Indication Rates

GOOD CORPORATE GOVERNANCE PRINCIPLES

The implementation of Good Corporate Governance is basically aimed to secure and increase value of shareholders and stakeholders. Bank IndoMonex has implemented the Good Corporate Governance Principles under the guidance of Board of Commissioners. The financial, business performances and implementation of the risk management risks and strategies were stated based on clear, accurate and consistence facts/information. The implementation of accounting policies is to comply with PAPI and PSAK (Bank Accounting Standard) which is one of the reflection of Good Corporate Governance Principles, the transparency. The distribution and delegation of functions, authority and responsibilities were executed in accordance based on organizational structure and job description as under:

Board of Commissioners

There are three members of Board of Commissioners who posses adequate experience, competence, integrity and financial reputation. Each members possesses supervisory authority on the functioning of the Board of Directors and discharge of duties and responsibilities and also providing advice or guidance for the Directors. The supervision includes monitoring, directing, evaluating the implementation of bank strategic policies to ensure that the entity is governed based on Good Corporate Governance Principles. During the year 2007, Board of Commissioners had conducted four meetings. The Commissioners always allocate adequate time for performing their duties and responsibilities. Proper system were in place to keep the Board of Commissioners informed about the operations of the Bank.

Board of Directors

There are five members of Board of Directors and one of them is the Director of Compliance. All Board of Directors members have no affiliation with controlling shareholders and Commissioners. All Directors posses adequate experience, integrity, competence and financial reputation having handled banking operations for more than twenty years. The Directors are responsible to govern the Bank in order to achieve its objectivess and aims , by considering the interests of shareholders and stakeholders by exercising effective internal supervision , monitoring the risks, attending of audit reports and reporting the overall bank performance to sharehoders in General Meeting of Shareholders. During the year 2007, Board of Directors meeting was conducted every month aimed to implement bank's strategic policies, ensure compliance with procedures and proper functioning of the audit and risk management system. All audit findings and recommendations made by internal audit unit, external auditor, Bank Indonesia supervision team and supervision made by other authority were always followed up by Board of Directors. Reports made by Board of Directors to Board of Commissioners covering financial statements and its analysis has been conducted on monthly basis and at any time required. The detailed duties and responsibilities are presented in the job description/ designation of each Directors. The functioning Director was supported by several Committees including Credit Committee, Assets and Liabilities Committee, Risk Management Committee, and Information Technology Steering Committee. These Committees are functioning and responsible for providing opinions, and supports the Board of Directors in implementing the bank strategies effectively. Strategic policies on human resources are issued by Board of Directors Decree letter and informed to all staff members by each related Branch Manager or Department Head. Board of Directors issue the guidelines and work rules containing the work ethics, work time and meeting rules. To ensure Bank's compliance with Bank Indonesia policies and prevailing regulations, the Compliance Unit was functioning smoothly on the availability and accuracy of guidelines, system and procedures of all units which comply with prevailing regulation. The Compliance Unit is independent from operational units. Board of Directors has ratified compliance unit policies by issuing the complete and comprehensive compliance unit procedures and guidelines and has communicated or socialized it to all organizational level. Compliance Director monitors and secure the Bank's compliance to all agreements and commitments made to Bank Indonesia and reporting it periodically to President Director and copy of the report is submitted to Board of Commissioners. The availability of Risk Management unit which had developed the risk limit policy has helped the Bank to implement its risk management effectively and in accordance with its objectives, business policy, size, complexity and potential. Board of Commissioners and Directors carried out effective supervision on implementation of policies and risk management strategies as stipulated in prevailing regulations. Bank has also implemented an effective internal control system by separation of duties and responsibilities independently amongst risk taking unit, risk management unit and compliance unit, requesting opinion from risk management unit for any issuance and revision of policy by system and procedures unit, and also requesting risk management unit to provide recommendations during discussion on findings issued by internal audit unit. Bank is equipped with adequate Management Information System, supported by competent human resources to enable the complete, accurate, up to date, and timely internal reporting. Balance sheet and income statements are generated daily and reported to Board of Directors and other functionaries and progress is monitored by comparing it with previous day results to ensure adequate information to Board of Directors and other functionaries in terms of changes in assets, liabilities, profitability and equity of the Bank. The policy for credit extended to related parties and large credit debtor have fulfilled Bank's Indonesia's regulation regarding Legal Lending Limit. The bank also monitor the diversification of credit and currently the credit extended to core debtor is is 34.04% of the total loan portfolio extended by the bank to industrial, trading and other services. Therefore, the credit extended to related parties and large credit debtor is not significant compared with the overall loan extended by the Bank. The Bank will continuously implementing the prudential principles to ensure the continuation of banking business The complete and realistic bank's corporate plan and business plan has been finalized by considering all internal and external factors and noting the prudential principles and sound banking principles. The bank's business plan has been achieved substantially and deviation from the target was not more than ten percents. For better customer awareness, the Bank has conveyed the financial and non financial infor including products information transparently through homepage or website, which are more than adequate to comply with the existing rules. Duing year 2007 there was no transaction which represented conflict of interest. Procedures and policies for credit extended by Bank complied with existing guidelines, procedures and policy and did not cause any risky lending. The Bank has fulfilled its corporate social responsibility function by extending fund for social activities including donation for UNESCO and other social activities. Generally, Bank Indomonex has implemented the adequate Good Corporate Governance to add value for shareholders, community and stakeholders.