RISK AND CAPITAL COMPLIANCE SOLUTIONS ICAAP Constructor Turnkey

RISK AND CAPITAL COMPLIANCE SOLUTIONS ICAAP Constructor ‘Turn-key Software Solution’

Introduction to ICAAP - why is it important? Central Bank of Russia – ICAAP Assessment Methodology for SREP Advantages of ICAAP Constructor Software – Interfaces – Home Page ICAAP Reports (internally and to the Central Bank of Russia) Price and Deployment Time Next Steps

Introduction to ICAAP – why it is important to the bank? What is ICAAP means “Internal Capital Adequacy Assessment Process” A comprehensive process to ensure that the bank’s risks are aligned with the capital reserve Why Should your bank perform ICAAP It is a practical benefit to the bank for risk management procedures An ICAAP provides the bank with a comprehensive risk management system The CBR requires the bank to be compliant by national regulation 3624 -U The bank must be compliant by 01/1/16 (more than 500 Bn Rur assets) or 1/01/17 (less than 500 Bn RUR assets) The last phase of ICAAP is a SREP by the CBR: (Supervisory Review and Evaluation Process) A failed SREP leads to additional N 1. 0 requirements (up to 3% additional capital)* The key is to ensure that the bank has sufficient capital to cover all significant risks identified * The precursor to the SREP is a review of the Bank’s financial standing as per 2005 -U. This refers to quality and quantity of the Bank’s capital reserve.

Central Bank of Russia Assessment Methodology for SREP Our software is created by the person who has developed the questions and scoring methodology for the Central Bank of Russia that will be used to assess ALL Bank’s ICAAPs (3624 -U) using the Supervisory Review and Evaluation Process (SREP 3883 -U). The prototype software developed for the CBR was created with our assistance using our knowledge and methodology. CBR will send the Bank over 689 questions created by the inventor. The Bank’s answers will be evaluated using the inventor’s scoring methodology. Important Note: Our software includes the 689 questions that have been published by the CBR. In case of any changes in ICAAP regulations we will provide an updated content of the software free of charge. We will also provide an updated patch for the Group ICAAP methodology in mid 2019.

Advantages of ICAAP Constructor Design, development and implementation of an ICAAP – reduces project and annual maintenance costs. Software provides the guidance on preparation for SREP including the guidance for the development of answers for questions considering current ICAAP status. Gap analysis for an existing ICAAP, including valuable methodology (including document templates) to help a bank become ICAAP compliant – reduced compliance costs and compliance mitigation. Software functionality allows Internal Audit to assess the quality of the bank’s ICAAP independently. ICAAP management system and document management – legacy management of ALL ICAAP related documents and previous ICAAP versions, so that the Bank has a safe, stable, secure and well-coordinated ICAAP – consistency year to year. An ICAAP reporting platform - Reports by banking department or regulatory topic or for submission to the Board of Directors or the Central Bank of Russia. Board of Directors – Bank monitoring software of the overall health of the Bank by using an annual banking health review using the specific questions, quantitative reporting forms and bank departmental analysis. IMPORTANT NOTE: ICAAP is NOT a one-off process. The ICAAP AND SREP process must be conducted by Banks in each respective country on an annual-basis. COST SAVINGS: Average ICAAP projects cost (US $ 5 million in a bank with asset-size of US $ 3 Billion). Annual ICAAP maintenance costs for a medium size bank (with asset-size between US $ 16 Million and 7 Billion) of at least US $ 250, 000 (this does not include the function or work done by Internal Audit). The average cost of an annual SREP review is US $ 250, 000 per Bank in a Banking Group. Cost Reduction Table ICAAP Implementation ICAAP Review and/or Audit ICAAP Annual Maintenance ICAAP Reporting SREP Reporting Cost and Saving Time 30% to 40% 50% 40%

ICAAP Constructor Software – Interfaces – Home Page Easy to Navigate and use

ICAAP Reports (Internally and to the Central Bank of Russia) Includes Quantitative and Qualitative Reporting Forms

Price Proposal and Development and Implementation Timing Pricing Proposal The software installation fee is negotiable for a single Banking entity (unlimited users within the same entity). The recurring license fees is negotiable with a three year contract (contract of renewal to be re-negotiated after the 3 year period). Recurring fees are charged 364 days after the signing of the purchase agreement and 364 days thereafter. Software is affordable for a small and medium size banks’ budget. Deployment and Implementation Timing The software will take us two days to deploy in a Bank with a further two days for Bank user testing (we require 1 FTE for one working day from the bank’s side). The software is available in Russian and in English.

Next Steps Provide the Bank with a detailed description of ICAAP Constructor, including a demonstration and the hardware requirements (end of 1 st week) Final price setting and contract signing (end of 2 nd week) Software deployment and testing – up to 4 days Greg Jardine – Director/COO Zeyn Adam– Managing Director/CEO +61 (0) 413 511 590 greg. jardine@riskcapcom. com +7 962 929 7011 zeyn. adam@riskcapcom. com