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PT TOBA BARA SEJAHTRA Tbk
Consolidation and Integration
2013
AnnualReport
PT TOBA BARA SEJAHTRA Tbk
Contents
Industry Overview56Operational Review58Financial Review68
Management Discussion and Analysis
Community Development104Environment106Product Responsibility106
12
14
16
Corporate Governance
Corporate Social Responsibility
Financial Report109
Annual Report Contents Reference to the Bapepam-LK Regulation
221
Company Profile
30 Brief History of the Company
32 Business Line
34 Business Strategy
35 Vision and Mission
36 Organisation Structure
38 Profiles of the Board of Commissioners
40 Profiles of the Board of Directors
42 Human Resources
48 Shareholders Information
50 Brief Description of Subsidiaries
52 Capital Market Supporting Professionals
53 Address of Company and Operating Subsidiaries
Financial Highlights
Stock Highlights
2013 Event Highlights
17 Awards and Certifications
18 Report of the Chairman
22 Report of the President Directors
27 Perspectives of the Founding Shareholder
80 General Meeting of Shareholders
82 Board of Commissioners
84 Audit Committee
86 Board of Directors
88 Internal Audit
90 Corporate Secretary
94 Investor Relations
96 Legal Unit
98 Safety, Health and the Environment
2013 Annual Report 1
Consolidation and Integration
“ “Coal continues to feel the pressure of a weak market price. Far from experiencing a recovery from a prolonged price depression, the monthly average benchmark price of Newcastle Index declined from US$96.9 per ton in 2012 to US$85.3 per ton in 2013.
Without doubt, coal producers are forced to work in the most effective and efficient manner to cope with the challenging conditions that still prevailed throughout 2013. Only those who are strong – strong in the sense of being efficient and cost-effective in terms of operations – and can still enjoy a healthy operating margin. Not exceptional, but healthy.
Keenly aware of this, Toba Bara exerted all efforts to make its coal mining operations one of the most cost-effective in the sector. To that end, the Company consolidated its strengths – human resources, work process, marketing strategy and social responsibility – and integrated the infrastructures of its three subsidiary coalmine entities.
With its consolidation and integration steps, Toba Bara came through the year 2013 with flying colours.
2013 Annual Report2
Full-scale Integration
1Toba Bara benefits from the locations of its three
subsidiary coalmine entities that are adjacent to one
another. This enables the Company to plan, build and
operate mining infrastructures in an integrated and
synergistic manner. Imagine the immense benefits that
can be derived from a coal-hauling road, which is not
only shared but can be used to transport coal; shorten
the distance to store away overburden; and enabling
the three mining entities to also share the use of other
coal producing facilities – coal crusher, stockpile yard,
conveyor belt – simply because they are connected to
one another through the haul road.
2013 Annual Report 3
2013 Annual Report4
Cost Efficiency
2With the integrated mining infrastructures, Toba Bara
benefits from the economies of scale of its mining
operations that are reflected in the decreasing operating
costs of the three mining companies.
The outcome of this has been a significant amount of
savings in both production and operating costs, which is
even more significant in light of the depressed coal market
in recent years.
In the eyes of Toba Bara, nothing is more important than
cost efficiency in the current state of the coal industry.
Toba Bara was able to achieve this through the strategy
of consolidation and integration that it has pursued since
2013.
2013 Annual Report 5
2013 Annual Report6
Increasing Productivity
3With increasing integration of the mining infrastructures
and facilities among its three mining entities, Toba Bara
has been able to increase coal production volume, achieve
better and more efficient working processes in the fields,
and meet higher productivity.
In 2011, the Toba Bara Group produced a total of 5.2 million
tons of coal. In 2012, this was increased to 5.6 million tons.
And in 2013, production volume increased even further to
6.5 million tons.
The Company has not harnessed all of its resources
to date, and therefore still has room for improvement,
enhancement and perfection to increase its productivity
even more in the years to come.
2013 Annual Report 7
2013 Annual Report8
Quality Human Resources
4Despite the Company’s efficiency drive, the number of
employees increased. This shows the importance that
Toba Bara has always placed in the roles that human
resources play behind the business efforts of the
Company, which has to sustained its growth, amid the
challenges and uncertainties of the commodities market
in recent years.
An in-depth expertise on the natural resources industry
itself – whether it be in the mining or plantation
industries – is key to the successful pursuit of achieving
that sustainable development.
With a growing number of employees totalling 795
people as of year-end 2013, the personnel of the Toba
Bara Group have a median age of below 35 years.
Whereas the largest group of employees are within the
age range of 26 to 45 years old, generally the most
productive years of any working person.
As a result of which, the Company is set to face up to
the challenges of the commodities markets in the future,
forging ahead to become one of the leading players in
the natural resources industry in Indonesia for decades
to come.
2013 Annual Report 9
2013 Annual Report10
Sustainable Social Responsibility
5Corporate Social Responsibility constitutes one of the
success factors of any mining or plantation operations,
in view of the fact that these two business activities are
intensely intertwined with the people or communities in
the surrounding areas where the business operates.
In recognition of this, Toba Bara through its three
subsidiary entities places a strong emphasis on
corporate social responsibility as a key initiative to foster
harmonious relations with the surrounding communities.
A number of corporate social responsibility programs
have been undertaken by taking into consideration
the primary needs of the surrounding communities,
in addition to emphasizing activities that enhance
community welfare such as through social and economic
empowerment programs in education, health and decent
livelihoods.
2013 Annual Report 11
2013 Annual Report12
Financial Highlights
2011 2012 2013
Sales 498,190,177 396,685,875 421,849,737
Gross Profit 190,202,268 48,150,372 79,552,405
Operating Profit 156,532,532 21,083,331 50,015,314
Profit for the Year Attributable to:
Equity Holders of the Parent Entity 57,716,891 3,198,832 18,543,538
Non-Controlling Interest 57,572,552 8,733,850 16,060,255
Total Profit for the Year 115,289,443 11,932,682 34,603,793
Total Comprehensive Income Attributable to:
Equity Holders of the Parent Entity 57,639,973 3,269,250 19,919,574
Non-Controlling Interest 57,504,921 8,733,850 16,213,148
Total Comprehensive Income 115,144,894 12,003,100 36,132,722
Basic Earnings per Share 427.5325 0.0032 0.0092
Current Assets 110,747,014 106,512,473 130,198,784
Non-Current Assets 114,499,071 155,014,027 181,449,155
Total Assets 225,246,085 261,526,500 311,647,939
Current Liabilities 122,782,483 140,537,280 145,451,672
Non-Current Liabilities 43,340,683 10,044,913 35,715,023
Total Liabilities 166,123,166 150,582,193 181,166,695
Total Equity 59,122,919 110,944,307 130,481,244
Total Liabilities and Equity 225,246,085 261,526,500 311,647,939
Gross Profit Margin 38% 12% 19%
Operating Profit Margin 31% 5% 12%
Comprehensive Income for the Year Margin 23% 3% 9%
Return on Assets 0.5 0.0 0.1
Return on Equity 1.9 0.1 0.3
Current Ratio 0.9 0.8 0.9
Total Liabilities to Total Equity 2.8 1.4 1.4
Total Liabilities to Total Assets 0.7 0.6 0.6
Production Volume (in millions of tons) 5.2 5.6 6.5
Overburden (x) 12.7 14.9 13.4
Sales Volume (in millions of tons) 5.5 5.5 6.3
5.2
2011 2012
5.6
2013
6.5
Production Volume (in million tons)
(in US$)
2013 Annual Report 13
Total Assets (in million US$)
19.2%
225.2 261.5 311.6
2011 2012 2013
Total Liabilities (in million US$)
166.1 150.6 181.2
2011 2012 2013
Total Equity (in million US$)
59.1 110.9 130.5
2011 2012 2013
Sales (in million US$)
498.2 396.7 421.8
2011 2012 2013
Operating Profit (in million US$)
156.5 21.1 50.0
2011 2012 2013
Total Comprehensive Income (in million US$)
115.1 12.0 36.1
2011 2012 2013
20.3% 137.0%
200.8%17.7%
6.3%
2012-2013
2012-2013
2012-2013
2012-2013
2012-2013
2012-2013
2013 Annual Report14
Stock Highlights
Share Performance 2013
5,000,000 200
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
0 0
10,000,000 400
15,000,000 600
20,000,000 800
25,000,000 1,000
Share PriceVolume
2013 Annual Report 15
Quarter 3 Quarter 4
Highest Price (in Rp) 2,200 1,480
Lowest Price (in Rp) 1,350 1,060
Closing Price (in Rp) 1,460 1,270
Transaction Volume* (Unit) 59,628,000 2,382,000
Transaction Value* (in Rp) 118,443,462,320 3,123,300,000
Share Performance 2012
Quarter 1 Quarter 2 Quarter 3 Quarter 4
Highest Price (in Rp) 1,330 920 860 810
Lowest Price (in Rp) 770 720 680 630
Closing Price (in Rp) 880 860 710 740
Transaction Volume* (Unit) 148,771,500 17,548,000 7,246,000 9,487,500
Transaction Value* (in Rp) 149,293,019,320 20,770,194,968 5,073,634,976 6,436,890,000
Share Performance 2013
Dividend Policy
Based on Indonesian law, decision on dividend is made by
shareholders through the General Meeting of Shareholders
on the recommendation of the Board of Directors. The
Company can announce the distribution of dividend annually
if it has positive results. Prior to the closing of a financial year,
interim dividend can be distributed, provided it is based on
the Company’s Articles of Association, and if the distribution
of such interim dividend does not result in the Company’s
net assets to fall below the amount of fully subscribed and
paid-in capital, and furthermore, the Company still meets the
requirement for statutory reserves pursuant to the Limited
Liability Company Law on compulsory reserve. The distribution
of interim dividend is determined by the Board of Directors post
securing approval from the Board of Commissioners.
The Company plans to pay cash dividend at least once a year.
The amount of dividend is related to the profit of the Company
for the financial year, mindful of the financial condition of the
Company, and without exempting the rights of the General
Meeting of Shareholders of the Company to decide otherwise
in accordance with the Company’s Articles of Association and
prevailing laws and regulations.
The Company aims to pay dividends in the amount of at
least 30% of its consolidated profit for the year (less minority
interests and other comprehensive income) since financial year
2012, while observing the compulsory reserve requirements
pursuant to the Limited Liability Company Law. The amount
of dividends to be distributed by the Company will depend on
available cash flow, investment plans, liquidity condition, future
business prospects and other factors that are deemed relevant
by the Board of Directors and restrictions on the payment of
dividends based on certain agreements.
The shareholders on the prevailing listing date have rights
to certain full dividend that has been approved, subject to
prevailing income tax law in Indonesia. Dividend payable to
a shareholder of foreign national is subject to income tax of
maximum 20% in Indonesia.
Dividends Payment
Information on dividends payment is presented in the
Corporate Governance section on page 80 of this Annual
Report.
* Cummulative Value
Market capitalisation as of 28 December 2012 amounted to Rp2,556 billion.
Market capitalisation as of 31 December 2013 amounted to Rp1,489 billion.
* Cummulative Value
2013 Annual Report16
2013 Event Highlights
The Company presented its results of operations as of September 2013 in the Public Expose event at the Indonesia Stock Exchange Building, covering both financial and operating results. Pandu Syahrir (Director of Finance) and Sudharmono Saragih (Director of Operations) gave the presentation, accompanied by Iwan Sanyoto (Head of Investor Relations) and Bima Sinung Widagdo (Head of Legal Division).
Public Expose / 18 December 201310 millions No Loss Time Injury Award -
Petrosea / 11 November 2013
Presentation of the certificate and award from the Company to PT Petrosea Tbk as the mining contractor in ABN on the achievement of safety at work of 10 million man-hours without an accident.
The Company (represented by Pandu Syahrir) was a speaker at the Indonesia Commodities Conference organised by Macquarie Securities, in Jakarta. Pandu Syahrir had the opportunity to speak in the session of “Outlook and Challenges for Indonesia’s Coal Industry.”
Indonesia Commodities Conference /
25 September 2013
The Company convened the Annual General Meeting of Shareholders for the first time as a publicly listed company.
General Meeting of Shareholders /
28 June 2013
To increase awareness for the Company, Toba Bara participated in Coal Trans 2013 by opening a booth and becoming a sponsor of the event that was held in Nusa Dua, Bali.
Coal Trans Asia /
2 – 5 June 2013
Forbes Indonesia magazine designates PT Toba Bara Sejahtra Tbk as one of “Indonesia’s Top 50 Companies.”
Award from Forbes Magazine /
25 November 2013
2013 Annual Report 17
Awards and Certifications
PT Adimitra Baratama Nusantara received an award for achieving Zero Accident between the period of 1 January 2009 and 20 October 2013 from the Governor of East Kalimantan on 17 February 2014.
PT Adimitra Baratama Nusantara received a Gold Award Certificate as a token of Partnership and Appreciation from the Regency Government of Kutai Kartanegara in 2013.
PT Adimitra Baratama Nusantara received a Green Rating Certificate in the rating evaluation program on the performances of companies in environmental management, from the Governor of East Kalimantan in June 2011.
PT Adimitra Baratama Nusantara received a Green Rating Certificate in the rating evaluation program on the performances of companies in environmental management, from the Governor of East Kalimantan in June 2012.
PT Indomining received a Blue Rating Certificate in the rating evaluation program on the performances of companies in environmental management, from the Government of the East Kalimantan Province in 2012-2013.
PT Adimitra Baratama Nusantara received a Green Rating Certificate in the rating evaluation program on the performances of companies in environmental management, from the Governor of East Kalimantan on 5 June 2013.
PT Toba Bara Sejahtra Tbk received the Certificate of Participation in the Indonesia Environmental Week 2013, presented by the Ministry of Environment of the Republic of Indonesia on 2 June 2013.
PT Adimitra Baratama Nusantara received an award for achieving Zero Accident from the period of 1 January 2009 through to 20 November 2012 from the Governor of East Kalimantan on 12 February 2013.
2013 Annual Report18
Report of the Chairman
Jusman S. DjamalPresident Commissioner
It gives me great pleasure to present
the highlights of the achievements of
PT Toba Bara Sejahtra Tbk for fiscal
year 2013. This report also presents
the assessment of the Board of
Commissioners on the performance of
the Company under the management
of the Board of Directors, along with the
supervisory measures of the Board of
Commissioners on the management of
the Company.
In 2013, conditions affecting the coal
industry sector in Indonesia were not
encouraging. In fact, we can say that the
mining industry in general – including
that of coal – faced even greater
challenges in 2013 than they did in the
previous year.
A number of factors such as the global
price of coal that had not fully recovered,
operating expenses that tended to rise,
a global economy that is still weak, and
the prolonged monetary crisis in some
of the Eurozone countries, all of these
factors influenced one way or another the
coal industry in general, as well as the
Company’s performance in particular.
Dear Distinguished Shareholders,
““As a result of these efficiency measures, the Company was able to increase its profitability returns
encouragingly.
2013 Annual Report 19
Under those rather unfavourable
conditions, the development of the
Indonesian economy was also not very
encouraging. Indonesia’s GDP growth
declined from 6.2% in 2012 to 5.8%
in 2013. Several other key indicators
also reflected similar discouraging
developments, among which were
the weakening of the Rupiah that
depreciated by 26% throughout the year,
the benchmark interest rate of Bank
Indonesia that rose from 5.75% to 7.5%
by year-end 2013, and inflation rate that
increased from 4.3% in 2012 to 8.4% in
2013.
Although still within the safe corridor,
Indonesia has begun to feel the external
effects that are potentially harmful
to the delicate balance of its macro-
economy. For example, the suspension
of the quantitative easing policy of the
US Federal Reserve Bank resulted in
capital flight from Indonesia that instantly
brought down the exchange rate value of
the Rupiah. Indonesia’s external balance
of payment suffered due to a weakening
of exports relative to imports that had
prevailed throughout 2013. At the same
time, Indonesia also experienced current
account deficits that continued to rise
over the years, among other things due
to the cost of subsidies on fuel, electricity
and other utilities that are still borne by
the government.
Obviously we hope that those
unfavourable conditions will soon change
for the better in 2014 and beyond.
Assessing the Performance of the
BOD
Against the backdrop of numerous
challenges in 2013, PT Toba Bara
Sejahtra Tbk posted quite an
encouraging performance.
In our opinion, the Board of Directors
was able to execute the budget and
work plan of the Company for the
financial year 2013, as mandated by the
shareholders and guided by the Board of
Commissioners.
By implementing the right production
strategy, the Company was able to
increase its production volume by 16.1%
to 6.5 million tons of coal in 2013. At
the same time, the Company was also
able to undertake tight cost efficiency
measures without compromising the
safety and security of its operations. As
a result of these efficiency measures,
the Company was able to increase its
profitability returns encouragingly.
The Company posted a total
comprehensive income for the year of
US$36.1 million on total net revenues of
US$421.8 million in 2013, an increase of
200.8% and 6.3%, respectively, of those
of 2012.
Integration of Infrastructure Enhances
Competitiveness
There is no denying that the nature of the
coal commodity market, that has suffered
from the depressed coal prices in recent
years, has somewhat shifted the focus on
what constitute a successful coal mining
operations. It used to be that production
volume was the primary measure of
success for any coal mine operations.
This is no longer true. Today, to be a coal
mining company that is able to produce
coal at a lower or more efficient operating
cost compared to that of any other coal
mining company is a must, especially
when seen in the context of achieving
sustainable growth and profitability.
Coal Production Volume(in million tons)
16.1%
5.6 6.5
2012 2013
Report of the Chairman
2013 Annual Report20
Report of the Chairman
To that end, Toba Bara enjoys a unique advantage compared
to its peers. Through its three operating subsidiaries, the
Company owns three coal mine concession areas that
are adjacent to one another. This allows for the sharing of
mining infrastructure in an integrated manner. In 2013, the
Company’s Management focused their attention and exerted
all efforts to enhance that integration even further. This
enables the Company to suppress the operating costs of its
mines efficiently and effectively. In turn, the cost efficiency has
increased Toba Bara’s competitiveness, while also maintaining
sound profitability.
That is why the theme of our 2013 Annual Report,
“Consolidation and Integration,” aptly describes the efforts of
the Company not only to prevail over the competition in the
market, but also to ensure the Company’s sustainable long-
term growth.
Implementing Corporate Governance that Continues to be
Enhanced
The Board of Commissioners continues to carry out its
supervisory roles with the help of the committee under its
control, namely the Audit Committee. The establishment
of this committee is part of implementing Good Corporate
Governance (GCG) that continues to be enhanced by the
Company.
The Board of Commissioners welcomes the initiatives that
have been and will continue to be taken by the Company with
respect to developing or implementing the policies of GCG
within the Company in line with international best practices
such as the Recommendation of the OECD (Organisation
for Economic Co-operation and Development), the ASEAN
Scorecard, the Guidelines of the National Committee on GCG,
prevailing laws and regulations, and the Articles of Association
of the Company.
One of the Company’s strengths in corporate governance is
that all of the members of the Board of Commissioners of PT
Toba Bara Sejahtra Tbk are not affiliated with the majority
shareholder of the Company.
This means that the level of independence of the Board of
Commissioners of the Company is 100%, well above the
mandatory requirement of the Capital Market Authority of more
than 30% of the board membership.
In 2013, with the help of the Audit Committee, the Board of
Commissioners continued to monitor the execution of risk
management policies, implementation of internal audit, and
compliance to prevailing laws and regulations, including the
Company’s standard operating procedures. I am pleased that,
based on audit findings and other internal controls, there were
no indications of frauds or other activities that fall outside of
prevailing rules and regulations.
The Board of Commissioners has reviewed the audited
consolidated financial statements of the Company for the
year ending 31 December 2013 and is of the opinion that
the Company has achieved most of its targets for the year.
The Board of Commissioners duly submits said financial
statements for the approval of shareholders at the Annual
General Meeting of Shareholders of the Company in 2014.
Human Resources and Social Responsibility
The Board of Commissioners also monitors as a matter
of course the company’s activities in the areas of Human
Resources (HR) and Corporate Social Responsibility (CSR).
In 2013, Toba Bara continued to place an emphasis on
employee welfare, training and HR development, as well as
meeting the collective aspiration of the communities in which
the Company and its subsidiary entities operate. As in previous
years, Toba Bara directed its CSR activities in a planned
and systematic manner towards long-term objectives that
comprised of among other things empowering the economies
of local villages, improving the quality of education, providing
community health care services, including supporting healthy
nutrition for babies, and alleviating poverty in general.
2013 Annual Report 21
Report of the Chairman
Following up on past successes in environmental management prior to 2013, two of the Company’s subsidiary entities, namely
ABN and IM, received a Green rating and Blue rating, respectively, in managing environmental conservation through PROPER, a
government sanctioned environmental management program. In 2013, TMU also entered the PROPER program for the first time.
In the discussion on CSR in its own section of this Annual Report, the Company has also begun to report activities related to
three aspects of corporate sustainability – namely (i) environmental management, (ii) community development and (iii) product
responsibility.
Board of Commissioners Composition
I am pleased to report that there has not been any change to the composition of the Board of Commissioners of PT Toba Bara
Sejahtra Tbk since the last Annual GMS of the Company.
As such, I continue to share my duties and responsibilities with my distinguished colleagues, Messrs. Bacelius Ruru and Farid
Harianto, two highly accomplished professionals in government, business, the capital market and academia.
Future Expectations
The Board of Commissioners views that the steps taken by Toba Bara to consolidate and integrate its resources in these
extremely challenging times for the coal industry, constitute the right approach with strategic implications for the continuity and
sustainable growth of the Company going forward.
With their numerous infrastructures and resources, the three subsidiary entities of Toba Bara were able to harness the synergy
needed to enhance their competitiveness as well as the growing value that their businesses create.
In the long run, the synergy will have a significant impact on the Company’s resilience and growth capacities. This was already
evident in 2013, when amid the challenging conditions that had driven most coal mining companies in Indonesia to post lower
results of operations than they did a year ago, the Company had in fact posted higher operating results.
We are therefore highly confident of the Company’s ability to sustain its growth in 2014 and beyond.
Closing Remarks
It goes without saying that the success of Toba Bara could not have been achieved without the support and trust of a great many
stakeholders.
We are eternally grateful and appreciative of the Company’s shareholders, customers, employees, business partners, the central
and regional governments, the people’s representatives and the communities in which the Company operates.
May God bless all of our endeavours in the future.
Jusman S. DjamallPresident Commissioner
2013 Annual Report22
Report of the President Director
Justarina S. M. NaiborhuPresident Director
““
The year 2013 went by so quickly. The
price of coal that had been depressed
throughout 2012, had not fully recovered
in 2013.
This condition forced Toba Bara, through
its three subsidiary entities that are
engaged in the business of coal mining,
namely Adimitra Baratama Nusantara
(ABN), Indomining (IM) and Trisensa
Mineral Utama (TMU), to work hard in
response to the difficult and challenging
market conditions.
The Company undertook a number of
initiatives to counter the challenging
conditions, among the key initiatives
of which were efforts to Consolidate
and Integrate. Our consolidation efforts
centred on human resources as well as
on work processes and cost efficiencies;
whereas our integration efforts were
aimed at the mining infrastructures and
other mining resources among the three
subsidiary entities of the Company.
Our consolidation and integration
initiatives will be elaborated further
herein, and constitute the theme of this
Annual Report.
Our consolidation efforts centered on human resources as well as on work processes and cost efficiencies; whereas
our integration efforts were aimed at the mining infrastructures and other
mining resources among the three subsidiary entities of the
Company.
Dear Distinguished Shareholders,
2013 Annual Report 23
However, allow me to present some
of the results of our Consolidation and
Integration initiatives that are quite
encouraging.
Amid a coal market background that
has not been conducive, I am pleased
to report the Company’s results of
operations that are promising. Toba Bara
posted total sales revenue that increased
by 6.3% to US$421.8 million in 2013. The
increase was derived primarily from the
increase in sales volume by 14.5% to
6.3 million tons of coal compared to that
of the previous year. The Company also
posted an encouraging growth in terms
of comprehensive net income, amounting
to US$36.1 million in 2013 compared
to US$12.0 million a year before. The
Company successfully achieved all of
its key business targets as set forth in
the Company’s budget and work plan of
2013.
The encouraging growth delta between
the operating results of 2013 and those
of 2012, however, was not as high as
the growth delta between the years 2012
and 2011. This prompted the Company
to continue to consolidate and manage
cost more efficiently, in addition to the
aforementioned integration efforts.
Cost efficiencies were achieved in almost
every aspect of production, starting from
mining operating cost, barging and fuel
consumption to employing infrastructures
on integrated basis.
In the meantime, a reduction of the
stripping ratio, shortening the distance
to stow away overburden, and border
mining activities – all contributed to
further cost savings.
These cost-efficiency initiatives
succeeded in maintaining the Company’s
operating margin at a healthy level, thus
contributing positively to the Company’s
operating income as well as net income
for the year under review.
Work Transformation Process
One of the key factors behind the
Company’s achievements in 2013
was the efforts to transform the way
the Company works that include
reorganising, appointing the right
people in key operating positions, and
instilling the same understanding among
all personnel of the three subsidiary
entities towards the business goals
and objectives of the Company. These
transformation efforts had a significant
impact on better operating efficiencies,
cost and time efficiencies, and more
importantly, on the formation of a
stronger camaraderie and teamwork
spirit between the personnel of Toba
Bara and the three subsidiary entities.
Several concrete results that have been
gained from this work transformation
process, among which are the 2013
record-breaking fourth-quarter production
volume that reached a total of 1.9
million tons of coal, the highest ever
quarterly production by the Company, the
construction of the new hauling road from
TMU to IM via ABN that was completed
ahead of schedule, in addition to the
aforementioned cost efficiencies.
Sales(in million US$)
6.3%
396.7 421.8
2012 2013
Report of the President Director
2013 Annual Report24
Report of the President Director
Initiatives Carried Out by the Company
The Company made a total of US$23.3 million in capital
expenditure in 2013 to support its operating activities
and improve work efficiencies. One of the realised capital
expenditure was for the construction of a Coal Processing
Plant (CPP) at IM that can increase the coal crushing capacity
of Toba Bara from 13 Mmt to 16 Mmt.
The increase in infrastructure capacities in 2013, as referred
to above, is complemented by a number of initiatives
undertaken in the area of marketing with the aim of securing
the Company’s market share. Those initiatives include closing
the deal on long-term coal sales contract at a locked price,
expanding the marketing coverage area in response to the
uncertain coal market conditions, and efforts to increase the
number of end-user customers to balance the number of
trading companies that the Company could rely upon.
At the same time, the Company also enhanced its corporate
communications and investor relations as a way to build a
positive image around the brand Toba Bara. A number of
initiatives taken by the Company’s Investor Relations Division
have yielded positive results, including greater recognitions in
the market from the various exposures of Toba Bara in leading
media such as Forbes magazine, or the coverage of Toba Bara
by market analysts from leading firms such as Macquarie, and
the participation of Toba Bara in the Coal Trans Asia 2013 as
one of the main sponsors as well as exhibitor in the trade fair.
In addition, Toba Bara was also invited to speak in various
prominent industry events such as Kalimantan Coal, Indonesia
Power & Energy Summit, Macquarie Indonesia Commodities
Conference, Seminar organised by the Directorate General of
Taxation and others.
In this context, Toba Bara also participated actively as the
Team Chair and Speaker in the dialogue forum between the
Government and the Indonesian Coal Mine Association to find
the middle ground in the Indonesian Government’s plan to
raise the royalty rate of coal production.
Corporate Governance
The Board of Directors continued to implement good corporate
governance (GCG) policies as mandated by the General
Meeting of Shareholders and capital market regulations with
respect to publicly listed companies.
In 2013, the Audit Committee of the Company had fully served
its functions pursuant to the duties and responsibilities as set
forth in the Audit Committee Charter. The Report of the Audit
Committee for the year ending 31 December 2013 is presented
in this Annual Report starting from page 84.
Meanwhile, the Board of Commissioners has begun to discuss
the establishment of the Nomination and Remuneration
Committee and the Risk Management Oversight Committee to
assist the oversight duties of the Board of Commissioners in
overseeing the management of the Company by the Board of
Directors.
The Board of Directors continue to ensure that the principles
of GCG comprising transparency, accountability, responsibility,
independence, and fairness are constantly upheld by each and
every person in the Company and the three subsidiary entities.
2013 Annual Report 25
Report of the President Director
In addition, the Corporate Secretary Division and Legal
Division are seeing to it that the Company with all of its rank-
and-file comply fully with all prevailing laws and regulations
that are relevant to the Company’s business.
The Company also continues to enhance corporate social
responsibility activities, especially those that relate to the
Company’s sustainable business development and growth.
Slowly but surely, Toba Bara has begun to implement the
principles of sustainable development that are grounded upon
the 3Ps of Profit, People and Planet. Discussions on these
three “P” that are presented in the context of (i) environmental
management, (ii) community development, and (iii) product
responsibility are presented in the Sustainability Program
section in the discussion on Corporate Governance in this
Annual Report starting from page 78.
Human Resources
The management of human resources (HR) has become an
increasingly important part of the Company’s activities due
to the business process transformation undertaken since
2013 in response to the currently bearish coal market. We
then made a workforce mapping exercise, along with the
gap analysis between the job requirement at hand and the
Company’s available HR capabilities. The outcome of this
mapping and analysis is then used as the basis to develop the
HR development policies and the recruitment of employees to
strengthen the rank-and-file of the Company and its subsidiary
entities.
The Principles of Sustainable Development that are Grounded Upon the 3Ps
Profit People Planet
2013 Annual Report26
Report of the President Director
Justarina S. M. NaiborhuPresident Director
Prospects in 2014
The Company believes that conditions in the coal market will
generally not change much in 2014 compared to those of the
previous year, although there has been an upward trend in the
price of coal since the fourth quarter of 2013. We will still have
to see whether this upward trend reflects market fundamentals
over the long term or simply a temporary spike in demand
related to the winter season in the northern hemisphere of
the globe. But whatever the trending price will be in 2014, the
Company is ready to face up to any challenge that the market
may pose.
Toba Bara has a long-term business plan that centres around
(i) efforts to increase the exploitation of coal from current coal
reserves of 147 million tons, (ii) efforts to increase production
and operating cost efficiencies through various initiatives that
have proven to work, (iii) efforts to expand markets and the
number of end-user customers in order to increase market
share, and (iv) efforts to explore for more coal reserves
throughout the Company’s vast concession areas that are
still not prospected, as well as through acquisitions when the
opportunity arises.
Based on those efforts, the Company believes that it can
maintain sustainable growth in 2014 and in the years to come.
Board of Directors Composition
In 2013, there was no change in the composition of the Board
of Directors.
Closing Statements
In closing, allow me on behalf of the Board of Directors to
convey our heartfelt appreciation to shareholders, members
of the Board of Commissioners and its committee, customers,
employees, business partners, the central and regional
governments as well as the people’s representatives, and the
communities surrounding the Company’s operations. We value
their support and trust towards Toba Bara. May God bless our
efforts in the future.
2013 Annual Report 27
Gen. (Ret.) Luhut B. PandjaitanFounding Shareholder
Gen. (Ret.) Luhut B. Pandjaitan is the founder of PT Toba
Sejahtra that holds 71.8% shares of PT Toba Bara Sejahtra
Tbk.
A retired general of the Indonesian National Army (TNI),
statesman, former ambassador extraordinary and
plenipotentiary of the Republic of Indonesia, businessman and
philanthropist, Luhut B. Pandjaitan devotes all his thoughts and
efforts to the progress and prosperity of the Indonesian nation
that he loves.
As a businessman, his vision is to increase the
competitiveness of Indonesian businesses in order to compete
regionally and globally.
Regionally, the demand for increased competitiveness by
Indonesia is already upon us with the inauguration of the
ASEAN Free Trade Market in 2015. Whereas globally,
Indonesia must improve its industrial strength among the
leading industrialised countries in the world – the G-20 Group,
in which as of year-end 2013, Indonesia ranked 13th among
the world’s largest economies (the World Bank).
Luhut B. Pandjaitan believes that education is key to increasing
the competitiveness of a nation. Therefore, he founded the DEL
Foundation, a non-profit foundation that is actively engaged
in community development in North Sumatra with a focus on
education through PI DEL. A leading national university in the
field of information technology that is accredited by the Ministry
of Education of the Republic of Indonesia.
He believes that Indonesia needs to add the value that can be
derived from the nation’s natural resource riches. Therefore, he
founded Toba Bara to create added value from the coal-mining
sector – a leading sector of Indonesia’s.
“The Social Entrepreneur of the Year” of Ernst & Young Global
Entrepreneurship Award 2012, Luhut B. Pandjaitan, is keenly
aware of the significance of the sustainable development
that is built upon the three pillars of economic performance
(profit), environmental conservation (planet) and social welfare
(people). Therefore, he expects Toba Bara to begin harnessing
the principles of sustainable development in every aspect of its
business activities.
Perspectives of the Founding Shareholder
““I am pleased that the Toba Bara Group has begun to show the strength and features of a sustainable
business.
2013 Annual Report28
2013 Annual Report 29
Company Profile
Brief History of the Company30 Shareholders Information48
Capital Market Supporting Professionals 52
Address of Company and Operating Subsidiaries53
Brief Description of Operating Subsidiaries50Business Line32
Business Strategy34
Vision and Mission35
Organisation Structure36
Profiles of the Board of Commissioners38
Profiles of the Board of Directors40
Human Resources42
2013 Annual Report30
Brief History of the Company
PT Toba Bara Sejahtra Tbk (Toba Bara) was incorporated in 2007 and acquired its legal entity status based on the approval of
the Minister of Justice and Human Rights of the Republic of Indonesia number AHU-04084.AH.01.01 dated 28 January 2008.
Toba Bara is structured as a holding company and, through its subsidiary entities, operates three coal mines.
The Company is the holding company of PT Adimitra Baratama Nusantara (ABN), PT Indomining (IM) through PT Toba Bumi
Energi (TBE) and PT Trisensa Mineral Utama (TMU), as well as PT Perkebunan Kaltim Utama I (PKU) that was acquired in
June 2013. The following timeline describes the major events that have transpired in the Company’s corporate history:
ABN and TMU were incorporated in
2004.
2004
IM was incorporated in 2005.
2005
ABN and IM were granted mining
authorization for exploration.
2006
ABN and IM were granted KP for
exploitation.
2007
IM began production.
ABN began production.
2008
TMU was granted KP for exploration.
2013 Annual Report 31
ABN converted its KP to IUPOP.
2009
TMU began production. Consolidated
production of Toba Bara surpassed 5
million tons.
2011
The haul road TMU – IM is operated ahead of
schedule. Construction of the second underpass in ABN was completed.
2013
IM and TMU converted their KP
to IUPOP.
2010
TBS acquired 51.0% of ABN, 52.5% of TBE
(that controlled IM) and 51.0% of TMU.
Toba Bara acquired additional shares
of TBE and TMU to 99.99% each.
2012
TBS listed its shares on the Indonesia Stock Exchange
(July).
TBS settled the land overlapping issue
with PKU.
TMU is poised to increase coal
production to 80,000 tons – 100,000 tons/
month. A new CPP has been constructed in IM.
Company Profile • Brief History of the Company
Consolidated production of Toba Bara reached more
than 3.9 million tons.
2013 Annual Report32
Business Line
TMU
ABN
ABN Jetty
IM Jetty
~5 km
~65 km
IM
Samarinda
Mahakam River
Major city is less than 50 km
Adjacent locations for three mines
Close proximity transhipment point & jetty
Major City Jetty Transhipment Point
Furthest pit to jetty 25 km with closest 1 - 5 km
Kutai Energy
The Company is currently engaged in coal production and sales through three subsidiary entities. These three subsidiary entities have
adjacent concession areas located in Sanga-Sanga, Loa Janan and Muara Jawa, Kutai Kartanegara Regency, in the province of East
Kalimantan. The ABN and Indomining concession areas are situated within 5 kilometers of their respective self-owned jetties on the
Mahakam River delta, which provide access to transhipment points in Muara Jawa and Muara Berau. The Company’s concession areas
total approximately 7,087 hectares.
Hauling Road TMU - IM
2013 Annual Report 33
~55 km(Total ~120 km)
Makasar Strait
Muara Berau
Muara Jawa
Coal Production (in million ton)
0.8
2.0
3.9
5.25.6
6.5
2008 2009 2010 2011 2012 2013
ABN TMUIM
Concession Area
TM Ash TS Calorific Value (kcl/kg)
(% GAR) (% GAD) (% GAD) GAR GAD
PT ADIMITRA BARATAMA NUSANTARA
ABN 52 25 7 0.8 5,200 5,800
ABN 55 - HS 20 6 1.8 5,500 6,000
ABN 55 - RS 20 6 0.8 5,500 6,000
ABN 58 19 6 0.9 5,800 6,250
PT INDOMINING
Indomining 19 8 0.9 5,700 6,200
PT TRISENSA MINERAL UTAMA
Trisensa - 47 28 5 0.4 4,700 5,400
Coal Products
Coal Resevers
147 million tonCoal Resources
236 million ton
Based on the JORC Reports, the Company’s coal reserves are estimated to be 147 million tons and the Company’s coal resources are
estimated to be 236 million tons. The reserves and resources in the Company’s concession areas include various grades of thermal coal.
The calorific values of the coal produced by the operating subsidiaries range from 4,700 GAR to 5,800 GAR. Currently, the majority of the
Company’s coal is sold to coal trading companies, which primarily supply the coal to power generating companies in South Korea, Taiwan,
China and India.
Company Profile • Business Line
2013 Annual Report34
Business Strategy
SustainableLong Term
Growth
The Company’s business strategy in maintaining sustainable growth rests upon the coal mining concession locations of the three
operating subsidiaries that are adjacent to one another. This allows the Company to undertake a collective mine planning on a group-
wide basis that integrates the mining operations of ABN, IM and TMU. Through this integration strategy, there are many benefits that
accrue to the Company and the Group, such as joint infrastructure development, the construction of hauling road that cuts through one
of the subsidiary entity concessions, in addition to cost efficiency that can be derived from an integrated operation.
To that end, the Company has formulated five strategic steps to support sustainable long term growth, as follows:
Integration of three
mines.
Continue to focus on
health and safety,
environmental track
record and commitment
to Corporate Social
Responsibility.
Organically increase
coal production levels.
Increase coal reserve
and resource.
Stregthen existing and
develop new customer
relationships.
2013 Annual Report 35
Vision
• Creating sustainable shareholder value from
Indonesian mining
• Developing a best-in-class pool of talent
• Investing in our subsidiaries and other related
businesses that will enhance value to shareholders
• Managing competitiveness of mining operations
effectively
• Enhancing integration of coal supply chain to
ensure reliability and efficiency
• Building strong relationship with our business
partners and the financial community
• Being a responsible corporate citizen in promoting
community development and implementing good
corporate governance practices.
Mission
Vision and Mission
To be one of the best-managed
world class mining companies in
Indonesia with a focus on high
growth by building competence
through development of our
employees, robust financial
performance, and solid returns
for our shareholders.
2013 Annual Report36
Organisation Structure
Board of Commissioners
Board of Directors
Bima Sinung Widagdo
Legal UnitCorporate Secretary
Pandu P. Syahrir
Investor Relations
Iwan Sanyoto
2013 Annual Report 37
ABN BOD IM BOD TMU BOD
Audit Committee
Internal Audit
Finance & Accounting
Tries Nainggolan
Government Relations
Vacant
Company Profile • Organisation Structure
2013 Annual Report38
Profiles of the Board of Commissioners
1
2
3
2013 Annual Report 39
Company Profile • Profiles of the Board of Commissioners
Mr. Jusman Syafii Djamal has been
President Commissioner of the company
since October 1, 2010. Currently he also
serves as the President Commissioner of
PT Cardig Aero Services Tbk (July 2011 –
present), President Commissioner of PT
Telkom Indonesia Tbk (January 2011 –
present), Member of National Innovation
Committee (May 2010 – present),
Chairman of the Advisory Council of
Entrepreneur of Land Transportation
Organization (January 2010 – present),
and Chairman of Matsushita Gobel
Foundation January 2005 – present).
Previously, he served, among others, as
the Minister of Transportation of the First
United Indonesia Cabinet (May 2007 –
October 2009), Member of the National
Evaluation Team of Transportation Safety
and Security (January - May 2007),
Member of Incubator Technology of
BPPT (2003), and Chief Project Engineer
of 50 seaters Advanced Turboprop N250
Fly by Wire Airplane, IPTN Indonesia
(1990 – 1995). He graduated with a
Bachelors Degree in Technical Aviation
from Institut Teknologi Bandung.
Jusman S. DjamalPresident Commissioner1
Mr. Bacelius Ruru has been a
Commissioner of the Company since
March 30, 2012. Currently he also
serves as Independent Commissioner
of PT Manulife Aset Manajemen
Indonesia (2011 – present), Independent
Commissioner of PT Agung Podomoro
Land Tbk (2010 – present), President
Commissioner of PT Axle Asia (insurance
broker) (2008 – present), President
Commissioner of PT Jababeka Tbk (2007
– present), President Commissioner of
PT Tuban Petrochemical Industries (2003
– present) and President Commissioner
of PT Polychem Indonesia (2003 –
present). Previously, he served, among
others, as President Commissioner of PT
Perusahaan Pengelola Aset (Persero)
(2004 – 2008), President Commissioner
of PT Telekomunikasi Indonesia Tbk
(2001 – 2004), President Commissioner
of PT Bursa Efek Indonesia (2001 –
2008), Secretary of the Ministry of
State-Owned Enterprises (2001 – 2004),
Deputy of State Minister/Deputy of
Head of Investment and State-Owned
Enterprises Development, Division of
Supervision and Control, Ministry of
State-Owned Enterprise (2000 – 2001),
Assistant of Minister/Deputy of Mining
Business and Agro Industry, State
Ministry of Utilization (1999 – 2000),
Deputy of Competitive Business Sector,
Management Board of State-Owned
Enterprises (1998 – 1999), Director
General of State-Owned Enterprises
Development, Ministry of Finance (1995
– 1998), and Head of the Indonesian
Capital Markets Supervisory Agency,
Ministry of Finance (1993 – 1995).
He holds a law degree from the
University of Indonesia, Indonesia and
a Masters of Law Degree from Harvard
Law School, United States.
Mr. Farid Harianto has been a
Commissioner of the Company since
2011. Currently he also serves as a
Member of the President’s Advancement
Advisory Council in the National
University of Singapore (2011 – present),
Independent Commissioner of PT BATA
Indonesia Tbk (2011 – present),
He is Special Staff of the Vice President
of the Republic of Indonesia (2009 –
present), Risk Oversight Committee of PT
Bank International Indonesia Tbk (2007
– present), Independent Commissioner
of PT Unggul Indah Cahaya Tbk (2005 –
present), Independent Commissioner of
PT Lippo Karawaci Tbk (2004 – present),
and Member of Asian Executive Advisory
Board, the Wharton School, University of
Pennsylvania (2000 – present).
Previously, he served, among others, as
Deputy Chairman of the Indonesian Bank
Restructuring Agency (1998 – 2000),
President Director of PT Pemeringkat
Efek Indonesia (1995 – 1998), Visiting
Professor and Chairman, ASEAN
Studies, University of Toronto, Canada
(1993 – 1995), and Director, Graduate
Programs, Institute PPM (1990 – 1993).
He graduated with a Bachelors Degree
in Electrical Engineering from Institut
Teknologi Bandung, Indonesia.
He also holds a Masters in Applied
Economics and Managerial Science
and a Ph.D in Applied Economics and
Managerial Science from The Wharton
School at the University of Pennsylvania,
United States.
Bacelius RuruIndependent Commissioner2 Farid HariantoIndependent Commissioner3
40
Profiles of the Board of Directors
1 2
34
2013 Annual Report
41
Ms. Justarina Sinta Marisi Naiborhu has been the President
Director of the Company since May 5, 2011. Prior to this
she was the President Director of PT CIMB-Principal
Asset Management (2008 – 2011), Director of PT CIMB-
GK Securities Indonesia (2003 – 2008), Vice President of
Institutional Business & Advisory PT Kuo Capital Raharja
(2001 – 2003), Portfolio Manager of Institutional Asset
Management of PT Danareksa Investment Management (1999
– 2001), and Research & Development Analyst and Assistant
to the President Director of PT Bursa Efek Jakarta (1992 –
1997).
She graduated with a Bachelors Degree from the Bogor
Institute of Agriculture, Indonesia. She also holds a Masters
Degree in International Securities, Investment and Banking
from Reading University, United Kingdom and a Masters
Degree in Management from the University of Indonesia,
Indonesia.
Mr. Arthur Mangaratua Ebenhaezer Simatupang has been a
Director of the Company since May 5, 2011. Prior to this, he
was a Director and Chief Financial Officer of ABN since 2007.
Additionally, he previously served as Advertising and Promotion
Supervisor at PT Indofood Sukses Makmur Tbk (1998 -2004).
He graduated with a Bachelors Degree in International
Business from Seattle University, United States and a Masters
of Commerce Degree in Finance and Accounting from The
University of Sydney, Australia.
Mr. Pandu Patria Syahrir has been a Director of the Company
since October 1, 2010. Prior to this, he was a Senior Analyst
focusing on the energy and mining sectors at Matlin Patterson
from 2007. Additionally, he previously served as Principal at
Byun & Co., an Asian alternative energy fund (2002 – 2005)
and as an Analyst at Lehman Brothers (2001 – 2002). He
graduated with a Bachelors Degree from the University of
Chicago, United States and holds a Masters of Business
Administration Degree from the Stanford Graduate School of
Business, United States.
Justarina S. M. NaiborhuPresident Director/ Unaffiliated Director1 Arthur M. E. SimatupangDirector3
Mr. Sudharmono Saragih has been a Director of the Company
since June 20, 2012. Prior to this, he was the Company’s
General Manager of Operations since April 2012.
He previously served as a Project Manager at PT Toba
Sejahtra (2011 – 2012). Prior to that, he was the Site Manager
of PT Raja Kutai Baru Makmur, Ancora Group (2010 – 2011),
Operations Manager of PT Karya Wijaya Aneka Mineral,
Harita Group (2009 – 2010), Site General Manager of PT
Agrabudi Jasa Bersama, Titan Mining Indonesia Group
(2009), Operations General Manager of PT Riau Bara Harum,
Andaru Resources Group (2008 – 2009), and Production
Superintendent at PT Kaltim Prima Coal (2004 – 2005).
He graduated with a Bachelors Degree from Bandung Institute
of Technology in Mining Engineering – General Mining,
Indonesia.
Sudharmono SaragihDirector4Pandu P. SyahrirDirector2
Company Profile • Profiles of the Board of Directors
2013 Annual Report
2013 Annual Report42
In 2013, the Company added a total of 27 personnel, an
increase of 1.1%, bringing the total number of employees in the
Company and the three subsidiary entities to 795 people.
As a growing organisation the Company sees human capital
as a critical factor to achieving sustainable long-term growth.
As such, the Company places a great emphasis on recruiting,
training and retaining professionals and top talents in the coal
mining industry.
In 2013 the Company sharpenned the Key Performance
Indicator (KPI) in the three subsidiary entities. This is aimed at
enhancing the performance of each subsidiary entity in a more
measured and sustained manner.
In addition, the Company continues to develop its strategic
human capital policy, including identifying skills and
capabilities, setting remuneration standards, establishing
career path programs, and devising new method of
performance evaluation for the Company and its three
subsidiary entities.
Human Resources
As of 31 December 2013 the Company and its subsidiary entities employ a total of 795 people, 702 of which are
permanent employees. A total of 28 employees worked at Head Office in Jakarta with the remaining employees assigned
in field offices and sites working in various capacities that include administration, technical services, supervision of coal
processing and barging, logistics, safety and health, the environment and community development.
Total Employees
2011
731
2013
795
7862012
43 2013 Annual Report
The Company has a relatively young human resources composition, in which the largest group of employees are between the
ages 26 years to 35 years. This youthful composition provides dynamism to the Company and its three operating subsidiaries.
One of the enduring features of the Group’s human capital is their ‘can do’ spirit that underlines the work ethics of the Toba Bara
business group. This fact plays a key role in the ability of the Company to increase its coal production consistently over the past
four years.
The Company also places a strong emphasis on the value of training and education in human resources development.
As a relatively young coal mining company, in 2012 the Company carried out intensive training program, attended by employees
of various seniority levels. The list of training program is presented below:
No Training Organiser Date Location
1 First Aid Injury HSE ABN 18 January Sangasanga
2 Environmental Awareness HSE ABN 26 January Sangasanga
3 In-house Training Fatigue Management Indomining (Team HSE) 6 February Sangasanga
4 First Operational Supervisor Distamben Propinsi Kalimantan Timur 6-10 February Balikpapan
5 First Operational Supervisor Distamben Provinsi Kalimantan Timur 13 - 17 February Sangasanga
6 In-house Training Fatigue Management Indomining (Team HSE) 14 February Sangasanga
7 Leadership Course for New Managers QB Leadership Center 15 - 16 February Jakarta
8 In-house Training Fatigue Management Indomining (Team HSE) 16 February Sangasanga
9 In-house Training Fatigue Management Indomining (Team HSE) 18 February Sangasanga
10 Environmental Protection Expert on Safety, Health at Work Indotrain18 February -
2 MarchBalikpapan
Training Programs in 2013
As a growing organisation the Company sees human capital as a critical factor to achieving sustainable long term growth.
“ “
Company Profile • Human Resources
44 2013 Annual Report
Company Profile • Human Resources
No Training Organiser Date Location
11 In-house Training Fatigue Management Indomining (Team HSE) 25 February Sangasanga
12 Root Cause Analysis Indotrain 9 - 10 March Sangasanga
13 Workshop National Security Indonesian Management Centre (IMAC) 15 - 16 March Balikpapan
14Seminar Geotechnical Engineering in The Mining Industry Workshop
Balinga Utama 19 - 21 March Yogyakarta
15 Incident Investigation & Reporting Indomining (Team HSE) 20 March Sangasanga
16Designing Salary Structure & Remuneration to Enhance Company’s Productivity with Ergonomy and Psychology Approach
Expertindo 25 - 27 March Yogyakarta
17 Environment Management Mairodi Mandiri Sejahtera 8 - 11 April Bandung
18 Awareness Oil Spillage HSE ABN 14 April Sangasanga
19 Coal Washing Plant & Stockpile Management Course PT Geoservices 15 - 16 April Bandung
20 Oil Spillage dan Penggunaan APAR HSE ABN 20 April Sangasanga
21 Certifate Industrial Relations Profesional Unika Atmajaya 24 - 27 April Balikpapan
22 Safety Leadership Team Safety Indomining 1 May Sangasanga
23 Safety Officer Technos Prima 6 - 8 May Sangasanga
24 Middle Operational Supervisor Pusdiklat Mineral & Batubara 13 - 19 May Bandung
25 Environmental Protection Expert on Safety, Health at Work PT Phitagoras Global Duta 13 - 25 May Jakarta
26 How to Develop and Implement ISO 14001 Cipta Energi Utama Mandiri 15 - 19 May Sangasanga
27 How to Develop and Implement ISO 14001 PT Cipta Energi Utama Mandiri 16 - 19 May Bandung
28 P3K/First Aid Indonesian Red Cross 17 - 18 May Sangasanga
29Education and Training on Mining Environmental Management
Pusdiklat Minerba 20 - 25 May Bandung
30 Professional Filing & Record Management Cipta Energi Utama Mandiri 27 - 31 May Sangasanga
31Mine Indonesia 2013 11th Annual Review of trend in the Indonesia Mining Industry
Pricewaterhouse Coopers Indonesia (PwC Indonesia)
29 - 30 May Jakarta
32 Welder Indotrain 29 May - 30 June Sangasanga
33 Train of Trainer Indotrain 30 May - 1 June Sangasanga
34 Safety Officer Technos Prima 9 - 11 June Sangasanga
35 Intergrating QHSE Management System PT PGD 10 - 14 June Sangasanga
Training Programs in 2013
45 2013 Annual Report
No Training Organiser Date Location
36 Training for Main Supervisor in Mining Pusdiklat Minerba 17 - 20 June Jakarta
37Training and Competence Testing for Building/Construction
Asosiasi Tenaga Ahli Kontruksi Indonesia (ATAKI) 17 - 18 June Samarinda
38Training and Competence Testing for Main Supervisor in Mining
Pusdiklat-Minerba Bandung 17 - 21 June Jakarta
39 In-house Training for Training XPAC PT Admitra Baratama Nusantara 24 - 28 June Sangasanga
40 LOTO HSE ABN 27 June Sangasanga
41 Domestic Waste Management HSE ABN 29 June Sangasanga
42 Candidate for Health and Safety at Work Expert in 2013 Distamben Provinsi Kalimantan Timur 1 - 4 July Sangasanga
43 Training for Candidate for Health and Safety at Work Expert in 2013 Disnaker Provinsi Kalimantan Timur 2 - 5 July Samarinda
44 In-house Training Clean and Healthy Lifestyle Bio Medika 27 July Sangasanga
45 Health & Safety Management System Gilbert Markus Nisah Pih 14 September Sangasanga
46 Lead Auditor OHSAS 18001 & ISO 14001 Indotrain 21 - 20 September Sangasanga
47 Electricity Use at the Office and Mess HSE ABN 9 October Sangasanga
48 Awareness ASMK3L HSE ABN 11 - 12 October Sangasanga
49 Lead Auditor OHSAS 18001 & ISO 14001 Indotrain 17 - 18 October Sangasanga
50 Minescape Advance Stratmodel Mitrais 16 - 19 October Jakarta
51 Awareness ASMK3L HSE ABN 19 - 20 October Sangasanga
52 Evaluation & Certification of General Safety and Health Expert Start Safety 25 - 26 October Sangasanga
53 Mining Acid PT BENEFITA 26 - 30 October Sangasanga
54Environmental Brainstorming “Basic Knowledge on Post-Mining Revegetation and Safety Management System"
Sri Soegiharto 31 October Sangasanga
55 Awareness Training ASMK3L HSE ABN 3 November Sangasanga
56 HIRADC & Identifikasi Aspek HSE ABN 9 November Sangasanga
57 Minescape Open Cut Public Mitrais 10 - 14 November Jakarta
58 Intensive Course on Mining Law EMLI Training 12 - 14 November Jakarta
59 Lead Auditor ISO 14001 Cerification Indotrain 12 - 16 November Sangasanga
60Workshop on Implementation of Inventory Data Application
Pusat Pengelolaan Ecoregion (PPE Kalimantan) 20 November Balikpapan
61 Training on Analysis Need and Impact Evaluation PT ISDM 5 - 6 Desember Jakarta
62 Accident Investigation Expertindo 25 - 28 December Sangasanga
Company Profile • Human Resources
46 2013 Annual Report
Company Profile • Human Resources
Employees Composition 2012-2013
2012 2013
Employeesby Status
STATUS Permanent613 (77.9%)Temporary173 (22.1%)
Permanent702 (88.3%)Temporary93 (11.7%)
Employeesby Education
Senior High School555 (70.6%)
Junior High School12 (1.5%)
Elementary School12 (1.5%)
Diploma46 (5.8%)Bachelor’s and Master’s Degree161 (20.6%)
Senior High School553 (69.5%)
Junior High School14 (1.8%)
Elementary School13 (1.6%)
Diploma51 (6.4%)Bachelor’s and Master’s Degree164 (20.7%)
Male712 (90.6%)Female74 (9.4%)
Male703 (88.4%)Female92 (11.6%)
Employeesby Gender
Age 18-2586 (10.9%)Age 26-35342 (43.5%)Age 36-45241 (30.7%)Age 46-5492 (11.7%)Age >5525 (3.2%)
Age 18-25 76 (9.5%)Age 26-35355 (44.7%)Age 36-45261 (32.8%)Age 46-5487 (10.9%)Age >5516 (2.1%)
Employeesby Age
47 2013 Annual Report
Employeesby TItle
2012 2013
Non-Staff427 (54.3%)Staff165 (20.9%)Supervisor114 (14.5%)Super Intendent33 (4.2%)Manager25 (3.3%)Senior Manager4 (0.5%)General Manager6 (0.8%)Director12 (1.5%)
Non-Staff465 (58.5%)Staff108 (13.7%)Supervisor132 (16.6%)Super Intendent44 (5.5%)Manager29 (3.6%)Senior Manager1 (0.1%)General Manager6 (0.7%)Director10 (1.3%)
“ “One of the enduring features of the Group’s human capital is their ‘can do’ spirit that underlines the work ethics of the Toba Bara business group.
Company Profile • Human Resources
2013 Annual Report48
Shareholders Information
Name Position Number of Shares Percentage
Jusman D. Djamal President Commissioner 0 0.0000000
Bacelius Ruru Independent Commissioner 0 0.0000000
Farid Harianto Independent Commissioner 0 0.0000000
Justarina S. M. Naiborhu President Director 0 0.0000000
Pandu P. Syahrir Director 0 0.0000000
Arthur M. E. Simatupang Director 0 0.0000000
Sudharmono Saragih Director 45,000 0.0022360
Total 45,000 0.0022360
Composition of Shareholders
Shareholders Owning More Than 5%
Report of Share Ownership - Directors & Commissioners per 31 December 2013
Luhut Pandjaitan
99.98%
PT Bara Makmur Abadi (6.2%)
PT Sinergi Sukses Utama (5.1%)
Public (12.5%)
Davit T. Pandjaitan (0.8%)
PT Toba Sejahtra (71.8%)
Roby Budi Prakoso (3.6%)
Name of Shareholders Numbers of Shares Share Ownership
PT Bara Makmur Abadi 125,755,000 6.25%
Bintang Bara B.V 201,250,000 10.00%
PT Sinergi Sukses Utama 102,700,000 5.10%
PT Toba Sejahtra 1,444,750,000 71.79%
PT Adimitra Baratama Nusantara
51.00%
PT TobaBumi Energi
99.99%
PT Indomining99.99%
PT Trisensa Mineral Utama
99.99%
PT Perkebunan Kaltim Utama I
90.00%
2013 Annual Report 49
Company Profile • Shareholders Information
Information on the Majority Controlling ShareholderThe Company is majority held by PT Toba Sejahtra (TS), which holds 71.8% shares of the Company. Mr. Luhut Pandjaitan holds 99.98% shares of Toba Sejahtra.
PT Toba Sejahtra is a limited liability company incorporated under Indonesian law on 6 August 2004, and is currently engaged in the business of mining, energy and plantation. The businesses of Toba Sejahtra comprise of among other things natural resources (thermal coal and oil and gas), power generating plants (as Independent Power Producer of coal- fired, gas-fired and geothermal power plants), as well as agricultural and plantation resources (oil palm, rubber, sugar cane, and forestry). In addition to Toba Sejahtra itself, the TS Group currently comprises of 16 other affiliated companies that are engaged in broad ranging industry sectors.
Toba Sejahtra works with several leading companies from Indonesia and overseas in developing various assets and natural resources in Indonesia, with the aim of harnessing the natural resources of Indonesia to their full capacity for the benefit of the Indonesian people.
Chronology of Share ListingThe Company successfully listed its shares on the Indonesia Stock Exchange on 6 July 2012, under challenging conditions for the coal market in general. A total of 210,681,000 common shares at a nominal value of Rp200 per share, was listed on the Exchange, representing 10.47% of the Company’s fully paid and subscribed capital. The number of shares that was offered to the public at a price of Rp1,900 per share generated an IPO proceed of Rp400,293,900,000 for the Company. It is listed on IDX with the ticker code of TOBA.
No.Type of Public
Offering
Effective Date
Realization of Public Offering Plan of Use of Proceeds as Disclosed in Prospectus Realization of Use of Proceeds as Disclosed in Prospectus
Total Proceeds
from Public
Offering
Expenses of Public Offering
Net Proceeds
Payment of Loan to BNP Paribas
CapitalExpenditures
Acquisition of Coal Mining Concession,
Working Capital and Operational,
and Exploration Activities
Total
Payment of Loan to BNP Paribas
CapitalExpenditures
Acquisition of Coal Mining Concession,
Working Capital and Operational, and Exploration
Activities
TotalRemaining Proceeds of
IPO
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
1Penawaran
Umum ( IPO )
6-Jul-12 400,294 38,871 361,423 94,476 189,711 77,236 361,423 94,116 112,532 77,236 283,884 77,539
Total 400,294 38,871 361,423 94,476 189,711 77,236 361,423 94,116 112,532 77,236 283,884 77,539
Report of Use of Proceeds Per December 2013
Notesa. (i) Plan of use of proceeds as disclosed in Prospectus. 7 More or less 26.14% from the net proceeds to be used to repay loan facilities from BNP Paribas. 8 More or less 52.49% from the net proceeds to be used for capital expenditure to support mining activities, infrastructure and
facilities development in the concession areas of the subsidiary entities. 9 More or less 21.37% from the net proceeds to be used as working capital for the Company and subsidiary entities and to
finance exploration activities in the subsidiary entitities’ concession areas and to acquire coal mining concessions. (ii) Realisation of use of proceeds as disclosed in Prospectus. 11 Repayment of the loan principal to BNP Paribas amounting to US$9,946,782.69 equivalent to Rp94,116 million. 12 Capital expenditures related to the procurement of fixed assets for the Company and the development of supporting facilities in
the concession areas of subsidiary entities. 13 Financing of working capital and exploration activities in the three subsidiary entities’ concession through loans extended to the
subsidiary entities amounting to Rp18,485 million. Financing of operations and working capital of the Company
b. Fund from the proceeds of the IPO as of 31 December 2013 was deposited in PT Bank CIMB Niaga Tbk (non afiliated) with a tenor of one month, earning a Rupiah interest rate of 9.75%.
2013 Annual Report50
PT ADIMITRA BARATAMA NUSANTARA
Percentage Ownership of the Company
51.00%
PT INDOMINING
99.99%PT Adimitra Baratama Nusantara (ABN) is a fast-growing thermal coal producer located in Sanga- Sanga, Kutai Kartanegara, East Kalimantan, Indonesia and covers 2,990 hectares. First set up in 2004, ABN has been a majority-owned subsidiary entity of the Company since 2010.
ABN has a total estimated resources of 156 million tons of coal. Currently, ABN produces two varieties of blended thermal coal, ABN 52 and ABN 58. In 2013 it produced 4.2 million tons of coal, with main infrastructures that comprise of coal stockpile, crusher, overland conveyor and jetty. In 2013, more than 80% of ABN production is estimated to be higher than 5,600 GAR. ABN transports its coal from the ROM stockpile through the overland conveyor of less than five kilometers, which directly loads the coal to 300-feet barges at the jetty.
PT Indomining is a subsidiary company of PT Toba Bumi Energi, which is wholly controlled by the Company. The Indomining coal concession is located in Sanga-Sanga, Kutai Kartanegara, East Kalimantan, and covers 683 hectares, adjacent to the concession of ABN.
IM has a total estimated coal resources amounting to 37 million tons, and has its own coal mining infrastructures that include a crusher, land conveyor and jetty. IM can transport crushed coal from the ROM stockpile through the overland conveyor directly onto docked barges in the jetty. IM began production in 2007 and in 2013 produced a total of 1.4 million tons of coal.
Brief Description of Operating Subsidiaries
Percentage Ownership of the Company
Board of Commissioners
Directors Directors
Paulina Maria Dame Uli Pandjaitan President Commissioner
Imelda The Commissioner
Aurelia Marsaulina Simatupang Commissioner
Soenggoel Pardamean Sitorus Commissioner
Sintong Pandjaitan Commissioner
Johny Lumintang* President Director
Sudirdjo Widjaja Director
Michael Soerijadji Director
Pandu P. Syahrir Director
Sudharmono Saragih Director
Board of Commissioners
Godlief Manangkak Timbul Silaen President Commissioner
Hamid Awaluddin Commissioner
Roby Budi Prakoso Commissioner
Saswinadi Sasmojo Commissioner
HM Yunus Yosfiah Commissioner
Arthur Simatupang President Director
Alvin Sunanda Director
* As of the date of this Annual Report, Mr. Johny Lumintang no longer serves as the President Director of ABN.
2013 Annual Report 51
PT TRISENSA MINERAL UTAMA
PT PERKEBUNAN KALTIM UTAMA I
99.99% 90%PT Trisensa Mineral Utama (TMU) is a wholly owned (99.99%) subsidiary of the Company. The TMU concession is located in Kutai Kartanegara, East Kalimantan, and covers 3,414 hectares. Trisensa has completed the construction of a coal-hauling road to IM through ABN in order to use IM’s infrastructures.
TMU has an estimated total resources of 43 million tons. TMU commenced production in October 2011, and in 2013 produced approximately 925 thousands tons of coal.
PT Perkebunan Kaltim Utama I (PKU) is a subsidiary entity of the Company with a majority share (90%) of PKU, which is engaged in the oil palm plantation business. PKU holds the Rights to Cultivate Oil Palm Plantation (HGU) of a site totalling 8,633 hectares in the Teluk Dalam Bario, Pula Seribu Village, Muara Jasa District, Jawa County, Sanga-Sanga Regency, and in Tani Bhakti Village, Batuah, Loa Janan District, Kutai Kartanegara Regency, East Kalimantan for a period of 30 years.
Percentage Ownership of the Company
Percentage Ownership of the Company
Company Profile • Brief Description of Operating Subsidiaries
Directors Directors
Board of Commissioners
Tjokro Saputrajaya President Commissioner
Bok Maria Laurensia Commissioner
Utomo Santoso Commissioner
Suadi Atma Commissioner
Salikin Moenits Commissioner
Eddy Kustiwa Koesma Commissioner
Suaidi Marasabessy President Director
Elim Khiat Director
Hartanto Saputrajaya Nyoto Director
Board of Commissioners
Lutfi Ibrahim Nasution President Commissioner
Lutfi Ismail Commissioner
Suaidi Marasabessy President Director
2013 Annual Report52
No.Supporting Institutions
Name of Institutions Address Period
1 Public AccountantKAP Purwantono, Suherman & Surja
Gedung Bursa Efek Indonesia, Tower 2, 7th floorJl. Jend. Sudiman Kav. 52-53, Jakarta 12190
T: (021) 5289 5000F: (021) 5289 4100
2012 - 2013
2 Notary Aryanti Artisari, SH. M. Kn
Menara Sudirman, 18th floorJl. Jend. Sudirman Kav. 60
Jakarta 12190T: (021) 520 4778F: (021) 520 4780
-
2 Share Registrar PT Datindo Entrycom
Wisma Diners Club AmexJl. Jend. Sudirman Kav. 34-35
Jakarta 10220T: (021) 570 8870F: (021) 570 9026
-
3 Public Appraisal Firm Jennywati, Kusnanto & Rekan
Plaza Bapindo Citibank Tower, 27th floorJl. Jend. Sudirman Kav. 54-55,
Jakarta 12190T: (021) 526 0808F: (021) 526 6006
-
Capital Market Supporting Professionals
2013 Annual Report 53
OPERATING SUBSIDIARIES
PT ADIMITRA BARATAMA NUSANTARA
Jakarta OfficeWisma Bakrie 2, 11th floorJl. H.R. Rasuna Said Kav. B-2Jakarta 12920, IndonesiaT: (021) 579 42103F: (021) 579 [email protected]
SiteJl. Habiba RT 04Kelurahan Jawa, Sanga-Sanga 75254Kab. Kutai Kartanegara - SamarindaKalimantan TimurIndonesiaT/F: (0541) 671 259
PT INDOMINING
Jakarta OfficeWisma Bakrie 2, 11th floorJl. H.R. Rasuna Said Kav. B-2Jakarta 12920, IndonesiaT: (021) 579 30579F: (021) 579 30580
SiteDistrict 5, Jl. Gajah MadaKel. Sanga-Sanga Dalam, Kec. Sanga-SangaKab. Kutai Kartanegara - SamarindaKalimantan TimurIndonesiaT: (0541) 671 387F: (0541) 671 310
PT TRISENSA MINERAL UTAMA
Jakarta OfficeWisma Bakrie 2, 16th floorJl. H.R. Rasuna Said Kav B-2Jakarta 12920, IndonesiaT: (021) 5793 0568/9F: (021) 5793 0570
SiteKM 23 Desa Tani HarapanKecamatan Loa JananKab. Kutai Kartanegara - SamarindaKalimantan TimurIndonesiaT/F: (0541) 726 8231
PT PERKEBUNAN KALTIM UTAMA 1
Jakarta OfficeWisma Bakrie 2, 16th floorJl. H.R. Rasuna Said Kav B-2Jakarta 12920, IndonesiaT: (021) 5794 5779
SiteDesa Tani HarapanKecamatan Loa JananKab. Kutai Kartanegara - SamarindaKalimantan TimurIndonesiaT/F: (0541) 796 4704
Address of Company and Operating Subsidiaries
PT TOBA BARA SEJAHTRA Tbk
Wisma Bakrie 2, 16th floorJl. H.R. Rasuna Said Kav. B-2Jakarta 12920, IndonesiaT: (021) 5794 5779 F: (021) 5794 [email protected]
2013 Annual Report54
2013 Annual Report 55
Management Discussion and Analysis
Industry Overview
Operational Review
Financial Review
56
58
68
2013 Annual Report56
The Coal Industry Sector Facing Declining Pace of Growth
The pace of growth in the demand for thermal coal continues
to indicate a slowing trend. A number of energy policies that
are directed towards lessening the dependency on coal energy
resources - especially in the largest consuming country, China -
have contributed to the changing landscape of the coal market
over the past several years. Ten or even five years ago, it would
seem that the demand for cheap and readily available coal
energy resources would never subside. New technology in power
plants was developed specifically to be able to use thermal
coal of low-range to medium-range calorific value, enabling the
consumption of much more coal. The process by which coal is
produced and made available – from pit to port – was designed
in the most effective and efficient manner for coal to be shipped
to its destination quickly and reliably. Environmentally friendly
technology was invented to reduce the amount of carbon
emission from the burning of thermal coal.
But none of these initiatives were enough, it seems, to alleviate
the pressure that continues to bear down on the coal industry.
In the past several years, a number of initatives was pursued to
reduce dependency on coal as an energy source – especially
from the point of view of health and environmental considerations
– and to rely more on other energy resources that are deemed
more environmentally friendly or renewable.
China has a big opportunity to capitalise more on the technology
to convert coal into synthetic gas or liquefied fuel. It is estimated
that the gasification of coal will be the basis for new energy
sources for China in the next five years.
Whereas for other markets in Asia aside from China, India
is expected to still rely on low-calorific to medium-calorific
grade coal in growing volumes for the foreseeable future – but
the problem for India is the steep devaluation of the Rupee
against the US Dollar that has made the cost of coal imports
prohibitively expensive for India.
These two developments in China and India have led to
a decline in the market demand for coal that ultimately
contributed to the market oversupply and depressed coal
price. Throughout 2013, the average selling price of coal in
accordance with the Newcastle Index Price was US$85.3 per
ton, compared to US$96.9 per ton in 2012 and US$121.2 per
ton in 2011.
The year 2013 was full of challenges for the coal-mining sector in Indonesia, as well as for the global coal industry in
general. The lingering low global coal price index and an oversupply of the coal market in 2013 had forced most of the coal
players in the world including Indonesia to cut operating costs, reduce workforce, and postpone major capital expenditures
for large-scale developments. According to the International Energy Agency (IEA) in its Medium-Term Coal Market Report
towards the end of 2013, “the global demand for coal will grow at an average rate of 2.3% per annum until 2018.” This
estimate is lower than that of the previous year that predicted the average annual growth rate to be 2.6%, and far below the
actual average annual growth rate between 2007 and 2012, which was 3.4%.
However, the IEA report also stated that despite the declining trend in the growth of global coal demand, coal will remain to
be the primary source for the world’s growing energy consumption, more than the use of any other fossil fuel.
Industry Overview
Indonesia’s Coal Export
Volume (in million tons)
353 384 421
2011 2012 2013
* Source, Indonesian Central Bureau of Statististics
2013 Annual Report 57
The downward price trend above exerts pressure on coal
companies to reduce their operating costs in order to maintain
profitability. Declining coal price also put under pressure on
coal companies that have invested heavily on the basis of coal
prices of several years back – when the price of coal was still
in the range of US$100 per ton.
Needless to say, the current global coal markets tend to be
oversupplied, highly competitive, and are also faced with the
challenges of environmental conservation, forcing every coal
producer to operate efficiently, effectively and be responsive to
market expectations.
Challenges for the Indonesian Coal Industry
Indonesia has been the largest exporter of thermal coal in
the world since 2007 when it took over that distinction from
Australia. In the past five years, Indonesia’s coal production