BOARD OF COMMISSIONERS REPORT

Throughout 2007 the Company had to tackle similar challenges as those of 2006: the volatile raw materials price, inflation rate, weak domestic purchasing power, and fluctuating crude oil price that jumped from the range of USD 59 to USD 74 per barrel in 2006 to touching a high of USD 94 per barrel in 2007. An inflation rate that stood at 7% and the Central Bank's monetary policy to lower SBI rate from 9.75% per annum to 8% per annum did not seem to induce more consumption.

In spite of the challenges, the Management performed well in 2007, optimizing the utilization of Alkylation unit capacity and improving operational efficiency as a whole. Also, the Management managed to save energy cost significantly by switching to natural gas for fuel.

As a result, the Company recorded 2007 consolidated net profit and EBITDA of USD 3.53 million and USD 26.13 million, respectively. These results are satisfactorily better compared to those of 2006, for which all of us at the Board of Commissioners would like to compliment the Board of Directors for their hard work and achievement.

In carrying out its duties, the Board of Commissioners had reviewed the Management's business policies, which include the plan to refinance UIC-I bonds, Board of Directors' work plan, as well as the analysis of business prospects for the years ahead.

In the implementation of Good Corporate Governance, the Board of Commissioners is assisted by the Audit Committee in reviewing the Company's financial reports, the independency of Public Accountant, the sufficiency of Internal Control, also in evaluating the total remuneration packages for both Board of Directors and Board of Commissioners. The Audit Committee also assists the Board of Commissioners to see that the Company complies with all prevailing rules and regulations.

We herewith report that in the General Shareholders Meeting of May 23, 2007 the shareholders had agreed to the appointment of Mr. Zairyanto Poedjiaty as President Commissioner to replace Mr. Hartono Gunawan, who tendered his resignation on December 19, 2006.

In conclusion, we would like to extend our gratitude to the Shareholders for their trust on the Board of Commissioners to perform these supervisory functions. We sincerely believe that with the Shareholders' support the Company will deliver added value to its shareholders as well as all its stakeholders.