 January 2018 Replacement of Share Registrar Bureau 3 January 2018 Disclosure of Information: Replacement of Share Registrar Bureau 10 January 2018 Disclosure of Information: Confirmation regarding Funds for the th5 Interest Payment of Shelf-Registered Bonds II of Bank CIMB Niaga Phase I, 2016 24 January 2018 Disclosure of Information: Confirmation regarding Funds for the st1 Interest Payment of Shelf-Registered Bonds II of Bank CIMB Niaga Phase III, 2017 24 January 2018 Disclosure of Information: Revision to the Confirmation regarding Funds for the th5 Interest Payment of Shelf- Registered Bonds II of Bank CIMB Niaga Phase I, 2016 (Correction) 6 February 2018 Disclosure of Information: Confirmation regarding Funds for the st1 Interest Payment of Shelf-Registered Bonds II of Bank CIMB Niaga Phase III, 2017 12 February 2018 Disclosure of Information: Confirmation regarding Funds for the nd2 Interest Payment of Shelf-Registered Bonds II of Bank CIMB Niaga Phase II, 2017 12 February 2018 Disclosure of Information: Confirmation regarding Funds for the 17th Interest Payment of Shelf-Registered Bonds I of Bank CIMB Niaga Phase II, 2013, Series C 13 February 2018 Disclosure of Information: Confirmation regarding Funds for the nd2 Interest Payment of Shelf-Registered Bonds II of Bank CIMB Niaga Phase II, 2017 13 February 2018 Disclosure of Information: Confirmation regarding Funds for the 17th Interest Payment of Shelf-Registered Bonds I of Bank CIMB Niaga Phase II, 2013, Series C 23 February 2018 Disclosure of Information: Implementation of the Managements Employee Stock Option Program (“MESOP”) of PT Bank CIMB Niaga (“Company”) 26 February 2018 Share Buy Back Report 26 February 2018 Disclosure of Information: Implementation of Share Buy Back of PT Bank CIMB Niaga Tbk 9 March 2018 Announcement of The Plan on Annual GMS 9 March 2018 Submission of Evidence of Publication of Annual GMS Notification

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Date Subject or Report 13 March 2018 Disclosure of Information: Confirmation regarding Funds for the 29th Interest Payment of Subordinated Bonds II of Bank CIMB Niaga, 2010, with Fixed Interest Rate 13 March 2018 Disclosure of Information: Establishment of New Subsidiaries or Associates 26 March 2018 Submission of Evidence of Publication of Summons for Annual GMS 24 April 2018 Disclosure of Information: Confirmation regarding Funds for the nd2 Interest Payment of Shelf-Registered Bonds II of Bank CIMB Niaga Phase III, 2017 25 April 2018 Submission of Evidence of Publication of Annual GMS Resolutions 25 April 2018 Submission of Evidence of Publication of Interim Financial Statements 25 April 2018 Submission of Interim Financial Statements 26 April 2018 Disclosure of Information: Confirmation regarding Funds for the nd2 Interest Payment of Shelf-Registered Bonds II of Bank CIMB Niaga Phase III, 2017 26 April 2018 Disclosure of Information: Revision to the Confirmation regarding Funds for the th6 Interest Payment of Shelf- Registered Bonds II of Bank CIMB Niaga Phase I, 2016 26 April 2018 Resolutions of the Annual General Meeting of Shareholders 27 April 2018 Disclosure of Information: Realization of Capital Investment in PT CIMB Niaga Sekuritas 30 April 2018 Disclosure of Information: Confirmation regarding Funds for the 18th Interest Payment of Shelf-Registered Bonds I of Bank CIMB Niaga Phase II, 2013, Series C 2 May 2018 Cash Dividend Schedule 7 May 2018 Disclosure of Information: Confirmation regarding Funds for the rd3 Interest Payment of Shelf-Registered Bonds II of Bank CIMB Niaga Phase II, 2017 6 June 2018 Disclosure of Information: Confirmation regarding Funds for the 30th Interest Payment of Subordinated Bonds II of Bank CIMB Niaga Phase II, 2010 8 June 2018 Disclosure of Information: Changes in the share ownership of a Public Company by the Board of Directors 28 June 2018 Disclosure of Information on Certain Shareholders 9 July 2018 Disclosure of Information: Confirmation regarding Funds for the th7 Interest Payment of Shelf-Registered Bonds II of Bank CIMB Niaga Phase I, 2016 9 July 2018 Disclosure of Information: Confirmation regarding Funds for the rd3 Interest Payment of Shelf-Registered Bonds II of Bank CIMB Niaga Phase III, 2017 19 July 2018 Disclosure of Information: Rating Monitoring Certificate regarding Shelf-Registered Bonds II of Bank CIMB Niaga, for the Period 10 July 2018 to 1 July 2019 30 July 2018 Disclosure of Information: Submission of Financial Statements of PT Bank CIMB Niaga Tbk (“Company”) as of 30 June 2018 31 July 2018 Disclosure of Information: Confirmation regarding Funds for the 19th Interest Payment of Shelf-Registered Bonds I of Bank CIMB Niaga Phase II, 2013, Series C 31 July 2018 Disclosure of Information: Confirmation regarding Funds for the Principal Payment Series C of Shelf-Registered Bonds I of Bank CIMB Niaga Phase II, 2013 3 August 2018 Disclosure of Information: Confirmation regarding Funds for the 4th Interest Payment of Shelf-Registered Bonds II of Bank CIMB Niaga Phase II, 2017, Series B and C 15 August 2018 Submission of Evidence of Publication of Interim Financial Statements 15 August 2018 Submission of Evidence of Publication of Interim Financial Statements 31 August 2018 Maturity of Corporate Bonds/Sukuk of PT Bank CIMB Niaga Tbk 1 September 2018 Disclosure of Information: Confirmation regarding Funds for the 31st Interest Payment of Subordinated Bonds II of Bank CIMB Niaga, 2010, with a Fixed Interest Rate 3 September 2018 Information: Additional Information Summary of Shelf-Registered Bonds II of Bank CIMB Niaga Phase IV, 2018 19 September 2018 Disclosure of Information: Additional Information Summary of Proceeds of Shelf-Registered Bonds II of Bank CIMB Niaga Phase IV, 2018 20 September 2018 Initial Recording Of Corporate Bonds/Sukuk 21 September 2018 Disclosure of Information: Issuance of Shelf-Registered Bonds II of Bank CIMB Niaga Phase IV, 2018 28 September 2018 Annual Public Expose Plan 10 October 2018 Submission of Annual Public Expose Materials

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Corporate Secretary

Date Subject or Report 11 October 2018 Disclosure of Information: Confirmation regarding Funds for the 4th Interest Payment of Shelf-Registered Bonds II of Bank CIMB Niaga Phase III, 2017, Series B and C 11 October 2018 Disclosure of Information: Confirmation regarding Funds for the Principal Payment Series A and the 4th Interest Payment of Shelf-Registered Bonds II Bank CIMB Niaga Phase III, 2017 12 October 2018 Disclosure of Information: Confirmation to Distibute the 8th Interest Payment of The Bank CIMB Niaga Shelf- Registration Bonds II Phase I Year 2016 12 October 2018 Disclosure of Information: Brief Prospectus of Shelf-Registered Sukuk Mudharabah I of Bank CIMB Niaga Phase I, 2018 and Subordinated Bonds III of Bank CIMB Niaga, 2018 16 October 2018 Submission of Other Evidence of Publication 17 October 2018 Report of Annual Public Expose Results 19 October 2018 Disclosure of Information: Resignation of the President Commissioner of PT Bank CIMB Niaga (“CIMB Niaga”) 19 October 2018 Disclosure of Information: Resignation of the President Commissioner of PT Bank CIMB Niaga (“CIMB Niaga”) (Correction) 25 October 2018 Notice of Extraordinary General Meeting of Shareholders Plan 29 October 2018 Disclosure of Information: Total Proceeds from Public Offering of Shelf-Registered Bonds II of Bank CIMB Niaga 31 October 2018 Submission of Unaudited Interim Financial Statements 31 October 2018 Submission of Evidence of Publication of Interim Financial Statements 2 November 2018 Submission of Evidence of Publication of Extraordinary GMS Notice 9 November 2018 Maturity of Corporate Bonds/Sukuk of PT Bank CIMB Niaga Tbk 12 November 2018 Submission of Other Evidence of Publication 12 November 2018 Disclosure of Information: Additional Information and/or Improvement of Brief Prospectus 13 November 2018 Disclosure of Information: Resignation of Commissioner of PT Bank CIMB Niaga Tbk (“CIMB Niaga”) 14 November 2018 Disclosure of Information: Announcement of settlement of Shelf-Registered Bonds II Phase III, 2017, Series A (“Bonds”) 14 November 2018 Additional Information and/or Improvement of the Brief Prospectus of Sukuk Mudharabah I of Bank CIMB Niaga Phase I, 2018 and Subordinated Bonds III of Bank CIMB Niaga, 2018 15 November 2018 Initial Recording of Corporate Bonds/Sukuk 16 November 2018 Disclosure of Information: Resignation of Director of PT Bank CIMB Niaga Tbk (“CIMB Niaga”) 19 November 2018 Submission of Evidence of Publication of Summons for Extraordinary GMS 19 November 2018 Disclosure of Information: Issuance of Shelf-Registered Sukuk I Phase I and Subordinated Bonds III of Bank CIMB Niaga, 2018 19 November 2018 Maturity of Corporate Bonds/Sukuk of PT Bank CIMB Niaga Tbk 19 November 2018 Clarification of News in the Mass Media 21 November 2018 Disclosure of Information: Material Facts and Information for the settlement of Shelf-Registered Bonds I of Bank Niaga Phase II, 2013 Series C 28 November 2018 Disclosure of Information: Confirmation regarding Funds for the 32nd Interest Payment of Subordinated Bonds II of Bank CIMB Niaga, 2010, with a Fixed Interest Rate 28 November 2018 Disclosure of Information: Confirmation regarding Funds for the st1 Interest Payment of Shelf-Registered Bonds II of Bank CIMB Niaga Phase IV, 2018 29 November 2018 Disclosure of Information: Confirmation regarding Funds for the st1 Interest Payment of Shelf-Registered Bonds II of Bank CIMB Niaga Phase IV, 2018 20 December 2018 Submission of Evidence of Publication of Extraordinary GMS Resolutions 20 December 2018 Disclosure of Information: Changes to the Composition of the Audit Committee of PT Bank CIMB Niaga Tbk 20 December 2018 Extraordinary General Meeting of Shareholders Resolutions

546 Annual Report 2018 PT Bank CIMB Niaga Tbk Supporting Corporate Governance Corporate Social Others Consolidated Business Review Report Responsibility Corporate Data Financial Report

Compliance Unit

PROFILE OF COMPLIANCE UNIT HEAD c. Identifying, Measuring, Monitoring and Controlling Compliance Risk in accordance with the requirements for Risk Management implementation in Commercial Bank and Sharia Business Unit (UUS). d. Assessing and evaluating the effectiveness, adequacy and conformity of CIMB Niaga’s policies, guidelines, systems and procedures based on the regulatory requirements. In addition, the Unit also reviews compliance aspects in the other working units. e. Conducting review and providing recommendations Liston Siahaan for updating and refining current policies, Indonesian citizen, 50 years old. guidelines, systems and procedures of the Bank in accordance with the requirements from authorities, Currently serving as the Head of Compliance including Sharia Principles for UUS. Management since 1 November 2013 based on Board f. Acting as the Bank liaison officer when dealing of Directors’ Decree No.253/HRPA/HRS/XI/2013 dated with the regulators, particularly regarding the 1 November 2013. Previously he served as the Head implementation of compliance and regulatory of Bank Niaga Risk Management Division Group and audit. worked at the National Bank Restructuring Agency g. Reporting the implementation of CIMB Niaga’s and PT Pefindo. He obtained his Bachelor’s degree Compliance Function and compliance status to from Institut Teknologi Bandung in 1992 and Master’s the Board of Directors and Board of Commissioners degree in Management from Prasetya Mulya Business through the Compliance Director. School, Jakarta in 1996. h. Providing input/clarification regarding questions from business units related to the implementation COMPLIANCE UNIT DUTIES AND RESPONSIBILITIES of BI/OJK regulations. a. Establishing compliance policies and procedures i. Preparing training/socialization programs and performing periodic reviews or updates. regarding external regulations for business/ b. Establishing a compliance program to support working units in the Bank. the development of a Compliance Culture in all of the Bank’s business activities at every level of the Performing other tasks related to the Compliance organization. Function.

Compliance Unit Organizational Structure

Compliance Director

Head of Compliance Management

Credit Compliance Non-Credit Compliance Quality Advisory Compliance Advisory Assurance

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Compliance Unit

COMPLIANCE PRINCIPLE COMPLIANCE FRAMEWORK AND WORK PLAN FOR CIMB Niaga is committed to implementing 2018 compliance aspects and functions for compliance risk The Compliance Work Plan in 2018 covered 4 pillars in management in every business activity and operation the Compliance Framework which were: as stipulated in the following regulations: • No.55/POJK.03/2016 concerning Governance 1. Regulatory Socialization Program Implementation in Commercial Banks. • Update the database of banking regulations • No.46/POJK.03/2017 concerning Implementation of and other related guidelines. Compliance Function in Commercial Banks. • Socialize and hold training related to external • No.4/POJK.03/2016 concerning Risk-based Bank regulations. The socialization and training Rating Assessment for Commercial Banks. activities to be conducted through face to • No.18/POJK.03/2014 concerning Implementation face (in-class training) and other electronic of Integrated Governance for Financial communication media. Conglomerates. 2. Compliance Test Program The banking industry is a highly regulated industry • Compliance Testing for new products/activity as it holds license to manage public funds custody. plans and new or changed policies/procedures. Therefore, Compliance Risk management in banking • Advisory, including recommendations/opinions plays a very important role particularly during from the Compliance Unit in response to the rapidly changing innovations in Information requests for advice from the other business/ Technology and the digitalization of the financial working units related to compliance aspects in industry, with its high pace of development. The the Bank’s activities. Compliance Function serves as one of the key factors in the implementation of Governance and CIMB 3. Compliance Monitoring Program Niaga is committed to complying with the laws and • Improvements to the RCU framework and RCU regulations, through its compliance risk management competency through discussion and training. based on the following compliance principles: • The RCU to submit self-assessment results 1. Compliance starts at the top; concerning compliance implementation using 2. Compliance is the responsibility of all parties; RCSA/CM tool to SKK. 3. Compliance is conducted to comply with laws and • SKK to review the RCSA/CM self-assessment regulations; report results, and check the compliance 4. Compliance is implemented with competence and implementation in the business/working units. integrity in accordance with its responsibility; • Monitor the follow-up of the Bank’s commitment 5. Oriented to stakeholders; to the authorities. 6. Dedicated to the Bank; and • Monitor the compliance status of CIMB 7. Oriented to problem solving. Indonesia Financial Conglomerate members.

COMPLIANCE FUNCTION 4. Programs and Activities in the Compliance The Bank has established a Compliance Unit (SKK) Status Report as an independent unit that directly reports to the • Submit periodic Compliance Reports to the Director supervising the Compliance Function. The Board of Directors, Board of Commissioners and SKK is responsible for implementing the Compliance regulators. Function to support the Compliance Culture. The • Submit Integrated Compliance reports SKK is also responsible for ensuring that the policies, concerning the compliance implementation in guidelines, systems and procedures, as well as business the CIMB Indonesia Financial Conglomerate. activities performed by the Bank are in accordance with the requirements.

548 Annual Report 2018 PT Bank CIMB Niaga Tbk Supporting Corporate Governance Corporate Social Others Consolidated Business Review Report Responsibility Corporate Data Financial Report

COMPLIANCE ACTIVITIES THROUGHOUT 2018 • Regulatory Audit Follow Up Module to The SKK activities for the Compliance programs during monitor compliance with regulatory audit 2018 were as follows: commitments. • Regulatory Data Request Module to monitor a. Training and Regulation Socialization compliance with requests from regulators. (Compliance Awareness Program) • New Regulation Follow Up Module to monitor SKK conducted regulations socialization, and also follow-up compliance concerning new administered and updated the banking regulation regulations. database in the Bank’s internal web-based system, • Periodic Off-Line Report Module to monitor the and e-manual. Socialization was conducted completion of off-line periodic reports. using in-class training and electronic-based communication media. In addition to socializing d. Compliance Monitoring the new regulations, SKK also conducted several SKK monitored the implementation of compliance other initiatives to enhance compliance awareness, in business units through its own RCSA (Risk including: Control Self-Assessment) performed by each RCU/ • Workshops on Financial Technology with DCORO (Risk Control Unit/Designated Compliance regulators and customers. & Operational Risk Officer) as well as the results • RCU Forums. from other independent units (including the • RECOM System Training. Internal Audit unit, and Risk Management unit) • Compliance Certification. and the examination results from the regulator. • Bi-Weekly Meeting Compliance Advisory. e. Compliance Reviews/Validations b. Compliance Testing and Advisory SKK also conducted reviews/validations of the SKK conducted compliance testing on the internal compliance implementation in business units. policies and new products and/or activities in The reviews/validations were conducted to order to comply with the regulatory requirements. verify whether the business units conducted SKK provided opinions/advice to business units the RCSA assessments, and whether there were regarding the prudential principles and compliance any compliance issues in the business units. In with external regulations. SKK also conducted RCSA addition, SKK conducted compliance reviews on workshops that served as a self-assessment tool the RCSA’s own assessments in the business units, for business units in monitoring the effectiveness SKK reviewed the compliance in 33 business units of Internal Controls in each business/working unit. throughout 2018. In addition, SKK also conducted a Compliance Management Services Survey for internal and f. Supervision by Regulators external parties. The SKK is in charge of coordinating the regulator’s audit activities at CIMB Niaga. During 2018, SKK c. Established the ReCoM System coordinated audit activities by the OJK Supervisor ReCoM stands for Regulatory Commitment for the Bank, Sharia and Capital Market. In addition, Monitoring, a system application designed to CIMB Niaga’s SKK was periodically audited by record and monitor compliance commitments and regulators (OJK and BNM) and by Internal Audit. the follow-up actions for reporting to regulators in In 2018 there were no regulator audit findings all bank units (bank-wide). The ReCOM application regarding the Compliance unit, while the Internal consists of 4 modules, which are: Audit recommendations have been followed up by SKK.

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Compliance Unit

g. Compliance Report SKK submits compliance reports and compliance activities to internal parties and authorities in accordance with the regulations.

Compliance Activities 2018

Socialization of Regulations by SKK 108 new regulations disseminated

(In-Class) Training by SKK 1,614 training participants

LoG (e-Learning) Compliance Modules 12,021 LoG participants

Compliance Test by SKK 444 policies and products tested

COMPLIANCE COMMITMENT TO AUTHORITIES respectively, meeting the regulatory minimum The SKK monitors and ensures CIMB Niaga’s limit of 3.5% and 6.5%. compliance with the commitments made to the 5. Minimum Foreign Exchange Statutory Reserve regulators. During 2018, CIMB Niaga fulfilled its for Daily and Average was 8.14%, meeting the commitments to the regulator. For the implementation regulatory minimum limit of 8%. of compliance monitoring, CIMB Niaga was supported 6. Liquidity Coverage Ratio (LCR) was 117.67%, meeting by the Regulatory Commitment Monitoring (ReCoM) the regulatory minimum limit of 100%. application system. 7. Net Stable Funding Ratio (NSFR) was 105.63%, meeting the regulatory minimum limit of 100%. COMPLIANCE INDICATORS FOR 2018 8. Net Open Position (on and off-balance sheet) was 1. Minimum Capital Adequacy Ratio/CAR (for Credit 1.20%, meeting the regulatory maximum limit of Risk, Market Risk and Operational Risk) was 19.21%, 20%. meeting the regulatory minimum limit. 9. The commitment to follow-up the regulator’s audit 2. There was no breach/violation for Legal Lending results was completed in accordance with the Limit (LLL) requirements. target dates. 3. Net Non-Performing Loan (NPL) was 1.55%, meeting the regulatory maximum limit of 5%. (ratios are based on unaudited internal figures) 4. Minimum Rupiah Statutory Reserve for Daily and Daily + Average positions was 4.39% and 6.70%, In 2018, there were no violations of the compliance indicators by the Bank.

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Internal Audit (IA)

Internal Audit function at CIMB Niaga is performed work, independence and objectivity, professionalism, by the Internal Audit (IA) Unit. As the third line of impartiality, rights & obligations for the Head of Internal defence, IA’s main duties are to ensure that the Bank’s Audit (Chief Audit Executive) and IA code of conduct. management and operations are in compliance with all prevailing rules and regulations and support the The Internal Audit Charter regulates the audits and Bank’s interests and objectives. IA is also responsible contains guidelines to ensure: for ensuring the adequacy and proper implementation 1. Risks have been properly identified and managed. of the internal control process. 2. Interactions with various governance groups have been well managed. IA’s role is to provide independent and objective 3. Key financial, managerial and operational assurances and consulting services that will add value information is accurate, reliable and timely. and improve the Bank’s operations. IA assists the Bank 4. Employee actions are in accordance with all in achieving its objectives by evaluating and improving prevailing policies, rules and regulations. the effectiveness of Risk Management, Internal Control, 5. Resources are economically acquired and efficiently and Governance Processes. utilized as well as adequately protected. 6. Programs, plans and goals are properly achieved. During 2018, IA continually developed innovations 7. The concept of quality and continuous improvement required in the banking industry, and used has been embedded in CIMB Niaga’s control methodologies to improve the audit process and make processes. it more effective and efficient. 8. Regulations with a significant impact on CIMB Niaga are properly acknowledged and addressed. INTERNAL AUDIT CHARTER 9. Opportunities to improve CIMB Niaga’s The Internal Audit Charter was established in management, profitability, and reputation are compliance with POJK No. 56/POJK.04/2015 regarding identified and disclosed throughout the audit. the Establishment and Guidelines for the Internal Audit Unit Charter, POJK No. 18/POJK.03/2014 dated CHIEF AUDIT EXECUTIVE APPOINTMENT 18 November 2014 regarding the Implementation of IA is led by a Chief Audit Executive (CAE) who was Integrated Governance for Financial Conglomerates, appointed by the President Director based on an Audit and Bank Indonesia Regulation No.1/6/PBI/1999 Committee recommendation with approval from the dated 20 September 1999 regarding Assignment of a Board of Commissioners that became effective on 3 Compliance Director and Implementation of Internal January 2017 based on Decision Letter No.024/HROB/ Audit Function Standards for Commercial Banks HRS/XII/2016. The appointment of the Chief Audit (SPFAIB), as well as best practices that refer to the Executive has been reported to BI and OJK, through IPPF (International Professional Practice Framework) Letter No.008/DIR/XII/2016 dated 19 December 2016. standards from the IIA (The Institute for Internal As an independent control unit, IA reports directly to Auditors). the President Director and in a matrix to the Board of Commissioners through the Audit Committee. The Internal Audit Charter is reviewed and updated periodically based on the organization’s needs. The The President Director, with approval from the Board most recent review and update was on 26 October 2018, of Commissioners, based on an Audit Committee and was approved by the President Director and the recommendation, also has the authority to dismiss Board of Commissioners. The Internal Audit Charter is the Chief Audit Executive if the individual is deemed a guideline for IA containing the basic principles for IA unable to perform their duties in accordance with their professional practices, vision and mission, objectives, responsibilities. authorities, responsibilities, functions and scope of

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Internal Audit (IA)

CHIEF AUDIT EXECUTIVE PROFILE Work Experience: 1. Started his career as an Auditor at Public Acoounting Firm Coopers & Lybrand, KPMG and Ernst & Young 2. Head of Internal Audit at ABN Amro Bank Indonesia, Barclays Indonesia, Bank Internasional Indonesia 3. Audit Director at Citibank

Certifications: 1. Certified Internal Auditor (CIA), 2. Certified Anti Money Laundering Specialist (CAMS) 3. Risk Management Certification - Level 4 Antonius Pramana Gunadi Chief Audit Executive Training in 2018: Job Evaluation, Executive Program Planning Session – Age: 44 Years Sharia Banking & BT18 Workshop, Common Reporting Citizen: Indonesian Standard Workshop, 2018 IBEX Seminar. Education: Bachelor’s degree in Accounting from Universitas Tarumanagara in 1996

IA STRUCTURE AND POSITION In accordance with PBI No.1/6/PBI/1999 dated 20 September 1999 regarding the Assignment of a Compliance Director and Implementation of Internal Audit Standards for Commercial Banks, and POJK No. 56/POJK.04/2015, IA’s position in the Bank’s organizational structure is as follows:

President Director Audit Committee

Chief Audit Executive

Wholesale & Operations & Head Office Professional Credit Audit IT Audit Risk Audit Syariah Audit Audit Practices

IA DUTIES AND RESPONSIBILITIES In accordance with the Internal Audit Charter, the duties and responsibilities of CIMB Niaga’s IA are as follows: 1. Developing an annual audit plan based on a risk-based methodology and submitting the annual audit plans to the Board of Directors and the Board of Commissioners through the Audit Committee for approval. 2. Implementing the approved annual audit plan, including any special tasks or projects requested by the Board of Directors or the Board of Commissioners through the Audit Committee. 3. Ensuring the availability of a sufficient number of audit staff with adequate knowledge, expertise, and experience and certified professionals to conduct the audits.

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4. Conducting audit activities and assessing the 16. Reporting specifically to OJK any IA findings efficiency and effectiveness of Finance, Accounting, that could significantly disrupt the business Operations, Human Resources, Marketing, sustainability of CIMB Niaga. 5. Preparing the audit reports and submitting the 17. Reporting to OJK any external audit results reports to the audited parties, with a copy to the that disclosed an opinion on IA’s performance President Director, Compliance Director and and compliance with SPFAIB and any room for other relevant units including to the Board of improvements. Commissioners through the Audit Committee. 18. In terms of Integrated Governance implementation, 6. Periodically reporting to the Board of Directors and the role of CIMB Niaga as the Primary Entity and the Board of Commissioners through the with an already established Internal Audit Unit, the Audit Committee the objectives, authorities, and implementation of Integrated IA duties is carried by responsibilities, and the performance of IA activities the existing IA, with the following responsibilities: compared to the plan. Reporting also includes a. Performing audits of financial service significant risk exposure and control issues. institutions on an individual entity basis, on a 7. Preparing bi-annual reports regarding collective basis, or based on reports from the implementation of the key points of audit results financial services institution IA. to the Financial Services Authority, no later than 2 b. Monitoring and evaluating the implementation months after the end of the period. of Integrated IA in each member of CIMB 8. Reporting all significant findings that arise, to the Indonesia Financial Conglomerate; coordinating Board of Directors and the Board of Commissioners with the IAs of the CIMB Indonesia Financial through the Audit Committee. Conglomerate members based on functions; 9. Following up on audit findings and and compiling the results of the Integrated recommendations. All significant audit findings will IA from each member of the CIMB Indonesia remain “unfinished” until the findings are resolved. Financial Conglomerate. 10. Informing the status of corrective actions regarding c. Preparing and submitting a performance report audit findings and recommendations from the covering the roles and responsibilities of the audit results to the Board of Directors and the Board Integrated IA to the assigned Director. of Commissioners through the Audit Committee. 11. Informing the Anti-Fraud Management unit of any AUDITOR’S CODE OF CONDUCT fraud indications identified by Internal Audit. In performing its duties, the Chief Audit Executive (CAE) 12. Preparing criteria for the IA performance and target and all IA employees must adhere to the Bank’s Code achievement assessments. of Ethics and Conduct, and Bank CIMB Niaga Auditor’s 13. Creating and maintaining appropriate working Code of Conduct. CIMB Niaga Auditors’ Code of Conduct papers in accordance with the prevailing is prepared in accordance with and refers to the SPFAIB regulations. and IPPF Code of Conduct: 14. Implementing Quality Assurance and a. Integrity Improvement Programs (QAIP) covering all aspects Internal Audit integrity develops a sense of trust of Internal Audit activities. The QAIP includes an and thus provides a basis of confidence in the evaluation of Internal Audit compliance regarding assessments it provides. the definition of Internal Audit and Standards, as well as an evaluation of whether the auditors b. Objectivity have followed the code of conduct. The QAIP also Internal Audit must demonstrate high professional assesses the efficiency and effectiveness of Internal objectivity when collecting, evaluating, and Audit activities and identifies opportunities for communicating information regarding the improvement. activities or processes being audited. Internal 15. Delivering Quality Assurance and Improvement Auditor conducts a balanced assessment regarding Programs regarding Internal Audit activities. all existing relevant facts without influenced by their own or others interests.

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Internal Audit (IA)

c. Confidentiality Internal Audit Group at CIMB Group with the objective Internal Audit maintains the confidentiality of benchmarking and knowledge sharing regarding of information received and is not authorized best audit practices performed in each country. to disclose it without clear authority, except in accordance with the Bank’s Policy related to In addition, Internal Audit is also required to obtain providing information/data/documents to outside Internal Audit professional certifications, including parties. becoming Qualified Internal Auditors (QIA). Other professional certification programs attended included d. Compentency Certified Internal Auditors (CIAs), Certified Risk The Internal Audit applies the knowledge, skills, Management Assurance (CRMA), Certified Information and experience needed to provide IA services. Systems Auditors (CISA) and Certified Ethical Hackers (CEH), with the number of certifications held being: IA HUMAN RESOURCES AND PROFESSIONAL National Certification CERTIFICATION The number of Internal Auditor personnel in the IA was 118 people in 2018, including the Chief Audit Executive. 50 44 44 Internal Audit constantly improves the auditors’ expertise and competence by enrolling them in various training programs, seminars, and workshops, both domestically and overseas. One such effort to improve auditor’s competency both in terms of audit 6 skills, Risk Management, and information security is by 1 providing easy access for Internal Auditors to attend

international online training. SMR 1 SMR 2 SMR 3 SMR 4 QIA

Description : Throughout 2018, IA participated in 66 training SMR 1 : Level 1 Risk Management Certificate SMR 2 : Level 2 Risk Management Certificate programs with a total of 14,261 training hours. IA also SMR 3 : Level 3 Risk Management Certificate SMR 4 : Level 4 Risk Management Certificate assigned auditors to conduct audit tasks with the QIA : Qualified Internal Audit

International Certification

3 3 2 2 2 2 1 1 1 1 1 1

CEH CFrA CIA CISA CISSP CRISC CRMA FRM QAR CRMP COBIT5 CAMS CA CPA CSA

Description : Professional CEH : Certified Ethical Hacker CRISC : Certified in Risk and Information System Controls COBIT5 : Certified Objective for Information and Related Technology CFrA : Certified Forensic Auditor CRMA : Certified in Risk Management Assurance CAMS : Certified Anti Money Laundering Specialist CIA : Certified SKAIor FRM : Financial Risk Manager CA : Chartered Accountant CISA : Certified Information System Auditor QAR : Quality Assurance Review CPA : Certified Public Accountant CISSP : Certified Information System Security CRMP : Certified Risk Management Professional CSA : Certified Securities Analyst

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INTERNAL AUDIT PARTICIPATION IN PROFESSIONAL ASSOCIATIONS To expand the insight and competencies of professional auditors, as well as sharing in the best practices, IA includes its auditors in a number of Internal Audit Professional Associations including: Institute of Internal Auditors (IIA) - Indonesian Chapter, Information Systems Audit and Control Association (ISACA), Indonesian Accountants Association (IAI), Bank Internal Auditor Association (BIAA). In addition, CIMB Niaga’s IA welcomes visits from various institutions for benchmarking the audit practices at CIMB Niaga’s IA and has participated as speakers at various seminars.

CIMB Niaga IA (CAE) Participation in external organizations

Name of Organization Position Period

Bank Internal Auditor Association (IAIB) Head of Membership & Organization 2017 - 2020

Institutions conducting benchmarking at CIMB Niaga IA

No Institution Focus of Discussion Period

1 PT Bank Mandiri Tbk Data Analytics & Continuous Audit 2 February 2018

2 PT Bank Permata Tbk Audit Management Tools 14 – 15 March 2018

3 Data Analytics & Continuous Audit 11 May 2018

4 CIMB Bank Thailand Data Analytics & Continuous Audit 4 – 8 June 2018

5 PT Bank Syariah Mandiri Data Analytics & Continuous Audit 3 December 2018

CIMB Niaga CAE Participation as Speaker in External Seminars

No Event Organizer Period

1 Navigating Risks in the Digital Area, Jakarta PricewaterhouseCoopers 21 March 2018

2 Emerging Risk in Digital Banking, Surabaya Indonesian Banker Association 31 July 2018

3 IIA National Conference, Bali Institute of Internal Audit 29 August 2018

4 Focus Group Discussion (FGD), Digitizing Business Financial Services Authority 13 September 2018 Products and Processes as well as Oversight Optimization for BPR (Rural Bank), Jakarta

5 Risk Management & IA Refreshment, Jakarta Indonesian Banker Association 28 September 2018

AUDIT MANAGEMENT INFORMATION SYSTEM IA has used the CIMB Niaga Audit Management System (NAMS) since 2008. The NAMS monitors each audit stage starting from audit planning, audit fieldwork, reporting, and monitoring of completion progress of audit recommendations and follow-up, and documenting of audit work papers. Using NAMS improves the effectiveness and efficiency of IA’s operational activities. Following developments in the organization and their needs, IA carried out feature developments in NAMS and implemented the CIMB Niaga Audit Management System (CNAMS) in 2009, which was later replaced with TeamMate in 2010. Until now, TeamMate is still used as the Audit Management Information System and it continues to be developed in order to meet the on-going demands and to support IA’s activities.

AUDIT METHOD When conducting audit activities, CIMB Niaga’s IA applies the risk-based audit methodology. Risk based audits are implemented by IA starting with the annual audit planning stage through to conducting the audits. IA carries out risk assessments by conducting a bankwide Macro Risk Assessment of the risk identification process, and a Micro Risk Assessment of the risk identification process for the selected work units/branches/areas to be audited. Through

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Internal Audit (IA)

the Macro and Micro risk assessment methods, IA is Audit Recommendations able to determine the risk ratings and audit frequency needed for each business unit in the bank.

409 IA continues to improve its processes, methods, tools, 2018 as well as the quality and skills of its human resources, 967 enabling it to become a strategic business partner that

provides added value for Bank CIMB Niaga. 2017 1,465

2018 AUDIT ACTIVITY REPORT In Progress Throughout 2018, IA completed audit assignments 2016 2,013 Closed in accordance with its audit plan. In detail, the IA activities report for implementing the work plan based on strategic priorities was as follows:

IA Activities Report (audit) In addition to the regular audit assignments, IA also carried out a number of activities as follows: 1. Reviewed the implementation of AML (Anti Money 10 7 6 Laundering) and CFT (Counterfeit Transaction) practices in every business line and business support. 2. Conducted pre and post implementation reviews 129 on E-Banking Projects for both new projects and Continuous Audit upgraded projects. RBA 106 Consultative 3. Continued IA’s role in providing consultative reviews Thematic Audit for business units and business supports. 4. Conducted Quality Assurance reviews, both internally for the CIMB Niaga IA as well for the subsidiaries IA, and for CIMB Niaga Auto Finance, IA also continuously monitored the completion as a member of the CIMB Indonesia Financial of follow-up audit recommendations performed Conglomerate. by management. During 2018, IA provided 1,092 5. Continued to improve cooperation with every audit recommendations, of which 410 audit business unit and business support to improve the recommendations are in the completion process and Bank’s performance through Good Governance, only 1 audit recommendation (0.1%) is overdue. Risk Management, and Internal Control through the role of IA as a Business Partner. 6. Continued to review the IA policies and procedures to ensure they are updated and in accordance with the applicable standards.

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IA also implemented a number of key initiatives that 2. Visualization were applied in 2018, which were as follows: Is part of the Deepening Data Analytics development with the objective of presenting clear, structured, 1. Implemented Deepening Data Analytics and easily understood Data analytics results to Deepening data analytics is an initiative conducted the stakeholders. Data visualization can be in the by IA to develop data analytics, allowing data form of diagrams, maps, graphics, or other visuals. analytics to be used not only by IA as part of the Data visualization can illustrate the relationships audit process, but also as an early detection system or patterns of existing variables/parameters. for irregularities occurring in Bank CIMB Niaga that Visualization helps facilitate management in require immediate improvement by Management making effective decisions regarding issues that require immediate follow up. Since the initial implementation of data analytics in 2010, data analytics has served as the main IA tool in 3. Thematic Audit risk assessment during the audit planning stage and IA continued its implementation of audits using in selecting audit samples. The use of data analytics a thematic approach, which provided an audit continues to be developed, including changing focus on certain areas/processes/products. By the data analytics platform and infrastructure conducting Thematic Audits, auditors are able to database, allowing for the data analytics results to identify the root causes and provide comprehensive be distributed to all auditors through the analytic and effective recommendations that can be portal (Web Based), so they are easily accessed implemented bankwide. During 2018, IA conducted and used by auditors to help in the audit process. 10 Thematic Audits, covering banking operations Together with the IA organization and business and credit. growth development in 2017, improvements were made to develop scenario-based alerts (exception 4. Demerit Audit Rating reports). This development helps IA in the early Since 2017, IA has developed a Demerit Framework detection of deviations/indications of irregularities from the audit results of management performance that occur and require immediate improvements. assessments. The process of Demerits aims to In addition, IA has also implemented Continuous increase awareness in all parties at Bank CIMB Auditing, which is a continuous audit whereby the Niaga to collectively improve Internal Control, audit results are periodically submitted to the Risk enabling the Bank’s objectives to be achieved. The Control Unit (RCU) to be followed up. Demerit Audit is measured using 2 parameters, including the Audit Rating, and the level of timely Further developments were implemented in 2018, completion of audit recommendations (Late with IA starting to implement Dashboards and Remediation Rate). visualization applications. These applications help IA to focus on immediate follow-ups in anomaly Since the implementation of Demerit Audits, areas. The deepening of data analytics in 2018 the Late Remediation Rate has improved, with helped IA make recommendations to management a decrease from 15% (in 2016) to 0.5% (2017) to assist them in identifying loss opportunities and and 0.1% (in 2018), resulting in only 1 overdue fraud/deviation identification. audit recommendation out of 1,092 IA audit

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Internal Audit (IA)

recommendations. The declining rate shows 6. Guest Auditor Program a significant improvement in the control IA continued its Guest Auditor program by inviting environment and the timeliness of audit Business Units/Support Units (BU/SU) to be recommendation completions. involved in audits as a guest auditor with the aim of facilitating sharing best practices, providing guest auditors with an understanding of the audit Late Remediation processes, and the control framework, which can later be used and implemented in their respective business/support units, and provided the guest 15.0% auditors an understanding of the importance of the auditor’s work in assisting the management to achieve the Bank’s goals and strategies. During 2018, 7 (seven) audit assignments were conducted, involving 9 (nine) Guest Auditors from CIMB Niaga and CIMB Bank Malaysia.

0.50% 0.10% 7. Business Monitoring 2016 2017 2018 Business Monitoring is a non-audit activity implemented by IA to establish continuous communication with Management. This activity is 5. High Risk Validation carried out routinely, and is not part of the audit IA continued to validate high-risk validation findings, assignment. Business Monitoring provides benefits to ensure that all audit recommendations have been to both parties, IA and management, including the followed up in a timely and sustainable manner, following: and to ensure audit findings are not repeated in the • Develops a strong cooperative relationships future. In the event of repetition of findings in the with business units/support units (BU/SU) validation process, the recommendations will be re- • Promotes a deeper understanding regarding opened and the management must follow up on business and operational activities of the BU/SU the re-opened findings. From the validation results • Obtains the latest information related to in 2018, the sustainability of audit remediation saw changes in business strategies, processes, risks, an increasing trend, indicated by the Re-Open rate and control ratio in 2018 decreasing to 3% from 5% in 2017. • Facilitates sharing of key audit issues and changes in the audit method • Facilitates networking between auditors and related BU/SU heads

During 2018, IA conducted 93 business monitoring activities with the Management.

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WORK PLAN FOR 2019 6. Conducting a cyber security review. Moving forward, IA will continue to improve the 7. Continuing to carry out business monitoring so that auditor’s competencies, develop methodologies, as IA can always keep abreast of developments and well as optimize audit tools and their use. Competency changes in business, processes, and issues faced by improvement is required to fulfil the established work management, and be able to align the audit focus plan, which for 2019, includes the following strategic with any changes and development. priorities: 8. Continuing IA’s role in providing consultative reviews to business units and business support. 1. Continuing the guest auditors’ program initiative 9. Implementing internal Quality Assurance Reviews. by inviting staff from business units and support 10. Continuing to improve cooperation with all units as guest auditors in the audit assignments business units and business support, to improve for sharing knowledge and experience of business the Bank’s performance through good governance, development and controls implementation. risk management, and internal control, which is 2. Optimizing the role of Data Analytics and carried out by IA’s role as a Business Partner. Visualization to support the entire continuous 11. Continuing to review the policies and procedures auditing process. applied in IA so they remain up-to-date and in 3. Continuing to implement layered audits when accordance with the applicable professional auditing Bank CIMB Niaga branches through standards. portfolio audits conducted with Data Analytics, 12. Continuing to improve auditors’ competencies to area audits, as well as thematic audits on several be able to deliver added value for business units processes and products, both in credit and and business support. operational activities, and also surprise audit activities, so that the coverage of branch audits will increase. 4. Conducting a review on the implementation of AML (Anti Money Laundering) and CFT (Counterfeit Transaction) practices in each line of business and business support. 5. Performing pre and post implementation reviews of E-Banking Projects, for new projects and upgrading projects.

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Anti Money Laundering and Counter-Terrorist Financing (AML & CFT)

HEAD OF ANTI MONEY LAUNDERING AND Indonesian citizen, 54 years old. She has served as Head COUNTER-TERRORIST FINANCING (AML & CFT) of Anti Money Laundering (AML) since December 2016 UNIT PROFILE based on Board of Directors’ Decree No. 00083/HROB/ HR/III/2017. She started her career and held various positions in private banks either as a Compliance Head or AML Head. She obtained her Bachelor of Economics degree majoring in Accounting from Universitas Padjadjaran, Bandung in 1988 and Master’s degree in Finance from Universitas Gadjah Mada, Yogyakarta in 2005. She has been active in the Compliance Director Communication Forum and Indonesian Banks Association (Perbanas) since 2009.

Entin Rostini Head of Anti Money Laundering (AML)

Organizational Structure of Anti Money Laundering and Counter-Terrorist Financing (AML & CFT) Unit

Compliance Director

Head of Anti Money Laundering (AML)

Consultant

AML Business AML System & AML Testing & AML Analyst Alignment & Awareness Reporting Quality Assurance

AML & CFT PROGRAMS IMPLEMENTATION IN 2018 To fulfil the AML & CFT Program requirements, the The implementation of AML & CFT programs is CIMB Bank has implemented 3 (three) lines of defence as Niaga’s Board of Directors and Board of Commissioners follows: commitment to building an adequate Risk Culture at all levels of the organization, and to prevent its a. First Line of Defence products, services and e-channels from being used for First Line of Defence is implemented through money laundering and terrorism financing crimes. The Business Units/Control Units/Bank Operation Units AML and CFT programs refer to all prevailing laws and that conduct daily Bank activities at the front-line regulations, including the Money Laundering Criminal of the organization. Act No. 8 2010 Law concerning the Prevention and Eradication of Terrorism Financing Law No. 9 of 2013, b. Second Line of Defence POJK No. 12/POJK.01/2017 dated 21 March 2017 and Second Line of Defence is a monitoring function to SEOJK No. 32/SEOJK.03/2017 dated 22 June 2017, and ensure that the first line of defence has performed also international best practices. its function properly.

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c. Third Line of Defence b. Risk Measurement for AML and CFT, which is Third Line of Defence is a supervisory function of performed by using Risk Based Approach (RBA) the implementation of the AML and CFT programs indicators/parameters, including. performed by the first and second lines of defence. c. AML and CFT Risk Control and Management This function is performed by internal auditors, conducted through the implementation of external auditors and Board of Commissioners to Customer Due Diligence (CDD) or Enhanced ensure that first-line and second-line of defence Due Diligence (EDD) processes to identify are functioning effectively. Customer profiles and analysis of the conformity of transactions with Customer/WIC profiles The application of the AML and CFT programs has been and dissemination of policies and procedures, determined and monitored actively by CIMB Niaga’s training for all Bank employees, assessments Board of Directors and Board of Commissioners as of the AML and CFT implementation in Branch follows: Offices through a Risk Control Self-Assessment (RCSA). 1. Established a special organization with a Anti- d. Continuous monitoring and analysis to identify Money Laundering (AML) Sub-Directorate to conformity between customer transactions and implement the AML & CFT programs customer profiles, including closing business In performing its functions, the AML Sub relationships and rejecting transactions in the Directorate reports to the Compliance Director. context of implementing AML and CFT. Staff in AML Sub Directorate should have adequate e. Identification and assessment of money banking knowledge and experience regarding laundering and terrorism funding risk related to risk assessment and mitigation related to the Bank products and services and the opening of implementation of the AML and CFT programs. To e-channels. achieve this all staff followed compliance training f. Identification and Reporting of Suspicious and certification. The number of staff in the AML Financial Transactions (SFT), Cash Financial Sub-Directorate has increased to 22 (twenty two) Transactions (CFT), Foreign Financial Transactions personnel as of 31 December 2018. In addition, (FFT) and Integrated Service User Systems (ISUS) considering the large scale of the Bank, D’CORO and to PPATK. local AML teams are located at each Branch Office g. Procedures for screening new employees and and business unit to ensure the implementation monitoring employee transactions as part of of AML and CFT in their respective area. They are implementing the Know Your Employee (KYE) responsible for accessing and monitoring customer principles. transactions and the total number of AML local h. Administration of CDD documents and other team members amounts to 4,768 (four thousand documents related to AML and CFT. seven hundred and sixty eight) employees. i. Follow-up of results and reporting of AML and CFT risk exposures to senior management, 2. Risk-based AML and CFT policies and procedures committees, and regulators. in accordance with the Bank’s business complexity j. Internal Control, including: including the following relevant provisions: 1) Preparing processes and controls to serve a. Customer Due Diligence (CDD) in the context as guidelines for business units to ensure of Customer Identification and Customer Data compliance and understanding of the AML Updates, including the method of classifying and CFT programs. Controls are contained customer risk against potential money laundering in the AML and CFT policies and procedures and terrorism financing, identifying Beneficial (SOPs). Owners and screening customer data against the Anti Money Laundering Watchlist (AML Screening) database.

Annual Report 2018 PT Bank CIMB Niaga Tbk 561 Management Discussion Performance Highlights Management Reports Company Profile and Analysis Risk Management

Anti Money Laundering and Counter-Terrorist Financing (AML CFT)

2) Testing and QA processing to ensure that Terrorists and Terrorist Organizations (STSTO), and Branch Offices and Business Units have Proliferation Lists, Politically Exposed Persons (PEP) implemented AML and CFT in accordance List and adverse news. The Bank subscribes to the with prevailing Policies and Procedures. watchlist database from Thomson Reuters-World 3) Assessing risk indicators based on Check. The Bank also performs re-screening for all risk considerations and appropriate existing customers whenever there are renewals/ methodology and documentation. additions to the watchlist.

3. Management Information System in the 5. AML and CFT Risk Assessment framework of implementing AML and CFT The Bank has developed a risk-based approach to For the purposes of monitoring Customer profiles assessing AML and CFT risk at the customer level and transactions, CIMB Niaga has an application (customer risk rating) and at the Bank-Wide level system that can identify and determine the level of (Bank AML risk rating): customer risk, analyse, monitor and provide reports concerning the characteristics of transactions made a. Customer AML Risk Rating (CRR) is the by customers, including identification of suspicious assessment of AML and CFT risk inherent in each financial transactions. The application is capable customer and uses indicators that includes the of conducting comprehensive monitoring of all identity/profile of the customer, geographical/ customer transactions at the Bank, including credit country and business factors, products/services/ card, wealth management and custody products. channels used by the customer and the type of The application is equipped with parameters and business entity classified into Low, Medium and thresholds, which are continually evaluated in High-risk categories. accordance with the development of the mode of money laundering and financing of terrorism. b. Bank AML Risk Rating (BARR) is the Bank- The application also has a function to perform a Wide AML and CFT risk assessment that is screening process for the watchlist and reporting determined based on inherent risk indicators of SFT, CFT and FFT. The Bank continuously makes and the AML and CFT risk control levels of the improvements to the application by adding features bank. Based on our assessments, the Bank’s to improve the system’s effectiveness and efficiency. overall AML and CFT Compliance Risk Profile at the end of 2nd half of 2018 was “Low-Moderate”. 4. Screening of watchlist The Bank performs screenings on every customer account opening and new business relationship using the watchlist issued by the relevant authorities, and also the watchlists commonly adopted in international best practices (including the Office of Foreign Assets Control (OFAC) List, United Nations (UN) List, List of Suspected

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6. Internal Controls to evaluate the AML and CFT AML Training program adequacy and effectiveness To ensure that the AML and CFT programs are implemented in accordance with the established 17,739 policies, the Bank conducts Self-Assessments at the 15,354 branch offices, through the Risk Self-Assessment method. Validations were performed by the AML Sub-directorate in 110 (one hundred and ten) branch offices. 3,665 7. Compliance test and opinions given related to AML and CFT During 2018 the AML Sub-Directorate reviewed 273 2016 2017 2018 (two hundred seventy three) policies, procedures, products/activities/channels to ensure compliance with all prevailing AML and CFT rules and 9. Reporting and data submission to regulators/ regulations. In addition, the AML Sub-Directorate legal authorities gave 3,783 (three thousand seven hundred eighty Reporting to PPATK the AML and CFT three) opinions to business units and other implementation by the AML Sub-Directorate at the units related to various questions and problems Head Office is as follows: pertaining to the AML and CFT implementation.

8. AML and CFT training for employees All employees on a regular basis must attend AML and CFT training. The training is conducted in the classroom or via e-learning. 1,206,176 735,007

The number of employees participating in the AML and CFT training in 2018 totalled 17,739 employees, 497,724

including online training through the Learning on 407,008

the Go (LoG) application. In 2018, in collaboration 2017 113,124 100,608 1,145 with HRD, LoG was launched using an application 1,096 2018 is accessible to employees. LTKT LTKM LTKL SIPESAT

Annual Report 2018 PT Bank CIMB Niaga Tbk 563 Management Discussion Performance Highlights Management Reports Company Profile and Analysis Risk Management

Anti Money Laundering and Counter-Terrorist Financing (AML CFT)

Total Reports 4) Improvements to customer account opening

Institute Total Data Requested forms

PPATK/BNN/KPK 463 5) Alignment of AML and CFT policies and implementation with the CIMB Group Investigation 34 6) Assessment process for the AML and CFT implementation at Business Units/Branch 10. Improvements Initiatives in 2018 Offices and Subsidiaries with a higher risk To improve the AML and CFT implementation, 7) Establishment of methods for assessing AML & projects and initiatives carried out in 2018 included: CFT risk and the corresponding risk mitigation 1) Improvements to the AML system currently evaluation process being used to provide added value to the Bank’s 8) Updating customer data based on the risk type AML and CFT programs implementation of the respective customer 2) Discussions on AML and CFT policies and 9) Learning on the Go as a tool used by the Bank SOPs to ensure alignment with all prevailing for providing training to all employees including regulations at all times training related to AML and CFT 3) Cooperation with the Ministry of Home Affairs on the verification process of prospective customers data

564 Annual Report 2018 PT Bank CIMB Niaga Tbk Supporting Corporate Governance Corporate Social Others Consolidated Business Review Report Responsibility Corporate Data Financial Report

Public Accountant/External Auditor

In 2018, the Public Accounting Firm (PAF) that audited NUMBER OF PERIOD THE BANK’S FINANCIAL the Bank’s consolidated financial statements was STATEMENTS HAVE BEEN AUDITED BY THE PAF Tanudiredja, Wibisana, Rintis & Rekan (a member ACCOUNTANT AND PUBLIC ACCOUNTING FIRM firm of PricewaterhouseCoopers Global Network). The Pursuant to SEBI No. 3/32/DPNP regarding The appointment of PAF Tanudiredja, Wibisana, Rintis Relationship between Banks, Public Accounting & Rekan was based on the AGM approval dated 24 Firms, and Bank Indonesia, the appointment of a April 2018, and was conducted in accordance with all Public Accounting Firm can only be run for 5 (five) prevailing provisions. The appointment was reviewed, consecutive years, except in certain conditions that supervised and received a recommendation from the need the approval of the authorities. Audit Committee, that included the determination of audit fee based on fairness. Including 2018, the Public Accounting Firm Tanudiredja, Wibisana, Rintis & Rekan (a member NAME OF PUBLIC ACCOUNTANT firm of PricewaterhouseCoopers Global Network) has Angelique Dewi Daryanto, S.E., CPA served as the Bank’s auditor for the fourth consecutive period. The appointment of Tanudiredja, Wibisana, NAME OF PUBLIC ACCOUNTING FIRM Rintis & Rekan was approved by OJK through Letter KAP Tanudiredja, Wibisana, Rintis & Rekan. No. S-124/PB.332/2016 dated 9 August 2016.

EXTERNAL AUDITOR MONITORING OTHER NON-AUDIT SERVICES PROVIDED BY THE The Audit Committee monitors the external audit ACCOUNTANT & PUBLIC ACCOUNTING FIRM FOR processes through regular meetings with the Public CIMB NIAGA Accountant to discuss all findings and progress made During 2018, no fees were paid to the Public Accounting during the audits by the Public Accountant. The Audit Firm Tanudiredja, Wibisana & Rekan for non-audit Committee also assists in ensuring that there are no services. potential obstacles during the audit process, evaluates the audit quality, and assures the audit has been 2018 AUDIT FEES conducted in accordance with all prevailing rules and The total audit fee for 2018 was Rp15,037,000,000, and standards. included the annual audit fee of Rp7,432,000,000, audit fee for IFRS 9 reporting to CIMB Group of COMMUNICATION EFFECTIVENESS AND Rp2,758,000,000, audit fee pertaining to the issuance FREQUENCY BETWEEN THE PUBLIC ACCOUNTANT of bonds and sukuk of Rp4,199,000,000, and the Bank’s AND THE BOARD OF DIRECTORS subsidiary (CNAF) annual audit fee of Rp648,000,000. Throughout the audit process by the Public Accountant, communication and cooperation between the Public Information on Public Accounting Firms that have Accountant and the Board of Directors is conducted in conducted audits of the Bank for the last 5 (five) an intensive and regular manner. 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

Annual Report 2018 PT Bank CIMB Niaga Tbk 565 Management Discussion Performance Highlights Management Reports Company Profile and Analysis Risk Management

Transparency of the Bank’s Financial and Non-Financial Conditions

CIMB Niaga meets the obligation governing Mission and Corporate Values, the Composition transparency and publication of its financial and non- and Profiles of the Board of Commissioners and financial conditions in accordance with all prevailing the Board of Directors, as well as internal policies rules and regulations, through the submission and pertaining to Corporate Governance including the publication of information in the printed media and on Articles of Association and Committee Charters are the Bank’s website, as follows: also published on CIMB Niaga’s website. 1. Monthly Financial Reports submitted to the 5. Corporate Information and Products including the regulators are also published on the websites of office network are published in the Annual Report, OJK and CIMB Niaga. and on CIMB Niaga’s website to facilitate easiness 2. Quarterly Financial Reports submitted to the for customers, investors and the general public regulators, are also published in printed media and to access and obtain information regarding the on CIMB Niaga’s website. Bank’s products and services. 3. CIMB Niaga’s Annual Report is prepared and 6. Information concerning Complaint Procedures, presented with due observance to all rules and Information Security Policy, and Tips for Customers regulations and submitted to the regulators, rating in using banking services are published on CIMB agencies, banking development institutions, Niaga’s website, in order to comply with the research institutions, financial magazines and consumer protection regulations. published on CIMB Niaga’s website. 7. Other information intended to support the 4. Corporate Governance Information, including the information disclosure, financial education, and Annual Corporate Governance Report, the Vision, public service.

CIMB Niaga Share and Bond Buybacks

On 25 July 2017, CIMB Niaga obtained approval from Pursuant to the approvals, as of 31 December 2018, OJK through letter No.S-63/PB.33/2017 to perform the Bank had performed the buyback of 208,216,392 a share buyback at a maximum of 2% of the total (full amount) shares for an average price per share of issued and fully paid shares, which would then be Rp1,257.70 (full amount), with a total acquisition value used as a Management Employee Stock Ownership of Rp261.87billion (including commission and tax fees). Program (MESOP), to become effective in 2018. The buyback plan had been previously approved by the During 2018, the Bank did not perform any buybacks of shareholders through the EGM on 25 April 2017 and bonds issued by the Bank. EGM on 24 August 2017.

566 Annual Report 2018 PT Bank CIMB Niaga Tbk Supporting Corporate Governance Corporate Social Others Consolidated Business Review Report Responsibility Corporate Data Financial Report

Dividend Policy

Pursuant to Law No. 40 of 2007 regarding Limited less than 17.5%; and (iii) consideration is given regarding Liability Companies, the dividend distribution is made the Bank’s condition and capabilities, and the capital based on a General Meeting of Shareholders decision. requirements and business continuity to maintain the Bank’s future business development. To ensure Good Corporate Governance principles are followed in the dividend distribution, CIMB Niaga In 2018, based on the AGM approval on 24 April 2018, established Dividend Policy No. M.03 in 2018 which the Bank performed a cash dividend distribution regulates: for a maximum of 20% of CIMB Niaga’s net income • The dividend distribution plan to be reviewed by for the 2017 fiscal, amounting to a maximum of the Board of Directors or Committee equivalent to Rp595,547,660,321 (gross), with the following schedule: the Board of Directors at least once a year. 1. Cum Dividend in the Regular and Negotiation • Dividend distribution proposal to be submitted Market on 2 May 2018 at the Capital Management & Recovery Plan 2. Ex Dividend in the Regular and Negotiation Market Committee (CMRP) meeting on 3 May 2018 • The Bank is allowed to distribute a certain 3. Cum Dividend in the Cash Market on 7 May 2018 percentage of the current year’s net profit as a 4. Recording date for entitled shareholders on 7 May dividend after taking into account, the Bank’s 5. Ex Dividend in the Cash Market on 8 May 2018 financial performance achievement, the Bank’s 6. Dividend Payment for the 2017 Fiscal Year on 24 Capital Adequacy Ratio (CAR) after the distribution May 2018 of dividend, other investment projects, the Bank’s soundness level, and others. Accordingly, the remaining CIMB Niaga net profit, • The dividend distribution plan to be included in the after deducting with dividend distribution to the Bank Business Plan and submitted to the OJK. shareholders, to be used to finance the Bank’s business • The dividend distribution proposal approved by activities. management to be sent to the Annual General Meeting of Shareholders (AGM) for approval. In 2017, in accordance with the 2017 AGM resolution • After the AGM approves the cash dividend dated 25 April 2017, CIMB Niaga did not distribute distribution, the Bank pays the cash dividends to dividends. In 2017, the Bank made no provisions for the entitled shareholders no later than 30 (thirty) the mandatory reserve from its net profit for the 2016 days after the AGM decision. fiscal year, since the Bank’s total amount of mandatory reserves complied with the minimum mandatory As stated in the 2018 Bank Business Plan submitted to reserve requirement pursuant to Article 70 of Law No. the OJK, the Bank was allowed to distribute dividends 40 2007 regarding Limited Liability Companies. CIMB in 2018 with the following conditions: (i) the Bank had Niaga’s net profit in 2016 of Rp2.1 trillion was recorded achieved its net profit before tax target; (ii) after the as retained earnings and was used to finance the dividend distribution, the Bank’s CAR should not be Bank’s business activities.

Annual Report 2018 PT Bank CIMB Niaga Tbk 567 Management Discussion Performance Highlights Management Reports Company Profile and Analysis Risk Management

Funds for Social and Political Activities

CIMB Niaga provides funds for social activities through Related to politics, in 2018, the Bank did not provide the Corporate Social Responsibility (CSR) programs and funds for political activities or to any political parties. activities. The target for CIMB Niaga’s CSR programs The Bank continues to allow the freedom for all and activities includes making a positive impact on a employees to channel their aspirations in political broad audience over the long term. In addition, CIMB activities. However, the Bank’s Code of Ethics and Niaga encourages employees to assist and support Conduct regarding Employee Activities Outside the social activities organized by the Bank as set forth in Company regulates certain restrictions regarding the the Bank’s Code of Ethics and Conduct No. A.07.10 involvement of the Bank and employees in political dated 16 June 2017. activities to avoid any Conflicts of Interest, including but not limited to providing funds for political interest. In 2018, CIMB Niaga allocated a portion of its This policy has been implemented to maintain the operational costs for community and environmental independence and professionalism of the Bank and its development. A more detailed explanation of the employees. Bank’s social responsibility is presented in a special section on “Corporate Social Responsibility” and in the 2018 Sustainability Report, which forms an integral part of this Annual Report.

Provision of Funds to Related Parties

POLICY For any material affiliated transactions, and Providing funds to related parties (individuals or transactions with potential conflicts of interest with groups, including to the Board of Directors, Board of the Bank, the Board of Commissioners must receive Commissioners and Executive Officers of the Bank recommendations from Audit Committee before and other related parties) by the Bank has been fairly giving their approval. exercised with reasonable prices and terms, similar to those with non-related parties, and refers to CIMB During 2018, there were no violations or excess of the Niaga’s internal policies, including the Principal Credit LLL when providing funds to related parties of CIMB Policy and Commercial Credit Policy. Niaga.

PROCEDURE DISCLOSURE The Provision of Funds to Related Parties is performed Detailed Information related to the Provision of Funds with reference to BI Regulation No. 8/13/PBI/2006, an to Related Parties, including related parties, nature amendment to BI Regulation No. 7/3/PBI/2005 regarding of relationships, nature of transactions, and value the Legal Lending Limit (LLL) for Commercial Banks, of transaction has been disclosed in Note 49 of the and in compliance with the Bank’s internal regulations, Consolidated Financial Statements as of 31 December and subject to the Board of Commissioners’ approval, 2018, which forms part of this Annual Report. before the funds to related parties are executed.

568 Annual Report 2018 PT Bank CIMB Niaga Tbk Supporting Corporate Governance Corporate Social Others Consolidated Business Review Report Responsibility Corporate Data Financial Report

Customer Protection Policy

CIMB Niaga continues to protect the interests of all Unit (CRU) that is responsible for handling customer its customers and provide the best by fulfilling OJK complaints regarding the Bank’s products and Regulation No. 1/POJK.07/2013 regarding Customer services. The CRU consistently improves the quality of Protection in the Financial Services Sector, OJK resolving customer complaints, by conducting periodic Regulation No. 18/POJK.07/2018 regarding Customer evaluations of corrective actions and by accelerating Complaint Services in the Financial Services Sector, the settlement of customer complaints. The Bank also and OJK Circular Letter No. 17/SEOJK.07/2018 regarding has a Customer Care Unit (CC Unit) as a special unit to Guidelines for the Implementation of Customer handle and manage the customer experience. Complaint Services in the Financial Services Sector. In 2018, the number of CIMB Niaga customers grew by CIMB Niaga views its customers as one of its 8% to 7.9 million compared to 7.4 million in 2017. The stakeholders who play a very important role in number of financial transactions increased by 23% improving the performance and sustainability of the from 297.5 million in 2017 to 364.7 million in 2018. On Bank’s business. Therefore, the on-going commitment the other hand, the ratio of customer complaints to to provide excellent service and protection for the number of transactions improved from 2.7basis customers is a top priority. This has been realized point (bps) in 2017 to 1.4bps in 2018. through the establishment of the Customer Resolution

Customer Complaint Handling Report in 2018

Solved In Process Total No. Types of Financial Transactions Total Percentage Total Percentage Complaints

1 Bancassurance 82 100% - 0% 82

2 Deposit 9 100% - 0% 9

3 Direct Debit 2,076 99% 17 1% 2,093

4 Electronic Banking 18,225 99% 170 1% 18,395

5 ATM/Debit Card/ATM Machine 31,377 99% 170 1% 31,547

6 Credit Card 1,454 92% 129 8% 1,583

7 Clearing (Transfer)/Remittance 155 100% - 0% 155

8 Unsecured Credit 26 100% - 0% 26

9 Auto Credit/Financing 210 97% 7 3% 217

10 Working Capital Credit/Financing 14 100% - 0% 14

11 Home/Apartment Ownership Credit/Financing 991 95% 57 5% 1,048

12 Other funds collection 161 94% 11 6% 172

13 Other funds distribution 2 100% - 0% 2

14 Savings 5,685 90% 597 10% 6,282

15 Trade Finance/Letter of Credit 3 100% - 0% 3

Total 60,470 98% 1,158 2% 61,628

Annual Report 2018 PT Bank CIMB Niaga Tbk 569 Management Discussion Performance Highlights Management Reports Company Profile and Analysis Risk Management

Customer Protection Policy

CIMB Niaga consistently maintains the quality of In addition, CIMB Niaga is also committed to improving settlement of customer complaints. This is reflected the quality of its products and services. Numerous in the level of customer complaint resolutions efforts have been made including improving the reaching 98% in 2018, in accordance with the work processes by adopting the Lean Six Sigma Service Level Agreement (SLA). In addition, the Bank method, providing choices and ease of transactions for conducts customer surveys to measure the customer customers through the CIMB Niaga 14041 services, as recommendations regarding CIMB Niaga’s products well as through an internal campaign “Layanan Dari and services, using the Net Promoter Score (NPS) Hati” aimed at forming a customer-centric culture in all method. Based on a survey with CIMB Niaga customers CIMB Niaga employees. The Bank also conducted Lean conducted by DEKA Marketing Research, the NPS in Six Sigma Workshops and Customer Journey Mapping 2018 reached +16%, an increase from+5% in 2017. (CJM) Regional Workshops with the aim of empowering employees and encouraging improvement in providing Also, CIMB Niaga actively participates in the Banking a quality service to its customers. Further explanations Mediation Working Group in collaboration with Bank can be found in the explanation of Service Quality and Indonesia and OJK and other banks in order to conduct Customer Complaint Management in the Consumer customer education programs, both in the form of Banking discussion section. banking seminars and other activities.

570 Annual Report 2018 PT Bank CIMB Niaga Tbk Supporting Corporate Governance Corporate Social Others Consolidated Business Review Report Responsibility Corporate Data Financial Report

Anti Corruption Policy

The Bank has regulated the Bank’s Anti-Corruption Corruption Policy. CIMB Niaga also has the “Ayo Lapor” policy as stipulated in the Bank’s Code of Ethics and program, as explained in the Whistleblowing System Conduct and supports the implementation of an Anti- Policy section in this Annual Report.

Protection of Creditors’ Rights

In line with one of the corporate governance Creditors’ Rights that is used as a guideline when principles issued by OJK, and to protect the rights of receiving loans from creditors, and has been uploaded creditors, CIMB Niaga has implemented an honest to the Bank’s website. and transparent information disclosure system, and treats all creditors equally without any discrimination. The purpose of this policy is to ensure the fulfilment Through information disclosure, all creditors and the Bank’s creditors rights and to maintain their business partners are entitled to obtain the relevant confidence in the Bank. The Bank guarantees information they need so that every party can make creditor’s rights are carried out properly, as outlined in objective decisions based on fair, reasonable, and the agreements agreed between both parties. As part accurate considerations. of the implementation of creditors’ rights, the Bank performs its agreed obligations in a timely manner To further strengthen this, the Bank has established and seeks to avoid delays or omissions that have the Policy No. M.05 year 2018 regarding Fulfilment of potential to cause losses to both parties.

Annual Report 2018 PT Bank CIMB Niaga Tbk 571 Management Discussion Performance Highlights Management Reports Company Profile and Analysis Risk Management

Risk Management

Risk Management in CIMB Niaga is implemented in CIMB Niaga’s EWRM Risk Management process a robust and integrated manner. Risk Management includes identification processes considered implementation is proactive and forward looking and significant in the Bank business activities, as well as aims to maximize added value for the shareholders, the capital requirement level. Risk assessments and manage the capital comprehensively, as well as ensure risk aggregation are performed using an established sustainable profitability and business growth. methodology, while the risk management, control and reporting is conducted continuously to evaluate and CIMB Niaga has established the Enterprise Wide Risk manage the risks, as well as to ensure that risk exposure Management (EWRM) policy as a standard reference is in line with the Bank’s risk appetite. to manage and anticipate risks, both for existing risks as well as potential risks by taking into account the risk EWRM implementation is an on-going initiative profile changes due to changes in business strategies, and is supported by adequate Risk Management external factors, and regulations. infrastructure. This includes the Risk Management policies and procedures preparation and review One of the key components of the EWRM framework which are appropriate to maintain the risk level at the is strong Bank management governance that serves established limits as well as adequate human resources to improve the four eyes principle mechanism and and technology. The implementation of EWRM is also transparency in all Risk Management processes. In supported by the Risk Management Unit, which is addition, the Bank has made Risk Management an independent from risk taking unit. integral part of the Bank’s culture, operational activities, and decision-making processes. At the operational level RISK IDENTIFICATION AND ASSESSMENT of daily Risk Management, the Bank has implemented CIMB Niaga uses 2 (two) approaches in its risk the three lines of defence concept that involves all levels identification process, namely the risk profile within the organization including the Board of Directors, assessment as well as the Risk & Control Self- senior management, and all employees. Assessment (RCSA) and Risk Assessment. The methodology adopted in the risk profile assessment To ensure that the Bank obtains an optimal level of refers to the regulatory requirements, while the RCSA risk adjusted return, discussions regarding risk plays a represents an internal approach that allows the first central and fundamental role in the business planning line of defence to identify and assess the key risks process, including the determination of risk appetite, and controls. In addition, the Bank also performs risk posture and new products/activities, to ensure Risk Assessments (as part of the ICAAP process) on conformity between strategies, growth, operational an annual basis as well as on an on-going basis as plans, capital and risk. In this regard, the Bank optimizes part of its usual business activities. For determining the Risk Management function to support and the types of material risks, the Bank considers both influence business decisions related to pricing, resource the financial impacts and non-financial impacts, allocation, and other business decisions. As such, the including reputation and compliance with regulatory Bank is expected to be able to maintain the trust of its requirements as well as compliance with the prevailing customers, shareholders, and other stakeholders. Sharia principles.

572 Annual Report 2018 PT Bank CIMB Niaga Tbk Supporting Corporate Governance Corporate Social Others Consolidated Business Review Report Responsibility Corporate Data Financial Report

TYPE OF RISKS MANAGING RISKS The main risks managed by the Bank includes 9 (nine) Risk Management is conducted in line with the EWRM types of risk, including credit risk, market risk, liquidity concept and refers to the regulatory requirements. risk, operational risk, strategic risk, compliance risk, The main component in EWRM is in line with the legal risk, reputation risk, and interest rate risk in the four pillars of Risk Management which are (i) Active banking book in line with the type of risks that must Supervision of the Board of Commissioners and the be managed by the Bank in the risk profile assessment Board of Directors; (ii) Adequacy of Policies, Procedures, process. For the Sharia Business Units (SBU), there and Limit Setting; (iii) Adequacy of Risk Identification, are 2 (two) additional risk types, the rate of return risk Assessment, Monitoring and Control Processes, as well and investment risk, in accordance with POJK No. as the Risk Management Information System; and (iv) 65/POJK.03/2016 dated 23 December 2016 regarding the Internal Control System. the Implementation of Risk Management for Sharia Commercial Banks and Sharia Business Units, and Risk Management begins with the risk identification in accordance with POJK No. 17/POJK.03/2014 dated stage that aims to determine the material risks for 19 November 2014 regarding the Implementation products and activities to be subsequently measured of Integrated Risk Management for Financial so that the Bank can determine the level of risk to be Conglomerates, the Bank also manages intragroup faced. The Bank then decides which risks to be taken, transaction risk. avoided, transferred or managed after considering the risk impact as well as the cost and benefits of the CIMB Niaga measures and monitors these risks on Bank’s products or activities. a regular basis, to ensure that all of the Bank’s risk mitigation strategies are properly implemented, and to As part of Risk Management, CIMB Niaga continues ensure each of these risk mitigation actions is effective to ensure the reporting and review process on the in managing the risk levels consistency with the Bank’s Bank’s Risk Management system effectiveness is risk appetite and risk tolerance. Risk measurement is performed periodically by the Risk Management conducted by determining the risk rating, risk scoring, Committee (RMC), and other Executive Committees at sensitivity analysis of interest-related instruments the Board of Directors level, and by the Risk Oversight portfolio (DV01), Net Open Position (NOP), Liquidity Committee (ROC) at the Board of Commissioners level. Coverage Ratio (LCR), Net Stable Funding Ratio (NSFR), The evaluation results for Bank’s Risk Management Economic Value of Equity (EVE), and stress testing, process improvement are followed up by the Risk and uses methodologies based on best practices. Management Unit and other related units. The Bank For operational risk, risk management is conducted continuously strives to apply the Risk Management with various operational risk tools, including Loss process based on prudential principles and Good Event Data (LED) Management, Key Risk Indicator Corporate Governance. (KRI), New Product Approval (NPA), Significant Change Assessment Process, Risk and Control Self- Further discussions regarding Risk Management are Assessment (RCSA), and Control Issue Management available in the Risk Management Report section of (CIM) to monitor corrective actions concerning the this Annual Report. resulting control gap. The Bank periodically reviews the assumptions used, data sources, methodologies and procedures adopted in the risk assessments, changes in the business environment, market conditions, as well as the regulatory requirements.

Annual Report 2018 PT Bank CIMB Niaga Tbk 573 Management Discussion Performance Highlights Management Reports Company Profile and Analysis Risk Management

Risk Management

RISK MANAGEMENT SYSTEM EFFECTIVENESS The evaluation of CIMB Niaga Risk Management REVIEW RESULTS processes in 2018 was implemented effectively. All The Bank’s Risk Management processes are decisions made by these committees have been properly evaluated by RMC, who are in charge of the overall documented. In addition, the Board of Commissioners Risk Management Framework implementation. The through the ROC also performed evaluations related Committee is chaired by the President Director and to the Risk Management strategies implementation. consists of all members of the Board of Directors Several issues related to the Risk Management and several executive officers. In the RMC meetings, implementation requires the Board of Commissioners in addition to a comprehensive discussion of the approval, including: the Risk Management policy monthly risk exposure report, discussions are also held approval, the Risk Appetite Statement establishment, on other specific issues including the risk appetite and the guidelines regarding the level of risk that may monitoring dashboard, which serves as a traffic light be taken by business units each year. associated with the Bank’s risk-taking activities, the implementation of ICAAP (Internal Capital Adequacy Assessment Process) to assess the Bank’s capital adequacy in relation to its risk profile, policies and procedure approval, the integrated Risk Management implementation, risk limits approvals and models and methodologies adopted in the risk measurement approval process. In addition to RMC, other Executive Committees related to Risk Management discuss specific risks in greater detail, such as the Asset Liability Committee (ALCO), the Operational Risk Committee (ORC), the Credit Policy Committee (CPC), and the Capital Management & Recovery Plan Committee (CMRPC).

574 Annual Report 2018 PT Bank CIMB Niaga Tbk Supporting Corporate Governance Corporate Social Others Consolidated Business Review Report Responsibility Corporate Data Financial Report

Internal Control System

Internal Control is a continuous supervisory mechanism COSO – Internal Control Framework, consists of 5 (five) established by the Bank’s management that is carried control components, which are: out by all management and employees at every level 1. Control Environment of Bank CIMB Niaga’s organization. 2. Risk Assessment 3. Control Activities LEGAL BASIS 4. Information and Communication CIMB Niaga’s Internal Control System has been 5. Monitoring established based on OJK Circular No. 35/SEOJK.03/2017 regarding the Guidelines for Internal Control During 2018, CIMB Niaga implemented the following Standards in Commercial Banks. The main objectives Internal Control System that refers to COSO: of the Internal Control System, in addition to efforts to support the Bank’s vision and mission achievement, 1. Control Environment are to increase value for the stakeholders, minimize The Board of Commissioners, through the the risk of losses, and to maintain compliance with established Committees, conducts regular the applicable laws and regulations. CIMB Niaga’s assessments concerning the control environment Internal Control System is an important monitoring and conducts independent assessments that are component in the management of the Bank and communicated to the Board of Directors for their has become a reference for a sound and controlled follow-up. Banking operations. 2. Risk Assessment and Risk Management IMPLEMENTATION OF INTERNAL, FINANCIAL, AND The Board of Directors has established procedures OPERATIONAL CONTROL SYSTEM AND CONFORMITY to anticipate, identify, and respond to events and WITH COSO – INTERNAL CONTROL FRAMEWORK constraints that may affect the achievement of the The implementation of the Bank’s Internal Control objectives. The Board of Commissioners, through System refers to COSO (Committee of the Sponsoring the Risk Oversight Committee, ensures that the Organizations of the Treadway Commission) – the Board of Directors has performed sound Risk Internal Control Integrated Framework for developing Management. an Internal Control Framework that ensures the adequacy of operational and financial controls, 3. Control Activities financial reporting, operational effectiveness and Policies and procedures for key business units and efficiency, as well as compliance with the prevailing support units have been developed and approved laws and regulations. by the Board of Directors, and are periodically reviewed and updated by the Risk Management The Bank’s Internal Control has been established Unit. The Compliance Unit is responsible for based on two aspects, namely operational control disseminating the prevailing banking regulations, and financial control. Internal Control over the Bank’s conducting compliance tests on new internal operational and financial reporting is conducted with policies and proposals regarding new products or reference to the international COSO - Internal Control activities, implementing Anti Money Laundering Integrated Framework guidelines. In COSO, it states (AML) and Terrorism Financing Prevention (TFP) that Internal Control is a system or process performed programs, as well as monitoring the compliance by the Board of Commissioners, Board of Directors, through designated officers at other business Management and employees within the company, to units that have been verified by an Independent provide adequate assurance for the achievement of Work Unit as the 2nd and 3rd Line of Defence. The control objectives. Compliance Unit submits periodic compliance reports to the Board of Commissioners, Board of Directors, and regulators.

Annual Report 2018 PT Bank CIMB Niaga Tbk 575 Management Discussion Performance Highlights Management Reports Company Profile and Analysis Risk Management

Internal Control System

Bank Officers regularly review the existence and to the Executive Committees, Internal Audit, and all effectiveness of the controls, perform adequate employees. The Board of Directors and the Board of duties segregation, conduct routine data accuracy Commissioners are committed to ensuring that Good verification, as well as maintain and test emergency Corporate Governance is well implemented as the basis response plans. for achieving the goal of maintaining and increasing the value of the Bank. One of the elements of Good 4. Information and Communication Corporate Governance is to ensure that the Internal The Bank has established procedures for data Control System has been implemented adequately. collection and Information Technology to The Board of Directors is responsible for implementing generate reports on business activities, financial a sound Internal Control System to achieve the Bank’s conditions, and risk management and compliance objectives. implementation to support the Board of Directors and Board of Commissioners duties. The Board of Commissioners, assisted by the Audit Committee, is responsible for oversight to ensure the 5. Monitoring overall implementation of Internal Controls, including The Board of Directors, Bank’s Officers and Internal the Board of Directors policies related to Internal Audit continuously monitor the effectiveness Controls. The Internal Control System is designed to of the overall Internal Control implementation. properly manage and control risks and not to eliminate Monitoring of major risks has been prioritized and the risks. This Internal Control statement describes the serves as a part of daily activities, including regular key elements adopted to achieve the Bank’s Internal evaluations. The Bank’s Board of Directors and Control objectives, which include: Officers are committed to and have performed 1. Effective and efficient operations; follow-ups of the monitoring results and the 2. Accurate and reliable financial statements; Internal Audit recommendations. 3. Compliance with all applicable laws and regulations; 4. Security of Bank assets. Within the framework of the Internal Control System, CIMB Niaga uses the Three Lines of Defence INTERNAL CONTROL EFFECTIVENESS EVALUATION concept, the most recent control strategy under During 2018, CIMB Niaga’s Internal Control was the COSO Internal Control Framework monitoring implemented in accordance with the principles of system, as disclosed in the Risk Management control, and the overall quality of the Internal Control section of this Annual Report. System ran properly. Issues related to the adequacy of Internal Control were reported to the Board of INTERNAL CONTROL ADEQUACY STATEMENT Directors and follow-up measures were taken to The Internal Control System is a process carried minimize risks. Reports were also submitted to the out by the Bank’s Board of Directors and all Officers Board of Commissioners through the Committees at who provide direction, guidance, and supervision the Board of Commissioners level.

576 Annual Report 2018 PT Bank CIMB Niaga Tbk Supporting Corporate Governance Corporate Social Others Consolidated Business Review Report Responsibility Corporate Data Financial Report

Legal/Litigation Issues of the Bank and its Subsidiaries

LEGAL ISSUES In 2018, the Bank’s legal issues (excluding Sharia cases to be disclosed in the Sharia Business Unit Governance Report) consisted of both civil and criminal cases. In the civil cases the Bank’s role was as a Defendant, whereas in the criminal cases the Bank’s role was as the Reported Party.

Civil

Civil Legal Issues (Bank as Defendant) 2018 2017 2016

Total Cases 214 220 134

Settled Cases (Legally Binding) 60 82 13

Cases in Settlement Process (as of December) 154 138 121

Related to the civil cases, litigation handled by the Bank was caused by: 1. Lawsuits from the borrowers or third parties concerning the collateral pledged by the Bank. 2. Lawsuits related to Bank Guarantees, Cessie, Credit Agreements, requests for Cancellation of Loan Agreements, blocking of accounts or customer accounts, notification of customer collectability, Issuance of Bonds where the Bank acted as the trustee. 3. Lawsuits regarding Tax disputes. 4. Lawsuits from the borrowers regarding Go Mobile application transactions, use of credit cards, denial of insurance claims, and loss of customer funds. 5. Lawsuits for fraudulent investments by third parties whose deposit process was carried out at the Bank. 6. Lawsuits for inheritance disputes against auctioned objects and guarantees at the Bank. 7. Lawsuits for rehiring from ex-Bank employees in the Industrial Relations Court. 8. Lawsuits from third parties related to internal conflicts of borrowers shareholders.

Criminal

Criminal Legal Issues (Bank as Defendant) 2018 2017 2016

Total Cases 11 8 6

Settled Cases (Legally Binding) 3 2 1

Cases in Settlement Process (as of December) 8 6 5

Related to the criminal cases, litigation handled by the Bank was caused by: 1. Reports from customers or third parties concerning alleged banking crimes. 2. Reports from customers or third parties related to alleged criminal acts regarding counterfeit letters, alleged criminal acts regarding fraud and the misappropriation of funds, and alleged use of land without permission from the owner or their authorized attorney.

Annual Report 2018 PT Bank CIMB Niaga Tbk 577 Management Discussion Performance Highlights Management Reports Company Profile and Analysis Risk Management

Legal/Litigation Issues of the Bank and its Subsidiaries

VALUE OF CLAIMS/DAMAGES AND QUANTITATIVE RISKS FACED Cases with lawsuit values of more than Rp10 billion together with the quantitative risk information faced by the Bank during 2018 were as follows:

1. Lawsuit of Civil Court registered under No. 255/PDT.G/2008/PN.Jkt.Pst

Parties II (Plaintiff I) IIM (Plaintiff II) DPP (Plaintiff III) DPKS (Plaintiff IV)

BGI (Defendant I) IS (Defendant II) RHIS (Defendant III) B (Defendant IV) ISB (Defendant V) RS (Defendant VI) HS (Defendant VII) S (Defendant VIII) KAP TTHR (Defendant IX) TI (Defendant X) JS (Defendant XI) KCRI now named as MI (Defendant XII) KKH S&T (Defendant XIII) HT (Defendant XIV) FH (Defendant XV) APS (Defendant XVI) Bank (Defendant XVII)

Subject The Plaintiffs motioned a lawsuit claiming that the Bank as the trustee agent in the issuance of the subordinated Bonds I BGI has committed an illegal act

Value Material: Rp10,637,083,332 Immaterial: Rp400,000,000,000

Status At Reconsideration

Risk Encountered by the Bank Indemnity for the value of the lawsuit together with the other Defendants

2. Lawsuit of Tax Court registered under No. 50358/PP/M.IB/16/2014

Parties DGT (Suppliant)

Bank (Respondent)

Subject The DGT filed a Review of the Supreme Court’s decision concerning a Tax Underpayment Assessment Letter (SKPKB) issued by the DGT for the Bank

Value Material: Rp54,822,422,481 Immaterial:

Status At Reconsideration

Risk Encountered by the Bank Indemnity for the value of the lawsuit

3. Lawsuit of Tax Court registered under No. 57057/PP/M.IIIA/15/2014

Parties DGT (Suppliant)

Bank (Respondent)

Subject The DGT filed a Review of the Supreme Court’s decision regarding the Letter of Tax Underpayment Assessment (SKPKB) issued by the DGT for the Bank

Value Material: Rp204,760,659,708 Immaterial:

Status At Reconsideration

Risk Encountered by the Bank Indemnity for the value of the lawsuit

578 Annual Report 2018 PT Bank CIMB Niaga Tbk Supporting Corporate Governance Corporate Social Others Consolidated Business Review Report Responsibility Corporate Data Financial Report

4. Lawsuit of Civil Court registered under No. 253/PDT.G/2016/PN.Jkt.Ut

Parties JMS (Plaintiff I) RVS (Plaintiff II) AJS (Plaintiff III)

SGI (Defendant I) ENA (Defendant II) MCR (Defendant III) CCR (Defendant IV) SS (Defendant V) YPK (Defendant VI) RFW (Defendant VII) IY (Defendant VIII) BDI (Defendant IX) Bank (Defendant X) BBS (Defendant XI) BK (Co-Defendant I) DJAHU (Co-Defendant II)

Subject Customer’s internal shareholder conflict (inheritance dispute)

Value Material: Rp291,500,000,000 Immaterial: Rp300,000,000,000

Status In appeal process

Risk Encountered by the Bank Risks Encountered by the Bank is loss of guarantee

5. Lawsuit of Civil Court registered under No. 176/PDT.G/2017/PN.DPK

Parties SA (Plaintiff I) SP (Plaintiff II) BUG (Plaintiff III) SBP (Plaintiff IV) SPP (Plaintiff V)

BMI formerly BII (Defendant I) Bank (Defendant II) KD (Defendant III) KK RI (Defendant IV) EG (Co-Defendant I) MP (Co-Defendant II)

Subject Granting of rights to shareholders to buy back shares

Value Material: Rp2,100,000,000,000 Immaterial: Rp2,200,000,000,000

Status At the Cassation level

Risk Encountered by the Bank Indemnity for the value of the lawsuit together with the other Defendants

6. Lawsuit of Civil Court registered under No. 572/PDT.G/2018/PN.JKT.SEL

Parties BKPL (Plaintiff I)

Bank (Defendant)

Subject Cancellation of Credit Agreement Addendum

Value Materiil: Rp34,818,314,000 Immateriil: Rp50,000,000

Status At the District Court level

Risk Encountered by the Bank Indemnity for the value of the lawsuit

Annual Report 2018 PT Bank CIMB Niaga Tbk 579 Management Discussion Performance Highlights Management Reports Company Profile and Analysis Risk Management

Legal/Litigation Issues of the Bank and its Subsidiaries

MATERIAL CASES INVOLVING INCUMBENT MEMBERS OF THE BOARDS OF DIRECTORS AND BOARDS OF COMMISSIONERS During 2018, no members of the Bank’s Board of Directors and/or Board of Commissioners were involved in cases and/or civil and/or criminal disputes.

MATERIAL CASES INVOLVING SUBSIDIARIES

CIMB Niaga Auto Finance (CNAF) CNAF’s legal cases in 2018 consisted of civil and criminal cases. In the civil cases CNAF’s role was as a Defendant whereas in the criminal cases CNAF’s role was as the Reporting Party.

Civil

Civil Legal Issues (Bank as Defendant) 2018 2017 2016

Total Cases 9 23 22

Settled Cases (Legally Binding) 4 12 7

Cases in Settlement Process (as of December) 5 11 15

Criminal

Criminal Legal Issues (Bank as Defendant) 2018 2017 2016

Total Cases 76 53 20

Settled Cases (Legally Binding) 23 14 1

Cases in Settlement Process (as of December) 53 39 19

MATERIAL CASES INVOLVING INCUMBENT MEMBERS OF CNAF’S BOARDS OF DIRECTORS AND BOARD OF COMMISSIONERS No members of CNAF’s Board of Directors and Board of Commissioners were involved in cases and/or civil and/or criminal disputes.

IMPACT OF LEGAL ISSUES FOR THE BANK AND ITS SUBSIDIARIES Litigation involving the Bank in 2018 did not materially affect the status, position and/or business continuity of the Bank and its subsidiaries.

Administrative Sanction from Relevant Authorities

Throughout 2018, there were no material administrative members of the Board of Directors and/or members sanctions that affected business sustainability and of the Board of Commissioners from the relevant there were no administrative sanctions imposed on authorities.

580 Annual Report 2018 PT Bank CIMB Niaga Tbk Supporting Corporate Governance Corporate Social Others Consolidated Business Review Report Responsibility Corporate Data Financial Report

Access to Corporate Data and Information

CIMB Niaga regularly updates information and 3. Developing company information transparency, provides easy access for its stakeholders to information both financial and non-financial as well as the regarding the Bank’s activities and performance Bank’s strategies. so they may understand the Bank’s conditions 4. Communicating the Bank’s performance to in a transparent manner. CIMB Niaga provides external parties including investors, fund managers, several facilities as information disclosure channels and potential investors. through various media, including its website (in two 5. Maintaining good relationships and acting as languages), mass media, mailing lists, newsletters, mediator between the Bank and stakeholders by analyst meetings, IDX website, and others. In this managing communication and correspondence regard, the Bank has an Investor Relations unit for with investors, fund manager, analysts, securities building a good image of the Bank through interactive firms, and rating agencies. relationship development with investors/analysts, and 6. Maintaining the Bank’s or its customers’ confidential also regularly delivers information, particularly related information in a proper manner and avoiding to the Bank’s performance. making use of this confidential information for personal interest or the benefit of any other party. CORPORATE DATA AND INFORMATION ACCESS 7. Coordinating the preparation, publication, and Access to the Company’s Data and Information is distribution of Annual Reports to all stakeholders. facilitated through: 8. Providing data and information related to the Bank’s performance through the website to provide • Website: easier and broader access, where the information www.cimbniaga.com provided includes: a. Monthly and quarterly reports publication, LCR • Call Center: & NCFR information, quantitative risk exposure 14041; (021) 29978888 information, capital disclosure reports, and financial statements of the legal primary entity • Customer Care: in accordance with OJK requirements as a [email protected] banking company in Indonesia. b. Consolidated quarterly and year-end audited • e-mail Investor Relations: financial statements publication in accordance [email protected] with OJK requirements as a public company. c. Annual Reports, a comprehensive report to INVESTOR RELATIONS the public and stakeholders concerning CIMB CIMB Niaga has established an Investor Relations Niaga’s performance achievement, business unit to foster good relations and to interact with the and other activities. Investors, the Capital Market, and the Shareholders that includes: INVESTOR RELATIONS ACTIVITIES 1. Developing strategic communication, mainly with A activities with investors and analysts conducted by investors, prospective potential investors, analysts, the Investor Relations Division during 2018, included: fund managers, securities firms, and the general Capital Market community. 2. Preparing financial performance presentation material for the purpose of analyst meetings and teleconferences while ensuring transparency.

Annual Report 2018 PT Bank CIMB Niaga Tbk 581 Management Discussion Performance Highlights Management Reports Company Profile and Analysis Risk Management

Access to Corporate Data and Information

1. Organised 4 (four) Analyst Presentations.

Date Topic Description

25 April 2018 CIMB Niaga 1Q18 Results Conference Call

14 August 2018 CIMB Niaga 1H18 Results Conference Call

31 October 2018 CIMB Niaga 9M18 Results Conference Call

20 February 2019 CIMB Niaga FY18 Results Conference Call

2. Communicated with analysts in 16 (sixteen) SOCIAL MEDIA meetings/teleconferences involving 54 (fifty four) Throughout 2018, CIMB Niaga maintained and capital market managers/analysts. managed 6 (six) social media accounts, as follows: 1. Facebook CIMB Niaga

2018 2. Instagram CIMB Niaga In-House Meetings Meeting FM/Analysts 3. YouTube CIMB Niaga 4. Google+ CIMB Niaga One on one Meetings 9 15 5. Twitter @CIMBNiaga Group Meetings 4 36 6. LinkedIn CIMB Niaga Teleconference 3 3

These accounts serve as media for delivering 3. Organised the Annual Rating Review for Fitch information on the Bank’s activities including brands, Indonesia, Pefindo, Moody’s, and RAM. product offers, tips, and other information. In addition, 3 (three) of these 6 (six) accounts respond to fans/

Rating Agency Date follower inquiries regardless of whether they are

Fitch Rating Indonesia 13 March 2018 CIMB Niaga customers or not. The Bank also uses social media as a communication channel to convey Moody’s 29 March 2018 information related to the Bank’s activities. This is for Pefindo 9 July 2018 the purpose of assisting customers in obtaining clear RAM 5 October 2018 (concall) information and assistance when facing problems with banking transactions. 4. Organised a Public Expose regarding the Bank’s performance and strategies to the media, analysts, In 2018 the Bank held various communication as well as investors on 15 October 2018, at the campaigns using social media as the communication Financial Hall, 2nd Floor of Graha CIMB Niaga, channel. Some of the large-scale social media Jl. Jend. Sudirman Kav. 58, Jakarta. communication activities carried out during 2018 included: 5. Redesigned the Bank’s website, particularly in • Konser Kejar Mimpi communication campaign relationship with GCG and Investor Relations • Seasonal communication campaigns (Chinese disclosure. The Bank is committed to continually New Year, Nyepi, Waisak, Idul Fitri, Independence improving the Transparency Principle as mandated Day, and Christmas) in the Capital Market Law, as well as improving Good • MASA? communication campaign Corporate Governance, especially to shareholders, customers, the public, the government, and other stakeholders through the investor.cimbniaga.co.id microsite that is integrated with the main website www.cimbniaga.com

582 Annual Report 2018 PT Bank CIMB Niaga Tbk Supporting Corporate Governance Corporate Social Others Consolidated Business Review Report Responsibility Corporate Data Financial Report

The Konser Kejar Mimpi communication campaign is Niaga’s brand ambassadors on social media, known a campaign carried out to support one of the Bank’s as CIMB Niaga Onliner. To support this activity, the major events of the same name. The concerts were held Bank uses an application that serves as library content, in 3 cities, Medan, Surabaya, and Bandung, featuring as well as a tool to measure the performance of each Noah and Mady Ayunda as the main performers. CIMB Niaga onliner.

The seasonal communication campaigns are activities Through the Bank’s social media programs and to celebrate the seasonal momentum in Indonesia and activities, the number of followers on Facebook CIMB includes Chinese New Year, Idul Fitri, Independence Niaga at the end of December 2018 reached 1,159,443 Day, Christmas and New Year. For each seasonal people, an increase of 27%, compared to 2017. While @ momentum, the Bank launches communication CIMBNiaga Twitter followers reached 67,661 followers, material videos on its official Facebook and Instagram an increase of 19% compared to 2017. While the @ accounts. CIMB_ Niaga Instagram followers reached 194,695 people, an increase of 60% since the end of 2017. In 2018, CIMB Niaga also continued the MASA? communications campaign to introduce the various CIMB Niaga is aware that the role of social media advantages of CIMB Niaga’s retail banking products. is very effective as a communication tool to convey This campaign is specially designed in the form of information regarding the Bank’s performance. a video series featuring prominent social media Therefore, CIMB Niaga continues to increase social influencers and stand-up comedians in Indonesia. media’s role in conveying the Bank’s messages, or for Each video conveys a message about the benefits receiving input from the general public. The Bank’s of CIMB Niaga’s retail products, including Savings, social media activities run 24 hours, 7 days a week with Mortgages, Credit Cards, and Branchless Banking of a response time below 5 minutes after a comment is CIMB Niaga. made, making CIMB Niaga one of the best companies in the banking industry in terms of social media In 2018, CIMB Niaga continued its initiatives and response time. activities involving its employees to become CIMB

2018 PRESS RELEASE

No. Title Date

1 Improve Financial Literacy, CIMB Niaga Runs the AMDB Program 2 February 2018

2 CIMB Niaga Supports Maudy Ayunda #KejarMimpi Launches the Album “Oxygen” 15 February 2018

3 CIMB Niaga Reports Rp3.0 Trillion Consolidated Net Profit in 2017 26 February 2018

4 To Increase Mortgage, CIMB Niaga Offers Competitive Interest 28 February 2018

5 Realizing the Dream, 100 Students Granted Scholarships from CIMB Niaga 5 March 2018

6 The President Director of CIMB Niaga as the Most Inspiring CEO 7 March 2018

7 Launching the 2018 AMDB Program, CIMB Niaga Educates Millennials in Mataram 12 March 2018

8 CIMB Niaga Syariah Posted Positive Performance Throughout 2017 26 March 2018

9 CIMB Niaga Appreciates Mortgage Business Partners 27 March 2018

10 CIMB Niaga Syariah Acknowledged as the Best Islamic Bank in Indonesia 28 March 2018

11 Supporting the 2018 IndoBuildTech Expo, CIMB Niaga Presents One Stop Financial Solution 3 April 2018

12 Motivating Students to Develop Social Business, CIMB Niaga Held #KejarMimpi Leaders Camp 9 April 2018

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Access to Corporate Data and Information

No. Title Date

13 Expanding the Market, CIMB Niaga Syariah Holds the 2018 Mortgage Syariah Mini Expo in Yogyakarta 17 April 2018

14 Encouraging Mortgage Growth, CIMB Niaga Collaborates with PT Astra Modern Land 18 April 2018

15 Launching “CIMB Niaga Indosat Ooredoo Card”, CIMB Niaga Targets the Millennial Community 19 April 2018

16 CIMB Niaga Wins its Fourth Global CSR Award 20 April 2018

17 CIMB Niaga’s AGM Approves the Distribution of Cash Dividends 24 April 2018

18 CIMB Niaga Reports Consolidated Net Profit of Rp877 Billion in the First Quarter of 2018 25 April 2018

19 First in Indonesia, CIMB Niaga Implements E-Voting at the AGM 26 April 2018

20 CIMB Niaga Presents “Kejar Mimpi“ Concert for Indonesia 27 April 2018

21 CIMB Niaga is the Main Partner of the 2018 IndoBuildTech Expo 2 May 2018

22 CIMB Niaga Syariah Wins Two Awards 3 May 2018

23 Supporting a Healthy Lifestyle, CIMB Niaga Organizes Car Free Day Event 6 May 2018

24 Targeting Teen Gamers, CIMB Niaga Presents Indie Account x AOV Savings 8 May 2018

25 Safari Ramadhan 1439 H, CIMB Niaga Distributes CSR in Various Regions 31 May 2018

26 CIMB Niaga Appreciates Employees with a Victory Concert 4 July 2018

27 Strengthening Relationships, CIMB Niaga Holds Customer Gathering 16 July 2018

28 Commemorating National Children’s Day, CIMB Niaga Holds Tour De Bank in Padang 22 July 2018

The Color Run presented by CIMB Niaga Encourages People to Live Healthy and Discover the “Hero in 29 30 July 2018 You”

30 CIMB Niaga Supports the 2018 Cathay Pacific Travel Fair 2 August 2018

31 CIMB Niaga Encourages Customers to Use GPN Debit Cards 6 August 2018

32 Celebrating the 73rd Indonesian Independence Day, CIMB Niaga Offers KPR Bebas Merdeka 9 August 2018

33 Launching the 2018 Community Link, CIMB Niaga Invites Customers to Realize CSR Ideas 11 August 2018

34 CIMB Niaga Reports Consolidated Net Profit of Rp1.8 Trillion in the First Semester of 2018 14 August 2018

35 CIMB Niaga Syariah Distributes Donations for Victims of the Lombok Earthquake 15 August 2018

36 Developing Digital Banking, CIMB Niaga Syariah Optimizes Technology 20 August 2018

Garuda Indonesia Teams Up with CIMB Niaga for “Garuda Online Travel Fair”, Targets to Achive Rp185 37 23 August 2018 billion

38 CIMB Niaga Holds “Kejar Mimpi untuk Indonesia” Concert in Surabaya 25 August 2018

39 CIMB Niaga Organizes Road to the 2018 CIMB Niaga Namaste Festival in Bandung 31 August 2018

40 CIMB Niaga Syariah and HIJUP Launch “HIJUP Membership Card” 3 September 2018

41 CIMB Niaga Appreciates Customers at the 2018 National Customer Day 4 September 2018

42 CIMB Niaga Holds “Kejar Mimpi untuk Indonesia” Concert in Bandung 7 September 2018

43 Kompas Travel Fair 2018 is Ready to Realize Your Holiday Dream 7 September 2018

44 Go Mobile CIMB Niaga Wins Two Asian Banker Awards 11 September 2018

45 Supporting the JKN-KIS Program, CIMB Niaga Collaborates with BPJS Kesehatan 12 September 2018

The Color Run presented by CIMB Niaga Brightens Jakarta and Invites 13,000 Participants to Find the 46 16 September 2018 “Hero in You”

47 CIMB Niaga Syariah Supports the Development of Hasyim Asy’ari Hospital 19 September 2018

48 2018 CIMB Niaga Namaste Festival Invites to Cultivate a Healthy and Environmentally Friendly Lifestyle 20 September 2018

Celebrating the 63rd Anniversary, CIMB Niaga Delivers Double Decker Bus to Semarang City 49 26 September 2018 Government

50 CIMB Niaga Syariah Wins Two Awards 4 October 2018

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51 CIMB Niaga Offers Sukuk Mudharabah and Subordinated Bonds 15 October 2018

52 CIMB Niaga Launches “CIMB Niaga Syariah Platinum Card” 17 October 2018

53 CIMB Niaga Announces the Resignation of the President Commissioner 19 October 2018

54 2018 CIMB Niaga Namaste Festival, Celebrating a Healthy Lifestyle through Yoga 26 October 2018

55 CIMB Niaga Reports Consolidated Net Profit of Rp2.6 Trillion in the First Nine Months of 2018 31 October 2018

56 2018 KAI Expo Increases the Potential of Indonesian and Asian Railroad Industries 3 November 2018

57 Suporting the Customers’ Business, CIMB Niaga Syariah Organizes Customer Gathering in Medan 8 November 2018

58 CIMB Niaga Announces Winners of the 2018 Community Link Program 9 November 2018

59 Offering a variety of benefits, ‘CIMB Niaga Precious Card’ Meets Women’s Transaction Needs 12 November 2018

60 Supporting Rupiah Stability, CIMB Niaga Offers DNDF Hedging Products 19 November 2018

61 CIMB Niaga Wins the 2018 ASEAN Corporate Governance Awards 23 November 2018

62 Assets of CIMB Niaga Syariah Grew 63.7% in the First Nine Months of 2018 7 December 2018

63 10 Teams Win the CIMB 3D Conquest In Country Hackathon - Indonesia 9 December 2018

64 CIMB Niaga Distributes Scholarships to Invest for Future Talents 13 December 2018

CIMB Niaga EGM Approves Changes in the Composition of the Board of Commissioners and the Board 65 19 December 2018 of Directors

Annual Report 2018 PT Bank CIMB Niaga Tbk 585 Management Discussion Performance Highlights Management Reports Company Profile and Analysis Risk Management

Employees Code of Ethics and Conduct

CIMB Niaga has implemented an Employee Code CODE OF ETHICS AND CONDUCT PRINCIPLES/ of Ethics and Conduct that serves as guidance for CONTENTS all CIMB Niaga employees in carrying out their daily CIMB Niaga Code of Ethics and Conduct sets out 6 (six) tasks and responsibilities. CIMB Niaga’s Code of Ethics ethical principles comprising the following: and Conduct serves as the basis for the employees’ • Integrity attitude and behaviour to work in a professional and Employees shall maintain integrity at any times ethical manner using the basic principles that refer to by behaving honestly, respecting each other, and the Bank’s vision, mission and core values, as well as acting professionally. internal rules and external regulations. The Employee • Confidentiality Code of Ethics and Conduct applies to all levels of the Each employee shall protect the confidentiality organization including the Board of Commissioners, of the information provided to them, including Board of Directors and all employees when conducting customer data and shall use the information business relationships with customers, partners and only for the purpose set by the Bank. Information colleagues. Implementing the Code of Ethics and disclosure must only be made in accordance with Conduct represents the Bank’s commitment to the the Bank’s internal policies and all prevailing rules Corporate Governance principles, as well as efforts to and regulations. achieve the Bank’s Vision and Mission. • Competence Each employee shall implement and develop the CODE OF ETHICS AND CONDUCT OBJECTIVES knowledge and skills required to maintain the The objectives of the Code of Ethics and Conduct are level of professionalism including consistently as follows: improving and updating their skills or qualifications 1. To serve as a guideline in the creation of as required. management policies, procedures and practices at • Conflict of Interest the Bank. Each employee shall avoid situations and conditions 2. To govern the attitude, behaviour, and that could trigger a conflict of interest. Should there responsibilities of employees and people who be any issues that may affect the objectivity of an work for and on behalf of the Bank to work in a employee’s assessment, the employee shall report professional and ethical manner. this matter to the Bank. 3. To serve as basic guidelines for attitude and • Justice behaviour in carrying out tasks and decision- Employees shall behave in an accountable manner making. and shall uphold the culture of fairness and 4. To provide an understanding regarding the openness in every interaction with all stakeholders. propriety of employees in establishing relationships Employees are also required to act impartially with the Bank, relationships between co-workers, and in accordance with business ethics as well as relationships with customers, relationships with prevailing regulations, both of which are set forth regulators, relationships with business partners in the Bank’s internal policies and regulations and relationships with the public. from the authorities. In addition, employees are 5. To ensure similarity and consistency of attitude prohibited from taking any actions that conflict and behaviour among employees in their daily with prevailing rules and regulations. operational activities.

586 Annual Report 2018 PT Bank CIMB Niaga Tbk Supporting Corporate Governance Corporate Social Others Consolidated Business Review Report Responsibility Corporate Data Financial Report

• Mutual Respect EMPLOYEE CODE OF ETHICS AND CONDUCT The Bank shall treat all employees with fairness, STATEMENT dignity and respect, and expects all employees to CIMB Niaga’s Code of Ethics and Conduct serves as a behave honestly, to uphold integrity and to respect standard for behaviour that must be adopted by all each other to maintain good relationships. CIMB Niaga employees when carrying out business activities including interacting with stakeholders. All these ethical principles shall serve as the basis Accordingly, the Bank imposes an obligation to for every employee to interact professionally when comply with the Code of Ethics and Conduct for carrying out their daily work. all employees including the Board of Directors and Board of Commissioners. Employees are required to In addition, the contents of CIMB Niaga’s Code of thoroughly study and understand the contents of this Ethics and Conduct also govern the behaviour that policy and attest with a statement of commitment shall serve as a guideline and reference for employees every year. Implementing the Code of Ethics and in behaving and interacting with stakeholders. The Conduct is the responsibility of all employees at all main contents of the Code of Ethics and Conduct levels of the organization, as well as being one of include the following: the Bank’s commitments to implementing Good 1. Anti bribery and corruption; Corporate Governance to achieve its established vision 2. Anti insider trading; and mission. 3. Anti fraud; 4. Provisions in managing conflicts of interest; CODE OF ETHICS AND CONDUCT SOCIALIZATION 5. Provisions for giving and accepting gratification; AND ENFORCEMENT EFFORTS 6. Provisions regarding financial benefits and CIMB Niaga’s Code of Ethics and Conduct has been employment outside the Bank; disseminated and communicated to the Board of 7. Whistleblowing; Commissioners and its committees, the Board of 8. Provisions regarding the ownership and Directors and Officers one level below the Board confidentiality of customer’s, bank’s and other of Directors, and all employees. The Code of Ethics stakeholder’s information; and Conduct is socialized to foster awareness and 9. Provisions for using Bank assets; understanding to behave in a manner that is in 10. Provisions in using social media; accordance with the Bank’s core values. 11. Prohibition of conducting transactions with customers; The Bank periodically conducts socialization through 12. Provisions for managing customer complaints; various media. Annually, all employees are required 13. Compliance and reporting to regulators; to sign a declaration of commitment to the Code 14. Anti money laundering policy; of Ethics and Conduct. To further enhance the 15. Anti-competition policy; employees’ understanding of the Code of Ethics and 16. Corporate social responsibility culture. Conduct, the Bank has prepared online guidelines and learning materials through the Learning on the Go (LoG) application together with an evaluation module. In addition, CIMB Niaga’s Code of Ethics and Conduct is uploaded to the Bank’s internal website (e-Manual) so as to make it easily accessible by employees.

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Employees Code of Ethics and Conduct

CIMB Niaga continuously monitors the implementation TYPES OF SANCTIONS AND NUMBER OF BREACHES of the Employee Code of Ethics and Conduct and OF THE CODE OF ETHICS AND CONDUCT IN 2018 strictly imposes sanctions for employees breaching CIMB Niaga imposes sanctions for any employee the provisions. CIMB Niaga provides 2 (two) reporting who breaches the prevailing regulations. In 2018 channels including: there were 494 employees who received sanctions 1. Communication channels that are managed including Coaching, Reprimand Letter, Warning Letter internally by CIMB Niaga through the following 1, Warning Letter 2, Warning Letter 3 to Termination of media: Employment. a. Electronic Mail: [email protected] b. Call & text to telephone number: 087829652767 Total Violation of Code of Ethics and Conduct in 2018 (0878 LET’S REPORT) 196 2. Communication channels managed by PT Deloitte Indonesia as the third party appointed to manage whistleblowing reports through the following media: 89 a. Website: http://ayolapor.tipoffs.info 80 85

b. Email: [email protected] 44 c. Phone: 14031 d. SMS & WA: +62 822 11356363 0 e. Facsimile: +62 21 2856 5231 Coaching Reprimand Warning Warning Warning Termination of f. Letter: PO BOX 3331 JKP 10033 Letter Letter 1 Letter 2 Letter 3 Employment

Disciplinary Enforcement Policy and Sanctions Imposed for Violations

The Bank has a Disciplinary Enforcement and Coaching, or sanctions to be imposed on employees, Sanctions for Breach Policy No. A.11.02 that governs are adjusted based on the severity of the violation, the sanctions to be imposed for violations conducted starting with a reprimand letter, written warning letter, by employees. This policy also regulates the roles and to termination of employment. To maintain objectivity, responsibilities of the immediate supervisor and the the decision on sanctions to be imposed for each level business unit head, the duties and responsibilities of severity is decided by the Disciplinary Committee in of the relevant unit in handling the violations, and accordance with prevailing regulations. the duties and responsibilities of the Disciplinary Committee in determining the corrective actions for employees who commit violations.

588 Annual Report 2018 PT Bank CIMB Niaga Tbk Supporting Corporate Governance Corporate Social Others Consolidated Business Review Report Responsibility Corporate Data Financial Report

Corporate Culture

Corporate Culture plays an important role in the • Real action from the Board of Directors (tone from achievement and success of the Bank’s plans and the top) to listen and discuss employee aspirations strategies. Accordingly, CIMB Niaga has emphasized the directly, to capture hurdles that occur in the field and importance of internalizing the Bank’s Core Values as a quickly finding a better solution. The Board of Directors basic principle for interactions between fellow colleagues listens to feedback on the Bank’s future strategy, and customers, and it has become a foundation for and continues to build better communication and behaviour in the workplace. In line with this, CIMB Niaga collaboration at all times upholds and adopts the Core Values in a • Activating Informal Leaders and Business Sponsors consistent manner at each organization level. The Core Network in various units to actively and continuously Values of CIMB Niaga are known as “CHESI”, and consist play the part of role models for other co-workers in of: CIMB Niaga in implementing the 3 (three) Critical 1. “Customer-Centric”, we exist to serve our Behaviours in their daily work life. customers and we sell products and services that • Cultural Campaigns, organizing activities with our customers understand and value, certain themes related to the implementation of 2. “High Performance”, we work hard and we work the Bank’s Culture such as “Culture Day”, “ABC Torch strategically for our customers, staff and other of Recognition” relays with members of the Board stakeholders, of Directors to the best employees as a tangible 3. “Enabling People”, we encourage our people to manifestation of management’s appreciation, think big and look wide and ensure that they are an action to love the CIMB Niaga workplace and appropriately empowered to deliver value, environment called “Care with our Home”, the 4. “Strength in Diversity”, we have respect for healthy lifestyle program called “90 Days Healthy different cultures, we value varied perspectives and Life Challenges”, and various corporate social we recognise diversity as a source of strength, responsibility (CSR) activities that build a cultural 5. “Integrity”, we are honest, respectful and awareness in line with Bank’s Culture and Core professional in everything we do because integrity Values. is the founding value of CIMB Niaga. • The internalization approach of the Bank’s Core Values and Culture through digitalization and The Bank’s five Core Values are manifested through gamification that can be accessed from each 3 (three) Critical Behaviours to be performed on a employee’s mobile device through the Learning on consistent basis by all of the Bank’s employees. The the Go (LoG) application. With this approach, the (three) Critical Behaviours are: process of internalizing Bank’s Culture and Core 1. “Go the extra-mile to delight customers” Values is no longer limited by the dimensions of time 2. “Respect each other, engage openly and work and space. together” 3. “Recognise each other’s efforts and always back In addition, CIMB Niaga intensively and continuously each other up” runs initiatives to improve risk and compliance awareness through various programs including campaigns, CIMB Niaga believes that these 3 (three) Critical intensive communication through various media, joint Behaviours have served as the main catalysts in discussion programs to discuss matters related to risk supporting the Bank’s accelerated progress towards a and compliance, including discussions on case studies, better direction, supporting excellent customer service, as well as internal and external certification for all and improving the effectiveness of cooperation between employees through learning media, either classroom employees to create synergy between individuals, units learning, digital learning or other learning media. or functions. During 2018, the process of implementing CIMB Niaga’s core values was carried out through various activities, including:

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Goods and Services Procurement Policy

POLICY IMPLEMENTATION approval limit, classification, as well as segregation of CIMB Niaga’s Goods and Services Procurement Policy duties and responsibilities in the Bank’s goods and/or is a manifestation of the Corporate Governance process services procurement process. based on transparency in terms of procurement. The policy is the main reference for the procurement ACTIVITIES RELATED TO CRITERIA AND SELECTION of goods and/or services activities carried out by OF VENDORS (SUPPPLIERS) the Bank’s work units, and conventional and Sharia Vendors involved in procurement of goods and/or Business Units. The Bank’s goods and/or services services are vendors that have been registered through procurement process follows a bidding process by the vendor verification process prior to entering into a considering several aspects, including: business relationship with the Bank, and this will be 1. Adopting the transparency principle and avoiding regularly reviewed. The vendor verification process conflicts of interest; includes: 2. Focusing on the objective of obtaining the best 1. Ensuring the completeness of the vendor’s business quality of goods and/or services as well as optimal license, in accordance with all prevailing rules and purchasing efficiency by comparing quality and regulations. prices offered by Vendors. 2. Conducting a site visit to the vendor’s business location The Bank has designated the Strategic Procurement 3. Performing a cross check on references provided. and Administration Property Management (SPAPM) 4. Vendor screening by applying the Bank Indonesia under the Strategy & Finance as Directorate the Black List and Anti Money Laundering application, coordinator for the Bank’s goods and/or services and the Financial Information Service System procurement. During the process, the unit also application. involves other Bank units, including Legal, Finance, 5. Ensuring vendor’s apply and support the principle Internal Audit, and Operational Risk Management to of sustainability in their operations by providing ensure the Corporate Governance process is followed questionnaires related to Economic, Social, and the to the highest standards. All procurement processes Environment follow the applicable procedures, including authority,

590 Annual Report 2018 PT Bank CIMB Niaga Tbk Supporting Corporate Governance Corporate Social Others Consolidated Business Review Report Responsibility Corporate Data Financial Report

Conflict Of Interest Management Policy (Including Insider Trading)

The Conflict Management policy aims to establish Any employee or management who conducts rules, identify, reduce, and manage any potential transactions on the Bank’s or CIMB Group’s Securities Conflicts of Interest that may arise within the Bank (outside the Blackout period) is required to obtain due to the Bank’s business unit activities that obtain prior written approval from the Bank’s Control Room information about the Bank, the Bank’s customers, or (Corporate Affairs Unit) no later than 2 (two) business the CIMB Group. days prior to the planned transaction, and from the CIMB Group Control Room by completing the This Bank policy regulates the trading procedure for employee transaction request form. the Bank and CIMB Group’s securities and reaffirms the prohibition of Insider Trading in private securities Also, if an employee and/or management has transactions by employees and the management conducted a transaction, a notification to the Bank’s (in this case members of the Board of Directors and Control Room (Corporate Affairs unit) is required no the Board of Commissioners). Specifically, for certain later than 2 (two) days after the transaction occurred. periods, this Policy also regulates a Blackout period This policy is expected to mitigate the use of insider when all employees and management are prohibited information for the personal interest of employees and from conducting any transactions of the Bank’s management (insiders). Securities.

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Internal Fraud

CIMB Niaga’s Anti-Fraud Policy is part of the Bank’s Senior Management also convey the tone from the Internal Control System for building a compliance top related to the Bank’s Anti- Fraud culture. culture, and for creating a greater level of risk awareness • Morning Briefing Series, the delivery of Anti-Fraud on the potential and consequences of fraud at all Awareness material in Morning Briefing sessions at levels within the organization. The Anti-Fraud Policy branch offices every 2 (two) weeks. has been covered in the Risk Management discussion, • Campaign on Speak Up Culture, the dissemination which is an integral part of this Annual Report. of the Speak Up culture, as an integral part of each Anti-Fraud program. CIMB Niaga’s Anti-Fraud Policy regulates the framework, governance and implementation of the In addition, the Bank continuously holds mandatory anti-fraud strategy, and represents the Bank’s strategy Anti-Fraud Awareness training for both new and existing for controlling fraud by taking into account the employees aimed at increasing employee knowledge characteristics and scope of potential fraud and has regarding the prevention and consequences of fraud. been implemented in the fraud control system. In 2018, 4,212 employees attended Anti-Fraud training both face-to-face and through e-Learning media, In an effort to improve the Fraud risk awareness culture namely the Learning on the Go (LoG) application. level, the Bank organized several activities related to Anti-Fraud Awareness in 2018, including: These activities resulted in a significant decrease • Leaders Round Table, seminars/training organized in fraud cases in 2018, reflecting an increase in Anti- for branch/division heads that also involve the Board Fraud Awareness and the compliance culture at all of Directors and Senior Leaders, where two-way levels of the Bank’s organization. Through the Speak communication and a comprehensive discussion Up culture, several fraud cases in 2018 were the result regarding operations and fraud mitigations are of follow-up results of reports submitted through the created in the forums. The Board of Directors/ Whistle Blowing Service media.

The following table shows information related to fraud violation data committed by the Bank’s management, permanent and non-permanent employees, associated with work processes and the operational activities with a nominal value exceeding Rp100,000,000. The nominal value has not taken into account any recoveries obtained during efforts to save the Bank’s assets. CIMB Niaga always imposes strict sanctions with no exception to perpetrators of fraud.

Total Cases Committed by

Board of Commissioners and Internal Fraud Case Permanent Employees Non-permanent Employees Board of Directors

2018 2017 2018 2017 2018 2017

Resolved - - 3 11 - -

In the process of internal resolution - - 2 - - -

Unresolved/Under Investigation ------

Already in Legal Proceedings - - 1 - - -

Total Fraud - - 6 11 - -

Note: The data represents fraud cases with financial impact exceeding Rp100 million.

592 Annual Report 2018 PT Bank CIMB Niaga Tbk Supporting Corporate Governance Corporate Social Others Consolidated Business Review Report Responsibility Corporate Data Financial Report

Whistleblowing System

As a manifestation of its Internal Control effort, CIMB 2018 all reports submitted to our internal media e-mail Niaga established a whistleblowing policy and system will be automatically forwarded to the e-mail managed in 2011 and has been gradually improving the reporting by PT Deloitte Konsultan Indonesia. While reports via mechanism as well as the dissemination of the reporting telephone/SMS media to the number 087829652767 media. CIMB Niaga implemented the whistleblowing (0878 AYO LAPOR) or direct complaints to Bank’s system in a comprehensive manner across all aspects Officers/Regulators will also be registered as e-mails of Bank’s business activities. The whistleblowing system managed by PT Deloitte Konsultan Indonesia. This (WBS) policy in CIMB Niaga refers to PBI No. 5/8/PBI/2003, was carried out to create a centralized administrative which was amended by PBI No.11/23/PBI/2009 and SEBI system. No. 13/28/DPNP regarding Anti-Fraud Policy. WHISTLEBLOWER PROTECTION Since 4 December 2017, the Bank has appointed The Bank provides freedom for the whistle-blowers by PT Deloitte Konsultan Indonesia as the third party to not requiring them to disclose their identity or to provide manage the whistleblowing reports. The appointment of evidence of the reported violation. However, if the whistle- a third party for the CIMB Niaga whistleblowing system blower has evidence in the form of data, information, or is intended to encourage whistle-blowers to report any an early indication about the violation, then it can be violations or indication of fraud in a more convenient and included in the report. Each whistle-blower must have transparent manner. a strong reason for reporting a violation or potential violation, and must act in a good faith. The implementation mechanism and results of the whistleblowing system results throughout 2018 are shown The Bank guarantees protection to the whistle- blowers below. who with good intention have reported any violations that may cause losses for the Bank. The Bank also guarantees REPORTING CHANNELS the confidentiality of the whistle- blower’s identity and Any parties, both internal and external, can submit protects the whistle-blowers at the time of reporting, or Whistleblowing reports to the Bank. CIMB Niaga when the report is being followed-up by an investigation provides 2 (two) communication channels as reporting unit, as stipulated in the Bank’s internal policies. To ensure channels: the confidentiality of those reporters who include their 1. CIMB Niaga’s internally-managed communication identity, the name of the whistle-blower is only disclosed channels: to the designated whistleblowing officer. • E-mail : [email protected] • Phone or SMS : 087829652767 (0878 AYO VIOLATION HANDLING LAPOR) Information submitted by the whistle-blowers will be treated as confidential information. The whistleblowing 2. Communication channels managed by PT Deloitte officer will analyse all received reports in accordance with Konsultan Indonesia as the designated third-party the basic principles of whistleblowing management. to manage whistleblowing reports, through: For reports that show the identity of the whistle-blower • Website : http://ayolapor.tipoffs.info along with the contact number/email, can be contacted • E-mail : [email protected] in the event additional information is required, and the • Phone : 14031 whistleblowing officer will contact the whistle- blower in • SMS & WA : +62 822 11356363 a discreet manner to request for the necessary additional • Facsimile : +62 21 2856 5231 information. However, in the event the whistle-blower • Mail : Ayo Lapor PO BOX 3331 JKP 10033 does not disclose the contact number/email, then if the Bank requires additional information, it will be submitted To optimize the whistleblowing service function through PT Deloitte Konsultan Indonesia to be forwarded through PT Deloitte Konsultan Indonesia, starting in to the whistle-blower.

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Whistleblowing System

If the initial information is deemed sufficient, the are also appointed as coordinator of CIMB Niaga’s whistleblowing officer will convey it to the related work whistleblowing handling. unit for further follow-up. 3. The Whistleblowing Committee consists of D-1 officers in charge of Anti-Fraud Management, The whistle-blower will receive information regarding Compliance/AML and Human Resources in the status of the report through PT Deloitte Konsultan accordance with the scope/type of reports managed Indonesia. In the event the submitted report is not relevant by the whistleblowing service. The Whistleblowing (out of scope) with the scope of the whistleblowing Committee has the authority to provide approvals or service, the whistleblowing officer will forward it to the decisions on whether the reports can be followed up relevant parties for further follow-up. The whistleblowing with inspection process, are invalid, can be closed, or officer shall administer violation reports. re-opened if further information related to the report is discovered. For the purpose of supervision and the whistleblowing 4. The Whistleblowing Officers are employees from investigation process, the whistleblowing report results the Anti-Fraud Management, Compliance/AML are periodically submitted to the Director in charge and Human Resources unit who are appointed of the whistleblowing service, who is the Compliance to manage whistleblowing reports related to Director, with a copy to the Director in charge of Risk each category of report. The main duties and Management, and the Director in charge of Human responsibilities of the Whistleblowing Officer are to Resources, as well as all members of the whistleblowing carry out analysis related to the reports and submit Committee. Furthermore, for performing the Board them to the Whistleblowing Committee for follow- of Commissioners oversight function, whistleblowing up actions that must be taken, and to ensure the reports will be submitted periodically (on a quarterly updating of data concerning the status of the report. basis) to a committee at Board of Commissioners level, Particularly for the Whistle Blowing Officer from the namely the Audit Committee. Anti-Fraud Management unit, and in accordance with the function of the Anti-Fraud Management PARTIES MANAGING VIOLATIONS unit as a coordinator, the Anti-Fraud Management Based on the Bank’s internal policy, the parties Whistle Blowing Officer also serves as a CIMB Niaga appointed to manage whistleblowing include: Whistleblowing Officer to assist the task of the 1. The person in charge of CIMB Niaga’s whistleblowing Whistleblowing Service Coordinator. service is the Director in charge of Compliance with 5. The Chief Audit Executive (CAE) performs an the main duties and responsibilities of overseeing the independent oversight function related to the process of whistleblowing reports handling to ensure governance of the Whistleblowing Service System the compliance with the relevant procedures and handling process. regulations. 2. The coordinator of CIMB Niaga’s whistleblowing WHISTLEBLOWING RESULTS AND FOLLOW-UPS service is the Anti-Fraud Management unit, in which In 2018, there were 228 (two hundred twenty eight) D-1 officers in charge of Anti-Fraud Management whistleblowing reports received. All reports were followed up and resolved, with the following details:

Whistleblowing (WB) Report Status Total Total WB Reports received 228 1. WB reports investigated 83 2. WB reports not investigated (pre-CLOSED) 145 3. WB Reports investigated and concluded (Status CLOSED) 62 4. WB Reports under ongoing investigation (Status OPEN) 21 5. WB Reports proven based on investigation 32

594 Annual Report 2018 PT Bank CIMB Niaga Tbk Supporting Corporate Governance Corporate Social Others Consolidated Business Review Report Responsibility Corporate Data Financial Report

Implementation of Corporate Governance Guidelines for Public Companies

CIMB Niaga complies with the practices of good corporate governance pursuant to Financial Services Authority (POJK) Regulation No. 21/POJK.04/2015 regarding the Implementation of Corporate Governance Guidelines for Public Companies, and the Financial Services Authority (SEOJK) Circular No. 32/SEOJK.04/2015 regarding Corporate Governance Guidelines for Public Companies. These regulations contain 5 (five) aspects, 8 (eight) principles, and 25 (twenty five) recommendations on corporate governance recommended by OJK. CIMB Niaga implements such aspects, principles and recommendations based on the “comply or explain” approach as follows:

Aspect Principle Recommendation Implementation

Relationship Principle 1 1.1. The Public company has technical Comply of The Public Improve the procedures for opened or closed Company with the Implementation Value voting that promote independency As an effort to enhance independence, freedom, Shareholders in of the General Meeting and interest of the shareholders and confidentiality of shareholders in the voting ensuring the Right of Shareholders (GMS) process, CIMB Niaga adopted a policy of voting at of the Shareholders the GMS in private and electronic voting (e-voting) for each agenda of the GMS. This policy is disclosed in the GMS’s Rules of Conduct.

In the Annual GMS (AGM) and Extraordinary GMS (EGM) held in 2018, the voting mechanism is carried out in private and e-voting, by using touch screen provided by CIMB Niaga, smartphones or other mobile devices (tablet, ipad, and others) owned by the Shareholders or their proxies. CIMB Niaga became the first public company in Indonesia to hold e-voting. The vote count was carried out by independent parties, namely the Share Registrar Bureau, PT Sirca Datapro Perdana and Notary, Ashoya Ratam, SH. Thus the independence and interests of the shareholders in voting process shall be maintained.

The GMS Rules of Conduct was uploaded on the Bank’s website 21 (twenty one) days prior to the GMS, distributed to the shareholders upon entering the GMS meeting room, and being conveyed by the Corporate Secretary prior the start of the GMS.

1.2 All members of the Board of Comply Directors and the Board of Commissioners are present at the All members of the Board of Directors and Board of Annual GMS Commissioners of CIMB Niaga were present at the AGM on 24 April 2018

Members of the Board of Directors and the Board of Commissioners present at the AGM may represent the Bank to provide explanation of each agenda of the AGM and the AGM can be implemented properly.

1.3 Summary of GMS minutes is Comply available on the public company’s website at least for 1 (one) year CIMB Niaga uploaded the summary of the minutes of GMS immediately after the adjournment of the AGM and EGM.

The summary of the minutes of GMS from 2013 to 2018 are available on Bank’s website up to the present day, both Indonesian and English version.

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Implementation of Corporate Governance Guidelines for Public Companies

Aspect Principle Recommendation Implementation

Relationship Principle 2 2.1 The Public Company has a Comply of The Public Improving communication policy with the Company with the Communication Quality shareholders or investors CIMB Niaga established policy of communication Shareholders in of the Public Company with the shareholders or investors that has been ensuring the Right with Shareholders or uploaded to the CIMB Niaga’s website (www. of the Shareholders Investors cimbniaga.com).

Communication carried out by the Bank includes the implementation of the GMS, Public Expose, Analyst Meetings, providing quarterly and annual Financial Reports, and provide information disclosure in an accurate and timely manner. CIMB Niaga also provides information on head office and branch address, e-mail addresses and telephone number both on the website and Annual Report, access to Social Media (Facebook, Twitter, Instagram), Call Center, as a channels for the shareholders and investors to be able to communicate with the Bank easily.

2.2 The Public company discloses its Comply communication policy with the shareholders or investors on the CIMB Niaga’s policy of communication with the website shareholders or investors is uploaded to the CIMB Niaga’s website (www.cimbniaga.com).

Function and Role Principle 3 3.1 Determination of the number of Comply of the Board of Strengthen the Board of Commissioners members Commissioners Membership and shall consider the condition of the Total members of the Board of Commissioners of Composition Public Company CIMB Niaga is in compliance with the prevailing of the Board of provisions and considered the Bank’s needs, Commissioners condition, and capability.

As of December 2018, total member of the Board of Commissioners are 7 (seven) person, where 4 (four) of them (>50%) are Independent Commissioners. Total members of the Board of Commissioners are lower than the total members of the Board of Directors

3.2 Determination of composition Comply of the Board of Commissioners members considers the necessary The Board of Commissioners of CIMB Niaga has of diversity, expertise, knowledge a diverse backgrounds in terms of expertise, and experience. knowledge, experience, and citizenship with the objective to support the development of Bank’s business. This shown in the profiles of each member of the Board of Commissioners.

Principle 4 4.1 The Board of Commissioners has a Comply Improve the self-assessment policy to evaluate Implementation and the its performance. The assessment policy of the Board of Quality of the Duties Commissioners and the Committees under the and Responsibilities Board of Commissioners is set out in the attachment of the Board of of the Nomination and Remuneration Committee Commissioners Charter which accessible through the CIMB Niaga’s website (www.cimbniaga.com).

4.2 The self-assessment policy of Comply the performance of the Board of Commissioners is disclosed in The assessment policy of the Board of the Annual Report of the Public Commissioners is set out in the attachments of the Company Nomination and Remuneration Committee Charter and the results of the assessment is disclosed in the GCG Report Section in this Annual Report.

4.3 The Board of Commissioners Comply has a policy with respect to the resignation of Board of CIMB Niaga’s Board of Commissioners Charter (point Commissioners members if such XI.4.) has stipulated that members of the Board of member is involved in financial Commissioners who are involved in financial crimes crime and/or other criminal offenses are required to resign from their positions

596 Annual Report 2018 PT Bank CIMB Niaga Tbk Supporting Corporate Governance Corporate Social Others Consolidated Business Review Report Responsibility Corporate Data Financial Report

Aspect Principle Recommendation Implementation

4.4 The Board of Commissioners or the Comply Nomination and Remuneration Committee shall prepare the The succession policy has been stipulated in the succession policy in the nomination Nomination and Remuneration Committee Charter process of the Board of Directors’ and in the Policy of Nomination of members of the members Board of Commissioenrs, Board of Directors and Committees under the Board of Commissioners as well as disclosed in the Report on the Implementation of Duties of the Nomination and Remuneration Committee in this Annual Report.

Function and Role Principle 5 5.1 Determination of the number Comply of the Board of Strengthen the of Board of Directors’ members Directors Membership and considers the condition of the Public Without prejudice to the effectiveness of decision Composition of the Company and the effectiveness of making by the Board of Directors, the determination Board of Directors decision-making of the number of members of the Board of Directors of CIMB Niaga shall consider: - The Bank’s financial condition and ability - Organizational needs and the complexity of the Bank as the 2nd largest private banks in Indonesia

As of December 2018, the number of Board of Directors’ members are 11 (eleven) people. The total members of the Board of Directors is more than the total members of the Board of Commissioners

5.2 Determination of composition of Comply the Board of Directors’ members considers the necessary of CIMB Niaga’s Board of Directors has a diverse diversity, expertise, knowledge, backgrounds in terms of expertise, knowledge and experience required and experience. This shown in the profile of each member of the Board of Directors

The diversity and total members of the Board of Directors are required to provide the best possible solution to Bank, in accordance with the Bank’s needs, size, and business complexity.

5.3 Members of the Board of Directors Comply who are responsible for accounting or finance have accounting The Director of Strategy and Finance of CIMB Niaga, expertise and/or knowledge who responsible for accounting and finance, is Mr. Wan Razly Abdullah

He holds a degree in Law and Accounting from the University of Manchester, UK and has experience in several foreign companies as well as being a member of the Institute of Chartered Accountants of England and Wales. Mr Wan Razly Abdullah meets the criteria of having the accounting expertise and knowledge.

Principle 6 6.1 The Board of Directors has a self- Comply Improve the assessment policy to evaluate its Implementation of own performance. The assessment policy for the Board of Directors is Quality of Duties and stipulated in the attachments of the Nomination and Responsibilities of the Remuneration Committee Charter which accessible Board of Directors through the CIMB Niaga’s website (www.cimbniaga. com).

6.2 The self-assessment policy to Comply evaluate the performance of the Board of Directors is disclosed in The assessment policy for the Board of Directors the Annual Report of the Public is stipulated in the attachments of the Nomination Company and Remuneration Committee Charter and the results of assessment is disclosed in the GCG Report in this Annual Report.

6.3 The Board of Directors has a policy Comply related to resignation of the Board of Directors’ members if involved in CIMB Niaga’s Board of Directors’ Charter (point financial crime XI.4.) has stipulated that members of the Board of Directors involved in financial crimes and/or other crimes are required to resign from their positions

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Implementation of Corporate Governance Guidelines for Public Companies

Aspect Principle Recommendation Implementation

Stakeholders’ Principle 7 7.1 The Public company has a policy to Comply Participation Improving Corporate prevent insider trading Governance through To prevent Insider Trading, CIMB Niaga already has a the Participation of Conflict Management Policy that has been uploaded Stakeholders to the CIMB Niaga’s website (www.cimbniaga.com).

This policy establishes the rules, identify, mitigate, and manage any potential conflicts of interest that may arise within the Bank as a result of activities conducted by the Bank’s business units that enable them to obtain information about the Bank, the Bank’s customers, or the CIMB Group.

7.2 The Public Company has an anti- Comply corruption and anti-fraud policy CIMB Niaga has regulated Bank’s anti-corruption policies which included in the CIMB Niaga’s Code of Ethics and Conduct.

CIMB Niaga has an anti-fraud strategy that is implemented in the form of a fraud control system, using tools that are an elaboration of the 4 (four) pillars namely; Prevention, Detection, Investigation, and Supervision

Further description on anti-corruption and anti- fraud policies are described in this Annual Report

7.3 The Public Company has policies Comply concerning selection and capability improvement of suppliers and CIMB Niaga already has a Procurement of Goods vendors and Services Policy (No. E.04.A.06) as well as Goods and Services Procurement Procedures (No. E.04.A.06.P.01) that are disclosed in the Procurement Policy section of this Annual Report.

CIMB Niaga’s Code of Conduct also regulates the relationship with suppliers, vendors, and consultants (partners) that are in collaboration with the Bank, including objective evaluation, prohibition of acceptance of compensation from partners, compliance of the partners with the Bank’s code of conduct as well as consultation and lobbying with partners.

7.4 The Public Company has a policy Comply concerning the fulfillment of creditor’s rights CIMB Niaga established its Policy of the Fullfillment of Creditor’s Rights which accessble through CIMB Niaga’s website (www.cimbniaga.com).

This policy stipulated that CIMB Niaga shall apply and respect to creditor’s rights through equal treatment of all creditor, exercising the rights and obligations in a timely manner with no hidden corporate information.

7.5 The Public Company has a Comply whistleblowing policy CIMB Niaga already has a Whistleblowing Policy (No. E.08,) which is disclosed in this Annual Report with the same topic.

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Aspect Principle Recommendation Implementation

7.6 The Public Company has a long- Comply term incentive policy for the Board of Directors and employees CIMB Niaga established its Risk-based Remuneration Policy which stipulated the policy of long-term incentive for the Board of Directors and employees classified as Material Risk Taker (MRT). The explanation of CIMB Niaga Remuneration Policy disclosed in detail in the Remuneration Policy in the GCG Report of this Annual Report.

Disclosure of Principle 8 8.1 The Public Company benefits from Comply Information Improve the the use of broader information Implementation of technology other than its website as In addition to the website, CIMB Niaga also utilizes Information Disclosure a means of information disclosure. other information technologies such as phone banking, radio, print media, and social media platforms (such as Instagram, Facebook, Twitter, Youtube and Google+) as media channels for disclosure of information

More details of social media activities are disclosed in the Information Access and Corporate Data section of this Annual Report

8.2 The Annual Report of the Public Comply Company discloses share ownership of at least 5%, other than disclosure CIMB Niaga has no shareholders that own 5% of of ultimate shareholders of the shares other than ultimate shareholders (CIMB Public Company through major and Group), as disclosed in the section of Shares and controlling shareholders Other Securities Information in this Annual Report

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A Rights of Shareholders

A.1 Basic Shareholder Rights

A.1.1 Does the company pay (interim and final/annual) dividends in an equitable and timely manner; that is, 419 & 567 all shareholders are treated equally and paid within 30 days after being (i) declared for interim dividends and (ii) approved by annual general meeting (AGM) for final dividends?

A.2 Right to participate in decisions concerning fundamental corporate changes

Do shareholders have the right to participate in:

A.2.1 Amendments to the company’s constitution? 415

A.2.2 The authorization of additional shares? 415

A.2.3 The transfer of all or substantially all assets, which in effect results in the sale of the company? 415

A.3 Right to participate effectively in and vote in general shareholder meeting and should be informed of the rules, including voting procedures that govern general shareholder meetings

A.3.1 Do shareholders have the opportunity, evidenced by an agenda item, to approve remuneration (fees, 415 allowances, benefit-in-kind and other emoluments) or any increases in remuneration for the non- executive directors/commissioners?

A.3.2 Does the company provide non-controlling shareholders a right to nominate candidates for board of 440 & 463 directors/commissioners?

A.3.3 Does the company allows shareholders to elect directors/commissioners individually? 418-425

A.3.4 Does the company disclose the voting procedures used before the start of meeting? 418-423

A.3.5 Do the minutes of the most recent AGM record that the shareholders were given the opportunity to ask 416 & 422 questions and the questions raised by shareholders and answers given recorded?

A.3.6 Does the company disclose the voting results including approving, dissenting, and abstaining votes for 418-421 all resolutions/each agenda item for the most recent AGM?

A.3.7 Does the company disclose the list of board members who attended the most recent AGM? 416

A.3.8 Does the company disclose that all board members and the CEO (if he is not a board member) attended 416 the most recent AGM?

A.3.9 Does the company allow voting in absentia? 418 & 423

A.3.10 Did the company vote by poll (as opposed to by show of hands) for all resolutions at the most recent 418 AGM?

A.3.11 Does the company disclose that it has appointed an independent party (scrutineers/inspectors) to count 418 and/or validate the votes at the AGM?

A.3.12 Does the company make publicly available by the next working day the result of the votes taken during 417 & 423 the most recent AGM/EGM for all resolutions?

A.3.13 Does the company provide at least 21 days notice for all AGMs and EGMs? 417 & 423

A.3.14 Does the company provide the rationale and explanation for each agenda item which require 417 & 423 shareholders’ approval in the notice of AGM/circulars and/or the accompanying statement?

A.3.15 Does the company give the opportunity for shareholder to place item/s on the agenda of AGM? 415

A.4 Markets for corporate control should be allowed to function in an efficient and transparent manner

A.4.1 In cases of mergers, acquisitions and/or takeovers requiring shareholders’ approval, does the board of 237 directors/commissioners of the company appoint an independent party to evaluate the fairness of the transaction price?

A.5 The exercise of ownership rights by all shareholders, including institutional investors, should be facilitated

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A.5.1 Does the company disclose its practices to encourage shareholders to engage the company beyond 415-430 & 581- AGM? 585

B Equitable Treatment of Shareholders

B.1 Shares and Voting Rights

B.1.1 Does the company’s ordinary or common shares have one vote for one share? 415

B.1.2 Where the company has more than one class of shares, does the company publicise the voting rights 415 attached to each class of shares (e.g. through the company website reports/the stock exchange/the regulator’s website)?

B.2 Notice of AGM

B.2.1 Does each resolution in the most recent AGM deal with only one item, i.e., there is no bundling of several 418-421 items into the same resolution?

B.2.2 Are the company’s notice of the most recent AGM/circulars fully translated into English and published on 416-417 & 422- the same date as the local - language version? 423

Does the notice of AGM/circulars have the following details:

B.2.3 Are the profiles of directors/commissioners (at least age, academic qualification, date of appointment, 416-417 experience, and directorships in other listed companies) in seeking election/re-election included?

B.2.4 Are the auditors seeking appointment/re-appointment clearly identified? 416-417

B.2.5 Were the proxy documents made easily available? 416-417

B.3 Insider trading and abusive self-dealing should be prohibited.

B.3.1 Does the company have policies and/or rules prohibiting directors/commissioners and employees to 591 benefit from knowledge which is not generally available to the market?

B.3.2 Are the directors/commissioners required to report their dealings in company shares within 3 business 591 days?

B.4 Related party transactions by directors and key executive

B.4.1 Does the company have a policy requiring directors/commissioners to disclose their interest in 439, 460, 586, transactions and any other conflicts of interest? 591

B.4.2 Does the company have a policy requiring a committee of independent directors/commissioners 509, 568 to review material RPTs to determine whether they are in the best interests of the company and shareholders?

B.4.3 Does the company have a policy requiring board members (directors/commissioners) to abstain from 439 & participating in the board discussion on a particular agenda when they are conflicted? 460-461

B.4.4 Does the company have policies on loans to directors and commissioners either forbidding this practice 452 & 471 or ensuring that they are being conducted at arm’s length basis and at market rates?

B.5 Protecting minority shareholders from abusive actions

B.5.1 Does the company disclose that RPTs are conducted in such a way to ensure that they are fair and at 235 & 568 arms’ length?

B.5.2 In case of related party transactions requiring shareholders’ approval, is the decision made by 235 & 568 disinterested shareholders?

C Role of Stakeholders

C.1 The rights of stakeholders that are established by law or through mutual agreements are to be respected.

Does the company disclose a policy and practices that address :

C.1.1 The existence and scope of the company’s efforts to address customers’ welfare? 569-570 & 662-663

C.1.2 Supplier/contractor selection procedures? 590

C.1.3 The company’s efforts to ensure that its value chain is environmentally friendly or is consistent with 590 & promoting sustainable development? 634-663

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C.1.4 The company’s efforts to interact with the communities in which they operate? 634-663

C.1.5 The company’s anti-corruption programmes and procedures? 571 & 587

C.1.6 How creditors’ rights are safeguarded? 571

C.1.7 Does the company have a separate report/section that discusses its efforts on environment/economy and 632 social issues?

C.2 Where stakeholder interests are protected by law, stakeholders should have the opportunity to obtain effective redress for violation of their rights.

C.2.1 Does the company provide contact details via the company’s website or Annual Report which 581, 76, 129 stakeholders (e.g. customers, suppliers, general public etc.) can use to voice their concerns and/or complaints for possible violation of their rights?

C.3 Mechanisms for employee participation should be permitted to develop.

C.3.1 Does the company explicitly disclose the policies and practices on health, safety and welfare for its 366-387 & employees? 651-653

C.3.2 Does the company explicitly disclose the policies and practices on training and development 366-387, 653 programmes for its employees?

C.3.3 Does the company have a reward/compensation policy that accounts for the performance of the 479-487 company beyond short-term financial measures?

C.4 Stakeholders including individual employee and their representative bodies, should be able to freely communicate their concerns about illegal or unethical practices to the board and their rights should not be compromised for doing this

C.4.1 Does the company have a whistleblowing policy which includes procedures for complaints by employees 593-594 and other stakeholders concerning alleged illegal and unethical behaviour and provide contact details via the company’s website or annual report

C.4.2 Does the company have a policy or procedures to protect an employee/person who reveals alleged illegal/ 593-594 unethical behaviour from retaliation?

D Disclosure and Transparency

D.1 Transparent Ownership Structure

D.1.1 Does the information on shareholdings reveal the identity of beneficial owners, holding 5% shareholding 95-96, or more? 120-123, 504

D.1.2 Does the company disclose the direct and indirect (deemed) shareholdings of major and/or substantial 95-96, shareholders? 120-123, 504

D.1.3 Does the company disclose the direct and indirect (deemed) shareholdings of directors (commissioners)? 121-122

D.1.4 Does the company disclose the direct and indirect (deemed) shareholdings of senior management? 121-122 & bank website

D.1.5 Does the company disclose details of the parent/holding company, subsidiaries, associates, joint ventures 99 and special purpose enterprises/vehicles (SPEs)/(SPVs)?

D.2 Quality of Annual Report

Does the company’s annual report disclose the following items:

D.2.1 Corporate Objectives 87-89 & 230

D.2.2 Financial Performance indicators 20-23, 188-218

D.2.3 Non-Financial Performance indicators 9-18, 30-39, 144-186

D.2.4 Dividend Policy 231 & 567

D.2.5 Biographical details (at least age, academic qualifications, date of first appointment, relevant experience, 431-471 and any other directorships of listed companies) of all directors/commissioners

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D.2.6 Attendance details of each director/commissioner in all directors/commissioners meetings held during 488-503 the year

D.2.7 Total remuneration of each member of the board of directors/commissioners 479-487

Corporate Governance Confirmation Statement

D.2.8 Does the Annual Report contain a statement confirming the company’s full compliance with the code 632-633 of corporate governance and where there is non-compliance, identify and explain reasons for each such issue?

D.3 Disclosure of Related Party Transactions (RPTs)

D.3.1 Does the company disclose its policy covering the review and approval of material RPTs? 235 & 568

D.3.2 Does the company disclose the name, relationship, nature and value for each material RPTs? 235 & 568

D.4 Directors and Commissioners dealings in the shares of the company

D.4.1 Does the company disclose trading in the company’s shares by insiders? 122-123 & 591

D.5 External Auditor and Auditor Report

Where the same audit firm is engaged for both audit and non-audit services

D.5.1 Are the audit and non-audit fees disclosed? 565

D.5.2 Does the non-audit fee exceed the audit fees? 565

D.6 Medium of Communications

Does the company use the following modes of communication?

D.6.1 Quarterly Reporting 566 & 581-582

D.6.2 Company Website 130-131, 566, 581

D.6.3 Analyst’s briefing 581-582

D.6.4 Media briefings/press conferences 581-585

D.7 Timely filing/release of annual/financial reports

D.7.1 Are the audited annual financial report/statement released within 120 days from the financial year end? Consolidated Financial Statements pages 2-4

D.7.2 Is the annual report released within 120 days from the financial year end? 70-71

D.7.3 Is the statement that the Annual Financial Report has been presented correctly and fairly, confirmed by Consolidated the Board of Commissioners or the Board of Directors and/or related officials of the company. Financial Statements pages 2-4

D.8 Company Website

Does the company have a website disclosing up-to-date information on the following:

D.8.1 Financial statements/reports (latest quarterly)) 130-131

D.8.2 Materials provided in briefings to analysts and media 130-131

D.8.3 Downloadable Annual Report 130-131

D.8.4 Notice of AGM and/or EGM 130-131

D.8.5 Minutes of AGM and/or EGM 130-131

D.8.6 Company’s constitution (company’s by-laws, memorandum and association) 130-131

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D.9 Investor Relations

D.9.1 Does the company disclose the contact details (e.g. telephone, fax, and email) of the officer/office 129 & 581-582 responsible for investor relations?

E RESPONSIBILITIES OF THE BOARD

E.1 Board Duties and Responsibilities

Clearly defined board responsibilities and corporate governance policy

E.1.1 Does the company disclose its corporate governance policy/board charter? 403, 431, 456

E.1.2 Are the types of decisions requiring board of directors/commissioners’ approval disclosed? 432-435, 443- 446, 456, 456, 466

E.1.3 Are the roles and responsibilities of the board of directors/commissioners clearly stated? 432-435 & 456-457

Corporate Vision/Mission

E.1.4 Does the company have an updated Vision and Mission statement? 87-88

E.1.5 Does the board of directors play a leading role in the process of developing and reviewing the company’s 87-88, 456 strategy at least annually?

E.1.6 Does the board of directors have a process to review, monitor and oversee the implementation of the 87-88, 456 corporate strategy?

E.2 Board Structure

Code of Ethicss or Conduct

E.2.1 Are the details of the code of ethics or conduct disclosed? 586-587

E.2.2 Are all directors/commissioners, senior management and employees required to comply with the code/s? 586-587

E.2.3 Does the company have a process to implement and monitor compliance with the code/s of ethics or 586-587 conduct?

Board Structure & Composition

E.2.4 Do independent directors/commissioners make up at least 50% of the board of directors/commissioners? 431-432

E.2.5 Does the company have a term limit of nine years or less or 2 terms of five years1) each for its independent 435-436 directors/commissioners?

E.2.6 Has the company set a limit of five board seats that an individual independent/non-executive director/ 437-438 & commissioner may hold simultaneously? 459-460

E.2.7 Does the company have any executive directors who serve on more than two boards of listed companies 437-438 & outside of the group? 459-460

Nomination Committee (NC)

E.2.8 Does the company have a Nominating Committee? 512-518

E.2.9 Is the Nominating Committee comprised of a majority of independent directors/commissioners? 512-518

E.2.10 Is the chairman of the Nominating Committee an independent director/commissioner? 512-518

E.2.11 Does the company disclose the terms of reference/governance structure/charter of the Nominating 512-518 Committee?

E.2.12 Is the meeting attendance of the Nominating Committee disclosed and if so, did the Nominating 512-518 Committee meet at least twice during the year?

Remuneration Committee (RC)/Compensation Committee

E.2.13 Does the company have a Remuneration Committee? 512-518

E.2.14 Is the Remuneration Committee comprised of a majority of independent directors/commissioners? 512-518

E.2.15 Is the chairman of the Remuneration Committee an independent director/commissioner? 512-518

E.2.16 Does the company disclose the terms of reference/governance structure/charter of the Remuneration 512-518 Committee?

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E.2.17 Is the meeting attendance of the Remuneration Committee disclosed and, if so, did the Remuneration 512-518 Committee meet at least twice during the year?

Audit Committee (AC)

E.2.18 Does the company have an Audit Committee? 506-511

E.2.19 Is the Audit Committee comprised entirely of non-executive directors/commissioners with a majority of 506-511 independent directors/commissioners?

E.2.20 Is the chairman of the Audit Committee an independent director/commissioner? 506-511

E.2.21 Does the company disclose the terms of reference/governance structure/charter of the Audit Committee? 506-511

E.2.22 Does at least one of the independent directors/commissioners of the committee have accounting 506-511 expertise (accounting qualification or experience)?

E.2.23 Is the meeting attendance of the Audit Committee disclosed and, if so, did the Audit Committee meet at 506-511 least four times during the year?

E.2.24 Does the Audit Committee have primary responsibility for recommendation on the appointment, and 506-511 removal of the external auditor?

E.3 Board Processes

Board Meetings and Attendance

E.3.1 Are the board of directors meeting scheduled before the start of financial year? 488 & 492

E.3.2 Does the board of directors/commissioners meet at least six times during the year? 489 & 493

E.3.3 Has each of the directors/commissioners attended at least 75% of all the board meetings held during the 489 & 493 year?

E.3.4 Does the company require a minimum quorum of at least 2/3 for board decisions? 488 & 492

E.3.5 Did the non-executive directors/commissioners of the company meet separately at least once during the 489-490 year without any executives present?

Access to Information

E.3.6 Are board papers for board of directors/commissioners meetings provided to the board at least five 488 business days in advance of the board meeting?

E.3.7 Does the company secretary play a significant role in supporting the board in discharging its 541-546 responsibilities?

E.3.8 Is the company secretary trained in legal, accountancy or company secretarial practices and has kept 542 abreast on relevant developments?

Board Appointment and Re-Election

E.3.9 Does the company disclose the criteria used in selecting new directors/commissioners? 439-441 & 461-464

E.3.10 Did the company describe the process followed in appointing new directors/commissioners? 439-441 & 461-464

E.3.11 Are all directors/commissioners subject to re-election every 3 years; or 5 years for listed companies in 435-436 & 457 countries whose legislation prescribes a term of 5 years2) each?

Remuneration Matters

E.3.12 Does the company disclose its remuneration (fees, allowances, benefit-in-kind and other emoluments) 479-487 policy/practices (i.e. the use of short term and long term incentives and performance measures) for its executive directors and CEO?

E.3.13 Is there disclosure of the fee structure for non-executive directors/commissioners? 479-487

E.3.14 Do the shareholders or the Board of Directors approve the remuneration of the executive directors and/or 479-487 the senior executives?

E.3.15 Does the company have measurable standards to align the performance-based remuneration of the 479-487 executive directors and senior executive with long-term interests of the company, such as claw back provision and deferred bonuses?

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Internal Audit

E.3.16 Does the company have a separate internal audit function? 551-559

E.3.17 Is the head of internal audit identified or, if outsourced, is the name of the external firm disclosed? 551-552 & 509

E.3.18 Does the appointment and removal of the internal auditor require the approval of the Audit Committee? 509 & 551-552

Risk Oversight

E.3.19 Does the company establish a sound internal control procedures/risk management framework and 254-361, periodically review the effectiveness of that framework? 575-576

E.3.20 Does the Annual Report/Annual CG Report disclose that the board of directors/commissioners has 254-361, conducted a review of the company’s material controls (including operational, financial and compliance 575-576 controls) and risk management systems?

E.3.21 Does the company disclose the key risks to which the company is materially exposed to (i.e. financial, 572-574 operational including IT, environmental, social, economic)?

E.3.22 Does the Annual Report/Annual CG Report contain a statement from the board of directors/ 511 commissioners or Audit Committee commenting on the adequacy of the company’s internal controls/ risk management systems?

E.4 People on the Board

Board Chairman

E.4.1 Do different persons assume the roles of chairman and CEO? 432 & 456

E.4.2 Is the chairman an independent director/commissioner? 432

E.4.3 Is any of the directors a former CEO of the company in the past 2 years? 102-113

E.4.4 Are the roles and responsibilities of the chairman disclosed? 434-435

Lead Independent Director

E.4.5 If the Chairman is not independent, has the Board appointed a Lead/Senior Independent Director and - has his/her role been defined?

Skills and Competencies

E.4.6 Does at least one non-executive director/commissioner have prior working experience in the major sector 102-113 that the company is operating in?

E.5 Board Performance

Directors Development

E.5.1 Does the company have orientation programmes for new directors/commissioners? 446-447 & 466-467

E.5.2 Does the company have a policy that encourages directors/commissioners to attend on-going or 446-451 & 466- continuous professional education programmes? 471

CEO/Executive Management Appointments and Performance

E.5.3 Does the company disclose the process on how the board of directors/commissioners plans for the 517-518 succession of the CEO/Managing Director/President and key management?

E.5.4 Does the board of directors/commissioners conduct an annual performance assessment of the CEO/ 472-474 Managing Director/President?

Board Appraisal

E.5.5 Did the company conduct an annual performance assessment of the board of directors/commissioners 472-474 and disclose the criteria and process followed for the assessment?

Director Appraisal

E.5.6 Did the company conduct an annual performance assessment of the individual directors/commissioners 472-474 and disclose the criteria and process followed for the assessment?

Committee Appraisal

E.5.7 Did the company conduct an annual performance assessment of the board committees and disclose the 472-474 criteria and process followed for the assessment?

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Level 2 – BONUS ITEMS

(B)A. RIGHTS OF SHAREHOLDERS

(B)A.1 Right to participate effectively in and vote in general shareholders meeting and should be informed of the rules, including voting procedures, that govern general shareholders meeting

(B)A.1.1 Does the company practice secure electronic voting in absentia at the general meetings of shareholders? 418 & 423

(B)B EQUITABLE TREATMENT OF SHAREHOLDERS

(B)B.1 Notice of AGM

(B)B.1.1 Does the company release its notice of AGM (with detailed agendas and explanatory circulars), as 416-417 & announced to the Exchange, at least 28 days before the date of the meeting? 422-423

(B)C ROLE OF STAKEHOLDER

(B)C.1 The rights of stakeholders that are established by law or through mutual agreement are to be respected

(B)C.1.1 Does the company adopt an internationally recognised reporting framework for sustainability (i.e. GRI, 2018 Integrated Reporting, SASB)? Sustainability Report

(B)D. DISCLOSURE AND TRANSPARENCY

(B)D.1 Quality of Annual Report

(B)D.1.1 Are the audited annual financial report/statement released within 60 days from the financial year end? Consolidated Financial Statements pages 2-4

(B)D.1.2 Does the company disclose details of remuneration of the CEO? -

(B)E. RESPONSIBILITIES OF THE BOARD

(B)E.1 Board Competencies and Diversity

(B)E.1.1 Does the company have at least one female independent director/commissioner? 475-478

(B)E.1.2 Does the company have a policy and disclose measurable objectives for implementing its board diversity 475-478 and report on progress in achieving its objectives?

(B)E.2 Board Structure

(B)E.2.1 Is the Nominating Committee comprise entirely of independent directors/commissioners? 512-513

(B)E.2.2 Does the Nominating Committee undertake the process of identifying the quality of directors aligned 514-515, with the company’s strategic directions? 440-441 & 463-464

(B)E.3 Board Appointments and Re-Election 463-464

(B)E.3.1 Does the company use professional search firms or other external sources of candidates (such as director 440 & 463 databases set up by director or shareholder bodies) when searching for candidates to the board of directors/commissioners?

(B)E.4 Board Appointments and Re-Election

(B)E.4.1 Do independent non-executive directors/commissioners make up more than 50% of the board of 432 directors/commissioners for a company with independent chairman?

(B)E.5 Risk Oversight

(B)E.5.1 Does the board describe its governance process around IT issues including disruption, cyber security, 394-395 disaster recovery, to ensure that all key risks are identified, managed and reported to the board?

(B)E.6 Board Performance

(B)E.6.1 Does the company have a separate board level Risk Committee? 519-524

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LEVEL 2 – PENALTY ITEMS

(P)A RIGHTS OF SHAREHOLDERS

(P)A.1 Basic Shareholder Right

(P)A.1.1 Did the company fail or neglect to offer equal treatment for share repurchases to all shareholders?

(P)A.2 Shareholders, including institutional shareholders, should be allowed to consult with each other on issues concerning their basic shareholder rights as defined in the Principles, subject to exceptions to prevent abuse.

(P)A.2.1 Is there evidence of barriers that prevent shareholders from communicating or consulting with other shareholders?

(P)A.3 Right to participate effectively in and vote in general shareholders meeting and should be informed of the rules, including voting procedures, that govern general shareholders meeting

(P)A.3.1 Did the company include any additional and unannounced agenda item into the notice of AGM/EGM?

(P)A.3.2 Did the Chairman of the Board, Audit Committee Chairman and CEO attend the most recent AGM?

(P)A.4 Capital structures and arrangements that enable certain shareholders to obtain a degree of control disproportionate to their equity ownership should be disclosed

(P)A.4.1 Shareholders Agreement?

(P)A.4.2 Voting Cap?

(P)A.4.3 Multiple Voting Rights?

(P)A.5 Capital structures and arrangements that enable certain shareholders to obtain a degree of control disproportionate to their equity ownership should be disclosed.

(P)A.5.1 Is a pyramid ownership structure and/or cross holding structure apparent?

(P)B EQUITABLE TREATMENT OF SHAREHOLDERS

(P)B.1 Insider trading and abusive self-dealing should be prohibited

(P)B.1.1 Has there been any conviction of insider trading involving directors/commissioners, management and employees in the past three years?

P(B).2 Protecting minority shareholders from abusive action

P(B).2.1 Has there been any cases of non compliance with the laws, rules and regulations pertaining to material related party transactions in the past three years?

P(B).2.2 Were there any RPTs that can be classified as financial assistance (i.e not conducted at arms length) to entities other than wholly-owned subsidiary companies?

P(C) ROLE OF STAKEHOLDERS

(P)C.1 The rights of stakeholders that are established by law or through mutual agreements are to be respected

(P)C.1.1 Have there been any violations of any laws pertaining to labour/employment/consumer/insolvency/ commercial/competition or environmental issues?

P(C).2 Where stakeholders participate in the corporate governance process, they should have access to relevant, sufficient and reliable information on a timely and regular basis

P(C)2.1 Has the company faced any sanctions by regulators for failure to make announcements within the requisite time period for material events?

(P)D DISCLOSURE AND TRANSPARENCY

(P)D.1 Sanctions from regulator on financial reports

(P)D.1.1 Did the company receive a “qualified opinion” in its external audit report?

(P)D.1.2 Did the company receive an “adverse opinion” in its external audit report?

(P)D.1.3 Did the company receive a “disclaimer opinion” in its external audit report?

(P)D.1.4 Has the company in the past year revised its financial statements for reasons other than changes in accounting policies?

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No Principles and Recommendations Page

(P)E RESPONSIBILITIES OF THE BOARD

(P)E.1 Compliance with listing rules, regulations and applicable laws

(P)E.1.1 Is there any evidence that the company has not complied with any listing rules and regulations over the past year apart from disclosure rules?

(P)E.1.2 Have there been any instances where non-executive directors/commissioner have resigned and raised any issues of governance-related concerns?

(P)E.2 Board Structure

(P)E.2.1 Does the Company have any independent directors/commissioners who have served for more than nine years or two terms of five years1) each (which ever is higher) in the same capacity?

(P)E.2.2 Did the company fail to identify who are the independent director(s)/commissioner(s)?

(P)E.2.3 Does the company have any independent directors/non-executive/commissioners who serve on a total of more than five boards of publicly-listed companies?

(P)E.3 External Audit

(P)E.3.1 Is any of the directors or senior management a former employee or partner of the current external auditor (in the past 2 years)?

(P)E.4 Board Structure and Composition

(P)E.4.1 Has the chairman been the company CEO in the last three years?

(P)E.4.2 Do independent non-executive directors/commissioners receive options, performance shares or bonuses?

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The Financial Services Authority issued OJK Regulation 7. Evaluate the implementation of IG through No.18/POJK.03/2014, dated 18 November 2014 and OJK assessing the adequacy of Internal Controls and Circular Letter No. 15/SEOJK.03/2015, dated 25 May implementation of the Integrated Compliance 2015 regarding the Implementation of Integrated Function. Governance (IG) for Financial Conglomerates. These 8. Provide recommendations to the Board of regulations govern the establishment of the Financial Commissioners of the Main Entity to improve the Conglomerate, the appointment of the Main Entity (ME) Integrated Governance Guidelines. in a Financial Conglomerate and the implementation of IG in a comprehensive and effective manner. IG WORK REALIZATION IN 2018 1. Conducted a self-assessment regarding the The implementation of Good Corporate Governance implementation of IG in the CIMB Indonesia in the Financial Conglomerate’s business activities Financial Conglomerate. will improve its performance and compliance with all 2. Submitted the following reports to the Regulators prevailing laws and regulations, as well as the applicable a. Self-Assessment Report of the IG ethical values in the financial services industry. Implementation; The implementation of Integrated Governance in a b. Annual Report of the IG Implementation; Financial Conglomerate is expected to encourage c. Integrated Risk Profile Report; stability and sustainability of the financial system, d. Integrated Capital Report. ultimately enhancing competitiveness in the financial 3. Aligned with all the members of the Financial services industry. Conglomerate in terms of reporting, preparing, and updating internal policies and procedures related IG WORK PROGRAM FOR 2019 to the implementation of IG in each Financial 1. Maintain the CIMB Indonesia Financial Conglomerate Services Institution (FSI), including the functions of IG structure in compliance with the Integrated Internal Audit, Risk Management, and Compliance. Governance principles and regulations at the level of 4. The CIMB Indonesia Financial Conglomerate has the Board of Commissioners, the Board of Directors, an integrated reporting system, which is the CIMB Committees, Integrated Working Units as well as the Integrated Reporting System (CIRS). The system is policies and procedures for each Entity. connected and can be accessed by each Entity in 2. Deliver information disclosure regarding the the CIMB Indonesia Financial Conglomerate. The implementation of IG and the self-assessment results automation helps support the effectiveness of the of the IG implementation to stakeholders through the integrated reporting. Annual Report. 5. Organized 2 (two) IG Committee Meetings on 12 3. CIMB Niaga as the Main Entity aligns and updates February 2018 and 9 August 2018. The IG Committee the internal policies and procedures related to the acknowledged and approved reports on the IG implementation with other entities in the CIMB Integrated Risk Profile, Integrated Capital Adequacy, Indonesia Financial Conglomerate. Integrated Internal Audit, Integrated Compliance 4. Socialize the IG principles in collaboration with the and Self-assessment for the Implementation of the relevant working units. Integrated Governance in CIMB Indonesia Financial 5. Conduct self-assessments on the IG implementation Conglomerate, which was then reported to OJK by in the CIMB Indonesia Financial Conglomerate and the Main Entity. report it. 6. There were changes in the CIMB Indonesia Financial 6. Ensure that the Management composition of each Conglomerate membership structure that will be Entity in the CIMB Indonesia Financial Conglomerate explained further in the Financial Conglomerate has complied with the prevailing regulations. Structure below. 7. Improvements/mitigation plans were applied for several significant issues already reported in the Self-Assessment Report for the implementation

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of Integrated Governance in the CIMB Indonesia 4. The Integrated Compliance Unit (ICU) duties and Financial Conglomerate to the OJK, including: responsibilities, a. Fulfilled the share ownership composition by 5. The Integrated Internal Audit (IIA) duties and one member of the CIMB Indonesia Financial responsibilities, Conglomerate, where foreign ownership is only 6. Implementation of Integrated Risk Management, permitted at 85% of paid-in capital and 15% 7. Preparation and implementation of the IG Charter. must be owned by local parties. b. Synchronized and improved the data in the The IG implementation assessment takes into the internal system to improve its accuracy in the significance and materiality of IG assessment factors, periodic report data. and the impact of strengths as well as weaknesses in 8. Updated the Integrated Governance Charter. the IG implementation in the Financial Conglomerate. The IG self-assessment process is performed by IG IMPLEMENTATION ASSESSMENT REPORT members of the IG Committee and Integrated Risk Management Committee (IRMC), who evaluate the IG IG Implementation Assessment Method Structure, Process and Outcome in each assessment The IG implementation assessment is conducted every factor. half-year based on a self-assessment method, with reference to OJK Circular Letter No.15/SEOJK.03/2015 In addition, in the IG implementation self-assessment regarding the Implementation of Integrated process, CIMB Niaga as the Main Entity considers data Governance for a Financial Conglomerate. The and other information from other units, including Risk assessment is applied to 3 (three) Governance aspects, Management, Internal Audit, Corporate Affairs, Human Structure, Process and Outcome of IG implementation Resources, Anti-Fraud Management, as well as other assessment for 7 (seven) factors: units in the subsidiaries, to be used as a validation 1. Implementation of the Main Entity Board of factors in the IG implementation assessment. Directors duties and responsibilities, 2. Implementation of the Main Entity Board of IG Implementation Assessment Results Commissioners duties and responsibilities, The results of the IG implementation assessment in 1st 3. The IG Committee duties and responsibilities, and 2nd Half of 2018:

Integrated Governance Implementation Self-Assessment Results

Rating Rating Definition

2 (Good) The IG implementation on Financial Conglomeration is classified as “Good”. This is reflected in the adequate fullfillment of the IG principles.

If there are weaknesses of the IG principles, they are generally less significant and can be resolved by normal actions by the Main Entity and/or Financial Institution members of the CIMB Indonesia Financial Conglomeration.

Based on the assessment results, IG implementation in CIMB Indonesia Financial Conglomerate was classified as “Good”. This was reflected in the adequate fulfilment of the three IG aspects (Structure, Process, and Outcome). The good fulfilment of an adequate and effective structure in the CIMB Indonesia Financial Conglomerate IG implementation can be seen in the performance, transparency of financial reporting, and implementation of the Integrated Compliance Unit, the Integrated Internal Audit, and Integrated Risk Management Unit. However, there were some weaknesses in the IG implementation, of a less significant importance, and these were resolved through measures taken by the Main Entity and/or Financial Institution members of CIMB Indonesia Financial Conglomerate.

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FINANCIAL CONGLOMERATE STRUCTURE Based on a letter to OJK No. 115/FO/KP/18 dated 5 June 2018, there was a change in the CIMB Indonesia Financial Conglomerate membership, as follows:

Main Entity (ME): PT Bank CIMB Niaga Tbk

Members 1. PT CIMB Niaga Auto Finance (CNAF) 2. PT CIMB Niaga Sekuritas (CNS)

SHARE-OWNERSHIP STRUCTURE The following shows the CIMB Indonesia Financial Conglomerate share ownership structure based on the letter to OJK.

Financial Conglomeration Main Entity Subsidiary CIMB Group Sdn Bhd

99.00% 91.48%%

PT Commerce Kapital Public

1.02% 7.50%

1.00% 99.00% 99.93%

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MANAGEMENT STRUCTURE Based on OJK Regulation No.18/POJK.03/2014 regarding the Implementation of Governance for Financial Conglomerates, CIMB Indonesia Financial Conglomerate management structure is as follows:

Internal Audit Risk Management Entity IG Committee*) Compliance Function Function Function

CIMB Niaga √ √ √ √

CIMB Niaga Auto Finance (CNAF) - √ √ √

CIMB Niaga Sekuritas (CNS) Obtained operational license approval as Securities Company from the OJK – Non-Bank Financial Industry on 11 March 2019

*) The IG Committee is in the Main Entity, but there are representatives of Independent Commissioners from each FSI member of the Financial Conglomeration.

Main Entity: PT Bank CIMB Niaga Tbk

Board of Commissioners

No. Name Position

1 Dato’ Sri Nazir Razak*) President Commissioner

2 Glenn M.S. Yusuf Vice President Commissioner

3 Zulkifli M. Ali Independent Commissioner

4 Pri Notowidigdo Independent Commissioner

5 Jeffrey Kairupan Independent Commissioner

6 David Richard Thomas Commissioner

7 Tengku Dato’ Sri Zafrul Tengku Abdul Aziz**) Commissioner

8 Armida Salsiah Alisjahbana***) Independent Commissioner

Main Entity Board of Commissioners Duties and Responsibilities Supervise the IG implementation by conducting: 1. Approve the IG Charter prepared by the Board of Directors of the Main Entity; 2. Monitor the governance implementation for each member of the CIMB Indonesia Conglomerate in accordance with IG Charter; 3. Monitor the Main Entity Board of Directors duties and responsibilities implementation, as well as provide direction and advice to the Main Entity Board of Directors regarding the implementation of IG Charter; 4. Evaluate the IG Charter and the operating guidelines; 5. Provide direction for the improvement of the IG Charter and the operating guidelines; 6. Submit IG Committee recommendations to the Main Entity Board of Directors regarding the IG implementation in CIMB Indonesia Financial Conglomerate members;

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7. Establish the IG Committee to support the effectiveness of the Board of Commissioner duties, which will be governed in a separate section; 8. Organize meetings regularly at least once each semester.

Board of Directors

No. Name Position

1 Tigor M. Siahaan President Director

2 Rita Mas’Oen Director

3 Megawati Sutanto Director

4 Vera Handajani Director

5 John Simon Director

6 Lani Darmawan Director

7 Pandji P. Djajanegara Director

8 Fransiska Oei Compliance Director (Independent Director)

9 Hedy Lapian Director

10 Rahardja Alimhamzah Director

11 Wan Razly Abdullah*) Director

*) Resigned as Director effective on 1 January 2019

Main Entity Board of Directors Duties and Responsibilities 1. Ensure the IG implementation in CIMB Indonesia Financial Conglomerate; 2. Prepare the IG Charter to be approved by the Main Entity Board of Commissioners; 3. Prepare the operating guidelines required to support the implementation of the IG Charter, including, but not limited to: a. Integrated Risk Management Guidelines; b. Integrated Compliance Guidelines; c. Integrated Internal Audit Guidelines; 4. Direct, monitor, and evaluate the implementation of the IG Charter; 5. Follow up the Main Entity Board of Commissioners direction and advice to improve the IG Charter and its implementation; 6. Ensure the audit findings and recommendations from the Integrated Internal Audit and the External Audit, and the supervision results from OJK and/or other authorities have been followed up by the Financial Institutions of CIMB Indonesia Financial Conglomerate; 7. Report the IG Self-Assessment (semi-annually) and IG Annual Report; 8. Appoint an organisational unit from within the Main Entity to be responsible for coordinating the IG implementation in the CIMB Indonesia Financial Conglomerate.

Sharia Supervisory Board

No. Name Position

1 M. Quraish Shihab Chairman

2 Fathurrahman Djamil Member

3 Yulizar D. Sanrego Member

Sharia Supervisory Board Duties and Responsibilities 1. Ensure the IG implementation does not contradict Sharia principles. 2. Oversee the Financial Institution activities to comply with Sharia Principles.

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Financial Institution Member: PT CIMB Niaga Auto Finance

Board of Commissioners

Position Name Description

President Commissioner Wan Razly Abdullah -

Commissioner Budiman Tanjung -

Koei Hwei Lien -

Serena K. Ferdinandus Independent Commissioner

Hidayat Dardjat Prawiradilaga Independent Commissioner

Board of Directors

Position Name Description

President Director Ristiawan Suherman -

Director Ir. Purwadi Indra Martono -

Drs. H. Harijanto -

Ivan Kawito -

Duties and Responsibilities of CIMB Indonesia Financial Conglomeration Members

Board of Commissioners Board of Directors

1. Provide recommendations and approval regarding the The Board of Directors must ensure the IG implementation by Governance Policy prepared by the Board of Directors and CIMB Indonesia Financial Conglomeration members, with the ensure the Governance Policy in accordance with IG Charter; responsibilities as follows: 2. Supervise the implementation of IG, with the duties and 1. Prepare the Governance Policy aligned with IG Charter; responsibilities as follows: 2. Prepare the necessary policies and procedures for the a. Supervise Governance implementation in accordance IG implementation, which aligned with the Main Entity with the IG Charter and Governance Policy; procedures; b. Follow up the recommendations from IG Committee due 3. Provide sufficient resources; to the implementation of IG as well as for improvements 4. Guiding, monitoring and evaluate the implementation of the of Governance Policy; Governance Policy including reporting, and c. Supervise the implementation of the Board of Directors 5. Follow up the directions and advice from the Board of duties and responsibilities, and also provide directions or Commissioners in order to improve the Governance recommendations to the Board of Directors regarding the Policies, IG and Governance implementation based on the implementation of Governance Policy; recommendation from the IG Committee; d. Evaluate and approve the Governance Policy; 6. Report the assessment and implementation of Governance to e. Establish the Governance Committee by considering the the Main Entity in accordance with the prevailing procedure. characteristic and scale of business; f. The Board of Commissioners discusses the recommendations from the IG Committee in the Board of Commissioners and Board of Directors meeting in order to provide direction and advise.

INTEGRATED GOVERNANCE COMMITTEE (IGC) The IGC was established not only to comply with prevailing laws and regulations, but also to represent CIMB Niaga’s commitment to the Good Corporate Governance in a professional and sustainable manner. The IGC assists the effectiveness of the Main Entity Board of Commissioners duties in supervising IG implementation in the CIMB Indonesia Financial Conglomerate. The IGC duties and responsibilities are as follows: 1. Evaluate the IG implementation by assessing the adequacy of Internal Control and Integrated Compliance implementation. 2. Provide recommendations to the Main Entity Board of Commissioners to improve the IG Charter.

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Membership Composition of Integrated Governance Committee in 2018

Position in the FSI as Member of the CIMB Indonesia No. Name Position in the Committee Financial Conglomeration

1 Jeffrey Kairupan Independent Commissioner of CIMB Niaga Chairman

2 Armida Salsiah Alisjahbana*) Independent Commissioner of CIMB Niaga Member

3 Endang Kussulanjari S. Independent Party Member

4. Serena K. Ferdinandus Independent Commissioner of CIMB Niaga Auto Finance Member

5. Albertus Banunaek**) President Commissioner of CIMB Principal Asset Member Management

6. Yulizar Djamaluddin Sanrego Sharia Supervisory Board of CIMB Niaga Member

*) Resigned as a Independent Commissioner mutatis mutandis as member of IGC effective on 1 January 2019 **) Served as a member of the IGC until May 2018 In addition to the IGC members as stated above, the meeting were also attended by the Main Entity Compliance Director, Risk Management Director and Chief Audit Executive as permanent invitees.

Regulations regarding the IGC Code of Ethics and Conduct are regulated further in the IGC Charter. Detailed discussion of the IGC is contained in the IGC Report in this Annual Report.

INTEGRATED COMPLIANCE UNIT (ICU) In accordance with OJK Regulation No. 18/POJK.03/2014 regarding Integrated Governance for Financial Conglomerates, CIMB Niaga’s Compliance Unit also serves as the ICU that supervises the Compliance Function in CIMB Indonesia Financial Conglomerate, through intensive coordination with Compliance Units in the subsidiary. The Compliance Unit in CIMB Niaga is an independent working unit or separate from the operational units (risk taking units) of the Main Entity.

Organizational Structure of ICU in the CIMB Indonesia Financial Conglomeration

Board of Commissioners Recommendation

President Director

Recommendation Integrated Director Compliance Director Governance Committee

Report

Integrated Compliance Unit

Coordination

Compliance Unit Compliance Unit

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The Integrated Compliance Unit Duties and 4. Updated internal policies and prepared several Responsibilities includes: procedures as references for Integrated Compliance 1. Monitoring and evaluating the implementation implementation. of Integrated Compliance in each member of the 5. Conducted regular meetings with the Compliance CIMB Indonesia Financial Conglomerate; Units in the CIMB Indonesia Financial Conglomerate 2. Coordinating with other Compliance Units in the members to evaluate the implementation of the CIMB Indonesia Financial Conglomerate members; integrated Compliance Function. 3. Compiling the results of the Integrated Compliance 6. Monitored compliance issues action plans from implementation by the CIMB Indonesia Financial CIMB Indonesia Financial Conglomerate members, Conglomerate members; including the fulfilment of commitments to 4. Preparing and reporting the Integrated Compliance Regulator. duties and responsibilities implementation report to the Compliance Director of the Main Entity; INTEGRATED INTERNAL AUDIT (IIA) 5. Establishing policies as guidelines for Integrated The IIA was established within the CIMB Indonesia Compliance Functions and also forwarding Financial Conglomerate to conduct a good IG the policies to other entities in the Financial implementation. The CIMB Indonesia Financial Conglomerate. Conglomerate IIA has established an Integrated Internal Audit Policy and IG Charter as references for Integrated Compliance Unit Activities in 2018 the Internal Audit of the Main Entity and the Internal 1. Each Compliance Unit in the CIMB Indonesia Audit of the Financial Institutions who are members Financial Conglomerate prepared and submitted of the CIMB Indonesia Financial Conglomerate, for Compliance Reports to the Integrated Compliance implementing integrated supervision and monitoring Unit on a regular basis through CIRS (CIMB functions to encourage improvements to the quality of Integrated Reporting System), an Integrated Integrated Internal Audit Governance. Reporting System in the CIMB Indonesia Financial Conglomerate; The IIA duties and responsibilities include: 2. Integrated Compliance Unit compiled and 1. Monitoring and evaluating the implementation of submitted: the Integrated Audits in each member of the CIMB a. Integrated Compliance reports on a quarterly Indonesia Financial Conglomerate; basis to the Compliance Director of the Main 2. Coordinating all Internal Audit Units in the members Entity; of the CIMB Indonesia Financial Conglomerate in b. Self-assessment reports on the IG accordance with their functions; implementation in CIMB Indonesia Financial 3. Compiling the results of the Integrated Audit Conglomerate to the IG Committee and OJK on implementation in each member of the CIMB a semi-annually basis; Indonesia Financial Conglomerate; c. Annual Report of IG implementation to OJK and 4. Preparing and submitting the Integrated Audit published on the Bank’s website. duties and responsibilities implementation 3. The Main Entity Compliance Director submitted the report to the Director appointed to conduct Integrated Compliance Report to the Main Entity the monitoring on the Financial Institutions in Board of Directors and the Board of Commissioners the Financial Conglomerate, the Main Entity on a semi-annually basis; Compliance Director, and the Main Entity Board of Commissioners.

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Organizational Structure of IIA in the CIMB Indonesia Financial Conglomeration

Board of Commissioners Recommendation

President Director

Recommendation Governance Other Chief Audit Integrated Director Executive Committee Integrated Audit Report

Integrated Audit Report

Integrated Internal Audit

Coordination

Internal Audit Internal Audit

In conducting its duties, the CIMB Indonesia Financial 4. Held regular meetings with the Head of the Internal Conglomerate Integrated Internal Audit conducts Audit in the Financial Institution members of CIMB audits on Financial Institutions that are members of the Indonesia Financial Conglomerate every quarter. CIMB Indonesia Financial Conglomerate, both through 5. Periodically monitored the Internal Audit results joint audits or based on the report from the Internal for the audits in each of the Financial Institution Audit in each respective Financial Institution. members of CIMB Indonesia Financial Conglomerate. 6. Performed a Quality Assurance Review of the During 2018, the Integrated Internal Audit monitored and Internal Audit of CIMB Niaga Auto Finance. reported the Integrated Internal Audit implementation to the Head of the Main Entity Internal Audit on a INTEGRATED RISK MANAGEMENT monthly basis, and to the Director appointed to conduct oversight of the Financial Institutions in the Financial Integrated Risk Management Committee (IRMC) Conglomerate, the Main Entity Compliance Director, In accordance with OJK Regulation No. 17/POJK.03/2014 and the Main Entity Board of Commissioners every regarding the Implementation of Integrated Risk half-year. In addition, in 2018, the Integrated Internal Management for Financial Conglomerates, the Main Entity Audit made efforts to ensure the implementation of the is required to establish an Integrated Risk Management Integrated Internal Audit was in accordance with the Committee and an Integrated Risk Management Unit OJK Regulations, through the following initiatives: (IRMU) for effective and comprehensive Integrated 1. Aligned the Audit Procedures with the CIMB Niaga Risk Management. The Integrated Risk Management is Internal Audit. conducted by considering the business characteristics 2. Evaluated and harmonized the Audit Plan and and complexity of each member of the Financial Human Resource Plan in the Internal Audit of each Conglomerate. The monitoring and evaluation process for of the CIMB Indonesia Financial Conglomerate the Financial Conglomerate’s risk exposure is conducted members. through the IRMC and reported to the Main Entity Risk 3. Conducted an audit of the CIMB Niaga Auto Management Committee (RMC). Finance’s Internal Audit.

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The IRMC consists of the Risk Management Director and several related senior management from the Main Entity, as well as the Director in charge of the Risk Management functions from each Financial Institution member of the Financial Conglomerate.

In 2018, the IRMC membership was restructured to follow the CIMB Indonesia Financial Conglomerate membership structure. In 2018, the CIMB Indonesia Financial Conglomerate had only Bank (as the Main Entity) and 1 (one) Subsidiary Company as a member, and Integrated Risk Management was implemented in the same manner as Consolidated Risk Management.

IRMC Membership Composition in 2018

Name Position Position in the IRMC

Vera Handajani Risk Management Director of CIMB Niaga Chairman

Julius W. Tjhioe Head of Operational Risk Management of CIMB Niaga Deputy Chairman I

Yulius Setiawan Head of Risk Analytics & Infrastructure of CIMB Niaga Deputy Chairman II

Indra Martono Auto Finance Director of CIMB Niaga Member

Sandi Maruto ALM Risk Head of CIMB Niaga Member

Koei Hwei Lien Retail Credit Risk Management Head of CIMB Niaga Member

Diva Mahdi Market Risk Management Head of CIMB Niaga Member

Nurpatria. Sumirat Integrated Risk Management & Basel PMO Head of CIMB Niaga Secretary

The IRMC duties and responsibilities included: 1. The IRMU coordinated the submission of Integrated 1. Providing recommendations to the Main Entity Risk Profile reports from each Financial Institution Board of Directors regarding the development to the regulators semi-annually. The reports were of the Integrated Risk Management policy and first submitted to the IRMC for recommendations, enhancement of the Integrated Risk Management prior to approval by the Main Entity RMC. policy based on the evaluation results. 2. The IRMU together with the Strategy & Finance unit 2. Reviewing and coordinating the evaluation submitted the Minimum Capital Adequacy Report results regarding integrated risk management, to the regulator semi-annually. The report was first including Integrated Risk Profiles and other reports delivered to the IRMC for recommendations, prior generated from the Integrated Risk Management to approval from the Main Entity RMC. Information System. 3. The Bank, as the Main Entity developed a Technology-Based Information System to support Arrangements for the IRMC work guidance is further the Integrated Risk and Capital Risk assessment stipulated in the IRMC Framework or Terms of process, which is connected to all Financial Reference (ToR). Institutions in the CIMB Indonesia Financial Conglomerate, to be used by the IRMU in all of the In conducting its functions, the IRMC is supported by Financial Institutions. the IRMU that coordinates with the risk management 4. Coordinated the Integrated Risk Management units in each Financial Institution member of the implementation by the Main Entity to the Financial Financial Conglomerate. Institutions through periodic meetings with the Risk Management working units of each Financial Realization of Integrated Risk Management Activities Institution. in 2018 were as follows: 5. There were no significant events that occurred in each Financial Institutions that would affect the overall risk profile of the Financial Conglomerate.

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INTEGRATED RISK MANAGEMENT UNIT (IRMU) Institution that may have an impact on the overall In performing its duties, the IRMC is supported by the Financial Conglomerate. IRMU that coordinates with the Risk Management 3. Performing risk monitoring on the Financial units in each Financial Institutions in the CIMB Conglomerate based on assessments of the risk Indonesia Financial Conglomerate. profile results in each Financial Institution, and the Integrated Risk Profile. The authorities and responsibilities of the IRMU 4. Developing and reviewing the accuracy of the Risk include: Profile assessment methodology periodically or at 1. Providing input to the Main Entity IRMC and RMC any time if there is a change in regulations. regarding the development and implementation 5. Developing and submitting the Integrated Risk of Integrated Risk Management policies and Profile and the Minimum Capital Adequacy Report procedures. periodically to the Bank’s Risk Management 2. Providing information to the IRMC regarding Director as the Main Entity, the Main Entity IRMC matters that must be followed up, including and RMC, before submitting to the regulators. exceptions or significant events in each Financial

Organizational Structure of the IRMU in the CIMB Indonesia Financial Conglomeration

Board of Commissioners

President Director

Recommendation Risk Management Other Risk Management Integrated Director Director Committee

Risk Integrated Profile Report Risk Integrated Profile Report Risk Management Integrated Unit

Coordination

Risk Management Unit Risk Management Unit

The IRMU conducts a monitoring process on the Integrated Risk Management implementation. The monitoring process results regarding risk exposure are reported and evaluated by the IRMC and submitted to the Main Entity RMC in accordance with regulatory regulations regarding risk management, during 2018, IRMU assignments included: 1. Conducted reviews regarding Risk Management policies and procedures as guidelines and reference for Integrated Risk Management.

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2. Conducted reviews on the methodology used in considered low, where the significance of any intra- the risk profile self-assessment process in each group transactions to the Financial Conglomerate’s Entity. total assets was still insignificant. The dependencies 3. Prepared and submitted Integrated Risk Profile among the Financial Institutions was also considered reports periodically to the Main Entity IRMC and very low or limited, as seen from the absence of RMC, to be further submitted to regulators. centralised liquidity management, unbound intra- group support, operational transactions where a Explanations regarding the implementation of company acts on behalf of another company in the Integrated Risk Management can also be seen Financial Conglomerate were very low, as well as intra- in the Supporting Business Review Report - Risk group purchases or sales being immaterial. In terms of Management section. the documentation and fairness of transactions, intra- group transaction agreements were adequate and all INTRA-GROUP TRANSACTION POLICY transactions were conducted on an arm’s length basis Intra-group transaction risk is one of the risks related and in accordance with all the prevailing regulations. In to Integrated Risk Management implementation addition, exposure to the ultimate shareholder on total that must be managed. Intra-group transaction capital and exposure arising from the placement of risks arise from the dependence of an entity either client assets to another company within the Financial directly or indirectly on another entity in the Financial Conglomerate was also insignificant. Conglomerate for the purpose of meeting written or unwritten agreements, which is followed by, or not Regarding the intra-group transaction risk followed by, a transfer of funds. management process, the Main Entity has conducted identification, measurement, monitoring, and risk Intra-group transaction risk may arise from: control on the composition and fairness of transactions 1. Cross-ownership among the Financial Institutions between the Financial Institutions in the Financial within the Financial Conglomerate. Conglomerate. Periodically, the Strategy & Finance 2. Short-term liquidity management centralization. Unit and the Risk Management Unit monitor the 3. Collateral, loans, and commitments provided intra-group transaction composition risk to ensure or obtained by a Financial Institution from compliance with limits, which includes the Legal another Financial Institution within the Financial Lending Limit (LLL) and the principle of fairness in all Conglomerate. transactions. 4. Exposure to the ultimate shareholders, including the exposure of loans and off-balance sheet items, In the framework of active supervision, the Board of including guarantees and commitments. Commissioners and the Board of Directors receive 5. Purchase or sale of assets to other Financial periodic reports regarding intra-group transactions. Institutions within the Financial Conglomerate. Adequate policies and procedures for managing intra- 6. Transfer of risk through reinsurance. group transactions have been established in each 7. Transactions to transfer third party risk exposure Financial Institution. In the Main Entity, these policies among the Financial Institutions within the include the Risk Management Policy (Integrated), Financial Conglomerate. Legal Lending Limit (LLL) Policies, and the Subsidiary 8. Business cooperation or cross selling in the form of Equity Participation Policy. The clarity of authorities incentives or fees amongst Financial Institutions. and responsibilities has also been well regulated under the authority of the Strategy and Finance Director. Intra-group transaction risks are identified, managed, and reported on a regular basis in conjunction with An independent review is conducted by the Internal the integrated risk profile reporting. At the end of 2018, Audit Unit in accordance with the scale and complexity the intra-group transactions risk profile rating was of the intra-group transactions.

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Sharia Business Unit Governance Report

SHARIA GOVERNANCE IMPLEMENTATION POLICY The implementation of Sharia Governance at CIMB CIMB Niaga has established a Sharia Business Unit Niaga is based on 5 (five) basic principles, which are (SBU), to respond the demand from the community as follows: for Islamic financial products and services continue 1. Transparency: the transparency in presenting to grow. Toto fulfil the community needs, the SBU material and relevant information, and the continuously improves and refines the quality of transparency in the decision-making process. services, products and operations. 2. Accountability: the clarity and accuracy of presenting information regarding the management One of being by improving the Sharia Governance of the Bank that runs effectively in accordance with that refers to the implementation of Good Corporate the objectives. Governance (GCG) and Sharia compliance principles. 3. Accountability: the management of the Bank in accordance with all prevailing rules and regulations CIMB Niaga Sharia Governance refers to BI Regulation and the principles of sound SBU management. No.11/33/PBI/2009 dated 7 December 2009, BI Circular 4. Professionalism: having competence, being able Letter No.12/13/DPbS dated 30 April 2010 regarding to act impartially and free from influence/pressure Implementation of Good Corporate Governance for from any parties and having a high commitment in Sharia Commercial Banks and Sharia Business Units, developing a Sharia business. and OJK Circular Letter No. 43/SEOJK.03/2016 dated 5. Fairness: fairness and equality in fulfilling the rights 28 September 2016 regarding Transparency and and interests of stakeholders based on all prevailing Publication of Reports of Conventional Commercial rules and regulations. Banks.

SHARIA GCG SELF-ASSESSMENT GCG Self-Assessment is conducted by the Bank to assess the results of CIMB Niaga Sharia GCG implementation for 1 (one) year as required by the regulator. The assessment is routinely performed by sending questionnaires to members of the Sharia Supervisory Board, Board of Directors and Executive Officers. The areas assessed are as follows:

Weight Rating Score No Factor (a) (b) (a) x (b) 1 Implementation of Duties and Responsibilities of Director of SBU 35.00% 1.27 0.44 Implementation of Duties and Responsibilities of the Sharia Supervisory Board 2 20.00% 1.28 0.26 (SSB) Sharia Principles Implementation in Funding and Financing Activities as well as 3 10.00% 2.27 0.23 Services 4 Financing to Core Customers and Funding from Core Customers 10.00% 2.20 0.22 Transparency of Financial and Non-Financial Conditions, Report on GCG 5 25.00% 1.55 0.39 Implementation and Internal Reporting Composite Index 100.00% 1.53

Composite Index Attribute Composite Index < 1.5 Very Good 1.5 ≤ Composite Index < 2.5 Good 2.5 ≤ Composite Index < 3.5 Fair 3.5 ≤ Composite Index < 4.5 Poor 4.5 ≤ Composite Index ≤ 5 Very Poor

622 Annual Report 2018 PT Bank CIMB Niaga Tbk Supporting Corporate Governance Corporate Social Others Consolidated Business Review Report Responsibility Corporate Data Financial Report

SHARIA SUPERVISORY BOARD d. Has never been convicted for committing a The Sharia Supervisory Board (SSB) serves as one of crime that was detrimental to state finances the main bodies for Sharia Governance within the and/or related to the financial sector; Bank. The SSB has the authority to supervise, monitor, e. Has never been a member of the Board of provide Sharia opinions, approve and closely watch all Directors and/or Board of Commissioners SBU activities in accordance with Sharia Principles. whereby during its tenure: The SSB is appointed and approved by the General 1) Failed to organize Annual GMS; Meeting of Shareholders (GMS) after obtaining 2) Their accountability was rejected by the GMS recommendations from the National Sharia Council or they failed to provide accountability as a – Majelis Ulama Indonesia (DSN-MUI) and obtaining member of the Board of Directors and/or approval from OJK following the fit and proper test. Board of Commissioners to the GMS; f. Has caused a company that obtained a license, SSB Criteria approval or registration from the OJK, to fail to Based on the Bank’s SSB Charter, SSB members must fulfil its obligation to submit an Annual Report meet the following requirements: and/or Financial Report to OJK. 1. Integrity, at least covering: a. Having good character and morals; SSB Structure, Composition and Term of Office b. Having a commitment to comply and fully The minimum number of SSB members is 2 (two) implement with professionalism the SSB persons, with a maximum of 3 (three) persons. The SSB Charter, Sharia banking provisions, and all is led by a Chairman appointed from one of the SSB prevailing rules and regulations; members. c. Having a commitment to developing a sound and solid Islamic banking; The Bank’s SSB members have the ability to perform d. Not being listed in the Fit and Proper List (Failed the mandated responsibilities and possess adequate List) as governed in the provisions regarding the understanding and competence to perform its fit and proper test stipulated by OJK. duties and responsibilities well and encourage the e. Has never committed a fraud, embezzlement, improvement of CIMB Niaga Sharia’s performance. and/or irregularities in the fields of Banking, Finance, and other fields of business, and has The SSB members are appointed by the GMS for never been convicted of a crime (proven by a the period starting from the closing of the GMS that personal statement). appoints them until another date specified by the GMS 2. Competence, at least having knowledge and and expiring at the closing of the 4th (fourth) AGM after experience in the area of Sharia Mu’amalah and the appointment, without prejudice to the right of the knowledge in banking and/or finance in general. GMS to dismiss the SSB members prior to the end of 3. Reputation, at least within the last 5 (five) years the term of office by disclosing the underlying reason. prior to being nominated: This dismissal is effective from the closing of the GMS a. Not being included in the Black List and list of unless otherwise determined by the GMS. non-performing loans issued by OJK; b. Has never been declared bankrupt; c. Has never served as shareholder, member of the Board of Commissioners, or the Board of Directors of a Company and/or a member of management of a business entity that was found guilty of causing a company and/or business entity to be declared bankrupt.

Annual Report 2018 PT Bank CIMB Niaga Tbk 623 Management Discussion Performance Highlights Management Reports Company Profile and Analysis Risk Management

Sharia Business Unit Governance Report

The Composition and Term of Office of SSB of CIMB Niaga :

Term of Office

No Name Position Latest GMS Appointment BI/OJK Approval Term of Office Re-appointment

1 M. Quraish Shihab Chairman AGM No. 11/260/ AGM 2016 - 2019 concurrently 23 April 2008 DPbS dated 11 15 April 2016 Member February 2009

2 Fathurrahman Djamil Member EGM No. 11/260/ AGM 2016 - 2019 19 December 2008 DPbS dated 11 15 April 2016 February 2009

3 Yulizar Djamaluddin Sanrego Member AGM No. 15/825/DPbS AGM 2016 - 2019 28 March 2013 dated 10 June 15 April 2016 2013

SSB Duties and Responsibilities SSB Charter The SSB duties and responsibilities include providing The SSB established a Charter that refers to the advice and recommendations to the Director prevailing rules and regulations in Indonesia that is responsible for the SBU. and overseeing SBU activities regularly updated with improvements and adjustments. in accordance with Sharia Principles. The Charter serves as the binding work guidelines and procedures for each SSB member to enable the SSB The SSB’s oversight over SBU includes the following: to perform their supervisory function in an efficient, 1. Assessing and ensuring compliance with Sharia effective, transparent, independent and accountable Principles regarding Sharia operational and manner. The SSB Charter governs the following matters: product guidelines issued by the Bank; 1. Duties and Responsibilities 2. Overseeing the process of developing the Bank’s 2. Membership Sharia-related new products in accordance with 3. Mechanism and Work Plan the fatwa from DSN-MUI; 4. Ethics and Work Hours 3. Providing Sharia opinions regarding new products 5. Remuneration and Facilities and/or restructured financing related to Sharia with 6. Meetings and Minutes of Meetings reference to, fatwa from DSN-MUI and provisions 7. Performance Assessment and Accountability governing the implementation of Sharia Principles 8. Working Units that Support the Implementation of and business activities in Sharia Commercial Banks SSB Duties and Responsibilities, and and SBU; 9. Reporting 4. Requesting a fatwa from the DSN-MUI for Bank’s Sharia-related new products that do not have a SSB Work Program in 2018 fatwa yet; In 2018, CIMB Niaga SSB followed various work 5. Periodically reviewing the compliance of Sharia programs and activities related to the implementation Principles concerning the mechanism for fund of Sharia GCG in the Bank, including: raising and fund disbursement as well as Bank 1. Conducted a minimum of 1 (one) meeting a month services; to discuss the issues related to Sharia principles 6. Evaluating the Board of Directors’ accountability for compliance on product proposals, operational the implementation of Risk Management policies guidelines, financing models, financing proposals, related to compliance with Sharia Principles; risk profiles, financial performance, charity and ZIS 7. Requesting data and information related to Sharia funds, etc. aspects from the Bank’s working units that perform 2. Actively participated in activities and built and/or relate to Sharia activities in the context of communication with external parties (OJK and conducting their duties; and DSN-MUI) to receive update information and 8. Performing duties and responsibilities in provisions related to the development of contract, accordance with the principles of Good Corporate products and others. Governance.

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3. Conducted Sharia compliance reviews periodically 4. Conducted 2 (two) meetings with related working on the Sharia Branch Offices (KCS) including Office units to discuss the results of the Sharia compliance Channeling (OC) and other Business Units and review. prepared SSB Supervisory Reports (LHP) every 6 5. Submitted the SSB Supervisory Report (LHP) for (six) months for the Board of Directors, Board of the period of: Commissioners and OJK. a. 2nd Half of 2017, submitted in February 2018; 4. Conducted workshops with related business units 2 b. 1st Half of 2018, submitted in August 2018. (two) times in 1 (one) year. 6. Conducted 2 (two) CIMB Niaga Syariah Internal Workshops in 1 (one) year with the theme of: SSB Work Program Realization in 2018 a. MMQ iB Financing; In 2018, based on the work program prepared by SSB, b. SSB Charter. realized the following: 7. Contributed to Sharia GCG through the 2018 GCG 1. Conducted 12 (twelve) regular meetings to discuss Self-Assessment based on the requirements from new products, features, programs, operational authorities. guidelines, financing/funding models, financing 8. Discussed and formulated the IGC membership proposals, risk profiles, financial performance, together with all SSB affiliated companies in the Qardhul Hasan fund and ZIS, etc. CIMB Indonesia Financial Conglomerate. 2. Attended the Workshop for SSB of Sharia Financial 9. Actively contributed to the membership of IGC in Institutions – Sharia Banking sector and Sharia accordance with the regulator’s requirements. Financing in 2018 at the 2018 Pre Ijtima ‘Sanawi (Annual Meeting) and Ijtima’ Sanawi (Annual SSB Member’s Concurrent Positions Meeting) for SSB held by DSN MUI and OJK. Based on BI Regulation No.11/10/PBI/2009 regarding 3. Reviewed Sharia compliance through sampling Sharia Business Unit article 11 paragraph 3, members tests of financing, funding and service transactions of SSB may concurrently serve as SSB members in at for MMQ products for the Commercial Banking least four (4) other Sharia financial institutions. The segment, and SME financing, iB Mortgage concurrent position of all SSB member of CIMB Niaga Financing, Fundraising in KCS and Office Sharia has met the above mentioned requirements. Channelling, iB Mapan Savings with Endowments, and Top-10 Funding Customers.

The Concurrent Position of SSB from CIMB Niaga

Name Position in Other Company Company/Organization

M. Quraish Shihab None None (Chairman concurrently Member)

Fathurrahman Djamil SSB Chairman Bank BCA Syariah (Member) SSB Member • AIA Sharia Branch, • CIMB Niaga Autofinance, • Adira Finance Sharia

Yulizar Djamaluddin Sanrego SSB Chairman None (Member) SSB Member • LPEI EKSIM • BPRS BTB • Panin Sekuritas

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Sharia Business Unit Governance Report

SSB Meeting Frequency and Attendance SSB held 12 (twelve) regular meetings to discuss new products, features, programs, operational guidelines, financing/funding models, financing proposals, etc.:

Attendance of SSB in Regular Meeting in 2018

Name SSB Meeting Frequency in 2018 Attendance Frequency Attendance Level

M. Quraish Shihab 12 100%

Fathurrahman Djamil 12 12 100%

Yulizar Djamaluddin Sanrego 11 91.6%

Regular Meeting Resolutions The SSB Regular Meetings in 2018 resulted in a number of approvals covering the following provisions, policies/ procedures, activities and products:

No. Description

1 Internal Provisions - Sharia Trade Finance Products Policy

2 Internal Provisions – SOP of Qardhul Hasan Fund

3 Internal Provisions - Sharia Commercial Financing Policies

4 Internal Provisions - SOP of Edu Payment

5 Internal Provisions - Employee Benefit Program Policies

6 Internal Provisions - SOP of Electronics Alert (SMS Notification)

7 Internal Provisions - SOP of CIMB Niaga Retirement Savings

8 Internal Provisions - SOP of Daily Account Transaction Data Services

9 Internal Provisions - Standard Procedure for Implementing EDC Receivable

10 Internal Provisions - SOP of Zakat, Infaq and Donation (ZIS)

11 Internal Provisions - Operational Policies for Commercial and Consumption Financing - Call Back

12 Internal Provisions - Principal Policy for Commercial Sharia Financing

13 Internal Provisions - Risk Management Policy

14 Internal Provisions - SOP of Hypermart Savers

15 iB MMQ Mortgage - Top Up Features and Asset Revaluation

16 New Products - Trade Finance for Financing iB Import and Export

17 Internal Provisions - Sharia Card Policy

18 New Product - KPM iB Auto Swakarsa

19 Internal Provisions - Product Policy for Trade Finance Sub Shipping Guarantee iB

20 Internal Provisions - Product Policy for Trade Finance Sub Transactions of Usance Payable at Sight (UPAS iB)

21 Internal Provisions - SOP of Sharia Bank Head Office (LKPBU) Reports

22 Internal Provisions - SOP of BUS & SBU Sharia Monetary & Financial System Stability Reports (LSMK)

23 Internal Provisions - SOP of Reporting and Requesting Debtor Information Request Through Sharia Financial Information Service System (SUK)

24 Internal Provisions - SOP of the Procedures of Credit/Financing for Consumption Credit Collateralized by Vehicle

25 Internal Provisions - SOP of the Developer Cooperation Procedures

26 Internal Provisions - SOP of Prepaid Expenses

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No. Description

27 Internal Provisions – SOP of Student Savings

28 Internal Provisions - SOP of Standard Debit Card Procedures

29 Internal Provisions - SOP of Appointed Cross Currency Dealer (ACCD)

30 Internal Provisions – Policy for the Products of Trade Finance Sub-PTK Trade Policy Account Receivable iB, PTK Trade Account Payable iB, Sight iB Export Notes Financing, Usance iB, and Correspondent Bank Export Financing

31 Internal Provisions - Operational Policy for Commercial and Consumption Financing - Special Sub-Policy - Consumption Financing - Coverage of Electronic Insurance Policy

32 Internal Provisions - SOP of Accrued Expenses

33 Internal Provisions - Trade Finance Sub Trust Receipt iB Product Policy

34 Internal Provisions - SOP of Issuance of iB SKBDN

35 Internal Provisions – SOP of Import Letter of Credit iB

36 Sharia Insurance Partner Cooperation with Insurance Companies (Bancassurance) Business Reference Model

37 Internal Provisions - SOP of iB Trade PTK

38 Internal Provisions - SOP of Handling Customer Requests/Complaints

39 Internal Provisions - Internal Audit Charter and Audit Committee Charter

40 Internal Provisions - Treasury Policy

41 Internal Provisions - SOP of KPI Management, Monitoring and Analysis Procedures

42 Internal Provisions - SOP of Sales Performance Target (SPT) Procedure for Monitoring & Analysis

43 Internal Provisions - SOP of MSME Credit/Financing Reports with Executing Patterns

44 Internal Provisions - Personal Financing Policy

45 Internal Provisions - SOP of Settlement of Customers in Arrears or Non-Performing (KPR iB Murabahah)

46 Internal Provisions - SOP of Measurement and Reporting of RWA Credit/Financing Using CRIPA-S

47 Internal Provisions – Policies of Project Management, Change Requests and Routine Capital Expenditures

48 Internal Provisions - iB Export SOP

49 Internal Provisions - Money Market Treasury Operational Policies

50 Internal Provisions - Operational Policies of Sharia Bonds

51 Internal Provisions – Anti-Fraud Policy

52 Internal Provisions - SOP of Standard Savings Procedures

53 Internal Provisions - iB Treasury Forex Operational Policy

54 Internal Provisions - SOP of Reporting Violations Through Whistleblowing Service

55 Internal Provisions - Sharia Card Underwriting Policy

56 Internal Provisions - Intangible and Intangible Asset Policies

57 Internal Provisions - SOP of Management of PCs/Laptops

58 Internal Provisions - Management Policy for PCs/Laptops

59 Internal Provisions - Adjustment of Customer Protection Sub Policies

60 Internal Provisions - SOPs of Simple Hedging Transactions (forward) for Sharia Individuals (Collateral for Mapan Savings/Tapen Syariah)

61 Internal Provisions - SOP of Various Types of Loans

62 Internal Provisions - SOP of Consumer Banking Data Centralization

Annual Report 2018 PT Bank CIMB Niaga Tbk 627 Management Discussion Performance Highlights Management Reports Company Profile and Analysis Risk Management

Sharia Business Unit Governance Report

SYARIAH BANKING DIRECTOR 5. Having the ability to perform strategic management The CIMB Niaga SBU are led by the Sharia Banking for the purpose of developing sound and solid SBU. Director who is fully responsible for the implementation of sharia business management based on prudent Sharia Banking Director Term of Office principles and Sharia principles. The Sharia Banking The Term of Office for the Sharia Banking Director is the Director is Pandji Pratama Djajanegara, who was same as other CIMB Niaga Directors, and is appointed appointed based on the AGM resolution dated 15 April by the GMS for the period from the closing of the GMS 2016, and approved by OJK Letter No. SR-27/PB.13/2016 that appoints them or another date resolved by GMS dated 4 October 2016. and shall expire at the closing of the 4th (fourth) Annual GMS after the appointment, without prejudice to the Sharia Banking Director Criteria right of the GMS to dismiss the Sharia Banking Director The Sharia Banking Director criteria is based on, prior to the expiration of their term by disclosing the Bank Indonesia Regulation (PBI) No. 11/10/PBI/2009 underlying reason. This dismissal is effective after the concerning Sharia Business Units, PBI No. 14/6/PBI/2012 closing of the GMS unless otherwise determined by concerning Fit and Proper Test for Sharia Banks and the GMS. Sharia Business Units, and BI’s Circular Letter No. 14/25/ DPbS concerning Fit and Proper Test for Sharia Banks Sharia Banking Director Profile and Sharia Business Units. The Sharia Banking Director profile can be seen in the Board of Directors’ Profile section of this Annual Criteria that must be met by the candidates for Sharia Report. Banking Director include: 1. Having good integrity, competence and financial Sharia Banking Director Duties and Responsibilities reputation as required by prevailing regulations; 1. Conducting management and supervision based 2. Having a commitment to the development of on prudential principles and Sharia principles sound Sharia banking operations; 2. Following up on SSB recommendations 3. Having sufficient knowledge and understanding in 3. Implementing OJK regulations related to SBU the field of Sharia banking operations; 4. Having knowledge and expertise in the fields of TRANSPARENCY OF FINANCIAL AND NON- banking operations, Sharia banking, finance or FINANCIAL CONDITION Sharia finance; Throughout 2018 no consultants and advisors were appointed by the SBU.

INTERNAL FRAUD AND SETTLEMENT EFFORTS Based on the Internal Audit and Anti-Fraud Management report, no internal fraud occurred in 2018 with a value of more than Rp100,000,000 (one hundred million rupiah).

Fraud Committed by

Board of Commissioners Non-Permanent Internal Fraud in 1 year Permanent Employee and Board of Directors Employee

2018 2017 2018 2017 2018 2017

Resolved ------

Under internal settlement process - - - 1 - -

Not yet settled ------

Followed up by legal proceedings ------

Total Fraud - - - 1 - -

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LEGAL CASES (CIVIL AND CRIMINAL) AND SETTLEMENT PROCESS In 2018, the legal issues involving CIMB Niaga SBU were only related to civil cases without any criminal cases as disclosed in the table below:

Civil

Civil Legal Issues (Bank as Defendant) 2018 2017 2016

Total Cases 5 6 5

Settled Cases (Legally Binding) - 2 1

Cases in Settlement Process (as of December) 5 4 4

Criminal

Criminal Legal Issues (Bank as Defendant) 2018 2017 2016

Total Cases - - 1

Settled Cases (Legally Binding) - - 0

Cases in Settlement Process (as of December) - - 1

NON-HALAL REVENUE AND UTILIZATION In 2018, no Non-halal revenue was generated by CIMB Niaga SBU.

DONATION FOR SOCIAL ACTIVITIES During 2018, CIMB Niaga SBU in collaboration with humanitarian social institutions, religious institutions and educational institutions organized 482 (four hundred eighty two) programs with a total funding of Rp14.8 billion. Recipients of these funds were grouped into 5 (five) categories with details as follows:

Distribution Sector Number of Activities Donation (Rp)

Economic Empowerment 19 948, 465,000

Education 192 4,996,655,950

Infrastructure 56 3,913,132,583

Health 90 2,399,825,000

Social 125 2,573,840,500

Total 482 14,831,919,033

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Sharia Business Unit Governance Report

The featured programs in collaboration with partner Education institutions were divided into five areas of Qardhul − CIMB @Campus program through 18 well-known Hasan Fund distribution, which included: universities in Indonesia for 242 high-achieving underprivileged students in collaboration with the Economic Empowerment CIMB Niaga CSR team. − Desa Berdaya Program: the provision of a Revolving − Al Qur’an Madrasah Development Program in Capital Fund for families with Micro Businesses in Papua in collaboration with DT Peduli. collaboration with Al Azhar Amil Zakat Institution − Tahfizh Qur’an For Leaders Scholarship Program in located in Pacet (West Java), Majasem (Central Java) collaboration with PPPA Daarul Quran Nusantara. and Tibarau Panjang (South Kalimantan). − Dhuafa Education Scholarship in South Tangerang − Empowerment Solution Program for underprivileged in collaboration with Al Fatih Teacher Academy. families in Banjarmasin (South Kalimantan) in − Remote Teachers Care Program in collaboration collaboration with Daarut Tauhid (DT) Peduli. with DT Peduli. − Community-Based Productive Economic − Palu Recovery Program for School Development in Empowerment Program (MISYKAT) in Medan and collaboration with Rumah Zakat Indonesia. Semarang in collaboration with DT Peduli. − Lombok Earthquake Care Program to Build Schools − Program for procurement of fishing facilities for in collaboration with Asbisindo. small scale fishermen in Lampung in collaboration − Development Program for Islamic Kindergartens with DT Peduli. and Daycare in Jakarta in collaboration with the ESQ − Procurement of 5 Dhuafa Ketinting Ship Fishing Humanitarian Institution. Units in Flores NTT in collaboration with Al Quran − Scholarship Program for underprivileged students Waqf Agency (BWA). and college students in Papua to work together with − Bina Mualaf Village Economic Empowerment STIE Tazkia. Program in Ciranjang (Cianjur) in collaboration with − Daycare and Worship Facilities Development the Inisiatif Zakat Indonesia (IZI). Program in Amanuban NTT in collaboration with − Productive Small Business Development Program Baznas. in Bandung in collaboration with Pusat Zakat Umat − Qur’an Reading Movement Program in Indonesia in (PZU) Bandung. collaboration with the Cinta Qur’an Foundation. − Revolving Capital Package Program for MSME members of the Kelompok Kerja Majelis Taklim Infrastructure (KKMT) Bandung in collaboration with KKMT, − The Kampung Qur’an Mosque Development Bandung. Program in Oe Ue - NTT in collaboration with PPPA − Agricultural Capital and Livestock Capital Program Daarul Quran Nusantara. for Tengger - Semeru dhu’afa community in East − Development Program of the Qur’an House in Java in collaboration with Baitul Maal Hidayatullah Lombok in collaboration with PPPA Daarul Quran (BMH). Nusantara. − Islamic Finance Access Program for Mosque- − Clean Well Water Procurement Program for Based Independent Community in East Java in Residents in Palu in collaboration with ACT. collaboration with Aksi Ummad - Regional 4 East − Clean Water Well Procurement Program in Java OJK. Sukabumi in collaboration with DT Peduli. − Sewing Machine Program for Jabotabek Disabled − Procurement of Clean Water Facilities for Mothers in collaboration with Aksi Cepat Tanggap Underprivileged Village in Samarinda in (ACT). collaboration with Ikatan Istri Dokter Indonesia (IIDI) Samarinda branch. − Palu Recovery Program for Mosque Development in collaboration with Rumah Zakat Indonesia.

630 Annual Report 2018 PT Bank CIMB Niaga Tbk Supporting Corporate Governance Corporate Social Others Consolidated Business Review Report Responsibility Corporate Data Financial Report

Health Social − Emergency Room Procurement Program of Hasyim − Earthquake Care Program of Lombok in collaboration Asyari Hospital of Dompet Dhuafa in collaboration with Al Azhar Peduli Ummat, Aksi Cepat Tanggap with Dompet Dhuafa in Jombang, East Java. (ACT), Lazis Dewan Da’wah and Dompet Peduli − Dental Clinic and Child Growth and Development Ummat-DT Program in Depok in collaboration with Mulia Health − Central Sulawesi Earthquake and Tsunami Care & Dental Care (MHDC) Group. Program in collaboration with the Ministry of Village, − Asmat Tribe Malnutrition Response Program in Financial Services Authority, Dompet Dhuafa, PPPA Papua in collaboration with PPPA Daarul Quran Darul Qur’an, Rumah Zakat Indonesia, DT Peduli, Nusantara. LAZIS Dewan Da’wah. − Mobile Program for Humanity in Yogyakarta in − Educational and daily needs assistance for the collaboration with ACT. Orphanage Foundation for the Development of − Free Ambulance Program in Solo in collaboration Disabled Children in Bandung. with BMT Mulia Fund. − Ramadhan Gift and Donation Program for Orphans − Free Ambulance Program in Yogyakarta in and Dhuafa in Malang, East Java in collaboration collaboration with the Medical Emergency Rescue with DT Peduli. Committee (MER-C). − Fasting Break Food Truck Program in Bandung in − Free Ambulance Program in Sumedang, West Java collaboration with ACT in collaboration with Tampomas Foundation. − Healthy Orphan Car Program in Surabaya in collaboration with Yatim Mandiri Foundation. − Mobile Health Service Program and USG Examination Program in Jakarta in collaboration with Lovepink Cancer Community. − Open House and Family Room for Cancer Children Program in Jakarta in collaboration with the Ronald Mcdonald House Charities Foundation.

Annual Report 2018 PT Bank CIMB Niaga Tbk 631 Management Discussion Performance Highlights Management Reports Company Profile and Analysis Risk Management

Submission of the 2018 Sustainability Report

CIMB Niaga has prepared and published its 2018 No. 51/POJK.03/2017 regarding the Implementation of Sustainability Report that contains the Bank’s Sustainable Finance for Financial Services Institutions, economic, environment, and social performance, Issuers and Public Companies as well as the Global including the Bank’s CSR programs and activities. Reporting Initiative (GRI) - Core option and GRI – The Sustainability Report has been prepared in Financial Sector. accordance with the provisions of FSA Regulation

Bad Corporate Governance Practices

Due to awareness of the adverse effect of Bad Corporate Governance practices that could hinder the implementation of Good Corporate Governance (GCG), CIMB Niaga throughout 2018 was very committed to not commit to any actions or policies concerning the practices depicted in the table as follows:

Description Practice

Being reported as a Company that pollutes the environment Nil

Significant legal proceeding currently involving the company, subsidiaries, members of the Board of Directors and/ Nil or members of the Board of Commissioners that are not disclosed in the Annual Report

Non-compliance in meeting tax liabilities Nil

Mismatch between the presentation of the Annual Report and financial statements and prevailing regulations and Nil applicable Financial Accounting Standards

Cases related to workers and employees Nil

No disclosure of operating segments in a listed company Nil

Discrepancies between hardcopy and softcopy of Annual Report Nil

632 Annual Report 2018 PT Bank CIMB Niaga Tbk Supporting Corporate Governance Corporate Social Others Consolidated Business Review Report Responsibility Corporate Data Financial Report

Good Corporate Governance Declaration of Conduct

All CIMB Niaga management and employees declare that in conducting business activities, we have adopted the principles of Good Corporate Governance and there has been no material breach of the prevailing rules and regulations.

In addition, CIMB Niaga also has implemented the principles of Governance in accordance with the principles of the ASEAN Corporate Governance Scorecard.

The management and employees are committed to continually improving our Good Corporate Governance practices in a transparent, accountable, responsible, and independent manner, with due observance to fairness, equality, sustainability and impartiality in order to achieve CIMB Niaga’s business objectives.

Glenn M. S. Yusuf Tigor M. Siahaan Vice President Commissioner President Director

Annual Report 2018 PT Bank CIMB Niaga Tbk 633