DISCLAIMER: This is an unofficial translation and provided for ......UNOFFICIAL TRANSLATION BNCTL Decree-Law and By-Laws 1 [DISCLAIMER: This is an unofficial translation and provided

UNOFFICIAL TRANSLATION BNCTL Decree-Law and By-Laws

1

[DISCLAIMER: This is an unofficial translation and provided for reference only.]

DECREE-LAW NO. 16/2019

of 10 July

FIRST AMENDMENT TO DECREE-LAW 3/2011, OF 26 JANUARY, AND THE

BY-LAWS OF BANCO NACIONAL DE COMÉRCIO DE TIMOR-LESTE, S.A.

The UNTAET Executive Order 2001/8, of 1 December, established the Microfinance

Institute of Timor-Leste.

Decree-Law 3/2011, of 26 January, considered said executive order to be "absolutely

inadequate to the reality", and transformed the Microfinance Institute into a commercial

company, incorporated as a State-owned joint stock company named "Banco Nacional de

Comércio de Timor-Leste, S.A.", approving its By-Laws as an annex thereto.

Accordingly, Banco Nacional de Comércio de Timor-Leste, S.A. (BNCTL) replaced the

Microfinance Institute of Timor-Leste "in its legal personality, becoming responsible for all

its assets, rights and obligations"; and it was created "with the aim of reducing poverty and

encouraging the development of economic activities", particularly in rural areas.

Over the years, under banking license BPA/B-05/2011, BNCTL has expanded its network

of branches throughout the national territory, implemented a new core banking system that

complies with the highest international standards, which allowed implementing its own

network of automatic teller machines (ATMs) and payment terminals (POSs), thus

contributing to a wider access to banking services for the population of the entire country.

It has also received successive capital increases from the State, which mirror the investment

the latter intends to see carried out in the promotion of economic activity and the role it

intends BNCTL to play.

After seven years since its creation, BNCTL is suffering from several internal and external

constraints. There is a need to adapt its framework, by-laws and structure to changing

requirements of the State’s financial activities and Timor-Leste’s legal system.

Firstly, the recent entry into force of Law 10/2017, of 17 May, approving a New

Commercial Companies Law, and of Decree-Law 16/2017, of 17 May, approving a new

Business Registration framework, requires adjusting BNCTL’s By-Laws to those new

business legal frameworks.

On the other hand, it was noticed that BNCTL’s current corporate governance structure,

especially its Board of Directors, could become closer to international good governance


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practices applicable to financial companies, leading to a separation between supervision and

operational management functions and to effective independent internal control

mechanisms. BNCTL's current corporate governance structure has made it difficult for

foreign banks to recognize it as a reliable correspondent bank and, therefore, hindered the

internationalization of its banking operations.

This legislative reform opportunity is also being used to revise incompatibility rules

applicable to members of corporate bodies. The President of the Authority of Oe-Cusse

Ambeno Special Administrative Region is now included therein by analogy with other

holders of political offices. Candidates for elective public office as well as leaders and

members of bodies of political parties are now excluded from those rules, because those

were disproportionate constraints on political participation rights of Constitutional dignity.

In conclusion, in addition to the opportunity to revise incompatibility rules applicable to

members of corporate bodies, this decree-law amends Decree-Law 3/2011, of 26 January,

and BNCTL’s By-Laws annexed thereto, in compliance with new business legal

frameworks, namely, Law 10/2017, of 17 May, which approves a New Commercial

Companies Law, and Decree-Law 16/2017, of 17 May, which approves a new Business

Registration framework. It also introduces a new corporate governance structure in

BNCTL’s By-Laws, in accordance with international standards for financial sector,

separating between executive and non-executive Board members, with a clear segregation

of powers and duties. In this way, it is intended that a competent and efficient executive

management can be performed by professional executive directors with experience in the

banking sector, while maintaining non-executive directors in charge of the Bank’s strategic

vision, at the service of superior interests of Timorese People.

The Central Bank of Timor-Leste was previously informed about the amendments to these

By-Laws, and its written consent was obtained.

Thus, pursuant to Article 115(1)(e) and (i) of the Constitution of the Republic, the

Government decrees the following to have the force of law:

Article 1

Object

This decree-law approves the first amendment to Decree-Law 3/2011, of 26 January,

which transforms the Microfinance Institute into a State-Owned Joint Stock Company, and

to the By-Laws of Banco Nacional de Comércio de Timor-Leste, S.A. (BNCTL), annexed

thereto.

Article 2

Amendments to Decree-Law 3/2011, of 26 January

Articles 5, 7, 8 and 11 of Decree-Law 3/2011, of 26 January, shall be amended and read as

follows:

“Article 5

(...)


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1. The fully paid-up share capital amounts to twenty-two million and five hundred

thousand US dollars (USD 22,500,000.00).

2. (...)

3. (...)

Article 7

(...)

1. (...)

(a) (...)

(b) (...)

(c) (...)

(d) (...)

(e) A legal person whose director or shareholder is a spouse, ascendant or descendant

at any degree, or a collateral relative up to second degree, including those linked by

legal adoption, of any director, Audit Board member or manager of BNCTL, S.A.

with powers or right to bind it either alone or jointly with someone else.

2. (...)

Article 8

Remuneration of corporate bodies

Without prejudice to banking sector laws, a remuneration policy for members of corporate

bodies shall be approved by means of a shareholder resolution, following a proposal from

the Nomination, Evaluation and Remuneration Committee, which shall take into

consideration criteria of financial sustainability, medium- and long-term goals of BNCTL,

S.A., and no excessive risk-taking incentive, amongst others.

Article 11

(...)

BNCTL, S.A. must disclose updated information on its official website and make it

available to the public, in both official languages and in English, on the following topics:

(a) (...)

(b) (...)

(c) (...)

(d) (...)

(e) (...)

(f) (...)

(g) (...)

(h) Remuneration policy for members of corporate bodies.”

Article 3

Amendment to By-Laws annexed to Decree-Law 3/2011, of 26 January

By-Laws of Banco Nacional de Comércio de Timor-Leste, S.A., annexed to Decree-Law

3/2011, of 26 January, shall read as new Annex I to Decree-Law 3/2011, of 26 January,

annexed hereto.


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Article 4

Addenda to Decree-Law 3/2011, of 26 January

Articles 8-A and 8-B shall be added to Decree-Law 3/2011, of 26 January, and read as

follows:

“Article 8-A

Incompatibilities and conflicts of interest

1. The following persons cannot be appointed as members of BNCTL, S.A.’s corporate

bodies:

(a) President of the Republic in office;

(b) Members of National Parliament in office;

(c) Members of Government in office, except for purposes of representing the State as

shareholder, under Article 6(1);

(d) President of the Authority of Oe-Cusse Ambeno Special Administrative Region;

(e) Members of municipal bodies in office;

(f) Judges and Public Prosecutors in office;

(g) Holders of management and leadership positions in the State’s direct or indirect

administration, or in independent entities, in office;

(h) Holders of management and leadership positions in the National Parliament,

Courts, Public Prosecuting Department, or Office of the President of the Republic,

in office;

(i) Public servants and Public Administration agents in office;

(j) Anyone holding financial interests, or interests of any kind, which may be deemed

incompatible with fulfilling duties in BNCTL, S.A.;

(k) Anyone in consanguinity kinship, or linked by legal adoption, up to second degree,

with a member of BNCTL, S.A.’s corporate bodies in office.

2. A person under subparagraphs (i) or (k) above can be appointed as member of the

Audit Board or of the Nomination, Evaluation and Remuneration Committee if duly

authorized by the Government members responsible for finance and economic

development.

3. Without prejudice to Article 8-A(2), a member of a corporate body in office who

accepts to perform any position or duties listed under Article 8-A(1) must resign to

his/her term of office in BNCTL, S.A. before accepting such position or duties.

4. During their own term of office, members of corporate bodies cannot execute any

employment contract or services agreement with BNCTL, S.A. to be in force after such

term expires, except by means of a joint dispatch of the Government members

responsible for finance and economic development justifying its need or convenience.

Article 8-B

Disclosure of personal and financial interest

1. Directors and Audit Board members shall be subject to requirements on disclosure of

personal and financial interest applicable to banks.

2. The Company Secretary shall send relevant documents to the Central Bank and keep a

register of disclosed information for the purposes of this Article, which must be

updated every time there is a new disclosure.”


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Article 5

Republication

Decree-Law 3/2011, of 26 January, hereby amended and corrected, as well as by-laws

annexed thereto, are republished as an annex hereto.

Article 6

Business Registration

Registration of BNCTL’s By-Laws as amended under Article 3 shall be entered on the

registrar’s own initiative, and publication of this decree-law in the Official Gazette shall be

sufficient proof for such purpose.

Article 7

Entry into force

This decree-law shall enter into force on the day following its publication.

Approved in Council of Ministers, on 13 February 2019.

The Prime Minister,

________________________

Taur Matan Ruak

The Acting Minister Coordinator for Economic Affairs,

________________________

Agio Pereira

The Acting Minister of Finance, ________________________

Sara Lobo Brites

Promulgated on 5 July 2019

Be it published.

The President of the Republic,

________________________

Dr. Francisco Guterres Lú Olo


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ANNEX

Republication of Decree-Law 3/2011, of 26 January

DECREE-LAW 3/2011, of 26 January

TRANSFORMING THE MICROFINANCE INSTITUTE INTO A STATE-

OWNED JOINT STOCK COMPANY

The approval of this decree-law reflects the Government’s commitment to providing credit

facilities to the people of Timor-Leste as a mean to alleviate poverty and to promote

economic development, particularly in rural areas.

The UNTAET Executive Order 2001/8, of 1 December, which established the

Microfinance Institute of Timor-Leste, has now proved to be absolutely inadequate to the

reality of said Institute and the State of Timor-Leste. Therefore, transforming this Institute

into a State-owned joint stock company is required in order to comply with the laws of

Timor-Leste as well as to expand its activities in the banking and finance sector.

Thus, pursuant to Article 115(e) and (i) of the Constitution, the Government decrees the

following to have the force of law:

Article 1

Type, name and duration

1. The Microfinance Institute of Timor-Leste is hereby transformed into a State-owned

joint stock company, and re-named Banco Nacional de Comércio de Timor-Leste, S.A.,

hereinafter referred to as BNCTL, S.A..

2. BNCTL, S.A. shall exist for an indefinite period.

3. This decree-law shall be sufficient proof for all legal purposes, including for business

registration purposes.

4. By-laws of BNCTL, S.A. are published as an annex to this decree-law, of which they

form an integral part.

Article 2

Legal framework

1. BNCTL, S.A. is solely subject to the supervision of the Central Bank, and it shall be

regulated by this decree-law, its by-laws, general and specific banking sector rules,

commercial companies’ laws and such other applicable laws.

2. BNCTL, S.A. shall not be subject to general or specific rules applicable to the public

sector unless expressly stated otherwise.

3. Relationships between BNCTL, S.A. and the State or other public entities shall not

result in a situation that may impede, distort or restrict competition in whatever form.

4. Breaches and infractions of this decree-law shall be subject to penalties established in

the banking sector laws.

5. Without prejudice to banking sector laws, the Central Bank may issue such rules,

instructions and guidelines or take any other action it deems necessary to perform its

powers and duties under this decree-law.


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Article 3

Replacement

BNCTL, S.A. replaces the Microfinance Institute of Timor-Leste in its legal personality,

becoming responsible for all its assets, rights and obligations.

Article 4

Objects

1. BNCTL, S.A.’s objects shall be the provision of financial and banking services with the

aim of reducing poverty and encouraging the development of economic activities

throughout the territory of Timor-Leste.

2. To achieve the objective defined in Article 4(1), BNCTL, S.A. shall carry out banking

activities in accordance with the law and its banking license.

Article 5

Share Capital

1. The fully paid-up share capital amounts to twenty-two million and five hundred

thousand US dollars (USD 22,500,000.00).

2. The State owns all shares representing BNCTL, S.A. share capital.

3. The General Meeting shall resolve on share capital increases, and their payment,

whenever required to expand BNCTL, S.A.’s activities in a balanced manner.

Article 6

Role of the State as shareholder

1. The rights of the State as shareholder shall be performed by a person appointed by

means of a joint dispatch of the Government members responsible for finance and

economic development.

2. By means of a joint dispatch, Government members referred to in Article 6(1), may

issue written directions regarding the performance of rights of the State as shareholder.

Article 7

Transactions with related parties

1. Without prejudice to banking sector laws, the following persons shall be considered as

related to BNCTL, S.A.:

(a) Sovereign bodies;

(b) Public institutions;

(c) A legal person in which the State holds equity, or which is directly or indirectly

controlled by the State;

(d) A legal person whose director or shareholder is, at the same time, a director, an

Audit Board member or a manager of BNCTL, S.A. with powers or right to bind it

either alone or jointly with someone else;

(e) A legal person whose director or shareholder is a spouse, ascendant or descendant

at any degree, or a collateral relative up to second degree, including those linked by

legal adoption, of any director, Audit Board member or manager of BNCTL, S.A.

with powers or right to bind it either alone or jointly with someone else.

2. Rules set forth in banking sector laws regarding related-party transactions, including any


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instruction issued by the Central Bank, shall apply to transactions between BNCTL, S.A.

and the persons listed in Article 7(1).

Article 8

Remuneration of corporate bodies

Without prejudice to banking sector laws, a remuneration policy for members of corporate

bodies shall be approved by means of a shareholder resolution, following a proposal from

the Nomination, Evaluation and Remuneration Committee, which shall take into

consideration criteria of financial sustainability, medium- and long-term goals of BNCTL,

S.A., and no excessive risk-taking incentive, amongst others.

Article 8-A

Incompatibilities and conflicts of interest

1. The following persons cannot be appointed as members of BNCTL, S.A.’s corporate

bodies:

(a) President of the Republic in office;

(b) Members of National Parliament in office;

(c) Members of Government in office, except for purposes of representing the State as

shareholder, under Article 6(1);

(d) President of the Authority of Oe-Cusse Ambeno Special Administrative Region;

(e) Members of municipal bodies in office;

(f) Judges and Public Prosecutors in office;

(g) Holders of management and leadership positions in the State’s direct or indirect

administration, or in independent entities, in office;

(h) Holders of management and leadership positions in the National Parliament,

Courts, Public Prosecuting Department, or Office of the President of the Republic,

in office;

(i) Public servants and Public Administration agents in office;

(j) Anyone holding financial interests, or interests of any kind, which may be deemed

incompatible with fulfilling duties in BNCTL, S.A.;

(k) Anyone in consanguinity kinship, or linked by legal adoption, up to second degree,

with a member of BNCTL, S.A.’s corporate bodies in office.

2. A person under subparagraphs (i) or (k) above can be appointed as member of the

Audit Board or of the Nomination, Evaluation and Remuneration Committee if duly

authorized by the Government members responsible for finance and economic

development.

3. Without prejudice to Article 8-A(2), a member of a corporate body in office who

accepts to perform any position or duties listed under Article 8-A(1) must resign to

his/her term of office in BNCTL, S.A. before accepting such position or duties.

4. During their own term of office, members of corporate bodies cannot execute any

employment contract or services agreement with BNCTL, S.A. to be in force after such

term expires, except by means of a joint dispatch of the Government members

responsible for finance and economic development justifying its need or convenience.


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Article 8-B

Disclosure of personal and financial interest

1. Directors and Audit Board members shall be subject to requirements on disclosure of

personal and financial interest applicable to banks.

2. The Company Secretary shall send relevant documents to the Central Bank and keep a

register of disclosed information for the purposes of this Article, which must be

updated every time there is a new disclosure.

Article 9

Strategic Plan

1. Every year, the Board of Directors shall prepare a strategic plan and submit it, at least 30

days before the annual General Meeting, to the Government members responsible for

finance and economic development.

2. Each strategic plan shall span a period of at least three years, and it shall cover the

following matters:

(a) Objectives of BNCTL, S.A.;

(b) Forecasts for the business environment where BNCTL operates;

(c) Business strategies of BNCTL, S.A.;

(d) Investment and funding programs of BNCTL, S.A.;

(e) Financial targets and projections for BNCTL, S.A.;

(f) Quarterly and annual budgets;

(g) Dividend policy of BNCTL, S.A.;

(h) Status of compliance of BNCTL, S.A.’s operations with banking sector laws,

including prudential regulations, instructions and guidelines issued by the Central

Bank;

(i) An analysis of previous performance against corporate plans and set targets;

(j) An analysis of factors that can affect achieving targets, or can create significant

financial risks for BNCTL, S.A. or for the State of Timor-Leste;

(k) Human resources and employment strategies; and

(l) Relationships with stakeholders and strategies for managing those.

3. A plan shall also cover any other issues or matters requested by means of a joint

dispatch issued by the Government members responsible for finance and economic

development.

4. The Board of Directors shall, within a reasonable timeframe, inform the Government

members responsible for finance and economic development about any important

changes to the strategic plan or any issues or matters that might significantly prevent

achieving its objectives.

Article 10

Duty to provide information

1. Without prejudice to rules of commercial companies’ law on provision of information

to shareholders, BNCTL, S.A. shall submit to the Central Bank, Government members

responsible for finance and economic development, and National Parliament, the

following details:

(a) Within 30 days of each calendar quarter, a fair and true summary of its quarterly


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balance sheet;

(b) Within 4 months of the end of each financial year, a fair and true summary of its

balance sheet;

(c) Within 4 months of the end of each financial year, an auditor’s opinion for the

previous financial year; and

(d) Within 5 days of its publication, the annual report.

2. Documents referred to in Article 10(1) shall be organized in such a way that any

financial flows or other transactions between BNCTL, S.A. and the State or other public

entities can be identified.

Article 11

Transparency

BNCTL, S.A. must disclose updated information on its official website, and make it

available to the public, in both official languages and in English, on the following topics:

(a) Legal framework applicable to BNCTL, S.A.;

(b) Corporate structure and internal organization of BNCTL, S.A.;

(c) Powers and duties of each internal unit or body;

(d) Financial and annual reports of BNCTL, S.A.;

(e) Its subsidiaries or affiliated companies, and all entities in which it holds equity,

representation powers or the means to intervene whatever their nature or legal

basis;

(f) Composition of its corporate bodies as well as identity of individuals responsible

for senior management of BNCTL, S.A.;

(g) Staff information, including, in a comprehensive and consolidated manner, total

remuneration received by staff;

(h) Remuneration policy for members of corporate bodies.

Article 12

Employment relationships

1. Employees of the Microfinance Institute of Timor-Leste shall retain all their rights and

obligations towards BNCTL, S.A., in accordance with the status they hold at the time

this decree-law enters into force.

2. Employees of BNCTL, S.A shall be subject to legal frameworks governing individual

employment contracts and service agreements.

Article 13

Legal effects

1. Irrespective of their registration, by-laws of BNCTL, S.A. shall be binding on third

parties from the date this decree-law enters into force.

2. By-laws of BNCTL, S.A., annexed hereto as Annex I, shall not be made into a public

deed and shall be registered as published in the Official Gazette on the registrar’s own

initiative.

3. Any amendment to the by-laws shall only be approved by decree-law.


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Article 14

Transitional powers

Until the Central Bank is created and starts operating, all powers granted to the Central

Bank under this decree-law shall be exercised by the Banking and Payments Authority.

Article 15

Repeal

UNTAET Executive Order 2001/8, of 1 December 2001, is repealed.

Article 16

Entry into force

This decree-law shall enter into force on the day following its publication.

Approved in Council of Ministers, on 10 November 2010.

The Prime Minister

________________________

Kay Rala Xanana Gusmão

The Minister of Economy and Development

________________________

João Gonçalves

Promulgated on 18/1/11

Be it published.

The President of the Republic,

________________________

José Manuel Ramos-Horta


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ANNEX I

BY-LAWS OF

BANCO NACIONAL DE COMÉRCIO DE TIMOR-LESTE, S.A.

CHAPTER I

GENERAL PROVISIONS

Article 1

Corporate name, nature, duration and supervision

1. Banco Nacional de Comércio de Timor-Leste, S.A., hereinafter referred to as BNCTL,

S.A., is a State-owned joint stock company, governed by the laws of Timor-Leste

applicable to commercial banks, Decree-Law 3/2011, of 26 January, as amended, and by

these by-laws, hereinafter referred to as By-Laws.

2. The company shall exist for an indefinite period.

3. BNCTL, S.A. is subject to regulation and supervision of the Central Bank of Timor-

Leste.

Article 2

Registered office, delegations, branches, agencies and other forms of representation

1. The registered office of BNCTL, S.A. is located in Dili, at Rua Presidente Nicolau

Lobato no. 20.

2. The Board of Directors may resolve to relocate the registered office of BNCTL, S.A. to

any other location within the national territory as well as to establish or close

delegations, branches, agencies, representations, dependencies, offices or other forms of

local representation in any part of the national territory or abroad.

Article 3

Corporate objects

1. BNCTL, S.A.’s objects shall be the provision of financial and banking services with the

aim of reducing poverty and encouraging the development of economic activities

throughout the territory of Timor-Leste.

2. To achieve the objective defined in Article 3(1), BNCTL, S.A. shall carry out banking

activities in accordance with the law and its banking license.

CHAPTER II

SHARE CAPITAL AND OTHER FINANCIAL RESOURCES

Article 4

Share capital

The fully subscribed and paid-up share capital amounts to twenty-two million and five

hundred thousand US dollars (USD 22,500,000.00).


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Article 5

Representation of share capital

1. Share capital is represented by two million two hundred and fifty thousand (2,250,000)

ordinary shares, each having a par value of ten US dollars (USD 10).

2. All shares are registered shares, in book-entry form and owned by the State of Timor-

Leste.

Article 6

Other financing mechanisms

1. BNCTL, S.A. may issue any negotiable debt instruments, including bonds and

commercial paper.

2. Except where prohibited by law, the Board of Directors may resolve to issue debt

instruments, including bonds.

CHAPTER III

CORPORATE BODIES AND REPRESENTATION

SECTION I

GENERAL PROVISIONS

Article 7

List of corporate bodies

1. BNCTL, S.A. has the following corporate bodies:

(a) Legal representative;

(b) General Meeting;

(c) Board of Directors;

(d) Audit Board;

(e) Company Secretary.

2. BNCTL, S.A. has the following permanent internal committees:

(a) Nomination, Evaluation and Remuneration Committee;

(b) Risk Management Committee.

Article 8

Term limits

1. Legal representative shall be appointed for an unlimited term. General Meeting can

freely remove him/her at any time.

2. Directors shall be elected for renewable 3-year terms.

3. Audit Board members shall be elected for renewable 2-year terms.

4. The term of a Company Secretary shall match the term of the Board of Directors which

appointed him/her.

5. All members of corporate bodies shall remain in office beyond their respective term

limits until new members are elected, or in the case of directors and Audit Board

members, until such election is confirmed by the Central Bank of Timor-Leste.


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Article 9

General duties of members of corporate bodies

Members of corporate bodies shall meet requirements of suitability, qualification and

professional experience, independence and availability adequate to ensure a sound and

prudent management of BNCTL, S.A., in accordance with provisions of business and

banking sector laws in force. They shall, in particular:

(a) Perform their role with integrity, in an impartial, transparent and professional

manner;

(b) Be loyal and act in good faith, in the best interest of BNCTL, S.A., at all times;

(c) Promote the good name, reputation and image of BNCTL, S.A.;

(d) Monitor, verify and control the evolution of all corporate activities and businesses

within their scope of work;

(e) Assess and manage risks inherent to corporate activities and businesses within their

scope of work;

(f) Ensure information about BNCTL, S.A. is adequate, accurate and reliable;

(g) Keep confidential all information and documents obtained in the exercise of their

role that are not public;

(h) Cooperate closely with other corporate bodies, in accordance with good corporate

governance practices, and with the Central Bank of Timor-Leste.

Article 10

Non-competition and conflicts of interest

1. During term of office and for a period of six months following its termination, a

member of a corporate body shall not perform any other temporary or permanent

activity in a competing company operating in the same sector as BNCTL, S.A..

2. Members of corporate bodies shall be subject to requirements on disclosure of conflicts

of interest set forth in banking sector laws.

3. The General Meeting may approve more demanding internal requirements for

prevention and identification of conflicts of interest.

Article 11

Disqualifications and dismissal

1. Directors and Audit Board members shall be subject to disqualification and dismissal

rules set forth in business and banking laws.

2. Without prejudice to Article 11(1), directors and Audit Board members may be

dismissed by means of a General Meeting resolution, or by means of a Central Bank

resolution if the General Meeting does not decide within 30 days of a disqualification

order being issued by the Central Bank, if they:

(a) Do not adequately disclose their financial and other personal interests in

compliance with these By-laws; or

(b) Are declared incapacitated; or

(c) Accept to perform a role in a competing banking or financial institution without

having previously resigned to their role in BNCTL, S.A..


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Article 12

Minutes

1. Meetings of General Meeting, Board of Directors or Audit Board, and resolutions

adopted therein, shall be recorded in minutes.

2. After read aloud, minutes of meetings of Board of Directors and Audit Board shall be

signed by all those present and recorded in the respective minutes book.

3. After read aloud to all those present, minutes of meetings of General Meeting shall be

signed by the panel of the General Meeting and recorded in the respective minutes

book.

Article 13

Electronic communication

1. Meetings of corporate bodies may be carried out in person or through videoconference

systems that allow audio and visual identification of participants and continuous

communication among them. BNCTL, S.A. shall be responsible for ensuring

authenticity of statements and security of communications, recording their content and

respective participants, in accordance with rules to be approved by each corporate body.

2. Those participating in meetings by electronic communication shall be counted for

purposes of a quorum and have voting rights.

3. Meetings shall be deemed as taking place either at the location where most participants

are, or if there is no such place, at the location where the chairperson of the meeting is.

SECTION II

LEGAL REPRESENTATIVE

Article 14

Appointment

For the role of legal representative, shareholder shall appoint any natural person with

permanent residence in Timor-Leste, fully entitled to exercise rights and qualified to

perform this role, who might be a member of another corporate body of BNCTL, S.A..

Article 15

Powers

Legal representative shall have powers to receive communications, summons and notices

addressed to BNCTL, S.A., as instructed by the Board of Directors.

SECTION III

GENERAL MEETING AND NOMINATION, EVALUATION AND

REMUNERATION COMMITTEE

SUBSECTION I

GENERAL MEETING


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Article 16

Composition

1. The shareholder of BNCTL, S.A. decides by means of written resolutions or at General

Meeting.

2. All members of other corporate bodies in office must attend General Meetings, but

their absence does not prevent its valid composition.

3. General Meetings may also be attended by a common representative of bondholders, or

by persons whose presence is authorized by the chairperson and not opposed by the

shareholder, namely experts or consultants of BNCTL, S.A. or the State, to clarify

specific issues submitted to the General Meeting for deliberation.

Article 17

Panel

1. General Meetings shall be led by a panel composed of one chairperson and one

secretary.

2. General Meeting shall elect as chairperson any natural person, who might be a member

of another corporate body of BNCTL, S.A..

3. Company Secretary, if there is one, shall perform the role of secretary of the panel. In

the absence of the Company Secretary, chairperson shall appoint one of the attendants

to perform such role.

4. Chairperson shall call, lead and close General Meetings, in compliance with all legal

requirements, as well as confirm the presence of a quorum, solve any agenda issues that

might arise and implement procedures that he/she considers to be necessary or

recommended to ensure fruitful discussions and orderly casting of votes.

5. Secretary shall draft minutes and attendance lists, specifically stating who attended in

person, who participated by electronic communication, and who was represented.

6. In the absence or inability to act of the chairperson, his/her duties shall be performed

by any director.

Article 18

Call and meetings

1. An annual General Meeting shall be held once a year, within three months of the end of

each financial year, to resolve on financial statements, management report and

appropriation of results of the previous financial year, to elect members of corporate

bodies needed to fill any vacancies, and to address any other items included on the

agenda.

2. General Meetings can be held extraordinarily whenever duly called by the chairperson,

or at the request of the Board of Directors, Audit Board or shareholder’s representative.

3. General Meetings shall be called by the chairperson, or by whoever is replacing

him/her, with a prior notice of at least fifteen business days, by letter or e-mail

addressed to the shareholder’s representative expressly stating all matters on the agenda.

4. Without prejudice to Article 13, General Meetings shall take place at the registered

office, or at any other venue in the same municipality of the registered office provided

that such venue is duly identified in the call notice.


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Article 19

Powers

1. General Meeting shall resolve on all matters that fall within its powers, under the law

and these By-Laws. It shall operate and perform its rights in a knowledgeable and

informed manner.

2. In particular, General Meeting shall:

(a) Resolve on balance sheet, profit and loss account and management report of the

previous financial year;

(b) Resolve on proposal for appropriation of results;

(c) Make a general assessment of BNCTL, S.A.’s management and supervision on an

annual basis;

(d) Appoint and remove legal representative, chairperson of the panel of the General

Meeting, Audit Board members, and members of Nomination, Evaluation and

Remuneration Committee;

(e) Appoint and remove directors, stating who has executive powers and who has non-

executive powers, in such a way that the majority of the Board shall be comprised

of non-executive directors;

(f) Ratify appointments by co-option made by other corporate bodies;

(g) Adopt a remuneration policy for members of corporate bodies of BNCTL, S.A.,

which shall be revised at least once every three years;

(h) Resolve on remuneration of each member of corporate bodies;

(i) Resolve on amendments to these By-Laws, including changes in share capital;

(j) Authorize acquisitions or disposals of immovable assets, investments above one

million US dollars (USD 1,000,000), and any transaction of any amount that, under

applicable banking laws, might lead to the insolvency of BNCTL, S.A.;

(k) Resolve on acquisitions or disposals of equity holdings in other companies;

(l) Initiate liability proceedings in favor of the company;

(m) Resolve on selection of an external auditor, following an Audit Board proposal;

(n) Approve rules on the calling, prior provision of information, attendance and

operating procedures of meetings, and on the exercise of corporate rights,

complementing and detailing requirements set forth by law or by these By-Laws;

(o) Resolve on any other matters submitted to its deliberation by other corporate

bodies.

3. General Meeting may issue strategic guidelines on public policy objectives to the

members of other corporate bodies of BNCTL, S.A.. It is, however, prevented from

resolving on matters regarding day-to-day management of BNCTL, S.A. or hiring of

personnel, except when expressly requested by the Board of Directors.

4. Valid resolutions approved by General Meeting shall be binding to all corporate bodies

of BNCTL, S.A..

SUBSECTION II

NOMINATION, EVALUATION AND REMUNERATION COMMITTEE


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Article 20

Composition and powers

1. Nomination, Evaluation and Remuneration Committee is a permanent internal

committee, regulated by these By-Laws and by rules to be approved by General

Meeting.

2. Nomination, Evaluation and Remuneration Committee shall consist of three members,

appointed by General Meeting, the majority of whom shall be independent and duly

qualified for the role.

3. Nomination, Evaluation and Remuneration Committee shall:

(a) Issue opinions on the filling of any vacancy in corporate bodies and on the choice

of executive directors, adopting a transparent nomination procedure based on merit

and qualifications, which shall promote gender, age, geographical, professional and

academic diversity;

(b) Make performance assessments of all members of BNCTL, S.A.’s corporate bodies

on an annual basis;

(c) Submit to the General Meeting a remuneration policy proposal for members of

corporate bodies, which shall take into consideration criteria of financial

sustainability, medium- and long-term goals of BNCTL, S.A., and no excessive risk-

taking incentive, amongst others;

(d) Recommend remuneration of each member of corporate bodies on an annual basis;

(e) Determine conditions applicable to variable pay components, remuneration

supplements, bonuses and other benefits of members of corporate bodies.

4. When performing its powers, Nomination, Evaluation and Remuneration Committee

shall consult with the Board of Directors and Audit Board.

5. General Meeting must ground its decision whenever it does not follow a

recommendation made by Nomination, Evaluation and Remuneration Committee.

Article 21

Fixed pay and variable pay

1. Remuneration paid to executive directors shall consist of a fixed monetary reward plus

variable pay depending on their performance and BNCTL, S.A.’s results.

2. Total amount of variable pay paid to all executive directors shall not exceed two percent

of distributable profits of that financial year.

3. Remuneration paid to other members of corporate bodies shall consist of a fixed

monetary reward.

Article 22

Recovery of undue payment of remuneration

1. Nomination, Evaluation and Remuneration Committee may recommend the General

Meeting to adopt clawback clauses for recovery of undue payment of variable pay,

bonuses or other benefits.

2. For purposes of Article 22(1), a “clawback clause” is a contractual provision allowing an

immediate or future recovery of paid remuneration due to later evidence of no

fulfillment of conditions to be entitled to such payment (namely as a result of incorrect

financial statements), or due to a subsequent deterioration of BNCTL, S.A.’s financial


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situation, or another pre-defined cause related to poor performance or misbehavior of

such BNCTL, S.A. staff.

SECTION IV

BOARD OF DIRECTORS AND RISK MANAGEMENT COMMITTEE

SUBSECTION I

BOARD OF DIRECTORS

Article 23

Mission and special duties

1. Board of Directors is the governing body of BNCTL, S.A., responsible for promoting

and implementing its corporate values and objects, in strict compliance with applicable

laws, these By-Laws and the most stringent rules of good banking practice.

2. In carrying out their functions, directors shall comply with all duties set forth in the law

and these By-Laws, especially duties of loyalty and care. Directors must show

availability, technical competence and knowledge of the banking activity that are

adequate to their functions, acting with the diligence of a judicious and orderly manager.

Article 24

Quantitative composition

1. Board of Directors shall consist of three, five or seven directors, appointed by the

General Meeting, in accordance with relevant banking laws and Decree-Law 3/2011, of

26 January.

2. Within the limits established in Article 24(1), General Meeting shall determine the

number of directors required to ensure a good operation of BNCTL, S.A..

Article 25

Qualitative composition

1. Board of Directors shall comprise executive and a majority of non-executive

independent directors, in order to ensure an objective and impartial management

control.

2. Executive directors are those actively performing management functions.

3. Non-executive directors are those to whom management functions have not been

delegated.

4. Whenever the Board of Directors has two or more executive directors, these form the

executive committee of BNCTL, S.A..

Article 26

Liability and payment of bond

1. Directors shall be jointly and severally liable to BNCTL, S.A., the State, corporate

creditors and third parties for the global performance, good governance, and medium-

and long-term results of BNCTL, S.A..

2. Each executive and non-executive director shall, within six months of his/her

appointment, pay a security bond to secure any liability in which he/she may incur while

exercising his/her functions, under penalty of immediate termination of office.


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3. Security bonds mentioned in Article 26(1) shall be paid by means of a cash deposit on

BNCTL, S.A., for a minimum amount determined by law or, in case there is no such

legal amount, of fifty thousand US dollars (USD 50,000).

4. Security bonds shall remain valid until the end of the calendar year following that in

which a director ceases, for any reason, to be in office.

5. Security bonds may be replaced by a civil liability insurance with a minimum coverage of

fifty thousand US dollars (USD 50,000), in favor of BNCTL, S.A., taken for this

purpose by a director as policyholder and insured.

6. Requirement to pay a security bond or take a civil liability insurance may be waived, or

the amount reduced, by means of a shareholder resolution.

Article 27

Chair and deputy-chair

1. From among the non-executive directors, General Meeting shall appoint a chair and

deputy-chair of the Board of Directors.

2. If General Meeting does not appoint a chair or deputy-chair, the Board of Directors in

office shall do it and submit its choice to the next General Meeting for ratification.

3. Without prejudice to other powers delegated under the law, these By-Laws or BNCTL,

S.A.’s regulations, the chair of the Board of Directors shall:

(a) Represent the Board of Directors;

(b) Coordinate Board activities in a way that ensures effective performance of its

powers;

(c) Call and lead Board meetings, setting their agenda and encouraging active

discussions and free voting;

(d) Ensure directors receive sufficient information on items on the agenda before

discussions and voting;

(e) When passing a Board resolution, exercise a casting vote in case of a tie;

(f) Ensure compliance with these By-Laws, and a correct implementation of

resolutions of the General Meeting or the Board;

(g) Be the main liaison for communications with shareholder and media;

(h) Regularly meet with the executive director, or president of the Executive

Committee, so as to be informed and updated on BNCTL, S.A. business.

4. In the absence or inability to act of the chair of the Board of Directors, the deputy-chair

shall replace him/her.

Article 28

Meetings and resolutions

1. Board of Directors shall meet whenever deemed necessary and, in any case, at least once

every two months.

2. Chair shall call a Board meeting on his/her own initiative, or at the request of at least

one director when the total number of directors is five or less, or at the request of at

least two directors when the total number of directors is more than five.

3. A call notice shall set out the agenda and must be served in writing, by letter or e-mail,

with a prior notice of at least three business days.


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4. A director may be represented in a Board meeting by another director, by means of a

proxy letter addressed to the chair. Each proxy letter shall only be used once.

5. Only a non-executive director can represent another non-executive director.

6. A director representing another director, pursuant to Article 28(4) and (5) above, shall

cast his/her own vote and a vote in his/her capacity of representative of another

director.

7. Only when the majority of directors is present or represented can the Board of

Directors validly pass a resolution.

8. To be valid, a Board resolution must be approved by a majority of directors present. In

case of a tie, the chair, or whoever is replacing him/her, shall have a casting vote.

9. A director who does not agree with an approved resolution may request that reasons for

his/her disagreement be included in the minutes.

10. A director with a personal material interest in an item on the agenda shall be restricted

from voting and shall not be counted for quorum purposes in relation to that item.

During its discussion and voting, said director shall not attend the meeting.

11. Any person may attend a Board meeting at the request of the chair.

12. A director who, during a financial year, fails to attend, without an accepted justification,

two Board meetings, or a General Meeting for which he/she is called, shall be dismissed

from his/her office and replaced pursuant to the law and these By-Laws.

Article 29

Powers

1. Board of Directors shall have the widest management and representation powers of

BNCTL, S.A., without prejudice to exclusive powers of other corporate bodies.

2. The following powers shall be exercised by the Board of Directors as a whole, and shall

not be delegated:

(a) Design, approve and review general policies and strategy of BNCTL, S.A., and set

adequate indicators of overall performance of BNCTL, S.A., in the context of

public policy objectives approved by General Meeting;

(b) Determine duties of the executive director, or executive committee, and delegate all

matters deemed appropriate, with due respect for limits to delegation resulting from

the law or these By-Laws;

(c) Actively supervise performance of executive directors;

(d) Identify and analyze financial, operational, labor, environmental, fiscal and violation

of human rights risks faced in the management and operational activity of BNCTL,

S.A.;

(e) Develop and oversee the implementation of risk management and internal audit

policies and procedures;

(f) Prepare an annual report with complete, pertinent, reliable and updated

information, and validate all annual performance reports and financial statements to

be submitted to the General Meeting, ensuring that they faithfully reflect the

activities and risks incurred by BNCTL, S.A.;

(g) Resolve on creation of personal or in rem security interests by BNCTL, S.A.;

(h) Resolve on significant increases or reductions of BNCTL, S.A. business;

(i) Resolve on draft terms of merger, demerger or conversion of BNCTL, S.A.;


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(j) Resolve on relocation of registered office as well as on opening or closure of

delegations, branches, agencies, or other forms of representation;

(k) Appoint a Company Secretary;

(l) Appoint attorneys-in-fact with the authority deemed appropriate to do a particular

act or for sets of specific actions, with due respect for limits to delegation resulting

from the law or these By-Laws;

(m) Approve internal rules of the Board, and inform the shareholder in the next

General Meeting about their approval or amendment;

(n) Ratify any action performed in the Board’s name, in an emergency situation, by the

chair of the Board or whoever is replacing him/her;

(o) Implement and enforce legal provisions, these By-Laws, customary and good

banking practices and principles of good governance to which BNCTL, S.A. has

adhered, as well as resolutions of the General Meeting.

3. Financial and operational risks mentioned in Article 29(2)(d) above shall include

liquidity, interest rate, currency, market and credit risks.

Article 30

Executive director and executive committee

1. When the Board has an executive committee, the Board as a whole shall appoint the

chief executive office from among its executive directors. The chief executive office

shall coordinate activities of the executive committee, and has a casting vote.

2. In particular, the executive director or chief executive office shall:

(a) Ensure that all information regarding their activity is provided to other directors;

(b) Enforce compliance with the delegation limits and strategy of BNCTL, S.A.;

(c) Coordinate day-to-day and operational management activities, directing respective

teams, aiming to an efficient and profitable business performance, in the medium-

and long-term.

3. Operations of the executive committee shall comply with applicable laws, its internal

rules, and any guidelines approved by the Board of Directors.

Article 31

Management powers

1. The executive director or executive committee shall be responsible for the day-to-day

management and for performing all powers related to the operational administration of

BNCTL, S.A., including:

(a) Implement policies and business strategy of BNCTL, S.A., manage businesses and

perform any activities related to its corporate objects;

(b) Define internal organization and working methods of BNCTL, S.A.;

(c) Create specialized committees for specific areas, with consultative, supporting or

reporting powers on matters included in their scope of work;

(d) Implement and maintain, in an appropriate and effective manner, highly efficient

systems of internal control, risk management and reporting of irregularities, in

accordance with the most rigorous international banking practices, and equip them

with the necessary human and material resources;


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(e) Recruit BNCTL, S.A. staff, including managers for senior management functions,

set their contractual conditions, and exercise hierarchical and disciplinary powers

over them;

(f) Mobilize financing resources and carry out all credit operations not prohibited by

law;

(g) Without prejudice to Article 19(2)(j) of these By-Laws, acquire, encumber and

dispose of any rights or movable or immovable assets, including equity holdings,

and make investments deemed appropriate for BNCTL, S.A.;

(h) Resolve on bond issues and issue of other debt instruments up to one million US

dollars (USD 1,000,000);

(i) Determine how checks, bank checks, bills, promissory notes and other negotiable

instruments may be issued, signed, endorsed and accepted;

(j) Represent BNCTL, S.A. in and out of court, as plaintiff or defendant, with powers

to take obligations, initiate or continue lawsuits, confess, withdraw or settle in

proceedings, engage in arbitrations and sign liability terms;

(k) Coordinate processes of disclosure and communication of information about

BNCTL, S.A. to third parties.

2. Management powers granted to the executive director or executive committee under

these By-Laws shall be permanent and cannot be revoked by the Board of Directors.

3. Board of Directors may authorize the executive director or executive committee to

subdelegate the exercise of some of their delegated powers.

4. Except for those expressly stated in Article 31(1), delegation of other powers to the

executive director or executive committee shall terminate by Board resolution, or

automatically in the following situations:

(a) Replacement of the executive director, chief executive office, or majority of

executive committee members;

(b) Term of office of the Board of Directors that delegated such powers.

Article 32

Specialized committees

1. Board of Directors may approve the creation of specialized committees with

consultative and supporting powers to permanently monitor specific areas.

2. Specialized committees shall have the powers and composition determined by the Board

of Directors, which shall also approve rules determining their operating mode.

3. Creation of specialized committees aims to improve and facilitate the performance of

Board functions, and it does not disengage the Board from its powers and duties.

4. Actions taken by a specialized committee shall be deemed performed by the Board of

Directors.

5. Except as otherwise provided by mandatory law or in these By-Laws, a specialized

committee shall be composed of a majority of non-executive and independent directors,

with relevant qualifications to the duties to be performed.

Article 33

Binding of BNCTL, S.A.

1. In relation to third parties, BNCTL, S.A. shall be bound by the signature of:


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(a) Chair of the Board of Directors when acting within his/her powers, under the law

and these By-Laws;

(b) Executive director or chief executive office when acting under and within the scope

of delegated powers;

(c) Attorney-in-fact when acting within the scope of a power of attorney.

2. For simple routine matters, BNCTL, S.A. shall be bound by the signature of any

executive director.

3. Board of Directors may resolve, under the terms and within the limits of the law, that

certain documents of BNCTL, S.A. can be signed by mechanical processes or by seal.

SUBSECTION II

RISK MANAGEMENT COMMITTEE

Article 34

Composition and operation

1. Risk Management Committee shall consist of three directors appointed by the Board of

Directors.

2. At least two members of Risk Management Committee shall be non-executive directors.

3. Members of Risk Management Committee shall be appointed for renewable two-year

terms. However, their term shall not exceed the term of the Board of Directors that

appointed them.

4. Risk Management Committee shall necessarily meet once a month. It shall also meet

whenever requested by two of its members or by the Board of Directors.

Article 35

Powers

Without prejudice to other powers granted under banking laws, Risk Management

Committee shall:

(a) Establish a risk management system and ensure its effective application by the

relevant departments of BNCTL, S.A.. A risk management system is a permanent

set of integrated processes that ensures a proper understanding of the nature and

magnitude of all risks associated with the business of BNCTL, S.A., and allows the

identification, evaluation, monitoring and control of relevant risks to which

BNCTL, S.A. is exposed, enabling a proper development of its business strategy;

(b) Monitor the compliance function in relation to obligations and duties to which

BNCTL, S.A. is legally subject to, as well as applicable regulatory, professional and

deontological standards approved by relevant authorities, internal rules, By-Laws,

rules of conduct and of relationship, guidelines of corporate bodies and applicable

recommendations issued by international entities, in order to preserve the image

and reputation of BNCTL, S.A.. Compliance function shall be performed by an

independent individual, with relevant qualifications to this position;

(c) Inform the Board of Directors of eminent or effective risks of BNCTL, S.A.

business, and recommend appropriate prevention or mitigation measures to ensure

an efficient use of resources, business continuity, prudent and correct assessment of


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liabilities, and prevention and protection against intentional or negligent

unauthorized actions.

SECTION V

AUDIT BOARD

Article 36

Composition

1. Audit Board consists of one chair and two members, appointed by General Meeting,

pursuant to banking laws and Decree-Law 3/2011, of 26 January.

2. Without prejudice to other legal requirements, Audit Board members shall be

independent individuals, who cannot seat on the Board of Directors at the same time.

3. Audit Board members shall have appropriate qualifications and professional experience

to their functions, namely a relevant university degree and high competence and

knowledge of financial, accounting and auditing areas or operational knowledge of

banking sector.

Article 37

Operations

1. Chair of the Audit Board shall call and lead its meetings, and shall have a casting vote in

case of a tie.

2. Audit Board shall necessarily meet quarterly. It shall also meet whenever decided by its

chair or requested by any of its members.

3. Meetings of the Audit Board shall be called by its chair in writing, by letter or e-mail,

with a prior notice of at least five business days.

4. To be able to resolve on any matter, the majority of Audit Board members shall be

present.

5. Audit Board resolutions shall be approved by simple majority of casted votes. A

member who does not agree with an approved resolution shall request that reasons for

his/her disagreement be included in the minutes.

6. An Audit Board member who, during a financial year, fails to attend, without an

accepted justification, two Audit Board meetings, or a General Meeting, or two

meetings of the Board of Directors for which he/she is called or where annual financial

statements will be discussed, shall be dismissed from his/her office and replaced

pursuant the law and these By-Laws.

7. External auditor, if there is one, may be invited to attend meetings of the Audit Board.

Article 38

Powers

1. In addition to other powers granted by law, Audit Board shall:

(a) Exercise a careful and impartial supervision of the Board of Directors, especially of

its executive directors, considering financial integrity of BNCTL, S.A.;

(b) Check that books, accounting records and supporting documents are correct and

updated;


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(c) Confirm that accounting policies and valuation criteria adopted by BNCTL, S.A.,

are leading to a correct asset-valuation and evaluation of results;

(d) Verify accuracy of financial statements and, in general, supervise quality and

integrity of financial information included therein;

(e) Supervise internal process of preparation and disclosure of financial information;

(f) Submit to General Meeting an opinion on the management report, annual financial

statements and proposal for appropriation of results presented by the Board of

Directors;

(g) Monitor quality and effectiveness of internal systems of risk management,

compliance and internal audit, without compromising their independence, and

recommend to the Board of Directors improvements and a timeline for their

implementation;

(h) Receive irregularity charges, complaints or statements of dissatisfaction filed by the

shareholder, employees or others, and implement procedures for receiving,

registering and treating those;

(i) Maintain a written record, and inform the Board of Directors, of all verifications,

inspections and actions carried out;

(j) Prepare an annual report on its supervisory action, and present it to the annual

General Meeting;

(k) Attend meetings of the Board of Directors and General Meeting for which it is

called or where annual financial statements will be discussed;

(l) Propose the appointment or replacement of an independent external auditor to

General Meeting;

(m) Supervise independence of the external auditor, in particular with regard to the

provision of additional services, and report to General Meeting any circumstance

that might compromise that independence;

(n) Supervise audit of accounts and of financial statements of BNCTL, S.A. performed

by the external auditor, and discuss with the latter significant weaknesses or

irregularities detected;

(o) Hire experts to provide services supporting the exercise of its functions. Such

hiring and respective remuneration shall take into account the importance of the

subjects and economic situation of BNCTL, S.A.;

(p) Issue opinions on any other matters pursuant to applicable laws or requested by the

Board of Directors.

2. While carrying out their powers, Audit Board members may, in particular:

(a) Have access to books, records and documents of BNCTL, S.A., for examination

and verification;

(b) Check stocks of any class of assets, namely cash, securities and commodities;

(c) Obtain information or clarifications from the Board of Directors, or from any

director, about the course of operations, activities or any business of BNCTL, S.A.;

(d) Obtain information from third parties who have performed operations on behalf of

BNCTL, S.A., for proper clarification of such operations;

(e) Meet with staff in charge of internal risk management, compliance and internal

audit systems.


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SECTION VI

COMPANY SECRETARY

Article 39

Appointment

1. The company shall have a Company Secretary, appointed by the Board of Directors,

who shall act, at the same time, as secretary of other corporate bodies and committees

of the Board of Directors.

2. Company Secretary shall be a natural person with relevant academic qualifications, who

shall not be, at the same time, a member of another corporate body of BNCTL, S.A..

3. Board of Directors may appoint an alternate Company Secretary, who shall perform the

role of Company Secretary in his/her absence or inability to act.

Article 40

Powers

Without prejudice to other powers set forth by the law or these By-Laws, Company

Secretary shall:

(a) Support meetings of corporate bodies and draft their attendance lists;

(b) Take minutes of meetings and sign them together with members of the respective

corporate bodies or, in the case of General Meetings, with the chairperson of the

panel;

(c) Maintain, store and keep in good order books and minutes sheets, attendance lists

and associated documents;

(d) Certify signatures of members of corporate bodies in corporate documents;

(e) Request the registration of facts subject to such procedures;

(f) Keep records of personal and financial interests of directors and Audit Board

members disclosed to the Central Bank of Timor-Leste.

CHAPTER IV

FINANCIAL YEAR AND APPROPRIATION OF RESULTS

Article 41

Financial year

The financial year shall be the calendar year.

Article 42

Appropriation of results

1. Net profits calculated in the annual balance sheet, after duly approved, shall be

appropriated as follows:

(a) A minimum of 25% for creating or repaying legal reserves, without limitation;

(b) The remainder for the purposes resolved by General Meeting, on proposal of the

Board of Directors.

2. Legal reserves referred to in Article 42(1)(a) shall only be spent in accordance with

business laws.

3. The company may pay advances on profits to the shareholder under the law.