BAJ, as a publicly listed company, has strong commitment in implementing good corporate governance and management practices. The Company realizes the importance of good corporate governance as a tool to push the Company’s performance as well as to improve its accountability for public.

DUTY OF THE BOARD OF COMMISSIONERS

Main duty of the Board of Commissioners is to supervise the Directors in managing the Company and counsel the Directors in performing their duties.

A Meeting of the Board of Commissioners may be convened at any time when it is deemed necessary by one or more members of the Board of Commissioners, or at the request in writing by one or more members of the Directors, or upon the request in writing by one or more shareholders jointly representing 1/10 (one tenth) of the number of shares with the lawful voting rights.

The Board of Commissioners may also adopt lawful resolutions without convening a Meeting of the Board of Commissioners, on the condition that all members of the Board of Commissioners have been informed in writing, have given their approval on the motion submitted in writing, and have signed the relevant letters of approval. The resolutions thus adopted shall have the same force as the resolutions lawfully adopted in a Meeting of Board of Commissioners.

During 2008, the Board of Commissioners has conducted for meeting for 4 times with attendance level of 95%.

The Board of Commissioners consists of:

DUTY OF THE DIRECTORS

The main duty of the Directors is to act for and on behalf of the Company. The Directors shall be fully responsible for performance of its duties in the interests of the Company in achieving its goals and objectives.

A Meeting of the Directors may be convened at any time when it is deemed necessary by one or more members of the Directors, or at the request in writing of one or more members of the Board of Commissioners, or at the request in writing of one or more shareholders jointly representing 1/10 (one tenth) of the total number of shares with the lawful voting rights.

The Directors may also make lawful resolutions without convening a Meeting of the Directors, on condition that all members of the Directors have been informed in writing, have given their approval to the motion submitted in writing, and have signed the relevant letters of approval. The resolutions adopted in such manner shall have the same force as those lawfully adopted at a Meeting of Directors.

During 2008, the Directors has conducted for meeting for 6 times with attendance level of 100%.

The Directors consists of:

President Director	:	Santoso Winata
Deputy President Director	:	Sudarmo Tasmin
Director	:	Sugandhi
	:	Winoto Prajitno
	:	Tan Anthony Sudirjo
	:	Oey Albert

The Board of Directors’ Meeting may also invite Commissioners to seek for advice to overcome the problems faced by the Board of Directors. During 2007, the Board of Directors has conducted for meeting for 4 times with attendance level of 100%.

AUDIT COMMITTEE

Pursuant to provision from PT Bursa Efek Jakarta under the Listing Regulations No. I.A of Letter G.7, the Company on December 29, 2004 has established an Audit Committee with the purpose to assist and facilitate the Board of Commissioners in running its supervision function and to be responsible in providing for professional advices to the Board of Commissioners.

Structure of the Audit Committee is as follows:

Chairman	:	Victor Fungkong
Members	:	Bonaventura Andika Sumarjo
	:	Liesye Lestari

Brief Resume:

Bonaventura Andika Sumarjo

Indonesian Citizen, born 1964. Obtained a Bachelor of Accounting degree from University of Atmajaya Yogyakarta on 1990 and in 2003 obtained a Master of Management – Marketing (MM) degree from School of Economics Jakarta and Certified DISC Analysis from The Institute for Motivational Living, USA in 2007. Began his carrier in 1990 at Indomarco Group (Consumer Goods) as an Auditor, System and Procedure and lastly as Operation Manager. He has been a member of the Audit Committee of the Company since 2004.

Liesye Lestari

Indonesian Citizen, born in Jakarta at 1980. She obtained Bachelor of Economics degree majoring in Accounting from University of Bina Nusantara at 2002. She began her career as System and Procedure officer of PT Star Cosmos and then as a Fixed Asset Accountant at PT Sarimelati Kencana (Pizza Hut). She has been a member of the Audit Committee of the Company since 2007.

During 2008, the Audit Committee has conducted for meeting for 6 times with attendance level of 100% and has some recommendations:

• To evaluate Company policy in compliance with prevailing legal and regulation.
• To review Company Internal reporting.
• To give inputs to Board of Commissioners and Directors for significant decision making.

Under the framework to support the openness and in order to comply with regulations of the Capital Market Supervisory Agency and Financial Institution, the President Director has appointed Mrs. Mawarti Wongso as Corporate Secretary to be responsible in providing for material information to be acknowledged by public and extended inputs to the Board of Commissioners and the Directors concerning the prevailing capital market’s rules and regulations so that it can be completely fulfilled. Corporate Secretary will also monitor for any growth within the capital market.

Brief Resume:

Indonesian Citizen, born in 1970. Hold her Economic Degree with Accounting major from Trisakti University in Jakarta in 1992. Started her carrier as an External Auditor at a Public Accountant Firm of Johan Malonda & Partners (1990-1994). Starting to join with Sungai Budi Group in 1994 as Financial Controller. Taking hold a position as Corporate Secretary of the Company from 1995 to-date and acting as Finance General Manager of PT Tunas Baru Lampung Tbk (from 2000-now). For further information related to the Company, Corporate Secretary will always be ready to assist.

INFORMATION ACCESS

Under the framework to put high on transparency principle, the Company will always try to provide for information by using public media, particularly through the Company’s official website:

www.budiacidjaya.com.

INTERNAL SUPERVISION AND CONTROL SYSTEM

To improve Internal Supervision and Control System, the Company formed Internal Audit Division. The duties of Internal Audit are to ensure all activities have been performed pursuant to the Company’s Standard Operational Procedure and to prevent as well as look for possibility of operational non compliance. Specifically, Internal Audit perform supervision and audit on a regular basis against the past and current transaction, to compare transaction document with its supporting data, to discuss with competent authorities as well as conduct field review.

RISK MANAGEMENT

The risks which may infl ict for negative impacts toward the operational performance as well as the Company’s strategies to minimize such risks are as follows:

• Supply for Raw Material

  Risk

  Cassava roots is the main ingredient in producing tapioca starch and the cassava fiber namely “onggok” is one of the main material for making of citric acid. Cassava may be planted and harvested all year long, but long drought indeed may impact in its harvesting. Besides that, the cassava farmers may choose to plant other crops other than cassava which shall depend on level of price from each crop from time to time. Such matter for sure may indirectly influence the supply of cassava which further will cause decreasing in the Company’s production.

  Dealing Efforts

  The Company has conducted for research and development in order to discover for excellent seeds of cassava which may increase the crops productivity of the farmers. The Company also supports for the farmers’ working capital by acting as mediator to distribute the Energy and Food Endurance Credit from national banking system and adjusting the cassava’s floor prices from time to time.

• Fluctuation in Raw Material’s Price

  Risk

  Price of cassava root is fluctuating from time to time, which will depend on the crops and the market demand. Such fluctuation over the raw material price will influence the Company’s production cost which in turn, will influence the Company’s profitability.

  Dealing Efforts

  In order to deal with this risk, the Company runs cost efficiency programs such as energy cost and, if possible, passes on the movement of cassava’s purchasing price to the customers. Therefore, a decrease in profit margin caused by such increasing of raw materials price can be minimized.

• Competition

  Risk

  Competition which is caused by the availability of similar products produced by other companies may cause a decline in total sales as well as market share of the Company.

  Dealing Efforts

  The Company’s tricks to reduce this risk shall be by widening such cassava supply network to the Company’s factories by way of providing cassava excellent seeds and fertilizer to the farmers and supporting for their working capital as well as acting as mediator to distribute the Energy and Food Endurance Credit from the national banking system. The Company will also continue to maintain its products’ qualities to obtain consumer’s loyalty so that they will not substitute into competitor’s products.

• Changes in Foreign Exchange

  Risk

  Considering that some banking loans of the Company are held in foreign currency, then a weakening of Rupiah against foreign currency will cause for an increase in payment burden both on interest and principal to creditors.

  Dealing Efforts

  The Company always tries to cover most of its interest payment and installments over its principal debt held in foreign currency by its export proceeds and regularly adjust its selling price following the interna?? onal market’s price.

The Company realizes that the success of an organization depends on the balance it created with its community as well as the environment surrounds the organization.

The following cite some concrete actions taken by the Company in order to fulfill all its corporate social responsibility during 2008:

• Implementing the concept of Clean Development Mechanism by converting the Company’s liquid waste into electricity energy to fulfill the factories’ needs of electricity. The cassava fiber namely “onggok” is the main raw material to produce citric acid and cassava skin is produced become organic fertilizer.
• Build and/or fix the pray facilities for employees as well as for surrounding communities within the factories’ areas.
• Provide donations for surrounding communities within the factories’ areas during Ramadhan.
• Distribution of qurban and zakat fitrah
• Provide for donations for natural disasters
• Provide for clean watering for surrounding communities within the factories’ areas
• Support the village activities in the form of sport youth activities and village competition.
• Support for the economic growth of surrounding communities and farmers by way of building a cooperation of farmer group and provide for working capital for those farmers by acting as mediator to distribute the Credit for Endurance of Food and Energy from the national banking system.