ANNUAL REPORT	2010
[This year microfinance business will be more vigorous as competition gets stiffer. We view this development as a positive sign which demonstrates that our option in the business in the last decade is accurate and promising]

Company Profile

Name	:	PT Permodalan BMT Ventura
Deed of Establishment Pendirian	:	Notary Deed No. 6 drawn up Notary Edi Priyono, SH., dated December 19, 2006; Deed No. 67 drawn up by Notary Edi Priyono, SH., dated May 29, 2008.
Ratification	:	Minister of Law and Human Rights of the Republic of Indonesia No. W7-0256 HT. 01.01.TH 2007, dated March 14, 2007; No. AHU-55964.AH.01.02.TH.2008, dated August 27, 2008.
Official Gazette	:	Supplement to Official Gazatte of the Republic of Indonesia No. 10, dated February 01, 2008, No. 89, dated November 04, 2008.
Trade Business License	:	Minister of Finance of the Republic of Indonesia No. Kep-185/ KM.10/ 2007, dated September 25, 2007.
Taxpayer Registration Number	:	02.623.379.1-061.000
TDP	:	Head of Industry and Trade Office of South Jakarta Municiplaity, No. 09.03.1.65.54431, dated December 18, 2007.
Domicile	:	Company Domicile Certificate No. 1432/1.824.5/2010, Senayan Sub-District, Kebayoran Baru District, South Jakarta 12190.
Address	:	Equity Tower Fl. 27, Suite F, SCBD, Lot. 9 Jl. Jend. Sudirman Kav. 52 – 53, Senayan Sub-District, Kebayoran Baru District, South Jakarta 12950.
Tel.	:	+6221 2903 5428, +6221 2903 5429
Fax.	:	+6221 2903 5430
Profesional Association	:	Indonesian Venture Capital Association (AMVI)
Web.	:	www.permodalanbmt.com
		www.pbmt-ventura.co.id
e-mail	:	cs@permodalanbmt.com

FINANCIAL HIGHLIGHTS

Based on Independent Auditor Report

Financial Performance	2010		2009	2008		2007
In Rupiah (Million)
Total Assets	59,103.7		31,772.3	21,382.9		8,190.8
Outstanding Funds	47,344.1		27,924.8	17,899.1		3,567.7
Profit before Tax & Zakat (tithe)	619.6		361.4	305.6		28.2
In Percentage ( % )
NPF	0.60		1.06	0.00		0.00
BOPO	88		89	82		119
ROA	1.05		1.14	1.42		0.34
ROE	5.85		3.54	3.28		0.35
DER	5 times		2 times	1 time		0
Source of Funds	2010		2009	2008		2007
In Rupiah (Million)
Capital	10,579.7		10,193.6	9,298.8		8,040.2
Bank	33,722.9		11,555.5	7,222.2		–
Investor	14,258.5		9,844.5	4,635.0		–
Program	–		–	–		–
Non-Financial Performance	2010		2009	2008		2007
Total Finance BMT (Unit)	87		60	55		32
Total Funded Micro Business (People)	14,316		8,462	5,424		1,084

BALANCE SHEET

For the periods of 2007, 2008, 2009 & 2010

In Rupiah (Million)

ASSETS			2010	2009	2008	2007
CURRENT ASSETS
	Cash and Cash equivalent		4,593.4	2,568.7	1,015.2	3,798.8
	Funds – after deducted by reserve of receivable loss (295.9)		47,344.0	27,924.7	17,899.1	3,576.7
	Other receivables to related parties		1,262.9	690.7	1,859.4	413.2
	Advances and Prepaid expenses		452.7	189.8	127.5	103.3
	Total Current Assets		53,653.1	31,374.1	20,901.4	7,892.1
NON CURRENT ASSETS
	Deferred taxes assets		2.7	1.2	0.5	–
	Fixed assets – after deducted by depreciation amounting to (186.2)		5,308.2	179.9	196.4	186.8
	Accrued expenses – after deducted by accumulated amortization amounting to (578,7)		46.4	100.8	201.3	94.7
	Other assets		93.1	116.2	83.2	17.1
	Total Fixed Assets		5,450.4	398.2	481.5	298.6
TOTAL ASSETS			59,103.7	31,772.3	21,382.9	8,190.8
LIABILITIES			2010	2009	2008	2007
LIABILITY
	Wadiah		335.5	36.1	7.9	0
	Payable expenses		15.5	11.0	–	10.0
	Tax payable		144.2	118.5	80.3	5.6
	Other liabilities to Related Parties		17.5	–	135.0	135.0
	Financing liabilities		47,981.4	21,400.0	11,857.2	–
	Non-syariah transaction		21.7	8.4	1.7	–
	Employee benefit liabilities		11.0	4.6	1.7	–
	Total Liabilities		48,526.9	21,578.1	12,084.1	150.5
EQUITY
	Share capital		9,843.2	9,843.2	9,030.7	8,012.0
		Other paid up capital	75.0	–	–	–
	Retained earning		158.1	104.2	28.2	–
	Balance of current retained earnings (losses)		500.3	246.0	268.1	28.2
	Total Equities		10,576.7	10,193.6	9,298.8	8,040.2
TOTAL LIABILITIES			59,103.7	31,772.3	21,382.9	8,190.8

INCOME STATEMENT

For the periods of 2007, 2008, 2009& 2010

In Rupiah (Million)

		2010	2009	2008	2007
OPERATING REVENUE		7,605.1	3,549.9	1,671.8	317.4
OPERATING EXPENSES		(6,987.5)	(3,240.4)	(1,386.5)	(377.3)
OPERATING INCOME (LOSS)		617.5	309.5	285.3	(59.9)
OTHER INCOMES (EXPENSES)
	Revenues from savings and time deposit	22.4	13.4	16.4	89.0
	Bank charges	(21.1)	(8.2)	(8.0)	(6.4)
	Other revenues	0.7	11.9	5.5	46.6
	Other expenses	–	–	–	–
	Total Other Incomes/Expenses – Net	1.9	20.4	88.2	51.8
EARNING BEFORE INCOME TAX AND ZAKAT		619.6	361.4	305.6	28.2
ZAKAT(tithe)		(15.5)	(19.0)	(0.7)	–
EARNING BEFORE INCOME TAX		604.0	342.3	304.9	28.2
TAX EXPENSES (BENEFITS)
	Current taxes	105.3	65.5	–	97.0
	Deferred taxes	(1.5)	(0.4)		(0.7)
	Total Tax expenses (benefits)	103.7	65.1	–	96.3
NET INCOME		500.3	246.0	239.8	28.2

REPORT OF SOURCES AND USE OF ZIS FUND

For the period of 2007-2010

In Rupiah (Million)

				2010	2009	2008	2007
1.	Sources of ZIS Fund in the early of period			11.0	0.7	–	–
2.	Sources of ZIS funds
	a.	Zakat from PT. Permodalan BMT Ventura		15.5	18.3	0.7	–
	b.	Zakat from External Parties		–	–	–	–
	c.	Infaq and Shadaqah		–	–	–	–
	Total income			15.5	18.3	0.7	–
3.	Use of ZIS fund
	3-1	Channeled to other institutions
		a.	Dompet Dhuafa Republika	11.0	8.0	–	–
		b.	Others	–	–	–	–
	Total Uses			11.0	8.0	–	–
4.	Increase ( Decrease ) of Sources to Uses			4.5	10.3	0.7	–
5.	Sources of ZIS funds at the end of period			15.5	11.0	0.7	–

REPORT OF SOURCES AND USES OF QARD FUND

For the Period of 2007-2010

In Rupiah (Million)

				2010	2009	2008	2007
	1	Sources of Qard Fund in the beginning of period		8.3	1.7	–	–
	2	Sources of Qard Fund
		a.	Penalty	20.4	4.9	1.7	–
		b.	Donation / Grant	–	–	–	–
		c.	Non Halal Revenues	4.1	1.7	–	–
		d.	Others	–	–	–	–
			Total Sources of Ward Fund	24.5	6.5	1.7	–
	3.	Utilization of Ward Fund
		a.	Loans	–	–	–	–
		b.	Donation for Merapi Disaster	11.1	–	–	–
		c.	Others	–	–	–	–
		Total Uses of Qard Fund		11.1	–	–	–
	4.	Increase (Decrease) in Sources to Utilization		13.3	6.5	1.7	–
	5.	Sources of Qard Fund at the end of period		21.7	8.3	1.7	–

EXTERNAL AUDITOR’S OPINION

STATEMENT OF THE BOARD OF DIRECTORS

LIST OF CONTENTS

			Page.
Company Profile
Financial Highlight
External Auditor’s opinion
Statement of the Board of Directors
List of Contents		:
Message from the President Commissioner
Message from the President Director
Introduction of New Logo
BAB I	Introduction	:
BAB II	About us	:
	A. Vision, Mission and Purpose	:
	B. Core Believe dan Basic Value	:
	C. Management Structure	:
	D. Products	:
	E. Product Diagram	:
	F. Business Process	:
BAB III	Report and Work Evaluation 2010	:
BAB IV	Economic Macro Prospect 2011	:
	A. Socio-economic Condition	:
	B. Environmental Condition	:
	C. Technology Existence	:
BAB V	Micro Environment Analysis	:
BAB VI	Business Projection and Business Plan 2011	:
	A. Finance	:
	B. Marketing	:
BAB VII	Closing	:
	Attachments

MESSAGE FROM THE PRESIDENT COMMISIONER

Mainstreaming Islamic Microfinance

Assalammu’alaikum wr.wb.

(Peace be unto you)

P

Praise Lord Allah Swt for His mercy and blessing that our Islamic Financial Institution (LKI) continues to show encouraging development from year to year, both at the national, ASEAN, and Global levels. The data released by the Central Bank (Bank Indonesia) indicates that Islamic Banking grows very progressively in the last five years. The Assets has grown by over 33 percent. The same trend also applies on other Islamic Non-Banking Financial Institutions (LKBB) such as Multi finance, Insurance, and Venture Capitals.

The growth of Islamic Microfinance can be viewed from the existence of Syariah Financial Service Cooperatives (KJKS) better known as the Baitul Maal wat Tamwil (BMT) which grows even higher in term of percentage. Based on data obtained from the Indonesian BMT Association, an association for MMTs, the total consolidated assets of the 198 members of the Association reached Rp. 2,6 trillion in 2010.

As one of Islamic Finance stakeholders, we are very grateful for this development, especially the development of Islamic Microfinance. We are very proud for being a part of the micro finance community which has and continues to participate and give its contribution to efforts of improving and encouraging the development of micro businesses.

Several weeks ago, the Central Statistics Bureau (BPS) announced that that Indonesia’s Gross Domestic Product (GDP) per capita surpassed the psychological figure of USD3,000. In other words, this indicates that on average, Indonesians have seen their incomes increase to IDR 27 million per year if calculated with the exchange rate of Rupiah to US Dollar, even though, admittedly, this increased income is mostly due to the increase in the incomes of groups of well-off people.

Apart from the fact that some people do not agree with this calculation model which calculates the well off and unfortunate people by average, in the micro scale, we all have felt the increase of people’s incomes. This can be clearly viewed from the total number of motor vehicles, both motorcycles and cars, that the people have, and the Moslems’ extraordinarily high interest to go on Haj, in which a registrant must wait until year 2016 on average to get the quota for Haj.

The contribution made by micro- and small-scale businesses to the GDP also consistently increases from year to year. This trend occurs even in the middle of an economic situation which some economic experts label as “de-industrialization”. The increased role of micro businesses can be viewed from the total number of new businesses released by BPS. In 2008, 42 million people were involved in micro businesses, and this year the figure has reached 58 million people.

The more real sign of the trend can even be felt in our markets. In the past, a market was always perceived as “traditional”, as they were filled by old and out-of-date women traders, but now we are witnessing changes in the perception. The markets are filled by young people with high spirit, more educated and with high entrepreneurship spirit. It is now no strange to see traders with college degrees.

Ventura PBMTs should read this so-called ‘era sign’ after its continuous struggle for 20 years introducing the Islamic economic system in which BMT is an separable part in this struggle. The role of Islamic Microfinance must be supported with strong institutions and strategic policies. In relation thereto, it is important to have programs which place Islamic Microfinance in the mainstream of micro financial institutions in Indonesia as set forth in the BMT Guidelines 2020 as stipulated in the Second National Consultation Meeting of the Indonesian BMT Association.

Wassalammu’alaikum wr. wb.

(Peace be unto you)

Erie Sudewo

MESSAGE FROM THE PRESIDENT DIRECTOR

Stream Benefit of Investment

Assalammualaikum wr. Wb

(Peace be unto you).

P

raise Lord that this year 2011 PT. Permodalan BMT Ventuta (PBMT Ventura) has entered its fifth year in its operation to provide financial acccess to micro, small and medium-sized enterpreneurs in Indonesia, particularly in the company’s capacity to develop financial services through the BMT (Baitul Maal wat Tamwil) network.

In the BMT Summit 2010, all economic experts attended the meeting had, in general, an optimist outlook in Indonesia’s economy in the next five years. We also share the outlook for year 2011. This year, we are determined to increase the company’s growth by continuing to implement our function and role as an intermediary agency with orientation to micro businesses in Indonesia.

We realize that we may face constraints in our determination. As we all know, early this year the inflation rate is high partly caused by the raising prices of agricultural products and world’s oil price. However, as the regional economy is showing positive sign with the demographic structure filled with people of productive ages as well as strengthening natural resource-based commodity, we are definitely optimistic with the company’s future.

This year, microfinance business will have a more fierce competition, to which we have positive outlook. This indicates that our business option in the past decade has been accurate and promising. It is evident from the fact that more and more financial institutions which have good image in serving large corporations enter the microfinance market. We are also encouraged to improve our service performance to the investors. Our decision to purchase an office space at the Equity Tower, a building located in a strategic and prestigious location, Sudirman Central Business District/ SCBD at the end of year 2011 is more based on our commitment to provide prime services to the Investors.

On the other side, to maintain investors’s confidence related to this fundsand in the context of supporting effectiveness and efficiency, this year we have established three Area Representatives. This institution supports the financing activities we are performing and at the same time conducting monitoring and evaluating, so that we can cooperate with more BMTs and enhance our capacity to increase our financing portfolio at micro and small –scale businesses. These Area Representatives serve as our advantages as compared to other financial institutions.

All the above activities and works are intended to provide better services and more benefits to the community or as termed in our tagline ‘Stream Benefit of Investment’. We hope that all our wishes and efforts produce fruits and blessed by Allah the almighty..

Wasalammu’alaikumsalam wr. wb.

Saat Suharto Amjad

INTRODUCING THE NEW LOGO

PBMT Ventura commenced its operation in the present office at the “The Equity Tower” at the end of 2010. This area is located at Indonesia’s financial and business center; the Sudirman Central Business District. Hereby we are introducing our new logo.

Change in the logo marks the beginning of transformation and change in the I-Stream business paradigm. This paradigm is inspired by water which has the nature of dynamic, full of benefit and life sources. I-Stream is an integrated unit with mutually stregthening elements namely, Integrity, Steady-Flow, Relationship & Teamwork.

With I-Stream, PBMT Ventura intends to position its self as the market leader in the microfinance business, provide intermediation to micro business, and eventually provide optimum benefit to the people at large.

The logo symbol has the following meaning:

· Water as the symbol of benefit that continues to flow, dynamic, fully beneficial and function as sources. This is the company’s expectation to provide optimum services and benefit for micro-businesses, BMTs and all the community.

· Three gushes of spring water, which is the symbol of I-Stream Paradigm: Integrity, Steady-Flow, Relationship & Teamwork. The fountain is the symbol of individuals with high spirit and dynamic.

The meaning and philosophy of logo color:

· Blue symbolizes: peace, inspirational, and associated with coll water stream. This color symbolizes an innovation, and an uninterrupted opportunities in a business world

· Golden yellow symbolizes: the color of sun, the main source of energy on earth, associated with honest, intelligence, belief in your own potential, no doubt and negative impact.

· Green symbolizes nature’s color, associated with the life, smoothening, boosts energy and balanced.

I. INTRODUCTION

P

T. Permodalan BMT Ventura (PBMT Ventura) is an Financing Institution in the form of Venture Capital and has obtained operation license from the Minster of Finance Cq. BAPEPAM-LK, Number: Kep-185/KM.10/2007, dated September 25, 2007. PBMT Ventura is managed under the principle and management of Syariah finance. This company is established to provide financial services to micro, small and medium-scale entrepreneurs (UMKM). In channeling funds, PBMT Ventura cooperate with the BMT (Bait al-Maal wa at-Tamwil) networks as its strategic work partner.

As widely known, initially BMT was a non-governmental organization, which was established and developed by the community. In particular, the company was set up mainly from the community funds or capital and sources. In its development, BMT, which is cooperative in its legal entity, has now grown to become a financing institution which provide services to micro and small-scale entrepreneurs who are feasible but non bankable.

As strategic work partners, BMTs have grown since 1992 but only on June 14, 2005 reached an agreement to have an association under a medium called Indonesian BMT Association or we briefly refer to as the Association. By 2010 the Association had incorporated 182 popular BMTs in Indonesia, with around 550 service offices and with the BMT accumulated asset of more than Rp.2.6 trillion.

The association, in this respect, is committed to cooperating with PBMT Ventura in conducting monitoring and evaluation and continual improvement by drafting regulations based on mutual agreement and is committed to strengthening and developing BMTs. This automatically greatly improves our performance.

Praise the Lord that in its fourth year of operation, the company’s financial performance has shown positive sign as evident from among others its profit since its first year of operation and the non-performing financing (NPF) ratio of zero percent for two successive years. Even though the NPF rate increased by 1.06 percent in 2009, in 2010 several measures taken have been proven to suppress the NPF to 0.60 percent.

Viewed from the side of Asset growth, the increase achieved this year is impressive, namely growing by 86.02 percent from Rp 31.772,3 million to Rp. 59.103,7 million In December 2010. Aside from Assets, several financial performances also experienced a significant improvement, in which the third parties’ funds have increased by 124.1 percent, outstanding funds increase by 69.54 percent, while for companies capital it increases by 3.79 percent and Profit before Taxes and Zakat increase by 71.44 percent.

In year 2010, PBMT Venture has disbursed funds to 87 BMTs reaching Rp. 47,344.10 million or in other words PBMT has successfully served 14,316 micro and small-scale entrepreneurs. Previously financing activities were more focused on BMTs in Central Java and DIY, however, in year 2010 our financing activities were also expanded to include the Jakarta Greater area, Banten and West Java.

In addition, PBMT Venture also had good news in 2010. As from October 2010, the company has occupied a new office by purchasing an office space at the Equity Tower, a building located in the strategic and prestigious location of Sudirman Central Business District (SCBD) to provide more prime services to investors. In line with that, the company has also launched a new logo that represents transformation of I-stream business paradigm: Integrity, Steady-Flow, and Relationship & Teamwork. We are hopeful that this business paradigm can bridge and accommodate the interests of all our stakeholders.

Seeing this very exhilarating performance, we wish that this year the company can enhance its capacity, so as to ensure that the growth in year 2011 continue with a relatively progressive assumption, especially the increasingly strong cooperation platform with several Islamic banks, chance of fund from the capita market and opportunity for cooperation with other third parties.

With the achievement the company has made up to the present, we believe that we are able to become an intermediary on financial services for micro businesses and we can give benefits to the investors and the community.

II. ABOUT US

VISSION, MISSION & OBJECTIVE
VISSION
To become a major player in the business of financial service for micro, small-scale and medium scale businesses through BMT networks.
MISSION
1.	To pertaicate in materializing a productive comunty.
2.	To empower investment to develop micro, small and medium scale entrepreneurs so that it can be more productive.
3.	To participate in establishing and developing the Shariah economic system.
4.	To encourage the creation of prominent performance for BMTs.
5.	To establish a productive, efficient and innovative work system.
OBJECTVES
1.	To educate the community members to manage thie funds better abd productively.
2.	To establish an investment cooperation with investors and micro, small and medium scale entrepreneurs in a safe, professional and mutually profitable manner.
3.	To educate the stakeholders to comprehend and comply with the shaiah principles.
4.	To develop micro and small scale businesses by providing financial services.
5.	To provide financial services, and develop a prime performance for BMTs.
6.	To give benefits to all the company’s stakeholders.
CORE BELIEF AND CORPORATE CULTURE
CORE BELIEF is the shared beleife of individuals in the company which become the ideology that inpeires all the company’s operation and culure. The said belief include::
FALAH		:	We believe that the company business has the purpose of realizing true happiness, i.e: worldly and non-worldly happiness for all the company’s stakeholders.
CORPORATE CULTURE is the values adhered by the company that the company are proud of and always maintain and practice as the culture to base every decision that has, is and will be made. The said corporate culture is formulated as I-Stream, a dynamic culture which consists of:
Integrity		:	We are committed to serve by prioritizing preservation, honesty, responsibility and love toward the profession.
Steady-Flow		:	We are committed to act professionally by priorizing seruces, open mindedm, dynamic and adaptive.
Relationship & Teamwork		:	We are committed to maintain the communication, establish synergy, increase cooperation and confidence.

MANAGAMENT STRUCTURE

PRODUCTS

I. FINANCIAL SERVICES
A	INVESTMENT:
	The investment products that we have released include: Temporary Placement, equity base Placement and Share. These products enable investors to choose investment option in accordance with their preferences with competitive production sharing opportunities.
B	FINANCING:
	Financing product is the granting of fincing facilities to micro, small- and medium scale businesses though the BMT network. This financing may be in the form of liquidity and or equity strengthening.
C	LINKAGE PROGRAM:
	This product is the financing product from Third Parties (such as: banks) to be distributed by us. There are two models of this product that we have performed, namely; 1) Executing: a third party provide us with funds to be re-distributed in the form of financing to micro, small, medium scale entrepreneurs through BMT, 2) Channeling: A third party perform financvaing to BMT, and our position is as the partner of the third party in carrying out supporting, monitoring/ evaluation, and under certain situation as guarantor.
II. TECHNICAL ASSISTANCE
A	CAPACITY BUILDING:
	This product is to improve the capacity of BMT or micro and small scale entrepreneurs from the aspect of capacity and quality. Example; presentation of financial report, institution and use of information technology.
B	MONITORING AGENCY:
	This product is used as an early warning concerning the existence of a BMT. In addition, this product is greatly needed by the parties who decide to have cooperation especially related to the product of linkage program.
III. RESEARCH AND INNOVATION:
	We endeavor to continue to develop new innovations related to information technology and new micro finance products which are useful for the development of the micro and small-scale sector.
IV. NETWORKING
	We establish networks with BMTs throughout Indoernaisia under which we guide and develop them. This product is to facilitate coperations, both in programs, financing and investment; among BMTs, a BMT with another Party, or connect businesses among BMT members, or to engage a BMT member with other parties.

PRODUCT DIAGRAM

To be included…

BUSINES PROCESS

To be included…

III. FINANCIAL AND NON-FINANCIAL PERFORMANCE REPORT 2010

During year 2010, the business that we were engaged in managed to produce satisfying results. We can report some of the achievement;

Development Funding sources

During year 2010, the total financial sources that we managed reached Rp. 58,561.10 million or an increase by 85,34 percent as compared to the previous year. Graph 1 indicates the total funding sources of 18 percent or amounting to Rp.10,579.7 which comes from. 24 percent or amounting to Rp.14,258.5 million are from (individual and institutions) investors. The remaining percentage namely 56 percent or Rp. 33.722,9 million were from banking funds.

The increase in funding sources from investors or banks which respectively reached 45 percent and 192 percent in 2009 can be also translated as an increase in the people’s trust in this institution.

Development of Profit sharing rate

The investment we manage comply with the Syariah management procedure, so as to have fluctuating profit sharing depending on the revenue earned from the micro scale entrepreneurs we are financing. However, throughout year 2010, we consistently proved that we gave a competitive production share as compared to the interest rate of Bank Indonesia which was on average 11.27 percent (see Graph 2).

Development of Beneficiaries

We channeled all of funds entrusted to us to the sector of micro and small scale business through BMT. In 2010, we channeld the funds through 87 BMTs with the total outstanding funds of Rp. 47,344.1 million. The amount was an increase by 69.5 percent as compared to the previous year which was Rp. 27.924,80.

The areas of BMT distribution can be viewed in the foloring table:

Region	Outstanding	Petcentage
Yogyakarta	Rp. 4,6 billion	9,75
Jawa Tengah	Rp. 31,5 billion	66,52
Jawa Timur	Rp. 1 billion	2,1
Banten – West Java	Rp. 10,2 billion	21,6

With the averaged portfolio per financing of Rp.3,329,318 for micro and small-scale entrepreneurs, the total number of beneficries (micro and small-scale entrepreneur) of funds we channled to BMTs is 14,316 entrepreneurs.

The spread of types of business sectors receiving funds from us through BMT did not have much significant change as compared to the previous years. The Trade sector still topped the list of beneficiaries namely 62 percent. The trade referred to herein is the traders in traditional markets, and the products they trade are usually products directly related to production process or home industries.

The second place on the list is the service sector such as barbers, motor cab drivers, and types of other micro services. Their n umber reached 21 percent from the total beneficiaries of funds. The other sectors on the list are res[ectiovely the consumption sector, 7 pecen, and industrial sector and agricultural sector, 5 percent (see Graph 3).

Financial Performance

For the financial performance throughout year 2010, in addition to success in the collection of Fund sources as explained above, the total Assets in 2010 also grow by 86 percent. This was also experienced by our Outstanding Financing to micro and small-scale enterpreneurs which increased by 69.5 percent. This indicates that we maintained the productivity of investor funds and other third parties funds in optimal level.

Such rapid development of assets caused the ratio of Company profit to the Asset drop, but this has been compensated with the increase in the DER (Debt Equity Ratio) of 5 times. If viewed from its future potential value, the result is still positive.

From the productivity side, year 2010 shows quite sigfnficant increase even though as explained the figure of ROA indicator was corrected by 7.9 percent as it was compensated by the increase in the company’s DER. Meanwhile, the ROE figure experiences a growth of 65.3 percent namely from 3.54 percent in 2009 to 5.85 percent (see Graph 6).

Hence, based on the existing result, we can project that the productivity in the following year is higher. Considering that the significant increase the company’s assets mostly occurred in the period of August-September, the productivity can only show the result in the period of less than half a year to come.

The other indicators of efficiency that experienced significant increase can be viewed from the percentage of operational income divided by the operational cost (BOPO) which experienced a decrease to 88 percent from 89 percent.

Such efficiency produce fruitful result in the form of an increase in profit before tax and zakat for successive four years. Graph 7 shows the profit position which experience increase trend. In 2010 the profit increase by 71.5 percent to Rp.619.6 million from the opreious figure of Rp. 361, 4 Million Based on the efficiency we had, we are optimistic that in the years to come we are able to produce higher profits for the company.

We have also special note on the Non Performing Finance (NPF). After we experienced the NPF level of increase by 1.06 in the previous year, we had taken several measures which were effective to reduce bad funds in 2010. Graph 8 shows that we successfully suppressed the figure of bad funds by 0.6 percent in year 2010.

IV. MACRO ECONOMIC PROSPECT IN YEAR 2011

Many parties predict that the Indonesia’s economic condition in 2011 will be better than in the previous years. Optimistic economic outlook was issued by the Government, Bank Indonesia and economists. This optimism dervies from the achievement of macroeconomic indicator in 2010 which slightly surpassed the hope, and the prediction of the world’s better economic condition, after a blow by the financial crisis in several developed countries two years earlier.

The Government’s outlook is mainly documented legally in the draft Financial NOe and the State Revenues Budget and Expenditures (APBN) which means that it has been deliberated and approved by the People’s Legislative Assembly. The prediction summary is indicated by the macroeconomic basic assumption which in the 2011 State Budget was stated as follow: economic growth 6.4%, inflation rate:5.3%; with the averaged exchange rate of Rp9.250/USD; Indonesia’s Blaace of Payment: surplus, increased foreign exchange reserve; average SBI 3 months interest rate of 6.5%; and the average of Indonesia crude oil (ICP) price of USD 80 per barrel with the lifting of 970 thousand barrels per day.

The Government even, believes that the condition will be better in the subsequent years. There will be stability in the rupiah exchange rate, controlled inflation, stable oil price, and increasing oil production. The range of economic growth in years 2010 – 2015 is as follow: 6.4-6.9%, 6.7-7.4%, and 7.0-7.7%.

Other economic authority, namely Bank Indonesia as the monetary and banking authority is also optimistic. Bank Indonesia usually made a more conservative prediction and explains various downside risks in predicting Indonesia’s economy. Bank Indonesia estimates the economic growth in 2011 accelerated and stay at te range of 6.0 – 6.5%, fused mainly by export and investment activities and demands. Meanwhile, the balance of payment is estimated to record relatively high surplus causing the rupiah exchange rate to be stable.

The economists are also optimistic. DR. Purbaya Yudhi Sudira from Danareksa Institute in his Outlook estimated that Indonesian’ economy will grow by 6.38% in 2011 with increasingly balanced growth machine namely consumption, investment and export. According to him, at present Indonesia’s economy is in the phase of expansion, which may continue for another seven years.

It is noteworthy that the most dominant variable in most analysis and prediction is related to the external condition of Indonesia’s economy. This includes the dynamic of world trade, the price of certain commodities in the international market, the economic condition of the developed countries and the countries having important economic relations with Indonesia, as well as the capital and money cflows in the global market. Some even provided additional external analyses on political risks at home or opportunities related to high stability rate. Meanwhile, the political dynamics in the Middle East region is also estimated to have impact to the world oil price and the prediction of recovery of Japan.

One of the risks that receive insufficient attention or is believed to be able to handle is the issue of inflation pressure. Increased domestic demands and international commodity prices are expected to have impact on the raise in goods and service prices in general, even though relatively limited. Disruption in the production and distribution foods due to weather as the case in 2010 may likely continue in 2011. Development of infrastructure by the Government which among others is intended to support the national food resilience and improve interrelations between regions runs slower than expected.

Other inflation pressure derives from the Government’s difficulties to be consistent with its plan not raise the prices of strategic goods and services such as Electricity Basic Tariff, LPG Gas, subsidized Fuel Oil and transportation tariffs. This is considering the dynamic of world oil price which may likely be very unstable and usually followed by the prices of other international commodities.

It is noteworthy that in line with increasingly high economic growth, the demand for credits will also increase. The stability of financial system is also expected to remain maintained as the Banks’ intermediary function improves. For year 2011, Bank Indonesia estimates the credit growth will reach 20%-23%.

Nevertheless, the main economic challenge faced by Indonesia in 2011 is till the inflow of offshore funds following the disparity in the policy stance between the developed countries and the developing countries. Even though it is still required as one of the economic financing sources, the inflow of dominant short-term capital will potentially create pressure on the macro stability and complexity in the monetary policy. Too strong inflow of foreign capital may cause the exchange rate to appreciate sharply and is potentially stronger that the supporting force of the fundamental factor. Under such condition, in addition to vulnerable to the risk of correction, too sharp appreciation of the rupiah of exchange rate will also lower the export competitiveness.

The other main challenge is large liquidity excess in the banking sector. Whereas, under such condition, high influx of foreign capital may also increase the existing liquidity excess. Such liquidity excess may potentially encourage increase of monetary amount (credits and circulating money) which may subsequently increase inflation pressure when the excess rupiah liquidity is channeled to consumption credit, particularly if the demand side has constraint in balancing the consumption increase financed by the relevant credit.

It is reasonable that in the recent time, Bank Indonesia encouraged banks that the prominent challenge is how to channel this liquidity excess to finance the productive business sector and economic development. Bank Indonesia warns that compared to other countries in the region, the banks’ role financing economic activities is still relatively limited. The relatively-low of Bank’s role in financing the economy is caused by, other than due to relatively high interest rate of loans especially for Micro, small scale and medium scale businesses (SMEs), people’s limited access, particularly low-income people to the service of banking sector.

It seems that banks give positive response to the Bank Indonesia’s encouragement, in addition to the fact that more comprehension that credits for SME promises large market and adequate profit. Banks seem to have asked for relaxation or relief from Bank Indonesia related to SME credit, in addition to endeavoring to make use the Government’s commitment o the matter such as the scheme of Credit for People (KUR).

On the other side, commercial banks still face constraint in channeling credits to SMEs, among others the following:

· Not all commercial banks have networks reaching all areas in the country.

· Knowledge on the character, condition, and capital of small and micro businesses owned by commercial banks as compared to BPR, BMT/Shariah Financial Institution.

· Commercial banks have the problem of controlling SMEs as they have limited number of controllers or collectors and the expenses.

· The problems faced by SMEs are not only capital but also management and marketing.

Considering their technical limitation in channeling credits for SMEs, especially micro businesses, banks require assistance from or cooperation with other financial institutions. This is in accordance with the results of meetings, conferences, and studies on microfinance in various countries. In conclusion, the economic authority must strengthen the microfinance institution networks as an effective method to cope with poverty. If we wish to optimize the banking sector, we need to have string synergizing patterns.

Social Condition

The business special environment in the future will be marked with several issues. We view that INdoernesian large population serves as an extraordinary market assets and as the factor that significantly boost the economic growth that ensure the company to immediately reach the economic scale which is required for the company growth.

The total number of population whose incomes are affected by agricultural activities will reduce and the population whose incomes are earned from the municipal sector will increase, which according to BPS the proportion is 25 : 75 in year 2025. Viewed from this trend and considering that not all the people can be absorbed in formal employment, but most will enter the informal sector such as becoming micro scale entrepreneurs both in the service sector and up to small scale home industries, the need for providing financial services to micro entrepreneurs is certainty.

However, socio-environmentally around the company malls, shopping centers and national-wide retail shops are growing which undermine the market’s role as the place to fulfill the community need. This trend continues at an increasingly high speed from year to year.

This shift requires the Government to project SMEs and re-manage the business and avoid centralization of distribution channels and similarly important management of market so as to realize the role of market as the medium for the meeting of consumers and producers and fulfillment of the needs of the community living around the market which can even be increased, in addition its active participation in improving the capacity of SMEs by organizing trainings and facilitating financial access from the government or business community.

Environmental condition

Even though global warming may affect agriculture in Indonesia, the Ministry of Agriculture bruises aside this issue of world food crisis stating that the performance of rice and corns in year 2011 has surpassed the national need. The land capacity can still be increased if it is better managed, and the product can still be increased up to 20% from the present figure, and let alone with the development of new plantation areas.

Based on the above consideration, the issue of environment will not have important impact to the business and the company can even benefit from the issue of green microfinance which is echoed in the global scale in which environment damage can be reduced by providing funds to poor people so that they can utilized natural resources better and more managed, and it is possible that the owned network can be allocated to improve financing accessibility to the agriculture/ animal farming sector..

Technology existence

Business is estimated to have greatly affected by technology, which come from two sides namely demand and supply. From demand side, the customers who are the company’s clients namely micro-scale entrepreneurs and BMTs will be greatly affected by IT. Micro-scale entrepreneurs are experiencing extraordinary change in the life style, commencing from the community with low mobility to becoming a part of global community, in which they can communicate with their family members who are migrant workers and conduct remittance transaction which educate them to engage in electronic transactions. Thus e –payment which was initially a discourse will in several years to come become a need.

From the BMT side, there has been a development in which previously people did not need transaction among BMTs and in the future it will force BMTs to integrate their system so that they can conduct transfer, remittance and cooperation on product among BMTs.

V. MICRO ENVIRONMENT ANALYSIS

A. STRENGTH ANALYSIS:

We provide funds to micro-scale entrepreneurs through BMTs that have been recommended and guided by the Indonesian BMT association so that it guarantees the security of the investors and other third parties’ funds. As an association, the Indonesian BMT association has successfully incorporated BMTs with long track records, some of which have been in operation for more than one decade.

The following is the table of spread of members of the Indonesian BMT association based on region:

Province	Total
Central Java	122
Yogyakarta	12
West Java	39
Banten	3
Jakarta	2
Jambi	2
Lampung	1
Southeast Sulawesi	1
Grand Total	182

In addition, were are the pioneer of financing institution in the form of Venture Capital which provide working capital to micro and small scale businesses based on the management principle pursuant to the Shariah Islamic Microfinance provisions We have also obtained operation license from the Minister of Finance Cq. BAPEPAM-LK under number: Kep-185/ KM.10/ 2007, dated September 25, 2007.

The existing organizational design enables us to be very efficient and effective in performing works. One of the designs that can be relied upon is the existence of Representative Area which have the duties and authorities of Supporting and Monitoring Agencies at our expense. The existence of this area is attached to the Regional Coordinator and Collection regional Coordinator.

As a result, during our four years in operation, our financial performance is relatively satisfactory. We manage to increase profit which tends to increase from year to year. While from the view of investor’s profit, we also manage to provide a more competitive investment return.

We have also purchased and occupied a new office space at a very prestigious area in Jakarta, namely: on the 27^th floor of the Equity Tower building in the Sudirman Central Business District (SCBD), Jalan Jend. Sudirman Lot 52-53 Jakarta 12190. having office at such prestigious location, the PBMT Ventura is expected to have an improved performance and have supporting organizational culture which makes us as a high-standard shariah financial institution, so that the people’s confidence, as well as investors and partner institutions; confidence will be better maintained and improved.

B. WEAKNESS ANALYSIS

We discussed earlier that the fund sources that we receive are mostly funds from the Banking sector. Even though the funds are “expensive funds’, we are still competitive in providing services because since the beginning the company’s organizational design is effective and efficient so as to reduce the operational costs. We still hope that there will be a financing synergy with banks and even with still considers Islamic banks as the reliable party to immediately increase our business portfolio.

To reduce the burden of banks’ “expensive funds” against the financial performance we deemed it necessary to expand out investor network which is now less adequate.

Increased number of Networking, the hallo effect of our existence that has been widely accepted by the people at large and supported with better performance are expected to become a capital that boost our confidence in attracting individual investors or as we refer the angel investors.

C. OPPORTUNITIES ANALYSIS

Business opportunities in the micro financial sector uis laike a wide open blue ocean. The financing figre of about Rp.20 million is still deemed litte, while the need for business capital or investment is still high.

As a pioneer, we view this mater as an opportunity, at the time when almost all funds in the banking-based micro sector is still having difulcty in penetrating the market, and if any, they still have difficulty in performing the magment and maintenance.

This wide open opportunities in the micro finance sector must be certainly responded with vigilance and caustion, because extensive entry of banks in this sector has caused consequences as reported by several communication media as potentially increasing bad credits in the micro finance sector.

D. COMPETITOR ANALYSIS

Year 2010 has become a phenomenal year for the micro finance industry, as marked by Bank’s more extensive expansion, both national and foreign banks to enter this sector and aim the market share the same as ours.

Our position in placing the financial institutions especially Islamic banks is as our cooperative competitor (Co-Competitor), in which under certain phases, there is actually a competition in providing services to BMTs, but there are also other things to which we can have cooperation.

Even for us it is an opportunity because is a bank is to open a micro market, the expenses that they have to pay will be high. This is especially true when we have to change the mindset of human resources in order to be able to have close relationship and have communication with micro and small –scale entrepreneurs properly or microfriendly, therefore, we have a key word which is to establish a synegy.

Even though, we can say that competition in the m icrofiancing sector is very riough, we still have an open market space. This is because ewe has competive advantages, among others:

a. Social capital that we have long built;

b. Financing system which has been professionally developed through membership in the Association and mutually-beneficial cooperation;

c. WE are supported by professional human resources wh have been long involved in the Syariah micro finance;

d. The financing services to be developed is integral in nature, not only neing provided with funds but also asstance ad or management services.

e. The approach pattern which use the bottom up pattern so as more roooted;

f. We have a more competitive rate of financing result (prc) because we can be more effective and more efficient in running pur busies because we have networks.

g. Better services because we understand better the m icro environment we are facing.

VI. TARGET AND BUSINESS PLAN FOR 2011

We have done a lot in 2010 such as; improving the institution capacity, drafting of Indonesian Islamic Microfinance Blueprint (BMT Guidelines year 2020), improvement in the policy standard up to improvement of supervision infrastructure all of which have given positive impact in the form of improved investors’ confidence and the confidence of Islamic partners that become our strategic partners. This ha resulted in the company growth of 86 percent.

In year 2011 we have a stronger optimism tha the previous year. Our optimism is based on the following; Indonesia’s macroeconomic condition which are supportive, stable and is expected to grow higher than the previous year. In addition, the government expenditures are expected to be more efficient and smooth than the previous year and allocated to the people so that it increase the cash flow for micro businesses. This will serve as stimulant from the aspect of demand for capital for micro businesses.

The same confidence also aply in the side of supply, in which increased confidence in the company will open the opportunity for fulfilling the supply of funds from banks or investors. This is particularly true when seeing the opportunity of issuing syariah financial instrument to finance cooperate actions in 2011. Therefore, this self confidence makes sense for us in making the business projection for this year and in the future.

For 2011, we make the business target and business plan to strengthen our position as a Financing Institution in the form of Venture Capital which become a correct, appropriate and beneficial investment facilities or as we ussualy refer to in our tagline as the Stream Benefit of Investment.

Target 2011

Performance	2011*	2010
In Rupiah (Million)
Total Asset	90.255,0	59.103,7
Outstanding Funds	82.673,4	47.344,1
Profit before Taxes & Zakat	698,1	619,6
In Percentage ( % )
NPF	0,30	0,60
BOPO	87	88
ROA	1,1	1,05
ROE	6,4	5,85
DER	7 times	5 times
Source of Funds	2011	2010
In Rupiah (Million)
Capital	11,000.0	10,579.7
Bank	52,500.0	33,722.9
Investor	25,000.0	14,258.5
Program	2,500.0	–
Non-Financial Performance	2011	2010
Total Funded BMTs (Unit)	120	87
Total funded Micro Entrepreneur (Person)	32.615	14.316
* Target Figure

We are targeting that in year 2011 the company’s total assets will increase by 52.7 percent from the figure in 2010 which was Rp 59,103.70 million to become Rp. 90,255.00 million. The target of the company’s financial performance can also be viewed from the increase in finds from banks and investors amounting to 61.5 percent from dari Rp. 47,981.40 million to become Rp. 77,500,0 Million, and beside in year 2011 there will be addition from the program amounting to Rp. 2,500,0 million.

The Outstanding funds distributed are estimated to increase by 74.6 percent fromi Rp. 47,344,1 million to Rp. 82,673.4 million. The company’s capital is projected to get an increase of 4 percent to Rp. 11,000.0 million from the previous year of Rp. 10,579.7 million.

We expect that several financial ratios will experience changes. As the consequence of addition of assets which are progressive in number, the capitalization ratio will again decrease as evident from the company’s DER figure which increase from 5 times to 7 times. From the NPPF view, in this year we believe that the amount of bad funds (NPF) can be decreased to 0.30 percent.

The company’s productivity viewed from the as act of Asset (ROA) will increase by 4.7 percent from the previous year. Meanwhile the company equity (ROE) will experience an increase of 9.4 percent.

In effort to build a strong, credible and modern financial company, we would like that this year the BOPO figure will reduce by 1.2 percent to become 87 percent which marks the achievement of efficiency in the company.

More importantly is the increase in the total number of BMTs and micro-scale entrepreneurs which receive funds from us. In 2011 we target to have 120 BMTs as our financial channel targeting micro-scale entrepreneurs reaching 32,615 in number in East Java, Central Java, Yogyakarta Special Administration Region, West Java, Jakarta Greater Area; Lampung and Southeast Sulawesi. This increase is expected to get us close to our vision to become the major player in the financial services for small-scale and medium-scale business trough BMT networks.

Business Plan 2011

To realize the above targets we need to have applicative and mutually supporting strategic plan. The strategies that can be applied are among others:

A. Financial

§ Establishing synergy with banks to apply the linkage program in channeling the funds from banks;

§ Improving cooperation with institutions/agencies/individual investors (angel inventors in placing funds;

§ Building cooperation in channeling funds from the government program, or PKBL-BUMN and CSR from corporations;

§ Issuing shariah financial instrument;

§ Seeking funds from cheap off shore loan by following up cooperation opportunities with the Ministry of Finance and IDB;

§ Strengthening capital and funding by issuing appropriate financial instruments.

B. Marketing

§ Expanding operational area by adding representative areas of PT Permodalan BMT Ventura (PBMT) in a number of areas/regions which have business potential for developing micro business;

§ Consistently disseminating PBMT VENTURA more focused by utilizing BMT networks;

§ Seeking fee based income by providing package deal services (financing, management service and IT);

§ Establishing cooperation to produce the product of transfer and remittance

§ Cooperating with BMT network in gaining the market share of 20% in Java for micro finance with the financing portfolio of 20 million and below.

C. Supervision and Risk Mitigation

· Setting up supporting and monitoring agency structure.

· Supervising BMT reports in accordance with the BMT accounting standard

· Providing technical assistance to BMT.

BALANCE SHEET PROJECTION

For the period of 2011

In Rupiah (Million)

ASSETS			2011	2010
CURRENT ASSETS
	Cash and cash equivalent		2,093.4	4,593.4
	Financing –after deducted by reserve of receivable loss (295,9)		82,673.4	47,344.0
	Other receivables to related parties		765.2	1,262.9
	Advances and Prepaid expenses		152.7	452.7
	Total Current Assets		85,684.7	53,653.1
NON CURRENT ASSETS
	Deferred taxes assets		3.4	2.7
	Fixed assets – after deducted by depreciation amounting to (186.2)		4.508.2	5,308.2
	Accrued expenses – after deducted by accumulated amortization amounting to (578,7)		16.4	46.4
	Other assets		43.1	93.1
	Total Fixed Assets		4,571.2	5,450.4
TOTAL ASSETS			90,255.9	59,103.7
LIABILITIES			2011	2010
LIABILITY
	Wadiah		35.5	335.5
	Payable expenses		20.5	15.5
	Tax payable		164.2	144.2
	Other liabilities to Related Parties		25.5	17.5
	Financing liabilities		78,896.1	47,981.4
	Non-syariah transaction		36.7	21.7
	Employee benefit liabilities		21.0	11.0
	Total Liabilities		79,199.7	48,526.9
EQUITY
	Share capital		10,000.0	9,843.2
		Other paid up capital	358.2	75.0
	Retained earning		358.2	158.1
	Balance of current retained earnings (losses)		698.0	500.3
	Total Equities		11,056.3	10,576.7
TOTAL LIABILITIES			90,255.9	59,103.7

INCOME STATEMENT

For the period of 2011

In Rupiah (Million)

		2011	2010
OPERATING REVENUE		11,640.8	7,605.1
OPERATING EXPENSES		(10,756.6)	(6,987.5)
OPERATING INCOME (LOSS)		884.3	617.5
OTHER INCOMES (EXPENSES)
	Revenues from savings and time deposit	11.2	22.4
	Bank charges	(37.0)	(21.1)
	Other revenues	1.1	0.7
	Other expenses	–	–
	Total Other revenues (expenses) – net	(24.7)	1.9
EARNING BEFORE INCOME TAX AND ZAKAT		859.5	619.6
ZAKAT		(19.4)	(15.5)
EARNING BEFORE INCOME TAX		840.1	604.0
TAX EXPENSES (BENEFITS)
	Current taxes	164.2	105.3
	Deferred taxes	(2.8)	(1.5)
	Total Tax expenses (benefits)	161.5	103.7
NET INCOME		698.1	500.3

VII. CLOSING

Hence, we have prepared the 2010 Annual Report 2010 to be used as reference for investors and all stakeholders in evaluating the company performance. Finally, by requesting bless and help from God we hope to have strength to participate in giving positive contribution in mobilizing the national economy.