COPY OF THE REGULATION OF MINISTER OF FINANCE OF THE REPUBLIC OF INDONESIA NUMBER 237/PMK.02/2012 CONCERNING

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COPY OF THE REGULATION OF MINISTER OF FINANCE NUMBER 237/PMK.02/2012 CONCERNING PROCEDURES OF PROVISION, CALCULATIONS, PAYMENTS, AND ACCOUNT FOR THE RICE SUBSIDY FOR PEOPLE WITH LOW INCOME BY THE GRACE OF GOD ALMIGHTY MINISTER OF FINANCE, Considering : a. whereas in order to implement the activities to provide rice subsidy for People with low income people, it has been allocated funds to subsidize rice for people with low income in the Amendment of State Revenues And Expenditure Budget; b. whereas in accordance with the Presidential Instruction No. 3 of 2012 on Public Procurement of Paddy / Rice and Rice Distribution By Government, Public Company or Perusahaan Umum (Perum) BULOG has assigned by the Government to implement the distribution of rice subsidies for people with low income; c. whereas in order to improve the accountability of budget execution and accountability of rice subsidy for people with low income, it is necessary to rearrange the procedures of provision, calculations, payments, and account for rice subsidy for people with low income which previously had been regulated in the Regulation of the Minister of Finance No. 150/PMK.02 / 2011; d. whereas based on the considerations as referred to in points a, b and c, it is necessary to stipulate Regulation of the Minister of Finance on the procedures of provision, calculations, payments, and account for rice subsidy for people with low income; In the view of : 1. Law No. 17 of 2003 on State Finance (State Gazette of the Republic of Indonesia of 2003 Number 47, Supplement of The State Gazette of the Republic of Indonesia Number 4286);

- 2-2. Law Number 19 Year 2003 on State-Owned Enterprises (State Gazette of the Republic of Indonesia of 2003 Number 70, Supplement of The State Gazette of the Republic of Indonesia Number 4297); 3. Law Number 1 of 2004 on State Treasury (State Gazette of the Republic of Indonesia of 2004 Number 5, Supplement of The State Gazette of the Republic of Indonesia Number 4335); 4. Law Number 15 of 2004 on Audit of State Finance Management and Responsibility (State Gazette of the Republic of Indonesia of 2004 Number 66, Supplement of The State Gazette of the Republic of Indonesia Number 4400); 5. Law No. 19 of 2012 on State Revenues And Expenditure Budget Fiscal Year of 2013 (State Gazette of the Republic of Indonesia of 2012 Number 228, Supplement of The State Gazette of the Republic of Indonesia Number 5361); 6. Government Regulation No. 7 of 2003 on the Establishment of Public Company or Perusahaan Umum (Perum) BULOG (State Gazette of the Republic of Indonesia of 2003 Number 8) as has been amended by Government Regulation No. 61 of 2003 (State Gazette of the Republic of Indonesia of 2003 Number 142); 7. Government Regulation No. 45 of 2005 on the Establishment, Management, Supervision and Dissolution of the State Owned Enterprise (State Gazette of the Republic of Indonesia of 2005 Number 25, Supplement of The State Gazette of the Republic of Indonesia Number 4556); 8. Government Regulation No. 8 of 2006 on Financial Reporting and Performance of Government Agencies (State Gazette of the Republic of Indonesia of 2006 Number 25, Supplement of The State Gazette of the Republic of Indonesia Number 4614); 9. Presidential Decree No. 42 of 2002 on Implementation Guidelines of State Revenues And Expenditure Budget Fiscal (State Gazette of the Republic of Indonesia of 2002

- 3 - Number 73, Supplement of The State Gazette of the Republic of Indonesia Number 4212) as has been amended by Presidential Decree Number 53 of 2010; 10. Presidential Regulation No. 24 of 2010 on the Status, Duties and functions of the State Ministries and the Organizational Structure, Duties and Functions of Echelon I of State Ministries as has been amended by Presidential Decree Number 92 of 2011; 11. Regulation of Minister of Finance No. 91/PMK.05/2007 concerning Standard Account Chart; 12. Regulation of Minister of Finance No. 196/PMK.05/2008 on Procedures and Presentation of Financial Statements of Subsidy Expenditure and Other Expenditures on the Section of Budget Funding and Calculation; 13. Regulation of Minister of Finance No. 250/PMK.05/2010 on Procedures of State Revenues and Expenditure Budget Disbursement on State Treasurer s Liabilities In State Treasury Service Office; 14. Regulation of Minister of Finance No. 256/PMK.05/2010 on Procedures of Procedures on Reserve Fund Deposit and Disbursement; 15. Regulation of Minister of Finance No. 160/PMK.02/2012 on Guidelines for Preparation and Approval of Budget Implementation List; BE IT HEREBY RESOLVED: To enact : REGULATION OF MINISTER OF FINANCE ON PROCEDURES OF PROVISION, CALCULATIONS, PAYMENTS, AND ACCOUNT FOR THE RICE SUBSIDY FOR PEOPLE WITH LOW INCOME. Article 1 In this Regulation of Minister, the following terms shall mean: 1. Public Company or Perusahaan Umum (Perum) BULOG is a State Owned Company which is established under

- 4 - Government Regulation No. 7 of 2003 on the Establishment of Public Company or Perusahaan Umum (Perum) BULOG as has been amended by Government Regulation No. 61 of 2003. 2. Verification is an activity to check the implementation of rice provision and / or distribution. 3. Proxy of Budget User or Kuasa Pengguna Anggaran, hereinafter referred to as KPA is an official who obtained the authority and responsibility from Budget Users to utilize the budget authorized to them. 4. Letter of Stipulation of Working Plan and Budget of the State Treasurer or Surat Penetapan Rencana Kerja dan Anggaran Bendahara Umum Negara, hereinafter referred to as SP RKA - BUN is a document determining budget allocation according to organizational units and programs and broken down into working units based on the review of the planning and budgeting documents that contain activities of the Budget Division of State Treasury. 5. Budget Allocation List or Daftar Isian Pelaksanaan Anggaran hereinafter referred to as DIPA is a document of budget allocation prepared by the Budget User / KPA and ratified by the Minister of Finance or an official authorized by the Minister of Finance. 6. Subsidy Reserve Fund Account / Public Service Obligation (PSO) is the account of the Minister of Finance as State Treasurer that is used to save the Subsidy Reserve Fund Account / Public Service Obligation (PSO). 7. Purchase price of rice or Harga Pembelian Beras hereinafter referred to as HPB is the government s price of rice purchase to the Public Company (Perum) BULOG. 8. Budget Master is the framework of cost and revenue budget of Public Company (Perum) BULOG to implement the duties from the Government. Article 2

- 5 - (1) In order to stabilize the national economy, protect farmers' incomes, increase food security and rural economic development, Public Company (Perum) BULOG has been assigned by the Government to provide and distribute subsidized rice for people with low income. (2) In order to implement the assignment from the Government as referred to in paragraph (1), Public Company (Perum) BULOG prepares a Master Budget to be determined in the Working Plan and Company s Budget. (3) The Master Budget as referred to in paragraph (2) includes, such as, HPB. (4) HPB as referred to in paragraph (3) shall be prepared by the Public Company (Perum) BULOG along with KPA and the Ministry of Finance, which is based on the Calculation Cost Structure HPB as stated in the Appendix which is an integral part of this Regulation. (5) Costs that may be included in the calculation of HPB are only the costs related to the implementation of such duties as referred to in paragraph (1) in accordance with healthy, economical, efficient and effective practices. (6) HPB as referred to in paragraph (3) shall be determined in the Law on State Revenues And Expenditure Budget or Anggaran Pendapatan dan Belanja Negara (APBN) and / or its amendment. Article 3 (1) In order to implement the activities of the rice subsidy for people with low income, the Minister of Finance as Budget User appoints Director General of Social Empowerment and Poverty Alleviation - Ministry of Social Affairs as the KPA. (2) KPA as referred to in paragraph (1) issued a decision to stipulate: a. officials who are authorized to perform the action that resulted in budget expenditure / person in charge of the activities / commitments setting person, which

- 6 - hereinafter referred to as Committing Setting Officials or Pejabat Pembuat Komitmen (PPK); and b. officials given the authority to verify the bill to the State and to sign SPM, hereinafter referred to as Officials Signing SPM. (3) Copy of the decision as referred to in paragraph (2) shall be submitted to the Head of the State Treasury Services Office of partners as the proxy of BUN. (4) KPA prepares technical guidelines for the implementation of rice subsidy rice people with low income as its duties and responsibilities. Article 4 (1) Quantum of subsidy rice distribution for people with low income is calculated by: a. duration of distribution; b. numbers of Target Households or Rumah Tangga Sasaran (RTS); and c. RTS allocation per month. (2) The Amount of Rice subsidy for people with low income is calculated based on the difference between HPB and selling price in the distribution points. Article 5 The allocation of funds for implementing rice subsidy for people with low income in State Revenues and Expenditures Budget and / or its amendment is obtained by taking into account the quantum of distribution of rice subsidy for people with low income as referred to in Article 4 paragraph (1) and the amount of rice subsidy for people with low income as referred to in Article 4 (2). Article 6

- 7 - (1) Funds for the purposes of implementation of the rice subsidy for people with low income, is allocated in State Revenues and Expenditures Budget and / or its amendment. (2) Directorate General of Budget, Ministry of Finance delivers a notice regarding the ceiling of funding of implementation of the rice subsidy for people with low income to the KPA. (3) Based on the notification as referred to in paragraph (2), KPA submits the proposal to provide fund for the implementation of activity of distribution of rice subsidy to the Director General of Budget, Ministry of Finance. (4) Based on the proposal as referred to in paragraph (3), the Director General of Budget, Ministry of Finance issues SP RKA - BUN. (5) Based on SP RKA - BUN as referred to in paragraph (4), KPA prepares and sign DIPA to obtain approval in accordance with the provisions of legislation. (6) DIPA which has been approved as referred to in paragraph (5) is the basis of the payment implementation of funds for the activity regarding subsidy rice for people with low income. Article 7 (1) In the event of the fund needed to support the assignment as referred to in Article 2 do is not sufficient, Public Company (Perum) BULOG can apply for bank credit guaranty to the Minister of Finance that its copied is delivered to KPA. (2) The application as referred to in paragraph (1) shall be attached accompanied by Master Budget of Public Company (Perum) BULOG. (3) Based on the results of the evaluation of the application as referred to in paragraph (1) The Minister of Finance may issue a bank credit guaranty approval. Article 8

- 8 - (1) Rice subsidy payments for people with low income to the Public Company (Perum) BULOG is conducted for the rice that has been purchased by the Public Company (Perum) BULOG, both for the rice that has already distributed or is still in the form of inventory in Public Company (Perum) BULOG. (2) The inventories as referred to in paragraph (1) are the procurement conducted in the previous year that has not been paid and the procurement of the relevant year. Article 9 (1) There shall be a verification on the implementation of the supply and distribution of rice subsidy for people with low income. (2) The verification result as referred to in paragraph (1) is used by Public Company (Perum) BULOG as the basis for calculating the realization of rice subsidy for people with low income. (3) Further provisions concerning the verification procedures are stipulated by KPA. Article 10 The Rice subsidy Invoice for people with low income is proposed by the Board of Directors of Public Corporation (Perum) BULOG to KPA by attaching documents of recapitulation of rice purchase signed by the Board of Directors and a statement of head of the regional divisions all over containing for the rice inventory possessed. Article 11 The procedures for fund disbursement for implementing rice subsidy activities for people with low income rice are conducted in accordance with the provisions of the legislation. Article 12 (1) The remaining implementation budget for rice subsidy activity for people with low income that has not been able to pay until the end of December of the current year as a result

- 9 - of the verification that has not been able to do as referred to in Article 9, is posted on the Subsidy Reserve Fund Account / Public Service Obligation (PSO) in accordance with the provisions of legislation. (2) The placement of funds in the Reserve Account Subsidy / Public Service Obligation (PSO) as referred to in paragraph (1), is as much as the invoice value and maximum is the value of remaining of DIPA ceiling. (3) The disbursement Reserve Account Subsidy / Public Service Obligation (PSO) as referred to in paragraph (2) shall be implemented in accordance with the provisions of the legislation. Article 13 Public Company (Perum) BULOG is formally and materially responsible for the implementation and utilization of funds for the implementation of subsidy rice for people with low income. Article 14 KPA is responsible for distribution of fund for the implementation of subsidy rice activities for people with low income. Article 15 (1) Public Company (Perum) BULOG shall submit a report of the realization of the activities related to the implementation of rice subsidy for people with low income containing the report the quantity of inventory, procurement, distribution, revenue from the sale of rice along with the costs incurred, and projected operations until the end of each quarterly to the Minister of Finance cq. Directorate General of Budget, Minister for State Owned Company cq. Deputy of Primary Industries and the Minister of Social Affairs cq Director General of Social Empowerment and Poverty Alleviation as the KPA. (2) KPA shall prepare and submit a financial report on expenditure for rice subsidy for people with low income to

- 10 - the Minister of Finance cq. Directorate General of the Budget that includes: a. Budget Realization Report or Laporan Realisasi Anggaran (LRA); b. Balance sheet; and c. Notes on the Financial Statements or Catatan atas Laporan Keuangan (CaLK). Article 16 KPA organizes accounting and reporting in accordance with the provisions of the legislation. Article 17 Lending Credit Bank of Public Company (Perum) BULOG shall submit a report of credit distribution to Public Company (Perum) BULOG quarterly to the Minister of Finance cq. Directorate General of Budget, Minister for State Owned Company cq. Deputy of Primary Industries, President Director of Public Company (Perum) BULOG and the Minister of Social Affairs cq Director General of Social Empowerment and Poverty Alleviation as the KPA. Article 18 (1) Concerning the implementation of the rice subsidy for people with low income, there should be conducted an inspection by an authorized auditor in accordance with the provisions of the legislation. (2) The report of audit as referred to in paragraph (1) shall be submitted to the KPA, the Directorate General of Budget, Ministry of Finance, and Directorate General of Treasury, Ministry of Finance. (3) In the event of based on the results of the examination as referred to in paragraph (1), it is stated that the amount of fund for implementation of the rice subsidy activity for people with low income is more than the amount paid by the Government to the Public Company (Perum) BULOG, the payment shortfall shall be proposed to be budgeted in State

- 11 - Revenues and Expenditures Budget and / or its amendment in accordance with the provisions of the legislation. (4) In the event of based on the results of the examination as referred to in paragraph (1), it is stated that the amount of fund for the implementation of the rice subsidy activity for people with low income is less than the amount paid by the Government to the Public Company (Perum) BULOG, the excess of the payment shall be paid up to the State Treasury as the Non-Tax State Revenue in accordance with the provisions of the legislation. Article 19 In the event of Public Company (Perum) BULOG uses bank credit for performing the duties in accordance with this Regulation of Minister, any revenue of Public Company (Perum) BULOG, either from the management of the bank credit of Public Company (Perum) BULOG as the assignment of Government, as well as those from disbursement of rice subsidy for people with low income, shall be directly paid up to the lending bank as repayment of credit and bank lending interest of public Company (Perum) BULOG. Article 20 In order to implement the subsidy rice activity for people with low income income, the Ministry of Finance and the Ministry of Social Affairs shall conduct monitoring and evaluation activities in accordance with their authorities. Article 21 Regarding the transition of KPA from Public Company (Perum) BULOG to the Directorate General of Social Empowerment and Poverty Alleviation - Ministry of Social Affairs, there are the following provisions: a. Public Company (Perum) BULOG handovers debt and / or receivable to the KPA not more than March 31, 2013; b. The handover as referred to in point a is set forth in Minute of Delivery and Acceptance, signed by the

- 12 - President Director of Public Company (Perum) BULOG and KPA; and c. The Minute of Delivery and Acceptance as referred to in point b shall be attached in the financial statement. Article 22 This Regulation of Minister applies as far as fund for the implementation of the rice subsidy activity for people with low income is still budgeted / provided in Expenditures Budget and State Revenues and / or its Amendment. Article 23 At the time this regulation comes into force, the Regulation of Minister of Finance No. 150/PMK.02/2011 on Procedures of Provision, Calculations, Payments And Account for the Rice Subsidy For People With Low Income, is revoked and is declared inapplicable. Article 24 This Regulation of Minister shall come into force on January 1, 2013. For public cognizance, this Regulation of Minister shall be promulgated by placing it in the State Gazette of the Republic of Indonesia. Stipulated in Jakarta on December 26, 2012 MINISTER OF FINANCE OF THE REPUBLIC OF INDONESIA, Signed, AGUS D.W. MARTOWARDOJO Promulgated in Jakarta on December 26, 2012 MINISTER OF LAW AND HUMAN RIGHTS THE REPUBLIC OF INDONESIA,

- 13 - Signed AMIR SYAMSUDIN STATE GAZETTE OF 2012 NUMBER 1336

APPENDIX REGULATION OF THE MINISTER OF FINANCE NUMBER 237/PMK.02/2012 ON PROCEDURES OF PROVISION, CALCULATIONS, PAYMENTS, AND ACCOUNT FOR THE RICE SUBSIDY FOR PEOPLE WITH LOW INCOME MINISTER OF FINANCE COST STRUCTURE OF HPB CALCULATION A. Initial inventory B. Production, Overhead and Management Cost 1. Production Cost a. Domestic Procurement Cost - Paddy procurement - Rice procurement b. Foreign Procurement Cost c. Opslag / Weigh Cost d. Survey Cost e. Milling Rice Cost 2. Overhead Cost a. Storage and Maintenance Cost b. Movement Cost c. Rebagging Cost d. Insurance Cost and Import Duty e. Quarantine / Survey / Surcharge Costs f. Packaging Sacks Cost 3. Management Cost 4. Margin Fee C. Bank interest and Administration D. Quantity of Inventories possessed of (A + B + C) E. Final inventory

- 15 - F. Production Cost of goods distributed (D - E) G. Distribution costs H. Total Budget (F + G) I. Amount distributed J. HPB per kilogram (H / I) MINISTER OF FINANCE OF THE REPUBLIC OF INDONESIA, Signed, AGUS D.W. MARTOWARDOJO