Negara (Persero) Tbk

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2 JOINT DECREE THE BOARD OF COMMISSIONERS OF PT BANK TABUNGAN NEGARA (PERSERO) Tbk NUMBER: SKB - 01/DEKOM-BTN/XII/2013 AND THE BOARD OF DIRECTORS OF PT BANK TABUNGAN NEGARA (PERSERO) Tbk Number : SKB-01/DIR-BTN/XII/2013 ON RISK MONITORING COMMITTEE PT BANK TABUNGAN NEGARA (PERSERO) Tbk Considering: a. whereas as part of the duties and responsibilities of the Board of Commissioners in carrying out the supervision of PT Bank Tabungan Negara (Persero) Tbk as determined by Bank Indonesia is to monitor the implementation of risk management in PT Bank Tabungan Negara (Persero) Tbk b. whereas for that purpose, it is necessary to set up a Risk Monitoring Committee as an organ of the Bank in charge of assisting and is directly responsible to the Board of Commissioners in carrying out its duties; c. whereas for that purpose, it is necessary to prepare a charter as work guidelines of the Page 2 of 25

3 Risk Monitoring Committee that is constantly evaluated and improved; d. whereas for that purpose, it is necessary to be set forth in a Joint Decree between the Board of Commissioners of PT Bank Tabungan Negara (Persero) and the Board of Directors of PT Bank Tabungan Negara (Persero) Tbk. Keeping in mind: 1. Law Number 7 of 1992 dated 25 March 1992 on Banking, as amended by Law Number 10 of 1998 dated 10 November 1998 on Banking. 2. Law Number 8 of 1995 dated 10 November 1995 on the Capital Market. 3. Law Number 19 of 2003 dated 3 August 2003 on State-Owned Enterprises. 4. Law Number 40 of 2007 dated 16 August 2007 on Limited Liability Company. 5. Law Number 6 of 2009 dated 13 January 2009 juncto Government Regulation in Lieu of Law Number 2 of 2008, Law No 23 of 1999 on Bank Indonesia. 6. Law Number 21 of 2011 dated 22 November 2011 on Financial Services Authority. 7. Government Regulation Number 45 of 2005 dated 25 October 2005 on the Establishment, Page 3 of 25

4 Management, Supervision, and Dissolution of State-Owned Enterprises (SOE). 8. Regulation of the State Minister for SOE Number Per-01/MBU/2011 dated 1 August 2011 on Good Corporate Governance in State-Owned Enterprises (SOE); jo Regulation of the State Minister for SOE Number PER- 09/MBU/2012 on Amendment to Regulation of the State Minister for State-Owned Enterprises Number PER-01/MBU/2011 Good Corporate Governance in State-Owned Enterprises. 9. Regulation of the State Minister for SOE Number PER-12/MBU/2012 dated 24 August 2012 on Supporting Organs for the Board of Commissioners/Board of Supervisors of State- Owned Enterprises (SOE). 10. Regulation of the Minister of SOE Number PER-04/MBU/2013 dated 19 April 2013 on Amendment to Regulation of the State Minister for State-Owned Enterprises Number PER-07/MBU/2010 on Guidelines for Determining the Remuneration of Members of the Board of Directors, Board of Commissioners and Board of Supervisors of Page 4 of 25

5 State-Owned Enterprises. 11. Regulation of Bank Indonesia Number 5/8/PBI/2003 dated 19 May 2003 on Implementation of Risk Management for Commercial Banks as amended by Regulation of Bank Indonesia No.11/25/PBI/ Regulation of Bank Indonesia Number 8/4/PBI/2006 dated 30 January 2006 on Implementation of Good Corporate Governance for Commercial Banks, as amended by Regulation of Bank Indonesia Number 8/14/PBI/2006 dated 5 October Regulation of Bank Indonesia PBI Number 11/33/2009 dated 7 December 2009, Implementation of Good Corporate Governance for Sharia Commercial Banks and Sharia Units. 14. Regulation of Bank Indonesia Number 13/1/PBI/2011 dated 5 January 2011 on Assessment of Commercial Bank Soundness. 15. Circular Letter of Bank Indonesia Number 15/15/DPNP dated 29 April 2013 on Implementation of Good Corporate Governance for Commercial Banks. 16. Decree of the Head of Capital Market and Page 5 of 25

6 Financial Institution Supervisory Agency Number KEP-643/BL/2012 on Audit Committee Establishment and Operational Guidance, dated 7 December General Meeting of Shareholders (GMS) of PT Bank Tabungan Negara (Persero) Tbk dated 27 March 2013 on Enactment of Regulation of the State Minister for SOE Number PER- 12/MBU/2012 dated 24 August 2012 on Supporting Organs for the Board of Commissioners/Board of Supervisors of State- Owned Enterprises (SOE). 18 Deed of Incorporation of PT Bank Tabungan Negara (Persero) Tbk Number 136 dated 31 July 1992 with several amendments, lastly by Notarial Deed Number 54 dated 28 December Decree of the Board of Directors Number 06/DIR/DK/2009 dated 29 May 2009 on Guidelines for Good Corporate Governance of PT Bank Tabungan Negara (Persero); Noting: Resolution of the meeting of the Board of Commissioners and Risk Monitoring Committee dated 25 April 2013 on the Substance and Page 6 of 25

7 Form of Risk Monitoring Committee Charter of PT Bank Tabungan Negara (Persero) Tbk. It is decided: It is determined: Joint Decree of the Board of Commissioners of PT Bank Tabungan Negara (Persero) and the Board of Directors of PT Bank Tabungan Negara (Persero) Tbk on Risk Monitoring Committee Charter of PT Bank Tabungan Negara (Persero) Tbk. Article 1 GENERAL PROVISIONS In this Regulation, the definition of: 1. State-Owned Enterprises, hereinafter shall be referred to as SOE are business entities of which all or most of the capital is owned by the State through direct investments originating from separable national wealth. 2. Perusahaan Perseroan, hereinafter shall be referred to as Persero is an SOE in the form of a limited liability company which capital is divided into shares of which all or at least 51% (fifty one percent) of its shares is owned by the Republic of Indonesia which main objective is to gain profit. Page 7 of 25

8 3. Bank is PT Bank Tabungan Negara (Persero) Tbk. 4. Minister is the minister who is appointed and/or authorized to represent the Government as State shareholder in Persero by taking into account the laws and regulations. 5. The General Meeting of Shareholders, hereinafter shall be referred to as the GMS is an organ of the Persero which has the authority not granted to the Board of Directors or Board of Commissioners within the limits specified in Law Number 40 of 2007 and/or the Articles of Association of the Company. 6. The Board of Commissioners is an organ of the Bank in charge for supervision in general and/or in particular and to provide advice to the Board of Directors in running the Bank. 7. Independent Commissioners are members of the Board of Commissioners who do not have financial, management, share ownership and/or family relationship with other members of the Board of Commissioners, Board of Directors or controlling shareholders or any relationship with the Bank, which could affect his/her ability to act independently. Page 8 of 25

9 8. The Board of Directors is an organ of the Bank that is fully responsible for the management of the Bank for the interests and objectives of the Bank and to represent the Bank inside and outside of court in accordance with the provisions of the Articles of Association. 9. Supporting Organs for the Board of Commissioners are instruments of the Board of Commissioners that assist the Board of Commissioners in performing their duties. 10. The Committee is the Risk Monitoring Committee established by and is responsible to the Board of Commissioners tasked to assist the Board of Commissioners in carrying out their duties. 11. Independent Party is the party outside the Bank who do not have financial, management, share ownership and or family relationship with the Board of Commissioners, the Board of Directors or controlling shareholders or any relationship with the Bank, which could affect his/her ability to act independently. 12. Good Corporate Governance is the Bank's governance which applies the principles of transparency, accountability, responsibility, independency and fairness. 13. Risk is the potential loss due to the occurrence of certain events. Page 9 of 25

10 14. Risk Management is a set of procedures and methodologies used to identify, measure, monitor, and control risks arising from the Bank's business activities. Article 2 AIMS AND GOALS (1) This Committee Charter is intended as a work guidelines of the Committee to carry out its duties to assist the Board of Commissioners. (2) This Committee Charter was created with the aim to be the basis for the Committee in: a. Conduct an evaluation of the Bank's risk management policy; b. To evaluate the suitability of the Bank's risk management policy with the implementation of the policy; c. To monitor and evaluate the implementation of the Risk Management Committee and the Risk Management Unit. Page 10 of 25

11 Article 3 DUTIES, RESPONSIBILITIES AND AUTHORITY OF THE COMMITTEE (1) The Committee is working collectively in carrying out its duties to assist the Board of Commissioners. (2) The Committee shall be independent both in the performance of its duties and in reporting, and is directly responsible to the Board of Commissioners. (3) In carrying out its functions, the Committee perform the duties and responsibilities as follows: a. To collect data and information as well as to evaluate the Bank's risk management policy which at least consist of: 1) Credit Risks 2) Market Risks 3) Liquidity Risks 4) Operational Risks 5) Legal Risks Page 11 of 25

12 6) Reputation Risks 7) Strategic Risks 8) Compliance Risks b. To evaluate the conformity between the Bank's risk management policy with the policy implementation; c. To monitor and evaluate the implementation of duties of the Risk Management Committee and the Risk Management Unit; d. To promote the empowerment of the Bank's risk management functions; e. To report to the Board of Commissioners in the event of the possibility of materialization of the Bank's risk and to propose an alternative solution; f. The Committee may conduct risk monitoring activities in the unit of work that is closely related to the risk-based decision making and work closely with the Risk Management Division; g. To invite the management and other internal parties to attend the Committee meetings if deemed important and necessary. Page 12 of 25

13 h. To perform other duties of the Board of Commissioners in accordance with the risk management duties. Article 4 OBLIGATIONS OF THE COMMITTEE The Committee is obliged to: (1) Create work guidelines set forth in the Committee Charter. (2) Create the Committee's work program at the beginning of the year and endorsed by the Board of Commissioners. (3) Maintain the confidentiality of documents, data, and information of the Bank. (4) The Risk Monitoring Committee shall make a report to the Board of Commissioners on any given assignment. (5) The Risk Monitoring Committee shall make annual report on the implementation of the Committee's activities disclosed in the Bank s Annual Report. Page 13 of 25

14 Article 5 ACCESS AND CONFIDENTIALITY OF INFORMATION (1) Based on a written assignment letter of the Board of Commissioners, the Committee may access the records or information about employees, funds, assets and other resources of the Bank relating to the performance of its duties. (2) The Committee shall report in writing the assignment results referred to in paragraph (1) to the Board of Commissioners. (3) The Committee shall maintain the confidentiality of documents, data, and information of the Bank from both internal and external parties and it shall only be used for the execution of its duties. Article 6 STRUCTURE, APPOINTMENT, AND DISMISSAL OF THE COMMITTEE (1) Chairperson and the Committee Members are appointed and dismissed by the Board of Commissioners. (2) The Committee Members at least consist of: a. an Independent Commissioner b. an Independent Party with expertise in finance Page 14 of 25

15 c. an Independent Party with expertise in risk management (3) The Committee is chaired by Independent Commissioner. (4) Members of the Board of Directors are prohibited from becoming members of the Committee. (5) Independent commissioner and Independent Party who are members of the Committee shall constitute at least 51% (fifty one percent) of the members of the Committee. (6) The Chairperson of the Committee may only hold dual position as the Chairperson of the Committee at most in 1 (one) other committee under the Board of Commissioners. (7) The Committee Member, who is a member of the Board of Commissioners, shall automatically ceased to hold office when the term of office as members of the Board of Commissioners ends. (8) In the event of a member of the Board of Commissioners who served as a Chairperson of the Committee ceases to be a member of the Board of Commissioners, the Chairperson of the Committee shall be replaced by other independent member of the Board of Commissioners within a period of 30 (thirty) days. Page 15 of 25

16 (9) Dismissal and appointment of the Chairperson and the Committee members shall be reported to the General Meeting of Shareholders. Article 7 REQUIREMENTS OF COMMITTEE MEMBERSHIP (1) Having an integrity, good character and good morals. (2) Having the ability, knowledge and adequate experience related to their duties. (3) Independent Party referred to in article 5, paragraph (2).b if it meets the following criteria: a. having the knowledge in the field of economy, finance and/or banking; and/or b. having work experience of at least 5 (five) years in the field economy, finance and/or banking. (4) Independent Party referred to in article 5, paragraph (2).c if it meets the following criteria: a. having the knowledge in risk management; and/or b. having work experience of at least 2 (two) years in risk management. (5) Able work in a team and communicate well. (6) Independent and professional. Page 16 of 25

17 (7) Having sufficient knowledge to read and comprehend financial statements. (8) Having sufficient knowledge about the laws and regulations in banking and other related laws and regulations. (9) Is not a person who had the authority and responsibility for planning, directing, controlling, or supervising the activities of the Bank within the last 6 (six) months before being appointed by the Board of Commissioners. (10) Does not have shares, either directly or indirectly at the Bank. In the event of members of the Committee to receive shares of the Bank as a result of a legal event, within a maximum period of 6 (six) months after obtaining such shares he/she shall transfer it to any other party. (11) The Committee members who come from outside the Bank is prohibited from having family relationship by marriage to the third degree either vertically or horizontally with members of the Board of Commissioners and the Board of Directors of the Bank. (12) The Committee member who is not a member of the Board of Commissioners, should not have dual position as: Page 17 of 25

18 a. Member of the Board of Commissioners in SOE/other companies. b. Secretary/Staff of the Secretariat of the Board of Commissioners in SOE/other companies. c. Other committee members in the Company, and/or. d. Members of the committee in SOE/other companies. (13) If any member of the Committee comes from a particular institution, the institution from which the member of the Committee comes may not provide services from the SOE in question. Article 8 WORK PROCEDURE OF THE COMMITTEE (1) Board of Commissioners to establish Committee Charter based on the proposal of the Committee. (2) The Original Committee Charter to be submitted to the Board of Directors for documentation. (3) Before the current financial year, the Committee shall prepare and submit a work plan and annual budget to the Board of Commissioners to be determined. (4) A copy of the work plan and budget of the Committee referred to in paragraph (3) shall be submitted by the Page 18 of 25

19 Board of Commissioners to the Board of Directors to be acknowledged. (5) The implementation of the work plan and the annual budget of the Committee shall be reported to the Board of Commissioners. (6) Evaluation of the performance of the Committee shall be conducted annually using the method determined by the Board of Commissioners. Article 9 THE COMMITTEE MEETINGS (1) The Committee shall hold meetings at least equal to the minimum requirements of the Board of Commissioners meeting set out in the articles of association. (2) The Committee meetings may only be held if attended by at least 51% (fifty one percent) of the number of members including an Independent Commissioners and Independent Parties. (3) The meeting to be chaired by Committee Chairperson or the most senior member if the Chairperson of the Committee is absent. Page 19 of 25

20 (4) The decision of the committee meetings shall be done by consensus. (5) In the event of consensus is not reached as referred to in paragraph (4), decisions shall be made by a majority vote. (6) Every Committee meeting shall be set forth in the minutes of meeting, signed by all members of the Committee present and the minutes shall be well documented. (7) Minutes of the meeting referred to in paragraph (6) shall be submitted in writing by the Committee to the Board of Commissioners. (8) Dissenting opinions in the Committee meeting shall be expressly disclosed in the minutes of the meeting along with the reasons for such dissent. (9) If the members of the Board of Commissioners could not physically attend a meeting, they may attend the meeting by using: a. power of attorney; b. teleconference; c. any other ways permitted in accordance with procedures and provisions of the existing law. Page 20 of 25

21 (10) The presence of the Committee members at the meeting to be reported in the quarterly reports and annual reports of the Committee. Article 10 COMMITTEE REPORTING (1) The Committee shall submit a report to the Board of Commissioners on every execution of duties, accompanied by recommendations if needed; (2) The Committee to make the quarterly and annual reports to the Board of Commissioners; (3) The report of the Committee referred to in paragraph (1) and (2) to be signed by the Chairperson and the Committee members; (4) The contents of the report shall contain at least among others issues, the analysis and recommendations; (5) Reporting is limited and only for the Board of Commissioners. Article 11 TERM OF OFFICE (1) The term of office of a Committee member who is not a member of the Board of Commissioners is at most 3 (three) Page 21 of 25

22 years and may be extended once for 2 (two) years of term of office, without prejudice to the right of the Board of Commissioners to dismiss him/her at any time. (2) If a member of the Board of Commissioners which is the Chairperson of the Committee quits before his/her term as an Independent Commissioner, the Chairperson of the Committee shall be replaced by other Independent Commissioner. (3) Accumulated term of office of a person as a member of the Committee in an SOE is a maximum of 5 (five) years. (4) Committee members who has served over the maximum time limit referred to in paragraph (3), shall no longer continue in office. (5) The incumbent Committee members may only continue in office until the accumulated term of office reaches maximum time limit referred to in paragraph (3). Article 12 IMPROVEMENT IN PROFESSIONALISM OF THE COMMITTEE MEMBERS AND UTILIZATION OF SUPPORTING PERSONNEL (1) Committee members are willing to continuously improve their competence through education and training related to the assignment of the Committee, in particular on risk Page 22 of 25

23 management certification to for improved professionalism in supporting the execution of their duties. (2) The Audit Committee may request assistance from independent personnel in order to support the smooth implementation of the duties at the Bank s expense with approval from the Board of Commissioners. Article 13 THE COMMITTEE S BUDGET (1) The Committee s budget is part of the budget of the Board of Commissioners which is determined at the start of each year; (2) The Committee s budget is proposed and approved by the Board of Commissioners; (3) The Committee s budget covers, among others, but is not limited to: a. Honorarium of Committee members; b. The cost of training, workshops at home and abroad; c. Travel expenses at home and abroad; d. Other costs required to support the activities of the Committee. Page 23 of 25

24 (4) Accountability and evaluation of the Committee s budget shall be periodically reported to the Board of Commissioners. Article 14 REMUNERATION OF THE COMMITTEE MEMBERS (1) The remuneration of the Committee Members shall be determined by the Board of Commissioners by taking into account the capability of the Bank. (2) The remuneration of the Committee Members referred to in paragraph (1) is in the form of honorarium maximum of 20% (twenty percent) of the salary of Director of the Bank, provided that the tax shall be borned by the Bank, and they are not allowed to receive other income in addition to the honorarium. (3) The Member of the Board of Commissioners which is a Chairperson/Member of the Committee shall not be given additional income other than income from the office as a Member of the Board of Commissioners. Article 15 CLOSING (1) The Committee Charter is dynamic and may be amended if necessary at any time as things developed. Page 24 of 25

25 (2) The matters that have not yet been set in the Committee Charter will be set later by the Joint Decree of the Board of Commissioners and Board of Directors. (3) With the entry into force of this Joint Decree, the Committee Charter issued on 1 April 2011 is no longer valid. (4) This Joint Decree shall come into force from the date of stipulation. Stipulated in Jakarta On PT BANK TABUNGAN NEGARA (PERSERO) Tbk [signature] Sahala Lumban Gaol Commissioner [signature] Dwijanti Tjahjaningsih Commissioner [signature] Maryono President Director I certify that the above is a correct and accurate translation into English by sworn and authorized translator. Jakarta, June 23, 2015 Page 25 of 25 F a t c h u r o z a k Sworn & Authorized Translator