SEOJK on Transparency and Publication of Reports of Islamic Commercial Banks and Islamic Business Units

To:

1. The Board of Directors of Islamic Commercial Banks; and
2. The Board of Directors of Conventional Commercial Banks with Islamic Business Units
   at their respective addresses.

COPY

CIRCULAR LETTER OF THE FINANCIAL SERVICES AUTHORITY NUMBER 18/SEOJK.03/2015

REGARDING

TRANSPARENCY AND PUBLICATION OF REPORTS OF ISLAMIC COMMERCIAL BANKS AND ISLAMIC BUSINESS UNITS

In light of the implementation of the Financial Services Authority Regulation Number 6/POJK.03/2015 Regarding Transparency and Publication of Bank Reports (State Gazette of the Republic of Indonesia Year 2015 Number 74, Addition to the State Gazette of the Republic of Indonesia Number 5687), it is necessary to regulate provisions regarding the transparency and publication of reports of Islamic Commercial Banks and Islamic Business Units in this Financial Services Authority Circular as follows:

I. GENERAL

1. In accordance with Law Number 21 of 2008 Regarding Islamic Banking, Islamic Banks and Islamic Business Units are required to submit all information and explanations regarding their business to Bank Indonesia according to the procedures established by Bank Indonesia Regulation.

2. In accordance with Law Number 21 of 2011 Regarding the Financial Services Authority, as of December 31, 2013, the functions, duties, and authority for regulation and supervision of financial services activities in the banking sector have transferred from Bank Indonesia to the Financial Services Authority.

3. The Bank refers to Islamic Commercial Banks (BUS) and Islamic Business Units (UUS).

4. Publication Reports are prepared, among other things, to provide information regarding the Bank's financial position, performance or business results, other financial information, and qualitative information to various parties interested in the Bank's business development. All such information is expected to increase the transparency of the Bank's financial condition to the public and maintain public trust in the Islamic banking industry.

5. Types of Publication Reports are Monthly Publication Reports, Quarterly Publication Reports, Annual Publication Reports, and Other Publication Reports. Specifically for UUS, the types of publication reports are Quarterly Publication Reports and general information submitted in the Annual Report of the Conventional Commercial Bank with a UUS.

6. In order for the information in the submitted Publication Reports to be comparable, the format and scope of presentation refer to the provisions and guidelines established by the Financial Services Authority, relevant financial accounting standards for the Islamic banking industry, the Indonesian Sharia Banking Accounting Guidelines (PAPSI), and relevant international standards regarding Bank risk and capital disclosure.

7. The Publication Report format is a minimum standard that must be met by the Bank. If there are accounts with material amounts that are not present in the format, the Bank may present such accounts separately, while accounts with immaterial amounts may be combined with other similar accounts.

8. Accounts with zero balances in the report format must be listed by placing a dash (-) on the relevant account, unless otherwise specifically established in the Appendix.

9. The Financial Position Report (Balance Sheet) is a report of the Bank's assets, liabilities, and equity as of the end of the reporting period, while the Profit and Loss and Other Comprehensive Income Report is a report of the Bank's profit and loss and comprehensive income cumulatively from the beginning of the Fiscal Year to the end of the reporting period.

10. Publication Reports are prepared in the Indonesian language and figures are presented in millions of Rupiah.

II. MONTHLY PUBLICATION REPORTS

1. General Guidelines
   a. Monthly Publication Reports are presented by BUS individually and prepared every month. b. Monthly Publication Reports are announced to the public on the BUS Website and submitted by BUS to the Financial Services Authority online through the General Office Reporting System for Commercial Banks (LKPBU), in the event that the Financial Services Authority's reporting system is not yet available.

2. Scope of Monthly Publication Reports
   Monthly Publication Reports include at least monthly financial reports consisting of:
   a. Financial Position Report (Balance Sheet); b. Profit and Loss and Other Comprehensive Income Report; and
   c. Commitments and Contingencies Report.

3. In preparing Monthly Publication Reports, BUS refers to the Guidelines for Preparing Publication Reports of Islamic Commercial Banks and Islamic Business Units – Section I Guidelines for Preparing Monthly Publication Reports of Islamic Commercial Banks, which is an integral part of this Financial Services Authority Circular.

III. QUARTERLY PUBLICATION REPORTS

1. Islamic Commercial Banks
   a. General Guidelines

1. Financial statements in Quarterly Publication Reports are presented individually and consolidated with Child Entities, prepared for the end of positions in March, June, September, and December.
2. BUS that do not have Child Entities may omit the consolidation column.
3. Financial statements in Quarterly Publication Reports are presented in comparative form in accordance with financial accounting standards.
4. If new accounting treatments apply in the reporting position, the presentation of comparative positions refers to financial accounting standards regarding accounting policies, changes in accounting estimates, and errors.
5. The name of shareholders listed in filling the BUS owner on the Quarterly Publication Report format is an individual or entity that owns 5% (five percent) or more of BUS capital, whether through or not through the Capital Market.
6. Financial statements for the end of the December position published quarterly must be audited by a Public Accountant. In the presentation of financial statements, the name of the Public Accounting Firm, the name of the Public Accountant responsible (partner in charge), and the opinion given are stated.
7. Quarterly Publication Reports are announced in a widely circulated daily newspaper in the Indonesian language and on the BUS Website, and submitted by BUS to the Financial Services Authority online through the General Office Reporting System for Commercial Banks (LKPBU), in the event that the Financial Services Authority's reporting system is not yet available.

b. Scope of Quarterly Publication Reports
The reports presented in Quarterly Publication Reports must at least include:

1. Financial reports, consisting of:
   a) Financial Position Report (Balance Sheet); b) Profit and Loss and Other Comprehensive Income Report; and c) Commitments and Contingencies Report.
2. Financial performance information, consisting of:
   a) Calculation of Minimum Capital Requirements (KPMM); b) Quantity and quality of productive assets and Provisions for Impairment Losses (CKPN), which must at least provide grouping information:
   (1) Financial instruments;
   (2) Provision of funds to related parties;
   (3) Financing to Micro, Small, and Medium Enterprises (MSME) customers; (4) Financing requiring special attention (including restructured financing and property financing); and (5) Asset Write-off Provisions (PPA) which must be formed based on financial instruments. c) Financial ratios which must at least include:
   (1) Minimum Capital Requirements Ratio (KPMM); (2) Return on Asset (ROA); (3) Return on Equity (ROE); (4) Operating Expenses to Operating Income Ratio (BOPO); (5) Percentage of Violations and Exceedances of the Maximum Fund Disbursement Limit (BMPD); and (6) Net Foreign Exchange Position Ratio (PDN). d) Spot and Forward Transactions;
3. Shareholder composition and management structure information.
4. Profit Distribution Report.
   Specifically for June and December positions, in addition to the reports referred to in item 1), item 2), item 3), and item 4), the following reports are added:
5. Zakat Fund Source and Disbursement Report;
6. Charity Fund Source and Use Report; and
7. Change in Restricted Investment Funds Report, if any.

c. In preparing Quarterly Publication Reports, BUS refers to the Guidelines for Preparing Publication Reports of Islamic Commercial Banks and Islamic Business Units – Section II Guidelines for Preparing Quarterly Publication Reports of Islamic Commercial Banks, which is an integral part of this Financial Services Authority Circular.

d. BUS that are part of a business group add information regarding:

1. Quarterly Publication Reports for the end of positions in June and December, which include:
   a) Consolidated financial reports of the Parent Entity which include the financial reports of all entities in the business group in the financial sector; or b) Consolidated financial reports of the Parent Entity which include the financial reports of all entities in the business group in the financial and non-financial sectors.
2. Financial reports as referred to in item 1) must at least consist of:
   a) Financial Position Report (Balance Sheet); b) Profit and Loss and Other Comprehensive Income Report; c) Statement of Changes in Equity; and d) Commitments and Contingencies Report. The Statement of Changes in Equity and Commitments and Contingencies Report are only reported if they exist.
3. The Balance Sheet format and Profit and Loss and Other Comprehensive Income Report of the Parent Entity for the end of the December position are adjusted to the Balance Sheet and Profit and Loss and Other Comprehensive Income Report presented in the audited financial statements.

e. Specific reports submitted to the Financial Services Authority quarterly

1. BUS submits to the Financial Services Authority reports regarding:
   a) Transactions between BUS and Related Parties, at least including:
   (1) name of the party having a relationship or relation with BUS; (2) relationship connection with BUS; (3) type of transaction; (4) amount or nominal value of the transaction; and (5) quality of productive assets for fund provision transactions. b) Provision of funds, commitments, or other facilities that can be equated with them from every entity within the same business group as BUS to customers who have obtained funds from BUS, for BUS that is part of a business group, at least including:
   (1) customer name;
   (2) amount and quality of funds provided by BUS; (3) name of the business group providing the funds and the relationship connection with BUS; and (4) type of funds and amount of funds provided by the business group.

2. Islamic Business Units
   a. General Guidelines

1. Financial statements in Quarterly Publication Reports are presented individually, prepared for the end of positions in March, June, September, and December.
2. Financial statements in Quarterly Publication Reports are presented in comparative form in accordance with financial accounting standards.
3. If new accounting treatments apply in the reporting position, the presentation of comparative positions refers to financial accounting standards regarding accounting policies, changes in accounting estimates, and errors.
4. Quarterly Publication Reports are signed by the Director overseeing the UUS and 1 (one) member of the Sharia Supervisory Board.
5. Quarterly Publication Reports are announced in a widely circulated daily newspaper in the Indonesian language and on the Website of the Conventional Commercial Bank with a UUS, and submitted by the UUS to the Financial Services Authority online through the General Office Reporting System for Commercial Banks (LKPBU), in the event that the Financial Services Authority's reporting system is not yet available.

b. Scope of Quarterly Publication Reports
The reports presented in Quarterly Publication Reports must at least include:

1. Financial reports, consisting of:
   a) Financial Position Report (Balance Sheet); b) Profit and Loss Report; and c) Commitments and Contingencies Report;
2. Financial ratios which must at least include:
   a) Total UUS assets to total assets of the Conventional Commercial Bank with a UUS; b) Return on Asset (ROA);
3. Profit Distribution Report.
   Specifically for June and December positions, in addition to the reports referred to in item 1), item 2), and item 3), the following are added:
4. Zakat Fund Source and Disbursement Report;
5. Charity Fund Source and Use Report; and
6. Change in Restricted Investment Funds Report, if any.

c. In preparing Quarterly Publication Reports, UUS refers to the Guidelines for Preparing Publication Reports of Islamic Commercial Banks and Islamic Business Units - Section III Guidelines for Preparing Quarterly Publication Reports of Islamic Business Units, which is an integral part of this Financial Services Authority Circular.

IV. ANNUAL PUBLICATION REPORTS

1. Islamic Commercial Banks
   a. General Guidelines

1. Financial statements in Annual Publication Reports are presented individually and consolidated with Child Entities, prepared for 1 (one) Fiscal Year.
2. BUS that do not have Child Entities may omit the consolidation column.
3. Financial statements in Annual Publication Reports are presented in comparative form in accordance with financial accounting standards.
4. If new accounting treatments apply in the reporting position, the presentation of comparative positions refers to financial accounting standards regarding accounting policies, changes in accounting estimates, and errors.
5. Annual Publication Reports must be prepared in the Indonesian language. If Annual Publication Reports are made in Indonesian and other languages, whether in the same document or separately, the Annual Publication Report must contain the same information.
6. Financial statements in Annual Publication Reports must be audited by a Public Accountant. In the presentation of financial statements, the name of the Public Accounting Firm, the name of the Public Accountant responsible (partner in charge), and the opinion given are stated.
7. Annual Publication Reports are announced on the BUS Website and submitted by BUS to the Financial Services Authority.

b. Scope of Annual Publication Reports

1. General Information
   General Information in the annual report must at least include:
   a) management, which includes the composition of members of the Board of Directors, Board of Commissioners, Sharia Supervisory Board, and Executive Officials along with their positions and summary of their biographies; b) details of share ownership, namely the name of the owner or shareholder and the percentage of share ownership; c) business and business group development of BUS, which contains data regarding:
   (1) summary of important financial data, at least including net fund disbursement income, operating profit, profit before tax, net profit, earnings per share, productive assets, third-party funds, loans received, total cost of funds, own capital, number of issued and paid-up shares; and (2) performance information and financial ratios as referred to in Quarterly Publication Reports. d) strategies and policies established by BUS management; e) management report containing information regarding BUS management, at least including:
   (1) organizational structure;
   (2) main activities;
   (3) information technology;
   (4) types of products and services offered, including financing disbursement to Micro, Small, and Medium Enterprises (MSME) customers; (5) profit distribution/return realization and profit distribution calculation methods; (6) economic development and market targets; (7) work networks and business partners both domestically and/or internationally; (8) number, type, and location of offices; (9) ownership of the Board of Directors, Board of Commissioners, and shareholders in the BUS business group; (10) important changes that occurred in BUS and the BUS business group in the relevant year; (11) important matters expected to occur in the future; and (12) human resources, including number, education level, training, and human resource development.

2. Annual Financial Reports
   a) Individual financial reports, consisting of:
   (1) Financial Position Report (Balance Sheet); (2) Profit and Loss and Other Comprehensive Income Report; (3) Statement of Changes in Equity; (4) Cash Flow Report; (5) Notes to Financial Statements, including information regarding commitments and contingencies. b) Consolidated financial reports for BUS that have Child Entities, at least consisting of:
   (1) Financial Position Report (Balance Sheet); (2) Profit and Loss and Other Comprehensive Income Report; (3) Statement of Changes in Equity; and (4) Commitments and Contingencies Report. c) Financial reports for BUS that are part of a business group. (1) Banks that are part of a business group add information regarding:
   (a) Consolidated Financial Reports of the Parent Entity which include the Financial Reports of all entities in the business group in the financial sector; or (b) Consolidated Financial Reports of the Parent Entity which include the Financial Reports of all entities in the business group in the financial and non-financial sectors. (2) Financial reports as referred to in item (1), at least consist of:
   (a) Financial Position Report (Balance Sheet); (b) Profit and Loss and Other Comprehensive Income Report; (c) Statement of Changes in Equity; and (d) Commitments and Contingencies Report.

3. Financial performance information, consisting of:
   a) Calculation of Minimum Capital Requirements (KPMM); b) Quantity and quality of productive assets and Provisions for Impairment Losses (CKPN), which must at least provide grouping information:
   (1) financial instruments;
   (2) provision of funds to related parties;
   (3) financing to Micro, Small, and Medium Enterprises (MSME) customers; (4) financing requiring special attention (including restructured financing and property financing); and (5) Asset Write-off Provisions (PPA) which must be formed based on financial instruments. c) Financial ratios, at least including:
   (1) Minimum Capital Requirements Ratio (KPMM); (2) Return on Asset (ROA); (3) Return on Equity (ROE); (4) Operating Expenses to Operating Income Ratio (BOPO); (5) Percentage of Violations and Exceedances of the Maximum Fund Disbursement Limit (BMPD); and (6) Net Foreign Exchange Position Ratio (PDN). d) Spot and Forward Transactions; e) Profit Distribution Report; f) Zakat Fund Source and Disbursement Report; g) Charity Fund Source and Use Report; and h) Change in Restricted Investment Funds Report, if any.

4. Disclosure of capital and risk management practices applied by BUS, at least including descriptions of risk types, potential losses faced by BUS, and risk mitigation, as regulated in provisions regarding capital and risk management.

5. Special disclosure for BUS that are part of a business group and/or have Child Entities, at least consisting of the following information:
   a) BUS business group structure, at least consisting of:
   (1) BUS business group structure, presented starting from BUS, Child Entities, Related Companies, Parent Entities in the financial sector, and/or Parent Entities up to the ultimate controlling shareholder; (2) management connection structure within the BUS business group; and (3) shareholders acting on behalf of other shareholders (shareholders acting in concert). The definition of shareholders acting on behalf of other shareholders is an individual shareholder or entity that has a common purpose to control BUS, based on or not based on an agreement. b) Transactions between BUS and Related Parties within the BUS business group, considering the following:
   (1) transaction information with Related Parties is presented both those conducted by BUS and those conducted by every entity within the BUS business group operating in the financial sector; (2) Related Parties are parties as regulated in financial accounting standards; (3) types of transactions with Related Parties, including:
   (a) cross shareholdings;
   (b) transactions from one business group acting for the benefit of another business group; (c) short-term liquidity management within the business group; (d) provision of funds given or received by other entities in one business group; (e) exposure to majority shareholders including in the form of loans, commitments, and contingencies; and (f) purchase, sale, and/or lease of assets with other entities in a business group, including those conducted with repurchase agreements. c) Transactions with Related Parties conducted by every entity within the BUS business group operating in the financial sector; d) Provision of funds, commitments, or other facilities that can be equated with them from every entity within the same business group as BUS to customers and/or parties who have obtained funds from BUS; and e) Disclosure regarding capital, types of risks, potential losses, and risk management as referred to in item 4) on a consolidated basis.

6. Other disclosures in accordance with financial accounting standards, if not covered in items 1) to 5).

7. Opinion from the Public Accountant
   The Opinion from the Public Accountant includes, among other things, the opinion on the annual financial reports as referred to in item 2).

c. Format and filling guidelines for:

1. Financial Position Report (Balance Sheet);
2. Profit and Loss and Other Comprehensive Income Report;
3. Commitments and Contingencies Report;
4. Minimum Capital Requirements (KPMM) Calculation Report;
5. Productive Asset Quality and Other Information Report;
6. Financial Ratio Calculation Report;
7. Spot and Forward Transaction Report;
8. Profit Distribution Report;
9. Zakat Fund Source and Disbursement Report;
10. Charity Fund Source and Use Report; and
11. Change in Restricted Investment Funds Report, if any,
    follow the format and filling guidelines of Quarterly Publication Reports. BUS may make necessary adjustments to the report formats in items 1), 2), and 3) in accordance with the audit results by the Public Accountant.

d. Specific reports submitted to the Financial Services Authority annually BUS that are part of a business group and/or BUS that have Child Entities submit to the Financial Services Authority specific reports regarding:

1. Annual Report of the Parent Entity which includes all entities in the business group in the financial sector or the Annual Report of the Parent Entity which includes all entities in the business group in the financial and non-financial sectors;
2. Annual Report of Direct Shareholders who own majority shares or the annual report of the entity that exercises Direct Control over BUS; and
3. Annual Report of Child Entities.

2. Islamic Business Units
   UUS presents UUS activity information in the Annual Report of the Conventional Commercial Bank with a UUS, at least including:
   a. objectives, strategies, and management policies used in the development of UUS; b. UUS business development, namely fund disbursement and its composition, net profit, Return on Asset (ROA), Non Performing Financing (NPF), fund sources and their composition, total assets, and other relevant information;
   c. types of products and services offered;
   d. corporate social responsibility; and e. profit distribution/return realization and profit distribution calculation methods.

V. ANNOUNCEMENT AND SUBMISSION OF REPORTS

1. In the event that the Bank experiences technical disturbances or force majeure occurs at the final deadline for announcement on the BUS Website or the Website of the Conventional Commercial Bank with a UUS, the Bank submits a written notice letter accompanied by evidence and supporting documents, signed by the competent Official, and submitted on the same day as...

with the occurrence of technical disturbances to the Financial Services Authority at the address:
a. Directorate of Sharia Bank Supervision, Bank Indonesia Office Complex, Jl. M.H. Thamrin No.2 Jakarta 10350, for Banks headquartered in the working area of the Financial Services Authority Headquarters; or b. Financial Services Authority Office or relevant Regional Office for Banks headquartered outside the working area of the Financial Services Authority Headquarters.

2. For:
   a. proof of announcement of Quarterly Publication Reports in newspapers in the form of newspaper clippings or photocopies, Annual Publication Reports, and specific reports in quarterly or annual publications for BUS; b. proof of announcement of Quarterly Publication Reports in newspapers in the form of newspaper clippings or photocopies, and Annual Publication Reports for UUS; are submitted to the Financial Services Authority at the address:
   a. Directorate of Sharia Bank Supervision, Bank Indonesia Office Complex, Jl. M.H. Thamrin No.2 Jakarta 10350, for Banks headquartered in the working area of the Financial Services Authority Headquarters; or b. Financial Services Authority Office or relevant Regional Office for Banks headquartered outside the working area of the Financial Services Authority Headquarters.

VI. CLOSING

Upon the effective date of this Financial Services Authority Circular, Bank Indonesia Circular Number 7/56/DPbS dated December 9, 2005 concerning Annual Reports, Quarterly and Monthly Publication Financial Reports, and Specific Reports from Banks submitted to Bank Indonesia, as amended by Bank Indonesia Circular Number 8/11/DPbS dated March 7, 2006 concerning Amendments to Bank Indonesia Circular Number 7/56/DPbS dated December 9, 2005 concerning Annual Reports, Quarterly and Monthly Publication Financial Reports, and Specific Reports from Banks submitted to Bank Indonesia, is repealed and declared invalid.

Provisions...

The provisions in this Financial Services Authority Circular take effect on the date of establishment.
To ensure that everyone is aware, the publication of this Financial Services Authority Circular is ordered by placing it in the State Gazette of the Republic of Indonesia.

Established in Jakarta
On the date of June 8, 2015
EXECUTIVE HEAD OF BANKING SUPERVISOR
FINANCIAL SERVICES AUTHORITY,
Signed,
NELSON TAMPUBOLON

STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2015 NUMBER 49 DATE JUNE 19, 2015

A copy in accordance with the original
Director of Legal Affairs I
Legal Department,
Signed.
Signed,
Sudarmaji