Assalamu’alaikum Wr. Wb

We are very grateful for the blessings from Allah SWT, which had led the Company succeed to ride out the year of 2010. Herewith, please allow us to present the 2010 Annual Report of PT PNM (Persero).

Performance in 2010

PT PNM (Persero) had showed significant operational results in 2010. PNM also could optimally benefit from the existing opportunities and then turn them to a solid business growth with regard to the development of Micro, Small and Medium Enterprises (MSME) and the growing Indonesian economy, which dealt with both external and internal challenges.

In fact, the performance in 2010 was far above the targets, stated in the Work Plan and Budget of the Company and went beyond the performance of 2009. in term of revenue, PNM almost doubled the number to Rp487.205 billion. The revenue performance was supported by the realization in financing which exceeded the targets on average while we also recorded positive operating revenue contributions from our subsidiaries.

PNM was very active in financing during 2010, where the Company channelled Rp1.8 trillion derived from bank’s facility, reflecting the higher trust from to PNM in developing MSME. These activities were supported by the opening of 91 ULaMM units, bringing the total to 276 units in 2010, to extend our services to greater market.

The outstanding operation opened new opportunities for us to book higher asset growth by 21% to Rp3.346 trillion from that of 2009. This was resulted from increased productive assets by 25% to Rp2.417 trillion. 

Strategies and Policies
Our success in financial performance indeed reflected the management’s ability in management and

development of the Company’s business as targeted and the realization of the vision, mission and objectives of the Company, that is, to share responsibility for building a better Indonesian economy through financing activity to MSME segment.

The management, therefore, ran focused and directed strategies on three approaches, namely capital approach through financing service, social capital approach and intellectual approach through management service. These strategies went in line with business dynamic as a way to anticipate the end of credit program from Bank Indonesia. PNM is also committed to target achievement in management service/integrated counselling for the cluster-based MSMEs in the next

five years to develop regional products as part of efforts to succeed the implementation of One Village One Product (OVOP).

Other strategy relating to investment management was to tap opportunities in new segments, more than the bank does.

Adding to the strategy, the Company continues improving the established SOP to enhance risk mitigation effort in such way to anticipate the risk potentials that can slow down the Company’s growth.

We did identify several risk factors in 2010, among which was the capital inadequacy as the Company highly depends on the external sources of funds, either from banks or capital market, thus making the Company uneasy to charge for lower interest rates. Other risks included transformation of organizational capacity in order to enhance internal capacity of business management, operational and other elements, competition in micro financing, acceleration of returning of KLBI’s fund and competition in HR recruitment.

The business risk management we put in together with other internal improvements, such as advancing

organizational structure as the operational demand and enhancing the implementation of good corporate governance. Directors of the Company also regularly hold meetings with Board of Commissioners as well as the existing Committees in the Company to discuss any issues to align efforts for better performance.

In mitigating the business risks, we also prepare our human resources to lead them to be more independent, capable and competent human resources through a

series of trainings. We put in place tight recruitment process to create competent human resources according to their specification and capable to boost operation of the Company.

So as to build trust in the Company and enhance capacity and quality of micro and small businesses, we also conducted partnership and environmental care program by extending Rp30.45 billion in the last nine years until December 2010. Through the program, the Company expects to create resilient and independent business partner in managing their businesses.

Business Prospect

Directors believe the business prospect in the years to come, with hope that Indonesian economy is in sustainable growth and just one step away from securing investment grade rating, thus positively impacting the  development of micro, small and medium businesses. MSME players are more than 40 million in total, opening new opportunities for micro financing companies including PNM. The Company builds closer ties to the SMEs by opening more outlets as planned.

We, therefore, expect to continue this cooperation with many parties and partners to be able to grow the business at sustainable basis. To Board of Commissioners, employees, Government as shareholder, business partners and other stakeholders, the Directors would like to extend its gratitude for any inputs, support, hard work and trust upon us to execute the given mandate. The harmonious relation will form a basis to the Company to achieve higher performance in years to come.

Billahit Taufiq wal-hidayah,
Wassalamu’alaikum Wr. Wb.


Parman Nataatmadja
President Director