R ADIRA 2019 ENG HIRESSS · 2020-03-09 · Social Responsibility Supporting Data Annual Financial...

2019201820172016201520192018201720162015

Motorcycle Car Durables & others

Managed Receivablesby Segment(IDR Trillion)

Total Assets (IDR Trillion)

Equity - Net (IDR Trillion)

8.0

4.4

20192018201720162015

5.0

5.7

7.0

35.1

27.7 27.629.5

31.5

54.8

46.4

26.2

28.1

0.4

24.1

26.7

0.5

21.4

23.3

21.3

22.8

22.8

44.4 45.2

51.3

23.5

Total New Financing (IDR Trillion)

37.9

30.5

20192018201720162015

30.932.7

38.2

Total New Financingby Segment (IDR Trillion)


Managed Receivablesby Source of Funding (IDR Trillion)

Joint-Financing Self-Financing

54.8

46.4

2019

31.5

23.3

2018

29,3

22.0

2017

27.2

18.0

2016

26.6

17.8

2015

26.0

20.4

44.4 45.2

51.3

0.3

2019

21.5

15.8

2018

20.5

16.9

2017

18.1

13.8

2016

17.2

13.0

2015

17.6

0.70.8

0.8

12.7

0.2 0.4 0.5

0.6

MANAGEMENT REPORTS 30Report of the Board of Commissioners

32

Report of the Board of Directors 40Responsibility for Annual Report 52

CORPORATE DATA 54Corporate Identity 57Adira Finance at a Glance 60Milestones 64Line of Business 66Products and Services 67ADMF Organizational Structure 68

ADVANCING CUSTOMER EXPERIENCE THROUGH IMPLEMENTING CUSTOMER CENTRIC AND DIGITAL TRANSFORMATION

1

5 Years Continuity of Annual Reports

2

The Province of Lampung 4

2019 Performance Overview 6

2019 Performance Highlights 8

Financial Highlights 10

Stock Highlights 12

Corporate Action 13

Suspension and/or Delisting 13

Information on Adira Finance Bonds and Sukuk Mudharabah

14

Event Highlights 22

Awards 26

30

Vision and Mission 702019 Business Strategic 70Corporate Culture and Value 71Meaning of Logo 72Brand and Logo 72Brand Personality 73Shareholder of Affiliates, Subsidiaries, Associates, and Joint Ventures

74

Chronology of Stock Listing 77Chronology of Other Securities Listing

81

Capital Market Supporting Professional Institutions

83

Corporate Website Information 84Management Education and Training

85

Board of Commissioners Profile 88Audit Committee Profile 94Risk Management Committee Profile

96

Nomination and Remuneration Committee Profile 98Corporate Governance Committee Profile 100Board of Directors Profile 102Sharia Supervisory Board Profile 107Corporate Secretary Profile 110Head of Internal Unit Profile 111Head of the Compliance Unit Profile

112

Senior Officer Profiles 113Testimony 140

MANAGEMENT DISCUSSION AND ANALYSIS

142

Macroeconomic and Industrial Review

146

Overview of Operations by Segment

150

Motorcycle Financing 152Car Financing 156Durable Goods Financing 160Overview of Operations by Region

162

Marketing 164Operations 170Human Resources 176Information Technology 188Financial Performance Analysis 193Other Material Information 208

54142

Material Commitments to Capital Expenditure

212

Capital Expenditure in the Last Fiscal Year

212

Commitment and Contingency 213Material Facts and Information Subsequent to Accountant’s Report Date

213

Comparison of 2019 Targets and Realization

214

2020 Outlook 214Dividend Policy 215Realization of Proceeds from Public Offering

216

Employee/ Management Share Ownership Program

216

Material Information Regarding Investment, Expansion, Divestment, Business Merger, Acquisition, and Debt/ Capital Restructuring

216

Transactions With Conflicts of Interest and Transactions with Affiliated/ Related Parties

217

Changes to Laws and Regulations with Significant Impacts to the Company

219

Changes in Accounting Policies 221Compliance in Tax Payment 222

CORPORATE GOVERNANCE 202Corporate Governance Report 228Corporate Governance Structure 231Corporate Governance Policies 231General Meeting of Shareholders (GMS)

233

Board of Commissioners 254Board of Directors 266Relationship between the Board ofCommissioners and the Board of Directors

294

Meeting of Board of Commissioners

294

Joint Meeting 296Meeting of Board of Directors 288Diversity in the Composition of the Board of Commissioners and Board of Directors

291

Performance Assessment of the Board of Commissioners and Board of Directors

292

Remuneration for the Board ofCommissioners and Board of Directors

296

Affiliated Relation between Members of the Board of Commissioners,Board of Directors, and Majority or Controlling Shareholders

300

Supporting Instrument of the Board of Commissioners

303

Secretary of the Board of Commissioners

303

Audit Committee 304Risk Management Committee 314Nomination and Remuneration Committee

319

Corporate Governance Committee 324Corporate Secretary 328Internal Audit 332Compliance Unit 337Procurement of Goods and Services

344

Public Accountant 345Dividend Policy 347Contribution to the Country 348The Company ’s Code of Ethics 350Anti Corruption Policy 354Whistleblowing System 354Information Access and Corporate Data

365

Risk Management 372Report of Sharia Governance 396

CORPORATE SOCIALRESPONSIBILITY

408

Base of Implementation 414Fair Operations 420Corporate Social Responsibility In The Implementation of Human Rights

422

Environmental Corporate Social Responsibility

424

Corporate Social Responsibility in Relation to Employment, and Occupational Health and Safety

428

Corporate Social Responsibility in Relation to Customer Responsibilities

432

Corporate Social Responsibilityin Relation to Social and Community Development

438

SUPPORTING DATA 440Operational Area 442The Company’s Business Networks 444

ANNUAL FINANCIAL STATEMENTS

460

224 408

ADVANCING CUSTOMER EXPERIENCE THROUGH IMPLEMENTING CUSTOMER CENTRIC AND DIGITAL TRANSFORMATIONIn this digital era, with the almost constant use of Internet in society, building a technology-based Customer Experience is inevitable in terms of product acquisition and retention. On the other hand, Customer Experience has become an important part of marketing strategy. To win the hearts of customers, we rely on providing the best in Customer Experience from the start. Not only do we provide all the information they may need, they can also experience first-hand a journey of using Adira Finance products and services.

The theme of ‘Advancing Customer Experience through Implementing Customer Centric and Digital Transformation’ represents our customer-oriented business and operational strategies. The digital transformation is expected to lead to improved efficiency and effectiveness in our business towards creating quality Customer Experience. The spirit of digital transformation will result in fast and responsive Customer Experience in fulfilling the needs of all our customers.

PT Adira Dinamika Multi Finance Tbk 2019 Annual Report2

5 years Continuity of Annual Reports

Stronger Fundamentals for Growth and Good Relationships

The Company managed to

momentum by considering the various demands of consumers. Adira Finance also strengthened the Company’s fundamentals through Information Technology development, implementation of GCG principles and Risk Management, and extensive training to improve the competence of its Human Resources.

The Company’s strategy also focused on improving operational

and strengthening its networks to deliver sustainable growth as well as fostering good relationships with stakeholders.

2015Navigating Challenges for Delivering Sustainable Performance

As Adira, manages challenges with a positive mindset, this has become part of the Company’s business process. Management believes that with this perspective, the Company’s business performance will be sustainable in providing

consumers, Adira employees, and other stakeholders.

2016Driving Innovation and Growth

Adira Finance is breaking through with digital innovation as a strategic move to maintain and extend the Company’s business presence

better utilizing digital technology, Adira Finance will continue its growth momentum as an

competitive company, to provide optimum and sustainable growth for shareholders.

2017

PT Adira Dinamika Multi Finance Tbk 2019 Annual Report 3

Opening

Management Report

CorporateData

ManagementDiscussionand Analysis

CorporateGovernance

CorporateSocialResponsibility

SupportingData

AnnualFinancialStatements

Chapter

01

Op

en

ing

Growing through Customer Centric & Digital Transformation

For more than 28 years, Adira Finance has continued to demonstrate its ability to survive and improve its

slowed down slightly as compared to the previous

Adira Finance has implemented various strategic steps required to achieve numerous opportunities and support its overall growth performance.

With the spirit of Growing through Customer Centric & Digital Transformation as the theme, Adira Finance provides the best service to improve our

of the Company through the implementation of digital transformation. The Company will also continue to evaluate and identify processes that can be digitized, automated and centralized, which ultimately will improve services to our customers.

With Growing through Customer Centric & Digital Transformation, Adira Finance further strengthens its commitment to always strive hard to build and maintain brand reputation for customer satisfaction

is customer centric, and is proven by providing the best quality services and the application of the latest digital transformation. The Company is increasingly strengthening its steps, providing added value to its

industry in the future.

Laporan Tahunan 2018

Growing through Customer Centric & Digital Transformation

2018ADVANCING CUSTOMER EXPERIENCE THROUGH IMPLEMENTING CUSTOMER CENTRIC AND DIGITAL TRANSFORMATION

In this digital era, with the almost constant use of Internet in society, building a technology-based Customer Experience is inevitable in terms of product acquisition and retention. On the other hand, Customer Experience has become an important part of marketing strategy. To win the hearts of customers, we rely on providing the best in Customer Experience from the start. Not only do we provide all the information they may need,

of using Adira Finance products and services.

The theme of ‘Advancing Customer Experience through Implementing Customer Centric and Digital Transformation’ represents our customer-oriented business and operational strategies. The digital transformation is expected to lead to

business towards creating quality Customer Experience. The spirit of digital transformation will result in fast and responsive Customer

customers.

2019


The Province of LAMPUNG

LAMPUNGKnown as a place of southerly winds, Lampung

is located on the southern tip of Sumatera Island.

several dormant volcanoes and beautiful scenic

has been formed from two separate towns,

were completely covered in volcanic ash. In time, however, the two towns merged into a single city


Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


Chapter

01

Op

en

ing

One of the most famous products from Lampung is woven cloth called Tapis. It is made from cotton

yarn and features decorative gold and silver embroidery. Tapis has high economic value.

Lampung has many potential tourist destinations and attractions, such as Way

Pasir Timbul, Andreas Resort Pahawang,

and the historical Krakatau Mountain.

The most famous economic commodities

from Lampung come from plantations, and

beans, cocoa beans, coconuts, and cloves.


IDR37.9New Financing

trillion

IDR11.3Revenue

trillion

IDR35.1Total Assets

trillion

29.2%

Return on Equity (ROE)

13.7%

Net Interest Margin

1.6%

NPL(Non Performing Loan)

IDR54.8Managed FinancingReceivables

trillion

IDR2.1Income for the year

trillion

IDR27.0Total Liabilities

trillion

6.3%

Return on Assets (ROA)

IDR11.3Operational Income

trillion

IDR8.1Total Equity

trillion

01Growth of national new car sales decreased by

10.5%

Growth of ADMF new car

%%

02Growth of national new motorcycle sales increased by

1.6%

Growth of ADMF new

increased by

%

2019 PerformanceOverview


Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


Chapter

01

Op

en

ing

453

2.9million

17.7thousand

The New Motorcycle Market Share

Active Consumers throughout Indonesia

Total Employees

Total Business Network

The New Cars Market Share

37.9 trillionIDR

4.4%

11.8%

New Financing

Managed Receivablesby Source of Funding (IDR trillion)


54.8

46.4

2019

31.5

23.3

2018

29.3

22.0

2017

27.2

18.0

2016

26.6

17.8

2015

26.0

20.4

44.4 45.2

51.3


2019 PerformanceHighlights

2019201820172016201520192018201720162015


Managed Receivablesby Segment(IDR Trillion)

Total Assets (IDR Trillion)

Equity - Net (IDR Trillion)

8.0

4.4

20192018201720162015

5.0

5.7

7.0

35.1

27.7 27.629.5

31.5

54.8

46.4

26.2

28.1

0.4

24.1

26.7

0.5

21.4

23.3

21.3

22.8

22.8

44.4 45.2

51.3

23.5

Total New Financing (IDR Trillion)

37.9

30.5

20192018201720162015

30.932.7

38.2

Total New Financingby Segment (IDR Trillion)


Managed Receivablesby Source of Funding (IDR Trillion)


54.8

46.4

2019

31.5

23.3

2018

29,3

22.0

2017

27.2

18.0

2016

26.6

17.8

2015

26.0

20.4

44.4 45.2

51.3

0.3

2019

21.5

15.8

2018

20.5

16.9

2017

18.1

13.8

2016

17.2

13.0

2015

17.6

0.70.8

0.8

12.7

0.2 0.4 0.5

0.6


Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


Chapter

01

Op

en

ing

3

4

2

1

1

2

3

4

New Financing

for motorcycles

for cars

durables and others

IDR37.9trillion

IDR21.5trillion

trillionIDR15.8

billionIDR625

2019

billionIDR54.8

Managed Receivables

Total Assets

Total Equity

Total Income

Return on Equity(ROE)

Active Consumers throughout Indonesia

IDR

trillion trillion trillion millionIDR35.1 IDR8.1 IDR11.3 29.2% 2.9


ATTRIBUTABLE PROFIT OR LOSS AND COMPREHENSIVE INCOME

Description(In Billion Rupiah) 2015 2016 2017 2018 2019

Parent entity 664.8Non-controlling interest - - - - -Total 664.8 1,009.4 1,409.2 1,815.3 2,108.7

COMPREHENSIVE INCOME FOR THE YEAR

Parent entityNon-controlling interest - - - - -Total 723.1 948.9 1,266.5 1,987.3 1,958.6

STATEMENT OF FINANCIAL POSITION: ASSETS, LIABILITIES, & EQUITY


ASSETS

Cash on hand and in banks

for impairment losses

for impairment losses 2,822.2

for impairment lossesInvestment in shares, related parties

Others Total Assets 27,744.2 27,643.1 29,492.9 31,496.4 35,116.8

STATEMENT OF PROFIT OR LOSS AND COMPREHENSIVE INCOME


INCOME

Murabahah marginFinance leases 264.4 44.8Others Total income 8,066.2 8,413.1 9,136.9 10,183.8 11,337.7EXPENSES

Provision for impairment lossesGeneral and administrativeRevenue sharing for mudharabah bondsMarketing and OthersTotal expenses (7,165.7) (6.697.0) (7.014.9) (7.699.2) (8,458.6)Income before income tax expense 900.5 1,716.1 2,122.0 2,484.6 2,879.1Income tax expenseIncome for the year 664.8 1,009.4 1,409.2 1,815.3 2,108.7Other comprehensive income net of tax 58.3 (60.5) (142.7) 172.0 (150.1)Total comprehensive income for the year 723.1 948.9 1,266.5 1,987.3 1,958.6

Earning per share – basic/diluted (in Rupiah) 665 1,009 1,409 1,815 2,109

FINANCIAL HIGHLIGHTS


Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


Chapter

01

Op

en

ing

RELEVANT FINANCIAL RATIOS & OTHER INFORMATION

2015 2016 2017 2018 2019

RELEVANT FINANCIAL RATIOS

Non-Performing Loans/ NPL

2.8

4.6

OTHER INFORMATION

- - - - -

in the previous yearNumber of active customer (thousand) 3,280.4 3,042.1 2,852.8 2,885.0 2,910.2

(including sharia branches)

558 523 463 440 453

Number of employees 21,351 20,087 18,854 19,098 17,677Notes:

STATEMENT OF FINANCIAL POSITION: ASSETS, LIABILITIES, & EQUITY


LIABILITIES

Mudharabah bondsOthers Total Liabilities 23,383.4 22,665.9 23,747.5 24,468.2 27,038.1

EQUITY

capital

Equity – net 4,360.8 4,977.2 5,745.4 7,028.2 8,078.8

Total Liabilities and Equity 27,744.2 27,643.1 29,492.9 31,496.4 35,116.8


In 2019, the number of PT Adira Dinamika Multi Finance Tbk shares with ticker ADMF amounted to 1,000,000,000. In terms of price, the Company’s shares traded between a low of IDR8,600 to a high of IDR11,175. The average transaction volume was 4,222 thousand of shares per month in 2019.

The number of ADMF share transactions was relatively small compared with shares of other companies, as the float was only 79 million shares. In addition, most of ADMF’s investors or shareholders were oriented towards long-term investment.

The following is a summary of ADMF’s monthly stock trading in 2019:

MonthShare Price/Sheet (IDR) Amount of Issued

Shares (Number of Shares)

Capitalzation (IDR billion)

Highest (IDR)

Lowest (IDR)

Closing (IDR)

Volume trading(Units/Share)

Value(IDR million)

Freq (X)

January 48,422FebruaryMarchAprilMay JuneJuly August SeptemberOctoberNovemberDecember

Summary of Quarterly Trade in 2015-2019:

Year QuarterShare Price/Sheet (IDR) Amount of Issued

Shares(Number of Shares)

Transaction Volume(Units)

Capitalization(IDR Billion)Highest Lowest Closing

2015

IIIIIIIV

2016

IIIIIIIV

2017

IIIIIIIV

2018

IIIIIIIV

2019

IIIIIIIV

STOCK HIGHLIGHTS


Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


Chapter

01

Op

en

ing

Throughout 2019, the Company did not conduct any corporate actions including stock splits, reverse stock, stock dividends, bonus stock, and make changes to the nominal value of the share.

CORPORATEACTION

In 2019 and 2018, Adira Finance did not experience temporary suspension of stock trading (suspension) and / or delisting of stock listing (delisting) on the Exchange.

SUSPENSION AND/OR DELISTING

ADMF Share Trading Chart for 2018 and 2019

Jan-18 Apr-18 Jul-18 Oct-18 Jan-19 Apr-19 Jul-19 Oct-190

300

200

100

400

600

700

800

90012,000

11,000

10,000

9,000

7,000

6,000

5,000

Share Price(IDR)

Daily Transactions Amount(Thousand of Shares)

Des-19


Adira Finance actively issues bonds and sukuk mudharabah on the Indonesia Stock Exchange as one of the Company’s funding sources. The following is a summary of bonds and sukuk mudharabah in circulation at the end of 2017, 2018 and 2019.

No.

Name of Bonds and

Mudharabah Bonds

Serial

Principal Amount

(IDR Billion)

Interest Rate/

Sdaysng Ratio

Time Period

Bapepam/ OJK

Date

Principal Settlement

Maturity Date

Coupon/

Sdaysng Payment (IDR

Billion)

Outstanding Principal

(IDR Billion)

Bonds Rating

Adira Finance Continuing

III

CDecember September

44 -idAAA

2. Adira Finance Continuing

DidAAA


II

C 24 October idAAA

4. Adira Finance Continuing

III

-idAAA

C 48idAAA


IV

-idAAA

C 88 88 idAAA

6. Adira Finance Continuing Sukuk Mudharabah I Phase II

(Equivalent- idAAA


Phase I

AidAAA

24idAAA

8. Adira Finance Continuing Sukuk Mudharabah II Phase I

(Equivalent6

idAAA


Phase II

668 668idAAA

C 28idAAA


Phase III

A - - idAAA

idAAA

CidAAA


Phase IV

A - idAAA

idAAAC

idAAA

INFORMATION ON ADIRA FINANCE BONDS AND SUKUK MUDHARABAH


Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


Chapter

01

Op

en

ing

No.

Name of Bonds and

Mudharabah Bonds

Serial

Principal Amount

(IDR Billion)

Interest Rate/

Sdaysng Ratio

Time Period

Bapepam/ OJK

Date


Maturity Date

Coupon/

Sdaysng Payment (IDR

Billion)


(IDR Billion)

Bonds Rating

Adira Finance Continuing Sukuk Mudharabah II Phase II

A(Equivalent

2 -idAAA

42(Equivalent

4 42idAAA

C(Equivalent

idAAA


Phase V

AidAAA

22 March idAAA

C 22 March idAAA

Adira Finance Continuing Sukuk Mudharabah II Phase III

A(Equivalent

pertahun

idAAA

(Equivalent

pertahun

22 March idAAA

C(Equivalent

22 March idAAA


Phase VI

A 4idAAA

idAAAC 68 68

idAAA


Phase I

ADecember

22 December -idAAA

-idAAA

C - idAAA

Adira Finance Continuing Sukuk Mudharabah III Phase I

A(Equivalent

December

22 December - idAAA

(Equivalent

-idAAA

C(Equivalent

-idAAA

Total of Bonds & Mudharabah Bonds as of 31 December 2017 10,480



No.Name of Bonds/

Mudaharabah Bonds

Serial

Principal Amount

(IDR Billion

Interest Rate/

Ratio

Time Period


Maturity Date


Maturity Date

Coupon/

Payment (IDR Billion)


(IDR Billion)

Bonds Rating

Adira Finance

Phase I

D - idAAA

2. Adira Finance

Phase II

C 24 October - idAAA

Adira Finance

Phase III

C idAAA

4. Adira Finance

Phase IV

C 88 88 idAAA

Adira Finance

Phase I

A - idAAA

24 idAAA

6. Adira Finance Continuing Sukuk Mudharabah II Phase I

(Equivalent to - idAAA

Adira Finance

Phase II

668 48 - idAAA

C 28 idAAA

8. Adira Finance

Phase III

idAAA

C idAAA

Adira Finance

Phase IV

idAAA

C idAAA

Adira Finance Continuing Sukuk Mudharabah II Phase II

42(Equivalent to

4 42 idAAA

C(Equivalent to

idAAA

Adira Finance

Phase V

A - idAAA

22 March idAAA

C 22 March idAAA

Adira Finance Continuing Sukuk Mudharabah II Phase III

A(Equivalent to

6 - idAAA

(Equivalent to

22 March idAAA

C(Equivalent to

22 March idAAA

Obligasi

Adira Finance Tahap VI

A - idAAA

idAAA

C 68 6 68 idAAA


Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


Chapter

01

Op

en

ing

No.Name of Bonds/

Mudaharabah Bonds

Serial

Principal Amount

(IDR Billion

Interest Rate/

Ratio

Time Period


Maturity Date


Maturity Date

Coupon/

Payment (IDR Billion)


(IDR Billion)

Bonds Rating

Adira Finance

Phase I

A 22 December - idAAA

idAAA

C idAAA

Adira Finance Continuing Sukuk Mudharabah III Phase I

A(Equivalent to

22 December 6 - idAAA

(Equivalent to

4 idAAA

C(Equivalent to

4 idAAA

Adira Finance

Phase II

A idAAA

24 months 4 idAAA

C idAAA

D idAAA

Adira Finance Continuing Sukuk Mudharabah III Phase II

A(Equivalent to

idAAA

62(Equivalent to

62 idAAA

C(Equivalent to

2 idAAA

Adira Finance

Phase III

A 26 August idAAA

24 months 2 idAAA

C idAAA

D 48 months 6 idAAA

E idAAA



NoName of Bonds/

Mudaharabah Bonds

SerialPrincipal Amount

(IDR Billion)

Interest Rate/

Ratio

Time Period

Bapepam/

Date


Maturity Date

Coupon/

Sharing Payment

(IDR Billion)


Bonds Rating

1. Adira Finance Continuing Bonds III Phase I

B 238 10.25% 60 months 25 June 2015

30 June 2020

24 238 idAAA

2. Adira Finance Continuing Bonds III Phase II

C 277 10.25% 60 months 25 June 2015

25 August 2020

28 277 idAAA

3. Adira Finance Continuing Bonds III Phase III

C 698 10.25% 60 months 25 June 2015

02 March 2021

71 698 idAAA

4. Adira Finance Continuing Bonds III Phase IV

C 431 9.25% 60 months 25 June 2015

26 July 2021 40 431 idAAA

5. Adira Finance Continuing Sukuk Mudharabah II Phase II

C 14 77.08% (Equivalent

to 9.25% per year)

60 months 25 June 2015

26 July 2021 1 14 idAAA(sy)

6. Adira Finance Continuing Bonds III Phase V

B 860 8.60% 36 months 25 June 2015

22 March 2020

74 860 idAAA

C 241 8.90% 60 months 21 241 idAAA

7. Adira Finance Continuing Sukuk Mudharabah II Phase III

B 105 71.67% (Equivalent

to 8.60% per year)

36 months 25 June 2015

22 March 2020

9 105 idAAA(sy)


to 8.90% per year)

60 months 22 March 2022

1 7 idAAA(sy)

8. Adira Finance Continuing Bonds III Phase VI

B 450 8.10% 36 months 25 June 2015

14 July 2020 36 450 idAAA

C 68 8.40% 60 months 14 July 2022 6 68 idAAA

9. Adira Finance Continuing Bonds IV Phase I

B 893 7.45% 36 months 04 December

2017

12 December

2020

67 893 idAAA

C 91 7.55% 60 months 12 December

2022

7 91 idAAA

10. Adira Finance Continuing Sukuk Mudharabah III Phase I


to 7.45% per year)

36 months 04 December

2017

12 December

2020

4 55 idAAA(sy)


to 7.55% per year)


2022

4 55 idAAA(sy)

11. Adira Finance Continuing Bonds IV Phase II


2017

21 March 2020

5 80 idAAA

C 552 7.40% 36 months 21 March 2021

41 552 idAAA

D 162 7.50% 60 months 21 March 2023

12 162 idAAA



Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


Chapter

01

Op

en

ing

NoName of Bonds/

Mudaharabah Bonds


(IDR Billion)

Interest Rate/

Ratio

Time Period

Bapepam/

Date


Maturity Date

Coupon/

Sharing Payment

(IDR Billion)


Bonds Rating

12. Adira Finance Continuing Sukuk Mudharabah III Phase II


to 7.40% per year)


2017

21 March 2021

5 62 idAAA(sy)


to 7.50% per year)


2 29 idAAA(sy)

13. Adira Finance Continuing Bonds IV Phase III


2017

16 August 2020

10 119 idAAA

C 716 8.50% 36 months 16 August 2021

61 716 idAAA

D 269 9.00% 48 months 16 August 2022

24 269 idAAA

E 461 9.25% 60 months 16 August 2023

43 461 idAAA

14. Adira Finance Continuing Bonds IV Phase IV

A 232 8.05% 370 days 04 December

2017

3 Februari 2020

14 232 idAAA

B 58 9.00% 36 months 23 January 2022

4 58 idAAA

C 328 9.50% 60 months 23 January 2024

23 328 idAAA

15. Adira Finance Continuing Sukuk Mudharabah III Phase III

A 127 67.08% (Equivalent

to 8.05% per year)

370 days 04 December

2017

3 Februari 2020

8 127 idAAA(sy)


to 9.00% per year)

36 months 23 January 2022

4 55 idAAA(sy)


to 9.50% per year)


2 32 idAAA(sy)

16. Adira Finance Continuing Bonds IV Phase V

A 1.105 7.75% 370 days 04 December

2017

26 April 2020

43 1,105 idAAA

B 287 8.60% 36 months 16 April 2022

12 287 idAAA

C 608 9.15% 60 months 16 April 2024

28 608 idAAA

17. Sukuk Mudharabah Berkelanjutan III Adira Finance Tahap IV

A 72 64.58% (Equivalent

to 7.75% per year)

370 days 04 December

2017

26 April 2020

3 72 idAAA(sy)


to 8.60% per year)

36 months 16 April 2022

0 10 idAAA(sy)


to 9.15% per year)


1 14 idAAA(sy)

18. Adira Finance Continuing Bonds IV Phase VI

A 299 6.75% 370 days 04 December

2017

14 October 2020

- 299 idAAA

B 703 7.80% 36 months 4 October 2022

- 703 idAAA

C 190 8.10% 60 months 4 October 2024

- 190 idAAA



Adira Finance Continuing Bonds IV Phase IV Year 2019On 23 January 2019, the Company listed the Adira Finance Continuing Bonds IV Phase IV Year 2019 on the IDX amounting to IDR618 billion, divided into 3 series, A, B, and C.

These bonds were offered at 100.00% (one hundred percent) value of the principal bond amount. Coupons on the bonds are payable quarterly in accordance with bond interest payment date schedule. The first bond interest payment of the respective series was on 23 April 2019, while the last bond interest payment falls on bond maturity date on 03 February 2020 for Series A, 23 January 2022 for Series B, and 23 January 2024 for series C, which is the settlement date for the principal of the respective bonds series.

III Phase III Year 2019On 23 January 2019, the Company listed the Adira Finance Continuing Sukuk Mudharabah III Phase III Year 2019 on the IDX amounting to IDR214 billion, divided into 3 series, A, B, and C.

These mudharabah bonds were offered at 100.00% (one hundred percent) value of the principal amount of mudharabah bonds. Revenue sharing from mudharabah bonds are payable quarterly in accordance with the mudharabah bonds revenue sharing payment date. The first mudharabah bond revenue sharing payment date of the respective series was on 23 April 2019, while the last mudharabah bond revenue sharing payment date falls on the mudharabah bond maturity date on 3 February 2020 for Series A, 23 January 2022 for Series B and 23 January 2024 for Series C, which is also the mudharabah bond fund repayment date for the respective mudharabah bond series.

Adira Finance Continuing Bonds IV Phase V Year 2019On 19 April 2019, the Company listed the Adira Finance Continuing Bonds IV Phase V Year 2019 on the IDX amounting to IDR2,000 billion, divided into 3 series, A, B, and C.

These bonds were offered at 100.00% (one hundred percent) value of the principal bond amount. Coupons on the bonds are payable quarterly in accordance with bond interest payment date schedule. The first bond interest payment of the respective series was on 16 July 2019, while the last bond interest payment falls on bond maturity date on 26 April 2020 for Series A, 16 April 2022 for Series B, and 16 April 2024 for series C, which is the settlement date for the principal of the respective bonds series.

III Phase IV Year 2019On 19 April 2019, the Company listed the Adira Finance Continuing Sukuk Mudharabah III Phase IV Year 2019 on the IDX amounting to IDR96 billion, divided into 3 series, A, B, and C.

These mudharabah bonds were offered at 100.00% (one hundred percent) value of the principal amount of mudharabah bonds. Revenue sharing from mudharabah bonds are payable quarterly in accordance with the mudharabah bonds revenue sharing payment date. The first mudharabah bond revenue sharing payment date of the respective series was on 16 July 2019, while the last mudharabah bond revenue sharing payment date falls on the mudharabah bond maturity date on 26 April 2020 for Series A, 16 April March 2022 for Series B and 16 April 2024 for Series C, which is also the mudharabah bond fund repayment date for the respective mudharabah bond series.



Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


Chapter

01

Op

en

ing

Adira Finance Continuing Bonds IV Phase VI Year 2019On 04 October 2019, the Company listed the Adira Finance Continuing Bonds IV Phase VI Year 2019 on the IDX amounting to IDR1,192 billion, divided into 3 series, A, B, and C.

These bonds were offered at 100.00% (one hundred percent) value of the principal bond amount. Coupons on the bonds are payable quarterly in accordance with bond interest payment date schedule. The first bond interest payment of the respective series was on 4 January 2020, while the last bond interest payment falls on bond maturity date on 14 October 2020 for Series A, 04 October 2022 for Series B, and 04 October 2024 for series C, which is the settlement date for the principal of the respective bonds series.


EVENT HIGHLIGHTS

30April

Telecenter is one of Adira Finance’s channels. The inauguration was attended by the President Director of Adira

09January

12

Gathering with all used car dealers nationally and presenting awards to dealers who have contributed to Adira Finance.

Adira Finance’s AGM event aiming to determine the direction of the company’s policies and strategic measures in decision making for mutual sustainability. Followed by a public expose, namely exposure in front of the media.

31January

29March

Adira Finance signed a syndicated loan facility agreement of USD350 million in Singapore.

Adira Finance granted appreciation to all sponsors & partners involved in the implementation of the 2018 Pesona Lokal Festival. This was performed to maintain good relations with the said parties.

April

03May

Adira Finance launched the #BebaasKlik program to purchase used cars on the momobil.id online platform. The #BebaasKlik program aims to provide favorable facilities and promos to potential consumers wishing to purchase quality used cars.


Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


Chapter

01

Op

en

ing

Adira Finance signed a cooperation agreement

for the community that have a Kebab Baba

February- August

Adira Finance drew the Harcilnas program, attended by the Indonesian Ministry

Notary Public, and the Police. 14

March

26April

Adira Finance granted appreciation to all sponsors & partners involved in the implementation of the 2018 Pesona Lokal Festival. This was performed to maintain good relations with the said parties.

Adira Finance signed a cooperation agreement with Electronic City.08

August


Event Highlights

Agustus- November

14Oktober

15November

Extraordinary General Meeting of Shareholders aimed at deciding the replacement of Adira Finance’s president commissioner.

Adira Finance held a press conference to commemorate Adira Finance’s 29th birthday, which was attended by media partners and bloggers, as well as Adira Finance’s President

Pesona Lokal Festival was a CSR program held in conjunction with Adira Finance’s 29th anniversary. The program consisted of Cultural Carnival, Local Traditional Contemporary Dance Contest, Local Motif Painting Competition, People’s Market and entertainment stage.


Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


Chapter

01

Op

en

ing

03November

To commemorate its 29th anniversary, Adira Finance introduced Festival Pasar Rakyat (People’s Market Festival/ FPR,) which is a CSR program of Sahabat Lokal Adira Finance in collaboration with the Danamon Peduli Foundation.

In commemoration of National Customer Day, the board of directors of Adira Finance served customers in the Tebet branch. During this activity, Ms. Swandajani Gunadi met and directly served the attending customers.

04September


AWARDS

25July

2019 Obsession Award in the Best CEO category.

2019 SWA Best Wealth Creator in the The Best Public Companies Based on WAI (overall) category and in the 2019

Financials category.

25January

10April

2019 Millennial’s Top Brand Award in the Millennial’s Choice in the Vehicle Financing Product Category and Millennial’s Choice in the Electronic & Furniture Loans Category.

2019 Indonesia HR Excellence Award in the Learning and Development Strategy, HR Transformation, and HR Technology category.

06March

15March

2019 Indonesia HR Excellence Award in the Learning and Development Strategy, HR Transformation, and HR Technology category.

2019 Warta Ekonomi Indonesia Corporate Award as the Top 3 Most Popular Financing Company

26July


Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


Chapter

01

Op

en

ing

Top Leader Award in the Best Leader with Digitalization Program category.

Indonesia Good Corporate Governance Award as the Best Indonesia GCG in the

category

09July

13March

2019 iCIO Awards in the Most Inspiring CEO category.

14March

23August

16May

2019 Infobank Digital Brand Award in the

Company with Assets Over IDR10 Trillion category.

2019 Service Quality Award in the Automotive Financing category.

31July

2019 SWA Indonesia Original Brand as the 2019 Top 250 Indonesia Original Brands in the Car Financing Category.


Awards

11December11

December

25October

2019 Stellar Workplace Award in Employee Commitment and Employee Satisfaction.

2019 Top 20 Financial Institutions in

– Assets > 10 Trillion category.

2019 Most Admired CEO in the Excellent Leadership for

category.

2019 Best of the Best from Forbes Indonesia as the Best of the Best 50 High Performing Public Listed Companies.

30Oktober

11October

2019 Indonesia

VII in the category of 1st Indonesia

Company – Public Company with >10 T in Assets Category.


Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


Chapter

01

Op

en

ing

14October

2019 Millennial’s Choice Financial Award as Millennial’s Best Brand in Service Quality and Millennial’s Best Brand in Brand Awareness.

IICD CG Conference & Award as the Top 50 BigCap Issuers – The Best Disclosure & Transparency.

Indonesia PR of The Year 2019 dengan kategori Best of The Best Corporate Communication Team of The Year 2019.

12December

05December


MANAGEMENT REPORT

02

ContentsReport of The Board of Commissioners 32Report of The Board of Directors 40Responsibility for Annual Report 52


Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


02

Man

ag

em

en

t R

ep

ort

Chapter

Bukit RanduAt an altitude of 200 meters above sea level, Bukit Randu presents a stunning city landscape of Bandar Lampung. In the north, there is the blue bay, while to the west there is the beautiful green expanse of the Bukit Barisan mountain range.


BOARD OF COMMISSIONERS BELIEVES THAT ADIRA FINANCE HAS TAKEN THE RIGHT STEPS TO FACE THE CHALLENGES AHEAD BY PRUDENTLY SAFEGUARDING THE COMPANY’S RISK EXPOSURE, CONTINUING TO FOCUS ON CUSTOMER-CENTRICITY, EXCELLENT CREDIT RATINGS AND RIGOROUS COMPLIANCE PRACTICES.

R espected Shareholders,It is an honour to address you on behalf of the Board of Commissioners of Adira Finance. At this opportunity, I would like to briefly review the performance of

the Company during 2019, as well as the performance of the Management and the Company’s plans going forward in the context of its long-term strategy as well as market dynamics.

ECONOMIC AND INDUSTRY OVERVIEW IN 2019 In 2019, a number of factors acted as brakes on the growth of the Indonesian economy. Externally, global tensions, in particular the impact of the trade war between China and the United States, created a drag on export growth including commodities, which is a major contributor to the Indonesian economy, especially outside of Java. Domestically, the first half of the year saw many business and investment decisions put on hold pending the outcome of the Presidential elections.

Despite these issues, macro-economic fundamentals remained generally sound. Inflation remained under control at 2.7% y/y and currency exchange rates stabilized and even strengthened towards the end of the year, while Bank Indonesia’s benchmark interest rate (7 Day Reverse Repo Rate) decreased to 5 percent after 4 aggressive cuts during the year. Unfortunately, notwithstanding this relative stability, in the second half of the year both businesses and consumers continued to delay spending under the shadow of domestic and global tensions.

Reflecting this hesitance to spend, new vehicle sales of both cars and motorcycles were pressured in 2019, creating challenges on all industry players especially as liquidity tightened in the market. New motorcycle sales grew by 1.6% and new car sales dropped by 10.5% y/y, compared with growth of 8.4% and 6.6% respectively in 2018.

THE BOARD OF COMMISSIONERS

Report of


Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


02

Man

ag

em

en

t R

ep

ort

Chapter

Yasushi ItagakiPresident Commissioner


PERFORMANCE OF ADIRA FINANCE AND THE BOARD OF DIRECTORS Adira Finance achieved solid performance in this challenging market, sustaining its overall market share of 11.8% in new motorcycles and 4.4% in new cars as well as strong profitability. All indicators continued to reflect the sound financial structure of the business with ROAA and ROEA amounting to 6.3% and 29.2% respectively in 2019. The gearing ratio also held steady at 2.8x in 2019 vs. 3.1x in 2018, comfortably within the regulatory limit of 10x.

The Board of Commissioners was pleased to see concrete progress in terms of the Company’s digital transformation to advance customer experience, as part of its plan to overhaul the Company into a digital-minded organization which comprehensively touches on all aspects of the organization.

Adira Finance’s new bookings were relatively flat with a slight decrease of 1% y/y to IDR37.9 trillion in 2019, as total motorcycles new bookings growth of 6% was offset by a 7% y/y decline in car sales during 2019.

Overall, although new booking growth was relatively restrained, Adira Finance was able to achieve a 16.2% y/y increase in profit to IDR2.1 trillion, indicating that the management was able to successfully achieve robust profitability growth. The management was also able to grow its managed receivables by 7% to IDR54.8 trillion, a solid achievement amid this market condition.

Throughout the year, the management continued to revamp the business by making use of digital technology towards increased efficiency, automation and service quality. At the same time, business processes were also streamlined and simplified so as to move more nimbly in an increasingly competitive industry. By doing so, the Company will be able to process applications and information faster, and free up its resources to focus on higher value areas such as customer retention.

We also agree with the management’s actions to build digital channels as a way to connect directly with customers and potential customers. Besides building out Adira Finance’s brand in the digital space, these customer-focused initiatives creatively work to deliver increased convenience to customers with mobile apps that enable them to self manage their accounts, as well appealing to a wider range of customers for example by bundling financing products together with vehicle sales on the Company’s www.momotor.id and www.momobil.id digital vehicle sales platforms. All of these achievements showed progress in advancing customer experience by implementing digital, customer-centric transformation.

Report of Board of Commissioners


Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


02

Man

ag

em

en

t R

ep

ort

Chapter

BUSINESS PROSPECTSBroadly speaking, the growth of the Company will be greatly influenced by how the Indonesian economy fares in 2020. Continuing trade tensions between the United States and China continue to contribute to the climate of uncertainty. In addition, experts forecast that weak commodity prices may drag Indonesian GDP to a stagnant growth of around 5 percent in 2020, however Indonesia’s fundamentals remain solid and the country still has strong prospects for long term growth.

On the positive side, a short-term market contraction of this type, together with the more cautious credit disbursement in the market, could potentially benefit Adira Finance thanks to its strong position and good access to funding. Under these circumstances, companies with good liquidity have opportunities to strengthen their position and win more customers.

In doing so, Adira Finance is supported by its relationship with Bank Danamon as the parent company and a member of Mitsubishi UFJ Financial Group (MUFG). Notably, in early 2019 the Company obtained an international credit rating of Baa2 and BBB (investment grade), equivalent to Indonesia’s sovereign rating from Moody’s and Fitch respectively, which enabled it to tap global capital markets and gave it a strong advantage compared to peers.

Overall, the Board of Commissioners believes that the Board of Directors has taken the right steps to face the challenges ahead by prudently safeguarding the Company’s risk exposure, continuing to focus on customer-centricity for long-term growth, diversifying the Company’s product offerings, and maintaining its excellent credit ratings, supported by rigorous compliance practices. As such, the Board of Commissioners considers Adira Finance to have good long term prospects despite the current challenges.

GOOD CORPORATE GOVERNANCE The Company is committed to continuously ensuring the implementation of good corporate governance (GCG) principles within the organization, inline with the belief that GCG adds concrete value for shareholders.

Overall, Board of Commissioners believes that the management has done an excellent job in terms of maintaining the Company’s existing Good Corporate Governance (GCG) practices. Compared with competitors, our bank-standard risk and compliance practices put us ahead of the industry average, and we are determined to maintain them as part of Adira Finance’s commitment to excellence. The Company’s ASEAN Corporate Governance Scorecard from the Indonesian Institute for Corporate Directorship (IICD), an independent third party, categorized the Company’s practices as “Good” for 2019, providing further confirmation of the quality of the Company’s GCG practices.

Furthermore, the Company has put in place a whistleblowing system that allows stakeholders of Adira Finance, independent parties, and third parties to submit reports related to Good Corporate Governance principles.

During the year, the Board of Commissioners was assisted in its supervisory duties by four committees, namely the Risk Management Committee, the Audit Committee, the Nomination and Remuneration Committee, and the Governance Committee, each of which carried out a number of important tasks.


RISK MANAGEMENT COMMITTEE The Risk Management Committee actively provided input relating to potential risks associated with the activities of financing, operations, credit risk as well as the latest market developments. This includes any new policies enacted by regulators that could have an impact on the Company’s business activities.

AUDIT COMMITTEE The Audit Committee monitored and evaluated the planning and implementation of the Company’s internal audit findings, as well as follow on reports. The Audit Committee also discussed and assessed the Company’s financial reports, with any important findings passed on to the Board of Commissioners for further consideration.

NOMINATION AND REMUNERATION COMMITTEE The Nomination and Remuneration Committee fulfilled its function of nominating candidates for the Company’s Board of Commissioners. This includes setting member criteria and competencies required for the Board of Commissioners. In addition, the committee issued recommendations on the remuneration packages for the Board of Commissioners and Board of Directors.

GOVERNANCE COMMITTEE The Governance Committee continuously carried out reviews and evaluations on the Company’s frameworks and policies as related to Corporate Governance practices. In addition, the Committee also monitored the implementation of GCG principles within the Company’s business activities.

CORPORATE SOCIAL RESPONSIBILITY As a leader in the industry with a widespread nationwide network, Adira Finance continued to execute various social responsibility programs that aimed to empower local communities inline with the Company’s fundamental concept of “Creating Shared Value”. Among others was the Festival Pesona Lokal (FPL), a movement supported by the Ministry of Tourism and Creative Economy to highlight domestic tourism in 7 Indonesian cities.

These activities, which aimed to boost local economies at the grassroots level, were supplemented by various natural disaster aid initiatives through the year as a reflection of Adira Finance’s concern for local communities, which are an inseparable part of our growth.

Report of Board of Commissioners

PPPPT APT APTPT APT APPPTPPT AT AT ATT AT AT AT ATTTTPTT AAT AAAAPT AAAAAAT AAAT AAAAAAT APPT APT APPPPT APPT APTPT ATTT AT APT APT APTT ATPTTPT APT APT AAAAAAAAAAT APT AAAAPTPPPPT APT APT APTPPT ATTTTTT APTPTTPT APTT AAAAAPT AAAAT AAAAAAPPPPPT APT APPTPT AT AT AT ATTT ATTTT ATT AT APT AAAAAAAPT AAAPT APT APT APPPPPPT APPPPPT ATT AT ATT AT ATTPTT ATTPTPT AT AAAAT AAAAAAT APPPPPPT APPPPT AT AT AT AT ATTTT ATPT ATT AAAAAAPT AAAAAAAAPPPPTPPPT APTTTTTTTT ATTTT APT AAPT AAAPT AAAT AAAPPPPTPPTTTTTTT AT AAAAPT AT APT AAAAAPTTTTTTTT ATT APT AAPT AAAAAAAPPPTPPT APTTTTTPTTT AT AAAAAAAAPPPPPPPT ATPTTT APT AAAT AAAAAT APPPPPPTTTT AAAAPPPPTPPPPTTTTTTTTPTT AAAAAPPPPPPPTTTTTT AAAAPPPPPTTTTTPT AAAAT AT APPPPPPTTTTTTT AAAAAAAT APPPPPPPTTTTTT AAAAAAAPPPTTTTTT AAPPPPTTTTTT AAAdddiradirdiradddiradddiradiradiraddiradiradidirairdiradiradiradirirradiradiraradiradirairadirairadiraddidiradiradiradiraddiraddididiidirariradiradiraraadiddddiradddiradiidiiradirradiraraddiradddiddiraddiirdirarridiraradiradiddiradddiraddirdiraradidiradiddddddiraiiirrrrrrrrdiradirairaaaaaddiradddiraddddiirrdirdirrradiraraaradiraddddddddirirararrdirraraaddddiraddddiirararrrrrrradiraaaaaddddiirrrrrairaaddirddddddiraaaadiraaddddddd rrrrraaaadddddddddiiirrraaaaaddddddddirrrraaadiraddddddididdiraiiiirrrraaaaddddiirrraaaadiraaaradddddiirrraaaaaaaaaddddddddii aaaaaaaaaaddddddddiirrraaaaaaa DDinDDiDinDDinDinDinDinDDDDDDiiniiinDinnnDinDiiDinDDiDDDDinDiDDDDDiiiinDininDininDinDinDDinDDDinDDDDDDininiinDinnnnDinDDDDiDinDDDDDDinDDiiinDinDinDinDDinDDDDinDinDDDinDDininiDinnDinDDinDDDDinDDiiinnnnnnDDDDDDDDDinDinDinDDiniininnnnnnDDiDDDiDDDiDDinDiniiiinnnnnnnnDinDDDDDiDDiDiDDiiniinnnnnnnnDDinDDiDDDDDDDDininiinnnnnnnnnDinDDiDDDDDinDDinnnnnnnnnnDinDDDDDDDDDDDDinnnnnnnnDDDDDDDDDDDDDininnDinnDinnnnDDDDDDDDDDiinnnnnnDDDDDDDDDinnnnnnDiDDDDDDDDDiinnnnDDDDDDDDDDDinnnDinDinDDDDDDDinnnnnDDDDDDDDD nnnnnamikamikamikamikamikamiamikamikmikammmimikamikmmikmikmikimiamimimikmikkamikikkikkmikkkikamikamiaamikamikamikamikamikmikamikmiammmikmikmikmiiiimimikkkamikkmikkkmikkmikkamikamikamikamikaamamamikmammikammikmmikiiiiamikkmikamikkkkkkamamikaamikmikmikmikmmmiamiimikkamikkkkamikamikamamimmikmikmikmimiamiiimikmikikkamikaaamamikaamikaaammmmmmmikmmmmammmiiiiamikkmikkkkmikaaaaaamikmmmmmikmmmmammmammmiamiamikmikkikkkkaamaaaammmmmmmmmmmmmmmmiiamikikkkkkkamikaamaaamamikammmmmmmmmmmamimimiiamikamikamikkaaamaaaamimmmmmmmmmmmmmmmammamiiikkkikkamaamamaamaaammimmmikmmammammmimikikkmikkkamamaamamammmmmmmmmmmmmikkkkkkaaaaammmmmmmmmmmmmikkkkkkkkkaaaammammammmmmmmmmmam kkkkkikkaaaamammmmmmmmmiiikkkkkkkaaaaaaammmmmimimmmmamikkkkkkkkkaaaaaaaammmmmmmm kkaaaaaaammmmm kkkkkaaammmmmiika Mua Ma Muaa Mua Mua Mua MuMMMMa MMMMMMMMuMuMuMMMuMMuMMua MuMMua Ma Muaa Mua Mua MuMMMMMMMMMMMMMMMMuMMuMMa Muua MuMua Ma Ma Maaaa Muaaa MuMMaa MMMMMuMa MMMMMMuMMMMua MuMuMua Mua Maaa MMMMMMa MMMuMMMMMMMMMuMua Mua Maa MMMMa MMMa Ma Ma MMa MMMMa MMuaaaaaaaaaa MMMuMMuMMMMMMMMMMMMMuMuuuaaaaaaa MuMMuMMMMMMMMMMMMMMMMuMuuMuuuuuuaaa Maaaa MMMMMMMMMMMa MMMMuMuuMuua Muuuaaaaaaaaa MMMMMMMMMMMa MMMMuMa MuuuMua Muaaaaaa Muaa Maa MMMMMMMMMMMMMMMMMMa MMua MuuuMuMuua aaaa MMMMMMMMa MMMMuMMuMMuMuuua MuuuMuuuaaaaaa Mua MuMMMMMMMMMuMMMuuuuuaa a Maaaaaa MMMMMMMMMMMMMMa MMua Muuuuuaaaa MMMMMMMMMMMa MMa MMuuuuuaaaaaaa MMMMMMMMMMMMuuuaaaaaa MuMMMMMMMMMMMMuuuuuuaaaaaaaaaaaa MMMMMMMMMMMMMuuuuMuuaaaaaaaa MMMMMMMMMMMMuuuaaaaaaa MMMMMMMMuuuuuulltltiiiitiltllttilttittiiiltttttttttiiittttttttiiiilttttttttiilltltttttttttiiiiillltttttttttiitilltttttttiiilllttttttttitiiillltttttttttiiilltlttttttttiiiilltlttttttttiiitillttttttlttttiillttttttiiitiilltttiiiilltttlttiiiiiiiltttiiii FFiFFFinaFinaFinFiFFFFFFinaFinaiiinFinFinanFinFinnininnFinanaFinaFinanainaFinaFinaFinFinaFiFFFinFinaFFFFFFinaiiiiFiFinFinnFinFinaFininFinaFinaFinaFinaFinaFFinaFFFFinaiiinanFinFinnanininaFiinainaFinaFFFFFinFFFFFFinaFinaiFinaiFiiinninFinaFinanaFFFinFinaFFFFFinaFFFinaFinaFiiFinanaaFinainaaaFinaFinFFFFinaFiFiinaFinFinanFinnnnnaaaaaaanaFinaFinaFFFinainiinainannninninaaaFinaaaaFFFFFinFinaFinnanannnninaFinaanaaaaaFFFFinFFFFinaFinnnFinnnaaaaaFinaaFinaFinaFFFFFFinaFinaaaFinaaFinaaaaaaFinaFFFiniinanFinannaaaanaaaaaaaaFFFFinaFFFFininiinannaaaanaaaaaaaFinaFinaFFFiiiininnnaaaaaaaFinaFFFFFFiinnnnnnaaaaaaaFFFFiinnnnnaaaaaaaaaFFFFFFFinnnnaaaaaanaFFFFiinnnnnaaaaaFinainnaaaaFFFinnnaaaaancencncennnncencencncnccecncencenceccncecencecccenceececeeeeeeencencnnnncennncececce cccnccceeeceeeeenceeencncnnnnnncenceccecccceeeeeeeeeeencennnncncenccecccecceeeceeeeeceence nncennnnnnce ncececcccnceeeeececennnnnnnnncceccncccce e eeeenceecennnnnnnnnccnccccceeennnnnnnceccccccceceeennnnnnnnncececcecccceeeeennnnnnnnnceccccccceeeceennnnnnnccccecceeeennnnnnnnnnncccceeeeeeeennnnnnncecccccccce eeeccccccceeee TbTTTTbkTbTTTTbTTTTbbbbbbbkbkbbTbbkkbkbkTbkkkkkkkTbk TbkTTTbTTbTbkTTTTbTbTTbkTbkbTbkbbTbkbTbTbTbbTbkkkkbkkkkkkkTbTTTbTTbkTbTTTbkTbkTTTbkbkbTbTbbkTbkTbkbbkTbkbbkTbkkTbkkTbkkkkkkkTbkTbkTbTbTbkTTTTTTbkTbTbkbbTbbkbbkkkTbkkkkbkTTbkTbkTbTTTTTTTbbTbTbbkbTbbbTbTbkbkbkTbkkbkkkTTbkTTTTTTTbbbkbTbbTbbkkkTbkkkkkTTTTTTTTTTbkbkbbbbbbbkTbkkkkkkbkkTTbkTTTTbbbbbbbkkkbkbkkkTbkTbTTTTbbbkbbkTbkbTbbbbbkkbkkbkkkkTTbkTTbTbTTTTbbbTbTbbbkkkkkTbkTbkTTTTTbkTTTbbbkkkkkTbkTTTTTbkbbTbkkkkkbkTTTTTTTbbbbkkkkkkkkkkTTbkTTTbbTbbbbbkkkkkkkkkkTTbkTTbbbbkkkkkkkkkTTbkTbTTTTTTTbTbbbbbbbkkkkkkkkkkTTTTTTbTTTTTbbbbbbkbkkkkkkkTTTTTTTTTbbbbbbbbkkkTTTTTTTbkTTTbbbbbbkkkkkkk 2019201920192019199192019992220199201920192202202222222222000020000011111912011920120120192019999019999201920192222222220120120101000019019200190001920191191120112019920119999920191920122022222200020192019120191112011101201999201999922222222022001000001900001011112019019201901920199920199201920192220222202220201900190000190011011110119990199992222019222220200000190000191011911999999901920192220120220201900019000019020191112011019201999990199222222019019000000000111111201992019999901920192222201900201900000000111201119999199920192019222200000019001901011111199922200019000001111119019992220220190000000111111199999999201922012000019020201119199999199222220192200000011192019999222220120019000000001111999999922200000001999992222200000001199999992222200000000000 99999 AAAAAAnAAAAnAAnAAAnAnnAnnAnnnnAnnnnnAnnAnnAnnAnnAnnAAnnAAAnAAAnAAAAAnAnnAnnnnnnnnnnnAnnAnnAnnAnnnnAAnnAnnAAAAAAnAAAAAAAnnnnAnnnnnnnnnnnAnnnnAnnAnnAnnAnnAnAnAnAAnAnAAAAnnAnnAAnnnnnAnnnnnAnnAnnAAAnAAAnnAAAAAAAnnAnAnnnAnAnnAnnnAnnnnAnnAnnAnnAAAAAAAAAAAAAnAnnnnnnnAnnnAnnnnnnnnnnAnnAAnAAAAAAAAAAAnnnnnnnnnnnnnnnnnnnnnnnAAAAAnAnAAAAAAnAAAnnAnAnnnnnnnnnnnnnnnnnnAnnnnnnAAAAAAAnAAAAAAnnAnnnnnnnnnnnnnnAnnnnAnnAAAAAAAAAnnAnAAnnnnnnnnnnnnnAAnnAAAAAAAnAAnAnnnnnnnnnnnnAAAAAAnnAAnnnnnnnnnnnnnnnAAAAAAAnAAAAnnnnnnnnnnnnAnnAAAnnAAAAAnnAnnnnnnnnnnnnnnnnnnnnAnnnnAAAAAAAAAAAnnnnnnnnnnnnnAnnnnnnAAAAAAAAnnnnAnnnnnnnnnAAAAAAAAAAnnnnnnnnnnnAAAnAAnnAAnnnnnnnnAAAAAAAAAnnnnnnnnnnAnnuauaualuaualllluauuuaualuauallluauaualuauaualluuauauauaaaluallluaualuuauuuaaualluauuaalaaaualalaaauaalualluuauauuualuuuuuuaaaaaaaaualuuuuuuuauuaaaaaallaluuuuuuuuaauaaaaaluuuuuuuuuaaaauaauaaaualluuauuuuuuuaaaaauauaualuauuuuuuuuuuaauaaaaaaualuuuuuuuuuaaaauaaalluuuuuuuaaualauaaaualaluuuuuuuuuaaaaauauaalluuuuuuuuuaaaaauaalualuuuuuuuaaaaaauuuuuaaauaaaluuuuuaaalaaa RepRRRRRRRRepoRepRRRRepoRepoRepoRepoepepRepoepoepoepoReReRepRepoRepoRepoRepoeppopopoRepoppopoepoepoRepoRepooRepopoRepoRRepRepoRRRepRRepoRRepoRepoepoepoepoRepoRepoepRepRepopopepoepooRepoRepoRepoRepRReRRRepoRepoRRepReRRRepoRReepoepepopepRepppoeppopRepoepoRepoRepopoRepoRRepoRRepoRRRRepRepRepReepoRepoReppoppoepRepoRRRepRRRRRepoReRRepRRepoeepepRepoepoepRepRepRepoRepoRepoRepoepoepoRReRRRRReRepoRRRRepoRepoeeeeeReeRepepoepRepooooopooRRepRepoRRRRepRRReeeeepeReRepRepopoReppoepppRepooepooooRepoRRepoRRRRRRepoReRReeeeeeppppooRepooooRepoRRepRRRRepRRRRRReepoepepRepoepeppopopoRepoepoooRepoRRRRepoRRepoeeeeeeppopppopepoooepoRRRepRRRRRRReeeeeeeReReppppppppooooepoRepoooRRRRRRepoRRReeReeeeeeeReppppppepooopooepoRRRRRRRReeReeeeeepppRepppppooooReRRRRRReeeeeeeeeeppppRepoopooRepoooRRRRRReeeeeeReeeppppoooRepoRRRepRRRReeReReReeReppppppoooooooRepoRRRRRRRRRRRReeeReeeeppppReppppooooooooRepRepRRRRRReeeeeReeeeeppppppppReppoooooRRRRRRReeeeeReeeepReppppppopooopppppppppppppppppppppp rtrttrttttrttttttrtrrtrttttttrtrtrtttttrttrtrrrrrrtttttrrrrrrrttttttttrtrrrrrrttttttttrtrrrrrrttttttttrrtrrrrrttttttrrrtrtrtrrrrtttttttrrtrtrrrrtrttttrrrtttttttrrrrtttttrrrrrrrtrttttttrrrrrtttttrrrrttttttrrrrrrrtttttttttt33663363333636336366333666333363333636336336363666363666636666636333636333636363663636663363633636336366666366666333633333366636366363636366663336336333363663636636333333336666636363363333363336666663663636333333333363666366666633636333333636363663336363633333363636666663636333363333333336666666666333333363336636666663333366663333366366666333336366666666633333333333366363666666663333333333336363636666666663333333336366666666666663333333636666666666366333333336666666663333333366666666666333333333366666666663333333333336666666666633333333333366666


Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


02

Man

ag

em

en

t R

ep

ort

Chapter

CHANGES TO THE COMPOSITION OF THE BOARD OF COMMISSIONERSOn October 24, 2019, Adira Finance held an Extraordinary General Meeting of Shareholders (EGMS) to accept the resignation of Mr. Sng Seow Wah from his position as the President Commissioner due to retirement. We are grateful for his contributions and we wish him all the best in the future.

Subsequently at the same occasion in Company’s EGMS, I was honoured to be appointed as the new President Commissioner of Adira Finance, effective after passing the OJK’s fit and proper test. Together with my colleagues, I hope to steer the Company to the best of our ability for the benefit of all stakeholders.

APPRECIATIONOn behalf of the Board of Commissioners, I would like to thank the Board of Directors and all employees for their efforts in growing the Company’s profitability amid this challenging business situation. We would also like to thank Adira Finance’s customers, partners and other stakeholders who have contributed to the Company’s success. Together, we hope that the Company will continue to grow and prosper in the coming year.

Yasushi Itagaki President Commissioner*

* After passing the OJK’s fit and proper test.

PPPT APTPPT APPT APPPTPTPTT AT AT AT APT APTTTT ATPTT AT AT AAAAT APT AAPT APT AT APT AAT AAAAPPT APPPTPTPT APPT APPTPT ATPT ATPT APT APTPTT AT PTTTTT AT AT AAAT APT AT APT APT AT AAAAPT AAAPPPT APT APTPPT APPPT APPPTTT APT APTTTPT ATPTTTPT APT ATTT AAAAT APT APT APT AAAAAAPPTPT APPPPPPPTTPTPTTT APT APT AAAAT AAAT AAAAAPPTPT APPPPPTPTTT ATTTPTPTT APT AT AAAAAT APT APT AT AAAAAAPPPPPTTPT ATPTT ATTTT AAAT AAT APT AAAAPT AAAAPT APPPTPTTT APTTT ATTTTT AAPT AAAT AAAAAPT AAT AAAAAAPPPTPT ATTT ATT ATTTTTT ATT ATT APT AAPT AAAAAAPT APT AAAPPT APPTPT APPPPT ATTPTTTTTTTPT AAAAAAAT AAAAAPPT APTPPPT TTTT ATTTT AAAPT AAAAAAAAPT AAPPTPPPTTTTTTPT AAAAAAAAAT AAPPPPPTTTTTTT AAAAAAAAAAAAPPPPTTTTTTTT AAAAAT AAAAAPTPTPPTTTTTTTT AAT AAAAAPPPPPPPT APPTT ATTTTTTT AAAAAAAAAAAAPPPPPTTTTTTTT AAAAAAAAAAAAAAAPPPPPPPTT ATTTTT AAAAAAAAAAAAPPPPPPPPPPPTTTTT AAAAAAAAAAAAAPPPPTTTTTTTT AAAAAAAAAAAAdidddddddddiraddddiraiiraiiiiraradirdidiraairaaddddddddddddiiiiiidirdirradiraddddddddddidddiriiirradirrarairadiradiraradiradddddddddidirddiiirdidiradiraadiraairadiradiradiraddddddddddiraddiiididiradidiradiraadiradiradiradiradirdddiraddddddddddiraiiraradirarrraaaaadiradiradiraaaddiddddddiradiriiraradiraradirrrriraaaaadiraadiradiraaaddddiradiraddddiraiirarardirarrrrdiraaadiradiraadddiradddddiidirrrrrrdiraaaadiraddiradiradiraidirrrrrraaadiraddiddddiraiiirrrraaaaddddddiradiriiirarrrdirarraadiradirddirdddddiraiiirrrdirraaaaaddddddiiidirrrrrirdiraaaadddddiiiirrrrrrrraaaadddddddddddiiiirdirrrrdiraaaaadddddiiirrrrrraaaaaaddiddddddiiirrrraaaddirrrrrraaaaaaa DiDDDDinDinDinDDinDinDinDiDDinDDiniiiiDinDinDinDinDinDDinDiDDDinDinDiDDinDDDDiiiDiDinDinDinnDinDinDinDinnDinDDDDDinDDDDDDDDiiiDiDinDinnDininnnDinDinDDDDinDDDDDDDDDiiiinDinDinDinDinDinnDinDinDDinDiDDinDDDDDDDDiiiiDinDinDinnDDDDiDDDDDDDDDDiiiinnnDininnnDDinDiDDDDDDDDDiiiinnnDinnDinDinDinninDinDDDDDDDDiiiiDinnnnnnnDinDinDDDDinDinDDDDDDDiiiiDinnDDDDDDinDiniiniinninDDDDDDininnDiDDDDinnnnnDDDDDD nnnnDDDDDDD nnnnnDDDDDDDDDD nnnnDinDDDDDDDDDDinnnnDDDDDDDDDinnnnnDDDDDDDDiinnnnDDDDDDDDDD nnnnnamikamikamikamikamikamikamikamikamikmikmamimikamamamamikamiamamikimikamikamikiiamiamiamikamiikkkkkkkkmikkamiamikamikamiamikamiamiiamikamikamikmikmmikmikamiamimimikamamikikamiamiamikamikkkkkkkkkamikamiamikamimiamikammikamimimikmiamikmikiikkmikkkkmikamikamamamikaamikmammammikamamikmikmikamikamikkkmikkkkmikamikamamimikamikamamikmamammikmikmikkkkkmikkkmikamikaamamaamimmmmmmmmmimmikamiamikamikkkmikamikkkamamaaamammmmmmmimikmiamikmikmikmikaaaamikaamiaammikmmammmmamikiikmikamikamikaaaaammmmmmmamamikmikmmmmamikiikamikamikkamikamikaaaammmmmammmmammmmmmmmikkikaaaaammmmmmmmmmmmmmm kkkamaaaamikaammmmmmmammmmmmiamikkkkaamamaammmmmmmmmmammamikkkkkamamaammmmmmmmmmmmamikikmikkaamammmmmmmmmmmiikaaamaaaaaaaammmmmmmmmammmiiiikkaaamaammammmm kkaaaaaamammmmmm kkaaaaammmmmmm kaa Ma Mua Maa Ma Ma MMMMuMa Ma Ma MMa MMMMMMMMMMa MMa Ma Ma Ma MMuMua Ma Ma MMa Ma Muaa MMMuMuMMMMuMMMMMMMa Ma MMuMua Ma Ma Ma MMMMa Mua MuMMuMuMMMuMMMa MMMMMuMuuMuMua Ma Mua Mua Ma Ma Maa MuMMuMua MMMMMuMMMMuMMMMa Ma MuMa Ma Mua MuMMMM MuMuMuMa MMMMMMMMuMa Ma Maaa Ma Maa MuMuMMMuMMuMMMua MuMuMuMMa MMa MuMua MuMuaa Maaa MuMMMMMuMMuMMMMa Ma MMMuuMuuuuua Muua Maaaaaaa Muaa MuMMMMa Mua MMMMuMMMMMuuuuuuuMuaaa Maa Mua a MMMMa Ma MMa MMMMMa MMuuMuuuMuaaaaa Maaa MuMMMMuMMMMMMMa MMa MMMMuua Maaaa MMMMMMMMMMuuuuuua Maa Maaaaa MMMMMMa MuMMuuMuuuaa Maaaaaaaa MMMa MMMMuMuuuuuuMuaaaaaa MMMMMMMuuuuuMuuuuaaaaaaaa MMMMMuuaaaaa MMa MMMMMMMuuuuMuuaa MuMuMMMMMuuuuuuuaa MMuuuuuuaaa MMMuuuullll itiiiilllttittiltiiiiltilllltttttttiiilltltilti ttttttiillltiltitttttttiiillllttttttttiiiiillttttttttiiiiilllttttttttiiiilltlttttttttiiiilltltttttlttiltiiillltttttttiltiiilllltttttttitiiiillttttttttitilllltttttttiilltttttiiillltttttttiiiillltttttttiiiltttttiillllttttiii FFiFFFiFinaFinFinaFFFiiiniininaFinFinnnaFinaaFiFinaaFFFFFinaFFFFFiiiFinFinnaFiFinaaaFinaaFinanaFinainaFiFFFinaFFFFinaFFiFiiiFinnaFinaFiFinaFinaFinaanaFFFFiFinaFiiinanFinnaaFinanaFinaFinaFinaFFFiFFFinaFinininiFinannanFininaFinaainaFinaFFFFFFFiFFinainainnainnnnnnnnnannnaFinaaaaaaFFFiiinnnnanFinannaFinaaaaaaaaaaFFFinFiFFiFinnFinnnnnannnnaaaaaaaaFFFFFFiiFinnnnnnnannnaaaaaaaaaaFFFFFFiFinannnnaaaaaaaaaaFFFFininiinnnnnnnFinaaaFinaaFinanaanaFFinFFFFiFinnnnnaaaFinaaFinaaaFinaFFFFFFiFiFFiinFinnnnnnaaaFinaaaaaFFFFiniinnnannnaaaaaaaFFFFFFFFFFiinnnnnnnnnaaaaFinaaaFFFFFiiinFinnnnnnnnnaaaaaaaaaFFFinaFFFiinnnnnaaaaFFFFFiiinnnnnnnaaaFFFFFiinnnnnannnnncennnnnnnccceccccccccceeeeeeeececeeeece nnnnnnnnnnnncccecccccceeeeeeceenceeence nnnncencenncnnnceccceccccccceeeeceence nnnnnnncennnncencencccccecccccceeenceenceeeencenncnncennnnceccceccccccceeeenceeeceeencenncennncennnnnncenccccccccceeeeeeeecencennnnnnnnccccccccceeeeeeeencennnnnccccccnceeeeeennnnnccccccccceeeeeeencennnncennnnnnnccccccceennnnnnnnnnccccceeeeeennnnnnnnnnccccnccceeeeennncennnnnccccccceeeeee cccceeeeee TbkTTTTTbkTbTbkTbkTTTbTTTbbbbkbTbbkTbTbbTbkTbkkbkTbk kkkkkTTbkTTTTTTTTTTTTTTbTbbbbbTbbTbkTbbkbkTbkTbkTbkTbkTbkkkTTTTTTTbkTTTTbTTTTbbbbkbbbkbbkkTbkkTbkkkkkTTTTbkTTbTTbTTTbbbTbkbkbTbTbkbTbkkkkkkkTbkkkkTTTTTTTTbkTTTTbkTbbTbbbbkbbkTbTbkkkkkkkkkkkTTTTTTTTbkTTTTTTbkTbTbbbbbk TbTbkkbkkkkTbkkkTbkTbkkTTTTbkTTTbkTbkTbkTTTTTTbkbkTbkbbbkbbbkbkkkkTbkTTTbkTTTTbbbbbkTbkbkkkkkkbkTbkTTTTTTTbbbbbkbkkkkkTbTbTTTTTTTbbbbTbkbkkkkkTTTTbTTTTTTbbbbkbkbbbbkkTbTbTTbTbTTTTTTTTbbbbbbbbkkkTbTTbTTTTTTTTbbbTbbbbkkkkTTTTTTTTTTTbbbbbbbkTbkkkkTbTbTTTbTTTTTbbbbkTbkkkTbTTTTTbkTTbbbbkkkkkbk TTTTTTTTTTTbbbbbkkkkTbkTbkTTTTTbbbbbbbbkkkkkTTTTbbbbbbbkkkkk 222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222001901100190199111191191011901901901901019000000190001191191019011191919190191999900000100000000191911111101019991999990000000001191199999190190199991001001900001919191101111990190199900000019001911010110101999999001901000019019019011101919999999991900001900001119110199999999900000001119199999990001901900000011919999919000001191999999000190001199999901010000011199999900001999999010101011999001001119999990001119999999901119999999999000111999999 AnAAAAAAnnAnAAAAAAAnAAnnAnnAAnnAnnAnAnnAnnAnnnnAnnAnnnAnnnnnAnnAAnnAnnnnAnnnAAAnnAAnnAAnAAAAAAAAnAnnAnAnnAnnAnnAnnAnnAAnnnnAnnAnAAAAAnnAnnAnAnnAnAnnnnAnnAnnAnAnnnAnnnnAnAAAnAAAAAnnAnAAnAnnnnnAnnAnAnnnAAAAAnnAnnAAnAnAnAA nnAAAAAAnnAnAAAAAnnAAnnAnnnnnnAnAAAAAnAAAAAAAAAAAnnAnnnAnnnnnnnAnnAAAAAnnAAnnnnnnnnnnnnnAnnAAnnAAAAAAnnAnAnnAAnAAAnnnnnnnnnAnnnnnAAAAAnnAnAnnAnnnnnnnnnAnnnAnnAAAAnnAAAAnnnnnnnAnnAnnAnnnnnnAAAnnnnnnnnnnAnnAnnAnnnnnnAnnAAAAAAnnnAnnnnAnnnAAAAAAnnnnnnnnAnnnnnnAnAAAAnnnAnnnnnnnnAnnnnnAAAAAAAAnnnnnnnnnnnAAAAnnnnnnnAnnAnnnnAnnnnnAnAnnAnnAnnnnnnnnnnnnnnuauauauauauaalaauallluaualuauauaualualualuauaauaalalluauauaaaaallluaauaalaalualllluuauaaauaaalllualuuuualuuuaaaalaual lluuualuuuuuaalluuuuuuualuaaauaaaalluuuualuuuaaaaalluuuuuuualaaaaallluuuuuuuauuaaaaaaaallluauuuuuuuuuaaaaaaaaalluauuuuuuuuuuuaaaaaaaaaauuuuuuuaaaaaaaalluuuuuualuuuaaaaalualluuuuuuuauaaaaaaaalualuuuualuuuaaaaaauuuuaaaaall RepoReRepReRReRRReRepoRRRepoRRRepepoepoepoepoepoRepReRepoepepopoepReppRepRepoepoRepoRepoRRepoepoRepoepoRepRepRRepRRepoRRRepoRRReRRRepoepoeepoepoRepoRepoRepoepopoepRepRepepoRepoRepoRepoepoepoepoRRepReRRepRepRepoRRepoReRRRRRRepoepoeRepoReepRepoepoepopRepppopooRepopopoReRepRRRepRRRRRepRRepoRRRepoRepoepoepoepRepoRepoRepRepoRepopoRepRepoRepoRepoRepRepRepRRepoRepoRRepRepRepoepoepepopReppoepoRepoRepoRepRRRRRRepRRReeeRepepopRepooooooRepopoRepoRepoRepoReRepRepoRRRRRRRRReeeRepoRepeRepppopoRepooooooReRepoRRReeeRepeReepppReppooopoepoReRRRRRRRRReeeepoReepopepepopoooRepooooepoRepRepRRRRRRRReeeepoepoepoepppoopooRepooRepooooRepReRepoRRReeeepoepopppeppoooRepoRRRRRRRRepepeepReeppRepppppopoooRepoepoRRRRRRRRRReReRepepppReppppRRRRRRepReRepeRepoppepppRRRRRepReRepeeeReeReppppRRepRReeepoppppRRepoRepRRRReeeReReppppooepoRRRRRepoepeppRepoRepRRRReeeepppppppppppppppppppppppppppppp rtrtrrtrtrtttrtrrrtrrtrttttttrrtrrrrtttttrtrtrtrrtrtrtrttttttrrrtrrrttttrtrrtrtrtrrtrttrttrrrrrtrtttttrtrrrrttttrrrttttttrrrtttttrrrrrttttttrrrrtrtttrtrtrrrrtttrrrrttrrtttrtrttttrrrrrrttttttt 373733737373777373737377373377377333737333737373737773773737773737733333737373377777377373333337373773777773733333333337373777777733333333373773737773777737333333737777777733333333733737773737773333337333333777377377773333337333377773777777773333333333777737777737377773333333337377737773777373733337333737377777377777373373333337777373737773777737333377737777737373333333337777773737373337333333337777373733373333333773733333777333337337733333377773333377773333377733377333333


BOARD OF COMMISSIONERS


Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


02

Man

ag

em

en

t R

ep

ort

Chapter

* After passing the OJK’s fit and proper test.

Yasushi Itagaki* President Commissioner

Muliadi Rahardja Commissioner

Eng Heng Nee Philip Commissioner

Krisna Wijaya Commissioner concurrently Independent Commissioner

Willy Suwandi Dharma Commissioner

Djoko Sudyatmiko Commissioner concurrently Independent Commissioner


ADIRA FINANCE HAS CONTINUED TO FOCUS ON ACCELERATING ITS DIGITAL BUSINESS TRANSFORMATION WITH AN EMPHASIS ON DELIVERING IMPROVED CUSTOMER EXPERIENCE. WE BELIEVE THAT THIS PLAN IS BEGINNING TO PAY OFF AS SHOWN BY ADIRA FINANCE’S ABILITY TO INCREASE ITS PROFITABILITY AND SUSTAIN ITS MANAGED RECEIVABLES THIS YEAR.

R espected Shareholders,The last few years has been a highly dynamic period for the Indonesian multifinance industry, with various changes taking place due to shifts in the

global and domestic economies as well as changes in Indonesian consumer behavior that are related in part to the effects of digital disruption on established patterns.

Having anticipated these changes well in advance, Adira Finance has consistently continued its business transformation to become a customer-centric digital organization. We believe that this plan is beginning to pay off as shown by Adira Finance’s ability to increase its profit and sustain its managed receivables this year despite challenging business environment. Below we discuss this in more detail.

MACRO ECONOMIC LANDSCAPE

The pace of global economic activity remained weak in 2019 as rising trade and geopolitical tensions took a toll on business confidence, investment decisions and global trade. According to the World Bank, global economic growth eased to a projected 2.6% in 2019, down from 3.0% in 2018. This slowdown affected both advanced economies as well as emerging market and developing economies.

Indonesia’s annual economic growth in 2019 eased slightly to 5.02% from 5.17% in 2018. The decline in economic growth was affected among others by lower commodity prices in palm oil and coal, a weakening manufacturing industry and the trade deficit, all of which were exacerbated by lower exports due to global trade tensions.

THE BOARD OF DIRECTORS

Report of


Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


02

Man

ag

em

en

t R

ep

ort

Chapter

Hafid HadeliPresident Director


Nonetheless, the fourth quarter saw continued inflows of foreign capital. After sliding in value during 2018 vis a vis the US dollar, the rupiah strengthened inline with the positive performance of Indonesia’s balance of payments, which was also supported by monetary easing throughout the year. The central bank cut rates by a total of 100 bps to 5 percent, the lowest level since May 2018, in an effort to boost domestic economic growth momentum while maintaining controlled inflation within the target corridor of 3.0%±1%

Liquidity continued to be relatively tight however, with the availability of bank funds (liquidity) to meet credit or Loan to Deposit Ratio (LDR) reaching 93.6%. The Banking sector recorded 6.08% y/y lending growth compared with 11.8% y/y in the previous year. The Non-Performing Loan (NPL) ratio stood at 2.53% at the end of 2019 compared with 2.37% in 2018, primarily due to the manufacturing and trade industries.

Automotive Industry ReviewAll of these conditions affected consumer and business confidence, resulting in stagnant growth of the automotive industry. According to the Indonesian Motorcycle Industry Association (AISI) and the Association of Indonesia Automotive Industries (Gaikindo), vehicle sales overall were underpressure during 2019. New motorcycle wholesale sales slightly increased by 1.6% y/y or 6,5 million units, while new car wholesale sales decreased by 10.5% y/y to 1.0 million units in 2019. The weakening was attributable to the relatively weak consumption, lower commodity price in coal and palm oil which impact to industry sales.

These conditions obviously put pressure on Adira Finance and other players whose core business is automotive financing. With a stagnant market and pressure on automotive sales, competition intensified even as growth opportunities were squeezed.

Strategies and Initiatives in 2019Facing these conditions, Adira Finance continued to focus on accelerating its digital business transformation with an emphasis on delivering improved customer experience.

The Company made real progress in 2019 in becoming more customer-centric and improving its efficiency through by incorporating digital technology and a digital mindset, towards ultimately improving customer experience.

Continuing the trend of previous years, the Company continued to improve, simplify and automated back-end processes, which had previously been done manually in many locations. This has had the effect of increasing operational efficiency and decreasing cost, while enabling our frontline people to focus on the high value work of engaging new customers and retaining existing ones.

Our customer engagement efforts were also enhanced using digital channels. Among others, The Adira Finance mobile application for its customers, AKSES, was enhanced and rebranded as Adiraku. Adiraku allows customers to manage their accounts and make instalment payments with ease, serving as the Company’s direct line of communication with customers and directly improving customers’ experience with Adira Finance. This is particularly important in order to strengthen customer loyalty and distinguish Adira Finance from competitors in the increasingly crowded market.

At the same time the Company continued to optimize its superior access to funding sources. Backed by its parent company Bank Danamon, a member of Mitsubishi UFJ Financial Group, Adira Finance is the few Indonesian companies to achieve an investment international grade rating, equivalent to Indonesia’s sovereign rating, and Adira Finance has therefore been

Report of Board of Directors


Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


02

Man

ag

em

en

t R

ep

ort

Chapter

able to enjoy competitive funding rates. Investor confidence was reflected by the Company’s ability to secure a syndicated 3-year loan facility for US$350 million, which was oversubscribed by almost 2 times by foreign investors, mostly from Singapore, Taiwan and Japan.

Altogether, these factors enabled the Company to achieve its targets as follows:

BUSINESS PERFORMANCE IN 2019

Description Unit Target Realization

New Financing In IDR trillion 37.3 37.9

Managed Receivables In IDR trillion Around 54 54.8

Net Profit In IDR trillion Above 2 2.1

Non-Performing Loan Ratio (Including Joint-Financing)

% Below 2% 1.6%

Car Market Share % Above 4% 4.4%

Motorcycle Market Share % Above 11% 11.8%

Financial PerformanceThroughout 2019, the Company proactively managed operating expenses and cost of funds to compensate for slow receivables growth. As a result, the Company was able to increase operating income by 11.2% y/y from IDR7.5 trillion to IDR8.3 trillion for above-market net profit growth of 16.2% y/y, amounting to IDR2.1 trillion in 2019, out of which the Company sustained its dividend amounting to 50% of net income earned in 2018 by IDR908 per share.

Supporting these results, operating expenses rose by 7.9% y/y to IDR3.7 trillion in 2019, a smaller increase compared with the 13.2% y/y growth of operating expenses in 2018. The main component of the increase was adjustments to wages and human resource requirements such as ongoing training as needed.

The cost of fund in 2019 rose slightly by 10 basis points of total interest expenses to reach 9.1%, more than 9.0% in 2018 following the increase of interest rates lagging in the second semester of 2018. Net interest income therefore increased by 8.5% y/y to

IDR7.2 trillion for 2019. The Company incurred interest expense of IDR4.8 trillion compared with IDR4.2 trillion in 2018, while interest income amounted to IDR12.0 trillion in 2019, compared with IDR10.9 trillion in the year before. Whereas the cost of credit amounted to IDR1.7 trillion, a 11.8% increase y/y.

Inline with these results, the Company’s return on assets ratio (ROAA) increased from 6.0% to 6.3%. Meanwhile, the ROAE ratio increased to 29.3% in 2019 from 29.0% in 2018, inline with the increase in net profit. Total equity increased to IDR8.1 trillion at the end of 2019 up from IDR7.0 trillion at the end of 2018 on the back of strong retained earning.

Asset quality continued to be well within healthy limits, with non-performing loans recorded at 1.6% in 2019 compared with at 1.7% in 2018. With a gearing ratio of 2.8x, well below the 10x limit specified in Financial Services Authority Regulation No. 29/POJK.05/2014 regarding Conducting of Financing Business, the Company has ample room to raise more funding for future growth.


New FinancingAs discussed above, the market in 2019 was very challenging with sluggish growth in new financing. Industry wholesale sales for new motorcycles slightly increased by 1.6% y/y to 6.5 million units and new cars decreased 10.5% y/y to 1.0 million units in 2019. In this competitive environment, Adira Finance’s market share of new motorcycle financing was flat at 11.8%, while its market share of new car financing decreased by 40 bps to 4.4%.

Adira Finance faced a slower growth in vehicle financing amid pressures from the automotive industry market, but a strategy was in place that successfully helped sustained its new financing. The Company booked total new financing at IDR37.9 trillion in 2019, of which conventional financing comprised the majority at 92%, with sharia financing making up the rest at 7%. Conventional new financing declined by 3.9% y/y to IDR34.9 trillion and sharia financing increased by 56.1% y/y to IDR2.7 trillion during the year.

Of this amount, new financing for cars, motorcycles and durable goods comprised 41%, 57% and 2% respectively in 2019, compared with 44%, 54% and 2% in 2018. In terms of units, this translated to new financing for 1,376 thousand motorcycle units and 115 thousand four-wheeled vehicles during 2019, for a value of IDR21,5 trillion and IDR15,7 trillion respectively, with durables contributed the remaining IDR625 billion in new financing.

New financing for new four-wheeled vehicles declined by 15.5% y/y to IDR8.5 trillion and new motorcycle sales grew by 7.1% y/y to IDR15.0 trillion, while new financing for used cars and motorcycles grew by 6.5% y/y and 3.7% y/y to IDR7.2 trillion and IDR5.2 trillion respectively in 2019. Reflecting the sluggish business environment, the passenger car segment recorded 3.2% y/y growth to IDR10.0 trillion, while the commercial car segment declined by 20.0% y/y to IDR5.7 trillion in 2019.

The new financing result was supported by a combination of digital and non-digital outreach efforts. The Company continued to leverage its large network of around 450 outlets, augmented by other sales channels including partnerships with third parties and

agents as well as a variety of digital channels including the Adiraku mobile application as well as Adira Finance’s owned marketplace; momobil and momotor. The management also rolled out targeted dealer programs and enhanced its customer segmentation and analytics so as to be more effective, while continuing to explore possible new product offers for customers.

Geographically, 57% of total new financing was allocated to Java region while 43% was disbursed outside of Java regions. Broken down by regional disbursement, the Jabodetabekser area absorbed 27%, Java excluding Jabodetabekser recorded 30% growth, Sumatera absorbed 18%, Sulawesi 14%, Kalimantan 7%, and Bali Nusa Tenggara 5%. This distribution shows Adira Finance’s nationwide reach as well as its sincere efforts to drive regional development and reach consumers all over Indonesia towards inclusive growth.

Managed ReceivablesThe Company’s managed receivables portfolio continued to grow in 2019, driven primarily by new financing growth over the past years. Continuing the trend of previous years, efforts to grow the car financing portfolio succeeded, resulting in a managed receivables portfolio that was comprised 51% of car financing, 46% of motorcycles financing and the remainder of financing for durables.

The Company includes financing and transaction costs that are directly attributable to the acquisition of financing receivables within its calculation of managed receivables. Overall, managed receivables grew by 6.7% to IDR54.8 trillion during 2019, setting a new record for the Company.

Of this amount, IDR23.3 trillion or 42% of total managed receivables was funded by the joint financing scheme with Bank Danamon. The remaining 58% in financing receivables was funded by the Company’s own borrowings and equity that reached IDR31.5 trillion for the year.



Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


02

Man

ag

em

en

t R

ep

ort

Chapter

Funding ActivitiesOne of the Company’s greatest advantages is its ability to access funds from diversified sources at highly competitive rates. Since its parent company, Bank Danamon, became a member of Mitsubishi UJF Financial Group, this advantage has been further amplified on a global scale.

At the beginning of the year, for the first time, the Company achieved an investment grade Baa2 rating by Moody’s and BBB rating by Fitch, citing among others the Company’s well-established domestic position, diversified portfolio, and robust capital and profitability. The Company’s credit rating also reflects the strong synergy with its parent Company, Bank Danamon and also the highly likelihood to receive extraordinary support from Danamon and its ultimate parent, Mitsubishi UFJ Financial Group, Inc. in times of need. This rating has significantly strengthened the Company’s ability to access new funding sources domestically as well as abroad for a diverse investor country mix that includes Japan, Singapore and Taiwan. Overall, the average cost of funds relatively stable at level 9% in 2019 despite of a significant increase in interest rates in the prior years.

Total borrowing reached IDR22.9 trillion in 2019, a 4.2% increase over IDR22.0 trillion in 2018, of which 52% or IDR11.9 trillion comprised bank loans. These bank loans were derived 21% from domestic banks and 31% from offshore funding. The remaining 48% was sourced 45% from the issuance of domestic bonds and 3% sukuk mudharabah. Compared with 2018, the percentage of bank loans increased by 0.6% y/y, while the percentage of while bonds and sukuk mudharabah increased by 8.3% y/y. Investors continued to demonstrate strong appetite for the Company’s three bond issuances during the year that amounted to IDR4.12 trillion. In addition, as mentioned above, the Company’s seventh loan syndication for USD350 million in 2019 was significantly oversubscribed, mostly by foreign investors.

All offshore borrowing facilities are fully hedged to mitigate the risk of foreign exchange and interest rate volatility. The Company also maintained onshore borrowing around 21% of external borrowing in local currency bank loans to provide funding diversification.

OPERATIONAL PERFORMANCE

The Company’s ongoing digital transformation accelerated in 2019, with an emphasis on implementing customer-centric initiatives that can concretely advance customer experience in years to come. These initiatives aimed to strengthen Adira Finance’s presence and brand recognition in the market, deliver service excellence to customers, and leverage digital for efficiency and performance. The management believes that all of these aspects are critical in order for the Company to compete long term.

Strengthening Market PresenceAs of December 31, 2019, Adira Finance served more than 2.9 million customers, supported by 17,677 employees and 453 outlets all over the nation. At the same time, the Company has also established a growing digital presence. This combination of online and offline customer reach has helped the Company to acquire and retain new customers, supported by partnerships with third parties as well as synergies with parent company Bank Danamon and affiliate company Adira Insurance.

The Company deployed a variety targeted marketing and promotions during the year in order to reach specific communities, including various events and content tailored to attract millennial customers as the next generation. The Company also took steps to strengthen ties with dealers as important partners.


Inline with the Company’s commitment to empower local communities, Adira Finance also continued to support the Keday sales channel program. The Adira Finance Keday offers opportunities for local entrepreneurs to join Adira Finance as local partner in the communities and start selling Adira products and services as well as accept instalments from existing consumers and even identify good potential consumers.

While vehicle financing continues to be core business of the Company, Adira Finance nurtured relationships with various e-commerce sites to strengthen its digital brand presence and expand its durables and multipurpose loan business. Its own digital platforms, www.momobil.id and www.momotor.id, also continued to grow, thus further expanding the Company’s outreach.

Delivering More Towards Higher Customer SatisfactionOver the past three years, the Company fundamentally revamped and automated its back-end processes. As a result, the Company was able to process credit applications more quickly and accurately in 2019 for greater customer satisfaction. The management was also able to utilize the upgraded Customer Relationship Management (CSM) system to monitor and analyse customer information at different levels of detail, including analysing the types of products and services that might appeal to each customer. During the year, Adira Finance’s customer-facing mobile application, Adiraku, was enhanced with new features and a more contemporary look so as to appeal to younger consumers. The new mobile application is a valuable direct-to-customer channel that the Company intends to carefully nurture to offer more benefit to users and keep them close to the Company.

As part of giving consumers more choice and keeping them interested, the Company continued to explore new products and brands that it could add to its core offerings. This has the additional benefit of diversifying the Company’s revenue stream and potentially tapping new markets.

Finally, the management makes continuous improvements at all customer touchpoints, whether digital or offline, towards achieving higher customer satisfaction throughout the entire customer lifecycle.

PerformanceAmidst the pressures of 2019, the management pushed to further streamline the Company’s internal processes to save time and resources. At the same time, it was more important than ever to prudently monitor exposure and check for fraud and other risks. Fortunately, the digital systems that had been implemented were able to keep operating cost increases to a minimum, without sacrificing performance and risk management. In fact, the Company’s digital systems improved performance and risk management, thus delivering improvements in overall efficiency and performance. HUMAN CAPITAL (HC)

The Company recognizes that its human capital (HC) are its important asset. In order to optimize its human capital (HC) within the context of its digital transformation, the Company has put into place multiple initiatives that focus on helping employees acquire the right competencies to support the Company’s successful transformation into a customer-centric organization capable of delivering better customer experience.

Following the renaming in 2018 of the Sales division to become the Sales, Service & Distribution division, in 2019 the management continued to drive improvements in its sales, service and distribution capabilities with the aim of long-term customer retention and improvement. This was supported by the ongoing digitalization and centralization of certain back-end processes, which has freed up the Company’s HC to focus on improving sales and service in a coordinated manner, inline with the Company’s objectives to measurably advance customer experience. Key Performance Indicators and Balanced Score Cards have been duly adjusted as well to ensure that employees are incentivized to perform inline with corporate objectives.



Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


02

Man

ag

em

en

t R

ep

ort

Chapter

In parallel, the management has made adjustments to the organizational structure, taking into consideration the needs of the business and how they can be most efficiently met, in part through digital technology and in part by offering training. Working in consultation with business users, the Human Capital Committee has put together a comprehensive talent development strategy for employees that incorporates training, self-learning, coaching and mentoring, as well as work experience. Employees are also able to access learning materials directly from DigiLearn, a mobile e-learning application developed by Adira Finance Corporate University which can be downloaded from Google Playstore.

RIGOROUS CORPORATE GOVERNMENT

Good corporate governance (GCG) is a genuine priority for the management, which with the support of the shareholders has continuously sought to improve and strengthen its GCG practices with references to best practices and international standards. For the third year in a row, Company’s self-assessment of its GCG practices, which is based on SEOJK15/SEOJK.05/2016, achieved a perfect score. In addition, Adira Finance won the “The Best Disclosure Transparency 2019” and Indonesia GCG Award 2019 for the 1st Category Multifinance.

To this end, the Company has established a risk management framework that comprehensively monitors and assesses all aspects of the Company’s operations, The results are shared with a number of committees whose function is to assist Board of Directors in overseeing the Company’s corporate governance and risk management, namely the Risk Management Committee, Credit Committee, Asset-Liability (ALCO) Committee.

All of them performed their duties adequately in 2019 as follows:

The Risk Management Committee is responsible for assessing the overall risk exposure of the Company. In 2019 the Risk Committee carried out this task and made improvements as needed in line with the

changing needs of the business. The NPL and other key metrics were successfully maintained within acceptable levels. As the subsidiary of a bank, the Company has implemented risk management practices based on the banking standards of its parent company, which are extremely rigorous.

In 2019 Credit Committee performed its task of evaluating and optimizing processes related to the disbursement of financing by continuing to simplify and digitizing the credit approval process where appropriate, while maintaining the appropriate safeguards to prevent fraud and ensure good quality loans for both the core automotive financing business and the growing non-automotive financing business.

The Asset-Liability Committee (ALCO) is responsible for ensuring that Company’s liquidity risk is prudently balanced against the pursuit of optimal returns. In 2019 the ALCO Committee evaluated and discussed the Company’s Assets and Liabilities at regular meetings, and made decisions as needed to support effective liquidity management as well as the implementation of the funding diversification strategy, and furthermore provided input on financing interest rates.

In addition, the Company adheres to various risk management mechanisms which have been adapted from the risk management practices of Bank Danamon as the parent of the Company inline with Bank Indonesia Regulation No. 8/6/PBI/2006 dated 30 January 2006 concerning The Implementation of Consolidated Risk Management for Banks Exercising Control on Subsidiaries.

On the human resources side, as part of its efforts to establish strong corporate governance as part of the company culture, since 2005, the Company has implemented and enforced a value that all employees must adhere to the company’s code of ethic, which embodies the principles of GCG. All employees including Directors and Commissioners are all expected to follow this Code of Conduct, with infringements punishable up to and including termination.


Meanwhile, to safeguard against the rising risk of cyberattacks, the Company has also implemented strict Information Technology (IT) functions and controls that are based on banking standards, Control Objectives for Information and Related Technology (COBIT), Information Technology Library, and PBI 9/15/PBI/2007 regarding Implementation of Risk Management in Information Technology Used by Commercial Banks. This framework helps the management to detect potential business risks and take mitigatory steps, ensuring that the business is managed prudently with due caution for the benefit of all stakeholders as the Company undergoes its digital transformation. CORPORATE SOCIAL RESPONSIBILITY

The Company’s focus on blending online and offline for maximum benefit was reflected in its CSR programs during 2019. Working together with the Adira Finance ecosystem including employees, customers, dealers and other partners in collaboration with relevant government ministries, Adira Finance used offline and online channels to highlight local tourism destinations as well as promising Small and Medium Enterprise (SME). To do so, traditional marketing initiatives and offline activities were combined with digital competitions and activities, thus reaching a wider audience and increasing engagement. Adira Finance is committed to contributing to the country by working together with the Ministry of Tourism and RCTI as part of a joint CSR program to hold the Festival Pesona Lokal. Festival Pesona Lokal is part of the promotion program for potential of culture, tourism, and local wisdom in the regions of Indonesia, which was held in several cities.

In addition, together with Bank Danamon Peduli Foundation and, Adira Finance also moved to help victims of natural disasters throughout the year in communities where the Company has a presence. This is part of the Company’s commitment to the people of Indonesia.

Lastly, Adira Finance Corporate University reached out at a grassroots level to inspire young Indonesian people. Its efforts ranged from giving out scholarships to a digital business idea competition called Innocamp 2019. In its fourth year, Innocamp 2019 attracted some 15 teams to compete with the theme “Enhancing Digital Financing & Customer Centricity”.

AWARDS

Reflecting its progress, the Company was awarded numerous awards in 2019. Among others, the awards The Best Indonesia Multifinance Company 2019 in the Public Company Category (Assets > 10 Trillion) from Economic Review magazine, a Silver Champion award from WOW Brand as a brand that consumers highly recommend, a Top Brand Award from Warta Ekonomi magazine as Millenial’s Choice in the Vehicle Financing product category and Millennial’s Choice in the electronic & furniture loans category, and three awards at the Indonesian HR Excellence Award by SWA in the categories of Learning and Development Strategy, HR Transformation and HR Technology.

In addition, the Company also won Best Leader with Digitalization Program at the Multifnance Top Leader Award 2019 for the President Director’s performance, Best CEO at the Obsession Awards 2019. The Company was also awarded the The Best Disclosure Transparency 2019 by the Indonesia Institute for Corporate Directorship and Indonesia GCG Award 2019 for the The 1st Category Mulfinance by Economic Review.



Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


02

Man

ag

em

en

t R

ep

ort

Chapter

BUSINESS PROSPECTS

Expert forecasts, including IMF and World Bank predictions, suggest that global growth will pick up around 2.6 percent in 2019 to about 2.7 percent in 2020. There is also the potential for a cyclical recovery in key commodities such as coal, which would likely benefit Indonesia as a major coal exporter. Overall however, Indonesia remains vulnerable to capital outflows and trade tensions. As a result, forecasts for Indonesian GDP growth in 2020 hover around 5 percent.

Under these conditions, AISI and Gaikindo expect stagnant growth in vehicles sales, depending on the increase in GDP. However, there is still potential for upside, especially as the requirement for vehicle down payments have been relaxed by Bank Indonesia. It is hoped that this will spur consumers, especially the aspiring middle class, to buy more.

The management believes that with the innovations which have been implemented so far, Adira Finance will be able to weather these conditions, which affects all players in the industry, and even grab market share. The management firmly believes that Indonesia’s young and expanding population, together with its growing economy, represents healthy market growth for the multifinance industry in the long term, especially as a large number of Indonesian consumers are still unable to access credit from formal institutions as well as the low penetration rate in car ownership in Indonesia. This gap is one that Adira Finance is well prepared to serve.

In 2020, the Company will therefore focus on accelerating digitalization, strengthening customer experience and retention, and continuing to diversify its product range. The Company hopes to achieve around 4-7% financing growth target. While doing this, the management will of course safeguard its margins, monitoring costs and ensuring health growth with strong risk controls.

CHANGES IN THE COMPOSITION OF THE BOARD OF DIRECTORS There were no changes to the Board of Directors in 2019 and the current composition of the Board of Directors was affirmed at the Annual General Meeting of Shareholders on 20 April 2018. We thank the shareholders for their trust and commit to advancing the Company to the best of our abilities.

CLOSING

We are very grateful for our customers’ trust, as well as the support of our employees, business partners and shareholders. All of these made Adira Finance’s achievements possible in 2019. We also extend our appreciation to the regulator and to the Board of Commissioners for their continuous input and guidance.

Rest assured that we continue to work hard to improve our products and service and optimize our business model. While many challenges lie ahead, we continue to focus on securing long-term growth for the benefit of all stakeholders.

President Director


BOARD OF DIRECTORS


Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


02

Man

ag

em

en

t R

ep

ort

Chapter

Swandajani Gunadi Director concurrently Independent Director

Ho Lioeng Min Director

Niko Kurniawan Bonggowarsito Director

I Dewa Made Susila Director

President Director


STATEMENT OFTHE BOARD OF COMMISSIONERS

We, the undersigned, testify that all information contained in the 2019 Annual Report of PT Adira Dinamika Multi Finance Tbk has been presented completely. We assume full responsibility for the content accuracy of the Company’s 2019 Annual Report.

This statement is hereby made in all truthfulness.

Jakarta, 18 February 2020Board of Commissioners

Djoko SudyatmikoCommissioner concurrently Independent

Commissioner

Krisna WijayaCommissioner concurrently Independent

Commissioner

Eng Heng Nee PhilipCommissioner

Muliadi RahardjaCommissioner

Willy Suwandi DharmaCommissioner

Yasushi Itagaki *President Commissioner

Notes:

* Yasushi Itagaki will effectively serve as President Commissioner after passing the Fit and Proper Test by the Financial Services Authority


Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


02

Man

ag

em

en

t R

ep

ort

Chapter

STATEMENT OFTHE BOARD OF DIRECTORS

Jakarta, 18 February 2020

Board of Directors

President Director

Ho Lioeng MinDirector

I Dewa Made SusilaDirector

Swandajani GunadiDirector concurrently Independent Director

Niko Kurniawan BonggowarsitoDirector

We, the undersigned, testify that all information contained in the 2019 Annual Report of PT Adira Dinamika Multi Finance Tbk has been presented completely. We assume full responsibility for the content accuracy of the Company’s 2019 Annual Report.

This statement is hereby made in all truthfulness.


CORPORATEDATA

03


Co

rpo

rate

Data

Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


03Chapter

Gigi Hiu BeachLocated in in the Pegadungan Village in Lampung, the Gigi Hiu (shark teeth) Beach features an exotic stretch of rocks. The beautiful scenery of the beach and the relaxing sound

sunrise and sunset.


ContentsCorporate Identity 57Adira Finance at a Glance 60Milestones 64Line of Business 66Products and Services 67ADMF Organizational Structure 68Vision and Mission 702019 Business Strategic 70Corporate Culture and Value 71Meaning of Logo 72Brand and Logo 72Brand Personality 73Shareholder of Affiliates, Subsidiaries, Associates, and Joint Ventures 74Chronology of Stock Listing 77Chronology of Other Securities Listing 81Capital Market Supporting Professional Institutions 83Corporate Website Information 84Management Education and Training 85Board of Commissioners Profile 88Audit Committee Profile 94Risk Management Committee Profile 96Nomination and Remuneration Committee Profile 98Corporate Governance Committee Profile 100Board of Directors Profile 102Sharia Supervisory Board Profile 107Corporate Secretary Profile 110Head of Internal Unit Profile 111Head of the Compliance Unit Profile 112Senior Officer Profiles 113Testimony 140


Co

rpo

rate

Data

Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


03Chapter

General Information of the Company

Company Name PT Adira Dinamika Multi Finance Tbk

Line of Business Consumer Financing

Date of Establishment 13 November 1990

Change of Name There Were No Changes to the Name of the Company

Legal Basis of Establishment Notarial Deed No. 131 dated 13 November 1990, made before Misahardi Wilamarta, SH, a Notary in Jakarta, and was approved by the Ministry of Justice of the Republic of Indonesia as per Decree No. C2-19.HT.01.01.TH.91 dated 8 January 1991, and was registered in the Office of the Registrar of the South Jakarta District Court under No. 34/Not.1991/PN.JKT.SEL on 14 January 1991, and was announced in Supplement No. 421 of the State Gazzate of the Republic of Indonesia No. 12 dated 8 February 1991.

Authorized Capital 4,000,000,000 shares or equivalent to IDR400 billion

Issued and Fully Paid Up Capital 1,067,500,000 shares or equivalent to IDR106.75 billion

Stock Exchange PT Bursa Efek Indonesia

Registration of Shares 31 March 2004

Stock Code ADMF

ISIN Code IDA0000930D4

2019 Shareholders Composition

Full Address Gedung Millennium Centennial Center, 53-61st floorJl. Jend. Sudirman Kav. 25, Jakarta Selatan 12920IndonesiaTelp. : (62-21) 3973-3322/3232Faks. : (62-21) 3973-4949E-mail : [email protected] : www.adira.co.id

Corporate Bond and Sukuk Code

No BondID Bond Name Issuer Code Due Date Rating

1 ADMF03BCN1Adira Finance Continuing Bonds III Phase I Year 2015 Serial B

ADMF 30 Jun 2020 idAAA

2 ADMF03BCN5Adira Finance Continuing Bonds III Phase V Year 2017 Serial B

ADMF 22 Mar 2020 idAAA

3 ADMF03BCN6Adira Finance Continuing Bonds III Phase VI Year 2017 Serial B

ADMF 14 Jul 2020 idAAA

4 ADMF03CCN2Adira Finance Continuing Bonds III Phase II Year 2015 Serial C

ADMF 25 Aug 2020 idAAA

5 ADMF03CCN3Adira Finance Continuing Bonds III Phase III Year 2016 Serial C


6 ADMF03CCN4Adira Finance Continuing Bonds III Phase IV Year 2016 Serial C


7 ADMF03CCN5Adira Finance Continuing Bonds III Phase V Year 2017 Serial C


8 ADMF03CCN6Adira Finance Continuing Bonds III Phase VI Year 2017 Serial C


9 ADMF04ACN5Adira Finance Continuing Bonds IV With Fixed Interest Rate Phase V Year 2019 Serial A

ADMF 26 Apr 2020 idAAA

10 ADMF04ACN6Adira Finance Continuing Bonds IV with Fixed Interest Rate Phase VI Year 2019 Serial A

ADMF 14 Oct 2020 idAAA

11 ADMF04BCN1Adira Finance Continuing Bonds IV Phase I Year 2017 Serial B

ADMF 12 Dec 2020 idAAA

CorporateIdentity


No BondID Bond Name Issuer Code Due Date Rating

12 ADMF04BCN2Adira Finance Continuing Bonds IV Phase II Year 2018 Serial B


13 ADMF04BCN3Adira Finance Continuing Bonds IV Phase III Year 2018 Serial B

ADMF 16 Ags 2020 idAAA

14 ADMF04BCN4Adira Finance Continuing Bonds IV With Fixed Interest Rate Phase IV Year 2019 Serial B

ADMF 23 Jan 2022 idAAA

15 ADMF04BCN5Adira Finance Continuing Bonds IV With Fixed Interest Rate Phase V Year 2019 Serial B


16 ADMF04BCN6Adira Finance Continuing Bonds IV with Fixed Interest Rate Phase VI Year 2019 Serial B


17 ADMF04CCN1Adira Finance Continuing Bonds IV Phase I Year 2017 Serial C

ADMF 12 Dec 2022 idAAA

18 ADMF04CCN2Adira Finance Continuing Bonds IV Phase II Year 2018 Serial C


19 ADMF04CCN3Adira Finance Continuing Bonds IV Phase III Year 2018 Serial C


20 ADMF04CCN4Adira Finance Continuing Bonds IV With Fixed Interest Rate Phase IV Year 2019 Serial C

ADMF 23 Jan 2024 idAAA

21 ADMF04CCN5Adira Finance Continuing Bonds IV With Fixed Interest Rate Phase V Year 2019 Serial C


22 ADMF04CCN6Adira Finance Continuing Bonds IV with Fixed Interest Rate Phase VI Year 2019 Serial C


23 ADMF04DCN2Adira Finance Continuing Bonds IV Phase II Year 2018 Serial D


24 ADMF04DCN3Adira Finance Continuing Bonds IV Phase III Year 2018 Serial D


25 ADMF04ECN3Adira Finance Continuing Bonds IV Phase III Year 2018 Serial E


26 SMADMF02BCN3Adira Finance Continuing Mudharabah Bonds II Phase III Year 2017 Serial B

ADMF 22 Mar 2020 idAAA(sy)

27 SMADMF02CCN2Adira Finance Continuing Mudharabah Bonds II Phase II Year 2016 Serial C

ADMF 26 Jul 2021 idAAA(sy)

28 SMADMF02CCN3Adira Finance Continuing Mudharabah Bonds II Phase III Year 2017 Serial C


29 SMADMF03ACN4Adira Finance Continuing Mudharabah Bonds III Phase IV Year 2019 Serial A

ADMF 26 Apr 2020 idAAA(sy)

30 SMADMF03BCN1Adira Finance Continuing Mudharabah Bonds III Phase I Year 2017 Serial B

ADMF 12 Des 2020 idAAA(sy)

31 SMADMF03BCN2Adira Finance Continuing Mudharabah Bonds III Phase II Year 2018 Serial B


32 SMADMF03BCN3Adira Finance Continuing Mudharabah Bonds III Phase III Year 2019 Serial B

ADMF 23 Jan 2022 idAAA(sy)

33 SMADMF03BCN4Adira Finance Continuing Mudharabah Bonds III Phase IV Year 2019 Serial B


34 SMADMF03CCN1Adira Finance Continuing Mudharabah Bonds III Phase I Year 2017 Serial C

ADMF 12 Dec 2022 idAAA(sy)

35 SMADMF03CCN2Adira Finance Continuing Mudharabah Bonds III Phase II Year 2018 Serial C


36 SMADMF03CCN3Adira Finance Continuing Mudharabah Bonds III Phase III Year 2019 Serial C

ADMF 23 Jan 2024 idAAA(sy)

37 SMADMF03CCN4Adira Finance Continuing Mudharabah Bonds III Phase IV Year 2019 Serial C


Corporate Identity


Co

rpo

rate

Data

Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


03Chapter

History of the Company’s Debt Securities and Sukuk Mudharabah Issuance

Debt Securities and Sukuk Mudharabah Letter NumberAmount

Interest Payment Schedule

Adira Dinamika Multi Finance Bonds I Year 2003 23 April 2003 No. S-839/PM/2003 500,000 Quarterly

Adira Dinamika Multi Finance Bonds II Year 2006 24 May 2006 No. S-137/BL/2006 750,000 Quarterly

Adira Dinamika Multi Finance Bonds III Year 2009 4 May 2009 No. S-3485/BL/2009 500,000 Quarterly

Adira Dinamika Multi Finance Bonds IV Year 2010 21 October 2010 No. S-9564/BL/2010 2,000,000 Quarterly

Adira Dinamika Multi Finance Bonds V Year 2011 18 May 2011 No. S-5474/BL/2011 2,500,000 Quarterly

Adira Dinamika Multi Finance Medium-Term Notes I Year 2011

- - 400,000 Quarterly

Adira Dinamika Multi Finance Continuing Bonds I with Fixed Interest Rate Phase I Year 2011

9 December 2011 No. S-13197/BL/2011 2,523,000 Quarterly

Adira Dinamika Multi Finance Continuing Bonds I with Fixed Interest Rate Phase II Year 2012


Adira Dinamika Multi Finance Continuing Bonds I with Fixed Interest Rate Phase III Year 2012


Adira Finance Continuing Bonds II Phase I Year 2013 21 February 2013 No. S-37/D.04/2013 2,000,000 Quarterly

Adira Finance Continuing Bonds II Phase II Year 2013 21 February 2013 No. S-37/D.04/2013 2,092,000 Quarterly

Adira Finance Continuing Bonds II Phase III Year 2014 21 February 2013 No. S-37/D.04/2013 1,500,000 Quarterly

Adira Finance Continuing Bonds II Phase IV Year 2014 21 February 2013 No. S-37/D.04/2013 1,503,000 Quarterly

Adira Finance Continuing Bonds III Phase I Year 2015 25 June 2015 No. S-279/D.04/2015 979,000 Quarterly

Adira Finance Continuing Bonds III Phase II Year 2015 25 June 2015 No. S-279/D.04/2015 1,437,000 Quarterly

Adira Finance Continuing Bonds III Phase III Year 2016 25 June 2015 No. S-279/D.04/2015 1,101,000 Quarterly

Adira Finance Continuing Bonds III Phase IV Year 2016 25 June 2015 No. S-279/D.04/2015 1,700,000 Quarterly

Adira Finance Continuing Bonds III Phase V Year 2017 25 June 2015 No. S-279/D.04/2015 2,014,000 Quarterly

Adira Finance Continuing Bonds III Phase VI Year 2017 25 June 2015 No. S-279/D.04/2015 769,000 Quarterly

Adira Finance Continuing Bonds IV Phase I Year 2017 4 December 2017 No. S-458/D.04/2017 1,300,000 Quarterly

Adira Finance Continuing Bonds IV Phase II Year 2018 4 December 2017 No. S-458/D.04/2017 1,630,000 Quarterly

Adira Finance Continuing Bonds IV Phase III Year 2018 4 December 2017 No. S-458/D.04/2017 2,260,000 Quarterly

Adira Finance Continuing Bonds IV Phase IV Year 2018 4 December 2017 No. S-458/D.04/2017 618,000 Quarterly

Adira Finance Continuing Bonds IV Phase V Year 2019 4 December 2017 No. S-458/D.04/2017 2,000,000 Quarterly

Adira Finance Continuing Bonds IV Phase VI Year 2019 4 December 2017 No. S-458/D.04/2017 1,192,000 Quarterly

Adira Finance Continuing Sukuk Mudharabah I Phase I Year 2013

21 February 2013 No. S-37/D.04/2013 379,000 Quarterly

Adira Finance Continuing Sukuk Mudharabah I Phase II Year 2014

21 February 2013 No. S-37/D.04/2013 133,000 Quarterly

Adira Finance Continuing Sukuk Mudharabah II Phase I Year 2015

25 June 2015 No. S-279/D.04/2015 500,000 Quarterly

Adira Finance Continuing Sukuk Mudharabah II Phase II Year 2016


Adira Finance Continuing Sukuk Mudharabah II Phase III Year 2017


Adira Finance Continuing Sukuk Mudharabah III Phase I Year 2017

4 December 2017 No. S-458/D.04/2017 200,000 Quarterly

Adira Finance Continuing Sukuk Mudharabah III Phase II Year 2018


Adira Finance Continuing Sukuk Mudharabah III Phase III Year 2018


Adira Finance Continuing Sukuk Mudharabah III Phase IV Year 2019



BRIEF HISTORY

PT ADIRA DINAMIKA MULTI FINANCE TBK OR

ADIRA FINANCE (COMPANY) WAS ESTABLISHED

IN 1990 AND BEGAN ITS OPERATIONS IN 1991.

THE COMPANY IS ENGAGED IN THE CONSUMER-

FINANCING SECTOR PROVIDING SERVICES FOR

THE FINANCING OF MOTORCYCLES AND CARS,

BOTH NEW AND USED. SINCE OUR ESTABLISHMENT

ADIRA FINANCE HAS BEEN FULLY COMMITTED TO

PROVIDING THE BEST POSSIBLE PRODUCTS IN THE

FINANCING SECTOR.

ADIRA FINANCEat a Glance


Co

rpo

rate

Data

Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


03Chapter


out business transformation and service innovation in meeting market demands. To that end, Adira Finance has a digital-based service in order to meet the needs of consumers in conducting transactions with the convenience of services that are more practical, fast, precise and efficient through the application of internet-based consumer services, namely AdiraKu.

Information on Amendment to the Articles of AssociationThe Articles of Association of the Company had been fully amended as recorded in the Deed of the Shareholders Resolution of PT Adira Dinamika Multi Finance No.13 dated 26 January 2004, made before Fathiah Helmi, S.H., a Notary in Jakarta, which has been approved by the Ministry of Justice and Human Rights of the Republic of Indonesia as per Decree No. C-02207 HT 01.04 TH 2004 dated 29 January 2004 and has been reported to the same Minister as stated in the Reception Letter of the Deed of Amendment of the Articles of Association of PT Adira Dinamika Multi Finance Tbk No. C-02208 HT 01.04 TH 2004 dated 29 January 2004, as well as been registered on 6 February 2004 in the Companies List of The Department of Industry and Trade of South Jakarta as the Company Registration Office in District level with Registration Agenda No. 112 RUB.09.03/II/2004 and Company Registration Certificates No. TDP 09.03.1.66.10384, and was announced in Supplement No. 1990 of the State Gazette of the Republic of Indonesia No. 16 dated 24 February 2004.

In regards to the Initial Public Offering in 2004, the Company obtained the effective statement from the Chairman of Capital Market Supervisory Agency through the Letter No. S-657/PM/2004 dated 23 March 2004 to hold the Public Offering for 100,000,000 (one hundred million) shares with a par value of IDR100 (one hundred Rupah) per share, owned by the shareholders of the Company at that time (divestment shares). On 31 March 2004, all the Company’s shares were already listed in the Stock Exchange (formerly Jakarta Stock Exchange and Surabaya Stock Exchange). Furthermore, in the same year, PT Bank Danamon Indonesia Tbk (Bank Danamon) took over 750,000

Company’s total shares through direct placement based on a Conditional Sale and Purchase Agreement (CSPA) between Theodore Permadi Rachmat and

PT Adira Dinamika Multi Finance Tbk or Adira Finance (Company) was established in 1990 and began its operations in 1991. The Company was established based on the Deed of Establishment No. 131 dated 13 November 1990, made before Misahardi Wilamarta, S.H, Notary in Jakarta, was approved by the Ministry of Justice of the Republic of Indonesia in its Decision Letter No. C2-19.HT.01.01.TH.91 dated 8 January 1991, and registered in the register for that purpose in the Registrar’s Office of the South Jakarta District Court under No. 34/Not.1991/PN.JKT.SEL dated 14 January 1991, and was published in Supplement No. 421 to the State Gazette of the Republic of Indonesia No. 12 dated 8 February 1991. The Company obtained its license to operate as a Financing Institution from the Ministry of Finance based on Decision Letter of the Ministry of Finance of the Republic of Indonesia No. 253/KMK.013/1991 dated 4 March 1991.

Since its establishment Adira Finance has been committed to be the best and leading financing company in Indonesia. Adira Finance is always present for all consumers to serve a variety of financing for various brands of motorcycles and cars, both new and used.

In 2012, the Company increased its scope of activities with Sharia principle-based financing. The Company also began providing durables goods financing products for consumers, in order to provide a complete financing services experience.

Adira Finance always strives to contribute positively to Indonesia. Through the brand identity and promise “Sahabat Setia Selamanya” (Faithful Friends Forever), Adira Finance is committed to carrying out the mission that ultimately will improve the welfare of the Indonesian people. This is performed through the provision of diverse range of products and services in accordance with the life cycle of consumers as well as providing experiences that benefit consumers.

As of 2019, Adira Finance managed to own and operate 413 branches throughout Indonesia, of which 40 branch offices have licenses as Sharia Unit Branch Offices, also supported by more than 17 thousand employees, to serve 2.9 million customers with the amount of managed receivables is more than IDR54.8 trillion. In addition, the Company also continues to carry

Adira Finance at a Glance


Co

rpo

rate

Data

Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


03Chapter

Stanley Setia Atmadja as seller and Bank Danamon as buyer on 26 January 2004. In 2009, Bank Danamon

of shares owned by Mega Value Profits Limited. In early 2016, Bank Danamon released 29.2 million shares or

Company’s shares. The Articles of Association of the Company have been amended several times, the most recent amendment was recorded in the Deed of Meeting Resolution of PT Adira Dinamika Multi Finance Tbk No.19 dated 21 May 2015, made before Pahala Sutrisno Amijoyo Tampubolon, S.H., a Notary in Jakarta, and have (i) obtain approval from the Ministry of Law and Human Rights of the Republic of Indonesia based on the Decree No. AHU-0935663 AH. 01.02 of 2015 dated 22 May 2015, (ii) been submitted and accepted by Director General of General Law Administration of the Department of Law and Human Rights of the Republic of Indonesia and recorded on 22 May 2015 in the Database of Legal Entity Administration System through the Reception Letter of the Deed of Amendment of the Articles of Association No. AHU.AH.01.03-0933929; and (iii) been registered in the Companies List No. AHU-3508102.AH.01.11 of 2015 dated 22 May 2015 by the Ministry of Law and Human Rights of the Republic of Indonesia, according to Extra-Ordinary GMS of the Company that was held on 21 May 2015, approving:

1. Amendment of several articles in the Articles of Association of the Company, as an adjustment to the Indonesian Financial Services Authority Regulation and entering into force on the date of the publication of the approval letter of the amendment of the Articles of Association of the Company and from the date of the reception letter of the amendment of the Articles of Association from the Ministry of Law and Human Rights of the Republic of Indonesia as reffered in article 23 paragraph 1 and paragraph 2 of the Law of Limited Liability Companies, namely: Article 3, Article 11 paragraph 5, Article 12 paragraph 9, Article 13 paragraph 11, Article 14 paragraph 6, Article Article 15 paragraph 4, Article 15 paragraph 7, Article 15 paragraph 9, Article 16 paragraph 11, Article 17 paragraph 3 letter a, Article 21, Article 22, Article 23, Article 24, Article 25 paragraph 2, Article 25 paragraph 5, Article 27 paragraph 6, Article 28 paragraph 1, Article 29 paragraph 7, and Article 29 paragraph 8.

2. Reaffirmed all the articles and paragraphs in the Articles of Association that were unchanged in the meeting and that have been in effect since the publication of the approval letter of the amendment of the Articles of Association of the Company and since the date of the reception letter of the amendment of the Articles of Association according to article 23 paragraph (1) and paragraph (2) of the Law of Limited Liability Companies.dan ayat 2 UUPT.


1990 The Company was established in 1990 and commenced operations in 1991

2003 Managed receivables amounting to IDR3.9

the business networks

2008 Net income exceeded IDR1 trillion, the highest

Business networks doubled within 5 years to 300 outlets.

2010 Total managed receivables amounted to IDR30.8 trillion. Receivables in the car segment achieved IDR10 trillion, or the equivalent to 33% of the total assets.

2012 Total managed receivables amounted to IDR45.8 trillion. Asset composition for the motorcycle - car segment was 56% - 44%.

2004 Acquisition by Bank Danamon Indonesia at 75%.

2009 PT Bank Danamon Indonesia Tbk increased ADMF ownership from 75% to 95%. 2011

Processing Continuous Bonds I amounting to IDR6 trillion.

2013 Total managed receivables amounted to

amounted to IDR1.7 trillion.

MILESTONES


Co

rpo

rate

Data

Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


03Chapter

2016 disbursements amounted to IDR30.9 trillion and

2017 disbursements amounted to IDR32.7

achieved IDR1.4 trillion.

2018 Financing disbursements amounted to IDR38.2

achieved IDR1.8 trillion.

2019 amounted to IDR37.9 trillion

IDR2.1 trillion.


BUSINESS ACTIVITIES TO MOST RECENT ARTICLES OF ASSOCIATION AND BUSINESS ACTIVITIES IN FISCAL YEARPursuant to the latest Articles of Association of the Company, stated in Deed No. 19 dated 21 May 2017, made before Pahala Sutrisno Amijoyo Tampubolon, S.H., a Notary in Jakarta, was approved by the Ministry of Law and Human Right of the Republic of Indonesia based on Decision Letter No. AHU-0935663 AH. 01.02, 2015 dated 22 May 2015, was reported to the Indonesian Financial Services Authority (OJK) on 8 June 2015 and registered by the OJK on 7 January 2016, the Company’s purposes and objectives are to engage as (i) a Financing Company and (ii) Sharia Financing Company in the form of Sharia Business Unit. In order to achieve those purposes and objectives, the Company may perform the following business activities:

1. Investment financing;2. Working capital financing;3. Multipurpose financing;4. Other financing businesses subject to the approval of the Financial Services Authority;5. Operating lease and/or fee based activities, insofar as they are not in conflict with the laws and regulations

of the financial service sector

1. Sale and purchase financing;2. Investment financing; and3. Services financing.

Through to the end of 2019, the Company has engaged in business activities pursuant to the abovestated most recent amendment to the Articles of Association.

LINE OF BUSINESS


Co

rpo

rate

Data

Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


03Chapter

Adira Finance is a leading finance company in Indonesia that offers convenience for all customers to own motor vehicles (new and used), durables products, and other demands with easy financing requirements, long tenor, provision of 1500 511 Dering Adira information services, service network in more than 400 business networks throughout Indonesia, as well as a secure BPKB (car title) storage system. In addition, Adira Finance also offers two financing systems that can be selected by customers (conventional and sharia). All of these enable Adira Finance to always be present by providing diverse products and services in accordance with the various stages of life of the consumers and providing a beneficial experience for all of its friends.

Adira Finance offers products and services in order to meet customer needs:

PRODUCTS AND SERVICES


ADMF ORGANIZATIONAL STRUCTURE

Chief

Head of Operation & CREM

Suang Siang Susanto

Head of Corporate Planning &

Procurement

Mendrofa

Head of Credit

& CollectionDenny Riza

Farib

Head of KedayVacant

Head of Operation Support

Miranti Hidajat

Head of Collection

Henrick Kusno Sujarwadi

Head of Procurement

Didik Sukarmadi

Head of Operation Risk ManagementAchmad Komara

Head of Risk Analytic & MIS

Pramono Pranoto

Head of Accounting & Tax

Lindawati Soetopo

Head of National

Fleet SalesAgus Hamid Arief

Head of SNDSystem SolutionVacant

Head of SyariahYusron

Head of National Non

Dealer Channel, Retention &

DurableAntonius Danny

Hendarko

Chief of Portfolio Sales

Harry Latif

Chief of Sales, Service &

DistributionNiko Kurniawan Bonggowarsito

Chief of Business Aliance Strategy

Vacant

Chief of Operation

Ho Lioeng Min

Chief of Financial

I Dewa Made Susila

Chief of Risk

Ho Lioeng Min

Head of Retail Mcy Financing

Andy Sutanto

Head of National Used

NmcySugianto

Head of Dealer ManagementRudy Widjaja

Head of National Suzuki & Multibrand Nmcy

Vacant

Head of SSD Support

Head of National

Honda NmcyChandra

Hermanto

Head of SSDManagement

Head of Load &Asset recovery

Riyantono

Head of legal Ingrid

Setiadharma

Head of Finance & Cash

ManagementMaria Sari Dewi

Kusuma

Head of Corp Secretary &

Investor RelationPerry Barman

Slangor

Head of Funding and Capital Market

Perry Barman Slangor

Head of Quality Assurance

Ingrid Sri Komala Dewi

Head of Regional SSD

Suwanto, Insan Anshari,

Sugeng Hariadi,Krisdianto, Irfan

Budianto

Head of National New

Car 1Dwi Prasetiyo

Head of Business Aliance Strategy

Vacant

Head of National

Yamaha NmcyTrianto Subekti

Head of Non Dealer Channel

& RetentionVacant

Head of National New

Car 2Andy Teguh

Head of Credit

Sjarifuddin

Head of Credit

Hendarto Nugroho

Head of Corporate Finance

Santo Linarso

Head of National Used Car

Ronald Donna


Co

rpo

rate

Data

Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


03Chapter

Chief of ITDodi Yuliarso

Soewandi

Head of Digital Center of

ExcellenceManuel D.

Irwanputera

Head of IT Control

& ComplianceBien Constan

Chief of Strategy &

Transformation

I Dewa Made Susila

Chief of HC Mangement &

Swandajani Gunadi

Chief of

Swandajani Gunadi

Head of HCGA

Chief of Operation& CREM

Suang Siang Susanto

Head of CREM

Head of ITInfrastructure Management

Ricky Mas Basuardi

Head of IT Operation

ManagementTantri Hariadi

Head of IT Business

ApplicationsBudi Pranoto

Head of Digital Business Non Automotive

Head of IT Enterprise & Frontend

Applications

Head of Digital & Frontend Application

Head of Digital Product &

EngineeringIyan Waer

Head of Central Change

ManagementVacant

Head of Transformation Mgt & SupportGale Sumara

Sulaiman

Head of IT Business Support

Edy Salim

Head of Digital Business

Automotive

Head of Business Analytic

Andreas Burhan Tasmaan

Head of Brand & Communication

Wirdati Handayani

Head of Marketing Strategy & Customer

ExperienceTania Endah

Budhi

Head of Corporate University

W.

Head of Compliance &

AML UnitAndreas Dwi Kurniawan

Head of Internal Audit

Haryadwi Saputra Kartawidjaja


Vision

Mission

Creating shared value to improve wellfare

Providing various financial solutions according to customer needs through synergy with the ecosystem.

2019 Business

Strategic1. Increase sales in all financing segments by implementing the Customer

Relationship Management (CRM) system and sales programs that directly target consumers;

2. Focus on customer satisfaction, by developing a digital order process and reorganizing the acquisition process, which will optimize risk managementand speed of processes;

3. Improve and establish good relations with all existing marketing channels by offering marketing campaigns and other programs to increase market share;

4. Increase capacity and productivity in profitable business segments and have large markets, such as the segment of multipurpose financing, used vehicles financing, and others;

5. Continue and increase investment in technology and optimize its utilization in increasing customer acquisition and satisfaction.


Co

rpo

rate

Data

Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


03Chapter

AccountableInforming matters based on factual data; and being objective, wise and transparent.

TeamworkSynergy; Willingness to sacrifice for one another; and never pass the blame to another person.

ObsessedWorking with an appropriate process and being driven by generating the optimal results; High motivation in the form of a willingness to walk the extra mile and demonstrating proactivity; Skill sharpening; and taking care of each other.

ProfessionalCustomer oriented; Reliable leadership skills; Possessing entrepreneurship abilities, capable of calculating risk, being both innovative and creative.

One step ahead and faster compared to other people in general or competitors; Having a clear and focused conception; and Capable of making quick and proper decisions in all circumstances.

DisciplineHeading in a better direction through the process of planning, implementation, oversight, and continuous improvement; Way of thinking and behaving that is as perfect as possible; and Discipline in accordance to the norms of the organization.

IntegrityCommitment along with consistent attitude; Trustworthy (honest and sincere); Able to maintain ethical business conduct; Strong sense of belonging; and Becoming a role model to other employees.

ReliableHaving winner mentality, as reflected with positive thinking and intelligent behavior; and a strong sense of responsibility in all matters.

......ADIRA TOP has become a consistent part of the personal values of each employee at Adira Finance, as well as the culture that drives the Company’s business activities......

Corporate CULTURE AND VALUE


PT Adira Dinamika Multi Finance Tbk has had a new corporate logo and tagline since 2014, “Sahabat Setia Selamanya”. The tagline embodies the Company’s commitment to developing long-term relationships with consumers and business partners.

The new logo embodies its long-term business strategy and commitment believed to support sustainable performance.

Through the new identity, Adira Finance hopes to serving consumers at different stages of their lives, creating a long-term relationship or customer for life. Adira Finance wants the consumers to feel the presence of Adira Finance as a friend that is able to provide solutions, as well as having synergy in the “Sahabat Adira” concept.

The term “Sahabat” (Companion) embodies the Company’s philosophy and what it can offer consumers: cerdaS (intelligence), dipercAya (trustworthiness), ramaH (friendliness), AdirA memBeri kemudahan (convenience), mAu peduli (compassion), dan komiTmen (commitment).

MEANING OF LOGO

BRANDAND LOGO


Co

rpo

rate

Data

Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


03Chapter

IntelligenceAdira Finance is an intelligent companion. It provides solutions and resolves customers’ problems.

TrustworthyAdira Finance is a trustworthy brand. The Company provides its customers with security.

FriendlyAdira Finance is a friendly brand. Both in the internal and external environments. Adira Finance is your best friend.

Adira Finance is simple, Adira Finance makes all things easier. The process is fast and straightforward.

CompassionAdira Finance pays attention to customers’ demands and it cares about their welfare.

CommitmentAdira Finance is committed to providing the best possible services to its customers. The Company is also committed to improving the welfare of the broader Indonesian society by providing products and services that fit the demands of its customers at various stages of their lives as well as providing a beneficial experience to the consumers.

BRANDPERSONALITY


GROUP STRUCTURE

SHAREHOLDER OF AFFILIATES, SUBSIDIARIES, ASSOCIATES, AND JOINT VENTURES

7.93%

5.90%

92.07%

94.10%

Public

Public

PT Bank DanamonIndonesia Tbk

PT Adira DinamikaMulti Finance Tbk

MUFG Bank, Ltd.(Direct & Indirect)


Co

rpo

rate

Data

Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


03Chapter

SHAREHOLDERS COMPOSITION

Major and Controlling ShareholdersPursuant to Decision of the Chairman of the Capital Market and Financial Institution Supervisory Agency No. KEP-431/BL/2012 on the Submission of Annual Report of Issuer and Public Company, shareholders with more than

shareholder of the Company since 2004. In details, the following is the shareholders of Adira Finance as of 31 December 2019:

ShareholdersIssued and Fully

Paid CapitalOwnership Percentage

Total (IDR Million)

PT Bank Danamon Indonesia Tbk. 920,700,000 92.07% 92,070,000,000Public 79,300,000 7.93% 7,930,000,000Total 1,000,000,000 100% 100,000,000,000

The following is shareholders based on classification as of 31 December 2019:

Number of Shareholders

Number of Shares Percentage

Foreign 60 30,290,100 3.03Local 1,323 969,709,900 96.97Total 1,383 1,000,000,000 100

Number of Shareholders

Number of Shares Percentage

Institution 19 941,397,049 94.14Individual 1,364 58,602,951 5.86Total 1,383 1,000,000,000 100

Share Ownership of the Board of Commissioners and Board of DirectorsAs of 31 December 2019, the Board of Commissioners and Directors did not own shares in the Company, as stated in the following table:

Share Ownership of the Board of Commissioners

No. Name Position Issued and Fully Paid

Capital

Ownership Percentage

Total (IDR Million)

1. Yasushi Itagaki (* President Commissioner 0 0 0

2. Djoko Sudyatmiko Commissioner concurrently Independent Commissioner 0 0 0

3. Krisna Wijaya Commissioner concurrently Independent Commissioner 0 0 0

4. Eng Heng Nee Philip Commissioner 0 0 05. Muliadi Rahardja Commissioner 0 0 06. Willy Suwandi Dharma Commissioner 0 0 0

(* effectively still waiting for the results of the fit and proper test from Financial Services Authority (OJK)

Share Ownership of the Board of Directors

No. Name PositionIssued and Fully Paid

Capital

Ownership Percentage

Total (IDR Million)

1. President Director 0 0 02. Ho Lioeng Min Director 0 0 03. I Dewa Made Susila Director 0 0 04. Swandajani Gunadi Director concurrently Independent Director 0 0 0

5. Niko Kurniawan Bonggowarsito Director 0 0 0


PT Bank Danamon Indonesia Tbk

PT Bank Danamon Indonesia, Tbk. (“Danamon”) was established in 1956. Currently, Danamon has grown to become one of the largest financial institutions in Indonesia, managing assets of more than IDR194 trillion with its subsidiaries. In 2019, Danamon shares

With the vision “We Care and Enable Millions to Prosper”, Danamon serves all customer segments ranging from Consumer, Commercial, including Small and Medium Enterprises, Micro customers, as well as large Enterprises (Commercial and Corporate), with a comprehensive range of banking and financial products and services, including Sharia banking services. In addition, Danamon also provides automotive financing and consumer goods through Adira Finance.

Danamon operates an extensive distribution network from Aceh to Papua supported by around 960 conventional branch offices, Sharia units and Adira Finance branch networks. Danamon’s distribution network is also supported by an e-channel platform, which includes a network of 1,345 ATM networks and Danamon’s Cash Deposit Machine and access

to ATMs in the ATM Bersama, ALTO, and Prima networks spread across 34 provinces. In addition to physical networks, Danamon’s services can also be accessed through Danamon Online Banking, D-Bank application, D-Card, and SMS Banking with capability features that continue to be improved in accordance with the demands of banking service users in the digital age who prioritizes ease and speed of transactions. Through the single captainship concept of branch network structure, Danamon is able to provide integrated product offerings, improving the quality of service to customers.

PT Adira Quantum Multifinance or Adira Kredit, is one of the leading multifinance companies in Indonesia that is engaging in the financing of consumer goods, such as electronics, computers, furniture, and household appliances. Adira Kredit is currently still in the process of liquidation and its business license has been revoked by the Financial Services Authority (OJK) in accordance with the Decree of OJK Board of Commissioners No. KEP-103/D.05/2017 dated 21 December 2017.

Subsidiaries, Associates, and Joint VenturesUp to 31 December 2019, the Company has no Subsidiary, Associate, or Joint Venture Entities.

Shareholder of Affiliates, Subsidiaries, Associates, and Joint Ventures


Co

rpo

rate

Data

Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


03Chapter

Based on the Deed of the Decision of All Shareholders of PT Adira Dinamika Multi Finance No. 13 dated 26 January 2004, which was made before Fathiah Helmi, SH, a Notary in Jakarta, which was approved and reported to the Minister of Justice and Human Rights of the Republic of Indonesia, the Company’s shareholders approved the following on 26 January 2004, among others approving the following: (i) increase the Company’s authorized capital from an initial amount of IDR100 billion to IDR400 billion and (ii) change the nominal value of the Company’s shares from IDR1,000 per share to IDR100 per share. Pursuant to the Deed No. 13/2004, the Company’s shareholders on 26 January 2004 among others also approved the sale of shares owned by Theodore Permadi Rachmat equivalent

Furthermore, pursuant to the Conditional Sale and Purchase Agreement (“CSPA”) dated 26 January 2004, which was made between Theodore Permadi Rachmat and Stanley Setia Atmadja, both as the sellers, and PT Bank Danamon Indonesia Tbk (Bank Danamon Indonesia), as the buyer, immediately after the Company’s shares were listed on the JSX and SSX (Company Listing) and fulfillment of the agreed upon conditions between the sellers and the buyer (including the approval of Bank Indonesia for the buyers), the sellers transfered the remaining portion of

for, to the buyer through a Direct Placement mechanism outside of the stock exchange. The estimated value of these transferred shares in accordance with the CSPA amounted to IDR850 billion.

The Company carried out an Initial Public Offering in March 2004 of 100,000,000 shares owned by the Company’s

BES Announcement No. JKT-343/LIST-PENG/BES/III/2004 dated 29 March 2004, which refered to the Company Letter No. 071/ADMF/CS/III/04 dated 25 March 2004 regarding Initial Shares Listing and BES Letter No.JKT-028/LIST-EMITEN/BES/III/2004 dated 29 March 2004 regarding the Approval for the Initial Shares Listing of PT Adira Dinamika Multi Finance Tbk, the number of shares listed in the Company’s Initial Public Offering on 31 March 2004, and shareholder composition as well as shareholding in the Company is as follows:

Description Number of SharesNominal Value (IDR Thousand)

%

Authorized Capital 4,000,000,000 400,000,000Issued and Fully Paid Capital- Theodore Permadi Rachmat 810,000,000 81,000,000 81.0- Stanley Setia Atmadja 90,000,000 9,000,000 9.0- Public (with respective shareholding below 5%) 100,000,000 10,000,000 10.0Total Issued and Fully Paid Up Capital 1,000,000,000 100,000,000 100.0

Unissued Shares 3,000,000,000 300,000,000

The Company’s shares were registered and offered for the first time to the public on 31 March 2004, listing on the JSX and the SSX (which subsequently merged to become the IDX) under the stock ticker code ADMF in the amount of 100,000,000 shares, with an initial offering price of IDR2,325 per share and a total of 1,000,000,000 shares issued.

CHRONOLOGY OF STOCK LISTING


2004Furthermore, in accordance with SSX Announcement No. JKT-166/LIST-PENG/BES/IV/2004 dated 13 April 2004, which announced the Company’s report based on the Letter No. 080/ADM/CS/IV/04 dated 13 April 2004 regarding Disclosure of Information Relating to the Acquisition of Shares of PT Adira Dinamika Multi Finance Tbk on 9 April 2004, Bank Danamon Indonesia executed a takeover through a Direct Placement mechanism of 750,000,000

Company, from Theodore Permadi Rachmat and Stanley Setia Atmadja based on the CSPA dated 26 January 2004. Thus, the composition of the shareholders and shareholding in the Company was as follows:


%

Authorized Capital 4,000,000,000 400,000,000Issued and Fully Paid Capital- Bank Danamon Indonesia 750,000,000 75,000,000 75.0- Theodore Permadi Rachmat 135,000,000 13,500,000 13.0- Stanley Setia Atmadja 15,000,000 1,500,000 2.0- Public (with respective shareholding below 5%) 100,000,000 10,000,000 10.0Total Issued and Fully Paid Up Capital 1,000,000,000 100,000,000 100.0

Unissued Shares 3,000,000,000 300,000,000

Moreover, pursuant to the SSX Announcement No.JKT 160/LIST-PENG/BES/I/2005 dated 12 January 2005, which published the Company’s report based on Letter No.002/ADMF/CS/I/05 dated 10 January 2005, Mega Value Profits Limited purchased 150,000,000 shares in the Company on 5 October 2004, which was comprised of 135,000,000 shares belonging to Theodore Permadi Rachmat and 15,000,000 shares belonging to Stanley Setia Atmadja as well as purchasing 24,193,500 shares from the public on 5 October 2004. As such, the Company’s shareholders and shareholding composition as of the end of 2004 was as follows:


%

Authorized Capital 4,000,000,000 400,000,000

Issued and Fully Paid Capital

- Bank Danamon Indonesia 750,000,000 75,000,000 75.0

174,193,500 17,419,350,000 17.4

- Public (with respective shareholding below 5%) 75,806,500 7,580,650,000 7.6

Total Issued and Fully Paid Up Capital 1,000,000,000 100,000,000 100.0

Unissued Shares 3,000,000,000 300,000,000

Chronology of Stock Listing


Co

rpo

rate

Data

Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


03Chapter

2009

transactions represented share purchases from the public through the IDX, which led to changes in the Company’s shareholder and ownership composition at the end of the first semester of 2009 as follows:


%

Modal Dasar 4,000,000,000 400,000,000Authorized CapitalIssued and Fully Paid Capital 750,000,000 75,000,000 75.0

200,000,000 20,000,000 20.0- Public (with respective shareholding below 5%) 50,000,000 5,000,000 5.0Total Issued and Fully Paid Up Capital 1,000,000,000 100,000,000 100.0

Unissued Shares 3,000,000,000 300,000,000

an amount equivalent to the 200,000,000 shares owned by Mega Value Profits Limited. With this transaction,

IDR1,614 billion (or IDR8,070 per share) with a call option premium or upfront payment of IDR187 billion. In addition to this, AAD acquired 121,500 shares in the Company from the public through the IDX during the period of June - December 2009, which led to the following changes in the Company’s shareholders and ownership composition:


%

Authorized Capital 4,000,000,000 400,000,000Issued and Fully Paid Capital- Bank Danamon Indonesia 950,000,000 95,000,000 95.0- Public (with respective shareholding below 5%) 50,000,000 5,000,000 5.0Total Issued and Fully Paid Up Capital 1,000,000,000 100,000,000 100.0

Unissued Shares 3,000,000,000 300,000,000


2016

ownership to the public, in order for Adira Finance’s number of free-floats shares to meet the minimum requirement as regulated through the Indonesian Stock Exchange Regulation No. I-A regarding the Listing of Shares and Equity-Type Securities Other Than Shares Issued by Listed Companies. It led to the following changes in the Company’s shareholders and ownership composition:


%

Authorized Capital 4,000,000,000 400,000,000Issued and Fully Paid Capital- Bank Danamon Indonesia 920,700,000 92,070,000 92.1- Public (with respective shareholding below 5%) 79,300,000 7,930,000 7.9Total Issued and Fully Paid Up Capital 1,000,000,000 100,000,000 100.0

Unissued Shares 3,000,000,000 300,000,000

2017 and 2018There were no transactions that changed the structure of the Company’s authorized, issued and fully paid capital, other than the above mentioned and regular transactions of shares trading on the stock exchange throughout 2017 and 2018. Furthermore, members of Adira Finance’s Board of Commissioners and Board of Directors did not own shares in the Company.

2019As of the publication of this 2019 Annual Report, the Company has only issued one type of equity securities as issued and listed on the IDX.

Chronology of Stock Listing


Co

rpo

rate

Data

Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


03Chapter

Adira Finance actively issues bonds as well as sukuk mudharabah as an alternative source of funding for the Company in the Capital Market. Bonds and sukuk mudharabah that are still outstanding from the beginning of the issuance up to the end of 2019 are as follows:

NoName of Bonds/

Mudaharabah Bonds


(IDR Billion)

Interest

Sharing Ratio

Time Period

Bapepam/ OJK

Date


Maturity Date

Coupon/

Sharing Payment

(IDR Billion)


Bonds Rating

1. Adira Finance Continuing Bonds III Phase I

B 238 60 months 25 June 2015

30 June 2020

24 238 idAAA

2. Adira Finance Continuing Bonds III Phase II

C 277 60 months 25 June

2015

25 August 2020

28 277 idAAA

3. Adira Finance Continuing Bonds III Phase III

C 698 60 months 25 June 2015

02 March 2021

71 698 idAAA

4. Adira Finance Continuing Bonds III Phase IV

C 431 60 months 25 June 2015

26 July 2021 40 431 idAAA

5. Adira Finance Continuing Sukuk Mudharabah II Phase II

C 14 (Equivalent

per year)

60 months 25 June

2015

26 July 2021 1 14 idAAA(sy)

6. Adira Finance Continuing Bonds III Phase V

B 860 36 months25 June

2015

22 March 2020

74 860 idAAA

C 241 60 months 21 241 idAAA

7. Adira Finance Continuing Sukuk Mudharabah II Phase III

B 105 (Equivalent

per year)

36 months

25 June 2015

22 March 2020

9 105 idAAA(sy)

C 7 (Equivalent

per year)


1 7 idAAA(sy)

8. Adira Finance Continuing Bonds III Phase VI

B 450 36 months25 June

2015

14 July 2020 36 450 idAAA

C 68 60 months 14 July 2022 6 68 idAAA

9. Adira Finance Continuing Bonds IV Phase I

B 893 36 months

04 December

2017

12 December

2020

67 893 idAAA

C 91 60 months 12 December

2022

7 91 idAAA

10. Adira Finance Continuing Sukuk Mudharabah III Phase I

B 55 (Equivalent

per year)

36 months

04 December

2017

12 December

2020

4 55 idAAA(sy)

C 55 (Equivalent

per year)


2022

4 55 idAAA(sy)

11. Adira Finance Continuing Bonds IV Phase II

B 80 24 months

04 December

2017

21 March 2020

5 80 idAAA

C 552 36 months 21 March 2021

41 552 idAAA

D 162 60 months 21 March 2023

12 162 idAAA

12. Adira Finance Continuing Sukuk Mudharabah III Phase II

B 62 (Equivalent

per year)

36 months

04 December

2017

21 March 2021

5 62 idAAA(sy)

C 29 (Equivalent

per year)


2 29 idAAA(sy)

CHRONOLOGY OF OTHER SECURITIES LISTING


NoName of Bonds/

Mudaharabah Bonds


(IDR Billion)

Interest

Sharing Ratio

Time Period

Bapepam/ OJK

Date


Maturity Date

Coupon/

Sharing Payment

(IDR Billion)


Bonds Rating

13. Adira Finance Continuing Bonds IV Phase III

B 119 24 months

04 December

2017

16 August 2020

10 119 idAAA

C 716 36 months 16 August 2021

61

716 idAAA

D 269 48 months 16 August 2022

24

269 idAAA

E 461 60 months 16 August 2023

43

461 idAAA

14. Adira Finance Continuing Bonds IV Phase IV

A 232 370 days

04 December

2017

3 Februari 2020

14 232 idAAA

B 58 36 months 23 January 2022

4 58 idAAA

C 328 60 months 23 January 2024

23 328 idAAA

15. Adira Finance Continuing Sukuk Mudharabah III Phase III

A 127(Equivalent

per year)

370 days

04 December

2017

3 Februari 2020

8 127 idAAA(sy)

B 55(Equivalent

per year)


4 55 idAAA(sy)

C 32(Equivalent

per year)


2 32 idAAA(sy)

16. Adira Finance Continuing Bonds IV Phase V

A 1.105 370 days

04 December

2017

26 April 2020

43 1,105 idAAA

B 287 36 months 16 April 2022

12 287 idAAA

C 608 60 months 16 April 2024

28 608 idAAA

17. Sukuk Mudharabah Berkelanjutan III Adira Finance Tahap IV

A 72(Equivalent

per year)

370 days

04 December

2017

26 April 2020

3 72 idAAA(sy)

B 10(Equivalent

per year)


0 10 idAAA(sy)

C 14(Equivalent

per year)


1 14 idAAA(sy)

18. Adira Finance Continuing Bonds IV Phase VI

A 299 370 days

04 December

2017

14 October 2020

- 299 idAAA

B 703 36 months 4 October 2022

- 703 idAAA

C 190 60 months 4 October 2024

- 190 idAAA


Chronology of Other Securities Listing


Co

rpo

rate

Data

Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


03Chapter

EXTERNAL AUDITOR

Tanudiredja, Wibisana, Rintis & RekanPlaza 89, Kav. X – 7Jl. HR Rasuna Said No. 08, RT.6/RW.7Karet Kuningan, Kota Jakarta SelatanJakarta 12190 IndonesiaTel: +6221 5212901Fax: +62 21 52905555 / 52905050Website: www.pwc.com/id

SECURITIES ADMINISTRATION AGENCY

PT Adimitra Jasa KorporaKirana Boutique OfficeRukan Kirana Boutique OfficeJl. Kirana Avenue III Blok F3 No. 5Kelapa Gading – Jakarta Utara 14250Tel: +6221 2936 5287/98Fax: +6221 2928 9961Email: [email protected]

RATING AGENCY

PT Pemeringkat Efek Indonesia (PEFINDO)Panin Tower – Senayan City Lantai 17Jl. Asia Afrika Lantai 19Jakarta 10270Telp: (62-21) 72782380Fax: (62-21) 72782370Website: www.pefindo.comE-mail: [email protected]

TRUSTEE

PT Bank Negara Indonesia (Persero) TbkJl. Jend. Sudirman No. Kav 1, RT.10/RW.11Karet Tengsin, Tanah Abang, Kota Jakarta PusatJakarta 10250Telp: +6221 2511218Fax: +6221 2511221Website: www.bni.co.id

NOTARY

Kantor Notaris Fathiah Helmi SHGraha Irama, Lantai 6, Suite CJl. HR Rasuna Said Blok X-1 Kav. 1&2Kuningan, Jakarta Selatan 12950 – IndonesiaTelp: +6221 5290 7304/06Fax: +6221 526 1136Website: notaris-fathiahhelmi.com

CUSTODIAN

PT Kustodian Sentral Efek IndonesiaGedung Bursa Efek Indonesia, Tower 1, Lantai 5Jl. Jend. Sudirman Kav. 52-53,Jakarta Selatan 12190Telp: +6221 515 2855Fax: +6221 5299 1199Bebas Pulsa: 0800 186 5734Website: www.ksei.co.idEmail: [email protected]

CAPITAL MARKET SUPPORTING PROFESSIONAL INSTITUTIONS

REGULAR SERVICES OF CAPITAL MARKET SUPPORTING PROFESSIONAL INSTITUTIONS IN 2019

Supporting ProfessionCommission (fee) in

IDR Million(including tax)

Assignment Period

Public Accounting Office of Tanudiredja, Wibisana, Rintis and Partner

2019 Financial Statements Audit 876.8 2019

PT Adimitra Jasa Korpora Capital Market Administration 27 2019

Perusahaan Pemeringkat Efek Rating Agency 192.5 2019

PT Bank Negara Indonesia (Persero) Tbk Trustee 1,188 2019

Kustodian Sentral Efek Custodian 1,078 2019

Notaris & PPAT Fathiah Helmi, SH Notary 302.5 2019


In the era of the industrial revolution 4.0, the need for access to information is increasingly higher, including information about the Company’s products and services. In order to meet these needs and the implementation of OJK Regulation No.8/POJK.04/2015 on the website of issuers or public companies, the Company provides an official website that can be accessed at www.adira.co.id.

The Company’s website presents two language options, namely Indonesian and English, which have been inaugurated since 2010. Adira Finance constantly updates the content on the Company’s website, in addition to meeting the requirements of the authorities as well as providing information services to all stakeholders.

The Company’s website is made by taking into account the applicable laws and regulations as well as

OJK Regulation No.8/POJK.04/2015 on the Website of Issuers or Public Companies, the Company’s website informs four main parts that must be posted on the Company’s website, namely:1. General Information of Issuer or Public Company:

consists of history and other information regarding the Company; Company Structure, Group and Ownership; as well as profiles of the Board of Commissioners and Directors.

2. Information for Investors: consists of information regarding the General Meeting of Shareholders (GMS); investment report; rating and analyst research results; publication of financial statements; as well as other related matters.

3. Information concerning Corporate Governance: consists of policies for the implementation of Good Corporate Governance principles, and the Company’s policies related to Risk Management.

4. Information regarding Corporate Social Responsibility.

CORPORATE WEBSITE INFORMATION


Co

rpo

rate

Data

Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


03Chapter

Board of Commissioners

Name Type of Training/ Workshop/ Upskilling Date Location Organizer

Yasushi Itagaki (* Indonesia FinTech Forum 2019 4 September 2019 Jakarta Alumni of the Faculty of Economics and Business, Gadjah Mada University

Djoko Sudyatmiko Opportunities and Challenges of the Finance and Leasing Industry in Asia

20 September 2019 Bangkok Indonesian Financial Services Association (APPI)

Krisna Wijaya Opportunities and Challenges of the Finance and Leasing Industry in Asia


Eng Heng Nee Philip Multifinance Indonesia International Seminar: “The Opportunities and Challenges”

6 December 2019 Japan Indonesian Financial Services Association (APPI)

Muliadi Rahardja Opportunities and Challenges of the Finance and Leasing Industry in Asia


Willy Suwandi Dharma Anti Fraud Strategy In Multifinance Industry

21 February 2019 Jakarta Indonesian Financial Services Association (APPI)

(* effectively still waiting for the results of the fit and proper test from Financial Services Authority (OJK)

Board of Directors

Name Type of Training/ Workshop/ Upskilling Venue and Date Location Organizer

Hafid Hadeli

Multifinance Indonesia International Seminar: “The Opportunities andChallenges”


National Seminar: “Financing IndustryAmid Political and Economic Turmoil ”

25 July 2019 Jakarta Indonesian Financial Services Association (APPI)

National Seminar: “Economic Prospects & Credit Growth Post 2019 Elections”

24 April 2019 Jakarta Indonesian Rating Agency (PEFINDO)

Ho Lioeng Min

Seminar “Enforcing the Discipline of Market Actors and How It Is Implemented in the Digital Age”

3-4 October 2019 Yogyakarta Financial Services Authority (OJK)

Seminar “Artificial Intelligence : Implications for Business Strategy”

12 August – 29 September 2019

United Kingdom (online)

MIT Sloan School of Management

Seminar “Cybersecurity for Managers : A Playbook”

24 Juni – 11 August 2019

United Kingdom (online)

MIT Management Executive Education

Seminar “Digital Strategies For Business: Leading The Next - Generation Enterprise”

April 2019 Singapore (online)

Emeritus Institute of Management

National Seminar: “Economic Prospects & Credit Growth Post 2019 Elections”

24 April 2019 Jakarta Pefindo Biro Kredit

International Seminar: “Multifinance : Consumer Protection, Risk Management and Fraud Early Warning System in Digital Era”

26 April 2019 Bali Indonesian Financial Services Association (APPI)

NICF - Introdution to Blockchain & DLT for Executive (SF)

8 April 2019 Singapore National University of Singapore

“Leveraging FinTech for Business”23 – 25 January

2019Singapore National University of

Singapore

I Dewa Made Susila

Seminar “PwC’s FinTech Lending in Indonesia Study: Driving Economic Growth Through Financial Inclusion”

27 June 2019 Jakarta PwC

Seminar “Global and Asia FX Outlook: Global Macro Strategy Trade Tension 2.0”

16 May 2019 Jakarta UBS AG Singapore Branch

Seminar “Building Personal Brand” 15 May 2019 Jakarta MarkPlus Institute Corporate

Attended Refreshment Programme Bagi Tim Penilai Kemampuan dan Kepatuhan Pihak Utama Industri Keuangan Non Bank

4 March 2019 Jakarta Financial Services Authority

MANAGEMENT EDUCATION AND TRAINING


Name Type of Training/ Workshop/ Upskilling Venue and Date Location Organizer

Swandajani Gunadi

National Seminar “Opportunities and Challenges in 2020”

26 November 2019 Jakarta Indonesian Financial Services Association (APPI)

Seminar "Opportunities and Challenges of the Finance and Leasing Industry in Asia"


Silicon Valley Immersion Program “Leading Digital Transformation Program”

8 – 12 April 2019 USA Silicon Valley Innovation Center

Niko Kurniawan Bonggowarsito

“Socialization of the FSA’s decision No. 15/SEOJK/2019 concerning Revaluation of Main Parties of Non-Bank Financial Services Institutions “

13 August 2019 Jakarta Financial Services Authority (OJK)

Seminar Internasional “Multifinance : Consumer Protection, Risk Management and Fraud Early Warning System in Digital Era”

26 April 2019 Bali Indonesian Financial Services Association (APPI)

Audit Committee


Krisna Wijaya Opportunities and Challenges of the Finance and Leasing Industry in Asia


Richard Steven Dompas

Metode Asesmen dan Banking Competencies Fit in Digital Era

4 March 2019 Jakarta Banking Professional Certification Institute

Refreshment Metodologi bagi Asesmen bagi Asesor

13-14 August 2019 Jakarta National Professional Certification Board

Christine Tjen Risk Governance Master Class 4 December 2019 Jakarta Center for Risk Manaqement Studies (CRMS)

Risk Management Committee


Eng Heng Nee Philip Seminar Internasional Multifinance Indonesia: The Opportunities and Challenges




Muliadi Rahardja Opportunities and Challenges of the Finance and Leasing Industry in Asia


Management Education and Training


Co

rpo

rate

Data

Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


03Chapter

Nomination and Remuneration Committee




Eng Heng Nee Philip Seminar Internasional Multifinance Indonesia: The Opportunities and Challenges


Willy Suwandi Dharma Anti Fraud Strategy In Multifinance Industry

21 February 2019 Jakarta Indonesian Financial Services Association (APPI)




Diyah Sasanti Curator Training and Management in 2019 (Batch V)

29 July - 10 August 2019

Jakarta Indonesian Curator and Management Association

Internal Audit


Haryadwi Saputra Kartawidjaja

Refresher LSPP : Strengthening Credit Risk Management

November 2019 Jakarta LSPP

Legal and Practical Pitfalls in Internal Investigation

November 2019 Jakarta KPMG


Board of Commissioners Profile

Yasushi Itagaki (* Commissioner concurrently Independent Commissioner

Citizenship Japan

Age | Place & Date of Birth Age 56 years on per 31 December 2019 | Osaka, 24 May 1964

Educational Background Bachelor of Law - University of Kyoto (1987)

History of Position

- Legal Basis of Appointment Appointed as President Commissioner of the Company for the first time on 24 October 2019 according to the Extraordinary GMS Decision however, it will only become effective after it has been passed the OJK’s fit and proper test.

- Work Experience 1. President Director of PT Bank Danamon Indonesia Tbk (2019-now)2. Director of PT Bank Danamon Indonesia Tbk (2018-2019)3. Various Senior Positions of The Bank of Tokyo Mitshubishi UFJ Ltd (2010-2018)4. Join the Bank of Tokyo, Ltd. branch of Marunouchi (1987)

Education or Training for

Competency Improvement

- Indonesia Fintech Forum: Alumni of the Faculty of Economics and Business, Gadjah Mada University (2019)

- Macquarie ASEAN Conference: Macquaries (2019)- JP Morgan Asean Banks Forum: JP Morgan (2019)- Cyber Security Incident Response in Table Top Exercise: Information Risk Management – Bank

Danamon Indonesia (2019)- Changing World of Marketing in the Digital Age “How can we Learn from Disruptors?”: IMDSE Pte

Asia Ltd (2019)- Ethics Code: Bank Danamon Indonesia (2019)- APU PPT: Costumer Due Diligence (2019)- MUFG Global Partnership Conference: MUFG (2018)- MUFG Global Advisory Board: MUFG (2018)- Danamon Digital Road Map: Deloitte (2018)- Risk Management Certification: Banking Professional Certification Institute/LSPP (2018)- Preparation for Risk Management Certification: Bankers Association for Risk Management (2018)- Bahasa Indonesia: PT Interlingua Sarana Corpora (2018

Certification Basic Financing Certificaition, PT. Sertifikasi Profesi Pembiayaan Indonesia, 2015

Affiliated Relationship He has no affiliation to any other members of the Board of Directors and/or the Board of Commissioners. A President Director of PT Bank Danamon Indonesia, Tbk.

Domicile Jakarta

ADMF Share Ownership 0 shares(* effectively served still waiting for the results of the fit and proper test of the Financial Services Authoriity (OJK)


Co

rpo

rate

Data

Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


03Chapter

Djoko Sudyatmiko Commissioner concurrent Independent Commissioner

Citizenship Indonesia

Age | Place & Date of Birth 76 tahun years old per 31 December 2019 | Pati, 6 April 1944

Educational Background Baccalaureate of Electrical Engineering – Bandung Institute of Technology (1968)

History of Position

- Legal Basis of Appointment Appointed as Commissioner of the Company for the first time in the Annual GMS on 23 June 2004 and reappointed as Commissioner, concurrently as Independent Commissioner in the Annual GMS on 21 May 2018. Appointed as a member of the Risk Management Committee according to the Decision of the Board of Commissioners on 20 April 2018. He also holds the position as Chairman of the Nomination and Remuneration Committee according to the Decision of the Board of Commissioners on 11 August 2015 and as Chairman of the Corporate Governance Committee according to the Decision of the Board of Commissioners on 6 February 2015.

- Work Experience 1. Chairman of the Nomination & Remuneration Committee of the Company (2015-present)2. Member of the Audit Committe of the Company (2015-2016)3. Chairman of the Corporate Governance Committee of the Company (2015-present)4. Commissioner of ASCO Group (2012-present)5. Commissioner, concurrently as Independent Commissioner of the Company (2011-present)6. Member of the Risk Management Committee of the Company (2011-present)7. Chairman of the Audit Committee of the Company (2011-2015)8. Chairman of Audit and Risk Management Committee of the Company (2010-2011)9. Nomination and Remuneration Committee of the Company (2004-2015)10. Independent Commissioner of the Company (2004-2011)11. Member of the Audit and Risk Management Committee of the Company (2004-2010)12. Commissioner of PT Pakoakuina - Automotive Wheel Rim Manufacturer (2003-present)13. Commissioner of PT Inkoasku - Automotive Wheel Rim Manufacturer (2003-2010)14. Commissioner of PT Palingda - Automotive Wheel Rim Manufacturer (2003-2010)15. Commissioner of PT Adira Sarana Armada (2003-2009)16. Commissioner of PT Asuransi Adira Dinamika (2003-2008)17. President Commissioner of the Company (2002-2004)18. Commissioner of PT Kharaba Unggul/PT Makro Indonesia (1990-2000)19. Commissioner of PT Dharma Sarana Perdana (1989-1995)20. Commissioner of PT Astra Graphia Tbk (1986-1989)21. Member of the People’s Consultative Assembly of the Republic of Indonesia (1992-1997)22. Member of the House of Representative and the People’s Consultative Assembly of the Republic

of Indonesia (1971-1992)


Competency

- Seminar “Opportunity and Challenges of the Finance and Leasing Industry in Asia” : Indonesia Financial Services Association, 20 September 2019

- Finance Industry in Capital Market: Indonesia Financial Service Association, 26 July 2018- Economic Outlook And Its Impact To Indonesia Multifinance Industry: Prasetiya Mulya, 12

December 2018- Understanding Shifting Behavior of the Customer in the Current Market (Refreshment training for

maintaining fit and proper): PPM Management, 13 December 2017- Fostering Innovation in The Financial Technology Advancement Era: PPM Management, 5

December 2016- Consumer Behaviour regarding Automotive Expenditure, Multifinance Industry Policies by

FSA (OJK), and Designing Innovative Business Models Using Business Model Canvas, PPM Management, 3 December 2015

Certification Basic Financing Certification – PT Sertifikasi Profesi Pembiayaan Indonesia, 2015

Affiliated Relationship He has no affiliation with members of the Board of Commissioners, other members of the Board ofDirectors and major shareholders.

Domicile Jakarta

ADMF Share Ownership 0 shares


Krisna Wijaya Commissioner, concurrently as Independent Commissioner



Age | Place & Date of Birth 64 tahun years old per 31 December 2019 | Jakarta, 22 July 1955

Educational Background 1. Doctor in Interdisciplinary Studies - Gadjah Mada University (2009)2. Master of Agribusiness Management - Gadjah Mada University (1990)3. Bachelor of Social Economics Studies - Bogor Agricultural Institute (1980)

History of Position

- Legal Basis of Appointment Appointed as Commissioner, concurrently as an Independent Commissioner for the first time in the Annual GMS on 18 May 2016, and reappointed in Annnual GMS on 20 April 2018. He holds the position as Chairman of the Audit Committee since the Decision of the Board of Commissioners on 20 April 2018.

- Work Experience 1. Commissionner, concurrently as Independent Commissioner of the Company (2016-present)2. Chairman of the Audit Committee of the Company (2016-present)3. Director of the Indonesian Banking Development Institute (2016-present)4. President Commissioner/Independent Commissioner of PT BNI Life Insurance (2015-present)5. Independent Commissioner, Chairman of the Audit Committee, Member of the Risk Management

Committee, Member of the Nomination and Remuneration Committee as well as Credit Review of PT Bank Mandiri Tbk (2010-2015)

6. Member of the Sharia Supervisory Board of PT Jaya Proteksi Takaful (2009-2016)7. Commissioner and Member of the Audit Committee of PT Bank Danamon Indonesia Tbk (2008-

2010)8. Member of the Audit Committee of PT Mahaka Group (2006-2016)9. Commissioner member of Indonesia Deposit Insurance Corporation (2005-2007)10. Commissioner of PT Bank Rakyat Indonesia (2005-2007)11. Director of Small and Micro Enterprise of PT Bank Rakyat Indonesia (2003-2005)12. Director of Operation of PT Bank Rakyat Indonesia (2000-2003)13. Head of Education and Training Division of PT Bank Rakyat Indonesia (1996-2000)14. Branch Manager of Semarang of PT Bank Rakyat Indonesia (1994-1995)15. Branch Manager of Surakarta Sudirman of PT Bank Rakyat Indonesia (1992-1994)16. Head of Commercial Business Regional Office of PT Bank Rakyat Indonesia – Surabaya Branch

Office (1990-1991)17. Senior Leasing Officer of PT Bank Rakyat Indonesia (1983-1987)18. General Staff Candidate of PT Bank Rakyat Indonesia (1980)



- “Opportunities and Challenges of the Finance and Leasing Industry in Asia” Seminar of Indonesian Assosiciation of Financial Company (APPI), 20 September 2019

- Financing Industry in the Capital Market: Indonesian Financial Services Association, 26 July 2018.

Certification Basic Financing Certification – PT Sertifikasi Profesi Pembiayaan Indonesia, 2016

Affiliated Relationship He has no affiliation with members of the Board of Commissioners, other members of the Board ofDirectors and major shareholders.

Domicile Jakarta



Co

rpo

rate

Data

Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


03Chapter

Eng Heng Nee Philip Commissioner

Citizenship Singaporean

Age | Place & Date of

Birth

74 years old per 31 December 2019 | Singapore, 24 August 1946

Educational Background 1. Accountancy - Institute of Chartered Accountants, Australia (1971)2. Accountancy - University of New South Wales, Australia (1969)

History of Position

- Legal Basis of Appointment

Appointed as Commissioner of the Company for the first time in the Annual GMS on 5 June 2007 and reappointed in Annnual GMS on 20 April 2018. Appointed as Chairman of the Risk Management Committee according to the Decision of the Board of Commissioners on 28 April 2018 and as a member of the Nomination and Remuneration Committee according to the Decision of the Board of Commissioners on 11 August 2015.

- Work Experience 1. Chairman of Frasers Hospitality International Pte. Ltd (2018-present)2. Director of Heliconia Capital Management Pte. Ltd (2011-present)3. Director of the Agency for Healthcare Supply Chain Pte. Ltd (2018-present)4. Chairman of Transmex Systems International Pte. Ltd (2017-present)5. Commissioner of the Company (2016-present)6. Director of Vanda 1Investment Pte. Ltd (2014-present)7. Director of Frasers Australand Pty. Ltd (2014-present)8. Director of KK Women’s and Children’s Hospital Pte. Ltd., Singapura (2012-present)9. Director of Frasers Centrepoint Limited (2013-present)10. Director of Ezra Holdings Ltd., Singapore (2012-present)11. Chairman of the Risk Management Committee of the Company (2011-present)12. Commissioner, concurrently serves as Independent Commissioner of the Company (2011-2016)13. Non-Executive Director of Asia Pacific Breweries Ltd., Singapore (2011-2013)14. Non-Executive Director of Hup Soon Global Corp. Ltd., Singapore (2010-2013)15. Director of Singapore Health Services Pte. Ltd., Singapore (2009-present)16. Director of The Hour Glass Ltd., Singapore (2009-present)17. Director of Hektar Asset Management Sdn. Bhd., Malaysia (2008-present)18. Independent Non-Executive Director concurrently serves as Chairman of Audit Committee of NTUC Income, Singapore

(2008-present)19. Non-Executive Director of OpenNet Pte. Ltd., Singapore (2008-2013)20. Member of the Audit Committee of the Company (2007-2016)21. Commissioner of the Company (2007-2011)22. Member of the Risk Management Committee of the Company (2007-2011)23. Non-Executive Director of Sunrise MCL Land Sdn (2007-2011)24. Chairman of Frasers Centrepoint Asset Management Ltd., Singapore (2006-present)25. Chairman of MDR Limited, Singapore (2005-present)26. Deputy Chairman of MCL Land Ltd., Singapore (2005-2011)27. Non-Executive Director of Chinese Development Assistance Council, Singapore (2004-2014)28. Group Managing Director of Jardine Cycle & Carriage Ltd., Singapore (1996-2005)

Education or Training

for Competency

Improvement

- Financing Industry in the Middle of Political and Economic Turmoil”: Asosiasi Perusahaan Pembiayaan Indonesia (APPI), 25 July 2019, Jakarta

- Seminar Internasional APPI “Multifinance Indonesia “The Opportunities and Challenges”: APPI, 6 Desember 2019, Jepang

- Economic Outlook and Its Impact to Indonesia Multifinance Industry: Prasetiya Mulya, 12 Desember 2018- Understanding Shifting Behavior of the Customer in the Current Market (Refreshment training for maintaining fit and

proper): PPM Management, 13 Desember 2017- Fostering Innovation in The Financial Technology Advancement Era: PPM Management, 5 Desember 2016- Consumer Behaviour on Automotive Expenditure, Multifinance Industry Policies by FSA (OJK), and Designing Innovative

Business Model Using Business Model Canvas, PPM Management, 3 Desember 2015

Certification Basic Finance Certification – PT Sertifikasi Profesi Pembiayaan Indonesia, 2015

Affiliated Relationship He has no affiliation with members of the Board of Commissioners, other members of the Board of Directors and major shareholders.

Domicile Singapore



Muliadi Rahardja Commissioner



Age | Place & Date of Birth 60 years old per 31 December 2019 | Tangerang, 10 May 1959

Educational Background 1. Master in Business Administration – Massachusetts Institute of Technology, Amerika Serikat (1998)2. Bachelor of Accountancy – University of Indonesia (1984)

History of Position

- Legal Basis of Appointment Appointed as Commissioner according to the Annual GMS Decision on 17 May 2017 and effectively served as Commissioner since the Decision of the Board of Commissioners of the OJK regarding the Fit and Proper Test Result No. KEP-36/KDK.05/2017, and reappointed in Annnual GMS on 20 April 2018.

- Work Experience 1. Commissioner of the Company (2017-present)2. Member of the Risk Management Committee of the Company (2017-present)3. Independent Commissioner of PT XL Axiata Tbk (2017-present)4. Vice President Director of PT Bank Danamon Indonesia Tbk (2015-2017)5. Commissioner of the Company (2010-2015)6. Director of PT Bank Danamon Indonesia Tbk (1999-2015)7. Various senior positions in PT Bank Danamon Indonesia Tbk (1989-1999)8. Deputy Group Head of PT Bank Lippo Tbk (1988-1989)9. Finance Director of PT Indopanca Garmen (1987-1988)10. Finance Manager of PT Asuransi Lippo Life Tbk (1985-1987)11. Manager of PT Sepatu Bata Indonesia Tbk (1984-1985)12. MAS Consultant (1983-1984).



- Seminar “Opportunities and Challenges of the Finance and Leasing Industry in Asia”: Asosiasi Perusahaan Pembiayaan Indonesia (APPI), 20 September 2019

- Finance Industry in Capital Market: Indonesia Financial Service Association, 26 July 2018- Understanding Shifting Behavior of the Customer in the Current Market (Refreshment training for

maintaining fit and proper): PPM Management, 13 December 2017- Risk Management for Bank: The Risk Forum, School of Finance (2016)- Risk Management for Bank: The Risk Forum, School of Finance (2014)- Risk Management for Bank: The Risk Forum, School of Finance (2012)

Certification Basic Finance Certification – PT Sertifikasi Profesi Pembiayaan Indonesia, 2017


Domicile Jakarta



Co

rpo

rate

Data

Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


03Chapter

Willy Suwandi Dharma Commissioner


Age | Place & Date of Birth 63 years old per 31 December 2019 | Jakarta, 29 August 1956

Educational Background 1. Faculty of Economics – Indonesia Open University (1992)2. Faculty of Agriculture – Bogor Agricultural Institute (1981)

History of Position

- Legal Basis of Appointment Appointed as Commissioner according to the Annual GMS Decision on 17 May 2017 and effectively served as Commissioner since the Decision of the Board of Commissioners of the OJK regarding the Fit and Proper Test Result No. KEP-37/KDK.05/2017, and reappointed in Annnual GMS on 20 April 2018.

- Work Experience 1. Commissioner of the Company (2017-present)2. Member of the Nomination and Remuneration Committee of the Company (2017-present)3. Commissioner of PT Asuransi Adira Dinamika (2012-present)4. President Director of the Company (2012-2017)5. President Director of PT Asuransi Adira Dinamika (2002-2012)6. President Director of KPMG Siddharta Consulting (1999-2002)7. Various senior positions in the Astra Group, the last position was President Director of PT Asuransi

Astra Buana (1982-1999)



- Seminar Nasional “Anti Fraud Strategy In Multifinance Industry”: APPI, Jakarta (Hotel Indonesia Kempinski), 21 February 2019

- Finance Industry in Capital Market: Indonesia Financial Service Association, 26 July 2018- Understanding Shifting Behavior of the Customer in the Current Market (Refreshment training for

maintaining fit and proper): PPM Management, 13 December 2017- Fostering Innovation in The Financial Technology Advancement Era: PPM Management, 5

December 2016- Executive Shared Value Delivering a Positive Impact in Indonesia: Palladium International, 31 May

2016- BoD/BoC Executive Training for Adira Finance: PPM Management, 3 December 2015- Culture Retreat Top Team: ESQ, 6 November 2015- Certified with the OJK Regulation & Refreshment Training – PPM Institute, 2015- Consumer Behaviour regarding Automotive Expenditure, Multifinance Industry Policies by


- Certified Wealth Management, 2001

Certification - Advance Finance Certification – PT Sertifikasi Profesi Pembiayaan Indonesia, 2015- Risk Management Certification for Finance Companies – BSMR, 2016- Risk Management Certification for Insurance Companies – AAMAI, 2015

Affiliated Relationship He has no affiliation with members of the Board of Commissioners, other members of the Board of Directors and major shareholders. A Commissioner of PT Asuransi Adira Dinamika.

Domicile Jakarta



AUDIT COMMITTEEPROFILE

Member of the Audit Committee

Krisna Wijaya Chairman of the Audit Committee

History of Position

- Legal Basis of Appointment Appointed as the Chairman of the Audit Committee according to the Decision of the Board of Commissioners of the Company dated 20 April 2018.


Age | Place & Date of Birth 60 years old per 31 Desember 2019 | 3 December 1959

Educational Background Bachelor of Science in Business Administration - The American University Washington, DC, USA (1983).

History of Position

- Legal Basis of Appointment Appointed as the Member of the Audit Committee according to the Decision of the Board of Commissioners of the Company dated 20 April 2018.

- Work Experience 1. Member of the Audit Committee of PT Bank ICBC Indonesia (2016-present)2. Member of the Audit Committee of the Company (2016-present)3. Director of the Banking Profession Certification Institute under Indonesian Banker Association

(2011-present)4. Senior Vice President Head of Internal Audit in PT Bank Permata Tbk (2006-2011)5. Division Head of Head Office for Centralised Operation and Branches of PT Bank Danamon Indonesia

Tbk (2001-2006)6. Senior Vice President of the Indonesian Bank Restructuring Agency (1999-2001)7. Assistant Vice President of The Chase Manhattan Cabang Jakarta (1990-1999)8. Internal Audit Supervisor of PT Huffco Indonesia (1984-1990)



- Asessment Method and Banking Competencies Fit in Digital Era: Banking Profession Certification Institute, Jakarta 4 March 2019

- Refreshment Asessment Methodology for Assesor: National Professional Certification Board, Jakarta 13-14 August 2019

Certification


Domicile Jakarta



Co

rpo

rate

Data

Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


03Chapter

Christine Tjen Member of the Audit Committee


Age | Place & Date of Birth 41 years old per 31 December 2019 | 3 August 1978

Educational Background 1. Bachelor of Accountancy - University of Indonesia (2000)2. Master of International Taxation - University of Sydney (2006)

History of Position

- Legal Basis of Appointment Appointed as the Member of the Audit Committee according to the Decision of the Board of Commissioners of the Company dated 20 April 2018.

- Work Experience 1. Member of the Audit Committee of the Company (2016-present)2. Deputy Director of Administration & Finance of LPSM FEB of University of Indonesia

(2015-present)3. Member of the Audit Committee of PT Perusahaan Perdagangan Indonesia (Persero) (2011-2015)4. Member of the Risk Management Committee of PT Bank Agroniaga Tbk (2012-2015)5. Lecturer of Taxation and Accounting subjects at the University of Indonesia (2006-present)6. Relationship Representative of World Vision, Australia (2005-2006)7. Corporate Taxation Supervisor of KPMG Siddharta & Harsono (2003-2005)8. Senior Tax Consultant in International Executive Service (2001-2004)9. Assistant of Lecturer for Taxation and Accounting subject in University of Indonesia (2001-2004)



Risk Governance Master Class, Center for Risk Management Studies (CRMS), Jakarta, 4 December 2019

Certification

Affiliated Relationship She has no affiliation with members of the Board of Commissioners, other members of the Board of Directors and major shareholders

Domicile Jakarta



RISK MANAGEMENTCOMMITTEE PROFILE

Eng Heng Nee Philip Chairman of the Risk Management Committee

History of Position

- Legal Basis of Appointment Appointed as the Chairman of the Risk Management Committee according to Decision of the Board of Commissioners of the Company dated 28 April 2011, and reappointed on 20 April 2018.

Djoko Sudyatmiko Member of the Risk Management Committee

History of Position

- Legal Basis of Appointment Appointed as the Chairman of the Risk Management Committee according to Decision of the Board of Commissioners of the Company dated 28 April 2011, and reappointed on 20 April 2018.


Co

rpo

rate

Data

Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


03Chapter

Muliadi Rahardja Member of the Risk Management Committee

History of Position

- Legal Basis of Appointment Appointed as the Chairman of the Risk Management Committee according to Decision of the Board of Commissioners of the Company dated 20 April 2018.


NOMINATION AND REMUNERATION COMMITTEE PROFILE

Djoko Sudyatmiko Chairman of the Nomination and Remuneration Committee

History of Position

- Legal Basis of Appointment Appointed as the Chairman of the Nomination and Remuneration Committee according to the Decision of the Board of Commissioners of the Company dated 11 August 2015, and reappointed on 22 August 2017.

Eng Heng Nee Philip Member of the Nomination and Remuneration Committee

History of Position

- Legal Basis of Appointment Appointed as the Member of the Nomination and Remuneration Committee according to Decision of the Board of Commissioners of the Company dated 11 August 2015, and reappointed on 22 August 2017.


Co

rpo

rate

Data

Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


03Chapter

Willy Suwandi Dharma Member of the Nomination and Remuneration Committee

History of Position

- Legal Basis of Appointment Appointed as the Member of the Nomination and Remuneration Committee according to Decision of the Board of Commissioners of the Company dated 22 August 2017.


CORPORATE GOVERNANCE COMMITTEE PROFILE

Djoko Sudyatmiko Chairman of the Corporate Governance Committee

History of Position

- Legal Basis of Appointment Appointed as the Chairman of the Nomination and Remuneration Committee according to the Decision of the Board of Commissioners of the Company dated 6 February 2014.


Co

rpo

rate

Data

Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


03Chapter

Diyah Sasanti Member of the Corporate Governance Committee


Age | Place & Date of Birth 53 years old per 31 Desember 2019| 13 July 1966

Educational Background 1. Master of Notary - Padjadjaran University, Bandung (2009)2. Masters in Business Law - Padjadjaran University, Bandung (2006)3. Master of Business Administration - Newport University, California (1998)4. Bachelor of Law – Jember University (1989)

History of Position

- Legal Basis of Appointment Appointed as the Chairman of the Corporate Governance Committee according to the Decision of the Board of Commissioners dated 6 February 2014.

- Work Experience 1. Member of the Corporate Governance Committee of the Company (2015-present)2. Commissioner of PT DISA (2011-present)3. Member of the Audit Committee of the Company (2011-2016)4. Legal Counsel of Agritrade International Pte Ltd (2010-present)5. Advisor of WSJ International SDN BHD (2010-2017)6. Advisor of PT Total Sinergy International (2010-present)7. Member of the Audit and Risk Management Committee of the Company (2008-2011)8. Director of PT Darmex Agro (2008-2010)9. Advisor of PT Pembangunan Perumahan (2007-2008)10. Advisor of PT Lippo E-Net Tbk (2006-2007)11. Corporate Secretary of PT Lippo E-Net Tbk (formerly PT Lippo Life Tbk) (2000-2006)12. Director of PT Asuransi AIG Lippo (1998-1999)13. Corporate Secretary and Legal Division Head of PT Lippo Life Tbk (1997-1998)14. Legal Division Head of PT Lippo Life Tbk (1994-1996)15. Corporate Secretary Staff of PT Bank Lippo Tbk (1991-1994)16. Internal Audit of PT Bank Lippo Tbk (1990-1991)17. Account Officer of PT Bank Lippo Tbk (1989-1990)



Pelatihan Kurator dan Pengurus Tahun 2019 (Angkatan V), Himpunan Kurator dan Pengurus Indonesia, Jakarta, 29 Juli - 10 Agustus 2019

Certification

Affiliated Relationship She has no affiliation with members of the Board of Commissioners, other members of the Board of Directors and major shareholders.

Domicile Bogor



BOARD OF DIRECTORSPROFILE

President Director


Age | Place & Date of Birth 56 years old per 31 December 2019 l Jakarta, 23 June 1963

Educational Background Bachelor of Accountancy - Trisakti University (1988)

History of Position

- Legal Basis of Appointment Appointed as Director of the Company for the first time on 21 June 2006. Appointed as President Director of the Company according to the Annual GMS Decision 2016, and reappointed in Annnual GMS on 20 April 2018.

- Work Experience 1. President Director and Director of Compliance of the Company (2017-present)2. Director of Sales & Distribution of the Company (2012-2017)3. Director of Car Sales & Distribution of the Company (2010-2012)4. Director of Finance and Director of Compliance of the Company (2006-2010)5. Director at PT Broadband Multimedia Tbk (2002-2005)6. Vice President Director at PT Bank Lippo Tbk (2001-2002)7. Various senior positions at Citibank, N.A., Jakarta (1988-2001)8. Auditor at Arthur Andersen & Co. (1985-1988)



- Seminar Internasional Multifinance Indonesia “The Opportunities and Challenges”: Asosiasi Perusahaan Pembiayaan Indonesia (APPI), Jepang, 6 December 2019

- Seminar Nasional “Industri Pembiayaan Di Tengah Gejolak Politik dan Ekonomi”: Asosiasi Perusahaan Pembiayaan Indonesia (APPI), Jakarta, 25 July 2019

- Seminar Nasional “Prospek Ekonomi & Pertumbuhan Kredit Pasca Pemilu 2019” by PEFINDO at Jakarta, 24 April 2019

- Digitalization as Multifinance’s New Era: Indonesia Financial Service Association, 21 September 2018- Leading Digital Business Transformation Program: IMD Business School, 8-12 October 2018- Digital Strategy Program: IMD Business School, 15-17 October 2018- Leading in the Digital Age Program: IMD Business School, 17-19 October 2018- Economic Outlook And Its Impact To Indonesia Multifinance Industry: Prasetiya Mulya, 27 April 2018- Understanding Shifting Behavior of the Customer in the Current Market (Refreshment training for

maintaining fit and proper): PPM Management, 13 December 2017- Team Building Speed of Trust: Dunamis, 25-26 October 2017- Accompaniment and Training of Communication Skills: Irakoesno Communications, 1 April 2017 – 1 June

2017- Building Trust Culture: Dunamis, 18 April 2017- Culture Session: HCGA PT Adira Dinamika Multi Finance Tbk, 1 December 2016- Fostering Innovation in The Financial Technology Advancement Era: PPM Management, 5 December 2016- Consumer Behaviour regarding Automotive Expenditure, Multifinance Industry Policies by FSA (OJK), and

Designing Innovative Business Models Using Business Model Canvas, PPM Management, 3 December 2015

- General Management Leadership Program: Columbia University - Graduate School of Business, June 2013

Certification Advance Finance Certification – PT Sertifikasi Profesi Pembiayaan Indonesia, 2016.


Domicile Jakarta



Co

rpo

rate

Data

Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


03Chapter

Ho Lioeng Min Director


Age | Place & Date of

Birth

51 years old per 31 December 2019 | Jakarta, 17 April 1968

Educational Background 1. Master of Management – Gadjah Mada University (2006)2. Bachelor of Engineering – University of Indonesia (1992)

History of Position

- Legal Basis of Appointment

Appointed as Director for the first time on 1 April 2009. Was reappointed according to the Annual GMS Decision dated 20 April 2018.

- Work Experience 1. Director of Risk Management, Operational and Legal of the Company (2016-present)2. Director of Risk Management of the Company (2009-2016)3. Deputy Director of Risk Management of the Company (2006-2009)4. Head of Credit of the Company (2004-2006)5. Head of Finance of the Company (2002-2004)6. Various Senior positions in PT Bank Prima Express (1994-2002)

Education or Training

for Competency

Improvement

- Seminar “Penegakan Disiplin Perilaku Pelaku Pasar dan Bagaimana Implementasinya di Era Digital”: Otoritas Jasa Keuangan (OJK), Yogyakarta 3-4 October 2019

- Seminar “Artificial Intelligence : Implications for Business Strategy”: MIT Management Sloan School, September 2019

- Seminar “Cybersecurity for Managers : A Playbook”: MIT Management Executive Education, July 2019 - Seminar “Digital Strategies For Business : Leading The Next-Generation Enterprise” : Emeritus Institute of

Management, April 2019 - Seminar Nasional “Prospek Ekonomi & Pertumbuhan Kredit Pasca Pemilu 2019”, Jakarta 24 April 2019 - Participant Seminar Internasional “Multifinance: Consumer Protection, Risk Management and Fraud Early Warning

System in Digital Era” Bali, 26 April 2019- Participant “NICF-Introdution to Blockchain & DLT for Executive (SF)” : University of Singapore (NUS), Singapore,

08 April 2019 - Participant “Leveraging FinTech for Business”: National University of Singapore (NUS), Singapore 23-25 January

2019 - Executive Leadership Development: Stanford University, 14 January 2018 and 27 April 2018- Financial Institution in Banking Perception: Indonesia Financial Service Association, 8 May 2018- Introduction to FinTech (Online): HKUx, 20 Juny 2018- Fintech Financial Inclusion Forum 2018: International Finance Corporation, 31 July 2018- Economic Outlook And Its Impact To Indonesia Multifinance Industry: Prasetiya Mulya, 12 Desember 2018- Understanding Shifting Behavior of the Customer in the Current Market (Refreshment training for maintaining fit

and proper): PPM Management, 13 December 2017- Analytics Leaders Summit - Two Day Conference: ENIGMA CG, 28-29 November 2017- Team Building Speed of Trust: Dunamis, 25-26 October 2017- International Seminar APPI – Finance Companies and their Issues in Asia: APPI, 25 August 2017- National Seminar: Welcoming the FinTech Era, APPI, 25 April 2017- Building Trust Culture: Dunamis, 18 April 2017- World Class Marketing US Certified Marketing Manager (CMM): PT Husin Intelligence Group, 8-10 March 2017- Fostering Innovation in The Financial Technology Advancement Era: PPM Management, 5 December 2016- Consumer Behaviour regarding Automotive Expenditure, Multifinance Industry Policies by FSA (OJK), and

Designing Innovative Business Models Using Business Model Canvas, PPM Management, 3 December 2015- Automotive Industry’s Trend, and Responsibility of the BoC & BoD (Executive Learning Institute): Prasetya Mulya

Business School, 20 November 2014- In House Training ASEAN Corporate Governance Scorecard: Indonesian Institute for Corporate Directoship (IICD), 3

September 2014.Certification - Advance Finance Certification – PT Sertifikasi Profesi Pembiayaan Indonesia, 2016

- Risk Management - Excecutive Program, Daya Makara UI, 2016Affiliated Relationship He has no affiliation with members of the Board of Commissioners, other members of the Board of Directors and

major shareholders.Domicile Tangerang



I Dewa Made Susila Director

Profil Direksi


Age | Place & Date of Birth 48 years old per 31 December 2019 | Bali, 25 December 1970

Educational Background 1. Chartered Financial Analyst (CFA) - Association Investment Management and Research (2003)2. Master of Management – PPM School of Management (1998)3. Bachelor of Agribusiness – Bogor Agricultural Institute (1993)

History of Position

- Legal Basis of Appointment Appointed as Director for the first time on 7 April 2010. Was reappointed according to the Annual GMS Decision dated 20 April 2018.

- Work Experience 1. Compliance Director and Corporate Secretary of the Company (2011-2017)2. Director of Finance of the Company (2010-present)3. Investor Relations & Subsidiary Support Division Head PT Bank Danamon Indonesia Tbk (2004-2010)4. Corporate Affairs Deputy Division Head of PT Bank Danamon Indonesia Tbk (2001-2003)5. Senior Investment Officer of the Asset Management Investment Unit in the Indonesian Bank

Restructuring Agency (1999-2001)6. Manager of Financial Institution Rating Division and various senior positions in the Indonesian

Rating Agency (Pefindo) (1995-1999).



- Seminar “PwC’s FinTech Lending in Indonesia Study : Driving Economic Growth Through Financial Inclusion, Jakarta, 16 May 2019

- Seminar “Global and Asia FX Outlook : Global Macro Strategy Trade Tension 2.0”, Jakarta, 27 June 2019

- Seminar “Building Personal Brand” MarkPlus Institute Corporate+Public Training, Jakarta 15 May 2019

- Certificate of Attended from OJK, “Attended Refreshment Programme Bagi Tim Penilai Kemampuan dan Kepatuhan Pihak Utama Industri Keuangan Non Bank”, Jakarta (Wisma Mulia2) 4 March 2019

- Fintech Financial Inclusion Forum 2018: International Finance Corporation, 31 July 2018- Digitalization as Multifinance’s New Era: Indonesia Financial Service Authority, 21 September 2018- Opportunity and Challenges 2019: Indonesia Financial Service Association, 15 November 2018- Economic Outlook And Its Impact To Indonesia Multifinance Industry: Prasetiya Mulya, 12

Desember 2018- Understanding Shifting Behavior of the Customer in the Current Market (Refreshment training for

maintaining fit and proper): PPM Management, 13 December 2017- Team Building Speed of Trust: Dunamis, 25-26 October 2017- Building Trust Culture: Dunamis, 18 April 2017- Fostering Innovation in The Financial Technology Advancement Era: PPM Management, 5

December 2016- Culture Session: HCGA PT Adira Dinamika Multi Finance Tbk, 1 December 2016- Training TTT OCHI & EES: HCGA PT Adira Dinamika Multi Finance Tbk, 23 January 2016- Consumer Behaviour regarding Automotive Expenditure, Multifinance Industry Policies by




Domicile Jakarta



Co

rpo

rate

Data

Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


03Chapter

Swandajani Gunadi Director


Age | Place & Date of Birth 47 years old per 31 Desember 2019 | Pekalongan, 4 August 1972

Educational Background Bachelor of Agronomy – Bogor Agricultural Institute (1995)

History of Position

- Legal Basis of Appointment Appointed as Director for the first time on 17 May 2013. Was reappointed according to the Annual GMS Decision dated 20 April 2018

- Work Experience 1. Director of Human Capital, CREM and Marketing of the Company (2017-present)2. Director of Human Capital of the Company (2013-2017)3. Human Resources and General Affairs Deputy Director of the Company (2010-2013)4. Human Resources and General Affairs Division Head of the Company (2003-2010)5. Remuneration and Human Resources Development Department Head of the Company (2002-2003)6. Remuneration Senior Analyst of PT Sumalindo Lestari Jaya Tbk (Group PT Astra International Tbk) (2000-

2002)7. HR Corporate Manager at Orang Tua Group (2000)8. Remuneration Senior Analyst in PT Astra International Tbk-Automotive Division (1997-2000)9. Personal Administration Section Head of PT Astra International Tbk- Automotive Division (1996-1997)10. People Development & Management Officer of PT Astra International Tbk- Automotive Division (1996)



- “Opportunities and Challenges in 2020” Seminar: Indonesian Financial Services Association (APPI), 26 November, 2019

- “Opportunities and Challenges of the Financial Industry and Leasing in Asia” Seminar: Indonesian Financial Services Association (APPI), 20 September 2019

- Silicon Valley Participant Immersion Program “Leading Digital Transformation Program”: USA, 8-12 April, 2019

- Financial Institution in Banking Perception: Indonesia Financial Service Association, 8 May 2018- Digitalization as Multifinance’s New Era: Indonesia Financial Service Association (APPI), 21 September

2018- Economic Outlook And Its Impact To Indonesia Multifinance Industry: Prasetiya Mulya, 12 December 2018- Understanding Shifting Behavior of the Customer in the Current Market (Refreshment training for

maintaining fit and proper): PPM Management, 13 December 2017- Team Building Speed of Trust: Dunamis, 25-26 October 2017- National Seminar: Welcoming FinTech Era, APPI, 25 April 2017- Building Trust Culture: Dunamis, 18 April 2017- Training NPL Krisna Murti: Krisna Murti, 24-27 August 2017- World Class Marketing US Certified Marketing Manager (CMM): PT Husin Intelligence Group, 8-10 March

2017- Fostering Innovation in The Financial Technology Advancement Era: PPM Management, 5 December 2016- Culture Session: HCGA PT Adira Dinamika Multi Finance Tbk, 1 December 2016- Training TTT OCHI & EES: HCGA PT Adira Dinamika Multi Finance Tbk, 23 January 2016- Core Training for Professional Coaching: Coach Master Academy, 29 March 2016- Consumer Behaviour regarding Automotive Expenditure, Multifinance Industry Policies by FSA (OJK), and

Designing Innovative Business Models Using Business Model Canvas, PPM Management, 3 December 2015

- Danamon-Insead Leadership Academy, Insead – The Business School for The World, Singapore, 2007


Affiliated Relationship She has no affiliation with members of the Board of Commissioners, other members of the Board of Directors and major shareholders.

Domicile Jakarta



Niko Kurniawan BonggowarsitoDirector

Profil Direksi


Age | Place & Date of Birth 49 years old per 31 December 2019 l Lampur, 14 February 1971

Educational Background Bachelor Business/Management - Indonesia Business Institute (1994)

History of Position

- Legal Basis of Appointment Appointed as Director of the Company for the first time according to the Annual GMS Decision on 20 April 2018 and started active since passing Fit and Proper Test from OJK on 5 June 2018.

- Work Experience 1. Director of Sales, Service & Distribution of the Company (2018-present)2. Deputy Director of Sales, Service & Distribution of the Company (2017-2018)3. Deputy Director Retail Car Financing of the Company (2010-2017)4. Head of Retail Car Financing of the Company (2008-2010)5. Regional Head of East Java of the Company (2004-2005)6. Head of Suzuki & Used Motorcycle Financing of the Company (2003-2008)7. President Director at PT Mandiri Pakar Sakti (2001-2002)8. Sales Manager at PT Sinar Galesong Pratama (1996-2001)9. Area Supervisor for Eastern Part of Indonesia at PT Indomobil Suzuki International (1993-1996)10. Product Officer at PT Bank Umum Nasional (1992-1993)



- “Socialization of the FSA’s decision No.15/SEOJK/2019 concerning Revaluation of Main Parties of Non-Bank Financial Services Institutions“: Jakarta, 13 August 2019

- Seminar Internasional “Multifinance : Consumer Protection, Risk Management and Fraud Early Warning System in Digital Era”: Bali, 26 April 2019

- Economic Outlook and Its Impact To Indonesia Multifinance Industry: Prasetiya Mulya, 12 December 2018

- General Manager Development Program, Prasetiya Mulya Institut Bisnis Jakarta, 2014- Senior Executive Development Program (Management Strategic), INSEAD Business School

Singapore, 2007

Certification Advance Finance Certification, PT Sertifikasi Profesi Pembiayaan Indonesia, 2018

Affiliated Relationship US Certified Marketing Manager (CMM), American Certification Institute, 2015

Domicile He has no affiliation with members of the Board of Commissioners, other members of the Board of Directors and major shareholders

ADMF Share Ownership Jakarta

Jumlah Kepemilikan Saham ADMF 0 shares


Co

rpo

rate

Data

Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


03Chapter

SHARIA SUPERVISORY BOARDPROFILE

Prof. Dr. H. Fathurrahman Djamil, MA Chairman of Sharia Supervisory Board


Age | Place & Date of Birth 59 years old per 31 Desember 2019 | 7 November 1960

Educational Background 1. Ph.D on Islamic Legal Theory - McGill University, Canada (1994)2. Master of Arts on Sharia - State Institute for Islamic Studies, Jakarta (1987)3. Bachelor of Arts on Sharia - State Institute for Islamic Studies, Jakarta (1981)

History of Position

- Legal Basis of Appointment Appointed for the first time as Chairman of the Sharia Supervisory Board of the Company in the Extraordinary GMS dated 4 September 2012 and was reappointed in the Annual GMS on 20 April 2018..

- Work Experience 1. Vice Chairman of the Implementing Agency of the National Sharia Council – Indonesian Ulama Council (DSN-MUI) for period 2015-2020

2. Chairman of the Sharia Supervisory Board of the Company (2012-present)3. Member of the Sharia Supervisory of Board PT CIMB Niaga Auto Finance (2012-present)4. Chairman of the Sharia Supervisory Board of BCA Syariah (2010-present)5. Chairman of the Sharia Supervisory Board of Sun Life Financial Syariah (2010-present)6. Chairman of the Sharia Supervisory Board of PT AIA Financial Syariah (2009-present)7. Member of the Sharia Supervisory Board of PT Bank CIMB Niaga Tbk (2008-present)8. Professor of the Syarif Hidayatullah State University for Islamic Studies, Jakarta (1999-present)9. Lecturer of Muhammadiyah University, Jakarta (1985-present)10. Lecturer of Syarif Hidayatullah State University for Islamic Studies, Jakarta (1982-present)

Certification License as a Sharia Expert in the Capital Market through Decision Letter of the Board of Commissioners of the Financial Services Authority No. KEP-12/D.04/ASPM-P/2016.

Affiliated Relationship He has no affiliation with members of the Board of Commissioners, other members of the Board of Directors and major shareholders

Domicile TangerangTangererrae


Dr. H. Noor Achmad, MA Member of Sharia Supervisory Board

Profil Dewan Pengawas Syariah


Age | Place & Date of Birth 63 years old per 31 Desember 2019 | 10 February 1957

Educational Background 1. Doctorate of Aqidah Philosophy - Sunan Kalijaga State University of Islamic Studies, Yogyakarta (2006)2. Master of Arts on Sharia - Sunan Kalijaga State University of Islamic Studies, Yogyakarta (1998)3. Bachelor of Arts on Sharia - Walisongo State Institute for Islamic Studies, Semarang (1989)

History of Position

- Legal Basis of Appointment Appointed for the first time as Chairman of the Sharia Supervisory Board of the Company in the Extraordinary GMS dated 4 September 2012 and was reappointed in the Annual GMS in 20 April 2018.

- Work Experience 1. Chairman of Nadzir Bondo Foundation of Semarang Great Mosque (2015-present)2. General Secretary of the Advisory Council of the Indonesian Ulama Council (2015-present) 3. Member of the Implementing Agency of the Capital Market Sector of the National Sharia Council –

Indonesian Ulama Council/DSN-MUI (2015-2020)4. Chairman of Qur’an Recitation Institute (LPTQ), Central Java (2015-2023) 5. Chairman of the Governing Body of Central Java Great Mosque (2014-present) 6. Member of Commission X of the House of Representative (2014-2019)7. Member of the Sharia Supervisory Board of the Company (2012-present)8. Chairman of the Wahid Hasyim Foundation Semarang (2010 - present)9. Lecturer of the Post-graduate and Doctoral Program in Wahid Hasyim university, Semarang

(2010-present)10. Chairman of the Wakaf Indonesian Body for Central Java (2010-present) 11. Chairman of the Khidmah Asmaul Husna Assembly (2010-present) 12. Chairman of the Nahdlatul Ulama Indonesia College Association (2010-2016)13. Deputy Secretary General of Central Indonesian Ulema Council (2010-2015)14. Deputy Chairman of Indonesian Private Universities Association of Central Java (2010-2015)15. Chairman of Indonesian Nahdlatul Ulama Association of Chancellors and Colleges (2008-2013)16. Chairman of NUPBNU Higher Education Development Institute (2008-2015)17. Deputy Chairman of Association of Indonesian Private Universities in Central Java (2005-2014)18. Rector of Wahid Hasyim University, Semarang (2010-2015)19. Lecturer of Walisongo State Islamic Institute, Semarang (1983-2001)20. Member of Regional Representative Council of Central Java (1997-1999, 1999-2004, and 2004-2009)

Certification License as a Sharia Expert in the Capital Market through Decision Letter of the Board of Commissioners of the Financial Services Authority No. KEP-03/D.04/ASPM-P/2017


Domicile Semarang


Co

rpo

rate

Data

Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


03Chapter

Dr. Oni Sahroni, MA Member of Sharia Supervisory Board


Age | Place & Date of Birth 44 years old per 31 Desember 2019 | 26 November 1975

Educational Background 1. Doctorate of Fiqh Muqaran - al Azhar University, Cairo (2009)2. Master of Arts on Sharia - al Azhar University, Cairo (2005)3. Bachelor of Arts on Sharia - al Azhar University, Cairo (2000)

History of Position

- Legal Basis of Appointment Appointed for the first time as Chairman of the Sharia Supervisory Board of the Company in the Extraordinary GMS dated 4 September 2012 and was reappointed in the Annual GMS in 20 April 2018.

- Work Experience 1. Member of the Sharia Supervisory Board of PT Bank Muamalat Tbk (2017-present)2. Member of the Sharia Supervisory Board of PT Maybank Indonesia Tbk (2017-present)3. Caregiver of the Rumahwasathia Foundation (2017-present)4. Sharia Expert Team for ISRA Bank Negara Malaysia (2015-present)5. Director of SIBER-C Sharia Economic & Banking Institute (2013-present)6. Member of the Sharia Supervisory Board of the Company (2012-present)7. Member of the Implementing Agency of the the National Sharia Council – Indonesian Ulama Council

(DSN-MUI) (2011-present)8. Editor of Sharia Consultation Section in “Republika” daily newspaper

Certification Licensed as a Sharia Expert in Capital Market through Decision Letter of the Board of Commissioners of the Financial Services Authority No. KEP-04/PM.22/ASPM-P/2017.


Domicile Depok


CORPORATE SECRETARYPROFILE

Perry Barman Slangor Corporate Secretary

Age

49 years old

Indonesian and domicile in South Jakarta

Education

- Bachelor of Business Administration- Master of Business Administration

University of Wisconsin, Milwaukee, 1993Cleveland State University, Ohio, 1995

Work Experience

- PT Toba Bara Sejahtera Tbk- PT Adaro Energy Tbk- PT Bank International Indonesia Tbk- PT Bank Danamon Indonesia Tbk- Badan Penyehatan Perbankan Nasional- PT Pemeringkat Efek Indonesia (PEFINDO)

Corporate Secretary (General Manager)Manager Corporate ReportingDepartment Head of Investor RelationsAssistant Vice President Corporate Secretary DivisionManager Corporate Planning & Strategic StudiesManager Corporate Communication

Training

- Training Legal & Corporate Secretary- Diskusi Panel “Mencari Juara Sejati GCG Indonesia”- Training Amazing Service- Sustainable Service Quality GM Batch 3- ASEAN Corporate Governance Scorecard- Menghitung Tingkat Risiko Rendah-Sedang, Rendah- Team Building Speed of Trust- Sertifikasi SPPI Managerial- Workshop Sentralisasi For SSD- Annual Report Sharing Session

Bank Danamon, 2013PT Adira Dinamika Multi Finance Tbk, 2014PT Adira Dinamika Multi Finance Tbk, 2014PT Adira Dinamika Multi Finance Tbk, 2014Indonesian Institute for Corporate Directorship (IICD), 2014PT Adira Dinamika Multi Finance Tbk, 2015Dunamis, 2017PT Adira Dinamika Multi Finance Tbk, 2017PT Adira Dinamika Multi Finance Tbk, 2017Maksimedia, 2018

Certification

Certification from Certification from Sertifikasi Profesi Pembiayaan Indonesia (SPPI)

SPPI, 2017


Co

rpo

rate

Data

Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


03Chapter

HEAD OF INTERNAL UNIT PROFILE

Haryadwi Saputra KartawidjajaHead of Internal Audit

Age

40 years old

Indonesian and domicile in Jakarta

Education

Bachelor of Acoounting and Finance Wright State University- Ohio, USA, 2002

Work Experience

- Citibank NA - PT Bank ANZ Indonesia- PT Bank Danamon Indonesia Tbk - PT Bank HSBC - KPMG

Vice President Internal AuditVice President Internal AuditAssistant Vice President Internal AuditAssistant Manager Internal AuditSenior Auditor

Training

- Refresher LSPP: Strengthening Credit Risk Management - Legal and Practical Pitfalls in Internal Investigations

LSPP, November 2019KPMG, November 2019

Certification

Certification from Lembaga Sertifikasi Profesi Perbankan Level 3 LSPP


Andreas Dwi Kurniawan Head of Compliance Unit & AML

HEAD OF THE COMPLIANCE UNITPROFILE

Age

48 years old

Indonesian and domicile in Tangerang

Education

Bachelor of Law Universitas Padjadjaran (1995)

Work Experience

- PT Asco Dinamika Mobilindo- PT Tempo Group Tbk- PT Mitracorp Pacific Nusantara Holding Company

Finance & Accounting ManagerInternal Audit SupervisorBudget Control

Training

- Sharing Session Annual Report - “Risk Based Anti-Money Laundering and Combating Terrorism

Financing”- SPPI Managerial Certification- Looking for a True Champion GCG Indonesia- Workshop Global Reporting Initiative G4- Workshop Corporate Secretary- Basic Education for Sharia Financing- Comprehensive Preparation To Win Annual Report Award- Growing People Workshop- “The Role and Responsibility of Financing company in Building

Anti-Money Laundering Era” - Anti-Money Laundering- Implementing GCG Prinsiples and Its Challenges- Cyber Law Course- One Day Seminar about Bankruptcy Regulations in Indonesia- Officer Development Program II

Maksimedia, 2018OJK, 2017

Indonesia Financial Service Association, 2016National Governance Policy Committee, 2013National Center for Sustainability Reporting, 2013PT Bank Danamon Indonesia Tbk, 2013Adira Finance dan Karim Business Consulting, 2012Lex Mundus Training and Consultancy, 2010Adira Finance, 2010APPI and PPATK, 2008

PT Bank Danamon Indonesia Tbk, 2008PT Bank Danamon Indonesia Tbk, 2007Fakultas Hukum-UI, 2000Ministry of Law 1999PT Bank Tata International, 2016

Certification

- Certification from Certification from Sertifikasi Profesi Pembiayaan Indonesia (SPPI)

- Certification from Certification from Sertifikasi Profesi Pembiayaan Indonesia (SPPI)

SPPI, 2019

SPPI, 2016


Co

rpo

rate

Data

Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


03Chapter

SENIOR OFFICERSPROFILE

Suang Siang Susanto Deputy Director Head of Operation

Age

54 years old


Education

Bachelor of Accounting Universitas Tarumanagara (1991)

Work Experience

PT Giri Asih Jaya Finance Controller

PT Inti Salim Corpora Internal Audit Salim Group

Training

- Leader As Coach- Risk Based Audit Training - Introduction to Lean Six Sigma Training- Danamon - Insead Leadership Academy- Global Overview on Islamic Financing Training - Adira General Manager Development Program- Training Pengenalan Lean Six Sigma- Applied Project Management - Leadership in Project Management

Transforma Consulting, 2003 & 2005Pricewaterhoue Coopers, 2004YPIA, 2006Insead the Business School for the World, 2008Karim Business Consulting, 2012PT Adira Dinamika Multi Finance Tbk, 20142014Australian Institute Management, 2015Avenu Indonesia, 2018

Certification

Certification from Certification from Sertifikasi Profesi Pembiayaan Indonesia (SPPI)

SPPI, 2017


Senior Officers Profile

Ingrid Sri Komala Dewi Head of Quality Assurance

Age

48 years old

Indonesian and domicile in North Jakarta

Education

Bachelor of Accounting Tarumanagara University, 1995

Work Experience

- Ernst & Young Accounting Firm- Deloitte Touche Tohmatsu Accounting Firm

Senior AuditorAudit Supervisor

Training

- Basic Principles of Internal Audit, Interview Technique and Fraud Detection- Risk Based Audit Training- Team Mate Programme Training - Team Mate Programme Training- Know Your Customer - Adira Finance Training- Fraud Mitigation & Investigation Training- Inspirational Sharing, AMDP 12 - PROSDEM BATCH 2 dan FISH!

Phylosophy Audit Training - Training AGMDP BATCH 1- Amazing Service Training, Operational Excellence Training dan Training

Tutorial Sertifikasi CIA- Fraud Investigation, Fraud Investigation Course - Digital Forensic Course –

Lanjutan,Training Kinerja Keuangan, TTT Durable Goods Batch 1, Training Team Mate Versi 11 dan Culture Retreat Top Team

- Amnesty Tax, Training Fraud Investigation- Audit Report & Investigation Report Writing Training- Digital Awareness RIS Consulting- Sharing Digital Transformation “Strugling in Digital Era and Helping Others

to Succeed”- Inspirational Sharing “Innovation In Digital Era”- Mari Perangi Pencucian Uang dan Pendanaan Terorisme- Mini Sharing Harmony in Life with Family- Customer Centric- Happy Employee Awareness

Yayasan Pendidikan Internal Audit, 2005Bright Consulting, 2005PricewaterhouseCoopers, 2005PricewaterhouseCoopers, 2006PT Bank Danamon Indonesia Tbk, 2006PT Bank Danamon Indonesia Tbk, 2007PT Adira Dinamika Multi Finance Tbk, 2013

Prasetiya Mulya, 2013PT Adira Dinamika Multi Finance Tbk, Universitas Indonesia, 2014PT Adira Dinamika Multi Finance Tbk, PT Bank Danamon Indonesia Tbk, Centria, 2015,

PT Adira Dinamika Multi Finance Tbk, PT Bank Danamon Indonesia Tbk, 2016PT Bank Danamon Indonesia Tbk, 2017Alamanda (Ex VP Gojek & Founder of Binar Academy)

Arief Must'ain, 2019PT Adira Dinamika Multi Finance Tbk, 2019PT Adira Dinamika Multi Finance Tbk, 2019PT Adira Dinamika Multi Finance Tbk, 2019PT Adira Dinamika Multi Finance Tbk dan Prasetiya Mulya, 2019

Certification

- CIA Try Out- Certification from Sertifikasi Profesi Pembiayaan Indonesia (SPPI)

Adira Trade Centre (ATC), 2014SPPI, 2016 dan 2019


Co

rpo

rate

Data

Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


03Chapter

Miranti Hidajat Head of Operations Support

Age

51 Years old


Education

Bachelor of Accounting Atma Jaya University, 1990

Work Experience

Maxxi Securities Operation Manager

Training

- Adira General Manager Development Program- Danamon Leadership Academy – Senior Management Program- Digital Marketing – Integrating Online & Offline Strategy & Tactic- Service Quality Management- Organizational Change

Prasetiya Mulya Business School INSEAD SingaporeThe Marketing Institute of IrelandService Quality CenterRick Wilmot (Executive Wisdom Consulting)

Certification

Certification from Sertifikasi Profesi Pembiayaan Indonesia (SPPI) SPPI, 2017

Denny Riza Farib Deputy Director-Head of Credit & Collection

Age

47 Years old

Indonesian and domicile in Cibubur

Education

Bachelor of Mathematic Padjadjaran University, Bandung, 1996

Work Experience

PT Astra Sedaya Finance Account Acquisition Head, Account Service Head, Fleet Commercial Finance Account Management Head

Training

- Adira General Manager Development Program- Man Management Astra- Astra Supervisory Management Program- Astra Basic Training Program

Prasetiya Mulya - 2014Astra Management Development Institute - 2004Astra Management Development Institute - 2001Astra Management Development Institute - 1996

Certification

- Executive Program of Risk Management Certification for Financing Company

- Certification from Sertifikasi Profesi Pembiayaan Indonesia (SPPI)

BSMR, 2016

SPPI, 2015



Head of Credit

Henrick Kusno SujarwadiHead of Collection

Age

40 years oldIndonesian and domicile in TangerangEducation

Bachelor of Electrical Engineering Gadjah Mada University, 2002Work Experience

PT Astra Sedaya Finance Fleet Credit Admnistration HeadTraining

- Mediation for Solving Conflict - Training Leader As Coach, ASMDP

2014Prasetiya Mulya, 2014

Certification

- Certification from Sertifikasi Profesi Pembiayaan Indonesia (SPPI) - Certification from Sertifikasi Manajemen Risiko

SPPI, 2015, 2018Daya Makara, 2017

Age

43 Years old Indonesian and domicile in BekasiEducation

E-Business Magister of Management Bina Nusantara University, 2004Work Experience

PT Astra Credit Companies (ACC) Fleet Account Management Departement HeadTraining

- ESQ Basic Program- Mentor Training to Build Leadership- Managing People Effectively- Consultative Selling- ACC Business Manner- Basic of Credit Analysis for Account Officer- Leadership Development Program- Quality and Standardization- Apprisal of Used Car- IBOT – Management Trainee- Astra Basic Management Program-Management Trainee Program

Adira Finance, 2011Adira Finance, 2010ACC, 2008ACC, 2007ACC, 2007ACC, 2006ACC, 2005ACC, 2004ACC, 2004ACC, 2004ACC, 2004

Certification



Co

rpo

rate

Data

Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


03Chapter

Hendarto Nugroho Regional Collection Head Kalimantan

Age

47 Years old

Indonesian and domicile in Bekasi

Education

Bachelor of Business Administration Brawijaya University, 1995

Work Experience

Bank Bali Operation Support

Training

- Adira Management Development Program- Short Management- Adira Senior Management Development Program

ADMF, 2001Prasetiya Mulya & ADMF, 2015Prasetiya Mulya, 2002

Certification


Riyantono Head of Loan & Asset Recovery

Age

49 Years old


Education

Bachelor of Accounting Borobudur University, 1994

Work Experience

PT Surya Inti Perdana Accounting Supervisor

Training

-

Certification

- Certification from Sertifikasi Profesi Pembiayaan Indonesia (SPPI)Risk Management Certification for Financing Company (BSMR)

SPPI, 2016

BSMR, 2016



Ingrid Setiadharma Head of Legal

Age

52 years old

Indonesian and domicile in West Jakarta

Education

- Bachelor of Law- Advocate Professional Education

Tarumanagara University, 1990Indonesian Advocates Association (Peradi), 2009

Work Experience

- PT U Finance Indonesia- The Bank of Tokyo-Mitsubishi-UFJ, Ltd, Jakarta Branch

Senior Manager Legal/ ComplianceSenior Assistant Manager Legal/ Compliance

Certification

- Certification from Sertifikasi Manajemen Risiko- Certification from Sertifikasi Profesi Pembiayaan Indonesia (SPPI)

Badan Sertifikasi Manajemen Risiko (BSMR), 2017SPPI, 2019


Co

rpo

rate

Data

Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


03Chapter

Achmad KomaraHead of Operational Risk & Management

Age

44 years old

Indonesian and domicile in Bogor

Education

- Bachelor of Economics- Masters in Management

University of Indonesia, 1998Bogor Agricultural Institute, 2015

Work Experience

KAP Haryanto Sahari & Rekan (PricewaterhouseCoopers) Audit Manager

Training

- Training Audit Technique and Methodology - Training Fraud Policy, Risk Management and Independence - Adira Senior Management Development Program (ASMDP)- Service Quality for GM - Global Overview on Islamic Financing Training Karim Business

Consulting- Problem Solving and Decision Making Business Growth- Training and Try Out of Certified Internal Auditor (CIA) - Adira General Management Development Program (AGMDP)

PricewaterhouseCoopers, 2001PricewaterhouseCoopers, 2005Prasetiya Mulya Business School, Adira Finance, 2015Service Quality Center, Adira Finance, 2014Adira Finance, 2012

Adira Finance, 2013PPA FEB UI, Adira Finance, 2015Prasetiya Mulya Business School, Adira Finance, 2019

Certification

- Chartered Accountant (CA) - Certification from Bersertifikat Akuntan Publik (BAP) - Certification from Sertifikasi Profesi Pembiayaan Indonesia (SPPI) - Certification from Sertifikasi Manajemen Risiko

IAI, 2015IAI, 2003SPPI, 2016, 2019BSMR, 2019



Pramono PranotoHead of MIS & Analytics Center of Excellence

Age

41 years old


Education

- Master of Industrial Management & Master of Advanced Statistics - Bachelor of Industrial Engineering

Katholieke Universiteit Leuven, Belgium, 2004Trisakti University, 2001

Training

- SPSS Indonesia - Acorn Marketing Consultant

Senior ConsultantSenior Consultant

Certification

- Certification from Sertifikasi Profesi Pembiayaan Indonesia - Risk Management Certification

SPPI, 2017Daya Makara UI, 2017

Head of Corporate Financial and Procurement

Age

43 years old

Indonesian and domicile in Centraal Jakarta

Education

- Bachelor of Economics - Master of Management

University of Indonesia, 1994Australian National University (ANU) (2014-2015)

Work Experience sebelum di Adira

- PT Natrindo Telepon Seluler (Axis) - PT First Media Tbk - PricewaterhouseCoopers

Head of Network FinanceGeneral Manager Financial Planning & ControlFinancial Advisory Associate

Training

- Digital Transformation training- Digital Future of Procurement - Project Management Course - Preparatory Program Certified Financial Analyst

IBM, Deloitte Consulting, 2018-2019SAP, 2017Accenture, 2016Bank Danamon Indonesia, 2012

Certification

- Certification from Sertifikasi Profesi Pembiayaan Indonesia (SPPI) - Certification from Sertifikasi Profesi Akuntan Publik

SPPI, 2017IAI, 2010


Co

rpo

rate

Data

Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


03Chapter

Lindawati SoetopoHead of Accounting & Tax

Age

49 years old

Indonesian and domicile in East Jakarta

Education

Bachelor of Economics Atma Jaya Catholic University, 1992


- PT Bank Akita- PT Asco Dinamika Mobilindo- PT Tempo Group Tbk- PT Mitracorp Pacific Nusantara Holding Company

MIS ManagerFinance & Accounting ManagerInternal Audit SupervisorBudget Control

Training

- Sharia Financing Basic Education - Adira General Manager Development Program - Update New PSAK

Karim Consulting , 2012Prasetiya Mulya, 2013-2014PWC, 2019

Certification


Maria Sari Dewi Kusuma Head of Finance & Cash Management

Age

49 Years old


Education

Sarjana Ekonomi Akuntansi (S1) Universitas Katolik Widya Mandala, Surabaya, 1996

Work Experience

Bank Hastin Internasional Sebagai Account Officer (AO)

Training

- Business Development Executive Training- Adira Senior Management Development Program

Prasetiya Mulya Business School, 2004Prasetiya Mulya, 2014

Certification

Sertifikasi Profesi Pembiayaan Indonesia SPPI, 2019



Dodi Yuliarso Soewandi Deputy Director IT

Age

54 years old


Education

Bachelor of Electrical Engineering Doubled Major Telecommunication Northeastern University Boston Massachusettes USA (1989)


- PT Suzuki Finance Indonesia - PT Bank ICB Bumiputera Tbk- HSBC Indonesia - PT Bank Universal Tbk

Director of IT & OperationSenior Vice President/Head of ITVice President/Head of ITVice President/IT Infrastructure

Training

BSMR Basic Certification for Risk Management level 1 - level 3 GARP International, 2009, 2010,2011

Certification

- Certification COBIT - Certification from Sertifikasi Profesi Pembiayaan Indonesia - Certification from Sertifikasi IT Infrastructure Library (ITIL V4

Foundation)

Certified COBIT 5, 201520192019

Budi Pranoto Head of IT Business Applications

Age

41 Years old


Education

Sarjana Teknik Informatika Bina Nusantara University, 2001

Work Experience

- IT General Manager- IT Division Head

PT Suzuki Finance IndonesiaPT Mega Central Finance

Training

-

Certification

- COBIT 5 Foundation Certified- Certification from Sertifikasi Profesi Pembiayaan Indonesia (SPPI)

APMG InternationalSPPI


Co

rpo

rate

Data

Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


03Chapter

Tantri HariadiHead of IT Operation Management

Age

55 years old

Indonesian and domicile in Central Jakarta

Education

- Bachelor of Mathematics- Magister of Startegic Management

Bandung Institute of Technology, 1988University of Indonesia, 2014

Training

- Introduction of New Products and Technologies- Service Quality- Managing Change- Business Process Engineering

Oracle Inc, 2011SQC – Indonesia, 2014Accenture – Singapore Management University Change College, 2014NUS – Institute of System Science, 2015

Certification

Certification from Sertifikasi Profesi Pembiayaan Indonesia SPPI, 2017



Manuel D. Irwanputera Head of Digital Center of Excellence

Age

44 years old


Education

Bachelor of Electrical Engineering Atma Jaya Catholic University, 1997

Work Experience

- Co-Founder & CEO - Chief Operating Officer

PT KerjaKu Inti SejahteraPT Kreatif Media Karya

Training

- Salesmanship - Manajemen Proyek - Marketing Mix - Financial for Non Financial Manager - How To Be an Effective Manager - Total Success Community Congress - Lifer Revolution - Business Revolution Mars & Venus, At Workplace & At Home

AcademiaPusat Pelatihan ManajemenMarkPlus (Hermawan Kertajaya)(FINON) Pusat Pelatihan ManajemenAcademiaJames Gwee, Tung Desem Waringin & Andri WongsoGray (Writer of Men are from Mars & Women are from Venus),Tung Desem Waringin & AA Gym

Certification

-


Co

rpo

rate

Data

Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


03Chapter

Iyan Waer Head of Digital Product and Engineering

Age

40 years old


Education

- Bachelor of Electrical Engineering- Master of Management

Atma Jaya Catholic University, 2003Atma Jaya Catholic University, 2001


- COO & Co-founder - Product Owner - Senior Managing Consultant - Research & Development Manager

Swipecrypto Pte. LtdMcKinsey DigitalPhintraco ConsultingVerint Systems

Training

-

Certification

Sertifikasi Pembiayaan SPPI 2019

Edwin Kartawinata Head of Digital Business

Age

36 years old


Education

Bachelor of Computer Science Bina Nusantara University (Binus), 2005

Work Experience

- PT Liputan Enam.com- PT Kreatif Media Karya - PT Kreatif Media Karya - PT Monstermob Indonesia (Kapanlagi.com)- PT Monstermob Indonesia (Kapanlagi.com)

VP Marketing, 2018GM Marketing & Social Media Operations (2014 - 2017)Senior Product Development Manager (2013)Senior Business Development Manager (2009 - 2013)Senior Business Development (2007 - 2009)

Training

Certification



Head of Human Capital & General

Age

48 Years old


Education

Bachelor of Management University of Indonesia,1994

Work Experience before at Adira

- Grup Gunung Steel- PT Tunas Ridean Tbk- PT Heinz ABC Indonesia- PT Mattel Indonesia

Vice President of Group Human Capital DivisionVice President of Group Human Resource DivisionGeneral Manager Human ResourceCompensation, Benefits & Recruitment Manager

Training

- 2nd Asia Performance & Reward Workshop - Training on Succession Planning and Performance Appraisal - Job Evaluation Workshop - Problem Solving, Creative Thinking and Innovation Internal Training- Internal Training (Balance Scorecard, GE Way Implementation, Six

Sigma)

William M. Mercer, 2000Mattel, 2002Hay Consulting Group, 2002Heinz Leadership Academy, 2004PT Tunas Ridean Tbk, 2005-2009

Certification



Co

rpo

rate

Data

Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


03Chapter

Head of Corporate University

Age

47 years old


Education

- Bachelor of Electronics Telecommunications- Masters in Technology Management

Brawijaya University, 1996Bandung Institute of Technology, 1998

Work Experience before at Adira

- Engineering Education Development Project- ADB Loan - Basic Education Project –World Bank Loan

Procurement Specialist Assistant Procurement Specialist

Training

- General Management Program (AGMDP)- Certified Profesional Human Resource (CPHRM) - Organizational Development - Adira Senior Management Development Program (ASMDP) - Short Course – Financial Management Prasetiya Mulya Business

School, 2015- System Thinking Prasetiya Mulya Business School. 2017

Prasetiya Mulya , 2019QQ International, 2007GML, 2012Prasetiya Mulya Business School dan Adira Finance, 2014Prasetiya Mulya Business School, 2015

Prasetiya Mulya Business School. 2017

Certification




Tania Endah BudhiHead of Marketing Strategy & Customer Experience

Age

39 years old


Education

Bachelor of Industrial Engineering Bandung Institute of Technology, 2002

Master of Business Administration with Marketing & Strategy Specialization

Nanyang Business School, Nanyang Technological University-Singapore, 2007

Work Experience

- PT Indonesia AirAsia - PT Johnson & Johnson Indonesia - FMC Technologies Singapore- PT Toyota-Astra Motor

Head of Ground Operations and Customer ManagementFranchise ManagerBusiness AnalystMarketing Planning Executive

Training

- Adira Finance General Management Development Program (AGMDP)

- Agile Scrum Project Management- Design Thinking- Strategic Brand Management- Marketing Excellence - Natural Resources Management

- Advanced Marketing Management

Prasetiya Mulya Executive Learning Center

EkipaIBM, EkipaMarkPlusJohnson & Johnson South East AsiaNorwegian School of Economics & Business Administration, Bergen, NorwayEssec Business School Paris

Certification

Certification from Sertifikasi Profesi Pembiayaan Indonesia SPPI, 2017

namika Multi Finance Tbk 2019 Annual Repo


Co

rpo

rate

Data

Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


03Chapter

Wirdati Handayani Head of Brand & Communication

Age

53 years old

Indonesian and domicile in Bogor

Education

Bachelor of Industrial EngineeringMagister Management Technology

Bandung Institute of Technology, 1991Bandung Institute of Technology, 1998

Work Experience

- PT Coca - Cola Amatil Indonesia- CSSL Indonesia- PT Multipolar Corporation Tbk

General ManagerBusiness Solutions ManagerIndustry Specialist

Training

- Balance Score Card - Digital Marketing – Integrating Online & Offline Strategy- Service Quality- Adira General Manager Development Program- Integrating Finance & Marketing- Customer Relationship Management (CRM)- Leadership Development Program - Supply Chain Excellent - Logistic & Supply Chain Performance Measurement &

Benchmarking - Marketing Research - Oracle 11i modules - Enteprise Resources Planning Modules- AS/400 Control Language & RPG Programming dan Marketing &

Distribution Application School

Cognoscenti Consulting,The Marketing Institute of Ireland, 2014Service Quality Centre, 2014Prasetiya Mulya, 2014MarkPlus Institute, 2013Microsoft Texas, 2011PT Coca - Cola Amatil, 2006ELogistic, 2005ELogistic, 2004

INLINE, 2003Oracle Sydney, 2000Computer Associates & Marcam International, 1997-1998IBM, 1992-1996



Andreas Burhan Tasmaan Head of Business Analytics

Age

45 years old


Education

- Parahyangan Catholic University

Work Experience

PT. Bank DBS Indonesia

Training

-

Certification

BSMR level 1, SPPI Level 1 SPPI

Suwanto Head of Regional Sales and Distribution of Jabodetabekser

Age

48 Years old


Education

Bachelor Degree AKA Wikajasa, Semarang, 1995

Work Experience

PT Adira Dinamika Multi Finance Tbk Credit Marketing Officer

Certification



Co

rpo

rate

Data

Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


03Chapter

Insan Anshari Head of Regional Sales and Distribution of West Java

Age

50 Years old

Indonesian and domicile in Bandung

Education

Bachelor of Management Economics Islam Bandung University, 1994

Work Experience

PT Asuransi Central Asia Staf Marketing

Training

- Leader as coach- Global Overview on Islamic Financing Training- Adira General Manager Development Program

Transforma Consulting, 2005Karim Business Consulting, 2012Prasetiya Mulya University, 2013

Certification


Sugeng Hariadi Head of Regional SSD – JTM

Age

53 years old


Education

Bachelor of Informatics Management Budi Luhur College of Information and Computer Management, 1991

Work Experience

BPR Pularta Supervisor

Training

- Adira Management Development Program - Adira General Manager Development Program

PT Adira Dinamika Multi Finance Tbk, 2001PT Adira Finance, 2013

Certification




Krisdianto Head of Regional Sales and Distribution of East Java

Age

46 Years old

Indonesian and domicile in Surabaya

Education

Diploma 3 STIE Perbanas, 1998

Work Experience

PT Bumi Kalpataru (Distributor Customer Product) Salesman

Training

- Adira General Manager Development Program- TTT Couching n Counselling- BDET- Training Supervisory Skill

PT Adira Dinamika Multi Finance Tbk, 2014PT Adira Dinamika Multi Finance Tbk, 2009PT Adira Dinamika Multi Finance Tbk, 2005PT Adira Dinamika Multi Finance Tbk, 2003

Certification


Irfan Budianto Head of Regional Sales & Distribution JBT

Age

47 years old

Indonesian and domicile in Ponorogo

Education

Bachelor of Animal Husbandry Brawijaya University, 1996

Work Experience

PT Astra Sedaya Finance Risk Management Department Head

Training

- Adira Senior Management Development Program- White Belt Certification

Prasetiya Mulya, 2014 GE Capital Indonesia, 1998

Certification



Co

rpo

rate

Data

Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


03Chapter

Age

51 years old

Indonesian and domicile in East Jakarta

Education

- Bachelor of Commerce Administration - Magister Business Administration- Master Degree

Parahyangan Catholic University, 1987IPMI, 1992Carnegie Bosch Institute - Pittsburgh, 1997

Work Experience

- PT Bank Permata Tbk- PT Bank Prima Express

Retail Banking HeadProduct Development Head & Branch Manager

Certification


Rudy Widjaja Head of Business Partnership Management

Harry Latif

Age

47 years old


Education

Bachelor of Marketing Management Atma Jaya Catholic University, 1995

Work Experience

- PT Istana Mitra Sendany – Honda Mitra Group President Director

- PT Kirana Megatara Deputy Director of Sales & Marketing

Training

- Organizing Committee 1st World Junior Championships - Measuring Customer Satisfaction Seminar - Marketing Research for Decision Maker - Astra Total Quality Control, Astra Basic & Supervisory Training

Program, Business Process Re – Engineering

PBSI & IBF,1992PT Matrix Prima Adhitama, 1997ACNELSEN - SRI, 1997Astra Management Development Institute, 1996 - 2000

Certification



Age

44 Years old

Indonesian and domicile in Jakarta Selatan

Education

Sarjana Ekonomi Akuntansi Universitas STIE YKPN, 2000

Work Experience

Astra Credit Companies Sales Head

Training

- ASMDP (Adira Senior Manajement Development Program) Prasetiya Mulya, 2014

Certification



Age

49 Years old

Indonesian and domicile in Jakarta Utara

Education

Sarjana Ekonomi Universitas Atmajaya, 1995

Work Experience

PT Bank Bali Tbk Account Officer

Training

Leadership Academy – Senior Manajement Program Insead, Singapore, 2014

Certification


Andi Sutanto Deputy Director-Head of Retail Motorcycle Financing

Dwi Prasetiyo Head of National New Car 1 Marketing


Co

rpo

rate

Data

Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


03Chapter

Andy Teguh Head of National New Car 2

Age

43 Years old


Education

Bachelor of Economic Trisakti University (1998)

Work Experience

PT Federal International Finance Area Marketing Manager for Region Sumbar & Region Nangroe Aceh Darussalam

Training

- ASMDP – Adira Senior Management Development Program - Adira Spiritual Team Sinergy Training - Global Overview on Islamic Financing Training - Man Management Astra- Sun Tzu in Marketing - Trainee For Trainers - Fundamental Leadership Program

Prasetiya Mulya (2014)Adira Finance (2012)Karim Business Consulting (2012)Astra International (2006)James Gwee (2005)PT Federal International Finance (2006)Dale Carnegie Training (2005)

Certification


Ronald Donna Head of National Used Car

Age

37 years old


Education

Bachelor of Computer Science Dian Nuswatoro University, 2004

Work Experience

PT Astra Credit Companies (ACC) Branch Manager

Training

- Astra Basic Management Program Astra International, 2006

- Managing People Effectively People Sight , 2008

- Adira Senior Manager Development Program Prasetiya Mulya , 2014

Certification




Agus Hamid Arief Head of National Sales Fleet

Age

49 Years old


Education

Bachelor of Accounting STIE YPKP, 1993

Work Experience

PT Citra Janesia Persada Finance Officer

Training

-

Certification


Trianto Subekti Head of National Yamaha

Age

50 Years old


Education

Bachelor of Shipping Engineering Adhi Tama Technology Institute, 1995

Work Experience

PT Hobart Adi Hutama Assistant Manager

Training

-

Certification



Co

rpo

rate

Data

Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


03Chapter

Chandra Hermanto Head of National Honda NMCY

Age

46 years old

Indonesian and domicile in North Jakarta

Education

Bachelor in Economics YAI Persada Indonesia University, 1997

Work Experience

Pratama Finance Manager NMCY Division

Training

Adira Senior Management Development Program Prasetiya Mulya, 2014

Certification


Sugianto Head of National Used Motorcycle

Age

51 Years old


Education

Bachelor of Economic Tujuh Belas Agustus University, 1993

Work Experience

Astra-Daihatsu Marketing

Training

- Key Account Management- Adira General Manager Development Program

Markplus Institute of Marketing, 2008Prasetiya Mulya, 2014

Certification

- Risk Management Executice Program for Financing Company- Certification from Sertifikasi Profesi Pembiayaan Indonesia (SPPI)

BSMR, 2016SPPI, 2017



Antonius Danny HendarkoDeputy Director Head of National Non Dealer Channel Retention and Durable

Age

49 years old

Indonesian and domicile in Jakarta Utara

Education

Bachelor of Industrial Management Engineering Surabaya University, 1994

Work Experience

- Lippo Financial Group - PT Bank Lippo Tbk

Corporate Center Group Head Central JavaMarketing Department Head Central Java

Training

- Advanced Leadership Seminar- Microsoft Dynamic CRM untuk Sales & Marketing - Leadership Academy – Senior Management Program

ALS, Malaysia, 1997New Horizons, US, 2013Insead, Singapore, 2014

Certification



Co

rpo

rate

Data

Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


03Chapter


TESTIMONY

I started the frame business 14 years ago, with only 1 private car which I used at the same time for delivering frames to Bengkulu. In 2013, I decided to buy another car to deliver frames. At that time, the dealer recommended me to contact Adira Finance Lampung.

That was the beginning of my good relationship with Adira Finance. Adira Finance provided me with convenience financing process and easy installment payments through auto debit from Bank Danamon. Thank God, with those services, I always paid my installments on time despite my busy schedule.

Now, I have 2 transportation fleets, thanks to Adira Finance. Going forward, I hope Adira Finance will grow sustainably, so they can help more entrepreneurs like me to grow bigger.

NugrohoExcellent Frame


Co

rpo

rate

Data

Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


03Chapter

My parents started this restaurant business in 2010. Starting from a small restaurant near the market, now the restaurant is located at the edge of a busy street, and my parents gave their trust to me to run and manage this business.

I became a customer of Adira Finance in 2012, when I decided to buy a motorcycle to support my work mobility. Adira Finance offers an easy financing process with a variety

of products. Therefore, I have taken 4 multipurpose financings and 2 electronic financings, such as mobile phones.

As a customer, I always pay my installments at the Lampung Branch Office or the nearest Post Office. I hope that the installment payments at the Branch Office can be easier and the speed of financing approval process can be maintained or even increased. Thank you Adira Finance!

RyanSaudaraku” Padang Restaurant

HerlinaArin Salon & Grocery Store

I have started this salon and grocery store since 1999, but I just became a customer of Adira Finance in 2016. Until now, I have taken several financings for electronic and multipurpose. I feel happy with the conveniences, especially in terms of installment payments that can be done online, through the post office and branch offices.

This flexibility helps me who has high mobility. I hope that Adira Finance will continue to grow, concern more on small businesses like mine so we can grow together in the future. Thank you, Adira!


MANAGEMENTDISCUSSIONAND ANALYSIS

04


Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


04

Man

ag

em

en

t D

iscu

ssio

n a

nd

An

aly

sis

Chapter

Andreas Resort PahawangThe stunning Andreas Resort Pahawang is located on the island. It is surrounded by a mangrove forest and sits along the beach with crystal-clear blue water. It makes a perfect setting for enjoying the sunrise and sunset.


ContentsMacroeconomic and Industrial Review 146Overview of Operations by Segment 150

Motorcycle Financing 152Car Financing 156

Durable Goods Financing 160Overview of Operations by Region 162

Marketing 164Operations 170Human Resources 176Information Technology 188Financial Performance Analysis 193Other Material Information 208Material Commitments to Capital Expenditure 212Capital Expenditure in the Last Fiscal Year 212Commitment and Contingency 213Material Facts and Information Subsequent to Accountant’s Report Date 213Comparison of 2019 Targets and Realization 2142020 Outlook 214Dividend Policy 215Realization of Proceeds from Public Offering 216Employee/ Management Share Ownership Program 216Material Information Regarding Investment, Expansion, Divestment, Business Merger, Acquisition, and Debt/ Capital Restructuring

216

Transactions With Conflicts of Interest and Transactions with Affiliated/ Related Parties

217

Changes to Laws and Regulations with Significant Impacts to the Company 219Changes in Accounting Policies 221Compliance in Tax Payment 222


Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


04

Man

ag

em

en

t D

iscu

ssio

n a

nd

An

aly

sis

Chapter


AMID AN AUTOMOTIVE SALES THAT WAS

CHALLENGING THROUGHOUT 2019, ADIRA

FINANCE WAS ABLE TO KEEP ITS PERFORMANCE

BY POSTING AN INCREASE IN MANAGED

RECEIVABLES OF 6.7% y/y TO IDR54.8 TRILLION.

IN TERMS OF ASSETS, THE COMPANY POSTED AN

INCREASE OF 11.5% y/y TO IDR35.1 TRILLION IN

2019. IN ADDITION, ADIRA FINANCE CLOSED 2019

BY ACHIEVING A NET PROFIT OF IDR2.1 TRILLION,

AN INCREASE OF 16.2% y/y COMPARED TO 2018,

WHICH STOOD AT IDR1.8 TRILLION.

2.1 trillion

IDR

of Adira Finance 2019

37.9 trillion

IDR

New Financing in 2019


receivables by 2.7% y/y to IDR620.4 trillion (including the joint

MACROECONOMIC AND INDUSTRIAL REVIEW

GLOBAL MACROECONOMICSAccording to the World Bank, global economic growth in 2019 weakened to 2.6% y/y compared to the growth in 2018, which stood at 3.0% y/y. This was influenced by the impact of the continued decline in trade volume due to the impact of tense trade war between the United States (US) and China as well as reduced production activities in many countries. The US economy slowed due to declining confidence in economic actors triggered by slowing exports, which contributed to reduced non-residential investment and household consumption.

Similar developments also occurred in the economies of Europe, Singapore, Japan, China and India. This condition had an impact on the decline of oil and commodity prices, which subsequently led to weak inflationary pressures. Low levels of core inflation, falling global trade volumes, and contracted business confidence further slowed economic growth in Advanced Economy (AE) countries. Therefore, the majority of global central banks adopted a more accommodating stance up to the end of 2019.


Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


04

Man

ag

em

en

t D

iscu

ssio

n a

nd

An

aly

sis

Chapter

The Financial Services Authority (OJK) noted that the continued decline in commodity prices amid the tension that remains high in the US-China trade dispute compounded to the downside risk, which included potential for future economic growth, including in Emerging Markets (EM) countries. Various countries responded to this condition by loosening their monetary policy and providing fiscal stimulus. Meanwhile, the easing of uncertainties in the global financial markets has pushed capital inflows into developing countries.

DOMESTIC ECONOMYThe sluggish world economy impacted Indonesian domestic economic growth. Bank Indonesia posted the domestic economic growth in 2019 at 5.02% y/y while in 2018 it was posted at 5.17% y/y. Nevertheless, domestic exports improved slightly, although still experiencing a contraction, amid declining global demand and global commodity prices. The improvement in exports was influenced by, manufactured export products, such as vehicle exports to ASEAN countries and gold exports, which had positive growth. Net Exports contributed positively due to export growth in the second quarter of 2019 and a large contraction in import growth. In terms of business, all sectors grew positively driven by high growth in the services sector. In investment segment, particularly non-construction investment, is not yet strong, but the latest survey results indicated that it will increase in the fourth quarter of 2019, supported by the increasing confidence of business operators. Meanwhile, the growth of building investment was quite good driven by the development of national strategic projects. Household cosumption grew relatively stable was supported by low inflation and government social assistance.

Bank Indonesia data stated that household consumption growth was quite stable, supported by maintained purchasing power, which is inline with controlled inflation and ongoing fiscal stimulus policies. However, almost all components of household consumption are experiencing pressure.

Growth performance of Gross Fixed Capital Formation (PMTB) grew by 4.5% y/y, slightly showing down due to the influence of unfavorable global economic conditions and low primary commodity prices trend. However, the investment realization recovery trend indicated continuity up to the third quarter of 2019. Investment realization in the fourth quarter of 2019 reached IDR208.3 trillion or grew by 12.0% y/y. Realization of Domestic Investment (PMDN) and Foreign Direct Investment (PMA) grew by 18.5% y/y and 6.4% y/y respectively.

Meanwhile, Bank Indonesia decided to reduce the BI 7-Day Reverse Repo Rate (BI-7DRR) by 25 bps to 5.00%, the Deposit Facility interest rate by 25 bps to 4.25%, and the Lending Facility interest rate by 25 bps to 5.75% in October 2019. The policy is consistent with controlled inflation forecasts and attractive returns on domestic financial investment, as well as further pre-emptive measures to drive the momentum of domestic economic growth amid slowing global economic conditions.

5.02%Domestic economic growth in 2019


Inflation remains under control at a low and stable level. Annually, inflation in 2019 was posted at 2.7% y/y, lower than the inflation in 2018, at 3.1% y/y. Controlled inflation is influenced by the sustaining core inflation, supported by better inflation expectations along with the consistency of Bank Indonesia’s policy in maintaining price stability, well-managed aggregate demand, exchange rates moving in accordance with its fundamentals, and minimum influence of global prices.

On the other hand, the Indonesian Government experienced a deficit in the State Budget (APBN), reaching IDR353 trillion, 2.2% of GDP, as of December 2019. Government consumption continued to grow positively driven by increased spending on goods, particularly in the regions. Increased spending on goods in the regions is inline with the realization of Transfer to Regions and Rural Funds (TKDD), which until December 2019, was higher than the same period in the previous year. Realization of State Expenditures up to the end of December 2019 reached IDR2,310 trillion (93.9% of the 2019 Budget), an increase of 4.4% y/y compared to the realization in the same period in 2018. Realization of State Expenditures consisted of realization of Central Government Expenditures in the amount of IDR1,498 trillion, an increase of 3% y/y and Transfer to Regions and Rural Funds (TKDD) in the amount of IDR811.3 trillion, an increase of 7.1% y/y.

Realization of Central Government Expenditures in December 2019 increased by 3% y/y compared to the realization of the same period in the previous year, which consisted the expenditure of Ministry Institution (K/L) in the amount of IDR876.4 trillion and Non-Ministry Institution (Non K/L) expenditure in the amount of IDR.622.6 trillion, increased by 3.5% y/y and 2.3% y/y respectively. Achievement of state expenditure in 2019 demonstrates the government’s real commitment to maintain state expenditure amid the challenging global economy in order to maintain purchasing power of the underprivileged and vulnerable communities to meet their needs and as part of the effort to reduce inequality in Indonesia.

However, the realization of government revenues, which is predicted to be lower will influence government consumption. This was influenced by, global economic and trade activities, which weakened, inline with slowing global economic growth, as well as a decreased in trade volume and world commodity prices.

The trend of the Rupiah exchange rate continues to strengthen due to capital inflows, inline with the easing monetary policy in response to the outlook of weakening economy in developed countries. The exchange rate of the Rupiah against the US Dollar as of 31 December 2019 was posted at IDR13,901 per US dollar. On that account, the Rupiah has appreciated by 3.9% (ytd) compared to early 2019.

Meanwhile, foreign exchange reserves remain strong to support external resilience. Foreign exchange reserves was posted at USD129.2 billion up to the end of Desember 2019, an increase of 7.0% y/y compared to the position in the previous month of USD 120.7 billion up to the end of Desember 2019. The foreign exchange reserves remain adequate, supported by stability and good economic outlook, as well as being able to support the resilience of external sector and maintain the stability of the macroeconomic and financial system.

FINANCING INDUSTRYIn 2019, sales of new cars faced immense challenges from the escalating political tension of the general election and the decline in commodity prices. This situation had an impact on the people’s purchasing power in terms of postponing the purchase of luxury goods, such as cars. Up to December 2019, car sales decreased by 10.5% to 1,030.1 thousand units compared to 1,151.2 thousand units in the same period in the previous year. The decrease was a result of the trade dispute between the United States and China, which depressed the Rupiah exchange rate against the US dollar, subsequently reducing the people’s purchasing power. Along with this, the Indonesian Automotive Industries Association (Gaikindo) lowered the 2019 car sales target from 1.1 million units to 1 million units as a result of the sluggish automotive market in 2019 and political tension related to the 2019 general election.

Macroeconomic and Industrial Review


Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


04

Man

ag

em

en

t D

iscu

ssio

n a

nd

An

aly

sis

Chapter

Meanwhile, based on the data from the Indonesian Motorcycle Industry Association (AISI), as of December 2019, domestic motorcycle sales were posted at 6,487.4 thousand units, a slightly increased by 1.6% y/y compared to the previous year, at 6,383.1 thousand units. The slowdown in growth in motorcycle sales was due to the weakening of the regional economies due to falling commodity prices, particularly in Sumatra and Kalimantan regions.

The multifinance industry recorded at IDR620.4 trillion in financing receivables (including Joint Financing) in 2019, a slight increased by of 2.7% compared to IDR603.9 trillion in 2018. This was partly due to the declined in financing activities inline with weakening of purchasing power.

The development of financing receivables during 2017-2019 is as follows:

Financing receivables during the 2017-2019 period

Financing based on Sharia Principles

Investment

Multipurpose

Work Capital

approval

452

2019

415

2017 2018

436

4%

61%

6%

30%

4%

59%

6%

31%

7%

59%

6%

29%

Inline with this, total assets of the financing industry grew slightly by 2.6% y/y to IDR518.1 trillion in 2019 compared to the previous position of IDR504.8 trillion in 2018. Borrowing received by financing companies amounted to IDR358.4 trillion, a slight decreased by 1.4% y/y compared to the previous year, to IDR363.4 trillion.

Despite the growth slowdown in new motorcycle sales and the contraction of sales in the new car segment, Adira Finance’s managed receivables increased by 6.7% y/y to IDR54.8 trillion. The Company’s new financing in the passenger car segment slightly increased by 3.2% y/y to IDR10.0 trillion at the end of 2019. Meanwhile, Adira Finance’s commercial segment recorded a decline to IDR5.7 trillion, inline with the declined in commodity prices since the beginning of 2019. The composition between the commercial segment and the passenger segment were 36% and 64% respectively in 2019. Meanwhile, motorcycle sales grew by 6.2% y/y to IDR20.2 trillion up to the end of 2019. The new motorcycles segment increased by 7.1% y/y to IDR15.0 trillion, while the used motorcycles segment grew by 3.7% y/y to IDR5.2 trillion.

This achievment was supported by the company’s effort to optimaze its financing performance during 2019 in order to gain profit. At the same time, Adira Finance also continues to disburse financing while taking into account the prudence principle practice.


The scope of Adira Finance’s business activities includes

Financial Services Authority.

OVERVIEW OF OPERATIONS BY SEGMENT

Adira Finance is one of the leading financing companies in Indonesia that offers convenience for its consumer to own vehicles (new and used) from various brands with fast and easy financing requirements, long tenor, provision of Adira Dering 1500 511 information services, and service networks in more than 453 business outlets in Indonesia, as well as a secure BPKB (car title) storage system. Adira Finance also offers two financing systems that can be selected by customers (conventional and sharia). Adira Finance will always be present by providing diverse products and services according to the needs of consumers and provide a beneficial experience for their consumers. In addition, Adira Finance also launched digital products and services that are inline with consumer needs for four-wheeled vehicles and two-wheeled vehicles.

OPERATING SEGMENTSThe operating segment is a component of the Company that engager in business activities of which it may gain revenue and incur expenses, including revenue and expenses. Operating results are reviewed regularly by the operating decision maker to make decision regarding resouces allocations, and to assess its performance as well as taking intro account financial information. Segment results that are reported to the operating decision maker include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.


Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


04

Man

ag

em

en

t D

iscu

ssio

n a

nd

An

aly

sis

Chapter

Adira Finance manages its business activities and identifies its segments reported based on product categories and geographic area. The operating segments are reported according to the internal reports prepared for the chief operating who is responsible for allocating resources to specific segments and assessing their performance. All operating segments used by Adira Finance has satisfied reporting requirement based on PSAK 5 (2014 Revision).

Adira Finance has three reporting segments:

In addition to the operating segments, in carrying out its activities, Adira Finance reviews its performance in terms of the geographical segments as follows:

Serang (Jabodetabekser)

ADIRA FINANCE’S BUSINESS SEGMENTSAdira Finance was established on 13 November 1990, Adira Finance obtained a business license as a financing company from the Minister of Finance of the Republic of Indonesia as stated in the Decree of the Minister of Finance of the Republic of Indonesia No.253/KMK.013/1991 dated 4 March 1991. Along with the business expansion of Adira Finance and regulation of the financing industry, the Company diversified its business financing field on motorcycles and cars, namely sharia financing. This is in accordance with OJK Regulation No.35/POJK.05/2018 regarding Conduct of Multifinance Company and OJK Regulation No.10/POJK.05/2019 regarding Business Operation of Sharia Financing Companies, which became the basis for the Company to diversify its financing business.

The scope of Adira Finance’s business activities based on the Company’s Articles of Association dated 21 May 2015 is engaged in the financing and Sharia financing sectors, which is a Sharia Business Unit covering investment, working capital, and multipurpose financings, as well as other financing business activities based on the approval of the Financial Services Authority, operating leases and/or fee-based activities in accordance with the laws and regulations in the financial services sector, transaction financing, and services financing.

Adira Finance focuses on investment financing and multipurpose financing in conducting its main financing business activities. Investment financing is a type of financing for capital goods procurement as well as services required for business/investment, modernization, expansion or relocation of businesses/ investments provided for debtors with over 2 (two) years tenor. Multipurpose financing is a type of financing for the procurement of goods and/or services required by debtors for usage/consumption with an agreed tenor. Throughout 2019, Adira Finance has implemented various strategic policies in the financing business segment for various brands of motor vehicles. Adira Finance conducts financing activities through purchases with installments (or often times referred as consumer financing) and finance leases. The focus of Adira Finance’s financing products is the financing for various brands of motor vehicles for motorcycles and cars, both new and used.

Furthermore, since 2015, Adira Finance has also diversified its business by providing financing for durable products in order to provide more comprehensive financing product services for all customers. Adira Finance also provides financing for durable goods, such as computers, gadgets, furniture, and household appliances.

In 2019, Adira Finance successfully obtained new financing receivables and managed receivables by the Company amounting to IDR37.9 trillion and IDR54.8 trillion, while in 2018 the amount was IDR38.2 trillion and IDR51.3 trillion. The composition of new financing Adira Finance in 2019 consists of 57% for motorcycle financing, 42% for cars and 1% for durable goods.


Motorcycle Financing

DESCRIPTION OF THE MOTORCYCLE FINANCING BUSINESS SEGMENTFor nearly three decades, Adira Finance continues to innovate and strengthen its commitment to customer satisfaction and to develop products needed for the community, particularly in the automotive sector financing. Adira Finance also has two financing systems that can be selected by customers, namely conventional and sharia.

To date, the composition of motorcycle financing represents 57% of the Company’s entire portfolio, greater than car financing. This is mainly due to a number of factors, including more affordable price per unit for all classes of society, inadequate and uneven road infrastructure conditions, and the high level of traffic congestion in various major cities in Indonesia.

In 2019, domestic motorcycle sales reached 6.5 million units, a slightly increased by 1.6% y/y compared to 2018, which reached 6.4 million units. To address this, Adira Finance implements a strategy and policy to always strive to provide the best service and maintain the confidence of consumers and business partners to meet the needs of motorcycles, both new and used. In addition, Adira Finance has also transformed in order to respond to technological developments by launching digital platforms, such as “momotor.id” to provide digital services to consumers.

STRATEGY AND POLICY OF MOTORCYCLE FINANCINGAdira Finance provides financing facilities for the purchase of two-wheeled vehicles to take advantage of the large motorcycle market potentials in Indonesia. On the other hand, the Company is also aware that consumers in this financing segment tend to be more sensitive to purchasing power when there is a slowdown in economic growth and rising prices for various food commodities.


Market share of new motorcycle in 201911,8%


Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


04

Man

ag

em

en

t D

iscu

ssio

n a

nd

An

aly

sis

Chapter

Performance of the Motorcycle Financing Business SegmentIn a market condition that remains under pressure, Adira Finance has recorded the following distribution of new and used motorcycles financing for the 2017-2019 period

Business Contribution 2017 2018 2019

New Motorcycles

Total New Financing (Thousand Unit) 665 756 765

Total New Financing (IDR Billion) 11,700 13,995 14,988

Financing Growth 0.8% 19.6% 7.1%

Average Effective Annual Interest Rate 30-34% 30-34% 30-34%

Used Motorcycles



Financing Growth 14.8% 1.7% (0.4%)


In addition, the Company also diversifies its portfolio by financing various brands of motorcycles for both new and used motorcycles. The performance of Adira Finance during 2017-2019 is as follows:

Description2017 2018 2019

Thousand Unit IDR billion Thousand

Unit IDR billion Thousand Unit IDR billion

New Motorcycles

Honda 446 7,375 501 8,581 512 9,270

Yamaha 189 3,537 224 4,567 220 4,777

Suzuki 13 398 6 123 5 104

Kawasaki 7 152 15 459 16 484

Other 10 238 10 264 12 354

Total New Motorcycle 665 11,700 756 13,995 765 14,988

Total Used Motorcycle 673 6,407 644 6,518 611 6,490

Total Motorcycle 1,338 18,106 1,400 20,513 1,376 21,478

Composition of new motorcycle to total motorcycle financing

Composition of used motorcycle to total motorcycle financing

70% 30%


Adira Finance posted motorcycle financing segment at IDR21.5 trillion in 2019, an increased compared to 2018, which amounted to IDR20.5 trillion. In motorcycle segment, the income for the year only grew by 5.2% y/y to IDR1.9 trillion compared to the previous year, at IDR1.8 trillion. Total assets of the motorcycle financing was posted at IDR17.0 trillion, grew by 8.8% y/y compared to IDR15.6 trillion in 2018. Meanwhile, the liabilities of this business segment increased by 20.7% y/y to IDR13.4 trillion from IDR11.1 trillion in the previous year.

The performance development of the motorcycle financing business segment in the 2017-2019 period is shown in the following graph:

In IDR Trillion

Assets LiabilitiesIncome for the Year Consumer Financing

Income

13.4

17.0

11.111.1

15.6

14.0

201920182017

1.8 1.92.6

4.05.1

1.7

Pembiayaan Sepeda Motor



Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


04

Man

ag

em

en

t D

iscu

ssio

n a

nd

An

aly

sis

Chapter


STRATEGY AND POLICY OF CAR FINANCINGUnfavorable global and domestic macroeconomics in 2019 also contributed to the pressure on the automotive industry. The Indonesian Automotive Industry Association (Gaikindo) noted, up to the end of 2019, domestic car sales decreased by 10.8% y/y to 1.0 million units compared to the same period in the previous year, which amounted to of 1.2 million units. Nonetheless, Adira Finance managed to maintain the car finance market share of 4.4% up to 2019.

Facing these challenges, Adira Finance is implementing a financing strategy and policy that takes into account macroeconomic and domestic conditions in the car

DESCRIPTION OF THE CAR FINANCING SEGMENT In 2019, the Company continued to focus on business innovation and development. In the car financing segment, Adira Finance provides financing services for passenger and commercial cars, both new and used to the entire community and business partners. Adira Finance also finances various brands of two-wheeled vehicles, allowing Adira to be able to reduce the risk of a sales decline in one particular brand. In addition, Adira Finance also has two financing systems that customers can choose, namely conventional and sharia.

Car Financing



Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


04

Man

ag

em

en

t D

iscu

ssio

n a

nd

An

aly

sis

Chapter

financing segment in 2019 while continuing to disburse financing that takes into account the prudence principle. At the same time, car financing provided by the Company is complemented by the best service and maintaining the confidence of consumers and business partners to meet the needs for cars, both new and used. Adira Finance also continues to transform digital-based business processes to support the lending process in order to be more productive, effective, and fast in providing the best services to consumers.

PERFORMANCE OF THE CAR FINANCING BUSINESS SEGMENTIn the midst of the four-wheel vehicle industry’s conditions, which experienced a fairly steep double digit decline in 2019, Adira Finance strived to implement policies and strategies to minimize the impact of weakening four-wheel vehicle sales. In 2019, Adira Finance posted total new financing for cars reaching IDR15.7 trillion, a decrease of 6.6% y/y compared to 2018. Adira Finance provided financing to passenger cars and commercial cars with a respective contribution of 64% and 36%.

Inline with the increase in car financing receivables, income for the year of car financing segment was posted at IDR933.0 billion, a slightly increased by 4.6% y/y compared to IDR892.3 billion in 2018. This was also supported by an increase in consumer financing in 2019, which amounted to IDR2.6 trillion, grew by 20.0% y/y from 2018, which amounted to IDR2.2 trillion. The car Financing’s assets grew by 9.3% y/y to IDR11.6 trillion compared to 2018, which amounted to IDR10.6 trillion. Liabilities also showed a decreased by 12.8% y/y to IDR10.1 trillion compared to IDR11.6 trillion in the previous year.

Market share for new car financing

4.4%


The following table describes the operational performance of distribution of Adira Finance’s new and used vehicle financing in the 2017-2019 period:

Business Contribution 2017 2018 2019

New Cars

Total New Financing (Thousand Units) 48 56 45


Financing Growth 7.7% 26.5% (15.4%)


Used Cars



Financing Growth 4.5% 16.7% 6.2%


The following are the details of the financing of new vehicles based on brands in 2017-2019:


Thousand Unit IDR billion Thousand

Unit IDR billion Thousand Unit IDR billion

New Cars

Daihatsu 17 2,153 19 2,483 18 2,288

Mitsubishi 10 1,974 12 2,581 7 1,712

Toyota 6 1,123 7 1,196 6 1,132

Suzuki 7 980 9 1,167 6 917

Honda 4 785 3 622 3 506

Others 3 920 6 1,990 6 1,931

Total New Cars 47 7,935 56 10,038 45 8,485

Total Used Cars 62 5,969 68 6,850 70 7,272

Total Cars 109 13,804 123 16,888 115 15,757

Car Financing



Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


04

Man

ag

em

en

t D

iscu

ssio

n a

nd

An

aly

sis

Chapter

In IDR trillion


Income

10.1

11.6

11.610.8 10.6

10.3

201920182017

0.40.9 0.9

1.8 2.22.6

Growth of used car financing of Adira Finance in 2019

6.2%


DESCRIPTION OF THE DURABLE GOODS FINANCING BUSINESS SEGMENTAs a financing company that provides a ‘One-Stop Solution’ to consumers, Adira Finance provides various facilities through various financing products. Since May 2015, Adira Finance is committed to disbursing financing for durable goods (home appliances and electronics) with simple credit requirements, numerous payment options, and friendly information services (Dering Adira 1500 511). In the durable goods financing segment, Adira Finance also offers two financing systems, namely conventional and sharia. This type of financing is intended for loyal customers of Adira Finance to provide comfort and a memorable experience for the consumers.

STRATEGY AND POLICY OF DURABLE GOODS FINANCINGWith increasingly diverse customer needs, the Company disburses durable goods financing as a form of product diversification to meet customer needs. Adira Finance applies a durable goods financing strategy and policy by focusing the target on existing customer, then continuing to new customers. Adira Finance also provides convenience for the requirements of financing proposals for existing customers as well as an attractive loan interest policy.

PERFORMANCE OF DURABLE GOODS FINANCING BUSINESS SEGMENTIn 2019, Adira Finance disbursed new durable goods financing in the amount of IDR626 billion compared to that of 2018, which amounted to IDR804 billion. The financing composition of this segment consists of computers and gadgets (43%), household appliances (26%), household furniture (22%), audio-video equipment (4%), and other equipment (4%). The effective interest rate charged for these financing products as of 31 December 2019 is around 50-54% per year.

Durable Goods Financing



Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


04

Man

ag

em

en

t D

iscu

ssio

n a

nd

An

aly

sis

Chapter

In the durable goods financing segment, Adira Finance posted growth in consumer financing income of IDR630.3 billion, a decreased of 6.6% y/y compared to IDR674.8 billion in the previous year. Despite the decreased, profit for the year for this segment was posted at IDR347.9 billion, grew slightly by 1.1% y/y compared to IDR344.1 billion in the previous year. Supported by an increase in financing receivables in the durable goods segment, assets for this business activity were posted at IDR1.4 trillion, a decreased by 19.2% y/y compared to IDR1.7 trillion in the previous year. Meanwhile, liabilities in durables segment increased by 32.3% y/y to IDR147.9 billion from IDR110.1 billion in the previous year.

The development of the durable goods business segment during the 2017-2019 period is as follows:

In IDR trillion


Income

0.1

1.4

0.1

1.6

201920182017

0.40.5

1.7

0.2 0.3

0.70.6

0.3

A more detailed explanation regarding income by business segment can be viewed in the 2018 audit report notes which is inseparable part from the annual report.

Composition of durable goods in the form of household appliances.

26%Composition of durable goods in the form of computers and gadgets.

43%


INCOME AND PROFITABILITY BY SEGMENTS Adira Finance manages its business activities and identifies the reported segments based on product type and geographical area. Profit or loss from each segment is used to measure the performance of each segment. Information concerning the main business segments by product type in 2017-2019 is as follows:

DescriptionMotorcycle Car Durable Goods and others

2017 2018 2019 2017 2018 2019 2017 2018 2019Consumer Financing Income

2,633.0 3,955.8 5,104.6 1,829.5 2,236.4 2,615.8 497.7 674.8 630.3

Murabahah margin 1,904.5 1,199.0 653.7 451.6 346.3 217.9 0.0 0.1 0.7

Financing leases income

4.1 1.5 0.8 95.0 43.3 34.8 - - -

Interest expenses and financing charges

(865.6) (925.3) (1,111.0) (917.3) (792.3) (858.8) (13.1) (20.1) (7.9)

Revenue sharing for mudharabah bonds

(38.5) (54.7) (44.8) (1.8) (5.8) (11.8) - - -

Income for the year 1,666.6 1,761.8 1,853.5 400.8 892.3 933.0 396.4 344.1 347.9

Provision for impairment losses

1,077.6 (1,222.0) 1,414.6 (453.0) (425.6) (498.7) (130.9) (116.3) (74.1)

Assets 14,047.5 15,593.2 16,971.2 10,313.8 10,621.8 11,612.6 1,632.6 1,756.3 1,419.3

Liabilities 11,128.8 11,070.9 13,366.0 10,799.7 11,562.2 10,084.5 247.3 110.1 147.9

At the end of 2019, Adira Finance managed 453 outlets in its business network (including Sharia branch offices), including 192 branch offices throughout Indonesia which are spread across several regions in Indonesia. Adira Finance divides the geographical business segment into several operational areas, consisting of Jabodetabekser, West Java, Central Java, East Java, Sumatra, Kalimantan, Sulawesi, Bali, and Nusa Tenggara.


Overview of Operations by Region


Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


04

Man

ag

em

en

t D

iscu

ssio

n a

nd

An

aly

sis

Chapter

The following table describes the business performance based on performance by geographical area in 2017-2019:

DescriptionJava* Jabodetabekser

2017 2018 2019 2017 2018 2019

Operating income** 2,330.0 2,524.7 2,742.2 1,619.5 2,041,4 2,478.6

Interest expenses and financial charges

(568.0) (518.3) (617.5) (472.3) (488.9) (508.2)

Income for the Year 711.0 861.2 843.6 485.3 726,9 927.6

Assets 8,542.6 8,775.2 9,248.9 6,038.0 7,578,5 8,816.7

Liabilities 6,916.4 6,239.7 7,116.1 5,559.4 5,869,6 5,977.5

DescriptionSumatera Kalimantan

2017 2018 2019 2017 2018 2019

Operating Income** 1,517.9 1,732.2 1,728.9 680.4 756.4 781.6

Interest expenses & financial charges

(327.7)(312.8) (381.5) (140.2) (123.5) (122.9)

Income for the Year 500.0 598.3 506.7 252.6 311.4 322.0

Assets 5,329.0 5,143.3 4,789.3 1,889.9 1,981.9 1,914.7

Liabilities 4,048.4 3,957.0 4,375.2 1,700.2 1,543.7 1,455.0

DescriptionSulawesi Bali dan Nusa Tenggara

2017 2018 2019 2017 2018 2019

Operating Income** 967.1 1,057.4 1,131.0 300.5 342.8 396.3

Interest expenses & financial charges

(259.4) (283.7) (311.9) (68.7) (70.9) (92.3)

Income for the Year 324.3 349.2 358.7 118.9 134.1 142.8

Assets 3,731.0 3,735.6 4,204.1 1,065.0 1,229.3 1,414.4

Liabilities 3,190.1 4,076.9 3,656.1 819.2 1,113.8 1,073.0

Note:* Consists of West Java, Central Java, and East Java.**Consists of consumer financing, mudharabah margin, and finance lease income.

Java regions (Java and Jabodetabekser) had the largest contribution as compared to other geographical regions for operating income contribution (56.4%), interest expense and financial charges (55.0%), income for the year (57.1%), assets (59.4%), and liabilities (55.4%) in 2019. The biggest contribution from Java is due to the vital role of the island to the Indonesian economy, in addition to the highest population density as compared to other islands in Indonesia; hence, it has the most dominant financing market in Indonesia.

A more detailed explanation regarding income by areas can be viewed in the 2019 audit report notes which is an inseparable part from the annual report.


Adira Finance continues to innovate in developing consumer

transformation that focuses on the consumers (customer

MARKETING AND MARKET SHARE

The global economic slowdown has influenced the current domestic economy. In 2019, the domestic economy only posted a growth of 5.02%, slightly slowing down compared to growth in 2018 of 5.17%. The decline in economic growth brought pressure on automotive sales in the domestic market as one of the main pillars of the financing industry in Indonesia. The strategic role of this industry is supported by the offering of vehicle financing facilities to consumers for the purchase of a variety of automotive products, both two and four wheels.

In addressing business competition in the increasingly fierce finance industry and responding to dynamic market demands, the Company continues to innovate in order to improve services to consumers in accordance with its target market. Adira Finance prepares marketing plans and strategies that focus on achieving excellence in serving the customers, increasing financial performance, strengthening and sharpening HR capabilities, and focusing fully on the customer: customer-centric. Adira Finance also actively provides a variety of competitive financing facilities and builds as well as maintains quality relationships with each of its customers.


Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


04

Man

ag

em

en

t D

iscu

ssio

n a

nd

An

aly

sis

Chapter

Throughout 2019, Adira Finance optimized its sales and marketing functions by sharpening the organizational structure. The marketing function concentrates on responsibilities, among others by setting the marketing strategies and policies, preparing new marketing products and approaches based on consumer needs and preferences, introducing and implementing the customer intimacy concepts throughout the Company, establishing close relationships with the dealer networks, developing new partnerships as sales channels, including partnerships with digital companies, establishing brand strategies and corporate communications, and conducting data analytics activities to support the decision making process. The ultimate objective is to be able to provide products and services that focus on the customers - customer-centric.

MARKETING STRATEGYIn 2019, Adira Finance carried out various effective marketing initiatives and strategies in order to respond to consumer needs:

as the Group (Adira Insurance, Bank Danamon & Bank MUFG), Organizing Cross Sell, Funding, and Dealers, as well as increasing distribution network expansion;

image in the conventional and sharia financing segments as well as sales distribution through the digital platform (Momobil, Momotor, Adiraku), and E-commerce (Tokopedia, OLX)

Partnership) to reach market segments in rural and remote areas in support of financial inclusion;

development of various fee-based product activities, including insurance products such as bancaassurance;

digital technology, including the application of electronic contracts, developing digital applications for consumer services via mobile phones, as well as developing a digital loan application processing system;

improving the quality of services in branches and developing the telesales organizations for direct sales to consumers;

products by adding sharia branch offices.

MARKETING EXPENSES AND MARKET SHAREIn 2019, Adira Finance spent a total of IDR769 billion for its marketing activities. This amount was an increase from the previous year, which amounted to IDR723 billion. As a result, Adira Finance was able to maintain a strong market share in the new motorcycle financing segment as reflected in the Company’s market share of financing approximately 11.8% of total motorcycle sales in 2019.

At the same time, the Company was also able to maintain its market share in the new car financing sector in 2019 at 4.4%. At the end of 2019, the Company posted a managed receivables of IDR54.8 trillion, making the Company the largest financing company in Indonesia. Given its managed receivables, the Company is able to maintain a strong market position in the future with funding the support as well as infrastructure development, the Company’s extensive distribution network, and good relations with key motor vehicle dealers.


The following is information on the Company’s market share in 2019:

Description 2017 2018 2019Assets Industry

(IDR trillion)477.2 504.8 518.1

Adira Finance (IDR trillion)

29.5 31.5 35.1

Market Share to the Industry 6.2% 6.2% 6.8%

New Financing Receivables Industry 414.8 436.3 452.2

Adira Finance 32.7 38.2 37.9


Sales of New Motorcycles (thousand unit)

Industry 5,886 6,383 6,487

Adira Finance 665 756 765


Sales of New Cars (thousand unit) Industry 1,080 1,151 1,027

Adira Finance 48 56 45


In 2019, the company’s assets accumulated for 6.8% of the financing industry, while Adira Finance’s financing receivables post contributed 8.4%. This contribution is significant considering there were 184 financing companies active in Indonesia in 2019.

In terms of automotive product financing, the market share of the Company’s new motorcycle financing reached 11.8% in 2019. Meanwhile, the market share for new car financing reached 4.4%. The stable market share of these two automotive product financing supported by many Company efforts, strategies, and innovations in the marketing of financing products.

Marketing and Market Share


Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


04

Man

ag

em

en

t D

iscu

ssio

n a

nd

An

aly

sis

Chapter

2019 MARKETING TARGETS AND REALIZATION, AND 2020 OUTLOOKUp to the end of 2019, the Company maintained a solid performance amid weakening sales in the automotive industry. This achievement was supported by appropriate and effective Company marketing plans and strategies adopted in alignment with current market conditions. By adopting a “customer centric” mindset, Adira Finance also continues to provide the best service for the community, supporting performance, allowing the Company to grow by providing a diverse customer-driven selection of products.

In addition, the Company is also committed to building long-term cooperative relationships with its consumers and business partners through the logo and tagline “Sahabat Setia Selamanya” (Faithful Friends Forever), as well as the efforts of the Company to implement various promotions and on-going programs, such as the Pesona Lokal Festival, which is inline with the Company’s corporate branding. This is a manifestation of a long-term business strategy believed to be able to support sustainable performance.

The following are some of Adira Finance’s performance achievements and projections:

Description 2019 Target 2019 Realization 2020 OutlookNew Financing Disbursement (IDR billion) 37,300 37,861 5%-10%

Market Share of New Motorcycles (%) Diatas 11.0% 11.8% Above 11.0%

Sales of New Motorcycles (IDR billion) 21,360 21,478 5%-10%

Market Share of New Cars (%) Diatas 4.0% 4.4% Above 4.0%

Sales of New Cars (IDR billion) 15,327 15,757 0%-5%


2020 STRATEGIC PLANIn 2020, the Company’s strategic plan and marketing focus are as follows:

and streamline the credit process, open additional digital distribution networks through e-commerce, as well as establish strategic cooperation with third parties with technology platforms that support digital instant loan processes;

services through mobile applications, whatsApp chat, and call centers;

developing analytic-based marketing campaigns, developing telesales functions, and developing a customer loyalty reward program;

in the conventional and Sharia financing segments;

systematically in marketing staff at the Branch Office to increase customer retention and loyalty;

pillars, such as the Group (Adira Insurance, Bank Danamon & Bank MUFG), Cross Sell, Funding, and dealers, as well as increasing the distribution network expansion;

Partnership) to reach market segments in rural and remote areas, as well as in support of financial inclusion;

the development of various product-based activities, for example insurance products such as bancaassurance;

BUSINESS PROSPECTSThe World Bank projects global economic growth for 2020 to be 2.7%, relatively better along with the recovery in trade and investment. However, the level of uncertainty and looming risk is still very high. The impact between US and China trade relations and geopolitical risks can derail global economic recovery, as well as affecting domestic economic growth and foreign capital inflows as a support for external stability.

Bank Indonesia stated that Indonesia’s economic growth is predicted to increase towards the midpoint of the 5.1-5.5% range in 2020. Inflation is also predicted to be below the midpoint of its target range of 3.5±1% and maintained within the target range of 3.0±1% in 2020, which will help maintain consumer purchasing power.

On the other hand, the Ministry of Finance estimated that the development of world oil prices would fall and be estimated at US$63/barrel in 2020 or lower than the 2020 State Budget Draft proposal of US$65/barrel. Meanwhile, the Government and the House of Representatives agreed that in the next year oil lifting could be optimized to 755 thousand barrels/day, which is higher than the proposed 2020 State Budget Draft of 734 thousand barrels/day. Basic macroeconomic assumptions in the 2020 State Budget can be viewed in the following table.

Marketing and Market Share

Indicator 2019 2020 ProjectionsEconomic Growth (%) 5.02 5.3

Inflation Rate (%) 2.7 3.1

Rupiah Exchange Rate (IDR/USD) 13,866 14,400

3 months treasury bills interest rate 5.6 5.4

Indonesia’s Crude Oil Prices (US$/ Barrel) 62 63

Oil Lifting (thousand barrel per day) 746 755

Natural Gas Lifting (thousand barrel oil per day) 1,060 1,191

Source: Ministry of Finance

The infrastructure budget in the 2020 State Budget reaches IDR423.3 trillion. The budget allocation, among others, is directed to encourage the acceleration of infrastructure development supporting the transformation of industrialization and to respond to the Industrial Revolution 4.0, encouraging infrastructure development in urban areas to anticipate urbanization (including urban mass transportation, clean water and sanitation, and livable housing), as well as supporting equitable distribution of development between regions.


Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


04

Man

ag

em

en

t D

iscu

ssio

n a

nd

An

aly

sis

Chapter

Facing the coming year, the unstable global economic conditions will affect the domestic economy and will ultimately affect sales in the automotive industry sector in 2020. Nevertheless, opportunities for business growth in the financing sector are still open inline with projections of Indonesia’s economic growth in 2020. The need for financing, particularly in the investment and working capital sectors, is expected to increase along with the improvement in Indonesia’s economic growth.

The Indonesian Automotive Industry Association (GAIKINDO) projects the automotive sales in 2020 to potentially grow by 5% to 1.05 million units in 2020, compared to the estimate for this year at 1 million units. This optimism is based on the condition of the domestic economy next year, which is believed to be better than 2019, a decrease in the benchmark interest rate, and political stability.

Improvements in the Indonesian economy will provide a more favourable climate for the development of the financing sector in 2020. In addition, government policies that support the business climate and continued government spending on infrastructure are predicted to boost the level of public confidence and consumption, which will support the growth of the motorized vehicles financing industry.

BUSINESS SUSTAINABILITY INFORMATION

Global macroeconomic volatility that puts pressure on the domestic economy, is one of the factors that have the potential to affect the Company’s business continuity. Indonesia’s economic growth in 2019 was posted at 5.02%, with interest rates at 5.00%, as well as maintained inflation that have an influence on people’s purchasing power and an effect on the automotive sales and financing industry in Indonesia.

Management Assessment to Manage

on Business SustainabilityManagement believes that the abovementioned economic indicators can be maintained and managed properly by the Government. Amid high instabilities in the global economy, the domestic economy was

able to grow quite well. Management in the fiscal and monetary sectors that support each other is expected to provide stronger economic fundamentals while simultaneously reduce the dynamics occurring in the global economy. This is expected to strengthen the financial sector in Indonesia, including the financing industry, particularly in facing fluctuations of the Rupiah against the US Dollar, which is also faced by other countries.

Internally, Adira Finance has implemented business various measures that are required to manage the potential that has significant influence on business continuity by preparing and publishing the consolidated financial statements based on the latest and sustainable Financial Accounting Standards. Based on the 2019 performance achievement, Management considers that the Company’s business continuity is still very good.

The strength of the Company as one of the leading finance companies in Indonesia with a reliable track record and reputation is expected to maintain the continuity of Adira Finance’s business in the future. Equipped with strong shareholders, the Company’s high flexibility in obtaining funding sources from both domestic and foreign banking can be relied upon. In addition, with the “idAAA” debt rating, the Company has a competitive cost of fund from the Indonesian capital market, so that it is expected to be able to sustain the expansion of the financing business in the future. The company also obtained international credit BBB rating from Fitch, and Moody’s Baa2, both are investment grade, and are a equivalent with Indonesia’s sovereign rating. This is certainly strengthened by the digitally sustainable business transformation to respond to the rapid development of information technology.

Assumptions Used in Management AssessmentAssumptions used by the management in conducting an assessment on the Company’s business continuity, include among others global and domestic macroeconomics, operational performance, financial performance, level of liquidity and solvency, governance, as well as legal proceedings faced by the Company.


Adira Finance continues to strive to improve operational performance in order to achieve the established targets and business growth by expanding branch networks and customer reach throughout Indonesia.

OPERATIONS

During 2019, Adira Finance through the Directorate of Operations focused on various strategic initiatives to improve business processes and information technology development inline with current development. Business process improvement and information technology development are customer centric by providing financing services that meet the expectations, and needs of customers.

In principle, Adira Finance carries out its operational activities by emphasizing excellent execution, which is to appropriately and effectively realize Company policies in business processes. This serves as the basis of operational activities within the Company,

elevating consumers as top priority. Operational activities are also continuously adapting to support the performance and strategic policies of the Company with the objectives of achieving targets, growth, and sustainable business into the future.

BUSINESS OPERATIONAL PROCESSAdira Finance runs a financial services operational process that spans from credit applications, loan approval, installment payments, to credit settlement process. All service operations reach millions of customers throughout Indonesia with service networks in more than 450 business network nodes in Indonesia.


Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


04

Man

ag

em

en

t D

iscu

ssio

n a

nd

An

aly

sis

Chapter

Adira Finance also develops an extensive payment network to support the entire operational process of business activities, including its own internal network as well as the network of third party partners. Through the whole process, consumers are able enjoy convenient, fast, and easily accessible payment transaction services.

Potential Consumers’information

collection

Credit approvalby the CreditCommitteeInstallment

settlementsthrough facilitiesprovided by the

Company

Installmentrepayment by

consumers

Handover of AutomotiveOwnership

to consumers thathave fully settled

their debts

Informingconsumer on thecredit approval

via short message

PotentialConsumers’ initial

data entry


In 2019, Adira Finance continuously improved service quality for consumers and provided consumer service facilities through:

1. Automatic Teller Machines (ATM) Adira Finance collaborates with several banks in

providing installment payment services via ATM. Customers can conduct payment transactions through ATM machines and networks including that of PT Bank Danamon Indonesia Tbk (Bank Danamon Indonesia) ATM network, one of the largest banks in Indonesia. Bank Danamon Indonesia is supported by around 460 conventional branch offices, sharia units, and more than 60,000 ATMs and CDMs, through cooperation with ATM Bersama, PRIMA and ALTO, spread throughout Indonesia. In addition to physical networks, Bank Danamon Indonesia services can also be accessed through Danamon Online Banking, D-Mobile, and D-Card mobile applications, as well as SMS Banking.

2. PT Pos Indonesia (Persero) Cooperation with the state-owned enterprise

PT Pos Indonesia (Persero) has been conducted by the Company in the context of serving consumers who can easily access post offices, either on-line or off-line, depending on the infrastructure availability of an area.

3. Franchise Retail Network Adira Finance also cooperates with franchise retail

networks, including Indomaret, Alfamart, Alfamidi and Dan+Dan (Jabodetabek). Consumers can enjoy the convenience of paying installments via the wide-spread retail network outlets, in which on-line installment services are already in operation.

2019 STRATEGIC INITIATIVES AND ACHIEVEMENT Throughout 2019, Adira Finance implemented a variety of strategic initiatives in the operational field in order to comprehensively support the Company’s strategic policies in terms of systems, human resources, and organization. The Company’s strategic initiatives in the operational field were carried out to respond to the challenges of business development and increase the Company’s competitiveness in the finance industry.

Some of the initiatives developed in 2019 were:

data flow for each billing process to dealers, as Adira’s business partners, delivering data accuracy and processing speed.

Adira Finance carried out automation, centralization, and digitization to improve services to consumers and business partners, thus increasing the speed and accuracy of operational activities in each work unit.

Adira Finance continues to strive to increase the capacity and productivity of existing resources through improvement and development in operational processes. With increasingly fierce competition in the financing industry, the key to a company’s success lies in the ability to gain the market share, as well as to create efficiency. The Company implements both of these and generated as a result savings in operating expenses.

The Directorate of Operations works closely with the Directorate of HC & CREM, developing HR capabilities across various functions to keep pace with changes in the Company’s operational systems. Every function, especially those related to processes, is equipped with training and knowledge sharing, whether done through the superiors or through an online-learning system.

Operations


Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


04

Man

ag

em

en

t D

iscu

ssio

n a

nd

An

aly

sis

Chapter

BUSINESS NETWORK, CONSUMER FINANCING INCOME AND CONSUMER DISTRIBUTIONUp to the end of 2019, Adira Finance operates 192 branch offices, 40 Sharia branch offices, 220 representative offices, and 1 kiosk. Overall, as of 31 December 2019, the Company posted IDR37.9 trillion in new financing, a slight decrease of 0.9% y/y compared to the same period in the previous year, which amounted to IDR38.2 trillion. Meanwhile, in terms of revenues from consumer financing, Adira Finance posted a growth of 21.6% y/y to IDR8.4 trillion compared to the previous year, which amounted to IDR6.9 trillion. Adira Finance provides financial services to approximately 3 million active customers.

Business Network

Area Branch KCUS Satellite Kiosk TotalJabodetabekser 33 5 5 1 44

Jabar 20 4 18 0 42

Jateng 22 4 20 0 46

Jatim 25 5 19 0 49

Sumatera Utara 22 5 41 0 68

Sumatera Selatan 20 4 35 0 59

Kalimantan 18 1 25 0 44

Sulawesi 21 10 49 0 80

BNT 11 2 8 0 21

Total 192 40 220 1 453

Consumer Financing Income

RegionConsumer Financing Income (in IDR million)

2018 2019 change ( y/y) Jabodetabekser 1,721,296 2,313,163 34.4%

Jawa Barat 674,745 884,197 31.0%

Jawa Tengah 624,594 763,926 22.3%

Jawa Timur 618,096 707,776 14.5%

Sumatera 1,438,660 1,567,902 9.0%

Kalimantan 650,849 746,883 14.8%

Sulawesi 799,520 976,390 22.1%

Bali & Nusa Tenggara 339,183 390,411 15.1%

Active Consumer Distribution

RegionProduct

Car Motorcycle Non-Automotive TotalJabodetabekser 64,237 645,989 4,163 714,389

Jawa Barat 31,681 334,507 10,231 376,419

Jawa Tengah 13,555 336,362 9,747 359,664

Jawa Timur 21,142 290,562 12,888 324,592

Sumatera 74,073 399,503 48,247 521,823

Kalimantan 19,248 189,025 11,157 219,430

Sulawesi 64,976 160,531 55,629 281,136

Bali & Nusa Tenggara 16,398 93,426 2,576 112,400

Fleet 253 40 - 293

Total 305,563 2,449,945 154,638 2,910,146


2019 OPERATIONAL TARGETS & REALIZATION, AND 2020 OUTLOOKAdira Finance continues to support operational activities in order to achieve growth and business targets, one means of which is through network expansion and customer reach, as well as improving customer experience in order to provide the best service and increase market growth through a variety of strategic policies in the Company’s business processes. In addition, the Company has also implemented a digital-based business transformation, allowing daily operational activities such as document printing to be more paperless and operational systems have also become more integrated.

In addition, ease of access and reach for consumers continues to be improved in order to provide the best services, such as branch offices throughout Indonesia and increasingly diverse numbers of payment channels, such as through PT Pos Indonesia, Indomaret, Alfamart, VA, Adiraku, bank transfers, and Keday. Thus, the Company continues to strive to optimally improve its operational achievements in order to achieve the appropriate targets.

The following are the 2019 realization and targets as well as the 2020 outlook related to the Company’s operational activities:

Description 2019 Target 2019 Realization 2020 OutlookActive consumer (thousand) 3,050 2,910 1%-5%

Branches Office 190 192 195

Payment Channel 10 10 12

Operations


Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


04

Man

ag

em

en

t D

iscu

ssio

n a

nd

An

aly

sis

Chapter


Adira Finance continues to develop HR competencies through continuous education and training to increase employee productivity and support the achievement of the Company’s success.

HUMAN RESOURCES

2019 STRATEGY AND POLICYAdira Finance continues to demonstrate commitment to become the leading financing company through application of a Human Resources (HR) management framework to improve performance and service. On an on-going basis, Adira Finance continues to strengthen the organization by improving HR management, HR information systems, performance management, recruitment systems, compensation and benefits, career development, and HR competency development through continuous education and training.

To address technological developments and changes in the financing industry, Adira Finance realizes that development and management of HR competencies is one of the competitive advantage in supporting the achievement of the Company’s success. Therefore, Adira Finance conducts an HR management strategy aimed to fulfill current and future business needs and challenges. Adira Finance also plays an active role in ensuring that the Company’s HR has the competence, expertise, and commitment, remaining responsive to changes while behaving in accord with Company culture.


Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


04

Man

ag

em

en

t D

iscu

ssio

n a

nd

An

aly

sis

Chapter

The Company’s HR strategies and policies are inline with Financial Services Authority (OJK) Regulation No.28 POJK.05/2014 on Business Licenses and Financial Services Institutions. In one of its articles, the regulation mandates the obligation to develop policies on competence and knowledge development for employees in financing companies.

In 2019, Adira Finance prepared to adapt to all changes as well as generating new innovations. The transformation process to generate innovations and to adapt to the rapidly changing business environment has become a priority in the field of HR, including: Technology Transformation, Cultural Transformation, Strengthening Integrity and Anti-Fraud, and Nurturing Learning Ecosystems.

a. First focus: Technological Transformation In the midst of changes in the digital and millenial age, along with the business transformation that is taking place, Adira Finance is developing, infrastructure related to the Human Resource Information System (HRIS) based on the Digitalization process Among others:

Employees can inquire on personnel matters through the mobile-portal via personal

phones, including: making benefit claims, changing master data, reviewing payslip and e-attendance.

recruitment) Candidates, affiliated users/supervisors, and

recruiters are able to conduct recruitment activities in a nationally integrated on-line application system, accessible through mobile phone by candidates, affiliated user/supervisors, and recruiters. This E-recruitment will also integrate the Company’s sourcing channels to create a candidates’ Big Data that can be viewed by all recruiters throughout the country. Communication between recruiters, users, and candidates can also be conducted through this system. A new sourcing strategy is currently being developed through this system, namely the virtual job fair, which can be accessed by candidates anytime, anywhere.

and approval) The process of submission, verification and

approval of all-employment related matters in automated manner (paperless) to speed the SLA processes, for transactions such as employee request submission, submission


5.3%63% Millenial employees Adira Finance empleyee turnover rate, which is relatively low.

of changes in employee status, employee promotion, and others.

Enable the HRIS-Human Capital Management (HCM) system to be synchronized with other systems related to expense submissions and centralized asset management through Enterprise Resources Planning (ERP) application.

Appraisal System (IPASS) IPASS was developed with the objective of

summarizing individual performance on a monthly time scale. This application is expected to strengthen the performance management culture even further, more transparent data

management and personnel reports that are not only limited to quantitative factors but can also assist the business in identifying human resources development needs.

Mobile Apps Gardira On-boarding System is a mobile

application used by new employees containing guidelines to acquire knowledge regarding the Company and daily work. The first few days is a very important period for new employees, setting the stage for their future work performance. During this period, many employees find it difficult to adjust to the conditions at Adira Finance, which is new to them. On boarding activities are given even prior to their first day

Human Resources


Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


04

Man

ag

em

en

t D

iscu

ssio

n a

nd

An

aly

sis

Chapter

in the office, intended to allow new employees to get better knowledge about Adira Finance, starting from the Company culture up to the businesses the Company is engaged in.

Mobile Apps Adira Finance’s DigiLearnKeday is an

application specifically prepared for Keday partners of Adira Finance to help improve their performance, enabling them to have better contribution to Adira Finance. Keday partners of Adira Finance will find it easier to get information, tips and tricks, soft skills and hard skills training, introduction to Adira Finance products, and other information to support their daily activities as Keday partners of Adira Finance.

(RPA) The RPA was developed with the objective

of improving the quality and work standards of employees. With RPA, robots will perform operational and repetitive work on a large scale automatically, while employees can have more focus on developmental work.

The Corporate University will continue to develop mobile applications for learning

needs for all employees that can be easily accessed anytime and anywhere through their smartphones. With a new look that is more interesting and informative, all Adira Finance employees are expected to have more enjoyable and easy learning experiences.

Development of assessment tools in the form of 360 degrees assessment, which is used as one of the competency-based assessments by supervisors, subordinates, and peers on employees who will be promoted.

Mobile Approval applications A mobile and online attendance system

through employees’ devices/mobile phones, allowing employees to record work activities not only in the office but also outside the office. This application is also connected online with a leave/official travel permit system for employees.

The Fiori application is also equipped with a module that allows employees to do online approval through the employee’s device/handphone for all transactions that are on SAP HCM while conducting activities outside the office.

Number of Employees by Employment Status.

17.719.118.8

20.121.5

70.471.870.372.5

24.529.628.229.727.5

75.5

2015 2016 2017 2018 2019


b. Second focus: Cultural Transformation The second focus relates to the Corporate culture.

Adira Finance actively holds thematic activities and efforts to strengthen the Corporate culture each year. In 2019, the theme of strengthening the corporate culture was “Unity in Diversity Culture”.

Just like Indonesia that is united despite all differences within its multicultural society, Adira Finance employees in all branches and head office come from different background, ethnicity, race, and religion. Against this background, unity in diversity is vital to respect differences through the harmonisation, treating differences as a strength for synergy, complementary to each other, and helping each other.

The media used for the “Unity in Diversity Culture” activities include WA Blast related to the diversity at Adira Finance; nationwide screening of films related to Diversity; and holding several competitions with the theme of Unity in Diversity.

In 2019, Adira Finance also strengthened the values of employee integrity by conducting integrity culture workshops in all regions in conjunction with the Management Stepping Down Movement (GEMBA), a program that will continue in 2020.

c. Third focus: Strengthening Integrity and Anti-Fraud Adira Finance puts serious concern on the efforts to

maintain employees’ integrity and provides better understanding for employees regarding integrity and anti-fraud principles. In 2019, Adira Finance carried out activities related to strengthening integrity and anti-fraud, including Webinars, WA Blast: Integrity, Activation of change agents, and leader sharing.

d. Fourth focus: Nurturing Learning Ecosystem In addressing business transformation and the

rapid changes in the industry, employees are similarly required to adapt quickly. For this reason, a learning model in which skills and knowledge can be effectively learnt by all people is very much required. A learning ecosystem is to meet this challenge is being developed.

In the development of a learning ecosystem, the quantity and quality of the Company’s faculty members are improved, not only as teaching staff, but also as coaches and mentors. Various channels and modes of learning have also been developed to facilitate the interaction, both offline and online.

Learning programs are not only equipped with

training programmer, but also with a blended learning approach, that combines various channels and different modes of learning, as well as macro and micro learning approaches. Periodically, program effectiveness is improved through follow-up and program evaluation activities.

DATA ON NUMBER OF EMPLOYEES As of 31 December 2019, the number of Adira Finance employees reached 17,677 people, a decrease of 7.4% from the number of employees in 2018, which amounted to 19,098 people. The number of the Company’s employees is inline with the operational business needs in terms of both quantity and quality.

Human Resources


Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


04

Man

ag

em

en

t D

iscu

ssio

n a

nd

An

aly

sis

Chapter

Number of Employees by Directorate

Directorate 2015 2016 2017 2018 2019Compliance Directorate 26 24 25 26 34

Finance Directorate 104 97 113 102 101

HC Management & CREM Driectorate 116 145 141 297 316

Information Technology Directorate 103 115 131 134 153

Marketing, Customer Relationship, Management & Operation Directorate

20,466 19,840 - - -

Directorate of Operations - - 7,795 1,289 1,275

Sales & Distribution Directorate 174 171 - 8,087 7,700

Risk Management Directorate 274 254 312 8,775 7,651

Sales Portfolio Directorate - - 189 185 199

Marketing & Digital Business Directorate - - 68 118 172

Transformation Directorate - 4 7 7 7

Reporting Directly to the President Director 88 100 73 78 69

Number of Employees by Employment Status

Employment Status 2015 2016 2017 2018 2019Contract 5,864 5,976 5,308 5,655 4,325

Permanent 15,487 14,118 13,546 13,443 13,352

Total 21,351 20,094 18,854 19,098 17,677

Number of Employees by Level of Education

Level of Education 2015 2015 2015 2015 2019Post Graduate 70 73 76 85 85

Bachelor Degree 12,875 12,771 12,088 12,349 11,850

Diploma 4,506 4,149 3,843 3,781 3,527

Senior High School 3,891 3,092 2,841 2,878 2,212

Junior High School 6 6 5 5 3

Elementary School 4 3 1 - -

Total 21,531 20,094 18,854 19,098 17,677

Number of Employees by Position

Position Level 2015 2016 2017 2018 2019Board of Directors 7 7 5 5 5

Deputy Directors 4 4 8 9 8

Division Heads 64 68 65 68 72

Managers 739 685 688 710 729

Supervisors 4,076 3,949 3,835 3,972 4,114

Staff 16,641 15,381 14,253 14,334 12,749

Total 21,531 20,094 18,854 19,098 17,677

Number of Employees by Age

Age 2015 2016 2017 2018 2019<26 years old 2,533 2,819 1,877 2,167 1,602

26< - <36 years old 13,987 12,747 11,180 10,695 9,486

36< - <46 years old 4,594 4,291 5,398 5,737 5,971

46< - <51 years old 205 208 336 428 522

51< - < years old 28 26 52 70 90

>55 years old 4 3 1 1 6

Total 21,351 20,094 18,844 19,098 17,677


Number of Employees by Years of Service

Years of Service 2015 2016 2017 2018 2019<1 year 3,576 4,005 2,958 3,463 1,718

1< x <5 years 7,424 4,599 5,893 5,227 6,177

5< x <10 years 6,945 7,959 6,905 6,393 5,387

10< x <15 years 3,055 3,069 2,680 2,732 2,516

15< x <20 years 322 419 379 1,158 1,751

20< x <25 years 26 36 32 117 114

>25 years 3 7 7 8 14

Number of Employees by Gender

Gender 2015 2016 2017 2018 2019Male 18,177 17,032 15,871 15,838 14,307

Female 3,174 3,062 2,983 3,260 3,370

RECRUITMENT AND CAREER DEVELOPMENTAdira Finance through the HCGA Division implements employee recruitment system policies by rigorous selection and strict conditions to obtain the best potential, qualified, and superior candidates in accordance with the qualifications required by the Company. Management continues to guarantee objectivity in its processes and results, so that recruitment is carried out inline with corporate objectives and as an effort to provide opportunities for the workforce.

During 2019, the Company recruited 1,891 new employees. Of this total, 176 were permanent employees while 1,715 were contract employees. Based on level of education, 75% of employees have a Bachelor’s level education, 14% have a Diploma level of education, and the remaining 11% are recruits with post graduate, high school and junior high level of education. Based on age, the average employee recruited by the Company are at their productive level, namely around 18-25 years old by 34%, 26-35 years old by 62%, ages 36-55 years old by 4%, and the remaining that are above 55 years old with a total of less than one percent. Employee recruitment in 2019 aimed at meeting the Company’s needs in digital innovation, in support of target accomplishments, as well as the needs to realize the Company’s strategic policies.

The Company implements a proactive recruitment process, by establishing relationships with leading

universities, disseminating the Company’s business at the same time. This is carried out through the following approaches:1. Management engaging in teaching activities at

universities, among others, through ‘guest lecture’ activity. This program has been carried out since 2014;

2. Holding seminars at various campuses. In the seminar, Adira Finance promote members of management, including the President Director to be a guest speaker. In addition to seminars, ‘talkshow’ activities held at the campus are also organized by inviting the alumni from the campus as guest speaker;

3. In the “Adira Goes to Campus” program, the Company aims to strengthen its recruitment process by assessing employees through the Assessment Centre within the Talent Supply Management Department. The Assessment Centre is responsible for ensuring that candidates have the competencies required by the Company. Among others, psychological tests for new employees. Similar tests are also applied to those employees who are about to be promoted to a higher position;

4. The Company also has an internship program, collaborating with a number of institutions, among others Bina Nusantara University (BINUS) and Trisakti School of Management. In this program, each institute will send its best students to join the internship program in the Company. In addition to the proactive recruitment system, the Company is also actively promoting job opportunities

Human Resources


Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


04

Man

ag

em

en

t D

iscu

ssio

n a

nd

An

aly

sis

Chapter

through various media, such as digital media and others. The HCGA Division also utilizes the digital development to seek millennial talents through e-recruitment system, which will expand the sourcing bases in order to attract millennial talents.

Furthermore, in terms of career development, Adira Finance provides equal opportunities for each employee to achieve the highest level of position based on their abilities. Adira Finance has an organized career development program as well as promotions that are based on performance assessments and carried out through a tiered selection.

EQUALITY AND EMPLOYMENT OPPORTUNITIESAdira Finance is committed to provide the widest possible employment opportunities to the best candidates to join and pursue a career in the Company. The manifestation of the application of the equality and employment opportunity principles is applied to all Human Resource management processes, from recruitments, promotions, human resource developments to assignment practices, performance evaluations, as well as compensation practices.

In terms of employee recruitment, Adira Finance provides equal rights and opportunities to join and pursue a career regardless of religion, ethnicity, race, social status, skin colour, gender, as well as other individual characteristics, inline with the prevailing provisions, both internally and externally.

In career development, Adira Finance does not discriminate for any reason because it bases its decisions on selection results and evaluation results on competencies. Each employee is evaluated based on their respective potential, ability and expertise. Each employee is also provided equal opportunities to contribute in order to improve the Company’s performance without discriminating against individuals.

COMPETENCY TRAINING AND DEVELOPMENT

Adira Corporate UniversityIn order to provide the needed HR competency requirements for the Company’s business, Adira Finance established a Corporate University in 2015. The Corporate University is one of the Company’s strategies to ensure the supply and development of talents in a sustainable and targeted manner. Adira Finance ensures that all employees have equal opportunities to achieve the highest level of position based on their respective performance and potential capabilities through the Talent Supply Management in the Corporate University organization.

Through one of its pillars, namely the Learning Academy, Adira Finance Corporate University develops comprehensive HR with approaches from 3 aspects: IQ, EQ, and SQ, creating a consistent approach to HR development. In establishing a learning strategy, the company takes a macro and micro learning approach to ensure more sustainable learning outcomes. The learning strategy is implemented through close cooperation and coordination between the functions of Knowledge Management, Business Schools, and Learning Systems, enabling the creation of a blended process between conventional approaches and Digital Learning.

In implementing Digital Learning, the Corporate University has carried out various efforts, starting from UI/UX, integration between mobile applications into one application, SSO (single signed on), and uploading to the Android Playstore and Apple Store IOS. In terms of the conventional learning strategy approach, the Corporate University collaborates with leading educational partners to create long-term programs to prepare internal faculty membership (Faculty Members of Adira/FMA), which currently consists of 739 people. The programs include teaching capabilities, including in use of multimedia, coaching capabilities, interview skills, and curriculum development on interesting topics, such as mindmapping, presentation, Excel, and more. These programs are expected to enable Adira FMA to have reliable capabilities in developing the human resources of Adira Finance.


Human resources development is carried out to increase competence according to the demands of their respective job functions. This development also supports business transformation programs by improving understanding and skills to effect smooth business transformation and drive cultural transformation and other Adira management plans. Another objective is the provisioning for leaders and prospective leaders to continuously strive for Company sustainability, starting from the lowest level up to the highest level, through management trainee programs and higher ranked development programs.

Overall, the number of training days in 2019 increased by 60% compared to 2018, from 77,857 training days to 125,951 training days. In terms of composition, the use of digital learning has increased to 60% of all training days compared to 2018 at 30%.

In an attempt to develop human resources, the Corporate University also plays an important role in promoting an innovation culture in the Company through the annual programs In-No Limit Program, innovation program for the improvement of business processes, and Innocamp Program, innovation program to generate new business ideas.

In 2019, the In-No Limit program managed to acquire 194 improvement ideas from 477 participants, while the Innocamp program gathered 220 applicants from 46 universities throughout Indonesia that generated 5 finalist ideas.

Besides Adira Finance organizes the process of selecting and developing the right talent every year by performing improvements in several areas. In 2019, the improvement initiatives include:

the Online Promotion on the SAP Portal. Online Promotion will be carried out in stages based on the priority number of transactions and largest needs, starting from the promotion of the Section Head level. Online Promotion is one of the digitization methods that addresses the business needs for speed and ease to fulfill organizational

needs through an internal promotion process. Also Online Promotion increases the transparency of the promotion process because it can be directly monitored by related parties, including users.

out by mapping the potential and trends of employee performance over the past two years. The People Review Method is carried out as an anticipatory step for the Corporate University to prepare the best cadres and minimize competency gaps that arise due to changes in demands on of Human Resources. Also of employee into each of the Human Asset Value (HAV) quadrants has implications for the preparation of the next HR Strategic Plan in maintaining and retaining talents that have become corporate assets. Thus, Internal Successors needs in all core business at ADMF can be fulfilled.

In implementing effective and targeted Performance Assessments, Adira Finance assess of employee achievements by combining employees’ achievements towards BSC (Balanced Score Card), or KPI, and the process undertaken by the employee to achieve it. Parameters used within this process is the cultural parameter (ADIRA TOP), allowing employees that have achieved excellence and implemented Company culture to receive the appropriate appreciation.

In addition to employee development, the Corporate University also promotes Adira Finance’s vision to realize the mutual value for the welfare of the Indonesian society, through cooperation with the Ministry of Education and Culture to develop curriculum for the financing industry. The initiative has been implemented in many vocational high schools (SMK), spread over several regions throughout Indonesia.

In addition to curriculum development, the Company also provides internship opportunities for students Adira Finance branches, awards scholarships for outstanding students, promotes the development of teacher skills, and provides career opportunities at Adira Finance for students who satisfies the requirements.

Human Resources


Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


04

Man

ag

em

en

t D

iscu

ssio

n a

nd

An

aly

sis

Chapter

Competency Development Data

Type of Training Training ObjectiveNumber of Participants and Position Level*

SeniorManagement

MiddleManagement

Junior & NonManagement

Qualification Prepare the competency of a position holder according to a certain rank level

16 387 1,823

Mandatory Provide the required insights and knowledge for employees in order to carry out their duties and responsibilities properly, as well as ensuring business continuity through good corporate governance and risk mitigation

111 1,723 39,682

Functional Improve employee competency in accordance with the job function

1,290 6,156 55,513

Transformation Preparing employee competencies in carrying out the Company transformation programs

90 1,059 6,015

Additional Optimizing employees’ potential, enabling them to become more effective as individuals and as employees

91 39 1,362

COMPETENCY DEVELOPMENT COST/ INVESTMENTThroughout 2019, Adira Finance held 191 employee training and development programs, consisting of 1,179 training activities. The training activities were attended by 115,358 participants. Total investment for the Company’s HR development reached IDR53.4 billion, an increase of 10% compared to 2018, which amounted to IDR48.7 billion.

Employee Training 2015 2015 2015 2015 2019Number of Training Participants 32,640 118,010 75,958 129,002 115,358

Training and Development Investment (IDR billion)

33.1 36.6 38.8 48.7 53.4

CORPORATE CULTUREAdira Finance implements various Employee Engagement programs as an effort to maintain high-quality human resources, by applying the following principles:

growth

and contributions

and periodically

benefit system

the company, such as sports clubs, spritual communities, and other communities that can maintain togetherness, sportsmanship, and improve overall employees’ productivity.

The Company has organized several activities to apply corporate values and build employee engagement, such as Advaganza sports activities, such as futsal, badminton, basketball, yoga, tennis and table tennis; Adira Spiritual; Adira’s Anniversary; religious holidays; breaking the fast together; Team Building; Kick-Off Meeting; Integrity Program; as well as celebration of Indonesian Independence Day and other holidays.

In 2019, several award programs given to employees are as follows:

term leave as well as on-leave benefits;

(AFI);

Officer, Customer Service, Teller, Security);

Award.


INDUSTRIAL RELATIONSAdira Finance is committed to build and maintain industrial relations as a sound and constructive working relationship system between the employees and the Company, to ensure the realization and fulfillment of the protection of the interests, rights, and obligations of all parties following with the prevailing laws and regulations. Adira Finance also guarantees that all Company activities through the Directorate of HC Management have complied with the applicable labor rules and regulations, to reduce the potential for violations of human rights and industrial relations.

The ultimate goal of regulating industrial relations in the Company is to increase employee productivity and welfare. Therefore, Adira Finance also places employees/employee representatives as strategic partners in building and maintaining harmonious industrial relations in the work environment through regular and continuous communication.

Periodically, Adira Finance and employee representatives conduct both formal and informal meetings. Throughout 2019, Adira Finance and employee representatives held formal, routine meetings once a month in each business unit. There are additional meetings at the Regional and Head Office level, which are held as part of employee involvement, such as regional employee gathering activities, Adikreasi, Pesona Lokal Festival, ADVAGANZA, and others.

Employee representatives are also involved in formulating changes and updating Company Regulations every two years.

Through a series of meetings, harmonious industrial relations is expected to be created, which will develop a sound and constructive work environment.

EMPLOYEE TURN OVER RATEThe Company strives to maintain the optimal turnover rate for best employees (regretted attrition) to be within the range of 6%, with the achievement in 2019 of 5.3%, while the achievement stood at 5.2% in 2018, which is inline with the productivity and employee satisfaction level improvement on programs held by the Company.

REMUNERATION AND WELFAREThe Company applies the prudence principle in the provision of fixed and variable remuneration, by considering scale and complexity of the business, peer group, inflation rate as well as, financial condition and capabilities, as well as the Company’s performance. The Company’s remuneration policy is determined by considering the philosophy of remuneration as follows:

strategy

Adira Finance implements a meritocracy system, or awards for work performance or a merit system, and Risk Based Remuneration based on employee performance and the provisions of the Financial Services Authority. With this system, Adira Finance rewards employees according to the performance of each individual.

EMPLOYEE SATISFACTION LEVELTo support a favorable work atmosphere to encourage productivity, the Company also conducts employee satisfaction surveys through the Employee Engagement Survey (EES) regularly as well as the salary and benefit survey within the industry on annual basis, in collaboration with external consultants. By conducting this survey, management can assess the level of employee satisfaction, the level of employee engagement with the Company, the desire to promote the Company to others, and the salary level in the market.

The Company also routinely conducts the Organization Culture Health Index (OCHI) survey to measure the level of cultural soundness. This helps enable the Company to continue ensuring the level of organizational culture to be in the Fit category, supporting operations and increasing productivity amid business competition.

Human Resources


Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


04

Man

ag

em

en

t D

iscu

ssio

n a

nd

An

aly

sis

Chapter

Adira Finance has a health program, namely Wellness Program, which is a health insurance program provided for employees to support employee health within the Company. Through this program, Adira Finance regularly promotes medical check-ups for employees. To support this health program, Adira Finance continuously carries out health socialization to build a healthy lifestyle through workshops, seminars, posters, and more.

HR DEVELOPMENT TARGETS AND REALIZATION IN 2019, AS WELL AS 2020 PROJECTIONSAdira Finance understands that professional and high-quality Human Resources are crucial to support the Company’s business processes. In this matter, the Company plays an active role in preparing its HR in according to the current business needs and conditions. In 2019, the number of Adira Finance’s employees was 17,677, this number is adjusted to business growth and the number of employee needs of each division. The realization of salary and benefits in 2019 was posted at IDR2,139 billion, lower than the target of IDR2,321 billion.

Additionally Adira Finance has also carried out various initiatives to build employee development competencies, to produce high-quality human resources, having high potential and excellence according to the qualifications required by the Company. Up to the end of 2019 the number of training days conducted by the Company reached 125,951, higher than the established target of 90,028. The increase in training days is used to support increased understanding and skills, allowing Adira Finance’s business transformation to be implemented smoothly. Meanwhile, the realization of training and development costs carried out by the Company throughout 2019 is at 2.5% of the Company’s MP cost compared to the minimum target of 2.5%.

For the next year, Adira Finance is projecting that the number of employees will be stable compared to 2019, given the various initiatives to increase employee productivity that the Company has carried out in 2019. Meanwhile, the cost of salaries and benefits in 2020 is expected to increase corresponding to with the increase in the Regional Minimum Wage as established by the Government of Indonesia.

2020 STRATEGIC PLANNING AND HR DEVELOPMENT ROADMAPTo address the challenges and changes that occur due to disruption in the financing industry, different planning strategies are required. To that end, in 2020 Adira Finance will focus on carrying out the following strategic plans:

programs that are updated annually according to the Company’s business strategy, such as: providing rewards through the Best Employee Award program, Adira Frontliner Idol program, as well as routine employee productivity monitoring programs through the implementation of the Employee Productivity Monitoring (IMPK);

employees as an effort to increase their engagement with the Company while preparing employees for a more agile organization;

objectives of creating Happy Leaders, which will then create Happy Employees, which will ultimately achieve Happy Customers;

Ecosystem and its pillars, such as the FMA, or digital learning platform, to increase learning opportunities for every Adira Finance employee wherever they are;

Adira Finance to grow and transform quickly and precisely;

performance calculations as adjusted to existing conditions;

functions that have changed after organizational transformation.


Adira Finance always innovates through the development of the latest information technology to support the transformation of digital-based businesses in order to provide convenience and speed of service for consumers and business partners.

INFORMATION TECHNOLOGY

Adira Finance is aware that optimizing the utilization of Information Technology (IT) can drive the Company to achieve business growth, as well as enabling the Company to accommodate changes in an increasingly competitive financing industry. Utilizing IT is a necessity to increase the efficiency of operational activities as well as to provide excellent service quality to consumers and business partners. Adira Finance utilizes IT to provide the best service, minimize operational business risks faced by the Bank, as well as becoming a leader in the financing business.

Through the Information Technology Directorate, Adira Finance continues to innovate in providing ease of services for consumers and great benefits for business partners, as well as striving to minimize operational business risks. To support Adira Finance’s strategic policies, IT development is carried out continuously with the implementation of a reliable and flexible IT infrastructure, good IT governance, and supported by competent IT organization.


Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


04

Man

ag

em

en

t D

iscu

ssio

n a

nd

An

aly

sis

Chapter

INFORMATION TECHNOLOGY BLUEPRINTAdira Finance owns and regularly updates the IT Blueprint in order to develop IT within the Company environment and aims to support all processes of all business activities. Adira Finance’s IT Blueprint covers the development and maintenance of applications, infrastructure, post-launch technical service, data, security, budget organization, and risk management. The blueprint strategy maps out all the initiatives gathered at Adira Finance related to the development and availability of IT, both in the long-term and in the short-term.

In order to implement the IT Blueprint, Adira Finance has developed a comprehensive and strong organization. Thus, users of IT services and products are able to utilize the services and products to the maximum, in a timely manner. Adira Finance has also adopted various industry-recognized IT implementation standards, including:

Technology (COBIT), Information Technology Information Library, and POJK No. 38/POJK.03/2016 on the Implementation of Risk Management in the Use of Information Technology by Commercial Banks, which generally applies in the banking sector.


for the process of developing and managing IT Architecture.

2019 STRATEGIC INITIATIVES AND ACHIEVEMENT Throughout 2019, Adira Finance carried out various initiatives in order to develop IT services to support the Company’s business, among others:

modernization initiatives. ASSIST is an ERP (Enterprise Resources Planning) system for finance, cost controlling, fixed asset management, and e-procurement;

business analytics to support the development of the Company’s products and business;

microservices architecture technology for digital service for customers, to support digital business strategies in order to build a digital ecosystem;

simplifies and accelerates the development of new applications with enterprise standards to address the dynamic business needs;

Relationship Management) and CRM (Customer Relationship Management) needs, to build dealer loyalty to Adira Finance, and;

commencing the implementation of software-defined networking.

INFORMATION TECHNOLOGY GOVERNANCEInformation Technology Governance (IT Governance) is a process of managing leadership, organizational structure, and on-going business processes, in order to ensure that the Company’s IT organization is aligned with business strategies and objectives. Adira Finance took the initiative to continue to be at the forefront in the application of digital business in the financing industry. To support these initiatives, Adira Finance continues to strengthen its governance structure and IT organization to be even stronger, more solid, and more comprehensive, including:

Director, responsible for determining the Company’s IT strategic direction and strategic projects;

Information Technology, responsible for determining Adira Finance’s IT architecture platform;

of Information Technology, responsible for, among others decisions regarding changes in project priorities and implementation of strategic IT projects;

ensuring adequate IT project governance.

Adira Finance has added the standards set for IT, namely The Open Group Architecture Foundation (TOGAF) in the process of building and managing the Company’s IT Architecture. Adira Finance has also equipped the IT system with a speedy recovery mechanism in the event of a system disruption. Damage or disasters can occur due to natural disasters, such as floods and fires or damage to the production system. Potential for internal and external threats and risks can be identified early. As such, Adira Finance is capable to manage risks in a more adequate manner and able to mitigate the risk experienced by the Company in a timely manner.

Information Technology


Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


04

Man

ag

em

en

t D

iscu

ssio

n a

nd

An

aly

sis

Chapter

2020 STRATEGIC PLANTo improve competitiveness in the financing industry and inline with the Information Technology trends, Adira Finance will continue to make necessary adjustments in business processes to achieve better growth. In the field of information technology, Adira Finance has prepared IT development plans in 2020 by implementing the following policies and strategic plans:

ERP (Enterprise Resources Planning) system for finance, cost controlling, fixed asset management, and procurement;

(Customer Relationship Management) system for offering products to customers and customer service;

ECM (Enterprise Content Management) system in a gradual manner for electronic document management in various daily business processes;

Accounting Standards (PSAK) 71 on 1 January 2020 or known as IFRS 9;

branches, both in terms of availability and performance by optimizing the existing links as well as the implementation of backup links.


Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


04

Man

ag

em

en

t D

iscu

ssio

n a

nd

An

aly

sis

Chapter

FINANCIAL PERFORMANCE ANALYSIS

ADIRA FINANCE WAS ABLE TO MAINTAIN ITS

FINANCIAL PERFORMANCE IN 2019, AMID

THE PRESSURE IN AUTOMOTIVE SALES. THE

COMPANY POSTED ASSETS GROWTH OF 11.5% y/y

REACHING IDR35.1 TRILLION, EQUITY GROWTH OF

14.9% y/y TO IDR8.1 TRILLION, AND INCOME FOR

THE YEAR GROWTH OF 16.2% y/y TO THE AMOUNT

OF IDR2.1 TRILLION IN 2019.

2.1

6.3%

trillion

IDR

Return on Assets in 2019


2019 by posting an improved return on assets of 6.3% and return on equity of 29.2%.

FINANCIAL PERFORMANCE ANALYSIS

The financial statements as of 31 December 2019, 2018, and 2017 were prepared and presented in accordance with Indonesian Financial Accounting Standards as issued by the of Financial Accounting Standards Board of Indonesian Institute of Accountants (including the Sharia Financial Accounting Standards Board of Indonesian Institute of Accountant) and the Capital Market Regulation No. VIII.G.7 regarding Emiten or Public Company ‘s Financial Statements Presentation and Disclosure Guidelines.

The following financial statement analysis is disclosed based on the Company’s financial statements as of 31 December 2019, 2018, and 2017. The Company’s financial statements as of 31 December 2019 have been audited by Tanudiredja, Wibisana, Rintis & Rekan, a member firm of PricewaterhouseCoopers International Limited, an independent auditor, based on the Auditing Standards issued by the Institute of Public Accountants, with unqualified opinion in its report dated 24 January 2020 (partner in charge: Drs. M. Jusuf Wibisana, M.Ec., CPA).


Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


04

Man

ag

em

en

t D

iscu

ssio

n a

nd

An

aly

sis

Chapter

STATEMENT OF FINANCIAL POSITIONAmid the constraint macroeconomic conditions, Adira Finance managed to close the 2019 fiscal year with a pretty good performance. Inline with the increase in financing activities, the Company’s financial position was able to post growth with an assets growth of 11.5% y/y to IDR35.1 trillion; liabilities growth of 10.5% y/y to IDR27.0 trillion; and equity growth of 14.9% y / y to IDR8.1 trillion.

AssetsIn 2019, Adira Finance posted an asset growth to IDR35.1 trillion, grew by 11.5% y/y from IDR31.5 trillion in the previous year. The increase was mainly influenced by the growth of total financing receivables, which increased to IDR29.9 trillion in 2019 compared to the previous year’s position of IDR27.9 trillion. Consumer financing receivables still have a dominant portion of 76.3% of Adira Finance’s total assets in 2019.

(In billion Rupiah)

Description 2017 2018 2019Growth (%)

2017-2018 2018-2019

Cash on hand and cash in banks 2,221.7 1,689.2 3,122.5 (24.0%) 84.9%

impairment losses16,939.1 23,260.4 26,802.2 37.3% 15.2%

impairment losses8,579.9 4,370.5 2,822.2 (49.1%) (35.4%)

impairment losses379.6 240.9 290.6 (36.5%) 20.6%

Other assets 1,372.6 1,935.4 2,079.3 41.0% 7.4%

Total assets 29,492.9 31,496.4 35,116.8 6.8% 11.5%

In the past three years, the contribution of the Company’s financing receivables to total assets is as follows:

(In trillion Rupiah)

Consumer Financing Receivables-Neto

Murabahah Financing Receivables-Neto

Financing Lease Receivables-Neto

Total Assets

35.1

31.529.5

201920182017

16,9

8.6

23.3

4.4

26.8

2.80.4

0.2

0.3


Cash on hand and Cash in BanksIn 2019, Adira Finance booked IDR3.1 trillion for cash and cash in banks, grew by 84.9% y/y compared to IDR1.7 trillion in 2018. Of this total, cash in bank deposited with related party, namely Bank Danamon, reached IDR1.8 trillion, increased by 43.3% y/y, compared to IDR1.3 trillion in 2018.

Consumer Financing ReceivablesAll joint financing contracts entered into by the Company are joint financing without recourse, which only Adira Finance’s financing portion of the total instalments is recorded as consumer financing receivables in the statement of financial position (net approach). Adira Finance cooperates with related parties, namely Bank Danamon Indonesia, in the form of joint financing facilities without recourse in providing consumer financing facilities. This related party will provide a maximum financing facility of 99.0% of the financing value, while the remainder is financed by Adira Finance.

The following is the managed Consumer Financing Receivables as of 31 December 2017-2019:

(In billion Rupiah)


2017-2018 2018-2019

Managed Receivables

Self-financing 17,780.3 24,456.5 28,177.2 37.5% 15.2%

Joint-financing 17,747.3 21,307.4 22,040.2 20.1% 3.4%

Total 35,527.6 45,763.9 50,217.4 28.8% 9.7%

Composition

Self-financing 50.0% 53.4% 56.1%

Joint-financing 50.0% 46.6% 43.9%

Consumer Financing Receivables in the Statement of Financial Position

Receivables Before Allowance for Impairment Losses

17,780.3 24,456.5 28,177.2 37.6% 15.2%

Less: Allowance for Impairment Losses (841.2) (1,196.1) (1,375.0) 42.2% 15.0%

16,939.1 23,260.4 26.802.2 37.3% 15.2%

compared to 2018, which amounted to IDR23.3 trillion. The increase in consumer financing receivables is inline with in hands implementation of the Company’s financing strategies, policies, and financing business activities when the economy is still stagnant as well as pressures from automotive sales in Indonesia. Adira Finance also made business transformation efforts undertaken by the Company to increase financing transactions.

Adira Finance’s average financing contract are 45 months for cars, 27 months for motorcycles, 12 months for durable goods, and 20 months for others. The following is the weighted average effective interest rate of consumer financing receivables:

Description 2017 2018 2019

Cars 17.8% 18.3% 18.3%

Motorcycles 29.4% 30.8% 31.2%

Durable 49.0% 47.5% 47.9%

Others 37.6% 37.6% 37.1%

Financial Performance Analysis


Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


04

Man

ag

em

en

t D

iscu

ssio

n a

nd

An

aly

sis

Chapter

Murabahah FinancingMurabahah financing receivables is the the sell-buy of good contract with selling price amounting to acquisition cost plus the agreed margin, and the Company must disclose the acquisition cost to consumer. When the murabahah contract is signed, murabahah financing receivables are recognised at the acquisition cost plus the agreed margin. Murabahah margin is recognised over the year of the contract based on the margin of the murabahah financing receivables.

Since 2017, Adira Finance and Bank Danamon Indonesia entered into joint financing for the disbursement of murabahah financing based on a joint financing wakalah agreement. Hence, the portion of the total receivables financed by the Company is posted as financing receivables in the statement of financial position (net approach). Bank Danamon provides financing facilities at a maximum of 99.0% of the total financing amount, whereas the remaining amount is funded by Adira Finance.

35.4% y/y compared to that of 2018, which amounted to IDR4.4 trillion. Although managed receivables are still experiencing a decline, the distribution of the new sharia-based financing has increased by 56.2% y/y to 2.7 trillion during 2019. We expect that sharia products will continue to record improved performance growth in the future, supported by 40 branch offices that are spread throughout Indonesia. Murabahah financing receivables is supported by joint financing with Bank Danamon by 28.9% up to December 2019.

(In billion Rupiah)


2017-2018 2018-2019

Managed Receivables

Self-financing 9,071.7 4,610.7 3,011.4 (49.2%) (34.7%)

Joint-financing 238.1 673.5 1,226.3 182.9% 82.1%

Total 9,309.8 5,284.2 4,237.7 (43.2%) (19.8%)

Composition

Self-financing 97.4% 87.3% 71.1%

Joint-financing 2.6% 12.7% 28.9%

Consumer Financing Receivables in the Statement of Financial Position

Receivables Before Allowance for Impairment Losses

9,071.7 4,610.7 3,011.4 (49.2%) (34.7%)

Less: Allowance for Impairment Losses (491.8) (240.2) (189.2) (51.2%) (21.2%)

8,579.9 4,370.5 2,822.2 (49.1%) (35.4%)

Adira Finance’s average murabahah financing contract are 48 months for cars, 32 months for motorcycles, and 12 months for durable goods, and 36 months for others. The following is the weighted average effective interest rate of murabahah financing receivables:


Cars 17.8% 17.6% 17.6%

Motorcycles 27.1% 27.7% 28.1%

Durable - - 50.7%

Others 40.9% 15.9% 15.6%


Finance Lease ReceivablesFinance lease receivables is financing whereby Adira Finance as the financing services provider substantially transfers all risks and rewards incidental of the leased assets. Adira Finance uses self-funding in this financing disbursement. In 2019, Adira Finance booked IDR290.6 billion for finance lease receivables, increased by 20.6% y/y compared to IDR240.9 billion in 2018, which is inline with the Company’s policy to focus more on consumer financing while automotive sales are indicating ongoing sales improvement.

Finance Lease Receivables

290.6

2019

240.8

2018

379.6

2017

In terms of contract duration, Finance leases receivables are on average 44 months for cars and motorcycles. The following is the weighted average effective interest rate of finance lease receivables:


Cars 16.0% 16.6% 15.3%

Motorcycles 23.6% 22.1% 19.4%

Managed Financing ReceivablesAll the financing receivables of Adira Finance are managed by the Company, both funded through the Company’s self-financing as well as joint-financing. The entire process, starting from financing acquisition to collection, as well as Credit Risk Management regarding the consumer financing, murabahah financing, and finance lease receivables are collectively managed by Adira Finance as all the receivables have similar credit risk characteristics.

Other AssetsIn 2019, Adira Finance booked other assets by 7.4% y/y to 2.1 trillion. Prepaid expenses reached IDR309.9 billion, edged up by 1.4% y/y growth compared to 2018, which amounted to IDR305.7 billion. Other assets has significant portion include other receivables. Other receivables increased by 137.8% y/y to 467.0 billion, the increased was driven from transactions with related parties with Bank Danamon. Intangible assets also increased by 34.0% y/y to IDR160.5 billion, most of which was in terms of software, which is related to the Company’s development in information technology to support business activities. The following are the details included in other assets up to 2019:



Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


04

Man

ag

em

en

t D

iscu

ssio

n a

nd

An

aly

sis

Chapter

(In billion Rupiah)

Description 2017 2018 2019Pertumbuhan (%)

2017-2018 2018-2019

Prepaid expenses 273.8 305.7 309.9 11.7% 1.4%

255.7 196.4 467.0 (23.2%) 137.8%

Derivative assets 85.7 253.6 - 195.9% (100.0%)

Prepaid taxes - 341.5 340.7 100.0% (0.2%)

Investment in shares 0.7 0.7 0.7 0.0% 0.0%

208.4 245.5 266.1 17.8% 8.4%

amortisation 106.0 119.8 160.5 13.0% 34.0%

Deferred tax assets 387.8 403.8 475.2 4.1% 17.7%

Others 54.5 68.4 59.2 25.5% (13.5%)

Total other assets 1,372.6 1,935.4 2,079.3 41.0% 7.4%

LIABILITIESThe Company’s total liabilities in 2019 reached IDR27.0 trillion, increased by of 10.5% y/y compared to the position in 2018, which amounted to IDR24.5 trillion. The increase in total liabilities was mainly due to an increase in bonds payable and other payable, which respectively amounted to 10.4% y/y and 124.2% y/y, in order to support financing disbursement activities. The Company continues to diversify it sources of funding from self-funding by 58% and joint financing with Bank Danamon (42%). The Company’s total liabilities increased by 4.2% y/y to IDR22.9 trillion, borrowings increased by 0.6% y/y to IDR11.9 trillion, and bonds payable and mudharabah sukuk increased by 8.3% y/y to IDR11.0 trillion.

(In billion Rupiah)


2017-2018 2018-2019

Borrowings 10,544.2 11,778.1 11,850.1 11.7% 0.6%

9,761,2 9,421.9 10,398.7 (3.5%) 10.4%

Mudharabah bonds 701.0 768.0 637.0 9.6% (17.1%)

Other liabilities 2,741.1 2,500.2 4,152.3 (8.9%) 66.1%

Total Liabilities 23,747.5 24,468.2 27,038.1 3.0% 10.5%

BorrowingsAs a company engaged in financing activities, Adira Finance requires sources of funding, one of them through loans from banks, both local and foreign, in addition to internal cash and joint financing. Adira Finance has high flexibility to obtain funding sources from banks, both from local and foreign banks, supported by its track record and reputation as one of the leading finance companies in Indonesia whose shareholders have an important position as one of the 10 largest banks in Indonesia. In early 2019, Adira Finance received a syndicated loan in the amount of US$350 million with competitive interest rates. This facility has succeeded in attracting the interest of foreign investors, mostly from Singapore, Taiwan and Japan. Investor confidence in Adira Finance remains strong, as evidenced from the issuance of this syndicated loan, which was oversubscribed 2 times.


In addition, Adira Finance has applied hedging policy to borrowings denominated in foreign currencies with fixed interest rate. In anticipation of interest rate and currency exchange rate risks, hedging is performed using currency swap contract. The objective of such hedging is to manage the risk of fluctuating cash flows arising from the movement of foreign currency exchange rates and floating interest rates.

Adira Finance booked an increase in borrowings by 0.6% y/y in 2019 to IDR11.9 trillion from IDR11.8 trillion in 2018. Offshore borrowings contributed to 58.7% while onshore borrowings contributed to 41.3% of loans received by the Company. The following table relates to the loan facilities that Adira Finance received as of 31 December of 2019:

(In billion Rupiah)


2017-2018 2018-2019

Rupiah

PT Bank Pan Indonesia Tbk 2,300.0 1,920.1 1,799.3 (16.5%) (6.3%)

PT Bank Mandiri (Persero) Tbk 91.7 745.8 420.8 713.3% (43.6%)

PT Bank Maybank Indonesia Tbk - - 419.1 - 100.0%

PT Bank UOB Indonesia - 374.8 224.9 100.0% (40.0%)

PT Bank Central Asia Tbk 932.4 333.4 158.4 (64.2%) (52.5%)

Bank The Hongkong and Shanghai Banking Corporation, Ltd.

- - 125.0 - 100.0%

PT Bank DKI 400.0 483.1 125.0 20.7% (74.1%)

PT Bank National NOBU Tbk 100.0 50.0 99.8 (50.0%) 99.6%

PT Bank BCA Syariah 37.5 41.7 25.0 11.2% (40.0%)

PT Bank Danamon Indonesia Tbk 800.0 - 1,500.0 (100.0%) 100.0%

PT Bank Mega Tbk 699.2 - - (100.0%) -

PT Bank Pembangunan Daerah Jawa Barat dan Banten Tbk

100.0 - - (100.0%) -

PT Bank Panin Dubai Syariah Tbk 83.3 - - (100.0%) -

US Dollar

BNP Paribas (Singapore) - syndication 1,953.0 7,829.2 6,952.8 300.9% (11.2%)

PT Bank DBS Indonesia 3,047.2 - - (100.0%) -

Total Borrowings 10,544.2 11.778.1 11,850.1 11.7% 0.6%

Based on currency, borrowings received by the Company was dominated by US Dollar, contributing to 58.7%, obtained by the Company through syndicated borrowings or related parties, and the remaining was in Rupiah. In the previous year, the portion of US Dollar borrowings was 66.5%.



Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


04

Man

ag

em

en

t D

iscu

ssio

n a

nd

An

aly

sis

Chapter

In billion Rupiah

Onshore BorrowingTotal (RHS)

7.0

4.9

7.8

5.0

4.0

5.5

201920182017

10,511.8

11.9

Bonds Payable-Net and Sukuk Mudharabah

(In billion Rupiah)


2017-2018 2018-2019

Continuing Bonds II Phase I 851.0 - - (100.0%) -

Continuing Bonds II Phase II 490.0 - - (100.0%) -

Continuing Bonds II Phase III 450.0 450.0

- 0.0% (100.0%)

Continuing Bonds II Phase IV 88.0 88,0 - 0.0% (100.0%)

Continuing Bonds III Phase I 979.0 238.0 238.0 (75.7%) 0.0%

Continuing Bonds III Phase II 945.0 277.0 277.0 (70.7%) 0.0%

Continuing Bonds III Phase III 1,028.0 1,028.0 697.5 0.0% (32.1%)

Continuing Bonds III Phase IV 865.0 865.0 431.0 0.0% (50.2%)

Continuing Bonds III Phase V 2,014.0 1,101.0 1,101.0 (45.3%) 0.0%

Continuing Bonds III Phase VI 769.0 518.0 518,0 (32.6%) 0.0%

Continuing Bonds IV Phase I 1,300.0 984.0 984,0 (24.3%) 0.0%

Continuing Bonds IV Phase II - 1,630.0 794.0 100.0% (51.3%)

Continuing Bonds IV Phase III - 2,260.0 1,563.8 100.0% (30.8%)

Continuing Bonds IV Phase IV -

- 618.0 - 100.0%

Continuing Bonds IV Phase V -

- 2,000.0 - 100.0%

Continuing Bonds IV Phase VI - - 1,192.0 - 100.0%

Unamortized Bonds Issuance Costs (17.8) (17.1) (15.6) (3.9%) (8.8%)

Total Bonds Payable – Net 9,761.2 9,421.9 10,398.7 (3.5%) 10.4%

Continuing Mudharabah Bonds II Phase I 59.0 - - (100.0%) -

Continuing Mudharabah Bonds II Phase II 56.0 56.0 14.0 0.0% (75.0%)

Continuing Mudharabah Bonds II Phase III 386.0 112.0 112.0 (71.0%) 0.0%

Continuing Mudharabah Bonds III Phase I 200.0 110.0 110.0 (45.0%) 0.0%

Continuing Mudharabah Bonds III Phase II - 490.0 91.0 100.0% (81.4%)

Continuing Mudharabah Bonds III Phase III - - 214.0 - 100.0%

Continuing Mudharabah Bonds III Phase IV - - 96.0 - 100.0%

Total Mudharabah Bonds 701.0 768.0 637.0 9.6% (17.1%)

Total Bonds Payable – Net and Mudharabah Bonds

10,462.2 10,189.9 11,035.7 (2.6%) 8.3%


Adira Finance issues bonds and mudharabah bonds in order to obtain funding from the capital market and

and mudharabah bonds reaching IDR11.0 trillion, grew up by 8.3% y/y compared to the position in 2018, which amounted to IDR10.2 trillion.

During 2019, Adira Finance issued bonds on 3 occasions with a total issuance of IDR3.8 trillion. Adira Finance also issued mudharabah bonds on 2 occasions with a total issuance of IDR310 billion. Cumulatively, total issuance of debt securities by the Company amounted to IDR4.1 trillion. On the other hand, the Company repaid matured bonds and mudharabah bonds in 2019, consisting of bonds amounting to IDR2.8 trillion and IDR441 billion for mudharabah bonds. The chronology of debt securities issued by Adira Finance is available in details in the Stocks and Other Securities Highlights in this Annual Report.

Other LiabilitiesAt the end of 2019, Adira Finance booked IDR4.2 trillion for other liabilities, increased by 66.1% y/y compared to IDR2.5 trillion in 2018. Accounts for other payables, employee benefits liabilities, and accrued expense have the largest contributions respectively at 29.1%, 25.5%, and 24.4% of total other liabilities.

(In billion Rupiah)


2017-2018 2018-2019

Accrued expenses 730.7 828.7 1,012.0 13.4% 22.1%

Other payables 1,005.3 538.5 1,207.5 (46.4%) 124.2%

Taxes payable 30.2 30.2 364.5 (0.0%) 1,107.0%

7.2 237.9 510.2 3,204.2% 114.5%

Employee benefit liabilities 967.7 864.9 1,058.1 (10.6%) 22.3%

Total Other Liabilities 2,741.1 2,500.2 4,152.3 (8.8%) 66.1%

EQUITYAdira Finance was able to book equity improvement in a consistent manner over the last few years. At the end of 2019, the equity of Adira Finance increased by 14.9% y/y to IDR8.1 trillion, compared to 2018, which amounted to IDR7.0 trillion. The increase Adira Finance’s equity was mainly attributable to the increase in retained earnings by 16.4% y/y to IDR8.1 trillion, from IDR7.0 trillion in the previous year. The increase is inline with the increase in net profit in the previous year, after being deducted by dividend distribution for shareholders. Meanwhile, issued and fully paid-in capital has not changed in the amount of IDR100 billion.

(In billion Rupiah)


2017-2018 2018-2019

Issued and Fully Paid-In Capital 100.0 100,0 100,0 0.0% 0.0%

Additional Paid-In Capital 6.8 6.8 6.8 0.0% 0.0%

Retained Earnings

- Appropriated 131.3 145.4 163.6 10.7% 12.5%

- Unappropriated 5,549.1 6,837.0 7,961.8 23.2% 16.5%

Cumulative Gain/(Losses) on Derivative (41.8) (61.0) (153.5) 45.8% 151.6%

Equity 5,745.4 7,028.2 8,078.7 22.3% 14.9%



Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


04

Man

ag

em

en

t D

iscu

ssio

n a

nd

An

aly

sis

Chapter

STATEMENT OF PROFIT OR LOSSIn 2019, Adira Finance was able to record a net profit of IDR2.1 trillion, grew by 16.2% y/y compared to IDR1.8 trillion in 2018 amid sluggish automotive sales in Indonesia. More efficient interest expense management strategies and policies, managing the quality of financing, and an increase in income from financing receivables became the driving factors for Adira Finance’s profitability improvement in 2019. Adira Finance’s total comprehensive income has slightly decreased by 1.4% y/y to IDR1.96 trillion from IDR1.99 trillion in the previous year, while Adira Finance’s earnings per share improved to IDR2,109. The following is the summary of the 2017-2019 statement of Profit or Loss and other comprehensive income:

(In billion Rupiah)


2017-2018 2018-2019

Total Income 9,136.9 10,183.8 11,337.7 11.5% 11.3%

Total Expenses (7,014.9) (7,699.2) (8,458.6) 9.8% 9.9%

Income before Income Tax Expenses 2,122.0 2,484.6 2,879.1 17.1% 15.9%

Income Tax Expenses (712.8) (669.3) (770.4) (6.1%) 15.1%

Income for the Year 1,409.2 1,815.3 2,108.7 28.8% 16.2%

Other Comprehensive Income net of Tax (142.7) 172.0 (150.1) 220.5% (187.3%)

Total Comprehensive Income for the Year 1,266.5 1,987.3 1,958.6 56.9% (1.4%)

TOTAL INCOMEAdira Finance recorded operating income primarily deriving from financing income, consisting of consumer financing income, murabahah margin, finance lease, and other income. This is inline with Adira Finance’s core business in carrying out the function of disbursing financing to consumers. In 2019, Adira Finance managed to obtain a total income of IDR11.3 trillion, grew by 11.3% y/y from previously IDR10.2 trillion in 2018.

The following is the Company’s total income in the 2017-2019 period:

(In billion Rupiah)


2017-2018 2018-2019

Consumer Financing 4,960.2 6,866.9 8,350.7 38.4% 21.6%

Murabahah Margin 2,356.1 1,545.4 872.3 (34.4%) (43.6%)

Finance Leases 99.1 44.8 35.6 (54.8%) (20.5%)

Others 1,721.5 1,726.7 2,079.1 0.3% 20.4%

Total Income 9,136.9 10,183.8 11,337.7 11.5% 11.3%

Consumer Financing IncomeIn 2019, Adira Finance recorded consumer financing income of IDR8.4 trillion, grew by 21.6% y/y compared to IDR6.9 trillion in 2018. The increase in operating income from consumer financing is inline with the implementation of the Company’s business transformation amid the sluggish automotive sales industry in Indonesia. The contribution of consumer financing income reached by 73.7% of the total income of the Company.

Murabahah MarginAdira Finance recorded IDR872.3 billion in murabahah margins in 2019, decreased by 43.6% y/y compared to IDR1,545.4 billion in 2018. The decline is inline with the weakening of Islamic financing activities in the national financing industry.


Finance Lease IncomeAdira Finance also offers motor vehicle finance leasing products in addition to serving consumer financing and sharia-based financing. In 2019, income from this business segment was booked at IDR35.6 billion, decreased by 20.5% y/y from IDR44.8 billion in 2018. The decline in finance lease income is mainly inline with the weakening of the commercial car market in 2019, in which as an industry, new commercial car sales decreased by 20.7% y/y.

Other IncomeAdira Finance booked other income or income apart from financing interest income deriving from administration, late charges on overdue instalment payments by consumers, penalties due to early settlements of consumer loans, recovery of written-off receivables, interest income from current accounts, time deposits, and others. Other income achieved IDR2.1 trillion in 2019, increased by 20.4% y/y, as compared to the achievement in 2018 which amounted to IDR1.7 trillion.

TOTAL EXPENSESIn 2019, Adira Finance’s total expenses reached IDR8.5 trillion, increased by 9.9% y/y compared to 2018, which amounted to IDR7.7 trillion. Operating expenses (general expenses and salaries) had a contribution of around 43.3% of total expenses in 2019.

(In billion Rupiah)


2017-2018 2018-2019

Salaries and Benefits 1,892.6 2,031.4 2,139.0 7.3% 5.3%

General and Administrative 1,106.8 1,362.6 1,522.1 23.1% 11.7%

MudharabahInterest Expense and Financial Charges & Revenue Sharing for Mudharabah Bonds

1,836.4 1,798.1 2,034.3 (2.1%) 13.1%

Provision for Impairment Losses 1,661.4 1,763.9 1,987.4 6.2% 12.7%

Marketing and Others 517,7 743.2 775.8 43.6% 4.4%

Total Expenses 7,014.9 7,699,2 8,458.6 9.8% 9.9%

Operating ExpensesOperating expenses consist of salaries and benefits expenses as well as general and administrative expenses. In 2019, operating expenses increased by 7.9% y/y to IDR3.7 trillion compared to the previous year of IDR3.4 trillion in the fiscal year, inline with the Company’s business expansion.

SALARIES AND BENEFITS EXPENSESSalaries and benefits expenses reached IDR2.1 trillion in 2019, increased by 5.3% from IDR1.89 trillion in 2018, inline with the adjustments of the regional minimum wages and adjustments of employee salaries. The following table describes the details regarding the Company’s salaries and benefits expenses for 2017-2019:

(In billion Rupiah)


2017-2018 2018-2019

Salaries & Benefits 1,775.2 1,817.7 1,924.0 2.4% 5.8%

Post-Employment Benefits 76.9 150.5 161.5 95.7% 7.3%

Training and Education 40.5 63.2 53.5 56.0% (15.5%)

Total 1,892.6 2,031.4 2,139.0 7.3% 5.3%



Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


04

Man

ag

em

en

t D

iscu

ssio

n a

nd

An

aly

sis

Chapter

GENERAL AND ADMINISTRATIVE EXPENSESAdira Finance’s general and administration expenses comprise of office expenses, rental expenses, transportation, instalment collection fees, repair and maintenance, depreciation of fixed assets, postage and stamp duties, intangible assets amortization, printing and documentation, bank administration, and fixed assets insurance, which increased along with the increasing activities in Adira Finance’s operations. In 2019, general and administrative expenses reached IDR1.5 trillion, increased by 11.7% y/y compared to IDR1.4 trillion in 2018. Office expenses and rental expenses are still the main components of general and administrative expenses with contributions of 41.8% and 14.8%, respectively. Other expenses had a significant increased by 14.3% y/y to IDR194.5 billion compared to the previous year.

(In billion Rupiah)


2017-2018 2018-2019

Office Expenses 481.7 543.4 629.6 13.1% 16.7%

Rental Expenses 189.5 197.0 225.8 4.0% 14.6%

Repair and Maintenance 59.5 69.2 121.6 13.6% 70.1%

Instalment Collection Fees 63.7 73.2 81.3 14.8% 11.1%

Transportation 60.6 74.8 72.8 23.3% (2.5%)

Delivery, Postage and Stamp Duties 43.1 51.2 71.9 18.9% 40.4%

Depreciation of Fixed Assets 62.9 60.2 59.3 (4.3%) (1.5%)

Intangible Assets Amortisation 22.7 32.5 36.3 43.2% 11.7%

Printing and documentation 23.6 26.6 27.1 13.0% 1.9%

Bank administration 8.8 6.5 0.8 (26.6%) (87.7%)

Fixed Assets Insurance 0.5 1.1 1.1 100.0% 4.1%

Others 90.2 226.9 194.5 151.7% (14.3%)

Total 1,106.8 1,362.6 1,522.1 23.1% 11.7%

Interest Expense and Financing Charges as well as Mudharabah Bonds Revenue SharingCost of funds consist of interest expenses and provision of bank loans and bonds payable (interest and financing expense) as well as mudharabah bonds, which represents sources of financing other than the joint-financing (non-JF) scheme. In the event that receivables are posted under the joint-financing scheme, the related costs will be presented on net basis as interest income from financing. When the receivables are posted and funded from self-funding, the cost of funds will be presented as interest and financing expense as well as profit sharing of mudharabah bonds.

In 2019, Adira Finance’s interest expense and financing charges reached IDR2.0 trillion, increased by 13.1% y/y compared to 2018, which amounted to IDR1.8 trillion. The increase in funding expenses was inline with the increase in financial expenses deriving from borrowings and bonds payable, each of which increased by 26.7% y/y and 2.8% y/y respectively. Meanwhile, revenue sharing from mudharabah bonds decreased by 6.3% y/y from the previous year, to IDR56.6 billion.

(In billion Rupiah)


2017-2018 2018-2019

Interest on borrowings 853.2 854.8 1,083.1 0.2% 26.7%

Interest on bonds payable 898.1 850.2 873.7 (5.3%) 2.8%

Revenue sharing for mudharabah loans 43.0 30.2 19.1 (29.8%) (36.8%)

Amortisation of mudharabah bonds issuance cost

1.1 2.2 1.4 100.0% (36.4%)

Provision and administration expenses on Mudharabah loan

0.7 0.3 0.4 (53.4%) 15.7%

Revenue sharing for mudharabah loans 40.3 60.4 56.6 49.9% (6.3%)

Total 1,836.4 1,798.1 2,034.3 (2.1%) 13.1%


Provision for Impairment Losses in Financing ReceivablesProvision for impairment losses on financing receivables is the provision made based on the collective evaluation of objective evidence that there have been impairment losses on financial assets. Adira Finance calculates the allowance for impairment losses on financing receivables collectively and uses a vintage method, based on the Company’s historical trends. Regularly, the Company checks to ensure that the allowance for impairment losses on financing receivables formed by the Company is still adequate.

In 2019, Adira Finance’s allowance for impairment losses on Adira Finance was booked at IDR2.0 trillion, increased by 12.7% y/y compared to IDR1.8 trillion in 2018. Despite the depressed macroeconomic conditions, the management considers that the established allowance for depreciation losses is adequate to cover possible losses arising from uncollectible consumer financing receivables.

Marketing and Other ExpensesIn 2019, Adira Finance recorded marketing expenses at IDR775.8 billion, increased by 4.4% y/y compared to IDR743.2 billion in 2018. Marketing expenses consist of marketing expenses for dealers, which reached IDR768.9 billion in 2019 compared to the previous year, which reached IDR722.9 billion. Meanwhile, other expenses booked at IDR6.8 billion, lower by 66.5% y/y compared to IDR20.3 billion in 2018.

INCOME FOR THE YEARThrough various strategies and policies to address the macroeconomic challenges in 2019, Adira Finance managed to record at IDR2.1 trillion for income for the year. This achievement grew by 16.2% y/y compared to that of 2018, which amounted to IDR1.8 trillion. The increase in income for the year is inline with the increase in total income by 11.3% y/y in 2019, while total expenses were relatively well maintained, enabling Adira Finance to post improved profitability.

Other Comprehensive Income and Total Comprehensive Income for the YearThe Company performs a calculation of post-employment benefits, and the corresponding actuarial income/(losses) that occurs in the adjustment and changes in the actuarial assumption is presented in the income statement and other comprehensive income as an account which will not be reclassified to the income statement. In addition, Adira Finance also maintains derivative instruments, which will be used to hedge the interest rate and foreign exchange risks exposure, which arise due to the Company’s foreign working capital loans denominated in foreign currency and under a floating rate. Derivative instruments for Risk Management purposes are measured at fair value in the Company’s financial statements. The effective portion of changes in the fair value of derivatives designated as hedging instruments of cash flows is presented under the income statement and other comprehensive income for the year as an account to be reclassified to the income statement.

In 2019, Adira Finance suffered a loss of IDR150.1 billion on other comprehensive income, compared to a profit of IDR172.0 billion in 2018. Cumulatively, Adira Finance’s total comprehensive income for the year slightly decreased by 1.4% y/y to IDR1.96 trillion from the previous year, which amounted to IDR1.99 trillion.



Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


04

Man

ag

em

en

t D

iscu

ssio

n a

nd

An

aly

sis

Chapter

CASH FLOWS

(In billion Rupiah)


2017-2018 2018-2019

Cash flow from operating activities 1,006.2 (656.0) 1,179.4 (165.2%) 279.8%

Cash flow from investment activities (91.7) (145.5) (149.3) 58.7% 2.6%

Cash flow from financing activities 366.2 269.1 403.1 (26.5%) 49.8%

Net cash increase/(decrease) in cash on hand and in banks

1,280.7 (532.4) 1,433.2 (141.6%) 369.2%

Cash on hand and in banks, at the beginning of year

941.0 2,221.7 1,689.3 136.1% (24.0%)

Cash on hand and in banks, at end of year 2,221.7 1,689.3 3,122.5 (24.0%) 84.8%

CASH FLOW FROM OPERATING ACTIVITIESIn 2019, Adira Finance recorded a net cash inflow of IDR1,179.4 billion, while in 2018 there was a cash outflow of IDR656.05 billion. The increase in operating cash was inline with the Company’s cash receipts increase of 2.7% y/y and the decrease in cash expenses by 0.4% y/y. Consequently, the Company experienced a positive cash flow from operating activities in 2019.

CASH FLOW FROM INVESTMENT ACTIVITIESAdira Finance’s net cash used for investing activities in 2019 was recorded at IDR149.3 billion from IDR145.5 billion in 2018. This increase was mainly due to the purchase of intangible assets, which increased by 61.8% y/y to IDR77.2 billion. While the purchase of fixed assets decreased to IDR75.9 billion to continue to support the Company in conducting business transformation, including digitizing business processes through the development of information technology. While, the purchase of fixed assets decreased to IDR79.4 billion from IDR104.0 billion in the previous year.

CASH FLOW FROM FINANCING ACTIVITIESIn 2019, Adira Finance acquired net cash from financing activities in the amount of IDR403.1 billion compared to net cash acquired from financing activities in 2018, which amounted to IDR269.1 billion. This increase was mainly due to the reduction of payment of matured bonds principal and bank loans in 2019 by 33.0% y/y and 8.5% y/y to IDR2.8 trillion and IDR15.0 trillion.


OTHER MATERIAL INFORMATION

SOLVENCYThe Company’s ability to meet its debt obligations, both in the short and long term is considered to be very good by external rating agencies. The Company received good ratings from domestic and overseas. Pefindo, which is a domestic rating agency rated idAAA / Stable corporate rating, which means that the Company has debt security as well as the highest rating given by Pefindo. Meanwhile, from overseas, Adira Finance received BBB and Baa2/ Stable ratings from the Fitch and Moody’s Rating Agency or equivalent to the rating in Indonesia. The assessment also proves that Adira Finance has the capacity to meet the financial commitments for its debt, is relatively better than other obligors, even superior.

LIQUIDITY RATIOAdira Finance continuously monitors the solvency ratio, gearing ratio, and maturity profile of the financial assets and liabilities to ensure adequate liquidity in meeting the obligations, both short and long term. The management of the Company’s liquidity and assets is carried out under the coordination of the Asset and Liability Committee (ALCO), which manages the Company’s Assets and Liabilities. Therefore, the fund diversification strategy can be done carefully, the Company’s liquidity risk can be well-mitigated, and maximum profit can be gained. The ALCO Committee meets with the relevant business units monthly, to ensure that liquidity positions are reached at the expected level. This is inline with the Company’s policy to have sufficient financial resources to meet its matured liabilities as well as running its business.

The Company has also calculated the liquidity ratio based on Financial Services Authority Regulation No. 35/POJK.05/2018 dated 27 December 2018 regarding Conduct of Business of Multifinance Company. The Company’s current ratio as of 31 December 2019 was 124.8%, compared to 31 December 2018, which stood at 123.5%. The Company’s cash ratio on 31 December 2019 stood at 20.7%, while on 31 December 2018, it was recorded at 12.6%.

Basic data and table of the analysis of the ability to pay short-term debt, is as follows:


Liquidity

Current ratio 112.2% 123.5% 124.8%

Cash ratio 14.4% 12.6% 20.7%

SOLVENCY RATIOIn 2019, the Company has a sound liquidity ratio. This is evidenced from the solvency, namely the growth of the Company’s ability to meet its short-term and long-term liabilities. The liability to equity ratio of the Company as at 31 December 2019 was 3.3x compared to 31 December 2018, which stood at 3.5x. The ratio of liabilities to total assets as of 31 December 2019 was 0.8x, the same as the previous year, which stood at 0.8x. The low asset solvency ratio indicates that some portion of assets financed using liabilities, enabling the Company to have high capacity in repaying debts.

Basic data and table of the analysis of the ability to pay long-term debt, is as follows:

Uraian 2017 2018 2019

Solvency

Asset Solvability (x) 0.8 0.8 0.8

Equity Solvability (x) 4.1 3.5 3.3

Gearing Ratio (x) 3.7 3.1 2.8



Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


04

Man

ag

em

en

t D

iscu

ssio

n a

nd

An

aly

sis

Chapter

GEARING RATIOGearing ratio compares the total bank borrowings, bonds payable, and mudharabah bonds to equity. The company has a gearing ratio that is lower than the maximum allowable limit in accordance with POJK No.35/POJK.05/2018 regarding Conduct of Business of Multifinance Company.

Adira Finance posted a gearing ratio of the Company that signifies an improvement from year to year, in which in 2019 to 2.8x compared to the position in 2017, which stood at 3.1x. The ratio improvement was inline with the increase in the Company’s equity due to the improving net profit in 2019.

CONFORMITY OF FINANCIAL ASSETS AND LIABILITIESThe Company established the Assets and Liabilities Committee to monitors the conditions and situations related to liquidity as well as conducting mitigations if needed in terms of liquidity risk management. The effectiveness of this committee can be observed from the proper management and maturity gap of assets and liabilities.

The following is the table of the Company’s maturity of assets and liabilities for the 2017-2019 period:

(In billion Rupiah)


Financial assets 15,223.4 23,904.9 18,758.2 23,229.1 20,224.6 25,700.6

Financial liabilities 8,582.8 15,413.0 11,860.9 13,327.2 11,865.4 14,310.6

Maturity gap 6,640.6 8,491.9 6,897.3 9,901.9 8,359.2 11,390.0

ANALYSIS OF OTHER RELEVANT RATIOSAdira Finance consistently conducts financing business activities in accordance to the principle of prudence and adheres to the regulations of Bank Indonesia and the Financial Services Authority as well as all applicable laws. Adira Finance has been able to meet the financial ratios regulated by regulators even though Adira Finance conducted continuous financing expansion to take advantage of the improvement in momentum in national automotive sales as the Indonesian economy began to show signs of improvement.

The following is the comparison of the performance of Adira Finance’s main financial ratios as compared to the performance of the financing industry in 2019:

Description 2018 2019

FAR 87.3% 85.2%

GR (x) 2.6x 2.8x

MSMD 271.1% 7.568.0%

NPF 2.4% 1.6%

ROA* 4.8% 6.3%

ROE* 14.3% 29.2%

BOPO 78.9% 74.8%

Note:(* Profit (loss) to average total assets and equity over a two-year period.


RECEIVABLES COLLECTIBILITYAdira Finance is commited to maintain its asset quality and the challenging economic condition as well as credit expansion and other business financing. The Company manages all of its receivables both through Joint Financing or self funding. Adira Finance manages its receivables collectively from the financing acquisition process until its collection of the consumer financing, murabahah financing, leasing based on the risk profile of the consumer..

Adira Finance classified its receivables collectibility based on the number of days. The analysis table of financing receivables tenor that are managed (gross) for the period of 2017-2019 are as follow:


Current 44,461.5 52,671.4 55,955.0

Overdue 1-90 days 12,435.7 12,179.1 13,333.4

Overdue > 90 days 987.2 1,182.7 1,222.6

57,884.4 66,033.2 70,511.0

23.2% 20.2% 20.6%


Total overdue financing receivables - gross has decreased in the periods of 2017, 2018 and 2019, respectively by 23.2%; 20.2%; and 20.6%. Overdue financing receivables increase to the total of financing receivables, inline with the improvement in the Indonesian economy. Nevertheless, the Company continuously conducts credit risk control efforts to ensure that it will be maintained at a controlled level.

The quality of consumer financing receivables can be observed in Non-Performing Financing (NPF), which is assessed from >90 days, in which the Company also assessed the quality of financing receivables managed based on the NPL (principal of managed financing receivables of active contracts). The Company’s NPF in the last three years is 1.6% (2017); 1.7% (2018); and 1.6% (2019). Indonesia’s economic conditions, which has an influence on the people’s purchasing power, impacted the NPF ratio. The Company strives to manage the NPF level to below 2.0% by carefully applying the principles of Risk Management.

The Company also monitors financing receivables in the Non-Performing Financing receivables, which consists of substandard, doubtful, and loss, pursuant to OJK Regulation No. 35/POJK.05/2018. This regulation stipulates that Non-Performing Financing Receivables (excluding joint-financing portion) net of allowance for impairment losses was at 5% maximum. The Company’s NPF for 2017, 2018, and 2019 were 0.4%, 0.4%, and 0.3% respectively.

CAPITAL STRUCTUREThe objective of Capital Management is to protect the Company’s ability to maintain its business continuity, allowing it to continue providing returns to the shareholders.

Adira Finance has a commitment to deliver return on investment to its shareholders in the form of cash dividend. Since the Initial Public Offering, the Company has consistently distributed dividends to its shareholders every year and has also determined the minimum dividend policy of 20% from current year net income by still considering the Company’s needs of funding in the following year and the dividend policy of PT Bank Danamon Indonesia Tbk as the controlling shareholder.


Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


04

Man

ag

em

en

t D

iscu

ssio

n a

nd

An

aly

sis

Chapter

DETAILS OF CAPITAL STRUCTUREBased on Financial Services Authority Regulation No. 35/POJK.05/2018 dated 27 December 2018 regarding Conduct of Business of Multifinance Company on 31 December 2019 the Company has calculated the capital ratio and profitability ratio, including return on assets, return on equity, and net interest margin. Details of the Company’s capital structure in 2017, 2018 and 2019 are as follows:


Capital Ratio* 21.8% 24.5% 26.3%

Rentability Ratios*

- Return on Asset (ROA) 7.6% 8.3% 8.7%

- Return on Equity (ROE) 26.4% 29.1% 29.1%

- Net Interest Margin (NIM) 21.9% 25.2% 24.8%

* Ratios in accordance with the provisions of the Financial Services Authority (OJK)

While the Company’s capital structure based on its composition compared with assets is as follows:

Composition to Assets 2017 2018 2019

Liabilities 80.5% 77.7% 77.0%

Borrowings 35.8% 37.4% 33.7%

33.1% 29.9% 29.6%

Mudharabah Bonds 2.4% 2.4% 1.8%

Other Liabilities 9.3% 7.9% 11.8%

Equity – net 19.5% 22.3% 23.0%

Assets 100.0% 100.0% 100.00%

MANAGEMENT POLICIES CONCERNING CAPITAL STRUCTUREAs stipulated in the Company’s Articles of Association, the Company’s Authorized Capital amounts to IDR400.0 billion, consisting of 4 billion shares with a nominal value of IDR100 per share. From the authorized capital, 1 billion shares have been issued by the shareholders, thus the Company’s capital amounts to IDR100.0 billion.

In managing the capital structure, the Company refers to the Financial Services Authority Regulation No. 28/POJK.05/2014 dated 19 November 2014 regarding Business License of Multifinance Company and Finance Companies as well as the Financial Services Authority Regulation No. 35/POJK.05/2018 dated 27 December 2018 regarding Conduct of Business of Multifinance Company which among others governs the following:

capital; and

Company’s borrowings to equity subordinated loan deducted by investment, is maximum 10 times, both for foreign and domestic loans.

Adira Finance as one of the leading finance companies in Indonesia has met the capital requirements set out by the regulator with the following conditions:

above the minimum requirements, at IDR8.1 trillion, IDR7.0 trillion, and IDR5.75 trillion, respectively.

of the total paid-up capital in 2019, 2018 and 2017.

2.8x, 3.1x and 3.7x respectively, or far below the maximum allowable limit of 10x.


BASIS FOR MANAGEMENT SELECTION REGARDING CAPITAL STRUCTURE POLICYFurthermore, in OJK Circular Letter No. 1/ SEOJK.05/2016 dated 23 February 2016 on Financial Soundness of Finance Companies regulated that the capital ratio, of which finance companies are required to fulfill this ratio at the minimum of 10%. The capital ratio is a comparison of adjusted capital to adjusted assets.

In 2017, 2018 and 2019, the Company’s capital ratio stood at 21.8%, 24.5%, and 21.8%, respectively. The appropriation of net income for the year includes the appropriation for the reserve requirement, dividend payout, and other uses as resolved by shareholders in a GMS in the event the Company delivered a positive net income. The Articles of Association states that the portion of net income for reserve requirement (minimum 20% of the authorized capital) is appropriated to cover the losses incurred by the Company.

Furthermore, the details of the Company’s capital for 2017, 2018, and 2019 have been disclosed in this section under Equity in this Annual Report.

MATERIAL COMMITMENTS TO CAPITAL EXPENDITUREIn 2019, Adira Finance has no material commitments in capital expenditures; therefore, the explanation related to: Name of party making the commitments; commitment objectives; source of funds; currency; and measures of currency risk protection are not presented in this section.

CAPITAL EXPENDITURE IN THE LAST FISCAL YEARThe Company’s capital expenditure in 2017, 2018, and 2019 amounted to IDR96.0 billion, IDR150.9 billion and IDR155.3 billion, respectively. The capital expenditure was mainly utilized for development of services, business networks, and information technology infrastructure for the purpose of supporting business growth and business transformation of the Company. Capital investment is focused on developments related to information technology, inline with the Company’s strategy to develop digital business transformation.

In addition, Adira Finance invests in fixed Assets and software for the purpose of business growth. The following is details of Capital Expenditures in 2017-2019 based on cash flow:

(In billion Rupiah)


Fixed assets 47.6 104.0 79.4

Software and software under development 48.5 46.9 75.9

Total capital expenditure 96.0 150.9 155.3



Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


04

Man

ag

em

en

t D

iscu

ssio

n a

nd

An

aly

sis

Chapter

COMMITMENT AND CONTINGENCY

COMMITMENTThe company entered into the following lease agreements:

Counter Party Leased item Agreement Period

PT Permata Birama Sakti Head Office in Jakarta 16 September 2019 - 15 September 2029

PT Telekomunikasi Indonesia Tbk Storage Space in Jakarta 25 March 2019 - 25 March 2022

PT DCI Indonesia Storage Space in Jakarta 7 September 2018 - 6 September 2023

The following are lease commitments as of 31 December 2019 and 2018:(In billion Rupiah)

2018 2019

<1 year 34.9 18.1

1-5 years 125.4 123.3

>5 years 153.6 183.8

Total 313.9 325.2

CONTINGENCYAs of 31 December 2019 and 2018, the Company did not record any significant contingencies.

MATERIAL FACTS AND INFORMATIONSUBSEQUENT TO ACCOUNTANT’S REPORT DATEAdira Finance has no material facts and information subsequent to accountant’s report date, which could impact the Company’s performance and business risks. Therefore, material facts and information as well as its impacts to the performance and business risks are not presented in this section.


COMPARISON OF 2019 TARGETS AND REALIZATION

In 2019, Adira Finance continued its performance growth from the previous year. The Company succeeded in closing 2019 with the following main performance targets achievements:

Description Unit 2019 Target2019

Realization

Marketing and Operations

New Financing Miliar IDR 37,300 37,861

Managed receivables Miliar IDR 54,126 54,756

New Motorcycles Financing Miliar IDR 21,360 21,478

New Cars Financing Miliar IDR 15,327 15,757

New Durable Goods Financing Miliar IDR 613 626

Financial

Income Miliar IDR 11,215 11,338

Income for the Year Miliar IDR 2,086 2,109

Other Performance Outlook

NPF (including joint-financing portion) (%) Below 2.0 1.6

Gearing ratio (X) Maximum 10 2.8

Dividend-Payout-Ratio (%) Minimum 20% of income for the year

50

Market Share of New Cars (%) Above 4.0 4.4

Market Share of New Motorcycles (%) Above 11.0 11.8

2020 OUTLOOKThe outlook for operational, financial, and certain items are based on historical figures, macro conditions outlook, and the Company’s strategy in 2020 are as follows:

Description 2020 Outlook

Operational

Outlook of New Financing 5%-10%

Outlook of managed receivables 5%-10%

Outlook of Motorcycles Financing 5%-10%

Outlook of Cars Financing 0%-5%

Outlook of Durable Goods Financing 5%-10%

Financial

Income Outlook Refers to the growth of managed receivables

Income for the Year Outlook Refers to the growth of managed receivables, financing cost, and operational cost

Outlook of Other Performance

NPF Outlook (including joint-financing portion) Below 2%

Gearing Ratio Outlook Maintain to be below the regulatory limits (10 times)

Dividend-Payout-Ratio Minimum 20% of profit in the previous year

Market Share of New Cars Above 4%

Market Share of New Motorcycles Above 11%



Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


04

Man

ag

em

en

t D

iscu

ssio

n a

nd

An

aly

sis

Chapter

DIVIDEND POLICYThe following is the Company’s cash dividend distribution policy:

on 31 March 2004, are similar and equal in all respects, including the rights over the cash dividend;

by also considering the Company’s financial position and financial soundness; and

resolve otherwise based on the Company’s Articles of Association, the Company’s management would payout cash dividend at minimum 20% of the net income.

In implementation, the Company has complied with the abovementioned dividend pay-out policy by distributing cash dividends at a minimum 20% of the net income. In 2019, Adira Finance has distributed dividends to all shareholders through the General Meeting of Shareholders, as detailed below:


Number of Shareholders 902 902 902

Authorized Capital

Number of Shares 4,000,000,000 4,000,000,000 4,000,000,000

Nominal Value (IDR million) 400,000 400,000 400,000

Issued and Fully Paid Shares

Number of Outstanding Shares 1,000,000,000 1,000,000,000 1,000,000,000


Unissued Shares

Number of Shares 3,000,000,000 3,000,000,000 3,000,000,000


Cash Dividend

Net Income in Prior Year (IDR million) 505,000 704,500 908,000

Earnings per Share (IDR) 1,009 1,409 1,815

Cash dividend per share 505,0 704,5 908,0

Cash Dividend Percentage to Net Income in Prior Year 50.0% 50.0% 50.0%

Cash Dividend Growth 51.9% 40.0% 28.8%

GMS Date 17-Mei-17 20-Apr-18 29-Mar-19

Dividend Announcement Date 17-Mei-17 20-Apr-18 29-Mar-19

Cash Dividend Pay-Out Date 16-Jun-17 23-Mei-18 30-Apr-19


REALIZATION OF PROCEEDS FROM PUBLIC OFFERINGThe Company has submitted reports concerning the use of Public Offering proceeds to comply with OJK Reg-ulation No. 30/POJK.04/2015 regarding the Obligation to Submit Reports concerning the Use of Proceeds from Public Offerings in the following table:

Realized Amount from Public Outstanding Amount

from Public Letter No. and Reporting

DateTotal Public Net Amount

Continuing Bonds IV Adira Finance Phase IV

04-Des-17 618 616 - No: 057/ADMF/CS/II/19 dated 22 February 2019

Continuing Mudharabah Bonds III Adira Finance Phase III

04-Des-17 214 213.2 - No: 057/ADMF/CS/II/19 dated 22 February 2019

Continuing Bonds IV Adira Finance Phase V

04-Des-17 2,000 1,995.0 - No: 159/ADMF/CS/V/19 dated 16 April 2019

Continuing Mudharabah Bonds III Adira Finance Phase IV

04-Des-17 96 95.7 - No: 159/ADMF/CS/V/19 dated 16 April 2019

Continuing Bonds IV Adira Finance Phase VI

04-Des-17 1,192 1,188.1 - No: 276/ADMF/CS/X/19 dated 28 October 2019

As disclosed in the prospectus issued for the purpose of the Public Offering mentioned above, all proceeds from the Public Offerings would be utilized for vehicle financing as the Company’s main business activity. As a result, as of the end of 2019, the remaining unused amount was nil. Furthermore, there were no changes on the utilization of proceeds from the public offering.

EMPLOYEE/ MANAGEMENTSHARE OWNERSHIP PROGRAMSince the establishment of Adira Finance through to 31 December 2019, the Company has not provided either an Employee Share Ownership Plan (ESOP) or Management Share Ownership Plan (MSOP). Therefore, the Company does not present information related to the number of ESOP/MSOP shares and their realization; time period; the requirements of employees and/or management who are entitled; and exercise prices.

MATERIAL INFORMATION REGARDING INVESTMENT, EXPANSION, DIVESTMENT, BUSINESS MERGER, ACQUISITION, AND DEBT/ CAPITAL RESTRUCTURINGDuring 2019, the Company conducted no material investments, divestment, business mergers, acquisition, or capital restructuring.



Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


04

Man

ag

em

en

t D

iscu

ssio

n a

nd

An

aly

sis

Chapter

TRANSACTIONS WITH CONFLICTS OF INTEREST AND TRANSACTIONS WITH AFFILIATED/ RELATED PARTIES

MATERIAL TRANSACTIONS WITH CONFLICTS OF INTERESTThroughout 2019, the Company did not conduct any transactions containing conflicts of interest.

TRANSACTIONS WITH AFFILIATED/ RELATED PARTIES Adira Finance has transactions with related parties. In accordance with PSAK No. 7 on “Related Party Disclosures,” the meaning of related party is a person or an entity that is related to a reporting entity as follow:a. A person or a close member of that person’s family

is related to a reporting entity if that person: i. has control or joint control over the reporting

entityii. has significant influence over the reporting

entity; oriii. is member of the key management personnel of

the reporting entity or a parent of the reporting entity.

b. An entity is related to a reporting entity if any of the following conditions applies:i. the entity and the reporting entity are members

of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others);

ii. one entity is an associate or joint venture of the other entity (or an associate or joint venture of member of a company of which the other entity is a member);

iii. both entities are joint ventures of the same third party

iv. one entity is a joint venture of a third entity and the other entity is an associate of the third entity;

v. the entity is a post-employment benefit plan for the benefit of employees of either the reporting entity or an entity related to the reporting entity;

vi. the entity controlled or jointly controlled by a person identified in (a);

vii. a person identified in (a) (i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity)

viii. entity, or part of a group in which the entity is a member, provides key management personnel to the reporting entity or to the shareholders of the reporting entity.

FAIRNESS, REVIEW MECHANISM POLICY AND REGULATION FULFILLMENT OF TRANSACTION WITH AFFILIATED/ RELATED PARTIESIn terms of transactions with related parties, Adira Finance conducts transactions with various related parties, given that the entity is under the same control and/or management in its business activities, the policies and transaction conditions have been mutually agreed upon to have been carried out on all related party transactions. Transactions conducted by the Company have complied with Capital Market and Financial Institution Supervisory Agency Regulation IX.E.1 on “Affiliated Transactions and Conflicts of Interest in Certain Transactions,” at the time the transactions are conducted.

OBJECTIVE AND REASON FOR RELATED TRANSACTIONSTransactions with related parties are carried out mainly for the interests and sustainability of the Company’s business related to loans in the normal course of business.


VALUE OF RELATED PARTY TRANSACTIONSDetailed information on the balance of transactions with related parties is listed in Note to Financial Statements No. 34 in the Financial Statements section of this Annual Report. The following are transactions with related parties that are still ongoing as of 31 December 2019:

Related Parties Nature of Relation Type of TransactionAmount of

Transaction (IDR million)

Transaction to Total Assets or Liabilities;

Total Income or Expenses

PT Bank Danamon Indonesia Tbk Parent Company Joint-financing Recorded in the financial

statements of Bank Danamon

Indonesia

N/A

Cash in the bank 1,804,896 5.1%

Finance Leases Receivables 33 0.0%

Borrowings 1,500,000 5.5%

Purchase of bonds 283,350 2.5%

Insurance cooperation in respect of motor vehicles under consumer financing

82,800 0.3%

PT Asuransi Adira Dinamika Associated Entity of PT Bank Danamon Indonesia Tbk

Health Insurance 893,256 3.3%

Insurance of the Company’s fixed assets

34,575 0.1%

Purchase of Bonds and Sukuk

1,144 0.0%

Purchase of Mudharabah Sukuk

490,000 1.8%

Investment in shares 40,000 0.1%

PT Adira Quantum Multifinance (dalam proses likuidasi)

Owned by the same controlling shareholder

Cash in the bank 650 0.0%

MUFG Bank, Ltd. (terhitung sejak 2008)

Controlling shareholder of the parent company

Debt to the dealer 7 0.0%

PT General Integrated Company Owned by one of the Commissioner of the Parent Company

Utang kepada dealer 103 0.0%



Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


04

Man

ag

em

en

t D

iscu

ssio

n a

nd

An

aly

sis

Chapter

CHANGES TO LAWS AND REGULATIONS WITH SIGNIFICANT IMPACTS TO THE COMPANY

In 2019, there were changes to the laws and regulations that have significant impacts to the Company, as follows:

Name and Regulatory Number (OJK and BI)

Summary of Changes/ Description of Rules

Qualitative Impact to the Company

Quantitative Impact to the

Company

Adjustments Measures

Conducted by the Company

OJK Regulation No. 10/POJK.05/2019 on Business Operations of Sharia Financing Companies and Sharia Business Units of Financing Companies

This OJK Regulation amends several provisions in OJK Regulation No. 31/POJK.05/2014, among others:

1) Requirements to submit all applicable agreements and requesting OJK approval for any agreements that have not yet been regulated.

2) To establish a product committee3) To establish a fraud handling unit

or function that reports to the President Director and the report must be submitted to the Board of Commissioners.

4) Acquisition cost is limited to 17.5% per financing agreement, and a 0% advance payment is allowed for those with an NPF ratio below or equal to 1%.

No significant impact to the Company’s business


Adira Finance must report all applicable agreements, establish a product committee, and adjust its anti-fraud implementations to comply with OJK regulations.

OJK Regulation No. 24/POJK.05/2019 on Business Plan for Non-Bank Financial Institutions


1) The Board of Directors is required to prepare a Business Plan that must be approved by the Board of Commissioners and must be notified to the Shareholders and all organizations in the Company;

2) The Business Plan will be submitted to OJK at the end of November;

3) The Board of Directors must prepare a Business Plan Realization Report that will be submitted to OJK every semester.

4) The Board of Commissioners must prepare a Business Plan Oversight Report that will be submitted to the OJK every semester.

5) Amendments to the Business Plan will only be made once (no later than the end of June this year).



Adira Finance must comply with the new provisions and start submitting the 2020 Business Plan by the end of November with reference to the OJK format.


Name and Regulatory Number (OJK and BI)

Summary of Changes/ Description of Rules

Qualitative Impact to the Company

Quantitative Impact to the

Company

Adjustments Measures

Conducted by the Company

OJK Regulation No. 23/POJK.01/2019 on the Implementation of Anti Money-Laundering and Anti-Terrorism in the Financial Services Sector


1) Definition of Proliferation Weapons of Mass Destruction.

2) Independent Risk Assessment of AML-CTF that refers to the National Risk Assessment and OJK Risk Assessment.

3) The verification process for potential customers or consumers can be conducted through the electronic facilities of third parties that have been approved by the FSA with the terms and procedures that have been established in the FSA Rules



ADMF must adjust the AML-CTF Program Implementation Guidelines or policies no later than 6 months after the issuance of OJK Regulation No.23/POJK.01/2019.

OJK Circular No.26/SEOJK.05/ 2019 and No. 27/SEOJK.05/2019 on Monthly Reports of Financing Companies and Sharia Financing Companies.

This OJK Regulation amends several provisions in OJK Circular No. 03/SEOJK.05/2016 and No. 4/SEOJK.05/2016, among others:

1) Additional forms regarding the list of related parties, adjustment to the type of financing method;

2) Addition of information reported, including total incentive costs, third party costs. Detailed financing related income for each financing contract;

3) The Financing Company will perform a test on the submission of monthly reports for the period of March 2020 - May 2020;

4) Reporting obligations under this provision will take effect in the June 2020 reporting period.



Adira Finance must perform adjustment to comply with the prevailing regulations.



Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


04

Man

ag

em

en

t D

iscu

ssio

n a

nd

An

aly

sis

Chapter

CHANGES IN ACCOUNTING POLICIES

The Financial Accounting Standard Board of Indonesia Institute of Accountants and the Sharia Financial Accounting Standard Board of Indonesia Institute of Accountant has set SFAS and Interpretation of SFAS (IFAS) that took effect on 1 January 2019, as stated in the Notes to the Audited Financial Statements in this Annual Report.

The implementation of the above standards did not result in changes to the Company’s accounting policies and had no significant impact on the amounts reported for current or prior financial years

Accounting Standards Summary of Changes Reason for the Change Impact on the Company

ISFAS 33 “Foreign Currency Transactions and Advance Consideration”

This interpretation clarifies the use of foreign exchange rates in recognition of the purchase of assets/ expenses and sales in foreign currencies with a down / advance payment, namely:1. Exchange rates on the date of

payment or receipt of an advance payment to recognize advance payment

2. Exchange rate at the time the item is received/ submitted for the remaining payment.

This interpretation aims to reduce the diversity of accounting treatment practices.

Not significant because purchase/ sales in foreign exchange is very minimum.

ISFAS 34 “Uncertainty over Income Tax Treatments”

This interpretation regulates the recognition and assessment of SFAS 46 ‘Income Tax’ in the event of uncertainty regarding the treatment of income tax.

Uncertainty over income tax treatment is any tax treatment that is applied by an entity, in which there is an uncertainty regarding whether the treatment will be accepted by the tax authority.

This interpretation provides a framework for considering, recognizing, and measuring the accounting effects of tax uncertainty. This interpretation provides specific guidelines that have not been explained in SFAS 46.

There is no impact on the Company regarding Uncertainty over the current income tax treatment

Amendment to SFAS 24 “Employee Benefits: Plan Amendment, Curtailment or Settlement”

This Amendment governs entities to:

Current Service Cost and Interest

period after the amendment, curtailment, or completion of the program;

Past Service Costs or gains/ losses from completion. Accordingly, the entity does not consider the effect of the assets’ upper limit.

There are no paragraphs in the related statement that govern this before.

No significance because there are currently no Program Amendments, Curtailments or Completions.

Annual Improvement 2018 SFAS 22 “Business Combination”

This Annual Improvement regulates business combinations that are carried out in stages in the event the acquisition is one of the parties in a joint operation.

There are no paragraphs in the related statement that govern this before.

No impact on the Company because there are no joint arrangements.

Annual Improvement SFAS 26 “Borrowing Cost”

This annual adjustment regulates if specific borrowing still has a balance after qualifyin asset is ready to be used, then the balance of such borrowing becomes part of the general borrowing.

There are no paragraphs in the related statement that governed this before.

No impact on the Company because there are no Borrowing Costs attributable to qualifying assets.

Annual Improvement SFAS 46 “Income Taxes”

This Annual Adjustment regulates if there are dividend payments affecting the income tax rate, lower or higher, then the impact of the tax rate is recognized in profit or loss, other comprehensive income, or equity, in accordance with the time the entity initially recognized the transaction that generated the dividend.


No impact on the Company


Accounting Standards Summary of Changes Reason for the Change Impact on the Company

Annual Improvement 2018 SFAS 66 “Joint Arrangements”

This Annual Improvement provides that parties who has joint control over a business that is a joint operation may not re-measure interests that are previously held in joint operations.


No impact on the Company, there are currently no joint arrangements.

COMPLIANCE IN TAX PAYMENTAdira Finance as a public company that runs its business in Indonesia contributes to the state in the form of fulfilling the Company’s obligations as a taxpayer and as a tax collector. The following is a table of tax obligation fulfillments:

Description

2017 2018 2019

Total(in IDR million)



Value Added Tax 48,697 60,895 127,799

Income Tax 248,055 308,054 350,289

Corporate Income Tax 741,822 727,154 791,842

Other Taxes 21,728 25,585 26,157

Total 1,060,302 1,121,688 1,269,984



Opening

Management Report

CorporateData


CorporateGovernance


SupportingData


04

Man

ag

em

en

t D

iscu

ssio

n a

nd

An

aly

sis

Chapter

R ADIRA 2019 ENG HIRESSS · 2020-03-09 · Social Responsibility Supporting Data Annual Financial...

Documents

Transcript of R ADIRA 2019 ENG HIRESSS · 2020-03-09 · Social Responsibility Supporting Data Annual Financial...