Professional Documents
Culture Documents
ON
PREPARED BY:
2. Executive Summary
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“AOA” : Articles of Association of PT. Mitra Setia Tanah Bumbu.
“Company’s : M. Aliansyah B;
Founders” Indra Hamita;
or Bahrun;
Liana Hamita.
“Companys’ : M. Aliansyah B;
Shareholders Bahrun;
Fahriani.
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“SITU” : Surat Izin Tempat Usaha or Business Location Permit.
The Company has complied with all mandatory administrative processes required
in respect of establishment of a limited liability company pursuant to the
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Company Law required at the time of its incorporation and is a legally
incorporated company established in Indonesia. Please see comments Chapter 2.
The name of the Company is “PT MITRA SETIA TANAH BUMBU”, the legal domicile
is in Batulicin district, Tanah Bumbu regency, South Kalimantan province and the
registered address as shown in the business location permit issued by Tanah
Bumbu Regent is at Jl. PT. Kodeco Km.2,5 Village of Tungkaran Pangeran,
Batulicin District,Tanah Bumbu Regency, South Kalimantan Province.
3. Period of Establishment
Unlimited.
The main objects of the Company as per Article 3 of the AOA are to operate in the
field of trading, construction, mining, industry, transportation, agribusiness and
services.
Note: We note the objects of the Company are to continue the objects of CVM.
However, we have not sighted documents of CVM in order to confirm this.
Pursuant to the AOA, the Company was established with the following capital
structure and shareholding:
Note: The assets of the CVM have been absorbed towards the capital of the
Company. Please see item 6 at Chapter 3 for further comments.
The Company’s BOD and BOC as of the date of this LDD Report are as follows:
BOD:
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President Director : M. Aliansyah B.
Director : Bahrun
BOC:
Commissioner : Fahriani
The tenure of both the BOD and BOC is 5 (five) years from 10 April 2008 without
prejudice to the right of the GMS to dismiss them at any time and subject to
resignations.
7. Licenses
9. Apparent Issues
a. The Company is required to obtain its permanent TDP, as the current TDP
has been obtained prior to its incorporation. Please see item 1 in Chapter 4
further comments;
b. We have not sighted the trading business activity reports of the Company as
required under the SIUP and the Decree of Ministry of Industry and Trade of
the Republic of Indonesia No. 289/MPP/KEP/10 Year 2001. Please see item 4
in Chapter 4 for further comments.
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c. We have not sighted documents in respect of the KP obligations (please see
item 7 in Chapter 4 for further comments). Non compliance of KP obligations
can result in revocation of the KP.
e. We have not sighted the MOLHR approval for Deed No.12 dated 10 April
2008, made by Rasfienora Ronadinihari, S.H., Notary in Batulicin – Tanah
Bumbu. Please see item 2 in Chapter 2 for further comments.
f. We have not sighted the renewed or current valid coal trading approval of
the Company. Please see item 7 (c) of Chapter 4 for further comments.
g. We have not sighted the land title certificates standing in the name of the
Company or the sale and purchase agreement between the Company and
the local land owner. Please see item 1 of Chapter 5 for further comments.
h. Per Article 1(3) of the New Company Law, the Company is required to
participate in the sustainable economic development in order to enhance the
quality of life and environment. To this effect we have not sighted any
evidence of such participation / any compliance with the laws.
i. The Company has to adjust its KPs into Operation Production IUP as per the
New Mining Law within one year from the date of issuance of the New Mining
Law (12 January 2009).
CHAPTER 1
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TERMS AND CONDITIONS OF LEGAL DUE DILIGENCE
This Legal Due Diligence Report (“LDD Report”) of the Company has
been prepared by SJD for the Client in connection with the cooperation of
the Company with PT AE (the “Transaction”).
SJD’s role with regard to the Transaction is to conduct a legal due diligence
on the Company.
C.1 The legal due diligence (the “LDD”) has been conducted through a review
of (relevant) documents provided to us by the Company with focus on legal
issues arising from information available in respect of prevailing applicable
Indonesian law and regulations.
C.2 The following areas are expressly excluded from the scope of the LDD:
a. accounting and financial issues (including, without limitation, validity
and review of audited account, financial statements, forecast, budgets,
cash flow and certified accounts);
b. analysis of risk, liabilities and compliance in respect of its business
activities.
c. employee provident funds;
d. commercial evaluation of the Transaction;
e. commercial and financial evaluation of: (a) shares and (b) assets of the
Companies; and
f. Director’s & Commissioner’s resume details.
C.3 This LDD Report has been compiled from review of documents provided as
copies by the Company as listed in the attachment of this LDD Report.
C.4 Other reports may also have been commissioned in conjunction with the
due diligence exercise by the Client. This LDD Report does not address, or
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purport to address in any detail, items and matters dealt with in those
reports and reference should be made to those reports in full.
C.5 Save where indicated herein, we have not carried out any independent
verification of the information contained in the supplied documents.
C.6 This LDD Report has been prepared on the basis of the following
assumptions:
a. that all opinions and views expressed to us by the Company or their
agents or the managers, employees and advisers are honestly held by
them and that all such opinions and views expressed to us were when
made and continue to be based on reasonable assumptions and that all
statements of fact by any of the foregoing persons were when made
and continue to be true, accurate, correct and not misleading in any
way;
b. that all copies of documents furnished to us as copies are authentic
and complete and conform with the originals thereof, and that such
originals are authentic;
c. that, where a document was provided to us in draft form, it was
executed or will be executed in the form of that draft;
d. that all agreements, instruments and documents entered into,
executed and/or issued by or on behalf of the Company and reviewed
by us were duly authorized and were validly executed and that the
relevant parties thereto had all necessary capacity under its or their
constitutions to do such things;
e. that all information or documentation supplied to, or examined by us in
connection with the preparation of this LDD Report, or from which this
LDD Report was compiled, was and remains true and complete and is
not misleading in any way;
f. all chops and signatures, where relevant, on all the documents
submitted to us, are genuine;
g. all necessary Board of Directors and Board of Commissioners and
Shareholders meetings have been duly convened and resolutions duly
adopted by the Directors and Commissioners and Shareholders (as
the case may be) of the Company and, where relevant, by other
parties to the documents, and have not been amended or rescinded
and remain in full force and effect;
h. subject to Clause D.2 hereof, all corporate records including but not
limited to minutes, resolutions and records which we may have seen
are complete and accurate;
i. all signatories to the documents (where relevant) have due authority
to execute the same;
j. all agreements and documents have been duly authorized, executed
and delivered by the parties thereto;
k. all statutory requirements and fillings in Indonesia have been
complied with save for the ones stated otherwise; and
l. there are no provisions of laws or public policy of any applicable
jurisdictions outside Indonesia which would be contravened by the
execution delivery or performance of the relevant agreements
disclosed.
C.7 In preparing this LDD Report, we have limited our inquiries to matters of a
legal nature and accordingly we have not raised queries in respect of, or
otherwise investigated and accordingly express no opinion on any of the
matters referred to in Clause C.2 hereof.
C.8 This LDD Report and review of the agreements and documentation
contained herein is limited to matters of Indonesian law. We express no
opinion with respect to the laws of any other jurisdiction or any documents
or agreements which may be subject to, or governed by, the laws of any
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other jurisdiction. To the extent that this LDD Report contains, or is
compiled from, reports, opinions or memoranda from any other person, that
person remains wholly and exclusively responsible for the contents thereof.
C.9 The contents of this LDD Report reflect the position made known to us by
the Company and/or the Client as at 1st December 2009.
D. OBSERVATIONS
D.1 Apart from the review of the documents supplied to us, we have had to
place total reliance on the Company to identify what other documents may
be material for the purpose of the legal due diligence exercise and this LDD
Report. In other words, we are unable to confirm definitively whether or not
all material documents have been disclosed to us by the Company.
D.2 During the course of this LDD exercise, we have encountered several
instances of incomplete documentation. Where relevant, such findings are
highlighted in the body of this LDD Report.
D.3 Where our LDD Report states “to the best of our knowledge” or “we have
not sighted”, this assumes prior requests already made by us for relevant
documentation (as applicable) and conclusions made without such
documentation or on the basis only of information available/provided to us.
CHAPTER 2
HISTORICAL REVIEW ON THE INCORPORATION AND THE
AMENDMENTS TO THE ARTICLES OF ASSOCIATION OF
THE COMPANY
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1. Deed No.15 dated 15 December 2004 made before Rasfienora Ronadinihari, S.H.,
Notary in Batulicin – Tanah Bumbu, ratified by the MOLHR by its virtue of decree
No.C-08063 HT.01.01.TH.2005 dated 28 March 2005, stipulates that the
Company’s Founders have agreed to establish a limited liability company named
“PT MITRA SETIA TANAH BUMBU”, domiciled in Batulicin – Tanah Bumbu, South
Kalimantan.
Considering, that the incorporation of the Company has complied with all
mandatory administrative processes required in respect of establishment of a
limited liability company pursuant to the Old Company Law required at the time
of its incorporation, it can therefore concluded that the establishment of the
Company and its initial AOA as stipulated in the DOE are valid and legally binding.
Note: We note from Article 4 of the AOA, that the payment of shares of PTMSTB
is made from the assets of CVM.
2. Deed No.12 dated 10 April 2008, made by Rasfienora Ronadinihari, S.H., Notary in
Batulicin – Tanah Bumbu, stipulates the execution of the minutes of meeting of
the Company on 10 April 2008, attended by all of the Company’s Founders as
stipulated in the DOE, which adopted the following resolutions:
The share transfer was set out in the deeds of transfer of shares No.13 and
No.14 dated 10 April 2008, both deeds made by Rasfienora Ronadinihari,
S.H., Notary in Batulicin – Tanah Bumbu;
b. Amend the entire provisions of the Company’s AOA with the provisions of
the New Company Law.
Note:
SJD has been provided with the statement dated 2 April 2009, made by
Rasfienora Ronadinihari, S.H., Notary in Batulicin – Tanah Bumbu ( “Notary
Statement”), stating that the MOLHR approval and State Gazette for Deed No.12
dated 10 April 2008 is still in process.
It is our suggestion that the Company to check with the handling notary on the
status of issuance of MOLHR approval in connection with the Deed no. 12 dated
10 April 2008 as the statement issued by the notary on the changes having been
reported to the MOLHR has been over 3 months.
CHAPTER 3
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CORPORATE STATUS OF THE COMPANY &
SIGNIFICANT PROVISIONS OF THE COMPANY’S AOA
The following are the results of SJD’s legal due diligence on the corporate status of the
Company as stipulated in the provisions of the Company’s AOA which is deemed to be
significant and/or material in respect of the transaction; such legal due diligence is
being based on review of the Company’s AOA by SJD:
The DOE, which has been ratified by the MOLHR by its virtue of decree No.C-
08063 HT.01.01.TH.2005 dated 28 March 2005, stipulates that the Company’s
Founders have agreed to establish a limited liability company named “PT Mitra
Setia Tanah Bumbu” domiciled in Batulicin – Tanah Bumbu, South Kalimantan.
Note: We note from Article 4 of the AOA, that the payment of shares of PTMSTB
is made from the assets of CVM.
Pursuant to the provisions of Article 1 (1) of the AOA, the name of the Company is
“PT MITRA SETIA TANAH BUMBU”;
Pursuant to Article 1(2) of the AOA, the Company may establish a branch office or
representative office as determined by the BOD.
4. Period of Establishment
Pursuant to Article 2 of the AOA, the Company has been established for an
unlimited period of time.
Pursuant to Article 3(1) of the AOA, the objects of the Company are to operate in
the field of trading, construction, mining, industry, transportation, agribusiness
and services.
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In order to achieve, the abovementioned object, pursuant to Article 3 (2) of the
AOA, the Company is authorized to conduct the following:
(a) business in the field of trading including local, inter-island, import, export
and acting as an agent, purveyor, supplier, distributor and
agent/representative of other business entities whether for its own account
or at the expense of other parties for any kind of tradable goods;
(b) business in the field of construction including planning, execution, general
contractor amongst other constructions of houses (real estate), industrial
zone, buildings, apartment, condominium, bridge, road, pier, airport, park,
land filling and leveling, installation of electricity, water, gas and
telecommunication, electric navigation and others;
(c) business in the field of mining activities of coal, iron sand, gold and marble,
as well as exploration, exploitation and marketing of mining products
except drilling for oil and gas;
(d) business in the field of industry such as hard chalk and limestone;
(e) business in the field of transportation both land and sea transportation;
(f) business in the field of agriculture, plantation, forestry, animal husbandry,
inland and sea fisheries;
(g) business in the field of other services, except tax and legal services.
Note :
The Company’s objects have been amended along with the adjustment of the
AOA with the provisions of the New Company law. Any amendment to the objects
per New Company law requires approval from the MOLHR. In this respect, a
Notary Statement has been issued to confirm such amendment is pending
issuance of the MOLHR approval.
Note: The issued and paid-up capital of the Company is derived from the assets
of CVM. Per Article 34 (2) (3) of the New Company, payment towards shares made
in any form other than cash requires of an expert to determine the market value
of the assets and the payment of shares in the form of immovable assets must be
announced in 1(one) newspaper at least within 14 days from the date of
execution of the deed of establishment.
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We have in this respect neither sighted the valuation report issued by the
authorized nor the news paper publication.
Further, the DOE of the Company stipulates that all legal actions with third parties
conducted by CVM, prior to such absorption of CVM’s assets, shall be the liability
of the former partners of CVM and therefore personally binding to them;
BOD:
President Director : M. Aliansyah B.
Director : Bahrun
BOC:
Commissioner : Fahriani
The tenure of the BOD and BOC is 5 (five) years from 10 April 2008, without
prejudice to the right of the GMS to dismiss them at any time and subject to
resignation.
B. Appointment of BOD
2. members of the BOD are appointed by the GMS for a period of 5 (five)
years, without prejudice to the right of the GMS to dismiss them at any
time;
5. a member of the BOD has the right to resign from his/her position by
notifying in writing to the Company at least 30 (thirty) days prior to
his/her resignation;
6. the tenure of the member of the BOD expires in the event of:
a. tendering resignation in accordance with the provisions of item
(5) above;
b. no longer qualified as per the prevailing laws and regulations;
c. death;
d. being dismissed pursuant to GMS resolution.
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Note: Pursuant to Article 11 (1) is 3 (three) the Company is required to be
managed by 3 BOD members. However, the Company is managed by 2
directors only.
Pursuant to Article 12 of the AOA the duties and powers of the BOD are as
follows:
1. the BOD shall be entitled to represent the Company in and out of the
court of law, in connection with all matters and events, to bind the
Company with other parties and vice versa, as well as to perform any
act/s on behalf of the Company pertaining to both management and
ownership affairs, but with the limitation that to:
a. borrow or lend money on behalf of the Company (exclusive of
withdrawal of the Company’s money in a bank);
b. establish new business or participate in other companies, inside
as well as outside of the Republic of Indonesia;
requires the approval from BOC.
2. the President Director shall have the right and authority to act for and
on behalf of the BOD and to represent the Company;
D. Appointment of BOC
Pursuant to Article 14 of the AOA the appointment the BOC shall be below:
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E. Duties and Powers of BOC
Pursuant to Article 14 of the AOA, the duties and powers of the BOC are as
follows:
1. the BOC is entitled at any time during the business hours of the
Company’s office, to enter the building and premises or any other
place/s used or controlled by the Company and is entitled to verify
accounts, letter and other documents, checking and verifying cash and
any other act and is further entitled to be informed of every act carried
out by the BOD;
2. the BOD and each member of the BOD shall be obligated to respond to
the queries from the BOC;
3. if all members of the BOD are suspended and the Company does not
have any member of the BOD, the BOC is obligated to temporarily
manage the Company. In such an event, the BOC shall be entitled to
confer an interim power on one or more persons amongst them and
shall be jointly responsible for such appointment;
4. if there is only one member of the BOC, all the powers and authorities
given to the President Commissioner or the members of the BOC under
the AOA shall also be valid for him/her.
a. The BOD shall prepare and submit annual working plan, which shall also
contain an annual budget, to the BOC no later than 30 (thirty) days prior to
the commencement of the following financial year;
c. The BOD shall prepare the annual report and maintain it in the office of the
Company for review by the Shareholders as of the date of summon of the
Annual GMS.
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iii. No.00003 representing 125 (one hundred twenty five) shares bearing
the number 00001260000250, held in the name of Fahriani, with a
nominal value of IDR 125,000,000 (one hundred twenty five million
Indonesian Rupiah).
Note: The BOD is obligated to record every transfer of shares in the register of
shareholders and special register of the shareholders. Further, the Company is
obligated to notify any transfer of shares to the MOLHR at the latest 30 (thirty)
days from the date of the shareholders resolution.
CHAPTER 4
MATERIAL LICENSES, PERMITS, APPROVALS & REGISTRATION OF
THE COMPANY
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1. Mandatory Company Registration
The following are the details of the Company’s registration pursuant to the TDP:
In view of the above, it can be concluded that the Company has complied with its
obligation in accordance with Law No.3 of 1982 regarding Mandatory Registration
of Companies and Decree of the Ministry of Industry and Trade of the Republic of
Indonesia No.596/MPP/KEP/9/2004 Year 2004 dated 23 September 2004 regarding
Standard of Organization of Mandatory Company Registry as the prevailing
regulation concerning TDP at that time.
Note:
Pursuant to Article 2 of the Decree of the Ministry of Trade of the Republic of
Indonesia No.37/M-DAG/PER/9/2007 the Company is obligated to obtain TDP
within 3 (three) months from the date of issuance of MOLHR approval, failing
which the Company’s Directors may be imprisoned for a maximum period of 1
(one) month or the Company may be imposed with fine of IDR3, 000,000(three
million Rupiah).
We suggest the Company to process the new TDP after the MOLHR approval on
Deed No.12 dated 10 April 2008 has been obtained and provide us with the new
TDP.
We have been provided with the business location permit (Surat Izin Tempat
Usaha – SITU) No.503/187/ITU/2008 dated July 2008 issued by the Regional
Secretary (on behalf of the Tanah Bumbu regent), confirming Jl. PT. Kodeco
Km.2,5 Village of Tungkaran Pangeran, District of Batulicin, Regency of Tanah
Bumbu as the domicile of the Company.
The business location permit is valid for 3 (three) years as from 9 July 2008 to 9
July 2011.
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Note: We note that the business location permit is undated. Therefore, we
suggest the Company to obtain a new business location permit which stipulates
the date of issuance and validity period of the business location permit.
Note: Pursuant to Law No.6 of 1983 regarding general taxation provisions and
procedures lastly amended by law No.28 of 2007 in conjunction with the decree
of the Ministry of Finance No.552/KMK.04/2000 lastly amended by the decree of
the Ministry of Finance No.571/KMK.03/2003, the Company is not yet classified as
the Taxable Entrepreneur (Pengusaha Kena Pajak) and therefore the Company is
not obligated to register its business to the Directorate General of Tax to be
affirmed as the Taxable Entrepreneur.
The Company shall obtain taxable entrepreneur affirmation letter in the event of
the Company’s turnover being over IDR600.000.000 (six hundred million
Indonesian Rupiah) per year.
The Company’s SIUP is valid for conducting trading business activities in the
territory of the Republic of Indonesia. The SIUP is valid for the period of 5 (five)
years from the date of the issuance and shall be valid until 7 December 2009.
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services/goods : mining, sale and purchase of coal, iron
ore, industry, shipping, land and sea
transportation.
d. Obligations:
(i) to submit trading business activity report annually (at the latest 31
January of the following year);
(ii) to renew this Trading Business License by 7 December 2009.
Note: We have not been provided with the trading business activity reports.
Pursuant to the decree of the Ministry of Trade of the Republic of Indonesia
No.36/M-DAG/PER/9/2007 regarding issuance of the trading business license
(“Reg No. 36/2007”), any company that fails to submit activity report shall be
issued with a Non-compliance letter. In the event of the Company not reporting
its activity within the following 3 (three) upon issuance of the non compliance
letters, the SIUP will be suspended for 3 (three) months. Pursuant to Article 22 of
Reg No. 36/2007) further non compliance after suspension of SIUP will result in
revocation of the SIUP.
Pursuant to Law No.7 of 1981 regarding the Mandatory Manpower Report, every
company shall submit a manpower report to the Ministry of Manpower and
Transmigration or the appointed official. The violation for not submitting the
manpower report will attract imprisonment for a maximum period of 3 (three)
months or a fine of maximum IDR 1,000,000, (one million Indonesian Rupiah).
Note: Pursuant to Law No.3 of 1992 regarding the Jamsostek and government
regulation no.14 of 1993 regarding implementation of Jamsostek, lastly amended
by government regulation no.7 of 2007, which stipulates that companies
employing 10 (ten) or more employees or pay wages atleast IDR1,000,000 (one
million Rupiah) per month must participate in Jamsostek.
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Note: Pursuant to Article 43 of the Manpower Law, every company employing
expatriates should obtain RPTKA which is legalized by the Ministry of Manpower
and Transmigration.
Note: SJD has been provided with a letter No.020/MSTB/IV/09 dated 30 March 2009
stating that the Company is not in operation and therefore does not have to comply
with the obligations in respect of manpower.
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4. No.545/37/KP/D.PE dated 2 TB.03SEPPR05 2 (two) years 553,4
July 2007 - 2nd Extension from 4
for Exploration KP September
No.545/71/KP/D.PE dated 3 2006 to 3
September 2005 September
2008.
Exploitation KP
5. No.545/07-EX/KP/D.PE TB.03SEPPR05 3 (three) 199,8
dated 4 March 2004 years from
the date of
issuance.
6. No.545/12-EX/KP/D.PE TB.03SEPPR05 3 (three) 192,2
dated 21 June 2004 years from
the date of
issuance.
7. No.545/48-EX/KP/D.PE TB.03SEPPR05 3 (three) 184,2
dated 17 March 2005 years from the
date of
issuance.
8. No.545/62-EX/KP/D.PE TB.03SEPPR05 3 (three) 199,9
dated 3 September 2005 years from the
date of
issuance.
Note: The KPs referred to at item nos. 5 to 8 do not explicitly refer to the extensions
of Exploration KP (item no. 4). However, the area code referred to in the above KPs
are the same, as that of the area code referred to in item no. 4 above [technically the
Exploration KP as referred at item no.1].
Extension of Exploitation KP
9. No.545/150-EX/KP/D.PE TB.03SEPPR05 3 (three) 199,8
dated 12 July 2007 -1 st
years from 4
Extension of KP referred to March 2007 to
in item no.5 3 March 2010
10. No.545/151-EX/KP/D.PE TB.03SEPPR05 3 (three) 192,2
dated 12 July 2007-1st years from 21
Extension of KP referred to June 2007 to
in item no.6 20 June 2010
Hauling and Selling KP
11. No.545/07-PP/KP/D.PE TB.03SEPPR05 3 (three) -
dated 4 March 2004 years from the
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date of
issuance
12. No.545/12-PP/KP/D.PE/2004 TB.03SEPPR05 3 (three) -
dated 21 June 2004 years from the
date of
issuance
13. No.545/48-PP/KP/D.PE TB.03SEPPR05 3 (three) -
dated 17 March 2005 years from the
date of
issuance
14. No.545/62-PP/KP/D.PE TB.03SEPPR05 3 (three) -
dated 3 September 2005 years from the
date of
issuance
Extension of Hauling and Selling KP
15. No.545/150-PP/KP/D.PE TB.03SEPPR05 3 (three) 199,8
dated 12 July 2007 - 1 st
years from 4
Extension of KP referred to March 2007 to
in item no. 11. 3 March 2010
16. No.545/151-PP/KP/D.PE TB.03SEPPR05 3 (three) 192,2
dated 12 July 2007 - 1st years from 21
Extension of KP referred to June 2007 to
in item no. 12 20 June 2010
b. Summary of KPs:
i. Exploitation KPs
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This first extension of Exploitation KP is granted for a period of 3
(three) years and retrospectively valid from 4 March 2007 until 3
March 2010 and may be revoked at any time if the Company does
not comply with the prevailing laws and regulations and the
obligations hereunder:
a) comply with the laws and regulations related to the granting of
the KP;
b) notify the regional government of Tanah Bumbu regency prior
to commencement of the activities;
c) the relationship between the Company and third parties shall
be the responsibility of the Company in accordance to the
applicable laws;
d) to pay the dead rent and exploitation fee in accordance with
the applicable laws and shall be fully paid before the expiry of
the KP;
e) to resolve the overlapping issue in accordance with the
applicable laws prior to the commencement of the activities if
the mining area overlaps with the interest or right of the
others;
f) i). shall provide 3 (three) copies of working plan and budget
to the Tanah Bumbu regent c.q. Mining and Energy
Service of Tanah Bumbu at the latest 30 (thirty) days as
from the date of issuance of the KP;
ii). provide 1 (one) copy of quarterly report to Tanah
Bumbu regent and 2 (two) copies of such report to the
Mining and Energy Service;
g) shall provide road or other facilities to the other KP holder;
h) in respect of supervising:
i). the Company shall appoint the head of mining
engineering who shall be responsible in respect of work
health and safety as well as environment in the field of
general mining;
ii). supervisory is conducted by the mining inspector and the
official appointed by the mining and energy service of
Tanah Bumbu regency;
iii). the Company is entitled to check and confirm the identity
of the supervising officer by requesting for the identity
card and letter of assignment of the mining inspector or
the appointed official to be shown;
i) i). application for a KP extension shall be submitted at least
3 (three) months prior to expiry of the KP together with
the evidence of the fulfillment of obligations;
ii). failure to comply with item (a) above will result in:
- expiration of the KP by virtue of law and all the
mining activities shall cease;
- removal of the Company’s properties no later than 6
(six) months as from the date of expiry of the KP,
except materials/buildings used for the purpose of
public interest;
- settle unfinished/unsettled obligations.
j) have domicile in the district of Tanah Bumbu regency;
k) i). the Company shall obtain prior written
recommendation/approval from the Tanah Bumbu regent
c.q. mining and energy service should the Company
intend to cooperate with third party/ies;
ii). the Company is required to obtain prior written
approval from the Tanah Bumbu regent should the
Company intend to cooperate with foreign investor in the
framework of Coal Contract of Work.
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2) Decree of the regent of Tanah Bumbu No.545/151-
EX/KP/D.PE dated 12 July 2007 regarding first extension of
Exploitation KP
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together with the evidence of the fulfillment of
obligations;
ii). failure to comply with item (a) above will result in:
- expiration of the KP by virtue of law and all the
mining activities shall cease;
- removal of the Company’s properties no later than 6
(six) months as from the date of expiry of the KP,
except materials/buildings used for the purpose of
public interest;
- settle unfinished/unsettled obligations.
j) have domicile in the District Court of the Regency of Tanah
Bumbu;
k) i). if the Company have the intention to have cooperation
with third party, the Company shall obtained prior written
recommendation/approval from the Regent of Tanah
Bumbu c.q. Mining and Energy Service;
ii). if the Company have the intention to have
cooperation with foreign investor in the framework of Coal
Contract of Work, the Company shall obtained prior
written approval from the Regent of Tanah Bumbu.
Note: The KP may be revoked if the Company fails to comply with any of
the above KP’s obligations and conditions
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2) Decree of the regent of Tanah Bumbu No.545/151-
PP/KP/D.PE dated 12 July 2007 regarding the first extension
on Mining Authorization of Hauling and Selling.
Note: The above KPs have been issued in accordance with the Old Mining
Law. The New Mining Law came into effect from 12 of January 2009, and in
this connection, it is required of all KP holders to adjust their KPs to become
Izin Usaha Pertambangan (“IUP”)- Mining License. The implementing
regulations in connection with the New Mining Law have not been issued as
yet. We suggest the Company to constantly check with the relevant local
authority/ies as well as the department of energy and mineral resources
(Energi dan Sumber Daya Mineral - ESDM) in this connection.
The Company was granted with an Approval issued by the Industry, Trade,
Cooperation, Small and Medium Scale Enterprises and Investment Service of
Tanah Bumbu, with the following conditions:
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been amended with the Decree of the Governor of South Kalimantan
No.0213 of 2004 dated 12 April 2004;
iii. acknowledgement is valid for 1 (one) year as from the date of the
issuance;
Note: The Approval is valid for 1 (one) year from the date of issuance being
26 November 2004 and has expired on 26 November 2005 and we have not
sighted the renewal/current valid coal trading acknowledgement.
The Company has been issued with the Letter from the Regent of Tanah
Bumbu with the following conditions in connection with the Company having
coal mining cooperation with PT JSI:
i. the mining activities shall be conducted within the mining area of the
Company, as set out in the Exploitation KP of the Company pursuant to
the Decree of the Regent of Tanah Bumbu:
a) No.545/62-EX/KP/D.PE dated 3 September 2005;
b) No.545/48-EX/KP/D.PE dated 17 March 2005;
c) No.545/150-EX/KP/D.PE dated 12 July 2007;
d) No.545/151-EX/KP/D.PE dated 12 July 2007;
e) No.545/37/KP/D.PE dated 2 July 2007;
f) with Area Code TB 03 SEPPR 05;
ii. the mining activities shall refer to the right and an environmental
friendly mining norms and to observe the social condition of the local
people, to conduct Community Development programs and reclamation;
iii. PT JSI shall be fully responsible and comply with the obligations pursuant
to the applicable laws and regulations in general mining;
iv. The Company and PT JSI shall fulfill the obligations under the cooperation
agreement executed by and between the parties on 14 December 2007,
legalized by Notary Rasfienora Ronadinihari, SH, Notary in Batulicin
under No.738/Leg/XII/2007.
The Company has been issued with the Letter from the Regent of Tanah
Bumbu with the following conditions in connection with the amendment of
the Mining Cooperation Agreement executed between the Company and PT
AE:
i the mining activities shall be conducted within the mining area of the
Company, as set out in the Exploitation KP of the Company pursuant to
the Decree of the Regent of Tanah Bumbu:
a) No.545/151-EX/KP/D.PE dated 12 July 2007;
b) No.545/48-EX/KP/D.PE dated 17 March 2005;
c) No.545/62-EX/KP/D.PE dated 3 September 2007;
d) No.545/62-EX/KP/D.PE dated 12 July 2007;
e) No.545/62-EX/KP/D.PE dated 2 July 2007
f) with Area Code TB 03 SEPPR 05
ii the mining activities shall refer to the right and an environmental
friendly mining norms and to observe the social condition of the local
people, to conduct Community Development programs and reclamation;
iii the Company shall be fully responsible and comply with the obligations
pursuant to the applicable laws and regulations in general mining;
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iv The Company and PT AE shall fulfill the obligations under the
cooperation agreement executed by and between the parties on 8 June
2009, legalized by Notary Herminda BR Ginting, SH, Notary in
Banjarmasin under No.3877/L/VI/2009.
The Company has been issued with the Recommendation, issued by the Port
Administrator of Kotabaru. The Recommendation was issued to the Company
to construct a special port in Sebamban, Sungai Loban district, Tanah Bumbu
regency, South Kalimantan province.
i. With respect to the Exploitation KPs held by the Company, we have been
provided with the UKL – UPL No.12 dated December 2003, we note that
the UKL – UPL was prepared only for the Exploitation KP No.545/12-
PP/KP/D.PE dated 21 June 2004 as extended by Exploitation KP
No.545/151-EX/KP/D.PE dated 12 July 2007;
Considering that the area for each Exploitation KPs of the Company
(including Exploitation KP No.545/12-PP/KP/D.PE dated 21 June 2004 as
extended by Exploitation KP No.545/151-EX/KP/D.PE dated 12 July 2007) is
less than 200 Ha. and that the annual production is less than 250.000 tons,
the Company is not obligated to prepare an AMDAL and obtain AMDAL
approval from the Tanah Bumbu Regent. However, the Company is still
obligated to prepare UKL – UPL as required under the Decree of the Ministry
for the Environment No.86 of 2002 and shall obtain the recommendation
from the Tanah Bumbu Regent.
8. KP Confirmation:
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We await Client’s to provide power of attorney to conduct KP search.
9. Mapping:
SJD has obtained map from the Directorate General of Mineral, Coal and
Geothermal of the Department of Energy and Mineral Resources dated 25 March
2009 which reflects that
a. Exploitation KP No. 545/150-EX/KP/D.PE dated 12 July 2007; and
b. Exploitation KP No.545/151-EX/KP/D.PE dated 12 July 2007,
are not overlapping with other coal mining area of other companies.
CHAPTER 5
ASSETS OF THE COMPANY &
INSURANCE COVERAGE FOR THE COMPANY’S ASSETS
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1. Land, Machineries & Buildings:
Note :
Per law no.5 of 1960 in respect of Agrarian Laws and its implementing
regulations, the procedures of land release are as follows:
a. Execution of deed of land release before the land deed official or head of
district or regent;
b. Application for land title to the regional office of the National Land Agency
(Badan Pertanahan Nasional – BPN).
c. There are 3 (three) types of land titles provided for mining activities
namely:
i. right of ownership (hak milik), which can only be granted to individual
mining permit holder;
ii. right to build (hak guna bangunan), which is used for the
constructions of facilities and infrastructures for mining operations
(e.g. processing and refining plants, fixed equipments, and special
port);
iii. right to use (hak pakai), which is used for the mining area.
d. Granting of land title by the BPN by issuing land title certificate.
In this respect, we have not sighted any land title certificates standing in the
name of the Company or the deed of land release by the local land owner in
favour of the Company.
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the village head of Sebamban Lama and Mangkalapi (the Company to confirm in
this respect).
3. Vehicles:
SJD has been provided with letter No.020/MSTB/IV/09 dated 30 March 2009,
which states that the KP of the Company is not being encumbered.
BOD & BOC Statement: We have been provided with an undated BOD & BOC
Statement which states that until 12 July 2009 the Company:
a. does not own movable or immovable assets;
b. has not lent/leased any immovable property to any party;
c. has not been a guarantor in any transaction;
d. has not obtained any loan from any bank, non bank financial institution
or any party;
6. Additional Documents
We have not sighted documents in connection with release of land and use of
general facility (such as water, electricity, road, etc) with the other KP holders in
the region if any in the event of commencing the mining activities.
CHAPTER 6
MATERIAL AGREEMENTS & OTHER AGREEMENTS OF THE
COMPANY
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1. Cooperation Agreement on Natural Resources Management on
Indonesian Coal Mining dated 14 December 2007
The following are the significant terms and conditions of the Management
Cooperation Agreement:
a. Scope of Services
b. Coal Sales
All proceeds in connection with sale of coal shall be received by the PT JSI
as the representative of PT AE
c. Supervising
d. Period of Service
e. Royalty Payment
f. Taxes
All taxes arising from the payments of royalty shall be borne by the
Company.
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Obligations of the Company:
The Company shall be responsible to obtain:
i. all the required licenses/approvals for the mining or related activities.
If the licenses/approvals expire, the Company shall be responsible to
extend the period on its own cost.
ii. the Certificate of Origin (Surat Keterangan Asal Barang) and the
documents related to the export of coal production on the expense of
PT AE and all costs shall be converted with the payment of royalty.
iii. the approval from the relevant agency (i.e. Bupati) in respect of this
agreement.
Obligations of PT AE:
PTAE shall be responsible to:
i. finance the mining activities.
ii. recover land which has already been drilled and has no coal deposit as
well as such mine has already depleted.
h. Insurance
i. Dispute Settlement
Any dispute arising out of and in connection with the Mining Cooperation
Agreement shall be attempted to be resolved amicably. However, if such
deliberation fails any settlement, the dispute will be finally referred to the
District Court of South Jakarta.
Note:
We have been provided with:
a. Letter No.153/MSTB/XII/07 dated 14 December 2007, issued by the
President Director of the Company which acknowledges PT JSI payments as
below:
i. goodwill in the amount of IDR3,460,000,000 (three billion four hundred
sixty million Indonesian Rupiah) as land fee with an area of ± 1,845
hectares; and
ii. royalty in the amount of IDR 2,000,000,000,- (two billion Indonesian
Rupiah);
while the down payment for land fee will be paid by PT JSI after PT AE
commences the production.
b. Power of Attorney dated 11 November 2007 from PT AE to PT JSI authorizing
the BOD of PT JSI to represent PT AE and sign the Management Cooperation
Agreement;
c. Substitution Power of Attorney dated 12 November 2007 from the BOD of
PT JSI (represented by its President Director, Sundaraman Nalini) to
Sankaran Sundaraman, Commissioner of PT JSI, to sign the Management
Cooperation Agreement.
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referred to as the “Amendment to the Management Cooperation
Agreement”).
The following are the significant terms and conditions of the Amendment of
Management Cooperation Agreement:
a. Scope of Services
b. Coal Sales
c. Supervising
d. Period of Service
e. Royalty Payment
The Company shall receive royalty in the amount of USD2.65/MT. The down
payment of royalty shall be paid after the production has commenced.
f. Taxes
All taxes arising from the payments of royalty shall be borne by the
Company.
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The Company shall be responsible to obtain:
i. all the required licenses/approvals for the mining or related activities.
If the licenses/approvals expire, the Company shall be responsible to
extend the period on its own cost.
ii. the Certificate of Origin (Surat Keterangan Asal Barang) and the
documents related to the export of coal production on the expense of
PT AE and all costs shall be converted with the payment of royalty.
iii. the approval from the relevant agency (i.e. Bupati) in respect of this
agreement.
Obligations of PT AE:
PTAE shall be responsible to:
i. finance the mining activities.
ii. conduct reclamation which includes recovery of land which has
already been drilled and reforested .
h. Insurance
i. Dispute Settlement
Any dispute arising out of and in connection with the Amendment of Mining
Cooperation Agreement shall be attempted to be resolved amicably.
However, if such deliberation fails any settlement, the dispute will be finally
referred to the District Court of South Jakarta or District Court of Batulicin.
i. that the mining activities shall be conducted within the mining area of the
Company , as set out in the Exploitation KP of the Company pursuant to the
Decree of the Regent of Tanah Bumbu:
a) No.545/151-EX/KP/D.PE dated 12 July 2007;
b) No.545/148-EX/KP/D.PE dated 17 March 2005;
c) No.545/62-EX/KP/D.PE dated 3 September 2007;
d) No.545/62-EX/KP/D.PE dated 12 July 2007
e) No.545/62-EX/KP/D.PE dated 2 July 2007
with Area Code TB 03 SEPPR 05;
ii. that the mining activities shall refer to the correct and environmental
oriented mining norms and to observe the social condition of the local
people, to conduct Community Development programs and reclamation;
iii.that the Company shall be fully responsible and comply with all obligations
pursuant to the applicable laws and regulations in general mining;
iv. that the the Company and PT AE shall fulfill the obligations under the
cooperation agreement executed by and between the parties on 8 June
2009, legalized by Notary Herminda BR Ginting, SH, Notary in Banjarmasin
under No. 3877/L/VI/2009.
Note:
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The New Mining Law has reduced the scope of services that can be provided by
Mining Service Company, the exploitation or processing and refining has now
been excluded.
The Cooperation Agreement of the coal mining dated 14 July 2003 was entered
by and between CVM and local land owners of the village of Hati’if and
Mangkalapi (hereinafter referred to as the “local land owner”), in this matter
represented by Amiruddin as the Village Head of Hati if and Muhammad Dong as
the Village Head of Mangkalapi (“hereinafter referred to as the “Cooperation
Agreement of Coal Mining”).
The following are the significant terms and conditions of the Cooperation
Agreement of Coal Mining:
a. The local land owner agree to render the management of the coal mining
area to CVM;
b. The management of the coal mining area shall include:
i. arrangement and processing of licenses related to the mining
operations;
ii. CVM is responsible to prepare and execute any agreement with any
party to ensure the performance of the agreement;
iii. the Company agree to pay the production results with the local land
owner in the amount as follows:
• land fee in the amount of IDR4,000/metric tons;
• village treasury in the amount of IDR1,500/metric tons; and
• fee for the processing the land in the amount of IDR2,000/metric
tons.
The Cooperation Agreement of Coal Mining has been enclosed with the following
documents:
a. letter dated 14 July 2003on land management;
b. letter dated 5 January 2003on the right over the land;
Note:
1. Bhupathi of the relevant regent had the right under the Old Mining Law to
issue the KP and the area to mine would be identified in the said KP.
2. We note that the Cooperation Agreement of Coal Mining has been executed by
CVM. Pursuant to Article 4 of the AOA of the Company, all legal actions with third
parties conducted by the partners of CVM, prior to such absorption of its assets
shall be the liability of the former partners of CVM and therefore personally
binding to them. In this connection, it is therefore required of the shareholders of
the Company to formally acknowledge the execution of this agreement by holding
a shareholders meeting.
CHAPTER 7
LEGAL/LITIGATION PROCEEDINGS
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SJD has been provided with Letter No.020/MSTB/IV/09 dated 30 March 2009, stating
that the Company is not involved in any case, whether on civil, criminal or any other
case which may be detrimental to the Investor.
However, it is our suggestion that the Client conduct an independent search in order to
ensure no litigation/legal proceedings are filed/pending in courts against the Company
or its management.
LIST OF DOCUMENTS
1. Corporate Documents
a. Deed of Establishment No.15 dated 15 December 2004, made before
Rasfienora Ronadinihari, S.H., Notary in Batulicin - South Kalimantan;
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b. Approval from the Ministry of Law and Human Rights by its virtue of Decree
No.C-08063 HT.01.01.TH.2005 dated 28 March 2005;
c. Deed of Minutes of Meeting No.12 dated 10 April 2008, made before
Rasfienora Ronadinihari, S.H., Notary in Batulicin;
d. Deed of Share Transfer No.13 dated 10 April 2008, made before Rasfienora
Ronadinihari, S.H., Notary in Batulicin;
e. Deed of Share Transfer No.14 dated 10 April 2008, made before Rasfienora
Ronadinihari, S.H., Notary in Batulicin.
2. Licenses
a. Taxpayer Registration Number (Nomor Pokok Wajib Pajak – NPWP)
No.02.242.868.4-732.000;
b. Registered Statement (Surat Keterangan Terdaftar – SKT) No.PEM-
10309/WPJ.14/KP.0603/2004 dated 27 December 2004;
c. Large Scale Trading Business License (Surat Ijin Usaha Perdagangan – SIUP)
No.278/16-13/SIUP-PB/XII/2004 dated 7 December 2004;
d. Company Registration Certificate (Tanda Daftar Perusahaan - TDP)
No.16130000298 dated 7 December 2004;
e. Business Location Permit (Surat Izin Tempat Usaha) No.503/187/ITU/2008
dated July 2008
3. Mining Licenses/Permits/Approvals/Recommendations
a. Exploration KP No. 545/05/KP/D.PE dated 4 September 2003;
b. Exploration KP No.545/61.A/KP/D.PE dated 2 August 2004;
c. Exploration KP No.545/71/KP/D.PE dated 3 September 2005;
d. Exploration KP No.545/37/KP/D.PE dated 2 July 2007;
e. Exploitation KP No.545/07-EX/KP/D.PE dated 4 March 2004;
f. Exploitation KP No.545/12-EX/KP/D.PE/2004 dated 21 June 2004;
g. Exploitation KP No.545/48-EX/KP/D.PE dated 17 March 2005;
h. Exploitation KP No.545/62-EX/KP/D.PE dated 3 September 2005;
i. Exploitation KP No.545/150-EX/KP/D.PE dated 12 July 2007;
j. Exploitation KP No.545/151-EX/KP/D.PE dated 12 July 2007;
k. Hauling and Selling KP No.545/07-PP/KP/D.PE dated 4 March 2004;
l. Hauling and Selling KP No.545/12-PP/KP/D.PE/2004 dated 21 June 2004;
m. Hauling and Selling KP No.545/48-PP/KP/D.PE dated 17 March 2005;
n. Hauling and Selling KP No.545/62-PP/KP/D.PE dated 3 September 2005;
o. Hauling and Selling KP No.545/150-PP/KP/D.PE dated 12 July 2007;
p. Hauling and Selling KP No.545/151-PP/KP/D.PE dated 12 July 2007;
q. Acknowledgement as Coal Trader No.06/16-13/PD/XI/2004 dated 26
November 2004;
r. Recommendation No.545/331.9/PU/TAMBEN/2008 dated 31 March 2008 to
conduct mining;
s. Recommendation No.545/443/PU/TAMBEN/2009 dated 11 June 2009 to
conduct mining;
t. Recommendation No.AL.641/1/3/SKTB-2005 dated 1 March 2005 regarding
Port Location for the Company;
4. Assets Documentation
a. Statement No.33/SK/KD.SL/XII/04 dated 15 December 2004 from the Village
Head of Sebamban Lama;
b. Statement No.34/SK/KD.SL/XII/04 dated 15 December 2004 from the Village
Head of Sebamban Lama;
c. Statement No.[*]/SK/KD.M-KA/XII/04 dated 15 December 2004 from the
Village Head of Mangkalapi;
d. Statement No.038/SK/KD.M-KA/04 dated 15 December 2004 from the
Village Head of Mangkalapi.
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5. Agreements
a. Cooperation Agreement of Natural Resources Management on Indonesian
Coal Mining dated 14 December 2007 with PT AE (represented by PT Jaya
Sakti Indotama);
b. Amendment of Cooperation Agreement of Natural Resources Management
on Indonesian Coal Mining dated 8 June 2009 with PT AE;
c. Cooperation Agreement of Coal Mining Activities dated 14 July 2003 with
the local people in Hati’if Village and Mangkalapi Village, Sub-District of
Kusan Hulu.
6. Other Documents
a. Environmental Management Efforts Report (UKL) – Environmental
Monitoring Efforts Report (UPL) No.12 dated December 2003;
b. Statement dated 2 April 2009 from Rasfienora Ronadinihari, Notary in
Batulicin – Tanah Bumbu;
c. Collective Share Certificates No.00001 to No.00003 dated 2 April 2009;
d. Special Register of Shareholders dated 11 April 2008;
e. Map from the Directorate General of Mineral, Coal and Geothermal of the
Department of Energy and Mineral Resources dated 25 March 2009;
f. Statement No.153/MSTB/XII/97 dated 14 December 2007 (in relation with
the Cooperation Agreement dated 14 December 2007);
g. Power of Attorney dated 11 November 2007 from PT AE to PT JSI authorizing
the BOD of PT JSI to represent PT AE to sign the Management Cooperation
Agreement;
h. Substitution Power of Attorney dated 12 November 2007 from the BOD of
PT JSI to Sankaran Sundaraman, Commissioner of PT JSI, to sign the
Management Cooperation Agreement
i. Power of Attorney dated 18 May 2009 from Tony Adam, Director of PT AE,
to Sunderajen, to sign the Amendment of Cooperation Agreement of Natural
Resources Management on Indonesian Coal Mining dated 8 June 2009;
j. Statement No.019/MSTB/III/2009 dated 16 March 2009, from the President
Director of PT Mitra Setia Tanah Bumbu; and
k. Statement No.020/MSTB/IV/09 dated 30 March 2009, from the President
Director of PT Mitra Setia Tanah Bumbu.
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