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ANNUAL REPORT 2015

The Biggest National Payment Bank
.195

MANAGEMENT DISCUSSION AND ANALYSIS

Financial Review

In 2015, BRI sustained its position as the Bank with the largest profits
since 2005. BRI’s consolidated net income in 2015 increased by 4.9% from Rp24.23 trillion in 2014 to Rp

This sub-chapter presents analysis and discussion on BRI’s financial performance. The presentation of financial
performance complies with the Indonesian Statement of Financial Accounting Standards (SFAS) as well as the
Accounting and Reporting Guidelines for the Indonesian Banking Industry. At the end of this analysis, BRI also
presents a brief overview on the performance of its subsidiaries, as an integral and inseparable part of the Bank’s
financial performance.

The content of the following analysis refers to BRI Consolidated Financial Statements audited by Purwantono,
Sungkoro dan Surja (PSS-EY) Public Accountant Firm, in accordance with Independent Auditor Report No. RPC-
250/ PSS/2016 dated 29 January 2016, which concluded that BRI’s consolidated financial statements have
been presented fairly in all material respects. BRI’s Audited Consolidated Financial Statements are attached
to this Annual Report.

PT Bank RakyaT IndonesIa (PeRseRo) TBk.

.196 ANNUAL REPORT 2015
The Biggest National Payment Bank

KEY HIGHLIGHTS CORPORATE GOVERNANCE
MANAGEMENT REPORT CORPORATE SOCIAL
REPORTS COMPANY RESPONSIBILITY FSA REFERENCE-
PROFILE
MANAGEMENT DISCUSSION AND ARA CRITERIA 2015
MANAGEMENT
ANALYSIS DISCUSSION AND ANALYSIS BANK INDONESIA REGULATIONS
OPERATIONAL SUPPORT REVIEW REFERENCE CONSOLIDATED FINANCIAL

Financial Review

INCOME STATEMENTS
Although economic condition was not favorable, BRI was able to record robust financial performance. The
2015 performance was achieved by several indicators, among others loan quality that outperformed the
industry average, an increase in loans outstanding, stable loan composition, and lower cost of funds.

Last year, BRI also upheld its position as the bank with the largest profits – a reputation that has been maintained
since 2005. In 2015, BRI booked an increase of 4.9% in consolidated net income from Rp24.23 trillion in 2014 to
Rp25.41 trillion.

In Million Rp
Growth (%)
Income Statements
2013 2014 2015
2013-2014 2014-2015
Interest Income 57,720,831 73,065,777 83,007,745 26.58 13.61
Profit Sharing – Sharia 1,740,253 2,056,436 2,426,292 18.17 17.99
Less: Interest Expenses (15,354,813) (23,679,803) (27,154,270) 54.22 14.67
Interest Income and Profit Sharing - Net 44,106,271 51,442,410 58,279,767 16.63 13.29
Other Operating Income 8,348,459 9,299,140 12,409,041 11.39 33.44
Allowance for Written- Off Impairment (3,947,875) (5,721,905) (8,891,305) 44.94 55.39
Losses on Financial and Non-
Financial Assets - Net
(Expense) Reversal for Net Estimated 191 (175) (844) (191.62) 382.29
Commitment and Contingencies - Net
Reversal for Net Allowance for Impairment 1,309 2,721 (8,056) 107.87 (396.07)
Losses on Non-Financial Assets - Net
Less: Other Operating Expenses (22,380,778) (26,715,275) (31,275,696) 19.37 17.07
Operating Income 26,127,557 28,306,916 30,512,907 8.34 7.79
Non-Operating Income - Net 1,782,489 2,497,196 1,981,111 40.10 (20.67)
Income Before tax 27,910,066 30,804,112 32,494,018 10.37 5.49
Tax Expenses (6,555,736) (6,577,511) (7,083,230) 0.33 7.69
Net Income Before Extraordinary Items 21,354,330 24,226,601 25,410,788 13.45 4.89
Net Income 21,354,330 24,226,601 25,410,788 13.45 4.89

In Million Rp Growth (%)
Income Statements
2013 2014 2015 2013-2014 2014-2015
Net Income 21,354,330 24,226,601 25,410,788 13.45 4.89
Other Comprehensive Income – Net After Tax (1,437,676) 254,919 (538,658) (117.73) (311.31)
Comprehensive Income of the Year 19,916,654 24,481,520 24,872,130 22.92 1.60

PT Bank RakyaT IndonesIa (PeRseRo) TBk.

330.878 0. where loans and securities respectively accounted for 74.24 1.341 86.898 2.2% of Earning Assets.12 trillion in 2014 to Rp85.045.65 65.30 247. ANNUAL REPORT 2015 The Biggest National Payment Bank .458.842 0.434. This growth was far lower than the 2014 increase of 54. Loans and securities were the largest contributors to interest income with 86.740.29 Indonesia Others 1.292 2.68 trillion in 2014 to Rp27.3% or amounting to Rp11.44 1.555 4.930.514 87. taking into account the economic sluggishness.41% in 2014 to 7.76 74.234. respectively.50% in 2015.33 242.93 2.253 2.22% YoY and in line with contracted growth of Third Party Funds from 23.692 1.117 0.51 3.60 6.1% contributions.652 87.38 and Bank Indonesia Demand Deposits with Bank 190.27 245. BRI’s strategy was to carry out consistent expansion in the micro segment.093 2.122.584 0.74 Government Bonds 163. To maintain interest income growth in 2015.117.174.8% in the previous year.461.08 Placements with Other Banks 1.037 100 In 2015.39 Sharia 1.729 0.3% and 25. To drive sustainable growth of net interest income.465 1.33 trillion.43 trillion in 2015. the position of interest income from earning assets other than loans rose by 23. predominantly occupied by Micro Loans.436 2. the contribution of interest income from loans was relatively stable at 86. This was due to higher interest income from earning assets other than loans and the stable composition of high-yield loans.213 100 85.426.015 1. BRI also improved asset quality by adopting stricter credit risk mitigation steps and accelerating the process to resolve non-performing loans (NPL) by way of loan restructuring or loan settlement.034 4.7% from Rp75.7% year-on-year (YoY) from Rp23. and agribusiness sectors.83 1.684.191.836. drove the growth of interest income (including sharia profit sharing) by 13.372. maximizing business potential of the corporate segment through selective loan disbursement especially in the energy.056. INTEREST EXPENSES Interest expenses in 2015 grew by 14.15 trillion.7% in 2015 from 87.426 2.197 MANAGEMENT DISCUSSION AND ANALYSIS Financial Review INTEREST INCOME BRI’s efforts to keep and maintain loan quality and portfolio composition.007 7.73 2. The contributions were also reflected in their positions in the Bank’s portfolio.106.7% and 7.08 1.28 (Recapitalization Bonds) Securities 2.511 0.84 Total Interest Income 59. infrastructure.32 222.084 100 75. The following table presents the composition of interest income in detail: Interest Income In Million Rp 2013 2014 2015 Component Million Rp % Million Rp % Million Rp % Loans 52. While this particular component recorded significant growth. .

PT Bank RakyaT IndonesIa (PeRseRo) TBk. .

689 70.156 1.73 Others 901.531 10.270 100 banking business that targets the OTHER OPERATING The lower increase in Interest Corporate segment (Wholesale INCOME Expenses was also due to an Funding).633 69.29 composition from 52.87 949.929. This is to be expenses. .63%.23 Subordinated Loans 220.75% to 7. As clarified In its medium and long-term above.94 911.013.23 460.25 1. BRI booked Rp58.90 558. Therefore.590 4.824 4.671 4.266.03 2.435.113 1.52 335.170 3.961 3. and in 2015. . fee- from 7.71 18. 83.20 1.813 100 23.50% in February At the end of the financial year based income was the main driver 2015.499 5. trillion in 2014 to Rp12.803 100 27.45 16. though lower 4.984 3.004. due to an increase in achieved by focusing on transaction the low-cost fund ratio.538 1.733 5.679.41 trillion improved banking liquidity.24% compared to net interest in 2015.612.42 1. or dropped by 4. .615 0.564 0. the cost of funds also trillion of net interest income.610 4. BRI aims to maintain its interest income was driven by a low-cost fund ratio above 55% of the lower increase in interest total Third Party Funds.5% to 57.69 2.8%. at the end of Other Operating Income rose by increase in Low Cost Fund 2015 BRI established a new unit.686 8.225 0.01 Sharia Expenses 764.786 1.3% contribution.71 Savings 2.479 2.88 Borrowings 222.714 0. income growth in 2014 at 16.44 215.64 Deposits From Other Banks and Other Financial Institutions 188.743. account.277 1.06 Securities Sold with Repurchase Agreements .354. Taking these dynamics into 2015.198 ANNUAL REPORT 2015 The Biggest National Payment Bank KEY HIGHLIGHTS CORPORATE GOVERNANCE MANAGEMENT REPORT CORPORATE SOCIAL REPORTS COMPANY RESPONSIBILITY FSA REFERENCE- PROFILE MANAGEMENT DISCUSSION AND ARA CRITERIA 2015 MANAGEMENT ANALYSIS DISCUSSION AND ANALYSIS BANK INDONESIA REGULATIONS OPERATIONAL SUPPORT REVIEW REFERENCE CONSOLIDATED FINANCIAL Financial Review Interest Expenses In Million Rp 2013 2014 2015 Component Million Rp % Million Rp % Million Rp % Time Deposits 9.67 Demand Deposits 1.4% in 2015.230 14.01 1. the notable growth of net strategies.65 212.98 994.948 0.3%.36 Securities Issued 99.897. Transaction Banking Division.080 11.45 123.35 239.91 3.283.260.38% in 2014 to grew by 13. from Rp9.255. 33.154.881 0.70 Total Interest Expenses Income 15.407 61.292 0. Based on the other the lowered BI Rate that changed NET INTEREST INCOME operating income structure.28 with 59.

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299.355.55 467.087 11.28% 0.18 2.94 121.07 .948.140 100 12.28 Recovery of Written-Off Assets 1.575 1.973 59.72 237.70% Description: Fee Based Income 201 Recovery of Written-Off Assets 5 Gains of Sales of Marketable Securities Gains from Foreign Exchange Difference Others 18. ANNUAL REPORT 2015 The Biggest National Payment Bank .55% 1.676 22. 6.471 17.409.Net Gains of Sales of Marketable Securities and Government Recapitalization Bonds - Net 78.041 100 65.76 Exchange Difference .87% Other Operating Income Composition (%) .945 18.59 2.485 0.252 0.30 7.459 100 9.76 760.341.39% 3.59% Gains from Foreign Exchange Difference Others Other Operating Income Composition (%) 17.31% 0.157.725 8.158 23.31 86.304 2.072.167 3.348.Net Others 982. - Government Recapitalization Bonds .18% 2.100. .24 6.438 58.199 MANAGEMENT DISCUSSION AND ANALYSIS Financial Review Other Operating Income In Million Rp 2013 2014 2015 Component Million Rp % Million Rp % Million Rp % Fee Based Income 4.400 0.30% 8.87 Unrealized Gains of Sales of Marketable Securities and .524 5.460 65.34 2.39 Total Other Operating Income 8.70 Gains from Foreign 477.76% 59.862.07% Description : Fee Based Income Recovery of Written-Off Assets Unrealized Gains of Sales of Marketable Securities 2014 Gains of Sales of Marketable Securities 22.

PT Bank RakyaT IndonesIa (PeRseRo) TBk. .

which and make it one of the Bank’s fee-based income (FBI).0% 57.62 a focus on e-banking services in 7. from 19.8% 53.7 360.624.2 2012 2013 2014 2015 2011 Fee Based Income (Rp trillion) 3.921. To drive FBI. Currently. BRI will As of 31 December 2015.0% Description : 309.1 192.6 2.21 trillion Transaction Banking services in in 2014 amounting to Rp6.208.14% YoY growth of administration fees.9% 2.9% 22.1% 5. This decrease was offset by national payment bank.8 307. BRI derived from deposit also develop its service business booked 21.5 % 734. FBI’s contribution to total income is less than 10% as BRI has raised substantial income 7.6% 5.8 Other Operating Income Composition (Rp billion/%) . Fee 5. The accounted for 53.1 Deposit Adm.1% Others 1. and develop trillion from 7.9 3.0% 2. 9 3.458.7 1.63% amounting to Rp7.8 128.07 in 2014. (wholesale).0 1. among others to retain the contribution grew by contribution amounting to Rp1.200 ANNUAL REPORT 2015 The Biggest National Payment Bank KEY HIGHLIGHTS CORPORATE GOVERNANCE MANAGEMENT REPORT CORPORATE SOCIAL REPORTS COMPANY RESPONSIBILITY FSA REFERENCE- PROFILE MANAGEMENT DISCUSSION AND ARA CRITERIA 2015 MANAGEMENT ANALYSIS DISCUSSION AND ANALYSIS BANK INDONESIA REGULATIONS OPERATIONAL SUPPORT REVIEW REFERENCE CONSOLIDATED FINANCIAL Financial Review FEE-BASED INCOME FBI’s largest contribution in 2015 from interest.9% or the Retail segment. To this FBI contribution to total or Rp3.3% main sources of income.1% 4. 22.0% in vision of becoming the biggest also been continuously increasing 2014.3% e.7 123.1 4.9 % 8.8 388. the in the past five years.6 120.35 trillion in 2015.9 3.. Banking Related Fee Loan 2014 2015 Adm.9% 10.1% increase in e-banking strategy is. Fee Trade Finance Credit Card Payment Service 19. in 2015.37% contribution Rp1. and aligned with the Bank’s income has slight decrease from 57.4 6. the Corporate segment trillion.92 trillion of total FBI – a end.3 539.

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334. This expense item was applicable to all employees – permanent. totaling 130. Other Operating Expenses In Million Rp 2013 2014 2015 Component Million Rp % Million Rp % Million Rp % Employees and Benefits 12.599.27 trillion.60 9.184.422 53.62 2.07 General and 7.65 14.275. At the end of 2015. The expense for new kUR insurance premiums. or up 17.275 100 31.86 1. 10.518. BRI strengthened its focus on operational efficiency and on operating expense increases. • OJk premium rose from 3 bps in 2014 to 4.231.72 trillion in 2014.000 employees.5% YoY from Rp2.696 100 Expenses . This was due to the following factors: • Disbursement of kupedes Rakyat and micro business kUR loans. ANNUAL REPORT 2015 The Biggest National Payment Bank .201 MANAGEMENT DISCUSSION AND ANALYSIS Financial Review RECOVERY OF WRITTEN-OFF ASSETS (RECOVERY INCOME) The domestic economy in 2015 was quite volatile.03 from Changes of Fair Value of Securities and Government Recap Bonds .994 54.15 Guarantee Unrealized Losses 13.704.45 trillion from lending insurance companies that insured micro business loans under kUR and kupedes Rakyat products. disbursed starting mid August 2015. where the Cost of Insurance for Credit Loss was booked as Other Operating Expense.733 7.886 33.Net Others 1.158 53.945 0.5 bps in 2015.208 0. OTHER OPERATING EXPENSES Realizing the limited room for business growth in 2015.030. therefore maintaining a recovery rate at 30-33%. BRI succeeded in increasing recovery income by 11.38 10. • Employee expenses with respect to social and health security coverage BPJS started in 2015. However.778 100 26.10 trillion in 2014 to Rp2.296.155 34.56 Total Other Operating 22.715. and outsourced.03 16. BRI booked other operating income of Rp31. Aside from recovery income derived directly from customers.988.957 4.07 1.73 2.07% compared to Rp26. was payable by the loan disbursement bank. .475 4. This income was recognized under Non-Operating Income.041 8.19 Administration Premium on Government 911.380.547 33. contract.380. BRI also generated recovery income of Rp1.06 .34 trillion in 2015.166.657 3.571 9.

PT Bank RakyaT IndonesIa (PeRseRo) TBk. .

03% 53. In 2015.86% Employees & 201 Benefits General & Administration 4 2015 Premium on Government Guarantee Unrealized Losses from Changes of Fair Value of Securities and Government Recap Bonds 34. PROFIT FOR THE YEAR trillion. Consequently. In expenses in 2015 amounted to yield operating profits (profitability).26 2014. BRI regulations. INCOME Taking the comprehensive challenge.90 trillion in 2015. COMPREHENSIVE Pre-Provisioning Operating Profit in 2015 BRI’s tax income grew INCOME BRI’s (EXPENSES) other comprehensive (PPOP) indicates a bank’s ability to by 7.23 trillion in 2014. With this increase in provisioning.19% Others Other Operating Expenses Composition (In %) PRE-PROVISIONING INCOME TAX OTHER OPERATING PROFIT In line with the increase of income. or up 4.41 trillion. This growth Rp24. deficit in the state budget as well as or annual credit cost at around pressure from the global economy..89% from by 1. This was due to As of 31 December 2015. profit for the year in 2015 TOTAL (CREDIT COST) was Rp25.56% 0.87 trillion.89% COMPREHENSIVE BRI realized that loan quality was a from Rp24.07% 9. BRI applied the unrealized losses of securities and booked PPOP of Rp17.72 trillion conditions in 2015 coupled with a in 2014 to Rp8.6% to 1. which NET INCOME comprehensive income in 2015 was reflected in the increase of Non. .03% 4.23 trillion in 2014.202 ANNUAL REPORT 2015 The Biggest National Payment Bank KEY HIGHLIGHTS CORPORATE GOVERNANCE MANAGEMENT REPORT CORPORATE SOCIAL REPORTS COMPANY RESPONSIBILITY FSA REFERENCE- PROFILE MANAGEMENT DISCUSSION AND ARA CRITERIA 2015 MANAGEMENT ANALYSIS DISCUSSION AND ANALYSIS BANK INDONESIA REGULATIONS OPERATIONAL SUPPORT REVIEW REFERENCE CONSOLIDATED FINANCIAL Financial Review 8. maintain prudence.6 billion.78% in 2014 to 2.10% in 2015. rose Performing Loans (NPL) ratio from Rp25. BRI’s total the subsequent year (2016).73% 53. up 4. requirement of a flat tax tariff at 20%.60% from the 2014 position of 1. Taking into account the income PROVISIONING tax.08 trillion.15% Description : 3.59% from Rp5.7%. To Rp24.07 trillion.36 trillion in not available for sale totaling Rp1. BRI booked net income of amounted to Rp24. the credit cost the challenging economic rose by 55.41 trillion. BRI opted to of net income showed healthy increase the allowance for credit banking performance considering loss. government recapitalization bonds up 15. BRI was able to maintain the NPL coverage ratio at approximately 150% at the end of 2015. and would remain so in expenses into account.48 trillion.38% 33.69% to Rp7. 1.83% from Rp28. accordance with the applicable Rp538.

.PT Bank RakyaT IndonesIa (PeRseRo) TBk.

83 8.798 25.280 48.429 61.86 Derivative Receivables .89 6.188.841 581.096) (16.792.Net 222.Net 66.800 133.61) (11.32%.917.70 trillion trillion.039.162.469.53 In 2015.570. loan composition in small businesses also maximize Gross Earning Assets rose from the potential business related to 70.75 (19.1% to 74.36 Investments .Net 3.419 4.8%.40 trillion.4 trillion in loans outstanding was relatively similar to the 2014 derived from the re-allocation of portfolio. In 2015.717.163.34 (20. (15.495 51.756 58.891 13.20 28.184.203 MANAGEMENT DISCUSSION AND ANALYSIS Financial Review FINANCIAL POSITION ASSETS Assets Composition In Million Rp Growth (%) Summary of Balance Sheet 2013 2014 2015 2013-2014 2014-2015 Cash 19.78 Allowance for Impairment Losses -/.09%.344.45 (0.171.34) Other Banks .470 8.167 28.05 Current Account with Bank Indonesia 40.771.70 Total Assets 626.58 Current Account and Placements with 45.Net Marketable Securities . 8.596 3.130 12.573 269. ASSETS COMPOSITION contributed by the Micro segment Assets growth was mainly driven amounted to Rp24.09 trillion.981 536 .182.615.83) 17.612 5.815.774 (22.426.514.544 13.926 801.511.5% increase in cost funds.525.795) (17.33) Loans 448. the growth of of 19.54 53.700.91 13.039. ANNUAL REPORT 2015 The Biggest National Payment Bank .688 5.882 58.418. The combined proportion non-loan Earning Assets.24) (100) Acceptance Receivables .Net 3. Loan growth was primarily maintained at 72.70 20.Net 4.972. the MSME outstanding of Rp70.98 Fixed Assets . BRI’s assets grew by 9.718. BRI’s loan portfolio Rp70.003 72.999.3%.742.684 6.958 (4.778 22.09 9.8 significant year-on-year growth trillion of cost funds.190 878.05 outstanding from Rp510.094.635 17.983.851 251.37 trillion and by the increase in loans Corporate segment at Rp25.872 1. This was in line with BRI’s in 2014 to Rp581.303.555 102. BRI booked loans indicating stable loan productivity Rp878.46 Other Assets 7.688.98 trillion in 2014 to LOANS and SOE segments stood at 27.7%. in line with in 2015.040 132. To enhance assets productivity. (89. loan portfolio to total loans was also achieving year-on-year growth of 13.435) 4.471 77.037 8.52) Government Recapitalization Bonds 4.43 trillion in 2015.856 510.87) Deferred Tax 2.846 25.514. domestic infrastructure projects.96 35.5% from Rp801.679. While Corporate segment booked other than supported by Rp57.984. Meanwhile. of loans outstanding from Corporate .696.004. With commitment to develop micro and this growth.312 28.506 1.

PT Bank RakyaT IndonesIa (PeRseRo) TBk. .

.86 Corporate 110.480.854.07 19.958.084 50.518 156.179 15.868 506.336 190.097.742 164.577.398 181.859.420 58.007 440.386 131.00 15.143 547.275 11.288 564.88 9.570 7.214.214. .380.408. .594.266.587 19.037 (2.049.288 564.390 15.886. .195.828.344.171.118.01 Allowance for Impairment Losses (15.590 219.03 Total Loans less Allowance for 419.841 581.886.318.098.316.54 Foreign Currency 10.312.495.01 Allowance for Impairment Losses (15.144.428.162.09 Total Loans 434.355 14.772 9.054.498 (7.171.071 9.183) 8.162.95 6.116 19.168.386 131. .143 547.998.357 46.211.483 88.107 13.174.636.929 85.66) Total Loans 434.161 66.16 11.629.259.20 6.131.930 178.621.020 212.39) Corporate 110.16 Program 10.668 105.420.266.99 14.828.546.91 Working Capital 146.742 164.551 7.25 Consumer 74.553 16.338 199.859 9.480.544 13.266.614.69) Syndicated 20.466 495.316.86 Rupiah 142.785.466 495.01 and Sharia Receivables Rupiah 386.91 13.50 Receivables Total Loans 448.587 19.457 45.09 Rupiah 72.288 564.054.459 54.590 219.428.179 14.002 9.21 Impairment Losess LOANS BY TYPE Growth 2013 2014 2015 (%) 2014- 2015 kupedes + Program 132.614 89.889 19.405.610 20.431 14.850 50.094.338 199.006 11.266.064.054.977 18.180 188.097.854.145) (17.31 14.742 164.21 Impairment Losess PT Bank RakyaT IndonesIa (PeRseRo) TBk.730 479.03 Total Loans less Allowance for 419.044 (2.615 82.286.466 495.649.69 Total Non-Financing Loans 434.88) key Employees 54.538 14.78 LOANS BY SEGMENT Growth 2013 2014 2015 (%) 2014- 2015 Retail 181.183) 8.568.719.384.211.318.03 Foreign Currency 37.497 (10.028.195.856 510.097.058.759.90 11. - Retail 181.803 152.785.266.736) (15.730 479.204 ANNUAL REPORT 2015 The Biggest National Payment Bank KEY HIGHLIGHTS CORPORATE GOVERNANCE MANAGEMENT REPORT CORPORATE SOCIAL REPORTS COMPANY RESPONSIBILITY FSA REFERENCE- PROFILE MANAGEMENT DISCUSSION AND ARA CRITERIA 2015 MANAGEMENT ANALYSIS DISCUSSION AND ANALYSIS BANK INDONESIA REGULATIONS OPERATIONAL SUPPORT REVIEW REFERENCE CONSOLIDATED FINANCIAL Financial Review Loans by Currency In Million Rp Growth (%) Segment 2013 2014 2015 2013-2014 2014-2015 Micro + Program 142.144.03 Sharia Financing and 14.905.308.316.136 166.179 15.99 Rupiah 171.518 156.359.696.99 Micro + Program 142.428.480.790 32.538 14.538 13.145) (17.267.14 Investment 49.906.01 Foreign Currency 48.736) (15.13 23.86 Foreign Currency .180 188.31 14.599.617 7.699.86) (21.239 16.772 9.355 14.180 188.

205 MANAGEMENT DISCUSSION AND ANALYSIS Financial Review ALLOWANCE FOR The increase in write-off loans Securities IMPAIRMENT LOSSES allowed the Bank to maintain The outstanding securities As discussed under Provisioning.7 trillion in 2014 to allowance for impairment losses of rose from Rp2. Cash and Current Account Bonds with BI As of the end of 2015.03% to Rp17. BRI must meet the primary reserves of 7. 96.30 trillion. which can be According to Bank Indonesia are as follows: derived by economic headwind.90%. NPL of Micro segment at 1. among others.13% portfolio was relatively stable with BRI maintained NPL coverage and Commercial Retail at 2.58% securities brokers/dealers. ANNUAL REPORT 2015 The Biggest National Payment Bank . current account with market price or quoted price by Loan write-off is exercised as a Bank Indonesia rose by 20. the increase in is available under the Income portfolio. Commercial Retail segments due to the Current Account and implementation of the acceleration Placement with Bank in restructuring and non.28 trillion or 8. coupled with amounted to Rp3.72 trillion in 2015. last action after loan from Rp51. . of third party funding initiatives. BRI’s The methodology used to calculate In line with the Bank’s government recapitalization bonds the allowance for impairment losses performance growth. the recovery income Rp133.10 trillion in 2014 to Rp133.34 trillion in 2015. loans disbursement and NPL.5% YoY. position of Rp4.0 trillion in 2015. therefore the cost of Moreover. The the cash position at the end of decrease was due to matured LOAN WRITE-OFF AND 2015 increased by 28. which Statements sub-section.43% of primary reserves in in 2014. or is discussed further in the Risk a number decreased by 11.6% of the write-off foreign currency.57 trillion at the end of 2015.07% from primary reserves in Rupiah and Rp5.18 trillion in 2014 to restructuring and other Rp61. and other banks declined by 19. or increased majority of securities held by BRI Rp1.33% from 2014 Management chapter. or increased 39.offs amounted to Rp7. in accordance loans came from the Micro and with Bank Indonesia requirement.16 11.05% from bonds of Rp500 billion and the RECOVERY (RECOVERY Rp22. Indonesia and Other Banks performing loans settlement Current account with other banks program that commenced in the and placement with Bank Indonesia third quarter of 2015.82 trillion. In details. was impacted by Indonesia’s Government Recapitalization volatile economic conditions.31% of trillion.52% from ratio at 150%.77 trillion. BRI’s In 2015. The decrease was part of the Bank’s strategy to boost assets productivity by re-allocating portfolios to higher assets yields. BRI exercised loan current account with Bank write.82 Indonesia represents 9. with trillion compared to 2014 position. The financial assets increased by Rp2. keeping the recovery were government bonds.62 trillion of loans write-off 8. A detailed Hold to Maturity (HTM) bonds The increase in allowance was due discussion on recovery income accounted for 67% of the total to.5%.34% from the 2014 position to Rp58. fair valuation based on the INCOME) In addition.47 trillion to Rp28. a slight decrease of 0. regulations. the government settlement options fail to recapitalization bonds held by BRI recover a loan. rate at above 30%.

.PT Bank RakyaT IndonesIa (PeRseRo) TBk.

42 4. BRI received payments which will be settled with the • PT kustodian Sentral of cash dividends from PT Directorate General of Taxation. given a • PT Bringin Gigantara allowance for impairment losses. all investments were in 2015.63 Rp20 million slated for launch between 24 May billion in 2014 to Rp262. • PT Sukapraja Golf: Rp25 tower alignment phase.303.13 billion. dynamic test.05% increase in prepaid • PT kelola Jasa Artha: would be recovered therefore the taxes from Rp724 billion in 2014 Rp2.70% from Rp8. million In 2015.89 billion assurance that all investments 255. BRI continues to expand million its network. difference of calculation in (related party): Rp1. respectively. BRIsat is BTMU-BRI Finance from Rp249.98% from the 2014 million a series of tests including a vibration position of Rp251.240 allowance for impairment losses.206 ANNUAL REPORT 2015 The Biggest National Payment Bank KEY HIGHLIGHTS CORPORATE GOVERNANCE MANAGEMENT REPORT CORPORATE SOCIAL REPORTS COMPANY RESPONSIBILITY FSA REFERENCE- PROFILE MANAGEMENT DISCUSSION AND ARA CRITERIA 2015 MANAGEMENT ANALYSIS DISCUSSION AND ANALYSIS BANK INDONESIA REGULATIONS OPERATIONAL SUPPORT REVIEW REFERENCE CONSOLIDATED FINANCIAL Financial Review Government Recapitalization Bonds by Interest Rate In Million Rp Type of Interest Rate 2013 2014 2015 Variable Rate 4.89 billion 2016 to 24 June 2016.60 3.69 trillion in Nusantara: Rp66 2015.57 trillion. million • PT Merapi Gelanggang At the end of 2015. followed by increased by 6.58 • BPR Toelangan Dasa trillion in 2014 to Rp14. Efek Indonesia: Rp900 Sarana Bersama Pembiayaan million Indonesia • PT Sarana Bersama and PT Pemeringkat Efek Indonesia Pembiayaan Indonesia: amounted to Rp391 million and Rp3 Rp536 million million. as the result of Measurement of investment accumulated net income. Compact increase was derived from an Agroloka: Rp23 million Antenna Test Range (CATR).815. and increase in carrying value of PT • PT Aplikanusa Lintasarta: final performance test.80% from Rp11. rose by 53..79 December 2015 were: As of 31 December 2015 and trillion in 2014 to Rp13. while in 2014 • PT Jakarta kyoei Medical the Bank received Rp21 million in Center: Rp220 million dividends from PT Pemeringkat Efek • PT Pemeringkat Efek Indonesia. The satellite BRI’s investments in 2015 Agroloka: Rp35 million project (BRIsat) has reached the amounted to Rp269. The • BPR Bungamayang test.511. impairment was conducted by Other assets individual valuation with the Total net other assets in 2015 Detail of BRI’s investments as of 31 existence of objective evidence. in 2015. the satellite Wisata: Rp50 million development accounted for approximately 74% . Indonesia: Rp210 million • PT Yayasan Asuransi Fixed Assets Indonesia: Rp200 million To realize the vision of becoming • BPR Toelongredjo Dasa the biggest payment bank in Nusantara: Rp77 Indonesia. The growth of other (formerly PT UFJ BRI Finance): categorized as “Performing”.51 trillion • PT BTMU-BRI Finance 2014. With assets was mainly due to a Rp262.560 million Bank did not set aside an to Rp2.57 billion.96 Investments • BPR Cinta Manis of total contract value. which drove the • BPR Tjoekir Dasa increase in BRI’s fixed assets in Nusantara: Rp77 million 2015 by 26.

.PT Bank RakyaT IndonesIa (PeRseRo) TBk.

67 trillion or 7.02 trillion.46 Securities Sold with Repurchase Agreements . BRI’s liabilities reached a total of Rp765.958 .201 33.947.772 5.335 15.480. . Liabilities Composition As the Bank with the largest and widest network in Indonesia.043. which respectively increased by Rp24.470.82% in 2015.55 Total Liabilities 546.088 13.22) Other Liabilities 22.180 114.379 23.207 MANAGEMENT DISCUSSION AND ANALYSIS Financial Review LIABILITIES Liabilities Component In Million Rp Growth (%) Summary of Balance Sheet 2013 2014 2015 2013-2014 2014-2015 Third Party Funds 504.01 0.220 8.46% in 2014 to 57.951 90.097.377.41 7.862 35.49 29.51 27. 15.084.065.995.32 Total Liabilities 100 100 100 Third Party Funds In 2015.157.527 7.321.582 56.052.26 Time Deposits 211.00 0.394. BRI generated Third Party Funds of Rp669 trillion.46% to 57.67 Deposits from Other Banks 0.38 0.19 1.133 28.085. and contributed to the increase of the Low-Cost Fund composition in the portfolio from 52. Third Party Funds primarily occupied BRI’s liabilities structure. (26. with year-on-year growth of 8.913 24.50% from the 2014 position of Rp622.992 10.468 (96.327 704.27 88.736.86 8.392 11. 2. BRI also noted a satisfying performance where the growth of low-cost funds at 18.261 25. As described in the foregoing assets growth’s discussion.874.05 (27.367.04 42.08 trillion in 2015.358 175.00 Savings 212.64) Liabilities Due Immediately 5.281.382 622. Growth of low-cost funds was mainly derived from Demand Deposits and Savings.701 11.806 295.36 87.55 4.64 Subordinated Loans 0.50 Demand Deposits 79.60 (4.00 Securities Sold with Repurchases .526. This was in line with the Bank’s strategy to lower interest expenses in order to maintain profitability by decreasing the fund expense ratio from 52.299.165.93 1.66 In 2015.99 15.846 668.23 1.49 Borrowings 1.562 39.32 trillion.38 28. ANNUAL REPORT 2015 The Biggest National Payment Bank .82%.336.356 765.68 1.05) Deposits from other Banks 3.655.299 39. liabilities rose mainly due to an increase in Deposits of Third Party Funds at Rp46.39) Agreements Borrowings 9.31 trillion and Rp36.986.66% compared to the 2014 position.5% outperformed the growth of third party funds. as shown by below table: Liabilities Structure (%) 2013 2014 2015 Third Party Funds 92.024 77.625 236.67 trillion.66 3.01 Other Liabilities 4.073 134.691.456.30 trillion or increased by Rp61.00 Subordinates Loans 2.994 272.08 3.306.42 Liabilities Due Immediately 0.996.30) (27.65 4.672 282.138.278. or increased by Rp46.

PT Bank RakyaT IndonesIa (PeRseRo) TBk. .

.208 ANNUAL REPORT 2015
The Biggest National Payment Bank

KEY HIGHLIGHTS CORPORATE GOVERNANCE
MANAGEMENT REPORT CORPORATE SOCIAL
REPORTS COMPANY RESPONSIBILITY FSA REFERENCE-
PROFILE
MANAGEMENT DISCUSSION AND ARA CRITERIA 2015
MANAGEMENT
ANALYSIS DISCUSSION AND ANALYSIS BANK INDONESIA REGULATIONS
OPERATIONAL SUPPORT REVIEW REFERENCE CONSOLIDATED FINANCIAL

Financial Review

THIRD PARTY FUNDS
Customer Deposits 2013 2014 2015 Change Growth (%)
Demand Deposits 78,666,064 89,430,267 113,429,343 23,999,076 26.84
Demand Deposits Wadiah 670,887 621,913 937,745 315,832 50.78
Savings 210,234,683 232,722,519 268,058,865 35,336,346 15.18
Wadiah Savings 2,480,554 3,298,659 3,715,929 417,270 12.65
Mudharabah Savings 281,388 373,816 696,198 322,382 86.24
Time Deposits 201,585,766 283,457,544 267,884,404 (15,573,140) (5.49)
Mudharabah Time Deposits 10,362,040 12,417,128 14,272,895 1,855,767 14.95
Total Customer Deposits 504,281,382 622,321,846 668,995,379 46,673,533 7.50
CASA 57,97% 52,46% 57,82%
Time Deposits Composition 42,03% 47,54% 42,18%

Time deposits declined by 4.6%
At the end of 2015, BRI experienced 1. USD 550 million club deal
YoY compared to the 2014
decreasing 27.5% of Liabilities loan facility
position, from Rp295.87 trillion to
Due Immediately from Rp7.04 2. Borrowings from China
Rp282.16 trillion. The decrease
trillion in 2014 to Rp5.14 trillion. Development Bank Corporation
in time deposits in Third Party
The decrease of Liabilities due of USD 1 billion for financing
Funds
immediately was mainly due to long term infrastructure
structure was also part of the
the termination of tuition projects and industry also
Bank’s strategy to improve interest
channeling deposits through BRI for cross border transactions
expense efficiency to maintain net
in 2015 from the last position of project between Indonesia and
interest margin (NIM) profitability.
Rp1.83 trillion in 2014. China.
3. USD 100 million
BRI was confident that increasing Deposits From Other Banks borrowings from the Bank
deposits through time deposits and Other Institutions of Tokyo- Mitsubishi UFJ
would be relatively that happened As of the end of 2015, deposits
in amidst tight liquidity in the from other banks and other Subordinated Loans
banking market since 2014. This institutions amounted to Rp11.6 The total amount of
condition was possible because trillion, increased from Rp8.66 subordinated loans in 2015
BRI has the support of over trillion in decreased by 27.22% from
10,000 outlet throughout the previous year. Deposits from Rp77.58 billion in 2014 to
Indonesia. other banks and other institutions Rp56.47 billion. This amount
comprise demand deposits, included a two-step
Liabilities Due Immediately savings, time deposits, interbank loan obtained by BRI from the
Liabilities Due Immediately call money, and deposits on call. Government, which was funded
represent BRI’s liabilities to other This account is used for interbank by the Asian Development Bank
parties that due immediately as transactions for operational and (ADB), International Bank for
set out in the terms and conditions liquidity management purposes. Reconstruction and Development
of agreed contracts. Transactions
(IBRD), International Fund
recognized under this account Borrowings for Agricultural Development
among others are tuition channeling As of the end of 2015, the balance (IFAD), United States Agency for
deposits, advance payment of borrowings amounted to International Development (USAID),
deposits, ATMs and credit card Rp35.48 trillion. This amount and Islamic Development Bank
deposits, tax payment deposits, increased by 42.00% from the (IDB).
insurance deposits, deposits for 2014 position of Rp24.99 trillion.
managed funds, deposits for The increase in borrowings
clearing, and remittance deposits, among others was due to:
and so forth.

PT Bank RakyaT IndonesIa (PeRseRo) TBk.

ANNUAL REPORT 2015
The Biggest National Payment Bank
.209

MANAGEMENT DISCUSSION AND ANALYSIS

Financial Review

Other Liabilities
Other liabilities consist of derivative liabilities, acceptance liabilities, tax payables, marketable securities issued,
estimated losses on commitments and contingencies, and others. In 2015, BRI issued Shelf Bonds I Tranche 1
of Rp2.99 trillion, less unamortized issuance costs of Rp5,321 as at 31 December 2015.

In 2015, other liabilities increased by 60.80% from Rp15.56 trillion in 2015 to Rp25.02 trillion.

EQUITY
Equity In Million Rp
Growth (%)
Component 2013 2014 2015
2013-2014 2014-2015
Authorized Capital 6,167,291 6,167,291 6,167,291 - -
Additional Paid-in Capital- Net 2,773,858 2,773,858 2,773,858 - -
Differences Arising from Translation of 82,083 56,468 49,069 (31.21) (13)
Foreign Currency Financial Statements
Unrealized Gains (Loss) on (727,644) (198,888) (1,145,471) (72.67) 475.94
Available for Sale Marketable
Securities and
Government of
Revaluation Recapitalization
Defined BenefitBonds - Net
Program 375,345 124,147 541,468 (66.92) 336.15
- Net
Treasury Stock - - (2,286,375) - 100
Total Retained Earnings 70,740,908 88,607,774 106,733,021 25.26 20.46
Total Equity Attributable to Equity 79,411,841 97,530,650 112,832,861 22.82 15.69
Holders of Parent Entity
Non-Controlling Interest 162,465 175,184 294,318 7.83 68.01
Total Equity 79,574,306 97,705,834 113,127,179 22.79 15.78

At the end of 2015, BRI’s liabilities and equity to support its asset stood at 87.12% and 12.88%, respectively. Total
assets grew by 9.53%, liabilities rose by 8.66%, and equity was up 15.78%. These figures indicated that equity was
still BRI’s main source of funding for business expansion.

Equity in 2015 rose by Rp15.42 trillion or 15.8% from Rp97.71 trillion in 2014 to Rp113.13 trillion. The increase was
mainly driven by an increase in retained earnings of Rp18.12 trillion or 20.5% to Rp106.73 trillion, compared to the
2014 position, pursuant to the resolution of the Annual General Meeting of Shareholders (AGMS) 2015 regarding the
dividend payout ratio of 30%.

In addition, the Equity account also consist of Treasury Stock resulting from a Share Buyback program that was
exercised during October 2015 to 31 December 2015. This program is discussed further under the Stock Summary.
The Bank plans to use Treasury Stock for Management and Employee Stock Allocation (MESA) with the approval
from the AGMS 2016.

PT Bank RakyaT IndonesIa (PeRseRo) TBk. .

399.144. In accordance to Rp38. The with Bank generated cash inflows of its strategy to enhance assets Rp82.704. which was consistent with the from time deposits at Rp15.38 trillion.97 trillion in 2015.614) (56. This was in line with BRI’s of Rp21.70 trillion. BRI also booked Statements. this was offset by cash profitability. . purchase fixed assets amounted to Rp3.4% or by Rp9. The for financing activities at Rp9.210 ANNUAL REPORT 2015 The Biggest National Payment Bank KEY HIGHLIGHTS CORPORATE GOVERNANCE MANAGEMENT REPORT CORPORATE SOCIAL REPORTS COMPANY RESPONSIBILITY FSA REFERENCE- PROFILE MANAGEMENT DISCUSSION AND ARA CRITERIA 2015 MANAGEMENT ANALYSIS DISCUSSION AND ANALYSIS BANK INDONESIA REGULATIONS OPERATIONAL SUPPORT REVIEW REFERENCE CONSOLIDATED FINANCIAL Financial Review CASH FLOWS STATEMENTS Cash Flows In Million Rp Cash Flow Types 2013 2014 2015 Net cash flow from (used for) operating activities 4.636 45.081) 9. Aside from interest.58 beginning of 2015 at Rp172.23 trillion in 2014 trillion in 2014.544. increases in securities and investment.57 and to repay subordinated loans Bank’s strategy in increasing assets trillion. BRI booked cash flows position at the end of 2014 or the Rp45.39 trillion.086 75.73 trillion.82 trillion in 2014 to In 2015.804.822. proceeds of marketable securities OPERATING ACTIVITIES issued at Rp11.34 The net cash position from CASH FLOWS FROM trillion to Rp163.35 trillion as discussed in the addition.971) (24. and government recapitalization sharia income. to buyback Rp2.65 went from Rp31.27 trillion of decrease was derived from a declining in influenced cash flows for dividends. Changes of cash flow from CASH FLOWS USED FOR operating activities indicated BRI INVESTING ACTIVITIES has a solid performance which Cash flows used for investing reflected in increasing cash flow activities in 2015 amounted to from operating activities (before Rp56. banks. low-cost funds ratio to maintain However. productivity to maintain the net interest strategy that aimed to increase the margin (NIM).44 trillion.29 current account and placement with other operating activities was funding trillion of share (treasury stock). or increased assets and operating liabilities) by 130.908 Net cash flow from (used for) investing activities (9. compared to the operating activities decreased FINANCING ACTIVITIES from Rp75. The operating activities that largely trillion to pay Rp7.54 trillion in 2015.649.579.504.324 The total cash and cash equivalents in 2015 decreased by 5. as discussed under inflows from borrowings and from CASH FLOWS FROM the Interest Expenses sub-section. BRI also gained bonds available for sale and held cash income from recovery at to maturity by Rp53.11 billion.649 1.59 trillion in Income productivity.0% from Rp24. BRI also used cash to allowance for impairment losses.28 trillion .530) Net cash flow from (used for) financing activities (2. In Rp2.

.PT Bank RakyaT IndonesIa (PeRseRo) TBk.

51 8. ANNUAL REPORT 2015 The Biggest National Payment Bank .00 8.00 ii.73 4. which is mostly in earning assets also from BRI’s loan to deposit ratio that was maintained at an optimum level of 86.55 8. Primary Statutory Reserves .36 0.00 0.37 to Earning Assets NPL Gross 1.88%. which are: • Ability to meet the Bank’s obligations • Productivity Ratio • Efficiency Ratio SOLVENCY In the banking industry.31 b.86 2.in Foreign Currency 8.in Rupiah 8. which consist of the Liquidity Ratio.89 Net Interest Margin (NIM) 8.90 2.26 1.96 Capital Efficiency Ratio (CER) 42. Primary Statutory Reserves . a bank’s ability to meet its short-term and long-term obligations is indicated by solvency and collectability ratios.00 0.58 65.33 to Total Earning Assets and Non-Earning Assets Non-Performing Earning Assets to Total Earning Assets 1.55 1.28 1.33 Financial ratio in general is divided into 3 sub-sections.13 43.07 9. .40 2.68 86.09 1. Percentage of lending in access of the Legal Lending Limit i.02 8.13 Operating Expense to Operating Income (BOPO) 60.14 43.88 Compliance 1. a. Related Parties 0. Third Parties 0.31 20.00 0.59 Non-Performing Earning Assets and Non-Earning Assets 1. Related Parties 0. Collectibility Ratio.00 0.19 Return on Equity (ROE) 34.42 67.211 MANAGEMENT DISCUSSION AND ANALYSIS Financial Review FINANCIAL RATIO Financial Ratio* In (%) Description 2013 2014 2015 Capital Adequacy Ratio 16.06 1.00 8.00 0. This is shown from the Bank’s proportion of loans.31 0. This was aligned with BRI’s strategy to increase productivity considering the LDR level was still within the range of its internal target between 85% to 92%.11 31.69 2. Net Open Position (NOP) 3.00 0.81 Loan to Deposit Ratio (LDR) 88. Percentage violation of Legal Lending Limit i.00 2. Statutory Reserves a.00 0. Liquidity Ratio Loan to Deposit Ratio (LDR) BRI is one of the banks which business portfolio is dominated by its intermediary function in the real sector.02 NPL Net 0.54 81.52 Return on Assets (ROA) 5.00 ii.43 3. and Capital Adequacy Ratio.00 0.99 18.57 Allowance For Impairment Losses of Financial Assets 2. Third Parties 0.15 3.19 29.03 4.00 b.

.PT Bank RakyaT IndonesIa (PeRseRo) TBk.

covering more branch offices.299. in which the funding represents customer deposits and marketable securities issued.079.856 510. the NPL coverage ratio stood at 151.045. BRI’s NPL rose by 34.094.10% In terms of figures. BRI maintained a modest level of NPL in 2015 at 2. The NPL ratio achievement was also a result of the management’s efforts to maintain loan quality through The Lower The Better initiative that was started in the third quarter of 2015. which indicated that every Rupiah NPL was reserved at Rp1. This was due to the securities issued by BRI held by non-bank third parties and available for sale which included in LFR calculation were: • Global Bond in US Dollars at Rp6. risk management is exercised according to the Bank’s procedures and continuously monitored.78% to 2. To this end. BRI shall disclose its loan to funding ratio (LFR).835 9.696. NPL CHANGES In Million Rp 2013 2014 2015 Total Loans 448. . This program was implemented by deploying 100 special Account Officers (AOs) to 100 branch offices with the highest NPL throughout Indonesia. .344.617.269 568.50.03/2015.184. As discussed earlier. therefore the NPL was still at an acceptable level.85 trillion • Shelf Bonds Registration Tranche 1 of Rp3 trillion Non-Performing Loans Ratio and Asset Quality Management Non-Performing Loans Ratio/NPL BRI strives to maintain loan quality at a manageable level. However. Aside from field monitoring and evaluation.10%.57%.) The program was proven successful and the management plans to continue in 2016.10% in 2015.544 Total Performing Loans 441.572 12. or rose by 320 bps.78% 2.2% compared to the 2014 position.021 510. As a result.841 581. held by non-bank third parties and available for sale. or slightly below the LDR.910.136 NPL (Gross) 1.15%.63% 1. the NPL ratio was increased 1. the team gave recommendation to minimize credit risk. the NPL Coverage Ratio stood at a strong level at 151. etc.212 ANNUAL REPORT 2015 The Biggest National Payment Bank KEY HIGHLIGHTS CORPORATE GOVERNANCE MANAGEMENT REPORT CORPORATE SOCIAL REPORTS COMPANY RESPONSIBILITY FSA REFERENCE- PROFILE MANAGEMENT DISCUSSION AND ARA CRITERIA 2015 MANAGEMENT ANALYSIS DISCUSSION AND ANALYSIS BANK INDONESIA REGULATIONS OPERATIONAL SUPPORT REVIEW REFERENCE CONSOLIDATED FINANCIAL Financial Review Loan to Funding Ratio (LFR) Pursuant to OJk Regulation No 42/POJk. among others by: • Accelerating loan restructuring • Accelerating loan settlement (collateral auctions. BRI’s LFR in 2015 stood at 86.15% in 2015.408 Total Non Performing Loans 7. NPL Coverage Ratio This ratio describes a bank’s ability to absorb losses arising from non-performing loans.

.PT Bank RakyaT IndonesIa (PeRseRo) TBk.

11 trillion to Rp89. RWA minimum CAR as of 30 December for Credit Risk calculation 2015 was set at 9% to less than Net Interest Margin(NIM) was synchronized with 10%. requirements is at this decrease was generated from • Market risk calculated using least 20% significant increase in allowance for Standardized Approach • Risk weight for MSME credit risk in 2015.11/3/DPNP dated 27 January 2009.73%. slightly decreased from 8. The CAR in 2015 also indicated BRI’s average increase of non-loan regulation stipulated the ability to absorb risks. The main driver of 18 February 2011. The increase of portfolio. In 2015. mortgage (kPR) or several guidelines and standards. growth of loan was Capital Adequacy Ratio (CAR) Rp68. However. apartment (kPA) or Return on Asset (ROA) among others: mortgage-backed loan is at At the end of 2015.59%. ROE decrease was also due to high Bank Indonesia Regulation and operational risk stood at growth of BRI’s Core Capital. calculation changes of RWA BRI’s NIM still reflected the Bank’s for credit risk: The calculation of CAR and Risk strong competitiveness in the • Risk weight of residential Weighted Assets (RWA) referred to Indonesian banking industry. Aside Pursuant to the references. the • CAR calculation referred to RWA for credit risk. BRI’s using a Basic Indicator 50%.99 trillion. earning assets in 2015.13/6/DPNP dated Mortgage with certain position of 4. while CAR as Based on BRI’s risk profile at 31 of 31 December 2014 referred average RWA for Credit Risk in 2015 December 2015 and 30 June to Bank Indonesia Regulation was at 84.03/2015 concerning With this CAR level. pursuant to BI Circular loan secured by local No.13%.89%. guarantee institutional or BRI is one of the banks with the • Operational risk calculated loan insurance is at least highest ROE in the industry. compared to 31.12%.31% in 2014.51% in Regulation No.07 trillion. 11/ increased from 18. 2015 that stood at level 2 risk No. thus the 15/12/PBI/2013. the Bank’s mandatory Profi Ratio* • As of 24 August 2015. December derived from . BRI • Credit Risk calculated using least 35% booked return on assets (ROA) Standardized Approach Basel • Risk weight for at 4. provided that all ROE stood at 29. market risk. BRI from flat net income growth.71% compared to 2014 which mainly derived from retained Banks.19%. The decrease in POJk.14/21/DPNP dated 18 July state-owned enterprises Return on Equity (ROE) 2012. 2014 to 8. or increased by Rp82.19% in 2014. driven by significant for Commercial Banks. the total ratio of BRI Net Interest Margin in 2015 Financial Services Authority BRI’s capital stood at 20. which Approach pursuant to BI requirements are met represented a slight decrease Circular No. pursuant to BI government-program from the 2014 Circular No. 14/18/PBI/2012. BRI had met NIM was among others due to the Prudential Condition in order Bank Indonesia’s capital adequacy declined productivity of non-loan National Economic Stimulus ratio requirement. Requirement for Commercial 14.03 trillion in 2015.23 trillion. The increase was largely earnings.213 MANAGEMENT DISCUSSION AND ANALYSIS Financial Review Capital Adequacy Ratio* 2015 was calculated based on RWA for Credit Risk amounted to Bank Indonesia Regulation No. from on the Capital Adequacy Rp537. CAR as of 31 position. ANNUAL REPORT 2015 The Biggest National Payment Bank . Rp57. (satisfactory). or slightly lower II method.

.PT Bank RakyaT IndonesIa (PeRseRo) TBk.

00% 9.996 3.074.77% 3.07% compared to Operating Income (Gross) that increased by 33. BRI’s CER reached 43.295.580.401.988 3.706.00% 6.858. This reflected the unfavorable economic conditions.224 Total Capital 69.938 CAR Ratio 16.326.588. namely Credit Risk.393 468. Market Risk.040 82. applied effectively in March 2015 (pursuant to BI Regulation No.13% 17.393 Additional Capital Tier 1 (AT 1) N/A )* N/A )* - Supplementary Capital (Tier 2) 3.794 20.206.131 RWA for operational risks 75.96% from 65.44%. 4.31% 20.108.00% * ) not applicable.044 438.507.182.15/12/PBI/2013 on Capital Adequacy Requirement for Commercial Banks) PT Bank RakyaT IndonesIa (PeRseRo) TBk.76% Tier 2 Ratio 0.992. . and Operational Risks. BANk DESCRIPTION 2013 2014 2015 Core Capital (Tier 1) 65.89%.447 2.86% 0.76% Tier 1 Ratio 16.807 83.161.54% 16.598 381.393 Capital Equity Tier 1 (CET 1) N/A *) N/A *) 89.50% Minimum CAR Based on Risk Profile 9. BRI continuously considers the balance between return for shareholders and risk mitigation.763 89. CAPITAL STRUCTURE POLICY BRI manages its capital structure according to prevailing regulations.00% 9.294.59% CET 1 Ratio N/A )* N/A )* 16.585 96.964.572. Operating Expense to Operating Income Ratio (BOPO) BRI’s BOPO ratio in 2015 stood at 67.42% in 2014.036 85.873 Total RWA 408. .81%.214 ANNUAL REPORT 2015 The Biggest National Payment Bank KEY HIGHLIGHTS CORPORATE GOVERNANCE MANAGEMENT REPORT CORPORATE SOCIAL REPORTS COMPANY RESPONSIBILITY FSA REFERENCE- PROFILE MANAGEMENT DISCUSSION AND ARA CRITERIA 2015 MANAGEMENT ANALYSIS DISCUSSION AND ANALYSIS BANK INDONESIA REGULATIONS OPERATIONAL SUPPORT REVIEW REFERENCE CONSOLIDATED FINANCIAL Financial Review Effi Ratio Cost Eficiency Ratio (CER) In 2015.83% Tier 1 Minimum Ratio 5.14%. In managing its capital.00% 6.992.597.557 110. The purpose of capital structure management is to ensure sufficient capital to anticipate major risks associated with banking activities.472. or increased slightly from the 2014 CER of 43.617 RWA for Credit Risk after specific risk 331..934 RWA for market risks 2. which resulted in the increase of allowance for impairment losses by 7.790. This was driven by the increase in Operating Expenses at 17.00% CET 1 Minimum Ratio .076 537.99% 18.065.

ANNUAL REPORT 2015 The Biggest National Payment Bank . 3. Additional Supplementary The source of funding for capital the Bank’s capital consists of: Capital Allocated to expenditure was retained Anticipate Market Risk earnings from operating activities in the .215 MANAGEMENT DISCUSSION AND ANALYSIS Financial Review Pursuant to BI Regulations.

BRI carried out several Rp558. acquired life insurance company capital from retained earnings.63 trillion.71 trillion. and differences of dated 28 November 2012. Bringin Life in 2015. Rp507.41 billion In 2015. subordinated loans. among others by develop subsidiaries’ business. Supplementary capital. As such. INVESTMENT (including retained earnings for specific Capital goods investment was part purposes).64 billion off. BRI also added the capital reclassification of retained EXPENDITURES for BRI Agroniaga amounted to earnings for specific purpose In 2015. (Tier-2) was Rp20. respectively. Supplementary Capital rates volatility was minimum.8% non-IT items amounted to Rp89. BRI’s supplementary capital surged by 472. This (maximum 100% of Core purpose of material commitments figure rose by 11. . The 2015 for the purchase of assets. Rp140. in the form of acquisition or BRI’s supplementary capital capital injection As shown by the table above. Core Capital BRI’s total capital in 2015 and previous year. consists of: earnings project amounted to Rp471. BRI increased by 9. of core capital.06 Capital) were: trillion in 2014.58 trillion and reserves provisioned of net income of paid-up capital. on capital goods.60% from had ample room to strengthen On investments with the purpose to Rp82. of previous financial years. exceed 100% of core capital. The Bank did not require additional paid-up capital. BRI year due to the additional issuing subordinated bonds. which financial instruments available Regulation No. referring to the Bank’s • Office building construction capital. as well as from The Bank’s capital consists 2014 was Rp110. from Core Capital account to number of material commitments.59 trillion as • Capital expenditure for IT and BRI’s core capital in 2015 of December 2015.49% from Rp3. PT Bank RakyaT IndonesIa (PeRseRo) TBk. These commitments were mostly in Meanwhile. impairment on Pursuant to Bank Indonesia of investment expenditure.59 trillion. general provisions procurement amounted to for earning assets write. Totaling The increase in Core Capital Rp1. Supplementary Capital (Tier-2).71 retained for specific purposes. hence the risk of exchange spent a total of Rp3. additional capital allocated CAPITAL GOODS retained earnings to anticipate market risk.11 trillion in the previous its capital.42 trillion in 2. disclosed as donated capital.99 trillion. • IT and e-banking infrastructure and increase of financial development amounted to instruments available for sale. BRI Rupiah.81 billion. reserves Rp85.1.25% to Rp20. the transaction was was far below the increase MATERIAL COMMITMENT completed at the end of December in Total Capital due to the FOR CAPITAL 2015. types: the overseas unit’s financial supplementary capital shall not • Investment in subsidiaries statements. billion allowances for fixed assets • Four and two-wheel vehicle revaluation. 14/18/PBI/2012 in general was grouped into three for sale. or 22.

.216 ANNUAL REPORT 2015
The Biggest National Payment Bank

KEY HIGHLIGHTS CORPORATE GOVERNANCE
MANAGEMENT REPORT CORPORATE SOCIAL
REPORTS COMPANY RESPONSIBILITY FSA REFERENCE-
PROFILE
MANAGEMENT DISCUSSION AND ARA CRITERIA 2015
MANAGEMENT
ANALYSIS DISCUSSION AND ANALYSIS BANK INDONESIA REGULATIONS
OPERATIONAL SUPPORT REVIEW REFERENCE CONSOLIDATED FINANCIAL

Financial Review

In Million Rp
Capital Expenditure 2013 2014 2015
Land and Buildings 402,571 610,772 1,022,807
Furniture and Inventories 116,409 216,512 184,588
Vehicles 694,558 373,015 146,285
Computers and Software 734,447 1,032,524 578,344
Leasing - - -
Satellite Development - 831,895 1,484,677
Total 1,947,985 3,064,718 3,416,701

Of the total capital expenditure, the largest increase derived from the satellite development amounted to
Rp652.78 billion, and land and building at Rp412.04 billion. The increase was also due to the ground station
construction for BRISat project.

2015 TARGET ACHIEVEMENT (BANK ONLY)
2015 Targets & Realization (Trillion Rp)
Description 2014 Realization 2015 Targets 2015 Realization
Assets 778.05 861.62 846.00
Net Income 24.18 25.10 25.20
Loans 490.41 566.61 558.44
Third Party Funds 600.41 647.64 642.77
BOPO 65.42% 68.38% 67.96%
LDR 81.68% 87.49% 86.88%
NPL (Gross) 1.69% 2.04% 2.02%
NPL (Net) 0.36% 0.52% 0.52%
NIM 8.51% 8.12% 8.13%
CAR 18.31% 19.95% 20.59%

In terms of target achievement, BRI was able to meet the overall targets in 2015 as defined in the Bank’s 2015
Business Plan. The total assets target was not met due to the realization of Third Party Funds and Loans were
below the target. compared to targets, but this was in line with BRI’s strategic adjustment, as the Bank responded to
economic and market dynamics in 2015.

Economic slow down in 2015 was shown from low demand for loans. To avoid the increase in credit risk (NPL), BRI
adjusted loan disbursement strategy by implementing selective disbursement. The Bank then focused on achieving
efficient fund costs to maintain profitability. Therefore funding can’t met its growth target but, the CASA ratio
improved from 53.5% to 59.2%, and the profitability still can exceed the target.

2016 TARGETS
BRI’s strategy and targets for 2016 are decided based on the consideration to Indonesia’s economic condition
and the Bank’s capacity. Targets for 2016 are:
• Loan growth at 13% - 15%
• LDR at 85% - 90%
• Fee-Based Income growth at 20% - 22%
• Loan quality or NPL at 2.1 - 2.4%
• Capital Adequacy Ratio above 17.5%

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The Biggest National Payment Bank
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MANAGEMENT DISCUSSION AND ANALYSIS

Financial Review

INFORMATION AND MATERIAL FACTS SUBSEQUENT TO THE DATE OF
REPORTING PERIOD
Issuance of BRI Shelf Bonds I Tranche II of 2016
On 18 January 2016, BRI registered BRI Shelf Bonds I Tranche II of 2016 to OJk. This is a continuation of BRI
Shelf Bonds I Tranche I of 2015 amounted to Rp3 trillion from the Shelf Registration totaling Rp12 trillion reported
on 3 July 2015. Shelf Bonds Tranche II will be issued with principal value amounting to Rp4.65 trillion, offering a
fixed interest rate and 3 (three) series:

Principal Value
Series Interest Rate Tenor Maturity Date
(Rp billion)
A 80.00 8.50% 370 Days 8 February 2017
B 1,108.50 9.25% 3 Years 4 February 2019
C 2,823.50 9.60% 5 Years 4 February 2021

· Series A: Principal value of Rp808,000 with a fixed rate of 8.50% per annum for tenor of 370 (three
hundred seventy) days. Maturity date is scheduled for 8 February 2017.
· Series B: Principal value of Rp1,018,500 with a fixed rate of 9.25% per annum for tenor of 3 (three) years.
Maturity date is scheduled for 4 February 2019.
· Series C: Principal value of Rp2.823.500 with a fixed rate of 9.60% per annum for tenor of 5 (five) years.
Maturity date is scheduled for 4 February 2021.

The interest rate of BRI Shelf Bonds I Tranche II of 2016 will be paid every 3 (three) months from the date of
issuance. Pefindo rated the Shelf Bonds as AAA(idn). Net proceeds from this issuance will be used for loans
disbursement.

BUSINESS PROSPECT 2016
There are three key factors that will influence global economic growth in 2016, namely China’s economic
slowdown, pressure in the money market as the result of another raise in Federal Reserve interest rate in 2016,
and low commodity demands and prices.

As we know, Indonesia’s economic growth in the past two years has been mainly driven by domestic consumption
from goverment spending also private and household sectors. In 2016, this is projected to continue, as exports
and investment are yet to become the leading drivers of Indonesia’s economy. In terms of growth rate, Indonesia is
forecasted to grow at between 4.9% and 5.1%.

In accordance with government target to build various infrastructure projects, the government is expected to
disburse substantial spending to fund the projects. Industrial sectors related directly and indirectly to those
projects are expected to drive loan growth, especially in the Corporate segment. Moreover, the government is
expected
to control the inflation rate between 3.5% and 4.5% to support purchasing power and allow for stable
growth of household consumption.

Considering the conditions, BRI is optimistic be able to grow its business in 2016. With the purchasing power
of middle-income society expected to be stable, BRI is confident that it could expand retail and commercial
loans markets as well as to absorb funding potential. Technology-backed services and networks, which BRI
has been focusing on in the past several years, such as by increasing number of merchants and EDC units,
are also expected to generate results in 2016.

PT Bank RakyaT IndonesIa (PeRseRo) TBk.

and medium enterprises characteristics. which BRI deems products to drive the awareness. including: services. Brand Management: Retail Funding segment (savings Maintaining brand Marketing Strategy 2015 awareness in leading products) as the entry point to In line with the Bank’s strategic goal segments products and e-banking features of becoming The Biggest National To maintain BRI’s brand and the main driver of fee-based Payment Bank. communications targets both existing customers (to • “Panen Bulanan strategies for the Business-to- increase loyalty and purchase Simpedes” and “Grebeg Business (B2B) segment are more intention) Pasar” customized in order to optimally and prospective customers • “Double Untung” program realize the value chain opportunity (acquisition). tailoring them to target segment micro loan products (kUPEDES small.5 trillion in kUR. distinct. • Laku Pandai extension program Bank’s targets. including: the segment’s sustainability in terms • “Pesta Rakyat Simpedes” of awareness. and therefore increasing Marketing Program 2015 BRI brand value. programs in 2015. the Bank carried marketing communications expanding its network. audience. services. In 2015. image. BRI also focuses on enhances its marketing strategies. acquisition and retention aimed to maintain especially electronic-based. With 9% interest right. distinct. These launches. BRI aims to reach • “BRItama Pilih and market potential. and e-banking backbone. Through effective and • OJk “Jaring” program consisting of Rp61 trillion in Micro integrated marketing strategy. and therefore increasing its brand value. and activation of communications activities related in 2016. BRI continuously consistency across micro income. and delivered and kUR).218 ANNUAL REPORT 2015 The Biggest National Payment Bank KEY HIGHLIGHTS CORPORATE GOVERNANCE MANAGEMENT REPORT CORPORATE SOCIAL REPORTS COMPANY RESPONSIBILITY FSA REFERENCE- PROFILE MANAGEMENT DISCUSSION AND ARA CRITERIA 2015 MANAGEMENT ANALYSIS DISCUSSION AND ANALYSIS BANK INDONESIA REGULATIONS OPERATIONAL SUPPORT REVIEW REFERENCE CONSOLIDATED FINANCIAL Financial Review In terms of loan disbursement. to network development. number of marketing as another opportunity to capture knowledge. the highlights of BRI marketing programs were: MARKETING & Marketing communications DISTRIBUTION activities primarily focus on the 1. Through an effective and • “BRI Peduli Pasar integrated marketing strategy that Rakyat” Meanwhile. Rp6 trillion in Retail kUR. and other operational conventional and e-channel activities target both existing aspects. and BRI aims to reach optimum • Customer education on Rp500 billion in kUR for Indonesian awareness level by having the the benefits of e-banking Migrant Workers. retail savings (MSME) as the Bank’s business by executing more marketing (BRItama). Having a vast network the Bank’s products.. optimum awareness levels by Sendiri Hadiahmu” having the right. and programs. . in which BRI exercises communications activities and services. PT Bank RakyaT IndonesIa (PeRseRo) TBk. and in BRI rate and government subsidy at relevant positioning for each target 10%. other segments. savings product (Simpedes). in 2016 BRI plans for BRILink agents to disburse Rp67. As for the customers (acquisition). Micro Loans is expected to grow to 17% to 18% in 2016. and program relevant positioning for each target audience. and loyalty. BRI is optimistic that it • BRI Singapore Branch opening customers (to increase loyalty and will augment penetration in the • Launch of Teras BRI kapal purchase intention) and prospective Micro Loans segment. such as the micro. BRI implemented a Rp100 trillion. communication kUR. product that is strong on two fronts of channels. Marketing Communications Marketing Communications the government has increased its Performance in 2015 BRI consistently carries out disbursement target for kUR to marketing communications for In 2015.

• e-Channel Network To realize the goal to become the Biggest National Payment Bank. 19 Regional Offices. 5. • e-Channel Innovation and Technology Development e-Channel innovations carried out to support business growth in 2015 were: a. In 2015.360 Units. 467 Branch Offices. ANNUAL REPORT 2015 The Biggest National Payment Bank . this strategy also improves operational efficiency. The infrastructure development strategy is two-pronged with extensification and intensification. and 8 Hybrid Machines. Distribution Channel: Increasing Access to Services by Focusing on e-Channel Network The development and expansion of conventional and e-channel networks are part of BRI’s marketing strategy. convenience. . Exentensification refers to the opening of new operating units in new locations. With these additions.612 networks that consist of 1 Head Office. BRI has piloted the solar power supply ATMs in four locations.219 MANAGEMENT DISCUSSION AND ANALYSIS Financial Review To increase brand awareness. and 638 Teras keliling. 187. Solar panels that generate electricity allow an ATM to operate for three days. BRI also took part in national and international exhibitions. BRI has launched 216 conventional operating units.758 EDCs. even without enough sunrays. and 7 Hybrid Machines. while intensification refers to the optimization of business potential in existing locations. 603 Sub-Branch Offices. 983 Cash Offices. Aside from aiming to expand accessibility for customers.792 ATMs at the end of 2015. In 2015.600 EDCs. EDCs. BRI also organized a group travel program with customers to their hometowns (dubbed “Nge-Buzz bareng BRI”) and held a microfinance seminar. the Bank carried out the following activities to increase access through conventional and electronic networks: • Conventional Network During 2015. BRI installed 2. BRI has established itself as the bank with the largest ATM network. and Jayapura. with the most extensive coverage in Indonesia. 100 SSB (Self-Service Banking). 56. BRI had a total of 892 CDMs. Palembang. BRI e-channel expansion included the addition of 500 CDMs. 2. inviting customers to be exhibition participants. and SMS banking expansion.543 Teras Offices.000 new ATMs. The entire conventional operating units are spread throughout Indonesia and connected real time online. Bandar Lampung. Solar-Powered ATMs The innovative solar power supply ATM aims to overcome power insufficiency problems for BRI ATMs in remote areas. BRI continuously develops its e-channel network. as of December 2015. totaling 22. as the Bank is committed to provide ease. hence by the end of 2015 BRI has in place a total of 10. 2. Increase of service access to customers through e-channel networks is focused on adding ATMs. Pekanbaru. and the best services to customers. Other than ATMs.

PT Bank RakyaT IndonesIa (PeRseRo) TBk. .

d. c. and ATM and CDM in cost efficiency management. This special type of ATM is equipped with voice guidance features for users. among others through product development by modification of existing features and new features introduction.. On frontliners that interact directly with customers. Cash Recycling Machine (CRM) CRM is a combination of ATM and CDM. This is achieved. BRI actively markets its products to SOE partners. 5. Similar to ATM and CDM. The Smart EDC has a number of benefits compared to a conventional EDC. Smart EDC Smart EDC is an EDC with an Android-based Operating System (OS). The objective is to ensure compliance with the Service Level Agreement (SLA). which will ensure the fulfillment of customers’ expectations – even exceeded. BRI consistently nurtures the human capital competency. BRI carries out the following: • Marketing officers recruitment • Marketing officers quality improvement – improving the competency of marketing officers to become professional business advisors for customers • Implementation of minimum service standards that shall be met by all employees during interaction with internal customers (employees from different units) as well as external customers. Service standards include the Service Level Agreement (SLA) that is part of employees’ individual and group performance assessments. Currently. the SLA makes up the key component of their key Performance Indicators (kPI). ATMs for Visually-impaired Users ATMs for Users with Visual Disabilities reflect BRI’s commitment to all customers. CRM also serves non-cash transactions. e. carries out cross selling of products and services. both SOE and non-SOE. Product Development: e-banking service development Customer satisfaction enhancement is part of the Bank’s efforts to maintain business continuity. To that end. namely centralized updates with a geo-tagging function. by taking into account the customers needs and characteristics in different business segments. including those with visual disabilities. This machine is developed to optimize fee-based income from money changer business. Customer Base Intensification To increase productivity. CRM is expected to increase investment efficiency. Currency Exchange Machine Currency Exchange Machine serves the exchange of foreign bank notes to Rupiah. BRI focused its product development on e-banking services to support the Bank’s aspiration as the largest national payment bank. this ATM can be used for cash withdrawals and balance inquiries.220 ANNUAL REPORT 2015 The Biggest National Payment Bank KEY HIGHLIGHTS CORPORATE GOVERNANCE MANAGEMENT REPORT CORPORATE SOCIAL REPORTS COMPANY RESPONSIBILITY FSA REFERENCE- PROFILE MANAGEMENT DISCUSSION AND ARA CRITERIA 2015 MANAGEMENT ANALYSIS DISCUSSION AND ANALYSIS BANK INDONESIA REGULATIONS OPERATIONAL SUPPORT REVIEW REFERENCE CONSOLIDATED FINANCIAL Financial Review b. . In 2015. 4. 3. Customers can make deposits and withdrawals at one CRM machine. and seizes trickle-down business from Corporate customers. Empowering the Role of Marketing Officers and Service Quality Improvement With the addition of operating units and sustainable business development.

.PT Bank RakyaT IndonesIa (PeRseRo) TBk.

6%14.8%13. across all of the Bank’s business segments. BRI’s assets amounted to Rp845. In 2015. carries out cross selling of products and services. and BRI’s net income in 2015 are as follows: Market Share Market Share Market Share Market Share Assets Loans Deposits Net Income 7. BRI also actively markets its products to SOEs.8% 2003 2015 2003 2015 8.in customers. and seizes Trickle Down Business from Corporate customers.3%24. ANNUAL REPORT 2015 The Biggest National Payment Bank .1% 2003 2015 2003 2015 MARKETING STRATEGY 2016 In 2016. In detail. With the assets. such as the growth of middle-income segment in Indonesia that will impact lifestyles change.5% 10. Position and Market Share BRI is one the banks with the largest assets in the national banking industry. the implementation of ASEAN Economic Community (AEC). BRI views that marketing communications activities will be influenced by a number of external conditions. BRI’s communications strategy will be focused on retail as well as commercial products and delivered through conventional and social media/digital media. to realize BRI’s goal by the end of 2017.8%13. and digital marketing challenges where the potential of the younger segment will increase.99 trillion.221 MANAGEMENT DISCUSSION AND ANALYSIS Financial Review MARKET SHARE The above marketing programs are implemented with the goal to expand BRI’s market share in the national banking industry.6% 11. which is to become “The Most Valuable Bank in Indonesia and Strong Existence in Southeast Asia”. third parties (dealers/developers). SOE and non-SOE. The Bank intensifies its value chain by optimizing the database of customers. the market share of loans. To expand market share.49%. walk. and executing implant banking through the Home Ownership Program (HOP) and Car Ownership Program (COP). deposits. . BRI’s market share in 2015 was 13. The Bank believes that corporate value chain (SOE and non-SOE) can yield positive impacts in terms of enhancing other segments performance by generating a trickle-down effect to retail and medium segment business. Overall.

.PT Bank RakyaT IndonesIa (PeRseRo) TBk.

BRI aims to maintain the CAR above 17. BRI’s shareholders approved the dividend payout from profits of the year for years ended 31 December 2014 and 2013 with the following details: Profits of the Profits of the Year Year 2013 2014 (Million Rp) (Million Rp) Dividend 6. taking into account sustainable business growth and capital adequacy ratio (CAR). .. 24 (2013 Revision) on “Employee Benefits”. The minimum allowance for impairment losses of commitment and contingencies required by Bank Indonesia was Rp1. On commitment and contingency transactions in BRISyariah. when proposing the DPO. the assessment applies the sharia principles. At the AGMS held on 19 March 2015 and 26 March 2014.632 2. or a ratio of 30%.666. Considering the gradual implementation of Basel III that began at the beginning of January 2015 until its full-fledged implementation in January 2019. aside from considering the level of CAR. As such.581 Pursuant to SFAS No.242 and Rp398 as of 31 December 2015 and 2014.495 Specific and General Purposes 4. for the financial year 2014. • Selective growth planning and implementation incorporated in marketing communications shall be supported by the optimization of internal database use (CIF) to CRM (Customer Relation Management). As discussed under the Corporate Governance chapter. In the process of DPO determination.348. Retained earnings is the main source of capital addition and CAR increase. The dividend payout and ratio for the previous financial years are discussed in detail on page 27. the strategy will consist of: • Building the Integrated Marketing Communication (IMC) awareness across all levels of BRI employees to ensure the thorough and well-organized implementation of strategy (selective growth).5% in accordance with the maximum CAR requirement under Basel III.222 ANNUAL REPORT 2015 The Biggest National Payment Bank KEY HIGHLIGHTS CORPORATE GOVERNANCE MANAGEMENT REPORT CORPORATE SOCIAL REPORTS COMPANY RESPONSIBILITY FSA REFERENCE- PROFILE MANAGEMENT DISCUSSION AND ARA CRITERIA 2015 MANAGEMENT ANALYSIS DISCUSSION AND ANALYSIS BANK INDONESIA REGULATIONS OPERATIONAL SUPPORT REVIEW REFERENCE CONSOLIDATED FINANCIAL Financial Review To implement marketing communications activities. respectively.443. and ensure BRI’s respond to the increasingly intensive and dynamic business competition.272. DIVIDENDS AND DIVIDEND POLICY The AGMS as the Bank’s highest organ stipulates the amount of dividend payout. while capital is the main source that supports BRI’s business growth. BRI measures the commitment and contingency transactions with credit risk individually. The measurement observes Bank Indonesia collectability guidelines. the management has the right to propose the dividend amount. COMMITMENT AND CONTINGENCY Using objective evidence. This way.2 trillion. the AGMS 2015 passed a resolution of dividend payout (DPO) amounted to Rp7. the Bank can create a comprehensive communications strategy that can enhance customer loyalty. BRI also considers sustainable ROE for the next three years.045 7. BRI has recognized reserve for sharing of profit in Income Statements and other consolidated comprehensive income for the year.

.PT Bank RakyaT IndonesIa (PeRseRo) TBk.

543.1.420 Irrevocable L/C 18.541.908 Contingency .Net (15.497 Total Contingency Receivables 58.Net (98.008) (23.791 Spot Trading and Sale of Foreign Currency 937.949.016.539 15.198. to BRI’s income and other comprehensive income statements.311.343.470 9.360.669 Commitment.225.160 7.406.700 2014 Impact on Profit/Loss and Other Percentage Change Comprehensive Income +/-1 % +/. which are subject to floating interest rates. IMPACT OF INTEREST RATE CHANGES ON BANK’S PERFORMANCE Losses could arise from changes of interest rates due to a gap between assets and liabilities.236.021 11.600.372 Total Commitment Liabilities 99.582 6.894) Contingency Contingency Receivables Interest Receivables In Settlement 58.647.490 836.1.668.903 4.223 MANAGEMENT DISCUSSION AND ANALYSIS Financial Review Commitments and Contingencies with Credit Risk As of 31 December 2014 and 2015 2013 2014 2015 Commitment Commitment Receivables Current Sport and Derivative Purchase 1.817 47.775 Total Commitment Receivables 1.163.879. The following table discloses the sensitivity of banking books to potential interest rate changes.090 735.825 23.490 836.780 155.853.707.044 Others 45.864 Bank Guarantee 9.180. - Total Contingency Liabilities 15.571 105.057) (123.922 19.937.889 . 2015 Impact on Profit/Loss and Other Percentage Change Comprehensive Income +/-1 % +/.582 6.081) (104.343.503 18.443.332 95.203 35.086 Others 72.411) DERIVATIVE AND HEDGING FACILITIES BRI is committed to implement Risk Management system in compliance with prevailing regulations and best pratices.203 35.180.818.300) (18.497 Contingency Liabilities Standby L/C 6. with other variables presented on a constant basis.209.656. BRI performs hedging transactions as part of the Bank’s risk management activities to protect its portfolio of foreign currency denominated assets and BRI does not use or issue derivative instruments for trading purposes.322 .379.343.221 111.817 47. ANNUAL REPORT 2015 The Biggest National Payment Bank .679 74.360.099 2.621.639 129. Details on the types of assets and liabilities with floating rates are presented in the Consolidated Financial Statements under the Market Risk Management sub-chapter.626.775 Commitment Liabilities Interest Receivables in Settlement Unused Loan Facility Granted to Debtors 79.

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.224 ANNUAL REPORT 2015
The Biggest National Payment Bank

KEY HIGHLIGHTS CORPORATE GOVERNANCE
MANAGEMENT REPORT CORPORATE SOCIAL
REPORTS COMPANY RESPONSIBILITY FSA REFERENCE-
PROFILE
MANAGEMENT DISCUSSION AND ARA CRITERIA 2015
MANAGEMENT
ANALYSIS DISCUSSION AND ANALYSIS BANK INDONESIA REGULATIONS
OPERATIONAL SUPPORT REVIEW REFERENCE CONSOLIDATED FINANCIAL

Financial Review

2013
Impact on Profit/Loss and Other
Percentage Change Comprehensive Income
+/-1 % +/- 1,182,667

PRIME LENDING RATE AS OF DECEMBER 2015
By Business Segment (P.A)
Interest Rate Consumer Loans
Corporate LoansRetail LoansMicro Loans
Mortgages Non Mortgages
TMT December 10.75% 11.50% 19.25% 10.25% 12.50%
2015

a. The Prime Lending Rate is used as a basis to determine interest rates that the Bank applies to customers. The
Prime Lending Rate is exclusive of loan premium estimates, which depend on the Bank’s assessment on risks to
individual debtors or groups of debtors. As such, the loan interest rates payable by a debtor may differ from the
Prime Lending Rate.
b. Under Non-Mortgage Consumer Loans, fund disbursement via credit card and non-collateral loans (kTA) are
excluded.
c. Information on applicable Prime Lending Rate is available at any time from any BRI offices, and/or accessible
via website www.bri.co.id

MANAGEMENT (ESOP/MSOP)
Pursuant to the resolution of the Extraordinary GMS on 3 October 2003, BRI shareholders approved the Management
Stock Option Plan (MSOP). Under the MSOP, BRI issued a total of 588,235,250 shares. The MSOP was exercised in
three tranches; MSOP Tranches I and II were completed on 9 November 2008 and 9 November 2009, respectively,
while MSOP Tranche III was completed on 9 November 2010.

In total, there were 569,876,000 shares exercised throughout all MSOP phases. Until the end of exercise period,
there were 4.3 million unexercised shares from MSOP Tranche I; 5.2 million shares from MSOP Tranche II; and 8.8
million shares from MSOP Tranche III. The exercise of all MSOP phases was pursuant to Bapepam-Lk regulation
No.IX.D.4 and IDX Regulation No.1-A, attachment to BEI Board of Directors Decree No. kep.305/BEJ/07-2004
regarding the Listing of Securities.

MSOP Phases Total MSOP SharesBeginning Date of MSOPEnding Date of MSOP Exercised Shares

Tranche I 235,294,100 10-Nov-03 9-Nov-08 230,999,000
Tranche II 235,294,100 10-Nov-04 9-Nov-09 230,047,000
Tranche III 117,647,050 10-Nov-05 9-Nov-10 108,830,000
Total 588,235,250 - - 569,876,000

There were a total of 588,235,250 shares allocated for MSOP Tranche I, II, and III, where until the end of MSOP
period, a total of 569,876,000 shares were exercised. The MSOP generated additional equity for the Bank at
Rp1,366,089,110,750.00.

PT Bank RakyaT IndonesIa (PeRseRo) TBk.

ANNUAL REPORT 2015
The Biggest National Payment Bank
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MANAGEMENT DISCUSSION AND ANALYSIS

Financial Review

(In million Rupiah)

Tranche I Tranche II Tranche III Total

Paid-up Capital 115,500 115,024 54,415 284,938
Premium 106,837 287,559 474,490 686,886
Other Capital (Share x Option Value) 27,117 80,889 10,259 212,265
Total 249,454 483,471 633,164 1,366,089

BUY BACK SHARES
Buyback References
The Bank has obtained a permit from the OJk to exercise buyback shares of BBRI. The buyback was carried out
from 12 October 2015 to 12 January 2016. In performing the buyback of shares and/or bonds, the Bank complies
with the prevailing external regulations, among others:

1. Law No. 40 of 2007 on Limited Liability Company
2. OJk Regulation No. 2/POJk.04/2013 on Stock Buyback by Issuers or Public Companies in Significantly
Fluctuating Market Conditions
3. OJk Circular No. 22/SEOJk.04/2013 on Other Conditions as Significantly Fluctuating Market Conditions of
Stock Buyback by Issuers or Public Companies in Significantly Fluctuating Market Conditions
4. Bank Indonesia Regulation No. 15/12/DASP/2013 regarding the Procedures for the Auction of Government
Securities in the Primary Market and the Administration of Government Securities

Buyback Shares 2015
Total Shares Average Buyback Price Increase in Earnings Per Share
210,118,600 shares Rp 10,881/shares Rp8.8/share

*: Until 31 December 2015, the Bank has not exercised buyback shares

Buyback Program 2016
BRI exercised the buyback for three months starting 12 October 2015 to 12 January 2016, totaling 221,718 million
shares. The average buyback price stood at Rp10,881. The total cost of buyback exclusive of transaction costs was
Rp2.419 trillion. The initial buyback target was Rp2.5 trillion. BRI buyback shares should not exceed 20% of total paid-
up capital and shares outstanding should be at a minimum 7.5% of paid-up capital. The source of buyback funds was
the Bank’s internal cash and there was an assurance that the funds would not impact the Bank’s fi condition required
to fi its activities.

The last transaction took place on 7 January 2016. A report to OJk was administered on 13 January 2016. The
buyback shares are to be used in MSOP/ESOP (Management Stock Option/ Employee Stock Option). Another
purpose of buyback is to strengthen the Jakarta Composite Index, which was dropped in mid 2015.

.PT Bank RakyaT IndonesIa (PeRseRo) TBk.

68 419.90 1. AND DEBT/CAPITAL RESTRUCTURING Acquisition of PT Asuransi Jiwa Bringin Jiwa Sejahtera On 6 October 2015. thereby acquiring 91.038.21 147.312.13 1.63 100% 3 Development Total Proceeds 1.63 441.24 564.63 441..87 723.11 557. The second plan is to conduct an internal revamp to enhance the company’s competitiveness through better products.27 196. BJS total assets as of 31 December 2015 was Rp5. The nature and relationship of transactions with related parties are disclosed under the Note 43 of Audited Financial Statements and are an integral part of this Annual Report. . all proceeds from the IPO were utilized a planned. BRI signed a Share Transaction Agreement with shareholders of PT Asuransi Jiwa Bringin Jiwa Sejahtera (“BJS”).35 646.80 1.21 147. ACQUISITION.47 trillion would be used for the following purposes: Use of IPO No Plan 2004 2005 2006 2007 2008 2009 Realized Proceeds (billion Rp) Core Banking and 1 883. BRI makes transactions with the Bank’s related parties due to ownership and/or managerial relations.57% of the total consolidated assets. MATERIAL INFORMATION AND FACTS ON INVESTMENT. use of information and technology system.21 100% Expansion Research and Product 441.001% of BJS shares with a purchase value of Rp1.36 883.27 100% IT System Upgrade Operational Network 2 147. DIVESTMENT.20 1.21 147.226 ANNUAL REPORT 2015 The Biggest National Payment Bank KEY HIGHLIGHTS CORPORATE GOVERNANCE MANAGEMENT REPORT CORPORATE SOCIAL REPORTS COMPANY RESPONSIBILITY FSA REFERENCE- PROFILE MANAGEMENT DISCUSSION AND ARA CRITERIA 2015 MANAGEMENT ANALYSIS DISCUSSION AND ANALYSIS BANK INDONESIA REGULATIONS OPERATIONAL SUPPORT REVIEW REFERENCE CONSOLIDATED FINANCIAL Financial Review USE OF PROCEEDS FROM INITIAL PUBLIC OFFERING (IPO) BRI exercised the Initial Public Offering (IPO) on 10 November 2003. proceeds from the IPO of Rp1.63 147.21 213.21 441.235. customer base and networks.96 698.287. while the remaining 9% of shares are owned by Yayasan kesejahteraan Pekerja (YkP) Bank BRI.130. MATERIAL INFORMATION ON TRANSACTIONS CARRYING CONFLICT OF INTERESTS AND/OR TRANSACIONS WITH AFFILIATED PARTIES In conducting its day-to-day business. and due observance of prudence in operational processes. According to IPO prospectus. BRI became the holder of 91% of BJS shares. Going forward.472.11 100% As of the end of September 2009. BRI will focus on the implementation of two measures to propel BJS business. namely brand awareness. EXPANSION. and its established bancassurance network.627 billion. All transactions with related parties are performed based on terms and conditions agreed upon by the involved parties.21 147.472.764 or 0.63 147.71 1.34 441. the first plan is to harness the competitive advantage of BRI.

PT Bank RakyaT IndonesIa (PeRseRo) TBk. .

The current account b. Bank Indonesia Regulation a. mandatory use of Rupiah also does not apply to transactions conducted in foreign currency based on legis Business activities in foreign currency conducted by banks on the basis of the laws governing the banking activities and sharia banking acti Transactions on the primary market and secondary market for foreign currency securities issued by the Government pursuant to the laws go Other transactions in foreign currency that are conducted based on the laws. Bank Indonesia The regulation Regulation reduces the Statutory Reserve 3. in Rupiah henceand TheForeign regulation Currency also decreases for Conventional in certa Commercial receiving Banks interest income amounted to 2. international commercial Aside from the exception above.000 to USD 25. 2.5% of TPF in Rupiah. (GWM)Decrease in Statutory Reservesa.227 MANAGEMENT DISCUSSION AND ANALYSIS Financial Review CHANGES OF REGULATIONS AND THEIR IMPACTS ON THE BANK’S PERFORMANCE BANk INDONESIA REGULATION (PBI) Bank Indonesia Regulation No.000 or its equivalent per month regulation Rupiah between Banks and per customer. remained at 2. Domestic Clients Where the value of underlying transactions is not in multiplies of USD 5.5% 26ofNovember a bank’s third 2015 party on Statutory funds in Rupiah.17/21/PBI/2015 in Rupiah to dated 7. ANNUAL REPORT 2015 The Biggest National Payment Bank . the amount is to be rounded up to the nearest multiple of USD 5. No.000. The threshold of Spot foreign exchange transactions BRI shall adjust its stipulation No.5% of the effective annual interes .All transactions within the territory of the Republic ofBRI shall adjust its customers 17/3/PBI/2015 on the Oblig Exception applies on particular transactions for implementing the state budget.000. Reserveswill for increase Commercial BRI’s Banks liquidity. receipt or grant of offshore grants.17/13/PBI/2015 dated for buying foreign currency against Rupiah required on foreign currency 25 August 2015 on Foreign to have underlying transactions is reduced from USD transactions pursuant to this Exchange Transactions Against 100.

.PT Bank RakyaT IndonesIa (PeRseRo) TBk.

7 of 1992 on Banking.03/2015 dated 1. ASSETS QUALITY ASS 21 August 2015 concerning Prudential Provisions on National EconomicCOMMERCIAL Stimulus for BANkS Com For loans and other provisioning of funds provided to a. 42 /POJk. and has reported the adjustment to Ratio for Commercial Banks b. 10 of 1998 e. . borrowings.228 ANNUAL REPORT 2015 The Biggest National Payment Bank KEY HIGHLIGHTS CORPORATE GOVERNANCE MANAGEMENT REPORT CORPORATE SOCIAL REPORTS COMPANY RESPONSIBILITY FSA REFERENCE- PROFILE MANAGEMENT DISCUSSION AND ARA CRITERIA 2015 MANAGEMENT ANALYSIS DISCUSSION AND ANALYSIS BANK INDONESIA REGULATIONS OPERATIONAL SUPPORT REVIEW REFERENCE CONSOLIDATED FINANCIAL Financial Review No. Funding is defined as funds from third parties that result in the Bank’s obligations.00 (five billion Rupiah) loan quality following restructuring can be categorized If the principal and/or interest installment period is less than 1 (one) month. quality improvement to Performing as intended in paragraph (2) can be done a b. Net Cash Outflow is the total estimated cash outflow less the total estimated cash inflow that is projected to occur for the next 30 (thirty) days stress scenario. c. issued securities. PT Bank RakyaT IndonesIa (PeRseRo) TBk.000.regulation 1 (one) debtor or 1 (one) project valued less than or equal to Rp5.. POJk No.000.000. debt securities. Regulation P FINANCIAL SERVICES AUTHORITY REGULATIONS (POJk) POJk 11 /POJk. Liquidity Coverage Ratio (LCR) compares the High BRI has adjusted its LCR calculation dated 23 December 2015 on the Quality Liquid Asset with total net cash outflow for 30 with the stipulation in this regulation Mandatory Liquidity Coverage (thirty) days stress scenario. amended by Law No. 2. High Quality Liquid Assets (HQLA) is defined as the OJk cash and/or financial assets that can be easily converted into cash to meet the Bank’s liquidity needs for 30 calendar days liquidity stress scenario. d. Deposits is defined as stipulated in Law No. Funding can be in the form of deposits.03/2015 a. and other equal obligations.

Variable remuneration provided by a listed and public bank must be in the form of shares or other share- based instruments issued for a certain percentage of the amount of variable remuneration . POJk No. securities outstanding 3. Specific domestic indicators defined by the OJk d. Remuneration disclosure e.5% (two point five percent) of RWA for Bucket 4 5. namely bank’s total exposure 2. as of December 2015. 45/POJk. 1% (one percent) of RWA for Bucket 1 2. 46/POJk. Remuneration Committee’s duties and responsibilities c. namely: a. Over the counter and spot derivatives b. The Board of Directors and Board of Banks Commissioners duties and responsibilities to formulate and implement remuneration b. BRI is Important Bank and Capital confident it can meet the Surcharge Systemically Important Bank (SIB) Determination: requirement with total CAR of • OJk defines SIB based on systemic important 20. Substitutability of bank’s role in payment and custodial systems • All indicators and sub-indicators have equal weight • OJk will review SIB methodology at least 1 (one) time in 3 (three) years Capital Surcharge • Capital Surcharge is determined based on 5 buckets: 1. 1. Interconnectedness with the financial system. Currently.229 MANAGEMENT DISCUSSION AND ANALYSIS Financial Review No.5% (three point five percent) of RWA for Bucket 5 • SIB Capital Surcharge must be met using the CET- 1 component • SIB Capital Surcharge must be gradually met starting 4. Business complexity that has four sub-indicators as defined by the OJk. Regulation Points of Regulation Impact on BRI FINANCIAL SERVICES AUTHORITY REGULATIONS (POJk) 3. 2. as follows: January 2016. which considers three sub- indicators: a. 3. intra financial system assets b. Prudence in formulating remuneration d. Bank size.03/2015 The Financial Services Authority (OJk) shall determine the BRI will adjust Capital Surcharge dated 23 December 2015 on Systemically Important Bank (SIB) and Capital Surcharge for calculation effective as of 1 Determination of Systemically SIB. excluding securities placed as high quality liquid assets in liquidity coverage ratio c.03/2015 dated 1 January 2016 to 1 January 2019 23 December 2015 on Corporate • Capital Surcharge applicable for 1 Januari 2016 is calculated using data from June 2015 BRI will adjust with the new Governance Implementation for provisions Remuneration in Commercial a. POJk No.59% and CET-1 of 16. Securities classified as available for sale. ANNUAL REPORT 2015 The Biggest National Payment Bank . intra financial system liabilities c. • SIB indicators are: 1.76% score measured using certain indicators.5% (one point five percent) of RWA for Bucket 2 3. 2% (two percent) of RWA for Bucket 3 4.

.PT Bank RakyaT IndonesIa (PeRseRo) TBk.

rate. Surat Utang. The guidelines are disbursed kUR with 12% interest applicable to ministers/institutions. Reksadana. BRI Contribution of Civil Servants plans to improve funding (PNS) • Pembatasan portofolio investasi per-pihak structure in 2016.230 ANNUAL REPORT 2015 The Biggest National Payment Bank KEY HIGHLIGHTS CORPORATE GOVERNANCE MANAGEMENT REPORT CORPORATE SOCIAL REPORTS COMPANY RESPONSIBILITY FSA REFERENCE- PROFILE MANAGEMENT DISCUSSION AND ARA CRITERIA 2015 MANAGEMENT ANALYSIS DISCUSSION AND ANALYSIS BANK INDONESIA REGULATIONS OPERATIONAL SUPPORT REVIEW REFERENCE CONSOLIDATED FINANCIAL Financial Review No. local governments. have a higher low-cost funds Saham. The n as overseeing Micro kUR Program. 13) and 2. 201 of 2015 dated 11 instruments (portfolio management) for institutions instrument diversification by November 2015 on Management that manage pension contributions of PNS. 8) to 9% (Regulation No. dan component compared to 2015 Penyertaan Langsung position.. targeting to maksimum 25% dalam bentuk Deposito. Effective pension contribution of the Accumulated Pension as of 12 November 2015. . 8 and 13 BRI has of 2015 on the Guidelines for People Business Loans (kUR) Implementation People Business Loans (Micro kUR).Regulations of the Coordinating Economic Minister No. the regulation stipulates: management institution. Maximum Limit of Types of Investment Maximum Limit (special) Total Investment Securities 50% Deposits 5% per-government banks Shares (listed on the Stock Exchange) 10% per-issuers 40% Corporate Bonds (listed and traded on the Stock Exchange) with a minimum rating 15% per-issuers 50% of A- 15% per-investment Mutualfunds 50% managers Direct Investments (shares not listed on the Stock Exchange)5% per-parties10% PT Bank RakyaT IndonesIa (PeRseRo) TBk. An amendment is made to interest rate payable by customers from 12% (Regulation No. Regulation Points of Regula GOVERNMENT REGULATIONS 1. The regulations stipulate the Guidelines for MicroStarting August 2015. One of funding • Pembatasan portofolio investasi per jenis diversification plans is to issue investasi: bonds in 2016. Finance Minister Regulation This regulation stipulates the limit of investment To anticipate investment No.

i. Points adjustments required by 3. SFAS 4 Income SFAS 4 (2009): The scope covers Separate Financial BRI has presented Separate (2013): Consolidated Statements as additional information of Financial Statements as Separate Financial Statements Consolidated Financial Statements. Additional explanation of the difference between fair value and value in use Provisions on goodwill allocation on cash generating unit. Income. • Presentation of Other Comprehensive Income (OCI) by accounts that will and will not be reclassified to Profit/Loss • Alternative for OCI account in 2. SFAS 1 (2013): SFAS 1 (2009): • Change of Comprehensive Income BRI has adjusted Financial Presentation of Presentation of Statements to Income Statements Statements format as required Financial Statements Financial Statements and Other Comprehensive by the standard. New SFAS Previous SFAS key Changes Impacts on BRI 1. operating segment before aggregation Disclosures.e. the following table summarzies the points of changes and impacts on BRI going forward: No. including: • Fair value hierarchy • Description of techniques • Assumptions used to calculate recoverable amount • Method description for key assumptions • Reasons for changes of valuation technique • Prospective transition applies Changes the definition of “control” 4. the Financial Accounting Standards Board (DSAk-IAI) passed a number of Revised and New Statements of Financial Accounting Standards (SFAS) that applied effective as of 1 January 2015. SFAS 48 (2014): Assets of amendments are as follows: the standard. With regards to the new standards. SFAS 65: and includes guidelines to measure Consolidated Financial control. Impairment of Assets Fair value definition refers to SFAS 68 (2013). additional information in Notes Financial and Separate to Financial Statements Statements Financial Statements This standard introduces provision on the formulation of Separate Financial Statements for entities that are no longer entities of investment SFAS 48 (2009): Consequential amendement to the BRI has made Impairment of introduction of SFAS 68 (2014).231 MANAGEMENT DISCUSSION AND ANALYSIS Financial Review NEW FINANCIAL ACCOUNTING STANDARDS AND THEIR IMPACTS ON FINANCIAL STATEMENTS In 2014. Exception applies for Statements consolidated financial statements of Investment Entities. addition of comparative information as part of Financial Statements • Change of Income Statements format • Additional requirement for the disclosure and presentation of comparative information. . ANNUAL REPORT 2015 The Biggest National Payment Bank .

PT Bank RakyaT IndonesIa (PeRseRo) TBk. .

. (2013 Revision). Other Long- b. assets through sales (if • Eliminates stipulation on final tax any) and tax assessment Prospective • If tax tariff of Assets Sales transition applies ≠ tax tariff of assets use. Changes in Service cost are recognized in Where significant number Profit/Loss and actuarial gains changes occur. Measurement and Assumptions: Until Quarter IV/2014. SFAS 46 principle-based SFAS 46 • Stipulates Deferred Tax Asset BRI will make adjustments (2014): (2009): (DTA) and Deferred Tax required by the standard. Net Defined Benefit (net interest income/expense) and remeasurement of liabilities (assets) of net defined benefit Service Cost and Net Interest are recognized in Profit/Loss and remeasurement is recognized in OCI Disclosure: more complex and 6. reflect tax consequence • Stipulates DTA and DTL arising to recover recorded on investment property measured amount of unamortized at fair value. restatement and losses are recognized in can be made in 2015 by OCI. . and Component of changes of Pensions. Present Value of Obligation that can be amortized and deferred For the first time recognition is no longer recognized of unrecognized balance of SFAS 24 (2010 Revision) Past Service Cost and recognized two components Actuarial Gains and Losses. restating financial position as c. major groups: Service Expenses. Income Tax Income Tax Liability (DTL) of unamortized among others: assets measured using • DTA/DTL measurement to revaluation method. Presentation: restructuring at 31 December 2014 and 1 expense components into 3 January 2014.232 ANNUAL REPORT 2015 The Biggest National Payment Bank KEY HIGHLIGHTS CORPORATE GOVERNANCE MANAGEMENT REPORT CORPORATE SOCIAL REPORTS COMPANY RESPONSIBILITY FSA REFERENCE- PROFILE MANAGEMENT DISCUSSION AND ARA CRITERIA 2015 MANAGEMENT ANALYSIS DISCUSSION AND ANALYSIS BANK INDONESIA REGULATIONS OPERATIONAL SUPPORT REVIEW REFERENCE CONSOLIDATED FINANCIAL Financial Review No. Net Interest of Liabilities (Assets). SFAS 24 (2013): SFAS 24 (2010): a. New SFAS Previous SFAS key Changes Impacts on BRI 5. which are no longer recognized in Profit/Loss and recognized under SFAS 24 OCI. of Present Value of Obligation these accounts must be that (can be) amortized or excluded from liabilities and deferred. BRI Employee Benefits Employee Benefits No significant changes save still used 10% corridor and for detailed explanation on linear amortization methods assumptions for Severance. Recognition: Term Benefits. then use tax tariff of Assets Sales • DTA/DTL measurement to reflect tax consequence to recover carrying amount investment property through sales (if any) PT Bank RakyaT IndonesIa (PeRseRo) TBk.

the Measurement measurement required by other fair value measurement and standards disclosures of all Financial • Adoption of fair value and Non-Financial Assets of BRI measurement framework includes improved based on criteria of the use of term “exit price” measurement and disclosure • Fair Value hierarchy defined by this accounting • Introduction of default risk standard. New SFAS Previous SFAS key Changes Impacts on BRI 7.g. SFAS SFAS 50 • Improvement of scope referring BRI has made 50 (2010) to SFAS that stipulates a adjustments required by (2014): Financial Instruments: specific scope (e.233 MANAGEMENT DISCUSSION AND ANALYSIS Financial Review No. modification • Required disclosures for partial or adjustment to information whole termination system and internal • Retrospective transition applies. and recognition period of hedging over cash flows Retrospective transition applies.g. adjustments required by Instruments: Instruments: SFAS 68) the standard. control with respect to disclosure requirement. 9. SFAS 68) among others improved Disclosures Disclosures • Disclosure of entities that satisfy disclosures of fair value and offsetting criteria liquidity risk. SFAS 60 SFAS 60 • Improvement of scope referring BRI has made adjustments (2014): Financial (2010): Financial to SFAS that stipulates a specific required by the standard.g. measurement of hedging effectiveness. SFAS 68) the standard. Instruments: Instruments: scope (e. Recognition and Recognition and Stipulates the recording of Measurement Measurement financial instrument when the fair value at recognition differs with value at transaction Describe reclassification measurement of embedded derivatives Stipulates criteria of hedging. • Block discounts/blockage factor are not allowed • Highest and Best Use concept for non-financial assets • Requires disclosures of individual measurement of fair value • Prospective transition applies . SFAS 68: Fair Value • Single reference for fair value Starting 1 January 2016. BRI adopts and financial liabilities offsetting and net settlement • Provides guideline to apply criteria when and only when net settlement criteria BRI has the legal capacity to • Retrospective transition applies exercise the offsetting and net settlement with the purpose to realize assets and settle 8. SFAS 55 SFAS 55 Improvement of scope referring to SFAS BRIliabilities simultaneously. 10. has made (2014) Financial (2010): that stipulates a specific scope (e. and management’s consideration regarding the level of input significance in fair value measurement. ANNUAL REPORT 2015 The Biggest National Payment Bank . measurement that includes loan value adjustment and debit value adjustment. Financial Instruments: Presentation • Provides guideline to apply Presentation offsetting of financial assets Presently. termination of hedging instruments.

.PT Bank RakyaT IndonesIa (PeRseRo) TBk.

Establishment of Crisis Management Team (CMT) tasked with a critical role in the event of disruption/disaster. . Formulation and update of Call Tree. e. The implementation of BCM in BRI. human. b. BUSINESS CONTINUITY MANAGEMENT (BCM) Disruption or disaster due to the nature. and other stakeholders nearby BRI operating units. tests.. and technology errors are a significant threat to the business continuity of BRI and its operating units in Indonesia. Formulation of Disaster Mitigation Emergency Response Procedure and Bussiness Continuity Plan (BCP) for several Critical Operating Units. risk assessment and disaster threats. sustaining the Bank’s business activities and operations. customers. Establishment of BCM Maintenance Team (BMMT) to maintain BCM program under usual circumstances before any event of disaster occurs. detailing names. applies. and updates its BCM to ensure the safety and security of employees. applicable across all operating units. This information also supports evacuation procedure. Extraordinary events are for example disasters suffered by customers with substantial loan balance. c. During a reporting year.234 ANNUAL REPORT 2015 The Biggest National Payment Bank KEY HIGHLIGHTS CORPORATE GOVERNANCE MANAGEMENT REPORT CORPORATE SOCIAL REPORTS COMPANY RESPONSIBILITY FSA REFERENCE- PROFILE MANAGEMENT DISCUSSION AND ARA CRITERIA 2015 MANAGEMENT ANALYSIS DISCUSSION AND ANALYSIS BANK INDONESIA REGULATIONS OPERATIONAL SUPPORT REVIEW REFERENCE CONSOLIDATED FINANCIAL Financial Review ACCOUNTING POLICIES AND FINANCIAL INFORMATION RELATING TO EXTRAORDINARY EVENTS The policies are used as BRI’s guidelines in recording and disclosing extraordinary events in the audited financial statements. and positions in organizational structure. etc. mapping of operating units vulnerable to disasters. containing results of potential disruption/ disaster identification. As such. and protecting the interests and assets of BRI and its customers. The CMT will have to take measures during an event of disaster and is only active under such circumstances. there are not an accounting policy and financial information for extraordinary events. f. BRI Board of Directors deems it necessary to develop and apply a Business Continuity Management (BCM) Policy. BRI develops. is as follows: a. Business Impact Analysis (BIA) generated by each Operating Unit. and list of resources inventory required to be prepared against the risks and threats in each Operating Unit. d. Determination of alternate site should disruption/disaster takes place at Operating Units’ main premises. contact numbers.

.PT Bank RakyaT IndonesIa (PeRseRo) TBk.

Basic training to use fire extinguisher equipment c. as several BRI’s Operating Units have experienced disaster situation. all BRI Operating Units. Training for victims evacuation from inside a building for building safety officers d. thereby allowing the Opearting Units to resume activities as soon as possible after the disasters occurred. The results of this coordination include testing.235 MANAGEMENT DISCUSSION AND ANALYSIS Financial Review The RM Division continuously coordinates the BCM implementation with relevant operating units. ANNUAL REPORT 2015 The Biggest National Payment Bank . and other drills for other types of disasters. such as DC-DRC switch over and fire drills in several BRI buildings. Other relevant basic exercises BRI’s readiness in ensuring business continuity has been proven. High-rise evacuation exercise b. including BRI Head Office and Ragunan IT Office. The disaster drills are exercised at least once every year and cover the following: a. BRI utilized E-Buzz and Mobile Teras BRI available at all of the Bank’s operational regions as alternate site during incident period. .

PT Bank RakyaT IndonesIa (PeRseRo) TBK .

. 2015 and for the year then ended with independent auditors’ report PT Bank RakyaT IndonesIa (PeRseRo) TBk. .618 ANNUAL REPORT 2015 The Biggest National Payment Bank PT Bank Rakyat Indonesia (Persero) Tbk and its Subsidiaries Consolidated financial statements as of December 31.

nncial Accounting Standards. A l l info1111ation i n the consolidated financial statements of PT Bank }{akyal Indonesia (Persero) Thk an<l Suhsidiaric1' has bt:t:ll disclosed in a complete and truthful manner. Nmni:: : Asmnw i Syam Office Addl'css : JI.44-46 Jaka!"la 10210 Residential Address : JI. 1 rnru Kocsmahargyo Din. b. 65461 BOARD OF 111R F.65459. 44-46 Jakarta 10210 Ri::si<l cutial Address : J I. nor do they omit any material i nformation or facts. 251C26!l.RO) Thk AND SlJHS!DrARIES \Ve.44 .lhc undersigned 1.2510254 251026'1.m.yat Indonesia (J'crscro) Tbk and ubsid1artes• consolidated financial stalemenls do not contain any incorrect material in fonnaLion or facts.'EMlH.UY F. fhis statement has been made trulhfully .xmtrul system. <1. PT Bank Rakyat Jndones1a (Persero) Tbk and Subsidianes' con. 4E Cilandak South Jakai1a Telephone : 021 -5751756 Title . Jenderal Sudinnan No. Profc ionalisrne.. Cemp<1ka 1. 20 l5 AND FOR TllE YEAR Tl I EN ENDED PT BANK RAKYAT lNDONESJA (PER SF.:lor ln(cgrilas. Pcnghargaan Kepa<la SDM . Cilandak Oalam Raya T\o. President Oircctor 2. 25 10:. 65293. 4.575 1751 Ti t le : Director Declatc that : 1. \Ve are responsible for PT Dank Rakyat Indonesia (Pcr-scro) Tbk and Subsidiaries' internal <. Kctel adanan? Kepuasan Nasabah .cstmi 4 Rlok 0/5 Lebak Dulus South Jakarta Telephone : 021 .J11lnut11 10210 Tclcpon : 0212610244. 2.iksimili:021 2500077 Kciw<1L KANPUSSRJ Telex. 65456. rJ7I PT BANK RAKYAT INDONESIA (PERSERO) KANTOR PUSAT Jalan Jenderal SLd1rman No. Name : IJaru Koesmahargyo Office Address : JI. Jcndcral Sudirman No. PT Bank Ral. We are responsible for the prepara hon ..31.:<.solilhtlt:<l limmcial statemnt have been prepared and presented in accordance with Indonesian Fm.46 Tromol Pos 1C94l1000 .md the presentation of t he consolidated financial tatcmcnts or PT Hank Rakyat lndonesm (Persero) Tbk and Subsidiaries.C:TORS' S'rATEMENT REGARDING THE RESPONSJBILITY FOR THECONSOLlDATBD FINANCIAL STATEME:'l/TS A8 OF LJb<. 3.

................. PT BANK RAKYAT INDONESIA (PERSERO) Tbk AND ITS SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31..... Appendix 2 Appendix 2 Statement of Profit or Loss and Other Comprehensive Income ..........................-630 9 Consolidated Statement of Cash Flows 10 -.......................................................................... Appendix 5 Notes to the Financial Statements ..........Parent Entity..................................................... Appendix 3 Appendix 3 Statement of Changes in Equity ......................... *************************** ..... 6265--628 7 Consolidated Statement of Changes in Equity...............................831 ...................................Parent Entity ..........11 631 632 ............. 2015 AND FOR THE YEAR THEN ENDED WITH INDEPENDENT AUDITORS’ REPORT Table of Contents Page Independent Auditors’ Report Consolidated Statement of Financial Position .......Parent Entity.............................209 Notes to the Consolidated Financial Statements 633 ......... Parent Appendix 4 Entity Appendix 5 .............................................-625 4 Consolidated Statement of Profit or Loss and Other Comprehensive Income .............................. 6231................... 6298.... Appendix 1 Appendix 1 Statement of Financial Position ......................................................................................................................................Parent Entity .......................................... 12 ....................... Appendix 4 Statement of Cash Flows ..................620 ANNUAL REPORT 2015 The Biggest National Payment Bank These consolidated financial statements are originally issued in the Indonesian language..............

.PT Bank RakyaT IndonesIa (PeRseRo) TBk.

.tt' lh-.11. and cash f lows for the year thP.IJll1't 11 I J l l\ f ll.I X• h..2·53 Jl. which comprise the consolldated stntement o • financial positiou cts of December 31.lid JI.J y rnanaqeme'lt.. '. and the consolidated statements of profit or loss and other c omprehensive income. RPC.n aurlit nrocedures that are app1oplicite in the circumstances.JitlS tt/. In making those risk assessmems.'lnlu f t n I C 111 .\(11 1"11.com.. ·. Boards of Commissioners and Directors PT Bank Rakyat Indonesia (Persero) Tbk We tiavc audited the accompanylno consolloated financial statements of PT Bank R akyat lndonesid (Pcrsero) Tbk and its subsidiaries..rtt ln11 11o4XW Purwantono.11 lo l . 2015. • c. the auditors consider r nterna l control releva1t to the entity's preparation and fair presenta tion of l h co nsolicated financ·a1 statements in order to desic. The procedures selected depend on the auditors' judgment .SUjJ f.: .ab ""' . .111111 f (t 11• l( .r 1 e·r.l' O. SJ<lirmnn K11v. h1•lvl 1c.. and a summarit of si911I f icant accounting policies and other explanatory information. includinq the assessme nt of the nsks of material misstateme nt of the consolidated flnanc i<tl statements. Sungkoro & Surja hl11n1>11 1 Sh < .I ••tl<J .250/PSS/20: 6 The Shareholders.l. Auditors' responsibili ty Our responsibif ty is to express an opinion on such consolidateu fimrncial sla tements based on our audit.EV :3Jl 1111. but not for the purpose of exprPssinQ an opinion on the effectiveness of the ent ity 's Internal control. changes In equity.".. We believe that the audit evldnce we have obtained rs sufficient and appropriate to provide a basis for our audit opinion.1(1Li'li....J. I .1 IQ>(111 I T'°I • +G2 215209 5000 lor1<1 1 . and tor sucl"I interna control as management determines is necessary to en<ib le the preparat ion of consolidated fi11ancia1 statements that are f ree from mat erial misstatement . Management's responslblllty for the financial statements Management Is repo11s ible for the preparat ion and f air presentation of such consolidated financial stale• nenls in a ccordance w ith lndoneslan r'lnanclal Accounting Stal"ldards. We conducted our audit in accordance with Standa1 d!> on Auditing establlshl?d by the Indonesian Jnstitute of Cert1fien Public Accountants.n ended..& \ • . Independent Auditors' Report Report No. 1" I lac. Jend.rl111u SU'. whether due to fraud or error.>iJ Tf1ls rnport Is orlglnartv issued In the 1ncones1an 1angu019e. A"l audit also includes evaluating the app1 opr lati:n s of accounting pollcles used and the reasonableness of accountinQ estimates rnaue l. as we ll as evaluating the overall presentation ot the consolidated financial statements . :I lh\...a9 4100 Toi·.> . whether due to fraud or er ror. Tt1ose standards require that we comply with ethical reri11irements a nd plan and perform the audit to obtain reasonable assurance about whether such consolidated finarcialst atement s ci1 e free from materialmissta t ement. A n audit Involves performing procedures to obtain audit evidence about the amoun s and disclosu es in the consolidated f inancial statements.iY 2...

ir opinion. 20 15 and tor the year t"len ended was performed for the purpose of for ming an opinion on such conso ldalcd 'ln<:mclal stiJtements taken as a whole. Sungkoro & Surja Slnarta Public Accounta nt Registration No. AP .h is presented as a supplementary informalion to t he accompanyln9 consolidated financ ia l <:. 2015. and n summLiry ot signif icant acco unting policies and other ex. the acccmpanylnQ consolidated financial statements present fairly. 2015. and their consolidat ed financia l performance and cash f lows fo1 the yea r then e'lded. 2016 . Independent A uditors' Report (continued) Report No.'911:1J/ly iss!. Otl1er matter Ou1 dudil or he ai:companying consolidated financ ialstatements of PT Bank Ra1<yat Indonesia (Persero) -bk and its subsidiaries as of December 31. The accompanving financial inf ormation of PT Bonk RLlkyiJt Indonesia (Persero) Tbk (parent entity).0701 January 29 . The Parent Enllty Fi11andal Infor rnation is the responslbllf ty of management and was der ived f rom and relales di1eclly o the underlying account ing and other recor dS used to prepare the accompanying consolidated ff r1ancial statements. whir. E Bullnq • 1. In all material respect s. changes in equity. which compr ises the sta tement of f inancial postt1on cis ot December 31. in relation t o the accompanying consolidated financial statements taken as a whole. The Parent Entity Financial Information has been subjected to the auditing procedures applied in the audit of the <iccompany ino consolidated flnanc al satements in acco rdance with Standards on Audit ing established by the Indonesian Instit ute of Certified Publ c Accountonts. Purwantono.Ied in Ille lndCJ(les11Jn longulJge. is presented for the purposes of additional analysis and Is not ii required part of t he accompanying consolidaled fi11dncfal !:il<t tements under Indo nesian rlnanclal Accounting Stanaards..ltrr ll'OrkJn workl This report Is or.planatory Informa tion (collectively referrerl to ris the "Parent Entity Financial Informat ion"). and the stat ements of prof it or loss and ot her comprehensive income. in accordance with Indonesian FIMnc:ia l Accountinq Standards. the Parent Entit y nnancial Information is fa irly stated. and cash flows for the year then ended.ta t ements . RPC-250/PSS/201 6 (continued) Opinion In o. In all mJtcrial respects . tn our opinion. the consolidated financial posit on of PT Bani< Rakyat Indones ia (Persero) -bk and its subsidiaries as of December 31.

596 4. 0 .2h.926.2d.006 15.072 Government Recapitalization Bonds 2c.168.16 19.730 Sharia Receivables and Financing 2d.435.6.8.538 495.12.2d. 2014/ December December December 31.718.360) 16.028. 22.288 434.168. 43 7.527.2d.623 These consolidated financial statements are originally issued in the Indonesian language.44 9.440.2k.985 8.162. 635 7 778 Current Accounts With Bank 2a.003.063 Derivatives Receivable 2c. Allowance for impairment losses 092 . 51.736.664 62.261.3 28.903 13. 10.442 36.437 Allowance for impairment losses (17.303.834. 092 0 120 Placements With Bank Indonesia and Other Banks 2a.460 42.674.5.782.2d.736) 547. 2015 (Expressed in millions of Rupiah.886.2e.2e.145) (15.580.43 8.2ah.883 Securities 2a.460 42. (772) 124.419 Securities Purchased Under Agreement to Resell 2c.318. Indonesia 4 798 9 495 Current Accounts With Other 2a.2e.754 15.316.7.306. 2g.030 *) As restated (Note 49) . 197(77) 8.771. unless otherwise stated) January 1.252) (276.981 Loans 2a.43 49.466 Allowance for impairment losses (17. 61.736. 2h.553 14.2c. 2j. Allowance for impairment losses 43 16.580. 2f.097.2f.13.43 124.125 39.2e.883 10.11 .958 4. PT BANK RAKYAT INDONESIA (PERSERO) Tbk AND ITS SUBSIDIARIES CONSOLIDATED STATEMENT OF FINANCIAL POSITION As of December 31.390 (352.2c. 43 845.42 40.2c.665 Export Bills 2c. 2t.2c. *) *) Notes 2015 2014 2013 ASSETS Cash 2a.469.815.2 Banks e.650) (246.171. ANNUAL REPORT 2015 The Biggest National Payment Bank .322.595 14.035.873.2d.2e.144.2d.2c. 43 3.293 84.10.2i.480.2c.211.435.9.183) (15.171.184.673. 10.547 84.891.143 419.355 479.43 564.599. 2d.746) .717.511.44 9. 536 4.2e.614.280.

.The accompanying notes to the consolidated financial statements form an integral part of these consolidated financial statements. PT Bank RakyaT IndonesIa (PeRseRo) TBk.

312 801. 2l.583.280 5.525.2o.648.917.688 3.684 Investment in Associated Entities 2c.872 2.972.688.831) (4.983.514.845.038 TOTAL ASSETS 878.15.792.679.984.163.43 5. PT Bank RakyaT IndonesIa (PeRseRo) TBk.2e.817.14.100.846 8.2d.16 Cost 14.17 13.43 269. 2015 (Expressed in millions of Rupiah. 2014/ December 31. unless otherwise stated) January 1.net 2c.301 8..2q.470 3.891 7.468 11. *) *) Notes 2015 2014 2013 ASSETS (continued) Acceptances Receivable 2c.624 ANNUAL REPORT 2015 The Biggest National Payment Bank These consolidated financial statements are originally issued in the Indonesian language.212 Other Assets .426.633 *) As restated (Note 49) The accompanying notes to the consolidated financial statements form an integral part of these consolidated financial statements. 2p. PT BANK RAKYAT INDONESIA (PERSERO) Tbk AND ITS SUBSIDIARIES CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued) As of December 31.851 Premises and Equipment 2n.471 6. 2m.2d.687. December 31.49 1.37c.106. .2e.774 1.039.net 2ai.004.029) Net book value 8.188) (5.573 222.665.641 Accumulated depreciation (6.2o.130 251.2e.612 Deferred Tax Assets .190 626. December 31.

234.895 12.11 445.456.526.2d.846 504.063.805 1.666. PT BANK RAKYAT INDONESIA (PERSERO) Tbk AND ITS SUBSIDIARIES CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued) As of December 31.392.2w.684 Taxes Payable 2ai.27.986. December 31.346 Subordinated Loans 2c.457.043.023.388 Time Deposits 21 267.480.753 717.679.343 89.018 Marketable Securities Issued 2c.958 15.267 78.687. ANNUAL REPORT 2015 The Biggest National Payment Bank .659 2. 41.266.29 56.884.165.377.755 Other Liabilities 2c.523 1.281.257.392 3.299.128 10.497.2r.2s. PT Bank RakyaT IndonesIa (PeRseRo) TBk.262 59.43.265 3.430.220 Securities Sold Under Agreement to Repurchase 2c.43 35.272.7.995.529. 49 8.519 210.2d.298.429. 44b 7.565.382 Deposits From Other Banks and Financial Institutions 2c. .722.379 622.084.163.102 Acceptances Payable 2c.865 232.701 - Derivatives Payable 2c.913 Estimated Losses on Commitments and Contingencies 2d. 14.064 Wadiah Demand Deposits 937.688 3.683 Wadiah Saving Deposits 3.772 5.691. unless otherwise stated) January 1.929 3.2y.2d.471 6.18 5.43 5.738 6.2l.198 373.024 TOTAL LIABILITIES 765.2d.356 546.404 283.065.24 10.2d.2al. *) *) Notes 2015 2014 2013 LIABILITIES AND EQUITY LIABILITIES Liabilities Due Immediately 2c.2u. 2015 (Expressed in millions of Rupiah.487.468 77.521.7.554 Mudharabah Saving Deposits 696.544 201.43 11.327 *) As restated (Note 49) The accompanying notes to the consolidated financial statements form an integral part of these consolidated financial statements.138.25.242 398 223 Liabilities for Employee Benefits 2d.417.655.278.26.625 These consolidated financial statements are originally issued in the Indonesian language.103 8.480.133 Fund Borrowings 2c. 43 1.862 9. 2014/ December 31.582 2.532 6.562 7.43 Demand Deposits 19 113.133 704.362.37a 1. 22.887 Saving Deposits 20 268.2ac.28.715.2v. 2e.766 Mudharabah Time Deposits 14.097.766 3.585.527 Deposits From Customers 2c.058.816 281.2t. December 31.073 8.525. 23.321.43 11.913 670.2x.242.2ah.2s.990 6.745 621.358 24.040 Total Deposits From Customers 668.

000.306 TOTAL LIABILITIES AND EQUITY 878.60.291 Additional paid-in capital 30b 2.858 2.984.705. PT BANK RAKYAT INDONESIA (PERSERO) Tbk AND ITS SUBSIDIARIES CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued) As of December 31.167.. 49 541.162.574. *) *) Notes 2015 2014 2013 LIABILITIES AND EQUITY (continued) EQUITY Capital stock .net of deferred tax 2ac.861 97.426.468 124. 2015 (Expressed in millions of Rupiah.733.005. unless otherwise stated) January 1.158.650 79.449.49 294.841 Non-controlling interest 2b.530.669.999.380 Total Retained Earnings 106.160 11.858 2.774 70.291 6.858 Differences arising from the translation of foreign currency financial statements 2ag.773.000 shares (consisting of 1 Series A Dwiwarna share and 59.468 82.411.471) (198.465 TOTAL EQUITY 113. - Retained earnings 30d Appropriated 18.147 375.145.286.115.773.669.999.069 56.021 88.184 162.614 59.161.375) . .291 6.280 73.832.000.626 ANNUAL REPORT 2015 The Biggest National Payment Bank These consolidated financial statements are originally issued in the Indonesian language. 2014/ December 31.773.000 shares (consisting of 1 Series A Dwiwarna share and 24.179 97.167.633 *) As restated (Note 49) The accompanying notes to the consolidated financial statements form an integral part of these consolidated financial statements.345 Treasury Stock 1d (2.par value Rp250 (full Rupiah) per share Authorized .190 626.888) (727.644) Gain on remeasurement defined benefit plans .30a 6.083 Unrealized loss on available for sale securities and Government Recapitalization Bonds .528 Unappropriated 49 88.617.999 Series B shares) 1.318 175.735.312 801. December 31.167.999 Series B shares) Issued and fully paid capital - 24.741 15.740.607. December 31.127.30c 49.908 Total Equity Attributable to Equity Holders of the Parent Entity 112.834 79.net of deferred tax 2h (1.100.

PT Bank RakyaT IndonesIa (PeRseRo) TBk.

ANNUAL REPORT 2015
The Biggest National Payment Bank
.627
These consolidated financial statements are originally issued in the Indonesian language.

PT BANK RAKYAT INDONESIA (PERSERO) Tbk AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME
For the Year Ended December 31, 2015
(Expressed in millions of Rupiah, unless otherwise stated)

Year Ended December 31,

*)
Notes 2015 2014
INCOME AND EXPENSES FROM
OPERATIONS
Interest, Investment and Sharia Income

Interest and investment 2z,31 83,007,745 73,065,777
Sharia income 2k,2ab,31 2,426,292 2,056,436
Total Interest, Investment and Sharia Income 85,434,037 75,122,213
Interest, Other Financing and Sharia Expense
Interest and other financing expense 2z,32 (26,141,100) (22,684,979)
Sharia expense 2ab,32 (1,013,170) (994,824)
Total Interest, Other Financing and
Sharia Expense (27,154,270) (23,679,803)

Interest Income - net 58,279,767 51,442,410
Other Operating Income
Other fees and commissions 2aa 7,355,973 6,072,460
Recovery of assets written-off 2,341,945 2,100,676
Gain on foreign exchange - net 2af,2ah 467,167 237,304
Gain on sale of securities and
Government Recapitalization
Bonds - net 2h,7,9 86,485 121,575
Unrealized gain on changes in
fair value of securities - net 2h,7 - 6,400
Others 2,157,471 760,725
Total Other Operating Income 12,409,041 9,299,140

Provision for impairment losses on
financial assets - net 2e,33 (8,891,305) (5,721,905)

Provision for allowance
for estimated losses on commitments
and contingencies - net 2al,26b (844) (175)

(Provision for) reversal of allowance for impairment
losses on non-financial assets - net 2o (8,056) 2,721

*) As restated (Note 49)

The accompanying notes to the consolidated financial statements form an integral part of these consolidated financial statements.

PT Bank RakyaT IndonesIa (PeRseRo) TBk.

520 *) As restated (Note 49) The accompanying notes to the consolidated financial statements form an integral part of these consolidated financial statements.577.850) Other Comprehensive (Loss) Income For the Year . 2015 (Expressed in millions of Rupiah.After Tax (538.512.410.158) (14. 37c.111 2.226.658) 254. .628 ANNUAL REPORT 2015 The Biggest National Payment Bank These consolidated financial statements are originally issued in the Indonesian language.571) (2.497.872.7 (10.981.547) (9.977) Income tax for item not to be reclassified to profit or loss (138.49 (7.615) Unrealized (loss) gain on available for sale securities and Government Recapitalization Bonds .776 (334.619 Income tax related to items to be reclassified to profit or loss 316.334. unless otherwise stated) Year Ended December 31.230) (6.481.916 NON OPERATING INCOME .657) Unrealized loss on changes in fair value of securities .112 TAX EXPENSE 2ai.35 (10.399) (25.275) OPERATING INCOME 30.919 TOTAL COMPREHENSIVE INCOME FOR THE YEAR 24.988.944) 83. *) Notes 2015 2014 Other Operating Expenses Salaries and employee benefits 41.130 24.184.018 30.155) Premium paid to Government Guarantee Program 45 (1.601 Other comprehensive income: Item not to be reclassified to profit or loss Remeasurement on defined benefit plans 555.030. PT BANK RAKYAT INDONESIA (PERSERO) Tbk AND ITS SUBSIDIARIES CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME (continued) For the Year Ended December 31.49 (16.422) General and administrative 2n.264.494.275.net (1.380.083.123) 709.net 2h.742 Items to be reclassified to profit or loss Exchange rate differences on translation of foreign currency financial statements (7.032 (177.041) Total Other Operating Expenses (31..196 INCOME BEFORE TAX EXPENSE 32.43.715.945) - Others (2.NET 36 1.599.296.804.907 28.511) INCOME FOR THE YEAR 25.475) (1.166.37b.788 24.696) (26.306.

.PT Bank RakyaT IndonesIa (PeRseRo) TBk.

214.48 1.59 *) As restated (Note 49) The accompanying notes to the consolidated financial statements form an integral part of these consolidated financial statements. . PT Bank RakyaT IndonesIa (PeRseRo) TBk. 2015 (Expressed in millions of Rupiah.666 TOTAL 24.130 24.466.520 BASIC EARNINGS PER SHARE ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT ENTITY (full Rupiah) 2ae.226. ANNUAL REPORT 2015 The Biggest National Payment Bank .410. *) Notes 2015 2014 INCOME FOR THE YEAR ATTRIBUTABLE TO: Equity holders of the Parent Entity 25.788 24.861.854 Non-controlling interest 11.629 These consolidated financial statements are originally issued in the Indonesian language. PT BANK RAKYAT INDONESIA (PERSERO) Tbk AND ITS SUBSIDIARIES CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME (continued) For the Year Ended December 31.397.081 24.911 Non-controlling interest 13.43 981.481.601 TOTAL COMPREHENSIVE INCOME FOR THE YEAR ATTRIBUTABLE TO: Equity holders of the Parent Entity 24.742 24.690 TOTAL 25.046 11.049 14.030.872. unless otherwise stated) Year Ended December 31.

858 82.291 2. 2013 6. 4.705.345 .348.884 Balance as of January 1.226.198 ) .Net of Benefit Plans .327. .520 PT Bank RakyaT IndonesIa (PeRseRo) TBk.147 15.911 24. . Distribution of 30d income .841 162.167.175 ) 248.005.614 97.198 ) .919 Total comprehensive income for the year 528.286 ) 246.632 (4.911 24. PT BANK RAKYAT INDONESIA (PERSERO) Tbk AND ITS SUBSIDIARIES CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the Year Ended December 31. .422 Impact of adjustment on the Implementation on SFAS No.443. unless otherwise stated) Differences Unrealized Gain Arising from (Loss) on Available the Translation for Sale Securities Gain on Issued of Foreign and Government Remeasurement Total Equity and Additional Currency Recapitalization on Defined Retained Earnings Attributable To Fully Paid Paid-in Financial Bonds .976 254.449.751 79. 24. 375.530.163.170 (1.644 ) 79.615 ) 528. 251.650 175. 270 270 Balance as of December 31.306 Income for the year . .045 ) (2.756 (251. .854 14. .083 (727. (6.214.214.184 97.291 2.911 11.858 56.411. . . . .666 24. .167. (127.045 ) (6.158.574. 2015 (Expressed in millions of Rupiah. .528 59. 2014 6.2h . 24 (Revised 2013) 49 . .671 163. 24.160 73.858 82.773.348.262) Addition to general and specific reserves .735.943 2.773.443. . (25.756 (251.481.214. . 2014 after restatement 49 6.888 ) 124.632) .466.083 (727.291 2.217 ) (6.167. . .468 (198.These consolidated financial statements are originally issued in the Indonesian language.644) 375.350.690 24.834 .773.380 79. .601 Other comprehensive income 2ag.345 11. .Net Equity Holders of Non-controlling Total Notes Capital Capital Statements Deferred Tax of Deffered Tax Appropriated Unappropriated the Parent Entity Interest Equity Balance as of December 31.465 79.

The accompanying notes to the consolidated financial statements form an integral part of these consolidated financial statements.63 ANNUAL The Biggest RE . National .

858 56.286.594 Effect of changes in non-controlling interest of BRI Agro 1f .658) Total comprehensive income for the year . . .158. (7. unless otherwise stated) Differences Unrealized Gain Arising from (Loss) on Available Gain on the Translation for Sale Securities Remeasurement Issued of Foreign and Government on Defined Total Equity and Additional Currency Recapitalization Benefit Plans Retained Earnings Attributable To Fully Paid Paid-in Financial Bonds . (2. .705. 2.397. (2.773.272. .321 . . . .495 ) (1. .583) 417.179 The accompanying notes to the consolidated financial statements form an integral part of these consolidated financial statements.666. .321 . . .397.069 (1.631 ANNUAL REPORT 2015 These consolidated financial statements are originally issued in the Indonesian language.661 ) (1. 2015 (Expressed in millions of Rupiah.594 121.581) .318 113.832.160 73.583 ) 417. .399 ) (946. .410.650 175.997 ) (538.049 24. (7.081 11. .742 25.167.530.286. . . . (7. (2.614 97.375) Balance as of December 31. .Net of Treasury Equity Holders of Non-controlling Total Notes Capital Capital Statements Deferred Tax Deffered Tax Stocks Appropriated Unappropriated the Parent Entity Interest Equity Balance as of December 31.273.375 ) .127.147 . . . . .Net of . . .861 294.741 88. (536.888 ) 124. .291 2. . 2014 (after restatement) 6.280 112. 25.858 49.320 ) (12.291 2.286.468 (2.145. . 2015 6. .375 ) 18.115.788 Other comprehensive income 2ag. .468 (198.471 ) 541.375 ) . PT BANK RAKYAT INDONESIA (PERSERO) Tbk AND ITS SUBSIDIARIES CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (continued) For the Year Ended December 31.320) Treasury Stock 1d . . - Changes in non-controlling interest from acquisition of BJS 1f . . .130 Distribution of income 30d Dividends .773.617.742 13.666. .167.184 97. .495) (7. .861.399 ) (946.581 (2. . 15.046 25.684) Addition to general and specific reserves . . 121. .834 Income for the year . .397.742 24. . . The Biggest National Payment Ba PT Bank RakyaT IndonesIa (P .2h . 25.872. (12. .286. . .189 ) (7.449. .272.

353.782.832 (48.102 (1.573) Non-operating income .932) (22.011) (7.076 10.789 31.112.092 Other liabilities 3.483 2.320 Other operating income 9.336.172 Securities sold under agreement to repurchase (4.778 Mudharabah time deposits 1.220) Sharia expenses (1.824) Recoveries of assets written-off 2.000.256) Sharia receivables and financing (1.509.908 75.229.140) 81.764.088 Deposits from other banks and financial institutions 2.013. PT BANK RAKYAT INDONESIA (PERSERO) Tbk AND ITS SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS For the Year Ended December 31.506) Increase (decrease) in operating liabilities: Liabilities due immediately (1.601.616.632 ANNUAL REPORT 2015 The Biggest National Payment Bank These consolidated financial statements are originally issued in the Indonesian language.612 2.400.198.970.127.153) (1.836 Wadiah saving deposits 417.913) Securities purchased under agreement to resell 38.056.903) 1.346 22.967.974) Saving deposits 35.899.767 2.355 Other operating expenses (25.822. 2015 (Expressed in millions of Rupiah.125 Sharia income 2.170) (994.056.292 2.158..681 4.999.281.963.878) Net Cash Provided by Operating Activities 45.533.217) Other assets (2.428 Time deposits (15.809) Cash flows before changes in operating assets and liabilities 38.000) 2.959.420) (66.408 Deposits: Demand deposits 23.636 The accompanying notes to the consolidated financial statements form an integral part of these consolidated financial statements.203 Wadiah demand deposits 315.003) 15.532) Loans (77.947 Changes in operating assets and liabilities: (Increase) decrease in operating assets: Placements with Bank Indonesia and other banks (100.426.470 (24.677) (1.137 Payment of income tax and tax bill (7. Notes 2015 2014 CASH FLOWS FROM OPERATING ACTIVITIES Income received Interest and investment income 82.481 (1.063 6.928.156.059 Export bills 3.964.382 92.992) 882.436 Expenses paid Interest expense (26.544.388.055.270 818.605.882 73.105 Mudharabah saving deposits 322.871.796 Securities and Government Recapitalization Bonds at fair value through profit or loss (800. .487.483.430) (23.net 1.456. unless otherwise stated) Year Ended December 31.573.191.101.855.563.247.371.434.595.

.PT Bank RakyaT IndonesIa (PeRseRo) TBk.

633 These consolidated financial statements are originally issued in the Indonesian language.441.504.398) (3.350.734.442) Proceeds from marketable securities issued 1.064.184.614) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from fund borrowing 9.580.731.255 Cash and cash equivalents at end of year consist of: 2a Cash 3 28.114) (2.255 The accompanying notes to the consolidated financial statements form an integral part of these consolidated financial statements. 2015 (Expressed in millions of Rupiah.019.298) 60.930.262) Payments of subordinated loans (21.285.207 2.736.286.824 Purchase of Treasury Stock (2.809 CASH AND CASH EQUIVALENTS AT END OF YEAR 163. unless otherwise stated) Year Ended December 31.800 2.671 EFFECT OF EXCHANGE RATE CHANGES ON FOREIGN CURRENCIES 12.355.718) Increase in available for sale and held to maturity securities and Government Recapitalization Bonds (53.704.649.050.767.167 Current accounts with Bank Indonesia 4 61.255 112.664 62.388.290 15.455.757 172.469.461.273.757 172.530) (24.388.798 51. ANNUAL REPORT 2015 The Biggest National Payment Bank .106.598.440 Placements with Bank Indonesia and other banks - maturing within three months or less since the acquisition date 6 49.649 NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (9.092 10.568 26.324 9.775 CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 172. .442 Certificates of Bank Indonesia and Deposits Certificates of Bank Indonesia .777 Total Cash and Cash Equivalents 163.maturing within three months or less since the acquisition date 14.059 Receipt of dividends 15 394 21 Acquisition of premises and equipment 16 (3.529 Net Cash Provided by Financing Activities 1.428.731. PT BANK RAKYAT INDONESIA (PERSERO) Tbk AND ITS SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS (continued) For the Year Ended December 31.731.375) - Dividends paid (7.154) (21.771.429 Current accounts with other banks 5 8.717.635 22.035.976) Net Cash Used in Investing Activities (56.804.628 14. Notes 2015 2014 CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of premises and equipment 36 21.677.684) (6.

.PT Bank RakyaT IndonesIa (PeRseRo) TBk.

. made by Notary Fathiah Helmi. Based on notarial deed No. 2008 of notary Fathiah Helmi. 2003. among others.J. the legal status of BRI was changed to a limited liability corporation (Persero).92 dated August 12.H.HT. BRI's scope of business is to conduct business in the banking sector. S. based on the Government of the Republic of Indonesia (the “Government”) Regulation No. 1992 of notary Muhani Salim. 86 dated October 26.HT. C-23726 HT. 11053 of the Republic of Indonesia State Gazette No. 1992. to comply with the provisions of Law No. BRI amended its Articles of Association.04. 7 dated October 3. 5/117/DPwB2/PWPwB24 dated October 15. 1 dated April 1. regarding "SK appointment of BRI as a foreign exchange commercial bank".01.03-0054353 dated April 8. BRI is owned by the Indonesian government as the majority shareholder..H. 1 year 1995 on “Limited Liability Company” that was approved by the Ministry of Justice of the Republic of Indonesia in its Decision Letter No.04.AH. among others. whose function has been transferred to the Financial Services Authority (“OJK”) starting January 1. 2015 and for the Year Then Ended (Expressed in millions of Rupiah. 88 dated November 4. 2013. 7 dated September 4.I on “The Main Provisions of the Articles of Association of a Company that Conduct Public Offering of Shares and Public Company”. On April 29. 21 year 1968. regarding the Company’s status and compliance with the Capital Market Laws which were approved by the Ministry of Justice and Human Rights of the Republic of Indonesia in its Decision Letter No.H. 2015. 68 dated August 25. C2-6584. SEKR/BRI/328 dated September 25.. 2003.01. 7216 of the Republic of Indonesia State Gazette No.. which was approved by the Ministry of Laws and Human Rights of the Republic of Indonesia in its Decision Letter No.TH.TH. 1956. AHU-48353. 2003 of notary Imas Fatimah. 73 dated September 11. Objectives and Business Activities” to comply with the provisions of Law No. 1992 and published in Supplement No. S. BRI’s Articles of Association was then amended by notarial deed No. the last amendment was documented in Deed No.01. IX. dated August 6. Subsequently.02. and was accepted and recorded in the Legal Administration System in accordance with the Decree of the Ministry of Laws and Human Rights of the Republic of Indonesia No. PT BANK RAKYAT INDONESIA (PERSERO) Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31. .634 ANNUAL REPORT 2015 The Biggest National Payment Bank These consolidated financial statements are originally issued in the Indonesian language. on the adjustment of the Articles of Association with the applicable OJK regulation. No.01. C2-24930. The change in the status of BRI to become a limited liability corporation was documented by notarial deed No. 1992.Year 2008. 51 dated May 26. 23079 of the Republic of Indonesia State Gazette No.. 1998 of notary Imas Fatimah. S. AHU-AH. 2008 and was published in Supplement No. pertaining to Article 2 on “Term of Corporate Establishment” and Article 3 on “Purpose.01. unless otherwise stated) GENERAL Establishment PT Bank Rakyat Indonesia (Persero) Tbk (hereinafter referred to as “BRI”) was established and started its commercial operations on December 18. 21 year 1992. 133 dated July 31. 2009.01. 2003 and published in Supplement No.TH. 40 year 2007 on “Limited Liability Company” and Capital Market and Financial Institution Supervisory Agency’s (“Bapepam-LK”) Regulation.H. According to Article 3 of the Articles of Association of BRI. BRI's Articles of Association has been amended several times. S.2003 dated October 6. 1999 and notarial deed No. in accordance with the prevailing law and regulations. BRI has been designated as a foreign bank through Letter of Monetary Board No. 3A of the Republic of Indonesia State Gazette No. 1968 based on Law No. Based on Bank Indonesia’s Decision Letter No. 2015. S.H.98 dated November 13. and was approved by the Ministry of Justice of the Republic of Indonesia in its Decision Letter No. by implementing the principles of Limited Liability Company. 1998 and was published in Supplement No.

.PT Bank RakyaT IndonesIa (PeRseRo) TBk.

unless otherwise stated) 1.000 in the form of Government Recapitalization Bonds issued in 2 (two) tranches at their nominal amounts of Rp20. Initial Public Offering of Shares and Stock Split In relation to BRI’s Initial Public Offering (IPO) of shares. 2003 and December 3. 2015 and for the Year Then Ended (Expressed in millions of Rupiah. 2000 (Note 9). 2003. BRI has returned the excess of recapitalization amounted to Rp85. 52 year 1999 regarding the Increase in Investments in Shares by the Republic of Indonesia in State-Owned Banks. 2003 regarding the final amount and the implementation of the Government’s rights as a result of the additional investment of the Republic of Indonesia in the capital of BRI under the recapitalization program for commercial banks. based on the registration statement dated October 31. stock split was performed of Rp500 (full Rupiah) per share to Rp250 (full Rupiah) per share.531.744. S-2646/PM/2003 dated October 31. 2003. the Government. 381.000 shares with a nominal value of Rp500 (full Rupiah) per share and with a selling price of Rp875 (full Rupiah) per share.635 These consolidated financial statements are originally issued in the Indonesian language. Subsequently.705.50% of shares of BRI.531.700 on October 31. as stated in the Management Contract dated February 28. together with over-subscription option shares and over-allotment option shares. The IPO consists of the International Public Offering (under Rule 144A of the Securities Act and “S” Regulation) and the Indonesian Public Offering.047. consisting of 2.469 in the form of Government Recapitalization Bonds to the Republic of Indonesia on November 5.063.000 Series B common shares of BRI.300 on July 25. 2003. dated November 24.060.063.AH. On November 10. the Ministry of Finance affirmed that the final recapitalization requirement of BRI amounted to Rp29. c. BRI submitted its registration to Bapepam- LK and such registration statement became effective based on the Chairman of Bapepam-LK letter No. set forth in Government Regulation No. 2003. AHU.765. 2010. 2003. After BRI’s IPO and the exercise of the over-subscription option and the over-allotment option by underwriters.000 shares under the over-allotment option at a price of Rp875 (full Rupiah) per share were exercised on November 10. the Ministry of Finance issued Decision Letter No. Recapitalization Program In realization of the recapitalization program for commercial banks. S. GENERAL (continued) b.811..764. PT BANK RAKYAT INDONESIA (PERSERO) Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31. 2001.02/2003 dated September 30. 427/KMK.404. 2000 and Rp8. acting through the Ministry of State-Owned Enterprises agreed to conduct an IPO of 3. the Republic of Indonesia owns 59.000 new Series B common shares.176.01. 2001 between the Republic of Indonesia as represented by the Government through the Ministry of Finance and BRI.10-33481 dated . Based on this Decision Letter. Furthermore.000 shares under the over-subscription option and 571.811. respectively.H. The deed was received and recorded in the Legal Administration database System of the Ministry of Laws and Human Rights of the Republic of Indonesia in its letter No. 38. BRI received all the recapitalization with a nominal amount of Rp29. ANNUAL REPORT 2015 The Biggest National Payment Bank . Therefore.000 Series B common shares owned by the Republic of Indonesia (divestment) and 1. Based on the notarial deed No. the Government determined that the recapitalization requirement amount of BRI to achieve a minimum Capital Adequacy Ratio of 4% was Rp29.765. BRI’s IPO of shares consists of 3.149. the above mentioned offered shares were initially traded at the Jakarta and Surabaya Stock Exchanges (currently the Indonesia Stock Exchange) and all shares of BRI have been simultaneously listed (Note 30b).764. notary Fathiah Helmi. On September 30.

.PT Bank RakyaT IndonesIa (PeRseRo) TBk.

000 through its letter No. Furthermore. BRI has the following networks of working unit (unaudited): December 31.000. respectively. Based on the accounting policies of BRI. Ltd. 2 (two) representative offices located in New York and Hong Kong. 2015 2014 Regional Offices 19 19 Head Inspection Office 1 1 Regional Inspection Offices 19 18 Domestic Branch Offices 462 457 Special Branch Office 1 1 Overseas Branch/Representative Offices 4 3 Sub-branch Offices 603 584 Cash Offices 983 971 BRI Unit 5.293 Teras 3..600 shares (Note 30a) and 221. As of December 31.814 employees (unaudited).000. respectively. Treasury Stock BRI through its letter No. BRI Remittance Co.375 and Rp2. 2015 and 2014. while as of December 31. 2011 and the date of commencement of legitimate trade with the new nominal value or Rp250 (full Rupiah) per share is on January 11. head of regionals.500. the coverage of BRI’s key management are boards of commissioners. namely PT Bank BRISyariah. namely PT Bank BRISyariah. PT BANK RAKYAT INDONESIA (PERSERO) Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31. the head of divisions. Ltd. and 4 (four) subsidiaries. R. Jenderal Sudirman Kav.859 and 48. 2015 and January 12. BRI submitted information disclosure to the Indonesia Stock Exchange in connection with the share repurchase plan for shares that had been issued and listed on the Stock Exchange as many as Rp2. and has been approved by OJK through its letter No. unless otherwise stated) GENERAL (continued) c. The number of BRI’s employees as of December 31. 2015. 2015 submitted a request for approval of BRI’s stock repurchase to OJK as many as Rp5. PT Bank Rakyat Indonesia Agroniaga Tbk and BRI Remittance Co. 2015 and for the Year Then Ended (Expressed in millions of Rupiah. 2014 BRI has 1 (one) overseas branch office located in the Cayman Islands..31/2015 dated October 6. 2010. e. 2016.178 3.000 shares (nominal value of Rp250 per share) with acquisition cost of Rp2. head of special branch and head of branch. . The buyback is carried out within a period of 3 months between October 12. directors. 44-46. head of internal audit and inspectors. Stock split was performed in 2011 and BRI schedule that the end of trading shares with a previous nominal value or Rp500 (full Rupiah) per share in Regular and Negotiation Market is on January 10. 2015.718.636 ANNUAL REPORT 2015 The Biggest National Payment Bank These consolidated financial statements are originally issued in the Indonesian language. Structure and Management BRI’s head office is located at BRI I Building. Initial Public Offering of Shares and Stock Split (continued) December 29. 2016. 2015 until January 12.286.118. audit committee. Jakarta. d. Jl. and 3 (three) subsidiaries. S-101/PB. remuneration committee. December 31.947. 2015 BRI has 2 (two) overseas branch offices located in the Cayman Islands and Singapore.224-DIR/DIS/09/2015 dated September 25. PT Bank Rakyat Indonesia Agroniaga Tbk.418. 2015 and 2014 amounted to 54. 2011. BRI purchased 210. Hong Kong and PT Asuransi Jiwa Bringin Jiwa Sejahtera.360 5.067 Floating Teras 1 - As of December 31. Hong Kong. 2 (two) representative offices located in New York and Hong Kong.. B.696-DIR/SKP/10/2015 dated October 9. As of December 31.

.PT Bank RakyaT IndonesIa (PeRseRo) TBk.

are as follows: December 31. S. Structure and Management (continued) The composition of the Board of Commissioners of BRI as of December 31. Suprajarto The composition of BRI’s Audit Committee as of December 31. 2012. 2015 appointed based on the minutes of BRI’s Extraordinary Shareholders’ General Meeting held on August 12. 2014 President/Independent Commissioner : Mustafa Abubakar Bunasor Sanim Vice President Commissioner : Gatot Trihargo Mustafa Abubakar*) Independent Commissioner : Adhyaksa Dault Adhyaksa Dault Independent Commissioner : Ahmad Fuad Ahmad Fuad Independent Commissioner : Fuad Rahmany Hermanto Siregar Independent Commissioner : A. are as follows: December 31. 2015. 12 of Notary Fathiah Helmi. S. 2014 appointed based on the minutes of BRI’s Annual Shareholders’ General Meeting held on March 28. 2015. 2015 and for the Year Then Ended (Expressed in millions of Rupiah. 2014 are as follows: .. B. H. 2014 and Commissioners’ Decision Letter No.. Wurangian Dwijanti Tjahjaningsih *) Concurrently as Vice President Commissioner and Independent Commissioner The composition of the Board of Directors of BRI as of December 31. 2014. as stated under the Notarial Deed No. 57 of Notary Fathiah Helmi. 549-DIR/KPS/10/2014 dated October 7. 2014 President Director : Asmawi Syam Sofyan Basir Vice President Director : Sunarso - Director : Agus Toni Soetirto Sarwono Sudarto Director : Randi Anto Achmad Baiquni Director : Gatot Mardiwasisto Sulaiman Arif Arianto Director : Mohammad Irfan Randi Anto Director : Zulhelfi Abidin Agus Toni Soetirto Director : Susy Liestiowaty Lenny Sugihat Director : Donsuwan Simatupang Djarot Kusumayakti Director : Haru Koesmahargyo Asmawi Syam Director : Kuswiyoto Gatot Mardiwasisto Director : .H. Sonny Keraf Heru Lelono Commissioner : Vincentius Sonny Loho Vincentius Sonny Loho Commissioner : Jeffry J. 281-DIR/KPS/06/2015 dated June 15. 2014 appointed based on the minutes of BRI’s Extraordinary Shareholders’ General Meeting held on July 10.43-KOM/04/2015 dated April 7. S. as stated under the Notarial Deed No. as stated under the Notarial Deed No. 10 of Notary Fathiah Helmi.637 These consolidated financial statements are originally issued in the Indonesian language. 2014 appointed based on BRI’s Directors’ Decision Letter No. 2015. 110-KOM/08/2014 dated August 20.H. as stated under the Notarial Deed No. GENERAL (continued) e. Kep. PT BANK RAKYAT INDONESIA (PERSERO) Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31. S. ANNUAL REPORT 2015 The Biggest National Payment Bank . 2015 December 31. 2015 December 31... 2015 appointed based on BRI’s Directors’ Decision Letter No. 12 of Notary Fathiah Helmi. B. and as of December 31. while the composition of the Board of Commissioners of BRI as of December 31. Kep. unless otherwise stated) 1. H. 2015 appointed based on the minutes of BRI’s Extraordinary Shareholders’ General Meeting held on August 12. and the composition of the Board of Directors of BRI as of December 31. 2015 and Commissioners’ Decision Letter No.

PT Bank RakyaT IndonesIa (PeRseRo) TBk. .

Kep..18/Dir. As a result of the spin-off as of the effective date: 1. 2008 of notary Fathiah Helmi. 2. respectively. as stated under the notarial deed No. respectively. Based on the Governor of Bank Indonesia’s Decision Letter No. Based on BRI’s Shareholders’ Extraordinary General Meeting. Based on notarial deed No. GENERAL (continued) e.99875% of the issued shares of BJA and 0. respectively. Kpts.638 ANNUAL REPORT 2015 The Biggest National Payment Bank These consolidated financial statements are originally issued in the Indonesian language. 2015 and BRI’s Director Decision Letter No. 27. 887-DIR/KPS/12/2015 dated December 21. loss and responsibility. whereby BRI acquired 99. 45 dated April 22. 2014. Subsidiaries PT Bank BRISyariah On June 29. dated December 19. C. H. Royke Singgih Member : . PT BANK RAKYAT INDONESIA (PERSERO) Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31. Kep. 10/67/KEP. Kep. All of the UUS BRI’s operations. 2015 and for the Year Then Ended (Expressed in millions of Rupiah. unless otherwise stated) 1. respectively. 9/1326/DPIP/Prz dated December 28. BRI has entered into a spin-off agreement to transfer the assets and liabilities of BRI’s Sharia Business Unit (“UUS BRI”) to BSB. the Corporate Secretary of BRI are Hari Siaga Amijarso and Budi Satria.GBI/DpG/2008 dated October 16. 2007 based on Acquisition Deed No. 9/188/GBI/DPIP/Rahasia dated December 18. f. 61 of notary Imas Fatimah. the Internal Audit Task Force Head are Saptono Siwi and Ali Mudin. 2014 Chairman : Fuad Rahmany Bunasor Sanim Member : Adhyaksa Dault Adhyaksa Dault Member : A.. S. 626-DIR/KPS/10/2015 dated October 22. As of December 31. The acquisition was completed on December 19. 2008. BSB obtained the approval to change its business activities from a conventional bank into a commercial bank that conducts business activities based on Sharia principles. 2007. based on notarial deed No. 2015 and 2014. based on Directors’ Decision Letter No. with effective date on January 1. All assets and liabilities of UUS BRI in possession of BRI by operation of law were transferred and become the rights.H. 2007. 2009. according to letters No..H. 2007 of notary Imas Fatimah. BSB was obliged to perform its business activities based on Sharia principles and within a maximum of 360 (three hundred sixty) days from the decision date. 2015 and Directors’ Decision Letter No. 2015 December 31. 2007 and No. Structure and Management (continued) December 31. liabilities or expenditures to be operated under BSB’s responsibility as the receiving entity. S. 2008.H. Within 60 (sixty) days from the decision date. the name BJA was changed into PT Bank Syariah BRI (“BSB”). 2015 and 2014. the shareholders approved the above acquisition of BJA and subsequently obtained the approval of Bank Indonesia. 3 dated September 5. S. 2011. S.01. . BSB was obliged to settle all its loan receivables and debtor or customer liabilities from the previous conventional banking activities. business and office activities by operation of law were transferred to and/or operated under BSB’s benefit.H. based on BRI’s Director Decision Letter No. On December 19. Dedi Budiman Hakim Member : Syahrir Nasution Syahrir Nasution As of December 31. Sonny Keraf Hermanto Siregar Member : .03/VII/2011 dated July 5.00125% was granted to BRI’s Employee Welfare Foundation (Yayasan Kesejahteraan Pekerja BRI). 2008 on “The Spin-Off Agreement of BRI’s Sharia Business Unit into PT Bank Syariah BRI” of notary Fathiah Helmi. 250-DIR/KPS/05/2014 dated May 8.. BRI entered into a Sale and Purchase of Shares Agreement with the shareholders of PT Bank Jasa Arta (“BJA”) to acquire 100% of BJA’s shares at a purchase price of Rp61 billion..

.PT Bank RakyaT IndonesIa (PeRseRo) TBk.

BRIS’ Articles of Association has been amended several times. Subsidiaries (continued) PT Bank BRISyariah (continued) 3. 14% by Dapenbun and 10% by the public. of the consolidated total assets. as stated in notarial deed No. 2015. 1 of notary Fathiah Helmi. After the acquisition.292 and Rp2. 2011.. and has 52 domestic branch offices and 208 sub-branch offices. 14 of notary Fathiah Helmi. All of the UUS BRI’s rights.749 employees (unaudited) as of December 31.H.056.639 These consolidated financial statements are originally issued in the Indonesian language.030.245. S. The above mentioned matter also considered the effects of Series I Warrants which are exercisable up to May 25. . dated August 4. 11/63/KEP. 37 dated November 24. as the owner of 95. 18 of notary Fathiah Helmi. the scope of BRIS’ business is to conduct banking business based on Sharia principles.96% shares of BRI Agro. The latest amendment was documented in PT Bank BRISyariah’s Shareholders’ Statements of Agreement as stated in notarial deed No. claims. 2015. of notary Rusnaldy.03-0954202 dated August 4. BRISyariah has 2. The shareholders approved the acquisition of BRI Agro based on BRI’s Shareholders’ Extraordinary General Meeting according to notarial deed No. 2-4. notary in Jakarta. BRISyariah’s head office is located at Jl. performed. dated April 14. 2015 and for the Year Then Ended (Expressed in millions of Rupiah. respectively. The acquisition was completed on March 3. GENERAL (continued) f. Abdul Muis No. to acquire the shares of BRI Agro with total nominal value of Rp330. regarding the addition of the issued and fully paid capital. of the consolidated interest income. 2011 based on the notarial deed No.84% and 2. 2009.426. PT BANK RAKYAT INDONESIA (PERSERO) Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31. actions or existing which were made. the name of PT Bank Syariah BRI was changed to PT Bank BRISyariah (“BRIS”) as approved by the Governor of Bank Indonesia’s Decision Letter No. have been transferred to and or operated under BSB’s benefit. 2011. ANNUAL REPORT 2015 The Biggest National Payment Bank . Bank Indonesia also granted approval of the acquisition in its Letter No. 68 dated December 29. authorities and liabilities based on any agreements. 2010. PT Bank Rakyat Indonesia Agroniaga Tbk (BRI Agro) On August 19. loss and responsibility.602. 2015 and 2014. S. is amounted to Rp2. The amendment was accepted and recorded by the Ministry of Laws and Human Rights of the Republic of Indonesia No. Total sharia income for the year ended December 31. respectively.H.54%. 2009.033 or 2.GBI/DpG/2009 dated December 15. the shareholdings of BRI Agro’s investors comprise of 76% by BRI.. 2010 of notary Fathiah Helmi. BRI entered into Sale and Purchase of Shares Agreement (PPJB) with the Agricultural Estate Pension Fund (Dapenbun). According to Article 3 of BRIS’ latest Articles of Association. AHU-AH. respectively.65% of the total issued and fully paid shares of BRI Agro. Based on BSB’s Shareholders’ Statements of Agreement as stated in notarial deed No. or which occurred on or before the effective date of the spin-off including but not limited to the stated list of assets and liabilities of UUS BRI and all legal relations between UUS BRI and other parties by operation of law.76% and 2.788 and Rp20. unless otherwise stated) 1.74%. or 2.H. 2015 and 2014.023 number of shares at a price of Rp109 (full Rupiah) per share.997 and 2. 13/19/GBI/DPIP/Rahasia dated February 16. S.H. S.01. 2015 and 2014.239.H. S. Central Jakarta. 2009. Total assets of BRIS as of December 31.296 for 3. whereby BRI owned 88..341. is amounted to Rp24.

.PT Bank RakyaT IndonesIa (PeRseRo) TBk.

This amendment was approved by the Ministry of Laws and Human Rights of the Republic of Indonesia in its Decision Letter No. Based on Bapepam-LK’s Regulation No. 107 dated July 30.AH. reducing BRI’s ownership to 79. 2013. S. 2011. S-4985/BL/2011 and was announced on two daily newspapers. 2013. both on May 5.78% while maintaining Dapenbun’s ownership at 14%. . of Notary M.375. 2011 of 10% by May 24..640 ANNUAL REPORT 2015 The Biggest National Payment Bank These consolidated financial statements are originally issued in the Indonesian language. S-186/D.. the re-transfer period of the Tender Offer is within a maximum period of 2 (two) years. 2011 and concluded on May 24. thus.832. BRI shall meet the minimum public shareholding of 10% no later than May 24. 2011.H. thus increasing the number of its issued capital stock by 3. BRI Agro submitted Registration Statement of Limited Public Offering IV (“PUT IV”) to the Board of Commissioners of OJK in connection with the issuance of Preemptive Rights of 3. 2014. IX. 2013. IX. Nova Faisal.1. On July 1.04/2013. Kep-259/BL/2008 dated June 30. 2011. 2011. increasing BRI’s ownership to 80.09. On June 26. As of December 31. 30 dated May 16. regarding the increase of issued and fully paid capital.326. The Tender Offer statement became effective May 4. S-06472/BEI. as of December 31. S. 2011.599 Common Shares with par value of Rp100 (full amount) per share.PPJ/09-2011 dated September 23. Dapenbun to 14. approved the Statement of Registration for a Limited Public Offering IV.55%. S-06472/BEI.GBI/2012 dated October 10.H. During 2012 and 2013 there were no sale of shares occured. 2012.599 shares. unless otherwise stated) GENERAL (continued) f. in the case of BRI Agro. 14/72/KEP. 2015 and for the Year Then Ended (Expressed in millions of Rupiah.500 additional shares (3.02% and public to 5. however.H.H. BRI Agro’s Articles of Association was amended as stated in notarial deed of Decision Meeting Statement No. On the closing date of the Tender Offer period.PPJ/09-2011 dated September 23. total shares of BRI Agro which has been transferred back to the public comprised of 500. whereas subsequently in 2014 there is a sale of 130. BRI acquired 113.035. Based on the notarial deed of Statement Decision Meeting No.1. 2008 regarding “Public Company Takeovers”. Attachment to Decision of Chairman of Bapepam-LK No.685. is required to conduct mandatory Tender Offer for the remaining BRI Agro’s shares which are owned by the public. PT Bank Agroniaga Tbk changed its name to PT Bank Rakyat Indonesia Agroniaga Tbk ("BRI Agro") and has been approved by Bank Indonesia on its Governor's Decision Letter No. The Tender Offer period commenced on May 5. 2012 of notary Rusnaldy.000 shares. Subsidiaries (continued) PT Bank Rakyat Indonesia Agroniaga Tbk (BRI Agro) (continued) In compliance with Bapepam-LK’s Regulation No. M. As a results of PUT IV. 2013. the required percentage of public ownership based on the Indonesia Stock Exchange Letter No.502 shares to Dapenbun as a result of Dapenbun’s exercise of its buy option at a price of Rp109 (full Rupiah) per share. On May 10. BRI. Bisnis Indonesia and Investor Daily. 2011 based on Chairman of Bapepam-LK’s letter No. AHU- 0074249..01.43%.Kn. This is in compliance with the letter received from the Indonesia Stock Exchange No. BRI enacted the sale of 256.15% of the total shares of BRI Agro). 2013 could not be met by BRI due to BRI Agro’s inactive share prices in the stock market.Year 2013 dated August 1.846.000 shares. 2013. as the new controlling shareholder of BRI Agro. PT BANK RAKYAT INDONESIA (PERSERO) Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31. The price used for the Tender Offer is at Rp182 (full Rupiah) per share. the Board of Commissioners of OJK through its letter No.

.PT Bank RakyaT IndonesIa (PeRseRo) TBk.

of the consolidated total assets. AHU-AH. As a results of PUT V. 2015 and for the Year Then Ended (Expressed in millions of Rupiah. 2015. S.92% and 0.521 shares. and has 16 branch offices and 17 sub-branch offices.344 or 0. Total interest income for the year ended December 31. increasing BRI’s ownership to 87. based on Letter of Bank Indonesia No. BRI Agro. According to the Annual General Meeting of BRIngin Remittance Co.710 and Rp598.H. 2011. Dapenbun to 9.04/2015 notified BRI Agro that its Statement of Registration for a Limited Public Offering V has become effective.735 and Rp6.600. 13/32/DPB1/TPB1-3/Rahasia dated December 1. BRI Remittance Co.946 or 0.01. PT BANK RAKYAT INDONESIA (PERSERO) Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31.270. BRI Agro submitted Registration Statement of Limited Public Offering V (“PUT V”) to the Board of Commissioners of OJK in connection with the issuance of Preemptive Rights of 5.832 or 0. respectively.934. respectively. Ltd dated July 2..588. BRI Remittance’s scope of business is to conduct commercial remittance activities.000 shares) at a purchase price of HKD1. (BRC) Hong Kong shares (equivalent to 1.23%. Total assets of BRI Remittance as of December 31. Jakarta. respectively. 2012 by the Registrar of Companies Hong Kong Special Administrative Region. BRI Agro's head office is located at Agro Plaza. M. 2015. unless otherwise stated) 1. GENERAL (continued) f. 2012.361.95% and 0. Ltd Hong Kong. Ltd. of the consolidated total assets.R.085. S-259/D. ANNUAL REPORT 2015 The Biggest National Payment Bank . 1.388.0007% and Rp4. This amendment was accepted and recorded by the Ministry of Laws and Human Rights of the Republic of Indonesia in its Acceptance Letter of PT Bank Rakyat Indonesia Agroniaga Tbk Articles of Association Amendment Notice No.305 or 0. Subsidiaries (continued) PT Bank Rakyat Indonesia Agroniaga Tbk (BRI Agro) (continued) On May 11.0006%. Rasuna Said Blok X2 No. the name BRIngin Remittance Co.10% and public to 3. Ltd was officially changed to BRI Remittance Co. This acquisition was legalized by the Inland Revenue Department (IRD) Hong Kong with stamp duty dated December 28. of Notary M. Nova Faisal.80%. respectively.883 Common Shares with par value of Rp100 (full amount) per share. In accordance with Article 3 of its Articles of Association. . 2015. 2015 and 2014 is amounted to Rp8. regarding the increase of issued and fully paid capital. of the consolidated interest income. 2015.Kn.028. Jl. obtained its license as a commercial bank. 22/1037/UUps/Ps6D dated December 26. Total assets of BRI Agro as of December 31. 68 dated July 14. 2011.911. 2011 and approved by Bank Indonesia in its letter No. 2015 and 2014 is amounted to Rp786. BRI entered into the Instrument of Transfer and the Bought and Sold Notes to acquire 100% of BRIngin Remittance Co. H. BRI Agro’s scope of business is to conduct commercial banking activities. and the issuance of a Certificate of Change of Name No.641 These consolidated financial statements are originally issued in the Indonesian language.67%.80%. 1989. 2015 and 2014 is amounted to Rp5.03-0951264 dated July 14. 2015 and 2014. BRI Agro’s Articles of Association was amended as stated in notarial deed of Decision Meeting Statement and Amendment of Articles of Association No. On June 17. BRI Agro has 398 and 366 employees (unaudited) as of December 31. the Board of Commissioners of OJK through its letter No. Limited Hong Kong (BRI Remittance) On December 16. thus increasing the number of its issued capital stock by 4. 961091 dated October 11.

PT Bank RakyaT IndonesIa (PeRseRo) TBk. .

31/2015 dated December 23. 2015 and for the Year Then Ended (Expressed in millions of Rupiah.H. 2015 based on Deed No..03-0956295 dated August 12.627 billion. 2015. The amendment was accepted and recorded by the Ministry of Laws and Human Rights of the Republic of Indonesia in its Decision Letter No. Subsidiaries (continued) BRI Remittance Co. The acquisition was completed on December 29. the scope of BJS’ business is to conduct business in the life insurance sector. BJS’ Articles of Association has been amended several times. S-151/PB. respectively. The latest amendment was documented in Notarial Deed No. BRI has signed the Sale and Purchase of Shares Agreement with the shareholders of PT Asuransi Jiwa Bringin Jiwa Sejahtera ("BJS") to acquire 91. S. regarding the acquisition of shares. 89 Queensway. 2015. and has 6 regional offices with a total of as many as 41 conventional sales offices and 11 sharia unit sales offices.73% shares in PT BPR Bringin Dana Sejahtera ("BDS") which engaged in the Rural Bank sectors and started its operational activities in 1973..764 or 0. Limited Hong Kong (BRI Remittance) (lanjutan) BRI Remittance has 4 employees (unaudited) as of December 31.038.57%.R Rasuna Said Blok X-1 Kav 1 and 2. 41 of notary Fathiah Helmi. 14 dated December 14. 2015. 2015.001% of the total issued shares of BJS and 8.999% of it submitted to the BRI Workers Welfare Foundation. 2015 of notary Fathiah Helmi. According to Article 3 of BJS’ latest Articles of Association.. Admiralty. the shareholders have approved the acquisition of the BJS and has also received approval from OJK through its letter No. 2015.642 ANNUAL REPORT 2015 The Biggest National Payment Bank These consolidated financial statements are originally issued in the Indonesian language. BJS has a 99.M Hum. 15 dated July 13. . is amounted to Rp5. Hong Kong. H. of the consolidated total assets. unless otherwise stated) GENERAL (continued) f. amendment to the Articles of Association and changes in the Company's Management. S. BJS has 388 employees (unaudited) as of December 31. notary in South Jakarta.. Based on BRI’s Extraordinary Shareholders’ General Meeting in accordance with the Deed No. AHU. th BJS’ head office is located at Graha Irama Building 15 floor Jl.001% shares of BJS at a purchase price amounting to Rp1. whereby BRI has 91. Tower II. Jakarta. 2015. Total assets of BJS as of December 31.H. PT BANK RAKYAT INDONESIA (PERSERO) Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31. 2015 and 2014. of notary Yulizar Azhar S. BRI Remittance’s head office is located at Lippo Centre.01.H. PT Asuransi Jiwa Bringin Jiwa Sejahtera On October 6. on the Acquisition of Shares in PT Asuransi Jiwa Bringin Jiwa Sejahtera.

PT Bank RakyaT IndonesIa (PeRseRo) TBk. .

. except for some accounts that were assessed using another measurement basis as explained in the accounting policies of the account. unless otherwise stated) 2.643 These consolidated financial statements are originally issued in the Indonesian language. 2015 and 2014 were prepared and presented in accordance with Indonesian Financial Accounting Standards. The implementation of this standard has no significant impact to the financial reporting and disclosures in the consolidated financial statement. which includes the Statements and Interpretations issued by the Financial Accounting Standards Board of the Indonesian Institute of Accountants and Bapepam-LK’s Regulation No. cash and cash equivalents consist of cash. 1 (Revised 2013). provided they are neither pledged as collateral for fund borrowings nor restricted.G. For purposes of the consolidated statement of cash flows. Certificates of Bank Indonesia and Deposits Certificates of Bank Indonesia maturing within 3 (three) months from the date of acquisition. 2012 regarding the “Guidelines on Financial Statements Presentations and Disclosures for Issuers or Public Companies”. Principles of Consolidation The consolidated financial statements include the financial statements of BRI and its Subsidiaries whose majority shares are owned or controlled by BRI. placements with Bank Indonesia and other banks. 59 on “Accounting for Sharia Banking” associated with recognition. SFAS No. The consolidated financial statements have been prepared in accordance with SFAS No. except for the revenue from istishna and the profit sharing from the Mudharabah and musyarakah financing and the consolidated statement of cash flows. 101 on “Sharia Financial Statements Presentation”. SFAS No. Basis of preparation of the consolidated financial statements Statement of Compliance The consolidated financial statements as of and for the years ended December 31. SFAS No. KEP-347/BL/2012 dated June 25. 110 on “Accounting for Sukuk” and the Indonesia Sharia Banking Accounting Guidelines (PAPSI) issued by Bank Indonesia and Indonesian Institute of Accountants (IAI). SFAS No. BRIS (Subsidiary). Appendix of the Decision of the Chairman of Bapepam-LK No. "Consolidated Financial Statements". Unless otherwise stated. Effective January 1. “Presentation of Financial Statements” effective since January 1. SUMMARY OF ACCOUNTING POLICIES a. measurement. the results of operations of a Subsidiary are included in the consolidated financial statements only from the date that control was acquired or up to the date that control has ceased. The presentation currency used in the consolidated financial statements is the Indonesian Rupiah (Rp). b. PT BANK RAKYAT INDONESIA (PERSERO) Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31. Where control over a subsidiary began or ceased during the year. 65. which is engaged in banking activities based on Sharia principles. presentation and disclosure for the respective topics. 2015. current accounts with Bank Indonesia and current accounts with other banks. BRI implemented SFAS No. ANNUAL REPORT 2015 The Biggest National Payment Bank . 2015. 2015 and for the Year Then Ended (Expressed in millions of Rupiah. The consolidated financial statements have been prepared on accrual basis. investing and financing activities. The consolidated financial statements have been prepared on a historical cost basis. 104 on “Accounting for Istishna”. 102 (Revised 2013) on “Accounting for Murabahah”. VIII.7. presents its financial statements according to SFAS No. 105 on “Accounting for Mudharabah”. 107 on “Accounting for Ijarah”. 106 on “Accounting for Musyarakah” and SFAS No. SFAS No. The consolidated statement of cash flows has been prepared using the direct method with cash flows classified into operating. which supersede SFAS No. all figures presented in the consolidated financial statements are rounded off to millions of Rupiah.

PT Bank RakyaT IndonesIa (PeRseRo) TBk. .

The implementation of the SFAS defines fair value. a framework to measure fair value and requires disclosures on fair value measurement. If the Subsidiaries’ financial statements use accounting policies which are different from those adopted in the consolidated financial statements. Government Recapitalization Bonds. PT BANK RAKYAT INDONESIA (PERSERO) Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31. investment in entities at cost method and other assets. including unrealized gains/losses are eliminated to reflect the consolidated financial position and results of operations of BRI and Subsidiaries as a single entity. 60 (Revised 2014). acceptances receivable. Effective on January 1. The implementation of the SFAS has no significant impact to the financial reporting and disclosures in the consolidated financial statement. 68. 2015. 50 (Revised 2014). current accounts with other banks. establish in a statement. "Financial Instruments: Presentation". The implementation of the SFAS has no significant impact to the financial reporting and disclosures in the consolidated financial statement. BRI implemented SFAS No. or has rights to variable returns from its involvement with a subsidiary and has the ability to affect those returns through its power over a subsidiary. export bills. BRI implemented SFAS No. The consolidated financial statements are prepared using uniform accounting policies for transactions and events in similar circumstances. Effective on January 1. BRI implemented SFAS No. BRI implemented SFAS No. SUMMARY OF ACCOUNTING POLICIES (continued) b. loans. Effective on January 1. "Fair Value Measurement". appropriate adjustments are made to the Subsidiaries’ financial statements. Financial assets consist of cash. derivatives receivable. The non-controlling interest represents the non-controlling shareholders’ proportionate share in the net income and equity of the Subsidiaries based on the percentage of ownership of the non- controlling shareholders in the Subsidiaries. Principles of Consolidation (continued) Control is acquired when BRI is exposed. unless otherwise stated) 2. c) The ability to use its power over the subsidiary to affect BRI’s returns. "Financial Instruments: Recognition and Measurement". c. 2015.. 55 (Revised 2014). 2015. or rights to variable returns from its involvement with a subsidiary. 2015. 2015 and for the Year Then Ended (Expressed in millions of Rupiah. Financial assets and financial liabilities Effective on January 1. current accounts with Bank Indonesia. placements with Bank Indonesia and other banks. The implementation of the SFAS has no significant impact to the financial reporting and disclosures in the consolidated financial statement. BRI has the following: a) Power over a subsidiary (existing rights that provide the current ability to direct the relevant activities that significantly affect returns of a subsidiary).644 ANNUAL REPORT 2015 The Biggest National Payment Bank These consolidated financial statements are originally issued in the Indonesian language. . securities purchased under agreement to resell. All significant balances and transactions. securities. and only if. b) Exposure. "Financial Instruments: Disclosures". BRI controls a subsidiary if.

PT Bank RakyaT IndonesIa (PeRseRo) TBk. .

e. Loans and receivables are non-derivatives financial assets with fixed or determinable payments that are not quoted in an active market.  Held to maturity investments. other than because of loans and receivables deterioration. unless otherwise stated) 2. and  Available for sale investments Financial liabilities are classified into the following categories at initial recognition:  Fair value through profit or loss.  those that BRI upon initial recognition designates as available for sale investments. . PT BANK RAKYAT INDONESIA (PERSERO) Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31. SUMMARY OF ACCOUNTING POLICIES (continued) c. Financial assets and financial liabilities (continued) Financial liabilities consist of liabilities due immediately. deposits from customers. ANNUAL REPORT 2015 The Biggest National Payment Bank . or holds as part of a financial instrument portfolio that is managed together for short-term profit or position taking. acceptances payable. which classified as available for sale. deposits from other banks and financial institutions. (i) Classification BRI classifies its financial assets in the following categories at initial recognition:  Financial assets held at fair value through profit or loss. other than:  those that BRI intends to sell immediately or in the short term.  Other financial liabilities that are not classified as financial liabilities at fair value through profit or loss are categorized and measured at amortized cost. which are classified as held for trading and those that BRI upon initial recognition designates as at fair value through profit or loss. i.645 These consolidated financial statements are originally issued in the Indonesian language. Held to maturity investments consist of quoted non-derivatives financial assets with fixed or determinable payments and fixed maturity that BRI has the positive intention and ability to hold to maturity. marketable securities issued.  Loans and receivables. 2015 and for the Year Then Ended (Expressed in millions of Rupiah. derivatives payable. fund borrowings. which has 2 (two) sub-classifications. i. or  those for which BRI may not recover substantially all of its initial investment. which have 2 (two) sub- classifications. those designated as such upon initial recognition and those classified as held for trading. financial assets designated as such upon initial recognition and financial assets classified as held for trading. Classes of financial assets and liabilities at fair value through profit or loss consist of financial assets or liabilities held for trading which BRI acquires or incurs principally for the purpose of selling or repurchasing in the near term. securities sold under agreement to repurchase. Investments intended to be held for an undetermined period are not included in this classification. other liabilities and subordinated loans.e.

.PT Bank RakyaT IndonesIa (PeRseRo) TBk.

transaction costs are deducted from the amount of debt recognized on initial recognition of a liability. Other financial liabilities pertain to financial liabilities that are neither held for trading nor designated at fair value through profit or loss upon recognition of the liability. or  the financial assets consist of a host contract and embedded derivatives that must be bifurcated.646 ANNUAL REPORT 2015 The Biggest National Payment Bank These consolidated financial statements are originally issued in the Indonesian language. For those financial assets or financial liabilities not measured at fair value through profit or loss. available for sale investments are measured at fair value with gains or losses being recognized as part of equity until the investment is derecognized or until the investment is determined to be impaired at which time the cumulative gains or losses previously reported in equity is included in the consolidated statement of profit or loss and other comprehensive income. or  the financial assets are part of a portfolio of financial instruments. may designate certain financial assets at fair value through profit or loss (fair value option). b. The transaction costs are amortized over the terms of the instrument based on the effective interest rate method and recorded as part of interest income for transaction costs related to the asset or as part of interest expense for transaction costs related to financial liabilities. Purchase or sale of financial assets that requires delivery of assets within a time frame established by regulation or convention in the market (regular purchases) is recognized on the settlement date. . The effective yield and (where applicable) results of foreign exchange restatement for available for sale investments are reported in the consolidated statement of profit or loss and other comprehensive income. The fair value option is only applied when the following conditions are met:  the application of the fair value option reduces or eliminates an accounting mismatch that would otherwise arise. 2015 and for the Year Then Ended (Expressed in millions of Rupiah. the fair value includes directly attributable transaction costs. transaction costs are added to the amount recognized in the initial recognition of the asset. while for financial liabilities. the risk of which are managed and reported to key management on a fair value basis. PT BANK RAKYAT INDONESIA (PERSERO) Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31. For financial assets. Financial assets and financial liabilities are initially recognized at fair value.. unless otherwise stated) 2. After initial recognition. upon initial recognition. BRI. SUMMARY OF ACCOUNTING POLICIES (continued) c. Financial assets and financial liabilities (continued) (i) Classification (continued) The available for sale category consists of non-derivatives financial assets that are designated as available for sale or are not classified in one of the other categories of financial assets. The subsequent measurement of financial assets and financial liabilities depends on their classification. (ii) Initial recognition a. Transaction costs only include costs that are directly attributable to the acquisition of a financial asset or issuance of a financial liability and an additional charge that would not occur if the instrument is not acquired or issued.

.PT Bank RakyaT IndonesIa (PeRseRo) TBk.

unless otherwise stated) 2. i. or  BRI has transferred its rights to receive cash flows from the financial assets or has assumed an obligation to pay the cash flows in full without material delay to a third party under a “pass-through” arrangement. b. and either (a) BRI has substantially transferred all the risks and rewards of the assets. the loans would be accounted for at amortized cost. Financial assets are derecognized when:  the contractual rights to receive cash flows from the financial assets have expired. The fair value option is also applied to investment funds that are part of a portfolio managed on a fair value basis. Furthermore. SUMMARY OF ACCOUNTING POLICIES (continued) c. 2015 and for the Year Then Ended (Expressed in millions of Rupiah. Financial assets and financial liabilities (continued) (ii) Initial recognition (continued) The fair value option is applied to certain loans and receivables that are hedged with credit derivatives or interest rate swap. when the obligation under the liability is discharged. but has transferred control of the assets.e. PT BANK RAKYAT INDONESIA (PERSERO) Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31. (iv) Derecognition a. Loans and receivables. the asset is recognized to the extent of BRI’s continuing involvement in the asset. Loans are written off when there is no realistic prospect of collection in the near future or the normal relationship between BRI and the debtors has ceased to exist. When BRI has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement and has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset. Otherwise. while the derivatives are measured at fair value through profit or loss. or (b) BRI has neither transferred nor retained substantially all risks and rewards of the assets. cancelled or expired. . it is written off against the related allowance for impairment losses. but for which the hedge accounting conditions are not fulfilled. the fair value option is applied to structured investments that include embedded derivatives. When a loan is deemed uncollectible. Financial liabilities are derecognized when they end. held to maturity investments and financial liabilities measured at amortized cost are measured at amortized cost using the effective interest rate method. ANNUAL REPORT 2015 The Biggest National Payment Bank .647 These consolidated financial statements are originally issued in the Indonesian language. (iii) Subsequent measurement Available for sale financial assets and financial assets and liabilities at fair value through profit or loss are subsequently measured at fair value.

PT Bank RakyaT IndonesIa (PeRseRo) TBk. .

are attributable to an isolated event that is beyond BRI’s control.. BRI is not allowed to classify any financial assets as held to maturity investments. 2015 and for the Year Then Ended (Expressed in millions of Rupiah. are so close to maturity or the financial asset’s repurchase date that changes in the market rate of interest would not have a significant effect on the financial asset’s fair value. unless otherwise stated) 2. except for impairment losses and foreign exchange gains and losses. Gains and losses arising from changes in the fair value of the financial assets and liabilities held at fair value through profit or loss are included in the consolidated statement of profit or loss and other comprehensive income. or c. Interest income and interest expense on available for sale assets and financial assets and liabilities measured at amortized cost. if upon initial recognition it was designated by BRI as measured at fair value through profit or loss. or the terms of an existing liability are substantially modified. occur after BRI has collected substantially all of the original principal of the financial assets through scheduled payments or prepayments. (v) Income and expense recognition a. until the financial asset is derecognized or impaired. the cumulative gains or losses previously recognized in equity should be reclassified to consolidated statement of profit or loss and other comprehensive income. is non-recurring and could not have been reasonably anticipated by BRI. are recognized in the consolidated statement of profit or loss and other comprehensive income using the effective interest rate method. .648 ANNUAL REPORT 2015 The Biggest National Payment Bank These consolidated financial statements are originally issued in the Indonesian language. if the entity has. Financial assets and financial liabilities (continued) (iv) Derecognition (continued) Where an existing financial liability is replaced by another from the same creditor on substantially different terms. PT BANK RAKYAT INDONESIA (PERSERO) Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31. SUMMARY OF ACCOUNTING POLICIES (continued) c. sold or reclassified a significant amount of held to maturity investments before maturity (more than an insignificant amount in relation to the total amount of held to maturity investments) other than sales or reclassifications that: a. during the current financial year or during the 2 (two) preceding financial years. (vi) Reclassification of financial assets BRI is not allowed to reclassify any financial instrument out of the fair value through profit or loss category. b. b. such an exchange or modification is treated as derecognition of the original liability and the recognition of a new liability and the difference in the respective carrying amounts is recognized in the consolidated statement of profit or loss and other comprehensive income. When a financial asset is derecognized or impaired. Gains and losses arising from changes in the fair value of available for sale financial assets are recognized directly in equity.

PT Bank RakyaT IndonesIa (PeRseRo) TBk. .

PT BANK RAKYAT INDONESIA (PERSERO) Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31. All assets and liabilities for which fair value is measured or disclosed in the consolidated financial statements are classified within fair value hierarchy. BRI has a legal right to offset the amounts and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously. minus any reduction for impairment. A fair value measurement of non-financial assets considers a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to other market participants would use the asset in its highest and best use. ANNUAL REPORT 2015 The Biggest National Payment Bank . Financial assets and financial liabilities (continued) (vii) Offsetting Financial assets and liabilities are offset and the net amount is presented in the consolidated statement of financial position when and only when. BRI and subsidiaries uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value. The fair value measurement is based on the presumption that the transaction to sell an asset or paid to transfer a liability takes place either: • In the principal market for the assets and liabilities. maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.649 These consolidated financial statements are originally issued in the Indonesian language. unless otherwise stated) 2. 2015 and for the Year Then Ended (Expressed in millions of Rupiah. in the most advantageous market for the asset or liability. (viii) Amortized cost measurement The amortized cost of a financial asset or liability is the amount at which the financial asset or liability is measured at initial recognition. or • In the absence of a principal market. (ix) Fair value measurement Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. plus or minus the cumulative amortization using the effective interest rate method of any difference between the initial amount recognized and the maturity amount. SUMMARY OF ACCOUNTING POLICIES (continued) c. based on the lowest level input that is significant to the fair value measurement as a whole: . minus principal repayments. Income and expenses are presented on a net basis only when permitted by the accounting standards. The fair value of an asset or a liability is measured using the assumptions that market participants would use when determining the price of the asset and liability assuming that market participants act in their own economic best interest.

PT Bank RakyaT IndonesIa (PeRseRo) TBk. .

Fair value of similar instrument. Measured at fair value The fair value is determined with reference to the following order: Quoted price in active market. • Level 3: unobservable inputs for the asset and liability.  The difference between the acquisition cost and the nominal value is amortized on a straight-line basis over the period of the sukuk. investment in ijarah sukuk and Mudharabah sukuk is measured as follows: a.  Sukuk acquisition cost does not include transaction cost. BRI determines whether transfers have occured between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. After the initial recognition. risks of the asset and liability.  The difference between fair value and carrying value is presented in the consolidated statement of profit or loss and other comprehensive income. characteristics. if there is no available quoted price in the active market and no price from the current transaction. unless otherwise stated) 2.  Sukuk acquisition cost includes transaction cost. BRI has determined classes of assets and liabilities based on the nature. . SUMMARY OF ACCOUNTING POLICIES (continued) c. b. . and the level of the fair value hierarchy (Note 39). Sukuk Financial Asset At the initial recognition.  Impairment loss is recognized if the recoverable amount is less than the carrying amount and is presented as an impairment loss in the statement of profit or loss and other comprehensive income. the entity determines the classification of investments in sukuk as measured at cost or fair value. 2015 and for the Year Then Ended (Expressed in millions of Rupiah. PT BANK RAKYAT INDONESIA (PERSERO) Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31. Measured at cost  The investment is held in a business model whereby the primary goal is to obtain contractual cash flows and has contractual terms in determining the specific date of principal payments and or the results.650 ANNUAL REPORT 2015 The Biggest National Payment Bank These consolidated financial statements are originally issued in the Indonesian language. . Financial assets and financial liabilities (continued) ) Fair value measurement (continued) • Level 1: quoted (unadjusted) market prices in active markets for identical assets or liabilities accessible at the measurement date. .Price from the current transaction. which is directly or indirectly observable. For assets and liabilities that are recognised in the consolidated financial statements on a recurring basis. if there is no available quoted price in the active market. • Level 2: inputs other than quoted prices included in level 1 for the asset and liability. For the fair value disclosures purposes.

.PT Bank RakyaT IndonesIa (PeRseRo) TBk.

c) the creditor. IX. 4) it is a member of key management personnel in BRI and Subsidiaries. Transactions with related parties BRI and Subsidiaries engage in transactions with related parties as defined in SFAS No. material transactions and balances between BRI and Subsidiaries and the Government of the Republic of Indonesia (RI) and other entities related to the Government of the Republic of Indonesia are also disclosed in Note 43. A party is considered a related party to BRI and Subsidiaries if: 1) directly or indirectly. and 7) it is a post-employment benefit plan for the employees benefit of either BRI and Subsidiaries or entities related to BRI and Subsidiaries. 5) it is a close family member of the individual described in clause (1) or (4). SUMMARY OF ACCOUNTING POLICIES (continued) d. directly or indirectly. All transaction done by BRI have complied with Bapepam-LK Regulation No. unless otherwise stated) 2.E. BRI assesses whether there is an objective evidence that financial assets not carried at fair value through profit or loss are impaired. Allowance for impairment losses on financial assets On each consolidated statement of financial position reporting date. 3) it is a joint venture of a third party in which BRI and Subsidiaries have ventured in. such as a default or delinquency in interest or principal payments. (ii) has an interest in BRI and Subsidiaries that provides significant influence on BRI and Subsidiaries or (iii) has joint control over BRI and Subsidiaries. a party (i) controls. All material transactions and balances with related parties are disclosed in the relevant notes to the consolidated financial statements and the details have been presented in Note 43 of the consolidated financial statements. or controlled by.1 regarding “The affiliate transactions and conflict of interest of certain transactions”. Financial assets are impaired when an objective evidence demonstrate that a loss event has occurred after the initial recognition of the asset and that the loss event has an impact on the future cash flows of the financial asset that can be estimated reliably.651 These consolidated financial statements are originally issued in the Indonesian language. PT BANK RAKYAT INDONESIA (PERSERO) Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31. e. 2015 and for the Year Then Ended (Expressed in millions of Rupiah. . by the individual described in clause (4) or (5). 7 (Revised 2010) on “Related Party Disclosures”. 2) it is a member of the same group as BRI and Subsidiaries. grants the debtor a concession that the creditor would not otherwise consider. 6) it is an entity that is controlled. The criteria used by the entity to determine the existence of an objective evidence of impairment loss include: a) significant financial difficulty of the issuer or obligor. jointly controlled or significantly influenced by or for whom has significant voting rights in several entities. through one or more intermediaries. at the time the transaction were made. for economic or legal reasons relating to the debtor’s financial difficulty. Furthermore. d) it becomes probable that the debtor will enter into bankruptcy or other financial reorganization. b) a breach of contract. Transactions with related parties are made on the same term and conditions as those transactions with third parties. or under common control with BRI and Subsidiaries. ANNUAL REPORT 2015 The Biggest National Payment Bank .

PT Bank RakyaT IndonesIa (PeRseRo) TBk. .

or f) observable data indicating that there is a measurable decrease in the estimated future cash flows from a portfolio of financial assets since the initial recognition of those assets. Allowance for impairment losses on financial assets (continued) The criteria used by the entity to determine the existence of an objective evidence of impairment loss include (continued): e)the disappearance of an active market for that financial asset because of financial difficulties. BRI determines loans to be evaluated for impairment through collective evaluation if one of the following criteria is met: 1. doubtful and loss. Financial assets that are individually assessed for impairment and for which an impairment loss is or continues to be recognized are not included in the collective assesment of impairment. Restructured loans which individually have insignificant value. BRI determines the loans to be evaluated for impairment through individual evaluation if one of the following criteria is met: 1. BRI performs individual assessment for: (a) Corporate and middle loans with collectibility classification of substandard. . Loans which individually have significant value but there is no objective evidence of impairment. 2. 3. or (b) Restructured corporate and middle loans. 2015 and for the Year Then Ended (Expressed in millions of Rupiah. BRI performs collective assessment for: (a) Corporate and middle loans with collectibility classification of current and special mention which have never been restructured. although the decrease cannot yet be identified with the individual financial assets in the portfolio. Based on the above criteria. longer periods are warranted. in exceptional cases. Based on the above criteria. The estimated period between the occurrence of the event and identification of loss is determined by management for each identified portfolio. In general. BRI first assesses whether an objective evidence of impairment exists individually for financial assets that are individually significant or collectively. or (b) Retail and consumer loans. for financial assets that are not individually significant. SUMMARY OF ACCOUNTING POLICIES (continued) e. including: ) adverse changes in the payment status of debtors in the portfolio. it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment.652 ANNUAL REPORT 2015 The Biggest National Payment Bank These consolidated financial statements are originally issued in the Indonesian language. PT BANK RAKYAT INDONESIA (PERSERO) Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31. Restructured loans which individually have significant value. . 2. the periods used vary between 3 months and 12 months. Loans which individually have significant value and an objective evidence of impairment. unless otherwise stated) 2. Loans which individually have insignificant value. and 2) national or local economic conditions that correlate with defaults on the assets in the portfolio. whether significant or not. If BRI determines that no objective evidence of impairment exists for an individually assessed financial asset.

PT Bank RakyaT IndonesIa (PeRseRo) TBk. .

Loans are collateral dependent. SUMMARY OF ACCOUNTING POLICIES (continued) e. Interest income on the impaired financial assets continues to be recognized using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. As a practical guideline. which is a statistical model analysis method to collectively assess allowance for impairment losses on loans. a significant or prolonged decline in the fair value of the security below its cost is an objective evidence of impairment resulting in the recognition of an impairment loss. Allowance for impairment losses on financial assets (continued) Calculation of allowance for impairment losses on financial assets assessed collectively grouped based on similar credit risk characteristics and taking into account the loan segmentation based on historical loss experience and the possibility of failure (probability of default). 2. In the case of equity instruments.653 These consolidated financial statements are originally issued in the Indonesian language. BRI uses 3 (three) years moving average historical data to compute the Probability of Default (PD) and Loss of Given Default (LGD). BRI uses the migration analysis method. For financial assets classified as available for sale.e. Impairment losses on financial assets carried at amortized cost are measured as the difference between the carrying amount of the financial assets and present value of estimated future cash flows discounted at the financial assets original effective interest rate. Foreclosure of collateral is most likely to occur and supported by legally binding collateral agreement. Losses are recognized in the consolidated statement of profit or loss and other comprehensive income and reflected in an allowance for impairment losses account against financial assets carried at amortized cost. Under this method. When a subsequent event causes the amount of impairment loss to decrease. BRI uses the fair value of collateral as the basis for future cash flow if one of the following conditions is met: 1. Loans that have historical loss data and information that is categorized as a disaster prone areas by the Government of the Republic of Indonesia and supported by internal policies of BRI. the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract. PT BANK RAKYAT INDONESIA (PERSERO) Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31. BRI may measure impairment on the basis of an instrument’s fair value using an observable market price. the calculation of allowance for impairment losses is done by calculating the overall loss rate which include the actual loss rate plus the risk factors associated relevant based on a survey conducted periodically to external and internal parties of BRI. 2015 and for the Year Then Ended (Expressed in millions of Rupiah. if the source of loans repayment is made only from the collateral. ANNUAL REPORT 2015 The Biggest National Payment Bank . Impairment losses on available for sale . i. BRI assesses on each consolidated statement of financial position reporting date whether there is objective evidence that a financial asset or a group of financial assets is impaired. If loans or held to maturity securities and Government Recapitalization Bonds have a variable interest rate. the calculation of the present value of the estimated future cash flows of a collateralized financial asset reflects the cash flows that may result from foreclosure less costs for obtaining and selling the collateral. unless otherwise stated) 2. whether or not foreclosure is probable. the impairment loss previously recognized must be recovered and the recovery is stated in the consolidated statement of profit or loss and other comprehensive income.

PT Bank RakyaT IndonesIa (PeRseRo) TBk. .

If in the next period.03/2014 dated November 18. The reversal amount of financial assets is recognized in the current year consolidated statement of profit or loss and other comprehensive income.13/13/PBI/2011 dated March 24. 2015 and for the Year Then Ended (Expressed in millions of Rupiah. The recoveries of written-off financial assets in the current year are credited by adjusting the allowance for impairment losses accounts. 12/POJK.03/2015 dated August 21. 2012 on “Assessment of Commercial Bank Asset Quality” and OJK Regulation (POJK) No. PT BANK RAKYAT INDONESIA (PERSERO) Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31. If in a subsequent period. 16/POJK. . unless otherwise stated) 2. the amount of allowance for impairment losses is decreased and the decrease can be related objectively to an event that occurred after the recognition of the impairment losses (i. The cumulative loss that has been removed from equity and recognized in the statement of profit or loss and other comprehensive income is the difference between the acquisition cost (net of any principal repayment and amortization) and the current fair value.03/2015 dated August 21. The assessment prior to January 1. In connection with compliance to Bank Indonesia (OJK). the impairment loss that was previously recognized has to be reversed. 2015 on ”Prudential Principle Provisions for Sharia Banks and Sharia Business Units to Stimulate the National Economy” which applicable until August 24. 2017. the fair value of debt instrument classified as available for sale securities increases and the increase can be objectively related to an event occurring after the impairment loss was recognized in the consolidated statement of profit or loss and other comprehensive income. upgrade debtor’s or issuer’s collectibility). impairment is measured using the original effective interest rate before the modification of terms. BRI’s subsidiary which is engaged in Sharia Banking (BRIS) applies the Financial Services Authority Regulation (POJK) No.. Allowance for impairment losses on financial assets (continued) marketable securities are recognized by transferring the cumulative loss that has been recognized directly in equity to the statement of profit or loss and other comprehensive income. 2015 on “Prudential Principle Provisions for Commercial Banks to Stimulate the National Economy” which applicable until August 24. Recoveries of written-off loans from previous years are recorded as operating income other than interest income. Impairment losses recognized in the consolidated statement of profit or loss and other comprehensive income on available for sale equity instruments should not be recovered through a reversal of a previously recognized impairment loss in the current year consolidated statement of profit or loss and other comprehensive income. the impairment loss is reversed. 11/POJK. less any impairment loss previously recognized in the consolidated statement of profit or loss and other comprehensive income. 2015 using the PBI No. SUMMARY OF ACCOUNTING POLICIES (continued) e.654 ANNUAL REPORT 2015 The Biggest National Payment Bank These consolidated financial statements are originally issued in the Indonesian language. 2014 on "Asset Quality Assessment for Sharia Commercial Banks and Business Unit" effective since January 1. 2015 and POJK No. with the amount of reversal recognized in the consolidated statement of profit or loss and other comprehensive income. 2011 on "Asset Quality Assessment for Sharia Commercial Banks and Sharia Business Unit".e. 14/15/PBI/2012 dated October 24. BRI implemented Bank Indonesia Regulation No. 2017. by adjusting the allowance account. If the terms of the loans. receivables or held to maturity securities are renegotiated or otherwise modified because of financial difficulties of the debtor or issuer.

PT Bank RakyaT IndonesIa (PeRseRo) TBk. .

S Treasury Bonds. Government bonds.655 These consolidated financial statements are originally issued in the Indonesian language. Placements with Bank Indonesia and other banks are classified as loans and receivables. PT BANK RAKYAT INDONESIA (PERSERO) Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31. other debt instruments issued by the Government of the Republic of Indonesia and earning assets secured by cash collateral. f. net of deductible collateral. Securities and Government Recapitalization Bonds Securities consist of securities traded in the money and capital market such as Certificates of Bank Indonesia. d) 50% of earning assets classified as Doubtful. 2015 and for the Year Then Ended (Expressed in millions of Rupiah. . subordinated bonds. ANNUAL REPORT 2015 The Biggest National Payment Bank . Government Treasury Bills (Surat Perbendaharaan Negara or SPN) and Government bonds in foreign currency purchased from primary and secondary markets. b) 5% of earning assets classified as Special Mention. unless otherwise stated) 2. net of deductible collateral. Securities include bonds issued by the Government that are not related with the recapitalization program such as Government Debentures (Surat Utang Negara or SUN). The criterias for assessment of the value of collateral that can be deducted in the calculation of allowance for impairment losses are based on Bank Indonesia (OJK) Regulations. Placements with Bank Indonesia and other banks are stated at amortized cost using the effective interest rate method less allowance for impairment losses. mutual fund units. Deposits Certificates of Bank Indonesia. Government Recapitalization Bonds are bonds issued by the Government in connection with the recapitalization program for commercial banks which consist of bonds under BRI’s recapitalization and Government Recapitalization Bonds purchased from the secondary market. g. net of deductible collateral. Singapore Government Securities. U. excluding placements with Bank Indonesia. Allowance for impairment losses on financial assets (continued) The minimum allowance to be provided in accordance with Bank Indonesia (OJK) Regulation is as follows: a) 1% of earning assets classified as Current. Term Deposit and Sharia Deposit Facility whereas placements with other banks represent placements of funds in the form of inter-bank call money and time deposits. promissory notes. The current accounts with Bank Indonesia and other banks are classified as loans and receivables. net of deductible collateral. Current accounts with Bank Indonesia and other banks Current accounts with Bank Indonesia and other banks are stated at amortized cost using the effective interest rate method less allowance for impairment losses. SUMMARY OF ACCOUNTING POLICIES (continued) e. h. Placements with Bank Indonesia and other banks Placements with Bank Indonesia and other banks consist of placement in deposit facility of Bank Indonesia such as Deposit Facility. medium-term notes. c) 15% of earning assets classified as Sub-standard. Negotiable Certificate of Deposits. Government Bonds. Bank Indonesia Sharia Certificates. credit linked notes and bonds traded in the stock exchange. and e) 100% of earning assets classified as Loss.

PT Bank RakyaT IndonesIa (PeRseRo) TBk. .

After the initial recognition. 2) Securities and Government Recapitalization Bonds classified as fair value through profit or loss are stated at fair value. Loans are classified as loans and receivables. PT BANK RAKYAT INDONESIA (PERSERO) Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31. i. . as held to maturity. i. Export bills are stated at acquisition cost after deducting the discount and allowance for impairment losses. Interest income is recognized in the consolidated statement of profit or loss and other comprehensive income using the effective interest rate method. 3) Securities and Government Recapitalization Bonds classified as available for sale investments are stated at fair value. borne by BRI. BRI does not classify securities or Government Recapitalization Bonds as held to maturity financial assets if BRI has. 2015 and for the Year Then Ended (Expressed in millions of Rupiah. 55 which is applicable in the relevant periods.e. unless otherwise stated) 2. Loans Loans represent the lending of money or equivalent receivables under contracts or borrowing and lending commitments with debtors. SUMMARY OF ACCOUNTING POLICIES (continued) h. whereby the debtors are required to repay their debts with interest after a specified period of time. sold or reclassified more than an insignificant amount of held to maturity securities or Government Recapitalization Bonds before maturity other than sales or reclassifications that are defined in SFAS No.656 ANNUAL REPORT 2015 The Biggest National Payment Bank These consolidated financial statements are originally issued in the Indonesian language. Gains and losses from changes in fair value of securities and Government Recapitalization Bonds are recognized in the consolidated statement of profit or loss and other comprehensive income. Securities and Government Recapitalization Bonds (continued) Securities and Government Recapitalization Bonds are initially measured at fair value. Export bills are classified as loans and receivables. whereby the cumulative gains and losses previously recognized in equity are recognized in the consolidated statement of profit or loss and other comprehensive income. The value of securities and Government Recapitalization Bonds is stated based on the classification as follows: 1) Held to maturity securities and Government Recapitalization Bonds are carried at amortized cost using the effective interest rate method. the securities and Government Recapitalization Bonds are recorded according to their category. during the current financial year or during the 2 (two) preceding financial years.. Other fair value changes are recognized directly in equity until the securities and Government Recapitalization Bonds are sold or impaired. j. Foreign exchange gains or losses on available for sale securities and Government Recapitalization Bonds are recognized in the consolidated statement of profit or loss and other comprehensive income. Loans are initially measured at fair value plus transaction costs that are directly attributable and additional costs to obtain financial assets and after initial recognition. Export bills Export bills represent negotiated export bills that have been discounted and guaranteed by other banks. Loans extended under syndication agreements are recognized at the nominal amount to the extent of the risks. fair value through profit or loss or available for sale. are measured at amortized cost based on the effective interest rate method less allowance for impairment losses.

PT Bank RakyaT IndonesIa (PeRseRo) TBk. .

SUMMARY OF ACCOUNTING POLICIES (continued) j. Loans (continued) Restructured loans are stated at the lower of carrying value on the date of restructuring or value of the future cash receipts after the restructuring. Such receivables consist of receivables arising from murabahah transactions. Mudharabah financing is a joint financing made between BRIS as the owner of the funds (shahibul maal) and the customer as a business executor (mudharib) during a certain period.657 These consolidated financial statements are originally issued in the Indonesian language. istishna transactions and Qardh transactions. On the statement of financial position date. unless otherwise stated) 2. 2015 and for the Year Then Ended (Expressed in millions of Rupiah. all future cash receipts specified by the new terms are recorded as a return of principal loans and interest income in accordance with the terms of the restructuring. Subsequent payment of loans writtten off are credited to the allowance of impairment losses in the consolidated statement of financial position. ANNUAL REPORT 2015 The Biggest National Payment Bank . Musyarakah is a partnership contract among fund’s owners (musyarakah partners) to contribute funds and conduct a business on a joint basis through partnership with the profit sharing based on a predetermined ratio. investment and working capital needs of the customer sold with a principle price plus a certain margin that is mutually informed and agreed. After the restructuring. Murabahah is a sale and purchase contract between the customer and BRIS. Losses resulting from the difference between the carrying value on the date of restructuring the present value of future cash receipts after the restructuring is recognized in the consolidated statement of profit or loss and other comprehensive income. On the statement of financial position date. The profit sharing from the project or the business is determined in accordance with the mutually agreed nisbah (pre-determined ratio). k. When loans are deemed uncollectible. while the losses are borne proportionally based on the capital contribution. Repayment on this financing is made in installments within a specified period. PT BANK RAKYAT INDONESIA (PERSERO) Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31. Sharia receivables and financing Financing/receivables based on Sharia principles is receivables from providing funds or other similar form of receivables arising from transactions carried out based on sale or purchase arrangements and profit sharing between BRIS and other parties for a certain period of time. Musyarakah financing is stated at the outstanding financing balance less allowance for impairment losses which is provided based on the management’s review on the financing quality. . Mudharabah financing is stated at the outstanding financing balance less allowance for impairment losses which is provided based on the management’s review of the financing quality. for financing consist of Mudharabah and musyarakah financing. whereby BRIS finances the consumption. it is written off against the related allowance for impairment losses. Loans are written off when there is no realistic prospect of collections in the future and all collateral have been realized or foreclosed. Murabahah receivables are initially measured at fair value plus direct attributable transaction costs and is an additional cost to obtain the respected financial assets and after the initial recognition are measured at amortized cost using the effective margin method less any allowance for impairment losses value.

.PT Bank RakyaT IndonesIa (PeRseRo) TBk.

BRI implemented SFAS No. Where there has been a change recognized directly in the equity of the associated entities. l. SUMMARY OF ACCOUNTING POLICIES (continued) . Acceptances receivable are stated net of allowance for impairment losses. Deferred istishna margin is stated as contra account of istishna receivables. Acceptances receivable and payable Acceptances receivable and payable represent letters of credit (L/C) transactions that have been accepted by the accepting bank. Based on the contract. Acceptances receivable are classified as loans and receivables. the buyer orders the manufacturer to produce or to supply al-mashnu (goods ordered) according to the specifications required by the buyer and to sell them at agreed price. Acceptances payable are classified as financial liabilities measured at amortized cost. . The consolidated statement of profit or loss and other comprehensive income reflects the share of the results of operations of the associated entities. The initial recognition of investments in associates are recognized at cost and the carrying amount is added or subtracted to recognize the BRI’s portion of profit or loss of subsidiaries after the acquisition date. 2015. Acceptances receivable and payable are stated at amortized cost. BRI calculates the amount of impairment as the difference between the recoverable amount of the investment in associated entities and its carrying value. Sharia receivables and financing (continued) Istishna is a sale and purchase contract between al-mustashni (buyer) and al-shani (manufacturer also acting as the seller). Receipt of distributions from subsidiaries reduce the carrying amount of the investment. unless otherwise stated) 2. After application of the equity method. If this is the case. . and recognizes the amount in the consolidated statement of profit or loss and other comprehensive income. 2015 and for the Year Then Ended (Expressed in millions of Rupiah. Investment in associated entities Effective on January 1. BRI’s investments in its associated companies are measured using the equity method. Istishna receivables are stated at outstanding billings to final buyer less allowance for impairment losses. Unrealized gains and losses resulting from transactions between BRI and the associated entities are eliminated to the extent of BRI’s interest in the associated entities. BRI recognizes its share of any such changes and discloses this. Qardh is the provision of funds or equivalent claims based on agreement between the borrower and the lender that requires the borrower to repay the debts after a certain period of time. BRI’s portion of profit or loss of subsidiaries are recognized in profit or loss of BRI. An associated entity is an entity in which BRI has significant influence or share ownership of more than 20% of the voting rights. 15 "Investments in Associates and Joint Ventures". BRI determines at each reporting date whether there is any objective evidence that the investment in the associated entities is impaired. The implementation of the SFAS has no significant impact to the financial reporting and disclosures in the consolidated financial statements. when applicable.658 ANNUAL REPORT 2015 The Biggest National Payment Bank These consolidated financial statements are originally issued in the Indonesian language. BRI determines whether it is necessary to recognize an additional impairment loss on BRI’s investment in its associated entities. m. PT BANK RAKYAT INDONESIA (PERSERO) Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31. Qardh are stated at outstanding balance less allowance for impairment losses based on the management’s review on the financing quality. in the consolidated statement of changes in equity.

PT Bank RakyaT IndonesIa (PeRseRo) TBk. .

the land itself may have a limited useful life. removal and restoration is limited. unless: (i) the exchange transaction lacks commercial substance. unless otherwise stated) 2. 55 (Revised 2014) and deducted by allowance for impairment losses. Investment in associated entities (continued) BRI’s investment in its associated entities with no significant influence or share ownership under 20% are recorded in accordance with SFAS No. which comprises its purchase price and any costs directly attributable in bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. and the benefits from the site dismantlement. In some cases. If the cost of land includes the costs of site dismantlement.659 These consolidated financial statements are originally issued in the Indonesian language. ANNUAL REPORT 2015 The Biggest National Payment Bank . that portion of the land asset is depreciated over the period of benefits obtained by incurring those costs. The carrying amount of an item of premises and equipment is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. or (ii) the fair value of neither the assets received nor the assets given up can be measured reliably. in which case it is depreciated in a manner that reflects the benefits to be derived from it. useful lives and depreciation method are evaluated at each year end and adjusted prospectively if necessary. Premises and equipment acquired in exchange for a non-monetary asset or for a combination of monetary and non-monetary assets are measured at fair values. Depreciation of an asset starts when it is available for use and is computed using the straight-line method based on the estimated economic useful lives of the assets as follows: Years Buildings 15 Motor vehicles 5 Computers and machineries 3-5 Furniture and fixtures 5 The carrying amounts of premises and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying values may not be fully recoverable. Land are stated at cost and not depreciated. Premises and equipment All premises and equipment are initially recognized at cost. Any gain or loss arising from the derecognition of the asset is directly included in the profit or loss for the year when the item is derecognized. n. PT BANK RAKYAT INDONESIA (PERSERO) Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31. SUMMARY OF ACCOUNTING POLICIES (continued) m. 2015 and for the Year Then Ended (Expressed in millions of Rupiah. removal and restoration. The asset residual values. . Subsequent to initial recognition. premises and equipment are carried at cost less any subsequent accumulated depreciation and impairment losses.

.PT Bank RakyaT IndonesIa (PeRseRo) TBk.

Assets under construction are not depreciated as these are not yet available for use. are recognized in the consolidated statement of profit or loss and other comprehensive income under expense categories that are consistent with the functions of the impaired assets. The accumulated costs will be reclassified to the appropriate “Premises and Equipment” account when the construction is completed and available for intended use. unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. If any such indication exists. BRI assesses at each annual reporting period whether there is an indication that an asset may be impaired.e. o. Building Usage Right (“Hak Guna Bangunan” or “HGB”) and Usage Rights (“Hak Pakai” or “HP”) when the land was initially acquired are recognized as part of the cost of the land under the “Premises and Equipment”. The cost of major renovation and restoration is capitalized to the carrying amount of the related premises and equipment when it is probable that future economic benefits in excess of the originally assessed standard of performance of the existing asset and is depreciated over the remaining useful life of the related asset. The extension or the legal renewal costs of land rights were recognized as intangible assets and were amortized over the shorter of the rights' legal life and land's economic life. PT BANK RAKYAT INDONESIA (PERSERO) Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31. refer to SFAS No. 2015 and for the Year Then Ended (Expressed in millions of Rupiah. 48 (Revised 2014). Impairment losses of continuing operations.. or goodwill acquired in a business combination) is required.660 ANNUAL REPORT 2015 The Biggest National Payment Bank These consolidated financial statements are originally issued in the Indonesian language. In assessing the value in use. Impairment of Non-Financial Assets Effective on January 1. the estimated net future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. BRI implemented SFAS No. The implementation of the SFAS has no significant impact to the financial reporting and disclosures in the consolidated financial statements. . if any. an intangible asset not yet available for use. and is determined for an individual asset. SUMMARY OF ACCOUNTING POLICIES (continued) n. Constructions in-progress are stated at cost. An asset’s recoverable amount is the higher of an asset’s or Cash Generating Unit’s (CGU) fair value less costs of disposal and its value in use. 68. When the carrying amount of an asset exceeds its recoverable amount. or when annual impairment testing for an asset (i. an intangible asset with an indefinite useful life. "Fair Value Measurements" (Note 2c). "Impairment of Assets". the asset is considered impaired and is written down to its recoverable amount. 2015. including capitalized borrowing costs and other charges incurred in connection with the financing of the said asset constructions. unless otherwise stated) 2. In determining fair value less costs of disposal. Premises and equipment (continued) Repairs and maintenance is charged to the profit or loss as incurred. Impairment losses of continuing operations are recognized in the consolidated statement of profit or loss and other comprehensive income as “impairment losses”. The legal cost of land rights in the form of Business Usage Rights (“Hak Guna Usaha” or “HGU”). BRI makes an estimate of the asset’s recoverable amount.

.PT Bank RakyaT IndonesIa (PeRseRo) TBk.

Allowance for losses foreclosed collaterals formed by impairment of foreclosed collaterals. These demand deposits are stated at the amount due to the account holder. Foreclosed collaterals Foreclosed collaterals acquired in settlement of loans (included as part of “Other Assets”) are recognized at net realizable values or loan outstanding amount. This account is classified as other financial liabilities and measured at amortized cost. The excess in loan balances which has not been paid by debtors over the value of foreclosed collaterals is charged to allowance for possible losses on loans in the current year. Deposits are stated at the amount due to the account holders. The difference between the value of the collateral and the proceeds from sale thereof is recognized as a gain or loss at the time of sale of the collateral. 2015 and for the Year Then Ended (Expressed in millions of Rupiah. s. Wadiah demand deposits are stated at the amount due to the account holder of the deposit in BRIS. r. Net realizable value is the fair value of the collateral after deducting the estimated costs of disposal. Liabilities due immediately Liabilities due immediately represent the liability of BRI to external parties which by nature should be paid immediately in accordance with the requirements in the agreement which have been previously determined. or through transfer with a bank draft or other forms of payment order. Wadiah saving deposits represent funds deposited by customers in BRIS. ANNUAL REPORT 2015 The Biggest National Payment Bank . Wadiah saving deposits are stated at the amount due to the account holders. SUMMARY OF ACCOUNTING POLICIES (continued) p. unless otherwise stated) 2. Prepaid expenses Prepaid expenses are amortized over their useful lives using the straight line method. Saving deposits represent customers' funds which entitle the depositors to withdraw under certain agreed conditions. . whichever is lower. Deposits from customers and other banks and financial institutions Demand deposits represent funds deposited by customers whereby the withdrawal can be done at any time by using a check. Wadiah demand deposits represent third party funds which are available for withdrawal at any time and earn bonus based on BRIS’ policy. Management evaluates the value of foreclosed collaterals periodically. Mudharabah saving deposits represent funds from third parties which earn bonus based on a predetermined and pre-agreed profit-sharing return ratio (nisbah) from income derived by BRIS from the use of such funds. whereby the deposits can be withdrawn any time and does not require BRIS to give interest unless in the form of bonus in a voluntary way.661 These consolidated financial statements are originally issued in the Indonesian language. q. Reconditioning costs arising after foreclosure capitalized in the accounts of the foreclosed collaterals. Mudharabah saving deposits is stated at the customers’ saving balance. PT BANK RAKYAT INDONESIA (PERSERO) Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31.

.PT Bank RakyaT IndonesIa (PeRseRo) TBk.

t. Mudharabah time deposits represent third party funds that can be withdrawn only at a certain point in time based on the agreement between the mudharabah time deposit holder and BRIS. Securities sold under agreement to repurchase Securities sold under agreement to repurchase are presented as liabilities in the consolidated statement of financial position. . Deposits from customers and other banks and financial institutions are classified as other financial liabilities measured at amortized cost using effective interest rate method except deposits and temporary syirkah funds which are stated at the BRI and its subsidiaries’ payable amount to customers. 2015 and for the Year Then Ended (Expressed in millions of Rupiah. Securities sold under agreement to repurchase are classified as financial liabilities measured at amortized cost. net of unamortized prepaid interest. The difference between the selling price and the repurchase price is treated as prepaid interest and recognized as expense over the period starting from when those securities are sold until they are repurchased using effective interest rate method. at the repurchase price. Securities purchased under agreement to resell and securities sold under agreement to repurchase Securities purchased under agreement to resell Securities purchased under agreement to resell are presented as financial assets in the consolidated statement of financial position. in the form of demand deposits. either domestic or overseas.662 ANNUAL REPORT 2015 The Biggest National Payment Bank These consolidated financial statements are originally issued in the Indonesian language. at the resale price net of unamortized interest and net of allowance for impairment losses. Securities purchased under agreement to resell are classified as loans and receivables. Deposits from other banks and financial institutions consist of liabilities to other banks. . SUMMARY OF ACCOUNTING POLICIES (continued) Deposits from customers and other banks and financial institutions (continued) Time deposits represent funds deposited by customers that can be withdrawn only at a certain point of time as stated in the contract between the depositor and BRI and BRI Agro. Time deposits are stated at the nominal amount provided in the certificates of deposits or at the amount stated in the agreement. Incremental costs directly attributable to the acquisition of deposits from customers are deducted from the amount of deposits. PT BANK RAKYAT INDONESIA (PERSERO) Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31. The difference between the purchase price and the resale price is treated as unearned interest income (unamortized) and recognized as income over the period starting from when those securities are purchased until they are resold using effective interest rate method. unless otherwise stated) 2. saving deposits. time deposits and inter- bank call money through the issuance of promissory notes with a term of up to 90 (ninety) days and stated at the amount due to banks and financial institutions. Mudharabah time deposits are stated at the nominal amount as agreed by the deposit holder and BRIS.

.PT Bank RakyaT IndonesIa (PeRseRo) TBk.

PT BANK RAKYAT INDONESIA (PERSERO) Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31. Borrowings are recognized initially at fair value and subsequently measured at amortized cost using the effective interest rate method (EIR). Amortized cost is calculated by taking into account any discount or premium associated related to the initial recognition and transaction costs that are an integral part of the effective interest rate.663 These consolidated financial statements are originally issued in the Indonesian language. Subordinated loans Subordinated loans are recognized initially at fair value and subsequently measured at amortized cost using the effective interest rate method. ANNUAL REPORT 2015 The Biggest National Payment Bank . BRI provided Allowance for On Time Interest Payment (CPBTW) for the PBTW and present it in "Other liabilities”. Provision Provisions are recognized when BRI and Subsidiaries have a present obligation (legal or constructive) that. unless otherwise stated) 2. as a result of past events. The amount of PBTW is 25% of the interest received from either Kupedes working capital loans or Kupedes investment loans. Bank Indonesia or other parties with a repayment obligation based on borrowing agreements. Medium Term Notes (MTN) and Negotiable Certificate of Deposit (NCD). y. If the outflow of resources to settle the obligation is most likely will not occur. 2015 and for the Year Then Ended (Expressed in millions of Rupiah. Borrowings Borrowings represent funds received from other banks. x. SUMMARY OF ACCOUNTING POLICIES (continued) u. the provision is reversed. Provision for timely interest payment in BRI unit On Time Interest Payment (Pembayaran Bunga Tepat Waktu (PBTW)) represents incentives given to Micro Loans (Kredit Umum Pedesaan (Kupedes)) debtors who settled their loans according to the mutually agreed installment schedules. Amortized cost is calculated by taking into account any discount or premium associated related to the initial recognition and transaction costs that are an integral part of the effective interest rate. Provisions are reviewed at each reporting date and adjusted to reflect the best estimate of the present. The marketable securities issued are recognized initially at fair value and subsequently measured at amortized cost using the effective interest rate method (EIR). the settlement of the liability is likely to result in an outflow of resources that contain economic benefits and a reliable estimate of the amount of the obligation can be made. Marketable securities issued Marketable securities issued by BRI consist of Bonds. v. PBTW is recorded as a deduction from interest income on loans. Amortized cost is calculated by taking into account any discount or premium associated related to the initial recognition and transaction costs that are an integral part of the effective interest rate. . w.

PT Bank RakyaT IndonesIa (PeRseRo) TBk. .

Income from istishna transactions and profit sharing from mudharabah and musyarakah financing are recognized when the cash installments are received. Expenses based on Sharia principles consist of mudharabah profit sharing expense and wadiah bonus expense. provision fees and other forms received by the parties in the contract that are inseparable from the effective interest rate. istishna. or fees and commissions income related to a specific period. PT BANK RAKYAT INDONESIA (PERSERO) Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31. Sharia income and expense Sharia income consists of income from murabahah. Income from ijarah transactions is recognized using the accrual method. transaction costs and all other premiums or discounts. Fees and commissions that are not related to the credit activity or a period of time and/or associated with the service provided. transaction costs and all other premiums or discounts. The effective interest rate is the rate that precisely discounts the estimated future cash payments or receipts through the expected life of the financial instrument (or. are amortized over the term of the contract using the effective interest rate method and classified as part of interest income in the consolidated statement of profit or loss and other comprehensive income. When calculating the effective interest rate. Fees and commissions Fees and commissions directly related to lending activities. Income from murabahah receivables is recognized using the effective margin method. If the value of a financial asset or group of similar financial assets has decreased as a result of impairment losses. 2015 and for the Year Then Ended (Expressed in millions of Rupiah. provision fees and other forms accepted by the parties in the contract that are an inseparable part of the effective margin. This calculation includes all commissions. BRI and BRI Agro estimates future cash flows considering all contractual terms of the financial instruments except future credit losses. unless otherwise stated) 2. This calculation includes all commissions. ijarah transactions and profit sharing from mudharabah and musyarakah financing. When calculating the effective margin. BRIS estimates the future cash flows considering all contractual terms of the financial instrument. Effective margin is the margin that precisely discounts the estimated future cash payments or receipts through the expected life of the murabahah receivables. Mudharabah and musyarakah income are recognized when cash is received or in a period where the right of revenue sharing is due based on agreed portion (nisbah). the interest income subsequently obtained is recognized based on the interest rate used to discount future cash flows in calculating impairment losses. except future credit losses. are recognized as revenue at the time of the transaction and recorded under other operating income.664 ANNUAL REPORT 2015 The Biggest National Payment Bank These consolidated financial statements are originally issued in the Indonesian language. Interest income and interest expense Interest income and expense for all interest bearing financial instruments are recognized in the consolidated statement of profit or loss and other comprehensive income using the effective interest rate method. ab. aa. SUMMARY OF ACCOUNTING POLICIES (continued) z. wherever appropriate. a shorter period) to obtain the net carrying amount of the financial asset or financial liability.. .

PT Bank RakyaT IndonesIa (PeRseRo) TBk. .

Employee benefits Effective on January 1. Remeasurement of net defined benefit liabilities (assets). . PT BANK RAKYAT INDONESIA (PERSERO) Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31. The benefits are determined based on BRI’s regulations and the minimum requirements of Labor Law No. excluding amounts that included in net interest on liabilities (assets). short-term leaves. (iii) The changes in the impact of the asset ceiling. BRI implemented SFAS No. and when the related restructuring or termination costs are recognized. which is recognized as other comprehensive income. social security contributions. and the remeasurement of net defined benefit liability (asset) obligations are recognized immediately in the current period consolidated statement of profit or loss and other comprehensive income. (ii) Return on plan assets. which removes the corridor mechanism and the contingent liabilities disclosures to simplify the clarifications and disclosures. unvested past service cost can no longer be deferred and recognized over the future vesting period. Defined contribution plan Contribution payable to the pension fund equivalent to a certain percentage of salaries for qualified employees under the BRI’s defined contribution plan. The contribution is accrued and recognized as expense when services have been rendered by qualified employees and actual payments are deducted from the contribution payable. net interest on net defined benefit liabilities (assets). Short-term employee benefits are measured using undiscounted amounts. consist of: (i) Actuarial gains and losses. 2015 and for the Year Then Ended (Expressed in millions of Rupiah. Defined benefit plan and other long-term employee benefits The post-employment benefits and other long-term employee benefits such as gratuity for services and grand leaves are accrued and recognized as expense when services have been rendered by qualified employees. All past service costs are recognized as expense at the earlier date between the amendment or curtailment program occurs. 13/2003. For other long-term employee benefits over the current service cost. 24 (Revised 2013). excluding amounts that included in net interest on liabilities (assets). unless otherwise stated) 2. Contribution payable is measured using undiscounted amounts. Short-term employee benefits Short-term employee benefits such as salaries. Remeasurement of net defined benefit liabilities (assets). bonuses and other non-monetary benefits are recognized during the period when services have been rendered. 2015. "Employee Benefits". ANNUAL REPORT 2015 The Biggest National Payment Bank . which is recognized as other comprehensive income are not reclassified to profit or loss in subsequent periods.665 These consolidated financial statements are originally issued in the Indonesian language. SUMMARY OF ACCOUNTING POLICIES (continued) ac. The post-employment benefits and other long-term employee benefits are actuarially determined using the Projected Unit Credit Method. therefore.

.PT Bank RakyaT IndonesIa (PeRseRo) TBk.

758.148.210. Stock options In connection with the IPO.641.90 1 Swedish Krona 1.96 1 South Korean Won 11.288.671.98 1 Saudi Arabian Riyal 3. SUMMARY OF ACCOUNTING POLICIES (continued) ad.666 ANNUAL REPORT 2015 The Biggest National Payment Bank These consolidated financial statements are originally issued in the Indonesian language.385.52 1.60 9.91 .785. Earnings per share Basic earnings per share is calculated by dividing income for the year attributable to equity holders of the Parent Entity (BRI) by the weighted average number of issued and fully paid shares during the related year. unless otherwise stated) 2. 2015 2014 1 United States Dollar 13.444.23 1 Papua New Guinean Kina 4.49 1 Bruneian Dollar 9.46 1 United Arab Emirates Dirham 3.52 103. PT BANK RAKYAT INDONESIA (PERSERO) Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31.439. Cost of stock compensation at the issuance date is calculated using the fair value of the stock options and is recognized as part of “Salaries and Employee Benefits Expense” based on cliff-vesting scheme using the straight-line method over the vesting period.11 1..753.00 12.00 p.80 1 Canadian Dollar 9. The exchange rates used in the translation of foreign currency amounts into Rupiah are as follows (full Rupiah): December 31.542.672.05 1 Indian Rupee 208.995. Transactions in foreign currencies are recorded at the prevailing exchange rates at the time of the transactions. all foreign currency denominated monetary assets and liabilities are translated into Rupiah using the Reuters spot rates at 4. The resulting gains or losses are recognized in the current year consolidated statement of profit or loss and other comprehensive income.19 1 Malaysian Ringgit 3.919.596. The fair values of the stock options granted are calculated using the Black-Scholes option pricing model.774. 2015 and for the Year Then Ended (Expressed in millions of Rupiah.374.55 4.604.62 1 Thailand Baht 381.778.95 9.48 3.709.33 12.73 10.376.758. The accumulation of stock compensation cost is recognized as “Stock Options” in the equity.m.515.56 1 Swiss Franc 13. ae. As of December 31.97 376.12 1 Australian Dollar 10.67 3.70 1.35 1 Hong Kong Dollar 1.02 19. December 31. WIB (Western Indonesian Time).41 10.06 3.299. BRI has granted stock options to Directors and employees of certain positions and levels based on criteria established by BRI.583.85 1.56 1 European Euro 15.27 1 Renminbi 2.40 1 Japanese Yen 114.59 1 Singapore Dollar 9.924.80 9.083.053.61 1 Norwegian Krone 1. 2015 and 2014.056.77 2.72 11.67 15.77 1 Danish Krone 2.021. af. Foreign currency transactions and balances BRI and Subsidiaries maintains its accounting records in Indonesian Rupiah.565.679.017.31 195.371.122.00 1 Great Britain Pound Sterling 20.38 1 New Zealand Dollar 9.

.PT Bank RakyaT IndonesIa (PeRseRo) TBk.

00 p.  Statement of cash flows . Each derivatives contract is recorded as asset when the fair value is positive and as liability when the fair value is negative. and 2 (two) representative offices located in New York and Hong Kong which are considered as separate foreign entities. 2015 and for the Year Then Ended (Expressed in millions of Rupiah.m. gains and losses . unless otherwise stated) 2. expenses. "Income Taxes". except for the profit and loss accounts which are translated at the average middle rates and equity accounts which are translated at the historical rates. Derivatives Instrument Derivatives financial instruments are valued and recognized in the consolidated statement of financial position at fair value less allowance for impairment losses. The resulting difference arising from the translation process on the above financial statements is included in equity as “Differences Arising From The Translation of Foreign Currency Financial Statements”. The implementation of the SFAS has no significant impact to the financial reporting and disclosures in the consolidated financial statement. Translation of the financial statements of Overseas Branch and Representative Offices BRI has 2 (two) branch offices in Cayman Islands and Singapore. which refers to SFAS 68: "Fair Value Measurement" (Note 2c).using Reuters spot rates at 4. Current tax expense is provided based on the estimated taxable income for the current year. The end of year balances consist of the sum of the translated monthly balances of revenues.  Equity . 46 (Revised 2014). 2015. For consolidated financial statements purposes. ai. PT BANK RAKYAT INDONESIA (PERSERO) Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31.using the average middle rate during the month.Capital Stock and Additional Paid-in Capital using historical rates. ANNUAL REPORT 2015 The Biggest National Payment Bank .667 These consolidated financial statements are originally issued in the Indonesian language. Deferred tax assets and liabilities are recognized for temporary differences between the financial and the fiscal bases of assets and liabilities at each reporting date. Derivatives receivable and payable are classified as financial assets and liabilities measured at fair value through profit or loss.m. . commitments and contingencies .00 p.  Revenues. Taxation Effective on January 1. WIB on statement of financial position reporting date. Deferred tax assets are recognized for all deductible temporary differences and carry forward of uncompensated tax losses to the extent that it is probable for temporary differences and carry forward of uncompensated tax losses to be utilized in deducting future taxable profit. expenses and profit and losses during the year. Gains or losses resulting from fair value changes are recognized in the consolidated statement of profit or loss and other comprehensive income. The fair value of derivatives instruments is determined based on discounted cash flows and pricing models or quoted prices from brokers of other instruments with similar characteristics. BRI implemented SFAS No. WIB at statement of financial position reporting date. SUMMARY OF ACCOUNTING POLICIES (continued) ag.using the spot rate published by Reuters at 4. all accounts of the overseas branch and representative offices are translated into Rupiah with the following exchange rates:  Assets and liabilities. ah.

PT Bank RakyaT IndonesIa (PeRseRo) TBk. .

which can individually be either asset or liability.668 ANNUAL REPORT 2015 The Biggest National Payment Bank These consolidated financial statements are originally issued in the Indonesian language. Segment revenue. including geographical segment. if an appeal is submitted by business unit. are shown at the applicable net amounts. For each of the consolidated entity.. Amendments to tax obligations are recorded when an assessment is received or. when the result of the appeal is determined. Segment information A segment is a distinguishable component of the business unit that is engaged either in providing certain products (business segment). retail. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply on the year when the asset is realized or the liability is settled based on tax laws that have been enacted or substantively enacted as at consolidated statement of financial position reporting date. assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis to that segment. A geographical segment is engaged in providing products or services within a particular economic environment with risks and different returns compared to other operating segments in other economic environments. They are determined before intra-group balances and transactions are eliminated as part of consolidation process. The related tax effects of the provisions for and/or reversals of all temporary differences during the year. except to the extent that they relate to items previously charged or credited to equity. are recognized as “Income Tax Benefit (Expense). unless otherwise stated) 2. Taxation (continued) The carrying amount of deferred tax assets is reviewed at each reporting date and is reduced when it is no longer probable that sufficient taxable profits will be available to compensate part or all of the benefit of the deferred tax assets. SUMMARY OF ACCOUNTING POLICIES (continued) ai. BRI and Subsidiaries presents segments operation based on BRI’s internal consolidation report that is presented to the Board of Directors as the operational decision maker. BRI’s geographical segment covers Indonesia. aj. others and subsidiaries. corporate. Assets and liabilities on deferred tax and current tax can be offset if there is a legal enforceable right to offset. PT BANK RAKYAT INDONESIA (PERSERO) Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31. which is subject to risks and rewards that are different from those of other segments. the tax effects on temporary differences and tax loss carry forward. . or in providing products within a particular economic environment (geographical segment). 2015 and for the Year Then Ended (Expressed in millions of Rupiah. Asia and United States of America. expenses. including the effect of change in tax rates. Deferred” and included in net profit or loss for the year. BRI has identified and disclosed financial information based on main business (business segment) classified into micro. income.

.PT Bank RakyaT IndonesIa (PeRseRo) TBk.

55 (Revised 2014). unless otherwise stated) 2. PT BANK RAKYAT INDONESIA (PERSERO) Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31. Use of significant accounting judgments. If BRI and Subsidiaries fail to keep these investments to maturity other than in certain specific circumstances. Furthermore. Judgments The following judgments are made by management in the process of applying BRI and Subsidiaries’ accounting policies that have the most significant effects on the amounts recognized in BRI and Subsidiaries’ consolidated financial statements as follows: Going concern BRI’s management has assessed the ability of BRI and Subsidiaries’ ability to continue as going concerns and believes that BRI and Subsidiaries have the resources to continue their businesses in the future. they will be required to reclassify the entire portfolio as available for sale securities. for example. 2015 and for the Year Then Ended (Expressed in millions of Rupiah.669 These consolidated financial statements are originally issued in the Indonesian language. The available for sale securities would therefore be measured at fair value and not at amortized cost. • Level 2: inputs other than quoted prices included in Level 1 for the assets and liabilities. at the end of the reporting period. estimates and assumptions The preparation of the BRI and Subsidiaries consolidated financial statements requires management to make judgments. based on the lowest level of input that is significant on the overall fair value measurement: • Level 1: quoted (unadjusted) market prices in active markets for identical assets or liablities accessible at the measurement date. selling an insignificant amount close to maturity. ANNUAL REPORT 2015 The Biggest National Payment Bank . • Level 3: unobservable inputs for the assets and liabilities. Held to maturity classification The securities under held to maturity classification requires significant judgment. SUMMARY OF ACCOUNTING POLICIES (continued) ak. Accordingly. Classification of financial assets and financial liabilities BRI and Subsidiaries determine the classifications of certain assets and liabilities as financial assets and financial liabilities by judging if they meet the definition set forth in SFAS No. assets and liabilities. estimates and assumptions that affect the reported amounts of revenues. which is directly or indirectly observable. BRI and Subsidiaries evaluate their intention and ability to hold such investments to maturity. the financial assets and financial liabilities are accounted for in accordance with BRI and Subsidiaries’s accounting policies disclosed in Note 2c. the management is not aware of any material uncertainties that may cast significant doubt to the BRI’s ability to continue as a going concern. and the disclosure of contingent liabilities. expenses. Fair value of financial instruments All assets and liabilities in which fair value is measured or disclosed in the consolidated financial statements can be classified in fair value hierarchy levels. Therefore. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amounts of the asset and liability affected in future periods. In making this judgment. . the consolidated financial statements have been prepared on going concern basis.

.PT Bank RakyaT IndonesIa (PeRseRo) TBk.

estimates and assumptions (continued) Judgments (continued) Contingencies The management of BRI and Subsidiaries are currently involved in legal proceedings. Such changes are reflected in the assumptions when they occur.670 ANNUAL REPORT 2015 The Biggest National Payment Bank These consolidated financial statements are originally issued in the Indonesian language. however. The estimate of the probable cost for the resolution of claims has been developed in consultation with the aid of the legal counsel handling BRI and Subsidiaries defense in this matter and is based upon an analysis of potential results. Allowance for impairment losses on loans and Sharia financing/receivables The management of BRI and Subsidiaries review its loan portfolio and financing/receivables to assess impairment on an annual basis by updating allowance for impairment losses made during the period as necessary based on the continuing analysis and monitoring of individual accounts by loan officers. BRI and Subsidiaries assess for any observable data indicating the existence of measurable decrease in the estimated future cash flows from loan portfolio before the decrease is individually identified in the portfolio. Estimates and Assumptions The key assumptions concerning the future and other key sources of estimating uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year as disclosed below. Impairment of securities BRI determines that securities are impaired based on the same criteria as financial assets carried at amortized cost. Existing circumstances and assumptions about future developments may change due to market changes or circumstances arising beyond the control of BRI and Subsidiaries. BRI and Subsidiaries use estimates in the amount and timing of future cash flows when determining the level of allowance for losses required.. SUMMARY OF ACCOUNTING POLICIES (continued) ak. Management does not believe that the outcome of this matter will affect the results of operations. PT BANK RAKYAT INDONESIA (PERSERO) Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31. resulting to future changes in the amount of allowance for losses. Such estimates are based on assumptions of several factors and actual results may differ. 2015 and for the Year Then Ended (Expressed in millions of Rupiah. Use of significant accounting judgments. This evidence may include observable data indicating that there has been an adverse change in the payment status of group borrowers. It is probable. . unless otherwise stated) 2. or national or local economic conditions that correlate with breach on assets in group. that future results of operations could be materially affected by changes in the estimates or in the effectiveness of the strategies related to these proceedings. In determining whether an impairment loss should be provided in the consolidated statement of profit or loss and other comprehensive income. BRI and Subsidiaries based its assumptions and estimates on parameters available when the consolidated financial statements were prepared.

.PT Bank RakyaT IndonesIa (PeRseRo) TBk.

technical or commercial obsolescence and legal or other limits on the use of the assets. The recoverable amount is the higher amount between fair value less costs of disposal and use of asset value (or cash-generating unit). based upon the likely timing and level of future taxable income together with tax planning strategies. b) significant changes in the manner of use of the acquired assets or the overall business strategy. estimates and assumptions (continued) Estimates and Assumptions (continued) Useful lives of premises and equipment The management of BRI estimates the useful lives of premises and equipment based on the period over which the assets are expected to be available for use. however. The amounts and timing of recorded expenses for any period are affected by changes of those factors and circumstances during recording. It is possible. for the cash-generating unit to which the asset belongs. A reduction in the estimated useful lives of premises and equipment increases the recorded operating expenses. unless otherwise stated) 2. BRI reviews its deferred tax assets at each of the consolidated statement of financial position reporting date and reduces the carrying amount to the extent that it is no longer probable that sufficient taxable income will be available to compensate part or all of the deferred tax assets. In addition. The management of BRI and Subsidiaries recognizes an impairment loss whenever the carrying amount of an asset exceeds its recoverable amount. Use of significant accounting judgments. 2015 and for the Year Then Ended (Expressed in millions of Rupiah. that future results of operations could be materially affected by changes in estimates brought about by changes in the aforementioned factors. PT BANK RAKYAT INDONESIA (PERSERO) Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31. . internal technical evaluation and experience with similar assets. estimation of the useful lives of premises and equipment is based on collective assessment of industry practice. Recognition of deferred tax assets Deferred tax assets are recognized for all unused tax losses to the extent that it is probable that the taxable income can be compensated against the losses. The factors that considered important which may lead to impairment assessment are the following: a) significant underperformance relative towards expected historical or projected future operating results. ANNUAL REPORT 2015 The Biggest National Payment Bank . SUMMARY OF ACCOUNTING POLICIES (continued) ak. Recoverable amounts are estimated for individual assets or. and c) significant negative industry or economic trends. if not possible.671 These consolidated financial statements are originally issued in the Indonesian language. Significant management judgment is required to determine the amount of deferred tax assets that can be recognized. The estimated useful lives of premises and equipment are reviewed periodically and are updated if expectations differ from previous estimates due to physical wear and tear. Impairment of non-financial assets BRI and Subsidiaries assess impairment of non-financial assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

PT Bank RakyaT IndonesIa (PeRseRo) TBk. .

regarding the accounting requirements when the parent entity presents separate financial statements as additional information. such estimates are subject to significant uncertainty. For commitments and contingencies with credit risk. PT BANK RAKYAT INDONESIA (PERSERO) Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31. BRI and BRI Agro are no longer required to provide allowance for impairment losses on non-earning assets and administrative accounts (commitments and contingencies). mortality rates and disability rates. The actuarial valuation involves making assumptions about discount rates. regarding the implementation of equity method on investments in joint ventures in associates. For non-earning assets. which was adopted from IAS 1.. am. . "Employee Benefits". 24 (Revised 2013). 2015 and for the Year Then Ended (Expressed in millions of Rupiah. 13/658/DPNP/DPnP dated December 23. Use of significant accounting judgments. which are considered relevant to the consolidated financial statements. 4 (Revised 2013). unless otherwise stated) SUMMARY OF ACCOUNTING POLICIES (continued) ak. estimates and assumptions (continued) Estimates and Assumptions (continued) Present value of employee benefit The cost of defined pension plan and other post employment benefits is determined using actuarial valuations. namely: • SFAS No. 2015. "Presentation of Financial Statements". "Investments in Associates and Joint Ventures".672 ANNUAL REPORT 2015 The Biggest National Payment Bank These consolidated financial statements are originally issued in the Indonesian language. regarding the changes of group items presentation in other comprehensive income. which was adopted from IAS 4. 15 (Revised 2013). which was adopted from IAS 19. 65. expected rates of return on assets. 2011. "Separate Financial Statements". Due to the long-term nature of these plans. Items that will be reclassified to profit or loss are presented separately from items that will not be reclassified to profit or loss.Changes in accounting policies and disclosures BRI and its subsidiaries have applied the accounting standards on January 1. the management of BRI and BRI Agro determine the impairment losses at the lower amount between the carrying value and fair value after deducting cost of disposal. BRI and BRI Agro’s management determine the impairment losses based on the difference between the carrying amount and the present value of the payment obligations that are expected to occur (when payment under the guarantee has become probable). but the management is required to continue calculating the allowance for impairment losses in accordance with the applicable accounting standards. Allowances for impairment losses on non-earning assets and commitments and contingencies In accordance with Circular Letter of Bank Indonesia (BI) No. • SFAS No. 1 (Revised 2013). al. future salary increases. Accounting treatment for the consolidated financial statements is determined in SFAS No. which removes the corridor mechanism and the contingent liabilities disclosures to simplify the clarifications and disclosures. • SFAS No. • SFAS No. which was adopted from IAS 28.

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• SFAS No. 12. and those arises from investment property that is measured using the fair value model. which are considered relevant to the consolidated financial statements. • SFAS No. This SFAS. • SFAS No. 55 (Revised 2014). provides additional criteria of hedging instrument which can not be considered as expired or terminated. • SFAS No. for which impairment losses has been recognized or reversed during the period.673 These consolidated financial statements are originally issued in the Indonesian language. unless otherwise stated) 2. 60 (Revised 2014). 50 (Revised 2014). ANNUAL REPORT 2015 The Biggest National Payment Bank . 12 (Revised 2009) and IFAS No. “Impairment of Assets”. 4 (Revised 2009). PT BANK RAKYAT INDONESIA (PERSERO) Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31. among other. establishes principles for presentation and preparation of consolidated financial statements when an entity controls one or more other entities. • SFAS No. This SFAS replaces SFAS No. 67. namely: (continued) • SFAS No. This disclosures are related to an entity’s interest in other entities. among other. 2015 and for the Year Then Ended (Expressed in millions of Rupiah. This SFAS provides additional regulation for deferred tax assets and liabilities arises from a non- depreciable assets measured using the revaluation model. This SFAS replaces SFAS No. provides additional offset disclosures stipulation with quantitative and qualitative information. 46 (Revised 2014). SUMMARY OF ACCOUNTING POLICIES (continued) am. ”Consolidated Financial Statements”. “Financial Instruments: Recognition and Measurement”. • SFAS No. This SFAS provides criteria on legally enforceable right to set off the recognized amounts and settlement criteria on a net basis. ”Disclosure of Interests in Other Entities”. which was adopted from IFRS 11. which was adopted from IFRS 7. . 4 (Revised 2009) regarding accounting treatment for consolidated financial statements. This SFAS includes all disclosures that were previously stipulated in SFAS No. 68. which was adopted from IAS 32. “Financial Instruments: Presentation”. 12 (Revised 2009) and SFAS No. “Financial Instruments: Disclosures”. ”Fair Value Measurement”. This SFAS removes the option of proportional consolidation method to record joint venture. which was adopted from IAS 12. 15 (Revised 2009).Changes in accounting policies and disclosures (continued) BRI and its subsidiaries have applied the accounting standards on January 1. 2015. “Income Taxes”. This SFAS provides additional disclosure requirements for each individual asset or a cash- generating unit. 66. The impact to the consolidated financial statements on the adoption of the accounting standards mentioned above has been disclosed in the relevant notes to the consolidated financial statements. SFAS No. ”Joint Arrangements”. 48 (Revised 2014). which was adopted from IFRS 10. This SFAS. which was adopted from IFRS 12. which was adopted from IFRS 13. also stipulation to record financial instruments at the measurement date and after initial recognition. which was adopted from IAS 36. • SFAS No. • SFAS No. which was adopted from IAS 39. and transfers of financial instruments disclosures. provides guidance on how to determine fair value when it was required or permitted. 65.

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