As a State-Owned Enterprise Company that manages the State's assets for and on behalf of the Minister of Finance, PPA realizes the important role played by Good Corporate Governance. PPA is committed to comply with relevant regulations and to ensure that Good Corporate Governance practices are consistently implemented as well as to make GCG as the Company's operational platform. Therefore, in managing the State's assets, PPA always considers the principles of Transparency, Independence, Accountability, Responsibility and Fairness.

The governance structure had been modified in such a way that it could support the Company's asset management activity in a responsible and controlled manner. Decision making functions and supervising functions are clearly defined.

GOVERNANCE STRUCTURE
PPA's internal governance structure consists of the General Meeting of Shareholders represented by Ministry of SOE, Commissioners and Directors. In addition, as an SOE that manages the State's assets, the broader term of PPA's governance reflects its function of the managing State's assets as well as serving the public through its duty of managing the states assets.

In addition to being corporately responsible to shareholders as stipulated in the Articles of Association, the Company is responsible to the Minister of Finance as the State Asset Management Company that assigned the asset management that assigned the asset management to PPA under the Asset Management Agreement dated March 24, 2004 between PPA and the Minister of Finance.

This kind of structure requires such mechanisms in the form of regulations, procedures and clear communications between the decision-making party and the supervising party. Furthermore, the principles and the practice of GCG are translated into PPA's work system and business process heading toward the formation of corporate culture that reflects GCG.

PPA expected that it could achieve the condition of this GCG in order to attempt its long-term goal achievement, which in fact is the role of the Directors with the support of the all employees.

The GCG implementation at PPA is an effort to protect and to maintain the balance of interest between Shareholders and the Company's other stakeholders. In this case, an effective check and balance mechanism is necessary a proper functions and authority of which they can complement each other. To create that check and balance mechanism, the Company already has several important elements such as internal control system, effective audit system, risk management as well as reliable Company's reporting.

• Commissioner
  PPA's commissioners consist of 6 members that represent shareholders. One of the Commissioner acts as the Chairman of the Board. The Commissioners are responsible to supervise the Directors in managing the Company as well as giving advice to the Directors including the execution of the Company's Long Term Plan, the Company's Work and Budgetary Plan as well as Article of association ang General Meeting of Shareholders Decision and governing laws.

• Audit Committee
  PPA's Audit Committee is an instrument of PPA's Commissioners that is formed by PPA Commissioners' Decision. The Audit Committee works collectively assisting the Commissioners duties in determined the effectiveness of internal control system and the effectiveness of the external and internal auditor work implementation.

• Directors
  The management of PPA is operated by 7 Directors, lead by a President Director who has assist by a vice President Director and 5 other Directors, that consist of Director of Equity Asset Management, Director of Credit & Property Asset Management, Director of Finance & Support, Director of Legal & Human Resource and Director of System, Procedure and Compliance.

• The Commissioners' and Directors' Meetings
  Besides the Commissioners as well as the Directors internal meetings, there were also joint meetings between Commissioners and Directors for at least once a month or whenever is deemed necessary. The joint meeting meetings are performed to discuss progress and/or decision making related to the implementation plan of the corporate and asset management activities.

• Internal Control System
  PPA's internal control system is a system designed to provide reasonable assurance to achieve the Company's three main objectives, namely:
  - Asset management effectiveness and efficiency
  - The reliability of the Company's financial reporting
  - The Company's compliance with applicable laws and regulations.

  PPA's internal control system is supported by 5 (five) interrelated components, namely:
  - Control environment
  - Risk assessment
  - Control activities
  - Information and communication
  - Monitoring

• Internal Audit Unit
  Internal Audit Unit (SPI) is formed as an internal auditor work unit to assist the President Director with main duties of carrying out internal audits on finance and operations, evaluation of the control management and execution of the finance and operations and providing suggestions for improvement. The SPI is also one of the units that plays an important role in upholding GCG within the Company.

  As the platform of the implementation of SPI's duties, PPA issued the Internal Audit Charter. With the issuance of the charter, all Company's management levels must give their full commitment SPI's functions so that these functions may run according to the internal Audit Charter which in turn will help create a good corporate governance.

  With its position in the Company's organization structure and pursuant to the Internal Audit Charter, SPI may carry out assurance and consultation assignment on all work units within the Company and maintain the independency an objectivity of all management levels being deal with.

• Risk Management
  Like any other companies, in carrying out the asset management and administration of assets, as well as other operational activities the Company faces various risks such as financial, operational and legal risks. Those risks and potential risks need to be identified and managed properly so the impact/consequence can be minimized or avoided.

  The Directorate of System, Procedure and Compliance is responsible for making sure that the company's risk management is done effectively and consistently, both in asset management functions include:
  - Identification of potential risks in the asset management and administration as well as in other operational activities
  - Study and assessment on the impact of potential risks
  - Determination of measures to mitigate risks
  - Formulating and suggesting alternative activities of asset management and/or administration and other operation activities that are considered having lower potential risks.

• External Auditor
  In conducting the Company's financial statement audit abd the Partneship and Community Development Program (PKBL), PPA's General Meeting of shareholders has delegated the Commissioners to appoint an external auditor to audit the Company's financial statement and the implementation of PKBL.

• Corporate Secretary
  The Corporate Secretary plays an important role as a liaison officer between the Company and its stakeholders and develops the Company's positive image through transparent communications to all involve parties.