Internal Governance & Audit of Bank Indonesia

1. INTERNAL GOVERNANCE AND AUDIT OF BANK INDONESIA Wahono Diphayana

2. Internal Governance In the implementation of its tasks, Bank Indon esia has internal procedures which support ap plication of principles of Good Governance in the forms, among other things, of: • Process of decision making through Board of Governors Meeting (RDG). • Delegation of authority.

3. Internal Governance • Provision of transparent information relating to implementation of Bank Indonesia’s tasks. • Accountability of the implementation of Bank Indonesia’s tasks and authorities for stakeholders. • Application of risk management. • Management of resources taking account o f effectiveness and efficiency.

4. Internal Governance The implementation of the above mentioned inter nal governance of Bank Indonesia is supported by an independent, professional, and objective internal audit function, referring to i nternal audit ethical codes and professional standards of the Institute of Internal Auditors, including: • Mission: To provide opinion and recommendation on the process of governance, risk management, and internal control through assurance and consultation activities in the achievement of organization objectives.

5. Internal Governance • Vision: To become a professional internal audit unit with national and international reputation. • Scope of evaluation: To evaluate the adequacy and effectiveness of the process of governance, risk management, and internal control.

6. Internal Governance • Accountability: To provide services of assurance and consultation on control, risk management, and good governance, and other special assignment as far as not in the contrary to standards of the Institute of Internal Auditors. • Authority: To have a full access to carry out audit on properties/assets, human resources, and all data and information owned by Bank Indonesia .

7. PROCEDURE OF EQUITY PARTICIPATION BY BANK INDONESIA Bank Indonesia may only carry out equity participation in any legal entity or any other entity deemed necessary in the implementation of Bank Indonesia’s tasks and upon the approval of the House of Representatives. Any equity participation which not complies with the criteria mentioned above may only be conducted upon the approval of the House of Representatives. The fund for equity participation may only be derived from statutory reserves.

8. PROCEDURE OF EQUITY PARTICIPATION BY BANK INDONESIA Prior to carrying out the equity participation, Bank Indonesia shall conduct feasibility analyses on various aspects relating to the equity participation plan and consider the legal, internal financial condition, and risk management aspects. The equity participation plan shall be discussed and approved by the Board of Governors Meeting before submitted to the House of Representatives for approval.

9. PROCEDURE OF EQUITY PARTICIPATION BY BANK INDONESIA Bank Indonesia equity participation position and development are presented in Bank Indonesia Financial Annual Report. The position and development may also be looked up in Bank Indonesia Financial Report published in mass media and Bank Indonesia Condensed Weekly Balance Sheets published in the Official Gazette of the Republic of Indonesia.