Public Offering of the Company’s Shares

PT SINAR MAS MULTIARTHA Tbk AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2011 and 2010 and For the Years then Ended - 17 - PT Sinar Mas Insurance SMI In April 2011, the Company, ASM and SU established SMI, domiciled in the Democratic Republic of Timor Leste, by investing Rp 447.5 million, Rp 3,580 million and Rp 447.5 million, or representing 10, 80 and 10 percentage of ownership in SMI, respectively. PT Sinarmas Asset Management SAM In April 2011, SMS and SMF established SAM, by investing Rp 49,999 million and Rp 1 million, respectively. PT Sinar Mas Multifinance SMF SMF obtained an approval from the Minister of Finance of the Republic of Indonesia to engage in finance leasing, factoring and consumer financing in his Decision Letter No. 441KMK.0171996 dated June 21, 1996. In October 2010, the Company increased its investment in SMF amounting to Rp 37,000 million. The increase in investment did not change its direct ownership interest in SMF. In June 2011 and December 2011, the Company increased its investment in SMF amounting to Rp 100,000 million and Rp 120,000 million, respectively. The increase in investment did not change its direct ownership interest in SMF. PT Jakarta Teknologi Utama Motor JTUM In September 2010, the Company increased its investment in JTUM amounting to Rp 15,000 million, thus, increased its direct ownership interest in JTUM from 99.86 to 99.90. In June 2011, the Company increased its investment in JTUM amounting to Rp 25,000 million, thus, increased its direct ownership interest in JTUM from 99.90 to 99.93. PT Golden Tropical GT In January 2011, SU and third parties established GT, by investing Rp 1,500 million each. PT Shinta Utama SU In October 2010 and December 2010, the Company increased its investment in SU amounting to Rp 3,000 million and Rp 15,500 million, respectively, thus, increased its direct ownership interest in SU from 99.0 to 99.3. In October 2011, The Company paid advances for investment in shares of SU amounting to Rp 81,500 million. PT Arthamas Solusindo AMS In September 2010, the Company increased its investment in AMS amounting to Rp 500 million, thus, increased its direct ownership interest in AMS from 99.60 to 99.99. PT SINAR MAS MULTIARTHA Tbk AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2011 and 2010 and For the Years then Ended - 18 - PT Sinarmas Futures SF SF obtained an approval from Commodity Measurement Trading Supervisory Agency to engage in business activity as measurement broker in its Decision Letter No. 889BAPPEBTISI32006 dated March 27, 2006. In October 2004, SMS and SMF established SF which engages in commodity trading. In June 2009, SMS increased its investment in SF, thus, increased its direct ownership interest in SF. SMS’s ownership interest in SF as of December 2011 and 2010 is 99.75. In December 2011, SMF has sold all of its investment in shares of SF to SU amounted to Rp 12,500 million. PT Asuransi Sinar Mas ASM ASM obtained an approval from the Minister of Finance of the Republic of Indonesia through the Directorate General of Domestic Monetary Affairs to engage in loss insurance under Decree No KEP-2562MD1986 dated April 21, 1986. ASM obtained an approval from the Minister of Finance of the Republic of Indonesia to open a branch which was based on Sharia principles in his Decision Letter No. 253KM.62004 dated June 25, 2004. PT Sinarmas Sekuritas SMS SMS obtained an approval from the Capital Market Supervisory Agency or Bapepam-LK to engage in stock brokerage, stock underwriting and as an investment manager in its Decision Letters No. Kep-82PM1992 dated February 29, 1992, No. Kep 83PM1992 dated February 29, 1992 and No. Kep-02PMMI2000 dated May 15, 2000, respectively. PT AB Sinar Mas Multifinance ABSM ABSM obtained an approval from the Minister of Finance of the Republic of Indonesia to engage in finance leasing, factoring and consumer financing in his Decision Letter No. 525KMK.0171995 dated November 17, 1995. PT Sinartama Gunita STG STG obtained an approval from Capital Market Supervisory Agency or Bapepam-LK to engage in business activities as shares registrar in its Decision Letter No. Kep-82PM1991 dated September 30, 1991.

d. Employees, Directors and Commissioners

The Company’s management at December 31, 2011 and 2010 based on Notarial Deed No. 7 dated June 4, 2010 of Wahyu Nurani, S.H., public notary in Jakarta, consists of the following : President Commissioner : Indra Widjaja Commissioner : Howen Widjaja Independent Commissioners : Sunarto Agustinus Antonius President Director : Doddy Susanto Director : Kurniawan Udjaja PT SINAR MAS MULTIARTHA Tbk AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2011 and 2010 and For the Years then Ended - 19 - As of December 31, 2011 and 2010, the Company’s Audit Committee based on Notarial Deed No. 141 dated June 17, 2008 of Sutjipto, S.H., public notary in Jakarta, consists of the following: Chairman : Sunarto Members : Rusli Prakarsa Pande Putu Raka The form of the Company’s Audit Committee complies with Regulation No. IX.I.5 concerning the “Form and Orientation of the Audit Committee Working Implementation”. As of December 31, 2011 and 2010, the Company’s internal audit committee, consists of the following: Chairman : Edy Tjandra Members : Linda Widjaya The form of the Company’s internal audit committee complies with Regulation No. KEP-496BL2008 dated November 28, 2008. As of December 31, 2011 and 2010, the Company has a total number of employees unaudited of 10 and 8, respectively. As of December 31, 2011 and 2010, the Group have a total number of employees unaudited of 12,841 and 7,853, respectively. The aggregate salaries and benefits paid by the Group to all commissioners and directors for the years ended December 31, 2011 and 2010 amounted to Rp 37,707 million and Rp 33,605 million, respectively. The consolidated financial statements of PT Sinar Mas Multiartha Tbk and its subsidiaries for the year ended December 31, 2011 were completed and authorized for issue by the Company’s Directors on March 30, 2012 and are responsible for the consolidated financial statements.

2. Summary of Significant Accounting and Financial Reporting Policies

a. Basis of Consolidated Financial Statements Preparation and Measurement

The consolidated financial statements have been prepared in accordance with Indonesian Financial Accounting Standards “SAK”, which comprise the statements and interpretations issued by the Board of Financial Accounting Standards of the Indonesian Institute of Accountants and Regulation No. VIII.G.7. regarding “Financial Statements Presentation Guidelines” included in the Appendix of the Decree of the Chairman of the Capital Market and Financial Institution Supervisory Agency Bapepam – LK No. KEP-06PM2000 dated March 13, 2000 and Circular Letter No. SE-02PM2002 regarding “Guideliness on Preparation and Presentation of Financial Statements of Issuers or Public Listed Companies in Investment Industry”, as reaffirmed with Circular Letter No. SE-03BL2011 regarding “Guideliness on Preparation and Presentation of Financial Statements of Issuers or Publicly Listed Companies”. As disclosed further in relevant suceeding notes, several amended and published accounting standards were adopted effective January 1, 2011. The consolidated financial statements for the year ended December 31, 2011 are in accordance with the Statements of Financial Accounting Standard “PSAK” No. 1 Revised 2009, “Presentation of Financial Statements” adopted on January 1, 2011. The said adoption of PSAK No. 1 Revised 2009 has significant impact on the related presentation and disclosures in the consolidated financial statements.