table of contents banjaran majalengka district, pd bpr cigasong, majalengka district, pd bpr...

TABLE OF CONTENTS

A. Background 1

B. Financial Conglomeration Structure 1

C. The Ownership Structure of Financial Service Institution,

Member of Financial Conglomeration 4

C.1 Principal Entity 4

C.2 Subsidiary 5

C.3 Related Companies 5

D. The Management Structure of Financial

Service Institution, Member of Financial Conglomeration 8

D.1 Principal Entity 8

D.2 Subsidiary 9

D.3 Related Companies 9

E. Execution of Duties and Responsibilities of the Principal

Entity’s Board of Directors and Board of Commissioners 12

E.1 Performance of functions and Responsibilities of

the Principal Entity’s Board of Directors 12

E.2 Execution of Duties and Responsibilities of

the Board of Commissioners 13

F. Execution of the Task of Integrated Good Governance Committee 13

F.1 The Independence of the Integrated Good Governance Committee 14

F.2 The Roles and Responsibilities of the Integrated

Good Governance Committee 14

F.3 The Meeting and Attendance of the Integrated

Good Governance Committee 15

F.4 Execution of the Task of Integrated Good Governance Committee 15

G. The Implementation of the Integrated Compliance, Integrated

Internal Audit, and Integrated Risk Management 16

G.1 Integrated Compliance 16

G.2 Integrated Internal Audits 16

G.3 Integrated Risk Management 16

H. Integrated Good Governance Management 17

I. Inter-Group Transaction Policy 18

J. Self-Assessment Report of the Integrated

Good Governance of 2015 18

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The Implementation of bank bjb Integrated Corporate Governance Year 2016 1

The Implementation of bank bjb Integrated Corporate GovernanceYear 2016

A. Background

The implementation of integrated corporate governance performed by PT. Bank

Pembangunan Daerah Jawa Barat danBanten, Tbk.,from now on referred to be called

as the Bank, is one of the programs that has been performed consistently by the Bank.

Amidst minimum literature on the integrated corporate governance for Financial

Institutions in Indonesia, the bank continues to make the improvements on its

integrated corporate governance to establish itself as a healthy financial

conglomeration and continue to participate in creating a steady and sustainable

financial service sector.

Fundamental Principles

In reference to the Financial Services Authority Regulation number 18/POJK.03/2014

Concerning Implementation Of Integrated Good Corporate Governance For Financial

Conglomerates, the implementation of Integrated Governance is a management

applying the principles of:

1. Transparency;

2. Accountability;

3. Responsibility;

4. Independence or professional and;

5. Fairness.

As part of the Good Corporate Governance, the Bank has put the above principles in

place and has very high commitment towards an excellence Integrated Good

Governance within the Financial Conglomeration.

B. Financial Conglomeration Structure

Under the Financial Services Authority Regulation of number 18/POJK.03/2014 On the

Application of Concerning Implementation Of Integrated Good Corporate Governance

For Financial Conglomerates, each Financial Services Institution is required to identify

the ownership and/or control relationship with the other Financial Services

Institutions. The Bank has identified 3 (three) Financial Services Institutions that is

under direct ownership and/or control of the Bank, i.e.:

1. PT Bank Jabar Banten Syariah;

2. PT BPR Karya Utama; and

3. PT BPR Intan Jabar.

As part of the efforts to determine related companies, the Bank with controlling

shareholders, and in this particular is the Provincial Government of West Java, have

identified the Financial Services Institution owned and/or control by the West Java

Provincial Government. As a response to the identification, the Government of West

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Java has submitted all Financial Service Institutions owned and/or controlled by the

Government of West Java in a letternumber539/1030/Inves&BUMD dated 02 March

2015 concerning the Appointment of bjb as the Principal Entity and letter

number539/1495/Inves&BUMD dated 27 March 2015 concerning the appointment of

bjb as the Principal Entity. Under the letter from the West Java Provincial

Government, the Bank has was appointed as the Main Principal for all the Financial

Services Institution owned and/or controlled by the Provincial Government of West

Java. The Financial Services Institutions owned and/or Controlled by the Government

of West Java Province are:

1. PD BPR Warungkondang, Cianjur District;

2. PD BPR Cipatujah, Tasikmalaya District;

3. PD BPR Leuwiliang, Bogor District;

4. PD BPR Citeureup, Bogor District;

5. PD BPR Parungpanjang, Bogor District;

6. PD BPR Sawangan, Bogor District;

7. PD BPR Pancoran Mas, Bogor District;

8. PD BPR Bekasi, Bekasi District;

9. PD BPR Setu, Bekasi District;

10. PD BPR Sukatani, Bekasi District;

11. PD BPR Pondokgede, Bekasi District;

12. PD BPR Cibarusah, Bekasi District;

13. PD BPR Cibitung, Bekasi District;

14. PD BPR Arahan Kidul, Indramayu District;

15. PD BPR Balongan, Indramayu District;

16. PD BPR Bongas, Indramayu District;

17. PD BPR CantigiKulon, Indramayu District;

18. PD BPR Kroya, Indramayu District;

19. PD BPR Sukra, Indramayu District;

20. PD BPR Banjaran, Majalengka District;

21. PD BPR Cigasong, Majalengka District;

22. PD BPR Cingambul; Majalengka District;

23. PD BPR Panyingkiran, Majalengka District;

24. PD BPR Cimerak, Ciamis District;

25. PD BPR Saketi, Pandeglang District;

26. PD BPR MaiingpingLebak District;

27. PD BPR Cipanas, Lebak District;

28. PD BPR Warunggunung, Lebak District;

29. PD BPR Kertaraharja, Tangerang District;

30. PD BPR Serang, Serang District.

31. PT. Jamkrida Jabar

Based on the result of the identification performed above, in the decision of the Boards

of Directors number 1159/SK/DIR-MR/2015 concerning the Financial Conglomeration

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Structure of PT. Bank Pembangunan Daerah Jawa Barat danBanten, Tbk, the Bank has

stipulated the following Financial Conglomeration Structure:

After the identification, the Bank reviewed the Financial Services Institution under the

Bank’s Financial Conglomeration, particularly the Financial Service Institutions owned

and/or controlled by the Provincial Government of West Java as an effort to ensure the

observance of the undertakings of Integrated Governance within Financial

Conglomeration. Based on the result of the review that has been performed, several

items that changed the Bank’s Financial Conglomeration were found:

1. The review of PT Jamkrida Jabar’s area of business, it was found that PT

JamkridaJabar is an underwriting company. In reference to the Financial Services

Authority number 18/POJK.03/2014 Concerning Implementation Of Integrated

Good Corporate Governance For Financial Conglomerates (Article 3), the

underwriting company is not a Financial Service Institution included in the

financial conglomeration. Therefore it is not meeting the criteria as the member of

financial conglomeration. The Financial Services Authority has also underlined the

same with the letter number S-22/KR.212/2016 Concerning the Confirmation of

Financial Conglomeration.

2. Merging of Financial Service Institution within the area of Bekasi District, i.e. PD

BPR Bekasi, Bekasi District; PD BPR Setu Bekasi District; PD BPR Sukatani Bekasi

District; PD BPR Pondokgede Bekasi District;; PD BPR Cibarusah Bekasi District;;

PD BPR Cibitung Bekasi District; according to the Minutes of Extraordinary

Shareholders Meeting on the Approval of the Shareholders on the Deed of Merger

of PD BPR LPK (Perusahaan Daerah Bank Perkreditan Rakyat Lembaga

Perkreditan Kecamatan) Pondokgede, PD BPR LPK Sukatani, PD BPR LPK Setu,

PD BPR LPK Cibarusah, PD BPR LPK Cibitung into PD BPR LPK Bekasi number 55.

3. The merger of Financial Service Institution within Majalengka District, i.e., PD

BPR Banjaran Majalengka District, PD BPR Cigasong, Majalengka District, PD BPR

Cingambul, Majalengka District, PD BPR Panyingkiran, Majalengka District,

according to the Deed of Merger number 32.

West Java ProvincialGovernment

bank bjb

PT Bank JabarBanten Syariah

PT BPR KaryaUtama

PT BPR IntanJabar

30 Related

BPRs

PT JamkridaJabar

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Based on the above, in the decision letter of the Boards of Directors number

08570/SK/DIR-MR/2016 concerning the Financial Conglomeration Structure of PT.

Bank Pembangunan Daerah Jawa Barat danBanten, Tbk, the Bank has stipulated the

following Financial Conglomeration Structure:

C. The Ownership Structure of Financial Service Institution, Member of Financial

Conglomeration

C.1 Principal Entity

The ownership structure of the Bank as the Principal Entity as follows.

Shareholders Percentage of Share Ownership

West Java Provincial Government 38.26%

Bandung Municipality Administration 1.20%

Cirebon Municipality Administration 0.18%

Sukabumi MunicipalityAdministration

0.38%

Bekasi Municipality Administration 0.62%

Bogor Municipality Administration 0.48%

Cimahi Municipality Administration 1.07%

Depok Municipality Administration 0.92%

Tasikmalaya MunicipalityAdministration

0.62%

Banjar Municipality Administration 0.42%

Bandung District Administration 7.02%

Cirebon District Administration 0.55%

Karawang District Administration 0.56%

Ciamis District Administration 0.34%

Tasikmalaya District Administration 1.35%

Sukabumi District Administration 0.86%

Subang District Administration 0.44%

West Java ProvincialGovernment

bank bjb

PT Bank JabarBanten Syariah

PT BPR KaryaUtama

PT BPR IntanJabar

22 Related

BPR

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C.2 Subsidiary

The following is the ownership structure of the Financial Services Institution

positioned as the subsidiary of the Bank.

1. PT Bank Jabar Banten Syariah


Bank 98.61%

PT. Banten Global Development 1.39 %

2. PT BPR Intan Jabar


Bank 36.91%


Garut District Administration 31.70%

3. PT BPR Karya Utama Jabar


Bank 44.32%


Subang District Administration 22.27%

C.3 Related Companies

The following is the ownership structure of the Financial Services Institution

positioned as the relevant companies of the Bank.

1. PT BPR Cianjur Jabar



Cianjur District Administration 47.87%

Bank bjb 12.25%


Indramayu District Administration 0.87%

Bekasi District Administration 0.76%

Sumedang District Administration 0.47%

Bogor District Administration 2.00%

Cianjur District Administration 1.06%

Kuningan District Administration 0.28%

Majalengka District Administration 0.37%

Garut District Administration 0.27%

Purwakarta District Administration 0.53%

Banten Provincial Government 5.37%

Tangerang MunicipalityAdministration

1.23%

Cilegon Municipality Administration 0.60%

Serang District Administration 1.49%

Tangerang District Administration 2.98%

Lebak District Administration 0.37%

Pandeglang District Administration 1.09%

Public 25.00%

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2. PT BPR Cipatujah Jabar



Tasikmalaya District Administration 62.00%

Bank bjb 4.96%

3. PD BPR LPK Leuwiliang, Bogor District




Bank bjb 4.63%

4. PD BPR LPK Citeureup, Bogor District




Bank bjb 4.63%

5. PD BPR LPK Parungpanjang, Bogor District




Bank bjb 10.99%

6. PD BPR LPK Sawangan, Bogor District




Bank bjb 10.99%

7. PD PD LPK Pancoran Mas, Bogor District




Bank bjb 10.99%

8. PD BPR LPK Bekasi, Bekasi District



Bekasi District Administration 30.88%

Bank bjb 7.28%

9. PD BPR LPK Arahan Kidul, Indramayu District




Bank bjb 10.99%

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10. PD BPR LPK Balongan, Indramayu District




Bank bjb 10.99%

11. PD BPR LPK Bongas, Indramayu District




Bank bjb 10.99%

12. PD BPR LPK CantigiKulon, Indramayu District




Bank bjb 10.99%

13. PD BPR LPK Kroya, Indramayu District




Bank bjb 10.99%

14. PD BPR LPK Sukra, Indramayu District




Bank bjb 10.99%

15. PD BPR LPK Panyingkiran, Majalengka District



Majalengka District Administration 35.55%

Bank bjb 8.48%

16. PD BPR LPK Cimerak, Ciamis District



Ciamis District Administration 58.33%

Bank bjb 12.50%

17. PD BPR Berkah, Pandeglang District




Pandeglang District Administration 59.70%

Bank bjb 8.06%

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18. PD BPR LPK Maiingping, Lebak District





Bank bjb 8.73%

19. PD BPR LPK Cipanas, Lebak District





Bank bjb 6.21%

20. PD BPR LPK Warunggunung, Lebak District





Bank bjb 4.63%

21. PD BPR Kertaraharja, Tangerang District




Tangerang District Administration 76.76%

Bank bjb 1.47%

22. PD BPR LPK Serang,Serang District





Bank bjb 5.46%

D. The Management Structure of Financial Service Institution, Member of

Financial Conglomeration

D.1 Principal Entity

The management structure of the Bank as the Principal Entity as follows.

Board ofCommissioners

Muhadi Commissioner

Klemi Subiyantoro IndependentCommissioners

Rudhyanto Mooduto IndependentCommissioners

Yayat Sutaryat IndependentCommissioners

Suwarta IndependentCommissioners

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Board of Directors Ahmad Irfan Chairman

Suartini Director

Fermiyanti Director

Agus Gunawan Director

Nia Kania Director

Benny Santoso Director

Agus Mulyana Director

D.2 Subsidiary

The following is the management structure of the Financial Services Institution

positioned as the subsidiary of the Bank.

1. PT. Bank Jabar Banten Syariah

The Board ofCommissioners

Erick

Didit Supriyadi

Adang A Kusnandar

Memed Sueb

Board of Directors Yocie Gusman

Hamara Adam

Harta Purnama

Indra Falatehan

Toto Susanto

Board of SupervisorsSharia

Prof. DR. Jaih, SE, MH. M.Ag

Rikza Maulan, Lc, MAg

Drs. H. EndjoSunidja, MM, M.Ag

2. PT. BPR Intan Jabar


Rahmat

Bunyamin Saepudin

Board of Directors Aam Muhamad

Dani Hadian

Deden Rachmat Syawaludin

3. PT BPR Karya Utama Jabar


Rubyana Ramdhan

Board of Directors Oman Sunandar

R. Mohammad Noor Rahman

D.3 Related Companies

The following is the management structure of the Financial Services Institution

positioned as the relevant companies of the Bank.

1. PT BPR Cianjur Jabar

Board of Directors Yayan Suryana

Rachmat Aries

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Subadri


Agus Takkarin Siddiq

2. PT BPR Cipatujah Jabar, Tasikmalaya District

Board of Directors H. Atang Sutarsa

Asep Darlianto

Board of Supervisors H. Amar Sumarna

Asep Budiman

3. PD BPR LPK Leuwiliang, Bogor District

Board of Directors Endang Sukarman

M. Roby Binarta

Board of Supervisors Arief Husin

4. PD BPR LPK Citeureup, Bogor District

Board of Directors Supriyanto

Rupini Surtiastuti

Board of Supervisors Arief Husin

Mulyani

5. PD BPR LPK Parungpanjang, Bogor District

Board of Directors Asep Dadan Suryadarma

Board of Supervisors Asep Dadan Suryadarma

6. PD BPR LPK Sawangan, Bogor District

Board of Directors Nurhikmah

Board of Supervisors Mulyani

7. PD PD LPK Pancoran Mas Depok, Bogor District

Board of Directors Bachrum Suraatmaja

Eka Sugiawibawa

Board of Supervisors Asep Dadan Suryadarma

8. PD BPR LPK Bekasi, Bekasi District

Board of Directors Adi Dadan Nugraha

Devi Puspita Sari

Board of Supervisors Suherman

Dali

9. PD BPR LPK Arahan Kidul, Indramayu District

Board of Directors Warli

Nandang Suherman

Board of Supervisors Nurjaman

Maman Kusman

10. PD BPR LPK Balongan, Indramayu District

Board of Directors Jayana

M. Hasan Sadli

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Board of Supervisors Suwardi

Rosyimin

11. PD BPR LPK Bongas, Indramayu District

Board of Directors Munandar

Mashuri

Board of Supervisors Darma

Nurjaman

12. PD BPR LPK Cantigi Kulon, Indramayu District

Board of Directors Bukaerih

Nasidi

Board of Supervisors Darma

Maman Kusman

13. PD BPR LPK Kroya, Indramayu District

Board of Directors Amar Jaya

AtnoSuratno

Board of Supervisors Wahyudi

Gatot

14. PD BPR LPK Sukra, Indramayu District

Board of Directors Runanto

Duningsih

Board of Supervisors Wibisono

15. PD BPR LPK Panyingkiran, Majalengka District

Board of Directors Oci Sanusi

Nano Priatno

Board of Supervisors Uyet Suyatna

Ajat Sudrajat

16. PD BPR LPK Cimerak, Ciamis District

Board of Directors Endang Suryono

Asep Herman

Board of Supervisors Amir Nuryadin

Nandang Herdiana

17. PD BPR Berkah, Pandeglang District

Board of Directors Jaenudin

Kiki Al Huda

Board of Supervisors Tri WaskitoBudiningrat

Tati Suwagiharti

18. PD BPR LPK Malingping Lebak District

Board of Directors Yatna Supriatna

Board of Supervisors Rina Dewiyanti

Dani Hendarman

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19. PD BPR LPK Cipanas, Lebak District

Board of Directors EllyBurhanudin

Board of Supervisors Imam Santoso

20. PD BPR LPK Warunggunung, Lebak District

Board of Directors Multini

Board of Supervisors Rina Dewiyanti

Dani Hendarman

21. PD BPR Kertaraharja, Tangerang District

Board of Directors Ai Suherlan

Uus Mustaudi

Board of Supervisors Aswandi

Moch. Naim

22. PD BPR LPK Serang,Serang District

Board of Directors Teguh Iman Darmawan

Board of Supervisors Mohamad Tahyar

E. Execution of Duties and Responsibilities of the Principal Entity’s Board of

Directors and Board of Commissioners

E.1 Performance of functions and Responsibilities of the Principal Entity’s

Board of Directors

The Duties and Responsibilities of the Principal Entity’s Board of Directors to

ensure the implementation of Integrated Governance have been with performed

in the following efforts:

1. Formulation of Integrated Good Governance Guideline

The Board of Directors of Principal Entity has formulated the Integrated

Good Governance Guidelines stipulated in the Decision Letter of the Board

of Directors number 0104/SK/DIR-KP/2016 dated 15 February 2016

concerning Integrated Good Governance Policy of the Financial

Conglomeration of PT. Bank Pembangunan Daerah Jawa Barat danBanten,

Tbk. Through the signing of Cooperation Agreement between the Bank and

10 (ten) Financial Service Institution in the Financial Conglomeration in

Bandung on 30 March 2016, the Bank’s Board of Directors have provided all

Financial Service Institutions with Integrated Good Governance Guideline

that has become an inseparable part of the signed cooperation agreement.

2. Supervision and Evaluation of Integrated Good Governance Execution

Board of Directors of the Principal Entity has monitored and evaluated the

Integrated Good Governance Execution among others through focus group

discussion and due diligence performed by the Bank’s Compliance Work

Unit or Risk Management Work Unit.

3. The Bank’s Board of Directors has followed up the direction and advice of the

Board of Commissioners of the Main Entityas an Effort to Improve the

Integrated Governance Guideline. It is evidentof the approval of the Board of

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Commissioners to the Decision Letter of the Board of Directors number

0104/SK/DIR-KP/2016 dated 15 February 2016 concerning Integrated Good

Governance Policy of the Financial Conglomeration of PT. Bank Pembangunan

Daerah Jawa Barat danBanten, Tbk., in the Board of Commissioners Letter Number

010/DK/2016 dated 4 February 2016 concerning the Approval of Integrated Good

Governance Policy.

E.2 Execution of Duties and Responsibilities of the Board of Commissioners

To evaluate the Integrated Good Governance guideline executed in Financial

Conglomeration, The Board of Commissioners have delivered The Letter

Number 010/DK/2016 dated 4 February 2016 regarding the Approval of

Integrated Good Governance policy to the Board of Directors.

The Board of Commissioners also appointed the member of integrated good

governance committee by establishing Good Governance Committee based on

the Decision Letter of the Board of Commissioners number 05/SK/DK/2016

dated 31 March 2016 concerning the Establishment of Integrated Good

Governance Committee.

F. Execution of the Task of Integrated Good Governance Committee

Financial Services Authority number 18/POJK.03/2014 Concerning Implementation Of

Integrated Good Corporate Governance For Financial Conglomerates is stipulated to

guide the performance of integrated good governance for the Financial Services

Institutions with ownership and/or controlling the relationship. Therefore, every

Financial Services Institution in a financial conglomeration is required to put

integrated good governance in place. To do this, the Bank has established an

Integrated Good Governance Committee as part of the supervision to provide

recommendation or advice for the execution of the policy.

The Integrated Good Governance Committee was formedunder:

1. Financial Authority Regulation number 55/POJK.03/2016 Dated 07 December 2016

concerning The Implementation of Good Governance for General Bank;

2. Circular Letter of Bank Indonesia number 15/15/DPNP dated 29 April 2013

concerning The Implementation of Good Corporate Governance for General

Bank;

3. Financial Service Authority Regulation number 17/POJK.03/2014 Dated 18

November 2014 concerning the Implementation of Risk Management for

Financial Conglomeration;

4. Circular Letter of Financial Service Authority number 14/SEOJK.03/2015 Dated 25

May 2015 concerning The Implementation of Risk Management for Financial

Conglomeration;

5. Circular Letter of Financial Authority Regulation number 15/SEOJK.03/2015 Dated

25 May 2016 concerning The Implementation of Good Governance for Financial

Conglomeration;

6. The Decision of the Board of Commissioners of PT Bank Pembangunan

DaerahJawaBarat danBanten,Tbk.Number 07/SK/DK/2015 dated 22 April 2015

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concerning Allocation of Tasks and the Implementation of the Board of

Commissioners’ and Committee’s Activity Schedule.

7. The Decision of the Board of Commissioners of PT Bank Pembangunan Daerah

Jawa Barat danBanten, Tbk. Number 04/SK/DK/2016 dated 30 March 2016

concerning Allocation of Tasks and the Implementation of the Board of

Commissioners’ and Committee’s Activity Schedule.

8. The Decision of the Board of Commissioners of PT Bank Pembangunan

DaerahJawaBarat danBanten,Tbk. Number 05/SK/DK/2016 dated 31 March 2016

concerning the Working Guideline and Regulations of the of Integrated Good

Governance Committee.

Below is the information on the membership, structure, and skills of the Bank’s

Integrated Good Governance Committee of 2016.

No Name Remarks Title Expertise

1 YayatSutaryat IndependentCommissioners

Chairman Legal

2 KlemiSubiyantoro IndependentCommissioner, ActingPresidentCommissioner

Member Accounting and Legal

3 RudhyantoMooduto IndependentCommissioners

Member Accounting andInternational BusinessManagement

4 Suwarta IndependentCommissioners

Member Accounting and Legal

5 Aldrin Herwany Independent Party Member Economy

F.1 The Independence of the Integrated Good Governance Committee

All members of the Integrated Good Governance Committee have no financial

relationship,management, shares ownership and/or family relations with the

Board of Commissioners, Board of Directors and/or Controlling Shareholder, or

any relationship with the Bank that may affect its ability to act independently.

F.2 The Roles and Responsibilities of the Integrated Good Governance

Committee

The Integrated Good Governance Committee has the roles and responsibility to

formulate and implement the annual work plan according to the direction of the

Board of Commissioners and the Bank’s current regulations. The responsibilities

of the Integrated Good Governance Committee are:

(a) Supervise the implementation of good governance in individual Financial

Service Institutions to meet the Integrated Good Governance Policy;

(b) Provide the recommendations to the Principal Entity’s Board of

Commissioners regarding the implementation of the roles and

responsibilities of the Principal Entity’ Board of Directors in the

implementation of Integrated Good Governance Policy and the follow-up of

the internal and external audit results;

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(c) Evaluate the stipulated Integrated Good Governance Policy;

(d) Evaluate and analyse the report of integrated good governance provided by

the Board of Directors and other reports;

(e) Formulate and implement the Integrated Good Governance Committee ‘s

annual work plan according to the direction of the Board of Commissioners

and the Bank’s prevaling conditions.

(f) Create annual work program;

(g) Create the evaluation report and provide the reccomendation to the Board

of Commissioners at least 1 (one) time on a quarterly basis.

F.3 The Meeting and Attendance of the Integrated Good Governance Committee

The Integrated Good Governance Committee has held 10 (ten) meetings. The

following lists the information on the Remuneration and Nomination Committee

meetings:

NameTotal

MeetingsTotal

AttendancePercentage

Yayat Sutaryat 10 10 100%

Klemi Subiyantoro 10 - -

Rudhyanto Mooduto 10 10 100%

Suwarta* 7 5 71.43%

Aldrin Herwany** 6 8 75%

*Appointed as the committee member on 30 March 2016

**Appointed as the committee member on 3 June 2016

F.4 Execution of the Task of Integrated Good Governance Committee

The following lists all of the activities of the Integrated Good Governance

Committe in 2016:

(a) Coordination with the Director of Compliance and Risk Management;

(b) Providing inputs to the Board of the Directors;

(c) Monitor the progress report of the Bank’s Integrated Good Governance and

Integrated Risk Management implementation.

(d) Evaluate task force unit of Integrated Good Governance and Member of


G. The Implementation of the Integrated Compliance, Integrated Internal Audit,

and Integrated Risk Management

G.1 Integrated Compliance

Under the Financial Authority Regulation number 18/POJK.03/2014 Concerning

Implementation Of Integrated Good Corporate Governance For Financial

Conglomerates. The Bank as the Principal Entity is required to have independent

Integrated Compliance Work Unit; In consideration of the Bank’s current

organizational structure the Bank has established Compliance Work Unit;

Therefore, existing Compliance Work Unit has performed the integrated

compliance task; In performing the integrated compliance function, the

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integrated Compliance Work Unit has initiated focus group discussion activity

regarding the application of the Circular Letter of the Financial Service Authority

number 5/SEOJK.03/2016Concerning the Application of Governance for the

People’s Credit Bank. With the of Circular Letter of the Financial Service

Authority in effect,all members of financial conglomeration, which mostly is a

Financial Service Institution in the form of BPR (People’s Credit Bank), are

encouraged to execute a good corporate governance. Under the Circular Letter,

the good corporate governance in BPR among others is applied by completing

the composition of the Board of Directors and the Board of Commissioners,

committees, and implementation of compliance and internal audit functions. In

this governance, all BPRs is required to perform a self-assessment at least 1

(once) a year and issue a report of the good governance application at the end of

the year to be submitted to the Financial Service Authority and other parties by

the prevailing conditions.

G.2 Integrated Internal Audits

Under the Financial Authority Regulation number 18/POJK.03/2014 Concerning

Implementation Of Integrated Good Corporate Governance For Financial

Conglomerates, the Bank as the Principal Entity is required to have independent

Integrated Internal Audits Work Unit. In consideration of the Bank’s current

organizational structure the Bank has established Internal Audits Work Unit; As

a result, the integrated internal audit is embedded in the job description of

General Audit Group under existing Internal Audit Work Unit. The Bank has

also adjusted the integrated audit function on general internal audit policy and

the draft has been completed by the Internal Audit Work Unit on time but still

requires review by relevant work units.

G.3 Integrated Risk Management

The Bank implemented the application of integrated risk management by

following the guidelines provided in the Financial Service Authority Regulation

nomor 18/POJK.03/2014 Concerning Implementation Of Integrated Good

Corporate Governance For Financial Conglomerates. One of the efforts made by

the bank to implement the application of integrated risk management is by

establishing special work unit assigned with the task to monitor the

implementation of risk management in the financial conglomeration. Under the

decision letter of the Boards of Directors number 621/SK/DIR-MR/2015

concerning the Organizational Structure of PT. Bank Pembangunan Daerah Jawa

Barat danBanten, Tbk., the Bank formed an integrated risk management group

under the Bank’s existing Risk Management Work Unit.

To support the implementation of task and responsibilities of integrated risk

management group, the Bank have stipulated some internal policies, i.e.

- Integrated Risk Management Policy as set out in the Decision Letter of the

Board of Directors number 0194/SK/DIR-MR/2016 dated 3 March 2016;

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- The Guideline of Integrated Risk Management Measurement was specified in

the Decision Letter of the Board of Directors0293/SK/DIR-MR/2016 dated 31

March 2016;

- Methodology Assignment and Assessment of Integrated Risk Profiling

Weight Parameter and Intra-group Integrated Risk Parameter stipulated

through the Board of Directors’ Circular Letter number 129/SE/DIR-MR/2016

dated 22 September 2016;

- Integrated Risk Management Policy as set out in the Decision Letter of the

Board of Directors number 0976/SK/DIR-MR/2016 dated 28 October 2016;

- Integrated Risk Management Guidelines as specified in the Decision Letter of

the Board of Directors number 1154/SK/DIR-MR/2016 dated 27 December

2016;

Additionally, giventhe article 16 of the Financial Services Authority Regulation

number 18/POJK.03/2014 Concerning Implementation Of Integrated Good

Corporate Governance For Financial Conglomerates, the Bank as the Main Entity

is also required to establish an Integrated Risk Management Committee. The

Integrated Risk Management Committee is responsible and authorized to

provide arecommendation to the Board of Directors of the Principal Entity at

least in the formulation of the Integrated Risk Management policy and revisions

or improvements of the Integrated Risk Management based on the result of the

implementation evaluation. Based on the above regulation, the Bank stipulated

an internal policy concerning the Integrated Risk Management Committee

through the Decision Letter of the Board of Directors number 1049/SK/DIR-

MR/2016 dated 23 November 2016 Concerning the Integrated Risk Management

Committee Guideline and the Decision Letter of the Board of Directors number

1146/SK/DIR-MR/2016 dated 28 December 2016 Concerning the Structure of the

Integrated Risk Management Committee.

As for other activities performed by the Bank along with other relevant members

of financial conglomeration in the integrated risk management implementation

were focus group discussions and due diligence to ensure that each FSI in the

financial conglomeration implementsthe risk management. The Bank also have

fulfilled the reporting requirements to the Financial Service Authority on the

integrated risk profiling report and the report on integrated capital adequacy

ratio.

H. Integrated Good Governance Management

As the Principal Entity, the Bank is also required to formulate the Integrated Good

Governance Guideline. The Formulation of Integrated Good Governance Guideline is

based on the Financial Service Authority Regulation number 18/POJK.03/2014

Concerning Implementation Of Integrated Good Corporate Governance For Financial

Conglomerates and prevailing conditions for each Financial Service Institution under

the Financial Conglomeration. The reason is that it is a different line of business

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performed by the Financial Service Institution under the Financial Conglomeration,

and it requires different conditions for each member of the Financial Conglomeration.

Through Decision Letter of the Board of Directors, number 0104/SK/DIR-KP/2016

dated 15 February 2016 concerning Integrated Good Governance Policy of the Financial

Conglomeration of PT. Bank Pembangunan Daerah Jawa Barat danBanten, Tbk., the

Bank has issued a policy on integrated good governance, and the Board of

Commissioners has approved it in the Letter number 010/DK/2016 dated 04 February

2016 concerning the Approval of Integrated Good Governance policy.

I. Inter-Group Transaction Policy

The Bank has policy, system and procedure of fund provisions to relevant parties and

provision of large fund which is set in the Bank’s General Credit Policy (KPB) in

accordance with the Decision Letter of the Board of Directors number 160/SK/DIR-

KOM/2015 dated 4 March 2015 concerning the Bank’s General Credit Policy, Standard

Operating Procedure of Credit for Corporation Segment. It isin accordance with the

Decision Letter of the Board of Directors number 909/SK/DIR-KOM/2014 dated 27

November 2014 as recently amended in the Decision Letter of the Board of Directors

number 157/SK/DIR-KOM/2017 dated 23 February 2017 concerning the Third

Amendment of the Decision Letter of the Board of Directors number 909/SK/DIR-

KOM/2014 dated 27 November 2014 concerning the Standard Operating Procedure of

Credit for Corporation Segment and Standard Operating Procedure of Credit for

Commercial Segment according to the Decision Letter number 910/SK/DIR-KOM/2014

dated 27 November 2014 as recently revised by the Decree Letter of the Board of

Directors number 158/SK/DIR-KOM/2017 dated 23 February 2017 concerning the

Second Amendment to the Decision Letter of the Board of Directors number

910/SK/DIR-KOM/2014 concerning Standard Operation Procedure of Credit for

Commercial Segment. The Credit granted to the related parties with large exposures

has been executed according to the principle of prudence. This is evidence among

others through the decision-making process that involves risk management function

group and business unit function group according to the provisions set in the Decision

Letter of the Board of Directors number238/SK/DIR-KOM/2015 dated 26 March 2015

concerning The Policy and Authority of Credit Committee. The Committee Meeting

decides the credit grant after approval from the Board of Commissioners (for

therelevantparty), and it is further followed up by including the Good Corporate

Governance clause in the Credit Offer Letter (SPPK).

J. Self-Assessment Report of the Integrated Good Governance of 2015.

Self-Assesment ResultIntegrated Good Governance Implementation

Ranking Ranking Definition

2

Implementation of Integrated Good Governance by the Financial

Conglomeration has been considered to be good in general. It is

reflectedin the sufficient compliance of Integrated Good Governance

principles. Any insufficient implementation of the Integrated Good

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Governance is insignificant, and it could be resolved by reasonable

actions of the Principal Entity and/or FSI.

Analyses

Based on the indicator analysis of all assessment factors in Integrated Good Governance

Implementation, conclusions can be made that:

A. The Structure of Integrated Good Governance

The values that reflect the structural strength of Integrated Good Governance in the

Financial Conglomeration are:

The Board Directors of the Principal Entity have been considered to have passed

the fit, and proper test administered by the Financial Service Authority and

meets the integrity requirements, competence, and financial reputation that are

required to be demonstrated by the Board of Directors of the Principal Entity.

The Board Commissioners of the Principal Entity have been considered to have

passed the fit, and proper test administered by the Financial Service Authority

and meets the integrity requirements, competence, and financial reputation that

are required to be demonstrated by the Board of Directors of the Principal

Entity.

The Principal Entity has established the Integrated GoodGovernance

Committee.It is chaired by the Independent Board of Commissioners and

independent party.

The Principal Entity has set up Internal Audits Work Unit. Compliance Work

Unit and Risk Management Work Unit that supports the Implementation of the

Integrated Good Governance with competent and independent Human

Resources.

The Principal Entity has issued the Integrated Good Governance Policy to be

adopted in the Financial Conglomeration.

The Principal Entity has issued the Integrated Risk Management Policy to

comply with the requirements on the availability of Policy, Procedure, and Risk

Limit Setting in the Financial Conglomeration.

The Principal Entity has set up the Standard Operating Procedure for the

Reporting of Mandatory Provisions of Integrated Minimum Capital,

methodology and Integrated Risk Profiling Weight of Intra-Group Transactions.

The Principal Entity has established an Integrated Risk Management Committee

chaired by the Director of Compliance and Risk Management of the Principal

Entity.

B. The Process of Integrated Good Governance

The values that reflect the strength of process aspect of Integrated Good Governance

in the Financial Conglomeration are:

The Board of Directors of the Principal Entity has provided the direction on the

formulation of Integrated Good Governance Guideline.

The Board of Directors of the Principal Entity has submitted the Integrated

Good Governance Guideline to the member Board of Directors of the Financial

Conglomeration.

The Board of Commissioners of the Principal Entity held the Board of

Commissioners Meetings of the Principal Entity to discuss and formulate the

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Integrated Good Governance.

The Board of Commissioners of the Principal Entity monitors the

implementation of task and responsibilities of the Principal Entity’s Board of

Directors by providing feedback against the Integrated Good Governance

Guidelines being formulated.

The Committee of the Principal Entity’s Board of Commissioners held the

Committee meeting to discuss the implementation of Integrated Good

Governance and the formulation of Integrated Good Governance.

The monitoring of compliance and implementation of risk management in the

Financial Service Institution within the Financial Conglomeration has been

performed through focus discussion group.

The implementation of Integrated Good Governance process by the Principal

Entity and Financial Service Institution is ensured by referring to the Integrated

Good Governance Guideline.

C. The Result of Integrated Good Governance

The values that reflect the aspect of thestrength of resultaspect of Integrated Good

Governance in the Financial Conglomeration are:

The Integrated Good Governance Guideline has been adapted according to the

direction of the Board of Commissioners of the Principal Entity.

The Board of Directors of the Principal Entity has developed the understanding

on the implementation of Integrated Good Governance to the members of the


The Integrated Risk Management Work Unit has developed anintegrated risk

management profile and communicated to the member of the financial

conglomeration of Bank bjb.

The Board of Directors of the Financial Conglomeration are aware of the design

of the Integrated Good Governance Guideline to implement the Integrated Good

Governance.

Bandung, 9 May 2017PT. BANK PEMBANGUNAN DAERAH JAWA BARAT DAN BANTEN, Tbk.

Signed

Agus Mulyana Director of Compliance and Risk Management

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