Advertorial: PT Aneka Tambang

Advertorial: PT Aneka Tambang
Publication: July 26 - Friday

Aneka goes out of its way to boost investor confidence

The recent string of financial scandals in the United States
has clearly taught a valuable lesson to every company throughout
the world on the importance of good corporate governance.

The scandal has been a big surprise to many people as it has
occurred in a country that has a long tradition of transparency
and honesty, as far as corporate management is concerned.

In Asia, the fallout has been unnoticed simply because
investors have mostly discounted the risk of companies that are
not transparent rather than due to the good level of their
transparency and disclosure.

According to a recent report published by McKinsey, the number
of Asian companies that have adopted good corporate governance
principles can be counted on one's fingers because when it comes
to implementation, there are great challenges facing companies,
especially when their boards of directors remain corrupt and lack
transparency.

The same thing happens to most Indonesian companies,
particularly state-owned enterprises (BUMNs). Most people still
see BUMNs as corrupt and lacking transparency. But for state-
owned general mining company PT Aneka Tambang (Antam), this is an
opportunity to create competitive advantage and to show how
transparent it can be.

Antam has made the utmost efforts to improve its corporate
governance, which emphasizes the need for disclosure and
transparency in all aspects of business activities.

The company's listings on the Jakarta Stock Exchange (JSX) in
1997 and then on the Australian Stock Exchanges (ASX) in 1999
have required it to implement a system of disclosure and
transparency on a par with international standards.

According to one Australian banker: "We do recognize that
Aneka Tambang's reporting and transparency has improved over the
six years of our relations. This level of reporting gives us, as
the lender, a greater confidence in our understanding of Aneka
Tambang's business".

To improve its governance, at the end of 2001, Antam assigned
Ernst & Young to conduct a three-month evaluation and assessment
of its efforts. The evaluation considered 12 key elements to
evaluate the pillars of good corporate governance. The majority
of Antam's elements were given a "need improvement rating" but
none were seen to be poor.

Antam's external reporting was rated "good" and in terms of
continuous disclosure, on a par with other international mining
firms.

Antam's President Director D. Aditya Sumanagara says: "Antam
is fully committed to becoming not only a company run according
to the highest standard of corporate governance, but also
recognized as such by the capital market and our shareholders".

"The clear picture of the level of corporate governance
provided by Ernst & Young will allow Antam's management to take
the necessary steps to improve corporate governance and
ultimately achieve our vision for 2010 to become a world class
company," he says.

According to Aditya, the improvement of corporate governance
is needed not only to ensure long-term benefits for the company
and shareholders but also to ensure that Antam is not only
profitable but also transparent and responsible.

Antam's Corporate Secretary, Dohar Siregar, says: "The results
of Ernst & Young's evaluation should be viewed as an indicator of
how far Antam has come on its path to good governance since its
listing on the JSX in 1997".

In May this year, Antam became the only Indonesian-owned and
incorporated company to be fully listed on the ASX. With the full
listing, Antam must abide by all ASX listing rules and meet
international standards of disclosure and transparency.

The JORC code, which is the international standard used for
the disclosure of mining companies, is strictly applied in the
ASX.

A well-known mining equity analyst says: "The need to meet ASX
standards in reserves reporting under the JORC code means that
Antam's reporting is consistent with international standards and
thus its numbers are comparable with other international mining
companies".

The fact that Antam's reporting meets the requirements of the
ASX adds credibility to the information for third parties, he
adds.

Antam's serious efforts in improving its corporate governance
has gained fruitful results not only in improving investor
confidence and its financial performance but also in its public
recognition.

Antam has received several awards for its success in adopting
corporate governance. They include the "Achievement on Corporate
Governance" award from the Indonesian Institute for Corporate
Governance, September 20, 2001 and "One of the Best Public
Companies Based on the EVA Concept" from MarksPlus & Co on
October 26, 2001. Antam also became one of only eight listed
Indonesian companies to receive "Acceptable Corporate Governance"
award from a joint Asian Development Bank and the Jakarta Stock
Exchange governance project on October 25, 2001. Antam was also
ranked by Finance Asia as one of Indonesia's best managed
companies and Asia's best managed companies in 2001.

Currently, Antam is taking steps to protect minority
shareholders' interests through the establishment of an
independent commissioner.