Law on Corporate Governance in Indonesia

General Meeting of Shareholders
The General Meeting of Shareholders is the most powerful organ in a company. It has the power to approve or disapprove i.a. the consolidation, merger, acquisition, bankruptcy and dissolution of the company and the appointment and dismissal of commissioners and directors.

Board of Commissioners
The Board of Commissioners (Komisaris) has to supervise and advise the Directors in the running of the company. The Komisaris is required by the Company Law to carry out, in good faith and with full responsibility, its duties in the best interests of the company. It is empowered by law to suspend a director and must sign, together with the Direksi, the Annual Report of the company. Thus, it shares legal responsibility for misleading financial statements therein causing a loss to any party therefrom. Each member of the Komisaris must disclose to the company, by virtue of the Company Law, any shareholding interests held by that member or his family in the company or other companies. The performance of responsibility of the Komisaris is however as yet quite rare.

Board of Directors
The Board of Directors (Direksi) is fully responsible for the management of the company. Each Direksi-member is fully and personally liable if he/she is at fault or neglects to perform his/her tasks in good faith and with a full sense of the responsibility for the interest and business of the company. The Direksi is required by the Company Law to carry out, in good faith and with full responsibility, its duties in the best interests of the company. Each member is personally liable for any misconduct or negligence in carrying out these responsibilities. The Direksi must administer the company's books of accounts, prepare and submit to the Annual GMOS an Annual Report and annual financial statement as well as establish and maintain a Register of Shareholders and Minutes of the GMOS. A member of the Direksi must also disclose to the company, by virtue of Article 87 of the Company Law, any shareholding interests held by him or his family in the company or other companies.

The Direksi shall comply with Article 43 of the Company Law requiring that the company organize and maintain a Register of Shareholders, and a Special Register containing information regarding the shareholdings of members of the Direksi and Komisaris and their families in such company and/or in other companies and the dates such shares are acquired and disposed of. The Direksi shall cause the Register of Shareholders and the Special Register to be readily available for examination by the Komisaris and shareholders at the office of the company.

Under the current rules a publicly listed company is required to appoint a corporate secretary, and such secretary acts as an investor relations officer. In addition, it is being proposed that the corporate secretary shall also act as a compliance officer and keeper of corporate documents such as the Register of Shareholders and the Special Register of the company, and Minutes of any GMOS, as well. One of the members of the Direksi may be designated as a corporate secretary.

The Deed of Establishment of each company containing of the Article of Association, which must be ratified, approved or accepted by the Minister of Law and Legislation and the standards set forth thereby, will further define the responsibilities and the rights of the shareholders, both majority and minority, and the Direksi and Komisaris.

B. Indonesian Capital Market Law
A second major regulatory framework, next to the Company Law, may be found in the rules and regulations issued by the Indonesian Capital Market Supervisory Agency, or "BAPEPAM". The company Law applies to all limited liability companies established under Indonesian law, whereas the capital market rules and regulations are applicable to "public companies" as defined in the Capital Market Law (i.e., a company of which the shares are held by at least 300 persons and having a paid-up capital of Rp. 3 billion).

The company shall disclose material information through its Annual Reports and financial statements to shareholders as well as its reporting to BAPEPAM, the relevant stock exchanges and the public in a timely, accurate, understandable and objective manner. Companies shall take the initiative to disclose not only matters required by law but also those of material importance to the decision-making of institutional investors, shareholders, creditors and other stakeholders with respect to the company.

Members of the Komisaris and Direksi holding shares in the company and any other "insiders" as meant in the elucidation of Article 95 of the Capital Market Law must not take advantage of their inside information in dealing with those shares.